THE
NORTH
CAROLINA
CAPITAL MANAGEMENT TRUST
CASH PORTFOLIO
TERM PORTFOLIO
SEMIANNUAL REPORT
DECEMBER 31, 1999
NC-SANN-0200 88505
1.540079.102
CONTENTS
THE NORTH CAROLINA CAPITAL
MANAGEMENT TRUST:
CASH PORTFOLIO:
PERFORMANCE 3 How the fund has done over
time.
FUND TALK 5 The manager's review of the
fund's performance,
strategy, and outlook.
INVESTMENTS 6 A complete list of the fund's
investments.
FINANCIAL STATEMENTS 9 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
TERM PORTFOLIO:
PERFORMANCE 13 How the fund has done over
time.
FUND TALK 16 The manager's review of the
fund's performance,
strategy, and outlook.
INVESTMENTS 17 A complete list of the fund's
investments with their
market values.
FINANCIAL STATEMENTS 18 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 22 Notes to the financial
statements.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION OF THE SHAREHOLDERS OF THE
FUNDS. THIS REPORT IS NOT AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE
INVESTORS IN THE FUNDS UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE
PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY, ANY DEPOSITORY INSTITUTION.
SHARES ARE NOT INSURED BY THE FDIC, FEDERAL RESERVE BOARD OR ANY OTHER
AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL OF
PRINCIPAL AMOUNT INVESTED.
NEITHER THE FUNDS NOR FIDELITY DISTRIBUTORS CORPORATION NOR STERLING
CAPITAL DISTRIBUTORS, INC. IS A BANK.
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 year total returns would
have been lower.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CUMULATIVE TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1999 PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
NCCMT - Cash Portfolio 2.65% 5.06% 29.82% 64.78%
All Taxable Money Market 2.41% 4.65% 28.01% 60.53%
Funds Average
</TABLE>
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years or 10 years. For example, if you had invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment
would be $1,050. 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 six months average represents a peer group of 951 money market
funds.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1999 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
NCCMT - Cash Portfolio 5.06% 5.36% 5.12%
All Taxable Money Market 4.65% 5.06% 4.84%
Funds Average
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
12/28/99 9/28/99 6/29/99 3/30/99 12/29/98
NCCMT - Cash Portfolio 5.70% 5.19% 4.69% 4.63% 4.97%
All Taxable Money Market 5.13% 4.71% 4.35% 4.35% 4.53%
Funds Average
12/29/99 2/29/99 6/30/99 3/31/99 12/30/98
MMDA 2.07% 2.08% 2.03% 2.10% 2.23%
Cash Portfolio
All Taxable Money
Market Funds Average
MMDA
6% -
5% -
4% -
3% -
2% -
1% -
0%
Row: 1, Col: 1, Value: 5.7
Row: 1, Col: 2, Value: 5.13
Row: 1, Col: 3, Value: 2.07
Row: 2, Col: 1, Value: 5.19
Row: 2, Col: 2, Value: 4.71
Row: 2, Col: 3, Value: 2.08
Row: 3, Col: 1, Value: 4.69
Row: 3, Col: 2, Value: 4.35
Row: 3, Col: 3, Value: 2.03
Row: 4, Col: 1, Value: 4.63
Row: 4, Col: 2, Value: 4.35
Row: 4, Col: 3, Value: 2.1
Row: 5, Col: 1, Value: 4.970000000000001
Row: 5, Col: 2, Value: 4.53
Row: 5, Col: 3, Value: 2.23
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
table 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.
(checkmark)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.
THE NORTH CAROLINA CAPITAL MANAGEMENT TRUST: CASH PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
(photograph of Robert Duby)
Robert Duby, Portfolio Manager of The North Carolina Capital
Management Trust: Cash Portfolio
Q. BOB, WHAT WAS THE INVESTMENT ENVIRONMENT LIKE DURING THE SIX MONTHS
THAT ENDED DECEMBER 31, 1999?
A. Strong economic growth and the Federal Reserve Board's decision to
raise short-term interest rates pushed the general level of interest
rates higher. The Fed raised the rate banks charge each other for
overnight loans - known as the fed funds rate - three times in 1999,
up to 5.50%, taking back the three rate cuts it implemented in late
1998 to stave off a global credit crunch. The overall increase in
interest rates was linked to strong domestic economic growth as
evidenced by the lowest unemployment rate in nearly 30 years. Growth
was spurred by personal consumption, business investment and the
housing market. Rising stock and real estate prices created a wealth
effect that spurred consumer spending, a significant component of the
gross domestic product (GDP). While commodity prices increased on the
heels of a global economic recovery, there were no significant
increases in producer or consumer prices; gains in productivity kept
inflation in check. Nevertheless, Fed Chairman Alan Greenspan, in his
semiannual Humphrey-Hawkins testimony before Congress, warned that
productivity could slip, leading to inflation in the form of higher
unit labor costs. In August, stronger-than-expected job growth and
higher-than-expected average hourly earnings encouraged the Fed to
implement a rate hike. Third-quarter real GDP - gross domestic product
adjusted for inflation - significantly exceeded expectations. A rise
in the price deflator - a measure of inflation's effect on prices -
and an upward trend in oil prices further increased concerns about
emerging inflation. In response, the Fed once again raised short-term
interest rates in November. As we closed out 1999, positive holiday
retail sales reports raised concerns even more that excessive consumer
demand could prompt the Fed to raise rates again in early 2000.
