SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT (NO. 2-78458)
UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No.
[ ]
Post-Effective Amendment No. 24
[x]
and
REGISTRATION STATEMENT (NO. 811-3518) UNDER THE INVESTMENT
COMPANY ACT OF 1940 [x]
Daily Tax-Exempt Money Fund
(Exact Name of Registrant as Specified in Declaration of Trust)
1201 N. Market Street - P.O. Box 1347
Wilmington, DE 19899-1347
(Address Of Principal Executive Office) (Zip Code)
Registrant's Telephone Number, Including Area Code (617) 563-7000
Arthur Loring
82 Devonshire Street
Boston, MA 02109
(Name and Address of Agent for Service)
It is proposed that this filing will become effective
[ ] Immediately upon filing pursuant to paragraph (b) of Rule 485
[ ] On (______) pursuant to paragraph (b) of Rule 485
[ ] 60 days after filing pursuant to paragraph (a)(i) of Rule 485
[X] On (December 20, 1995) pursuant to paragraph (a)(i) of Rule 485
[ ] 75 days after filing pursuant to paragraph (a)(ii) of Rule 485
[ ] On or about December 26, 1995 pursuant to paragraph (a)(ii) of Rule
485
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Registrant has filed a declaration pursuant to Rule 24f-2 under the
Investment Company Act of 1940 and will file the notice required by such
Rule on or about December 20, 1995.
DAILY TAX-EXEMPT MONEY FUND:
CROSS REFERENCE SHEET
Form N-1A Item Number Prospectus Caption
1 a,b...................... Cover Page
2 a......................... Expenses
b,c...................... Contents; Who May Want to Invest
3 a,b...................... Financial Highlights
c..... ................... Performance
4 a(i)..................... Charter
a(ii). ................... Investment Principles and Risks; Securities
and Investment Practices
c...... ................... Who May Want to Invest; Investment
Principles and Risks; Securities and Investment Practices
5 a...... .................. Charter
b(i).................... Cover Page; Charter
b(ii)................... FMR and Its Affiliates; Charter; Breakdown of
Expenses
b(iii)................. Expenses; Breakdown of Expenses
c,d..................... Charter; Breakdown of Expenses; Cover Page; FMR
and Its Affiliates
e....... ................ How to Invest, Exchange and Redeem
f....................... Expenses
g...................... Expenses; FMR and Its Affiliates
6 a(i).................. Charter
a(ii)................. How to Buy Shares; How to Sell Shares; Investor
Services; Transaction Details; Exchange Restrictions
a(iii)................. *
b....................... FMR and Its Affiliates
c....................... Exchange Restrictions
d....................... *
e....................... Cover Page; How to Buy Shares; How to Sell
Shares; Investor Services; Exchange Restrictions *
f,g..................... Dividends, Capital Gains and Taxes
7 a....................... Charter; Cover Page
b...................... How to Buy Shares; Transaction Details
c...................... How to Buy Shares; Transaction Details
d...................... How to Buy Shares
e...................... Transaction Details
f...................... Breakdown of Expenses
8 ....................... How to Sell Shares; Investor Services;
Transaction Details; Exchange Restrictions
9 ...................... *
* Not Applicable
DAILY TAX-EXEMPT MONEY
FUND
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how the fund
invests and the services available to shareholders.
To learn more about the fund and its investments, you can obtain a copy of
the fund's most recent financial report and portfolio listing or a copy of
the Statement of Additional Information (SAI) dated December 20, 1995. The
SAI has been filed with the Securities and Exchange Commission (SEC) and is
incorporated herein by reference (legally forms a part of the prospectus).
For a free copy of either document, contact Fidelity Client Services, 82
Devonshire Street, Boston, MA 02109 at 1-800-843-3001, or your investment
professional.
INVESTMENTS IN THE FUND ARE NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT THE FUND WILL MAINTAIN A
STABLE $1.00 SHARE PRICE.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR
OBLIGATIONS OF, OR GUARANTEED BY, ANY
DEPOSITORY INSTITUTION. SHARES ARE NOT
INSURED BY THE FDIC, THE FEDERAL RESERVE
BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT
TO INVESTMENT RISK, INCLUDING THE POSSIBLE
LOSS OF PRINCIPAL.
LIKE ALL MUTUAL FUNDS, THESE
SECURITIES HAVE NOT BEEN APPROVED
OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
DTE-PRO-1295
The fund seeks to provide individual and institutional investors with as
high a level of current income, exempt from federal income taxes, as is
consistent with a portfolio of high-quality, short-term municipal
obligations selected on the basis of liquidity and stability of principal.
PROSPECTUS
DATED DECEMBER 20,1995
AND
ANNUAL REPORT
FOR THE PERIOD ENDING
OCTOBER 31, 1995
(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA 02109
CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
PROSPECTUS
KEY FACTS P- WHO MAY WANT TO INVEST
P- EXPENSES The fund's yearly operating expenses.
P- FINANCIAL HIGHLIGHTS A summary of the fund's
financial data.
P- PERFORMANCE
THE FUND IN DETAIL P- CHARTER How the fund is organized.
P- INVESTMENT PRINCIPLES AND RISKS The fund's
overall approach to investing.
P- BREAKDOWN OF EXPENSES How operating costs
are calculated and what they include.
YOUR ACCOUNT P-11 TYPES OF ACCOUNTS Different ways to set up your
account.
P- HOW TO BUY SHARES Opening an account and
making additional investments.
P- HOW TO SELL SHARES Taking money out and
closing your account.
P- INVESTOR SERVICES Services to help you manage
your account.
SHAREHOLDER AND P- DIVIDENDS, CAPITAL GAINS, AND TAXES
ACCOUNT POLICIES
P- TRANSACTION DETAILS Share price calculations and
the timing of purchases and redemptions.
P- EXCHANGE RESTRICTIONS
ANNUAL REPORT
PERFORMANCE A-
FUND TALK A-
INVESTMENTS A-
FINANCIAL STATEMENTS A-
NOTES A-
REPORT OF INDEPENDENT ACCOUNTANTS A-
</TABLE>
KEY FACTS
WHO MAY WANT TO INVEST
The fund offers institutional and individual investors a convenient and
economical way to invest in a professionally managed portfolio of money
market instruments.
The fund is designed for investors who would like to earn federally
tax-exempt income at current money market rates while preserving the value
of their investment.
The rate of income will vary from day to day, generally reflecting
short-term interest rates.
The fund is managed to keep its share price stable at $1.00.
The fund is not in itself a balanced investment plan. However, because it
emphasizes stability, it could be well-suited for a portion of your
savings. The fund offers free checkwriting to give you easy access to your
money.
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you pay when you buy or sell
shares of the fund.
Maximum sales charge on purchases and None
reinvested distributions
Maximum deferred sales None
charge
Redemption fee None
Exchange fee None
ANNUAL OPERATING EXPENSES are paid out of the fund's assets. The fund pays
a management fee to Fidelity Management & Research Company (FMR). The fund
also incurs other expenses for services such as maintaining shareholder
records, and furnishing shareholder account statements and financial
reports.
12b-1 fees are paid by FMR from its management fee, its past profits or
other source, to the distributor for services and expenses in connection
with the distribution of fund shares. Long-term shareholders may pay more
than the economic equivalent of the maximum sales charges permitted by the
National Association of Securities Dealers, Inc., due to 12b-1 fees.
The fund's expenses are factored into its share price or dividends and are
not charged directly to shareholder accounts (see "Breakdown of Expenses"
on page ).
The following are projections based on historical expenses of the fund, and
are calculated as a percentage of average net assets of the fund.
Management fee (after reimbursement) %*
12b-1 fee (Distribution Fee) __%
Other expenses (after reimbursement) %
Total operating expenses %
* THE RATE FOR MANAGEMENT FEES REPRESENTS THE NET RATE RETAINED BY FMR
AFTER PAYMENT MADE TO THE DISTRIBUTOR. THE MANAGEMENT FEE BEFORE PAYMENTS
MADE TO THE DISTRIBUTOR BY FMR IS %.
EXPENSE TABLE EXAMPLE: You would pay the following expenses on a $1,000
investment, assuming a 5% annual return and full redemption at the end of
each time period:
1 3 5 10
Year Years Years Years
$ $ $ $
THESE EXAMPLES ILLUSTRATE THE EFFECT OF EXPENSES, BUT ARE NOT MEANT TO
SUGGEST ACTUAL OR EXPECTED COSTS OR RETURNS, ALL OF WHICH MAY VARY.
FMR has voluntarily agreed to reimburse the fund to the extent that total
operating expenses (excluding interest, taxes, brokerage commissions, and
extraordinary expenses) are in excess of 0.65% of its average net assets.
If this agreement were not in effect, the management fee, 12b-1 fees, other
expenses, and total operating expenses would have been ___%, ____%, ___%,
and ____%, respectively, as a percentage of average net assets.
FINANCIAL HIGHLIGHTS
The financial highlights table that follows and the fund's financial
statements are included in the fund's Annual Report and the annual
information has been audited by independent accountants. Their report on
the financial statements and financial highlights is included in the Annual
Report. The financial statements, the financial highlights, and the report
are attached.
[INSERT A TABLE FOR THE/EACH FUND HERE]
PERFORMANCE
Money market fund performance can be measured as TOTAL RETURN or YIELD.
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment in the fund over a
given period, assuming reinvestment of any dividends and capital gains. A
CUMULATIVE TOTAL RETURN reflects actual performance over a stated period of
time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that,
if achieved annually, would have produced the same cumulative total return
if performance had been constant over the entire period. Average annual
total returns smooth out variations in performance; they are not the same
as actual year-by-year results.
YIELD refers to the income generated by an investment in the fund over a
given period of time, expressed as an annual percentage rate. When a yield
assumes that income earned is reinvested, it is called an EFFECTIVE YIELD.
A TAX-EQUIVALENT YIELD shows what an investor would have to earn before
taxes to equal a tax-free yield.
SEVEN-DAY YIELD illustrates the income earned by an investment in a money
market fund over a recent seven-day period. Since money market funds
maintain a stable $1.00 share price, current seven-day yields are the most
common illustration of money market fund performance.
The fund's recent strategies, performance, and holdings are detailed twice
a year in financial reports, which are sent to all shareholders.
For current performance call Fidelity Client Services at 1-800-843-3001.
THE FUND IN DETAIL
CHARTER
DAILY TAX-EXEMPT MONEY FUND IS A MUTUAL FUND: an investment that pools
shareholders' money and invests it toward a specified goal. The fund is a
diversified fund of Daily Tax-Exempt Money Fund, an open-end management
investment company organized as a Delaware business trust on December 30,
1991.
THE FUND IS GOVERNED BY A BOARD OF TRUSTEES which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet throughout the year to oversee the fund's activities,
review contractual arrangements with companies that provide services to the
fund, and review the fund's performance. The majority of trustees are not
otherwise affiliated with Fidelity.
THE FUND MAY HOLD SPECIAL MEETINGS AND MAIL PROXY MATERIALS. These meetings
may be called to elect or remove trustees, change fundamental policies,
approve a management contract, or for other purposes. Shareholders not
attending these meetings are encouraged to vote by proxy. The transfer
agent will mail proxy materials in advance, including a voting card and
information about the proposals to be voted on. You are entitled to one
vote for each share you own.
FMR AND ITS AFFILIATES
Fidelity Investments is one of the largest investment management
organizations in the United States and has its principal business address
at 82 Devonshire Street, Boston, Massachusetts 02109. It includes a number
of different subsidiaries and divisions which provide a variety of
financial services and products. The fund employs various Fidelity
companies to perform activities required for its operation.
The fund is managed by FMR, which handles the fund's business affairs. FMR
Texas Inc. (FMR Texas), located in Irving, Texas, has primary
responsibility for providing investment management services.
As of __, 1995, FMR advised funds having approximately __million
shareholder accounts with a total value of more than $__ billion.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.
Fidelity Distributors Corporation (FDC) distributes and markets Fidelity's
funds and services. Fidelity Investments Institutional Operations Company
(FIIOC) performs transfer agent servicing functions for the fund.
FMR Corp. is the ultimate parent company of FMR and, FMR Texas. Members of
the Edward C. Johnson 3d family are the predominant owners of a class of
shares of common stock representing approximately 49% of the voting power
of FMR Corp. Under the Investment Company Act of 1940 (the 1940 Act),
control of a company is presumed where one individual or group of
individuals owns more than 25% of the voting stock of that company;
therefore, the Johnson family may be deemed under the 1940 Act to form a
controlling group with respect to FMR Corp.
UMB Bank, n.a. (UMB) is the fund's transfer agent, although it employs
FIIOC to perform these functions for the fund. UMB is located at 1010 Grand
Avenue, Kansas City, Missouri.
To carry out the fund's transactions, FMR may use its broker-dealer
affiliates and other firms that sell fund shares, provided that the fund
receives services and commission rates comparable to those of other
broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
The fund, under normal conditions, invests in U.S. dollar denominated
high-quality, short-term municipal securities of all types.
The fund normally invests so that at least 80% of its income distribution
is free from federal income tax. The fund does not currently intend to
purchase municipal obligations that are subject to the federal alternative
minimum tax. The fund may invest any portion of its assets in industrial
revenue bonds (IRBs) backed by private issuers.
When you sell your shares, they should be worth the same amount as when you
bought them. Of course, there is no guarantee that the fund will maintain a
stable $1.00 share price. The fund follows industry-standard guidelines on
the quality and maturity of its investments, which are designed to help
maintain a stable $1.00 share price. The fund will purchase only
high-quality securities that FMR believes present minimal credit risks and
will observe maturity restrictions on securities it buys. In general,
securities with longer maturities are more vulnerable to price changes,
although they may provide higher yields. It is possible that a major change
in interest rates or a default on the fund's investments could cause its
share price (and the value of your investment) to change.
The fund earns income at current money market rates. It stresses
preservation of capital, liquidity, and tax-free income and does not seek
the higher yields or capital appreciation that more aggressive investments
may provide. The fund's yield will vary from day to day and generally
reflects current short-term interest rates and other market conditions.
FMR normally invests the fund's assets according to its investment strategy
and does not expect to invest in federally taxable obligations. The fund
also reserves the right to hold a substantial amount of uninvested cash or
to invest more than normally permitted in federally taxable obligations for
temporary, defensive purposes.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which the fund may invest, strategies FMR may employ in
pursuit of the fund's investment objective, and a summary of related risks.
Any restrictions listed supplement those discussed earlier in this section.
A complete listing of the fund's limitations and more detailed information
about the fund's investments are contained in the fund's SAI. Policies and
limitations are considered at the time of purchase; the sale of instruments
is not required in the event of a subsequent change in circumstances.
FMR may not buy all of these instruments or use all of these techniques
unless it believes that they are consistent with the fund's investment
objective and policies and that doing so will help the fund achieve its
goal. Current holdings and recent investment strategies are described in
the fund's financial reports, which are sent to shareholders twice a year.
For a free SAI or financial report, call your investment professional or
call Fidelity Client Services at 1-800-843-3001.
MONEY MARKET SECURITIES are high-quality, short-term obligations issued by
municipalities, local and state governments, and other entities. These
obligations may carry fixed, variable, or floating interest rates. Some
money market securities employ a trust or other similar structure to modify
the maturity, price characteristics, or quality of financial assets so that
they are eligible investments for money market funds. If the structure
does not perform as intended, adverse tax or investment consequences may
result.
MUNICIPAL SECURITIES are issued to raise money for a variety of public or
private purposes, including general financing for state and local
governments, or financing for specific projects or public facilities. They
may be issued in anticipation of future revenues, and may be backed by the
full taxing power of a municipality, the revenues from a specific project,
or the credit of a private organization. A security's credit may be
enhanced by a bank, insurance company, or other entity. The value of some
or all municipal securities may be affected by uncertainties in the
municipal market related to legislation or litigation involving the
taxation of municipal securities or the rights of municipal securities
holders. The fund may own a municipal security directly or through a
participation interest.
VARIABLE AND FLOATING RATE SECURITIES have interest rates that are
periodically adjusted either at specific intervals or whenever a benchmark
rate changes. These interest rate adjustments are designed to help
stabilize the security's price.
