(2_FIDELITY_LOGOS)FIDELITY
MAGELLAN(registered trademark)
FUND
ANNUAL REPORT
MARCH 31, 1996
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over time.
FUND TALK 6 The manager's review of fund
performance, strategy and outlook.
INVESTMENT CHANGES 12 A summary of major shifts in the
fund's investments over the past six
months.
INVESTMENTS 13 A complete list of the fund's
investments with their market
values.
FINANCIAL STATEMENTS 35 Statements of assets and liabilities,
operations, and changes in net
assets, as well as financial
highlights.
NOTES 39 Notes to the financial statements.
REPORT OF INDEPENDENT 49 The auditors' opinion
ACCOUNTANTS
DISTRIBUTIONS 50
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR DISTRIBUTION TO
PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN
EFFECTIVE
PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, THE
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES,
CALL
1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST
OR SEND MONEY.
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
Although the markets were fairly positive in 1995, no one can predict what
lies ahead for investors. The previous year, stocks posted below-average
returns and bonds had one of the worst years in history. This downturn
followed a period in which the investing environment was generally very
positive.
These market ups and downs are a normal part of investing, and there are
some basic principles that are helpful for investors to remember in
different types of markets.
If you can leave your money invested over the long term, you can avoid the
results of the volatility that generally accompanies the stock market in
the short term. You also can help to manage some of the risks of investing
through diversification. A stock fund is already diversified because it
invests in many issues. You can diversify even further by placing some of
your money in several different types of stock funds or in other investment
categories, such as bonds.
If you have a short investment time horizon, you might want to consider
moving some of your investment into a money market fund, which seeks income
and a stable share price by investing in high-quality, short-term
investments. Of course, there is no assurance that a money market fund will
achieve its goal, and it is important to remember that money market funds
are not insured or guaranteed by any agency of the U.S. government.
Finally, no matter what your investment horizon or portfolio diversity, it
makes good sense to follow a regular investment plan - investing a certain
amount of money at the same time each month or quarter - and to review your
portfolio periodically. A periodic investment plan will not, of course,
assure a profit or protect against a loss.
If you have any questions, please call us at 1-800-544-8888. We stand ready
to provide the information you need to make the investments that are right
for you.
Best regards,
Edward C. Johnson 3d
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each
performance figure includes changes in a fund's share price, plus
reinvestment of any dividends (or income) and capital gains (the profits
the fund earns when it sells securities that have grown in value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED MARCH 31, 1996 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Magellan 28.43% 113.99% 314.46%
Magellan
(incl. 3% sales charge) 24.58% 107.57% 302.02%
S&P 500(registered trademark) 32.10% 98.28% 269.84%
Growth Funds Average 28.31% 90.12% 221.20%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one, five, or 10 years. For example, if
you invested $1,000 in a fund that had a 5% return over the past year, the
value of your investment would be $1,050. You can compare the fund's
returns to the performance of the Standard & Poor's Composite Index of 500
Stocks - a common proxy for the U.S. stock market. To measure how the
fund's performance stacked up against its peers, you can compare it to the
growth funds average, which reflects the performance of 584 growth funds
with similar objectives tracked by Lipper Analytical Services over the past
12 months. Both benchmarks include reinvested dividends and capital gains,
if any, and exclude the effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED MARCH 31, 1996 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Magellan 28.43% 16.43% 15.28%
Magellan (incl. 3% sales charge) 24.58% 15.73% 14.93%
S&P 500(registered trademark) 32.10% 14.67% 13.95%
Growth Funds Average 28.31% 13.43% 11.94%
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER 10 YEARS
19860331 9700.00 10000.00
19860430 9743.82 9887.00
19860531 10064.04 10412.99
19860630 10303.93 10588.97
19860731 9616.62 9997.04
19860831 10235.39 10738.83
19860930 9365.31 9850.72
19861031 9854.61 10419.11
19861130 9953.61 10672.30
19861231 9806.01 10400.15
19870131 11080.85 11801.05
19870228 11902.55 12267.19
19870331 12053.60 12621.72
19870430 11860.26 12509.38
19870531 11872.35 12618.21
19870630 12363.83 13255.43
19870731 12968.05 13927.48
19870831 13488.84 14446.98
19870930 13157.43 14130.59
19871031 9762.11 11086.86
19871130 9024.88 10173.30
19871231 9904.12 10947.49
19880131 10296.83 11408.38
19880229 10921.70 11940.01
19880331 10892.06 11571.07
19880430 11087.18 11699.51
19880531 11057.54 11801.29
19880630 11813.32 12342.97
19880731 11736.75 12296.07
19880831 11363.80 11878.00
19880930 11840.49 12384.00
19881031 12087.47 12728.28
19881130 11924.46 12546.26
19881231 12158.76 12765.82
19890131 13145.15 13700.28
19890228 12931.27 13359.15
19890331 13316.26 13670.41
19890430 13985.60 14379.91
19890531 14723.99 14962.29
19890630 14596.25 14877.01
19890731 15822.61 16220.40
19890831 16236.51 16538.32
19890930 16517.55 16470.52
19891031 15998.90 16088.40
19891130 16262.06 16416.60
19891231 16363.80 16810.60
19900131 15308.43 15682.61
19900228 15622.85 15884.92
19900331 16022.03 16305.87
19900430 15617.38 15898.22
19900531 17006.44 17448.30
19900630 17080.35 17329.65
19900731 16887.03 17274.19
19900831 15232.45 15712.61
19900930 14265.85 14947.40
19901031 14089.59 14883.13
19901130 15155.69 15844.58
19901231 15626.02 16286.64
19910131 16718.36 16996.74
19910228 18169.99 18212.01
19910331 18787.15 18652.74
19910430 18856.69 18697.50
19910531 19931.88 19505.24
19910630 18760.65 18611.90
19910731 19925.91 19479.21
19910831 20538.41 19940.87
19910930 20460.73 19607.85
19911031 20735.61 19870.60
19911130 19710.78 19069.81
19911231 22037.12 21251.40
19920131 22046.76 20856.13
19920229 22493.22 21127.26
19920331 21882.95 20715.27
19920430 22207.35 21324.30
19920531 22420.13 21428.79
19920630 22025.22 21109.50
19920731 22643.33 21972.88
19920831 22152.28 21522.44
19920930 22406.39 21776.40
19921031 22564.35 21852.62
19921130 23134.38 22597.79
19921231 23582.93 22875.75
19930131 24204.22 23067.90
19930228 24709.49 23381.63
19930331 25615.23 23874.98
19930430 25865.99 23297.20
19930531 26885.49 23921.57
19930630 27260.42 23990.94
19930731 27561.14 23894.98
19930831 29181.92 24800.60
19930930 29498.27 24609.63
19931031 29517.80 25119.05
19931130 28545.33 24880.42
19931231 29397.91 25181.48
19940131 30559.71 26037.65
19940228 30335.65 25332.02
19940331 28929.03 24227.55
19940430 29219.49 24537.66
19940531 28882.87 24940.08
19940630 27629.73 24329.05
19940731 28554.46 25127.04
19940831 29907.00 26157.25
19940930 29129.18 25516.40
19941031 30114.42 26090.51
19941130 28463.72 25140.30
19941231 28865.59 25513.13
19950131 28571.75 26174.68
19950228 30174.91 27194.71
19950331 31302.74 27997.23
19950430 32758.99 28821.75
19950531 33674.79 29973.75
19950630 36239.78 30670.04
19950731 39021.78 31687.06
19950831 39360.31 31766.59
19950930 40080.76 33107.14
19951031 39056.50 32988.95
19951130 39924.52 34437.17
19951231 39494.88 35100.43
19960131 40064.47 36295.25
19960229 39802.64 36631.70
19960329 40202.28 36984.47
$10,000 OVER 10 YEARS: Let's say you invested $10,000 in Fidelity Magellan
Fund on March 31, 1986, and paid a 3% sales charge. As the chart shows, by
March 31, 1996, the value of your investment would have grown to $40,202 -
a 302.02% increase on your initial investment. For comparison, look at how
the S&P 500 did over the same period. With dividends reinvested, the same
$10,000 investment would have grown to $36,984 - a 269.84% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
growth in the long run and
volatility in the short run. In
turn, the share price and
return of a fund that invests in
stocks will vary. That means if
you sell your shares during a
market downturn, you might
lose money. But if you can
ride out the market's ups and
downs, you may have a gain.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
Strong corporate earnings, a
favorable interest rate
environment and enthusiastic
investor sentiment helped fuel
robust returns in the U.S. stock
market during the 12 months
ended March 31, 1996. The
Standard & Poor's Composite
Index of 500 Stocks finished the
period with a total return of 32.10%
(including reinvested dividends)
- - well above its historical annual
average of roughly 12%. With
inflation posing little threat,
interest rates fell during much of
1995. The Federal Reserve Board
cut the fed funds rate - the rate
banks charge each other for
overnight loans - three times, in
July and December 1995, and
January 1996. Big-name
blue-chip stocks led the rally
through much of 1995.
Technology companies posted
strong earnings growth and stock
price gains, although they
faltered during the second half of
the period. Over the past three
months, the market rally has
shown more breadth, with small-
and mid-cap stocks attracting
investor interest. Statistics
indicating a
stronger-than-anticipated
economy pushed interest rates
higher and stalled the stock
market rally somewhat in late
February and March 1996.
Foreign markets lagged the U.S.
The Morgan Stanley Emerging
Markets Free Index rebounded
from Mexico's December 1994
peso devaluation, rising 14.92%
for the 12 months ended March
31, 1996. The Morgan Stanley
EAFE (Europe, Australasia, Far
East) Index was up 12.33% for the
12-month period.
An interview with Jeffrey Vinik, Portfolio Manager of Fidelity Magellan
Fund
Q. JEFF, HOW HAS THE FUND PERFORMED?
A. The fund did very well relative to its peers during the first half of
the period, while its recent performance has been disappointing. Overall,
the fund had a total return of 28.43% for the 12 months ended March 31,
1996. That slightly exceeded the 28.31% total return of the growth funds
average during the same period, according to Lipper Analytical Services.
Q. SIX MONTHS AGO, YOU DISCUSSED THE IMPACT OF TECHNOLOGY STOCKS ON THE
FUND'S PERFORMANCE. HOW DID THEY CONTINUE TO IMPACT THE FUND THROUGH THE
REMAINDER OF THE PERIOD?
A. During most of the first six months of the period, the fund maintained a
40-plus percent stake in the technology sector. Strong earnings gains and
stock performance from groups such as semiconductors, software companies
and personal computer manufacturers clearly drove the fund's performance
over that time. However, late in 1995, it became increasingly evident that
growth prospects for a host of technology companies were beginning to
deteriorate. Although I reduced the fund's investments in these companies,
their falling stock prices did negatively affect the fund's performance
late in 1995.
Q. CAN YOU EXPLAIN THE FACTORS THAT LED YOU TO CUT BACK THE FUND'S STAKE IN
TECHNOLOGY STOCKS FROM NEARLY 40% SIX MONTHS AGO TO LESS THAN 4% AT THE END
OF THE PERIOD?
A. I reduced the fund's investment in the technology sector for three key
reasons. First, and most importantly, on a bottom-up, stock-by-stock basis,
it became clear to me that many technology companies were showing a slowing
in revenue growth and the potential for pressure on profits. It was my view
that earnings disappointments would affect a wide variety of technology
companies. Second, many of these stocks had been excellent performers
earlier in the year and in past years. As they became more fully valued -
that is, their stock prices relative to their earnings - I took some
profits. Third, I believed that there was significant speculation building
in the technology sector. This was evidenced mainly by the sheer number of
technology initial public offerings, or IPOs, coming to market as well as
strong investor demand and high stock valuations that frequently surrounded
companies with negative earnings and little revenue. Internet stocks were
an example of this. Often, when there is so much hype and speculation in
one sector of the market, the risk/reward equation has the potential to
tilt more heavily in the direction of risk.
Q. IT APPEARS AS IF YOU INVESTED MUCH OF THE CASH THAT RESULTED FROM THE
SALE OF TECHNOLOGY STOCKS IN LONG-TERM TREASURY BONDS . . .
A. That's true. As I sold technology stocks in late 1995, I wanted to
exercise caution while reinvesting the proceeds. I strongly believed, in
light of market conditions, it was in the best interests of the fund's
shareholders to invest slowly, over time, as company business prospects
dictated. As I surveyed the marketplace, I concluded that Treasury bonds
had good long-term potential for capital appreciation.