Q. WHAT WAS YOUR STRATEGY WITH THE FUND?
A. In response to the prospect that the Fed might raise rates during
the second half of 1999, I maintained an emphasis on securities
maturing within 30 days in order to take advantage of higher yields as
they emerged. At the same time, I invested in selected longer-term
positions as a source of additional yield. In addition, concerns
related to potential Y2K computer bug problems dictated that I focus
the fund on the shorter-term offerings of top-tier commercial paper
issuers, in order to simultaneously limit risk and reap additional
yield relative to alternatives in the Treasury market.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on December 31, 1999, was 5.69%,
compared to 4.70% six months ago. Through December 31, 1999, the
fund's six-month total return was 2.65%, compared to 2.41% for the all
taxable money market funds average tracked by IBC Financial Data, Inc.
Q. WHAT IS YOUR OUTLOOK?
A. I'm positioning the fund for potentially higher interest rates in
2000. Market consensus, as quantified by the futures market, currently
calls for a 0.25%, and possibly a 0.50%, increase in the fed funds
rate when the Fed meets at the beginning of February. It's also
possible we might see the Fed bump up rates again at its subsequent
meetings, including the one in March. Reflecting my expectation for
higher rates, I'll likely keep the fund's average maturity relatively
short, in order to maximize investment flexibility. At the same time,
should longer-term money market securities offer attractive
risk-adjusted returns, I may look to opportunistically add positions
in securities with longer-term maturities.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
UPON MARKET OR OTHER CONDITIONS. FOR MORE INFORMATION, PLEASE SEE PAGE
2.
(checkmark)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 December 31, 1999, more than
$2.8 billion
MANAGER: Robert Duby, since 1998; joined
Fidelity in 1982
THE NORTH CAROLINA CAPITAL MANAGEMENT TRUST: CASH PORTFOLIO
INVESTMENTS DECEMBER 31, 1999 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
COMMERCIAL PAPER (A) - 97.7%
DUE DATE ANNUALIZED YIELD AT TIME OF PRINCIPAL AMOUNT VALUE (NOTE 1)
PURCHASE
American General Finance Corp.
3/9/00 6.01% $ 25,000,000 $ 24,720,917
3/13/00 6.01 50,000,000 49,409,000
3/17/00 6.01 25,000,000 24,688,083
Asset Securitization Coop.
Corp.
2/14/00 5.60 15,000,000 14,900,633
2/23/00 6.00 15,000,000 14,870,592
2/24/00 6.00 18,000,000 17,841,780
Associates Corp. of North
America
3/9/00 6.02 80,000,000 79,105,419
4/3/00 6.02 35,000,000 34,466,542
Associates First Capital BV
2/23/00 5.96 5,000,000 4,956,790
3/3/00 6.06 10,000,000 9,897,183
Associates First Capital Corp.
2/22/00 5.92 5,000,000 4,957,894
Bank of America Corp.
2/24/00 5.90 20,000,000 19,828,400
Centric Capital Corp.
1/21/00 6.58 19,900,000 19,827,586
1/27/00 6.04 50,000,000 49,784,417
1/31/00 5.60 35,000,000 34,841,917
2/10/00 5.92 10,000,000 9,936,000
3/8/00 6.03 11,300,000 11,175,079
4/17/00 6.09 15,240,000 14,969,126
CIESCO LP
1/26/00 5.97 50,000,000 49,795,139
2/15/00 6.02 45,000,000 44,665,312
CIT Group, Inc.
1/3/00 4.75 25,000,000 24,993,403
2/15/00 5.89 50,000,000 49,636,875
3/7/00 6.05 40,000,000 39,563,667
Citibank Credit Card Master
Trust I (Dakota Certificate
Program)
1/12/00 6.01 22,000,000 21,960,339
1/13/00 6.08 5,000,000 4,989,967
1/27/00 6.70 25,000,000 24,879,931
DUE DATE ANNUALIZED YIELD AT TIME OF PRINCIPAL AMOUNT VALUE (NOTE 1)
PURCHASE
Citicorp
1/27/00 6.21% $ 50,000,000 $ 49,777,917
2/8/00 6.07 50,000,000 49,682,806
Corporate Receivables Corp.
1/26/00 6.11 5,000,000 4,979,167
2/9/00 6.15 5,000,000 4,967,338
CXC, Inc.
1/27/00 6.20 20,000,000 19,911,167
2/14/00 6.21 10,000,000 9,924,833
2/16/00 6.16 25,000,000 24,805,458
2/16/00 6.36 11,500,000 11,407,425
2/17/00 6.05 15,000,000 14,883,088
3/16/00 6.09 15,000,000 14,812,500
Delaware Funding Corp.
