FIDELITY ADVISOR SERIES III, 497, 1994-07-07

FIDELITY ADVISOR SERIES III
497, 1994-07-07

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FIDELITY ADVISOR FUNDS CLASS A
PROSPECTUS
82 DEVONSHIRE STREET
BOSTON, MASSACHUSETTS 02109
JUNE 30 , 1994
The Fidelity Advisor Funds (Funds) offer investors a broad selection of
portfolios.
INTERNATIONAL FUNDS:
FIDELITY ADVISOR OVERSEAS FUND
FIDELITY ADVISOR EMERGING MARKETS INCOME FUND
EQUITY FUNDS:
FIDELITY ADVISOR EQUITY PORTFOLIO GROWTH
FIDELITY ADVISOR GROWTH OPPORTUNITIES FUND
FIDELITY ADVISOR GLOBAL RESOURCES FUND
FIDELITY ADVISOR STRATEGIC OPPORTUNITIES FUND
(formerly Fidelity Special Situations Fund: Advisor Class)
FIDELITY ADVISOR EQUITY PORTFOLIO INCOME
FIDELITY ADVISOR INCOME & GROWTH FUND
FIXED-INCOME FUNDS:
FIDELITY ADVISOR HIGH YIELD FUND
FIDELITY ADVISOR LIMITED TERM BOND FUND
FIDELITY ADVISOR GOVERNMENT INVESTMENT FUND
FIDELITY ADVISOR SHORT FIXED-INCOME FUND

MUNICIPAL/TAX-EXEMPT FUNDS:
FIDELITY ADVISOR HIGH INCOME MUNICIPAL FUND
FIDELITY ADVISOR LIMITED TERM TAX-EXEMPT FUND
FIDELITY ADVISOR SHORT-INTERMEDIATE TAX-EXEMPT FUND
Fidelity Advisor Equity Portfolio Growth is a portfolio of Fidelity Advisor
Series I. Fidelity Advisor Growth Opportunities Fund, Fidelity Advisor
Income & Growth Fund, Fidelity Advisor High Yield Fund, Fidelity
Advisor Government Investment Fund and Fidelity Advisor Short Fixed-Income
Fund are portfolios of Fidelity Advisor Series II. Fidelity Advisor Equity
Portfolio Income is a portfolio of Fidelity Advisor Series III. Fidelity
Advisor Limited Term Bond Fund is a portfolio of Fidelity Advisor Series
IV. Fidelity Advisor Global Resources Fund and Fidelity Advisor High Income
Municipal Fund are portfolios of Fidelity Advisor Series V. Fidelity
Advisor Limited Term Tax-Exempt Fund and Fidelity Advisor
Short-Intermediate Tax-Exempt Fund are portfolios of Fidelity Advisor
Series VI. Fidelity Advisor Overseas Fund is a portfolio of Fidelity
Advisor Series VII. Fidelity Advisor Strategic Opportunities Fund and
Fidelity Advisor Emerging Markets Income Fund are portfolios of Fidelity
Advisor Series VIII. Certain funds sell two classes of shares to retail
investors: Class A shares and Class B shares. Class A shares are offered
through this prospectus. Class B shares are offered through a separate
prospectus.
FIDELITY ADVISOR EMERGING MARKETS INCOME FUND, FIDELITY ADVISOR HIGH
YIELD FUND AND FIDELITY ADVISOR HIGH INCOME MUNICIPAL FUND MAY INVEST
WITHOUT LIMITATION IN LOWER-QUALITY DEBT SECURITIES, SOMETIMES CALLED "JUNK
BONDS." INVESTORS SHOULD CONSIDER THAT THESE SECURITIES CARRY GREATER
RISKS, SUCH AS THE RISK OF DEFAULT, THAN OTHER DEBT SECURITIES. REFER TO
"INVESTMENT POLICIES AND RISKS" ON PAGE FOR FURTHER INFORMATION.
Please read this Prospectus before investing. It is designed to provide you
with information and help you decide if a Fund's goals match your own.
RETAIN THIS DOCUMENT FOR FUTURE REFERENCE.
A Statement of Additional Information (SAI) dated June 30 , 1994 for
each Fund has been filed with the Securities and Exchange Commission (SEC)
and each is incorporated herein by reference. SAIs and each Fund's Annual
Report are available free upon request from Fidelity Distributors
Corporation (Distributors), 82 Devonshire Street, Boston, MA 02109, or from
your investment professional.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE
NOT INSURED BY THE FDIC, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY,
AND ARE SUBJECT TO INVESTMENT RISK,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
(registered trademark)

TABLE OF CONTENTS Page
FINANCIAL HISTORY
Shareholder Transaction Expenses
FINANCIAL HIGHLIGHTS
INVESTMENT OBJECTIVES
INVESTMENT POLICIES AND RISKS
INVESTMENT LIMITATIONS
HOW TO BUY SHARES
Sales Charges and Investment Professional Concessions
Minimum Account Balance
Sales Charge Waivers
INVESTOR SERVICES
Quantity Discounts
Combined Purchases
Rights of Accumulation
Letter of Intent
Fidelity Advisor Systematic Investment Program
SHAREHOLDER COMMUNICATIONS
HOW TO EXCHANGE
Fidelity Advisor Systematic Exchange Program
HOW TO SELL SHARES
Redemption Requests by Telephone
Redemption Requests in Writing
Reinstatement Privilege
Fidelity Advisor Systematic Withdrawal Program
Checkwriting Service
DISTRIBUTION OPTIONS
DISTRIBUTIONS AND TAXES
Distributions
Capital Gains
"Buying a Dividend"
Federal Taxes
Effect of Foreign Taxes 26
State and Local Taxes
Other Tax Information
FEES
Management and Other Services
Distribution and Service Plans
VALUATION
PERFORMANCE
PORTFOLIO TRANSACTIONS
THE TRUSTS AND THE FIDELITY ORGANIZATION
APPENDIX
FINANCIAL HISTORY
The purpose of the table below is to assist you in understanding the
various costs and expenses that an investor in Class A shares of each
fund would bear directly or indirectly. This standard format was
developed for use by all mutual funds to help investors make
investment decisions. This expense information should be considered
along with other important information such as each Fund's investment
objective and past performance .
1.SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge (as a percentage of the offering price)
- -Short-Intermediate Tax-Exempt Fund 1.50 %
- -Short Fixed-Income Fund 1.50 %
- -Other Fidelity Advisor Funds 4.75 %
Sales Charge on Reinvested Distributions None
Deferred Sales Charge on Redemptions None
Redemption Fees None
Exchange Fees None
SHAREHOLDER TRANSACTION EXPENSES represent charges paid when you purchase,
sell or exchange Class A shares of a Fund. If you exchange Class A shares
or direct dividends of Short Fixed-Income Fund or Short-Intermediate
Tax-Exempt into Class A shares of other Fidelity Advisor Funds, a
differential sales charge may apply. Lower sales charges may be available
with purchases of $50,000 or more or in conjunction with various programs.
See "How to Buy Shares," page .

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ANNUAL OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)

INTERNATIONAL FUNDS: MANAGEM 12B-1 OTHER TOTAL
ENT FEE EXPENSE OPERATING
FEE (DISTRIBUT S EXPENSES
ION
FEE)

Overseas .77% .65% .96% 2.38%

Emerging Markets Income1 .71% .25% .54%* 1.50%

EQUITY FUNDS:

Equity Portfolio Growth .66% .65% .53%* 1.84%

Growth Opportunities .68% .65% .31%* 1.64%

Global Resources .77% .65% 1.20%* 2.62%

Strategic Opportunities .54% .65% .38% 1.57%

Equity Portfolio Income .50% .65% .62% 1.77%

Income & Growth .53% .65% .33%* 1.51%

FIXED-INCOME FUNDS:

High Yield .51% .25% .35% 1.11%

Limited Term Bond .42% .25% .23%* .90%

Government Investment . 46 % .25% . 24 %* . 95 %

Short Fixed-Income .47% .15% .33% .95%

MUNICIPAL/TAX-EXEMPT FUNDS:

High Income Municipal .42% .25% .25% .92%

Limited Term Tax-Exempt .42% .25% .23%* .90%

Short-Intermediate Tax-Exempt1 .41% .15% .19%* .75%

</TABLE>

* AFTER EXPENSE REDUCTIONS
1 PROJECTIONS ARE BASED ON ESTIMATED EXPENSES FOR FIRST YEAR.

ANNUAL OPERATING EXPENSES are based on historical expenses for the most
recent fiscal year ended o r in the case of Emerging Markets Income
and Short-Intermediate T a x-Exempt are based on estimated expenses
for the first year of operation. M anagement fees are paid by each
Fund to Fidelity Management & Research Company (FMR) for managing its
investments and business affairs. Management fees for Overseas, Growth
Opportunities and Strategic Opportunities will vary based on
performance . Distribution fees are paid by Class A shares of the
Funds to Distributors for services and expenses in connection with the
distribution of Class A shares. Long-term shareholders may pay more than
the economic equivalent of the maximum front-end sales charges permitted by
the National Association of Securities Dealer s, Inc. (NASD )
due to 12b-1 fees. The Funds incur other expenses for maintaining
shareholder records, furnishing shareholder statements and reports,
c ustodial, legal and accounting services, registering a Trust or
F und with federal and state regulatory authorities and other
miscella n eous services. A portion of the brokerage commissions that
Equity Portfolio Growth, Growth Opportunities, Global Resources and Income
& Growth paid were used to reduce Fund expenses. Without this
reduction, other expenses and the total operating expenses for their
Class A shares would have been .54% and 1.85%, respectively (Equity
Portfolio Growth); .32% and 1.65%, respectively (Growth Opportunities);
1.21% and 2.63%, respectively (Global Resources); and .34% and 1.52%,
respectively (Income and Growth). FMR has voluntarily agreed to
reimburse Emerging Markets Income, Government Investment, Limited Term
Tax-Exempt, Short-Intermediate Tax-Exempt and (effective July 1, 1994)
Limited Term Bond, to the extent that total operating expenses for Class A
shares (exclusive of taxes, interest, brokerage commissions, and
extraordinary expenses) are in excess of an annual rate of 1.50%,
0. 9 5%, 0.90%, .75%, and .90% respectively, of average net assets. If
reimbursements were not in effect, the management fees, other expenses
(including Distribution F ees) and total operating expenses
for Class A shares would have been: . 71%, 1.08%, and 1.79% (Emerging
Markets Income, estimated); .46%, .86%, and 1.32%, (Government
Investment); . 42%, .94%, and 1.36%, (Limited Term Tax-Exempt) ;
.41%, .66%, and 1.07% (Short-Intermediate Tax-Exempt, estimated); and 42%,
.81% and 1.23% (Limited Term Bond). Please refer to the section "Fees,"
page .

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
EXPENSE TABLE EXAMPLE:
You would pay the following expenses, including the
maximum sales charge, on a $1,000 investment in Class
A shares of a Fund assuming (1) a 5% annual return
and (2) full redemption at the end of each time period:

INTERNATIONAL FUNDS:
1 YEAR 3 YEARS 5 YEARS 10 YEARS

Overseas $ 70 $ 118 $ 169 $ 306

Emerging Markets Income1 62 93 -- --

EQUITY FUNDS:

Equity Portfolio Growth 65 103 142 265

Growth Opportunities 63 97 132 233

Global Resources 73 125 180 329

Strategic Opportunities 63 95 129 225

Equity Portfolio Income 65 101 139 246

Income & Growth 62 93 126 219

FIXED-INCOME FUNDS:

High Yield 58 81 106 176

Limited Term Bond 56 75 95 153

Government Investment 53 66 79 119

Short Fixed-Income 25 45 67 130

MUNICIPAL/TAX-EXEMPT FUNDS:

High Income Municipal 56 75 96 155

Limited Term Tax-Exempt 56 75 95 153

Short-Intermediate Tax-Exempt1 26 48 -- --

</TABLE>

The HYPOTHETICAL EXAMPLE illustrates the expenses, including the maximum
sales charge, associated with a $1,000 investment in Class A shares of each
Fund over periods of one, three, five and ten years, based on the expenses
(after reimbursements, if any) in the above table and an assumed annual
return of 5%. THE RETURN OF 5% AND EXPENSES SHOULD NOT BE CONSIDERED
INDICATIONS OF ACTUAL OR EXPECTED CLASS A PERFORMANCE OR EXPENSES, BOTH OF
WHICH MAY VARY.
FINANCIAL HIGHLIGHTS
The tables that follow are included in each Fund's Annual Report (except
for Emerging Markets Income and Short-Intermediate Tax Exempt) and have
been audited by each Fund's independent accountants. Their reports on the
Financial Statements and Financial Highlights are included in each Fund's
Annual Report. The Financial Statements and Financial Highlights are
incorporated by reference into each Fund's Statement of Additional
Information. The Strategic Opportunities table provides semiannual
information and is unaudited.
FIDELITY ADVISOR OVERSEAS FUND
April 23, 1990
(Commencement of
Years Ended October 31, Operations) to
1993 1992 1991 October 31, 1990

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SELECTED PER-SHARE DATA

Net asset value, beginning of period $ 9.07 $ 9.78 $ 9.55 $ 10.00

Income from Investment Operations

Net investment income .03 .05 .14 .05

Net realized and unrealized gain (loss) on investments 3.93 (.62) .17 (.50)

Total from investment operations 3.96 (.57) .31 (.45)

Less Distributions

From net investment income (.07) (.14) (.07) -

From net realized gain on investments (.03)(s diamond) - (.01)(s diamond)-

Total distributions (.10) (.14) (.08) -

Net asset value, end of period $ 12.93 $ 9.07 $ 9.78 $ 9.55

TOTAL RETURN (dagger)(double dagger) 44.13% (5.88)% 3.25% (4.50)%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted) $ 221,370 $ 18,652 $ 19,091 $ 18,161

Ratio of expenses to average net assets 2.38% 2.64% 2.85% 3.07%*+

Ratio of net investment income to average net assets (.18)% .48% 1.48% 1.45%*

Portfolio turnover rate 42% 168% 226% 137%*

</TABLE>

FIDELITY ADVISOR EMERGING MARKETS INCOME FUND

<TABLE>
<CAPTION>
<S> <C>
March 10, 1994

(commencement
of

operations) to

May 31, 1994

(Unaudited)

SELECTED PER-SHARE DATA

Net asset value beginning of period $ 10.000

Income from Investment Operations

Not Investment income .086

Net realized and unrealized gain (loss) on investments .247

Total from investment operations .333

Less Distributions

From net investment income (.083)

Net asset value end of period $ 10.250

TOTAL RETURN (dagger) (double dagger) 3.36%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted) $ 7,119

Ratio of expenses to average net assets 1.50%*

Ratio of expenses to average net assets before voluntary expense reductions 2.60%*+

Ratio of net investment income to average net assets 3.83%*

Portfolio turnover rate 107%

</TABLE>

* ANNUALIZED.
(dagger) TOTAL RETURN DOES NOT INCLUDE THE ONE TIME SALES CHARGE AND,
FOR PERIODS OF LESS THAN ONE YEAR, IS NOT ANNUALIZED.
(double dagger) TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES
NOT BEEN REDUCED DURING THE PERIODS SHOWN.
(s diamond) INCLUDES AMOUNTS DISTRIBUTED FROM NET REALIZED GAINS ON
FOREIGN CURRENCY RELATED TRANSACTIONS TAXABLE AS ORDINARY INCOME.
+ EXPENSES WERE LIMITED TO A PERCENTAGE OF AVERAGE NET ASSETS IN
ACCORDANCE WITH A STATE LIMITATION.
FIDELITY ADVISOR EQUITY PORTFOLIO GROWTH
Equity Portfolio
Growth - Class A Equity Portfolio Growth - Institutional
Class
Year Period
Ended Ended
Nov. 30, Nov. 30 Years Ended November 30,
SELECTED PER-SHARE DATA 1993 1992** 1993 1992 1991 1990 1989 1988 1987 1986
1985 1984
Net asset value, beginning of period $ 26.33 $ 23.78 $ 26.37 $ 24.28 $
15.55 $ 17.32 $ 12.02 $ 9.92 $ 13.18 $ 11.09 $ 8.03 $ 10.05
Income from Investment Operations
Net investment income (.07)(dagger)(dagger) .01(dagger)(dagger)
.19(dagger)(dagger) .17(dagger)(dagger) .04 .01 .06 .28#
.00(dagger)(dagger) .03 .01 .02
Net realized and unrealized gain
(loss) on investments 3.82 2.54 3.78 4.55 8.69 .34 5.50 2.59
(2.03) 2.41 3.05 (2.04)
Total from investment operations 3.75 2.55 3.97 4.72 8.73 .35
5.56 2.87 (2.03) 2.44 3.06 (2.02)
Less Distributions
From net investment income (.08) - (.10) (.03) - (.08) (.26)
(.01) (.01) (.02) - -
From net realized gain on investments (.50) - (.50) (2.60) -
(2.04) - (.76) (1.22) (.33) - -
Total distributions (.58) - (.60) (2.63) - (2.12) (.26) (.77)
(1.23) (.35) - -
Net asset value, end of period $ 29.50 $ 26.33 $ 29.74 $ 26.37 $ 24.28 $
15.55 $ 17.32 $ 12.02 $ 9.92 $ 13.18 $ 11.09 $ 8.03
TOTAL RETURN (dagger)(double dagger) 14.52% 10.72% 15.36% 21.14%
56.14% 2.75% 47.18% 29.77% (17.12)% 22.55% 38.11% (20.10)%
RATIOS AND SUPPLEMENTAL DATA
Net Assets, end of period (000 omitted) $ 377,984 $ 22,655 $ 296,466 $
179,325 $ 68,766 $ 27,473 $ 24,523 $ 20,182 $ 43,537 $ 63,607 $ 23,447 $
4,117
Ratio of expenses to average net assets 1.84%## 1.47%* .94%## .98%
1.13% 1.74% 1.60% 1.47% 1.11% 1.07% 1.50%+ 1.50%+
Ratio of expenses to average net assets
before expense reductions 1.85%## 1.47%* .95% ## .98% 1.13% 1.74%
1.60% 1.47% 1.11% 1.07% 1.50%+ 1.50%+
Ratio of net investment income to
average net assets (.24)% .25%* .66% .73% .25% .07% .38% 1.20%
.00% .29% .43% .33%
Portfolio turnover rate 160% 240% 160% 240% 254% 262% 269% 331%
226% 115% 108% 453%
FIDELITY ADVISOR GROWTH OPPORTUNITIES FUND
November 18, 1987
(Commencement of
Years Ended October 31, Operations) to
1993 1992 1991 1990 1989 October 31, 1988

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA

Net asset value, beginning of period $ 21.14 $ 20.58 $ 12.99 $ 16.53 $ 14.27 $ 10.00

Income from Investment Operations

Net investment income .08 .14 .06 .18(s diamond).02 .05

Net realized and unrealized gain (loss) on investments 5.56 2.04 7.70 (2.50) 3.03 4.22

Total from investment operations 5.64 2.18 7.76 (2.32) 3.05 4.27

Less Distributions

From net investment income (.13) (.09) (.17) (.05) (.03) -

From net realized gain on investments (1.26) (1.53) - (1.17) (.76) -

Total distributions (1.39) (1.62) (.17) (1.22) (.79) -

Net asset value, end of period $ 25.39 $ 21.14 $ 20.58 $ 12.99 $ 16.53 $ 14.27

TOTAL RETURN (dagger)(double dagger) 28.11% 12.09% 60.25% (15.05)% 22.69% 42.70%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted) $ 2,054,988 $ 580,595 $ 213,095 $ 51,122 $ 34,351 $ 8,097

Ratio of expenses to average net assets 1.64%# 1.60% 1.73% 2.00% 2.45% 2.52%*
# +

Ratio of expenses to average net assets before expense
reductions 1.65%# 1.60% 1.73% 2.00% 2.45% 2.52%*
#

Ratio of net investment income to average net assets .43% .80% .47% 1.49% .31% .82%*

Portfolio turnover rate 69% 94% 142% 136% 163% 143%*

</TABLE>

* ANNUALIZED.
** INITIAL OFFERING OF CLASS A SHARES, SEPTEMBER 10, 1992.
(dagger) TOTAL RETURN DOES NOT INCLUDE THE ONE TIME SALES CHARGE AND, FOR
PERIODS OF LESS THAN ONE YEAR, IS NOT ANNUALIZED.
(dagger)(dagger) NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED
ON AVERAGE SHARES OUTSTANDING.
(double dagger) TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
# DURING THE PERIOD A SHAREHOLDER REDEEMED A SIGNIFICANT PORTION OF THE
ASSETS OF THE FUND. DUE TO THE TIMING OF THIS TRANSACTION, THE FUND
EXPERIENCED AN UNUSUALLY HIGH LEVEL OF INVESTMENT INCOME PER SHARE.
## FMR HAS DIRECTED CERTAIN PORTFOLIO TRADES TO BROKERS WHO PAID A PORTION
OF THE FUND'S EXPENSES.
(s diamond) NET INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND
WHICH AMOUNTED TO $.09 PER SHARE.
+ EXPENSES WERE LIMITED TO A PERCENTAGE OF AVERAGE NET ASSETS IN ACCORDANCE
WITH A STATE EXPENSE LIMITATION.
FIDELITY ADVISOR GLOBAL RESOURCES FUND
December 29, 1987
(Commencement of
Years Ended October 31, Operations) to
1993 1992 1991 1990 1989 October 31, 1988

<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA

Net asset value, beginning of period
$ 13.88 $ 14.11 $ 12.30 $ 12.60 $ 11.47 $ 10.00

Income from Investment Operations

Net investment income
.22 (.10) (.15) (.10) .10(s diamond) (.05)

Net realized and unrealized gain (loss) on investments
4.91 .79 2.45 .93 1.96 1.52

Total from investment operations
5.13 .69 2.30 .83 2.06 1.47

Less Distributions

From net investment income
- - - (.08) - -

From net realized gain on investments
(1.42) (.92) (.49) (1.05) (.93) -

Total distributions
(1.42) (.92) (.49) (1.13) (.93) -

Net asset value, end of period
$ 17.59 $ 13.88 $ 14.11 $ 12.30 $ 12.60 $ 11.47

TOTAL RETURN (dagger)(double dagger)
41.05% 5.97% 19.50% 6.37% 19.63% 14.70%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted)
$ 40,309 $ 7,087 $ 5,940 $ 4,615 $ 2,049 $ 916

Ratio of expenses to average net assets
2.62%** 3.27%(dagger)(dagger) 3.35%(dagger)(dagger) 3.34%(dagger)(dagger) 3.23%(dagger)(dagger) 2.85%*(dagger)

(dagger)

Ratio of expenses to average net assets before expense
2.63%** 3.94% 3.35% 3.34% 3.23% 2.85%*
reductions

Ratio of net investment income to average net assets
(1.18)% (1.22)% (1.28)% (1.13)% .83% (.64)%*

Portfolio turnover rate
208% 248% 256% 229% 249% 220%*

</TABLE>

SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 22.52 $ 19.53 $ 21.38 $ 17.21
$ 19.55 $ 15.53 $ 19.06 $ 16.71 $ 17.81
Income from Investment Operations
Net investment income (.24) .33 .61 .66 .70 .50 .42 .46
.08 (s diamond)
Net realized and unrealized gain (loss) on investments (.69)
4.44 .58 4.26 (2.49) 4.08 (1.80) 2.95 (1.18)
Total from investment operations (.93) 4.77 1.19 4.92 (1.79)
4.58 (1.38) 3.41 (1.10)
Less Distributions
From net investment income (.43) (.57) (.62) (.75) (.55)
(.56) (.24) (.09) --
From net realized gain on investments (1.71) (1.21) (2.42) -
-- -- (1.91) (.97) --
Total distributions (2.14) (1.78) (3.04) (.75) (.55) (.56)
(2.15) (1.06) -
Net asset value, end of period $ 19.45 $ 22.52 $ 19.53 $ 21.38 $
17.21 $ 19.55 $ 15.53 $ 19.06 $ 16.71
TOTAL RETURN (dagger)(double dagger) (4.73%) 26.33% 7.26%
29.51% (9.49)% 30.45% (4.98)% 21.28% (6.23)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 331,650 $ 269,833 $ 194,694 $
199,604 $ 172,083 $ 198,198 $ 191,454 $ 283,117 $ 22,141
Ratio of expenses to average net assets 1.88%* 1.57%++ 1.46% 1.56%
1.59% 1.51% 1.71% 1.67%+ 1.50%* +
Ratio of net investment income to average net assets 1.49%* 2.06% 3.22%
3.61% 3.70% 3.23% 3.10% 2.36% 2.77%*
Portfolio turnover rate 241%* 183% 211% 223% 114% 89% 160% 225% --

* ANNUALIZED.
** FMR HAS DIRECTED CERTAIN PORTFOLIO TRADES TO BROKERS WHO PAID A PORTION
OF THE FUND'S EXPENSES.
(dagger) TOTAL RETURN DOES NOT INCLUDE THE ONE TIME SALES CHARGE AND, FOR
PERIODS OF LESS THAN ONE YEAR, IS NOT ANNUALIZED.
(dagger)(dagger) AS OF OCTOBER 1, 1991, THE FUND DISCONTINUED THE USE OF
EQUALIZATION ACCOUNTING.
# EXPENSES WERE LIMITED TO A PERCENTAGE OF AVERAGE NET ASSETS IN ACCORDANCE
WITH A STATE EXPENSE LIMITATION REGULATION.
(double dagger) TOTAL RETURN WOULD HAVE BEEN LOWER HAD FMR NOT REIMBURSED
CERTAIN EXPENSES DURING THE PERIODS SHOWN.
(s diamond) NET INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND
WHICH AMOUNTED TO $.17 PER SHARE.
(h diamond) NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON
UNDISTRIBUTED NET INVESTMENT INCOME PER SHARE AT THE END OF THE PERIOD LESS
THE AMOUNT OF UNDISTRIBUTED NET INVESTMENT INCOME PER SHARE OF THE FUND AT
AUGUST 20, 1986.
+ EXPENSES WERE LIMITED IN ACCORDANCE WITH A STATE EXPENSE LIMITATION. IN
ADDITION, DURING THE PERIOD JULY 1, 1986 THROUGH OCTOBER 31, 1987 FMR
WAIVED .05% OF THE ANNUAL INDIVIDUAL FUND FEE OF .35%.
++ INCLUDES REIMBURSEMENT OF $.03 PER SHARE FROM FMR FOR ADJUSTMENTS TO
PRIOR PERIODS' FEES. IF THIS REIMBURSEMENT HAD NOT EXISTED THE RATIO OF
EXPENSES TO AVERAGE NET ASSETS WOULD HAVE BEEN 1.73%.
FIDELITY ADVISOR EQUITY PORTFOLIO INCOME
Equity Portfolio
Income - Class A Equity Portfolio Income -
Institutional Class

<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA

Net asset value, beginning of period
$ 14.41 $ 14.13 $ 10.41 $ 12.77 $ 11.07 $ 9.44 $ 10.00

Income from Investment Operations

Net investment income
.48 .50 .51 .56 1.01(dagger)(dagger) .62 .27

Net realized and unrealized gain (loss) on
2.18 .85 3.74 (1.34) 1.27 1.56 (.63)
investments

Total from investment operations
2.66 1.35 4.25 (.78) 2.28 2.18 (.36)

Less Distributions

From net investment income
(.56) (.46) (.53) (1.06) (.58) (.55) (.20)

From net realized gain on investments
(.60) (.61) - (.52) - - -

Total distributions
(1.16) (1.07) (.53) (1.58) (.58) (.55) (.20)

Net asset value, end of period
$ 15.91 $ 14.41 $ 14.13 $ 10.41 $ 12.77 $ 11.07 $ 9.44

TOTAL RETURN (dagger)(double dagger)
19.66% 10.27% 41.73% (7.15)% 21.15% 23.66% (3.90)%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted)
$ 1,654,124 $ 397,672 $ 135,533 $ 60,934 $ 46,139 $ 36,224 $ 34,376

Ratio of expenses to average net assets
1.51%# 1.60% 1.71% 1.85% 1.91% 2.06% 2.06%*

Ratio of expenses to average net assets before
1.52%# 1.60% 1.71% 1.85% 1.91% 2.06% 2.06%*
expense reductions
#

Ratio of net investment income to average net
3.24% 3.97% 4.19% 5.29% 8.80% 5.83% 3.95%*
assets

Portfolio turnover rate
200% 389% 220% 297% 151% 204% 206%*

</TABLE>

* ANNUALIZED.
** INITIAL OFFERING OF CLASS A SHARES, SEPTEMBER 10, 1992.
(dagger) TOTAL RETURN DOES NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
(dagger)(dagger) NET INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL
DIVIDEND WHICH AMOUNTED TO $ .26 PER SHARE.
(dagger)(dagger)(dagger) IN JULY 1985, THE SEC ADOPTED REVISIONS TO
EXISTING RULES WITH RESPECT TO THE CALCULATION OF THE PORTFOLIO TURNOVER
RATE. THE REVISED RULES REQUIRE THE INCLUSION IN THE CALCULATION OF
LONG-TERM U.S. GOVERNMENT SECURITIES WHICH, PRIOR TO THESE REVISIONS, WERE
EXCLUDED FROM THE CALCULATION.
(double dagger) TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
(h diamond) EFFECTIVE APRIL 1, 1987 TO SEPTEMBER 10, 1992, FMR REIMBURSED
.10% OF THE ANNUAL MANAGEMENT FEE OF .50%.
# INCLUDES $.04 PER-SHARE FROM FOREIGN TAXES RECOVERED.
## FMR HAS DIRECTED CERTAIN PORTFOLIO TRADES TO BROKERS WHO PAID A PORTION
OF THE FUND'S EXPENSES.
FIDELITY ADVISOR HIGH YIELD FUND
January 5, 1987
(Commencement of
Years Ended October 31, Operations) to
1993 1992 1991 1990 1989 1988 October 31, 1987

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA

Net asset value, beginning of period $ 11.070 $ 10.120 $ 8.150 $ 8.970 $ 9.860 $ 9.090 $ 10.000

Income from Investment Operations

Net investment income .980 1.146 1.115 1.144 1.237 1.165 .878

Net realized and unrealized gain (loss) on 1.153 .975 1.948 (.820) (.890) .770 (.910)
investments

Total from investment operations 2.133 2.121 3.063 .324 .347 1.935 (.032)

Less Distributions

From net investment income (.963) (1.171) (1.093) (1.144) (1.237) (1.165) (.878)

From net realized gain on investments (.230) - - - - - -

Total distributions (1.193) (1.171) (1.093) (1.144) (1.237) (1.165) (.878)

Net asset value, end of period $ 12.010 $ 11.070 $ 10.120 $ 8.150 $ 8.970 $ 9.860 $ 9.090

TOTAL RETURN (dagger)(double dagger) 20.47% 21.96% 39.67% 3.58% 3.34% 22.14% (.81)%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted) $ 485,559 $ 136,316 $ 38,681 $ 15,134 $ 13,315 $ 11,900 $ 9,077

Ratio of expenses to average net assets 1.11% 1.10% 1.10% 1.10% 1.10% 1.10% 1.24%*

Ratio of expenses to average net assets before1.11% 1.16% 1.76% 2.04% 2.17% 2.22% 2.25%*(dagger)
voluntary (dagger)
expense limitation

Ratio of net investment income to average net 8.09% 9.95% 12.20% 12.72% 12.98% 11.86% 10.74%*
assets

Portfolio turnover rate 79% 100% 103% 90% 131% 135% 166%*

</TABLE>

FIDELITY ADVISOR LIMITED TERM BOND FUND
Limited Term
Bond Fund - Class A Limited Term Bond Fund - Institutional
Class

Year Period February 2, 1984
Ended Ended (Commencement
Nov. 30, Nov. 30 Years Ended November 30, of Operations) to
SELECTED PER-SHARE DATA 1993 1992** 1993 1992 1991 1990 1989 1988 1987 1986
1985 November 30, 1984
Net asset value, beginning
of period $ 10.640 $ 10.960 $ 10.640 $ 10.550 $ 10.140 $ 10.410 $ 10.180
$ 10.250 $ 11.240 $ 10.550 $ 9.960 $ 10.000
Income from Investment Operations
Net investment income .785 .170 .832 .840 .884 .901 .937 .944
.953 1.026 1.053 .897
Net realized and unrealized gain (loss)
on investments .511 (.320)+ .531 .102 .411 (.270) .230 (.070)
(.770) .710 .590 (.040)
Total from investment operations 1.296 (.150) 1.363 .942 1.295 .631
1.167 .874 .183 1.736 1.643 .857
Less Distributions
From net investment income (.796) (.170) (.843) (.852) (.885)
(.901) (.937) (.944) (.953) (1.026) (1.053) (.897)
From net realized gain on investments - -- -- -- -- -- -- --
(.220) (.020) -- --
Total distributions (.796) (.170) (.843) (.852) (.885) (.901)
(.937) (.944) (1.173) (1.046) (1.053) (.897)
Net asset value, end of period $ 11.140 $ 10.640 $ 11.160 $ 10.640 $
10.550 $ 10.140 $ 10.410 $ 10.180 $ 10.250 $ 11.240 $ 10.550 $ 9.960
TOTAL RETURN (dagger)(double dagger) 12.50% (1.37)% 13.17% 9.21%
13.35% 6.46% 12.03% 8.81% 1.78% 17.04% 17.40% 9.33%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 59,184 $ 2,583 $ 183,790 $
160,156 $ 327,756 $ 356,564 $ 426,832 $ 418,929 $ 407,228 $ 418,632 $
253,913 $ 15,192
Ratio of expenses to average net assets 1.23% .82%* .64% .57% .57%
.58% .54% .54% .53% .53% .65% 1.50%*(dagger)(dagger)
Ratio of net investment income to
average net assets 6.81% 7.67%* 7.41% 7.96% 8.59% 8.90% 9.16%
9.16% 9.03% 9.22% 10.29% 11.01%*
Portfolio turnover rate 59% 7% 59% 7% 60% 59% 87% 48% 92% 59%
88%(dagger)(dagger)(dagger) 12%*
* ANNUALIZED.
** INITIAL OFFERING OF CLASS A SHARES, SEPTEMBER 10, 1992.
(dagger) TOTAL RETURN DOES NOT INCLUDE THE ONE TIME SALES CHARGE AND, FOR
PERIODS OF LESS THAN ONE YEAR, IS NOT ANNUALIZED.
(dagger)(dagger) EXPENSES WERE LIMITED IN ACCORDANCE WITH A STATE EXPENSE
LIMITATION.
(dagger)(dagger)(dagger) IN JULY 1985, THE SEC ADOPTED REVISIONS TO
EXISTING RULES WITH RESPECT TO THE CALCULATION OF THE PORTFOLIO TURNOVER
RATE. THE REVISED RULES REQUIRE THE INCLUSION IN THE CALCULATION OF
LONG-TERM U.S. GOVERNMENT SECURITIES WHICH, PRIOR TO THESE REVISIONS, WERE
EXCLUDED FROM THE CALCULATION.
(double dagger) TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
+ THE AMOUNT SHOWN IN THIS CAPTION, WHILE DETERMINABLE BY THE SUMMATION OF
AMOUNTS COMPUTED DAILY AS SHARES WERE SOLD OR REPURCHASED, IS ALSO THE
BALANCING FIGURE DERIVED FROM THE OTHER FIGURES IN THE STATEMENT AND HAS
BEEN SO COMPUTED. THE AMOUNT SHOWN FROM THE PERIOD ENDED NOVEMBER 30, 1992
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD DOES NOT ACCORD WITH THE NET
REALIZED AND UNREALIZED GAIN ON INVESTMENTS FOR THE PERIOD BECAUSE OF THE
TIMING OF SALES AND REPURCHASES OF THE FUND SHARES IN RELATION TO
FLUCTUATING MARKET VALUES OF THE INVESTMENTS OF THE FUND.
FIDELITY ADVISOR GOVERNMENT INVESTMENT FUND
January 7, 1987
(Commencement of
Years Ended October 31, Operations) to
1993 1992 1991 1990 1989 1988 October 31, 1987

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA

Net asset value, beginning of period $ 9.730 $ 9.590 $ 9.150 $ 9.310 $ 9.260 $ 9.200 $ 10.000

Income from Investment Operations

Net investment income .567 .666 .700 .735 .773 .769 .614

Net realized and unrealized gain (loss) on .601 .125 .419 (.160) .050 .060 (.800)
investments

Total from investment operations 1.168 .791 1.119 .575 .823 .829 (.186)

Less Distributions

From net investment income (.558) (.651) (.679) (.735) (.773) (.769) (.614)

From net realized gain on investments (.200) - - - - - -

Total distributions (.758) (.651) (.679) (.735) (.773) (.769) (.614)

Net asset value, end of period $ 10.140 $ 9.730 $ 9.590 $ 9.150 $ 9.310 $ 9.260 $ 9.200

TOTAL RETURN (dagger)(double dagger) 12.53% 8.49% 12.65% 6.48% 9.37% 9.34% (1.84)%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted) $ 69,876 $ 23,281 $ 13,058 $ 9,822 $ 8,203 $ 6,590 $ 4,584

Ratio of expenses to average net assets .68% 1.10% 1.10% 1.10% 1.10% 1.10% 1.29%*

Ratio of expenses to average net assets before 1.32% 1.79% 2.46% 2.74% 2.75% 2.25% 2.36%*
voluntary
expense limitation

Ratio of net investment income to average net 6.11% 6.98% 7.47% 8.04% 8.45% 8.30% 8.12%*
assets

Portfolio turnover rate 333% 315% 54% 31% 42% 44% 32%*

</TABLE>

FIDELITY ADVISOR SHORT FIXED-INCOME FUND
September 16, 1987
(Commencement of
Years Ended October 31, Operations) to
1993 1992 1991 1990 1989 1988 October 31, 1987

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA

Net asset value, beginning of period $ 9.950 $ 9.870 $ 9.620 $ 9.950 $ 9.940 $ 10.060 $ 10.000

Income from Investment Operations

Net investment income .732 .830 .848 .868 .832 .852 .101

Net realized and unrealized gain (loss) on .146 .071 .270 (.330) .010 (.120) .060
investments

Total from investment operations .878 .901 1.118 .538 .842 .732 .161

Less Distributions

From net investment income (.738) (.821) (.868) (.868) (.832) (.852) (.101)

Net asset value, end of period $ 10.090 $ 9.950 $ 9.870 $ 9.620 $ 9.950 $ 9.940 $ 10.060

TOTAL RETURN (dagger)(double dagger) 9.13% 9.44% 12.19% 5.59% 8.89% 7.56% 1.61%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted) $ 654,202 $ 170,558 $ 25,244 $ 13,062 $ 12,394 $ 13,433 $ 3,252

Ratio of expenses to average net assets .95% .90% .90% .90% .90% .90% .90%*

Ratio of expenses to average net assets before.95% 1.03% 1.74% 1.90% 2.22% 1.84% 2.15%*(dagger)
voluntary (dagger)
expense limitation

Ratio of net investment income to average net 6.77% 7.59% 8.50% 8.86% 8.45% 8.39% 7.65%*
assets

Portfolio turnover rate 58% 57% 127% 144% 157% 178% 119%*

</TABLE>

* ANNUALIZED.
(dagger) TOTAL RETURN DOES NOT INCLUDE THE ONE TIME SALES CHARGE AND, FOR
PERIODS OF LESS THAN ONE YEAR, IS NOT ANNUALIZED.
(dagger)(dagger) EXPENSES WERE LIMITED IN ACCORDANCE WITH A STATE EXPENSE
LIMITATION.
(double dagger) TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
FIDELITY ADVISOR HIGH INCOME MUNICIPAL FUND
September 16, 1987
(Commencement of
Years Ended October 31, Operations) to
SELECTED PER-SHARE DATA 1993 1992 1991 1990 1989 1988 October
31, 1987

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 11.650 $ 11.410 $ 10.870 $ 10.820 $ 10.460 $ 9.850 $ 10.000

Income from Investment Operations

Net interest income .710 .774 .803 .811 .800 .750 .092

Net realized and unrealized gain (loss) on 1.100 .250 .660 .150 .410 .610 (.150)
investments

Total from investment operations 1.810 1.024 1.463 .961 1.210 1.360 (.058)

Less Distributions

From net interest income (.710) (.774) (.803) (.811) (.800) (.750) (.092)

From net realized gain on investments (.030) (.010) (.120) (.100) (.050) - -

Total distributions (.740) (.784) (.923) (.911) (.850) (.750) (.092)

Net asset value, end of period $ 12.720 $ 11.650 $ 11.410 $ 10.870 $ 10.820 $ 10.460 $ 9.850

TOTAL RETURN (dagger)(double dagger) 15.95% 9.21% 14.02% 9.28% 12.05% 14.22% (.58)%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted) $ 497,575 $ 156,659 $ 67,135 $ 22,702 $ 6,669 $ 3,290 $ 1,275

Ratio of expenses to average net assets .92% .90% .90% .90% .90% .89% .80%*

Ratio of expenses to average net assets before.92% .96% 1.24% 2.09% 2.75% 2.25% 2.25%*
voluntary (h diamond)(h diamond)(h diamond)
expense limitation

Ratio of net interest income to average
net assets 5.59% 6.59% 7.08% 7.37% 7.60% 7.33% 7.24%*

Portfolio turnover rate 27% 13% 10% 11% 27% 19% -%

</TABLE>

FIDELITY ADVISOR LIMITED TERM TAX-EXEMPT FUND
Limited Term
Tax-Exempt Fund - Class A Limited Term Tax-Exempt Fund -
Institutional Class
September 19, 1985
Year Period (Commencement
Ended Ended of Operations) to
Nov. 30 Nov. 30 Years Ended November 30, November 30,
SELECTED PER-SHARE DATA 1993 1992** 1993 1992 1991 1990 1989 1988 1987
1986 1985
Net asset value, beginning of period $ 11.080 $ 11.010 $ 11.080 $ 10.800 $
10.640 $ 10.610 $ 10.520 $ 10.380 $ 10.990 $ 10.280 $ 10.000
Income from Investment Operations
Net interest income .508 .131 .536 .666 .682 .689 .674 .650 .641
.671 .130
Net realized and unrealized gain (loss) on investments .260 .070 .260
.280 .160 .030 .090 .140 (.540) .760 .280
Total from investment operations .768 .201 .796 .946 .842 .719
.764 .790 .101 1.431 .410
Less Distributions
From net interest income (.508) (.131) (.536) (.666) (.682) (.689)
(.674) (.650) (.641) (.671) (.130)
From net realized gain on investments (.880) -- (.880) -- -- --
- -- -- (.070) (.050) --
Total distributions (1.388) (.131) (1.416) (.666) (.682) (.689)
(.674) (.650) (.711) (.721) (.130)
Net asset value, end of period $ 10.460 $ 11.080 $ 10.460 $ 11.080 $
10.800 $ 10.640 $ 10.610 $ 10.520 $ 10.380 $ 10.990 $ 10.280
TOTAL RETURN (dagger)(double dagger) 7.72% 1.37% 8.01% 9.01% 8.15%
7.04% 7.50% 7.77% .97% 14.39% 4.12%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 39,800 $ 1,752 $ 15,076 $ 28,428
$ 100,294 $ 111,506 $ 121,418 $ 132,443 $ 162,857 $ 161,045 $ 94,391
Ratio of expenses to average net assets .90% 1.04%* .65% .66% .61%
.62% .65% .63% .59% .58% .69%*
Ratio of expenses to average net assets before voluntary
expense limitation 1.36% 1.06%* .83% .67% .61% .62% .65% .63%
.59% .58% .69%*
Ratio of net investment income to average net assets 4.76% 5.65%* 5.01%
6.05% 6.40% 6.53% 6.45% 6.20% 6.01% 6.29% 6.33%*
Portfolio turnover rate 46% 36% 46% 36% 20% 32% 31% 24% 43% 34%
103%*

* ANNUALIZED.
** INITIAL OFFERING OF CLASS A SHARES, SEPTEMBER 13, 1992.
(dagger) TOTAL RETURN DOES NOT INCLUDE THE ONE TIME SALES CHARGE AND, FOR
PERIODS OF LESS THAN ONE YEAR, IS NOT ANNUALIZED.
(double dagger) TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
(h diamond) EXPENSES WERE LIMITED IN ACCORDANCE WITH A STATE EXPENSE
LIMITATION.
FIDELITY ADVISOR SHORT-INTERMEDIATE TAX-EXEMPT FUND

<TABLE>
<CAPTION>
<S> <C>
March 16, 1994
(commencement
of operations) to

May 31, 1994

(Unaudited)

SELECTED PER-SHARE DATA

Net asset value, beginning of period $ 10.000

Income from Investment Operations
.060
Net interest income

Net realized and unrealized gain (loss) on investments (.040)

Total from investment operations .020

Less Distributions
(.060)
From net interest income

Net asset value, end of period $ 9.960

TOTAL RETURN (dagger)(double dagger) .20%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted) $ 9,222

Ratio of expenses to average net assets .75%*

Ratio of expenses to average net assets before voluntary expense reductions 2.46%*

Ratio of net interest income to average net assets 2.66%*

Portfolio turnover rate 43%*

</TABLE>

* ANNUALIZED
(dagger) TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
(double dagger) THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD THE ADVISOR
NOT REIMBURSED EXPENSES DURING THE PERIOD.

INVESTMENT OBJECTIVES
INTERNATIONAL FUNDS:
FIDELITY ADVISOR OVERSEAS FUND seeks growth of capital primarily through
investments in foreign securities.
FIDELITY ADVISOR EMERGING MARKETS INCOME FUND seeks a high level of
current income by investing primarily in debt securities and other
instruments of issuers in emerging markets. As a secondary objective, the
Fund seeks capital appreciation.
EQUITY FUNDS:
FIDELITY ADVISOR EQUITY PORTFOLIO GROWTH seeks to achieve capital
appreciation by investing primarily in the common and preferred stock and
securities convertible into the common stock, of companies with above
average growth characteristics.
FIDELITY ADVISOR GROWTH OPPORTUNITIES FUND seeks to provide capital growth
by investing primarily in common stocks and securities convertible into
common stocks.
FIDELITY ADVISOR GLOBAL RESOURCES FUND seeks long-term growth of capital
and protection of the purchasing power of shareholders' capital by
investing primarily in securities of foreign and domestic companies that
own or develop natural resources, or that supply goods and services to such
companies, or in physical commodities.
FIDELITY ADVISOR STRATEGIC OPPORTUNITIES FUND seeks capital appreciation by
investing primarily in securities of companies believed by FMR to involve a
"special situation."
FIDELITY ADVISOR EQUITY PORTFOLIO INCOME seeks a yield from dividend and
interest income which exceeds the composite dividend yield on securities
comprising the Standard & Poor's Composite Index of 500 Stocks (S&P
500).
FIDELITY ADVISOR INCOME & GROWTH FUND seeks both income and growth of
capital by investing in a diversified portfolio of equity and fixed-income
securities with income, growth of income and capital appreciation
potential.
FIXED-INCOME FUNDS:
FIDELITY ADVISOR HIGH YIELD FUND seeks a combination of a high level of
income and the potential for capital gains by investing in a diversified
portfolio consisting primarily of high-yielding, fixed-income and zero
coupon securities, such as bonds, debentures and notes, convertible
securities and preferred stocks.
FIDELITY ADVISOR LIMITED TERM BOND FUND seeks to provide a high rate of
income through investment in high and upper-medium grade fixed-income
obligations.
FIDELITY ADVISOR GOVERNMENT INVESTMENT FUND seeks a high level of current
income by investing primarily in obligations issued or guaranteed by the
U.S. government or any of its agencies or instrumentalities.
FIDELITY ADVISOR SHORT FIXED-INCOME FUND seeks to obtain a high level of
current income, consistent with preservation of capital, by investing
primarily in a broad range of investment grade fixed-income securities.