Q. WHY DID YOU FIND BONDS ATTRACTIVE?
A. Several reasons. First, as the economy remained sluggish and stock
valuations rose to high levels, it became somewhat more difficult to find
stocks with strong earnings prospects coupled with attractive valuations.
Second, history has shown that during periods of relatively low corporate
earnings growth - which I believe may occur in 1996 - long-term Treasury
bonds have tended to outperform stocks. Third, by several measures - such
as relative yield - stocks appeared historically overvalued relative to
bonds. Finally, similar to what was occurring in the technology sector late
in 1995, I believed there was considerable speculation in the stock market
overall. Unprecedented amounts of money have flowed into stocks, which has
led to high expectations and low levels of fear among investors - the
opposite environment from late 1994, when the fund was aggressively
positioned in the market. In the past, such high levels of optimism have
been a good reason to become somewhat cautious in terms of the stock
market.
Q. SO ARE THE BONDS A DEFENSIVE MANEUVER?
A. Not at all. Obviously, market conditions can change quickly, but I was
looking out 12 to 24 months when I invested in these long-term Treasuries.
Fiscal and monetary policies in Washington have remained restrictive, and I
believe there's a good likelihood inflation can stay in check. And again,
importantly, I was especially positive on the potential return from
Treasuries relative to the potential return from stocks.
Q. BUT DURING THE FIRST THREE MONTHS OF 1996, BOND YIELDS HAVE RISEN AND
PRICES HAVE FALLEN . . .
A. Although it's important to remember that the fund is looking out over a
long-term horizon, rather than just a few months, rising bond yields have
hurt the fund's recent performance. During the first three months of 1996,
the long-term Treasury market fell roughly 7% while the broad stock market
- - as represented by the S&P 500 index - was up more than 5%. I believe that
stock market performance has rested largely on the shoulders of the
powerful market inflows I mentioned earlier. As for bonds, recent economic
numbers have been stronger than expected, and there's been some upward
pressure on commodity prices. That has resulted in a round of inflationary
fears, which has negatively impacted the bond market. However, if you look
at the history of the financial markets, my research shows the performances
of stocks and bonds have not decoupled - that is, moved in opposite
directions - for very long stretches. As of March 31, given the continued
absence of heavy inflationary pressures and the historically inexpensive
valuations of bonds relative to stocks, it continued to be my view that the
fund's investment in Treasury bonds was in the best long-term interests of
shareholders.
Q. THE FUND'S POSITION IN CASH AND SHORT-TERM INVESTMENTS WAS ABOUT 11% ON
MARCH 31, BUT WAS AS HIGH AS 16% DURING THE PERIOD. IS THAT UNUSUAL?
A. It's not unusual for the fund's cash position to move to between 10% and
20% for relatively short periods. Again, after I sold much of the fund's
stake in technology stocks - which raised the fund's cash position - I
wanted to proceed carefully. Going forward, the fund's cash position
provides me with an opportunity to invest in companies that I believe offer
excellent business prospects and reasonable stock valuations as they become
available.
Q. IN LOOKING AT THE FUND'S STOCK INVESTMENTS, IT APPEARS AS IF YOU'VE
CONTINUED TO FAVOR CYCLICALS - THOSE COMPANIES THAT TEND TO MOVE IN TANDEM
WITH THE ECONOMY. WHERE HAVE YOU FOUND OPPORTUNITIES?
A. The fund's sizable stake in cyclicals covers several sectors, including
construction and real estate, durables, industrial machinery and equipment,
and transportation. I've maintained - and in some cases increased -
investments in cyclicals over the past six months. First, I remained a very
strong believer in the competitiveness of U.S. manufacturers. In the 1980s,
the manufacturing sector tended to operate in cycles of "boom, bust" -
experiencing initial periods of profitability before corporate earnings
trended down again. However, I believe the decade of the 1990s may well be
a period of "boom, boom" for manufacturers, given the cost competitiveness
of U.S. companies and trends in the U.S. economy toward manufacturing and
away from consumer spending. Furthermore, the valuations of cyclical
companies during the period were very attractive relative to the broad
market, mainly for two reasons. First, late in 1995, cyclicals lagged as
investors feared an economic recession, which would have hurt the earnings
of these companies. Second, I think investors have been reluctant to reward
cyclical companies with higher valuations largely because they are looking
in the rear view mirror at the trends of the 1980s. I believe that - if the
economy grows steadily - cyclical valuations could expand as the market
recognizes the improvements these companies have made to enhance their
profitability. In fact, the performance of many of the fund's cyclical
investments picked up during the first quarter of 1996.
Q. WHAT CYCLICAL COMPANIES HAVE PROVIDED THE GREATEST OPPORTUNITY?
A. Auto companies remained a strong emphasis. These companies generally
experienced strong earnings growth during the early 1990s. Although profits
softened in 1995, a pick-up in the economy and firming in worldwide auto
sales had improved these companies' earnings prospects by the end of the
period. In addition, the fund remained heavily invested in industrial
companies, such as farm and heavy equipment manufacturers and railroads.
Q. ISN'T THE FUND'S INVESTMENT IN CYCLICALS - WHICH TEND TO DO WELL WHEN
THE ECONOMY DOES WELL - AT ODDS WITH ITS INVESTMENT IN BONDS, WHICH TEND TO
LAG IN PERIODS OF RAPID ECONOMIC GROWTH AND HIGH INFLATION?
A. That's a good question. Historically, cyclicals and bonds have not
tended to move in tandem, but there have been exceptions - most recently in
1993. I think it's important to bear in mind that I view every investment
on a bottom-up basis relative to other investments. For example, I look at
stocks relative to the overall market, stocks relative to their historical
valuations and stocks relative to bonds. At the end of March, among U.S.
securities, cyclicals appeared among the most attractive stocks relative to
the market. At the same time, bonds appeared undervalued relative to
stocks.
Q. YOU'VE ALSO CUT THE FUND'S STAKE IN FINANCIAL STOCKS ROUGHLY IN HALF
OVER THE PAST SIX MONTHS AND GREATLY INCREASED ITS INVESTMENT IN ENERGY
COMPANIES. CAN YOU EXPLAIN THESE SHIFTS?
A. Sure. The fund's stake in financials has decreased mainly due to profit
taking. For example, I reduced investments in brokerage stocks, which had
performed strongly over the preceding 12 to 18 months. As for the energy
sector, I've increased the fund's investments in large oil and natural gas
companies, as well as oil service companies. Oil and gas inventories have
been at low levels in the U.S., and historically these conditions have
preceded rising prices for these basic commodities as well as energy
stocks. In addition, several oil companies and oil service companies have
reaped the benefits of cost cutting and restructuring in recent years,
which has left them well positioned to potentially benefit from an upturn
in oil prices. Finally, valuations across many energy stocks remained quite
low, especially relative to the overall market at the end of the period.
The combination of these factors led me to increase the fund's energy stake
from 1.4% six months ago to nearly 11% at March 31.
Q. LET'S TALK ABOUT YOUR OUTLOOK IN GENERAL. ARE YOU BEARISH ON THE STOCK
MARKET?
A. No, but I am cautious. I believe that shareholders must realize that
1995's strong stock market performance was very unusual, and they should
not expect that level of return to continue. As I've said many times,
predicting near-term stock market movements is a flip of the coin. That
said, I do think stocks overall have become expensive on a historical
basis. In addition, there's been quite a bit of euphoria surrounding the
stock market in general and certain sectors in particular. Thus, in this
environment, I believe it's especially important to take a long-term view
and not just embrace what happens to be popular at the moment. It is for
these reasons the fund has emphasized those sectors where investor
expectations are low - such as Treasury bonds and cyclical stocks - and
where the risk/reward picture therefore has the potential to be positive on
a long-term basis. As always, I'll continue to search the broad landscape
for those investments that I believe can provide shareholders with the best
possible total return over the long term.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.
FUND FACTS
GOAL: to increase the value
of the fund's shares over the
long term by investing mainly
in equity securities with
growth potential
START DATE: May 2, 1963
SIZE: as of March 31, 1996,
more than $56 billion
MANAGER: Jeffrey Vinik,
since July 1992; manager,
Fidelity Growth & Income
Portfolio, 1990 -1992;
Fidelity Contrafund,
1989-1990; securities
analyst, 1986 -1989; joined
Fidelity in 1986
(checkmark)
JEFF VINIK ON THE IMPORTANCE OF
INDEPENDENT THINKING:
"I believe it's critical not to be
part of the herd when investing
in financial markets. Just
because most investors are
moving in a particular direction
doesn't make it the best
direction; in fact, often it has
meant the opposite. History
shows that when investors
have poured into one area of
the financial markets - be it
gold and oil in the late 1970s,
real estate in the 1980s, or
perhaps stocks today -
future returns in that area
tended to be dampened.
Throughout 1995, and even
more so thus far in 1996, the
herd continued to pour heavily
into the stock mar- ket -
virtually ignoring bonds. That
environment, coupled with the
historically low valuations of
bonds relative to stocks, in my
opinion, made high-quality
bonds appear attractive on
the basis of risk relative to
potential reward.
"In addition, I believe it's
important to be early to fully
realize the benefits of an
investment decision. For
example, the fund built a
sizable stake in technology in
1994 when stocks were cheap
and earnings prospects were
very favorable. But that
strategy didn't pay dividends
until 1995, when larger
numbers of investors began to
see the same thing. Investing is
an art, and one never knows
exactly when investments will
pay off. I believe that patience
- - and being in the right place
early in the game - are very
important to the long-term
success of Magellan Fund."