1/24/00 6.11 8,000,000 7,969,333
1/25/00 6.50 25,000,000 24,892,500
2/22/00 6.27 5,000,000 4,955,222
2/24/00 5.96 10,000,000 9,912,700
Edison Asset Securitization LLC
1/26/00 6.70 25,000,000 24,884,375
2/7/00 5.97 9,000,000 8,945,980
2/8/00 5.92 3,000,000 2,981,792
2/9/00 5.92 11,144,000 11,074,582
2/9/00 6.00 9,000,000 8,942,865
2/10/00 6.00 11,018,000 10,946,138
2/10/00 6.51 40,000,000 39,713,333
2/28/00 6.00 5,000,000 4,952,472
3/6/00 5.96 4,000,000 3,958,111
3/13/00 5.96 8,000,000 7,907,360
3/16/00 6.04 10,000,000 9,876,250
Falcon Asset Securitization
Corp.
1/31/00 6.03 8,000,000 7,960,667
2/1/00 6.12 10,000,000 9,947,817
2/3/00 6.01 6,000,000 5,967,660
2/4/00 6.02 5,010,000 4,982,178
2/10/00 6.02 6,000,000 5,960,800
2/17/00 5.99 22,795,000 22,619,415
COMMERCIAL PAPER (A) -
CONTINUED
DUE DATE ANNUALIZED YIELD AT TIME OF PRINCIPAL AMOUNT VALUE (NOTE 1)
PURCHASE
Fleet Funding Corp.
1/31/00 6.04% $ 26,538,000 $ 26,407,079
2/10/00 6.01 5,547,000 5,510,760
Ford Motor Credit Co.
2/10/00 5.57 50,000,000 49,692,778
3/7/00 6.05 30,000,000 29,672,200
3/21/00 6.20 25,000,000 24,661,111
GE Capital International
Funding, Inc.
1/27/00 6.16 20,000,000 19,912,467
2/22/00 6.09 10,000,000 9,913,911
3/8/00 6.10 20,000,000 19,778,156
3/13/00 5.90 28,000,000 27,679,680
3/15/00 6.06 15,000,000 14,818,083
General Electric Capital Corp.
2/15/00 5.89 15,000,000 14,891,063
3/6/00 6.04 35,000,000 34,627,785
General Electric Capital
Services, Inc.
2/14/00 5.60 25,000,000 24,834,389
2/22/00 5.60 50,000,000 49,609,278
General Motors Acceptance Corp.
2/14/00 5.96 20,000,000 19,856,511
2/22/00 5.90 20,000,000 19,834,756
2/22/00 6.06 25,000,000 24,785,861
2/23/00 5.60 25,000,000 24,800,514
3/6/00 5.90 40,000,000 39,586,889
3/7/00 5.91 20,000,000 19,790,267
Goldman Sachs Group, Inc.
2/7/00 6.10 25,000,000 24,845,833
2/9/00 5.80 50,000,000 49,695,313
2/25/00 6.08 50,000,000 49,541,667
3/27/00 6.23 10,000,000 9,853,681
Household Finance Corp.
2/4/00 6.06 25,000,000 24,859,042
2/24/00 6.02 35,000,000 34,688,150
IBM Credit Corp.
3/21/00 5.89 25,000,000 24,682,222
DUE DATE ANNUALIZED YIELD AT TIME OF PRINCIPAL AMOUNT VALUE (NOTE 1)
PURCHASE
J. P. Morgan & Co., Inc.
2/2/00 5.75% $ 40,000,000 $ 39,801,244
2/9/00 5.62 50,000,000 49,704,792
2/28/00 6.02 45,000,000 44,569,350
Kitty Hawk Funding Corp.
1/28/00 5.98 26,385,000 26,268,246
2/10/00 5.98 10,000,000 9,934,444
2/11/00 6.07 5,000,000 4,965,833
2/11/00 6.21 15,000,000 14,894,938
3/1/00 6.03 35,000,000 34,653,500
3/13/00 6.11 5,000,000 4,939,800
Marsh USA, Inc.
3/21/00 5.92 15,000,000 14,808,333
Merrill Lynch & Co., Inc.
2/22/00 5.60 35,000,000 34,726,494
Morgan Stanley Dean Witter &
Co.
1/19/00 6.03 50,000,000 49,852,000
2/2/00 5.62 50,000,000 49,757,778
2/29/00 6.32 10,000,000 9,897,569
3/13/00 6.14 5,000,000 4,939,500
New Center Asset Trust
1/31/00 6.12 10,000,000 9,950,000
2/14/00 5.93 50,000,000 49,642,500
2/14/00 5.98 30,000,000 29,784,033
2/18/00 6.03 50,000,000 49,607,333
3/20/00 6.27 5,000,000 4,932,301
Norwest Financial, Inc.
3/7/00 5.91 25,000,000 24,737,833
Park Avenue Receivables Corp.
1/20/00 6.05 25,000,000 24,920,965
1/26/00 6.22 10,000,000 9,957,500
1/27/00 6.55 5,000,000 4,976,528
1/28/00 6.20 24,119,000 24,007,751
1/28/00 6.22 30,000,000 29,861,175
1/31/00 6.56 15,000,000 14,918,750
2/15/00 6.09 5,000,000 4,962,375
COMMERCIAL PAPER (A) -
CONTINUED
DUE DATE ANNUALIZED YIELD AT TIME OF PRINCIPAL AMOUNT VALUE (NOTE 1)
PURCHASE
Preferred Receivables Funding
Corp.
