FIDELITY FINANCIAL TRUST, N-30D, 1995-01-12

FIDELITY FINANCIAL TRUST
N-30D, 1995-01-12

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(2_FIDELITY_LOGOS)FIDELITY

CONVERTIBLE SECURITIES
FUND
ANNUAL REPORT
NOVEMBER 30, 1994
CONTENTS

PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.

PERFORMANCE 4 How the fund has done over time.

FUND TALK 6 The manager's review of fund
performance, strategy and outlook.

INVESTMENT CHANGES 9 A summary of major shifts in the
fund's investments over the past six
months.

INVESTMENTS 10 A complete list of the fund's
investments with their market
values.

FINANCIAL STATEMENTS 18 Statements of assets and liabilities,
operations, and changes in net
assets, as well as financial
highlights.

NOTES 22 Notes to the financial statements.

REPORT OF INDEPENDENT 27 The auditor's opinion.
ACCOUNTANTS

THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMA-
TION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED FOR
DISTRIBUTION TO
PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN
EFFECTIVE
PROSPECTUS. MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, THE FEDERAL
RESERVE
BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO IN-
VESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. NEITHER THE FUND
NOR FIDELITY
DISTRIBUTORS CORPORATION IS A BANK. FOR MORE INFORMATION ON ANY FIDELITY
FUND, INCLUDING
CHARGES AND EXPENSES, CALL 1-800-544-8888 FOR A FREE PROSPECTUS. READ IT
CAREFULLY BEFORE
YOU INVEST OR SEND MONEY.
PRESIDENT'S MESSAGE

DEAR SHAREHOLDER:
The unsettling period that began for investors when the Federal Reserve
Board raised short-term interest rates in February has continued into the
fourth quarter of 1994. The Board raised the federal funds rate - the rate
banks charge each other for overnight loans - five times from February
through August, taking it from 3.00% to 4.75%. A sixth increase in November
lifted the rate to 5.50%. The Fed rate hikes were intended to forestall
inflation that could result from an improving U.S. economy, and they led to
below-average returns for many stocks and negative returns for many bond
investments.
The volatility we have witnessed this year follows a period in which there
was a nearly perfect investing environment. Although there was a
late-summer rally in stocks and, to a lesser extent in bond markets, it is
impossible to predict where interest rates might go or what might happen in
the markets in the months ahead. That's why it probably is a good time to
again review your investment portfolio and how well it matches your goals.
If you can leave your money invested over the long term, you can avoid much
of the volatility that generally accompanies the stock market in the short
term, as we have been witnessing this year. You also can help to manage
risk through diversification of investments. A stock fund is already
diversified because it invests in many issues. You can diversify even
further by placing some of your money in several different stock funds or
in other investment categories, such as bonds.
If you have a short investment time horizon, you might want to consider
moving some of your investment into a money market fund, which seeks income
and a stable share price by investing in high-quality, short-term
investments. As with any mutual fund, of course, there is no assurance that
a money market fund will achieve its goal, and it is important to remember
that money market funds are not insured by any agency of the U.S.
government.
Finally, no matter what your investment horizon or portfolio diversity, it
makes good sense to follow a regular investment plan - investing a certain
amount of money at the same time each month or quarter - and to review your
portfolio periodically, as we have discussed here. A periodic investment
plan will not, of course, assure a profit or protect against a loss.
If you have any questions, please call us at 1-800-544-8888. We stand ready
to provide the information you need to make the investments that are right
for you.
Best regards,
Edward C. Johnson 3d
PERFORMANCE: THE BOTTOM LINE

There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each
performance figure includes changes in a fund's share price, plus
reinvestment of any dividends (income) and capital gains (the profits the
fund earns when it sells securities that have grown in value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1994 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND

Convertible Securities -0.54% 93.14% 165.61%

Merrill Lynch Convertible Securities Index -5.23% 67.15% n/a

Average Convertible Securities Fund -2.22% 58.13% n/a

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year, five years, or since the fund
started on January 5, 1987. For example, if you invested $1,000 in a fund
that had a 5% return over the past year, you would end up with $1,050. You
can compare the fund's returns to the performance of the Merrill Lynch
Convertible Securities Index - a broad measure of the performance of
convertible securities. You can also look at the average convertible
securities fund, which currently reflects the performance of 24 convertible
securities funds tracked by Lipper Analytical Services. These benchmarks
include reinvested dividends and capital gains, if any, and exclude the
effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1994 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND

Convertible Securities -0.54% 14.07% 13.14%

Merrill Lynch Convertible Securities Index -5.23% 10.82% n/a

Average Convertible Securities Fund -2.22% 9.45% n/a

AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.

$10,000 OVER LIFE OF FUND
Convertible SecuritieFirst Boston Conver
01/31/87 10000.00 10000.00
02/28/87 10350.20 10414.00
03/31/87 10437.75 10521.26
04/30/87 10282.10 10523.37
05/31/87 10252.92 10554.94
06/30/87 10429.22 10775.54
07/31/87 10949.70 11215.18
08/31/87 11195.21 11439.48
09/30/87 11119.15 11271.32
10/31/87 9020.63 9151.19
11/30/87 9000.74 8857.43
12/31/87 9253.19 9308.28
01/31/88 9598.15 9567.05
02/29/88 9993.85 10007.13
03/31/88 10126.04 9973.11
04/30/88 10321.56 10179.55
05/31/88 10249.53 10078.77
06/30/88 10675.20 10466.80
07/31/88 10602.15 10357.95
08/31/88 10445.63 10174.61
09/30/88 10582.76 10356.74
10/31/88 10752.08 10488.27
11/30/88 10593.34 10317.31
12/31/88 10723.60 10556.67
01/31/89 11181.78 11030.67
02/28/89 11301.78 11028.46
03/31/89 11630.81 11171.83
04/30/89 12061.99 11547.21
05/31/89 12338.38 11781.61
06/30/89 12437.47 11695.61
07/31/89 12997.21 12031.27
08/31/89 13422.61 12295.96
09/30/89 13433.81 12188.99
10/31/89 13161.96 11803.81
11/30/89 13377.18 11996.22
12/31/89 13542.00 12009.41
01/31/90 13040.01 11531.44
02/28/90 13191.78 11683.65
03/31/90 13450.80 11862.41
04/30/90 13344.42 11597.88
05/31/90 13876.30 12160.38
06/30/90 14031.24 12145.78
07/31/90 13935.54 12037.69
08/31/90 13014.48 11344.32
09/30/90 12372.24 10848.57
10/31/90 12129.89 10442.83
11/30/90 12760.01 10953.49
12/31/90 13150.08 11182.42
01/31/91 13965.01 11684.51
02/28/91 14866.38 12382.07
03/31/91 15261.64 12685.43
04/30/91 15436.49 12813.55
05/31/91 15961.03 13192.84
06/30/91 15657.98 12824.76
07/31/91 16289.35 13312.10
08/31/91 16908.09 13808.64
09/30/91 17190.33 13783.78
10/31/91 17930.53 13982.27
11/30/91 17164.81 13645.30
12/31/91 18244.09 14438.09
01/31/92 19164.97 14838.02
02/29/92 19792.24 15222.33
03/31/92 19458.45 15095.98
04/30/92 19620.15 15268.08
05/31/92 19997.46 15545.96
06/30/92 19878.15 15472.89
07/31/92 20422.38 15898.39
08/31/92 20027.81 15798.23
09/30/92 20504.91 16114.20
10/31/92 20985.60 16152.87
11/30/92 21658.57 16619.69
12/31/92 22261.35 16988.65
01/31/93 23005.78 17518.69
02/28/93 22604.93 17587.02
03/31/93 23729.83 18230.70
04/30/93 23946.74 18227.05
05/31/93 24539.62 18546.03
06/30/93 24511.54 18722.22
07/31/93 24759.72 18915.05
08/31/93 25343.67 19433.33
09/30/93 25638.10 19652.92
10/31/93 26227.48 20116.73
11/30/93 25976.99 19812.97
12/31/93 26221.18 20139.88
01/31/94 26874.72 20717.90
02/28/94 26444.34 20388.48
03/31/94 25286.79 19556.63
04/30/94 24867.76 19200.70
05/31/94 24771.06 19242.94
06/30/94 24752.41 19025.50
07/31/94 25193.26 19562.02
08/31/94 26532.11 19947.39
09/30/94 26366.39 19594.32
10/31/94 26531.69 19762.83
11/30/94 25853.94 19045.44

$10,000 OVER LIFE OF FUND: Let's say you invested $10,000 in Fidelity
Convertible Securities Fund on January 31, 1987, shortly after the fund
started. As the chart shows, by November 30, 1994, the value of your
investment would have grown to $25,837 - a 158.37% increase on your initial
investment. For comparison, look at how the First Boston Convertible
Securities Index did over the same period. (The Merrill Lynch Convertible
Securities Index does not extend as far back as the fund's start date, and
therefore is not appropriate for this comparison.) With dividends
reinvested, the same $10,000 investment in the First Boston Convertible
Securities Index would have grown to $19,045 - a 90.45% 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
growth in the long run and
volatility in the short run. In
turn, the share price and
return of a fund that invests in
stocks or bonds 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

FUND FACTS
GOAL: a high total return
(income plus changes in
share price) by investing at
least 65% of assets in
convertible securities
START DATE: January 5, 1987
SIZE: as of November 30,
1994, more than $903 million
MANAGER: Andrew Offit,
since March 1992; manager,
Select Health Care, May
1990 - March 1992, Select
Biotechnology, May 1989 -
May 1990; analyst,
1987-1989; joined Fidelity in
1987
(checkmark)
ANDY OFFIT ON HEALTH CARE:
"During the second half of
1994, health care stocks have
begun to outperform the
market, and I believe this will
continue in 1995.
A slowing U.S. economy,
easing of political pressure and
a relative price/earnings ratio at
the bottom
of the historical range should
help the stocks over the next
12 months. I own several
small-capitalization issues -
Mentor Corp., Maxicare
Health, and Abbey Healthcare
- - and I am most excited about
the larger names like Chiron
and especially U.S. Surgical.
U.S. Surgical is a turnaround in
an industry with only two
players - surgical stapling. In
January, the company is
expected to report its third
consecutive profitable quarter,
and 1995 sales and earnings
could be well ahead of
expectations."
DISTRIBUTIONS
A total of 13% of the dividends
distributed during the fiscal
year qualifies for the
dividends-received
deductions for corporate
shareholders.The fund will
notify shareholders in January
1995 of the applicable
percentage for use in
preparing 1994 income tax
returns.
INVESTMENT CHANGES

TOP TEN INVESTMENTS AS OF NOVEMBER 30, 1994
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO

RJR Nabisco Holdings Corp. 6.1 -

Chiron Corp. 1.90%, 11/17/00 6.0 -

IVAX Corp. 6 1/2%, 11/15/01 4.7 2.8

U.S. Surgical Corp. $2.20 4.3 2.6

Cellular Communications, Inc. 3.6 -
0%, 7/27/99

US West, Inc. liquid yield option
notes 0%, 6/25/11 3.5 2.0

International Business Machines 3.4 2.2
Corp.

Amoco Canada Petroleum Co.
exchangeable, 7 3/8%, 9/19/13 3.3 1.3

Warner-Lambert Co. 2.9 -

Nelson Thomas, Inc. 5 3/4%, 11/30/99 2.7 0.4

TOP FIVE INDUSTRIES AS OF NOVEMBER 30, 1994
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO

Health 38.1 15.5

Media & Leisure 9.6 6.6

Nondurables 8.9 3.1

Utilities 7.3 2.1

Durables 7.1 8.5

ASSET ALLOCATION
AS OF NOVEMBER 30, 1994* AS OF MAY 31, 1994**
Row: 1, Col: 1, Value: 2.8
Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 26.2
Row: 1, Col: 4, Value: 31.0
Row: 1, Col: 5, Value: 40.0
Row: 1, Col: 1, Value: 10.0
Row: 1, Col: 2, Value: 1.8
Row: 1, Col: 3, Value: 19.1
Row: 1, Col: 4, Value: 30.0
Row: 1, Col: 5, Value: 39.2
Convertible
Securities 71.5%
Common Stocks 26.2%
Nonconvertible
Bonds -
Short-term
investments 2.3%
FOREIGN
INVESTMENTS 1.7%
Convertible
Securities 69.6%
Common Stocks 19.3%
Nonconvertible
Bonds 0.9%
Short-term
investments 10.2%
FOREIGN
INVESTMENTS 9.5%
*
**
INVESTMENTS NOVEMBER 30, 1994