INVESTMENT CHANGES
TOP TEN STOCKS AS OF MARCH 31, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE STOCKS
6 MONTHS AGO
Chrysler Corp. 2.1 2.0
General Motors Corp. 2.1 1.4
Caterpillar, Inc. 1.9 1.5
Digital Equipment Corp. 1.4 0.8
Deere & Co. 1.4 0.8
CSX Corp. 1.2 1.2
Columbia/HCA Healthcare Corp. 0.9 1.5
Conrail, Inc. 0.9 0.8
Exxon Corp. 0.9 0.0
Royal Dutch Petroleum Co. 0.9 0.0
TOP FIVE MARKET SECTORS AS OF MARCH 31, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE MARKET SECTORS
6 MONTHS AGO
Energy 10.7 1.4
Durables 9.4 7.7
Industrial Machinery & Equipment 8.4 9.3
Finance 8.0 14.9
Basic Industries 6.4 2.5
ASSET ALLOCATION
AS OF MARCH 31, 1996 * AS OF SEPTEMBER 30, 1995 **
Row: 1, Col: 1, Value: 0.0
Row: 1, Col: 2, Value: 10.7
Row: 1, Col: 3, Value: 19.0
Row: 1, Col: 4, Value: 35.3
Row: 1, Col: 5, Value: 35.0
Row: 1, Col: 1, Value: 2.0
Row: 1, Col: 2, Value: 4.1
Row: 1, Col: 3, Value: 3.9
Row: 1, Col: 4, Value: 45.0
Row: 1, Col: 5, Value: 45.0
Stocks and
equity futures 70.3%
Bonds 19.0%
Short-term
investments 10.7%
Other 0.0%
FOREIGN
INVESTMENTS 7.1%
Stocks 93.9%
Bonds 2.9%
Short-term
investments 3.1%
Other 0.1%
FOREIGN
INVESTMENTS 8.2%
*
**
INVESTMENTS MARCH 31, 1996
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 70.0%
SHARES VALUE (NOTE 1)
(000S)
AEROSPACE & DEFENSE - 0.9%
Boeing Co. 4,905,800 $ 424,964
Flightsafety International, Inc. 500,000 27,875
General Motors Corp. Class H 79,300 5,016
Harsco Corp. 321,900 21,326
Northrop Grumman Corp. 180,900 11,510
Sundstrand Corp. 42,200 1,720
492,411
BASIC INDUSTRIES - 6.3%
CHEMICALS & PLASTICS - 2.0%
Agrium, Inc. 501,700 6,505
Air Products & Chemicals, Inc. 129,000 7,047
Airgas, Inc. (a) 40,100 1,594
Atlantis Group, Inc. (Trivest/Winston) (a)(h) 77,269 473
Dow Chemical Co. 796,200 69,030
du Pont (E.I.) de Nemours & Co. 300,000 24,900
Eastman Chemical Co. 102,500 7,085
Engelhard Corp. 1,153,600 26,965
Georgia Gulf Corp. par $0.01 185,000 6,938
Grace (W.R.) & Co. 323,100 25,283
Hanna (M.A.) Co. (g) 3,556,150 123,576
Hercules, Inc. 467,800 29,004
IMC Fertilizer Group, Inc. 2,249,160 82,094
Loctite Corp. 303,000 15,302
Lyondell Petrochemical Co. 1,720,900 52,487
Minnesota Mining & Manufacturing Co. 470,100 30,498
Morton International, Inc. 1,833,500 70,361
Nalco Chemical Co. 552,300 16,983
PPG Industries, Inc. 964,700 47,150
Potash Corp. of Saskatchewan 98,300 6,210
Praxair, Inc. 3,973,030 158,425
Rohm & Haas Co. 2,479,900 164,912
Schulman (A.), Inc. (g) 2,722,025 57,503
Sealed Air Corp. (a) 1,372,500 46,837
Sekisui Chemical Co. Ltd. 1,619,000 21,129
Trivest 1992 Special Fund Ltd. loan 26.6(k) 2,899
Union Carbide Corp. 584,700 29,016
1,130,206
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
BASIC INDUSTRIES - CONTINUED
IRON & STEEL - 1.9%
AK Steel Holding Corp. (g) 2,606,000 $ 103,914
Allegheny Ludlum Industries, Inc. 328,800 6,083
Bethlehem Steel Corp. (a)(g) 11,258,400 147,767
Birmingham Steel Corp. 398,900 5,884
British Steel PLC:
Ord. 4,050,000 11,746
ADR (final installment) 286,800 8,461
Carpenter Technology Corp. 530,600 20,428
Dofasco, Inc. 2,600,800 38,507
Inland Steel Industries, Inc. (g) 4,877,200 120,711
J & L Specialty Steel, Inc. 845,000 14,471
Kobe Steel Ltd. Ord. (a) 2,733,000 8,433
LTV Corp. 4,233,181 55,031
LTV Corp. (warrants) (a) 1,013,857 2,154
Mueller Industries, Inc. (a)(g) 1,088,600 38,509
Nucor Corp. 4,177,200 246,977
USX-U.S. Steel Group (g) 6,468,000 223,955
WHX Corp. (a)(g) 1,682,200 18,925
Worthington Industries, Inc. 1,043,000 20,730
1,092,686
METALS & MINING - 1.4%
Alcan Aluminium Ltd. 6,178,114 199,990
Alumax, Inc. 800,000 28,300
Aluminum Co. of America 3,286,500 205,817
ASARCO, Inc. 582,200 20,377
Broken Hill Proprietary Co. Ltd. (The) 3,810,500 54,313
Cyprus Amax Minerals Co. 866,300 24,473
Freeport-McMoRan Copper & Gold, Inc. Class B 731,800 23,143
Freeport-McMoRan, Inc. par $0.01 40,000 1,595
Inco Ltd. 231,000 7,308
Kaiser Aluminum Corp. (a) 22,600 347
Noranda, Inc. 3,150,231 66,632
Phelps Dodge Corp. 994,000 68,213
RTZ PLC Ord. 2,716,000 39,345
Reynolds Metals Co. 707,100 41,807
781,660
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
BASIC INDUSTRIES - CONTINUED
PACKAGING & CONTAINERS - 0.1%
Ball Corp. 433,350 $ 13,434
Corning, Inc. 446,600 15,630
Crown Cork & Seal Co., Inc. 150,000 7,313
Crown Packaging Holdings Ltd. (warrants) (a) 5,000 40
36,417
PAPER & FOREST PRODUCTS - 0.9%
Albany International Corp. Class A 1,428,800 28,576
Champion International Corp. 463,100 20,955
Georgia-Pacific Corp. 2,302,900 159,764
International Paper Co. 4,817,000 189,669
Louisiana-Pacific Corp. 3,120,600 76,065
Potlatch Corp. 11,100 475
Union Camp Corp. 125,000 6,203
Weyerhaeuser Co. 802,000 36,992
518,699
TOTAL BASIC INDUSTRIES 3,559,668
CONGLOMERATES - 1.1%
Allied-Signal, Inc. 2,138,200 126,421
American Standard Companies, Inc. (a) 712,700 20,846
Brascan Ltd. Class A 1,148,600 20,809
Crane Co. 835,700 33,741
ITT Industries, Inc. 944,400 24,082
Mark IV Industries, Inc. (g) 5,372,828 118,202
Suncor, Inc. 1,102,000 34,963
Textron, Inc. 624,300 49,944
Tyco International Ltd. 3,482,900 124,515
United Technologies Corp. 420,300 47,179
600,702
CONSTRUCTION & REAL ESTATE - 3.7%
BUILDING MATERIALS - 2.3%
Armstrong World Industries, Inc. 1,546,400 96,070
Carlisle Companies, Inc. (g) 1,081,400 46,906
Centex Construction Products, Inc. (g) 1,559,000 21,241
Lafarge Corp. (g) 5,451,811 102,903
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
CONSTRUCTION & REAL ESTATE - CONTINUED
BUILDING MATERIALS - CONTINUED
Manville Corp. (a) 1,024,600 $ 14,344
Masco Corp. 6,855,800 198,818
Medusa Corp. (g) 1,645,900 50,406
National House Industrial Co. Ltd. 301,000 5,107
Owens-Corning (a)(g) 4,361,600 175,009
Premdor, Inc. (a)(g) 3,008,900 21,306
Sherwin-Williams Co. (g) 5,821,460 258,329
Southdown, Inc. (g) 1,538,300 36,342
Texas Industries, Inc. (g) 1,248,900 79,461
Tostem Corp. 237,000 7,379
USG Corp. (g) 3,792,000 96,222
United Dominion Industries Ltd. 1,958,200 47,541
Vulcan Materials Co. 809,500 45,838
1,303,222
CONSTRUCTION - 0.7%
Centex Corp. (g) 1,834,700 56,876
Clayton Homes, Inc. 1,263,750 26,381
Daiwa House Industry Co. Ltd. 1,394,000 21,831
Daito Trust Construction 179,100 2,154
Jacobs Engineering Group, Inc. (a) 355,900 10,054
Kaufman & Broad Home Corp. 1,482,200 23,715
Lennar Corp. 925,300 23,017
Oakwood Homes Corp. (g) 1,970,600 97,791
Pulte Corp. (g) 2,695,300 72,436
Sekisui House Ltd. 2,590,000 32,352
Sumitomo Forestry Co. Ltd. 151,000 2,308
Toll Brothers, Inc. (a)(g) 3,040,700 52,452
421,367
ENGINEERING - 0.7%
Fluor Corp. (g) 4,677,800 319,260
Foster Wheeler Corp. 1,352,900 60,035
379,295
TOTAL CONSTRUCTION & REAL ESTATE 2,103,884
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
DURABLES - 9.4%
AUTOS, TIRES, & ACCESSORIES - 7.3%
Autozone, Inc. (a) 3,092,900 $ 104,772
Borg-Warner Automotive, Inc. 808,800 26,893
Chrysler Corp. (g) 19,208,900 1,195,751
Cooper Tire & Rubber Co. 798,400 20,559
Cummins Engine Co., Inc. 706,800 28,537
Dana Corp. 3,915,500 130,680
Danaher Corp. 1,992,400 73,719
Eaton Corp. 938,700 56,557
Echlin, Inc. (g) 4,961,700 179,862
Ford Motor Co. 3,100,000 106,563
General Motors Corp. 22,423,059 1,194,028
Genuine Parts Co. 2,838,100 127,715
Goodyear Tire & Rubber Co. 5,944,000 303,144
Honda Motor Co. Ltd. 2,747,000 59,665
Johnson Controls, Inc. 1,360,100 101,497
Lear Seating Corp. (a) 1,078,500 35,186
Magna International, Inc. Class A 2,290,530 106,164
NACCO Industries, Inc. Class A (g) 818,846 46,572
Navistar International Corp. (a) 359,900 3,734
Pep Boys-Manny, Moe & Jack 1,001,200 33,540
Smith (A.O.) Corp. Class B (g) 1,900,600 44,902
TRW, Inc. 686,700 61,202
Toyota Motor Corp. 4,220,000 92,838
4,134,080
CONSUMER ELECTRONICS - 1.2%
Black & Decker Corp. (g) 7,228,400 273,776
Harman International Industries, Inc. 424,890 15,933
Maytag Co. (g) 7,148,800 144,763
Newell Co. 371,200 9,930
Sony Corp. 1,845,500 109,930
Sunbeam-Oster, Inc. 1,203,000 20,451
Whirlpool Corp. 1,627,800 89,936
664,719
HOME FURNISHINGS - 0.3%
Leggett & Platt, Inc. (g) 8,088,700 185,029
Polyvision Corp. (a) 19,260 42
185,071
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
DURABLES - CONTINUED
TEXTILES & APPAREL - 0.6%
Adidas AG (a)(i) 80,000 $ 5,851
Fila Holding Spa sponsored ADR 779,000 49,759
Jones Apparel Group, Inc. (a) 352,400 17,091
Liz Claiborne, Inc. 1,247,800 42,737
NIKE, Inc. Class B 122,700 9,969
Nine West Group, Inc. (a) 629,900 27,243
Shaw Industries, Inc. (g) 7,062,300 77,685
Tommy Hilfiger (a) 1,383,500 63,469
Warnaco Group, Inc. Class A 202,400 4,883
298,687
TOTAL DURABLES 5,282,557
ENERGY - 10.7%
ENERGY SERVICES - 2.3%
Baker Hughes, Inc. 3,167,200 92,641
Dresser Industries, Inc. (g) 9,926,200 302,749
ENSCO International, Inc. (a)(g) 3,096,900 86,326
Global Marine, Inc. (a)(g) 12,845,400 128,454
Halliburton Co. 1,699,000 96,631
Nabors Industries, Inc. (a) 2,765,100 39,403
Noble Drilling Corp. (a) 2,877,700 35,612
Parker Drilling Co. 1,745,700 12,220
Rowan Companies, Inc. (a) 3,187,200 40,637
Schlumberger Ltd. 3,611,200 285,736
Sonat Offshore Drilling, Inc. 987,400 50,357
Tidewater, Inc. (g) 3,270,970 124,297
1,295,063
OIL & GAS - 8.4%
Amerada Hess Corp. 413,800 22,759
Amoco Corp. 4,176,200 301,730
Anadarko Petroleum Corp. 2,027,200 112,510
Apache Corp. (g) 7,737,215 207,938
Atlantic Richfield Co. 2,254,600 268,297
British Petroleum PLC:
Ord. 22,743,300 198,932
ADR 1,591,100 169,054
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
ENERGY - CONTINUED
OIL & GAS - CONTINUED
Burlington Resources, Inc. 3,933,500 $ 146,031
Canadian Natural Resources Ltd. (a)(g) 4,551,300 78,687
