SUPPLEMENT TO
THE FIDELITY
MAGELLAN(registered trademark) FUND
MAY 22, 1999 PROSPECTUS
The following information replaces similar information found under the
heading "Buying Shares" in the "Shareholder Information" section on
page 10.
Effective the close of business on September 30, 1997, the fund's
shares are no longer available to new accounts. Shareholders of the
fund on that date may continue to buy shares in accounts existing on
that date. Investors who did not own shares of the fund on September
30, 1997, generally will not be allowed to buy shares of the fund
except that new accounts may be established: 1) by participants in
most group employer retirement plans (and their successor plans) if
the fund had been established as an investment option under the plans
(or under another plan sponsored by the same employer) by September
30, 1997, and 2) for accounts managed on a discretionary basis by
certain registered investment advisers that have discretionary assets
of at least $500 million invested in mutual funds and have included
the fund in their discretionary account program since September 30,
1997. These restrictions generally will apply to investments made
directly with Fidelity and investments made through intermediaries.
Investors may be required to demonstrate eligibility to buy shares of
the fund before an investment is accepted.
The following information replaces similar information found in the
"Fund Management" section on page 21.
(small solid bullet) Fidelity Management & Research Far East Inc. (FMR
Far East) serves as a sub-adviser for the fund. FMR Far East was
organized in 1986 to provide investment research and advice to FMR.
Currently, FMR Far East provides investment research and advice on
issuers based outside the United States and may also provide
investment advisory services for the fund.
The following information supplements the information found in the
"Fund Management" section on page 21.
(small solid bullet) Fidelity Investments Japan Ltd. (FIJ), in Tokyo,
Japan, serves as a sub-adviser for the fund. As of September 28, 1999,
FIJ had approximately $16.3 billion in discretionary assets under
management. Currently, FIJ provides investment research and advice on
issuers based outside the United States for the fund.
The following information replaces similar information found in the
"Fund Management" section on page 22.
FMR pays FMR U.K. and FMR Far East for providing sub-advisory
services. FMR Far East pays FIJ for providing sub-advisory services.
The following information supplements information found in the
"Fund Distribution" section beginning on page 22.
The fund has adopted a Distribution and Service Plan pursuant to
Rule 12b-1 under the Investment Company Act of 1940 that recognizes
that FMR may use its management fee revenues, as well as its past
profits or its resources from any other source, to pay FDC for
expenses incurred in connection with providing services intended to
result in the sale of fund shares and/or shareholder support services.
FMR, directly or through FDC, may pay intermediaries, such as banks,
broker-dealers and other service-providers, that provide those
services. Currently, the Board of Trustees has authorized such
payments.
The following information replaces similar information in the "Fund
Distribution" section on page 24.
To receive sales concessions and waivers and payments made pursuant
to a Distribution and Service Plan, qualified recipients must sign the
appropriate agreement with FDC in advance.
SUPPLEMENT TO THE
FIDELITY MAGELLAN(registered trademark) FUND
MAY 22, 1999
STATEMENT OF ADDITIONAL INFORMATION
THE FOLLOWING FUNDAMENTAL LIMITATION REPLACES FUNDAMENTAL
INVESTMENT LIMITATIONS (1) AND (2) IN THE "INVESTMENT POLICIES AND
LIMITATIONS" SECTION ON PAGE 2.
(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. Government or any of its agencies or instrumentalities, or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;
THE FOLLOWING NON-FUNDAMENTAL LIMITATIONS REPLACE NON-FUNDAMENTAL
INVESTMENT LIMITATIONS (III) AND (V) IN THE "INVESTMENT POLICIES AND
LIMITATIONS" SECTION BEGINNING ON PAGE 2.
(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)).
(v) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 15% of
the fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION FOUND IN THE
"TRUSTEES AND OFFICERS" SECTION BEGINNING ON PAGE 17.
J. MICHAEL COOK (57), Member of the Advisory Board (2000). Prior to
Mr. Cook's retirement in May 1999, he served as Chairman and Chief
Executive Officer of Deloitte & Touche LLP, Chairman of the Deloitte &
Touche Foundation, and a member of the Board of Deloitte Touche
Tohmatsu. He currently serves as an Executive in Residence of the
Columbia Business School and as a Director of Dow Chemical Company
(2000), Columbia/HCA Healthcare Corporation (1999), and Children First
(1999). He is a member of the Executive Committee of the Securities
Regulation Institute, a member of the Advisory Board of Boardroom
Consultants, a Director of the National Forum for Health Care Quality,
Measurement and Reporting, past chairman and a member of the Board of
Catalyst (a leading organization for the advancement of women in
business), and is a Director of the STAR Foundation (Society to
Advance the Retarded and Handicapped). He also serves as a member of
the Board and Executive Committee and as Co-Chairman of the Audit and
Finance Committee of the Center for Strategic & International Studies,
a member of the Board of Overseers of the Columbia Business School,
and a Member of the Advisory Board of the Graduate School of Business
of the University of Florida.
NED C. LAUTENBACH (55), Trustee (2000), has been a partner of Clayton,
Dubilier & Rice, Inc. (private equity investment firm) since September
1998. Mr. Lautenbach was Senior Vice President of IBM Corporation from
1992 until his retirement in July 1998. From 1993 to 1995 he was
Chairman of IBM World Trade Corporation. He also was a member of IBM's
Corporate Executive Committee from 1994 to July 1998. He is a Director
of PPG Industries Inc. (glass, coating and chemical manufacturer),
Dynatech Corporation (global communications equipment), Eaton
Corporation (global manufacturer of highly engineered products) and
ChoicePoint Inc. (data identification, retrieval, storage, and
analysis).
ROBERT A. DWIGHT (41),Treasurer (2000), is Treasurer of the
Fidelity funds and is an employee of FMR. Prior to becoming Treasurer
of the Fidelity funds, he served as President of Fidelity Accounting
and Custody Services (FACS). Before joining Fidelity, Mr. Dwight was
Senior Vice President of fund accounting operations for The Boston
Company.
MARIA F. DWYER (41), Deputy Treasurer (2000), is Deputy Treasurer of
the Fidelity funds and is a Vice President (1999) and an employee
(1996) of FMR. Prior to joining Fidelity, Ms. Dwyer served as Director
of Compliance for MFS Investment Management.
THE FOLLOWING INFORMATION HAS BEEN REMOVED FROM THE "TRUSTEES AND
OFFICERS" SECTION BEGINNING ON PAGE 17 .
J. GARY BURKHEAD (57), Member of the Advisory Board (1997), is Vice
Chairman and a Member of the Board of Directors of FMR Corp. (1997)
and President of Fidelity Personal Investments and Brokerage Group
(1997). Previously, Mr. Burkhead served as President of Fidelity
Management & Research Company.
E. BRADLEY JONES (71), Trustee. Prior to his retirement in 1984, Mr.
Jones was Chairman and Chief Executive Officer of LTV Steel Company.
He is a Director of TRW Inc. (original equipment and replacement
products), Consolidated Rail Corporation, Birmingham Steel
Corporation, and RPM, Inc. (manufacturer of chemical products), and he
previously served as a Director of NACCO Industries, Inc. (mining and
manufacturing, 1985-1995), Hyster-Yale Materials Handling, Inc.
(1985-1995), and Cleveland-Cliffs Inc (mining), and as a Trustee of
First Union Real Estate Investments. In addition, he serves as a
Trustee of the Cleveland Clinic Foundation, where he has also been a
member of the Executive Committee as well as Chairman of the Board and
President, a Trustee and member of the Executive Committee of
University School (Cleveland), and a Trustee of Cleveland Clinic
Florida.
RICHARD A. SILVER (52), Treasurer (1997), is Treasurer of the
Fidelity funds and is an employee of FMR (1997). Before joining FMR,
Mr. Silver served as Executive Vice President, Fund Accounting &
Administration at First Data Investor Services Group, Inc.
(1996-1997). Prior to 1996, Mr. Silver was Senior Vice President and
Chief Financial Officer at The Colonial Group, Inc. Mr. Silver also
served as Chairman of the Accounting/Treasurer's Committee of the
Investment Company Institute (1987-1993).
LEONARD M. RUSH (53), Assistant Treasurer (1994), is an employee of
FMR (1994). Prior to becoming Assistant Treasurer of the Fidelity
funds, Mr. Rush was Chief Compliance Officer of FMR Corp. (1993-1994)
and Chief Financial Officer of Fidelity Brokerage Services, Inc.
(1990-1993).
THE FOLLOWING INFORMATION REPLACES THE COMPENSATION TABLE FOUND IN THE
"TRUSTEES AND OFFICERS" SECTION BEGINNING ON PAGE 1 7 .
The following table sets forth information describing the compensation
of each Trustee and Member of the Advisory Board of the fund for his
or her services for the fiscal year ended March 31, 1999, or calendar
year ended December 31, 1998, as applicable.
COMPENSATION TABLE
<TABLE>
<CAPTION>
<S> <C> <C>
Trustees and Members of the Aggregate Compensation from Total Compensation from the
Advisory Board MagellanB,C,D Fund Complex*,A
Edward C. Johnson 3d** $ 0 $ 0
J. Michael Cook***** $ 0 $ 0
Ralph F. Cox $ 25,165 $ 223,500
Phyllis Burke Davis $ 24,654 $ 220,500
Robert M. Gates $ 25,168 $ 223,500
E. Bradley Jones**** $ 24,823 $ 222,000
Donald J. Kirk $ 25,327 $ 226,500
Ned C. Lautenbach*** $ 0 $ 0
Peter S. Lynch** $ 0 $ 0
William O. McCoy $ 25,168 $ 223,500
Gerald C. McDonough $ 30,627 $ 273,500
Marvin L. Mann $ 25,168 $ 220,500
Robert C. Pozen** $ 0 $ 0
Thomas R. Williams $ 25,168 $ 223,500
</TABLE>
* Information is for the calendar year ended December 31, 1998 for 237
funds in the complex.
** Interested Trustees of the fund are compensated by FMR.
*** During the period from October 14, 1999 through December 31, 1999,
Mr. Lautenbach served as a Member of the Advisory Board. Effective
January 1, 2000, Mr. Lautenbach serves as a Member of the Board of
Trustees.
**** Mr. Jones served on the Board of Trustees through December 31,
1999.
***** Effective March 16, 2000, Mr. Cook serves as a Member of the
Advisory Board.
A Compensation figures include cash, amounts required to be deferred,
and may include amounts deferred at the election of Trustees. For the
calendar year ended December 31, 1998, the Trustees accrued required
deferred compensation from the funds as follows: Ralph F. Cox,
$75,000; Phyllis Burke Davis, $75,000; Robert M. Gates, $75,000; E.
Bradley Jones, $75,000; Donald J. Kirk, $75,000; William O. McCoy,
$75,000; Gerald C. McDonough, $87,500; Marvin L. Mann, $75,000; and
Thomas R. Williams, $75,000. Certain of the non-interested Trustees
elected voluntarily to defer a portion of their compensation as
follows: Ralph F. Cox, $55,039; Marvin L. Mann, $55,039; Thomas R.
Williams, $63,433; and William O. McCoy, $55,039.
B Compensation figures include cash, and may include amounts required
to be deferred and amounts deferred at the election of Trustees.
C The following amounts are required to be deferred by each
non-interested Trustee: Ralph F. Cox, $11,343; Phyllis Burke Davis,
$11,343; Robert M. Gates, $11,343; E. Bradley Jones, $11,343; Donald
J. Kirk, $11,343; William O. McCoy, $11,343; Gerald C. McDonough,
$13,233; Marvin L. Mann, $11,343; and Thomas R. Williams, $11,343.
D Certain of the non-interested Trustees' aggregate compensation from
the fund includes accrued voluntary deferred compensation as follows:
Ralph F. Cox, $9,622; William O. McCoy, $9,622; Marvin L. Mann,
$7,153; and Thomas R. Williams, $9,622.
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION FOUND IN THE
"CONTROL OF INVESTMENT ADVISERS" SECTION ON PAGE 20.
Fidelity International Limited (FIL), a Bermuda company formed in
1968, is the ultimate parent company of Fidelity Investments Japan
Ltd. (FIJ). Edward C. Johnson 3d, Johnson family members, and various
trusts for the benefit of the Johnson family own, directly or
indirectly, more than 25% of the voting common stock of FIL. FIL
provides investment advisory services to non-U.S. investment companies
and institutional investors investing in securities throughout the
world.
THE FOLLOWING INFORMATION REPLACES THE "GROUP FEE RATE" AND "EFFECTIVE
ANNUAL FEE RATE" SCHEDULES FOUND ON PAGE 21.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
Average Group Assets Annualized Rate Group Net Assets Effective Annual Fee Rate
0 - $3 billion .5200% $ 1 billion .5200%
3 - 6 .4900 50 .3823
6 - 9 .4600 100 .3512
9 - 12 .4300 150 .3371
12 - 15 .4000 200 .3284
15 - 18 .3850 250 .3219
18 - 21 .3700 300 .3163
21 - 24 .3600 350 .3113
24 - 30 .3500 400 .3067
30 - 36 .3450 450 .3024
36 - 42 .3400 500 .2982
42 - 48 .3350 550 .2942
48 - 66 .3250 600 .2904
66 - 84 .3200 650 .2870
84 - 102 .3150 700 .2838
102 - 138 .3100 750 .2809
138 - 174 .3050 800 .2782
174 - 210 .3000 850 .2756
210 - 246 .2950 900 .2732
246 - 282 .2900 950 .2710
282 - 318 .2850 1,000 .2689
318 - 354 .2800 1,050 .2669
354 - 390 .2750 1,100 .2649
390 - 426 .2700 1,150 .2631
426 - 462 .2650 1,200 .2614
462 - 498 .2600 1,250 .2597
498 - 534 .2550 1,300 .2581
534 - 587 .2500 1,350 .2566
587 - 646 .2463 1,400 .2551
646 - 711 .2426
711 - 782 .2389
782 - 860 .2352
860 - 946 .2315
946 - 1,041 .2278
1,041 - 1,145 .2241
1,145 - 1,260 .2204
Over 1,260 .2167
</TABLE>
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND UNDER
THE HEADING "COMPUTING THE PERFORMANCE ADJUSTMENT" IN THE "MANAGEMENT
CONTRACT" SECTION ON PAGE 22.
Each percentage point of difference, calculated to the nearest
0.01% (up to a maximum difference of (plus/minus)10.00) is multiplied
by a performance adjustment rate of 0.02%.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"MANAGEMENT CONTRACTS" SECTION ON PAGE 22.
SUB-ADVISERS. On behalf of Magellan, FMR has entered into sub-advisory
agreements with FMR U.K. and FMR Far East. Pursuant to the
sub-advisory agreements, FMR may receive from the sub-advisers
investment research and advice on issuers outside the United States
and FMR may grant the sub-advisers investment management authority as
well as the authority to buy and sell securities if FMR believes it
would be beneficial to the fund.
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION FOUND IN THE
"MANAGEMENT CONTRACTS" SECTION ON PAGE 22.
On behalf of the fund, FMR Far East has entered into a sub-advisory
agreement with FIJ pursuant to which FMR Far East may receive from FIJ
investment research and advice relating to Japanese issuers (and such
other Asian issuers as FMR Far East may designate).
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"MANAGEMENT CONTRACTS" SECTION ON PAGE 22.
For providing non-discretionary investment advice and research
services, FMR pays FMR U.K. and FMR Far East fees equal to 110% and
105%, respectively, of FMR U.K.'s and FMR Far East's costs incurred in
connection with providing investment advice and research services. For
providing non-discretionary investment advice and research services,
FMR Far East pays FIJ a fee equal to 100% of FIJ's costs incurred in
connection with providing investment advice and research services for
a fund to FMR Far East.
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION FOUND IN THE
"DISTRIBUTION SERVICES" SECTION ON PAGE 23.
The Trustees have approved a Distribution and Service Plan on
behalf of the fund (the Plan) pursuant to Rule 12b-1 under the 1940
Act (the Rule). The Rule provides in substance that a mutual fund may
not engage directly or indirectly in financing any activity that is
primarily intended to result in the sale of shares of the fund except
pursuant to a plan approved on behalf of the fund under the Rule. The
Plan, as approved by the Trustees, allows the fund and FMR to incur
certain expenses that might be considered to constitute indirect
payment by the fund of distribution expenses.
Under the Plan, if the payment of management fees by the fund to
FMR is deemed to be indirect financing by the fund of the distribution
of its shares, such payment is authorized by the Plan. The Plan
specifically recognizes that FMR may use its management fee revenue,
as well as its past profits or its other resources, to pay FDC for
expenses incurred in connection with providing services intended to
result in the sale of the fund shares and/or shareholder support
services. In addition, the Plan provides that FMR, directly or through
FDC, may pay intermediaries, such as banks, broker-dealers and other
service-providers, that provide those services. Currently, the Board
of Trustees has authorized such payments for Magellan shares.
Prior to approving the Plan, the Trustees carefully considered all
pertinent factors relating to the implementation of the Plan, and
determined that there is a reasonable likelihood that the Plan will
benefit the fund and its shareholders. In particular, the Trustees
noted that the Plan does not authorize payments by the fund other than
those made to FMR under its management contract with the fund. To the
extent that the Plan gives FMR and FDC greater flexibility in
connection with the distribution of fund shares, additional sales of
fund shares or stabilization of cash flows may result. Furthermore,
certain shareholder support services may be provided more effectively
under the Plan by local entities with whom shareholders have other
relationships.
The Glass-Steagall Act generally prohibits federally and state
chartered or supervised banks from directly engaging in the business
of underwriting, selling or distributing securities. FDC believes that
the Glass-Steagall Act should not preclude a bank from performing
shareholder support services, or servicing and recordkeeping
functions. FDC intends to engage banks only to perform such functions.
However, changes in federal or state statutes and regulations
pertaining to the permissible activities of banks, as well as further
judicial or administrative decisions or interpretations, could prevent
a bank from continuing to perform all or a part of the contemplated
services. If a bank were prohibited from so acting, the Trustees would
consider what actions, if any, would be necessary to continue to
provide efficient and effective shareholder services. In such event,
changes in the operation of the fund might occur, including possible
termination of any automatic investment or redemption or other
services then provided by the bank. It is not expected that
shareholders would suffer any adverse financial consequences as a
result of any of these occurrences. In addition, state securities laws
on this issue may differ from the interpretations of federal law
expressed herein, and banks and other financial institutions may be
required to register as dealers pursuant to state law.
The fund may execute portfolio transactions with, and purchase
securities issued by, depository institutions that receive payments
under the Plan. No preference for the instruments of such depository
institutions will be shown in the selection of investments.
FDC may compensate intermediaries that satisfy certain criteria
established from time to time by FDC relating to the level or type of
services provided by the intermediary, the sale or expected sale of
significant amounts of shares, or other factors.