Showing Percentage of Total Value of Investment in Securities

COMMON STOCKS - 26.2%
SHARES VALUE (NOTE 1)
(000S)
BASIC INDUSTRIES - 2.0%
CHEMICALS & PLASTICS - 0.7%
Park Electrochemical Corp. 183,756 $ 5,696
IRON & STEEL - 0.5%
Armco, Inc. (a) 777,900 4,765
METALS & MINING - 0.8%
Alcan Aluminium Ltd. 288,000 7,090
TOTAL BASIC INDUSTRIES 17,551
CONSTRUCTION & REAL ESTATE - 0.2%
BUILDING MATERIALS - 0.2%
Bird Corp. (a)(g) 211,700 1,852
HEALTH - 10.8%
DRUGS & PHARMACEUTICALS - 8.3%
Allergan, Inc. 148,200 4,465
Barr Laboratories, Inc. (a)(g) 754,000 19,416
Pfizer, Inc. 196,400 15,196
Schering-Plough Corp. 120,000 8,985
Warner-Lambert Co. 334,400 25,874
73,936
MEDICAL EQUIPMENT & SUPPLIES - 2.4%
Becton, Dickinson & Co. 157,300 7,433
Mentor Corp. 151,400 2,422
St. Jude Medical, Inc. 284,900 11,360
21,215
MEDICAL FACILITIES MANAGEMENT - 0.1%
IVF America, Inc. (a) 805,500 856
TOTAL HEALTH 96,007
INDUSTRIAL MACHINERY & EQUIPMENT - 0.6%
INDUSTRIAL MACHINERY & EQUIPMENT - 0.0%
Thermwood Corp. (a) 173,000 162
POLLUTION CONTROL - 0.6%
Chemical Waste Management, Inc. (a) 554,000 5,125
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 5,287
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
MEDIA & LEISURE - 2.2%
LEISURE DURABLES & TOYS - 1.4%
Brunswick Corp. 701,900 $ 12,108
LODGING & GAMING - 0.5%
WMS Industries, Inc. (a) 245,400 4,264
RESTAURANTS - 0.3%
Shoney's, Inc. (a) 226,700 3,117
TOTAL MEDIA & LEISURE 19,489
NONDURABLES - 6.7%
HOUSEHOLD PRODUCTS - 0.6%
Tambrands, Inc. 139,200 5,377
TOBACCO - 6.1%
RJR Nabisco Holdings Corp. 8,670,800 54,192
TOTAL NONDURABLES 59,569
TECHNOLOGY - 3.7%
COMPUTER SERVICES & SOFTWARE - 0.2%
Sapiens International Corp. NV (a)(g) 738,500 1,708
COMPUTERS & OFFICE EQUIPMENT - 3.4%
International Business Machines Corp. 427,300 30,231
ELECTRONIC INSTRUMENTS - 0.0%
Vitronics Corp. 200,000 288
ELECTRONICS - 0.1%
RF Power Products, Inc. (a) 211,200 845
TOTAL TECHNOLOGY 33,072
TOTAL COMMON STOCKS
(Cost $233,244) 232,827
CONVERTIBLE PREFERRED STOCKS - 12.1%
CONSTRUCTION & REAL ESTATE - 0.3%
BUILDING MATERIALS - 0.3%
Bird Corp. $1.85 188,200 3,011
CONVERTIBLE PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
DURABLES - 2.1%
TEXTILES & APPAREL - 2.1%
Fieldcrest Cannon, Series A, Inc. $3.00 352,700 $ 18,340
ENERGY - 2.0%
OIL & GAS - 2.0%
Occidental Petroleum Corp., Series A, Indexed $3.00 365,900 18,158
FINANCE - 0.9%
SAVINGS & LOANS - 0.9%
Glendale Federal Bank, Series E, $2.1875 292,400 8,078
HEALTH - 6.6%
DRUGS & PHARMACEUTICALS - 0.3%
Neorx Corp., Series 1, $2.44 126,700 2,344
MEDICAL EQUIPMENT & SUPPLIES - 4.3%
U.S. Surgical Corp. $2.20 (e) 1,468,700 38,186
MEDICAL FACILITIES MANAGEMENT - 2.0%
Maxicare Health Plans, Inc., Series A, $2.25 (e) 407,500 17,675
TOTAL HEALTH 58,205
RETAIL & WHOLESALE - 0.2%
APPAREL STORES - 0.2%
Family Bargain Corp. $.95 144,900 1,359
TOTAL CONVERTIBLE PREFERRED STOCKS
(Cost $103,023) 107,151
CONVERTIBLE BONDS - 59.4%
MOODY'S RATINGS (C) PRINCIPAL
(UNAUDITED) AMOUNT (B) (000S)
BASIC INDUSTRIES - 3.6%
CHEMICALS & PLASTICS - 2.3%
Synetic, Inc. 7%, 12/1/01 B $ 21,950 20,633
METALS & MINING - 1.1%
Freeport McMoran, Inc. 6.55%, 1/15/01 Ba3 10,650 9,505
CONVERTIBLE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B) (000S) (000S)
BASIC INDUSTRIES - CONTINUED
PAPER & FOREST PRODUCTS - 0.2%
Champion International Corp. sinking fund
6 1/2%, 4/15/11 Baa2 $ 2,000 $ 2,138
TOTAL BASIC INDUSTRIES 32,276
DURABLES - 5.0%
AUTOS, TIRES, & ACCESSORIES - 3.3%
Amoco Canada Petroleum Co. exchangeable,
7 3/8%, 9/19/13 Aa3 24,450 29,096
CONSUMER ELECTRONICS - 1.7%
Whirlpool Corp. liquid yield option notes 0%,
5/14/11 Baa1 40,000 14,950
TOTAL DURABLES 44,046
ENERGY - 0.3%
OIL & GAS - 0.3%
Garnet Resources Corp. 9 1/2%,
12/21/98 - 3,000 3,000
FINANCE - 4.1%
CREDIT & OTHER FINANCE - 1.8%
Elan International Finance Ltd. liquid yield option
notes 0%, 10/16/12 Ba2 38,000 15,675
INSURANCE - 2.3%
Horace Mann Educators Corp. 4%, 12/1/94 (f) Baa3 22,400 20,664
TOTAL FINANCE 36,339
HEALTH - 20.7%
DRUGS & PHARMACEUTICALS - 11.6%
Chiron Corp. 1.90%, 11/17/00 (e) Ba3 73,530 53,309
ICN Pharmaceuticals, Inc. 8 1/2%, 11/15/99 B3 7,000 7,840
IVAX Corp. 6 1/2%, 11/15/01 (e) -- 46,247 42,085
103,234
CONVERTIBLE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B) (000S) (000S)
HEALTH - CONTINUED
MEDICAL EQUIPMENT & SUPPLIES - 6.5%
Advanced Medical, Inc. 7 1/4%, 1/15/02 CCC- $ 23,915 $ 13,871
Benson Eyecare Corp. 8%, 5/15/01 B3 23,925 23,327
Mentor Corp. euro 6 3/4%, 7/22/02 - 18,500 19,980
57,178
MEDICAL FACILITIES MANAGEMENT - 2.6%
Abbey Healthcare Group, Inc. euro
6 1/2%, 12/1/02 B2 16,225 19,794
Meris Labs, Inc. 10%, 11/14/97 (d) - 3,150 3,150
22,944
TOTAL HEALTH 183,356
INDUSTRIAL MACHINERY & EQUIPMENT - 1.2%
ELECTRICAL EQUIPMENT - 0.9%
Computer Products Inc. 9 1/2%, 5/15/07 B3 8,061 8,303
INDUSTRIAL MACHINERY & EQUIPMENT - 0.1%
Thermwood Corp. 12%, 2/25/03 - 380 395
POLLUTION CONTROL - 0.2%
Riedel Environmental Technologies, Inc.
7%, 10/11/99 - 4,647 1,859
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 10,557
MEDIA & LEISURE - 7.4%
ENTERTAINMENT - 0.9%
All American Communications, Inc.
6 1/2%, 10/1/03 (e) - 6,900 5,106
Kushner-Locke Co. 8%, 12/15/00 (e) - 3,000 2,880
7,986
LEISURE DURABLES & TOYS - 0.9%
Coleman Worldwide Corp. 2nd liquid
yield option notes 0%, 5/27/13 B2 31,330 8,302
LODGING & GAMING - 2.3%
WMS Industries, Inc. 5 3/4%,
12/1/02 B1 23,950 20,597
CONVERTIBLE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B) (000S) (000S)
MEDIA & LEISURE - CONTINUED
PUBLISHING - 3.3%
Nelson Thomas, Inc. 5 3/4%, 11/30/99 (e) B1 $ 21,575 $ 23,732
Score Board, Inc.:
9%, 9/1/02 - 3,500 3,063
9%, 2/1/03 - 3,000 2,430
29,225
TOTAL MEDIA & LEISURE 66,110
NONDURABLES - 2.2%
TOBACCO - 2.2%
American Brands, Inc. euro 5 3/4%, 4/11/05 A3 17,000 19,423
RETAIL & WHOLESALE - 3.5%
GENERAL MERCHANDISE STORES - 2.8%
General Host Corp. 8%, 2/15/02 B3 15,719 11,789
Profits, Inc. 4 3/4%, 11/01/03 B2 16,900 13,182
24,971
RETAIL & WHOLESALE, MISCELLANEOUS - 0.7%
Intertan, Inc. 9%, 8/30/00 - CAD 6,270 5,924
TOTAL RETAIL & WHOLESALE 30,895
SERVICES - 0.9%
ADVERTISING - 0.9%
Pharmaceutical Marketing Services, Inc.
6 1/4%, 2/1/03 - 12,500 8,375
TECHNOLOGY - 2.3%
COMMUNICATIONS EQUIPMENT - 0.4%
Bolt Beranek & Newman Inc.
6%, 4/1/12 B3 2,600 2,106
Porta Systems Corp. euro 6%, 7/1/02 - 3,925 1,845
3,951
COMPUTER SERVICES & SOFTWARE - 0.6%
Sapiens International Corp. NV euro 5%,
9/20/03 - 12,535 5,264
CONVERTIBLE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B) (000S) (000S)
TECHNOLOGY - CONTINUED
COMPUTERS & OFFICE EQUIPMENT - 1.3%
AST Research, Inc. 0%, 12/14/13 B2 $ 40,000 $ 11,600
TOTAL TECHNOLOGY 20,815
TRANSPORTATION - 0.9%
AIR TRANSPORTATION - 0.1%
Florida West Airlines, Inc. 8%, 3/18/99 - 2,000 800
SHIPPING - 0.8%
Seacor Holdings, Inc. 6%, 7/15/03 (e) B3 7,500 7,500
TOTAL TRANSPORTATION 8,300
UTILITIES - 7.3%
CELLULAR - 3.6%
Cellular Communications, Inc. 0%,
7/27/99 B1 39,300 32,029
TELEPHONE SERVICES - 3.7%
CAM-NET Communications Network
10%, 8/15/97 - 1,750 1,715
US West, Inc. liquid yield option notes
0%, 6/25/11 A3 100,000 30,750
32,465
TOTAL UTILITIES 64,494
TOTAL CONVERTIBLE BONDS
(Cost $538,179) 527,986
REPURCHASE AGREEMENTS - 2.3%
MATURITY
AMOUNT
(000S)
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.71% dated
11/30/94 due 12/1/94 $ 20,068 20,065
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $894,511) $ 888,029
CURRENCY ABBREVIATIONS
CAD - Canadian dollar
LEGEND
(a) Non-income producing.
(b) Principal amount is stated in United States dollars unless otherwise
noted.
(c) Standard & Poor's Corporation credit ratings are used in the absence of
a rating by Moody's Investors Service, Inc.
(d) Restricted securities - Investment in securities not registered under
the Securities Act of 1933 (see Note 2 of Notes to Financial Statements).
Additional information on each holding is as follows:
ACQUISITION ACQUISITION
SECURITY DATE COST
Meris Labs, Inc.
10%,11/14/97 11/14/94 $ 3,150,000
(e) 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 $190,473,000 or 21.1% of net
assets.
(f) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end. The due dates on these types of
securities reflects the next interest rate reset date or, when applicable,
the final maturity date.
(g) Affiliated company (see Note 5 of Notes to Financial Statements).
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total value
of investment in securities, is as follows (ratings are unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 8.9% AAA, A, A 10.6%
Baa 4.3% BBB 2.6%
Ba 8.8% BB 8.8%
B 21.4% B 15.9%
Caa 0.0% CCC 5.8%
Ca, C 0.0% CC, 0.0%
D 0.0%

The percentage not rated by either S&P or Moody's amounted to 12.2%
including long-term debt categorized as other securities. Unrated
securities are not necessarily lower-quality securities.
INCOME TAX INFORMATION
At November 30, 1994, the aggregate cost of investment securities for
income tax purposes was $896,057,000. Net unrealized depreciation
aggregated $8,028,000 of which $34,694,000 related to appreciated
investment securities and $42,722,000 related to depreciated investment
securities.
At November 30, 1994, the fund had a capital loss carryforward of
approximately $2,732,000 all of which will expire on November 30, 2002.
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNT) NOVEMBER 30, 1994

ASSETS

Investment in securities, at value (including repurchase $ 888,029
agreements of $20,065) (cost $894,511) - See
accompanying schedule

Receivable for investments sold 38,500

Receivable for fund shares sold 4,526

Dividends receivable 1,869

Interest receivable 7,799

Other receivables 20

TOTAL ASSETS 940,743

LIABILITIES

Payable for investments purchased $ 34,234

Payable for fund shares redeemed 2,429

Accrued management fee 354

Other payables and accrued expenses 336

TOTAL LIABILITIES 37,353

NET ASSETS $ 903,390

Net Assets consist of:

Paid in capital $ 910,256

Undistributed net investment income 3,928

Accumulated undistributed net realized gain (loss) on (4,347)
investments and foreign currency transactions

Net unrealized appreciation (depreciation) on (6,447)
investments and assets and liabilities in foreign
currencies

NET ASSETS, for 57,786 shares outstanding $ 903,390

NET ASSET VALUE, offering price and redemption price per $15.63
share ($903,390 (divided by) 57,786 shares)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED NOVEMBER 30, 1994

INVESTMENT INCOME $ 15,457
Dividends

Interest (including security lending fees of $62) 37,740

TOTAL INCOME 53,197

EXPENSES

Management fee $ 5,082
Basic fee

Performance adjustment (43)

Transfer agent fees 2,560

Accounting and security lending fees 451

Non-interested trustees' compensation 6

Custodian fees and expenses 174

Registration fees 96

Audit 43

Legal 7

Interest 25

Miscellaneous 24

Total expenses before reductions 8,425

Expense reductions (173) 8,252

NET INVESTMENT INCOME 44,945

REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:

Investment securities 4,057

Foreign currency transactions (2,249) 1,808

Change in net unrealized appreciation (depreciation) on:

Investment securities (53,588)

Assets and liabilities in foreign currencies 35 (53,553)

NET GAIN (LOSS) (51,745)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ (6,800)
FROM OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30,
1994 1993

INCREASE (DECREASE) IN NET ASSETS

Operations $ 44,945 $ 36,160
Net investment income

Net realized gain (loss) 1,808 76,755

Change in net unrealized appreciation (depreciation) (53,553) 16,159

NET INCREASE (DECREASE) IN NET ASSETS RESULTING (6,800) 129,074
FROM OPERATIONS

Distributions to shareholders: (55,183) (30,010)
From net investment income

From net realized gain (60,321) (10,919)

TOTAL DISTRIBUTIONS (115,504) (40,929)

Share transactions 529,406 999,266
Net proceeds from sales of shares

Reinvestment of distributions 103,894 37,828

Cost of shares redeemed (663,888) (481,320)

Net increase (decrease) in net assets resulting from (30,588) 555,774
share transactions

TOTAL INCREASE (DECREASE) IN NET ASSETS (152,892) 643,919

NET ASSETS

Beginning of period 1,056,282 412,363

End of period (including undistributed net investment $ 903,390 $ 1,056,282
income of $3,928 and $9,921, respectively)

OTHER INFORMATION
Shares

Sold 32,841 60,275

Issued in reinvestment of distributions 6,409 2,359

Redeemed (41,370) (28,876)

Net increase (decrease) (2,120) 33,758

</TABLE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED NOVEMBER 30,

1994 1993 1992 1991 1990

SELECTED PER-SHARE DATA

Net asset value, beginning $ 17.63 $ 15.77 $ 13.45 $ 10.53 $ 11.81
of period

Income from Investment
Operations

Net investment income .78 .75 .67 .60 .64

Net realized and unrealized (.86) 2.24 2.66 2.94 (1.15)
gain (loss)

Total from investment (.08) 2.99 3.33 3.54 (.51)
operations

Less Distributions (.91) (.73) (.64) (.62) (.77)
From net investment income

From net realized gain (1.01) (.40) (.37) - -

Total distributions (1.92) (1.13) (1.01) (.62) (.77)

Net asset value, end of period $ 15.63 $ 17.63 $ 15.77 $ 13.45 $ 10.53

TOTAL RETURN A (.54)% 19.94% 26.18% 34.52% (4.61)%

RATIOS AND SUPPLEMENTAL
DATA

Net assets, end of period $ 903 $ 1,056 $ 412 $ 126 $ 57
(in millions)

Ratio of expenses to average .85% .92% .96% 1.17% 1.31%
net assets B

Ratio of expenses to average .86% .92% .96% 1.17% 1.31%
net assets before expense
reductions B

Ratio of net investment 4.61% 4.62% 4.82% 4.99% 5.63%
income to average net
assets

Portfolio turnover rate 318% 312% 258% 152% 223%

</TABLE>

A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
B SEE NOTE 9 OF NOTES TO FINANCIAL STATEMENTS.
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1994

1. SIGNIFICANT ACCOUNTING
POLICIES.
Fidelity Convertible Securities Fund (the fund) is a fund of Fidelity
Financial Trust (the trust) and is authorized to issue an unlimited number
of shares. The trust is registered under the Investment Company Act of
1940, as amended (the 1940 Act), as an open-end management investment
company organized as a Massachusetts business trust. The following
summarizes the significant accounting policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are readily
available are valued at the last sale price, or if no sale price, at the
closing bid price. Securities (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 maturing within sixty days
of their purchase date are valued at amortized cost or original cost plus
accrued interest, both of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases and
sales of securities, income receipts, and expense payments are translated
into U.S. dollars at the prevailing exchange rate on the respective dates
of the transactions.
Effective December 1,1993 the fund adopted Statement of Position (SOP)
93-4: Foreign Currency Accounting and Financial Statement Presentation for
Investment Companies. In accordance with this SOP, reported net realized
gains and losses on foreign currency transactions represent currency gains
and losses realized between the trade and settlement dates on security
transactions and the difference between the amount of net investment income
accrued and the U.S. dollar amount actually received. Further, as permitted
under the SOP, the effects of changes in foreign currency exchange rates on
investments in securities are not segregated in the Statement of Operations
from the effects of changes in market prices of those securities, but are
included with the net realized and unrealized gain or loss on investment
securities.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes all of its taxable income for its fiscal
year. The schedule of investments includes information regarding income
taxes under the caption "Income Tax Information."
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date,
except certain dividends from foreign securities where the ex-dividend date
may have passed, are recorded as soon as the fund is informed of the
ex-dividend date. Interest income, 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 between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
foreign currency transactions, market discount and losses deferred due to
wash sales. The fund also utilized earnings and profits distributed to
shareholders on redemption of shares as a part of the dividends paid
deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect net investment income per share. Accumulated undistributed net
investment income may include temporary book and tax basis differences
which will reverse in a subsequent period. Any taxable income or gain
remaining at fiscal year end is distributed in the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
CHANGE IN ACCOUNTING FOR DISTRIBUTIONS TO SHAREHOLDERS. Effective December
1, 1993, the fund adopted Statement of Position 93-2: Determination,
Disclosure, and Financial Statement Presentation of Income, Capital Gain,
and Return of Capital Distributions by Investment Companies. As a result,
the fund changed the classification of distributions to shareholders to
better disclose the differences between financial statement amounts and
distributions determined in accordance with income tax regulations.
Accordingly, amounts as of the beginning of the fiscal year have been
reclassified to reflect an increase in paid in capital of $9,026,000, an
increase in undistributed net investment income of $2,117,000 and a
decrease in accumulated net realized gain on investments of $11,143,000.
2. OPERATING POLICIES.
FORWARD FOREIGN CURRENCY CONTRACTS. The fund may enter into forward foreign
currency contracts. The U.S. dollar value of forward foreign currency
contracts is determined using forward currency exchange rates supplied by a
quotation service. Losses may arise due to changes in the value of the
foreign currency or if the counterparty does not perform under the
contract.
2. OPERATING POLICIES -
CONTINUED
FORWARD FOREIGN CURRENCY
CONTRACTS - CONTINUED
Purchases and sales of forward foreign currency contracts having the same
settlement date and broker are offset and any realized gain (loss) is
recognized on the date of offset, otherwise gain (loss) is recognized on
settlement date.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying securities, whose market value is required to be at least
102% of the resale price at the time of purchase. The fund's investment
adviser, Fidelity Management & Research Company (FMR), is responsible for
determining that the value of these underlying securities remains at least
equal to the resale price.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission(the SEC), the fund, along with other
affiliated entities of FMR, may transfer uninvested cash balances into one
or more joint trading accounts. These balances are invested in one or more
repurchase agreements that mature in 60 days or less from the date of
purchase, and are collateralized by U.S. Treasury or Federal Agency
obligations.
INTERFUND LENDING PROGRAM. Pursuant to an Exemptive Order issued by the
SEC, the fund, along with other registered investment companies having
management contracts with FMR, may participate in an interfund lending
program. This program provides an alternative credit facility allowing the
fund to borrow from, or lend money to, other participating funds.
RESTRICTED SECURITIES. The fund is permitted to invest in privately placed
restricted securities. These securities 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, restricted securities (excluding 144A issues) amounted
to $3,150,000 or 0.3% of net assets.
3. PURCHASES AND SALES
OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $2,869,735,000 and $2,868,673,000, respectively.
4. FEES AND OTHER
TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, Fidelity Management &
Research Company (FMR) receives a monthly basic fee that is calculated on
the basis of a group fee rate plus a fixed individual fund fee rate applied
to the average net assets of the fund. The group fee rate is the weighted
average of a series of rates and is based on the monthly average net assets
of all the mutual funds advised by FMR. The rates ranged from .2850% to
.5200% for the
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
period December 1, 1993 to July 31, 1994 and .2700% to .5200% for the
period August 1, 1994 to November 30, 1994. In the event that these rates
were lower than the contractual rates in effect during those periods, FMR
voluntarily implemented the above rates, as they resulted in the same or a
lower management fee. The annual individual fund fee rate is .20%.
Effective November 1, 1994, the basic fee is subject to a performance
adjustment (up to a maximum of (plus/minus) .15%) based on the fund's
investment performance as compared to the appropriate index over a
specified period of time. For the period, the management fee was equivalent
to an annual rate of .52% of average net assets after the performance
adjustment.
DISTRIBUTION AND SERVICE PLAN. Pursuant to the Distribution and Service
Plan (the Plan), and in accordance with Rule 12b-1 of the 1940 Act, FMR or
the fund's distributor, Fidelity Distributors Corporation (FDC), an
affiliate of FMR, may use their resources to pay administrative and
promotional expenses related to the sale of the fund's shares. Subject to
the approval of the Board of Trustees, the Plan also authorizes payments to
third parties that assist in the sale of the fund's shares or render
shareholder support services. FMR or FDC has informed the fund that
payments made to third parties under the Plan amounted to $74,000 for the
period.
TRANSFER AGENT FEES. Fidelity Service Co. (FSC), an affiliate of FMR, is
the fund's transfer, dividend disbursing and shareholder servicing agent.
FSC receives fees based on the type, size, number of accounts and the
number of transactions made by shareholders. FSC pays for typesetting,
printing and mailing of all shareholder reports, except proxy statements.
ACCOUNTING AND SECURITY LENDING FEES. FSC maintains the fund's accounting
records and administers the security lending program. The security lending
fee is based on the number and duration of lending transactions. The
accounting fee is based on the level of average net assets for the month
plus out-of-pocket expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $729,000 for the period.
5. TRANSACTIONS WITH AFFILIATED COMPANIES.
An affiliated company is a company in which the fund has ownership of at
least 5% of the voting securities. Transactions with companies which are or
were affiliates are as follows:
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES
AMOUNTS IN THOUSANDS
PURCHASE SALES DIVIDEND MARKET
AFFILIATE COST COST INCOME VALUE
Barr Laboratories, Inc. (a) $ 6,445 $ - $ - $ 19,416
Bird Corp (a) 24 - - 1,852
Sapiens International Corp. NV (a) 911 114 - 1,708
TOTALS $ 7,380 $ 114 $ - $ 22,976
(a) Non-income producing.
6. INTERFUND LENDING PROGRAM.
The fund participated in the interfund lending program as a borrower. The
maximum loan and the average daily loan balances during the periods for
which loans were outstanding amounted to $26,973,000 and $24,896,000,
respectively. The weighted average interest rate was 3.7%. Interest expense
includes $15,000 paid under the interfund lending program.
7. SECURITY LENDING.
The fund loaned securities to certain brokers who paid the fund negotiated
lenders' fees. These fees are included in interest income. The fund
receives U.S. Treasury obligations and/or cash as collateral against the
loaned securities, in an amount at least equal to 102% of the market value
of the loaned securities at the inception of each loan. This collateral
must be maintained at not less than 100% of the market value of the loaned
securities during the period of the loan. At period end, there were no
loans outstanding.
8. BANK BORROWINGS.
The fund is permitted to have bank borrowings for temporary or emergency
purposes to fund shareholder redemptions. The fund has established
borrowing arrangements with certain banks. Under the most restrictive
arrangement, the fund must pledge to the bank securities having a market
value in excess of 220% of the total bank borrowings. The interest rate on
the borrowings is the bank's base rate, as revised from time to time. The
maximum loan and the average daily loan balances during the periods for
which loans were outstanding amounted to $29,297,000 and $9,487,000,
respectively. The weighted average interest rate was 5.2%. Interest expense
includes $10,000 paid under the bank borrowing program.
9. 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
$173,000 under this arrangement.

