SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT (NO. 2-79755)
UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No.
[ ]
Post-Effective Amendment No. 30
[x]
and
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940
[x]
Amendment No.
[ ]
Fidelity Mt. Vernon Street
Trust____________________________________________
_________
(Exact Name of Registrant as Specified in Charter)
82 Devonshire St., Boston, Massachusetts
02109_________________________________________
(Address Of Principal Executive Offices) (Zip
Code)
Registrant's Telephone Number (617)
570-7000_________________________________________
__
Arthur S. Loring
82 Devonshire Street
Boston, Massachusetts
02109____________________________________________
____________
(Name and Address of Agent for Service)
It is proposed that this filing will become
effective:
( ) immediately upon filing pursuant to paragraph
(b)
( ) on (date) pursuant to paragraph (b)
( ) 60 days after filing pursuant to paragraph
(a)(i)
(x) on January 23, 1995 pursuant to paragraph
(a)(i)
( ) 75 days after filing pursuant to paragraph
(a)(ii)
( ) on (date) 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 intends to file the notice required by
such Rule before January 31, 1995.
FIDELITY NEW MILLENNIUM FUND
CROSS REFERENCE SHEET
FORM N-1A
ITEM NUMBER PROSPECTUS SECTION
<TABLE>
<CAPTION>
<S> <C>
1................................... Cover Page
...
2a.................................. Expenses
..
b, Contents; The Fund at a Glance; Who May Want to
c................................ Invest
3a.................................. Financial Highlights
..
*
b...................................
.
c, d.............................. Performance
4a i.............................. Charter
The Fund at a Glance; Investment Principles and
ii............................... Risks
b................................... Investment Principles and Risks
..
Who May Want to Invest; Investment Principles and
c.................................... Risks
5a.................................. Charter
..
b(i)................................ Cover Page: The Fund at a Glance; Charter; Doing
Business with Fidelity
Charter
(ii)..............................
..(iii)........................... Expenses; Breakdown of Expenses
c, Charter; Breakdown of Expenses Cover Page
d................................
Cover Page; Charter
e....................................
Expenses
f....................................
g(i)................................ Charter
..
(ii)................................. *
..
5A................................. Performance
.
6a Charter
i.................................
How to Buy Shares; How to Sell Shares; Transaction
ii................................ Details; Exchange Restrictions
*
iii...............................
*
b...................................
.
Transaction Details; Exchange Restrictions
c....................................
*
d...................................
.
Doing Business with Fidelity; How to Buy Shares;
e.................................... How to Sell Shares; Investor Services
f,g................................. Dividends, Capital Gains, and Taxes
..
7a.................................. Cover Page; Charter
..
Expenses; How to Buy Shares; Transaction Details
b...................................
.
*
c....................................
How to Buy Shares
d...................................
.
e.................................... *
f, ................................ *
8................................... How to Sell Shares; Investor Services; Transaction
... Details; Exchange Restrictions
9................................... *
...
</TABLE>
* Not Applicable
FIDELITY NEW MILLENNIUM FUND
CROSS REFERENCE SHEET
(continued)
FORM N-1A
ITEM NUMBER STATEMENT OF ADDITIONAL INFORMATION
SECTION
<TABLE>
<CAPTION>
<S> <C>
10, 11.......................... Cover Page
12.................................. *
..
13a - Investment Policies and Limitations
c............................
*
d..................................
14a - Trustees and Officers
c............................
15a, *
b..............................
Trustees and Officers
c..................................
16a FMR, Portfolio Transactions
i................................
Trustees and Officers
ii..............................
Management Contract
iii.............................
Management Contract
b.................................
c, Contracts with Companies Affiliated with FMR
d.............................
e - *
g...........................
Description of the Trust
h.................................
Contracts with Companies Affiliated with FMR
i.................................
17a - Portfolio Transactions
c............................
*
d,e..............................
18a................................ Description of the Trust
..
*
b.................................
19a................................ Additional Purchase and Redemption Information
..
Additional Purchase and Redemption Information;
b.................................. Valuation of Portfolio Securities
*
c..................................
20.................................. Distributions and Taxes
..
21a, Contracts with Companies Affiliated with FMR
b..............................
*
c.................................
22.................................. Performance
..
23.................................. Financial Statements
..
</TABLE>
* Not Applicable
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 January 23, 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,
call Fidelity at 1-800-544-8888.
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.
NMF-pro- 195
FIDELITY NEW
MILLENNIUMTM
FUND
New Millennium is a growth fund. It seeks to
increase the value of your investment over the
long term by investing mainly in equity securities
of companies that are likely to benefit from
social and economic trends.
PROSPECTUS
(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET,
BOSTON, MA 02109 JANUARY 23, 1995
CONTENTS
KEY FACTS THE FUND AT A GLANCE
WHO MAY WANT TO INVEST
EXPENSES The fund's sales
charge (load) and its yearly
operating expenses.
FINANCIAL HIGHLIGHTS A summary
of the fund's financial data.
PERFORMANCE How the fund has
done over time.
THE FUND IN DETAIL CHARTER How the fund is
organized.
INVESTMENT PRINCIPLES AND RISKS
The fund's overall approach to
investing.
BREAKDOWN OF EXPENSES How
operating costs are calculated and
what they include.
YOUR ACCOUNT DOING BUSINESS WITH FIDELITY
TYPES OF ACCOUNTS Different
ways to set up your account,
including tax-sheltered retirement
plans.
HOW TO BUY SHARES Opening an
account and making additional
investments.
HOW TO SELL SHARES Taking money
out and closing your account.
INVESTOR SERVICES Services to
help you manage your account.
SHAREHOLDER AND DIVIDENDS, CAPITAL GAINS, AND
ACCOUNT POLICIES TAXES
TRANSACTION DETAILS Share price
calculations and the timing of
purchases and redemptions.
EXCHANGE RESTRICTIONS
SALES CHARGE REDUCTIONS AND
WAIVERS
KEY FACTS
THE FUND AT A GLANCE
GOAL: Capital appreciation (increase in the fund's
share price). As with any mutual fund, there is no
assurance that the fund will achieve its goal.
STRATEGY: Invests mainly in equity securities of
companies that are likely to benefit from social
and economic trends.
MANAGEMENT: Fidelity Management & Research Company
(FMR) is the management arm of Fidelity
Investments, which was established in 1946 and is
now America's largest mutual fund manager.
Foreign affiliates of FMR may help choose
investments for the fund.
SIZE: As of November 30 , 1994,
the fund had over $__ million in assets.
WHO MAY WANT TO INVEST
The fund may be appropriate for aggressive
investors who are willing to ride out stock market
fluctuations in pursuit of potentially high
long-term returns. The fund is designed for those
who are looking for an investment approach that
combines fundamental research with an analysis of
social and economic trends. It does not pursue
income, and is not in itself a balanced investment
plan.
The value of the fund's investments varies from
day to day, generally reflecting changes in market
conditions and other company, political, and
economic news. Over time, stocks have shown
greater growth potential than other types of
securities. In the shorter term, however,
stock prices can fluctuate dramatically in
response to these factors. When you sell your
fund shares, they may be worth more or less than
what you paid for them.
THE SPECTRUM OF
FIDELITY FUNDS
Broad categories of Fidelity
funds are presented here in
order of ascending risk.
Generally, investors seeking
to maximize return must
assume greater risk. New
Millennium is in the GROWTH
category.
(solid bullet) MONEY MARKET Seeks
income and stability by
investing in high-quality,
short-term investments.
(solid bullet) INCOME Seeks income by
investing in bonds.
(solid bullet) GROWTH AND INCOME
Seeks long-term growth and
income by investing in stocks
and bonds.
(right arrow) GROWTH Seeks long-term
growth by investing mainly in
stocks.
(checkmark)
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you
pay when you buy or sell shares of a fund. See
pages and -__ for an explanation of how and
when these charges apply. Lower sales charges may
be available for accounts over $250,000.
Maximum sales charge on purchases
(as a % of offering price) 3.00%
Maximum sales charge on
reinvested distributions None
Deferred sales charge on redemptions None
Exchange fee None
ANNUAL FUND OPERATING EXPENSES are paid out of the
fund's assets. The fund pays a management fee that
varies based on its performance. It also incurs
other expenses for services such as maintaining
shareholder records and furnishing shareholder
statements and financial reports. The
fund's expenses are factored into its share price
or dividends and are not charged directly to
shareholder accounts (see page ).
The following are projections based on historical
expenses, and are calculated as a percentage of
average net assets. A portion of the brokerage
commissions that the fund paid was used to reduce
fund expenses. Without this reduction, the total
fund operating expenses would have been
__% .
Management fee %
12b-1 fee None
Other expenses %
Total fund operating expenses %
EXAMPLES: Let's say, hypothetically, that the
fund's annual return is 5% and that its operating
expenses are exactly as just described. For every
$1,000 you invested, here's how much you would pay
in total expenses if you close your account after
the number of years indicated:
After 1 year $
After 3 years $
After 5 years $
After 10 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.
UNDERSTANDING
EXPENSES
Operating a mutual fund
involves a variety of
expenses for portfolio
management, shareholder
statements, tax reporting, and
other services. As an
investor, you pay some of
these costs directly (for
example, the fund's 3% sales
charge). Others are paid from
the fund's assets; the effect
of these other expenses is
already factored into any
quoted share price or return.
(checkmark)
FINANCIAL HIGHLIGHTS
The table that follows is included in the
fund's Annual Report and has been audited by
Coopers & Lybrand, L.L.P. independent
accountants. Their report on the financial
statements and financial highlights is included in
the Annual Report. The financial statements and
financial highlights are incorporated by reference
into (are legally a part of) the fund's Statement
of Additional Information.
[Financial Highlights to be filed by subsequent
amendment.]
PERFORMANCE
Mutual fund performance is commonly measured as
TOTAL RETURN. The total returns that follow are
based on historical fund results and do not
reflect the effect of taxes.
The fund's fiscal year runs from December 1
through November 30. The tables below show the
fund's performance over past fiscal years compared
to two measures: investing in a broad selection of
stocks (S&P 500), and not investing at all
(inflation, or CPI). To help you compare this
fund to other funds, the chart on page 7 displays
calendar-year performance.
AVERAGE ANNUAL TOTAL RETURNS
Fiscal period Life
ended of
November 30, fund
1994 A
New
Millennium
New
Millennium
(load adj.B)
S&P 500
Consumer
Price
Index
CUMULATIVE TOTAL RETURNS
Fiscal period Life
ended of
November 30, fund
1994 A
New
Millennium
New
Millennium
(load adj.B)
S&P 500
Consumer
Price
Index
A FROM DECEMBER 28, 1992
B LOAD-ADJUSTED RETURNS INCLUDE THE EFFECT OF
PAYING THE FUND'S 3% SALES CHARGE.
UNDERSTANDING
PERFORMANCE
Because this fund invests in
stocks, its performance is
related to that of the overall
stock market. Historically,
stock market performance
has been characterized by
volatility in the short run and
growth in the long run.
(checkmark)
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.
S&P 500(registered trademark) is the Standard &
Poor's Composite Index of 500 Stocks, a
widely recognized, unmanaged index of common stock
prices. The S&P 500 figures assume reinvestment of
all dividends paid by stocks included in the
index. They do not, however, include any allowance
for the brokerage commissions or other fees you
would pay if you actually invested in those
stocks.
YEAR-BY-YEAR TOTAL RETURNS
Calendar years 1993
New Millennium %
Competitive funds average ___%
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 1, Col: 2, Value: nil
Row: 2, Col: 1, Value: nil
Row: 2, Col: 2, Value: nil
Row: 3, Col: 1, Value: nil
Row: 3, Col: 2, Value: nil
Row: 4, Col: 1, Value: nil
Row: 4, Col: 2, Value: nil
Row: 5, Col: 1, Value: nil
Row: 5, Col: 2, Value: nil
Row: 6, Col: 1, Value: nil
Row: 6, Col: 2, Value: nil
Row: 7, Col: 1, Value: nil
Row: 7, Col: 2, Value: nil
Row: 8, Col: 1, Value: nil
Row: 8, Col: 2, Value: nil
Row: 9, Col: 1, Value: nil
Row: 9, Col: 2, Value: nil
Row: 10, Col: 1, Value: nil
Row: 10, Col: 2, Value: nil
(large solid box) New
Millennium
(large hollow box) Competitive
funds
average
THE CONSUMER PRICE INDEX is a widely recognized
measure of inflation calculated by the U.S.
government.
Other illustrations of fund performance may show
moving averages over specified periods.
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 or a free annual report, call
1-800-544-8888.
TOTAL RETURNS ARE BASED ON PAST RESULTS AND ARE
NOT AN INDICATION OF FUTURE PERFORMANCE.
THE FUND IN DETAIL
CHARTER
NEW MILLENNIUM IS A MUTUAL FUND: an investment
that pools shareholders' money and invests it
toward a specified goal. In technical terms, the
fund is currently a diversified fund of Fidelity
Mt. Vernon Street Trust, an open-end management
investment company organized as a Massachusetts
business trust on October 12, 1982.
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 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. Fidelity
will mail proxy materials in advance, including a
voting card and information about the proposals to
be voted on. The number of votes you are entitled
to is based upon the dollar value of your
investment.
FMR AND ITS AFFILIATES
The fund is managed by FMR, which chooses the
fund's investments and handles its business
affairs. Fidelity Management & Research (U.K.)
Inc. (FMR U.K.), in London, England, and Fidelity
Management & Research (Far East) Inc. (FMR Far
East), in Tokyo, Japan, assist FMR with foreign
investments.
Neal Miller is manager and Vice President
of New Millennium, which he has managed since
December 1992. Previously, he managed
Aggressive Equity and Special Equity
Discipline. Mr. Miller joined Fidelity in
1988.
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 Service Co. (FSC) performs
transfer agent servicing functions for the fund.
FMR Corp. is the ultimate parent company of
FMR, FMR Far East, and FMR U.K. Through ownership
of voting common stock, members of the Edward C.
Johnson 3d family form a controlling group with
respect to FMR Corp. Changes may occur in the
Johnson family group, through death or disability,
which would result in changes in each individual
family member's holding of stock. Such changes
could result in one or more family members
becoming holders of over 25% of the stock. FMR
Corp. has received an opinion of counsel that
changes in the composition of the Johnson family
group under these circumstances would not result
in the termination of the fund's management or
distribution contracts and, accordingly, would not
require a shareholder vote to continue operation
under those contracts.
FMR may use its broker-dealer affiliates and other
firms that sell fund shares to carry out the
fund's transactions, provided that the fund
receives brokerage services and commission rates
comparable to those of other broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
THE FUND SEEKS CAPITAL APPRECIATION over the long
term by investing in all types of equity
securities, including common stocks, preferred
stocks, and securities that are convertible into
stocks, although the fund may also invest in other
types of securities.
The fund's management style focuses on identifying
future beneficiaries of social and economic
change. FMR examines social attitudes, legislative
actions, economic plans, product innovation,
demographics, and other factors to learn what
underlying trends are shaping the marketplace.
Based on its interpretation of these trends, FMR
tries to identify the industries and companies
that will benefit, and then analyzes the
fundamental values of each potential investment.
FMR favors domestic and foreign companies that
show the potential for stronger-than-expected
earnings or growth. FMR also emphasizes industries
that are undervalued or out-of-favor. These
strategies typically lead to investments in small-
and medium- sized companies, which can be more
risky than larger companies.
Stock values fluctuate in response to the
activities of individual companies and general
market and economic conditions. The fund
spreads investment risk by limiting its holdings
in any one company or industry. FMR may use
various investment techniques to hedge the fund's
risks, but there is no guarantee that these
strategies will work as FMR intends. When you sell
your shares, they may be worth more or less than
what you paid for them.
FMR normally invests the fund's assets according
to its investment strategy. The fund also
reserves the right to invest without limitation in
preferred stocks and investment-grade debt
instruments 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, and strategies FMR may employ
in pursuit of the fund's investment objective. A
summary of risks and restrictions associated with
these instrument types and investment practices is
included as well. A complete listing of the
fund's policies and limitations and more detailed
information about the fund's investments is
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 to the full extent
permitted unless it believes 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 1-800-544-8888.
EQUITY SECURITIES may include common stocks,
preferred stocks, convertible securities, and
warrants. Common stocks, the most familiar type,
represent an equity (ownership) interest in a
corporation. Although equity securities
have a history of long-term growth in value,
their prices fluctuate based on changes in a
company's financial condition and on overall
market and economic conditions. Smaller companies
are especially sensitive to these factors.
RESTRICTIONS: With respect to 75% of total assets,
the fund may not own more than 10% of the
outstanding voting securities of a single issuer.
DEBT SECURITIES. Bonds and other debt instruments
are used by issuers to borrow money from
investors. The issuer pays the investor a fixed or
variable rate of interest, and must repay the
amount borrowed at maturity. Some debt securities,
such as zero coupon bonds, do not pay current
interest, but are purchased at a discount from
their face values. In general, bond prices rise
when interest rates fall, and vice versa. Debt
securities, loans, and other direct debt have
varying degrees of quality and varying levels of
sensitivity to changes in interest rates.
Longer-term bonds are generally more sensitive to
interest rate changes than short-term bonds.
RESTRICTIONS: The fund does not currently intend
to invest more than 5% of its assets in
lower-quality debt securities, commonly called
"junk bonds." (Those rated below Baa by Moody's or
BBB by S&P, and unrated securities judged by FMR
to be of equivalent quality.)
FOREIGN SECURITIES and foreign currencies may
involve additional risks. These include currency
fluctuations, risks relating to political or
economic conditions in the foreign country, and
the potentially less stringent investor protection
and disclosure standards of foreign markets. In
addition to the political and economic factors
that can affect foreign securities, a governmental
issuer may be unwilling to repay principal and
interest when due, and may require that the
conditions for payment be renegotiated. These
factors could make foreign investments, especially
those in developing countries, more volatile.
ADJUSTING INVESTMENT EXPOSURE. The fund can use
various techniques to increase or decrease its
exposure to changing security prices, interest
rates, currency exchange rates, commodity prices,
or other factors that affect security values.
These techniques may involve derivative
transactions such as buying and selling options
and futures contracts, entering into currency
exchange contracts or swap agreements, and
purchasing indexed securities.
FMR can use these practices to adjust the risk and
return characteristics of the fund's portfolio of
investments. If FMR judges market conditions
incorrectly or employs a strategy that does not
correlate well with the fund's investments, these
techniques could result in a loss, regardless of
whether the intent was to reduce risk or increase
return. These techniques may increase the
volatility of the fund and may involve a small
investment of cash relative to the magnitude of
the risk assumed. In addition, these techniques
could result in a loss if the counterparty to the
transaction does not perform as promised.
REPURCHASE AGREEMENTS. In a repurchase agreement,
the fund buys a security at one price and
simultaneously agrees to sell it back at a higher
price. Delays or losses could result if the other
party to the agreement defaults or becomes
insolvent.
ILLIQUID AND RESTRICTED SECURITIES. Some
investments may be determined by FMR, under the
supervision of the Board of Trustees, to be
illiquid, which means that they may be difficult
to sell promptly at an acceptable price. The sale
of other securities, including illiquid
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 assets would
be invested in illiquid securities.
OTHER INSTRUMENTS may
include securities of closed-end investment
companies and real estate-related investments.
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.
With respect to 75% of total assets, the fund may
not invest more than 5% of its total assets in any
one issuer. The fund also may not invest more than
25% of its total assets in any one industry. These
limitations do not apply to U.S. government
securities.
BORROWING. The fund may borrow from banks or from
other funds advised by FMR, or through reverse
repurchase agreements. If the fund borrows money,
its share price may be subject to greater
fluctuation until the borrowing is paid off. If
the fund makes additional investments while
borrowings are outstanding, this may be considered
a form of leverage.
RESTRICTIONS: The fund may borrow only for
temporary or emergency purposes, but not in an
amount exceeding 33% of its total assets.
LENDING. Lending securities to broker-dealers and
institutions, including FBSI, an affiliate of FMR,
is a means of earning income. This practice could
result in a loss or a delay in recovering the
fund's securities. The fund may also lend money to
other funds advised by FMR.
RESTRICTIONS: Loans, in the aggregate, may not
exceed 33% of the fund's total assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on
the preceding pages are fundamental, that is,
subject to change only by shareholder approval.
The following paragraph restates all those that
are fundamental. All policies stated throughout
this prospectus, other than those identified in
the following paragraph, can be changed without
shareholder approval.
The fund seeks capital appreciation. With respect
to 75% of total assets, the fund may not invest
more than 5% of its total assets in any one issuer
and may not own more than 10% of the outstanding
voting securities of a single issuer. The fund may
not invest more than 25% of its total assets in
any one industry. The fund may borrow only for
temporary or emergency purposes, but not in an
amount exceeding 33% of its total assets. Loans,
in the aggregate, may not exceed 33% of the fund's
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 affiliates who provide assistance
with these services. The fund also pays OTHER
EXPENSES, which are explained on page .
FMR may, from time to time, agree to reimburse the
fund for management fees and other expenses above
a specified limit. FMR retains the ability to be
repaid by the fund if expenses fall below the
specified limit prior to the end of the fiscal
year. Reimbursement arrangements, which may be
terminated at any time without notice, can
decrease the fund's expenses and boost its
performance.
MANAGEMENT FEE
The management fee is calculated and paid to FMR
every month. The amount of the fee is determined
by taking a BASIC FEE and then applying a
PERFORMANCE ADJUSTMENT. The performance adjustment
either increases or decreases the management fee,
depending on how well the fund has performed
relative to the S&P 500.
Manage = Ba +/- Performa
ment sic nce
fee fee adjustme
nt
THE BASIC FEE (calculated monthly) is calculated
by adding a group fee rate to an individual fund
fee rate, and multiplying the result by the fund's
average net assets. The group fee rate is based on
the average net assets of all the mutual funds
advised by FMR. This rate cannot rise above .52%,
and it drops as total assets under management
increase.
For November 1994, the group fee rate was __%. The
individual fund fee rate is .35%. The basic fee
rate for fiscal 1994 was __%.
THE PERFORMANCE ADJUSTMENT rate is calculated
monthly by comparing the fund's performance to
that of the S&P 500 over the most recent 36-month
period. The difference is translated into a dollar
amount that is added to or subtracted from the
basic fee. The maximum annualized performance
adjustment rate is ".20%.
The total management fee rate for fiscal 1994 was
__%. This rate was higher than that of most other
mutual funds as a result of a positive performance
adjustment.
UNDERSTANDING THE
MANAGEMENT FEE
The basic fee FMR receives
is designed to be responsive
to changes in FMR's total
assets under management.
Building this variable into the
fee calculation assures
shareholders that they will
pay a lower rate as FMR's
assets under management
increase.
Another variable, the
performance adjustment,
rewards FMR when the fund
outperforms the (an
established index of stock
market performance) and
reduces FMR's fee when the
fund underperforms this
index.
(checkmark)
FMR HAS SUB-ADVISORY AGREEMENTS with FMR U.K. and
FMR Far East. These sub-advisers provide FMR with
investment research and advice on issuers based
outside the United States. Under the sub-advisory
agreements, FMR pays FMR U.K. and FMR Far East
fees equal to 110% and 105%, respectively, of the
costs of providing these services.
The sub-advisers may also provide investment
management services. In return, FMR pays FMR U.K.
and FMR Far East a fee equal to 50% of its
management fee rate with respect to the fund's
investments that the sub-adviser manages on a
discretionary basis.
OTHER EXPENSES
While the management fee is a significant
component of the fund's annual operating costs,
the fund has other expenses as well.
The fund contracts with FSC to perform many
transaction and accounting functions. These
services include processing shareholder
transactions, valuing the fund's investments, and
handling securities loans. In fiscal 1994, the
fund paid FSC fees equal to __% of its average net
assets on an annualized basis.
The fund also pays other expenses, such as legal,
audit, and custodian fees; proxy solicitation
costs; and the compensation of trustees who are
not affiliated with Fidelity. A broker-dealer may
use a portion of the commissions paid by the fund
to reduce the fund's custodian or transfer agent
fees.
The fund's annualized portfolio turnover rate for
fiscal 1994 was __%. This rate varies from year to
year. High turnover rates increase transaction
costs and may increase taxable capital gains. FMR
considers these effects when evaluating the
anticipated benefits of short-term investing.
YOUR ACCOUNT
DOING BUSINESS WITH FIDELITY
Fidelity Investments was established in 1946 to
manage one of America's first mutual funds. Today,
Fidelity is the largest mutual fund company in the
country, and is known as an innovative provider of
high-quality financial services to individuals and
institutions.
In addition to its mutual fund business, the
company operates one of America's leading discount
brokerage firms, Fidelity Brokerage Services, Inc.
(FBSI). Fidelity is also a leader in providing
tax-sheltered retirement plans for individuals
investing on their own or through their employer.
Fidelity is committed to providing investors with
practical information to make investment
decisions. Based in Boston, Fidelity provides
customers with complete service 24 hours a day,
365 days a year, through a network of telephone
service centers around the country.
To reach Fidelity for general information, call
these numbers:
(small solid bullet) For mutual funds,
1-800-544-8888
(small solid bullet) For brokerage, 1-800-544-7272
If you would prefer to speak with a representative
in person, Fidelity has over __ walk-in Investor
Centers across the country.
TYPES OF ACCOUNTS
You may set up an account directly in the fund or,
if you own or intend to purchase individual
securities as part of your total investment
portfolio, you may consider investing in the fund
through a brokerage account.
If you are investing through FBSI or another
financial institution or investment professional,
refer to its program materials for any special
provisions regarding your investment in the fund.
The different ways to set up (register) your
account with Fidelity are listed at right.
The account guidelines that follow may not apply
to certain retirement accounts. If your employer
offers the fund through a retirement program,
contact your employer for more information.
Otherwise, call Fidelity directly.
FIDELITY FACTS
Fidelity offers the broadest
selection of mutual funds
in the world.
(solid bullet) Number of Fidelity mutual
funds: over ___
(solid bullet) Assets in Fidelity mutual
funds: over $___ billion
(solid bullet) Number of shareholder
accounts: over __ million
(solid bullet) Number of investment
analysts and portfolio
managers: over ___
(checkmark)
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).
RETIREMENT
TO SHELTER YOUR RETIREMENT SAVINGS FROM TAXES
Retirement plans allow individuals to shelter
investment income and capital gains from current
taxes. In addition, contributions to these
accounts may be tax deductible. Retirement
accounts require special applications and
typically have lower minimums.
(solid bullet) INDIVIDUAL RETIREMENT ACCOUNTS
(IRAS) allow anyone of legal age and under 70 with
earned income to invest up to $2,000 per tax year.
Individuals can also invest in a spouse's IRA if
the spouse has earned income of less than $250.
(solid bullet) ROLLOVER IRAS retain special tax
advantages for certain distributions from
employer-sponsored retirement plans.
(solid bullet) KEOGH OR CORPORATE PROFIT SHARING
AND MONEY PURCHASE PENSION PLANS allow
self-employed individuals or small business owners
(and their employees) to make tax-deductible
contributions for themselves and any eligible
employees up to $30,000 per year.
(solid bullet) SIMPLIFIED EMPLOYEE PENSION PLANS
(SEP-IRAS) provide small business owners or those
with self-employed income (and their eligible
employees) with many of the same advantages as a
Keogh, but with fewer administrative requirements.
(solid bullet) 403(B) CUSTODIAL ACCOUNTS are
available to employees of most tax-exempt
institutions, including schools, hospitals, and
other charitable organizations.
(solid bullet) 401(K) PROGRAMS allow employees of
corporations of all sizes to contribute a
percentage of their wages on a tax-deferred basis.
These accounts need to be established by the
trustee of the plan.
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).
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
Requires a special application.
HOW TO BUY SHARES
ONCE EACH BUSINESS DAY, TWO SHARE PRICES ARE
CALCULATED FOR THE FUND: the offering price and
the net asset value (NAV). The offering price
includes the 3% sales charge, which you pay when
you buy shares, unless you qualify for a reduction
or waiver as described on page . When you buy
shares at the offering price, Fidelity deducts 3%
and invests the rest at the NAV.
Shares are purchased at the next share price
calculated after your investment is received and
accepted. Share price is normally calculated at 4
p.m. Eastern time.
IF YOU ARE NEW TO FIDELITY, complete and sign an
account application and mail it along with your
check. You may also open your account in person or
by wire as described on page . If there is no
application accompanying this prospectus, call
1-800-544-8888.
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY
FUND, you can:
(small solid bullet) Mail in an application with a
check, or
(small solid bullet) Open your account by
exchanging from another Fidelity fund.
IF YOU ARE INVESTING THROUGH A TAX-SHELTERED
RETIREMENT PLAN, such as an IRA, for the first
time, you will need a special application.
Retirement investing also involves its own
investment procedures. Call 1-800-544-8888 for
more information and a retirement application.
If you buy shares by check or Fidelity Money
Line(registered trademark), and then sell those
shares by any method other than by exchange to
another Fidelity fund, the payment may be delayed
for up to seven business days to ensure that your
previous investment has cleared.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $2,500
For Fidelity retirement accounts $500
TO ADD TO AN ACCOUNT $250
For Fidelity retirement accounts $250
Through automatic investment plans $100
MINIMUM BALANCE $1,000
For Fidelity retirement accounts $500
UNDERSTANDING
SHARE PRICE
Let's say you invest $2,500 at
an offering price of $10. Of
the $10 offering price, 3%
($.30) is the sales charge,
and 97% ($9.70) represents
the NAV. The value of your
initial investment will be
$2,425 (250 shares worth
$9.70 each), and you will
have paid a sales charge of
$75.
(checkmark)
Row: 1, Col: 1, Value: 25.0
Row: 1, Col: 2, Value: 75.0
Row: 1, Col: 3, Value: 75.0
Row: 1, Col: 4, Value: 75.0
Row: 1, Col: 5, Value: 75.0
Row: 1, Col: 6, Value: 75.0
Row: 1, Col: 7, Value: 75.0
Row: 1, Col: 8, Value: 75.0
Row: 1, Col: 9, Value: 75.0
Row: 1, Col: 10, Value: 75.0
Row: 1, Col: 11, Value: 75.0
Row: 1, Col: 12, Value: 75.0
Row: 1, Col: 13, Value: 75.0
Row: 1, Col: 14, Value: 75.0
Row: 1, Col: 15, Value: 75.0
Row: 1, Col: 16, Value: 75.0
Row: 1, Col: 17, Value: 75.0
Row: 1, Col: 18, Value: 75.0
Row: 1, Col: 19, Value: 75.0
Row: 1, Col: 20, Value: 75.0
Row: 1, Col: 21, Value: 75.0
Row: 1, Col: 22, Value: 75.0
Row: 1, Col: 23, Value: 75.0
Row: 1, Col: 24, Value: 75.0
Row: 1, Col: 25, Value: 75.0
Row: 1, Col: 26, Value: 75.0
Row: 1, Col: 27, Value: 75.0
Row: 1, Col: 28, Value: 75.0
Row: 1, Col: 29, Value: 75.0
Row: 1, Col: 30, Value: 75.0
Row: 1, Col: 31, Value: 75.0
Row: 1, Col: 32, Value: 75.0
Row: 1, Col: 33, Value: 75.0
Row: 1, Col: 34, Value: 75.0
$2,500 Investment
3% sales charge = $75
Value of Investment = $2,425
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TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT
Phone 1-800-544-777 (phone_graphic) (small solid bullet) Exchange from another (small solid bullet)
Exchange from another
Fidelity fund account Fidelity fund account
with the same with the same
registration, including registration, including
name, address, and name, address, and
taxpayer ID number. taxpayer ID number.
(small solid bullet)
Use Fidelity Money
Line to transfer from
your bank account. Call
before your first use
to
verify that this
service
is in place on your
account. Maximum
Money Line: $50,000.
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Mail (mail_graphic) (small solid bullet) Complete and sign the (small solid bullet) Make your check
application. Make your payable to "Fidelity New
check payable to Millennium." Indicate
"Fidelity New your fund account
Millennium Fund." Mail number on your check
to the address and mail to the address
indicated on the printed on your account
application. statement.
(small solid bullet) Exchange by mail:
call
1-800-544-6666 for
instructions.
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In Person (hand_graphic) (small solid bullet) Bring your application (small solid bullet) Bring your
check to a
and check to a Fidelity Fidelity Investor Center.
Investor Center. Call Call 1-800-544-9797 for
1-800-544-9797 for the the center nearest you.
center nearest you.
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Wire (wire_graphic) (small solid bullet) Call 1-800-544-7777 to (small solid bullet) Not available
for
set up your account retirement accounts.
and to arrange a wire (small solid bullet) Wire to:
transaction. Not Bankers Trust
available for retirement Company,
accounts. Bank Routing
(small solid bullet) Wire within 24 hours to: #021001033,
Bankers Trust Account #00163053.
Company, Specify "Fidelity New
Bank Routing Millennium Fund" and
#021001033, include your account
Account #00163053. number and your
Specify "Fidelity New name.
Millennium Fund" and
include your new
account number and
your name.
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Automatically (automatic_graphic) (small solid bullet) Not available. (small solid bullet) Use Fidelity
Automatic
Account Builder. Sign
up for this service
when opening your
account, or call
1-800-544-6666 to add
it.
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(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired: 1-800-544-0118
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HOW TO SELL SHARES
You can arrange to take money out of your fund
account at any time by selling (redeeming) some or
all of your shares. Your shares will be sold at
the next share price calculated after your order
is received and accepted. Share price is normally
calculated at 4 p.m. Eastern time.
TO SELL SHARES IN A NON-RETIREMENT ACCOUNT, you
may use any of the methods described on these two
pages.
TO SELL SHARES IN A FIDELITY RETIREMENT ACCOUNT,
your request must be made in writing, except for
exchanges to other Fidelity funds, which can be
requested by phone or in writing. Call
1-800-544-6666 for a retirement distribution form.
IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR
SHARES, leave at least $1,000 worth of shares in
the account to keep it open ($500 for retirement
accounts).
TO SELL SHARES BY BANK WIRE OR FIDELITY MONEY
LINE, you will need to sign up for these services
in advance.
CERTAIN REQUESTS MUST INCLUDE A SIGNATURE
GUARANTEE. It is designed to protect you and
Fidelity from fraud. Your request must be made in
writing and include a signature guarantee if any
of the following situations apply:
(small solid bullet) You wish to redeem more than
$100,000 worth of shares,
(small solid bullet) Your account registration has
changed within the last 30 days,
(small solid bullet) The check is being mailed to
a different address than the one on your account
(record address),
(small solid bullet) The check is being made
payable to someone other than the account owner,
or
(small solid bullet) The redemption proceeds are
being transferred to a Fidelity account with a
different registration.
You should be able to obtain a signature guarantee
from a bank, broker (including Fidelity Investor
Centers), 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.
SELLING SHARES IN WRITING
Write a "letter of instruction" with:
(small solid bullet) Your name,
(small solid bullet) The fund's name,
(small solid bullet) Your fund account number,
(small solid bullet) The dollar amount or number
of shares to be redeemed, and
(small solid bullet) Any other applicable
requirements listed in the table at right.
Unless otherwise instructed, Fidelity will send a
check to the record address. Deliver your letter
to a Fidelity Investor Center, or mail it to:
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
ACCOUNT TYPE SPECIAL REQUIREMENTS
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Phone 1-800-544-777 (phone_graphic) All account types (small solid bullet) Maximum check
request:
except retirement $100,000.
(small solid bullet) For Money Line
transfers to
All account types your bank account; minimum:
$10; maximum: $100,000.
(small solid bullet) You may
exchange to other
Fidelity funds if both
accounts are registered with
the same name(s), address,
and taxpayer ID number.
Mail or in Person (mail_graphic)(hand_graphic) Individual, Joint (small solid bullet) The letter of
instruction must
Tenant, be signed by all persons
Sole Proprietorship required to sign for
, UGMA, UTMA transactions, exactly as their
Retirement account names appear on the
account.
(small solid bullet) The account
owner should
Trust complete a retirement
distribution form. Call
1-800-544-6666 to request
one.
Business or (small solid bullet) The trustee
must sign the
Organization letter indicating capacity as
trustee. If the trustee's name
is not in the account
registration, provide a copy of
the trust document certified
Executor, within the last 60 days.
Administrator, (small solid bullet) At least one
person
Conservator, authorized by corporate
Guardian resolution to act on the
account must sign the letter.
(small solid bullet) Include a
corporate
resolution with corporate seal
or a signature guarantee.
(small solid bullet) Call
1-800-544-6666 for
instructions.
Wire (wire_graphic) All account types (small solid bullet) You must sign
up for the wire
except retirement feature before using it. To
verify that it is in place, call
1-800-544-6666. Minimum
wire: $5,000.
(small solid bullet) Your wire
redemption request
must be received by Fidelity
before 4 p.m. Eastern time
for money to be wired on the
next business day.
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(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired: 1-800-544-0118
</TABLE>
INVESTOR SERVICES
Fidelity provides a variety of services to help
you manage your account.
INFORMATION SERVICES
FIDELITY'S TELEPHONE REPRESENTATIVES are available
24 hours a day, 365 days a year. Whenever you
call, you can speak with someone equipped to
provide the information or service you need.
24-HOUR SERVICE
ACCOUNT ASSISTANCE
1-800-544-6666
ACCOUNT BALANCES
1-800-544-7544
ACCOUNT TRANSACTIONS
1-800-544-7777
PRODUCT INFORMATION
1-800-544-8888
QUOTES
1-800-544-8544
RETIREMENT ACCOUNT
ASSISTANCE
1-800-544-4774
AUTOMATED SERVICE
(checkmark)
STATEMENTS AND REPORTS that Fidelity sends to you
include the following:
(small solid bullet) Confirmation statements
(after every transaction, except reinvestments,
that affects your account balance or your account
registration)
(small solid bullet) Account statements
(quarterly)
(small solid bullet) Financial reports (every six
months)
To reduce expenses, only one copy of most
financial reports will be mailed to your
household, even if you have more than one account
in the fund. Call 1-800-544-6666 if you need
copies of financial reports or historical account
information.
TRANSACTION SERVICES
EXCHANGE PRIVILEGE. You may sell your fund shares
and buy shares of other Fidelity funds by
telephone or in writing. The shares you exchange
will carry credit for any sales charge you
previously paid in connection with their purchase.
Note that exchanges out of the fund are limited to
four per calendar year, and that they may have tax
consequences for you. For details on policies and
restrictions governing exchanges, including
circumstances under which a shareholder's exchange
privilege may be suspended or revoked, see page .
SYSTEMATIC WITHDRAWAL PLANS let you set up
periodic redemptions from your account. Because of
the fund's sales charge, you may not want to set
up a systematic withdrawal plan during a period
when you are buying shares on a regular basis.
FIDELITY MONEY LINE(registered trademark) enables
you to transfer money by phone between your bank
account and your fund account. Most transfers are
complete within three business days of your call.
REGULAR INVESTMENT PLANS
One easy way to pursue your financial goals is to
invest money regularly. Fidelity offers convenient
services that let you transfer money into your
fund account, or between fund accounts,
automatically. While regular investment plans do
not guarantee a profit and will not protect you
against loss in a declining market, they can be an
excellent way to invest for retirement, a home,
educational expenses, and other long-term
financial goals. Certain restrictions apply for
retirement accounts. Call 1-800-544-6666 for more
information.
REGULAR INVESTMENT PLANS
FIDELITY AUTOMATIC ACCOUNT BUILDERSM
TO MOVE MONEY FROM YOUR BANK ACCOUNT TO A FIDELITY FUND
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MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Monthly or (small solid bullet) For a new account, complete the
quarterly appropriate section on the fund
application.
(small solid bullet) For existing accounts, call
1-800-544-6666 for an application.
(small solid bullet) To change the amount or frequency of
your investment, call 1-800-544-6666 at
least three business days prior to your
next scheduled investment date.
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DIRECT DEPOSIT
TO SEND ALL OR A PORTION OF YOUR PAYCHECK OR GOVERNMENT CHECK TO A FIDELITY FUNDA
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<S> <C> <C>
MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Every pay (small solid bullet) Check the appropriate box on the fund
period application, or call 1-800-544-6666 for an
authorization form.
(small solid bullet) Changes require a new authorization
form.
</TABLE>
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FIDELITY AUTOMATIC EXCHANGE SERVICE
TO MOVE MONEY FROM A FIDELITY MONEY MARKET FUND TO ANOTHER FIDELITY FUND
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MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Monthly, (small solid bullet) To establish, call 1-800-544-6666 after
bimonthly, both accounts are opened.
quarterly, or (small solid bullet) To change the amount or frequency of
annually your investment, call 1-800-544-6666.
</TABLE>
A BECAUSE ITS SHARE PRICE FLUCTUATES, THE FUND MAY
NOT BE AN APPROPRIATE CHOICE FOR DIRECT DEPOSIT OF
YOUR ENTIRE CHECK.
SHAREHOLDER AND ACCOUNT POLICIES
DIVIDENDS, CAPITAL GAINS, AND TAXES
The fund distributes substantially all of its net
income and capital gains to shareholders each
year. Normally, dividends and capital gains are
distributed in January and December.
DISTRIBUTION OPTIONS
When you open an account, specify on your
application how you want to receive your
distributions. If the option you prefer is not
listed on the application, call 1-800-544-6666 for
instructions. The fund offers four options:
1. REINVESTMENT OPTION. Your dividend and capital
gain distributions 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. INCOME-EARNED OPTION. Your capital gain
distributions will be automatically reinvested,
but you will be sent a check for each dividend
distribution.
3. CASH OPTION. You will be sent a check for your
dividend and capital gain distributions.
4. DIRECTED DIVIDENDS(registered trademark)
OPTION. Your dividend and capital gain
distributions will be automatically invested in
another identically registered Fidelity fund.
FOR RETIREMENT ACCOUNTS, all distributions are
automatically reinvested. When you are over 59
years old, you can receive distributions in cash.
SHARES PURCHASED THROUGH REINVESTMENT of dividend
and capital gain distributions are not subject to
the fund's 3% sales charge. Likewise, if you
direct distributions to a fund with a 3% sales
charge, you will not pay a sales charge on those
purchases.
When the fund deducts a distribution from its NAV,
the reinvestment price is the fund's NAV at the
close of business that day. Cash distribution
checks will be mailed within seven days.
UNDERSTANDING
DISTRIBUTIONS
As a fund shareholder, you
are entitled to your share of
the fund's net income and
gains on its investments. The
fund passes its earnings
along to its investors as
DISTRIBUTIONS.
