FIDELITY
(REGISTERED TRADEMARK)
GROWTH COMPANY
FUND
ANNUAL REPORT
NOVEMBER 30, 1994
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over time.
FUND TALK 6 The manager's review of fund
performance, strategy and outlook.
INVESTMENT CHANGES 9 A summary of major shifts in the
fund's investments over the past six
months.
INVESTMENTS 10 A complete list of the fund's
investments with their market
values.
FINANCIAL STATEMENTS 26 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
NOTES 30 Notes to the financial statements.
REPORT OF INDEPENDENT 34 The auditors' opinion.
ACCOUNTANTS
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMA-
TION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED FOR
DISTRIBUTION TO
PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN
EFFECTIVE
PROSPECTUS. MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, THE FEDERAL
RESERVE
BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO IN-
VESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. NEITHER THE FUND
NOR FIDELITY
DISTRIBUTORS CORPORATION IS A BANK. FOR MORE INFORMATION ON ANY FIDELITY
FUND, INCLUDING
CHARGES AND EXPENSES, CALL 1-800-544-8888 FOR A FREE PROSPECTUS. READ IT
CAREFULLY BEFORE
YOU INVEST OR SEND MONEY.
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
The unsettling period that began for investors when the Federal Reserve
Board raised short-term interest rates in February has continued into the
fourth quarter of 1994. The Board raised the federal funds rate - the rate
banks charge each other for overnight loans - five times from February
through August, taking it from 3.00% to 4.75%. A sixth increase in November
lifted the rate to 5.50%. The Fed rate hikes were intended to forestall
inflation that could result from an improving U.S. economy, and they led to
below-average returns for many stocks and negative returns for many bond
investments.
The volatility we have witnessed this year follows a period in which there
was a nearly perfect investing environment. Although there was a
late-summer rally in stocks and, to a lesser extent in bond markets, it is
impossible to predict where interest rates might go or what might happen in
the markets in the months ahead. That's why it probably is a good time to
again review your investment portfolio and how well it matches your goals.
If you can leave your money invested over the long term, you can avoid much
of the volatility that generally accompanies the stock market in the short
term, as we have been witnessing this year. You also can help to manage
risk through diversification of investments. A stock fund is already
diversified because it invests in many issues. You can diversify even
further by placing some of your money in several different stock funds or
in other investment categories, such as bonds.
If you have a short investment time horizon, you might want to consider
moving some of your investment into a money market fund, which seeks income
and a stable share price by investing in high-quality, short-term
investments. As with any mutual fund, of course, there is no assurance that
a money market fund will achieve its goal, and it is important to remember
that money market funds are not insured by any agency of the U.S.
government.
Finally, no matter what your investment horizon or portfolio diversity, it
makes good sense to follow a regular investment plan - investing a certain
amount of money at the same time each month or quarter - and to review your
portfolio periodically, as we have discussed here. A periodic investment
plan will not, of course, assure a profit or protect against a loss.
If you have any questions, please call us at 1-800-544-8888. We stand ready
to provide the information you need to make the investments that are right
for you.
Best regards,
Edward C. Johnson 3d
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each
performance figure includes changes in a fund's share price, plus
reinvestment of any dividends (or income) and capital gains (the profits
the fund earns when it sells stocks that have grown in value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1994 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Growth Company 1.23% 91.26% 390.73%
Growth Company (incl. 3% sales charge) -1.80% 85.52% 376.01%
S&P 500(registered trademark) 1.05% 53.14% 287.95%
Average Growth Fund -0.36% 52.60% 242.52%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one, five, or ten years. For example, if
you invested $1,000 in a fund that had a 5% return over the past year, you
would end up with $1,050. You can compare the fund's returns to the
performance of the Standard & Poor's Composite Index of 500 stocks - a
common proxy for the U.S. stock market. You can also compare them to the
average growth fund, which currently reflects the performance of 468 growth
funds tracked by Lipper Analytical Services. Both benchmarks include
reinvested dividends and capital gains, if any, and exclude the effects of
sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1994 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Growth Company 1.23% 13.85% 17.24%
Growth Company (incl. 3% sales charge) -1.80% 13.16% 16.89%
S&P 500(registered trademark) 1.05% 8.90% 14.52%
Average Growth Fund -0.36% 8.53% 12.63%
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER 10 YEARS
Growth Company (02Standard & Poor
11/30/84 9700.00 10000.00
12/31/84 9904.64 10264.00
01/31/85 11321.20 11063.57
02/28/85 11732.88 11199.65
03/31/85 11411.77 11207.49
04/30/85 11304.73 11197.40
05/31/85 11922.25 11844.61
06/30/85 12078.69 12030.57
07/31/85 12440.97 12012.52
08/31/85 12506.84 11910.42
09/30/85 11757.58 11537.62
10/31/85 12243.36 12070.66
11/30/85 13264.33 12898.71
12/31/85 13857.15 13523.01
01/31/86 14353.71 13598.73
02/28/86 15563.70 14615.92
03/31/86 16330.34 15431.49
04/30/86 16653.63 15257.11
05/31/86 17401.79 16068.79
06/30/86 17494.16 16340.35
07/31/86 16053.25 15426.93
08/31/86 16616.68 16571.60
09/30/86 15111.11 15201.13
10/31/86 16237.98 16078.24
11/30/86 16025.54 16468.94
12/31/86 15663.03 16048.98
01/31/87 17652.02 18210.78
02/28/87 19261.83 18930.11
03/31/87 19060.60 19477.19
04/30/87 18356.31 19303.84
05/31/87 18289.24 19471.78
06/30/87 18591.08 20455.11
07/31/87 19451.88 21492.18
08/31/87 20715.13 22293.84
09/30/87 20245.60 21805.60
10/31/87 14857.21 17108.68
11/30/87 13303.30 15698.92
12/31/87 15397.32 16893.61
01/31/88 15456.45 17604.83
02/29/88 16402.52 18425.22
03/31/88 16591.74 17855.88
04/30/88 16402.52 18054.08
05/31/88 16319.74 18211.15
06/30/88 17703.37 19047.04
07/31/88 17336.77 18974.66
08/31/88 16627.22 18329.52
09/30/88 17561.46 19110.36
10/31/88 17372.25 19641.63
11/30/88 17135.73 19360.75
12/31/88 17870.70 19699.57
01/31/89 19121.65 21141.57
02/28/89 19087.88 20615.15
03/31/89 19743.16 21095.48
04/30/89 21090.11 22190.34
05/31/89 22740.43 23089.05
06/30/89 21915.27 22957.44
07/31/89 23383.57 25030.49
08/31/89 24342.21 25521.09
09/30/89 25033.89 25416.46
10/31/89 24779.06 24826.79
11/30/89 24888.27 25333.26
12/31/89 25312.29 25941.26
01/31/90 23385.78 24200.60
02/28/90 24415.93 24512.79
03/31/90 25727.03 25162.38
04/30/90 25352.43 24533.32
05/31/90 28014.77 26925.32
06/30/90 28335.85 26742.22
07/31/90 27452.87 26656.65
08/31/90 24603.23 24246.89
09/30/90 22422.52 23066.06
10/31/90 22529.55 22966.88
11/30/90 24937.69 24450.54
12/31/90 26222.04 25132.71
01/31/91 29178.70 26228.50
02/28/91 31065.09 28103.83
03/31/91 32750.79 28783.95
04/30/91 32456.46 28853.03
05/31/91 34182.30 30099.48
06/30/91 31881.18 28720.92
07/31/91 34409.73 30059.32
08/31/91 35894.76 30771.72
09/30/91 35680.70 30257.84
10/31/91 35600.43 30663.29
11/30/91 34275.95 29427.56
12/31/91 38895.23 32794.07
01/31/92 39332.90 32184.10
02/29/92 39667.09 32602.50
03/31/92 37618.35 31966.75
04/30/92 36891.85 32906.57
05/31/92 36848.26 33067.81
06/30/92 35540.55 32575.10
07/31/92 36804.67 33907.42
08/31/92 35802.09 33212.32
09/30/92 36368.77 33604.23
10/31/92 38330.32 33721.84
11/30/92 40873.09 34871.76
12/31/92 41984.61 35300.68
01/31/93 43004.27 35597.21
02/28/93 41802.52 36081.33
03/31/93 43293.30 36842.64
04/30/93 42821.72 35951.05
05/31/93 45225.22 36914.54
06/30/93 45392.55 37021.59
07/31/93 44662.37 36873.51
08/31/93 46487.81 38271.01
09/30/93 47796.04 37976.33
10/31/93 48450.16 38762.44
11/30/93 47020.23 38394.19
12/31/93 48781.71 38858.76
01/31/94 50364.08 40179.96
02/28/94 49555.29 39091.08
03/31/94 47246.87 37386.71
04/30/94 47802.91 37865.26
05/31/94 47533.31 38486.25
06/30/94 45342.84 37543.34
07/31/94 46387.53 38774.76
08/31/94 48746.50 40364.53
09/30/94 47769.21 39375.59
10/31/94 49319.39 40261.55
11/30/94 47617.56 38795.22
$10,000 OVER 10 YEARS: Let's say you invested $10,000 in Fidelity Growth
Company Fund on November 30, 1984, and paid a 3% sales charge. As the chart
shows, by November 30, 1994, the value of your investment would have grown
to $47,601 - a 376.01% increase on your initial investment. For comparison,
look at how the S&P 500 did over the same period. With dividends
reinvested, the same $10,000 investment would have grown to $38,795 - a
287.95% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
growth in the long run and
volatility in the short run. In
turn, the share price and
return of a fund that invests in
stocks will vary. That means if
you sell your shares during a
market downturn, you might
lose money. But if you can
ride out the market's ups and
downs, you may have a gain.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
Rising interest rates contributed
to below-average returns in the
U.S. stock market during the 12
months ended November 30,
1994. The Standard & Poor's 500
stock index finished the 12-month
period with a total return of 1.05%
- - below its historical annual
average return of more than 10%.
After two months of steady gains,
stocks stumbled from February
through June 1994. During that
time, the Federal Reserve Board
raised short-term interest rates
four times in an effort to curb
possible future inflation triggered
by a strengthening economy.
Higher rates hurt stocks because
they raise the cost of borrowing
for companies and consumers,
often dampening future corporate
profits. In addition, higher rates
often make bonds and other
fixed-income investments more
attractive relative to stocks.
Despite a fifth Fed rate hike in
August, the market rallied from
July through October, fueled by
strengthening corporate earnings
and a flurry of merger and
acquisition activity. Interest rate
concerns resurfaced in
November, when the Fed raised
rates again. Although returns in
overseas markets were mixed,
foreign stocks generally fared
better than those in the U.S. The
Morgan Stanley EAFE (Europe,
Australia, Far East) index
returned 14.84% for the 12
months ended November 30,
while the Morgan Stanley
Emerging Markets Free index
was up 17.44% during the same
period.
An interview with Robert Stansky, Portfolio Manager of Fidelity Growth
Company Fund
Q. BOB, HOW HAS THE FUND PERFORMED?
A. Not as well as I would have liked. With a volatile stock market and
rising interest rates as a backdrop, the fund was up 1.23% for the 12
months ended November 30, 1994. That's only slightly better than the
average growth fund, which was down 0.36% for the same time period,
according to Lipper Analytical Services.
Q. HOW DID RISING INTEREST RATES
INFLUENCE PERFORMANCE?
A. The fear in the market over the past six months was that, with rates
climbing, the investing environment wouldn't be very favorable for stocks
in general. Many growth stocks - those with accelerating earnings - don't
perform well in an increasing interest rate environment because investors
often take advantage of higher rates by investing in bonds. Though rising
interest rates haven't affected the balance sheets of most of the companies
whose stocks the fund owns, they have influenced the public's perception of
the overall market. However, what I'd really like to stress is that while
interest rates and the economy matter, a company's success in its own
product cycle and execution is what really drives its stock price.
Q. WHAT DO YOU MEAN BY "PRODUCT CYCLE" AND "EXECUTION?"
A. A company that's doing well in its product cycle is offering the right
products at the right time - products that customers want to buy. Execution
refers to distribution services provided by those companies that don't
manufacture the products that they sell, like a retailer, and offer the
right inventory to the public through an ever-increasing number of stores.
Q. CAN YOU GIVE EXAMPLES OF COMPANIES WITH GOOD PRODUCT CYCLE AND EXECUTION
IN WHICH YOU'VE INVESTED?
A. Motorola is a good example. The company has grown much faster than the
overall communications market because it has designed and delivered
products that the customer wants. It's the same with Oracle, which
manufactures database management software. By contrast, IBM has had
problems making the right products and having enough of them. Though the
situation has much improved, IBM has suffered from product cycle problems
in the past. Lowe's, a leader in the home improvement market which opened
stores at a rapid pace this year, is an example of a company with great
execution.
Q. WHY HAVE YOU CUT BACK YOUR HOLDINGS IN THE FINANCIAL SECTOR FROM 10.8%
TO 8.3% OF THE FUND IN THE PAST SIX MONTHS?
A. Rising rates affect financial companies first. The cost to borrow funds
increases as soon as rates go up - there's no lag time in financial stocks
like there is in some other sectors.
Q. THOUGH YOU LIKE THE COMPANY, YOU'VE REDUCED THE FUND'S POSITION IN
COMPAQ FROM 5.5% TO 1.9%, ALTHOUGH TECHNOLOGY AS A SECTOR OF THE FUND HAS
GROWN FROM 27.2% TO 32.6%. WHY?
A. Compaq did a great job of increasing its market share in personal
computers in the past year. However, profitability has been somewhat
disappointing. The purchase of PCs for the home is a large segment of
overall demand and I want to see if it keeps up after the holidays. Still,
at 2% of the fund, Compaq remains a large holding. Also, I took more
positions in smaller- to-medium-sized technology companies in order to
increase my exposure to the industry since I think the outlook is good.
Q. WHAT DISAPPOINTMENTS DID THE FUND EXPERIENCE THIS YEAR?
A. This year, disappointments came in two categories: the investments I
shouldn't have made that went down, and the investments I should have had
more of that went up. Overall, General Electric - the fund's largest
investment on November 30 - has been a disappointing stock during the past
six months. Operationally it did a great job, but the losses at a brokerage
firm that GE owned held back the company and put investors off. Though it's
still a large holding that is both increasing its dividend and buying back
stock, it hasn't done as well as I had hoped. Microsoft falls into the
latter category. It had better-than-expected earnings this year and was
placed in the S&P 500. There's no doubt that the fund should have owned
more Microsoft during the period.
Q. WHAT'S YOUR OUTLOOK FOR THE NEXT SIX MONTHS?
A. Well, I believe that stock prices follow earnings, period. I ask myself,
"Did the company earn what was expected?" Companies are in much better
shape cost-wise and product cycle-wise and demand is good. However, as
overall market growth slows, stocks that post superior earnings should
perform well in 1995. In general, I'm hopeful.
FUND FACTS
GOAL: to increase the value
of the fund's shares over the
long term by investing in
stocks with above average
growth potential
START DATE: January 17, 1983
SIZE: as of November 30,
1994, more than $2.9 billion
MANAGER: Robert Stansky,
since 1987; manager,
Fidelity Advisor Equity
Portfolio Growth, since 1987;
Fidelity Emerging Growth
Fund, December 1990-April
1991;
Fidelity Select Defense &
Aerospace Portfolio,
1984-1985; joined Fidelity in
1983
(checkmark)
BOB STANSKY ON
PRICE/EARNINGS RATIO:
"In a rising interest rate
environment, I think it's likely
that stocks with high
price/earnings ratios
(p/e)could contract or stay flat
- - the stock price falling while
the earnings remain steady.
Most aggressive stocks -
stocks that are growing very
quickly - often sell at 30 to
40 times earnings. If you look
at those stocks arithmetically,
they are the most attractive,
but in a rising rate market,
valuations are likely to come
down. I cut back on some of
the really high p/e stocks early
in the period and most of the
stocks I'm holding now don't
have huge price/earnings
ratios."
(solid bullet) The fund's cash position
has fallen from 10.1% to 3.7%
over the past six months.
(solid bullet) Though the fund is
authorized to invest in
derivative instruments such
as futures, options and
foreign currency forwards, it
did not have any significant
derivative holdings during the
period.
(solid bullet) The fund's holdings in
health care stocks increased
from 7.6% to 10.3% of the
fund over the past six months.
Pharmaceutical stocks
among the fund's top 10
investments on November 30
included Warner-Lambert and
Pfizer.
INVESTMENT CHANGES
TOP TEN STOCKS AS OF NOVEMBER 30, 1994
% OF FUND'S
% OF FUND'S INVESTMENTS
INVESTMENTS IN THESE STOCKS
6 MONTHS AGO
General Electric Co. 2.0 2.4
Compaq Computer Corp. 1.9 5.5
Lowe's Companies, Inc. 1.9 1.1
Oracle Systems Corp. 1.7 0.7
Motorola, Inc 1.7 0.6
Philip Morris Companies, Inc. 1.6 0.6
Warner-Lambert Co. 1.5 1.1
International Business Machines 1.4 1.2
Corp.