FIDELITY

(REGISTERED TRADEMARK)
RETIREMENT GROWTH
FUND
ANNUAL REPORT
NOVEMBER 30, 1994
CONTENTS

PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.

PERFORMANCE 4 How the fund has done over time.

FUND TALK 6 The manager's review of fund
performance, strategy and outlook.

INVESTMENT CHANGES 9 A summary of major shifts in the
fund's investments over the past six
months.

INVESTMENTS 10 A complete list of the fund's
investments with their market
values.

FINANCIAL STATEMENTS 26 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.

NOTES 30 Notes to the financial statements.

REPORT OF INDEPENDENT 36 The auditors' opinion.
ACCOUNTANTS

THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR
ACCOMPANIED BY
AN EFFECTIVE PROSPECTUS. MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS
OF, OR
GUARANTEED BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE
FDIC, THE
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT
RISK,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. NEITHER THE FUND NOR FIDELITY
DISTRIBUTORS
CORPORATION IS A BANK. FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING
CHARGES
AND EXPENSES, CALL 1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY
BEFORE YOU
INVEST OR SEND MONEY.
PRESIDENT'S MESSAGE

There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each
performance figure includes changes in a fund's share price, plus
reinvestment of any dividends (or income) and capital gains (the profits
the fund earns when it sells stocks that have grown in value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1994 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

Retirement Growth 4.24% 81.57% 341.12%

S&P 500(registered trademark) 1.05% 53.14% 287.95%

Average Capital Appreciation Fund -1.20% 54.32% 232.47%

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one, five, or 10 years. For example, if
you invested $1,000 in a fund that had a 5% return over the past year, you
would end up with $1,050. You can compare the fund's returns to the
performance of the Standard & Poor's Composite Index of 500 stocks - a
common proxy for the U.S. stock market. You can also compare them to the
average capital appreciation fund, which currently reflects the performance
of 138 capital appreciation funds tracked by Lipper Analytical Services.
Both benchmarks include reinvested dividends and capital gains, if any, and
exclude the effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1994 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

Retirement Growth 4.24% 12.67% 16.00%

S&P 500(registered trademark) 1.05% 8.90% 14.52%

Average Capital Appreciation Fund -1.20% 8.67% 11.99%

AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.

$10,000 OVER 10 YEARS
Fidelity Retirement Standard & Poor
11/30/84 10000.00 10000.00
12/31/84 10304.52 10264.00
01/31/85 11311.05 11063.57
02/28/85 11251.56 11199.65
03/31/85 11047.61 11207.49
04/30/85 10852.15 11197.40
05/31/85 11328.05 11844.61
06/30/85 11574.49 12030.57
07/31/85 11761.45 12012.52
08/31/85 11625.48 11910.42
09/30/85 11124.09 11537.62
10/31/85 11693.47 12070.66
11/30/85 12645.26 12898.71
12/31/85 13282.62 13523.01
01/31/86 13868.50 13598.73
02/28/86 15234.90 14615.92
03/31/86 16080.77 15431.49
04/30/86 15987.81 15257.11
05/31/86 16471.17 16068.79
06/30/86 16164.42 16340.35
07/31/86 14890.97 15426.93
08/31/86 15978.52 16571.60
09/30/86 14835.20 15201.13
10/31/86 15560.23 16078.24
11/30/86 15736.84 16468.94
12/31/86 15160.54 16048.98
01/31/87 17288.35 18210.78
02/28/87 18444.80 18930.11
03/31/87 19110.64 19477.19
04/30/87 19122.32 19303.84
05/31/87 19496.12 19471.78
06/30/87 20150.28 20455.11
07/31/87 21703.89 21492.18
08/31/87 22358.05 22293.84
09/30/87 22182.83 21805.60
10/31/87 16201.99 17108.68
11/30/87 15115.63 15698.92
12/31/87 16573.72 16893.61
01/31/88 16864.22 17604.83
02/29/88 18301.42 18425.22
03/31/88 18286.13 17855.88
04/30/88 18622.50 18054.08
05/31/88 18530.76 18211.15
06/30/88 19494.00 19047.04
07/31/88 19264.66 18974.66
08/31/88 18729.53 18329.52
09/30/88 19295.24 19110.36
10/31/88 19432.84 19641.63
11/30/88 19188.21 19360.75
12/31/88 19146.84 19699.57
01/31/89 20624.46 21141.57
02/28/89 20204.50 20615.15
03/31/89 20733.34 21095.48
04/30/89 21713.23 22190.34
05/31/89 22133.19 23089.05
06/30/89 21822.11 22957.44
07/31/89 23875.22 25030.49
08/31/89 24155.19 25521.09
09/30/89 24512.93 25416.46
10/31/89 23657.47 24826.79
11/30/89 24295.18 25333.26
12/31/89 24969.54 25941.26
01/31/90 23739.36 24200.60
02/28/90 23987.51 24512.79
03/31/90 24186.03 25162.38
04/30/90 23491.22 24533.32
05/31/90 25691.45 26925.32
06/30/90 26270.46 26742.22
07/31/90 26171.20 26656.65
08/31/90 23491.22 24246.89
09/30/90 20993.21 23066.06
10/31/90 20314.94 22966.88
11/30/90 21721.10 24450.54
12/31/90 22433.82 25132.71
01/31/91 23467.94 26228.50
02/28/91 25402.76 28103.83
03/31/91 26069.93 28783.95
04/30/91 26236.73 28853.03
05/31/91 27104.06 30099.48
06/30/91 25369.40 28720.92
07/31/91 27020.66 30059.32
08/31/91 28171.54 30771.72
09/30/91 28521.81 30257.84
10/31/91 29539.25 30663.29
11/30/91 28705.28 29427.56
12/31/91 32660.27 32794.07
01/31/92 32731.93 32184.10
02/29/92 33197.74 32602.50
03/31/92 32176.54 31966.75
04/30/92 32534.86 32906.57
05/31/92 33143.99 33067.81
06/30/92 31925.72 32575.10
07/31/92 33018.58 33907.42
08/31/92 32122.80 33212.32
09/30/92 32499.03 33604.23
10/31/92 33520.22 33721.84
11/30/92 35419.28 34871.76
12/31/92 36121.03 35300.68
01/31/93 37021.86 35597.21
02/28/93 35857.37 36081.33
03/31/93 36868.06 36842.64
04/30/93 36582.43 35951.05
05/31/93 38515.92 36914.54
06/30/93 39021.26 37021.59
07/31/93 39284.92 36873.51
08/31/93 41482.06 38271.01
09/30/93 41635.86 37976.33
10/31/93 42866.26 38762.44
11/30/93 42316.97 38394.19
12/31/93 44114.41 38858.76
01/31/94 45360.94 40179.96
02/28/94 44895.58 39091.08
03/31/94 42838.17 37386.71
04/30/94 43230.06 37865.26
05/31/94 43523.97 38486.25
06/30/94 42568.75 37543.34
07/31/94 43646.44 38774.76
08/31/94 45752.83 40364.53
09/30/94 45238.48 39375.59
10/31/94 45434.42 40261.55
11/30/94 44111.80 38795.22
$10,000 OVER 10 YEARS: Let's say you invested $10,000 in Fidelity
Retirement Growth Fund on November 30, 1984. As the chart shows, by
November 30, 1994, the value of your investment would have grown to $44,112
- - a 341.12% increase on your initial investment. For comparison, look at
how the S&P 500 did over the same period. With dividends reinvested, the
same $10,000 investment would have grown to $38,795 - a 287.95% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
growth in the long run and
volatility in the short run. In
turn, the share price and
return of a fund that invests in
stocks will vary. That means if
you sell your shares during a
market downturn, you might
lose money. But if you can
ride out the market's ups and
downs, you may have a gain.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW

MARKET RECAP
Rising interest rates contributed
to below-average returns in the
U.S. stock market during the 12
months ended November 30,
1994. The Standard & Poor's 500
stock index finished the 12-month
period with a total return of 1.05%
- - below its historical annual
average return of more than 10%.
After two months of steady gains,
stocks stumbled from February
through June 1994. During that
time, the Federal Reserve Board
raised short-term interest rates
four times in an effort to curb
possible future inflation triggered
by a strengthening economy.
Higher rates hurt stocks because
they raise the cost of borrowing
for companies and consumers,
often dampening future corporate
profits. In addition, higher rates
often make bonds and other
fixed-income investments more
attractive relative to stocks.
Despite a fifth Fed rate hike in
August, the market rallied from
July through October, fueled by
strengthening corporate earnings
and a flurry of merger and
acquisition activity. Interest rate
concerns resurfaced in
November, when the Fed raised
rates again. Although returns in
overseas markets were mixed,
foreign stocks generally fared
better than those in the U.S. The
Morgan Stanley EAFE (Europe,
Australia, Far East) index
returned 14.84% for the 12
months ended November 30,
while the Morgan Stanley
Emerging Markets Free index
was up 17.44% during the same
period.
An interview with Harris Leviton, Portfolio Manager of Fidelity
Retirement Growth Fund
Q. HARRIS, HOW HAS THE FUND PERFORMED?
A. The fund has continued to do rather well compared to its peers. The fund
had a total return of 4.24% for the 12 months ended November 30, 1994. This
beat the average capital appreciation fund, which had a return of -1.20%
over the same period, according to Lipper Analytical Services. It also beat
the S&P 500 index, which returned 1.05% for the same period.
Q. WHAT HELPED THE FUND'S PERFORMANCE?
A. When the market struggles - as it has in 1994 - the stocks of small- and
medium-sized companies come under pressure, as people tend to gravitate
toward less risky options. These include blue chip stocks - those of
larger, more established companies - bonds and money market investments. In
anticipation of this movement, I've increased my cash position and
investments in short-term instruments to 26.9% of the fund as of November
30, 1994. This move has mitigated some of the effects of drops in smaller
company stocks. I've also started investing in short-term Treasury bonds,
which I can do within the fund's investment policies, because they're
offering strong yields and little risk. At the same time, I've picked
individual stocks that have done well.
Q. CAN YOU GIVE US SOME EXAMPLES?
A. Two tobacco companies, Philip Morris and RJR Nabisco, are back in the
fund for the first time in a while. They fit two important criteria: good
growth prospects and low price. Philip Morris has a good free cash flow and
is buying back about $2 billion of stock per year, which generally is
viewed as a positive move for shareholders. In addition, political risk for
tobacco companies has eased with the Republicans coming into power. Another
solid, inexpensive performer has been Warner Lambert, a diversified
manufacturer of pharmaceuticals, candy and health products.
Q. EVEN THOUGH SMALL- TO MEDIUM-SIZED COMPANIES HAVE NOT DONE AS WELL, HAVE
YOU FOUND OPPORTUNITIES IN THIS GROUP?
A. Yes, there are a few areas that have done well. One is high-performance
wire and cable. The economic recovery has not sparked much new office
construction. At the same time, data and information requirements for
businesses have increased, so companies have had to retrofit or renovate
their wiring. Belden, AFC Cable Systems and Cable Design Technologies are
companies that are poised to take advantage of this need.
Entertainment-oriented computer software is another area that has grown.
Improvements in hardware - such as high-performance micro-processors and
the advent of CD-ROM drives - have driven business. The fund held, then
profited from selling, Broderbund Software, and still has investments in
Sierra On-Line and Spectrum Holobyte.
Q. WHAT'S YOUR FEELING ON TECHNOLOGY IN GENERAL?
A. I've sold a fair amount of technology stocks, including one of the
fund's previous top 10 investments, Compaq. These companies seem to have
good growth prospects, but right now their stocks tend to be overpriced.
It's a cyclical business - meaning it tends to rise and fall with the
economy - and the sector has had a good three-year run. But I am being
cautious because there is a great deal of competition as capital pours into
the industry. A company's prospects can change literally overnight.
Q. WHAT INVESTMENTS HAVE BEEN
DISAPPOINTING?
A. Some of the stocks of medium-sized companies have gone down in price.
For example, the fund has a big stake in Libbey, a glassware manufacturer.
It has fallen in the general move away from smaller companies. The same
fate has befallen American Bankers Insurance Group, a specialty property
and casualty life insurer in Florida; and Mid Ocean, a Bermuda-based
re-insurer. While all three have felt the effects of market pressure, I'm
holding on to them and may buy more because I believe their prospects are
good.
Q. WHAT'S YOUR OUTLOOK FOR THE NEXT SIX MONTHS?
A. We've had a great bull market for the past few years. Declining interest
rates during that earlier period created a sort of grease underneath the
market that made it easier for it to move upward, because investment
alternatives kept getting less attractive. Going forward, it's going to be
more difficult because so much money has come into the markets and
competition for the investment dollar is increasing from safer investments
with good yields, and from investments in overseas emerging markets.
Investors have gotten used to above-average returns from the stock market
and may not be questioning as much as they should the relatively high stock
valuations I see in the market today. I'll be holding onto cash, looking
for values and promising individual stories, and buying more short-term
Treasury bonds because they're offering good yields with little risk.
FUND FACTS
GOAL: to increase the value
of the fund's shares over the
long term by investing in
stocks with growth potential
START DATE: March 25, 1983
SIZE: as of November 30,
1994, more than $3 billion
MANAGER: Harris Leviton,
since March 1992; manager,
Fidelity Convertible
Securities Fund, 1990-1992;
Fidelity Select Electronics
Portfolio, 1987-1990;
analyst, 1986- 1990; joined
Fidelity in 1986
(checkmark)
HARRIS LEVITON ON INVESTING FOR
RETIREMENT:
"There are two sins of
retirement investing. The first is
to not have any money
because you took enormous
risks. The second is to not take
enough risk. You have to take
some risk to get an
above-average return. I try to
balance risk and reward. When
I buy a stock or look at bonds, I
look at the upside and the
downside. I look for
investments that are, for
whatever reason, mispriced.
By finding these situations, I
can add value to the fund. If
the fund could have a motto, it
would be a little more reward
for a little less risk."
(solid bullet) The fund's exposure to
overseas investments has
been decreased to 15.2% of
the fund on November 30,
1994, because stock
valuations - prices relative to
earnings - have become
generally high.
(solid bullet) Although the fund is
authorized to invest in
derivative instruments such
as futures and options, it did
not have any significant
holdings of these derivatives
during the period.
INVESTMENT CHANGES

TOP TEN STOCKS AS OF NOVEMBER 30, 1994
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE STOCKS
6 MONTHS AGO

International Business Machines 1.9 2.4
Corp.

Cellular Communications, Inc.
redeemable Class P 1.8 1.7

Warner-Lambert Co. 1.8 1.7

SunGard Data Systems, Inc. 1.6 0.8

Sun Microsystems, Inc. 1.4 0.9

British Petroleum PLC ADR 1.1 1.0

Koninklijke PPT Nederland 1.1 -

American Bankers Insurance
Group, Inc. 1.0 0.8

du Pont (E.I.) de Nemours & Co. 1.0 0.9

RJR Nabisco Holdings Corp. 1.0 0.2

TOP FIVE INDUSTRIES AS OF NOVEMBER 30, 1994
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE INDUSTRIES
6 MONTHS AGO

Basic Industries 9.8 9.6

Technology 9.5 12.1

Utilities 8.6 8.7

Finance 7.7 9.3

Health 6.9 7.1

ASSET ALLOCATION
AS OF NOVEMBER 30, 1994* AS OF MAY 31, 1994**
Row: 1, Col: 1, Value: 26.9
Row: 1, Col: 2, Value: 4.9
Row: 1, Col: 3, Value: 40.0
Row: 1, Col: 4, Value: 28.2
Row: 1, Col: 1, Value: 20.0
Row: 1, Col: 2, Value: 3.0
Row: 1, Col: 3, Value: 40.0
Row: 1, Col: 4, Value: 37.0
Stocks 68.2%
Bonds 4.9%
Short-term
Investments 26.9%
FOREIGN
INVESTMENTS 15.2%
Stocks 77.0%
Bonds 3.0%
Short-term
Investments 20.0%
FOREIGN
INVESTMENTS 19.3%

*
**
INVESTMENTS NOVEMBER 30, 1994

Showing Percentage of Total Value of Investment In Securities

COMMON STOCKS - 66.9%
SHARES VALUE (NOTE 1)
(000S)
AEROSPACE & DEFENSE - 0.3%
McDonnell Douglas Corp. 74,800 $ 10,435
BASIC INDUSTRIES - 8.1%
CHEMICALS & PLASTICS - 3.3%
Akzo NV:
Ord. 124,000 13,761
sponsored ADR 23,600 1,304
du Pont (E.I.) de Nemours & Co. 589,000 31,732
Eastman Chemical Co. 58,825 2,772
Great Lakes Chemical Corp. 100,000 5,300
Hoechst AG Ord. 200 40
Indo Gulf Fertilizer and Chemicals Corp. Ltd. GDR (a)(e) 526,000 1,315
JCT Ltd. GDR (a)(e) 472,000 7,849
Kemira OY sponsored ADR (a)(e) 364,700 5,607
Methanex Corp. (a) 560,400 8,298
Reliance Industries Ltd. GDS (e) 100,000 2,325
Southern Petrochemical Industries Corp. GDS (a) 688,000 8,428
Union Carbide Corp. 110,000 3,149
United Phosphorus Ltd., GDR (UK) 134,150 3,589
United Phosphorus Ltd., GDR euro (a) 80,000 2,140
Wellman, Inc. 184,300 4,677
102,286
IRON & STEEL - 0.7%
Acesita (Acos Espec Itabira) ON 41,730,000 3,393
Acesita (Acos Espec Itabira) PN 38,082,300 3,590
Cold Metal Products, Inc. (a) 179,900 1,282
Compania Siderurgica Nacional ON 73,400,000 3,287
Iscor Ltd. 5,597,459 6,366
Kentucky Electric Steel, Inc. (a)(c) 307,000 2,917
20,835
METALS & MINING - 4.0%
AFC Cable Systems, Inc. (a)(c) 534,300 8,816
Alcan Aluminium Ltd. 500,000 12,310
Alumax, Inc. (a) 740,750 19,445
Belden, Inc. 1,131,500 22,347
Cable Design Technology Corp. (a)(c) 942,500 17,201
Castech Aluminum Group (a) 356,500 5,169
Finolex Cables Ltd. GDR (a)(e) 594,000 10,840
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
BASIC INDUSTRIES - CONTINUED
METALS & MINING - CONTINUED
Matthews International Corp. Class A 25,000 $ 387
Reynolds Metals Co. 644,900 30,391
126,906
PAPER & FOREST PRODUCTS - 0.1%
Bowater, Inc. 64,600 1,639
Jefferson Smurfit Corp. (a) 167,100 2,674
4,313
TOTAL BASIC INDUSTRIES 254,340
CONGLOMERATES - 0.9%
Tyco Laboratories, Inc. 647,328 29,777
CONSTRUCTION & REAL ESTATE - 0.7%
BUILDING MATERIALS - 0.2%
China Southern Glass Co. Ltd. Class B (c) 2,966,600 3,260
Lafarge Corp. 217,628 3,863
7,123
CONSTRUCTION - 0.3%
Lennar Corp. 312,400 4,881
Pulte Corp. 129,300 2,602
Sundance Homes, Inc. (a) 207,000 492
7,975
REAL ESTATE INVESTMENT TRUSTS - 0.2%
JDN Realty Corp. 67,100 1,384
Liberty Property Trust 78,000 1,375
Macerich Co. 92,500 1,827
Weeks Corp. 97,000 1,843
6,429
TOTAL CONSTRUCTION & REAL ESTATE 21,527
DURABLES - 5.9%
AUTOS, TIRES, & ACCESSORIES - 0.9%
Capaco Automotive Products Corp. (a) 296,000 3,848
Danaher Corp. 194,800 9,082
Edelbrock Corp. (a) 48,000 672
Ford Motor Co. 80,000 2,170
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
DURABLES - CONTINUED
AUTOS, TIRES, & ACCESSORIES - CONTINUED
Innovative International Holdings Ltd. 21,589,000 $ 6,142
Renault SA Ord. (e) 22,000 741
Tofas Turk Otomobil Fabrikas ADR (e) 1,000,000 3,750
26,405
CONSUMER DURABLES - 0.7%
Daktronics, Inc. (a) 13,000 72
Libbey, Inc. (c) 1,110,700 16,799
Mikasa, Inc. (a) 202,300 3,237
Syratech Corp. (a) 137,500 2,406
22,514
CONSUMER ELECTRONICS - 0.9%
Aktiebolaget Electrolux 142,700 7,294
Black & Decker Corp. 353,900 8,494
Fossil, Inc. (a) 340,000 8,712
North American Watch Corp. 220,000 2,943
27,443
HOME FURNISHINGS - 0.2%
LADD Furniture, Inc. 350,000 2,100
Loewenstein Furniture Group, Inc. (a)(c) 255,500 1,852
Rhodes, Inc. (a) 329,200 3,251
7,203
TEXTILES & APPAREL - 3.2%
Burlington Industries, Inc. (a) 1,002,000 10,020
Deckers Footwear Corp. (a) 93,000 1,348
Fieldcrest Cannon, Inc. (a) 134,900 3,372
Galey & Lord, Inc. (a) 255,900 4,094
Guilford Mills, Inc. 230,100 4,631
High Fashion International Ltd. 3,000,000 427
Image Industries, Inc. (a)(c) 500,000 5,688
Interface, Inc. Class A (c) 528,300 5,811
K-Swiss, Inc. Class A (c) 308,900 6,410
Kellwood Co. 34,200 701
Maxwell Shoe, Inc. Class A (a)(c) 760,000 7,220
NIKE, Inc. Class B 199,400 12,737
Nine West Group, Inc. (a) 539,800 13,360
Pillowtex Corp. (a)(c) 1,000,200 10,252
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
DURABLES - CONTINUED
TEXTILES & APPAREL - CONTINUED
Quaker Fabric Corp. (a) 141,000 $ 1,904
Unifi, Inc. 156,600 3,895
Westpoint Stevens, Inc. Class A (a) 559,400 8,111
99,981
TOTAL DURABLES 183,546
ENERGY - 3.2%
COAL - 0.3%
MAPCO, Inc. 158,500 7,945
ENERGY SERVICES - 0.4%
Halliburton Co. 376,000 13,113
OIL & GAS - 2.5%
Amerada Hess Corp. 504,800 22,968
British Petroleum PLC:
ADR 422,449 33,532
Ord. 835,580 5,560
Louis Dreyfus Natural Gas Corp. (a) 827,700 10,139
Northstar Energy Corp. (a) 324,200 2,975
Pakistan State Oil Co. Ltd. 87,000 1,256
Parker & Parsley Petroleum Co. 120,300 2,782
79,212
TOTAL ENERGY 100,270
FINANCE - 7.4%
BANKS - 0.9%
BancFirst Corp. 49,600 741
Bank Dagang Nas Indonesia PT (a) 1,084,500 1,991
Bank of New York Co., Inc. 460,000 12,823
Chemical Banking Corp. 320,000 11,640
27,195
CLOSED END INVESTMENT COMPANY - 0.3%
Jardine Fleming India Fund, Inc. (a)(d) 322,500 4,434
Morgan Stanley India Investment Fund 346,000 4,541
8,975
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - CONTINUED
CREDIT & OTHER FINANCE - 1.3%
Argentaria Corporacion Bancaria de Espana SA 446,400 $ 17,384
Beneficial Corp. 441,200 16,104
Corporacion Bancaria de Espana SA sponsored ADR 128,900 2,514
GFC Financial Corp. 187,400 5,528
41,530
FEDERAL SPONSORED CREDIT - 1.1%
Federal National Mortgage Association 419,000 29,801
Student Loan Marketing Association 180,000 6,165
35,966
INSURANCE - 3.6%
Allstate Corp. 1,130,400 26,706
American Bankers Insurance Group, Inc. (c) 1,633,535 32,262
GAN (Groupe Des Assur Natl.) 8,080 464
MBIA, Inc. 290,400 15,246
Mid Ocean Ltd. (a) 625,600 14,467
Penncorp. Financial Group, Inc. 287,100 3,804
SAFECO Corp. 240,300 11,820
St. Paul Companies, Inc. (The) 72,600 2,995
Travelers, Inc. (The) 106,566 3,503
111,267
SECURITIES INDUSTRY - 0.2%
John Nuveen Co. Class A 130,000 2,632
Paine Webber Group, Inc. 351,600 4,791
7,423
TOTAL FINANCE 232,356
HEALTH - 6.9%
DRUGS & PHARMACEUTICALS - 4.6%
Alkermes, Inc. (a) 53,200 173
Allergan, Inc. 614,300 18,506
Alpha 1 Biomedicals, Inc. (a) 117,500 88
Bristol-Myers Squibb Co. 399,800 23,088
Cephalon, Inc. (a) 70,400 598
COR Therapeutics, Inc. (a) 11,800 158
Core Parenterals Ltd. GDR (a) 1,242,000 9,315
Cortech, Inc. (a) 205,000 628
Creative Biomolecules, Inc. (a) 898,800 2,022
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
HEALTH - CONTINUED
DRUGS & PHARMACEUTICALS - CONTINUED
Cygnus Therapeutics Systems (a) 345,000 $ 2,156
Dr. Reddy's Laboratories Ltd. GDR (a)(e) 269,000 2,725
Insite Vision, Inc. (a) 114,200 600
Liposome Co., Inc. (a) 715,600 4,741
Magainin Pharmaceuticals, Inc. (a) 529,000 1,389
Mylan Laboratories, Inc. 78,700 2,263
Neurobiological Technologies, Inc. (a) 55,500 194
Protein Design Labs, Inc. (a) 94,500 1,477
Ranbaxy Laboratories Ltd. GDR (a)(e) 510,000 12,816
Repligen Corp. (a) 300,000 937
SciClone Pharmaceuticals, Inc. (a) 427,000 2,776
T Cell Sciences, Inc. (a) 250,000 656
Warner-Lambert Co. 720,000 55,710
Watson Pharmaceuticals, Inc. (a) 65,100 1,660
144,676
MEDICAL EQUIPMENT & SUPPLIES - 2.2%
Baxter International, Inc. 858,300 22,101
Becton, Dickinson & Co. 396,800 18,749
Cyberonics Inc. (a) 106,500 373
Johnson & Johnson 346,200 18,478
Maxxim Medical, Inc. (a) 182,700 2,170
Mentor Corp. 89,400 1,430
Pall Corp. 164,000 2,911
Utah Medical Products, Inc. (a) 254,000 2,064
68,276
MEDICAL FACILITIES MANAGEMENT - 0.1%
U.S. Healthcare, Inc. 47,325 2,118
TOTAL HEALTH 215,070
HOLDING COMPANIES - 0.6%
Anglovaal Ltd. Class N (e) 102,000 3,272
Brierley Investments Ltd. 4,347,826 3,252
China Strategic Investments Ltd. 2,312,000 1,054
Grupo Carso SA de CV:
Class A-1 (a) 861,000 9,683
sponsored ADR (a) 87,100 1,916
John Keells Holdings Ltd. GDR (e) 10,000 98
19,275
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
INDUSTRIAL MACHINERY & EQUIPMENT -1.8%
ELECTRICAL EQUIPMENT - 1.4%
Adflex Solutions (a) 30,000 $ 454
Holophane Corp. (a) 166,100 2,616
Philips Electronics 856,100 25,920
Philips Electronics NV 301,000 9,105
Reunert Ltd. 1,700,000 6,920
45,015
INDUSTRIAL MACHINERY & EQUIPMENT - 0.4%
Caterpillar, Inc. 68,500 3,699
SKF AB Ord. (a) 500,000 8,862
12,561
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 57,576
MEDIA & LEISURE - 3.5%
BROADCASTING - 1.1%
ACS Enterprises, Inc. (a) 133,100 998
American Telecasting, Inc. (a) 77,500 891
CAI Wireless Systems, Inc. (a) 24,000 204
Cablemaxx, Inc. (a) 308,200 1,695
Peoples Choice TV Corp. (a)(c) 428,600 8,358
Preferred Entertainment, Inc. (a) 140,500 1,862
Viacom, Inc. (a):
Class A 60,800 2,424
Class B 460,673 17,736
rights 760,000 1,140
35,308
ENTERTAINMENT - 0.7%
Cinergi Pictures Entertainment, Inc. (a)(c) 944,000 5,782
PolyGram NV Ord. 120,000 5,067
Royal Carribean Cruises Ltd. 252,700 6,949
Shaw Bros. Hong Kong Ltd. 2,900,000 4,687
22,485
LEISURE DURABLES & TOYS - 0.9%
Bajaj Auto Ltd. GDR (a)(e) 72,000 1,836
Bandai Co. Ltd. 189,000 7,644
Hasbro, Inc. 292,700 8,635
Just Toys, Inc. (a)(c) 328,900 1,151
Mahindra & Mahindra Ltd. GDR (a) 300,000 3,450
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
MEDIA & LEISURE - CONTINUED
LEISURE DURABLES & TOYS - CONTINUED
Playmate Toys Holdings Ltd. 8,588,000 $ 3,026
Shenzhen China Bicycles Co. Holding Class B 1,619,000 1,047
26,789
LODGING & GAMING - 0.0%
Mirage Resorts, Inc. (a) 78,000 1,541
PUBLISHING - 0.4%
Knight-Ridder, Inc. 40,000 1,925
Meredith Corp. 194,300 9,351
11,276
RESTAURANTS - 0.4%
Bugaboo Creek Steak House, Inc. (a)(c) 412,500 4,228
IHOP Corp. (a)(c) 214,600 5,312
Quantum Restaurant Group, Inc. (a)(c) 384,300 3,987
13,527
TOTAL MEDIA & LEISURE 110,926
NONDURABLES - 3.4%
BEVERAGES - 0.3%
Celestial Seasonings, Inc. (a) 24,400 372
Dr. Pepper/Seven-Up Companies, Inc. (a) 394,300 9,759
10,131
FOODS - 0.8%
Dole Food, Inc. 410,000 9,635
Hormel (George A) & Co. 366,500 9,117
Parry (India) E/D GDR (e) 955,000 5,873
24,625
HOUSEHOLD PRODUCTS - 0.3%
Premark International, Inc. 179,100 8,149
Stanhome, Inc. 88,400 2,895
11,044
TOBACCO - 2.0%
Philip Morris Companies, Inc. (a) 510,000 30,473
RJR Nabisco Holdings Corp. 5,023,100 31,394
61,867
TOTAL NONDURABLES 107,667
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
PRECIOUS METALS - 0.1%
Anglo American Corp. of South Africa Ltd. (Reg.) 27,200 $ 1,521
Free State Consolidated Gold Mines Ord. 83,700 1,208
2,729
RETAIL & WHOLESALE - 4.6%
APPAREL STORES - 0.2%
BON-TON Stores, Inc. (a) 45,000 557
Catherines Stores Corp. (a) 55,500 444
Designs, Inc. (a) 171,300 1,499
Kenneth Cole Productions, Inc. Class A (a) 49,600 855
Shoe Carnival, Inc. (a)(c) 704,000 3,520
6,875
APPLIANCE STORES - 0.0%
Hirsch International Corp. Class A 71,875 647
GENERAL MERCHANDISE STORES - 1.6%
Bradlees, Inc. 255,900 3,519
Carson Pirie Scott & Co. (a) 109,900 2,061
Dillard Department Stores, Inc. Class A 306,200 8,612
Federated Department Stores, Inc. (a) 444,000 9,102
Freds, Inc. Class A (c) 916,300 8,934
Lechters, Inc. (a)(c) 1,035,800 17,608
49,836
GROCERY STORES - 1.8%
Giant Food, Inc. Class A 606,400 13,568
Pepkor Ltd. 1,660,000 9,883
Safeway, Inc. (a) 381,500 11,636
Whole Foods Market, Inc. (a)(c) 1,374,200 20,957
56,044
RETAIL & WHOLESALE, MISCELLANEOUS - 1.0%
Brookstone, Inc. (a) 103,200 1,471
Circuit City Stores, Inc. 93,900 2,312
Cole National Corp. Class A (a)(c) 941,100 11,176
Lillian Vernon Corp. 101,400 1,673
Natural Wonders, Inc. (a) 230,000 1,064
Orchard Supply Hardware Corp. (a) 336,000 3,108
Toys "R" Us, Inc. (a) 220,000 8,057
28,861
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
RETAIL & WHOLESALE - CONTINUED
TRADING COMPANIES - 0.0%
Linkful International Holding Ltd. 16,500,000 $ 1,429
TOTAL RETAIL & WHOLESALE 143,692
SERVICES - 0.3%
PRINTING - 0.1%
Skybox International, Inc. (a) 287,200 3,447
SERVICES - 0.2%
Cerplex Group, Inc. (a) 240,000 2,820
Oroamerica, Inc. (a)(c) 333,600 2,335
5,155
TOTAL SERVICES 8,602
TECHNOLOGY - 9.3%
COMMUNICATIONS EQUIPMENT - 0.0%
IPC Information Systems, Inc. (a) 116,000 1,479
COMPUTER SERVICES & SOFTWARE - 3.4%
Affiliated Computer Services Class A (a) 24,000 468
BancTec, Inc. (a) 170,550 3,709
Ceridian Corp. (a) 157,300 3,933
Gametek, Inc. (a)(c) 410,400 1,129
Integrated Systems, Inc. (a)(c) 663,700 10,785
Sierra On-Line, Inc. (a)(c) 655,900 18,775
Spectrum Holobyte, Inc. (a) 927,000 12,283
Sterling Software, Inc. (a) 92,300 2,838
SunGard Data Systems, Inc. (a)(c) 1,326,100 51,055
Walker Interactive Systems, Inc. (a) 114,800 746
105,721
COMPUTERS & OFFICE EQUIPMENT - 4.3%
Data General Corp. (a) 343,400 3,691
Digital Equipment Corp. (a) 682,700 23,212
International Business Machines Corp. 853,300 60,370
Metrologic Instruments (a) 1,500 21
Sun Microsystems, Inc. (a) 1,283,900 43,011
TSL Holding, Inc. (a) 1,082 1
Tandem Computers, Inc. (a) 226,600 3,852
134,158
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
ELECTRONICS - 1.6%
Advanced Micro Devices, Inc. (a) 855,000 $ 21,589
Augat, Inc. 524,400 9,046
Integrated Device Technology, Inc. (a) 205,200 5,335
Thomas & Betts Corp. 222,200 14,721
50,691
TOTAL TECHNOLOGY 292,049
TRANSPORTATION - 1.4%
AIR TRANSPORTATION - 0.3%
AMR Corp. (a) 155,400 7,886
KLM Royal Dutch Airlines Ord. (a) 112,000 2,754
10,640
RAILROADS - 0.6%
Canadian Pacific Ltd. Ord. 791,400 12,294
Chicago & North Western Holdings Corp. (a) 372,100 7,256
19,550
TRUCKING & FREIGHT - 0.5%
Airborne Freight Corp. 734,800 14,512
TOTAL TRANSPORTATION 44,702
UTILITIES - 8.5%
CELLULAR - 1.8%
Cellular Communications, Inc. redeemable Class P (a) 1,094,300 56,258
ELECTRIC UTILITY - 0.2%
CESC Ltd. GDR (a)(e) 250,000 2,375
Meralco Class B 247,500 3,347
5,722
GAS - 0.1%
Trident NGL Holding, Inc. 400,000 4,350
TELEPHONE SERVICES - 6.4%
Ameritech Corp. 676,800 26,734
Bell Atlantic Corp. 400,200 20,060
BellSouth Corp. 416,500 21,606
Comsat Corp., Series 1 1,538,100 29,801
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
UTILITIES - CONTINUED
TELEPHONE SERVICES - CONTINUED
GTE Corp. 770,000 $ 23,581
Koninklijke PPT Nederland 1,073,000 33,525
Koninklijke PPT Nederland (e) 183,000 5,718
NYNEX Corp. 420,000 15,802
Pakistan Telecommunications Voucher GDR (a)(e) 73,300 11,581
Southwestern Bell Corp. 82,400 3,409
Sprint Corp. 269,700 8,057
Telebras PN (Pfd. Reg.) 3,821,837 182
200,056
TOTAL UTILITIES 266,386
TOTAL COMMON STOCKS
(Cost $1,953,048) 2,100,925
PREFERRED STOCKS - 1.3%
CONVERTIBLE PREFERRED STOCKS - 1.2%
BASIC INDUSTRIES - 0.1%
METALS & MINING - 0.1%
Alumax, Inc., Series A, $4.00 (a) 22,000 2,442
DURABLES - 0.4%
AUTOS, TIRES, & ACCESSORIES - 0.4%
Chrysler Corp., Series A, $4.625 (a)(e) 97,400 13,149
ENERGY - 0.7%
OIL & GAS - 0.7%
Unocal Corp. $3.50 (a)(e) 200,000 10,300
Valero Energy Corp. $3.125 221,900 10,208
TOTAL ENERGY 20,508
TOTAL CONVERTIBLE PREFERRED STOCKS 36,099
PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
NONCONVERTIBLE PREFERRED STOCKS - 0.1%
UTILITIES - 0.1%
TELEPHONE SERVICES - 0.1%
Telecom Italia 2,000,000 $ 4,147
TOTAL PREFERRED STOCKS
(Cost $31,701) 40,246
CORPORATE BONDS - 3.3%
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B) (000S) (000S)
CONVERTIBLE BONDS - 3.0%
BASIC INDUSTRIES - 1.6%
CHEMICALS & PLASTICS - 0.5%
Reliance Industries Ltd. 3 1/2%, 11/3/93 (e) - $ 12,000 14,760
IRON & STEEL - 0.5%
Essar Gujarat, Ltd.:
euro 5 1/2%, 8/5/98 - 3,500 6,230
5 1/2%, 8/5/98 - 250 445
Jindal Strips Ltd. euro 4 1/4%, 3/31/99 (e) - 1,240 1,463
NTS Steel Groups Co., Ltd., euro
4%, 12/16/08 - 5,400 3,416
Nippon Denro Ispat 3%, 4/1/01 (e) - 1,830 1,354
Sterlite Industry India Ltd. 3 1/2% 6/30/99 (e) - 1,600 1,480
14,388
PAPER & FOREST PRODUCTS - 0.6%
Aokam Perdana 3 1/2%, 6/13/04 BHD (e) - 5,000 4,987
Repap Enterprises, Inc. 8 1/2%, 8/1/97 - 15,880 14,848
19,835
TOTAL BASIC INDUSTRIES 48,983
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
CONVERTIBLE BONDS - CONTINUED
CONGLOMERATES - 0.1%
Polly Peck International PLC euro
7 1/4%, 1/4/05 (b) - $ 6,500 $ 2,925
CONSTRUCTION & REAL ESTATE - 0.1%
BUILDING MATERIALS - 0.1%
Gujarat Ambuja Cement Ltd.
3 1/2%, 6/30/99 (e) - 2,780 4,698
FINANCE - 0.3%
CREDIT & OTHER FINANCE - 0.3%
SCICI Ltd. euro 3 1/2%, 4/1/04 - 11,900 11,245
HOLDING COMPANIES - 0.5%
JG Summit Cayman Ltd. 3 1/2%,
12/23/03 (e) - 20,000 14,950
MEDIA & LEISURE - 0.2%
ENTERTAINMENT - 0.1%
New Line Cinema Corp. 6 1/2%,
11/15/06 (e) - 2,075 2,013
LODGING & GAMING - 0.1%
Argosy Gaming Co. 12%, 6/1/01 B3 5,000 5,000
TOTAL MEDIA & LEISURE 7,013
TECHNOLOGY - 0.2%
COMPUTER SERVICES & SOFTWARE - 0.1%
Sierra On-Line, Inc. 6 1/2%, 4/1/01 (e) - 1,100 1,188
Sterling Software, Inc. 5 3/4%, 2/01/03 B1 910 1,065
2,253
ELECTRONICS - 0.1%
Microsemi Corp. 5 7/8%, 3/1/12 Caa 596 370
Richardson Electronics, Ltd. 7 1/4%, 12/15/06 B3 2,382 1,798
2,168
TOTAL TECHNOLOGY 4,421
TOTAL CONVERTIBLE BONDS 94,235
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
NONCONVERTIBLE BONDS - 0.3%
MEDIA & LEISURE - 0.3%
ENTERTAINMENT - 0.3%
Harrah's Jazz Co. 14 1/4%, 11/15/01 B1 $ 9,670 $ 9,912
TOTAL CORPORATE BONDS
(Cost $113,981) 104,147
U.S. TREASURY OBLIGATIONS - 1.6%
U.S. Treasury Notes 7 3/8%, 11/15/97 Aaa 25,000 24,836
U.S. Treasury Notes 7 1/2%, 10/31/99 Aaa 25,000 24,687
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $49,756) 49,523
REPURCHASE AGREEMENTS - 26.9%
MATURITY
AMOUNT
(000S)
Investments in repurchase agreements
(U.S. Treasury obligations), in a
joint trading account at 5.71%
dated 11/30/94 due 12/1/94 $ 842,960 842,826
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $2,991,312) $ 3,137,667
LEGEND
(h) Non-income producing
(i) Non-income producing - the company moved to seek a court appointed
administrator under British bankruptcy law.
(j) Affiliated company (see Note 6 of Notes to Financial Statements).
(k) Restricted securities- Investment in securities not registered under
the Securities Act of 1933 (see Note 2 of Notes to Financial Statements).
Additional information on each holding is as follows:
ACQUISITION ACQUISITION
SECURITY DATE COST
Jardine Fleming
India Fund, Inc. 3/7/94 $4,660,000
(l) 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 $149,063,000 or 4.7% of net
assets.
OTHER INFORMATION
Distribution of investments by country of issue, as a percentage of total
value of investment in securities, is as follows:
United States 84.8
India 3.9
Netherland 3.1
Canada 1.6
United Kingdom 1.2
South Africa 1.0
Others (individually less than 1%) 4.4
TOTAL 100.0%
INCOME TAX INFORMATION
At November 30, 1994, the aggregate cost of investment securities for
income tax purposes was $2,991,417,000. Net unrealized appreciation
aggregated $146,250,000, of which $315,102,000 related to appreciated
investment securities and $168,852,000 related to depreciated investment
securities.
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS NOVEMBER 30, 1994

