SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT (No. 2-77169)
UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 31 [X]
and
REGISTRATION STATEMENT (No. 811-3455)
UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. ___ [ ]
The North Carolina Capital Management Trust
(Exact Name of Registrant as Specified in Charter)
82 Devonshire St., Boston, Massachusetts 02109
(Address Of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number: 617-570-7000
Arthur S. Loring, Secretary
82 Devonshire Street
Boston, Massachusetts 02109
(Name and Address of Agent for Service)
It is proposed that this filing will become effective
( ) immediately upon filing pursuant to paragraph (b)
(x) on November 1, 1995 pursuant to paragraph (b) of Rule 485.
( ) 60 days after filing pursuant to paragraph (a)(i)
( ) on ( ) pursuant to paragraph (a)(i)
( ) 75 days after filing pursuant to paragraph (a)(ii)
( ) on ( ) pursuant to paragraph (a)(ii) of rule 485.
If appropriate, check the following box:
() this post-effective amendment designates a new effective date for a
previously filed
post-effective amendment.
Registrant has filed a declaration pursuant to Rule 24f-2 under the
Investment Company Act of 1940 and filed the notice required by such Rule
on August 23, 1995.
The North Carolina Capital Management Trust:
Cash Portfolio and Term Portfolio
Cross Reference Sheet
Form N-1A Item Number
Part A Prospectus Caption
1 a,b Cover Page
2 a Expenses
b,c Contents; Who May Want to Invest
3 a Financial Highlights
b *
c Performance
d Performance
4 a(i) Charter
a(ii) Investment Principles and Risks; Securities and Investment
Practices; Fundamental Investment Policies and Restrictions
b Securities and Investment Practices
c Who May Want to Invest; Investment Principles and Risks; Securities and
Investment Practices
5 a Charter
b(i) Cover Page; FMR and its Affiliates
b(ii) FMR and Its Affiliates; Breakdown of
Expenses
b(iii) Expenses; Breakdown of Expenses
c FMR and Its Affiliates
d Cover Page; Charter; Breakdown of Expenses; FMR and Its Affiliates
e FMR and Its Affiliates, Breakdown of Expenses
f Expenses
g Expenses; FMR and Its Affiliates, Breakdown of Expenses
5A *
6 a(i) Charter
a(ii) How to Buy Shares; How to Sell Shares; Investor
Services; Transaction Details; Exchange Restrictions
a(iii) *
b *
c How to Buy Shares; Exchange Restrictions
d *
e Cover Page; How to Buy Shares; How to Sell Shares; Investor Services;
Transaction Details
f,g Dividends, Capital Gains, and Taxes
7 a Cover page; FMR and its Affiliates
b How to Buy Shares; Transaction Details
c How to Buy Shares; Transaction Details
d How to Buy Shares
e Breakdown of Expenses
f Expenses; Breakdown of Expenses
8 How to Sell Shares; Investor Services; Transaction Details; Exchange
Restrictions
9 *
* Not applicable
THE NORTH CAROLINA
CAPITAL
MANAGEMENT TRUST:
CASH PORTFOLIO AND TERM
PORTFOLIO
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how each
fund invests and the services available to shareholders.
To learn more about Cash Portfolio and Term Portfolio (each a "fund" or
collectively the "funds") and their investments, you can obtain a copy of
the funds' most recent financial report and portfolio listing or read the
Statement of Additional Information (SAI) dated November 1, 1995 attached
to this prospectus. The SAI has been filed with the Securities and Exchange
Commission (SEC) and is incorporated herein by reference (legally forms a
part of the prospectus). For a free copy of either document, or for
information or assistance in opening an account, please call Sterling
Capital Distributors, Inc. (Sterling) in Charlotte, North Carolina:
(medium solid bullet) Toll-free 1-800-222-3232
(medium solid bullet) or locally 1-704-372-8798
INVESTMENTS IN CASH PORTFOLIO ARE NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT CASH PORTFOLIO WILL
MAINTAIN A STABLE $1.00 SHARE PRICE.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR
OBLIGATIONS OF, OR GUARANTEED BY, ANY
DEPOSITORY INSTITUTION. SHARES ARE NOT
INSURED BY THE FDIC, THE FEDERAL RESERVE
BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT
TO INVESTMENT RISK, INCLUDING THE POSSIBLE
LOSS OF PRINCIPAL.
CASH PORTFOLIO seeks to obtain as high a level of current income as is
consistent with the preservation of capital and liquidity, and to maintain
a constant net asset value per share of $1.00, through investment in
high-grade money market instruments, including obligations of the U.S.
Government and the State of North Carolina, and in bonds and notes of any
North Carolina local government or public authority.
TERM PORTFOLIO seeks to obtain as high a level of current income as is
consistent with the preservation of capital by investing in obligations of
the U.S. Government and agencies and instrumentalities of the U.S.
Government, obligations of the State of North Carolina, bonds and notes of
any North Carolina local government or public authority, and in high-grade
money market instruments.
PROSPECTUS
NOVEMBER 1, 1995
(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA 02109
THE
N
C
ORTH
AROLINA
CAPITAL MANAGEMENT TRUST
LIKE ALL MUTUAL FUNDS, THESE
SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
NC-pro-1195
CONTENTS
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KEY FACTS WHO MAY WANT TO INVEST
EXPENSES Each fund's yearly operating expenses.
FINANCIAL HIGHLIGHTS A summary of each fund's
financial data.
PERFORMANCE
THE FUNDS IN DETAIL CHARTER How each fund is organized.
INVESTMENT PRINCIPLES AND RISKS Each fund's
overall approach to investing.
BREAKDOWN OF EXPENSES How operating costs
are calculated and what they include.
YOUR ACCOUNT HOW TO BUY SHARES Opening an account and
making additional investments.
HOW TO SELL SHARES Taking money out and closing
your account.
INVESTOR SERVICES Services to help you manage
your account.
SHAREHOLDER AND ACCOUNT POLICIES DIVIDENDS, CAPITAL GAINS, AND TAXES
TRANSACTION DETAILS Share price calculations and
the timing of purchases and redemptions.
EXCHANGE RESTRICTIONS
</TABLE>
KEY FACTS
WHO MAY WANT TO INVEST
Shares of Cash Portfolio and Term Portfolio are offered exclusively to
local governments and public authorities of the State of North Carolina,
school administrative units, local ABC boards, community colleges or public
hospitals ("eligible investors"), as those terms are defined in 20 North
Carolina Administrative Code ( NCAC ) 3.0702(3). Each fund offers
an economical and convenient vehicle for investment of available cash by
eligible investors.
Cash Portfolio is designed for investors who would like to earn
current income while preserving the value of their investment.
The rate of income will vary from day to day, generally reflecting
short-term interest rates. Cash Portfolio is managed to keep its share
price stable at $1.00 . Cash Portfolio does not constitute a balanced
investment plan. However, because it emphasizes stability, it could be
well-suited for a portion of your investment. Cash Portfolio offers free
checkwriting to give you a convenient way to manage your assets.
Term Portfolio is designed for investors who seek high current
income from a portfolio of investment-grade debt securities. Term
Portfolio's level of risk and potential reward depend on the quality and
maturity of its investments. Accordingly, Term Portfolio may not be an
appropriate investment for those investors who require daily liquidity in
order to meet current obligations. When you sell your Term Portfolio
shares, they may be worth more or less than what you paid for them.
The value of Term Portfolio's investments and the income they
generate vary from day to day, and generally reflect changes in interest
rates, market conditions, and other economic and political news. Term
Portfolio is not in itself a balanced investment plan.
You should consider your investment objective and tolerance for risk when
making an investment decision.
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you pay when you buy or sell
shares of a fund.
Cash Term
Portfoli Portfo
o lio
Maximum sales charge on None None
purchases and
reinvested distributions
Maximum deferred sales None None
charge
Redemption fee None None
Exchange fee None None
ANNUAL OPERATING EXPENSES are paid out of each fund's assets. Each fund
pays a management fee to Fidelity Management & Research Company (FMR). FMR
is responsible for the payment of all other expenses for each fund with
certain limited exceptions.
12b-1 fees are paid by FMR from its management fee, to Sterling,
through Fidelity Distributors Corporation ( FDC), for services and
expenses in connection with the distribution of fund shares.
Each fund's expenses are factored into its share price or dividends and are
not charged directly to shareholder accounts (see "Breakdown of Expenses"
on page ).
The following are projections based on historical expenses of each fund,
adjusted to reflect current fees, and are calculated as a percentage
of average net assets of each fund.
Cash Term
Portfo Portfo
lio lio
Management fee* 0 .1 9 % 0 .2 0 %
12b-1 fee (Distribution Fee) 0 .16% 0 .16%
Other expenses 0.01 % 0.01 %
Total operating expenses 0 .36% 0 .37%
* The rate for management fees represents the net rate retained by FMR
after payments made to the distributor. The management fees before payments
made to the distributor by FMR are 0 .3 5 % and
0 .3 6 % for Cash Portfolio and Term Portfolio, respectively.
EXPENSE TABLE EXAMPLE: You would pay the following expenses on a $1,000
investment assuming a 5% annual return and full redemption, at the end of
each time period:
1 3 5 10
Year Years Years Years
Cash Portfolio $ 4 $ 1 $ 2 $ 4
2 0 6
Term Portfolio $ 4 $ 1 $ 2 $ 4
2 1 7
THESE EXAMPLES ILLUSTRATE THE EFFECT OF EXPENSES, BUT ARE NOT MEANT TO
SUGGEST ACTUAL OR EXPECTED COSTS OR RETURNS, ALL OF WHICH MAY VARY.
FINANCIAL HIGHLIGHTS
The financial highlights tables that follow for Cash Portfolio and Term
Portfolio and each fund's financial statements are included in the funds'
Annual Report and have been audited by Coopers & Lybrand L.L.P.,
independent accountants. Their report on the financial statements and
financial highlights is included in the Annual Report. The financial
statements, the financial highlights, and the report are incorporated by
reference into the funds' SAI, which is attached to this Prospectus.
CASH PORTFOLIO
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1.Selected Per-Share Data
2.Years ended June 30
1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
3.Net asset value,
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
beginning of period
4.Income from Investment
.073 .059 .067 .085 .082 .070 .046 .030 .031 .052
Operations
Net interest income
5.Less Distributions
(.073) (.059) (.067) (.085) (.082) (.070) (.046) (.030) (.031) (.052)
From net interest income
6.Net asset value, end of
$ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
period
7.Total return A
7.53 6.03 6.88 8.83 8.55 7.23 4.67 3.04 3.10 5.28
% % % % % % % % % %
8.RATIOS AND SUPPLEMENTAL DATA
9.Net assets, end of period
$ 383,21 $ 406,56 $ 653,14 $ 894,83 $ 1,080,0 $ 1,405,5 $ 1,651,0 $ 1,303,1 $ 1,221,4 $ 1,589,1
(000 omitted)
7 7 8 8 55 79 78 18 47 01
10.Ratio of expenses to
.46 .44 .43 .43 .42 .40 .39 .39 .39 .39
average net assets
% % % % % % % % % %
11.Ratio of expenses to
.53 .49 .47 .46 .44 .41 .39 .39 .39 .39
average net
% % % % % % % % % %
assets before expense
reductions
12.Ratio of net interest
7.24 5.85 6.68 8.61 8.20 6.90 4.47 3.00 3.05 5.22
income to average
% % % % % % % % % %
net assets
</TABLE>
A TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
TERM PORTFOLIO
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13.Selected Per-Share Data
14.Years ended June 30
1987C 1988 1989 1990 1991 1992 1993 1994 1995
15.Net asset value, beginning
$ 10.000 $ 9.910 $ 9.820 $ 9.780 $ 9.730 $ 9.820 $ 9.910 $ 9.940 $ 9.850
of period
16.Income from Investment
.185 .762 .832 .816 .741 .560 .337 .288 .505
Operations
Net investment income
17. Net realized and
(.090) (.090) (.040) (.050) .090 .097 .031 (.046) .059
unrealized gain
(loss) on investments
18. Total from investment
.095 .672 .792 .766 .831 .657 .368 .242 .564
operations
19.Less Distributions
(.185) (.762) (.832) (.816) (.741) (.567) (.338) (.312) (.504)
From net investment income
20. In excess of net realized
- -- -- -- -- -- -- -- (.020) --
gain on investments
21. Total distributions
(.185) (.762) (.832) (.816) (.741) (.567) (.338) (.332) (.504)
22.Net asset value, end of
$ 9.910 $ 9.820 $ 9.780 $ 9.730 $ 9.820 $ 9.910 $ 9.940 $ 9.850 $ 9.910
period
23.Total return B
.96% 7.02 8.44 8.15 8.83 6.86 3.78 2.47 5.87%
% % % % % % %
24.RATIOS AND SUPPLEMENTAL DATA
25.Net assets, end of period
$ 45,215 $ 116,556 $ 83,770 $ 83,412 $ 83,656 $ 89,303 $ 79,765 $ 66,495 $ 70,351
(000 omitted)
26.Ratio of expenses to
.14%A .27 .40 .40 .41 .41 .41 .41 .41%
average net assets
% % % % % % %
27.Ratio of expenses to
.50%A .50 .50 .50 .45 .41 .41 .41 .41%
average net assets
% % % % % % %
before expense reductions
28.Ratio of net investment
6.63%A 7.75 8.52 8.37 7.56 5.69 3.41 3.14 5.12%
income to average
% % % % % % %
net assets
29.Portfolio turnover rate
407%A 30 14 23 78 424 612 494 519%
% % % % % % %
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A ANNUALIZED
B TOTAL RETURNS FOR PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED. TOTAL
RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING
THE PERIODS SHOWN.
C MARCH 19, 1987 (COMMENCEMENT OF OPERATIONS) TO JUNE 30, 1987
PERFORMANCE
Performance can be measured as TOTAL RETURN or YIELD.
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment in a fund over a given
period, assuming reinvestment of any dividends and capital gains. A
CUMULATIVE TOTAL RETURN reflects actual performance over a stated period of
time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that,
if achieved annually, would have produced the same cumulative total return
if performance had been constant over the entire period. Average annual
total returns smooth out variations in performance; they are not the same
as actual year-by-year results.
YIELD refers to the income generated by an investment in a fund over a
given period of time, expressed as an annual percentage rate. Yields for
Term Portfolio are calculated according to a standard that is required for
all stock and bond funds. Because this differs from other accounting
methods, the quoted yield for Term Portfolio may not equal the income
actually paid to shareholders.
When a yield assumes that income earned is reinvested, it is called an
EFFECTIVE YIELD.
SEVEN-DAY YIELD illustrates the income earned by an investment in Cash
Portfolio over a recent seven-day period. Since money market funds maintain
a stable $1.00 share price, current seven-day yields are the most common
illustration of money market fund performance.
The funds' recent strategies, performance, and holdings are detailed twice
a year in financial reports, which are sent to all shareholders.
For current performance, call Sterling toll-free at 1-800-222-3232 or
locally at 1-704-372-8798.
THE FUNDS IN DETAIL
CHARTER
EACH FUND IS A MUTUAL FUND: an investment that pools shareholders' money
and invests it toward a specified goal. Each fund is a diversified fund of
The North Carolina Capital Management Trust, an open-end management
investment company organized as a Massachusetts business trust on April 26,
1982.
EACH FUND IS GOVERNED BY A BOARD OF TRUSTEES which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet throughout the year to oversee the funds' activities,
review contractual arrangements with companies that provide services to the
funds, and review the funds' performance. The majority of trustees are not
otherwise affiliated with Fidelity or Sterling.
THE FUNDS MAY HOLD SPECIAL MEETINGS AND MAIL PROXY MATERIALS. These
meetings may be called to elect or remove trustees, change fundamental
policies, approve a management contract, or for other purposes.
Shareholders not attending these meetings are encouraged to vote by proxy.
The transfer agent will mail proxy materials in advance, including a voting
card and information about the proposals to be voted on. You are entitled
to one vote for each share you own.
FMR AND ITS AFFILIATES
Fidelity Investments is one of the largest investment management
organizations in the United States and has its principal business address
at 82 Devonshire Street, Boston, Massachusetts 02109. It includes a number
of different subsidiaries and divisions which provide a variety of
financial services and products. The funds employ various Fidelity
companies to perform activities required for their operation.
Each fund is managed by FMR, which handles their business affairs and
chooses Term Portfolio's investments. FMR Texas Inc. (FMR Texas), located
in Irving, Texas , has primary responsibility for providing
investment management services to Cash Portfolio.
As of August 31 , 1995, FMR advised funds having approximately 22
million shareholder accounts with a total value of more than
$ 328 billion.
Burnell Stehman is vice president and manager of The North Carolina Capital
Management Trust: Cash Portfolio, which he has managed since 198 4 .
He also manages Fidelity Daily Income Trust, Fidelity Money
Market Trust: Rated Money Market and Fidelity Institutional
Cash Portfolio : Domestic. Mr. Stehman joined Fidelity in 1979.
Curtis Hollingsworth is vice president and manager of The North Carolina
Capital Management Trust: Term Portfolio, which he has managed since
October 1995. He also manages Fidelity Short-Intermediate Government,
Fidelity Institutional Short-Intermediate Government, Spartan Limited
Maturity Government, and Spartan Short-Intermediate Government. Previously,
he managed Spartan-Long Term Government Bond, Fidelity Government
Securities and Fidelity Advisor Government Investment. Mr. Hollingsworth
joined Fidelity in 1983.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.
FDC distributes and markets Fidelity's funds and services. Fidelity
Investments Institutional Operations Company (FIIOC) performs transfer
agent servicing functions for each fund.
FMR Corp. is the ultimate parent company of FMR and FMR Texas. Members of
the Edward C. Johnson 3d family are the predominant owners of a class of
shares of common stock representing approximately 49% of the voting power
of FMR Corp. Under the Investment Company Act of 1940 (the 1940 Act),
control of a company is presumed where one individual or group of
individuals owns more than 25% of the voting stock of that company;
therefore, the Johnson family may be deemed under the 1940 Act to form a
controlling group with respect to FMR Corp.
To carry out the funds' transactions, FMR may use its broker-dealer
affiliates and other firms that sell fund shares, provided that a fund
receives services and commission rates comparable to those of other
broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
CASH PORTFOLIO invests only in those high-grade money market instruments
which are authorized for investment by units of local government as
specified in North Carolina General Statute (G.S.) 159-30(c) (the
Statute), as amended from time to time, and in 20 NCAC 3.07 03 (the
Code).
Cash Portfolio may invest more than 25% of its total assets in obligations
of banks. Cash Portfolio's investments in domestic bank obligations are
limited to those banks having total assets in excess of one billion dollars
and subject to regulation by the U.S. Government. Cash Portfolio may also
invest in certificates of deposit issued by banks insured by the Federal
Deposit Insurance Corporation (FDIC) having total assets of less than one
billion dollars, provided that the portfolio will at no time own more than
an aggregate of $100,000 in principal and interest obligations (or any
higher principal amount or principal and interest which in the future may
be fully covered by FDIC insurance) of any one such issuer. Cash Portfolio
will use its best efforts to maintain a constant net asset value per
share ( NAV ) of $1.00.
When you sell your shares of Cash Portfolio, they should be worth the
same amount as when you bought them. Of course there is no guarantee that
Cash Portfolio will maintain a stable $1.00 share price. Cash Portfolio
follows industry-standard guidelines on the quality and maturity of its
investments, which are designed to help maintain a stable $1.00 share
price. Cash Portfolio will purchase only high-quality securities that FMR
believes present minimal credit risks and will observe maturity
restrictions on securities it buys. In general, securities with longer
maturities are more vulnerable to price changes, although they may provide
higher yields. It is possible that a major change in interest rates or a
default on Cash Portfolio's investments could cause its share price (and
the value of your investment) to change.
Cash Portfolio earns income at current money market rates. It
stresses preservation of capital, liquidity , and income and
does not seek the higher yields or capital appreciation that more
aggressive investments may provide. Cash Portfolio's yield will vary from
day to day and generally reflects current short-term interest rates and
other market conditions.
TERM PORTFOLIO invests in obligations of the U.S. Government, its agencies
or instrumentalities, obligations fully guaranteed by the U.S. Government,
or obligations of the State of North Carolina and bonds and notes of any
North Carolina local government or public authority, as permitted pursuant
to the Statute and the Code. Under the current Code, Term Portfolio may
invest in securities with maturities of up to seven years. Term Portfolio
may, under normal circumstances, invest up to 25% of its total assets in
the finance industry.
Term Portfolio's yield and share price change daily and are based on
changes in interest rates, market conditions, other economic and political
news, and on the quality and maturity of its investments. In general, bond
prices rise when interest rates fall, and vice versa. This effect is
usually more pronounced for longer-term securities. FMR may use various
investment techniques to hedge a portion of Term Portfolio's risk,
but there is no guarantee that these strategies will work as intended.
When you sell your Term Portfolio shares, they may be worth more or less
than what you paid for them.
FMR normally invests Term Portfolio's assets according to its investment
strategy. Term Portfolio also reserves the right to invest without
limitation in investment-grade money market or short-term debt instruments
for temporary, defensive purposes.
Each fund's investments in instruments other than the direct obligations of
the U.S. Government are subject to the ability of the issuer to make
payment at maturity. Investments in obligations of the State of North
Carolina or municipalities within the State are subject to political or
economic conditions of the State or municipality.
THE STATUTE AND THE CODE. The following investment policies are
non-fundamental, which means that if the Statute or the Code, or any
legislation or regulations relating to those parameters change in the
future, the Trustees may authorize corresponding changes in the instruments
in which the funds may invest without first obtaining shareholder approval.
Currently, the rulings, regulations and interpretations to which the funds
adhere allow the funds to invest only in the following instruments:
(i) Obligations of the United States or obligations fully guaranteed both
as to principal and interest by the United States;
(ii) Obligations of the State of North Carolina and bonds and notes of any
North Carolina local government or public authority ;
(iii) Obligations of the Federal Financing Bank, the Federal Farm Credit
Bank, the Bank for Cooperatives, the Federal Intermediate Credit Bank, the
Federal Land Banks, the Federal Home Loan Banks, the Federal Home Loan
Mortgage Corporation, the Federal National Mortgage Association, the
Government National Mortgage Association, the Federal Housing
Administration, the Farmers Home Administration, and the United States
Postal Service;
(iv) Savings certificates issued by any savings and loan association
organized under the laws of the State of North Carolina or by any federal
savings and loan association having its principal office in North Carolina;
provided that any principal amount of such certificate in excess of the
amount insured by the federal government or any agency thereof, or by a
mutual deposit guaranty association authorized by the Administrator of the
Savings Institutions Division of the Department of Commerce of the
State of North Carolina, be fully collateralized;
(v) Evidences of ownership of, or fractional undivided interests in, future
interest and principal payments on either direct obligations of the United
States government or obligations the principal of and the interest on which
are guaranteed by the United States, which obligations are held by a bank
or trust company organized and existing under the laws of the United States
or any state in the capacity of custodian;
(vi) Prime quality c ommercial paper bearing the highest rating of at
least one nationally recognized rating service and not bearing a rating
below the highest by any nationally recognized rating service which rates
the particular obligation;
(vii) Bills of exchange or time drafts drawn on and accepted by a
commercial bank (commonly referred to as "bankers' acceptances") and
eligible for use as collateral by member banks in borrowing from a federal
reserve bank, provided that the accepting bank or its holding company is
either (a) incorporated in the State of North Carolina or (b) has
outstanding publicly held obligations bearing the highest rating of at
least one nationally recognized rating service and not bearing a rating
below the highest by any nationally recognized rating service which rates
the particular obligations; or
(viii) Repurchase agreements with respect to either direct obligations of
the United States or obligations the principal of and the interest on which
are guaranteed by the United States if entered into with a broker or
dealer , as defined by the Securities Exchange Act of 1934, which is
a dealer recognized as a primary dealer by a Federal Reserve Bank,
or any commercial bank, trust company or national banking association, the
deposits of which are insured by the FDIC or any successor thereof.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which a fund may invest, strategies FMR may employ in
pursuit of a fund's investment objective, and a summary of related risks.
Any restrictions listed supplement those discussed earlier in this section.
A complete listing of each fund's limitations and more detailed information
about each fund's investments are contained in the funds' SAI .
Policies and limitations are considered at the time of purchase; the sale
of instruments is not required in the event of a subsequent change in
circumstances.
FMR may not buy all of these instruments or use all of these techniques
unless it believes that they are consistent with a fund's investment
objective and policies and that doing so will help a fund achieve its goal.
Current holdings and recent investment strategies are described in
each fund ' s financial reports, which are sent to shareholders
twice a year. For a free SAI or financial report, call Sterling toll-free
at 1-800-222-3232 or locally at 1-704-372-8798.
MONEY MARKET SECURITIES are high-quality, short-term obligations issued by
the U.S. Government, corporations, financial institutions, and other
entities. These obligations may carry fixed, variable, or floating interest
rates. A security's credit may be enhanced by a bank, insurance company, or
other entity. Some money market securities employ a trust or other similar
structure to modify the maturity, price characteristics, or quality of
financial assets so that they are eligible investments for money market
funds. If the structure does not perform as intended, adverse tax or
investment consequences may result.
OTHER MONEY MARKET SECURITIES may include commercial paper, certificates of
deposit, bankers' acceptances, and time deposits.
U.S. GOVERNMENT SECURITIES are high-quality debt securities issued or
guaranteed by the U.S. Treasury or by an agency or instrumentality of the
U.S. Government. Not all U.S. Government securities are backed by the full
faith and credit of the United States. For example, securities issued by
the Federal Farm Credit Bank or by the Federal National Mortgage
Association are supported by the instrumentality's right to borrow money
from the U.S. Treasury under certain circumstances. However, securities
issued by the Financing Corporation are supported only by the credit of the
entity that issued them.
DEBT SECURITIES. Bonds and other debt instruments are used by issuers to
borrow money from investors. The issuer pays the investor a fixed or
variable rate of interest, and must repay the amount borrowed at maturity.
Some debt securities, such as zero coupon bonds, do not pay current
interest, but are purchased at a discount from their face values. In
general, bond prices rise when interest rates fall, and vice versa. Debt
securities have varying degrees of quality and varying levels of
sensitivity to changes in interest rates. Longer-term bonds are generally
more sensitive to interest rate changes than short-term bonds.
RESTRICTIONS: Purchase of a debt security is consistent with Term
Portfolio's debt quality policy if it is rated at or above the stated
level by Moody's Investors Service, Inc., or rated in the equivalent
categories by Standard & Poor's Corporation, or is unrated but judged to be
of equivalent quality by FMR. Term Portfolio currently intends to limit its
investments in debt securities to those rated A-quality and above.
MUNICIPAL SECURITIES are issued to raise money for a variety of public
purposes, including general financing for state and local governments, or
financing for specific projects or public facilities. They may be issued in
anticipation of future revenues, and may be backed by the full taxing power
of a municipality, the revenues from a specific project, or the credit of a
private organization. A security's credit may be enhanced by a bank,
insurance company, or other entity. The value of some or all municipal
securities may be affected by uncertainties in the municipal market related
to legislation or litigation involving the taxation of municipal securities
or the rights of municipal securities holders. A fund may own a municipal
security directly or through a participation interest.
PUT FEATURES entitle the holder to put (sell back) a security to the issuer
or a financial intermediary. In exchange for this benefit, a fund may pay
periodic fees or accept a lower interest rate. The credit quality of the
investment may be affected by the creditworthiness of the put provider.
Demand features, standby commitments, and tender options are types of put
features.
VARIABLE AND FLOATING RATE SECURITIES have interest rates that are
periodically adjusted either at specific intervals or whenever a benchmark
rate changes.
STRIPPED SECURITIES are the separate income or principal components of a
debt security. Their risks are similar to those of other debt securities,
although they may be more volatile and the value of certain types of
stripped securities may move in the same direction as in interest rates.
FINANCIAL SERVICES INDUSTRY. Companies in the financial services industry
are subject to various risks related to that industry, such as government
regulation, changes in interest rates, and exposure on loans, including
loans to foreign borrowers. If a fund invests substantially in this
industry, its performance may be affected by conditions affecting the
industry.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund buys a security at
one price and simultaneously agrees to sell it back at a higher price.
Delays or losses could result if the other party to the agreement defaults
or becomes insolvent.
ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined by
FMR, under the supervision of the Board of Trustees, to be illiquid, which
means that they may be difficult to sell promptly at an acceptable price.
The sale of some illiquid securities , and some other securities, may
be subject to legal restrictions. Difficulty in selling securities may
result in a loss or may be costly to a fund.
RESTRICTION : A fund may not purchase a security if, as a result,
more than 10% of its net assets would be invested in illiquid and
restricted securities.
WHEN-ISSUED AND DELAYED-DELIVERY TRANSACTIONS are trading practices in
which payment and delivery for the securities take place at a future date.
The market value of a security could change during this period, which could
affect a fund's yield or the market value of a fund's assets.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce the
risks of investing. This may include limiting the amount of money invested
in any one issuer or, on a broader scale, in any one industry. Economic,
business, or political changes can affect all securities of a similar type.
RESTRICTIONS : Cash Portfolio may not invest more than 5% of
its total assets in any one issuer , except that, with respect
to certificates of deposit and bankers' acceptances, the fund may invest up
to 10% of its total assets in the highest quality securities of a
single issuer for up to three business days.
With respect to 75% of its total assets, Term Portfolio may not purchase a
security if, as a result, more than 5% would be invested in the securities
of any issuer.
These limitations do not apply to U.S. Government securities.
BORROWING. A fund may borrow from banks. If Term Portfolio borrows money,
its share price may be subject to greater fluctuation until the borrowing
is paid off. If Term Portfolio makes additional investments while
borrowings are outstanding, this may be considered a form of leverage.
RESTRICTION : Each fund may borrow only for temporary or emergency
purposes, but not in an amount exceeding 33% of its total assets.
LENDING securities to broker-dealers and institutions, including Fidelity
Brokerage Services, Inc. (FBSI), an affiliate of FMR, is a means of earning
income. This practice could result in a loss or a delay in recovering a
fund's securities.
RESTRICTION: Loans, in the aggregate, may not exceed 33% of a fund's total
assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages are
fundamental, that is, subject to change only by shareholder approval. The
following paragraphs restate all those that are fundamental. All policies
stated throughout this prospectus, other than those identified in the
following paragraphs, can be changed without shareholder approval.
Cash Portfolio seeks to obtain as high a level of current income as is
consistent with the preservation of capital and liquidity, and to maintain
a constant net asset value per share of $1.00, through investment in
high-grade money market instruments, including obligations of the U.S.
Government and the State of North Carolina, and in bonds and notes of any
North Carolina local government or public authority.
Cash Portfolio invests only in those high-grade money market instruments
which are authorized for investment by units of local government as
specified in North Carolina General Statute (G.S.) 159-30(c) (the
Statute), as amended from time to time, and in 20 NCAC 3.0703 (the Code).
Cash Portfolio may invest more than 25% of its total assets in obligations
of banks. Cash Portfolio will use its best efforts to maintain a constant
net asset value per share ( NAV ) of $1.00.
Term Portfolio seeks to obtain as high a level of current income as is
consistent with the preservation of capital by investing in obligations of
the U.S. Government and agencies and instrumentalities of the U.S.
Government, obligations of the State of North Carolina, bonds and notes of
any North Carolina local government or public authority, and in high-grade
money market instruments.
Term Portfolio invests in obligations of the U.S. Government, its agencies
or instrumentalities, obligations fully guaranteed by the U.S. Government,
or obligations of t he State of North Carolina and bonds and notes of
any N orth Carolina local government or public authority, as
permitted pursuant to the Statute and the Code. Under the current Code,
Term Portfolio may invest in securities with maturities of up to seven
years.
With respect to 75% of its total assets, Term Portfolio may not purchase a
security if, as a result, more than 5% would be invested in the securities
of any issuer . These limitations do not apply to U.S. Government
securities.
Each fund may borrow only for temporary or emergency purposes, but not in
an amount exceeding 33% of its total assets.
Loans, in the aggregate, may not exceed 33% of a fund's total assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the funds pay fees related to their daily
operations. Expenses paid out of each fund's assets are reflected in that
fund's share price or dividends; they are neither billed directly to
shareholders nor deducted from shareholder accounts.
FMR may, from time to time, agree to reimburse each fund for management
fees above a specified limit. Reimbursement arrangements, which may be
terminated at any time without notice, can decrease each fund's expenses
and boost its performance.
MANAGEMENT FEE
Each fund's management fee is calculated and paid to FMR every month. FMR
pays all of the expenses of each fund with limited exceptions. Each fund
pays an annual management fee according to the following schedule:
0.365% of average net assets through $400 million; 0.360% of average net
assets in excess of $400 million through $800 million; 0.355% of average
net assets in excess of $800 million through $1.2 billion; 0.350% of
average net assets in excess of $1.2 billion through $1.6 billion; 0.340%
of average net assets in excess of $1.6 billion through $2.0 billion; and
0.330% of average net assets in excess of $2.0 billion.
FMR HAS A SUB-ADVISORY AGREEMENT with FMR Texas, which has primary
responsibility for providing investment management for Cash Portfolio,
while FMR retains responsibility for providing Cash Portfolio with other
management services. For these services FMR pays FMR Texas 50% of its
management fee (before expense reimbursements, but after payments made by
FMR pursuant to Cash Portfolio's Distribution and Service Plan). FMR paid
FMR Texas 0.11% of Cash Portfolio's average net assets for fiscal 1995.
OTHER EXPENSES
FIIOC performs transfer agency, dividend disbursing and shareholder
servicing functions for each fund. Fidelity Service Co. (FSC) calculates
the NAV and dividends for each fund and maintains each
fund's general accounting record s . These expenses are paid by
FMR pursuant to its management contract.
FDC has entered into a Distribution and Service Agent Agreement with
Sterling pursuant to which Sterling acts as distribution agent of shares of
Cash Portfolio and Term Portfolio.
Each fund has adopted a DISTRIBUTION AND SERVICE PLAN. Each plan
recognizes that FMR may use its management fees to pay expenses
associated with the sale of fund shares. FMR pays FDC a monthly
distribution fee, all of which FDC pays Sterling, as compensation for
Sterling's services and expenses in connection with the distribution of
shares of each fund and providing certain shareholder servicing functions,
which include the processing of shareholder inquiries, account maintenance,
and processing purchases, redemptions, transfers, and exchanges. FMR
currently pays Sterling, through FDC, monthly according to the following
schedule: 0.160% of average net assets through $1.6 billion; 0.155% of
average net assets in excess of $1.6 billion through $2.0 billion; and
0.150% of average net assets in excess of $2.0 billion.
Each fund also pays other expenses, such as brokerage fees and commissions,
interest on borrowings, taxes, and the compensation of trustees who are not
affiliated with Fidelity or Sterling.
The portfolio turnover rate for Term Portfolio for fiscal 1995 was 519%.
This rate varies from year to year. High turnover rates for Term Portfolio
increase transaction costs and may increase taxable capital gains. FMR
considers these effects when evaluating the anticipated benefits of
short-term investing.
YOUR ACCOUNT
HOW TO BUY SHARES
EACH FUND'S SHARE PRICE, called NAV, is calculated every business day. Cash
Portfolio is managed to keep its share price stable at $1.00. Each fund's
shares are sold without a sales charge.
Shares are purchased at the next NAV calculated after your order is
received and accepted b y Sterling. Cash Portfolio's NAV is normally
calculated at 12:00 p.m. and 4:00 p.m. Eastern time. Term Portfolio's NAV
is normally calculated at 4:00 p.m. Eastern time. For details on dividends,
see "Dividends, Capital Gains, and Taxes" and "Transaction Details" on page
and page .
Share certificates are not available for Cash Portfolio or Term Portfolio
shares.
IF YOU ARE NEW TO THE FUNDS, you must complete and sign an account
application prior to making an initial investment.
Term Portfolio shares are available only to investors with a new or
existing account in Cash Portfolio.
Once you have opened an account, you may purchase shares of each fund
according to the methods described in the charts on pages and . If there
is no account application accompanying this prospectus, call Sterling
toll-free at 1-800-222-3232 or locally at 1-704-372-8798.
SECURITIES EXCHANGE. Shares of Term Portfolio may be purchased in exchange
for securities you hold which meet Term Portfolio's investment objective,
policies, and limitations. FDC reserves the right to refuse a securities
exchange for any reason. You may realize a gain or loss for federal income
tax purposes upon a securities exchange. For further information, including
specific details about the securities exchange program and instructions on
submission of a letter of intention to Sterling, call Sterling toll-free at
1-800-222-3232 or locally at 1-704-372-8798. PLEASE DO NOT SEND SECURITIES
TO THE FUND, TO FDC, OR TO STERLING.
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CASH PORTFOLIO TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT
Mail (mail_graphic) (small solid bullet) Send a completed, signed (small solid bullet) Make your check payable
to "NCCMT:
application to the following address: Cash Portfolio." Indicate your account
The North Carolina Capital number and mail your check and a
Management Trust precoded fund investment slip, which will
c/o Sterling Capital Distributors, be supplied when you open your
Inc. account, to the following address:
One First Union Center The North Carolina Capital
301 S. College Street, Suite 3200 Management Trust
Charlotte, NC 28202-6005 c/o Sterling Capital Distributors, Inc.
One First Union Center
301 S. College Street, Suite 3200
Charlotte, NC 28202-6005
Phone 1-800-544-777 (phone_graphic) (small solid bullet) Not available. (small solid bullet) Exchange from a Term
Portfolio account
with the same registration, including
name, and address.
(small solid bullet) Call Sterling toll-free
at 1-800-222-3232
or locally at 1-704-372-8798 before 4:00
p.m. Eastern time.
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In Person (hand_graphic) (small solid bullet) Not available. (small solid bullet) Bring your check and a precoded fund
investment slip, which will be supplied
when you open your account, to any
branch of First Union National Bank of
North Carolina before the close of
business of the branch if you want your
investment to be made that same day.
Wire (wire_graphic) (small solid bullet) Not available. (small solid bullet) You may obtain wire instructions by
calling Sterling toll-free at
1-800-222-3232 or locally at
1-704-372-8798.
(small solid bullet) Call Sterling before 12:00 p.m. Eastern
time on the day of the wire.
(small solid bullet) Federal funds and certain federal or
state transfer payments will be accepted
by wire.
(small solid bullet) If Sterling is not advised of the order
prior to 12:00 p.m. Eastern time on the
day of the wire, or if federal funds are
not received the same day the order is
placed, the order will be accepted on the
following business day.
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TERM PORTFOLIO TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT
Mail (mail_graphic) (small solid bullet) Send a completed, signed (small solid bullet) Not available.
application to the following address:
The North Carolina Capital
Management Trust
c/o Sterling Capital Distributors,
Inc.
One First Union Center
301 S. College Street, Suite 3200
Charlotte, NC 28202-6005
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Phone 1-800-544-777 (phone_graphic) (small solid bullet) Not available. (small solid bullet) Exchange from a Cash Portfolio
account
with the same registration, including
name, and address.
(small solid bullet) Call Sterling toll-free at
1-800-222-3232
or locally at 1-704-372-8798 before 4:00
p.m. Eastern time.
In Person (hand_graphic) (small solid bullet) Not available. (small solid bullet) Not available.
Wire (wire_graphic) (small solid bullet) Not available. (small solid bullet) You may obtain wire instructions by
calling Sterling toll-free at
1-800-222-3232 or locally at
1-704-372-8798.
(small solid bullet) Call Sterling before 4:00 p.m.
Eastern
time on the business day prior to the
wiring of funds.
(small solid bullet) Only federal funds will be accepted
by
wire.
(small solid bullet) If Sterling is not advised of the
order
prior to 4:00 p.m. Eastern time on the
business day on which your order is
received or if the federal funds are not
received the next business day, your
order may be canceled, and you could
be held liable for resulting fees and
losses.
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HOW TO SELL SHARES
You can arrange to take money out of your fund account at any time by
selling (redeeming) some or all of your shares. Your shares will be sold at
the next NAV calculated after your order is received and accepted by
Sterling . Cash Portfolio's NAV is normally calculated at 12:00 p.m.
and 4:00 p.m. Eastern time. Term Portfolio's NAV is normally calculated at
4:00 p.m. Eastern time. For details on dividends, see "Dividends, Capital
Gains, and Taxes" and "Transaction Details" on page and page .
TO SELL SHARES IN AN ACCOUNT, you may use any of the methods described
below and on page .
TO SELL SHARES BY BANK WIRE, you will need to sign up for this service in
advance.
SELLING SHARES IN WRITING
Write a "letter of instruction" with:
(small solid bullet) Your name,
(small solid bullet) The fund's name,
(small solid bullet) Your fund account number,
(small solid bullet) The dollar amount or number of shares to be redeemed,
(small solid bullet) Any other applicable requirements listed in the chart
on page .
Mail your letter to the following address:
The North Carolina Capital Management Trust
c/o Sterling Capital Distributors, Inc.
One First Union Center
301 S. College Street, Suite 3200
Charlotte, NC 28202-6005
Unless otherwise instructed, the transfer agent will send a check to the
record address.
BY WIRE. If you elected to do so on your account application, you
may instruct that redemption proceeds in any amount be wired directly to
your existing account in any North Carolina bank as designated on the
application. You should determine that such designated institutions satisfy
any legal requirements under North Carolina law prior to completing the
application. You may change the designated bank account, or add additional
accounts without limitation, by sending a letter of instruction to Sterling
at the address shown above prior to requesting a redemption.
There is no fee imposed by the funds for wiring of redemption proceeds.
Redemption proceeds will be wired via the Federal Reserve Wire System to
the bank account of record. For details on how to redeem by wire, refer to
the chart on page .
Cash Portfolio reserves the right to take up to seven days to pay you if
making immediate payment would adversely affect the fund.
CHECKWRITING
If you have a checkbook for your account in Cash Portfolio, you may write
an unlimited number of checks. Do not, however, try to close out your
account by check. You are advised to determine whether use of the
checkwriting feature may be limited by North Carolina G.S. 159-28, as
amended from time to time.
ACCOUNT SPECIAL REQUIREMENTS
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PHONE All account s (small solid bullet) You may exchange to Cash
Portfolio from Term Portfolio, and
vice versa, if both accounts are
registered with the same name(s)
and address.
(small solid bullet) Call Sterling toll-free at
1-800-222-3232 or locally at
1-704-372-8798 before 4:00 p.m.
Eastern time.
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Mail or in Person (mail_graphic)(hand_graphic) All accounts (small solid bullet) The letter of instruction must be
signed by all persons required to
sign for transactions.
Wire (wire_graphic) All accounts (small solid bullet) You must sign up for the wire
feature before using it. To verify that
it is in place, call Sterling toll-free at
1-800-222-3232 or locally at
1-704-372-8798.
(small solid bullet) Your wire redemption request must
be received by Sterling before 12:00
p.m. Eastern time for Cash Portfolio
for money to be wired on the same
business day, or before 4:00 p.m.
Eastern time for Cash Portfolio or
Term Portfolio for money to be
wired on the next business day.
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Check (check_graphic) Cash Portfolio accounts (small solid bullet) All account owners must sign a
signature card to receive a
checkbook.
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INVESTOR SERVICES
Fidelity and Sterling provide a variety of services to help you manage your
account.
INFORMATION SERVICES
STATEMENTS AND REPORTS that the transfer agent sends to you include the
following:
(small solid bullet) Confirmation statements (after every transaction,
except a reinvestment, that affects your account balance or your account
registration)
(small solid bullet) Account statements (monthly)
(small solid bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports will be mailed,
even if you have more than one account in a fund. Call Sterling toll-free
at 1-800-222-3232 or locally at 1-704-372-8798 if you need additional
copies of financial reports or historical account information.
SPECIAL SERVICES. Special processing has been arranged with FIIOC for
institutions that wish to open multiple accounts. You may be required to
enter into a separate agreement with FIIOC. Charges for these services, if
any, will be determined based on the level of services to be rendered.
ARBITRAGE REPORTING SERVICES. Special reporting is available for state and
local entities that require rebate calculations for the invested proceeds
of their issued tax-exempt obligations pursuant to the Tax Reform Act of
1986. Sterling, FMR, their affiliates and the funds do not assume
responsibility for the accuracy of the services provided. Please call
Sterling toll-free at 1-800-222-3232 or locally at 1-704-372-8798 for more
information.
TRANSACTION SERVICES
EXCHANGE PRIVILEGE. You may sell your shares of Cash Portfolio and buy
shares of Term Portfolio, and vice versa, by telephone or in writing.
Note that exchanges out of a fund may have tax consequences for you. For
details on policies and restrictions governing exchanges, including
circumstances under which a shareholder's exchange privilege may be
suspended or revoked, see "Exchange Restrictions," on page .
SHAREHOLDER AND ACCOUNT POLICIES
DIVIDENDS, CAPITAL GAINS, AND TAXES
Each fund distributes substantially all of its net investment income and
capital gains, if any, to shareholders each year. Income dividends are
declared daily and paid monthly. Capital gains earned by Term Portfolio are
normally distributed in December.
DISTRIBUTION OPTIONS
When you open an account, specify on your account application how you want
to receive your distributions. The funds offer two options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions, if
any, will be automatically reinvested in additional shares of the fund. If
you do not indicate a choice on your application, you will be assigned this
option.
Dividends will be reinvested at each fund's NAV on the first business
day of the following month. Capital gain distributions, if any, will be
reinvested at the NAV as of the record date of the distribution.
2. CASH OPTION. You will be sent a check for your dividend and capital gain
distributions, if any.
The mailing of distribution checks will begin within seven days.
TAXES
As with any investment, you should consider how your investment in a fund
will be taxed.
TAXES ON DISTRIBUTIONS. Distributions are subject to federal income tax,
and may also be subject to state or local taxes. Your distributions are
taxable when they are paid, whether you take them in cash or reinvest them.
However, distributions declared in December and paid in January are taxable
as if they were paid on December 31.
For federal tax purposes, each fund's income and short-term capital gain
distributions are taxed as dividends; long-term capital gain distributions,
if any, are taxed as long-term capital gains.
Every January, the transfer agent will send you and the Internal Revenue
Service ( IRS ) a statement showing the taxable distributions paid
to you in the previous year.
TAXES ON TRANSACTIONS. Your redemptions-including exchanges-are subject to
capital gains tax. A capital gain or loss is the difference between the
cost of your shares and the price you receive when you sell them.
Whenever you sell shares of a fund, the transfer agent will send you a
confirmation statement showing how many shares you sold and at what price.
You will also receive a transaction statement monthly. However, it is up to
you or your tax preparer to determine whether this sale resulted in a
capital gain and, if so, the amount of tax to be paid. BE SURE TO KEEP YOUR
REGULAR ACCOUNT STATEMENTS; the information they contain will be essential
in calculating the amount of your capital gains.
"BUYING A DIVIDEND." If you buy shares just before a fund deducts a capital
gain distribution or dividend distribution, as applicable, from its NAV,
you will pay the full price for the shares and then receive a portion of
the price back in the form of a taxable distribution.
There are tax requirements that all funds must follow in order to avoid
federal taxation. In its effort to adhere to these requirements, a fund may
have to limit its investment activity in some types of instruments.
It is anticipated that most investors in the funds will be "political
subdivisions" of the State of North Carolina. Section 115(1) of the
Internal Revenue Code, as amended (Internal Revenue Code), provides in part
that gross income does not include income derived from the exercise of any
essential governmental function and accruing to a state or any political
subdivision thereof. The receipt of revenue from each fund for the benefit
of a political subdivision investing in a fund may constitute an exercise
of an essential governmental function. A portion of the earnings derived
from funds which are subject to the arbitrage limitations or rebate
requirements of the Internal Revenue Code may be required to be paid to the
U.S. Treasury as computed in accordance with such requirements.
TRANSACTION DETAILS
EACH FUND IS OPEN FOR BUSINESS and its NAV is calculated each day that both
the Federal Reserve Bank of Richmond (Richmond Fed) and First Union
National Bank of North Carolina (First Union), the funds' custodian,
are open.
The following holiday closings have been scheduled for 199 6 : New
Year's Day, Dr. Martin Luther King Jr. Day (observed), President's Day
(observed), Memorial Day (observed), Independence Day, Labor Day, Columbus
Day (observed), Veteran's Day, Thanksgiving Day and Christmas Day.
Although FMR expects the same holiday schedule to be observed in the
future, the Richmond Fed or First Union may modify its holiday schedule at
any time. On any day that the Richmond Fed or First Union closes early, or
as permitted by the SEC, the right is reserved to advance the time on that
day by which purchase and redemption orders must be received.
To the extent that portfolio securities are traded in other markets on days
when the Richmond Fed or First Union is closed, each fund's NAV may be
affected on days when investors do not have access to the fund to purchase
or redeem shares.
EACH FUND'S NAV is the value of a single share. The NAV is computed by
adding the value of the fund's investments, cash, and other assets,
subtracting its liabilities, and dividing the result by the number of
shares outstanding. Cash Portfolio values its portfolio securities on the
basis of amortized cost. This method minimizes the effect of changes in a
security's market value and helps Cash Portfolio maintain a stable $1.00
share price.
Term Portfolio's assets are valued primarily on the basis of market
quotations. If quotations are not readily available, assets are valued by a
method that the Board of Trustees believes accurately reflects fair value.
THE OFFERING PRICE (price to buy one share) and REDEMPTION PRICE (price to
sell one share) of each fund are its NAV.
WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to certify that
your social security or taxpayer identification number is correct and that
you are not subject to 31% backup withholding for failing to report income
to the IRS. If you violate IRS regulations, the IRS can require a fund to
withhold 31% of your taxable distributions and redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Fidelity and Sterling may
only be liable for losses resulting from unauthorized transactions if they
do not follow reasonable procedures designed to verify the identity of the
caller. Sterling will request personalized security codes or other
information, and may also record calls. You should verify the
accuracy of the confirmation statements immediately after receipt. If you
do not want the ability to redeem and exchange by telephone, call Sterling
for instructions. Additional documentation may be required from
corporations, associations and certain fiduciaries.
IF YOU ARE UNABLE TO REACH STERLING BY PHONE (for example, during periods
of unusual market activity), consider placing your order by mail.
EACH FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period
of time. Each fund also reserves the right to reject any specific purchase
order, including certain purchases by exchange. See "Exchange Restrictions"
on page . Purchase orders may be refused if, in FMR's opinion, they would
disrupt management of a fund.
TO ALLOW FMR TO MANAGE THE FUNDS MOST EFFECTIVELY, you are urged to
initiate all trades as early in the day as possible and to notify Sterling
in advance of transactions in excess of $5 million.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your shares will be purchased at the
next NAV calculated after your order is received and accepted by
Sterling . Note the following:
(small solid bullet) All of your purchases must be made in U.S. dollars and
checks must be drawn on U.S. banks.
(small solid bullet) The funds do not accept cash.
(small solid bullet) Cash Portfolio reserves the right to limit the number
of checks processed at one time.
(small solid bullet) If your check does not clear, your purchase will be
canceled and you could be liable for any losses or fees Cash Portfolio or
the transfer agent has incurred.
(small solid bullet) For Cash Portfolio, purchase orders received by
Sterling before 12:00 p.m. Eastern time will earn the dividend declared
for that day; purchase orders received by Sterling between 12:00 p.m.
and 4:00 p.m. Eastern time will begin to earn dividends the following
business day.
(small solid bullet) For Term Portfolio, purchase orders received by
Sterling before 4:00 p.m. Eastern time will begin to earn dividends
the following business day.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the
next NAV calculated after your order is received and accepted by
Sterling . Note the following:
(small solid bullet) N ormally, redemption proceeds will be mailed to
you on the next business day, but if making immediate payment could
adversely affect a fund, it may take up to seven days to pay you.
(small solid bullet) For Cash Portfolio, for redemption orders placed
before 12:00 p.m. Eastern time, you will not earn that day's dividend; for
redemption orders received between 12:00 p.m. and 4:00 p.m. Eastern time,
you will earn that day's dividend.
(small solid bullet) For Term Portfolio, for redemption orders placed
before 4:00 p.m. Eastern time, you will earn that day's dividend.
(small solid bullet) For Term Portfolio, shares redeemed on a Friday
or prior to a holiday will continue to earn dividends until the next
business day.
(small solid bullet) A fund may withhold redemption proceeds until it is
reasonably assured that investments credited to your account have
been received and collected.
(small solid bullet) If you sell shares of Cash Portfolio by writing a
check and the amount of the check is greater than the value of your
account, your check will be returned to you and you may be subject to
additional charges.
When the New York Stock Exchange is closed (or when trading is restricted)
for any reason other than its customary weekend or holiday closings, or
under any emergency circumstances as determined by the SEC to merit such
action, a fund may suspend redemption or postpone payment dates. In cases
of suspension of the right of redemption, the request for redemption may
either be withdrawn or payment may be made based on the NAV next determined
after the termination of the suspension.
THE TRANSFER AGENT MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
EXCHANGE RESTRICTIONS
As a shareholder you have the privilege of exchanging shares of Cash
Portfolio for shares of Term Portfolio, and vice versa.
An exchange involves the redemption of all or a portion of the shares of
one fund and the purchase of shares of another fund.
BY TELEPHONE. Exchanges may be requested on any day a fund is open for
business by calling Sterling toll-free at 1-800-222-3232 or locally at
1-704-372-8798 before 4:00 p.m. Eastern time.
WHEN YOU PLACE AN ORDER TO EXCHANGE SHARES, shares will be redeemed at the
NAV next determined on the business day on which your order is received
and accepted by Sterling. You should note that, under certain
circumstances, a fund may take up to seven days to make redemption proceeds
available for the exchange purchase of shares of another fund. In addition,
please note the following:
(small solid bullet) Exchanges will not be permitted until a completed and
signed account application is on file.
(small solid bullet) The fund you are exchanging into must be registered
for sale in your state.
(small solid bullet) You may only exchange between accounts that are
registered in the same name and address.
(small solid bullet) Before exchanging into a fund, read its prospectus.
(small solid bullet) You begin to earn dividends in the acquired fund on
the business day following receipt by Sterling of the exchange
request .
(small solid bullet) When exchanging from Cash Portfolio to Term
Portfolio, you will purchase shares of Term Portfolio on the day your
exchange request is accepted by Sterling, and you will receive the NAV next
determined that day for Term Portfolio. You will redeem shares of Cash
Portfolio at the NAV determined at that time to pay for the purchase of
Term Portfolio shares. You will receive the income dividend declared by
Cash Portfolio on the business day the exchange request is accepted by
Sterling and will receive the income dividend declared by Term Portfolio on
the following business day. However, if your exchange request is accepted
by Sterling on a Friday or prior to a holiday, you will continue to earn
dividends from Cash Portfolio until the next business day.
(small solid bullet) When e xchang ing from Term Portfolio to
Cash Portfolio , shares of Term Portfolio will earn dividends through the
date of redemption; however, exchange orders from Term Portfolio accepted
by Sterling on a Friday or prior to a holiday will continue to earn
dividends until the next business day.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Currently, there is no limit on the number of
exchanges out of a fund, nor are there any administrative or redemption
fees applicable to exchanges out of a fund.
(small solid bullet) Because excessive trading can hurt fund performance
and shareholders, each fund reserves the right to temporarily or
permanently terminate the exchange privilege .
(small solid bullet) Each fund reserves the right to refuse exchange
purchases by any person or group if, in FMR's judgment, the fund would be
unable to invest the money effectively in accordance with its investment
objective and policies, or would otherwise potentially be adversely
affected.
(small solid bullet) Your exchanges may be restricted or refused if a fund
receives or anticipates simultaneous orders affecting significant portions
of the fund's assets. In particular, a pattern of exchanges that coincides
with a "market timing" strategy may be disruptive to a fund.
Although the funds will attempt to give you prior notice whenever they are
reasonably able to do so, they may impose these restrictions at any time.
The funds reserve the right to terminate or modify the exchange privilege
in the future.
No dealer, sales representative or any other person has been authorized to
give any information or to make any representations, other than those
contained in this Prospectus and in the related SAI, in connection
with the offer contained in this Prospectus. If given or made, such other
information or representations must not be relied upon as having been
authorized by the funds, FDC, or Sterling. This Prospectus and the
related SAI do not constitute an offer by the funds, FDC, or by
Sterling to sell or to buy shares of the fund to any person to whom it is
unlawful to make such offer.
The North Carolina Capital Management Trust:
Cash Portfolio and Term Portfolio
Cross Reference Sheet
Form N-1A Item Number
Part B Statement of Additional Information Caption
10a,b Cover Page
11 Cover Page
12 *
13a,b,c Investment Policies and Limitations
d Portfolio Transactions
14a,b Trustees and Officers
c Trustees and Officers
15a Description of the Trust
b Description of the Trust
c Trustees and Officers
16a(i) FMR
a(ii) Trustees and Officers
a(iii),b Management Contract
c Management Contract
d *
e *
f Distribution and Service Plan
g *
h Description of the Trust
i Contracts with FMR Affiliates
17a Portfolio Transactions
b Portfolio Transactions
c Portfolio Transactions
d *
e *
18a Description of the Trust
b *
19a Additional Purchase, Exchange and Redemption Information
b Valuation
c *
20 Distributions and Taxes
21a(i,ii) Contracts with FMR Affiliates
a(iii),b,c *
22a Performance
b Performance
23 Financial Statements for the fiscal year ended June 30, 1995 are
incorporated herein by reference.
* Not applicable
THE NORTH CAROLINA CAPITAL MANAGEMENT TRUST:
CASH PORTFOLIO
TERM PORTFOLIO
STATEMENT OF ADDITIONAL INFORMATION
NOVEMBER 1, 1995
This Statement of Additional Information (SAI) is not a prospectus but
should be read in conjunction with the funds' current Prospectus (dated
November 1, 1995). Please retain this document for future reference. The
funds' financial statements and financial highlights, included in the
Annual Report, for the fiscal year ended June 30, 1995, are incorporated
herein by reference. To obtain an additional copy of the Prospectus or
Annual Report, or this SAI, please call Sterling Capital Distributors, Inc.
in Charlotte, North Carolina at the appropriate number listed below:
(medium solid bullet)<UNDEF>Toll-free 1-800-222-3232
(medium solid bullet)<UNDEF>or locally 1-704-372-8798
TABLE OF CONTENTS PAGE
Investment Policies and Limitations
Portfolio Transactions
Valuation
Performance
Additional Purchase, Exchange and Redemption Information
Distributions and Taxes
FMR
Trustees and Officers
Management Contracts
Contracts with FMR Affiliates
Distribution and Service Plan s
Description of the Trust
Financial Statements
Appendix
INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
SUB-ADVISER
FMR Texas, Inc. (FMR Texas)
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
DISTRIBUTION AND SERVICE AGENT
Sterling Capital Distributors, Inc. (Sterling)
TRANSFER AGENT
Fidelity Investments Institutional Operations Company (FIIOC)
CUSTODIAN
First Union National Bank of North Carolina (First Union)
NC-ptb-1195
INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth in the
Prospectus. Unless otherwise noted, whenever an investment policy or
limitation states a maximum percentage of a fund's assets that may be
invested in any security or other asset, or sets forth a policy regarding
quality standards, such standard or percentage limitation will be
determined immediately after and as a result of a fund's acquisition of
such security or other asset. Accordingly, any subsequent change in values,
net assets, or other circumstances will not be considered when determining
whether the investment complies with a fund's investment policies and
limitations.
A fund's fundamental investment policies and limitations cannot be changed
without approval by a "majority of the outstanding voting securities" (as
defined in the Investment Company Act of 1940 ( the 1940 Act)) of a
fund. However, except for the fundamental investment limitations set forth
below, the investment policies and limitations described in this SAI are
not fundamental and may be changed without shareholder approval.
CASH PORTFOLIO
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) purchase the securities of any issuer (other than obligations issued or
guaranteed as to principal and interest by the government of the United
States, its agencies or instrumentalities), if, as a result, more than 5%
of the fund's total assets would be invested in the securities of such
issuer, provided, however, that in the case of certificates of deposit and
bankers' acceptances , up to 25% of the fund's total assets may be
invested without regard to such 5% limitation, but shall instead be subject
to a 10% limitation;
(2) pledge assets except that the fund may pledge not more than one-third
of its total assets (taken at current value) to secure borrowings made in
accordance with limitation (5) below;
(3) make short sales of securities;
(4) purchase securities on margin (but the fund may obtain such credits as
may be necessary for the clearance of purchases and sales of securities);
(5) borrow money, except from a bank for temporary or emergency purposes
(not for leveraging or investment) in an amount not to exceed one-third of
the current value of the total assets of the fund (including the amount
borrowed) less its liabilities (not including the amount borrowed) at the
time the borrowing is made. (If at any time the fund's borrowings exceed
this limitation due to a decline in net assets, such borrowings will be
promptly (within three days) reduced to the extent necessary to comply with
the limitation. The fund will borrow only to facilitate redemptions
requested by shareholders which might otherwise require untimely
disposition of portfolio securities and will not purchase securities while
borrowings are outstanding);
(6) act as an underwriter (except as it may be deemed such in a sale of
restricted securities);
(7) knowingly purchase a security which is subject to legal or contractual
restrictions on resale or for which there is no readily available market
quotation or engage in a "qualified repurchase agreement" maturing in more
than seven days with respect to any security if, as a result, more than 10%
of the fund's total assets (taken at current value) would be invested in
such securities (investments in instruments of smaller banks which are not
readily marketable will be considered to be within this 10% limitation);
(8) purchase the securities of any issuer (other than obligations issued or
guaranteed as to principal and interest by the government of the United
States, its agencies or instrumentalities) if, as a result, more than 25%
of the fund's total assets would be invested in the securities of one or
more issuers having their principal business activities in the same
industry, provided, however, that it may invest more than 25% of its total
assets in the obligations of banks. Neither finance companies as a group
nor utility companies as a group are considered a single industry for
purposes of this policy;
(9) buy or sell real estate;
(10) buy or sell commodities, or commodity (futures) contracts;
(11) make loans to other persons, except (i) by the purchase of debt
obligations in which the fund is authorized to invest in accordance with
its investment objective, and (ii) by engaging in "qualified repurchase
agreements. " In addition, the fund may lend its portfolio securities
to broker-dealers or other institutional investors, provided that the
borrower delivers cash or cash equivalent collateral to the fund and agrees
to maintain such collateral so that it equals at least 100% of the value of
the securities loaned. Any such securities loan may not be made if, as a
result thereof, the aggregate value of all securities loaned exceeds 33
1/3% of the total assets of the fund;
(12) purchase the securities of other investment companies or investment
trusts;
(13) purchase the securities of a company if such purchase, at the time
thereof, would cause more than 5% of the value of the fund's total assets
to be invested in securities of companies, which, including
predecessors, have a record of less than three years' continuous operation;
(14) invest in oil, gas, or other mineral exploration or development
programs;
(15) purchase or retain the securities of any issuer any of whose officers,
directors, or security holders is a Trustee, director, or officer of the
fund or of its investment adviser, if or so long as the Trustees,
directors, and officers of the fund and of its investment adviser together
own beneficially more than 5% of any class of securities of such issuer;
(16) write or purchase any put or call option; or
(17) invest in companies for the purpose of exercising control or
management.
Investment limitation (5) is construed in conformity with the 1940 Act;
accordingly, "three days" means three business days, exclusive of Sundays
and holidays.
THE FOLLOWING LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED WITHOUT
SHAREHOLDER APPROVAL.
(I) The fund does not currently intend to purchase a security (other than
a security issued or guaranteed by the U.S. Government or any of its
agencies or instrumentalities) if, as a result, more than 5% of its total
assets would be invested in the securities of a single issuer; provided
that, with respect to certificates of deposit and bankers' acceptances, the
fund may invest up to 10% of its total assets in the first tier securities
of a single issuer for up to three business days.
(II) The fund does not currently intend to engage in securities lending
and will do so only when the Trustees determine that it is advisable and
appropriate.
For the fund's policies on quality and maturity, see the section entitled
"Quality and Maturity" on page .
TERM PORTFOLIO
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) purchase the securities of any issuer (except the United States
Government, its agencies or instrumentalities or securities which are
backed by the full faith and credit of the United States) if, as a result,
(a) more than 5% of its total assets would be invested in the securities of
such issuer, provided, however, that up to 25% of its total assets may be
invested without regard to such 5% limitation; or (b) the fund would hold
more than 10% of the voting securities of any issuer;
(2) make short sales of securities;
(3) purchase any securities on margin, except for such short-term credits
as are necessary for the clearance of transactions, or write or purchase
any put or call options or any combinations thereof;
(4) borrow money, except from a bank for temporary or emergency purposes
and not for investment purposes, and then in an amount not exceeding 33
1/3% of the value of the fund's total assets at the time of borrowing; if
at any time the fund's borrowings exceed this limitation due to a decline
in net assets, such borrowings will be promptly (within three days) reduced
to the extent necessary to comply with the limitation (the fund will not
purchase securities for investment while borrowings equaling 5% or more of
its total assets are outstanding);
(5) underwrite any issue of securities, except to the extent that the
purchase of bonds in accordance with the fund's investment objective,
policies, and limitations, either directly from the issuer, or from an
underwriter for an issuer, may be deemed to be underwriting;
(6) knowingly purchase or otherwise acquire any securities which are
subject to legal or contractual restrictions on resale or for which there
is no readily available market or engage in any repurchase agreements which
mature in more than seven days if, as a result, more than 10% of the value
of its net assets would be invested in all such securities;
(7) purchase the securities of any issuer (except the United States
Government, its agencies or instrumentalities or securities which are
backed by the full faith and credit of the United States) if, as a result,
more than 25% of total fund assets would be invested in any one industry;
(8) purchase or sell real estate, but this shall not prevent the fund from
investing in bonds or other obligations secured by real estate or interests
therein;
(9) purchase or sell commodities or commodity contracts;
(10) make loans, except (i) by the purchase of a portion of an issue of
debt securities in accordance with its investment objective, policies, and
limitations, and (ii) by engaging in repurchase agreements and loan
transactions with respect to such debt obligations if, as a result thereof,
not more than 33 1/3% of the fund's total assets (taken at current value)
would be subject to loan transactions;
(11) purchase the securities of other investment companies or investment
trusts;
(12) invest in oil, gas or other mineral exploration or development
programs; or
(13) pledge, mortgage, or hypothecate its assets, except that, to secure
borrowings permitted by limitation (4) above, it may pledge
securities having a market value at the time of pledge not exceeding 33
1/3% of the value of the fund's total assets.
Investment limitation (4) is construed in conformity with the 1940 Act;
accordingly, "three days" means three business days, exclusive of Sundays
and holidays.
THE FOLLOWING LIMITATION IS NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(I) The fund does not currently intend to engage in securities lending and
will do so only when the Trustees determine that it is advisable and
appropriate.
Each fund's investments must be consistent with its investment objective
and policies. Accordingly, not all of the security types and investment
techniques discussed below are eligible investments for each of the funds.
AFFILIATED BANK TRANSACTIONS. A fund may engage in transactions with
financial institutions that are, or may be considered to be, "affiliated
persons" of the fund under the 1940 Act. These transactions may include
repurchase agreements with custodian banks; short-term obligations of, and
repurchase agreements with, the 50 largest U.S. banks (measured by
deposits); municipal securities; U.S. Government securities with affiliated
financial institutions that are primary dealers in these securities; and
short-term borrowings. In accordance with exemptive orders issued by the
Securities and Exchange Commission (SEC), the Board of Trustees has
established and periodically reviews procedures applicable to transactions
involving affiliated financial institutions.
DELAYED-DELIVERY TRANSACTIONS. Each fund may buy and sell securities on a
delayed-delivery or when-issued basis. These transactions involve a
commitment by a fund to purchase or sell specific securities at a
predetermined price or yield, with payment and delivery taking place after
the customary settlement period for that type of security. Typically, no
interest accrues to the purchaser until the security is delivered. Term
Portfolio may receive fees for entering into delayed-delivery transactions.
When purchasing securities on a delayed-delivery basis, each fund assumes
the rights and risks of ownership, including the risk of price and yield
fluctuations. Because a fund is not required to pay for securities until
the delivery date, these risks are in addition to the risks associated with
the fund's other investments. If a fund remains substantially fully
invested at a time when delayed-delivery purchases are outstanding, the
delayed-delivery purchases may result in a form of leverage. When
delayed-delivery purchases are outstanding, the fund will set aside
appropriate liquid assets in a segregated custodial account to cover its
purchase obligations. When a fund has sold a security on a delayed-delivery
basis, the fund does not participate in further gains or losses with
respect to the security. If the other party to a delayed-delivery
transaction fails to deliver or pay for the securities, the fund could miss
a favorable price or yield opportunity, or could suffer a loss.
Each fund may renegotiate delayed-delivery transactions after they are
entered into, and may sell underlying securities before they are delivered,
which may result in capital gains or losses.
ILLIQUID INVESTMENTS are investments that cannot be sold or disposed of in
the ordinary course of business at approximately the prices at which they
are valued. Under the supervision of the Board of Trustees, FMR determines
the liquidity of a fund's investments and, through reports from FMR, the
Board monitors investments in illiquid instruments. In determining the
liquidity of a fund's investments, FMR may consider various factors,
including (1) the frequency of trades and quotations, (2) the number of
dealers and prospective purchasers in the marketplace, (3) dealer
undertakings to make a market, (4) the nature of the security (including
any demand or tender features), and (5) the nature of the marketplace for
trades (including the ability to assign or offset the fund's rights and
obligations relating to the investment).
Investments currently considered by the funds to be illiquid include
repurchase agreements not entitling the holder to payment of principal and
interest within seven days. Also, FMR may determine some
government-stripped fixed-rate mortgage-backed securities, restricted
securities and time deposits to be illiquid.
In the absence of market quotations, illiquid investments are valued for
Cash Portfolio for purposes of monitoring amortized cost valuation at fair
value , and priced for Term Portfolio at fair value , as
determined in good faith by a committee appointed by the Board of Trustees.
If through a change in values, net assets, or other circumstances, a fund
were in a position where more than 10% of its net assets was invested in
illiquid securities, it would seek to take appropriate steps to protect
liquidity.
MONEY MARKET SECURITIES are high-quality, short-term obligations. Some
money market securities employ a trust or other similar structure to modify
the maturity, price characteristics, or quality of financial assets. For
example, put features can be used to modify the maturity of a
security , or interest rate adjustment features can be used to
enhance price stability. If the structure does not perform as intended,
adverse tax or investment consequences may result. Neither the Internal
Revenue Service (IRS) nor any other regulatory authority has ruled
definitively on certain legal issues presented by structured securities.
Future tax or other regulatory determinations could adversely affect the
value, liquidity, or tax treatment of the income received from these
securities or the nature and timing of distributions made by the funds.
PUT FEATURES entitle the holder to sell a security back to the issuer or a
third party at any time or at specified intervals. They are subject to the
risk that the put provider is unable to honor the put feature (purchase the
security). Put providers often support their ability to buy securities on
demand by obtaining letters of credit or other guarantees from other
entities. Demand features, standby commitments, and tender options are
types of put features.
QUALITY AND MATURITY (CASH PORTFOLIO ONLY). Pursuant to procedures adopted
by the Board of Trustees, the fund may purchase only high-quality
securities that FMR believes present minimal credit risks. To be considered
high quality, a security must be rated in accordance with applicable rules
in one of the two highest categories for short-term securities by at least
two nationally recognized rating services (or by one, if only one rating
service has rated the security); or, if unrated, judged to be of equivalent
quality by FMR.
High-quality securities are divided into "first tier" and "second tier"
securities. First tier securities are those deemed to be in the highest
rating category (e.g., Standard & Poor's A-1), and second tier securities
are those deemed to be in the second highest rating category (e.g.,
Standard & Poor's A-2). Split-rated securities may be determined to be
either first tier or second tier based on applicable regulations.
The fund may not invest more than 5% of its total assets in second tier
securities. In addition, the fund may not invest more than 1% of its total
assets or $1 million (whichever is greater) in the second tier securities
of a single issuer.
The fund currently intends to limit its investments to securities with
remaining maturities of 397 days or less, and to maintain a dollar-weighted
average maturity of 90 days or less. When determining the maturity of a
security, the fund may look to an interest rate reset or demand feature.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund purchases a
security and simultaneously commits to sell that security back to the
original seller at an agreed-upon price. The resale price reflects the
purchase price plus an agreed-upon incremental amount which is unrelated to
the coupon rate or maturity of the purchased security. To protect the fund
from the risk that the original seller will not fulfill its obligation, the
securities are held in an account of the fund at a bank, marked-to-market
daily, and maintained at a value at least equal to the sale price plus the
accrued incremental amount. While it does not presently appear possible to
eliminate all risks from these transactions (particularly the possibility
that the value of the underlying security will be less than the resale
price, as well as delays and costs to a fund in connection with bankruptcy
proceedings), it is each fund's current policy, as set forth in North
Carolina General Statute 159-30(c), to engage in repurchase agreement
transactions with a broker or dealer which is a dealer recognized as a
primary dealer by the Federal Reserve Bank, or any commercial bank, trust
company or national banking association, the deposits of which are insured
by the Federal Deposit Insurance Corporation (FDIC) or any successor
thereof.
RESTRICTED SECURITIES generally can be sold in privately negotiated
transactions, pursuant to an exemption from registration under the
Securities Act of 1933, or in a registered public offering. Where
registration is required, a fund may be obligated to pay all or part of the
registration expense and a considerable period may elapse between the time
it decides to seek registration and the time it may be permitted to sell a
security under an effective registration statement. If, during such a
period, adverse market conditions were to develop, a fund might obtain a
less favorable price than prevailed when it decided to seek registration of
the security. However, in general, Cash Portfolio anticipates holding
restricted securities to maturity or selling them in an exempt transaction.
SOURCES OF CREDIT OR LIQUIDITY SUPPORT. FMR may rely on its evaluation of
the credit of a bank or another entity in determining whether to purchase a
security supported by a letter of credit guarantee, insurance or other
source of credit or liquidity.
STRIPPED GOVERNMENT SECURITIES. Stripped securities are created by
separating the income and principal components of a debt instrument and
selling them separately. U.S. Treasury STRIPS (Separate Trading of
Registered Interest and Principal of Securities) are created when the
coupon payments and the principal payment are stripped from an outstanding
Treasury bond by the Federal Reserve Bank. Bonds issued by
government agencies also may be stripped in this fashion.
STRIPPED MORTGAGE-BACKED SECURITIES are created when a U.S. Government
agency or a financial institution separates the interest and principal
components of a mortgage-backed security and sells them as individual
securities. The holder of the "principal-only" security (PO) receives the
principal payments made by the underlying mortgage-backed security, while
the holder of the "interest-only" security (IO) receives interest payments
from the same underlying security.
The prices of stripped mortgage-backed securities may be particularly
affected by changes in interest rates. As interest rates fall, prepayment
rates tend to increase, which tends to reduce prices of IOs and increase
prices of POs. Rising interest rates can have the opposite effect.
VARIABLE AND FLOATING RATE SECURITIES provide for periodic adjustments of
the interest rate paid on the security. Variable rate securities provide
for a specified periodic adjustment in the interest rate, while floating
rate securities have interest rates that change whenever there is a change
in a designated benchmark rate. Some variable or floating rate securities
have put features.
ZERO COUPON BONDS. Zero coupon bonds do not make interest payments;
instead, they are sold at a deep discount from their face value and are
redeemed at face value when they mature. Because zero coupon bonds do not
pay current income, their prices can be very volatile when interest rates
change. In calculating its dividends, a fund takes into account as income a
portion of the difference between a zero coupon bond's purchase price and
its face value.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of each fund by FMR pursuant to authority contained in the
management contract. On behalf of Cash Portfolio, FMR has granted
investment management authority to the sub-adviser (see the section
entitled "Management Contracts"), and the sub-adviser is authorized to
place orders for the purchase and sale of portfolio securities, and will do
so in accordance with the policies described below. FMR is also responsible
for the placement of transaction orders for other investment companies and
accounts for which it or its affiliates act as investment adviser.
Securities purchased and sold by Cash Portfolio generally will be traded on
a net basis (i.e., without commission). In selecting broker-dealers,
subject to applicable limitations of the federal securities laws, FMR
considers various relevant factors, including, but not limited to, the size
and type of the transaction; the nature and character of the markets for
the security to be purchased or sold; the execution efficiency, settlement
capability, and financial condition of the broker-dealer firm; the
broker-dealer's execution services rendered on a continuing basis; and the
reasonableness of any commissions.
The funds may execute portfolio transactions with broker-dealers who
provide research and execution services to the funds or other accounts over
which FMR or its affiliates exercise investment discretion. Such services
may include advice concerning the value of securities; the advisability of
investing in, purchasing, or selling securities; and the availability of
securities or the purchasers or sellers of securities. In addition, such
broker-dealers may furnish analyses and reports concerning issuers,
industries, securities, economic factors and trends, portfolio strategy,
and performance of accounts; effect securities transactions, and perform
functions incidental thereto (such as clearance and settlement). FMR
maintains a listing of broker-dealers who provide such services on a
regular basis. However, as many transactions on behalf of Cash Portfolio
are placed with broker-dealers (including broker-dealers on the list)
without regard to the furnishing of such services, it is not possible to
estimate the proportion of such transactions directed to such
broker-dealers solely because such services were provided. The selection of
such broker-dealers generally is made by FMR (to the extent possible
consistent with execution considerations) based upon the quality of
research and execution services provided.
The receipt of research from broker-dealers that execute transactions on
behalf of the funds may be useful to FMR in rendering investment management
services to the funds or its other clients, and conversely, such research
provided by broker-dealers who have executed transaction orders on behalf
of other FMR clients may be useful to FMR in carrying out its obligations
to the funds. The receipt of such research has not reduced FMR's normal
independent research activities; however, it enables FMR to avoid the
additional expenses that could be incurred if FMR tried to develop
comparable information through its own efforts.
Subject to applicable limitations of the federal securities laws,
broker-dealers may receive commissions for agency transactions that are in
excess of the amount of commissions charged by other broker-dealers in
recognition of their research and execution services. In order to cause
each fund to pay such higher commissions, FMR must determine in good faith
that such commissions are reasonable in relation to the value of the
brokerage and research services provided by such executing broker-dealers,
viewed in terms of a particular transaction or FMR's overall
responsibilities to the funds and its other clients. In reaching this
determination, FMR will not attempt to place a specific dollar value on the
brokerage and research services provided, or to determine what portion of
the compensation should be related to those services.
FMR is authorized to use research services provided by and to place
portfolio transactions with brokerage firms that have provided assistance
in the distribution of shares of the funds or shares of other Fidelity
funds to the extent permitted by law. FMR may use research services
provided by and place agency transactions with Fidelity Brokerage Services,
Inc. (FBSI) and Fidelity Brokerage Services (FBS), subsidiaries of FMR
Corp., if the commissions are fair, reasonable, and comparable to
commissions charged by non-affiliated, qualified brokerage firms for
similar services. From September 1992 through December 1994, FBS operated
under the name Fidelity Brokerage Services Limited, Inc. (FBSL). As of
January 1995, FBSL was converted to an unlimited liability company and
assumed the name FBS. Prior to September 4, 1992, FBSL operated under the
name Fidelity Portfolio Services, Ltd. (FPSL) as a wholly owned subsidiary
of Fidelity International Limited (FIL). Edward C. Johnson 3d is Chairman
of FIL. Mr. 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.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members of
national securities exchanges from executing exchange transactions for
accounts which they or their affiliates manage, unless certain requirements
are satisfied. Pursuant to such requirements, the Board of Trustees has
authorized FBSI to execute portfolio transactions on national securities
exchanges in accordance with approved procedures and applicable SEC rules.
Each fund's Trustees periodically review FMR's performance of its
responsibilities in connection with the placement of portfolio transactions
on behalf of the funds and review the commissions paid by each fund over
representative periods of time to determine if they are reasonable in
relation to the benefits to the fund.
For the fiscal periods ended June 30, 1995 and 1994, Term Portfolio's
turnover rates were 519 % and 494%, respectively. Because a high
turnover rate increases transaction costs and may increase taxable gains,
FMR carefully weighs the anticipated benefits of short-term investing
against these consequences.
For fiscal 1995, 1994, and 1993, Cash Portfolio and Term Portfolio
paid no brokerage commissions.
During fiscal 1995, the funds paid no fees to brokerage firms that provided
research services.
From time to time the Trustees will review whether the recapture for the
benefit of the funds of some portion of the brokerage commissions or
similar fees paid by the funds on portfolio transactions is legally
permissible and advisable. Each fund seeks to recapture soliciting
broker-dealer fees on the tender of portfolio securities, but at present no
other recapture arrangements are in effect. The Trustees intend to continue
to review whether recapture opportunities are available and are legally
permissible and, if so, to determine in the exercise of their business
judgment whether it would be advisable for each fund to seek such
recapture.
Investment decisions for each fund are made independently from those of
other funds managed by FMR or accounts managed by FMR affiliates. It
sometimes happens that the same security is held in the portfolio of more
than one of these funds or accounts. Simultaneous transactions are
inevitable when several funds and accounts are managed by the same
investment adviser, particularly when the same security is suitable for the
investment objective of more than one fund or account.
When two or more funds are simultaneously engaged in the purchase or sale
of the same security, the prices and amounts are allocated in accordance
with procedures believed to be appropriate and equitable for each fund. In
some cases this system could have a detrimental effect on the price or
value of the security as far as each fund is concerned. In other cases,
however, the ability of the funds to participate in volume transactions
will produce better executions and prices for the funds. It is the current
opinion of the Trustees that the desirability of retaining FMR as
investment adviser to each fund outweighs any disadvantages that may be
said to exist from exposure to simultaneous transactions.
VALUATION
Fidelity Service Company ( FSC ) normally determines Cash
Portfolio's net asset value per share (NAV) at 12:00 p.m. and 4:00 p.m.
Eastern time and Term Portfolio's NAV at 4:00 p.m. Eastern time. The
valuation of portfolio securities is determined as of these times for the
purpose of computing each fund's NAV.
For CASH PORTFOLIO, portfolio securities and other assets are valued on the
basis of amortized cost. This technique involves initially valuing an
instrument at its cost as adjusted for amortization of premium or accretion
of discount rather than its current market value. The amortized cost value
of an instrument may be higher or lower than the price the fund would
receive if it sold the instrument.
During periods of declining interest rates, Cash Portfolio's yield based on
amortized cost valuation may be higher than would result if the fund used
market valuations to determine its NAV. The converse would apply during
periods of rising interest rates.
Valuing Cash Portfolio's investments on the basis of amortized cost and use
of the term "money market fund" are permitted pursuant to Rule 2a-7 under
the 1940 Act. Cash Portfolio must adhere to certain conditions under Rule
2a-7, as summarized in the section entitled "Quality and Maturity" on page
.
The Board of Trustees oversees FMR's adherence to the provisions of Rule
2a-7, and has established procedures designed to stabilize Cash Portfolio's
NAV at $1.00. At such intervals as they deem appropriate, the Trustees
consider the extent to which NAV calculated by using market valuations
would deviate from $1.00 per share. If the Trustees believe that a
deviation from Cash Portfolio's amortized cost per share may result in
material dilution or other unfair results to shareholders, the Trustees
have agreed to take such corrective action, if any, as they deem
appropriate to eliminate or reduce, to the extent reasonably practicable,
the dilution or unfair results. Such corrective action could include
selling portfolio instruments prior to maturity to realize capital gains or
losses or to shorten average portfolio maturity; withholding dividends;
redeeming shares in kind; establishing NAV by using available market
quotations; and such other measures as the Trustees may deem
appropriate.
For TERM PORTFOLIO, portfolio securities are valued by various methods
depending on the primary market or exchange on which they trade.
Fixed-income securities and other assets for which market quotations are
readily available may be valued at market values determined by such
securities' most recent bid prices (sales prices if the principal market is
an exchange) in the principal market in which they normally are traded, as
furnished by recognized dealers in such securities or assets.
Fixed-income securities may also be valued on the basis of information
furnished by a pricing service that uses a valuation matrix which
incorporates both dealer-supplied valuations and electronic data processing
techniques. Use of pricing services has been approved by the Board of
Trustees. A number of pricing services are available, and the Trustees, on
the basis of an evaluation of these services, may use various pricing
services or discontinue the use of any pricing service.
Short-term securities are valued either at amortized cost or at original
cost plus accrued interest, both of which approximate current value.
Securities and other assets for which there is no readily available market
value are valued in good faith by a committee appointed by the Board of
Trustees. The procedures set forth above need not be used to determine the
value of the securities owned by the fund if, in the opinion of a committee
appointed by the Board of Trustees, some other method would more accurately
reflect the fair market value of such securities.
PERFORMANCE
The funds may quote performance in various ways. All performance
information supplied by the funds in advertising is historical and is not
intended to indicate future returns. Term Portfolio's share price, and each
fund's yield and total return fluctuate in response to market conditions
and other factors, and the value of Term Portfolio's shares when redeemed
may be more or less than their original cost.
YIELD CALCULATIONS. To compute Cash Portfolio's yield for a period, the net
change in value of a hypothetical account containing one share reflects the
value of additional shares purchased with dividends from the one original
share and dividends declared on both the original share and any additional
shares. The net change is then divided by the value of the account at the
beginning of the period to obtain a base period return. This base period
return is annualized to obtain a current annualized yield. Cash Portfolio
also may calculate a compound effective yield by compounding the base
period return over a one-year period. In addition to the current yield,
Cash Portfolio may quote yields in advertising based on any historical
seven-day period. Yields for Cash Portfolio are calculated on the same
basis as other money market funds, as required by regulation.
For Term Portfolio, yields are computed by dividing Term Portfolio's
interest income for a given 30-day or one-month period, net of expenses, by
the average number of shares entitled to receive dividends during the
period, dividing this figure by Term Portfolio's NAV at the end of the
period, and annualizing the result (assuming compounding of income) in
order to arrive at an annual percentage rate. Income is calculated for
purposes of Term Portfolio's yield quotations in accordance with
standardized methods applicable to all stock and bond funds. In general,
interest income is reduced with respect to bonds trading at a premium over
their par value by subtracting a portion of the premium from income on a
daily basis, and is increased with respect to bonds trading at a discount
by adding a portion of the discount to daily income. Capital gains and
losses generally are excluded from the calculation.
Income calculated for the purposes of determining Term Portfolio's yield
differs from income as determined for other accounting purposes. Because of
the different accounting methods used, and because of the compounding of
income assumed in yield calculations, Term Portfolio's yield may not equal
its distribution rate, the income paid to your account, or the income
reported in Term Portfolio's financial statements.
Yield information may be useful in reviewing a fund's performance and in
providing a basis for comparison with other investment alternatives.
However, each fund's yield fluctuates, unlike investments that pay a fixed
interest rate over a stated period of time. When comparing investment
alternatives, investors should also note the quality and maturity of the
portfolio securities of respective investment companies they have chosen to
consider.
Investors should recognize that in periods of declining interest rates a
fund's yield will tend to be somewhat higher than prevailing market rates,
and in periods of rising interest rates the fund's yield will tend to be
somewhat lower. Also, when interest rates are falling, the inflow of net
new money to a fund from the continuous sale of its shares will likely be
invested in instruments producing lower yields than the balance of the
fund's holdings, thereby reducing the fund's current yield. In periods of
rising interest rates, the opposite can be expected to occur.
Term Portfolio also may quote its distribution rate, which expresses the
historical amount of income dividends paid by Term Portfolio as a
percentage of Term Portfolio's share price. The distribution rate is
calculated by dividing Term Portfolio's daily dividend per share by its
share price for each day in the 30-day period, averaging the resulting
percentages, and then expressing the average rate in annualized terms.
TOTAL RETURN CALCULATIONS. Total returns quoted in advertising reflect all
aspects of a fund's return, including the effect of reinvesting dividends
and capital gain distributions, and any change in the fund's NAV over a
stated period. Average annual total returns are calculated by determining
the growth or decline in value of a hypothetical historical investment in a
fund over a stated period, and then calculating the annually compounded
percentage rate that would have produced the same result if the rate of
growth or decline in value had been constant over the period. For example,
a cumulative total return of 100% over ten years would produce an average
annual total return of 7.18%, which is the steady annual rate of return
that would equal 100% growth on a compounded basis in ten years. While
average annual total returns are a convenient means of comparing investment
alternatives, investors should realize that a fund's performance is not
constant over time, but changes from year to year, and that average annual
total returns represent averaged figures as opposed to the actual
year-to-year performance of a fund.
In addition to average annual total returns, a fund may quote unaveraged or
cumulative total returns reflecting the simple change in value of an
investment over a stated period. Average annual and cumulative total
returns may be quoted as a percentage or as a dollar amount, and may be
calculated for a single investment, a series of investments, or a series of
redemptions, over any time period. Total returns may be broken down into
their components of income and capital (including capital gains and changes
in share price) in order to illustrate the relationship of these factors
and their contributions to total return. Total returns may be quoted on a
before-tax or after-tax basis. Total returns, yields, and other performance
information may be quoted numerically or in a table, graph, or similar
illustration.
NET ASSET VALUE. Charts and graphs using Term Portfolio's NAVs ,
adjusted NAVs , and benchmark indices may be used to exhibit
performance. An adjusted NAV includes any distributions paid by Term
Portfolio and reflects all elements of its return. Unless otherwise
indicated, Term Portfolio's adjusted NAVs are not adjusted for sales
charges, if any.
HISTORICAL FUND RESULTS. The following table shows Cash Portfolio's
7 -day yield and total returns for periods ended June 30,
1995.
Average Annual Total Returns Cumulative Total Returns
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Seven- d One Five Ten One Five Ten
ay Yield Year Years* Years* Year Years* Years*
Cash Portfolio 5.70 5.28% 4.65% 6.10% 5.28% 25.53% 80.72%
%
</TABLE>
* Note: If FMR had not reimbursed certain fund expenses during these
periods, Cash Portfolio's total returns would have been lower.
HISTORICAL FUND RESULTS. The following table shows Term Portfolio's
30-day yield and total returns for periods ended June 30, 1995.
Average Annual Total Returns Cumulative Total Returns
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Thirty -da One Five Life of One Five Life of
y Yield Year Years* Fund+* Year Years* Fund+*
Term Portfolio 5.33 5.87% 5.54% 6.30% 5.87% 30.93% 65.90%
%
</TABLE>
+ From March 19, 1987 (commencement of operations).
* Note: If FMR had not reimbursed certain fund expenses during these
periods, Term Portfolio's total returns would have been lower.
The following tables show the income and capital elements of each fund's
cumulative total return. The tables compare each fund's return to the
record of the Standard & Poor's Composite Index of 500 Stocks (S&P 500),
the Dow Jones Industrial Average (DJIA), and the cost of living
(measured by the Consumer Price Index, or CPI) over the same period. The
CPI information is as of the month end closest to the initial investment
date for each fund. The S&P 500 and DJIA comparisons are provided to
show how each fund's total return compared to the record of a broad average
of common stocks and a narrower set of stocks of major industrial
companies, respectively, over the same period. Of course, since each fund
invests in fixed-income securities, common stocks represent a different
type of investment from the fund. Common stocks generally offer greater
growth potential than the funds, but generally experience greater price
volatility, which means greater potential for loss. In addition, common
stocks generally provide lower income than a fixed-income investment such
as the funds. Figures for the S&P 500 and DJIA are based on the prices of
unmanaged groups of stocks and, unlike the funds' returns, do not include
the effect of paying brokerage commissions or other costs of investing.
During the ten-year period from June 30, 1985 to June 30, 1995 (for
Cash Portfolio), and from March 19, 1987 (commencement of operations) to
June 30, 1995 (for Term Portfolio), a hypothetical $10,000 investment in
Cash Portfolio and Term Portfolio would have grown to $ 18,072 and
$ 16,590 , respectively, assuming all distributions were reinvested.
This was a period of fluctuating interest rates and bond prices and the
figures below should not be considered representative of the dividend
income or capital gain or loss that could be realized from an investment in
the fund today.
CASH PORTFOLIO IND ICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Year Value of Value of Value of Total S&P 500 DJIA CPI
Ended Initial Reinvested Reinvested Value
$10,000 Dividend Capital Gain
Investment Distributions Distributions
6/30/86 $ 10,000 $ 753 $ 0 $ 10,753 $ 13,582 $ 14,735 $ 10,177
6/30/87 $ 10,000 $ 1,401 $ 0 $ 11,401 $ 17,003 $ 19,456 $ 10,548
6/30/88 $ 10,000 $ 2,186 $ 0 $ 12,186 $ 15,832 $ 17,821 $ 10,967
6/30/89 $ 10,000 $ 3,262 $ 0 $ 13,262 $ 19,083 $ 21,061 $ 11,533
6/30/90 $ 10,000 $ 4,396 $ 0 $ 14,396 $ 22,229 $ 25,813 $ 12,072
6/30/91 $ 10,000 $ 5,437 $ 0 $ 15,437 $ 23,873 $ 27,042 $ 12,639
6/30/92 $ 10,000 $ 6,158 $ 0 $ 16,158 $ 27,077 $ 31,813 $ 13,030
6/30/93 $ 10,000 $ 6,650 $ 0 $ 16,650 $ 30,773 $ 34,724 $ 13,420
6/30/94 $ 10,000 $ 7,165 $ 0 $ 17,165 $ 31,207 $ 36,795 $ 13,755
6/30/95 $ 10,000 $ 8,072 $ 0 $ 18,072 $ 39,340 $ 47,474 $ 14,173
</TABLE>
Explanatory Notes: With an initial investment of $10,000 made on June 30,
1985, the net amount invested in Cash Portfolio shares was $10,000.
The cost of the initial investment ($10,000), together with the aggregate
cost of reinvested dividends for the period covered (their cash value at
the time they were reinvested), amounted to $ 18,072 . If
distributions had not been reinvested, the amount of distributions earned
from the fund over time would have been smaller, and cash payments
(dividends) for the period would have amounted to $ 5,934 . Cash
Portfolio did not distribute any capital gains during the period. Tax
consequences of different investments have not been factored into the above
figures.
TERM PORTFOLIO IND ICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Value of Value of Value of Total S&P 500 DJIA CPI**
Period Initial Reinvested Reinvested Value
Ended $10,000 Dividend Capital Gain
Investment Distributions Distributions
6/30/87* $ 9,910 $ 186 $ 0 $ 10,096 $ 10,474 $ 10,662 $ 10,125
6/30/88 $ 9,820 $ 985 $ 0 $ 10,805 $ 9,753 $ 9,766 $ 10,526
6/30/89 $ 9,780 $ 1,937 $ 0 $ 11,717 $ 11,755 $ 11,542 $ 11,070
6/30/90 $ 9,730 $ 2,941 $ 0 $ 12,671 $ 13,693 $ 14,146 $ 11,588
6/30/91 $ 9,820 $ 3,970 $ 0 $ 13,790 $ 14,707 $ 14,819 $ 12,132
6/30/92 $ 9,910 $ 4,826 $ 0 $ 14,736 $ 16,680 $ 17,433 $ 12,507
6/30/93 $ 9,940 $ 5,353 $ 0 $ 15,293 $ 18,957 $ 19,029 $ 12,881
6/30/94 $ 9,850 $ 5,789 $ 31 $ 15,670 $ 19,224 $ 20,164 $ 13,20 2
6/30/95 $ 9,910 $ 6,649 $ 31 $ 16,590 $ 24,235 $ 26,016 $ 13,604
</TABLE>
* From March 19, 1987 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 made on March 19,
1987, the net amount invested in Term Portfolio shares was $10,000.
The cost of the initial investment ($10,000), together with the aggregate
cost of reinvested dividends and capital gain distributions for the period
covered (their cash value at the time they were reinvested), amounted to
$ 16,626 . If distributions had not been reinvested, the amount of
distributions earned from the fund over time would have been
smaller, and cash payments for the period would have amounted to
$ 5,057 for dividends and $ 20 for capital gains distributions.
Tax consequences of different investments have not been factored into the
above figures.
PERFORMANCE COMPARISONS. A fund's performance may be compared to the
performance of other mutual funds in general, or to the performance of
particular types of mutual funds. These comparisons may be expressed as
mutual fund rankings prepared by Lipper Analytical Services, Inc. (Lipper),
an independent service located in Summit, New Jersey that monitors the
performance of mutual funds. Lipper generally ranks funds on the basis of
total return, assuming reinvestment of distributions, but does not take
sales charges or redemption fees into consideration, and is prepared
without regard to tax consequences. Lipper may also rank funds based on
yield. In addition to the mutual fund rankings, a fund's performance may be
compared to stock, bond, and money market mutual fund performance indices
prepared by Lipper or other organizations. When comparing these indices, it
is important to remember the risk and return characteristics of each type
of investment. For example, while stock mutual funds may offer higher
potential returns, they also carry the highest degree of share price
volatility. Likewise, money market funds may offer greater stability of
principal, but generally do not offer the higher potential returns
available from stock mutual funds.
From time to time, a fund's performance may also be compared to other
mutual funds tracked by financial or business publications and periodicals.
For example, a fund may quote Morningstar, Inc. in its advertising
materials. Morningstar, Inc. is a mutual fund rating service that rates
mutual funds on the basis of risk-adjusted performance. Rankings that
compare the performance of Fidelity funds to one another in appropriate
categories over specific periods of time may also be quoted in advertising.
A fund may be compared in advertising to Certificates of Deposit (CDs) or
other investments issued by banks or other depository institutions. Mutual
funds differ from bank investments in several respects. For example, a fund
may offer greater liquidity or higher potential returns than CDs, a fund
does not guarantee your principal or your return, and fund shares are not
FDIC insured.
Fidelity may provide information designed to help individuals understand
their investment goals and explore various financial strategies. Such
information may include information about current economic, market, and
political conditions; materials that describe general principles of
investing, such as asset allocation, diversification, risk tolerance, and
goal setting; questionnaires designed to help create a personal financial
profile; worksheets used to project savings needs based on assumed rates of
inflation and hypothetical rates of return; and action plans offering
investment alternatives. Materials may also include discussions of
Fidelity's asset allocation funds and other Fidelity funds, products, and
services.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical
returns of the capital markets in the United States, including common
stocks, small capitalization stocks, long-term corporate bonds,
intermediate-term government bonds, long-term government bonds, Treasury
bills, the U.S. rate of inflation (based on the CPI), and combinations of
various capital markets. The performance of these capital markets is based
on the returns of different indices.
Fidelity funds may use the performance of these capital markets in order to
demonstrate general risk-versus-reward investment scenarios. Performance
comparisons may also include the value of a hypothetical investment in any
of these capital markets. The risks associated with the security types in
any capital market may or may not correspond directly to those of the
funds. Ibbotson calculates total returns in the same method as the funds.
The funds may also compare performance to that of other compilations or
indices that may be developed and made available in the future.
A fund may compare its performance or the performance of securities in
which it may invest to averages published by IBC USA (Publications), Inc.
of Ashland, Massachusetts. These averages assume reinvestment of
distributions. The IBC/Donoghue's MONEY FUND AVERAGES(trademark)/Taxable
Money Market Funds, which is reported in the MONEY FUND REPORT(registered
trademark), covers over 391 taxable money market funds. The BOND
FUND REPORT AVERAGES(trademark)/Taxable Bond Funds, which is reported in
the BOND FUND REPORT(registered trademark), covers over 559 taxable
bond funds. When evaluating comparisons to money market funds, investors
should consider the relevant differences in investment objectives and
policies. Specifically, money market funds invest in short-term, high
quality instruments and seek to maintain a stable $1.00 share price. A bond
fund, however, invests in longer-term instruments and its share price
changes daily in response to a variety of factors.
In advertising materials, Fidelity may quote or reprint financial or
business publications and periodicals as they relate to current economic
and political conditions, fund management, portfolio composition,
investment philosophy, investment techniques, and the desirability
of owning a particular mutual fund.
A fund may present its fund number, Quotron(trademark) number, and CUSIP
number, and discuss or quote its current portfolio manager.
VOLATILITY. Term Portfolio may quote various measures of volatility and
benchmark correlation in advertising. In addition, Term Portfolio may
compare these measures to those of other funds. Measures of volatility seek
to compare Term Portfolio's historical share price fluctuations or total
returns to those of a benchmark. Measures of benchmark correlation indicate
how valid a comparative benchmark may be. All measures of volatility and
correlation are calculated using averages of historical data. In
advertising, Term Portfolio may also discuss or illustrate examples of
interest rate sensitivity.
MOMENTUM INDICATORS indicate Term Portfolio's price movements over
specific periods of time. Each point on the momentum indicator represents
the fund's percentage change in price movements over that period.
Term Portfolio may advertise examples of the effects of periodic investment
plans, including the principle of dollar cost averaging. In such a program,
an investor invests a fixed dollar amount in a fund at periodic intervals,
thereby purchasing fewer shares when prices are high and more shares when
prices are low. While such a strategy does not assure a profit or guard
against loss in a declining market, the investor's average cost per share
can be lower than if fixed numbers of shares are purchased at the same
intervals. In evaluating such a plan, investors should consider their
willingness to continue purchasing shares during periods of low
price levels.
As of August 31 , 1995, FMR advised over $ 26.5 billion in
tax-free fund assets, $ 79 billion in money market fund assets,
$ 218 billion in equity fund assets, $ 56 billion in
international fund assets, and $ 23 billion in Spartan fund assets.
The funds may reference the growth and variety of money market mutual funds
and the adviser's innovation and participation in the industry. The equity
funds under management figure represents the largest amount of equity fund
assets under management by a mutual fund investment adviser in the United
States, making FMR America's leading equity (stock) fund manager. FMR, its
subsidiaries, and affiliates maintain a worldwide information and
communications network for the purpose of researching and managing
investments abroad.
In addition to performance rankings, each fund may compare its total
expense ratio to the average total expense ratio of similar funds tracked
by Lipper. A fund's total expense ratio is a significant factor in
comparing bond and money market investments because of its effect on yield.
ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION
If the Trustees determine that existing conditions make cash payments
undesirable, redemption payments may be made in whole or in part in
securities or other property, valued for this purpose as they are valued in
computing a fund's NAV. Shareholders receiving securities or other property
on redemption may realize a gain or loss for tax purposes, and will incur
any costs of sale, as well as the associated inconveniences.
Pursuant to Rule 11a-3 under the 1940 Act, each fund is required to give
shareholders at least 60 days' notice prior to terminating or modifying its
exchange privilege. Under the Rule, the 60-day notification requirement may
be waived if (i) the only effect of a modification would be to reduce or
eliminate an administrative fee, redemption fee, or deferred sales charge
ordinarily payable at the time of an exchange, or (ii) the fund suspends
the redemption of the shares to be exchanged as permitted under the 1940
Act or the rules and regulations thereunder, or the fund to be acquired
suspends the sale of its shares because it is unable to invest amounts
effectively in accordance with its investment objective and policies.
In the prospectus, each fund has notified shareholders that it reserves the
right at any time, without prior notice, to refuse exchange purchases by
any person or group if, in FMR's judgment, the fund would be unable to
invest effectively in accordance with its investment objective and
policies, or would otherwise potentially be adversely affected.
DISTRIBUTIONS AND TAXES
DISTRIBUTIONS. If you request to have distributions mailed to you and the
U.S. Postal Service cannot deliver your checks, or if your checks remain
uncashed for six months, Fidelity may reinvest your distributions at the
then-current NAV. All subsequent distributions will then be reinvested
until you provide Fidelity with alternate instructions.
DIVIDENDS. Because each fund's income is primarily derived from interest,
dividends from each fund generally will not qualify for the
dividends-received deduction available to corporate shareholders.
Short-term capital gains are distributed as dividend income, but do not
qualify for the dividends - received deduction. A portion of each
fund's dividends derived from certain U.S. Government obligations may be
exempt from state and local taxation. Each fund will send each shareholder
a notice in January describing the tax status of dividend and capital gain
distributions (if any) for the prior year.
CAPITAL GAIN DISTRIBUTIONS. Cash Portfolio may distribute any net realized
short-term capital gains once a year or more often as necessary, to
maintain its NAV at $1.00 per share. Cash Portfolio does not anticipate
earning long-term capital gains on securities held by the fund .
Long-term capital gains earned by Term Portfolio on the sale of securities
and distributed to shareholders are federally taxable as long-term capital
gains, regardless of the length of time shareholders have held their
shares. If a shareholder receives a long-term capital gain distribution on
shares of Term Portfolio, and such shares are held six months or less and
are sold at a loss, the portion of the loss equal to the amount of the
long-term capital gain distribution will be considered a long-term loss for
tax purposes. Short-term capital gains distributed by Term Portfolio are
taxable to shareholders as dividends, not as capital gains.
As of June 30, 1995, Cash Portfolio had a capital loss carryforward
aggregating approximately $54,000. This loss carryforward, which will
expire on June 30, 2002, is available to offset future capital gains.
As of June 30, 1995, Term Portfolio had a capital loss carryforward
aggregating approximately $301,000. This loss carryforward, which will
expire on June 30, 2003, is available to offset future capital gains.
TAX STATUS OF THE FUNDS. Each fund intends to qualify each year as a
"regulated investment company" for tax purposes so that it will not be
liable for federal tax on income and capital gains distributed to
shareholders. In order to qualify as a regulated investment company and
avoid being subject to federal income or excise taxes at the fund level,
each fund intends to distribute substantially all of its net investment
income and net realized capital gains within each calendar year as well as
on a fiscal year basis.
Each fund is treated as a separate entity from the other fund of The North
Carolina Capital Management Trust for tax purposes.
OTHER TAX INFORMATION. The information above is only a summary of some of
the tax consequences generally affecting each fund and its
shareholders, and no attempt has been made to discuss individual tax
consequences. In addition to federal income taxes, shareholders may be
subject to state and local taxes on fund distributions , and shares may
be subject to state and local personal property taxes . Investors should
consult their tax advisers to determine whether a fund is suitable to their
particular tax situation.
FMR
All of the stock of FMR is owned by FMR Corp., its parent organized in
1972. The voting common stock of FMR Corp. is divided into two classes.
Class B is held predominantly by members of the Edward C. Johnson 3d family
and is entitled to 49% of the vote on any matter acted upon by the voting
common stock. Class A is held predominantly by non-Johnson family member
employees of FMR Corp. and its affiliates and is entitled to 51% of the
vote on any such matter. The Johnson family group and all other Class B
shareholders have entered into a shareholders' voting agreement under which
all Class B shares will be voted in accordance with the majority vote of
Class B shares. Under the 1940 Act, control of a company is presumed where
one individual or group of individuals owns more than 25% of the voting
stock of that company. Therefore, through their ownership of voting common
stock and the execution of the shareholders' voting agreement, members of
the Johnson family may be deemed, under the 1940 Act, to form a controlling
group with respect to FMR Corp.
At present, the principal operating activities of FMR Corp. are those
conducted by three of its divisions as follows: FSC, which is the transfer
and shareholder servicing agent for certain of the funds advised by FMR;
FIIOC, which performs shareholder servicing functions for institutional
customers and funds sold through intermediaries; and Fidelity Investments
Retail Marketing Company, which provides marketing services to various
companies within the Fidelity organization.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that sets forth all employees'
fiduciary responsibilities regarding the funds, establishes procedures for
personal investing and restricts certain transactions. For example, all
personal trades in most securities require pre-clearance, and participation
in initial public offerings is prohibited. In addition, restrictions on the
timing of personal investing in relation to trades by Fidelity funds and on
short-term trading have been adopted.
TRUSTEES AND OFFICERS
The Trustees and executive officers of the trust are listed below. Except
as indicated, each individual has held the office shown or other offices in
the same company for the last five years. The business address of each
Trustee and officer who is an "interested person" (as defined in the 1940
Act) is 82 Devonshire Street, Boston, Massachusetts 02109, which is also
the address of FMR. The business address of all the other Trustees is
Fidelity Investments, P.O. Box 9235, Boston, Massachusetts 02205-9235.
Those Trustees who are "interested persons" by virtue of their affiliation
with either the trust, FMR or Sterling are indicated by an asterisk (*).
*WILLIAM L. BYRNES (73), PRESIDENT AND TRUSTEE (1990) is a Director of
Fidelity International Limited and Vice Chairman, a Director and Managing
Director of FMR Corp.
JOHN DAVID "J.D." FOUST (67), TRUSTEE (1990) is a financial consultant
( Robinson-Humphrey Company Inc., 1995). Prior to 1995, Mr. Foust was a
financial consultant to Donaldson, Lufkin, & Jenrette Securities
Corporation (1990-1995 ). Prior to 1990, he served as Deputy State
Treasurer and Secretary of the Local Government Commission (1977-1989).
*W. OLIN NISBET III (55), TRUSTEE (1990) and Vice President, is Chairman
and Director of Sterling Capital and Chairman and Director of Sterling. Mr.
Nisbet is a rotating director of United Asset Management Corporation (1988
and 1994) and serves as Governor of the Investment Counsel Association of
America (since 1988), an Advisor of the Kitty Hawk Capital-Venture Capital
Partnership (1988), and a Trustee of Davidson College (1987).
HELEN A. POWERS (70), TRUSTEE (1990). Prior to Ms. Powers' retirement in
April 1990, she served as Secretary of the North Carolina Department of
Revenue (1985-1990). Prior to 1985 she was Senior Vice President of North
Carolina National Bank and served as a member of the North Carolina Banking
Commission. In April 1995, Ms. Powers was reappointed to serve as a member
of the North Carolina Banking Commission. Ms. Powers is a trustee of Warren
Wilson College (1992), a director of Memorial Mission Medical Center (1991)
and the Memorial Mission Foundation (1993), for which the New Women's
Health Center has been designated the HELEN POWERS WOMEN'S HEALTH CENTER.
BERTRAM H. WITHAM (76), TRUSTEE and CHAIRMAN OF THE BOARD, is Chairman
and Director of Preferred Lodging Systems (property management), Director
and member of Executive Committee of Bill Glass Ministries, and Trustee of
other funds advised by FMR. Previously, he served as a consultant
(Treasurer until his retirement in 1978) to IBM Corp.
J. GARY BURKHEAD (54), SENIOR VICE PRESIDENT, is President of FMR; and
President and a Director of FMR Texas (1989), Fidelity Management &
Research (U.K.) Inc., and Fidelity Management & Research (Far East) Inc. He
is a Trustee of other funds managed by FMR.
J. CALVIN RIVERS, JR. (49), VICE PRESIDENT (1992), is Director and
Executive Vice President of Sterling Capital and Director and
President of Sterling.
FRED L. HENNING, JR. (56), VICE PRESIDENT, is Vice President of Fidelity's
money market (1994) and fixed-income (1995) funds and Senior Vice President
of FMR Texas, Inc.
CURTIS HOLLINGSWORTH (38), VICE PRESIDENT of Term Portfolio
(1995), is an employee of FMR.
BURNELL R. STEHMAN (63), VICE PRESIDENT of Cash Portfolio (1991), Vice
President of FMR Texas (1989) and of other funds advised by FMR.
ARTHUR S. LORING (47), SECRETARY, is Senior Vice President (1993) and
General Counsel of FMR, Vice President - Legal of FMR Corp., and Vice
President and Clerk of FDC.
KENNETH A. RATHGEBER (48), TREASURER (1995) is Treasurer of the Fidelity
funds, and is an employee of FMR (1995). Before joining FMR, Mr. Rathgeber
was a Vice President of Goldman Sachs & Co. (1978-1995), where he served in
various positions, including Vice President of Proprietary Accounting
(1988-1992), Global Co-Controller (1992-1994), and Chief Operations Officer
of Goldman Sachs (Asia) LLC (1994-1995).
THOMAS D. MAHER (50), ASSISTANT VICE PRESIDENT of Cash Portfolio (1990), is
Assistant Vice President of Fidelity's money market funds and Vice
President and Associate General Counsel of FMR Texas (1990). Prior to 1990,
Mr. Maher was an employee of FMR.
JOHN H. COSTELLO (48), ASSISTANT TREASURER (1995) and an employee of FMR.
LEONARD M. RUSH (49), ASSISTANT TREASURER (1994) is an employee of FMR.
Prior to becoming Assistant Treasurer of the Fidelity funds, Mr. Rush was
Chief Compliance Officer of FMR Corp. (1993-1994); Chief Financial Officer
of Fidelity Brokerage Services, Inc. (1990-1993); and Vice President,
Assistant Controller, and Director of the Accounting Department - First
Boston Corp. (1986-1990).
DAVID H. POTEL (38), ASSISTANT SECRETARY (1988) and an employee of FMR
Corp.
The following table sets forth information describing the compensation of
each current t rustee of each fund for his or her services as trustee
for the fiscal year ended June 30, 1995.
COMPENSATION TABLE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Trustees Aggregate Aggregate Pension or Estimated Total
Compensation Compensation Retirement Annual Compensation
from Cash from Benefits Benefits from from the Fund
Portfolio* Term Portfolio* Accrued as the Fund Complex**
Part of Fund Complex upon
Expenses from Retirement**
the Fund
Complex**
William L. Byrnes+ 0 0 0 0 0
John David Foust $21,595 $3,905 0 0 $31,250
W. Olin Nisbet III+ 0 0 0 0 0
Helen A. Powers $27,765 $1,232 0 0 $27,184
Bertram H. $27,703 $1,229 0 0 $47,727
Witham
</TABLE>
* Includes compensation paid to the Trustees by each fund. The total amount
of deferred compensation (including interest) payable to or accrued for Mr.
Foust was $0, Ms. Powers was $28,997, and Mr. Witham was $28,932. Each
fund's trustees do not receive any pension or retirement benefits from the
funds as compensation for their services as trustees of the funds.
** Information is as of December 31, 1994 , for 210 funds in the Fund
Complex. Mr. Witham is a Director or Trustee of four investment companies
in the Fund Complex, including Cash Portfolio and Term Portfolio. Under a
retirement program adopted in July 1988 by the other open-end investment
companies in the Fund Complex (the "other Open-End Funds"), Mr. Witham,
upon reaching age 72, became eligible to participate in a retirement
program under which he receives payments during his lifetime from a fund
based upon his basic trustee fees and length of service as trustee for the
other Open-End Funds. During the year ended June 30, 1995, he received
$50,000 in payments under that retirement program. The obligation of the
other Open-End Funds to make such payments is not secured or funded.
+ Messrs. Byrnes and Nisbet, who are "interested persons" of Cash Portfolio
and Term Portfolio, do not receive any compensation from Cash Portfolio or
Term Portfolio or other investment companies in the Fund Complex for their
services as Trustees, and are compensated by FMR.
On September 30, 1995 , the Trustees and officers of each fund owned,
in the aggregate, less than 1% of each fund's total outstanding shares.
As of September 30, 1995, there were no owners of record or beneficially
of 5% or more of outstanding shares of Cash Portfolio.
As of September 30, 1995, the following owned of record or beneficially 5%
or more of outstanding shares of Term Portfolio: City of Charlotte, 600
East Fourth Street, Charlotte, NC 28202; Wake County, P.O. Box 550,
Raleigh, NC 27602; Alamance County, 124 W. Elm Street, Graham, NC 27253;
and Buncombe County, 1 Oak Plaza, Suite 202, Ashville, NC 28801.
MANAGEMENT CONTRACTS
Each fund employs FMR to furnish investment advisory and other services.
Under its management contract with each fund, FMR acts as investment
adviser and, subject to the supervision of the Board of Trustees, directs
the investments of each fund in accordance with its investment objective,
policies, and limitations. FMR also provides each fund with all necessary
office facilities and personnel for servicing each fund's investments,
compensates all officers of each fund and all Trustees who are "interested
persons" of the trust or of FMR, and all personnel of each fund or FMR
performing services relating to research, statistical, and investment
activities.
In addition, FMR or its affiliates, subject to the supervision of the Board
of Trustees, provide the management and administrative services necessary
for the operation of each fund. These services include providing facilities
for maintaining each fund's organization; supervising relations with
custodians, transfer and pricing agents, accountants, underwriters, and
other persons dealing with each fund; preparing all general shareholder
communications and conducting shareholder relations; maintaining each
fund's records and the registration of each fund's shares under federal and
state laws; developing management and shareholder services for each fund;
and furnishing reports, evaluations, and analyses on a variety of subjects
to the Trustees.
FMR is responsible for the payment of all expenses of each fund with
certain exceptions. Specific expenses payable by FMR include, without
limitation, expenses for typesetting, printing, and mailing proxy materials
to shareholders; legal expenses, and the fees of the custodian, and
auditor; costs of typesetting, printing, and mailing prospectuses and
statements of additional information, notices and reports to shareholders;
and each fund's proportionate share of insurance premiums and
Investment Company Institute dues. FMR also provides for transfer agent and
dividend disbursing services through FIIOC and portfolio and general
accounting record maintenance through FSC.
FMR pays all other expenses of each fund with the following exceptions:
fees and expenses of all Trustees of the trust who are not "interested
persons" of the trust , FMR , or Sterling (the non-interested
Trustees); interest on borrowings; taxes; brokerage commissions (if any);
and such nonrecurring expenses as may arise, including costs of any
litigation to which a fund may be a party, and any obligation it may have
to indemnify the officers and Trustees with respect to litigation.
FMR is each fund's manager pursuant to management contracts dated December
13, 1990, which were approved by shareholders on December 12, 1990. The
management fee paid by each fund to FMR is reduced by an amount
equal to the fees and expenses paid by the fund to the
non-interested Trustees.
For the services of FMR under each contract, each fund pays FMR a monthly
management fee at an annual rate according to the following
schedule: 0.365% of average net assets through $400 million; 0.360% of
average net assets in excess of $400 million through $800 million; 0.355%
of average net assets in excess of $800 million through $1.2 billion;
0.350% of average net assets in excess of $1.2 billion through $1.6
billion; 0.340% of average net assets in excess of $1.6 billion through
$2.0 billion; and 0.330% of average net assets in excess of $2.0
billion. Fees received by FMR, after reduction of fees and expenses
paid by the fund to the non-interested Trustees, for the last three
fiscal years are shown in the table below.
Fiscal Year Ended Management Fees Paid to FMR *
Cash Portfolio 1995 $ 5,555,766
1994 $ 5,314,720
1993 $ 5,882,188
Term Portfolio 1995 $ 261,780
1994 $ 300,144
1993 $ 338,211
* Prior to November 1, 1995, the management fees were based on the
following schedule: 0.41% of average net assets through $100 million; 0.40%
of average net assets in excess of $100 million through $200 million; 0.39%
of average net assets in excess of $200 million through $800 million; and
0.38% of average net assets in excess of $800 million. On November 1, 1995,
FMR voluntarily revised the above fee schedule. The revised management fee
schedule provides for lower management fee rates as the funds' assets
increase.
FMR may, from time to time, voluntarily reimburse all or a portion of each
fund's operating expenses (exclusive of interest, taxes, brokerage
commissions, and extraordinary expenses). FMR retains the ability to be
repaid for these expense reimbursements in the amount that expenses fall
below the limit prior to the end of the fiscal year. Expense reimbursements
by FMR will increase each fund's total returns and yield and repayment of
the reimbursement by each fund will lower its total returns and yield.
SUB-ADVISER. On behalf of Cash Portfolio, FMR has entered into a
sub-advisory agreement with FMR Texas pursuant to which FMR Texas
has primary responsibility for providing portfolio investment management
services to Cash Portfolio.
Under the sub-advisory agreement dated January 1, 1991, which was approved
by shareholders on December 12, 1990, FMR pays FMR Texas fees equal to 50%
of the management fee payable to FMR under its management contract with
Cash Portfolio, after payments by FMR pursuant to Cash Portfolio's 12b-1
Plan, if any. The fees paid to FMR Texas are not reduced by any voluntary
or mandatory expense reimbursements that may be in effect from time to
time. On behalf of Cash Portfolio, for fiscal 1995, 1994, and 1993, FMR
paid FMR Texas fees of $ 1,597,195 , $ 1,574,452 , and
$ 1,692,977 , respectively.
CONTRACTS WITH FMR AFFILIATES
FIIOC performs transfer, dividend disbursing, and shareholder
servicing functions for the funds. The costs of these services
are borne by FMR pursuant to its management contract with each
fund . Under this arrangement, FIIOC receives an account fee and
transaction fees.
FSC performs the calculations necessary to determine the NAV and dividends
for each fund, and maintains each fund's general accounting records. The
cost of these services are also borne by FMR pursuant to its management
contract with the funds. FSC receives a fee based on each fund's average
net assets.
Each fund has a distribution agreement with FDC, a Massachusetts
corporation organized on July 18, 1960. FDC is a broker-dealer registered
under the Securities Exchange Act of 1934 and is a member of the National
Association of Securities Dealers, Inc. The distribution agreement s
call for FDC to use all reasonable efforts, consistent with its other
business, to secure purchasers for shares of each fund, which are
continuously offered at NAV . Promotional and administrative expenses
in connection with the offer and sale of shares are paid by FMR. FDC has
entered into a Distribution and Service Agent Agreement with Sterling, a
wholly-owned subsidiary of Sterling Capital Management Company (Sterling
Capital), headquartered in Charlotte, NC, which is an affiliate of
United Asset Management Corporation, Boston, MA, to act as distribution
agent of shares of each fund. Under the Distribution and Service Agent
Agreement, Sterling has assumed from FDC primary responsibility with
respect to the distribution of each fund's shares.
DISTRIBUTION AND SERVICE PLANS
The Trustees have approved Distribution and Service Plans on behalf of the
funds (the Plans) 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 a fund except pursuant to a plan approved on
behalf of the fund under the Rule. The Plans, as approved by the Trustees,
allow the funds and FMR to incur certain expenses that might be considered
to constitute direct or indirect payment by the funds of distribution
expenses.
Under each Plan, if the payment of management fees by the funds to FMR
is deemed to be indirect financing by the funds of the distribution of
their shares, such payment is authorized by the Plans. Each Plan
specifically recognizes that FMR may use its management fee revenue to
compensate FDC for services in connection with the distribution of shares,
including payments made to third parties that assist in selling shares of
each fund, or to third parties that render shareholder support
services.
Pursuant to the Plans, from its management fees, FMR pays Sterling, through
FDC, a monthly distribution fee at an annual rate according to
the following schedule: 0.160% of average net assets through $1.6 billion;
0.155% of average net assets in excess of $1.6 billion through $2.0
billion; and 0.150% of average net assets in excess of $2.0 billion.
For the fiscal year ended June 30, 1995, FMR paid Sterling through FDC
$ 2,361,376 on behalf of Cash Portfolio and $ 91,592 on behalf
of Term Portfolio. Prior to February 1, 1996, the distribution fees were
based on the following schedule: 0.14% of average net assets through $100
million; 0.15% of average net assets in excess of $100 million through $200
million; 0.16% of average net assets in excess of $200 million through $800
million; and 0.17% of average net assets in excess of $800 million.
Prior to approving each Plan, the Trustees carefully considered all
pertinent factors relating to the implementation of each Plan, and have
determined that there is a reasonable likelihood that the Plan will benefit
each fund and its shareholders. In particular, the Trustees noted that
each Plan does not authorize payments by each fund other than those made to
FMR under its management contract with the fund. To the extent that
each Plan gives FMR and FDC greater flexibility in connection with the
distribution of shares of each fund, additional sales of fund shares may
result. Furthermore, certain shareholder support services may be provided
more effectively under the Plans by local entities with whom shareholders
have other relationships.
The Plans were approved by shareholders of each fund on December 12, 1990.
The Glass-Steagall Act generally prohibits federally and state chartered or
supervised banks from engaging in the business of underwriting, selling or
distributing securities. Although the scope of this prohibition under the
Glass-Steagall Act has not been clearly defined by the courts or
appropriate regulator agencies, 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 and their
affiliates or subsidiaries, 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 funds
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.
Each fund may execute portfolio transactions with, and purchase securities
issued by, depository institutions that receive payments under the Plans.
No preference for the instruments of such depository institutions will be
shown in the selection of investments.
DESCRIPTION OF THE TRUST
TRUST ORGANIZATION. Cash Portfolio and Term Portfolio are funds of The
North Carolina Capital Management Trust, an open-end management investment
company organized as a Massachusetts business trust pursuant to a
Declaration of Trust, dated April 26, 1982, and amended and restated on
November 1, 1987. Currently, Cash Portfolio and Term Portfolio are the only
funds of the trust. The Declaration of Trust permits the Trustees to create
additional funds.
In the event that FMR ceases to be the investment adviser to a fund,
the right of the trust or fund to use the identifying name "Fidelity" may
be withdrawn. There is a remote possibility that one fund might become
liable for any misstatement in its prospectus or SAI about another
fund.
The assets of the trust received for the issue or sale of shares of each
fund and all income, earnings, profits, and proceeds thereof, subject only
to the rights of creditors, are especially allocated to such fund, and
constitute the underlying assets of such fund. The underlying assets of
each fund are segregated on the books of account, and are to be charged
with the liabilities with respect to such fund and with a share of the
general expenses of the trust. Expenses with respect to the trust are to be
allocated in proportion to the asset value of the respective funds, except
where allocations of direct expense can otherwise be fairly made. The
officers of the trust, subject to the general supervision of the Board of
Trustees, have the power to determine which expenses are allocable to a
given fund, or which are general or allocable to all of the funds. In the
event of the dissolution or liquidation of the trust, shareholders of each
fund are entitled to receive as a class the underlying assets of such fund
available for distribution.
SHAREHOLDER AND TRUSTEE LIABILITY. The trust is an entity of the type
commonly known as a "Massachusetts business trust." Under Massachusetts
law, shareholders of such a trust may, under certain circumstances, be held
personally liable for the obligations of the trust. The Declaration of
Trust provides that the trust shall not have any claim against shareholders
except for the payment of the purchase price of shares and requires that
each agreement, obligation, or instrument entered into or executed by the
trust or the Trustees shall include a provision limiting the obligations
created thereby to the trust and its assets. The Declaration of Trust
provides for indemnification out of each fund's property of any
shareholders held personally liable for the obligations of the fund. The
Declaration of Trust also provides that each fund shall, upon request,
assume the defense of any claim made against any shareholder for any act or
obligation of the fund and satisfy any judgment thereon. Thus, the risk of
a shareholder incurring financial loss on account of shareholder liability
is limited to circumstances in which the fund itself would be unable to
meet its obligations. FMR believes that, in view of the above, the risk of
personal liability to shareholders is remote.
The Declaration of Trust further provides that the Trustees, if they have
exercised reasonable care, will not be liable for any neglect or
wrongdoing, but nothing in the Declaration of Trust protects Trustees
against any liability to which they would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence, or reckless disregard of
the duties involved in the conduct of their office.
VOTING RIGHTS. Each fund's capital consists of shares of beneficial
interest. The shares have no preemptive or conversion rights; the voting
and dividend rights, the right of redemption, and the privilege of exchange
are described in the Prospectus. Shares are fully paid and nonassessable,
except as set forth under the heading "Shareholder and Trustee Liability"
above. Shareholders representing 10% or more of the trust or a fund may, as
set forth in the Declaration of Trust, call meetings of the trust or a fund
for any purpose related to the trust or fund, as the case may be,
including, in the case of a meeting of the entire trust, the purpose of
voting on removal of one or more Trustees. The trust or any fund may be
terminated upon the sale of its assets to another open-end management
investment company, or upon liquidation and distribution of its assets, if
approved by vote of the holders of a majority of the outstanding shares of
the trust or the fund. If not so terminated, the trust and the funds will
continue indefinitely.
CUSTODIAN. First Union National Bank of North Carolina, Two First Union
Center, Charlotte, NC 28288, is custodian of the assets of
each fund . The custodian is responsible for the safekeeping
of a fund' s assets and the appointment of the subcustodian
banks and clearing agencies. The custodian takes no part in determining the
investment policies of the funds or in deciding which securities are
purchased or sold by a fund . However, a fund
may invest in obligations of the custodian and may purchase securities
from or sell securities to the custodian. The Bank of New York ,
headquartered in New York, also may serve as a special purpose
custodian of certain assets in connection with pooled repurchase agreement
transactions.
FMR, its officers and directors, its affiliated companies, and the Board of
Trustees may, from time to time, conduct transactions with various banks,
including banks serving as custodians for certain funds advised by FMR.
Transactions that have occurred to date include mortgages and personal and
general business loans. In the judgment of FMR, the terms and conditions of
those transactions were not influenced by existing or potential custodial
or other fund relationships.
AUDITOR. Coopers & Lybrand L.L.P., One Post Office Square, Boston, MA
and 1999 Bryan Street, Dallas, TX , serves as the trust's independent
accountant. The auditor examines financial statements for the funds and
provides other audit, tax, and related services.
FINANCIAL STATEMENTS
Each fund' s financial statements and financial highlights for
the fiscal year ended June 30, 1995 are included in the funds' Annual
Report, which is a separate report. Each fund' s financial
statements and financial highlights are incorporated herein by
reference.
APPENDIX
The descriptions that follow are examples of eligible ratings for the
funds. A fund may, however, consider the ratings for other types of
investments and the ratings assigned by other rating organizations when
determining the eligibility of a particular investment.
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S RATINGS OF STATE AND
MUNICIPAL NOTES:
Moody's ratings for state and municipal and other short-term obligations
will be designated Moody's Investment Grade (MIG, or VMIG for variable rate
obligations). This distinction is in recognition of the difference between
short-term credit risk and long-term credit risk. Factors affecting the
liquidity of the borrower and short-term cyclical elements are critical in
short-term ratings, while other factors of major importance in bond risk,
long-term secular trends for example, may be less important in the short
run. Symbols used will be as follows:
MIG-1/VMIG-1 - This designation denotes best quality. There is present
strong protection by established cash flows, superior liquidity support, or
demonstrated broad-based access to the market for refinancing.
MIG-2/VMIG-2 - This designation denotes high quality. Margins of protection
are ample although not so large as in the preceding group.
MIG-3/VMIG-3 - This designation denotes favorable quality. All security
elements are accounted for, but there is lacking the undeniable strength of
the preceding grades. Liquidity and cash flow protection may be narrow and
market access for refinancing is likely to be less well established.
DESCRIPTION OF STANDARD & POOR'S CORPORATION'S RATINGS OF STATE AND
MUNICIPAL NOTES:
SP-1 - Strong capacity to pay principal and interest. An issue determined
to possess a very strong capacity to pay debt service is given a plus (+)
designation.
SP-2 - Satisfactory capacity to pay principal and interest, with some
vulnerability to adverse financial and economic changes over the term of
the notes.
SP-3 - Speculative capacity to pay principal and interest.
DESCRIPTION OF MOODY'S INVESTORS SERVICES, INC.'S MUNICIPAL BOND RATINGS:
AAA - Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to
as "gilt edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such
issues.
AA - Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally
known as high-grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there may
be other elements present which make the long-term risks appear somewhat
larger than the Aaa securities.
A -Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper-medium-grade obligations. Factors giving
security to principal and interest are considered adequate but elements may
be present which suggest a susceptibility to impairment sometime in the
future.
There are nine basic rating categories for long-term obligations. They
range from Aaa (highest quality) to C (lowest quality). Those bonds within
the Aa, A, Baa, Ba and B categories that Moody's believes possess the
strongest credit attributes within those categories are designated by the
symbols Aa1, A1, Baa1, Ba1 and B1.
DESCRIPTION OF STANDARD & POOR'S CORPORATION'S MUNICIPAL BOND RATINGS:
AAA -Debt rated AAA has the highest rating assigned by Standard & Poor's to
a debt obligation. Capacity to pay interest and repay principal is
extremely strong.
AA - Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher-rated issues only in small degree.
A - Debt rated A has a strong capacity to pay interest and repay principal,
although it is somewhat more susceptible to the adverse effects of changes
in circumstances and economic conditions than debt in higher rated
categories.
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S COMMERCIAL PAPER RATINGS:
Issuers rated PRIME-1 (or related supporting institutions) have a superior
capacity for repayment of short-term promissory obligations. Prime-1
repayment capacity will normally be evidenced by the following
characteristics:
Leading market positions in well established industries.
High rates of return on funds employed.
Conservative capitalization structures with moderate reliance on debt and
ample asset protection.
Broad margins in earning coverage of fixed financial charges and with high
internal cash generation.
Well established access to a range of financial markets and assured sources
of alternate liquidity.
Issuers rated PRIME-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will
normally be evidenced by many of the characteristics cited above but to a
lesser degree. Earning trends and coverage ratios, while sound, will be
more subject to variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained.
Issuers rated PRIME-3 (or related supporting institutions) have an
acceptable capacity for repayment of short-term promissory obligations. The
effect of industry characteristics and market composition may be more
pronounced. Variability in earnings and profitability may result in changes
in the level of debt protection measurements and the requirement for
relatively high financial leverage. Adequate alternate liquidity is
maintained.
DESCRIPTION OF STANDARD & POOR'S CORPORATION'S COMMERCIAL PAPER RATINGS:
A - Issues assigned this highest rating are regarded as having the greatest
capacity for timely payment. Issues in this category are delineated with
the numbers 1, 2, and 3 to indicate the relative degree of safety.
A-1 - This designation indicates that the degree of safety regarding timely
payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics will be denoted with a plus (+)
sign designation.
A-2 - Capacity for timely payment on issues with this designation is
strong. However, the relative degree of safety is not as high as for issues
designated A-1.
A-3 - This designation indicates that the capacity for timely payment is
satisfactory. These issues are, however, somewhat more vulnerable to the
adverse effects of changes in circumstances than obligations carrying the
higher designations.
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a)(1) Financial Statements and Financial Highlights, included in the
Annual Report, for Cash Portfolio for the fiscal year ended June 30, 1995
are incorporated by reference into the fund's Statement of Additional
Information and were filed on August 16, 1995 for The North Carolina
Capital Management Trust (File No. 811-3455) pursuant to Rule 30d-1 under
the Investment Company Act of 1940 and are incorporated herein by
reference.
(a)(2) Financial Statements and Financial Highlights, included in the
Annual Report, for Term Portfolio for the fiscal year ended June 30, 1995
are incorporated by reference into the fund's Statement of Additional
Information and were filed on August 16, 1995 for The North Carolina
Capital Management Trust (File No. 811-3455) pursuant to Rule 30d-1 under
the Investment Company Act of 1940 and are incorporated herein by
reference.
(b) Exhibits:
(1) Amended and Restated Declaration of Trust dated November 1, 1987, was
electronically filed and is incorporated herein by reference as Exhibit 1
to Post-Effective Amendment No. 28.
(a) Supplement to the Declaration of Trust, dated October 18, 1993, was
electronically filed and is incorporated herein by reference as Exhibit
1(a) to Post-Effective Amendment No. 28.
(2) By-Laws of the Trust were electronically filed and are incorporated
herein by reference as Exhibit 2 to Post-Effective Amendment No. 28.
(3) Not applicable.
(4) Not applicable.
(5) (a) Management Contract between The North Carolina Cash Management
Trust: Term Portfolio and Fidelity Management & Research Company dated
December 13, 1990 was electronically filed and is incorporated herein by
reference as Exhibit 5(a) to Post-Effective Amendment No. 28.
(b) Management Contract between The North Carolina Cash Management
Trust: Cash Portfolio and Fidelity Management & Research Company dated
December 13, 1990 was electronically filed and is incorporated herein by
reference as Exhibit 5(b) to Post-Effective Amendment No. 28.
(c) Sub-Advisory Agreement between FMR Texas Inc. and Fidelity
Management & Research Company on behalf of Cash Portfolio dated January 1,
1991 was electronically filed and is incorporated herein by reference as
Exhibit 5(c) to Post-Effective Amendment No. 28.
(6) (a) General Distribution Agreement between The North Carolina Cash
Management Trust: Cash Portfolio and Fidelity Distributors Corporation
dated April 1, 1987 was electronically filed and is incorporated herein by
reference as Exhibit 6(a) to Post-Effective Amendment No. 28.
(b) General Distribution Agreement between The North Carolina Cash
Management Trust: Term Portfolio and Fidelity Distributors Corporation
dated April 1, 1987 was electronically filed and is incorporated herein by
reference as Exhibit 6(b) to Post-Effective Amendment No. 28.
(c) Amendment to the General Distribution Agreement dated January 1,
1988 for Cash Portfolio and Term Portfolio was electronically filed and is
incorporated herein by reference as Exhibit 6(c) to Post-Effective
Amendment No. 28.
(7) Not applicable.
(8) (a) Custodian Agreement between Registrant and First Union National
Bank of North Carolina dated December 6, 1991 was electronically filed and
is incorporated herein by reference as Exhibit 8(a) to Post-Effective
Amendment No. 30.
(b) Subcustodian Agreement between First Union National Bank of North
Carolina and Shawmut Bank, N.A. dated November 1, 1990 was electronically
filed and is incorporated herein by reference as Exhibit 8(b) to
Post-Effective Amendment No. 28.
(c) Subcustodian Agreement between First Union National Bank of North
Carolina and Morgan Guaranty Trust Company of New York dated March 18, 1991
was electronically filed and is incorporated herein by reference as Exhibit
8(c) to Post-Effective Amendment No. 28.
(9) Not applicable.
(10) Not applicable.
(11) Consent of Coopers & Lybrand L.L.P. is filed herein as Exhibit 11.
(12) Not applicable.
(13) Not applicable.
(14) Not applicable.
(15) (a) Distribution and Service Plan between The North Carolina Cash
Management Trust: Term Portfolio and Fidelity Distributors Corporation
dated December 13, 1990 was electronically filed and is incorporated herein
by reference as Exhibit 15(a) to Post-Effective Amendment No. 28.
(b) Distribution and Service Plan between The North Carolina Cash
Management Trust: Cash Portfolio and Fidelity Distributors Corporation
dated December 13, 1990 was electronically filed and is incorporated herein
by reference as Exhibit 15(b) to Post-Effective Amendment No. 28.
(c) Distribution and Service Agent Agreement between Fidelity
Distributors Corporation and Sterling Capital Distributors, Inc., dated
December 13, 1990 on behalf of Term Portfolio, was electronically filed and
is incorporated herein by reference as Exhibit 15(c) to Post-Effective
Amendment No. 28.
(d) Distribution and Service Agent Agreement between Fidelity
Distributors Corporation and Sterling Capital Distributors, Inc., dated
December 13, 1990 on behalf of Cash Portfolio, was electronically filed and
is incorporated herein by reference as Exhibit 15(d) to Post-Effective
Amendment No. 28.
(16) (a) Schedule and data points for 7-day yield for Cash Portfolio are
electronically filed herein as Exhibit 16(a).
(b) Schedule and data points for 30-day yield for Term Portfolio were
electronically filed and are incorporated herein by reference as Exhibit
16(b) to Post-Effective Amendment No. 30.
(c) Schedule and data points for total return for Term Portfolio were
electronically filed and are incorporated herein by reference as Exhibit
16(c) to Post-Effective Amendment No. 30.
(d) Schedule and data points for adjusted NAV for Term Portfolio were
electronically filed and are incorporated herein by reference as Exhibit
16(d) to Post-Effective Amendment No. 30.
(17) Financial Data Schedules for Cash Portfolio and Term Portfolio are
electronically filed herein as Exhibit 17.
Item 25. Persons Controlled by or under Common Control with Registrant
The Board of Trustees of Registrant is a separate entity from the Board of
other funds advised by FMR, each of which has Fidelity Management &
Research Company as its investment adviser. The officers of these funds are
elected separately and are substantially different. The Registrant takes
the position that it is not under common control with these other funds
since the power residing in the respective boards and officers arises as
the result of an official position with the respective funds.
Item 26. Number of Holders of Securities
August 31, 1995
Title of Class Number of Record Holders
Cash Portfolio 545
Term Portfolio 115
Item 27. Indemnification
Article XI, Section 2 of the Declaration of Trust sets forth the
reasonable and fair means for determining whether indemnification shall be
provided to any past or present Trustee or officer. It states that the
Registrant shall indemnify any present or past Trustee or officer to the
fullest extent permitted by law against liability and all expenses
reasonably incurred by him or her in connection with any claim, action,
suit or proceeding in which he or she is involved by virtue of his or her
service as a trustee, an officer, or both. Additionally, amounts paid or
incurred in settlement of such matters are covered by this indemnification.
Indemnification will not be provided in certain circumstances, however.
These include instances of willful misfeasance, bad faith, gross
negligence, and reckless disregard of the duties involved in the conduct of
the particular office involved.
Item 28. Business and Other Connections of Investment Adviser
(1) FIDELITY MANAGEMENT & RESEARCH COMPANY
FMR serves as investment adviser to a number of other investment
companies. The directors and officers of the Adviser have held, during the
past two fiscal years, the following positions of a substantial nature.
<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman of the Executive Committee of FMR; President
and Chief Executive Officer of FMR Corp.; Chairman of
the Board and a Director of FMR, FMR Corp., FMR Texas
Inc., Fidelity Management & Research (U.K.) Inc., and
Fidelity Management & Research (Far East) Inc.; President
and Trustee of funds advised by FMR.
J. Gary Burkhead President of FMR; Managing Director of FMR Corp.;
President and a Director of FMR Texas Inc., Fidelity
Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.; Senior Vice
President and Trustee of funds advised by FMR.
Peter S. Lynch Vice Chairman and Director of FMR.
Robert Beckwitt Vice President of FMR and of funds advised by FMR.
David Breazzano Vice President of FMR (1993) and of a fund advised by
FMR.
Stephan Campbell Vice President of FMR (1993).
Dwight Churchill Vice President of FMR (1993).
William Danoff Vice President of FMR (1993) and of a fund advised by
FMR.
Scott DeSano Vice President of FMR (1993).
Penelope Dobkin Vice President of FMR and of a fund advised by FMR.
Larry Domash Vice President of FMR (1993).
George Domolky Vice President of FMR (1993) and of a fund advised by
FMR.
Robert K. Duby Vice President of FMR.
Margaret L. Eagle Vice President of FMR and of a fund advised by FMR.
Kathryn L. Eklund Vice President of FMR.
Richard B. Fentin Senior Vice President of FMR (1993) and of a fund advised
by FMR.
Daniel R. Frank Vice President of FMR and of funds advised by FMR.
Michael S. Gray Vice President of FMR and of funds advised by FMR.
Lawrence Greenberg Vice President of FMR (1993).
Barry A. Greenfield Vice President of FMR and of a fund advised by FMR.
William J. Hayes Senior Vice President of FMR; Equity Division Leader.
Robert Haber Vice President of FMR and of funds advised by FMR.
Richard Haberman Senior Vice President of FMR (1993).
Daniel Harmetz Vice President of FMR and of a fund advised by FMR.
Ellen S. Heller Vice President of FMR.
</TABLE>
John Hickling Vice President of FMR (1993) and of funds advised by
FMR.
<TABLE>
<CAPTION>
<S> <C>
Robert F. Hill Vice President of FMR; Director of Technical Research.
Stephen P. Jonas Treasurer and Vice President of FMR (1993)); Treasurer of
FMR Texas Inc. (1993), Fidelity Management & Research
(U.K.) Inc. (1993), and Fidelity Management & Research
(Far East) Inc. (1993).
David B. Jones Vice President of FMR (1993).
Steven Kaye Vice President of FMR (1993) and of a fund advised by
FMR.
Frank Knox Vice President of FMR (1993).
Robert A. Lawrence Senior Vice President of FMR (1993); High Income
Division Leader.
Alan Leifer Vice President of FMR and of a fund advised by FMR.
Harris Leviton Vice President of FMR (1993) and of a fund advised by
FMR.
Bradford E. Lewis Vice President of FMR and of funds advised by FMR.
Malcolm W. MacNaught II Vice President of FMR (1993).
Robert H. Morrison Vice President of FMR; Director of Equity Trading.
David Murphy Vice President of FMR and of funds advised by FMR.
Andrew Offit Vice President of FMR (1993).
Judy Pagliuca Vice President of FMR (1993).
Jacques Perold Vice President of FMR.
Anne Punzak Vice President of FMR and of funds advised by FMR.
Lee Sandwen Vice President of FMR (1993).
Patricia A. Satterthwaite Vice President of FMR (1993) and of a fund advised by
FMR.
Thomas T. Soviero Vice President of FMR (1993).
Robert E. Stansky Senior Vice President of FMR (1993) and of funds advised
by FMR.
Gary L. Swayze Vice President of FMR and of funds advised by FMR;
Tax-Free Fixed-Income Group Leader.
Thomas Sweeney Vice President of FMR (1993).
Donald Taylor Vice President of FMR (1993) and of funds advised by
FMR.
Beth F. Terrana Senior Vice President of FMR (1993) and of funds advised
by FMR.
Joel Tillinghast Vice President of FMR (1993) and of a fund advised by
FMR.
Robert Tucket Vice President of FMR (1993).
George A. Vanderheiden Senior Vice President of FMR; Vice President of funds
advised by FMR; Growth Group Leader.
Jeffrey Vinik Senior Vice President of FMR (1993) and of a fund advised
by FMR.
Guy E. Wickwire Vice President of FMR and of a fund advised by FMR.
Arthur S. Loring Senior Vice President (1993), Clerk, and General Counsel
of FMR; Vice President, Legal of FMR Corp.; Secretary of
funds advised by FMR.
</TABLE>
(2) FMR TEXAS INC. (FMR Texas)
FMR Texas provides investment advisory services to Fidelity Management &
Research Company. The directors and officers of the Sub-Adviser have held
the following positions of a substantial nature during the past two fiscal
years.
<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman and Director of FMR Texas; Chairman of the
Executive Committee of FMR; President and Chief
Executive Officer of FMR Corp.; Chairman of the Board
and a Director of FMR, FMR Corp., Fidelity
Management & Research (Far East) Inc. and Fidelity
Management & Research (U.K.) Inc.; President and
Trustee of funds advised by FMR.
J. Gary Burkhead President and Director of FMR Texas; President of FMR;
Managing Director of FMR Corp.; President and a
Director of Fidelity Management & Research (Far East)
Inc. and Fidelity Management & Research (U.K.) Inc.;
Senior Vice President and Trustee of funds advised by
FMR.
Fred L. Henning, Jr. Senior Vice President of FMR Texas; Fixed-Income
Division Leader (1995).
Robert Auld Vice President of FMR Texas (1993).
Leland Barron Vice President of FMR Texas and of funds advised by
FMR.
Robert Litterst Vice President of FMR Texas and of funds advised by
FMR (1993).
Thomas D. Maher Vice President of FMR Texas and Assistant Vice
President of funds advised by FMR.
Burnell R. Stehman Vice President of FMR Texas and of funds advised by
FMR.
John J. Todd Vice President of FMR Texas and of funds advised by
FMR.
Sarah H. Zenoble Vice President of FMR Texas; Money Market Division
Leader (1995).
Stephen P. Jonas Treasurer of FMR Texas Inc. (1993), Fidelity
Management & Research (U.K.) Inc. (1993), and Fidelity
Management & Research (Far East) Inc. (1993);
Treasurer and Vice President of FMR (1993).
David C. Weinstein Secretary of FMR Texas; Clerk of Fidelity Management
& Research (U.K.) Inc.; Clerk of Fidelity Management &
Research (Far East) Inc.
</TABLE>
Item 29. Principal Underwriters
(a) Fidelity Distributors Corporation (FDC) acts as distributor for most
funds advised by FMR and the following other funds:
ARK Funds
(b)
Name and Principal Positions and Offices Positions and Offices
Business Address* With Underwriter With Registrant
Edward C. Johnson 3d Director Trustee and President
Nita B. Kincaid Director None
W. Humphrey Bogart Director None
Kurt A. Lange President and Treasurer None
William L. Adair Senior Vice President None
Thomas W. Littauer Senior Vice President None
Arthur S. Loring Vice President and Clerk Secretary
* 82 Devonshire Street, Boston, MA
(c) Not applicable.
Item 30. Location of Accounts and Records
All accounts, books, and other documents required to be maintained by
Section 31a of the 1940 Act and the Rules promulgated thereunder are
maintained by Fidelity Management & Research Company or Fidelity Service
Co., 82 Devonshire Street, Boston, MA 02109, or the Portfolios' custodian,
First Union National Bank, Charlotte, North Carolina.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
The Registrant, on behalf of Cash Portfolio and Term Portfolio, undertakes
to deliver to each person who has received the prospectus or annual or
semiannual financial report for a fund in an electronic format, upon his or
her request and without charge, a paper copy of the prospectus or annual or
semiannual report for the fund.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all
of the requirements for the effectiveness of this Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Post-Effective Amendment No. 31 to the Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized,
in the City of Boston, and Commonwealth of Massachusetts, on the 25th day
of October 1995.
The North Carolina Capital Management Trust
By /s/ William L. Byrnes+
William L. Byrnes, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
(Signature) (Title) (Date)
/s/ Kenneth A. Rathgeber Treasurer October 25, 1995
Kenneth A. Rathgeber
/s/ William L. Byrnes* Trustee October 25, 1995
William L. Byrnes
/s/ John David Foust* Trustee October 25, 1995
John David Foust
/s/ W. Olin Nisbet III* Trustee October 25, 1995
W. Olin Nisbet III
/s/ Helen A. Powers** Trustee October 25, 1995
Helen A. Powers
/s/ Bertram H. Witham* Trustee October 25, 1995
Bertram H. Witham
+ Signature affixed by Arthur S. Loring pursuant to a power of attorney
dated July 17, 1991 and filed herewith.
* Signatures affixed by Robert C. Hacker pursuant to a power of attorney
dated April 17, 1991 and filed herewith.
** Signature affixed by Robert C. Hacker pursuant to a power of attorney
dated July 17, 1991 and filed herewith.
POWER OF ATTORNEY
I, the undersigned Trustee of The North Carolina Cash Management Trust:
Cash Portfolio and Term Portfolio (the Trust), hereby severally constitute
and appoint Arthur J. Brown, Robert C. Hacker, Richard M. Phillips, Dana L.
Platt and Arthur C. Delibert, each of them singly, my true and lawful
attorneys-in-fact, with full power of substitution, and with full power to
each of them, to sign for me and in my name in the appropriate capacities,
all Pre-Effective Amendments to any Registration Statements of the Trust,
any and all subsequent Post-Effective Amendments to said Registration
Statements, any Registration Statements on Form N-14, and any supplements
or other instruments in connection therewith, and generally to do all such
things in my name and behalf in connection therewith as said
attorneys-in-fact deem necessary or appropriate, to comply with the
provisions of the Securities Act of 1933 and Investment Company Act of
1940, and all related requirements of the Securities and Exchange
Commission, hereby ratifying and confirming all that said attorneys-in-fact
or their substitutes may do or cause to be done by virtue hereof.
WITNESS my hand on this 17th day of July 1991
/s/Helen A. Powers
__________________
Helen A. Powers
POWER OF ATTORNEY
We, the undersigned Trustees of The North Carolina Cash Management Trust:
Cash Portfolio and Term Portfolio (the Trust), hereby severally constitute
and appoint Arthur J. Brown, Robert C. Hacker, Richard M. Phillips, Dana L.
Platt and Arthur C. Delibert, each of them singly, our true and lawful
attorneys-in-fact, with full power of substitution, and with full power to
each of them, to sign for us and in our name in the appropriate capacities,
all Pre-Effective Amendments to any Registration Statements of the Trust,
any and all subsequent Post-Effective Amendments to said Registration
Statements, any Registration Statements on Form N-14, and any supplements
or other instruments in connection therewith, and generally to do all such
things in our names and behalf in connection therewith as said
attorneys-in-fact deem necessary or appropriate, to comply with the
provisions of the Securities Act of 1933 and Investment Company Act of
1940, and all related requirements of the Securities and Exchange
Commission, hereby ratifying and confirming all that said attorneys-in-fact
or their substitutes may do or cause to be done by virtue hereof.
WITNESS our hands on this 17th day of April 1991
/s/William L. Byrnes
________________________
William L. Byrnes
/s/John David Foust
________________________
John David Foust
/s/W. Olin Nisbet III
________________________
W. Olin Nisbet III
________________________
Helen A. Powers
/s/Bertram H. Witham
________________________
Bertram H. Witham
POWER OF ATTORNEY
I, the undersigned President of the North Carolina Cash Management Trust:
Cash Portfolio and Term Portfolio (the Trust), hereby severally constitute
and appoint Arthur S. Loring my true and lawful attorney-in-fact, with full
power of substitution, and with full power to sign for me and in my name in
the appropriate capacity, all Pre-Effective Amendments to any Registration
Statements of the Trust, any and all subsequent Post-Effective Amendments
to said Registration Statements, any Registration Statements on Form N-14,
and any supplements or other instruments in connection therewith, and
generally to do all such things in my name and behalf in connection
therewith as said attorney-in-fact deems necessary or appropriate, to
comply with the provisions of the Securities Act of 1933 and Investment
Company Act of 1940, and all related requirements of the Securities and
Exchange Commission, hereby ratifying and confirming all that said
attorney-in-fact or his substitutes may do or cause to be done by virtue
hereof.
WITNESS my hand on this 17th day of July 1991
/s/ William L. Byrnes
William L. Byrnes
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference, into the Prospectus
and Statement of Additional Information in Post-Effective Amendment No. 31
to the Registration Statement on Form N-1A of The North Carolina Capital
Management Trust: Cash Portfolio and Term Portfolio of our report dated
August 8, 1995, on the financial statements and financial highlights
included in the June 30, 1995 Annual Report to Shareholders of Cash
Portfolio and Term Portfolio.
We further consent to the references to our Firm under the headings
"Financial Highlights" in the Prospectus and "Auditor" in the Statement of
Additional Information.
/s/COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Boston, MA
October 27, 1995
Exhibit 16a
CASH PORTFOLIO
SCHEDULE FOR COMPUTATION OF PERFORMANCE CALCULATIONS
The 7-DAY YIELD AND EFFECTIVE YIELD are calculated according to the methods
prescribed in Form N-1A Item 22(a)(i) and (ii).
The 7-DAY YIELD is calculated according to the following formula:
7-Day Yield = (Base Period Return) x (365/7)
The EFFECTIVE YIELD is calculated according to the following formula:
Effective Yield = [(Base Period Return + 1)365/7] - 1
NCCMT: Cash Portfolio
Exhibit 16a
Fund #047
Date Milrate Total
01-Jul-940.000110 0.000110
02-Jul-940.000110 0.00022
03-Jul-940.000110 0.00033
04-Jul-940.000110 0.00044
05-Jul-940.000110 0.00055
06-Jul-940.000110 0.00066
07-Jul-940.000110 0.00077
08-Jul-940.000110 0.00088
09-Jul-940.000110 0.00099
10-Jul-940.000110 0.00110
11-Jul-940.000111 0.00121
12-Jul-940.000110 0.00132
13-Jul-940.000112 0.00143
14-Jul-940.000112 0.00154
15-Jul-940.000112 0.00165
16-Jul-940.000112 0.00176
17-Jul-940.000111 0.00188
18-Jul-940.000113 0.00199
19-Jul-940.000112 0.00210
20-Jul-940.000112 0.00221
21-Jul-940.000112 0.00232
22-Jul-940.000113 0.00244
23-Jul-940.000113 0.00255
24-Jul-940.000113 0.00266
25-Jul-940.000113 0.00278
26-Jul-940.000114 0.00289
27-Jul-940.000113 0.00300
28-Jul-940.000114 0.00312
29-Jul-940.000114 0.00323
30-Jul-940.000113 0.00334
31-Jul-940.000114 0.00346
01-Aug-940.000113 0.00357
02-Aug-940.000114 0.00369
03-Aug-940.000114 0.00380
04-Aug-940.000113 0.00391
05-Aug-940.000114 0.00403
06-Aug-940.000114 0.00414
07-Aug-940.000113 0.00425
08-Aug-940.000114 0.00437
09-Aug-940.000114 0.00448
10-Aug-940.000113 0.00459
11-Aug-940.000114 0.00471
12-Aug-940.000114 0.00482
13-Aug-940.000114 0.00494
14-Aug-940.000114 0.00505
15-Aug-940.000117 0.00517
16-Aug-940.000116 0.00528
17-Aug-940.000117 0.00540
18-Aug-940.000118 0.00552
19-Aug-940.000118 0.00564
20-Aug-940.000118 0.00575
21-Aug-940.000118 0.00587
22-Aug-940.000119 0.00599
23-Aug-940.000119 0.00611
24-Aug-940.000119 0.00623
25-Aug-940.000121 0.00635
26-Aug-940.000119 0.00647
27-Aug-940.000120 0.00659
28-Aug-940.000120 0.00671
29-Aug-940.000120 0.00683
30-Aug-940.000121 0.00695
31-Aug-940.000122 0.00707
01-Sep-940.000120 0.00719
02-Sep-940.000122 0.00731
03-Sep-940.000121 0.00744
04-Sep-940.000121 0.00756
05-Sep-940.000121 0.00768
06-Sep-940.000121 0.00780
07-Sep-940.000121 0.00792
08-Sep-940.000122 0.00804
09-Sep-940.000121 0.00816
10-Sep-940.000122 0.00828
11-Sep-940.000122 0.00841
12-Sep-940.000122 0.00853
13-Sep-940.000122 0.00865
14-Sep-940.000122 0.00877
15-Sep-940.000123 0.00890
16-Sep-940.000122 0.00902
17-Sep-940.000123 0.00914
18-Sep-940.000122 0.00926
19-Sep-940.000123 0.00939
20-Sep-940.000123 0.00951
21-Sep-940.000123 0.00963
22-Sep-940.000122 0.00975
23-Sep-940.000123 0.00988
24-Sep-940.000124 0.01000
25-Sep-940.000123 0.01012
26-Sep-940.000123 0.01025
27-Sep-940.000124 0.01037
28-Sep-940.000123 0.01049
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