Sears, Roebuck & Co. 1.4 1.0
Pfizer, Inc. 1.4 1.0
TOP FIVE INDUSTRIES AS OF NOVEMBER 30, 1994
% OF FUND'S
% OF FUND'S INVESTMENTS
INVESTMENTS IN THESE INDUSTRIES
6 MONTHS AGO
Technology 32.6 27.2
Retail & Wholesale 13.4 11.3
Health 10.3 7.6
Finance 8.3 10.8
Utilities 5.9 6.6
ASSET ALLOCATION
AS OF NOVEMBER 30, 1994* AS OF MAY 31,1994**
Row: 1, Col: 1, Value: 3.7
Row: 1, Col: 2, Value: 1.0
Row: 1, Col: 3, Value: 50.0
Row: 1, Col: 4, Value: 45.0
Row: 1, Col: 1, Value: 10.1
Row: 1, Col: 2, Value: 1.0
Row: 1, Col: 3, Value: 40.0
Row: 1, Col: 4, Value: 49.0
Stocks 96.2%
Bonds 0.1%
Short-term
investments 3.7%
FOREIGN
INVESTMENTS 6.8%
Stocks 89.8%
Bonds 0.1%
Short-term
investments 10.1%
FOREIGN
INVESTMENTS 8.5%
*
**
INVESTMENTS NOVEMBER 30, 1994
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 95.4%
SHARES VALUE (NOTE 1)
(000S)
BASIC INDUSTRIES - 4.5%
CHEMICALS & PLASTICS - 1.2%
Airgas, Inc. (a) 209,300 $ 5,232
Dow Chemical Co. 216,800 13,875
Lubrizol Corp. 48,900 1,540
Praxair, Inc. 127,800 2,588
Sterling Chemical, Inc. (a) 29,600 318
Union Carbide Corp. 418,500 11,980
35,533
IRON & STEEL - 0.2%
Hylsamex SA de CV sponsored ADR (a)(b) 40,800 974
Nucor Corp 88,000 4,796
Schnitzer Steel, Inc. Class A 3,100 59
5,829
METALS & MINING - 0.8%
Aluminum Co. of America 264,500 21,590
ASARCO, Inc. 116,600 3,192
24,782
PACKAGING & CONTAINERS - 0.1%
U.S. Can Corp. (a) 91,500 1,647
PAPER & FOREST PRODUCTS - 2.2%
Champion International Corp. 310,900 10,804
Federal Paper Board Co., Inc. 17,700 480
Georgia-Pacific Corp. 212,800 15,215
International Paper Co. 172,900 12,362
Jefferson Smurfit Corp. (a) 12,000 192
Klabin Industria de Papel e Celulose PN 439,500 767
Louisiana-Pacific Corp. 200,700 5,620
Scott Paper Co. 145,800 9,514
Stone Container Corp. (a) 100,000 1,599
Temple-Inland, Inc. 69,000 3,096
Union Camp Corp. 88,900 4,105
63,754
TOTAL BASIC INDUSTRIES 131,545
CONGLOMERATES - 0.0%
Tyco Laboratories, Inc. 23,700 1,090
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
CONSTRUCTION & REAL ESTATE - 0.9%
BUILDING MATERIALS - 0.5%
Armstrong World Industries, Inc. 90,600 $ 3,624
Cemex SA, Series B 325,700 3,124
Golden Pharos BHD (a) 477,000 1,484
Hume Industries BHD 783,000 3,401
Tolmex SA Class B2 116,000 1,689
USG Corp. (a) 100,000 1,962
15,284
CONSTRUCTION - 0.4%
Centex Corp. 166,400 3,390
Ekran BHD:
Class A (a) 320,000 1,033
Ord. 320,000 1,114
Empresas Ica Sociedad Controladora SA de CV sponsored
ADR representing ORD Participation Certificate 23,000 710
Lennar Corp. 128,100 2,002
Pulte Corp. 86,700 1,745
9,994
REAL ESTATE INVESTMENT TRUSTS - 0.0%
Innkeepers USA Trust 69,200 510
TOTAL CONSTRUCTION & REAL ESTATE 25,788
DURABLES - 4.8%
AUTOS, TIRES, & ACCESSORIES - 3.0%
Autozone, Inc. (a) 554,500 14,209
Chrysler Corp. 614,200 29,712
Dana Corp. 105,700 2,286
Edelbrock Corp. (a) 6,900 97
Ford Motor Co. 1,084,800 29,425
Gentex Corp. (a) 53,100 1,148
Pep Boys-Manny, Moe & Jack 364,200 11,791
88,668
CONSUMER ELECTRONICS - 0.3%
Whirlpool Corp. 159,900 7,975
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
DURABLES - CONTINUED
HOME FURNISHINGS - 0.2%
Ethan Allen Interiors, Inc. (a) 95,900 $ 2,170
Rhodes, Inc. (a) 168,900 1,668
Strouds, Inc. (a) 232,100 3,713
7,551
TEXTILES & APPAREL - 1.3%
Cygne Designs, Inc. (a) 284,000 4,047
Mohawk Industries, Inc. (a) 214,500 3,647
NIKE, Inc. Class B 130,200 8,317
Nine West Group, Inc. (a) 154,300 3,819
Reebok International Ltd. 213,900 8,208
St. John Knits 30,400 923
Tommy Hilfiger (a) 220,300 9,445
38,406
TOTAL DURABLES 142,600
ENERGY - 3.1%
ENERGY SERVICES - 0.6%
Halliburton Co. 34,400 1,200
Schlumberger Ltd. 281,400 14,949
16,149
OIL & GAS - 2.5%
Amoco Corp. 196,200 11,919
Anadarko Petroleum Corp. 56,900 2,276
Anderson Exploration Ltd. (a) 380,000 3,728
Beau Canada Exploration 4,200 6
British Petroleum PLC ADR 248,044 19,689
Burlington Resources, Inc. 44,400 1,587
Canadian Natural Resources Ltd. (a) 366,200 4,258
Encal Energy Ltd. (a) 965,100 2,104
Enron Oil & Gas Co. 170,600 3,092
Petroleum Geo-Services AS (ADR) (a) 145,500 3,238
Rio Alto Exploration Ltd. (a) 706,100 3,207
Summit Resources Ltd. 469,200 3,069
Unocal Corp. 628,053 16,722
74,895
TOTAL ENERGY 91,044
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - 8.3%
BANKS - 3.2%
Bank of Boston Corp. 380,551 $ 10,178
Banacci SA de CV Class C 288,500 2,029
Bank of New York Co., Inc. 814,200 22,696
BankAmerica Corp. 107,900 4,424
Chemical Banking Corp. 441,900 16,074
Citicorp 313,260 13,039
First Chicago Corp. 107,500 4,999
Grupo Financiero Bancomer SA de CV
sponsored ADR, Series C (b) 252,500 5,934
HSBC Holdings PLC 19,953 221
NationsBank Corp. 205,359 9,215
Republic New York Corp. 2,000 86
Shawmut National Corp. 183,290 3,253
Signet Banking Corp. 82,177 2,455
State Street Boston Corp. 29,000 914
95,517
CREDIT & OTHER FINANCE - 2.2%
American Express Co. 768,816 22,776
Beneficial Corp. 179,700 6,559
Dean Witter Discover & Co. 353,925 12,387
Green Tree Acceptance, Inc. 297,100 8,208
Grupo Financiero Inbursa Class B (a) 174,100 683
Household International, Inc. 259,468 9,990
United Merchant Group BHD 1,478,000 2,921
63,524
FEDERAL SPONSORED CREDIT - 2.0%
Federal Home Loan Mortgage Corporation 582,600 29,057
Federal National Mortgage Association 442,100 31,445
60,502
INSURANCE - 0.4%
Allstate Corp. 118,300 2,795
Travelers, Inc. (The) 258,900 8,511
11,306
SECURITIES INDUSTRY - 0.5%
Merrill Lynch & Co., Inc. 325,700 12,376
Schwab (Charles) Corp. 59,000 1,881
14,257
TOTAL FINANCE 245,106
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
HEALTH - 9.9%
DRUGS & PHARMACEUTICALS - 6.5%
ALZA Corp. Class A 342,000 $ 6,583
Amgen, Inc. (a) 460,300 26,870
Biogen, Inc. (a) 32,100 1,244
Bristol-Myers Squibb Co. 294,800 17,025
Cell Genesys, Inc. (a) 70,200 632
Cellpro, Inc. (a) 102,300 1,893
Cephalon, Inc. (a) 3,800 32
COR Therapeutics, Inc. (a) 130,400 1,744
Creative Biomolecules, Inc. (a) 51,800 117
Dura Pharmaceuticals, Inc. (a) 146,100 1,899
Elan Corp. PLC:
therapeutic systems unit (1 common & 1 ADR warrant) (a) 39,956 1,029
ADR (a) 559,550 19,724
Pfizer, Inc. 540,300 41,806
Rhone Poulenc Rorer, Inc. 106,400 4,150
Schering-Plough Corp. 316,300 23,683
Warner-Lambert Co. 580,800 44,939
193,370
MEDICAL EQUIPMENT & SUPPLIES - 2.5%
Beckman Instruments, Inc. 11,600 332
Becton, Dickinson & Co. 219,100 10,352
Boston Scientific Corp. (a) 263,200 4,211
Cardinal Health, Inc. 88,400 4,022
Johnson & Johnson 769,600 41,077
Medisense, Inc. (a) 22,400 552
Medtronic, Inc. 156,200 8,279
Pall Corp. 14,600 259
St. Jude Medical, Inc. 114,400 4,562
73,646
MEDICAL FACILITIES MANAGEMENT - 0.9%
Columbia/HCA Healthcare Corp. 164,900 6,246
HealthTrust, Inc. - The Hospital Co. (a) 137,100 4,421
Humana, Inc. (a) 51,200 1,146
Lincare Holdings, Inc. (a) 59,500 1,621
U.S. Healthcare, Inc. 302,950 13,557
26,991
TOTAL HEALTH 294,007
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
HOLDING COMPANIES - 0.4%
Granite Industries BHD (a) 790,000 $ 1,855
Grupo Carso SA de CV Class A-1 (a) 893,800 10,052
Grupo Sidek SA de CV Class B Ord. (a) 155,500 664
12,571
INDUSTRIAL MACHINERY & EQUIPMENT - 3.6%
ELECTRICAL EQUIPMENT - 2.3%
American Power Conversion Corp. (a) 105,600 1,703
General Electric Co. 1,268,300 58,342
Ortel Corp. (a) 4,900 127
Scientific-Atlanta, Inc. 223,800 4,420
Sensormatic Electronics Corp. 110,300 3,557
Star Paging International Holdings Ltd. (warrants) (a) 1,356,800 61
68,210
INDUSTRIAL MACHINERY & EQUIPMENT - 0.9%
Case Corp. 200,600 3,937
Caterpillar, Inc. 318,900 17,220
PRI Automation, Inc. (a) 127,700 2,139
Ultratech Stepper, Inc. 94,100 3,670
Veeco Instruments, Inc. (a) 48,800 537
27,503
POLLUTION CONTROL - 0.4%
Browning-Ferris Industries, Inc. 114,400 3,089
WMX Technologies, Inc. 338,200 8,708
11,797
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 107,510
MEDIA & LEISURE - 3.0%
BROADCASTING - 1.4%
Comcast Corp. Class A (Special) 158,200 2,511
Emmis Broadcasting Corp. Class A (a) 21,300 312
Infinity Broadcasting Corp. (a) 114,400 3,432
Tele-Communications, Inc. Class A (a) 417,600 9,866
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
MEDIA & LEISURE - CONTINUED
BROADCASTING - CONTINUED
Time Warner, Inc. 452 $ 15
Viacom, Inc. (a) 190,304 7,588
Viacom, Inc. (a):
(rights) 593,800 891
(non-vtg.) 448,430 17,265
41,880
ENTERTAINMENT - 0.4%
Disney (Walt) Co. 256,900 11,207
LEISURE DURABLES & TOYS - 0.2%
Cobra Golf, Inc. (a) 129,500 4,662
LODGING & GAMING - 0.2%
Mandarin Oriental International Ltd. Ord. 792,000 824
Mirage Resorts, Inc. (a) 308,500 6,093
6,917
PUBLISHING - 0.1%
McGraw-Hill, Inc. 31,200 2,118
Meredith Corp. 2,900 140
Scripps (E.W.) Co. Class A 17,500 527
2,785
RESTAURANTS - 0.7%
Apple South, Inc. 83,400 1,063
Applebee's International, Inc. 6,200 93
Brinker International, Inc. (a) 109,700 1,865
Outback Steakhouse, Inc. (a) 172,500 4,442
Sbarro, Inc. 34,700 776
Starbucks Corp. (a) 395,300 10,599
18,838
TOTAL MEDIA & LEISURE 86,289
NONDURABLES - 3.0%
BEVERAGES - 0.3%
PepsiCo, Inc. 218,400 7,726
FOODS - 0.0%
Gruma SA Class B (a) 104,400 692
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
NONDURABLES - CONTINUED
HOUSEHOLD PRODUCTS - 0.9%
Colgate-Palmolive Co. 53,400 $ 3,204
Gillette Co. 86,000 6,321
Procter & Gamble Co. 295,500 18,469
27,994
TOBACCO - 1.8%
American Brands, Inc. 81,900 2,897
Philip Morris Companies, Inc. 797,800 47,669
RJR Nabisco Holdings Corp. (a) 481,200 3,007
53,573
TOTAL NONDURABLES 89,985
RETAIL & WHOLESALE - 12.9%
APPAREL STORES - 1.4%
AnnTaylor Stores Corp. (a) 75,400 2,828
Baby Superstore, Inc. (a) 3,500 141
Charming Shoppes, Inc. 588,500 3,972
Filene's Basement Corp. (a) 96,900 594
Gap, Inc. 306,700 10,811
Gymboree Corp. (a) 62,500 1,906
Limited, Inc. (The) 448,000 8,680
Sportmart, Inc. Class A (non-vtg) (a) 63,900 743
TJX Companies, Inc. 514,014 7,774
Talbots, Inc. 116,300 3,736
41,185
APPLIANCE STORES - 0.0%
Elektra (Grupo) SA US CPO (a) 62,700 683
DRUG STORES - 0.3%
General Nutrition Companies, Inc. (a) 160,000 4,680
Revco (D.S.), Inc. (a) 123,600 2,781
7,461
GENERAL MERCHANDISE STORES - 3.9%
Dayton Hudson Corp. 295,300 24,104
Federated Department Stores, Inc. (a) 187,700 3,848
Nordstrom, Inc. 53,400 2,577
Penney (J.C.) Co., Inc. 350,900 16,141
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
RETAIL & WHOLESALE - CONTINUED
GENERAL MERCHANDISE STORES - CONTINUED
Price/Costco, Inc. 605,800 $ 9,314
Sears, Roebuck & Co 897,900 42,426
Wal-Mart Stores, Inc. 724,200 16,747
115,157
GROCERY STORES - 0.3%
Fleming Companies, Inc. 27,107 624
Giant Food, Inc. Class A 49,000 1,096
Kroger Co. (The) (a) 48,300 1,165
Safeway, Inc. (a) 115,000 3,508
Stop & Shop Companies, Inc. (a) 153,700 3,631
10,024
RETAIL & WHOLESALE, MISCELLANEOUS - 7.0%
Barnes & Noble, Inc. (a) 154,100 4,218
Bed Bath & Beyond, Inc. (a) 311,400 9,031
Best Buy Co., Inc. (a) 298,400 13,167
Circuit City Stores, Inc. 143,500 3,534
Corporate Express (a) 63,600 1,352
Home Depot, Inc. (The) 808,200 37,379
Lillian Vernon Corp. 47,000 776
Lowe's Companies, Inc. 1,488,200 55,621
Micro Warehouse, Inc. (a) 278,800 9,078
Officemax, Inc. (a) 420,800 10,362
Office Depot, Inc. (a) 725,825 17,238
Spiegel, Inc. Class A 24,100 322
Sports Authority, Inc. (a) 7,200 164
Staples, Inc. (a) 925,800 20,136
Sunglass Hut International, Inc. (a) 241,200 5,216
Toys "R" Us, Inc. (a) 349,700 12,808
Viking Office Products, Inc. (a) 17,400 500
Waban, Inc. (a) 344,500 5,857
Williams-Sonoma, Inc. (a) 38,700 1,173
207,932
TOTAL RETAIL & WHOLESALE 382,442
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
SERVICES - 0.8%
LEASING & RENTAL - 0.2%
Hollywood Entertainment Corp. (a) 163,950 $ 5,451
Movie Gallery, Inc. (a) 17,600 460
5,911
PRINTING - 0.3%
Alco Standard Corp. 141,300 7,913
Reynolds & Reynolds Co. Class A 45,400 1,044
8,957
SERVICES - 0.3%
Careerstaff Unlimited, Inc. (a) 7,600 95
Norrell Corp. 20,800 411
Western Atlas, Inc. 202,900 8,852
9,358
TOTAL SERVICES 24,226
TECHNOLOGY - 32.6%
COMMUNICATIONS EQUIPMENT - 6.4%
Cabletron Systems, Inc. (a) 815,950 38,758
Centigram Communications Corp. (a) 257,200 5,144
Cisco Systems, Inc. (a) 666,300 21,488
DSC Communications Corp. (a) 1,224,700 38,272
Ericsson (L.M.) Telefon AB Class B ADR 39,200 2,176
General Instrument Corp. (a) 143,600 4,308
Global Village Communication (a) 194,500 1,580
ITI Technologies 4,700 81
InterVoice, Inc. (a) 151,100 1,945
Newbridge Networks Corp. (a) 661,700 22,250
Nokia Corp. sponsored ADR (a)(c) 440,600 30,787
Pairgain Technologies, Inc. (a) 53,300 760
PictureTel Corp. (a) 55,700 1,246
Shiva Corp. 2,700 84
3Com Corp. (a) 392,700 17,082
S. Megga International Holdings Ltd. 11,740,000 1,639
187,600
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
COMPUTER SERVICES & SOFTWARE - 6.5%
Adobe Systems, Inc. 433,500 $ 14,305
Ascend Communications, Inc. (a) 191,400 6,125
Aspen Technology, Inc. (a) 4,400 74
CUC International, Inc. (a) 345,400 10,621
Cadence Design Systems, Inc. (a) 58,100 1,198
Chipcom Corp. (a) 151,800 6,262
Computer Associates International, Inc. 357,200 16,253
CompUSA, Inc. (a) 276,400 3,801
EIS International, Inc. (a) 151,200 2,022
Equifax Inc. 102,700 2,645
Informix Corp. (a) 117,800 3,387
Intelligent Electronics, Inc. 156,900 2,020
Lotus Development Corp. (a) 117,300 5,249
Mercury Interactive Group Corp. (a) 133,600 1,570
Microsoft Corp. (a) 430,600 27,074
Network Peripherals, Inc. (a) 116,100 2,961
Novell, Inc. (a) 463,100 9,204
Oracle Systems Corp. (a) 1,221,800 50,399
Parametric Technology Corp. (a) 489,600 17,014
Platinum Technology, Inc. (a) 80,000 1,560
Spectrum Holobyte, Inc. (a) 50,300 666
Sybase, Inc. (a) 130,900 6,349
Synopsys, Inc. (a) 59,100 2,434
193,193
COMPUTERS & OFFICE EQUIPMENT - 9.3%
Adaptec, Inc. (a) 352,800 7,762
Bay Networks, Inc. (a) 566,400 14,585
Compaq Computer Corp. (a) 1,469,000 57,475
Danka Business Systems PLC sponsored ADR 114,600 2,306
Data General Corp. (a) 28,500 306
Digital Equipment Corp. (a) 427,700 14,542
EMC Corp. (a) 1,827,900 41,128
Hewlett-Packard Co. 185,800 18,208
International Business Machines Corp. 604,300 42,754
Read Rite Corp. (a) 4,700 77
Seagate Technology (a) 595,000 14,206
Silicon Graphics, Inc. (a) 711,900 21,891
Stratus Computer, Inc. (a) 412,000 15,398
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
COMPUTERS & OFFICE EQUIPMENT - CONTINUED
Sun Microsystems, Inc. (a) 624,100 $ 20,907
TSL Holding, Inc. (a) 1,682 -
Tech Data Corp. (a) 276,600 4,702
276,247
ELECTRONIC INSTRUMENTS - 1.8%
Applied Materials, Inc. (a) 774,400 37,074
Credence Systems Corp. (a) 158,000 4,157
Electro Scientific Industries, Inc. (a) 27,800 539
Megatest Corp. (a) 69,500 695
Novellus System, Inc. (a) 206,800 10,779
53,244
ELECTRONICS - 8.6%
Actel Corp. (a) 83,400 688
Advanced Micro Devices, Inc. (a) 366,200 9,247
Alliance Semiconductor Corp. (a) 60,900 1,994
Altera Corp. (a) 231,500 8,913
Analog Devices, Inc. (a) 324,700 10,756
Cascade Communications Corp. (a) 7,000 382
Integrated Device Technology, Inc. (a) 116,100 3,019
Intel Corp. 454,500 28,690
LSI Logic Corp. (a) 33,500 1,432
Linear Technology Corp. 416,900 20,115
Maxim Integrated Products, Inc. (a) 185,600 11,461
Microchip Technology, Inc. (a) 23,100 687
Micron Technology, Inc. 750,450 31,144
Motorola, Inc. 874,000 49,272
National Semiconductor Corp. (a) 721,300 13,254
Quality Semiconductor, Inc. 11,900 146
Tencor Instruments (a) 347,200 15,407
Texas Instruments, Inc. 437,400 33,024
Xilinx, Inc. (a) 267,700 15,660
255,291
TOTAL TECHNOLOGY 965,575
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TRANSPORTATION - 1.7%
AIR TRANSPORTATION - 0.6%
AMR Corp. (a) 29,300 $ 1,487
Atlantic Southeast Airlines, Inc. 148,200 2,260
Delta Air Lines, Inc. 98,500 4,937
KLM Royal Dutch Airlines (a) 75,900 1,869
Malaysian Helicopter Services BHD 651,600 1,288
Technology Resources Industries BHD (a) 1,776,000 6,046
17,887
RAILROADS - 1.0%
CSX Corp. 361,500 25,124
Conrail, Inc. 95,800 4,982
Illinois Central Corp., Series A 19,200 581
30,687
SHIPPING - 0.1%
Transportacion Maritima Mexicana SA de CV
sponsored ADR Class A 170,300 1,086
TRUCKING & FREIGHT - 0.0%
Knights Transportation, Inc. (a) 5,000 69
MTL, Inc. (a) 18,900 234
US Xpress Enterprises, Inc. (a) 10,100 117
420
TOTAL TRANSPORTATION 50,080
UTILITIES - 5.9%
CELLULAR - 1.5%
Airtouch Communications (a) 774,665 21,013
Arch Communications Group, Inc. (a) 79,300 1,566
IDB Communications Group, Inc. 231,620 1,911
LIN Broadcasting Corp. (a) 40,400 5,797
Paging Network, Inc. (a) 150,850 4,752
Rogers Cantel Mobile Communications, Inc.
Class B (non-vtg.) (a) 143,200 4,241
United States Cellular Corp. (a) 113,200 3,537
Vanguard Cellular Systems, Inc. Class A (a) 85,700 2,271
45,088
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
UTILITIES - CONTINUED
ELECTRIC UTILITY - 0.3%
Huaneng Power International, Inc.
Class N sponsored ADR (a) 534,300 $ 9,217
TELEPHONE SERVICES - 4.1%
ALC Communications Corp. (a) 444,600 15,116
Ameritech Corp. 508,000 20,066
AT & T Corp. 181,200 8,901
BellSouth Corp. 184,400 9,566
Indosat (Indonesia Satellite) sponsored ADR 55,000 2,090
LCI International, Inc. (a) 318,200 7,080
NYNEX Corp. 171,500 6,453
Pakistan Telecommunications Voucher GDR (a)(b) 24,000 3,792
Southwestern Bell Corp. 569,700 23,571
Sprint Corp. 216,700 6,474
Telefonica Argentina Class B 376,700 2,131
Telefonos de Mexico SA sponsored ADR representing
shares Ord. Class L 121,000 6,413
Telephone & Data Systems, Inc. 196,372 8,518
120,171
TOTAL UTILITIES 174,476
TOTAL COMMON STOCKS
(Cost $2,687,564) 2,824,334
PREFERRED STOCKS - 0.8%
CONVERTIBLE PREFERRED STOCKS - 0.7%
BASIC INDUSTRIES - 0.3%
IRON & STEEL - 0.3%
AK Steel Holding Corp. $.5375 275,000 8,009
HEALTH - 0.4%
MEDICAL EQUIPMENT & SUPPLIES - 0.4%
U.S. Surgical Corp. $2.20 (b) 442,800 11,513
TOTAL CONVERTIBLE PREFERRED STOCKS 19,522
PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
NONCONVERTIBLE PREFERRED STOCKS - 0.1%
DURABLES - 0.0%
AUTOS, TIRES, & ACCESSORIES - 0.0%
Porsche AG Ord. 850 $ 362
Porsche AG (RFD) 1,925 816
TOTAL DURABLES 1,178
RETAIL & WHOLESALE - 0.1%
RETAIL & WHOLESALE, MISCELLANEOUS - 0.1%
Hornbach AG 3,700 3,348
TECHNOLOGY - 0.0%
COMPUTER SERVICES & SOFTWARE - 0.0%
Sap AG 2,100 1,125
TOTAL NONCONVERTIBLE PREFERRED STOCKS 5,651
TOTAL PREFERRED STOCKS
(Cost $22,882) 25,173
CONVERTIBLE BONDS - 0.1%
MOODY'S RATINGS PRINCIPAL
(UNAUDITED) AMOUNT (000S)
CONSTRUCTION & REAL ESTATE - 0.1%
BUILDING MATERIALS - 0.1%
Cemex SA 4 1/4%, 11/1/97 (b)
(Cost $1,900) Ba3 $ 1,900 1,966
REPURCHASE AGREEMENTS - 3.7%
MATURITY VALUE (NOTE 1)
AMOUNT (000S)
(000S)
Investments in repurchase agreements
(U.S. Treasury obligations), in a
joint trading account at 5.71%
dated 11/30/94 due 12/1/94 $ 110,528 $ 110,510
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $2,822,856) $ 2,961,983
LEGEND
1. Non-income producing
2. Security exempt from registration under
Rule 144A of the Securities Act of 1933. These securities may be resold in
transactions exempt from registration, normally to qualified institutional
buyers. At the period end, the value of these securities amounted to
$24,179,000 or 0.8% of net assets.
3. Affiliated company (see Note 5 of Notes to Financial Statements).
INCOME TAX INFORMATION
At November 30, 1994, the aggregate cost of investment securities for
income tax purposes was $2,849,178,000. Net unrealized appreciation
aggregated $112,805,000, of which $254,150,000 related to appreciated
investment securities and $141,345,000 related to depreciated investment
securities.
The fund hereby designates $21,618,000 as a capital gain dividend for the
purpose of the dividend paid deduction.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNTS) NOVEMBER 30, 1994
ASSETS
Investment in securities, at value (including repurchase $ 2,961,983
agreements of $110,510) (cost $2,822,856) - See
accompanying schedule
Receivable for investments sold 111,089
Receivable for fund shares sold 13,519
Dividends receivable 4,151
Interest receivable 12
Other receivables 436
TOTAL ASSETS 3,091,190
LIABILITIES
Payable for investments purchased $ 86,563
Payable for fund shares redeemed 22,329
Accrued management fee 1,833
Other payables and accrued expenses 1,148
TOTAL LIABILITIES 111,873
NET ASSETS $ 2,979,317
Net Assets consist of:
Paid in capital $ 2,782,257
Undistributed net investment income 17,316
Accumulated undistributed net realized gain (loss) on 40,617
investments and foreign currency transactions
Net unrealized appreciation (depreciation) on 139,127
investments and assets and liabilities in foreign
currencies
NET ASSETS, for 105,446 shares outstanding $ 2,979,317
NET ASSET VALUE and redemption price per share $28.25
($2,979,317 (divided by) 105,446 shares)
Maximum offering price per share (100/97.00 of $28.25) $29.12
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED NOVEMBER 30, 1994
INVESTMENT INCOME $ 31,098
Dividends
Interest 15,263
TOTAL INCOME 46,361
EXPENSES
Management fee $ 17,094
Basic fee
Performance adjustment 3,049
Transfer agent fees 7,170
Accounting fees and expenses 758
Non-interested trustees' compensation 16
Custodian fees and expenses 353
Registration fees 349
Audit 100
Legal 24
Interest 2
Reports to shareholders 292
Miscellaneous 25
Total expenses before reductions 29,232
Expense reductions (408) 28,824
NET INVESTMENT INCOME 17,537
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities (including realized gain (loss) of 55,560
$1,223 on sales of investments in affiliated issues)
Foreign currency transactions (130) 55,430
Change in net unrealized appreciation (depreciation) on (47,724)
investment securities
NET GAIN (LOSS) 7,706
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 25,243
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30,
1994 1993
INCREASE (DECREASE) IN NET ASSETS
Operations $ 17,537 $ 9,111
Net investment income
Net realized gain (loss) 55,430 282,249
Change in net unrealized appreciation (depreciation) (47,724) (9,035)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 25,243 282,325
FROM OPERATIONS
Distributions to shareholders (5,510) (4,372)
From net investment income
From net realized gain (236,445) (75,586)
TOTAL DISTRIBUTIONS (241,955) (79,958)
Share transactions 1,618,220 1,746,684
Net proceeds from sales of shares
Reinvestment of distributions 238,806 78,432
Cost of shares redeemed (1,084,391) (1,356,342)
Net increase (decrease) in net assets resulting from 772,635 468,774
share transactions
TOTAL INCREASE (DECREASE) IN NET ASSETS 555,923 671,141
NET ASSETS
Beginning of period 2,423,394 1,752,253
End of period (including undistributed net investment $ 2,979,317 $ 2,423,394
income of $17,316 and $23,329, respectively)
OTHER INFORMATION
Shares
Sold 55,243 59,883
Issued in reinvestment of distributions 8,371 2,871
Redeemed (36,571) (46,641)
Net increase (decrease) 27,043 16,113
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED NOVEMBER 30,
1994 1993 1992 B 1991 1990
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 30.91 $ 28.13 $ 25.62 $ 18.64 $ 20.51
period
Income from Investment
Operations
Net investment income .12 .07 .13 C .19 .29
Net realized and unrealized .28 3.99 4.52 6.79 (.32)
gain (loss)
Total from investment .40 4.06 4.65 6.98 (.03)
operations
Less Distributions (.07) (.07) (.10) - (.14)
From net investment income
From net realized gain (2.99) (1.21) (2.04) - (1.70)
Total distributions (3.06) (1.28) (2.14) - (1.84)
Net asset value, end of period $ 28.25 $ 30.91 $ 28.13 $ 25.62 $ 18.64
TOTAL RETURN A 1.23% 15.04% 19.25% 37.45% .20%
RATIOS AND SUPPLEMENTAL
DATA
Net assets, end of period $ 2,979 $ 2,423 $ 1,752 $ 1,133 $ 535
(in millions)
Ratio of expenses to average 1.05% 1.07% 1.09% 1.07% 1.14%
net assets
Ratio of expenses to average 1.06% 1.08% 1.09% 1.07% 1.14%
net assets before expense
reductions
Ratio of net investment income .64% .43% .52% .75% 1.51%
to average net assets
Portfolio turnover rate 135% 159% 250% 174% 189%
</TABLE>
A TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND WOULD HAVE
BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
B AS OF DECEMBER 1, 1991 THE FUND DISCONTINUED THE USE OF EQUALIZATION
ACCOUNTING.
C NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1994
1. SIGNIFICANT ACCOUNTING
POLICIES.
Fidelity Growth Company Fund (the fund) is a fund of Fidelity Mt. Vernon
Street Trust (the trust) and is authorized to issue an unlimited number of
shares. The trust is registered under the Investment Company Act of 1940,
as amended (the 1940 Act), as an open-end management investment company
organized as a Massachusetts business trust. The following summarizes the
significant accounting policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are readily
available are valued at the last sale price, or if no sale price, at the
closing bid price. Securities for which exchange quotations are not readily
available (and in certain cases debt securities which trade on an
exchange), are valued primarily using dealer-supplied valuations or at
their fair value as determined in good faith under consistently applied
procedures under the general supervision of the Board of Trustees.
Short-term securities maturing within sixty days of their purchase date are
valued at amortized cost or original cost plus accrued interest, both of
which approximate current value.
FOREIGN CURRENCY TRANSLATION.
The accounting records of the fund are maintained in U.S. dollars.
Investment securities and other assets and liabilities denominated in a
foreign currency are translated into U.S. dollars at the prevailing rates
of exchange at period end. Purchases and sales of securities, income
receipts, and expense payments are translated into U.S. dollars at the
prevailing exchange rate on the respective dates of the transactions.
Effective December 1, 1993, the fund adopted Statement of Position (SOP)
93-4: Foreign Currency Accounting and Financial Statement Presentation for
Investment Companies. In accordance with this SOP, reported net realized
gains and losses on foreign currency transactions represent net gains and
losses from sales and maturities of forward currency contracts, disposition
of foreign currencies, currency gains and losses realized between the trade
and settlement dates on securities transactions, and the difference between
the amount of net investment income accrued and the U.S. dollar amount
actually received. Further as permitted under the SOP, the effects of
changes in foreign currency exchange rates on investments in securities are
not segregated in the Statement of Operations from the effects of changes
in market prices of those securities, but are included with the net
realized and unrealized gain or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes all of its taxable income for its fiscal
year. The schedule of investments includes information regarding income
taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date,
except certain dividends from foreign
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
INVESTMENT INCOME - CONTINUED
securities where the ex-dividend date may have passed, are recorded as soon
as the fund is informed of the ex-dividend date. Interest income is accrued
as earned. Investment income is recorded net of foreign taxes withheld
where recovery of such taxes is uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS.
Distributions are recorded on the ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
foreign currency transactions and losses deferred due to wash sales. The
fund also utilized earnings and profits distributed to shareholders on
redemption of shares as a part of the dividends paid deduction for income
tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect net investment income per share. Accumulated undistributed net
investment income may include temporary book and tax basis differences
which will reverse in a subsequent period. Any taxable income or gain
remaining at fiscal year end is distributed in the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
CHANGE IN ACCOUNTING FOR
DISTRIBUTIONS TO SHAREHOLDERS. Effective December 1, 1993, the fund adopted
Statement of Position 93-2: Determination, Disclosure, and Financial
Statement Presentation of Income, Capital Gain, and Return of Capital
Distributions by Investment Companies. As a result, the fund changed the
classification of distributions to shareholders to better disclose the
differences between financial statement amounts and distributions
determined in accordance with income tax regulations. Accordingly, amounts
as of the beginning of the fiscal year have been reclassified to reflect an
increase in paid in capital of $150,882,000, a decrease in undistributed
net investment income of $14,229,000 and a decrease in accumulated net
realized gain on investments of $136,653,000.
2. OPERATING POLICIES.
FORWARD FOREIGN CURRENCY CONTRACTS. The fund may enter into forward foreign
currency contracts. The U.S. dollar value of forward foreign currency
contracts is determined using forward currency exchange rates supplied by a
quotation service. Losses may arise due to changes in the value of the
foreign currency or if the counterparty does not perform under the
contract.
2. OPERATING POLICIES -
CONTINUED
FORWARD FOREIGN CURRENCY CONTRACTS - CONTINUED
Purchases and sales of forward foreign currency contracts having the same
settlement date and broker are offset and any realized gain (loss) is
recognized on the date of offset, otherwise gain (loss) is recognized on
settlement date.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying securities, whose market value is required to be at least
102% of the resale price at the time of purchase. The fund's investment
adviser, Fidelity Management & Research Company (FMR), is responsible for
determining that the value of these underlying securities remains at least
equal to the resale price.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with other
affiliated entities of FMR, may transfer uninvested cash balances into one
or more joint trading accounts. These balances are invested in one or more
repurchase agreements that mature in 60 days or less from the date of
purchase, and are collateralized by U.S. Treasury or Federal Agency
obligations.
3. PURCHASES AND SALES
OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $3,951,201,000 and $3,259,243,000.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly
basic fee that is calculated on the basis of a group fee rate plus a fixed
individual fund fee rate applied to the average net assets of the fund. The
group fee rate is the weighted average of a series of rates and is based on
the monthly average net assets of all the mutual funds advised by FMR. The
rates ranged from .2850% to .5200% for the period December 1, 1993 to July
31, 1994 and .2700% to .5200% for the period August 1, 1994 to November 30,
1994. In the event that these rates were lower than the contractual rates
in effect during those periods, FMR voluntarily implemented the above
rates, as they resulted in the same or a lower management fee.
The annual individual fund fee rate is .30%. The basic fee is subject to a
performance adjustment (up to a maximum of (plus/minus) .20%) based on the
fund's investment performance as compared to the appropriate index over a
specified period of time. For the period, the management fee was equivalent
to an annual rate of .73% of average net assets after the performance
adjustment.
SALES LOAD. For the period, Fidelity Distributors Corporation (FDC), an
affiliate of FMR and the general distributor of the fund, received sales
charges of $1,087,000 on sales of shares of the fund.
Effective January 1, 1995 FDC voluntarily waived the sales charge (3% of
the offering price) on the sales of shares through December 31, 1996.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
TRANSFER AGENT FEES. Fidelity Service Co. (FSC), an affiliate of FMR, is
the fund's transfer, dividend disbursing and shareholder servicing agent.
FSC receives fees based on the type, size, number of accounts and the
number of transactions made by shareholders. FSC pays for typesetting,
printing and mailing of all shareholder reports, except proxy statements.
ACCOUNTING FEES. FSC maintains the fund's accounting records. The fee is
based on the level of average net assets for the month plus out-of-pocket
expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $1,648,000 for the period.
5. TRANSACTIONS WITH
AFFILIATED COMPANIES.
An affiliated company is a company in which the fund has ownership of at
least 5% of the voting securities. Transactions with companies which are or
were affiliates are as follows:
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES
AMOUNTS IN THOUSANDS
PURCHASE SALES DIVIDEND MARKET
AFFILIATE COST COST INCOME VALUE
Back Bay Restaurant Group, Inc. (a) $ - $ 116 $ - $ -
Nokia Corp. sponsored ADR (a) 13,634 3,066 - 30,787
(a) non-income producing $ 13,634 $ 3,182 $ - $ 30,787
6. BANK BORROWINGS.
The fund is permitted to have bank borrowings for temporary or emergency
purposes to fund shareholder redemptions. The fund has established
borrowing arrangements with certain banks. Under the most restrictive
arrangement, the fund must pledge to the bank securities having a market
value in excess of 220% of the total bank borrowings. The interest rate on
the borrowings is the bank's base rate, as revised from time to time. The
maximum loan and the average daily loan balances during the periods for
which loans were outstanding amounted to $18,274,000. The weighted average
interest rate was 3.88%.
7. EXPENSE REDUCTIONS.
FMR has directed certain portfolio trades to brokers who paid a portion of
the fund's expenses. For the period, the fund's expenses were reduced by
$408,000 under this arrangement.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Mt. Vernon Street Trust and the Shareholders of
Fidelity Growth Company Fund:
We have audited the accompanying statement of assets and liabilities of
Fidelity Mt. Vernon Street Trust: Fidelity Growth Company Fund, including
the schedule of portfolio investments, as of November 30, 1994, and the
related statement of operations for the year then ended, the statement of
changes in net assets for each of the two years in the period then ended
and the financial highlights for each of the five years in the period then
ended. These financial statements and financial highlights are the
responsibility of the fund's management. Our responsibility is to express
an opinion on these financial statements and financial highlights based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of November 30, 1994 by correspondence with the
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Mt. Vernon Street Trust: Fidelity Growth Company Fund as of
November 30, 1994, the results of its operations for the year then ended,
the changes in its net assets for each of the two years in the period then
ended, and the financial highlights for each of the five years in the
period then ended, in conformity with generally accepted accounting
principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
January 5, 1995
DISTRIBUTIONS
The Board of Trustees of Fidelity Growth Company Fund voted to pay on
December 19, 1994, to shareholders of record at the opening of business on
December 16, 1994, a distribution of $.81 derived from capital gains
realized from sales of portfolio securities and a dividend of $.22 from net
investment income.
11% of the dividends distributed during the fiscal year qualifies for the
dividends-received deductions for corporate shareholders.
The fund will notify shareholders in January 1995 of the applicable
percentage for use in preparing 1994 income tax returns.
TO VISIT FIDELITY
For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
851 East Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19100 Von Karman Avenue
Irvine, CA
10100 Santa Monica Blvd.
Los Angeles, CA
811 Wilshire Boulevard
Los Angeles, CA
251 University Avenue
Palo Alto, CA
1760 Challenge Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
455 Market Street
San Francisco, CA
1400 Civic Drive
Walnut Creek, CA
COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
185 Asylum Street
Hartford, CT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
90 Alhambra Plaza
Coral Gables, FL
4090 N. Ocean Boulevard
Ft. Lauderdale, FL
4001 Tamiami Trail, North
Naples, FL
1907 West State Road 434
Orlando, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road
Sarasota, FL
2000 66th Street, North
St. Petersburg, FL
GEORGIA
3525 Piedmont Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
HAWAII
700 Bishop Street
Honolulu, HI
ILLINOIS
215 East Erie Street
Chicago, IL
One North Franklin
Chicago, IL
540 Lake Cook Road
Deerfield, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
LOUISIANA
201 St. Charles Avenue
New Orleans, LA
MAINE
3 Canal Plaza
Portland, ME
MARYLAND
1 West Pennsylvania Ave.
Towson, MD
7401 Wisconsin Avenue
Bethesda, MD
MASSACHUSETTS
470 Boylston Street
Boston, MA
21 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
Braintree, MA
101 Cambridge Street
Burlington, MA
416 Belmont Street
Worcester, MA
MICHIGAN
280 North Woodward Ave.
Birmingham, MI
26955 Northwestern Hwy.
Southfield, MI
MINNESOTA
38 South Sixth Street
Minneapolis, MN
MISSOURI
700 West 47th Street
Kansas City, MO
8885 Ladue Road
Ladue, MO
200 North Broadway
St. Louis, MO
NEW JERSEY
60B South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
505 Millburn Avenue
Short Hills, NJ
NEW YORK
1050 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
10 Bank Street
White Plains, NY
NORTH CAROLINA
2200 West Main Street
Durham, NC
4611 Sharon Road
Charlotte, NC
OHIO
600 Vine Street
Cincinnati, OH
1903 East Ninth Street
Cleveland, OH
28699 Chagrin Boulevard
Woodmere Village, OH
OREGON
121 S.W. Morrison Street
Portland, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
TENNESSEE
5100 Poplar Avenue
Memphis, TN
TEXAS
10000 Research Boulevard
Austin, TX
7001 Preston Road
Dallas, TX
1155 Dairy Ashford
Houston, TX
1010 Lamar Street
Houston, TX
2701 Drexel Drive
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
UTAH
215 South State Street
Salt Lake City, UT
VERMONT
199 Main Street
Burlington, VT
VIRGINIA
8180 Greensboro Drive
McLean, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
1001 Fourth Avenue
Seattle, WA
WASHINGTON, DC
1775 K Street, N.W.
Washington, DC
WISCONSIN
222 East Wisconsin Avenue
Milwaukee, WI
TO WRITE FIDELITY
If more than one address is listed, please locate the address that is
closest to you. We'll give your correspondence immediate attention and send
you written confirmation upon completion of your request.
(LETTER_GRAPHIC)(LETTER_GRAPHIC)MAKING CHANGES
TO YOUR ACCOUNT
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(LETTER_GRAPHIC)(LETTER_GRAPHIC)FOR NON-RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
OVERNIGHT EXPRESS
Fidelity Investments
100 Crosby Parkway - KP2C
Covington, KY 41015-4399
SELLING SHARES
Fidelity Investments
P.O. Box 193
Boston, MA 02210-0193
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
Fidelity Investments
P.O. Box 30281
Salt Lake City, UT 84130-0281
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions
World Trade Center
164 Northern Avenue
Boston, MA 02210
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 193
Boston, MA 02210-0193
(LETTER_GRAPHIC)(LETTER_GRAPHIC)FOR RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
TO CALL FIDELITY
FOR FUND INFORMATION AND QUOTES
The Fidelity Telephone Connection offers you special automated telephone
services for quotes and balances. The services are easy to use,
confidential and quick. All you need is a Touch Tone telephone.
YOUR PERSONAL IDENTIFICATION NUMBER
(PIN)
The first time you call one of our automated telephone services, we'll ask
you
to set up your Personal Identification
Number (PIN). The PIN assures that
only you have automated telephone
access to your account information.
Please have your Customer Number
(T-account #) handy when you call --
you'll need it to establish your PIN. If
you would ever like to change your PIN, just choose the "Change your
Personal
Identification Number" option when
you call. If you forget your PIN, please
call a Fidelity representative at 1-800-
544-6666 for assistance.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC
(PHONE_GRAPHIC)MUTUAL FUND QUOTES*
1-800-544-8544
Just make a selection from this record-ed menu:
PRESS
For quotes on funds you own.
1.
For an individual fund quote.
2.
For the ten most frequently
requested Fidelity fund quotes.
3.
For quotes on Fidelity Select
Portfolios.(registered trademark)
4.
To change your Personal
Identification Number (PIN).
5.
To speak with a Fidelity
representative.
6.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC
(PHONE_GRAPHIC)MUTUAL FUND ACCOUNT
BALANCES 1-800-544-7544
Just make a selection from this record-
ed menu:
PRESS
For balances on funds you own.
1.
For your most recent fund activity
(purchases, redemptions, and
dividends).
2.
To change your Personal
Identification Number (PIN).
3.
To speak with a Fidelity
representative.
4.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
RETURN WILL
VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS
MEANS THAT
YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO
ASSURANCE THAT
MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN
INVESTMENT IN
A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF
DIVIDENDS
AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES.
INVESTMENT ADVISER
Fidelity Management & Research
Company
Boston, MA
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
William J. Hayes, Vice President
Robert E. Stansky, Vice President
Gary L. French, Treasurer
John H. Costello, Assistant Treasurer
Arthur S. Loring, Secretary
Robert H. Morrison, Manager,
Security Transactions
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox*
Phyllis Burke Davis*
Richard J. Flynn*
Edward C. Johnson 3d
E. Bradley Jones*
Donald J. Kirk*
Peter S. Lynch
Edward H. Malone*
Marvin L. Mann*
Gerald C. McDonough*
Thomas R. Williams*
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Co.
Boston, MA
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE
CUSTODIAN
Brown Brothers Harriman & Co.
Boston, MA
FIDELITY GROWTH FUNDS
Blue Chip Growth Fund
Capital Appreciation Fund
Contrafund
Disciplined Equity Fund
Dividend Growth Fund
Emerging Growth Fund
Fidelity Fifty
Growth Company Fund
Low-Priced Stock Fund
Magellan(registered trademark) Fund
Mid-Cap Stock Fund
New Millennium(trademark) Fund
OTC Portfolio
Retirement Growth Fund
Small Cap Growth Fund
Stock Selector
Trend Fund
Value Fund
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
(registered trademark)
(2_FIDELITY_LOGOS)FIDELITY
EMERGING GROWTH
FUND
ANNUAL REPORT
NOVEMBER 30, 1994
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over time.
FUND TALK 6 The manager's review of fund
performance, strategy and outlook.
INVESTMENT CHANGES 9 A summary of major shifts in the
fund's investments over the past six
months.
INVESTMENTS 10 A complete list of the fund's
investments with their market
values.
FINANCIAL STATEMENTS 20 Statements of assets and liabilities,
operations, and changes in net
assets, as well as financial
highlights.
NOTES 24 Notes to the financial statements.
REPORT OF INDEPENDENT 28 The auditors' opinion.
ACCOUNTANTS
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR DISTRIBUTION TO
PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN
EFFECTIVE
PROSPECTUS. MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED BY, ANY
DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, THE FEDERAL
RESERVE BOARD OR
ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISK, INCLUDING THE
POSSIBLE LOSS OF
PRINCIPAL. NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A
BANK. FOR MORE
INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES, CALL
1-800-544-8888 FOR
A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY.
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
The unsettling period that began for investors when the Federal Reserve
Board raised short-term interest rates in February has continued into the
fourth quarter of 1994. The Board raised the federal funds rate - the rate
banks charge each other for overnight loans - five times from February
through August, taking it from 3.00% to 4.75%. A sixth increase in November
lifted the rate to 5.50%. The Fed rate hikes were intended to forestall
inflation that could result from an improving U.S. economy, and they led to
below-average returns for many stocks and negative returns for many bond
investments.
The volatility we have witnessed this year follows a period in which there
was a nearly perfect investing environment. Although there was a
late-summer rally in stocks and, to a lesser extent in bond markets, it is
impossible to predict where interest rates might go or what might happen in
the markets in the months ahead. That's why it probably is a good time to
again review your investment portfolio and how well it matches your goals.
If you can leave your money invested over the long term, you can avoid much
of the volatility that generally accompanies the stock market in the short
term, as we have been witnessing this year. You also can help to manage
risk through diversification of investments. A stock fund is already
diversified because it invests in many issues. You can diversify even
further by placing some of your money in several different stock funds or
in other investment categories, such as bonds.
If you have a short investment time horizon, you might want to consider
moving some of your investment into a money market fund, which seeks income
and a stable share price by investing in high-quality, short-term
investments. As with any mutual fund, of course, there is no assurance that
a money market fund will achieve its goal, and it is important to remember
that money market funds are not insured by any agency of the U.S.
government.
Finally, no matter what your investment horizon or portfolio diversity, it
makes good sense to follow a regular investment plan - investing a certain
amount of money at the same time each month or quarter - and to review your
portfolio periodically, as we have discussed here. A periodic investment
plan will not, of course, assure a profit or protect against a loss.
If you have any questions, please call us at 1-800-544-8888. We stand ready
to provide the information you need to make the investments that are right
for you.
Best regards,
Edward C. Johnson 3d
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage of change in value, the average annual
percentage change, or the growth of a hypothetical $10,000 investment. Each
performance figure includes changes in a fund's share price, plus
reinvestment of any dividends (or income) and capital gains (the profits
the fund earns when it sells stocks that have grown in value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1994 PAST 1 LIFE OF
YEAR FUND
Emerging Growth 1.27% 112.18%
Emerging Growth (including 3% sales -1.76% 105.81%
charge)
Russell 2000(registered trademark) -1.11% 98.87%
Average Small Company Growth Fund 1.30% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year, or since the fund started on
December 28, 1990. For example, if you invested $1,000 in a fund that had a
5% return over the past year, you would end up with $1,050. Total return
figures do not include the effect of the 0.75% redemption fee on shares
held less than 90 days. You can compare the fund's returns to the
performance of the Russell 2000 Index - a broad measure of the performance
of small company stocks. You can also compare them to the average small
company growth fund, which currently reflects the performance of 207 small
company growth funds tracked by Lipper Analytical Services. Both benchmarks
include reinvested dividends and capital gains, if any, and exclude the
effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1994 PAST 1 LIFE OF
YEAR FUND
Emerging Growth 1.27% 21.10%
Emerging Growth (including 3% sales -1.76% 20.17%
charge)
Russell 2000(registered trademark) -1.11% 19.12%
Average Small Company Growth Fund 1.30% n/a
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Fidelity Emerging GRussell 2000 Index
12/28/90 9700.00 10000.00
12/31/90 9758.20 10118.31
01/31/91 11203.50 11033.34
02/28/91 11804.90 12263.72
03/31/91 12648.80 13126.95
04/30/91 12580.90 13093.92
05/31/91 13434.50 13718.05
06/30/91 12493.60 12918.61
07/31/91 13754.60 13371.94
08/31/91 14647.00 13866.90
09/30/91 14753.70 13975.48
10/31/91 14967.10 14345.11
11/30/91 14365.70 13681.63
12/31/91 16305.88 14777.18
01/31/92 16354.92 15974.53
02/29/92 16104.39 16440.53
03/31/92 15072.19 15884.04
04/30/92 14621.22 15327.56
05/31/92 14801.61 15531.38
06/30/92 14060.02 14796.86
07/31/92 14741.48 15311.50
08/31/92 14280.50 14879.43
09/30/92 14731.46 15222.82
10/31/92 15753.64 15706.69
11/30/92 16956.21 16908.56
12/31/92 17668.44 17497.62
01/31/93 18231.12 18089.85
02/28/93 17527.14 17672.04
03/31/93 18034.42 18245.49
04/30/93 17899.84 17744.65
05/31/93 19463.09 18529.84
06/30/93 19659.80 18645.43
07/31/93 19587.33 18902.86
08/31/93 20343.08 19719.50
09/30/93 20664.01 20275.98
10/31/93 21160.94 20797.86
11/30/93 20322.37 20113.33
12/31/93 21180.19 20801.02
01/31/94 21797.79 21453.20
02/28/94 21673.66 21375.61
03/31/94 20519.22 20247.03
04/30/94 20606.11 20367.37
05/31/94 19811.66 20138.67
06/30/94 18421.37 19454.83
07/31/94 19116.51 19774.47
08/31/94 20519.22 20876.35
09/30/94 20419.91 20806.45
10/31/94 21400.56 20724.34
11/30/94 20581.28 19849.11
$10,000 OVER LIFE OF FUND: Let's say you invested $10,000 in Fidelity
Emerging Growth Fund on December 28, 1990, and paid a 3% sales charge. As
the chart shows, by November 30, 1994, the value of your investment would
have grown to $20,581 - a 105.81% increase on your initial investment. For
comparison, look at how the Russell 2000 Index did over the same period.
With dividends reinvested, the same $10,000 investment would have grown to
$19,887 - a 98.87% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
growth in the long run and
volatility in the short run. In
turn, the share price and
return of a fund that invests in
stocks will vary. That means if
you sell your shares during a
market downturn, you might
lose money. But if you can
ride out the market's ups and
downs, you may have a gain.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
Rising interest rates contributed
to below-average returns in the
U.S. stock market during the 12
months ended November 30,
1994. The Standard & Poor's 500
stock index finished the 12-month
period with a total return of 1.05%
- - below its historical annual
average return of more than 10%.
After two months of steady gains,
stocks stumbled from February
through June 1994. During that
time, the Federal Reserve Board
raised short-term interest rates
four times in an effort to curb
possible future inflation triggered
by a strengthening economy.
Higher rates hurt stocks because
they raise the cost of borrowing
for companies and consumers,
often dampening future corporate
profits. In addition, higher rates
often make bonds and other
fixed-income investments more
attractive relative to stocks.
Despite a fifth Fed rate hike in
August, the market rallied from
July through October, fueled by
strengthening corporate earnings
and a flurry of merger and
acquisition activity. Interest rate
concerns resurfaced in
November, when the Fed raised
rates again. Although returns in
overseas markets were mixed,
foreign stocks generally fared
better than those in the U.S. The
Morgan Stanley EAFE (Europe,
Australia, Far East) index
returned 14.84% for the 12
months ended November 30,
while the Morgan Stanley
Emerging Markets Free index
was up 17.44% during the same
period.
An interview with Lawrence
Greenberg, Portfolio Manager of Fidelity Emerging Growth Fund
Q. LARRY, HOW HAS THE FUND
PERFORMED?
A. For the year ending November 30, 1994, the fund's return was almost
identical to its peer group average. The fund returned 1.27% while the
average small company growth fund returned 1.30% for the same time period,
according to Lipper Analytical Services.
Q. WHAT FACTORS CONTRIBUTED TO
PERFORMANCE?
A. There's no question that the fund had a tough year. Growth stocks tend
to be hardest hit during periods of market correction because of their
higher-than-average valuations - prices relative to earnings. During most
of the year, cyclicals - those stocks that tend to rise and fall with the
economy - performed much better than the growth stocks that make up this
fund. When the markets stabilized in the second half of the year, the fund
started to perform better. While performance was by no means stellar, the
fund held its own in a very volatile market environment.
Q. HOW DID RISING INTEREST RATES AND A VOLATILE STOCK MARKET INFLUENCE YOUR
INVESTMENT STRATEGY?
A. Rising interest rates impact smaller and emerging growth stocks more
than other stocks. While sell-offs in the market tend to impact this fund
more than less aggressive funds, it also gives me the opportunity to buy
more of the best performing companies at more attractive valuations.
Ideally, when the market rebounds, the fund should be well-positioned to
bounce back strongly.
Q. WHY DO YOU CONTINUE TO KEEP NEARLY HALF THE FUND'S INVESTMENTS IN
TECHNOLOGY?
A. As opposed to the 1980s, when we were in a consumer-driven economy, the
1990s are being driven by capital investment and productivity enhancement,
both of which play directly into the hands of technology. Despite a recent
slowdown in the U.S. economy, the outlook for spending in technology both
here and abroad remains strong. We're seeing strength in virtually every
area of technology, from PCs and semiconductors to computer networking.
Oracle, the fund's largest investment on November 30, continues to benefit
from the growing acceptance of client-server computing - PCs linked by
networks - over the mainframe systems of the past. I've recently reduced my
position in Compaq by about half and decided to take some profits. I still
think Compaq is the top manufacturer of personal computers, but as its
stock climbs, I don't need to own quite so much of it.
Q. WHAT OTHER INDUSTRIES DO YOU
LIKE NOW?
A. Well, I look for companies that are growing the absolute fastest, with
the best chance for positive earnings surprises. The cellular telephone
industry, which falls under the utilities sector on the fund's list of
holdings, is exhibiting tremendous momentum. Airtouch and Vanguard Cellular
are two new additions to the fund's top 10 investments. I also own two
classes of Nokia stock, a Finnish cellular equipment provider, which, if
added together, would also be in the fund's top 10. The number of cellular
subscribers is growing about 50% a year, and this trend is showing no signs
of slowing down. I continue to believe that cellular is one of the true
emerging growth industries of the 1990s. These companies made up more than
7% of the fund's investments on November 30.
Q. WHAT INVESTMENTS HAVEN'T WORKED OUT AS WELL AS YOU'D HOPED IN THE PAST
12 MONTHS?
A. When the information superhighway turned into the information super
``hype'' way, stocks such as DSC Communications didn't do well. Though the
business prospects of the company didn't change all that much, the
perception of it did. I would have liked to have been more astute about
these changes in perception and done a better job trading the stock.
Newbridge Networks and Cisco Systems are two other examples of stocks that
didn't work out as well as I would have liked. Both had been big winners
over the past few years and as their growth rates showed signs of slowing,
the stocks corrected. However, earnings prospects for both companies remain
good, and both stocks have begun to recover from their lows.
Q. WHAT'S YOUR OUTLOOK FOR THE NEXT SIX MONTHS?
A. While the direction of the market is always hard to predict, I believe
that the outperformance of cyclical stocks over growth stocks is behind us.
When the market stabilizes, the fund should be in a better position to
outperform the market.
FUND FACTS
GOAL: to increase the value
of the fund's shares by
investing mainly in the stocks
of fast-growing small and
medium-sized companies
START DATE: December 28,
1990
SIZE: as of November 30,
1994, more than $611 million
MANAGER: Lawrence
Greenberg, since October
1993; manager, VIP: Growth
Port- folio, since April 1991;
Fidelity Select Environmental
Services Portfolio, October
1986 - April 1991; Fidelity
Select Medical Delivery
Portfolio, July 1989 - April
1991; joined Fidelity in 1986
(checkmark)
LARRY GREENBERG ON HIS
INVESTMENT STRATEGY:
"This fund tends to turn in its
strongest performance when
the overall market is strong
and interest rates are
stable-to-down. We didn't see
that this year; rising interest
rates and a volatile stock
market made it a very
challenging time for emerging
growth stocks. In a tough
environment such as we've
seen recently, I try to own the
stocks of companies that
grow earnings the fastest. If I
do that, the fund has the
potential to do well regardless
of what the overall economy
does."
(solid bullet) Retail and wholesale stocks
increased from 9.0% of the
fund's investments over the
past six months to 13.8%.
(solid bullet) From May 31 to November
30, healthcare stocks climbed
from 5.3% to 8.9% of the
fund.
(solid bullet) The fund is authorized to
invest in derivative
instruments such
as futures, options and
foreign currency forwards.
During the period, the fund
hedged a portion of its foreign
currency exposure with a
small amount of foreign
currency forwards.
INVESTMENT CHANGES
TOP TEN STOCKS AS OF NOVEMBER 30, 1994
% OF FUND'S
% OF FUND'S INVESTMENTS
INVESTMENTS IN THESE STOCKS
6 MONTHS AGO
Oracle Systems Corp. 4.6 3.8
DSC Communications Corp. 3.9 3.2
Lowe's Companies, Inc. 2.8 1.7
Motorola, Inc. 2.6 1.8
Vanguard Cellular Systems, Inc. Class 2.3 1.4
A
Airtouch Communications 2.2 1.5
Compaq Computer Corp. 2.2 4.8
Cabletron Systems, Inc. 2.0 3.0
Newbridge Networks Corp. 2.0 2.3
Home Depot, Inc. (The) 2.0 1.1
TOP FIVE INDUSTRIES AS OF NOVEMBER 30, 1994
% OF FUND'S
% OF FUND'S INVESTMENTS
INVESTMENTS IN THESE INDUSTRIES
6 MONTHS AGO
Technology 49.5 49.4
Retail & Wholesale 13.8 9.0
Utilities 9.0 8.9
Health 8.9 5.3
Media & Leisure 6.9 5.2
ASSET ALLOCATION
AS OF NOVEMBER 30, 1994 AS OF MAY 31, 1994
Row: 1, Col: 1, Value: 2.7
Row: 1, Col: 2, Value: 47.3
Row: 1, Col: 3, Value: 50.0
Row: 1, Col: 1, Value: 7.9
Row: 1, Col: 2, Value: 42.1
Row: 1, Col: 3, Value: 50.0
Stocks 97.3%
Short-term
investments 2.7%
Stocks 92.1%
Short-term
investments 7.9%
INVESTMENTS NOVEMBER 30, 1994
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 97.3%
SHARES VALUE (NOTE 1)
(000S)
BASIC INDUSTRIES - 0.7%
CHEMICALS & PLASTICS - 0.5%
Airgas, Inc. (a) 120,000 $ 3,000,000
METALS & MINING - 0.2%
IMCO Recycling, Inc. (a) 65,000 918,125
TOTAL BASIC INDUSTRIES 3,918,125
CONSTRUCTION & REAL ESTATE - 0.9%
CONSTRUCTION - 0.4%
Oakwood Homes Corp. 111,800 2,347,800
ENGINEERING - 0.5%
DSP Group, Inc. (a) 20,000 450,000
Glenayre Technologies, Inc. (a) 50,000 2,700,000
3,150,000
TOTAL CONSTRUCTION & REAL ESTATE 5,497,800
DURABLES - 2.0%
AUTOS, TIRES, & ACCESSORIES - 1.0%
Autozone, Inc. (a) 125,500 3,215,938
Breed Technologies, Inc. 70,000 2,100,000
Copart, Inc. (a) 30,000 513,750
5,829,688
CONSUMER ELECTRONICS - 0.6%
Fossil, Inc. (a) 35,000 896,875
Harman International Industries, Inc. 85,400 2,946,300
3,843,175
TEXTILES & APPAREL - 0.4%
Tommy Hilfiger (a) 50,300 2,156,613
TOTAL DURABLES 11,829,476
ENERGY - 0.2%
INDEPENDENT POWER - 0.2%
Thermo Electron Corp. (a) 30,000 1,320,000
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - 0.1%
INSURANCE - 0.1%
GMIS, Inc. (a) 24,500 $ 467,031
HEALTH - 8.9%
DRUGS & PHARMACEUTICALS - 2.8%
Amgen, Inc. (a) 45,000 2,626,875
Biogen, Inc. (a) 20,000 775,000
Cellpro, Inc. (a) 25,000 462,500
Cephalon, Inc. (a) 12,800 108,800
COR Therapeutics, Inc. (a) 40,000 535,000
Dura Pharmaceuticals, Inc. (a) 86,900 1,129,700
Elan Corp. PLC:
ADR (a) 50,000 1,762,500
therapeutic systems unit (1 common & 1 ADR warrant) (a) 20,237 521,103
Insite Vision, Inc. (a) 50,000 262,500
North American Biologicals, Inc. (a) 76,000 541,500
Pfizer, Inc. 95,000 7,350,625
16,076,103
MEDICAL EQUIPMENT & SUPPLIES - 1.9%
Boston Scientific Corp. (a) 75,000 1,200,000
Cardinal Health, Inc. 60,000 2,730,000
Medtronic, Inc. 20,000 1,060,000
Nellcor, Inc. (a) 21,900 741,863
Respironics, Inc. (a) 20,700 476,100
St. Jude Medical, Inc. 78,600 3,134,175
Thermedics, Inc. (a) 75,000 975,000
Thermo Cardiosystems, Inc. (a) 60,900 943,950
11,261,088
MEDICAL FACILITIES MANAGEMENT - 4.2%
Columbia/HCA Healthcare Corp. 55,000 2,083,125
Health Management, Inc. (a) 37,700 631,475
Integrated Health Services, Inc. (a) 75,000 2,850,000
Lincare Holdings, Inc. (a) 200,000 5,450,000
Living Centers of America, Inc. 21,800 703,050
Rotech Medical Corp. 15,000 431,250
Sierra Health Services, Inc. (a) 50,000 1,537,500
United HealthCare Corp. 114,300 5,429,250
U.S. Healthcare, Inc. 75,000 3,356,250
Vencor, Inc. (a) 22,500 610,313
Vivra, Inc. (a) 55,000 1,574,375
24,656,588
TOTAL HEALTH 51,993,779
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
INDUSTRIAL MACHINERY & EQUIPMENT - 3.2%
ELECTRICAL EQUIPMENT - 2.5%
Adflex Solutions (a) 36,700 $ 555,088
American Power Conversion Corp. (a) 100,000 1,612,500
Avid Technology, Inc. (a) 25,000 1,031,250
California Microwave Corp. (a) 15,200 480,700
Catalina Lighting, Inc. (a) 95,600 728,950
IEC Electronics Corp. (a) 90,000 1,023,750
Oak Industries, Inc. (a) 50,000 1,393,750
Scientific-Atlanta, Inc. 214,100 4,228,475
Sensormatic Electronics Corp. 50,000 1,612,500
Spectrain Corp. (a) 40,400 1,010,000
United Communications Industries:
(For. Reg.) 12,000 341,017
(Loc. Reg.) 23,100 645,393
14,663,373
INDUSTRIAL MACHINERY & EQUIPMENT - 0.6%
AGCO Corp. 65,000 2,965,625
Perspective Technologies Corp. unit
(1 Common & 1 warrant) (a) 23,000 207,000
Ultratech Stepper, Inc. 3,500 135,041
Veeco Instruments, Inc. 10,000 110,000
3,417,666
POLLUTION CONTROL - 0.1%
TETRA Technologies, Inc. (a) 51,100 491,838
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 18,572,877
MEDIA & LEISURE - 6.9%
BROADCASTING - 1.6%
ACS Enterprises, Inc. (a) 25,000 187,500
Clear Channel Communications, Inc. (a) 30,100 1,377,075
Infinity Broadcasting Corp. (a) 84,710 2,541,300
People's Choice TV Corp. (a) 20,000 390,000
Viacom, Inc.:
(non-vtg.) (a) 125,099 4,816,312
(rights) (a) 65,000 97,500
9,409,687
ENTERTAINMENT - 0.4%
Players International, Inc. (a) 55,000 1,113,750
Scientific Games Holdings Corp. (a) 26,700 1,141,425
2,255,175
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
MEDIA & LEISURE - CONTINUED
LEISURE DURABLES & TOYS - 0.5%
Champion Enterprises, Inc. (a) 19,900 $ 564,663
Coastcast Corp. (a) 31,000 503,750
Cobra Golf, Inc. (a) 50,000 1,800,000
2,868,413
LODGING & GAMING - 1.2%
Hospitality Franchise Systems, Inc. 200,000 4,900,000
National Gaming Corp. 20,000 335,000
Sholodge, Inc. (a) 67,066 1,542,518
6,777,518
RESTAURANTS - 3.2%
Apple South, Inc. 135,800 1,731,450
Applebee's International, Inc. 60,000 900,000
Brinker International, Inc. (a) 29,700 504,900
Bugaboo Creek Steak House, Inc. (a) 44,500 456,125
DF&R Restaurants, Inc. (a) 14,000 197,750
Daka International, Inc. (a) 80,000 1,165,000
Landry's Seafood Restaurants, Inc. (a) 75,000 2,043,750
Lone Star Steakhouse Saloon (a) 171,100 3,764,200
Outback Steakhouse, Inc. (a) 55,000 1,416,250
Papa John's International, Inc. (a) 56,700 1,630,125
Starbucks Corp. (a) 125,000 3,351,563
Uno Restaurant Corp. (a) 130,000 1,641,250
18,802,363
TOTAL MEDIA & LEISURE 40,113,156
NONDURABLES - 0.3%
HOUSEHOLD PRODUCTS - 0.3%
American Safety Razor Co. (a) 60,000 810,000
Safeskin Corp. (a) 55,900 901,388
1,711,388
RETAIL & WHOLESALE - 13.8%
APPAREL STORES - 1.0%
Gymboree Corp. (a) 22,700 692,350
Just For Feet, Inc. 127,500 2,953,750
One Price Clothing Stores, Inc. (a) 86,600 768,575
Today's Man, Inc. (a) 40,000 630,000
Urban Outfitters, Inc. (a) 26,900 807,000
5,851,675
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
RETAIL & WHOLESALE - CONTINUED
APPLIANCE STORES - 0.2%
Cellstar Corp. (a) 70,000 $ 1,295,000
DRUG STORES - 0.1%
General Nutrition Companies, Inc. (a) 27,100 792,675
GENERAL MERCHANDISE STORES - 0.7%
Dollar General Corp. 30,000 885,000
Michaels Stores, Inc. (a) 85,800 3,399,825
4,284,825
RETAIL & WHOLESALE, MISC - 11.8%
Barnes & Noble, Inc. (a) 65,000 1,779,375
Bed Bath & Beyond, Inc. (a) 80,000 2,320,000
Best Buy Co., Inc. (a) 20,000 882,500
Books-A-Million, Inc. (a) 125,000 2,125,000
Brookstone, Inc. (a) 50,000 712,500
Campo Electronics Appliances and Computers, Inc. (a) 89,100 1,136,025
Circuit City Stores, Inc. 75,350 1,855,494
Futures Shops Ltd. (a) 75,700 1,182,856
Gateway 2000, Inc. (a) 40,000 875,000
Home Depot, Inc. (The) 250,000 11,562,500
Lowe's Companies, Inc. 430,000 16,071,250
Micro Warehouse, Inc. (a) 63,200 2,057,950
Office Depot, Inc. (a) 250,275 5,944,031
Officemax, Inc. (a) 145,600 3,585,400
Petsmart, Inc. (a) 82,700 2,460,325
Rex Stores Corp. (a) 40,000 675,000
Sport Supply Group, Inc. 124,800 1,294,800
Staples, Inc. (a) 172,500 3,751,875
Sunglass Hut International, Inc. (a) 298,600 6,457,225
Viking Office Products, Inc. (a) 40,000 1,150,000
Williams-Sonoma, Inc. (a) 25,000 757,800
68,636,906
TOTAL RETAIL & WHOLESALE 80,861,081
SERVICES - 1.5%
LEASING & RENTAL - 0.5%
Hollywood Entertainment Corp. (a) 85,800 2,852,850
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
SERVICES - CONTINUED
PRINTING - 0.1%
Cyrk, Inc. (a) 21,900 $ 810,300
SERVICES - 0.9%
Day Runner, Inc. (a) 70,000 997,500
Medaphis Corp. (a) 65,300 2,563,025
Norrell Corp. 30,000 592,500
On Assignment, Inc. (a) 19,900 298,500
Zebra Technologies Corp. Class A (a) 25,000 937,500
5,389,025
TOTAL SERVICES 9,052,175
TECHNOLOGY - 49.5%
COMMUNICATIONS EQUIPMENT - 14.4%
Brite Voice Systems, Inc. (a) 18,000 335,250
Cabletron Systems, Inc. (a) 250,000 11,875,000
Cisco Systems, Inc. (a) 165,000 5,321,250
DSC Communications Corp. (a) 725,000 22,656,250
Dialogic Corp. (a) 46,100 818,275
Ericsson (L.M.) Telefon AB Class B ADR 30,000 1,665,000
General Instrument Corp. (a) 160,000 4,800,000
Global Village Communication (a) 151,600 1,231,750
ITI Technologies 30,000 513,750
Inter-Tel, Inc. 166,100 1,162,700
Microtest, Inc. (a) 40,000 730,000
Newbridge Networks Corp. (a) 350,000 11,768,750
Nokia Corp. AB 52,100 7,115,732
Nokia Corp. AB sponsored ADR (a) 80,000 5,590,000
Norstan, Inc. (a) 30,000 577,500
Summa Four, Inc. (a) 31,700 744,950
3Com Corp. (a) 172,400 7,499,400
84,405,557
COMPUTER SERVICES & SOFTWARE - 14.6%
Alantec Corp. (a) 50,000 1,050,000
Alias Research, Inc. 23,300 544,638
America Online, Inc. (a) 36,000 1,503,000
American Business Information, Inc. (a) 40,000 690,000
Ascend Communications, Inc. (a) 15,000 480,000
Banyan Systems, Inc. (a) 30,000 585,000
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
COMPUTER SERVICES & SOFTWARE - CONTINUED
CUC International, Inc. (a) 135,000 $ 4,151,250
Cambridge Technology Partners Mass., Inc. (a) 60,000 1,027,500
Chipcom Corp. (a) 67,500 2,784,375
CompUSA, Inc. (a) 60,000 825,000
Computer Associates International, Inc. 35,000 1,592,500
Compuware Corp. (a) 32,500 1,202,500
Digidesign, Inc. (a) 30,000 900,000
IMRS, Inc. (a) 20,000 665,000
Informix Corp. (a) 200,000 5,750,000
Integrated Silicon Systems, Inc. (a) 35,000 866,250
Intersolv, Inc. (a) 50,000 837,500
Lotus Development Corp. (a) 18,800 841,300
Macromedia, Inc. (a) 25,000 506,250
Mercury Interactive Group Corp. (a) 53,900 633,325
Microsoft Corp. (a) 65,000 4,086,875
Network Peripherals, Inc. (a) 50,000 1,275,000
Novell, Inc. (a) 55,000 1,093,125
Optical Data Systems, Inc. (a) 13,500 335,813
Oracle Systems Corp. (a) 650,000 26,812,500
Parametric Technology Corp. (a) 75,000 2,606,250
Peoplesoft, Inc. (a) 76,700 4,832,100
Platinum Technology, Inc. (a) 42,500 828,750
Powersoft Corp. (a) 55,000 4,145,625
Softdesk, Inc. (a) 51,200 1,190,400
Softkey International, Inc. (a) 60,300 1,213,538
Sonic Solutions (a) 40,000 630,000
State of The Art, Inc. (a) 300,000 2,062,500
Stratacom, Inc. (a) 72,000 4,050,000
Sybase, Inc. (a) 52,300 2,536,550
85,134,414
COMPUTERS & OFFICE EQUIPMENT - 8.7%
ADAPTEC, Inc. (a) 90,000 1,980,000
Apple Computer, Inc. 20,000 745,000
Bay Networks, Inc. (a) 125,000 3,218,750
Compaq Computer Corp. (a) 325,000 12,715,625
Danka Business Systems PLC sponsored ADR 85,000 1,710,625
Dell Computer Corp. (a) 38,700 1,666,519
EMC Corp. (a) 260,000 5,850,000
Fore Systems, Inc. (a) 7,000 386,750
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
COMPUTERS & OFFICE EQUIPMENT - CONTINUED
In Focus Systems, Inc. (a) 13,900 $ 375,300
Micom Communication Corp. (a) 110,366 1,600,307
Read Rite Corp. (a) 130,683 2,131,766
Seagate Technology (a) 85,400 2,038,925
Silicon Graphics, Inc. (a) 335,000 10,301,250
Sun Microsystems, Inc. (a) 80,000 2,680,000
Tech Data Corp. (a) 125,000 2,125,000
Western Digital Corp. (a) 56,300 1,041,550
50,567,367
ELECTRONIC INSTRUMENTS - 2.3%
Applied Materials, Inc. (a) 150,000 7,181,250
Cohu, Inc. 38,100 742,950
Electro Scientific Industries, Inc. (a) 94,600 1,832,875
Novellus System, Inc. (a) 63,500 3,309,938
Quad Systems Corp. (a) 15,000 165,000
13,232,013
ELECTRONICS - 9.5%
Advanced Micro Devices, Inc. (a) 198,700 5,017,175
Altera Corp. (a) 53,900 2,075,150
Analog Devices, Inc. (a) 50,000 1,656,250
Atmel Corp. (a) 27,000 918,000
Cascade Communications Corp. (a) 12,000 655,500
Cypress Semiconductor Corp. (a) 72,500 1,549,688
Cyrix Corp. (a) 25,000 921,875
Electroglas, Inc. (a) 30,000 1,125,000
Flextronics International 4,700 69,325
Integrated Device Technology, Inc. (a) 20,000 520,000
Intel Corp. 90,000 5,681,250
LSI Logic Corp. (a) 70,000 2,992,500
Linear Technology Corp. 60,500 2,919,125
MRV Communications, Inc. 15,000 178,125
Maxim Integrated Products, Inc. (a) 20,000 1,235,000
Microchip Technology, Inc. (a) 65,000 1,933,750
Micron Technology, Inc. 125,000 5,187,500
Motorola, Inc. 270,000 15,221,250
Opti, Inc. 30,200 505,850
Quality Semiconductor, Inc. 31,700 388,325
Sanmina Corp. (a) 25,000 653,125
Solectron Corp. (a) 25,000 678,125
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
ELECTRONICS - CONTINUED
Tencor Instruments (a) 22,900 $ 1,016,188
Wholesale Cellular USA, Inc. (a) 48,300 700,350
Xilinx, Inc. (a) 30,000 1,755,000
55,553,426
TOTAL TECHNOLOGY 288,892,777
TRANSPORTATION - 0.3%
AIR TRANSPORTATION - 0.3%
SkyWest, Inc. 7,000 99,750
Technology Resources Industries BHD (a) 490,000 1,668,038
1,767,788
UTILITIES - 9.0%
CELLULAR - 7.7%
Airtouch Communications (a) 475,000 12,884,375
Arch Communications Group, Inc. (a) 47,500 938,125
BCE Mobile Communications, Inc. (a) 90,000 2,902,541
Cellular Communications, Inc., Series A (redeemable) (a) 21,700 1,085,000
Commnet Cellular, Inc. (a) 115,000 3,335,000
LIN Broadcasting Corp. (a) 15,000 2,152,500
Metrocall, Inc. (a) 58,900 1,089,650
Premier Page Co. (a) 104,700 1,099,350
Rogers Cantel Mobile Communications, Inc.
Class B (non-vtg.) (a) 75,000 2,221,193
United States Cellular Corp. (a) 90,000 2,812,500
Vanguard Cellular Systems, Inc. Class A (a) 500,000 13,250,000
Vodafone Group PLC sponsored ADR 40,600 1,319,500
45,089,734
TELEPHONE SERVICES - 1.3%
ALC Communications Corp. (a) 80,000 2,720,000
Communications Central, Inc. (a) 55,000 893,750
Incomnet, Inc. (a) 120,000 1,440,000
LCI International, Inc. (a) 100,000 2,225,000
7,278,750
TOTAL UTILITIES 52,368,484
TOTAL COMMON STOCKS
(Cost $509,517,307) 568,365,937
REPURCHASE AGREEMENTS - 2.7%
MATURITY VALUE
AMOUNT (NOTE 1)
Investments in repurchase agreements
(U.S. Treasury obligations), in a
joint trading account at 5.71%
dated 11/30/94 due 12/1/94 $ 15,829,510 $ 15,827,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $525,344,307) $ 584,192,937
LEGEND
(a) Non-income producing
INCOME TAX INFORMATION
At November 30, 1994, the aggregate cost of investment securities for
income tax purposes was $528,828,026. Net unrealized appreciation
aggregated $55,364,911, of which $78,345,319 related to appreciated
investment securities and $22,980,408 related to depreciated investment
securities.
At November 30, 1994, the fund had a capital loss carryforward of
approximately $4,511,427 which will expire on November 30, 2002.
The fund hereby designates $78,227 as a capital gain dividend for the
purpose of the dividend paid deduction.
The fund intends to elect to defer to its fiscal year ending November 30,
1995, $5,418,738 of losses recognized during the period December 1, 1993 to
November 30, 1994.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS NOVEMBER 30, 1994
ASSETS
Investment in securities, at value (including repurchase $ 584,192,937
agreements of $15,827,000) (cost $525,344,307)
See accompanying schedule
Cash 184
Receivable for investments sold 39,806,156
Receivable for fund shares sold 1,066,041
Dividends receivable 131,546
Other receivables 340,365
TOTAL ASSETS 625,537,229
LIABILITIES
Payable for investments purchased $ 12,364,805
Payable for fund shares redeemed 1,468,126
Accrued management fee 337,199
Other payables and accrued expenses 272,772
TOTAL LIABILITIES 14,442,902
NET ASSETS $ 611,094,327
Net Assets consist of:
Paid in capital $ 565,529,178
Accumulated undistributed net realized gain (loss) on (13,283,468)
investments and foreign currency transactions
Net unrealized appreciation (depreciation) on 58,848,617
investments and assets and liabilities in foreign
currencies
NET ASSETS, for 36,861,001 shares outstanding $ 611,094,327
NET ASSET VALUE and redemption price per share $16.58
($611,094,327 (divided by) 36,861,001 shares)
Maximum offering price per share (100/97.00 of $16.58) $17.09
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED NOVEMBER 30, 1994
INVESTMENT INCOME $ 2,076,489
Dividends
Interest 1,732,926
TOTAL INCOME 3,809,415
EXPENSES
Management fee $ 4,147,574
Basic fee
Performance adjustment (89,354)
Transfer agent 1,780,497
Fees
Redemption fees (10,925)
Accounting fees and expenses 337,252
Non-interested trustees' compensation 3,638
Custodian fees and expenses 95,885
Registration fees 43,637
Audit 51,517
Legal 5,606
Interest 172
Reports to shareholders 78,965
Miscellaneous 6,405
Total expenses before reductions 6,450,869
Expense reductions (127,458) 6,323,411
NET INVESTMENT INCOME (LOSS) (2,513,996)
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities (including realized loss of (11,532,489)
$556,417
on sales of investments in affiliated issuers)
Foreign currency transactions 966,509 (10,565,980)
Change in net unrealized appreciation (depreciation) on:
Investment securities 19,980,090
Assets and liabilities in foreign currencies (1,067,264) 18,912,826
NET GAIN (LOSS) 8,346,846
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 5,832,850
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30,
1994 1993
INCREASE (DECREASE) IN NET ASSETS
Operations $ (2,513,996) $ (1,251,833)
Net investment income (loss)
Net realized gain (loss) (10,565,980) 140,954,716
Change in net unrealized appreciation (depreciation) 18,912,826 (32,342,592)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 5,832,850 107,360,291
FROM OPERATIONS
Distributions to shareholders: - (724,816)
From net investment income
From net realized gain (108,388,063) (19,802,516)
TOTAL DISTRIBUTIONS (108,388,063) (20,527,332)
Share transactions 166,847,269 226,148,936
Net proceeds from sales of shares
Reinvestment of distributions 106,675,388 20,156,103
Cost of shares redeemed (194,549,673) (313,667,592)
Redemption fees 187,823 345,971
Net increase (decrease) in net assets resulting from 79,160,807 (67,016,582)
share transactions
TOTAL INCREASE (DECREASE) IN NET ASSETS (23,394,406) 19,816,377
NET ASSETS
Beginning of period 634,488,733 614,672,356
End of period (including undistributed net investment $ 611,094,327 $ 634,488,733
income of $0 and $1,118,623, respectively)
OTHER INFORMATION
Shares
Sold 9,893,278 12,313,050
Issued in reinvestment of distributions 6,284,189 1,186,849
Redeemed (11,642,893) (17,491,439)
Net increase (decrease) 4,534,574 (3,991,540)
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
YEARS ENDED NOVEMBER 30, DECEMBER 28,
1990
(COMMENCEMENT
OF
OPERATIONS) TO
NOVEMBER 30,
1994 1993 1992 1991
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 19.63 $ 16.92 $ 14.81 $ 10.00
Income from Investment Operations
Net investment income (loss) (.07) (.03) .09 (.01)
D
Net realized and unrealized .34 3.29 2.50 4.80
gain (loss)
Total from investment operations .27 3.26 2.59 4.79
Less Distributions - (.02) - -
From net investment income
From net realized gain (3.33) (.54) (.50) -
Total distributions (3.33) (.56) (.50) -
Redemption fees added to paid .01 .01 .02 .02
in capital
Net asset value, end of period $ 16.58 $ 19.63 $ 16.92 $ 14.81
TOTAL RETURN B, C 1.27% 19.85% 18.03% 48.10%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 611,094 $ 634,489 $ 614,672 $ 530,205
(000 omitted)
Ratio of expenses to average net 1.02% 1.19% 1.09% 1.31% A
assets
Ratio of expenses to average net 1.04% 1.20% 1.09% 1.31% A
assets before expense reductions
Ratio of net investment income (.41) (.20) .56% (.10)%
(loss) to average net assets % % A
Portfolio turnover rate 180% 332% 531% 326% A
</TABLE>
A ANNUALIZED.
B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1994
8. SIGNIFICANT ACCOUNTING
POLICIES.
Fidelity Emerging Growth Fund (the fund) is a fund of Fidelity Mt. Vernon
Street Trust(the trust) and is authorized to issue an unlimited number of
shares. The trust is registered under the Investment Company Act of 1940,
as amended (the 1940 Act), as an open-end management investment company
organized as a Massachusetts business trust. The following summarizes the
significant accounting policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are readily
available are valued at the last sale price, or if no sale price, at the
closing bid price. Securities for which exchange quotations are not readily
available (and in certain cases debt securities which trade on an
exchange), are valued primarily using dealer-supplied valuations or at
their fair value as determined in good faith under consistently applied
procedures under the general supervision of the Board of Trustees.
Short-term securities maturing within sixty days of their purchase date are
valued at amortized cost or original cost plus accrued interest, both of
which approximate current value.
FOREIGN CURRENCY TRANSLATION.
The accounting records of the fund are maintained in U.S. dollars.
Investment securities and other assets and liabilities denominated in a
foreign currency are translated into U.S. dollars at the prevailing rates
of exchange at period end. Purchases and sales of securities, income
receipts, and expense payments are translated into U.S. dollars at the
prevailing exchange rate on the respective dates of the transactions.
Effective December 1, 1993, the fund adopted Statement of Position (SOP)
93-4: Foreign Currency Accounting and Financial Statement Presentation for
Investment Companies. In accordance with this SOP, reported net realized
gains and losses on foreign currency transactions represent net gains and
losses from sales and maturities of forward currency contracts, disposition
of foreign currencies, currency gains and losses realized between the trade
and settlement dates on securities transactions, and the difference between
the amount of net investment income accrued and the U.S. dollar amount
actually received. Further, as permitted under the SOP, the effects of
changes in foreign currency exchange rates on investments in securities are
not segregated in the Statement of Operations from the effects of changes
in market prices of those securities, but are included with the net
realized and unrealized gain or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes all of its taxable income for its fiscal
year. The schedule of investments includes information regarding income
taxes under the caption "Income Tax Information."
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date,
except certain dividends from foreign securities where the ex-dividend date
may have passed, are recorded as soon as the fund is informed of the
ex-dividend date. Interest income is accrued as earned. Investment income
is recorded net of foreign taxes withheld where recovery of such taxes is
uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
futures and options transactions, foreign currency transactions,
partnerships, non-taxable dividends, capital loss carryforwards and losses
deferred due to wash sales and excise tax regulations.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect net investment income per share. Any taxable income or gain
remaining at fiscal year end is distributed in the following year.
REDEMPTION FEES. Shares held in the fund less than 90 days are subject to a
redemption fee equal to .75% of the proceeds of the redeemed shares. A
portion of the fee is accounted for as a reduction of transfer agent
expenses. This portion of the redemption fee is used to offset the
transaction costs and other expenses that short-term trading imposes on the
fund and its shareholders. The remainder of the redemption fee is accounted
for as an addition to paid in capital.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
CHANGE IN ACCOUNTING FOR DISTRIBUTIONS TO SHAREHOLDERS. Effective December
1, 1993, the fund adopted Statement of Position 93-2: Determination,
Disclosure, and Financial Statement Presentation of Income, Capital Gain,
and Return of Capital Distributions by Investment Companies. As a result,
the fund changed the classification of distributions to shareholders to
better disclose the differences between financial statement amounts and
distributions determined in accordance with income tax regulations.
Accordingly, amounts as of the beginning of the fiscal year have been
reclassified to reflect an increase in paid in capital of $9,716,710, a
decrease in undistributed net investment income of $1,701,558 and a
decrease in accumulated net realized gain on investments of $8,015,152.
9. OPERATING POLICIES.
FORWARD FOREIGN CURRENCY CONTRACTS. The fund may enter into forward foreign
currency contracts. The U.S. dollar value of forward foreign currency
contracts is determined using forward currency exchange rates supplied by a
quotation service. Losses may arise due to changes in the value of the
foreign currency or if the counterparty does not perform under the
contract.
Purchases and sales of forward foreign currency contracts having the same
settlement date and broker are offset and any realized gain (loss) is
recognized on the date of offset, otherwise gain (loss) is recognized on
settlement date.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying securities, whose market value is required to be at least
102% of the resale price at the time of purchase. The fund's investment
adviser, Fidelity Management & Research Company (FMR), is responsible for
determining that the value of these underlying securities remains at least
equal to the resale price.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with other
affiliated entities of FMR, may transfer uninvested cash balances into one
or more joint trading accounts. These balances are invested in one or more
repurchase agreements that mature in 60 days or less from the date of
purchase, and are collateralized by U.S. Treasury or Federal Agency
obligations.
10. PURCHASES AND SALES OF
INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $1,029,108,631 and $1,033,607,665, respectively.
11. FEES AND OTHER
TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly
basic fee that is calculated on the basis of a group fee rate plus a fixed
individual fund fee rate applied to the average net assets of the fund. The
group fee rate is the weighted average of a series of rates and is based on
the monthly average net assets of all the mutual funds advised by FMR. The
rates ranged from .2850% to .5200% for the period December 1, 1993 to July
31, 1994 and .2700% to .5200% for the period August 1, 1994 to November 30,
1994. In the event that these rates were lower than the contractual rates
in effect during those periods, FMR voluntarily implemented the above
rates, as they resulted in the same or a lower management fee. The annual
individual fund fee rate is .35%. The basic fee is subject to a performance
adjustment (up to a maximum of (plus/minus) .20%) based on the fund's
investment performance as compared to the appropriate index over a
specified period of time. For the period, the management fee was equivalent
to an annual rate of .66% of average net assets after the performance
adjustment.
4. FEES AND OTHER
TRANSACTIONS WITH AFFILIATES - CONTINUED
SALES LOAD. For the period, Fidelity Distributors Corporation (FDC), an
affiliate of FMR and the general distributor of the fund, received sales
charges of $1,055,732 on sales of shares of the fund.
TRANSFER AGENT FEES. Fidelity Service Co. (FSC), an affiliate of FMR, is
the fund's transfer, dividend disbursing and shareholder servicing agent.
FSC receives fees based on the type, size, number of accounts and the
number of transactions made by shareholders. FSC pays for typesetting,
printing and mailing of all shareholder reports, except proxy statements.
ACCOUNTING FEES. FSC maintains the fund's accounting records. The fee is
based on the level of average net assets for the month plus out-of-pocket
expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $370,839 for the period.
12. TRANSACTIONS WITH
AFFILIATED COMPANIES.
An affiliated company is a company in which the fund has ownership of at
least 5% of the voting securities. Transactions with companies which are or
were affiliates are as follows:
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES
PURCHASE SALES DIVIDEND MARKET
AFFILIATE COST COST INCOME VALUE
Excel Technology $ - $ 393,375 $ - $ -
State of the Art, Inc. (a) - 1,708,979 - -
TOTALS $ - $ 2,102,354 $ - $ -
(a) Non-income producing.
13. BANK BORROWINGS.
The fund is permitted to have bank borrowings for temporary or emergency
purposes to fund shareholder redemptions. The fund has established
borrowing arrangements with certain banks. Under the most restrictive
arrangement, the fund must pledge to the bank securities having a market
value in excess of 220% of the total bank borrowings. The interest rate on
the borrowings is the bank's base rate, as revised from time to time. The
maximum loan and the average daily loan balance during the period for which
loans were outstanding amounted to $1,601,000. The weighted average
interest rate was 3.875%.
14. EXPENSE REDUCTIONS.
FMR has directed certain portfolio trades to brokers who paid a portion of
the fund's expenses. For the period, the fund's expenses were reduced by
$127,458 under this arrangement.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Mt. Vernon Street Trust and the Shareholders of
Fidelity Emerging Growth Fund:
We have audited the accompanying statement of assets and liabilities of
Fidelity Mt. Vernon Street Trust: Fidelity Emerging Growth Fund, including
the schedule of portfolio investments, as of November 30, 1994, and the
related statement of operations for the year then ended, the statement of
changes in net assets for each of the two years in the period then ended
and the financial highlights for each of the three years in the period then
ended and for the period December 28, 1990 (commencement of operations) to
November 30, 1991. These financial statements and financial highlights are
the responsibility of the fund's management. Our responsibility is to
express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of November 30, 1994 by correspondence with the
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Mt. Vernon Street Trust: Fidelity Emerging Growth Fund as of
November 30, 1994, the results of its operations for the year then ended,
the changes in its net assets for each of the two years in the period then
ended, and the financial highlights for each of the three years in the
period then ended and for the period December 28, 1990 (commencement of
operations) to November 30, 1991, in conformity with generally accepted
accounting principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
January 5, 1995
DISTRIBUTIONS
The Board of Trustees of Fidelity Emerging Growth Fund voted to pay on
December 19, 1994, to shareholders of record at the opening of business on
December 16, 1994, a distribution of $.04 derived from capital gains
realized from sales of portfolio securities.
2.0% of the dividends distributed during the fiscal year qualifies for the
dividends-received deductions for corporate shareholders.
The fund will notify shareholders in January 1995 of the percentages for
use in preparing 1994 income tax returns.
TO CALL FIDELITY
FOR FUND INFORMATION AND QUOTES
The Fidelity Telephone Connection offers you special automated telephone
services for quotes and balances. The services are easy to use,
confidential and quick. All you need is a Touch Tone telephone.
YOUR PERSONAL IDENTIFICATION NUMBER
(PIN)
The first time you call one of our automated telephone services, we'll ask
you
to set up your Personal Identification
Number (PIN). The PIN assures that
only you have automated telephone
access to your account information.
Please have your Customer Number
(T-account #) handy when you call --
you'll need it to establish your PIN. If
you would ever like to change your PIN, just choose the "Change your
Personal
Identification Number" option when
you call. If you forget your PIN, please
call a Fidelity representative at 1-800-
544-6666 for assistance.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC
(PHONE_GRAPHIC)MUTUAL FUND QUOTES*
1-800-544-8544
Just make a selection from this record-ed menu:
PRESS
For quotes on funds you own.
1.
For an individual fund quote.
2.
For the ten most frequently
requested Fidelity fund quotes.
3.
For quotes on Fidelity Select
Portfolios.(registered trademark)
4.
To change your Personal
Identification Number (PIN).
5.
To speak with a Fidelity
representative.
6.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC
(PHONE_GRAPHIC)MUTUAL FUND ACCOUNT
BALANCES 1-800-544-7544
Just make a selection from this record-
ed menu:
PRESS
For balances on funds you own.
1.
For your most recent fund activity
(purchases, redemptions, and
dividends).
2.
To change your Personal
Identification Number (PIN).
3.
To speak with a Fidelity
representative.
4.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
RETURN WILL
VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS
MEANS THAT
YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO
ASSURANCE THAT
MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN
INVESTMENT IN
A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF
DIVIDENDS
AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES.
TO WRITE FIDELITY
If more than one address is listed, please locate the address that is
closest to you. We'll give your correspondence immediate attention and send
you written confirmation upon completion of your request.
(LETTER_GRAPHIC)(LETTER_GRAPHIC)MAKING CHANGES
TO YOUR ACCOUNT
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(LETTER_GRAPHIC)(LETTER_GRAPHIC)FOR NON-RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
OVERNIGHT EXPRESS
Fidelity Investments
100 Crosby Parkway - KP2C
Covington, KY 41015-4399
SELLING SHARES
Fidelity Investments
P.O. Box 193
Boston, MA 02210-0193
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
Fidelity Investments
P.O. Box 30281
Salt Lake City, UT 84130-0281
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions
World Trade Center
164 Northern Avenue
Boston, MA 02210
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 193
Boston, MA 02210-0193
(LETTER_GRAPHIC)(LETTER_GRAPHIC)FOR RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
INVESTMENT ADVISER
Fidelity Management & Research
Company
Boston, MA
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Gary L. French, Treasurer
William J. Hayes, Vice President
Lawrence Greenberg, Vice President
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
Arthur S. Loring, Secretary
Robert H. Morrison, Manager,
Security Transactions
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox*
Phyllis Burke Davis*
Richard J. Flynn*
Edward C. Johnson 3d
E. Bradley Jones*
Donald J. Kirk*
Peter S. Lynch
Marvin L. Mann*
Edward H. Malone*
Gerald C. McDonough*
Thomas R. Williams*
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Co.
Boston, MA
CUSTODIAN
Brown Brothers Harriman & Co.
Boston, MA
FIDELITY GROWTH FUNDS
Blue Chip Growth Fund
Capital Appreciation Fund
Contrafund
Disciplined Equity Fund
Dividend Growth Fund
Emerging Growth Fund
Fidelity Fifty
Growth Company Fund
Low-Priced Stock Fund
Magellan(registered trademark) Fund
Mid-Cap Stock Fund
New Millennium(trademark) Fund
OTC Portfolio
Retirement Growth Fund
Small Cap Growth Fund
Stock Selector
Trend Fund
Value Fund
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
(registered trademark)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE
FIDELITY
(registered trademark)
NEW MILLENNIUM(trademark)
FUND
ANNUAL REPORT
NOVEMBER 30, 1994
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over time.
FUND TALK 6 The manager's review of fund
performance, strategy and outlook.
INVESTMENT CHANGES 9 A summary of major shifts in the
fund's investments over the past six
months.
INVESTMENTS 10 A complete list of the fund's
investments with their market
values.
FINANCIAL STATEMENTS 21 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.
NOTES 25 Notes to the financial statements.
REPORT OF INDEPENDENT 29 The auditors' opinion.
ACCOUNTANTS
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR DISTRIBUTION
TO PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN
EFFECTIVE
PROSPECTUS. MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED BY, ANY
DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, THE FEDERAL
RESERVE BOARD
OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISK, INCLUDING THE
POSSIBLE LOSS OF
PRINCIPAL. NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A
BANK. FOR MORE
INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES, CALL
1-800-544-8888
FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY.
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
The unsettling period that began for investors when the Federal Reserve
Board raised short-term interest rates in February has continued into the
fourth quarter of 1994. The Board raised the federal funds rate - the rate
banks charge each other for overnight loans - five times from February
through August, taking it from 3.00% to 4.75%. A sixth increase in November
lifted the rate to 5.50%. The Fed rate hikes were intended to forestall
inflation that could result from an improving U.S. economy, and they led to
below-average returns for many stocks and negative returns for many bond
investments.
The volatility we have witnessed this year follows a period in which there
was a nearly perfect investing environment. Although there was a
late-summer rally in stocks and, to a lesser extent in bond markets, it is
impossible to predict where interest rates might go or what might happen in
the markets in the months ahead. That's why it probably is a good time to
again review your investment portfolio and how well it matches your goals.
If you can leave your money invested over the long term, you can avoid much
of the volatility that generally accompanies the stock market in the short
term, as we have been witnessing this year. You also can help to manage
risk through diversification of investments. A stock fund is already
diversified because it invests in many issues. You can diversify even
further by placing some of your money in several different stock funds or
in other investment categories, such as bonds.
If you have a short investment time horizon, you might want to consider
moving some of your investment into a money market fund, which seeks income
and a stable share price by investing in high-quality, short-term
investments. As with any mutual fund, of course, there is no assurance that
a money market fund will achieve its goal, and it is important to remember
that money market funds are not insured by any agency of the U.S.
government.
Finally, no matter what your investment horizon or portfolio diversity, it
makes good sense to follow a regular investment plan - investing a certain
amount of money at the same time each month or quarter - and to review your
portfolio periodically, as we have discussed here. A periodic investment
plan will not, of course, assure a profit or protect against a loss.
If you have any questions, please call us at 1-800-544-8888. We stand ready
to provide the information you need to make the investments that are right
for you.
Best regards,
Edward C. Johnson 3d
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each
performance figure includes changes in a fund's share price, plus
reinvestment of any dividends (or income) and capital gains (the profits
the fund earns when it sells stocks that have grown in value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1994 PAST 1 LIFE OF
YEAR FUND
New Millennium 5.33% 26.08%
New Millennium (incl. 3% sales charge) 2.17% 22.30%
S&P 500(registered trademark) 1.05% 8.92%
Average Capital Appreciation Fund -1.20% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year, or since the fund began on
December 28, 1992. For example, if you invested $1,000 in a fund that had a
5% return over the past year, you would end up with $1,050. You can compare
the fund's returns to the performance of the Standard & Poor's Composite
Index of 500 stocks - a common proxy for the U.S. stock market. You can
compare these figures to the average capital appreciation fund, which
currently reflects the performance of 138 capital appreciation funds
tracked by Lipper Analytical Services. Both benchmarks include reinvested
dividends and capital gains, if any, and exclude the effects of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1994 PAST 1 LIFE OF
YEAR FUND
New Millennium 5.33% 12.79%
New Millennium (incl. 3% sales charge) 2.17% 11.02%
S&P 500(registered trademark) 1.05% 4.53%
Average Capital Appreciation Fund -1.20% n/a
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Fidelity New MillenniuStandard & Poor'
12/28/92 9700.00 10000.00
12/31/92 9777.60 9910.45
01/31/93 10291.70 9993.70
02/28/93 10029.80 10129.62
03/31/93 10437.20 10343.35
04/30/93 10340.20 10093.04
05/31/93 10951.30 10363.53
06/30/93 11038.60 10393.59
07/31/93 11242.30 10352.01
08/31/93 11620.60 10744.36
09/30/93 11892.20 10661.62
10/31/93 12105.60 10882.32
11/30/93 11610.90 10778.94
12/31/93 12189.94 10909.36
01/31/94 12418.53 11280.28
02/28/94 12448.36 10974.59
03/31/94 11682.77 10496.09
04/30/94 11613.17 10630.44
05/31/94 11533.62 10804.78
06/30/94 11285.06 10540.07
07/31/94 11523.68 10885.78
08/31/94 12160.02 11332.10
09/30/94 12368.82 11054.46
10/31/94 12756.59 11303.19
11/30/94 12229.62 10891.52
$10,000 OVER LIFE OF FUND: Let's say you invested $10,000 in Fidelity New
Millennium Fund on December 28, 1992, and paid a 3% sales charge. As the
chart shows, by November 30, 1994, the value of your investment would have
grown to $12,230 - a 22.30% increase on your initial investment. For
comparison, look at how the S&P 500 did over the same period. With
dividends reinvested, the same $10,000 investment would have grown to
$10,892 - an 8.92% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
growth in the long run and
volatility in the short run. In
turn, the share price and
return of a fund that invests in
stocks will vary. That means if
you sell your shares during a
market downturn, you might
lose money. But if you can
ride out the market's ups and
downs, you may have a gain.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
Rising interest rates contributed
to below-average returns in the
U.S. stock market during the 12
months ended November 30,
1994. The Standard & Poor's 500
stock index finished the 12-month
period with a total return of 1.05%
- - below its historical annual
average return of more than 10%.
After two months of steady gains,
stocks stumbled from February
through June 1994. During that
time, the Federal Reserve Board
raised short-term interest rates
four times in an effort to curb
possible future inflation triggered
by a strengthening economy.
Higher rates hurt stocks because
they raise the cost of borrowing
for companies and consumers,
often dampening future corporate
profits. In addition, higher rates
often make bonds and other
fixed-income investments more
attractive relative to stocks.
Despite a fifth Fed rate hike in
August, the market rallied from
July through October, fueled by
strengthening corporate earnings
and a flurry of merger and
acquisition activity. Interest rate
concerns resurfaced in
November, when the Fed raised
rates again. Although returns in
overseas markets were mixed,
foreign stocks generally fared
better than those in the U.S. The
Morgan Stanley EAFE (Europe,
Australia, Far East) index
returned 14.84% for the 12
months ended November 30,
while the Morgan Stanley
Emerging Markets Free index
was up 17.44% during the same
period.
An interview with Neal Miller,
Portfolio Manager of Fidelity
New Millennium Fund
Q. NEAL, HOW HAS THE FUND PERFORMED?
A. Returns appear to be competitive. The fund was up 5.33% during the 12
months ended November, 30, 1994. This compares favorably to the average
capital appreciation fund, which was down 1.20% for the same time period,
according to Lipper Analytical Services.
Q. WHAT HELPED THE FUND DO WELL?
A. The fund's good performance is attributable to its investing in
inefficiently priced growth stocks - those of companies with accelerating
earnings. By "inefficiently priced," I mean companies that have been able
to exceed performance expectations placed on them by Wall Street analysts,
and produce a high rate of earnings growth. I have found that this scenario
is the best predictor of forward price movements in stocks. During the
period, several stocks that I owned - such as Oracle Systems and La Quinta
Motor Inns - really delivered.
Q. HERMAN MILLER IS STILL THE TOP POSITION IN THE FUND. WHAT'S HAPPENING
THERE?
A. Well, I've been a fan of Herman Miller for a while now. Herman Miller
pioneered the open office environment but is now introducing its newer
products to emphasize a more items-oriented business. The CEO of Herman
Miller has recognized the demand for individual products for smaller and
independent businesses that do not require sophisticated office systems.
The new designs also have been well received by foreign enterprises. In
addition, the company has placed a great deal of emphasis on ergonomically
designed chairs that are superb in terms of design and are very successful
with the demographics of an aging workforce. Considering the pace of
incoming orders, a refreshed product line and insider buying, I consider
Herman Miller's stock valuation - its price relative to other measures such
as earnings - very low and a great investment for the fund.
Q. WHY HAVE YOU INCREASED YOUR TECHNOLOGY HOLDINGS FROM 19.9% TO 29.9% OF
THE FUND DURING THE PAST SIX MONTHS?
A. Every aspect of the computer industry is extremely competitive and every
player is trying to survive. Therefore, companies are working furiously to
manufacture better technology much more quickly than they normally would.
This rich product backdrop is great for the consumer; products are priced
fairly and end-users are excited about all of the technology that is
available to them. Most interesting to me, however, is how people will be
talking to one another within the business environment. The Internet is one
of the most phenomenal areas of growth that I've ever seen and I have
several holdings that should benefit from its growth. One of the funds
largest investments, Bolt Beranek & Newman (BBN), originally developed the
Internet system under contract for the U.S. government and is poised to
profit as companies increasingly send information over telephone lines.
Q. WHY HAVE THE FUND'S INVESTMENTS IN HEALTHCARE DOUBLED OVER THE PERIOD?
A. We have a situation where managed care doctors, as a group, are making a
bid to care for patients efficiently. For that reason, many aspects of the
managed care industry are seeing growth. Managed care providers need tools
such as information systems that can keep track of patient information and
track patient care. We're starting to see decisions being made in terms of
equipment being put in place that has the lowest cost and the greatest
benefit. Companies such as Acuson are in a position to benefit from that
trend.
Q. WHAT BETS HAVEN'T WORKED OUT AS YOU WOULD HAVE LIKED?
A. The fund's investment in Bowater hasn't performed as I'd hoped. Due to
pollution that is generated from newsprint manufacturing, there's a
movement afoot internationally to force corporate earnings from newsprint
companies like Bowater to be used for environmental compliance in
manufacturing the product. At the same time, demand in Asia is soaring as
daily newspapers are being produced for the first time. The limited supply,
combined with strong worldwide demand for paper, should have forced prices
of paper stocks to move. So far, it hasn't. Although the fund's investment
in Bowater hasn't resulted in large losses, it really could have helped the
fund's return.
Q. WHAT'S YOUR OUTLOOK FOR THE NEXT FEW MONTHS?
A. There's an understandable amount of skepticism about the market. Either
interest rates are going to have to come down or stock prices will go down
- - something has got to give. Although there may be periods of
underperformance, 1995 has the potential to be a good year. It's the third
year in a presidential cycle, which usually is associated with continuing
economic prosperity and growth. I think it could be a better operating
environment for companies with an opportunity to achieve superior returns.
FUND FACTS
GOAL: to increase the value
of the fund's shares over the
long term by focusing on
stocks with growth potential
due to social and economic
changes
START DATE: December 28,
1992
SIZE: as of November 30,
1994, more than $312 million
MANAGER: Neal Miller, since
December 1992; manager,
Fidelity Equity Portfolios,
since November 1988;
Fidelity Aggressive Equity
Discipline, since June 1990;
Fidelity
Special Equity Discipline,
1988-1990; joined Fidelity
in 1988
(checkmark)
NEAL MILLER ON THE INTERNET:
"With utilization growing at
what some estimate as 12
percent per month, the
Internet is evolving into an
important way of doing
business. Many are seeing it
as a vital means of
communication for a
surprisingly diverse group of
industries. On one end of the
spectrum, we see people who
raise chickens using the
Internet to keep abreast of
agricultural reports and
pricing information. On the
other, we see radiologists
using the Internet as an
access point to transfer x-ray
images over geographic
distances to other doctors, in
order to consult with one
another quickly and efficiently.
Intuit, a holding of this fund
and the target of a proposed
merger with Microsoft, is
preparing to use the Internet
to update people's personal
finances. As the Internet
continues to provide
information, entertainment,
and a means for individuals to
communicate in both a
business and community
setting, related businesses
should continue to be a very
strong area of growth."
(solid bullet) Though the fund is
authorized to invest in
derivative instruments such
as futures, options and
foreign currency forwards, it
did not have any significant
derivative investments during
the period.
INVESTMENT CHANGES
TOP TEN STOCKS AS OF NOVEMBER 30, 1994
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE STOCKS
6 MONTHS AGO
Herman Miller, Inc. 3.7 3.7
Oracle Systems, Inc. 2.7 1.6
Bowater, Inc. 2.5 1.5
EMC Corp. 2.2 1.3
Promus Companies, Inc. 1.7 0.3
La Quinta Motor Inns, Inc. 1.7 2.3
Diebold, Inc. 1.6 2.2
Bolt Beranek & Newman, Inc. 1.6 -
Acuson Corp. 1.5 -
Becton, Dickinson & Co. 1.3 0.9
TOP FIVE INDUSTRIES AS OF NOVEMBER 30, 1994
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE INDUSTRIES
6 MONTHS AGO
Technology 29.9 19.9
Health 12.5 5.9
Media & Leisure 11.0 9.8
Basic Industries 7.5 5.8
Energy 5.9 5.0
ASSET ALLOCATION
AS OF NOVEMBER 30, 1994* AS OF MAY 31, 1994**
Row: 1, Col: 1, Value: 6.3
Row: 1, Col: 2, Value: 50.0
Row: 1, Col: 3, Value: 43.7
Row: 1, Col: 1, Value: 6.6
Row: 1, Col: 2, Value: 50.0
Row: 1, Col: 3, Value: 43.4
Stocks 93.7%
Short-term
investments 6.3%
FOREIGN
INVESTMENTS 5.8%
Stocks 93.4%
Short-term
investments 6.6%
FOREIGN
INVESTMENTS 12.2%
*
**
INVESTMENTS NOVEMBER 30, 1994
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 93.3%
SHARES VALUE (NOTE 1)
(000S)
BASIC INDUSTRIES - 7.5%
CHEMICALS & PLASTICS - 2.3%
Eastman Chemical Co. 29,000 $ 1,366,601
Fuller (H.B.) Co. 5,600 179,200
MacDermid, Inc. 6,100 225,700
Potash Corp. of Saskatchewan 6,700 242,041
Union Carbide Corp. 54,900 1,571,513
Wellman, Inc. 146,900 3,727,588
7,312,643
IRON & STEEL - 0.3%
Laclede Steel Co. (a) 20,400 209,100
Quanex Corp. 27,100 609,750
818,850
METALS & MINING - 0.5%
Castech Aluminum Group (a) 24,600 356,700
Castle AM & Co. 95,500 1,241,500
1,598,200
PACKAGING & CONTAINERS - 0.3%
Shorewood Packaging Corp. (a) 56,100 1,079,925
PAPER & FOREST PRODUCTS - 4.1%
Abitibi-Price, Inc. (a) 267,400 3,449,508
Bowater, Inc. 312,300 7,924,613
Stone Consolidated Corp. (a) 139,200 1,492,206
12,866,327
TOTAL BASIC INDUSTRIES 23,675,945
CONGLOMERATES - 0.3%
Alexander & Baldwin, Inc. 36,200 868,800
CONSTRUCTION & REAL ESTATE - 3.0%
BUILDING MATERIALS - 0.8%
Insilco Corp. 89,400 2,402,625
Lilly Industrial Coatings, Inc. Class A 15,850 210,013
2,612,638
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
CONSTRUCTION & REAL ESTATE - CONTINUED
CONSTRUCTION - 2.1%
Blount, Inc. Class A 9,500 $ 425,125
Butler Manufacturing Co. 109,300 3,716,200
NCI Building Systems, Inc. (a) 137,500 2,440,625
6,581,950
REAL ESTATE - 0.1%
Grubb & Ellis Co. (a) 77,800 155,600
TOTAL CONSTRUCTION & REAL ESTATE 9,350,188
DURABLES - 5.7%
AUTOS, TIRES, & ACCESSORIES - 0.4%
CLARCOR, Inc. 17,200 333,250
Custom Chrome, Inc. (a) 7,700 140,525
Lund International Holdings, Inc. (a) 11,900 211,225
Raymond Corp. (The) 29,165 517,679
Smith (A.O.) Corp. Class B 2,600 58,500
1,261,179
CONSUMER DURABLES - 0.5%
Department 56, Inc. (a) 47,000 1,650,875
CONSUMER ELECTRONICS - 0.3%
Sunbeam-Oster, Inc. 18,000 436,500
Toro Co. 11,800 330,400
766,900
HOME FURNISHINGS - 3.7%
Herman Miller, Inc. 463,500 11,645,438
TEXTILES & APPAREL - 0.8%
Culp, Inc. 28,300 290,075
Lacrosse Footwear, Inc. 37,600 441,800
Quiksilver (a) 2,400 39,300
Warnaco Group, Inc. Class A (a) 112,100 1,807,613
2,578,788
TOTAL DURABLES 17,903,180
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
ENERGY - 5.9%
ENERGY SERVICES - 4.6%
BJ Services Co. (a) 57,800 $ 1,069,300
Halliburton Co. 24,500 852,478
Marine Drilling Cos., Inc. (a) 149,300 503,888
Nabors Industries, Inc. (a) 152,500 1,105,625
Offshore Logistics, Inc. (a) 11,100 151,238
Petroleum Helicopters, Inc. 4,100 43,050
Petroleum Helicopters, Inc. (non vtg.) 9,600 96,000
Schlumberger Ltd. 77,800 4,133,125
Smith International, Inc. (a) 208,800 2,818,800
Tuboscope Vetco Corp. (a) 19,300 135,100
Weatherford International, Inc. (a) 354,100 3,275,425
14,184,029
OIL & GAS - 1.3%
Camco International, Inc. 79,000 1,501,000
Chieftain International, Inc. (a) 207,900 2,304,208
Western Gas Resources, Inc. 15,500 315,813
4,121,021
TOTAL ENERGY 18,305,050
FINANCE - 1.5%
CREDIT & OTHER FINANCE - 0.3%
Cash America Investments, Inc. 47,700 411,413
Credit Acceptance Corp. (a) 10,400 356,200
Tong Yang Securities Co. Ltd. 12,228 227,755
995,368
INSURANCE - 0.9%
American Travellers Corp. (a) 133,300 2,232,775
Berkley (W.R.) Corp. 14,900 493,563
2,726,338
SECURITIES INDUSTRY - 0.3%
Korea First Securities Co. Ltd. (a) 4,939 82,047
Seoul Securities Co. (a) 25,584 476,521
Sunkyong Securities Co. (a) 20,000 400,201
958,769
TOTAL FINANCE 4,680,475
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
HEALTH - 12.5%
DRUGS & PHARMACEUTICALS - 3.3%
American Home Products Corp. 35,400 $ 2,305,425
Bristol-Myers Squibb Co. 24,000 1,386,000
Cephalon, Inc. (a) 17,400 147,900
Hauser Chemical Research, Inc. (a) 214,000 1,284,000
Idexx Laboratories, Inc. (a) 70,700 2,421,475
Schering-Plough Corp. 10,900 816,138
Warner-Lambert Co. 23,200 1,795,100
10,156,038
MEDICAL EQUIPMENT & SUPPLIES - 7.6%
Acuson Corp. (a) 272,400 4,562,700
Advanced Technology Laboratories, Inc. (a) 112,000 1,988,000
Becton, Dickinson & Co. 88,500 4,181,625
Boston Scientific Corp. (a) 140,200 2,243,200
Circon Corp. (a) 7,500 88,125
Conmed Corp. (a) 7,600 188,100
Johnson & Johnson 7,300 389,638
Medtronic, Inc. 39,300 2,082,900
Nellcor, Inc. (a) 2,400 81,300
Owens and Minor, Inc. 156,800 2,371,600
Pall Corp. 118,100 2,096,275
St. Jude Medical, Inc. 34,500 1,375,688
SciMed Life Systems, Inc. (a) 31,500 1,539,563
U.S. Surgical Corp. 31,600 687,300
23,876,014
MEDICAL FACILITIES MANAGEMENT - 1.6%
Beverly Enterprises, Inc. (a) 39,800 562,175
Humana, Inc. (a) 39,400 881,575
Surgical Care Affiliates, Inc. 60,400 1,162,700
United HealthCare Corp. 29,300 1,391,750
Vencor, Inc. (a) 34,650 939,881
4,938,081
TOTAL HEALTH 38,970,133
HOLDING COMPANIES - 0.1%
KFC Holdings (Malaysia) BHD 50,000 330,634
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
INDUSTRIAL MACHINERY & EQUIPMENT - 4.0%
ELECTRICAL EQUIPMENT - 2.0%
Amphenol Corp. Class A (a) 157,800 $ 3,767,475
C COR Electronics, Inc. (a) 22,200 1,132,200
Scientific-Atlanta, Inc. 20,400 402,900
TSX Corp. (a) 51,900 1,005,563
6,308,138
INDUSTRIAL MACHINERY & EQUIPMENT - 2.0%
Brenco, Inc. 207,500 2,464,063
Cascade Corp. 82,500 1,815,000
Regal-Beloit Corp. 94,300 1,190,538
Twin Disc, Inc. 35,700 722,925
6,192,526
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 12,500,664
MEDIA & LEISURE - 11.0%
BROADCASTING - 2.4%
Associated Communications Corp. Class B (a) 47,400 1,267,950
CBS, Inc. 48,500 2,691,750
Capital Cities/ABC, Inc. 33,700 2,754,975
Central European Media Class C (a) 13,000 197,438
Clear Channel Communications, Inc. (a) 5,300 242,475
Infinity Broadcasting Corp. (a) 8,600 258,000
SFX Broadcasting, Inc. (a) 1,900 28,975
United Television, Inc. (a) 700 36,400
7,477,963
LEISURE DURABLES & TOYS - 1.3%
Arctco, Inc. 95,850 1,917,000
Rawlings Sporting Goods, Inc. (a) 26,900 373,238
Sports and Recreation, Inc. (a) 8,600 195,650
West Marine, Inc. 88,000 1,760,000
4,245,888
LODGING & GAMING - 5.0%
Accor Asia Pacific Ltd. 202,039 111,829
Argosy Gaming Corp. (a) 76,100 913,200
Caesars World, Inc. (a) 26,500 1,152,750
La Quinta Motor Inns, Inc. 251,337 5,340,911
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
MEDIA & LEISURE - CONTINUED
LODGING & GAMING - CONTINUED
Mirage Resorts, Inc. (a) 138,000 $ 2,725,500
Promus Companies, Inc. (a) 194,700 5,402,925
15,647,115
PUBLISHING - 1.8%
American City Business Journals, Inc. (a) 13,200 212,850
American Media, Inc. Class A 18,200 270,725
Commerce Clearing House, Inc. Class A 26,900 430,400
Plenum Publishing Corp. 5,900 169,625
Times Mirror Co., Series A 132,400 4,087,850
Wiley (John) & Sons, Inc. Class A 9,000 389,250
5,560,700
RESTAURANTS - 0.5%
Landrys Seafood Restaurants, Inc. (a) 3,000 81,750
Quality Dining, Inc. (a) 107,300 1,388,194
1,469,944
TOTAL MEDIA & LEISURE 34,401,610
NONDURABLES - 2.9%
AGRICULTURE - 0.2%
Delta & Pine Land Co. 37,000 647,500
BEVERAGES - 1.0%
Embotelladora Andina SA sponsored ADR 26,300 719,963
Emvasa del Valle de Enah Ord. (a) 195,800 864,911
Vina Concha Y Toro SA sponsored ADR (a) 4,100 73,800
Zaklady Piwowarskie W Zywcu SA 20,000 1,470,126
3,128,800
FOODS - 1.1%
Flowers Industries, Inc. 14,800 260,850
PENWEST Ltd. 1,200 27,300
Smithfield Foods, Inc. (a) 6,200 174,375
Sylvan Foods Holdings, Inc. (a) 50,400 548,100
Thorn Apple Valley, Inc. 12,400 348,750
Wedel SA 25,000 2,070,600
3,429,975
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
NONDURABLES - CONTINUED
HOUSEHOLD PRODUCTS - 0.1%
American Safety Razor Co. (a) 12,200 $ 164,700
TOBACCO - 0.5%
Dibrell Brothers, Inc. 18,500 402,375
Monk Austin, Inc. 8,600 113,408
Sampoerna, Hanjaya Mandala (For. Reg.) 153,500 729,259
Universal Corp. 23,500 505,250
1,750,292
TOTAL NONDURABLES 9,121,267
RETAIL & WHOLESALE - 3.3%
APPAREL STORES - 0.4%
AnnTaylor Stores Corp. (a) 35,300 1,323,750
GENERAL MERCHANDISE STORES - 0.0%
Ezcorp, Inc. Class A (non-vtg) 2,800 32,200
GROCERY STORES - 0.7%
American Stores Co. 12,200 321,629
Whole Foods Market, Inc. (a) 123,900 1,889,475
2,211,104
RETAIL & WHOLESALE, MISCELLANEOUS - 2.2%
Best Buy Co., Inc. (a) 50,400 2,223,900
Friedmans, Inc. Class A (a) 5,500 96,250
Gateway 2000, Inc. (a) 107,100 2,342,813
Micro Warehouse, Inc. (a) 14,300 465,644
Tiffany & Company, Inc. 40,000 1,655,000
6,783,607
TOTAL RETAIL & WHOLESALE 10,350,661
SERVICES - 3.7%
LEASING & RENTAL - 0.1%
Hollywood Entertainment Corp. (a) 7,300 242,725
PRINTING - 0.9%
Cyrk, Inc. (a) 8,900 329,300
Graphic Industries, Inc. 60,300 610,538
New England Business Service, Inc. 109,900 1,978,200
2,918,038
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
SERVICES - CONTINUED
SERVICES - 2.7%
CPI Corp. 112,900 $ 2,201,550
Devry, Inc. (a) 63,500 1,825,625
Manpower, Inc. 60,500 1,754,500
Regis Corp. (a) 43,800 646,050
Robert Half International, Inc. (a) 30,000 746,250
Western Atlas, Inc. 30,600 1,334,925
8,508,900
TOTAL SERVICES 11,669,663
TECHNOLOGY - 29.5%
COMMUNICATIONS EQUIPMENT - 2.6%
Active Voice Corp. (a) 11,900 233,538
Andrew Corp. (a) 8,600 419,250
Bolt Beranek & Newman, Inc. (a) 249,300 4,954,838
Cabletron Systems, Inc. (a) 7,300 346,750
Harmon Industries, Inc. 25,700 452,963
Plantronics, Inc. (a) 55,300 1,638,263
8,045,602
COMPUTER SERVICES & SOFTWARE - 14.8%
Access Health Marketing, Inc. (a) 5,100 87,975
Adobe Systems, Inc. 102,000 3,366,000
America Online, Inc. (a) 24,800 1,035,400
BancTec, Inc. (a) 47,300 1,028,775
Brandon Systems Corp. 35,700 611,363
CACI International, Inc. Class A (a) 51,700 529,925
Computer Task Group, Inc. 19,200 153,600
FTP Software, Inc. 75,900 1,954,425
Harris Computer Systems Corp. (a) 22,800 256,500
Henry (Jack) & Associates, Inc. 138,033 1,397,584
Integrated Silicon Systems, Inc. (a) 47,200 1,168,200
Intuit, Inc. (a) 49,900 3,480,525
Learning Co. (a) 17,300 393,575
Macromedia, Inc. (a) 4,900 99,225
MicroAge, Inc. (a) 51,300 602,775
Microsoft Corp. (a) 16,300 1,024,863
Network Peripherals, Inc. (a) 19,500 497,250
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
COMPUTER SERVICES & SOFTWARE - CONTINUED
Novell, Inc. (a) 161,900 $ 3,217,763
Oracle Systems Corp. (a) 201,600 8,316,000
Parametric Technology Corp. (a) 79,400 2,759,150
Peoplesoft, Inc. (a) 47,700 3,005,100
Platinum Technology, Inc. (a) 70,800 1,380,600
Santa Cruz Operation, Inc. (a) 110,000 1,017,500
Softdesk, Inc. (a) 20,700 481,275
Spectrum Holobyte, Inc. (a) 55,700 738,025
Stratacom, Inc. (a) 71,800 4,038,750
Synopsys, Inc. (a) 43,100 1,775,181
Wind River Systems, Inc. (a) 37,900 355,313
Wonderware Corp. (a) 56,300 1,660,850
46,433,467
COMPUTERS & OFFICE EQUIPMENT - 11.1%
ADAPTEC, Inc. (a) 2,800 61,600
Compaq Computer Corp. (a) 24,500 958,563
Data General Corp. (a) 6,300 67,725
Dell Computer Corp. (a) 94,900 4,086,631
Diebold, Inc. 119,050 4,985,219
Digital Equipment Corp. (a) 78,500 2,669,000
EMC Corp. (a) 311,800 7,015,500
Fore Systems, Inc. (a) 8,500 469,625
International Business Machines Corp. 54,500 3,855,875
Komag, Inc. (a) 3,500 85,750
Plannar Systems, Inc. (a) 80,500 1,610,000
QMS, Inc. (a) 21,600 191,700
Read Rite Corp. (a) 123,000 2,006,438
Silicon Graphics, Inc. (a) 130,900 4,025,175
Sun Microsystems, Inc. (a) 55,100 1,845,850
Symbol Technologies, Inc. (a) 24,300 768,488
34,703,139
ELECTRONIC INSTRUMENTS - 0.2%
Credence Systems Corp. (a) 18,600 489,413
ELECTRONICS - 0.8%
Altera Corp. (a) 7,000 269,500
Burr-Brown Corp. (a) 24,600 347,475
Cascade Communications Corp. (a) 13,700 748,363
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
ELECTRONICS - CONTINUED
Cyrix Corp. 12,100 $ 446,188
Kent Electronics Corp. (a) 22,300 833,463
2,644,989
TOTAL TECHNOLOGY 92,316,610
TRANSPORTATION - 1.7%
AIR TRANSPORTATION - 0.5%
Korean Air 22,500 852,359
Korea Air Lines (a) 5,700 195,117
Northwest Airlines Corp. Class A (a) 29,500 490,438
1,537,914
RAILROADS - 0.4%
Wisconsin Central Transportation Corp. (a) 32,300 1,340,450
TRUCKING & FREIGHT - 0.8%
Detroit & Canada Tunnel Corp. 1,000 26,000
Expeditors International of Washington, Inc. 87,600 1,905,300
Landstar System, Inc. (a) 20,100 512,550
2,443,850
TOTAL TRANSPORTATION 5,322,214
UTILITIES - 0.7%
CELLULAR - 0.2%
Cellular Communications International, Inc. (a) 16,000 680,000
ELECTRIC UTILITY - 0.4%
American Electric Power Co., Inc. 36,700 1,211,100
TELEPHONE SERVICES - 0.1%
Transaction Network Services, Inc. (a) 26,300 332,038
TOTAL UTILITIES 2,223,138
TOTAL COMMON STOCKS
(Cost $269,425,751) 291,990,232
NONCONVERTIBLE PREFERRED STOCKS - 0.4%
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - 0.4%
COMPUTER SERVICES & SOFTWARE - 0.4%
Sap AG (Cost $971,362) 2,000 $ 1,071,850
REPURCHASE AGREEMENTS - 6.3%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.71% dated
11/30/94 due 12/1/94 $ 19,804,141 19,801,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $290,198,113) $ 312,863,082
LEGEND
(a) Non-income producing
INCOME TAX INFORMATION
At November 30, 1994, the aggregate cost of investment securities for
income tax purposes was $290,741,655. Net unrealized appreciation
aggregated $22,121,427, of which $34,808,731 related to appreciated
investment securities and $12,687,304 related to depreciated investment
securities.
The fund hereby designates $2,265,000 as a capital gain dividend for the
purpose of the dividend paid deduction.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS NOVEMBER 30, 1994
ASSETS
Investment in securities, at value (including repurchase $ 312,863,082
agreements of $19,801,000) (cost $290,198,113) -
See accompanying schedule
Cash 299
Receivable for investments sold 16,770,830
Receivable for fund shares sold 1,036,150
Dividends receivable 303,353
Other receivables 7,218
TOTAL ASSETS 330,980,932
LIABILITIES
Payable for investments purchased $ 16,685,729
Payable for fund shares redeemed 1,720,307
Accrued management fee 219,944
Other payables and accrued expenses 152,378
TOTAL LIABILITIES 18,778,358
NET ASSETS $ 312,202,574
Net Assets consist of:
Paid in capital $ 280,486,057
Accumulated undistributed net realized gain (loss) on 9,053,204
investments and foreign currency transactions
Net unrealized appreciation (depreciation) on 22,663,313
investments and assets and liabilities in foreign
currencies
NET ASSETS, for 25,380,263 shares outstanding $ 312,202,574
NET ASSET VALUE and redemption price per share $12.30
($312,202,574 (divided by) 25,380,263 shares)
Maximum offering price per share (100/97.00 of $12.30) $12.68
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED NOVEMBER 30, 1994
INVESTMENT INCOME $ 3,000,859
Dividends
Interest 829,449
TOTAL INCOME 3,830,308
EXPENSES
Management fee $ 2,078,686
Basic fee
Performance adjustment 453,019
Transfer agent fees 987,829
Accounting fees and expenses 186,755
Non-interested trustees' compensation 1,767
Custodian fees and expenses 262,241
Registration fees 47,882
Audit 25,280
Legal 2,568
Reports to shareholders 45,806
Miscellaneous 2,557
Total expenses before reductions 4,094,390
Expense reductions (104,982) 3,989,408
NET INVESTMENT INCOME (LOSS) (159,100)
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 9,949,671
Foreign currency transactions (45,211) 9,904,460
Change in net unrealized appreciation (depreciation) on:
Investment securities 3,046,578
Assets and liabilities in foreign currencies (1,656) 3,044,922
NET GAIN (LOSS) 12,949,382
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM $ 12,790,282
OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED DECEMBER 28,
NOVEMBER 30, 1992
1994 (COMMENCEMENT
OF
OPERATIONS) TO
NOVEMBER 30,
1993
INCREASE (DECREASE) IN NET ASSETS
Operations $ (159,100) $ (177,405)
Net investment income (loss)
Net realized gain (loss) 9,904,460 6,532,870
Change in net unrealized appreciation (depreciation) 3,044,922 19,618,391
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 12,790,282 25,973,856
FROM OPERATIONS
Distributions to shareholders (6,389,367) -
From net realized gain
Share transactions 280,505,790 413,120,185
Net proceeds from sales of shares
Reinvestment of distributions 6,209,934 -
Cost of shares redeemed (235,022,986) (184,985,120)
Net increase (decrease) in net assets resulting from 51,692,738 228,135,065
share transactions
TOTAL INCREASE (DECREASE) IN NET ASSETS 58,093,653 254,108,921
NET ASSETS
Beginning of period 254,108,921 -
End of period (including accumulated net investment $ 312,202,574 $ 254,108,921
loss of $0 and $177,405, respectively)
OTHER INFORMATION
Shares
Sold 22,923,675 37,507,976
Issued in reinvestment of distributions 516,510 -
Redeemed (19,291,537) (16,276,361)
Net increase (decrease) 4,148,648 21,231,615
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED DECEMBER 28, 1992
NOVEMBER 30, (COMMENCEMENT OF
1994 OPERATIONS) TO
NOVEMBER 30,
1993
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 11.97 $ 10.00
Income from Investment Operations
Net investment loss (.01)E (.01)
Net realized and unrealized gain (loss) .64 1.98
Total from investment operations .63 1.97
Less Distributions (.30) -
From net realized gain
Net asset value, end of period $ 12.30 $ 11.97
TOTAL RETURN B, C 5.33% 19.70%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 312,203 $ 254,109
Ratio of expenses to average net assets D 1.29% 1.32%A
Ratio of expenses to average net assets before 1.32% 1.34%A
expense reductions D
Ratio of net investment loss to average net assets (.05)% (.10)%A
Portfolio turnover rate 199% 204%A
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS.
E NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1994
15. SIGNIFICANT ACCOUNTING
POLICIES.
Fidelity New Millennium Fund (the fund) is a fund of Fidelity Mt. Vernon
Street Trust (the trust) and is authorized to issue an unlimited number of
shares. The trust is registered under the Investment Company Act of 1940,
as amended (the 1940 Act), as an open-end management investment company
organized as a Massachusetts business trust. The following summarizes the
significant accounting policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are readily
available are valued at the last sale price, or if no sale price, at the
closing bid price. Securities for which exchange quotations are not readily
available (and in certain cases debt securities which trade on an
exchange), are valued primarily using dealer-supplied valuations or at
their fair value as determined in good faith under consistently applied
procedures under the general supervision of the Board of Trustees.
Short-term securities maturing within sixty days of their purchase date are
valued at amortized cost or original cost plus accrued interest, both of
which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases and
sales of securities,
income receipts, and expense payments are translated into U.S. dollars at
the prevailing exchange rate on the respective dates of the transactions.
Effective December 1, 1993, the fund adopted Statement of Position (SOP)
93-4: Foreign Currency Accounting and Financial Statement Presentation for
Investment Companies. In accordance with this SOP, reported net realized
gains and losses on foreign currency transactions represent net gains and
losses from sales and maturities of forward currency contracts, disposition
of foreign currencies, currency gains and losses realized between the trade
and settlement dates on securities transactions, and the difference between
the amount of net investment income accrued and the U.S. dollar amount
actually received. Further, as permitted under the SOP, the effects of
changes in foreign currency exchange rates on investments in securities are
not segregated in the Statement of Operations from the effects of changes
in market prices of those securities, but are included with the net
realized and unrealized gain or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes all of its taxable income for its fiscal
year. The schedule of investments includes information regarding income
taxes under the caption "Income Tax Information."
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date,
except certain dividends from foreign securities where the ex-dividend date
may have passed, are recorded as soon as the fund is informed of the
ex-dividend date. Interest income is accrued as earned. Investment income
is recorded net of foreign taxes withheld where recovery of such taxes is
uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between
the funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
foreign currency transactions, passive foreign investment companies (PFIC),
partnerships and losses deferred due to wash sales. The Fund also utilized
earnings and profits distributed to shareholders on redemption of shares as
a part of the dividends paid deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect net investment income per share. Any taxable income or gain
remaining at fiscal year end is distributed in the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
CHANGE IN ACCOUNTING FOR
DISTRIBUTIONS TO SHAREHOLDERS. Effective December 1, 1993, the fund adopted
Statement of Position 93-2: Determination, Disclosure, and Financial
Statement Presentation of Income, Capital Gain, and Return of Capital
Distributions by Investment Companies. As a result, the fund changed the
classification of distributions to shareholders to better disclose the
differences between financial statement amounts and distributions
determined in accordance with income tax regulations. Accordingly, amounts
as of the beginning of the fiscal year have been reclassified to reflect an
increase in paid in capital of $2, a decrease in undistributed net
investment loss of $61,058 and a decrease in accumulated net realized gain
on investments of $61,060.
16. OPERATING POLICIES.
FORWARD FOREIGN CURRENCY
CONTRACTS. The fund may enter into forward foreign currency contracts. The
U.S. dollar value of forward foreign currency contracts is determined using
forward currency exchange rates supplied by a quotation service. Losses may
arise due to changes in the value of the foreign currency or if the
counterparty does not perform under the contract.
2. OPERATING POLICIES -
CONTINUED
FORWARD FOREIGN CURRENCY
CONTRACTS - CONTINUED
Purchases and sales of forward foreign currency contracts having the same
settlement date and broker are offset and presented net on the Statement of
Assets and Liabilities. Gain (loss)on the purchase or sale of forward
foreign currency contracts having the same settlement date and broker is
recognized on the date of offset, otherwise gain (loss) is recognized on
settlement date.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying securities, whose market value is required to be at least
102% of the resale price at the time of purchase. The fund's investment
adviser, Fidelity Management & Research Company (FMR), is responsible for
determining that the value of these underlying securities remains at least
equal to the resale price.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other affiliated
entities of FMR, may transfer uninvested cash balances into one or more
joint trading accounts. These balances are invested in one or more
repurchase agreements that mature in 60 days or less from the date of
purchase, and are collateralized by U.S. Treasury or Federal Agency
obligations.
17. PURCHASES AND SALES
OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $620,055,011 and $572,102,372, respectively.
18. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly
basic fee that is calculated on the basis of a group fee rate plus a fixed
individual fund fee rate applied to the average net assets of the fund. The
group fee rate is the weighted average of a series of rates and is based on
the monthly average net assets of all the mutual funds advised by FMR. The
rates ranged from .2850% to .5200% for the period December 1, 1993 to July
31, 1994 and .2700% to .5200% for the period August 1, 1994 to November 30,
1994. In the event that these rates were lower than the contractual rates
in effect during those periods, FMR voluntarily implemented the above
rates, as they resulted in the same or a lower management fee. The annual
individual fund fee rate is .35%. The basic fee is subject to a performance
adjustment (up to a maximum of (plus/minus) .20%) based on the fund's
investment performance as compared to the appropriate index over a
specified period of time. For the period, the management fee was equivalent
to an annual rate of .82% of average net assets after the performance
adjustment.
4. FEES AND OTHER TRANSACTIONS
WITH AFFILIATES - CONTINUED
SALES LOAD. For the period, Fidelity Distributors Corporation (FDC), an
affiliate of FMR and the general distributor of the fund, received sales
charges of $917,800 on sales of shares of the fund.
TRANSFER AGENT FEES. Fidelity Service Co. (FSC), an affiliate of FMR, is
the fund's transfer, dividend disbursing and shareholder servicing agent.
FSC receives fees based on the type, size, number of accounts and the
number of transactions made by shareholders. FSC pays for typesetting,
printing and mailing of all shareholder reports, except proxy statements.
ACCOUNTING FEE. FSC maintains the fund's accounting records. The accounting
fee is based on the level of average net assets for the month plus
out-of-pocket expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $68,291 for the period.
19. EXPENSE REDUCTIONS.
FMR has directed certain portfolio trades to brokers who paid a portion of
the fund's expenses. For the period, the fund's expenses were reduced by
$104,982 under this arrangement.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Mt. Vernon
Street Trust and the Shareholders of Fidelity New Millennium Fund:
We have audited the accompanying statement of assets and liabilities of
Fidelity Mt. Vernon Street Trust: Fidelity New Millennium Fund, including
the schedule of portfolio investments, as of November 30, 1994, and the
related statement of operations for the year then ended, the statement of
changes in net assets and the financial highlights for the year then ended
and for the period December 28, 1992 (commencement of operations) to
November 30, 1993. These financial statements and financial highlights are
the responsibility of the fund's management. Our responsibility is to
express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of November 30, 1994 by correspondence with the
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Mt. Vernon Street Trust: Fidelity New Millennium Fund as of
November 30, 1994, the results of its operations for the year then ended,
the changes in its net assets and the financial highlights for the year
then ended and for the period December 28, 1992 (commencement of
operations) to November 30, 1993 in conformity with generally accepted
accounting principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
January 5, 1995
DISTRIBUTIONS
The Board of Trustees of Fidelity New Millennium Fund voted to pay on
December 12, 1994, to shareholders of record at the opening of business on
December 9, 1994, a distribution of $.24 derived from capital gains
realized from sales of portfolio securities.
A total of 28% of the dividends distributed during the fiscal year
qualifies for the dividends-received deductions for corporate shareholders.
The fund will notify shareholders in January 1995 of the applicable
percentage for use in preparing 1994 income
tax returns.
TO CALL FIDELITY
FOR FUND INFORMATION AND QUOTES
The Fidelity Telephone Connection offers you special automated telephone
services for quotes and balances. The services are easy to use,
confidential and quick. All you need is a Touch Tone telephone.
YOUR PERSONAL IDENTIFICATION NUMBER
(PIN)
The first time you call one of our automated telephone services, we'll ask
you
to set up your Personal Identification
Number (PIN). The PIN assures that
only you have automated telephone
access to your account information.
Please have your Customer Number
(T-account #) handy when you call --
you'll need it to establish your PIN. If
you would ever like to change your PIN, just choose the "Change your
Personal
Identification Number" option when
you call. If you forget your PIN, please
call a Fidelity representative at 1-800-
544-6666 for assistance.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC
(PHONE_GRAPHIC)MUTUAL FUND QUOTES*
1-800-544-8544
Just make a selection from this record-ed menu:
PRESS
For quotes on funds you own.
1.
For an individual fund quote.
2.
For the ten most frequently
requested Fidelity fund quotes.
3.
For quotes on Fidelity Select
Portfolios.(registered trademark)
4.
To change your Personal
Identification Number (PIN).
5.
To speak with a Fidelity
representative.
6.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC
(PHONE_GRAPHIC)MUTUAL FUND ACCOUNT
BALANCES 1-800-544-7544
Just make a selection from this record-
ed menu:
PRESS
For balances on funds you own.
1.
For your most recent fund activity
(purchases, redemptions, and
dividends).
2.
To change your Personal
Identification Number (PIN).
3.
To speak with a Fidelity
representative.
4.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
RETURN WILL
VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS
MEANS THAT
YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO
ASSURANCE THAT
MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN
INVESTMENT IN
A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF
DIVIDENDS
AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES.
INVESTMENT ADVISER
Fidelity Management & Research
Company
Boston, MA
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
William J. Hayes, Vice President
Neal Miller, Vice President
Gary L. French, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
Arthur S. Loring, Secretary
Robert H. Morrison, Manager,
Security Transactions
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox*
Phyllis Burke Davis*
Richard J. Flynn*
Edward C. Johnson 3d
E. Bradley Jones*
Donald J. Kirk*
Peter S. Lynch
Edward H. Malone*
Marvin Mann*
Gerald C. McDonough*
Thomas R. Williams*
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Co.
Boston, MA
CUSTODIAN
Chase Manhattan Bank, N.A.
New York, NY
FIDELITY GROWTH FUNDS
Blue Chip Growth Fund
Capital Appreciation Fund
Contrafund
Disciplined Equity Fund
Dividend Growth Fund
Emerging Growth Fund
Fidelity Fifty
Growth Company Fund
Low-Priced Stock Fund
Magellan(registered trademark) Fund
Mid-Cap Stock Fund
New Millennium(trademark) Fund
OTC Portfolio
Retirement Growth Fund
Small Cap Growth Fund
Stock Selector
Trend Fund
Value Fund
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
(registered trademark)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE
