(2_FIDELITY_LOGOS)FIDELITY
EMERGING GROWTH
FUND
SEMIANNUAL REPORT
MAY 31, 1998
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 18 STATEMENTS OF ASSETS AND LIABILITIES,
OPERATIONS, AND CHANGES IN NET ASSETS,
AS WELL AS FINANCIAL HIGHLIGHTS.
NOTES 22 NOTES TO THE FINANCIAL STATEMENTS.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION
OF THE SHAREHOLDERS OF THE 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,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT
INVESTED.
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.
To reduce expenses and demonstrate respect for our environment, we
have initiated a project through which we will begin eliminating
duplicate copies of most financial reports and prospectuses to most
households, even if they have more than one account in the fund. If
additional copies of financial reports, prospectuses or historical
account information are needed, please call 1-800-544-6666.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
While low interest rates and subdued inflation provided support for
stock and bond markets in the U.S. during the first five months of
1998, concerns about continuing economic and political difficulties in
Asia colored their performance. The stock market reached record
heights due to stronger-than-expected corporate earnings, but
retreated at times when concerns surfaced about how the Asian
volatility would affect business prospects. The bond market benefited
from these retreats, as investors sought alternatives offering lower
volatility.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will
greatly reduce your vulnerability to any single decline. We know from
experience, for example, that stock prices have gone up over longer
periods of time, have significantly outperformed other types of
investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through
diversification. A stock mutual fund, for instance, is already
diversified, because it invests in many different companies. You can
increase your diversification further by investing in a number of
different stock funds, or in such other investment categories 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. Of course, it's important to
remember that there is no assurance that a money market fund will
achieve its goal of maintaining a stable net asset value of $1.00 per
share, and that these types of funds are neither insured nor
guaranteed by any agency of the U.S. government.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases.
If you have questions, please call us at 1-800-544-8888. We are
available 24 hours a day, seven days a week to provide you 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. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED MAY 31, 1998 PAST 6 PAST 1 PAST 5 LIFE OF
MONTHS YEAR YEARS FUND
FIDELITY EMERGING GROWTH 14.10% 26.70% 129.90% 361.29%
FIDELITY EMERGING GROWTH 10.68% 22.89% 123.00% 347.45%
(INCL. 3.00% SALES CHARGE)
RUSSELL 2000(REGISTERED TRADEMARK) 6.54% 21.24% 111.30% 292.00%
MID-CAP FUNDS AVERAGE 8.95% 23.16% 113.81% N/A
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years or since the fund started on December 28, 1990. For example, if
you had invested $1,000 in a fund that had a 5% return over the past
year, the value of your investment would be $1,050. You can compare
the fund's returns to the performance of the Russell 2000 Index - an
unmanaged index of 2,000 small capitalization stocks. To measure how
the fund's performance stacked up against its peers, you can compare
it to the mid-cap funds average, which reflects the performance of
mutual funds with similar objectives tracked by Lipper Analytical
Services, Inc. The past six months average represents a peer group of
309 mutual funds. These benchmarks include reinvested dividends and
capital gains, if any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED MAY 31, 1998 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
FIDELITY EMERGING GROWTH 26.70% 18.12% 22.86%
FIDELITY EMERGING GROWTH 22.89% 17.40% 22.35%
(INCL. 3.00% SALES CHARGE)
RUSSELL 2000 21.24% 16.14% 20.19%
MID-CAP FUNDS AVERAGE 23.16% 16.19% N/A
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year. (Note: Lipper calculates average annual total
returns by annualizing each fund's total return, then taking an
arithmetic average. This may produce a slightly different figure than
that obtained by averaging the cumulative total returns and
annualizing the result.)
$10,000 OVER LIFE OF FUND
Emerging Growth Russell 2000
00324 RS002
1990/12/28 9700.00 10000.00
1990/12/31 9758.20 10130.46
1991/01/31 11203.50 11046.59
1991/02/28 11804.90 12278.44
1991/03/31 12648.80 13142.71
1991/04/30 12580.90 13109.64
1991/05/31 13434.50 13734.51
1991/06/30 12493.60 12934.12
1991/07/31 13754.60 13387.99
1991/08/31 14647.00 13883.54
1991/09/30 14753.70 13992.25
1991/10/31 14967.10 14362.33
1991/11/30 14365.70 13698.05
1991/12/31 16305.88 14794.92
1992/01/31 16354.92 15993.70
1992/02/29 16104.38 16460.26
1992/03/31 15072.18 15903.11
1992/04/30 14621.22 15345.96
1992/05/31 14801.60 15550.02
1992/06/30 14060.02 14814.62
1992/07/31 14741.47 15330.10
1992/08/31 14280.49 14897.52
1992/09/30 14731.45 15241.09
1992/10/31 15753.63 15725.55
1992/11/30 16956.20 16928.86
1992/12/31 17668.44 17518.63
1993/01/31 18231.12 18111.57
1993/02/28 17527.13 17693.25
1993/03/31 18034.42 18267.39
1993/04/30 17899.83 17765.95
1993/05/31 19463.09 18552.08
1993/06/30 19659.79 18667.81
1993/07/31 19587.32 18925.55
1993/08/31 20343.07 19743.17
1993/09/30 20664.00 20300.32
1993/10/31 21160.93 20822.82
1993/11/30 20322.36 20137.48
1993/12/31 21180.19 20825.99
1994/01/31 21797.79 21478.95
1994/02/28 21673.66 21401.26
1994/03/31 20519.22 20271.33
1994/04/30 20606.11 20391.82
1994/05/31 19811.66 20162.84
1994/06/30 18421.37 19478.18
1994/07/31 19116.51 19798.20
1994/08/31 20519.22 20901.41
1994/09/30 20419.91 20831.43
1994/10/31 21400.57 20749.21
1994/11/30 20581.29 19911.22
1994/12/31 21142.37 20446.18
1995/01/31 20582.39 20188.21
1995/02/28 21540.58 21028.02
1995/03/31 22448.99 21390.17
1995/04/30 23208.08 21865.78
1995/05/31 24166.27 22241.75
1995/06/30 26841.73 23395.56
1995/07/31 30002.51 24743.19
1995/08/31 30425.60 25255.05
1995/09/30 31134.91 25706.06
1995/10/31 30761.59 24556.43
1995/11/30 30375.83 25588.16
1995/12/31 28741.54 26263.28
1996/01/31 29135.09 26235.14
1996/02/29 30883.45 27052.75
1996/03/31 30883.45 27603.43
1996/04/30 32853.63 29079.43
1996/05/31 34132.28 30225.37
1996/06/30 32827.53 28984.21
1996/07/31 29604.80 26452.63
1996/08/31 30857.36 27988.47
1996/09/30 33492.95 29082.24
1996/10/31 32631.82 28634.03
1996/11/30 34406.28 29813.87
1996/12/31 33282.38 30595.22
1997/01/31 35594.57 31206.66
1997/02/28 33771.24 30450.00
1997/03/31 31591.17 29013.19
1997/04/30 32304.65 29094.06
1997/05/31 35317.11 32330.77
1997/06/30 36321.26 33716.31
1997/07/31 40033.98 35285.20
1997/08/31 39558.33 36092.57
1997/09/30 42015.87 38734.34
1997/10/31 38858.07 37032.78
1997/11/30 39214.81 36793.26
1997/12/31 39755.16 37437.25
1998/01/31 39504.82 36846.43
1998/02/28 43283.98 39570.96
1998/03/31 45753.03 41202.97
1998/04/30 46492.06 41430.96
1998/05/29 44745.25 39199.62
IMATRL PRASUN SHR__CHT 19980531 19980605 150234 R00000000000093
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Emerging Growth Fund on December 28, 1990, when
the fund started, and the current 3.00% sales charge was paid. As the
chart shows, by May 31, 1998, the value of the investment would have
grown to $44,745 - a 347.45% increase on the initial investment. For
comparison, look at how the Russell 2000 Index did over the same
period. With dividends and capital gains, if any, reinvested, the same
$10,000 would have grown to $39,200 - a 292.00% 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
long-term growth and
short-term volatility. 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
Although renewed concerns about
economic difficulties in Asia late
in the period tempered the rapid
growth of U.S. equity markets, the
Standard & Poor's 500 Index - a
measure of the U.S. stock market
- - still managed to return 15.06%
during the six months that ended
May 31, 1998. As feared, some
U.S. corporations with business
exposure to Asia did report
disappointing earnings and their
stocks were harshly punished.
However, investors seemed to
adopt a new attitude - one that
overlooked short-term troubles
and focused on longer-term
growth - helping many of these
stocks to rebound quickly. In
addition, the continued strength of
the U.S. economy, combined with
low interest rates and low inflation,
seemed to buoy the stock market
for much of the period. The
upward climb of the stock market
stagnated in mid- and late May
when investors were inundated
with worrisome news about the
stability of Asian markets.
Specifically, the president of
Indonesia resigned amidst civil
strife and a battle over nuclear
testing erupted between Pakistan
and India. Concerns about falling
demand for U.S. exports
particularly hurt technology
companies, especially during the
intensified investigation of
Microsoft by the Justice
Department in May. As a result of
concerns about these tumultuous
events and their potential impact
on the U.S. economy, the Dow
Jones Industrial Average produced
a negative return in May for the first
time in 1998 - although the Dow
was still up 13.29% for the first five
months of 1998.
An interview with Erin Sullivan, Portfolio Manager of Fidelity
Emerging Growth Fund
Q. HOW DID THE FUND PERFORM, ERIN?
A. For the six-month period that ended May 31, 1998, the fund had a
total return of 14.10%. In comparison, the mid-cap funds average as
measured by Lipper Analytical Services returned 8.95%, while the
Russell 2000 Index produced a return of 6.54%. For the 12 months that
ended May 31, 1998, the fund produced a total return of 26.70%, while
the mid-cap funds average returned 23.16% and the Russell 2000 was up
21.24%.
Q. WHY DO YOU THINK THE FUND OUTPERFORMED ITS PEER GROUP AND INDEX?
A. My technology and health care holdings generally did quite well,
and they comprised over half of the portfolio. In technology, the
share price of America Online (AOL) was up more than 100% during the
six-month period. AOL continued to benefit from the booming public
interest in the Internet. The company experienced
stronger-than-expected subscriber growth, advertising revenue and
earnings. In health care, McKesson, a pharmaceutical distributor and
the fund's largest holding, recently hired a new chief executive
officer who has had a very positive impact on the company's earnings.
Health care and pharmaceutical companies tend to be more stable
performers when there is stock market volatility due to economic
uncertainty. We recently saw such uncertainty caused by the Asian
economic crisis.
Q. HOW DO YOU PICK STOCKS?
A. Using a bottom-up process - looking at the merits of individual
stocks rather than trying to take advantage of economic trends - I'm
looking for companies that can achieve earnings growth driven by
strong revenue growth. I favor companies whose revenue growth is
fueled by rising unit sales. Perhaps a company has an inherent cost or
quality advantage that can lead to marketshare gains. Often, the
company is on the verge of a new product cycle. For example, I
recently purchased shares in Medtronic, a medical device company based
in Minneapolis. I thought the company was very attractive because it
was in the process of introducing a new technology in its core
pacemaker division. Its other new product is a next-generation
defibrillator that should be out this fall. I was also very excited
about a new device that it is planning on introducing that treats
patients with congestive heart failure.
Q. WHAT FACTORS HELD BACK THE FUND'S PERFORMANCE?
A. The biggest negative during the time frame was my decision to
underweight financial stocks, because they continued to do well during
the period. My style is to look for very fast earnings growth, and it
was difficult to find financials that met that criteria. In addition,
the fund invests in many young, fast-growing companies that sell at
high price-to-earnings (P/E) multiples, meaning they trade at high
valuations relative to their current earnings. The valuations are high
because investors are willing to pay more for above-average earnings
growth. During times of market volatility - as seen recently with the
Asian economic crisis - these less-established companies with high P/E
ratios tended to be negatively impacted, as investors often gravitate
toward larger companies with long, established track records of
consistent earnings growth.
Q. WHAT WOULD YOU SAY IS ONE OF THE BIGGEST RISKS FACING INVESTORS IN
THIS FUND?
A. The biggest risk is that the companies in which I invest don't meet
earnings expectations. If a company misses its earnings projection in
a quarter, then the stock correction can be very swift and severe. I
try to review all of my holdings to see how they'll be impacted if the
economic environment deteriorates. Sometimes the market overreacts to
an earnings shortfall. Often, emerging growth companies come across
bumps in the road. If missed earnings are due to short-term issues,
that can represent an extremely attractive buying opportunity.
However, if a company misses its earnings due to poor execution or
strategic missteps, that's a different story.
Q. WHAT'S YOUR OUTLOOK?
A. I continue to see tremendous opportunities, particularly in health
care and technology. The country's aging population provides a
built-in demand for medical products and services. In technology, the
Year 2000 problem - reprogramming computers so that they'll read "00"
as 2000 and not 1900 - presents a great challenge, but it also creates
a concern that companies will have to scale back on other technology
spending. Because Asia remains a concern, I'm trying to focus on those
companies that have most of their business in strong economies such as
the U.S. and Europe.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
ERIN SULLIVAN ON WHY SHE
CONSIDERS MICROSOFT AN
"EMERGING GROWTH" STOCK:
"People think of Microsoft as a
more mature company because of
its success in the desktop computer
and operating software areas. But
its marketshare in the corporate
area has actually been very low.
When I think of emerging growth,
I think of companies on the verge
of new product cycles or companies
entering entirely new markets.
Microsoft's current growth
opportunities are enormous in the
large corporate market.
"Up until now, Microsoft's products
have worked well in smaller-scale
work group environments. However,
the company has been working hard
to make its products more robust,
making them able to serve thousands
of users in a corporate environment.
It plans to roll out Microsoft NT 5.0
in mid-1999, hoping that NT 5.0
helps it gain meaningful share in the
large enterprise market. At this
point, I think it has a significant
market opportunity, especially with
its fantastic track record of
continuing to release new products.
"The federal government's antitrust
action against the company certainly
has raised concerns, and there's no
way to predict the outcome. But
I've always looked for companies
that have effective management
teams that can capitalize on
opportunities in the marketplace.
Microsoft has certainly
demonstrated that capability."