ASSETS

Investment in securities, at value (including repurchase $ 3,137,667
agreements of $842,826) (cost $2,991,312) -
See accompanying schedule

Receivable for investments sold 63,133

Receivable for fund shares sold 6,574

Dividends receivable 4,076

Interest receivable 2,871

Other receivables 5,170

TOTAL ASSETS 3,219,491

LIABILITIES

Payable for investments purchased $ 34,124

Payable for fund shares redeemed 2,937

Accrued management fee 2,053

Other payables and accrued expenses 1,105

Collateral on securities loaned, at value 16,452

TOTAL LIABILITIES 56,671

NET ASSETS $ 3,162,820

Net Assets consist of:

Paid in capital $ 2,672,512

Undistributed net investment income 33,743

Accumulated undistributed net realized gain (loss) on 310,215
investments and foreign currency transactions

Net unrealized appreciation (depreciation) on 146,350
investments and assets and liabilities in foreign
currencies

NET ASSETS, for 175,621 shares outstanding $ 3,162,820

NET ASSET VALUE, offering price and redemption price per $18.01
share ($3,162,820 (divided by) 175,621 shares)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED NOVEMBER 30, 1994

INVESTMENT INCOME $ 34,141
Dividends (including $1,672 received from affiliated
issuers)

Interest (including security lending fees of $390) 31,514

TOTAL INCOME 65,655

EXPENSES

Management fee 18,566
Basic fee

Performance adjustment 4,407

Transfer agent fees 6,661

Accounting and security lending fees 794

Non-interested trustees' compensation 17

Custodian fees and expenses 1,105

Registration fees 226

Audit 110

Legal 21

Interest 1

Miscellaneous 88

Total expenses before reductions 31,996

Expense reductions (138) 31,858

NET INVESTMENT INCOME 33,797

REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:

Investment securities (including realized gain of $10 310,227
on sales of investment in affiliated issuers)

Foreign currency transactions 152 310,379

Change in net unrealized appreciation (depreciation) on:

Investment securities (231,481)

Assets and liabilities in foreign currencies (5) (231,486)

NET GAIN (LOSS) 78,893

NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 112,690
FROM OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30,
1994 1993

INCREASE (DECREASE) IN NET ASSETS

Operations $ 33,797 $ 19,152
Net investment income

Net realized gain (loss) 310,379 266,482

Change in net unrealized appreciation (depreciation) (231,486) 144,257

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 112,690 429,891
FROM OPERATIONS

Distributions to shareholders: (19,614) (17,541)
From net investment income

From net realized gain (265,688) (387,106)

TOTAL DISTRIBUTIONS (285,302) (404,647)

Share transactions 800,429 665,444
Net proceeds from sales of shares

Reinvestment of distributions 284,994 404,124

Cost of shares redeemed (438,259) (572,056)

Net increase (decrease) in net assets resulting from 647,164 497,512
share transactions

TOTAL INCREASE (DECREASE) IN NET ASSETS 474,552 522,756

NET ASSETS

Beginning of period 2,688,268 2,165,512

End of period (including undistributed net investment $ 3,162,820 $ 2,688,268
income of $33,743 and $42,699, respectively)

OTHER INFORMATION
Shares

Sold 46,345 37,751

Issued in reinvestment of distributions 16,081 24,793

Redeemed (26,386) (32,513)

Net increase (decrease) 36,040 30,031

</TABLE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED NOVEMBER 30,

1994 1993 1992 1991 1990

SELECTED PER-SHARE DATA

Net asset value, beginning of period $ 19.26 $ 19.77 $ 17.21 $ 13.13 $ 15.62

Income from Investment Operations

Net investment income .19 .09 .14 .27 .34

Net realized and unrealized gain .58 3.09 3.66 3.92 (1.88)
(loss)

Total from investment operations .77 3.18 3.80 4.19 (1.54)

Less Distributions (.14) (.16) (.20) (.11) (.45)
From net investment income

From net realized gain (1.88) (3.53) (1.04) - (.50)

Total distributions (2.02) (3.69) (1.24) (.11) (.95)

Net asset value, end of period $ 18.01 $ 19.26 $ 19.77 $ 17.21 $ 13.13

TOTAL RETURN 4.24% 19.47% 23.39% 32.15% (10.59)
%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period $ 3,163 $ 2,688 $ 2,166 $ 1,577 $ 1,292
(in millions)

Ratio of expenses to average 1.07% 1.05% 1.02% .83% .98%
net assets

Ratio of net investment income to 1.13% .80% 1.01% 1.56% 2.34%
average net assets