The fund earns dividends
from stocks and interest from
bond, money market, and
other investments. These are
passed along as DIVIDEND
DISTRIBUTIONS. The fund
realizes capital gains
whenever it sells securities
for a higher price than it paid
for them. These are passed
along as CAPITAL GAIN
DISTRIBUTIONS.
(checkmark)
TAXES
As with any investment, you should consider how
your investment in the fund will be taxed. If your
account is not a tax-deferred retirement account,
you should be aware of these tax implications.
TAXES ON DISTRIBUTIONS. Distributions are subject
to federal income tax, and may also be subject to
state or local taxes. If you live outside the
United States, your distributions could also be
taxed by the country in which you reside. Your
distributions are taxable when they are paid,
whether you take them in cash or reinvest them.
However, distributions declared in December and
paid in January are taxable as if they were paid
on December 31.
For federal tax purposes, the fund's income and
short-term capital gain distributions are taxed as
dividends; long-term capital gain distributions
are taxed as long-term capital gains. Every
January, Fidelity will send you and the IRS a
statement showing the taxable distributions paid
to you in the previous year.
TAXES ON TRANSACTIONS. Your redemptions -
including exchanges to other Fidelity funds - are
subject to capital gains tax. A capital gain or
loss is the difference between the cost of your
shares and the price you receive when you sell
them.
Whenever you sell shares of the fund, Fidelity
will send you a confirmation statement showing how
many shares you sold and at what price. You will
also receive a consolidated transaction statement
every January. However, it is up to you or your
tax preparer to determine whether this sale
resulted in a capital gain and, if so, the amount
of tax to be paid. Be sure to keep your regular
account statements; the information they contain
will be essential in calculating the amount of
your capital gains.
"BUYING A DIVIDEND." If you buy shares just before
the fund deducts a distribution from its NAV, you
will pay the full price for the shares and then
receive a portion of the price back in the form of
a taxable distribution.
EFFECT OF FOREIGN TAXES. The fund may
pay withholding or other taxes to foreign
governments during the year. These taxes reduce
the fund's distributions, but are included in the
taxable income reported on your tax statement. You
may be able to claim an offsetting tax credit or
itemized deduction for foreign taxes paid by the
fund. Your tax statement will generally show the
amount of foreign tax for which a credit or
deduction may be available.
There are tax requirements that all funds must
follow in order to avoid federal taxation. In its
effort to adhere to these requirements, the fund
may have to limit its investment activity in some
types of instruments.
TRANSACTION DETAILS
THE FUND IS OPEN FOR BUSINESS each day the New
York Stock Exchange (NYSE) is open. Fidelity
normally calculates the fund's NAV and offering
price as of the close of business of the NYSE,
normally 4 p.m. Eastern time.
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 then dividing the result by
the number of shares outstanding.
The fund's assets are valued primarily on the
basis of market quotations. Foreign securities are
valued on the basis of quotations from the primary
market in which they are traded, and are
translated from the local currency into U.S.
dollars using current exchange rates. If
quotations are not readily available, or if the
values have been materially affected by events
occurring after the closing of a foreign market,
assets are valued by a method that the Board
of Trustees believes accurately reflects fair
value.
THE OFFERING PRICE (price to buy one share) is the
fund's NAV plus a sales charge. The sales charge
is 3% of the offering price, or 3.09% of the net
amount invested. The REDEMPTION PRICE (price to
sell one share) is the fund's 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 may only be liable for
losses resulting from unauthorized transactions if
it does not follow reasonable procedures designed
to verify the identity of the caller. Fidelity
will request personalized security codes or other
information, and may also record calls. You should
verify the accuracy of your confirmation
statements immediately after you receive them. If
you do not want the ability to redeem and exchange
by telephone, call Fidelity for instructions.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for
example, during periods of unusual market
activity), consider placing your order by mail or
by visiting a Fidelity Investor Center.
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 .
Purchase orders may be refused if, in FMR's
opinion, they would disrupt management of the
fund.
The fund currently intends to suspend sales of its
shares when its net assets reach approximately
$500 million. The fund reserves the right to
change this limit in the future, and to re-open
the fund to shareholders and/or new investors
after the current size limit has been reached.
Reinvestment of income dividends and capital gain
distributions and contributions made through a
401(k) program or a 403(b) plan may be permitted
during suspensions of sales.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your order
will be processed at the next offering price
calculated after your order is received and
accepted. 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 cancelled and you could be
liable for any losses or fees the fund or its
transfer agent has incurred.
TO AVOID THE COLLECTION PERIOD associated with
check and Money Line purchases, consider buying
shares by bank wire, U.S. Postal money order, U.S.
Treasury check, Federal Reserve check, or direct
deposit instead.
YOU MAY BUY SHARES OF THE FUND (AT THE OFFERING
PRICE) OR SELL THEM THROUGH A BROKER, who may
charge you a fee for this service. If you invest
through a broker or other institution, read its
program materials for any additional service
features or fees that may apply.
CERTAIN FINANCIAL INSTITUTIONS that have entered
into sales agreements with FDC may enter confirmed
purchase orders on behalf of customers by phone,
with payment to follow no later than the time when
the fund is priced on the following business day.
If payment is not received by that time, the
financial institution could be held liable for
resulting fees or losses.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your
shares will be sold at the next NAV calculated
after your request is received and accepted. Note
the following:
(small solid bullet) Normally, redemption proceeds
will be mailed to you on the next business day,
but if making immediate payment could adversely
affect the fund, it may take up to seven days to
pay you.
(small solid bullet) Fidelity Money Line
redemptions generally will be credited to your
bank account on the second or third business day
after your phone call.
(small solid bullet) The fund may hold payment on
redemptions until it is reasonably satisfied that
investments made by check or Fidelity Money Line
have been collected, which can take up to seven
business days.
(small solid bullet) Redemptions may be suspended
or payment dates postponed when the NYSE is closed
(other than weekends or holidays), when trading on
the NYSE is restricted, or as permitted by the
SEC.
IF YOUR ACCOUNT BALANCE FALLS BELOW $1,000, you
will be given 30 days' notice to reestablish the
minimum balance. If you do not increase your
balance, Fidelity reserves the right to close your
account and send the proceeds to you. Your shares
will be redeemed at the NAV on the day your
account is closed.
FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES,
such as providing historical account documents,
that are beyond the normal scope of its services.
FDC collects the proceeds from the fund's 3% sales
charge and may pay a portion of them to securities
dealers who have sold the fund's shares, or to
others, including banks and other financial
institutions (qualified recipients), under special
arrangements in connection with FDC's sales
activities. The sales charge paid to qualified
recipients is 2.25% of the fund's offering price.
FDC may, at its own expense, provide promotional
incentives to qualified recipients who support the
sale of shares of the fund without reimbursement
from the fund. In some instances, these incentives
may be offered only to certain institutions whose
representatives provide services in connection
with the sale or expected sale of significant
amounts of shares.
EXCHANGE RESTRICTIONS
As a shareholder, you have the privilege of
exchanging shares of the fund for shares of other
Fidelity funds. However, you should note the
following:
(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) If you exchange into a fund
with a sales charge, you pay the percentage-point
difference between that fund's sales charge and
any sales charge you have previously paid in
connection with the shares you are exchanging. For
example, if you had already paid a sales charge of
2% on your shares and you exchange them into a
fund with a 3% sales charge, you would pay an
additional 1% sales charge.
(small solid bullet) Exchanges may have tax
consequences for you.
(small solid bullet) Because excessive trading can
hurt fund performance and shareholders, the fund
reserves the right to temporarily or permanently
terminate the exchange privilege of any investor
who makes more than [four] exchanges out of the
fund per calendar year. Accounts under common
ownership or control, including accounts with the
same taxpayer identification number, will be
counted together for purposes of the four exchange
limit.
(small solid bullet) The exchange limit may be
modified for accounts in certain institutional
retirement plans to conform to plan exchange
limits and Department of Labor regulations. See
your plan materials for further information.
(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 coincide
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.
SALES CHARGE REDUCTIONS AND WAIVERS
REDUCTIONS. The fund's sales charge may be reduced
if you invest directly with Fidelity or through
prototype or prototype-like retirement plans
sponsored by FMR or FMR Corp. The amount you
invest, plus the value of your account, must fall
within the ranges shown below. However, purchases
made with assistance or intervention from a
financial intermediary are not eligible. Call
Fidelity to see if your purchase qualifies.
Ranges Sales charge Net amount invested
$0 - 249,999 3% 3.09%
$250,000 - 499,999 2% 2.04%
$500,000 - 999,999 1% 1.01%
$1,000,000 or more none none
The sales charge will also be reduced by the
percentage of any sales charge you previously paid
on investments in other Fidelity funds (not
including Fidelity's Foreign Currency Funds).
Similarly, your shares carry credit for any sales
charge you would have paid if the reductions in
the table above had not existed. These sales
charge credits only apply to purchases made in one
of the ways listed below, and only if you
continuously owned Fidelity fund shares or a
Fidelity brokerage core account, or participated
in The CORPORATEplan for Retirement Program.
1. By exchange from another Fidelity fund.
2. With proceeds of a transaction within a
Fidelity brokerage core account, including any
free credit balance, core money market fund, or
margin availability, to the extent such proceeds
were derived from redemption proceeds from another
Fidelity fund.
3. With redemption proceeds from one of Fidelity's
Foreign Currency Funds, if the Foreign Currency
Fund shares were originally purchased with
redemption proceeds from a Fidelity fund.
4. Through the Directed Dividends Option (see page
).
5. By participants in The CORPORATEplan for
Retirement Program when shares are purchased
through plan-qualified loan repayments, and for
exchanges into and out of the Managed Income
Portfolio.
WAIVERS. The fund's sales charge will not apply:
1. If you buy shares as part of an employee
benefit plan having more than 200 eligible
employees or a minimum of $3 million in plan
assets invested in Fidelity mutual funds.
2. To shares in a Fidelity Rollover IRA account
purchased with the proceeds of a distribution from
an employee benefit plan, provided that at the
time of the distribution, the employer or its
affiliate maintained a plan that both qualified
for waiver (1) above and had at least some of its
assets invested in Fidelity-managed products.
3. If you are a charitable organization (as
defined in Section 501(c)(3) of the Internal
Revenue Code) investing $100,000 or more.
4. If you purchase shares for a charitable
remainder trust or life income pool established
for the benefit of a charitable organization (as
defined by Section 501(c)(3) of the Internal
Revenue Code).
5. If you are an investor participating in the
Fidelity Trust Portfolios program.
6. To shares purchased through Portfolio Advisory
Services.
7. If you are a current or former trustee or
officer of a Fidelity fund or a current or retired
officer, director, or regular employee of FMR
Corp. or its direct or indirect subsidiaries (a
Fidelity Trustee or employee), the spouse of a
Fidelity trustee or employee, a Fidelity trustee
or employee acting as custodian for a minor child,
or a person acting as trustee of a trust for the
sole benefit of the minor child of a Fidelity
trustee or employee.
8. If you are a bank trust officer, registered
representative, or other employee of a qualified
recipient, as defined on page .
These waivers must be qualified through FDC in
advance. More detailed information about waivers
(1), (2), and (5) is contained in the Statement of
Additional Information. A representative of your
plan or organization should call Fidelity for more
information.
From Filler pages
FIDELITY NEW MILLENNIUMTM FUND
A FUND OF FIDELITY MT. VERNON STREET TRUST
STATEMENT OF ADDITIONAL INFORMATION
JANUARY 23, 1995
This Statement is not a prospectus but should be
read in conjunction with the fund's current
Prospectus (dated January 23, 1995). Please retain
this document for future reference. T he
fund's financial s tatements and financial
highlights, included in the Annual Report, for the
fiscal period ended November 30, 1994 is
incorporated herein by reference. To obtain an
additional copy of the Prospectus or the Annual
Report, please call Fidelity Distributors
Corporation at 1-800-544-8888.
TABLE OF CONTENTS PAGE
Investment Policies and Limitations 2
Portfolio Transactions 9
Valuation of Portfolio Securities 10
Performance 10
Additional Purchase and Redemption Information 12
Distributions and Taxes 13
FMR 14
Trustees and Officers 14
Management Contract 16
Contracts With Companies Affiliated With FMR 18
Description of the Trust 18
Financial Statements 18
INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (Far East) Inc.
(FMR Far East)
Fidelity Management & Research (U.K.) Inc. (FMR
U.K.)
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
TRANSFER AGENT
Fidelity Service Co. (FSC)
NMF-ptb -195
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)
of the fund. However, except for the fundamental
investment limitations set forth below, the
investment policies and limitations described in
this Statement of Additional Information are not
fundamental and may be changed without shareholder
approval. THE FOLLOWING ARE THE FUND'S
FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH IN
THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total
assets, purchase the securities of any issuer
(other than securities issued or guaranteed by the
U.S. government or any of its agencies or
instrumentalities) if, as a result, (a) more than
5% of the fund's total assets would be invested in
the securities of that issuer, or (b) the fund
would hold more than 10% of the outstanding voting
securities of that issuer;
(2) issue senior securities, except as permitted
under the Investment Company Act of 1940;
(3) borrow money, except that the fund may
borrow money for temporary or emergency purposes
(not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets
(including the amount borrowed) less liabilities
(other than borrowings). Any borrowings that come
to exceed this amount will be reduced within three
days (not including Sundays and holidays) to the
extent necessary to comply with the 33 1/3%
limitation;
(4) underwrite securities issued by others,
except to the extent that the fund may be
considered an underwriter within the meaning of
the Securities Act of 1933 in the disposition of
restricted securities;
(5) purchase 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, more than 25%
of the fund's total assets would be invested in
the securities of companies whose principal
business activities are in the same industry;
(6) purchase or sell real estate unless acquired
as a result of ownership of securities or other
instruments (but this shall not prevent the fund
from investing in securities or other instruments
backed by real estate or securities of companies
engaged in the real estate business);
(7) purchase or sell physical commodities unless
acquired as a result of ownership of securities or
other instruments (but this shall not prevent the
fund from purchasing or selling options and
futures contracts or from investing in securities
or other instruments backed by physical
commodities); or
(8) 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
limitation does not apply to purchases of debt
securities or to repurchase agreements.
(9) 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 does not currently intend to sell
securities short, unless it owns or has the right
to obtain securities equivalent in kind and amount
to the securities sold short, and provided that
transactions in futures contracts and options are
not deemed to constitute selling securities short.
(ii) The fund does not currently intend to
purchase securities on margin, except that the
fund may obtain such short-term credits as are
necessary for the clearance of transactions, and
provided that margin payments in connection with
futures contracts and options on futures contracts
shall not constitute purchasing securities on
margin.
(iii) The fund may borrow money only (a) from a
bank or from a registered investment company or
portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse
repurchase agreements are treated as borrowings
for purposes of fundamental investment limitation
(3)). The fund will not purchase any security
while borrowings representing more than 5% of its
total assets are outstanding. The fund will not
borrow from other funds advised by FMR or its
affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15%
of the fund's total assets.
(iv) The fund does not currently intend to
purchase any security if, as a result, more than
10% of its net assets would be invested in
securities that are deemed to be illiquid because
they are subject to legal or contractual
restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of
business at approximately the prices at which they
are valued.
(v) The fund does not currently intend to
purc hase interests in real estate
investment trusts that are not readily marketable
or interests in real estate limited
partnerships that are not listed on an exchange or
traded on the NASDAQ National Market System if,
as a result, the sum of such interests and other
investments considered illiquid under limitation
(iv) would exceed 10% of the fund's net
assets.
(vi) The fund does not currently intend to lend
assets other than securities to other parties,
except by (i) lending money (up to 5% of the
fund's net assets) to a registered investment
company or portfolio for which FMR or an affiliate
serves as investment adviser or (ii) acquiring
loans, loan participations, or other forms of
direct debt instruments and, in connection
therewith, assuming any associated unfunded
commitments of the sellers. (This limitation does
not apply to purchases of debt securities or to
repurchase agreements.)
(vii) The fund does not currently intend to (a)
purchase securities of other investment companies,
except in the open market where no commission
except the ordinary broker's commission is paid,
or (b) purchase or retain securities issued by
other open-end investment companies. Limitations
(a) and (b) do not apply to securities received as
dividends, through offers of exchange, or as a
result of a reorganization, consolidation, or
merger.
(viii) The fund does not currently intend to
purchase the securities of any issuer (other than
securities issued or guaranteed by domestic or
foreign governments or political subdivisions
thereof) if, as a result, more than 5% of its
total assets would be invested in the securities
of business enterprises that, including
predecessors, have a record of less than three
years of continuous operation.
(ix) The fund does not currently intend to
purchase warrants, valued at the lower of cost or
market, in excess of 5% of the fund's net assets.
Included in that amount, but not to exceed 2% of
the fund's net assets, may be warrants that are
not listed on the New York Stock Exchange or the
American Stock Exchange. Warrants acquired by the
fund in units or attached to securities are not
subject to these restrictions.
(x) The fund does not currently intend to invest
in oil, gas, or other mineral exploration or
development programs or leases.
(xi) 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
objectives, policies, and limitations as the
Fund.
For the fund's limitations on futures and options
transactions, see the section entitled
"Limitations on Futures and Options Transactions"
beginning on page 7.
AFFILIATED BANK TRANSACTIONS. T he fund may
engage in transactions with financial institutions
that are, or may be considered to be,
" a ffiliated persons" of the fund under the
Investment Company Act of 1940. These transactions
may include repurchase a greements with
custodian banks; short-term obligations of, and
repurchase agreements with, the 50 largest U.S.
banks (measured by deposits); m unicipal
securities; U.S. government securities with
affiliated financial institutions that are primary
dealers in these securities; short-term currency
transactions; and short-term borrowings. I n
accordance with exemptive orders issued by the
Securities and Exchange Commission, the Board of
Trustees has e stablished and periodically
reviews procedures applicable to transactions
involving affiliated f inancial
institutions.
FUND'S RIGHTS AS A SHAREHOLDER. The fund does not
intend to direct or administer the day-to-day
operations of any company. The fund, however, may
exercise its rights as a shareholder and may
communicate its views on important matters of
policy to management, the Board of Directors, and
shareholders of a company when FMR determines that
such matters could have a significant effect on
the value of the fund's investment in the company.
The activities that the fund may engage in, either
individually or in conjunction with others, may
include, among others, supporting or opposing
proposed changes in a company's corporate
structure or business activities; seeking changes
in a company's directors or management; seeking
changes in a company's direction or policies;
seeking the sale or reorganization of the company
or a portion of its assets; or supporting or
opposing third party takeover efforts. This area
of corporate activity is increasingly prone to
litigation and it is possible that the fund could
be involved in lawsuits related to such
activities. FMR will monitor such activities with
a view to mitigating, to the extent possible, the
risk of litigation against the fund and the risk
of actual liability if the fund is involved in
litigation. No guarantee can be made, however,
that litigation against the fund will not be
undertaken or liabilities incurred.
REPURCHASE AGREEMENTS. In a repurchase agreement,
the fund purchases a security and simultaneously
commits to resell that s ecurity to the
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.
A repurchase agreement involves the obligation of
the s eller to pay the agreed-upon resale
price, which obligation is in effect secured by
the value (at least equal to the amount of the
agreed-upon resale price and marked to market
daily) of the underlying security. The fund may
engage in a repurchase agreement with respect to
any security in which it is authorized to invest
( e xcept that the security may have a
maturity in excess of 397 days). While it does not
presently appear possible to eliminate all risks
from these transactions (particularly the
possibility of a decline in the market value of
the underlying securities, as well as delays and
costs to the fund in connection with bankruptcy
proceedings), it is the fund's current policy to
limit repurchase agreement transactions to those
parties whose creditworthiness has been reviewed
and found satisfactory by FMR.
REVERSE REPURCHASE AGREEMENTS. In a reverse
repurchase agreement, the fund sells a portfolio
instrument to another party, such as a bank or
broker-dealer, in return for cash and agrees to
repurchase the instrument at a particular price
and time. While a reverse repurchase agreement is
outstanding, the fund will maintain appropriate
liquid assets in a segregated custodial account to
cover its obligation under the agreement. The fund
will enter into reverse repurchase agreements only
with parties whose creditworthiness has been found
satisfactory by FMR. Such transactions may
increase fluctuations in the market value of the
fund's assets and may be viewed as a form of
leverage.
INTERFUND BORROWING PROGRAM. The fund has
received permission from the SEC to lend money to
and borrow from other funds advised by FMR or its
affiliates. Interfund loans and borrowings
normally will extend overnight, but can have a
maximum duration of seven days. Loans may be
called on one day's notice. The fund will lend
through the program only when the returns are
higher than those available at the same time from
other short-term instruments (such as repurchase
agreements), and will borrow through the program
only when the costs are equal to or lower than the
cost of bank loans. The fund may have to borrow
from a bank at a higher interest rate if an
interfund loan is called or not renewed. Any delay
in repayment to a lending fund could result in a
lost investment opportunity or additional
borrowing costs .
SECURITIES LENDING. The fund may lend securities
to parties such as broker-dealers or institutional
investors, including Fidelity Brokerage Services,
Inc. (FBSI). FBSI is a member of the New York
Stock Exchange and a subsidiary of FMR Corp.
Securities lending allows the fund to retain
ownership of the securities loaned and, at the
same time, to earn additional income. Since there
may be delays in the recovery of loaned
securities, or even a loss of rights in collateral
supplied should the borrower fail financially,
loans will be made only to parties deemed by FMR
to be of good standing. Furthermore, they will
only be made if, in FMR's judgment, the
consideration to be earned from such loans would
justify the risk.
FMR understands that it is the current view of the
SEC Staff that the fund may engage in loan
transactions only under the following conditions:
(1) the fund must receive 100% collateral in the
form of cash or cash equivalents (e.g., U.S.
Treasury bills or notes) from the borrower; (2)
the borrower must increase the collateral whenever
the market value of the securities loaned
(determined on a daily basis) rises above the
value of the collateral; (3) after giving notice,
the fund must be able to terminate the loan at any
time; (4) the fund must receive reasonable
interest on the loan or a flat fee from the
borrower, as well as amounts equivalent to any
dividends, interest, or other distributions on the
securities loaned and to any increase in market
value; (5) the fund may pay only reasonable
custodian fees in connection with the loan; and
(6) the Board of Trustees must be able to vote
proxies on the securities loaned, either by
terminating the loan or by entering into an
alternative arrangement with the borrower.
Cash received through loan transactions may be
invested in any security in which the fund is
authorized to invest. Investing this cash
subjects that investment, as well as the security
loaned, to market forces (i.e., capital
appreciation or depreciation).
LOWER- QUALITY DEBT SECURITIES. The fund may
purchase lower- quality debt securities
(those rated below Ba a by Moody's
Investors Service, Inc. or B BB by Standard
& Poor's Corporation , and unrated securities
judged by FMR to be of equivalent quality )
that have poor protection with respect to the
payment of interest and repayment of principal or
may be in default. These securities are often
considered to be speculative and involve greater
risk of loss or price changes due to changes in
the issuer's capacity to pay. The market prices of
lower- quality debt securities may fluctuate
more than those of higher- quality debt
securities and may decline significantly in
periods of general economic difficulty, which may
follow periods of rising interest rates.
While the market for high-yield corporate debt
securities has been in existence for many years
and has weathered previous economic downturns, the
1980s brought a dramatic increase in the use of
such securities to fund highly leveraged corporate
acquisitions and restructurings. Past experience
may not provide an accurate indication of the
future performance of the high-yield bond market,
especially during periods of economic recession.
In fact, from 1989 to 1991, the percentage of
lower- quality securities that defaulted
rose significantly above prior levels although the
default rate decreased in 1992 and 1993 .
The market for lower- quality debt
securities may be thinner and less active than
that for higher- quality debt securities,
which can adversely affect the prices at which the
former are sold. If market quotations are not
available, lower- quality debt securities
will be valued in accordance with procedures
established by the Board of Trustees, including
the use of outside pricing services. Judgment
plays a greater role in valuing high-yield
corporate debt securities than is the case for
securities for which more external sources for
quotations and last-sale information are
available. Adverse publicity and changing investor
perceptions may affect the ability of outside
pricing services to value lower- quality
debt securities and the fund's ability to dispose
of these securities.
Since the risk of default is higher for
lower-quality debt securities, FMR's research
and credit analysis are an especially important
part of managing securities of this type held by
the fund. In considering investments for the
fund, FMR will attempt to identify those issuers
of high-yielding securities whose financial
condition is adequate to meet future obligations,
has improved, or is expected to improve in the
future. FMR's analysis focuses on relative values
based on such factors as interest or dividend
coverage, asset coverage, earnings prospects, and
the experience and managerial strength of the
issuer.
The fund may choose, at its expense or in
conjunction with others, to pursue litigation or
otherwise to exercise its rights as a security
holder to seek to protect the interests of
security holders if it determines this to be in
the best interest of the fund's shareholders.
ILLIQUID INVESTMENTS are investments that cannot
be sold or disposed of in the ordinary course of
business at approximately the prices at which they
are valued. Under the supervision of the Board of
Trustees, FMR determines the liquidity of the
fund's investments and, through reports from FMR,
the Board monitors investments in illiquid
instruments. In determining the liquidity of the
fund's investments, FMR may consider various
factors, including (1) the frequency of trades and
quotations, (2) the number of dealers and
prospective purchasers in the marketplace, (3)
dealer undertakings to make a market, (4) the
nature of the security (including any demand or
tender features), and (5) the nature of the
marketplace for trades (including the ability to
assign or offset the fund's rights and obligations
relating to the investment). Investments currently
considered by the fund to be illiquid include
repurchase agreements not entitling the holder to
payment of principal and interest within seven
days, over-the-counter options, and non-government
stripped fixed-rate mortgage-backed securities.
Also, FMR may determine some restricted
securities, government-stripped fixed-rate
mortgage-backed securities, loans and other direct
debt instruments, emerging market securities,
and swap agreements to be illiquid. However,
with respect to over-the-counter options the fund
writes, all or a portion of the value of the
underlying instrument may be illiquid depending on
the assets held to cover the option and the nature
and terms of any agreement the fund may have to
close out the option before expiration. In the
absence of market quotations, illiquid investments
are priced at fair value as determined in good
faith by a committee appointed by the Board of
Trustees. If through a change in values, net
assets, or other circumstances, the fund were in a
position where more than 10% of its net assets
were invested in illiquid securities, it would
seek to take appropriate steps to protect
liquidity.
RESTRICTED SECURITIES generally can be sold in
privately negotiated transactions, pursuant to an
exemption from registration under the Securities
Act of 1933, or in a registered public offering.
Where registration is required, the fund may be
obligated to pay all or part of the registration
expense and a considerable period may elapse
between the time it decides to seek registration
and the time the fund may be permitted to sell a
security under an effective registration
statement. If, during such a period, adverse
market conditions were to develop, the fund might
obtain a less favorable price than prevailed when
it decided to seek registration of the security.
LOANS AND OTHER DIRECT DEBT INSTRUMENTS are
interests in amounts owed by a corporate,
governmental, or other borrower to another party.
They may represent amounts owed to lenders or
lending syndicates (loans and loan
participations), to suppliers of goods or services
(trade claims or other receivables), or to other
parties. Direct debt instruments involve a risk of
loss in case of default or insolvency of the
borrower and may offer less legal protection to
the fund in the event of fraud or
misrepresentation. In addition, loan
participations involve a risk of insolvency of the
lending bank or other financial intermediary.
Direct debt instruments may also include standby
financing commitments that obligate the fund to
supply additional cash to the borrower on demand.
SWAP AGREEMENTS. Swap agreements can be
individually negotiated and structured to include
exposure to a variety of different types of
investments or market factors. Depending on their
structure, swap agreements may increase or
decrease the fund's exposure to long- or
short-term interest rates. (in the U.S. or
abroad), foreign currency values, mortgage
securities, corporate borrowing rates, or other
factors such as security prices or inflation
rates. Swap agreements can take many different
forms and are known by a variety of names. The
fund is not limited to any particular form of swap
agreement if FMR determines it is consistent with
the fund's investment objective and policies.
In a typical cap or floor agreement, one party
agrees to make payments only under specified
circumstances, usually in return for payment of a
fee by the other party. For example, the buyer of
an interest rate cap obtains the right to receive
payments to the extent that a specified interest
rate exceeds an agreed-upon level, while the
seller of an interest rate floor is obligated to
make payments to the extent that a specified
interest rate falls below an agreed-upon level. An
interest rate collar combines elements of buying a
cap and selling a floor.
Swap agreements will tend to shift the fund's
investment exposure from one type of investment to
another. For example, if the fund agreed to
exchange payments in dollars for payments in
foreign currency, the swap agreement would tend to
decrease the fund's exposure to U.S. interest
rates and increase its exposure to foreign
currency and interest rates. Caps and floors have
an effect similar to buying or writing options.
Depending on how they are used, swap agreements
may increase or decrease the overall volatility of
the fund's investments and its share price.
The most significant factor in the performance of
swap agreements is the change in the specific
interest rate, currency, or other factors that
determine the amounts of payments due to and from
the fund. If a swap agreement calls for payments
by the fund, the fund must be prepared to make
such payments when due. In addition, if the
counterparty's creditworthiness declined, the
value of a swap agreement would be likely to
decline, potentially resulting in losses. The fund
expects to be able to eliminate its exposure under
swap agreements either by assignment or other
disposition, or by entering into an offsetting
swap agreement with the same party or a similarly
creditworthy party.
The fund will maintain appropriate liquid assets
in a segregated custodial account to cover its
current obligations under swap agreements. If the
fund enters into a swap agreement on a net basis,
it will segregate assets with a daily value at
least equal to the excess, if any, of the fund's
accrued obligations under the swap agreement over
the accrued amount the fund is entitled to receive
under the agreement. If the fund enters into a
swap agreement on other than a net basis, it will
segregate assets with a value equal to the full
amount of the fund's accrued obligations under the
agreement.
INDEXED SECURITIES. The fund may purchase
securities whose prices are indexed to the prices
of other securities, securities indices,
currencies, precious metals or other commodities,
or other financial indicators. Indexed securities
typically, but not always, are debt securities or
deposits whose value at maturity or coupon rate is
determined by reference to a specific instrument
or statistic. Gold-indexed securities, for
example, typically provide for a maturity value
that depends on the price of gold, resulting in a
security whose price tends to rise and fall
together with gold prices. Currency-indexed
securities typically are short-term to
intermediate-term debt securities whose maturity
values or interest rates are determined by
reference to the values of one or more specified
foreign currencies, and may offer higher yields
than U.S. dollar-denominated securities of
equivalent issuers. Currency-indexed securities
may be positively or negatively indexed; that is,
their maturity value may increase when the
specified currency value increases, resulting in a
security that performs similarly to a
foreign-denominated instrument, or their maturity
value may decline when foreign currencies
increase, resulting in a security whose price
characteristics are similar to a put on the
underlying currency. Currency-indexed securities
may also have prices that depend on the values of
a number of different foreign currencies relative
to each other.
The performance of indexed securities depends to a
great extent on the performance of the security,
currency, or other instrument to which they are
indexed, and may also be influenced by interest
rate changes in the U.S. and abroad. At the same
time, indexed securities are subject to the credit
risks associated with the issuer of the security,
and their values may decline substantially if the
issuer's creditworthiness deteriorates. Recent
issuers of indexed securities have included banks,
corporations, and certain U.S. government
agencies. Indexed securities may be more volatile
than the underlying instruments.
FOREIGN INVESTMENTS. Investing in securities
issued by companies or other issuers whose
principal activities are outside the United States
may involve significant risks in addition to
the risks inherent in U.S. investments. The value
of securities denominated in foreign currencies
and of dividends and interest paid with respect
to such securities will fluctuate based on the
relative strength of the U.S. dollar. In addition,
there is generally less publicly available
information about foreign issuers' financial
condition and operations, particularly those not
subject to the disclosure and reporting
requirements of the U.S. securities laws.
F oreign issuers are generally not bound by
uniform accounting , auditing, and financial
reporting requirements and standards of
practice comparable to those applicable to U.S.
issuers. Further, economies of particular
countries or areas of the world may differ
favorable or unfavorably from the economy of the
United States.
Investing abroad also involves different political
and economic risks. Foreign investments may be
affected by actions of foreign governments adverse
to the interests of U.S. investors, including the
possibility of expropriation or nationalization of
assets, confiscatory taxation, restrictions on
U.S. investment or on the ability to repatriate
assets or convert currency into U.S. dollars, or
other government intervention. There may be a
greater possibility of default by foreign
governments or foreign government-sponsored
enterprises. Investments in foreign countries also
involve a risk of local political, economic, or
social instability, military action or unrest, or
adverse diplomatic developments. There is no
assurance that FMR will be able to anticipate
these potential events or counter their effects.
The considerations noted above generally are
intensified for investments in developing
countries. Developing countries may have
relatively unstable governments, economies based
on only a few industries, and securities markets
that trade a small number of securities.
The fund may invest in foreign securities that
impose restrictions on transfer within the U.S. or
to U.S. persons. Although securities subject to
transfer restrictions may be marketable abroad,
they may be less liquid than foreign securities of
the same class that are not subject to such
restrictions.
The fund may invest in American Depositary
Receipts and European Depositary Receipts (ADRs
and EDRs), which are certificates evidencing
ownership of shares of a foreign-based issuer held
in trust by a bank or similar financial
institution. Designed for use in U.S. and European
securities markets, respectively, ADRs and EDRs
are alternatives to the purchase of the underlying
securities in their national markets and
currencies.
FOREIGN CURRENCY TRANSACTIONS. The fund may
conduct foreign currency transactions on a
spot (i.e., cash) basis or by entering into
forward currency contracts to purchase or sell
foreign currencies at a future date and price.
The fund will convert currency on a spot
basis from time to time , and investors
should be aware of the costs of currency
conversion. Although foreign exchange dealers
generally do not charge a fee for conversion, they
do realize a profit based on the difference
between the prices at which they are buying and
selling various currencies. Thus, a dealer may
offer to sell a foreign currency to the fund at
one rate, while offering a lesser rate of exchange
should the fund desire to resell that currency to
the dealer. Forward contracts are generally traded
in an interbank market conducted directly
between currency traders (usually large commercial
banks) and their customers. The parties to a
forward contract may agree to offset or terminate
the contract before its maturity, or may hold the
contract to maturity and complete the contemplated
currency exchange.
The fund may use currency forward contracts for
any purpose consistent with its investment
objective. The following discussion summarizes the
principal currency management strategies involving
forward contracts that could be used by the fund.
The fund may also use swap agreements, indexed
securities, and options and futures contracts
relating to foreign currencies for the same
purposes.
When the fund agrees to buy or sell a
security denominated in a foreign
currenc y , it may desire to "lock in" the
U.S. dollar price of the securities. By
entering into a f orward contract for
the purchase or sale , for a fixed amount of
U.S. dollars, of the amount of foreign currency
involved in the underlying security transaction,
the fund will be able to protect itself against an
adverse change in foreign currency values between
the date the security is purchased or sold and the
date on which payment is made or received.
This technique is sometimes referred to as a
"settlement hedge" or "transaction hedge." The
fund may also enter into forward contracts
to purchase or sell a foreign currency in
anticipation of future purchases or sales of
securities denominated in foreign currency, even
if the specific investments have not yet been
selected by FMR.
The fund may also use forward contracts to hedge
against a decline in the value of existing
investments denominated in foreign currency. For
example, if the fund owned securities denominated
in pounds sterling, it could enter into a forward
contract to sell pounds sterling in return for
U.S. dollars to hedge against possible declines in
the pound's value. Such a hedge, sometimes
referred to as a "position hedge," would tend to
offset both positive and negative currency
fluctuations, but would not offset changes in
security values caused by other factors. The fund
could also hedge the position by selling another
currency expected to perform similarly to the
pound sterling - for example, by entering into a
forward contract to sell Deutschemarks or European
Currency Units in return for U.S. dollars. This
type of hedge, sometimes referred to as a "proxy
hedge," could offer advantages in terms of cost,
yield, or efficiency, but generally would not
hedge currency exposure as effectively as a simple
hedge into U.S. dollars. Proxy hedges may result
in losses if the currency used to hedge does not
perform similarly to the currency in which the
hedged securities are denominated.
The fund may enter into forward contracts to
shift its investment exposure from one currency
into another. This may include shifting exposure
from U.S. dollars to a foreign currency, or from
one foreign currency to another foreign currency.
For example, if the fund held investments
denominated in Deutschemarks and purchased Swiss
Francs. This type of strategy, sometimes known as
a "cross-hedge" will tend to reduce or eliminate
exposure to the currency that is sold, and
increase exposure to the currency that is
purchased, much as if the fund had sold a security
denominated in one currency and purchased an
equivalent security denominated in another.
Cross-hedges protect against losses resulting from
a decline in the hedged currency, but will cause
the fund to assume the risk of fluctuations in the
value of the currency it purchases.
Under certain conditions, SEC guidelines require
mutual funds to set aside appropriate liquid
assets in a segregated custodial account to cover
currency forward contracts. As required by SEC
guidelines, the fund will segregate assets to
cover currency forward contracts, if any, whose
purpose is essentially speculative. The fund will
not segregate assets to cover forward contracts
entered into for hedging purposes, including
settlement hedges, position hedges, and proxy
hedges.
Successful use of forward currency contracts will
depend on FMR's skill in analyzing and predicting
currency values. Currency management strategies
may substantially change the fund's investment
exposure to changes in currency exchange rates,
and could result in losses to the fund if
currencies do not perform as FMR anticipates. For
example, if a currency's value rose at a time when
FMR had hedged the fund by selling that currency
in exchange for dollars, the fund would be unable
to participate in the currency's appreciation. If
FMR hedges currency exposure through proxy hedges,
the fund could realize currency losses from the
hedge and the security position at the same time
if the two currencies do not move in tandem.
Similarly, if FMR increases the fund's exposure to
a foreign currency, and that currency's value
declines, the fund will realize a loss. There is
no assurance that FMR's use of forward currency
contracts will be advantageous to the fund or that
it will hedge at an appropriate time.
SHORT SALES "AGAINST THE BOX". If the fund enters
into a short sale against the box, it will be
required to set aside securities equivalent in
kind and amount to the securities sold short (or
securities convertible or exchangeable into such
securities) and will be required to hold such
securities while the short sale is outstanding.
The fund will incur transaction costs, including
interest expense, in connection with opening,
maintaining, and closing short sales against the
box.
LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS.
The fund has filed a notice of eligibility for
exclusion from the definition of the term
"commodity pool operator" with the Commodity
Futures Trading Commission (CFTC) and the National
Futures Association, which regulate trading in the
futures markets. The fund intends to comply with
Rule 4.5 under the Commodity Exchange Act, which
limits the extent to which the fund can commit
assets to initial margin deposits and option
premiums.
In addition, the fund will not: (a) sell futures
contracts, purchase put options, or write call
options if, as a result, more than 25% of fund's
total assets would be hedged with futures and
options under normal conditions; (b) purchase
futures contracts or write put options if, as a
result, the fund's total obligations upon
settlement or exercise of purchased futures
contracts and written put options would exceed 25%
of its total assets; or (c) purchase call options
if, as a result, the current value of option
premiums for call options purchased by the fund
would exceed 5% of the fund's total assets. These
limitations do not apply to options attached to
acquired or traded together with their underlying
securities, and do not apply to securities that
incorporate features similar to options.
The above limitations on the fund's investments in
futures contracts and options, and the fund's
policies regarding futures contracts and options
discussed elsewhere in this Statement of
Additional Information may be changed as
regulatory agencies permit.
FUTURES CONTRACTS. When the fund purchases a
futures contract, it agrees to purchase a
specified underlying instrument at a specified
future date. When the fund sells a futures
contract, it agrees to sell the underlying
instrument at a specified future date. The price
at which the purchase and sale will take place is
fixed when the fund enters into the contract. Some
currently available futures contracts are based on
specific securities, such as U.S. Treasury bonds
or notes, and some are based on indices of
securities prices, such as the Standard & Poor's
Composite Index of 500 Stocks (S&P 500).
Futures can be held until their delivery dates, or
can be closed out before then if a liquid
secondary market is available.
The value of a futures contract tends to increase
and decrease in tandem with the value of its
underlying instrument. Therefore, purchasing
futures contracts will tend to increase the fund's
exposure to positive and negative price
fluctuations in the underlying instrument, much as
if it had purchased the underlying instrument
directly. When the fund sells a futures contract,
by contrast, the value of its futures position
will tend to move in a direction contrary to the
market. Selling futures contracts, therefore, will
tend to offset both positive and negative market
price changes, much as if the underlying
instrument had been sold.
FUTURES MARGIN PAYMENTS. The purchaser or seller
of a futures contract is not required to deliver
or pay for the underlying instrument unless the
contract is held until the delivery date. However,
both the purchaser and seller are required to
deposit "initial margin" with a futures broker,
known as a futures commission merchant (FCM), when
the contract is entered into. Initial margin
deposits are typically equal to a percentage of
the contract's value. If the value of either
party's position declines, that party will be
required to make additional "variation margin"
payments to settle the change in value on a daily
basis. The party that has a gain may be entitled
to receive all or a portion of this amount.
Initial and variation margin payments do not
constitute purchasing securities on margin for
purposes of the fund's investment limitations. In
the event of the bankruptcy of an FCM that holds
margin on behalf of the fund, the fund may be
entitled to return of margin owed to it only in
proportion to the amount received by the FCM's
other customers, potentially resulting in losses
to the fund.
PURCHASING PUT AND CALL OPTIONS. By purchasing a
put option, the fund obtains the right (but not
the obligation) to sell the option's underlying
instrument at a fixed strike price. In return for
this right, the fund pays the current market price
for the option (known as the option premium).
Options have various types of underlying
instruments, including specific securities,
indices of securities prices, and futures
contracts. The fund may terminate its position in
a put option it has purchased by allowing it to
expire or by exercising the option. If the option
is allowed to expire, the fund will lose the
entire premium it paid. If the fund exercises the
option, it completes the sale of the underlying
instrument at the strike price. The fund may also
terminate a put option position by closing it out
in the secondary market at its current price, if a
liquid secondary market exists.
The buyer of a typical put option can expect to
realize a gain if security prices fall
substantially. However, if the underlying
instrument's price does not fall enough to offset
the cost of purchasing the option, a put buyer can
expect to suffer a loss (limited to the amount of
the premium paid, plus related transaction costs).
The features of call options are essentially the
same as those of put options, except that the
purchaser of a call option obtains the right to
purchase, rather than sell, the underlying
instrument at the option's strike price. A call
buyer typically attempts to participate in
potential price increases of the underlying
instrument with risk limited to the cost of the
option if security prices fall. At the same time,
the buyer can expect to suffer a loss if security
prices do not rise sufficiently to offset the cost
of the option.