FUND FACTS
GOAL: to increase the value of
the fund's shares by investing
in stocks of companies that are
seen to be in the developing
stage of their life cycle and
offer the potential for
accelerated growth
FUND NUMBER: 324
TRADING SYMBOL: FDEGX
START DATE: December 28, 1990
SIZE: as of May 31, 1998,
more than $2.1 billion
MANAGER: Erin Sullivan, since
1997; manager Fidelity
Select Software and Computer
Services Portfolio, January
1997 to June 1997: Fidelity
Select Retailing Portfolio,
1995-1997; joined Fidelity
in 1991
(checkmark)
INVESTMENT CHANGES
TOP TEN STOCKS AS OF MAY 31, 1998
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE STOCKS
6 MONTHS AGO
MCKESSON CORP. 7.1 3.5
BMC SOFTWARE, INC. 4.3 2.1
MEDTRONIC, INC. 4.3 0.4
CVS CORP. 4.1 2.3
MICROSOFT CORP. 4.0 2.0
GUIDANT CORP. 3.3 0.5
HEALTHSOUTH CORP. 3.1 3.4
WORLDCOM, INC. 2.3 0.9
PROFFITTS, INC. 2.1 1.6
SAFEWAY, INC. 2.1 1.1
TOP FIVE MARKET SECTORS AS OF MAY 31, 1998
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE MARKET SECTORS
6 MONTHS AGO
TECHNOLOGY 30.3 24.1
HEALTH 24.6 16.1
RETAIL & WHOLESALE 18.8 20.1
UTILITIES 5.3 4.7
MEDIA & LEISURE 4.6 4.3
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF MAY 31, 1998 * AS OF NOVEMBER 30, 1997 **
ROW: 1, COL: 1, VALUE: 4.4
ROW: 1, COL: 2, VALUE: 95.59999999999999
STOCKS 93.2%
SHORT-TERM
INVESTMENTS 6.8%
FOREIGN
INVESTMENTS 3.7%
STOCKS 95.6%
SHORT-TERM
INVESTMENTS 4.4%
FOREIGN
INVESTMENTS 3.9%
ROW: 1, COL: 1, VALUE: 6.8
ROW: 1, COL: 2, VALUE: 93.2
*
**
INVESTMENTS MAY 31, 1998 (UNAUDITED)
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES
COMMON STOCKS - 95.6%
SHARES VALUE (NOTE 1)
(000S)
AEROSPACE & DEFENSE - 0.2%
Gulfstream Aerospace Corp. (a) 100,000 $ 4,250
CONSTRUCTION & REAL ESTATE - 0.1%
BUILDING MATERIALS - 0.1%
Aavid Thermal Technologies, Inc. (a) 50,000 1,381
DURABLES - 1.1%
AUTOS, TIRES, & ACCESSORIES - 0.7%
Republic Industries, Inc. (a) 620,000 15,267
CONSUMER ELECTRONICS - 0.3%
General Motors Corp. Class H 120,000 5,940
HOME FURNISHINGS - 0.1%
Linens'n Things, Inc. (a) 60,000 1,928
TOTAL DURABLES 23,135
ENERGY - 0.9%
ENERGY SERVICES - 0.6%
BJ Services Co. 150,000 4,903
R&B Falcon Corp. (a) 49,638 1,424
Varco International, Inc. (a) 55,200 1,439
Western Atlas, Inc. 65,000 5,627
13,393
OIL & GAS - 0.3%
Cooper Cameron Corp. (a) 95,200 5,664
EVI Weatherford, Inc. 29,450 1,489
7,153
TOTAL ENERGY 20,546
FINANCE - 2.0%
BANKS - 1.1%
North Fork Bancorp., Inc. 582,000 14,003
Providian Financial Corp. 110,000 6,999
Zions Bancorp 70,000 3,570
24,572
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - CONTINUED
CLOSED-END INVESTMENT COMPANY - 0.1%
Sirrom Capital Corp. 100,000 $ 2,663
CREDIT & OTHER FINANCE - 0.3%
Newcourt Credit Group, Inc. 130,000 6,380
INSURANCE - 0.4%
Progressive Corp. 53,300 7,349
SAVINGS & LOANS - 0.1%
Washington Mutual, Inc. 30,000 2,119
TOTAL FINANCE 43,083
HEALTH - 24.6%
DRUGS & PHARMACEUTICALS - 3.7%
American Home Products Corp. 200,000 9,663
Amgen, Inc. (a) 100,000 6,050
Elan Corp. PLC ADR (a) 350,600 21,451
Lilly (Eli) & Co. 271,700 16,693
Merck & Co., Inc. 100,000 11,706
Schering-Plough Corp. 150,000 12,553
Twinlab Corp. (a) 20,000 743
78,859
MEDICAL EQUIPMENT & SUPPLIES - 16.4%
Arterial Vascular Engineering, Inc. (a) 88,300 2,729
Biomet, Inc. 25,600 739
Boston Scientific Corp. 100,000 6,375
Cyberonics Inc. (a) 162,500 1,848
Guidant Corp. 1,112,000 71,655
McKesson Corp. 1,963,100 153,367
Medtronic, Inc. 1,672,900 93,055
Sofamor/Danek Group, Inc. (a) 32,300 2,685
Steris Corp. (a) 140,000 8,750
Stryker Corp. 50,000 2,038
Thermo Cardiosystems, Inc. (a) 456,300 10,267
353,508
MEDICAL FACILITIES MANAGEMENT - 4.5%
Columbia/HCA Healthcare Corp. 200,000 6,537
Coventry Health Care, Inc. (a) 10,400 151
HEALTHSOUTH Corp. (a) 2,331,100 66,145
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
HEALTH - CONTINUED
MEDICAL FACILITIES MANAGEMENT - CONTINUED
Health Management Associates, Inc. Class A (a) 185,400 $ 5,527
Medquist, Inc. (a) 58,800 2,580
Universal Health Services, Inc. Class B (a) 160,000 8,800
Wellpoint Health Networks, Inc. (a) 105,000 6,825
96,565
TOTAL HEALTH 528,932
INDUSTRIAL MACHINERY & EQUIPMENT - 4.2%
ELECTRICAL EQUIPMENT - 0.5%
Alcatel Alsthom Compagnie Generale d'Electricite SA 40,000 8,548
Loral Space & Communications Ltd. (a) 61,800 1,568
10,116
INDUSTRIAL MACHINERY & EQUIPMENT - 1.7%
ASM Lithography Holding NV (a) 27,800 1,065
Tyco International Ltd. 657,322 36,399
37,464
POLLUTION CONTROL - 2.0%
USA Waste Services, Inc. (a) 913,025 43,083
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 90,663
MEDIA & LEISURE - 4.6%
BROADCASTING - 2.3%
American Radio Systems Corp. Class A (a) 22,900 1,514
CBS Corp. 100,000 3,175
Cablevision Systems Corp. Class A (a) 80,000 4,430
Clear Channel Communications, Inc. (a) 190,000 18,217
Comcast Corp. Class A special 50,000 1,714
PanAmSat Corp. (a) 59,300 3,239
TCA Cable TV, Inc. 60,000 3,656
Tele-Communications, Inc. (TCI Group), Series A 100,000 3,431
Tele-Communications, Inc. (TCI Ventures Group),
Series A, 50,000 870
Time Warner, Inc. 100,000 7,782
USA Networks, Inc. 39,400 965
48,993
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
MEDIA & LEISURE - CONTINUED
ENTERTAINMENT - 1.7%
Carnival Cruise Lines, Inc. Class A 130,000 $ 8,808
Premier Parks, Inc. (a) 535,600 28,454
37,262
PUBLISHING - 0.6%
ACNielsen Corp. (a) 110,000 2,839
Applied Graphics Technologies, Inc. (a) 69,000 3,329
Reader's Digest Association, Inc. (The) Class A (non-vtg.) 50,000
1,425
US WEST Media Group (a) 130,000 4,818
12,411
TOTAL MEDIA & LEISURE 98,666
NONDURABLES - 0.2%
FOODS - 0.2%
Keebler Foods Co. (a) 152,300 4,426
RETAIL & WHOLESALE - 18.8%
APPAREL STORES - 2.0%
Abercrombie & Fitch Co. 20,000 845
Payless ShoeSource, Inc. (a) 260,000 18,217
Ross Stores, Inc. 53,200 2,347
Stage Stores, Inc. (a) 283,000 13,195
TJX Companies, Inc. 152,800 7,143
Wet Seal, Inc. Class A (a) 25,000 750
42,497
DRUG STORES - 4.1%
CVS Corp. 1,267,748 88,974
GENERAL MERCHANDISE STORES - 5.8%
Consolidated Stores Corp. (a) 962,747 36,764
Dollar Tree Stores (a) 153,600 7,949
Elder-Beerman Stores Corp. (a) 33,500 838
Family Dollar Stores, Inc. 465,000 7,702
Meyer (Fred), Inc. (a) 490,000 21,070
Michaels Stores, Inc. (a) 210,000 6,287
Proffitts, Inc. (a) 1,149,175 45,105
125,715
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
RETAIL & WHOLESALE - CONTINUED
GROCERY STORES - 4.4%
Dominick's Supermarkets, Inc. (a) 238,700 $ 10,293
Giant Food, Inc. Class A 158,900 6,833
Great Atlantic & Pacific Tea Co., Inc. 186,000 5,952
Hannaford Brothers Co. 344,400 15,218
Kroger Co. (The) 150,000 6,441
Safeway, Inc. (a) 1,219,200 44,425
U.S. Foodservice, Inc. (a) 54,200 1,795
Winn-Dixie Stores, Inc. 100,000 4,069
95,026
RETAIL & WHOLESALE, MISCELLANEOUS - 2.5%
Bed Bath & Beyond, Inc. (a) 83,300 4,181
Best Buy Co., Inc. (a) 50,000 1,631
Borders Group, Inc. (a) 100,000 3,100
PC Connection, Inc. 140,000 2,013
Staples, Inc. (a) 210,950 5,300
Tandy Corp. 850,900 37,652
53,877
TOTAL RETAIL & WHOLESALE 406,089
SERVICES - 3.3%
ADVERTISING - 0.5%
Omnicom Group, Inc. 212,600 9,952
PRINTING - 0.0%
Schawk, Inc. Class A 50,000 750
SERVICES - 2.8%
AccuStaff, Inc. (a) 107,100 3,528
Borg Warner Security Corp. (a) 50,000 1,103
Computer Horizons Corp. (a) 664,250 22,190
First Consulting Group, Inc. (a) 639,900 14,218
Medaphis Corp. (a) 1,700 13
Medpartners, Inc. (a) 500,000 4,469
Pittston Co. (Brinks Group) 100,000 3,869
Robert Half International, Inc. (a) 51,900 2,627
Snyder Communications, Inc. (a) 190,000 7,659
59,676
TOTAL SERVICES 70,378
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - 30.3%
COMMUNICATIONS EQUIPMENT - 7.0%
Advanced Fibre Communication, Inc. (a) 100,000 $ 3,706
Ascend Communications, Inc. (a) 300,000 12,956
Aspect Telecommunications Corp. (a) 114,200 2,948
Ciena Corp. 250,000 13,000
Cisco Systems, Inc. (a) 530,000 40,080
DSC Communications Corp. 26,500 459
Inter-Tel, Inc. 104,800 1,968
Intermedia Communications, Inc. 100,000 7,413
Lucent Technologies, Inc. 240,000 17,025
Natural Microsystems (a) 20,700 443
Nokia Corp. AB sponsored ADR 200,000 12,988
Northern Telecom Ltd. 335,000 21,453
RELTEC Corp. (a) 50,000 1,838
Tekelec (a) 100,000 4,444
Tellabs, Inc. (a) 70,000 4,810
3Com Corp. 175,000 4,441
149,972
COMPUTER SERVICES & SOFTWARE - 19.4%
Affiliated Computer Services, Inc. Class A (a) 100,000 3,331
America Online, Inc. (a) 342,100 28,501
Aspect Development, Inc. 51,600 2,951
At Home Corp., Series A 10,000 348
BMC Software, Inc. (a) 2,021,600 93,120
Cambridge Technology Partners Massachusetts, Inc. (a) 696,800 34,949
Citrix Systems, Inc. (a) 150,000 7,828
Computer Associates International, Inc. 104,200 5,471
Compuware Corp. (a) 448,200 20,589
HBO & Co. 759,000 43,808
Henry (Jack) & Associates, Inc. 30,000 979
ICG Communications, Inc. (a) 40,000 1,210
International Network Services 155,000 4,858
Keane, Inc. (a) 765,000 34,328
Legato Systems, Inc. 50,000 1,431
Lycos, Inc. (a) 60,300 3,198
Macromedia, Inc. (a) 90,000 1,426
Manugistics Group, Inc. (a) 215,000 6,121
Microsoft Corp. (a) 1,027,700 87,162
Parametric Technology Corp. (a) 80,000 2,453
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
COMPUTER SERVICES & SOFTWARE - CONTINUED
Physician Computer Network, Inc. (a) 143,700 $ 54
Policy Management Systems Corp. (a) 63,300 5,222
Shared Medical Systems Corp. 20,000 1,455
Synopsys, Inc. 100,000 4,294
Technology Solutions, Inc. (a) 51,400 1,552
Veritas Software Corp. 100,000 4,034
Yahoo, Inc. (a) 162,200 17,761
418,434
COMPUTERS & OFFICE EQUIPMENT - 2.2%
Bay Networks, Inc. 350,000 9,691
EMC Corp. (a) 440,000 18,232
Fore Systems, Inc. (a) 225,000 4,950
Ingram Micro, Inc. Class A 250,000 11,016
Tech Data Corp. (a) 80,000 3,250
47,139
ELECTRONIC INSTRUMENTS - 0.1%
Applied Materials, Inc. (a) 100,000 3,200
ELECTRONICS - 1.6%
Applied Micro Circuits Corp. 28,400 639
Galileo Technology Ltd. 67,100 1,417
Maxim Integrated Products, Inc. 80,000 2,670
Micron Technology, Inc. (a) 61,100 1,440
PMC-Sierra, Inc. 57,900 2,254
Sanmina Corp. (a) 74,400 5,794
Solectron Corp. 50,000 2,069
Texas Instruments, Inc. 70,000 3,596
Uniphase Corp. 200,000 10,201
Xilinx, Inc. 100,000 3,803
33,883
TOTAL TECHNOLOGY 652,628
UTILITIES - 5.3%
CELLULAR - 0.0%
MGC Communications, Inc. 44,600 758
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
UTILITIES - CONTINUED
TELEPHONE SERVICES - 5.3%
ESAT Telecom Group PLC sponsored ADR 10,000 $ 300
EXCEL Communications, Inc. (a) 183,800 4,044
Global Telesystems Group, Inc. (a) 139,900 5,360
LCI International, Inc. (a) 210,000 7,862
MCI Communications Corp. 552,800 29,558
McLeodUSA, Inc. Class A 100,000 4,150
Qwest Communications International, Inc. 50,000 1,653
Tel-Save Holdings, Inc. (a) 351,800 6,948
U.S. LEC Corp. Class A 44,200 1,011
Winstar Communications, Inc. (a) 100,000 3,750
WorldCom, Inc. (a) 1,072,490 48,798
113,434
TOTAL UTILITIES 114,192
TOTAL COMMON STOCKS
(Cost $1,701,341) 2,058,369
CASH EQUIVALENTS - 4.4%
Taxable Central Cash Fund (b)
(Cost $95,371) 95,370,629 95,371
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $1,796,712) $ 2,153,740
LEGEND
(a) Non-income producing
(b) At period end, the seven-day yield of the Taxable Central Cash
Fund was 5.56%. The yield refers to the income earned by investing in
the fund over the seven-day period, expressed as an annual percentage.
INCOME TAX INFORMATION
At May 31, 1998, the aggregate cost of investment securities for
income tax purposes was $1,797,159,000. Net unrealized appreciation
aggregated $356,581,000, of which $405,749,000 related to appreciated
investment securities and $49,168,000 related to depreciated
investment securities.
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF ASSETS AND LIABILITIES
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNTS) MAY 31, 1998 (UNAUDITED)
ASSETS
INVESTMENT IN SECURITIES, AT VALUE (COST $1,796,712) - $ 2,153,740
SEE ACCOMPANYING SCHEDULE
FOREIGN CURRENCY HELD, AT VALUE (COST $118) 118
RECEIVABLE FOR INVESTMENTS SOLD 50,538
RECEIVABLE FOR FUND SHARES SOLD 2,113
DIVIDENDS RECEIVABLE 429
INTEREST RECEIVABLE 172
OTHER RECEIVABLES 914
TOTAL ASSETS 2,208,024
LIABILITIES
PAYABLE FOR INVESTMENTS PURCHASED $ 79,016
PAYABLE FOR FUND SHARES REDEEMED 2,937
ACCRUED MANAGEMENT FEE 1,437
OTHER PAYABLES AND ACCRUED EXPENSES 625
TOTAL LIABILITIES 84,015
NET ASSETS $ 2,124,009
NET ASSETS CONSIST OF:
PAID IN CAPITAL $ 1,611,777
ACCUMULATED NET INVESTMENT LOSS (6,538)
ACCUMULATED UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON 161,742
INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS 357,028
AND ASSETS AND LIABILITIES IN FOREIGN CURRENCIES
NET ASSETS, FOR 79,725 SHARES OUTSTANDING $ 2,124,009
NET ASSET VALUE, AND REDEMPTION PRICE PER SHARE $26.64
($2,124,009 (DIVIDED BY) 79,725 SHARES)
MAXIMUM OFFERING PRICE PER SHARE (100/97.00 OF $26.64) $27.46
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS SIX MONTHS ENDED MAY 31, 1998 (UNAUDITED)
INVESTMENT INCOME $ 2,773
DIVIDENDS
INTEREST 1,442
TOTAL INCOME 4,215
EXPENSES
MANAGEMENT FEE $ 6,613
BASIC FEE
PERFORMANCE ADJUSTMENT 1,380
TRANSFER AGENT FEES 2,590
ACCOUNTING FEES AND EXPENSES 386
NON-INTERESTED TRUSTEES' COMPENSATION 6
CUSTODIAN FEES AND EXPENSES 36
REGISTRATION FEES 71
AUDIT 39
LEGAL 9
INTEREST 4
MISCELLANEOUS 3
TOTAL EXPENSES BEFORE REDUCTIONS 11,137
EXPENSE REDUCTIONS (384) 10,753
NET INVESTMENT INCOME (LOSS) (6,538)
REALIZED AND UNREALIZED GAIN (LOSS)
NET REALIZED GAIN (LOSS) ON:
INVESTMENT SECURITIES (INCLUDING REALIZED GAIN OF $31 177,012
ON SALES OF INVESTMENTS IN AFFILIATED ISSUERS)
FOREIGN CURRENCY TRANSACTIONS (34) 176,978
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON 97,283
INVESTMENT SECURITIES
NET GAIN (LOSS) 274,261
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 267,723
FROM OPERATIONS
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
AMOUNTS IN THOUSANDS SIX MONTHS ENDED YEAR ENDED
MAY 31, 1998 NOVEMBER 30,
(UNAUDITED) 1997
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS $ (6,538) $ (11,509)
NET INVESTMENT INCOME (LOSS)
NET REALIZED GAIN (LOSS) 176,978 461,691
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) 97,283 (213,582)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 267,723 236,600
FROM OPERATIONS
DISTRIBUTIONS TO SHAREHOLDERS FROM NET REALIZED GAINS (404,242) (23,421)
SHARE TRANSACTIONS 171,385 471,709
NET PROCEEDS FROM SALES OF SHARES
REINVESTMENT OF DISTRIBUTIONS 398,238 23,095
COST OF SHARES REDEEMED (286,891) (669,838)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 282,732 (175,034)
FROM SHARE TRANSACTIONS
REDEMPTION FEES 89 351
TOTAL INCREASE (DECREASE) IN NET ASSETS 146,302 38,496
NET ASSETS
BEGINNING OF PERIOD 1,977,707 1,939,211
END OF PERIOD (INCLUDING ACCUMULATED NET INVESTMENT LOSS $ 2,124,009 $ 1,977,707
OF $6,538 AND 0, RESPECTIVELY)
OTHER INFORMATION
SHARES
SOLD 6,556 17,286
ISSUED IN REINVESTMENT OF DISTRIBUTIONS 17,704 913
REDEEMED (11,173) (25,113)
NET INCREASE (DECREASE) 13,087 (6,914)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED YEARS ENDED NOVEMBER 30,
MAY 31, 1998
(UNAUDITED) 1997 1996 1995 1994 1993
SELECTED PER-SHARE DATA
NET ASSET VALUE, $ 29.68 $ 26.37 $ 24.41 $ 16.58 $ 19.63 $ 16.92
BEGINNING OF PERIOD
INCOME FROM INVESTMENT
OPERATIONS
NET INVESTMENT (.08) D (.17) D (.07) D (.14) D (.07) D (.03)
INCOME (LOSS)
NET REALIZED AND 3.12 3.79 3.10 7.99 .34 3.29
UNREALIZED GAIN
(LOSS)
TOTAL FROM INVESTMENT 3.04 3.62 3.03 7.85 .27 3.26
OPERATIONS
LESS DISTRIBUTIONS
FROM NET INVESTMENT - - - - - (.02)
INCOME
FROM NET REALIZED GAIN (6.08) (.32) (1.08) (.04) (3.33) (.54)
TOTAL DISTRIBUTIONS (6.08) (.32) (1.08) (.04) (3.33) (.56)
REDEMPTION FEES ADDED - .01 .01 .02 .01 .01
TO PAID IN CAPITAL
NET ASSET VALUE, $ 26.64 $ 29.68 $ 26.37 $ 24.41 $ 16.58 $ 19.63
END OF PERIOD
TOTAL RETURN B, C 14.10% 13.98% 13.27% 47.59% 1.27% 19.85%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF $ 2,124 $ 1,978 $ 1,939 $ 1,332 $ 611 $ 634
PERIOD (IN MILLIONS)
RATIO OF EXPENSES TO 1.10% A 1.09% 1.10% 1.10% 1.04% 1.20%
AVERAGE NET ASSETS
RATIO OF EXPENSES TO 1.06% A, E 1.05% E 1.09% E 1.09% E 1.02% E 1.19% E
AVERAGE NET ASSETS
AFTER EXPENSE
REDUCTIONS
RATIO OF NET INVESTMENT (.64)% A (.60)% (.31)% (.66)% (.41)% (.20)%
INCOME (LOSS) TO
AVERAGE NET ASSETS
PORTFOLIO TURNOVER RATE 199% A 212% 105% 102% 180% 332%
AVERAGE COMMISSION $ .0453 $ .0408 $ .0405
RATE F
</TABLE>
A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 6 OF NOTES TO
FINANCIAL STATEMENTS).
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES
(SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS).
F FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY
FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES
EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION
RATE STRUCTURES MAY DIFFER.
NOTES TO FINANCIAL STATEMENTS
For the period ended May 31, 1998 (Unaudited)
1. 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 financial statements have been prepared in
conformity with generally accepted accounting principles which require
management to make certain estimates and assumptions at the date of
the financial statements. The following summarizes the significant
accounting policies of the 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 with
remaining maturities of sixty days or less for which quotations are
not readily available are valued at amortized cost or original cost
plus accrued interest, both of which approximate current value.