MUNICIPAL LEASE OBLIGATIONS are used by municipalities to acquire land,
equipment, or facilities. If the municipality stops making payments or
transfers its obligations to a private entity, the obligation could lose
value or become taxable.
OTHER MUNICIPAL SECURITIES may include obligations of U.S. territories and
possessions such as Guam, the Virgin Islands, and Puerto Rico, and their
political subdivisions and public corporations.
PUT FEATURES entitle the holder to put (sell back) a security to the issuer
or a financial intermediary. In exchange for this benefit, the fund may pay
periodic fees or accept a lower interest rate. The credit quality of the
investment may be affected by the creditworthiness of the put provider.
Demand features, standby commitments, and tender options are types of put
features.
PRIVATE ENTITIES may be involved in some municipal securities. For example,
industrial revenue bonds are backed by private entities, and resource
recovery bonds often involve private corporations. The viability of a
project or tax incentives could affect the value and credit quality of
these securities.
ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined by
FMR, under the supervision of the Board of Trustees, to be illiquid, which
means that they may be difficult to sell promptly at an acceptable price.
The sale of some illiquid securities, and some other securities, may be
subject to legal restrictions. Difficulty in selling securities may result
in a loss or may be costly to the fund.
RESTRICTIONS. The fund may not purchase a security if, as a result, more
than 10% of its net assets would be invested in illiquid securities.
WHEN-ISSUED AND DELAYED-DELIVERY TRANSACTIONS are trading practices in
which payment and delivery for the securities take place at a future date.
The market value of a security could change during this period, which could
affect the market value of the fund's assets.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce the
risks of investing. This may include limiting the amount of money invested
in any one issuer or, on a broader scale, in any one industry or type of
project. Economic, business, or political changes can affect all securities
of a similar type.
RESTRICTIONS: With respect to 75% of its total assets, the fund may not
purchase a security if, as a result, more than 5% would be invested in the
securities of any issuer. These limitations do not apply to U.S.
Government securities. The fund may invest more than 25% of its total
assets in tax-free securities that finance similar types of projects.
BORROWING. The fund may borrow from banks or from other funds advised by
FMR, or through reverse repurchase agreements, and may make additional
investments while borrowings are outstanding.
RESTRICTIONS: The fund may borrow only for temporary or emergency purposes,
but not in an amount exceeding 331/3% of its total assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages are
fundamental, that is, subject to change only by shareholder approval. The
following paragraphs restate all those that are fundamental. All policies
stated throughout this prospectus, other than those identified in the
following paragraphs, can be changed without shareholder approval.
The fund seeks to provide individual and institutional investors with as
high a level of current income, exempt from federal income taxes, as is
consistent with a portfolio of high quality, short-term municipal
obligations selected on the basis of liquidity and stability of principal.
Under normal conditions, the fund will invest so that at least 80% of its
income distribution is free from federal income tax.
With respect to 75% of its total assets, the fund may not purchase a
security if, as a result, more than 5% would be invested in the securities
of any issuer.
The fund may borrow only for temporary or emergency purposes, but not in an
amount exceeding 33 1/3% of its total assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the fund pays fees related to its daily operations.
Expenses paid out of the fund's assets are reflected in its share price or
dividends; they are neither billed directly to shareholders nor deducted
from shareholder accounts.
The fund pays a MANAGEMENT FEE to FMR for managing its investments and
business affairs. FMR in turn pays fees to an affiliate who provides
assistance with these services. The fund also pays OTHER EXPENSES, which
are explained below.
MANAGEMENT FEE
The management fee is calculated and paid to FMR every month. The fund
pays the fee at the annual rate of % of its average net assets.
FMR HAS A SUB-ADVISORY AGREEMENT with FMR Texas, which has primary
responsibility for providing investment management for the fund, while FMR
retains responsibility for providing the fund with other management
services. For these services FMR pays FMR Texas 50% of its management fee
(before expense reimbursements but after payments made by FMR pursuant to
the fund's Distribution and Service Plan). FMR paid FMR Texas __% of the
fund's average net assets for fiscal 1995.
OTHER EXPENSES
While the management fee is a significant component of the fund's annual
operating costs, the fund has other expenses as well.
UMB has entered into sub-arrangements with FIIOC and Fidelity Service
Company (FSC). FIIOC performs transfer agency, dividend disbursing and
shareholder services for the fund. UMB has also entered into
sub-arrangements pursuant to which FSC calculates the NAV and dividends for
the fund, and maintains the fund's general accounting records. All of the
fees are paid to FIIOC and FSC by UMB, which is reimbursed by the fund, as
appropriate for such payments.
In fiscal 1995, fees paid by UMB to FIIOC and FSC on behalf of the fund
were equal to __% and __%, respectively, of the fund's average net assets.
The fund has adopted a DISTRIBUTION AND SERVICE PLAN. The plan recognizes
that FMR may use its resources, including management fees, to pay expenses
associated with the sale of fund shares. The Board of Trustees has
authorized FMR to pay FDC a distribution fee from its management fee
revenue, past profits or other resources at an annual rate up to 0.38% of
the fund's average net assets. FMR currently pays FDC monthly at an annual
rate of __% of the fund's average net assets determined at the close of
business on each day throughout the month.
The fund pays other expenses, such as legal, audit, and custodian fees; in
some instances, proxy solicitation costs; and the compensation of trustees
who are not affiliated with Fidelity.
YOUR ACCOUNT
TYPES OF ACCOUNTS
If you invest through an investment professional, read your investment
professional's program materials in conjunction with this prospectus for
additional service features or fees that may apply. Certain features of
the fund, such as minimum initial or subsequent investment amounts, may be
modified in these programs, and administrative charges may be imposed for
the services rendered.
The different ways to set up (register) your account with Fidelity are
listed below.
WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
Individual accounts are owned by one person. Joint accounts can have two or
more owners (tenants).
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
These custodial accounts provide a way to give money to a child and obtain
tax benefits. An individual can give up to $10,000 a year per child without
paying federal gift tax. Depending on state laws, you can set up a
custodial account under the Uniform Gifts to Minors Act (UGMA) or the
Uniform Transfers to Minors Act (UTMA). Contact your investment
professional.
TRUST
FOR MONEY BEING INVESTED BY A TRUST
The trust must be established before an account can be opened.
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR OTHER
GROUPS
Contact your investment professional.
HOW TO BUY SHARES
THE FUND'S SHARE PRICE, called NAV, is calculated every business day. The
fund is managed to keep its share price stable at $1.00.
Shares are purchased at the next NAV calculated after your order is
received and accepted by the transfer agent. NAV is normally calculated at
12:00 p.m. and 4:00 p.m. Eastern time.
Share certificates are not available for Daily Tax-Exempt Money Fund
shares.
IF YOU ARE NEW TO FIDELITY, an initial investment must be preceded or
accompanied by a completed, signed application, which should be forwarded
to:
Fidelity Client Services
c/o Daily Tax-Exempt Money Fund
FIIOC
P.O. Box 1182
Boston, MA 02103-1182
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can:
(small solid bullet) Mail an account application with a check,
(small solid bullet) Place a purchase order and wire money into your
account,
(small solid bullet) Open an account by exchanging from Class A of a
Fidelity Advisor fund or from another Fidelity fund, or
(small solid bullet) Contact your investment professional.
INVESTMENTS IN THE FUND MUST BE MADE USING THE FEDERAL RESERVE WIRE SYSTEM.
BY CHECK. You or your investment professional must send a check payable to
the fund. When making subsequent investments by check, please write your
fund account number on the check. All investments by check should be sent
to the address above.
BY TELEPHONE. For wiring information and instructions, you should call the
investment professional through which you trade or if you trade directly
through Fidelity, call Fidelity Client Services. There is no fee imposed by
the fund for wire purchases. However, if you buy shares through an
investment professional, the investment professional may impose a fee for
wire purchases.
Fidelity Client Services:
Nationwide 1-800-843-3001
In order to receive same-day acceptance of your investment, you must call
Fidelity Client Services and place your order between 8:30 a.m. and 4:00
p.m. Eastern time on days the fund is open for business.
If Fidelity Client Services is not advised of your purchase prior to the
stated cutoff time, your purchase will not be accepted by the transfer
agent. All wires must be received by the transfer agent in good order at
the fund's designated wire bank before the close of the Federal Reserve
Wire System on that day.
You are advised to wire funds as early in the day as possible, and to
provide advance notice to Fidelity Client Services for large transactions.
You will earn dividends on the day of your investment, provided (i) you
telephone Fidelity Client Services and place your trade between 8:30 a.m.
and 12:00 p.m. Eastern time on days the fund is open for business, and (ii)
the fund's designated wire bank receives the wire before the close of the
Federal Reserve Wire System on the day your purchase order is accepted by
the transfer agent.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $1,000
TO ADD TO AN ACCOUNT $250
MINIMUM BALANCE $500
HOW TO SELL SHARES
You can arrange to take money out of your fund account at any time by
selling (redeeming) some or all of your shares. Your shares will be sold at
the next NAV calculated after your order is received and accepted by the
transfer agent. NAV is normally calculated at 12:00 p.m. and 4:00 p.m.
Eastern time.
TO SELL SHARES IN AN ACCOUNT, you may use any of the methods described
below.
IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR SHARES, leave at least $500
worth of shares in the account to keep it open.
BY TELEPHONE. Redemption requests may be made by calling Fidelity Client
Services at 1-800-843-3001.
BY MAIL. Send a letter of instruction with signature guarantee(s) to the
address given above. The letter should specify the name of the fund, the
number of shares to be sold, name, account numbers, address, and should
include the additional requirements listed below that apply to each
particular account.
BY WIRE. Redemptions may be made by calling Fidelity Client Services at
1-800-843-3001.
You may change the bank account(s) designated to receive redemption
proceeds at any time prior to making a redemption request. You should send
a letter of instruction, including a signature guarantee, to Fidelity
Client Services at the address shown on page 10.
There is no fee imposed by the fund for wiring of redemption proceeds.
However, if you buy shares through an investment professional, the
investment professional may impose a fee for wire redemptions.
You should be able to obtain a signature guarantee from a bank, broker,
dealer, credit union (if authorized under state law), securities exchange
or association, clearing agency, or savings association. A notary public
cannot provide a signature guarantee.
Redemption proceeds will be wired via the Federal Reserve Wire System to
your bank account of record. If your redemption request is received by
telephone between 8:30 a.m. and 12:00 p.m. Eastern time; redemption
proceeds will normally be wired on the same day your redemption request is
received by the transfer agent. If your redemption request is received by
the transfer agent after 12:00 p.m. Eastern time, redemption proceeds will
normally be wired on the following business day.
The fund reserves the right to take up to seven days to pay you if making
immediate payment would adversely affect the fund.
<TABLE>
<CAPTION>
<S> <C>
TYPE OF REGISTRATION REQUIREMENTS
Individual, Joint Tenants, Letter of instruction signed by all person(s)
Sole Proprietorship, Custodial, (Uniform Gifts or required to sign for the account exactly as it is
Transfers to Minors Act), General Partners registered, accompanied by signature
guarantee(s).
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Corporations, Associations Letter of instruction and a corporate resolution,
signed by person(s) required to sign for the
account accompanied by signature guarantee(s).
Trusts A letter of instruction signed by the Trustee(s) with
signature guarantee(s). (If the Trustee's name is
not registered on the account, also provide a copy
of the trust document, certified within the last 60
days.)
</TABLE>
If you do not fall into any of these registration categories (i.e.,
executors, administrators, conservators, or guardians) you should call
Fidelity Client Services at 1-800-843-3001 for further instructions.
CHECKWRITING
If you have a checkbook for your account, you may write an unlimited number
of checks. The minimum amount for a check is $500. Do not, however, try to
close out your account by check.
INVESTOR SERVICES
Fidelity provides a variety of services to help you manage your account.
INFORMATION SERVICES
FIDELITY'S TELEPHONE REPRESENTATIVES are available Monday through Friday
8:30 a.m. to 5:00 p.m. Eastern time.
STATEMENTS AND REPORTS that the transfer agent sends to you include the
following:
(small solid bullet) Confirmation statements (after every transaction that
affects your account balance or your account registration)
(small solid bullet) Account statements (monthly)
(small solid bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports will be mailed,
even if you have more than one account in the fund. Contact your investment
professional, or call Fidelity Client Services at 1-800-843-3001 if you
need additional copies of financial reports or historical account
information.
SUB-ACCOUNTING AND SPECIAL SERVICES. Special processing has been arranged
with FIIOC for institutions that wish to open multiple accounts (a master
account and sub-accounts). You may be required to enter into a separate
agreement with FIIOC. Charges for these services, if any, will be
determined based on the level of services to be rendered.
FIDELITY ADVISOR SYSTEMATIC EXCHANGE PROGRAM
TO MOVE MONEY FROM A FIDELITY MONEY MARKET FUND TO A FIDELITY ADVISOR FUND
<TABLE>
<CAPTION>
<S> <C> <C>
MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Monthly, quarterly, (small solid bullet) To establish, call your investment professional after
semi-annually, or both accounts are opened.
annually (small solid bullet) To change the amount or frequency of your
investment, contact your investment professional
directly or, if you purchased your shares through a
Broker-Dealer or Insurance Representative, call
1-800-522-7297. If you purchased your shares
through a Bank Representative, call
1-800-843-3001.
(small solid bullet) The account from which the exchanges are to be
processed must have a minimum balance of
$10,000. The account into which the exchange is
being processed must have a minimum of $1,000.
(small solid bullet) Both accounts must have the same registrations
and taxpayer ID numbers.
(small solid bullet) Call at least 2 business days prior to your next
scheduled exchange date.
</TABLE>
[A] BECAUSE THEIR SHARE PRICES FLUCTUATE, THESE FUNDS MAY NOT BE
APPROPRIATE CHOICES FOR DIRECT DEPOSIT OF YOUR ENTIRE CHECK.
SHAREHOLDER AND ACCOUNT POLICIES
DIVIDENDS, CAPITAL GAINS, AND TAXES
The fund distributes substantially all of its net investment income and
capital gains, if any, to shareholders each year. Income dividends are
declared daily and paid monthly.
Income dividends declared are accrued daily throughout the month and are
normally distributed on the first business day of the following month.
Based on prior approval of the fund, dividends relating to shares redeemed
during the month can be distributed on the day of redemption. The fund
reserves the right to limit this service. Shareholders may elect to
receive dividend distributions in cash.
DISTRIBUTION OPTIONS
When you open an account, specify on your account application how you want
to receive your distributions. The fund offers two options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions, if
any, will be automatically reinvested in additional shares of the fund. If
you do not indicate a choice on your application, you will be assigned this
option.
2. CASH OPTION. You will be sent a check for your dividend and capital gain
distributions, if any.
Dividends will be reinvested at the fund's NAV on the last day of the
month. Capital gain distributions, if any, will be reinvested at the NAV as
of the record date of the distribution. The mailing of distribution checks
will begin within seven days.
TAXES
As with any investment, you should consider how an investment in a tax-free
fund could affect you. Below are some of the fund's tax implications.
TAXES ON DISTRIBUTIONS. Interest income that the fund earns is distributed
to shareholders as income dividends. Interest that is federally tax-free
remains tax-free when it is distributed.
However, gain on the sale of tax-free bonds results in taxable
distributions. Short-term capital gains and a portion of the gain on bonds
purchased at a discount are taxed as dividends. Long-term capital gain
distributions are taxed as long-term capital gains. These distributions are
taxable when they are paid, whether you take them in cash or reinvest them.
However, distributions declared in December and paid in January are taxable
as if they were paid on December 31.
Every January, the transfer agent will send you and the IRS a statement
showing the taxable distributions paid to you in the previous year.
A portion of the fund's dividends may be free from state or local taxes.
Income from investments in your state are often tax-free to you. Each year,
the transfer agent will send you a breakdown of your fund's income from
each state to help you calculate your taxes.
During fiscal 1995, __% of the fund's income dividends was free from
federal income tax .
