FIDELITY
MAGELLAN(REGISTERED TRADEMARK)
FUND
SEMIANNUAL REPORT
SEPTEMBER 30, 1998
(2 fidelity logo graphics)(registered trademark)
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 10 A summary of major shifts in the fund's
investments over the past six months.
INVESTMENTS 11 A complete list of the fund's investments
with their market values.
FINANCIAL STATEMENTS 27 Statements of assets and liabilities,
operations, and changes in net assets,
as well as financial highlights.
NOTES 31 Notes to the financial statements.
REPORT OF INDEPENDENT 37 The auditors' opinion.
ACCOUNTANTS
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.
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.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
The stock and bond markets continued to be influenced by competing
factors as the third quarter of 1998 ended. On the one hand, low
inflation, low unemployment and moderate growth in the U.S. economy
provided a foundation for positive returns. But growing concerns about
U.S. corporate earnings, combined with fears about the health of the
economies and financial markets in Japan, Russia and many emerging
markets, led to a continuation of the volatility that has marked most
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 PAST 6 PAST 1 PAST 5 PAST 10
30, 1998 MONTHS YEAR YEARS YEARS
FIDELITY MAGELLAN -8.04% 4.61% 98.83% 395.34%
FIDELITY MAGELLAN (INCL. -10.80% 1.47% 92.86% 380.48%
3.00% SALES CHARGE)
S&P 500 (registered trademark) -6.97% 9.05% 147.93% 392.68%
Growth Funds Average -11.80% -1.44% 98.73% 303.03%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years 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 1070 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 PAST 1 PAST 5 PAST 10
30, 1998 YEAR YEARS YEARS
FIDELITY MAGELLAN 4.61% 14.74% 17.35%
FIDELITY MAGELLAN (INCL. 1.47% 14.04% 17.00%
3.00% SALES CHARGE)
S&P 500 9.05% 19.91% 17.29%
Growth Funds Average -1.44% 14.35% 14.57%
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
Magellan S&P 500
00021 SP001
1988/09/30 9700.00 10000.00
1988/10/31 9902.34 10278.00
1988/11/30 9768.79 10131.02
1988/12/31 9960.74 10308.32
1989/01/31 10768.81 11062.89
1989/02/28 10593.59 10787.42
1989/03/31 10908.99 11038.77
1989/04/30 11457.33 11611.68
1989/05/31 12062.24 12081.95
1989/06/30 11957.58 12013.09
1989/07/31 12962.25 13097.87
1989/08/31 13301.32 13354.59
1989/09/30 13531.56 13299.83
1989/10/31 13106.67 12991.28
1989/11/30 13322.25 13256.30
1989/12/31 13405.60 13574.45
1990/01/31 12541.02 12663.60
1990/02/28 12798.60 12826.96
1990/03/31 13125.62 13166.88
1990/04/30 12794.12 12837.71
1990/05/31 13932.07 14089.38
1990/06/30 13992.62 13993.57
1990/07/31 13834.25 13948.80
1990/08/31 12478.77 12687.82
1990/09/30 11686.91 12069.93
1990/10/31 11542.51 12018.03
1990/11/30 12415.89 12794.39
1990/12/31 12801.20 13151.35
1991/01/31 13696.07 13724.75
1991/02/28 14885.28 14706.07
1991/03/31 15390.87 15061.96
1991/04/30 15447.84 15098.11
1991/05/31 16328.66 15750.35
1991/06/30 15369.16 15028.98
1991/07/31 16323.76 15729.33
1991/08/31 16825.54 16102.12
1991/09/30 16761.90 15833.21
1991/10/31 16987.09 16045.38
1991/11/30 16147.53 15398.75
1991/12/31 18053.32 17160.36
1992/01/31 18061.21 16841.18
1992/02/29 18426.96 17060.12
1992/03/31 17927.02 16727.44
1992/04/30 18192.78 17219.23
1992/05/31 18367.08 17303.61
1992/06/30 18043.57 17045.78
1992/07/31 18549.94 17742.95
1992/08/31 18147.66 17379.22
1992/09/30 18355.83 17584.30
1992/10/31 18485.24 17645.84
1992/11/30 18952.22 18247.57
1992/12/31 19319.68 18472.01
1993/01/31 19828.66 18627.18
1993/02/28 20242.59 18880.51
1993/03/31 20984.59 19278.89
1993/04/30 21190.02 18812.34
1993/05/31 22025.21 19316.51
1993/06/30 22332.36 19372.53
1993/07/31 22578.72 19295.04
1993/08/31 23906.51 20026.32
1993/09/30 24165.66 19872.11
1993/10/31 24181.66 20283.47
1993/11/30 23384.99 20090.77
1993/12/31 24083.44 20333.87
1994/01/31 25035.22 21025.22
1994/02/28 24851.67 20455.44
1994/03/31 23699.33 19563.58
1994/04/30 23937.28 19814.00
1994/05/31 23661.52 20138.95
1994/06/30 22634.91 19645.54
1994/07/31 23392.48 20289.92
1994/08/31 24500.50 21121.80
1994/09/30 23863.30 20604.32
1994/10/31 24670.43 21067.92
1994/11/30 23318.14 20300.62
1994/12/31 23647.36 20601.68
1995/01/31 23406.64 21135.88
1995/02/28 24719.99 21959.55
1995/03/31 25643.93 22607.57
1995/04/30 26836.92 23273.37
1995/05/31 27587.16 24203.60
1995/06/30 29688.47 24765.85
1995/07/31 31967.54 25587.09
1995/08/31 32244.87 25651.31
1995/09/30 32835.09 26733.80
1995/10/31 31995.99 26638.36
1995/11/30 32707.09 27807.78
1995/12/31 32355.12 28343.36
1996/01/31 32821.74 29308.17
1996/02/29 32607.24 29579.85
1996/03/31 32934.63 29864.71
1996/04/30 33145.37 30304.91
1996/05/31 33295.17 31086.48
1996/06/30 33264.04 31204.92
1996/07/31 31716.47 29826.28
1996/08/31 32516.94 30455.32
1996/09/30 33819.93 32169.35
1996/10/31 34620.40 33056.58
1996/11/30 36861.72 35555.32
1996/12/31 36136.36 34850.97
1997/01/31 37722.51 37028.46
1997/02/28 37216.20 37318.76
1997/03/31 35934.73 35785.34
1997/04/30 37538.80 37921.72
1997/05/31 40216.81 40230.40
1997/06/30 41881.97 42032.72
1997/07/31 45396.28 45377.26
1997/08/31 43376.93 42835.23
1997/09/30 45929.87 45181.31
1997/10/31 44365.91 43672.26
1997/11/30 45230.68 45693.84
1997/12/31 45745.58 46478.41
1998/01/31 46240.16 46992.46
1998/02/28 49745.38 50381.56
1998/03/31 52251.86 52961.59
1998/04/30 52852.07 53494.39
1998/05/31 51807.74 52574.82
1998/06/30 54015.05 54710.41
1998/07/31 53611.03 54127.74
1998/08/31 45308.98 46301.95
1998/09/30 48048.41 49268.06
IMATRL PRASUN SHR__CHT 19980930 19981008 142354 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Magellan Fund on September 30, 1988, and the
current 3.00% sales charge was paid. As the chart shows, by September
30, 1998, the value of the investment would have grown to $48,048 - a
380.48% increase on the initial investment. For comparison, look at
how the Standard & Poor's 500 Index did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
would have grown to $49,268 - a 392.68% increase.
(checkmark)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.
