(2_FIDELITY_LOGOS)FIDELITY
MAGELLAN(registered trademark)
FUND
SEMIANNUAL REPORT
SEPTEMBER 30, 1997
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 9 A SUMMARY OF MAJOR SHIFTS IN THE FUND'S
INVESTMENTS OVER THE PAST SIX MONTHS.
INVESTMENTS 10 A COMPLETE LIST OF THE FUND'S INVESTMENTS
WITH THEIR MARKET VALUES.
FINANCIAL STATEMENTS 30 STATEMENTS OF ASSETS AND LIABILITIES,
OPERATIONS, AND CHANGES IN NET ASSETS,
AS WELL AS FINANCIAL HIGHLIGHTS.
NOTES 34 NOTES TO THE FINANCIAL STATEMENTS.
REPORT OF INDEPENDENT 40 THE AUDITORS' OPINION.
ACCOUNTANTS
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 RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL AMOUNTS
INVESTED.
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.
To reduce expenses and demonstrate respect for our environment, we
have initiated a project through which we will begin eliminating
duplicate copies of most financial reports and prospectuses to most
households, even if they have more than one account in the fund. If
additional copies of financial reports, prospectuses or historical
account information are needed, please call 1-800-544-6666.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
The stock and bond markets have performed well through the end of
September 1997, despite experiencing some short-term volatility in the
spring and again in August. The Standard & Poor's 500 Index was up
roughly 30% year-to-date through September, almost three times its
historical annual average. The bond markets - primarily influenced by
positive news on the inflation front - have posted moderate returns
through the first nine months of the year.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will
greatly reduce your vulnerability to any single decline. We know from
experience, for example, that stock prices have gone up over longer
periods of time, have significantly outperformed other types of
investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through
diversification. A stock mutual fund, for instance, is already
diversified, because it invests in many different companies. You can
increase your diversification further by investing in a number of
different stock funds, or in such other investment categories 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, it's important to
remember that there is no assurance that a money market fund will
achieve its goal of maintaining a stable net asset value of $1.00 per
share, and that these types of funds are neither insured nor
guaranteed by any agency of the U.S. government.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases.
If you have questions, please call us at 1-800-544-8888. We are
available 24 hours a day, seven days a week to provide you 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. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED SEPTEMBER 30, 1997 PAST 6 PAST 1 PAST 5 PAST 10
MONTHS YEAR YEARS YEARS
FIDELITY MAGELLAN 27.81% 35.81% 150.22% 326.11%
FIDELITY MAGELLAN 23.98% 31.73% 142.71% 313.33%
(INCL. 3% SALES CHARGE)
S&P 500(REGISTERED TRADEMARK) 26.26% 40.45% 156.94% 295.97%
GROWTH FUNDS AVERAGE 28.20% 33.52% 138.49% 258.50%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one, five or 10
years. For example, if you had 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 500 Index - a widely recognized, unmanaged index of
common stocks. 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 mutual funds with similar objectives
tracked by Lipper Analytical Services, Inc. The past six months
average represents a peer group of 877 mutual funds. These benchmarks
include reinvested dividends and capital gains, if any, and exclude
the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED SEPTEMBER 30, 1997 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
FIDELITY MAGELLAN 35.81% 20.13% 15.60%
FIDELITY MAGELLAN (INCL. 3% SALES CHARGE) 31.73% 19.40% 15.25%
S&P 500 40.45% 20.77% 14.73%
GROWTH FUNDS AVERAGE 33.52% 18.62% 13.19%
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year. (Note: Lipper calculates average annual total
returns by annualizing each fund's total return, then taking an
arithmetic average. This may produce a slightly different figure than
that obtained by averaging the cumulative total returns and
annualizing the result.)
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19970930 19971009 112730 S00000000000001
Magellan S&P 500
00021 SP001
1987/09/30 9700.00 10000.00
1987/10/31 7196.88 7846.00
1987/11/30 6653.38 7199.49
1987/12/31 7301.58 7747.37
1988/01/31 7591.09 8073.54
1988/02/29 8051.76 8449.76
1988/03/31 8029.91 8188.66
1988/04/30 8173.76 8279.56
1988/05/31 8151.91 8351.59
1988/06/30 8709.09 8734.93
1988/07/31 8652.64 8701.74
1988/08/31 8377.69 8405.88
1988/09/30 8729.12 8763.97
1988/10/31 8911.20 9007.61
1988/11/30 8791.03 8878.80
1988/12/31 8963.76 9034.18
1989/01/31 9690.95 9695.48
1989/02/28 9533.27 9454.06
1989/03/31 9817.10 9674.34
1989/04/30 10310.55 10176.44
1989/05/31 10854.91 10588.58
1989/06/30 10760.74 10528.23
1989/07/31 11664.84 11478.93
1989/08/31 11969.98 11703.91
1989/09/30 12177.17 11655.93
1989/10/31 11794.81 11385.51
1989/11/30 11988.81 11617.78
1989/12/31 12063.82 11896.60
1990/01/31 11285.77 11098.34
1990/02/28 11517.57 11241.51
1990/03/31 11811.86 11539.41
1990/04/30 11513.54 11250.92
1990/05/31 12537.59 12347.89
1990/06/30 12592.08 12263.92
1990/07/31 12449.56 12224.68
1990/08/31 11229.76 11119.57
1990/09/30 10517.16 10578.04
1990/10/31 10387.21 10532.56
1990/11/30 11173.17 11212.96
1990/12/31 11519.91 11525.80
1991/01/31 12325.21 12028.33
1991/02/28 13395.39 12888.35
1991/03/31 13850.38 13200.25
1991/04/30 13901.65 13231.93
1991/05/31 14694.31 13803.55
1991/06/30 13830.84 13171.35
1991/07/31 14689.90 13785.13
1991/08/31 15141.46 14111.84
1991/09/30 15084.19 13876.17
1991/10/31 15286.84 14062.12
1991/11/30 14531.30 13495.41
1991/12/31 16246.34 15039.29
1992/01/31 16253.45 14759.56
1992/02/29 16582.59 14951.43
1992/03/31 16132.68 14659.88
1992/04/30 16371.84 15090.88
1992/05/31 16528.70 15164.82
1992/06/30 16237.57 14938.87
1992/07/31 16693.26 15549.87
1992/08/31 16331.24 15231.10
1992/09/30 16518.58 15410.82
1992/10/31 16635.03 15464.76
1992/11/30 17055.27 15992.11
1992/12/31 17385.95 16188.81
1993/01/31 17843.99 16324.80
1993/02/28 18216.48 16546.81
1993/03/31 18884.22 16895.95
1993/04/30 19069.09 16487.07
1993/05/31 19820.69 16928.92
1993/06/30 20097.09 16978.02
1993/07/31 20318.79 16910.11
1993/08/31 21513.68 17551.00
1993/09/30 21746.90 17415.86
1993/10/31 21761.29 17776.36
1993/11/30 21044.36 17607.49
1993/12/31 21672.91 17820.54
1994/01/31 22529.42 18426.44
1994/02/28 22364.24 17927.08
1994/03/31 21327.24 17145.46
1994/04/30 21541.37 17364.92
1994/05/31 21293.21 17649.71
1994/06/30 20369.36 17217.29
1994/07/31 21051.10 17782.02
1994/08/31 22048.22 18511.08
1994/09/30 21474.80 18057.56
1994/10/31 22201.14 18463.85
1994/11/30 20984.20 17791.40
1994/12/31 21280.47 18055.25
1995/01/31 21063.84 18523.42
1995/02/28 22245.74 19245.28
1995/03/31 23077.20 19813.20
1995/04/30 24150.78 20396.70
1995/05/31 24825.93 21211.96
1995/06/30 26716.92 21704.71
1995/07/31 28767.88 22424.44
1995/08/31 29017.45 22480.73
1995/09/30 29548.59 23429.41
1995/10/31 28793.48 23345.77
1995/11/30 29433.40 24370.65
1995/12/31 29116.66 24840.03
1996/01/31 29536.58 25685.58
1996/02/29 29343.55 25923.69
1996/03/31 29638.17 26173.33
1996/04/30 29827.81 26559.13
1996/05/31 29962.62 27244.09
1996/06/30 29934.61 27347.89
1996/07/31 28541.93 26139.66
1996/08/31 29262.28 26690.94
1996/09/30 30434.86 28193.11
1996/10/31 31155.21 28970.68
1996/11/30 33172.19 31160.57
1996/12/31 32519.44 30543.28
1997/01/31 33946.82 32451.62
1997/02/28 33491.19 32706.04
1997/03/31 32337.99 31362.15
1997/04/30 33781.50 33234.47
1997/05/31 36191.46 35257.79
1997/06/30 37689.96 36837.33
1997/07/31 40852.52 39768.48
1997/08/31 39035.29 37540.65
1997/09/30 41332.70 39596.75
IMATRL PRASUN SHR__CHT 19970930 19971009 112733 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Magellan Fund on September 30, 1987, and the
current 3% sales charge was paid. As the chart shows, by September 30,
1997, the value of the investment would have grown to $41,333 - a
313.33% increase on the initial investment. For comparison, look at
how the S&P 500 did over the same period. With dividends and capital
gains, if any, reinvested, the same $10,000 investment would have
grown to $39,597 - a 295.97% 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
long-term growth and
short-term volatility. 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
An interview with Robert Stansky, Portfolio Manager of Fidelity
Magellan Fund
Q. BOB, HOW HAS THE FUND PERFORMED?
A. It's been a strong six-month period in a historical sense for both
the stock market and the fund. For the six months that ended September
30, 1997, the fund had a total return of 27.81%. That roughly matched
the Lipper growth funds average, which was 28.20%. During the 12
months that ended September 30, 1997, the fund returned 35.81%,
compared to 33.52% for the growth funds average.