1/25/00 6.14% $ 10,000,000 $ 9,959,800
2/4/00 6.00 6,000,000 5,966,737
2/9/00 6.00 8,000,000 7,949,213
2/14/00 5.99 5,000,000 4,963,944
2/15/00 6.17 10,600,000 10,519,175
2/16/00 6.20 15,000,000 14,882,508
2/24/00 6.03 28,000,000 27,750,100
2/24/00 6.10 50,000,000 49,548,500
2/24/00 6.19 10,210,000 10,117,038
Salomon Smith Barney
Holdings, Inc.
1/25/00 6.27 10,000,000 9,958,533
2/8/00 5.63 10,000,000 9,942,367
2/11/00 5.98 5,000,000 4,966,744
2/14/00 5.85 10,000,000 9,930,578
2/18/00 6.07 10,000,000 9,920,000
The Bear Stearns Companies,
Inc.
2/16/00 5.75 35,000,000 34,750,897
2/23/00 5.72 10,000,000 9,918,513
Three Rivers Funding Corp.
1/18/00 6.39 23,026,000 22,956,954
1/19/00 7.04 10,000,000 9,965,000
1/28/00 6.50 5,000,000 4,975,813
Wells Fargo & Co.
2/11/00 6.05 10,000,000 9,932,578
TOTAL COMMERCIAL PAPER 2,818,842,543
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
REPURCHASE AGREEMENTS - 2.5%
MATURITY AMOUNT VALUE (NOTE 1)
In a joint trading account $ 72,428,119 $ 72,407,000
(U.S. Treasury Obligations)
dated 12/31/99 due 1/3/00 At
3.5%
TOTAL INVESTMENT PORTFOLIO 2,891,249,543
- - 100.2%
NET OTHER ASSETS - (0.2)% (4,547,698)
NET ASSETS - 100% $ 2,886,701,845
Total Cost for Income Tax Purposes $ 2,891,249,543
</TABLE>
PRIOR TO THIS REPORT, CERTAIN INFORMATION RELATED TO PORTFOLIO
HOLDINGS WAS STATED AS A PERCENTAGE OF THE FUND'S INVESTMENTS.
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.
THE NORTH CAROLINA CAPITAL MANAGEMENT TRUST: CASH PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999 (UNAUDITED)
ASSETS
Investment in securities, $ 2,891,249,543
at value (including
repurchase agreements of
$72,407,000) - See
accompanying schedule
Receivable for fund shares 45,051
sold
Interest receivable 7,040
TOTAL ASSETS 2,891,301,634
LIABILITIES
Payable to custodian bank $ 6,353
Payable for fund shares 1,665,105
redeemed
Distributions payable 1,688,036
Accrued management fee 783,178
Deferred trustees' 457,117
compensation
TOTAL LIABILITIES 4,599,789
NET ASSETS $ 2,886,701,845
Net Assets consist of:
Paid in capital $ 2,886,863,216
Accumulated net realized (161,371)
gain (loss) on investments
NET ASSETS, for $ 2,886,701,845
2,886,837,252 shares
outstanding
NET ASSET VALUE, $1.00
offering price and
redemption price per share
($2,886,701,845 (divided by)
2,886,837,252 shares)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED DECEMBER
31, 1999 (UNAUDITED)
INTEREST INCOME $ 77,302,450
EXPENSES
Management fee $ 4,446,194
Non-interested trustees' 69,366
compensation
Total expenses before 4,515,560
reductions
Expense reductions (2,612) 4,512,948
NET INTEREST INCOME 72,789,502
NET REALIZED GAIN (155,589)
(LOSS) ON INVESTMENTS
NET INCREASE IN NET $ 72,633,913
ASSETS RESULTING FROM
OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED DECEMBER 31, YEAR ENDED JUNE 30, 1999
1999
(UNAUDITED)
INCREASE (DECREASE) IN NET
ASSETS
Operations Net interest $ 72,789,502 $ 144,559,893
income
Net realized gain (loss) (155,589) 48,942
NET INCREASE 72,633,913 144,608,835
(DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS
Distributions to (72,789,502) (144,559,893)
shareholders from net
interest income
Share transactions at net 3,986,293,581 8,411,139,551
asset value of $1.00 per
share Proceeds from sales of
shares
Reinvestment of 63,075,867 122,735,206
distributions from net
interest income
Cost of shares redeemed (3,954,337,408) (8,222,523,769)
NET INCREASE 95,032,040 311,350,988
(DECREASE) IN NET ASSETS AND
SHARES RESULTING FROM SHARE
TRANSACTIONS
TOTAL INCREASE 94,876,451 311,399,930
(DECREASE) IN NET ASSETS
NET ASSETS
Beginning of period 2,791,825,394 2,480,425,464
End of period $ 2,886,701,845 $ 2,791,825,394
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED DECEMBER 31, YEARS ENDED JUNE 30,
1999
(UNAUDITED) 1999 1998 1997 1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
of period
Income from Investment .026 .049 .053 .051 .053 .052
Operations Net interest
income
Less Distributions
From net interest income (.026) (.049) (.053) (.051) (.053) (.052)
Net asset value, end of $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
period
TOTAL RETURN B 2.65% 5.05% 5.47% 5.25% 5.43% 5.28%
RATIOS AND SUPPLEMENTAL
DATA
Net assets, end of period $ 2,887 $ 2,792 $ 2,480 $ 1,984 $ 1,740 $ 1,589
(in millions)
Ratio of expenses to .32% A .32% .34% .35% .36% .39%
average net assets