Canada Occidental Petroleum Ltd. 2,990,200 101,195
Chevron Corp. 3,404,100 191,055
Devon Energy Corp. 904,100 21,246
Enron Oil & Gas Co. 7,598,200 200,403
Exxon Corp. 6,065,300 495,080
Kerr-McGee Corp. 144,900 9,201
Mobil Corp. 2,740,100 317,509
Noble Affiliates, Inc. (g) 5,006,600 162,715
Occidental Petroleum Corp. 7,667,700 205,111
Parker & Parsley Petroleum Co. (g) 1,765,200 40,600
Phillips Petroleum Co. 2,250,400 88,891
Poco Petroleums Ltd. (a) 3,106,700 26,570
Pogo Producing Co. 1,434,764 44,836
Renaissance Energy Ltd. (a)(g) 8,731,300 229,644
Renaissance Energy Ltd. (a)(i) 765,000 20,120
Royal Dutch Petroleum Co. 3,447,400 486,946
Seagull Energy Corp. (a)(g) 1,933,000 43,734
Snyder Oil Corp. 1,262,000 10,569
Talisman Energy, Inc. (a) 3,516,200 80,516
Texaco, Inc. 2,667,700 229,422
Triton Energy Ltd. Class A 490,000 27,318
Union Pacific Resources Group, Inc. 1,654,400 43,842
Unocal Corp. 4,334,900 144,677
4,727,138
TOTAL ENERGY 6,022,201
FINANCE - 8.0%
BANKS - 0.9%
Asahi Bank Ltd. ADR 1,609,000 19,199
Chemical Banking Corp. 66,900 4,783
Dai-Ichi Kangyo Bank 2,513,000 48,960
Fuji Bank Ltd. 2,758,000 59,903
Industrial Bank of Japan 1,639,000 45,072
Mitsubishi Bank of Japan 4,822,350 101,594
Mitsubishi Trust & Banking Corp. 1,503,000 23,818
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - CONTINUED
BANKS - CONTINUED
Mitsui Trust and Banking 1,532,000 $ 17,137
Sakura Bank Ltd. 2,604,000 29,614
Sanwa Bank Ltd. 1,884,000 37,759
Sumitomo Bank Ltd. 3,480,000 70,070
Sumitomo Trust & Banking Co. Ltd. 1,706,000 23,377
Tokai Bank Ltd. 1,229,000 15,237
496,523
CREDIT & OTHER FINANCE - 0.3%
Acom Co. Ltd. 96,300 3,707
Equitable Companies, Inc. 2,416,100 58,590
Green Tree Financial Corp. 794,500 27,311
Greenpoint Financial Corp. 1,123,400 30,894
Household International, Inc. 451,712 30,378
Non-Performing Mortgage Loan Trust (a) 961 48
150,928
FEDERAL SPONSORED CREDIT - 1.6%
Federal Home Loan Mortgage Corp. 4,405,400 375,560
Federal National Mortgage Association 14,748,000 470,093
Student Loan Marketing Association 721,200 55,172
900,825
INSURANCE - 4.5%
Aetna Life & Casualty Co. 1,665,200 125,723
Allstate Corp. 6,713,700 282,815
American International Group, Inc. 4,919,500 460,587
CIGNA Corp. 3,706,500 423,468
Chubb Corp. (The) 2,793,500 262,240
Conseco, Inc. 299,500 21,676
Equitable Iowa Companies (g) 1,823,100 65,176
General Re Corp. 1,834,000 267,306
ITT Hartford Group, Inc. 443,500 21,732
Lincoln National Corp. 528,700 26,832
MBIA, Inc. 1,146,600 85,995
MGIC Investment Corp. 878,900 47,900
Mid Ocean Ltd. 1,101,800 42,557
Old Republic International Corp. 298,200 9,692
Reliastar Financial Corp. 1,644,700 74,423
SAFECO Corp. 112,400 3,765
SunAmerica, Inc. 1,486,850 74,900
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - CONTINUED
INSURANCE - CONTINUED
Tokio Marine & Fire Insurance Co. Ltd. (The) 3,674,000 $ 47,605
Transatlantic Holdings, Inc. 248,600 16,967
Travelers, Inc. (The) 1,769,630 116,796
UNUM Corp. 423,600 25,204
USLife Corp. 1,516,700 44,553
2,547,912
SAVINGS & LOANS - 0.1%
Charter One Financial Corp. 1,344,560 45,379
Washington Mutual, Inc. 1,258,400 37,437
82,816
SECURITIES INDUSTRY - 0.6%
Bear Stearns Companies, Inc. 250,073 6,189
Daiwa Securities Co. Ltd. 3,422,000 51,996
Edwards (A.G.), Inc. 202,400 5,035
Nikko Securities Co. Ltd. 4,437,000 56,251
Nomura Securities Co. Ltd. 5,142,000 112,642
PaineWebber Group, Inc. 1,553,775 34,183
Quick & Reilly Group, Inc. (The) 10,000 295
Salomon, Inc. 912,500 34,219
Yamaichi Securities Co. Ltd. 5,109,000 39,291
340,101
TOTAL FINANCE 4,519,105
HEALTH - 1.8%
DRUGS & PHARMACEUTICALS - 0.4%
Genentech, Inc. special (a) 695,100 36,580
Pfizer, Inc. 2,018,300 135,226
Sigma Aldrich Corp. 170,700 9,773
Takeda Chemical Industries Ltd. 1,412,000 21,981
Yamanouchi Pharmaceutical Co. Ltd. 798,000 17,704
221,264
MEDICAL EQUIPMENT & SUPPLIES - 0.1%
Pall Corp. 1,492,300 38,240
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
HEALTH - CONTINUED
MEDICAL FACILITIES MANAGEMENT - 1.3%
Columbia/HCA Healthcare Corp. 9,234,102 $ 533,270
HEALTHSOUTH Rehabilitation Corp. (a) 2,942,700 100,052
Health Management Associates, Inc. Class A (a) 146,637 5,132
OrNda Healthcorp (a) 1,022,900 29,408
Tenet Healthcare Corp. 1,419,300 29,805
Vencor, Inc. (a) 2,494,769 86,070
783,737
TOTAL HEALTH 1,043,241
HOLDING COMPANIES - 0.6%
CINergy Corp. 776,000 23,280
Leucadia National Corp. 37,600 935
Norfolk Southern Corp. 3,486,700 296,370
320,585
INDUSTRIAL MACHINERY & EQUIPMENT - 8.4%
ELECTRICAL EQUIPMENT - 1.2%
Amphenol Corp. Class A (a) 1,176,000 27,489
Anixter International, Inc. (a) 171,800 2,899
Asea AB:
sponsored ADR 45,100 4,657
Series A 125,750 13,060
Emerson Electric Co. 4,618,100 372,912
General Electric Co. 1,093,200 85,133
General Signal Corp. 2,352,600 85,282
Grainger (W.W.), Inc. 101,900 6,840
Honeywell, Inc. 901,800 49,824
Omron Corp. 1,320,000 29,162
677,258
INDUSTRIAL MACHINERY & EQUIPMENT - 7.2%
AGCO Corp. (g) 3,354,700 80,932
Briggs & Stratton Corp. 429,000 18,501
Case Corp. (g) 6,916,000 351,852
Caterpillar, Inc. (g) 15,532,400 1,056,203
Cincinnati Milacron, Inc. (g) 3,390,500 89,001
Deere & Co. (g) 18,816,600 785,593
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED
INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED
Dover Corp. 644,400 $ 29,481
Duriron Co., Inc. (g) 1,623,900 44,657
Global Industrial Technologies, Inc. 358,300 8,599
Greenfield Industries, Inc. (g) 1,290,500 44,684
Harnischfeger Industries, Inc. 1,459,500 56,556
IDEX Corp. (g) 1,268,550 49,315
Illinois Tool Works, Inc. 4,788,200 309,437
Ingersoll-Rand Co. (g) 7,405,200 301,762
Kaydon Corp. (g) 886,900 31,042
Kennametal, Inc. (g) 2,663,354 96,214
Parker-Hannifin Corp. (g) 5,506,650 206,499
Singer Co. 722,000 19,223
Stanley Works 200,000 11,000
Thermadyne Holdings Corp. (a) 2,788 52
Timken Co. 1,472,001 67,896
Toro Co. 543,700 17,466
TRINOVA Corp. (g) 2,877,400 91,717
UCAR International, Inc. (a)(g) 3,532,200 137,314
Varity Corp. (a)(g) 3,869,600 167,360
4,072,356
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 4,749,614
MEDIA & LEISURE - 1.5%
BROADCASTING - 0.2%
Comcast Corp. Class A special 459,300 8,124
TCI Group Class A 1,691,500 31,398
Time Warner, Inc. 1,640,265 67,046
106,568
ENTERTAINMENT - 0.0%
Carnival Cruise Lines, Inc. Class A 890,900 24,500
LEISURE DURABLES & TOYS - 0.2%
Callaway Golf Co. 1,818,200 48,637
Mattel, Inc. 2,179,168 59,110
107,747
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
MEDIA & LEISURE - CONTINUED
LODGING & GAMING - 1.0%
Bally Gaming International, Inc. (warrants) (a) 225,000 $ 675
Bally's Grand, Inc. (warrants) (a) 61,691 640
Hilton Hotels Corp. 1,104,300 103,804
Host Marriott Corp. (g) 15,660,500 211,418
ITT Corp. 2,576,500 154,590
La Quinta Motor Inns, Inc. 1,731,612 50,866
Maritime Group Ltd. (warrants) (a) 17,040 -
Prime Hospitality Corp. (a)(g) 3,077,600 41,932
Sun International Hotels Ltd. Ord. (a) 698 25
563,950
PUBLISHING - 0.1%
Dun & Bradstreet Corp. 464,300 28,148
Harcourt General, Inc. 440,800 20,001
48,149
RESTAURANTS - 0.0%
Host Marriott Services Corp. (a)(g) 3,132,100 21,925
TOTAL MEDIA & LEISURE 872,839
NONDURABLES - 0.3%
AGRICULTURE - 0.1%
Pioneer Hi-Bred International, Inc. 999,100 52,578
BEVERAGES - 0.0%
Heileman G Brewing, Inc. Unit Class 1 (non-vtg.) (a)(h) 340 340
HOUSEHOLD PRODUCTS - 0.1%
Premark International, Inc. 537,100 28,802
TOBACCO - 0.1%
Philip Morris Companies, Inc. 882,800 77,465
TOTAL NONDURABLES 159,185
PRECIOUS METALS - 0.6%
Barrick Gold Corp. 3,090,400 94,355
Echo Bay Mines Ltd. 1,996,114 27,535
Homestake Mining Co. 975,900 18,908
Newmont Gold Co. 205,300 11,522
Newmont Mining Corp. 2,003,000 113,420
Placer Dome, Inc. 2,434,900 69,863
Santa Fe Pacific Gold Corp. 570,200 9,123
344,726
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
RETAIL & WHOLESALE - 3.3%
APPAREL STORES - 0.1%
Dylex Ltd. (a) 16,128 $ 21
Dylex Ltd. (warrants) (a) 5,289 1
Gap, Inc. 1,459,800 80,836
Lamonts Apparel, Inc. (a):
(New) 143,486 37
(warrants) 264,824 -
80,895
DRUG STORES - 0.3%
Eckerd Corp. (a) 53,500 2,575
General Nutrition Companies, Inc. (a) 1,047,900 26,198
Revco (D.S.), Inc. (a)(g) 3,913,297 107,616
Rite Aid Corp. 949,900 29,328
165,717
GENERAL MERCHANDISE STORES - 0.6%
Consolidated Stores Corp. (a) 1,523,200 51,027
Federated Department Stores, Inc. (a) 2,325,400 74,993
Federated Department Stores, Inc. Class C (warrants) (a) 341,542 4,227
Federated Department Stores, Inc. Class D (warrants) (a) 341,542 4,099
Hills Stores Co. (a) 2,979 35
Ito-Yokado Co. Ltd. sponsored ADR 623,000 36,878
May Department Stores Co. (The) 1,081,150 52,165
Price/Costco, Inc. (a) 1,146,800 21,503
Sears, Roebuck & Co. 1,520,800 74,139
319,066
GROCERY STORES - 0.5%
Food 4 Less Holdings, Inc. (warrants) (a)(h) 1,169 29
Great Atlantic & Pacific Tea Co., Inc. 832,100 25,795
Grand Union Capital Corp. Class B (a) 6,979 -
Kroger Co. (The) (a) 161,900 6,557
Safeway, Inc. (a) 5,206,200 148,377
Stop & Shop Companies, Inc. (a)(g) 3,766,100 124,281
305,039
RETAIL & WHOLESALE, MISCELLANEOUS - 1.8%
Barnes & Noble, Inc. (a) 880,900 30,611
Bed Bath & Beyond, Inc. (a) 54,200 2,859
Circuit City Stores, Inc. 59,900 1,790
Home Depot, Inc. (The) 7,900,350 378,229
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
RETAIL & WHOLESALE - CONTINUED
RETAIL & WHOLESALE, MISCELLANEOUS - CONTINUED
Lowe's Companies, Inc. 7,361,700 $ 263,181
Officemax, Inc. (a) 1,077,500 26,129
PETsMART, Inc. (a) 886,900 32,150
Staples, Inc. (a) 2,434,600 49,605
Sunglass Hut International, Inc. (a) 1,202,600 39,836
Tandy Corp. 574,000 26,548
Toys "R" Us, Inc. (a) 4,613,410 124,562