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
While it may be a clich<UNDEF> to compare
the performance of a volatile market
to a roller coaster, few comparisons
would be more appropriate for the
ups and downs that equity investors
experienced during the six-month
period ending September 30, 1998.
Consider these swings: On Friday,
July 17, the Dow Jones Industrial
Average - an index of 30 blue-chip
stocks - reached a record high of
9337.97. By the following Friday,
it dropped over 400 points. On
August 31, the Dow plunged 512.61
points - erasing all previous gains
for the year. The next day, blue-chips
roared back up 288.36. Other
skyrocketing rallies and precipitous
drops include the record-setting
one-day gain of 380.53 points on
September 8, followed by a
275.75-point plummet on
September 9. Appropriately, the
Dow closed on September 30 with
a 237.90 loss, triggered by
investor disappointment over a
lower-than-hoped-for decrease in
the Federal interest rate. At the
controls of this see-sawing volatility
were several drivers, including the
continuing Asian and Russian
economic dilemmas, chaotic
emerging markets and concerns
over U.S. political leadership.
Despite these drawbacks, the U.S.
economy demonstrated exceptional
resiliency. Inflation remained benign,
unemployment was at its lowest rate
in decades and interest rates
continued to decline. For the period,
the Dow was down -10.10%, while
the Standard & Poor's 500 Index
- - a market-capitalization
weighted index of 500 widely held
U.S. stocks - returned -6.97%.
(photograph of Robert Stansky)
An interview with Robert Stansky, Portfolio Manager of Fidelity
Magellan Fund
Q. BOB, HOW HAS THE FUND PERFORMED?
A. As I'm sure most Magellan shareholders realize, it's been a very
tough past few months for investors in the U.S. stock market. The
fund's performance looks like this: During the six-month period that
ended September 30, 1998, Magellan Fund had a total return of -8.04%.
Despite being in negative territory, that return beat the Lipper
growth funds average, which was -11.80% during the same period. The
fund's benchmark index, the Standard & Poor's 500 Index, returned
- -6.97%. For the 12-month period that ended September 30, the fund
returned 4.61%, the growth funds average returned -1.44% and the S&P
500 returned 9.05%.
Q. YOU MENTIONED THE RECENT MARKET VOLATILITY. WHAT WERE THE FACTORS
BEHIND IT, AND HOW DID IT AFFECT THE FUND?
A. The volatility we've experienced in recent months had its roots in
last October's downdraft of the Asian markets. The economic and
financial crisis that began in the Far East - and later spread to
other parts of the world - created serious global concerns about
liquidity, or the ability of individuals and companies to convert
assets to cash without significant losses, and credit risk, or the
risk of borrowers defaulting on loans. The question that loomed over
the U.S. market was the extent to which these factors would negatively
affect the earnings of U.S. companies. At first, it was mostly worries
about potential earnings shortfalls that caused stock prices to fall.
Later in the period, however, we saw concrete evidence that these
concerns were justified. Several large consumer food and personal
products companies warned investors to lower their expectations
regarding future profits. As I've stated many times, stock prices tend
to follow company earnings over time. And to the extent that earnings
forecasts are revised downward, stock prices often will head that way
as well. The market drop over the past three months effectively
negated gains made by U.S. stocks - and the fund - in the first half
of 1998.
Q. IN LIGHT OF THIS, HAVE YOU MADE CHANGES TO THE FUND?
A. Mainly, I took advantage of lower stock prices by buying more of
the stocks I was most optimistic about. However, market volatility
does not change my core strategy. As always, I am focused on
accurately forecasting corporate earnings over the next year or two. I
invest in those companies whose earnings I believe will outpace the
average earnings in the broad market and whose stocks are selling at
reasonable valuations. At this point, there is still a healthy
selection of companies that fit these criteria, and they are the
opportunities I've pursued.
Q. LET'S TAKE A CLOSER LOOK AT THE FUND'S INVESTMENTS. THE TECHNOLOGY
SECTOR HAS RISEN AS A PERCENTAGE OF THE FUND'S INVESTMENTS FROM 15.3%
SIX MONTHS AGO TO 21.6% ON SEPTEMBER 30. WHY?
A. Technology names probably make up the bulk of those stocks I've
been nibbling at since prices dropped so significantly, which accounts
for part of the increase. At the end of the period, the technology
sector remained among the most attractive in terms of its strong
long-term unit growth and earnings potential. The rest of the increase
is due to market appreciation of many of the fund's existing
technology investments over the past six months. The short list of
stocks that have made the greatest contribution to the fund's returns
during this period includes Microsoft, Dell Computer, Cisco Systems,
America Online, EMC, Lucent Technologies and IBM.
Q. WHAT OTHER FACTORS INFLUENCED THE FUND'S PERFORMANCE?
A. Selected health care stocks such as Schering-Plough and
Warner-Lambert benefited from continued strong earnings outlooks,
particularly relative to stocks in other sectors of the market.
Financial stocks were a double-edged sword. While the fund generally
benefited from being underweighted in financials relative to the broad
market and some of its peers, many of these stocks fell sharply during
the period. A number of large U.S. financial institutions such as
Citicorp and Chase Manhattan had significant overseas exposure.
Weakening global economies and potential credit losses raised very
real concerns about future profit growth for these companies.
Q. ANY OTHER SIGNIFICANT DISAPPOINTMENTS?
A. The biggest was Cendant, a services company that owns brands such
as Avis car rentals, Howard Johnson hotels and Century 21 real estate.
In mid-April, the company unexpectedly disclosed accounting
irregularities. Because Cendant's earnings had been overstated as a
result, its future growth prospects immediately worsened
significantly. That led to heavy selling of the stock and a
substantial drop in its price. While this problem caught me by
surprise, accounting irregularities of this type within a company can
be very difficult to detect.
Q. ON A DIFFERENT SUBJECT, THE NUMBER OF INDIVIDUAL HOLDINGS IN THE
FUND HAS DECREASED FROM ABOUT 470 ON MARCH 31 TO ABOUT 350 ON
SEPTEMBER 30. WHAT'S BEHIND THIS?
A. This is part of a strategy I've gradually been employing as market
conditions have given me the opportunity. As I've reduced the number
of overall holdings in the fund, I've increased the concentration of
the fund's investments in the top 10 and top 50 largest holdings. This
was a more difficult process when markets were generally rising, but
the recent volatility has provided me the opportunity to buy more of
my favorite stocks at attractive prices. Historical analysis I've done
shows that the fund's largest holdings have had the strongest positive
influence on its overall performance. Thus, I believe I can
incrementally improve Magellan's long-term performance by giving
heavier weighting to my best ideas. As a result, the percentage of the
fund's investments concentrated in its top 10 largest holdings has
increased from 16.6% on March 31 to 21.8% on September 30. The
percentage of investments in the top 50 stocks has risen, too.
Finally, it's important to note that the fund remained well
diversified across more than 300 stocks in more than a dozen different
industries at the end of the period.
Q. BOB, WHAT'S YOUR PERSPECTIVE GOING FORWARD?
A. As Magellan shareholders know, I don't predict the near-term
direction of the market. There is still a great deal of uncertainty
about how the worldwide economic troubles will impact U.S. corporate
profits; we'll learn more as companies report their third- and
fourth-quarter results. Over longer periods, stock prices generally
follow earnings, and I will continue to focus on those companies that
I believe can grow earnings faster than the overall market. The market
backdrop - in terms of interest rates and inflation - at this point
still appears relatively favorable. However, we all know that can
change. If I can pinpoint companies with significant potential for
earnings growth as well as companies that may be growing more slowly
but whose stock valuations are historically low, I believe the fund
has an excellent chance to outperform the market and its peers 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.