Q. WHAT ACCOUNTED FOR THE POWERFUL GAINS?
A. Broadly speaking, very strong corporate earnings coupled with a mix
of moderate economic growth and low inflation helped create an almost
ideal investing environment. Of course, some stocks did better than
others, driven by better-than-expected earnings. In terms of the
fund's performance during the six-month period, I think it makes sense
to view it in a broader context. During the three years that ended
September 30, 1997, Magellan's cumulative total return exceeded 92%.
That number is extremely high historically, and I think it's important
for shareholders to keep this perspective in mind going forward.
Q. YOU MENTIONED THAT CERTAIN STOCKS HELPED THE FUND. WHICH WERE THEY?
A. Broadly speaking, the technology sector - which represented 16.8%
of the fund at the end of the period - included several strong
performers. During the period, many technology companies benefited
from increasing demand for computers and related equipment.
Interestingly, most tech stocks typically take a breather during the
summer months, but that didn't happen this year. Investments in two
computer manufacturers - Compaq Computer and Dell Computer - provided
a significant boost to the fund's returns. In fact, Compaq's stock
price more than doubled during the six-month period. Again, strong
demand for computers resulted in better-than-expected earnings growth
for both companies. Other technology stocks that contributed strongly
to the fund's returns were IBM, Intel, Microsoft and Oracle.
Q. HOW ABOUT STOCKS OUTSIDE OF THE TECHNOLOGY GROUP?
A. General Electric - which, at 3.0% of the fund's investments, was
its largest investment at the end of the period - turned in a solid
six months. The company has effectively cut costs, generated solid
cash flow and improved profit margins. That's led to a confidence
among investors in GE's ability to consistently post earnings growth,
and the company has not disappointed. In addition, several financial
services stocks did well as falling interest rates helped improve
their profitability. Citicorp and BankAmerica both reported solid
profit growth. Finally, what the fund doesn't own is often every bit
as important as what it does own. During the period, the fund
benefited from an underweighting in utility stocks relative to the
Standard & Poor's 500 Index, as utilities generally did not appreciate
as strongly as stocks in many other sectors.
Q. BOB, WHAT DIDN'T GO YOUR WAY?
A. Among the fund's large holdings, Philip Morris was a disappointment
during the period. Although the company has exhibited strong earnings
growth, its stock remained quite cheap, as the market was skittish
about the pending legal settlement between tobacco companies and the
federal government. In addition, medical services provider
Columbia/HCA Healthcare suffered from concerns over a government probe
into its Medicare billing practices.
Q. AS OF THE END OF SEPTEMBER, FIDELITY BEGAN LIMITING NEW PURCHASES
OF MAGELLAN FUND TO EXISTING SHAREHOLDERS AND GROUP RETIREMENT PLAN
PARTICIPANTS WHO ARE OFFERED THE FUND THROUGH THEIR COMPANIES' PLANS.
WHY WAS THIS DECISION MADE AND HOW WILL IT AFFECT YOUR MANAGEMENT OF
THE FUND?
A. As has been widely reported, the fund's performance has improved
significantly over the past 14 months. And it is typical for a
Fidelity fund to experience heavier investor inflows of new cash
following a period of strong performance. Indeed, in late July and
early August, the fund
began to experience positive net inflows for the first time since
early 1996. Because we believed that rapid future inflows would make
it more difficult for me to manage the fund, we made the decision to
limit new purchases.
Q. WHY WOULD STRONGER INFLOWS HAVE MADE IT MORE DIFFICULT TO MANAGE
THE FUND?
A. During periods of strong investor inflows into the fund, I'm faced
with quickly finding investment opportunities for this "new cash" or
letting it build up, which leaves the fund less than fully invested. I
believe that limiting new purchases will result in a relatively stable
asset base. That should make it easier for me to remain fully invested
in the market, and continue to invest effectively for the fund's
shareholders.
Q. WHAT'S YOUR OUTLOOK FOR THE NEXT SIX MONTHS?
A. As Magellan Fund shareholders probably know by now, I don't try to
predict the direction of the stock market. I do believe that stock
prices tend to follow corporate earnings over time; therefore, stock
selection is critical. Picking the right stocks is even more important
in the current market environment. As the market has risen recently,
so have stock valuations. Going forward, the stocks of companies that
don't meet earnings expectations could be even more at risk of price
fluctuations than usual. I'll continue to focus my energy on getting
the earnings right, while also paying close attention to valuations.
As
always, if I'm on the mark with those two measures, the fund's
performance will take care of itself.
BOB STANSKY ON THE FUND'S
COMPOSITION COMPARED TO THE
S&P 500:
"I'VE HEARD PEOPLE QUESTION WHETHER
MAGELLAN'S GROWTH HAS CAUSED IT TO
BECOME A `GLORIFIED' INDEX FUND,
MEANING IT MIRRORS THE HOLDINGS
AND PERFORMANCE OF THE STANDARD
& POOR'S 500 INDEX. I DON'T BELIEVE
THERE'S MUCH TRUTH TO THAT; THERE
ARE MANY SIGNIFICANT DIFFERENCES
BETWEEN THE FUND AND THE INDEX.
FOR EXAMPLE, AS OF SEPTEMBER 30,
THE FUND WAS INVESTED IN JUST 242 OF
THE INDEX'S 500 STOCKS. IN ADDITION,
THE FUND'S DOLLAR-WEIGHTED MEDIAN
MARKET CAPITALIZATION - A MEASURE
OF THE TYPICAL SIZE OF A COMPANY IN
WHICH THE FUND IS INVESTED - WAS
ABOUT $21 BILLION, COMPARED TO
MORE THAN $35 BILLION FOR THE INDEX.
FINALLY, IF YOU LOOK AT MARKET
SECTORS, THE FUND IS OVERWEIGHTED
IN SOME RELATIVE TO THE INDEX, AND
UNDERWEIGHTED IN OTHERS.
"THESE DIFFERENCES ARE IMPORTANT
BECAUSE MY GOAL IS NOT TO MATCH
THE RETURNS OF THE S&P 500; RATHER
I WANT TO BEAT THE INDEX OVER TIME.
I WON'T DO THAT BY MIRRORING THE
INVESTMENTS OF THE INDEX; I'LL ONLY
DO IT BY DIFFERING FROM THE INDEX.
THE KEY IS MY ACCESS TO FIDELITY'S
EXTENSIVE RESEARCH CAPABILITIES.
OUR ANALYSTS FOLLOW THOUSANDS OF
COMPANIES, ALLOWING ME TO SEARCH
FOR OPPORTUNITIES ACROSS A BROAD
RANGE OF NAMES - WITHIN AND
OUTSIDE OF THE INDEX - BOTH IN
THE U.S. AND OVERSEAS."
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
FUND NUMBER: 021
TRADING SYMBOL: FMAGX
START DATE: MAY 2, 1963
SIZE: AS OF SEPTEMBER 30,
1997, MORE THAN $63.7 BILLION
MANAGER: ROBERT STANSKY, SINCE
JUNE 1996; MANAGER, FIDELITY
GROWTH COMPANY FUND AND
FIDELITY ADVISOR EQUITY GROWTH,
1987-1996; FIDELITY EMERGING
GROWTH FUND, 1990-1991;
FIDELITY SELECT DEFENSE &
AEROSPACE PORTFOLIO,
1984-1985; JOINED FIDELITY IN
1983
(CHECKMARK)
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.