TRANSACTION DETAILS
THE FUND IS OPEN FOR BUSINESS and its NAV is normally calculated each day
that both the Federal Reserve Bank of Kansas City (Kansas City Fed) and the
New York Stock Exchange (NYSE) are open. The following holiday closings
have been scheduled for 1996: New Year's Day, Washington's Birthday, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and
Christmas Day. Although FMR expects the same holiday schedule to be
observed in the future, the Kansas City Fed or the NYSE may modify its
holiday schedule at any time. On any day that the Kansas City Fed or the
NYSE closes early, the principal government securities markets close early
(such as on days in advance of holidays generally observed by participants
in such markets), 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 Kansas City Fed or the NYSE is closed, the fund's 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.
THE FUND'S NAV is the value of a single share. The NAV is computed by
adding the value of the fund's investments, cash, and other assets,
subtracting its liabilities, and dividing the result by the number of
shares outstanding. The fund values its portfolio securities on the basis
of amortized cost. This method minimizes the effect of changes in a
security's market value and helps the fund maintain a stable $1.00 share
price.
THE FUND'S OFFERING PRICE (price to buy one share) and REDEMPTION PRICE
(price to sell one share) are its NAV.
WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to certify that
your social security or taxpayer identification number is correct and that
you are not subject to 31% backup withholding for failing to report income
to the IRS. If you violate IRS regulations, the IRS can require the fund to
withhold 31% of your taxable distributions and redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Fidelity and the transfer
agent may only be liable for losses resulting from unauthorized
transactions if they do not follow reasonable procedures designed to verify
the identity of the caller. Fidelity and the transfer agent will request
personalized security codes or other information, and may also record
calls. You should verify the accuracy of the confirmation statements
immediately after receipt. If you do not want the ability to redeem and
exchange by telephone, call the transfer agent for instructions. Additional
documentation may be required from corporations, associations and certain
fiduciaries.
IF YOU ARE UNABLE TO REACH THE TRANSFER AGENT BY PHONE (for example, during
periods of unusual market activity), consider placing your order by mail.
THE FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period
of time. The fund also reserves the right to reject any specific purchase
order, including certain purchases by exchange. See "Exchange Restrictions"
on page 16. Purchase orders may be refused if, in FMR's opinion, they would
disrupt management of the fund.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your shares will be purchased at the
next NAV calculated after your order is received and accepted by the
transfer agent. Note the following:
(small solid bullet) All of your purchases must be made in U.S. dollars and
checks must be drawn on U.S. banks.
(small solid bullet) Fidelity does not accept cash.
(small solid bullet) When making a purchase with more than one check, each
check must have a value of at least $50.
(small solid bullet) The fund reserves the right to limit the number of
checks processed at one time.
(small solid bullet) If your check does not clear, your purchase will be
canceled and you could be liable for any losses or fees the fund or the
transfer agent has incurred.
Net interest income for dividend purposes is determined by FSC on a daily
basis and shall be payable to shareholders of record at the time of its
declaration (including, for this purpose, holders of shares purchased, but
excluding holders of shares redeemed, on that day).
Shareholders of record as of 12:00 p.m. Eastern time will be entitled to
dividends declared that day.
Shares purchased after 12:00 p.m. Eastern time (including all purchases by
check) begin to earn income dividends on the following business day.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the
next NAV calculated after your order is received and accepted by the
transfer agent. Note the following:
(small solid bullet) Shares redeemed before 12:00 p.m. Eastern time do not
receive the dividend declared on the day of redemption. Shares redeemed
after 12:00 p.m. Eastern time do receive the dividends declared on the day
of redemption.
(small solid bullet) The fund may withhold redemption proceeds until it is
reasonably assured that investments credited to your account have been
received and collected.
(small solid bullet) If you sell shares by writing a check and the amount
of the check is greater than the value of your account, your check will be
returned to you and you may be subject to additional charges.
When the NYSE or the Kansas City Fed 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, the fund may suspend redemption or postpone payment
dates. In cases of suspension of the right of redemption, the request for
redemption may either be withdrawn or payment may be made based on the NAV
next determined after the termination of the suspension.
IF YOUR ACCOUNT BALANCE FALLS BELOW $500 due to redemption, the account may
be closed and the proceeds may be mailed to your address of record. You
will be given 30 days' notice that your account will be closed unless it is
increased to the minimum.
THE TRANSFER AGENT MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
EXCHANGE RESTRICTIONS
As a shareholder you have the privilege of exchanging shares of the fund
for Class A shares of a Fidelity Advisor fund or shares of other Fidelity
funds.
An exchange involves the redemption of all or a portion of the shares of
one fund and the purchase of shares of another fund.
BY TELEPHONE. Exchanges may be requested on any day the fund is open for
business by calling Fidelity Client Services at 1-800-843-3001 between 8:30
am and 12:00 pm Eastern time.
BY MAIL. You may exchange shares on any business day by submitting written
instructions with an authorized signature which is on file for that
account. Written requests for exchanges should contain the fund name,
account number, the number of shares to be redeemed, and the name of the
fund to be purchased. Written requests for exchange should be mailed to
Fidelity Client Services at the address on page 10.
WHEN YOU PLACE AN ORDER TO EXCHANGE SHARES, shares will be redeemed at the
next determined NAV after your order is received and accepted by the
transfer agent. Shares of the fund to be acquired will be purchased at its
next determined NAV after redemption proceeds are made available. You
should note that, under certain circumstances, the fund may take up to
seven days to make redemption proceeds available for the exchange purchase
of shares of another fund. In addition, please note the following:
(small solid bullet) Exchanges will not be permitted until a completed and
signed account application is on file.
(small solid bullet) The fund you are exchanging into must be registered
for sale in your state.
(small solid bullet) You may only exchange between accounts that are
registered in the same name, address, and taxpayer identification number.
(small solid bullet) Before exchanging into a fund, read its prospectus.
(small solid bullet) You will earn dividends in the acquired fund in
accordance with the fund's customary policy, normally on the day the
exchange request is received.
(small solid bullet) If you exchange into a fund with a sales charge, you
pay the percentage difference between that fund's sales charge and any
sales charge you have already paid in connection with the shares you are
exchanging.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Currently, there is no limit on the number of
exchanges out of the fund, nor are there any administrative or redemption
fees applicable to exchanges out of the fund.
(small solid bullet) The fund reserves the right to refuse exchange
purchases by any person or group if, in FMR's judgment, the fund would be
unable to invest the money effectively in accordance with its investment
objective and policies, or would otherwise potentially be adversely
affected.
(small solid bullet) Your exchanges may be restricted or refused if 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 the fund.
Although the fund will attempt to give you prior notice whenever it is
reasonably able to do so, it may impose these restrictions at any time. The
fund reserves the right to terminate or modify the exchange privilege in
the future.
OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may impose
administrative fees of up to $7.50 and redemption fees of up to 1.50% on
exchanges. Check each fund's prospectus for details.
No dealer, sales representative or any other person has been authorized to
give any information or to make any representations, other than those
contained in this Prospectus and in the related SAI, in connection with the
offer contained in this Prospectus. If given or made, such other
information or representations must not be relied upon as having been
authorized by the fund or FDC. This Prospectus and the related SAI do not
constitute an offer by the fund or by FDC to sell or to buy shares of the
fund to any person to whom it is unlawful to make such offer.
DAILY TAX-EXEMPT MONEY FUND:
CROSS REFERENCE SHEET
Form N-1A Item Number Statement of Additional Information Caption
10 a,b.............. Cover Page
11 ................. Table of Contents
12 ................... *
13 a,b,c.............. Investment Policies and Limitations
d.................. *
14 a,b,c................ Trustees and Officers
15 a,b,c................ Trustees and Officers, FMR
16 a(i) ................ FMR
a(ii)................ Trustees and Officers
a(iii)................ Management Contract
c.................. *
d.................. Management Contract
e.................. *
f.................. Distribution and Service Plan
g.................. *
h.................. Description of the Fund
i.................. Contract with FMR Affiliates
17 a.................. Portfolio Transactions
b................. *
c,d............... Portfolio Transactions
18 a.................. Description of the Fund
b................... *
19 a.................. Additional Purchase, Exchange, and Redemption
Information
b.................. Valuation
c.................... *
20 ................... Distributions and Taxes
21 a(i)............ Contracts with FMR Affiliates
a(ii)......... Distribution and Service Plan
a(iii),b,c......... *
22 ................... Performance
23 ................... Financial statements for fiscal year ended October
31, 1995 will be filed by subsequent amendment.
* Not Applicable
DAILY TAX-EXEMPT MONEY FUND
STATEMENT OF ADDITIONAL INFORMATION
December 20, 1995
This Statement of Additional Information (SAI) is not a prospectus but
should be read in conjunction with the fund's current Prospectus (dated
December 20, 1995). Please retain this document for future reference. The
fund's financial statements and financial highlights, included in the
Annual Report, for the fiscal year ended October 31, 1995, are incorporated
herein by reference. To obtain an additional copy of the Prospectus or the
Annual Report, please call Fidelity Client Services at 1-800-843-3001.
TABLE OF CONTENTS PAGE
Investment Policies and Limitations 2
Portfolio Transactions 6
Valuation 7
Performance 8
Additional Purchase, Exchange and Redemption Information 11
Distributions and Taxes 11
FMR 12
Trustees and Officers 13
Management Contract 15
Contracts with FMR Affiliates 16
Distribution and Service Plan 16
Description of the Fund 17
Financial Statements 18
Appendix 18
INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
SUB-ADVISOR
FMR Texas Inc. (FMR Texas)
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
TRANSFER AGENT
UMB Bank, n.a. (UMB)
DTETX-SAI-12-95
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 asset, 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 by a "majority of the outstanding voting
securities" (as defined in the Investment Company Act of 1940 (1940 Act))
of the fund. However, except for the fundamental investment limitations
listed below, the investment policies and limitations described in this SAI
are not fundamental and may be changed without shareholder approval.
INVESTMENT LIMITATIONS OF DAILY TAX-EXEMPT MONEY FUND
THE FOLLOWING ARE DAILY TAX-EXEMPT'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. make short sales of securities;
4. purchase any securities on margin, except for such short-term credits as
are necessary for the clearance of transactions;
5. borrow money, except for temporary or emergency purposes (not for
leveraging or investment) in an amount not to exceed 33 1/3% of the value
of its total assets (including the amount borrowed) less liabilities (other
than borrowings). Any borrowings that come to exceed 33 1/3% of the fund's
assets by reason of a decline in net assets will be reduced within three
days (exclusive of Sundays and holidays) to the extent necessary to comply
with the 33 1/3% limitation;
6. underwrite any issue of securities; except to the extent that the
purchase of municipal bonds in accordance with the fund's investment
objective, policies, and restrictions, either directly from the issuer, or
from an underwriter for an issuer, may be deemed to be underwriting;
7. purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. Government or any of its agencies or
instrumentalities, or tax-exempt obligations issued or guaranteed by a U.S.
territory or possession or a state or local government, or a political
subdivision of any of the foregoing) if, as a result, more than 25% of the
fund's total assets would be invested in securities of companies whose
principal business activities are in the same industry;
8. purchase or sell real estate, but this shall not prevent the fund from
investing in municipal bonds or other obligations secured by real estate or
interests therein;
9. purchase or sell commodities or commodity (futures) contracts;
10. lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this limit
does not apply to purchases of debt securities or to repurchase agreements;
or
11. invest in oil, gas or other mineral exploration or development
programs.
12. The fund may, notwithstanding any other fundamental investment policy
or limitation, invest all of its assets in the securities of a single
open-end management investment company with substantially the same
fundamental investment objective, policies, and limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL, AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.
(i) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of the fund's fundamental investment limitation 5). 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.
(ii) 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.
(iii) The fund does not currently intend to engage in repurchase agreements
or make loans, but this limitation does not apply to purchases of debt
securities.
(iv) The fund does not currently intend to purchase or sell futures
contracts or call options. This limitation does not apply to options
attached to, or acquired or traded together with, their underlying
securities, and does not apply to securities that incorporate features
similar to options or futures contracts.
(v) The fund does not currently intend to invest in interests in real
estate investment trusts that are not readily marketable, or to invest in
interests in real estate limited partnerships that are not listed on the
New York Stock Exchange or the American Stock Exchange or traded on the
NASDAQ National market System.
(vi) 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.
(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 if those officers and Trustees of the fund 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.
(ix) The fund does not currently intend to invest all of its assets in the
securities of a single open-end management investment company with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
For the fund's policies on quality and maturity, see the section entitled
"Quality and Maturity," on page 5.
AFFILIATED BANK TRANSACTIONS. The fund may engage in transactions
with financial institutions that are, or may be considered to be,
"affiliated persons" of the fund under the 1940 Act. These transactions may
include repurchase agreements with custodian banks; short-term obligations
of, and repurchase agreements with, the 50 largest U.S. banks (measured by
deposits); municipal securities; U.S. Government securities with affiliated
financial institutions that are primary dealers in these securities;
short-term currency transactions; and short-term borrowings. In accordance
with exemptive orders issued by the Securities and Exchange Commission
(SEC), the Board of Trustees has established and periodically reviews
procedures applicable to transactions involving affiliated financial
institutions.
DELAYED-DELIVERY TRANSACTIONS. The fund may buy and sell securities
on a delayed-delivery or when-issued basis. These transactions involve a
commitment by the fund to purchase or sell specific securities at a
predetermined price or yield, with payment and delivery taking place after
the customary settlement period for that type of security. Typically, no
interest accrues to the purchaser until the security is delivered.
When purchasing securities on a delayed-delivery basis, the fund assumes
the rights and risks of ownership, including the risk of price and yield
fluctuations. Because the fund is not required to pay for securities until
the delivery date, these risks are in addition to the risks associated with
the fund's other investments. If the fund remains substantially fully
invested at a time when delayed-delivery purchases are outstanding, the
delayed-delivery purchases may result in a form of leverage. When
delayed-delivery purchases are outstanding, the fund will set aside
appropriate liquid assets in a segregated custodial account to cover its
purchase obligations. When the fund has sold a security on a
delayed-delivery basis, the fund does not participate in further gains or
losses with respect to the security. If the other party to a
delayed-delivery transaction fails to deliver or pay for the securities,
the fund could miss a favorable price or yield opportunity, or could suffer
a loss.
The fund may renegotiate delayed-delivery transactions after they are
entered into, and may sell underlying securities before they are delivered,
which may result in capital gains or losses.
FEDERALLY TAXABLE OBLIGATIONS. Under normal conditions, the fund
does not intend to invest in securities whose interest is federally
taxable. However, from time to time on a temporary basis, the fund may
invest a portion of its assets in fixed-income obligations whose interest
is subject to federal income tax.
Should the fund invest in federally taxable obligations, it would purchase
securities that, in FMR's judgment, are of high quality. These obligations
would include those issued or guaranteed by the U.S. Government or its
agencies or instrumentalities and repurchase agreements backed by such
obligations.
Proposals to restrict or eliminate the federal income tax exemption for
interest on municipal obligations are introduced before Congress from time
to time. Proposals also may be introduced before state legislatures that
would affect the state tax treatment of the fund's distributions. If such
proposals were enacted, the availability of municipal obligations and the
value of the fund's holdings would be affected and the Trustees would
reevaluate the fund's investment objective and policies.
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).
FMR may determine some restricted securities and municipal lease
obligations to be illiquid.
In the absence of market quotations, illiquid investments are valued for
purposes of monitoring amortized cost valuation 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 was invested in
illiquid securities, it would seek to take appropriate steps to protect
liquidity.
INTERFUND BORROWING PROGRAM. Pursuant to an exemptive order issued
by the SEC, the fund has received permission to lend money to, and borrow
money from, other funds advised by FMR or its affiliates, but will
participate in the interfund borrowing program only as a borrower.
Interfund borrowings normally extend overnight, but can have a maximum
duration of seven days. A fund will borrow through the program only when
the costs are equal to or lower than the costs of bank loans. 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.
MARKET DISRUPTION RISK. The value of municipal securities may be
affected by uncertainties in the municipal market related to legislation or
litigation involving the taxation of municipal securities or the rights of
municipal securities holders in the event of a bankruptcy. Municipal
bankruptcies are relatively rare, and certain provisions of the U.S.