Ratio of net interest 5.21% A 4.92% 5.34% 5.13% 5.27% 5.22%
income to average net assets
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
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 year total returns would
have been lower.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CUMULATIVE TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1999 PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
NCCMT - Term Portfolio 2.17% 4.05% 31.20% 71.35%
LB 1-Year US Treasury 1.96% 4.25% 33.79% 75.36%
Short US Government Funds 1.48% 2.50% 31.20% 73.85%
Average
</TABLE>
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years or 10 years. For example, if you had invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment
would be $1,050. You can compare the fund's returns to the performance
of the Lehman Brothers 1-Year U.S. Treasury Index - a one security
index which at the beginning of every month selects the Treasury
maturing closest to but not beyond one year from that date. To measure
how the fund's performance stacked up against its peers, you can
compare it to the short U.S. government funds average, which reflects
the performance of mutual funds with similar objectives tracked by
Lipper Inc. The past six months average represents a peer group of 77
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 DECEMBER 31, 1999 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
NCCMT - Term Portfolio 4.05% 5.58% 5.53%
LB 1-Year US Treasury 4.25% 5.99% 5.78%
Short US Government Funds 2.50% 5.57% 5.66%
Average
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
1989/12/31 10000.00 10000.00
1990/01/31 10040.40 10039.29
1990/02/28 10094.12 10099.44
1990/03/31 10153.23 10149.96
1990/04/30 10199.49 10201.68
1990/05/31 10300.83 10306.74
1990/06/30 10369.01 10397.35
1990/07/31 10471.91 10496.39
1990/08/31 10521.53 10558.14
1990/09/30 10590.39 10634.32
1990/10/31 10683.33 10725.74
1990/11/30 10773.54 10803.93
1990/12/31 10877.74 10920.61
1991/01/31 10960.32 11005.61
1991/02/28 11036.11 11071.77
1991/03/31 11092.32 11149.16
1991/04/30 11178.56 11226.14
1991/05/31 11232.32 11273.46
1991/06/30 11284.75 11312.75
1991/07/31 11350.38 11389.74
1991/08/31 11449.57 11491.18
1991/09/30 11522.48 11576.18
1991/10/31 11595.65 11660.79
1991/11/30 11678.59 11751.80
1991/12/31 11797.79 11858.46
1992/01/31 11827.40 11885.73
1992/02/29 11863.31 11912.99
1992/03/31 11867.61 11933.44
1992/04/30 11955.38 11998.00
1992/05/31 12016.42 12048.92
1992/06/30 12058.43 12111.07
1992/07/31 12094.60 12198.48
1992/08/31 12166.81 12253.01
1992/09/30 12238.17 12332.40
1992/10/31 12153.81 12306.74
1992/11/30 12117.32 12272.25
1992/12/31 12217.58 12299.52
1993/01/31 12343.31 12360.87
1993/02/28 12389.84 12400.56
1993/03/31 12423.18 12439.05
1993/04/30 12466.70 12481.56
1993/05/31 12472.21 12481.56
1993/06/30 12514.16 12540.90
1993/07/31 12550.37 12574.18
1993/08/31 12596.28 12631.52
1993/09/30 12627.66 12668.00
1993/10/31 12661.35 12697.67
1993/11/30 12681.41 12719.73
1993/12/31 12714.15 12763.83
1994/01/31 12759.86 12817.16
1994/02/28 12738.84 12801.92
1994/03/31 12747.43 12804.33
1994/04/30 12741.92 12793.50
1994/05/31 12776.43 12820.77
1994/06/30 12823.18 12864.88
1994/07/31 12883.47 12947.07
1994/08/31 12920.34 12991.98
1994/09/30 12961.37 13010.83
1994/10/31 13004.46 13064.15
1994/11/30 13010.21 13060.14
1994/12/31 13060.62 13107.06
1995/01/31 13179.27 13236.17
1995/02/28 13250.29 13354.85
1995/03/31 13330.27 13433.84
1995/04/30 13406.59 13532.48
1995/05/31 13500.34 13651.56
1995/06/30 13576.08 13734.56
1995/07/31 13626.15 13801.92
1995/08/31 13689.06 13867.68
1995/09/30 13749.71 13929.83
1995/10/31 13825.82 14008.82
1995/11/30 13914.16 14091.02
1995/12/31 13993.78 14174.02
1996/01/31 14070.77 14265.04
1996/02/29 14089.32 14283.48
1996/03/31 14112.66 14327.99
1996/04/30 14162.87 14380.91
1996/05/31 14212.14 14437.85
1996/06/30 14288.90 14518.44
1996/07/31 14341.78 14573.78
1996/08/31 14400.56 14645.15
1996/09/30 14504.72 14743.38
1996/10/31 14596.69 14854.45
1996/11/30 14670.95 14932.24
1996/12/31 14715.47 14985.16
1997/01/31 14777.40 15056.94
1997/02/28 14843.85 15111.07
1997/03/31 14862.44 15149.56
1997/04/30 14957.47 15242.18
1997/05/31 15043.30 15336.41
1997/06/30 15130.01 15429.03
1997/07/31 15220.97 15539.29
1997/08/31 15265.68 15592.62
1997/09/30 15362.50 15676.82
1997/10/31 15436.64 15763.83
1997/11/30 15479.89 15818.36
1997/12/31 15566.07 15892.54