Uny Co. Ltd. 262,000 4,763
Viking Office Products, Inc. (a) 674,000 37,491
1,017,754
TOTAL RETAIL & WHOLESALE 1,888,471
SERVICES - 1.1%
ADVERTISING - 0.4%
Omnicom Group, Inc. (g) 5,418,688 243,841
PRINTING - 0.1%
Bowne & Co., Inc. (g) 1,675,000 30,569
Donnelley (R.R.) & Sons Co. 337,600 11,647
Wallace Computer Services, Inc. 337,200 19,684
61,900
SERVICES - 0.6%
CDI Corp. (a) 702,500 18,792
Interim Services, Inc. (a)(g) 816,400 31,227
Loewen Group, Inc. 475,000 13,978
Manpower, Inc. (g) 4,655,900 144,333
Robert Half International, Inc. (a)(g) 1,955,000 95,062
Service Corp. International 50,000 2,438
305,830
TOTAL SERVICES 611,571
TECHNOLOGY - 3.5%
COMMUNICATIONS EQUIPMENT - 0.2%
ADC Telecommunications, Inc. (a) 20,200 697
Cisco Systems, Inc. (a) 2,033,900 94,322
Newbridge Networks Corp. (a) 767,100 43,149
138,168
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
COMPUTER SERVICES & SOFTWARE - 0.8%
American Management Systems, Inc. (a) 262,500 $ 6,694
Ascend Communications, Inc. (a) 258,200 13,911
Automatic Data Processing, Inc. 2,349,000 92,490
Ceridian Corp. (a) 750,700 32,280
Computer Sciences Corp. (a) 872,000 61,367
Continuum Co., Inc. (a)(g) 1,422,500 59,212
ECI Telecom Ltd. 1,518,400 33,974
General Motors Corp. Class E 646,500 36,851
HBO & Co. 281,100 26,494
Oracle Systems Corp. (a) 823,100 38,789
Parametric Technology Corp. (a) 1,278,400 50,017
452,079
COMPUTERS & OFFICE EQUIPMENT - 2.1%
Adaptec, Inc. (a) 683,300 32,969
Comdisco, Inc. (g) 4,278,350 94,658
Diebold, Inc. 1,214,400 48,121
Digital Equipment Corp. (a)(g) 14,272,800 786,788
Exabyte Corp. (a) 482,300 7,868
Intergraph Corp. (a) 1,960,500 31,368
International Business Machines Corp. 708,000 78,677
Pitney Bowes, Inc. 1,606,400 78,714
Seagate Technology (a) 267,017 14,619
Symbol Technologies, Inc. (a) 117,700 4,134
Xerox Corp. 143,200 17,972
1,195,888
ELECTRONIC INSTRUMENTS - 0.0%
Analogic Corp. 538,300 10,093
Perkin-Elmer Corp. 292,300 15,821
25,914
ELECTRONICS - 0.3%
Alpine Group, Inc. 33,908 144
AMP, Inc. 1,101,500 45,573
Analog Devices, Inc. (a) 1,196,700 33,508
Atmel Corp. (a) 1,465,982 37,383
Augat, Inc. 708,220 12,394
Aura Systems, Inc. (a) 1,743 9
Berg Electronics Holdings Corp. (a)(i) 218,280 1,259
Linear Technology Corp. 367,200 15,331
145,601
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
PHOTOGRAPHIC EQUIPMENT - 0.1%
Fuji Photo Film Co. Ltd. 1,058,000 $ 30,179
Konica Corp. 930,000 6,580
36,759
TOTAL TECHNOLOGY 1,994,409
TRANSPORTATION - 5.0%
AIR TRANSPORTATION - 1.2%
British Airways PLC Ord. 750,000 6,125
Comair Holdings, Inc. 1,461,750 50,796
Delta Air Lines, Inc. 1,462,400 112,422
KLM Royal Dutch Air Lines NV (NY Reg.) 2,146,330 74,585
KLM Royal Dutch Air Lines NV 1,049,177 36,485
Northwest Airlines Corp. Class A (a) 4,702,400 240,998
UAL Corp. (a) 371,400 77,437
USAir Group, Inc. (a)(g) 4,835,800 88,253
687,101
RAILROADS - 3.4%
Bombardier, Inc. Class B 5,153,100 76,297
Burlington Northern Santa Fe Corp. 3,268,440 268,421
CSX Corp. (g) 15,434,300 704,190
Conrail, Inc. (g) 7,080,500 507,140
Illinois Central Corp., Series A (g) 3,110,964 88,662
Trinity Industries, Inc. (g) 3,773,500 131,601
Union Pacific Corp. 1,260,000 86,468
Wisconsin Central Transportation Corp. (a) 697,100 46,357
1,909,136
TRUCKING & FREIGHT - 0.4%
American Freightways Corp. (a) 1,235,300 15,904
Consolidated Freightways, Inc. 1,139,300 29,195
Federal Express Corp. (a) 135,700 9,482
Fritz Companies, Inc. (a) 907,800 35,404
Landstar System, Inc. (a)(g) 1,201,200 30,030
Pittston Co.:
(Brinks Group) 1,754,400 46,930
(Burlington Group) 877,200 17,215
Swift Transportation Co., Inc. (a)(g) 2,460,100 43,667
TNT Freightways Corp. 722,600 16,439
Werner Enterprises, Inc. 2,500 60
244,326
TOTAL TRANSPORTATION 2,840,563
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
UTILITIES - 3.8%
ELECTRIC UTILITY - 0.5%
Allegheny Power System, Inc. 25,000 $ 759
American Electric Power Co., Inc. 1,345,500 56,173
DTE Energy Co. 729,800 24,540
El Paso Electric Co. (a) 2,017,968 11,225
Entergy Corp. 2,910,000 81,480
NIPSCO Industries, Inc. 130,000 4,843
Pinnacle West Capital Corp. 145,000 4,187
Southern Co. 2,504,700 59,800
Texas Utilities Co. 755,300 31,251
274,258
GAS - 0.7%
Enron Corp. 1,882,800 69,428
Pacific Enterprises 500,800 12,958
Panhandle Eastern Corp. 411,100 12,795
Questar Corp. 558,200 18,421
Sonat, Inc. (g) 6,475,900 233,132
Williams Companies, Inc. 419,800 21,147
367,881
TELEPHONE SERVICES - 2.6%
AT&T Corp. 5,820,500 356,506
Ameritech Corp. 2,429,700 132,419
Bell Atlantic Corp. 2,994,600 184,917
BellSouth Corp. 4,241,200 156,924
Frontier Corp. 1,902,300 59,922
GTE Corp. 1,333,300 58,499
LCI International, Inc. (a) 563,100 13,796
MCI Communications Corp. 1,970,100 59,596
NYNEX Corp. 3,171,700 158,189
SBC Communications, Inc. 2,392,100 125,884
U.S. West, Inc. 1,915,400 62,011
WorldCom, Inc. (a) 2,613,900 120,239
1,488,902
TOTAL UTILITIES 2,131,041
TOTAL COMMON STOCKS
(Cost $33,018,794) 39,536,773
PREFERRED STOCKS - 0.0%
SHARES VALUE (NOTE 1)
(000S)
CONVERTIBLE PREFERRED STOCKS - 0.0%
RETAIL & WHOLESALE - 0.0%
GENERAL MERCHANDISE STORES - 0.0%
Hills Stores, Series A (a) 2,581 $ 30
NONCONVERTIBLE PREFERRED STOCKS - 0.0%
DURABLES - 0.0%
AUTOS, TIRES, & ACCESSORIES - 0.0%
Harvard Industries, Inc. pay-in-kind 14.25% 54,223 1,437
INDUSTRIAL MACHINERY & EQUIPMENT - 0.0%
ELECTRICAL EQUIPMENT - 0.0%
Ampex Corp. 8% (a)(h) 4,415 2,998
TOTAL NONCONVERTIBLE PREFERRED STOCKS 4,435
TOTAL PREFERRED STOCKS
(Cost $3,757) 4,465
CORPORATE BONDS - 0.2%
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (D) (000S) (000S)
CONVERTIBLE BONDS - 0.0%
BASIC INDUSTRIES - 0.0%
PAPER & FOREST PRODUCTS - 0.0%
Repap Enterprises, Inc.:
8 1/2%, 8/1/97 - $ 250 246
9%, 6/30/98 - CAD 12,900 9,443
TOTAL BASIC INDUSTRIES 9,689
FINANCE - 0.0%
CREDIT & OTHER FINANCE - 0.0%
Polly Peck International PLC euro
7 1/4%, 1/4/05 (c) - 1,300 59
RETAIL & WHOLESALE - 0.0%
DRUG STORES - 0.0%
Big B, Inc. 6 1/2%, 3/15/03 B2 3,500 3,439
TOTAL CONVERTIBLE BONDS 13,187
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (D) (000S) (000S)
NONCONVERTIBLE BONDS - 0.2%
BASIC INDUSTRIES - 0.1%
CHEMICALS & PLASTICS - 0.0%
IMC Fertilizer Group, Inc. 9 1/4%, 10/1/00 Ba3 $ 3,950 $ 4,098
Trans Resources, Inc.:
14 1/2%, 9/1/96 B2 5,000 5,100
11 7/8%, 7/1/02 (i) B2 2,500 2,225
11,423
PACKAGING & CONTAINERS - 0.0%
Crown Packaging Ltd., Series B, 10 3/4%,
11/1/00 B3 3,000 2,790
Crown Packaging Holdings Ltd., Series B, 0%,
11/1/03 (f) Caa 14,480 6,226
9,016
PAPER & FOREST PRODUCTS - 0.1%
Stone Container Corp.:
10 3/4%, 6/15/97 B2 5,770 5,885
11 7/8%, 12/1/98 B1 6,330 6,616
12,501
TOTAL BASIC INDUSTRIES 32,940
INDUSTRIAL MACHINERY & EQUIPMENT - 0.0%
INDUSTRIAL MACHINERY & EQUIPMENT - 0.0%
Thermadyne Holdings Corp.:
10 1/4%, 5/1/02 B3 632 634
10 3/4%, 11/1/03 Caa 1,957 1,961
2,595
POLLUTION CONTROL - 0.0%
Envirosource, Inc. 9 3/4%, 6/15/03 B3 2,400 2,184
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 4,779
MEDIA & LEISURE - 0.1%
BROADCASTING - 0.1%
Citicasters, Inc. 9 3/4%, 2/15/04 B- 18,750 19,125
Robin Media Group, Inc. 11 1/8%, 4/1/97 - 10,000 9,900
SCI Television, Inc. secured 7 1/2%,
6/30/98 (j) - 3,879 3,879
32,904
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (D) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
MEDIA & LEISURE - CONTINUED
LODGING & GAMING - 0.0%
Bally Gaming International, Inc.
10 3/8%, 7/15/98 - $ 7,500 $ 7,725
Maritime Group Ltd. pay-in-kind 14%, 2/15/97 (b) - 1,571 283
8,008
TOTAL MEDIA & LEISURE 40,912
RETAIL & WHOLESALE - 0.0%
APPAREL STORES - 0.0%
Lamonts Apparel, Inc. 10 1/4%, 11/1/99 (b)(i) - 8,804 396
TOTAL NONCONVERTIBLE BONDS 79,027
TOTAL CORPORATE BONDS
(Cost $102,315) 92,214
U.S. TREASURY OBLIGATIONS - 21.3%
U.S. Treasury Bills, yield at date of purchase 5.03%
to 5.10%, 4/4/96 to 4/25/96 (l) Aaa 1,400,000 1,397,231
Stripped Principal:
0%, 2/15/19 Aaa 950,000 191,539
0%, 8/15/19 Aaa 600,000 117,072
0%, 2/15/20 Aaa 100,000 18,798
0%, 8/15/20 Aaa 950,000 172,644
0%,11/15/21 Aaa 400,000 67,196
7 7/8%, 11/15/04 Aaa 235,000 258,010
7 1/2%, 2/15/05 Aaa 357,000 383,104
6 1/2%, 5/15/05 Aaa 468,700 471,775
5 7/8%, 11/15/05 Aaa 2,520,000 2,428,650
7 1/4%, 8/15/22 Aaa 322,500 336,709
7 5/8%, 11/15/22 Aaa 120,000 130,856
7 1/4%, 2/15/23 Aaa 440,775 454,479
6 1/4%, 8/15/23 Aaa 1,598,140 1,477,528
7 1/2%, 11/15/24 Aaa 463,130 500,903
7 5/8%, 2/15/25 Aaa 877,130 965,255
6 7/8%, 8/15/25 Aaa 1,459,940 1,482,744
6%, 2/15/26 Aaa 1,247,000 1,139,247
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $12,549,943) 11,993,740
COMMERCIAL MORTGAGE SECURITIES - 0.0%
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (D) (000S) (000S)
Bardell Associates Note Trust
12 1/2%, 11/1/08 (h)(Cost $4,812) - $ 4,734 $ 4,810
FOREIGN GOVERNMENT OBLIGATIONS - 0.0%
Argentina Republic BOTE 1
0.3830%, 5/31/96 (j) (Cost $517) B1 15,000 598
REPURCHASE AGREEMENTS - 8.5%
MATURITY
AMOUNT (000S)
Investments in repurchase agreements
(U.S. Treasury obligations) in a
joint trading account at 5.40%,
dated 3/29/96 due 4/1/96 $ 4,810,527 4,808,363
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $50,488,501) $ 56,440,963
FUTURES CONTRACTS
DOLLAR AMOUNTS IN THOUSANDS EXPIRATION UNDERLYING FACE UNREALIZED
DATE AMOUNT AT VALUE GAIN/(LOSS)
PURCHASED
439 S&P 500 Futures Contracts June, 1996 $ 142,949 $ 337
THE FACE VALUE OF FUTURES PURCHASED AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES: 0.3%
CURRENCY ABBREVIATIONS
CAD - Canadian dollar
LEGEND
(1.) Non-income producing
(2.) Non-income producing - issuer filed for protection under the Federal
Bankruptcy Code or is in default of interest payment.