INVESTMENT CHANGES
TOP TEN STOCKS AS OF SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
<S> <C> <C>
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE STOCKS
6 MONTHS AGO
GENERAL ELECTRIC CO. 3.0 2.5
COMPAQ COMPUTER CORP. 1.8 0.7
INTEL CORP. 1.7 2.2
CITICORP 1.4 1.2
PHILIP MORRIS COMPANIES, INC. 1.3 1.6
MICROSOFT CORP. 1.3 0.9
MERCK & CO., INC. 1.2 1.1
HOME DEPOT, INC. 1.1 1.0
INTERNATIONAL BUSINESS MACHINES CORP. 1.1 0.7
BANKAMERICA CORP. 1.1 0.9
</TABLE>
TOP FIVE MARKET SECTORS AS OF SEPTEMBER 30, 1997
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE MARKET SECTORS
6 MONTHS AGO
TECHNOLOGY 16.8 13.6
FINANCE 12.3 10.5
ENERGY 12.0 13.9
HEALTH 9.2 7.8
INDUSTRIAL MACHINERY & EQUIPMENT 8.2 8.4
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF SEPTEMBER 30, 1997 * AS OF MARCH 31, 1997 **
ROW: 1, COL: 1, VALUE: 4.1
ROW: 1, COL: 2, VALUE: 0.0
ROW: 1, COL: 3, VALUE: 0.0
ROW: 1, COL: 4, VALUE: 95.90000000000001
STOCKS 96.0%
BONDS 0.1%
SHORT-TERM
INVESTMENTS 3.9%
FOREIGN
INVESTMENTS 8.9%
STOCKS 95.9%
BONDS 0.0%
SHORT-TERM
INVESTMENTS 4.1%
FOREIGN
INVESTMENTS 8.2%
ROW: 1, COL: 1, VALUE: 3.9
ROW: 1, COL: 2, VALUE: 1.0
ROW: 1, COL: 3, VALUE: 0.0
ROW: 1, COL: 4, VALUE: 96.0
*
**
INVESTMENTS SEPTEMBER 30, 1997
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES
COMMON STOCKS - 95.9%
SHARES VALUE (NOTE 1)
(000S)
AEROSPACE & DEFENSE - 2.3%
AEROSPACE & DEFENSE - 2.0%
AlliedSignal, Inc. 8,058,800 $ 342,499
Boeing Co. 7,608,600 414,193
Gulfstream Aerospace Corp. (a) 938,000 27,202
Lockheed Martin Corp. 218,300 23,276
Sundstrand Corp. 231,600 13,346
Textron, Inc. 1,141,600 74,204
United Technologies Corp. 4,821,900 390,574
1,285,294
DEFENSE ELECTRONICS - 0.1%
Raytheon Co. 934,300 55,240
SHIP BUILDING & REPAIR - 0.2%
General Dynamics Corp. 501,900 43,728
Halter Marine Group, Inc. (a)(d) 1,023,150 49,495
93,223
TOTAL AEROSPACE & DEFENSE 1,433,757
BASIC INDUSTRIES - 3.0%
CHEMICALS & PLASTICS - 1.3%
Air Products & Chemicals, Inc. 571,500 47,398
Airgas, Inc. (a) 130,000 2,202
Atlantis Group, Inc. (Trivest/Winston) (a)(e) 77,269 1,198
du Pont (E.I.) de Nemours & Co. 1,683,600 103,647
Hanna (M.A.) Co. (d) 2,716,425 72,155
Hercules, Inc. 716,500 35,646
Monsanto Co. 1,977,500 77,123
Morton International, Inc. 1,833,500 65,089
Praxair, Inc. 3,420,530 175,088
Rohm & Haas Co. 513,100 49,226
Schulman (A.), Inc. 1,637,125 34,994
Sealed Air Corp. (a) 1,426,200 78,352
Solutia, Inc. 395,500 7,910
Synetic, Inc. (a)(d) 1,157,582 47,461
Trivest 1992 Special Fund Ltd. 26.6(c) 2,782
W.R. Grace & Co. 572,500 42,150
842,421
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
BASIC INDUSTRIES - CONTINUED
IRON & STEEL - 0.9%
AK Steel Holding Corp. (d) 2,606,000 $ 111,081
Aeroquip Vickers, Inc. (d) 2,312,100 113,293
Bethlehem Steel Corp. (a) 2,730,800 28,161
Dofasco, Inc. 428,000 8,166
Inland Steel Industries, Inc. 1,817,200 39,751
Ispat International NV (NY Reg.) 163,500 4,680
J & L Specialty Steel, Inc. 845,000 11,355
Nucor Corp. (d) 4,592,400 241,962
558,449
METALS & MINING - 0.0%
Commscope, Inc. 172,000 2,333
PACKAGING & CONTAINERS - 0.0%
Owens-Illinois, Inc. (a) 742,700 25,205
PAPER & FOREST PRODUCTS - 0.8%
Champion International Corp. 1,307,100 79,651
Fort James Corp. 137,500 6,299
Ivex Packaging Corp. 59,400 951
Kimberly-Clark Corp. 6,889,800 337,170
Louisiana-Pacific Corp. 2,232,600 55,815
479,886
TOTAL BASIC INDUSTRIES 1,908,294
CONSTRUCTION & REAL ESTATE - 2.3%
BUILDING MATERIALS - 1.7%
American Standard Companies, Inc. (a) 1,326,500 53,225
Centex Construction Products, Inc. 627,800 18,599
Lafarge Corp. (d) 4,941,211 159,354
Mark IV Industries, Inc. 2,720,412 73,111
Masco Corp. 2,837,900 130,011
Medusa Corp. (d) 1,645,900 78,386
Owens-Corning 1,979,100 72,237
Sherwin-Williams Co. (d) 10,803,120 318,017
Southdown, Inc. 1,027,400 56,122
USG Corp. (a)(d) 2,613,000 125,261
1,084,323
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
CONSTRUCTION & REAL ESTATE - CONTINUED
CONSTRUCTION - 0.5%
Centex Corp. 1,046,200 $ 61,072
Clayton Homes, Inc. 1,262,687 23,439
Lennar Corp. 426,900 18,143
Morrison Knudsen Corp. warrants 3/11/03 (a) 7,002 35
Oakwood Homes Corp. (d) 3,719,200 105,532
Pulte Corp. (d) 2,307,900 88,277
Toll Brothers, Inc. (a) 359,200 8,352
304,850
ENGINEERING - 0.1%
Fluor Corp. 981,600 52,638
TOTAL CONSTRUCTION & REAL ESTATE 1,441,811
DURABLES - 5.8%
AUTOS, TIRES, & ACCESSORIES - 2.4%
AutoZone, Inc. (a) 3,635,800 109,074
Circuit City Stores, Inc. - CarMax Group 321,500 5,325
Chrysler Corp. 11,029,000 406,005
Danaher Corp. 1,803,500 104,603
Eaton Corp. 1,072,400 99,063
Echlin, Inc. 2,378,000 83,379
Ford Motor Co. 3,505,000 158,601
General Motors Corp. 4,059,659 271,743
Honda Motor Co. Ltd. 2,544,000 89,000
Lear Corp. (a) 1,316,300 64,828
Michelin SA (Compagnie Generale
des Etablissements) Class B 549,473 31,341
Navistar International Corp. (a) 500,000 13,813
Pep Boys-Manny, Moe & Jack 655,000 17,849
TRW, Inc. 49,000 2,689
Volvo AB Class B 3,817,600 109,708
1,567,021
CONSUMER DURABLES - 0.4%
Minnesota Mining & Manufacturing Co. 2,922,400 270,322
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
DURABLES - CONTINUED
CONSUMER ELECTRONICS - 1.8%
Black & Decker Corp. (d) 6,119,800 $ 227,963
Matsushita Electric Industrial Co. Ltd. 10,373,000 187,910
Maytag Co. (d) 7,622,100 260,104
Newell Co. 1,125,900 45,036
Philips Electronics NV (Bearer) 1,315,000 111,706
Sony Corp. 2,122,100 201,030
Whirlpool Corp. 1,523,900 101,054
1,134,803
HOME FURNISHINGS - 0.5%
Leggett & Platt, Inc. (d) 6,902,450 307,590
TEXTILES & APPAREL - 0.7%
Intimate Brands, Inc. Class A 1,090,300 25,418
Liz Claiborne, Inc. 2,547,800 139,970
NIKE, Inc. Class B 3,248,500 172,170
Polo Ralph Lauren Corp. Class A 168,100 4,402
Reebok International Ltd. 407,100 19,821
Tommy Hilfiger (a) 1,425,400 71,181
432,962
TOTAL DURABLES 3,712,698
ENERGY - 12.0%
ENERGY SERVICES - 2.9%
Dresser Industries, Inc. (d) 9,808,400 421,761
ENSCO International, Inc. 1,831,400 72,226
Global Marine, Inc. (a) 6,791,400 225,814
Halliburton Co. 3,991,200 207,542
Noble Drilling Corp. (a) 3,623,700 116,864
Santa Fe International Corp. 221,000 10,277
Schlumberger Ltd. 6,131,300 516,179
Tidewater, Inc. 766,570 45,419
Transocean Offshore, Inc. 4,229,600 202,756
Western Atlas, Inc. (a) 115,700 10,182
1,829,020
OIL & GAS - 9.1%
Amoco Corp. 3,723,870 358,888
Anadarko Petroleum Corp. (d) 4,217,050 302,837
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
ENERGY - CONTINUED
OIL & GAS - CONTINUED
Apache Corp. 3,059,715 $ 131,185
British Petroleum PLC:
Ord. 31,573,267 477,945
ADR 122 11