WRITING PUT AND CALL OPTIONS. When the fund
writes a put option, it takes the opposite side of
the transaction from the option's purchaser. In
return for receipt of the premium, the fund
assumes the obligation to pay the strike price for
the option's underlying instrument if the other
party to the option chooses to exercise it. When
writing an option on a futures contract, the fund
will be required to make margin payments to an FCM
as described above for futures contracts. The fund
may seek to terminate its position in a put option
it writes before exercise by closing out the
option in the secondary market at its current
price. If the secondary market is not liquid for a
put option the fund has written, however, the fund
must continue to be prepared to pay the strike
price while the option is outstanding, regardless
of price changes, and must continue to set aside
assets to cover its position.
If security prices rise, a put writer would
generally expect to profit, although its gain
would be limited to the amount of the premium it
received. If security prices remain the same over
time, it is likely that the writer will also
profit, because it should be able to close out the
option at a lower price. If security prices fall,
the put writer would expect to suffer a loss. This
loss should be less than the loss from purchasing
the underlying instrument directly, however,
because the premium received for writing the
option should mitigate the effects of the decline.
Writing a call option obligates the fund to sell
or deliver the option's underlying instrument, in
return for the strike price, upon exercise of the
option. The characteristics of writing call
options are similar to those of writing put
options, except that writing calls generally is a
profitable strategy if prices remain the same or
fall. Through receipt of the option premium, a
call writer mitigates the effects of a price
decline. At the same time, because a call writer
must be prepared to deliver the underlying
instrument in return for the strike price, even if
its current value is greater, a call writer gives
up some ability to participate in security price
increases.
COMBINED POSITIONS. The fund may purchase and
write options in combination with each other, or
in combination with futures or forward contracts,
to adjust the risk and return characteristics of
the overall position. For example, the fund may
purchase a put option and write a call option on
the same underlying instrument, in order to
construct a combined position whose risk and
return characteristics are similar to selling a
futures contract. Another possible combined
position would involve writing a call option at
one strike price and buying a call option at a
lower price, in order to reduce the risk of the
written call option in the event of a substantial
price increase. Because combined options positions
involve multiple trades, they result in higher
transaction costs and may be more difficult to
open and close out.
CORRELATION OF PRICE CHANGES. Because there are a
limited number of types of exchange-traded options
and futures contracts, it is likely that the
standardized contracts available will not match
the fund's current or anticipated investments
exactly. The fund may invest in options and
futures contracts based on securities with
different issuers, maturities, or other
characteristics from the securities in which it
typically invests, which involves a risk that the
options or futures position will not track the
performance of the fund's other investments.
Options and futures prices can also diverge from
the prices of their underlying instruments, even
if the underlying instruments match the fund's
investments well. Options and futures prices are
affected by such factors as current and
anticipated short-term interest rates, changes in
volatility of the underlying instrument, and the
time remaining until expiration of the contract,
which may not affect security prices the same way.
Imperfect correlation may also result from
differing levels of demand in the options and
futures markets and the securities markets, from
structural differences in how options and futures
and securities are traded, or from imposition of
daily price fluctuation limits or trading halts.
The fund may purchase or sell options and futures
contracts with a greater or lesser value than the
securities it wishes to hedge or intends to
purchase in order to attempt to compensate for
differences in volatility between the contract and
the securities, although this may not be
successful in all cases. If price changes in the
fund's options or futures positions are poorly
correlated with its other investments, the
positions may fail to produce anticipated gains or
result in losses that are not offset by gains in
other investments.
LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There
is no assurance a liquid secondary market will
exist for any particular options or futures
contract at any particular time. Options may have
relatively low trading volume and liquidity if
their strike prices are not close to the
underlying instrument's current price. In
addition, exchanges may establish daily price
fluctuation limits for options and futures
contracts, and may halt trading if a contract's
price moves upward or downward more than the limit
in a given day. On volatile trading days when the
price fluctuation limit is reached or a trading
halt is imposed, it may be impossible for the fund
to enter into new positions or close out existing
positions. If the secondary market for a contract
is not liquid because of price fluctuation limits
or otherwise, it could prevent prompt liquidation
of unfavorable positions, and potentially could
require the fund to continue to hold a position
until delivery or expiration regardless of changes
in its value. As a result, the fund's access to
other assets held to cover its options or futures
positions could also be impaired.
OTC OPTIONS. Unlike exchange-traded options,
which are standardized with respect to the
underlying instrument, expiration date, contract
size, and strike price, the terms of
over-the-counter options (options not traded on
exchanges) generally are established through
negotiation with the other party to the option
contract. While this type of arrangement allows
the fund greater flexibility to tailor an option
to its needs, OTC options generally involve
greater credit risk than exchange-traded options,
which are guaranteed by the clearing organization
of the exchanges where they are traded.
OPTIONS AND FUTURES RELATING TO FOREIGN
CURRENCIES. Currency futures contracts are
similar to forward currency exchange contracts,
except that they are traded on exchanges (and have
margin requirements) and are standardized as to
contract size and delivery date. Most currency
futures contracts call for payment or delivery in
U.S. dollars. The underlying instrument of a
currency option may be a foreign currency, which
generally is purchased or delivered in exchange
for U.S. dollars, or may be a futures contract.
The purchaser of a currency call obtains the right
to purchase the underlying currency, and the
purchaser of a currency put obtains the right to
sell the underlying currency.
The uses and risks of currency options and futures
are similar to options and futures relating to
securities or indices, as discussed above. The
fund may purchase and sell currency futures and
may purchase and write currency options to
increase or decrease its exposure to different
foreign currencies. The fund may also purchase and
write currency options in conjunction with each
other or with currency futures or forward
contracts. Currency futures and options values can
be expected to correlate with exchange rates, but
may not reflect other factors that affect the
value of the fund's investments. A currency hedge,
for example, should protect a Yen-denominated
security from a decline in the Yen, but will not
protect the fund against a price decline resulting
from deterioration in the issuer's
creditworthiness. Because the value of the fund's
foreign-denominated investments changes in
response to many factors other than exchange
rates, it may not be possible to match the amount
of currency options and futures to the value of
the fund's investments exactly over time.
ASSET COVERAGE FOR FUTURES AND OPTIONS POSITIONS.
The fund will comply with guidelines established
by the Securities and Exchange Commission with
respect to coverage of options and futures
strategies by mutual funds, and if the guidelines
so require will set aside appropriate liquid
assets in a segregated custodial account in the
amount prescribed. Securities held in a segregated
account cannot be sold while the futures or option
strategy is outstanding, unless they are replaced
with other suitable assets. As a result, there is
a possibility that segregation of a large
percentage of the fund's assets could impede
portfolio management or the fund's ability to meet
redemption requests or other current obligations.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio
securities are placed on behalf of the fund by FMR
pursuant to authority contained in the management
contract. If FMR grants investment
management authority to the sub-advisers (see the
section entitled "Management Contract"), the
sub-advisers are 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. In
selecting broker-dealers, subject to applicable
limitations of the federal securities laws, FMR
will consider various relevant factors, including,
but not limited to, the size and type of the
transaction; the nature and character of the
markets for the security to be purchased or sold;
the execution efficiency, settlement capability,
and financial condition of the broker-dealer firm;
the broker-dealer's execution services rendered on
a continuing basis; and the reasonableness of any
commissions. Generally, c ommissions for
foreign investments traded will be higher
than for U.S. investments and may not be subject
to negotiation.
The fund may execute portfolio transactions with
broker-dealers who provide research and execution
services to the fund or other accounts over which
FMR or its affiliates exercise investment
discretion. Such services may include advice
concerning the value of securities; the
advisability of investing in, purchasing, or
selling securities; the availability of securities
or the purchasers or sellers of securities;
furnishing analyses and reports concerning
issuers, industries, securities, economic factors
and trends, portfolio strategy, and performance of
accounts; and effecting securities transactions
and performing functions incidental thereto (such
as clearance and settlement). The selection of
such broker-dealers generally is made by FMR (to
the extent possible consistent with execution
considerations) in accordance with a ranking of
broker-dealers determined periodically by FMR's
investment staff based upon the quality of such
research and execution services provided.
The receipt of research from broker-dealers that
execute transactions on behalf of the fund may be
useful to FMR in rendering investment management
services to the fund or its other clients, and
conversely, such research provided by
broker-dealers who have executed transaction
orders on behalf of other FMR clients may be
useful to FMR in carrying out its obligations to
the fund. The receipt of such research has not
reduced FMR's normal independent research
activities; however, it enables FMR to avoid
additional expenses 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 other
Fidelity funds to the extent permitted by law. FMR
may use research services provided by and place
agency transactions with Fidelity Brokerage
Services, Inc. (FBSI) and Fidelity Brokerage
Services, Ltd. (FBSL), subsidiaries of FMR Corp.,
if the commissions are fair, reasonable, and
comparable to commissions charged by
non-affiliated, qualified brokerage firms for
similar services.
FMR may allocate brokerage transactions to
broker-dealers who have entered into arrangements
with FMR under which the broker-dealer
allocates a portion of the commissions paid by the
fund toward payment of the fund's expenses, such
as transfer agent fees or custodian fees. The
transaction quality must, however, be comparable
to those of other qualified broker-dealers.
Section 11(a) of the Securities Exchange Act of
1934 prohibits members of national securities
exchanges from executing exchange transactions for
accounts which they or their affiliates manage,
unless certain requirements are satisfied.
Pursuant to such re quirements , the Board of
Trustees has a uthorized FBSI to
e xecute portfolio transactions on national
securities exchanges in accordance with
approved procedures and applicable SEC rules.
The Trustees periodically review FMR's performance
of its responsibilities in connection with the
placement of portfolio transactions on behalf of
the fund and review the commissions paid by the
fund over representative periods of time to
determine if they are reasonable in relation to
the benefits to the fund.
For the fiscal period Nov ember 30 ,
199 3 through November 30, 199 4 , the
fund's annualized portfolio turnover rate was __%.
For fiscal 1993 and 1994, the fund paid
brokerage commissions of $___ __ and
$______ . The fund pays both commissions and
spreads in connection with the placement of
portfolio transactions; FBSI is paid on a
commission basis. During fiscal 1993 and
1994 , the fund paid brokerage commissions
of $______ and $______ to FBSI. During fiscal
1994, this amounted to approximately
_ __% of the aggregate brokerage
commissions paid by the fund for transactions
involving approximately ___% of the aggregate
dollar amount of transactions in which the
fund paid brokerage commissions. The difference in
the percentage of brokerage commissions paid to
and the percentage of the dollar amount of
transactions effected through FBSI is a result of
the low commission rates charged by FBSI.
During fiscal 1993 and 1994, the fund paid
brokerage commission of $______ and $______ to
FBSL. During fiscal 1994, this amounted to
approximately ___% of the aggregate brokerage
commissions paid by the fund, for transactions
involving approximately ___% of the dollar amount
of transactions in which the fund paid brokerage
commissions.
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 are
managed by the same investment adviser,
particularly when the same security is suitable
for the investment objective of more than one
fund.
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 a formula considered by the officers of the
funds involved to be equitable to each fund. In
some cases this system could have a detrimental
effect on the price or value of a security as far
as the fund is concerned. In other cases, however,
the ability of the fund to participate in volume
transactions will produce better executions and
prices for the fund. It is the current opinion of
the Trustees that the desirability of retaining
FMR as investment adviser to the fund outweighs
any disadvantages that may be said to exist from
exposure to simultaneous transactions.
VALUATION OF PORTFOLIO SECURITIES
Portfolio securities are valued by various methods
depending on the primary market or exchange on
which they trade. Most equity securities
for which the primary market is the U.S. are
valued at last sale price or, if no sale has
occurred, at the closing bid price. Most
e quity securities for which the primary market
is outside the U.S. are valued using the official
closing price or the last sale price in the
principal market where they are traded. If the
last sale price (on the local exchange) is
unavailable, the last evaluated quote or last bid
price is normally used. Short-term securities are
valued either at amortized cost or at original
cost plus accrued interest, both of which
approximate current value. Convertible
securities and f ixed-income securities are
valued primarily by a pricing service that uses a
vendor security valuation matrix which
incorporates both dealer-supplied valuations and
electronic data processing techniques. This
twofold approach is believed to more accurately
reflect fair value because it takes into account
appropriate factors such as institutional trading
in similar groups of securities, yield, quality,
coupon rate, maturity, type of issue, trading
characteristics, and other market data, without
exclusive reliance upon quoted, exchange, or
over-the counter prices. Use of pricing services
has been approved by the Board of Trustees.
Securities and other assets for which there is no
readily available market are valued in good faith
by a committee appointed by the Board of Trustees.
The procedures set forth above need not be used to
determine the value of the securities owned by the
fund if, in the opinion of a committee appointed
by the Board of Trustees, some other method (e.g.,
closing over-the-counter bid prices in the case of
debt instruments traded on an exchange) would more
accurately reflect the fair market value of such
securities.
Generally, the valuation of foreign and domestic
equity securities, as well as corporate bonds,
U.S. government securities, money market
instruments, and repurchase agreements, is
substantially completed each day at the close of
the NYSE. The values of any such securities held
by the fund are determined as of such time for the
purpose of computing the fund's net asset value.
Foreign security prices are furnished by
independent brokers or quotation services which
express the value of securities in their local
currency. FSC gathers all exchange rates daily at
the close of the NYSE using the last quoted price
on the local currency and then translates the
value of foreign securities from their local
currency into U.S. dollars. Any changes in the
value of forward contracts due to exchange rate
fluctuations and days to maturity are included in
the calculation of net asset value. If an
extraordinary event that is expected to materially
affect the value of a portfolio security occurs
after the close of an exchange on which that
security is traded, then the security will be
valued as determined in good faith by a committee
appointed by the Board of Trustees.
PERFORMANCE
The fund may quote its 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
share price , yield, and total return
fluctuate in response to market conditions and
other factors, and the value of fund shares when
redeemed may be more or less than their original
cost.
TOTAL RETURN CALCULATIONS. Total returns quoted
in advertising reflect all aspects of the fund's
returns, including the effect of reinvesting
dividends and capital gain distributions, and any
change in the fund's net asset value per share
(NAV) over a stated period. Average
annual 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 return of 100%
over ten years would produce an average annual
return of 7.18%, which is the steady annual rate
of return that would equal 100% growth on a
compounded basis in ten years. Average annual
returns covering periods of less than one year are
calculated by determining the fund's total return
for the period, extending that return for a full
year (assuming that performance remains constant
over the year), and quoting the result as an
annual return. While average annual 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
returns represent averaged figures as opposed to
the actual year-to-year performance of the fund.
In addition to average annual 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 with or without taking the
fund's 3% sales charge into account. Excluding the
fund's sales charge from a total return
calculation produces a higher total return figure.
Total returns and other performance information
may be quoted numerically or in a table, graph, or
similar illustration.
The fund may compare its performance 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 S&P 500 and DJIA comparisons would
show how the fund's total return compared to the
record of a broad average of common stock prices
and a narrower set of stocks of major industrial
companies, respectively. The fund has the ability
to invest in securities not included in either
index, and its investment portfolio may or may not
be similar in composition to the indices. Figures
for the S&P 500 and DJIA are based on the prices
of unmanaged groups of stocks and, unlike the
fund's returns, their returns do not include the
effect of paying brokerage commissions and other
costs of investing.
NET ASSET VALUE. Charts and graphs using the
fund's net asset values, adjusted net asset
values, and benchmark indices may be used to
exhibit performance. An adjusted NAV includes any
distributions paid by the fund and reflects all
elements of its return. Unless otherwise
indicated, the fund's adjusted NAVs are not
adjusted for sales charges, if any.
MOVING AVERAGES. The fund may illustrate
performance using moving averages. A long-term
moving average is the average of each week's
adjusted closing NAV for a specified period. A
short-term moving average is the average of each
day's adjusted closing NAV for a specified period.
Moving Average Activity Indicators combine
adjusted closing NAVs from the last business day
of each week with moving averages for a specified
period to produce indicators showing when an NAV
has crossed, stayed above, or stayed below its
moving average. On November 30, 199 4 , the
13-week and 39-week long-term moving averages were
__ and __, respectively.
HISTORICAL FUND RESULTS. The following table
shows the fund's total returns for periods ended
November 30, 1994. Total return figures include
the effect of the fund's 3% sales charge.
Average Annual Total Returns
Cumulative To t al Returns
OneYear Life of Fund* OneYear Life of Fund*
New Millennium
* From December 28, 1992 (commencement of
operations)
The following table shows the income and capital
elements of the fund's cumulative total return.
The table compares the fund's returns 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 o f common stock prices and a
narrower set of stocks of major industrial
companies, respectively, over the same period. The
fund has the ability to invest in securities not
included in either index , and its
investment portfolio may or may not be similar in
composition to the indices. Figures for t he
S&P 500 and DJIA are based on the prices of
unmanaged groups of stocks and, unlike the fund's
returns, their returns do not include the effect
of paying brokerage commissions and other costs of
investing.
During the period from December 28, 1992
(commencement of operations) to November 30, 1994,
a hypothetical $10,000 investment in Fidelity
New Millennium Fund would have grown to
$______, after deducting the fund's 3%
sales charge and assuming all distributions
were reinvested. This was a period of
fluctuating stock prices and the figures below
should not be considered representative of the
dividend income or capital gain or loss that could
be realized from an investment in the fund
today.
FIDELITY NEW MILLEN N IUM FUND
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Value of Value of Value of
Period Initial Reinvested Reinvested
Ended $10,000 Dividend Capital Gain Total Cost of
November 30 Investment Distributions Distributions Value S&P 500 DJIA Living(dagger)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
<C>
1994 $______ $_____ $_____ $___ $____ $___
$____
1993* $11,611 $0 $0 $11,611 $10,779 $11,376
$10,275
</TABLE>
* From December 28, 1992 (commencement of
operations).
(dagger) From month-end closest to initial
investment.
Explanatory Notes: With an initial investment of
$10,000 made on December 28, 1992, assuming the
3% load had been in effect the net amount
invested in fund shares was $9,700. The cost of
the initial investment ($10,000), together with
the aggregate cost of reinvested dividends and
capital gain distributions for the period covered
(their cash value at the time they were
reinvested), amounted to $_____. If
distributions had not been reinvested, the amount
of distributions earned from the fund over time
would have been smaller, and cash payments for the
period would have amounted to $______ for
dividends and $_____ for capital gains
distributions. Tax consequences of different
investments have not been factored into the above
figures.
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 which 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. 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 .
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 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;
questionnaires designed to help create a personal
financial profile; worksheets used to project
savings needs based on assumed rates of inflation
and hypothetical rates of return; and action plans
offering investment alternatives. Materials may
also include discussions of Fidelity's asset
allocation funds and other Fidelity funds,
products, and services.
Ibbotson Associates of Chicago, Illinois
(Ibbotson) provides historical returns of the
capital markets in the United States, including
common stocks, small capitalization stocks,
long-term corporate bonds, intermediate-term
government bonds, long-term government bonds,
Treasury bills, the U.S. rate of inflation (based
on the CPI), and combinations of various capital
markets. The performance of these capital markets
is based on the returns of different indices.
Fidelity funds may use the performance of these
capital markets in order to demonstrate general
risk-versus-reward investment scenarios.
Performance comparisons may also include the value
of a hypothetical investment in any of these
capital markets. The risks associated with the
security types in any capital market may or may
not correspond directly to those of the funds.
Ibbotson calculates total returns in the same
method as the funds. The funds may also compare
performance to that of other compilations or
indices that may be developed and made available
in the future.
In advertising materials, Fidelity may reference
or discuss its products and services, which may
include: other Fidelity funds; retirement
investing; brokerage products and services; the
effects of periodic investment plans and
dollar-cost averaging ; 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, including
model portfolios or allocations, as they relate to
current economic and political conditions,
fund management, portfolio composition,
investment philosophy, and investment
techniques the desirability of owning a
particular mutual fund, and Fidelity services and
products. Fidelity may also reprint, and use
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
number, and CUSIP number, and discuss or quote its
current portfolio manager.
VOLATILITY. The fund may quote various measures
of volatility and benchmark correlation in
advertising. In addition, the fund may compare
these measures to those of other funds. Measures
of volatility seek to compare the fund's
historical share price fluctuations or total
returns compared to those of a benchmark. Measures
of benchmark correlation indicate how valid a
comparative benchmark may be. All measures of
volatility and correlation are calculated using
averages of historical data.
MOMENTUM INDICATORS indicate the fund's price
movements over specific periods of time. Each
point on the momentum indicator represents the
fund's percentage change in price movements over
that period.
The fund may advertise examples of the effects of
periodic investment plans, including the principle
of dollar cost averaging. In such a program, an
investor invests a fixed dollar amount in a fund
at periodic intervals, thereby purchasing fewer
shares when prices are high and more shares when
prices are low. While such a strategy does not
assure a profit or guard against a loss in a
declining market, the investor's average cost per
share can be lower than if fixed numbers of shares
are purchased at the same intervals. In evaluating
such a plan, investors should consider their
ability to continue purchasing shares during
periods of low price levels.
The fund may be available for purchase through
retirement plans or other programs offering
deferral of or exemption from income taxes, which
may produce superior after-tax returns over time.
For example, a $1,000 investment earning a taxable
return of 10% annually would have an after-tax
value of $1,949 after ten years, assuming tax was
deducted from the return each year at a 31% rate.
An equivalent tax-deferred investment would have
an after-tax value of $2,100 after ten years,
assuming tax was deducted at a 31% rate from the
tax-deferred earnings at the end of the ten-year
period.
The fund may describe its investment approach of
"change analysis" in advertising. This management
style focuses on identifying new opportunities and
then selecting companies that may benefit from
them. Change Analysis incorporates five elements:
(1) observation; (2) identification of
opportunity; (3) verification of opportunity; (4)
defining of prospects; and (5) selection of
stocks.
As of November 30, 199 4 , FMR advised
over $____ billion in tax-free assets, $____
billion in money market fund assets, $____ billion
in equity fund assets, $____billion in
international fund assets, and $____ billion in
Spartan fund assets. 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, with
over ___ employees in over ___ foreign
countries.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
Pursuant to Rule 22d-1 under the Investment
Company Act of 1940 (the 1940 Act) , FDC
exercises its right to waive the fund's
front-end sales charge on shares acquired
through reinvestment of dividends and capital gain
distributions or in connection with the fund's
merger with or acquisition of any investment
company or trust. In addition, FDC has chosen
to waive the fund's sales charge in certain
instances because of efficiencies involved in
those sales of shares. The sales charge will not
apply:
(1) to shares purchased in connection
with an employee benefit plan (including the
Fidelity-sponsored 403(b) and corporate IRA
programs but otherwise as defined in the Employee
Retirement Income Security Act) maintained by a
U.S. employer and having more than 200 eligible
employees or a minimum of $3,000,000 in plan
assets invested in Fidelity mutual funds, or as
part of an employee benefit plan maintained by a
U.S. employer that is a member of a
parent-subsidiary group of corporations (within
the meaning of Section 1563(a)(1) of the Internal
Revenue Code, with "50%" substituted for "80%")
any member of which maintains an employee benefit
plan having more than 200 eligible employees, or a
minimum of $3,000,000 in plan assets invested in
Fidelity mutual funds, or as part of an employee
benefit plan maintained by a non-U.S. employer
having 200 or more eligible employees or a minimum
of $3,000,000 in plan assets invested in Fidelity
mutual funds, the assets of which are held in a
bona fide trust for the exclusive benefit of
employees participating therein; (2) to shares
purchased by an insurance company separate account
used to fund annuity contracts purchased by
employee benefit plans (including 403(b) programs,
but otherwise as defined in the Employee
Retirement Income Security Act), which, in the
aggregate, have either more than 200 eligible
employees or a minimum of $3,000,000 in assets
invested in Fidelity funds; (3) to shares in a
Fidelity IRA account purchased (including
purchases by exchange) with the proceeds of a
distribution from an employee benefit plan
provided that: (i) at the time of the
distribution, the employer, or an affiliate (as
described in exemption (1) above) of such
employer, maintained at least one employee benefit
plan that qualified for exemption (1) and that had
at least some portion of its assets invested in
one or more mutual funds advised by FMR, or in one
or more accounts or pools advised by Fidelity
Management Trust Company; and (ii) the
distribution is transferred from the plan to a
Fidelity Rollover IRA account within 60 days from
the date of the distribution; (4) to shares
purchased by a charitable organization (as
defined in Section 501(c)(3) of the Internal
Revenue Code) investing $100,000 or more; (5)
to shares purchased for a charitable
remainder trust or life income pool established
for the benefit of a charitable organization (as
defined by Section 501(c)(3) of the Internal
Revenue Code); (6) to shares purchased by
an investor participating in the Fidelity
Trust Portfolios program (these investors must
make initial investments of $100,000 or more in
Trust Portfolios funds and must, during the
initial six-month period, reach and maintain an
aggregate balance of at least $500,000 in all
accounts and subaccounts purchased through the
Trust Portfolios program); (7) to shares purchased
through Portfolio Advisory Services; (8) to
shares purchased by a current or former
Trustee or officer of a Fidelity fund or a current
or retired officer, director, or regular
employee of FMR Corp. or its direct or
indirect subsidiaries (a Fidelity Trustee or
employee), the spouse of a Fidelity Trustee or
employee, a Fidelity Trustee or employee acting as
custodian for a minor child, or a person acting as
trustee of a trust for the sole benefit of the
minor child of a Fidelity Trustee or employee; or
(9) to shares purchased by a bank trust
officer, registered representative, or other
employee of a Qualified Recipient. Qualified
Recipients are securities dealers or other
entities, including banks and other financial
institutions, who have sold the fund's shares
under special arrangements in connection with
FDC's sales activities (10) to shares purchased
by a trust institution or bank trust department
for its non-discretionary, non-retirement
fiduciary accounts, provided it executes a
Fidelity Trust load waiver agreement which
specifies certain aggregate minimum and operating
provisions. This waiver is available only for
shares purchased either directly from Fidelity or
through a bank-affiliated broker, and is
unavailable if the trust department or institution
is part of an organization not principally engaged
in banking or trust activities .
The fund's sales charge may be reduced to reflect
sales charges previously paid , or that would
have been paid absent a reduction as noted in the
prospectus, in connection with investments in
other Fidelity funds. This includes reductions
for investments in prototype or prototype-like
retirement plans sponsored by FMR or FMR Corp.:
The Fidelity IRA, The Fidelity Rollover IRA, The
Fidelity SEP-IRA and SARSEP, The Fidelity
Retirement plan, Fidelity Defined Benefit Plan,
The Fidelity Group IRA, The Fidelity 403(b)
Program, The Fidelity Investments 401(a) Prototype
Plan for Tax-Exempt Employers, and The
CORPORATEplan for Retirement (Profit Sharing and
Money Purchase Plan)
The fund is open for business and its net asset
value per share (NAV) is calculated each day the
New York Stock Exchange (NYSE) is open for
trading. The NYSE has designated the following
holiday closings for 199 5 : New Year's Day
(observed), Washington's Birthday (observed), Good
Friday, Memorial Day (observed), Independence Day
(observed), Labor Day, Thanksgiving Day, and
Christmas Day (observed). Although FMR expects the
same holiday schedule to be observed in the
future, the NYSE may modify its holiday schedule
at any time.
FSC normally determines the fund's NAV as of the
close of the NYSE (normally 4:00 p.m. Eastern
time). However, NAV may be calculated earlier if
trading on the NYSE is restricted or as permitted
by the SEC. To the extent that portfolio
securities are traded in other markets on days
when 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. In
addition, trading in some of the fund's portfolio
securities may not occur on days when the fund is
open for business.
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 administration fee, redemption
fee, or deferred sales charge ordinarily payable
at the time of an exchange, or (ii) the fund
temporarily 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. A portion of the fund's income may
qualify for the dividends-received deduction
available to corporate shareholders to the extent
that the fund's income is derived from qualifying
dividends. Because the fund may earn other types
of income, such as interest, income from
securities loans, non-qualifying dividends, and
short-term capital gains, the percentage of
dividends from the fund that qualifies for the
deduction generally will be less than 100%. The
fund will notify corporate shareholders annually
of the percentage of fund dividends that qualifies
for the dividends-received deduction. A portion of
the fund's dividends derived from certain U.S.
government obligations may be exempt from state
and local taxation. Gains (losses) attributable to
foreign currency fluctuations are generally
taxable as ordinary income, and therefore will
increase (decrease) dividend distributions.
Short-term capital gains are distributed as
dividend income. The fund will send each
shareholder a notice in January describing the tax
status of dividends and capital gain distributions
for the prior year.
CAPITAL GAIN DISTRIBUTIONS. Long-term capital
gains earned by the fund on the sale of securities
and distributed to shareholders are federally
taxable as long-term capital gains, regardless of
the length of time 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.
FOREIGN TAXES. Foreign governments may withhold
taxes on dividends and interest paid with respect
to foreign securities typically at a rate
between 10% to 35% . 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. The fund
intends to comply with other tax rules applicable
to regulated investment companies, including a
requirement that capital gains from the sale of
securities held less than three months constitute
less than 30% of the fund's gross income for each
fiscal year. Gains from some forward currency
contracts, futures contracts, and options are
included in this 30% calculation, which may limit
the fund's investments in such instruments.
If the fund purchases shares in certain foreign
investment entities, defined as passive foreign
investment companies (PFICs) in the Internal
Revenue Code, it may be subject to U.S. federal
income tax on a portion of any excess distribution
or gain from the disposition of such shares.
Interest charges may also be imposed on the fund
with respect to deferred taxes arising from such
distributions or gains. Generally, the fund
will elect to mark-to-market any PFIC shares.
Unrealized gains will be recognized as income for
tax purposes and must be distributed to
shareholders as dividends.
The fund is treated as a separate entity from the
other funds of Fidelity Mt. Vernon Street Trust
for tax purposes.
OTHER TAX INFORMATION. The information above is
only a summary of some of the tax consequences
generally affecting the fund and its shareholders,
and no attempt has been made to discuss individual
tax consequences. In addition to federal income
taxes, shareholders may be subject to state and
local taxes on 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 company organized in 1972. Through
ownership of voting common stock and the execution
of a shareholders' voting agreement, Edward C.
Johnson 3d, Johnson family members, and various
trusts for the benefit of the Johnson family 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 Investment
Institutional Operations Company, which performs
shareholder servicing functions for institutional
customers and funds sold through intermediaries;
and Fidelity Investments Retail Market 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 funds,
establishes procedures for personal investing, and
restricts certain transactions. For example, all
personal trades require pre-clearance, and
participation in initial public offerings are
prohibited. In addition, restrictions on the
timing of personal investing relative 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. All persons named as Trustees also serve in
similar capacities for other funds advised by FMR.
Unless otherwise noted, the business address of
each Trustee and officer is 82 Devonshire Street,
Boston, Massachusetts 02109, which is also the
address of FMR. Those Trustees who are "interested
persons" (as defined in the Investment Company Act
of 1940) by virtue of their affiliation with
either the trust or FMR are indicated by an
asterisk (*).
*EDWARD C. JOHNSON 3d, Trustee and President, is
Chairman, Chief Executive Officer and a Director
of FMR Corp.; a Director and Chairman of the Board
and of the Executive Committee of FMR; Chairman
and a Director of FMR Texas Inc. (1989), Fidelity
Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.
*J. GARY BURKHEAD, Trustee and Senior Vice
President, is President of FMR; and President and
a Director of FMR Texas Inc. (1989), Fidelity
Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.
RALPH F. COX, 200 Rivercrest Drive, Fort Worth,
TX, Trustee (1991), is 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, P.O. Box 264, Bridgehampton,
NY, Trustee (1992). Prior to her retirement in
September 1991, Mrs. Davis was the Senior Vice
President of Corporate Affairs of Avon Products,
Inc. She is currently a Director of BellSouth
Corporation (telecommunications), Eaton
Corporation (manufacturing, 1991), and the TJX
Companies, Inc. (retail stores, 1990), and
previously served as a Director of Hallmark Cards,
Inc. (1985-1991) and Nabisco Brands, Inc. In
addition, she is a member of the
President's Advisory Council of The University of
Vermont School of Business Administration.
RICHARD J. FLYNN, 77 Fiske Hill, Sturbridge, MA,
Trustee, is a financial consultant. Prior to
September 1986, Mr. Flynn was Vice Chairman and a
Director of the Norton Company (manufacturer of
industrial devices). He is currently a Director
of Mechanics Bank and a Trustee of College of the
Holy Cross and Old Sturbridge Village, Inc.
E. BRADLEY JONES, 3881-2 Lander Road, Chagrin
Falls, OH, Trustee (1990). Prior to his
retirement in 1984, Mr. Jones was Chairman and
Chief Executive Officer of LTV Steel Company.
Prior to May 1990, he was Director of National
City Corporation (a bank holding company) and
National City Bank of Cleveland. He is a Director
of TRW Inc. (original equipment and replacement
products), Cleveland-Cliffs Inc (mining), NACCO
Industries, Inc. (mining and marketing),
Consolidated Rail Corporation, Birmingham Steel
Corporation, Hyster-Yale Materials Handling, Inc.
(1989), and RPM, Inc. (manufacturer of chemical
products, 1990). In addition, he serves as a
Trustee of First Union Real Estate Investments,
Chairman of the Board of Trustees and a member of
the Executive Committee of the Cleveland Clinic
Foundation, a Trustee and a member of the
Executive Committee of University School
(Cleveland), and a Trustee of Cleveland Clinic
Florida.
DONALD J. KIRK, 680 Steamboat Road, Apartment
#1-North, Greenwich, CT, Trustee, is a Professor
at Columbia University Graduate School of Business
and a financial consultant. Prior to 1987, he was
Chairman of the Financial Accounting Standards
Board. Mr. Kirk is a Director of General Re
Corporation (reinsurance) and Valuation Research
Corp. (appraisals and valuations, 1993). In
addition, he serves as Vice Chairman of the Board
of Directors of the National Arts Stabilization
Fund and Vice Chairman of the Board of Trustees of
the Greenwich Hospital Association.
*PETER S. LYNCH, Trustee (1990) is Vice Chairman
of FMR (1992). Prior to his retirement on May 31,
1990, he was a Director of FMR (1989) and
Executive Vice President of FMR (a position he
held until March 31, 1991); Vice President of
Fidelity Magellan Fund and FMR Growth Group
Leader; and Managing Director of FMR Corp. Mr.
Lynch was also Vice President of Fidelity
Investments Corporate Services (1991-1992). He is
a Director of W.R. Grace & Co. (chemicals, 1989)
and Morrison Knudsen Corporation (engineering and
construction). In addition, he serves as a
Trustee of Boston College, Massachusetts Eye & Ear
Infirmary, Historic Deerfield (1989) and Society
for the Preservation of New England Antiquities,
and as an Overseer of the Museum of Fine Arts of
Boston (1990).
GERALD C. McDONOUGH, 135 Aspenwood Drive,
Cleveland, OH, Trustee (1989), is Chairman of G.M.
Management Group (strategic advisory services).
Prior to his retirement in July 1988, he was
Chairman and Chief Executive Officer of Leaseway
Transportation Corp. (physical distribution
services). Mr. McDonough is a Director of
ACME-Cleveland Corp. (metal working,
telecommunications and electronic products),
Brush-Wellman Inc. (metal refining), York
International Corp. (air conditioning and
refrigeration, 1989), Commercial Intertech Corp.
(water treatment equipment, 1992), and Associated
Estates Realty Corporation (a real estate
investment trust, 1993).
EDWARD H. MALONE, 5601 Turtle Bay Drive #2104,
Naples, FL, Trustee. Prior to his retirement in
1985, Mr. Malone was Chairman, General Electric
Investment Corporation and a Vice President of
General Electric Company. He is a Director of
Allegheny Power Systems, Inc. (electric utility),
General Re Corporation (reinsurance) and Mattel
Inc. (toy manufacturer). 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, 55 Railroad Avenue, Greenwich, CT,
Trustee (1993) is Chairman of the Board,
President, and Chief Executive Officer of Lexmark
International, Inc. (office machines, 1991).
Prior to 1991, he held the positions of Vice
President of International Business Machines
Corporation ("IBM") and President and General
Manager of various IBM divisions and subsidiaries.
Mr. Mann is a Director of M.A. Hanna Company
(chemicals, 1993) and Infomart (marketing
services, 1991), a Trammell Crow Co. In addition,
he serves as the Campaign Vice Chairman of the
Tri-State United Way (1993) and is a member of the
University of Alabama President's Cabinet (1990).
THOMAS R. WILLIAMS, 21st Floor, 191 Peachtree
Street, N.E., Atlanta, GA, Trustee, is President
of The Wales Group, Inc. (management and financial
advisory services). Prior to retiring in 1987,
Mr. Williams served as Chairman of the Board of
First Wachovia Corporation (bank holding company),
and Chairman and Chief Executive Officer of The
First National Bank of Atlanta and First Atlanta
Corporation (bank holding company). He is
currently a Director of BellSouth Corporation
(telecommunications), ConAgra, Inc. (agricultural
products), Fisher Business Systems, Inc. (computer
software), Georgia Power Company (electric
utility), Gerber Alley & Associates, Inc.
(computer software), National Life Insurance
Company of Vermont, American Software, Inc.
(1989), and AppleSouth, Inc. (restaurants, 1992).
GARY L. FRENCH, Treasurer (1991). Prior to
becoming Treasurer of the Fidelity funds, Mr.
French was Senior Vice President, Fund Accounting
- - Fidelity Accounting & Custody Services Co.
(1991); Vice President, Fund Accounting - Fidelity
Accounting & Custody Services Co. (1990); and
Senior Vice President, Chief Financial and
Operations Officer - Huntington Advisers, Inc.
(1985-1990).
JOHN H. COSTELLO, Assistant Treasurer, is an
employee of FMR.
LEONARD M. RUSH, 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).
ARTHUR S. LORING, Secretary, is Senior Vice
President (1993) and General Counsel of FMR, Vice
President-Legal of FMR Corp., and Vice President
and Clerk of FDC.
WILLIAM J. HAYES, Vice President (1994), is Vice
President of Fidelity's equity funds; Senior Vice
President of FMR; and Managing Director of FMR
Corp.
ROBERT H. MORRISON, Manager of Security
Transactions of Fidelity's equity funds, is Vice
President of FMR.
NEAL MILLER is manager and Vice President of
New Millennium, which he has managed since
December 1992. Previously, he managed Aggressive
Equity and Special Equity Discipline. Mr. Miller
joined Fidelity in 1988.
Under a retirement program that became effective
on November 1, 1989, Trustees, upon reaching age
72, become eligible to participate in a defined
benefit retirement program under which they
receive payments during their lifetime from the
fund based on their basic trustee fees and length
of service. Currently, Messrs. W illiam R.
Spaulding, Bertram H. Witham, and David L. Yunich
participate in the program.
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,
and compensates all officers of the trust, all
Trustees who are "interested persons" of the trust
or of FMR, and all personnel of the trust or FMR
performing services relating to research,
statistical, and investment activities.
In addition, FMR or its affiliates, subject to the
supervision of the Board of Trustees, provide the
management and administrative services necessary
for the operation of the fund. These services
include providing facilities for maintaining the
fund's organization; supervising relations with
custodians, transfer and pricing agents,
accountants, underwriters, and other persons
dealing with the fund; preparing all general
shareholder communications and conducting
shareholder relations; maintaining the fund's
records and the registration of the fund's shares
under federal and state law; developing management
and shareholder services for the fund; and
furnishing reports, evaluations, and analyses on a
variety of subjects to the Board of Trustees.
In addition to the management fee payable to FMR
and the fees payable to FSC, the fund pays all of
its expenses, without limitation, that are not
assumed by those parties. The fund pays for
typesetting, printing, and mailing proxy material
to shareholders, legal expenses, and the fees of
the custodian, auditor, and non-interested
Trustees. Although the fund's management contract
provides that the fund will pay for typesetting,
printing, and mailing prospectuses, statements of
additional information, notices, and reports to
existing shareholders, pursuant to the trust's
transfer agent agreement with FSC, FSC bears the
cost of providing these services to existing
shareholders. Other expenses paid by the fund
include interest, taxes, brokerage commissions,
the fund's proportionate share of insurance
premiums and Investment Company Institute dues,
and the costs of registering shares under federal
and state securities laws. The fund is also liable
for such nonrecurring expenses as may arise,
including costs of any litigation to which the
fund may be a party, and any obligation it may
have to indemnify the trust's officers and
Trustees with respect to litigation.
FMR is the fund's manager pursuant to a management
contract dated September 17, 1992, which was
approved by FMR, then the sole shareholder, on
September 28, 1992. For the services of FMR under
the contract, the fund pays FMR a monthly
management fee composed of the sum of two
elements: a basic fee and a performance adjustment
based on a comparison of the fund's performance to
that of the Standard & Poor's Composite Index of
500 Stocks (S&P 500).
COMPUTING THE BASIC FEE. The fund's basic fee
rate is composed of two elements: a group fee
rate and an individual fund fee rate. The group
fee rate is based on the monthly average net
assets of all of the registered investment
companies with which FMR has management contracts
and is calculated on a cumulative basis pursuant
to the graduated fee rate schedule shown on the
left of the chart on page __. On the right, the
effective fee rate schedule shows the results of
cumulatively applying the annualized rates at
varying asset levels. For example, the
effective annual fee rate at $___ billion of group
net assets - their approximate level for November
1993 - was ____%, which is the weighted average of
the respective fee rates for each level of group
net assets up to $___ billion.
GROUP FEE RATE SCHEDULE
EFFECTIVE ANNUAL FEE RATES
Average Group Annualized Group Net Effective Annual
Assets Rate Assets Fee Rate
0 - $ 3 billion .5200% $ 0.5 billion .5200%
3 - 6 .4900 25 .4238
6 - 9 .4600 50 .3823
9 - 12 .4300 75 .3626
12 - 15 .4000 100 .3512
15 - 18 .3850 125 .3430
18 - 21 .3700 150 .3371
21 - 24 .3600 175 .3325
24 - 30 .3500 200 .3284
30 - 36 .3450 225 .3253
36 - 42 .3400 250 .3223
42 - 48 .3350 275 .3198
48 - 66 .3250 300 .3175
66 - 84 .3200 325 .3153
84 - 102 .3150 350 .3133
102 - 138 .3100
138 - 174 .3050
174 - 228 .3000
228 - 282 .2950
282 - 336 .2900
Over 336 .2850
Prior to December 1, 1994, the group fee rate was
based on a schedule with breakpoints ending at
.3000% for average group assets in excess of $174
billion. The additional breakpoints shown above
for average group assets in excess of $228 billion
were voluntarily adopted by FMR on November 1,
1993.