1998/01/31 15656.30 15997.19
1998/02/28 15694.82 16038.09
1998/03/31 15771.46 16118.68
1998/04/30 15836.22 16192.86
1998/05/31 15903.75 16263.43
1998/06/30 15982.23 16340.82
1998/07/31 16047.01 16419.41
1998/08/31 16181.23 16551.32
1998/09/30 16297.12 16674.42
1998/10/31 16389.13 16762.23
1998/11/30 16409.21 16765.44
1998/12/31 16468.17 16821.17
1999/01/31 16527.86 16887.73
1999/02/28 16530.28 16906.58
1999/03/31 16625.13 17007.92
1999/04/30 16680.97 17070.49
1999/05/31 16720.15 17117.48
1999/06/30 16771.40 17198.89
1999/07/31 16843.23 17272.65
1999/08/31 16894.75 17323.89
1999/09/30 16980.01 17414.55
1999/10/31 17032.72 17463.83
1999/11/30 17082.41 17498.59
1999/12/31 17135.22 17535.70
IMATRL PRASUN SHR__CHT 19991231 20000111 113044 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in North Carolina Capital Management Trust: Term Portfolio on
December 31, 1989. As the chart shows, by December 31, 1999, the value
of the investment would have grown to $17,135 - a 71.35% increase on
the initial investment. For comparison, look at how the Lehman
Brothers 1-Year U.S. Treasury Index did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $17,536 - a 75.36% increase.
(checkmark)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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
TOTAL RETURN COMPONENTS
SIX MONTHS ENDED DECEMBER 31, YEARS ENDED JUNE 30,
1999 1999 1998 1997 1996 1995
Dividend returns 2.81% 6.62% 7.08% 7.62% 6.16% 5.26%
Capital returns -0.64% -1.68% -1.45% -1.73% -0.91% 0.61%
Total returns 2.17% 4.94% 5.63% 5.89% 5.25% 5.87%
</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, if
any, paid by the fund are reinvested.
DIVIDENDS AND YIELD
PERIODS ENDED DECEMBER 31, PAST 1 MONTH PAST 6 MONTHS PAST 1 YEAR
1999
Dividends per share 3.88(cents) 26.05(cents) 57.28(cents)
Annualized dividend rate 4.92% 5.54% 6.11%
30-day annualized yield 5.63% - -
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 $9.29
over the past one month, $9.32 over the past six months and $9.37 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
bond
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
(photograph of Robert Duby)
Robert Duby, Portfolio Manager of The North Carolina Capital
Management Trust: Term Portfolio
Q. HOW DID THE FUND PERFORM, BOB?
A. For the six-months that ended December 31, 1999, the fund had a
total return of 2.17%, compared to 1.48% for the short U.S. government
funds average, according to Lipper Inc. The Lehman Brothers 1-Year
U.S. Treasury Index, the make-up of which most closely resembles that
of the fund, returned 1.96% over the same period.
Q. WHAT WAS THE INVESTMENT ENVIRONMENT LIKE DURING THE SIX MONTHS THAT
ENDED DECEMBER 31, 1999?
A. Interest rates moved higher, pushed upward by strong economic
growth and Federal Reserve Board short-term interest-rate hikes. The
Fed raised the rate banks charge each other for overnight loans -
known as the fed funds rate - three times in 1999, up to 5.50%, taking
back three rate cuts it implemented in late 1998 to head off a global
credit crunch. Overall, interest rates increased because of strong
domestic economic growth brought to light by the lowest unemployment
rate in nearly 30 years. Personal consumption, business investment and
a strong housing market stimulated economic growth. Rising equity and
real estate prices created a wealth effect that spurred consumer
spending, a significant component of the gross domestic product (GDP).
Commodity prices rose because of a global economic recovery, but
overall there were no significant increases in prices on either the
producer or consumer side, because productivity gains helped keep
inflation in check. However, Fed Chairman Alan Greenspan, in his
semiannual Humphrey-Hawkins testimony before Congress, warned that
productivity could slip, resulting in inflation in the form of higher
unit labor costs. In August, stronger-than-expected job growth and
higher-than-expected average hourly earnings pushed the Fed to hike
rates. In the third quarter, real GDP - gross domestic product
adjusted for inflation - significantly exceeded expectations. An
increase in the price deflator - a measure of the effect that
inflation has on prices - and an upward trend in oil prices further
increased concerns that inflation would emerge. The Fed responded by
again raising short-term interest rates in November.
Q. WHAT WAS YOUR STRATEGY WITH THE FUND?
A. The fund is managed with an eye toward the Lehman Brothers 1-Year
Treasury Index. This benchmark index is composed of the most recently
issued one-year Treasury bill. Throughout the period, the fund
maintained a "bullet" structure, targeting specific parts along the
whole Treasury yield curve. This structure helped the fund's return.
The fund also benefited from the yield advantage offered by
"off-the-run" Treasury notes, those that have been in the market
longer than the most recently issued "on-the-run" Treasury notes.
Given liquidity measures introduced by the Fed to limit year-end
selling pressures, I did not pursue a defensive strategy of investing
in Treasury bills maturing in early 2000.
Q. WHAT IS YOUR OUTLOOK?
A. I'm positioning the fund for higher interest rates in 2000. Market
consensus currently calls for a 0.25%, and possibly a 0.50%, increase
in the fed funds rate in February. It's also possible we might see the
Fed bump up rates again at its subsequent meetings. Reflecting my
expectation for higher rates, I'll likely keep the fund's average
maturity relatively short in order to maximize investment flexibility.
At the same time, should longer-term money market securities offer
attractive risk-adjusted returns, I may look to opportunistically add
positions in securities with longer-term maturities.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
UPON MARKET OR OTHER CONDITIONS. FOR MORE INFORMATION, PLEASE SEE PAGE
2.
(checkmark)FUND FACTS
GOAL: seeks to obtain a high level of current
income consistent with the preservation of
capital
START DATE: March 19, 1987
SIZE: as of December 31, 1999, more than
$88 million
MANAGER: Robert Duby, since 1998; joined
Fidelity in 1982
THE NORTH CAROLINA CAPITAL MANAGEMENT TRUST: TERM PORTFOLIO
INVESTMENTS DECEMBER 31, 1999 (UNAUDITED)
Showing Percentage of Net Assets
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
U.S. GOVERNMENT AND
GOVERNMENT AGENCY
OBLIGATIONS - 98.3%
PRINCIPAL AMOUNT VALUE (NOTE 1)
U.S. TREASURY OBLIGATIONS -
98.3%
U.S. Treasury Bills, yield at $ 17,800,000 $ 16,856,317
date of purchase 5.93%
12/7/00
U.S. Treasury Notes:
4% 10/31/00 33,500,000 32,939,880
5.625% 11/30/00 18,690,000 18,611,128
6% 8/15/00 18,140,000 18,151,584
TOTAL U.S. GOVERNMENT AND 86,558,909
GOVERNMENT AGENCY OBLIGATIONS
(Cost $86,876,412)
</TABLE>
CASH EQUIVALENTS - 1.1%
MATURITY AMOUNT
Investments in repurchase $ 963,281 963,000
agreements (U.S. Treasury
obligations), in a joint
trading account at 3.5%,
dated 12/31/99 due 1/3/00
(Cost $963,000)
TOTAL INVESTMENT PORTFOLIO - 87,521,909
99.4%
(Cost $87,839,412)
NET OTHER ASSETS - 0.6% 555,535
NET ASSETS - 100% $ 88,077,444
PRIOR TO THIS REPORT, CERTAIN INFORMATION RELATED TO PORTFOLIO
HOLDINGS WAS STATED AS A PERCENTAGE OF THE FUND'S INVESTMENTS.
INCOME TAX INFORMATION
At December 31, 1999, the aggregate cost of investment securities for
income tax purposes was $87,839,412. Net unrealized depreciation
aggregated $317,503, of which $4,545 related to appreciated investment
securities and $322,048 related to depreciated investment securities.
At June 30, 1999, the fund had a capital loss carryforward of
approximately $2,941,000 of which $244,000, $450,000, $1,410,000 and
$837,000 will expire on June 30, 2003, 2005, 2006 and 2007,
respectively.
The fund intends to elect to defer to its fiscal year ending June 30,
2000 approximately $626,000 of losses recognized during the period
November 1, 1998 to June 30, 1999.