Burlington Resources, Inc. 4,624,600 237,300
Canadian Natural Resources Ltd. (a)(d) 6,005,800 177,210
Chesapeake Energy Corp. 663,300 7,545
Chevron Corp. 2,499,200 207,902
Coastal Corp. (The) 2,692,000 164,885
Cooper Cameron Corp. (a) 1,571,500 112,853
Eagle Geophysical, Inc. (a) 43,900 867
Enron Oil & Gas Co. 7,379,200 164,187
Exxon Corp. 9,295,800 595,512
Kerr-McGee Corp. 192,400 13,240
Louisiana Land & Exploration Co. 300,000 23,494
Mobil Corp. 2,145,000 158,730
Noble Affiliates, Inc. (d) 3,200,400 143,218
Occidental Petroleum Corp. 9,034,800 234,340
Phillips Petroleum Co. 2,919,800 150,735
Pioneer Natural Resources Co. 742,200 31,080
Poco Petroleums Ltd. (a) 3,731,700 36,748
Pogo Producing Co. 1,528,364 66,770
Renaissance Energy Ltd. (a)(d) 8,000,000 199,848
Royal Dutch Petroleum Co. 10,200,000 566,100
Texaco, Inc. 5,652,000 347,245
Total SA Class B 5,329,350 612,460
USX-Marathon Group 500,000 18,594
Union Pacific Resources Group, Inc. 1,351,062 35,381
United Meridian Corp. (a) 869,200 31,943
Unocal Corp. 5,204,308 225,086
5,834,139
TOTAL ENERGY 7,663,159
FINANCE - 12.3%
BANKS - 4.7%
Banc One Corp. 1,837,052 102,530
BankAmerica Corp. 9,195,800 674,167
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - CONTINUED
BANKS - CONTINUED
Barclays PLC Ord. 1,100,600 $ 29,732
Barnett Banks, Inc. 404,900 28,647
Chase Manhattan Corp. 3,235,000 381,730
Citicorp 6,629,800 887,979
Comerica, Inc. 130,600 10,309
Credit Suisse Group (Reg.) 549,900 74,624
Fifth Third Bancorp 42,900 2,805
First International Bancorp, Inc. 13,500 242
HSBC Holdings PLC Ord. 535,656 19,089
Lloyds TSB Group PLC 849,523 11,450
Mellon Bank Corp. 1,859,600 101,813
National City Corp. 200,000 12,313
NationsBank Corp. 2,470,800 152,881
Providian Financial Corp. 1,650,000 65,483
Societe Generale Class A 180,000 26,170
Synovus Financial Corp. 939,850 20,207
U.S. Bancorp 1,087,200 104,915
Wells Fargo & Co. 965,600 265,540
2,972,626
CREDIT & OTHER FINANCE - 0.3%
American Capital Strategies Ltd. 6,000 120
Fleet Financial Group, Inc. 200,000 13,113
Green Tree Financial Corp. 794,500 37,342
Greenpoint Financial Corp. 675,900 42,835
Household International, Inc. 873,465 98,865
192,275
FEDERAL SPONSORED CREDIT - 1.5%
Federal Home Loan Mortgage Corporation 8,861,600 312,371
Federal National Mortgage Association 11,948,000 561,556
SLM Holding Corp. 569,100 87,926
961,853
INSURANCE - 5.2%
AFLAC, Inc. 2,302,400 124,904
Aetna, Inc. 404,900 32,973
Allstate Corp. 6,756,500 543,054
American International Group, Inc. 6,006,150 619,760
CIGNA Corp. 1,012,000 188,485
Chubb Corp. (The) 3,282,800 233,284
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - CONTINUED
INSURANCE - CONTINUED
Equitable of Iowa Companies 1,550,000 $ 103,850
Frontier Insurance Group, Inc. 19,200 730
General Re Corp. 1,892,900 375,741
INSpire Insurance Solutions, Inc. 24,100 437
MBIA, Inc. 428,600 53,763
Mid Ocean Ltd. 1,018,700 64,560
Old Republic International Corp. 1,391,800 54,280
Progressive Corp. 1,007,100 107,886
Reliastar Financial Corp. 2,039,176 81,185
SunAmerica, Inc. 4,587,450 179,771
Travelers Group, Inc. (The) 4,858,593 331,599
UNUM Corp. 4,333,400 197,711
3,293,973
SAVINGS & LOANS - 0.2%
Charter One Financial Corp. 1,174,803 69,461
Washington Mutual, Inc. 1,302,500 90,849
160,310
SECURITIES INDUSTRY - 0.4%
Merrill Lynch & Co., Inc. 2,373,200 176,062
Morgan Stanley Dean Witter Discover and Co. 1,550,035 83,799
259,861
TOTAL FINANCE 7,840,898
HEALTH - 9.2%
DRUGS & PHARMACEUTICALS - 6.1%
Alkermes, Inc. (a) 332,400 6,856
American Home Products Corp. 3,897,600 284,525
Astra AB Class A Free shares 3,247,000 60,062
Aviron 374,600 9,412
Bristol-Myers Squibb Co. 8,139,800 673,568
Elan Corp. PLC ADR (a) 2,301,000 115,194
Genentech, Inc. special (a) 795,100 46,215
Gilead Sciences, Inc. (a) 189,600 8,414
Hyseq, Inc. 156,300 3,106
Lilly (Eli) & Co. 2,416,400 291,025
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
HEALTH - CONTINUED
DRUGS & PHARMACEUTICALS - CONTINUED
Merck & Co., Inc. 7,500,000 $ 749,531
Novartis AG (Reg.) 109,600 168,790
Pharmacia & Upjohn, Inc. 200,000 7,300
Pfizer, Inc. 5,451,800 327,449
Rhone Poulenc SA Class A 3,626,400 144,851
Schering-Plough Corp. 7,478,600 385,148
SmithKline Beecham PLC ADR 600,000 29,325
Takeda Chemical Industries Ltd. 4,257,000 128,057
ViroPharma, Inc. 62,800 1,382
Warner-Lambert Co. 3,096,300 417,807
3,858,017
MEDICAL EQUIPMENT & SUPPLIES - 1.4%
Abbott Laboratories 1,090,700 69,736
Becton, Dickinson & Co. 1,073,100 51,375
Boston Scientific Corp. (a) 2,147,900 118,537
Guidant Corp. 830,800 46,525
Johnson & Johnson 5,550,000 319,819
McKesson Corp. 926,500 94,445
Medtronic, Inc. 2,809,000 132,023
St. Jude Medical, Inc. (a) 1,198,900 42,036
Vista Medical Technologies, Inc. 62,000 922
875,418
MEDICAL FACILITIES MANAGEMENT - 1.7%
Carematrix Corp. (a)(d) 899,100 22,815
Castle Dental Centers, Inc. 18,300 257
Columbia/HCA Healthcare Corp. 8,307,453 238,839
HEALTHSOUTH Corp. (a) 13,533,200 361,167
Humana, Inc. (a) 900,000 21,431
Oxford Health Plans, Inc. (a) 2,021,900 151,390
Sunrise Assisted Living, Inc. (a) 259,200 9,364
Tenet Healthcare Corp. (a) 1,392,195 40,548
Trigon Healthcare, Inc. 110,000 2,729
United HealthCare Corp. 3,625,100 181,255
Universal Health Services, Inc. Class B (a) 788,100 34,085
Vencor, Inc. (a) 611,069 25,207
1,089,087
TOTAL HEALTH 5,822,522
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
HOLDING COMPANIES - 0.7%
ABB AB:
sponsored ADR 45,100 $ 6,382
Series A 1,257,500 17,860
Cookson Group PLC 22,564,367 91,877
Norfolk Southern Corp. 3,069,700 316,947
433,066
INDUSTRIAL MACHINERY & EQUIPMENT - 8.2%
ELECTRICAL EQUIPMENT - 4.4%
Alcatel Alsthom Compagnie Generale d'Electricite SA 2,305,300
307,848
Chicago Miniature Lamp, Inc. (a) 346,000 11,505
Emerson Electric Co. 4,964,800 286,097
FARO Technologies, Inc. 13,400 219
General Electric Co. 27,615,600 1,879,587
Honeywell, Inc. 129,400 8,694
Innova Corp. 30,300 716
Nextlevel Systems, Inc. (a) 516,000 8,643
Smith (A.O.) Corp. Class B (d) 898,000 35,583
Westinghouse Electric Corp. 9,064,164 245,299
2,784,191
INDUSTRIAL MACHINERY & EQUIPMENT - 3.5%
AGCO Corp. 1,078,100 34,161
Case Corp.(d) 6,598,400 439,618
Caterpillar, Inc. 3,521,800 189,957
Cincinnati Milacron, Inc. 1,956,200 52,573
Cooper Industries, Inc. 200,000 10,813
Deere & Co. 4,040,000 217,150
Dover Corp. 1,965,600 133,415
Harnischfeger Industries, Inc. 1,939,300 82,905
IDEX Corp. (d) 1,628,525 55,981
Illinois Tool Works, Inc. 7,937,000 396,850
Industrial Distribution Group, Inc. 28,000 588
Ingersoll-Rand Co. 902,850 38,879
Komatsu Ltd. Ord. 4,401,000 24,686
Tyco International Ltd. 5,201,103 426,816
UCAR International, Inc. (a)(d) 3,026,200 144,501
2,248,893
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED
POLLUTION CONTROL - 0.3%
Browning-Ferris Industries, Inc. 300,000 $ 11,419
Waste Management, Inc. 3,959,900 138,349
149,768
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 5,182,852
MEDIA & LEISURE - 4.7%
BROADCASTING - 1.0%
Chancellor Media Corp. 108,800 5,725
Clear Channel Communications, Inc. (a) 2,575,600 167,092
Cox Communications, Inc. Class A (a) 460,700 12,698
HSN, Inc. (a) 598,490 24,314
Heftel Broadcasting Corp. Class A (a) 381,900 28,929
TCI Group Class A 636,202 13,042
Tele-Communications Liberty Media Group, Series A (a) 200,000 5,988
Tele-Communications, Inc. (TCI) (Ventures Group) Series A 363,798
7,503
Time Warner, Inc. 6,882,715 372,957
U.S. Satellite Broadcasting Co., Inc. Class A (a) 460,000 3,968
Univision Communications, Inc. Class A (a) 47,500 2,577
644,793
ENTERTAINMENT - 0.6%
Disney (Walt) Co. 2,417,900 194,943
Ticketmaster Group, Inc. 300,000 6,975
Viacom, Inc. Class B (non-vtg.) (a) 5,154,400 163,008
364,926
LEISURE DURABLES & TOYS - 0.0%
Hasbro, Inc. 182,550 5,134
Mattel, Inc. 350,000 11,594
16,728
LODGING & GAMING - 2.3%
Bally Gaming International, Inc. warrants 7/29/98 (a) 225,000 211
Circus Circus Enterprises, Inc. (a) 775,100 19,523
Extended Stay America, Inc. (a) 3,678,503 55,178
Hilton Hotels Corp. 7,529,200 253,640
HFS, Inc. (a) 5,016,100 373,386
Host Marriott Corp. (a)(d) 15,610,500 355,139
ITT Corp. (a) 3,851,800 260,959
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
MEDIA & LEISURE - CONTINUED
LODGING & GAMING - CONTINUED
La Quinta Motor Inns, Inc. 1,596,186 $ 37,610
Mirage Resorts, Inc. (a) 2,104,000 63,383
Prime Hospitality Corp. (a)(d) 3,077,600 69,438
1,488,467
PUBLISHING - 0.6%
Cognizant Corp. 1,098,700 44,772
Dun & Bradstreet Corp. 486,000 13,790
Gannett Co., Inc. 655,200 70,720
Harcourt General, Inc. 848,900 42,074
Houghton Mifflin Co. 600,000 22,650
McGraw-Hill, Inc. 428,700 29,018
New York Times Co. (The) Class A 693,200 36,393
Times Mirror Co. Class A 697,300 38,308
Tribune Co. 823,100 43,882
US WEST Media Group (a) 1,050,000 23,428
365,035
RESTAURANTS - 0.2%
Brinker International, Inc. (a) 310,000 5,521
Host Marriott Services Corp. (a)(d) 3,132,100 46,590
McDonald's Corp. 1,294,000 61,627
113,738
TOTAL MEDIA & LEISURE 2,993,687
NONDURABLES - 3.8%
BEVERAGES - 0.6%
Coca-Cola Co. (The) 800,000 48,751
PepsiCo, Inc. 9,056,800 367,366
Stroh Brewery Co. warrants 1/1/01 (a) 21,307 76
416,193
FOODS - 0.2%
CPC International, Inc. 200,000 18,525
Campbell Soup Co. 1,660,000 81,340
Nabisco Holdings Corp. Class A 193,500 8,236
108,101
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
NONDURABLES - CONTINUED
HOUSEHOLD PRODUCTS - 1.6%
Avon Products, Inc. 129,300 $ 8,016
Clorox Co. 496,000 36,766
Colgate-Palmolive Co. 200,000 13,938
Estee Lauder Companies, Inc. 963,000 44,539
Gillette Co. 2,429,200 209,670
Procter & Gamble Co. 6,936,400 479,045
Unilever:
PLC Ord. 2,560,100 75,228
NV ADR 773,300 164,423
1,031,625
TOBACCO - 1.4%
Philip Morris Companies, Inc. 20,329,800 844,957
RJR Nabisco Holdings Corp. 1,063,800 36,568
881,525
TOTAL NONDURABLES 2,437,444
RETAIL & WHOLESALE - 7.2%
APPAREL STORES - 0.9%
AnnTaylor Stores Corp. (a) 810,400 12,055
Gap, Inc. 6,290,400 314,913
Lamonts Apparel, Inc. warrants 6/10/99 (a) 264,824 -
Limited, Inc. (The) 4,650,300 113,642
Ross Stores, Inc. 822,200 28,058
Saks Holdings, Inc. (a) 200,000 4,175
TJX Companies, Inc. 2,188,600 66,889
539,732
DRUG STORES - 0.5%
CVS Corp. 4,838,143 275,169
Rite Aid Corp. 1,014,800 56,258
Walgreen Co. 400,000 10,250
341,677
GENERAL MERCHANDISE STORES - 2.4%
Consolidated Stores Corp. (a) 3,567,468 149,387
Costco Companies, Inc. (a) 861,800 32,424
Dayton Hudson Corp. 6,054,700 362,904
Federated Department Stores, Inc. (a) 3,870,900 166,933
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
RETAIL & WHOLESALE - CONTINUED
GENERAL MERCHANDISE STORES - CONTINUED
Ito-Yokado Co. Ltd. 1,275,000 $ 69,291
Neiman-Marcus Group, Inc. (a) 768,700 24,598
Sears, Roebuck & Co. 2,239,500 127,512
Wal-Mart Stores, Inc. 16,975,500 621,728
1,554,777
GROCERY STORES - 0.4%
Asda Group PLC 200,000 511
Ahold NV 571,700 15,515
Safeway, Inc. (a) 4,377,200 238,010
254,036
RETAIL & WHOLESALE, MISCELLANEOUS - 3.0%
Barnes & Noble, Inc. (a) 1,631,200 46,081
Circuit City Stores, Inc. - Circuit City Group 702,500 28,320
Comcast Corp. Class A special 375,000 9,656
Corporate Express, Inc. (a) 837,500 17,692
Home Depot, Inc. 14,001,225 729,814
Lowe's Companies, Inc. 5,873,500 228,332
Officemax, Inc. (a) 3,603,150 54,723
Office Depot, Inc. (a) 5,181,900 104,610
Pier 1 Imports, Inc. 600,000 10,763
Staples, Inc. (a) 6,610,600 182,618
Tandy Corp. 1,722,600 57,922
Toys "R" Us, Inc. (a) 10,060,200 357,137
U.S. Office Products Co. (a) 1,400,000 49,350
Viking Office Products, Inc. (a) 1,562,500 33,984
1,911,002
TOTAL RETAIL & WHOLESALE 4,601,224
SERVICES - 2.1%
ADVERTISING - 0.7%
Omnicom Group, Inc. (d) 4,450,788 323,795
Outdoor Systems, Inc. (a) 2,655,750 69,713
Universal Outdoor Holdings, Inc. (a) 372,000 13,950
407,458
EDUCATIONAL SERVICES - 0.0%
EduTrek International, Inc. Class A 29,200 777
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
SERVICES - CONTINUED
LEASING & RENTAL - 0.4%
Avis Rent A Car, Inc. 154,100 $ 3,679
Hertz Corp. Class A 203,000 7,651
Republic Industries, Inc. (a) 7,360,000 242,420
Ryder Systems, Inc. 293,400 10,544
264,294
PRINTING - 0.0%
Wallace Computer Services, Inc. 674,400 24,869
SERVICES - 1.0%
AccuStaff, Inc. (a) 532,000 16,757
Assisted Living Concepts, Inc. (a)(d) 1,103,000 17,647
Boron LePore & Associates, Inc. 38,300 886
CDI Corp. (a) 702,500 26,519
CorporateFamily Solutions, Inc. 28,300 478
Hagler Bailly, Inc. 37,000 939
Hall Kinion & Associates, Inc. 20,500 433
Interim Services, Inc. (a) 1,216,800 34,223
Manpower, Inc. 3,455,900 136,508
Pittston Co. (Brinks Group) 1,704,400 68,283
Rentokil Initial PLC 20,879,400 86,538
Robert Half International, Inc. (a)(d) 4,885,350 202,131
Service Corp. International 500,000 16,094
607,436
TOTAL SERVICES 1,304,834
TECHNOLOGY - 16.8%
COMMUNICATIONS EQUIPMENT - 2.3%
Advanced Fibre Communication, Inc. 574,400 23,550
Ascend Communications, Inc. (a) 1,956,300 63,335
Cisco Systems, Inc. (a) 5,641,200 412,160
DSC Communications Corp. (a) 891,900 24,026
Ericsson (L.M.) Telephone Co. Class B ADR 35,600 1,707
Lucent Technologies, Inc. 6,764,862 550,491
Newbridge Networks Corp. (a) 2,016,200 120,720
Nokia Corp. AB:
sponsored ADR 230,000 21,577
Series A 600,000 56,839
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
COMMUNICATIONS EQUIPMENT - CONTINUED
Northern Telecom Ltd. 525,000 $ 54,836
Tellabs, Inc. 201,000 10,352
3Com Corp. (a) 2,005,975 102,806
1,442,399
COMPUTER SERVICES & SOFTWARE - 4.9%
America Online, Inc. (a) 1,786,900 134,799
Automatic Data Processing, Inc. 41,900 2,095
CUC International, Inc. (a) 12,811,750 397,164
Ceridian Corp. (a) 1,150,700 42,576
ChoicePoint, Inc. (a) 87,017 3,253
Computer Associates International, Inc. 700,400 50,297
CompUSA, Inc. (a) 1,500,000 52,500
Computer Sciences Corp. (a) 1,896,275 134,161
Corsair Communications, Inc. 19,800 418
Electronic Arts, Inc. (a) 1,261,100 48,710
Electronics for Imaging, Inc. (a) 1,074,800 54,815
Equifax, Inc. 870,170 27,356
First Data Corp. 3,944,000 148,147
Galileo International, Inc. 208,800 5,833
HBO & Co. 6,350,400 239,728
J.D. Edwards & Co. 46,800 1,568
Microsoft Corp. (a) 6,109,500 808,363
Netscape Communications Corp. (a) 870,900 31,352
Oracle Corp. (a) 17,842,900 650,151
Parametric Technology Corp. (a) 2,822,100 124,525
Paychex, Inc. 1,537,350 53,615
Pegasus Systems, Inc. 25,800 468
PeopleSoft, Inc. (a) 1,675,200 100,093
QAD, Inc. 48,100 896
Sabre Group Holdings, Inc. Class A (a) 559,900 20,051
Shared Medical Systems Corp. 80,000 4,230
SunGard Data Systems, Inc. (a) 100,000 2,425
3,139,589
COMPUTERS & OFFICE EQUIPMENT - 5.2%
Adaptec, Inc. (a) 1,915,820 89,564
Applied Magnetics Corp. (a) 100,000 3,150
Bay Networks, Inc. (a) 1,925,000 74,352
Canon, Inc. 981,000 28,776
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
COMPUTERS & OFFICE EQUIPMENT - CONTINUED
Comdisco, Inc. (d) 5,465,175 $ 177,960
Compaq Computer Corp. (a) 14,957,750 1,118,092
Dell Computer Corp. (a) 2,187,200 211,885
Diebold, Inc. 1,821,600 86,298
Digital Equipment Corp. (a) 964,700 41,784
EMC Corp. (a) 3,630,241 211,915
Fore Systems, Inc. (a) 400,000 7,875
Hewlett-Packard Co. 1,300,000 90,431
International Business Machines Corp. 6,728,400 712,790
Pitney Bowes, Inc. 2,138,200 177,872
Quantum Corp. 300,000 11,494
Seagate Technology (a) 1,655,300 59,798
Sequent Computer Systems, Inc. (a) 447,700 11,109
Silicon Graphics, Inc. (a) 1,015,800 26,665
Sun Microsystems, Inc. (a) 2,400,000 112,350
Tech Data Corp. (a) 688,800 31,685
Wang Laboratories, Inc. (a) 100,000 2,106
Western Digital Corp. (a) 700,000 28,044
3,315,995
ELECTRONIC INSTRUMENTS - 0.4%
AEHR Test Systems 96,000 1,698
Applied Materials, Inc. (a) 1,600,000 152,400
KLA-Tencor Corp. (a) 500,000 33,781
Thermo Electron Corp. (a) 1,033,200 41,328
Waters Corp. (a) 765,800 33,839
263,046
ELECTRONICS - 3.7%
Analog Devices, Inc. (a) 1,553,866 52,055
Atmel Corp. (a) 1,110,582 40,467
Galileo Technology Ltd. 23,700 782
General Semiconductor, Inc. 129,000 1,661
Intel Corp. 11,535,800 1,064,898
LSI Logic Corp. (a) 1,147,300 36,857
Lattice Semiconductor Corp. (a) 281,600 18,339
Linear Technology Corp. 638,300 43,883
Maxim Integrated Products, Inc. (a) 694,600 49,620
Microchip Technology, Inc. (a) 100,000 4,516
Micron Technology, Inc. (a) 1,208,500 41,920
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
ELECTRONICS - CONTINUED
Minebea Co. Ltd. 2,000,000 $ 22,270
Motorola, Inc. 5,041,800 362,379
National Semiconductor Corp. (a) 670,000 27,470
Power One Inc. 21,100 295
Rohm Co. Ltd. 213,000 25,134
Texas Instruments, Inc. 4,008,300 541,622
Xilinx, Inc. (a) 100,000 5,063
2,339,231
PHOTOGRAPHIC EQUIPMENT - 0.3%
Eastman Kodak Co. 431,200 28,001
Fuji Photo Film Co. Ltd. 4,085,000 169,049
197,050
TOTAL TECHNOLOGY 10,697,310
TRANSPORTATION - 2.5%
AIR TRANSPORTATION - 0.7%
AMR Corp. (a) 1,223,900 135,471
Comair Holdings, Inc. 1,646,025 44,237
Delta Air Lines, Inc. 663,300 62,475
Northwest Airlines Corp. Class A (a) 2,570,000 106,655
Travel Services International, Inc. 16,300 338
UAL Corp. (a) 1,441,400 121,978
471,154
RAILROADS - 1.6%
Bombardier, Inc. Class B 4,036,600 81,840
Burlington Northern Santa Fe Corp. 580,640 56,104
CSX Corp. 9,786,100 572,487
Illinois Central Corp., Series A 1,849,964 67,986
Trinity Industries, Inc. (d) 3,314,800 159,939
Wisconsin Central Transportation Corp. (a) 1,543,900 49,115
987,471
TRUCKING & FREIGHT - 0.2%
American Freightways Corp. (a) 1,460,200 27,744
Landstar System, Inc. (a)(d) 1,101,200 29,457
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TRANSPORTATION - CONTINUED
TRUCKING & FREIGHT - CONTINUED
Pittston Co. (Burlington Group) 827,200 $ 23,472
Swift Transportation Co., Inc. (a)(d) 2,365,500 74,809
155,482
TOTAL TRANSPORTATION 1,614,107
UTILITIES - 3.0%
CELLULAR - 0.1%
AirTouch Communications, Inc. (a) 1,890,000 66,977
360 Degrees Communications Co. (a) 762,300 15,913
Vodafone Group PLC sponsored ADR 200,000 10,750
93,640
ELECTRIC UTILITY - 0.2%
Entergy Corp. 2,910,000 75,842
Niagara Mohawk Power Corp. (a) 1,139,000 10,892
Southern Co. 2,004,700 45,231
131,965
GAS - 0.3%
Enron Corp. 1,825,400 70,278
Sonat, Inc. 2,399,800 122,090
192,368
TELEPHONE SERVICES - 2.4%
AT&T Corp. 6,358,900 281,778
Ameritech Corp. 1,709,200 113,662
BellSouth Corp. 4,128,700 190,952
Brooks Fiber Properties, Inc. (a) 900,000 42,019
MCI Communications Corp. 1,723,500 50,628
NEXTLINK Communications, Inc. Class A 73,800 1,771
Nippon Telegraph & Telephone Corp. Ord. 1,522 14,039
SBC Communications, Inc. 3,382,200 207,583
Teleport Communications Group, Inc. Class A (a) 1,605,600 72,051
Telecom Italia Mobile Spa 17,100,000 68,375
WorldCom, Inc. (a) 12,938,000 457,682
1,500,540
TOTAL UTILITIES 1,918,513
TOTAL COMMON STOCKS
(Cost $41,138,794) 61,006,176
NONCONVERTIBLE PREFERRED STOCKS - 0.0%
SHARES VALUE (NOTE 1)
(000S)
INDUSTRIAL MACHINERY & EQUIPMENT - 0.0%
ELECTRICAL EQUIPMENT - 0.0%
Ampex Corp. 8% (a)(e)
(Cost $2,318) 4,415 $ 3,432
NONCONVERTIBLE BONDS - 0.0%
MOODY'S RATINGS PRINCIPAL
(UNAUDITED) AMOUNT (000S)
RETAIL & WHOLESALE - 0.0%
APPAREL STORES - 0.0%
Lamonts Apparel, Inc. 10 1/4%, 11/1/99
pay-in-kind (b)(f) (Cost $8,515) - $ 8,804 352
COMMERCIAL MORTGAGE SECURITIES - 0.0%
Bardell Associates Note Trust
12 1/2%, 11/1/08 (e)
(Cost $4,551) - 4,477 4,756
CASH EQUIVALENTS - 4.1%
MATURITY
AMOUNT (000S)
Investment in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 6.06%, dated
9/30/97 due 10/1/97 $ 745,198 745,073
SHARES
Taxable Central Cash Fund (g) 1,855,889,828 1,855,890
TOTAL CASH EQUIVALENTS
(Cost $2,600,963) 2,600,963
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $43,755,141) $ 63,615,679
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. Represents number of units held.
4. Affiliated company (see Note 7 of Notes to Financial Statements).
5. 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 $ 4,551
6. 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 $352,000 or 0%
of net assets.
7. At period end, the seven-day yield on the Taxable Central Cash Fund
was 5.66%. The yield refers to the income earned by investing in the
fund over the seven-day period, expressed as an annual percentage.
INCOME TAX INFORMATION
At September 30, 1997, the aggregate cost of investment securities for
income tax purposes was $43,790,563,000. Net unrealized appreciation
aggregated $19,825,116,000, of which $20,243,572,000 related to
appreciated investment securities and $418,456,000 related to
depreciated investment securities.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNTS) SEPTEMBER 30, 1997
ASSETS
INVESTMENT IN SECURITIES, AT VALUE (INCLUDING REPURCHASE $ 63,615,679
AGREEMENTS OF $745,073) (COST $43,755,141) -
SEE ACCOMPANYING SCHEDULE
CASH 1
RECEIVABLE FOR INVESTMENTS SOLD 253,281
RECEIVABLE FOR FUND SHARES SOLD 70,710
DIVIDENDS RECEIVABLE 70,831
INTEREST RECEIVABLE 8,577
OTHER RECEIVABLES 6,450
TOTAL ASSETS 64,025,529
LIABILITIES
PAYABLE FOR INVESTMENTS PURCHASED $ 142,037
PAYABLE FOR FUND SHARES REDEEMED 109,783
ACCRUED MANAGEMENT FEE 22,636
OTHER PAYABLES AND ACCRUED EXPENSES 9,716
TOTAL LIABILITIES 284,172
NET ASSETS $ 63,741,357
NET ASSETS CONSIST OF:
PAID IN CAPITAL $ 41,267,545
UNDISTRIBUTED NET INVESTMENT INCOME 250,571
ACCUMULATED UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON 2,362,716
INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS 19,860,525
AND ASSETS AND LIABILITIES IN FOREIGN CURRENCIES
NET ASSETS, FOR 638,388 SHARES OUTSTANDING $ 63,741,357
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE $99.85
($63,741,357 (DIVIDED BY) 638,388 SHARES)
MAXIMUM OFFERING PRICE PER SHARE (100/97.00 OF $99.85) $102.94
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS SIX MONTHS ENDED SEPTEMBER 30, 1997
INVESTMENT INCOME $ 363,054
DIVIDENDS (INCLUDING $30,824 RECEIVED FROM
AFFILIATED ISSUERS)
INTEREST 67,493
TOTAL INCOME 430,547
EXPENSES
MANAGEMENT FEE $ 173,866
BASIC FEE
PERFORMANCE ADJUSTMENT (48,953)
TRANSFER AGENT FEES 54,586
ACCOUNTING FEES AND EXPENSES 457
NON-INTERESTED TRUSTEES' COMPENSATION 126
CUSTODIAN FEES AND EXPENSES 1,117
REGISTRATION FEES 457
AUDIT 143
LEGAL 311
INTEREST 1
MISCELLANEOUS 17
TOTAL EXPENSES BEFORE REDUCTIONS 182,128
EXPENSE REDUCTIONS (4,207) 177,921
NET INVESTMENT INCOME 252,626
REALIZED AND UNREALIZED GAIN (LOSS)
NET REALIZED GAIN (LOSS) ON:
INVESTMENT SECURITIES (INCLUDING REALIZED GAIN OF 2,432,193
$196,276 ON SALES OF INVESTMENTS IN AFFILIATED ISSUERS)
FOREIGN CURRENCY TRANSACTIONS 102 2,432,295
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON:
INVESTMENT SECURITIES 11,285,666
ASSETS AND LIABILITIES IN FOREIGN CURRENCIES (60) 11,285,606
NET GAIN (LOSS) 13,717,901
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 13,970,527
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS SIX MONTHS ENDED YEAR ENDED
SEPTEMBER 30, MARCH 31,
1997 1997
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS $ 252,626 $ 945,962
NET INVESTMENT INCOME
NET REALIZED GAIN (LOSS) 2,432,295 1,163,977
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) 11,285,606 2,622,185
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 13,970,527 4,732,124
FROM OPERATIONS
DISTRIBUTIONS TO SHAREHOLDERS (473,565) (718,653)
FROM NET INVESTMENT INCOME
FROM NET REALIZED GAIN (921,882) (8,153,202)
TOTAL DISTRIBUTIONS (1,395,447) (8,871,855)
SHARE TRANSACTIONS 4,904,536 9,169,545
NET PROCEEDS FROM SALES OF SHARES
REINVESTMENT OF DISTRIBUTIONS 1,372,468 8,742,406
COST OF SHARES REDEEMED (6,354,179) (18,707,881)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING (77,175) (795,930)
FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 12,497,905 (4,935,661)
NET ASSETS
BEGINNING OF PERIOD 51,243,452 56,179,113
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT $ 63,741,357 $ 51,243,452
INCOME OF $250,571 AND $544,318, RESPECTIVELY)
OTHER INFORMATION
SHARES
SOLD 53,532 115,978
ISSUED IN REINVESTMENT OF DISTRIBUTIONS 16,528 118,619
REDEEMED (70,651) (237,540)
NET INCREASE (DECREASE) (591) (2,943)
</TABLE>
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED YEARS ENDED MARCH 31,
SEPTEMBER 30,
1997 1997 1996 1995 1994 E 1993
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
NET ASSET VALUE, BEGINNING $ 80.20 $ 87.52 $ 72.44 $ 69.72 $ 68.44 $ 68.13
OF PERIOD
INCOME FROM INVESTMENT
OPERATIONS
NET INVESTMENT INCOME .40 D 1.38 D .79 .27 .61 1.20
NET REALIZED AND 21.46 5.25 19.57 5.22 7.92 9.18
UNREALIZED GAIN (LOSS)
TOTAL FROM INVESTMENT 21.86 6.63 20.36 5.49 8.53 10.38
OPERATIONS
LESS DISTRIBUTIONS
FROM NET INVESTMENT (.75) (1.10) (.59) (.14) (.75) (1.25)
INCOME
FROM NET REALIZED GAIN (1.46) (12.85) (4.69) (2.63) (6.50) (8.82)
TOTAL DISTRIBUTIONS (2.21) (13.95) (5.28) (2.77) (7.25) (10.07)
NET ASSET VALUE, END $ 99.85 $ 80.20 $ 87.52 $ 72.44 $ 69.72 $ 68.44
OF PERIOD
TOTAL RETURN B, C 27.81% 9.11% 28.43% 8.21% 12.94% 17.06%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $ 63,741 $ 51,243 $ 56,179 $ 39,803 $ 33,119 $ 24,886
(IN MILLIONS)
RATIO OF EXPENSES TO .62% A .66% .95% .99% 1.00% 1.00%
AVERAGE NET ASSETS
RATIO OF EXPENSES TO .60% A, .64% .92% .96% .99% 1.00%
AVERAGE NET ASSETS AFTER F F F F F
EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT .86% A 1.75% .95% .39% 1.07% 2.11%
INCOME TO AVERAGE
NET ASSETS
PORTFOLIO TURNOVER RATE 31% A 67% 155% 120% 132% 155%
AVERAGE COMMISSION RATE G $ .0437 $ .0394
</TABLE>
A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 6 OF NOTES TO
FINANCIAL STATEMENTS).
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E 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.
F 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 6 OF NOTES TO FINANCIAL STATEMENTS).
G FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY
VARY FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF
TRADES EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND
COMMISSION RATE STRUCTURES MAY DIFFER.
NOTES TO FINANCIAL STATEMENTS
For the period ended September 30, 1997
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.
Effective the close of business on September 30, 1997, the fund was
closed to new accounts. 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 with remaining maturities of sixty days or less
for which quotations are not readily available 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. Income
receipts and expense payments are translated into U.S. dollars at the
prevailing exchange rate on the respective dates of the transactions.
Purchases and sales of securities are translated into U.S. dollars at
the contractual currency exchange rates established at the time of
each trade.
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, 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
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
INVESTMENT INCOME - CONTINUED
date. Non-cash dividends included in dividend income, if any, are
recorded at the fair market value of the securities received. Interest
income is accrued as earned. Investment income is recorded net of
foreign taxes withheld where recovery of such taxes is uncertain.
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, foreign currency transactions,
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.
