THE NORTH CAROLINA CAPITAL MANAGEMENT TRUST: CASH PORTFOLIO
PERFORMANCE: THE BOTTOM LINE
To evaluate a money market fund's historical performance, you can look
at either total return or yield. Total return reflects the change in
the value of an investment, assuming reinvestment of the fund's
dividend income and capital gains (the profits earned upon the sale of
securities that have grown in value). Yield measures the income paid
by a fund. Since a money market fund tries to maintain a $1 share
price, yield is an important measure of performance. If Fidelity had
not reimbursed certain expenses, the past 10 years total returns would
have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED JUNE 30, 1998 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
NCCMT: CASH PORTFOLIO 5.47% 27.03% 73.57%
ALL TAXABLE MONEY MARKET FUNDS AVERAGE 5.17% 25.47% 69.26%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, one year, five years or 10
years. For example, if you had invested $1,000 in a fund that had a 5%
return over the past year, the value of your investment would be
$1,050. To measure how the fund's performance stacked up against its
peers, you can compare it to the all taxable money market funds
average, which reflects the performance of taxable money market funds
with similar objectives tracked by IBC Financial Data, Inc. The past
one year average represents a peer group of 887 money market funds.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED JUNE 30, 1998 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
NCCMT: CASH PORTFOLIO 5.47% 4.90% 5.67%
ALL TAXABLE MONEY MARKET FUNDS AVERAGE 5.17% 4.65% 5.45%
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year.
YIELDS
6/30/98 3/31/98 12/29/97 9/30/97 7/1/97
5.33% 5.33% 5.48% 5.31% 5.35%
NCCMT: CASH PORTFOLIO
ALL TAXABLE MONEY 5.04% 5.05% 5.12% 5.04% 5.04%
MARKET FUNDS AVERAGE
7/1/98 4/1/98 12/31/97 10/1/97 7/2/97
2.51% 2.53% 2.60% 2.65% 2.65%
MMDA
Row: 1, Col: 1, Value: 5.33
Row: 1, Col: 2, Value: 5.04
Row: 1, Col: 3, Value: 2.51
Row: 2, Col: 1, Value: 5.33
Row: 2, Col: 2, Value: 5.05
Row: 2, Col: 3, Value: 2.53
Row: 3, Col: 1, Value: 5.48
Row: 3, Col: 2, Value: 5.119999999999999
Row: 3, Col: 3, Value: 2.6
Row: 4, Col: 1, Value: 5.31
Row: 4, Col: 2, Value: 5.04
Row: 4, Col: 3, Value: 2.65
Row: 5, Col: 1, Value: 5.35
Row: 5, Col: 2, Value: 5.04
Row: 5, Col: 3, Value: 2.65
6% -
5% -
4% -
3% -
2% -
1% -
0%
Cash Portfolio
All Taxable Money
Market Funds Average
MMDA
YIELD refers to the income paid by the fund over a given period.
Yields for money market funds are usually for seven-day periods,
expressed as annual percentage rates. A yield that assumes income
earned is reinvested or compounded is called an effective yield. The
chart above shows the fund's current seven-day yield at quarterly
intervals over the past year. You can compare these yields to the all
taxable money market funds average and the average bank money market
deposit account (MMDA). Figures for the all taxable money market funds
average
are from IBC Financial Data, Inc. The MMDA average is supplied by BANK
RATE MONITOR.(Trademark)
A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS
WILL VARY, AND REFLECT PAST RESULTS RATHER THAN
PREDICT FUTURE PERFORMANCE.
COMPARING
PERFORMANCE
There are some important differences between
a bank money market deposit account (MMDA)
and a money market fund. First, the U.S.
government neither insures nor guarantees a
money market fund. In fact, there is no
assurance that a money market fund will
maintain a $1 share price. Second, a money
market fund returns to its shareholders income
earned by the fund's investments after
expenses. This is in contrast to banks, which set
their MMDA rates periodically based on
current interest rates, competitors' rates, and
internal criteria.
(checkmark)
THE NORTH CAROLINA CAPITAL MANAGEMENT TRUST: CASH PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
NOTE TO SHAREHOLDERS: Robert Duby became Portfolio Manager of The
North Carolina Capital Management Trust: Cash Portfolio on May 1,
1998.
Q. WHAT WAS THE INVESTMENT ENVIRONMENT LIKE DURING THE PAST YEAR, BOB?
A. The Federal Reserve Board's monetary policy has remained unchanged
over the past year, with the federal funds rate - the interest rate
banks charge each other for overnight loans - at 5.50%. Overall,
however, market rates were much more volatile than this steady fed
funds rate would indicate, as market sentiment fluctuated. At times
when the economy seemed especially strong and inflation appeared to be
around the corner, market participants expected an immediate
interest-rate increase by the Fed, a move that would have attempted to
slow the economy and head off inflation. At other times, many
participants expected the Fed to lower interest rates to
counterbalance the anticipated economic slowdown resulting from
problems in Asia. Indeed, minutes from the Fed's Open Market Committee
meetings indicate that the Fed's sentiment see-sawed back and forth
several times. The Fed was biased toward raising rates until its
meeting in December 1997, then maintained a neutral posture until the
end of March 1998, when it again indicated an inclination to raise
rates.
Q. WHAT WAS THE ECONOMIC BACKDROP LIKE DURING THE PERIOD?
A. Economic data continued to exceed most expectations. For example,
first-quarter 1998 real GDP - gross domestic product adjusted for
inflation - grew at a surprisingly strong rate of 5.4%. Growth at this
rate usually sparks inflationary pressures. Nevertheless, inflation
remained basically non-existent even though unemployment reached low
levels that historically have led to inflation. In my view, the
economic backdrop can't get much better. The dampening effects of the
Asian crisis to date have been minimal, apparently offset with strong
demand by consumers and producers in the U.S. economy.
Q. GIVEN THIS VOLATILE BACKDROP, WHAT KIND OF STRATEGY WAS PURSUED?
HOW DID THE FUND PERFORM?