On August 1, 1994, FMR voluntarily revised the
prior extensions to the group fee rate schedule,
and added new breakpoints. The revised group fee
rate schedule provides for lower management fee
rates as FMR's assets under management increase.
The fund's current management contract reflects
the group fee rate schedule above for average
group assets under $210 billion and the group fee
rate schedule below for average group assets in
excess of $210 billion.
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
Average Group Annualized Group Net Effective Annual
Assets Rate Assets Fee Rate
138 - $174 billion .3050% $150 billion .3371%
174 - 210 .3000 175 .3325
210 - 246 .2950 200 .3284
246 - 282 .2900 225 .3249
282 - 318 .2850 250 .3219
318 - 354 .2800 275 .3190
354 - 390 .2750 300 .3163
Over 390 .2700 325 .3137
350 .3113
375 .3090
400 .3067
The individual fund fee rate is .35%. Based on the
average net assets of funds advised by FMR for
November 1994, the annual basic fee rate would be
calculated as follows:
Group Fee Rate Individual Fund Fee Rate Basic Fee Rate
. _____% + .35% = _____ %
One twelfth (1/12) of this annual basic fee rate
is then applied to the fund's average net assets
for the current month, giving a dollar amount
which is the fee for that month.
COMPUTING THE PERFORMANCE ADJUSTMENT. The basic
fee is subject to upward or downward adjustment,
depending upon whether, and to what extent, the
fund's investment performance for the performance
period exceeds, or is exceeded by, the record of
the S&P 500 over the same period. The performance
period will commence with the first day of the
first full month of operation following the fund's
commencement of operations. Starting with the
twelfth month, the performance adjustment will
take effect. Each month subsequent to the twelfth
month, a new month will be added to the
performance period until the performance period
equals 36 months. Thereafter, the performance
period will consist of the most recent month plus
the previous 35 months. Each percentage point of
difference (up to a maximum difference of + 10) is
multiplied by a performance adjustment rate of
.02%. Thus, the maximum annualized adjustment rate
is + .20%. This performance comparison is made at
the end of each month. One twelfth (1/12) of this
rate is then applied to the fund's average net
assets for the entire performance period, giving a
dollar amount which will be added to (or
subtracted from) the basic fee.
The fund's performance is calculated based on
change in net asset value. For purposes of
calculating the performance adjustment, any
dividends or capital gain distributions paid by
the fund are treated as if reinvested in fund
shares at the net asset value as of the record
date for payment. The record of the S&P 500 is
based on change in value and is adjusted for any
cash distributions from the companies whose
securities compose the S&P 500.
Because the adjustment to the basic fee is based
on the fund's performance compared to the
investment record of the S&P 500, the controlling
factor is not whether the fund's performance is up
or down per se, but whether it is up or down more
or less than the record of the S&P 500. Moreover,
the comparative investment performance of the fund
is based solely on the relevant performance period
without regard to the cumulative performance over
a longer or shorter period of time.
During the fiscal period ended November 30, 1993,
FMR received $__ for its services as investment
adviser to the fund. The basic fee was equivalent
to __% (annualized) of the fund's average net
assets for this period.
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-ADVISERS. FMR has entered into sub-advisory
agreements with FMR U.K. and FMR Far East.
Pursuant to the sub-advisory agreements, FMR may
receive investment advice and research services
outside the United States from the sub-advisers.
FMR may also grant FMR U.K. and FMR Far East
investment management authority as well as the
authority to buy and sell securities if FMR
believes it would beneficial to the funds .
Currently, FMR U.K. and FMR Far East each
focus on issuers in countries other than the
United States such as those in Europe, Asia,
and the Pacific Basin.
FMR U.K. and FMR Far East are wholly-owned
subsidiaries of FMR. Under the sub-advisory
agreements FMR pay the fees of FMR U.K. and FMR
Far East. For providing non-discretionary
investment advice and research services, FMR
pay FMR U.K. and FMR Far East fees equal to
110% and 105%, respectively, of FMR U.K.'s and FMR
Far East's costs incurred in connection with
providing investment advice and research services.
For providing discretionary investment
management and executing portfolio transactions,
FMR pays FMR U.K. and FMR Far East a fee equal to
50% of its monthly management fee (including any
performance adjustment) with respect to the fund's
average net assets managed by the sub-adviser on a
discretionary basis.
For providing investment advice and research
services, the fees paid to FMR U.K. for fiscal
1993 and 1994 were $______ and $________,
respectively. Fees paid to FMR Far East for fiscal
1993 and 1994 were $_______ and $_______,
respectively.
For providing discretionary investment management
and executing portfolio transactions the fees paid
to FMR U.K. for fiscal 1993 and 1994 were
$_____ and $______, respectively and fees paid to
FMR Far East for fiscal 1993 and 1994 were $_____
and $____, respectively.
CONTRACTS WITH COMPANIES AFFILIATED WITH FMR
FSC is transfer, dividend disbursing, and
shareholders' servicing agent for the fund. Under
the trust's contract with FSC, the fund pays an
annual fee of $____ per basic retail account with
a balance of $5,000 or more, $____ per basic
retail account with a balance of less than $5,000,
and a supplemental activity charge of $____ for
standing order transactions and $____ for other
monetary transactions. These fees and charges
are subject to annual cost escalation based on
postal rate changes and changes in wage and price
levels as measured by the National Consumer Price
Index for Urban Areas. With respect to certain
institutional client master accounts, the fund
pays FSC a per ac count fee of $95, and monetary
transaction charges of $___ or $___, depending on
the nature of services provided. With respect to
certain broker-dealer master accounts, the fund
pays FSC a per account fee of $___ and a charge of
$___ for monetary transactions. Fees for
certain institutional retirement plan accounts are
based on the net assets of all such accounts in
the fund.
Under the contract, FSC pays out-of-pocket
expenses associated with providing transfer agent
services. In addition, FSC bears the expense of
typesetting, printing, and mailing prospectuses,
statements of additional information, and all
other reports, notices, and statements to
shareholders, with the exception of proxy
statements. Transfer agent fees, including
reimbursement for out-of- pocket expenses, paid
to FSC for the fiscal periods ending November 30,
1994 and 1993 were _____ and _____
respectively.
The trust's contract with FSC also provides that
FSC will perform the calculations necessary to
determine the fund's net asset value per share and
dividends, and maintain the fund's accounting
records. The fee rates are based on the fund's
average net assets, specifically, .06% for the
first $500 million of average net assets and .03%
for average net assets in excess of $500 million.
The fee is limited to a minimum of $45,000 and a
maximum of $750,000 per year. Pricing and
bookkeeping fees, including related
out-of- pocket expenses, paid to FSC for the
fiscal period ended November 30, 1994 and 1993
were $_______ and $______, respectively. FSC
also receives fees for administering the fund's
securities lending program. Securities lending
fees are based on the number and duration of
individual securities loans. Securities lending
fees for the fiscal periods ending November 30,
1994 and 1993 were ______ and _____,
respectively.
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.
Promotional and administrative expenses in
connection with the offer and sale of shares
are paid by FDC. Sales charge revenue paid to FDC
for the fiscal period ended November 30, 1994 and
1993 amounted to $________ and $______,
respectively.
DESCRIPTION OF THE TRUST
TRUST ORGANIZATION. Fidelity New Millennium Fund
is a fund of Fidelity Mt. Vernon Street Trust (the
trust), an open-end management investment company
organized as a Massachusetts business trust on
October 12, 1982. The Declaration of Trust was
amended on January 17, 1983 to change the trust's
name from Fidelity Growth Stock Fund to Fidelity
Mercury Fund, and on August 1, 1986, was further
amended to change the trust's name to Fidelity
Growth Company Fund. The Declaration of Trust was
amended January 8, 1991 to change the trust's name
to Fidelity Mt. Vernon Street Trust. Currently,
there are three funds of the trust: Fidelity
Growth Company Fund, Fidelity Emerging Growth
Fund, and Fidelity New Millennium Fund. The
Declaration of Trust permits the Trustees to
create additional funds.
In the event that FMR ceases to be the investment
adviser to the trust or a fund, the right of the
trust or fund to use the identifying name
"Fidelity" may be withdrawn.
The assets of the trust received for the issue or
sale of shares of each fund and all income,
earnings, profits, and proceeds thereof, subject
only to the rights of creditors, are especially
allocated to such fund, and constitute the
underlying assets of such fund. The underlying
assets of each fund are segregated on the books of
account, and are to be charged with the
liabilities with respect to such fund and with a
share of the general expenses of the trust.
Expenses with respect to the trust are to be
allocated in proportion to the asset value of the
respective funds, except where allocations of
direct expense can otherwise be fairly made. The
officers of the trust, subject to the general
supervision of the Board of Trustees, have the
power to determine which expenses are allocable to
a given fund, or which are general or allocable to
all of the funds. In the event of the dissolution
or liquidation of the trust, shareholders of each
fund are entitled to receive as a class the
underlying assets of such fund available for
distribution.
SHAREHOLDER AND TRUSTEE LIABILITY. The trust is
an entity of the type commonly known as a
"Massachusetts business trust." Under
Massachusetts law, shareholders of such a trust
may, under certain circumstances, be held
personally liable for the obligations of the
trust. The Declaration of Trust provides that the
trust shall not have any claim against
shareholders except for the payment of the
purchase price of shares and requires that each
agreement, obligation, or instrument entered into
or executed by the trust or the Trustees include a
provision limiting the obligations created thereby
to the trust and its assets. The Declaration of
Trust provides for indemnification out of each
fund's property of any shareholder held personally
liable for the obligations of the fund. The
Declaration of Trust also provides that each fund
shall, upon request, assume the defense of any
claim made against any shareholder for any act or
obligation of the fund and satisfy any judgment
thereon. Thus, the risk of a shareholder incurring
financial loss on account of shareholder liability
is limited to circumstances in which a fund itself
would be unable to meet its obligations. FMR
believes that, in view of the above, the risk of
personal liability to shareholders is remote.
The Declaration of Trust further provides that the
Trustees, if they have exercised reasonable care,
will not be liable for any neglect or wrongdoing,
but nothing in the Declaration of Trust protects a
Trustee against any liability to which he would
otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the
conduct of their office.
VOTING RIGHTS. Each fund's capital consists of
shares of beneficial interest. As a
shareholder, you receive one vote for each dollar
value of net asset value you own. The shares
have no preemptive or conversion rights; the
voting and dividend rights, the right of
redemption, and the privilege of exchange are
described in the Prospectus. Shares are fully paid
and nonassessable, except as set forth under the
heading "Shareholder and Trustee Liability" above.
Shareholders representing 10% or more of the trust
or a fund may, as set forth in the Declaration of
Trust, call meetings of the trust or a fund for
any purpose related to the trust or fund, as the
case may be, including, in the case of a meeting
of the entire trust, the purpose of voting on
removal of one or more Trustees. The trust or any
fund may be terminated upon the sale of its assets
to another open-end management investment company,
or upon liquidation and distribution of its
assets, if approved by vote of the holders of a
majority of the trust or the fund, as
determined by the current value of each
shareholder's investment in the fund or trust. If
not so terminated, the trust and its funds will
continue indefinitely. Each fund may invest all of
its assets in another investment company.
CUSTODIAN. Chase Manhattan Bank, N.A., New York,
New York is custodian of the assets of the fund.
The custodian is responsible for the safekeeping
of the fund's assets and the appointment of
subcustodian banks and clearing agencies. The
custodian takes no part in determining the
investment policies of the fund or in deciding
which securities are purchased or sold by the
fund. The fund may, however, invest in obligations
of the custodian and may purchase securities from
or sell securities to the custodian.
FMR, its officers and directors, its affiliated
companies, and the trust's Trustees may from time
to time have transactions with various banks,
including banks serving as custodians for certain
of the funds advised by FMR. Transactions that
have occurred to date include mortgages and
personal and general business loans. In the
judgment of FMR, the terms and conditions of those
transactions were not influenced by existing or
potential custodial or other fund relationships.
AUDITOR. Coopers & Lybrand L.L.P. , One
Post Office Square, Boston, Massachusetts serves
as the trust's independent accountant. The auditor
examines financial statements for the fund and
provides other audit, tax, and related services.
FINANCIAL STATEMENTS
The fund's financial statements and financial
highlights for the fiscal period ended November
30, 1994 are included in the fund's Annual Report,
which is a separate report supplied with this
Statement of Additional Information. The fund's
financial statements and financial highlights are
incorporated herein by reference .
FIDELITY GROWTH COMPANY FUND
FIDELITY EMERGING GROWTH FUND
CROSS REFERENCE SHEET
FORM N-1A
ITEM NUMBER PROSPECTUS SECTION
<TABLE>
<CAPTION>
<S> <C>
1................................... Cover Page
...
2a.................................. Expenses
..
b, Contents; The Funds at a Glance; Who May Want to
c............................... Invest
3a.................................. Financial Highlights
..
b................................. *
c, d............................. Performance
4a i.............................. Charter
The Funds at a Glance; Investment Principles and
ii............................... Risks
Investment Principles and Risks
b...................................
Who May Want to Invest; Investment Principles and
c................................... Risks
5a.................................. Charter
..
b Cover Page; The Funds at a Glance; Charter; Doing
i.............................. Business with Fidelity
Charter
ii..............................
Expenses; Breakdown of Expenses
iii.............................
c................................ Charter
Charter; Breakdown of Expenses
d...................................
.
Cover Page; Charter
e....................................
Expenses
f....................................
g i.............................. Charter
*
ii...............................
5A................................. Performance
.
6a Charter
i.................................
How to Buy Shares; How to Sell Shares; Transaction
ii................................ Details; Exchange Restrictions
Charter
iii................................
*
b..................................
Transaction Details; Exchange Restrictions
c..................................
*
d..................................
Doing Business with Fidelity; How to Buy Shares;
e.................................. How to Sell Shares; Investor Services
f, Dividends, Capital Gains, and Taxes
g..............................
7 Cover Page; Charter
a..................................
Expenses; How to Buy Shares; Transaction Details
b.................................
Sales Charge Reductions and Waivers
c..................................
How to Buy Shares
d..................................
*
e..................................
f................................ *
8................................... How to Sell Shares; Investor Services; Transaction
... Details; Exchange Restrictions
9................................... *
...
</TABLE>
* Not Applicable
FIDELITY GROWTH COMPANY FUND
FIDELITY EMERGING GROWTH FUND
CROSS REFERENCE SHEET
(continued)
FORM N-1A
ITEM NUMBER STATEMENT OF ADDITIONAL INFORMATION
SECTION
<TABLE>
<CAPTION>
<S> <C>
10, Cover Page
11.............................
12.................................. Description of the Trust
..
13a - Investment Policies and Limitations
c............................
Portfolio Transactions
d..................................
14a - Trustees and Officers
c............................
15a, b.......................... *
15 c.......................... Trustees and Officers
16a FMR, Portfolio Transactions
i................................
Trustees and Officers
ii..............................
Management Contract
iii..............................
Management Contract
b.................................
c, Contracts with Companies Affiliated with FMR
d.............................
e - *
g...........................
Description of the Trust
h.................................
Contracts with Companies Affiliated with FMR
i.................................
17a ............................ Portfolio Transactions
b.............................. Portfolio Transactions
c.............................. Portfolio Transactions
*
d,e..............................
18a................................ Description of the Trust
..
*
b.................................
19a................................ Additional Purchase and Redemption Information
..
Additional Purchase and Redemption Information;
b................................ Valuation of Portfolio Securities
*
c.................................
20.................................. Distributions and Taxes
..
21a, Contracts with Companies Affiliated with FMR
b............................
*
c.................................
22.................................. Performance
..
23.................................. Financial Statements
..
</TABLE>
* Not Applicable
Please read this prospectus before investing, and
keep it on file for future reference. It contains
important information, including how each fund
invests and the services available to
shareholders.
To learn more about each fund and its
investments, you can obtain a copy of the funds'
most recent financial reports and portfolio
listing, or a copy of the Statement of Additional
Information (SAI) dated January 23, 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,
call Fidelity at 1-800-544-8888.
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.
GCF/FEG-pro-195
FIDELITY
GROWTH COMPANY
FUND
and
FIDELITY
EMERGING GROWTH
FUND
Growth Company and Emerging Growth are growth
funds. They seek to increase the value of your
investment over the long term by investing in
companies with growth
potential.
PROSPECTUS
JANUARY 23, 1995(FIDELITY_LOGO_GRAPHIC) 82
DEVONSHIRE STREET, BOSTON, MA 02109
CONTENTS
KEY FACTS THE FUNDS AT A GLANCE
WHO MAY WANT TO INVEST
EXPENSES Each fund's sales
charge (load) and its yearly
operating expenses.
FINANCIAL HIGHLIGHTS A summary
of each fund's financial data.
PERFORMANCE How each fund has
done over time.
THE FUNDS IN DETAIL CHARTER How each fund is
organized.
INVESTMENT PRINCIPLES AND RISKS
Each fund's overall approach to
investing.
BREAKDOWN OF EXPENSES How
operating costs are calculated and
what they include.
YOUR ACCOUNT DOING BUSINESS WITH FIDELITY
TYPES OF ACCOUNTS Different
ways to set up your account,
including tax-sheltered retirement
plans.
HOW TO BUY SHARES Opening an
account and making additional
investments.
HOW TO SELL SHARES Taking money
out and closing your account.
INVESTOR SERVICES Services to
help you manage your account.
SHAREHOLDER AND DIVIDENDS, CAPITAL GAINS, AND
ACCOUNT POLICIES TAXES
TRANSACTION DETAILS Share price
calculations and the timing of
purchases and redemptions.
EXCHANGE RESTRICTIONS
SALES CHARGE REDUCTIONS AND
WAIVERS
KEY FACTS
THE FUNDS AT A GLANCE
GOAL: Capital appreciation (increase in the value
of the funds' shares). As with any mutual fund,
there is no assurance that a fund will achieve its
goal.
MANAGEMENT: Fidelity Management & Research Company
(FMR) is the management arm of Fidelity
Investments, which was established in 1946 and is
now America's largest mutual fund manager.
Foreign affiliates of FMR may help choose
investments for the funds.
GROWTH COMPANY
STRATEGY: Invests mainly in common stocks and
securities convertible into common stock of
companies that FMR believes have above-average
growth potential.
SIZE: As of November 30, 1994, the fund had over
$__ billion in assets.
EMERGING GROWTH
STRATEGY: Invests mainly in equity securities of
companies that FMR believes are in the developing
stage of their life cycle, and offer the potential
for accelerated growth.
SIZE: As of November 30, 1994, the fund had over
$__ million in assets.
WHO MAY WANT TO INVEST
These funds may be appropriate for investors who
are willing to ride out stock market fluctuations
in pursuit of potentially high long-term returns.
Both funds are designed for those who want to
pursue growth wherever it may arise, and who
understand that this strategy often leads to
investments in smaller, less well-known companies,
particularly for Emerging Growth. The stocks of
small companies often involve more risk than those
of larger companies. The funds invest for growth.
They do not pursue income, and are not balanced
investment plans.
The value of each fund's investments varies
from day to day, generally reflecting changes in
market conditions and other company, political,
and economic news. Over time, stocks have
shown greater growth potential than other types of
securities. In the short er term, however,
stock prices can fluctuate dramatically in
response to these factors. When you sell
your fund shares, they may be worth more or
less than what you paid for them.
THE SPECTRUM OF
FIDELITY FUNDS
Broad categories of Fidelity
funds are presented here in
order of ascending risk.
Generally, investors seeking
to maximize return must
assume greater risk. The
funds in this prospectus are
in the GROWTH category.
(solid bullet) MONEY MARKET Seeks
income and stability by
investing in high-quality,
short-term investments.
(solid bullet) INCOME Seeks income by
investing in bonds.
(solid bullet) GROWTH AND INCOME
Seeks long-term growth and
income by investing in stocks
and bonds.
(right arrow) GROWTH Seeks long-term
growth by investing mainly in
stocks.
(checkmark)
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you
pay when you buy or sell shares of a fund. See
pages and -__ for an explanation of how and when
these charges apply. Lower sales charges may be
available for accounts over $250,000.
Maximum sales charge on purchases
(as a % of offering price) 3.00%
Maximum sales charge on
reinvested distributions None
Deferred sales charge on redemptions None
Redemption fee (as a % of amount redeemed
on shares held less than 90 days)
for Growth Company None
for Emerging Growth .75%
Exchange fee None
ANNUAL FUND OPERATING EXPENSES are paid out of
each fund's assets. Each fund pays a management
fee that varies based on its performance. It also
incurs other expenses for services such as
maintaining shareholder records and furnishing
shareholder statements and financial reports. A
fund's expenses are factored into its share price
or dividends and are not charged directly to
shareholder accounts (see page ).
The following are projections based on historical
expenses, and are calculated as a percentage of
average net assets. A portion of the brokerage
commissions that the funds paid was used to reduce
fund expenses. Without this reduction, the total
fund operating expenses would have been __% for
Growth Company and __% for Emerging Growth.
GROWTH COMPANY
Management fee %
12b-1 fee None
Other expenses %
Total fund operating expenses %
EMERGING GROWTH
Management fee %
12b-1 fee None
Other expenses %
Total fund operating expenses %
EXAMPLES: Let's say, hypothetically, that each
fund's annual return is 5% and that its operating
expenses are exactly as just described. For every
$1,000 you invested, here's how much you would pay
in total expenses if you close your account after
the number of years indicated:
GROWTH COMPANY
After 1 year $
After 3 years $
After 5 years $
After 10 years $
EMERGING GROWTH
After 1 year $
After 3 years $
After 5 years $
After 10 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.
FINANCIAL HIGHLIGHTS
The tables that follow are included in each fund's
Annual Report and have been audited by Coopers &
Lybrand L.L.P., independent accountants. Their
reports on the financial statements and
financial highlights are included in the
Annual Reports. The financial statements and
financial highlights are incorporated by
reference into (are legally a part of) the funds'
Statement of Additional Information.
[Financial Highlights to be filed by subsequent
amendment.]
PERFORMANCE
Mutual fund performance is commonly measured as
TOTAL RETURN. The total returns that follow are
based on historical fund results and do not
reflect the effect of taxes.
Each fund's fiscal year runs from December 1
through November 30. The tables below show each
fund's performance over past fiscal years compared
to two measures: investing in a broad selection of
stocks (the S&P 500 for Growth Company, and the
Russell 2000 for Emerging Growth), and not
investing at all (inflation, or CPI). To help you
compare these funds to other funds, the chart on
page __ displays calendar-year performance.
GROWTH COMPANY
Fiscal periods Past Past 5 Past
ended 1 Years 10
November 30, Year Years
1994
Average
annual
total return
Average
annual
total return
(load adj. A)
Cumulative
total return
S&P 500
(average
annual)
S&P 500
(cumulative)
Consumer
Price
Index
EMERGING GROWTH
Fiscal periods Past 1 Life of
ended Year FundB
November 30,
1994
Average
annual
total return
Average
annual
total return
(load adj. A)
Cumulative
total return
Russell 2000
(average
annual)
Russell 2000
(cumulative)
Consumer
Price
Index
A LOAD-ADJUSTED RETURNS INCLUDE THE EFFECT OF
PAYING THE FUND'S 3% SALES CHARGE.
B FROM DECEMBER 28, 1990
UNDERSTANDING
PERFORMANCE
Because these funds invest
in stocks, their performance
is related to that of the overall
stock market. Historically,
stock market performance
has been characterized by
volatility in the short run and
growth in the long run. You
can see these two
characteristics reflected in the
fund's performance; the
year-by-year total returns on
page __ show that short-term
returns can vary widely, while
the returns at right show
long-term growth.
(checkmark)
EXAMPLE: Mountain charts illustrate the growth of
a hypothetical investment over time. The charts on
the right show the growth in value of a $10,000
investment made in Growth Company on November 30,
1984 through November 30, 1994, and in Emerging
Growth on its start date, December 28, 1990,
through November 30, 1994, including the effect of
paying their 3% sales charges.
GROWTH COMPANY
Fiscal years 1984 1988 1994
Row: 1, Col: 1, Value: nil
Row: 2, Col: 1, Value: nil
Row: 3, Col: 1, Value: nil
Row: 4, Col: 1, Value: nil
Row: 5, Col: 1, Value: nil
Row: 6, Col: 1, Value: nil
Row: 7, Col: 1, Value: nil
Row: 8, Col: 1, Value: nil
Row: 9, Col: 1, Value: nil
Row: 10, Col: 1, Value: nil
Row: 11, Col: 1, Value: nil
Row: 12, Col: 1, Value: nil
Row: 13, Col: 1, Value: nil
Row: 14, Col: 1, Value: nil
Row: 15, Col: 1, Value: nil
Row: 16, Col: 1, Value: nil
Row: 17, Col: 1, Value: nil
Row: 18, Col: 1, Value: nil
Row: 19, Col: 1, Value: nil
Row: 20, Col: 1, Value: nil
Row: 21, Col: 1, Value: nil
Row: 22, Col: 1, Value: nil
Row: 23, Col: 1, Value: nil
Row: 24, Col: 1, Value: nil
Row: 25, Col: 1, Value: nil
Row: 26, Col: 1, Value: nil
Row: 27, Col: 1, Value: nil
Row: 28, Col: 1, Value: nil
Row: 29, Col: 1, Value: nil
Row: 30, Col: 1, Value: nil
Row: 31, Col: 1, Value: nil
Row: 32, Col: 1, Value: nil
Row: 33, Col: 1, Value: nil
Row: 34, Col: 1, Value: nil
Row: 35, Col: 1, Value: nil
Row: 36, Col: 1, Value: nil
Row: 37, Col: 1, Value: nil
Row: 38, Col: 1, Value: nil
Row: 39, Col: 1, Value: nil
Row: 40, Col: 1, Value: nil
Row: 41, Col: 1, Value: nil
Row: 42, Col: 1, Value: nil
Row: 43, Col: 1, Value: nil
Row: 44, Col: 1, Value: nil
Row: 45, Col: 1, Value: nil
Row: 46, Col: 1, Value: nil
Row: 47, Col: 1, Value: nil
Row: 48, Col: 1, Value: nil
Row: 49, Col: 1, Value: nil
Row: 50, Col: 1, Value: nil
Row: 51, Col: 1, Value: nil
Row: 52, Col: 1, Value: nil
Row: 53, Col: 1, Value: nil
Row: 54, Col: 1, Value: nil
Row: 55, Col: 1, Value: nil
Row: 56, Col: 1, Value: nil
Row: 57, Col: 1, Value: nil
Row: 58, Col: 1, Value: nil
Row: 59, Col: 1, Value: nil
Row: 60, Col: 1, Value: 0.0
Row: 61, Col: 1, Value: 0.0
Row: 62, Col: 1, Value: 0.0
Row: 63, Col: 1, Value: 0.0
Row: 64, Col: 1, Value: 0.0
Row: 65, Col: 1, Value: 0.0
Row: 66, Col: 1, Value: 0.0
Row: 67, Col: 1, Value: 0.0
Row: 68, Col: 1, Value: 0.0
Row: 69, Col: 1, Value: 0.0
Row: 70, Col: 1, Value: 0.0
Row: 71, Col: 1, Value: 0.0
Row: 72, Col: 1, Value: 0.0
Row: 73, Col: 1, Value: 0.0
Row: 74, Col: 1, Value: 0.0
Row: 75, Col: 1, Value: 0.0
Row: 76, Col: 1, Value: 0.0
Row: 77, Col: 1, Value: 0.0
Row: 78, Col: 1, Value: 0.0
Row: 79, Col: 1, Value: 0.0
Row: 80, Col: 1, Value: 0.0
Row: 81, Col: 1, Value: 0.0
Row: 82, Col: 1, Value: 0.0
Row: 83, Col: 1, Value: 0.0
Row: 84, Col: 1, Value: 0.0
Row: 85, Col: 1, Value: 0.0
Row: 86, Col: 1, Value: 0.0
Row: 87, Col: 1, Value: 0.0
Row: 88, Col: 1, Value: 0.0
Row: 89, Col: 1, Value: 0.0
Row: 90, Col: 1, Value: 0.0
Row: 91, Col: 1, Value: 0.0
Row: 92, Col: 1, Value: 0.0
Row: 93, Col: 1, Value: 0.0
Row: 94, Col: 1, Value: 0.0
Row: 95, Col: 1, Value: 0.0
Row: 96, Col: 1, Value: 0.0
Row: 97, Col: 1, Value: 0.0
Row: 98, Col: 1, Value: 0.0
Row: 99, Col: 1, Value: 0.0
Row: 100, Col: 1, Value: 0.0
Row: 101, Col: 1, Value: 0.0
Row: 102, Col: 1, Value: 0.0
Row: 103, Col: 1, Value: 0.0
Row: 104, Col: 1, Value: 0.0
Row: 105, Col: 1, Value: 0.0
Row: 106, Col: 1, Value: 0.0
Row: 107, Col: 1, Value: 0.0
Row: 108, Col: 1, Value: 0.0
Row: 109, Col: 1, Value: 0.0
Row: 110, Col: 1, Value: 0.0
Row: 111, Col: 1, Value: 0.0
Row: 112, Col: 1, Value: 0.0
Row: 113, Col: 1, Value: 0.0
Row: 114, Col: 1, Value: 0.0
Row: 115, Col: 1, Value: 0.0
Row: 116, Col: 1, Value: 0.0
Row: 117, Col: 1, Value: 0.0
Row: 118, Col: 1, Value: 0.0
Row: 119, Col: 1, Value: 0.0
Row: 120, Col: 1, Value: 0.0
$
$_____
EMERGING GROWTH
Fiscal years 1990 1992 1994
Row: 1, Col: 1, Value: nil
Row: 2, Col: 1, Value: nil
Row: 3, Col: 1, Value: nil
Row: 4, Col: 1, Value: nil
Row: 5, Col: 1, Value: nil
Row: 6, Col: 1, Value: nil
Row: 7, Col: 1, Value: nil
Row: 8, Col: 1, Value: nil
Row: 9, Col: 1, Value: nil
Row: 10, Col: 1, Value: nil
Row: 11, Col: 1, Value: nil
Row: 12, Col: 1, Value: nil
Row: 13, Col: 1, Value: nil
Row: 14, Col: 1, Value: nil
Row: 15, Col: 1, Value: nil
Row: 16, Col: 1, Value: nil
Row: 17, Col: 1, Value: nil
Row: 18, Col: 1, Value: nil
Row: 19, Col: 1, Value: nil
Row: 20, Col: 1, Value: nil
Row: 21, Col: 1, Value: nil
Row: 22, Col: 1, Value: nil
Row: 23, Col: 1, Value: nil
Row: 24, Col: 1, Value: nil
Row: 25, Col: 1, Value: nil
Row: 26, Col: 1, Value: nil
Row: 27, Col: 1, Value: nil
Row: 28, Col: 1, Value: nil
Row: 29, Col: 1, Value: nil
Row: 30, Col: 1, Value: nil
Row: 31, Col: 1, Value: nil
Row: 32, Col: 1, Value: nil
Row: 33, Col: 1, Value: nil
Row: 34, Col: 1, Value: nil
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$
$_____
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an
investment in a fund over a given period, assuming
reinvestment of any dividends and capital gains. A
CUMULATIVE TOTAL RETURN reflects actual
performance over a stated period of time. An
AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate
of return that, if achieved annually, would have
produced the same cumulative total return if
performance had been constant over the entire
period. Average annual total returns smooth out
variations in performance; they are not the same
as actual year-by-year results.
GROWTH COMPANY
Calendar year total returns 1985 1986 1987 1988
1989 1990 1991 1992 1993
1994
Growth Company % % % % % % % % % %
Competitive funds average % % % % % % % % %
%
Percentage (%)
Row: 1, Col: 1, Value: nil
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Row: 9, Col: 1, Value: nil
Row: 9, Col: 2, Value: nil
Row: 10, Col: 1, Value: nil
Row: 10, Col: 2, Value: nil
(large solid box) Growth
Company
(large hollow box) Competitive
funds
average
EMERGING GROWTH
Calendar year total returns 1991 1992 1993
1994
Emerging Growth % % % % % % % % % %
Competitive funds average % % % % % % % % %
%
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 1, Col: 2, Value: nil
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Row: 4, Col: 1, Value: nil
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Row: 8, Col: 2, Value: nil
Row: 9, Col: 1, Value: nil
Row: 9, Col: 2, Value: nil
Row: 10, Col: 1, Value: nil
Row: 10, Col: 2, Value: nil
(large solid box) Emerging
Growth
(large hollow box) Competitive
funds
average
THE S&P 500(registered trademark) is the Standard
& Poor's Composite Index of 500 Stocks, a
widely recognized, unmanaged index of common stock
prices. THE RUSSELL 2000(registered trademark) is
a broad index of small capitalization stocks. The
S&P 500 and Russell 2000 figures assume
reinvestment of all dividends paid by stocks
included in the indices. They do not, however,
include any allowance for the brokerage
commissions or other fees you would pay if you
actually invested in the stocks comprising the
indices.
THE CONSUMER PRICE INDEX is a widely recognized
measure of inflation calculated by the U.S.
government.
THE COMPETITIVE FUNDS AVERAGES, which assume
reinvestment of distributions, are published by
Lipper Analytical Services, Inc. Growth Company
compares its performance to the Lipper Growth
Funds, and Emerging Growth compares to the Lipper
Small Company Growth Funds. These averages
currently reflect the performance of over ___ and
___ mutual funds with similar objectives,
respectively.
Other illustrations of fund performance may show
moving averages over specified periods.
The funds' recent strategies, performance, and
holdings are detailed twice a year in financial
reports, which are sent to all shareholders. For
current performance or a free annual report, call
1-800-544-8888.
TOTAL RETURNS ARE BASED ON PAST RESULTS AND ARE
NOT AN INDICATION OF FUTURE PERFORMANCE.
THE FUNDS IN DETAIL
CHARTER
EACH FUND IS A MUTUAL FUND: an investment that
pools shareholders' money and invests it toward a
specified goal. In technical terms, each fund is
currently a diversified fund of Fidelity Mt.
Vernon Street Trust, an open-end management
investment company organized as a Massachusetts
business trust on October 12, 1982.
EACH FUND IS GOVERNED BY A BOARD OF TRUSTEES,
which is responsible for protecting the interests
of shareholders. The trustees are experienced
executives who meet throughout the year to oversee
the funds' activities, review contractual
arrangements with companies that provide services
to the funds, and review performance. The majority
of trustees are not otherwise affiliated with
Fidelity.
THE FUNDS MAY HOLD SPECIAL MEETINGS AND MAIL PROXY
MATERIALS. These meetings may be called to elect
or remove trustees, change fundamental policies,
approve a management contract, or for other
purposes. Shareholders not attending these
meetings are encouraged to vote by proxy. Fidelity
will mail proxy materials in advance, including a
voting card and information about the proposals to
be voted on. The number of votes you are
entitled to is based upon the dollar value of your
investment.
FMR AND ITS AFFILIATES
The funds are managed by FMR, which chooses their
investments and handles their business affairs.
Fidelity Management & Research (U.K.) Inc. (FMR
U.K.), in London, England, and Fidelity
Management & Research (Far East) Inc. (FMR Far
East), in Tokyo, Japan, assist FMR with
foreign investments.
Robert Stansky is manager and Vice President of
Growth Company, which he has managed since April
1987. Mr. Stansky also manages Advisor Equity
Portfolio: Growth. Previously, he managed Emerging
Growth and Select Defense and Aerospace. He joined
Fidelity in 1983.
Lawrence Greenberg is manager and Vice
President of Emerging Growth, which he has
managed since October 1993. He also manages VIP:
Growth. Previously, Mr. Greenberg managed Select
Environmental Services and Select Medical
Delivery. He also assisted on Magellan. Mr.
Greenberg joined Fidelity in 1986.
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 Service Co. (FSC) performs
transfer agent servicing functions for the funds.
FMR Corp. is the parent company of FMR, FMR Far
East, and FMR U.K. Through ownership of voting
common stock, members of the Edward C. Johnson 3d
family form a controlling group with respect to
FMR Corp. Changes may occur in the Johnson family
group, through death or disability, which would
result in changes in each individual family
member's holding of stock. Such changes could
result in one or more family members becoming
holders of over 25% of the stock. FMR Corp. has
received an opinion of counsel that changes in the
composition of the Johnson family group under
these circumstances would not result in the
termination of the funds' management or
distribution contracts and, accordingly, would not
require a shareholder vote to continue operation
under those contracts.
FMR may use its broker-dealer affiliates and other
firms that sell fund shares to carry out a fund's
transactions, provided that the fund receives
brokerage services and commission rates comparable
to those of other broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
GROWTH COMPANY seeks capital appreciation by
investing primarily in common stocks and
securities convertible into common stock of
companies that FMR believes have above-average
growth potential.
Growth may be measured by factors such as earnings
or gross sales. FMR tends to focus on smaller,
lesser known companies in new and emerging areas
of the economy. However, FMR may also pursue
growth in larger or revitalized companies that
hold a strong position in the market. These may be
found in mature or declining industries.
EMERGING GROWTH seeks capital appreciation by
investing at least 65% of its total assets in
equity securities of emerging growth companies.
FMR considers emerging growth companies to be
those in the developing stages of their life cycle
that offer the potential for accelerated earnings
or revenue growth. Although FMR focuses on
companies with market capitalization of $1 billion
or less, emerging growth companies can be any
size.
COMPANIES WITH STRONG GROWTH POTENTIAL often have
new products, technologies, distribution channels,
or other opportunities. As a general rule, these
domestic and foreign companies tend to be small
and mid-sized companies that have higher than
average price/earnings (P/E) ratios. A high P/E
ratio means that the stock is more expensive than
average relative to the company's earnings. The
market prices of these stocks may be particularly
sensitive to economic, market, or company news.
Stock values fluctuate in response to the
activities of individual companies and general
market and economic conditions. Each fund
spreads investment risk by limiting its holdings
in any one company or industry. FMR may use
various investment techniques to hedge the fund's
risks, but there is no guarantee that these
strategies will work as FMR intends. When you sell
your shares, they may be worth more or less than
what you paid for them.
FMR normally invests each fund's assets according
to its investment strategy. Each fund also
reserves the right to invest without limitation in
preferred stocks and investment-grade debt
instruments for temporary, defensive purposes.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed
information about types of instruments in which a
fund may invest, and strategies FMR may employ in
pursuit of a fund's investment objective. A
summary of risks and restrictions associated with
these instrument types and investment practices is
included as well. A complete listing of each
fund's policies and limitations and more detailed
information about the funds' investments is
contained in the funds' SAI. Policies and
limitations are considered at the time of
purchase; the sale of instruments is not required
in the event of a subsequent change in
circumstances.
FMR may not buy all of these instruments or use
all of these techniques to the full extent
permitted unless it believes that doing so will
help the funds achieve their goals. Current
holdings and recent investment strategies are
described in the funds' financial reports which
are sent to shareholders twice a year. For a free
SAI or financial report, call 1-800-544-8888.
EQUITY SECURITIES may include common stocks,
preferred stocks, convertible securities, and
warrants. Common stocks, the most familiar type,
represent an equity (ownership) interest in a
corporation. Although equity securities
have a history of long-term growth in value, their
prices fluctuate based on changes in a
company's financial condition and on overall
market and economic conditions. Smaller companies
are especially sensitive to these factors.
RESTRICTIONS: With respect to 75% of total
assets, a fund may not own more than 10% of the
outstanding voting securities of a single
issuer.
DEBT SECURITIES. Bonds and other debt instruments
are used by issuers to borrow money from
investors. The issuer pays the investor a fixed or
variable rate of interest, and must repay the
amount borrowed at maturity. Some debt securities,
such as zero coupon bonds, do not pay current
interest, but are purchased at a discount from
their face values. In general, bond prices rise
when interest rates fall, and vice versa. Debt
securities, loans, and other direct debt have
varying degrees of quality and varying levels of
sensitivity to changes in interest rates.
Longer-term bonds are generally more sensitive to
interest rate changes than short-term bonds.
RESTRICTIONS: A fund does not currently intend to
invest more than 5% of its assets in lower-quality
debt securities, commonly called "junk bonds"
(those rated below Baa by Moody's or BBB by S&P,
and unrated securities judged by FMR to be of
equivalent quality).
FOREIGN SECURITIES and foreign currencies may
involve additional risks. These include currency
fluctuations, risks relating to political or
economic conditions in the foreign country, and
the potentially less stringent investor protection
and disclosure standards of foreign markets. In
addition to the political and economic factors
that can affect foreign securities, a governmental
issuer may be unwilling to repay principal and
interest when due, and may require that the
conditions for payment be renegotiated. These
factors could make foreign investments, especially
those in developing countries, more volatile.
ADJUSTING INVESTMENT EXPOSURE. A fund can use
various techniques to increase or decrease its
exposure to changing security prices, interest
rates, currency exchange rates, commodity prices,
or other factors that affect security values.
These techniques may involve derivative
transactions such as buying and selling options
and futures contracts, entering into currency
exchange contracts or swap agreements, and
purchasing indexed securities.
FMR can use these practices to adjust the risk and
return characteristics of a fund's portfolio of
investments. If FMR judges market conditions
incorrectly or employs a strategy that does not
correlate well with a fund's investments, these
techniques could result in a loss, regardless of
whether the intent was to reduce risk or increase
return. These techniques may increase the
volatility of a fund and may involve a small
investment of cash relative to the magnitude of
the risk assumed. In addition, these techniques
could result in a loss if the counterparty to the
transaction does not perform as promised.
REPURCHASE AGREEMENTS. In a repurchase agreement,
a fund buys a security at one price and
simultaneously agrees to sell it back at a higher
price. Delays or losses could result if the other
party to the agreement defaults or becomes
insolvent.
ILLIQUID AND RESTRICTED SECURITIES. Some
investments may be determined by FMR, under the
supervision of the Board of Trustees, to be
illiquid, which means that they may be difficult
to sell promptly at an acceptable price. The sale
of other securities, including illiquid
securities, may be subject to legal restrictions.
Difficulty in selling securities may result in a
loss or may be costly to a fund.
RESTRICTIONS: A fund may not purchase a security
if, as a result, more than 10% of its assets would
be invested in illiquid securities.
OTHER INSTRUMENTS may include depositary receipts,
rights, securities of closed-end investment
companies and real estate-related
investments.
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.
RESTRICTIONS: With respect to 75% of total
assets, a fund may not invest more than 5% of its
total assets in any one issuer. A fund may not
invest more than 25% of its total assets in any
one industry. These limitations do not apply to
U.S. government securities.