(3.) Non-income producing - the company moved to seek a court appointed
administrator under British bankruptcy law.
(4.) Principal amount is stated in United States dollars unless otherwise
noted.
(5.) Standard & Poor's credit ratings are used in the absence of a rating
by Moody's Investors Service, Inc.
(6.) Debt obligation initially issued in zero coupon form which converts to
coupon form at a specified rate and date.
(7.) Affiliated company (see Note 8 of Notes to Financial Statements).
(8.) Restricted securities - Investment in securities not registered under
the Securities Act of 1933 (see Note 2 of Notes to Financial Statements).
Additional information on each holding is as follows:
ACQUISITION ACQUISITION
SECURITY DATE COST (000S)
Ampex Corp. 8% 2/16/95 $ 2,318
Atlantis Group, Inc.
(Trivest/Winston) 4/16/93 $ 90
Bardell Associates
Note Trust 12 1/2%
11/1/08 4/19/94 $ 4,812
Food 4 Less Holdings,
Inc. (warrants) 5/17/93 $ 0
Heileman G Brewing,
Inc. Unit Class 1
(non-vtg.) 1/21/94 $ 6,800
(9.) Security exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $29,851,000 or 0.1% of net
assets.
(10.) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(11.) Represents number of units held.
(12.) A portion of the security was pledged to cover margin requirements
for futures contracts. At the period end, the value of securities pledged
amounted to $6,000,000.
INCOME TAX INFORMATION
At March 31, 1996, the aggregate cost of investment securities for income
tax purposes was $50,602,782,000. Net unrealized appreciation aggregated
$5,838,181,000, of which $6,876,101,000 related to appreciated investment
securities and $1,037,920,000 related to depreciated investment securities.
The fund hereby designates approximately $540,535,000 as a capital gain
dividend for the purpose of the dividend paid deduction.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNTS) MARCH 31, 1996
ASSETS
Investment in securities, at value (including repurchase $ 56,440,963
agreements of $4,808,363) (cost $50,488,501) -
See accompanying schedule
Receivable for investments sold 1,841,552
Receivable for fund shares sold 113,737
Dividends receivable 53,586
Interest receivable 147,304
Receivable for daily variation on futures contracts 337
Other receivables 9,958
U.S. Treasury obligations, at value, held as collateral for 1,692,108
securities loaned
TOTAL ASSETS 60,299,545
LIABILITIES
Payable to custodian bank $ 6,431
Payable for investments purchased 2,253,538
Payable for fund shares redeemed 126,329
Accrued management fee 29,698
Other payables and accrued expenses 12,328
Collateral on securities loaned, at value 1,692,108
TOTAL LIABILITIES 4,120,432
NET ASSETS $ 56,179,113
Net Assets consist of:
Paid in capital $ 41,390,599
Undistributed net investment income 340,857
Accumulated undistributed net realized gain (loss) on 8,494,923
investments and foreign currency transactions
Net unrealized appreciation (depreciation) on 5,952,734
investments and assets and liabilities in foreign
currencies
NET ASSETS, for 641,922 shares outstanding $ 56,179,113
NET ASSET VALUE and redemption price per share $87.52
($56,179,113 (divided by) 641,922 shares)
Maximum offering price per share (100/97.00 of $87.52) $90.23
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED MARCH 31, 1996
INVESTMENT INCOME $ 515,374
Dividends (including $165,619 received from
affiliated issuers)
Interest (including income on securities loaned of $4,274) 430,092
TOTAL INCOME 945,466
EXPENSES
Management fee $ 308,679
Basic fee
Performance adjustment 57,715
Transfer agent fees 104,452
Accounting and security lending fees 884
Non-interested trustees' compensation 279
Custodian fees and expenses 2,196
Registration fees 4,027
Audit 413
Legal 323
Interest 8
Miscellaneous 303
Total expenses before reductions 479,279
Expense reductions (13,061) 466,218
NET INVESTMENT INCOME 479,248
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities (including realized gain of 12,044,639
$2,038,340 on sales of investments in
affiliated issuers)
Foreign currency transactions (119)
Futures contracts 10,454 12,054,974
Change in net unrealized appreciation (depreciation) on:
Investment securities (1,025,096)
Assets and liabilities in foreign currencies (193)
Futures contracts 337 (1,024,952)
NET GAIN (LOSS) 11,030,022
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 11,509,270
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED YEAR ENDED
MARCH 31, MARCH 31,
1996 1995
INCREASE (DECREASE) IN NET ASSETS
Operations $ 479,248 $ 140,768
Net investment income
Net realized gain (loss) 12,054,974 (631,583)
Change in net unrealized appreciation (depreciation) (1,024,952) 3,502,251
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 11,509,270 3,011,436
FROM OPERATIONS
Distributions to shareholders (335,078) (68,245)
From net investment income
From net realized gain (2,754,941) (1,283,877)
TOTAL DISTRIBUTIONS (3,090,019) (1,352,122)
Share transactions 15,520,173 10,274,501
Net proceeds from sales of shares
Reinvestment of distributions 3,043,476 1,329,944
Cost of shares redeemed (10,606,293) (6,580,719)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 7,957,356 5,023,726
FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 16,376,607 6,683,040
NET ASSETS
Beginning of period 39,802,506 33,119,466
End of period (including undistributed net investment $ 56,179,113 $ 39,802,506
income of $340,857 and $179,833, respectively)
OTHER INFORMATION
Shares
Sold 180,498 151,903
Issued in reinvestment of distributions 36,159 19,889
Redeemed (124,164) (97,417)
Net increase (decrease) 92,493 74,375
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED MARCH 31,
1996 1995 1994 C 1993 1992
SELECTED PER-SHARE DATA
Net asset value, beginning $ 72.44 $ 69.72 $ 68.44 $ 68.13 $ 64.84
of period
Income from Investment
Operations
Net investment income .79 .27 .61 1.20 .81
Net realized and 19.57 5.22 7.92 9.18 9.21
unrealized gain (loss)
Total from investment 20.36 5.49 8.53 10.38 10.02
operations
Less Distributions (.59) (.14) (.75) (1.25) (1.30)
From net investment income
From net realized gain (4.69) (2.63) (6.50) (8.82) (5.43)
Total distributions (5.28) (2.77) (7.25) (10.07) (6.73)
Net asset value, end of period $ 87.52 $ 72.44 $ 69.72 $ 68.44 $ 68.13
TOTAL RETURN A, B 28.43% 8.21% 12.94% 17.06% 16.48%
RATIOS AND SUPPLEMENTAL
DATA
Net assets, end of period $ 56,179 $ 39,803 $ 33,119 $ 24,886 $ 19,824
(in millions)
Ratio of expenses to average .95% .99% 1.00% 1.00% 1.05%
net assets
Ratio of expenses to average .92% .96% .99% 1.00% 1.05%
net assets after expense D D D
reductions
Ratio of net investment income .95% .39% 1.07% 2.11% 1.57%
to average net assets
Portfolio turnover rate 155% 120% 132% 155% 172%
</TABLE>
A TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE.
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 7 OF NOTES
TO FINANCIAL STATEMENTS).
C EFFECTIVE APRIL 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION
OF INCOME, CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT
COMPANIES." AS A RESULT, NET INVESTMENT INCOME PER SHARE MAY
REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
D FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES
(SEE NOTE 7 OF NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended March 31, 1996
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Magellan Fund (the fund) is registered under the Investment
Company Act of 1940, as amended (the 1940 Act), as an open-end management
investment company organized as a Massachusetts business trust and is
authorized to issue an unlimited number of shares. The financial statements
have been prepared in conformity with generally accepted accounting
principles which permit management to make certain estimates and
assumptions at the date of the financial statements. The following
summarizes the significant accounting policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are readily
available are valued at the last sale price, or if no sale price, at the
closing bid price. Securities (including restricted securities) for which
exchange quotations are not readily available (and in certain cases debt
securities which trade on an exchange) are valued primarily using
dealer-supplied valuations or at their fair value as determined in good
faith under consistently applied procedures under the general supervision
of the Board of Trustees. Short-term securities maturing within sixty days
of their purchase date are valued at amortized cost or original cost plus
accrued interest, both of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases and
sales of securities, income receipts, and expense payments are translated
into U.S. dollars at the prevailing exchange rate on the respective dates
of the transactions.
Net realized gains and losses on foreign currency transactions represent
net gains and losses from sales and maturities of forward currency
contracts, disposition of foreign currencies, currency gains and losses
realized between the trade and settlement dates on securities transactions,
and the difference between the amount of net investment income accrued and
the U.S. dollar amount actually received. The effects of changes in foreign
currency exchange rates on investments in securities are included with the
net realized and unrealized gain or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes substantially all of its taxable income for
its fiscal year. The schedule of investments includes information regarding
income taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date,
except certain dividends from foreign securities where the ex-dividend date
may have passed, are recorded as soon as the fund is informed of the
ex-dividend date. Interest income, which includes accretion of original
issue discount, is accrued as earned. Investment income is recorded net of
foreign taxes withheld where recovery of such taxes is uncertain.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences, which may result in distribution
reclassifications, are primarily due to differing treatments for litigation
proceeds, futures and options transactions, foreign currency transactions,
defaulted bonds, market discount, partnerships, and losses deferred due to
wash sales. The fund also utilized earnings and profits distributed to
shareholders on redemption of shares as a part of the dividends paid
deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect the per-share allocation between net investment income and realized
and unrealized gain (loss). Undistributed net investment income and
accumulated undistributed net realized gain (loss) on investments and
foreign currency transactions may include temporary book and tax basis
differences which will reverse in a subsequent period. Any taxable income
or gain remaining at fiscal year end is distributed in the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
FORWARD FOREIGN CURRENCY CONTRACTS. The fund may use foreign currency
contracts to facilitate transactions in foreign securities and to manage
the fund's currency exposure. Contracts to buy generally are used to
acquire exposure to foreign currencies, while contracts to sell are used to
hedge the fund's investments against currency fluctuations. Also, a
contract to buy or sell can offset a previous contract. Losses may arise
from changes in the value of the foreign currency or if the counterparties
do not perform under the contracts' terms.
The U.S. dollar value of forward foreign currency contracts is determined
using forward currency exchange rates supplied by a quotation service.
Purchases and sales of forward foreign currency contracts having the same
settlement date and broker are offset and any realized gain (loss) is
recognized on the date of offset; otherwise, gain (loss) is recognized on
settlement date.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other affiliated
entities of Fidelity Management & Research Company (FMR), may transfer
uninvested cash balances
2. OPERATING POLICIES -
CONTINUED
JOINT TRADING ACCOUNT - CONTINUED
into one or more joint trading accounts. These balances are invested in one
or more repurchase agreements that mature in 60 days or less from the date
of purchase, and are collateralized by U.S. Treasury or Federal Agency
obligations.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying U.S. Treasury or Federal Agency securities, the market
value of which is required to be at least equal to the repurchase price.
For term repurchase agreement transactions, the underlying securities are
marked-to-market daily and maintained at a value at least equal to the
repurchase price. FMR, the fund's investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
FUTURES CONTRACTS AND OPTIONS.
The fund may use futures and options contracts to manage its exposure to
the stock market and to fluctuations in interest rates and currency values.
Buying futures, writing puts, and buying calls tend to increase the fund's
exposure to the underlying instrument. Selling futures, buying puts, and
writing calls tend to decrease the fund's exposure to the underlying
instrument, or hedge other fund investments. Futures contracts involve, to
varying degrees, risk
of loss in excess of the futures variation margin reflected in the
Statement of Assets and Liabilities. The underlying face amount at value of
any open futures contracts at period end, is shown in the schedule of
investments under the caption "Futures Contracts". This amount reflects
each contract's exposure to the underlying instrument at period end. Losses
may arise from changes in the value of the underlying instruments, if there
is an illiquid secondary market for the contracts, or if the counterparties
do not perform under the contracts' terms.