Bankruptcy Code governing such bankruptcies are unclear and remain
untested. Further, the application of state law to municipal issuers could
produce varying results among the states or among municipal securities
issuers within a state. These legal uncertainties could affect the
municipal securities market generally, certain specific segments of the
market, or the relative credit quality of particular securities. Any of
these effects could have a significant impact on the prices of some or all
of the municipal securities held by a fund, making it more difficult for
the fund to maintain a stable NAV.
MONEY MARKET SECURITIES are high-quality, short-term obligations.
Some money market securities employ a trust or other similar structure to
modify the maturity, price characteristics, or quality of financial assets.
For example, put features can be used to modify the maturity of a security,
or interest rate adjustment features can be used to enhance price
stability. If the structure does not perform as intended, adverse tax or
investment consequences may result. Neither the Internal Revenue Service
(IRS) nor any other regulatory authority has ruled definitively on certain
legal issues presented by structured securities. Future tax or other
regulatory determinations could adversely affect the value, liquidity, or
tax treatment of the income received from these securities or the nature
and timing of distributions made by the fund.
MUNICIPAL LEASES and participation interests therein may take the
form of a lease, an installment purchase, or a conditional sale contract
and are issued by state and local governments and authorities to acquire
land or a wide variety of equipment and facilities. Generally, the fund
will not hold such obligations directly as a lessor of the property, but
will purchase a participation interest in a municipal obligation from a
bank or other third party. A participation interest gives the fund a
specified, undivided interest in the obligation in proportion to its
purchased interest in the total amount of the obligation.
Municipal leases frequently have risks distinct from those associated with
general obligation or revenue bonds. State constitutions and statutes set
forth requirements that states or municipalities must meet to incur debt.
These may include voter referenda, interest rate limits, or public sale
requirements. Leases, installment purchases, or conditional sale contracts
(which normally provide for title to the leased asset to pass to the
governmental issuer) have evolved as a means for governmental issuers to
acquire property and equipment without meeting their constitutional and
statutory requirements for the issuance of debt. Many leases and contracts
include "non-appropriation clauses" providing that the governmental issuer
has no obligation to make future payments under the lease or contract
unless money is appropriated for such purposes by the appropriate
legislative body on a yearly or other periodic basis. Non-appropriation
clauses free the issuer from debt issuance limitations.
MUNICIPAL SECTORS:
ELECTRIC UTILITIES INDUSTRY. The electric utilities industry has
been experiencing, and will continue to experience, increased competitive
pressures. Federal legislation in the last two years will open
transmission access to any electricity supplier, although it is not
presently known to what extent competition will evolve. Other risks
include: (a) the availability and cost of fuel, (b) the availability and
cost of capital, (c) the effects of conservation on energy demand, (d) the
effects of rapidly changing environmental, safety, and licensing
requirements, and other federal, state, and local regulations, (e) timely
and sufficient rate increases, and (f) opposition to nuclear power.
HEALTH CARE INDUSTRY. The health care industry is subject to
regulatory action by a number of private and governmental agencies,
including federal, state, and local governmental agencies. A major source
of revenues for the health care industry is payments from the Medicare and
Medicaid programs. As a result, the industry is sensitive to legislative
changes and reductions in governmental spending for such programs.
Numerous other factors may affect the industry, such as general and local
economic conditions; demand for services; expenses (including malpractice
insurance premiums); and competition among health care providers. In the
future, the following elements may adversely affect health care facility
operations: adoption of legislation proposing a national health insurance
program; other state or local health care reform measures; medical and
technological advances which dramatically alter the need for health
services or the way in which such services are delivered; changes in
medical coverage which alter the traditional fee-for-service revenue
stream; and efforts by employers, insurers, and governmental agencies to
reduce the costs of health insurance and health care services.
HOUSING. Housing revenue bonds are generally issued by a state,
county, city, local housing authority, or other public agency. They
generally are secured by the revenues derived from mortgages purchased with
the proceeds of the bond issue. It is extremely difficult to predict the
supply of available mortgages to be purchased with the proceeds of an issue
or the future cash flow from the underlying mortgages. Consequently, there
are risks that proceeds will exceed supply, resulting in early retirement
of bonds, or that homeowner repayments will create an irregular cash flow.
Many factors may affect the financing of multi-family housing projects,
including acceptable completion of construction, proper management,
occupancy and rent levels, economic conditions, and changes to current laws
and regulations.
EDUCATION. In general, there are two types of education-related
bonds; those issued to finance projects for public and private colleges and
universities, and those representing pooled interests in student loans.
Bonds issued to supply educational institutions with funds are subject to
the risk of unanticipated revenue decline, primarily the result of
decreasing student enrollment or decreasing state and federal funding.
Among the factors that may lead to declining or insufficient revenues are
restrictions on students' ability to pay tuition, availability of state and
federal funding, and general economic conditions. Student loan revenue
bonds are generally offered by state (or substate) authorities or
commissions and are backed by pools of student loans. Underlying student
loans may be guaranteed by state guarantee agencies and may be subject to
reimbursement by the United States Department of Education through its
guaranteed student loan program. Others may be private, uninsured loans
made to parents or students which are supported by reserves or other forms
of credit enhancement. Recoveries of principal due to loan defaults may be
applied to redemption of bonds or may be used to re-lend, depending on
program latitude and demand for loans. Cash flows supporting student loan
revenue bonds are impacted by numerous factors, including the rate of
student loan defaults, seasoning of the loan portfolio, and student
repayment deferral during periods of forbearance. Other risks associated
with student loan revenue bonds include potential changes in federal
legislation regarding student loan revenue bonds, state guarantee agency
reimbursement and continued federal interest and other program subsidiaries
currently in effect.
WATER AND SEWER. Water and sewer revenue bonds are often considered
to have relatively secure credit as a result of their issuer's importance,
monopoly status, and generally unimpeded ability to raise rates. Despite
this, lack of water supply due to insufficient rain, run-off, or snow pack
is a concern that has led to past defaults. Further, public resistance to
rate increases, costly environmental litigation, and Federal environmental
mandates are challenges faced by issuers of water and sewer bonds.
TRANSPORTATION. Transportation debt may be issued to finance the
construction of airports, toll roads, highways, or other transit
facilities. Airport bonds are dependent on the general stability of the
airline industry and on the stability of a specific carrier who uses the
airport as a hub. Air traffic generally follows broader economic trends
and is also affected by the price and availability of fuel. Toll road
bonds are also affected by the cost and availability of fuel as well as
toll levels, the presence of competing roads and the general economic
health of an area. Fuel costs and availability also affect other
transportation-related securities, as do the presence of alternate forms of
transportation, such as public transportation.
PUT FEATURES entitle the holder to sell a security back to the
issuer or a third party at any time or at specified intervals. They are
subject to the risk that the put provider is unable to honor the put
feature (purchase the security). Put providers often support their ability
to buy securities on demand by obtaining letters of credit or other
guarantees from other entities. Demand features, standby commitments, and
tender options are types of put features.
QUALITY AND MATURITY. Pursuant to procedures adopted by the Board of
Trustees, the fund may purchase only high-quality securities that FMR
believes present minimal credit risks. To be considered high-quality, a
security must be rated in accordance with applicable rules in one of the
two highest categories for short-term securities by at least two nationally
recognized rating services (or by one, if only one rating service has rated
the security); or, if unrated, judged to be of equivalent quality by FMR.
High-quality securities are divided into "first tier" and "second tier"
securities. First tier securities are those deemed to be in the highest
rating category (e.g., Standard & Poor's A-1 or SP-1), and second tier
securities are those deemed to be in the second highest rating category
(e.g., Standard & Poor's A-2 or SP-2).
The fund currently intends to limit its investments to securities with
remaining maturities of 397 days or less, and to maintain a dollar-weighted
average maturity of 90 days or less. When determining the maturity of a
security, the fund may look to an interest rate reset or demand feature.
REPURCHASE AGREEMENTS. In a repurchase agreement, the fund purchases
a security and simultaneously commits to sell that security back to the
original seller at an agreed-upon price. The resale price reflects the
purchase price plus an agreed-upon incremental amount which is unrelated to
the coupon rate or maturity of the purchased security. To protect the fund
from the risk that the original seller will not fulfill its obligation, the
securities are held in an account of the fund at a bank, marked-to-market
daily, and maintained at a value at least equal to the sale price plus the
accrued incremental amount. While it does not presently appear possible to
eliminate all risks from these transactions (particularly the possibility
that the value of the underlying security will be less than the resale
price, as well as delays and costs to the fund in connection with
bankruptcy proceedings), it is the fund's current policy to engage in
repurchase agreement transactions with parties whose creditworthiness has
been reviewed and found satisfactory by FMR.
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 it 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. However, in general, the fund anticipates holding
restricted securities to maturity or selling them in an exempt transaction.
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.
SOURCES OF CREDIT OR LIQUIDITY SUPPORT. FMR may rely on its
evaluation of the credit of a bank or another entity in determining whether
to purchase a security supported by a letter of credit guarantee, insurance
or other source of credit or liquidity. In evaluating the credit of a
foreign bank or other foreign entities, FMR will consider whether adequate
public information about the equity is available and whether the entity may
be subject to unfavorable political or economic developments, currency
controls, or other government restrictions that might affect its ability to
honor its commitment.
VARIABLE AND FLOATING RATE SECURITIES provide for periodic
adjustments of the interest rate paid on the security. Variable rate
securities provide for a specified periodic adjustment in the interest
rate, while floating rate securities have interest rates that change
whenever there is a change in a designated benchmark rate. Some variable
or floating rate securities have put features.
ZERO COUPON BONDS do not make regular 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, the fund takes into account as income a
portion of the difference between a zero coupon bond's purchase price and
its face value.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed
on behalf of the fund by FMR pursuant to authority contained in the fund's
management contract. FMR has granted investment management authority to
the sub-adviser (see the section entitled "Management Contract"), and the
sub-adviser is authorized to place orders for the purchase and sale of
portfolio securities, and will do so in accordance with the policies
described below. FMR is also responsible for the placement of transaction
orders for other investment companies and accounts for which it or its
affiliates act as investment adviser. Securities purchased and sold by the
fund generally will be traded on a net basis (i.e., without commission). In
selecting broker-dealers, subject to applicable limitations of the federal
securities laws, FMR considers various relevant factors, including, but not
limited to, the size and type of the transaction; the nature and character
of the markets for the security to be purchased or sold; the execution
efficiency, settlement capability, and financial condition of the
broker-dealer firm; the broker-dealer's execution services rendered on a
continuing basis; and the reasonableness of any commissions.
The 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; and the availability of
securities or the purchasers or sellers of securities. In addition, such
broker-dealers may furnish analyses and reports concerning issuers,
industries, securities, economic factors and trends, portfolio strategy,
and performance of accounts; effect securities transactions, and perform
functions incidental thereto (such as clearance and settlement). FMR
maintains a listing of broker-dealers who provide such services on a
regular basis. However, as many transactions on behalf of the money market
fund are placed with broker-dealers (including broker-dealers on the list)
without regard to the furnishing of such services, it is not possible to
estimate the proportion of such transactions directed to such
broker-dealers solely because such services were provided. The selection of
such broker-dealers generally is made by FMR (to the extent possible
consistent with execution considerations) based upon the quality of
research and execution services provided.
The receipt of research from broker-dealers that execute transactions on
behalf of the 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 the
additional expenses that could be incurred if FMR tried to develop
comparable information through its own efforts.
Subject to applicable limitations of the federal securities laws,
broker-dealers may receive commissions for agency transactions that are in
excess of the amount of commissions charged by other broker-dealers in
recognition of their research and execution services. In order to cause 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), a subsidiary of FMR Corp., if the commissions are fair,
reasonable, and comparable to commissions charged by non-affiliated,
qualified brokerage firms for similar services.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members of
national securities exchanges from executing exchange transactions for
accounts which they or their affiliates manage, unless certain requirements
are satisfied. Pursuant to such requirements, the Board of Trustees has
authorized FBSI to execute portfolio transactions on national securities
exchanges in accordance with approved procedures and applicable SEC rules.
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 fiscal 1995, 1994, and 1993, the fund paid no brokerage commissions.
During fiscal 1995, the fund paid no fees to brokerage firms that provided
research.
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 broker-dealer fees on the
tender of portfolio securities, but at present no other recapture
arrangements are in effect. The Trustees intend to continue to review
whether recapture opportunities are available and are legally permissible
and, if so, to determine in the exercise of their business judgment whether
it would be advisable for 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 and accounts
are managed by the same investment adviser, particularly when the same
security is suitable for the investment objective of more than one fund or
account.
When two or more funds are simultaneously engaged in the purchase or sale
of the same security, the prices and amounts are allocated in accordance
with procedures believed to be appropriate and equitable for each fund. In
some cases this system could have a detrimental effect on the price or
value of the security as far as 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
Fidelity Service Company (FSC) normally determines the fund's NAV at
12:00 p.m. and 4:00 p.m. Eastern time. The valuation of portfolio
securities is determined as of these times for the purpose of computing the
fund's NAV.
Portfolio securities and other assets are valued on the basis of amortized
cost. This technique involves initially valuing an instrument at its cost
as adjusted for amortization of premium or accretion of discount rather
than its current market value. The amortized cost value of an instrument
may be higher or lower than the price the fund would receive if it sold the
instrument.
During periods of declining interest rates, the fund's yield based on
amortized cost valuation may be higher than would result if the fund used
market valuations to determine its NAV. The converse would apply during
periods of rising interest rates.
Valuing the fund's investments on the basis of amortized cost and use of
the term "money market fund" are permitted pursuant to Rule 2a-7 under the
1940 Act. The fund must adhere to certain conditions under Rule 2a-7, as
summarized in the section entitled "Quality and Maturity" on page 5.
The Board of Trustees oversees FMR's adherence to the provisions of Rule
2a-7 and has established procedures designed to stabilize the fund's NAV at
$1.00. At such intervals as they deem appropriate, the Trustees consider
the extent to which NAV calculated by using market valuations would deviate
from $1.00 per share. If the Trustees believe that a deviation from the
fund's amortized cost per share may result in material dilution or other
unfair results to shareholders, the Trustees have agreed to take such
corrective action, if any, as they deem appropriate to eliminate or reduce,
to the extent reasonably practicable, the dilution or unfair results. Such
corrective action could include selling portfolio instruments prior to
maturity to realize capital gains or losses or to shorten average portfolio
maturity; withholding dividends; redeeming shares in kind; establishing NAV
by using available market quotations; and such other measures as the
Trustees may deem appropriate.
PERFORMANCE
The fund may quote performance in various ways. All performance
information supplied by the fund in advertising is historical and is not
intended to indicate future returns. The fund's yield and total return
fluctuate in response to market conditions and other factors.
YIELD CALCULATIONS. To compute the fund's yield for a period, the
net change in value of a hypothetical account containing one share reflects
the value of additional shares purchased with dividends from the one
original share and dividends declared on both the original share and any
additional shares. The net change is then divided by the value of the
account at the beginning of the period to obtain a base period return. This
base period return is annualized to obtain a current annualized yield. The
fund also may calculate an effective yield by compounding the base period
return over a one-year period. In addition to the current yield, the fund
may quote yields in advertising based on any historical seven-day period.
Yields for the fund are calculated on the same basis as other money market
funds, as required by applicable regulations.
Yield information my be useful in reviewing the fund's performance and in
providing a basis for comparison with other investment alternatives.
However, the fund's yield fluctuates, unlike investments that pay a fixed
interest rate over a stated period of time. When comparing investment
alternatives, investors should also note the quality and maturity of the
portfolio securities of respective investment companies they have chosen to
consider.
Investors should recognize that in periods of declining interest rates the
fund's yield will tend to be somewhat higher than prevailing market rates,
and in periods of rising interest rates the fund's yield will tend to be
somewhat lower. Also, when interest rates are falling, the inflow of net
new money to the fund from the continuous sale of its shares will likely be
invested in instruments producing lower yields than the balance of the
fund's holdings, thereby reducing the fund's current yield. In periods of
rising interest rates, the opposite can be expected to occur.
The fund's tax-equivalent yield is the rate an investor would have to earn
from a fully taxable investment before taxes to equal the fund's tax-free
yield. Tax-equivalent yields are calculated by dividing the fund's yield by
the result of one minus a stated federal or combined federal and state tax
rate. If only a portion of the fund's yield is tax-exempt, only that
portion is adjusted in the calculation.
The following table shows the effect of a shareholder's tax status on
effective yield under federal income tax laws for 1996. It shows the
approximate yield a taxable security must provide at various income
brackets to produce after-tax yields equivalent to those of hypothetical
tax-exempt obligations yielding from ___% to ___%. Of course, no assurance
can be given that the fund will achieve any specific tax-exempt yield.
While the fund invests principally in obligations whose interest is exempt
from federal income tax, other income received by the fund may be
taxable.
1996 TAX RATES AND TAX-EQUIVALENT YIELDS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Federal If individual tax-exempt yield is:
Taxable Income* Tax % % % % % % % % %
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Single Return Joint Return Bracket** Then taxable-equivalent yield is
</TABLE>
$ $ % % % % % % % % %
* Net amount subject to federal income tax after deductions and exemptions.
Assumes ordinary income only.
** Excludes the impact of the phaseout of personal exemptions, limitations
on itemized deductions, and other credits, exclusions, and adjustments
which may increase a taxpayer's marginal tax rate. An increase in a
shareholder's marginal tax rate would increase that shareholder's
tax-equivalent yield.
The fund may invest a portion of its assets in obligations that are subject
to federal income tax. When the fund invests in these obligations, its
tax-equivalent yields will be lower. In the table above, tax-equivalent
yields are calculated assuming investments are 100% federally tax-free.
TOTAL RETURN CALCULATIONS. Total returns quoted in advertising
reflect all aspects of the fund's return, including the effect of
reinvesting dividends and capital gain distributions, and any change in the
fund's NAV over a stated period. Average annual total returns are
calculated by determining the growth or decline in value of a hypothetical
historical investment in the fund over a stated period, and then
calculating the annually compounded percentage rate that would have
produced the same result if the rate of growth or decline in value had been
constant over the period. For example, a cumulative total return of 100%
over ten years would produce an average annual total return of 7.18%, which
is the steady annual rate of return that would equal 100% growth on a
compounded basis in ten years. While average annual total returns are a
convenient means of comparing investment alternatives, investors should
realize that the fund's performance is not constant over time, but changes
from year to year, and that average annual total returns represent averaged
figures as opposed to the actual year-to-year performance of the fund.
In addition to average annual total returns, the fund may quote unaveraged
or cumulative total returns reflecting the simple change in value of an
investment over a stated period. Average annual and cumulative total
returns may be quoted as a percentage or as a dollar amount, and may be
calculated for a single investment, a series of investments, or a series of
redemptions, over any time period. Total returns may be broken down into
their components of income and capital (including capital gains and changes
in share price) in order to illustrate the relationship of these factors
and their contributions to total return. Total returns may be quoted on a
before-tax or after-tax basis. Total returns, yields, and other performance
information may be quoted numerically or in a table, graph, or similar
illustration.
HISTORICAL FUND RESULTS. The following table shows the fund's 7-day
yields, tax-equivalent yields, and total returns for the period ended
October 31, 1995
The tax-equivalent yield is based on a __% federal income tax rate.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Average Annual Total Returns Cumulative Total Returns
</TABLE>
Thirty-/Se Tax- One Five Ten One Five Ten
ven-Day Equivalent Year Years Years Year Years Years
Yield Yield
% % % % % % % %
Note: If FMR had not reimbursed certain fund expenses during these
periods, the fund's yield would have been ___% and total returns would have
been lower.
The following table shows the income and capital elements of the fund's
cumulative total return. The table compares the fund's return to the record
of the Standard & Poor's Composite Index of 500 Stocks (S&P 500), the Dow
Jones Industrial Average (DJIA), and the cost of living (measured by the
Consumer Price Index, or CPI) over the same period. The CPI information is
as of the month end closest to the initial investment date for the fund.
The S&P 500 and DJIA comparisons are provided to show how the fund's total
return compared to the record of a broad average of common stocks and a
narrower set of stocks of major industrial companies, respectively, over
the same period. Of course, since the fund invests in short-term
fixed-income securities, common stocks represent a different type of
investment from the fund. Common stocks generally offer greater growth
potential than the fund, but generally experience greater price volatility,
which means greater potential for loss. In addition, common stocks
generally provide lower income than a fixed-income investment such as the
fund. Figures for the S&P 500 and DJIA are based on the prices of unmanaged
groups of stocks and, unlike the fund's returns, do not include the effect
of paying brokerage commissions or other costs of investing.
During the ten year period ended October 31, 1995, a hypothetical $10,000
investment in Daily Tax-Exempt Money Fund would have grown to $ ,
assuming all distributions were reinvested. This was a period of
fluctuating interest rates and the figures below should not be considered
representative of the dividend income or capital gain or loss that could be
realized from an investment in the fund today.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
INDICES
Value of
Value of Value of Reinvested
Year Initial Reinvested Capital
Ended $10,000 Dividend Gain Total S&P Cost of
10/31 Investment Distributions Distributions Value 500 DJIA Living
</TABLE>
1986 $10,000 $ $ 0
1987 10,000 0
1988 10,000 0
1989 10,000 0
1990 10,000 0
1991 10,000 0
1992 10,000 0
1993 10,000 0
1994 10,000 0
1995 10,000 0
Explanatory Notes: With an initial investment of $10,000 made on October
31, 1986, the net amount invested in fund shares was $10,000. The cost of
the initial investment ($10,000), together with the aggregate cost of
reinvested distributions for the period covered (their cash value at the
time they were reinvested), amounted to $ . If distributions had not
been reinvested, the amount of distributions earned from the fund over time
would have been smaller, and cash payments (dividends) for the period would
have amounted to $ . The fund did not distribute any capital gains
during the period. Tax consequences of different investments have not been
factored into the above figures.
PERFORMANCE COMPARISONS. The fund's performance may be compared to
the performance of other mutual funds in general, or to the performance of
particular types of mutual funds. These comparisons may be expressed as
mutual fund rankings prepared by Lipper Analytical Services, Inc. (Lipper),
an independent service located in Summit, New Jersey that monitors the
performance of mutual funds. Lipper generally ranks funds on the basis of
total return, assuming reinvestment of distributions, but does not take
sales charges or redemption fees into consideration, and is prepared
without regard to tax consequences. Lipper may also rank funds based on
yield. In addition to the mutual fund rankings, the fund's performance may
be compared to stock, bond, and money market mutual fund performance
indices prepared by Lipper or other organizations. When comparing these
indices, it is important to remember the risk and return characteristics of
each type of investment. For example, while stock mutual funds may offer
higher potential returns, they also carry the highest degree of share price
volatility. Likewise, money market funds may offer greater stability of
principal, but generally do not offer the higher potential returns
available from stock mutual funds.
From time to time, the fund's performance may also 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. 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.
The fund may be compared in advertising to Certificates of Deposit (CDs) or
other investments issued by banks or other depository institutions. Mutual
funds differ from bank investments in several respects. For example, the
fund may offer greater liquidity or higher potential returns than CDs, the
fund does not guarantee your principal or your return, and fund shares are
not FDIC insured.
Fidelity may provide information designed to help individuals understand
their investment goals and explore various financial strategies. Such
information may include information about current economic, market, and
political conditions; materials that describe general principles of
investing, such as asset allocation, diversification, risk tolerance, and
goal setting; questionaires designed to help create a personal financial
profile; worksheets used to project savings needs based on assumed rates of
inflation and hypothetical rates of return; and action plans offering
investment alternatives. Materials may also include discussions of
Fidelity's asset allocation funds and other Fidelity funds, products, and
services.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical
returns of the capital markets in the United States, including common
stocks, small capitalization stocks, long-term corporate bonds,
intermediate-term government bonds, long-term government bonds, Treasury
bills, the U.S. rate of inflation (based on the CPI), and combinations of
various capital markets. The performance of these capital markets is based
on the returns of different indices.
Fidelity funds may use the performance of these capital markets in order to
demonstrate general risk-versus-reward investment scenarios. Performance
comparisons may also include the value of a hypothetical investment in any
of these capital markets. The risks associated with the security types in
any capital market may or may not correspond directly to those of the
funds. Ibbotson calculates total returns in the same method as the funds.
The funds may also compare performance to that of other compilations or
indices that may be developed and made available in the future.
The fund may compare its performance or the performance of securities in
which it may invest to averages published by IBC USA (Publications), Inc.
of Ashland, Massachusetts. These averages assume reinvestment of
distributions. The IBC/Donoghue's MONEY FUND
AVERAGES(trademark)/Tax-Exempt, which is reported in the MONEY FUND
REPORT(registered trademark), covers over tax-exempt money market
funds.
In advertising materials, Fidelity may reference or discuss its products
and services, which may include other Fidelity funds; retirement investing;
brokerage products and services; model portfolios or allocations; saving
for college or other goals; charitable giving; and the Fidelity credit
card. In addition, Fidelity may quote or reprint financial or business
publications and periodicals as they relate to current economic and
political conditions, fund management, portfolio composition, investment
philosophy, investment techniques, the desirability of owning a particular
mutual fund, and Fidelity services and products. Fidelity may also reprint,
and use as advertising and sales literature, articles from Fidelity Focus,
a quarterly magazine provided free of charge to Fidelity fund shareholders.
The fund may present its fund number, Quotron(trademark) number, and CUSIP
number, and discuss or quote its current portfolio manager.
As of October 31, 1995, FMR advised over $____ billion in tax-free fund
assets, $____billion in money market fund assets, $_____billion in equity
fund assets, $____billion in international fund assets, and $____billion in
Spartan fund assets. The fund may reference the growth and variety of
money market mutual funds and the adviser's innovation and participation in
the industry. The equity funds under management figure represents the
largest amount of equity fund assets under management by a mutual fund
investment adviser in the United States, making FMR America's leading
equity (stock) fund manager. FMR, its subsidiaries, and affiliates
maintain a worldwide information and communications network for the purpose
of researching and managing investments abroad.
In addition to performance rankings, the fund may compare its total expense
ratio to the average total expense ratio of similar funds tracked by
Lipper. A fund's total expense ratio is a significant factor in comparing
bond and money market investments because of its effect on yield.
ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION
If the Trustees determine that existing conditions make cash payments
undesirable, redemption payments may be made in whole or in part in
securities or other property, valued for this purpose as they are valued in
computing the fund's NAV. Shareholders receiving securities or other
property on redemption may realize a gain or loss for tax purposes, and
will incur any costs of sale, as well as the associated inconveniences.
Pursuant to Rule 11a-3 under the 1940 Act, 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 the 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.
DISTRIBUTIONS AND TAXES
DISTRIBUTIONS. If you request to have distributions mailed to you
and the U.S. Postal Service cannot deliver your checks, or if your checks
remain uncashed for six months, Fidelity may reinvest your distributions at
the then-current NAV. All subsequent distributions will then be reinvested
until you provide Fidelity with alternate instructions.
DIVIDENDS. To the extent that the fund's income is designated as
federally tax-exempt interest, the daily dividends declared by the fund are
also federally tax-exempt. Short-term capital gains are distributed as
dividend income, but do not qualify for the dividends-received deduction.
These gains will be taxed as ordinary income. The fund will send each
shareholder a notice in January describing the tax status of dividend and
capital gain distributions (if any) for the prior year.
Shareholders are required to report tax-exempt income on their federal tax
returns. Shareholders who earn other income, such as Social Security
benefits, may be subject to federal income tax of up to 85% of such
benefits to the extent that their income, including tax-exempt income,
exceeds certain base amounts.
The fund purchases securities that are free of federal income tax based on
opinions of counsel regarding the tax status. These opinions will
generally be based on covenants by the issuers or other parties regarding
continuing compliance with federal tax requirements. If at any time the
covenants are not compiled with, distribution to shareholders of interest
on a security could become federally taxable retroactive to the date the
security was issued. For certain types of structured securities, opinions
of counsel may also be based on the effect of the structure on the federal
tax treatment of the income.
As a result of the Tax Reform Act of 1986, interest on certain "private
activity" securities is subject to the federal alternative minimum tax
(AMT), although the interest continues to be excludable from gross income
for other tax purposes. Interest from private activity securities will be
considered tax-exempt for purposes of the fund's policies of investing so
that at least 80% of its income distribution is free from federal income
tax. Interest from private activity securities is a tax preference item
for the purposes of determining whether a taxpayer is subject to the AMT
and the amount of AMT to be paid, if any. Private activity securities
issued after August 7, 1986 to benefit a private or industrial user or to
finance a private facility are affected by this rule.
A portion of the gain on bonds purchased with market discount after April
30, 1993 and short-term capital gains distributed by the fund are taxable
to shareholders as dividends, not as capital gains. Dividend distributions
resulting from a recharacterization of gain from the sale of bonds
purchased with market discount after April 30, 1993 are not considered
income for purposes of the fund's policy of investing so that at least 80%
of its income distribution is free from federal income tax. The fund may
distribute any net realized short-term capital gains and taxable market
discount once a year or more often, as necessary, to maintain its NAV at
$1.00.
It is the current position of the staff of the SEC that a fund that uses
the term "tax-exempt" in its name may not derive more than 20% of its
income from municipal obligations that pay interest that is a preference
item for purposes of the AMT. According to this position, at least 80% of
the fund's income distribution would have to be exempt from the AMT as well
as from federal income taxes.
Corporate investors should note that a tax preference item for purposes of
the corporate AMT is 75% of the amount by which adjusted current earnings
(which includes tax-exempt interest) exceeds the alternative minimum
taxable income of the corporation. If a shareholder receives an
exempt-interest dividend and sells shares at a loss after holding them for
a period of six months or less, the loss will be disallowed to the extent
of the amount of the exempt-interest dividend.
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 shareholders 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.
As of October 31, 1995, the fund had a capital loss carryforward
aggregating approximately $___. This loss carryforward, of which $___,
$___, and $___ will expire on October 31, ___, ___, and ___, respectively,
is available to offset future capital gains.
FOREIGN TAXES. Foreign governments may withhold taxes on dividends
and interest paid with respect to foreign securities. Foreign governments
may also impose taxes on other payments or gains 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 intends to qualify each year as a
"regulated investment company" for tax purposes so that it will not be
liable for federal tax on income and capital gains distributed to
shareholders. In order to qualify as a regulated investment company and
avoid being subject to federal income or excise taxes at the fund level,
the fund intends to distribute substantially all of its net investment
income and net realized capital gains within each calendar year as well as
on a fiscal year basis.
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 may be
subject to state and local taxes on fund distributions, and shares may be
subject to state and local personal property taxes. Investors should
consult their tax advisers to determine whether the fund is suitable to
their particular tax situation.
FMR
All of the stock of FMR is owned by FMR Corp., its parent organized in
1972. The voting common stock of FMR Corp. is divided into two classes.
Class B is held predominantly by members of the Edward C. Johnson 3d family
and is entitled to 49% of the vote on any matter acted upon by the voting
common stock. Class A is held predominantly by non-Johnson family member
employees of FMR Corp. and its affiliates and is entitled to 51% of the
vote on any such matter. The Johnson family group and all other Class B
shareholders have entered into a shareholders' voting agreement under which
all Class B shares will be voted in accordance with the majority vote of
Class B shares. Under the 1940 Act, control of a company is presumed where
one individual or group of individuals owns more than 25% of the voting
stock of that company. Therefore, through their ownership of voting common
stock and the execution of the shareholders' voting agreement, members of
the Johnson family may be deemed, under the 1940 Act, to form a controlling
group with respect to FMR Corp.
At present, the principal operating activities of FMR Corp. are those
conducted by three of its divisions as follows: FSC, which is the transfer
and shareholder servicing agent for certain of the funds advised by FMR;
Fidelity Investments Institutional Operations Company (FIIOC), which
performs shareholder servicing functions for institutional customers and
funds sold through intermediaries; and Fidelity Investments Retail
Marketing Company, which provides marketing services to various companies
within the Fidelity organization.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that sets forth all employees'
fiduciary responsibilities regarding the funds, establishes procedures for
personal investing and restricts certain transactions. For example, all
personal trades in most securities require pre-clearance, and participation
in initial public offerings is prohibited. In addition, restrictions on the
timing of personal investing in relation to trades by Fidelity funds and on
short-term trading have been adopted.
TRUSTEES AND OFFICERS
The Trustees and executive officers of the trust are listed below.
Except as indicated, each individual has held the office shown or other
offices in the same company for the last five years. Trustees and officers
elected or appointed to Daily Tax-Exempt Money Fund prior to the fund's
conversion from a Massachusetts business trust served in identical
capacities. All persons named as Trustees also serve in similar capacities
for other funds advised by FMR. The business address of each Trustee and
officer who is an "interested person" (as defined in the 1940 Act) is 82
Devonshire Street, Boston, Massachusetts 02109, which is also the address
of FMR. The business address of all the other Trustees is Fidelity
Investments, P.O. Box 9235, Boston, Massachusetts 02205-9235. Those
Trustees who are "interested persons" by virtue of their affiliation with
either the trust or FMR are indicated by an asterisk (*).
*EDWARD C. JOHNSON 3d (65), 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., Fidelity Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.
*J. GARY BURKHEAD (54), Trustee and Senior Vice President, is President of
FMR; and President and a Director of FMR Texas Inc., Fidelity Management &
Research (U.K.) Inc., and Fidelity Management & Research (Far East) Inc.
RALPH F. COX (63), Trustee (1991), is a consultant to Western Mining
Corporation (1994). Prior to February 1994, he was President of Greenhill
Petroleum Corporation (petroleum exploration and production, 1990). Until
March 1990, Mr. Cox was President and Chief Operating Officer of Union
Pacific Resources Company (exploration and production). He is a Director
of Sanifill Corporation (non-hazardous waste, 1993) 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 (63), 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 she previously
served as a Director of Hallmark Cards, Inc. (1985-1991) and Nabisco
Brands, Inc. In addition, she is a member of the President's Advisory
Council of The University of Vermont School of Business Administration.
RICHARD J. FLYNN (71), 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 Trustee of
College of the Holy Cross and Old Sturbridge Village, Inc, and he
previously served as a Director of Mechanics Bank (1971-1995).
E. BRADLEY JONES (67), Trustee (1990). Prior to his retirement in 1984,
Mr. Jones was Chairman and Chief Executive Officer of LTV Steel Company.
He is a Director of TRW Inc. (original equipment and replacement products),
Cleveland-Cliffs Inc (mining), Consolidated Rail Corporation, Birmingham
Steel Corporation, and RPM, Inc. (manufacturer of chemical products, 1990),
and he previously served as a Director of NACCO Industries, Inc. (mining
and marketing, 1985-1995) and Hyster-Yale Materials Handling,
Inc.(1985-1995). In addition, he serves as a Trustee of First Union Real
Estate Investments, a Trustee and member of the Executive Committee of the
Cleveland Clinic Foundation, a Trustee and member of the Executive
Committee of University School (Cleveland), and a Trustee of Cleveland
Clinic Florida.
DONALD J. KIRK (62), Trustee, is Executive-in-Residence (1995) at Columbia
University Graduate School of Business and a financial consultant. From
1987 to January 1995, Mr. Kirk was a Professor at Columbia University
Graduate School of Business. Prior to 1987, he was Chairman of the
Financial Accounting Standards Board. Mr. Kirk is a Director of General Re
Corporation (reinsurance), and he previously served as a Director of
Valuation Research Corp. (appraisals and valuations, 1993-1995). In
addition, he serves as Vice Chairman of the Board of Directors of the
National Arts Stabilization Fund, Vice Chairman of the Board of Trustees of
the Greenwich Hospital Association, and as a Member of the Public Oversight
Board of the American Institute of Certified Public Accountants' SEC
Practice Section (1995).
*PETER S. LYNCH (52), Trustee (1990) is Vice Chairman and Director of FMR
(1992). Prior to May 31, 1990, he was a Director of FMR 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) and Morrison Knudsen Corporation (engineering and
construction). In addition, he serves as a Trustee of Boston College,
Massachusetts Eye & Ear Infirmary, Historic Deerfield 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 (66), Trustee, 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), Commercial Intertech Corp. (water
treatment equipment, 1992), and Associated Estates Realty Corporation (a
real estate investment trust, 1993).
EDWARD H. MALONE (70), 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). In addition, he serves as a Trustee of
Corporate Property Investors, the EPS Foundation at Trinity College, the
Naples Philharmonic Center for the Arts, and Rensselaer Polytechnic
Institute, and he is a member of the Advisory Boards of Butler Capital
Corporation Funds and Warburg, Pincus Partnership Funds.
MARVIN L. MANN (62), 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 (67), 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., and AppleSouth,
Inc. (restaurants, 1992).
FRED L. HENNING, JR.(56), Vice President, is Vice President of Fidelity's
money market (1994) and fixed-income (1995) funds and Senior Vice President
of FMR Texas Inc.
SCOTT A. ORR, (33), Vice President (1995) is also Vice President of other
funds advised by FMR and an employee of FMR Texas, Inc.
ARTHUR S. LORING (48), Secretary, is Senior Vice President (1993) and
General Counsel of FMR, Vice President-Legal of FMR Corp., and Vice
President and Clerk of FDC.
KENNETH A. RATHGEBER (48), Treasurer (1995), is Treasurer of the Fidelity
funds and is an employee of FMR (1995). Before joining FMR, Mr. Rathgeber
was a Vice President of Goldman Sachs & Co. (1978-1995), where he served in
various positions, including Vice President of Proprietary Accounting
(1988-1992), Global Co-Controller (1992-1994), and Chief Operations Officer
of Goldman Sachs (Asia) LLC (1994-1995).
THOMAS D. MAHER (50), Assistant Vice President (1990), is Assistant Vice
President of Fidelity's money market funds and Vice President and Associate
General Counsel of FMR Texas Inc. (1990). Prior to 1990, Mr. Maher was an
employee of FMR.
JOHN H. COSTELLO (49), Assistant Treasurer, is an employee of FMR.
LEONARD M. RUSH (49), Assistant Treasurer (1994), is an employee of FMR
(1994). Prior to becoming Assistant Treasurer of the Fidelity funds, Mr.
Rush was Chief Compliance Officer of FMR Corp. (1993-1994); Chief Financial
Officer of Fidelity Brokerage Services, Inc. (1990-1993); and Vice
President, Assistant Controller, and Director of the Accounting Department
- - First Boston Corp. (1986-1990).
The following table sets forth information describing the compensation of
each current Trustee of the fund for his or her services as trustee for the
fiscal year ended October 31, 1995.
COMPENSATION TABLE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Trustees Aggregate Pension or Estimated Annual Total
Compensation Retirement Benefits Upon Compensation
from Benefits Accrued Retirement from from the Fund
the Fund as Part of Fund the Fund Complex*
Expenses from the Complex*
Fund Complex*
J. Gary Burkhead ** $ 0 $ 0 $ 0 $ 0
Ralph F. Cox 5,200 52,000 125,000
Phyllis Burke Davis 5,200 52,000 122,000
Richard J. Flynn 0 52,000 154,500
Edward C. Johnson 3d ** 0 0 0 0
E. Bradley Jones 5,200 49,400 123,500
Donald J. Kirk 5,200 52,000 125,000
Peter S. Lynch ** 0 0 0 0
Gerald C. McDonough 5,200 52,000 125,000
Edward H. Malone 5,200 44,200 128,000
Marvin L. Mann 5,200 52,000 125,000
Thomas R. Williams 5,200 52,000 126,500
</TABLE>
* Information is as of December 31, 1994 for 206 funds in the complex.
** Interested trustees of the fund are compensated by FMR.
Under a retirement program adopted in July 1988, the non-interested
Trustees, upon reaching age 72, become eligible to participate in a
retirement program under which they receive payments during their lifetime
from a fund based on their basic trustee fees and length of service. The
obligation of a fund to make such payments is not secured or funded.
Trustees become eligible if, at the time of retirement, they have served on
the Board for at least five years. Currently, Messrs. Ralph S. Saul,
William R. Spaulding, Bertram H. Witham, and David L. Yunich, all former
non-interested Trustees, receive retirement benefits under the program.
On October 31, 1995 the Trustees and officers of each fund owned,
in the aggregate, less than __% of the fund's total outstanding shares.
As of________ the following owned of record or beneficially 5% or more of
outstanding shares of the fund.
A shareholder owning of record or beneficially more than 25% of the
fund's outstanding shares may be considered a controlling person. That
shareholder's vote could have a more significant effect on matters
presented at a shareholders' meeting than votes of other shareholders.
MANAGEMENT CONTRACT
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,
compensates all officers of the fund and all Trustees who are "interested
persons" of the fund or of FMR, and of all personnel of the fund or FMR
performing services relating to research, statistical and investment
activities.
In addition, FMR or its affiliates, subject to the supervision of the Board
of Trustees, provide the management and administrative services necessary
for the operation of 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
laws; developing management and shareholder services for the fund; and
furnishing reports, evaluations, and analyses on a variety of subjects to
the Trustees.
In addition to the management fee payable to FMR and the fees payable to
UMB, the fund pays all its expenses, without limitation, that are not
assumed by those parties. The fund pays for the typesetting, printing, and
mailing of its proxy materials 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
typesetting, printing, and mailing prospectuses, SAIs, notices, and reports
to shareholders, the trust, on behalf of the fund has entered into a
revised transfer agent agreement with UMB, pursuant to which UMB bears the
costs of providing these services to existing shareholders. Other expenses
paid by the fund include interest, taxes, brokerage commissions, and the
fund's proportionate share of insurance premiums and Investment Company
Institute dues. The fund is also liable for such non-recurring expenses as
may arise, including costs of any litigation to which the fund may be a
party, and any obligation it may have to indemnify its officers and
Trustees with respect to litigation.
FMR is the fund's manager pursuant to a management contract dated December
30, 1991 which was approved by shareholders on October 23, 1991.
For the services of FMR under the contract, the fund pays FMR a monthly
management fee at the annual rate of 0. % of the average net assets
of the fund throughout the month. For the fiscal years ended October 31,
1993, 1994, and 1995, FMR received $2,524,338, $2,592,124, and $___,
respectively.
FMR may, from to time, voluntarily reimburse all or a portion of the fund's
operating expenses (exclusive of interest, taxes, brokerage commissions,
and extraordinary expenses). FMR retains the ability to be repaid for
these expense reimbursements in the amount that expenses fall below the
limit prior to the end of the fiscal year. Expense reimbursements by FMR
will increase the fund's total returns and yield and repayment of the
reimbursement by the fund will lower its total returns and yield.
Effective December 30, 1991, FMR voluntarily agreed, subject to revision or
termination, to reimburse the fund if and to the extent that its aggregate
operating expenses, including management fees, were in excess of an annual
rate of 0.65% of average net assets of the fund. If this reimbursement had
not been in effect, for the fiscal years ended October 31 1995, 1994, and
1993, FMR would have received fees amounting to $________, $____, and
$____, respectively, which would have been equivalent to ___%, ___%, and
___% of average net assets of the fund.
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's expenses for purposes of this regulation, the
fund may exclude interest, taxes, brokerage commissions, and extraordinary
expenses, as well as a portion of its custodian fees attributable to
investments in foreign securities.
SUB-ADVISER. FMR has entered into a sub-advisory agreement with FMR
Texas pursuant to which FMR Texas has primary responsibility for providing
portfolio investment management services to the fund.
Under the sub-advisory agreement, dated December 30, 1991, which was
approved by shareholders on October 23, 1991, FMR pays FMR Texas fees equal
to 50% of the management fee payable to FMR under its management contract
with the fund, after payments by FMR pursuant to the fund's 12b-1 plan, if
any. The fees paid to FMR Texas are not reduced by any voluntary or
mandatory expense reimbursements that may be in effect from time to time.
On behalf of the fund, for fiscal 1993, 1994, and 1995, FMR paid FMR Texas
fees of $553,772, $594,149 and $ , respectively.
CONTRACTS WITH FMR AFFILIATES
UMB is the transfer agent for the fund. UMB has entered into a
sub-arrangement with FIIOC pursuant to which FIIOC serves as transfer,
dividend disbursing, and shareholder servicing agent for the fund. FIIOC
is paid an annual fee and an asset-based fee based on account size. With
respect to certain retirement accounts, FIIOC receives asset-based fees
only. With respect to certain other retirement accounts, FIIOC receives
annual account fees and asset-based fees based on fund type.
FIIOC pays out-of-pocket expenses associated with providing transfer agent
services. In addition, FIIOC bears the expense of typesetting, printing,
and mailing prospectuses, SAIs, and all other reports, notices, and
statements to shareholders, with the exception of proxy statements.
UMB has a sub-arrangement with FSC pursuant to which FSC performs the
calculations necessary to determine the fund's NAV and dividends, and
maintains the fund's accounting records. The fee rates for pricing and
bookkeeping services are based on the fund's average net assets,
specifically, .0175% for the first $500 million of average net assets and
.0075% for average net assets in excess of $500 million. The fee is
limited to a minimum of $20,000 and a maximum of $750,000 per year.
Pricing and bookkeeping fees, including related out-of-pocket expenses,
paid to FSC for fiscal 1993, 1994, and 1995 were $107,107, $102,238, and
$___, respectively.
UMB is entitled to reimbursement from the fund for fees paid to FIIOC or
FSC.
The fund has a distribution agreement with FDC, a Massachusetts corporation
organized on July 18, 1960. FDC is a broker-dealer registered under the
Securities Exchange Act of 1934 and is a member of the National Association
of Securities Dealers, Inc. The distribution agreement calls for FDC to use
all reasonable efforts, consistent with its other business, to secure
purchasers for shares of the fund, which are continuously offered at NAV.
Promotional and administrative expenses in connection with the offer and
sale of shares are paid by FMR.
DISTRIBUTION AND SERVICE PLAN
The Trustees have approved a Distribution and Service Plan on behalf of
the fund (the Plan) pursuant to Rule 12b-1 under the 1940 Act (the Rule).
The Rule provides in substance that a mutual fund may not engage directly
or indirectly in financing any activity that is primarily intended to
result in the sale of shares of a fund except pursuant to a plan approved
on behalf of the fund under the Rule. The Plan, as approved by the
Trustees, allows the fund and FMR to incur certain expenses that might be
considered to constitute indirect payment by the fund of distribution
expenses.
Under the Plan, if the payment of management fees by the fund to FMR is
deemed to be indirect financing by the fund of the distribution of its
shares, such payment is authorized by the Plan. The Plan specifically
recognizes that FMR may use its management fee revenue, as well as its past
profits or its other resources from any other source to reimburse FDC for
expenses incurred in connection with the distribution of the fund's shares
including payments made to third parties that assist in selling shares of
the fund, or to third parties, including banks, that render shareholder
support services.
Payments made by FMR to FDC during the fiscal years ended October 31, 1993,
1994 and 1995 amounted to $______, $____, and $____, respectively.
Prior to approving the Plan, the Trustees carefully considered all
pertinent factors relating to the implementation of the Plan, and have
determined that there is a reasonable likelihood that the Plan will benefit
the fund and its shareholders. In particular, the Trustees noted that the
Plan does not authorize payments by the fund other than those made to FMR
under its management contract with the fund. To the extent that the Plan
gives FMR and FDC greater flexibility in connection with the distribution
of shares of the fund, additional sales of fund shares may result.
Furthermore, certain shareholder support services may be provided more
effectively under the Plan by local entities with whom shareholders have
other relationships.
The Plan was approved by shareholders of the fund on October 23, 1991. The
fund's Plan was approved by shareholders, in connection with a
reorganization transaction on ___, pursuant to an Agreement and Plan of
Conversion.
The Plan allows FMR to reimburse FDC for making payments to certain third
parties with whom FDC has entered into written Service Contracts and who
assist or have assisted in selling shares of the fund or who provide
shareholder support services (Investment Professionals), for assistance in
selling shares of the fund or for providing shareholder support services.
The Plan authorizes FMR to reimburse FDC from its management fee, its past
profits or any other source available to it, provided that such payments
cannot exceed the amount of the management fee. The maximum amount payable
to investment professionals under the Plan, as determined by the Board of
Trustees, is currently at the annual rate of 0.38% of the average NAV of
the fund for shareholder support or distribution services.
The Glass-Steagall Act generally prohibits federally and state chartered or
supervised banks from engaging in the business of underwriting, selling, or
distributing securities. Although the scope of this prohibition under the
Glass-Steagall Act has not been clearly defined by the courts or
appropriate regulatory agencies, FDC believes that the Glass-Steagall Act
should not preclude a bank from performing shareholder support services, or
servicing and recordkeeping functions. FDC intends to engage banks only to
perform such functions. However, changes in federal or state statutes and
regulations pertaining to the permissible activities of banks and their
affiliates or subsidiaries, as well as further judicial or administrative
decisions or interpretations, could prevent a bank from continuing to
perform all or a part of the contemplated services. If a bank were
prohibited from so acting, the Trustees would consider what actions, if
any, would be necessary to continue to provide efficient and effective
shareholder services. In such event, changes in the operation of the fund
might occur, including possible termination of any automatic investment or
redemption or other services then provided by the bank. It is not expected
that shareholders would suffer any adverse financial consequences as a
result of any of these occurrences. In addition, state securities laws on
this issue may differ from the interpretations of federal law expressed
herein, and banks and other financial institutions may be required to
register as dealers pursuant to state law.
The fund may execute portfolio transactions with, and purchase securities
issued by, depository institutions that receive payments under the Plan.
No preference for the instruments of such depository institutions will be
shown in the selection of investments.
DESCRIPTION OF THE FUND
FUND ORGANIZATION. Daily Tax-Exempt Money Fund is an open-end
management investment company, organized as a Delaware business trust.
Originally, the trust was organized as a Massachusetts business trust by a
Declaration of Trust dated July 16, 1982, which was amended and restated
November 1, 1989. The Delaware Trust (established on June 20, 1991)
acquired all of the assets of the Massachusetts trust and succeeded to the
latter's name and operations on December 30,1991 pursuant to a plan
approved by shareholders on October 23, 1991. Currently, the fund is the
only fund of the Delaware trust, although the Trust Instrument permits the
Trustees to create additional funds.
In the event that FMR ceases to be the investment adviser to the fund, the
right of the fund to use the identifying name "Fidelity" may be withdrawn.
SHAREHOLDER AND TRUSTEE LIABILITY. The fund is a business trust
organized under Delaware law. Delaware law provides that shareholders shall
be entitled to the same limitations of personal liability extended to
stockholders of private corporations for profit. The courts of some states,
however, may decline to apply Delaware law on this point. The Trust
Instrument contains an express disclaimer of shareholder liability for the
debts, liabilities, obligations, and expenses of the fund and requires that
a disclaimer be given in each contract entered into or executed by the fund
or the Trustees. The Trust Instrument provides for indemnification out of
the fund's property of any shareholder or former shareholder held
personally liable for the obligations of the fund. The Trust Instrument
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 Delaware law does not apply, no contractual
limitation of liability was in effect, and the fund is unable to meet its
obligations. FMR believes that, in view of the above, the risk of personal
liability to shareholders is extremely remote.
The Trust Instrument further provides that the Trustees, if they have
exercised reasonable care, shall not be personally liable to any person
other than the fund or its shareholders; moreover, the Trustees shall not
be liable for any conduct whatsoever, provided that Trustees are not
protected against any liability to which they would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of their office.
VOTING RIGHTS. The fund's capital consists of shares of beneficial
interest allocated to a single fund. The shares have no preemptive or
conversion rights; the voting and dividend rights, the right of redemption,
and the privilege of exchange are described in the Prospectus. Shares are
fully paid and nonassessable, except as set forth under the heading
"Shareholder and Trustee Liability" above. Shareholders representing 10% or
more of the fund may, as set forth in the Trust Instrument, call meetings
of the fund for any purpose related to the fund, including the purpose of
voting on removal of one or more Trustees.
The fund may be terminated upon the sale of its assets to, or merger with,
another open-end management investment company or series thereof, or upon
liquidation and distribution of its assets. Generally such terminations
must be approved by vote of the holders of a majority of the outstanding
shares of the fund; however, the Trustees may, without prior shareholder
approval, change the form of organization of the fund by merger,
consolidation, or incorporation. If not so terminated or reorganized, the
fund will continue indefinitely.
Under the Trust Instrument, the Trustees may, without shareholder vote,
cause the fund to merge or consolidate into one or more trusts,
partnerships, or corporations, or cause the fund to be incorporated under
Delaware law, so long as the surviving entity is an open-end management
investment company that will succeed to or assume the fund registration
statement.
CUSTODIAN. UMB, 1010 Grand Avenue, Kansas City, MO, is custodian of
the assets of the fund. The custodian is responsible for the safekeeping of
a fund's assets and the appointment of the subcustodian banks and clearing
agencies. The custodian takes no part in determining the investment
policies of a fund or in deciding which securities are purchased or sold by
a fund. However, a fund may invest in obligations of the custodian and may
purchase securities from or sell securities to the custodian. Morgan
Guaranty Trust Company of New York, The Bank of New York, and Chemical
Bank, each headquartered in New York, also may serve as a special purpose
custodian of certain assets in connection with pooled repurchase agreement
transactions.
FMR, its officers and directors, its affiliated companies, and the Board of
Trustees may, from time to time, conduct transactions with various banks,
including banks serving as custodians for certain funds advised by FMR.
Transactions that have occurred to date include mortgages and personal and
general business loans. In the judgment of FMR, the terms and conditions of
those transactions were not influenced by existing or potential custodial
or other fund relationships.
AUDITOR. serves as the fund's
independent accountant. The auditor examines financial statements for the
fund and provides other audit, tax, and related services.
FINANCIAL STATEMENTS
The fund's financial statements and financial highlights for the fiscal
year ended October 31, 1995 are included in the fund's Annual Report, which
is supplied with the prospectus. The fund's financial statements and
financial highlights are incorporated herein by reference.
APPENDIX
The descriptions that follow are examples of eligible ratings for the fund.
The fund may, however, consider the ratings of other types of investments
and the ratings assigned by other rating organizations when determining the
eligibility of a particular investment.
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S RATINGS OF STATE
AND MUNICIPAL NOTES:
Moody's ratings for state and municipal and other short-term obligations
will be designated Moody's Investment Grade (MIG, or VMIG for variable rate
obligations). This distinction is in recognition of the difference between
short-term credit risk and long-term credit risk. Factors affecting the
liquidity of the borrower and short-term cyclical elements are critical in
short-term ratings, while other factors of major importance in bond risk,
long-term secular trends for example, may be less important in the short
run. Symbols used will be as follows:
MIG-1/VMIG-1 - This designation denotes best quality. There is
present strong protection by established cash flows, superior liquidity
support, or demonstrated broad-based access to the market for refinancing.
MIG-2/VMIG-2 - This designation denotes high quality. Margins of
protection are ample although not so large as in the preceding group.
DESCRIPTION OF STANDARD & POOR'S CORPORATION'S RATINGS OF STATE AND
MUNICIPAL NOTES:
SP-1 - Strong capacity to pay principal and interest. An issue
determined to possess a very strong capacity to pay debt service is given a
plus (+) designation.
SP-2 - Satisfactory capacity to pay principal and interest, with
some vulnerability to adverse financial and economic changes over the term
of the notes.
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S MUNICIPAL BOND
RATINGS:
AAA - Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk and are
generally referred to as "gilt edged." Interest payments are protected by
a large or by an exceptionally stable margin and principal is secure.
While the various protective elements are likely to change, such changes as
can be visualized are most unlikely to impair the fundamentally strong
position of such issues.
AA - Bonds which are rated Aa are judged to be of high quality by
all standards. Together with the Aaa group they comprise what are
generally known as high-grade bonds. They are rated lower than the best
bonds because margins of protection may not be as large as in Aaa
securities or fluctuation of protective elements may be of greater
amplitude or there may be other elements present which make the long-term
risks appear somewhat larger than the Aaa securities.
Those bonds within the AA GROUP WHICH Moody's believes possess the
strongest investment attributes are designated by the symbol AA1.
DESCRIPTION OF STANDARD & POOR'S CORPORATION'S MUNICIPAL BOND
RATINGS:
AAA - Debt rated Aaa has the highest rating assigned by Standard &
Poor's to a debt obligation. Capacity to pay interest and repay principal
is extremely strong.
AA - Debt rated AA has a very strong capacity to pay interest and
repay principal and differs from the higher-rated issues only in small
degree.
The rating AA may be modified by the addition of a plus or minus to show
relative standing within the major rating category.
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements and Financial Highlights, included in the Annual
Report for the fiscal year ended October 31, 1995 will be filed by
subsequent amendment.
(b) Exhibits:
(1) (a) Trust Instrument for Daily Tax-Exempt Money Fund II, dated June 20,
1991 was electronically filed and is incorporated herein by reference to
Exhibit 1(a) to Post-Effective Amendment No. 20.
(b) Certificate of Trust for Daily Tax-Exempt Money Fund II, dated June 20,
1991, is incorporated herein by reference to Exhibit 1(b) to Post-Effective
Amendment No. 17.
(2) (a) ByLaws of the Trust effective June 20, 1991 were electronically
filed and are incorporated herein by reference to Exhibit 2(a) to Fidelity
Union Street Trust II's Post-Effective Amendment No. 10.
(3) Not applicable.
(4) Not applicable.
(5) (a) Form of Management Contract, dated December 30, 1991, between Daily
Tax-Exempt Money Fund II and Fidelity Management & Research Co. is
incorporated herein by reference to Exhibit 5(a) to Post-Effective
Amendment No. 17.
(b) Form of Sub-Advisory Agreement dated December 30, 1991, between
Fidelity Management & Research Co. and FMR Texas Inc. (with respect to
Daily Tax-Exempt Money Fund II) is incorporated herein by reference to
Exhibit 5(b) to Post-Effective Amendment No. 17.
(6) (a) Form of General Distribution Agreement dated December 30, 1991,
between Daily Tax-Exempt Money Fund II and Fidelity Distributors
Corporation is incorporated herein by reference to Exhibit 6(a) to
Post-Effective Amendment No. 17.
(7) Retirement Plan for Non-Interested Person Trustees' Retirement Plan,
Directors or General Partners, effective November 1, 1989, is incorporated
herein by reference to Exhibit 7 to Post-Effective Amendment No. 17.
(8) (a) Custodian Agreement, Appendix A, Appendix B, and Appendix C, dated
December 1, 1994, between UMB Bank, n.a. and Daily Tax-Exempt Money Fund on
behalf of Daily Tax-Exempt Money Fund was electronically filed and is
incorporated herein by reference to Exhibit 8 to Fidelity California
Municipal Trust's Post-Effective Amendment No. 28 (File No. 2-83367).
(9) (a) Transfer Agent Agreement dated December 30, 1991, between Daily
Tax-Exempt Money Fund II and United Missouri was electronically filed and
is incorporated herein by reference to Exhibit 9(a) to Post-Effective
Amendment No. 20.
(b) Schedule A to the Amended Transfer Agent Agreement for Daily
Tax-Exempt Money Fund, dated January 1, 1993 was electronically filed and
is incorporated herein by reference as Exhibit 9(b) to Post-Effective
Amendment No. 20.
(c) Form of Appointment of Sub-Transfer Agent for Daily Tax-Exempt Money
Fund II, dated December 30, 1991, is incorporated herein by reference to
Exhibit 9(c) to Post-Effective Amendment No. 17.
(d) Service Agent Agreement, dated December 30, 1991, between Daily
Tax-Exempt Money Fund II, United Missouri, and Fidelity Management &
Research Co. was electronically filed and is incorporated herein by
reference to Exhibit 9(d) to Post-Effective Amendment No. 20.
(e) Schedules B and C to the Service Agreement for Daily Tax-Exempt Money
Fund, dated March 12, 1992 and December 31, 1991, respectively, were
electronically filed and are incorporated herein by reference to Exhibit
9(e) to Post Effective Amendment No. 20.
(f) Form of Appointment of Sub-Servicing Agent for Daily Tax-Exempt Money
Fund II, dated December 30, 1991, is incorporated herein by reference to
Exhibit 9(f) to Post-Effective Amendment No. 17.
(10) Not applicable.
(11) Not applicable.
(12) None.
(13) None.
(14) (a) Fidelity Individual Retirement Account, as currently in effect,
was electronically filed and is incorporated herein by reference to Exhibit
14(a) to Union Street Trust's Post-Effective Amendment No. 87.
(b) Portfolio Advisory Services Individual Retirement Account, as
currently in effect, was electronically filed and is incorporated herein by
reference as Exhibit 14(i) to Union Street Trust's Post-Effective Amendment
No. 87.
(c) National Financial Services Corporation Individual Retirement Account,
as currently in effect, was electronically filed and is incorporated herein
by reference to Exhibit 14(h) to Union Street Trust's Post-Effective
Amendment No. 87.
(d) National Financial Services Defined Contribution Plan, as currently in
effect, was electronically filed and is incorporated herein by reference to
Exhibit 14(k) to Union Street's Trust Post-Effective Amendment No. 87.
(e) Fidelity Institutional Individual Retirement Account Custodian
Agreement and Disclosure Statement, as currently in effect, was
electronically filed and is incorporated herein by reference to Exhibit
14(d) to Union Street Trust's Post-Effective Amendment No. 87.
(f) Fidelity Advisor Funds Individual Retirement Account Custodial
Agreement Disclosure Statement in effect as of January 1, 1994 was filed
electronically and is incorporated herein by reference to Exhibit 14(b) to
Advisor Series I Post-Effective Amendment No. 22.
(g) Plymouth Defined Contribution Plan, as currently in effect, was
electronically filed and is incorporated herein by reference to Exhibit
14(o) to Commonwealth Trust's Post-Effective Amendment No. 57.
(15) (a) Form of Service Plan pursuant to Rule 12b-1 for Daily Tax-Exempt
Money Market Fund II is incorporated herein by reference to Exhibit 15(a)
to Post-Effective Amendment No. 17.
(b) Form of Agreement with Qualified Recipients is incorporated herein by
reference to Exhibit 15(b) to Post-Effective Amendment No. 1.
(16) Schedule for computation of performance quotations is incorporated
herein by reference to Exhibit 16 to Post-Effective Amendment No. 17.
(17) A Financial Data Schedule to be filed by subsequent amendment.
Item 25. Persons Controlled by or under Common Control with Registrant
The Board of Trustees of Registrant is the same as the Board of Trustees
of other funds advised by FMR, each of which has Fidelity Management and
Research Company as its investment adviser. In addition, the officers of
these funds are substantially identical. Nonetheless, Registrant takes the
position that it is not under common control with these other funds since
the power residing in the respective boards and officers arises as the
result of an official position with the respective funds.
Item 26. Number of Holders of Securities
Title of Class: Shares of Beneficial Interest
Name of Series Number of Record Holders
Daily Tax-Exempt Money Fund
Item 27. Pursuant to Del. Code Ann. title 12 (sub-section) 3817, a Delaware
business trust may provide in its governing instrument for the
indemnification of its officers and trustees from and against any and all
claims and demands whatsoever. Article X, Section 10.02 of the Declaration
of Trust states that the Registrant shall indemnify any present trustee or
officer to the fullest extent permitted by law against liability, and all
expenses reasonably incurred by him or her in connection with any claim,
action, suit or proceeding in which he or she is involved by virtue of his
or her service as a trustee, officer, or both, and against any amount
incurred in settlement thereof. Indemnification will not be provided to a
person adjudged by a court or other adjudicatory body to be liable to the
Registrant or its shareholders by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of his or her duties (collectively,
"disabling conduct"), or not to have acted in good faith in the reasonable
believe that his or her action was in the best interest of the Registrant.
In the event of a settlement, no indemnification may be provided unless
there has been a determination, as specified in the Declaration of Trust,
that the officer or trustee did not engage in disabling conduct.
Pursuant to Section 11 of the Distribution Agreement, the Registrant
agrees to indemnify and hold harmless the Distributor and each of its
directors and officers and each person, if any, who controls the
Distributor within the meaning of Section 15 of the 1933 Act against any
loss, liability, claim, damages or expense arising by reason of any person
acquiring any shares, based upon the ground that the registration
statement, Prospectus, Statement of Additional Information, shareholder
reports or other information filed or made public by the Registrant
included a materially misleading statement or omission. However, the
Registrant does not agree to indemnify the Distributor or hold it harmless
to the extent that the statement or omission was made in reliance upon, and
in conformity with, information furnished to the Registrant by or on behalf
of the Distributor. The Registrant does not agree to indemnify the parties
against the liability to which they would be subject by reason of their own
disabling conduct.
Pursuant to the agreement by which Fidelity Service Company ("Service") is
appointed sub-transfer agent, the Transfer Agent agrees to indemnify
Service for its losses, claims, damages, liabilities and expenses to the
extent the Transfer Agent is entitled to and receives indemnification from
the Registrant for the same events. Under the Transfer Agency Agreement,
the Registrant agrees to indemnify and hold the Transfer Agent harmless
against any losses, claims, damages, liabilities, or expenses resulting
from:
(1) any claim, demand, action or suit brought by any person other than the
Registrant, which names the Transfer Agent and/or the Registrant as a party
and is not based on and does not result from the Transfer Agent's willful
misfeasance, bad faith, negligence or reckless disregard of its duties, and
arises out of or in connection with the Transfer Agent's performance under
the Transfer Agency Agreement; or
(2) any claim, demand, action or suit (except to the extent contributed to
by the Transfer Agent's willful misfeasance, bad faith, negligence or
reckless disregard of its duties) which results from the negligence of the
Registrant, or from the Transfer Agent's acting upon an instruction(s)
reasonably believed by it to have been executed or communicated by any
person duly authorized by the Registrant, or as a result of the Transfer
Agent's acting in reliance upon any instrument or stock certificate
reasonably believed by it to have been genuine and signed, countersigned or
executed by the proper person.
Item 28. Business and Other Connections of Investment Adviser
(1) FIDELITY MANAGEMENT & RESEARCH COMPANY
FMR serves as investment adviser to a number of other investment
companies. The directors and officers of the Adviser have held, during the
past two fiscal years, the following positions of a substantial nature.
<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman of the Executive Committee of FMR;
President and Chief Executive Officer of FMR Corp.;
Chairman of the Board and a Director of FMR, FMR
Corp., FMR Texas Inc. (1989), Fidelity Management &
Research (U.K.) Inc. and Fidelity Management &
Research (Far East) Inc.; President and Trustee of funds
advised by FMR;
J. Gary Burkhead President of FMR; Managing Director of FMR Corp.;
President and a Director of FMR Texas Inc. (1989),
Fidelity Management & Research (U.K.) Inc. and
Fidelity Management & Research (Far East) Inc.;
Senior Vice President and Trustee of funds advised by
FMR.
Peter S. Lynch Vice Chairman of FMR (1992).
David Breazzano Vice President of FMR (1993) and of a fund advised by
FMR.
Stephan Campbell Vice President of FMR (1993).
Dwight Churchill Vice President of FMR (1993).
Rufus C. Cushman, Jr. Vice President of FMR and of funds advised by FMR;
Corporate Preferred Group Leader.
Will Danoff Vice President of FMR (1993) and of a fund advised by
FMR.
Scott DeSano Vice President of FMR (1993).
Penelope Dobkin Vice President of FMR (1990) and of a fund advised by
FMR.
Larry Domash Vice President of FMR (1993).
George Domolky Vice President of FMR (1993) and of a fund advised by
FMR.
Robert K. Duby Vice President of FMR.
Margaret L. Eagle Vice President of FMR and of a fund advised by FMR.
Kathryn L. Eklund Vice President of FMR (1991).
Richard B. Fentin Senior Vice President of FMR (1993) and of a fund
advised by FMR.
Daniel R. Frank Vice President of FMR and of funds advised by FMR.
Gary L. French Vice President of FMR (1991) and Treasurer of the
funds advised by FMR (1991). Prior to assuming the
position as Treasurer he was Senior Vice President,
Fund Accounting - Fidelity Accounting & Custody
Services Co. (1991) (Vice President, 1990-1991); and
Senior Vice President, Chief Financial and Operations
Officer - Huntington Advisers, Inc. (1985-1990).
Michael S. Gray Vice President of FMR and of funds advised by FMR.
Lawrence Greenberg Vice President FMR (1993).
Barry A. Greenfield Vice President of FMR and of a fund advised by FMR.
William J. Hayes Senior Vice President of FMR; Equity Division Leader.
Robert Haber Vice President of FMR (1991) and of funds advised by
FMR.
Richard Haberman Senior Vice President of FMR (1993).
Daniel Harmetz Vice President of FMR (1991) and of a fund advised by
FMR.
Ellen S. Heller Vice President of FMR (1991).
John Hickling Vice President of FMR (1993) and of funds advised by
FMR.
Robert F. Hill Vice President of FMR (1989); and Director of
Technical Research.
Stephan Jonas Treasurer and Vice President of FMR (1993); Treasurer
of FMR Texas Inc. (1993) ; Fidelity Management &
Research (U.K.) Inc. (1993), and Fidelity Management
& Research (Far East) Inc. 1993.
David B. Jones Vice President of FMR (1993).
Steven Kaye Vice President of FMR (1993) and of a fund advised by
FMR.
Frank Knox Vice President of FMR (1993).
Robert A. Lawrence Senior Vice President of FMR (1993); and High Income
Division Leader.
Alan Leifer Vice President of FMR and of a fund advised by FMR.
Harris Leviton Vice President of FMR (1993) and of a fund advised by
FMR.
Bradford E. Lewis Vice President of FMR (1991) and of funds advised by
FMR.
Malcom W. McNaught III Vice President of FMR (1993).
Robert H. Morrison Vice President of FMR and Director of Equity Trading.
David Murphy Vice President of FMR (1991) and of funds advised by
FMR.
Andrew Offit Vice President of FMR (1993).
Judy Pagliuca Vice President of FMR (1993).
Jacques Perold Vice President of FMR (1991).
Brian Posner Vice President of FMR (1993) and of a fund advised by
FMR.
Anne Punzak Vice President of FMR (1990) and of funds advised by
FMR.
Lee Sandwen Vice President of FMR (1993).
Patricia A. Satterthwaite Vice President of FMR (1993) and of a fund.
Thomas T. Soviero Vice President of FMR (1993).
Richard A. Spillane Vice President of FMR (1990) and of funds advised by
FMR; and Director of Equity Research (1989).
Robert E. Stansky Senior Vice President of FMR (1993) and of funds
advised by FMR.
Thomas Steffanci Senior Vice President of FMR (1993); and
Fixed-Income Division Head.
Gary L. Swayze Vice President of FMR and of funds advised by FMR;
and Tax-Free Fixed-Income Group Leader.
Thomas Sweeney Vice President of FMR (1993).
Donald Taylor Vice President of FMR (1993) and of funds advised by
FMR.
Beth F. Terrana Senior Vice President of FMR (1993) and of funds
advised by FMR.
Joel Tillinghast Vice President of FMR (1993) and of a fund advised by
FMR.
Robert Tucket Vice President of FMR (1993).
George A. Vanderheiden Senior Vice President of FMR; Vice President of funds
advised by FMR; and Growth Group Leader (1990).
Jeffrey Vinik Senior Vice President of FMR (1993) and of a fund
advised by FMR.
Guy E. Wickwire Vice President of FMR and of a fund advised by FMR.
Arthur S. Loring Senior Vice President (1993), Clerk and General
Counsel of FMR; Vice President, Legal of FMR Corp.;
and Secretary of funds advised by FMR.
</TABLE>
(2) FMR TEXAS INC. (FMR Texas)
FMR Texas provides investment advisory services to Fidelity Management &
Research Company. The directors and officers of the Sub-Adviser have held
the following positions of a substantial nature during the past two fiscal
years.
<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman and Director of FMR Texas; Chairman of the
Executive Committee of FMR; President and Chief
Executive Officer of FMR Corp.; Chairman of the Board
and a Director of FMR, FMR Corp., Fidelity Management
& Research (Far East) Inc. and Fidelity Management &
Research (U.K.) Inc.; President and Trustee of funds
advised by FMR.
J. Gary Burkhead President and Director of FMR Texas; President of FMR;
Managing Director of FMR Corp.; President and a
Director of Fidelity Management & Research (Far East)
Inc. and Fidelity Management & Research (U.K.) Inc.;
Senior Vice President and Trustee of funds advised by
FMR.
Frederic L. Henning Jr. Senior Vice President of FMR Texas; Money Market
Division Leader.
Leland Baron Vice President of FMR Texas (1991) and of funds advised
by FMR.
Robert Litterst Vice President of FMR Texas
Thomas D. Maher Vice President of FMR Texas.
Burnell Stehman Vice President of FMR Texas and of funds advised by
FMR.
John Todd Vice President of FMR Texas and of funds advised by
FMR.
Sarah H. Zenoble Vice President of FMR Texas and of funds advised by
FMR.
Steven Jonas Treasurer of FMR Texas Inc. (1993), Fidelity
Management & Research (U.K.) Inc. (1993), Fidelity
Management & Research (Far East) Inc. (1993); Treasurer
and Vice President of FMR (1993).
David C. Weinstein Secretary of FMR Texas; Clerk of Fidelity Management &
Research (U.K.) Inc.; Clerk of Fidelity Management &
Research (Far East) Inc.
</TABLE>
Item 29. Principal Underwriters
(a) Fidelity Distributors Corporation (FDC) acts as distributor for most
funds advised by FMR and the following other funds:
CrestFunds, Inc.
The Victory Funds
ARK Funds
(b)
Name and Principal Positions and Offices Positions and Offices
Business Address* With Underwriter With Registrant
Edward C. Johnson 3d Director Trustee and President
Nita B. Kincaid Director None
W. Humphrey Bogart Director None
Kurt A. Lange President and Treasurer None
William L. Adair Senior Vice President None
Thomas W. Littauer Senior Vice President None
Arthur S. Loring Vice President and Clerk Secretary
* 82 Devonshire Street, Boston, MA
(c) Not applicable.
Item 30. Location of Accounts and Records
All accounts, books, and other documents required to be maintained by
Section 31a of the 1940 Act and the Rules promulgated thereunder are
maintained by Fidelity Management & Research Company or Fidelity Service
Co., 82 Devonshire Street, Boston, MA 02109, or the fund's custodian United
Missouri Bank, N.A., 1010 Grand Avenue, Kansas City, MO.
Item 31. Management Services
Not applicable
Item 32 Undertakings
Not applicable
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment No. 24 to the Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Boston and Commonwealth of Massachusetts on the 10th day of October 1995.
DAILY TAX-EXEMPT MONEY FUND
By /s/Edward C. Johnson 3d (dagger)
Edward C. Johnson 3d, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
(Signature) (Title) (Date)
<TABLE>
<CAPTION>
<S> <C> <C>
/s/Edward C. Johnson 3d(dagger) President and Trustee October 10, 1995
Edward C. Johnson 3d (Principal Executive Officer)
</TABLE>
/s/Kenneth A. Rathgeber Treasurer October 10, 1995
Kenneth A. Rathgeber
/s/J. Gary Burkhead Trustee October 10, 1995
J. Gary Burkhead
/s/Ralph F. Cox * Trustee October 10, 1995
Ralph F. Cox
/s/Phyllis Burke Davis * Trustee October 10, 1995
Phyllis Burke Davis
/s/Richard J. Flynn * Trustee October 10, 1995
Richard J. Flynn
/s/E. Bradley Jones * Trustee October 10, 1995
E. Bradley Jones
/s/Donald J. Kirk * Trustee October 10, 1995
Donald J. Kirk
/s/Peter S. Lynch * Trustee October 10, 1995
Peter S. Lynch
/s/Edward H. Malone * Trustee October 10, 1995
Edward H. Malone
/s/Marvin L. Mann * Trustee October 10, 1995
Marvin L. Mann
/s/Gerald C. McDonough* Trustee October 10, 1995
Gerald C. McDonough
/s/Thomas R. Williams * Trustee October 10, 1995
Thomas R. Williams
(dagger) Signatures affixed by J. Gary Burkhead pursuant to a power of
attorney dated December 15, 1994 and filed herewith.
* Signature affixed by Robert C. Hacker pursuant to a power of attorney
dated December 15, 1994 and filed herewith.
POWER OF ATTORNEY
We, the undersigned Directors, Trustees or General Partners, as the case
may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Daily Money Fund Fidelity Institutional Tax-Exempt Cash Portfolios
Daily Tax-Exempt Money Fund Fidelity Institutional Investors Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust II
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Court Street Trust II Fidelity New York Municipal Trust II
Fidelity Hereford Street Trust Fidelity Phillips Street Trust
Fidelity Institutional Cash Portfolios Fidelity Union Street Trust II
</TABLE>
in addition to any other investment company for which Fidelity Management &
Research Company acts as investment adviser and for which the undersigned
individual serves as a Director, Trustee or General Partner (collectively,
the "Funds"), hereby severally constitute and appoint Arthur J. Brown,
Arthur C. Delibert, Robert C. Hacker, Richard M. Phillips, Dana L. Platt
and Stephanie A. Djinis, each of them singly, my true and lawful
attorney-in-fact, with full power of substitution, and with full power to
each of them, to sign for me and my name in the appropriate capacities any
Registration Statements of the Funds on Form N-1A or any successor thereto,
any and all subsequent Pre-Effective Amendments or Post-Effective
Amendments to said Registration Statements on Form N-1A or any successor
thereto, any Registration Statements on Form N-14, and any supplements or
other instruments in connection therewith, and generally to do all such
things in my name and behalf in connection therewith as said
attorneys-in-fact deem necessary or appropriate, to comply with the
provisions of the Securities Act of 1933 and Investment Company Act of
1940, and all related requirements of the Securities and Exchange
Commission, hereby ratifying and confirming all that said attorney-in-fact
or their substitutes may do or cause to be done by virtue hereof.
WITNESS our hands on this fifteenth day of December, 1994.
/s/Edward C. Johnson 3d /s/Donald J. Kirk
Edward C. Johnson 3d Donald J. Kirk
/s/J. Gary Burkhead /s/Peter S. Lynch
J. Gary Burkhead Peter S. Lynch
/s/Ralph F. Cox /s/Marvin L. Mann
Ralph F. Cox Marvin L. Mann
/s/Phyllis Burke Davis /s/Edward H. Malone
Phyllis Burke Davis Edward H. Malone
/s/Richard J. Flynn /s/Gerald C. McDonough
Richard J. Flynn Gerald C. McDonough
/s/E. Bradley Jones /s/Thomas R. Williams
E. Bradley Jones Thomas R. Williams
POWER OF ATTORNEY
I, the undersigned President and Director, Trustee or General Partner, as
the case may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Daily Money Fund Fidelity Institutional Tax-Exempt Cash Portfolios
Daily Tax-Exempt Money Fund Fidelity Institutional Investors Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust II
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Court Street Trust II Fidelity New York Municipal Trust II
Fidelity Hereford Street Trust Fidelity Phillips Street Trust
Fidelity Institutional Cash Portfolios Fidelity Union Street Trust II
</TABLE>
in addition to any other investment company for which Fidelity Management &
Research Company acts as investment adviser and for which the undersigned
individual serves as President and Board Member (collectively, the
"Funds"), hereby severally constitute and appoint J. Gary Burkhead, my true
and lawful attorney-in-fact, with full power of substitution, and with full
power to sign for me and in my name in the appropriate capacity any
Registration Statements of the Funds on Form N-1A, Form N-8A or any
successor thereto, any and all subsequent Pre-Effective Amendments or
Post-Effective Amendments to said Registration Statements on Form N-1A or
any successor thereto, any Registration Statements on Form N-14, and any
supplements or other instruments in connection therewith, and generally to
do all such things in my name and behalf in connection therewith as said
attorney-in-fact deem necessary or appropriate, to comply with the
provisions of the Securities Act of 1933 and Investment Company Act of
1940, and all related requirements of the Securities and Exchange
Commission. I hereby ratify and confirm all that said attorneys-in-fact or
their substitutes may do or cause to be done by virtue hereof.
WITNESS my hand on the date set forth below.
/s/Edward C. Johnson 3d December 15, 1994
Edward C. Johnson 3d