THE NORTH CAROLINA CAPITAL MANAGEMENT TRUST: TERM PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999 (UNAUDITED)
ASSETS
Investment in securities, $ 87,521,909
at value (including
repurchase agreements of
$963,000) (cost $87,839,412)
- - See accompanying schedule
Cash 317
Interest receivable 724,680
TOTAL ASSETS 88,246,906
LIABILITIES
Distributions payable $ 125,177
Accrued management fee 26,144
Deferred trustees' 18,141
compensation
TOTAL LIABILITIES 169,462
NET ASSETS $ 88,077,444
Net Assets consist of:
Paid in capital $ 93,225,410
Distributions in excess (10,930)
of net investment income
Accumulated undistributed (4,819,533)
net realized gain (loss) on
investments
Net unrealized (317,503)
appreciation (depreciation)
on investments
NET ASSETS, for $ 88,077,444
9,481,423 shares outstanding
NET ASSET VALUE, $9.29
offering price and
redemption price per share
($88,077,444 (divided by)
9,481,423 shares)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED DECEMBER
31, 1999 (UNAUDITED)
INVESTMENT INCOME $ 2,715,610
Interest
EXPENSES
Management fee $ 158,169
Non-interested trustees' 2,334
compensation
Total expenses before 160,503
reductions
Expense reductions (121) 160,382
NET INVESTMENT INCOME 2,555,228
REALIZED AND UNREALIZED (1,252,852)
GAIN (LOSS)
Net realized gain (loss)
on investment securities
Change in net unrealized 644,476
appreciation (depreciation)
on investment securities
NET GAIN (LOSS) (608,376)
NET INCREASE $ 1,946,852
(DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED DECEMBER 31, YEAR ENDED JUNE 30, 1999
1999 (UNAUDITED)
INCREASE (DECREASE) IN
NET ASSETS
Operations Net investment $ 2,555,228 $ 5,624,633
income
Net realized gain (loss) (1,252,852) (661,202)
Change in net unrealized 644,476 (876,705)
appreciation (depreciation)
NET INCREASE 1,946,852 4,086,726
(DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS
Distributions to (2,561,346) (5,662,895)
shareholders from net
investment income
Share transactions Net 511,714 19,918,622
proceeds from sales of shares
Reinvestment of 1,761,117 3,730,602
distributions
Cost of shares redeemed (6,918,119) (4,274,004)
NET INCREASE (4,645,288) 19,375,220
(DECREASE) IN NET ASSETS
RESULTING FROM SHARE
TRANSACTIONS
TOTAL INCREASE (5,259,782) 17,799,051
(DECREASE) IN NET ASSETS
NET ASSETS
Beginning of period 93,337,226 75,538,175
End of period (including $ 88,077,444 $ 93,337,226
distributions in excess of
net investment income of
$10,930 and $4,812,
respectively)
OTHER INFORMATION
Shares
Sold 55,018 2,096,305
Issued in reinvestment 189,062 394,533
of distributions
Redeemed (743,437) (451,216)
Net increase (decrease) (499,357) 2,039,622
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED DECEMBER 31, YEARS ENDED JUNE 30,
1999
(UNAUDITED) 1999 1998 1997 1996 1995
SELECTED PER-SHARE DATA
Net asset value, $ 9.350 $ 9.510 $ 9.650 $ 9.820 $ 9.910 $ 9.850
beginning of period
Income from Investment .260 D .615 D .660 D .729 D .601 .505
Operations Net investment
income
Net realized and unrealized (.060) (.157) (.134) (.170) (.093) .058
gain (loss)
Total from investment .200 .458 .526 .559 .508 .564
operations
Less Distributions
From net investment income (.260) (.618) (.666) (.729) (.598) (.504)
Net asset value, end of $ 9.290 $ 9.350 $ 9.510 $ 9.650 $ 9.820 $ 9.910
period
TOTAL RETURN B, C 2.17% 4.94% 5.63% 5.89% 5.25% 5.87%
RATIOS AND
SUPPLEMENTAL DATA
Net assets, end of period $ 88 $ 93 $ 76 $ 69 $ 64 $ 70
(in millions)
Ratio of expenses to .35% A .35% .36% .37% .38% .41%
average net assets
Ratio of expenses to .35% A .35% .35% E .37% .38% .41%
average net assets after
expense reductions
Ratio of net investment 5.56% A 6.51% 6.93% 7.48% 6.06% 5.12%
income to average net assets
Portfolio turnover rate 158% A 256% 433% 232% 89% 519%
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
NOTES TO FINANCIAL STATEMENTS
For the period ended December 31, 1999 (Unaudited)
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 government 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 each trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
DEFERRED TRUSTEE COMPENSATION. 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. Dividends are declared daily and paid monthly from net
interest income. Distributions to shareholders from realized capital
gains on investments, 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 capital loss carryforwards and losses deferred due to
excise tax regulations.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Distributions in excess of net investment income and accumulated
undistributed net realized gain (loss) on investments may include
temporary book and tax basis differences that 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 long-term U.S. government and
government agency obligations aggregated $68,542,443 and $71,643,838,
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 weighted average series of rates ranging from .290% to .350% of each
fund's average net assets. For the period, the management fees paid to
FMR were equivalent to an annualized rate of .32% and .35% for the
Cash and Term Portfolios, respectively.
SUB-ADVISER FEE. As each funds' investment sub-adviser, Fidelity
Investments Money Management, 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 each fund'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, FMR paid FDC $2,056,257 and
$68,618 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.
Through an arrangement with each fund's transfer agent, credits
realized as a result of uninvested cash balances were used to reduce a
portion of each fund's expenses. During the period, Cash and Term
Portfolios' expenses were reduced by $2,612 and $121, respectively,
under these arrangements.
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
Boyce I. Greer, VICE PRESIDENT
Robert K. Duby, VICE PRESIDENT
Eric D. Roiter, SECRETARY
Richard A. Silver, TREASURER
Matthew N. Karstetter, DEPUTY TREASURER
John H. Costello, ASSISTANT TREASURER
Thomas J. Simpson, ASSISTANT TREASURER
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
Fidelity Investments Money Management, Inc. (FIMM)
Merrimack, NH
TRANSFER AGENT
Fidelity Investments Institutional Operations Company, Inc.
Boston, MA
*INDEPENDENT TRUSTEES