Portfolio turnover rate 72% 101% 138% 119% 127%

</TABLE>

NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1994

10. SIGNIFICANT ACCOUNTING
POLICIES.
Fidelity Retirement Growth Fund (the fund) is a fund of Fidelity Financial
Trust (the trust) and is authorized to issue an unlimited number of shares.
The trust is registered under the Investment Company Act of 1940, as
amended (the 1940 Act), as an open-end management investment company
organized as a Massachusetts business trust. The following summarizes the
significant accounting policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are readily
available are valued at the last sale price, or if no sale price, at the
closing bid price. Securities (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 maturing within sixty days
of their purchase date are valued at amortized cost or original cost plus
accrued interest, both of which approximate current value.
FOREIGN CURRENCY TRANSLATION.
The accounting records of the fund are maintained in U.S. dollars.
Investment securities and other assets and liabilities denominated in a
foreign currency are translated into U.S. dollars at the prevailing rates
of exchange at period end. Purchases and sales of securities, income
receipts, and expense payments are translated into U.S. dollars at the
prevailing exchange rate on the respective dates of the transactions.
Reported net realized gains and losses on foreign currency transactions
represent currency gains and losses realized between the trade and
settlement dates on securities transactions and the difference between the
amount of net investment income accrued and the U.S. dollar amount actually
received. The effects of changes in foreign currency exchange rates on
investments in securities are not segregated in the Statement of Operations
from the effects of changes in market prices of those securities, but are
included with the net realized and unrealized gain or loss on investment
securities.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes all of its taxable income for its fiscal
year. The schedule of investments includes information regarding income
taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date,
except certain dividends from foreign securities where the ex-dividend date
may have passed, are recorded as soon as the fund is informed of the
ex-dividend date. Interest income is accrued as earned. Investment income
is recorded net of foreign taxes withheld where recovery of such taxes is
uncertain.
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
foreign currency transactions, non-taxable dividends, and losses deferred
due to wash sales.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect net investment income per share. Accumulated undistributed net
investment income may include temporary book and tax basis differences
which will reverse in a subsequent period. Any taxable income or gain
remaining at fiscal year end is distributed in the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
CHANGE IN ACCOUNTING FOR DISTRIBUTIONS TO SHAREHOLDERS. Effective December
1, 1993, the fund adopted Statement of Position 93-2: Determination,
Disclosure, and Financial Statement Presentation of Income, Capital Gain,
and Return of Capital Distributions by Investment Companies. As a result,
the fund changed the classification of distributions to shareholders to
better disclose the differences between financial statement amounts and
distributions determined in accordance with income tax regulations.
Accordingly, amounts as of the beginning of the fiscal year have been
reclassified to reflect a decrease in paid in capital of $39,000, a
decrease in undistributed net investment income of $23,091,000 and an
increase in accumulated net realized gain on investments of $23,130,000.
11. OPERATING POLICIES.
FORWARD FOREIGN CURRENCY CONTRACTS. The fund may enter into forward foreign
currency contracts. These contracts involve market risk in excess of the
amount reflected in the fund's Statement of Assets and Liabilities. The
face or contract amount in U.S. dollars reflects the total exposure the
fund has in that particular currency contract. The U.S. dollar value of
forward foreign currency contracts is determined using forward currency
exchange rates supplied by a quotation service. Losses may arise due to
changes in the value of the foreign currency or if the counterparty does
not perform under the contract. Purchases and sales of forward foreign
currency contracts having the same settlement date and broker are offset
and presented net on the Statement of
2. OPERATING POLICIES -
CONTINUED
FORWARD FOREIGN CURRENCY
CONTRACTS - CONTINUED
Assets and Liabilities. Gain (loss)on the purchase or sale of forward
foreign currency contracts having the same settlement date and broker is
recognized on the date of offset, otherwise gain (loss) is recognized on
settlement date.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying securities, whose market value is required to be at least
102% of the resale price at the time of purchase. The fund's investment
adviser, Fidelity Management & Research Company (FMR), is responsible for
determining that the value of these underlying securities remains at least
equal to the resale price.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other affiliated
entities of FMR, may transfer uninvested cash balances into one or more
joint trading accounts. These balances are invested in one or more
repurchase agreements that mature in 60 days or less from the date of
purchase, and are collateralized by U.S. Treasury or Federal Agency
obligations.
RESTRICTED SECURITIES. The fund is permitted to invest in privately placed
restricted securities. These securities 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, restricted securities (excluding 144A issues) amounted
to $4,434,000 or 0.1% of net assets.
12. PURCHASES AND SALES
OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $1,751,881,000 and $1,777,448,000, respectively, of which
purchases of U.S. government and government agency obligations aggregated
$49,756,000.
13. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly
basic fee that is calculated on the basis of a group fee rate plus a fixed
individual fund fee rate applied to the average net assets of the fund. The
group fee rate is the weighted average of a series of rates and is based on
the monthly average net assets of all the mutual funds advised by FMR. The
rates ranged from .2850% to .5200% for the period December 1, 1993 to July
31, 1994 and .2700% to .5200% for the period August 1, 1994 to November 30,
1994. In the event that these rates were lower than the contractual rates
in effect during those periods, FMR voluntarily implemented the above
rates, as they resulted in the same or a lower management fee. The annual
individual fund fee rate is .30%.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
The basic fee is subject to a performance adjustment (up to a maximum of
(plus/minus) .20%) based on the fund's investment performance as compared
to the appropriate index over a specified period of time. For the period,
the management fee was equivalent to an annual rate of .77% of average net
assets after the performance adjustment.
DISTRIBUTION AND SERVICE PLAN. Pursuant to the Distribution and Service
Plan (the Plan), and in accordance with Rule 12b-1 of the 1940 Act, FMR or
the fund's distributor, Fidelity Distributors Corporation (FDC), an
affiliate of FMR, may use their resources to pay administrative and
promotional expenses related to the sale of the fund's shares. Subject to
the approval of the Board of Trustees, the Plan also authorizes payments to
third parties that assist in the sale of the fund's shares or render
shareholder support services. FMR or FDC has informed the fund that
payments made to third parties under the Plan amounted to $45,000 for the
period.
TRANSFER AGENT FEES. Fidelity Service Co. (FSC), an affiliate of FMR, is
the fund's transfer, dividend disbursing and shareholder servicing agent.
FSC receives fees based on the type, size, number of accounts and the
number of transactions made by shareholders. FSC pays for typesetting,
printing and mailing of all shareholder reports, except proxy statements.
ACCOUNTING AND SECURITY LENDING FEES. FSC maintains the fund's accounting
records and administers the security lending program. The security lending
fee is based on the number and duration of lending transactions. The
accounting fee is based on the level of average net assets for the month
plus out-of-pocket expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $868,000 for the period.
14. SECURITY LENDING.
The fund loaned securities to certain brokers who paid the fund negotiated
lenders' fees. These fees are included in interest income. The fund
receives U.S. Treasury obligations and/or cash as collateral against the
loaned securities, in an amount at least equal to 102% of the market value
of the loaned securities at the inception of each loan. This collateral
must be maintained at not less than 100% of the market value of the loaned
securities during the period of the loan. At period end, the value of the
securities loaned and the value of collateral amounted to $15,751,000 and
$16,452,000, respectively.
15. TRANSACTIONS WITH
AFFILIATED COMPANIES.
An affiliated company is a company in which the fund has ownership of at
least 5% of the voting securities. Transactions with companies which are or
were affiliates are as follows:
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES
AMOUNTS IN THOUSANDS PURCHASE SALES DIVIDEND MARKET
AFFILIATE COST COST INCOME VALUE
AFC Cable Systems, Inc. (a) $ 3,040 $ - $ - $ 8,816 American Bankers
Insurance
Group, Inc. 11,377 - 978 32,262 Broderbund Software, Inc. (a)
3,123 - - - Bugaboo Creek Steak House, Inc. (a) 162 887 - 4,228
Cable Design Technology Corp. (a) 3,261 - - 17,201 China Southern
Glass
Co. Ltd. Class B - - 33 3,260 Cinergi Pictures Entertainment, Inc.
(a) 2,539 - - 5,782 Cole National Corp. Class A 4,779 - - 11,176
Freds, Inc. Class A 1,104 - 181 8,934 Gametech, Inc. (a) 95 - -
1,129 IHOP Corp. (a) - 8,165 - - Image Industries, Inc. (a) - -
- - 5,688 Integrated Systems, Inc. (a) 399 459 - 10,785 Interface,
Inc. Class A 1,817 5,191 138 5,811 Just Toys, Inc. (a) - 956 -
1,151 K-Swiss, Inc. Class A - - 19 6,410 Kentucky Electric Steel,
Inc. (a) - - - 2,917 Lechters, Inc. (a) 8,469 - - 17,608
Libbey, Inc. 1,123 - 323 16,799 Loewenstein Furniture
Group, Inc. (a) - 197 - -
Maxwell Shoe, Inc. Class A 3,255 - - 7,220 Oroamerica, Inc. (a)
282 - - 2,335 Peoples Choice TV Corp. (a) 690 - - 8,358 Pillowtex
Corp. (a) 611 - - 10,252 Quantum Restaurant Group, Inc. (a) 561 -
- - 3,987 RHI Entertainment, Inc. 406 4,636 - - Shoe Carnival, Inc. (a)
- 745 - 3,520 Sierra On-Line, Inc. (a) 577 1,403 - 18,775 Sungard
Data Systems, Inc. (a) 1,957 - - 51,055 Whole Foods Market, Inc. (a)
5,200 2,010 - 20,957
TOTALS $ 54,827 $ 24,649 $ 1,672 $ 286,416
(a) NON-INCOME PRODUCING
16. BANK BORROWINGS.
The fund is permitted to have bank borrowings for temporary or emergency
purposes to fund shareholder redemptions. The fund has established
borrowing arrangements with certain banks. Under the most restrictive
arrangement, the fund must pledge to the bank securities having a market
value in excess of 220% of the total bank borrowings. The interest rate on
the borrowings is the bank's base rate, as revised from time to time. The
maximum loan and the average daily loan balances during the periods for
which loans were outstanding amounted to $6,930,000.
The weighted average interest rate was
3 7/8%. Interest expense includes $1,000 paid under the bank borrowing
program.
17. 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
$138,000 under this arrangement.
REPORT OF INDEPENDENT ACCOUNTANTS

To the Trustees of Fidelity Financial Trust and the Shareholders of
Fidelity Retirement Growth Fund:
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments (except for Moody's ratings), and the
related statements of operations and of changes in net assets and the
financial highlights present fairly, in all material respects, the
financial position of Fidelity Retirement Growth Fund (a fund of Fidelity
Financial Trust) at November 30, 1994, the results of its operations for
the period then ended, the changes in its net assets and the financial
highlights for the periods indicated in conformity with generally accepted
accounting principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of
the Fidelity Retirement Growth Fund's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with
generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which
included confirmation of securities owned at
November 30, 1994 by correspondence with the custodian and brokers and the
application of alternative auditing procedures where confirmations from
brokers were not received, provide a reasonable basis for the opinion
expressed above.
PRICE WATERHOUSE LLP
Boston, Massachusetts
January 3, 1995
DISTRIBUTIONS

The Board of Trustees of Fidelity Retirement Growth Fund voted to pay on
December 19, 1994, to shareholders of record at the opening of business on
December 16, 1994, a distribution of $1.55 derived from capital gains
realized from sales of portfolio securities and a dividend of $0.22 from
net investment income.
A total of 21% of the dividends distributed during the fiscal year
qualifies for the dividends-received deductions for corporate shareholders.
The fund will notify shareholders in January 1995 of the applicable
percentage for use in preparing 1994 income tax returns.
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OFFICERS
Edward C. Johnson 3d, President
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Security Transactions
BOARD OF TRUSTEES
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(2_FIDELITY_LOGOS)FIDELITY

EQUITY-INCOME II
FUND
ANNUAL REPORT
NOVEMBER 30, 1994
CONTENTS

PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.

PERFORMANCE 4 How the fund has done over time.

FUND TALK 6 The manager's review of fund
performance, strategy and outlook.

INVESTMENT CHANGES 10 A summary of major shifts in the
fund's investments over the past six
months.

INVESTMENTS 11 A complete list of the fund's
investments with their market
values.

FINANCIAL STATEMENTS 29 Statements of assets and liabilities,
operations, and changes in net
assets, as well as financial
highlights.

NOTES 33 Notes to the financial statements.

REPORT OF INDEPENDENT 38 The auditors' opinion.
ACCOUNTANTS

THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMA-
TION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED FOR
DISTRIBUTION TO
PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN
EFFECTIVE
PROSPECTUS. MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED BY,
ANY DEPOSITORY INSTITUTION. SHARES
ARE NOT INSURED BY THE FDIC, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY,
AND ARE
SUBJECT TO INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
NEITHER THE FUND NOR
FIDELITY DISTRIBUTORS CORPORATION IS A BANK. FOR MORE INFORMATION ON ANY
FIDELITY FUND,
INCLUDING CHARGES AND EXPENSES, CALL 1-800-544-8888 FOR A FREE PROSPECTUS.
READ IT
CAREFULLY BEFORE YOU INVEST OR SEND MONEY.
PRESIDENT'S MESSAGE

There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each
performance figure includes changes in a fund's share price, plus
reinvestment of any dividends (or income) and capital gains (the pro-
fits the fund earns when it sells stocks that have grown in value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1994 PAST 1 LIFE OF
YEAR FUND

Equity-Income II 4.91% 122.45%

S&P 500(registered trademark) 1.05% 57.34%

Average Equity Income Fund -1.54% n/a

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year, or since the fund began on
August 21, 1990. For example, if you invested $1,000 in a fund that had a
5% return over the past year, you would end up with $1,050. You can compare
the fund's returns to the performance of the Standard & Poor's Composite
Index of 500 stocks - a common proxy for the U.S. stock market. You can
also compare them to the average equity income fund, which currently
reflects the performance of 98 equity income funds with similar objectives
tracked by Lipper Analytical Services. Both benchmarks include reinvested
dividends and capital gains, if any, and exclude the effects of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1994 PAST 1 LIFE OF
YEAR FUND

Equity-Income II 4.91% 20.53%

S&P 500(registered trademark) 1.05% 11.17%

Average Equity Income Fund -1.54% n/a

AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and it shows you what would have happened if the fund had performed at a
constant rate each year.

$10,000 OVER LIFE OF FUND
Equity-Income II FuStandard & P
08/21/90 10000.00 10000.00
08/31/90 10090.00 9833.94
09/30/90 9790.00 9355.02
10/31/90 9790.00 9314.80
11/30/90 10180.00 9916.53
12/31/90 10451.06 10193.20
01/31/91 10954.00 10637.63
02/28/91 11929.70 11398.22
03/31/91 12425.00 11674.06
04/30/91 12770.42 11702.07
05/31/91 13420.62 12207.60
06/30/91 13105.68 11648.49
07/31/91 13833.74 12191.31
08/31/91 14361.43 12480.25
09/30/91 14456.52 12271.83
10/31/91 14904.70 12436.27
11/30/91 14456.52 11935.09
12/31/91 15320.98 13300.46
01/31/92 15754.68 13053.08
02/29/92 16262.55 13222.77
03/31/92 16199.85 12964.92
04/30/92 16550.86 13346.09
05/31/92 16731.69 13411.49
06/30/92 16626.26 13211.65
07/31/92 17139.48 13752.01
08/31/92 16786.64 13470.10
09/30/92 17001.03 13629.04
10/31/92 17140.73 13676.74
11/30/92 17807.02 14143.12
12/31/92 18240.50 14317.08
01/31/93 18739.34 14437.34
02/28/93 19071.80 14633.69
03/31/93 19793.83 14942.46
04/30/93 19849.52 14580.86
05/31/93 20150.27 14971.62
06/30/93 20341.48 15015.04
07/31/93 20542.99 14954.98
08/31/93 21214.70 15521.77
09/30/93 21136.44 15402.26
10/31/93 21530.15 15721.08
11/30/93 21203.93 15571.73
12/31/93 21685.40 15760.15
01/31/94 22723.04 16296.00
02/28/94 22286.52 15854.37
03/31/94 21374.37 15163.12
04/30/94 21955.26 15357.21
05/31/94 22216.06 15609.07
06/30/94 22047.47 15226.65
07/31/94 22643.35 15726.08
08/31/94 23417.99 16370.85
09/30/94 22879.55 15969.77
10/31/94 23274.85 16329.08
11/30/94 22244.67 15734.38

$10,000 OVER LIFE OF FUND: Let's say you invested $10,000 in Fidelity
Equity-Income II Fund on August 21, 1990, when the fund started. As the
chart shows, by November 30, 1994, the value of your investment would have
grown to $22,245 - a 122.45% increase on your initial investment. For
comparison, look at how the S&P 500 did over the same period. With
dividends reinvested, the same $10,000 investment would have grown to
$15,734 - a 57.34% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
growth in the long run and
volatility in the short run. In
turn, the share price and
return of a fund that invests in
stocks will vary. That means if
you sell your shares during a
market downturn, you might
lose money. But if you can
ride out the market's ups and
downs, you may have a gain.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW

MARKET RECAP
Rising interest rates contributed
to below-average returns in the
U.S. stock market during the 12
months ended November 30,
1994. The Standard & Poor's 500
stock index finished the 12-month
period with a total return of 1.05%
- - below its historical annual
average return of more than 10%.
After two months of steady gains,
stocks stumbled from February
through June 1994. During that
time, the Federal Reserve Board
raised short-term interest rates
four times in an effort to curb
possible future inflation triggered
by a strengthening economy.
Higher rates hurt stocks because
they raise the cost of borrowing
for companies and consumers,
often dampening future corporate
profits. In addition, higher rates
often make bonds and other
fixed-income investments more
attractive relative to stocks.
Despite a fifth Fed rate hike in
August, the market rallied from
July through October, fueled by
strengthening corporate earnings
and a flurry of merger and
acquisition activity. Interest rate
concerns resurfaced in
November, when the Fed raised
rates again. Although returns in
overseas markets were mixed,
foreign stocks generally fared
better than those in the U.S. The
Morgan Stanley EAFE (Europe,
Australia, Far East) index
returned 14.84% for the 12
months ended November 30,
while the Morgan Stanley
Emerging Markets Free index
was up 17.44% during the same
period.
An interview with Brian S. Posner, Portfolio Manager of Fidelity
Equity-Income II Fund
Q. BRIAN, HOW DID THE FUND DO?
A. For the 12 months ended November 30, 1994, the fund had a total return
of 4.91%. That compares favorably to both the Standard & Poor's 500 index
and the average equity income fund tracked by Lipper Analytical Services,
which returned 1.05% and -1.54%, respectively, during the same period.
Q. RISING INTEREST RATES HAVE HELPED CREATE TURBULENCE IN THE STOCK MARKET
DURING 1994. HOW DID THE FUND FINISH AHEAD OF THE MARKET AND MOST OF ITS
PEERS?
A. The market WAS more volatile this year than last, but I think it's
important to maintain some perspective. The three-year period from 1991
through 1993 was unique not only because the market did quite well, but
also because it experienced record low levels of volatility. In 1994, we
merely returned to a historically average level of volatility. Even so, it
was the type of market that can test a fund manager's convictions. Various
sectors of stocks came in and out of favor very rapidly; these changes no
longer occurred over quarters, but over days. I believe my long-time
strategy of building the fund stock by stock based on the individual merits
of each - rather than investing first by sector or by country - helped give
the fund some stability and added value.
Q. WHAT WERE SOME EXAMPLES OF INDIVIDUAL STOCK SELECTIONS THAT DID WELL?
A. Excellent performers among the fund's top 10 investments included
British Petroleum, Philip Morris and American Express. As I've discussed in
the past, British Petroleum is a great example of what successful
restructuring can accomplish for a company and its stock. BP has sold
unprofitable parts of its business and effectively cut costs, which has led
to improved earnings. Philip Morris also has successfully kept costs under
control, and the company's food and tobacco businesses have improved. Like
BP, American Express has focused on its core businesses such as its credit
card and travel services, while shedding those parts of the company that
were dragging it down.
Q. IN FACT, FINANCIAL STOCKS ARE STILL THE FUND'S LARGEST SECTOR
CONCENTRATION - 18.3% ON NOVEMBER 30. HAVE YOU MADE ANY CHANGES WITHIN THIS
GROUP?
A. Over the past 12 months, I've largely rotated the fund's financial
stocks out of banks and into diversified financial services companies, such
as American Express. I've concentrated on companies with attractive stock
valuations - prices relative to other measures such as earnings - and solid
long-term growth prospects. Further examples include Federal National
Mortgage Association (Fannie Mae) and Travelers, formerly known as
Primerica.
Q. ALTHOUGH SUFFERING RECENTLY, CERTAIN CYCLICAL STOCKS - WHICH TEND TO
RISE AND FALL WITH THE ECONOMY - HAVE DONE WELL IN 1994. HAS THE FUND
CAPITALIZED ON THIS TREND?
A. It has. In late 1993 and early 1994 - as the economy was gaining
strength - the fund profited from investments in cyclicals. Over the
summer, however, I began paring back the fund's stake after some of these
stocks hit my price targets. It turned out that while my timing wasn't
perfect, it was pretty good. Many investors sold these stocks in late
summer and early fall because they had reached the conclusion that interest
rates had risen to levels that signaled an impending end to the economic
recovery, which would mean slower earnings growth for cyclical companies.
Once valuations fell, I began moving back into the cyclical stocks of
commodity companies in particular. I simply don't believe that a worldwide
recession is imminent. In addition, I think that improving commodity
prices, effective cost cutting and cheap stock valuations bode well for
companies such as Alcan - an aluminum producer - and chemical company Union
Carbide.
Q. LET'S SWITCH GEARS A MINUTE AND TALK ABOUT DECISIONS THAT DIDN'T WORK
OUT AS HOPED . . .
A. Anytime the market behaves as it did in 1994, there are sure to be
regrets. Electric utility stocks such as Entergy were hurt by rising
interest rates. While the fund was underweighted relative to the broader
market, it hurt to own ANY electric utilities. Also, I regret not selling
some of the fund's railroad stocks, such as CSX, sooner. Again, investors
feared higher interest rates would negatively affect corporate profits.
Finally, it would have helped the fund to own more health care stocks over
the past six months. Valuations in this sector had been beaten down, and
when it appeared Congress had shelved health care reform, drug stocks in
particular did well. While the fund did profit from selected situations, I
still have concerns about the long-term prospects of health care companies.
Q. SIX MONTHS AGO, YOU MENTIONED THAT JAPANESE STOCKS HAD HELPED THE FUND.
HOW HAVE THEY DONE SINCE THEN?
A. They've been up and down, but I've maintained roughly a 7% stake in
Japan. We're seeing definite signs of an economic recovery there, and stock
valuations remain very attractive. I've focused the fund's investments in
two groups: exporters such as Sony, Hitachi and Toyota, and selected
domestic companies such as retailer Ito-Yokado and pharmaceutical company
Sankyo.
Q. BRIAN, ARE YOU STILL HEDGING ANY OF THE FUND'S JAPANESE INVESTMENTS WITH
DERIVATIVES KNOWN AS FORWARD FOREIGN CURRENCY CONTRACTS?
A. I have maintained currency hedges on roughly half of the fund's Japanese
stocks - mainly those of the exporters. These contracts reduce the fund's
exposure to foreign currency risk - the chance that movements in a
country's currency will negatively affect the fund's investments there - by
tying the value of hedged foreign investments to the U.S. dollar. Now let
me get back to why I decided specifically to hedge the stocks of the
exporters. By the end of 1993, all of our analysis was indicating the yen
was overvalued relative to the dollar. Because the profitability of
exporters is hurt by an expensive yen, I felt that these stocks could do
well if the yen fell. The problem is, unless I've hedged the yen, I'll give
back some of those stock gains when the currency falls. So if I'm
consistent in my line of thinking, I needed to use these contracts in this
limited way.
Q. HOW DID IT WORK OUT?
A. The stocks of the exporters did rise, due mainly to their depressed
valuations and increased profitability resulting from effective cost
cutting. But the hedges didn't work out as planned. The yen actually
strengthened relative to the dollar, which meant the fund gave up a portion
of the gains from these stocks in U.S. dollars. In addition, since hedging
losses count against the fund's income for tax purposes, the fund's
dividend this year was slightly lower than it might have been. However, I
believe this is a temporary situation. In fact, the value of the dollar
relative to the yen has been quite stable over the past six months. I
continue to believe that - in certain instances - limiting foreign currency
risk to the fund remains a sound strategy.
Q. LET'S TALK ABOUT YOUR OUTLOOK. WHAT'S ON THE HORIZON?
A. I think the increased market volatility we've seen may be with us for a
while. Rising interest rates have made fixed-income investments such as
bonds and money market funds more competitive relative
to stocks. If the inflow of investor dollars into stock funds slows,
managers will have to sell stocks in order to buy new ones, instead of
simply investing the incoming cash. That increased selling can create
volatility. However, there are benefits to an up and down market. When
stock valuations fall, I have the opportunity to buy excellent stocks at
cheap prices. So I am approaching 1995 cautiously, with an eye toward
opportunity.

TOP TEN STOCKS AS OF NOVEMBER 30, 1994
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE STOCKS
6 MONTHS AGO

American Express Co. 3.6 2.4

British Petroleum PLC ADR 3.1 3.3

Schlumberger Ltd. 2.5 2.1

Federal National Mortgage
Association 2.0 1.0

Travelers, Inc. (The) 1.9 1.2

Alcan Aluminium Ltd. 1.6 1.2

RJR Nabisco Holdings Corp. 1.4 0.5

Philip Morris Companies, Inc. 1.4 1.8

Total SA Class B 1.2 0.8

Loews Corp. 1.2 0.8

TOP FIVE INDUSTRIES AS OF NOVEMBER 30, 1994
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE INDUSTRIES
6 MONTHS AGO

Finance 18.3 22.7

Energy 15.7 13.6

Basic Industries 12.3 13.1

Retail & Wholesale 6.7 5.3

Durables 6.1 4.9

ASSET ALLOCATION
AS OF NOVEMBER 30, 1994* AS OF MAY 31, 1994**
Row: 1, Col: 1, Value: 12.6
Row: 1, Col: 2, Value: 4.1
Row: 1, Col: 3, Value: 3.9
Row: 1, Col: 4, Value: 40.0
Row: 1, Col: 5, Value: 39.4
Row: 1, Col: 1, Value: 13.8
Row: 1, Col: 2, Value: 4.4
Row: 1, Col: 3, Value: 4.0
Row: 1, Col: 4, Value: 40.0
Row: 1, Col: 5, Value: 37.8
Stocks 79.4%
Bonds 3.9%
Convertible
securities 4.1%
Short-term
investments 12.6%
FOREIGN
INVESTMENTS 21.8%
Stocks 77.8%
Bonds 4.0%
Convertible
securities 4.4%
Short-term
investments 13.8%
FOREIGN
INVESTMENTS 20.0%