Futures contracts are valued at the settlement price established each day
by the board of trade or exchange on which they are traded. Exchange-traded
options are valued using the last sale price or, in the absence of a sale,
the last offering price. Options traded over-the-counter are valued using
dealer-supplied valuations.
RESTRICTED SECURITIES. The fund is permitted to invest in securities that
are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from registration
or to the public if the securities are registered. Disposal of these
securities may involve time-consuming negotiations and expense, and prompt
sale at an acceptable price may be difficult. At the end of the period,
restricted securities (excluding 144A issues) amounted to $8,650,000 or 0%
of net assets.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $72,418,171,000 and $72,412,425,000, respectively, of which U.S.
government and government agency obligations aggregated $20,667,249,000 and
$9,463,450,000, respectively.
The market value of futures contracts opened and closed amounted to
$3,823,600,000 and $3,691,441,000, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly
basic fee that is calculated on the basis of a group fee rate plus a fixed
individual fund fee rate applied to the average net assets of the fund. The
group fee rate is the weighted average of a series of rates and is based on
the monthly average net assets of all the mutual funds advised by FMR. The
rates ranged from .2500% to .5200% for the period. In the event that these
rates were lower than the contractual rates in effect during the period,
FMR voluntarily implemented the above rates, as they resulted in the same
or a lower management fee. The annual individual fund fee rate is .30%. The
basic fee is subject to a performance adjustment (up to a maximum of
(plus/minus) .20%) based on the fund's investment performance as compared
to the appropriate index over a specified period of time. For the period,
the management fee was equivalent to an annual rate of .73% of average net
assets after the performance adjustment.
SALES LOAD. For the period, Fidelity Distributors Corporation (FDC), an
affiliate of FMR and the general distributor of the fund, received sales
charges of $32,929,000 on sales of shares of the fund.
TRANSFER AGENT FEES. Fidelity Service Co. (FSC), an affiliate of FMR, is
the fund's transfer, dividend disbursing and shareholder servicing agent.
FSC receives account fees and asset-based fees that vary according to
account size and type of account. FSC pays for typesetting, printing and
mailing of all shareholder reports, except proxy statements. For the
period, the transfer agent fees were equivalent to an annual rate of .21%
of average net assets.
ACCOUNTING AND SECURITY LENDING FEES. FSC maintains the fund's accounting
records and administers the security lending program. The security lending
fee is based on the number and duration of lending transactions. The
accounting fee is based on the level of average net assets for the month
plus out-of-pocket expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $24,267,000 for the period.
5. SECURITY LENDING.
The fund loaned securities to certain brokers who paid the fund negotiated
lenders' fees. These fees are included in interest income. The fund
receives U.S. Treasury obligations and/or cash
5. SECURITY LENDING - CONTINUED
as collateral against the loaned securities, in an amount at least equal to
102% of the market value of the loaned securities at the inception of each
loan. This collateral must be maintained at not less than 100% of the
market value of the loaned securities during the period of the loan. At
period end, the value of the securities loaned and the value of collateral
amounted to $1,638,526,000 and $1,692,108,000, respectively.
6. BANK BORROWINGS.
The fund is permitted to have bank borrowings for temporary or emergency
purposes to fund shareholder redemptions. The fund has established
borrowing arrangements with certain banks. Under the most restrictive
arrangement, the fund must pledge to the bank securities having a market
value in excess of 220% of the total bank borrowings. The interest rate on
the borrowings is the bank's base rate, as revised from time to time. The
maximum loan and the
average daily loan balances during the period for which loans were
outstanding amounted to $47,896,000. The weighted average interest rate was
5.75%.
7. EXPENSE REDUCTIONS.
FMR has directed certain portfolio trades to brokers who paid a portion of
the fund's expenses. For the period, the fund's expenses were reduced by
$8,983,000 under this arrangement.
In addition the fund has entered into arrangements with its custodian and
transfer agent whereby interest earned on uninvested cash balances was used
to offset a portion of the fund's expenses. During the period, the fund's
custodian and transfer agent fees were reduced by $11,000 and $4,067,000,
respectively, under these arrangements.
8. TRANSACTIONS WITH
AFFILIATED COMPANIES.
An affiliated company is a company in which the fund has ownership of at
least 5% of the voting securities. Transactions during the period with
companies which are or were affiliates are as follows:
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES
AMOUNTS IN THOUSANDS PURCHASES SALES DIVIDEND MARKET
AFFILIATES COST COST INCOME VALUE
ADC Telecommunications, Inc. $ 99,962 $ 105,631 $ - $ -
AGCO Corp. 10,078 16,176 89 80,932
AK Steel Holding Corp. 4,329 - 782 103,914
AMR Corp. 18,377 74,561 - -
Acclaim Entertainment, Inc. 41,834 46,414 - -
Adaptec, Inc. - 35,913 - -
Advanced Micro Devices, Inc. - 114,134 96 -
Agrium, Inc 1,766 4,918 293 -
Airborne Freight Corp. - 18,508 114 -
Air Canada, Inc. - 8,958 - -
Alantec Corp. - 10,965 - -
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
AMOUNTS IN THOUSANDS PURCHASES SALES DIVIDEND MARKET
AFFILIATES COST COST INCOME VALUE
Allen Group, Inc. (The) $ - $ 17,166 $ 213 $ -
Altera Corp. 28,521 42,176 - -
Amdahl Corp. 10,308 27,265 - -
America Online, Inc. 139 24,948 - -
American President Companies - 2,580 146 -
Ampex Corp. Class C - - - -
Amphenol Corp. Class A 4,814 38,694 - -
Analog Devices, Inc. 19,102 24,376 - -
Analogic Corp. - 9,725 184 -
Anixter International, Inc. - 54,493 - -
Antec Corp. 4,209 6,535 - -
Apache Corp. 98,506 - 506 207,938
Applied Materials, Inc. 144,509 296,987 - -
Arkansas Best Corp. - 11,390 - -
Armstrong World Industries, Inc. 8,737 11,972 1,470 -
Arrow Electronics, Inc. 4,469 95,873 - -
Ascend Communications, Inc. 39,459 34,224 - -
Atmel Corp. 77,825 126,970 - -
Augat, Inc. - 14,281 152 -
Avid Technology, Inc. - 1,421 - -
Avnet, Inc. 3,817 81,310 1,526 -
Barnes & Noble, Inc. 1,011 6,119 - -
Belden, Inc. 117 15,613 200 -
Bethlehem Steel Corp. 78,708 - - 147,767
Black & Decker Corp. 126,861 73,533 3,185 273,776
Block (H & R), Inc. - 24,592 - -
Bombardier, Inc. Class B - 25,326 619 -
Borg-Warner Automotive, Inc. - 1,210 366 -
Bowne & Co., Inc. 1,180 142 603 30,569
Brown Group, Inc. - 6,706 - -
Brunswick Corp. - 93,271 688 -
CSX Corp. 83,387 - 14,611 704,190
California Microwave Corp. 10,570 22,316 - -
Canadian Natural Resources Ltd. 17,915 - - 78,687
Cardinal Health, Inc. 6,674 41,547 162 -
Carlisle Companies, Inc. 8,530 35 805 46,906
Carpenter Technology Corp. 5,096 5,405 281 -
Cascade Communications Corp. 12,948 45,185 - -
Case Corp. 84,214 30,135 1,275 351,852
Caterpillar, Inc. 395,766 41,942 13,981 1,056,203
Cellstar Corp. - 1,507 - -
Centex Construction Products, Inc. - 784 - 21,241
Centex Corp. - 36,356 546 56,876
Chrysler Corp. 124,242 126,820 21,268 1,195,751
Cincinnati Milicron, Inc. 25,263 5,834 1,203 89,001
Cirrus Logic, Inc. 60,888 87,358 - -
Clark Equipment Co. - 57,974 - -
Cobra Golf, Inc. 266 27,671 - -
Comair Holdings, Inc. 21,753 21,931 240 -
Comdisco, Inc. 34,402 2,789 612 94,658
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
AMOUNTS IN THOUSANDS PURCHASES SALES DIVIDEND MARKET
AFFILIATES COST COST INCOME VALUE
Compuware Corp. $ - $ 17,031 $ - $ -
Conner Peripherals, Inc. 25,122 28,274 - -
Conrail, Inc. 118,615 115,868 11,403 507,140
Conseco, Inc. 42,030 41,050 112 -
Consolidated Freightways, Inc. - 40,847 363 -
Continuum Co., Inc. - 9,315 - 59,212
Cypress Semiconductor Corp. 88,846 121,142 - -
Cyrix Corp. 2,935 35,998 - -
DSC Communications Corp. 36,209 83,998 - -
Deere & Co. 174,284 256 12,930 785,593
Dell Computer Corp. 32,459 89,166 - -
Digital Equipment Corp. 440,495 165,425 - 786,788
Dresser Industries, Inc. 24,819 - - 302,749
Duriron Co., Inc. 9,805 - 110 44,657
Echlin, Inc. 37,102 20,887 3,786 179,862
Electroglas, Inc. 11,574 25,332 - -
Electronic Arts, Inc. 23,108 30,176 - -
Equitable Companies, Inc. - 35,105 536 -
Equitable Iowa Companies 14,191 7,659 981 65,176
ENSCO International, Inc. 1,106 - - 86,326
Exabyte Corp. - 13,526 - -
FirstFed Michigan Corp. - 1,494 361 -
Fluke Corp. 944 1,039 128 -
Fluor Corp. 41,454 9,723 761 319,260
Fore Systems, Inc. 1,420 44,891 - -
Gateway 2000, Inc. 20,879 86,377 - -
General DataComm Industries, Inc. - 14,578 - -
General Instrument Corp. - 103,663 - -
Glenayre Technologies, Inc. 40,770 40,538 - -
Global Marine, Inc. 36,132 - - 128,454
Greenfield Industries, Inc. 10,619 - 181 44,684
Gymboree Corp. - 9,349 - -
HBO & Co. 32,312 34,467 164 -
Hanna (M.A.) Co. 13,309 8,432 1,880 123,576
Harris Corp. - 91,943 3,623 -
Health Management Associates, Inc.