BORROWING. A fund may borrow from banks or from
other funds advised by FMR, or through reverse
repurchase agreements. If a fund borrows money,
its share price may be subject to greater
fluctuation until the borrowing is paid off. If
the fund makes additional investments while
borrowings are outstanding, this may be considered
a form of leverage.
RESTRICTIONS: A fund may borrow only for temporary
or emergency purposes, but not in an amount
exceeding 33% of its total assets.
LENDING. Lending securities to broker-dealers and
institutions, including FBSI, an affiliate of FMR,
is a means of earning income. This practice could
result in a loss or a delay in recovering a fund's
securities. A fund may also lend money to other
funds advised by FMR.
RESTRICTIONS: Loans, in the aggregate, may not
exceed 33% of a fund's total assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on
the preceding pages are fundamental, that is,
subject to change only by shareholder approval.
The following paragraphs restate all those that
are fundamental. All policies stated throughout
this prospectus, other than those identified in
the following paragraphs, can be changed without
shareholder approval.
GROWTH COMPANY seeks capital appreciation. It will
seek to do so primarily by investments in the
common stock and securities convertible into
common stock of companies that in FMR's judgment
are experiencing or have the potential to
experience above-average growth characteristics.
EMERGING GROWTH seeks capital appreciation.
Each fund, with respect to 75% of total assets,
may not invest more than 5% of its total assets in
any one issuer and may not own more than 10% of
the outstanding voting securities of a single
issuer. Each fund may not invest more than 25%
of its total assets in any one industry. Each fund
may borrow only for temporary or emergency
purposes, but not in an amount exceeding 33% of
its total assets. Loans, in the aggregate, may not
exceed 33% of a fund's total assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the funds pay fees related
to their daily operations. Expenses paid out of a
fund's assets are reflected in its share price or
dividends; they are neither billed directly to
shareholders nor deducted from shareholder
accounts.
Each fund pays a MANAGEMENT FEE to FMR for
managing its investments and business affairs. FMR
in turn pays fees to affiliates who provides
assistance with these services. Each fund also
pays OTHER EXPENSES, which are explained on page .
FMR may, from time to time, agree to reimburse the
funds for management fees and other expenses above
a specified limit. FMR retains the ability to be
repaid by a fund if expenses fall below the
specified limit prior to the end of the fiscal
year. Reimbursement arrangements, which may be
terminated at any time without notice, can
decrease a fund's expenses and boost its
performance.
MANAGEMENT FEE
The management fee is calculated and paid to FMR
every month. The amount of the fee is determined
by taking a BASIC FEE and then applying a
PERFORMANCE ADJUSTMENT. The performance adjustment
either increases or decreases the management fee,
depending on how well a fund has performed
relative to an index.
Manage = Ba +/- Performa
ment sic nce
fee fee adjustme
nt
THE BASIC FEE (calculated monthly) is calculated
by adding a group fee rate to an individual fund
fee rate, and multiplying the result by a fund's
average net assets. The group fee rate is based on
the average net assets of all the mutual funds
advised by FMR. This rate cannot rise above .52%,
and it drops as total assets under management
increase.
For November 1994, the group fee rate was __%. The
individual fund fee rate is .30% for Growth
Company and .35 for Emerging Growth. The basic fee
rate for fiscal 1994 was __% for Growth Company
and __% for Emerging Growth.
THE PERFORMANCE ADJUSTMENT rate is calculated
monthly by comparing each fund's performance to
that of an index, the S&P 500 for Growth Company
and the Russell 2000 for Emerging Growth, over the
most recent 36-month period. The difference is
translated into a dollar amount that is added to
or subtracted from the basic fee. The maximum
annualized performance adjustment rate is ".20%.
The total management fee rate for fiscal 1994 was
__% for Growth Company and __% for Emerging
Growth. These rates were higher than those of most
other mutual funds as a result of a positive
performance adjustment.
UNDERSTANDING THE
MANAGEMENT FEE
The basic fee FMR receives
is designed to be responsive
to changes in FMR's total
assets under management.
Building this variable into the
fee calculation assures
shareholders that they will
pay a lower rate as FMR's
assets under management
increase.
Another variable, the
performance adjustment,
rewards FMR when a fund
outperforms an established
index of stock market
performance and reduces
FMR's fee when the fund
underperforms this index.
(checkmark)
FMR HAS SUB-ADVISORY AGREEMENTS with FMR U.K. and
FMR Far East. These sub-advisers provide FMR with
investment research and advice on issuers based
outside the United States. Under the sub-advisory
agreements, FMR pays FMR U.K. and FMR Far East
fees equal to 110% and 105%, respectively, of the
costs of providing these services.
The sub-advisers may also provide investment
management services. In return, FMR pays FMR U.K.
and FMR Far East a fee equal to 50% of its
management fee rate with respect to a fund's
investments that the sub-adviser manages on a
discretionary basis.
OTHER EXPENSES
While the management fee is a significant
component of the funds' annual operating costs,
the funds have other expenses as well.
The funds contract with FSC to perform many
transaction and accounting functions. These
services include processing shareholder
transactions, valuing each fund's investments, and
handling securities loans. In fiscal 1994, Growth
Company and Emerging Growth paid FSC fees equal to
__% and __%, respectively, of average net assets.
The funds also pay other expenses, such as legal,
audit, and custodian fees; proxy solicitation
costs; and the compensation of trustees who are
not affiliated with Fidelity. A broker-dealer
may use a portion of the commissions paid by a
fund to reduce the fund's custodian or transfer
agent fees.
For fiscal 1994, the portfolio turnover rates for
Growth Company and Emerging Growth were __% and
__%, respectively. These rates vary from year to
year. High turnover rates increase transaction
costs and may increase taxable capital gains. FMR
considers these effects when evaluating the
anticipated benefits of short-term investing.
YOUR ACCOUNT
DOING BUSINESS WITH FIDELITY
Fidelity Investments was established in 1946 to
manage one of America's first mutual funds. Today,
Fidelity is the largest mutual fund company in the
country, and is known as an innovative provider of
high-quality financial services to individuals and
institutions.
In addition to its mutual fund business, the
company operates one of America's leading discount
brokerage firms, Fidelity Brokerage Services, Inc.
(FBSI). Fidelity is also a leader in providing
tax-sheltered retirement plans for individuals
investing on their own or through their employer.
Fidelity is committed to providing investors with
practical information to make investment
decisions. Based in Boston, Fidelity provides
customers with complete service 24 hours a day,
365 days a year, through a network of telephone
service centers around the country.
To reach Fidelity for general information, call
these numbers:
(small solid bullet) For mutual funds,
1-800-544-8888
(small solid bullet) For brokerage, 1-800-544-7272
If you would prefer to speak with a representative
in person, Fidelity has over __ walk-in Investor
Centers across the country.
TYPES OF ACCOUNTS
You may set up an account directly in a fund or,
if you own or intend to purchase individual
securities as part of your total investment
portfolio, you may consider investing in a fund
through a brokerage account.
If you are investing through FBSI or another
financial institution or investment professional,
refer to its program materials for any special
provisions regarding your investment in the fund.
The different ways to set up (register) your
account with Fidelity are listed at right.
The account guidelines that follow may not apply
to certain retirement accounts. If your employer
offers a fund through a retirement program,
contact your employer for more information.
Otherwise, call Fidelity directly.
FIDELITY FACTS
Fidelity offers the broadest
selection of mutual funds
in the world.
(solid bullet) Number of Fidelity mutual
funds: over ___
(solid bullet) Assets in Fidelity mutual
funds: over $___ billion
(solid bullet) Number of shareholder
accounts: over __ million
(solid bullet) Number of investment
analysts and portfolio
managers: over ___
(checkmark)
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).
RETIREMENT
TO SHELTER YOUR RETIREMENT SAVINGS FROM TAXES
Retirement plans allow individuals to shelter
investment income and capital gains from current
taxes. In addition, contributions to these
accounts may be tax deductible. Retirement
accounts require special applications and
typically have lower minimums.
(solid bullet) INDIVIDUAL RETIREMENT ACCOUNTS
(IRAS) allow anyone of legal age and under 70 with
earned income to invest up to $2,000 per tax year.
Individuals can also invest in a spouse's IRA if
the spouse has earned income of less than $250.
(solid bullet) ROLLOVER IRAS retain special tax
advantages for certain distributions from
employer-sponsored retirement plans.
(solid bullet) KEOGH OR CORPORATE PROFIT SHARING
AND MONEY PURCHASE PENSION PLANS allow
self-employed individuals or small business owners
(and their employees) to make tax-deductible
contributions for themselves and any eligible
employees up to $30,000 per year.
(solid bullet) SIMPLIFIED EMPLOYEE PENSION PLANS
(SEP-IRAS) provide small business owners or those
with self-employed income (and their eligible
employees) with many of the same advantages as a
Keogh, but with fewer administrative requirements.
(solid bullet) 403(B) CUSTODIAL ACCOUNTS are
available to employees of most tax-exempt
institutions, including schools, hospitals, and
other charitable organizations.
(solid bullet) 401(K) PROGRAMS allow employees of
corporations of all sizes to contribute a
percentage of their wages on a tax-deferred basis.
These accounts need to be established by the
trustee of the plan.
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).
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
Requires a special application.
HOW TO BUY SHARES
ONCE EACH BUSINESS DAY, TWO SHARE PRICES ARE
CALCULATED FOR EACH FUND: the offering price and
the net asset value (NAV). The offering price
includes the 3% sales charge, which you pay when
you buy shares, unless you qualify for a reduction
or waiver as described on page . When you buy
shares at the offering price, Fidelity deducts 3%
and invests the rest at the NAV.
Shares are purchased at the next share price
calculated after your investment is received and
accepted. Share price is normally calculated at 4
p.m. Eastern time.
IF YOU ARE NEW TO FIDELITY, complete and sign an
account application and mail it along with your
check. You may also open your account in person or
by wire as described on page . If there is no
application accompanying this prospectus, call
1-800-544-8888.
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY
FUND, you can:
(small solid bullet) Mail in an application with a
check, or
(small solid bullet) Open your account by
exchanging from another Fidelity fund.
IF YOU ARE INVESTING THROUGH A TAX-SHELTERED
RETIREMENT PLAN, such as an IRA, for the first
time, you will need a special application.
Retirement investing also involves its own
investment procedures. Call 1-800-544-8888 for
more information and a retirement application.
If you buy shares by check or Fidelity Money
Line(registered trademark), and then sell those
shares by any method other than by exchange to
another Fidelity fund, the payment may be delayed
for up to seven business days to ensure that your
previous investment has cleared.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $2,500
For Fidelity retirement accounts $500
TO ADD TO AN ACCOUNT $250
For Fidelity retirement accounts $250
Through automatic investment plans $100
MINIMUM BALANCE $1,000
For Fidelity retirement accounts $500
For Growth Company, these minimums may vary for
a Fidelity Payroll Deduction Program account in
the fund. Refer to the program materials for
details.
UNDERSTANDING
SHARE PRICE
Let's say you invest $2,500 at
an offering price of $10. Of
the $10 offering price, 3%
($.30) is the sales charge,
and 97% ($9.70) represents
the NAV. The value of your
initial investment will be
$2,425 (250 shares worth
$9.70 each), and you will
have paid a sales charge of
$75.
(checkmark)
Row: 1, Col: 1, Value: 25.0
Row: 1, Col: 2, Value: 75.0
Row: 1, Col: 3, Value: 75.0
Row: 1, Col: 4, Value: 75.0
Row: 1, Col: 5, Value: 75.0
Row: 1, Col: 6, Value: 75.0
Row: 1, Col: 7, Value: 75.0
Row: 1, Col: 8, Value: 75.0
Row: 1, Col: 9, Value: 75.0
Row: 1, Col: 10, Value: 75.0
Row: 1, Col: 11, Value: 75.0
Row: 1, Col: 12, Value: 75.0
Row: 1, Col: 13, Value: 75.0
Row: 1, Col: 14, Value: 75.0
Row: 1, Col: 15, Value: 75.0
Row: 1, Col: 16, Value: 75.0
Row: 1, Col: 17, Value: 75.0
Row: 1, Col: 18, Value: 75.0
Row: 1, Col: 19, Value: 75.0
Row: 1, Col: 20, Value: 75.0
Row: 1, Col: 21, Value: 75.0
Row: 1, Col: 22, Value: 75.0
Row: 1, Col: 23, Value: 75.0
Row: 1, Col: 24, Value: 75.0
Row: 1, Col: 25, Value: 75.0
Row: 1, Col: 26, Value: 75.0
Row: 1, Col: 27, Value: 75.0
Row: 1, Col: 28, Value: 75.0
Row: 1, Col: 29, Value: 75.0
Row: 1, Col: 30, Value: 75.0
Row: 1, Col: 31, Value: 75.0
Row: 1, Col: 32, Value: 75.0
Row: 1, Col: 33, Value: 75.0
Row: 1, Col: 34, Value: 75.0
$2,500 Investment
3% sales charge = $75
Value of Investment = $2,425
<TABLE>
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TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT
Phone 1-800-544-777 (phone_graphic) (small solid bullet) Exchange from another (small solid bullet)
Exchange from another
Fidelity fund account Fidelity fund account
with the same with the same
registration, including registration, including
name, address, and name, address, and
taxpayer ID number. taxpayer ID number.
(small solid bullet)
Use Fidelity Money
Line to transfer from
your bank account. Call
before your first use
to
verify that this
service
is in place on your
account. Maximum
Money Line: $50,000.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Mail (mail_graphic) (small solid bullet) Complete and sign the (small solid bullet) Make your check
application. Make your payable to the complete
check payable to the name of the fund.
complete name of the Indicate your fund
fund of your choice. account number on
Mail to the address your check and mail to
indicated on the the address printed on
application. your account statement.
(small solid bullet) Exchange by mail:
call
1-800-544-6666 for
instructions.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
In Person (hand_graphic) (small solid bullet) Bring your application (small solid bullet) Bring your
check to a
and check to a Fidelity Fidelity Investor Center.
Investor Center. Call Call 1-800-544-9797 for
1-800-544-9797 for the the center nearest you.
center nearest you.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Wire (wire_graphic) (small solid bullet) Call 1-800-544-7777 to (small solid bullet) Not available
for
set up your account retirement accounts.
and to arrange a wire (small solid bullet) Wire to:
transaction. Not Bankers Trust
available for retirement Company,
accounts. Bank Routing
(small solid bullet) Wire within 24 hours to: #021001033,
Bankers Trust Account #00163053.
Company, Specify the complete
Bank Routing name of the fund and
#021001033, include your account
Account #00163053. number and your
Specify the complete name.
name of the fund and
include your new
account number and
your name.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Automatically (automatic_graphic) (small solid bullet) Not available. (small solid bullet) Use Fidelity
Automatic
Account Builder. Sign
up for this service
when opening your
account, or call
1-800-544-6666 to add
it.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired: 1-800-544-0118
</TABLE>
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 share price calculated after your order
is received and accepted. Share price is normally
calculated at 4 p.m. Eastern time.
TO SELL SHARES IN A NON-RETIREMENT ACCOUNT, you
may use any of the methods described on these two
pages.
TO SELL SHARES IN A FIDELITY RETIREMENT ACCOUNT,
your request must be made in writing, except for
exchanges to other Fidelity funds, which can be
requested by phone or in writing. Call
1-800-544-6666 for a retirement distribution form.
IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR
SHARES, leave at least $1,000 worth of shares in
the account to keep it open ($500 for retirement
accounts).
TO SELL SHARES BY BANK WIRE OR FIDELITY MONEY
LINE, you will need to sign up for these services
in advance.
CERTAIN REQUESTS MUST INCLUDE A SIGNATURE
GUARANTEE. It is designed to protect you and
Fidelity from fraud. Your request must be made in
writing and include a signature guarantee if any
of the following situations apply:
(small solid bullet) You wish to redeem more than
$100,000 worth of shares,
(small solid bullet) Your account registration has
changed within the last 30 days,
(small solid bullet) The check is being mailed to
a different address than the one on your account
(record address),
(small solid bullet) The check is being made
payable to someone other than the account owner,
or
(small solid bullet) The redemption proceeds are
being transferred to a Fidelity account with a
different registration.
You should be able to obtain a signature guarantee
from a bank, broker (including Fidelity Investor
Centers), 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.
SELLING SHARES IN WRITING
Write a "letter of instruction" with:
(small solid bullet) Your name,
(small solid bullet) The fund's name,
(small solid bullet) Your fund account number,
(small solid bullet) The dollar amount or number
of shares to be redeemed, and
(small solid bullet) Any other applicable
requirements listed in the table at right.
Unless otherwise instructed, Fidelity will send a
check to the record address. Deliver your letter
to a Fidelity Investor Center, or mail it to:
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
ACCOUNT TYPE SPECIAL REQUIREMENTS
<TABLE>
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IF YOU SELL SHARES OF EMERGING GROWTH AFTER HOLDING THEM LESS THAN 90 DAYS, THE FUND
WILL DEDUCT A REDEMPTION FEE EQUAL TO .75% OF THE VALUE OF THOSE SHARES.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Phone 1-800-544-777 (phone_graphic) All account types (small solid bullet) Maximum check
request:
except retirement $100,000.
(small solid bullet) For Money Line
transfers to
All account types your bank account; minimum:
$10; maximum: $100,000.
(small solid bullet) You may
exchange to other
Fidelity funds if both
accounts are registered with
the same name(s), address,
and taxpayer ID number.
Mail or in Person (mail_graphic)(hand_graphic) Individual, Joint (small solid bullet) The letter of
instruction must
Tenant, be signed by all persons
Sole Proprietorship required to sign for
, UGMA, UTMA transactions, exactly as their
Retirement account names appear on the
account.
(small solid bullet) The account
owner should
Trust complete a retirement
distribution form. Call
1-800-544-6666 to request
one.
Business or (small solid bullet) The trustee
must sign the
Organization letter indicating capacity as
trustee. If the trustee's name
is not in the account
registration, provide a copy of
the trust document certified
Executor, within the last 60 days.
Administrator, (small solid bullet) At least one
person
Conservator, authorized by corporate
Guardian resolution to act on the
account must sign the letter.
(small solid bullet) Include a
corporate
resolution with corporate seal
or a signature guarantee.
(small solid bullet) Call
1-800-544-6666 for
instructions.
Wire (wire_graphic) All account types (small solid bullet) You must sign
up for the wire
except retirement feature before using it. To
verify that it is in place, call
1-800-544-6666. Minimum
wire: $5,000.
(small solid bullet) Your wire
redemption request
must be received by Fidelity
before 4 p.m. Eastern time
for money to be wired on the
next business day.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired: 1-800-544-0118
</TABLE>
INVESTOR SERVICES
Fidelity provides a variety of services to help
you manage your account.
INFORMATION SERVICES
FIDELITY'S TELEPHONE REPRESENTATIVES are available
24 hours a day, 365 days a year. Whenever you
call, you can speak with someone equipped to
provide the information or service you need.
24-HOUR SERVICE
ACCOUNT ASSISTANCE
1-800-544-6666
ACCOUNT BALANCES
1-800-544-7544
ACCOUNT TRANSACTIONS
1-800-544-7777
PRODUCT INFORMATION
1-800-544-8888
QUOTES
1-800-544-8544
RETIREMENT ACCOUNT
ASSISTANCE
1-800-544-4774
AUTOMATED SERVICE
(checkmark)
STATEMENTS AND REPORTS that Fidelity sends to you
include the following:
(small solid bullet) Confirmation statements
(after every transaction, except reinvestments,
that affects your account balance or your account
registration)
(small solid bullet) Account statements
(quarterly)
(small solid bullet) Financial reports (every six
months)
To reduce expenses, only one copy of most
financial reports will be mailed to your
household, even if you have more than one account
in the fund. Call 1-800-544-6666 if you need
copies of financial reports or historical account
information.
TRANSACTION SERVICES
EXCHANGE PRIVILEGE. You may sell your fund shares
and buy shares of other Fidelity funds by
telephone or in writing. The shares you exchange
will carry credit for any sales charge you
previously paid in connection with their purchase.
Note that exchanges out of a fund are limited to
four per calendar year, and that they may have tax
consequences for you. For details on policies and
restrictions governing exchanges, including
circumstances under which a shareholder's exchange
privilege may be suspended or revoked, see page .
SYSTEMATIC WITHDRAWAL PLANS let you set up
periodic redemptions from your account.
Because of the funds' sales charge, you may not
want to set up a systematic withdrawal plan during
a period when you are buying shares on a regular
basis.
FIDELITY MONEY LINE(registered trademark) enables
you to transfer money by phone between your bank
account and your fund account. Most transfers are
complete within three business days of your call.
REGULAR INVESTMENT PLANS
One easy way to pursue your financial goals is to
invest money regularly. Fidelity offers convenient
services that let you transfer money into your
fund account, or between fund accounts,
automatically. While regular investment plans do
not guarantee a profit and will not protect you
against loss in a declining market, they can be an
excellent way to invest for retirement, a home,
educational expenses, and other long-term
financial goals. Certain restrictions apply for
retirement accounts. Call 1-800-544-6666 for more
information.
REGULAR INVESTMENT PLANS
FIDELITY AUTOMATIC ACCOUNT BUILDERSM
TO MOVE MONEY FROM YOUR BANK ACCOUNT TO A FIDELITY FUND
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MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Monthly or (small solid bullet) For a new account, complete the
quarterly appropriate section on the fund
application.
(small solid bullet) For existing accounts, call
1-800-544-6666 for an application.
(small solid bullet) To change the amount or frequency of
your investment, call 1-800-544-6666 at
least three business days prior to your
next scheduled investment date.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
DIRECT DEPOSIT
TO SEND ALL OR A PORTION OF YOUR PAYCHECK OR GOVERNMENT CHECK TO A FIDELITY FUNDA
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Every pay (small solid bullet) Check the appropriate box on the fund
period application, or call 1-800-544-6666 for an
authorization form.
(small solid bullet) Changes require a new authorization
form.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
FIDELITY AUTOMATIC EXCHANGE SERVICE
TO MOVE MONEY FROM A FIDELITY MONEY MARKET FUND TO ANOTHER FIDELITY FUND
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Monthly, (small solid bullet) To establish, call 1-800-544-6666 after
bimonthly, both accounts are opened.
quarterly, or (small solid bullet) To change the amount or frequency of
annually your investment, call 1-800-544-6666.
</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
Each fund distributes substantially all of its net
income and capital gains to shareholders each
year. Normally, dividends and capital gains are
distributed in January and December.
DISTRIBUTION OPTIONS
When you open an account, specify on your
application how you want to receive your
distributions. If the option you prefer is not
listed on the application, call 1-800-544-6666 for
instructions. Each fund offers four options:
5. REINVESTMENT OPTION. Your dividend and capital
gain distributions 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.
6. INCOME-EARNED OPTION. Your capital gain
distributions will be automatically reinvested,
but you will be sent a check for each dividend
distribution.
7. CASH OPTION. You will be sent a check for your
dividend and capital gain distributions.
8. DIRECTED DIVIDENDS(registered trademark)
OPTION. Your dividend and capital gain
distributions will be automatically invested in
another identically registered Fidelity fund.
FOR RETIREMENT ACCOUNTS, all distributions are
automatically reinvested. When you are over 59
years old, you can receive distributions in cash.
SHARES PURCHASED THROUGH REINVESTMENT of dividend
and capital gain distributions are not subject to
the funds' 3% sales charge. Likewise, if you
direct distributions to a fund with a 3% sales
charge, you will not pay a sales charge on those
purchases.
When a fund deducts a distribution from its NAV,
the reinvestment price is the fund's NAV at the
close of business that day. Cash distribution
checks will be mailed within seven days.
UNDERSTANDING
DISTRIBUTIONS
As a fund shareholder, you
are entitled to your share of
the fund's net income and
gains on its investments. The
fund passes its earnings
along to its investors as
DISTRIBUTIONS.
Each fund earns dividends
from stocks and interest from
bond, money market, and
other investments. These are
passed along as DIVIDEND
DISTRIBUTIONS. The fund
realizes capital gains
whenever it sells securities
for a higher price than it paid
for them. These are passed
along as CAPITAL GAIN
DISTRIBUTIONS.
(checkmark)
TAXES
As with any investment, you should consider how
your investment in a fund will be taxed. If your
account is not a tax-deferred retirement account,
you should be aware of these tax implications.
TAXES ON DISTRIBUTIONS. Distributions are subject
to federal income tax, and may also be subject to
state or local taxes. If you live outside the
United States, your distributions could also be
taxed by the country in which you reside. Your
distributions are taxable when they are paid,
whether you take them in cash or reinvest them.
However, distributions declared in December and
paid in January are taxable as if they were paid
on December 31.
For federal tax purposes, each fund's income and
short-term capital gain distributions are taxed as
dividends; long-term capital gain distributions
are taxed as long-term capital gains. Every
January, Fidelity will send you and the IRS a
statement showing the taxable distributions paid
to you in the previous year.
TAXES ON TRANSACTIONS. Your redemptions -
including exchanges to other Fidelity funds - are
subject to capital gains tax. A capital gain or
loss is the difference between the cost of your
shares and the price you receive when you sell
them.
Whenever you sell shares of a fund, Fidelity will
send you a confirmation statement showing how many
shares you sold and at what price. You will also
receive a consolidated transaction statement every
January. However, it is up to you or your tax
preparer to determine whether this sale resulted
in a capital gain and, if so, the amount of tax to
be paid. Be sure to keep your regular account
statements; the information they contain will be
essential in calculating the amount of your
capital gains.
"BUYING A DIVIDEND." If you buy shares just before
a fund deducts a distribution from its NAV, you
will pay the full price for the shares and then
receive a portion of the price back in the form of
a taxable distribution.
EFFECT OF FOREIGN TAXES. A fund may pay
withholding or other taxes to foreign governments
during the year. These taxes reduce the fund's
distributions, but are included in the taxable
income reported on your tax statement. You may be
able to claim an offsetting tax credit or itemized
deduction for foreign taxes paid by the fund. Your
tax statement will generally show the amount of
foreign tax for which a credit or deduction may be
available.
There are tax requirements that all funds must
follow in order to avoid federal taxation. In its
effort to adhere to these requirements, a fund may
have to limit its investment activity in some
types of instruments.
TRANSACTION DETAILS
THE FUNDS ARE OPEN FOR BUSINESS each day the New
York Stock Exchange (NYSE) is open. Fidelity
normally calculates each fund's NAV and offering
price as of the close of business of the NYSE,
normally 4 p.m. Eastern time.
EACH FUND'S NAV is the value of a single share.
The NAV is computed by adding the value of the
fund's investments, cash, and other assets,
subtracting its liabilities, and then dividing the
result by the number of shares outstanding.
Each fund's assets are valued primarily on the
basis of market quotations. Foreign securities
are valued on the basis of quotations from the
primary market in which they are traded, and are
translated from the local currency into U.S.
dollars using current exchange rates. If
quotations are not readily available, or if the
values have been materially affected by events
occurring after the closing of a foreign
market , assets are valued by a method that the
Board of Trustees believes accurately reflects
fair value.
THE OFFERING PRICE (price to buy one share) is the
fund's NAV plus a sales charge. The sales charge
is 3% of the offering price, or 3.09% of the net
amount invested. The REDEMPTION PRICE (price to
sell one share) is the fund's NAV.
WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will
be asked to certify that your Social Security or
taxpayer identification number is correct and that
you are not subject to 31% backup withholding for
failing to report income to the IRS. If you
violate IRS regulations, the IRS can require a
fund to withhold 31% of your taxable distributions
and redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE.
Fidelity may only be liable for
losses resulting from unauthorized transactions if
it does not follow reasonable procedures
designed to verify the identity of the caller.
Fidelity will request personalized security codes
or other information, and may also record calls.
You should verify the accuracy of your
confirmation statements immediately after you
receive them. If you do not want the ability to
redeem and exchange by telephone, call Fidelity
for instructions.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for
example, during periods of unusual market
activity), consider placing your order by mail or
by visiting a Fidelity Investor Center.
EACH FUND RESERVES THE RIGHT TO SUSPEND THE
OFFERING OF SHARES for a period of time. Each fund
also reserves the right to reject any specific
purchase order, including certain purchases by
exchange. See "Exchange Restrictions" on page .
Purchase orders may be refused if, in FMR's
opinion, they would disrupt management of a fund.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your order
will be processed at the next offering price
calculated after your order is received and
accepted. 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) Each 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 cancelled and you could be
liable for any losses or fees a fund or its
transfer agent has incurred.
TO AVOID THE COLLECTION PERIOD associated with
check and Money Line purchases, consider buying
shares by bank wire, U.S. Postal money order, U.S.
Treasury check, Federal Reserve check, or direct
deposit instead.
YOU MAY BUY SHARES OF THE FUNDS (AT THE OFFERING
PRICE) OR SELL THEM THROUGH A BROKER, who may
charge you a fee for this service. If you invest
through a broker or other institution, read its
program materials for any additional service
features or fees that may apply.
CERTAIN FINANCIAL INSTITUTIONS that have entered
into sales agreements with FDC may enter confirmed
purchase orders on behalf of customers by phone,
with payment to follow no later than the time when
a fund is priced on the following business day. If
payment is not received by that time, the
financial institution could be held liable for
resulting fees or losses.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your
shares will be sold at the next NAV calculated
after your request is received and accepted. Note
the following:
(small solid bullet) Normally, redemption proceeds
will be mailed to you on the next business day,
but if making immediate payment could adversely
affect a fund, it may take up to seven days to pay
you.
(small solid bullet) Fidelity Money Line
redemptions generally will be credited to your
bank account on the second or third business day
after your phone call.
(small solid bullet) Each fund may hold payment on
redemptions until it is reasonably satisfied that
investments made by check or Fidelity Money Line
have been collected, which can take up to seven
business days.
(small solid bullet) Redemptions may be suspended
or payment dates postponed when the NYSE is closed
(other than weekends or holidays), when trading on
the NYSE is restricted, or as permitted by the
SEC.
THE REDEMPTION FEE for Emerging Growth, if
applicable, will be deducted from the amount of
your redemption. This fee is paid to the fund
rather than FMR, and it does not apply to shares
that were acquired through reinvestment of
distributions. If shares you are redeeming were
not all held for the same length of time, those
shares you held longest will be redeemed first for
purposes of determining whether the fee applies.
IF YOUR ACCOUNT BALANCE FALLS BELOW $1,000, you
will be given 30 days' notice to reestablish the
minimum balance. If you do not increase your
balance, Fidelity reserves the right to close your
account and send the proceeds to you. Your shares
will be redeemed at the NAV on the day your
account is closed.
FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES,
such as providing historical account documents,
that are beyond the normal scope of its services.
FDC collects the proceeds from each fund's 3%
sales charge and may pay a portion of them to
securities dealers who have sold the fund's
shares, or to others, including banks and other
financial institutions (qualified recipients),
under special arrangements in connection with
FDC's sales activities. The sales charge paid to
qualified recipients is 2.25% of a fund's
offering price.
FDC may, at its own expense, provide promotional
incentives to qualified recipients who support the
sale of shares of the funds without reimbursement
from the funds. In some instances, these
incentives may be offered only to certain
institutions whose representatives provide
services in connection with the sale or expected
sale of significant amounts of shares.
EXCHANGE RESTRICTIONS
As a shareholder, you have the privilege of
exchanging shares of a fund for shares of other
Fidelity funds. However, you should note the
following:
(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) If you exchange into a fund
with a sales charge, you pay the percentage-point
difference between that fund's sales charge and
any sales charge you have previously paid in
connection with the shares you are exchanging. For
example, if you had already paid a sales charge of
2% on your shares and you exchange them into a
fund with a 3% sales charge, you would pay an
additional 1% sales charge.
(small solid bullet) Exchanges may have tax
consequences for you.
(small solid bullet) Because excessive trading can
hurt fund performance and shareholders, each fund
reserves the right to temporarily or permanently
terminate the exchange privilege of any investor
who makes more than four exchanges out of the fund
per calendar year. Accounts under common ownership
or control, including accounts with the same
taxpayer identification number, will be counted
together for purposes of the four exchange limit.
(small solid bullet) The exchange limit may be
modified for accounts in certain institutional
retirement plans to conform to plan exchange
limits and Department of Labor regulations. See
your plan materials for further information.
(small solid bullet) Each fund reserves the right
to refuse exchange purchases by any person or
group if, in FMR's judgment, the fund would be
unable to invest the money effectively in
accordance with its investment objective and
policies, or would otherwise potentially be
adversely affected.
(small solid bullet) Your exchanges may be
restricted or refused if a fund receives or
anticipates simultaneous orders affecting
significant portions of the fund's assets. In
particular, a pattern of exchanges that coincide
with a "market timing" strategy may be disruptive
to a fund.
Although the funds will attempt to give you prior
notice whenever they are reasonably able to do so,
they may impose these restrictions at any time.
The funds reserve the right to terminate or modify
the exchange privilege in the future.
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.
SALES CHARGE REDUCTIONS AND WAIVERS
REDUCTIONS. A fund's sales charge may be reduced
if you invest directly with Fidelity or through
prototype or prototype-like retirement plans
sponsored by FMR or FMR Corp. The amount you
invest, plus the value of your account, must fall
within the ranges shown below. However, purchases
made with assistance or intervention from a
financial intermediary are not eligible. Call
Fidelity to see if your purchase qualifies.
Ranges Sales charge Net amount invested
$0 - 249,999 3% 3.09%
$250,000 - 499,999 2% 2.04%
$500,000 - 999,999 1% 1.01%
$1,000,000 or more none none
The sales charge will also be reduced by the
percentage of any sales charge you previously paid
on investments in other Fidelity funds (not
including Fidelity's Foreign Currency Funds).
Similarly, your shares carry credit for any sales
charge you would have paid if the reductions in
the table above had not existed. These sales
charge credits only apply to purchases made in one
of the ways listed below, and only if you
continuously owned Fidelity fund shares or a
Fidelity brokerage core account, or participated
in The CORPORATEplan for Retirement Program.
1. By exchange from another Fidelity fund.
2. With proceeds of a transaction within a
Fidelity brokerage core account, including any
free credit balance, core money market fund, or
margin availability, to the extent such proceeds
were derived from redemption proceeds from another
Fidelity fund.
3. With redemption proceeds from one of Fidelity's
Foreign Currency Funds, if the Foreign Currency
Fund shares were originally purchased with
redemption proceeds from a Fidelity fund.
4. Through the Directed Dividends Option (see page
).
5. By participants in The CORPORATEplan for
Retirement Program when shares are purchased
through plan-qualified loan repayments, and for
exchanges into and out of the Managed Income
Portfolio.
WAIVERS. A fund's sales charge will not apply:
1. If you buy shares as part of an employee
benefit plan having more than 200 eligible
employees or a minimum of $3 million in plan
assets invested in Fidelity mutual funds.
2. To shares in a Fidelity Rollover IRA account
purchased with the proceeds of a distribution from
an employee benefit plan, provided that at the
time of the distribution, the employer or its
affiliate maintained a plan that both qualified
for waiver (1) above and had at least some of its
assets invested in Fidelity-managed products.
3. If you are a charitable organization (as
defined in Section 501(c)(3) of the Internal
Revenue Code) investing $100,000 or more.
4. If you purchase shares for a charitable
remainder trust or life income pool established
for the benefit of a charitable organization (as
defined by Section 501(c)(3) of the Internal
Revenue Code).
5. If you are an investor participating in the
Fidelity Trust Portfolios program.
6. To shares purchased through Portfolio Advisory
Services.
7. If you are a current or former trustee or
officer of a Fidelity fund or a current or retired
officer, director, or regular employee of
FMR Corp. or its direct or indirect subsidiaries
(a Fidelity Trustee or employee), the spouse of a
Fidelity trustee or employee, a Fidelity trustee
or employee acting as custodian for a minor child,
or a person acting as trustee of a trust for the
sole benefit of the minor child of a Fidelity
trustee or employee.
8. If you are a bank trust officer, registered
representative, or other employee of a qualified
recipient, as defined on page .
9. (Growth Company Only) If you invest
as part of a payroll deduction program through an
employer who is a member of the Fidelity
Retirement Client Advisory Group or the Fidelity
Retail Advisory Group, provided the employer
enters into a Fidelity payroll deduction load
waiver agreement which specifies certain
qualifying restrictions and operating
provisions.
10. To contributions and exchanges to a prototype
or prototype-like retirement plan sponsored by FMR
Corp. or FMR and which is marketed and distributed
directly to plan sponsors or participants without
any assistance or intervention from any
intermediary distribution channel.
11. If you invest through a
non-prototype pension or profit-sharing plan that
maintains all of its mutual fund assets in
Fidelity mutual funds, provided the plan executes
a Fidelity non-prototype sales charge waiver
request form confirming its qualification.
12. If you are a registered investment adviser
(RIA) purchasing for your discretionary accounts,
provided you execute a Fidelity RIA load waiver
agreement which specifies certain aggregate
minimum and operating provisions. Except for
correspondents of National Financial Services
Corporation, this waiver is available only for
shares purchased directly from Fidelity, and is
unavailable if the RIA is part of an organization
principally engaged in the brokerage business.
13. If you are a trust institution or bank trust
department purchasing for your non-discretionary,
non-retirement fiduciary accounts, provided you
execute a Fidelity Trust load waiver agreement
which specifies certain aggregate minimum and
operating provisions. This waiver is available
only for shares purchased either directly from
Fidelity or through a bank-affiliated broker, and
is unavailable if the trust department or
institution is part of an organization not
principally engaged in banking or trust
activities.
These waivers must be qualified through FDC in
advance. More detailed information about waivers
(1), (2), (5), (9), (10) and (12) is contained in
the Statement of Additional Information. A
representative of your plan or organization should
call Fidelity for more information.
From Filler pages
FIDELITY GROWTH COMPANY FUND
FIDELITY EMERGING GROWTH FUND
FUNDS OF FIDELITY MT. VERNON STREET TRUST
STATEMENT OF ADDITIONAL INFORMATION
JANUARY 23 , 199 5
This Statement is not a prospectus but should be
read in conjunction with the funds' current
Prospectus (dated January 23 , 199 5 ).
Please retain this document for future reference.
Each fund's financial statements and financial
highlights, included in the Annual Reports,
for the fiscal year ended November 30,
199 4, are incorporated herein by
reference. To obtain an additional copy of the
Prospectus or an Annual Report, please call
Fidelity Distributors Corporation at
1-800-544-8888.
TABLE OF CONTENTS PAGE
Investment Policies and Limitations
Portfolio Transactions
Valuation of Portfolio Securities
Performance
Additional Purchase and Redemption Information
Distributions and Taxes
FMR
Trustees and Officers
Management Contracts
Contracts With Companies Affiliated With FMR
Description of the Trust
Financial Statements
INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.) Inc. (FMR
U.K.)
Fidelity Management & Research (Far East) Inc.
(FMR Far East)
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
TRANSFER AGENT
Fidelity Service Co. (FSC)
GCF/FEG-ptb-19 5
INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement
those set forth in the Prospectus. Unless
otherwise noted, whenever an investment policy or
limitation states a maximum percentage of a fund's
assets that may be invested in any security or
other asset, or sets forth a policy regarding
quality standards, such standard or percentage
limitation will be determined immediately after
and as a result of 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.
Each 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)
of the fund. However, for Emerging Growth Fund,
except for the fundamental investment limitations
set forth below, the investment policies and
limitations described in this Statement of
Additional Information are not fundamental and may
be changed without shareholder approval.
INVESTMENT LIMITATIONS OF GROWTH COMPANY FUND
THE FOLLOWING ARE GROWTH COMPANY FUND'S
FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH IN
THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total
assets, purchase the securities of any issuer
(other than securities issued or guaranteed by the
U.S. government or any of its agencies or
instrumentalities) if, as a result, (a) more than
5% of the fund's total assets would be invested in
the securities of that issuer, or (b) the fund
would hold more than 10% of the outstanding voting
securities of that issuer;
(2) issue senior securities, except as
permitted under the Investment Company Act of
1940;
( 3 ) borrow money, except that the fund
may borrow money for temporary or emergency
purposes (not for leveraging or investment) in an
amount not exceeding 33 1/3% of its total assets
(including the amount borrowed) less liabilities
(other than borrowings). Any borrowings that come
to exceed this amount will be reduced within three
days (not including Sundays and holidays) to the
extent necessary to comply with the 33 1/3%
limitation;
( 4 ) underwrite any issue of securities
(except to the extent that the fund may be deemed
to be an underwriter within the meaning of the
Securities Act of 1933 in the disposition of
restricted securities);
( 5 ) 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, more than 25%
of the fund's total assets would be invested in
the securities of companies whose principal
business activities are in the same industry;
( 6 ) purchase or sell real estate unless
acquired as a result of ownership of securities or
other instruments (but this shall not prevent the
fund from investing in securities or other
instruments backed by real estate or securities of
companies engaged in the real estate
business);
( 7 ) purchase or sell physical commodities
unless acquired as a result of ownership of
securities or other instruments (but this shall
not prevent the fund from purchasing or selling
options and futures contracts or from investing in
securities or other instruments backed by physical
commodities); or
( 8 ) 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 limitation does not apply to purchases of
debt securities or to repurchase agreements.
(9) 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 does not currently intend to sell
securities short, unless it owns or has the right
to obtain securities equivalent in kind and amount
to the securities sold short, and provided that
transactions in futures contracts and options are
not deemed to constitute selling securities
short.
(ii) The fund does not currently intend to
purchase securities on margin, except that the
fund may obtain such short-term credits as are
necessary for the clearance of transactions, and
provided that margin payments in connection with
futures contracts and options on futures contracts
shall not constitute purchasing securities on
margin.
(ii 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 fundamental investment
limitation ( 3 )). 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.
(i v ) The fund does not currently intend to
purchase any security if, as a result, more than
10% of its net assets would be invested in
securities that are deemed to be illiquid because
they are subject to legal or contractual
restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of
business at approximately the prices at which they
are valued.
(v) The fund does not currently intend to
purchase interests in real estate investment
trusts that are not readily marketable or
interests in real estate limited partnerships that
are not listed on an exchange or traded on the
NASDAQ National Market System if, as a result, the
sum of such interests and other investments
considered illiquid under limitation (iv) would
exceed 10% of the fund's net assets.
(v i ) The fund does not currently intend to
lend assets other than securities to other
parties, except by (a) lending money (up to 5% of
the fund's net assets) to a registered investment
company or portfolio for which FMR or an affiliate
serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of
direct debt instruments and, in connection
therewith, assuming any associated unfunded
commitments of the sellers. (This limitation does
not apply to purchases of debt securities or to
repurchase agreements.)