MUNICIPAL/TAX-EXEMPT FUNDS:
FIDELITY ADVISOR HIGH INCOME MUNICIPAL FUND seeks to provide a high current
yield by investing in a diversified portfolio of municipal obligations
whose interest is not included in gross income for purposes of calculating
federal income tax. The Fund reserves the right to invest up to 100% of its
assets in municipal obligations subject to the federal alternative minimum
tax.
FIDELITY ADVISOR LIMITED TERM TAX-EXEMPT FUND seeks the highest level of
income exempt from federal income taxes that can be obtained consistent
with the preservation of capital, from a diversified portfolio of high
quality or upper-medium quality municipal obligations.
FIDELITY ADVISOR SHORT-INTERMEDIATE TAX-EXEMPT FUND seeks as high a level
of current income, exempt from federal income tax, as is consistent with
preservation of capital by focusing on investment-grade municipal
securities.
The investment objective of each Fund is fundamental and can only be
changed by vote of a majority of the outstanding shares of the Fund. Except
as otherwise noted, the investment limitations and policies of Equity
Portfolio Growth, Strategic Opportunities, Income & Growth,
L imited Term Bond, Government Investment, High Income Municipal ,
and Limited Term Tax-Exemp t are fundamental and may not be
changed without shareholder approval. Except for the investment limitations
and policies identified as fundamental, the limitations and policies of
Overseas, E merging Markets Income, Growth Opportunities,
G lobal Resources, Equity Portfolio Income, High Yield, Short
Fixed-Income , and Short-Intermediate Tax-Exempt are not fundamental.
Non-fundamental investment limitations and policies may be changed without
shareholder approval.
The yield, return and potential price changes of each Fund depend on the
quality and maturity of the obligations in its portfolio, as well as on
market conditions. Risks vary based on the type of fund in which you are
investing. As is the case with any investment in securities, investment in
the Funds involve certain risks and , therefore , a Fund may
not always achieve its investment objective.
INVESTMENT POLICIES AND RISKS
Further information relating to the types of securities in which each Fund
may invest and the investment policies of each Fund in general are set
forth in the Appendix to this Prospectus and in each Fund's SAI.
INTERNATIONAL FUNDS: Risks associated with international investing include
currency values, the political and regulatory environment, and overall
economic factors in the countries in which a Fund invests. Investing in an
international fund may be more suitable for aggressive investors who want
to achieve an extra level of diversification in their investment portfolio
by participating in growth opportunities around the world. FMR
determines where an issuer is located by looking at such factors as its
country of organization, the primary trading market for its securities, and
the location of its assets, personnel, sales, and earnings.
FIDELITY ADVISOR OVERSEAS FUND defines foreign securities as securities of
issuers whose principal activities are outside of the United States.
Normally, at least 65% of the Fund's total assets will be invested in
securities of issuers from at least three different countries outside of
North America (the U.S., Canada, Mexico, and Central America). The Fund
expects to invest most of its assets in securities of issuers located in
developed countries in these general geographic areas: The Americas (other
than the U.S.), the Far East and the Pacific Basin, and Western Europe. In
determining whether a company's or organization's principal activities are
in a particular region, FMR will look at such factors as the location of
assets, personnel, sales, and earnings.
FMR expects that opportunities for capital growth will come most often from
common stock and other equity securities, and therefore, expects that
equity securities will account for the majority of the Fund's investments.
However, the Fund also may find opportunities for capital growth from debt
securities of any quality or maturity by reason of anticipated changes in
such factors as interest rates, currency relationships, or the credit
standing of individual issuers. The Fund will not consider dividend income
as a primary factor in choosing securities, unless FMR believes the income
will contribute to the securities' growth potential.
When allocating the investments of the Fund among geographic regions and
individual countries, and among assets denominated in U.S. and foreign
currencies, FMR considers various factors, such as prospects for relative
economic growth among countries, regions or geographic areas; expected
levels of inflation; government policies influencing business conditions;
and the outlook for currency relationships. Although the Fund has the
ability under normal conditions to invest up to 35% of its total assets in
the U.S., FMR currently intends to manage the Fund to be as fully invested
outside the U.S. as is practicable in light of the Fund's cash flow and
cash needs.
The equity securities in which the Fund may invest include common stocks of
companies or closed-end investment companies, securities such as warrants
or rights that are convertible into common stock, preferred stocks, and
depositary receipts for those securities.
The Fund may invest in debt securities of any type of issuer, including
governments and governmental entities (including supranational
organizations such as the World Bank) as well as corporations and other
business organizations. The Fund has no limitation on the quality of debt
securities in which it may invest. The Fund may invest in lower-quality,
high-yielding debt securities sometimes referred to as "junk
bonds"), although it intends to limit its investments in these securities
to 35% of its assets. FMR may invest a portion of the Fund's assets in
high-quality, short-term debt securities, bank deposits and money market
instruments (including repurchase agreements) denominated in U.S. dollars
or foreign currencies. When market conditions warrant, FMR can make
substantial temporary defensive investments in U.S. government securities
or investment-grade obligations of companies incorporated in, and having
principal business activities in, the U.S.
The Fund may also purchase or engage in indexed securities, illiquid
investments, loans and other direct debt instruments, options and futures
contracts, repurchase agreements and securities loans, restricted
securities, and swap agreements.
CONSIDERATIONS IN INVESTING IN SHARES OF OVERSEAS FUND:
Investing outside the U.S. involves different opportunities and different
risks from U.S. investments. FMR believes that it may be possible to obtain
significant returns from a portfolio of foreign investments, or a
combination of foreign investments and U.S. investments, and to achieve
increased diversification in comparison to a portfolio invested solely in
U.S. securities. By including international investments in your investment
portfolio, you may gain increased diversification by combining securities
from various countries and geographic areas that offer different investment
opportunities and are affected by different economic trends. At the same
time, these opportunities and trends involve risks that may not be
encountered with U.S. investments.
International investing in general may involve greater risks than U.S.
investments. There is generally less publicly available information about
foreign issuers, and there may be less government regulation and
supervision of foreign stock exchanges, brokers, and listed companies.
There may be difficulty in enforcing legal rights outside the U.S. Foreign
companies generally are not subject to uniform accounting, auditing, and
financial reporting standards, practices, and requirements comparable to
those that apply to U.S. companies. Security trading practices abroad may
offer less protection to investors such as the Fund. Settlement of
transactions in some foreign markets may be delayed or may be less frequent
than in the U.S., which could affect the liquidity of the Fund.
Additionally, in some foreign countries, there is the possibility of
expropriation or confiscatory taxation; limitations on the removal of
securities, property, or other assets of the Fund; political or social
instability; or diplomatic developments which could affect U.S. investments
in foreign countries. FMR will take these factors into consideration in
managing the Fund's investments.
The Fund may invest a portion of its assets in developing countries, or in
countries with a new or developing capital market. The considerations noted
above are generally intensified for these investments. These countries may
have relatively unstable governments, economies based on only a few
industries, and securities markets that trade a small number of securities.
Securities of issuers located in these countries tend to have volatile
prices and may offer significant potential for loss as well as gain.
EMERGING MARKETS INCOME FUND will, under normal conditions, invest at least
65% of its total assets in debt securities and other instruments of issuers
in emerging markets. For this purpose, "emerging markets" will include any
countries (I) having an "emerging stock market" as defined by the
International Finance Corporation; (II) with low- to middle-income
economies according to the International Bank for Reconstruction and
Development (the World Bank); or (III) listed in World Bank publications as
"developing." Currently, the countries NOT included in these categories are
Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany,
Ireland, Italy, Japan, the Netherlands, New Zealand, Norway, Spain, Sweden,
Switzerland, the United Kingdom, and the U.S. For purposes of this 65%
policy, issuers whose principal activities are in countries with emerging
markets include issuers: (1) organized under the laws of, (2) whose
securities have their primary trading market in, (3) deriving at least 50%
of their revenues or profits from goods sold, investments made, or services
performed in, or (4) having at least 50% of their assets located in, a
country with an emerging market.
The Fund emphasizes countries with relatively low gross national product
per capita compared to the world's major economies, and with the potential
for rapid economic growth. Many investments in emerging markets can be
considered speculative, and therefore may offer higher income potential
than the developed markets of the world. Investments in emerging markets
can involve significant risks and the Fund is designed for aggressive
investors.
Under current market conditions, FMR expects that emerging market
opportunities will be found mainly within Latin America, and to a lesser
extent in Africa, Asia and emerging European nations. FMR will actively
manage the allocation of the Fund's investments among countries, geographic
regions, and currency denominations in an attempt to achieve current income
and capital appreciation. In doing so, FMR will also consider such factors
as prospects for relative economic growth among countries, regions, or
geographic areas, expected levels of inflation, government policies
influencing business conditions, current and anticipated interest rates,
and the outlook for currency relationships. Although the Fund will normally
invest in at least three different countries, it is not limited to any
particular country or currency, and may invest substantially all of its
assets in any one country.
The Fund may invest in all types of fixed-income instruments, including
corporate debt securities, sovereign debt instruments issued by governments
or governmental entities, and all types of domestic and foreign money
market instruments. The Fund may invest in lower- quality ,
high-yielding U.S. corporate debt securities (sometimes referred to as
"junk bonds"). Many emerging market securities are of
below-investment-grade quality, and at any one time substantially all of
the Fund's assets may be invested in securities that are of poor quality or
are in default. Lower-quality debt securities are those rated below Baa
by Moody's or BBB by S&P.
Other investments the Fund may make or engage in include options and
futures contracts, swap agreements, indexed securities, loans and other
direct debt instruments, repurchase agreements and securities loans,
foreign repurchase agreements, illiquid investments, restricted securities,
mortgage-backed securities, asset-backed securities,
delayed-delivery transactions, and interfund borrowing. The Fund may also
invest a portion of its assets in common and preferred stocks of emerging
market issuers, debt securities of non-emerging market foreign issuers, and
lower-quality debt securities of U.S. issuers. Although the Fund may invest
up to 35% of its total assets in these securities, FMR does not currently
anticipate that these investments will exceed approximately 20% of the
Fund's total assets. Though these types of investments present the
possibility for significant capital appreciation over the long-term, they
may fluctuate dramatically in the short term and entail a high degree of
risk.
For cash management purposes, the Fund will ordinarily invest a portion of
its assets in high-quality, short-term debt securities and money market
instruments, including repurchase agreements and bank deposits denominated
in U.S. or foreign currencies. When, in FMR's judgment, market conditions
warrant, the Fund can make substantial temporary defensive investments in
money market instruments, U.S. government securities, or investment-grade
obligations of U.S. companies.
CONSIDERATIONS OF INVESTING IN THE SHARES OF EMERGING MARKETS INCOME FUND:
International investing in general may involve greater risks than U.S.
investments. There is generally less publicly available information about
foreign issuers, and there may be less government regulation and
supervision of foreign stock exchanges, brokers, and listed companies.
There may be difficulty in enforcing legal rights outside the U.S. Foreign
companies generally are not subject to uniform accounting, auditing, and
financial reporting standards, practices, and requirements comparable to
those that apply to U.S. companies. Security trading practices abroad may
offer less protection to investors such as the Fund. Settlement of
transactions in some foreign markets may be delayed or may be less frequent
than in the U.S., which could affect the liquidity of the Fund.
Additionally, in some foreign countries, there is the possibility of
expropriation or confiscatory taxation; limitations on the removal of
securities, property, or other assets of the Fund; political or social
instability; or diplomatic developments which could affect U.S. investments
in foreign countries. FMR will take these factors into consideration in
managing the Fund's investments.
These risks may be intensified in the case of investments in emerging
markets or countries with limited or developing capital markets. Security
prices in emerging markets can be significantly more volatile than in more
developed nations, reflecting the greater uncertainties of investing in
less established markets and economies. In particular, countries with
emerging markets may have relatively unstable governments; present the risk
of nationalization of businesses, restrictions on foreign ownership, or
prohibitions of repatriation of assets; and may have less protection of
property rights than more developed countries. The economies of countries
with emerging markets may be predominantly based on only a few industries,
may be highly vulnerable to changes in local or global trade conditions,
and may suffer from extreme and volatile debt burdens or inflation rates.
Local securities markets may trade a small number of securities and may be
unable to respond effectively to increases in trading volume, potentially
making prompt liquidation of substantial holdings difficult or impossible
at times. Securities of issuers located in countries with emerging markets
may have limited marketability and may be subject to more abrupt or erratic
price movements.
By itself, the Fund does not constitute a balanced investment plan. The
Fund is designed for aggressive investors interested in the investment
opportunities and income potential offered by securities issued in emerging
markets. The value of the Fund's investments and the income they generate
will vary from day to day, generally reflecting changes in interest rates,
market conditions, and other political and economic news. The Fund's
performance will also depend on currency values, foreign economies, and
other factors relating to foreign investments. Because the Fund focuses on
emerging markets, it involves higher risks than U.S. bond investments.
Investors should be willing to assume a greater degree of investment risk
and should expect a higher level of volatility than is generally associated
with investing in more established markets. The Fund's yield and share
price will change based on changes in foreign interest rates, the value of
foreign currencies, and issuers' creditworthiness. In general, bond prices
rise when interest rates fall, and vice versa. The Fund's share price,
yield, and total return fluctuate, and your investment may be worth more or
less than your original cost when you redeem your shares.
The Fund is non-diversified, which means that it may invest a greater
portion of its assets in securities of a single issuer than would be the
case if it were diversified. As a result, changes in the financial
condition or market assessment of a single issuer could cause greater
fluctuation in the Fund's share value.
EQUITY FUNDS. Equity funds invest in common stock and other equity
securities in search of growth or a combination of growth and income. The
share value of equity funds depends heavily on stock market
conditions in the U.S. and abroad, and can also be affected by changes in
interest rates or other economic conditions. Investments in equity Funds
are more suitable for investors who take a long-term approach to investing.
FIDELITY ADVISOR EQUITY PORTFOLIO GROWTH as a general rule, will invest in
the securities of companies whose growth in the areas of earnings or gross
sales measured either in dollars or in unit volume (either on an absolute
or percentage basis) may exceed that of the average of the companies whose
securities are included in the S&P 500. These securities generally
command high multiples (price/earnings ratios) in the stock markets over
time. Above average growth characteristics are most often associated with
companies in new and emerging areas of the economy but occasionally can be
found in the stronger companies of more mature and even declining
industries. The Fund will, therefore, be invested in the securities of
smaller, less well-known companies except when FMR believes that
opportunities for above-average growth are presented by larger, more mature
companies which have undergone reformation and revitalization or possess a
strong position in relation to the market as a whole.
The market price of securities with above average growth characteristics
often can experience a more sudden and more dramatic downward reaction to
negative news than is the case with securities carrying a lower market
multiple. This can be particularly true for companies with a narrow product
line or whose securities are relatively thinly traded,
characteristics which are common to smaller, less well-known companies.
As a non-fundamental policy, at least 65% of the total assets of the Fund
normally will be invested in common and preferred stock. The balance of
the fund will tend to be invested in debt obligations, a high
percentage of which are expected to be convertible into common stocks.
As a non-fundamental policy t he Fund may invest in lower-quality,
high yielding debt securities (sometimes referred to as "junk bonds "),
although it currently intends to limit its investments in these
securities to 35% of its assets. The Fund also may purchase or engage in
foreign investments, indexed securities, illiquid investments, loans and
other direct debt instruments, options and futures contracts, repurchase
agreements and securities loans, restricted securities, swap agreements,
and warrants.
FIDELITY ADVISOR GROWTH OPPORTUNITIES FUND. Under normal circumstances, at
least 65% of the Fund's total assets will be invested in securities of
companies that FMR believes have long-term growth potential. Growth can be
considered either appreciation of the security itself or growth of the
company's earnings or gross sales. Accordingly, these securities will often
pay little, if any, income, which will be entirely incidental to the
objective of capital growth.
The Fund also has the ability to purchase other securities, such as
preferred stock and bonds that may produce capital growth. Securities may
be of all types or quality. The Fund may invest in lower-quality,
high-yielding debt securities (sometimes referred to as "junk bonds"),
although it intends to limit its investments in these securities to
35% of its assets.
The Fund may purchase foreign investments of all types without limitation
and may enter into foreign forward currency exchange contracts. T he
Fund may purchase or engage in indexed securities, illiquid investments,
loans and other direct debt instruments, options and futures contracts,
repurchase agreements and securities loans, restricted securities, reverse
repurchase agreements, swap agreements, and warrants.
The Fund may make substantial temporary investments in high-quality debt
securities and money market instruments, including commercial paper,
obligations of banks or the U.S. government and repurchase agreements for
defensive purposes when, in FMR's judgment, economic or market conditions
warrant.
FIDELITY ADVISOR GLOBAL RESOURCES FUND. Under normal circumstances, the
Fund will invest at least 65% of its total assets in securities of foreign
and domestic companies that own or develop natural resources, or supply
goods and services to such companies, or in physical commodities. The
remainder of the Fund may be invested in other investments including debt
securities of any kind including asset-backed securities, obligations of
foreign governments or their political subdivisions, foreign companies and
supranational organizations, and common and preferred stocks of
corporations not necessarily engaged in natural resources. FMR will seek
securities that are priced relative to the intrinsic value of the relevant
natural resource or that are issued by companies which are positioned to
benefit during particular portions of the economic cycle. Accordingly, the
Fund may shift its emphasis from one natural resource industry to another
depending upon prevailing trends or developments. For example, when FMR
anticipates significant economic, political or financial pressures or major
dislocations in the foreign currency exchange markets, the Fund may, in
seeking to protect the purchasing power of shareholders' capital, invest a
substantial portion of its assets in companies that explore for, extract,
process, or deal in precious metals, and/or invest in precious metals
themselves. The Fund expects to invest a majority of its assets to be
invested in securities of companies that have their principal business
activities in at least three different countries (including the U.S.).
A company will be deemed to have substantial ownership of, or activities
in, natural resources if, at the time of the Fund's acquisition of its
securities, at least 50% of the company's assets are involved in, either
directly or through subsidiaries, exploring, mining, refining, processing,
transporting, fabricating, dealing in, or owning natural resources. Natural
resources include precious metals (such as gold, palladium, platinum and
silver), ferrous and nonferrous metals (such as iron, aluminum and copper),
strategic metals (such as uranium and titanium), hydrocarbons (such as
coal, oil and natural gases), chemicals, forest products, real estate, food
products and other basic commodities which, historically, have been
produced and marketed profitably during periods of rising inflation.
The Fund may purchase foreign securities of all types without limitation
and may enter into forward foreign currency exchange contracts for the
purpose of managing exchange rate risks. The Fund may invest in
lower-quality, high-yielding debt securities ( sometimes referred to
as "junk bonds''), rated as low as CCC by Standard & Poor's Corporation
(S&P) or Caa by Moody's Investors Service, Inc. (Moody's). The Fund
does not currently intend to invest more than 35% of its net assets in debt
securities rated below BBB or Baa. Debt securities ordinarily will make up
a relatively small portion of the Fund's assets.
The Fund may purchase ADRs and EDRs. The Fund may purchase indexed
securities, illiquid investments, loans and other direct debt instruments,
options and futures contracts, repurchase agreements and securities loans,
restricted securities, and warrants. The Fund may also purchase securities
on a delayed-delivery basis.
As a fundamental policy, the Fund is authorized to invest up to 50% of its
assets in physical commodities. In order to permit the sale of the Fund's
shares in certain states, the Fund has adopted a non-fundamental policy of
limiting investments in physical commodities to precious metals (i.e.,
gold, palladium, platinum and silver) to 25% of the Fund's total assets.
Investments in other types of physical commodities could present concerns,
including practical problems of delivery, storage and maintenance, possible
illiquidity, the unavailability of accurate market valuations and increased
expenses. When a precious metal is purchased, FMR currently intends that it
will be only in a form that is readily marketable and that it will be
delivered to and stored with a qualified U.S. bank. Investments in bullion
earn no investment income and may involve higher custody and transaction
costs than investments in securities. The Fund may receive no more than 10%
of its yearly income from gains resulting from selling metals or any other
physical commodity. The Fund may be required, therefore, either to hold its
metals or sell them at a loss, or to sell its portfolio securities at a
gain, when it would not otherwise do so for investment reasons. Precious
metals, at times, have been subject to substantial price fluctuations over
short periods of time and may be affected by unpredictable international
monetary and political policies such as currency devaluations or
revaluations, economic and social conditions within a country, trade
imbalances, or trade or currency restrictions between countries.
Since the Fund may invest in physical commodities and utilize investment
techniques which are subject to market fluctuations and/or foreign market
risk, an investment in the Fund may be considered more speculative than an
investment in other funds that seek capital growth. The value of equity
securities of natural resource companies will fluctuate pursuant to market
conditions generally, as well as the market for the particular natural
resource in which the issuer is involved. In addition, the values of
natural resources are subject to numerous factors, including nature and
international politics.
During periods when, in FMR's opinion, a temporary defensive posture in the
market is appropriate, the Fund may invest without limitation in cash or
high-quality money market instruments including, but not limited to,
certificates of deposit, commercial paper and obligations issued by the
U.S. government or any of its agencies or instrumentalities.
FIDELITY ADVISOR STRATEGIC OPPORTUNITIES FUND. As a non-fundamental policy,
the Fund normally will invest at least 65% of its assets in companies
involving a "special situation." The term "special situation" refers to
FMR's identification of an unusual, and possibly non-repetitive,
development taking place in a company or a group of companies in an
industry. A special situation may involve one or more of the following
characteristics:
(bullet) A technological advance or discovery, the offering of a new or
unique product or service, or changes in consumer demand or consumption
forecasts.
(bullet) Changes in the competitive outlook or growth potential of an
industry or a company within an industry, including changes in the scope or
nature of foreign competition or the development of an emerging industry.
(bullet) New or changed management, or material changes in management
policies or corporate structure.
(bullet) Significant economic or political occurrences abroad, including
changes in foreign or domestic import and tax laws or other regulations.
(bullet) Other events, including natural disasters, favorable litigation
settlements, or a major change in demographic patterns.
In seeking capital appreciation, the Fund also may invest in securities of
companies not involving a special situation, but which are companies with
valuable fixed assets and whose securities are believed by FMR to be
undervalued in relation to the companies' assets, earnings, or growth
potential.
FMR intends to invest primarily in common stocks and securities that are
convertible into common stocks; however, it also may invest in debt
securities of all types and quality if FMR believes that investing in these
securities will result in capital appreciation. As a non-fundamental
investment policy, the Fund may invest in lower-quality, high-yielding debt
securities ( sometimes referred to as "junk bonds") , although
it intends to limit its investments in these securities to 35% of its
assets. The Fund also may invest in unrated securities. The Fund may invest
up to 30% of its assets in foreign investments of all types and may enter
into forward foreign currency exchange contracts for the purpose of
managing exchange rate risks. The Fund may purchase or engage in indexed
securities, illiquid instruments, loans and other direct debt instruments,
options and futures contracts, repurchase agreements and securities loans,
restricted securities, swap agreements, warrants, and zero coupon bonds.
The Fund expects to be fully invested under most market conditions. The
Fund may make substantial temporary investments in high-quality debt
securities for defensive purposes when, in FMR's judgment, a more
conservative approach to investment is desirable.
An investment in the Fund may be considered more speculative than an
investment in other funds that seek capital appreciation. There are greater
risks involved in investing in securities of smaller companies rather than
companies operating according to established patterns and having longer
operating histories. The Fund may invest in securities in which other
investors have not shown significant interest or confidence, and which are
more sensitive to stock market fluctuations. Larger well-established
companies experiencing a special situation may involve, to a certain
extent, breaks with past experience, which may pose greater risks. There
are also greater risks involved in investing in securities of companies
that are not currently favored by the public but show potential for capital
appreciation.
FIDELITY ADVISOR EQUITY PORTFOLIO INCOME. It is the policy of the Fund that
at least 65% of its total assets normally will be invested in
income-producing equity securities. For purposes of this policy, equity
securities are defined as common stocks and preferred stocks.
The balance of the Fund will tend to be invested in debt obligations, a
high percentage of which are expected to be convertible into common stocks.
As a non-fundamental policy, the Fund may invest in lower-quality
high-yielding debt securities ( sometimes referred to as "junk
bonds"), although it currently intends to limit its investments in these
securities to 35% of its assets. H owever, the Fund does not
int end to invest in securities of issuers without proven
earnings a nd/or credit histories. T he Fund may purchase or
engage in foreign investments, indexed securities, illiquid investments,
loans and other direct debt instruments, futures and options, repurchase
agreements and securities loans, restricted securities, short sales, swap
agreements, and warrants.
Because of the income considerations, investors should not expect capital
appreciation comparable to the appreciation which could be achieved by
funds whose primary objective is capital appreciation. While the investment
portfolio will not mirror the stocks in the S&P 500 , the yield
on the overall investment portfolio generally will increase or decrease
from year to year in accordance with market conditions and in relation to
the changes in yields of the stocks included in the S&P 500.
The Fund may make temporary investments in securities such as
investment-grade bonds or short-term notes for defensive purposes.
FIDELITY ADVISOR INCOME & GROWTH FUND. I n vests in equity
securities, convertible securities, preferred and common stocks paying any
combination of dividends and capital gains and in fixed-income securities.
The Fund also may buy securities that are not providing dividends but offer
prospects for growth of capital or future income. The proportion of the
Fund's assets invested in each type of security will vary from time to time
in accordance with FMR's assessment of economic conditions.
In selecting securities for the Fund, FMR will consider such factors as the
company's financial strength, its outlook for increased dividend or
interest payments (defined herein as "growth of income") and capital gains.
In addition, industry factors and overall economic conditions may be
considered. The Fund may invest in equity securities of some smaller, more
rapidly growing companies. Investing in smaller, less well-known companies,
especially those that have a narrow product line or are thinly traded,
often involves greater risk than investing in established companies with
proven track records. In selecting fixed-income securities for the Fund
(such as bonds, notes, mortgage securities, convertible securities, and
short-term obligations such as bankers' acceptances, certificates of
deposit, and commercial paper), FMR will consider several factors,
including maturity, quality and expected yield.
The Fund may invest in lower-quality high-yielding debt securities
( sometimes referred to as "junk bonds"). The Fund currently intends
to limit its investments in these securities to 35% of its assets. The Fund
also may invest in or engage in foreign investments, currency exchange
contracts, indexed securities, illiquid instruments, loans and other direct
debt instruments, options and futures contracts, repurchase agreements and
securities loans, restricted securities, swap agreements, warrants, and
zero coupon bonds. The Fund may, for temporary defensive purposes, invest
without limit in short-term securities.
FIXED-INCOME FUNDS. Fixed-Income Funds invest primarily in debt securities
(e.g., bonds, debentures, notes and similar obligations). The share value
of fixed-income funds tends to move inversely with changes in prevailing
interest rates. Shorter-term bonds are less sensitive to interest rate
changes, but longer-term bonds generally offer higher yields. It also is
important to note that high-yielding, lower-quality bonds involve greater
risks, because there is a greater possibility of a financial reversal
affecting the issuer's ability to pay interest and principal on time. Share
value and yield are not guaranteed and will fluctuate based on credit
quality and changes in interest rates.
FMR will use its extensive research facilities in addition to considering
the ratings of Nationally Recognized Statistical Rating Organizations
(NRSROs) in selecting investments for the Funds. Unrated securities are not
necessarily of lower quality than rated securities, but they may not be
attractive to as many buyers. This credit analysis includes consideration
of the economic feasibility, the financial condition of the issuer with
respect to liquidity, cash flow and political developments that may affect
credit quality. Since the risk of default is higher for lower-quality
obligations, FMR's research and analysis are an integral part of choosing a
Fund's securities. Through portfolio diversification and careful credit
analysis, FMR can reduce risk, although there can be no assurance that
losses will not occur. FMR also considers trends in the economy, in
geographic areas, in various industries, and in the financial markets.
FIDELITY ADVISOR HIGH YIELD FUND. As a non-fundamental policy, the Fund
normally will invest at least 65% of its total assets in high-yielding,
income producing debt securities and preferred stocks, including
convertible and zero coupon bonds. The Fund may invest all or a
substantial portion of its assets in lower-quality debt securities
(sometimes referred to as "junk bonds"). Please refer to "Risks of
Lower-Quality Taxable Debt Securities, page ." In addition, the Fund
also may invest in government securities, securities of any state or any of
its subdivisions, agencies or instrumentalities, and securities of foreign
issuers, including securities of foreign governments. The Fund may invest
up to 35% of its assets in equity securities, including common stocks,
warrants and rights.
Debt instruments include securities such as bonds, notes, convertible
bonds, and mortgage-backed or asset-backed securities; commercial paper and
other money market instruments, including repurchase agreements; and loans,
trade claims, and similar instruments representing indebtedness of a
corporate borrower. These instruments may provide for interest payments in
cash or in kind, may pay no interest, or may be in default, and may have
warrants attached or otherwise include rights to purchase common stocks.
The Fund may purchase debt instruments in public offerings or through
private placements. The Fund has no specific limitations on the maturity or
credit ratings of the debt instruments in which it invests.
The Fund may enter into forward currency contracts and may purchase
or engage in foreign investments, indexed securities, illiquid investments,
loans and other direct debt instruments, options and futures contracts,
repurchase agreements and securities loans, restricted securities, reverse
repurchase agreements, and swap agreements.
RISKS OF LOWER-QUALITY TAXABLE DEBT SECURITIES :
Lower-quality debt securities usually are defined as securities rated Ba or
lower by Moody's or BB or lower by S&P. Lower- quality debt
securities are considered speculative and involve greater risk of loss than
higher- quality debt securities, and are more sensitive to changes in
the issuer's capacity to pay. This is an aggressive approach to income
investing.
The 1980s saw a dramatic increase in the use of lower- quality debt
securities to finance highly leveraged corporate acquisitions and
restructurings. Past experience may not provide an accurate indication of
the future performance of lower- quality debt securities, especially
during periods of economic recession. In fact, from 1989 to 1991, the
percentage of lower- quality debt securities that defaulted rose
significantly above prior levels, although the default rate decreased in
1992 and 1993 .
Lower- quality debt securities may be thinly traded, which can
adversely affect the prices at which these securities can be sold and can
result in high transaction costs. If market quotations are not available,
lower- quality debt securities will be valued in accordance with
standards set by the Boards of Trustees, including the use of outside
pricing services. Judgment plays a greater role in valuing
lower- quality debt securities than securities for which more
extensive quotations and last sale information are available. Adverse
publicity and changing investor perceptions may affect the ability of
outside pricing services to value lower- quality debt securities, and
the Fund's ability to dispose of these securities.
The market prices of lower- quality debt securities may decline
significantly in periods of general economic difficulty, which may follow
periods of rising interest rates. During an economic downturn or a
prolonged period of rising interest rates, the ability of issuers of
lower- quality debt to service their payment obligations, meet
projected goals, or obtain additional financing may be impaired.
The Fund may choose, at its own expense or in conjunction with others, to
pursue litigation or otherwise to exercise its rights as a security holder
to seek to protect the interests of security holders if it determines this
to be in the interest of Fund shareholders.
The considerations discussed above for lower- quality debt securities
also apply to lower-quality, unrated debt instruments of all types,
including loans and other direct indebtedness of businesses with poor
credit standing. Unrated debt instruments are not necessarily of
lower-quality than rated securities, but they may not be attractive to as
many buyers. The Fund relies more on FMR's credit analysis when investing
in debt instruments that are unrated. Please refer to page for a
discussion of Moody's and S&P ratings.
FIDELITY ADVISOR LIMITED TERM BOND FUND. Under no rmal
circums ta nces the Fund will invest in fixed-income securities
as follows:
(I) Corporate obligations which are rated AAA, AA, or A by S&P, or Aaa,
Aa, or A by Moody's;
(II) Obligations issued or guaranteed as to interest and principal by the
government of the U.S., or any agency or instrumentality thereof;
(III) Obligations (including certificates of deposit and bankers'
acceptances) of U.S. banks which at the date of investment have capital
gains, surplus, and undivided profits (as of the date of their most
recently published annual financial statements) in excess of $100,000,000;
(IV) Commercial paper which at the date of investment is rated A-1 or A-2
by S&P or Prime-1 or Prime-2 by Moody's or, if not rated, is issued by
companies which at the date of investment have an outstanding debt issue
rated AAA, AA, or A by S&P or Aaa, Aa, or A by Moody's; and
(V) Such other fixed-income instruments as the Board of Trustees, in its
judgment, deems to be of comparable quality to those enumerated above.
The Fund also may invest in unrated instruments, and may at times purchase
instruments rated below A if FMR judges them to be of comparable quality to
those rated A or better. Currently, the Fund does not intend to invest in
debt obligations rated below Baa/BBB. Instruments in which the Fund may
invest include asset-backed securities, collateralized mortgage
obligations, convertible securities, loans and other direct debt
instruments, mortgage-backed securities, and zero coupon bonds. For
purposes of the Fund's investment policies, those instruments described in
this paragraph and in (i) through (v) above are considered "bonds."
FMR's standards for determining high- and upper-medium grades are
essentially the same as those described by S&P and Moody's as
characteristic of their ratings of A and above. Such instruments have
strong protection of principal and interest payments. In addition to
reliance on S&P's or Moody's ratings, FMR also performs its own credit
analysis. Investment-grade bonds are generally of medium to high quality.
Those rated in the lower end of the category (Baa/BBB), however, may
possess speculative characteristics and may be more sensitive to economic
changes and changes in the financial condition of issuers.
In addition, the Fund may seek capital appreciation when consistent with
its primary objective. In seeking capital appreciation, FMR will select
securities for the Fund based on its judgment as to economic and market
conditions and the prospects for interest rate changes.
The Fund may purchase or engage in foreign investments, indexed securities,
illiquid investments, options and futures contracts, repurchase
agreements and securities loans, restricted securities, and swap
agreements. The Fund also may engage in reverse repurchase agreements for
temporary or emergency purposes and not for investment purposes.
The Fund will maintain a dollar-weighted average maturity of 10 years or
less. B ased on FMR's assessment of interest rate trends, generally,
the average maturity will be shortened when interest rates are expected to
rise and lengthened up to 10 years when interest rates are expected to
decline.
FIDELITY ADVISOR GOVERNMENT INVESTMENT FUND. Under normal circumstances, as
a non-fundamental policy at least 65% of the Fund's total assets
will be invested in government securities.
The Fund invests primarily in obligations issued or guaranteed by the U.S.
government or any of its agencies or instrumentalities (U.S. government
securities), including U.S. Treasury bonds, notes and bills, Government
National Mortgage Association mortgage-backed pass-through certificates
(Ginnie Maes) and mortgage-backed securities issued by the Federal National
Mortgage Association (Fannie Maes) or the Federal Home Loan Mortgage
Corporation (Freddie Macs). The U.S. government securities the Fund invests
in may or may not be fully backed by the U.S. government. The Fund may
enter into repurchase agreements involving any securities in which it may
invest and also may enter into reverse repurchase agreements. The Fund
considers "government securities" to include U.S. government securities
subject to repurchase agreements. The Fund is not restricted as to the
percentage of its assets that may be invested in any one type of U.S.
government security. The Fund may for temporary defensive purposes invest
without limit in U.S. government securities having a maturity of 365 days
or less. The Fund may invest in delayed-delivery transactions, options and
futures contracts, indexed securities, swap agreements and zero coupon
bonds. In seeking current income, the Fund also may consider the potential
for capital gain.
FIDELITY ADVISOR SHORT FIXED-INCOME FUND. Under normal conditions, at least
65% of the Fund's total assets will be invested in fixed-income securities.
Where consistent with its investment objective, the Fund will take
advantage of opportunities to realize capital appreciation.
The Fund normally will invest primarily in investment-grade fixed-income
securities of all types. Investment-grade fixed-income securities are
considered to be securities rated Baa or higher by Moody's or BBB or higher
by S&P, and unrated securities that are of equivalent quality in FMR's
opinion. The Fund may invest in lower-quality, high-yielding securities
( sometimes referred to as "junk bonds"), as long as they are
consistent with the Fund's objective of obtaining a high level of current
income consistent with the preservation of capital. The Fund currently
intends to limit its investments in these securities to 35% of its assets.
As a non-fundamental policy, the Fund does not currently expect to invest
in securities rated lower than B by S&P or Moody's.
Fixed-income securities may include, in any proportion, bonds, notes, U.S.
government and government agency obligations, mortgage-related and
asset-backed securities, zero coupon securities, foreign securities,
indexed securities and convertible securities, and short-term obligations
such as certificates of deposit, repurchase agreements, bankers'
acceptances and commercial paper. The Fund also may purchase or engage in
illiquid investments, loans and other direct debt instruments, options and
futures contracts, restricted securities, and swap agreements.
In making investment decisions for the Fund, FMR will consider many factors
other than current yield, including the preservation of capital, the
potential for realizing capital appreciation, maturity and yield to
maturity. FMR will adjust the Fund's investments in particular securities
or in types of debt securities in response to its appraisal of changing
economic conditions and trends. FMR may sell securities in anticipation of
a market decline or purchase securities in anticipation of a market rise.
In addition, FMR may sell one security and purchase another security of
comparable quality and maturity to take advantage of what FMR believes to
be short-term differentials in market values or yield disparities. The Fund
may invest a portion of its assets in securities issued by foreign
companies and foreign governments, which may be less liquid or more
volatile than domestic investments. The Fund's investments, other than
those backed by the U.S. government, are subject to the ability of the
issuer to make payment at maturity.
The Fund will maintain a dollar-weighted maturity of three years or less.
The Fund may hold individual securities with remaining maturities of more
than three years, as long as the Fund's average maturity is three years or
less.
MUNICIPAL/TAX-EXEMPT FUNDS. Tax-Exempt Funds invest primarily in municipal
securities which are issued by state and local governments and their
agencies to raise money for various public purposes, including general
purpose financing for state and local governments as well as financing for
specific projects or public facilities. Municipal securities may be backed
by the full taxing power of a municipality or by the revenues from a
specific project or the credit of a private organization. Some municipal
securities are insured by private insurance companies, while others may be
supported by letters of credit furnished by domestic or foreign banks. FMR
monitors the financial condition of parties (including insurance companies,
banks, and corporations) whose creditworthiness is relied upon in
determining the credit quality of securities the Funds may purchase.
Yields on municipal bonds, and therefore the yield of High Income
Municipal , Limited Term Tax-Exempt and Short-Intermediate
Tax-Exempt depend on factors such as general market conditions,
interest rates, the size of a particular offering, the maturities of the
obligations and the quality of the issues. The ability of the Funds to
achieve their investment objectives is also dependent on the continuing
ability of the issuers of the municipal obligations in which the Funds
invest to meet their obligations for the payment of interest and principal
when due.
Bonds generally are considered to be interest rate sensitive, which means
that their values move inversely to interest rates. Long-term municipal
bonds generally are more exposed to market fluctuations resulting from
changes in interest rates than are short-term municipal bonds.
While the market for municipals is considered to be substantial, adverse
publicity and changing investor perceptions may affect the ability of
outside pricing services used by a Fund to value its portfolio securities
and the Fund's ability to dispose of lower- quality bonds. The
outside pricing services are consistently monitored to assure that
securities are valued by a method that the Boards believe accurately
reflects fair value. The impact of changing investor perceptions may be
especially pronounced in markets where municipal securities are thinly
traded.
The Funds' investments in municipal securities may include fixed, variable,
or floating rate general obligation and revenue bonds (including municipal
lease obligations and resource recovery bonds); zero coupon and
asset-backed securities; inverse floaters; tax, revenue, or bond
anticipation notes; and tax-exempt commercial paper. The Funds may buy or
sell securities on a when-issued or delayed-delivery basis (including
refunding contracts), and may purchase restricted and illiquid
securities. The Funds may also buy and sell options and futures contracts.
Municipal obligations, including industrial development revenue bonds, are
issued by or on behalf of states, territories, and possessions of the U.S.
and the District of Columbia and their political subdivisions, agencies,
and instrumentalities.
Each Fund may invest more than 25% of its total assets in securities
whose revenue sources are from similar types of projects (e.g., education,
electric utilities, health care, housing, transportation, or water, sewer
and gas utilities) or whose issuers share the same geographic location.
As a result, a fund may be more susceptible to economic, business
or political development s than would a portfolio of bonds
with a greater variety of issuers. These developments include proposed
legislation or pending court decisions affecting the financing of such
projects and market factors affecting the demand for their services or
products.
FIDELITY ADVISOR HIGH INCOME MUNICIPAL FUND. Interest from all or a portion
of the Fund's municipal bonds may be a "tax preference" item for some
shareholders in determining their federal alternative minimum tax.
Stability and growth of principal also will be considered when choosing
securities.
Interest on some "private activity" municipal obligations is subject to the
federal alternative minimum tax AMT bonds. AMT bonds are municipal
obligations that benefit a private or industrial user or finance a private
facility. The Fund reserves the right to invest up to 100% of its assets in
AMT bonds.
The Fund may invest in municipal obligations which are rated in the medium
and lower quality categories of NRSROs (such as obligations rated
Caa by Moody's or CCC by S&P) or which are unrated, but judged by FMR,
pursuant to procedures established by the Board of Trustees, to meet the
quality standards of the Fund. Municipal obligations which are in the
medium and lower rating categories or which are unrated generally offer a
higher current yield than those offered by municipal obligations which are
in the higher rating categories. Since available yields and the yield
differential between higher and lower- quality obligations vary over
time, no specific level of income or yield differential can be assured.
Lower- quality bonds (those rated Ba/BB or lower) involve greater
risk, including risk of default.
The Fund also may purchase tax-exempt instruments that become available in
the future as long as FMR believes that their quality is equivalent to
those rated Caa or CCC or better by Moody's or S&P, respectively.
The Fund's yield depends in part on the quality of its investments.
Obligations rated investment grade or better (Baa/BBB or higher) generally
are of medium to high quality. These securities typically have moderate to
poor protection of principal and interest payments and have speculative
characteristics.
Unrated obligations may be either investment grade or lower quality, but
usually are not attractive to as many buyers. The Fund relies heavily on
FMR's credit analysis when purchasing unrated or lower- quality
bonds.
While lower- quality bonds traditionally have been less sensitive to
interest rate changes than higher- quality investments, as with all
bonds, the prices of lower- quality bonds will be affected by
interest rate changes. Economic changes may affect lower- quality
securities differently than other securities. Lower- quality
municipal bonds may be more sensitive to adverse economic changes
(including recession) in specific regions or localities or among specific
types of issuers. During an economic downturn or a prolonged period of
rising interest rates, issuers of lower- quality debt may have
problems servicing their debt, meeting projected revenue goals, or
obtaining additional financing. Periods of economic uncertainty and
interest rate changes may cause market price volatility for
lower- quality bonds and corresponding volatility in the Fund's share
price.
During periods when, in FMR's opinion, a temporary defensive posture in the
market is appropriate, the Fund may invest without limitation in cash or in
obligations whose interest payments may be federally taxable. Taxable
obligations include, but are not limited to, certificates of deposit,
commercial paper, obligations issued by the U.S. government or any of its
agencies or instrumentalities, and repurchase agreements.
The Fund may purchase long-term municipals with maturities of 20 years or
more, which generally produce higher yields than short-term municipals. The
Fund also may purchase short-term municipal obligations in order to provide
for short-term capital needs. The average maturity of the Fund is currently
expected to be greater than 20 years. Since the Fund's objective is to
provide a high current yield, the Fund will purchase municipals with an
emphasis on income. FMR may vary the Fund's average maturity depending on
anticipated market conditions. Generally, the average maturity will be
shortened when interest rates are expected to rise and lengthened when
rates are expected to decline.
FIDELITY ADVISOR LIMITED TERM TAX-EXEMPT FUND. Under normal conditions, at
least 80% of the Fund's annual income will be exempt from federal income
taxes and at least 80% of the Fund's net assets will be invested in
obligations having remaining maturities of 15 years or less. The Fund will
maintain a dollar-weighted average maturity of 10 years or less.
The Fund will invest in municipal obligations which, in the judgment of
FMR, are high quality or at least upper-medium quality. The Fund's
standards for high quality and upper-medium quality obligations are
essentially the same as those described by Moody's in rating municipal
obligations within its three highest ratings of Aaa, Aa, and A and as those
described by S&P in rating such obligations within its three highest
ratings of AAA, AA and A. As a non-fundamental policy, the Fund will not
purchase a security rated by Moody's or S&P unless it has received at
least an A rating from either rating service.
The Fund m a y invest up to 20% of its total assets in municipal
obligations which are unrated by Moody's or S&P if, in the judgment of
FMR, such municipal obligations meet the standards of quality as set forth
above. Unrated bonds are not necessarily of lower quality and may have
higher yields than rated bonds, but the market for rated bonds is usually
broader.
The Fund may invest up to 25% of its total assets in a single issuer's
securities.
The Fund currently does not intend to invest in taxable obligations;
however, consistent with that portion of its investment objective concerned
with the preservation of capital, from time to time the Fund may invest a
portion (normally not to exceed 20%) of its net assets on a temporary basis
in fixed-income obligations whose interest is subject to federal income
tax. These taxable obligations may include repurchase agreements. The Fund
does not currently intend to invest in AMT bonds.
FIDELITY ADVISOR SHORT - INTERMEDIATE TAX-EXEMPT . Under
normal conditions, the Fund will invest so that 80% or more of its net
assets will be invested in securities whose interest is exempt from federal
income tax. The Fund maintains the ability under normal circumstances, to
invest up to 20% of its net assets in municipal securities issued to
finance private activities whose interest is a tax-preference item for
purposes of the federal alternative tax. If you are subject to the federal
alternative minimum tax, a portion of your income may not be exempt from
federal income tax.
The Fund normally invests at least 60% of its net assets in securities that
FMR judges to be of equivalent quality to those rated A or better by
Moody's or S&P. The Fund may not invest more than 5% of its net assets
in securities rated below Baa by Moody's or BBB by S&P, or in unrated
securities of equivalent quality, and does not currently intend to purchase
securities rated lower than Ba or BB.
The Fund normally maintains a dollar-weighted average maturity of
between two and four years. Although the Fund is permitted to hold
securities with maturities of more than four years, its dollar-weighted
average maturity is limited to a maximum of four years.
The Fund may temporarily change its investment focus for defensive
purposes. During periods when, in FMR's opinion, a temporary defensive
posture in the market is appropriate, the Fund may hold cash that is not
earning interest or invest without limitation in short-term municipal
obligations and money market instruments, including obligations whose
interest may be federally taxable. Under such circumstances, the Fund may
temporarily invest so that less than 80% of its net assets will be invested
in securities whose interest is exempt from federal income tax. Federally
taxable obligations include, but are not limited to, obligations issued by
the U.S. government or any of its agencies or instrumentalities,
high-quality commercial paper, certificates of deposit, and repurchase
agreements. The Fund does not intend to invest in federally taxable
obligations under normal conditions.
The Fund is non-diversified, which means that it may invest a greater
portion of its assets in securities of a single issuer than would be the
case if it were diversified. As a result, changes in the financial
condition or market assessment of a single issuer could cause greater
fluctuation in the Fund's share value.
INVESTMENT LIMITATIONS
Each Fund has adopted the following investment limitations designed to
reduce investment risk. The policies and limitations discussed below, and
in the Appendix beginning on page , are considered at the time of purchase.
With the exception of each Fund's borrowing policy, the sale of portfolio
securities is not required in the event of a subsequent change in
circumstances.
DIVERSIFICATION: These limitations do not apply to U.S. government
securities and are fundamental unless otherwise noted.
(bullet) Equity Portfolio Growth and Strategic Opportunities each may not
purchase a security if, as a result, more than 5% of its total assets would
be invested in the securities of any issuer;
(bullet) As a non-fundamental policy, generally to meet federal tax
requirements at the close of each quarter, Emerging Markets Income and
Short-Intermediate Tax-Exempt may not (1) with respect to 50% of its total
assets, purchase a security if more than 5% of its total assets would be
invested in the securities of a single issuer; and (2) invest more than 25%
of its total assets in securities of a single issuer.
(bullet) With respect to 75% of its total assets, each other Fund may not
purchase a security if, as a result, more than 5% of its total assets would
be invested in the securities of any issuer.
(bullet) Each Fund (except Emerging Markets Income and
Short-Intermediate Tax-Exempt) may not purchase a security if, as a
result, it would hold more than 10% of the outstanding voting securities of
any issuer (except that Overseas, Growth Opportunities, Equity
Portfolio Income, Income & Growth, High Yield, Government
Investment, Short Fixed-Income and High Income Municipal each
may invest up to 25% of its total assets without regard to this
limitation .)
(bullet) Limited Term Tax-Exempt may not purchase the securities of any
issuer if, as a result, more than 25% of its total assets would be invested
in industrial development bonds whose issuers are in any one industry.
(bullet) Each other Fund may not purchase the securities of any issuer if,
as a result, more than 25% of the Fund's total assets would be invested in
the securities of issuers having their principal business activities in the
same industry. Limited Term Bond may, however, invest more than 25% of its
total assets in obligations of banks, although it has no current intention
of so doing.
(bullet) As a non-fundamental policy, Short-Intermediate Tax-Exempt may
invest any portion of its assets in industrial revenue bonds (IRBs) backed
by private issuers, and may invest up to 25% of its total assets in IRBs
related to a single industry.
BORROWING: The following limitations are fundamental.
(bullet) Each fund may borrow money for temporary or emergency purposes,
in an amount not exceeding 33 1/3% of the value of its total assets;
(bullet) Strategic Opportunities, Limited Term Bond, and Limited Term
Tax-Exempt may not purchase any security while borrowings representing more
than 5% of its total assets are outstanding.
(bullet) Growth Opportunities, Income & Growth, Government Investment
Short Fixed - Income and High Income Municipal may not purchase any
security while borrowings representing more than 5% of its net assets are
outstanding.
The following limitations are non-fundamental.
(bullet) Each other fund may not purchase any security while borrowings
representing more than 5% of its total assets are outstanding.
(bullet) Each Fund may borrow money from banks or from other funds advised
by FMR, or by engaging in reverse repurchase agreements.
LENDING: Percentage limitations are fundamental.
(bullet) High Income Municipal , Limited Term Tax-Exempt and
Short-Intermediate Tax-Exempt do not currently intend to engage in
repurchase agreements or make loans (but this limitation does not apply to
purchases of debt securities).
(bullet) Each other Fund (A) may lend securities to a broker-dealer or
institution when the loan is fully collateralized; and (B) may lend money
to a mutual fund advised by FMR or an affiliate. Each Fund will limit loans
in the aggregate to 33 1/3% of its total assets.
Each Fund has received permission from the SEC to lend money to and borrow
money from other funds advised by FMR or its affiliates, High Income
Municipal, Limited Term Tax-Exempt and Short-Intermediate Tax-Exempt will
participate only as borrowers. If a Fund borrows money, its share price may
be subject to greater fluctuation until the borrowing is paid off. To this
extent, purchasing securities when borrowings are outstanding may involve
an element of leverage.
As a non-fundamental policy, each Fund may not purchase a security, if as a
result, more than 15% (Overseas, Emerging Markets Income and High Yield) or
10% (all others) of its net assets would be invested in illiquid
investments.
HOW TO BUY SHARES
S hares of each Fund are offered continuously to investors who engage
an investment professional for investment advice and may be purchased at
the public offering price (the offering price) next determined after the
transfer agent receives your order to purchase. State Street Bank and Trust
Company (the Transfer Agent), P.O. Box 8302, Boston, Massachusetts
02266-8302, provides transfer and dividend paying services for Class A
shares of each Fund.
The offering price is equal to the net asset value per share (NAV) plus a
sales charge, which is a variable percentage of the offering price
depending upon the amount of the purchase. The table above shows total
sales charges and concessions to securities dealers and banks (investment
professionals) with which Distributors has Agreements.
You can open an account with a minimum initial investment of $2,500 by
completing and returning an account application. You can make additional
investments of $250 or more. For tax-deferred retirement plans, including
IRA accounts, there is a $500 minimum initial investment and a $100
subsequent investment minimum. For accounts established under the Fidelity
Advisor Systematic Investment Program or the Fidelity Advisor Systematic
Exchange Program, there is a $1,000 initial and $100 monthly subsequent
investment minimum requirement. FOR FURTHER INFORMATION ON OPENING AN
ACCOUNT, PLEASE CONSULT YOUR INVESTMENT PROFESSIONAL OR REFER TO THE
CLASS A ACCOUNT APPLICATION.
It is the responsibility of your investment professional to transmit your
order to purchase shares to the Transfer Agent before 4:00 p.m. Eastern
time in order for you to receive that day's Class A share price. The
Transfer Agent must receive payment within five business days after an
order is placed ; otherwise, the purchase order may be canceled and
you could be held liable for resulting fees and/or losses. To eliminate
the need for safekeeping, the Funds will issue certificates for shares only
upon request.
All of your purchases must be made in U.S. dollars and checks must be drawn
on U.S. banks. Each Fund reserves the right to limit the number of your
checks processed at one time. If your check does not clear, the Fund may
cancel your purchase and you could be held liable for any fees and/or
losses incurred. When you purchase directly by check, the Fund can hold the
proceeds of redemptions until the Transfer Agent is reasonably satisfied
that the purchase payment has been collected (which can take up to seven
calendar days). You may avoid a delay in receiving redemption proceeds by
purchasing shares with a certified check. S hares of the fixed-income
funds purchased through investment professionals utilizing an automated
order placement and settlement system that guarantees payment for orders on
a specified date, begin to earn income dividends on that date. Direct
purchases and all other orders begin to earn dividends on the business day
after the Fund receives payment.
Each Fund and Distributors reserve the right to suspend the offering of
shares for a period of time and to reject any order for the purchase of
shares, including certain purchases by exchange (see "How to Exchange,''
page ).
2.SALES CHARGES AND INVESTMENT PROFESSIONAL CONCESSIONS
SALES CHARGES AS % OF INVESTMENT PROFESSIONAL
AMOUNT OF PURCHASE OFFERING NET AMOUNT CONCESSION AS %
IN SINGLE TRANSACTIONS PRICE INVESTED OF OFFERING PRICE
FIDELITY ADVISOR FUNDS
Less than $50,000 4.75% 4.99% 4.00%
$50,000 to less than $100,000 4.50% 4.71% 4.00%
$100,000 to less than $250,000 3.50% 3.63% 3.00%
$250,000 to less than $500,000 2.50% 2.56% 2.00%
$500,000 to less than $1,000,000 2.00% 2.04% 1.75%
$1,000,000 or more None None See Below*
SHORT FIXED-INCOME FUND AND
SHORT-INTERMEDIATE TAX-EXEMPT FUND:
Less than $1,000,000 1.50% 1.52% 1.20%
$1,000,000 or more None None See Below*
* INVESTMENT PROFESSIONALS WILL BE COMPENSATED WITH A FEE OF .25% FOR
PURCHASES OF $1 MILLION OR MORE, IF THE ASSETS ON WHICH THE .25% IS PAID
REMAIN WITHIN THE FIDELITY ADVISOR FUNDS FOR ONE YEAR, EXCEPT FOR PURCHASES
THROUGH A BANK OR BANK-AFFILIATED BROKER-DEALER THAT QUALIFY FOR A SALES
CHARGE WAIVER DESCRIBED BELOW. ALL ASSETS ON WHICH THE .25% FEE IS PAID
MUST REMAIN IN CLASS A SHARES OF THE FIDELITY ADVISOR FUNDS, INITIAL CLASS
SHARES OF DAILY MONEY FUND, OR SHARES OF DAILY TAX-EXEMPT MONEY FUND FOR A
PERIOD OF ONE UNINTERRUPTED YEAR OR THE INVESTMENT PROFESSIONAL WILL BE
REQUIRED TO REFUND THIS FEE TO DISTRIBUTORS.
3.MINIMUM ACCOUNT BALANCE. You must maintain an account balance of $1,000
in Class A shares. If your account falls below $1,000 due to redemption of
Class A shares, the Transfer Agent may close it at the NAV next determined
on the day your account is closed and mail you the proceeds at the address
shown on the Transfer Agent's records. The Transfer Agent will give you 30
days' notice that your account will be closed unless you make an investment
to increase your account balance to the $1,000 minimum. The minimum account
balance does not apply to IRA accounts.
4.SALES CHARGE WAIVERS. Sales charges do not apply to Class A shares of a
Fund purchased:
(1) by registered representatives, bank trust officers and other employees
(and their immediate families) of investment professionals having
Agreements with Distributors;
(2) by a current or former Trustee or officer of a Fidelity fund or a
current or retired officer, director or regular employee of FMR Corp. or
its direct or indirect subsidiaries (a "Fidelity Trustee or employee"), the
spouse of a Fidelity Trustee or employee, a Fidelity Trustee or employee
acting as custodian for a minor child, or a person acting as trustee of a
trust for the sole benefit of the minor child of a Fidelity Trustee or
employee;
(3) by a charitable organization (as defined in Section 501(c)(3) of the
Internal Revenue Code) investing $100,000 or more;
(4) by a charitable remainder trust or life income pool established for the
benefit of a charitable organization (as defined in Section 501(c)(3) of
the Internal Revenue Code);
(5) by trust institutions (including bank trust departments) investing on
their own behalf or on behalf of their clients;
(6) in accounts as to which a bank or broker-dealer charges an asset
management fee, provided the bank or broker-dealer has an Agreement
with Distributors;
(7) as part of an employee benefit plan having more than 200 eligible
employees or a minimum of $1,000,000 invested in Fidelity Advisor Funds;
(8) in a Fidelity or Fidelity Advisor IRA account purchased with the
proceeds of a distribution from (i) an employee benefit plan having more
than 200 eligible employees or a minimum of $3,000,000 in plan assets
invested in Fidelity mutual funds or $1,000,000 invested in Fidelity
Advisor mutual funds, or (ii) an insurance company separate account
qualifying under (9) below, or funding annuity contracts purchased by
employee benefit plans which in the aggregate have at least $3,000,000 in
plan assets invested in Fidelity mutual funds;
(9) by an insurance company separate account used to fund annuity contracts
purchased by employee benefit plans which in the aggregate have more than
200 eligible employees or $1,000,000 invested in Fidelity Advisor mutual
funds;
(10) by any state, county, city, or any governmental instrumentality,
department, authority or agency; or
(11) with redemption proceeds from other mutual fund complexes on which the
investor has paid a front-end sales charge only.
Qualification for sales charge waivers must be cleared through Distributors
in advance, and employee benefit plan investors must meet additional
requirements specified in the Funds' SAIs. YOUR INVESTMENT PROFESSIONAL
SHOULD CALL FIDELITY FOR MORE INFORMATION.
INVESTOR SERVICES
You may initiate many transactions by telephone. Note that the Transfer
Agent will not be responsible for any losses resulting from unauthorized
transactions if it follows reasonable procedures designed to verify the
identity of the caller. The Transfer Agent will request personalized
security codes or other information, and may also record calls. You should
verify the accuracy of your confirmation statements immediately after you
receive them. If you do not want the ability to redeem and exchange by
telephone, call the Transfer Agent for instructions.
5.QUANTITY DISCOUNTS. Reduced sales charges are applicable to purchases of
Class A shares of a Fund in amounts of $50,000 or more ($1,000,000 or more
for Short Fixed-Income or Short-Intermediate Tax-Exempt). Your purchases
of Class B shares may be included for purposes of qualifying for a Class A
front-end sales charge reduction in the following programs. To obtain
the reduction of the sales charge, you or your investment professional must
notify the Transfer Agent at the time of purchase whenever a quantity
discount is applicable to your purchase. Upon such notification, you will
receive the lowest applicable sales charge.
For purposes of qualifying for a reduction in front-end sales
charges under the Combined Purchase, Rights of Accumulation or Letter of
Intent programs, the following may qualify as an individual, or a "company"
as defined in Section 2(a)(8) of the Investment Company Act of 1940 (1940
Act): an individual, spouse, and their children under age 21 purchasing for
his, her, or their own account; a trustee, administrator or other fiduciary
purchasing for a single trust estate or single fiduciary account or for a
single or a parent-subsidiary group of "employee benefit plans" (as defined
in Section 3(3) of the Employee Retirement Income Security Act of 1974);
and tax-exempt organizations as defined under Section 501(c)(3) of the
Internal Revenue Code.
6.COMBINED PURCHASES. When you invest in Class A shares of a Fund for
several accounts at the same time, you may combine these investments into a
single transaction to qualify for the quantity discount if purchased
through one investment professional and if the total is at least $50,000
(at least $1,000,000 for Short Fixed-Income or Short-Intermediate
Tax-Exempt).
7.RIGHTS OF ACCUMULATION. Your "Rights of Accumulation" permit reduced
front-end sales charges on any future purchases of Class A shares
after you have reached a new breakpoint in a Fund's sales charge schedule.
You may add the value of currently held Class A and Class B shares of
Fidelity Advisor Funds, and the value of Initial Class shares and Class
B shares of Daily Money Fund : U.S. Treasury Portfolio and shares of
Daily Money Fund: Money Market Portfolio and Daily Tax-Exempt Money
Fund ACQUIRED BY EXCHANGE FROM ANY FIDELITY ADVISOR FUND, determined at the
current day's NAV at the close of business, to the amount of your new
purchase valued at the current offering price , to determine your
reduced front-end sales charge.
8.LETTER OF INTENT. If you anticipate purchasing a Fund's Class A shares
in amounts of $50,000 or more ($1,000,000 for Short Fixed-Income or
Short-Intermediate Tax-Exempt) alone or in combination with Class A
or Class B shares of other Fidelity Advisor Funds , Initial Class shares
and Class B shares of Daily Money Fund: U.S. Treasury Portfolio, and shares
of Daily Money Fund: Money Market Portfolio and Daily Tax-Exempt Money Fund
ACQUIRED BY EXCHANGE FROM ANY FIDELITY ADVISOR FUND, within a 13-month
period, you may obtain Class A shares at the same reduced sales charge as
though the total quantity were invested in one lump sum, by filing a
non-binding Letter of Intent (the Letter) within 90 days of the start of
the purchases. Each Class A investment you make after signing the Letter
will be entitled to the sales charge applicable to the total investment
indicated in the Letter. For example, a $2,500 purchase of Class A shares
toward a $50,000 Letter would receive the same reduced sales charge as if
the $50,000 ($1,000,000 for Short Fixed-Income or Short-Intermediate
Tax-Exempt) had been invested at one time. To ensure that the reduced price
will be received on future purchases, you or your investment professional
must inform the Transfer Agent that the Letter is in effect each time Class
A shares are purchased. Neither income dividends nor capital gain
distributions reinvested in additional Class A or Class B shares
will apply toward the completion of the Letter.
Your initial investment must be at least 5% of the total amount you plan to
invest. Out of the initial purchase, 5% of the dollar amount specified in
the Letter will be registered in your name and held in escrow. The Class A
shares held in escrow cannot be redeemed or exchanged until the Letter is
satisfied or the additional sales charges have been paid. You will earn
income dividends and capital gain distributions on escrowed Class A shares.
The escrow will be released when your purchase of the total amount has been
completed. You are not obligated to complete the Letter.
If you purchase more than the amount specified in the Letter and qualify
for a further front-end sales charge reduction, the front-end sales charge
will be adjusted to reflect your total purchase at the end of 13 months.
Surplus funds will be applied to the purchase of additional Class A shares
at the then current offering price applicable to the total purchase.
If you do not complete your purchase under the Letter within the 13-month
period, you will receive 30 days' written notice to pay the
increased front-end sales charges due. Otherwise, sufficient escrowed Class
A shares will be redeemed to pay such charges.
FOR MORE INFORMATION ON THE TERMS OF QUANTITY DISCOUNTS, PLEASE CONSULT
YOUR INVESTMENT PROFESSIONAL.
9.FIDELITY ADVISOR SYSTEMATIC INVESTMENT PROGRAM. You can make regular
investments in Class A shares of a Fidelity Advisor Fund with the
Systematic Investment Program by completing the appropriate section of the
account application and attaching a voided personal check. Investments may
be made monthly by automatically deducting $100 or more from your bank
checking account. You may change the amount of your monthly purchase at any
time. There is a $1,000 minimum initial investment requirement for the
Systematic Investment Program. S hares will be purchased at the
offering price next determined following receipt of the investment by the
Transfer Agent. You may cancel the Systematic Investment Program at any
time without payment of a cancellation fee. You will receive a confirmation
from the Transfer Agent for every transaction, and a debit entry will
appear on your bank statement.
SHAREHOLDER COMMUNICATIONS
The Transfer Agent or your investment professional will send you a
confirmation after every transaction that affects your share balance or
account registration. In addition, a consolidated statement will be
provided at least quarterly. At least twice a year each shareholder will
receive the Fund's financial statements, with a summary of its portfolio
composition and performance. To reduce expenses, only one copy of most
shareholder reports (such as a Fund's Annual Report) will be mailed to each
shareholder address. Please write to the Transfer Agent or contact your
investment professional if you need to have additional reports sent each
time.
Each Fund pays for these shareholder communications, but not for special
services that are required by a few shareholders, such as a request for a
historical transcript of an account. You may be required to pay a fee for
such special services. If you are purchasing shares of a Fund through a
program of administrative services offered by an investment professional,
you should read the additional materials pertaining to that program in
conjunction with this prospectus. Certain features of each Fund, such as
the minimum initial or subsequent investment, may be modified in these
programs, and administrative charges may be imposed for the services
rendered.
HOW TO EXCHANGE
An exchange is the redemption of Class A shares of one Fund and the
purchase of Class A shares of another Fund, each at the next determined
NAV. The exchange privilege is a convenient way to buy and sell Class A
shares of the Fidelity Advisor Funds, Initial Class s hares of Daily
Money Fund : U.S. Treasury Portfolio , and shares of Daily Money
Fund: Money Market Portfolio and Daily Tax-Exempt Money Fund ,
provided such Funds are registered in your state.
To protect each Fund's performance and shareholders, FMR discourages
frequent trading in response to short-term market fluctuations. Each Fund
reserves the right to refuse exchange purchases by any person or group if,
in FMR's opinion, the Fund would be unable to invest effectively in
accordance with its investment objective and policies, or would otherwise
be affected adversely. Your exchanges may be restricted or refused if a
Fund receives or anticipates simultaneous orders affecting significant
portions of a Fund's assets. In particular, a pattern of exchanges that
coincides with a "market timing" strategy may be disruptive to a Fund.
Exchange restrictions may be imposed at any time. The Funds may modify or
terminate the exchange privilege. The exchange limit may be modified for
certain institutional retirement plans.
Exchange instructions may be given by you in writing or by telephone
directly to the Transfer Agent or through your investment professional .
If you choose to exchange by writing, you must send a letter of instruction
with your signature guaranteed either directly to the Transfer Agent or to
your investment professional, accompanied by either the certificates
representing the shares to be redeemed or, if no certificates have been
issued, by a stock power form with your signature guaranteed. FOR MORE
INFORMATION ON ENTERING AN EXCHANGE TRANSACTION, PLEASE CONSULT YOUR
INVESTMENT PROFESSIONAL.
Before you make an exchange:
1. Read the prospectus of the Fund into which you want to exchange.
2. Class A shares of a Fund may be exchanged for Class A shares of another
Fidelity Advisor Fund seven calendar days after purchase, at NAV. If you
have held Class A shares of Short Fixed-Income Fund or Short-Intermediate
Tax-Exempt for less than six months, you will pay a sales charge equal to
the difference between the front-end sales charge on the Class A shares of
the Fund you are exchanging into and the front-end sales charge applicable
to Class A shares of Short Fixed-Income or Short-Intermediate Tax-Exempt
being exchanged. For example, if you paid the full 1.50 % front-end
sales charge when you purchased your Short Fixed-Income Class A shares, you
will have to pay a sales charge of up to 3.25% when you exchange these
shares into Class A shares of another Fidelity Advisor Fund with a maximum
front-end sales charge of 4.75%. After six months, shares may be exchanged
at NAV. Exchanges of Initial Class shares of Daily Money Fund: U.S.
Treasury Portfolio or shares of Daily Money Fund: Money Market Portfolio
and Daily Tax-Exempt Money Fund into Class A shares of a Fidelity Advisor
Fund will be processed at the next determined offering price (unless
the shares were acquired by exchange from another Fidelity Advisor Fund).
3. You may exchange only between accounts that are registered in the
same name, address, and taxpayer identification number.
4. You may make four exchanges out of each Fund per calendar year.
If you exceed this limit, your future purchases of (including exchanges
into) Fidelity Advisor Funds may be permanently refused. For purposes of
the four exchange limit, accounts under common ownership or control,
including accounts having the same taxpayer identification number, will be
aggregated. Systematic exchanges are not subject to this four exchange
limit (see following section).
5. TAXES: The exchange of Class A shares is considered a sale and
may be taxable. The Transfer Agent will send you or your
investment professional a confirmation of each exchange transaction.
10.FIDELITY ADVISOR SYSTEMATIC EXCHANGE PROGRAM. You can exchange a
specific dollar amount of Class A shares from a Fund into Class A shares of
another Fidelity Advisor Fund , Initial Class shares of Daily Money Fund:
U.S. Treasury Portfolio or shares of Daily Money Fund: Money Market
Portfolio and Daily Tax-Exempt Money Fund on a periodic basis
under the following conditions:
1. The account from which the exchanges are to be processed must have a
minimum balance of $10,000.
2. The account into which the exchanges are to be processed must be an
existing account with a minimum balance of $1,000.
3. Both accounts must have identical registrations and taxpayer
identification numbers. The minimum amount that can be exchanged
systematically into a Fund is $100.
4. Systematic e xchanges will be processed at the NAV determined on
the transaction date, except that s ystematic e xchanges into
Class A shares of a Fidelity Advisor Fund from Initial Class s hares
of Daily Money Fund : U.S. Treasury Portfolio or shares of Daily
Money Fund: Money Market Portfolio and Daily Tax-Exempt Money Fund,
will be processed at the offering price next determined on the transaction
date (unless the shares were acquired by exchange from another Fidelity
Advisor Fund).
HOW TO SELL SHARES
You may sell (redeem) all or a portion of your shares on any day the New
York Stock Exchange (NYSE) is open, at the NAV next determined after the
Transfer Agent receives your request to sell. Orders to sell may be placed
by you in writing or by telephone or through your investment professional.
If you choose to sell shares by written instruction, you must send a
letter of instruction with your signature guaranteed either directly to the
Transfer Agent or to your investment professional, accompanied by either
the certificates representing the shares to be redeemed or, if no
certificates have been issued, by a stock power form with your signature
guaranteed. Orders to sell received by the Transfer Agent before 4:00
p.m. Eastern time will receive that day's Class A share price. For
orders to sell placed through your investment professional, it is the
investment professional's responsibility to transmit such orders to the
Transfer Agent by 4:00 p.m. Eastern time for you to receive that day's
Class A share price.
Once your Class A shares are redeemed, a Fund normally will send the
proceeds on the next business day to the address of record. If making
immediate payment could adversely affect the Fund, the Fund may take up to
seven days to pay you. A Fund may withhold redemption proceeds until it is
reasonably satisfied that it has collected investments that were made by
check (which may take up to seven calendar days).
When the NYSE is closed (or when trading is restricted) for any reason
other than its customary weekend or holiday closings, or under any
emergency circumstances as determined by the SEC to merit such action, a
Fund may suspend redemption or postpone payment dates for more than seven
days. The Transfer Agent requires additional documentation to redeem shares
registered in the name of a corporation, agent or fiduciary or a surviving
joint owner. Call 1-800-526-0084 for specific requirements.
11.REDEMPTION REQUESTS BY TELEPHONE .
TO RECEIVE A CHECK. You may sell shares of a Fund having a value of
$100,000 or less from your account by calling the Transfer Agent.
Redemption proceeds must be sent to the address of record listed on the
account, and a change of address must not have occurred within the
preceding 3 0 days.
TO RECEIVE A WIRE. You may sell shares of a Fund and have the proceeds
wired to a pre-designated bank account. Wires will generally be sent the
next business day following the redemption of shares from your
account.
Telephone redemptions cannot be processed for Fidelity Advisor Fund
prototype retirement accounts where State Street Bank and Trust Company is
the custodian.
12.REDEMPTION REQUESTS IN WRITING. For your protection, if you sell shares
of a Fund having a value of more than $100,000, if you are sending
the proceeds of a redemption of any amount to an address other than the
address of record listed on the account, if you have requested a
change of address within the preceding 3 0 days, or if you wish to
have the proceeds wired to a non - predesignated bank account, you
must send a letter of instruction signed by all registered owners with
signature(s) guaranteed to the Transfer Agent. A signature guarantee is a
widely recognized way to protect you by guaranteeing the signature on your
request; it may not be provided by a notary public. Signature guarantee(s)
will be accepted from banks, brokers, dealers, municipal securities
dealers, municipal securities brokers, government securities dealers,
government securities brokers, credit unions (if authorized under state
law), national securities exchanges, registered securities associations,
clearing agencies and savings associations.
13.REINSTATEMENT PRIVILEGE. If you have sold all or part of your Class A
shares of a Fund you may reinvest an amount equal to all or a portion of
the redemption proceeds in Class A shares of the Fund or in Class A shares
of any of the other Fidelity Advisor Funds, at the NAV next determined
after receipt of your investment order, provided that such reinvestment is
made within 30 days of redemption. You must reinstate your Class A shares
into an account with the same registration. This privilege may be exercised
only once by a shareholder with respect to a Fund and certain restrictions
may apply.
14.FIDELITY ADVISOR SYSTEMATIC WITHDRAWAL PROGRAM. If you own Class A
shares of a Fund worth $10,000 or more, you may periodically have proceeds
sent automatically from your account to you, to a person named by you, or
to your bank checking account. Your Systematic Withdrawal Program payments
are drawn from Class A share redemptions. If Systematic Withdrawal Program
redemptions exceed distributions earned on your Class A shares, your
account eventually may be exhausted. Since a sales charge is applied on new
Class A shares you buy, it is to your disadvantage to buy Class A shares
while also making systematic redemptions. You may obtain information about
the Systematic Withdrawal Program by contacting your investment
professional.
15.CHECKWRITING SERVICE. Short Fixed-Income and Short-Intermediate
Tax-Exempt each offer a checkwriting service ($500 minimum)
to allow the redemption of shares from your account. Refer to the Class
A account application or each SAI and complete the attached signature
card. Upon receipt of the properly completed Class A account
application and signature card, the Fund will provide checks. If you redeem
by check from the Fund and the amount of the check is greater than the
value of your account, your check will be returned to you and you may be
subject to additional charges.
DISTRIBUTION OPTIONS
When you fill out your account Class A application, you can choose
from four Distribution Options:
1. REINVESTMENT OPTION. Dividends and capital gain distributions will be
automatically reinvested in additional Class A shares of a Fund. If you do
not indicate a choice on your account application, you will be assigned
this option.
2. INCOME-EARNED OPTION. Capital gain distributions will be automatically
reinvested, but a check will be sent for each dividend distribution.
3. CASH OPTION. A check will be sent for each dividend and capital gain
distribution.
4. DIRECTED DIVIDENDS(Registered trademark) PROGRAM. Dividends and capital
gain distributions will be automatically invested in Class A shares
of another identically registered Fidelity Advisor Fund.
You may change your Distribution Option at any time by notifying the
Transfer Agent in writing. Distribution checks for fixed-income funds will
be mailed no later than seven days after the last day of the month. On the
day a Fund goes ex-dividend, the amount of the distribution is deducted
from its share price. Reinvestment of distributions will be made at that
day's NAV. If you select option 2 or 3 and the U.S. Postal Service cannot
deliver your checks, or if your checks remain uncashed for six months,
distribution checks will be reinvested in your account at the current NAV
and your election may be converted to the Reinvestment Option.
DISTRIBUTIONS AND TAXES
DISTRIBUTIONS. The Funds distribute substantially all of their net
investment income and capital gains, if any, to shareholders each year
pursuant to the following schedule. Each Fund may pay capital gains in
December. In addition, Equity Portfolio Growth, Equity Portfolio Income,
Limited Term Bond and Limited Term Tax-Exempt may pay capital gains in
January as well. Emerging Markets Income may also pay capital gains in
February.
Equity Portfolio Growth pays net investment income, if any, in January and
December; Overseas, Growth Opportunities, Global Resources, and Strategic
Opportunities pay in December; Emerging Markets Income, High Yield,
Limited Term Bond, Government Investment, Short Fixed-Income, High Income
Municipal, Limited Term Tax-Exempt and Short-Intermediate Tax-Exempt
declare dividends daily and pay monthly; and Equity Portfolio Income and
Income & Growth declare dividends in March, June, September, and
December and pay the following month.
16.CAPITAL GAINS. You may realize a gain or loss when you sell (redeem) or
exchange shares. For most types of accounts, a Fund will report the
proceeds of your redemptions to you and the IRS annually. However, because
the tax treatment also depends on your purchase price and your personal tax
position, YOU SHOULD KEEP YOUR REGULAR ACCOUNT STATEMENTS TO USE IN
DETERMINING YOUR TAX.
17."BUYING A DIVIDEND." On the record date for a distribution from a Fund,
the Fund's share price is reduced by the amount of the distribution. If you
buy shares just before the record date (buying a dividend), you will pay
the full offering price for the shares, and then receive a portion of the
price back as a taxable distribution.
18.FEDERAL TAXES. Distributions from each Fund's income and short-term
capital gains are taxed as dividends, and long-term capital gain
distributions are taxed as long-term capital gains. Gains on the sale of
tax-free bonds results in a taxable distribution. Short-term capital gains
and a portion of the gain on bonds purchased at a discount after April 30,
1993 are taxed as dividends. Distributions are taxable when they are paid,
whether you take them in cash or reinvest them in additional shares, except
that distributions declared in December and paid in January are taxable as
if paid on December 31. Each Fund will send you a tax statement by January
31 showing the tax status of the distributions you received in the past
year. A copy will be filed with the Internal Revenue Service (IRS).
To the extent that a Fund invest s in municipal obligations whose
interest is subject to the federal alternative minimum tax for individuals
(AMT bonds) , i ndividuals who are subject to the AMT will be required
to report a portion of the Fund's dividends as a "tax-preference item" in
determining their federal tax. Federally tax-free interest earned by the
Funds is federally tax-free when distributed as income dividends. During
the most recent fiscal year ended, 100% of the income dividends for High
Income Municipal and Limited Term Tax-Exempt were free from federal tax. If
the Funds earn taxable income from any of their investments, it will be
distributed as a taxable dividend. Some of the Funds may be eligible for
the dividends-received deduction for corporations.
EFFECT OF FOREIGN TAXES. A Fund may pay withholding or other
taxes to foreign governments during the year. These taxes would reduce the
Fund's dividends, but would be included in the taxable income reported on
your tax statement. You may be able to claim an offsetting tax credit or
itemized deduction for foreign taxes paid by the Fund. Your tax statement
will generally show the amount of foreign tax for which a credit or
deduction will be available.
STATE AND LOCAL TAXES. Mutual fund dividends from U.S. government
securities generally are free from state and local income taxes. However,
particular states may limit this benefit, and some tupes of securitites,
such as repurchase agreements and some agency backed securitites, may not
qualify for the benefit. Ginnie mae securities and other mortgage-backed
securities are notable exceptions in most states. Some states may impose
intangible property taxes.
OTHER TAX INFORMATION. The information above is only a summary of some
of the tax consequences generally affecting the Funds and their
shareholders, and no attempt has been made to discuss individual tax
consequences. In addition to federal tax, shareholders may be subject to
state or local taxes on their investments. Investors should consult their
tax advisors for details and up-to-date information on the tax laws in
their state to determeine whether the fund is suitable to their particular
tax situation.
When you sign your account application, you will be asked to certify that
your social security or taxpayer identification number is correct and that
you are not subject to 31% backup withholding for failing to report income
to the IRS. If you violate IRS regulations, the IRS can require a Fund to
withhold 31% of your taxable distributions and redemptions.
FEES
19.MANAGEMENT AND OTHER SERVICES. For managing its investments and business
affairs, each Fund pays a monthly fee to FMR.
Each Fund (with the exception of Equity Portfolio Income, see below) pays a
monthly fee to FMR based on a basic fee rate, which is the sum of two
components:
1. A group fee rate based on the monthly average net assets of all of the
mutual funds advised by FMR. This rate for Equity Funds cannot rise above
.52% and it drops (to as low as a marginal rate of .31%*) as total assets
in all of these funds rise. The effective Equity Fund group fee rate for
September 1993, October 1993 and November 1993 was .3262%, .3254% and
.3250%, respectively. The group fee rate for Fixed-Income Funds cannot rise
above .37% and it drops (to as low as a marginal rate of .15%*) as total
assets in all of these funds rise. The effective Fixed-Income group fee
rate for October 1993 and November 1993 was .1631% and .1627%,
respectively.
2. An individual fund fee rate, which varies for each Fund.
* FMR VOLUNTARILY AGREED TO ADOPT REVISED GROUP FEE RATE SCHEDULES WHICH
PROVIDE FOR A MARGINAL RATE AS LOW AS .285% (EQUITY FUNDS) AND .1325%
(FIXED-INCOME FUNDS) WHEN AVERAGE GROUP NET ASSETS EXCEED $336 BILLION.
(THE MANAGEMENT CONTRACTS FOR EMERGING MARKETS INCOME, HIGH YIELD, AND
SHORT-INTERMEDIATE TAX-EXEMPT CONTAIN THE REVISED GROUP FEE RATE
SCHEDULES.) A NEW MANAGEMENT CONTRACT WITH A REVISED GROUP FEE RATE
SCHEDULE WILL BE PRESENTED FOR APPROVAL AT EACH FUND'S NEXT SHAREHOLDER
MEETING.
One-twelfth of the annual basic fee rate is applied to each Fund's
net assets averaged over the most recent month, giving a dollar amount
which is the management fee for that month.
Equity Portfolio Income pays FMR a monthly management fee at an annual rate
of .50% of its average net assets.
The following are the individual fund fee rates and total management fees
for each Fund's most recent fiscal year end.
TOTAL
MANAGEMENT FEE
INDIVIDUAL (AS A PERCENT OF AVERAGE
FUND FEE RATE NET ASSETS)
(AS A PERCENTAGE OF BEFORE REIMBURSEMENTS,
AVERAGE NET ASSETS) IF ANY
INTERNATIONAL FUNDS:
Overseas 0.45% 0.77%(dagger)
Emerging Markets Income* 0.55% 0.71%
EQUITY FUNDS:
Equity Portfolio Growth 0.33% 0.66%
Growth Opportunities 0.30% 0.68%
Global Resources 0.45% 0.77%(dagger)
Strategic Opportunities 0.30% 0.54%
Equity Portfolio Income .NA 0.50%
Income & Growth 0.20% 0.53%
FIXED-INCOME FUNDS:
High Yield 0.45% 0.51%
Limited Term Bond 0.25% 0.42%
Government Investment 0.30% 0.46%
Short Fixed-Income 0.30% 0.47%
MUNICIPAL/TAX-EXEMPT FUNDS:
High Income Municipal Fund 0.25% 0.42%
Limited Term Tax-Exempt Fund 0.25% 0.42%
Short-Intermediate Tax -Exempt * 0.25% 0.41%
(dagger) TOTAL MANAGEMENT FEES ARE HIGHER THAN THOSE CHARGED BY MOST MUTUAL
FUNDS, BUT NOT NECESSARILY HIGHER THAN THOSE OF A TYPICAL INTERNATIONAL
FUND, DUE TO THE GREATER COMPLEXITY, EXPENSE AND COMMITMENT OF RESOURCES
INVOLVED IN INTERNATIONAL INVESTING.
* PROJECTIONS FOR FIRST YEAR OF OPERATIONS.
In addition to the basic fee, the management fees for Overseas, Growth
Opportunities, and Strategic Opportunities vary based on performance. The
performance adjustment is added to or subtracted from the management
fee and is calculated monthly. It is based on a comparison of each Fund's
performance to that of an index, over the most recent 36-month period. The
difference is converted into a dollar amount that is added to or subtracted
from the management fee. This adjustment rewards FMR when the Fund
outperforms the index and reduces FMR's fee when the Fund underperforms the
index. The maximum annualized performance index adjustment rate for each
Fund is +/- .20%. Overseas compares itself to the Morgan Stanley Capital
International Europe, Australia, Far East Index. (Prior to December 1,
1992, Overseas Fund's performance adjustment was based on a comparison with
the Morgan Stanley Capital International Europe Index.) Growth
Opportunities and Strategic Opportunities compare themselves to the S&P
500. See "The Trusts and the Fidelity Organization" for information
regarding performance calculations for Strategic Opportunities.
FMR may, from time to time, agree to reimburse a Fund for expenses
(excluding interest, taxes, brokerage commissions, and extraordinary
expenses) above a specified percentage of average net assets. FMR retains
the ability to be repaid by a Fund for these expense reimbursements in the
amount that expenses fall below the limit prior to the end of the fiscal
year. Fee reimbursements by FMR will increase a Fund's yield and total
return, and repayment by a Fund will lower its yield and total return. FMR
has voluntarily agreed to reimburse expenses of the Class A shares of
Emerging Markets Income, (effective July 1, 1994) Limited Term Bond,
Government Investment, Limited Term Tax-Exempt and Short-Intermediate Tax
Exempt to the extent that total expenses exceed, 1.50%, 0.90%,
0.95 %, .90% and .75%, respectively, of average net assets of Class A
shares.
FMR has entered into sub-advisory agreements on behalf of certain Funds.
Sub-advisors provide research and investment advice and research services
with respect to issuers based outside the United States and FMR may
grant sub-advisers investment management authority to buy and sell
securities if FMR believes it would be beneficial to a Fund.
Overseas, Emerging Markets Income, Equity Portfolio Growth,
Strategic Opportunities, Equity Portfolio Income , High Yield and
Limited Term Bond each have entered into sub-advisory agreements with
Fidelity Management & Research (U.K.) Inc. (FMR U.K.) , in London,
England, and Fidelity Management & Research (Far East) Inc. (FMR
Far East) , in Tokyo, Japan . FMR U.K. focuses primarily on
issuers based in Europe, and FMR Far East focuses primarily on
issuers based in Asia and the Pacific Basin. Under the sub-advisory
agreements, FMR, not the Fund, pay s FMR U.K. and FMR Far East fees
equal to 110% and 105%, respectively, of each sub-advisor's costs incurred
in connection with its sub-advisory agreement.
In addition, Overseas and Emerging Markets Income each have entered into a
sub-advisory agreement with Fidelity International Investment Advisors
(FIIA) , in Pembroke, Bermuda, and Fidelity Investments Japan Limited
(FIJ), in Tokyo, Japan. FIJ and FIIA are both Bermuda-based subsidiaries of
Fidelity International Limited (FIL). FIIA, in turn, has entered into a
sub-advisory agreement with its wholly owned subsidiary Fidelity
International Investment Advisors (U.K.) Limited (FIIAL U.K.) , in Kent,
England . Currently, FIIAL U.K. focuses on issuers based in
countries other than the United States , including countries in
Europe, Asia, and the Pacific Basin. Under the sub-advisory agreement, FMR
pays FIIA 30% of its monthly management fee with respect to the average
market value of investments held by the Fund for which FIJ and
FIIA , respectively, have provided FMR with investment advice.
FIIA, in turn, pays FIIAL U.K. a fee equal to 110% of FIIAL U.K.'s costs
incurred in connection with providing investment advice and research
services. For providing investment management services, the subadvisers
are compensated as follows: (a) FMR pays FMR (U.K.), FMR Far East, FIJ and
FIIA 50% of its monthly management fee with respect to Emerging Markets
Income's average net assets managed by the sub-advisers on a discretionary
basis; and (b) FIIA pays FIIAL U.K.'s costs incurred in connection with
providing investment management services.
The Transfer Agent is paid fees based on the type, size and number of
accounts in Class A shares of a Fund and the number of transactions made by
Class A shareholders. The Transfer Agent has a sub-arrangement
with Fidelity Investments Institutional Operations Company (FIIOC), 82
Devonshire Street, Boston, Massachusetts 02109, an affiliate of FMR for
certain transfer dividend paying and shareholder services . The Transfer
Agent pays to FIIOC a portion of its fee for Class A accounts
for which FIIOC provides limited services, or its full fee for Class
A accounts that FIIOC maintains on its behalf.
The fees for pricing and bookkeeping services are based on a Fund's average
net assets, but must fall within a range of $45,000 to $750,000 per year.
Fidelity Service Co. (Service), 82 Devonshire Street, Boston, Massachusetts
02109, an affiliate of FMR, calculates each Fund's daily Class A
share price, and maintains its general accounting records (with the
exception of High Income Municipal and Limited Term Tax-Exempt, see below).
For those Funds which can engage in securities lending, Service also
administers its securities lending program. For the most recent fiscal
year , each Fund's fees for pricing and bookkeeping services
(including related out-of-pocket expenses) amounted to: $57,711 (Overseas);
$234,813 (Equity Portfolio Growth); $513,950 (Growth Opportunities);
$45,425 (Global Resources); $145,494 (Strategic Opportunities); $113,026
(Equity Portfolio Income); $410,561 (Income & Growth); $121,204 (High
Yield); $81,106 (Limited Term Bond); $46,457 (Government Investment); and
$143,813 (Short Fixed-Income).
For High Income Municipal, Limited Term Tax-Exempt and Short-Intermediate
Tax-Exempt, United Missouri Bank, N.A. (United Missouri), 1010 Grand
Avenue, Kansas City, Missouri 64106, acts as the custodian, transfer agent
for Class A shares and pricing and bookkeeping agent. United
Missouri has a sub-arrangement with the Transfer Agent for transfer agent
services and a sub-arrangement with Service for pricing and bookkeeping
services. For the most recent fiscal year ended, fees paid to Service
(including related out-of-pocket expenses) amounted to $157,559 (High
Income Municipal) and $45,724 (Limited Term Tax-Exempt). All of the fees
are paid to the Transfer Agent and Service by United Missouri, which is
reimbursed by the Funds for such payments.
20.DISTRIBUTION AND SERVICE PLANS. The Board of Trustees of each Trust has
adopted a Distribution and Service Plan (the Plans) on behalf of each
Fund's Class A shares, pursuant to Rule 12b-1 under the 1940 Act (the
Rule). The Rule provides in substance that a mutual fund may not engage
directly or indirectly in financing any activity that is intended primarily
to result in the sale of shares of a fund except pursuant to a plan adopted
by the fund under the Rule. The Boards of Trustees have adopted the Plans
to allow Class A shares and FMR to incur certain expenses that might be
considered to constitute direct or indirect payment by Class A
shares of distribution expenses.
Under each Plan, Class A shares are authorized to pay Distributors a
monthly distribution fee as compensation for its services and expenses in
connection with the distribution of Class A shares of the Fund. The
Class A shares of e ach Fund pay Distributors a distribution fee at an
annual percentage of average net assets of Class A shares of
that Fund determined as of the close of business on each day
throughout the month. The Class A shares of Overseas, Growth Opportunities,
Global Resources, Strategic Opportunities, and Income & Growth each pay
a distribution fee of .65% of their respective average net
assets . The Class A shares of Equity Portfolio Growth and Equity
Portfolio Income each pay a distribution fee of .65% of their
respective average net assets (the Board can approve a maximum rate of
.75%). The Class A shares of Emerging Markets Income, High Yield, Limited
Term Bond, Government Investment, High Income Municipal and Limited Term
Tax-Exempt each pay a distribution fee of .25% of their
respective average net assets (the Board can approve a maximum rate of
.40%). The Class A shares of Short Fixed-Income and Short-Intermediate
Tax-Exempt each pay a distribution fee of .15% of their
respective average net assets . Up to the full amount of the
distribution fee paid by Class A of each Fund to Distributors may be
reallowed to investment professionals based upon the level of marketing and
distribution services provided.
Each Plan also provides that, through Distributors, FMR may make
payments from its management fee or other resources to investment
professionals in connection with the distribution of Class A shares.
Distributors will compensate investment professionals with a
fee of .25% if the assets on which the .25% is paid remain in Class A
shares of the Fidelity Advisor Funds for one uninterrupted year or the
investment professional will be required to refund this fee to
Distributors. The fee will not be paid on purchases through a bank or
bank-affiliated broker-dealers that qualifies for a Sales Charge
Waiver described on page 12. FMR may terminate the program at any time.
Class A shares of each Fund bear the f ees paid pursuant to
their Plan . Such fees are not borne by individual accounts, and
will comply with the restrictions imposed by the NASD rule
regarding asset based sales charges . Distribution fees
will reduce the net investment income and total return of a Fund's Class A
shares.
Investment professionals who provide enhanced inquiry, order entry and
sales facilities in connection with transactions in Class A shares by their
clients may receive an administrative fee up to the maximum applicable
sales charge described in "Sales Charges and Investment Professional
Concessions," on page . In addition, Distributors may , at its
expense, provide promotional incentives such as sales contests and
luxury trips to investment professionals who support the sale of
shares of the Funds. In some instances, these incentives will be
offered only to certain types of investment professionals, such as
bank-affiliated or non-bank affiliated broker-dealers, or to investment
professionals whose representatives provide services in connection with the
sale or expected sale of significant amounts of shares.
The Glass-Steagall Act generally prohibits federally and state chartered or
supervised banks from engaging in the business of underwriting, selling or
distributing securities. Although the scope of this prohibition under the
Glass-Steagall Act has not been fully defined, in Distributors' opinion it
should not prohibit banks from being paid for shareholder servicing and
recordkeeping. If, because of changes in law or regulation, or because of
new interpretations of existing law, a bank or a Fund were prevented from
continuing these arrangements, it is expected that the Board would make
other arrangements for these services and that shareholders would not
suffer adverse financial consequences. In addition, state securities laws
on this issue may differ from the interpretations of federal law expressed
herein, and banks and other financial institutions may be required to
register as dealers pursuant to state law.
VALUATION
A Fund's shares are valued at NAV. NAV for Class A shares of each Fund
is determined by adding Class A's pro rata share of the value of
all security holdings and other assets of the Fund, deducting Class A's
pro rata share of the liabilities of the Fund, deducting the
liabilities allocated to Class A and then dividing the result by the
n umber of Class A shares of the Fund outstanding.
NAV normally is calculated as of the close of business of the NYSE
(normally 4:00 p.m. Eastern time). The Funds are open for business and NAV
is calculated each day the NYSE is open for trading. Fund securities and
other assets are valued primarily on the basis of market quotations
furnished by pricing services, or if quotations are not available, by a
method that the Board of Trustees believes accurately reflects fair value.
Foreign securities are valued based on quotations from the primary market
in which they are traded and are converted from the local currency into
U.S. dollars using current exchange rates.
PERFORMANCE
Each Fund's performance may be quoted in advertising in terms of
total return. All performance information is historical and is not intended
to indicate future performance. Share price and total return fluctuate in
response to market conditions and other factors, and the value of a Fund's
shares when sold may be worth more or less than their original cost.
Excluding a sales charge from a performance calculation produces a higher
total return figure. TOTAL RETURN is the change in value of an investment
in a Fund over a given period, assuming reinvestment of any dividends and
capital gains. A CUMULATIVE TOTAL RETURN reflects actual performance over a
stated period of time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical
rate of return that, if achieved annually, would have produced the same
cumulative total return if performance had been constant over the entire
period. Average annual total returns smooth out variations in performance;
they are not the same as actual year-by-year results. When an average
annual return covers a period of less than one year, the calculation
assumes that performance will remain constant for the rest of the year.
Since this may or may not occur, the average annual returns should be
viewed as a hypothetical rather than actual performance figure. Average
annual and cumulative total returns usually will include the effect of
paying a Fund's maximum sales charge.
The Funds also may quote performance in terms of yield. YIELD refers to the
income generated by an investment in a Fund over a given period of time,
expressed as an annual percentage rate. Yields are calculated according to
a standard that is required for all stock and bond funds. High Income
Municipal , Limited Term Tax-Exempt and Short-Intermediate Tax-Exempt
may quote a TAX-EQUIVALENT YIELD, which shows the taxable yield an investor
would have to earn before taxes to equal the Fund's tax-free yield.
A tax-equivalent yield is calculated by dividing a Fund's yield by the
result of one minus a stated federal or state tax rate. Because yield
calculations differ from other accounting methods, the quoted yield may not
equal the income actually paid to shareholders. This difference may be
significant for funds whose investments are denominated in foreign
currencies. In calculating yield, the Funds may from time to time use a
security's coupon rate instead of its yield to maturity in order to reflect
the risk premium on that security. This practice will have the effect of
reducing a Fund's yield.
For additional performance information, please contact your investment
professional or Distributors for a free Annual Report and SAI.
PORTFOLIO TRANSACTIONS
FMR uses various brokerage firms to carry out each Fund's equity security
transactions. Fixed-income securities are generally traded in the
over-the-counter market through broker-dealers. A broker-dealer is a
securities firm or bank which makes a market for securities by offering to
buy at one price and sell at a slightly higher price. The difference is
known as a spread. Foreign securities are normally traded in foreign
countries since the best available market for foreign securities is often
on foreign markets. In transactions on foreign stock exchanges, brokers'
commissions are generally fixed and are often higher than in the U.S.,
where commissions are negotiated. Since FMR, directly or through affiliated
sub-advisers, places a large number of transactions, including those of
Fidelity's other funds, the Funds pay lower commissions than those paid by
individual investors, and broker-dealers are willing to work with the Funds
on a more favorable spread.
The Funds have authorized FMR to allocate transactions to some
broker-dealers who help distribute the Fund's shares or the shares of
Fidelity's other funds to the extent permitted by law, and on an agency
basis to Fidelity Brokerage Services, Inc. (FBSI) and Fidelity Brokerage
Services Ltd. (FBSL), affiliates of FMR. FMR will make such allocations if
commissions are comparable to those charged by non- affiliated qualified
broker-dealers for similar services.
FMR may also allocate brokerage transactions to a Fund's custodian, acting
as a broker-dealer, or other broker-dealers, so long as transaction quality
and commission rates are comparable to those of other broker-dealers, where
the broker-dealer will allocate a portion of the commissions paid toward
payment of a Fund's expenses. These expenses currently include transfer
agent fees and custodian fees.
Higher commissions may be paid to those firms that provide research,
valuation and other services to the extent permitted by law. FMR also is
authorized to allocate brokerage transactions to FBSI in order to secure
from FBSI research services produced by third party, independent entities.
FMR may use this research information in managing each Fund's assets, as
well as assets of other clients.
When consistent with its investment objective, each Fixed-Income fund may
engage in short-term trading. Also, a security may be sold and another of
comparable quality simultaneously purchased to take advantage of what FMR
believes to be a temporary disparity in the normal yield relationship of
the two securities.
The frequency of portfolio transactions - the turnover rate - will vary
from year to year depending on market conditions. Each Fund's turnover rate
for the most recent fiscal year ended was: 42% (Overseas); 160% (Equity
Portfolio Growth); 69% (Growth Opportunities); 208% (Global Resources);
183% (Strategic Opportunities); 120% (Equity Portfolio Income); 200%
(Income & Growth); 79% (High Yield); 59% (Limited Term Bond); 333%
(Government Investment); 58% (Short Fixed Income); 27% (High Income
Municipal); and 46% (Limited Term Tax-Exempt). The annualized portfolio
turnover rates of Emerging Market Income and Short-Intermediate Tax-Exempt
are not expected to exceed 200% and 75%, respectively, for their first
fiscal periods ending December 31, 1994 and November 30, 1994,
respectively.
Because a high portfolio turnover rate increases transaction costs
and may increase taxable capital gains, FMR carefully weighs the
anticipated benefits of short-term investing against these consequences.
THE TRUSTS AND THE FIDELITY ORGANIZATION
Each Trust is an open-end management investment company. Each Trust
was established by a separate Declaration of Trust as a Massachusetts
business trust on each date as follows: June 24, 1983, Fidelity Advisor
Series I; April 24, 1986, Fidelity Advisor Series II; May 17, 1982,
Fidelity Advisor Series III; May 6, 1983, Fidelity Advisor Series IV; April
24, 1986, Fidelity Advisor Series V; June 1, 1983, Fidelity Advisor Series
VI; March 21, 1980, Fidelity Advisor Series VII; and September 23, 1983,
Fidelity Advisor Series VIII. Each Trust has its own Board of Trustees that
supervises Fund activities and reviews the Fund s' contractual
arrangements with companies that provide the Funds with services. As
Massachusetts business trusts, the Trusts are not required to hold annual
shareholder meetings, although special meetings may be called for a class
of shares, a Fund or the Trust as a whole for purposes such as electing or
removing Trustees, changing fundamental investment policies or limitations
or approving a management contract or plan of distribution. As a
shareholder, you receive one vote for each share and fractional votes for
fractional shares of the Fund you own. For shareholders of Equity Portfolio
Income the number of votes to which you are entitled is based on the dollar
value of your investment. Separate votes are taken by each class of shares,
or each Fund if a matter affects just that class of shares or Fund,
respectively. There is a remote possibility that one Fund might become
liable for any misstatement in the p rospectus about another Fund.
Each class of shares is offered through a separate prospectus.
CLASS B. Fidelity Advisor Emerging Markets Income Fund, Fidelity Advisor
Strategic Opportunities Fund, Fidelity Advisor Equity Portfolio Income,
Fidelity Advisor High Yield Fund, Fidelity Advisor Limited Term Bond Fund,
Fidelity Advisor Government Investment Fund, Fidelity Advisor High Income
Municipal Fund, and Fidelity Advisor Limited Term Tax-Exempt Fund each
offer a class of shares with a contingent deferred sales charge to
retail investors who engage an investment professional for investment
advice ( Class B shares). Class B shares of each Fund are
subject to an annual distribution fee of .75% of their respective
average net assets, an annual service fee of .25% of their
respective average net assets and a contingent deferred sales charge
upon redemption within five years of purchase, which decreases from a
maximum of 4% to 0%. At the end of six years , Class B shares of a
Fund automatically convert to Class A shares of the same Fund .
The initial and subsequent investment minimums for Class B shares
are identical to those for Class A shares . Class B shares of a
Fidelity Advisor Fund may be exchanged only for Class B shares of other
Fidelity Advisor Funds or Class B shares of Daily Money Fund: U.S.
Treasury Portfolio. Transfer agent and shareholder services for Class B
shares of Fidelity Advisor Emerging Markets Income Fund, Fidelity
Advisor Strategic Opportunities Fund, Fidelity Advisor Equity Portfolio
Income, Fidelity Advisor High Yield Fund, Fidelity Advisor Limited Term
Bond Fund and Fidelity Advisor Government Investment Fund are performed by
FIIOC ; and for Class B shares of Fidelity Advisor High Income
Municipal Fund and Fidelity Advisor Limited Term Tax-Exempt Fund are
performed by United Missouri Bank . For the current fiscal year, total
operating expenses for Class B shares are estimated to be as follows:
2.25%, after reimbursement, for Fidelity Advisor Emerging Markets Income
Fund; 1.67% for Fidelity Advisor High Income Municipal Fund; 1.86% for
Fidelity Advisor High Yield Fund; 1.70% , after reimbursement, for
Fidelity Advisor Government Investment Fund; 2.12% for Fidelity Advisor
Equity Portfolio Income; 1.92% for Fidelity Advisor Strategic Opportunities
Fund; 1.65%, after reimbursement, for Fidelity Advisor Limited Term Bond
Fund; and 1.65%, after reimbursement, for Fidelity Advisor Limited Term
Tax-Exempt Fund. Investment professionals may receive different levels of
compensation with respect to one particular class of shares over another
class of shares in the Funds.
INSTITUTIONAL SHARES. Fidelity Advisor Equity Portfolio Growth, Fidelity
Advisor Equity Portfolio Income, Fidelity Advisor Limited Term Bond Fund
and Fidelity Advisor Limited Term Tax-Exempt Fund each offers shares to
institutional and retail investors. Shares offered to institutional
investors (Institutional shares) are offered continuously at NAV to (I)
banks and trust institutions investing for their own accounts or for
accounts of their trust customers, (II) plan sponsors meeting the ERISA
definition of fiduciary, (III) government entities or authorities and (IV)
corporations with at least $100 million in annual revenues. The initial and
subsequent investment minimums for Institutional shares are $100,000 and
$2,500, respectively. The minimum account balance is $40,000. Institutional
shares of one fund may be exchanged for Institutional shares of another
Fidelity Advisor Fund. Transfer agent and shareholder services for
Institutional shares are performed by FIIOC. For the fiscal year ended
November 30, 1993, total operating expenses for Institutional shares as a
percent of average net assets were as follows: .94% for Fidelity Advisor
Equity Portfolio Growth, .79% for Fidelity Advisor Equity Portfolio Income,
.64% for Fidelity Advisor Limited Term Bond and .65% for Fidelity Advisor
Limited Term Tax-Exempt. Institutional Shares have Distribution and Service
Plans that do not provide for payment of a separate distribution fee;
rather the Plans recognize that FMR may use its management fee and other
resources to pay expenses for distribution-related activities and may make
payments to investment professionals that provide shareholder support
services or sell Institutional shares. Institutional shares also do not
bear a shareholder service fee. Investment professionals currently do not
receive compensation in connection with distribution and/or shareholder
servicing of Institutional shares.
Strategic Opportunities offers a class of shares with a maximum 4.75%
front-end sales charge to current holders of such shares (Initial Shares).
New investors may not purchase Initial Shares. Current shareholders may
make additional investments in Initial Shares of $250 or more. The minimum
account balance for Initial Shares is $1,000. Reduced sales charges apply
to purchases of $50,000 or more of Initial Shares. An investor in Initial
Shares also may qualify for a reduction of the sales charge under the
Rights of Accumulation or Letter of Intent programs. Sales charges on
Initial Shares are waived for certain groups of investors. Transfer agent
and shareholders services for Initial Shares are performed by Service. For
the fiscal year ended September 30, 1993, total operating expenses as a
percentage of net asset value for Initial Shares were .89%.
Strategic Opportunities offers three classes of shares, Initial Shares,
Class A shares and Class B shares. Class A shares are offered through
this prospectus. Initial Shares and Class B shares are described above and
offered through separate prospectuses. Investment performance will be
measured separately for Initial Shares, Class A shares and Class B shares,
and the least of the three results obtained will be used in calculating the
performance adjustment to the management fee paid by Strategic
Opportunities.
Fidelity Investments is one of the largest investment management
organizations in the U.S. and has its principal business address at 82
Devonshire Street, Boston, MA 02109. It includes a number of different
companies that provide a variety of financial services and products. The
Trusts employ various Fidelity companies to perform certain activities
required to operate the Funds.
Fidelity Management & Research Company is the original Fidelity company
founded in 1946. It provides a number of mutual funds and other clients
with investment research and portfolio management services. It maintains a
large staff of experienced investment personnel and a full complement of
related support facilities. As of April 30, 1994 FMR advised funds
having approximately 1 6 million shareholder accounts with a total
value of more than $225 billion. Fidelity Distributors Corp. distributes
shares for the Fidelity funds.
FMR Corp. is the parent company for the Fidelity companies. Through
ownership of voting common stock, Edward C. Johnson 3d (President and a
Trustee of the Trust), Johnson family members, and various trusts for the
benefit of Johnson family members form a controlling group with respect to
FMR Corp.
Peter J. Allegrini is manager of Advisor High Income Municipal, which he
has managed since February 1992. Mr. Allegrini also manages Spartan
Connecticut Municipal High Yield, Michigan Tax-Free High Yield and Ohio
Tax-Free High Yield. Mr. Allegrini joined Fidelity in 1982.
Robert K. Citrone is manager of Advisor Emerging Market Income. He also
manages Fidelity New Markets Income Fund, which he has managed since May
1993 and serves as strategist for Fidelity's emerging market fixed-income
investments. Mr. Citrone joined Fidelity in 1990.
Bettina E. Doulton has been manager of Advisor Equity Portfolio Income
since August 1993, and VIP Equity-Income since July 1993. Previously, she
managed Select Automotive Portfolio and assisted on Equity-Income Portfolio
and Magellan(Registered trademark). Ms. Doulton also served as an analyst
following the domestic and European automotive and tire manufacturing
industry as well as the gaming and lodging industry. She joined Fidelity in
1985.
Margaret L. Eagle is vice president and manager of Advisor High Yield,
which she has managed since it began in January 1987. Ms. Eagle also
manages several pension fund accounts. Previously, she managed Spartan High
Income, and High Income (now Capital & Income). She also managed the
bond portion of Puritan(Registered trademark). Ms. Eagle joined Fidelity in
1980.
Daniel R. Frank is vice president and manager of Advisor Strategic
Opportunities which he has managed since December 1983. Previously, he was
an assistant to Peter Lynch on Magellan. Mr. Frank joined Fidelity in 1979.
Michael S. Gray is vice president and manager of Advisor Limited Term Bond
which he has managed since August 1987. Mr. Gray also manages Investment
Grade Bond, Spartan Investment Grade Bond, and Intermediate Bond. Mr. Gray
joined Fidelity in 1982.
Robert E. Haber is vice president and manager of Advisor Income &
Growth, which he has managed since January 1987. Mr. Haber also manages
Balanced and co-manages Global Balanced. Previously, he managed Convertible
Securities. Mr. Haber joined Fidelity in 1985.
John (Jack) F. Haley Jr. is vice president and manager of Advisor Limited
Term Tax-Exempt, which he has managed since September 1985. Mr.
Haley also manages California Tax-Free Insured, California Tax-Free High
Yield, and Spartan California Municipal High Yield. Mr. Haley joined
Fidelity in 1981.
John R. Hickling is manager of Advisor Overseas, which he has managed since
February 1993. Mr. Hickling also manages Japan, Overseas and VIP:
Overseas. Previously he managed Emerging Markets, Europe and Pacific Basin.
Mr. Hickling joined Fidelity in 1982.
Curtis Hollingsworth is vice president and manager of Advisor Government
Investment, which he has managed since January 1992. Mr. Hollingsworth also
manages Short-Intermediate Government, Government Securities, Institutional
Short-Intermediate Government, Spartan Limited Maturity Government Bond,
Spartan Long-Term Government Bond and Spartan Short-Intermediate
Government. He joined Fidelity in 1983.
Malcolm W. MacNaught is vice president and manager of Advisor Global
Resources, which he has managed since November 1988. Mr. MacNaught also
manages Select Precious Metals and Minerals and Select American Gold.
Previously, he managed Fidelity Fund and Convertable Securities. Mr.
MacNaught joined Fidelity in 1968.
David Murphy is manager of Advisor Short-Intermediate Tax-Exempt Fund
which he has managed since March 1994 . He also manages Limited Term
Municipals, Spartan Intermediate Municipal and Spartan New Jersey Municipal
High Yield. Before joining Fidelity in 1989, he managed municipal bond
funds at Scudder, Stevens & Clark.
Robert E. Stansky is vice president and manager of Advisor Equity Portfolio
Growth, which he has managed since April 1987. Mr. Stansky also manages
Growth Company. Previously, he managed Emerging Growth and Select Defense
and Aerospace. Mr. Stansky joined Fidelity in 1983.
Donald G. Taylor is vice president and manager of Advisor Short
Fixed-Income, which he has managed since September 1989. Mr. Taylor also
manages Short-Term Bond, Spartan Short-Term Income , and VIP II:
Investment Grade Bond. In addition, he manages Income Plus for Fidelity
International and serves as an assistant on Asset Manager: Income.
Previously, he managed Corporate Trust, Qualified Dividend, VIP: Zero
Coupon Bond and Utilities Income. Mr. Taylor joined Fidelity in 1986.
George A. Vanderheiden is vice president and manager of Advisor Growth
Opportunities, which he has managed since November 1987. Mr. Vanderheiden
also manages Destiny I and Destiny II. He is a managing director of FMR
Corp., Leader of the Growth Group, and joined Fidelity in 1971.
APPENDIX
The following paragraphs provide a brief description of securities in which
the Funds may invest and transactions they may make . T he Funds are
not limited by this discussion, however, and may purchase other
types of securities securities and enter into other types of
transactions if they are consistent with the Funds' investment objectives
and policies.
DELAYED-DELIVERY TRANSACTIONS. Securities may be bought and sold on a
when-issued or delayed-delivery basis, with payment and delivery taking
place at a future date. The market value of securities purchased in this
way may change before the delivery date which could increase fluctuations
in a Fund's yield. Ordinarily, a Fund will not earn interest on securities
purchased until they are delivered.
EQUITY SECURITIES include common stocks, preferred stocks, convertible
securities, and warrants. While FMR believes that these types of
investments in emerging markets present the possibility for significant
capital appreciation over the long-term, they also entail a high degree of
risk. The prices of emerging market equities can fluctuate dramatically in
response to company, market, economic, or political news.
FOREIGN CURRENCIES. The value of investments and the value of dividends and
interest earned may be significantly affected by changes in currency
exchange rates. Some foreign currency values may be volatile, and there is
the possibility of governmental controls on currency exchange or
governmental intervention in currency markets, which could adversely affect
a fund. Although FMR may attempt to manage currency exchange rate risks,
there is no assurance that FMR will do so at an appropriate time or that
FMR will be able to predict exchange rates accurately. For example, if FMR
increases a fund's exposure to a foreign currency, and that currency's
value subsequently falls, FMR's currency management may result in increased
losses to the Fund. Similarly, if FMR hedges the Fund's exposure to a
foreign currency, and that Currency's value rises, the Fund will lose the
opportunity to participate in the currency's appreciation.
CURRENCY MANAGEMENT. The relative performance of foreign currencies is an
important factor in a Fund's performance. FMR may manage a Fund's exposure
to various currencies to take advantage of different yield, risk, and
return characteristics that different currencies can provide for U.S.
investors.
To manage exposure to currency fluctuations, the Fund may enter into
currency exchange contracts (agreements to exchange one currency for
another at a future date) or currency swap agreements, buy and sell options
and futures contracts relating to foreign currencies, and purchase
securities indexed to foreign currencies. A Fund will use currency exchange
contracts in the normal course of business to lock in an exchange rate in
connection with purchases and sales of securities denominated in foreign
currencies. Other currency management strategies allow FMR to hedge
portfolio securities, to shift investment exposure from one currency to
another, or to attempt to profit from anticipated declines in the value of
a foreign currency relative to the U.S. dollar. There is no limitation on
the amount of a Fund's assets that may be committed to currency management
strategies.
FOREIGN INVESTMENTS involve additional risks. Foreign securities and
securities denominated in or indexed to foreign currencies may be affected
by the strength of foreign currencies relative to the U.S. dollar, or by
political or economic developments in foreign countries. Foreign companies
may not be subject to accounting standards or governmental supervision
comparable to U.S. companies, and there may be less public information
about their operations. In addition to the political and economic
factors that can affect foreign securities, a governmental issuer may be
unwilling to repay principal and interest when due, and may require that
the conditions for payment be renegotiated. These factors could make
foreign investments, especially those in developing countries, more
volatile. FMR considers these factors in making investments for the
Funds.
A Fund may enter into currency exchange contracts (agreements to exchange
one currency for another at a future date) to manage currency risks and to
facilitate transactions in foreign securities. Although currency forward
contracts can be used to protect the Fund from adverse exchange rate
changes, they involve a risk of loss if FMR fails to predict foreign
currency values correctly.
ILLIQUID INVESTMENTS. Under the supervision of the Board of Trustees, FMR
determines the liquidity of each Fund's investments. The absence of a
trading market can make it difficult to ascertain a market value for
illiquid investments. Disposing of illiquid investments may involve
time-consuming negotiation and legal expenses, and it may be difficult or
impossible for a Fund to sell them promptly at an acceptable price.
INDEXED SECURITIES. Indexed securities values are linked to currencies,
interest rates, commodities, indices, or other financial indicators. Most
indexed securities are short to intermediate term fixed-income securities
whose values at maturity or interest rates rise or fall according to the
change in one or more specified underlying instruments. Indexed securities
may be positively or negatively indexed (i.e., their value may increase or
decrease if the underlying instrument appreciates), and may have return
characteristics similar to direct investments in the underlying instrument
or to one or more options on the underlying instrument. Indexed securities
may be more volatile than the underlying instrument itself.
INTERFUND BORROWING PROGRAM. Interfund loans and borrowings normally will
extend overnight, but can have a maximum duration of seven days. A Fund
will lend through the program only when the returns are higher than those
available at the same time from other short-term instruments (such as
repurchase agreements), and will borrow through the program only when the
costs are equal to or lower than the cost of bank loans. Each Fund will not
lend more than 5% (Equity Funds) or 7.5% (Fixed-Income Funds) of its assets
to other funds, and will not borrow through the program if, after doing so,
total outstanding borrowings would exceed 15% of total assets. Loans may be
called on one day's notice, and a Fund may have to borrow from a bank at a
higher interest rate if an interfund loan is called or not renewed. Any
delay in repayment to a lending fund could result in a lost investment
opportunity or additional borrowing costs.
LOANS AND OTHER DIRECT DEBT INSTRUMENTS are interests in amounts owed by a
corporate, governmental or other borrower to another party. They may
represent amounts owed to lenders or lending syndicates (loans and loan
participations), to suppliers of goods or services (trade claims or other
receivables), or to other parties. Direct debt instruments involve the risk
of loss in case of default or insolvency of the borrower and may offer less
legal protection to a Fund in the event of fraud or misrepresentation. In
addition, loan participations involve a risk of insolvency of the lending
bank or other financial intermediary. Direct debt instruments may also
include standby financing commitments that obligate a Fund to supply
additional cash to the borrower on demand.
LOWER-QUALITY DEBT SECURITIES are those rated Ba or lower by Moody's or BB
or lower by S&P that have poor protection against default in the
payment of principal and interest or may be in default. These securities
are often considered to be speculative and involve greater risk of loss or
price changes due to changes in the issuer's capacity to pay. The market
prices of lower-rated debt securities may fluctuate more than those of
higher-rated debt securities, and may decline significantly in periods of
general economic difficulty, which may follow periods of rising interest
rates. See "Debt Obligations" on page .
SOVEREIGN DEBT OBLIGATIONS debt instruments issued or guaranteed by foreign
governments or their agencies, including debt of Latin American nations or
other developing countries. Sovereign debt may be in the form of
conventional securities or other types of debt instruments such as loans or
loan participations. Sovereign debt of developing countries may involve a
high degree of risk, and may be in default or present the risk of default.
Governmental entities responsible for repayment of the debt may be unable
or unwilling to repay principal and interest when due, and may require
renegotiation or rescheduling of debt payments. In addition, prospects for
repayment of principal and interest may depend on political as well as
economic factors.
MORTGAGE-BACKED SECURITIES are issued by government entities and
non-government entities such as banks, mortgage lenders, or other financial
institutions.
A mortgage-backed security may be an obligation of the issuer backed by a
mortgage or pool of mortgages or a direct interest in an underlying pool of
mortgages. Some mortgage-backed securities, such as collateralized mortgage
obligations (CMOs), make payments of both principal and interest at a
variety of intervals; others make semiannual interest payments at a
predetermined rate and repay principal at maturity (like a typical bond).
Mortgage-backed securities are based on different types of mortgages
including those on commercial real estate or residential properties. Other
types of mortgage-backed securities will likely be developed in the future,
and a Fund may invest in them if FMR determines they are consistent with a
Fund's investment objective and policies.
The value of mortgage-backed securities may change due to shifts in the
market's perception of issuers. In addition, regulatory or tax changes may
adversely affect the mortgage securities market as a whole. Non-government
mortgage-backed securities may offer higher yields than those issued by
government entities, but also may be subject to greater price changes than
government issues. Mortgage-backed securities are subject to prepayment
risk. Prepayment, which occurs when unscheduled or early payments are made
on the underlying mortgages, may shorten the effective maturities of these
securities and may lower their total returns.
STRIPPED MORTGAGE-BACKED SECURITIES are created when a U.S. government
agency or a financial institution separates the interest and principal
components of a mortgage-backed security and sells them as individual
securities. The holder of the "principal-only" security (PO) receives the
principal payments made by the underlying mortgage-backed security, while
the holder of the "interest-only" security (IO) receives interest payments
from the same underlying security. The prices of stripped mortgage-backed
securities may be particularly affected by changes in interest rates. As
interest rates fall, prepayment rates tend to increase, which tends to
reduce prices of IOs and increase prices of POs. Rising interest rates can
have the opposite effect.
ASSET-BACKED SECURITIES represent interests in pools of consumer loans
(generally unrelated to mortgage loans) and most often are structured as
pass-through securities. Interest and principal payments ultimately depend
on payment of the underlying loans by individuals, although the securities
may be supported by letters of credit or other credit enhancements. The
value of asset-backed securities may also depend on the creditworthiness of
the servicing agent for the loan pool, the originator of the loans, or the
financial institution providing the credit enhancement.
A Fund may purchase units of beneficial interest in pools of purchase
contracts, financing leases, and sales agreements entered into by
municipalities. These municipal obligations may be created when a
municipality enters into an installment purchase contract or lease with a
vendor and may be secured by the assets purchased or leased by the
municipality. However, except in very limited circumstances, there will be
no recourse against the vendor if the municipality stops making payments.
The market for tax-exempt asset-backed securities is still relatively new.
These obligations are likely to involve unscheduled prepayments of
principal, which may lower total returns .
OPTIONS AND FUTURES CONTRACTS are bought and sold to manage a Fund's
exposure to changing interest rates, security prices, and currency exchange
rates. Some options and futures strategies, including selling futures,
buying puts, and writing calls, tend to hedge a Fund's investment against
price fluctuations. Other strategies, including buying futures, writing
puts, and buying calls, tend to increase market exposure. Options and
futures may be combined with each other or with forward contracts in order
to adjust the risk and return characteristics of the overall strategy. A
Fund may invest in options and futures based on any type of security,
index, or currency, including options and futures traded on foreign
exchanges and options not traded on exchanges.
Options and futures can be volatile investments and involve certain risks.
If FMR applies a hedge at an inappropriate time or judges market conditions
incorrectly, options and futures strategies may lower a Fund's return. A
Fund could also experience losses if the prices of its options and futures
positions were poorly correlated with its other investments, or if it could
not close out its positions because of an illiquid secondary market.
Options and futures do not pay interest, but may produce taxable capital
gains.
Each Fund will not hedge more than 25% of its total assets by selling
futures, buying puts, and writing calls under normal conditions. In
addition each Fund will not buy futures or write puts whose underlying
value exceeds 25% of its total assets, and will not buy calls with a value
exceeding 5% of its total assets.
REAL ESTATE BACKED SECURITIES. Real estate industry companies may include
among others: real estate investment trusts; brokers or real estate
developers; and companies with substantial real estate holdings, such as
paper and lumber producers and hotel and entertainment companies. Companies
engaged in the real estate industry may be subject to certain risks
including: declines in the value of real estate, risks related to general
and local conditions, overbuilding and increased competition, increases in
property taxes and operating expenses, and variations in rental income.
REPURCHASE AGREEMENTS AND SECURITIES LOANS. In a repurchase agreement, a
Fund buys a security at one price and simultaneously agrees to sell it back
at a higher price. A Fund may also make securities loans to broker-dealers
and institutional investors, including FBSI. In the event of the bankruptcy
of the other party to either a repurchase agreement or a securities loan, a
Fund could experience delays in recovering its cash or the securities it
lent. To the extent that, in the meantime, the value of the securities
purchased had decreased or the value of the securities lent had increased,
a Fund could experience a loss. In all cases, FMR must find the
creditworthiness of the other party to the transaction satisfactory.
FOREIGN REPURCHASE AGREEMENTS may be less well secured than U.S. repurchase
agreements, and may be denominated in foreign currencies. They also involve
greater risk of loss of the counterparty defaults. Some counterparties in
these transactions may be less creditworthy than those in U.S. markets.
RESTRICTED SECURITIES are securities which cannot be sold to the public
without registration under the Securities Act of 1933. Unless registered
for sale, these securities can only be sold in privately negotiated
transactions or pursuant to an exemption from registration.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a Fund
temporarily transfers possession of a portfolio instrument to another
party, such as a bank or broker-dealer, in return for cash. At the same
time, the Fund agrees to repurchase the instrument at an agreed-upon price
and time. A Fund expects that it will engage in reverse repurchase
agreements for temporary purposes such as to fund redemptions. Reverse
repurchase agreements may increase the risk of fluctuation in the market
value of a Fund's assets or in its yield.
SHORT SALES. If a Fund enters into short sales with respect to stocks
underlying its convertible security holdings, the transaction may help to
hedge against the effect of stock price declines, but may result in losses
if a convertible security's price does not track the price of its
underlying equity. Under normal conditions convertible securities hedged
with short sales are not currently expected to exceed 15% of a Fund's total
assets.
SWAP AGREEMENTS. As one way of managing its exposure to different types of
investments, a Fund may enter into interest rate swaps, currency swaps, and
other types of swap agreements such as caps, collars, and floors. In a
typical interest rate swap, one party agrees to make regular payments equal
to a floating interest rate times a "notional principal amount," in return
for payments equal to a fixed rate times the same amount, for a specified
period of time. If a swap agreement provides for payments in different
currencies, the parties might agree to exchange the notional principal
amount as well. Swaps may also depend on other prices or rates, such as the
value of an index or mortgage prepayment rates.
In a typical cap or floor agreement, one party agrees to make payments only
under specified circumstances, usually in return for payment of a fee by
the other party. For example, the buyer of an interest rate cap obtains the
right to receive payments to the extent that a specified interest rate
exceeds an agreed-upon level, while the seller of an interest rate floor is
obligated to make payments to the extent that a specified interest rate
falls below an agreed-upon level. An interest rate collar combines elements
of buying a cap and selling a floor.
Swap agreements will tend to shift a Fund's investment exposure from one
type of investment to another. For example, if a Fund agreed to exchange
payments in dollars for payments in foreign currency, the swap agreement
would tend to decrease the Fund's exposure to U.S. interest rates and
increase its exposure to foreign currency and interest rates. Caps and
floors have an effect similar to buying or writing options. Depending on
how they are used, swap agreements may increase or decrease the overall
volatility of a Fund's investments and its share price and yield.
Swap agreements are sophisticated hedging instruments that typically
involve a small investment of cash relative to the magnitude of risks
assumed. As a result, swaps can be highly volatile and may have a
considerable impact on a Fund's performance. Swap agreements are subject to
risks related to the counterparty's ability to perform, and may decline in
value if the counterparty's creditworthiness deteriorates. A Fund may also
suffer losses if it is unable to terminate outstanding swap agreements or
reduce its exposure through offsetting transactions.
VARIABLE OR FLOATING RATE OBLIGATIONS, including certain participation
interests in municipal obligations, have interest rate adjustment formulas
that help to stabilize their market values. Many variable and floating rate
instruments also carry demand features that permit the fund to sell them at
par value plus accrued interest on short notice.
WARRANTS entitle the holder to buy equity securities at a specific price
for a specific period of time. Warrants tend to be more volatile than their
underlying securities. Also, the value of the warrant does not necessarily
change with the value of the underlying securities and a warrant ceases to
have value if it is not exercised prior to the expiration date.
ZERO COUPON BONDS do not make interest payments; instead, they are sold at
a deep discount from their face value and are redeemed at face value when
they mature. Because zero coupon bonds do not pay current income, their
prices can be very volatile when interest rates change. In calculating its
daily dividend, a Fund takes into account as income a portion of the
difference between a zero coupon bond's purchase price and its face value.
A broker-dealer creates a DERIVATIVE ZERO by separating the interest and
principal components of a U.S. Treasury security and selling them as two
individual securities. CATS (Certificates of Accrual on Treasury
Securities), TIGRs (Treasury Investment Growth Receipts), and TRs (Treasury
Receipts) are examples of derivative zeros. Government Investment Fund has
been advised that the staff of the Division of Investment Management of the
SEC does not consider these instruments U.S. government securities as
defined by the 1940 Act. Therefore, Government Investment Fund will not
treat these obligations as U.S. government securities for purposes of the
65% portfolio composition test mentioned on page 21.
The Federal Reserve Bank creates STRIPS (Separate Trading of Registered
Interest and Principal of Securities) by separating the interest and
principal components of an outstanding U.S. Treasury bond and selling them
as individual securities. Bonds issued by the Resolution Funding
Corporation (REFCORP) and the Financing Corporation (FICO) can also be
separated in this fashion. ORIGINAL ISSUE ZEROS are zero coupon securities
originally issued by the U.S. government or a government agency.
DEBT OBLIGATIONS. The table below provides a summary of ratings assigned to
debt holdings (not including money market instruments) in Funds which have
the ability to invest over 5% in lower-rated debt securities. These figures
are dollar-weighted averages of month-end portfolio holdings during the
thirteen months ended September 30, 1993 (Strategic Opportunities), October
31, 1993 (Income & Growth, High Yield, Short Fixed-Income, and High
Income Municipal,) and November 30, 1993 (and Equity Portfolio Income),
presented as a percentage of total investments. These percentages are
historical and are not necessarily indicative of the quality of current or
future portfolio holdings, which may vary.
The dollar-weighted average of debt securities not rated by either Moody's
or S&P amounted to 0% (Equity Portfolio Growth), .89% (Strategic
Opportunities), .57% (Equity Portfolio Income), 6.72% (Income &
Growth), 18.74% (High Yield), 5.85% (Short Fixed-Income), and 25.23% (High
Income Municipal) of total investments. This may include securities rated
by other nationally recognized rating organizations, as well as unrated
securities. Unrated securities are not necessarily lower-quality
securities.
As of October 31, 1993, (Global Resources) and December 31, 1993
(Emerging Markets Income) had no investments below Baa/BBB.
MOODY'S RATING & PERCENTAGE OF INVESTMENTS
MOOD EQUITY STRATE EQUITY INCOME HIGH SHORT HIGH
Y'S PORTFOLI GIC PORTFOLIO & YIELD FIXED- INCOME
RATIN O OPPORT INCOME GROWTH INCOME MUNICI
G GROWTH UNITIES PAL

Aaa/A -- 15.99 1.02% 22.75% .02% 25.81% 27.39%
a/A %

Baa -- -- .77% .86% -- 34.74% 20.40%

Ba -- .18% 1.25% 6.09% 6.60% 12.76% 8.10%

B .07% .22% 1.27% 3.89% 34.26% 1.08% .63%

Caa -- 1.63 .06% .66% 9.09% -- --
%

Ca/C -- -- -- -- 4.50% -- --

S&P RATING & PERCENTAGE OF INVESTMENTS
S&AM EQUITY STRATE EQUITY INCOM HIGH SHORT HIGH
P;P PORTFO GIC PORTFO E YIELD FIXED INCOM
RATIN LIO OPPORT LIO & - E
G GROWT UNITIES INCOM GROWT INCO MUNICI
H E H ME PAL

AAA/A -- 15.99 1.03 21.9 .97% 27.08 29.05
A/A % % 8% % %

BBB -- -- .84% 2.03 1.09% 33.92 18.73
% % %

BB -- -- .98% 2.22 6.94% 7.55 4.37
% % %

B .07% .80% 1.35 2.51 33.28 1.13 1.75
% % % % %

CCC -- -- .15% .69% 7.62% .04%

CC/C -- -- -- --% 1.55%

D -- .89% .03% 5.58%

THE FOLLOWING DESCRIBES MUNICIPAL INSTRUMENTS:
MUNICIPAL SECURITIES include GENERAL OBLIGATION SECURITIES, which are
backed by the full taxing power of a municipality, and REVENUE SECURITIES,
which are backed by the revenues of a specific tax, project, or facility.
INDUSTRIAL REVENUE BONDS are a type of revenue bond backed by the credit
and security of a private issuer and may involve greater risk. PRIVATE
ACTIVITY MUNICIPAL SECURITIES, which may be subject to the federal
alternative minimum tax, include securities issued to finance housing
projects, student loans, and privately owned solid waste disposal
and water and sewage treatment facilities.
TAX AND REVENUE ANTICIPATION NOTES are issued by municipalities in
expectation of future tax or other revenues, and are payable from those
specific taxes or revenues. BOND ANTICIPATION NOTES normally provide
interim financing in advance of an issue of bonds or notes, the proceeds of
which are used to repay the anticipation notes. TAX-EXEMPT COMMERCIAL PAPER
is issued by municipalities to help finance short-term capital or operating
needs.
MUNICIPAL LEASE OBLIGATIONS are issued by a state or local government or
authority to acquire land and a wide variety of equipment and facilities.
These obligations typically are not fully backed by the municipality's
credit, and their interest may become taxable if the lease is assigned. If
funds are not appropriated for the following year's lease payments, the
lease may terminate, with the possibility of significant loss to a Fund.
CERTIFICATES OF PARTICIPATION in municipal lease obligations or installment
sales contracts entitle the holder to a proportionate interest in the
lease-purchase payments made.
RESOURCE RECOVERY BONDS are a type of revenue bond issued to build
facilities such as solid waste incinerators or waste-to-energy plants.
Typically, a private corporation will be involved, at least during the
construction phase, and the revenue stream will be secured by fees or rents
paid by municipalities for use of the facilities. The viability of a
resource recovery project, environmental protection regulations, and
project operator tax incentives may affect the value and credit quality of
resource recovery bonds.
A DEMAND FEATURE is a put that entitles the security holder to repayment of
the principal amount of the underlying security, upon notice at any time or
at specified intervals. A STANDBY COMMITMENT is a put that entitles the
security holder to same-day settlement at amortized cost plus accrued
interest.
Issuers or financial intermediaries who provide demand features or standby
commitments often support their ability to buy securities on demand by
obtaining LETTERS OF CREDIT (LOCS) or other guarantees from domestic or
foreign banks. LOCs also may be used as credit supports for other types of
municipal instruments. FMR may rely upon its evaluation of a bank's credit
in determining whether to purchase an instrument supported by an LOC. In
evaluating a foreign bank's credit, FMR will consider whether adequate
public information about the bank is available and whether the bank may be
subject to unfavorable political or economic developments, currency
controls, or other governmental restrictions that might affect the bank's
ability to honor its credit commitment.
INVERSE FLOATERS are instruments whose interest rates bear an inverse
relationship to the interest rate on another security or the value of an
index. Changes in the interest rate on the other security or index
inversely affect the residual interest rate paid on the inverse floater,
with the result that the inverse floater's price will be considerably more
volatile than that of a fixed-rate bond. For example, a municipal issuer
may decide to issue two variable rate instruments instead of a single
long-term, fixed-rate bond. The interest rate on one instrument reflects
short-term interest rates, while the interest rate on the other instrument
(the inverse floater) reflects the approximate rate the issuer would have
paid on a fixed-rate bond, multiplied by two, minus the interest rate paid
on the short-term instrument. Depending on market availability, the two
portions may be recombined to form a fixed-rate municipal bond. The market
for inverse floaters is relatively new.
REFUNDING CONTRACTS. A Fund may purchase securities on a when-issued basis
in connection with the refinancing of an issuer's outstanding indebtedness.
Refunding contracts require the issuer to sell and the Fund to buy refunded
municipal obligations at a stated price and yield on a settlement date that
may be several months or several years in the future.
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S CORPORATE BOND RATINGS:
AAA - Bonds rated Aaa are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as "gilt
edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective
elements are likely to change, such changes as can be visualized are most
unlikely to impair the fundamentally strong position of such issues.
AA - Bonds rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other
elements present which make the long-term risks appear somewhat larger than
in Aaa securities.
A - Bonds rated A possess many favorable investment attributes and are to
be considered as upper-medium-grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present
which suggest a susceptibility to impairment sometime in the future.
BAA - Bonds rated Baa are considered as medium-grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any
great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
BA - Bonds rated Ba are judged to have speculative elements. Their future
cannot be considered as well assured. Often the protection of interest and
principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B - Bonds rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or maintenance of
other terms of the contract over any long period of time may be small.
CAA - Bonds rated Caa are of poor standing. Such issues may be in default
or there may be present elements of danger with respect to principal or
interest.
CA - Bonds rated Ca represent obligations which are speculative in a high
degree. Such issues are often in default or have other marked
short-comings.
C - Bonds rated C are the lowest-rated class of bonds and issued so rated
can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
Moody's applies numerical modifiers, 1, 2, and 3, in each generic rating
classification from Aa through C in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its
generic rating category; the modifier 2 indicates a mid-range ranking; and
the modifier 3 indicates that the issue ranks in the lower end of its
generic rating category.
DESCRIPTION OF STANDARD & POOR'S CORPORATION'S CORPORATE BOND RATINGS:
AAA - Debt rated AAA has the highest rating assigned by Standard &
Poor's to a debt obligation. Capacity to pay interest and repay principal
is extremely strong.
AA - Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher-rated issues only in small degree.
A - Debt rated A has a strong capacity to pay interest and repay principal,
although it is somewhat more susceptible to the adverse effects of changes
in circumstances and economic conditions.
BBB - Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in higher-rated
categories.
BB - Debt rated BB has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions which could
lead to inadequate capacity to meet timely interest and principal payments.
B - Debt rated B has a greater vulnerability to default but currently has
the capacity to meet interest payments and principal repayments. Adverse
business, financial, or economic conditions will likely impair capacity or
willingness to pay interest and repay principal. The B rating category is
also used for debt subordinated to senior debt that is assigned an actual
or implied BB rating.
CCC - Debt rated CCC has a currently identifiable vulnerability to default,
and is dependent upon favorable business, financial, and economic
conditions to meet timely payment of interest and repayment of principal.
In the event of adverse business, financial, or economic conditions, it is
not likely to have the capacity to pay interest and repay principal.
CC - Debt rated CC is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC debt rating.
C - The rating C is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC debt rating. The C rating may be
used to cover a situation where a bankruptcy petition has been filed but
debt service payments are continued.
CI - The rating CI is reserved for income bonds on which no interest is
being paid.
D - Debt rated D is in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due even
if the applicable grace period has not expired, unless S&P believes
that such payments will be made during such grace period. The D rating will
also be used upon the filing of a bankruptcy petition if debt service
payments are jeopardized.
The ratings from AA to D may be modified by the addition of a plus or minus
to show relative standing within the major rating categories.

No dealer, sales representative or any other person has been authorized to
give any information or to make any representations, other than those
contained in this Prospectus and in the related SAIs, in connection with
the offer contained in this Prospectus. If given or made, such other
information or representations must not be relied upon as having been
authorized by the Fund or Distributors. This Prospectus and the related
SAIs do not constitute an offer by a Fund or by Distributors to sell or to
buy shares of a Fund to any person to whom it is unlawful to make such
offer.

FIDELITY ADVISOR FUNDS CLASS B
PROSPECTUS
82 DEVONSHIRE STREET
BOSTON, MASSACHUSETTS 02109
JUNE 30 , 1994
The Fidelity Advisor Funds (the Funds) offer investors a broad selection
o f portfolios.
INTERNATIONAL FUND:
FIDELITY ADVISOR EMERGING MARKETS INCOME FUND
EQUITY FUNDS:
FIDELITY ADVISOR STRATEGIC OPPORTUNITIES FUND
FIDELITY ADVISOR EQUITY PORTFOLIO INCOME
FIXED-INCOME FUNDS:
FIDELITY ADVISOR HIGH YIELD FUND
FIDELITY ADVISOR LIMITED TERM BOND FUND
FIDELITY ADVISOR GOVERNMENT INVESTMENT FUND
MUNICIPAL/TAX-EXEMPT FUNDS:
FIDELITY ADVISOR HIGH INCOME MUNICIPAL FUND
FIDELITY ADVISOR LIMITED TERM TAX-EXEMPT FUND

Fidelity Advisor High Yield Fund and Fidelity Advisor Government Investment
Fund are portfolios of Fidelity Advisor Series II. Fidelity Advisor Equity
Portfolio Income is a portfolio of Fidelity Advisor Series III. Fidelity
Advisor Limited Term Bond Fund is a portfolio of Fidelity Advisor Series
IV. Fidelity Advisor High Income Municipal Fund is a portfolio of Fidelity
Advisor Series V. Fidelity Advisor Limited Term Tax-Exempt Fund is a
portfolio of Fidelity Advisor Series VI. Fidelity Advisor Strategic
Opportunities Fund and Fidelity Advisor Emerging Markets Income Fund are
portfolios of Fidelity Advisor Series VIII. Each Fund sells two classes of
shares to retail investors: Class A shares and Class B shares. Class B
shares are offered through this prospectus. Class A shares are offered
through a separate prospectus.
FIDELITY ADVISOR EMERGING MARKETS INCOME FUND, FIDELITY ADVISOR HIGH
YIELD FUND AND FIDELITY ADVISOR HIGH INCOME MUNICIPAL FUND MAY INVEST
WITHOUT LIMITATION IN LOWER-QUALITY DEBT SECURITIES, SOMETIMES CALLED "JUNK
BONDS." INVESTORS SHOULD CONSIDER THAT THESE SECURITIES CARRY GREATER
RISKS, SUCH AS THE RISK OF DEFAULT, THAN OTHER DEBT SECURITIES. REFER TO
"INVESTMENT POLICIES AND RISKS" ON PAGE FOR FURTHER INFORMATION.
Please read this Prospectus before investing. It is designed to provide you
with information and help you decide if a Fund's goals match your own.
RETAIN THIS DOCUMENT FOR FUTURE REFERENCE.
A Statement of Additional Information (SAI) dated June 30 , 1994 has
been filed with the Securities and Exchange Commission (SEC) for each Fund
and each is incorporated herein by reference. SAIs and each Fund's Annual
Report are available free upon request from Fidelity Distributors
Corporation (Distributors), 82 Devonshire Street, Boston, MA 02109, or from
your investment professional.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE
NOT INSURED BY THE FDIC, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY,
AND ARE SUBJECT TO INVESTMENT RISK,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
(registered trademark)

TABLE OF CONTENTS PAGE
FINANCIAL HISTORY
Shareholder Transaction Expenses
FINANCIAL HIGHLIGHTS
INVESTMENT OBJECTIVES
INVESTMENT POLICIES AND RISKS
INVESTMENT LIMITATIONS
HOW TO BUY SHARES
Minimum Account Balance
INVESTOR SERVICES
Quantity Discounts
Combined Purchases
Rights of Accumulation
Letter of Intent
Fidelity Advisor Systematic Investment Program
SHAREHOLDER COMMUNICATIONS
HOW TO EXCHANGE
Fidelity Advisor Systematic Exchange Program
HOW TO SELL SHARES
Redemption Requests by Telephone
Redemption Requests in Writing
Reinstatement Privilege
Contingent Deferred Sales Charge
DISTRIBUTION OPTIONS
DISTRIBUTIONS AND TAXES
Distributions
Capital Gains
"Buying a Dividend"
Federal Taxes
Effect of Foreign Taxes
State and Local Taxes
Other Tax Information
FEES
Management and Other Services
Distribution and Service Plans
VALUATION
PERFORMANCE
PORTFOLIO TRANSACTIONS
THE TRUSTS AND THE FIDELITY ORGANIZATION
APPENDIX
FINANCIAL HISTORY
The purpose of the table below is to assist you in understanding the
various costs and expenses that an investor in Class B shares of each Fund
would bear directly or indirectly. This standard format was
developed for use by all mutual funds to help investors make
investment decisions. This expense information should be
considered along with other important information such as each Fund's
investment objective and past performance.
21.SHAREHOLDER TRANSACTION EXPENSES
Maximum Contingent Deferred Sales Charge
(as a percentage of redemption proceeds) 4.00%*
Sales Charge on Reinvested Distributions None
Exchange Fees None
* DECLINES FROM 4.00% TO 0.00% FOR CLASS B SHARES HELD UP TO A MAXIMUM OF 5
YEARS.
SHAREHOLDER TRANSACTION EXPENSES represent charges paid when you purchase,
sell or exchange Class B shares of a Fund. See "How to Buy Shares" and "How
to Sell Shares" on pages and , respectively.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ANNUAL OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)

INTERNATIONAL FUND: MANAGEM 12B-1 FEE OTHER TOTAL
ENT (INC LUDES EXPENSE OPERATING
FEE .25% S EXPENSES
SHAREHOLDER

SERVICE FEE)

Emerging Markets Income1 . 71 1.00 . 54 2.25
% % % * %

EQUITY FUNDS:

Strategic Opportunities .54 1.00 .38 1.92
% % % 1 %

Equity Portfolio Income .50 1.00 .62 2.12
% % % *1 %

FIXED-INCOME FUNDS:

High Yield .51 1.00 .35 1.86
% % % 1 %

Limited Term Bond . 42 1.00 . 23 1. 65
% % % *1 %

Government Investment . 46 1.00 . 24 1.70
% % % *1 %

MUNICIPAL/TAX-EXEMPT FUNDS:

High Income Municipal .42 1.00 .25 1.67
% % % 1 %

Limited Term Tax-Exempt . 42 1.00 . 23 1.65
%* % % *1 %

</TABLE>

* AFTER EXPENSE REDUCTIONS
1 ESTIMATED FOR FIRST FISCAL YEAR.
ANNUAL OPERATING EXPENSES are based on historical expenses for the most
recent fiscal year ended . Management fees are paid by each Fund to
Fidelity Management & Research Company (FMR) for managing its
investments and business affairs. Management fees for Strategic
Opportunities will vary based on performance. 12b-1 fees include a
distribution fee and a shareholder service fee. Distribution
f ees are paid by Class B shares of the Funds to Distributors for
services and expenses in connection with the distribution of Class B
shares. Shareholder service fees are paid by Class B shares of the Funds
to investment professionals for services and expenses incurred in
connection with providing personal service and/or maintenance of
shareholder accounts to Class B shareholders. Long-term shareholders
may pay more than the economic equivalent of the maximum front-end sales
charges permitted by the National Association of Securities Dealers, Inc.
(NASD) due to 12b-1 fees . The Funds incur other expenses for
maintaining shareholder records, furnishing shareholder statements and
reports, and custodial, legal and accounting services, registering a
Trust or Fund with federal and state regulatory authorities and other
miscellaneous services. FMR has voluntarily agreed to reimburse
Emerging Markets Income, Government Investment , Limited Term
Tax-Exempt and (effective July 1, 1994) Limited Term Bond to the
extent that total operating expenses for Class B shares (exclusive of
taxes, interest, brokerage commissions, and extraordinary expenses) are in
excess of an annual rate of 2.25%, 1.70%, 1.65% and 1.65%,
respectively, of average net assets. If reimbursements were not in effect,
the management fees, other expenses (including Distribution Fees and
Shareholder Service Fees ) and total operating expenses for Class B
shares would have been estimated to be .71%, 1.83%, and 2.54%
(Emerging Markets Income); .46%, 1.61%, and 2.07%, (Government Investment);
.42%, 1.69%, and 2.11% (Limited Term Tax-Exempt) ; and .42%, 1.56% and
1.98% (Limited Term Bond) . Please refer to the section "Fees," page .

<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C>
EXPENSE TABLE EXAMPLE:
You would pay the following expenses on a $1,000 investment in Class B shares of a Fund assuming a 5% annual return
and
either (1) redemption at the end of each time period or (2) no redemption at the end of each time period:

INTERNATIONAL FUND:
1 YEAR 3 YEARS 5 YEARS 10 YEARS (dagger)
(1)** (2) (1)** (2) (1)** (2) (1) (2)

</TABLE>

Emerging Markets Income1 $ $ $ 10 $ 70 -- -- -- --

63 23 0

EQUITY FUNDS:

Strategic Opportunities $ $ $ 90 $ 60 $ 11 $ 10 $ 20 $20

59 19 4 4 7 7

Equity Portfolio Income $ $ $ 96 $ 66 $ 12 $ 11 $ 2 2 $ 2 2

62 22 4 4 8 8

FIXED-INCOME FUNDS:

High Yield $ $ $ 88 $ 58 $ 11 $ 10 $ 1 8 $ 1 8

59 19 1 1 0 0

Limited Term Bond $ $ $ 8 2 $ 5 2 $ 1 0 $ 90 $ 15 $ 15

57 17 0 7 7

Government Investment $ $ $ 84 $ 54 $ 10 $ 92 $ 16 $ 16

57 17 2 3 3

MUNICIPAL/TAX-

EXEMPT FUNDS:

High Income Municipal $ $ $ 83 $ 53 $ 10 $ 91 $ 1 5 $ 1 5

57 17 1 9 9

Limited Term Tax-Exempt $ $ $ 82 $ 52 $ 10 $ 90 $ 1 5 $ 1 5

57 17 0 7 7

</TABLE>

** REFLECTS DEDUCTION OF APPLICABLE CONTINGENT DEFERRED SALES
CHARGE.
(dagger) REFLECTS CONVERSION TO CLASS A SHARES AFTER SIX YEARS.
The HYPOTHETICAL EXAMPLE illustrates the estimated expenses associated with
a $1,000 investment in Class B shares of each Fund over periods of one,
three, five and ten years, based on the expenses (after reimbursements, if
any) in the table above , an assumed annual return of 5% and
deduction of applicable contingent deferred sales charge (CDSC) in years 1,
3 and 5. A CDSC IS IMPOSED ONLY IF YOU REDEEM CLASS B SHARES WITHIN 5
YEARS. SEE "HOW TO SELL SHARES," PAGE , FOR INFORMATION ABOUT THE CDSC. THE
RETURN OF 5% AND ESTIMATED EXPENSES SHOULD NOT BE CONSIDERED INDICATIONS OF
ACTUAL OR EXPECTED CLASS B PERFORMANCE OR EXPENSES, BOTH OF WHICH
MAY VARY.
FINANCIAL HIGHLIGHTS
The tables that follow are included in each Fund's Annual Report and
have been audited by each Fund's independent accountant (except for
Emerging Markets Income). Their reports on the Financial Statements and
Financial Highlights are included in each Fund's Annual Report. The
Financial Statements and Financial Highlights are incorporated by reference
into each Fund's Statement of Additional Information. The Strategic
Opportunities table provides semiannual information and is unaudited. On or
about June 30, 1994, Class B shares of the Funds will be offered to retail
investors. The information in the tables regarding Class A shares and,
where appropriate, shares offered to institutional investors, does not
reflect Class B 12b-1 fees paid, and may not be representative of the
actual operational results of Class B shares.
FIDELITY ADVISOR EMERGING MARKETS INCOME FUND

<TABLE>
<CAPTION>
<S> <C>
March 10, 1994

(commencement
of

operations) to

May 31, 1994

(Unaudited)

SELECTED PER-SHARE DATA

Net asset value beginning of period $ 10.000

Income from Investment Operations

Not Investment income .086

Net realized and unrealized gain (loss) on investments .247

Total from investment operations .333

Less Distributions

From net investment income (.083)

Net asset value end of period $ 10.250

TOTAL RETURN (dagger) (double dagger) 3.36%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted) $ 7,119

Ratio of expenses to average net assets 1.50%*

Ratio of expenses to average net assets before voluntary expense reductions 2.60%*+

Ratio of net investment income to average net assets 3.83%*

Portfolio turnover rate 107%

</TABLE>

FIDELITY ADVISOR STRATEGIC OPPORTUNITIES FUND
August 20, 1986
Six Months (Commencement
Ended of Operations) to
March 31, 1994 Years Ended September 30, September 30,
(Unaudited) 1993 1992(dagger)(dagger) 1991 1990 1989 1988
1987 1986
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 22.52 $ 19.53 $ 21.38 $ 17.21
$ 19.55 $ 15.53 $ 19.06 $ 16.71 $ 17.81
Income from Investment Operations
Net investment income (.24) .33 .61 .66 .70 .50 .42 .46
.08(s diamond)
Net realized and unrealized gain (loss) on investments (.69)
4.44 .58 4.26 (2.49) 4.08 (1.80) 2.95 (1.18)
Total from investment operations (.93) 4.77 1.19 4.92 (1.79)
4.58 (1.38) 3.41 (1.10)
Less Distributions
From net investment income (.43) (.57) (.62) (.75) (.55)
(.56) (.24) (.09) --
From net realized gain on investments (1.71) (1.21) (2.42) -
-- -- (1.91) (.97) --
Total distributions (2.14) (1.78) (3.04) (.75) (.55) (.56)
(2.15) (1.06) -
Net asset value, end of period $ 19.45 $ 22.52 $ 19.53 $ 21.38 $
17.21 $ 19.55 $ 15.53 $ 19.06 $ 16.71
TOTAL RETURN (dagger)(double dagger) (4.73%) 26.33% 7.26%
29.51% (9.49)% 30.45% (4.98)% 21.28% (6.23)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 331,650 $ 269,833 $ 194,694 $
199,604 $ 172,083 $ 198,198 $ 191,454 $ 283,117 $ 22,141
Ratio of expenses to average net assets 1.88%* 1.57%++ 1.46% 1.56%
1.59% 1.51% 1.71% 1.67%+ 1.50%*+
Ratio of net investment income to average net assets 1.49%* 2.06% 3.22%
3.61% 3.70% 3.23% 3.10% 2.36% 2.77%*
Portfolio turnover rate 241%* 183% 211% 223% 114% 89% 160% 225% --

* ANNUALIZED
(dagger) TOTAL RETURN DOES NOT INCLUDE THE ONE TIME SALES CHARGE AND,
FOR PERIODS OF LESS THAN ONE YEAR, IS NOT ANNUALIZED.
(dagger)(dagger) AS OF OCTOBER 1, 1991, THE FUND DISCONTINUED THE USE OF
EQUALIZATION ACCOUNTING.
(double dagger) TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES
NOT BEEN REDUCED DURING THE PERIODS SHOWN.
+ EXPENSES WERE LIMITED TO A PERCENTAGE OF AVERAGE NET ASSETS IN
ACCORDANCE WITH A STATE EXPENSE LIMITATION.
++ INCLUDES REIMBURSEMENT OF $.03 PER SHARE FROM FMR FOR ADJUSTMENTS TO
PRIOR PERIODS' FEES. IF THIS REIMBURSEMENT HAD NOT EXISTED THE RATIO OF
EXPENSES TO AVERAGE NET ASSETS WOULD HAVE BEEN 1.73%.
(s diamond) NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON
UNDISTRIBUTED NET INVESTMENT INCOME PER SHARE OF THE FUND AT AUGUST 20,
1986.
(h diamond) DURING THE PERIOD JULY 1, 1986 THROUGH OCTOBER 31, 1987, FMR
WAIVED .05% OF THE ANNUAL INDIVIDUAL FUND FEE OF .35%.
FIDELITY ADVISOR EQUITY PORTFOLIO INCOME
Equity Portfolio
Income - Class A Equity Portfolio Income - Institutional
Class
Year Period
Ended Ended
Nov. 30 , Nov. 30 , Years Ended November 30,
SELECTED PER-SHARE DATA 1993 1992** 1993 1992 1991 1990 1989 1988 1987 1986
1985 1984
Net asset value, beginning of period $ 12.86 $ 12.37 $ 12.88 $ 11.08 $
9.52 $ 12.27 $ 11.10 $ 10.93 $ 13.54 $ 11.95 $ 10.24 $ 10.49
Income from Investment Operations
Net investment income .33 .13 .39 .49 .63 # .69 .75 .75 .76
.78 .79 .72
Net realized and unrealized gain
(loss) on investments 1.97 .47 2.02 1.79 1.52 (2.42) 1.17
1.81 (1.53) 1.92 1.69 (.14)
Total from investment operations 2.30 .60 2.41 2.28 2.15 (1.73)
1.92 2.56 (.77) 2.70 2.48 .58
Less Distributions
From net investment income (.30) (.11) (.36) (.48) (.59) (.72)
(.75) (.74) (.70) (.77) (.77) (.74)
From net realized gain on investments - - - - - (.30) -
(1.65) (1.14) (.34) - (.09)
Total distributions (.30) (.11) (.36) (.48) (.59) (1.02) (.75)
(2.39) (1.84) (1.11) (.77) (.83)
Net asset value, end of period $ 14.86 $ 12.86 $ 14.93 $ 12.88 $ 11.08 $
9.52 $ 12.27 $ 11.10 $ 10.93 $ 13.54 $ 11.95 $ 10.24
TOTAL RETURN (dagger)(double dagger) 18.03% 4.88% 18.90% 20.91%
22.97% (14.90)% 17.58% 26.99% (7.28)% 23.48% 24.86% 6.20%
RATIOS AND SUPPLEMENTAL DATA
Net Assets, end of period (000 omitted) $ 42,326 $ 1,462 $ 191,138 $
139,391 $ 168,590 $ 253,049 $ 463,696 $ 436,753 $ 443,603 $ 544,269 $
349,262 $ 89,364
Ratio of expenses to average net assets 1.77% 1.55%* .79%## .71%(h
diamond) .67%(h diamond) .61%(h diamond) .55%(h diamond) .55%(h diamond)
.54%(h diamond) .61% .63% .77%
Ratio of expenses to average net assets
before expense reductions 1.77% 1.55%* .80%## .79%(h diamond) .77%(h
diamond) .71%(h diamond) .65%(h diamond) .65%(h diamond) .61%(h diamond)
.61% .63% .77%
Ratio of net investment income
to average net assets 2.02% 3.39%* 3.00% 3.77% 5.66% 6.11% 6.09%
6.86% 5.58% 6.06% 7.36% 7.86%
Portfolio turnover rate 120% 51% 120% 51% 91% 103% 93% 78% 137%
107% 110%(dagger)(dagger)(dagger) 121%
FIDELITY ADVISOR HIGH YIELD FUND
January 5, 1987
(Commencement of
Years Ended October 31, Operations) to
1993 1992 1991 1990 1989 1988 October 31, 1987

SELECTED PER-SHARE DATA

Net asset value, beginning of period $ 11.070 $ 10.120 $ 8.150 $ 8.970 $ 9.860 $ 9.090 $ 10.000

Income from Investment Operations

Net investment income .980 1.146 1.115 1.144 1.237 1.165 .878

Net realized and unrealized gain (loss) on 1.153 .975 1.948 (.820) (.890) .770 (.910)

investments

Total from investment operations 2.133 2.121 3.063 .324 .347 1.935 (.032)

Less Distributions

From net investment income (.963) (1.171) (1.093) (1.144) (1.237) (1.165) (.878)

From net realized gain on investments (.230) - - - - - -

Total distributions (1.193) (1.171) (1.093) (1.144) (1.237) (1.165) (.878)

Net asset value, end of period $ 12.010 $ 11.070 $ 10.120 $ 8.150 $ 8.970 $ 9.860 $ 9.090

TOTAL RETURN (dagger)(double dagger) 20.47% 21.96% 39.67% 3.58% 3.34% 22.14% (.81)%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted) $ 485,559 $ 136,316 $ 38,681 $ 15,134 $ 13,315 $ 11,900 $ 9,077

Ratio of expenses to average net assets 1.11% 1.10% 1.10% 1.10% 1.10% 1.10% 1.24%*

Ratio of expenses to average net assets 1.11% 1.16% 1.76% 2.04% 2.17% 2.22% 2.25%*(dagger)

before voluntary (dagger)

expense limitation

Ratio of net investment income to average 8.09% 9.95% 12.20% 12.72% 12.98% 11.86% 10.74%*

net assets

Portfolio turnover rate 79% 100% 103% 90% 131% 135% 166%*

</TABLE>

* ANNUALIZED.
** INITIAL OFFERING OF CLASS A SHARES, SEPTEMBER 10, 1992.
(dagger) TOTAL RETURN DOES NOT INCLUDE THE ONE TIME SALES CHARGE
AND , FOR PERIODS OF LESS THAN ONE YEAR IS NOT ANNUALIZED.
(dagger)(dagger)(dagger) IN JULY 1985, THE SEC ADOPTED REVISIONS TO
EXISTING RULES WITH RESPECT TO THE CALCULATION OF THE PORTFOLIO TURNOVER
RATE. THE REVISED RULES REQUIRE THE INCLUSION IN THE CALCULATION OF
LONG-TERM U.S. GOVERNMENT SECURITIES WHICH, PRIOR TO THESE REVISIONS, WERE
EXCLUDED FROM THE CALCULATION.
(double dagger) TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
(h diamond) EFFECTIVE APRIL 1, 1987 TO SEPTEMBER 10, 1992 , FMR
REDUCED .10% OF THE ANNUAL MANAGEMENT FEE OF .50%.
(dagger)(dagger) EXPENSES WERE LIMITED TO A PERCENTAGE OF AVERAGE
NET ASSETS IN ACCORDANCE WITH A STATE EXPENSE LIMITATION.
# INCLUDES $.04 PER-SHARE FROM FOREIGN TAXES RECOVERED.
## FMR HAS DIRECTED CERTAIN PORTFOLIO TRADES TO BROKERS WHO PAID A PORTION
OF THE FUND'S EXPENSES.
FIDELITY ADVISOR LIMITED TERM BOND FUND
Limited Term
Bond Fund - Class A Limited Term Bond Fund -
Institutional Class

Year Period February 2, 1984
Ended Ended (Commencement
Nov. 30, Nov. 30 , Years Ended November 30, of Operations) to
SELECTED PER-SHARE DATA 1993 1992** 1993 1992 1991 1990 1989 1988 1987 1986
1985 November 30, 1984
Net asset value, beginning
of period $ 10.640 $ 10.960 $ 10.640 $ 10.550 $ 10.140 $ 10.410 $ 10.180
$ 10.250 $ 11.240 $ 10.550 $ 9.960 $ 10.000
Income from Investment Operations
Net investment income .785 .170 .832 .840 .884 .901 .937 .944
.953 1.026 1.053 .897
Net realized and unrealized gain (loss)
on investments .511 (.320)# .531 .102 .411 (.270) .230 (.070)
(.770) .710 .590 (.040)
Total from investment operations 1.296 (.150) 1.363 .942 1.295 .631
1.167 .874 .183 1.736 1.643 .857
Less Distributions
From net investment income (.796) (.170) (.843) (.852) (.885)
(.901) (.937) (.944) (.953) (1.026) (1.053) (.897)
From net realized gain on investments - -- -- -- -- -- -- --
(.220) (.020) -- --
Total distributions (.796) (.170) (.843) (.852) (.885) (.901)
(.937) (.944) (1.173) (1.046) (1.053) (.897)
Net asset value, end of period $ 11.140 $ 10.640 $ 11.160 $ 10.640 $
10.550 $ 10.140 $ 10.410 $ 10.180 $ 10.250 $ 11.240 $ 10.550 $ 9.960
TOTAL RETURN (dagger)(double dagger) 12.50% (1.37)% 13.17% 9.21%
13.35% 6.46% 12.03% 8.81% 1.78% 17.04% 17.40% 9.33%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 59,184 $ 2,583 $ 183,790 $
160,156 $ 327,756 $ 356,564 $ 426,832 $ 418,929 $ 407,228 $ 418,632 $
253,913 $ 15,192
Ratio of expenses to average net assets 1.23% .82%* .64% .57% .57%
.58% .54% .54% .53% .53% .65% 1.50%*(dagger)(dagger)
Ratio of net investment income to
average net assets 6.81% 7.67%* 7.41% 7.96% 8.59% 8.90% 9.16%
9.16% 9.03% 9.22% 10.29% 11.01%*
Portfolio turnover rate 59% 7% 59% 7% 60% 59% 87% 48% 92% 59%
88%(dagger)(dagger)(dagger) 12%*
FIDELITY ADVISOR GOVERNMENT INVESTMENT FUND
January 7, 1987
(Commencement of
Years Ended October 31, Operations) to
1993 1992 1991 1990 1989 1988 October 31, 1987

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA

Net asset value, beginning of period $ 9.730 $ 9.590 $ 9.150 $ 9.310 $ 9.260 $ 9.200 $ 10.000

Income from Investment Operations

Net investment income .567 .666 .700 .735 .773 .769 .614

Net realized and unrealized gain (loss) .601 .125 .419 (.160) .050 .060 (.800)
on investments

Total from investment operations 1.168 .791 1.119 .575 .823 .829 (.186)

Less Distributions

From net investment income (.558) (.651) (.679) (.735) (.773) (.769) (.614)

From net realized gain on investments (.200) - - - - - -

Total distributions (.758) (.651) (.679) (.735) (.773) (.769) (.614)

Net asset value, end of period $ 10.140 $ 9.730 $ 9.590 $ 9.150 $ 9.310 $ 9.260 $ 9.200

TOTAL RETURN (dagger)(double dagger) 12.53% 8.49% 12.65% 6.48% 9.37% 9.34% (1.84)%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted) $ 69,876 $ 23,281 $ 13,058 $ 9,822 $ 8,203 $ 6,590 $ 4,584

Ratio of expenses to average net assets .68% 1.10% 1.10% 1.10% 1.10% 1.10% 1.29%*

Ratio of expenses to average net assets 1.32% 1.79% 2.46% 2.74% 2.75% 2.25% 2.36%*
before voluntary
expense limitation

Ratio of net investment income to average 6.11% 6.98% 7.47% 8.04% 8.45% 8.30% 8.12%*
net assets

Portfolio turnover rate 333% 315% 54% 31% 42% 44% 32%*

</TABLE>

* ANNUALIZED.
** INITIAL OFFERING OF CLASS A SHARES, SEPTEMBER 10, 1992.
(dagger) TOTAL RETURN DOES NOT INCLUDE THE ONE TIME SALES CHARGE
AND , FOR PERIODS OF LESS THAN ONE YEAR , IS NOT ANNUALIZED.
(dagger)(dagger) EXPENSES WERE LIMITED TO A PERCENTAGE OF AVERAGE NET
ASSETS IN ACCORDANCE WITH A STATE EXPENSE LIMITATION.
(dagger)(dagger)(dagger) IN JULY 1985, THE SEC ADOPTED REVISIONS TO
EXISTING RULES WITH RESPECT TO THE CALCULATION OF THE PORTFOLIO TURNOVER
RATE. THE REVISED RULES REQUIRE THE INCLUSION IN THE CALCULATION OF
LONG-TERM U.S. GOVERNMENT SECURITIES WHICH, PRIOR TO THESE REVISIONS, WERE
EXCLUDED FROM THE CALCULATION.
(double dagger) TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
# THE AMOUNT SHOWN IN THIS CAPTION, WHILE DETERMINABLE BY THE SUMMATION OF
AMOUNTS COMPUTED DAILY AS SHARES WERE SOLD OR REPURCHASED, IS ALSO THE
BALANCING FIGURE DERIVED FROM THE OTHER FIGURES IN THE STATEMENT AND HAS
BEEN SO COMPUTED. THE AMOUNT SHOWN FROM THE PERIOD ENDED NOVEMBER 30, 1992
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD DOES NOT ACCORD WITH THE NET
REALIZED AND UNREALIZED GAIN ON INVESTMENTS FOR THE PERIOD BECAUSE OF THE
TIMING OF SALES AND REPURCHASES OF THE FUND SHARES IN RELATION TO
FLUCTUATING MARKET VALUES OF THE INVESTMENTS OF THE FUND.
FIDELITY ADVISOR HIGH INCOME MUNICIPAL FUND
September 16, 1987
(Commencement of
Years Ended October 31, Operations) to
SELECTED PER-SHARE DATA 1993 1992 1991 1990 1989 1988 October
31, 1987

Net asset value, beginning of period $ 11.650 $ 11.410 $ 10.870 $ 10.820 $ 10.460 $ 9.850 $ 10.000

Income from Investment Operations

Net interest income .710 .774 .803 .811 .800 .750 .092

Net realized and unrealized gain (loss) 1.100 .250 .660 .150 .410 .610 (.150)

on investments

Total from investment operations 1.810 1.024 1.463 .961 1.210 1.360 (.058)

Less Distributions

From net interest income (.710) (.774) (.803) (.811) (.800) (.750) (.092)

From net realized gain on investments (.030) (.010) (.120) (.100) (.050) - -

Total distributions (.740) (.784) (.923) (.911) (.850) (.750) (.092)

Net asset value, end of period $ 12.720 $ 11.650 $ 11.410 $ 10.870 $ 10.820 $ 10.460 $ 9.850

TOTAL RETURN (dagger)(double dagger) 15.95% 9.21% 14.02% 9.28% 12.05% 14.22% (.58)%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted) $ 497,575 $ 156,659 $ 67,135 $ 22,702 $ 6,669 $ 3,290 $ 1,275

Ratio of expenses to average net assets .92% .90% .90% .90% .90% .89% .80%*

Ratio of expenses to average net assets .92% .96% 1.24% 2.09% 2.75% 2.25% 2.25%*

before voluntary (h diamond) (h diamond)(h diamond)

expense limitation

Ratio of net interest income to average net 5.59% 6.59% 7.08% 7.37% 7.60% 7.33% 7.24%*

assets

Portfolio turnover rate 27% 13% 10% 11% 27% 19% -%

</TABLE>

FIDELITY ADVISOR LIMITED TERM TAX-EXEMPT FUND
Limited Term
Tax-Exempt Fund - Class A Limited Term Tax-Exempt Fund -
Institutional
September 19, 1985
Year Period (Commencement
Ended Ended of Operations) to
Nov. 30 Nov. 30 Years Ended November 30, November 30,
SELECTED PER-SHARE DATA 1993 1992** 1993 1992 1991 1990 1989 1988 1987
1986 1985
Net asset value, beginning of period $ 11.080 $ 11.010 $ 11.080 $ 10.800 $
10.640 $ 10.610 $ 10.520 $ 10.380 $ 10.990 $ 10.280 $ 10.000
Income from Investment Operations
Net interest income .508 .131 .536 .666 .682 .689 .674 .650 .641
.671 .130
Net realized and unrealized gain (loss) on investments .260 .070 .260
.280 .160 .030 .090 .140 (.540) .760 .280
Total from investment operations .768 .201 .796 .946 .842 .719
.764 .790 .101 1.431 .410
Less Distributions
From net interest income (.508) (.131) (.536) (.666) (.682) (.689)
(.674) (.650) (.641) (.671) (.130)
From net realized gain on investments (.880) -- (.880) -- -- --
- -- -- (.070) (.050) --
Total distributions (1.388) (.131) (1.416) (.666) (.682) (.689)
(.674) (.650) (.711) (.721) (.130)
Net asset value, end of period $ 10.460 $ 11.080 $ 10.460 $ 11.080 $
10.800 $ 10.640 $ 10.610 $ 10.520 $ 10.380 $ 10.990 $ 10.280
TOTAL RETURN (dagger)(double dagger) 7.72% 1.37% 8.01% 9.01% 8.15%
7.04% 7.50% 7.77% .97% 14.39% 4.12%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 39,800 $ 1,752 $ 15,076 $ 28,428
$ 100,294 $ 111,506 $ 121,418 $ 132,443 $ 162,857 $ 161,045 $ 94,391
Ratio of expenses to average net assets .90% 1.04%* .65% .66% .61%
.62% .65% .63% .59% .58% .69%*
Ratio of expenses to average net assets before voluntary
expense limitation 1.36% 1.06%* .83% .67% .61% .62% .65% .63%
.59% .58% .69%*
Ratio of net investment income to average net assets 4.76% 5.65%* 5.01%
6.05% 6.40% 6.53% 6.45% 6.20% 6.01% 6.29% 6.33%*
Portfolio turnover rate 46% 36% 46% 36% 20% 32% 31% 24% 43% 34%
103%*

* ANNUALIZED.
** INITIAL OFFERING OF CLASS A SHARES, SEPTEMBER 15, 1992.
(dagger) TOTAL RETURN DOES NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR IS NOT ANNUALIZED.
(double dagger) THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES
NOT BEEN REDUCED DURING THE PERIODS SHOWN.
(h diamond) EXPENSES WERE LIMITED TO A PERCENTAGE OF AVERAGE NET ASSETS IN
ACCORDANCE WITH A STATE EXPENSE LIMITATION.
INVESTMENT OBJECTIVES
INTERNATIONAL FUND:
FIDELITY ADVISOR EMERGING MARKETS INCOME FUND seeks a high level of current
income by investing primarily in debt securities and other instruments of
issuers in emerging markets. As a secondary objective, the Fund seeks
capital appreciation.
EQUITY FUNDS :
FIDELITY ADVISOR STRATEGIC OPPORTUNITIES FUND seeks capital appreciation by
investing primarily in securities of companies believed by FMR to involve a
"special situation."
FIDELITY ADVISOR EQUITY PORTFOLIO INCOME seeks a yield from dividend and
interest income which exceeds the composite dividend yield on securities
comprising the Standard & Poor's Composite Index of 500 Stocks (S&P
500).
FIXED-INCOME FUNDS:
FIDELITY ADVISOR HIGH YIELD FUND seeks a combination of a high level of
income and the potential for capital gains by investing in a diversified
portfolio consisting primarily of high-yielding, fixed-income and zero
coupon securities, such as bonds, debentures and notes, convertible
securities and preferred stocks.
FIDELITY ADVISOR LIMITED TERM BOND FUND seeks to provide a high rate of
income through investment in high and upper-medium grade fixed-income
obligations.
FIDELITY ADVISOR GOVERNMENT INVESTMENT FUND seeks a high level of current
income by investing primarily in obligations issued or guaranteed by the
U.S. government or any of its agencies or instrumentalities.
MUNICIPAL/TAX-EXEMPT FUNDS:
FIDELITY ADVISOR HIGH INCOME MUNICIPAL FUND seeks to provide a high current
yield by investing in a diversified portfolio of municipal obligations
whose interest is not included in gross income for purposes of calculating
federal income tax. The Fund reserves the right to invest up to 100% of
its assets in municipal obligations subject to the federal alternative
minimum tax.
FIDELITY ADVISOR LIMITED TERM TAX-EXEMPT FUND seeks the highest level of
income exempt from federal income taxes that can be obtained consistent
with the preservation of capital, from a diversified portfolio of high
quality or upper-medium quality municipal obligations.
The investment objective of each Fund is fundamental and can only be
changed by vote of a majority of the outstanding shares of the Fund.
Except as otherwise noted, the investment limitations and policies of
Strategic Opportunities, Limited Term Bond, Government Investment, High
Income Municipal, and Limited Term Tax-Exempt are fundamental and may not
be changed without shareholder approval. Except for the investment
limitations and policies identified as fundamental, the limitations and
policies of Emerging Markets Income, Equity Portfolio Income, and High
Yield are not fundamental. Non-fundamental investment limitations and
policies may be changed without shareholder approval.
The yield, return and potential price changes of each Fund depend on the
quality and maturity of the obligations in its portfolio, as well as on
market conditions. Risks vary based on the type of fund in which you are
investing. As is the case with any investment in securities, invest ment
in the Funds involve certain risks and, therefore, a Fund may not always
achieve its investment objective.
INVESTMENT POLICIES AND RISKS
Further information relating to the types of securities in which each Fund
may invest and the investment policies of each Fund in general are set
forth in the Appendix to this Prospectus and in each Fund's SAI.
INTERNATIONAL FUND: Risks associated with international investing include
currency values, the political and regulatory environment, and overall
economic factors in the countries in which a Fund invests. Investing in an
international fund may be more suitable for aggressive investors who want
to achieve an extra level of diversification in their investment portfolio
by participating in opportunities available in developing countries. FMR
determines where an issuer is located by looking at such factors as its
country of organization, the primary trading market for its securities, and
the location of its assets, personnel, sales, and earnings.
FIDELITY ADVISOR EMERGING MARKETS INCOME FUND will, under normal
conditions, invest at least 65% of its total assets in debt securities and
other instruments of issuers in emerging markets. For this purpose,
"emerging markets" will include any countries (I) having an "emerging stock
market" as defined by the International Finance Corporation; (II) with low-
to middle-income economies according to the International Bank for
Reconstruction and Development (the World Bank); or (III) listed in World
Bank publications as "developing." Currently, the countries NOT included in
these categories are Australia, Austria, Belgium, Canada, Denmark, Finland,
France, Germany, Ireland, Italy, Japan, the Netherlands, New Zealand,
Norway, Spain, Sweden, Switzerland, the United Kingdom, and the U.S. For
purposes of this 65% policy, issuers whose principal activities are in
countries with emerging markets include issuers: (1) organized under the
laws of, (2) whose securities have their primary trading market in, (3)
deriving at least 50% of their revenues or profits from goods sold,
investments made, or services performed in, or (4) having at least 50% of
their assets located in, a country with an emerging market.
The Fund emphasizes countries with relatively low gross national product
per capita compared to the world's major economies, and with the potential
for rapid economic growth. Many investments in emerging markets can be
considered speculative, and therefore may offer higher income potential
than the developed markets of the world . Investments in emerging markets
can involve significant risks and the Fund is designed for aggressive
investors.
Under current market conditions, FMR expects that emerging market
opportunities will be found mainly within Latin America, and to a lesser
extent in Africa, Asia and emerging European nations. FMR will actively
manage the allocation of the Fund's investments among countries, geographic
regions, and currency denominations in an attempt to achieve current income
and capital appreciation. In doing so, FMR will also consider such factors
as prospects for relative economic growth among countries, regions, or
geographic areas, expected levels of inflation, government policies
influencing business conditions, current and anticipated interest rates,
and the outlook for currency relationships. Although the Fund will normally
invest in at least three different countries, it is not limited to any
particular country or currency, and may invest substantially all of its
assets in any one country.
The Fund may invest in all types of fixed-income instruments, including
corporate debt securities, sovereign debt instruments issued by governments
or governmental entities, and all types of domestic and foreign money
market instruments. The Fund may invest in lower- quality , high
yielding U.S. c orporate debt securities (sometimes referred to as
"junk bonds"). Many emerging market securities are of below
investment-grade quality, and at any one time substantially all of the
Fund's assets may be invested in securities that are of poor quality or are
in default. Lower quality debt securities are those rated below Baa by
Moody's or BBB by S&P.
Other investments the Fund may make or engage in include options and
futures contracts, swap agreements, indexed securities, loans and other
direct debt instruments, repurchase agreements and securities loans,
foreign repurchase agreements, illiquid investments, restricted securities,
mortgage-backed securities, asset-backed securities,
delayed-delivery transactions , and interfund borrowing. The Fund
may also invest a portion of its assets in common and preferred stocks of
emerging markets issuers, debt securities of non-emerging market foreign
issuers and lower-quality debt securities of U.S. issuers. Although the
Fund may invest up to 35% of its total assets in these securities, FMR does
not currently anticipate that these investments will exceed approximately
20% of the Fund's total assets. Though common and preferred stocks and
convertible securities present the possibility for significant capital
appreciation over the long-term, they may fluctuate dramatically in the
short-term and entail a high degree of risk.
For cash management purposes, the Fund will ordinarily invest a portion of
its assets in high-quality, short-term debt securities and money market
instruments, including repurchase agreements and bank deposits denominated
in U.S. or foreign currencies. When, in FMR's judgment, market conditions
warrant, the Fund can make substantial temporary defensive investments in
money market instruments, U.S. government securities, or investment-grade
obligations of U.S. companies.
CONSIDERATIONS OF INVESTING IN THE SHARES OF EMERGING MARKETS INCOME FUND:
International investing in general may involve greater risks than U.S.
investments. There is generally less publicly available information about
foreign issuers, and there may be less government regulation and
supervision of foreign stock exchanges, brokers, and listed companies.
There may be difficulty in enforcing legal rights outside the U.S. Foreign
companies generally are not subject to uniform accounting, auditing, and
financial reporting standards, practices, and requirements comparable to
those that apply to U.S. companies. Security trading practices abroad may
offer less protection to investors such as the Fund. Settlement of
transactions in some foreign markets may be delayed or may be less frequent
than in the U.S., which could affect the liquidity of the Fund.
Additionally, in some foreign countries, there is the possibility of
expropriation or confiscatory taxation; limitations on the removal of
securities, property, or other assets of the Fund; political or social
instability; or diplomatic developments which could affect U.S. investments
in foreign countries. FMR will take these factors into consideration in
managing the Fund's investments.
These risks may be intensified in the case of investments in emerging
markets or countries with limited or developing capital markets. Security
prices in emerging markets can be significantly more volatile than in more
developed nations, reflecting the greater uncertainties of investing in
less established markets and economies. In particular, countries with
emerging markets may have relatively unstable governments; present the risk
of nationalization of businesses, restrictions on foreign ownership, or
prohibitions of repatriation of assets; and may have less protection of
property rights than more developed countries. The economies of countries
with emerging markets may be predominantly based on only a few industries,
may be highly vulnerable to changes in local or global trade conditions,
and may suffer from extreme and volatile debt burdens or inflation rates.
Local securities markets may trade a small number of securities and may be
unable to respond effectively to increases in trading volume, potentially
making prompt liquidation of substantial holdings difficult or impossible
at times. Securities of issuers located in countries with emerging markets
may have limited marketability and may be subject to more abrupt or erratic
price movements.
By itself, the Fund does not constitute a balanced investment plan. The
Fund is designed for aggressive investors interested in the investment
opportunities and income potential offered by securities issued in emerging
markets. The value of the Fund's investments and the income they generate
will vary from day to day, generally reflecting changes in interest rates,
market conditions, and other political and economic news. The Fund's
performance will also depend on currency values, foreign economies, and
other factors relating to foreign investments. Because the Fund focuses on
emerging markets, it involves higher risks than U.S. bond investments.
Investors should be willing to assume a greater degree of investment risk
and should expect a higher level of volatility than is generally associated
with investing in more established markets. The Fund's yield and share
price will change based on changes in domestic or foreign interest rates,
the value of foreign currencies, and issuers' creditworthiness. In general,
bond prices rise when interest rates fall, and vice versa. The Fund's
share price, yield and total return fluctuate and your investment may be
worth more or less than your original cost when you redeem your shares.
The Fund is non-diversified, which means that it may invest a greater
portion of its assets in securities of a single issuer than would be the
case if it were diversified. As a result, changes in the financial
condition or market assessment of a single issuer could cause greater
fluctuation in the Fund's share value.
EQUITY FUNDS. Equity f unds invest in common stock and other equity
securities in search of growth or a combination of growth and income.
The share value of equity funds depends heavily on stock market
conditions in the U.S. and abroad, and can also be affected by changes in
interest rates or other economic conditions. Investments in e quity
f unds are more suitable for investors who take a long-term approach
to investing.
FIDELITY ADVISOR STRATEGIC OPPORTUNITIES FUND . As a
non-fundamental policy, the Fund normally will invest at least 65% of its
assets in companies involving a "special situation". The term "special
situation" refers to FMR's identification of an unusual, and possibly
non-repetitive development taking place in a company or group or companies
in an industry. A special situation may involve one or more of the
following characteristics:
(bullet) A technological advance or discovery, the offering of a new or
unique product or service, or changes in consumer demand or consumption
forecasts.
(bullet) Changes in the competitive outlook or growth potential of an
industry or a company within an industry, including changes in the scope or
nature of foreign competition or the development of an emerging industry.
(bullet) New or changed management, or material changes in management
policies or corporate structure.
(bullet) Significant economic or political occurrences abroad, including
changes in foreign or domestic import and tax laws or other regulations.
(bullet) Other events, including natural disasters, favorable litigation
settlements, or a major change in demographic patterns.
In seeking capital appreciation, the Fund also may invest in securities of
companies not involving a special situation, but which are companies with
valuable fixed assets and whose securities are believed by FMR to be
undervalued in relation to the companies' assets, earnings, or growth
potential.
FMR intends to invest primarily in common stocks and securities that are
convertible into common stocks; however, it also may invest in debt
securities of all types and quality if FMR believes that investing in these
securities will result in capital appreciation. As a non-fundamental
investment policy, the Fund may invest in lower -quality ,
high-yielding debt securities ( sometimes referred to as "junk
bonds") , although it intends to limit its investments in these
securities to 35% of its assets. The Fund also may invest in unrated
securities. The Fund may invest up to 30% of its assets in foreign
investments of all types and may enter into forward foreign currency
exchange contracts for the purpose of managing exchange rate risks. The
Fund may purchase or engage in indexed securities, illiquid instruments,
loans and other direct debt instruments, options and futures contracts,
repurchase agreements and securities loans, restricted securities, swap
agreements, warrants, and zero coupon bonds.
The Fund expects to be fully invested under most market conditions. The
Fund may make substantial temporary investments in high-quality debt
securities for defensive purposes when, in FMR's judgment, a more
conservative approach to investment is desirable.
An investment in the F und may be considered more speculative than an
investment in other funds that seek capital appreciation. There are
greater risks involved in investing in securities of smaller companies
rather than companies operating according to established patterns and
having longer operating histories. The Fund may invest in securities in
which other investors have not shown significant interest or confidence,
and which are subject to stock market fluctuations. Larger
well-established companies experiencing a special situation may involve, to
a certain extent, breaks with past experience, which may pose greater
risks. There are also greater risks involved in investing in securities of
companies that are not currently favored by the public but show potential
for capital appreciation.
FIDELITY ADVISOR EQUITY PORTFOLIO INCOME . It is the policy of the
Fund that at least 65% of its total assets normally will be invested in
income-producing equity securities. For purposes of this policy, equity
securities are defined as common stocks and preferred stocks.
The balance of the Fund will tend to be invested in debt obligations, a
high percentage of which are expected to be convertible into common stocks.
As a non-fundamental policy, the Fund may invest in lower- quality
high-yielding debt securities (sometimes referred to as "junk bonds"),
although it currently intends to limit its investments in these securities
to 35% of its assets. However, the Fund does not intend to invest in
securities of issuers without proven earnings and/or credit
histories. T he Fund may purchase or engage in foreign investments,
indexed securities, illiquid investments, loans and other direct debt
instruments, futures and options, repurchase agreements and securities
loans, restricted securities, short sales, swap agreements, and warrants.
Because of the income considerations, investors should not expect capital
appreciation comparable to the appreciation which could be achieved by
funds whose primary objective is capital appreciation. While the
investment portfolio will not mirror the stocks in the S&P 500, the
yield on the overall investment portfolio generally will increase or
decrease from year to year in accordance with market conditions and in
relation to the changes in yields of the stocks included in the S&P
500.
The Fund may make temporary investments in securities such as
investment-grade bonds or short-term notes for defensive purposes.
FIXED-INCOME FUNDS. Fixed-Income Funds invest primarily in debt securities
(e.g., bonds, debentures, notes and similar obligations). The share value
of fixed-income funds tends to move inversely with changes in prevailing
interest rates. Shorter-term bonds are less sensitive to interest rate
changes, but longer-term bonds generally offer higher yields. It also is
important to note that high-yielding, lower-quality bonds involve greater
risks, because there is a greater possibility of a financial reversal
affecting the issuer's ability to pay interest and principal on time.
Share value and yield are not guaranteed and will fluctuate based on credit
quality and changes in interest rates.
FMR will use its extensive research facilities in addition to considering
the ratings of Nationally Recognized Statistical Rating Organizations
(NRSROs) in selecting investments for the Funds. Unrated securities are
not necessarily of lower quality than rated securities, but they may not be
attractive to as many buyers. This credit analysis includes consideration
of the economic feasibility, the financial condition of the issuer with
respect to liquidity, cash flow and political developments that may affect
credit quality. Since the risk of default is higher for lower-quality
obligations, FMR's research and analysis are an integral part of choosing a
Fund's securities. Through portfolio diversification and careful credit
analysis, FMR can reduce risk, although there can be no assurance that
losses will not occur. FMR also considers trends in the economy, in
geographic areas, in various industries, and in the financial markets.
FIDELITY ADVISOR HIGH YIELD FUND. As a non-fundamental policy, the Fund
normally will invest at least 65% of its total assets in
high-yielding, income producing debt securities and preferred stocks,
including convertible and zero coupon bonds . The Fund may invest
all or a substantial portion of its assets in lower- quality,
high-yielding debt securities ( sometimes referred to as "junk
bonds"). Please refer to "Risks of Lower- Quality Taxable Debt
Securities," page 11. In addition, the Fund also may invest in
government securities, securities of any state or any of its subdivisions,
agencies or instrumentalities, and securities of foreign issuers, including
securities of foreign governments. The Fund may invest up to 35% of its
assets in equity securities, including common stocks, warrants and rights.
Debt instruments include securities such as bonds, notes, convertible
bonds, and mortgage-backed or asset-backed securities; commercial paper and
other money market instruments, including repurchase agreements; and loans,
trade claims, and similar instruments representing indebtedness of a
corporate borrower. These instruments may provide for interest payments in
cash or in kind, may pay no interest, or may be in default, and may have
warrants attached or otherwise include rights to purchase common stocks.
The Fund may purchase debt instruments in public offerings or through
private placements. The Fund has no specific limitations on the maturity
or credit ratings of the debt instruments in which it invests.
The Fund may enter into forward currency contracts and may purchase
or engage in foreign investments, indexed securities, illiquid investments,
loans and other direct debt instruments, options and futures contracts,
repurchase agreements and securities loans, restricted securities, reverse
repurchase agreements, and swap agreements.
RISKS OF LOWER- QUALITY TAXABLE DEBT SECURITIES. Lower-quality
debt securities usually are defined as securities rated Ba or lower by
Moody's or BB or lower by S&P. Lower-quality debt securities are
considered speculative and involve greater risk of loss than higher-rated
debt securities, and are more sensitive to changes in the issuer's capacity
to pay. This is an aggressive approach to income investing.
The 1980s saw a dramatic increase in the use of lower- quality debt
securities to finance highly leveraged corporate acquisitions and
restructurings. Past experience may not provide an accurate indication of
the future performance of lower- quality debt securities, especially
during periods of economic recession. In fact, from 1989 to 1991, the
percentage of lower- quality debt securities that defaulted rose
significantly above prior levels, although the default rate decreased in
1992 and 1993 .
Lower- quality debt securities may be thinly traded, which can
adversely affect the prices at which these securities can be sold and can
result in high transaction costs. If market quotations are not available,
lower- quality debt securities will be valued in accordance with
standards set by the Boards of Trustees, including the use of outside
pricing services. Judgment plays a greater role in valuing
lower- quality debt securities than securities for which more
extensive quotations and last sale information are available. Adverse
publicity and changing investor perceptions may affect the ability of
outside pricing services to value lower- quality debt securities, and
the Fund's ability to dispose of these securities.
The market prices of lower- quality debt securities may decline
significantly in periods of general economic difficulty, which may follow
periods of rising interest rates. During an economic downturn or a
prolonged period of rising interest rates, the ability of issuers of
lower- quality debt to service their payment obligations, meet
projected goals, or obtain additional financing may be impaired.
The Fund may choose, at its own expense or in conjunction with others, to
pursue litigation or otherwise to exercise its rights as a security holder
to seek to protect the interests of security holders if it determines this
to be in the interest of Fund shareholders.
The considerations discussed above for lower- quality debt securities
also apply to lower-quality, unrated debt instruments of all types,
including loans and other direct indebtedness of businesses with poor
credit standing. Unrated debt instruments are not necessarily of
lower-quality than rated securities, but they may not be attractive to as
many buyers. The Fund relies more on FMR's credit analysis when investing
in debt instruments that are unrated. Please refer to pages 25 and
26 for a discussion of Moody's and S&P ratings.
FIDELITY ADVISOR LIMITED TERM BOND FUND. Under normal
circumstances, the Fund will invest in fixed-income securities
as follows:
(I) Corporate obligations which are rated AAA, AA, or A by S&P, or Aaa,
Aa, or A by Moody's;
(II) Obligations issued or guaranteed as to interest and principal by the
government of the U.S., or any agency or instrumentality thereof;
(III) Obligations (including certificates of deposit and bankers'
acceptances) of U.S. banks which at the date of investment have capital
gains, surplus, and undivided profits (as of the date of their most
recently published annual financial statements) in excess of $100,000,000;
(IV) Commercial paper which at the date of investment is rated A-1 or A-2
by S&P or Prime-1 or Prime-2 by Moody's or, if not rated, is issued by
companies which at the date of investment have an outstanding debt issue
rated AAA, AA, or A by S&P or Aaa, Aa, or A by Moody's; and
(V) Such other fixed-income instruments as the Board of Trustees, in its
judgment, deems to be of comparable quality to those enumerated above.
The Fund also may invest in unrated instruments, and may at times
purchase instruments rated below A if FMR judges them to be of comparable
quality to those rated A or better. Currently, the Fund does not intend to
invest in debt obligations rated below Baa/BBB. Instruments in which the
Fund may invest include asset-backed securities, collateralized mortgage
obligations, convertible securities, loans and other direct debt
instruments, mortgage-backed securities, and zero coupon bonds. For
purposes of the Fund's investment policies, those instruments described in
this paragraph and in (i) through (v) above are considered "bonds".
FMR's standards for determining high- and upper-medium grades are
essentially the same as those described by S&P and Moody's as
characteristic of their ratings of A and above. Such instruments have
strong protection of principal and interest payments. In addition to
reliance on S&P's or Moody's ratings, FMR also performs its own credit
analysis. Investment-grade bonds are generally of medium to high quality.
Those rated in the lower end of the category (Baa/BBB), however, may
possess speculative characteristics and may be more sensitive to economic
changes and changes in the financial condition of issue r s.
In addition, the Fund may seek capital appreciation when consistent with
its primary objective. In seeking capital appreciation, FMR will select
securities for the Fund based on its judgment as to economic and market
conditions and the prospects for interest rate changes.
The Fund may purchase or engage in foreign investments, indexed securities,
illiquid investments, options and futures contracts, repurchase agreements
and securities loans, restricted securities, and swap agreements. The Fund
also may engage in reverse repurchase agreements for temporary or emergency
purposes and not for investment purposes.
The Fund will maintain a dollar-weighted average maturity of 10 years or
less. Based on FMR's assessment of interest rate trends, generally,
the average maturity will be shortened when interest rates are expected to
rise and lengthened up to 10 years when interest rates are expected to
decline.
FIDELITY ADVISOR GOVERNMENT INVESTMENT FUND. Under normal
circumstances, as a non-fundamental policy at least 65% of the Fund's
total assets will be invested in government securities.
The Fund invests primarily in obligations issued or guaranteed by the U.S.
government or any of its agencies or instrumentalities (U.S. government
securities), including U.S. Treasury bonds, notes and bills, Government
National Mortgage Association mortgage-backed pass-through certificates
(Ginnie Maes) and mortgage-backed securities issued by the Federal National
Mortgage Association (Fannie Maes) or the Federal Home Loan Mortgage
Corporation (Freddie Macs). The U.S. government securities the Fund
invests in may or may not be fully backed by the U.S. government. The Fund
may enter into repurchase agreements involving any securities in which it
may invest and also may enter into reverse repurchase agreements. The Fund
considers "government securities" to include U.S. government securities
subject to repurchase agreements. The Fund is not restricted as to the
percentage of its assets that may be invested in any one type of U.S.
government security. The Fund may for temporary defensive purposes invest
without limit in U.S. government securities having a maturity of 365 days
or less. The Fund may invest in delayed-delivery transactions, options and
futures contracts, indexed securities, swap agreements and zero coupon
bonds. In seeking current income, the Fund also may consider the potential
for capital gain.
MUNICIPAL/TAX-EXEMPT FUNDS. Tax-Exempt Funds invest primarily in municipal
securities which are issued by state and local governments and their
agencies to raise money for various public purposes, including general
purpose financing for state and local governments as well as financing for
specific projects or public facilities. Municipal securities may be backed
by the full taxing power of a municipality or by the revenues from a
specific project or the credit of a private organization. Some municipal
securities are insured by private insurance companies, while others may be
supported by letters of credit furnished by domestic or foreign banks. FMR
monitors the financial condition of parties (including insurance companies,
banks, and corporations) whose creditworthiness is relied upon in
determining the credit quality of securities the Funds may purchase.
Yields on municipal bonds, and therefore the yield of High Income Municipal
and Limited Term Tax-Exempt, depend on factors such as general market
conditions, interest rates, the size of a particular offering, the
maturities of the obligations and the quality of the issues. The ability
of the Funds to achieve their investment objectives is also dependent on
the continuing ability of the issuers of the municipal obligations in which
the Funds invest to meet their obligations for the payment of interest and
principal when due.
Bonds generally are considered to be interest rate sensitive, which means
that their values move inversely to interest rates. Long-term municipal
bonds generally are more exposed to market fluctuations resulting from
changes in interest rates than are short-term municipal bonds.
While the market for municipals is considered to be substantial, adverse
publicity and changing investor perceptions may affect the ability of
outside pricing services used by a Fund to value its portfolio securities
and the Fund's ability to dispose of lower- quality bonds. The
outside pricing services are consistently monitored to assure that
securities are valued by a method that the Board believes accurately
reflects fair value. The impact of changing investor perceptions may be
especially pronounced in markets where municipal securities are thinly
traded.
The Funds' investments in municipal securities may include fixed, variable,
or floating rate general obligation and revenue bonds (including municipal
lease obligations and resource recovery bonds); zero coupon and
asset-backed securities; inverse floaters; tax, revenue, or bond
anticipation notes; and tax-exempt commercial paper. The Funds may buy or
sell securities on a when-issued or delayed-delivery basis (including
refunding contracts), and may purchase restricted and illiquid
securities. The Funds may also buy and sell options and futures
contracts.
Municipal obligations, including industrial development revenue bonds, are
issued by or on behalf of states, territories, and possessions of the U.S.
and the District of Columbia and their political subdivisions, agencies,
and instrumentalities.
Each Fund may invest more than 25% of its total assets in securities
whose revenue sources are from similar types of projects (e.g., education,
electric utilities, health care, housing, transportation, or water, sewer
and gas utilities) or whose issuers share the same geographic location.
As a result, a fund may be more susceptible to economic, business
or political developments than would a portfolio of bonds with a
greater variety of issuers. These developments include proposed
legislation or pending court decisions affecting the financing of such
projects and market factors affecting the demand for their services or
products.
FIDELITY ADVISOR HIGH INCOME MUNICIPAL FUND. Interest from all or a
portion of the Fund's municipal bonds may be a "tax preference" item for
some shareholders in determining their federal alternative minimum tax.
Stability and growth of principal also will be considered when choosing
securities.
Interest on some "private activity" municipal obligations is subject to the
federal alternative minimum tax AMT bonds. AMT bonds are municipal
obligations that benefit a private or industrial user or finance a private
facility. The Fund reserves the right to invest up to 100% of its assets
in AMT bonds.
The Fund may invest in municipal obligations which are rated in the medium
and lower rating categories of NRSROs (such as obligations rated Caa by
Moody's or CCC by S&P) or which are unrated, but judged by FMR,
pursuant to procedures established by the Board of Trustees, to meet the
quality standards of the Fund. Municipal obligations which are in the
medium and lower rating categories or which are unrated generally offer a
higher current yield than those offered by municipal obligations which are
in the higher rating categories. Since available yields and the yield
differential between higher and lower-rated obligations vary over time, no
specific level of income or yield differential can be assured.
Lower- quality bonds (those rated Ba/BB or lower) involve greater
risk, including risk of default.
The Fund also may purchase tax-exempt instruments that become available in
the future as long as FMR believes that their quality is equivalent to
those rated Caa or CCC or better by Moody's or S&P, respectively.
The Fund's yield depends in part on the quality of its investments.
Obligations rated investment grade or better (Baa/BBB or higher) generally
are of medium to high quality. These securities typically have moderate to
poor protection of principal and interest payments and have speculative
characteristics.
Unrated obligations may be either investment grade or lower quality, but
usually are not attractive to as many buyers . The Fund relies
heavily on FMR's credit analysis when purchasing unrated or
lower- quality bonds.
While lower-quality bonds traditionally have been less sensitive to
interest rate changes than higher-quality investments, as with all bonds,
the prices of lower-quality bonds will be affected by interest rate
changes. Economic changes may affect lower-quality securities differently
than other securities. Lower-quality municipal bonds may be more sensitive
to adverse economic changes (including recession) in specific regions or
localities or among specific types of issuers. During an economic downturn
or a prolonged period of rising interest rates, issuers of lower-quality
debt may have problems servicing their debt, meeting projected revenue
goals, or obtaining additional financing. Periods of economic uncertainty
and interest rate changes may cause market price volatility for
lower-quality bonds and corresponding volatility in the Fund's share
price.
During periods when, in FMR's opinion, a temporary defensive posture in the
market is appropriate, the Fund may invest without limitation in cash or in
obligations whose interest payments may be federally taxable. Taxable
obligations include, but are not limited to, certificates of deposit,
commercial paper, obligations issued by the U.S. government or any of its
agencies or instrumentalities, and repurchase agreements.
The Fund may purchase long-term municipals with maturities of 20 years or
more, which generally produce higher yields than short-term municipals. The
Fund also may purchase short-term municipal obligations in order to provide
for short-term capital needs. The average maturity of the Fund is
currently expected to be greater than 20 years. Since the Fund's
objective is to provide a high current yield, the Fund will purchase
municipals with an emphasis on income. FMR may vary the Fund's average
maturity depending on anticipated market conditions. Generally, the average
maturity will be shortened when interest rates are expected to rise and
lengthened when rates are expected to decline.
FIDELITY ADVISOR LIMITED TERM TAX-EXEMPT FUND . Under normal
conditions, at least 80% of the Fund's annual income will be exempt from
federal income taxes and at least 80% of the Fund's net assets will be
invested in obligations having remaining maturities of 15 years or less.
The Fund will maintain a dollar-weighted average maturity of 10 years or
less.
The Fund will invest in municipal obligations which, in the judgment of
FMR, are high quality or at least upper-medium quality. The Fund's
standards for high quality and upper-medium quality obligations are
essentially the same as those described by Moody's in rating municipal
obligations within its three highest ratings of Aaa, Aa, and A and as those
described by S&P in rating such obligations within its three highest
ratings of AAA, AA and A. As a non-fundamental policy, the Fund will not
purchase a security rated by Moody's or S&P unless it has received at
least an A rating from either rating service.
The Fund may invest up to 20% of its total assets in municipal obligations
which are unrated by Moody's or S&P if, in the judgment of FMR, such
municipal obligations meet the standards of quality as set forth above.
Unrated bonds are not necessarily of lower quality and may have higher
yields than rated bonds, but the market for rated bonds is usually broader.
The Fund may invest up to 25% of its total assets in a single issuer's
securities.
The Fund currently does not intend to invest in taxable obligations;
however, consistent with that portion of its investment objective concerned
with the preservation of capital, from time to time the Fund may invest a
portion (normally not to exceed 20%) of its net assets on a temporary basis
in fixed-income obligations whose interest is subject to federal income
tax. These taxable obligations may include repurchase agreements. The Fund
does not currently intend to invest in AMT bonds.
INVESTMENT LIMITATIONS
Each Fund has adopted the following investment limitations designed to
reduce investment risk. The policies and limitations discussed below, and
in the Appendix beginning on page , are considered at the time of purchase.
With the exception of each Fund's borrowing policy, the sale of portfolio
securities is not required in the event of a subsequent change in
circumstances.
DIVERSIFICATION: These limitations do not apply to U.S. government
securities and are fundamental unless otherwise noted .
(bullet) Strategic Opportunities may not purchase a security if, as a
result, more than 5% of its total assets would be invested in the
securities of any issuer;
(bullet) As a non-fundamental policy, generally to meet federal tax
requirements at the close of each quarter, Emerging Markets Income may not
(1) with respect to 50% of its total assets, purchase a security if more
than 5% of its total assets would be invested in the securities of a single
issuer; and (2) invest more than 25% of its total assets in securities of a
single issuer.
(bullet) With respect to 75% of its total assets, each other Fund may not
purchase a security if, as a result, more than 5% of its total assets would
be invested in the securities of any issuer.
(bullet) Each Fund (except Emerging Markets Income) may not
purchase a security if, as a result, it would hold more than 10% of the
outstanding voting securities of any issuer (except that Equity Portfolio
Income, High Yield, and Government Investment, each may invest up to 25% of
its total assets without regard to this limitation).
(bullet) Limited Term Tax-Exempt may not purchase the securities of any
issuer if, as a result, more than 25% of its total assets would be invested
in industrial development bonds whose issuers are in any one industry.
(bullet) Each other Fund ( may not purchase the securities of any
issuer if, as a result, more than 25% of the Fund's total assets would be
invested in the securities of issuers having their principal business
activities in the same industry. Limited Term Bond may, however, invest
more than 25% of its total assets in obligations of banks, although it has
no current intention of so doing.
BORROWING: The following limitations are fundamental.
(bullet) Each fund may borrow money for temporary or emergency purposes,
in an amount not exceeding 33 1/3% of the value of its total assets;
(bullet) Strategic Opportunities, Limited Term Bond, and Limited Term
Tax-Exempt may not purchase any security while borrowings representing more
than 5% of its total assets are outstanding.
(bullet) Government Investment and High Income Municipal may not purchase
any security while borrowings representing more than 5% of its net assets
are outstanding.
The following limitations are non-fundamental.
(bullet) Each other Fund may not purchase any security while
borrowings representing more than 5% of its total assets are outstanding.
(bullet) Each Fund may borrow money from banks or from other funds advised
by FMR, or by engaging in reverse repurchase agreements.
LENDING: Percentage limitations are fundamental.
(bullet) High Income Municipal and Limited Term Tax-Exempt do not
currently intend to engage in repurchase agreements or make loans (but this
limitation does not apply to purchases of debt securities).
(bullet) Each other F und (A) may lend securities to a
broker-dealer or institution when the loan is fully collateralized; and (B)
may lend money to a mutual fund advised by FMR or an affiliate. Each Fund
will limit loans in the aggregate to 33 1/3% of its total assets.
Each Fund has received permission from the SEC to lend money to and borrow
money from other funds advised by FMR or its affiliates . High Income
Municipal and Limited Term Tax-Exempt will participate only as borrowers.
If a Fund borrows money, its share price may be subject to greater
fluctuation until the borrowing is paid off. To this extent, purchasing
securities when borrowings are outstanding may involve an element of
leverage.
As a non-fundamental policy, each Fund may not purchase a security, if as a
result, more than 15% ( Emerging Markets Income and High Yield) or
10% (all others) of its net assets would be invested in illiquid
investments.
HOW TO BUY SHARES
Shares of each Fund are offered continuously to investors who engage an
investment professional for investment advice and may be purchased at the
net asset value per share (NAV) next determined after the transfer agent
receives your order to purchase. Securities dealers and banks (investment
professionals), with which Distributors has Agreements, receive as
compensation from Distributors a concession equal to 3% of your purchase.

S hares are offered at NAV without an initial sales charge and
may be subject to a CDSC upon redemption. For more information on how the
CDSC is calculated, see "How to Sell Shares," page .
You can open an account with a minimum initial investment of $2,500
by completing and returning an account application. You can make
additional investments of $250 or more. Purchase amounts of
more than $250,000 will not be accepted for Class B shares of
the Funds. For tax-deferred retirement plans, including IRA accounts, there
is a $500 minimum initial investment and a $100 subsequent investment
minimum. For accounts established under the Fidelity Advisor Systematic
Investment Program or the Fidelity Advisor Systematic Exchange Program,
there is a $1,000 initial and $100 monthly subsequent investment minimum
requirement. FOR FURTHER INFORMATION ON OPENING AN ACCOUNT, PLEASE CONSULT
YOUR INVESTMENT PROFESSIONAL OR REFER TO THE CLASS B ACCOUNT APPLICATION.
It is the responsibility of your investment professional to transmit your
order to purchase shares to Fidelity Investments Institutional
Operations Company (FIIOC or Transfer Agent ) before 4:00 p.m.
Eastern time in order for you to receive that day's Class B share
price. The Transfer Agent must receive payment within five business days
after an order is placed; otherwise, the purchase order may be canceled and
you could be held liable for resulting fees and/or losses. Certificates
are not available for Class B shares.
All of your purchases must be made in U.S. dollars and checks must be drawn
on U.S. banks. Each Fund reserves the right to limit the number of your
checks processed at one time. If your check does not clear, the Fund may
cancel your purchase and you could be held liable for any fees and/or
losses incurred. When you purchase directly by check, the Fund can hold the
proceeds of redemptions until the Transfer Agent is reasonably satisfied
that the purchase payment has been collected (which can take up to seven
calendar days). You may avoid a delay in receiving redemption proceeds by
purchasing shares with a certified check. S hares of the
fixed-income funds purchased through investment professionals utilizing an
automated order placement and settlement system that guarantees payment for
orders on a specified date, begin to earn income dividends on that date.
Direct purchases and all other orders begin to earn dividends on the
business day after the Fund receives payment.
Each Fund and Distributors reserve the right to suspend the offering of
shares for a period of time and to reject any order for the purchase of
shares, including certain purchases by exchange (see "How to
Exchange,'' page 15 ).
MINIMUM ACCOUNT BALANCE. You must maintain an account balance of
$1 , 000 in Class B shares of a Fund . If your account falls
below $1 , 000 due to redemption of Class B shares, the
Transfer Agent may close it at the NAV next determined on the day your
account is closed and mail you the proceeds at the address shown on the
Transfer Agent's records. The Transfer Agent will give you 30 days' notice
that your account will be closed unless you make an investment to increase
your account balance to the $1,000 minimum. The minimum account balance
does not apply to IRA accounts.
INVESTOR SERVICES
You may initiate many transactions by telephone. Note that the Transfer
Agent will not be responsible for any losses resulting from unauthorized
transactions if it follows reasonable procedures designed to verify the
identity of the caller. The Transfer Agent will request personalized
security codes or other information, and may also record calls. You should
verify the accuracy of your confirmation statements immediately after you
receive them. If you do not want the ability to redeem and exchange by
telephone, call the Transfer Agent for instructions.
QUANTITY DISCOUNTS. Your purchases and/or existing balances of Class B
shares may be included for purposes of qualifying for a Class A front-end
sales charge reduction in the following programs. Reduced front-end
sales charges are applicable to purchases of Class A shares in amounts of
$50,000 or more ($1,000,000 or more for Fidelity Advisor Short Fixed-Income
Fund or Fidelity Advisor Short-Intermediate Tax-Exempt Fund).
COMBINED PURCHASES. When you invest in Class A shares of a Fund for several
accounts at the same time, you may combine these investments into a single
transaction to qualify for a quantity discount, if purchased through one
investment professional and if the total is at least $50,000 ($1,000,000
for Fidelity Advisor Short Fixed-Income Fund or Fidelity Advisor
Short-Intermediate Tax-Exempt Fund).
RIGHTS OF ACCUMULATION. Your "Rights of Accumulation" permit reduced
front-end sales charges on any future purchases of Class A shares. You may
add the value of currently held Class A and Class B shares of Fidelity
Advisor Funds, and the value of currently held Initial Class shares and
Class B shares of Daily Money Fund: U.S. Treasury Portfolio and shares of
Daily Money Fund: Money Market Portfolio and Daily Tax-Exempt Money Fund
ACQUIRED BY EXCHANGE FROM ANY FIDELITY ADVISOR FUND, determined at the
current day's NAV at the close of business, to the amount of your new
purchase valued at the current offering price, to determine your reduced
front-end sales charge.
LETTER OF INTENT. You may qualify for reduced front-end sales charges on
purchases of Class A shares in amounts of at least $50,000 ($1,000,000 for
Fidelity Advisor Short Fixed Income Fund and Fidelity Advisor
Short-Intermediate Tax-Exempt Fund) made within a 13-month period by filing
a non-binding Letter of Intent (the Letter). You may include, as an
accumulation credit toward the completion of the Letter, purchases of Class
A and Class B shares of Fidelity Advisor Funds, and the value of Initial
Class shares and Class B shares of Daily Money Fund; U.S. Treasury
Portfolio and shares of Daily Money Fund: Money Market Portfolio and Daily
Tax Exempt Money Fund ACQUIRED BY EXCHANGE FROM ANY FIDELITY ADVISOR FUND.
FOR MORE INFORMATION ON THE TERMS OF QUANTITY DISCOUNTS, PLEASE CONSULT
YOUR INVESTMENT PROFESSIONAL.
FIDELITY ADVISOR SYSTEMATIC INVESTMENT PROGRAM. You can make regular
investments in Class B shares of a Fidelity Advisor Fund with the
Systematic Investment Program by completing the appropriate section of the
account application and attaching a voided personal check. Investments may
be made monthly by automatically deducting $100 or more from your bank
checking account. You may change the amount of your monthly purchase at any
time. There is a $1,000 minimum initial investment requirement for the
Systematic Investment Program. S hares will be purchased at the
NAV next determined following receipt of the investment by the
Transfer Agent. You may cancel the Systematic Investment Program at any
time without payment of a cancellation fee. You will receive a confirmation
from the Transfer Agent for every transaction, and a debit entry will
appear on your bank statement.
SHAREHOLDER COMMUNICATIONS
The Transfer Agent or your investment professional will send you a
confirmation after every transaction that affects your share balance or
account registration. In addition, a consolidated statement will be
provided at least quarterly. At least twice a year each shareholder will
receive the Fund's financial statements, with a summary of its portfolio
composition and performance. To reduce expenses, only one copy of most
shareholder reports (such as a Fund's Annual Report) will be mailed to each
shareholder address. Please write to the Transfer Agent or contact your
investment professional if you need to have additional reports sent each
time.
Each Fund pays for these shareholder communications, but not for
special services that are required by a few shareholders, such as a request
for a historical transcript of an account. You may be required to pay a fee
for such special services. If you are purchasing shares of a Fund through a
program of administrative services offered by an investment professional,
you should read the additional materials pertaining to that program in
conjunction with this prospectus. Certain features of each Fund,
such as the minimum initial or subsequent investment, may be modified in
these programs, and administrative charges may be imposed for the services
rendered.
HOW TO EXCHANGE
An exchange is the redemption of Class B shares of one Fund and the
purchase of Class B shares of another Fund, each at the next determined
NAV. A CDSC WILL NOT APPLY TO CLASS B SHARES REDEEMED FOR EXCHANGE.
The applicable CDSC for Class B shares purchased by exchange will be
based on the date of acquisition and cost of the Class B shares
initially purchased. The exchange privilege is a convenient way to buy
and sell Class B shares of the Fidelity Advisor Funds and
of Daily Money Fund: U.S. Treasury Portfolio , provided such funds
are registered in your state.
To protect each Fund's performance and shareholders, FMR discourages
frequent trading in response to short-term market fluctuations. Each
Fund reserves the right to refuse exchange purchases by any
person or group if, in FMR's opinion, the Fund would be unable to
invest effectively in accordance with its investment objective and
policies, or would otherwise be affected adversely. Your exchanges may be
restricted or refused if a Fund receives or anticipates simultaneous orders
affecting significant portions of a Fund's assets. In particular, a pattern
of exchanges that coincides with a "market timing" strategy may be
disruptive to a Fund. Exchange restrictions may be imposed at any time. The
Funds may modify or terminate the exchange privilege. The exchange limit
may be modified for certain institutional retirement plans.
Exchange instructions may be given by you in writing or by telephone
directly to the Transfer Agent or through your investment professional.
If you choose to exchange by writing, you must send a letter of instruction
with your signature guaranteed either directly to the Transfer Agent or to
your investment professional, accompanied by a stock power form with your
signature guaranteed. FOR MORE INFORMATION ON ENTERING AN EXCHANGE
TRANSACTION, PLEASE CONSULT YOUR INVESTMENT PROFESSIONAL.
Before you make an exchange:
1. Read the prospectus of the Fund into which you want to exchange.
2. Class B shares may be exchanged only into Class B shares of another
Fidelity Advisor Fund or Daily Money Fund: U.S. Treasury Portfolio, seven
calendar days after purchase at NAV.
3. You may exchange only between accounts that are registered in the same
name, address, and taxpayer identification number.
4. You may make four exchanges out of each Fund per calendar year. If you
exceed this limit, your future purchases of (including exchanges into)
Fidelity Advisor Funds may be permanently refused. For purposes of the four
exchange limit, accounts under common ownership or control, including
accounts having the same taxpayer identification number, will be
aggregated. Systematic exchanges are not subject to this four exchange
limit (see following section).
5. TAXES: The exchange of Class B shares is considered a sale and may be
taxable. The Transfer Agent will send you or your investment professional a
confirmation of each exchange transaction.
FIDELITY ADVISOR SYSTEMATIC EXCHANGE PROGRAM. You can exchange a specific
dollar amount of Class B shares from a Fund into Class B shares of another
Fidelity Advisor Fund or D aily Money Fund: U.S. Treasury Portfolio
on a periodic basis under the following conditions:
1. The account from which the exchanges are to be processed must have a
minimum balance of $10,000.
2. The account into which the exchanges are to be processed must be an
existing account with a minimum balance of $1,000.
3. Both accounts must have identical registrations and taxpayer
identification numbers. The minimum amount that can be exchanged
systematically into a Fund is $100.
4. Systematic exchanges will be processed at the NAV determined on the
transaction date.
HOW TO SELL SHARES
You may sell (redeem) all or a portion of your shares on any day the New
York Stock Exchange (NYSE) is open at the NAV next determined after the
Transfer Agent receives your request to sell, less any applicable
CDSC (see below). Orders to sell may be placed by you in writing or by
telephone or through your investment professional. If you choose to sell
shares by written instruction, you must send a letter of instruction with
your signature guaranteed either directly to the Transfer Agent or to your
investment professional, accompanied by a stock power form with your
signature guaranteed. Orders to sell received by the Transfer Agent
before 4:00 p.m. Eastern time will receive that day's Class B
share price. For orders to sell placed through your investment
professional, it is the investment professional's responsibility to
transmit such orders to the Transfer Agent by 4:00 p.m. Eastern time for
you to receive that day's Class B share price.
Once your shares are redeemed, a Fund normally will send the proceeds on
the next business day to the address of record. If making immediate payment
could adversely affect the Fund, the Fund may take up to seven days to pay
you. A Fund may withhold redemption proceeds until it is reasonably
satisfied that it has collected investments that were made by check (which
may take up to seven calendar days).
When the NYSE is closed (or when trading is restricted) for any reason
other than its customary weekend or holiday closings, or under any
emergency circumstances as determined by the SEC to merit such action, a
Fund may suspend redemption or postpone payment dates for more than seven
days. The Transfer Agent requires additional documentation to redeem
shares registered in the name of a corporation, agent or fiduciary or a
surviving joint owner. Call 1-800- 526 - 0084 for specific
requirements.
REDEMPTION REQUESTS BY TELEPHONE.
TO RECEIVE A CHECK. You may sell shares of a Fund having a value of
$100,000 or less from your account by calling the Transfer Agent.
Redemption proceeds must be sent to the address of record listed on the
account, and a change of address must not have occurred within the
preceding 3 0 days.
TO RECEIVE A WIRE. You may sell shares of a Fund and have the proceeds
wired to a pre-designated bank account. Wires will generally be sent the
next business day following the redemption of shares from your account.
Telephone redemptions cannot be processed for Fidelity Advisor Fund
prototype retirement accounts where State Street Bank and Trust Company is
the custodian.
REDEMPTION REQUESTS IN WRITING. For your protection, if you sell shares of
a Fund having a value of more than $100,000, if you are sending the
proceeds of a redemption of any amount to an address other than the address
of record listed on the account, if you have requested a change of
address within the preceding 3 0 days, or if you wish to have the
proceeds wired to a non-predesignated bank account, you must send a letter
of instruction signed by all registered owners with signature(s) guaranteed
to the Transfer Agent. A signature guarantee is a widely recognized way to
protect you by guaranteeing the signature on your request; it may not be
provided by a notary public. Signature guarantee(s) will be accepted from
banks, brokers, dealers, municipal securities dealers, municipal securities
brokers, government securities dealers, government securities brokers,
credit unions (if authorized under state law), national securities
exchanges, registered securities associations, clearing agencies and
savings associations.
REINSTATEMENT PRIVILEGE. If you have sold all or part of your Class B
shares of a Fund you may reinvest an amount equal to all or a portion of
the redemption proceeds in Class B shares of the Fund or in Class B
shares of any of the other Fidelity Advisor Funds, at the NAV next
determined after receipt of your investment order, provided that such
reinvestment is made within 30 days of redemption. Under these
circumstances, the dollar amount of the CDSC you paid will be reimbursed to
you by reinvesting that amount in Class B shares. You must reinstate your
Class B shares into an account with the same registration. This privilege
may be exercised only once by a shareholder with respect to a Fund and
certain restrictions may apply. For purposes of the CDSC schedule, the
holding period of the Class B shares will continue as if the Class B shares
had not been redeemed.
CONTINGENT DEFERRED SALES CHARGE. Class B shares may, upon redemption, be
assessed a CDSC based on the following schedule:
CONTINGENT DEFERRED
FROM DATE OF PURCHASE SALES CHARGE
Less than 1 year 4%
1 year to less than 2 years 3%
2 year s to less than 3 years 3%
3 years to less than 4 years 2%
4 years to less than 5 years 1%
5 years to less than 6 years* 0%
* UP TO A MAXIMUM HOLDING PERIOD OF 6 YEARS, CLASS B SHARES WILL
CONVERT AUTOMATICALLY TO CLASS A SHARES OF THE SAME FIDELITY ADVISOR FUND.
SEE "CONVERSION FEATURE" BELOW FOR MORE INFORMATION.
The CDSC will be calculated based on the lesser of the cost of Class
B shares at the initial date of purchase or the value of Class B
shares at redemption, not including any reinvested dividends or capital
gains. In determining the applicability and rate of any CDSC at redemption,
Class B shares representing reinvested dividends and capital gains, if any,
will be redeemed first, followed by Class B shares that have been held for
the longest period of time. Class B shares acquired through
distributions (dividends or capital gains) will not be subject to a
CDSC.
CONVERSION FEATURE. Up to a maximum holding period of 6 years from
the initial date of purchase, Class B shares convert automatically to Class
A shares of the same Fidelity Advisor Fund. Conversion to Class A shares
will be made at NAV. At the time of conversion, a portion of the Class B
shares purchased through the reinvestment of dividends or capital gains
(Dividend Shares) will also convert to Class A shares. The portion of
Dividend Shares that will convert is determined by the ratio of your
converting Class B non-Dividend Shares to your total Class B
non-Dividend Shares. (A portion of Class B shares acquired previously
by exchange also may convert, representing the appreciated value of,
and/or reinvested dividends or capital gains earned on, Class B
shares prior to their exchange.)
CONTINGENT DEFERRED SALES CHARGE WAIVERS. The CDSC may be waived (I) in
cases of disability or death, provided that the redemption is made within
one year following the death or initial determination of disability, or
(II) in connection with a total or partial redemption made in connection
with required distributions made after age 70 1/2 from
retirement plans or accounts.
FOR MORE INFORMATION ABOUT THE CDSC, INCLUDING THE CONVERSION FEATURE AND
THE PERMITTED CIRCUMSTANCES FOR CDSC WAIVERS, CONTACT YOUR INVESTMENT
PROFESSIONAL.
DISTRIBUTION OPTIONS
When you fill out your account application, you can choose from four
Distribution Options:
1. REINVESTMENT OPTION. Dividends and capital gain distributions will be
automatically reinvested in additional Class B shares of a Fund. If you do
not indicate a choice on your account application, you will be assigned
this option.
2. INCOME-EARNED OPTION. Capital gain distributions will be automatically
reinvested, but a check will be sent for each dividend distribution.
3. CASH OPTION. A check will be sent for each dividend and capital gain
distribution.
4. DIRECTED DIVIDENDS(Registered trademark) PROGRAM. Dividends and capital
gain distributions will be automatically invested in Class B shares of
another identically registered Fidelity Advisor Fund.
You may change your Distribution Option at any time by notifying the
Transfer Agent in writing. Distribution checks for fixed-income funds will
be mailed no later than seven days after the last day of the month. On the
day a Fund goes ex-dividend, the amount of the distribution is deducted
from its share price. Reinvestment of distributions will be made at that
day's NAV. If you select option 2 or 3 and the U.S. Postal Service cannot
deliver your checks, or if your checks remain uncashed for six months,
distribution checks will be reinvested in your account at the current NAV
and your election may be converted to the Reinvestment Option. CLASS B
S HARES ACQUIRED THROUGH DISTRIBUTIONS WILL NOT BE SUBJECT TO A CDSC.
DISTRIBUTIONS AND TAXES
DISTRIBUTIONS. The Funds distribute substantially all of their net
investment income and capital gains, if any, to shareholders each year
pursuant to the following schedule. Each Fund may pay capital gains in
December. In addition, Equity Portfolio Income, Limited Term Bond and
Limited Term Tax-Exempt may pay capital gains in January as well. Emerging
Markets Income also may pay capital gains in February.
Emerging Markets Income, High Yield, Limited Term Bond, Government
Investment, High Income Municipal, and Limited Term Tax-Exempt
declare dividends daily and pay monthly . Equity Portfolio
Income declare s dividends in March, June, September, and December
and pays the following month.
CAPITAL GAINS. You may realize a gain or loss when you sell (redeem) or
exchange shares. For most types of accounts, a Fund will report the
proceeds of your redemptions to you and the IRS annually. However, because
the tax treatment also depends on your purchase price and your personal tax
position, YOU SHOULD KEEP YOUR REGULAR ACCOUNT STATEMENTS TO USE IN
DETERMINING YOUR TAX.
"BUYING A DIVIDEND." On the record date for a distribution from a Fund, the
Fund's share price is reduced by the amount of the distribution. If you buy
shares just before the record date (buying a dividend), you will pay the
full price for the shares, and then receive a portion of the price back as
a taxable distribution.
FEDERAL TAXES. Distributions from each Fund's income and short-term capital
gains are taxed as dividends, and long-term capital gain distributions are
taxed as long-term capital gains. Gains on the sale of tax-free bonds
results in a taxable distribution. Short-term capital gains and a portion
of the gain on bonds purchased at a discount are taxed as dividends.
Distributions are taxable when they are paid, whether you take them in cash
or reinvest them in additional shares, except that distributions declared
in December and paid in January are taxable as if paid on December 31.
Each Fund will send you a tax statement by January 31 showing the tax
status of the distributions you received in the past year. A copy will be
filed with the Internal Revenue Service (IRS).
High Income Municipal and Limited Term Tax-Exempt may each invest in
municipal obligations whose interest is subject to the federal alternative
minimum tax for individuals (AMT bonds) . T o the extent that
the Funds invest in AMT bonds, individuals who are subject to the AMT will
be required to report a portion of the Fund's dividends as a
"tax-preference item" in determining their federal tax. Federally tax-free
interest earned by the Funds is federally tax-free when distributed as
income dividends. During the most recent fiscal year ended, 100% of the
income dividends for High Income Municipal and Limited Term Tax-Exempt were
free from federal tax. If the Funds earn taxable income from any of their
investments, it will be distributed as a taxable dividend. Some of the
Funds may be eligible for the dividends-received deduction for
corporations.
EFFECT OF FOREIGN TAXES. A Fund may pay withholding or other taxes to
foreign governments during the year. These taxes would reduce the Fund's
dividends, but would be included in the taxable income reported on your tax
statement. You may be able to claim an offsetting tax credit or itemized
deduction for foreign taxes paid by the Fund. Your tax statement will
generally show the amount of foreign tax for which a credit or deduction
will be available.
STATE AND LOCAL TAXES. Mutual fund dividends from U.S. government
securities generally are free from state and local income taxes. However,
particular states may limit this benefit, and some types of securities,
such as repurchase agreements and some agency backed securities, may not
qualify for the benefit. Ginnie mae securities and other mortgage-backed
securities are notable exceptions in most states. Some states may impose
intangible property taxes.
OTHER TAX INFORMATION. The information above is only a summary of some
of the federal tax consequences generally affecting the Funds and their
shareholders, and no attempt has been made to discuss individual tax
consequences. In addition to federal tax, shareholders may be subject to
state or local taxes on their investments. Investors should consult their
tax advisors for details and up-to-date information on the tax laws in
their state to determine whether a fund is suitable to their particular tax
situation.
When you sign your account application, you will be asked to certify that
your social security or taxpayer identification number is correct and that
you are not subject to 31% backup withholding for failing to report income
to the IRS. If you violate IRS regulations, the IRS can require a Fund to
withhold 31% of your taxable distributions and redemptions.
FEES
MANAGEMENT AND OTHER SERVICES. For managing its investments and business
affairs, each Fund pays a monthly fee to FMR.
Each Fund (with the exception of Equity Portfolio Income, see below) pays a
monthly fee to FMR based on a basic fee rate, which is the sum of two
components:
1. A group fee rate based on the monthly average net assets of all of the
mutual funds advised by FMR. This rate for Equity Funds cannot rise above
.52% and it drops (to as low as a marginal rate of .31%*) as total assets
in all of these funds rise. The effective Equity Fund group fee rate for
September 1993, October 1993 and November 1993 was .3262%, .3254% and
.3250%, respectively. The group fee rate for Fixed-Income Funds cannot rise
above .37% and it drops (to as low as a marginal rate of .15%*) as total
assets in all of these funds rise. The effective Fixed-Income group fee
rate for October 1993 and November 1993 was .1631% and .1627%,
respectively.
2. An individual fund fee rate, which varies for each Fund.
* FMR VOLUNTARILY AGREED TO ADOPT REVISED GROUP FEE RATE SCHEDULES WHICH
PROVIDE FOR A MARGINAL RATE AS LOW AS .285% (EQUITY FUNDS) AND .1325%
(FIXED-INCOME FUNDS) WHEN AVERAGE GROUP NET ASSETS EXCEED $336 BILLION.
(THE MANAGEMENT CONTRACT FOR EMERGING MARKETS INCOME AND HIGH YIELD
CONTAIN THE REVISED GROUP FEE RATE SCHEDULE.) A NEW MANAGEMENT CONTRACT
WITH A REVISED GROUP FEE RATE SCHEDULE WILL BE PRESENTED FOR APPROVAL AT
EACH FUND'S NEXT SHAREHOLDER MEETING.
One-twelfth of the annual basic fee rate is applied to each Fund's
net assets averaged over the most recent month, giving a dollar amount
which is the management fee for that month.
Equity Portfolio Income pays FMR a monthly management fee at an annual rate
of .50% of its average net assets. The following are the individual fund
fee rates and total management fees for each Fund's most recent fiscal year
end.
TOTAL
MANAGEMENT FEE
INDIVIDUAL (AS A PERCENT OF AVERAGE
FUND FEE RATE NET ASSETS)
(AS A PERCENTAGE OF BEFORE REIMBURSEMENTS
AVERAGE NET ASSETS) IF ANY
INTERNATIONAL FUND:
Emerging Markets Income 0.55% 0.71%*
EQUITY FUNDS:
Strategic Opportunities 0.30% 0.54%
Equity Portfolio Income NA 0.50%
FIXED-INCOME FUNDS:
High Yield 0.45% 0.51%
Limited Term Bond 0.25% 0.42%
Government Investment 0.30% 0.46%
MUNICIPAL/TAX-EXEMPT FUNDS:
High Income Municipal 0.25% 0.42%
Limited Term Tax-Exempt 0.25% 0.42%
*PROJECTION FOR FIRST YEAR OF OPERATIONS. TOTAL MANAGEMENT FEES ARE HIGHER
THAN THOSE CHARGED BY MOST MUTUAL FUNDS, BUT NOT NECESSARILY HIGHER THAN
THOSE OF A TYPICAL INTERNATIONAL FUND, DUE TO THE GREATER COMPLEXITY,
EXPENSE AND COMMITMENT OF RESOURCES INVOLVED IN INTERNATIONAL INVESTING.
In addition to the basic fee, the management fee for Strategic
Opportunities varies based on performance. The performance adjustment is
added to or subtracted from the management fee and is calculated monthly.
It is based on a comparison of the Fund's performance to that of an index,
over the most recent 36-month period. The difference is converted into a
dollar amount that is added to or subtracted from the management fee. This
adjustment rewards FMR when the Fund outperforms the index and reduces
FMR's fee when the Fund underperforms the index. The maximum annualized
performance index adjustment rate for Strategic Opportunities is +/-.20%.
Strategic Opportunities compares itself to the S&P 500. See "The
Trusts and the Fidelity Organization" on page 20 for information
regarding performance calculations for Strategic Opportunities.
FMR may, from time to time, agree to reimburse a Fund for expenses
(excluding interest, taxes, brokerage commissions, and extraordinary
expenses) above a specified percentage of average net assets. FMR retains
the ability to be repaid by a Fund for these expense reimbursements in the
amount that expenses fall below the limit prior to the end of the fiscal
year. Fee reimbursements by FMR will increase a Fund's yield and total
return, and repayment by a Fund will lower its yield and total return. FMR
has voluntarily agreed to reimburse expenses of the Class B shares of
Emerging Markets Income, Government Investment , (effective July 1,
1994) Limited Term Bond, and Limited Term Tax-Exempt and to the
extent that total expenses exceed 2.25%, 1.70%, 1.65%, and 1.65%,
respectively, of average net assets of Class B shares .
FMR has entered into sub-advisory agreements on behalf of certain Funds.
Sub-advisors provide research and investment advice and research services
with respect to issuers based outside the U.S. and FMR may grant
sub-advisers investment management authority to buy and sell securities if
FMR believes it would be beneficial to a Fund.
Strategic Opportunities, Equity Portfolio Income, Emerging Markets Income
and High Yield each have entered into sub-advisory agreements with Fidelity
Management & Research (U.K.) Inc. (FMR U.K.) , in London,
England, and Fidelity Management & Research ( FMR Far East)
Inc. (FMR Far East) in Tokyo, Japan. FMR U.K. focuses primarily on
issuers based in Europe, and FMR Far East focuses primarily on
issuers based in Asia and the Pacific Basin. Under the sub-advisory
agreements, FMR, not the Fund, pay s FMR U.K. and FMR Far East fees
equal to 110% and 105%, respectively, of each sub-advisor's costs incurred
in connection with its sub-advisory agreement.
In addition, FMR on behalf of Emerging Markets Income has entered
into a sub-advisory agreement with Fidelity International Investment
Advisors (FIIA) , in Pembroke, Bermuda, and Fidelity Investments Japan
Limited (FIJ), in Tokyo, Japan. FIJ and FIIA are both Bermuda-based
subsidiaries of Fidelity International Limited (FIL). FIIA, in turn,
has entered into a sub-advisory agreement with its wholly owned subsidiary
Fidelity International Investment Advisors (U.K.) Limited (FIIAL U.K.) ,
in Kent, England . Currently, FIIAL U.K. focuses on issuers based in
countries other than the United States , including countries in
Europe, Asia, and the Pacific Basin. Under the sub-advisory agreement, FMR
pays FIIA 30% of its monthly management fee with respect to the average
market value of investments held by the Fund for which FIJ and
FIIA , respectively have provided FMR with investment advice.
FIIA, in turn, pays FIIAL U.K. a fee equal to 110% of FIIAL U.K.'s costs
incurred in connection with providing investment advice and research
service s. For providing investment management services, the sub-advisers
are compensated as follows: (a) FMR pays FMR (U.K.), FMR Far East, FIJ and
FIIA 50% of its monthly management fee with respect to Emerging Markets
Income's average net assets managed by the sub-advisers on a discretionary
basis; and (b) FIIA pays FIIAL U.K.'s costs incurred in connection with
providing investment management services.
FIIOC , ZR5, P.O. Box 1182, Boston, MA 02103-1182, an affiliate of
FMR, provides transfer and dividend paying services for Class B shares of
each Fund. FIIOC is paid transfer agent fees based on the type,
size and number of accounts in Class B shares of a Fund , and the
number of transactions made by Class B shareholders. The
Transfer Agent has a sub-arrangement with State Street Bank and Trust
Company (State Street), P.O. Box 8331, Boston, Massachusetts 02266-8302 for
certain transfer, dividend paying and shareholder services.
The fees for pricing and bookkeeping services are based on a Fund's average
net assets, but must fall within a range of $45,000 to $750,000 per year.
Fidelity Service Co. (Service), 82 Devonshire Street, Boston, Massachusetts
02109, an affiliate of FMR, calculates each Fund's Class B daily
share price, and maintains its general accounting records (with the
exception of High Income Municipal and Limited Term Tax-Exempt, see below).
For those Funds which can engage in securities lending, Service also
administers its securities lending program. For the most recent fiscal
year, each Fund's fees for pricing and bookkeeping services (including
related out-of-pocket expenses) amounted to: $145,494 (Strategic
Opportunities); $113,026 (Equity Portfolio Income); $121,204 (High Yield);
$81,106 (Limited Term Bond); and $46,457 (Government Investment).
For High Income Municipal and Limited Term Tax-Exempt, United Missouri
Bank, N.A. (United Missouri), 1010 Grand Avenue, Kansas City, Missouri
64106, acts as the custodian, transfer agent and pricing and bookkeeping
agent for Class B shares . United Missouri has a sub-arrangement with
the Transfer Agent for transfer agent services and a sub-arrangement with
Service for pricing and bookkeeping services. For the most recent fiscal
year ended, fees paid to Service (including related out-of-pocket expenses)
amounted to $157,559 (High Income Municipal) and $45,724 (Limited Term
Tax-Exempt). All of the fees are paid to the Transfer Agent and Service by
United Missouri, which is reimbursed by the Funds for such payments.
DISTRIBUTION AND SERVICE PLANS . The Board of Trustees of each Trust
has adopted a Distribution and Service Plan (the Plan s ) on behalf of
each f und's Class B shares pursuant to Rule 12b-1 under the 1940 Act
(the Rule). The Rule provides in substance that a mutual fund may not
engage directly or indirectly in financing any activity that is intended
primarily to result in the sale of shares of a fund except pursuant to a
plan adopted by the fund under the Rule. The Boards of Trustees have
adopted the Plan s to allow Class B shares of each Fund and FMR to
incur certain expenses that might be considered to constitute direct or
indirect payment by Class B shares of distribution expenses.
Under each Plan, Class B shares are authorized to pay Distributors a
monthly distribution fee as compensation for its services and expenses in
connection with the distribution of Class B shares of the Fund . The
Class B shares of each Fund pay Distributors a distribution fee at an
annual rate of .75% of the average net assets of Class B shares
of that Fund determined as of the close of business on each day
throughout the month. In addition, pursuant to each Plan, investment
professionals are compensated at an annual rate of .25% of the average net
assets of that Fund's Class B shares for providing ongoing shareholder
support services to investors in Class B shares.
Each Plan also provides that, through Distributors, FMR may make
payments from its management fee or other resources to investment
professionals in connection with the distribution of Class B shares.
Class B shares of each Fund bear the fees paid pursuant to their Plan.
Such fees are not paid by individual accounts, and will comply with the
restrictions imposed by the NASD rule regarding asset based sales charges.
Distribution fees and shareholder service fees will reduce the net
investment income and total return of a Fund's Class B shares.
Distributors will, at its expense, provide promotional incentives
such as sales contests and luxury trips to investment professionals
who support the sale of shares of the Funds . In some instances,
these incentives will be offered only to certain types of investment
professionals, such as bank-affiliated or non-bank affiliated
broker-dealers, or to investment professionals whose representatives
provide services in connection with the sale or expected sale of
significant amounts of shares.
The Glass-Steagall Act generally prohibits federally and state chartered or
supervised banks from engaging in the business of underwriting, selling or
distributing securities. Although the scope of this prohibition under the
Glass-Steagall Act has not been fully defined, in Distributors' opinion it
should not prohibit banks from being paid for shareholder servicing and
recordkeeping. If, because of changes in law or regulation, or because of
new interpretations of existing law, a bank or a Fund were prevented from
continuing these arrangements, it is expected that the Board would make
other arrangements for these services and that shareholders would not
suffer adverse financial consequences. In addition, state securities laws
on this issue may differ from the interpretations of federal law expressed
herein, and banks and other financial institutions may be required to
register as dealers pursuant to state law.
VALUATION
A Fund's shares are valued at NAV. NAV for Class B shares of each
Fund is determined by adding Class B's pro rata share of the
value of all security holdings and other assets of the Fund, deducting
Class B's pro rata share of the liabilities of the Fund,
deducting the liabilities allocated to Class B (when appropriate), and
then dividing the result by the number of Class B shares of the Fund
outstanding.
NAV normally is calculated as of the close of business of the NYSE
(normally 4:00 p.m. Eastern time). The Funds are open for business and NAV
is calculated each day the NYSE is open for trading. Fund securities and
other assets are valued primarily on the basis of market quotations
furnished by pricing services, or if quotations are not available, by a
method that the Board of Trustees believes accurately reflects fair value.
Foreign securities are valued based on quotations from the primary market
in which they are traded and are converted from the local currency into
U.S. dollars using current exchange rates.
PERFORMANCE
Each Fund's performance may be quoted in advertising in terms of total
return. All performance information is historical and is not intended to
indicate future performance. Share price and total return fluctuate in
response to market conditions and other factors, and the value of a Fund's
shares when sold may be worth more or less than their original cost.
Excluding a sales charge from a performance calculation produces a higher
total return figure. TOTAL RETURN is the change in value of an
investment in a Fund over a given period, assuming reinvestment of any
dividends and capital gains. A CUMULATIVE TOTAL RETURN reflects
actual performance over a stated period of time. An AVERAGE ANNUAL TOTAL
RETURN is a hypothetical rate of return that, if achieved annually,
would have produced the same cumulative total return if performance had
been constant over the entire period. Average annual total returns smooth
out variations in performance; they are not the same as actual year-by-year
results. When an average annual return covers a period of less than one
year, the calculation assumes that performance will remain constant for the
rest of the year. Since this may or may not occur, the average annual
returns should be viewed as a hypothetical rather than actual performance
figure. Average annual and cumulative total returns usually will include
the effect of paying the applicable sales charge.
The Funds also may quote performance in terms of yield. YIELD refers
to the income generated by an investment in a Fund over a given period of
time, expressed as an annual percentage rate. Yields are calculated
according to a standard that is required for all stock and bond funds. High
Income Municipal Fund and Limited Term Tax-Exempt Fund may quote a
TAX-EQUIVALENT YIELD , which shows the taxable yield an investor
would have to earn before taxes to equal the Fund's tax-free yield.
A tax-equivalent yield is calculated by dividing a Fund's yield by the
result of one minus a stated federal or state tax rate. Because yield
calculations differ from other accounting methods, the quoted yield may not
equal the income actually paid to shareholders. This difference may be
significant for funds whose investments are denominated in foreign
currencies. In calculating yield, the Funds may from time to time use a
security's coupon rate instead of its yield to maturity in order to reflect
the risk premium on that security. This practice will have the effect of
reducing a Fund's yield.
For additional performance information, please contact your investment
professional or Distributors for a free Annual Report and SAI.
PORTFOLIO TRANSACTIONS
FMR uses various brokerage firms to carry out each Fund's equity security
transactions Fixed-income securities are generally traded in the
over-the-counter market through broker-dealers. A broker-dealer is a
securities firm or bank which makes a market for securities by offering to
buy at one price and sell at a slightly higher price. The difference is
known as a spread. Foreign securities are normally traded in foreign
countries since the best available market for foreign securities is often
on foreign markets. In transactions on foreign stock exchanges, brokers'
commissions are generally fixed and are often higher than in the U.S.,
where commissions are negotiated. Since FMR, directly or through affiliated
sub-advisers, places a large number of transactions, including those of
Fidelity's other funds, the Funds pay lower commissions than those paid by
individual investors, and broker-dealers are willing to work with the Funds
on a more favorable spread.
The Funds have authorized FMR to allocate transactions to some
broker-dealers who help distribute the Fund's shares or the shares of
Fidelity's other funds to the extent permitted by law, and on an agency
basis to Fidelity Brokerage Services, Inc. (FBSI) and Fidelity Brokerage
Services Ltd. (FBSL), affiliates of FMR. FMR will make such allocations if
commissions are comparable to those charged by non-affiliated qualified
broker-dealers for similar services.
FMR may also allocate brokerage transactions to a Fund's custodian, acting
as a broker-dealer, or other broker-dealers, so long as transaction quality
and commission rates are comparable to those of other broker-dealers, where
the broker-dealer will allocate a portion of the commissions paid toward
payment of a Fund's expenses. These expenses currently include transfer
agent fees and custodian fees.
Higher commissions may be paid to those firms that provide research,
valuation and other services to the extent permitted by law. FMR also is
authorized to allocate brokerage transactions to FBSI in order to secure
from FBSI research services produced by third party, independent entities.
FMR may use this research information in managing each Fund's assets, as
well as assets of other clients.
When consistent with its investment objective, each fund may engage in
short-term trading. Also, a security may be sold and another of comparable
quality simultaneously purchased to take advantage of what FMR believes to
be a temporary disparity in the normal yield relationship of the two
securities.
The frequency of portfolio transactions - the turnover rate -
will vary from year to year depending on market conditions. Each Fund's
turnover rate for the most recent fiscal year ended was: 183% (Strategic
Opportunities) ; 120% (Equity Portfolio Income); 79% (High Yield);
59% (Limited Term Bond); 333% (Government Investment); 27% (High Income
Municipal); and 46% Limited Term Tax-Exempt. The annualized portfolio
turnover rate of Emerging Markets Income is not expected to
exceed 200% for its first fiscal period ended December 31, 1994.
Because a high portfolio turnover rate increases transaction costs
and may increase taxable capital gains, FMR carefully weighs the
anticipated benefits of short-term investing against these consequences.
THE TRUSTS AND THE FIDELITY ORGANIZATION
Each Trust is an open-end management investment company. Each Trust
was established by a separate Declaration of Trust as a Massachusetts
business trust as follows: April 24, 1986, ( Fidelity Advisor Series
II ) ; May 17, 1982, ( Fidelity Advisor Series III ) ; May
6, 1983, ( Fidelity Advisor Series IV ) ; April 24, 1986,
( Fidelity Advisor Series V ) ; June 1, 1983, ( Fidelity
Advisor Series VI ) ; and September 23, 1983, ( Fidelity Advisor
Series VIII ) . Each Trust has its own Board of Trustees that
supervises Fund activities and reviews the Funds ' contractual
arrangements with companies that provide the Funds with services. As
Massachusetts business trusts, the Trusts are not required to hold
annual shareholder meetings, although special meetings may be called for a
class of shares, a Fund, or a Trust as a whole for purposes such as
electing or removing Trustees, changing fundamental investment policies or
limitations, or approving a management contract or plan of distribution. As
a shareholder, you receive one vote for each share and fractional votes for
fractional shares of the Fund you own. For shareholders of Equity Portfolio
Income, the number of votes to which you are entitled is based on the
dollar value of your investment. Separate votes are taken by each class of
shares or each Fund if a matter affects just that class of shares or Fund,
respectively. There is a remote possibility that one Fund might become
liable for any misstatement in the prospectus about another Fund. Each
class of shares is offered through a separate prospectus.
CLASS A. Each Fund offers a class of shares with a maximum 4.75%
front-end sales charge to retail investors who engage an investment
professional for investment advice (Class A shares). The initial and
subsequent investment minimums for Class A shares are $2,500 and $250,
respectively. The minimum account balance for Class A investors is $1,000.
Reduced sales charges are applicable to purchases of $50,000 or more of
Class A shares of one Fund alone or in combination with purchases of
shares of other Class A or Class B Fidelity Advisor Funds. Class A
investors also may qualify for a reduction in sales charge under the Rights
of Accumulation or Letter of Intent programs. Sales charges on Class A
shares are waived for certain groups of investors. In addition, Class A
investors may participate in various investment programs. Class A shares of
each Fund may be exchanged for Class A shares of other Fidelity Advisor
Funds. Transfer agent and shareholder services for Class A shares of
Fidelity Advisor Strategic Opportunities, Fidelity Advisor Equity Portfolio
Income, Fidelity Advisor Emerging Markets Income, Fidelity Advisor High
Yield, Fidelity Advisor Limited Term Bond and Fidelity Advisor
Government Investment are performed by State Street Bank and Trust Company;
and for Class A shares of Fidelity Advisor High Income Municipal and
Fidelity Advisor Limited Term Tax-Exempt through a sub-contractual
arrangement. For e ach Fund's respective fiscal year ended, total
operating expenses as a percentage of average net assets for Class A
shares were as follows: 1.57% for Fidelity Advisor Strategic Opportunities;
1.77% for Fidelity Advisor Equity Portfolio Income; 1.11% for Fidelity
Advisor High Yield; 1.23% for Fidelity Advisor Limited Term Bond;
.6 8 % for Fidelity Advisor Government Investment; .92% for High
Income Municipal; and .90% , after reimbursement, for Fidelity
Advisor Limited Term Tax- Exempt. Class A shares of Fidelity Advisor
Emerging Markets Income ha ve an estimated total operating expense of
1.50% for the first year.
Under the Class A Distribution and Service Plans, the Class A shares
of Fidelity Advisor Strategic Opportunities, Fidelity Advisor Equity
Portfolio Income and Fidelity Advisor Emerging Markets Income each
pay a nnually a distribution fee of .65% of average net assets;
Fidelity Advisor High Yield, Fidelity Advisor Government Investment,
Fidelity Advisor High Income Municipal, Fidelity Advisor Limited Term Bond
Fund and Fidelity Advisor Limited Term Tax-Exempt Fund each pay annually
a distribution fee of .25% of average net assets . Up to the
full amount of the distribution fee paid by Class A of each Fund to
Distributors may be reallowed to investment professionals based upon the
level of marketing and distribuiton services provided. Class A shares
do not pay a shareholder service fee in addition to the distribution
fee. Investment professionals may receive different levels of compensation
with respect to one particular class of shares over another class of shares
in the Funds.
INSTITUTIONAL SHARES. Fidelity Advisor Equity Portfolio Income, Fidelity
Advisor Limited Term Bond Fund and Fidelity Advisor Limited Term Tax-Exempt
Fund each offers shares to institutional and retail investors. Shares
offered to institutional investors (Institutional shares) are offered
continuously at NAV to (I) banks and trust institutions investing for their
own accounts or for accounts of their trust customers, (II) plan sponsors
meeting the ERISA definition of fiduciary, (III) government entities or
authorities and (IV) corporations with at least $100 million in annual
revenues. The initial and subsequent investment minimums for Institutional
shares are $100,000 and $2,500, respectively. The minimum account balance
is $40,000. Institutional shares of one Fund may be exchanged for
Institutional shares of another Fidelity Advisor Fund. Transfer agent and
shareholder services for Institutional shares are performed by FIIOC. For
the fiscal year ended November 30, 1993, total operating expenses for
Institutional shares as a percent of average net assets were as follows:
.79% for Fidelity Advisor Equity Portfolio Income, .64% for Fidelity
Advisor Limited Term Bond and .65% for Fidelity Advisor Limited Term
Tax-Exempt. Institutional shares have Distribution and Service Plans that
do not provide for payment of a separate distribution fee; rather the Plans
recognize that FMR may use its management fee and other resources to pay
expenses for distribution-related activities and may make payments to
investment professionals that provide shareholder support services or sell
Institutional shares. Institutional shares also do not bear a shareholder
service fee. Investment professionals currently do not receive
compensation in connection with distribution and/or shareholder servicing
of Institutional shares.
Strategic Opportunities offers a class of shares with a maximum 4.75%
front-end sales charge to current holders of such shares (Initial Shares).
New investors may not purchase Initial Shares. Current shareholders may
make additional investments in Initial Shares of $250 or more. The minimum
account balance for Initial Shares is $1,000. Reduced sales charges apply
to purchases of $50,000 or more of Initial Shares. An investor in Initial
Shares also may qualify for a reduction of the sales charge under the
Rights of Accumulation or Letter of Intent programs. Sales charges on
Initial Shares are waived for certain groups of investors. Transfer agent
and shareholer services for Initial Shares are performed by Service. For
the fiscal year ended September 30, 1993, total operating expenses as a
percentage of net asset value for Initial Shares were .89%.
Strategic Opportunities offers three classes of shares, Initial Shares,
Class A shares and Class B shares. Class B shares are offered through this
prospectus. Initial Shares and Class A shares are described above and
offered through separate prospectuses. Investment performance will be
measured separately for Initial Shares, Class A shares and Class B shares
and the least of the three results obtained will be used in calculating the
performance adjustment to the management fee paid by Strategic
Opportunities.
Fidelity Investments is one of the largest investment management
organizations in the U.S. and has its principal business address at 82
Devonshire Street, Boston, MA 02109. It includes a number of different
companies that provide a variety of financial services and products. The
Trusts employ various Fidelity companies to perform certain activities
required to operate the Funds.
Fidelity Management & Research Company is the original Fidelity company
founded in 1946. It provides a number of mutual funds and other clients
with investment research and portfolio management services. It maintains a
large staff of experienced investment personnel and a full complement of
related support facilities. As of April 30 , 1994, FMR advised funds
having approximately 1 6 million shareholder accounts with a total
value of more than $225 billion. Fidelity Distributors Corp. distributes
shares for the Fidelity funds.
FMR Corp. is the parent company for the Fidelity companies. Through
ownership of voting common stock, Edward C. Johnson 3d (President and a
Trustee of the Trust), Johnson family members, and various trusts for the
benefit of Johnson family members form a controlling group with respect to
FMR Corp.
Peter J. Allegrini is manager of Advisor High Income Municipal, which he
has managed since February 1992. Mr. Allegrini also manages Spartan
Connecticut Municipal High Yield, Michigan Tax-Free High Yield and Ohio
Tax-Free High Yield. Mr. Allegrini joined Fidelity in 1982.
Robert K. Citrone is manager of Advisor Emerging Markets Income. He also
manages Fidelity New Markets Income F und, which he has managed since
May 1993 and serves as strategist for Fidelity's emerging market
fixed-income investments. Mr. Citrone joined Fidelity in 1990.
Bettina E. Doulton has been manager of Advisor Equity Portfolio Income
since August 1993, and VIP Equity-Income since July 1993. Previously, she
managed Select Automotive Portfolio and assisted on Equity-Income Portfolio
and Magellan. Ms. Doulton also served as an analyst following the domestic
and European automotive and tire manufacturing industry as well as the
gaming and lodging industry. She joined Fidelity in 1985.
Margaret L. Eagle is vice president and manager of Advisor High Yield,
which she has managed since it began in January 1987. Ms. Eagle also
manages several pension fund accounts. Previously, she managed Spartan High
Income, and High Income (now Capital & Income). She also managed the
bond portion of Puritan (Registered trademark) . Ms. Eagle joined
Fidelity in 1980.
Daniel R. Frank is vice president and manager of Advisor Strategic
Opportunities , which he has managed since December 1983. Previously,
he was an assistant to Peter Lynch on Magellan. Mr. Frank joined Fidelity
in 1979.
Michael S. Gray is vice president and manager of Advisor Limited Term Bond,
which he has managed since August 1987. Mr. Gray also manages Investment
Grade Bond, Spartan Investment Grade Bond, and Intermediate Bond. Mr. Gray
joined Fidelity in 1982.
John (Jack) F. Haley Jr. is vice president and manager of Advisor Limited
Term Tax-Exempt, which he has managed since September 1985. Mr.
Haley also manages California Tax-Free Insured, California Tax-Free High
Yield, and Spartan California Municipal High Yield. Mr. Haley joined
Fidelity in 1981.
Curtis Hollingsworth is vice president and manager of Advisor Government
Investment, which he has managed since January 1992. Mr. Hollingsworth also
manages Short-Intermediate Government, Government Securities, Institutional
Short-Intermediate Government, Spartan Limited Maturity Government Bond,
Spartan Long-Term Government Bond and Spartan Short-Intermediate
Government. He joined Fidelity in 1983.
APPENDIX
The following paragraphs provide a brief description of securities in which
the Funds may invest and transactions they may make . T he
Funds are not limited by this discussion , however, and may purchase
other types of securities and enter into other types of transactions if
they are consistent with the Fund's investment objective and
policies.
DELAYED-DELIVERY TRANSACTIONS. Securities may be bought and sold on a
when-issued or delayed-delivery basis, with payment and delivery taking
place at a future date. The market value of securities purchased in this
way may change before the delivery date which could increase fluctuations
in a Fund's yield. Ordinarily, a Fund will not earn interest on securities
purchased until they are delivered.
EQUITY SECURITIES include common stocks, preferred stocks, convertible
securities, and warrants. While FMR believes that these types of
investments in emerging markets present the possibility for significant
capital appreciation over the long term, they also entail a high degree of
risk. The prices of emerging market equities can fluctuate dramatically in
response to company, market, economic, or political news.
FOREIGN CURRENCIES. The value of investments and the value of dividends and
interest earned may be significantly affected by changes in currency
exchange rates. Some foreign currency values may be volatile, and there is
the possibility of governmental controls on currency exchange or
governmental intervention in currency markets, which could adversely affect
a Fund. Although FMR may attempt to manage currency exchange rate risks,
there is no assurance that FMR will do so at an appropriate time or that
FMR will be able to predict exchange rates accurately. For example, if FMR
increases a Fund's exposure to a foreign currency, and that currency's
value subsequently falls, FMR's currency management may result in increased
losses to the Fund. Similarly, if FMR hedges the Fund's exposure to a
foreign currency, and that currency's value rises, the Fund will lose the
opportunity to participate in the currency's appreciation.
CURRENCY MANAGEMENT. The relative performance of foreign currencies is an
important factor in a Fund's performance. FMR may manage a Fund's exposure
to various currencies to take advantage of different yield, risk, and
return characteristics that different currencies can provide for United
States investors.
To manage exposure to currency fluctuations, a Fund may enter into currency
exchange contracts (agreements to exchange one currency for another at a
future date) or currency swap agreements, buy and sell options and futures
contracts relating to foreign currencies, and purchase securities indexed
to foreign currencies. A Fund will use currency exchange contracts in the
normal course of business to lock in an exchange rate in connection with
purchase and sales of securities denominated in foreign currencies. Other
currency management strategies allow FMR to hedge portfolio securities, to
shift investment exposure from one currency to another, or to attempt to
profit from anticipated declines in the value of a foreign currency
relative to the anticipated declines in the value of a foreign currency
relative to the U.S. dollar. There is no limitation on the amount of a
Fund's assets that may be committed to currency strategies.
FOREIGN INVESTMENTS involve additional risks. Foreign securities and
securities denominated in or indexed to foreign currencies may be affected
by the strength of foreign currencies relative to the U.S. dollar, or by
political or economic developments in foreign countries. Foreign companies
may not be subject to accounting standards or governmental supervision
comparable to U.S. companies, and there may be less public information
about their operations. In addition to the political and economic
factors that can affect foreign securities, a governmental issuer may be
unwilling to repay principal and interest when due, and may require that
the conditions for payment be renegotiated. These factors could make
foreign investments, especially those in developing countries, more
volatile. FMR considers these factors in making investments for the
Funds.
A Fund may enter into currency exchange contracts (agreements to exchange
one currency for another at a future date) to manage currency risks and to
facilitate transactions in foreign securities. Although currency forward
contracts can be used to protect the Fund from adverse exchange rate
changes, they involve a risk of loss if FMR fails to predict foreign
currency values correctly.
ILLIQUID INVESTMENTS. Under the supervision of the Board of Trustees, FMR
determines the liquidity of each Fund's investments. The absence of a
trading market can make it difficult to ascertain a market value for
illiquid investments. Disposing of illiquid investments may involve
time-consuming negotiation and legal expenses, and it may be difficult or
impossible for a Fund to sell them promptly at an acceptable price.
INDEXED SECURITIES. Indexed securities values are linked to currencies,
interest rates, commodities, indices, or other financial indicators. Most
indexed securities are short to intermediate term fixed-income securities
whose values at maturity or interest rates rise or fall according to the
change in one or more specified underlying instruments. Indexed securities
may be positively or negatively indexed (i.e., their value may increase or
decrease if the underlying instrument appreciates), and may have return
characteristics similar to direct investments in the underlying instrument
or to one or more options on the underlying instrument. Indexed securities
may be more volatile than the underlying instrument itself.
INTERFUND BORROWING PROGRAM. Interfund loans and borrowings normally will
extend overnight, but can have a maximum duration of seven days. A Fund
will lend through the program only when the returns are higher than those
available at the same time from other short-term instruments (such as
repurchase agreements), and will borrow through the program only when the
costs are equal to or lower than the cost of bank loans. Each Fund will not
lend more than 5% (Equity Funds) or 7.5% (Fixed-Income Funds) of its assets
to other funds, and will not borrow through the program if, after doing so,
total outstanding borrowings would exceed 15% of total assets. Loans may be
called on one day's notice, and a Fund may have to borrow from a bank at a
higher interest rate if an interfund loan is called or not renewed. Any
delay in repayment to a lending fund could result in a lost investment
opportunity or additional borrowing costs.
LOANS AND OTHER DIRECT DEBT INSTRUMENTS are interests in amounts owed by a
corporate, governmental or other borrower to another party. They may
represent amounts owed to lenders or lending syndicates (loans and loan
participations), to suppliers of goods or services (trade claims or other
receivables), or to other parties. Direct debt instruments involve the risk
of loss in case of default or insolvency of the borrower and may offer less
legal protection to a Fund in the event of fraud or misrepresentation. In
addition, loan participations involve a risk of insolvency of the lending
bank or other financial intermediary. Direct debt instruments may also
include standby financing commitments that obligate a Fund to supply
additional cash to the borrower on demand.
LOWER-QUALITY DEBT SECURITIES are those rated Ba or lower by Moody's
or BB or lower by S&P that have poor protection against default in the
payment of principal and interest or may be in default. These securities
are often considered to be speculative and involve greater risk of loss or
price changes due to changes in the issuer's capacity to pay. The market
prices of lower-rated debt securities may fluctuate more than those of
higher-rated debt securities, and may decline significantly in periods of
general economic difficulty, which may follow periods of rising interest
rates. See "Debt Obligations" on page .
SOVEREIGN DEBT OBLIGATIONS are debt instruments issued or guaranteed by
foreign governments or their agencies, including debt of Latin American
nations or other developing countries. Sovereign debt may be in the form of
conventional securities or other types of debt instruments such as loans or
loan participations. Sovereign debt of developing countries may involve a
high degree of risk, and may be in default or present the risk of default.
Governmental entities responsible for repayment of the debt may be unable
or unwilling to repay principal and interest when due, and may require
renegotiation or rescheduling of debt payments. In addition, prospects for
repayment of principal and interest may depend on political as well as
economic factors.
MORTGAGE-BACKED SECURITIES are issued by government entities and
non-government entities such as banks, mortgage lenders, or other financial
institutions.
A mortgage-backed security may be an obligation of the issuer backed by a
mortgage or pool of mortgages or a direct interest in an underlying pool of
mortgages. Some mortgage-backed securities, such as collateralized mortgage
obligations (CMOs), make payments of both principal and interest at a
variety of intervals; others make semiannual interest payments at a
predetermined rate and repay principal at maturity (like a typical bond).
Mortgage-backed securities are based on different types of mortgages
including those on commercial real estate or residential properties. Other
types of mortgage-backed securities will likely be developed in the future,
and a Fund may invest in them if FMR determines they are consistent with a
Fund's investment objective and policies.
The value of mortgage-backed securities may change due to shifts in the
market's perception of issuers. In addition, regulatory or tax changes may
adversely affect the mortgage securities market as a whole. Non-government
mortgage-backed securities may offer higher yields than those issued by
government entities, but also may be subject to greater price changes than
government issues. Mortgage-backed securities are subject to prepayment
risk. Prepayment, which occurs when unscheduled or early payments are made
on the underlying mortgages, may shorten the effective maturities of these
securities and may lower their total returns.
STRIPPED MORTGAGE-BACKED SECURITIES are created when a U.S. government
agency or a financial institution separates the interest and principal
components of a mortgage-backed security and sells them as individual
securities. The holder of the "principal-only" security (PO) receives the
principal payments made by the underlying mortgage-backed security, while
the holder of the "interest-only" security (IO) receives interest payments
from the same underlying security. The prices of stripped mortgage-backed
securities may be particularly affected by changes in interest rates. As
interest rates fall, prepayment rates tend to increase, which tends to
reduce prices of IOs and increase prices of POs. Rising interest rates can
have the opposite effect.
ASSET-BACKED SECURITIES represent interests in pools of consumer loans
(generally unrelated to mortgage loans) and most often are structured as
pass-through securities. Interest and principal payments ultimately depend
on payment of the underlying loans by individuals, although the securities
may be supported by letters of credit or other credit enhancements. The
value of asset-backed securities may also depend on the creditworthiness of
the servicing agent for the loan pool, the originator of the loans, or the
financial institution providing the credit enhancement.
A Fund may purchase units of beneficial interest in pools of purchase
contracts, financing leases, and sales agreements entered into by
municipalities. These municipal obligations may be created when a
municipality enters into an installment purchase contract or lease with a
vendor and may be secured by the assets purchased or leased by the
municipality. However, except in very limited circumstances, there will be
no recourse against the vendor if the municipality stops making payments.
The market for tax-exempt asset-backed securities is still relatively new.
These obligations are likely to involve unscheduled prepayments of
principal.
OPTIONS AND FUTURES CONTRACTS are bought and sold to manage a Fund's
exposure to changing interest rates, security prices, and currency exchange
rates. Some options and futures strategies, including selling futures,
buying puts, and writing calls, tend to hedge a Fund's investment against
price fluctuations. Other strategies, including buying futures, writing
puts, and buying calls, tend to increase market exposure. Options and
futures may be combined with each other or with forward contracts in order
to adjust the risk and return characteristics of the overall strategy. A
Fund may invest in options and futures based on any type of security,
index, or currency, including options and futures traded on foreign
exchanges and options not traded on exchanges.
Options and futures can be volatile investments and involve certain risks.
If FMR applies a hedge at an inappropriate time or judges market conditions
incorrectly, options and futures strategies may lower a Fund's return. A
Fund could also experience losses if the prices of its options and futures
positions were poorly correlated with its other investments, or if it could
not close out its positions because of an illiquid secondary market.
Options and futures do not pay interest, but may produce taxable capital
gains.
Each Fund will not hedge more than 25% of its total assets by selling
futures, buying puts, and writing calls under normal conditions. In
addition each Fund will not buy futures or write puts whose underlying
value exceeds 25% of its total assets, and will not buy calls with a value
exceeding 5% of its total assets.
REAL ESTATE BACKED SECURITIES. Real estate industry companies may include
among others: real estate investment trusts; brokers or real estate
developers; and companies with substantial real estate holdings, such as
paper and lumber producers and hotel and entertainment companies. Companies
engaged in the real estate industry may be subject to certain risks
including: declines in the value of real estate, risks related to general
and local conditions, overbuilding and increased competition, increases in
property taxes and operating expenses, and variations in rental income.
REPURCHASE AGREEMENTS AND SECURITIES LOANS. In a repurchase agreement, a
Fund buys a security at one price and simultaneously agrees to sell it back
at a higher price. A Fund may also make securities loans to broker-dealers
and institutional investors, including FBSI. In the event of the bankruptcy
of the other party to either a repurchase agreement or a securities loan, a
Fund could experience delays in recovering its cash or the securities it
lent. To the extent that, in the meantime, the value of the securities
purchased had decreased or the value of the securities lent had increased,
a Fund could experience a loss. In all cases, FMR must find the
creditworthiness of the other party to the transaction satisfactory.
FOREIGN REPURCHASE AGREEMENTS may be less well secured than U.S. repurchase
agreements, and may be denominated in foreign currencies. They also involve
greater risk of loss if the counterparty defaults. Some counterparties in
these transactions may be less creditworthy than those in U.S. markets.
RESTRICTED SECURITIES are securities which cannot be sold to the public
without registration under the Securities Act of 1933. Unless registered
for sale, these securities can only be sold in privately negotiated
transactions or pursuant to an exemption from registration.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a Fund
temporarily transfers possession of a portfolio instrument to another
party, such as a bank or broker-dealer, in return for cash. At the same
time, the Fund agrees to repurchase the instrument at an agreed-upon price
and time. A Fund expects that it will engage in reverse repurchase
agreements for temporary purposes such as to fund redemptions. Reverse
repurchase agreements may increase the risk of fluctuation in the market
value of a Fund's assets or in its yield.
SHORT SALES. If a Fund enters into short sales with respect to stocks
underlying its convertible security holdings, the transaction may help to
hedge against the effect of stock price declines, but may result in losses
if a convertible security's price does not track the price of its
underlying equity. Under normal conditions convertible securities hedged
with short sales are not currently expected to exceed 15% of a Fund's total
assets.
SWAP AGREEMENTS. As one way of managing its exposure to different types of
investments, a Fund may enter into interest rate swaps, currency swaps, and
other types of swap agreements such as caps, collars, and floors. In a
typical interest rate swap, one party agrees to make regular payments equal
to a floating interest rate times a "notional principal amount," in return
for payments equal to a fixed rate times the same amount, for a specified
period of time. If a swap agreement provides for payments in different
currencies, the parties might agree to exchange the notional principal
amount as well. Swaps may also depend on other prices or rates, such as the
value of an index or mortgage prepayment rates.
In a typical cap or floor agreement, one party agrees to make payments only
under specified circumstances, usually in return for payment of a fee by
the other party. For example, the buyer of an interest rate cap obtains the
right to receive payments to the extent that a specified interest rate
exceeds an agreed-upon level, while the seller of an interest rate floor is
obligated to make payments to the extent that a specified interest rate
falls below an agreed-upon level. An interest rate collar combines elements
of buying a cap and selling a floor.
Swap agreements will tend to shift a Fund's investment exposure from one
type of investment to another. For example, if a Fund agreed to exchange
payments in dollars for payments in foreign currency, the swap agreement
would tend to decrease the Fund's exposure to U.S. interest rates and
increase its exposure to foreign currency and interest rates. Caps and
floors have an effect similar to buying or writing options. Depending on
how they are used, swap agreements may increase or decrease the overall
volatility of a Fund's investments and its share price and yield.
Swap agreements are sophisticated hedging instruments that typically
involve a small investment of cash relative to the magnitude of risks
assumed. As a result, swaps can be highly volatile and may have a
considerable impact on a Fund's performance. Swap agreements are subject to
risks related to the counterparty's ability to perform, and may decline in
value if the counterparty's creditworthiness deteriorates. A Fund may also
suffer losses if it is unable to terminate outstanding swap agreements or
reduce its exposure through offsetting transactions.
VARIABLE OR FLOATING RATE OBLIGATIONS, including certain participation
interests in municipal obligations, have interest rate adjustment formulas
that help to stabilize their market values. Many variable and floating rate
instruments also carry demand features that permit the fund to sell them at
par value plus accrued interest on short notice.
WARRANTS entitle the holder to buy equity securities at a specific price
for a specific period of time. Warrants tend to be more volatile than their
underlying securities. Also, the value of the warrant does not necessarily
change with the value of the underlying securities and a warrant ceases to
have value if it is not exercised prior to the expiration date.
ZERO COUPON BONDS do not make interest payments; instead, they are sold at
a deep discount from their face value and are redeemed at face value when
they mature. Because zero coupon bonds do not pay current income, their
prices can be very volatile when interest rates change. In calculating its
daily dividend, a Fund takes into account as income a portion of the
difference between a zero coupon bond's purchase price and its face value.
A broker-dealer creates a DERIVATIVE ZERO by separating the interest and
principal components of a U.S. Treasury security and selling them as two
individual securities. CATS (Certificates of Accrual on Treasury
Securities), TIGRS (Treasury Investment Growth Receipts), and TRS (Treasury
Receipts) are examples of derivative zeros. Government Investment Fund has
been advised that the staff of the Division of Investment Management of the
SEC does not consider these instruments U.S. government securities as
defined by the 1940 Act. Therefore, Government Investment Fund will not
treat these obligations as U.S. government securities for purposes of the
65% portfolio composition test mentioned on page 11 .
The Federal Reserve Bank creates STRIPS (Separate Trading of Registered
Interest and Principal of Securities) by separating the interest and
principal components of an outstanding U.S. Treasury bond and selling them
as individual securities. Bonds issued by the Resolution Funding
Corporation (REFCORP) and the Financing Corporation (FICO) can also be
separated in this fashion. ORIGINAL ISSUE ZEROS are zero coupon securities
originally issued by the U.S. government or a government agency.
DEBT OBLIGATIONS. The table below provides a summary of ratings assigned
to debt holdings (not including money market instruments) in Funds which
have the ability to invest over 5% in lower-rated debt securities. These
figures are dollar-weighted averages of month-end portfolio holdings during
the thirteen months ended September 30, 1993 (Strategic Opportunities)
October 31, 1993 (High Yield and High Income Municipal,) and November 30,
1993 (Equity Portfolio Income), presented as a percentage of total
investments. These percentages are historical and are not necessarily
indicative of the quality of current or future portfolio holdings, which
may vary. As of December 31, 1993, Emerging Markets Income had no
investments below Baa/BBB.
The dollar-weighted average of debt securities not rated by either Moody's
or S&P amounted to .89% (Strategic Opportunities) .57% (Equity
Portfolio Income), 18.74% (High Yield), and 25.23% (High Income Municipal)
of total investments. This may include securities rated by other nationally
recognized rating organizations, as well as unrated securities. Unrated
securities are not necessarily lower-quality securities.
MOODY'S RATING & PERCENTAGE OF INVESTMENTS
MOODY'S STRATEGIC EQUITY HIGH HIGH
RATING OPPORTUNIT PORTFOLIO YIELD INCOME
IES INCOME MUNICIPA
L

Aaa/Aa/A 15.99 1.02% .02% 27.39
% %

Baa -- .77% -- 20.40
%

Ba .18% 1.25% 6.60% 8.10%

B .22% 1.27% 34.26 .63%
%

Caa 1.63% .06% 9.09% --

Ca/C -- -- 4.50% --

S&P RATING & PERCENTAGE OF INVESTMENTS
S&P STRATEGIC EQUITY HIGH HIGH
RATING OPPORTUNIT PORTFOLIO YIELD INCOME
IES INCOME MUNICIPAL

AAA/AA/ 15.99 1.03% .97% 29.05
A % %

BBB -- .84% 1.09% 18.73
%

BB -- .98% 6.94% 4.37%

B .80% 1.35% 33.28 1.75%
%

CCC -- .15% 7.62% .04%

CC/C -- -- 1.55% --

D .89% .03% 5.58% --

THE FOLLOWING DESCRIBES MUNICIPAL INSTRUMENTS:
MUNICIPAL SECURITIES include GENERAL OBLIGATION SECURITIES, which are
backed by the full taxing power of a municipality, and REVENUE SECURITIES,
which are backed by the revenues of a specific tax, project, or facility.
INDUSTRIAL REVENUE BONDS are a type of revenue bond backed by the credit
and security of a private issuer and may involve greater risk. PRIVATE
ACTIVITY MUNICIPAL SECURITIES, which may be subject to the federal
alternative minimum tax, include securities issued to finance housing
projects, student loans, and privately owned solid waste disposal
and water and sewage treatment facilities.
TAX AND REVENUE ANTICIPATION NOTES are issued by municipalities in
expectation of future tax or other revenues, and are payable from those
specific taxes or revenues. BOND ANTICIPATION NOTES normally provide
interim financing in advance of an issue of bonds or notes, the proceeds of
which are used to repay the anticipation notes. TAX-EXEMPT COMMERCIAL PAPER
is issued by municipalities to help finance short-term capital or operating
needs.
MUNICIPAL LEASE OBLIGATIONS are issued by a state or local government or
authority to acquire land and a wide variety of equipment and facilities.
These obligations typically are not fully backed by the municipality's
credit, and their interest may become taxable if the lease is assigned. If
funds are not appropriated for the following year's lease payments, the
lease may terminate, with the possibility of significant loss to a Fund.
CERTIFICATES OF PARTICIPATION in municipal lease obligations or installment
sales contracts entitle the holder to a proportionate interest in the
lease-purchase payments made.
RESOURCE RECOVERY BONDS are a type of revenue bond issued to build
facilities such as solid waste incinerators or waste-to-energy plants.
Typically, a private corporation will be involved, at least during the
construction phase, and the revenue stream will be secured by fees or rents
paid by municipalities for use of the facilities. The viability of a
resource recovery project, environmental protection regulations, and
project operator tax incentives may affect the value and credit quality of
resource recovery bonds.
A DEMAND FEATURE is a put that entitles the security holder to repayment of
the principal amount of the underlying security, upon notice at any time or
at specified intervals. A STANDBY COMMITMENT is a put that entitles the
security holder to same-day settlement at amortized cost plus accrued
interest.
Issuers or financial intermediaries who provide demand features or standby
commitments often support their ability to buy securities on demand by
obtaining LETTERS OF CREDIT (LOCS) or other guarantees from domestic or
foreign banks. LOCs also may be used as credit supports for other types of
municipal instruments. FMR may rely upon its evaluation of a bank's credit
in determining whether to purchase an instrument supported by an LOC. In
evaluating a foreign bank's credit, FMR will consider whether adequate
public information about the bank is available and whether the bank may be
subject to unfavorable political or economic developments, currency
controls, or other governmental restrictions that might affect the bank's
ability to honor its credit commitment.
INVERSE FLOATERS are instruments whose interest rates bear an inverse
relationship to the interest rate on another security or the value of an
index. Changes in the interest rate on the other security or index
inversely affect the residual interest rate paid on the inverse floater,
with the result that the inverse floater's price will be considerably more
volatile than that of a fixed-rate bond. For example, a municipal issuer
may decide to issue two variable rate instruments instead of a single
long-term, fixed-rate bond. The interest rate on one instrument reflects
short-term interest rates, while the interest rate on the other instrument
(the inverse floater) reflects the approximate rate the issuer would have
paid on a fixed-rate bond, multiplied by two, minus the interest rate paid
on the short-term instrument. Depending on market availability, the two
portions may be recombined to form a fixed-rate municipal bond. The market
for inverse floaters is relatively new.
REFUNDING CONTRACTS. A Fund may purchase securities on a when-issued basis
in connection with the refinancing of an issuer's outstanding indebtedness.
Refunding contracts require the issuer to sell and the Fund to buy refunded
municipal obligations at a stated price and yield on a settlement date that
may be several months or several years in the future.
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S CORPORATE BOND RATINGS:
AAA - Bonds rated Aaa are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as "gilt
edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective
elements are likely to change, such changes as can be visualized are most
unlikely to impair the fundamentally strong position of such issues.
AA - Bonds rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other
elements present which make the long-term risks appear somewhat larger than
in Aaa securities.
A - Bonds rated A possess many favorable investment attributes and are to
be considered as upper - medium - grade obligations. Factors
giving security to principal and interest are considered adequate but
elements may be present which suggest a susceptibility to impairment
sometime in the future.
BAA - Bonds rated Baa are considered as medium-grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any
great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
BA - Bonds rated Ba are judged to have speculative elements. Their future
cannot be considered as well assured. Often the protection of interest and
principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B - Bonds rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or maintenance of
other terms of the contract over any long period of time may be small.
CAA - Bonds rated Caa are of poor standing. Such issues may be in default
or there may be present elements of danger with respect to principal or
interest.
CA - Bonds rated Ca represent obligations which are speculative in a high
degree. Such issues are often in default or have other marked
short-comings.
C - Bonds rated C are the lowest - rated class of bonds and issued so
rated can be regarded as having extremely poor prospects of ever attaining
any real investment standing.
Moody's applies numerical modifiers, 1, 2, and 3, in each generic rating
classification from Aa through C in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its
generic rating category; the modifier 2 indicates a mid - range
ranking; and the modifier 3 indicates that the issue ranks in the lower end
of its generic rating category.
DESCRIPTION OF STANDARD & POOR'S CORPORATION'S CORPORATE BOND RATINGS:
AAA - Debt rated AAA has the highest rating assigned by Standard &
Poor's to a debt obligation. Capacity to pay interest and repay principal
is extremely strong.
AA - Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher - rated issues only in small
degree.
A - Debt rated A has a strong capacity to pay interest and repay principal,
although it is somewhat more susceptible to the adverse effects of changes
in circumstances and economic conditions.
BBB - Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in
higher - rated categories.
BB - Debt rated BB has less near - term vulnerability to default than
other speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions which could
lead to inadequate capacity to meet timely interest and principal payments.
B - Debt rated B has a greater vulnerability to default but currently has
the capacity to meet interest payments and principal repayments. Adverse
business, financial, or economic conditions will likely impair capacity or
willingness to pay interest and repay principal. The B rating category is
also used for debt subordinated to senior debt that is assigned an actual
or implied BB rating.
CCC - Debt rated CCC has a currently identifiable vulnerability to default,
and is dependent upon favorable business, financial, and economic
conditions to meet timely payment of interest and repayment of principal.
In the event of adverse business, financial, or economic conditions, it is
not likely to have the capacity to pay interest and repay principal.
CC - Debt rated CC is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC debt rating.
C - The rating C is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC debt rating. The C rating may be
used to cover a situation where a bankruptcy petition has been filed but
debt service payments are continued.
CI - The rating CI is reserved for income bonds on which no interest is
being paid.
D - Debt rated D is in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due even
if the applicable grace period has not expired, unless S&P believes
that such payments will be made during such grace period. The D rating will
also be used upon the filing of a bankruptcy petition if debt service
payments are jeopardized.
The ratings from AA to D may be modified by the addition of a plus or minus
to show relative standing within the major rating categories.

FIDELITY ADVISOR FUNDS INSTITUTIONAL CLASS
PROSPECTUS
82 DEVONSHIRE STREET
BOSTON, MASSACHUSETTS 02109
JUNE 30 , 1994
The Fidelity Advisor Funds (the Funds) offer institutional
investors a selection of diversified portfolios.
EQUITY FUNDS:
FIDELITY ADVISOR EQUITY PORTFOLIO GROWTH - seeks to achieve capital
appreciation by investing primarily in common and preferred stock, and
securities convertible into common stock, of companies with above average
growth characteristics.
FIDELITY ADVISOR EQUITY PORTFOLIO INCOME - seeks a yield from dividend and
interest income which exceeds the composite dividend yield on securities
comprising the Standard & Poor's Index of 500 Composite Stock Price
Index (S&P 500).
FIXED-INCOME FUNDS:
FIDELITY ADVISOR LIMITED TERM BOND FUND - seeks to provide a high rate of
income through investment in high and upper-medium grade fixed-income
obligations.
FIDELITY ADVISOR LIMITED TERM TAX-EXEMPT FUND - seeks the highest level of
income exempt from federal income taxes that can be obtained consistent
with the preservation of capital, from a diversified portfolio of
high-quality or upper-medium quality municipal obligations.
Shares are offered through this Prospectus to (i) banks and trust
institutions investing for their own accounts or for accounts of their
trust customers, (ii) plan sponsors meeting the ERISA definition of
fiduciary, (iii) government entities or authorities and
(iv) corporations with at least $100 million in annual revenues
(Institutional Shares) .
Fidelity Advisor Equity Portfolio Growth is a portfolio of Fidelity
Advisor Series I. Fidelity Advisor Equity Portfolio Income is a
portfolio of Fidelity Advisor Series III. Fidelity Advisor Limited Term
Bond Fund is a portfolio of Fidelity Advisor Series IV. Fidelity
Advisor Limited Term Tax-Exempt Fund is a portfolio of Fidelity Advisor
Series VI.
Please read this Prospectus before investing. It is designed to provide you
with information and help you decide if a Fund's goals match your own.
RETAIN THIS DOCUMENT FOR FUTURE REFERENCE .
A Statement of Additional Information (SAI) dated June 30 , 1994 for
each Fund has been filed with the Securities and Exchange Commission (SEC)
and each is incorporated herein by reference. SAI s are
available free upon request from Fidelity Distributors Corporation
(Distributors), 82 Devonshire Street, Boston, MA 02109 or by calling
(800) 343 - 5409 .
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE
NOT INSURED BY THE FDIC, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY,
AND ARE SUBJECT TO INVESTMENT RISK,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
(registered trademark)
TABLE OF CONTENTS
Financial History
Financial Highlights
Investment Objectives
Investment Policies and Risks
Investment Limitations
How to Buy Shares
Distribution Options
How to Exchange
How to Sell Shares
Investor Services
Distribution and Taxes
Fees
Valuation
Performance
Portfolio Transactions
The Trusts and the Fidelity Organization
Appendix
Financial Statements 17

FINANCIAL HISTORY

The purpose of the table below is to assist investors in
understanding the various costs and expenses that an
investor in Institutional Shares of each Fund would bear
directly or indirectly. This standard format was developed
for use by all mutual funds to help investor s
make investment decisions. This expense information
should be considered along with other important
information such as each Fund's investment objective and
past performance. There are no shareholder transaction
expenses associated with purchases, exchanges or
redemptions of Institutional Shares .
ANNUAL OPERATING EXPENSES EXPENSE TABLE EXAMPLE: You
would pay the following expenses on a
(AS A PERCENTAGE OF AVERAGE NET ASSETS) $1,000 investment in
Institutional Shares of a Fund assuming (1) a 5% annual
return and (2) full redemption at the end of each time period.

MANAGEMENT OTHER TOTAL

FEE EXPENSES OPERATING 1 YEAR 3 YEARS 5 YEARS 10 YEARS

EXPENSES

Equity Portfolio Growth
.66% .28%* .94% $ 10 $ 30 $ 52 $ 115

Equity Portfolio Income
.50% .29%* .79% 8 25 44 98

Limited Term Bond
.42% .22% .64% 7 20 36 80

Limited Term
.2 4 % * . 41 % .65% 7 21 36 81
Tax-Exempt

</TABLE>

* AFTER EXPENSE REDUCTIONS.

Annual operating expenses are based on historical
expenses for the most recent fiscal year ended.
Management fees are paid by each Fund to Fidelity
Management & Research Company (FMR) for
managing its investments and business affairs. The Funds
incur other expenses for maintaining shareholder records,
furnishing shareholder statements and reports, custodial,
legal and accounting services, registering a Trust or Fund
with federal and state regulatory authorities and other
miscellaneous services. A portion of the brokerage
commissions that Equity Portfolio Growth and Equity
Portfolio Income paid were used to reduce Fund
expenses. Without this reduction, other expenses and
total operating expenses of Institutional Shares would
have been 0.29% and .95%, respectively (Equity Portfolio
Growth) and 0.30% and .80%, respectively (Equity
Portfolio Income). FMR has voluntarily agreed to
reimburse Limited Term Tax-Exempt to the extent that
total operating expenses of Institu-
tional Shares (exclusive of taxes, interest, brokerage
commissions, and extraordinary expenses) are in excess
of an annual rate of 0.65% of average net assets. If
reimbursements were not in effect, the management fees,
other expenses, and total operating expenses of
Institutional Shares would have been .42%, .41% and
.83%, respectively. Please refer to the section "Fees," page
.
The hypothetical example illustrates the expenses associated
with a $1,000 investment in Institutional Shares of each Fund
over periods of one, three, five and ten years, based on the
expenses (after reimbursements, if any) in the above table
and an assumed annual return of 5%. THE RETURN OF 5%
AND EXPENSES SHOULD NOT BE CONSIDERED INDICATIONS OF
ACTUAL OR EXPECTED INSTITUTIONAL CLASS PERFORMANCE OR
EXPENSES, BOTH OF WHICH MAY VARY.
FINANCIAL HIGHLIGHTS
The tables that follow are included in each Fund's Annual Report and
have been audited by Coopers & Lybrand, independent accountants. Their
reports on the Financial Statements and Financial Highlights for each Fund
are included in each Fund's Annual Report. The Financial Statements and
Financial Highlights are part of this prospectus.
FIDELITY ADVISOR EQUITY PORTFOLIO GROWTH
CLass A Institutional Class
Year Period
Ended Ended
Nov. 30, Nov. 30 Years Ended November 30,
SELECTED PER-SHARE DATA 1993 1992** 1993 1992 1991 1990 1989 1988 1987
1986 1985 1984
Net asset value, beginning of period $ 26.33 $ 23.78 $ 26.37 $ 24.28
$ 15.55 $ 17.32 $ 12.02 $ 9.92 $ 13.18 $ 11.09 $ 8.03 $ 10.05
Income from Investment Operations
Net investment income (.07)(dagger)(dagger) .01(dagger)(dagger)
.19(dagger)(dagger) .17(dagger)(dagger) .04 .01 .06 .28***
.00(dagger)(dagger) .03 .01 .02
Net realized and unrealized gain
(loss) on investments 3.82 2.54 3.78 4.55 8.69 .34 5.50 2.59
(2.03) 2.41 3.05 (2.04)
Total from investment operations 3.75 2.55 3.97 4.72 8.73 .35
5.56 2.87 (2.03) 2.44 3.06 (2.02)
Less Distributions
From net investment income (.08) - (.10) (.03) - (.08) (.26)
(.01) (.01) (.02) - -
From net realized gain on investments (.50) - (.50) (2.60) -
(2.04) - (.76) (1.22) (.33) - -
Total distributions (.58) - (.60) (2.63) - (2.12) (.26) (.77)
(1.23) (.35) - -
Net asset value, end of period $ 29.50 $ 26.33 $ 29.74 $ 26.37 $ 24.28 $
15.55 $ 17.32 $ 12.02 $ 9.92 $ 13.18 $ 11.09 $ 8.03
TOTAL RETURN (dagger)(double dagger) 14.52% 10.72% 15.36% 21.14%
56.14% 2.75% 47.18% 29.77% (17.12)% 22.55% 38.11% (20.10)%
RATIOS AND SUPPLEMENTAL DATA
Net Assets, end of period (000 omitted) $ 377,984 $ 22,655 $ 296,466
$ 179,325 $ 68,766 $ 27,473 $ 24,523 $ 20,182 $ 43,537 $ 63,607 $ 23,447 $
4,117
Ratio of expenses to average net assets 1.84%(double dagger)(double
dagger) 1.47%* .94%(double dagger)(double dagger) .98% 1.13% 1.74%
1.60% 1.47% 1.11% 1.07% 1.50%+ 1.50%+
Ratio of expenses to average net assets
before expense reductions 1.85%(double dagger)(double dagger) 1.47%*
.95% (double dagger)(double dagger) .98% 1.13% 1.74% 1.60% 1.47% 1.11%
1.07% 1.50%+ 1.50%+
Ratio of net investment income to
average net assets (.24)% .25%* .66% .73% .25% .07% .38% 1.20%
.00% .29% .43% .33%
Portfolio turnover rate 160% 240% 160% 240% 254% 262% 269% 331%
226% 115% 108% 453%
FIDELITY ADVISOR EQUITY PORTFOLIO INCOME
Class A Institutional Class

Year Period
Ended Ended
Nov. 30 Nov. 30 Years Ended November 30,
SELECTED PER-SHARE DATA 1993 1992** 1993 1992 1991 1990 1989 1988 1987 1986
1985 1984
Net asset value, beginning of period $ 12.86 $ 12.37 $ 12.88 $ 11.08 $
9.52 $ 12.27 $ 11.10 $ 10.93 $ 13.54 $ 11.95 $ 10.24 $ 10.49
Income from Investment Operations
Net investment income .33 .13 .39 .49 .63 # .69 .75 .75 .76
.78 .79 .72
Net realized and unrealized gain
(loss) on investments 1.97 .47 2.02 1.79 1.52 (2.42) 1.17
1.81 (1.53) 1.92 1.69 (.14)
Total from investment operations 2.30 .60 2.41 2.28 2.15 (1.73)
1.92 2.56 (.77) 2.70 2.48 .58
Less Distributions
From net investment income (.30) (.11) (.36) (.48) (.59) (.72)
(.75) (.74) (.70) (.77) (.77) (.74)
From net realized gain on investments - - - - - (.30) -
(1.65) (1.14) (.34) - (.09)
Total distributions (.30) (.11) (.36) (.48) (.59) (1.02) (.75)
(2.39) (1.84) (1.11) (.77) (.83)
Net asset value, end of period $ 14.86 $ 12.86 $ 14.93 $ 12.88 $ 11.08 $
9.52 $ 12.27 $ 11.10 $ 10.93 $ 13.54 $ 11.95 $ 10.24
TOTAL RETURN (dagger)(double dagger) 18.03% 4.88% 18.90% 20.91%
22.97% (14.90)% 17.58% 26.99% (7.28)% 23.48% 24.86% 6.20%
RATIOS AND SUPPLEMENTAL DATA
Net Assets, end of period (000 omitted) $ 42,326 $ 1,462 $ 191,138 $
139,391 $ 168,590 $ 253,049 $ 463,696 $ 436,753 $ 443,603 $ 544,269 $
349,262 $ 89,364
Ratio of expenses to average
net assets 1.77% 1.55%* .79%(double dagger)(double dagger) .71%(h
diamond) .67%(h diamond) .61%(h diamond) .55%(h diamond) .55%(h diamond)
.54%(h diamond) .61% .63% .77%
Ratio of expenses to average net assets
before expense reductions 1.77% 1.55%* .80%(double dagger)(double
dagger) .79%(h diamond) .77%(h diamond) .71%(h diamond) .65%(h diamond)
.65%(h diamond) .61%(h diamond) .61% .63% .77%
Ratio of net investment income
to average net assets 2.02% 3.39%* 3.00% 3.77% 5.66% 6.11% 6.09%
6.86% 5.58% 6.06% 7.36% 7.86%
Portfolio turnover rate 120% 51% 120% 51% 91% 103% 93% 78% 137%
107% 110% (dagger) (dagger)(dagger) 121%
* ANNUALIZED
** FOR THE PERIOD SEPTEMBER 10, 1992 (COMMENCEMENT OF SALE O F CLASS
A) TO NOVEMBER 30, 1992.
*** DURING THE PERIOD A SHAREHOLDER REDEEMED A SIGNIFICANT PORTION OF
THE ASSETS OF THE FUND. DUE TO THE TIMING OF THIS TRANSACTION, THE FUND
EXPERIENCED AN UNUSUALLY HIGH LEVEL OF INVESTMENT INCOME PER SHARE.
(dagger) TOTAL RETURN DOES NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
(dagger)(dagger) NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED
BASED ON AVERAGE SHARES OUTSTANDING.
(double dagger) THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES
NOT BEEN REDUCED DURING THE PERIODS SHOWN.
# INCLUDES $.04 PER-SHARE FROM FOREIGN TAXES RECOVERED.
(dagger) (dagger)(dagger) IN JULY 1985, THE SEC ADOPTED REVISIONS TO
EXISTING RULES WITH RESPECT TO THE CALCULATION OF THE PORTFOLIO TURNOVER
RATE. THE REVISED RULES REQUIRE THE INCLUSION IN THE CALCULATION OF
LONG-TERM U.S. GOVERNMENT SECURITIES WHICH, PRIOR TO THESE REVISIONS, WERE
EXCLUDED FROM THE CALCULATION.
(double dagger)(double dagger) FMR HAS DIRECTED CERTAIN PORTFOLIO TRADES TO
BROKERS WHO PAID A PORTION OF THE FUND'S EXPENSES.
(h diamond) EFFECTIVE APRIL 1, 1987 TO SEPTEMBER 10, 1992, THE INVESTMENT
ADVISER REIMBURSED .10% OF THE ANNUAL MANAGEMENT FEE OF .50%.
+ EXPENSES WERE LIMITED TO A PERCENTAGE OF AVERAGE NET ASSETS IN
ACCORDANCE WITH A STATE EXPENSE LIMITATION.
FIDELITY ADVISOR LIMITED TERM BOND FUND
Class A Institutional Class

Year Period February 2, 1984
Ended Ended (Commencement
Nov. 30, Nov. 30 Years Ended November 30, of Operations) to
SELECTED PER-SHARE DATA 1993 1992** 1993 1992 1991 1990 1989 1988 1987 1986
1985 November 30, 1984
Net asset value, beginning
of period $ 10.640 $ 10.960 $ 10.640 $ 10.550 $ 10.140 $ 10.410 $ 10.180 $
10.250 $ 11.240 $ 10.550 $ 9.960 $ 10.000
Income from Investment Operations
Net investment income .785 .170 .832 .840 .884 .901 .937 .944
.953 1.026 1.053 .897
Net realized and unrealized gain (loss)
on investments .511 (.320)# .531 .102 .411 (.270) .230 (.070)
(.770) .710 .590 (.040)
Total from investment operations 1.296 (.150) 1.363 .942 1.295 .631
1.167 .874 .183 1.736 1.643 .857
Less Distributions
From net investment income (.796) (.170) (.843) (.852) (.885)
(.901) (.937) (.944) (.953) (1.026) (1.053) (.897)
From net realized gain on investments - -- -- -- -- -- -- --
(.220) (.020) -- --
Total distributions (.796) (.170) (.843) (.852) (.885) (.901)
(.937) (.944) (1.173) (1.046) (1.053) (.897)
Net asset value, end of period $ 11.140 $ 10.640 $ 11.160 $ 10.640 $
10.550 $ 10.140 $ 10.410 $ 10.180 $ 10.250 $ 11.240 $ 10.550 $ 9.960
TOTAL RETURN (dagger)(double dagger) 12.50% (1.37)% 13.17% 9.21%
13.35% 6.46% 12.03% 8.81% 1.78% 17.04% 17.40% 9.33%
RATIOS AND SUPPLEMENTAL DATA
Net Assets, end of period (000 omitted) $ 59,184 $ 2,583 $ 183,790 $
160,156 $ 327,756 $ 356,564 $ 426,832 $ 418,929 $ 407,228 $ 418,632 $
253,913 $ 15,192
Ratio of expenses to average net assets 1.23% .82%* .64% .57%
.57% .58% .54% .54% .53% .53% .65% 1.50%*(dagger)(dagger)
Ratio of net investment income to
average net assets 6.81% 7.67%* 7.41% 7.96% 8.59% 8.90% 9.16%
9.16% 9.03% 9.22% 10.29% 11.01%*
Portfolio turnover rate 59% 7% 59% 7% 60% 59% 87% 48% 92% 59%
88%(dagger)(dagger)(dagger) 12%*
FIDELITY ADVISOR LIMITED TERM TAX-EXEMPT FUND
Class A Institutional Class
September 19, 1985
Year Period (Commencement
Ended Ended of Operations) to
Nov. 30 Nov. 30 Years Ended November 30, November 30,
SELECTED PER-SHARE DATA 1993 1992** 1993 1992 1991 1990 1989 1988 1987
1986 1985
Net asset value, beginning of period $ 11.080 $ 11.010 $ 11.080 $ 10.800 $
10.640 $ 10.610 $ 10.520 $ 10.380 $ 10.990 $ 10.280 $ 10.000
Income from Investment Operations
Net interest income .508 .131 .536 .666 .682 .689 .674 .650 .641
.671 .130
Net realized and unrealized gain (loss) on investments .260 .070 .260
.280 .160 .030 .090 .140 (.540) .760 .280
Total from investment operations .768 .201 .796 .946 .842 .719
.764 .790 .101 1.431 .410
Less Distributions
From net interest income (.508) (.131) (.536) (.666) (.682) (.689)
(.674) (.650) (.641) (.671) (.130)
From net realized gain on investments (.880) -- (.880) -- -- --
- -- -- (.070) (.050) --
Total distributions (1.388) (.131) (1.416) (.666) (.682) (.689)
(.674) (.650) (.711) (.721) (.130)
Net asset value, end of period $ 10.460 $ 11.080 $ 10.460 $ 11.080 $
10.800 $ 10.640 $ 10.610 $ 10.520 $ 10.380 $ 10.990 $ 10.280
TOTAL RETURN (dagger)(double dagger) 7.72% 1.37% 8.01% 9.01% 8.15%
7.04% 7.50% 7.77% .97% 14.39% 4.12%
RATIOS AND SUPPLEMENTAL DATA
Net Assets, end of period (000 omitted) $ 39,800 $ 1,752 $ 15,076 $ 28,428
$ 100,294 $ 111,506 $ 121,418 $ 132,443 $ 162,857 $ 161,045 $ 94,391
Ratio of expenses to average net assets .90% 1.04%* .65% .66% .61%
.62% .65% .63% .59% .58% .69%*
Ratio of expenses to average net assets before
expense reductions(double dagger)(double dagger) 1.36% 1.06%* .83%
.67% .61% .62% .65% .63% .59% .58% .69%*
Ratio of net in terest income to average net assets 4.76% 5.65%*
5.01% 6.05% 6.40% 6.53% 6.45% 6.20% 6.01% 6.29% 6.33%*
Portfolio turnover rate 46% 36% 46% 36% 20% 32% 31% 24% 43% 34%
103%*

* ANNUALIZED
** FOR THE PERIOD SEPTEMBER 1 0 , 1992 (COMMENCEMENT OF OPERATIONS OF
CLASS A) TO NOVEMBER 30, 1992.
(dagger) TOTAL RETURN DOES NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
(double dagger) THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES
NOT BEEN REDUCED DURING THE PERIODS SHOWN.
(double dagger)(double dagger) EFFECTIVE OCTOBER 21, 1992, FMR HAS
VOLUNTARILY AGREED TO REIMBURSE EXPENSES OF EACH CLASS TO THE EXTENT THAT
EXPENSES EXCEED .90% (LIMITED TERM TAX-EXEMPT FUND - CLASS A)AND .65%
(INSTITUTIONAL LIMITED TERM TAX-EXEMPT FUND) OF EACH CLASS' AVERAGE NET
ASSETS, RESPECTIVELY.
(dagger)(dagger) EXPENSES WERE LIMITED TO A PERCENTAGE OF AVERAGE NET
ASSETS IN ACCORDANCE WITH A STATE EXPENSE LIMITATION.
(dagger)(dagger)(dagger) IN JULY 1985, THE SEC ADOPTED REVISIONS TO
EXISTING RULES WITH RESPECT TO THE CALCULATION OF THE PORTFOLIO TURNOVER
RATE. THE REVISED RULES REQUIRE THE INCLUSION IN THE CALCULATION OF
LONG-TERM U.S. GOVERNMENT SECURITIES WHICH, PRIOR TO THESE REVISIONS, WERE
EXCLUDED FROM THE CALCULATION.
# THE AMOUNT SHOWN IN THIS CAPTION, WHILE DETERMINABLE BY THE SUMMATION OF
AMOUNTS COMPUTED DAILY AS SHARES WERE SOLD OR REPURCHASED, IS ALSO THE
BALANCING FIGURE DERIVED FROM THE OTHER FIGURES IN THE STATEMENT AND HAS
BEEN SO COMPUTED. THE AMOUNT SHOWN FROM THE PERIOD ENDED NOVEMBER 30, 1992
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD DOES NOT ACCORD WITH THE NET
REALIZED AND UNREALIZED GAIN ON INVESTMENTS FOR THE PERIOD BECAUSE OF THE
TIMING OF SALES AND REPURCHASES OF THE LIMITED TERM BOND FUND SHARES IN
RELATION TO FLUCTUATING MARKET VALUES OF THE INVESTMENTS OF THE FUND.
INVESTMENT OBJECTIVES
EQUITY FUNDS:
FIDELITY ADVISOR EQUITY PORTFOLIO GROWTH seeks to achieve capital
appreciation by investing primarily in the common and preferred stock and
securities convertible into the common stock of companies with above
average growth characteristics.
FIDELITY ADVISOR EQUITY PORTFOLIO INCOME seeks a yield from dividend and
interest income which exceeds the composite dividend yield on securities
comprising the S&P 500.
FIXED-INCOME:
FIDELITY ADVISOR LIMITED TERM BOND FUND seeks to provide a high rate of
income through investment in high and upper-medium grade fixed-income
obligations.
MUNICIPAL/TAX-EXEMPT:
FIDELITY ADVISOR LIMITED TERM TAX-EXEMPT FUND seeks the highest level of
income exempt from federal income taxes that can be obtained consistent
with the preservation of capital, from a diversified portfolio of high
quality or upper-medium quality municipal obligations.
The investment objective of each Fund is fundamental and can only be
changed by vote of a majority of the outstanding shares of the Fund. Except
as otherwise noted, the investment limitations and policies of Equity
Portfolio Growth, Limited Term Bond, and Limited Term Tax-Exempt are
fundamental and may not be changed without shareholder approval. Except for
the investment limitations and policies identified as fundamental, the
limitations and policies of Equity Portfolio Income are not fundamental.
Non-fundamental investment limitations and policies may be changed without
shareholder approval.
The yield, return and potential price changes of each Fund depends on the
quality and maturity of the obligations in its portfolio, as well as on
market conditions. Risks vary based on the type of fund in which you are
investing. As is the case with any investment in securities, investment
in the Funds involves certain risks and, therefore, a Fund may not
always achieve its investment objective.
INVESTMENT POLICIES AND RISKS
Further information relating to the types of securities in which each Fund
may invest and the investment policies of each Fund in general are set
forth in the Appendix to this Prospectus and in each Fund's SAI.
EQUITY FUNDS: Equity funds invest mainly in common stocks and other
equity securities in search of growth or a combination of growth and
income. The share value of equity funds depends heavily on stock
market conditions in the U . S . a nd abroad, and can also be
affected by changes in interest rates or other economic conditions.
Investments in equity funds are more suitable for investors who take a
long-term approach to investing.
FIDELITY ADVISOR EQUITY PORTFOLIO GROWTH as a general rule, will invest
in the securities of companies whose growth in the areas of earnings or
gross sales measured either in dollars or in unit volume (either on an
absolute or percentage basis) may exceed that of the average of the
companies whose securities are included in the S&P 500. These
securities generally command high multiples (price/earnings ratios) in the
stock markets over time. Above average growth characteristics are most
often associated with companies in new and emerging areas of the economy
but occasionally can be found in the stronger companies of more mature and
even declining industries. The Fund will, therefore, be invested in the
securities of smaller, less well-known companies except when FMR believes
that opportunities for above-average growth are presented by larger, more
mature companies which have undergone reformation and revitalization or
possess a strong position in relation to the market as a whole.
The market price of securities with above average growth characteristics
often can experience a more sudden and more dramatic downward reaction to
negative news than is the case with securities carrying a lower market
multiple. This can be particularly true for companies with a narrow product
line or whose securities are relatively thinly-traded, characteristics
which are common to smaller, less well-known companies.
As a non-fundamental policy, at least 65% of the total assets of the Fund
normally will be invested in common and preferred stock. The balance of the
Fund will tend to be invested in debt obligations, a high percentage of
which are expected to be convertible into common stocks. As a
non-fundamental policy, the Fund may invest in lower-quality, high yielding
debt securities (sometimes referred to as "junk bonds"), although it
intends to limit its investments in these securities to 35% of its assets.
The Fund also may purchase or engage in foreign investments, indexed
securities, illiquid investments, loans and other direct debt instruments,
options and futures contracts, repurchase agreements and securities loans,
restricted securities, swap agreements, and warrants.
FIDELITY ADVISOR EQUITY PORTFOLIO INCOME . It is the policy of the
Fund that at least 65% of its total assets normally will be invested in
income-producing equity securities. For purposes of this policy, equity
securities are defined as common stocks and preferred stocks.
The balance of the Fund will tend to be invested in debt obligations, a
high percentage of which are expected to be convertible into common stocks.
As a non-fundamental policy the Fund may invest in lower-quality,
high-yielding debt securities ( sometimes referred to as "junk
bonds") although it currently intends to limit its investments in these
securities to 35% of its assets. However, the Fund does not intend to
invest in securities of issuers without proven earnings and/or credit
histories. T he Fund may purchase or engage in foreign investments,
indexed securities, illiquid investments, loans and other direct debt
instruments, futures and options , repurchase agreements and
securities loans, restricted securities, short sales, swap agreements, and
warrants.
Because of the income considerations, investors should not expect capital
appreciation comparable to the appreciation which could be achieved by
funds whose primary objective is capital appreciation. While the investment
portfolio will not mirror the stocks in the S&P 500 , the yield
on the overall investment portfolio generally will increase or decrease
from year to year in accordance with market conditions and in relation to
the changes in yields of the stocks included in the S&P 500.
The Fund may make temporary investments in securities such as
investment-grade bonds or short-term notes for defensive purposes.
FIXED-INCOME FUNDS: Fixed - income funds invest primarily in debt
securities (e.g., bonds, debentures, notes and similar obligations). The
share value of fixed-income funds tends to move inversely with changes in
prevailing interest rates. Shorter-term bonds are less sensitive to
interest rate changes, but longer-term bonds generally offer higher yields.
Share value and yield will fluctuate based on the credit quality and
changes in interest rates.
FIDELITY ADVISOR LIMITED TERM BOND FUND . Under normal
circumstances, the Fund will invest in fixed-income securities, as
follows:
(I) Corporate obligations which are rated AAA, AA, or A by Standard &
Poors (S&P), or Aaa, Aa, or A by Moody's Investment Services Inc.
(Moody's) ;
(II) Obligations issued or guaranteed as to interest and principal by the
government of the U .S. , or any agency or instrumentality thereof;
(III) Obligations (including certificates of deposit and bankers'
acceptances) of U.S. banks which at the date of investment have capital
gains, surplus, and undivided profits (as of the date of their most
recently published annual financial statements) in excess of $100,000,000;
(IV) Commercial paper which at the date of investment is rated A-1 or A-2
by S&P or Prime-1 or Prime-2 by Moody's or, if not rated, is issued by
companies which at the date of investment have an outstanding debt issue
rated AAA, AA, or A by S&P or Aaa, Aa, or A by Moody's; and
(V) Such other fixed-income instruments as the Board of Trustees, in its
judgment, deems to be of comparable quality to those enumerated above.
Instruments in which the Fund may invest include asset-backed securities,
collateralized mortgage obligations, convertible securities, loans and
other direct debt instruments, mortgage backed securities and zero coupon
bonds .
FMR's standards for determining high- and upper-medium grades are
essentially the same as those described by S&P and Moody's as
characteristic of their ratings of A and above. Such instruments have
strong protection of principal and interest payments. In addition to
reliance on S&P's or Moody's ratings, FMR also performs its own credit
analysis. The Fund also may invest in unrated instruments, and may at times
purchase instruments rated below A if FMR judges them to be of comparable
quality to those rated A or better. Currently, the Fund does not intend to
invest in debt obligations rated below Baa/ BBB. Investment-grade
bonds are generally of medium to high quality. Those rated in the lower end
of the category (Baa/BBB), however, may possess speculative characteristics
and may be more sensitive to economic changes and changes in the financial
condition of issuers.
In addition, the Fund may seek capital appreciation when consistent with
its primary objective. In seeking capital appreciation, FMR will select
securities for the Fund based on its judgment as to economic and market
conditions and the prospects for interest rate changes.
The Fund may purchase or engage in foreign investments, indexed securities,
illiquid investments, options and futures contracts, repurchase agreements
and securities loans, restricted securities, and swap agreements.
The Fund also may engage in reverse repurchase agreements for temporary
or emergency purposes and not for investment purposes.
The Fund will maintain a dollar-weighted average maturity of 10 years or
less. Based on FMR's assessment of interest rate trends, generally, the
average maturity will be shortened when interest rates are expected to rise
and lengthened up to 10 years when interest rates are expected to decline.
MUNICIPAL/TAX-EXEMPT FUNDS: Tax-exempt funds invest primarily in municipal
securities which are issued by state and local governments and their
agencies to raise money for various public purposes, including general
purpose financing for state and local governments as well as financing for
specific projects or public facilities. Municipal securities may be backed
by the full taxing power of a municipality or by the revenues from a
specific project or the credit of a private organization. Some municipal
securities are insured by private insurance companies, while others may be
supported by letters of credit furnished by domestic or foreign banks.
FMR monitors the financial condition of parties (including insurance
companies, banks, and corporations) whose creditworthiness is relied upon
in determining the credit quality of securities the Fund may purchase.
Yields on municipal bonds, and therefore the yield and share value
of tax-exempt funds depend on factors such as general market
conditions, interest rates, the size of a particular offering, the
maturities of the obligations and the quality of the issues. The ability of
the Fund to achieve its investment objective is also dependent on the
continuing ability of the issuers of the municipal obligations in which the
Fund invests to meet its obligations for the payment of interest and
principal when due.
Bonds generally are considered to be interest rate sensitive, which means
that their values move inversely to interest rates. Long-term municipal
bond s generally are more exposed to market fluctuations resulting from
changes in interest rates than are short-term municipal bond s.
FIDELITY ADVISOR LIMITED TERM TAX-EXEMPT FUND . U nder normal
conditions, at least 80% of the Fund's annual income will be exempt from
federal income taxes and at least 80% of the Fund's net assets will be
invested in obligations having remaining maturities of 15 years or less.
The Fund will maintain a dollar-weighted average maturity of 10 years
or less.
Municipal obligations, including industrial development revenue
bonds, are issued by or on behalf of states, territories, and possessions
of the U .S. and the District of Columbia and their political
subdivisions, agencies, and instrumentalities.
The Fund will invest in municipal obligations which, in the judgment of
FMR, are high quality or at least upper-medium quality. The Fund's
standards for high quality and upper-medium quality obligations are
essentially the same as those described by Moody's in rating municipal
obligations within its three highest ratings of Aaa, Aa, and A and as those
described by S&P in rating such obligations within its three highest
ratings of AAA, AA and A. As a non-fundamental policy, the Fund will not
purchase a security rated by Moody's or S&P unless it has received at
least an A rating from either rating service.
The Fund may invest up to 20% of its total assets in municipal obligations
which are unrated by Moody's or S&P if, in the judgment of FMR, such
municipal obligations meet the standards of quality as set forth above.
Unrated bonds are not necessarily of lower quality and may have higher
yields than rated bonds, but the market for rated bonds is usually broader.
The Fund's investments in municipal securities may include fixed, variable,
or floating rate general obligations and revenue bonds (including municipal
lease obligations and resource recovery bonds); zero coupon and
asset-backed securities; inverse floaters; tax, revenue, or bond
anticipation notes; and tax-exempt commercial paper. The Fund may buy or
sell securities on a when-issued or delayed delivery basis (including
refunding contracts) and may purchase restricted securities and buy or sell
options and futures contracts.
The Fund may invest up to 25% of its total assets in a single issuer's
securities. The Fund may also invest 25% or more of its total assets
in securities whose revenue sources are from similar types of projects
(e.g., education, electric utilities , health care, housing,
transportation, or water, sewer, and gas utilities ) or whose issuers
share the same geographic location. As a result, the Fund may be more
susceptible to economic, business or political developments than
would a portfolio of bonds with a greater variety of issuers. These
developments include proposed legislation or pending court decisions
affecting the financing of such projects and market factors affecting the
demand for their services or products.
The Fund currently does not intend to invest in taxable obligations;
however, consistent with that portion of its investment objective concerned
with the preservation of capital, from time to time the Fund may invest a
portion (normally not to exceed 20%) of its net assets on a temporary basis
in fixed-income obligations whose interest is subject to federal income
tax. These taxable obligations may include repurchase agreements. The Fund
does not currently intend to invest in AMT bonds.
INVESTMENT LIMITATIONS
Each Fund has adopted the following investment limitations designed to
reduce investment risk. The policies and limitations discussed below, and
in the Appendix beginning on page , are considered at the time of
purchase. With the exception of each Fund's borrowing policy, the sale of
portfolio securities is not required in the event of a subsequent change in
circumstances.
DIVERSIFICATION: These limitations do not apply to U.S. government
securities and are fundamental.
(bullet) Equity Portfolio Growth may not purchase a security if, as a
result, more than 5% of its total assets would be invested in the
securities of any issuer.
(bullet) With respect to 75% of its total assets, each Fund other than
Equity Portfolio Growth, may not purchase a security if, as a result,
more than 5% of its total assets would be invested in the securities of any
issuer.
(bullet) Each Fund may not purchase a security if, as a result, it would
hold more than 10% of the outstanding voting securities of any issuer
(except that Equity Portfolio Income may invest up to 25% of its total
assets without regard to this limitation).
(bullet) Limited Term Tax-Exempt may not purchase the securities of any
issuer if, as a result, more than 25% of its total assets would be invested
in industrial development bonds whose issuers are in any one industry.
(bullet) Each Fund may not purchase the securities of any issuer if, as a
result, more than 25% of the Fund's total assets would be invested in the
securities of issuers having their principal business activities in the
same industry. Limited Term Bond may, however, invest more than 25% of its
total assets in obligations of banks.
BORROWING: The following limitations are fundamental.
(bullet) Each Fund may borrow money for temporary or emergency purposes in
an amount not exceeding 33 1/3% of the value of its total assets.
(bullet) Limited Term Bond and Limited Term Tax-Exempt may not purchase
any security while borrowings representing 5% or more of each Fund's
total assets are outstanding.
The following limitations are non-fundamental.
(bullet) Equity Portfolio Growth and Equity Portfolio Income
may not purchase any security while borrowings representing more than 5% of
each Fund's total assets are outstanding.
(bullet) Each Fund may borrow money from banks or from other funds advised
by FMR or by engaging in reverse repurchase agreements.
LENDING: Percentage limitations are fundamental.
(bullet) Limited Term Tax-Exempt does not currently intend to engage in
repurchase agreements or make loans (but this limitation does not apply to
purchases of debt securities).
(bullet) Each other Fund (a) may lend securities when the loan is fully
collateralized; and (b) may lend money to other funds advised by FMR or an
affiliate. Each Fund will limit loans in the aggregate to 33 1/3% of its
total assets.
Each Fund has received permission from the SEC to lend money to and borrow
money from other funds advised by FMR or its affiliates. Limited Term
Tax-Exempt will participate only as a borrower. If a Fund borrows money,
its share price may be subject to greater fluctuation until the borrowing
is paid off. To this extent, purchasing securities when borrowings are
outstanding may involve an element of leverage.
As a non-fundamental policy, each Fund may not purchase a security if as a
result, more than 10% of its net assets would be invested in
illiquid investments.
HOW TO BUY SHARES
Institutional S hares are offered continuously to (i) banks and trust
institutions investing for their own accounts or for accounts of their
trust customers, (ii) plan sponsors meeting the ERISA definition of
fiduciary, (iii) government entities or authorities, and (iv) corporations
with at least $100 million in annual revenues.
Institutional Shares are also offered to any investor who purchased
Institutional Shares of the Funds prior to September 10, 1992. Any such
investor will be exempt from the investment minimum and account balance
requirements currently in effect. Further, this exemption is also available
to any investor having opened an Institutional Class account in the Funds
prior to January 29, 1993 through a registered investment adviser not
registered as a broker-dealer that charges an account management fee.
Institutional Shares may be purchased at the net asset value (NAV) next
determined after the transfer agent receives the order to purchase.
Fidelity Investments Institutional Operations Company (FIIOC or the
Transfer Agent), 82 Devonshire Street, Boston, MA 02109, provides transfer
and dividend paying services for Institutional Shares.
Orders for the purchase of Institutional S hares must be
t ransmitted to the T ransfer A gent before 4:00 p.m.
Eastern time in order for you to receive that day's Institutional
S hare price. You can open an Institutional Class account
for $100,000 or more by completing and returning a signed account
application. Orders will be confirmed at the NAV next determined following
receipt of the order by the T ransfer A gent. To eliminate
the need for safekeeping, the Funds will issue certificate shares only upon
request. Additional investments of $2,500 or more may be made. Minimum
investments may differ for tax-deferred retirement plans. FOR SPECIFIC
INFORMATION ON OPENING AN ACCOUNT, PLEASE CONTACT YOUR INSTITUTIONAL SALES
REPRESENTATIVE.
All purchases must be made in U.S. dollars and checks must be drawn
on U.S. banks. Each Fund reserves the right to limit the number of checks
processed at one time. If your check does not clear, the Fund may
cancel the purchase and you could be held liable for any fees and/or
losses incurred. When you purchase by check, the Fund can hold the
proceeds of redemptions until the T ransfer A gent is
reasonably satisfied that the purchase payment has been collected (which
can take up to seven calendar days). You may avoid a delay in
receiving redemption proceeds by purchasing shares with a certified check.
Financial institutions that meet Distributors' creditworthiness criteria
may enter confirmed purchase orders for Institutional Shares on
behalf of customers by phone, with payment to follow no later than the
close of business on the next business day. If payment is not received by
the next business day, the order will be canceled and the financial
institution may be liable for any losses. Investors in Institutional
Shares of Limited Term Bond and Limited Term Tax-Exempt begin to earn
income dividends on a confirmed purchase on the day the Fund receives
payment. For all other purchase orders for Institutional Shares of
these Funds, investors begin to earn income dividends on the business
day after receipt of payment.
Each Fund and Distributors reserves the right to suspend the offering of
Institutional S hares for a period of time and to reject any order
for the purchase of shares , including certain purchases by exchange
(see " How to Exchange" below ). Purchase orders may be refused
if, in FMR's opinion, they are of a size that would disrupt the management
of the Fund.
TO INVEST BY WIRE: It is recommended that investors wire funds early in the
day to ensure proper credit. FOR WIRE INFORMATION AND INSTRUCTIONS,
PLEASE CALL THE INSTITUTION THROUGH WHICH YOU TRADE OR FIDELITY CLIENT
SERVICES AT (800) 843-3001.
DISTRIBUTION OPTIONS
An investor in Institutional Shares may choose from three
Distribution Options:
A. The REINVESTMENT OPTION reinvests income dividends and capital
gain distributions in additional Institutional Shares .
B. The INCOME-EARNED OPTION pays income dividends by check and reinvests
capital gain distributions in additional Institutional Shares.
C. T he CASH OPTION pays income dividends and capital gain
distributions by check.
An investor may change his or her Distribution Option at any time by
notifying the T ransfer A gent in writing. If no
distribution option is selected when an account is opened, the
Reinvestment Option automatically will be assigned. On
the day a Fund goes ex-dividend, the amount of the distribution is deducted
from its share price. Reinvestment of distributions will be made at
that day's NAV. Cash distribution checks will be mailed within seven
days. If you select option B or C and the United States Postal Service
cannot deliver your checks, or if your checks remain uncashed for six
months, distribution checks will be reinvested in your account at the
current NAV and your election may be converted to the Reinvestment Option.

HOW TO EXCHANGE
An exchange is the redemption of Institutional S hares of one
F und at the next determined NAV and the purchase of Institutional
S hares of another F und at the next determined NAV. The exchange
privilege is a convenient way to buy and sell Institutional
S hares of the Fidelity Advisor Funds and other Fidelity funds
registered in the investor's state. Sales charges for Fidelity funds, if
any, will apply unless the exchange is made pursuant to a load waiver
policy of the fund to be acquired. Please consult that fund's prospectus to
determine if any load waiver policies apply. Exchange transactions may
be given by you in writing or by telephone directly to the Transfer Agent
or through your investment professional. FOR INSTRUCTIONS ON ENTERING
AN EXCHANGE TRANSACTION, PLEASE CON TACT THE INSTITUTION THROUGH WHICH
YOU TRADE OR FIDELITY CLIENT SERVICES .
To protect each Fund's performance and shareholders, FMR discourages
frequent trading in response to short-term market fluctuations. Each Fund
reserves the right to refuse exchange purchases by any person or group if,
in FMR's opinion, the Fund would be unable to invest effectively in
accordance with its investment objective and policies, or would otherwise
be affected adversely. Exchanges may be restricted or refused if the Fund
receives or anticipates simultaneous orders affecting significant portions
of the Fund's assets. In particular, a pattern of exchanges that coincides
with a "market timing" strategy may be disruptive to a Fund.
Exchange restrictions may be imposed at any time. Each Fund may
modify or terminate the exchange privilege.
Before making an exchange, please note the following:
(bullet) Read the prospectus of the F und to be acquired by
exchange.
(bullet) You may only exchange between accounts that are registered
in the same name, address, and taxpayer identification number. Exchanges
will not be permitted until a completed and signed application is on file.
(bullet) You may make four exchanges out of each Fund per calendar
year. Each Fund reserves the right to temporarily or permanently suspend
the exchange privilege for any investor who exceeds this limit. Other funds
may have different exchange restrictions. Please check each fund's
prospectus for details. The exchange limit may be modified for accounts in
certain institutional retirement plans to conform to plan exchange limits
and Department of Labor Regulations. See plan materials for further
information.
TAXES. The exchange of Institutional Shares is considered
a sale and may be taxable. The Transfer Agent will send a confirmation
of each exchange transaction.
HOW TO SELL SHARES
You may sell ( redeem ) all or a portion of your
Institutional S hares on any day the New York Stock Exchange (NYSE)
is open, at the NAV next determined after the T ransfer A gent
receives the request to sell . Any redemption orders received by the
T ransfer A gent before 4:00 p.m. Eastern time on any business
day will receive that day's NAV. For orders placed through an investment
professional, it is the investment professional's responsibility to
transmit such orders to the Transfer Agent by 4:00 p.m. Eastern time for
you to receive that day's share price.
Once an investor's Institutional S hares are redeemed, a Fund
normally will send the proceeds on the next business day to the address of
record. If making immediate payment could adversely affect the Fund, the
Fund may take up to seven calendar days to pay you . A
Fund may withhold redemption proceeds until it is reasonably satisfied that
it has collected investments that were made by check (which may take up to
seven calendar days). The T ransfer A gent requires
additional documentation to redeem Institutional S hares registered
in the name of a corporation, agent or fiduciary, or a surviving joint
owner.
When the NYSE is closed (or when trading is restricted) for any reason
other than its customary weekend or holiday closings, or under any
emergency circumstances as determined by the SEC to merit such action, a
Fund may suspend redemption or postpone payment dates for more than
seven days . Redemption instructions may be given by you in writing
or by telephone directly to the Transfer Agent or through your investment
professional. FOR FURTHER INFORMATION ON REDEEMING SHARES, PLEASE
CON TACT THE INSTITUTION THROUGH WHICH YOU TRADE OR FIDELITY CLIENT
SERVICES .
TO SELL BY MAIL: An investor may sell Institutional Shares
by submitting written instructions with an authorized signature that is
on file for that account. Each Fund reserves the right to require that the
signature be guaranteed by a bank, broker, dealer, municipal securities
dealer, municipal securities broker, government securities dealer,
government securities broker, credit union (if authorized under state law),
national securities exchange, registered securities association, clearing
agency or savings association. Written requests for redemption should be
mailed to:
Fund Name
ITS Group , ZR5
164 Northern Ave.
Boston, MA 02 210
For your protection, if you sell shares of a Fund having a value of more
than $100,000, if you are sending the proceeds of a redemption of any
amount to an address other than the address of record listed on the
account, if you have requested a change of address within the preceding 30
days, or if you wish to have the proceeds wired to a nonpredesignated bank
account, you must send a letter of instruction signed by all registered
owners with signature(s) guaranteed to the Transfer Agent.
TO REDEEM BY TELEPHONE: An investor may redeem Institutional S hares
and instruct the T ransfer A gent to have proceeds wired
directly to a designated bank account. In making redemption requests, the
name(s) on the investor's account registration and the account number must
be supplied. To redeem by telephone, call the T ransfer A gent:
NATIONWIDE (TOLL FREE) (800) 843 - 3001
Note that Fidelity will not be responsible for any losses resulting from
unauthorized transactions if it follows reasonable procedures designed to
verify the identity of the caller. The Transfer Agent will request
personalized security codes or other information, and may also record
calls. The investor should verify the accuracy of the confirmation
statements immediately after receipt. If an investor does not want
the ability to redeem and exchange by telephone, he or she should
call the Transfer Agent for instructions. Additional
documentation may be required from corporations, associations , holders
of certificate shares and certain fiduciaries.
MINIMUM ACCOUNT BALANCE. Each account must have a balance of $40,000 in it
in order to remain open. If the account balance falls below $40,000 due to
redemption of Institutional Shares , the T ransfer A gent
may close it and mail the proceeds to the address shown on the
T ransfer A gent's records. The T ransfer A gent
will give 30 days' notice that an investor's account will be closed unless
an investment is made to increase the account balance to the $40,000
minimum. Please note that Institutional S hares will be redeemed at
the NAV on the day the account is closed.
INVESTOR SERVICES
The T ransfer A gent will send a confirmation to the investor
after every transaction that affects the investor's share balance or
the account registration. At least twice a year each investor will receive
a financial statement, with a summary of its portfolio composition and
performance. To reduce expenses, only one copy of most shareholder reports
(such as a Fund's Annual Report) may be mailed to each investor address.
Please write to the T ransfer A gent to have additional reports
sent each time.
Each Fund pays for these shareholder services, but not for special
services that are required by a few shareholders, such as a request for a
historical transcript of an account. An investor may be required to
pay a fee for these special services. If an investor is purchasing shares
of a Fund through a program of administrative services offered by an
investment professional, the investor should read materials
pertaining to that program in conjunction with this p rospectus.
Certain features of each Fund, such as the minimum initial or subsequent
investment, may be modified in these programs, and administrative charges
may be imposed for the services rendered.
DISTRIBUTIONS AND TAX ES
DISTRIBUTIONS. The Funds distribute substantially all of their net
investment income and capital gains each year pursuant to the following
schedule. Each Fund may pay capital gains , if any, in December.
In addition, each Fund may pay capital gains in January.
Equity Portfolio Growth pays net investment income , if any, in
January and December; Limited Term Bond and Limited Term Tax-Exempt declare
dividends daily and pay monthly; and Equity Portfolio Income declares
dividends in March, June, September, and December, and pay s the
following month.
CAPITAL GAINS. You may realize a gain or loss when shares are sold
(redeemed) or exchanged. For most types of accounts, a Fund will report the
proceeds of redemptions to the investor and the Internal Revenue Service
(IRS) annually. However, because the tax treatment also depends on an
investor's purchase price and personal tax position, REGULAR ACCOUNT
STATEMENTS SHOULD BE RETAINED FOR TAX PURPOSES .
" BUYING A DIVIDEND ". On the record date for a distribution
from a Fund, the Fund's share price is reduced by the amount of the
distribution. If shares are bought just before the record date (buying a
dividend), an investor will pay the full offering price for the shares, and
then receive a portion of the price back as a taxable distribution.
FEDERAL TAXES. With the exception of Limited Term Tax-Exempt, distributions
from each Fund's income and short-term capital gains are taxed as
dividends, and long-term capital gain distributions are taxed as long-term
capital gains. Gains on the sale of tax-free bonds results in a taxable
distribution. Short-term capital gains and a portion of the gain on bonds
purchased at a discount after April 30, 1993 are taxed as dividends.
Distributions are taxable when they are paid, whether taken in cash or
reinvested in additional shares, except that distributions declared in
December and paid in January are taxable as if paid on December 31. Each
Fund will send a tax statement by January 31 showing the tax status of the
distributions received in the past year. A copy will be filed with the IRS.
To the extent that a Fund invests in municipal obligations whose interest
is subject to the federal alternative minimum tax for individuals (AMT
bonds), individuals who are subject to the AMT will be required to report a
portion of the Fund's dividends as a "tax-preference item" in determining
their federal tax. Federally tax-free interest earned by the Fund is
federally tax-free when distributed as income dividends. During the most
recent fiscal year ended, 100% of the income dividends for Limited Term
Tax-Exempt were free from federal tax. If the Fund earned taxable income
from any of its investments, it will be distributed as a taxable dividend.
A portion of the Funds ' dividends may be eligible for
the dividends-
received deduction for corporations.
EFFECT OF FOREIGN TAXES. A Fund may pay withholding or other taxes to
foreign governments during the year. These taxes reduce the Fund's
dividends, but are included in the taxable income reported on your tax
statement. You may be able to claim an offsetting tax credit or itemized
deduction for foreign taxes paid by the Fund. Your tax statement will
generally show the amount of foreign tax for which a credit or deduction
will be available.
OTHER TAX INFORMATION. In addition to federal taxes, an investor may
be subject to state or local taxes on an investment, depending on the laws
in your area. Because some states exempt their own municipal obligations
from tax, an investor will receive tax information each year showing how
Limited Term Tax-Exempt allocated its investments by state.
When an account application is signed, an investor will be asked to certify
that the social security or taxpayer identification number is correct and
that the investor is not subject to 31% backup withholding for failing to
report income to the IRS. If an investor violates IRS regulations, the IRS
can require a Fund to withhold 31% of taxable distributions and
redemptions.
FEES
MANAGEMENT AND OTHER SERVICES. For managing its investments and business
affairs, each Fund pays a monthly fee to FMR.
Each Fund (with the exception of Equity Portfolio Income) pays a monthly
fee to FMR based on a basic fee rate, which is the sum of two
components:
1. A group fee rate based on the monthly average net assets of all of the
mutual funds advised by FMR. This rate for equity funds cannot rise above
.52% and it drops (to as low as a marginal rate of .31%*) as total assets
in all of these funds rise. The effective equity fund fee rate for November
1993 was .3250%. The group fee rate for fixed-income funds cannot rise
above .37% and it drops (to as low as a marginal rate of .15%*) as total
assets in all of these funds rise. The effective fixed-income fee rate for
November 1993 was .1627%.
2. An individual fund fee rate, which varies for each Fund.
* FMR VOLUNTARILY AGREED TO ADOPT REVISED GROUP FEE RATE SCHEDULES WHICH
PROVIDE FOR A MARGINAL RATE AS LOW AS .2850% (EQUITY FUNDS) AND .1325%
(FIXED-INCOME FUNDS) WHEN AVERAGE GROUP NET ASSETS EXCEED $336
BILLION. A NEW MANAGEMENT CONTRACT WITH A REVISED GROUP FEE RATE
SCHEDULE WILL BE PRESENTED FOR APPROVAL AT EACH FUND'S NEXT SHAREHOLDER
MEETING.
One-twelfth of the annual basic fee rate is applied to each Fund's
net assets averaged over the most recent month, giving a dollar amount
which is the management fee for that month.
Equity Portfolio Income pays FMR a monthly management fee at an
annual rate of .50% of its average net assets.
The following are the individual fund fee rates and total management fees
for each Fund ' s most recent fiscal year end.
INDIVIDUAL TOTAL
FUND FEE (AS MANAGEMENT FEE
A PERCENTAGE (AS A PERCENT OF
OF AVERAGE AVERAGE NET
NET ASSETS) ASSETS) BEFORE
REIMBURSEMENTS,
IF ANY

EQUITY FUNDS:

Equity Portfolio Growth .33% .66%

Equity Portfolio Income n/a .50%

FIXED - INCOME FUNDS:

Limited Term Bond .25% .4 2 %

Limited Term Tax-Exempt .25% .42%

FMR may, from time to time, agree to reimburse a Fund for expenses
(excluding interest, taxes, brokerage commissions, and extraordinary
expenses) above a specified percentage of average net assets. FMR retains
the ability to be repaid by a Fund for these expense reimbursements in the
amount that expenses fall below the limit prior to the end of the fiscal
year. Fee reimbursements by FMR will increase a Fund's yield and total
return, and repayment by a Fund will lower its yield and total return. FMR
has voluntarily agreed to reimburse expenses of Limited Term
Tax-Exempt to the extent that expenses exceed .65% of its average net
assets.
FMR has entered into sub-advisory agreements on behalf of certain Funds.
Sub-advisors provide research and investment advice and research services
with respect to issuers based outside the United States and FMR may grant
sub-advisors investment management authority to buy and sell securities if
FMR believes it would be beneficial to a Fund.
Equity Portfolio Growth, Equity Portfolio Income , and Limited
Term Bond have entered into sub-advisory agreements with Fidelity
Management & Research (U.K.) Inc. (FMR U.K.) , in London,
England, and Fidelity Management & Research (Far East) Inc. (FMR
Far East) , in Tokyo, Japan . FMR U.K. focuses primarily on
issuers based in Europe, and FMR Far East focuses primarily on
issuer s based in Asia and the Pacific Basin. Under the sub-advisory
agreements, FMR, and not the Fund, pays FMR U.K. and FMR Far East fees
equal to 110% and 105%, respectively, of each sub-advisor's costs incurred
in connection with its sub-advisory agreement.
FIIOC , an affiliate of FMR, is paid transfer agent fees based
on the type, size and number of accounts in Institutional Shares of
a Fund and the number of transactions made by Institutional
shareholders. For the most recent fiscal year, the fee s paid by
Institutional Shares for transfer agency services amounted to
$324,822 (Equity Portfolio Growth), $239,364 (Equity Portfolio Income),
and $180,350 (Limited Term Bond).
Fidelity Service Co. (Service), 82 Devonshire Street, Boston, Massachusetts
02109, an affiliate of FMR, calculates each Fund's daily Institutional
S hare price and maintains its general accounting records. For those
Funds which can engage in securities lending, Service also administers its
securities lending program. The fees for pricing and bookkeeping
services are based on e a ch Fund's average net assets, but
must fall within a range of $45,000 to $750,000 per year. For the most
recent fiscal year , the fees for pricing and bookkeeping services
(including related out-of-pocket expenses) amounted to: $234,813 (Equity
Portfolio Growth); $113,026 (Equity Portfolio Income); and
$81,106 (Limited Term Bond).
United Missouri Bank, N.A. (United Missouri), 1010 Grand Avenue, Kansas
City, Missouri 64106, acts as the custodian, transfer and pricing and
bookkeeping agent for Limited Term Tax-Exempt. United Missouri has a
sub-arrangement with FIIOC for transfer agent services for
Institutional Shares and a sub-arrangement with Service for pricing and
bookkeeping services. For the most recent fiscal year, fees paid by
Institutional Shares of Limited Term Tax-Exempt to Service (including
related out-of-pocket expenses) amounted to $45,724. All of the fees are
paid to FIIOC and Service by United Missouri, which is reimbursed by
the Fund for such payments.
DISTRIBUTION AND SERVICE PLAN S . The Board of Trustees of each
Trust ha s adopted a Distribution and Service Plan (the
Plan s ) on behalf of the Institutional Shares of each Fund
pursuant to Rule 12b-1 under the Investment Company Act of 1940 (the
Rule). The Rule provides in substance that a mutual fund may not engage
directly or indirectly in financing any activity that is intended primarily
to result in the sale of S hares except pursuant to a plan adopted by
the F und under the Rule. The Board of Trustees has adopted the
Plan s to allow Institutional Shares of each Fund and FMR to
incur certain expenses that might be considered to constitute direct or
indirect payment by Institutional Shares of distribution expenses.
No separate payments by Institutional Shares are authorized under
the Plan s . Rather, the Plan s recognize that FMR may use its
management fee and other resources to pay expenses associated with
activities primarily intended to result in the sale of Institutional
S hares. The Plans also provide that FMR may make payments
from these sources to securities dealers and banks that have
A greements with Distributors (investment professionals) that provide
shareholder support services or engage in the sale of Institutional
S hares. The Board of Trustees has not authorized such payments.
The Glass-Steagall Act generally prohibits federally and state chartered or
supervised banks from engaging in the business of underwriting, selling or
distributing securities. Although the scope of this prohibition under the
Glass-Steagall Act has not been fully defined, in Distributors' opinion it
should not prohibit banks from being paid for shareholder servicing and
recordkeeping. If, because of changes in law or regulation, or because of
new interpretations of existing law, a bank or a Fund were prevented from
continuing these arrangements, it is expected that the Board would make
other arrangements for these services and that shareholders would not
suffer adverse financial consequences. In addition, state securities laws
on this issue may differ from the interpretations of federal law expressed
herein, and banks and other financial institutions may be required to
register as dealers pursuant to state law.
VALUATION
Institutional S hares are valued at NAV. NAV is determined for
Institutional S hares of each Fund by adding the Institutional
Shares' pro rata share of the value of all security holdings and other
assets of the Fund, deducting the Institutional Shares' pro rata
share of the liabilities of the Fund, deducting the liabilities
allocated to Institutional Shares , and then dividing the result by the
number of Institutional S hares of the Fund outstanding.
NAV normally is calculated as of the close of business of the NYSE
(normally 4:00 p.m. Eastern time). The Funds are open for business and NAV
is calculated each day the NYSE is open for trading. Portfolio securities
and other assets are valued primarily on the basis of market quotations
furnished by pricing services, or if quotations are not available, by a
method that the Board of Trustees believes accurately reflects fair value.
Foreign securities are valued based on quotations from the primary market
in which they are traded and are converted from the local currency into
U.S. dollars using current exchange rates.
PERFORMANCE
P erformance may be quoted in advertising in terms of total return.
All performance information is historical and is not intended to indicate
future performance. Share price and total return fluctuate in response to
market conditions and other factors, and the value of a Fund's shares when
redeemed may be worth more or less than their original cost. TOTAL
RETURN is the change in value of an investment in a Fund over a given
period, assuming reinvestment of any dividends and capital gains. A
CUMULATIVE TOTAL RETURN reflects actual performance over a stated period of
time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that,
if achieved annually, would have produced the same cumulative total return
if performance had been constant over the entire period. Average annual
total returns smooth out variations in performance; they are not the same
as actual year-by-year results.
P erformance may also be quoted in terms of yield. YIELD
refers to the income generated by an investment in a Fund over a given
period of time, expressed as an annual percentage rate. Yields are
calculated according to a standard that is required for all stock and bond
funds. Limited Term Tax-Exempt may quote a TAX-EQUIVALENT YIELD,
which shows the taxable yield an investor would have to earn before
taxes to equal the Fund's tax free yield. A TAX-EQUIVALENT YIELD is
calculated by dividing a Fund's yield by the result of one minus a stated
federal tax rate. Because yield calculations differ from other
accounting methods, the quoted yield may not equal the income actually paid
to shareholders. This difference may be significant for funds whose
investments are denominated in foreign currencies. In calculating yield,
the Funds may, from time to time, use a security's coupon rate instead of
its yield to maturity in order to reflect the risk premium on that
security. This practice will have the effect of reducing a Fund's yield.
Fixed i ncome f unds, including t ax- e xempt
f unds, may also quote DISTRIBUTION RATE, which reflects the
Fund's income dividends to its shareholders, divided by a Fund's
offering price for each day in a given period. Other illustrations of
performance may show moving averages over specified periods. For
additional performance information, see the attached annual reports.
PORTFOLIO TRANSACTIONS
FMR uses various brokerage firms to carry out each Fund's equity security
transactions. Fixed-income securities are generally traded in the
over-the-counter market through broker-dealers. A broker-dealer is a
securities firm or bank which makes a market for securities by offering to
buy at one price and sell at a slightly higher price. The difference is
known as a spread. Foreign securities are normally traded in foreign
countries since the best available market for foreign securities is often
on foreign markets. In transactions on foreign stock exchanges, except in
Canada, brokers' commissions are generally fixed and are often higher than
in the United States, where commissions are negotiated. Since FMR, directly
or through affiliated sub-advisors, places a large number of
transactions, including those of Fidelity's other funds, the Funds pay
lower commissions than those paid by individual investors, and
broker-dealers are willing to work with the Funds on a more favorable
spread.
The Funds have authorized FMR to allocate transactions to some
broker-dealers who help distribute the Fund's shares or the shares of
Fidelity's other funds to the extent permitted by law, and on an agency
basis, to Fidelity Brokerage Services, Inc. (FBSI) and Fidelity Brokerage
Services Ltd. (FBSL), affiliates of FMR. FMR will make such allocations if
commissions are comparable to those charged by non-affiliated qualified
broker-dealers for similar services.
FMR may also allocate brokerage transactions to a Fund's custodian, acting
as a broker-dealer, or other broker-dealers, so long as transaction quality
and commission rates are comparable to those of other broker-dealers, where
the broker-dealers will allocate a portion of the commissions paid toward
payment of a Fund's expenses. These expenses currently include transfer
agent and custodian fees.
Higher commissions may be paid to those firms that provide research,
valuation and other services to the extent permitted by law. FMR also is
authorized to allocate brokerage transactions to FBSI in order to secure
from FBSI research services produced by third party, independent entities.
FMR may use this research information in managing each Fund's assets, as
well as assets of other clients.
When consistent with its investment objective, each fixed-income fund may
engage in short-term trading. Also, a security may be sold and another of
comparable quality simultaneously purchased to take advantage of what FMR
believes to be a temporary disparity in the normal yield relationship of
the two securities.
The frequency of portfolio transactions - the turnover rate - will vary
from year to year depending on market conditions. Each Fund's turnover rate
for the most recent fiscal year ended was: 120% ( Equity Portfolio Income);
160% (Equity Portfolio Growth); 59% (Limited Term Bond); and 46%
(Limited Term Tax-Exempt). Because a high turnover rate increases
transaction costs and may increase taxable capital gains, FMR carefully
weighs the anticipated benefits of short-term investing against these
consequences.
THE TRUSTS AND THE FIDELITY ORGANIZATION
Each Trust is an open-end investment management company. Each
Trust was established by a separate Declaration of Trust as a
Massachusetts business trust on th e follow ing date s: June
24, 1983 (Fidelity Advisor Series I); May 17, 1982 (Fidelity Advisor
Series III); May 6, 1983 (Fidelity Advisor Series IV); and June 1, 1983
( Fidelity Advisor Series VI ) . Each Trust has its own
Board of Trustees that supervises Fund activities and reviews the
Funds ' contractual arrangements with companies that provide the
Funds with services. As Massachusetts business trusts, the
Trusts are not required to hold annual shareholder meetings,
although special meetings may be called for a class of shares, a Fund or a
Trust as a whole for purposes such as electing or removing Trustees,
changing fundamental investment policies or limitations, or approving a
management contract or plan of distribution. Shareholders receive
one vote for each share and fractional votes for fractional shares of the
Fund. For shareholders of Equity Portfolio Income, the number of votes
to which a shareholder is entitled is based upon the dollar value of
the investment. Separate votes are taken by each class of shares or each
Fund if a matter affects just that class of shares or Fund, respectively.
There is a remote possibility that one Fund might become liable for any
misstatement in the p rospectus about another Fund. Each class of
shares is offered through a separate prospectus.
The shares of e ach Fund are sold to both institutional and
retail investors. Institutional S hares are offered through
this prospectus. Investment professionals do not receive any
compensation for selling or providing shareholder support services to
I nstitutional Class investors. There are two classes
of shares offered to retail investors: Class A shares and Class B
shares.
CLASS A. Each Fund offer s a class of shares to retail
investors with a maximum 4.75% front-end sales charge who engage an
investment professional for investment advice (Class A shares).
The initial and subsequent investment minimums for Class A shares are
$2,500 and $250, respectively. The minimum account balance is
$1,000. Reduced sales charges are applicable to purchases of $50,000
or more of Class A shares of one Fund alone or in combination with
purchases of shares of Class A or Class B shares of other Fidelity
Advis or Funds. Class A investors also may qualify for a
reduction in sales charge under the Rights of Accumulation or Letter of
Intent programs. Sales charges for Class A shares are waived
for certain groups of investors. In addition, Class A investors may
participate in various investment programs. Class A shares of each Fund
may be exchanged for Class A shares of other Fidelity Advisor Funds.
Transfer agent and shareholder services for Class A shares of Equity
Portfolio Growth, Equity Portfolio Income, and Limited Term Bond are
performed by State Street Bank and Trust Company; and for Class A shares of
Limited Term Tax-Exempt, through a sub-contractual arrangement with United
Missouri Bank. For the fiscal year ended November 30, 1993, total operating
expenses for the Class A shares were 1.84% (Equity Portfolio Growth), 1.77%
(Equity Portfolio Income), 1.23% (Limited Term Bond), and .90% (Limited
Term Tax-Exempt), respectively, of average net assets. If FMR had not
reimbursed Limited Term Tax-Exempt, total operating expenses for Class A
shares would have been 1.36% of average net assets.
Under the Class A Distribution and Service Plans, the Class A shares
of Equity Portfolio Growth and Equity Portfolio Income each
pay annually a distribution fee of .65%; and Limited Term
Bond and Limited Term Tax-Exempt each pay annually a distribution fee of
.25% of average net assets . Up to the full amount of the
distribution fee paid by Class A of each Fund to Distributors may be
reallowed to investment professionals based upon the level of marketing and
distribution services provided. Class A shares do not pay a shareholder
service fee in addition to the distribution fee.
CLASS B. Equity Portfolio Income, Limited Term Bond, and Limited
Term Tax-Exempt each offer a class of shares with a contingent deferred
sales charge to retail investors who engage an investment professional for
investment advice (Class B shares). Class B shares of each
Fund are subject to a n annual distribution fee of .75%
and a n annual service fee of .25% of their respective average
net assets, and a contingent deferred sales charge upon redemption
within five years of purchase, which decreases from a maximum of 4%
to 0%. After a maximum holding period of six years, Class B shares
of a Fund automatically convert to Class A shares of the same
Fund . The initial and subsequent investment minimums for Class B
shares are identical to those for Class A shares .
Class B shares of a Fund may be exchanged only for Class B shares of
other Fidelity Advisor Funds or Class B shares of Daily Money Fund:
U.S. Treasury Portfolio. Transfer agent and shareholder services for
Class B shares of Equity Portfolio Income and Limited Term Bond are
performed by FIIOC ; and for Class B shares of Limited Term Tax-Exempt,
are performed by United Missouri Bank . For the current fiscal
year, total operating expenses, as a percentage of average net assets, for
Class B shares are estimated to be as follows: 2.12 % ( Equity
Portfolio Income ) ; 1.98 % ( Limited Term Bond )
and 1.65 % (after reimbursement) ( Limited Term Tax-Exempt ).

Class B shares of a Fund will generally have a lower yield and total return
than Class A shares of the same Fund, due to higher expenses in general.
Investment professionals may receive different levels of compensation
with respect to one particular class of shares over another class of shares
in the Funds.
Fidelity Investments is one of the largest investment management
organizations in the U . S . and has its principal business
address at 82 Devonshire Street, Boston, MA 02109. It includes a number of
different companies that provide a variety of financial services and
products. The Trusts employ various Fidelity companies to perform certain
activities required to operate the Funds.
Fidelity Management & Research Company is the original Fidelity company
founded in 1946. It provides a number of mutual funds and other clients
with investment research and portfolio management services. It maintains a
large staff of experienced investment personnel and a full complement of
related support facilities. As of April 30, 1994 , FMR advised funds
having approximately 1 6 million shareholder accounts with a total
value of more than $225 billion. Fidelity Distributors Corp. distributes
shares for the Fidelity funds.
FMR Corp. is the parent company for the Fidelity companies. Through
ownership of voting common stock, Edward C. Johnson 3d (President and a
Trustee of each Trust), Johnson family members, and various trusts for the
benefit of Johnson family members form a controlling group with
respect to FMR Corp.
Bettina E. Doulton has been manager of Advisor Equity Portfolio Income
since August 1993, and VIP Equity-Income since July 1993.
Previously, she managed S elect Automotive Portfolio and assisted
on
Fidelity Equity-Income Portfolio and Magellan(registered trademark).
Ms. Doulton also served as an analyst following the domestic and
European automotive and tire manufacturing industry as well as the gaming
and lodging industry. Ms. Doulton joined Fidelity in 1985.
Michael S. Gray is vice president and manager of Advisor Limited Term Bond,
which he has managed since August 1987. Mr. Gray also manages
Fidelity Investment Grade Bond, Spartan Investment Grade Bond, and
Intermediate Bond. Mr. Gray joined Fidelity in 1982.
John (Jack) F. Haley Jr. is vice president and manager of Advisor Limited
Term Tax-Exempt, which he has managed since 1985. Mr. Haley also
manages California Tax-Free Insured, California Tax-Free High Yield, and
Spartan California Municipal High Yield. Mr. Haley joined Fidelity
in 1981.
Robert E. Stansky is vice president and manager of Advisor Equity Portfolio
Growth, which he has managed since April 1987. Mr. Stansky also
manages Growth Company. Previously, he managed Emerging Growth and
Select Defense and Aerospace. Mr. Stansky joined Fidelity in 1983.
APPENDIX
The following paragraphs provide a brief description of securities in which
the F unds may invest and transactions they may make. T he
F unds are not limited by this discussion , however, and may
purchase other types of securities and enter into other types of
transactions if they are consistent with the F und s '
investment objective s and policies.
DELAYED-DELIVERY TRANSACTIONS. Securities may be bought and sold on a
when-issued or delayed-delivery basis, with payment and delivery taking
place at a future date. The market value of securities purchased in this
way may change before the delivery date which could increase fluctuations
in a Fund's share price and yield. Ordinarily, a Fund will not earn
interest on securities purchased until they are delivered.
FOREIGN INVESTMENTS . Investment in foreign securities
involve s additional risks. Foreign securities and securities
denominated in or indexed to foreign currencies may be affected by the
strength of foreign currencies relative to the U.S. dollar, or by political
or economic developments in foreign countries. Foreign companies may not be
subject to accounting standards or governmental supervision comparable to
U.S. companies, and there may be less public information about their
operations. F oreign markets may be less liquid or more volatile than
U.S. markets, and may offer less protection to investors . In addition to
the political and economic factors that can affect foreign securities, a
governmental issuer may be unwilling to repay principal and interest when
due, and may require that the conditions for payment be renegotiated. These
factors could make foreign investments, especially those in developing
countries, more volatile. FMR considers these factors in making
investments for a Fund.
A Fund may enter into currency exchange contracts (agreements to exchange
one currency for another at a future date) to manage currency risks and to
facilitate transactions in foreign securities. Although currency forward
contracts can be used to protect a Fund from adverse exchange rate
changes, they involve a risk of loss if FMR fails to predict foreign
currency values correctly.
ILLIQUID INVESTMENTS. Under the supervision of the Board of Trustees, FMR
determines the liquidity of each Fund's investments. The absence of a
trading market can make it difficult to ascertain a market value for
illiquid investments. Disposing of illiquid investments may involve
time-consuming negotiation and legal expenses, and it may be difficult or
impossible for a Fund to sell them promptly at an acceptable price.
INDEXED SECURITIES values are linked to currencies, interest rates,
commodities, indices, or other financial indicators. Most indexed
securities are short to intermediate term fixed-income securities whose
values at maturity or interest rates rise or fall according to the change
in one or more specified underlying instruments. Indexed securities may be
positively or negatively indexed (i.e., their value may increase or
decrease if the underlying instrument appreciates), and may have return
characteristics similar to direct investments in the underlying instrument
or to one or more options on the underlying instrument. Indexed securities
may be more volatile than the underlying instrument itself.
INTERFUND BORROWING PROGRAM. Interfund loans and borrowings normally will
extend overnight, but can have a maximum duration of seven days. A Fund
will lend through the program only when the returns are higher than those
available at the same time from other short-term instruments (such as
repurchase agreements), and will borrow through the program only when the
costs are equal to or lower than the cost of bank loans. Each Fund will not
lend more than 5% ( e quity f unds) or 7.5%
( f ixed- i ncome f unds) of its assets to other funds, and
will not borrow through the program if, after doing so, total outstanding
borrowings would exceed 15% of total assets. Loans may be called on one
day's notice, and a Fund may have to borrow from a bank at a higher
interest rate if an interfund loan is called or not renewed. Any delay in
repayment to a lending fund could result in a lost investment opportunity
or additional borrowing costs.
LOANS AND OTHER DIRECT DEBT INSTRUMENTS are interests in amounts owed by a
corporate, governmental or other borrower to another party. They may
represent amounts owed to lenders or lending syndicates (loans and loan
participations), to suppliers of goods or services (trade claims or other
receivables), or to other parties. Direct debt instruments involve the risk
of loss in case of default or insolvency of the borrower and may offer less
legal protection to the Fund in the event of fraud or misrepresentation. In
addition, loan participations involve a risk of insolvency of the lending
bank or other financial intermediary. Direct debt instruments may also
include standby financing commitments that obligate a Fund to supply
additional cash to the borrower on demand.
LOWER-QUALITY DEBT SECURITIES (those rated Ba or lower by Moody's or BB or
lower by S&P) have poor protection against default in the payment of
principal and interest, or may be in default. These securities are often
considered to be speculative and involve greater risk of loss or price
changes due to changes in the issuer's capacity to pay. The market prices
of lower-rated debt securities may fluctuate more than those of
higher-rated debt securities, and may decline significantly in periods of
general economic difficulty, which may follow periods of rising interest
rates. See "Debt Obligations" on page .
MORTGAGE-BACKED SECURITIES are issued by government entities and
non-government entities such as banks, mortgage lenders, or other financial
institutions.
A mortgage-backed security may be an obligation of the issuer backed by a
mortgage or pool of mortgages or a direct interest in an underlying pool of
mortgages. Some mortgage-backed securities, such as collateralized mortgage
obligations or CMOs, make payments of both principal and interest at a
variety of intervals; others make semiannual interest payments at a
predetermined rate and repay principal at maturity (like a typical bond).
Mortgage-backed securities are based on different types of mortgages
including those on commercial real estate or residential properties. Other
types of mortgage-backed securities will likely be developed in the future,
and each Fund may invest in them if FMR determines they are consistent with
a Fund's investment objective and policies.
The value of mortgage-backed securities may change due to shifts in the
market's perception of issuers. In addition, regulatory or tax changes may
adversely affect the mortgage securities market as a whole. Non-government
mortgage-backed securities may offer higher yields than those issued by
government entities, but also may be subject to greater price changes than
government issues. Mortgage-backed securities are subject to prepayment
risk. Prepayment, which occurs when unscheduled or early payments are made
on the underlying mortgages, may shorten the effective maturities of these
securities and may lower their total returns.
STRIPPED MORTGAGE-BACKED SECURITIES are created when a U.S. government
agency or a financial institution separates the interest and principal
components of a mortgage-backed security and sells them as individual
securities. The holder of the "principal-only" security (PO) receives the
principal payments made by the underlying mortgage-backed security, while
the holder of the "interest-only" security (IO) receives interest payments
from the same underlying security. The prices of stripped mortgage-backed
securities may be particularly affected by changes in interest rates. As
interest rates fall, prepayment rates tend to increase, which tends to
reduce prices of IOs and increase prices of POs. Rising interest rates can
have the opposite effect.
ASSET-BACKED SECURITIES represent interests in pools of consumer
loans (generally unrelated to mortgage loans) and most often are structured
as pass-through securities. Interest and principal payments ultimately
depend on payment of the underlying loans by individuals, although the
securities may be supported by letters of credit or other credit
enhancements. The value of asset-backed securities may also depend on the
creditworthiness of the servicing agent for the loan pool, the originator
of the loans, or the financial institution providing the credit
enhancement.
A Fund may purchase units of beneficial interest in pools of purchase
contracts, financing leases, and sales agreements entered into by
municipalities. These municipal obligations may be created when a
municipality enters into an installment purchase contract or lease with a
vendor and may be secured by the assets purchased or leased by the
municipality. However, except in very limited circumstances, there will be
no recourse against the vendor if the municipality stops making payments.
The market for tax-exempt asset-backed securities is still relatively new.
These obligations are likely to involve unscheduled prepayments of
principal.
OPTIONS AND FUTURES CONTRACTS are bought and sold to manage exposure to
changing interest rates, security prices, and currency exchange rates. Some
options and futures strategies, including selling futures, buying puts, and
writing calls, tend to hedge a Fund's investment against price
fluctuations. Other strategies, including buying futures, writing puts, and
buying calls, tend to increase market exposure. Options and futures may be
combined with each other or with forward contracts in order to adjust the
risk and return characteristics of the overall strategy. A Fund may invest
in options and futures based on any type of security, index, or currency,
including options and futures traded on foreign exchanges and options not
traded on exchanges.
Options and futures can be volatile investments, and involve certain risks.
If FMR applies a hedge at an inappropriate time or judges market conditions
incorrectly, options and futures strategies may lower a Fund's return. A
Fund could also experience losses if the prices of its options and futures
positions were poorly correlated with its other investments, or if it could
not close out its positions because of an illiquid secondary market.
Each Fund will not hedge more than 25% of its total assets by selling
futures, buying puts, and writing calls under normal conditions. In
addition each Fund will not buy futures or write puts whose underlying
value exceeds 25% of its total assets, and will not buy calls with a value
exceeding 5% of its total assets. Each Fund's policies regarding
futures contracts and options are non-fundamental and can be changed at any
time without shareholder approval.
REPURCHASE AGREEMENTS AND SECURITIES LOANS. In a repurchase agreement, a
Fund buys a security at one price and simultaneously agrees to sell it back
at a higher price. A Fund may also make securities loans to broker-dealers
and institutional investors, including FBSI. In the event of the bankruptcy
of the other party to either a repurchase agreement or a securities loan, a
Fund could experience delays in recovering its cash or the securities it
lent. To the extent that, in the meantime, the value of the securities
purchased had decreased or the value of the securities lent had increased,
a Fund could experience a loss. In all cases, FMR must find the
creditworthiness of the other party to the transaction satisfactory.
RESTRICTED SECURITIES are securities which cannot be sold to the public
without registration under the Securities Act of 1933. Unless registered
for sale, these securities can only be sold in privately negotiated
transactions or pursuant to an exemption from registration.
SHORT SALES. If a Fund enters into short sales with respect to stocks
underlying its convertible security holdings, these transactions may help
to hedge against the effect of stock price declines, but may result in
losses if a convertible security's price does not track the price of its
underlying equity. Under normal conditions, convertible securities hedged
with short sales are not currently expected to exceed 15% of a Fund's total
assets.
SOVEREIGN DEBT OBLIGATION are debt instruments issued or guaranteed by
foreign governments or their agencies, including debt of Latin American
nations or other developing countries. Sovereign debt may be in the
form of conventional securities or other types of debt instruments such as
loans or loan participations. Sovereign debt of developing countries
may involve a high degree of risk, and may be in default or present the
risk of default. Governmental entities responsible for repayment of
the debt may be unable or unwilling to repay principal and interest when
due, and may require renegotiation or rescheduling of debt payments.
In addition, prospects for repayment of principal and interest may
depend on political as well as economic factors.
SWAP AGREEMENTS. As one way of managing its exposure to different
types of investments, a Fund may enter into interest rate swaps, currency
swaps, and other types of swap agreements such as caps, collars, and
floors. In a typical interest rate swap, one party agrees to make regular
payments equal to a floating interest rate times a "notional principal
amount," in return for payments equal to a fixed rate times the same
amount, for a specified period of time. If a swap agreement provides for
payments in different currencies, the parties might agree to exchange the
notional principal amount as well. Swaps may also depend on other prices or
rates, such as the value of an index or mortgage prepayment rates.
In a typical cap or floor agreement, one party agrees to make payments only
under specified circumstances, usually in return for payment of a fee by
the other party. For example, the buyer of an interest rate cap obtains the
right to receive payments to the extent that a specified interest rate
exceeds an agreed-upon level, while the seller of an interest rate floor is
obligated to make payments to the extent that a specified interest rate
falls below an agreed-upon level. An interest rate collar combines elements
of buying a cap and selling a floor.
Swap agreements will tend to shift a Fund's investment exposure from one
type of investment to another. For example, if a Fund agreed to exchange
payments in dollars for payments in foreign currency, the swap agreement
would tend to decrease the Fund's exposure to U.S. interest rates and
increase its exposure to foreign currency and interest rates. Caps and
floors have an effect similar to buying or writing options. Depending on
how they are used, swap agreements may increase or decrease the overall
volatility of a Fund's investments and its share price and yield.
Swap agreements are sophisticated hedging instruments that typically
involve a small investment of cash relative to the magnitude of risks
assumed. As a result, swaps can be highly volatile and may have a
considerable impact on a Fund's performance. Swap agreements are subject to
risks related to the counterparty's ability to perform, and may decline in
value if the counterparty's creditworthiness deteriorates. A Fund may also
suffer losses if it is unable to terminate outstanding swap agreements or
reduce its exposure through offsetting transactions.
VARIABLE OR FLOATING RATE INSTRUMENTS , including certain
participation interests in municipal obligations, have interest rate
adjustment formulas that help to stabilize their market values. Many
variable and floating rate instruments also carry demand features that
permit the fund to sell them at par value plus accrued interest on short
notice.
ZERO COUPON BONDS do not make interest payments; instead, they are sold at
a deep discount from their face value and are redeemed at face value when
they mature. Because zero coupon bonds do not pay current income, their
prices can be very volatile when interest rates change. In calculating its
daily dividend, a Fund takes into account as income a portion of the
difference between a zero coupon bond's purchase price and its face value.
A broker-dealer creates a derivative zero by separating the interest and
principal components of a U.S. Treasury security and selling them as two
individual securities. CATS (Certificates of Accrual on Treasury
Securities), TIGRs (Treasury Investment Growth Receipts), and TRs (Treasury
Receipts) are examples of derivative zeros.
The Federal Reserve Bank creates STRIPS (Separate Trading of Registered
Interest and Principal of Securities) by separating the interest and
principal components of an outstanding U.S. Treasury bond and selling them
as individual securities. Bonds issued by the Resolution Funding
Corporation (REFCORP) and the Financing Corporation (FICO) can also be
separated in this fashion. Original issue zeros are zero coupon securities
originally issued by the U.S. government or a government agency.
DEBT OBLIGATIONS. The following table provides a summary of
ratings assigned to debt holdings (not including money market instruments)
of Funds which have the ability to invest over 5% in lower-rated debt
securities. These figures are dollar-weighted averages of month-end
portfolio holdings during the thirteen months ended November 30,
1993, presented as a percentage of total investments. These percentages are
historical and are not necessarily indicative of the quality of current or
future portfolio holdings, which may vary.
MOODY'S RATING & PERCENTAGE OF INVESTMENT
MOODY'S EQUITY EQUITY DESCRIPTION
RATING PORTFOLIO PORTFOLIO INVESTMENT GRADE
INCOME GROWTH

Aaa/Aa/A 1.02% -- Highest quality/high quality/
upper medium grade

Baa 0.77% -- Medium grade

LOWER QUALITY

Ba 1.25% -- Moderately speculative

B 1.29% 0.07% Speculative

Caa 0.06% -- Highly speculative

Ca/C -- -- Poor quality/lowest quality,
no interest

S&P RATING & PERCENTAGE OF INVESTMENT
S&P EQUITY EQUITY DESCRIPTION
RATING PORTFOLIO PORTFOLIO INVESTMENT GRADE
INCOME GROWTH

AAA/AA/A 1.03% -- Highest quality/high quality/
upper medium grade

BBB 0.84% -- Medium grade

LOWER QUALITY

BB 0.98% -- Moderately speculative

B 1.35% 0.07% Speculative

CCC 0.15% -- Highly speculative

CC/C -- -- Poor quality/lowest quality,
no interest

D 0.03% -- In default, in arrears

The dollar-weighted average of debt securities not rated by Moody's
or S&P amounted to .57% (Equity Portfolio Income) and 0% (Equity
Portfolio Growth). This may include securities rated by other nationally
recognized rating services , as well as unrated securities.
THE FOLLOWING DESCRIBES MUNICIPAL INSTRUMENTS:
MUNICIPAL SECURITIES include GENERAL OBLIGATION SECURITIES, which are
backed by the full taxing power of a municipality, and revenue securities,
which are backed by the revenues of a specific tax, project, or facility.
INDUSTRIAL REVENUE BONDS are a type of revenue bond backed by the credit
and security of a private issuer and may involve greater risk. PRIVATE
ACTIVITY MUNICIPAL SECURITIES, which may be subject to the federal
alternative minimum tax, include securities issued to finance housing
projects, student loans, and privately-owned solid waste disposal and water
and sewage treatment facilities.
TAX AND REVENUE ANTICIPATION NOTES are issued by municipalities in
expectation of future tax or other revenues, and are payable from those
specific taxes or revenues. BOND ANTICIPATION NOTES normally provide
interim financing in advance of an issue of bonds or notes, the proceeds of
which are used to repay the anticipation notes. TAX-EXEMPT COMMERCIAL PAPER
is issued by municipalities to help finance short-term capital or operating
needs.
MUNICIPAL LEASE OBLIGATIONS are issued by a state or local government or
authority to acquire land and a wide variety of equipment and facilities.
These obligations typically are not fully backed by the municipality's
credit, and their interest may become taxable if the lease is assigned. If
funds are not appropriated for the following year's lease payments, the
lease may terminate, with the possibility of significant loss to the Fund.
CERTIFICATES OF PARTICIPATION in municipal lease obligations or installment
sales contracts entitle the holder to a proportionate interest in the
lease-purchase payments made.
RESOURCE RECOVERY BONDS are a type of revenue bond issued to build
facilities such as solid waste incinerators or waste-to-energy plants.
Typically, a private corporation will be involved, at least during the
construction phase, and the revenue stream will be secured by fees or rents
paid by municipalities for use of the facilities. The viability of a
resource recovery project, environmental protection regulations, and
project operator tax incentives may affect the value and credit quality of
resource recovery bonds.
A DEMAND FEATURE is a put that entitles the security holder to repayment of
the principal amount of the underlying security, upon notice, at any time
or at specified intervals. A standby commitment is a put that entitles the
security holder to same-day settlement at amortized cost plus accrued
interest.
Issuers or financial intermediaries who provide demand features or standby
commitments often support their ability to buy securities on demand by
obtaining letters of credit (LOCs) or other guarantees from domestic or
foreign banks. LOCs also may be used as credit supports for other types of
municipal instruments. FMR may rely upon its evaluation of a bank's credit
in determining whether to purchase an instrument supported by an LOC. In
evaluating a foreign bank's credit, FMR will consider whether adequate
public information about the bank is available and whether the bank may be
subject to unfavorable political or economic developments, currency
controls, or other governmental restrictions that might affect the bank's
ability to honor its credit commitment.
INVERSE FLOATERS are instruments whose interest rates bear an inverse
relationship to the interest rate on another security or the value of an
index. Changes in the interest rate on the other security or index
inversely affect the residual interest rate paid on the inverse floater,
with the result that the inverse floater's price will be considerably more
volatile than that of a fixed-rate bond. For example, a municipal issuer
may decide to issue two variable rate instruments instead of a single
long-term, fixed-rate bond. The interest rate on one instrument reflects
short-term interest rates, while the interest rate on the other instrument
(the inverse floater) reflects the approximate rate the issuer would have
paid on a fixed-rate bond, multiplied by two, minus the interest rate paid
on the short-term instrument. Depending on market availability, the two
portions may be recombined to form a fixed-rate municipal bond. The market
for inverse floaters is relatively new.
REFUNDING CONTRACTS. A Fund may purchase securities on a when-issued basis
in connection with the refinancing of an issuer's outstanding indebtedness.
Refunding contracts require the issuer to sell and the Fund to buy refunded
municipal obligations at a stated price and yield on a settlement date that
may be several months or several years in the future.
FIDELITY ADVISOR EQUITY PORTFOLIO INCOME : CLASS A
FIDELITY ADVISOR EQUITY PORTFOLIO INCOME : CLASS B
FIDELITY ADVISOR E QUITY PORTFOLIO INCOME : INSTITUTIONAL CLASS
A FUND OF FIDELITY ADVISOR SERIES III
STATEMENT OF ADDITIONAL INFORMATION
JUNE 30, 1994
This Statement is not a prospectus but should be read in conjunction with
the current Fidelity Advisor Equity Portfolio Income (the F und)
Prospectuses (dated June 30, 1994). The Fund offers its shares to two
groups of investors: Institutional investors and r etail investors.
Institutional investors are offered i nstitutional shares and
r etail investors are offered Class A and Class B shares. Please
retain this document for future reference. The financial statements and
financial high lights included in the Annual Report for Institutional
shares for the fiscal year ended November 30, 1993 are incorporated into
its Prospectus. The Annual Report for Class A shares for the fiscal year
ended November 30, 1993, a separate report supplied with this Statement of
Additional Information, is incorporated herein by reference. Additional
copies of either Prospectus, the Statement of Additional Information or
A nnual Reports are available without charge upon request from
Fidelity Distributors Corporation, 82 Devonshire Street, Boston,
Massachusetts 02109 , or from your investment professional.
NATIONW IDE 800-840-6333
TABLE OF CONTENTS PAGE

Investment Policies and Limitations 2

Portfolio Transactions 10

Valuation of Portfolio Securities 11

Performance 12

Additional Purchase, Exchange and Redemption Information 15

Distributions and Taxes 18

FMR 19

Trustees and Officers 19

Management and Other Services 21

The Distributor 22

Distribution and Service Plan 22

Description of the Trust 23

Financial Statements 24

Appendix 24

INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.) Inc. (FMR U.K.)
Fidelity Management & Research (Far East) Inc. (FMR Far East)
DISTRIBUTOR
Fidelity Distributors Corporation (Distributors)
TRANSFER AGENT FOR C LASS A
State Street Bank and Trust Company (State Street or Transfer Agent )
TRANSFER AGENT FOR INSTITUTIONAL CLASS
Fidelity Investments Institutional Operations Company (FIIOC or Transfer
Agent )
CUSTODIAN
The Chase Manhattan Bank, N.A. (Chase or Custodian )
AE PI -PTB -694
INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth in the
Prospectus. Unless otherwise noted, whenever an investment policy or
limitation states a maximum percentage of the Fund's assets that may be
invested in any security or other assets or sets forth a policy regarding
quality standards, such standard or percentage limitation will be
determined immediately after and as a result of the Fund's acquisition of
such security or other asset. Accordingly, any subsequent change in
values, net assets or other circumstances will not be considered when
determining whether the investment complies with the Fund's investment
policies and limitations.
The Fund's fundamental investment policies and limitations cannot be
changed without approval of a "majority of the outstanding voting
securities" (as defined in the Investment Company Act of 1940 (the 1940
Act)) of the Fund. The following are the Fund's fundamental investment
limitations set forth in their entirety. The Fund may not:
(1) with respect to 75% of the Fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed by the
U.S. government or any of its agencies or instrumentalities) if, as a
result (a) more than 5% of the Fund's total assets would be invested in the
securities of that issuer; or (b) the Fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(3) borrow money, except that the Fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of its total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to exceed
this amount will be reduced within three days (not including Sundays and
holidays) to the extent necessary to comply with the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(5) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the Fund from investing in securities or other instruments backed by real
estate or securities of companies engaged in the real estate business);
(6) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not prevent
the Fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities);
(7) lend any security or make any other loan if, as a result, more than
33 1/3% of total assets would be lent to other parties, but this limitation
does not apply to purchases of debt securities or to repurchase agreements;
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The Fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(ii) The Fund does not currently intend to purchase securities on margin,
except that the Fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(iii) The Fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser of (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation). The Fund will not purchase
any security while borrowings representing more than 5% of its total
assets are outstanding. The fund will not borrow from other funds advised
by FMR or its affiliates if total outstanding borrowings immediately after
such borrowing would exceed 15% of the fund's total assets.
(iv) The Fund does not currently intend to purchase any security if, as a
result, more than 10% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(v) The Fund does not currently intend to invest in securities of real
estate investment trusts that are not readily marketable, or to invest in
securities of real estate limited partnerships that are not listed on the
New York Stock Exchange (NYSE) or the American Stock Exchange (AMEX) or
traded on the NASDAQ National Market System.
(vi) The Fund does not currently intend to lend assets other than
securities to other parties, except (a) by lending money (up to 5% of the
Fund's net assets) to a registered investment company or portfolio for
which FMR or an affiliate serves as investment adviser, or (b) acquiring
loans, loan participations, or other forms of direct debt instruments and
in connection therewith, assuming any associated unfunded commitments of
the sellers. (This limitation does not apply to purchases of debt
securities or to repurchase agreements.)
(vii) The Fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers of
exchange, or as a result of a reorganization, consolidation or merger.
(viii) The Fund does not currently intend to purchase the securities of
any issuer (other than securities issued or guaranteed by domestic or
foreign governments or political subdivisions thereof) if, as a result,
more than 5% of its total assets would be invested in the securities of
business enterprises that, including predecessors, have a record of less
than three years of continuous operation.
(ix) The Fund does not currently intend to purchase warrants, valued at
the lower of cost or market, in excess of 5% of the Fund's net assets.
Included in that amount, but not to exceed 2% of the Fund's net assets, may
be warrants that are not listed on the NYSE or AMEX. Warrants acquired by
the Fund in units or attached to securities are not subject to these
restrictions.
(x) The Fund does not currently intend to purchase the securities of any
issuer if those officers and Trustees of the Trust and those officers and
directors of FMR who individually own more than 1/2 of 1% of the securities
of such issuer together own more than 5% of such issuer's securities.
(xi) The Fund does not currently intend to invest in oil, gas or other
mineral exploration or development programs or leases.
For the Fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions"
beginning on page 7.
AFFILIATED BANK TRANSACTIONS. A fund may engage in transactions with
financial institutions that are, or may be considered to be, "affiliated
persons" of the fund under the Investment Company Act of 1940. These
transactions may include repurchase agreements with custodian banks;
short-term obligations of, and repurchase agreements with, the 50 largest
U.S. banks (measured by deposits); municipal securities; U.S. government
securities with affiliated financial institutions that are primary dealers
in these securities; short-term currency transactions; and short-term
borrowings. In accordance with exemptive orders issued by the Securities
and Exchange Commission, the Board of Trustees has established and
periodically reviews procedures applicable to transactions involving
affiliated financial institutions.
FUND'S RIGHTS AS A SHAREHOLDER. The Fund does not intend to direct or
administer the day-to-day operations of any company. The Fund, however,
may exercise its rights as a shareholder and may communicate its views on
important matters of policy to management, the Board of Directors, and
other shareholders of a company when FMR determines that such matters could
have a significant effect on the value of the Fund's investment in the
company. The activities that the Fund may engage in, either individually
or in conjunction with others, may include, among others, supporting or
opposing proposed changes in a company's corporate structure or business
activities; seeking changes in a company's directors or management; seeking
changes in company's direction or policies; seeking the sale or
reorganization of the company or a portion of its assets; or supporting or
opposing third-party takeover efforts. This area of corporate activity is
increasingly prone to litigation and it is possible that the Fund could be
involved in lawsuits related to such activities. FMR will monitor such
activities with a view to mitigating, to the extent possible, the risk of
litigation against the Fund and the risk of actual liability if the Fund is
involved in litigation. No guarantee can be made, however, that litigation
against the Fund will not be undertaken or liabilities incurred.
ASSET-BACKED SECURITIES. Asset-backed securities represent interests in
pools of consumer loans (generally unrelated to mortgage loans) and most
often are structured as pass-through securities. Interest and principal
payments ultimately depend on payment of the underlying loans by
individuals, although the securities may be supported by letters of credit
or other credit enhancements. The value of asset-backed securities may
also depend on the creditworthiness of the servicing agent for the loan
pool, the originator of the loans, or the financial institution providing
the credit enhancement.
FOREIGN INVESTMENTS. Foreign investments can involve significant risks in
addition to the risks inherent in U.S. investments. The value of
securities denominated in or indexed to foreign currencies, and of
dividends and interest from such securities, can change significantly when
foreign currencies strengthen or weaken relative to the U.S. dollar.
Foreign securities markets generally have less trading volume and less
liquidity than U.S. markets, and prices on some foreign markets can be
highly volatile. Many foreign countries lack uniform accounting and
disclosure standards comparable to those applicable to U.S. companies, and
it may be more difficult to obtain reliable information regarding an
issuer's financial condition and operations. In addition, the costs of
foreign investing, including withholding taxes, brokerage commissions and
custodial costs, are generally higher than for U.S. investments.

Foreign markets may offer less protection to investors than U.S. markets.
Foreign issuers, brokers and securities markets may be subject to less
government supervision. Foreign security trading practices, including
those involving the release of assets in advance of payment, may involve
increased risks in the event of a failed trade or the insolvency of a
broker-dealer, and may involve substantial delays. It may also be
difficult to enforce legal rights in foreign countries.

Investing abroad also involves different political and economic risks.
Foreign investments may be affected by actions of foreign governments
adverse to the interests of U.S. investors, including the possibility of
expropriation or nationalization of assets, confiscatory taxation,
restrictions on U.S. investment or on the ability to repatriate assets or
convert currency into U.S. dollars, or other government intervention.
There may be a greater possibility of default by foreign governments or
foreign government-sponsored enterprises. Investments in foreign countries
also involve a risk of local political, economic, or social instability,
military action or unrest, or adverse diplomatic developments. There is no
assurance that FMR will be able to anticipate these potential events or
counter their effects.

The considerations noted above generally are intensified for investments
in developing countries. Developing countries may have relatively unstable
governments, economies based on only a few industries, and securities
markets that trade a small number of securities.

The Fund may invest in foreign securities that impose restrictions on
transfer within the U.S. or to U.S. persons. Although securities subject
to transfer restrictions may be marketable abroad, they may be less liquid
than foreign securities of the same class that are not subject to such
restrictions.

American Depositary Receipts and European Depositary Receipts (ADRs and
EDRs), are certificates evidencing ownership of shares of a foreign-based
issuer held in trust by a bank or similar financial institution. Designed
for use in U.S. and European securities markets, respectively, ADRs and
EDRs are alternatives to the purchase of the underlying securities in their
national markets and currencies.

FOREIGN CURRENCY TRANSACTIONS. The Fund may hold foreign currency
deposits from time to time, and may convert dollars and foreign currencies
in the foreign exchange markets. Currency conversion involves dealer
spreads and other costs, although commissions usually are not charged.
Currencies may be exchanged on a spot (i.e., cash) basis, or by entering
into forward contracts to purchase or sell foreign currencies at a future
date and price. Forward contracts generally are traded in an interbank
market conducted directly between currency traders (usually large
commercial banks) and their customers. The parties to a forward contract
may agree to offset or terminate the contract before its maturity, or may
hold the contract to maturity and complete the contemplated currency
exchange.

The Fund may use currency forward contracts to manage currency risks and
to facilitate transactions in foreign securities. The following discussion
summarizes the principal currency management strategies involving forward
contracts that could be used by the Fund.

In connection with purchases and sales of securities denominated in
foreign currencies, the Fund may enter into currency forward contracts to
fix a definite price for the purchase or sale in advance of the trade's
settlement date. This technique is sometimes referred to as a "settlement
hedge" or "transaction hedge." FMR expects to enter into settlement hedges
in the normal course of managing the Fund's foreign investments. The Fund
could also enter into forward contracts to purchase or sell a foreign
currency in anticipation of future purchases or sales of securities
denominated in foreign currency, even if the specific investments have not
yet been selected by FMR.

The Fund may also use forward contracts to hedge against a decline in the
value of existing investments denominated in foreign currency. For
example, if the Fund owned securities denominated in pounds sterling, it
could enter into a forward contract to sell pounds sterling in return for
U.S. dollars to hedge against possible declines in the pound's value. Such
a hedge, sometimes referred to as a "position hedge", would tend to offset
both positive and negative currency fluctuations, but would not offset
changes in security values caused by other factors. The Fund could also
hedge the position by selling another currency expected to perform
similarly to the pound sterling - for example, by entering into a forward
contract to sell Deutschemarks or European Currency Units in return for
U.S. dollars. This type of hedge, sometimes referred to as a "proxy
hedge", could offer advantages in terms of cost, yield, or efficiency, but
generally would not hedge currency exposure as effectively as a simple
hedge into U.S. dollars. Proxy hedges could result in losses if the
currency used to hedge does not perform similarly to the currency in which
the hedged securities are denominated.

Under certain conditions, SEC guidelines require mutual funds to set aside
appropriate liquid assets in a segregated custodial account to cover
currency forward contracts. As required by SEC guidelines, the Fund will
segregate assets to cover currency forward contracts, if any, whose purpose
is essentially speculative. The Fund will not segregate assets to cover
forward contracts entered into for hedging purposes, including settlement
hedges, position hedges and proxy hedges.

Successful use of forward currency contracts will depend on FMR's skill in
analyzing and predicting currency values. Forward contracts may
substantially change the Fund's investment exposure to changes in currency
exchange rates, and could result in losses to the Fund if currencies do not
perform as FMR anticipates. For example, if a currency's value rose at a
time when FMR had hedged the Fund by selling that currency in exchange for
dollars, the Fund would be unable to participate in the currency's
appreciation. If FMR hedges currency exposure through proxy hedges, the
Fund could realize currency losses from the hedge and the security position
at the same time if the two currencies do not move in tandem. Similarly,
if FMR increases the Fund's exposure to a foreign currency, and that
currency's value declines, the Fund will realize a loss. There is no
assurance that FMR's use of forward currency contracts will be advantageous
to the Fund or that it will hedge at an appropriate time. The policies
described in this section are non-fundamental policies of the Fund.
ILLIQUID INVESTMENTS are investments that cannot be sold or disposed of in
the ordinary course of business at approximately the prices at which they
are valued. Under the supervision of the Board of Trustees, FMR determines
the liquidity of the Fund's investments and, through reports from FMR, the
Board monitors investments in illiquid instruments. In determining the
liquidity of the Fund's investments, FMR may consider various factors
including (1) the frequency of trades and quotations, (2) the number of
dealers and prospective purchasers in the marketplace, (3) dealer
undertakings to make a market, (4) the nature of the security (including
any demand or tender features) and (5) the nature of the marketplace for
trades (including the ability to assign or offset the Fund's rights and
obligations relating to the investment). Investments currently considered
by the Fund to be illiquid include repurchase agreements not entitling the
holder to payment of principal and interest within seven days,
over-the-counter options and non-government stripped fixed-rate
mortgage-backed securities. Also, FMR may determine some restricted
securities, government stripped fixed-rate mortgage-backed securities,
loans and other direct debt instruments and swap agreements to be illiquid.
However, with respect to over-the-counter options the Fund writes, all or a
portion of the value of the underlying instrument may be illiquid depending
on the assets held to cover the option and the nature and terms of any
agreement the Fund may have to close out the option before expiration. In
the absence of market quotations, illiquid investments are priced at fair
value as determined in good faith by a committee appointed by the Board of
Trustees. If through a change in values, net assets or other
circumstances, the Fund were in a position where more than 10% of its net
assets were invested in illiquid securities, it would seek to take
appropriate steps to protect liquidity.
RESTRICTED SECURITIES generally can be sold in privately negotiated
transactions, pursuant to an exemption from registration under the
Securities Act of 1933, or in a registered public offering. Where
registration is required, the Fund may be obligated to pay all or part of
the registration expense and a considerable period may elapse between the
time it decides to seek registration and the time the Fund may be permitted
to sell a security under an effective registration statement. If, during
such a period, adverse market conditions were to develop, the Fund might
obtain a less favorable price than prevailed when it decided to seek
registration of the security.
LOANS AND OTHER DIRECT DEBT INSTRUMENTS are interests in amounts owed by a
corporate, governmental or other borrower to another party. They may
represent amounts owed to lenders or lending syndicates (loans and loan
participations), to suppliers of goods or services (trade claims or other
receivables), or to other parties. Direct debt instruments involve the
risk of loss in case of default or insolvency of the borrower. Direct debt
instruments may offer less legal protection to the Portfolio in the event
of fraud or misrepresentation. In addition, loan participations involve a
risk of insolvency of the lending bank or other financial intermediary.
Direct debt instruments also may include standby financing commitments that
obligate the Portfolio to supply additional cash to the borrower on demand.
LOWER-QU ALITY DEBT SECURITIES. While the market for high-yield
corporate debt securities has been in existence for many years and has
weathered previous economic downturns, the 1980s brought a dramatic
increase in the use of such securities to fund highly leveraged corporate
acquisitions and restructurings. Past experience may not provide an
accurate indication of the future performance of the high yield bond
market, especially during periods of economic recession. In fact, from
1989 to 1991, the percentage of lower-quali ty debt securities that
defaulted rose significantly above prior levels, although the default rate
decreased in 1992 and 1993.

The market for lower-quality debt securities may be thinner and less
active than that for higher quality debt securities, which can
adver sely affect the prices at which the former are sold. If market
quotations are not available, lower-quality debt securities will be valued
in accordance with procedures established by the Board of Trustees,
including the use of outside pricing services. Judgment plays a greater
role in valuing high-yield corporate debt securities than is the case for
securities for which more external sources for quotations and last-sale
information are available. Adverse publicity and changing investor
perceptions may affect the ability of out side pricing services to
value lower-quality debt securities and the Fund's ability to dispose of
these securities.
Since the ri sk of default is higher for lower-quality debt
securities, FMR's research and credit analysis are an especially important
part of managing securities of this type held by the Fund. In considering
investments for the Fund, FMR will attempt to identify those issuers of
high-yielding debt securities whose financial condition is adequate to meet
future obligations, has improved, or is expected to improve in the future.
FMR's analysis focuses on relative values based on such factors as interest
or dividend coverage, asset coverage, earnings prospects, and the
experience and managerial strength of the issuer.
The Fund may choose, at its expense or in conjunction with others, to
pursue litigation or otherwise exercise its rights as a security holder to
seek to protect the interests of security holders if it determines this to
be in the best interest of the Fund's shareholders.
MORTGAGE-BACKED SECURITIES. The Portfolio may purchase mortgage-backed
securities issued by government and non-government entities such as banks,
mortgage lenders, or other financial institutions. A mortgage-backed
security may be an obligation of the issuer backed by a mortgage or pool of
mortgages or a direct interest in an underlying pool of mortgages. Some
mortgage-backed securities, such as collateralized mortgage obligations or
CMOs, make payments of both principal and interest at a variety of
intervals; others make semiannual interest payments at a predetermined rate
and repay principal at maturity (like a typical bond). Mortgage-backed
securities are based on different types of mortgages including those on
commercial real estate or residential properties. Other types of
mortgage-backed securities will likely be developed in the future, and the
Portfolio may invest in them if FMR determines they are consistent with the
Portfolio's investment objective and policies.

The value of mortgage-backed securities may change due to shifts in the
market's perception of issuers. In addition, regulatory or tax changes may
adversely affect the mortgage securities market as a whole. Non-government
mortgage-backed securities may offer higher yields than those issued by
government entities, but also may be subject to greater price changes than
government issues. Mortgage-backed securities are subject to prepayment
risk. Prepayment, which occurs when unscheduled or early payments are made
on the underlying mortgages, may shorten the effective maturities of these
securities and may lower their total returns.
REAL ESTATE-BACKED SECURITIES. The Portfolio may invest in the equity
securities of companies principally engaged in the real estate industry.
Real estate industry companies may include among others: real estate
investment trusts; brokers or real estate developers; and companies with
substantial real estate holdings, such as paper and lumber producers and
hotel and entertainment companies. Companies engaged in the real estate
industry may be subject to certain risks including: declines in the value
of real estate, risks related to general and local conditions, overbuilding
and increased competition, increases in property taxes and operating
expenses, and variations in rental income.
REPURCHASE AGREEMENTS. In a repurchase agreement, the Fund purchases a
security and simultaneously commits to resell that security to the seller
at an agreed-upon price on an agreed-upon date within a number of days from
the date of purchase. The resale price reflects the purchase price plus an
agreed-upon incremental amount which is unrelated to the coupon rate or
maturity of the purchased security. A repurchase agreement involves the
obligation of the seller to pay the agreed-upon price, which obligation is
in effect secured by the value (at least equal to the amount of the
agreed-upon resale price and marked to market daily) of the underlying
security. The Fund may engage in repurchase agreements with respect to any
security in which it is authorized to invest. While it does not presently
appear possible to eliminate all risks from these transactions
(particularly the possibility of a decline in the market value of the
underlying securities, as well as delay and costs to the Fund in connection
with bankruptcy proceedings), it is the policy of the Fund to limit
repurchase agreements to those member banks of the Federal Reserve System
and primary dealers in U.S. government securities whose creditworthiness
has been reviewed and found satisfactory by FMR.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, the
Fund sells a portfolio instrument to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase the instrument
at a particular price and time. While a reverse repurchase agreement is
outstanding, the Fund will maintain appropriate liquid assets in a
segregated custodial account to cover its obligation under the agreement.
The Fund will enter into reverse repurchase agreements only with parties
whose creditworthiness has been found satisfactory by FMR. Such
transactions may increase fluctuations in the market value of the Fund's
assets and may be viewed as a form of leverage.
SECURITIES LENDING. The Fund may lend securities to parties such as
broker-dealers or institutional investors, including Fidelity Brokerage
Services, Inc. (FBSI). FBSI is a member of the NYSE and a subsidiary of
FMR Corp.

Securities lending allows the Fund to retain ownership of the securities
loaned and, at the same time, to earn additional income. Since there may
be delays in the recovery of loaned securities, or even a loss of rights in
collateral supplied should the borrower fail financially, loans will be
made only to parties deemed by FMR to be of good standing. Furthermore,
they will only be made if, in FMR's judgment, the consideration to be
earned from such loans would justify the risk.

FMR understands that it is the current view of the SEC Staff that the Fund
may engage in loan transactions only under the following conditions: (1)
the Fund must receive 100% collateral in the form of cash or cash
equivalents (e.g., U.S. Treasury bills or notes) from the borrower; (2) the
borrower must increase the collateral whenever the market value of the
securities loaned (determined on a daily basis) rises above the value of
the collateral; (3) after giving notice, the Fund must be able to terminate
the loan at any time; (4) the Fund must receive reasonable interest on the
loan or a flat fee from the borrower, as well as amounts equivalent to any
dividends, interest, or other distributions on the securities loaned and to
any increase in market value; (5) the Fund may pay only reasonable
custodian fees in connection with the loan; and (6) the Board of Trustees
must be able to vote proxies on the securities loaned, either by
terminating the loan or by entering into an alternative arrangement with
the borrower.

Cash received through loan transactions may be invested in any security in
which the Fund is authorized to invest. Investing this cash subjects that
investment, as well as the security loaned, to market forces (i.e., capital
appreciation or depreciation).
SWAP AGREEMENTS. Swap agreements can be individually negotiated and
structured to include exposure to a variety of different types of
investments or market factors. Depending on their structure, swap
agreements may increase or decrease the Fund's exposure to long- or
short-term interest rates (in the U.S. or abroad), foreign currency values,
mortgage securities, corporate borrowing rates, or other factors such as
security prices or inflation rates. Swap agreements can take many
different forms and are known by a variety of names. The Fund is not
limited to any particular form of swap agreement if FMR determines it is
consistent with the Fund's investment objective and policies.
The most significant factor in the performance of swap agreements is the
change in the specific interest rate, currency, or other factors that
determine the amounts of payments due to and from the Fund. If a swap
agreement calls for payments by the Fund, the Fund must be prepared to make
such payments when due. In addition, if the counterparty's
creditworthiness declined, the value of a swap agreement would be likely to
decline, potentially resulting in losses. The Fund expects to be able to
reduce its exposure under swap agreements either by assignment or other
disposition, or by entering into an offsetting swap agreement with the same
party or a similarly creditworthy party.
The Fund will maintain appropriate liquid assets in a segregated custodial
account to cover its current obligations under swap agreements. If the
Fund enters into a swap agreement on a net basis, it will segregate assets
with a daily value at least equal to the excess, if any, of the Fund's
accrued obligations under the swap agreement over the accrued amount the
Fund is entitled to receive under the agreement. If the Fund enters into a
swap agreement on other than a net basis, it will segregate assets with a
value equal to the full amount of the Fund's accrued obligations under the
agreement.
INDEXED SECURITIES. The Fund may purchase securities whose prices are
indexed to the prices of other securities, securities indices, currencies,
precious metals or other commodities, or other financial indicators.
Indexed securities typically, but not always, are debt securities or
deposits whose value at maturity or coupon rate is determined by reference
to a specific instrument or statistic. Gold-indexed securities, for
example, typically provide for a maturity value that depends on the price
of gold, resulting in a security whose price tends to rise and fall
together with gold prices. Currency-indexed securities typically are
short-term to intermediate-term debt securities whose maturity values or
interest rates are determined by reference to the values of one or more
specified foreign currencies, and may offer higher yields than U.S.
dollar-denominated securities of equivalent issuers. Currency-indexed
securities may be positively or negatively indexed; that is, their maturity
value may increase when the specified currency value increases, resulting
in a security that performs similarly to a foreign-denominated instrument,
or their maturity value may decline when foreign currencies increase,
resulting in a security whose price characteristics are similar to a put on
the underlying currency. Currency-indexed securities may also have prices
that depend on the values of a number of different foreign currencies
relative to each other.
The performance of indexed securities depends to a great extent on the
performance of the security, currency, or other instrument to which they
are indexed, and may also be influenced by interest rate changes in the
U.S. and abroad. At the same time, indexed securities are subject to the
credit risks associated with the issuer of the security, and their values
may decline substantially if the issuer's creditworthiness deteriorates.
Recent issuers of indexed securities have included banks, corporations, and
certain U.S. government agencies. Indexed securities may be more volatile
than the underlying instruments.
LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. The Fund intends to file
a notice of eligibility for exclusion from the definition of the term
"commodity pool operator" with the Commodity Futures Trading Commission
(CFTC) and the National Futures Association, which regulate trading in the
futures markets, before engaging in any purchases or sales of futures
contracts or options on futures contracts. The Fund intends to comply with
Section 4.5 of the regulations under the Commodity Exchange Act which
limits the extent to which the Fund can commit assets to initial margin
deposits and option premiums.

In addition, the Fund will not: (a) sell futures contracts, purchase put
options, or write call options if, as a result, more than 25% of the Fund's
total assets would be hedged with futures and options under normal
conditions; (b) purchase futures contracts or write put options if, as a
result, the Fund's total obligations upon settlement or exercise of
purchased futures contracts and written put options would exceed 25% of its
total assets; or (c) purchase call options if, as a result, the current
value of option premiums for call options purchased by the Fund would
exceed 5% of the Fund's total assets. These limitations do not apply to
options attached to or acquired or traded together with their underlying
securities, and do not apply to securities that incorporate features
similar to options.
The above limitations on the Fund's investments in futures contracts and
options, and the Fund's policies regarding futures contracts and options
discussed elsewhere in this Statement of Additional Information, are not
fundamental policies and may be changed as regulatory agencies permit.
FUTURES CONTRACTS. When the Fund purchases a futures contract, it agrees
to purchase a specified underlying instrument at a specified future date.
When the Fund sells a futures contract, it agrees to sell the underlying
instrument at a specified future date. The price at which the purchase and
sale will take place is fixed when the Fund enters into the contract. Some
currently available futures contracts are based on specific securities,
such as U.S. Treasury bonds or notes, and some are based on indices of
securities prices, such as the Standard & Poor's 500 Composite Stock
Price Index (S&P 500). Futures can be held until their delivery dates,
or can be closed out before then if a liquid secondary market is available.

The value of a futures contract tends to increase and decrease in tandem
with the value of its underlying instrument. Therefore, purchasing futures
contracts will tend to increase the Fund's exposure to positive and
negative price fluctuations in the underlying instrument, much as if it had
purchased the underlying instrument directly. When the Fund sells a
futures contract, by contrast, the value of its futures position will tend
to move in a direction contrary to the market. Selling futures contracts,
therefore, will tend to offset both positive and negative market price
changes, much as if the underlying instrument had been sold.
FUTURES MARGIN PAYMENTS. The purchaser or seller of a futures contract is
not required to deliver or pay for the underlying instrument unless the
contract is held until the delivery date. However, both the purchaser and
seller are required to deposit "initial margin" with a futures broker,
known as a futures commission merchant (FCM), when the contract is entered
into. Initial margin deposits are typically equal to a percentage of the
contract's value. If the value of either party's position declines, that
party will be required to make additional "variation margin" payments to
settle the change in value on a daily basis. The party that has a gain may
be entitled to receive all or a portion of this amount. Initial and
variation margin payments do not constitute purchasing securities on margin
for purposes of the Fund's investment limitations. In the event of the
bankruptcy of an FCM that holds margin on behalf of the Fund, the Fund may
be entitled to return of margin owed to it only in proportion to the amount
received by the FCM's other customers, potentially resulting in losses to
the Fund.
PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, the Fund
obtains the right (but not the obligation) to sell the option's underlying
instrument at a fixed strike price. In return for this right, the Fund
pays the current market price for the option (known as the option premium).
Options have various types of underlying instruments, including specific
securities, indices of securities prices, and futures contracts. The Fund
may terminate its position in a put option it has purchased by allowing it
to expire or by exercising the option. If the option is allowed to expire,
the Fund will lose the entire premium it paid. If the Fund exercises the
option, it completes the sale of the underlying instrument at the strike
price. The Fund may also terminate a put option position by closing it out
in the secondary market at its current price, if a liquid secondary market
exists.

The buyer of a typical put option can expect to realize a gain if security
prices fall substantially. However, if the underlying instrument's price
does not fall enough to offset the cost of purchasing the option, a put
buyer can expect to suffer a loss (limited to the amount of the premium
paid, plus related transaction costs).

The features of call options are essentially the same as those of put
options, except that the purchaser of a call option obtains the right to
purchase, rather than sell, the underlying instrument at the option's
strike price. A call buyer typically attempts to participate in potential
price increases of the underlying instrument with risk limited to the cost
of the option if security prices fall. At the same time, the buyer can
expect to suffer a loss if security prices do not rise sufficiently to
offset the cost of the option.
WRITING PUT AND CALL OPTIONS. When the Fund writes a put option, it takes
the opposite side of the transaction from the option's purchaser. In
return for receipt of the premium, the Fund assumes the obligation to pay
the strike price for the option's underlying instrument if the other party
to the option chooses to exercise it. When writing an option on a futures
contract, the Fund will be required to make margin payments to an FCM as
described above for futures contracts. The Fund may seek to terminate its
position in a put option it writes before exercise by closing out the
option in the secondary market at its current price. If the secondary
market is not liquid for a put option the Fund has written, however, the
Fund must continue to be prepared to pay the strike price while the option
is outstanding, regardless of price changes, and must continue to set aside
assets to cover its position.

If security prices rise, a put writer would generally expect to profit,
although its gain would be limited to the amount of the premium it
received. If security prices remain the same over time, it is likely that
the writer will also profit, because it should be able to close out the
option at a lower price. If security prices fall, the put writer would
expect to suffer a loss. This loss should be less than the loss from
purchasing the underlying instrument directly, however, because the premium
received for writing the option should mitigate the effects of the decline.

Writing a call option obligates the Fund to sell or deliver the option's
underlying instrument, in return for the strike price, upon exercise of the
option. The characteristics of writing call options are similar to those
of writing put options, except that writing calls generally is a
profitable strategy if prices remain the same or fall. Through receipt of
the option premium, a call writer mitigates the effects of a price decline.
At the same time, because a call writer must be prepared to deliver the
underlying instrument in return for the strike price, even if its current
value is greater, a call writer gives up some ability to participate in
security price increases.
COMBINED POSITIONS. The Fund may purchase and write options in
combination with futures or forward contracts, to adjust the risk and
return characteristics of its overall position. For example, the Fund may
purchase a put option and write a call option on the same underlying
instrument, in order to construct a combined position whose risk and return
characteristics are similar to selling a futures contract. Another
possible combined position would involve writing a call option at one
strike price and buying a call option at a lower price, in order to reduce
the risk of the written call option in the event of a substantial price
increase. Because combined options positions involve multiple trades, they
result in higher transaction costs and may be more difficult to open and
close out.
CORRELATION OF PRICE CHANGES. Because there are a limited number of types
of exchange-traded options and futures contracts, it is likely that the
standardized contracts available will not match the Fund's current or
anticipated investments exactly. The Fund may invest in options and
futures contracts based on securities with different issuers, maturities,
or other characteristics from the securities in which it typically invests,
which involves a risk that the options or futures position will not track
the performance of the Fund's other investments.

Options and futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments match the Fund's
investments well. Options and futures prices are affected by such factors
as current and anticipated short-term interest rates, changes in volatility
of the underlying instrument, and the time remaining until expiration of
the contract, which may not affect security prices the same way. Imperfect
correlation may also result from differing levels of demand in the options
and futures markets and the securities markets, from structural differences
in how options and futures and securities are traded, or from imposition of
daily price fluctuation limits or trading halts. The Fund may purchase or
sell options and futures contracts with a greater or lesser value than the
securities it wishes to hedge or intends to purchase in order to attempt to
compensate for differences in volatility between the contract and the
securities, although this may not be successful in all cases. If price
changes in the Fund's options or futures positions are poorly correlated
with its other investments, the positions may fail to produce anticipated
gains or result in losses that are not offset by gains in other
investments.
LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There is no assurance a
liquid secondary market will exist for any particular options or futures
contract at any particular time. Options may have relatively low trading
volume and liquidity if their strike prices are not close to the underlying
instrument's current price. In addition, exchanges may establish daily
price fluctuation limits for options and futures contracts, and may halt
trading if a contract's price moves upward or downward more than the limit
in a given day. On volatile trading days when the price fluctuation limit
is reached or a trading halt is imposed, it may be impossible for the Fund
to enter into new positions or close out existing positions. If the
secondary market for a contract is not liquid because of price fluctuation
limits or otherwise, it could prevent prompt liquidation of unfavorable
positions, and potentially could require the Fund to continue to hold a
position until delivery or expiration regardless of changes in its value.
As a result, the Fund's access to other assets held to cover its options or
futures positions could also be impaired.
OTC OPTIONS. Unlike exchange-traded options, which are standardized with
respect to the underlying instrument, expiration date, contract size, and
strike price, the terms of over-the-counter options (options not traded on
exchanges) generally are established through negotiation with the other
party to the option contract. While this type of arrangement allows the
Fund greater flexibility to tailor an option to its needs, OTC options
generally involve greater credit risk than exchange-traded options, which
are guaranteed by the clearing organization of the exchanges where they are
traded.
OPTIONS AND FUTURES RELATING TO FOREIGN CURRENCIES. Currency futures
contracts are similar to forward currency exchange contracts, except that
they are traded on exchanges (and have margin requirements) and are
standardized as to contract size and delivery date. Most currency futures
contracts call for payment or delivery in U.S. dollars. The underlying
instrument of a currency option may be a foreign currency, which generally
is purchased or delivered in exchange for U.S. dollars, or may be a futures
contract. The purchaser of a currency call obtains the right to purchase
the underlying currency, and the purchaser of a currency put obtains the
right to sell the underlying currency.

The uses and risks of currency options and futures are similar to options
and futures relating to securities or indices, as discussed above. The
Fund may purchase and sell currency futures and may purchase and write
currency options to increase or decrease its exposure to different foreign
currencies. The Fund may also purchase and write currency options in
conjunction with each other or with currency futures or forward contracts.
Currency futures and options values can be expected to correlate with
exchange rates, but may not reflect other factors that affect the value of
the Fund's investments. A currency hedge, for example, should protect a
Yen-denominated security from a decline in the Yen, but will not protect
the Fund against a price decline resulting from deterioration in the
issuer's creditworthiness. Because the value of the Fund's
foreign-denominated investments changes in response to many factors other
than exchange rates, it may not be possible to match the amount of currency
options and futures to the value of the Fund's investments exactly over
time.
ASSET COVERAGE FOR FUTURES AND OPTIONS POSITIONS. The Fund will comply
with guidelines established by the SEC with respect to coverage of options
and futures strategies by mutual funds, and if the guidelines so require
will set aside appropriate liquid assets in a segregated custodial account
in the amount prescribed. Securities held in a segregated account cannot
be sold while the futures or option strategy is outstanding, unless they
are replaced with other suitable assets. As a result, there is a
possibility that segregation of a large percentage of the Fund's assets
could impede portfolio management or the Fund's ability to meet redemption
requests or other current obligations.

SHORT SALES. The Fund may enter into short sales with respect to stocks
underlying its convertible security holdings. For example, if FMR
anticipates a decline in the price of the stock underlying a convertible
security the Fund holds, it may sell the stock short. If the stock price
subsequently declines, the proceeds of the short sale could be expected to
offset all or a portion of the effect of the stock's decline on the value
of the convertible security. The Fund currently intends to hedge no more
than 15% of its total assets with short sales on equity securities
underlying its convertible security holdings under normal circumstances.
When the Fund enters into a short sale, it will be required to set aside
securities equivalent in kind and amount to those sold short (or securities
convertible or exchangeable into such securities) and will be required to
hold them aside while the short sale is outstanding. The Fund will incur
transaction costs, including interest expense, in connection with opening,
maintaining, and closing short sales.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of the Fund by FMR pursuant to authority contained in the
Management Contract. FMR is also responsible for the placement of
transaction orders for other investment companies and accounts for which it
or its affiliates act as investment adviser. In selecting broker-dealers
subject to applicable limitations of the federal securities laws, FMR will
consider various relevant factors, including, but not limited to, the size
and type of the transaction; the nature and character of the markets for
the security to be purchased or sold; the execution efficiency, settlement
capability, and financial condition of the broker-dealer firm; the
broker-dealer's execution services rendered on a continuing basis; and the
reasonableness of any spreads or commissions. C ommissions for
foreign investments traded on foreign exchanges will generally be higher
than for U.S. investments and may not be subject to negotiation.

The Fund may execute portfolio transactions with broker-dealers who
provide research and execution services to the Fund or other accounts over
which FMR or its affiliates exercise investment discretion. Such services
may include advice concerning the value of securities; the advisability of
investing in, purchasing or selling securities; the availability of
securities or the purchasers or sellers of securities; furnishing analyses
and reports concerning issuers, industries, securities, economic factors
and trends, portfolio strategy and performance of accounts; and effecting
securities transactions and performing functions incidental thereto (such
as clearance and settlement). The selection of such
broker-dealers generally is made by FMR (to the extent possible
consistent with execution considerations) in accordance with a ranking of
broker-dealers determined periodically by FMR's investment staff based upon
the quality of research and execution services provided.

The receipt of research from broker-dealers that execute transactions on
behalf of the Fund may be useful to FMR in rendering investment management
services to the Fund or its other clients, and conversely, such
research provided by broker-dealers who have executed transaction
orders on behalf of other FMR clients may be useful to FMR in carrying out
its obligations to the Fund. The receipt of such research has not reduced
FMR's normal independent research activities; however, it enables FMR to
avoid additional expenses which could be incurred if FMR
tried to develop comparable information through its own efforts.

Subject to applicable limitations of the federal securities laws,
broker-dealers may receive commissions for agency transactions that are in
excess of the amount of commissions charged by other broker-dealers in
recognition of their research and execution services. In order to cause
the Fund to pay such higher commissions, FMR must determine in good faith
that such commissions are reasonable in relation to the value of the
brokerage and research services provided by such executing broker-dealers
viewed in terms of a particular transaction or FMR's overall
responsibilities to the Fund and its other clients. In reaching this
determination, FMR will not attempt to place a specific dollar value on the
brokerage and research services provided, or to determine what portion of
the compensation should be related to those services.

FMR is authorized to use research services provided by and to place
portfolio transactions with brokerage firms that have provided assistance
in the distribution of shares of the Fund or shares of other Fidelity funds
to the extent permitted by law. FMR may use research services provided by
and place agency transactions with Fidelity Brokerage Services, Inc.
(FBSI), and Fidelity Brokerage Services, Ltd. (FBSL), subsidiaries
of FMR Corp. , if the commissions are fair, reasonable , and
comparable to commissions charged by non-affiliated, qualified brokerage
firms for similar services. Prior to September 4, 1992, FBSL operated
under the name of Fidelity Portfolio Services Ltd. (FPSL), as a
wholly-owned subsidiary of Fidelity International Limited (FIL). Edward C.
Johnson 3d is Chairman of FIL. Mr. Johnson 3d, Johnson family members, and
various trusts for the benefit of the Johnson family own, directly or
indirectly, more than 25% of the voting common stock of FIL.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members of
national securities exchanges from executing exchange transactions for
accounts which they or their affiliates manage, unless certain
requirements are satisfied . Pursuant to such re quirements , the
Board of Trustees has approved a written agreement which permits FBSI to
effect portfolio transactions on national securities exchanges in
accordance with approved procedures and applicable SEC rules.

The Trustees periodically review FMR's performance of its responsibilities
in connection with the placement of portfolio transactions on behalf of the
Fund and review the commissions paid by the Fund over representative
periods of time to determine if they are reasonable in relation to the
benefits to the Fund.

For the fiscal years ended November 30, 1993 and 1992, the Fund's annual
portfolio turnover rate was 65% and 51%, respectively.

For the fiscal years ended November 30, 1993, 1992, and 1991, the Fund
paid brokerage commissions of $62,741, $342,397, and $530,887,
respectively. During fiscal 1993, approximately $386,057 or 68.6% of these
commissions were paid to brokerage firms which provided research services,
although the providing of such services was not necessarily a factor in the
placement of all this business with such firms. The Fund pays both
commissions and spreads in connection with the placement of portfolio
transactions; FBSI is paid on a commission basis. During fiscal 1993, 1992
and 1991, the Fund paid brokerage commissions of $126,832, $107,503, and
$151,059, respectively, to FBSI. During fiscal 1993 , this amounted
to 22.5% of the aggregate brokerage commissions paid by the Fund for
transactions involving 38.2% of the aggregate dollar amount of transactions
in which the Fund paid brokerage commissions. The difference in the
percentage of the brokerage commissions paid to, and the percentage of the
dollar amount of transactions effected through FBSI is a result of the low
commission rates charged by FBSI. During the fiscal years ended
November 30, 1993, 1992 and 1991, the Fund paid $0, $441, and $6,072,
respectively, in brokerage commissions to FBSL.
From time to time the Trustees will review whether the recapture for the
benefit of the Fund of some portion of the brokerage commissions or similar
fees paid by the Fund on portfolio transactions is legally permissible and
advisable. The Fund seeks to recapture soliciting dealer fees on the tender
of portfolio securities, but at present no other recapture arrangements are
in effect. The Trustees intend to continue to review whether recapture
opportunities are available and are legally permissible and, if so, to
determine, in the exercise of their business judgment, whether it would be
advisable for the Fund to seek such recapture.

Although the Trustees and officers of the Fund are substantially the same
as those of other funds managed by FMR, investment decisions for the Fund
are made independently from those of other funds managed by FMR or accounts
managed by FMR affiliates. It sometimes happens that the same security is
held in the portfolio of more than one of these funds or accounts.
Simultaneous transactions are inevitable when several funds or accounts
are managed by the same investment adviser, particularly when the same
security is suitable for the investment objective of more than one fun d
or account.
When two or more funds are e ngaged simultaneously in the
purchase or sale of the same security, the prices and amounts are allocated
in accordance with a formula considered by the officers of the funds
involved to be equitable to each fund. In some cases this system could
have a detrimental effect on the price or value of the security as far as
the Fund is concerned. In other cases, however, the ability of the Fund to
participate in volume transactions will produce better executions and
prices for the Fund. It is the current opinion of the Trustees that the
desirability of retaining FMR as investment adviser to the Fund outweighs
any disadvantages that may be said to exist from exposure to simultaneous
transactions.

VALUATION OF PORTFOLIO SECURITIES
Portfolio securities are valued by various methods depending on the
primary market or exchange on which they trade. Most equity securities for
which the primary market is the U.S. are valued at last sale price or, if
no sale has occurred, at the closing bid price. Most equity securities
for which the primary market is outside the U.S. are valued using the
official closing price or the last sale price in the principal market where
they are traded. If the last sale price (on local exchange) is
unavailable, the last evaluated quote or last bid price is normally used.
Short-term securities are valued either at amortized cost or at original
cost plus accrued interest, both of which approximate c urrent value.
Convertible securities and fixed-income securities are valued primarily by
a pricing service that uses a vendor security valuation matrix which
incorporates both dealer-supplied valuations and electronic data processing
techniques. This twofold approach is believed to more accurately reflect
fair value because it takes into account appropriate factors such as
institutional trading in similar groups of securities, yield, quality,
coupon rate, maturity, type of issue, trading characteristics, and other
market data, without exclusive reliance upon quoted, exchange, or
over-the-counter prices. Use of pricing services has been approved by the
Board of Trustees.
Securities and other assets for which there is no readily available market
are valued in good faith by a committee appointed by the Board of Trustees.
The procedures set forth above need not be used to determine the value of
the securities owned by the Fund if, in the opinion of a committee
appointed by the Board of Trustees, some other method (e.g., closing
over-the-counter bid prices in the case of debt instruments traded on an
exchange) would more accurately reflect the fair market value of such
securities.
Generally, the valuation of foreign and domestic equity securities, as
well as corporate bonds, U.S. government securities, money market
instruments, and repurchase agreements, is substantially completed each day
at the close of the NYSE. The values of any such securities held by the
Fund are determined as of such time for the purpose of computing the Fund's
net asset value (NAV) . Foreign security prices are furnished by
independent brokers of quotation services which express the value of
securities in their local currency. Service gathers all exchange rates
daily at the close of the NYSE using the last quoted price on the local
currency and then translates the value of foreign securities from their
local currency into U. S. dollars. Any changes in the value of forward
contracts due to exchange rate fluctuations and days to maturity are
included in the calculation of NAV . If an extraordinary event that
is expected to materially affect the value of a portfolio security occurs
after the close of an exchange on which that security is traded, then the
security will be valued as determined in good faith by a committee
appointed by the Board of Trustees.

PERFORMANCE
Institutional shares, Class A shares and Class B shares may quote their
respective performance in various ways. All performance information
supplied by each class in advertising is historical and is not intended to
indicate future returns. Share price and total return for each class
fluctuate in response to market conditions and other factors, and the value
of each class' shares when redeemed may be more or less than their original
cost.
TOTAL RETURN CALCULATIONS. Total returns quoted in advertising reflect
all aspects of re turn, including the effect of reinvesting dividends
and capital gain distributions, and any change in the NAV over the period.
Average annual total returns are calculated by determining the growth or
decline in value of a hypothetical historical investment in a class of
shares over a stated period, and then calculating the annually compounded
percentage rate that would have produced the same result if the rate of
growth or decline in value had been constant over the period. For example,
a cumulative return of 100% over ten years would produce an average annual
total return of 7.18%, which is the steady annual return that would equal
100% growth on a compounded basis in ten years. While average annual total
returns are a convenient means of comparing investment alternatives,
investors should realize that a class of shares' performance is not
constant over time, but changes from year to year, and that average annual
returns represent averaged figures as opposed to actual year-to-year
performance .
In addition to average annual total returns, may quote unaveraged or
cumulative total returns reflecting the simple change in value of an
investment over a stated period may be quoted . Average annual and
cumulative total returns may be quoted as a percentage or as a dollar
amount, and may be calculated for a single investment, a series of
investments, and/or a series of redemptions, over any time period. Total
returns may be broken down into their components of income and capital
(including capital gains and changes in share price) in order to illustrate
the relationship of these factors and their contributions to total return.
An example of this type of illustration is given below. T otal
returns may be quoted with or without taking the maximum 4.75% sales charge
into account. Total returns may be quoted on a before-tax or
after-tax basis. Excluding the sales charge from a total return
calculation produces a higher total return figure. Total returns and other
performance information may be quoted numerically or in a table, graph or
similar illustration.
NET ASSET VALUE. Charts and graphs using the Fund's net asset values,
adjusted net asset values, and benchmark indices may be used to exhibit
performance. An adjusted NAV includes any distributions paid by the Fund
and reflects all elements of its return. Unless otherwise indicated, the
Fund's adjusted NAVs are not adjusted for sales charges, if any.
The following charts show total returns for the periods ended November
30, 1993.
EQUITY PORTFOLIO INCOME - INSTITUTIONAL CLASS(DAGGER)

<TABLE>
<CAPTION>
<S> <C> <C>
Average Annual Total Returns Cumulative Total Returns

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
One Year Five Year Ten Year One Year Five Year Ten Year

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
18.90% 12.08% 13.05% 18.90% 76.89% 241.03%

</TABLE>

EQUITY PORTFOLIO INCOME - CLASS A(DAGGER)(DAGGER)

<TABLE>
<CAPTION>
<S> <C> <C>
Average Annual Total Returns Cumulative Total Returns

</TABLE>

One Year Five Year Ten Year One Year Five Year Ten Year

12.42% 10.80% 12.40% 18.03% 75.31% 237.99%

</TABLE>

EQUITY PORTFOLIO INCOME - CLASS B(DAGGER)(DAGGER)(DAGGER)

<TABLE>
<CAPTION>
<S> <C> <C>
Average Annual Total Returns Cumulative Total Returns

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
One Year Five Year Ten Year One Year Five Year Ten Year

14.03% 11.63% 12.40% 18.03% 75.31% 237.99%

</TABLE>

(dagger) If FMR had not reimbursed .10% of the management fee during
these periods, total returns would have been lower.
(dagger)(dagger) Average annual total returns include the effects of the
maximum front-end sales charge. Effective September 10, 1992, the Fund
commenced sale of Class A shares. This performance information reflects
the Class A shares 12b-1 fee and revised transfer agent fee arrangement for
the period September 10, 1992 through November 30, 1993 and may not be
representative of Class A's performance. Cumulative total returns do not
include the effect of this front end charge and would have been lower if it
had been taken into account.
(dagger)(dagger)(dagger) Average annual total returns include the effect
of the maximum contingent deferred sales charge (CDSC) applicable at the
end of the stated period - Cumulative total returns do not include the
effects of the CDSC and would have been lower if it had been taken into
account. Initial offering of Class B shares is expected on or about June
30, 1994, at which time a 1.00% 12b-1 fee (inclusive of a .25% shareholder
service fee) will be imposed and is not reflected in returns prior to that
date. Returns will be lower when the fees are taken into account.
MOVING AVERAGES. The Fund may illustrate performance using moving
averages. A long-term moving average is the average of each week's
adjusted closing NAV for a specified period. A short-term moving average
is the average of each day's adjusted closing NAV for a specified period.
Moving Average Activity Indicators combine adjusted closing NAVs from the
last business day of each week with moving averages for a specified period
to produce indicators showing when an NAV has crossed, stayed above, or
stayed below its moving average. On November 26, 1993 the 13-week and
39-week long-term moving averages were $15.06, and $14.52, respectively,
for Institutional Equity Portfolio Income, and $14.51 and $15.01,
respectively, for Equity Portfolio Income.

PERFORMANCE COMPARISONS. Performance may be compared to the
performance of other mutual funds in general, or to the performance of
particular types of mutual funds. These comparisons may be expressed as
mutual fund rankings prepared by Lipper Analytical Services, Inc. (Lipper),
an independent service located in Summit, New Jersey that monitors
the performance of mutual funds. Lipper generally ranks funds on the basis
of total return, assuming reinvestment of dividends , but does not
take sales charges or redemption fees into consideration, and is prepared
without regard to tax consequences. In addition to the mutual fund
rankings, each class of shares' performance may be compared to mutual fund
performance indices prepared by Lipper.

Performance may be quoted in advertising and other types of literature as
compared to certificates of deposit (CDs), bank-issued money market
instruments and money market mutual funds. Unlike CDs and bank-issued
money market instruments, money market mutual funds and both classes of
shares are not insured by the FDIC.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical
returns of the capital markets in the United States, including common
stocks, small capitalization stocks, long-term corporate bonds,
intermediate-term government bonds, long-term government bonds, Treasury
bills, the U.S. rate of inflation (based on the Consumer Price Index), and
combinations of various capital markets. The performance of these capital
markets is based on the returns of different indices.
Fidelity funds may use the performance of these capital markets in
order to demonstrate general risk-versus-reward investment scenarios.
Performance comparisons may also include the value of a hypothetical
investment in any of these capital markets. The risks associated with the
security types in any capital market may or may not correspond directly to
those of the Fund. Ibbotson calculates total returns in the same method as
the Fund. The Fund may also compare performance to that of other
compilations or indices that may be developed and made available in the
future.
Performance may be quoted to that of the Standard and Poor's Index of
500 Common Stocks (S&P 500) which is a registered trademark of Standard
& Poor's Corporation, the Dow Jones Industrial Average (the Dow or
DJIA) and the NASDAQ Composite Index (NASDAQ). The S&P 500 and the Dow
are widely recognized, unmanaged indices of common stock prices. The
performance of the S&P 500 is based on changes in the prices of stocks
comprising the Indices and assumes the reinvestment of all dividends paid
on such stocks. Taxes, brokerage commissions and other fees are
disregarded in computing the level of the S&P 500, the DJIA and the
NASDAQ. Each class of shares' performance also may be compared to the
increase in the cost of living as measured by the CPI.
Institutional, Class A, and Class B shares may compare its performance or
the performance of securities in which it may invest to IBC/Donoghue's
MONEY FUND AVERAGES/All-Taxable, which monitors the performance of over 200
taxable money market funds. This index, which also assumes reinvestment of
distributions, is published by IBC/Donoghue's MONEY FUND REPORT of Ashland,
Massachusetts 01271. Investors should consider the relevant differences
in investment objectives and policies between the Fund and such money
market funds in evaluating such comparisons. Specifically, money market
funds invest in short-term, high-quality instruments and seek to maintain
a stable $1.00 share price, while the Fund invests in longer-term
instruments and the share prices of each class changes daily in response to
a variety of factors.
As of December 31, 1993, FMR managed over $225 billion in fund assets.
This figure represents the largest amount of equity fund assets under
management by a mutual fund advisor in the United States, making FMR
America's leading equity (stock) fund manager. From time to time, the Fund
may use this information in advertising and sales literature.
The Fund may reference and discuss its fund number, Quotron(trademark)
number, and CUSIP number, and current portfolio manager in
advertising.
From time to time, performance also may be compared to other mutual funds
tracked by financial or business publications and periodicals. For
example, the Fund may quote Morningstar, Inc. in its advertising materials.
Morningstar, Inc. is a mutual fund rating service that rates mutual funds
on the basis of risk-adjusted performance. In addition, the Fund may quote
financial or business publications and periodicals as they relate to fund
management, investment philosophy, and investment techniques. Rankings
that compare the performance of Fidelity funds to one another in
appropriate categories over specific periods of time may also be quoted in
advertising.
VOLATILITY. Institutional shares, Class A and Class B may quote various
measures of volatility and benchmark correlation in advertising. In
addition, those measures may be compared to those of other funds. Measures
of volatility seek to compare the Fund's historical share price
fluctuations or total returns to those of a benchmark. Measures of
benchmark correlation indicate how valid a comparative benchmark may be.
All measures of volatility and correlation are calculated using averages of
historical data.
MOVING AVERAGES. Performance may be illustrated using moving averages. A
long-term moving average is the average of each week's adjusted closing NAV
for a specified period. A short-term moving average is the average of each
day's adjusted closing NAV for a specified periods. Moving Average
Activity Indicators combine adjusted closing NAVs from the last business
day of each week with moving averages for a specified period to produce
indicators showing when an NAV has crossed, stayed above, or stayed
below its moving average. On November 26, 1993, the 13-week and 39-week
long term moving averages were $14.51 and $15.01, res pectively.
MOMENTUM INDICATORS indicate Institutional shares, Class A and Class B
price movements over specific periods of time. Each point on the momentum
indicator represents percentage change in price movements over that period.
Institutional shares, Class A and Class B may advertise to the extent
applicable, examples of the effects of periodic investment plans, including
the principle of dollar-cost averaging. In such a program, an investor
invests a fixed dollar amount in a portfolio at periodic intervals, thereby
purchasing fewer shares when prices are high and more shares when prices
are low. While such a strategy does not assure a profit or guard against
loss in a declining market, the investor's average cost per share can be
lower than if fixed numbers of shares had been purchased at the same
intervals. In evaluating such a plan, investors should consider their
ability to continue purchasing shares through periods of low price levels.

Institutional shares, Class A and Class B may be available for purchase
through retirement plans or other programs offering deferral of or
exemption from income taxes, which may produce superior after-tax returns
over time. For example, an investment of $1,000 earning a taxable return
of 10% annually would have an after-tax value of $1,949 after ten years,
assuming tax was deducted from the return each year at a 31% rate. An
equivalent tax-deferred investment would have an after-tax value of $2,100
after ten years, assuming tax was deducted at a 31% rate from the deferred
earnings at the end of the ten year period.
HISTORICAL FUND RESULTS. The following chart shows the income and capital
elements of the Institutional shares' year-by-year total returns from April
25, 1983 (commencement of operations) through November 30, 1993. The chart
compares the Institutional shares' return to the record of the S&P 500,
the DJIA and the cost of living measured by the CPI over the same period.
The comparisons to the S&P 500 and the DJIA show how the Institutional
shares' total return compared to the record of a broad average of common
stock prices, and a narrower set of stocks of major industrial companies,
respectively. The Fund has the ability to invest in securities not
included in either index, and its investment portfolio may or may not be
similar in composition to the indices. The S&P 500 and DJIA are based
on the prices of unmanaged groups of stocks and, unlike the Fund's returns,
their returns do not include the effect of paying brokerage commissions and
other costs of investing.
During the period from April 25, 1983 (commencement of operations) to
November 30, 1993, a hypothetical $10,000 investment in Institutional
shares would have grown to $37,148 assuming all distributions were
reinvested. This was a period of widely fluctuating stock prices, and the
chart should not necessarily be considered a representation of the income
or capital gain or loss that could be realized from an investment in
Institutional shares today.
FIDELITY ADVISOR INSTITUTIONAL EQUITY PORTFOLIO INCOME* INDICES

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Value of Value of Value of

Initial Reinvested Reinvested Cost

Year $10,000 Income Capital Gain Total of

Ended Investment Distributions Distributions Value S&P DJIA Living(dagger)

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
11/30/83** $10,490 $ 410 $ 0 $10,900 $10,646 $10,955 $10,264

11/30/84 10,240 1,237 99 11,576 10,966 10,720 10,680

11/30/85 11,950 2,388 116 14,454 14,145 13,899 11,055

11/30/86 13,540 3,715 593 17,848 18,060 18,736 11,197

11/30/87 10,930 3,844 1,775 16,549 17,215 18,500 11,704

11/30/88 11,100 5,280 4,635 21,015 21,231 22,114 12,201

11/30/89 12,270 7,317 5,124 24,710 27,781 29,370 12,769

11/30/90 9,520 7,042 4,465 21,027 26,813 28,879 13,570

11/30/91 11,080 9,581 5,197 25,857 32,270 33,778 13,976

11/30/92 12,880 12,342 6,041 31,263 38,240 39,722 14,402

11/30/93 14,920 15,230 6,998 37,148 42,103 45,575 14,787

</TABLE>

* Fidelity Advisor Equity Portfolio Income Class A became effective on
September 10, 1992. The chart above is based on Fidelity Advisor
Institutional Equity Portfolio Income only. Had Class A shares been
offered during the period from April 25, 1983 through November 30, 1993, a
hypothetical $10,000 investment in Class A would have grown to $35,092,
including the effect of the maximum 4.75% sales charge but excluding the
effects of the 0.65% 12b-1 fee and other Class A specific expenses prior to
September 10, 1992, and assuming all distributions were reinvested. Class
B shares are expected to be available on or about May 2, 1994.
** April 25, 1983 (commencement of operations) - November 30, 1983
(dagger) From month end closest to initial investment date.

EXPLANATORY NOTES: With an initial investment of $10,000 made on April
25, 1983, the net amount invested in Institutional shares was $10,000. The
cost of the initial investment ($10,000), together with the aggregate cost
of reinvested dividends and capital gain distributions for the period
covered (that is, their cash value at the time they were reinvested),
amounted to $26,938. If distributions had not been reinvested, the amount
of distributions earned from the Institutional shares over time would have
been smaller, and the cash payments for the period would have come to
$7,020 for income dividends and $3,520 for capital gain distributions. Tax
consequences of different investments have not been factored into the
figures.
TRADITION OF PERFORMANCE. Fidelity's tradition of performance is
achieved through:
(bullet) MONEY MANAGEMENT: a proud tradition of money management
motivated by the expectation of excellence backed by solid analysis and
worldwide resources. Fidelity employs a bottom-up approach to security
selection based upon in-depth analysis of the fundamentals of that
investment opportunity.
(bullet) INNOVATION: constant attention to the changing needs of
today's investors and vigilance to the opportunities that arise from
changing global markets. Research is central to Fidelity's investment
decision-making process. Fidelity's greatest resource--over 200 skilled
investment professionals--is supported with the most sophisticated
technology available.
Fidelity provides:
(bullet) Global research resources: an opportunity to diversify
portfolios and share in the growth of markets outside the United
States.
(bullet) In-house, proprietary bond-rating system, constantly updated,
which provides extremely sensitive credit analysis.
(bullet) Comprehensive chart room with over 1500 exhibits to provide
sophisticated charting of worldwide economic, financial, and technical
indicators, as well as to provide tracking of over 800 individual stocks
for portfolio managers.
(bullet) State-of-the-art trading desk, with access to over 200
brokerage houses, providing real-time information to achieve the best
executions and optimize the value of each transaction.
(bullet) Use of extensive on-line computer-based research services.
(bullet) SERVICE: Timely, accurate and complete reporting. Prompt
and expert attention when an investor or an investment professional
needs it.
ADDITIONAL PURCHASE, EXCHANGE A ND REDEMPTION INFORMATION
The Fund is open for business and the NAV of each class is calculated each
day the NYSE is open for trading. The NYSE has designated the following
holiday closings for 1994: Presidents' Day (observed) , Good Friday,
Memorial Day (observed) , Independence Day, Labor Day, Thanksgiving
Day, and Christmas Day (observed). Although FMR expects the same holiday
schedule, with the addition of New Year's Day, to be observed in the
future, the NYSE may modify its holiday schedule at any time. On any day
that the NYSE closes early, or as permitted by the SEC, the right is
reserved to advance the time on that day by which purchase and redemption
orders must be received. To the extent that portfolio securities are
traded in other markets on days when the NYSE is closed, each class'
NAV may be affected on days when investors do not have access to the Fund
to purchase or redeem shares. Certain Fidelity funds may follow different
holiday closing schedules.
If the Trustees determine that existing conditions make cash payments
undesirable, redemption payments may be made in whole or in part in
securities or other property, valued for this purpose as they are valued in
computing the NAV of each class. Shareholders receiving any such
securities or other property on redemption may realize a gain or loss for
tax purposes, and will incur any costs of sale, as well as the associated
inconveniences.

Pursuant to Rule 11a-3 under the 1940 Act (the Rule), the Fund is required
to give shareholders at least 60 days' notice prior to terminating or
modifying its exchange privilege. Under the Rule, the 60 - day
notification requirement may be waived if (i) the only effect of a
modification would be to reduce or eliminate an administrative fee,
redemption fee , or deferred sales charge ordinarily payable at the
time of an exchange, or (ii) the Fund suspends the redemption of
the shares to be exchanged as permitted under the 1940 Act or the
rules and regulations thereunder, or the fund to be acquired suspends the
sale of its shares because it is unable to invest amounts effectively in
accordance with its investment objective and policies.
In each prospectus, the Fund has notified shareholders that it reserves
the right at any time, without prior notice, to refuse exchange purchases
by any person or group if, in FMR's judgment, the Fund would be unable to
invest effectively in accordance with its investment objective and
policies , or would otherwise potentially be adversely affected.
PURCHASE INFORMATION
As provided for in Rule 22d-1 under the 1940 Act, Distributors exercises
its right to waive Class A's maximum 4.75% sales charge in connection with
the Fund's merger with or acquisition of any investment company or trust.
CLASS A NET ASSET VALUE PURCHASES. Sa les charges do not
apply to shares purchased: (1) by registered representatives, bank trust
officers and other employees (and their immediate families) of investment
professionals having agreements with Distributors; (2) by a current or
former Trustee or officer of a Fidelity fund or a current or retired
officer, director or regular employee of FMR Corp. or its direct or
indirect subsidiaries (a "Fidelity Trustee or employee"), the spouse of a
Fidelity Trustee or employee, a Fidelity Trustee or employee acting as
custodian for a minor child, or a person acting as trustee of a trust for
the sole benefit of the minor child of a Fidelity Trustee or employee; (3)
by a charitable organization (as defined in Section 501(c)(3) of the
Internal Revenue Code) investing $100,000 or more; (4) by a charitable
remainder trust or life income pool established for the benefit of a
charitable organization (as defined in Section 501(c)(3) of the Internal
Revenue Code); (5) by trust institutions (including bank trust departments)
investing on their own behal f or on behalf of their clients; (6) in
accounts as to which a bank or broker-dealer charges an asset management
fee, provided the bank or broker-dealer has an agreement with Distributors;
(7) as part of an employee benefit plan (including Fidelity-Sponsored
403(b) and Corporate IRA programs, but otherwise as defined in the Employee
Retirement Income Security Act (ERISA)), maintained by a U.S.
e mployer having more than 200 eligible employees, or a minimum of
$1,000,000 invested in Fidelity Advisor mutual funds and the assets of
which are held in a bona fide trust for the exclusive benefit of employees
participating therein; (8) in a Fidelity or Fidelity Advisor IRA account
purchase d with the proceeds of a distribution from an employee
benefit plan having more than 200 eligible employees or a minimum of
$3,000,000 in plan assets invested in Fidelity mutual funds or $1,000,000
invested in Fidelity Advisor mutual funds or (ii) an insurance company
separate account qualifying under (9) below, or funding annuity contracts
purchased by employee benefit plans which in the aggregate have at least
$3,000,000 in plan assets invested in Fidelity mutual funds; (9) by an
insurance company separate account used to fund annuity contracts purchased
by employee benefit plans (including 403(b) programs, but otherwise as
defined in ERISA), which, in the aggregate, have either more than 200
eligible employees or a minimum of $1,000,000 invested in Fidelity Advisor
mutual funds; or (10) by any state, county, or city, or any governmental
instrumentality, department, authority or agency; or (11) with
redemption proceeds from other mutual fund complexes on which the investor
has paid a front- end sales charge only.
CLASS B WAIVERS. The contingent deferred sales charge (CDSC) on
Class B shares may be waived in the case of disability or death, provided
that the redemption is made within one year following the death or initial
determination of disability, or in connection with a total or partial
redemption made in connection with certain distributions from retirement
plan accounts.
D istributors compensates securities dealers and banks having
agreements with Distributors (investment professionals), who sell Class A
and Class B shares according to the schedule in each prospectus.
Distributors compensates investment professionals with a fee of .25% on
purchases of $1 million or more, except for purchases made through a bank
or bank affiliated broker-dealer that qualify for a Class A Sales
Charge Waiver described in the prospectus. All assets on which the .25%
fee is paid must remain within the Fidelity Advisor Funds (including shares
exchanged into Daily Money Fund and Daily Tax-Exempt Money Fund) for a
period of one uninterrupted year or the investment professional will be
required to refund this fee to Distributors. Purchases by insurance
company separate accounts will qualify for the .25% fee only if an
insurance company's client relationship underlying the separate account
exceeds $1 million. It is the responsibility of the insurance company to
maintain records of purchases by any such client relationship.
Distributors may request records evidencing any fees payable through this
program.
QUANTITY DISCOUNTS. Reduced sales charges are applicable to purchases of
Class A shares of the Fund in amounts of $50,000 or more of the Fund alone
or in combination with purchases of Class A and Class B shares of
certain other Fidelity Advisor Funds made at any one time
( Daily Money Fund and Daily Tax-Exempt Money Fund shares acquired by
exchange from any Fidelity Advisor Fund with a sales charge ). To
obtain the reduction of the front-end sales charge, you or your investment
professional must notify the T ransfer A gent at the time of
purchase whenever a quantity discount is applicable to your purchase. Upon
such notification, you will receive the lowest applicable front-end sales
charge.
In addition to investing at one time in any combination of funds in
an amount entitling you to a reduced front-end sales charge, you may
qualify for a reduction in the front-end sales charge under the following
programs:
COMBINED PURCHASES. When you invest in Class A shares for several
accounts at the same time, you may combine these investments into a single
transaction if purchased through one investment professional, and if the
total is at least $50,000. The following may qualify for this privilege:
an individual, or "company" as defined in Section 2(a)(8) of the 1940 Act;
an individual, spouse, and their children under age 21 purchasing for his,
her, or their own account; a trustee, administrator or other fiduciary
purchasing for a single trust estate or single fiduciary account or for a
single or a parent-subsidiary group of "employee benefit plans" (as defined
in Section 3(3) of E RISA); and tax-exempt organizations under
Section 501(c)(3) of the Internal Revenue Code.
RIGHTS OF ACCUMULATION. Your "Rights of Accumulation" permit reduced
front-end sales charges on any future purchases after you have reached a
new breakpoint in the Class A sales charge schedule (see the Class A
p rospectus for the front-end sales charge schedule). You can add
the value of existing Fidelity Advisor Fund Class A and Class B shares,
held by you, your spouse, and your children under age 21 determined at the
previous day's NAV at the close of business, to the amount of your new
purchase valued at the current offering price to determine your reduced
front-end sales charge. You can also add shares of Daily Money Fund and
shares of Daily Tax-Exempt Money Fund, provided they were acquired
b y exchange from any Fidelity Advisor Fund with a sales
charge , to the amount of your new purchase.
LETTER OF INTENT. If you anticipate purchasing $50,000 or more of Class A
shares of the Fund or in combination with Class A and Class B shares of
other Fidelity Advisor Funds within a 13-month period, you may obtain Class
A shares at the same reduced front-end sales charge as though the total
quantity were invested in one lump sum, by filing a nonbinding Letter of
Intent (the Letter) within 90 days of the start of the purchases. Each
investment you make after signing the Letter will be entitled to the
front-end sales charge applicable to the total investment indicated in the
Letter. For example, a $2,500 purchase toward a $50,000 Letter would
receive the same reduced front-end sales charge as if the $50,000 had been
invested at one time. To ensure that the reduced front-end sales charge
will be received on future purchases, you or your investment professional
must inform the T ransfer A gent that the Letter is in effect
each time Class A or Class B shares are purchased. Neither income
dividends nor capital gain distributions taken in additional shares will
apply toward the completion of the Letter.
Your initial investment must be at least 5% of the total amount you plan
to invest. Out of the initial purchase, 5% of the dollar amount specified
in the Letter will be registered in your name and held in escrow. The
Class A shares held in escrow cannot be redeemed or exchanged until the
Letter is satisfied or the additional front-end sales charges have been
paid. You will earn income dividends and capital gain distributions on
escrowed Class A shares. The escrow will be released when your purchase of
the total amount has been completed. You are not obligated to complete the
Letter.
If you purchase more than the amount specified in the Letter and qualify
for a further front-end sales charge reduction, the sales charge will be
adjusted to reflect your total purchase at the end of 13 months. Surplus
funds will be applied to the purchase of additional Class A shares at the
then current offering price applicable to the total purchase.
If you do not complete your purchase under the Letter within the 13-month
period, your front-end sales charge will be adjusted upward, corresponding
to the amount actually purchased, and if after 30 days' written notice, you
do not pay the increased front-end sales charge, sufficient escrowed Class
A shares will be redeemed to pay such charge.
FIDELITY ADVISOR SYSTEMATIC INVESTMENT P ROGRAM . You can
make regular investments in Class A or Class B shares of the Fund or other
Fidelity Advisor Funds with the Systematic Investment P rogram by
completing the appropriate section of the account application and attaching
a voided personal check with your bank's magnetic ink coding number across
the front. If your bank account is jointly owned, be sure that all owners
sign. Investments may be made monthly by automatically deducting $100 or
more from your bank checking account. You may change the amount of your
monthly purchase at any time. There is a $1,000 minimum initial investment
requirement for S ystematic I nvestment Programs .
Your account will be drafted on or about the first business day of every
month. Class A or Class B shares will be purchased at the offering price
next determined following receipt of the order by the Transfer Agent. You
may cancel your participation in the Systematic Investment Program
at any time without payment of a cancellation fee. You will receive a
confirmation from the Transfer Agent for every transaction, and a debit
entry will appear on your bank statement.
EXCHANGE INFORMATION
SYSTEMATIC EXCHANGE P ROGRAM . With the Systematic Exchange
P rogram , you can exchange a specific dollar amount of Class A or
Class B shares into the same class of other Fidelity Advisor Funds on a
monthly, quarterly or semiannual basis.
1. The account from which the exchanges are to be processed must have a
minimum value of $10,000 before you may elect to begin exchanging
systematically. The account into which the exchanges are to be processed
must be an existing account with a minimum balance of $1,000.
2. Both accounts must have identical registrations and taxpayer
identification numbers. The minimum amount to be exchanged systematically
is $100.
3. Systematic Exchanges will be processed at the NAV determined on the
transaction date, except that Systematic Exchanges into a Fidelity Advisor
Fund from any eligible money market fund will be processed at the
offering price next determined on the transaction date, unless the shares
were acquired by exchange from another Fidelity Advisor Fund.
REDEMPTION INFORMATION
REINSTATEMENT PRIVILEGE. If you have sold all or part of your
Class A or Class B shares you may reinvest an amount equal to all or a
portion of the redemption proceeds in the same class of the Fund or
any of the other Fidelity Advisor Funds, at the NAV next determined after
receipt of your investment order, provided that such reinvestment is made
within 30 days of redemption. Y ou must reinstate your shares into
an account with the same registration. This privilege may be exercised
only once by a shareholder with respect to the Fund.

FIDELITY ADVISOR SYSTEMATIC WITHDRAWAL P ROGRAM . If you own
Class A shares worth $10,000 or more, you can have monthly, quarterly or
semiannual checks sent from your account to you, to a person named by you,
or to your bank checking account. You may obtain information about the
Systematic Withdrawal P rogram by contacting your investment
professional. Your Systematic Withdrawal P rogram payments are drawn
from front-end share redemptions. If Systematic Withdrawal Program
redemptions exceed income dividends earned on your shares, your account
eventually may be exhausted. Since a front-end sales charge is applied on
new shares you buy, it is to your disadvantage to buy Class A shares while
also making systematic redemptions.
DISTRIBUTIONS AND TAXES
DISTRIBUTIONS. If you request to have distributions mailed to you and the
U.S. Postal Service cannot deliver your checks, or if your checks remain
uncashed for six months, the Transfer Agent may reinvest your distributions
at the then - current NAV. All subsequent distributions will then be
reinvested until you provide the Transfer Agent with alternative
instructions.
DIVIDENDS. A portion of the Fund's income may qualify for the
dividends - received deduction available to corporate shareholders to
the extent that the Fund's income is derived from qualifying dividends.
Because the Fund may also earn other types of income, such as interest,
income from securities loans, non-qualifying dividends and short-term
capital gains, the percentage of dividends that qualify for the deduction
will generally be less than 100%. The Fund will notify corporate
shareholders annually of the percentage of Fund dividends which qualify for
the dividends - received deduction. A portion of the Fund's dividends
derived from certain U.S. government obligations may be exempt from state
and local taxation. Gains (losses) attributable to foreign currency
fluctuations are generally taxable as ordinary income and, therefore, will
increase (decrease) dividend distributions. The Fund will send each
shareholder a notice in January describing the tax status of dividends and
capital gains distributions for the prior year.

CAPITAL GAIN DISTRIBUTIONS. Long-term capital gains earned by the Fund on
the sale of securities and distributed to shareholders are federally
taxable as long-term capital gains, regardless of the length of time
that s hareholders have held their shares. If a shareholder receives
a long-term capital gain distribution on shares of the Fund and such shares
are held six months or less and are sold at a loss, the
portion of the loss equal to the amount of the long-term capital gain
distribution will be considered a long-term loss for tax purposes.
Short-term capital gains distributed by the Fund are taxable to
shareholders as dividends, not as capital gains. Distributions from the
short-term capital gains do not qualify for the dividends - received
deduction.

FOREIGN TAXES. Foreign governments may withhold taxes on dividends and
interest paid with respect to foreign securities. Because the Fund does
not currently anticipate that securities of foreign issuers will constitute
more than 50% of its total assets at the end of its fiscal year,
shareholders should not expect to claim a foreign tax credit or deduction
on their federal income tax returns with respect to foreign taxes withheld.

TAX STATUS OF THE FUND. The Fund has qualified and intends to continue to
qualify as a "regulated investment company" for tax purposes, so that it
will not be liable for federal tax on income and capital gains distributed
to shareholders. In order to qualify as a regulated investment company and
avoid being subject to federal income or excise taxes, the Fund intends to
distribute substantially all of its net investment income and realized
capital gains within each calendar year as well as on a fiscal year basis.
The Fund also intends to comply with other tax rules applicable to
regulated investment companies, including a requirement that capital gains
from the sale of securities held for less than three months must constitute
less than 30% of the Fund's gross income for each fiscal year. Gains from
some forward currency contracts, futures contracts , and options are
included in this 30% calculation, which may limit the Fund's investments in
such instruments.
If the Fund purchases shares in certain foreign investment entities,
called passive foreign investment companies (PFICs), it may be subject to
U.S. federal income tax on a portion of any excess distribution or gain
from the disposition of such shares. Interest charges may also be imposed
on the Fund with respect to deferred taxes arising from such distributions
or gains.
The Fund is treated as a separate entity from the other funds of
Fidelity Advisor Series III for tax purposes.
OTHER TAX INFORMATION. The information above is only a summary of some of
the tax consequences generally affecting the Fund and its shareholders, and
no attempt has been made to discuss individual tax consequences. In
addition to federal income taxes, shareholders of the Fund may be subject
to state and local taxes on distributions received from the Fund.
Investors should consult their tax advi se rs to determine whether the
Fund is suitable for their particular tax situation. The Fund is
treated as a separate entity from the other portfolios of Fidelity Advisor
Series III for tax purposes.
FMR
FMR is a wholly owned subsidiary of FMR Corp., a parent company organized
in 1972. At present, the principal operating activities of FMR Corp. are
those conducted by three of its divisions as follows: Service, which is
the transfer and shareholder servicing agent for certain of the funds
advised by FMR; FIIOC, which performs shareholder servicing functions for
certain institutional customers; and Fidelity Investments Retail Marketing
Company, which provides marketing services to various companies within the
Fidelity organization.

Several affiliates of FMR are also engaged in the investment
advisory business. Fidelity Management Trust Company provides trustee,
investment advisory and administrative services to retirement plans and
corporate employee benefit accounts. FMR U.K. and FMR Far East, both
wholly owned subsidiaries of FMR formed in 1986, supply investment
research, and may supply portfolio management services, to FMR in
connection with certain funds advised by FMR. Analysts employed by FMR,
FMR U.K. and FMR Far East research and visit thousands of domestic and
foreign companies each year. FMR Texas Inc. (FMR Texas), a wholly
owned subsidiary of FMR formed in 1989, supplies portfolio management and
research services in connection with certain money market funds advised by
FMR.
TRUSTEES AND OFFICERS
The Board of Trustees and executive officers of the Trust are
listed below. Except as indicated, each individual has held the office
shown or other offices in the same company for the last five years. All
persons named as Trustees and officers also serve in similar capacities for
other funds advised by FMR. Unless otherwise noted, the business address
of each Trustee and officer is 82 Devonshire Street, Boston, MA 02109,
which is also the address of FMR. Those Trustees who are "interested
persons" (as defined in the 1940 Act) by virtue of their affiliation with
either the Fund or FMR are indicated by an asterisk (*).
*EDWARD C. JOHNSON 3d, Trustee and President, is Chairman, Chief Executive
Officer and a Director of FMR Corp.; a Director and Chairman of the Board
and of the Executive Committee of FMR; Chairman and a Director of FMR Texas
Inc. (1989), Fidelity Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.
*J. GARY BURKHEAD, Trustee and Senior Vice President, is President of FMR;
and President and a Director of FMR Texas Inc. (1989), Fidelity Management
& Research (U.K.) Inc., and Fidelity Management & Research (Far
East) Inc.
RALPH F. COX, 200 Rivercrest Drive, Fort Worth, TX, Trustee (1991), is
President of Greenhill Petroleum Corporation (petroleum exploration and
production, 1990). Prior to his retirement in March 1990, Mr. Cox was
President and Chief Operating Officer of Union Pacific Resources Company
(exploration and production). He is a Director of Bonneville Pacific
Corporation (independent power, 1989) and CH2M Hill Companies
(engineering). In addition, he served on the Board of Directors of the
Norton Company (manufacturer of industrial devices, 1983-1990) and
continues to serve on the Board of Directors of the Texas State Chamber of
Commerce, and is a member of advisory boards of Texas A&M University
and the University of Texas at Austin.
PHYLLIS BURKE DAVIS, P.O. Box 264, Bridgehampton, NY, Trustee (1992).
Prior to her retirement in September 1991, Mrs. Davis was the Senior Vice
President of Corporate Affairs of Avon Products, Inc. She is currently a
Director of BellSouth Corporation (telecommunications), Eaton Corporation
(manufacturing, 1991), and the TJX Companies, Inc. (retail stores, 1990),
and previously served as a Director of Hallmark Cards, Inc. (1985-1991) and
Nabisco Brands, Inc. In addition, she serves as a Director of the New York
City Chapter of the National Multiple Sclerosis Society, and is a member of
the Advisory Council of the International Executive Service Corps. and the
President's Advisory Council of The University of Vermont School of
Business Administration.
RICHARD J. FLYNN, 77 Fiske Hill, Sturbridge, MA, Trustee, is a financial
consultant. Prior to September 1986, Mr. Flynn was Vice Chairman and a
Director of the Norton Company (manufacturer of industrial devices). He is
currently a Director of Mechanics Bank and a Trustee of College of the Holy
Cross and Old Sturbridge Village, Inc.
E. BRADLEY JONES, 3881-2 Lander Road, Chagrin Falls, OH, Trustee (1990).
Prior to his retirement in 1984, Mr. Jones was Chairman and Chief Executive
Officer of LTV Steel Company. Prior to May 1990, he was Director of
National City Corporation (a bank holding company) and National City Bank
of Cleveland. He is a Director of TRW Inc. (original equipment and
replacement products), Cleveland-Cliffs Inc (mining), NACCO Industries,
Inc. (mining and marketing), Consolidated Rail Corporation, Birmingham
Steel Corporation (1988), Hyster-Yale Materials Handling, Inc. (1989), and
RPM, Inc. (manufacturer of chemical products, 1990). In addition, he
serves as a Trustee of First Union Real Estate Investments, Chairman of the
Board of Trustees and a member of the Executive Committee of the Cleveland
Clinic Foundation, a Trustee and a member of the Executive Committee of
University School (Cleveland), and a Trustee of Cleveland Clinic Florida.
DONALD J. KIRK, 680 Steamboat Road, Apartment #1-North, Greenwich, CT,
Trustee, is a Professor at Columbia University Graduate School of Business
and a financial consultant. Prior to 1987, he was Chairman of the
Financial Accounting Standards Board. Mr. Kirk is a Director of General Re
Corporation (reinsurance) and Valuation Research Corp. (appraisals and
valuations, 1993). In addition, he serves as Vice Chairman of the Board of
Directors of the National Arts Stabilization Fund and Vice Chairman of the
Board of Trustees of the Greenwich Hospital Association.
*PETER S. LYNCH, Trustee (1990) is Vice Chairman of FMR (1992). Prior to
his retirement on May 31, 1990, he was a Director of FMR (1989) and
Executive Vice President of FMR (a position he held until March 31, 1991);
Vice President of Fidelity Magellan Fund and FMR Growth Group Leader; and
Managing Director of FMR Corp. Mr. Lynch was also Vice President of
Fidelity Investments Corporate Services (1991-1992). He is a Director of
W.R. Grace & Co. (chemicals, 1989) and Morrison Knudsen Corporation
(engineering and construction). In addition, he serves as a Trustee of
Boston College, Massachusetts Eye & Ear Infirmary, Historic Deerfield
(1989) and Society for the Preservation of New England Antiquities, and as
an Overseer of the Museum of Fine Arts of Boston (1990).
GERALD C. McDONOUGH, 135 Aspenwood Drive, Cleveland, OH, Trustee (1989), is
Chairman of G.M. Management Group (strategic advisory services). Prior to
his retirement in July 1988, he was Chairman and Chief Executive Officer of
Leaseway Transportation Corp. (physical distribution services). Mr.
McDonough is a Director of ACME-Cleveland Corp. (metal working,
telecommunications and electronic products), Brush-Wellman Inc. (metal
refining), York International Corp. (air conditioning and refrigeration,
1989), Commercial Intertech Corp. (water treatment equipment, 1992), and
Associated Estates Realty Corporation (a real estate investment trust,
1993).
EDWARD H. MALONE, 5601 Turtle Bay Drive #2104, Naples, FL, Trustee. Prior
to his retirement in 1985, Mr. Malone was Chairman, General Electric
Investment Corporation and a Vice President of General Electric Company.
He is a Director of Allegheny Power Systems, Inc. (electric utility),
General Re Corporation (reinsurance) and Mattel Inc. (toy manufacturer).
He is also a Trustee of Rensselaer Polytechnic Institute and of Corporate
Property Investors and a member of the Advisory Boards of Butler Capital
Corporation Funds and Warburg, Pincus Partnership Funds.
MARVIN L. MANN, 55 Railroad Avenue, Greenwich, CT, Trustee (1993) is
Chairman of the Board, President, and Chief Executive Officer of Lexmark
International, Inc. (office machines, 1991). Prior to 1991, he held the
positions of Vice President of International Business Machines Corporation
("IBM") and President and General Manager of various IBM divisions and
subsidiaries. Mr. Mann is a Director of M.A. Hanna Company (chemicals,
1993) and Infomart (marketing services, 1991), a Trammell Crow Co. In
addition, he serves as the Campaign Vice Chairman of the Tri-State United
Way (1993) and is a member of the University of Alabama President's Cabinet
(1990).
THOMAS R. WILLIAMS, 21st Floor, 191 Peachtree Street, N.E., Atlanta, GA,
Trustee, is President of The Wales Group, Inc. (management and financial
advisory services). Prior to retiring in 1987, Mr. Williams served as
Chairman of the Board of First Wachovia Corporation (bank holding company),
and Chairman and Chief Executive Officer of The First National Bank of
Atlanta and First Atlanta Corporation (bank holding company). He is
currently a Director of BellSouth Corporation (telecommunications),
ConAgra, Inc. (agricultural products), Fisher Business Systems, Inc.
(computer software), Georgia Power Company (electric utility), Gerber Alley
& Associates, Inc. (computer software), National Life Insurance Company
of Vermont, American Software, Inc. (1989), and AppleSouth, Inc.
(restaurants, 1992).
GARY L. FRENCH, Treasurer (1991). Prior to becoming Treasurer of the
Fidelity funds, Mr. French was Senior Vice President, Fund Accounting -
Fidelity Accounting & Custody Services Co. (1991); Vice President, Fund
Accounting - Fidelity Accounting & Custody Services Co. (1990); and
Senior Vice President, Chief Financial and Operations Officer - Huntington
Advisers, Inc. (1985-1990).
ARTHUR S. LORING, Secretary (1991), is Vice President and General Counsel
of FMR, Vice President-Legal of FMR Corp., and Clerk of Distributors.
ROBERT H. MORRISON, Manager, Security Transactions, is an employee of FMR.
BETH TERRANA, Vice President (1991), is an employee of FMR.
Under a retirement program that became effective on November 1,
1989, Trustees, upon reaching age 72, become eligible to participate in a
defined benefit retirement program under which they receive payments
during their lifetime from the Fund based on their basic trustees
fees and length of service. Currently, Messrs. Robert L. Johnson, William
R. Spaulding, Bertram H. Witham and David L. Yunich participate in the
program.
As of February 28, 1994, the Trustees and officers owned in the
aggregate less than 1% of the outstanding shares of the Fund.

MANAGEMENT AND OTHER SERVICES

The Fund employs FMR to furnish investment advisory and other services.
Under its Management Contract with the Fund, FMR acts as investment
adviser and, subject to the supervision of the Board of Trustees, directs
the investments of the Fund in accordance with its investment objective,
policies and limitations. FMR also provides the Fund with all necessary
office facilities and personnel for servicing the Fund's investments, and
compensates all officers of the Trust, all Trustees who are "interested
persons" of the Trust or FMR, and all personnel of the Trust or FMR
performing services relating to research, statistical and investment
activities.
In addition, FMR or its affiliates, subject to the supervision of the
Board of Trustees, provide the management and administrative services
necessary for the operation of the Fund. These services include:
providing facilities for maintaining the Fund's organization; supervising
relations with custodians, transfer and pricing agents, accountants,
underwriters and other persons dealing with the Fund; preparing all general
shareholder communications and conducting shareholder relations,
maintaining the Fund's records, and the registration of the Fund's shares
under federal and state law; developing management and shareholder services
for the Fund and furnishing reports, evaluations and analyses on a variety
of subjects to the Trustees.

For these services the Fund pays FMR a monthly management fee at an annual
rate of .50% of the average net assets of the Fund determined at the close
of business on each day throughout the month. FMR may, from time to time,
agree to voluntarily reimburse the Fund for expenses above a specified
percentage of net assets of the Fund. FMR retains the ability to be repaid
for these expense reimbursements in the amount that expenses fall below the
limit prior to the end of the fiscal year. Reimbursement by FMR will
increase the Fund's total return. For the fiscal years ended November 30,
1993, 1992 and 1991, FMR received $933,830, $622,216, and $806,504,
respectively, after reimbursement. Effective April 1, 1987, FMR agreed to
voluntarily reimburse 10% of its annual management fee, reducing the fee to
.40%. As of September 10, 1992, this reimbursement was no longer in
effect.

In addition to the management fee payable to FMR and the fees payable to
FIIOC for Institutional shares and Class B shares, and State
Street and Service for Class A shares, th e Fund pays all its
expenses, without limitation, that are not assumed by those parties. The
Fund pays for t ypesetting, printing and mailing of proxy
material s to shareholders, legal expenses, and the fees of the
custodian, auditor and non-interested Trustees. Although the Fund's
current Management Contract provides that the Fund will pay for
t ypesetting, printing and mailing P rospectuses, Statements of
Additional Information , notices and reports to sh areholders,
the Trust has entered into a revised transfer agent agreement with
the Transfer Agent , pursuant to which Transfer Agent
bear s the cost of providing these services to existing shareholders.
Other expenses paid by the Fund include interest, taxes, brokerage
commissions, the Fund's proportionate share of insurance premiums and
Investment Company Institute dues, and the costs of registering shares
under federal and state securities laws. The Fund is also liable for such
nonrecurring expenses as may arise, including costs of litigation to which
the Fund may be a party and any obligation it may have to indemnify
its officers and Trustees with respect to such litigation.

To comply with the California Code of Regulations, FMR will reimburse the
Fund if and to the extent that the Fund's aggregate annual operating
expenses exceed specified percentages of its average net assets. The
applicable percentages are 2 1/2% of the first $30 million, 2% of the next
$70 million, and 1 1/2% of average net assets in excess of $100 million.
When calculating the Fund expenses for purposes of this regulation, the
Fund may exclude interest, taxes, brokerage commissions, and extraordinary
expenses, as well as a portion of its distribution plan expenses and
custodian fees attributable to investments in foreign securities.
FMR may, from time, agree to voluntarily reimburse the Fund for
expenses above a specified percentage of average net assets. FMR retains
the ability to be repaid for these expense reimbursements in the amount
that expenses fall below the limit prior to the end of the fiscal year.
Reimbursements or expense limitations by FMR will increase a class' yield
and total return. Reimbursements by a class will lower its yield and total
return.
SUB-ADVISERS. On December 1, 1990, FMR entered into sub-advisory
agreements with FMR U.K. and FMR Far East pursuant to which FMR U.K. and
FMR Far East supply FMR with investment research and recommendations
concerning foreign securities for the benefit of the Fund.
FMR U.K. and FMR Far East, both wholly-owned subsidiaries of FMR, were
formed in 1986 and registered under the Investment Advisers Act of 1940 on
May 11, 1987 , to research and to make recommendations with respect
to companies located outside of North America.
The sub-advisory agreements provide that FMR, and not the Fund, pays fees
to FMR U.K. and FMR Far East equal to 110% and 105%, respectively, of FMR
U.K.'s and FMR Far East's costs incurred in connection with each agreement,
said costs to be determined in relation to the assets of the Fund that
benefit from the services of the sub-advisers.
TRANSFER AGENT. FIIOC is transfer and shareholder servicing agent for
Institutional shares and Class B shares. Under its contract with the Fund,
FIIOC pays out-of-pocket expenses associated with providing transfer agency
services, and FIIOC bears the expense of typesetting, printing and mailing
of Prospectuses, Statements of Additional Information, reports, notices and
statements to shareholders. Effective January 1, 1993, FIIOC is paid a per
account fee of $95 and a monetary transaction fee of $20 or $17.50
depending on the nature of the services provided. From June 1, 1990 until
December 31, 1992, FIIOC was paid a per account fee and a monetary
transaction fee of $65 and $14, or $60 and $12, respectively. Fees for
institutional retirement plan accounts, if any, are based on the net asset
value of all such accounts.
Transfer agent and out-of-pocket expenses for Institutional shares for the
fiscal years ended November 30, 1993, 1992 and 1991, amounted to $239,364,
$127,808, and $151,916, respectively.
State Street is transfer and shareholder servicing agent for Class A
shares. State Street has delegated certain transfer, dividend-paying and
shareholder services to FIIOC. Under a revised fee arrangement effective
January 1, 1993, the Fund pays a per account fee and a monetary transaction
fee of $30 and $6, respectively. For accounts that FIIOC maintains on
behalf of State Street, FIIOC receives all such fees. For accounts as to
which FIIOC provides limited services, FIIOC may receive a portion
(currently $20 and $6, respectively) of related per account fees and
monetary transaction fees, less applicable charges and expenses of State
Street for account maintenance and transactions.
The Fund has a contract with Service providing that Service will perform
the calculations necessary to determine NAV and dividends of Institutional
shares, Class A shares and Class B shares, and maintain the Fund's
accounting records. Prior to July 1, 1991, the annual fee for these
pricing and bookkeeping services was based on two schedules, one pertaining
to the Fund's average net assets, and one pertaining to the type and number
of transactions the Fund made. The fee rates in effect as of July 1, 1991
are based on the Fund's average net assets, specifically, .06% for the
first $500 million of average net assets and .03% for average net assets in
excess of $500 million. The fee is limited to a minimum of $45,000 and a
maximum of $750,000 per year. For fiscal 1993, 1992, and 1991, the fees
paid to Service for pricing and bookkeeping services (including related
out-of-pocket expenses) were $113,026, $91,899, and $132,644, respectively.

THE DISTRIBUTOR
The Fund has a General Distribution Agreement with Distributors, a
Massachusetts corporation organized on July 18, 1960.
D istributors, is a broker-dealer registered under the
Securities Exchange Act of 1934 and is a member of the National Association
of Securities Dealers, Inc. The General Distribution Agreement calls for
Distributors to use all reasonable efforts, consistent with its other
business, to secure purchasers for shares of the Fund, which are offered
continuously. Promotional and administrative expenses in connection with
the offer and sale of shares are paid by Distributors. Distributors also
acts as general distributor for other publicly offered Fidelity funds. The
expenses of these operations are borne by FMR or Distributors.
DISTRIBUTION AND SERVICE PLAN

The Trustees of the Trust have adopted a Distribution and Service Plan
on behalf of Class A, Class B and Institutional Class shares of the Fund
(the Plan[s]) pursuant to Rule 12b-1 under the 1940 Act (the Rule). As
required by the Rule, the Trustees carefully considered all pertinent
factors relating to the implementation of each plan prior to its approval,
and have determined that there is a reasonable likelihood that the plan
will benefit the applicable class and its shareholders.

Pursuant to Class A Plan, Class A pays Distributors a distribution fee at
an annual rate of up to .75% of its average net assets determined as of the
close of business on each day throughout the month, but excluding assets
attributable to Class A shares purchased more than 144 months prior to such
day. Currently, the Trustees have approved a distribution fee for Class A
at an annual rate of .65% of its average net assets. This fee may be
increased only when, in the opinion of the Trustees, it is in the best
interests of the Class A shareholders to do so.

Pursuant to the Class B Plan, Class B pays Distributors a distribution fee
at an annual rate of .75% of its average daily net assets determined as of
the close of business on each day throughout the month. Class B also pays
investment professionals a service fee at an annual rate of .25% of its
average daily net assets determined as of the close of business on each day
throughout the month for personal service and/or the maintenance of
shareholder accounts.

Each plan also specifically recognizes that FMR, either directly or
through Distributors, may use its management fee revenue, past profits or
other resources, without limitation, to pay promotional and administrative
expenses in connection with the offer and sale of shares of the applicable
class. Under [each/the] plan, if the payment by the Fund to FMR of
management fees should be deemed to be indirect financing of the
distribution of shares/the applicable class, such payment is authorized by
the Plan. In addition, each plan provides that FMR may use its resources,
including its management fee revenues, to make payments to third parties
that assist in selling shares of the applicable class or in other
distribution activities relating to that class. To the extent that each
plan gives FMR and Distributors greater flexibility in connection with the
distribution of shares of the applicable class, additional sales of Fund
shares may result. Additionally, certain shareholder support services may
be provided more effectively under the Plan[s] by local entities with whom
shareholders have other relationships.

None of the Plans provides/the Plan does not provide for specific payments
by the applicable of any of the expenses of Distributors, or obligates
Distributors or FMR to perform any specific type or level of distribution
activities or incur any specific level of expense in connection with
distribution activities. After payments by Distributors for advertising,
marketing and distribution, and payments to investment professionals, the
amounts remaining, if any, may be used as Distributors may elect.

The Glass-Steagall Act generally prohibits federally and state chartered
or supervised banks from engaging in the business of underwriting, selling
or distributing securities. Although the scope of this prohibition under
the Glass-Steagall Act has not been fully defined, in Distributors'
opinion, it should not prohibit banks from being paid for shareholder
support services, servicing and record keeping functions. Distributors may
engage banks to perform only these functions. However, changes in federal
or state statutes and regulations pertaining to the permissible activities
of banks and their affiliates or subsidiaries, as well as further judicial
or administrative decisions or interpretations, could prevent a bank from
continuing to perform all or a part of the contemplated services. If a
bank were prohibited from so acting, the Trustees would consider what
actions, if any, would be necessary to continue to provide efficient and
effective shareholder services. In such an event, changes in the operation
of the Fund might occur, including possible termination of any automatic
investment or redemption of other services then provided by the bank. It
is not expected that shareholders would suffer any adverse financial
consequences as a result of any of these occurrences. The Fund may execute
portfolio transactions with and purchase securities issued by depository
institutions that receive payments under the Plans. No preference for the
instruments of such depository institutions will be shown in the selection
of investments. In addition, state securities laws on this issue may
differ from the interpretations of federal law expressed herein, and banks
and financial institutions may be required to register as dealers pursuant
to st ate law.
DESCRIPTION OF THE TRUST
TRUST ORGANIZATION. Fidelity Advisor Equity Portfolio Income Fund is a
series of Fidelity Advisor III, an open-end investment company organized as
a Massachusetts business trust by Declaration of Trust dated May 17, 1982.
The Fund currently offers Institutional shares and Retail shares. Retail
Shares are comprised of two classes: Class A and Class B. On January 29,
1986, the name was changed from Equity Portfolio: Income to Fidelity
Franklin Street Trust. On April 15, 1993 the Trust's name was again changed
to Fidelity Advisor Series III. The Trust's Declaration of Trust permits
the Trustees to create additional series. In the event that FMR ceases to
be the investment adviser to the Fund, the right of the Trust or Fund to
use the identifying name "Fidelity" may be withdrawn.
As of December 31, 1993, the following owned of record or beneficially
more than 5% of Class A shares: First National Bank of Ohio, Akron, OH,
22%; Financial Advisor Services, San Francisco, CA, 8%; First National
Bank; Gainesville, GA, 5.7%; Union Planters National Bank, Memphis, TN,
5.1%.

As of December 31, 1993, the following owned of record or beneficially
more than 5% of Advisor Equity Portfolio Income: First Trust Company,
Denver, CO, 12.4%; Capital Analysts, Inc., Radnor, PA, 9.2%.
SHAREHOLDER AND TRUSTEE LIABILITY. The Fund is an entity of the type
commonly known as a "Massachusetts business trust." Under Massachusetts
law shareholders of such a trust may, under certain circumstances, be held
personally liable for the obligations of the trust. The Declaration of
Trust provides that the Fund shall not have any claim against shareholders
except for the payment of the purchase price of shares and requires that
each agreement, obligation, or other instrument entered into or executed by
the Fund or the Trustees shall include a provision limiting the obligations
created thereby to the Fund and its assets. The Declaration of Trust
provides for indemnification out of the Fund's property of any shareholder
held personally liable for the obligations of the Fund. The Declaration of
Trust also provides that the Fund shall, upon request, assume the defense
of any claim made against any shareholder for any act or obligation of the
Fund and satisfy any judgment thereon. Thus, the risk of a shareholder
incurring financial loss on account of shareholder liability is limited to
circumstances in which the Fund itself would be unable to meet its
obligations. FMR believes that, in view of the above, the risk of personal
liability to shareholders is remote.
The Declaration of Trust further provides that the Trustees, if they have
exercised reasonable care, will not be liable for neglect or wrongdoing,
but nothing in the Declaration of Trust protects a Trustee against any
liability to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of their office. Claims asserted
against Institutional shares may subject holders to certain liabilities,
and claims asserted against Retail shares may subject holders of
Institutional shares to certain liabilities.
VOTING RIGHTS. As a shareholder, you receive one vote for each dollar of
net asset value per share you own. The shares have no preemptive or
conversion rights; the voting and dividend rights, the right of redemption,
and the privilege of exchange are described in each p rospectus.
Shares are fully paid and nonassessable, except as set forth under the
heading "Shareholder and Trustee Liability" above. Shareholders
representing 10% or more of the Trust or of Institutional shares, Class
A shares or Class B shares of the Fund, as set forth in the
Declaration of Trust, may call meetings f or any purpose
related to the Trust , Fu nd, or Institutional shares, Class A
shares or Class B shares as applicable, inc luding, in the case of a
meeting of the entire Trust, the purpose of voting on removal of one or
more Trustees. The Trust or the Fund may be terminated upon the
sale of its assets to another open-end management investment company, or
upon liquidation and distribution of its assets, if approved by the vote of
the holders of a majority of the dollar value of outstanding shares of the
Trust or Fund. If not so terminated, the Trust or Fund will continue
indefinitely.
CUSTODIAN. The Chase Manhattan Bank, N.A., 1 Chase Manhattan Plaza, New
York, New York 10081, is custodian of the assets of the Fund. The
custodian is responsible for the safekeeping of the Fund's assets and the
appointment of subcustodian banks and clearing agencies. The custodian
takes no part in determining the investment policies of the Fund or in
deciding which securities are purchased or sold by the Fund. The Fund may,
however, invest in obligations of the custodian and may purchase securities
from or sell securities to the custodian.
FMR, its officers and directors, its affiliated companies , and the
Trust's Trustees may from time to time have transactions with various
banks, including banks serving as custodians for certain of the
F unds advised by FMR. Transactions that have occurred to date
include mortgages and personal and general business loans. In the judgment
of FMR, the terms and conditions of those transactions were not influenced
by existing or potential custodial or other fund relationships.
AUDITOR. Coopers & Lybrand , 1 Post Office Square, Boston,
Massachusetts, serves as the Trust's independent accountant. The
auditor examines financial statements for the Fund, and provides other
audit, tax, and related services.
FINANCIAL STATEMENTS
The Annual Report for Class A shares for the fiscal year ended
November 30, 1993, a separate report supplied with this SAI is incorporated
herein by reference. The Annual Report for Institutional shares is a
separate report and is incorporated into the Prospectus for Institutional
shares.
APPENDIX
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S CORPORATE BOND RATINGS:
AAA - Bonds rated Aaa are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as "gilt
edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective
elements are likely to change, such changes as can be visualized are most
unlikely to impair the fundamentally strong position of such issues.
AA - Bonds rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other
elements present which make the long-term risks appear somewhat larger than
in Aaa securities.
A - Bonds rated A possess many favorable investment attributes and are to
be considered as upper-medium-grade obligations. Factors giving security
to principal and interest are considered adequate but elements may be
present which suggest a susceptibility to impairment sometime in the
future.
BAA - Bonds rated Baa are considered as medium-grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain
protective elements may be lacking or may be characteristically unreliable
over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
BA - Bonds rated Ba are judged to have speculative elements. Their future
cannot be considered as well assured. Often the protection of interest and
principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
B - Bonds rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or maintenance of
other terms of the contract over any long period of time may be small.
CAA - Bonds rated Caa are of poor standing. Such issues may be in default
or there may be present elements of danger with respect to principal or
interest.
CA - Bonds rated Ca represent obligations which are speculative in a high
degree. Such issues are often in default or have other marked
short-comings.
C - Bonds rated C are the lowest-rated class of bonds and issued so rated
can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
Moody's applies numerical modifiers, 1, 2, and 3, in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its
generic rating category; the modifier 2 indicates a mid-range ranking; and
the modifier 3 indicates that the issue ranks in the lower end of its
generic rating category.
DESCRIPTION OF STANDARD & POOR'S CORPORATION'S CORPORATE BOND RATINGS:
AAA - Debt rated AAA has the highest rating assigned by Standard &
Poor's to a debt obligation. Capacity to pay interest and repay principal
is extremely strong.
AA - Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher-rated issues only in small degree.
A - Debt rated A has a strong capacity to pay interest and repay principal,
although it is somewhat more susceptible to the adverse effects of changes
in circumstances and economic conditions.
BBB - Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in higher-rated
categories.
BB - Debt rate BB has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions which could
lead to inadequate capacity to meet timely interest and principal payments.
B - Debt rated B has a greater vulnerability to default but currently has
the capacity to meet interest payments and principal repayments. Adverse
business, financial, or economic conditions will likely impair capacity or
willingness to pay interest and repay principal. The B rating category is
also used for debt subordinated to senior debt that is assigned an actual
or implied BB- rating.
CCC - Debt rated CCC has a currently identifiable vulnerability to default,
and is dependent upon favorable business, financial, and economic
conditions to meet timely payment of interest and repayment of principal.
In the event of adverse business, financial, or economic conditions, it is
not likely to have the capacity to pay interest and repay principal.
CC - Debt rated CC is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC debt rating.
C - The rating C is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC- debt rating. The C rating may
be used to cover a situation where a bankruptcy petition has been filed but
debt service payments are continued.
The 'C' rating may be used to cover a situation where a bankruptcy petition
has been filed but debt service payments are continued.
CI - The rating CI is reserved for income bonds on which no interest is
being paid.
D - Debt rated D is in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due even
if the applicable grace period has not expired, unless S&P believes
that such payments will be made during such grace period. The D rating
will also be used upon the filing of a bankruptcy petition if debt service
payments are jeopardized.
The ratings from AA to CCC may be modified by the addition of a plus or
minus to show relative standing within the major rating categories.