A. The fund's average maturity remained in the mid- to high- 40-day
range, and tended to be longer than that of its peers. That's because
the market tended to factor more aggressive Fed interest-rate
increases than we anticipated. Overall, the fund's maturity generally
lengthened when the market was weak and shortened when the market
improved. The fund's seven-day yield on June 30, 1998, was 5.33%,
compared to 5.48% six months ago. Through June 30, 1998, the fund's
12-month total return was 5.47%, compared to 5.17% for the all taxable
money market funds average tracked by IBC Financial Data, Inc.
Q. WHAT IS YOUR OUTLOOK?
A. At this point, the key going forward will be the crisis in Asia and
the spillover effects it has on the rest of the world. This is the
wild card. The U.S. economy is expected to slow considerably during
the third quarter of 1998 from its rapid pace during the first half.
We've begun to see signs that most of the good news on inflation may
be behind us. However, with the strength in employment and the
generally strong upbeat feeling of the general public evidenced by
strong consumer confidence numbers and positive readings from in the
manufacturing sector, the fund will be managed very cautiously.
Continued strong economic growth will at some point lead the Federal
Reserve to raise rates, but a move is not expected in the immediate
future. The fund will be positioned accordingly.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE ANNUAL REPORT AS
STATED ON THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY
TIME BASED ON MARKET AND OTHER CONDITIONS.
FUND FACTS
GOAL: seeks to obtain high current income
consistent with the preservation of capital and
liquidity, and to maintain a constant net asset
value per share of $1.00
START DATE: September 2, 1982
SIZE: as of June 30, 1998, more than $2.4 billion
MANAGER: Robert Duby, since May 1998; joined
Fidelity in 1982
(checkmark)
THE NORTH CAROLINA CAPITAL MANAGEMENT TRUST: CASH PORTFOLIO
INVESTMENTS JUNE 30, 1998
Showing Percentage of Total Value of Investment in Securities
COMMERCIAL PAPER (A) - 96.6%
DUE ANNUALIZED YIELD AT PRINCIPAL VALUE
DATE TIME OF PURCHASE AMOUNT (NOTE 1)
American Express Credit Corp.
7/2/98 6.00% $ 6,000,000 $ 5,999,000
8/13/98 5.57 40,000,000 39,736,267
8/13/98 5.58 10,000,000 9,934,903
American General Finance Corp.
7/28/98 5.57 20,000,000 19,917,350
Asset Securitization Coop. Corp.
8/5/98 5.64 30,000,000 29,836,667
8/25/98 5.60 14,000,000 13,881,933
9/1/98 5.68 10,000,000 9,903,211
Associates Corp. of North America
7/22/98 5.56 30,000,000 29,903,575
7/22/98 5.57 10,000,000 9,967,800
7/23/98 5.58 10,000,000 9,966,267
8/19/98 5.58 25,000,000 24,812,847
8/24/98 5.60 25,000,000 24,793,000
9/22/98 5.60 8,000,000 7,898,556
Atlantic Richfield Co.
8/31/98 5.60 20,000,000 19,812,256
9/14/98 5.62 30,000,000 29,653,750
AVCO Financial Services, Inc.
8/10/98 5.61 10,000,000 9,938,667
8/11/98 5.61 25,000,000 24,842,833
8/12/98 5.60 10,000,000 9,935,717
8/12/98 5.61 10,000,000 9,935,600
9/2/98 5.61 24,000,000 23,766,900
9/14/98 5.60 36,000,000 35,586,000
9/17/98 5.60 12,000,000 11,856,220
Bear Stearns Cos., Inc.
7/23/98 5.58 20,000,000 19,932,411
7/28/98 5.60 5,000,000 4,979,263
7/29/98 5.60 20,000,000 19,913,978
8/5/98 5.61 25,000,000 24,865,712
8/24/98 5.60 15,000,000 14,875,800
Beneficial Corp.
7/15/98 5.60 10,000,000 9,978,611
7/21/98 5.57 50,000,000 49,846,667
8/19/98 5.59 50,000,000 49,622,972
8/31/98 5.61 10,000,000 9,906,297
CIESCO, L.P.
7/17/98 5.58 7,650,000 7,631,164
7/23/98 5.57 25,000,000 24,915,972
8/21/98 5.60 14,000,000 13,890,123
9/11/98 5.60 23,000,000 22,746,080
9/16/98 5.59 50,000,000 49,411,806
DUE ANNUALIZED YIELD AT PRINCIPAL VALUE
DATE TIME OF PURCHASE AMOUNT (NOTE 1)
CIT Group Holdings, Inc.
7/22/98 5.58% $ 50,000,000 $ 49,839,000
7/28/98 5.58 11,000,000 10,954,584
10/13/98 5.62 10,000,000 9,840,533
Citibank Credit Card Master Trust I (Dakota Certificate Program)
7/14/98 5.58 10,000,000 9,980,067
7/22/98 5.58 15,000,000 14,951,613
7/27/98 5.60 10,000,000 9,959,808
7/28/98 5.60 20,000,000 19,916,525
8/6/98 5.60 50,000,000 49,722,250
Commercial Credit Group, Inc.
7/27/98 5.57 10,000,000 9,960,206
7/30/98 5.58 35,000,000 34,844,367
8/3/98 5.59 30,000,000 29,848,475
8/24/98 5.60 15,000,000 14,875,125
Delaware Funding Corp.
7/22/98 5.61 24,598,000 24,517,934
7/27/98 5.60 13,387,000 13,333,147
7/31/98 5.59 20,286,000 20,192,853
du Pont (E.I.) de Nemours & Co.
8/26/98 5.57 25,000,000 24,786,500
10/26/98 5.61 25,000,000 24,553,125
10/28/98 5.60 50,000,000 49,095,931
10/29/98 5.60 25,000,000 24,544,167
Enterprise Funding Corp.
7/10/98 5.60 9,655,000 9,641,604
7/13/98 5.57 7,538,000 7,524,080
7/22/98 5.57 15,096,000 15,047,303
7/29/98 5.59 12,145,000 12,092,857
7/30/98 5.60 29,348,000 29,217,263
8/10/98 5.62 20,000,000 19,876,000
Exxon Asset Management Co.
7/2/98 6.05 19,891,000 19,887,657
Ford Motor Credit Co.
7/14/98 5.57 20,000,000 19,960,133
8/19/98 5.58 40,000,000 39,700,556
General Electric Capital Corp.
7/21/98 5.57 5,000,000 4,984,833
7/28/98 5.58 40,000,000 39,834,400
7/31/98 5.58 10,000,000 9,954,500
8/6/98 5.54 45,000,000 44,757,450
9/10/98 5.61 15,000,000 14,836,996
10/8/98 5.63 20,000,000 19,696,950
General Electric Capital Services, Inc.
8/13/98 5.61 15,000,000 14,901,100
COMMERCIAL PAPER (A) - CONTINUED
DUE ANNUALIZED YIELD AT PRINCIPAL VALUE
DATE TIME OF PURCHASE AMOUNT (NOTE 1)
General Electric Capital Services, Inc. - continued
10/28/98 5.65% $ 20,000,000 $ 19,637,050
General Electric Co.
7/20/98 5.58 5,000,000 4,985,433
9/24/98 5.60 20,000,000 19,738,861
General Motors Acceptance Corp.
7/22/98 5.58 45,000,000 44,854,838
8/17/98 5.59 50,000,000 49,639,014
9/30/98 5.63 10,000,000 9,860,972
Goldman Sachs Group, L.P. (The)
8/27/98 5.60 25,000,000 24,780,906
Household Finance Corp.
7/1/98 6.50 25,000,000 25,000,000
7/20/98 5.59 10,000,000 9,970,867
IBM Corp.
7/22/98 5.57 10,000,000 9,967,800
Kitty Hawk Funding Corp.
7/9/98 5.57 5,000,000 4,993,867
Merrill Lynch & Co., Inc.
7/20/98 5.59 13,000,000 12,962,127
10/14/98 5.65 40,000,000 39,356,000
10/21/98 5.61 25,000,000 24,576,111
11/30/98 5.66 25,000,000 24,419,444
Monsanto Co.
7/13/98 5.53 7,150,000 7,137,178
7/14/98 5.51 15,000,000 14,970,858
8/17/98 5.53 8,000,000 7,943,913
8/17/98 5.56 7,000,000 6,950,650
9/29/98 5.60 10,000,000 9,862,500
Morgan Stanley, Dean Witter, Discover & Co.
7/1/98 6.25 65,000,000 65,000,000
8/18/98 5.60 30,000,000 29,778,800
9/9/98 5.61 20,000,000 19,785,333
Morgan (J.P.) & Co.
7/13/98 5.52 40,000,000 39,928,400
10/15/98 5.63 15,000,000 14,757,083
New Center Asset Trust
7/13/98 5.55 10,000,000 9,981,583
7/27/98 5.60 35,000,000 34,859,961
9/21/98 5.61 35,000,000 34,559,136
9/22/98 5.62 15,000,000 14,808,408
9/30/98 5.64 30,000,000 29,582,158
Preferred Receivables Funding Corp.
7/8/98 5.55 20,000,000 19,978,494
DUE ANNUALIZED YIELD AT PRINCIPAL VALUE
DATE TIME OF PURCHASE AMOUNT (NOTE 1)
Preferred Receivables Funding Corp. - continued
8/4/98 5.60% $ 1,000,000 $ 994,749
8/4/98 5.61 10,000,000 9,947,394
8/6/98 5.59 30,000,000 29,833,500
8/25/98 5.60 9,000,000 8,924,100
Southern Co. Group
7/13/98 5.56 15,000,000 14,972,350
Three Rivers Funding Corp.
7/7/98 5.57 10,000,000 9,990,750
7/10/98 5.57 15,000,000 14,979,225
7/21/98 5.60 16,000,000 15,950,489
Transamerica Finance Corp.
7/29/98 5.59 3,592,000 3,576,578
Triple A One Funding Corp.
7/7/98 5.58 35,642,000 35,609,064
7/9/98 5.61 8,539,000 8,528,431
7/10/98 5.57 3,000,000 2,995,845
7/10/98 5.61 6,343,000 6,334,167
7/15/98 5.56 42,377,000 42,285,866
7/15/98 5.57 5,000,000 4,989,228
7/22/98 5.60 24,000,000 23,922,020
TOTAL COMMERCIAL PAPER 2,420,487,568
FEDERAL AGENCIES - 3.0%
FREDDIE MAC - DISCOUNT NOTES - 3.0%
9/18/98 5.50 75,000,000 74,106,312
REPURCHASE AGREEMENTS - 0.4%
MATURITY
AMOUNT
In a joint trading account
dated 6/30/98 due 7/1/98
(U.S. Treasury Obligations)
At 5.95% $ 8,919,474 8,918,000
TOTAL INVESTMENTS - 100% $ 2,503,511,880
Total Cost for Income Tax Purposes $ 2,503,511,880
LEGEND
(a) Cash Portfolio only purchases commercial paper with the highest
possible ratings from at least one nationally recognized rating
service. A substantial portion of Cash Portfolio's investments are in
commercial paper of banks, finance companies and companies in the
securities industry.
INCOME TAX INFORMATION
At June 30, 1998, the fund had a capital loss carryforward of
approximately $54,700 of which $49,200 and $5,500 will expire on June
30, 2002 and 2004, respectively.
THE NORTH CAROLINA CAPITAL MANAGEMENT TRUST: CASH PORTFOLIO
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998
ASSETS
INVESTMENT IN SECURITIES, AT VALUE (INCLUDING REPURCHASE AGREEMENTS OF $8,918,000) - $ 2,503,511,880
SEE ACCOMPANYING SCHEDULE
INTEREST RECEIVABLE 1,474
TOTAL ASSETS 2,503,513,354
LIABILITIES
PAYABLE TO CUSTODIAN BANK $ 409,881
PAYABLE FOR INVESTMENTS PURCHASED 19,738,861
PAYABLE FOR FUND SHARES REDEEMED 110,186
DISTRIBUTIONS PAYABLE 1,797,898
ACCRUED MANAGEMENT FEE 685,706
DEFERRED TRUSTEES' COMPENSATION 345,358
TOTAL LIABILITIES 23,087,890
NET ASSETS $ 2,480,425,464
NET ASSETS CONSIST OF:
PAID IN CAPITAL $ 2,480,480,188
ACCUMULATED NET REALIZED GAIN (LOSS) ON INVESTMENTS (54,724)
NET ASSETS, FOR 2,480,454,224 SHARES OUTSTANDING $ 2,480,425,464
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER SHARE $1.00
($2,480,425,464 (DIVIDED BY) 2,480,454,224 SHARES)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF OPERATIONS
YEAR ENDED JUNE 30, 1998
INTEREST INCOME $ 139,584,957
EXPENSES
MANAGEMENT FEE $ 8,173,407
NON-INTERESTED TRUSTEES' COMPENSATION 91,916
TOTAL EXPENSES BEFORE REDUCTIONS 8,265,323
EXPENSE REDUCTIONS (24,849) 8,240,474
NET INTEREST INCOME 131,344,483
NET REALIZED GAIN (LOSS) ON INVESTMENTS 3,799
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 131,348,282
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
JUNE 30, JUNE 30,
1998 1997
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS $ 131,344,483 $ 106,084,220
NET INTEREST INCOME
NET REALIZED GAIN (LOSS) 3,799 5,054
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 131,348,282 106,089,274
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INTEREST INCOME (131,344,483) (106,084,220)
SHARE TRANSACTIONS AT NET ASSET VALUE OF $1.00 PER SHARE 7,892,756,579 6,770,047,301
PROCEEDS FROM SALES OF SHARES
REINVESTMENT OF DISTRIBUTIONS FROM NET INTEREST INCOME 112,412,218 93,293,085
COST OF SHARES REDEEMED (7,508,671,816) (6,619,741,151)
496,496,981 243,599,235
NET INCREASE (DECREASE) IN NET ASSETS AND SHARES RESULTING FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 496,500,780 243,604,289
NET ASSETS
BEGINNING OF PERIOD 1,983,924,684 1,740,320,395
END OF PERIOD $ 2,480,425,464 $ 1,983,924,684
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
YEARS ENDED JUNE 30,
1998 1997 1996 1995 1994
SELECTED PER-SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
INCOME FROM INVESTMENT OPERATIONS .053 .051 .053 .052 .031
NET INTEREST INCOME
LESS DISTRIBUTIONS
FROM NET INTEREST INCOME (.053) (.051) (.053) (.052) (.031)
NET ASSET VALUE, END OF PERIOD $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
TOTAL RETURN 5.47% 5.25% 5.43% 5.28% 3.10%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (IN MILLIONS) $ 2,480 $ 1,984 $ 1,740 $ 1,589 $ 1,221
RATIO OF EXPENSES TO AVERAGE NET ASSETS .34% .35% .36% .39% .39%
RATIO OF NET INTEREST INCOME TO AVERAGE NET ASSETS 5.34% 5.13% 5.27% 5.22% 3.05%
</TABLE>
THE NORTH CAROLINA CAPITAL MANAGEMENT TRUST: TERM PORTFOLIO
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change, or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value). You can also look at the fund's income, as
reflected in the fund's yield, to measure performance. If Fidelity had
not reimbursed certain expenses, the past 10 years total returns would
have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED JUNE 30, 1998 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
NCCMT: TERM PORTFOLIO 5.63% 27.71% 80.76%
LB 1-YEAR US TREASURY 5.91% 30.30% 85.00%
SB 1-YEAR US TREASURY 5.95% 30.18% 86.49%
SHORT US GOVERNMENT BOND FUNDS AVERAGE 5.94% 26.53% 87.17%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, one year, five years or 10
years. For example, if you had invested $1,000 in a fund that had a 5%
return over the past year, the value of your investment would be
$1,050. You can compare the fund's returns to the performance of both
the Lehman Brothers 1-Year US Treasury Index and the Salomon Brothers
1-Year US Treasury Index - broad measures of the performance of
short-term treasury bills. To measure how the fund's performance
stacked up against its peers, you can compare it to the short U.S.
government bond funds average, which reflects the performance of
mutual funds with similar objectives tracked by Lipper Analytical
Services, Inc. The past one year average represents a peer group of 74
mutual funds. These benchmarks include reinvested dividends and
capital gains, if any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED JUNE 30, 1998 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
NCCMT: TERM PORTFOLIO 5.63% 5.01% 6.10%
LB 1-YEAR US TREASURY 5.91% 5.44% 6.35%
SB 1-YEAR US TREASURY 5.95% 5.42% 6.43%
SHORT US GOVERNMENT BOND FUNDS AVERAGE 5.94% 4.81% 6.43%
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER 10 YEARS
NCCMT-Term Portfolio LB 1-Year Treasury Index
00620 LB068
1988/06/30 10000.00 10000.00
1988/07/31 10037.22 10025.87
1988/08/31 10085.82 10062.19
1988/09/30 10164.47 10143.45
1988/10/31 10245.15 10220.62
1988/11/30 10262.38 10238.78
1988/12/31 10325.30 10276.00
1989/01/31 10399.43 10355.89
1989/02/28 10449.19 10398.57
1989/03/31 10507.17 10457.58
1989/04/30 10617.95 10585.14
1989/05/31 10720.48 10693.18
1989/06/30 10843.74 10845.25
1989/07/31 10957.14 10966.45
1989/08/31 10980.42 11011.39
1989/09/30 11047.74 11028.19
1989/10/31 11162.81 11167.10
1989/11/30 11241.21 11258.80
1989/12/31 11309.78 11321.44
1990/01/31 11355.47 11365.93
1990/02/28 11416.23 11434.02
1990/03/31 11483.09 11491.22
1990/04/30 11535.40 11549.78
1990/05/31 11650.02 11668.71
1990/06/30 11727.12 11771.30
1990/07/31 11843.51 11883.43
1990/08/31 11899.62 11953.33
1990/09/30 11977.50 12039.58
1990/10/31 12082.61 12143.08
1990/11/30 12184.65 12231.60
1990/12/31 12302.49 12363.70
1991/01/31 12395.89 12459.94
1991/02/28 12481.60 12534.84
1991/03/31 12545.18 12622.45
1991/04/30 12642.71 12709.61
1991/05/31 12703.51 12763.18
1991/06/30 12762.81 12807.66
1991/07/31 12837.03 12894.82
1991/08/31 12949.22 13009.67
1991/09/30 13031.68 13105.91
1991/10/31 13114.43 13201.69
1991/11/30 13208.24 13304.73
1991/12/31 13343.05 13425.48
1992/01/31 13376.53 13456.35
1992/02/29 13417.15 13487.22
1992/03/31 13422.01 13510.37
1992/04/30 13521.28 13583.46
1992/05/31 13590.32 13641.11
1992/06/30 13637.83 13711.47
1992/07/31 13678.74 13810.43
1992/08/31 13760.40 13872.17
1992/09/30 13841.11 13962.05
1992/10/31 13745.69 13933.00
1992/11/30 13704.43 13893.96
1992/12/31 13817.82 13924.83
1993/01/31 13960.02 13994.28
1993/02/28 14012.65 14039.22
1993/03/31 14050.35 14082.80
1993/04/30 14099.57 14130.92
1993/05/31 14105.80 14130.92
1993/06/30 14153.25 14198.10
1993/07/31 14194.19 14235.78
1993/08/31 14246.12 14300.69
1993/09/30 14281.61 14342.00
1993/10/31 14319.72 14375.60
1993/11/30 14342.40 14400.56
1993/12/31 14379.43 14450.50
1994/01/31 14431.13 14510.87
1994/02/28 14407.35 14493.62
1994/03/31 14417.06 14496.35
1994/04/30 14410.83 14484.09
1994/05/31 14449.86 14514.96
1994/06/30 14502.74 14564.89
1994/07/31 14570.93 14657.95
1994/08/31 14612.62 14708.79
1994/09/30 14659.03 14730.13
1994/10/31 14707.76 14790.50
1994/11/30 14714.27 14785.96
1994/12/31 14771.28 14839.08
1995/01/31 14905.47 14985.25
1995/02/28 14985.79 15119.62
1995/03/31 15076.24 15209.04
1995/04/30 15162.57 15320.71
1995/05/31 15268.60 15455.54
1995/06/30 15354.25 15549.50
1995/07/31 15410.88 15625.77
1995/08/31 15482.03 15700.21
1995/09/30 15550.63 15770.58
1995/10/31 15636.71 15860.00
1995/11/30 15736.62 15953.06
1995/12/31 15826.66 16047.03
1996/01/31 15913.74 16150.07
1996/02/29 15934.72 16170.96
1996/03/31 15961.12 16221.34
1996/04/30 16017.90 16281.27
1996/05/31 16073.62 16345.73
1996/06/30 16160.44 16436.97
1996/07/31 16220.24 16499.61
1996/08/31 16286.72 16580.42
1996/09/30 16404.53 16691.63
1996/10/31 16508.54 16817.38
1996/11/30 16592.53 16905.44
1996/12/31 16642.87 16965.36
1997/01/31 16712.92 17046.62
1997/02/28 16788.07 17107.90
1997/03/31 16809.10 17151.48
1997/04/30 16916.58 17256.34
1997/05/31 17013.64 17363.02
1997/06/30 17111.72 17467.88
1997/07/31 17214.59 17592.72
1997/08/31 17265.15 17653.09
1997/09/30 17374.66 17748.42
1997/10/31 17458.51 17846.93
1997/11/30 17507.42 17908.67
1997/12/31 17604.89 17992.65
1998/01/31 17706.94 18111.13
1998/02/28 17750.50 18157.43
1998/03/31 17837.18 18248.67
1998/04/30 17910.42 18332.65
1998/05/31 17986.79 18412.55
1998/06/30 18075.56 18500.16
IMATRL PRASUN SHR__CHT 19980630 19980710 105446 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in North Carolina Capital Management Trust: Term Portfolio on
June 30, 1988. As the chart shows, by June 30, 1998, the value of the
investment would have grown to $18,076 - an 80.76% increase on the
initial investment. For comparison, look at how the Lehman Brothers
1-Year US Treasury Index did over the same period. With dividends and
capital gains, if any, reinvested, the same $10,000 investment would
have grown to $18,500 - an 85.00% increase.
Beginning with this report, the fund will compare its performance to
that of the Lehman Brothers 1-Year US Treasury Index rather than the
Salomon Brothers 1-Year US Treasury Index. The indexes include the
same type of bonds, and their performance is not materially different.
The fund is changing to the Lehman Brothers index mainly because
Lehman Brothers indexes are used by most other Fidelity bond funds.
For comparison purposes, both indexes are shown on page A11.
UNDERSTANDING
PERFORMANCE
HOW A FUND DID YESTERDAY IS NO GUARANTEE OF
HOW IT WILL DO TOMORROW. BOND PRICES, FOR
EXAMPLE, GENERALLY MOVE IN THE OPPOSITE
DIRECTION OF INTEREST RATES. IN TURN, THE SHARE
PRICE, RETURN AND YIELD OF A FUND THAT INVESTS IN
BONDS WILL VARY. THAT MEANS IF YOU SELL YOUR
SHARES DURING A MARKET DOWNTURN, YOU MIGHT
LOSE MONEY. BUT IF YOU CAN RIDE OUT THE MARKET'S
UPS AND DOWNS, YOU MAY HAVE A GAIN.
(CHECKMARK)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
TOTAL RETURN COMPONENTS
YEARS ENDED JUNE 30,
1998 1997 1996 1995 1994
DIVIDEND RETURNS 7.08% 7.62% 6.16% 5.26% 3.17%
CAPITAL RETURNS -1.45% -1.73% -0.91% 0.61% -0.70%
TOTAL RETURNS 5.63% 5.89% 5.25% 5.87% 2.47%
</TABLE>
TOTAL RETURN COMPONENTS include both dividend returns and capital
returns. A dividend return reflects the actual dividends paid by the
fund. A capital return reflects both the amount paid by the fund to
shareholders as capital gain distributions and changes in the fund's
share price. Both returns assume the dividends or capital gains paid
by the fund are reinvested, if any.
DIVIDENDS AND YIELD
PERIODS ENDED JUNE 30, 1998 PAST 1 PAST 6 PAST 1
MONTH MONTHS YEAR
DIVIDENDS PER SHARE 4.69(CENTS) 32.25(CENTS) 66.62(CENTS)
ANNUALIZED DIVIDEND RATE 6.00% 6.81% 6.96%
30-DAY ANNUALIZED YIELD 5.29% - -
DIVIDENDS per share show the income paid by the fund for a set period.
If you annualize this number, based on an average share price of $9.51
over the past one month, $9.55 over the past six months and $9.57 over
the past one year, you can compare the fund's income over these three
periods. The 30-day annualized YIELD is a standard formula for all
funds based on the yields of the bonds in the fund, averaged over the
past 30 days. This figure shows you the yield characteristics of the
fund's investments at the end of the period. It also helps you compare
funds from different companies on an equal basis.
THE NORTH CAROLINA CAPITAL MANAGEMENT TRUST: TERM PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Curt Hollingsworth, Portfolio Manager of The North
Carolina Capital Management Trust: Term Portfolio
Q. HOW DID THE FUND PERFORM, CURT?
A. For the 12-month period that ended June 30, 1998, the fund had a
total return of 5.63%. That compared to the 5.94% return of the short
U.S. government bond funds average for the same period, according to
Lipper Analytical Services. The Lehman Brothers 1-Year US Treasury
Index, which most closely resembles the securities held in the fund,
returned 5.91% over the same 12-month period.
Q. WHAT ROLE DOES THE LEHMAN BROTHERS 1-YEAR U.S. TREASURY INDEX PLAY
IN THE MANAGEMENT OF THE FUND?
A. I use it as a representation of the overall market in which the
fund invests. The index includes most of the universe of government
and government agency bonds with maturities of between one and five
years. I manage the fund to have similar overall interest-rate risk to
its benchmark index, but beyond that the fund can vary significantly
from the index. With respect to sector, issuer and structural
composition, the fund's holdings reflect Fidelity's research
conclusions on the relative values of bonds.
Q. HOW DID YOU STRUCTURE THE PORTFOLIO DURING THE PERIOD?
A. Throughout the year, I kept the fund almost exclusively invested in
Treasury securities. I did that because I didn't feel that agency
securities - which are the other types of securities in which I can
invest - offered attractive yields. I selected Treasury issues with
maturities close to a one-year Treasury bill so that the fund's
holdings closely replicated the characteristics of that security.
Q. WHAT'S YOUR OUTLOOK?
A. At the end of the period, bonds were selling at prices that
reflected the best-case scenario - low inflation and falling interest
rates. To illustrate, the yield on a Treasury security with a two-year
maturity was virtually the same as the yield on the
very-short-maturity securities. To me, that suggests that many
investors are expecting the Federal Reserve Board to lower interest
rates. If the Fed surprises investors by hiking rates instead, bonds
could suffer.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE ANNUAL REPORT AS
STATED ON THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY
TIME BASED ON MARKET AND OTHER CONDITIONS.
(solid bullet)
(solid bullet)
FUND FACTS
GOAL:
START DATE:
SIZE:
MANAGER:
(checkmark)
THE NORTH CAROLINA CAPITAL MANAGEMENT TRUST: TERM PORTFOLIO
INVESTMENTS JUNE 30, 1998
Showing Percentage of Total Value of Investment in Securities
U.S. GOVERNMENT AND GOVERNMENT
AGENCY OBLIGATIONS - 96.4%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
U.S. TREASURY OBLIGATIONS - 96.4%
U.S. TREASURY NOTES:
6.375%, 5/15/99 $ 55,000,000 $ 55,395,450
7.125%, 9/30/99 16,940,000 17,262,876
TOTAL U.S. GOVERNMENT AND
GOVERNMENT AGENCY OBLIGATIONS
(Cost $72,743,600) 72,658,326
CASH EQUIVALENTS - 3.6%
MATURITY
AMOUNT
In a joint trading account
dated 6/30/98 due 7/1/98
(U.S. Treasury Obligations)
At 5.95% $ 2,722,450 2,722,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $75,465,600) $ 75,380,326
INCOME TAX INFORMATION
At June 30, 1998, the aggregate cost of investment securities for
income tax purposes was $75,465,600. Net unrealized depreciation
aggregated $85,274, all of which related to depreciated investment
securities.
At June 30, 1998, the fund had a capital loss carryforward of
approximately $2,104,100 of which $244,200, $450,100 and $1,409,800
will expire on June 30, 2003, 2005 and 2006, respectively.
The fund intends to elect to defer to its fiscal year ending June 30,
1999 approximately $801,400 of losses recognized during the period
November 1, 1997 to June 30, 1998.
THE NORTH CAROLINA CAPITAL MANAGEMENT TRUST: TERM PORTFOLIO
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1998
ASSETS
INVESTMENT IN SECURITIES, AT VALUE (INCLUDING REPURCHASE AGREEMENTS
OF $2,722,000) (COST $ 75,380,326
$75,465,600) - SEE ACCOMPANYING SCHEDULE
CASH 391
INTEREST RECEIVABLE 737,946
TOTAL ASSETS 76,118,663
LIABILITIES
PAYABLE FOR FUND SHARES REDEEMED $ 400,000
DISTRIBUTIONS PAYABLE 145,673
ACCRUED MANAGEMENT FEE 21,341
DEFERRED TRUSTEES' COMPENSATION 13,474
TOTAL LIABILITIES 580,488
NET ASSETS $ 75,538,175
NET ASSETS CONSIST OF:
PAID IN CAPITAL $ 78,495,478
UNDISTRIBUTED NET INVESTMENT INCOME 33,450
ACCUMULATED UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON INVESTMENTS (2,905,479)
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS (85,274)
NET ASSETS, FOR 7,941,158 SHARES OUTSTANDING $ 75,538,175
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER SHARE
($75,538,175 (DIVIDED BY) 7,941,158 $9.51
SHARES)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF OPERATIONS
YEAR ENDED JUNE 30, 1998
INVESTMENT INCOME $ 5,173,138
INTEREST
EXPENSES .
MANAGEMENT FEE $ 250,006
NON-INTERESTED TRUSTEES' COMPENSATION 2,839
TOTAL EXPENSES BEFORE REDUCTIONS 252,845
EXPENSE REDUCTIONS (1,155) 251,690
NET INVESTMENT INCOME 4,921,448
REALIZED AND UNREALIZED GAIN (LOSS) (1,180,156)
NET REALIZED GAIN (LOSS) ON INVESTMENT SECURITIES
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENT SECURITIES 201,545
NET GAIN (LOSS) (978,611)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 3,942,837
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
JUNE 30, JUNE 30,
1998 1997
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS $ 4,921,448 $ 4,979,596
NET INVESTMENT INCOME
NET REALIZED GAIN (LOSS) (1,180,156) (1,179,282)
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) 201,545 (16,766)
3,942,837 3,783,548
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME (4,929,033) (4,981,644)
SHARE TRANSACTIONS 8,868,073 11,213,091
NET PROCEEDS FROM SALES OF SHARES
REINVESTMENT OF DISTRIBUTIONS 3,286,603 3,349,754
COST OF SHARES REDEEMED (4,357,338) (8,992,521)
. 7,797,338 5,570,324
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS
6,811,142 4,372,228
TOTAL INCREASE (DECREASE) IN NET ASSETS
NET ASSETS
BEGINNING OF PERIOD 68,727,033 64,354,805
$ 75,538,175 $ 68,727,033
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT INCOME
OF $33,450 AND $12,966, RESPECTIVELY)
OTHER INFORMATION
SHARES
SOLD 926,501 1,151,372
ISSUED IN REINVESTMENT OF DISTRIBUTIONS 343,490 344,271
REDEEMED (454,028) (925,196)
NET INCREASE (DECREASE) 815,963 570,447
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
. YEARS ENDED JUNE 30,
. 1998 1997 1996 1995 1994
SELECTED PER-SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.650 $ 9.820 $ 9.910 $ 9.850 $ 9.940
INCOME FROM INVESTMENT OPERATIONS .660 A .729 A .601 .505 .288
NET INVESTMENT INCOME
NET REALIZED AND UNREALIZED GAIN (LOSS) (.134) (.170) (.093) .059 (.046)
TOTAL FROM INVESTMENT OPERATIONS .526 .559 .508 .564 .242
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.666) (.729) (.598) (.504) (.312)
FROM NET REALIZED GAIN - - - - (.020)
TOTAL DISTRIBUTIONS (.666) (.729) (.598) (.504) (.332)
NET ASSET VALUE, END OF PERIOD $ 9.510 $ 9.650 $ 9.820 $ 9.910 $ 9.850
TOTAL RETURN C 5.63% 5.89% 5.25% 5.87% 2.47%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (IN MILLIONS) $ 76 $ 69 $ 64 $ 70 $ 66
RATIO OF EXPENSES TO AVERAGE NET ASSETS .36% .37% .38% .41% .41%
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS .35% B .37% .38% .41% .41%
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 6.93% 7.48% 6.06% 5.12% 3.14%
PORTFOLIO TURNOVER RATE 433% 232% 89% 519% 494%
</TABLE>
A NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
B FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
NOTES TO FINANCIAL STATEMENTS
For the period ended June 30, 1998
1. SIGNIFICANT ACCOUNTING POLICIES.
Cash Portfolio and Term Portfolio (the funds) are funds of The North
Carolina Capital Management Trust (the trust). The trust is registered
under the Investment Company Act of 1940, as amended (the 1940 Act),
as an open-end management investment company organized as a
Massachusetts business trust. Shares of the trust are offered
exclusively to local governments and public authorities of the State
of North Carolina. Each fund is authorized to issue an unlimited
number of shares. The financial statements have been prepared in
conformity with generally accepted accounting principles which require
management to make certain estimates and assumptions at the date of
the financial statements. The following summarizes the significant
accounting policies of the funds:
SECURITY VALUATION.
CASH PORTFOLIO. As permitted under Rule 2a-7 of the 1940 Act, and
certain conditions therein, securities are valued initially at cost
and thereafter assume a constant amortization to maturity of any
discount or premium.
TERM PORTFOLIO. Securities are valued based upon a computerized matrix
system and/or appraisals by a pricing service, both of which consider
market transactions and dealer-supplied valuations. Securities for
which quotations are not readily available are valued at their fair
value as determined in good faith under consistently applied
procedures under the general supervision of the Board of Trustees.
Short-term securities with remaining maturities of sixty days or less
for which quotations are not readily available are valued at amortized
cost or original cost plus accrued interest, both of which approximate
current value.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, each fund is not subject to
income taxes to the extent that it distributes substantially all of
its taxable income for the fiscal year. The schedules of investments
include information regarding income taxes under the caption "Income
Tax Information."
INVESTMENT INCOME.
CASH PORTFOLIO. Interest income, which includes amortization of
premium and accretion of discount, is accrued as earned.
TERM PORTFOLIO. Interest income, which includes accretion of original
issue discount, is accrued as earned.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
The non-interested Trustees may elect to defer receipt of all or a
portion of their annual fees under the Trustees' Deferred Compensation
Plan ("the Plan"). Interest is accrued on amounts deferred under the
Plan based on the prevailing 90 day Treasury Bill rate.
DISTRIBUTIONS TO SHAREHOLDERS.
CASH PORTFOLIO. Dividends are declared daily and paid monthly from net
interest income.
TERM PORTFOLIO. Distributions are declared daily and paid monthly from
net investment income. Distributions from realized gains, if any, are
recorded on the ex-dividend date.
Income and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. These differences, which may result in
distribution reclassifications, are primarily due to differing
treatments for market discount, capital loss carryforwards and losses
deferred due to wash sales and excise tax regulations.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Undistributed net investment income and accumulated undistributed net
realized gain (loss) on investments may include temporary book and tax
basis differences which will reverse in a subsequent period. Any
taxable income or gain remaining at fiscal year end is distributed in
the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the funds, along with other
affiliated entities of Fidelity Management & Research Company (FMR),
may transfer uninvested cash balances into one or more joint trading
accounts. These balances are invested in one or more repurchase
agreements for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
securities are transferred to an account of the funds, or to the Joint
Trading Account, at a bank custodian. The securities are
marked-to-market daily and maintained at a value at least equal to the
principal amount of the repurchase agreement (including accrued
interest). FMR, the funds' investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
3. PURCHASES AND SALES OF INVESTMENTS.
TERM PORTFOLIO. Purchases and sales of securities, other than
short-term securities, aggregated $283,832,809 and $278,024,569,
respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As each fund's investment adviser, FMR pays most
expenses, except the compensation of the non-interested Trustees and
certain exceptions such as interest, taxes, brokerage commissions and
extraordinary expenses. The management fee paid to FMR by each fund is
reduced by an amount equal to the fees and expenses paid by the fund
to the non-interested Trustees. FMR receives a fee that is based upon
a graduated series of rates ranging from .290% to .350% of each fund's
average net assets. For the period July 1, 1997 to December 31, 1997,
FMR received a fee that was based upon a graduated series of rates
ranging from .330% to .365% of each fund's average net assets. For the
period, the management fees paid to FMR were equivalent to an annual
rate of .33% and .35% for the Cash and Term Portfolios, respectively.
SUB-ADVISER FEE. As Cash Portfolio's investment sub-adviser, Fidelity
Investments Money Management, Inc. (formerly FMR Texas, Inc.), a
wholly owned subsidiary of FMR, receives a fee from FMR of 50% of the
management fee payable to FMR. The fee is paid prior to any voluntary
expense reimbursements which may be in effect, and after reducing the
fee for any payments by FMR pursuant to Cash Portfolio's Distribution
and Service Plan.
DISTRIBUTION AND SERVICE PLAN. Pursuant to the Distribution and
Service Plans (the Plans), and in accordance with Rule 12b-1 of the
1940 Act, FMR pays Fidelity Distributors Corporation (FDC), an
affiliate of FMR, a distribution and service fee that is based on a
graduated series of rates ranging from .14% to .15% of each fund's
average net assets. For the period July 1, 1997 to December 31, 1997,
FMR paid FDC a distribution and service fee that was based on a
graduated series of rates ranging from .15% to .16% of each fund's
average net assets. For the period, FMR paid FDC $3,741,217 and
$109,998 on behalf of the Cash and Term Portfolios, respectively, all
of which FDC paid to Sterling Capital Distributors, Inc., a
wholly-owned subsidiary of Sterling Capital Management Company.
5. EXPENSE REDUCTIONS.
FMR has entered into arrangements on behalf of each fund with its
transfer agent whereby credits realized as a result of uninvested cash
balances were used to reduce a portion of the fund's expenses. During
the period, Cash and Term Portfolios' expenses were reduced by $24,849
and $1,155, respectively, under these arrangements.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of The North Carolina Capital Management Trust and the
Shareholders of Cash Portfolio and Term Portfolio:
In our opinion, the accompanying statements of assets and liabilities,
including the schedules of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of
Cash Portfolio and Term Portfolio (funds of The North Carolina Capital
Management Trust) at June 30, 1998, and the results of their
operations, the changes in their net assets and the financial
highlights for the periods indicated, in conformity with generally
accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements")
are the responsibility of the Cash Portfolio and Term Portfolio
management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of
these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which
included confirmation of securities at June 30, 1998 by correspondence
with the custodian and brokers, provide a reasonable basis for the
opinion expressed above.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
August 10, 1998
TRUSTEES
William L. Byrnes
John David "J.D." Foust *
W. Olin Nisbet III
Helen A. Powers *
Bertram H. Witham *
OFFICERS
William L. Byrnes, PRESIDENT
Robert C. Pozen, SENIOR VICE PRESIDENT
W. Olin Nisbet III, VICE PRESIDENT
J. Calvin Rivers, Jr., VICE PRESIDENT
Fred L. Henning, Jr., VICE PRESIDENT
Dwight D. Churchill, VICE PRESIDENT, TERM PORTFOLIO
Curtis Hollingsworth, VICE PRESIDENT, TERM PORTFOLIO
Boyce Greer, VICE PRESIDENT, CASH PORTFOLIO
Eric D. Roiter, SECRETARY
Richard A. Silver, TREASURER
John H. Costello, ASSISTANT TREASURER
Leonard M. Rush, ASSISTANT TREASURER
Thomas J. Simpson, ASSISTANT TREASURER, TERM PORTFOLIO
David H. Potel, ASSISTANT SECRETARY
DISTRIBUTION AGENT
Sterling Capital Distributors, Inc.
Charlotte, NC
CUSTODIAN
First Union National Bank of North Carolina
Charlotte, NC
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
SUB-ADVISER FOR CASH PORTFOLIO
Fidelity Investments Money Management, Inc.
Merrimack, NH
TRANSFER AGENT
Fidelity Investments Institutional Operations Company, Inc.
Boston, MA