(checkmark)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, 1998,
more than $65.8 billion
MANAGER: Robert Stansky,
since 1996; manager, Fidelity
Growth Company Fund and
Fidelity Advisor Equity Growth,
1987-1996; Fidelity Emerging
Growth Fund, 1990-1991;
Fidelity Select Defense and
Aerospace Portfolio, 1984-
1987; joined Fidelity in 1983
BOB STANSKY ON INVESTING
IN A VOLATILE MARKET:
"Volatile market conditions don't
change the fundamental way in
which I manage money. I believe
over the long run the best defense
is a good offense. If I can find
companies that are growing
earnings over a one-, two- or
three-year period, that are able to
finance their growth and are
selling at attractive valuations, I've
provided the fund with the
opportunity for capital
appreciation. That's opposed to
battening down the hatches and
investing in defensive-type stocks
that may not fall as far as others in
a down market. Stocks can make
strong gains over short periods,
and I don't want to be standing on
the sidelines when upside
potential is realized.
"The bottom line is that I don't
time or predict the market; any
number of factors can make stocks
rise or fall over the course of a day,
week, month or even a year. But
over the long haul it all gets down
to one thing: earnings. Companies
that can grow their profits
significantly and whose stocks are
fairly priced or undervalued have the
best chance at appreciation. Those
are the opportunities that will catch
my eye time and time again,
whether the current direction of
the market is up or down."
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF SEPTEMBER 30, 1998
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE STOCKS
6 MONTHS AGO
General Electric Co. 3.9 3.5
Microsoft Corp. 3.6 2.2
Intel Corp. 2.1 1.0
Cisco Systems, Inc. 2.0 1.1
Merck & Co., Inc. 1.9 1.7
Wal-Mart Stores, Inc. 1.8 1.4
Home Depot, Inc. 1.8 1.4
MCI WorldCom, Inc. 1.7 1.2
Lucent Technologies, Inc. 1.5 0.8
America Online, Inc. 1.5 0.4
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
TOP FIVE MARKET SECTORS AS OF SEPTEMBER 30,
1998
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE MARKET SECTORS
6 MONTHS AGO
TECHNOLOGY 21.6 15.3
HEALTH 11.7 11.7
FINANCE 11.2 13.1
RETAIL & WHOLESALE 9.3 8.6
INDUSTRIAL 7.0 8.1
MACHINERY &
EQUIPMENT
</TABLE>
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF SEPTEMBER 30, 1998 *
ROW: 1, COL: 1, VALUE: 93.59999999999999
ROW: 1, COL: 2, VALUE: 6.4
STOCKS 93.6%
SHORT-TERM
INVESTMENTS 6.4%
*FOREIGN
INVESTMENTS 4.8%
AS OF MARCH 31, 1998 **
ROW: 1, COL: 1, VALUE: 96.2
ROW: 1, COL: 2, VALUE: 3.8
STOCKS 96.2%
SHORT-TERM
INVESTMENTS 3.8%
**FOREIGN
INVESTMENTS 8.6%
INVESTMENTS SEPTEMBER 30, 1998
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES
COMMON STOCKS - 93.6%
SHARES VALUE (NOTE 1)
(000S)
AEROSPACE & DEFENSE -
1.3%
AEROSPACE & DEFENSE -
1.2%
AlliedSignal, Inc. 7,852,500 $ 277,782
Boeing Co. 2,908,600 99,801
Gulfstream Aerospace 938,000 37,755
Corp. (a)
Textron, Inc. 1,211,400 73,441
United Technologies Corp. 3,821,900 292,136
780,915
DEFENSE ELECTRONICS - 0.0%
Raytheon Co. Class B 651,500 35,140
SHIP BUILDING & REPAIR -
0.1%
General Dynamics Corp. 1,003,800 50,378
TOTAL AEROSPACE & 866,433
DEFENSE
BASIC INDUSTRIES - 1.7%
CHEMICALS & PLASTICS -
1.0%
Air Products & Chemicals, 500,000 14,875
Inc.
du Pont (E.I.) de Nemours 5,672,300 318,358
& Co.
Hanna (M.A.) Co. 1,358,325 15,281
Monsanto Co. 3,982,800 224,530
Praxair, Inc. 1,356,000 44,324
Schulman (A.), Inc. 174,625 2,467
Synetic, Inc. (a)(c) 1,157,582 48,040
Trivest 1992 Special Fund 26.6(d) 4,487
Ltd.
672,362
IRON & STEEL - 0.2%
Aeroquip-Vickers, Inc. 541,500 15,568
Nucor Corp. 2,692,400 109,379
124,947
METALS & MINING - 0.2%
Aluminum Co. of America 1,950,000 138,450
PACKAGING & CONTAINERS -
0.0%
Owens-Illinois, Inc. (a) 742,700 18,568
PAPER & FOREST PRODUCTS -
0.3%
Fort James Corp. 737,500 24,199
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
BASIC INDUSTRIES -
CONTINUED
PAPER & FOREST PRODUCTS -
CONTINUED
Kimberly-Clark Corp. 2,889,800 $ 117,037
Louisiana-Pacific Corp. 2,032,600 41,414
182,650
TOTAL BASIC 1,136,977
INDUSTRIES
CONSTRUCTION & REAL
ESTATE - 1.9%
BUILDING MATERIALS - 1.0%
Centex Construction 577,800 19,717
Products, Inc.
Lafarge Corp. (c) 4,418,943 126,216
Masco Corp. 6,075,800 149,617
Owens-Corning 1,779,100 57,932
Sherwin-Williams Co. 6,836,400 147,837
Southdown, Inc. (c) 2,199,792 98,991
USG Corp. 2,413,000 104,362
704,672
CONSTRUCTION - 0.3%
Centex Corp. 1,200,000 41,400
Clayton Homes, Inc. 1,262,687 22,097
Oakwood Homes Corp. (c) 3,719,200 48,815
Pulte Corp. (c) 2,878,000 70,691
183,003
REAL ESTATE INVESTMENT
TRUSTS - 0.6%
Boston Properties, Inc. 1,105,000 31,493
Crescent Real Estate 2,101,900 53,073
Equities, Inc.
Equity Office Properties 2,086,400 51,117
Trust
Equity Residential 1,271,500 53,641
Properties Trust (SBI)
Patriot American 1,988,400 25,352
Hospitality, Inc. Unit
Public Storage, Inc. 1,136,300 30,467
Starwood Hotels & Resorts 4,400,327 134,210
379,353
TOTAL CONSTRUCTION 1,267,028
& REAL ESTATE
DURABLES - 3.2%
AUTOS, TIRES, & ACCESSORIES
- - 1.5%
AutoZone, Inc. (a) 3,135,800 77,219
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
DURABLES - CONTINUED
AUTOS, TIRES, & ACCESSORIES
- - CONTINUED
Chrysler Corp. 1,819,300 $ 87,099
Circuit City Stores, Inc. - 224,300 1,318
CarMax Group (a)
Danaher Corp. 2,507,000 75,210
Ford Motor Co. 11,504,000 539,969
Lear Corp. (a) 1,316,300 57,588
Pep Boys-Manny, Moe & 1,155,000 15,448
Jack
Republic Industries, Inc. (a) 10,379,927 151,158
1,005,009
CONSUMER DURABLES -
0.3%
Minnesota Mining & 2,909,100 214,364
Manufacturing Co.
CONSUMER ELECTRONICS -
0.6%
Black & Decker Corp. (c) 4,780,000 198,968
General Motors Corp. 500,000 18,406
Class H
Matsushita Electric 614,000 8,335
Industrial Co. Ltd.