Class A - 4,973 - -
Heilig-Meyers Co. 11,110 14,029 406 -
Host Marriott Corp. 32,352 3,076 - 211,418
Host Marriott Services Corp. - - - 21,925
IDEX Corp. 11,084 261 620 49,315
Illinois Central Corp., Series A 8,729 10,572 - 88,662
Informix Corp. 2,019 23,197 - -
Ingersoll-Rand Co. 137,296 57,367 4,305 301,762
Inland Steel Industries, Inc. 82,138 43,212 769 120,711
Integrated Device Technology, Inc. 11,001 55,551 - -
Interim Services, Inc. 15,307 7,991 - 31,227
International Rectifier Corp. 470 18,586 - -
Itel Corp. - - - -
KLA Instruments Corp. 3,182 24,786 - -
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
AMOUNTS IN THOUSANDS PURCHASES SALES DIVIDEND MARKET
AFFILIATES COST COST INCOME VALUE
KLM Royal Dutch Air Lines NV $ 38,828 $ 49,216 $ 3,808 $ -
Kansas City Southern Industries, Inc. - 28,983 153 -
Kaydon Corp. 2,351 982 416 31,042
Kelly Services, Inc. Class A - 12,447 309 -
Kemet Corp. 14,510 14,364 - -
Kennametal, Inc. 418 - 1,591 96,214
Kirby Corp. - 24,370 - -
Komag, Inc. 12,534 40,862 - -
LSI Logic Corp. 108,338 181,588 - -
Lafarge Corp. 9,987 6,692 2,251 102,903
Lam Research Corp. 33,212 81,303 - -
Landstar System, Inc. 11,376 1,657 - 30,030
Lattice Semiconductor Corp. 30,432 54,748 - -
Leggett & Platt, Inc. 92,183 1,650 2,284 185,029
Linear Technology Corp. 38,660 54,124 586 -
Lotus Development Corp. 30,969 120,514 - -
Lowe's Companies, Inc. 24,814 169,526 1,138 -
Mac Frugals Bargains Closeout, Inc. - 23,037 - -
Magna International, Inc. Class A 72,083 170,128 2,113 -
Manpower, Inc. 25,684 72,246 927 144,333
Mark IV Industries, Inc. 21,008 - 654 118,202
Marshall Industries - 16,758 - -
Maxim Integrated Products, Inc. 20,075 35,200 - -
Maytag Co. 34,856 - 885 144,763
Medusa Corp. - - 864 50,406
Merrill Lynch & Co., Inc. - 25,690 4,799 -
Michael's Store's, Inc. - 16,885 - -
Micro Wharehouse, Inc. 4,836 14,975 - -
Microchip Technology, Inc. 14,714 52,511 - -
Micron Technology, Inc. 241,821 292,754 1,405 -
Mueller Industries, Inc. - 4,135 - 38,509
NACCO Industries, Inc. Class A - - 590 46,572
National Semiconductor Corp. 2,961 129,232 - -
Netmanage, Inc. - 8,224 - -
Network Equipment Technologies 1,019 13,234 - -
Network General Corp. 14,118 23,508 - -
Nine West Group, Inc. - 5,334 - -
Noble Affiliates, Inc. 71,583 - 176 162,715
Nokia Corp. AB - - - -
Northstar Energy Corp. - 2,961 - -
Novellus Systems, Inc. 13,156 20,943 - -
Nucor Corp. - 19,498 - -
Oak Industries, Inc. 760 21,716 - -
Oakwood Homes Corp. 4,652 1,333 158 97,791
Omnicom Group, Inc. - 18,473 3,788 243,841
Oracle Systems Corp. 5,262 107,082 - -
Owens Corning 45,717 6,123 - 175,009
Parametric Technology Corp. 99,077 107,363 - -
Parker & Parsley Petroleum Co. - - - 40,600
Parker-Hannifin Corp. 47,949 60,339 4,580 206,499
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
AMOUNTS IN THOUSANDS PURCHASES SALES DIVIDEND MARKET
AFFILIATES COST COST INCOME VALUE
Pioneer Standard Electronics $ - $ 9,416 $ 162 $ -
Pittston Company Services Group - 58,042 185 -
Premdor, Inc. - - - 21,306
Prime Hospitality Corp. 15,034 - - 41,932
Pulte Corp. 872 3,082 658 72,436
Quanex Corp. - 18,944 198 -
Quantum Corp. 9,044 36,023 - -
Read Rite Corp. 10,895 39,448 - -
Renaissance Energy Ltd. 58,818 5,192 - 229,644
Revco (D.S.), Inc. 13,755 34,554 - 107,616
Reynolds & Reynolds Co. Class A - 287 - -
Robert Half International, Inc. 2,918 19,804 - 95,062
SafeCard Services, Inc. - - - -
Schulman (A.), Inc. 16,396 - 346 57,503
Scientific-Atlanta, Inc. - 45,506 86 -
Seagate Technology 83,012 168,762 - -
Seagull Energy Corp - - - 43,734
Shaw Industries, Inc. 63,696 65,335 1,458 77,685
Sherwin-Williams Co. 66,942 3,773 1,661 258,329
Silicon Graphics, Inc. 61,117 129,180 - -
Smith (A.O.) Corp. Class B 882 - 1,125 44,902
Snyder Oil Corp. - 11,878 244 -
Softkey International, Inc. - - - -
Sonat, Inc. 73,560 - - 233,132
Southdown, Inc. - - - 36,342
Standex International Corp. - 8,619 445 -
Staples, Inc. 3,470 16,220 - -
Sterling Software, Inc. - 21,664 - -
Stormedia, Inc. 12,326 13,769 - -
Stop & Shop Companies, Inc. 11,910 - - 124,281
Stratacom, Inc. 4,634 32,697 - -
SunAmerica, Inc. 16,541 41,658 1,061 -
Swift Transportation Co., Inc. 6,426 2,654 - 43,667
Symbol Technologies, Inc. 2,064 35,144 - -
TNT Freightways Corp. - 25,051 182 -
TRINOVA Corp. 229 331 2,128 91,717
Tandem Computers, Inc. 49,830 83,258 - -
Tandy Corp. 62,506 67,344 1,261 -
Tecumseh Products Co. Class A - - - -
Tektronix, Inc. 12,466 63,741 1,436 -
Tellabs, Inc. 12,764 125,608 - -
Teradyne, Inc. 56,542 109,164 - -
Texas Industries, Inc. - - 499 79,461
Texas Instruments, Inc. 235,822 261,098 3,779 -
3Com Corp. 89,720 150,833 - -
Tidewater, Inc. 5,221 - 674 124,297
Toll Brothers, Inc. 9,054 1,778 - 52,452
Tommy Hilfiger 1,750 31,547 - -
Toro Co. - 13,975 281 -
Tosco Corp. - 22,204 - -
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
AMOUNTS IN THOUSANDS PURCHASES SALES DIVIDEND MARKET
AFFILIATES COST COST INCOME VALUE
Trinity Industries, Inc. $ 49,666 $ - $ 594 $ 131,601
UAL Corp. 73,480 68,160 - -
UCAR International, Inc. 5,515 - - 137,314
USG Corp. - 21,391 - 96,222
USLIFE Corp. - 15,204 1,866 -
USX - U.S. Steel Group 77,685 - 1,224 223,955
United Companies Financial Corp. 4,339 5,957 81 -
United Dominion Industries, Ltd. 4,668 23,132 - -
USAir Group, Inc. 24,408 674 - 88,253
VLSI Technology, Inc. 1,050 18,197 - -
Varian Associates, Inc. - 60,745 655 -
Varity Corp. 4,740 25,549 - 167,360
Vicor Corp. 1,048 3,683 - -
WHX Corp. 1,714 - - 18,925
Western Digital Corp. - 33,382 - -
Wyle Laboratories - 12,071 220 -
XTRA Corp. - 41,932 - -
Xilinx, Inc. 2,074 8,107 - -
TOTALS $ 5,826,325 $ 7,980,290 $ 165,619 $ 13,412,344
9. LITIGATION.
In December 1995, several individuals who purchased shares of Micron
Technology, Inc. ("Micron") in October and November 1995 filed purported
class action complaints against the fund, FMR, FMR Corp. and Jeffrey Vinik,
the fund's portfolio manager. The complaints allege that, in violation of a
federal securities law and state common law, the fund's portfolio manager
made materially misleading statements regarding Micron and the fund's
holdings of Micron. The defendants deny the allegations in the complaints
and intend to defend the lawsuits vigorously.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and the Shareholders of Fidelity Magellan Fund:
We have audited the accompanying statement of assets and liabilities of
Fidelity Magellan Fund, including the schedule of portfolio investments, as
of March 31, 1996, and the related statement of operations for the year
then ended, the statement of changes in net assets for each of the two
years in the period then ended and the financial highlights for each of the
five years in the period then ended. These financial statements and
financial highlights are the responsibility of the fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of March 31, 1996 by correspondence with the custodian
and brokers. An audit also includes assessing
the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Magellan Fund as of March 31, 1996, the results of its
operations for the year then ended, the changes in its net assets for each
of the two years in the period then ended, and the financial highlights for
each of the five years in the period then ended, in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
May 2, 1996
DISTRIBUTIONS
The Board of Trustees of Fidelity Magellan Fund voted to pay on May 6,
1996, to shareholders of record at the opening of business on May 3, 1996,
a distribution of $12.85 per share derived from capital gains realized
from sales of portfolio securities and a dividend of $.50 per share from
net investment income.
A total of 3.3% of the dividends distributed during the fiscal year was
derived from interest on U.S. Government securities which is generally
exempt from state income tax.
A total of 23% of the dividends distributed during the fiscal year
qualifies for the dividends-received deductions for corporate shareholders.
The fund will notify shareholders in January 1997 of these percentages for
use in preparing 1996 income tax returns.
TO CALL FIDELITY
FOR FUND INFORMATION AND QUOTES
The Fidelity Telephone Connection offers you special automated telephone
services for quotes and balances. The services are easy to use,
confidential and quick. All you need is a Touch Tone telephone.
YOUR PERSONAL IDENTIFICATION NUMBER
(PIN)
The first time you call one of our automated telephone services, we'll ask
you
to set up your Personal Identification
Number (PIN). The PIN assures that
only you have automated telephone
access to your account information.
Please have your Customer Number
(T-account #) handy when you call -
you'll need it to establish your PIN. If
you would ever like to change your PIN, just choose the "Change your
Personal
Identification Number" option when
you call. If you forget your PIN, please
call a Fidelity representative at 1-800-
544-6666 for assistance.
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PRESS
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1.
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2.
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requested Fidelity fund quotes.
3.
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4.
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5.
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6.
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1.
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4.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
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INVESTMENT IN
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TOTAL
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St. Petersburg, FL
GEORGIA
3525 Piedmont Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
HAWAII
700 Bishop Street
Honolulu, HI
ILLINOIS
215 East Erie Street
Chicago, IL
One North Franklin
Chicago, IL
540 Lake Cook Road
Deerfield, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
LOUISIANA
201 St. Charles Avenue
New Orleans, LA
MAINE
3 Canal Plaza
Portland, ME
MARYLAND
7401 Wisconsin Avenue
Bethesda, MD
1 West Pennsylvania Ave.
Towson, MD
MASSACHUSETTS
470 Boylston Street
Boston, MA
21 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
Braintree, MA
44 Mall Road
Burlington, MA
416 Belmont Street
Worcester, MA
MICHIGAN
280 North Woodward Ave.
Birmingham, MI
29155 Northwestern Hwy.
Southfield, MI
MINNESOTA
7600 France Avenue South
Edina, MN
MISSOURI
700 West 47th Street
Kansas City, MO
8885 Ladue Road
Ladue, MO
200 North Broadway
St. Louis, MO
NEW JERSEY
56 South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
505 Millburn Avenue
Short Hills, NJ
NEW YORK
1050 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
1271 Avenue of the
Americas
New York, NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
10 Bank Street
White Plains, NY
NORTH CAROLINA
4611 Sharon Road
Charlotte, NC
2200 West Main Street
Durham, NC
OHIO
600 Vine Street
Cincinnati, OH
28699 Chagrin Boulevard
Woodmere Village, OH
1903 East Ninth Street
Cleveland, OH
OREGON
121 S.W. Morrison Street
Portland, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
TENNESSEE
5100 Poplar Avenue
Memphis, TN
TEXAS
10000 Research Boulevard
Austin, TX
7001 Preston Road
Dallas, TX
1155 Dairy Ashford
Houston, TX
2701 Drexel Drive
Houston, TX
1010 Lamar Street
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
UTAH
215 South State Street
Salt Lake City, UT
VERMONT
199 Main Street
Burlington, VT
VIRGINIA
8180 Greensboro Drive
McLean, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
511 Pine Street
Seattle, WA
WASHINGTON, DC
1775 K Street, N.W.
Washington, DC
WISCONSIN
595 North Barker Road
Brookfield, WI
TO WRITE FIDELITY
If more than one address is listed, please locate the address that is
closest to you. We'll give your correspondence immediate attention and send
you written confirmation upon completion of your request.
(LETTER_GRAPHIC)MAKING CHANGES
TO YOUR ACCOUNT
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(LETTER_GRAPHIC)FOR NON-RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
OVERNIGHT EXPRESS
Fidelity Investments
100 Crosby Parkway - KP2C
Covington, KY 41015-4399
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6I
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 193
Boston, MA 02210-0193
(LETTER_GRAPHIC)FOR RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6R
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
INVESTMENT ADVISER
Fidelity Management & Research
Company
Boston, MA
INVESTMENT SUB-ADVISER
Fidelity Management & Research
(U.K.) Inc., London, England
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
William J. Hayes, Vice President
Jeffrey Vinik, Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
Robert H. Morrison, Manager,
Security Transactions
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox *
Phyllis Burke Davis *
Richard J. Flynn *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Edward H. Malone *
Marvin L. Mann *
Gerald C. McDonough *
Thomas R. Williams *
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Co.
Boston, MA
CUSTODIAN
State Street Bank and Trust Company
North Quincy, MA
FIDELITY'S GROWTH FUNDS
Blue Chip Growth Fund
Capital Appreciation Fund
Contrafund
Disciplined Equity Fund
Dividend Growth Fund
Emerging Growth Fund
Export Fund
Fidelity Fifty
Growth Company Fund
Large Cap Fund
Low-Priced Stock Fund
Magellan(registered trademark) Fund
Mid-Cap Stock Fund
New Millennium(trademark) Fund
OTC Portfolio
Retirement Growth Fund
Small Cap Stock Fund
Stock Selector
Trend Fund
Value Fund
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
(registered trademark)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE