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.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
date and settlement on purchases and sales of securities. The effects
of changes in foreign currency exchange rates on investments in
securities 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 substantially 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 securities where the
ex-dividend date may have passed, are recorded as soon as the fund is
informed of the ex-dividend date. Non-cash dividends included in
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
INVESTMENT INCOME - CONTINUED
dividend income, if any, are recorded at the fair market value of the
securities received. Interest income, which includes accretion of
original issue discount, 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
among the funds in the trust.
DEFERRED TRUSTEE COMPENSATION. Under a Deferred Compensation Plan (the
Plan) non-interested Trustees must defer receipt of a portion of, and
may elect to defer receipt of an additional portion of, their annual
compensation. Under the Plan, deferred amounts are treated as though
equivalent dollar amounts had been invested in shares of a
cross-section of Fidelity funds, including shares of the fund.
Deferred amounts remain in the fund until distributed in accordance
with the Plan.
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, which may result in
distribution reclassifications, are primarily due to differing
treatments for litigation proceeds, net operating losses and losses
deferred due to wash sales and excise tax regulations. 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.
Accumulated net investment loss and accumulated undistributed net
realized gain (loss) on investments and foreign currency transactions
may include temporary book and tax basis differences that will reverse
in a subsequent period. Any taxable income or gain remaining at fiscal
year end is distributed in the following year.
SHORT-TERM TRADING (REDEMPTION) FEES. Shares held in the fund less
than 90 days are subject to a short-term trading fee equal to .75% of
the proceeds of the redeemed shares. The fee, which is retained by the
fund, 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.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the contracts'
terms. The U.S. dollar value of foreign currency contracts is
determined using
2. OPERATING POLICIES - CONTINUED
FOREIGN CURRENCY CONTRACTS - CONTINUED
contractual currency exchange rates established at the time of each
trade.
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 Fidelity Management & Research Company
(FMR), may transfer uninvested cash balances into one or more joint
trading accounts. These balances are invested in one or more
repurchase agreements for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are
marked-to-market daily and maintained at a value at least equal to the
principal amount of the repurchase agreement (including accrued
interest). FMR, the fund's investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
TAXABLE CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by
the SEC, the fund may invest in the Taxable Central Cash Fund (the
Cash Fund) managed by Fidelity Investments Money Management, Inc.,
(formerly FMR Texas, Inc.) an affiliate of FMR. The Cash Fund is an
open-end money market fund available only to investment companies and
other accounts managed by FMR and its affiliates. The Cash Fund seeks
preservation of capital, liquidity, and current income by investing in
U.S. Treasury securities and repurchase agreements for these
securities. Income distributions from the Cash Fund are declared daily
and paid monthly from net interest income. Income distributions earned
by the fund are recorded as interest income in the accompanying
financial statements.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $1,972,998,000 and $1,978,296,000, respectively.
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 .2500% to
.5200% for the period. The annual individual fund fee rate is .35%. In
the event that these rates were lower than the contractual rates in
effect during the period, FMR voluntarily implemented the above rates,
as they resulted in the same or a lower management fee. The basic fee
is subject to a performance adjustment (up to a maximum of
(plus/minus).20%
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
of the fund's average net assets over the performance period) 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 annualized rate of .79% 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 $273,000 on sales of shares of the fund of which
$1,000 was paid to securities dealers, banks and other financial
institutions.
TRANSFER AGENT FEES. Fidelity Service Company, Inc. (FSC), an
affiliate of FMR, is the fund's transfer, dividend disbursing and
shareholder servicing agent. FSC receives account fees and asset-based
fees that vary according to account size and type of account. FSC pays
for typesetting, printing and mailing of all shareholder reports,
except proxy statements. For the period, the transfer agent fees were
equivalent to an annualized rate of .26% of average net assets.
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 $389,000 for the
period.
5. 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 period for which loans were outstanding amounted
to $10,798,000 and $6,672,000, respectively. The weighted average
interest rate was 6.03%.
6. 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 $347,000 under this arrangement.
In addition, the fund has entered into arrangements with its custodian
and transfer agent whereby credits realized as a result of uninvested
cash balances were used to reduce a portion of the fund's expenses.
During the period, the fund's custodian and transfer agent fees were
reduced by $2,000 and $35,000, respectively, under these arrangements.
7. 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 during the period
with companies which are or were affiliates are as follows:
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES
AMOUNTS IN THOUSANDS PURCHASE SALES DIVIDEND VALUE
AFFILIATE COST COST INCOME
Gadzooks, Inc. $ - $ 2,299 $ - $ -
MANAGING YOUR INVESTMENTS
Fidelity offers several ways to conveniently manage your personal
investments via your telephone or PC. You can access your account
information, conduct trades and research your investments 24 hours a
day.
BY PHONE
Fidelity TouchTone Xpress(registered trademark) provides a single
toll-free number to access account balances, positions, quotes and
trading. It's easy to navigate the service, and on your first call,
the system will help you create a personal identification number (PIN)
for security.
(PHONE_GRAPHIC)TOUCHTONE XPRESS
1-800-544-5555
PRESS
For mutual fund and brokerage trading.
For quotes.*
For account balances and holdings.
To review orders and mutual
fund activity.
To change your PIN.
To speak to a Fidelity representative.
0
*
BY PC
Fidelity's Web site on the Internet provides a wide range of
information, including daily financial news, fund performance,
interactive planning tools and news about Fidelity products and
services.
(COMPUTER_GRAPHIC)FIDELITY'S WEB SITE
WWW.FIDELITY.COM
If you are not currently on the Internet, call Fidelity at
1-800-544-7272 for significant savings on Web access from internetMCI.
SM
(COMPUTER_GRAPHIC)
FIDELITY ON-LINE XPRESS+
TM
Fidelity On-line Xpress+ software for Windows combines comprehensive
portfolio management capabilities, securities trading and access to
research and analysis tools . . . all on your desktop. Call Fidelity
at 1-800-544-7272 or visit our Web site for more information on how to
manage your investments via your PC.
* 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 VISIT FIDELITY
For directions and hours,
please call 1-800-544-9797.
ARIZONA
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CALIFORNIA
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CONNECTICUT
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GEORGIA
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HAWAII
700 Bishop Street
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ILLINOIS
One North Franklin Street
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INDIANA
4729 East 82nd Street
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MAINE
3 Canal Plaza
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MARYLAND
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470 Boylston Street
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300 Granite Street
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280 North Woodward Ave.
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MINNESOTA
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MISSOURI
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8885 Ladue Road
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150 Essex Street
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56 South Street
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501 Route 17, South
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1055 Franklin Avenue
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350 Park Avenue
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NORTH CAROLINA
4611 Sharon Road
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2200 West Main Street
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OHIO
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TENNESSEE
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TEXAS
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UTAH
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VIRGINIA
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WASHINGTON
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1900 K Street, N.W.
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WISCONSIN
595 North Barker Road
Brookfield, 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)MAKING CHANGES
TO YOUR ACCOUNT
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(LETTER_GRAPHIC)FOR NON-RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
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OVERNIGHT EXPRESS
Fidelity Investments
2300 Litton Lane - KH1A
Hebron, KY 41048
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6I
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
(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
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6R
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research
(U.K.) Inc., London, England
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Abigail P. Johnson, Vice President
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
ADVISORY BOARD
J. Gary Burkhead
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Company, Inc.
Boston, MA
* INDEPENDENT TRUSTEES
CUSTODIAN
Brown Brothers Harriman & Co.
Boston, MA
FIDELITY'S GROWTH FUNDS
Blue Chip Growth Fund
Capital Appreciation Fund
Contrafund
Contrafund II
Disciplined Equity Fund
Dividend Growth Fund
Emerging Growth Fund
Export and Multinational Fund
Fidelity Fifty
Growth Company Fund
Large Cap Stock Fund
Low-Priced Stock Fund
Magellan(registered trademark) Fund
Mid-Cap Stock Fund
New Millennium(registered trademark) Fund
OTC Portfolio
Retirement Growth Fund
Small Cap Selector
Small Cap Stock Fund
Stock Selector
TechnoQuant Growth Fund
SM
Trend Fund
Value Fund
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Exchanges/Redemptions 1-800-544-7777
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)
TouchTone Xpress (registered trademark) 1-800-544-5555
AUTOMATED LINE FOR QUICKEST SERVICE
FIDELITY
(REGISTERED TRADEMARK)
GROWTH COMPANY
FUND
SEMIANNUAL REPORT
MAY 31, 1998
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 22 STATEMENTS OF ASSETS AND LIABILITIES,
OPERATIONS, AND CHANGES IN NET ASSETS,
AS WELL AS FINANCIAL HIGHLIGHTS.
NOTES 26 NOTES TO THE FINANCIAL STATEMENTS.
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,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT
INVESTED.
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.
To reduce expenses and demonstrate respect for our environment, we
have initiated a project through which we will begin eliminating
duplicate copies of most financial reports and prospectuses to most
households, even if they have more than one account in the fund. If
additional copies of financial reports, prospectuses or historical
account information are needed, please call 1-800-544-6666.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
While low interest rates and subdued inflation provided support for
stock and bond markets in the U.S. during the first five months of
1998, concerns about continuing economic and political difficulties in
Asia colored their performance. The stock market reached record
heights due to stronger-than-expected corporate earnings, but
retreated at times when concerns surfaced about how the Asian
volatility would affect business prospects. The bond market benefited
from these retreats, as investors sought alternatives offering lower
volatility.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will
greatly reduce your vulnerability to any single decline. We know from
experience, for example, that stock prices have gone up over longer
periods of time, have significantly outperformed other types of
investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through
diversification. A stock mutual fund, for instance, is already
diversified, because it invests in many different companies. You can
increase your diversification further by investing in a number of
different stock funds, or in such other investment categories 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. Of course, it's important to
remember that there is no assurance that a money market fund will
achieve its goal of maintaining a stable net asset value of $1.00 per
share, and that these types of funds are neither insured nor
guaranteed by any agency of the U.S. government.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases.
If you have questions, please call us at 1-800-544-8888. We are
available 24 hours a day, seven days a week to provide you 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. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED MAY 31, 1998 PAST 6 PAST 1 PAST 5 PAST 10
MONTHS YEAR YEARS YEARS
FIDELITY GROWTH COMPANY 8.23% 18.22% 120.48% 510.99%
S&P 500 (REGISTERED TRADEMARK) 15.06% 30.69% 172.18% 451.71%
GROWTH FUNDS AVERAGE 11.98% 25.86% 133.03% 367.76%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years or 10 years. For example, if you had invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment
would be $1,050. You can compare the fund's returns to the performance
of the Standard & Poor's 500 Index - a widely recognized, unmanaged
index of common stocks. To measure how the fund's performance stacked
up against its peers, you can compare it to the growth funds average,
which reflects the performance of mutual funds with similar objectives
tracked by Lipper Analytical Services, Inc. The past six months
average represents a peer group of 970 mutual funds. These benchmarks
include reinvested dividends and capital gains, if any, and exclude
the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED MAY 31, 1998 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
FIDELITY GROWTH COMPANY 18.22% 17.13% 19.84%
S&P 500 30.69% 22.17% 18.62%
GROWTH FUNDS AVERAGE 25.86% 18.06% 16.20%
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year. (Note: Lipper calculates average annual total
returns by annualizing each fund's total return, then taking an
arithmetic average. This may produce a slightly different figure than
that obtained by averaging the cumulative total returns and
annualizing the result.)
$10,000 OVER 10 YEARS
Growth Company S&P 500
00025 SP001
1988/05/31 10000.00 10000.00
1988/06/30 10847.83 10459.00
1988/07/31 10623.19 10419.26
1988/08/31 10188.41 10065.00
1988/09/30 10760.87 10493.77
1988/10/31 10644.93 10785.50
1988/11/30 10500.00 10631.26
1988/12/31 10950.35 10817.31
1989/01/31 11716.88 11609.14
1989/02/28 11696.19 11320.07
1989/03/31 12097.71 11583.83
1989/04/30 12923.06 12185.03
1989/05/31 13934.30 12678.52
1989/06/30 13428.68 12606.26
1989/07/31 14328.39 13744.60
1989/08/31 14915.80 14013.99
1989/09/30 15339.63 13956.54
1989/10/31 15183.48 13632.75
1989/11/30 15250.40 13910.85
1989/12/31 15510.22 14244.71
1990/01/31 14329.74 13288.89
1990/02/28 14960.97 13460.32
1990/03/31 15764.35 13817.02
1990/04/30 15534.82 13471.59
1990/05/31 17166.18 14785.07
1990/06/30 17362.92 14684.54
1990/07/31 16821.87 14637.54
1990/08/31 15075.74 13314.31
1990/09/30 13739.50 12665.90
1990/10/31 13805.08 12611.44
1990/11/30 15280.68 13426.14
1990/12/31 16067.67 13800.73
1991/01/31 17879.38 14402.44
1991/02/28 19035.27 15432.22
1991/03/31 20068.19 15805.67
1991/04/30 19887.84 15843.61
1991/05/31 20945.36 16528.05
1991/06/30 19535.34 15771.07
1991/07/31 21084.72 16506.00
1991/08/31 21994.67 16897.19
1991/09/30 21863.51 16615.01
1991/10/31 21814.32 16837.65
1991/11/30 21002.74 16159.09
1991/12/31 23833.22 18007.69
1992/01/31 24101.41 17672.75
1992/02/29 24306.19 17902.49
1992/03/31 23050.81 17553.40
1992/04/30 22605.64 18069.47
1992/05/31 22578.93 18158.01
1992/06/30 21777.63 17887.45
1992/07/31 22552.22 18619.05
1992/08/31 21937.89 18237.36
1992/09/30 22285.12 18452.56
1992/10/31 23487.08 18517.14
1992/11/30 25045.17 19148.58
1992/12/31 25726.26 19384.11
1993/01/31 26351.07 19546.93
1993/02/28 25614.69 19812.77
1993/03/31 26528.17 20230.82
1993/04/30 26239.21 19741.23
1993/05/31 27711.96 20270.30
1993/06/30 27814.50 20329.08
1993/07/31 27367.08 20247.77
1993/08/31 28485.62 21015.16
1993/09/30 29287.25 20853.34
1993/10/31 29688.06 21285.00
1993/11/30 28811.87 21082.80
1993/12/31 29891.23 21337.90
1994/01/31 30860.83 22063.39
1994/02/28 30365.24 21465.47
1994/03/31 28950.74 20529.57
1994/04/30 29291.46 20792.35
1994/05/31 29126.26 21133.35
1994/06/30 27784.04 20615.58
1994/07/31 28424.18 21291.77
1994/08/31 29869.65 22164.73
1994/09/30 29270.81 21621.70
1994/10/31 30220.69 22108.19
1994/11/30 29167.56 21303.01
1994/12/31 29226.31 21618.93
1995/01/31 28904.67 22179.51
1995/02/28 30105.46 23043.84
1995/03/31 31284.80 23723.87
1995/04/30 32635.69 24422.54
1995/05/31 33793.59 25398.71
1995/06/30 36302.38 25988.72
1995/07/31 39004.15 26850.50
1995/08/31 39486.61 26917.90
1995/09/30 40601.63 28053.83
1995/10/31 40376.48 27953.68
1995/11/30 41191.30 29180.85
1995/12/31 40803.72 29742.87
1996/01/31 41791.78 30755.32
1996/02/29 42764.47 31040.42
1996/03/31 43092.47 31339.34
1996/04/30 44427.10 31801.28
1996/05/31 45648.62 32621.44
1996/06/30 45026.55 32745.72
1996/07/31 42266.82 31299.02
1996/08/31 43262.13 31959.11
1996/09/30 46214.13 33757.77
1996/10/31 46417.72 34688.81
1996/11/30 49245.31 37310.94
1996/12/31 47661.35 36571.81
1997/01/31 50457.44 38856.82
1997/02/28 49407.22 39161.45
1997/03/31 46362.78 37552.31
1997/04/30 48097.41 39794.18
1997/05/31 51684.65 42216.85
1997/06/30 53643.48 44108.17
1997/07/31 58245.53 47617.85
1997/08/31 56074.31 44950.30
1997/09/30 58776.54 47412.23
1997/10/31 55389.90 45828.66
1997/11/30 56451.91 47950.07
1997/12/31 56673.23 48773.37
1998/01/31 57122.10 49312.81
1998/02/28 61905.40 52869.25
1998/03/31 63927.07 55576.68
1998/04/30 63609.94 56135.78
1998/05/29 61099.37 55170.81
IMATRL PRASUN SHR__CHT 19980531 19980605 151216 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Growth Company Fund on May 31, 1988. As the chart
shows, by May 31, 1998 the value of the investment would have grown to
$61,099 - a 510.99% increase on the initial investment. For
comparison, look at how the Standard & Poor's 500 Index did over the
same period. With dividends and capital gains, if any, reinvested, the
same $10,000 would have grown to $55,171 - a 451.71% 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
long-term growth and
short-term volatility. 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
Although renewed concerns about
economic difficulties in Asia late
in the period tempered the rapid
growth of U.S. equity markets, the
Standard & Poor's 500 Index - a
measure of the U.S. stock market -
still managed to return 15.06%
during the six months that ended
May 31, 1998. As feared, some
U.S. corporations with business
exposure to Asia did report
disappointing earnings and their
stocks were harshly punished.
However, investors seemed to
adopt a new attitude - one that
overlooked short-term troubles
and focused on longer-term growth
- - helping many of these stocks to
rebound quickly. In addition, the
continued strength of the U.S.
economy, combined with low
interest rates and low inflation,
seemed to buoy the stock market
for much of the period. The upward
climb of the stock market
stagnated in mid- and late May
when investors were inundated
with worrisome news about the
stability of Asian markets.
Specifically, the president of
Indonesia resigned amidst civil
strife and a battle over nuclear
testing erupted between Pakistan
and India. Concerns about falling
demand for U.S. exports
particularly hurt technology
companies, especially during the
intensified investigation of
Microsoft by the Justice
Department in May. As a result of
concerns about these tumultuous
events and their potential impact
on the U.S. economy, the Dow
Jones Industrial Average produced a
negative return in May for the first
time in 1998 - although the Dow
was still up 13.29% for the first five
months of 1998.
An interview with Steven Wymer, Portfolio Manager of Fidelity Growth
Company Fund
Q. HOW DID THE FUND PERFORM, STEVE?
A. It turned in some disappointing results. For the six months that
ended May 31, 1998, the fund returned 8.23%. This trailed the Standard
& Poor's 500 Index, which returned 15.06% over the same period. The
growth funds average, as tracked by Lipper Analytical Services, had a
six-month return of 11.98%. Over the past 12 months, the fund had a
return of 18.22%. Meanwhile, the S&P 500 and Lipper peer group had 12-
month returns of 30.69% and 25.86%, respectively.
Q. WHY DID THE FUND UNDERPERFORM ITS PEER GROUP, ESPECIALLY OVER THE
PAST SIX MONTHS?
A. Mostly because it held large positions in several individual stocks
that turned in disappointing results, specifically IKON Office
Solutions, CompUSA and Eli Lilly. Although it looked like a solid
investment opportunity, IKON continued to have trouble integrating its
business units. Computer retailer CompUSA was hurt because it
underestimated the popularity of inexpensive $1,000 personal computers
- - which are used mostly to gain access to the Internet - and assumed
customers would continue to buy its more expensive models. Lilly, one
of the world's largest pharmaceutical companies, did poorly when
Evista, its drug for breast cancer, got off to a slower-than-expected
start. All three stocks have been dropped from the fund's top 10.
Q. THE FUND ALSO UNDERPERFORMED THE S&P 500 OVER THE SIX-MONTH PERIOD.
WAS THIS DUE TO THE STOCK SELECTION PROBLEMS WE JUST DISCUSSED?
A. In part, yes. On top of that, the fund was hurt by its bias toward
mid- and small-capitalization stocks - a bias that typifies most
growth funds, since mid- and small-cap stocks tend to show more
dramatic earnings growth than large-cap stocks. As a result, the index
held a significantly larger percentage of large-cap stocks - the
best-performing stocks over the period - than the fund did.
Q. THE TECHNOLOGY SECTOR REMAINS THE MOST HEAVILY WEIGHTED SECTOR - AT
OVER 26% OF THE FUND. HOW DID IT PERFORM?
A. Pretty well, overall. However, this sector is made up of a very
large universe of stocks. Some of them, such as semiconductor
companies, did poorly and others, such as software and
Internet-related stocks, did well. I tried to focus on the niches that
were doing well. The fund's number one holding, software company
Microsoft, continued to produce strong revenues despite potential
anti-trust measures on the part of the U.S. Justice Department.
Q. YOU ADDED THREE NEW NAMES TO THE FUND'S TOP-10 HOLDINGS OVER THE
PAST SIX MONTHS. CAN WE DISCUSS THESE NEW STOCKS?
A. Sure. All three did well over the period. Dell Computer profited
from selling its computers directly to customers, as opposed to
selling them through stores. This allowed Dell to get its products out
sooner than most of its competitors. PepsiCo, which just spun off its
restaurant businesses and is now made up of just the soft drink
company and Frito-Lay, was helped by Frito-Lay's new line of
reduced-fat snacks made with Olestra, a fat substitute. United
HealthCare benefited from its ability to raise rates faster than
medical costs were going up.
Q. WHAT OTHER STOCKS WERE STRONG PERFORMERS?
A. Top-10 holding USA Waste Services had a strong year and was helped
by its merger with Waste Management. Another top name in the fund,
Wal-Mart, also continued to be a very profitable holding.
Q. STEVE, HOW DOES THE MARKET LOOK GOING FORWARD?
A. One of my main concerns is that the market's overall valuation
level seems somewhat high, which may make it difficult to find
inexpensive stocks. In addition, I'm not certain how the problems in
Asian markets will influence the U.S. and world economies, as well as
specific industries and companies. While it seems to me that the
market has discounted quite a bit of bad news out of Asia, it's still
unclear what the long-term impact will be.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
STEVEN WYMER DISCUSSES HIS
GROWTH FUND STRATEGY:
"My strategy is to invest in stocks
that grow their sales lines and
earnings faster than the market. I
tend to invest in several different
types of growth stocks: blue chip
growth stocks - generally larger
companies - with sales-growth
rates in the high single digits;
traditional growth stocks that
grow sales in the teens; and
emerging growth stocks with
sales-growth rates of 20% or more.
"I try to buy stocks in strong
industries or stocks of companies
that are themselves strong
franchises. One of the strongest
industries over the period was
pharmaceutical companies. Many
of them, including top-10 holding
Bristol-Myers Squibb, had strong
new drug development and a
sound pipeline of products. Some
mid-cap stocks such as drug
companies Forest Laboratories
and Medimmune looked good
based on their new products.
"In terms of companies that are
themselves strong franchises,
Microsoft is a great example.
No matter how the technology
industry is doing, this company
always seems to show the ability
to increase its revenues per
personal computer sold."
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
FUND NUMBER: 025
TRADING SYMBOL: FDGRX
START DATE: January 17, 1983
SIZE: As of May 31, 1998,
more than $10.1 billion
MANAGER: Steven Wymer,
since 1997; manager, Fidelity
Dividend Growth Fund,
1995-1997; assistant
manager, Fidelity OTC
Portfolio, January 1995-May
1995; manager, Fidelity
Select Chemicals Portfolio,
1993-
1994; assistant, Fidelity
Magellan Fund, 1992-1994;
manager Fidelity Select
Automotive Portfolio,
1990-1993; joined Fidelity
in 1989
(checkmark)
INVESTMENT CHANGES
TOP TEN STOCKS AS OF MAY 31, 1998
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE STOCKS
6 MONTHS AGO
MICROSOFT CORP. 3.4 2.1
USA WASTE SERVICES, INC. 3.0 2.5
DELL COMPUTER CORP. 2.3 0.6
GENERAL ELECTRIC CO. 2.1 2.0
NEXTEL COMMUNICATIONS, INC. CLASS A 2.0 1.4
PEPSICO, INC. 1.9 1.2
FANNIE MAE 1.8 1.9
WAL-MART STORES, INC. 1.7 1.3
BRISTOL-MYERS SQUIBB CO. 1.7 1.7
UNITED HEALTHCARE CORP. 1.5 0.8
TOP FIVE MARKET SECTORS AS OF MAY 31, 1998
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE MARKET SECTORS
6 MONTHS AGO
TECHNOLOGY 26.8 24.6
HEALTH 15.2 12.0
RETAIL & WHOLESALE 10.8 11.5
NONDURABLES 7.5 6.5
FINANCE 7.1 8.9
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF MAY 31, 1998 * AS OF NOVEMBER 30, 1997 **
ROW: 1, COL: 1, VALUE: 4.7
ROW: 1, COL: 2, VALUE: 95.3
STOCKS 94.9%
SHORT-TERM
INVESTMENTS 5.1%
FOREIGN
INVESTMENTS 3.7%
STOCKS 95.3%
SHORT-TERM
INVESTMENTS 4.7%
FOREIGN
INVESTMENTS 4.3%
ROW: 1, COL: 1, VALUE: 5.1
ROW: 1, COL: 2, VALUE: 94.90000000000001
*
**
INVESTMENTS MAY 31, 1998 (UNAUDITED)
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES
COMMON STOCKS - 95.3%
SHARES VALUE (NOTE 1)
(000S)
AEROSPACE & DEFENSE - 0.1%
Boeing Co. 308,920 $ 14,712
BASIC INDUSTRIES - 2.8%
CHEMICALS & PLASTICS - 1.4%
Avery Dennison Corp. 200,000 10,362
Minerals Technologies, Inc. 1,109,900 58,755
Monsanto Co. 405,500 22,455
Union Carbide Corp. 1,063,900 53,129
144,701
IRON & STEEL - 0.1%
Steel Dynamics, Inc. (a) 554,200 10,737
PACKAGING & CONTAINERS - 0.2%
Owens-Illinois, Inc. 300,000 13,481
Tupperware Corp. 78,800 2,128
15,609
PAPER & FOREST PRODUCTS - 1.1%
Kimberly-Clark Corp. 1,053,000 52,189
Unisource Worldwide, Inc. (c) 4,873,950 62,448
114,637
TOTAL BASIC INDUSTRIES 285,684
DURABLES - 1.2%
AUTOS, TIRES, & ACCESSORIES - 0.8%
AutoZone, Inc. (a) 2,100,000 69,825
Danaher Corp. 206,600 7,470
77,295
CONSUMER DURABLES - 0.2%
Minnesota Mining & Manufacturing Co. 200,000 18,525
HOME FURNISHINGS - 0.1%
Linens'n Things, Inc. (a) 497,000 15,966
TEXTILES & APPAREL - 0.1%
NIKE, Inc. Class B 121,000 5,566
Warnaco Group, Inc. Class A 75,000 3,094
8,660
TOTAL DURABLES 120,446
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
ENERGY - 2.9%
ENERGY SERVICES - 0.9%
Halliburton Co. 700,000 $ 33,163
Schlumberger Ltd. 682,700 53,293
86,456
OIL & GAS - 2.0%
Anadarko Petroleum Corp. 744,800 49,157
Apache Corp. 450,000 15,384
EEX Corp. (a) 1,275,000 12,591
Enron Oil & Gas Co. 1,275,000 25,898
Total SA sponsored ADR 1,454,900 90,658
Vintage Petroleum, Inc. 600,000 10,875
204,563
TOTAL ENERGY 291,019
FINANCE - 7.1%
BANKS - 1.2%
Citicorp 365,000 54,430
Norwest Corp. 497,800 19,352
State Street Corp. 125,000 8,617
Synovus Financial Corp. 75,000 1,683
U.S. Bancorp 425,400 16,644
Wells Fargo & Co. 50,000 18,075
118,801
CREDIT & OTHER FINANCE - 0.9%
American Express Co. 857,516 88,003
FEDERAL SPONSORED CREDIT - 2.5%
Freddie Mac 1,550,400 70,543
Fannie Mae 3,024,300 181,080
251,623
INSURANCE - 1.9%
Allmerica Financial Corp. 1,473,161 92,349
American International Group, Inc. 150,000 18,572
Marsh & McLennan Companies, Inc. 142,000 12,434
St. Paul Companies, Inc. (The) 1,090,000 48,369
SunAmerica, Inc. 550,000 26,743
198,467
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - CONTINUED
SAVINGS & LOANS - 0.1%
TCF Financial Corp. 200,000 $ 6,513
SECURITIES INDUSTRY - 0.5%
Schwab (Charles) Corp. 395,750 13,060
Travelers Group, Inc. (The) 700,099 42,706
55,766
TOTAL FINANCE 719,173
HEALTH - 15.2%
DRUGS & PHARMACEUTICALS - 8.8%
American Home Products Corp. 1,450,000 70,053
Amgen, Inc. (a) 200,000 12,100
Bristol-Myers Squibb Co. 1,569,600 168,732
Elan Corp. PLC ADR (a) 825,000 50,480
Forest Laboratories, Inc. (a) 2,003,200 66,106
Genzyme Corp. 425,000 11,634
Lilly (Eli) & Co. 1,825,000 112,123
Medimmune, Inc. (a) 1,100,000 54,862
Merck & Co., Inc. 622,400 72,860
Parexel International Corp. 147,500 4,425
Pfizer, Inc. 570,000 59,743
Scherer R.P. Corp. (a) 338,600 27,956
Schering-Plough Corp. 1,039,000 86,951
SmithKline Beecham PLC ADR 216,200 11,634
Warner-Lambert Co. 1,003,200 64,017
Watson Pharmaceuticals, Inc. (a) 475,000 20,781
Xoma, Inc. (a) 666 3
894,460
MEDICAL EQUIPMENT & SUPPLIES - 2.7%
Allegiance Corp. 250,000 12,500
Arterial Vascular Engineering, Inc. (a) 980,000 30,288
Cardinal Health, Inc. 509,200 45,382
Guidant Corp. 400,000 25,775
Johnson & Johnson 669,300 46,224
McKesson Corp. 757,800 59,203
Medtronic, Inc. 673,200 37,447
Sonus Pharmaceuticals, Inc. (a)(c) 849,500 11,893
Thermo Cardiosystems, Inc. (a) 335,000 7,538
276,250
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
HEALTH - CONTINUED
MEDICAL FACILITIES MANAGEMENT - 3.7%
Concentra Managed Care, Inc. (a) 425,000 $ 9,934
Coram Healthcare Corp. warrants 7/11/99 (a) 30,552 -
Covance, Inc. (a) 106,775 2,262
Coventry Health Care, Inc. (a) 798,100 11,573
Foundation Health Systems, Inc. Class A (a) 1,175,000 35,764
HEALTHSOUTH Corp. (a) 2,020,200 57,323
Humana, Inc. (a) 1,275,000 39,605
PacifiCare Health Systems, Inc. Class B 218,800 18,078
Tenet Healthcare Corp. (a) 500,000 17,500
United HealthCare Corp. 2,373,200 151,885
Wellpoint Health Networks, Inc. (a) 510,000 33,150
377,074
TOTAL HEALTH 1,547,784
INDUSTRIAL MACHINERY & EQUIPMENT - 6.6%
ELECTRICAL EQUIPMENT - 2.7%
Adtran, Inc. (a) 400,000 9,725
Ericsson (L.M.) Telephone Co. Class B ADR 1,000,000 27,875
General Electric Co. 2,600,000 216,775
General Instrument Corp. (a) 600,000 14,287
Glenayre Technologies, Inc. (a) 600,000 9,188
277,850
INDUSTRIAL MACHINERY & EQUIPMENT - 0.6%
Tyco International Ltd. 387,458 21,456
United States Filter Corp. (a) 1,125,000 34,242
55,698
POLLUTION CONTROL - 3.3%
Allied Waste Industries, Inc. (a) 575,000 15,237
American Disposal Services, Inc. (a) 265,000 10,376
Superior Services, Inc. (a) 395,000 12,097
USA Waste Services, Inc. (a) 6,399,125 301,959
339,669
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 673,217
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
MEDIA & LEISURE - 5.8%
BROADCASTING - 1.1%
CBS Corp. 700,000 $ 22,225
Clear Channel Communications, Inc. (a) 121,100 11,611
Metromedia Fiber Network, Inc. Class A 223,900 9,152
Tele-Communications, Inc. (TCI Group), Series A 475,000 16,298
Time Warner, Inc. 502,462 39,098
USA Networks, Inc. (a) 738,000 18,081
116,465
ENTERTAINMENT - 0.3%
Disney (Walt) Co. 295,500 33,428
LEISURE DURABLES & TOYS - 0.0%
Callaway Golf Co. 50,000 1,031
LODGING & GAMING - 0.2%
Mirage Resorts, Inc. (a) 979,000 20,376
PUBLISHING - 1.1.%
Cognizant Corp. 755,000 40,204
U S WEST Media Group (a) 1,798,200 66,646
106,850
RESTAURANTS - 3.1%
Apple South, Inc. 1,100,000 14,437
Brinker International, Inc. (a) 450,000 9,787
CKE Restaurants, Inc. 2,262,510 71,835
Cheesecake Factory, Inc. (a) 362,500 7,318
Landry's Seafood Restaurants, Inc. (a) 667,700 15,128
McDonald's Corp. 1,900,000 124,688
Papa John's International, Inc. (a) 610,600 25,416
Starbucks Corp. (a) 852,300 40,910
Tricon Global Restaurants, Inc. 155,910 4,843
314,362
TOTAL MEDIA & LEISURE 592,512
NONDURABLES - 7.5%
AGRICULTURE - 0.5%
DEKALB Genetics Corp. Class B 350,500 33,604
Delta & Pine Land Co. 325,000 13,914
47,518
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
NONDURABLES - CONTINUED
BEVERAGES - 2.9%
Anheuser-Busch Companies, Inc. 328,500 $ 15,090
Cadbury-Schweppes PLC Ord. 100,000 1,527
Coca-Cola Co. (The) 1,220,400 95,649
PepsiCo, Inc. 4,638,500 189,309
301,575
FOODS - 1.2%
Archer-Daniels-Midland Co. 1,292,500 24,396
Heinz (H.J.) Co. 350,000 18,572
Nabisco Holdings Corp. Class A 566,400 26,337
Quaker Oats Co. 225,000 12,980
Sara Lee Corp. 750,000 44,156
126,441
HOUSEHOLD PRODUCTS - 2.1%
Clorox Co. 551,000 46,009
Gillette Co. 452,298 52,975
Procter & Gamble Co. 1,302,800 109,354
Safeskin Corp. (a) 100,000 3,500
211,838
TOBACCO - 0.8%
Philip Morris Companies, Inc. 2,108,400 78,802
TOTAL NONDURABLES 766,174
PRECIOUS METALS - 0.1%
Barrick Gold Corp. 521,800 10,046
Newmont Mining Corp. 59,700 1,489
11,535
RETAIL & WHOLESALE - 10.8%
APPAREL STORES - 1.2%
Abercrombie & Fitch Co. 301,000 12,717
Gap, Inc. 1,041,700 56,252
TJX Companies, Inc. 1,091,828 51,043
120,012
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
RETAIL & WHOLESALE - CONTINUED
DRUG STORES - 1.1%
CVS Corp. 1,115,895 $ 78,322
Rite Aid Corp. 900,000 32,231
110,553
GENERAL MERCHANDISE STORES - 2.0%
Consolidated Stores Corp. (a) 318,750 12,172
Costco Companies, Inc. (a) 355,400 20,569
Wal-Mart Stores, Inc. 3,200,600 176,633
209,374
GROCERY STORES - 0.7%
Albertson's, Inc. 475,000 21,998
Safeway, Inc. (a) 515,200 18,773
U.S. Foodservice, Inc. (a) 586,310 19,422
Whole Foods Market, Inc. (a) 170,000 9,350
69,543
RETAIL & WHOLESALE, MISCELLANEOUS - 5.8%
Barnes & Noble, Inc. (a) 464,000 15,718
Bed Bath & Beyond, Inc. (a) 479,800 24,080
Best Buy Co., Inc. (a) 1,500,000 48,938
Circuit City Stores, Inc. - Circuit City Group 359,300 15,225
Henry Schein, Inc. (a) 596,375 22,961
Home Depot, Inc. 422,050 33,157
IKON Office Solutions, Inc. 4,223,900 89,494
Lowe's Companies, Inc. 500,100 39,602
Micro Warehouse, Inc. (a) 1,428,300 24,995
Officemax, Inc. (a) 1,172,700 19,276
PC Connection, Inc. 377,400 5,425
Staples, Inc. (a) 3,724,512 93,578
Sunglass Hut International, Inc. (a) 1,200,000 14,625
Tandy Corp. 2,289,900 101,328
Viking Office Products, Inc. (a) 1,683,500 48,138
596,540
TOTAL RETAIL & WHOLESALE 1,106,022
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
SERVICES - 2.4%
ADVERTISING - 0.1%
Omnicom Group, Inc. 227,400 $ 10,645
LEASING & RENTAL - 0.4%
Hertz Corp. Class A 212,100 9,730
Hollywood Entertainment Corp. (a)(c) 1,858,200 19,511
Viacom, Inc. Class B (non-vtg.) (a) 217,830 11,981
41,222
SERVICES - 1.9%
Cendant Corp. (a) 2,439,245 52,901
Corrections Corp. of America (a) 1,291,000 29,370
Medpartners, Inc. (a) 9,795,500 87,547
Premier Technologies, Inc. (a) 75,000 1,791
Service Corp. International 412,100 16,845
188,454
TOTAL SERVICES 240,321
TECHNOLOGY - 26.8%
COMMUNICATIONS EQUIPMENT - 3.8%
Advanced Fibre Communication, Inc. (a) 1,000,000 37,062
Ascend Communications, Inc. (a) 100,000 4,319
Ciena Corp. (a) 450,000 23,400
Cisco Systems, Inc. (a) 1,208,700 91,408
Davox Corp. (a) 575,000 10,566
Dialogic Corp. (a) 732,900 24,186
Inter-Tel, Inc. 1,217,300 22,862
Lucent Technologies, Inc. 494,400 35,071
Natural Microsystems (a)(c) 1,084,600 23,217
Nokia Corp. AB sponsored ADR 1,575,000 102,277
3Com Corp. (a) 500,000 12,688
387,056
COMPUTER SERVICES & SOFTWARE - 10.2%
America Online, Inc. (a) 600,000 49,987
At Home Corp., Series A 525,000 18,244
Automatic Data Processing, Inc. 425,400 27,066
BEA Systems, Inc. (a) 625,000 12,539
CBT Group PLC sponsored ADR (a) 230,400 11,462
Cadence Design Systems, Inc. (a) 570,650 20,115
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
COMPUTER SERVICES & SOFTWARE - CONTINUED
Ceridian Corp. (a) 96,600 $ 5,216
Check Point Software Technologies Ltd. (a) 550,000 15,400
CompUSA, Inc. (a)(c) 5,343,900 84,166
Com21, Inc. 4,900 72
DST Systems, Inc. (a) 769,300 40,677
E Trade Group, Inc. (a) 493,000 10,661
Electronic Data Systems Corp. 1,258,500 45,778
Equifax, Inc. 478,200 17,395
First Data Corp. 240,162 7,985
Fiserv, Inc. (a) 300,000 11,794
HBO & Co. 709,000 40,923
Intuit, Inc. 500,000 23,687
J.D. Edwards & Co. 300,000 11,034
Learning Co., Inc. (The) 1,200,000 34,200
Manugistics Group, Inc. (a) 175,000 4,982
Microsoft Corp. (a) 4,100,000 347,731
National Data Corp. 44,300 1,661
Oracle Corp. (a) 915,000 21,617
Parametric Technology Corp. (a) 238,600 7,315
Paychex, Inc. 323,250 11,637
PeopleSoft, Inc. (a) 600,000 26,212
Security Dynamics Technologies, Inc. (a) 400,000 8,450
Shared Medical Systems Corp. 250,000 18,188
Siebel Systems, Inc. (a) 950,000 21,613
Symantec Corp. (a) 935,400 22,333
Transition Systems, Inc. 100,000 1,981
Verisign, Inc. 350,000 11,178
Wind River Systems, Inc. (a) 300,000 9,938
Yahoo, Inc. (a) 375,000 41,063
1,044,300
COMPUTERS & OFFICE EQUIPMENT - 8.1%
Apple Computer, Inc. (a) 400,000 10,650
Bay Networks, Inc. 1,100,000 30,456
CDW Computer Centers, Inc. (a)(c) 1,328,600 54,722
Compaq Computer Corp. 1,000,000 27,312
Comverse Technology, Inc. (a) 980,500 48,994
Dell Computer Corp. (a) 2,898,800 238,879
EMC Corp. (a) 1,140,000 47,239
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
COMPUTERS & OFFICE EQUIPMENT - CONTINUED
Exabyte Corp. (a)(c) 1,385,000 $ 13,504
FileNet Corp. (a)(c) 812,100 44,691
Hewlett-Packard Co. 750,000 46,594
Ingram Micro, Inc. Class A (a) 100,000 4,406
Lexmark International Group, Inc. (a) 925,000 51,337
MMC Networks, Inc. 595,000 15,470
Micron Electronics, Inc. (a) 625,000 6,641
Network Appliance, Inc. 1,200,000 41,738
Pitney Bowes, Inc. 425,000 19,975
Quantum Corp. (a) 1,650,000 36,094
SanDisk Corp. (a)(c) 1,823,900 29,410
Splash Technology Holdings, Inc. (a) 225,000 3,811
Symbol Technologies, Inc. 322,500 11,348
Xerox Corp. 401,700 41,275
824,546
ELECTRONIC INSTRUMENTS - 0.8%
Applied Materials, Inc. (a) 867,600 27,763
KLA-Tencor Corp. (a) 272,900 9,210
Perkin-Elmer Corp. 73,300 5,021
Sawtek, Inc. (a) 439,700 11,281
Thermo Electron Corp. (a) 908,000 31,894
85,169
ELECTRONICS - 3.5%
Brightpoint, Inc. (a) 1,767,100 27,942
Etec Systems, Inc. (a) 643,800 23,539
Intel Corp. 1,104,200 78,881
Linear Technology Corp. 383,500 26,821
Maxim Integrated Products, Inc. (a) 415,200 13,857
Micron Technology, Inc. (a) 419,500 9,885
Molex, Inc. 175,000 4,561
Motorola, Inc. 790,700 41,858
Rambus, Inc. 1,075,000 41,555
Sterling Commerce, Inc. (a) 75,000 2,977
Texas Instruments, Inc. 1,269,200 65,205
Xilinx, Inc. (a) 525,000 19,966
357,047
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
PHOTOGRAPHIC EQUIPMENT - 0.4%
Imation Corp. (a) 1,965,220 $ 35,742
TOTAL TECHNOLOGY 2,733,860
TRANSPORTATION - 0.8%
AIR TRANSPORTATION - 0.8%
ASA Holdings, Inc. 200,000 7,862
Comair Holdings, Inc. 362,500 9,651
Deutsche Lufthansa AG (Reg.) (d) 1,053,000 26,360
Ryanair Holdings PLC sponsored ADR 389,800 13,692
Southwest Airlines Co. 312,500 8,340
Viad Corp. 504,400 13,619
79,524
UTILITIES - 5.2%
CELLULAR - 2.5%
AirTouch Communications, Inc. (a) 561,065 26,721
Iridium World Communications Ltd. Class A 409,400 22,517
Nextel Communications, Inc. Class A (a) 8,697,300 204,930
Teligent, Inc. Class A 141,700 3,791
257,959
GAS - 0.9%
Enron Corp. 1,811,237 90,788
TELEPHONE SERVICES - 1.8%
AT&T Corp. 273,600 16,655
Frontier Corp. 850,000 25,872
LCI International, Inc. (a) 400,000 14,975
NEXTLINK Communications, Inc. Class A (a) 339,800 10,597
Qwest Communications International, Inc. 400,000 13,225
WorldCom, Inc. (a) 2,310,190 105,114
186,438
TOTAL UTILITIES 535,185
TOTAL COMMON STOCKS
(Cost $6,971,074) 9,717,168
CASH EQUIVALENTS - 4.7%
SHARES VALUE (NOTE 1)
(000S)
Taxable Central Cash Fund (b) 474,835,100 $ 474,835
MATURITY
AMOUNT (000S)
Investments in repurchase agreements
(U.S. Treasury obligations) in a joint
trading account at 5.55%, dated
5/29/98 due 6/1/98 $ 4,607 4,605
TOTAL CASH EQUIVALENTS
(Cost $479,440) 479,440
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $7,450,514) $ 10,196,608
LEGEND
(a) Non-income producing
(b) At period end, the seven-day yield of the Taxable Central Cash
Fund was 5.56%. The yield refers to the income earned by investing in
the fund over the seven-day period, expressed as an annual percentage.
(c) Affiliated company (see Note 7 of Notes to Financial Statements).
(d) 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
$26,360,000 or 0.3% of net assets.
INCOME TAX INFORMATION
At May 31,1998, the aggregate cost of investment securities for income
tax purposes was $7,455,693,000. Net unrealized appreciation
aggregated $2,740,915,000, of which $3,223,876,000 related to
appreciated investment securities and $482,961,000 related to
depreciated investment securities.
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF ASSETS AND LIABILITIES
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNT) MAY 31, 1998 (UNAUDITED)
ASSETS
INVESTMENT IN SECURITIES, AT VALUE (INCLUDING REPURCHASE $ 10,196,608
AGREEMENTS OF $4,605) (COST $7,450,514) -
SEE ACCOMPANYING SCHEDULE
RECEIVABLE FOR INVESTMENTS SOLD 81,751
RECEIVABLE FOR FUND SHARES SOLD 17,294
DIVIDENDS RECEIVABLE 7,083
INTEREST RECEIVABLE 1,994
OTHER RECEIVABLES 1,928
TOTAL ASSETS 10,306,658
LIABILITIES
PAYABLE FOR INVESTMENTS PURCHASED $ 82,694
PAYABLE FOR FUND SHARES REDEEMED 47,063
ACCRUED MANAGEMENT FEE 3,719
OTHER PAYABLES AND ACCRUED EXPENSES 1,957
TOTAL LIABILITIES 135,433
NET ASSETS $ 10,171,225
NET ASSETS CONSIST OF:
PAID IN CAPITAL $ 7,001,413
UNDISTRIBUTED NET INVESTMENT INCOME 13,133
ACCUMULATED UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON 410,592
INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS 2,746,087
AND ASSETS AND LIABILITIES IN FOREIGN CURRENCIES
NET ASSETS, FOR 219,943 SHARES OUTSTANDING $ 10,171,225
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE $46.24
PER SHARE ($10,171,225 (DIVIDED BY) 219,943 SHARES)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS SIX MONTHS ENDED MAY 31, 1998 (UNAUDITED)
INVESTMENT INCOME $ 36,599
DIVIDENDS (INCLUDING $2,070 RECEIVED FROM AFFILIATED ISSUERS)
INTEREST 12,734
TOTAL INCOME 49,333
EXPENSES
MANAGEMENT FEE $ 31,163
BASIC FEE
PERFORMANCE ADJUSTMENT (8,202)
TRANSFER AGENT FEES 11,453
ACCOUNTING FEES AND EXPENSES 413
NON-INTERESTED TRUSTEES' COMPENSATION 31
CUSTODIAN FEES AND EXPENSES 83
REGISTRATION FEES 66
AUDIT 42
LEGAL 27
INTEREST 1
MISCELLANEOUS 17
TOTAL EXPENSES BEFORE REDUCTIONS 35,094
EXPENSE REDUCTIONS (1,375) 33,719
NET INVESTMENT INCOME 15,614
REALIZED AND UNREALIZED GAIN (LOSS)
NET REALIZED GAIN (LOSS) ON:
INVESTMENT SECURITIES (INCLUDING REALIZED GAIN (LOSS) OF 438,864
($29,731) ON SALES OF INVESTMENTS IN AFFILIATED ISSUERS)
FOREIGN CURRENCY TRANSACTIONS (43) 438,821
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON:
INVESTMENT SECURITIES 383,197
ASSETS AND LIABILITIES IN FOREIGN CURRENCIES (4) 383,193
NET GAIN (LOSS) 822,014
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 837,628
FROM OPERATIONS
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
AMOUNTS IN THOUSANDS SIX MONTHS ENDED YEAR ENDED
MAY 31, 1998 NOVEMBER 30,
(UNAUDITED) 1997
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS $ 15,614 $ 54,438
NET INVESTMENT INCOME
NET REALIZED GAIN (LOSS) 438,821 1,232,626
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) 383,193 107,522
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 837,628 1,394,586
FROM OPERATIONS
DISTRIBUTIONS TO SHAREHOLDERS (48,255) (61,467)
FROM NET INVESTMENT INCOME
FROM NET REALIZED GAIN (1,042,008) (321,291)
TOTAL DISTRIBUTIONS (1,090,263) (382,758)
SHARE TRANSACTIONS 1,535,308 3,489,762
NET PROCEEDS FROM SALES OF SHARES
REINVESTMENT OF DISTRIBUTIONS 1,080,838 379,989
COST OF SHARES REDEEMED (2,716,510) (3,964,019)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING (100,364) (94,268)
FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS (352,999) 917,560
NET ASSETS
BEGINNING OF PERIOD 10,524,224 9,606,664
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT $ 10,171,225 $ 10,524,224
INCOME OF $13,133 AND $54,423, RESPECTIVELY)
OTHER INFORMATION
SHARES
SOLD 33,635 79,391
ISSUED IN REINVESTMENT OF DISTRIBUTIONS 26,013 9,441
REDEEMED (59,671) (89,516)
NET INCREASE (DECREASE) (23) (684)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED YEARS ENDED NOVEMBER 30,
MAY 31, 1998
(UNAUDITED) 1997 1996 1995 1994 1993
SELECTED PER-SHARE DATA
NET ASSET VALUE, $ 47.84 $ 43.54 $ 38.42 $ 28.25 $ 30.91 $ 28.13
BEGINNING OF PERIOD
INCOME FROM INVESTMENT
OPERATIONS
NET INVESTMENT .07 D .24 D .34 .20 .12 .07
INCOME
NET REALIZED 3.26 5.80 6.72 11.00 .28 3.99
AND UNREALIZED
GAIN (LOSS)
TOTAL FROM INVESTMENT 3.33 6.04 7.06 11.20 .40 4.06
OPERATIONS
LESS DISTRIBUTIONS
FROM NET INVESTMENT (.22) (.28) (.14) (.22) (.07) (.07)
INCOME
FROM NET REALIZED GAIN (4.71) (1.46) (1.80) (.81) (2.99) (1.21)
TOTAL DISTRIBUTIONS (4.93) (1.74) (1.94) (1.03) (3.06) (1.28)
NET ASSET VALUE, $ 46.24 $ 47.84 $ 43.54 $ 38.42 $ 28.25 $ 30.91
END OF PERIOD
TOTAL RETURN B, C 8.23% 14.63% 19.55% 41.22% 1.23% 15.04%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF $ 10,171 $ 10,524 $ 9,607 $ 6,186 $ 2,979 $ 2,423
PERIOD (IN MILLIONS)
RATIO OF EXPENSES TO .68% A .71% .88% .96% 1.06% 1.08%
AVERAGE NET ASSETS
RATIO OF EXPENSES .65% A, E .68% E .85% E .95% E 1.05% E 1.07% E
TO AVERAGE NET
ASSETS AFTER
EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT .30% A .54% .96% .76% .64% .43%
INCOME TO AVERAGE
NET ASSETS
PORTFOLIO TURNOVER RATE 72% A 93% 78% 97% 135% 159%
AVERAGE COMMISSION $ .0433 $ .0444 .0414
RATE F
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 6 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES
(SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS).
F FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY
FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES
EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION
RATE STRUCTURES MAY DIFFER.
NOTES TO FINANCIAL STATEMENTS
For the period ended May 31, 1998 (Unaudited)
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 financial statements have been prepared in
conformity with generally accepted accounting principles which require
management to make certain estimates and assumptions at the date of
the financial statements. The following summarizes the significant
accounting policies of the 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 (including restricted
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 with remaining maturities of sixty days or less
for which quotations are not readily available are valued at amortized
cost or original cost plus accrued interest, both of which approximate
current value.
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.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
date and settlement on purchases and sales of securities. The effects
of changes in foreign currency exchange rates on investments in
securities 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 substantially 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 securities where the
ex-dividend date may have passed, are recorded as soon as
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
INVESTMENT INCOME - CONTINUED
the fund is informed of the ex-dividend date. Non-cash dividends
included in dividend income, if any, are recorded at the fair market
value of the securities received. 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
among the funds in the trust.
DEFERRED TRUSTEE COMPENSATION. Under a Deferred Compensation Plan (the
Plan) non-interested Trustees must defer receipt of a portion of, and
may elect to defer receipt of an additional portion of, their annual
compensation. Under the Plan, deferred amounts are treated as though
equivalent dollar amounts had been invested in shares of a
cross-section of Fidelity funds, including shares of the fund.
Deferred amounts remain in the fund until distributed in accordance
with the Plan.
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, which may result in
distribution reclassifications, are primarily due to differing
treatments for litigation proceeds 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.
Undistributed net investment income and accumulated undistributed net
realized gain (loss) on investments and foreign currency transactions
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.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the contracts'
terms. The U.S. dollar value of foreign currency contracts is
determined using contractual currency exchange rates established at
the time of each trade.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with
other affiliated
2. OPERATING POLICIES - CONTINUED
JOINT TRADING ACCOUNT - CONTINUED
entities of Fidelity Management & Research Company (FMR), may transfer
uninvested cash balances into one or more joint trading accounts.
These balances are invested in one or more repurchase agreements for
U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are
marked-to-market daily and maintained at a value at least equal to the
principal amount of the repurchase agreement (including accrued
interest). FMR, the fund's investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
TAXABLE CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by
the SEC, the fund may invest in the Taxable Central Cash Fund (the
Cash Fund) managed by Fidelity Investments Money Management, Inc.,
(formerly FMR Texas, Inc.) an affiliate of FMR. The Cash Fund is an
open-end money market fund available only to investment companies and
other accounts managed by FMR and its affiliates. The Cash Fund seeks
preservation of capital, liquidity, and current income by investing in
U.S. Treasury securities and repurchase agreements for these
securities. Income distributions from the Cash Fund are declared daily
and paid monthly from net interest income. Income distributions earned
by the fund are recorded as interest income in the accompanying
financial statements.
RESTRICTED SECURITIES. The fund is permitted to invest in securities
that are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from
registration or to the public if the securities are registered.
Disposal of these securities may involve time-consuming negotiations
and expense, and prompt sale at an acceptable price may be difficult.
At the end of the period, the fund had no investments in restricted
securities (excluding 144A issues).
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $3,571,338,000 and $4,669,048,000, respectively.
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 .2500% to
.5200% for the period. The annual individual fund fee rate is .30%. In
the event
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
that these rates were lower than the contractual rates in effect
during the period, FMR voluntarily implemented the above rates, as
they resulted in the same or a lower management fee. The basic fee is
subject to a performance adjustment (up to a maximum of
(plus/minus).20% of the fund's average net assets over the performance
period) 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 annualized rate of .44% of average
net assets after the performance adjustment.
TRANSFER AGENT FEES. Fidelity Service Company, Inc. (FSC), an
affiliate of FMR, is the fund's transfer, dividend disbursing and
shareholder servicing agent. FSC receives account fees and asset-based
fees that vary according to account size and type of account. FSC pays
for typesetting, printing and mailing of all shareholder reports,
except proxy statements. For the period, the transfer agent fees were
equivalent to an annualized rate of .22% of average net assets.
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 $1,329,000 for the
period.
5. 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 the loan was outstanding amounted
to $5,271,000. The weighted average interest rate was 6.13%.
6. 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 $1,003,000 under this arrangement.
In addition, the fund has entered into arrangements with its custodian
and transfer agent whereby credits realized as a result of uninvested
cash balances were used to reduce a portion of the fund's expenses.
During the period, the fund's custodian and transfer agent fees were
reduced by $4,000 and $368,000, respectively, under these
arrangements.
7. 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 during the period
with companies which are or were affiliates are as follows:
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES
AMOUNTS IN THOUSANDS
PURCHASE SALES DIVIDEND VALUE
AFFILIATE COST COST INCOME
CDW Computer Centers, Inc.. $ 11,247 $ - $ - $ 54,722
CompUSA, Inc. . 19,662 - - 84,166
Exabyte Corp. 2,727 - - 13,504
FileNet Corp. 1,657 - - 44,691
Hollywood Entertainment Corp. - 4,538 - 19,511
Imation Corp. - 20,774 - -
JP Foodservice, Inc. 8,609 9,091 - -
Micro Warehouse, Inc. - 27,807 - -
Minerals Technologies, Inc. - 7,161 31 -
Natural Microsystems 15,193 - - 23,217
Samsonite Corp. - 12,220 - -
SanDisk Corp. - 991 - 29,410
Sonus Pharmaceuticals, Inc. 11,502 - - 11,893
Splash Technology Holdings, Inc. - 1,296 - -
Unisource Worldwide, Inc. - 10,139 2,039 62,448
TOTALS $ 70,597 $ 94,017 $ 2,070 $ 343,562
MANAGING YOUR INVESTMENTS
Fidelity offers several ways to conveniently manage your personal
investments via your telephone or PC. You can access your account
information, conduct trades and research your investments 24 hours a
day.
BY PHONE
Fidelity TouchTone Xpress(registered trademark) provides a single
toll-free number to access account balances, positions, quotes and
trading. It's easy to navigate the service, and on your first call,
the system will help you create a personal identification number (PIN)
for security.
(PHONE_GRAPHIC)TOUCHTONE XPRESS
1-800-544-5555
PRESS
For mutual fund and brokerage trading.
For quotes.*
For account balances and holdings.
To review orders and mutual
fund activity.
To change your PIN.
To speak to a Fidelity representative.
0
*
BY PC
Fidelity's Web site on the Internet provides a wide range of
information, including daily financial news, fund performance,
interactive planning tools and news about Fidelity products and
services.
(COMPUTER_GRAPHIC)FIDELITY'S WEB SITE
WWW.FIDELITY.COM
If you are not currently on the Internet, call Fidelity at
1-800-544-7272 for significant savings on Web access from internetMCI.
SM
(COMPUTER_GRAPHIC)
FIDELITY ON-LINE XPRESS+
TM
Fidelity On-line Xpress+ software for Windows combines comprehensive
portfolio management capabilities, securities trading and access to
research and analysis tools . . . all on your desktop. Call Fidelity
at 1-800-544-7272 or visit our Web site for more information on how to
manage your investments via your PC.
* 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
INVESTMENT SUB-ADVISERS
Fidelity Management & Research
(U.K.) Inc., London, England
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Abigail P. Johnson, Vice President
Steven Wymer, Vice President
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
ADVISORY BOARD
J. Gary Burkhead
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Company, Inc.
Boston, MA
* INDEPENDENT TRUSTEES
CUSTODIAN
Brown Brothers Harriman & Co.
Boston, MA
FIDELITY'S GROWTH FUNDS
Blue Chip Growth Fund
Capital Appreciation Fund
Contrafund
Contrafund II
Disciplined Equity Fund
Dividend Growth Fund
Emerging Growth Fund
Export and Multinational Fund
Fidelity Fifty
Growth Company Fund
Large Cap Stock Fund
Low-Priced Stock Fund
Magellan(registered trademark) Fund
Mid-Cap Stock Fund
New Millennium(registered trademark) Fund
OTC Portfolio
Retirement Growth Fund
Small Cap Selector
Small Cap Stock Fund
Stock Selector
TechnoQuant Growth Fund
SM
Trend Fund
Value Fund
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Exchanges/Redemptions 1-800-544-7777
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)
TouchTone Xpress (registered trademark) 1-800-544-5555
AUTOMATED LINE FOR QUICKEST SERVICE
FIDELITY
(REGISTERED TRADEMARK)
NEW MILLENNIUM(registered trademark)
FUND
SEMIANNUAL REPORT
MAY 31, 1998
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 24 STATEMENTS OF ASSETS AND LIABILITIES,
OPERATIONS, AND CHANGES IN NET ASSETS,
AS WELL AS FINANCIAL HIGHLIGHTS.
NOTES 28 NOTES TO THE FINANCIAL STATEMENTS.
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,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT
INVESTED.
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.
To reduce expenses and demonstrate respect for our environment, we
have initiated a project through which we will begin eliminating
duplicate copies of most financial reports and prospectuses to most
households, even if they have more than one account in the fund. If
additional copies of financial reports, prospectuses or historical
account information are needed, please call 1-800-544-6666.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
While low interest rates and subdued inflation provided support for
stock and bond markets in the U.S. during the first five months of
1998, concerns about continuing economic and political difficulties in
Asia colored their performance. The stock market reached record
heights due to stronger-than-expected corporate earnings, but
retreated at times when concerns surfaced about how the Asian
volatility would affect business prospects. The bond market benefited
from these retreats, as investors sought alternatives offering lower
volatility.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will
greatly reduce your vulnerability to any single decline. We know from
experience, for example, that stock prices have gone up over longer
periods of time, have significantly outperformed other types of
investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through
diversification. A stock mutual fund, for instance, is already
diversified, because it invests in many different companies. You can
increase your diversification further by investing in a number of
different stock funds, or in such other investment categories 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. Of course, it's important to
remember that there is no assurance that a money market fund will
achieve its goal of maintaining a stable net asset value of $1.00 per
share, and that these types of funds are neither insured nor
guaranteed by any agency of the U.S. government.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases.
If you have questions, please call us at 1-800-544-8888. We are
available 24 hours a day, seven days a week to provide you 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. Total return reflects the change in the value of an
investment, assuming reinvestment of the fund's dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED MAY 31, 1998 PAST 6 PAST 1 PAST 5 LIFE OF
MONTHS YEAR YEARS FUND
FIDELITY NEW MILLENNIUM 11.08% 21.34% 182.93% 219.42%
FIDELITY NEW MILLENNIUM 7.75% 17.70% 174.44% 209.84%
(INCL. 3.00% SALES CHARGE)
S&P 500 (REGISTERED TRADEMARK) 15.06% 30.69% 172.18% 182.45%
CAPITAL APPRECIATION FUNDS AVERAGE 9.06% 22.75% 110.89% N/A
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year, five
years or since the fund started on December 28, 1992. For example, if
you had invested $1,000 in a fund that had a 5% return over the past
year, the value of your investment would be $1,050. You can compare
the fund's returns to the performance of the Standard & Poor's 500
Index - a widely recognized unmanaged index of common stocks. To
measure how the fund's performance stacked up against its peers, you
can compare it to the capital appreciation funds average, which
reflects the performance of mutual funds with similar objectives
tracked by Lipper Analytical Services, Inc. The past six months
average represents a peer group of 247 mutual funds. These benchmarks
include reinvested dividends and capital gains, if any, and exclude
the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED MAY 31, 1998 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
FIDELITY NEW MILLENNIUM 21.34% 23.12% 23.87%
FIDELITY NEW MILLENNIUM 17.70% 22.37% 23.18%
(INCL. 3.00% SALES CHARGE)
S&P 500 30.69% 22.17% 21.09%
CAPITAL APPRECIATION FUNDS AVERAGE 22.75% 15.41% N/A
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year. (Note: Lipper calculates average annual total
returns by annualizing each fund's total return, then taking an
arithmetic average. This may produce a slightly different figure than
that obtained by averaging the cumulative total returns and
annualizing the result.)
$10,000 OVER LIFE OF FUND
New Millennium S&P 500
00300 SP001
1992/12/28 9700.00 10000.00
1992/12/31 9777.60 9923.75
1993/01/31 10291.70 10007.11
1993/02/28 10029.80 10143.21
1993/03/31 10437.20 10357.23
1993/04/30 10340.20 10106.58
1993/05/31 10951.30 10377.44
1993/06/30 11038.60 10407.53
1993/07/31 11242.30 10365.90
1993/08/31 11620.60 10758.77
1993/09/30 11892.20 10675.93
1993/10/31 12105.60 10896.92
1993/11/30 11610.90 10793.40
1993/12/31 12189.94 10924.00
1994/01/31 12418.52 11295.42
1994/02/28 12448.35 10989.31
1994/03/31 11682.76 10510.18
1994/04/30 11613.16 10644.71
1994/05/31 11533.62 10819.28
1994/06/30 11285.05 10554.21
1994/07/31 11523.67 10900.39
1994/08/31 12160.01 11347.30
1994/09/30 12368.81 11069.29
1994/10/31 12756.58 11318.35
1994/11/30 12229.61 10906.14
1994/12/31 12290.89 11067.88
1995/01/31 12026.25 11354.87
1995/02/28 12546.03 11797.37
1995/03/31 13014.85 12145.51
1995/04/30 13830.19 12503.19
1995/05/31 13983.06 13002.94
1995/06/30 15195.88 13305.00
1995/07/31 16500.42 13746.20
1995/08/31 16694.06 13780.70
1995/09/30 17325.95 14362.24
1995/10/31 17162.88 14310.97
1995/11/30 18457.23 14939.22
1995/12/31 18699.43 15226.95
1996/01/31 18382.01 15745.28
1996/02/29 19679.17 15891.24
1996/03/31 20056.13 16044.27
1996/04/30 21231.33 16280.76
1996/05/31 21830.02 16700.64
1996/06/30 21098.29 16764.27
1996/07/31 19346.57 16023.63
1996/08/31 20344.39 16361.56
1996/09/30 21763.50 17282.39
1996/10/31 21852.20 17759.04
1996/11/30 23049.58 19101.45
1996/12/31 23027.71 18723.05
1997/01/31 24805.04 19892.86
1997/02/28 22902.22 20048.82
1997/03/31 22400.88 19225.02
1997/04/30 23232.65 20372.75
1997/05/31 25534.27 21613.04
1997/06/30 26354.64 22581.31
1997/07/31 29909.62 24378.10
1997/08/31 29943.80 23012.44
1997/09/30 31470.61 24272.83
1997/10/31 28736.02 23462.12
1997/11/30 27892.85 24548.18
1997/12/31 28700.30 24969.67
1998/01/31 28233.53 25245.84
1998/02/28 30698.77 27066.57
1998/03/31 32606.09 28452.65
1998/04/30 33021.29 28738.88
1998/05/29 30984.22 28244.86
IMATRL PRASUN SHR__CHT 19980531 19980612 160144 R00000000000069
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity New Millennium Fund on December 28, 1992, when
the fund started, and the current 3.00% sales charge was paid. As the
chart shows, by May 31, 1998, the value of the investment would have
grown to $30,984 - a 209.84% increase on the initial investment. For
comparison, look at how the Standard & Poor's 500 Index did over the
same period. With dividends and capital gains, if any, reinvested, the
same $10,000 would have grown to $28,245 - a 182.45% 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
long-term growth and
short-term volatility. 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
Although renewed concerns about
economic difficulties in Asia late
in the period tempered the rapid
growth of U.S. equity markets, the
Standard & Poor's 500 Index - a
measure of the U.S. stock market -
still managed to return 15.06%
during the six months that ended
May 31, 1998. As feared, some
U.S. corporations with business
exposure to Asia did report
disappointing earnings and their
stocks were harshly punished.
However, investors seemed to
adopt a new attitude - one that
overlooked short-term troubles
and focused on longer-term growth
- - helping many of these stocks to
rebound quickly. In addition, the
continued strength of the U.S.
economy, combined with low
interest rates and low inflation,
seemed to buoy the stock market
for much of the period. The upward
climb of the stock market
stagnated in mid- and late May
when investors were inundated
with worrisome news about the
stability of Asian markets.
Specifically, the president of
Indonesia resigned amidst civil
strife and a battle over nuclear
testing erupted between Pakistan
and India. Concerns about falling
demand for U.S. exports
particularly hurt technology
companies, especially during the
intensified investigation of
Microsoft by the Justice
Department in May. As a result of
concerns about these tumultuous
events and their potential impact
on the U.S. economy, the Dow
Jones Industrial Average produced a
negative return in May for the first
time in 1998 - although the Dow
was still up 13.29% for the first five
months of 1998.
An interview with Neal Miller, Portfolio Manager of Fidelity New
Millennium Fund
Q. NEAL, HOW DID THE FUND PERFORM?
A. It has been a challenging period for the fund. For the six months
that ended May 31, 1998, the fund returned 11.08%, while the capital
appreciation funds average tracked by Lipper Analytical Services
returned 9.06%, and the Standard & Poor's 500 Index returned 15.06%.
For the 12 months that ended May 31, 1998, the fund returned 21.34%,
compared to 22.75% for the Lipper average and 30.69% for the S&P 500.
Q. WHAT HELD THE FUND'S PERFORMANCE BACK RELATIVE TO THE S&P 500 OVER
THE PAST SIX MONTHS?
A. The S&P 500's return has been stellar, but most of its advance was
concentrated among a narrow group of stocks. Investors gravitated
toward steady growers and the largest stocks in the market. At the
same time, stocks of small- and medium-sized companies - where I tend
to spend most of my time looking for opportunities - lagged. I'm quite
proud of the fact that the fund's longer-term performance is still
ahead of the S&P, but the past year or so has presented a particularly
difficult market backdrop for the fund.
Q. DID ASIAN TURMOIL HAVE SOMETHING TO DO WITH THIS DIFFICULT
ENVIRONMENT?
A. The effects of the Asian crisis have been considerable, and may
continue to be so. For example, what has come to be known as the
"Asian contagion" ate into the performance of one of the fund's top
holdings, Brazilian telephone company Telebras. As a result of
investors' fears that financial problems in Asia would spread, stocks
in such other emerging markets as Brazil also suffered. In spite of an
incredibly promising story - this government-owned telecommunications
giant will be privatized and split into 12 separate entities -
Telebras stock dropped during the period.
Q. DID YOUR REDUCTION OF THE FUND'S TECHNOLOGY HOLDINGS RESULT FROM
THE CONTINUING PROBLEMS IN ASIA?
A. That was part of the story. To be sure, decreasing demand from Asia
resulted in increased inventories that weighed heavily on
semiconductor and associated product prices. But there's more. First,
the corporate world is converting from high-priced personal computer
(PC) products to much-lower-priced PCs, which crimps profits. Second,
some computer companies shifted to a build-to-order system, causing
dislocations among companies in the PC manufacturing chain. Third, the
U.S. Justice Department filed suit against Microsoft at a time when PC
and component manufacturers were counting on Windows 98 to stimulate a
new upgrade cycle. Finally, cheaper PC prices have not resulted in an
anticipated upswing in purchases by retail consumers.
Q. WHAT INVESTMENT THEME WAS REFLECTED BY THE INCREASE IN THE FUND'S
INVESTMENTS IN THE UTILITIES AND MEDIA AND LEISURE SECTORS?
A. The investment theme most affected was the digitization of
information in both telecommunications and entertainment. With the
deregulation of telephone services, many companies are working toward
providing a digital format for communications. I sought to take
advantage of that trend through several areas. First, I invested in
hardware providers, such as Cisco Systems, as well as service
providers, such as Intermedia Communications and Nextel. Second, on
the broadcast side, I looked for companies poised to benefit from the
fact that broadcast signals will come in digital form after the year
2000. Examples included investments in entertainment provider Time
Warner and broadcaster BHC Communications during the period.
Q. CAN YOU HIGHLIGHT HOW SOME OF THE FUND'S TOP 10 INVESTMENTS
PERFORMED?
A. The fund's top performer during the period was CMG Information
Services, a complex of businesses offering an array of Internet
services. Best Buy, an electronics retailer, also performed well due
to its potent product mix, especially in the digital gadget area. In
addition, ASM Lithography continued to profit from its competitive
position as a leader in the ultra-violet stepper business that
produces patterns on semiconductor wafers. While I cut back on the
fund's energy service stocks in order to narrow the portfolio's focus
and avoid the negative effects of falling oil prices, Coflexip proved
to be a strong stock because of its attractive products and the
positive impact of a management turnaround. However, energy service
company Smith International suffered due to the downdraft in energy
prices.
Q. WHAT'S YOUR OUTLOOK?
A. Looking at Asia first, its future impact is uncertain. Currency
devaluations there could bring an influx of cheaper imports to the
U.S., helping to prolong our economic cycle by keeping wage rates and
prices down. If economic stability ensues, interest rates could remain
stable - a positive for small-company stocks that tend to be
interest-rate sensitive. With continued growth, low inflation and
stable interest rates, the overall market backdrop for the kinds of
stocks the fund owns could improve by the third quarter of 1998.
NEAL MILLER ON TRENDS FALLING IN
OR OUT OF HIS FAVOR:
CEMENT: "I'VE REINFORCED THE
PORTFOLIO'S FOCUS ON CEMENT-RELATED
INVESTMENTS. THERE'S BEEN A LACK OF
CEMENT SUPPLY, HELPING TO SUPPORT
ITS PRICE. AT THE SAME TIME,
RE-AUTHORIZATION OF THE FEDERAL
HIGHWAY BILL AND CONSTRUCTION
PLANS FOR REAL ESTATE INVESTMENT
TRUSTS (REITS) POINT TO INCREASED
DEMAND IN THE PIPELINE. TWO OF THE
FUND'S LARGE INVESTMENTS,
SOUTHDOWN AND MARTIN MARIETTA
MATERIALS, WERE PURCHASED AS PLAYS
ON THIS THEME."
YEAR 2000: "ONE THEME THAT
LOOKS TO HAVE PLAYED ITSELF OUT
REVOLVES AROUND THE YEAR 2000
PROBLEM - THE FACT THAT MOST
SOFTWARE WILL READ `00' IN CODE AS
1900 RATHER THAN AS 2000 AT THE
TURN OF THE CENTURY. IT APPEARS THAT
EXPENDITURES FOR THIS ISSUE ARE
STARTING TO PEAK, SO I'VE PARED BACK
IN THIS AREA. PERFORMANCE OF
COMPANIES IN THIS AREA WAS MIXED.
FOR EXAMPLE, KEANE PROVED TO BE
ONE OF THE FUND'S TOP PERFORMERS
DURING THE PERIOD, BUT VIASOFT
STRUGGLED."
SELF-HELP MEDICINE: "THE MARKET
FOR VITAMIN-MEDICINE COMBINATIONS
HAS GROWN, HELPED BY POSITIVE
LEGISLATIVE AND SOCIAL
UNDERPINNINGS. SQUARE FOOTAGE FOR
HERBAL SUPPLEMENTS IN STORES HAS
INCREASED. I SOUGHT TO MAKE
INVESTMENTS ACROSS ALL PARTS OF THE
PRODUCTION, DISTRIBUTION AND SALES
PATH, INCLUDING REXALL SUNDOWN,
WHICH PROVIDES SUCH PRODUCTS FOR
WAL-MART."
FUND FACTS
GOAL: LONG-TERM CAPITAL
APPRECIATION BY INVESTING
MAINLY IN EQUITY SECURITIES OF
COMPANIES THAT ARE LIKELY TO
BENEFIT FROM SOCIAL AND
ECONOMIC TRENDS
FUND NUMBER: 300
TRADING SYMBOL: FMILX
START DATE: DECEMBER 28, 1992
SIZE: AS OF MAY 31, 1998,
MORE THAN $1.5 BILLION
MANAGER: NEAL MILLER, SINCE
INCEPTION; JOINED FIDELITY IN 1988
(CHECKMARK)
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
INVESTMENT CHANGES
TOP TEN STOCKS AS OF MAY 31, 1998
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE STOCKS
6 MONTHS AGO
BEST BUY CO., INC. 3.4 0.5
SOUTHDOWN, INC. 2.3 1.2
CMG INFORMATION SERVICES, INC. 2.2 0.5
COFLEXIP SPONSORED ADR 1.9 1.6
SMITH INTERNATIONAL, INC. 1.9 2.9
ASM LITHOGRAPHY HOLDING NV 1.8 3.4
TELEBRAS SPONSORED ADR 1.7 0.0
REXALL SUNDOWN, INC. 1.7 0.0
US AIRWAYS GROUP, INC. 1.6 1.4
LONE STAR INDUSTRIES, INC. 1.4 0.7
TOP FIVE MARKET SECTORS AS OF MAY 31, 1998
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE MARKET SECTORS
6 MONTHS AGO
TECHNOLOGY 17.9 25.1
MEDIA & LEISURE 9.7 3.6
FINANCE 8.9 10.5
UTILITIES 8.2 1.9
CONSTRUCTION & REAL ESTATE 8.1 7.8
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF MAY 31, 1998* AS OF NOVEMBER 30, 1997**
ROW: 1, COL: 1, VALUE: 95.8
ROW: 1, COL: 2, VALUE: 4.2
STOCKS 92.4%
SHORT-TERM
INVESTMENTS 7.6%
FOREIGN
INVESTMENTS 7.0%
STOCKS 95.8%
SHORT-TERM
INVESTMENTS 4.2%
FOREIGN
INVESTMENTS 10.5%
ROW: 1, COL: 1, VALUE: 92.40000000000001
ROW: 1, COL: 2, VALUE: 7.6
*
**
INVESTMENTS MAY 31, 1998 (UNAUDITED)
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES
COMMON STOCKS - 95.6%
SHARES VALUE (NOTE 1)
(000S)
BASIC INDUSTRIES - 1.8%
CHEMICALS & PLASTICS - 0.2%
American Pacific Corp. (a) 18,700 $ 201
Valspar Corp. 77,700 3,137
3,338
METALS & MINING - 1.4%
Martin Marietta Materials, Inc. 462,300 21,265
PACKAGING & CONTAINERS - 0.1%
Gaylord Container Corp. Class A 102,400 858
PAPER & FOREST PRODUCTS - 0.1%
Weyerhaeuser Co. 42,500 2,160
TOTAL BASIC INDUSTRIES 27,621
CONSTRUCTION & REAL ESTATE -8.1%
BUILDING MATERIALS - 7.0%
CalMat Co. 599,600 15,065
Centex Construction Products, Inc. 64,300 2,459
Florida Rock Industries, Inc. 136,800 4,258
Giant Cement Holding, Inc. (a) 156,300 4,064
Lafarge Corp. 206,700 7,777
Lone Star Industries, Inc. 289,500 21,767
Medusa Corp. 245,500 14,147
Southdown, Inc. 543,700 35,680
Vulcan Materials Co. 27,700 3,144
108,361
CONSTRUCTION - 0.8%
Bouygues Offshore SA sponsored ADR 19,800 494
Butler Manufacturing Co. 262,350 9,182
Lennar Corp. 37,400 991
Level 3 Communications, Inc. (a) 23,100 1,156
11,823
ENGINEERING - 0.1%
Billing Information Concepts Corp. 13,700 319
MYR Group, Inc. 5,433 67
Stone & Webster, Inc. 30,000 1,214
1,600
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
CONSTRUCTION & REAL ESTATE - CONTINUED
REAL ESTATE INVESTMENT TRUSTS - 0.2%
First Industrial Realty Trust, Inc. 113,300 $ 3,512
TOTAL CONSTRUCTION & REAL ESTATE 125,296
DURABLES - 4.2%
AUTOS, TIRES, & ACCESSORIES - 0.3%
Johnstown America Industries, Inc. (a) 41,200 747
NACCO Industries, Inc. Class A 8,600 1,260
Tyler Corp. 339,200 3,180
5,187
CONSUMER ELECTRONICS - 0.9%
Harman International Industries, Inc. 24,500 1,043
Maytag Co. 60,200 3,036
Newell Co. 205,900 9,935
14,014
HOME FURNISHINGS - 1.9%
Bassett Furniture Industries, Inc. 47,900 1,461
Industrie Natuzzi Spa ADR 274,000 8,015
Maxim Group, Inc. (a) 30,600 516
Miller (Herman), Inc. 555,900 15,391
Steelcase, Inc. Class A 124,300 3,706
Strouds, Inc. 3,400 11
29,100
TEXTILES & APPAREL - 1.1%
Pacific Sunwear of California, Inc. 5,100 228
Shaw Industries, Inc. 36,200 579
Westpoint Stevens, Inc. Class A (a) 141,800 4,644
Wolverine World Wide, Inc. 441,700 10,904
16,355
TOTAL DURABLES 64,656
ENERGY -7.4%
ENERGY SERVICES - 7.1%
Atwood Oceanics, Inc. (a) 162,100 8,389
Coflexip sponsored ADR 402,100 29,806
Cal Dive International, Inc. 83,700 2,835
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
ENERGY - CONTINUED
ENERGY SERVICES - CONTINUED
Daniel Industries, Inc. 391,600 $ 7,954
ENSCO International, Inc. 301,600 7,634
Marine Drilling Companies, Inc. (a) 876,500 16,489
Schlumberger Ltd. 29,600 2,311
Smith International, Inc. (a) 599,700 29,423
Tesco Corp. 21,100 272
Varco International, Inc. (a) 149,700 3,902
Western Atlas, Inc. (a) 3,400 294
109,309
OIL & GAS - 0.3%
Camco International, Inc. 27,300 1,904
Companie Generale de Geophysique SA 44,400 1,507
Petroleum Geo-Services AS sponsored ADR 13,700 897
Veritas DGC, Inc. 10,300 534
4,842
TOTAL ENERGY 114,151
FINANCE - 8.9%
BANKS - 2.6%
Bank of Tokyo-Mitsubishi Ltd. 20,000 205
Cape Cod Bank & Trust Co. 6,500 255
Daiwa Bank 110,000 214
First Tennessee National Corp. 112,000 3,556
GBC Bancorp California 51,200 1,466
Marshall & Ilsley Corp. 130,300 7,036
Morgan (J.P.) & Co., Inc. 10,200 1,267
National Bancorp of Alaska, Inc. 14,700 469
Northrim Bank 9,900 157
Riggs National Corp. 431,800 11,821
Zions Bancorp 262,200 13,371
39,817
CLOSED-END INVESTMENT COMPANY - 0.1%
Taiwan Fund, Inc. (a) 48,800 686
Templeton Dragon Fund, Inc. 24,600 226
912
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - CONTINUED
CREDIT & OTHER FINANCE - 0.6%
American Express Co. 49,900 $ 5,121
Federal Agricultural Mortgage Corp. Class C (non-vtg.)(a) 78,200
5,225
10,346
FEDERAL SPONSORED CREDIT - 0.0%
SLM Holding Corp. 10,300 411
INSURANCE - 1.8%
Blanch E.W. Holdings, Inc. 67,300 2,532
HSB Group, Inc. 291,900 12,844
Istituto Nazionale Delle Assicurazioni Spa 1,559,900 4,852
Poe & Associates, Inc. 11,800 441
Progressive Corp. 10,700 1,475
Torchmark Corp. 140,200 6,011
28,155
SAVINGS & LOANS - 0.5%
Ahmanson (H.F.) & Co. 41,100 3,134
Dime Bancorp., Inc. 118,100 3,447
Golden State Bancorp 21,900 839
7,420
SECURITIES INDUSTRY - 3.3%
Advest Group, Inc. (The) 87,900 2,302
Affiliated Managers Group, Inc. 20,900 748
Dain Rauscher Corp. 50,800 2,883
Duff & Phelps Credit Rating Co. 2,300 132
Edwards (A.G.), Inc. 357,800 14,468
Everen Capital Corp. 39,700 2,052
Hambrecht & Quist Group (a) 92,500 2,844
Interstate/Johnson Lane, Inc. 68,500 1,995
Jefferies Group, Inc. 45,300 2,084
Legg Mason, Inc. 98,900 5,965
McDonald & Co. Investments, Inc. 140,800 4,224
Morgan Keegan, Inc. 171,900 3,943
PaineWebber Group, Inc. 99,350 4,266
Provida SA sponsored ADR 14,500 244
Stifel Financial Corp. 100,335 1,568
Waddell & Reed Financial, Inc. Class A 70,900 1,640
51,358
TOTAL FINANCE 138,419
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
HEALTH - 7.8%
DRUGS & PHARMACEUTICALS - 3.5%
Hauser Chemical Research, Inc. (a) 478,000 $ 3,705
Herbalife International, Inc. Class A 41,900 1,079
ICN Pharmaceuticals, Inc. 69,250 2,991
Merck & Co., Inc. 18,700 2,189
NBTY, Inc. (a) 209,800 3,658
Natural Alternatives International, Inc. (a) 87,700 1,551
Nutraceutical International Corp. 51,000 580
PharmaPrint, Inc. (a) 123,800 1,532
Regeneron Pharmaceuticals, Inc. (a) 121,000 1,131
Rexall Sundown, Inc. (a) 799,800 26,793
Twinlab Corp. (a) 174,800 6,489
Warner-Lambert Co. 50,400 3,216
54,914
MEDICAL EQUIPMENT & SUPPLIES - 4.0%
Arterial Vascular Engineering, Inc. (a) 254,700 7,872
Ballard Medical Products 79,000 1,768
Becton, Dickinson & Co. 54,800 3,877
Bindley Western Industries, Inc. 39,900 1,416
Biomet, Inc. 205,400 5,931
Cooper Companies, Inc. 49,900 1,971
Dionex Corp. (a) 97,300 5,084
Focal, Inc. 74,500 913
Guidant Corp. 102,400 6,598
Novoste Corp. (a) 35,800 904
Orthofix International (a) 39,800 527
Osteotech, Inc. (a) 35,500 657
PLC Systems, Inc. 22,100 285
Resmed, Inc. (a) 7,900 280
Sofamor/Danek Group, Inc. (a) 138,800 11,538
Steris Corp. 6,800 425
Stryker Corp. 25,200 1,027
Sybron International Corp. (a) 422,100 10,104
61,177
MEDICAL FACILITIES MANAGEMENT - 0.3%
Columbia/HCA Healthcare Corp. 14,300 467
Express Scripts, Inc. Class A (a) 16,200 1,246
Lincare Holdings, Inc. (a) 16,000 1,200
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
HEALTH - CONTINUED
MEDICAL FACILITIES MANAGEMENT - CONTINUED
PacifiCare Health Systems, Inc. Class B 2,300 $ 190
Total Renal Care Holdings, Inc. (a) 62,668 1,924
5,027
TOTAL HEALTH 121,118
INDUSTRIAL MACHINERY & EQUIPMENT - 3.8%
ELECTRICAL EQUIPMENT - 0.2%
SLI, Inc. 71,000 2,024
Siemens A.G. 8,000 519
2,543
INDUSTRIAL MACHINERY & EQUIPMENT - 3.6%
Ag-Chem Equipment, Inc. (a) 40,600 614
ASM Lithography Holding NV (a) 737,600 28,259
Greenbrier Companies, Inc. 249,600 4,493
Lindsay Manufacturing Co. 119,450 5,554
Manitowoc Co., Inc. 234,800 9,627
Mettler-Toledo International, Inc. 106,600 2,025
Stanley Works 142,100 6,750
57,322
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 59,865
MEDIA & LEISURE - 9.7%
BROADCASTING - 6.4%
BHC Communications, Inc. Class A 104,000 14,456
Cablevision Systems Corp. Class A (a) 207,600 11,496
Chancellor Media Corp. (a) 24,200 1,012
Chris-Craft Industries, Inc. 152,730 8,028
Clear Channel Communications, Inc. (a) 67,900 6,510
Comcast Corp. Class A special 78,700 2,698
Cox Communications, Inc. Class A (a) 148,600 6,492
Cox Radio, Inc. Class A (a) 15,800 666
Metromedia Fiber Network, Inc. Class A 35,300 1,443
PanAmSat Corp. (a) 57,100 3,119
RCN Corp. 181,600 3,904
TCA Cable TV, Inc. 157,800 9,616
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
MEDIA & LEISURE - CONTINUED
BROADCASTING - CONTINUED
Tele-Communications, Inc.:
(TCI Group) Series A 63,800 $ 2,189
(TCI Ventures Group) Series A (a) 366,300 6,376
Time Warner, Inc. 179,100 13,936
USA Networks, Inc. (a) 54,000 1,323
United Video Satellite Group A (a) 15,700 611
Westwood One, Inc. (a) 225,700 6,037
99,912
ENTERTAINMENT - 0.6%
Bally Total Fitness Holding Corp. (a) 20,500 661
News Corp. Ltd. ADR 120,400 2,965
Premier Parks, Inc. (a) 98,700 5,243
8,869
LEISURE DURABLES & TOYS - 0.3%
Champion Enterprises, Inc. (a) 29,300 789
Mattel, Inc. 86,400 3,273
4,062
LODGING & GAMING - 1.2%
Harrah's Entertainment, Inc. (a) 103,400 2,585
Hilton Hotels Corp. 133,900 4,209
International Speedway Corp.:
Class A 31,700 967
Class B 135,300 4,110
Speedway Motorsports (a) 236,800 6,201
18,072
PUBLISHING - 0.8%
Dun & Bradstreet Corp. 94,900 3,203
US WEST Media Group (a) 257,500 9,543
12,746
RESTAURANTS - 0.4%
Buffets, Inc. (a) 287,700 4,693
Papa John's International, Inc. (a) 27,300 1,136
Sizzler International, Inc. (a) 314,800 866
6,695
TOTAL MEDIA & LEISURE 150,356
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
NONDURABLES - 3.0%
AGRICULTURE - 1.0%
DEKALB Genetics Corp. Class B 166,300 $ 15,944
BEVERAGES - 0.3%
Brown-Forman Corp. Class B 49,500 2,853
Celestial Seasonings, Inc. (a) 12,900 582
Pure World, Inc. (a) 66,800 981
4,416
FOODS - 0.6%
Raisio Group PLC 6,200 1,159
Tootsie Roll Industries, Inc. 101,412 7,739
Wrigley (Wm.) Jr. Co. 10,200 982
9,880
HOUSEHOLD PRODUCTS - 1.1%
Avon Products, Inc. 107,900 8,827
Benckiser NV Class B 17,000 964
Luxottica Group Spa sponsored ADR 73,100 1,266
Nu Skin Asia Pacific, Inc. Class A (a) 58,500 1,521
Safeskin Corp. (a) 107,100 3,749
16,327
TOBACCO - 0.0%
Souza Cruz Industria Comerico 50,000 343
TOTAL NONDURABLES 46,910
RETAIL & WHOLESALE - 6.7%
APPAREL STORES - 0.4%
Abercrombie & Fitch Co. Class A 74,428 3,145
Gap, Inc. 27,300 1,474
Wet Seal, Inc. Class A (a) 48,100 1,443
6,062
DRUG STORES - 1.0%
General Nutrition Companies, Inc. (a) 393,800 12,429
Walgreen Co. 91,100 3,206
15,635
GENERAL MERCHANDISE STORES - 0.5%
Costco Companies, Inc. (a) 38,000 2,199
K mart Corp. (a) 136,000 2,635
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
RETAIL & WHOLESALE - CONTINUED
GENERAL MERCHANDISE STORES - CONTINUED
Penney (J.C.) Co., Inc. 36,400 $ 2,614
Wal-Mart Stores, Inc. 10,300 568
8,016
GROCERY STORES - 0.5%
United Natural Foods, Inc. (a) 39,500 1,037
Whole Foods Market, Inc. (a) 131,000 7,205
8,242
RETAIL & WHOLESALE, MISCELLANEOUS - 4.3%
Barnes & Noble, Inc. (a) 161,000 5,454
Best Buy Co., Inc. (a) 1,633,400 53,290
Handleman Co. 17,000 208
Hello Direct, Inc. (a) 9,300 64
N2K, Inc. 17,100 337
New West Eyeworks, Inc. (a) 30,700 315
Trans World Entertainment Corp. (a) 68,800 2,485
Tele-Communications, Inc. (Liberty Media Group) Series A (a) 127,600
4,211
66,364
TOTAL RETAIL & WHOLESALE 104,319
SERVICES - 5.3%
ADVERTISING - 2.2%
CMG Information Services, Inc. (a) 753,400 33,432
Lamar Advertising Co. Class A (a) 17,150 545
Outdoor Systems, Inc. (a) 21,200 636
34,613
LEASING & RENTAL - 1.5%
Ryder Systems, Inc. 37,200 1,267
Viacom, Inc. Class B (non-vtg.)(a) 385,000 21,175
22,442
PRINTING - 0.0%
Schawk, Inc. Class A 12,100 182
SERVICES - 1.6%
Abacus Direct Corp. (a) 22,200 1,113
Assisted Living Concepts, Inc. (a) 54,700 882
Balanced Care Corp. 8,000 64
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
SERVICES - CONTINUED
SERVICES - CONTINUED
Bright Horizons, Inc. 31,300 $ 783
Computer Horizons Corp. (a) 211,700 7,072
Day Runner, Inc. (a) 23,000 506
Devry, Inc. (a) 72,600 2,890
Hagler Bailly, Inc. 72,000 1,980
Medpartners, Inc. 34,100 305
Regent Assisted Living, Inc. (a) 10,100 72
Snyder Communications, Inc. (a) 119,200 4,804
Sotheby's Holdings, Inc. Class A 193,900 4,460
Zebra Technologies Corp. Class A (a) 8,500 326
25,257
TOTAL SERVICES 82,494
TECHNOLOGY - 17.9%
COMMUNICATIONS EQUIPMENT - 1.3%
Cisco Systems, Inc. (a) 106,950 8,088
Intermedia Communications, Inc. (a) 105,500 7,820
Level One Communications, Inc. (a) 15,000 400
Lucent Technologies, Inc. 10,300 731
Mitel Corp. (a) 157,800 2,469
Northern Telecom Ltd. 17,000 1,089
Planktonic, Inc. (a) 10,200 467
21,064
COMPUTER SERVICES & SOFTWARE - 9.9%
At Home Corp., Series A 190,800 6,630
Avant! Corp. 6,800 177
BMC Software, Inc. (a) 106,800 4,919
BEA Systems, Inc. (a) 199,000 3,992
CSG Systems International, Inc. (a) 63,200 2,700
Cadence Design Systems, Inc. (a) 249,300 8,788
Cambridge Technology Partners Massachusetts, Inc. (a) 96,100 4,820
Ciber, Inc. (a) 20,700 664
Computer Task Group, Inc. 200,900 6,353
Compuware Corp. (a) 164,300 7,548
Data Transmission Network Corp. (a) 121,300 4,670
Documentum, Inc. (a) 10,600 500
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
COMPUTER SERVICES & SOFTWARE - CONTINUED
Galileo International, Inc. 20,600 $ 811
HBO & Co. 78,900 4,554
Industrial-Matematik International Corp. (a) 360,200 5,786
International Telecommunications Data Systems, Inc. 57,700 1,421
J.D. Edwards & Co. 33,700 1,240
Keane, Inc. (a) 394,400 17,698
Lycos, Inc. (a) 145,175 7,699
Manugistics Group, Inc. (a) 50,500 1,438
Microsoft Corp. (a) 104,900 8,896
PeopleSoft, Inc. (a) 45,900 2,005
Quickresponse Services, Inc. (a) 48,800 1,731
Rational Software Corp. 78,200 1,193
RealNetworks, Inc. 3,600 83
SEI Corp. 5,900 394
Sabre Group Holdings, Inc. Class A (a) 103,300 3,622
Sapient Corp. 25,400 1,137
Saville Systems Ireland PLC sponsored ADR (a) 49,000 1,957
Siebel Systems, Inc. (a) 256,100 5,826
Synopsys, Inc. (a) 152,700 6,557
Systems Software Associates, Inc. (a) 167,900 1,228
Transaction Systems Architects (a) 85,500 3,463
USCS International, Inc. (a) 98,400 1,851
Viasoft, Inc. (a) 270,900 4,182
Vocaltec Ltd. (a) 10,700 173
Yahoo, Inc. (a) 154,600 16,928
153,634
COMPUTERS & OFFICE EQUIPMENT - 3.4%
Dell Computer Corp. (a) 49,800 4,104
Diebold, Inc. 383,712 11,224
Fore Systems, Inc. (a) 477,600 10,507
HMT Technology Corp. 65,600 763
Hutchinson Technology, Inc. (a) 499,600 12,490
International Business Machines Corp. 22,100 2,594
Seagate Technology (a) 76,900 1,778
Symbol Technologies, Inc. 67,150 2,363
Unisys Corp. (a) 211,800 5,189
Western Digital Corp. 85,200 1,448
52,460
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
ELECTRONICS - 3.3%
Analog Devices, Inc. (a) 255,300 $ 6,303
Linear Technology Corp. 166,200 11,624
Micron Technology, Inc. (a) 521,000 12,276
Rambus, Inc. 70,500 2,725
Semtech Corp. (a) 57,200 1,201
Supertex, Inc. (a) 56,500 607
Tokyo Electron Ltd. 122,000 3,866
Vitesse Semiconductor Corp. (a) 255,900 6,557
Xilinx, Inc. (a) 145,500 5,534
50,693
TOTAL TECHNOLOGY 277,851
TRANSPORTATION - 3.0%
AIR TRANSPORTATION - 1.6%
US Airways Group, Inc. (a) 363,400 25,438
RAILROADS - 1.1%
Canadian National Railway Co. 72,500 4,289
Kansas City Southern Industries, Inc. 203,300 8,615
Trinity Industries, Inc. 83,300 3,978
16,882
SHIPPING - 0.1%
Knightsbridge Tankers Ltd. 25,000 722
TRUCKING & FREIGHT - 0.2%
C.H. Robinson Worldwide, Inc. 13,800 319
Hunt (J.B.) Transport Services, Inc. 17,000 509
USFreightways Corp. 60,700 1,912
2,740
TOTAL TRANSPORTATION 45,782
UTILITIES - 8.0%
CELLULAR - 1.9%
Nextel Communications, Inc. Class A (a) 443,200 10,443
SkyTel Communications, Inc. 36,600 828
Teleglobe, Inc. 139,000 7,208
Vodafone Group PLC sponsored ADR 93,500 10,273
28,752
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
UTILITIES - CONTINUED
ELECTRIC UTILITY - 0.9%
Black Hills Corp. 188,550 $ 4,136
Montana Power Co. 144,400 5,235
Niagara Mohawk Power Corp. (a) 409,600 5,069
14,440
TELEPHONE SERVICES - 5.2%
BC Telecom, Inc. 58,200 2,169
Cable & Wireless Communications PLC sponsored ADR (a) 35,900 1,384
Cable & Wireless PLC ADR 107,700 3,736
Comsat Corp., Series 1 84,300 2,940
EXCEL Communications, Inc. (a) 97,700 2,149
IXC Communications, Inc. 124,400 5,423
LCI International, Inc. (a) 166,300 6,224
McLeodUSA, Inc. Class A 40,000 1,660
Qwest Communications International, Inc. 100,500 3,323
Tel-Save Holdings, Inc. (a) 59,600 1,177
Telecom Argentina Class B sponsored ADR 96,500 2,992
Telebras sponsored ADR 251,500 26,816
Teleport Communications Group, Inc. Class A (a) 174,600 9,767
Winstar Communications, Inc. (a) 98,900 3,709
WorldCom, Inc. (a) 173,000 7,872
81,341
TOTAL UTILITIES 124,533
TOTAL COMMON STOCKS
(Cost $1,174,915) 1,483,371
NONCONVERTIBLE PREFERRED STOCKS - 0.2%
UTILITIES - 0.2%
TELEPHONE SERVICES - 0.2%
Telecom Italia Mobile Spa de Risp
(Cost $916) 663,200 2,411
CASH EQUIVALENTS - 4.2%
SHARES VALUE (NOTE 1)
(000S)
Taxable Central Cash Fund (b)
(Cost $65,832) 65,832,261 $ 65,832
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $1,241,663) $ 1,551,614
LEGEND
(a) Non-income producing
(b) At period end, the seven-day yield of the Taxable Central Cash
Fund was 5.56%. The yield refers to the income earned by investing in
the fund over the seven-day period, expressed as an annual percentage.
INCOME TAX INFORMATION
At May 31, 1998, the aggregate cost of investment securities for
income tax purposes was $1,242,030,000 Net unrealized appreciation
aggregated $309,584,000, of which $363,190,000 related to appreciated
investment securities and $53,606,000 related to depreciated
investment securities.
OTHER INFORMATION
Distribution of investments by country of issue, as a percentage of
total value of investment in securities, is as follows:
United States 89.5%
France 2.0
Netherlands 1.9
Brazil 1.8
Canada 1.1
Italy 1.1
Others (individually less than 1%) 2.6
TOTAL 100.0%
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF ASSETS AND LIABILITIES
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNTS) MAY 31, 1998 (UNAUDITED)
ASSETS
INVESTMENT IN SECURITIES, AT VALUE (COST $1,241,663) - $ 1,551,614
SEE ACCOMPANYING SCHEDULE
RECEIVABLE FOR INVESTMENTS SOLD 21,334
RECEIVABLE FOR FUND SHARES SOLD 1,407
DIVIDENDS RECEIVABLE 1,040
INTEREST RECEIVABLE 196
OTHER RECEIVABLES 63
TOTAL ASSETS 1,575,654
LIABILITIES
PAYABLE FOR INVESTMENTS PURCHASED $ 12,121
PAYABLE FOR FUND SHARES REDEEMED 2,958
ACCRUED MANAGEMENT FEE 945
OTHER PAYABLES AND ACCRUED EXPENSES 330
TOTAL LIABILITIES 16,354
NET ASSETS $ 1,559,300
NET ASSETS CONSIST OF:
PAID IN CAPITAL $ 1,121,316
ACCUMULATED NET INVESTMENT LOSS (1,795)
ACCUMULATED UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON 129,828
INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS 309,951
AND ASSETS AND LIABILITIES IN FOREIGN CURRENCIES
NET ASSETS, FOR 65,284 SHARES OUTSTANDING $ 1,559,300
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE $23.88
($1,559,300 (DIVIDED BY) 65,284 SHARES)
MAXIMUM OFFERING PRICE PER SHARE (100/97.00 OF $23.88) $24.62
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS SIX MONTHS ENDED MAY 31, 1998 (UNAUDITED)
INVESTMENT INCOME $ 4,218
DIVIDENDS
INTEREST 1,572
TOTAL INCOME 5,790
EXPENSES
MANAGEMENT FEE $ 5,109
BASIC FEE
PERFORMANCE ADJUSTMENT 876
TRANSFER AGENT FEES 1,420
ACCOUNTING FEES AND EXPENSES 316
NON-INTERESTED TRUSTEES' COMPENSATION 4
CUSTODIAN FEES AND EXPENSES 26
REGISTRATION FEES 43
AUDIT 21
LEGAL 4
MISCELLANEOUS 1
TOTAL EXPENSES BEFORE REDUCTIONS 7,820
EXPENSE REDUCTIONS (235) 7,585
NET INVESTMENT INCOME (LOSS) (1,795)
REALIZED AND UNREALIZED GAIN (LOSS)
NET REALIZED GAIN (LOSS) ON:
INVESTMENT SECURITIES 134,653
FOREIGN CURRENCY TRANSACTIONS (21) 134,632
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON:
INVESTMENT SECURITIES 32,210
ASSETS AND LIABILITIES IN FOREIGN CURRENCIES 1 32,211
NET GAIN (LOSS) 166,843
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 165,048
FROM OPERATIONS
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
AMOUNTS IN THOUSANDS SIX MONTHS ENDED YEAR ENDED
MAY 31, 1998 NOVEMBER 30,
(UNAUDITED) 1997
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS $ (1,795) $ (1,894)
NET INVESTMENT INCOME (LOSS)
NET REALIZED GAIN (LOSS) 134,632 223,001
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) 32,211 28,072
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 165,048 249,179
FROM OPERATIONS
DISTRIBUTIONS TO SHAREHOLDERS FROM NET REALIZED GAINS (182,103) (33,239)
SHARE TRANSACTIONS 229,900 730,532
NET PROCEEDS FROM SALES OF SHARES
REINVESTMENT OF DISTRIBUTIONS 176,758 32,549
COST OF SHARES REDEEMED (359,989) (715,879)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM 46,669 47,202
SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 29,614 263,142
NET ASSETS
BEGINNING OF PERIOD 1,529,686 1,266,544
END OF PERIOD (INCLUDING ACCUMULATED NET INVESTMENT LOSS $ 1,559,300 $ 1,529,686
OF $1,795 AND $0, RESPECTIVELY)
OTHER INFORMATION
SHARES
SOLD 9,647 31,323
ISSUED IN REINVESTMENT OF DISTRIBUTIONS 8,371 1,637
REDEEMED (15,230) (31,384)
NET INCREASE (DECREASE) 2,788 1,576
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED YEARS ENDED NOVEMBER 30,
MAY 31, 1998
(UNAUDITED) 1997 1996 1995 1994 1993 H
SELECTED PER-SHARE DATA
NET ASSET VALUE, $ 24.48 $ 20.79 $ 18.11 $ 12.30 $ 11.97 $ 10.00
BEGINNING OF PERIOD
INCOME FROM INVESTMENT
OPERATIONS
NET INVESTMENT (.03) D (.03) D (.03) D (.02) D, E (.01) D (.01)
INCOME (LOSS)
NET REALIZED AND 2.35 4.27 4.15 6.12 .64 1.98
UNREALIZED GAIN
(LOSS)
TOTAL FROM INVESTMENT 2.32 4.24 4.12 6.10 .63 1.97
OPERATIONS
LESS DISTRIBUTIONS
FROM NET REALIZED (2.92) (.55) (1.44) (.29) (.30) -
GAIN
NET ASSET VALUE, $ 23.88 $ 24.48 $ 20.79 $ 18.11 $ 12.30 $ 11.97
END OF PERIOD
TOTAL RETURN B, C 11.08% 21.01% 24.88% 50.92% 5.33% 19.70%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF $ 1,559 $ 1,530 $ 1,267 $ 544 $ 312 $ 254
PERIOD (000 OMITTED)
RATIO OF EXPENSES TO 1.00% A .99% 1.07% 1.20% 1.32% 1.34% A
AVERAGE NET ASSETS
RATIO OF EXPENSES TO .97% A, F .94% F 1.03% F 1.18% F 1.29% F 1.32% A, F
AVERAGE NET ASSETS
AFTER EXPENSE
REDUCTIONS
RATIO OF NET INVESTMENT (.23)% A (.13)% (.17)% (.15)% (.05)% (.10)% A
INCOME (LOSS) TO
AVERAGE NET ASSETS
PORTFOLIO TURNOVER RATE 134% A 142% 158% 176% 199% 204% A
AVERAGE COMMISSION $ .0400 $ .0396 $ .0368
RATE G
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E INVESTMENT INCOME (LOSS) PER SHARE REFLECTS A SPECIAL DIVIDEND WHICH
AMOUNTED TO $0.01 PER SHARE.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
G FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY
FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES
EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION
RATE STRUCTURES MAY DIFFER.
H FOR THE PERIOD DECEMBER 28, 1992 (COMMENCEMENT OF OPERATIONS) TO
NOVEMBER 30, 1993.
NOTES TO FINANCIAL STATEMENTS
For the period ended May 31, 1998 (Unaudited)
1. 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. Effective the close of business on May 15,
1996, the fund was closed to new accounts. 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 financial statements have been
prepared in conformity with generally accepted accounting principles
which require management to make certain estimates and assumptions at
the date of the financial statements. The following summarizes the
significant accounting policies of the 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 with
remaining maturities of sixty days or less for which quotations are
not readily available are valued at amortized cost or original cost
plus accrued interest, both of which approximate current value.
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.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
date and settlement on purchases and sales of securities. The effects
of changes in foreign currency exchange rates on investments in
securities 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 substantially 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. Non-cash
dividends included in dividend income, if any, are recorded at the
fair market value of the securities received. 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
among 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, which may result in
distribution reclassifications, are primarily due to differing
treatments for foreign currency transactions, net operating losses,
partnerships, non-taxable dividends 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.
Accumulated net investment loss and accumulated undistributed net
realized gain (loss) on investments and foreign currency transactions
may include temporary book and tax basis differences that will reverse
in a subsequent period. Any taxable income or gain remaining at fiscal
year end is distributed in the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the contracts'
terms. The U.S. dollar value of foreign currency contracts is
determined using contractual currency exchange rates established at
the time of each trade.
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 Fidelity Management & Research Company
(FMR), may transfer uninvested cash balances into one or more joint
trading accounts. These balances are invested in one or more
repurchase agreements for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are
2. OPERATING POLICIES - CONTINUED
REPURCHASE AGREEMENTS - CONTINUED
marked-to-market daily and maintained at a value at least equal to the
principal amount of the repurchase agreement (including accrued
interest). FMR, the fund's investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
TAXABLE CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by
the SEC, the fund may invest in the Taxable Central Cash Fund (the
Cash Fund) managed by Fidelity Investments Money Management, Inc.,
(formerly FMR Texas, Inc.) an affiliate of FMR. The Cash Fund is an
open-end money market fund available only to investment companies and
other accounts managed by FMR and its affiliates. The Cash Fund seeks
preservation of capital, liquidity, and current income by investing in
U.S. Treasury securities and repurchase agreements for these
securities. Income distributions from the Cash Fund are declared daily
and paid monthly from net interest income. Income distributions earned
by the fund are recorded as interest income in the accompanying
financial statements.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $1,003,694,000 and $1,095,333,000, respectively.
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 .2500% to
.5200% for the period. The annual individual fund fee rate is .35%. In
the event that these rates were lower than the contractual rates in
effect during the period, FMR voluntarily implemented the above rates,
as they resulted in the same or a lower management fee. The basic fee
is subject to a performance adjustment (up to a maximum of
(plus/minus).20% of the fund's average net assets over the performance
period) 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 annualized rate of .76% 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 $446,000 on sales of shares of the fund.
TRANSFER AGENT FEES. Fidelity Service Company, Inc. (FSC), an
affiliate of FMR, is the fund's transfer, dividend disbursing and
shareholder servicing agent. FSC receives account fees and asset-based
fees that vary according to
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
TRANSFER AGENT FEES - CONTINUED
account size and type of account. FSC pays for typesetting, printing
and mailing of all shareholder reports, except proxy statements. For
the period, the transfer agent fees were equivalent to an annualized
rate of .18% of average net assets.
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 $186,000 for the
period.
5. 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 $221,000 under this arrangement.
In addition, the fund has entered into arrangements with its custodian
and transfer agent whereby credits realized as a result of uninvested
cash balances were used to reduce a portion of the fund's expenses.
During the period, the fund's custodian and transfer agent fees were
reduced by $3,000 and $11,000, respectively, under these arrangements.
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research
(U.K.) Inc., London, England
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Abigail P. Johnson, Vice President
Neal P. Miller, Vice President
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
ADVISORY BOARD
J. Gary Burkhead
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Company, Inc.
Boston, MA
* INDEPENDENT TRUSTEES
CUSTODIAN
The Chase Manhattan Bank
New York, NY
FIDELITY'S GROWTH FUNDS
Blue Chip Growth Fund
Capital Appreciation Fund
Contrafund
Contrafund II
Disciplined Equity Fund
Dividend Growth Fund
Emerging Growth Fund
Export and Multinational Fund
Fidelity Fifty
Growth Company Fund
Large Cap Stock Fund
Low-Priced Stock Fund
Magellan(registered trademark) Fund
Mid-Cap Stock Fund
New Millennium(registered trademark) Fund
OTC Portfolio
Retirement Growth Fund
Small Cap Selector
Small Cap Stock Fund
Stock Selector
TechnoQuant Growth Fund
SM
Trend Fund
Value Fund
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Exchanges/Redemptions 1-800-544-7777
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)
TouchTone Xpress (registered trademark) 1-800-544-5555
AUTOMATED LINE FOR QUICKEST SERVICE