Maytag Corp. 2,600,000 124,150
Whirlpool Corp. 611,000 28,717
378,576
HOME FURNISHINGS - 0.4%
Leggett & Platt, Inc. (c) 12,416,700 257,647
TEXTILES & APPAREL - 0.4%
Liz Claiborne, Inc. 2,547,800 66,721
NIKE, Inc. Class B 3,398,500 125,107
Polo Ralph Lauren Corp. 1,799,000 35,868
Class A (a)(c)
Tommy Hilfiger (a) 1,100,000 45,100
Warnaco Group, Inc. Class 800,000 18,500
A
291,296
TOTAL DURABLES 2,146,892
ENERGY - 6.2%
ENERGY SERVICES - 0.5%
Halliburton Co. 4,899,600 139,945
Schlumberger Ltd. 3,271,300 164,587
304,532
OIL & GAS - 5.7%
Amoco Corp. 5,447,740 293,497
Anadarko Petroleum 7,434,100 292,253
Corp. (c)
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
ENERGY - CONTINUED
OIL & GAS - CONTINUED
Apache Corp. 2,659,715 $ 71,314
British Petroleum Co. PLC 13,400,000 194,968
Burlington Resources, Inc. 4,082,100 152,568
Canadian Natural 2,702,600 44,127
Resources Ltd. (a)
Chevron Corp. 3,034,200 255,062
Coastal Corp. (The) 5,384,000 181,710
Cooper Cameron Corp. (a) 1,671,500 47,011
Elf Aquitaine 1,215,600 151,117
Exxon Corp. 6,253,800 438,939
Mobil Corp. 1,045,000 79,355
Occidental Petroleum Corp. 8,571,400 184,285
Phillips Petroleum Co. 2,888,300 130,335
Poco Petroleums Ltd. (a) 3,481,700 34,222
Renaissance Energy Ltd. (a) 1,425,000 19,451
Royal Dutch Petroleum Co. 9,600,000 457,200
(NY Registry Gilder
1.25)
Texaco, Inc. 5,852,000 366,847
Total SA Class B 2,344,300 294,361
Unocal Corp. 2,510,369 91,001
USX-Marathon Group 550,000 19,491
3,799,114
TOTAL ENERGY 4,103,646
FINANCE - 11.2%
BANKS - 3.7%
BANACCI SA de CV Class 3,840,000 3,382
B (a)
Banc One Corp. 1,835,357 78,232
BankAmerica Corp. 8,086,900 486,225
Chase Manhattan Corp. 5,870,000 253,878
Citicorp 4,429,800 411,695
Comerica, Inc. 775,000 42,480
National City Corp. 306,551 20,213
NationsBank Corp. 4,051,618 216,762
Norwest Corp. 600,000 21,488
Societe Generale, France 485,000 53,720
Class A
SunTrust Banks, Inc. 100,000 6,200
Synovus Finanical Corp. 1,709,775 33,768
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - CONTINUED
BANKS - CONTINUED
U.S. Bancorp 6,111,600 $ 217,344
Wells Fargo & Co. 1,664,900 591,040
2,436,427
CREDIT & OTHER FINANCE -
1.3%
American Express Co. 1,100,000 85,388
Associates First Capital 4,758,787 310,511
Corp.
First Chicago NBD Corp. 200,000 13,700
Fleet Financial Group, Inc. 1,761,000 129,323
Greenpoint Financial Corp. 2,351,800 74,964
Household International, 2,620,395 98,265
Inc.
Providian Financial Corp. 2,201,300 186,698
898,849
FEDERAL SPONSORED CREDIT
- - 1.9%
Fannie Mae 12,048,000 774,084
Freddie Mac 9,061,600 447,983
SLM Holding Corp. 481,950 15,633
1,237,700
INSURANCE - 3.3%
Aetna, Inc. 404,900 28,141
AFLAC, Inc. 4,604,800 131,525
Allstate Corp. 11,813,000 492,454
American International 8,009,225 616,710
Group, Inc.
Chubb Corp. (The) 1,100,000 69,300
General Re Corp. 326,100 66,198
Hartford Financial Services 400,000 18,975
Group, Inc.
Old Republic International 2,087,700 46,973
Corp.
Progressive Corp. 1,624,700 183,185
Provident Companies, Inc. 238,000 8,033
Reliastar Financial Corp. 1,691,616 65,973
SunAmerica, Inc. 4,237,450 258,484
UNUM Corp. 4,333,400 215,316
2,201,267
SAVINGS & LOANS - 0.2%
Ahmanson (H.F.) & Co. 500,000 27,750
Charter One Financial, Inc. 2,590,440 64,437
Washington Mutual, Inc. 2,253,750 76,064
168,251
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - CONTINUED
SECURITIES INDUSTRY - 0.8%
Merrill Lynch & Co., Inc. 1,673,200 $ 79,268
Morgan Stanley, Dean 2,650,035 114,117
Witter, Discover & Co.
Travelers Group, Inc. (The) 8,815,389 330,577
523,962
TOTAL FINANCE 7,466,456
HEALTH - 11.7%
DRUGS & PHARMACEUTICALS
- - 8.6%
American Home Products 14,295,200 748,711
Corp.
Bristol-Myers Squibb Co. 9,080,800 943,268
Elan Corp. PLC ADR (a) 2,301,000 165,816
Lilly (Eli) & Co. 6,351,200 497,378
Merck & Co., Inc. 9,587,600 1,242,193
Pfizer, Inc. 4,326,700 458,360
Rhone-Poulenc SA Class A 2,000,932 83,499
Sankyo Co. Ltd. 1,514,000 33,459
Schering-Plough Corp. 8,328,600 862,531
Takeda Chemical Industries 2,130,000 56,891
Ltd.
Warner-Lambert Co. 8,534,100 644,325
XOMA Corp. (a) 3,030 7
5,736,438
MEDICAL EQUIPMENT &
SUPPLIES - 2.2%
Abbott Laboratories 1,470,700 63,884
Baxter International, Inc. 300,000 17,850
Becton, Dickinson & Co. 2,546,200 104,712
Boston Scientific Corp. (a) 4,731,000 243,055
Johnson & Johnson 7,900,000 618,175
McKesson Corp. 2,265,000 207,531
Medtronic, Inc. 3,009,000 174,146
St. Jude Medical, Inc. (a) 1,198,900 27,725
1,457,078
MEDICAL FACILITIES
MANAGEMENT - 0.9%
Carematrix Corp. (a)(c) 899,100 20,455
Columbia/HCA Healthcare 8,529,253 171,118
Corp.
HEALTHSOUTH Corp. (a) 16,144,800 170,529
Humana, Inc. (a) 900,000 14,738
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
HEALTH - CONTINUED
MEDICAL FACILITIES
MANAGEMENT - CONTINUED
Tenet Healthcare Corp. (a) 1,392,195 $ 40,026
United HealthCare Corp. 2,494,100 87,294
Universal Health Services, 788,100 32,903
Inc. Class B (a)
Wellpoint Health Networks, 1,000,000 56,063
Inc. (a)
593,126
TOTAL HEALTH 7,786,642
INDUSTRIAL MACHINERY
& EQUIPMENT - 7.0%
ELECTRICAL EQUIPMENT -
4.8%
Alcatel Alsthom 1,356,000 115,204
Compagnie Generale
d'Electricite SA
Emerson Electric Co. 5,482,400 341,279
General Electric Co. 32,803,100 2,609,889
Loral Space & 580,200 8,558
Communications Ltd. (a)
Philips Electronics NV 1,600,000 85,355
(Bearer)
SLI, Inc. (a) 519,000 8,012
3,168,297
INDUSTRIAL MACHINERY &
EQUIPMENT - 2.0%
Case Corp. (c) 4,440,000 96,570
Caterpillar, Inc. 1,770,100 78,880
Cooper Industries, Inc. 1,150,000 46,863
Deere & Co. 1,880,000 56,870
Illinois Tool Works, Inc. 6,400,000 348,800
Ingersoll-Rand Co. 902,850 34,252
Tyco International Ltd. 12,202,206 674,172
1,336,407
POLLUTION CONTROL - 0.2%
Republic Services, Inc. 2,000,000 39,000
Class A (a)
Waste Management, Inc. 1,652,500 79,423
118,423
TOTAL INDUSTRIAL 4,623,127
MACHINERY &
EQUIPMENT
MEDIA & LEISURE - 5.3%
BROADCASTING - 2.7%
CBS Corp. 12,464,164 302,256
Chancellor Media Corp. (a) 100,000 3,338
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
MEDIA & LEISURE -
CONTINUED
BROADCASTING - CONTINUED
Clear Channel 7,849,680 $ 372,860
Communications, Inc. (a)
Comcast Corp. Class A 875,000 41,070
(special)
Cox Communications, Inc. 844,700 46,142
Class A (a)
Heftel Broadcasting Corp. 663,800 25,058
Class A (a)
MediaOne Group, Inc. (a) 1,450,000 64,434
Metromedia Fiber 164,200 5,378
Network, Inc. Class A
Nielsen Media Research, 472,966 4,848
Inc. (a)
Tele-Communications, Inc. 1,936,201 75,754
(TCI Group) Series A (a)
Time Warner, Inc. 9,459,603 828,306
Univision Communications, 595,000 17,701
Inc. Class A (a)
USA Networks, Inc. (a) 1,196,980 23,266
1,810,411
ENTERTAINMENT - 1.2%
Alliance Gaming 17,753 36
Corp. (a)(e)
Disney (Walt) Co. 9,557,000 241,912
News Corp. Ltd. ADR 3,400,000 87,125
Viacom, Inc. Class B 8,254,400 478,755
(non-vtg.) (a)
807,828
LODGING & GAMING - 0.4%
Extended Stay America, 4,828,503 38,628
Inc. (a)(c)
Hilton Hotels Corp. 3,929,200 67,042
Host Marriott Corp. (a)(c) 13,228,400 167,835
Prime Hospitality Corp. (a) 1,577,600 11,043
Promus Hotel Corp. (a) 100,000 2,756
287,304
PUBLISHING - 0.4%
Gannet Co., Inc. 2,010,400 107,682
Harcourt General, Inc. 848,900 41,066
Houghton Mifflin Co. 17,100 530
McGraw-Hill Companies, 163,000 12,918
Inc.
Times Mirror Co. Class A 697,300 37,044
Tribune Co. 823,100 41,412
240,652
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
MEDIA & LEISURE -
CONTINUED
RESTAURANTS - 0.6%
Host Marriott Services 2,832,100 $ 25,843
Corp. (a)(c)
McDonald's Corp. 6,282,200 374,969
400,812
TOTAL MEDIA & LEISURE 3,547,007
NONDURABLES - 4.2%
BEVERAGES - 0.9%
Coca-Cola Co. (The) 5,466,800 315,024
Coca-Cola Enterprises, Inc. 525,000 13,256
PepsiCo, Inc. 9,656,800 284,272
Stroh Brewery Co. 21,307 76
warrants 7/1/01 (a)
612,628
FOODS - 0.1%
Bestfoods 800,000 38,750
Heinz (H.J.) Co. 585,800 29,949
Sara Lee Corp. 500,000 27,000
95,699
HOUSEHOLD PRODUCTS -
1.7%
Avon Products, Inc. 2,346,000 65,835
Clorox Co. 70,200 5,792
Estee Lauder Companies, 863,000 44,229
Inc.
Gillette Co. 9,775,800 373,924
Procter & Gamble Co. 6,247,300 443,168
Revlon, Inc. Class A (a) 200,000 6,363
Unilever NV (NY shares) 3,029,700 185,569
1,124,880
TOBACCO - 1.5%
Philip Morris Companies, 21,410,200 986,207
Inc.
TOTAL NONDURABLES 2,819,414
RETAIL & WHOLESALE -
9.3%
APPAREL STORES - 1.3%
Gap, Inc. 11,355,800 599,018
Intimate Brands, Inc. Class 1,090,300 20,648
A
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
RETAIL & WHOLESALE -
CONTINUED
APPAREL STORES -
CONTINUED
Lamonts Apparel, Inc. (a):
Class A 433,431 $ 271
Class A warrants 269,324 67
1/31/08
Class B warrants 85,594 21
1/31/08
Limited, Inc. (The) 5,100,400 111,890
TJX Companies, Inc. 5,496,800 97,912
829,827
DRUG STORES - 0.7%
CVS Corp. 9,776,286 428,324
Rite Aid Corp. 1,008,200 35,791
464,115
GENERAL MERCHANDISE
STORES - 3.0%
Consolidated Stores 2,519,068 49,437
Corp. (a)
Costco Companies, Inc. (a) 855,500 40,529
Dayton Hudson Corp. 12,509,400 447,211
Federated Department 4,215,700 153,346
Stores, Inc. (a)
Ito-Yokado Co. Ltd. 88,000 4,186
J.C. Penney Co., Inc. 1,907,100 85,700
Neiman-Marcus Group, 668,700 14,461
Inc. (a)
Wal-Mart Stores, Inc. 22,172,500 1,211,173
2,006,043
GROCERY STORES - 0.8%
Meyer (Fred), Inc. (a) 1,405,000 54,619
Safeway, Inc. (a) 10,954,400 508,010
562,629
RETAIL & WHOLESALE,
MISCELLANEOUS - 3.5%
AgriBioTech, Inc. (a) 1,137,500 12,655
Circuit City Stores, Inc. - 1,202,500 40,058
Circuit City Group
Home Depot, Inc. 30,402,450 1,200,897
Lowe's Companies, Inc. 13,047,000 415,058
N2K, Inc. 394,700 2,837
Office Depot, Inc. (a) 8,644,400 193,959
Pier 1 Imports, Inc. 600,000 4,500
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
RETAIL & WHOLESALE -
CONTINUED
RETAIL & WHOLESALE,
MISCELLANEOUS - CONTINUED
Staples, Inc. (a) 12,582,900 $ 369,623
Tandy Corp. 1,722,600 92,159
2,331,746
TOTAL RETAIL & 6,194,360
WHOLESALE
SERVICES - 1.5%
ADVERTISING - 0.7%
Interpublic Group of 200,000 10,788
Companies, Inc.
Omnicom Group, Inc. 8,151,576 366,821
Outdoor Systems, Inc. (a) 5,975,437 116,521
494,130
LEASING & RENTAL - 0.0%
Hertz Corp. Class A 203,000 8,399
PRINTING - 0.0%
Wallace Computer 575,300 10,319
Services, Inc.
SERVICES - 0.8%
AccuStaff, Inc. (a) 532,000 7,747
Assisted Living Concepts, 1,103,000 15,649
Inc. (a)(c)
Cendant Corp. (a) 14,487,000 168,411
Manpower, Inc. 2,955,900 60,411
Rentokil Initial PLC 10,566,935 65,207
Robert Half International, 3,338,950 144,201
Inc. (a)
Service Corp. International 1,200,000 38,250
499,876
TOTAL SERVICES 1,012,724
TECHNOLOGY - 21.6%
COMMUNICATIONS
EQUIPMENT - 4.6%
3Com Corp. (a) 2,866,700 86,180
Ascend Communications, 4,079,600 185,622
Inc. (a)
Cisco Systems, Inc. (a) 21,980,200 1,358,651
Lucent Technologies, Inc. 14,817,724 1,023,349
Newbridge Networks 2,116,200 37,959
Corp. (a)
Northern Telecom Ltd. 105,900 3,396
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
COMMUNICATIONS
EQUIPMENT - CONTINUED
OY Nokia AB:
Series A 1,200,000 $ 94,088
sponsored ADR 3,577,000 280,571
3,069,816
COMPUTER SERVICES &
SOFTWARE - 8.0%
America Online, Inc. 9,065,100 1,008,492
BMC Software, Inc. 4,817,700 289,363
Ceridian Corp. (a) 1,250,700 71,759
CompUSA, Inc. (a) 2,085,700 36,109
Computer Associates 5,052,900 186,957
International, Inc.
Compuware Corp. (a) 1,100,000 64,763
DST Systems, Inc. (a) 200,400 10,571
Electronic Arts, Inc. (a) 1,711,100 75,075
Equifax, Inc. 870,170 31,054
First Data Corp. 4,424,000 103,964
HBO & Co. 6,000,000 173,250
IMS Health, Inc. 1,418,900 87,883
Keane, Inc. (a) 600,000 21,075
Lycos, Inc. (a) 100,000 3,381
Microsoft Corp. (a) 22,097,700 2,432,128
Netscape Communications 1,370,000 29,969
Corp. (a)
Oracle Corp. (a) 17,315,600 504,317
Parametric Technology 3,405,000 34,263
Corp. (a)
PeopleSoft, Inc. (a) 3,559,200 116,119
SAP AG sponsored ADR 417,000 16,237
Sportsline USA, Inc. 400,000 6,975
Yahoo, Inc. (a) 400,000 51,800
5,355,504
COMPUTERS & OFFICE
EQUIPMENT - 5.5%
Comdisco, Inc. (c) 9,900,000 134,888
Compaq Computer Corp. 17,765,500 561,834
Dell Computer Corp. (a) 9,688,400 637,012
EMC Corp. (a) 9,660,482 552,459
Fore Systems, Inc. (a) 1,400,000 23,275
Hewlett-Packard Co. 770,600 40,794
International Business 6,928,400 886,835
Machines Corp.
Pitney Bowes, Inc. 4,875,600 266,025
Seagate Technology, 2,455,300 61,536
Inc. (a)
Sun Microsystems, Inc. (a) 3,950,000 196,759
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
COMPUTERS & OFFICE
EQUIPMENT - CONTINUED
Tech Data Corp. (a) 788,800 $ 39,489
Xerox Corp. 3,200,000 271,200
3,672,106
ELECTRONIC INSTRUMENTS -
0.1%
Thermo Electron Corp. (a) 2,733,200 41,169
Thermo Instruments 200,000 2,200
Systems, Inc. (a)
Waters Corp. (a) 765,800 51,309
94,678
ELECTRONICS - 3.2%
Altera Corp. (a) 200,000 7,025
Analog Devices, Inc. (a) 1,453,866 23,353
Intel Corp. 16,408,800 1,407,055
Lattice Semiconductor 77,100 1,908
Corp. (a)
Linear Technology Corp. 1,588,300 79,415
LSI Logic Corp. (a) 900,000 11,363
Maxim Integrated Products, 1,889,200 52,661
Inc. (a)
Micron Technology, Inc. (a) 1,200,000 36,525
Motorola, Inc. 1,309,400 55,895
Rambus, Inc. (a) 800,000 51,200
Rohm Co. Ltd. 483,000 45,948
Solectron Corp. (a) 1,430,100 68,645
Texas Instruments, Inc. 5,397,000 284,692
Xilinx, Inc. (a) 100,000 3,500
2,129,185
PHOTOGRAPHIC EQUIPMENT -
0.2%
Fuji Photo Film Co. Ltd. 3,032,000 104,280
TOTAL TECHNOLOGY 14,425,569
TRANSPORTATION - 1.3%
AIR TRANSPORTATION - 0.2%
AMR Corp. (a) 1,978,100 109,661
Delta Air Lines, Inc. 563,300 54,781
164,442
RAILROADS - 0.9%
Bombardier, Inc. Class B 8,700 95
Burlington Northern Santa 1,741,920 55,741
Fe Corp.
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TRANSPORTATION -
CONTINUED
RAILROADS - CONTINUED
CSX Corp. 6,895,600 $ 290,046
Norfolk Southern Corp. 8,409,100 244,389
590,271
TRUCKING & FREIGHT - 0.2%
CNF Transportation, Inc. 642,000 18,698
Landstar System, Inc. (a)(c) 901,200 25,403
Swift Transportation Co., 3,333,250 57,915
Inc. (a)(c)
102,016
TOTAL 856,729
TRANSPORTATION
UTILITIES - 6.2%
CELLULAR - 0.4%
AirTouch Communications, 1,990,000 113,430
Inc. (a)
Nextel Communications, 1,700,000 34,319
Inc. Class A (a)
Teleglobe, Inc. 400,000 10,410
Vodafone Group PLC 782,900 88,272
sponsored ADR
246,431
ELECTRIC UTILITY - 0.4%
Duke Energy Corp. 1,382,000 91,471
PG&E Corp. 5,413,048 172,879
264,350
GAS - 0.2%
Enron Corp. 2,581,300 136,325
TELEPHONE SERVICES - 5.2%
ALLTEL Corp. 213,000 10,091
Ameritech Corp. 3,018,400 142,997
AT&T Corp. 12,367,280 722,713
Bell Atlantic Corp. 979,100 47,425
BellSouth Corp. 5,228,700 393,460
GTE Corp. 6,770,800 372,394
MCI WorldCom, Inc. (a) 23,027,341 1,125,461
Qwest Communications 1,100,000 34,444
International, Inc. (a)
SBC Communications, Inc. 7,332,800 325,851
Sprint Corp. 1,444,700 104,018
Telebras sponsored ADR 1,338,300 92,343
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
UTILITIES - CONTINUED
TELEPHONE SERVICES -
CONTINUED
Telecom Italia Mobile Spa 13,960,000 $ 81,455
Telefonica de Espana SA 813,000 29,696
3,482,348
TOTAL UTILITIES 4,129,454
TOTAL COMMON 62,382,458
STOCKS
(Cost $43,727,761)
PREFERRED STOCKS - 0.0%
CONVERTIBLE PREFERRED
STOCKS - 0.0%
BASIC INDUSTRIES - 0.0%
CHEMICALS & PLASTICS -
0.0%
Sealed Air Corp. Series A, 416,242 15,037
$2.00
INDUSTRIAL MACHINERY
& EQUIPMENT - 0.0%
ELECTRICAL EQUIPMENT -
0.0%
Ampex Corp. 8% 631 984
non-cumulative (a)
TOTAL CONVERTIBLE 16,021
PREFERRED STOCKS
NONCONVERTIBLE
PREFERRED STOCKS -
0.0%
INDUSTRIAL MACHINERY
& EQUIPMENT - 0.0%
ELECTRICAL EQUIPMENT -
0.0%
Ampex Corp. 8% 1,379 2,151
non-cumulative (a)
TOTAL PREFERRED 18,172
STOCKS
(Cost $21,748)
COMMERCIAL MORTGAGE SECURITIES - 0.0%
MOODY PRINCIPAL
'S AMOUNT (000S)
RATING
S
(UNAUD
ITED)
Bardell Associates Note - $ 4,278 4,545
Trust
12.5%, 11/1/08 (e)
(Cost $4,349)
CASH EQUIVALENTS - 6.4%
MATURITY VALUE (NOTE 1)
AMOUNT (000S) (000S)
Investments in repurchase $ 1,864,146 $ 1,863,864
agreements (U.S.
Treasury obligations), in
a joint trading account at
5.44%,
dated 9/30/98 due
10/1/98
SHARES
Taxable Central Cash 2,424,151,337 2,424,151
Fund (b)
TOTAL CASH 4,288,015
EQUIVALENTS
(Cost $4,288,015)
TOTAL INVESTMENT $ 66,693,190
IN SECURITIES -
100%
(Cost $48,041,873)
LEGEND
(a) Non-income producing
(b) At period end, the seven-day yield on the Taxable Central Cash
Fund was 5.36%. The yield refers to the income earned by investing in
the fund over the seven-day period, expressed as an annual percentage.
(c) Affiliated company (see Note 6 of Notes to Financial Statements).
(d) Share amount represents number of units held.
(e) 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:
SECURITY ACQUISTION ACQUISITION
DATE COST (000S)
Alliance Gaming 7/28/98 $ -
Corp.
Bardell Associates 4/19/94 $ 4,349
Note Trust 12.5%,
11/1/08
INCOME TAX INFORMATION
At September 30, 1998, the aggregate cost of investment securities for
income tax purposes was $48,087,491,000. Net unrealized appreciation
aggregated $18,605,699,000, of which $21,131,111,000 related to
appreciated investment securities and $2,525,412,000 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, 1998
ASSETS
INVESTMENT IN SECURITIES, AT VALUE (INCLUDING REPURCHASE $ 66,693,190
AGREEMENTS OF $1,863,864) (COST $48,041,873) -
SEE ACCOMPANYING SCHEDULE
CASH 1,732
RECEIVABLE FOR INVESTMENTS SOLD 315,480
RECEIVABLE FOR FUND SHARES SOLD 59,373
DIVIDENDS RECEIVABLE 72,186
INTEREST RECEIVABLE 9,689
OTHER RECEIVABLES 5,310
TOTAL ASSETS 67,156,960
LIABILITIES
PAYABLE FOR INVESTMENTS PURCHASED $ 1,177,181
PAYABLE FOR FUND SHARES REDEEMED 112,794
ACCRUED MANAGEMENT FEE 22,661
OTHER PAYABLES AND ACCRUED EXPENSES 11,273
TOTAL LIABILITIES 1,323,909
NET ASSETS $ 65,833,051
NET ASSETS CONSIST OF:
PAID IN CAPITAL $ 45,314,135
UNDISTRIBUTED NET INVESTMENT INCOME 246,239
ACCUMULATED UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON 1,620,172
INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS 18,652,505
AND ASSETS AND LIABILITIES IN FOREIGN CURRENCIES
NET ASSETS, FOR 675,075 SHARES OUTSTANDING $ 65,833,051
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE $97.52
($65,833,051 (DIVIDED BY) 675,075 SHARES)
MAXIMUM OFFERING PRICE PER SHARE (100/97.00 OF $97.52) $100.54
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS SIX MONTHS ENDED SEPTEMBER 30, 1998
INVESTMENT INCOME $ 385,684
DIVIDENDS (INCLUDING $10,453 RECEIVED FROM
AFFILIATED ISSUERS)
INTEREST 76,169
TOTAL INCOME 461,853
EXPENSES
MANAGEMENT FEE $ 211,873
BASIC FEE
PERFORMANCE ADJUSTMENT (58,099)
TRANSFER AGENT FEES 62,525
ACCOUNTING FEES AND EXPENSES 481
NON-INTERESTED TRUSTEES' COMPENSATION 214
CUSTODIAN FEES AND EXPENSES 1,401
REGISTRATION FEES 610
AUDIT 263
LEGAL 123
MISCELLANEOUS 22
TOTAL EXPENSES BEFORE REDUCTIONS 219,413
EXPENSE REDUCTIONS (5,767) 213,646
NET INVESTMENT INCOME 248,207
REALIZED AND UNREALIZED GAIN (LOSS)
NET REALIZED GAIN (LOSS) ON:
INVESTMENT SECURITIES (INCLUDING REALIZED GAIN OF 1,716,288
$105,644 ON SALES OF INVESTMENTS IN AFFILIATED ISSUERS)
FOREIGN CURRENCY TRANSACTIONS (1,085) 1,715,203
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON:
INVESTMENT SECURITIES (7,763,165)
ASSETS AND LIABILITIES IN FOREIGN CURRENCIES 1,458 (7,761,707)
NET GAIN (LOSS) (6,046,504)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ (5,798,297)
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,
1998 1998
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS $ 248,207 $ 474,821
NET INVESTMENT INCOME
NET REALIZED GAIN (LOSS) 1,715,203 4,386,409
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) (7,761,707) 17,839,293
NET INCREASE (DECREASE) IN NET ASSETS RESULTING (5,798,297) 22,700,523
FROM OPERATIONS
DISTRIBUTIONS TO SHAREHOLDERS (132,542) (794,010)
FROM NET INVESTMENT INCOME
FROM NET REALIZED GAIN (1,736,276) (3,324,791)
TOTAL DISTRIBUTIONS (1,868,818) (4,118,801)
SHARE TRANSACTIONS 6,444,543 11,459,995
NET PROCEEDS FROM SALES OF SHARES
REINVESTMENT OF DISTRIBUTIONS 1,838,256 4,050,132
COST OF SHARES REDEEMED (6,750,918) (13,367,016)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 1,531,881 2,143,111
FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS (6,135,234) 20,724,833
NET ASSETS
BEGINNING OF PERIOD 71,968,285 51,243,452
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT $ 65,833,051 $ 71,968,285
INCOME OF $246,239 AND $152,096, RESPECTIVELY)
OTHER INFORMATION
SHARES
SOLD 60,562 119,540
ISSUED IN REINVESTMENT OF DISTRIBUTIONS 17,018 44,167
REDEEMED (63,887) (141,304)
NET INCREASE (DECREASE) 13,693 22,403
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS ENDED YEARS ENDED MARCH 31,
SEPTEMBER 30,
1998 1998 1997 1996 1995 1994
SELECTED PER-SHARE DATA
NET ASSET VALUE, BEGINNING $ 108.82 $ 80.20 $ 87.52 $ 72.44 $ 69.72 $ 68.44
OF PERIOD
INCOME FROM INVESTMENT
OPERATIONS
NET INVESTMENT INCOME .37 D .73 D 1.38 D .79 .27 .61
NET REALIZED AND (8.85) 34.35 5.25 19.57 5.22 7.92
UNREALIZED GAIN (LOSS)
TOTAL FROM INVESTMENT (8.48) 35.08 6.63 20.36 5.49 8.53
OPERATIONS
LESS DISTRIBUTIONS
FROM NET INVESTMENT (.20) (1.25) (1.10) (.59) (.14) (.75)
INCOME
FROM NET REALIZED GAIN (2.62) (5.21) (12.85) (4.69) (2.63) (6.50)
TOTAL DISTRIBUTIONS (2.82) (6.46) (13.95) (5.28) (2.77) (7.25)
NET ASSET VALUE, END $ 97.52 $ 108.82 $ 80.20 $ 87.52 $ 72.44 $ 69.72
OF PERIOD
TOTAL RETURN B, C (8.04)% 45.41% 9.11% 28.43% 8.21% 12.94%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $ 65,833 $ 71,968 $ 51,243 $ 56,179 $ 39,803 $ 33,119
(IN MILLIONS)
RATIO OF EXPENSES TO .60% A .62% .66% .95% .99% 1.00%
AVERAGE NET ASSETS
RATIO OF EXPENSES TO .59% A, E .61% E .64% E .92% E .96% E .99% E
AVERAGE NET ASSETS AFTER
EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT .68% A .77% 1.75% .95% .39% 1.07%
INCOME TO AVERAGE
NET ASSETS
PORTFOLIO TURNOVER RATE 37% A 34% 67% 155% 120% 132%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E 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 5 OF NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended September 30, 1998
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 at 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 require
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. Foreign securities are valued based
on quotations from the principal market in which such securities are
normally traded. If trading or events occurring in other markets after
the close of the principal market in which foreign securities are
traded, and before the close of business of the fund, are expected to
materially affect the value of those securities, then they are valued
at their fair value taking this trading or these events into account.
Fair value is determined in good faith under consistently applied
procedures under the general supervision of the Board of Trustees.
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. 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. 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 foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
date and settlement on purchases and sales of securities. 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
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
INCOME TAXES - CONTINUED
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. 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.
DEFERRED TRUSTEE COMPENSATION. Under a Deferred Compensation Plan (the
Plan) non-interested Trustees must defer receipt of a portion of, and
may elect to defer receipt of an additional portion of, their annual
compensation. Deferred amounts are treated as though equivalent dollar
amounts had been invested in shares of the fund or are invested in a
cross-section of other Fidelity funds. Deferred amounts remain in the
fund until distributed in accordance with the Plan.
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,
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
2. OPERATING POLICIES - CONTINUED
FOREIGN CURRENCY CONTRACTS - CONTINUED
contractual currency exchange rates established at the time of each
trade.
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 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 Fidelity Investments Money Management, Inc., 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 earned by the fund are recorded
as interest income in the accompanying financial statements.
WHEN-ISSUED SECURITIES. The fund may purchase or sell securities on a
when-issued basis. Payment and delivery may take place a month or more
after the date of the transaction. The price of the underlying
securities is fixed at the time the transaction is negotiated. The
fund may receive compensation for interest forgone in the purchase of
a when-issued security. With respect to purchase commitments, the fund
identifies securities as segregated in its custodial records with a
value at least equal to the amount of the commitment. Losses may arise
due to changes in the market value of the underlying securities, if
the counterparty does not perform under the contract, or if the issuer
does not issue the securities due to political, economic, or other
factors.
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
2. OPERATING POLICIES - CONTINUED
RESTRICTED SECURITIES - CONTINUED
sale at an acceptable price may be difficult. At the end of the
period, restricted securities (excluding 144A issues) amounted to
$4,581,000 or 0% of net assets.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $12,627,139,000 and $13,809,041,000, 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.
SALES LOAD. For the period, Fidelity Distributors Corporation (FDC),
an affiliate of FMR and the general distributor of the fund, received
sales charges of $4,054,000 on sales of shares of the fund of which
$4,044,000 was retained.
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 .17% 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 $2,003,000 for the
period.
5. 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 $3,315,000 under this arrangement.
5. EXPENSE REDUCTION - CONTINUED
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 $2,448,000, respectively, under these
arrangements.
6. 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
Aeroquip-Vickers, Inc. $- $ 1,280 $ 317 $ -
Anadarko Petroleum Corp. - 28,373 827 292,253
Assisted Living Concepts, Inc. - - - 15,649
Black & Decker Corp. 8,727 26,391 1,281 198,968
Canadian Natural Resources Ltd. - 30,868 - -
Carematrix Corp. - - - 20,455
Case Corp. - 58,511 542 96,570
Comdisco, Inc. - 4,030 524 134,888
Extended Stay America, Inc. - - - 38,628
Halter Marine Group, Inc. - 1,222 - -
Hanna (M.A.) Co. - 6,522 634 -
Host Marriott Services Corp. - 1,773 - 25,843
Host Marriott Corp. - 15,592 - 167,835
IDEX Corp. - 2,015 440 -
Lafarge Corp. 1,234 14,000 1,172 126,216
Landstar System, Inc. - - - 25,403
Leggett & Platt, Inc. - 4,659 2,003 257,647
Oakwood Homes Corp. - - 74 48,815
Omnicom Group, Inc. - 269 1,063 -
Polo Ralph Lauren Corp. Class A 1,429 - - 35,868
Prime Hospitality Corp. - 4,950 - -
Pulte Corp. - 19,285 279 70,691
Renaissance Energy Ltd. - - - -
Smith (A.O.) Corp. Class B - 10,173 303 -
Southdown, Inc. 9,348 21,131 447 98,991
Swift Transportation Co., Inc. - 2,763 - 57,915
Synetic, Inc. - - - 48,040
Trinity Industries, Inc. - 29,852 547 -
UCAR International, Inc. - 18,986 - -
USG Corp. - - - -
TOTALS $20,738 $302,645 $10,453 $1,760,675
7. LITIGATION
In August 1998, the NGC Asbestos Disease and Property Damage
Settlement Trust commenced an action against FMR and other unrelated
parties. The complaint alleges that during the reorganization of
National Gypsum Company, the defendants (including FMR acting on
behalf of the fund and another) failed to disclose information
material to the valuation of the reorganized entity. FMR denies the
allegations and intends to defend the lawsuit vigorously.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and the Shareholders of Fidelity Magellan Fund:
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of
Fidelity Magellan Fund at September 30, 1998, and the results of its
operations, the changes in its net assets and the financial highlights
for the periods indicated, in conformity with generally accepted
accounting principles. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Fidelity Magellan Fund's management; our
responsibility is to express an opinion on these financial statements
based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits, which included confirmation
of securities at September 30, 1998 by correspondence with the
custodian
and brokers, provide a reasonable basis for the opinion expressed
above.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
October 28, 1998
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 Xpress(registered trademark) provides 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.
(PHONE_GRAPHIC)TOUCHTONE XPRESS
1-800-544-5555
PRESS
1 For mutual fund and brokerage trading.
2 For quotes.*
3 For account balances and holdings.
4 To review orders and mutual fund activity.
5 To change your PIN.
*0 To speak to a Fidelity representative.
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.
(PC_GRAPHIC)FIDELITY'S WEB SITE
WWW.FIDELITY.COM
If you are not currently on the Internet, call Fidelity at
1-800-544-7272 and we'll send you an America Online CD or disk with up
to 50 free hours of Web access.
(PC_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.
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
2300 Litton Lane - KH1A
Hebron, KY 41048
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 500
Merrimack, NH 03054-0500
(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
Abigail Johnson, Vice President
Robert Stansky, Vice President
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
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
Blue Chip Growth Fund
Capital Appreciation Fund
Contrafund
Contrafund II
Disciplined Equity Fund
Dividend Growth Fund
Emerging Growth Fund
Export and Multinational Fund
Fidelity Fifty SM
Growth Company Fund
Large Cap Stock Fund
Low-Priced Stock Fund
Magellan(registered trademark) Fund
Mid-Cap Stock Fund
New Millennium(registered trademark) Fund
OTC Portfolio
Retirement Growth Fund
Small Cap Selector
Small Cap Stock Fund
Stock Selector
TechnoQuant SM Growth Fund
Trend Fund
Value Fund
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
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)
TouchTone Xpress
(registered trademark)
(automated graphic) 1-800-544-5555
* INDEPENDENT TRUSTEES
(automated graphic) AUTOMATED LINE FOR QUICKEST SERVICE
MAG-SANN-1198 64331
1.537468.101
(FIDELITY LOGO GRAPHIC)(REGISTERED TRADEMARK)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com