(vii) The fund does not currently intend to (a)
purchase securities of other investment companies,
except in the open market where no commission
except the ordinary broker's commission is paid,
or (b) purchase or retain securities issued by
other open-end investment companies. Limitations
(a) and (b) do not apply to securities received as
dividends, through offers of exchange, or as a
result of a reorganization, consolidation, or
merger.
(viii) The fund does not currently intend to
purchase the securities of any issuer (other than
securities issued or guaranteed by domestic or
foreign governments or political subdivisions
thereof) if, as a result, more than 5% of its
total assets would be invested in the securities
of business enterprises that, including
predecessors, have a record of less than three
years of continuous operation.
(ix) The fund does not currently intend to
invest in oil, gas, or other mineral exploration
or development programs or leases.
(x) The fund does not currently intend to
purchase the securities of any issuer if those
officers and Trustees of the trust and those
officers and directors of FMR who individually own
more than 1/2 of 1% of the securities of such
issuer together own more than 5% of such issuer's
securities.
( xi ) The fund does not currently intend to
purchase warrants, valued at the lower of cost or
market, in excess of 5% of the fund's net assets.
Included in that amount, but not to exceed 2% of
the fund's net assets, may be warrants that are
not listed on the New York Stock Exchange or the
American Stock Exchange. Warrants acquired by the
fund in units or attached to securities are not
subject to these restrictions.
(xii) 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 limitations on futures and options
transactions, see the section entitled
"Limitations on Futures and Options Transactions"
on page .
INVESTMENT LIMITATIONS OF EMERGING GROWTH FUND
THE FOLLOWING ARE EMERGING GROWTH FUND'S
FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH IN
THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total
assets, purchase the securities of any issuer
(other than securities issued or guaranteed by the
U.S. government, or any of its agencies or
instrumentalities) if, as a result thereof, (a)
more than 5% of the fund's total assets would be
invested in the securities of that issuer, or (b)
the fund would hold more than 10% of the
outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted
under the Investment Company Act of 1940;
( 3 ) borrow money, except that the fund may
borrow money for temporary or emergency purposes
(not for leveraging or investment) in an amount
not exceeding 33 1/3% of the value of its total
assets (including the amount borrowed) less
liabilities (other than borrowings). Any
borrowings that come to exceed this amount will be
reduced within three days (not including Sundays
and holidays) to the extent necessary to comply
with the 33 1/3% limitation;
( 4 ) underwrite securities issued by others,
except to the extent that the fund may be
considered to be an underwriter within the meaning
of the Securities Act of 1933 in the disposition
of restricted securities;
( 5 ) 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, more than 25%
of the fund's total assets would be invested in
the securities of companies whose principal
business activities are in the same industry;
( 6 ) purchase or sell real estate unless
acquired as a result of ownership of securities or
other instruments (but this shall not prevent the
fund from investing in securities or other
instruments backed by real estate or securities of
companies engaged in the real estate business);
( 7 ) purchase or sell physical commodities
unless acquired as a result of ownership of
securities or other instruments (but this shall
not prevent the fund from purchasing or selling
options and futures contracts or from investing in
securities or other instruments backed by physical
commodities); or
( 8 ) 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 (for
this purpose, purchasing debt securities and
engaging in repurchase agreements do not
constitute lending).
(9) 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 does not currently intend to sell
securities short, unless it owns or has the right
to obtain securities equivalent in kind and amount
to the securities sold short, and provided that
transactions in futures contracts and options are
not deemed to constitute selling securities
short.
(ii) The fund does not currently intend to
purchase securities on margin, except that the
fund may obtain such short-term credits as are
necessary for the clearance of transactions, and
provided that margin payments in connection with
futures contracts and options on futures contracts
shall not constitute purchasing securities on
margin.
(ii 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 fundamental investment
limitation ( 3 )). 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.
(i v ) The fund does not currently intend to
purchase any security if, as a result, more than
10% of its net assets would be invested in
securities that are deemed to be illiquid because
they are subject to legal or contractual
restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of
business at approximately the prices at which they
are valued.
(v) The fund does not currently intend to
purchase interests in real estate investment
trusts that are not readily marketable or
interests in real estate limited partnerships that
are not listed on an exchange or traded on the
NASDAQ National Market System if, as a result, the
sum of such interests and other investments
considered illiquid under limitation (iv) would
exceed 10% of the fund's net assets.
(v i ) The fund does not currently intend to
purchase or sell futures contracts on physical
commodities.
(v i i) The fund does not currently intend to
lend assets other than securities to other
parties, except by (a) lending money (up to 5% of
the fund's net assets) to a registered investment
company or portfolio for which FMR or an affiliate
serves as investment adviser or (b) acquiring
loans, loan participations, or other forms of
direct debt instruments and, in connection
therewith, assuming any associated unfunded
commitments of the sellers. (This limitation does
not apply to purchases of debt securities or to
repurchase agreements.)
(vi i i) 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.
(i x ) 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.
(x) The fund does not currently intend to purchase
warrants, valued at the lower of cost or market,
in excess of 5% of the fund's net assets. Included
in that amount, but not to exceed 2% of the fund's
net assets, may be warrants that are not listed on
the New York Stock Exchange or the American Stock
Exchange. Warrants acquired by the fund in units
or attached to securities are not subject to these
restrictions.
(x i ) The fund does not currently intend to
invest in oil, gas, or other mineral exploration
or development programs or leases.
(xi i ) The fund does not currently intend to
purchase the securities of any issuer if those
officers and Trustees of the trust and those
officers and directors of FMR who individually own
more than 1/2 of 1% of the securities of such
issuer together own more than 5% of such issuer's
securities.
(xii) 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 limitations on futures and options
transactions, see the section entitled
"Limitations on Futures and Options Transactions"
on page .
Each fund's investments must be consistent with
its investment objective and policies.
Accordingly, not all of the security types and
investment techniques discussed below are eligible
investments for each of the funds.
AFFILIATED BANK TRANSACTIONS. A fund may
engage in transactions with financial institutions
that are, or may be considered to be, "affiliated
persons" of the fund under the Investment Company
Act of 1940. These transactions may include
repurchase agreements with custodian banks;
short-term obligations of, and repurchase
agreements with, the 50 largest U.S. banks
(measured by deposits); municipal securities; U.S.
government securities with affiliated financial
institutions that are primary dealers in these
securities; short-term currency transactions; and
short-term borrowings. In accordance with
exemptive orders issued by the Securities and
Exchange Commission, the Board of Trustees has
established and periodically reviews procedures
applicable to transactions involving affiliated
financial institutions.
FUNDS' RIGHTS AS A SHAREHOLDER. The funds do not
intend to direct or administer the day-to-day
operations of any company. Each fund, however, may
exercise its rights as a shareholder and may
communicate its views on important matters of
policy to management, the Board of Directors, and
shareholders of a company when FMR determines that
such matters could have a significant effect on
the value of a fund's investment in the company.
The activities that a fund may engage in, either
individually or in conjunction with others, may
include, among others, supporting or opposing
proposed changes in a company's corporate
structure or business activities; seeking changes
in a company's directors or management; seeking
changes in a company's direction or policies;
seeking the sale or reorganization of the company
or a portion of its assets; or supporting or
opposing third party takeover efforts. This area
of corporate activity is increasingly prone to
litigation and it is possible that a fund could be
involved in lawsuits related to such activities.
FMR will monitor such activities with a view to
mitigating, to the extent possible, the risk of
litigation against the funds and the risk of
actual liability if a fund is involved in
litigation. No guarantee can be made, however,
that litigation against a fund will not be
undertaken or liabilities incurred.
ILLIQUID INVESTMENTS are investments that cannot
be sold or disposed of in the ordinary course of
business at approximately the prices at which they
are valued. Under the supervision of the Board of
Trustees, FMR determines the liquidity of a
fund's investments and, through reports from FMR,
the Board monitors investments in illiquid
instruments. In determining the liquidity of
a fund's investments, FMR may consider
various factors, including (1) the frequency of
trades and quotations, (2) the number of dealers
and prospective purchasers in the marketplace, (3)
dealer undertakings to make a market, (4) the
nature of the security (including any demand or
tender features) and (5) the nature of the
marketplace for trades (including the ability to
assign or offset each fund's rights and
obligations relating to the investment).
Investments currently considered by the
fund s to be illiquid include repurchase
agreements not entitling the holder to payment of
principal and interest within seven days,
over-the-counter options, and non-government
stripped fixed-rate mortgage backed securities.
Also, FMR may determine some restricted
securities, government stripped fixed-rate
mortgage-backed securities, loans and other direct
debt instruments, emerging market securities,
and swap agreements to be illiquid. However,
with respect to over-the-counter options a
fund write s , all or a portion of the value
of the underlying instrument may be illiquid
depending on the assets held to cover the option
and the nature and terms of any agreement the
funds may have to close out the option before
expiration.
In the absence of market quotations, illiquid
investments are priced at fair value as determined
in good faith by a committee appointed by the
Board of Trustees. If through a change in values,
net assets, or other circumstances, a fund
were in a position where more than 10% of its net
assets w as invested in illiquid securities,
it would seek to take appropriate steps to protect
liquidity.
RESTRICTED SECURITIES generally can be sold in
privately negotiated transactions, pursuant to an
exemption from registration under the Securities
Act of 1933, or in a registered public offering.
Where registration is required, a fund may be
obligated to pay all or part of the registration
expense and a considerable period may elapse
between the time it decides to seek registration
and the time the fund may be permitted to sell a
security under an effective registration
statement. If, during such a period, adverse
market conditions were to develop, a fund might
obtain a less favorable price than prevailed when
it decided to seek registration of the security.
REAL ESTATE-RELATED INSTRUMENTS include real
estate investment trusts, commercial and
residential mortgage-backed securities, and real
estate financings. Real estate-related instruments
are sensitive to factors such as changes in real
estate values and property taxes, interest rates,
cash flow of underlying real estate assets,
overbuilding, and the management skill and
creditworthiness of the issuer. Real
estate-related instruments may also be affected by
tax and regulatory requirements, such as those
relating to the environment.
REPURCHASE AGREEMENTS. In a repurchase agreement,
a fund purchases a security and simultaneously
commits to resell that security to the 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. A repurchase
agreement involves the obligation of the seller to
pay the agreed-upon resale price, which
obligation is in effect secured by the value (at
least equal to the amount of the agreed-upon
resale price and marked to market daily) of the
underlying security. Each fund may engage in
repurchase agreements with respect to type of
any security in which it is authorized to
invest. While it does not presently appear
possible to eliminate all risks from these
transactions (particularly the possibility of a
decline in the market value of the underlying
securities, as well as delays and costs to a fund
in connection with bankruptcy proceedings), it is
each fund's current policy to limit repurchase
agreement transactions to those parties whose
creditworthiness has been reviewed and found
satisfactory by FMR.
REVERSE REPURCHASE AGREEMENTS. In a reverse
repurchase agreement, a 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, a fund will maintain appropriate
liquid assets in a segregated custodial account to
cover its obligation under the agreement. The
funds 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 a fund's assets and may be
viewed as a form of leverage.
INTERFUND BORROWING PROGRAM. The funds have
received permission form the SEC to lend money to
and borrow money from other funds advised by FMR
or its affiliates. Interfund loans and borrowings
normally will extend overnight, but can have a
maximum duration of seven days. Loans may be
called on one day's notice. A fund will
lend through the program only when the returns are
higher than those available at the same time from
other short-term instruments (such as repurchase
agreements), and will borrow through the program
only when the costs are equal to or lower than the
cost of bank loans. The funds may have to borrow
from a bank at a higher interest rate if an
interfund loan is called or not renewed. Any delay
in repayment to a lending fund could result in a
lost investment opportunity or additional
borrowing costs.
SECURITIES LENDING. Each fund may lend securities
to parties such as broker-dealers or institutional
investors, including Fidelity Brokerage Services,
Inc. (FBSI). FBSI is a member of the New York
Stock Exchange (NYSE) and a subsidiary of FMR
Corp.
Securities lending allows a fund to retain
ownership of the securities loaned and, at the
same time, to earn additional income. Since there
may be delays in the recovery of loaned
securities, or even a loss of rights in collateral
supplied should the borrower fail financially,
loans will be made only to parties deemed by FMR
to be of good standing. Furthermore, they will
only be made if, in FMR's judgment, the
consideration to be earned from such loans would
justify the risk.
FMR understands that it is the current view of the
SEC Staff that a fund may engage in loan
transactions only under the following conditions:
(1) the fund must receive 100% collateral in the
form of cash or cash equivalents (e.g., U.S.
Treasury bills or notes) from the borrower; (2)
the borrower must increase the collateral whenever
the market value of the securities loaned
(determined on a daily basis) rises above the
value of the collateral; (3) after giving notice,
the fund must be able to terminate the loan at any
time; (4) the fund must receive reasonable
interest on the loan or a flat fee from the
borrower, as well as amounts equivalent to any
dividends, interest, or other distributions on the
securities loaned and to any increase in market
value; (5) the fund may pay only reasonable
custodian fees in connection with the loan; and
(6) the Board of Trustees must be able to vote
proxies on the securities loaned, either by
terminating the loan or by entering into an
alternative arrangement with the borrower.
Cash received through loan transactions may be
invested in any security in which a fund is
authorized to invest. Investing this cash subjects
that investment, as well as the security loaned,
to market forces (i.e., capital appreciation or
depreciation).
SWAP AGREEMENTS. Swap agreements can be
individually negotiated and structured to include
exposure to a variety of different types of
investments or market factors. Depending on their
structure, swap agreements may increase or
decrease a fund's exposure to long- or short-term
interest rates (in the U.S. or abroad), foreign
currency values, mortgage securities, corporate
borrowing rates, or other factors such as security
prices or inflation rates. Swap agreements can
take many different forms and are known by a
variety of names. The funds are not limited to any
particular form of swap agreement if FMR
determines it is consistent with the fund's
investment objective and policies.
In a typical cap or floor agreement, one party
agrees to make payments only under specified
circumstances, usually in return for payment of a
fee by the other party. For example, the buyer of
an interest rate cap obtains the right to receive
payments to the extent that a specified interest
rate exceeds an agreed-upon level, while the
seller of an interest rate floor is obligated to
make payments to the extent that a specified
interest rate falls below an agreed-upon level. An
interest rate collar combines elements of buying a
cap and selling a floor.
Swap agreements will tend to shift a fund's
investment exposure from one type of investment to
another. For example, if a fund agreed to exchange
payments in dollars for payments in foreign
currency, the swap agreement would tend to
decrease the fund's exposure to U.S. interest
rates and increase its exposure to foreign
currency and interest rates. Caps and floors have
an effect similar to buying or writing options.
Depending on how they are used, swap agreements
may increase or decrease the overall volatility of
a fund's investments and its share price.
The most significant factor in the performance of
swap agreements is the change in the specific
interest rate, currency, or other factors that
determine the amounts of payments due to and from
a fund. If a swap agreement calls for payments by
a fund, the fund must be prepared to make such
payments when due. In addition, if the
counterparty's creditworthiness declined, the
value of a swap agreement would be likely to
decline, potentially resulting in losses. The
funds expect to be able to eliminate their
exposure under swap agreements either by
assignment or other disposition, or by entering
into an offsetting swap agreement with the same
party or a similarly creditworthy party.
Each fund will maintain appropriate liquid assets
in a segregated custodial account to cover their
current obligations under swap agreements. If a
fund enters into a swap agreement on a net basis,
it will segregate assets with a daily value at
least equal to the excess, if any, of the fund's
accrued obligations under the swap agreement over
the accrued amount the fund is entitled to receive
under the agreement. If a fund enters into a swap
agreement on other than a net basis, it will
segregate assets with a value equal to the full
amount of the fund's accrued obligations under the
agreement.
INDEXED SECURITIES. The funds may purchase
securities whose prices are indexed to the prices
of other securities, securities indices,
currencies, precious metals or other commodities,
or other financial indicators. Indexed securities
typically, but not always, are debt securities or
deposits whose value at maturity or coupon rate is
determined by reference to a specific instrument
or statistic. Gold-indexed securities, for
example, typically provide for a maturity value
that depends on the price of gold, resulting in a
security whose price tends to rise and fall
together with gold prices. Currency-indexed
securities typically are short-term to
intermediate-term debt securities whose maturity
values or interest rates are determined by
reference to the values of one or more specified
foreign currencies, and may offer higher yields
than U.S. dollar-denominated securities of
equivalent issuers. Currency-indexed securities
may be positively or negatively indexed; that is,
their maturity value may increase when the
specified currency value increases, resulting in a
security that performs similarly to a
foreign-denominated instrument, or their maturity
value may decline when foreign currencies
increase, resulting in a security whose price
characteristics are similar to a put on the
underlying currency. Currency-indexed securities
may also have prices that depend on the values of
a number of different foreign currencies relative
to each other.
The performance of indexed securities depends to a
great extent on the performance of the security,
currency, or other instrument to which they are
indexed, and may also be influenced by interest
rate changes in the U.S. and abroad. At the same
time, indexed securities are subject to the credit
risks associated with the issuer of the security,
and their values may decline substantially if the
issuer's creditworthiness deteriorates. Recent
issuers of indexed securities have included banks,
corporations, and certain U.S. government
agencies. Indexed securities may be more volatile
than the underlying instruments.
LOANS AND OTHER DIRECT DEBT INSTRUMENTS are
interests in amounts owed by a corporate,
governmental, or other borrower to another party.
They may represent amounts owed to lenders or
lending syndicates (loans and loan
participations), to suppliers of goods or services
(trade claims or other receivables), or to other
parties. Direct debt instruments involve the risk
of loss in case of default or insolvency of the
borrower and may offer less legal protection to
the funds in the event of fraud or
misrepresentation. In addition, loan
participations involve a risk of insolvency of the
lending bank or other financial intermediary.
Direct debt instruments may also include standby
financing commitments that obligate a fund to
supply additional cash to the borrower on demand.
FOREIGN INVESTMENTS. Investing in securities
issued by companies or other issuers whose
principal activities are outside the United States
may involve significant risks in addition to the
risks inherent in U.S. investments. The value of
securities denominated in foreign currencies and
of dividends and interest paid with respect to
such securities will fluctuate based on the
relative strength of the U.S. dollar. In addition,
there is generally less publicly available
information about foreign issuers' financial
condition and operations, particularly those not
subject to the disclosure and reporting
requirements of the U.S. securities laws. Foreign
issuers are generally not bound by uniform
accounting, auditing, and financial reporting
requirements and standards of practice comparable
to those applicable to U.S. issuers. Further,
economies of particular countries or areas of the
world may differ favorably or unfavorably from the
economy of the United States.
Investing abroad also involves different
political and economic risks. Foreign investments
may be affected by actions of foreign governments
adverse to the interests of U.S. investors,
including the possibility of expropriation or
nationalization of assets, confiscatory taxation,
restrictions on U.S. investment or on the ability
to repatriate assets or convert currency into U.S.
dollars, or other government intervention. There
may be a greater possibility of default by foreign
governments or foreign government-sponsored
enterprises. Investments in foreign countries also
involve a risk of local political, economic, or
social instability, military action or unrest, or
adverse diplomatic developments. There is no
assurance that FMR will be able to anticipate
these potential events or counter their effects.
The considerations noted above generally are
intensified for investments in developing
countries. Developing countries may have
relatively unstable governments, economies based
on only a few industries, and securities markets
that trade a small number of securities.
Foreign markets may offer less protection to
investors than U.S. markets. It is anticipated
that in most cases the best available market for
foreign securities will be on exchanges or in
over-the-counter markets located outside of the
United States. Foreign stock markets, while
growing in volume and sophistication, are
generally not as developed as those in the United
States, and securities of some foreign issuers
(particularly those located in developing
countries) may be less liquid and more volatile
than securities of comparable U.S. issuers.
Foreign security trading practices, including
those involving securities settlement where fund
assets may be released prior to receipt of
payment, may expose a fund to increased risk in
the event of a failed trade or the insolvency of a
foreign broker-dealer, and may involve substantial
delays. In addition, the costs of foreign
investing, including withholding taxes, brokerage
commissions and custodial costs, are generally
higher than for U.S. investors. In general, there
is less overall governmental supervision and
regulation of securities exchanges, brokers, and
listed companies than in the United States. It may
also be difficult to enforce legal rights in
foreign countries.
Each fund may invest in foreign securities that
impose restrictions on transfer within the United
States or to U.S. persons. Although securities
subject to such transfer restrictions may be
marketable abroad, they may be less liquid than
foreign securities of the same class that are not
subject to such restrictions.
A fund may invest in American Depository
Receipts and European Depository Receipts (ADRs
and EDRs), which are certificates evidencing
ownership of shares of a foreign-based issuer held
in trust by a bank or similar financial
institution. Designed for use in the U.S. and
European securities markets, respectively, ADRs
and EDRs are alternatives to the purchase of the
underlying securities in their national markets
and currencies.
FOREIGN CURRENCY TRANSACTIONS. The funds may
conduct foreign currency transactions on a spot
(i.e., cash) basis or by entering into forward
contracts to purchase or sell foreign currencies
at a future date and price. The funds will convert
currency on a spot basis from time to time, and
investors should be aware of the costs of currency
conversion. Although foreign exchange dealers
generally do not charge a fee for conversion, they
do realize a profit based on the difference
between the prices at which they are buying and
selling various currencies. Thus, a dealer may
offer to sell a foreign currency to the fund at
one rate, while offering a lesser rate of exchange
should the fund desire to resell that currency to
the dealer. Forward contracts are generally traded
in an interbank market conducted directly between
currency traders (usually large commercial banks)
and their customers. The parties to a forward
contract may agree to offset or terminate the
contract before its maturity, or may hold the
contract to maturity and complete the contemplated
currency exchange.
Each fund may use currency forward contracts
for any purpose consistent with its investment
objective. The following discussion summarizes the
principal currency management strategies involving
forward contracts that could be used by each fund.
The funds may also use swap agreements, indexed
securities, and options and futures contracts
relating to foreign currencies for the same
purposes.
When a fund agrees to buy or sell a security
denominated in a foreign currency, it may desire
to "lock in" the U.S. dollar price of the
security. By entering into a forward contract for
the purchase or sale, for a fixed amount of U.S.
dollars, of the amount of foreign currency
involved in the underlying security transaction,
the fund will be able to protect itself against an
adverse change in foreign currency values between
the date the security is purchased or sold and the
date on which payment is made or received. This
technique is sometimes referred to as a
"settlement hedge" or "transaction hedge." The
funds may also enter into forward contracts to
purchase or sell a foreign currency in
anticipation of future purchases or sales of
securities denominated in foreign currency, even
if the specific investments have not yet been
selected by FMR.
The funds may also use forward contracts to
hedge against a decline in the value of existing
investments denominated in foreign currency. For
example, if a fund owned securities denominated in
pounds sterling, it could enter into a forward
contract to sell pounds sterling in return for
U.S. dollars to hedge against possible declines in
the pound's value. Such a hedge, sometimes
referred to as a "position hedge," would tend to
offset both positive and negative currency
fluctuations, but would not offset changes in
security values caused by other factors. A fund
could also hedge the position by selling another
currency expected to perform similarly to the
pound sterling - for example, by entering into a
forward contract to sell Deutschemarks or European
Currency Units in return for U.S. dollars. This
type of hedge, sometimes referred to as a "proxy
hedge," could offer advantages in terms of cost,
yield, or efficiency, but generally would not
hedge currency exposure as effectively as a simple
hedge into U.S. dollars. Proxy hedges may result
in losses if the currency used to hedge does not
perform similarly to the currency in which the
hedged securities are denominated.
Each fund may enter into forward contracts to
shift its investment exposure from one currency
into another. This may include shifting exposure
from U.S. dollars to a foreign currency, or from
one foreign currency to another foreign currency.
For example, if a fund held investments
denominated in Deutschemarks, the fund could enter
into forward contracts to sell Deutschemarks and
purchase Swiss Francs. This type of strategy,
sometimes known as a "cross-hedge," will tend to
reduce or eliminate exposure to the currency that
is sold, and increase exposure to the currency
that is purchased, much as if the fund had sold a
security denominated in one currency and purchased
an equivalent security denominated in another.
Cross-hedges protect against losses resulting from
a decline in the hedged currency, but will cause
the fund to assume the risk of fluctuations in the
value of the currency it purchases.
Under certain conditions, SEC guidelines
require mutual funds to set aside appropriate
liquid assets in a segregated custodial account to
cover currency forward contracts. As required by
SEC guidelines, the funds will segregate assets to
cover currency forward contracts, if any, whose
purpose is essentially speculative. The funds
will not segregate assets to cover forward
contracts entered into for hedging purposes,
including settlement hedges, position hedges, and
proxy hedges.
Successful use of currency management
strategies will depend on FMR's skill in analyzing
and predicting currency values. Currency
management strategies may substantially change a
fund's investment exposure to changes in currency
exchange rates, and could result in losses to the
fund if currencies do not perform as FMR
anticipates. For example, if a currency's value
rose at a time when FMR had hedged a fund by
selling that currency in exchange for dollars, the
fund would be unable to participate in the
currency's appreciation. If FMR hedges currency
exposure through proxy hedges, a fund could
realize currency losses from the hedge and the
security position at the same time if the two
currencies do not move in tandem. Similarly, if
FMR increases a fund's exposure to a foreign
currency, and that currency's value declines, the
fund will realize a loss. There is no assurance
that FMR's use of currency management strategies
will be advantageous to the funds or that it will
hedge at an appropriate time.
LOWER- QUALITY DEBT SECURITIES. The funds
may purchase lower- quality debt securities
(those rated below Ba a by Moody's
Investors Service, Inc. or BB B by Standard
& Poor's Corporation , and unrated securities
judged by FMR to be of equivalent quality)
that have poor protection with respect to the
payment of interest and repayment of principal ,
or may be in default . These securities are
often considered to be speculative and involve
greater risk of loss or price changes due to
changes in the issuer's capacity to pay. The
market prices of lower- quality debt
securities may fluctuate more than those of
higher- quality debt securities and may
decline significantly in periods of general
economic difficulty, which may follow periods of
rising interest rates.
While the market for high-yield corporate debt
securities has been in existence for many years
and has weathered previous economic downturns, the
1980s brought a dramatic increase in the use of
such securities to fund highly leveraged corporate
acquisitions and restructurings. Past experience
may not provide an accurate indication of the
future performance of the high-yield bond market,
especially during periods of economic recession.
In fact, from 1989 to 1991, the percentage of
lower- qualilty securities that defaulted
rose significantly above prior levels, although
the default rate decreased in 1992 and
1993 .
The market for lower- quality debt
securities may be thinner and less active than
that for higher- quality debt securities,
which can adversely affect the prices at which the
former are sold. If market quotations are not
available, lower- quality debt securities
will be valued in accordance with procedures
established by the Board of Trustees, including
the use of outside pricing services. Judgment
plays a greater role in valuing high-yield
corporate debt securities than is the case for
securities for which more external sources for
quotations and last-sale information are
available. Adverse publicity and changing investor
perceptions may affect the ability of outside
pricing services to value lower- quality
debt securities and a fund's ability to sell these
securities.
Since the risk of default is higher for
lower- quality debt securities, FMR's
research and credit analysis are an especially
important part of managing securities of this type
held by a fund . In considering
investments for the funds, FMR will attempt to
identify those issuers of high-yielding securities
whose financial condition is adequate to meet
future obligations, has improved, or is expected
to improve in the future. FMR's analysis focuses
on relative values based on such factors as
interest or dividend coverage, asset coverage,
earnings prospects, and the experience and
managerial strength of the issuer.
Each fund may choose, at its expense or in
conjunction with others, to pursue litigation or
otherwise to exercise its rights as a security
holder to seek to protect the interests of
security holders if it determines this to be in
the best interest of a fund's shareholders.
SHORT SALES "AGAINST THE BOX." If a fund enters
into a short sale against the box, it will be
required to set aside securities equivalent in
kind and amount to the securities sold short (or
securities convertible or exchangeable into such
securities) and will be required to hold such
securities while the short sale is outstanding. A
fund will incur transaction costs, including
interest expense, in connection with opening,
maintaining, and closing short sales against the
box.
LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS.
Each fund intends to file a notice of eligibility
for exclusion from the definition of the term
"commodity pool operator" with the Commodity
Futures Trading Commission (CFTC) and the National
Futures Association, which regulate trading in the
futures markets, before engaging in any purchases
or sales of futures contracts or options on
futures contracts. The funds intend to comply with
Rule 4.5 under the Commodity Exchange Act
which limits the extent to which each fund can
commit assets to initial margin deposits and
option premiums.
In addition, each fund will not: (a) sell futures
contracts, purchase put options, or write call
options if, as a result, more than 25% of each
fund's total assets would be hedged with futures
and options under normal conditions; (b) purchase
futures contracts or write put options if, as a
result, each fund's total obligations upon
settlement or exercise of purchased futures
contracts and written put options would exceed 25%
of its total assets; or (c) purchase call options
if, as a result, the current value of option
premiums for call options purchased by each fund
would exceed 5% of the fund's total assets. These
limitations do not apply to options attached to or
acquired or traded together with their underlying
securities, and do not apply to securities that
incorporate features similar to options.
The above limitations on the funds' investments in
futures contracts and options, and the funds'
policies regarding futures contracts and options
discussed elsewhere in this Statement of
Additional Information, are not fundamental
policies and may be changed as regulatory agencies
permit.
FUTURES CONTRACTS. When a fund purchases a futures
contract, it agrees to purchase a specified
underlying instrument at a specified future date.
When a fund sells a futures contract, it agrees to
sell the underlying instrument at a specified
future date. The price at which the purchase and
sale will take place is fixed when the fund enters
into the contract. Some currently available
futures contracts are based on specific
securities, such as U.S. Treasury bonds or notes,
and some are based on indices of securities
prices, such as the Standard & Poor's 500
Co mposite Index of 500 Stocks (S&P
500). Futures can be held until their delivery
dates, or can be closed out before then if a
liquid secondary market is available.
The value of a futures contract tends to increase
and decrease in tandem with the value of its
underlying instrument. Therefore, purchasing
futures contracts will tend to increase a fund's
exposure to positive and negative price
fluctuations in the underlying instrument, much as
if it had purchased the underlying instrument
directly. When a fund sells a futures contract, by
contrast, the value of its futures position will
tend to move in a direction contrary to the
market. Selling futures contracts, therefore, will
tend to offset both positive and negative market
price changes, much as if the underlying
instrument had been sold.
FUTURES MARGIN PAYMENTS. The purchaser or seller
of a futures contract is not required to deliver
or pay for the underlying instrument unless the
contract is held until the delivery date. However,
both the purchaser and seller are required to
deposit "initial margin" with a futures broker,
known as a futures commission merchant (FCM), when
the contract is entered into. Initial margin
deposits are typically equal to a percentage of
the contract's value. If the value of either
party's position declines, that party will be
required to make additional "variation margin"
payments to settle the change in value on a daily
basis. The party that has a gain may be entitled
to receive all or a portion of this amount.
Initial and variation margin payments do not
constitute purchasing securities on margin for
purposes of each fund's investment limitations. In
the event of the bankruptcy of an FCM that holds
margin on behalf of a fund, the fund may be
entitled to return of margin owed to it only in
proportion to the amount received by the FCM's
other customers, potentially resulting in losses
to the fund.
PURCHASING PUT AND CALL OPTIONS. By purchasing a
put option, a fund obtains the right (but not the
obligation) to sell the option's underlying
instrument at a fixed strike price. In return for
this right, the fund pays the current market price
for the option (known as the option premium).
Options have various types of underlying
instruments, including specific securities,
indices of securities prices, and futures
contracts. A fund may terminate its position in a
put option it has purchased by allowing it to
expire or by exercising the option. If the option
is allowed to expire, the fund will lose the
entire premium it paid. If a fund exercises the
option, it completes the sale of the underlying
instrument at the strike price. A fund may also
terminate a put option position by closing it out
in the secondary market at its current price, if a
liquid secondary market exists.
The buyer of a typical put option can expect to
realize a gain if security prices fall
substantially. However, if the underlying
instrument's price does not fall enough to offset
the cost of purchasing the option, a put buyer can
expect to suffer a loss (limited to the amount of
the premium paid, plus related transaction costs).
The features of call options are essentially the
same as those of put options, except that the
purchaser of a call option obtains the right to
purchase, rather than sell, the underlying
instrument at the option's strike price. A call
buyer typically attempts to participate in
potential price increases of the underlying
instrument with risk limited to the cost of the
option if security prices fall. At the same time,
the buyer can expect to suffer a loss if security
prices do not rise sufficiently to offset the cost
of the option.
WRITING PUT AND CALL OPTIONS. When a fund writes a
put option, it takes the opposite side of the
transaction from the option's purchaser. In return
for receipt of the premium, the fund assumes the
obligation to pay the strike price for the
option's underlying instrument if the other party
to the option chooses to exercise it. When writing
an option on a futures contract a fund will be
required to make margin payments to an FCM as
described above for futures contracts. The fund
may seek to terminate its position in a put option
it writes before exercise by closing out the
option in the secondary market at its current
price. If the secondary market is not liquid for a
put option the fund has written, however, the fund
must continue to be prepared to pay the strike
price while the option is outstanding, regardless
of price changes, and must continue to set aside
assets to cover its position.
If security prices rise, a put writer would
generally expect to profit, although its gain
would be limited to the amount of the premium it
received. If security prices remain the same over
time, it is likely that the writer will also
profit, because it should be able to close out the
option at a lower price. If security prices fall,
the put writer would expect to suffer a loss. This
loss should be less than the loss from purchasing
the underlying instrument directly, however,
because the premium received for writing the
option should mitigate the effects of the decline.
Writing a call option obligates a fund to sell or
deliver the option's underlying instrument, in
return for the strike price, upon exercise of the
option. The characteristics of writing call
options are similar to those of writing put
options, except that writing calls generally is a
profitable strategy if prices remain the same or
fall. Through receipt of the option premium, a
call writer mitigates the effects of a price
decline. At the same time, because a call writer
must be prepared to deliver the underlying
instrument in return for the strike price, even if
its current value is greater, a call writer gives
up some ability to participate in security price
increases.
COMBINED POSITIONS. The funds may purchase and
write options in combination with each other, or
in combination with futures or forward contracts,
to adjust the risk and return characteristics of
the overall position. For example, a fund may
purchase a put option and write a call option on
the same underlying instrument, in order to
construct a combined position whose risk and
return characteristics are similar to selling a
futures contract. Another possible combined
position would involve writing a call option at
one strike price and buying a call option at a
lower price, in order to reduce the risk of the
written call option in the event of a substantial
price increase. Because combined options positions
involve multiple trades, they result in higher
transaction costs and may be more difficult to
open and close out.
CORRELATION OF PRICE CHANGES. Because there are a
limited number of types of exchange-traded options
and futures contracts, it is likely that the
standardized contracts available will not match
the funds' current or anticipated investments
exactly. A fund may invest in options and futures
contracts based on securities with different
issuers, maturities, or other characteristics from
the securities in which it typically invests which
involves a risk that the options or futures
position will not track the performance of the
fund's other investments.
Options and futures prices can also diverge from
the prices of their underlying instruments, even
if the underlying instruments match a fund's
investments well. Options and futures prices are
affected by such factors as current and
anticipated short-term interest rates, changes in
volatility of the underlying instrument, and the
time remaining until expiration of the contract,
which may not affect security prices the same way.
Imperfect correlation may also result from
differing levels of demand in the options and
futures markets and the securities markets, from
structural differences in how options and futures
and securities are traded, or from imposition of
daily price fluctuation limits or trading halts. A
fund may purchase or sell options and futures
contracts with a greater or lesser value than the
securities it wishes to hedge or intends to
purchase in order to attempt to compensate for
differences in volatility between the contract and
the securities, although this may not be
successful in all cases. If price changes in the
fund's options or futures positions are poorly
correlated with its other investments, the
positions may fail to produce anticipated gains or
result in losses that are not offset by gains in
other investments.
LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There
is no assurance a liquid secondary market will
exist for any particular options or futures
contract at any particular time. Options may have
relatively low trading volume and liquidity if
their strike prices are not close to the
underlying instrument's current price. In
addition, exchanges may establish daily price
fluctuation limits for options and futures
contracts, and may halt trading if a contract's
price moves upward or downward more than the limit
in a given day. On volatile trading days when the
price fluctuation limit is reached or a trading
halt is imposed, it may be impossible for a fund
to enter into new positions or close out existing
positions. If the secondary market for a contract
is not liquid because of price fluctuation limits
or otherwise, it could prevent prompt liquidation
of unfavorable positions, and potentially could
require a fund to continue to hold a position
until delivery or expiration regardless of changes
in its value. As a result, the fund's access to
other assets held to cover its options or futures
positions could also be impaired.
OTC OPTIONS. Unlike exchange-traded options, which
are standardized with respect to the underlying
instrument, expiration date, contract size, and
strike price, the terms of over-the-counter
options (options not traded on exchanges)
generally are established through negotiation with
the other party to the option contract. While this
type of arrangement allows a fund greater
flexibility to tailor an option to its needs, OTC
options generally involve greater credit risk than
exchange-traded options, which are guaranteed by
the clearing organization of the exchanges where
they are traded.
OPTIONS AND FUTURES RELATING TO FOREIGN
CURRENCIES. Currency futures contracts are similar
to forward currency exchange contracts, except
that they are traded on exchanges (and have margin
requirements) and are standardized as to contract
size and delivery date. Most currency futures
contracts call for payment or delivery in U.S.
dollars. The underlying instrument of a currency
option may be a foreign currency, which generally
is purchased or delivered in exchange for U.S.
dollars, or may be a futures contract. The
purchaser of a currency call obtains the right to
purchase the underlying currency, and the
purchaser of a currency put obtains the right to
sell the underlying currency.
The uses and risks of currency options and futures
are similar to options and futures relating to
securities or indices, as discussed above. The
funds may purchase and sell currency futures and
may purchase and write currency options to
increase or decrease its exposure to different
foreign currencies. The funds may also purchase
and write currency options in conjunction with
each other or with currency futures or forward
contracts. Currency futures and options values can
be expected to correlate with exchange rates, but
may not reflect other factors that affect the
value of a fund's investments. A currency hedge,
for example, should protect a Yen-denominated
security from a decline in the Yen, but will not
protect a fund against a price decline resulting
from deterioration in the issuer's
creditworthiness. Because the value of the funds'
foreign-denominated investments changes in
response to many factors other than exchange
rates, it may not be possible to match the amount
of currency options and futures to the value of a
fund's investments exactly over time.
ASSET COVERAGE FOR FUTURES AND OPTIONS POSITIONS.
The funds will comply with guidelines established
by the SEC with respect to coverage of options and
futures strategies by mutual funds, and if the
guidelines so require, will set aside appropriate
liquid assets in a segregated custodial account in
the amount prescribed. Securities held in a
segregated account cannot be sold while the
futures or option strategy is outstanding, unless
they are replaced with other suitable assets. As a
result, there is a possibility that segregation of
a large percentage of each fund's assets could
impede portfolio management or each fund's ability
to meet redemption requests or other current
obligations.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of
portfolio securities are placed on behalf of each
fund by FMR pursuant to authority contained in the
management contract. If FMR grants investment
management authority to the sub-advisers (see the
section entitled "Management Contracts"), the
sub-advisers are 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. 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; the reasonableness of any
commissions; and arrangements for payment of fund
expenses. Generally, commissions for foreign
investments traded will be higher than for U.S.
investments and may not be subject to
negotiation.
The funds may execute portfolio transactions
with broker-dealers who provide research and
execution services to the funds or other accounts
over which FMR or its affiliates exercise
investment discretion. Such services may include
advice concerning the value of securities; the
advisability of investing in, purchasing, or
selling securities; the availability of securities
or the purchasers or sellers of securities;
furnishing analyses and reports concerning
issuers, industries, securities, economic factors
and trends, portfolio strategy, and performance of
accounts; and effecting securities transactions
and performing functions incidental thereto (such
as clearance and settlement). The selection of
such broker-dealers generally is made by FMR (to
the extent possible consistent with execution
considerations) in accordance with a ranking of
broker-dealers determined periodically by FMR's
investment staff based upon the quality of
research and execution services provided.
The receipt of research from broker-dealers
that execute transactions on behalf of the funds
may be useful to FMR in rendering investment
management services to the funds or its other
clients, and conversely, such research provided by
broker-dealers who have executed transaction
orders on behalf of other FMR clients may be
useful to FMR in carrying out its obligations to
the funds. The receipt of such research has not
reduced FMR's normal independent research
activities; however, it enables FMR to avoid the
additional expenses that could be incurred if FMR
tried to develop comparable information through
its own efforts.
Subject to applicable limitations of the
federal securities laws, broker-dealers may
receive commissions for agency transactions that
are in excess of the amount of commissions charged
by other broker-dealers in recognition of their
research and execution services. In order to
cause each fund to pay such higher commissions,
FMR must determine in good faith that such
commissions are reasonable in relation to the
value of the brokerage and research services
provided by such executing broker-dealers, viewed
in terms of a particular transaction or FMR's
overall responsibilities to the funds and its
other clients. In reaching this determination,
FMR will not attempt to place a specific dollar
value on the brokerage and research services
provided, or to determine what portion of the
compensation should be related to those
services.
FMR is authorized to use research services
provided by and to place portfolio transactions
with brokerage firms that have provided assistance
in the distribution of shares of the funds or
shares of other Fidelity funds to the extent
permitted by law. FMR may use research services
provided by and place agency transactions with
Fidelity Brokerage Services, Inc. (FBSI) and
Fidelity Brokerage Services, Ltd. (FBSL),
subsidiaries of FMR Corp., if the commissions are
fair, reasonable, and comparable to commissions
charged by non-affiliated, qualified brokerage
firms for similar services.
FMR may allocate brokerage transactions to
broker-dealers who have entered into arrangements
with FMR under which the broker-dealer allocates a
portion of the commissions paid by each fund
toward payment of the fund's expenses, such as
transfer agent fees or custodian fees. The
transaction quality must, however, be comparable
to those of other qualified broker-dealers.
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 funds and review the commissions
paid by each fund over representative periods of
time to determine if they are reasonable in
relation to the benefits to the fund.
The funds' turnover rates for the fiscal years
ended November 30, 1994, and 1993 are illustrated
in the following table.
TURNOVER RATES
1994 1993
Growth Company 159%
Emerging Growth 332
Because a high turnover rate increases
transaction costs and may increase taxable gains,
FMR carefully weighs the anticipated benefits of
short-term investing against these
consequences.
The tables below list the total brokerage
commissions paid by each fund; the percentage of
brokerage commissions paid to brokerage firms that
provided research services; and the dollar amount
of commissions paid to FBSI for the fiscal periods
ended November 30, 1994, 1993, and 1992. The
tables also list the percentage of each fund's
aggregate brokerage commisssions paid to FBSI and
the percentage of each fund's aggregate dollar
amount of transactions executed through FBSI
during the same periods. Each fund pays both
commissions and spreads in connection with the
placement of portfolio transactions; FBSI is paid
on a commission basis. The difference in the
percentage of brokerage commissions paid to and
the percentage of the dollar amount of
transactions effected through FBSI is a result of
the low commission rates charged by FBSI.
GROWTH COMPANY
Fiscal Year % Paid to Commissions % of
Commissions % of Transactions
Ended Firms Providing Paid Paid Effected
November 30 TOTAL Research To FBSI to FBSI
through FBSI
1994
1993 $4,272,456 58% $1,582,189 37% 56%
1992 4,297,157 59 1,478,464 34 45
EMERGING GROWTH
Fiscal Year % Paid to Commissions % of
Commissions % of Transactions
Ended Firms Providing Paid Paid Effected
November 30 TOTAL Research To FBSI to FBSI
through FBSI
1994
1993 $2,800,470 67% $770,267 28% 45%
1992 4,166,297 59 1,370,370 33 40
From time to time the Trustees will review
whether the recapture for the benefit of the funds
of some portion of the brokerage commissions or
similar fees paid by the funds on portfolio
transactions is legally permissible and advisable.
Each fund seeks to recapture soliciting
broker-dealer fees on the tender of portfolio
securities, but at present no other recapture
arrangements are in effect. The Trustees intend
to continue to review whether recapture
opportunities are available and are legally
permissible and, if so, to determine in the
exercise of their business judgment whether it
would be advisable for each fund to seek such
recapture.
Although the Trustees and officers of each fund
are substantially the same as those of other funds
managed by FMR, investment decisions for each fund
are made independently from those of other funds
managed by FMR or accounts managed by FMR
affiliates. It sometimes happens that the same
security is held in the portfolio of more than one
of these funds or accounts. Simultaneous
transactions are inevitable when several funds and
accounts are managed by the same investment
adviser, particularly when the same security is
suitable for the investment objective of more than
one fund or account.
When two or more funds are simultaneously
engaged in the purchase or sale of the same
security, the prices and amounts are allocated in
accordance with procedures believed to be
appropriate and equitable for each fund. In some
cases this system could have a detrimental effect
on the price or value of the security as far as
each fund is concerned. In other cases, however,
the ability of the funds to participate in volume
transactions will produce better executions and
prices for the funds. It is the current opinion
of the Trustees that the desirability of retaining
FMR as investment adviser to each fund outweighs
any disadvantages that may be said to exist from
exposure to simultaneous transactions.
VALUATION OF PORTFOLIO SECURITIES
Portfolio securities are valued by various methods
depending on the primary market or exchange on
which they trade. Most e quity securities
for which the primary market is the U.S. are
valued at last sale price or, if no sale has
occurred, at the closing bid price. Most
e quity securities for which the primary market
is outside the U.S. are valued using the official
closing price or the last sale price in the
principal market where they are traded. If the
last sale price (on the local exchange) is
unavailable, the last evaluated quote or last bid
price is normally used. Short-term securities are
valued either at amortized cost or at original
cost plus accrued interest, both of which
approximate current value. Convertible
securities and f ixed-income securities are
valued primarily by a pricing service that uses a
vendor security valuation matrix which
incorporates both dealer-supplied valuations and
electronic data processing techniques. This
twofold approach is believed to more accurately
reflect fair value because it takes into account
appropriate factors such as institutional trading
in similar groups of securities, yield, quality,
coupon rate, maturity, type of issue, trading
characteristics, and other market data, without
exclusive reliance upon quoted, exchange, or
over-the counter prices. Use of pricing services
has been approved by the Board of Trustees.
Securities and other assets for which there is no
readily available market are valued in good faith
by a committee appointed by the Board of Trustees.
The procedures set forth above need not be used to
determine the value of the securities owned by
each fund if, in the opinion of a committee
appointed by the Board of Trustees, some other
method (e.g., closing over-the-counter bid prices
in the case of debt instruments traded on an
exchange) would more accurately reflect the fair
market value of such securities.
Generally, the valuation of foreign and domestic
equity securities, as well as corporate bonds,
U.S. government securities, money market
instruments, and repurchase agreements, is
substantially completed each day at the close of
the NYSE. The values of any such securities held
by each fund are determined as of such time for
the purpose of computing the fund's net asset
value. Foreign security prices are furnished by
independent brokers or quotation services which
express the value of securities in their local
currency. FSC gathers all exchange rates daily at
the close of the NYSE using the last quoted price
on the local currency and then translates the
value of foreign securities from their local
currency into U.S. dollars. Any changes in the
value of forward contracts due to exchange rate
fluctuations and days to maturity are included in
the calculation of net asset value. If an
extraordinary event that is expected to materially
affect the value of a portfolio security occurs
after the close of an exchange on which that
security is traded, then the security will be
valued as determined in good faith by a committee
appointed by the Board of Trustees.
PERFORMANCE
The funds may quote performance in various
ways. All performance information supplied by the
funds in advertising is historical and is not
intended to indicate future returns. Each fund's
share price, yield, and total return fluctuate in
response to market conditions and other factors,
and the value of fund shares when redeemed may be
more or less than their original cost.
TOTAL RETURN CALCULATIONS. Total returns
quoted in advertising reflect all aspects of a
fund's return, including the effect of reinvesting
dividends and capital gain distributions, and any
change in the fund's net asset value (NAV) over a
stated period. Average annual total returns are
calculated by determining the growth or decline in
value of a hypothetical historical investment in a
fund over a stated period, and then calculating
the annually compounded percentage rate that would
have produced the same result if the rate of
growth or decline in value had been constant over
the period. For example, a cumulative total
return of 100% over ten years would produce an
average annual 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 returns are a convenient means of
comparing investment alternatives, investors
should realize that a fund's performance is not
constant over time, but changes from year to year,
and that average annual returns represent averaged
figures as opposed to the actual year-to-year
performance of the fund.
In addition to average annual total returns, a
fund may quote unaveraged or cumulative total
returns reflecting the simple change in value of
an investment over a stated period. Average
annual and cumulative total returns may be quoted
as a percentage or as a dollar amount, and may be
calculated for a single investment, a series of
investments, or a series of redemptions, over any
time period. Total returns may be broken down
into their components of income and capital
(including capital gains and changes in share
price) in order to illustrate the relationship of
these factors and their contributions to total
return. Total returns may be quoted on a
before-tax or after-tax basis and may be quoted
with or without taking the fund's 3% maximum sales
charge into account and may or may not include the
effect of Emerging Growth's .75% redemption fee on
shares held less than 90 days. Excluding a fund's
sales charge and redemption fee from a total
return calculation produces a higher total return
figure. Total returns, yields, and other
performance information may be quoted numerically
or in a table, graph, or similar illustration.
NET ASSET VALUE. Charts and graphs using a
fund's net asset values, adjusted net asset values
and benchmark indices may be used to exhibit
performance. An adjusted NAV includes any
distributions paid by a fund and reflects all
elements of its return. Unless otherwise
indicated, a fund's adjusted NAVs are not adjusted
for sales charges, if any.
MOVING AVERAGES. The funds may illustrate
performance using moving averages. A long-term
moving average is the average of each week's
adjusted closing NAV for a specified period. A
short-term moving average is the average of each
day's adjusted closing NAV for a specified period.
Moving Average Activity Indicators combine
adjusted closing NAVs from the last business day
of each week with moving averages for a specified
period to produce indicators showing when an NAV
has crossed, stayed above, or stayed below its
moving average. On November 30, 1994, the 13-week
and 39-week moving averages were __% and __%, and
__% and __% for Growth Company and Emerging
Growth, respectively.
HISTORICAL FUND RESULTS. The following table
shows the funds' total returns for period ended
November 30, 1994. Total return figures include
the effect of the funds' 3% sales charge, but do
not include the effect of Emerging Growth's .75%
redemption fee, applicable to shares held less
than 90 days.
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
One
Five
One
Five
Year Years Ten Years Year Years Ten
Years
GROWTH
COMPANY
</TABLE>
AVERAGE ANNUAL TOTAL RETURNS CUMULATIVE TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
One
One
Year Life of Fund* Year Life of Fund*
EMERGING
GROWTH
</TABLE>
* From December 28, 1990 (commencement of
operations).
The following table shows the income and
capital elements of each fund's cumulative total
return. The table compares each fund's return to
the record of the Standard and Poor's Composite
Index of 500 Stocks (S&P 500(registered
trademark)), the Dow Jones Industrial Average
(DJIA), and the cost of living (measured by the
Consumer Price Index, or CPI) over the same
period. The CPI information is as of the month
end closest to the initial investment date for
each fund. The S&P 500 and the DJIA comparisons
are provided to show how each fund's total return
compared to the record of a broad average of
common stock prices and a narrower set of stocks
of major industrial companies, respectively, over
the same period. Each fund has the ability to
invest in securities not included in either index,
and its investment portfolio may or may not be
similar in composition to the indices. Figures
for the S&P 500 and DJIA are based on the prices
of unmanaged groups of stocks and, unlike the
funds' returns, do not include the effect of
paying brokerage commissions and other costs of
investing.
During the ten year period ended November 30,
1994, a hypothetical $10,000 investment in
Fidelity Growth Company Fund would have grown to
$______, after deducting the fund's 3% sales
charge and assuming all distributions were
reinvested. This was a period of fluctuating
stock prices and the figures below should not be
considered representative of the dividend income
or capital gain or loss that could be realized
from an investment in the fund today.
FIDELITY GROWTH COMPANY FUND INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
<C>
Value of Value of Value of
Initial Reinvested Reinvested
Cost
Year $10,000 Dividend Capital Gain Total S&P
of
Ended Investment Distributions Distributions Value 500
DJIA Living*
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
</TABLE>
**From month-end closest to initial investment
date.
Explanatory Notes: With an initial investment
of $10,000 made on November 30, 1984, assuming the
3% load had been in effect the net amount invested
in fund shares was $9,700. The cost of the
initial investment ($10,000), together with the
aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their
cash value at the time they were reinvested),
amounted to $______. If distributions had not
been reinvested, the amount of distributions
earned from the fund over time would have been
smaller, and cash payments for the period would
have amounted to $______ for dividends and $_____
for capital gains distributions. Tax consequences
of different investments have not been factored
into the above figures.
During the period from December 28, 1990
(commencement of operations) to November 30, 1994,
a hypothetical $10,000 investment in Fidelity
Emerging Growth Fund would have grown to $______,
after deducting the fund's 3% sales charge and
assuming all distributions were reinvested. This
was a period of fluctuating stock prices and the
figures below should not be considered
representative of the dividend income or capital
gain or loss that could be realized from an
investment in the fund today.
FIDELITY EMERGING GROWTH FUND INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Value of Value of Value of
Initial Reinvested Reinvested Cost
Year $10,000 Dividend Capital Gain Total S&P Russell of
Ended Investment Distributions Distributions Value 500 DJIA 2000 Living**
1991* $14,366 $0 $ 0 $14,366 $11,782 $11,370 $13,682 $10,299
1992 16,412 0 544 16,956 13,962 13,371 16,909 10,613
1993 19,041 23 1,259 20,322 15,372 15,341 20,113 10,897
</TABLE>
1994
* From December 28, 1990 (commencement of
operations).
** From month-end closest to initial investment
date.
Explanatory Notes: With an initial investment
of $10,000 made on December 28, 1990, assuming the
3% load had been in effect the net amount invested
in fund shares was $9,700. The cost of the
initial investment ($10,000), together with the
aggregate cost of reinvested dividends and capital
gain distributions for the period covered (their
cash value at the time they were reinvested),
amounted to $______. If distributions had not
been reinvested, the amount of distributions
earned from the fund over time would have been
smaller, and cash payments for the period would
have amounted to $______ for dividends and $_____
for capital gains distributions. Tax consequences
of different investments have not been factored
into the above figures. The figures shown above do
not reflect the fund's .75% redemption fee
applicable to shares held less than 90 days.
A fund's performance may be compared to the
performance of other mutual funds in general, or
to the performance of particular types of mutual
funds. These comparisons may be expressed as
mutual fund rankings prepared by Lipper Analytical
Services, Inc. (Lipper), an independent service
located in Summit, New Jersey that monitors the
performance of mutual funds. Lipper generally
ranks funds on the basis of total return, assuming
reinvestment of distributions, but does not take
sales charges or redemption fees into
consideration, and is prepared without regard to
tax consequences. In addition to the mutual fund
rankings, a fund's performance may be compared to
stock, bond, and money market mutual fund
performance indices prepared by Lipper or other
organizations. When comparing these indices, it
is important to remember the risk and return
characteristics of each type of investment. For
example, while stock mutual funds may offer higher
potential returns, they also carry the highest
degree of share price volatility. Likewise, money
market funds may offer greater stability of
principal, but generally do not offer the higher
potential returns from stock mutual funds.
From time to time, a fund's performance may
also be compared to other mutual funds tracked by
financial or business publications and
periodicals. For example, 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.
A fund may be compared in advertising to
Certificates of Deposit (CDs) or other investments
issued by banks or other depository institutions.
Mutual funds differ from bank investments in
several respects. For example, a fund may offer
greater liquidity or higher potential returns than
CDs, a fund does not guarantee your principal or
your return, and fund shares are not FDIC
insured.
Fidelity may provide information designed to
help individuals understand their investment goals
and explore various financial strategies. Such
information may include information about current
economic, market, and political conditions;
materials that describe general principles of
investing, such as asset allocation,
diversification, risk tolerance, and goal setting;
questionnaires designed to help create a personal
financial profile; worksheets used to project
savings needs based on assumed rates of inflation
and hypothetical rates of return; and action plans
offering investment alternatives. Materials may
also include discussions of Fidelity's asset
allocation funds and other Fidelity funds,
products, and services.
Ibbotson Associates of Chicago, Illinois
(Ibbotson) provides historical returns of the
capital markets in the United States, including
common stocks, small capitalization stocks,
long-term corporate bonds, intermediate-term
government bonds, long-term government bonds,
Treasury bills, the U.S. rate of inflation (based
on the CPI), and combinations of various capital
markets. The performance of these capital markets
is based on the returns of different indices.
Fidelity funds may use the performance of these
capital markets in order to demonstrate general
risk-versus-reward investment scenarios.
Performance comparisons may also include the value
of a hypothetical investment in any of these
capital markets. The risks associated with the
security types in any capital market may or may
not correspond directly to those of the funds.
Ibbotson calculates total returns in the same
method as the funds. The funds may also compare
performance to that of other compilations or
indices that may be developed and made available
in the future.
In advertising materials, Fidelity may
reference or discuss its products and services,
which may include: other Fidelity funds;
retirement investing; brokerage products and
services; the effects of periodic investment plans
and dollar cost averaging; 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, including model portfolios or
allocations, 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.
A fund may present its fund number,
Quotron(trademark) number, and CUSIP number, and
discuss or quote its current portfolio
manager.
VOLATILITY. A fund may quote various measures
of volatility and benchmark correlation in
advertising. In addition, the fund may compare
these measures to those of other funds. Measures
of volatility seek to compare the fund's
historical share price fluctuations or total
returns to those of a benchmark. Measures of
benchmark correlation indicate how valid a
comparative benchmark may be. All measures of
volatility and correlation are calculated using
averages of historical data.
MOMENTUM INDICATORS indicate a fund's price
movements over specific periods of time. Each
point on the momentum indicator represents the
fund's percentage change in price movements over
that period.
A fund may advertise examples of the effects of
periodic investment plans, including the principle
of dollar cost averaging. In such a program, an
investor invests a fixed dollar amount in a fund
at periodic intervals, thereby purchasing fewer
shares when prices are high and more shares when
prices are low. While such a strategy does not
assure a profit or guard against loss in a
declining market, the investor's average cost per
share can be lower than if fixed numbers of shares
are purchased at the same intervals. In
evaluating such a plan, investors should consider
their ability to continue purchasing shares during
periods of low price levels.
A fund may be available for purchase through
retirement plans or other programs offering
deferral of, or exemption from, income taxes,
which may produce superior after-tax returns over
time. For example, a $1,000 investment earning a
taxable return of 10% annually would have an
after-tax value of $1,949 after ten years,
assuming tax was deducted from the return each
year at a 31% rate. An equivalent tax-deferred
investment would have an after-tax value of $2,100
after ten years, assuming tax was deducted at a
31% rate from the tax-deferred earnings at the end
of the ten-year period.
As of November 30, 1994, 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 funds may reference the growth and variety of
money market mutual funds and the adviser's
innovation and participation in the industry. The
equity funds under management figure represents
the largest amount of equity fund assets under
management by a mutual fund investment adviser in
the United States, making FMR America's leading
equity (stock) fund manager. FMR, its
subsidiaries, and affiliates maintain a worldwide
information and communications network for the
purpose of researching and managing investments
abroad.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
Pursuant to Rule 22d-1 under the Investment
Company Act of 1940 (the 1940 Act), FDC exercises
its right to waive each fund's front-end sales
charge on shares acquired through reinvestment of
dividends and capital gain distributions or in
connection with the fund's merger with or
acquisition of any investment company or trust. In
addition, FDC has chosen to waive each fund's
sales charge in certain instances because of
efficiencies involved in those sales of shares.
The sales charge will not apply:
1. to shares purchased in connection with an
employee benefit plan (including the
Fidelity-sponsored 403(b) and corporate IRA
programs but otherwise as defined in the Employee
Retirement Income Security Act) maintained by a
U.S. employer and having more than 200 eligible
employees, or a minimum of $3,000,000 in plan
assets invested in Fidelity mutual funds, or as
part of an employee benefit plan maintained by a
U.S. employer that is a member of a
parent-subsidiary group of corporations (within
the meaning of Section 1563(a)(1) of the Internal
Revenue Code, with "50%" substituted for "80%")
any member of which maintains an employee benefit
plan having more than 200 eligible employees, or a
minimum of $3,000,000 in plan assets invested in
Fidelity mutual funds, or as part of an employee
benefit plan maintained by a non-U.S. employer
having 200 or more eligible employees, or a
minimum of $3,000,000 in assets invested in
Fidelity mutual funds, the assets of which are
held in a bona fide trust for the exclusive
benefit of employees participating therein;
2. to shares purchased by an insurance company
separate account used to fund annuity contracts
purchased by employee benefit plans (including
403(b) programs, but otherwise as defined in the
Employee Retirement Income Security Act), which,
in the aggregate, have either more than 200
eligible employees or a minimum of $3,000,000 in
assets invested in Fidelity funds;
3. to shares in a Fidelity IRA account
purchased (including purchases by exchange) with
the proceeds of a distribution from an employee
benefit plan provided that: (i) at the time of the
distribution, the employer, or an affiliate (as
described in exemption (1) above) of such
employer, maintained at least one employee benefit
plan that qualified for exemption (1) and that had
at least some portion of its assets invested in
one or more mutual funds advised by FMR, or in one
or more accounts or pools advised by Fidelity
Management Trust Company; and (ii) the
distribution is transferred from the plan to a
Fidelity Rollover IRA account within 60 days from
the date of the distribution;
4. to shares purchased by a charitable
organization (as defined in Section 501(c)(3) of
the Internal Revenue Code) investing $100,000 or
more;
5. to shares purchased for a charitable
remainder trust or life income pool established
for the benefit of a charitable organization (as
defined by Section 501(c)(3) of the Internal
Revenue Code);
6. to shares purchased by an investor
participating in the Fidelity Trust Portfolios
program (these investors must make initial
investments of $100,000 or more in the Trust
Portfolios funds and must, during the initial
six-month period, reach and maintain an aggregate
balance of at least $500,000 in all accounts and
subaccounts purchased through the Trust Portfolios
program);
7. to shares purchased through Portfolio
Advisory Services;
8. to shares purchased by a current or former
Trustee or officer of a Fidelity fund or a current
or retired officer, director, or regular employee
of FMR Corp. or its direct or indirect
subsidiaries (a Fidelity Trustee or employee), the
spouse of a Fidelity Trustee or employee, a
Fidelity Trustee or employee acting as custodian
for a minor child, or a person acting as trustee
of a trust for the sole benefit of the minor child
of a Fidelity Trustee or employee;
9. to shares purchased by a bank trust officer,
registered representative, or other employee of a
qualified recipient. Qualified recipients are
securities dealers or other entities, including
banks and other financial institutions, who have
sold the fund's shares under special arrangements
in connection with FDC's sales activities;
10. (Growth Company only) to shares purchased
as part of a payroll deduction program (including
shares purchased in an amount greater than $5,000
by participants in the program within three months
of the commencement of their participation in the
program from sources other than payroll deduction)
through an employer who has entered into a
Fidelity payroll deduction load waiver agreement
and who (i) is a member of the Fidelity Retirement
Client Advisory Group and maintains an employee
benefit plan that either qualifies for exemption
(1) above or is in the CORPORATEplan for
Retirement Program and has at least some of its
plan assets in Fidelity-managed products, or (ii)
is a member of the Fidelity Retail Advisory Group
and has more than 500 employees;
11. to shares purchased by contributions and
exchanges to the following prototype or
prototype-like retirement plans sponsored by FMR
Corp. or FMR and that are marketed and distributed
directly to plan sponsors or participants without
any intervention or assistance from any
intermediary distribution channel: The Fidelity
IRA, the Fidelity Rollover IRA, The Fidelity
SEP-IRA and SARSEP, The Fidelity Retirement Plan,
Fidelity Defined Benefit Plan, The Fidelity Group
IRA, The Fidelity 403(b) Program, The Fidelity
Investments 401(a) Prototype Plan for Tax-Exempt
Employers, and The CORPORATEplan for Retirement
(Profit Sharing and Money Purchase Plan);
12. to shares purchased as part of a pension or
profit-sharing plan as defined in Section 401(a)
of the Internal Revenue Code that maintains all of
its mutual fund assets in Fidelity mutual funds,
provided the plan executes a Fidelity
non-prototype sales charge waiver request form
confirming its qualification;
13. to shares purchased by a registered
investment adviser (RIA) for his or her
discretionary accounts, provided he or she
executes a Fidelity RIA load waiver agreement
which specifies certain aggregate minimum and
operating provisions. This waiver is available
only for shares purchased directly from Fidelity,
without a broker, unless purchased through a
brokerage firm which is a correspondent of
National Financial Services Corporation (NFSC).
The waiver is unavailable, however, if the RIA is
part of an organization principally engaged in the
brokerage business, unless the brokerage firm in
the organization is an NFSC correspondent; or
14. to shares purchased by a trust institution
or bank trust department for its
non-discretionary, non-retirement fiduciary
accounts, provided it executes a Fidelity Trust
load waiver agreement which specifies certain
aggregate minimum and operating provisions. This
waiver is available only for shares purchased
either directly from Fidelity or through a
bank-affiliated broker, and is unavailable if the
trust department or institution is part of an
organization not principally engaged in banking or
trust activities.
The fund's sales charge may be reduced to
reflect sales charges previously paid, or that
would have been paid absent a reduction for some
purchases made directly with Fidelity as noted in
the prospectus, in connection with investments in
other Fidelity funds. This includes reductions for
investments in prototype-like retirement plans
sponsored by FMR or FMR Corp., which are listed
above.
Each fund's sales charge may be reduced to
reflect sales charges previously paid, or that
would have been paid absent a reduction for some
purchases made directly with Fidelity as noted in
the prospectus, in connection with investments in
other Fidelity funds. This includes reductions for
investments in prototype-like retirement plans
sponsored by FMR or FMR Corp., which are listed
above.
Each fund is open for business and its net
asset value per share (NAV) is calculated each day
the New York Stock Exchange (NYSE) is open for
trading. The NYSE has designated the following
holiday closings for 1995: New Year's Day
(observed), Washington's Birthday (observed), Good
Friday, Memorial Day (observed), Independence Day,
Labor Day, Thanksgiving Day, and Christmas Day.
Although FMR expects the same holiday schedule to
be observed in the future, the NYSE may modify its
holiday schedule at any time.
FSC normally determines the fund's NAV as of
the close of the NYSE (normally 4:00 p.m. Eastern
time). However, NAV may be calculated earlier if
trading on the NYSE is restricted or as permitted
by the SEC. To the extent that portfolio
securities are traded in other markets on days
when 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. In
addition, trading in some of the fund's portfolio
securities may not occur on days when the fund is
open for business.
FSC normally determines each fund's NAV as of
the close of the NYSE (normally 4:00 p.m. Eastern
time). However, NAV may be calculated earlier if
trading on the NYSE is restricted or as permitted
by the SEC. To the extent that portfolio
securities are traded in other markets on days
when the NYSE is closed, a fund's NAV may be
affected on days when investors do not have access
to the fund to purchase or redeem shares. In
addition, trading in some of a fund's portfolio
securities may not occur on days when the fund is
open for business.
If the Trustees determine that existing
conditions make cash payments undesirable,
redemption payments may be made in whole or in
part in securities or other property, valued for
this purpose as they are valued in computing a
fund's NAV. Shareholders receiving securities or
other property on redemption may realize a gain or
loss for tax purposes, and will incur any costs of
sale, as well as the associated
inconveniences.
Pursuant to Rule 11a-3 under the Investment
Company Act of 1940 (the 1940 Act), each fund is
required to give shareholders at least 60 days'
notice prior to terminating or modifying its
exchange privilege. Under the Rule, the 60-day
notification requirement may be waived if (i) the
only effect of a modification would be to reduce
or eliminate an administrative fee, redemption
fee, or deferred sales charge ordinarily payable
at the time of an exchange, or (ii) the fund
suspends the redemption of the shares to be
exchanged as permitted under the 1940 Act or the
rules and regulations thereunder, or the fund to
be acquired suspends the sale of its shares
because it is unable to invest amounts effectively
in accordance with its investment objective and
policies.
In the prospectus, each fund has notified
shareholders that it reserves the right at any
time, without prior notice, to refuse exchange
purchases by any person or group if, in FMR's
judgment, the fund would be unable to invest
effectively in accordance with its investment
objective and policies, or would otherwise
potentially be adversely affected.
DISTRIBUTIONS AND TAXES
DISTRIBUTIONS. If you request to have
distributions mailed to you and the U.S. Postal
Service cannot deliver your checks, or if your
checks remain uncashed for six months, Fidelity
may reinvest your distributions at the
then-current NAV. All subsequent distributions
will then be reinvested until you provide Fidelity
with alternate instructions.
DIVIDENDS. A portion of each fund's income
may qualify for the dividends-received deduction
available to corporate shareholders to the extent
that the fund's income is derived from qualifying
dividends. Because each fund may earn other
types of income, such as interest income from
securities loans, non-qualifying dividends, and
short-term capital gains, the percentage of
dividends from the fund that qualifies for
the deduction generally will be less than 100%.
Each fund will notify corporate
shareholders annually of the percentage of fund
dividends that qualifies for the
dividends-received deduction. A portion of
each fund's dividends derived from certain
U.S. government obligations may be exempt from
state and local taxation. Gains (losses)
attributable to foreign currency fluctuations are
generally taxable as ordinary income, and
therefore will increase (decrease) dividend
distributions. Short-term capital gains are
treated as dividend income. Each fund will
send each shareholder a notice in January
describing the tax status of dividend and capital
gain distributions for the prior year.
CAPITAL GAIN DISTRIBUTIONS. Long-term capital
gains earned by each 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 a
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 each fund are taxable to
shareholders as dividends, not as capital gains.
Growth Company and Emerging Growth hereby
designate approximately $_____ and $______,
respectively, as a capital gain dividend for the
purpose of the dividend-paid deduction. As of
November 30, 1994, Growth Company and Emerging
Growth had a capital loss carryforward aggregating
approximately $_____ and $____, respectively. This
loss carryforward for Growth Company, of which
$___, $___, and $___ will expire on November 30,
___, ___, and ___, respectively, is available to
offset future capital gains. This loss
carryforward for Emerging Growth, of which $___,
$___, and $___ will expire on November 30, ___,
___, 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 typically at a rate
between 10% and 35%. Foreign governments may also
impose taxes on other payments or gains with
respect to foreign securities. If, at the close
of its fiscal year, more than 50% of a fund's
total assets are invested in securities of foreign
issuers, the fund may elect to pass through
foreign taxes paid and thereby allow shareholders
to take a credit or deduction on their individual
tax returns.
TAX STATUS OF THE FUNDS. Each fund intends
to qualify each year as a "regulated investment
company" for tax purposes so that it will not be
liable for federal tax on income and capital gains
distributed to shareholders. In order to qualify
as a regulated investment company and avoid being
subject to federal income or excise taxes at the
fund level, each fund intends to distribute
substantially all of its net investment income and
net realized capital gains within each calendar
year as well as on a fiscal year basis. Each fund
intends to comply with other tax rules applicable
to regulated investment companies, including a
requirement that capital gains from the sale of
securities held less than three months constitute
less than 30% of the fund's gross income for each
fiscal year. Gains from some forward currency
contracts, futures contracts, and options are
included in this 30% calculation, which may limit
the fund's investments in such instruments.
If a fund purchases shares in certain foreign
investment entities, defined as passive foreign
investment companies (PFICs) in the Internal
Revenue Code, it may be subject to U.S. federal
income tax on a portion of any excess distribution
or gain from the disposition of such shares.
Interest charges may also be imposed on a fund
with respect to deferred taxes arising from such
distributions or gains. Generally, each fund
will elect to mark-to-market any PFIC shares.
Unrealized gains will be recognized as income for
tax purposes and must be distributed to
shareholders as dividends. Each fund is treated as
a separate entity from the other funds of Fidelity
Mt. Vernon Street Trust for tax purposes.
OTHER TAX INFORMATION. The information above is
only a summary of some of the tax consequences
generally affecting each fund and its
shareholders, and no attempt has been made to
discuss individual tax consequences. In addition
to federal income taxes, shareholders may be
subject to state and local taxes on fund
distributions, and shares may be subject to state
and local personal property taxes. Investors
should consult their tax advisers to determine
whether a fund is suitable to their particular tax
situation.
FMR
All of the stock of FMR is owned by
FMR Corp., its parent company organized in
1972. Through ownership of voting common stock
and the execution of a shareholders' voting
agreement, Edward C. Johnson 3d, Johnson family
members, and various trusts for the benefit of the
Johnson family 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, 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 funds,
establishes procedures for personal investing, and
restricts certain transactions. For example, all
personal trades require pre-clearance, and
participation in initial public offerings are
prohibited. In addition, restrictions on the
timing of personal investing relative 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. All persons named as Trustees also serve in
similar capacities for other funds advised by FMR.
Unless otherwise noted, the business address of
each Trustee and officer is 82 Devonshire Street,
Boston, Massachusetts 02109, which is also the
address of FMR. Those Trustees who are "interested
persons" (as defined in the 1940 Act) by virtue of
their affiliation with either the trust or FMR are
indicated by an asterisk (*).
*EDWARD C. JOHNSON 3d, Trustee and President,
is Chairman, Chief Executive Officer and a
Director of FMR Corp.; a Director and Chairman of
the Board and of the Executive Committee of FMR;
Chairman and a Director of FMR Texas Inc. (1989),
Fidelity Management & Research (U.K.) Inc., and
Fidelity Management & Research (Far East) Inc.
*J. GARY BURKHEAD, Trustee and Senior Vice
President, is President of FMR; and President and
a Director of FMR Texas Inc. (1989), Fidelity
Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.
RALPH F. COX, 200 Rivercrest Drive, Fort Worth,
TX, Trustee (1991), is 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, P.O. Box 264,
Bridgehampton, NY, Trustee (1992). Prior to her
retirement in September 1991, Mrs. Davis was the
Senior Vice President of Corporate Affairs of Avon
Products, Inc. She is currently a Director of
BellSouth Corporation (telecommunications), Eaton
Corporation (manufacturing, 1991), and the TJX
Companies, Inc. (retail stores, 1990), and
previously served as a Director of Hallmark Cards,
Inc. (1985-1991) and Nabisco Brands, Inc. In
addition, she is a member of the President's
Advisory Council of The University of Vermont
School of Business Administration.
RICHARD J. FLYNN, 77 Fiske Hill, Sturbridge,
MA, Trustee, is a financial consultant. Prior to
September 1986, Mr. Flynn was Vice Chairman and a
Director of the Norton Company (manufacturer of
industrial devices). He is currently a Director
of Mechanics Bank and a Trustee of College of the
Holy Cross and Old Sturbridge Village, Inc.
E. BRADLEY JONES, 3881-2 Lander Road, Chagrin
Falls, OH, Trustee (1990). Prior to his
retirement in 1984, Mr. Jones was Chairman and
Chief Executive Officer of LTV Steel Company.
Prior to May 1990, he was Director of National
City Corporation (a bank holding company) and
National City Bank of Cleveland. He is a Director
of TRW Inc. (original equipment and replacement
products), Cleveland-Cliffs Inc (mining), NACCO
Industries, Inc. (mining and marketing),
Consolidated Rail Corporation, Birmingham Steel
Corporation, Hyster-Yale Materials Handling, Inc.
(1989), and RPM, Inc. (manufacturer of chemical
products, 1990). In addition, he serves as a
Trustee of First Union Real Estate Investments,
Chairman of the Board of Trustees and a member of
the Executive Committee of the Cleveland Clinic
Foundation, a Trustee and a member of the
Executive Committee of University School
(Cleveland), and a Trustee of Cleveland Clinic
Florida.
DONALD J. KIRK, 680 Steamboat Road, Apartment
#1-North, Greenwich, CT, Trustee, is a Professor
at Columbia University Graduate School of Business
and a financial consultant. Prior to 1987, he was
Chairman of the Financial Accounting Standards
Board. Mr. Kirk is a Director of General Re
Corporation (reinsurance) and Valuation Research
Corp. (appraisals and valuations, 1993). In
addition, he serves as Vice Chairman of the Board
of Directors of the National Arts Stabilization
Fund and Vice Chairman of the Board of Trustees of
the Greenwich Hospital Association.
*PETER S. LYNCH, Trustee (1990) is Vice
Chairman of FMR (1992). Prior to his retirement
on May 31, 1990, he was a Director of FMR (1989)
and Executive Vice President of FMR (a position he
held until March 31, 1991); Vice President of
Fidelity Magellan Fund and FMR Growth Group
Leader; and Managing Director of FMR Corp. Mr.
Lynch was also Vice President of Fidelity
Investments Corporate Services (1991-1992). He is
a Director of W.R. Grace & Co. (chemicals, 1989)
and Morrison Knudsen Corporation (engineering and
construction). In addition, he serves as a
Trustee of Boston College, Massachusetts Eye & Ear
Infirmary, Historic Deerfield (1989) and Society
for the Preservation of New England Antiquities,
and as an Overseer of the Museum of Fine Arts of
Boston (1990).
GERALD C. McDONOUGH, 135 Aspenwood Drive,
Cleveland, OH, Trustee (1989), is Chairman of G.M.
Management Group (strategic advisory services).
Prior to his retirement in July 1988, he was
Chairman and Chief Executive Officer of Leaseway
Transportation Corp. (physical distribution
services). Mr. McDonough is a Director of
ACME-Cleveland Corp. (metal working,
telecommunications and electronic products),
Brush-Wellman Inc. (metal refining), York
International Corp. (air conditioning and
refrigeration, 1989), Commercial Intertech Corp.
(water treatment equipment, 1992), and Associated
Estates Realty Corporation (a real estate
investment trust, 1993).
EDWARD H. MALONE, 5601 Turtle Bay Drive #2104,
Naples, FL, Trustee. Prior to his retirement in
1985, Mr. Malone was Chairman, General Electric
Investment Corporation and a Vice President of
General Electric Company. He is a Director of
Allegheny Power Systems, Inc. (electric utility),
General Re Corporation (reinsurance) and Mattel
Inc. (toy manufacturer). 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, 55 Railroad Avenue, Greenwich,
CT, Trustee (1993) is Chairman of the Board,
President, and Chief Executive Officer of Lexmark
International, Inc. (office machines, 1991).
Prior to 1991, he held the positions of Vice
President of International Business Machines
Corporation ("IBM") and President and General
Manager of various IBM divisions and subsidiaries.
Mr. Mann is a Director of M.A. Hanna Company
(chemicals, 1993) and Infomart (marketing
services, 1991), a Trammell Crow Co. In addition,
he serves as the Campaign Vice Chairman of the
Tri-State United Way (1993) and is a member of the
University of Alabama President's Cabinet
(1990).
THOMAS R. WILLIAMS, 21st Floor, 191 Peachtree
Street, N.E., Atlanta, GA, Trustee, is President
of The Wales Group, Inc. (management and financial
advisory services). Prior to retiring in 1987,
Mr. Williams served as Chairman of the Board of
First Wachovia Corporation (bank holding company),
and Chairman and Chief Executive Officer of The
First National Bank of Atlanta and First Atlanta
Corporation (bank holding company). He is
currently a Director of BellSouth Corporation
(telecommunications), ConAgra, Inc. (agricultural
products), Fisher Business Systems, Inc. (computer
software), Georgia Power Company (electric
utility), Gerber Alley & Associates, Inc.
(computer software), National Life Insurance
Company of Vermont, American Software, Inc.
(1989), and AppleSouth, Inc. (restaurants,
1992).
GARY L. FRENCH, Treasurer (1991). Prior to
becoming Treasurer of the Fidelity funds, Mr.
French was Senior Vice President, Fund Accounting
- - Fidelity Accounting & Custody Services Co.
(1991); Vice President, Fund Accounting - Fidelity
Accounting & Custody Services Co. (1990); and
Senior Vice President, Chief Financial and
Operations Officer - Huntington Advisers, Inc.
(1985-1990).
JOHN H. COSTELLO, Assistant Treasurer, is an
employee of FMR.
LEONARD M. RUSH, 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).
ARTHUR S. LORING, Secretary, is Senior Vice
President (1993) and General Counsel of FMR, Vice
President-Legal of FMR Corp., and Vice President
and Clerk of FDC.
LAWRENCE GREENBERG is manager and Vice
President of Emerging Growth, which he has managed
since October 1993. He also manages VIP: Growth.
Previously, Mr. Greenberg managed Select
Environmental Services and Select Medical
Delivery. He also assisted on Magellan. Mr.
Greenberg joined Fidelity in 1986.
WILLIAM J. HAYES, Vice President (1994), is
Vice President of Fidelity's equity funds; Senior
Vice President of FMR; and Managing Director of
FMR Corp.
ROBERT E. STANSKY is manager and Vice President
of Growth Company, which he has managed since
April 1987. Mr. Stansky also manages Advisor
Equity Portfolio: Growth. Previously, he managed
Emerging Growth and Select Defense and Aerospace.
He joined Fidelity in 1983.
ROBERT H. MORRISON, Manager of Security
Transactions of Fidelity's equity funds, is Vice
President of FMR.
Under a retirement program that became
effective on November 1, 1989, Trustees, upon
reaching age 72, become eligible to participate in
a defined benefit retirement program under which
they receive payments during their lifetime from
the fund based on their basic trustee fees and
length of service. Currently, Messrs. William R.
Spaulding, Bertram H. Witham, and David L. Yunich
participate in the program.
[Beneficial Ownership to be updated]
MANAGEMENT CONTRACTS
Each fund employs FMR to furnish investment
advisory and other services. Under its management
contract with each fund, FMR acts as investment
adviser and, subject to the supervision of the
Board of Trustees, directs the investments of each
fund in accordance with its investment objective,
policies, and limitations. FMR also provides each
fund with all necessary office facilities and
personnel for servicing the funds' investments,
and compensates all officers of the trust, all
Trustees who are "interested persons" of the trust
or of FMR, and all personnel of the trust or FMR
performing services relating to research,
statistical, and investment activities.
In addition, FMR or its affiliates, subject to the
supervision of the Board of Trustees, provide the
management and administrative services necessary
for the operation of each fund. These services
include providing facilities for maintaining each
fund's organization; supervising relations with
custodians, transfer and pricing agents,
accountants, underwriters, and other persons
dealing with the funds; preparing all general
shareholder communications and conducting
shareholder relations; maintaining each fund's
records and the registration of each fund's shares
under federal and state law; developing management
and shareholder services for the funds; and
furnishing reports, evaluations, and analyses on a
variety of subjects to the Board of Trustees.
In addition to the management fee payable to FMR
and the fees payable to FSC, each fund pays all of
its expenses, without limitation, that are not
assumed by those parties. Each fund pays for
typesetting, printing, and mailing proxy material
to shareholders, legal expenses, and the fees of
the custodian, auditor, and non-interested
Trustees. Although each fund's management contract
provides that it will pay for typesetting,
printing, and mailing prospectuses, statements of
additional information, notices, and reports to
existing shareholders, the trust has entered into
a revised transfer agent agreement with FSC,
pursuant to which FSC bears the cost of providing
these services to existing shareholders. Other
expenses paid by the funds include interest,
taxes, brokerage commissions, each fund's
proportionate share of insurance premiums and
Investment Company Institute dues, and the costs
of registering shares under federal and state
securities laws. Each fund is also liable for such
nonrecurring expenses as may arise, including
costs of any litigation to which a fund may be a
party, and any obligation it may have to indemnify
the trust's officers and Trustees with respect to
litigation.
FMR is the funds' manager pursuant to
management contract s dated December 1,
1994 , which w ere approved by
shareholders on November 1 6 , 19 94 .
For the services of FMR under the contracts, each
fund pays FMR a monthly management fee composed of
the sum of two elements: a basic fee and a
performance adjustment based on a comparison of
each fund's performance to the performance of its
comparative index.
COMPUTING THE BASIC FEE. Each fund's basic fee
rate is composed of two elements: a group fee rate
and an individual fund fee rate. The group fee
rate is based on the monthly average net assets of
all of the registered investment companies with
which FMR has management contracts and is
calculated on a cumulative basis pursuant to the
graduated fee rate schedule shown on the left. On
the right, the effective fee rate schedule shows
the results of cumulatively applying the
annualized rates at varying asset levels. For
example, the effective annual fee rate at
$ ___ billion of group net assets - their
approximate level for November 199 4 - was
____ %, which is the weighted average of the
respective fee rates for each level of group net
assets up to $ ___ billion.
GROUP FEE RATE SCHEDULE
EFFECTIVE ANNUAL FEE RATES
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Average Group
Annualized
Group Net
Effective Annual
Assets Rate Assets Fee Rate
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
0 - $ 3 billion .5200% $ 0.5 billion .5200%
3 - 6 .4900 25 .4238
6 - 9 .4600 50 .3823
9 - 12 .4300 75 .3626
12 - 15 .4000 100 .3512
15 - 18 .3850 125 .3430
18 - 21 .3700 150 .3371
21 - 24 .3600 175 .3325
24 - 30 .3500 200 .3284
30 - 36 .3450 225 .3253
36 - 42 .3400 250 .3223
42 - 48 .3350 275 .3198
48 - 66 .3250 300 .3175
66 - 84 .3200 325 .3153
84 - 102 .3150 350 .3133
102 - 138 .3100
138 - 174 .3050
174 - 228 .3000
228 - 282 .2950
282 - 336 .2900
Over 336 .2850
</TABLE>
Prior to December 1, 1994, the group fee rate
was based on a schedule with breakpoints ending at
.3100% for average group assets in excess of $102
billion for Growth Company, and .3000% for average
group assets in excess of $174 billion for
Emerging Growth. The group fee rate breakpoints
shown above for average group assets in excess of
$138 billion and under $228 billion were
voluntarily adopted by FMR on January 1, 1992.
The additional breakpoints shown above for average
group assets in excess of $228 billion were
voluntarily adopted by FMR on November 1,
1993.
On August 1, 1994, FMR voluntarily revised the
prior extensions to the group fee rate schedule,
and added new breakpoints. The revised group fee
rate schedule provides for lower management fee
rates as FMR's assets under management increase.
Each fund's current management contract reflects
the group fee rate schedule above for average
group assets under $210 billion and the group fee
rate schedule below for average group assets in
excess of $210 billion.
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Average Group
Annualized
Group Net
Effective Annual
Assets Rate Assets Fee Rate
138 - $174 billion .3050% $150 billion .3371%
174 - 210 .3000 175 .3325
210 - 246 .2950 200 .3284
246 - 282 .2900 225 .3249
282 - 318 .2850 250 .3219
318 - 354 .2800 275 .3190
354 - 390 .2750 300 .3163
Over 390 .2700 325 .3137
</TABLE>
350 .3113
375 .3090
400 .3067
The individual fund fee rates for Growth Company
and Emerging Growth are .30% and .35%,
respectively. Based on the average net assets of
the funds advised by FMR for November 199 4 ,
the annual basic fee rate would be calculated as
follows:
Group Fee Rate Individual Fund Fee Rate Basic
Fee Rate
Growth Company . ____ % + .30% =
. ____ %
Emerging Growth . ____ % + .35% =
. ____ %
One twelfth (1/12) of each fund's annual basic fee
rate is then applied to its average net assets for
the current month, giving a dollar amount which is
the fee for that month.
COMPUTING THE PERFORMANCE ADJUSTMENTS. The basic
fee is subject to upward or downward adjustment,
depending upon whether, and to what extent, the
funds' investment performance for the performance
period exceeds, or is exceeded by, the record of
the S&P 500 (Growth Company) or the Russell 2000
Index (Emerging Growth) over the same period. The
performance period consists of the most recent
month plus the previous 35 months. Each percentage
point of difference (up to a maximum difference of
+ 10) is multiplied by a performance adjustment
rate of .02%. Thus, the maximum annualized
adjustment rate is + .20%. This performance
comparison is made at the end of each month. One
twelfth (1/12) of this rate is then applied to a
fund's average net assets for the entire
performance period, giving a dollar amount which
will be added to (or subtracted from) the basic
fee.
Each fund's performance is calculated based on
change in net asset value. For purposes of
calculating the performance adjustment, any
dividends or capital gain distributions paid by a
fund are treated as if reinvested in fund shares
at the net asset value as of the record date for
payment. The records of the S&P 500 and Russell
2000 Index are based on change in value and
adjusted for any cash distributions from the
companies whose securities compose the S&P 500 and
Russell 2000 Index.
Because the adjustment to the basic fee is based
on a fund's performance compared to the investment
record of the S&P 500 (Growth Company) and the
Russell 2000 Index (Emerging Growth), the
controlling factor is not whether a fund's
performance is up or down per se, but whether it
is up or down more or less than the record of the
comparative index. Moreover, the comparative
investment performance of a fund is based solely
on the relevant performance period without regard
to cumulative performance over a longer or shorter
period of time.
During the fiscal years ended November 30,
199 4 , 199 3 , and 199 2 , FMR
received $_______, $15,813,347, and
$10,669,694, respectively, for its services as
investment adviser to Growth Company. These fees,
which include both the basic fee and the
performance adjustment, were equivalent to __%,
.75%, and .74%, respectively, of the
average net assets of the fund for each of those
years. For fiscal 199 4 , 199 3 , and
199 2 , the upward performance adjustments
amounted to $_______, $2,491,678, and
$1,531,464, respectively.
During the fiscal periods ended November 30,
199 4 , 199 3 , and 199 2 , FMR
received $_______, $4,987,102, and
$4,153,291, respectively, for its services as
investment adviser to Emerging Growth. These fees,
which include both the basic fee and the
performance adjustment, were equivalent to __%,
.80%, and .70%, respectively, of the
average net assets of the fund for each of those
years. For fiscal 1994, 1993 , and
1992 the upward performance adjustments amounted
to $_______, $772,145 , and $62,250,
respectively.
To comply with the California Code of Regulations,
FMR will reimburse a 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 a 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-ADVISERS. FMR has entered into sub-advisory
agreements with FMR U.K., and FMR Far East.
Pursuant to the sub-advisory agreements, FMR may
receive investment advice and research services
outside the United States from the sub-advisers.
FMR may also grant the sub-advisers investment
management authority as well as the authority to
buy and sell securities if FMR believes it would
be beneficial to the funds.
Currently, FMR U.K. and FMR Far East each focus
on issuers in countries other than the United
States such as those in Europe, Asia, and the
Pacific Basin.
FMR U.K. and FMR Far East are wholly owned
subsidiaries of FMR. Under the sub-advisory
agreements FMR pays the fees of FMR U.K. and FMR
Far East. For providing non-discretionary
investment advice and research services, FMR pays
FMR U.K. and FMR Far East fees equal to 110% and
105%, respectively, of FMR U.K.'s and FMR Far
East's costs incurred in connection with providing
investment advice and research services.
For providing discretionary investment
management and executing portfolio transactions,
FMR pays FMR U.K. and FMR Far East a fee equal to
50% of its monthly management fee (including any
performance adjustment) with respect to the fund's
average net assets managed by the sub-adviser on a
discretionary basis.
For providing investment advice and research
services, the fees paid to the sub-advisers for
fiscal 1994, 1993, and 1992 were as follows:
FIDELITY GROWTH COMPANY FUND
Fiscal year FMR U.K. FMR Far East
1994 $ $
1993 $27,818 $42,906
1992 $4,855 $4,095
FIDELITY EMERGING GROWTH FUND
Fiscal year FMR U.K. FMR Far East
1994 $ $
1993 $15,199 $23,550
1992 $80 $72
CONTRACTS WITH COMPANIES AFFILIATED WITH FMR
FSC is transfer, dividend disbursing, and
shareholders' servicing agent for the funds. Under
the trust's contract with FSC, each fund pays an
annual fee of $2 6 . 03 per basic
retail account with a balance of $5,000 or more,
$15. 31 per basic retail account with a
balance of less than $5,000 and a supplemental
activity charge of $2.25 for standing order
transactions and $ 6 . 1 1 for
monetary transactions. These fees and charges are
subject to annual cost escalation based on
postal rate changes and changes in
wage and price levels as measured by the National
Consumer Price Index for Urban Areas. With respect
to certain institutional client master accounts,
each fund pays FSC a per account fee of $95, and
monetary transaction charges of $20 and $17.50
depending on the nature of services provided. With
respect to certain broker-dealer master accounts,
each fund pays FSC a per-account fee of $30, and a
charge of $6 for monetary transactions. Fees for
certain institutional retirement plan accounts are
based on the net assets of all such accounts in
each fund.
Under the contract, FSC pays out-of-pocket
expenses associated with providing transfer agent
services. In addition, FSC bears the expense of
typesetting, printing, and mailing prospectuses,
statements of additional information, and all
other reports, notices, and statements to
shareholders, with the exception of proxy
statements.
The table below shows the transfer agent fees,
including reimbursement for out-of-pocket
expenses, paid to FSC during each fund's last
three fiscal periods ended November 30,
199 4 , 199 3 , and 199 2 .
TRANSFER AGENT FEES
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1994 1993 1992
Growth Company $5,688,147 $3,954,383
Emerging Growth 41,803,916 $1,784,333
</TABLE>
If a portion of each fund's brokerage
commissions had not resulted in payment of certain
of these fees during fiscal 1994, Growth Company
and Emerging Growth would have paid transfer agent
fees of $___ and $___, respectively.
The trust's contract with FSC also provides that
FSC will perform the calculations necessary to
determine each fund's net asset value per share
and dividends, and maintain the funds' accounting
records. The fee rates for pricing and
bookkeeping services are based on each fund's
average net assets, specifically, .06% for the
first $500 million of average net assets and .03%
for average net assets in excess of $500 million.
The fee is limited to a minimum of $45,000 and a
maximum of $750,000 per year.
The table below shows the fees paid to FSC for
pricing and bookkeeping services, including
related out-of-pocket expenses during each fund's
last three fiscal periods.
PRICING AND BOOKKEEPING FEES
1994 1993 1992
Growth Company $742,497 $587,818
Emerging Growth $338,364 $330,616
FSC also receives fees for administering each
fund's securities lending program. Securities
lending fees are based on the number and duration
of individual securities loans. For fiscal
199 4 , 199 3 , and 199 2 , the
funds did not incur any securities lending fees.
Each fund has a distribution agreement with FDC, a
Massachusetts corporation organized on July 18,
1960. FDC is a broker-dealer registered under the
Securities Exchange Act of 1934 and is a member of
the National Association of Securities Dealers,
Inc. The distribution agreement calls for FDC to
use all reasonable efforts, consistent with its
other business, to secure purchasers for shares of
each fund, which are continuously offered.
Promotional and administrative expenses in
connection with the offer and sale of shares are
paid by FDC. The table below shows the sales
charge revenue paid to FDC for the following
fiscal periods:
SALES CHARGE REVENUE
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1994 1993 1992
Growth Company $2,165,700 $4,945,552
Emerging Growth $774,435 $2,800,508
</TABLE>
DESCRIPTION OF THE TRUST
TRUST ORGANIZATION. Fidelity Growth Company Fund
and Fidelity Emerging Growth Fund are funds of
Fidelity Mt. Vernon Street Trust (the trust), an
open-end management investment company organized
as a Massachusetts business trust on October 12,
1982 under the name Fidelity Emerging Growth Fund.
The Declaration of Trust was amended on December
17, 1982 to change the trust's name to Fidelity
Growth Stock Fund. The Declaration of Trust was
amended on January 17, 1983, to change the trust's
name from Fidelity Growth Stock Fund to Fidelity
Mercury Fund and on August 1, 1986, was further
amended to change the trust's name to Fidelity
Growth Company Fund. The Declaration of Trust was
amended on January 30, 1991, to change the trust's
name to Fidelity Mt. Vernon Street Trust.
Currently, there are three funds of the trust:
Fidelity Growth Company Fund, Fidelity Emerging
Growth Fund, and Fidelity New Millennium Fund. The
Declaration of Trust permits the Trustees to
create additional funds.
In the event that FMR ceases to be the investment
adviser to the trust or a fund, the right of the
trust or fund to use the identifying name
"Fidelity" may be withdrawn. There is a remote
possibility that one fund might become liable for
any misstatement in its prospectus or statement of
additional information about another fund.
The assets of the trust received for the issue or
sale of shares of each fund and all income,
earnings, profits, and proceeds thereof, subject
only to the rights of creditors, are especially
allocated to such fund, and constitute the
underlying assets of such fund. The underlying
assets of each fund are segregated on the books of
account, and are to be charged with the
liabilities with respect to such fund and with a
share of the general expenses of the trust.
Expenses with respect to the trust are to be
allocated in proportion to the asset value of the
respective funds, except where allocations of
direct expense can otherwise be fairly made. The
officers of the trust, subject to the general
supervision of the Board of Trustees, have the
power to determine which expenses are allocable to
a given fund, or which are general or allocable to
all of the funds. In the event of the dissolution
or liquidation of the trust, shareholders of each
fund are entitled to receive as a class the
underlying assets of such fund available for
distribution.
SHAREHOLDER AND TRUSTEE LIABILITY. The trust is an
entity of the type commonly known as a
"Massachusetts business trust." Under
Massachusetts law, shareholders of such a trust
may, under certain circumstances, be held
personally liable for the obligations of the
trust. The Declaration of Trust provides that the
trust shall not have any claim against
shareholders except for the payment of the
purchase price of shares and requires that each
agreement, obligation, or instrument entered into
or executed by the trust or the Trustees shall
include a provision limiting the obligations
created thereby to the trust and its assets. The
Declaration of Trust provides for indemnification
out of each fund's property of any shareholder
held personally liable for the obligations of the
fund. The Declaration of Trust also provides that
each fund shall, upon request, assume the defense
of any claim made against any shareholder for any
act or obligation of the fund and satisfy any
judgment thereon. Thus, the risk of a shareholder
incurring financial loss on account of shareholder
liability is limited to circumstances in which the
fund itself would be unable to meet its
obligations. FMR believes that, in view of the
above, the risk of personal liability to
shareholders is remote.
The Declaration of Trust further provides that the
Trustees, if they have exercised reasonable care,
will not be liable for any neglect or wrongdoing,
but nothing in the Declaration of Trust protects
Trustee s against any liability to which
t he y would otherwise be subject by
reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties
involved in the conduct of their office.
VOTING RIGHTS. Each fund's capital consists of
shares of beneficial interest. As a
shareholder, you receive one vote for each dollar
value of net asset value you own. The shares
have no preemptive or conversion rights; the
voting and dividend rights, the right of
redemption, and the privilege of exchange are
described in the Prospectus. Shares are fully paid
and nonassessable, except as set forth under the
heading "Shareholder and Trustee Liability" above.
Shareholders representing 10% or more of the trust
or a fund may, as set forth in the Declaration of
Trust, call meetings of the trust or a fund for
any purpose related to the trust or fund, as the
case may be, including, in the case of a meeting
of the entire trust, the purpose of voting on
removal of one or more Trustees. The trust or any
fund may be terminated upon the sale of its assets
to another open-end management investment company,
or upon liquidation and distribution of its
assets, if approved by vote of the holders of a
majority of the trust or the fund , as
determined by the current value of each
shareholder's investment in the fund or trust .
If not so terminated, the trust and its funds will
continue indefinitely. The trust may invest all
of its assets in another investment company.
CUSTODIAN. Brown Brothers Harriman & Co., 40 Water
Street, Boston, Massachusetts, is custodian of the
assets of the funds. The custodian is responsible
for the safekeeping of the funds' assets and the
appointment of subcustodian banks and clearing
agencies. The custodian takes no part in
determining the investment policies of the funds
or in deciding which securities are purchased or
sold by a fund. Each fund may, however, invest in
obligations of the custodian and may purchase
securities from or sell securities to the
custodian.
FMR, its officers and directors, its affiliated
companies and the trust's Trustees may from time
to time have transactions with various banks,
including banks serving as custodians for certain
of the funds advised by FMR. The Boston branch of
the funds' custodian leases its office space from
an affiliate of FMR at a lease payment which, when
entered into, was consistent with prevailing
market rates. Transactions that have occurred to
date include mortgages and personal and general
business loans. In the judgment of FMR, the terms
and conditions of those transactions were not
influenced by existing or potential custodial or
other fund relationships.
AUDITOR. Coopers & Lybrand L.L.P. , One Post
Office Square, Boston, Massachusetts serves as the
trust's independent accountant. The auditor
examines financial statements for the funds and
provides other audit, tax, and related services.
FINANCIAL STATEMENTS
Each fund's financial statements and financial
highlights for the fiscal year ended November
30, 199 4 are included in the Annual Report
which is a separate report supplied with this
Statement of Additional Information . The fund's
financial statements and financial highlights
are incorporated herein by reference.
PART C - OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Not applicable.
(b) Exhibits:
(1) (a) Declaration of Trust of Registrant,
dated October 12, 1982, is incorporated herein by
reference to Exhibit 1 to Registration Statement
No. 2-79755.
(b) Supplement to Declaration of Trust, dated
December 17, 1982, is incorporated herein by
reference to Exhibit 1(b)1 to Pre-Effective
Amendment No. 2.
(c) Supplement to Declaration of Trust, dated
January 28, 1983, is incorporated herein by
reference to Exhibit 1(c)1 to Post-Effective
Amendment No. 1.
(d) Amended and Restated Declaration of Trust of
Fidelity Growth Company Fund, dated August 20,
1986, is incorporated herein by reference to
Exhibit 1(d) to Post-Effective Amendment No. 8.
(e) Supplement to the Declaration of Trust,
dated December 1, 1989, is incorporated herein by
reference to Exhibit 1(e) to Post-Effective
Amendment No. 13.
(f) Supplement to Declaration of Trust, dated
December 13, 1991, is incorporated herein by
reference to Exhibit 1(f) to Post-Effective
Amendment No. 17.
(g) Amended and Restated Supplement to
Declaration of Trust, dated January 30, 1991, is
incorporated herein by reference to Exhibit 1(g)
to Post-Effective Amendment No. 21.
(2) (a) By-laws of the Trust, as amended, are
incorporated herein by reference to Exhibit 2(a)
to Fidelity Union Street Trust's Post-Effective
Amendment No. 87.
(3) Not applicable.
(4) Not applicable.
(5) (a) Management Contract, dated January 31,
1990, between Fidelity Growth Company Fund and
Fidelity Management & Research Company is
incorporated herein by reference to Exhibit 5(b)
to Post-Effective Amendment No. 14.
(b) Management Contract, dated April 1, 1992,
between Fidelity Mt. Vernon Street Trust, on
behalf of Fidelity Emerging Growth Fund, and
Fidelity Management & Research Company is
incorporated herein by reference to Exhibit 5(b)
to Post-Effective Amendment No. 24.
(c) Management Contract, dated September 17,
1992, between Fidelity Mt. Vernon Street Trust, on
behalf of Fidelity New Millennium Fund, and
Fidelity Management & Research Company is
incorporated herein by reference to Exhibit 5(c)
to Post-Effective Amendment No. 25.
(d) Sub-Advisory Agreement, dated December 1,
1989, for Fidelity Growth Company Fund between
Fidelity Management & Research (U.K.) Inc. and
Fidelity Management & Research Company is
incorporated herein by reference to Exhibit 5(c)
to Post-Effective Amendment No. 14.
(e) Sub-Advisory Agreement, dated December 1,
1989, for Fidelity Growth Company Fund between
Fidelity Management & Research (Far East) Inc. and
Fidelity Management & Research Company is
incorporated herein by reference to Exhibit 5(d)
to Post-Effective Amendment No. 14.
(f) Sub-Advisory Agreement, dated January 1,
1992, for Fidelity Emerging Growth Fund between
Fidelity Management & Research (U.K.) Inc. and
Fidelity Management & Research Company is
incorporated herein by reference to Exhibit 5(e)
to Post-Effective Amendment No. 19.
(g) Sub-Advisory Agreement, dated January 1,
1992, for Fidelity Emerging Growth Fund between
Fidelity Management & Research (Far East) Inc. and
Fidelity Management & Research Company is
incorporated herein by reference to Exhibit 5(f)
to Post-Effective Amendment No. 19.
(h) Sub-Advisory Agreement, dated September 17,
1992, for Fidelity New Millennium Fund between
Fidelity Management & Research (U.K.) Inc. and
Fidelity Management & Research Company is
incorporated herein by reference to Exhibit 5(h)
to Post-Effective Amendment No. 25.
(i) Sub-Advisory Agreement, dated September 17,
1992, for Fidelity New Millennium Fund between
Fidelity Management & Research (Far East) Inc. and
Fidelity Management & Research Company is
incorporated herein by reference to Exhibit 5(i)
to Post-Effective Amendment No. 25.
(6) (a) General Distribution Agreement, dated
April 1, 1987, between Fidelity Growth Company
Fund and Fidelity Distributors Corporation is
incorporated herein by reference to Exhibit 6 to
Post-Effective Amendment No. 9.
(b) Amendment to General Distribution Agreement,
dated January 1, 1988, between Fidelity Growth
Company Fund and Fidelity Distributors Corporation
is incorporated herein by reference to Exhibit
6(b) to Post-Effective Amendment No. 12.
(c) Form of General Distribution Agreement
between Fidelity Emerging Growth Fund and Fidelity
Distributors Corporation was filed as Exhibit 6(c)
to Post-Effective Amendment No. 15.
(d) General Distribution Agreement, dated
September 17, 1992, between Fidelity New
Millennium Fund and Fidelity Distributors
Corporation is incorporated herein by reference to
Exhibit 6(d) to Post Effective Amendment No. 28.
(7) Retirement Plan for Non-Interested Person
Trustees, Directors or General Partners, effective
November 1, 1989, is incorporated herein by
reference to Exhibit 7 to Fidelity Union Street
Trust's Post-Effective Amendment No. 87.
(8) (a) Custodian Agreement, dated July 18, 1991,
between Registrant and Brown Brothers Harriman &
Co. is incorporated herein by reference to Exhibit
8(b) to Post-Effective Amendment No. 22.
(b) Custodian Agreement, dated September 17,
1992, between Registrant and Chase Manhattan Bank,
N.A. is incorporated herein by reference to
Exhibit 8(b) to Post-Effective Amendment No. 24.
(9) Not applicable.
(10) Not applicable.
(11) Not applicable.
(12) Not applicable.
(13) Not applicable.
(14) (a) Fidelity Individual Retirement Account
Custodial Agreement and Disclosure Statement, as
currently in effect, is incorporated herein by
reference to Exhibit 14(a) to Fidelity Union
Street Trust's Post-Effective Amendment No. 87.
(b) Fidelity 403(b)(7) Custodial Account
Agreement, as currently in effect, is incorporated
herein by reference to Exhibit 14(e) to Fidelity
Union Street Trust's Post-Effective Amendment No.
87.
(c) Fidelity Defined Contribution Retirement
Plan and Trust Agreement, as currently in effect,
is incorporated herein by reference to Exhibit
14(c) to Post-Effective Amendment No. 16.
(d) Fidelity Defined Benefit Pension Plan and
Trust, as currently in effect, is incorporated
herein by reference to Exhibit 14(d) to
Post-Effective Amendment No. 16.
(e) Fidelity 401(a) Prototype Plan for
Tax-Exempt Employers, as currently in effect, is
incorporated herein by reference to Exhibit 14(e)
to Post-Effective Amendment No. 16.
(f) Fidelity Master Plan for Savings and
Investments, as currently in effect, is
incorporated herein by reference to Exhibit 14(f)
to Post-Effective Amendment No. 19.
(g) Fidelity Group Individual Retirement Account
Custodial Agreement and Disclosure Statement, as
currently in effect, is incorporated herein by
reference to Exhibit 14(g) to Post-Effective
Amendment No. 16.
(h) Fidelity Institutional Individual Retirement
Account Custodial Agreement and Disclosure
Statement, as currently in effect, is incorporated
herein by reference to Exhibit 14(d) to Fidelity
Union Street Trust's Post-Effective Amendment No.
87.
(i) National Financial Services Corporation
Individual Retirement Account Custodial Agreement
and Disclosure Statement, as currently in effect,
is incorporated herein by reference to Exhibit
14(h) to Fidelity Union Street Trust's
Post-Effective Amendment No. 87.
(j) Fidelity Portfolio Advisory Services
Individual Retirement Account Custodial Agreement
and Disclosure Statement, as currently in effect,
is incorporated herein by reference to Exhibit
14(i) to Fidelity Union Street Trust's
Post-Effective Amendment No. 87.
(k) Fidelity Investments Section 403(b)(7)
Individual Custodial Account Agreement and
Disclosure Statement, as currently in effect, is
incorporated herein by reference to Exhibit 14(j)
to Fidelity Union Street Trust's Post-Effective
Amendment No. 87.
(l) National Financial Services Corporation
Defined Contribution Retirement Plan and Trust
Agreement, as currently in effect, is incorporated
herein by reference to Exhibit 14(k) to Fidelity
Union Street Trust's Post-Effective Amendment No.
87.
(m) The CORPORATEplan for Retirement Profit
Sharing/401K Plan, as currently in effect, is
incorporated herein by reference to Exhibit 14(l)
to Fidelity Union Street Trust's Post-Effective
Amendment No. 87.
(n) The CORPORATEplan for Retirement Money
Purchase Pension Plan, as currently in effect, is
incorporated herein by reference to Exhibit 14(m)
to Fidelity Union Street Trust's Post-Effective
Amendment No. 87.
(15) Not applicable.
(16) (a) A schedule for computation of
performance quotations is incorporated herein by
reference to Exhibit 16 to Post-Effective
Amendment No. 12.
(b) A schedule for the computation of moving
averages is incorporated herein by reference to
Exhibit 16(b) to Post-Effective Amendment No. 28.
(17) Not applicable.
Item 25. Persons Controlled by or Under Common
Control With Registrant
The Board of Directors of Fidelity Mt. Vernon
Street Trust is the same as the boards of other
funds advised by FMR, each of which has Fidelity
Management & Research Company as its investment
adviser. In addition, the officers of these funds
are substantially identical. Nonetheless, the
Registrant takes the position that it is not under
common control with these other funds since the
power residing in the respective boards and
officers arises as the result of an official
position with the respective funds.
Item 26. Number of Holders of Securities
September 30, 1994
Title of Class: Shares of Beneficial Interest
Name of Series Number of Record Holders
Fidelity Growth Company Fund 443,896
Fidelity Emerging Growth Fund 71,007
Fidelity New Millennium Fund 38,034
Item 27. Indemnification
Article XI, Section 2 of the Declaration of Trust
sets forth the reasonable and fair means for
determining whether indemnification shall be
provided to any past or present Trustee or
officer. It states that the Registrant shall
indemnify any present or past Trustee, or officer
to the fullest extent permitted by law against
liability and all expenses reasonably incurred by
him in connection with any claim, action suit or
proceeding in which he is involved by virtue of
his service as a trustee, an officer, or both.
Additionally, amounts paid or incurred in
settlement of such matters are covered by this
indemnification. Indemnification will not be
provided in certain circumstances, however. These
include instances of willful misfeasance, bad
faith, gross negligence, and reckless disregard of
the duties involved in the conduct of the
particular office involved.
Item 28. Business and Other Connections of
Investment Adviser
(1) FIDELITY MANAGEMENT & RESEARCH COMPANY
FMR serves as investment adviser to a number of
other investment companies. The directors and
officers of the Adviser have held, during the past
two fiscal years, the following positions of a
substantial nature.
<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman of the Executive Committee of FMR; President
and Chief Executive Officer of FMR Corp.; Chairman of
the Board and a Director of FMR, FMR Corp., FMR Texas
Inc., Fidelity Management & Research (U.K.) Inc., and
Fidelity Management & Research (Far East) Inc.; President
and Trustee of funds advised by FMR.
J. Gary Burkhead President of FMR; Managing Director of FMR Corp.;
President and a Director of FMR Texas Inc., Fidelity
Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.; Senior Vice
President and Trustee of funds advised by FMR.
Peter S. Lynch Vice Chairman of FMR (1992).
Robert Beckwitt Vice President of FMR and of funds advised by FMR.
David Breazzano Vice President of FMR (1993) and of a fund advised by
FMR.
Stephan Campbell Vice President of FMR (1993).
Dwight Churchill Vice President of FMR (1993).
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 and of a fund advised by FMR.
Larry Domash Vice President of FMR (1993).
George Domolky Vice President of FMR (1993) and of a fund advised by
FMR.
Robert K. Duby Vice President of FMR.
Margaret L. Eagle Vice President of FMR and of a fund advised by FMR.
Kathryn L. Eklund Vice President of FMR.
Richard B. Fentin Senior Vice President of FMR (1993) and of a fund advised
by FMR.
Daniel R. Frank Vice President of FMR and of funds advised by FMR.
Gary L. French Vice President of FMR and Treasurer of the funds advised
by FMR.
Michael S. Gray Vice President of FMR and of funds advised by FMR.
Lawrence Greenberg Vice President of FMR (1993).
Barry A. Greenfield Vice President of FMR and of a fund advised by FMR.
William J. Hayes Senior Vice President of FMR; Equity Division Leader.
Robert Haber Vice President of FMR and of funds advised by FMR.
Richard Haberman Senior Vice President of FMR (1993).
Daniel Harmetz Vice President of FMR and of a fund advised by FMR.
Ellen S. Heller Vice President of FMR.
</TABLE>
John Hickling Vice President of FMR (1993) and of funds advised by
FMR.
<TABLE>
<CAPTION>
<S> <C>
Robert F. Hill Vice President of FMR; and Director of Technical
Research.
Stephen 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 and of funds advised by FMR.
Malcolm 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 and of funds advised by FMR.
Andrew Offit Vice President of FMR (1993).
Judy Pagliuca Vice President of FMR (1993).
Jacques Perold Vice President of FMR.
Anne Punzak Vice President of FMR and of funds advised by FMR.
Lee Sandwen Vice President of FMR (1993).
Patricia A. Satterthwaite Vice President of FMR (1993) and of a fund.
Thomas T. Soviero Vice President of FMR (1993).
Richard A. Spillane Vice President of FMR and of funds advised by FMR; and
Director of Equity Research.
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 Leader.
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.
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) FIDELITY MANAGEMENT & RESEARCH (U.K.) INC.
(FMR U.K.)
FMR U.K. provides investment advisory services to
Fidelity Management & Research Company and
Fidelity Management Trust 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 U.K.; Chairman of the
Executive Committee of FMR; Chief Executive Officer of FMR
Corp.; Chairman of the Board and a Director of FMR, FMR
Corp., FMR Texas Inc., and Fidelity Management & Research
(Far East) Inc.; President and Trustee of funds advised by FMR.
J. Gary Burkhead President and Director of FMR U.K.; President of FMR;
Managing Director of FMR Corp.; President and a Director of
FMR Texas Inc. and Fidelity Management & Research (Far
East) Inc.; Senior Vice President and Trustee of funds advised
by FMR.
Richard C. Habermann Senior Vice President of FMR U.K.; Senior Vice President of
Fidelity Management & Research (Far East) Inc.; Director of
Worldwide Research of FMR.
Rick Spillane Senior Vice President and Director of Operations and
Compliance of FMR U.K. (1993).
Stephen Jonas Treasurer of FMR U.K. (1993), Fidelity Management &
Research (Far East) Inc. (1993), and FMR Texas Inc. (1993);
Treasurer and Vice President of FMR (1993).
David Weinstein Clerk of FMR U.K.; Clerk of Fidelity Management & Research
(Far East) Inc.; Secretary of FMR Texas Inc.
</TABLE>
(3) FIDELITY MANAGEMENT & RESEARCH (FAR EAST)
INC. (FMR Far East)
FMR Far East provides investment advisory
services to Fidelity Management & Research Company
and Fidelity Management Trust 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 Far East; Chairman of the
Executive Committee of FMR; Chief Executive Officer of
FMR Corp.; Chairman of the Board and a Director of
FMR, FMR Corp., FMR Texas Inc. and Fidelity
Management & Research (U.K.) Inc.; President and
Trustee of funds advised by FMR.
J. Gary Burkhead President and Director of FMR Far East; President of
FMR; Managing Director of FMR Corp.; President and a
Director of FMR Texas Inc. and Fidelity Management &
Research (U.K.) Inc.; Senior Vice President and Trustee
of funds advised by FMR.
Richard C. Habermann Senior Vice President of FMR Far East; Senior Vice
President of Fidelity Management & Research (U.K.)
Inc.; Director of Worldwide Research of FMR.
William R. Ebsworth Vice President of FMR Far East.
Bill Wilder Vice President of FMR Far East (1993).
Stephen Jonas Treasurer of FMR Far East (1993), Fidelity Management
& Research (U.K.) Inc. (1993), and FMR Texas Inc.
(1993); Treasurer and Vice President of FMR (1993).
David C. Weinstein Clerk of FMR Far East; Clerk of Fidelity Management &
Research (U.K.) Inc.; Secretary of FMR Texas 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.
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 funds' respective
custodians: The Chase Manhattan Bank, 1211 Avenue
of the Americas, New York, N.Y. and Brown Brothers
Harriman & Co., 40 Water Street, Boston, MA.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
The registrant undertakes for Fidelity New
Millennium Fund: 1) to call a meeting of
shareholders for the purpose of voting upon the
question of removal of a trustee or trustees, when
requested to do so by record holders of not less
than 10% of its outstanding shares; and 2) to
assist in communications with other shareholders
pursuant to Section 16(c)(1) and (2), whenever
shareholders meeting the qualifications set forth
in Section 16(c) seek the opportunity to
communicate with other shareholders with a view
toward requesting a meeting.
The Registrant on behalf of Fidelity Growth
Company Fund, Fidelity Emerging Growth Fund, and
Fidelity New Millennium Fund, provided the
information required by Item 5A is contained in
the annual report, undertakes to furnish to each
person to whom a prospectus has been delivered,
upon their request and without charge, a copy of
the Registrant's latest annual report to
shareholders.
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. 30 to the Registration Statement to
be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Boston,
and the Commonwealth of Massachusetts, on the 4th
day of November 1994.
[NAME OF TRUST]
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 November , 1994
Edward C. Johnson 3d (Principal Executive Officer)
</TABLE>
/s/Gary L. French Treasurer November , 1994
Gary L. French
/s/J. Gary Burkhead Trustee November , 1994
J. Gary Burkhead
/s/Ralph F. Cox * Trustee November , 1994
Ralph F. Cox
/s/Phyllis Burke Davis * Trustee November , 1994
Phyllis Burke Davis
/s/Richard J. Flynn * Trustee November , 1994
Richard J. Flynn
/s/E. Bradley Jones * Trustee November , 1994
E. Bradley Jones
/s/Donald J. Kirk * Trustee November , 1994
Donald J. Kirk
/s/Peter S. Lynch * Trustee November , 1994
Peter S. Lynch
/s/Edward H. Malone * Trustee November , 1994
Edward H. Malone
/s/Gerald C. McDonough* Trustee November , 1994
Gerald C. McDonough
/s/Thomas R. Williams * Trustee November , 1994
Thomas R. Williams
(dagger) Signatures affixed by J. Gary Burkhead
pursuant to a power of attorney dated October 20,
1993 and filed herewith.
* Signature affixed by Robert C. Hacker pursuant
to a power of attorney dated October 20, 1993 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>
Fidelity Advisor Series I Fidelity Institutional Trust
Fidelity Advisor Series II Fidelity Investment Trust
Fidelity Advisor Series III Fidelity Magellan Fund
Fidelity Advisor Series IV Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series V Fidelity Money Market Trust
Fidelity Advisor Series VI Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series VII Fidelity Municipal Trust
Fidelity Advisor Series VIII Fidelity New York Municipal Trust
Fidelity California Municipal Trust Fidelity Puritan Trust
Fidelity Capital Trust Fidelity School Street Trust
Fidelity Charles Street Trust Fidelity Securities Fund
Fidelity Commonwealth Trust Fidelity Select Portfolios
Fidelity Congress Street Fund Fidelity Sterling Performance Portfolio, L.P.
Fidelity Contrafund Fidelity Summer Street Trust
Fidelity Corporate Trust Fidelity Trend Fund
Fidelity Court Street Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Destiny Portfolios Fidelity U.S. Investments-Government Securities
Fidelity Deutsche Mark Performance Fund, L.P.
Portfolio, L.P. Fidelity Union Street Trust
Fidelity Devonshire Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Exchange Fund Spartan U.S. Treasury Money Market
Fidelity Financial Trust Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Fidelity Government Securities Fund Variable Insurance Products Fund II
Fidelity Hastings Street Trust
Fidelity Income Fund
</TABLE>
plus any other investment company for which
Fidelity Management & Research Company acts as
investment adviser and for which the undersigned
individuals serve as Board Members (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. Xupolos, each of them
singly, our true and lawful attorneys-in-fact,
with full power of substitution, and with full
power to each of them, to sign for us and in our
names in the appropriate capacities, all
Pre-Effective Amendments to any Registration
Statements of the Funds, any and all subsequent
Post-Effective Amendments to said Registration
Statements, any Registration Statements on Form
N-14, and any supplements or other instruments in
connection therewith, and generally to do all such
things in our names and behalf in connection
therewith as said attorneys-in-fact deem necessary
or appropriate, to comply with the provisions of
the Securities Act of 1933 and Investment Company
Act of 1940, and all related requirements of the
Securities and Exchange Commission, hereby
ratifying and confirming all that said
attorneys-in-fact or their substitutes may do or
cause to be done by virtue hereof.
WITNESS our hands on this twentieth day of
October, 1993.
/s/Edward C. Johnson 3d /s/Peter S. Lynch
Edward C. Johnson 3d Peter S. Lynch
/s/J. Gary Burkhead /s/Edward H. Malone
J. Gary Burkhead 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
/s/Donald J. Kirk
Donald J. Kirk
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>
Fidelity Advisor Series I Fidelity Institutional Trust
Fidelity Advisor Series II Fidelity Investment Trust
Fidelity Advisor Series III Fidelity Magellan Fund
Fidelity Advisor Series IV Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series V Fidelity Money Market Trust
Fidelity Advisor Series VI Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series VII Fidelity Municipal Trust
Fidelity Advisor Series VIII Fidelity New York Municipal Trust
Fidelity California Municipal Trust Fidelity Puritan Trust
Fidelity Capital Trust Fidelity School Street Trust
Fidelity Charles Street Trust Fidelity Securities Fund
Fidelity Commonwealth Trust Fidelity Select Portfolios
Fidelity Congress Street Fund Fidelity Sterling Performance Portfolio, L.P.
Fidelity Contrafund Fidelity Summer Street Trust
Fidelity Corporate Trust Fidelity Trend Fund
Fidelity Court Street Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Destiny Portfolios Fidelity U.S. Investments-Government Securities
Fidelity Deutsche Mark Performance Fund, L.P.
Portfolio, L.P. Fidelity Union Street Trust
Fidelity Devonshire Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Exchange Fund Spartan U.S. Treasury Money Market
Fidelity Financial Trust Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Fidelity Government Securities Fund Variable Insurance Products Fund II
Fidelity Hastings Street Trust
Fidelity Income Fund
</TABLE>
plus 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, all
Pre-Effective Amendments to any Registration
Statements of the Funds, any and all subsequent
Post-Effective Amendments to said Registration
Statements, any Registration Statements on Form
N-14, and any supplements or other instruments in
connection therewith, and generally to do all such
things in my name and behalf in connection
therewith as said attorney-in-fact 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 October 20, 1993
Edward C. Johnson 3d
POWER OF ATTORNEY
I, the undersigned Director, Trustee or General
Partner, as the case may be, of the following
investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Series I Fidelity Magellan Fund
Fidelity Advisor Series III Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series IV Fidelity Money Market Trust
Fidelity Advisor Series VI Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series VIII Fidelity New York Municipal Trust
Fidelity California Municipal Trust Fidelity Puritan Trust
Fidelity Capital Trust Fidelity School Street Trust
Fidelity Charles Street Trust Fidelity Select Portfolios
Fidelity Commonwealth Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Congress Street Fund Fidelity Summer Street Trust
Fidelity Contrafund Fidelity Trend Fund
Fidelity Deutsche Mark Performance Fidelity Union Street Trust
Portfolio, L.P. Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Devonshire Trust Fidelity U.S. Investments-Government Securities
Fidelity Financial Trust Fund, L.P.
Fidelity Fixed-Income Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Government Securities Fund Spartan U.S. Treasury Money Market
Fidelity Hastings Street Trust Fund
Fidelity Income Fund Variable Insurance Products Fund
Fidelity Institutional Trust Variable Insurance Products Fund II
Fidelity Investment Trust
</TABLE>
plus any other investment company for which
Fidelity Management & Research Company acts as
investment adviser and for which the undersigned
individual serves as a Board Member (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. Xupolos, each of them
singly, my true and lawful attorneys-in-fact, with
full power of substitution, and with full power to
each of them, to sign for me and in my name in the
appropriate capacity, all Pre-Effective Amendments
to any Registration Statements of the Funds, any
and all subsequent Post-Effective Amendments to
said Registration Statements, any Registration
Statements on Form N-14, and any supplements or
other instruments in connection therewith, and
generally to do all such things in my name and
behalf in connection therewith as said
attorneys-in-fact deem necessary or appropriate,
to comply with the provisions of the Securities
Act of 1933 and Investment Company Act of 1940,
and all related requirements of the Securities and
Exchange Commission, hereby ratifying and
confirming all that said attorneys-in-fact or
their substitutes may do or cause to be done by
virtue hereof.
WITNESS my hand on the date set forth below.
/s/Ralph F. Cox October 20, 1993
Ralph F. Cox
POWER OF ATTORNEY
I, the undersigned Director, Trustee or General
Partner, as the case may be, of the following
investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Series I Fidelity Investment Trust
Fidelity Advisor Series III Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series IV Fidelity School Street Trust
Fidelity Advisor Series VI Fidelity Select Portfolios
Fidelity Advisor Series VIII Fidelity Sterling Performance Portfolio, L.P.
Fidelity Beacon Street Trust Fidelity Trend Fund
Fidelity Capital Trust Fidelity Union Street Trust
Fidelity Commonwealth Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Contrafund Fidelity U.S. Investments-Government Securities
Fidelity Deutsche Mark Performance Fund, L.P.
Portfolio, L.P. Fidelity Yen Performance Portfolio, L.P.
Fidelity Devonshire Trust Spartan U.S. Treasury Money Market
Fidelity Financial Trust Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Fidelity Government Securities Fund Variable Insurance Products Fund II
Fidelity Hastings Street Trust
Fidelity Institutional Trust
</TABLE>
plus any other investment company for which
Fidelity Management & Research Company acts as
investment adviser and for which the undersigned
individual serves as a Board Member (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. Xupolos, each of them
singly, my true and lawful attorneys-in-fact, with
full power of substitution, and with full power to
each of them, to sign for me and in my name in the
appropriate capacity, all Pre-Effective Amendments
to any Registration Statements of the Funds, any
and all subsequent Post-Effective Amendments to
said Registration Statements, any Registration
Statements on Form N-14, and any supplements or
other instruments in connection therewith, and
generally to do all such things in my name and
behalf in connection therewith as said
attorneys-in-fact deem necessary or appropriate,
to comply with the provisions of the Securities
Act of 1933 and Investment Company Act of 1940,
and all related requirements of the Securities and
Exchange Commission, hereby ratifying and
confirming all that said attorneys-in-fact or
their substitutes may do or cause to be done by
virtue hereof.
WITNESS my hand on the date set forth below.
/s/Phyllis Burke Davis October 20, 1993
Phyllis Burke Davis