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.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
securities. 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 foreign currency contracts is
determined using contractual currency exchange rates established at
the time of each trade. The cost of the foreign currency contracts is
included in the cost basis of the associated investment.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with
other affiliated entities of Fidelity Management & Research Company
(FMR), may transfer uninvested cash balances into one or more joint
trading accounts. These balances are invested in one or more
repurchase agreements for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are
marked-to-market daily and maintained at a value at least equal to the
principal amount of the repurchase
2. OPERATING POLICIES - CONTINUED
REPURCHASE AGREEMENTS - CONTINUED
agreement (including accrued interest). 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.
TAXABLE CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by
the SEC, the fund may invest in the Taxable Central Cash Fund (the
Cash Fund) managed by FMR Texas, an affiliate of FMR. The Cash Fund is
an open-end money market fund available only to investment companies
and other accounts managed by FMR and its affiliates. The Cash Fund
seeks preservation of capital, liquidity, and current income by
investing in U.S. Treasury securities and repurchase agreements for
these securities. Income distributions from the Cash Fund are declared
daily and paid monthly from net interest income. Income distributions
received by the fund are recorded as interest income in the
accompanying financial statements.
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 $9,386,000 or 0% of net assets.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $8,689,785,000 and $11,006,537,000, 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. The annual individual fund fee rate is .30%. 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 basic fee
is subject to a performance adjustment (up to a maximum of
(plus/minus).20% of the fund's average net assets over the performance
period) 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 annualized rate of .42% of average
net assets after the performance adjustment.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
SALES LOAD. For the period, Fidelity Distributors Corporation (FDC),
an affiliate of FMR and the general distributor of the fund, received
sales charges of $5,854,000 on sales of shares of the fund.
TRANSFER AGENT FEES. Fidelity Service Company, Inc. (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 annualized rate of .19% of average net assets.
ACCOUNTING FEES. FSC maintains the fund's accounting records. The 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 $1,998,000 for the
period.
5. 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 balance during the period for which
the loan was outstanding amounted to $6,176,000. The weighted average
interest rate was 5.8%.
6. 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 $2,219,000 under this arrangement.
In addition, the fund has entered into arrangements with its custodian
and transfer agent whereby credits realized as a result of uninvested
cash balances were used to reduce a portion of the fund's expenses.
During the period, the fund's custodian and transfer agent fees were
reduced by $4,000 and $1,984,000, respectively, under these
arrangements.
7. 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 PURCHASE SALES DIVIDEND VALUE
AFFILIATE COST COST INCOME
AK Steel Holding Corp. $ - $ - $ 1,042 $ 111,081
Aeroquip Vickers, Inc. 49,433 64,757 1,137 113,293
Anadarko Petroleum Corp. - - 633 302,837
Apache Corp. - 1,717 - -
Assisted Living Concepts, Inc. - - - 17,647
Black & Decker Corp. - - 1,469 227,963
CSX Corp. - 121,961 3,154 -
Canadian Natural Resources Ltd. - - - 177,210
Carematrix Corp. 43 - - 22,815
Carlisle Companies, Inc. - 7,166 - -
Case Corp. - - 660 439,618
Centex Construction Products, Inc. - 4,424 136 -
Centex Corp. - 1,457 - -
Chesapeake Energy Corp. - 20,179 72 -
Cincinnati Milacron, Inc. - 37,567 629 -
Comdisco, Inc. - 12,866 562 177,960
Dresser Industries, Inc. - - 3,531 421,761
Echlin, Inc. - 16,244 1,685 -
Enron Oil & Gas Co. - 19,080 255 -
Global Marine, Inc. - 8,295 - -
Guitar Center, Inc. - - - -
Halter Marine Group, Inc. - 3,375 - 49,495
Hanna (M.A.) Co. - - 570 72,155
Host Marriott Services Corp. - - - 46,590
Host Marriott Corp. - 584 - 355,139
IDEX Corp. - - 391 55,981
Lafarge Corp. 1,035 - 983 159,354
Landstar System, Inc. - - - 29,457
Leggett & Platt, Inc. - 29,149 2,129 307,590
Maytag Co. - 1,041 2,455 260,104
Medusa Corp. - - 494 78,386
NACCO Industries, Inc. Class A - 20,836 - -
Noble Affiliates, Inc. - 53,909 339 143,218
Nucor Corp. - - 919 241,962
Oakwood Homes Corp. - - 74 105,532
Omnicom Group, Inc. - - 2,003 323,795
Owens-Corning - - - -
Pegasus Communications Corp.
Class A - 1,120 - -
Pioneer Natural Resources Co. - - - -
Prime Hospitality Corp. - - - 69,438
7. TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED
AMOUNTS IN THOUSANDS PURCHASE SALES DIVIDEND VALUE
AFFILIATE COST COST INCOME
Pulte Corp. $ - $ 1,583 $ 280 $ 88,277
Renaissance Energy Ltd. - 32,342 - 199,848
Revco (D.S.), Inc. - 2,211 - -
Robert Half International, Inc. - 6,546 - 202,131
Sherwin-Williams Co. - 8,764 2,269 318,017
Smith (A.O.) Corp. Class B - 9,246 407 35,583
Sonat, Inc. - 73,657 1,197 -
Southdown, Inc. - 7,265 154 -
Swift Transportation Co., Inc. - - - 74,809
Synetic, Inc. - - - 47,461
Toll Brothers, Inc. - 11,266 - -
Trinity Industries, Inc. - 4,944 1,195 159,939
UCAR International, Inc. - 18,020 - 144,501
USG Corp. - 5,975 - 125,261
TOTALS $ 50,511 $ 607,546 $ 30,824 $ 5,706,208
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 September 30, 1997, and the related statement of
operations for the six months then ended, the statement of changes in
net assets for the six months then ended and for the year ended March
31, 1997 and the financial highlights for the six months ended
September 30, 1997 and each of the five years in the period ended
March 31, 1997. 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 September 30, 1997 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 September 30, 1997,
the results of its operations for the six months then ended, the
changes in its net assets for the six months then ended and for the
year ended March 31, 1997, and the financial highlights for the six
months ended September 30, 1997 and each of the five years in the
period ended March 31, 1997, in conformity with generally accepted
accounting principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
November 4, 1997
MANAGING YOUR INVESTMENTS
Fidelity offers several ways to conveniently manage your personal
investments via your telephone or PC. You can access your account
information, conduct trades and research your investments 24 hours a
day.
BY PHONE
Fidelity TouchTone Xpressprovides a single toll-free number to access
account balances, positions, quotes and trading. It's easy to navigate
the service, and on your first call, the system will help you create a
personal identification number (PIN) for security.
SM
(PHONE_GRAPHIC)TOUCHTONE XPRESS
1-800-544-5555
PRESS
For mutual fund and brokerage trading.
For quotes.*
For account balances and holdings.
To review orders and mutual
fund activity.
To change your PIN.
To speak to a Fidelity representative.
0
*
BY PC
Fidelity's Web site on the Internet provides a wide range of
information, including daily financial news, fund performance,
interactive planning tools and news about Fidelity products and
services.
(PHONE_GRAPHIC)FIDELITY'S WEB SITE
WWW.FIDELITY.COM
If you are not currently on the Internet, call Fidelity at
1-800-544-7272 for significant savings on Web access from internetMCI.
SM
(PHONE_GRAPHIC)
FIDELITY ON-LINE XPRESS+
TM
Fidelity On-line Xpress+ software for Windows combines comprehensive
portfolio management capabilities, securities trading and access to
research and analysis tools . . . all on your desktop. Call Fidelity
at 1-800-544-7272 or visit our Web site for more information on how to
manage your investments via your PC.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD
AND RETURN WILL VARY AND,
EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS MEANS
THAT YOU MAY HAVE A GAIN
OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO ASSURANCE THAT MONEY
MARKET FUNDS WILL BE ABLE TO
MAINTAIN A STABLE $1 SHARE PRICE; AN INVESTMENT IN A MONEY MARKET FUND
IS NOT INSURED OR
GUARANTEED BY THE U.S. GOVERNMENT. TOTAL RETURNS ARE HISTORICAL AND
INCLUDE CHANGES IN SHARE PRICE,
REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS, AND THE EFFECTS OF ANY
SALES CHARGES.
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For directions and hours,
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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
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Attn: Redemptions - CP6I
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P.O. Box 500
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(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 500
Merrimack, NH 03054-0500
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research
(U.K.) Inc., London, England
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
William J. Hayes, Vice President
Abigail Johnson, Vice President
Robert Stansky, Vice President
Arthur S. Loring, Secretary
Richard A. Silver, Treasurer
Robert H. Morrison, Manager,
Security Transactions
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
ADVISORY BOARD
J. Gary Burkhead
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Company, Inc.
Boston, MA
CUSTODIAN
State Street Bank and Trust Company
North Quincy, MA
FIDELITY'S GROWTH FUNDS
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THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Exchanges/Redemptions 1-800-544-7777
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
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(8 a.m. - 9 p.m.)
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for the deaf and hearing impaired
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(registered trademark)
TouchTone Xpress 1-800-544-5555
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