*
**
INVESTMENTS NOVEMBER 30, 1994

Showing Percentage of Total Value of Investment in Securities

COMMON STOCKS - 79.3%
SHARES VALUE (NOTE 1)
(000S)
AEROSPACE & DEFENSE - 1.4%
Flightsafety International, Inc. 879,300 $ 34,293
Lockheed Corp. 545,800 37,524
Martin Marietta Corp. 720,100 31,234
103,051
BASIC INDUSTRIES - 10.7%
CHEMICALS & PLASTICS - 6.4%
Akzo NV sponsored ADR 35,400 1,956
Betz Laboratories, Inc. 427,600 19,135
CBI Industries, Inc. 179,300 3,967
du Pont (E.I.) de Nemours & Co. 1,378,600 74,272
EVC International NV (f) 261,000 11,408
Ferro Corp. 1,274,900 30,916
Geon Co. 247,000 6,453
Grace (W.R.) & Co. 1,241,600 45,939
Great Lakes Chemical Corp. (a) 1,684,500 89,279
Imperial Chemical Industries PLC:
ADR 116,100 5,544
Ord. 300,000 3,584
Nalco Chemical Co. 1,744,700 56,703
Potash Corp. of Saskatchewan 1,028,900 36,641
Sekisui Chemical Co. Ltd. 1,342,000 13,149
Shin-etsu Chemical Co. Ltd. 844,000 16,557
Union Carbide Corp. 2,230,400 63,845
479,348
IRON & STEEL - 0.0%
Armco, Inc. (a) 526,000 3,222
METALS & MINING - 2.6%
Alcan Aluminium Ltd. 4,845,453 119,291
Aluminum Co. of America 545,100 44,494
English China Clay PLC 1,903,570 10,163
Reynolds Metals Co. 435,600 20,528
194,476
PACKAGING & CONTAINERS - 0.2%
Sonoco Products Co. 665,300 14,054
PAPER & FOREST PRODUCTS - 1.5%
Champion International Corp. 925,100 32,147
International Paper Co. 375,300 26,834
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
BASIC INDUSTRIES - CONTINUED
PAPER & FOREST PRODUCTS - CONTINUED
Jefferson Smurfit Corp. (a) 393,700 $ 6,299
Temple-Inland, Inc. 800,100 35,904
Union Camp Corp. 346,000 16,046
117,230
TOTAL BASIC INDUSTRIES 808,330
CONGLOMERATES - 2.0%
Allied-Signal, Inc. 1,086,000 35,431
Textron, Inc. 324,600 15,256
Tomkins PLC Ord. 2,700,000 9,427
Tyco Laboratories, Inc. 352,500 16,215
United Technologies Corp. 1,234,300 72,206
148,535
CONSTRUCTION & REAL ESTATE - 0.7%
CONSTRUCTION - 0.1%
Lennar Corp. 383,300 5,989
ENGINEERING - 0.2%
EG&G, Inc. 859,200 12,673
REAL ESTATE INVESTMENT TRUSTS - 0.4%
Bradley Real Estate, Inc. (g) 439,950 6,214
Crown American Realty Trust (SBI) 583,900 7,299
Developers Diversified Realty 86,400 2,365
Haagen Alexander Properties, Inc. 112,000 1,652
LTC Properties, Inc. 103,400 1,254
Macerich Company 228,000 4,503
Simon Properties Group, Inc. 379,800 8,973
32,260
TOTAL CONSTRUCTION & REAL ESTATE 50,922
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
DURABLES - 5.4%
AUTOS, TIRES, & ACCESSORIES - 3.0%
Chrysler Corp. 512,000 $ 24,768
General Motors Corp. 1,851,200 70,577
Goodyear Tire & Rubber Co. 280,000 9,485
Honda Motor Co. Ltd. 1,983,000 33,286
Johnson Controls, Inc. 515,400 24,997
Nissan Motor Co. Ltd. Ord. 2,760,000 23,304
Toyota Motor Corp. 1,727,000 36,847
223,264
CONSUMER ELECTRONICS - 1.4%
Matsushita Electric Industrial Co. Ltd. 3,623,000 56,051
Sony Corp. 914,000 48,521
Sony Corp. ADR 6,800 360
104,932
TEXTILES & APPAREL - 1.0%
Burlington Industries, Inc. 1,666,800 16,668
Nisshinbo Industries, Inc. 2,381,000 26,484
Russell Corp. 629,500 19,121
Unifi, Inc. 628,800 15,641
77,914
TOTAL DURABLES 406,110
ENERGY - 14.4%
COAL - 0.0%
Zeigler Coal Holding Co. 378,500 4,258
ENERGY SERVICES - 5.5%
BJ Services Co. (a) 386,000 7,141
Baker Hughes, Inc. 1,125,700 20,263
Enterra Corp. (a) 926,800 18,304
Halliburton Co. 1,620,400 56,511
Helmerich & Payne, Inc. 850,000 23,800
Hornbeck Offshore Services, Inc. (a) 469,200 5,982
McDermott International, Inc. 1,160,600 27,564
Nabors Industries, Inc. (a) 1,372,900 9,954
Nowsco Well Service Ltd. 601,700 7,871
Offshore Logistics, Inc. (a) 142,500 1,942
Schlumberger Ltd. 3,550,300 188,610
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
ENERGY - CONTINUED
ENERGY SERVICES - CONTINUED
Tidewater, Inc. 1,872,600 $ 37,686
Weatherford International, Inc. (a) 858,600 7,942
413,570
OIL & GAS - 8.9%
Amerada Hess Corp. 1,596,900 72,659
British Petroleum PLC:
ADR 2,961,236 235,048
Ord. 3,087,746 20,546
Burlington Resources, Inc. (a) 150,000 5,363
Coastal Corp. (The) 395,900 10,194
Exxon Corp. 985,000 59,469
Murphy Oil Corp. 1,659,900 74,281
Newfield Exploration Co. (a) 726,100 16,428
Norsk Hydro AS 716,300 27,177
Norsk Hydro AS ADR 700,300 26,699
Occidental Petroleum Corp. 815,000 15,994
Total SA:
Class B 1,486,633 93,087
sponsored ADR 470,608 14,707
671,652
TOTAL ENERGY 1,089,480
FINANCE - 17.2%
BANKS - 2.7%
Bank of Boston Corp. 1,655,011 44,272
Bank of New York Co., Inc. 2,141,064 59,682
BanPonce Corp. 174,600 5,282
Chemical Banking Corp. 1,603,800 58,338
First Fidelity Bancorporation 6,462 291
Mellon Bank Corp. 5 --
Mercantile Bancorporation, Inc. 127,800 3,882
Republic New York Corp. 794,800 33,978
205,725
CREDIT & OTHER FINANCE - 4.2%
American Express Co. 9,173,712 271,771
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - CONTINUED
CREDIT & OTHER FINANCE - CONTINUED
Beneficial Corp. 1,314,300 $ 47,972
Household International, Inc. 61 2
319,745
FEDERAL SPONSORED CREDIT - 2.2%
Federal Home Loan Mortgage Corporation 376,200 18,763
Federal National Mortgage Association 2,076,300 147,677
166,440
INSURANCE - 5.1%
ACE Ltd. (a) 955,100 20,893
Alexander & Alexander Services, Inc. 1,670,550 31,532
Allstate Corp. 1,255,100 29,652
Berkley (W.R.) Corp. 594,000 19,676
Exel Ltd. 446,200 16,733
Gryphon Holdings, Inc. (a) (g) 547,900 7,328
Loews Corp. 1,048,400 90,556
Mid Ocean Ltd. Class A Ord. (a) (e) 300,000 5,203
NAC Re Corp. 846,100 21,364
Sedgwick Group PLC 1 -
Travelers, Inc. (The) 4,394,624 144,473
387,410
SAVINGS & LOANS - 1.2%
Ahmanson (H.F.) & Co. 1,571,500 26,126
Golden West Financial Corp. 880,300 30,811
Standard Federal Bank 1,380,000 34,155
91,092
SECURITIES INDUSTRY - 1.8%
Bear Stearns Companies, Inc. 1,106,800 17,294
Daiwa Securities Co. Ltd. 653,000 8,518
Lehman Brothers Holdings, Inc. 1,502,580 22,351
Morgan Stanley Group, Inc. 428,500 25,335
Nikko Securities Co. Ltd. 787,000 8,356
Nomura Securities Ltd. 2,537,000 49,767
131,621
TOTAL FINANCE 1,302,033
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
HEALTH - 2.0%
DRUGS & PHARMACEUTICALS - 1.5%
Allergan, Inc. 326,800 $ 9,845
American Home Products Corp. 660,200 42,996
Bristol-Myers Squibb Co. 607,400 35,077
Sankyo Co. Ltd. 773,000 19,306
Takeda Chemical Industries Ltd. 600,000 7,462
114,686
MEDICAL EQUIPMENT & SUPPLIES - 0.5%
Pall Corp. 1,864,100 33,088
TOTAL HEALTH 147,774
HOLDING COMPANIES - 0.1%
Christies International PLC 4,662,900 11,900
INDUSTRIAL MACHINERY & EQUIPMENT - 1.6%
ELECTRICAL EQUIPMENT - 0.6%
Mitsubishi Electric Co. Ord. 4,831,000 34,048
Omron Corp. 581,000 10,046
44,094
INDUSTRIAL MACHINERY & EQUIPMENT - 0.8%
Cooper Industries, Inc. 1,148,000 39,893
Goulds Pumps, Inc. 475,900 9,637
Keystone International, Inc. 484,900 8,789
58,319
POLLUTION CONTROL - 0.2%
Safety Kleen Corp. 800,000 11,600
WMX Technologies, Inc. 250,000 6,438
18,038
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 120,451
MEDIA & LEISURE - 0.2%
LEISURE DURABLES & TOYS - 0.1%
Hasbro, Inc. 204,400 6,030
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
MEDIA & LEISURE - CONTINUED
PUBLISHING - 0.1%
Dow Jones & Co, Inc. 248,900 $ 7,218
TOTAL MEDIA & LEISURE 13,248
NONDURABLES - 4.9%
BEVERAGES - 1.3%
PepsiCo, Inc. 299,700 10,602
Seagram Co. Ltd. 2,908,300 84,282
94,884
FOODS - 0.1%
Dole Food, Inc. 476,700 11,202
HOUSEHOLD PRODUCTS - 0.4%
Church & Dwight Co., Inc. 429,100 8,797
Orkla AS Class A Free shares 145,000 4,630
Rubbermaid, Inc. 243,800 6,583
Stanhome, Inc. 323,100 10,582
30,592
TOBACCO - 3.1%
Imasco Ltd. 721,500 20,385
Philip Morris Companies, Inc. 1,764,000 105,399
RJR Nabisco Holdings Corp. (a) 17,062,100 106,638
232,422
TOTAL NONDURABLES 369,100
RETAIL & WHOLESALE - 6.5%
APPAREL STORES - 1.8%
Charming Shoppes, Inc. 2,304,600 15,556
Edison Brothers Stores, Inc. 710,600 13,590
Limited, Inc. (The) 3,682,100 71,341
Ross Stores, Inc. 353,100 4,855
TJX Companies, Inc. 2,004,900 30,324
135,666
GENERAL MERCHANDISE STORES - 3.2%
Dillard Department Stores, Inc. Class A 2,674,000 75,206
Federated Department Stores, Inc. (a) 2,563,600 52,554
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
RETAIL & WHOLESALE - CONTINUED
GENERAL MERCHANDISE STORES - CONTINUED
Ito-Yokado Co. Ltd. 462,000 $ 24,526
Sears, Roebuck & Co. 1,820,900 86,038
238,324
GROCERY STORES - 1.1%
Fleming Companies, Inc. 708,074 16,286
Giant Food, Inc. Class A 498,600 11,156
Great Atlantic & Pacific Tea Co., Inc. 1,078,400 23,994
Supervalu, Inc. 1,374,500 33,675
85,111
RETAIL & WHOLESALE, MISC - 0.4%
Duty Free International, Inc. 956,500 11,598
Sotheby's Holdings, Inc. Class A 848,800 9,973
Uny Co., Ltd. 437,000 6,672
28,243
TOTAL RETAIL & WHOLESALE 487,344
SERVICES - 2.2%
ADVERTISING - 0.3%
WPP Group :
PLC 3,015,600 5,382
PLC (f) 9,300,000 16,599
PLC ADR 341,400 1,195
23,176
PRINTING - 0.5%
Donnelley (R.R.) & Sons Co. 1,141,000 32,661
New England Business Service, Inc. 170,800 3,074
Standard Register Co. 67,900 1,154
36,889
SERVICES - 1.4%
ADT Ltd. 1,237,600 13,768
Jostens, Inc. 589,100 10,162
Western Atlas, Inc. 1,934,769 84,404
108,334
TOTAL SERVICES 168,399
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - 3.0%
COMPUTERS & OFFICE EQUIPMENT - 1.3%
Canon, Inc. 2,137,000 $ 36,951
Fujitsu Ltd. 1,300,000 13,540
International Business Machines Corp. 725,900 51,357
101,848
ELECTRONICS - 0.9%
Hitachi Ltd. 5,525,000 54,582
Nitto Denko Corp. 609,000 9,853
64,435
PHOTOGRAPHIC EQUIPMENT - 0.8%
Fuji Photo Film Co. Ltd. 592,000 13,170
Polaroid Corp. 1,564,300 49,080
62,250
TOTAL TECHNOLOGY 228,533
TRANSPORTATION - 2.6%
RAILROADS - 2.1%
Burlington Northern, Inc. 574,600 28,012
CSX Corp. 369,700 25,694
Canadian Pacific Ltd.. 3,614,900 56,156
Illinois Central Corp., Series A 1,524,000 46,101
155,963
TRUCKING & FREIGHT - 0.5%
Roadway Services, Inc. 815,000 41,158
TOTAL TRANSPORTATION 197,121
UTILITIES - 4.4%
ELECTRIC UTILITY - 1.7%
Baltimore Gas & Electric Co. 686,700 15,537
DPL, Inc. 883,750 18,006
Entergy Corp. 84 2
Fuji Electric Co., Ltd. 7,541,000 40,185
Illinova Corporation Holding Co. 1,193,200 23,864
Veba Vereinigte Elektrizitaets & Bergwerks AG Ord. 100,000 32,818
130,412
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
UTILITIES - CONTINUED
GAS - 0.0%
UGI Corporation 1,354 $ 26
TELEPHONE SERVICES - 2.7%
Ameritech Corp. 1,542,800 60,941
NYNEX Corp. 2,374,100 89,326
Koninklijke PPT Nederland (f) 389,200 12,160
Koninklijke PPT Nederland 1,175,000 36,710
199,137
TOTAL UTILITIES 329,575
TOTAL COMMON STOCKS
(Cost $5,946,612) 5,981,906
PREFERRED STOCKS - 3.0%
CONVERTIBLE PREFERRED STOCKS - 2.9%
BASIC INDUSTRIES - 0.7%
METALS & MINING - 0.7%
Alumax, Inc., Series A, $4.00 (a) 80,467 8,932
Reynolds Metals Co. $3.31 950,600 44,440
53,372
ENERGY - 1.0%
OIL & GAS - 1.0%
Atlantic Richfield Co. $.5575 1,364,800 33,608
Occidental Petroleum Corp. $3.875 (f) 305,000 15,136
Unocal Corp. $3.50 (a) (f) 554,600 28,562
77,306
INDUSTRIAL MACHINERY & EQUIPMENT - 0.9%
ELECTRICAL EQUIPMENT - 0.5%
Westinghouse Electric Corp. $1.30 (f) 2,473,000 33,076
PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
CONVERTIBLE PREFERRED STOCKS - CONTINUED
INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED
INDUSTRIAL MACHINERY & EQUIPMENT - 0.4%
Cooper Industries, Inc. $8.00 1,443,300 $ 30,851
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 63,927
NONDURABLES - 0.1%
TOBACCO - 0.1%
RJR Nabisco Holdings Corp., Series C, depositary
shares representing 1/10 share 1,200,000 8,100
TRANSPORTATION - 0.2%
AIR TRANSPORTATION - 0.2%
Pittston Co. $3.125 (f) 320,500 13,942
TOTAL CONVERTIBLE PREFERRED STOCKS 216,647
NONCONVERTIBLE PREFERRED STOCKS - 0.1%
ENERGY - 0.0%
OIL & GAS - 0.0%
Gulf Canada Resources Ltd. (e) 11,768 31
Gulf Canada Resources Ltd. sr. Series 1, adj. rate 410,232 1,128
1,159
FINANCE - 0.1%
SAVINGS & LOANS - 0.1%
Ahmanson (H.F.) & Co. depositary shares representing
1/2 share pref. B 9.6% 359,961 8,954
TOTAL NONCONVERTIBLE PREFERRED STOCKS 10,113
TOTAL PREFERRED STOCKS
(Cost $237,889) 226,760
CORPORATE BONDS - 4.1%
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B) (000S) (000S)
CONVERTIBLE BONDS - 1.2%
CONGLOMERATES - 0.1%
Hanson America, Inc. 2.39%, 3/1/01 (f) A3 $ 6,904 $ 4,936
CONSTRUCTION & REAL ESTATE - 0.0%
REAL ESTATE INVESTMENT TRUSTS - 0.0%
Centerpoint Properties 8.22%, 1/15/04 - 1,030 1,020
Sizeler Property Investors, Inc. 8%, 7/15/03 - 1,000 850
1,870
DURABLES - 0.3%
TEXTILES & APPAREL - 0.3%
Unifi, Inc. 6%, 3/15/02 Baa1 19,000 18,881
ENERGY - 0.0%
OIL & GAS - 0.0%
USX-Marathon Group 0%, 8/9/05 Baa3 4,000 1,740
FINANCE - 0.5%
BANKS - 0.5%
Bank of New York Co., Inc. 7 1/2%, 8/15/01 A3 29,340 42,030
HOLDING COMPANIES - 0.1%
Amer Group Ltd.:
6 1/4%, 6/15/03 (f) - 5,000 4,300
6 1/4%, 6/15/03 euro - 2,000 1,740
6,040
RETAIL & WHOLESALE - 0.2%
GENERAL MERCHANDISE STORES - 0.2%
Federated Department Stores, Inc. 6%,
2/15/04 (d) Ba3 17,000 16,214
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B) (000S) (000S)
CONVERTIBLE BONDS - CONTINUED
TRANSPORTATION - 0.0%
TRUCKING & FREIGHT - 0.0%
Builders Transport, Inc. 8%, 8/15/05 B2 $ 618 $ 548
TOTAL CONVERTIBLE BONDS 92,259
NONCONVERTIBLE BONDS - 2.9%
BASIC INDUSTRIES - 0.9%
CHEMICALS & PLASTICS - 0.2%
IMC Fertilizer Group, Inc.:
9 1/4%, 10/1/00 B3 2,750 2,674
10 1/8, 6/15/01 B3 10,000 10,050
9.45%, 12/15/11 B3 3,000 2,670
15,394
IRON & STEEL - 0.1%
Inland Steel Industries, Inc. 12 3/4%, 12/15/02 Ba3 4,000 4,290
PAPER & FOREST PRODUCTS - 0.6%
Container Corp. America 14%, 12/1/01 B3 18,000 19,440
Stone Container Corp.:
11 1/2%, 9/1/99 B2 2,000 1,965
9 7/8%, 2/1/01 B1 20,000 18,300
sr. sub. notes 10 3/4%, 4/1/02 B2 5,000 4,663
44,368
TOTAL BASIC INDUSTRIES 64,052
CONGLOMERATES - 0.2%
Coltec Industries, Inc. 10 1/4%, 4/1/02 B1 6,750 6,615
Sequa Corp. 9 3/8%, 12/15/03 B3 12,110 10,384
16,999
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
CONSTRUCTION & REAL ESTATE - 0.1%
BUILDING MATERIALS - 0.1%
USG Corp.:
10 1/4%, 12/15/02 B1 $ 2,500 $ 2,538
Series B 10 1/4%, 12/15/02 B1 3,062 3,111
5,649
DURABLES - 0.4%
AUTOS, TIRES, & ACCESSORIES - 0.0%
Auburn Hills Trust gtd. exchangeable
15 7/8%, 5/1/20 A3 1,100 1,444
TEXTILES & APPAREL - 0.4%
Westpoint Stevens, Inc.:
8 3/4%, 12/15/01 B1 9,300 8,417
9 3/8%, 12/15/05 B3 27,750 24,281
32,698
TOTAL DURABLES 34,142
ENERGY - 0.3%
ENERGY SERVICES - 0.2%
Global Marine, Inc. 12 3/4%, 12/15/99 B1 9,000 9,653
TransTexas Gas Corp. 10 1/2%, 9/1/00 B1 3,360 3,200
12,853
OIL & GAS - 0.1%
Atlantic Richfield Co. notes
10 3/8%, 7/15/1995 A2 500 510
BP America, Inc. gtd. 10.15%, 3/15/96 A1 1,500 1,545
Chevron Corp. Profit Sharing/Savings Plan
Trust Fund gtd. 6.92%, 1/1/96 Aa2 2,000 1,988
Mesa Capital Corp.:
12 3/4%, 6/30/96 (d) B3 975 878
12 3/4%, 6/30/98 (d) B3 7,500 5,943
10,864
TOTAL ENERGY 23,717
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
FINANCE - 0.5%
BANKS - 0.1%
Morgan (J.P.) & Co., Inc. 5 3/8%, 1/21/95 Aa1 $ 2,000 $ 1,998
Republic National Bank New York 5.20%,
1/17/95 Aa1 2,000 1,998
3,996
CREDIT & OTHER FINANCE - 0.1%
Chrysler Financial Corp. 9 1/2%, 12/15/99 A3 5,000 5,218
Exxon Capital Corp. gtd. 7 3/4%, 2/14/96 Aaa 2,000 2,006
7,224
INSURANCE - 0.3%
ITT Hartford Group, Inc. 7 1/4%, 12/1/96 A1 1,500 1,477
Phoenix Real Estate Corp. 9 3/4%, 8/15/03 Ba2 5,300 5,154
Reliance Group 9%, 11/15/00 Ba3 16,000 14,320
20,951
SAVINGS & LOANS - 0.0%
Coast Savings Financial, Inc. 10%, 4/1/00 B1 4,000 3,760
TOTAL FINANCE 35,931
MEDIA & LEISURE - 0.1%
LODGING & GAMING - 0.1%
Host Marriott Corp. 9 1/8%, 12/1/00 B1 823 804
Host Marriott Hospitality, Inc. 10 7/8%, 11/1/01 B1 3,292 3,284
4,088
PUBLISHING - 0.0%
News America Holdings, Inc. 12%, 12/15/01 Ba1 950 1,063
TOTAL MEDIA & LEISURE 5,151
NONDURABLES - 0.1%
BEVERAGES - 0.0%
Coca-Cola Company (The) 12 1/8%, 6/15/95 Aa3 1,000 1,003
FOODS - 0.1%
Chiquita Brands International, Inc. sub. notes
11 1/2%, 6/1/01 B3 3,997 4,017
TOTAL NONDURABLES 5,020
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (B) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
TRANSPORTATION - 0.2%
AIR TRANSPORTATION - 0.2%
AMR Corp. 7 3/4%, 12/1/97 Baa3 $ 20,000 $ 19,348
UTILITIES - 0.1%
ELECTRIC UTILITY - 0.1%
Carolina Power & Light Co. 5.20%, 1/1/95 A2 2,000 1,998
Ontario Hydro gtd. 9 1/4%, 5/1/95 Aa3 1,000 1,011
Southern California Edison Co. 5.55%, 2/1/95 Aa3 2,000 1,998
5,007
TOTAL NONCONVERTIBLE BONDS 215,016
TOTAL CORPORATE BONDS
(Cost $329,399) 307,275
U.S. TREASURY OBLIGATIONS - 0.0%
9 1/4%, 1/15/96 Aaa 2,000 2,046
7 7/8%, 7/31/96 Aaa 2,000 2,017
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $4,383) 4,063
FOREIGN GOVERNMENT OBLIGATIONS (H) - 1.0%
Canada Government:
Treasury Bill 0%, 2/23/95 - CAD 11,900 8,517
8 1/4%, 3/1/97 Aaa CAD 59,900 43,568
7 3/4%, 9/1/99 Aaa CAD 10,000 6,982
9%, 12/01/04 Aaa CAD 22,150 15,937
TOTAL FOREIGN GOVERNMENT OBLIGATIONS
(Cost $76,894) 75,004
REPURCHASE AGREEMENTS - 12.6%
MATURITY AMOUNT VALUE (NOTE 1)
(000S) (000S)
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.71% dated
11/30/94 due 12/1/94 $ 950,723 $ 950,572
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $7,545,749) $ 7,545,580
FORWARD FOREIGN CURRENCY CONTRACTS
AMOUNTS IN SETTLEMENT UNREALIZED
THOUSANDS DATE(S) VALUE GAIN/(LOSS)
CONTRACTS TO SELL
37,389,124 JPY 12/9/94 to 1/18/95 $ 379,033 $ 1,116
(Receivable amount $380,149)
THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 5.0%
CURRENCY ABBREVIATIONS
CAD - Canadian dollar
JPY - Japanese yen
LEGEND
(m) Non-income producing
(n) Principal amount is stated in United States dollars unless otherwise
noted.
(o) Standard & Poor's Corporation credit ratings are used in the absence of
a rating by Moody's Investors Service, Inc.
(p) Debt obligation initially issued in zero coupon form which converts to
coupon form at a specified rate and date.
(q) Restricted securities - Investment in securities not registered under
the Securities Act of 1933 (see Note 2 of Notes to Financial Statements).
Additional information on each holding is as follows:
ACQUISITION ACQUISITION SECURITY DATE COST
Gulf Canada
Resources Ltd. 10/15/93 $ 29,000
Mid Ocean Ltd.
Class A Ord. 11/4/92 $ 5,000,000
(r) 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 $140,119,000 or 1.8% of net
assets.
(s) Affiliated company (see Note 5 of Notes to Financial Statements).
(t) Most foreign government obligations have not been individually rated by
S&P or Moody's. The ratings listed are assigned to securities by FMR, the
fund's investment adviser, based principally on S&P and Moody's ratings of
the sovereign credit of the issuing government.
OTHER INFORMATION
Distribution of investments by country of issue, as a percentage of total
value of investment in securities, is as follows:
United States 78.2%
Japan 7.8
Canada 5.3
United Kingdom 4.5
France 1.4
Others (individually less than 1%) 2.8
TOTAL 100.0%
INCOME TAX INFORMATION
At November 30, 1994, the aggregate cost of investment securities for
income tax purposes was $7,546,030,000. Net unrealized depreciation
aggregated $450,000, of which $361,439,000 related to appreciated
investment securities and $361,889,000 related to depreciated investment
securities.
The fund hereby designates $49,726,000 as a capital gain dividend for the
purpose of the dividend paid deduction.
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNTS) NOVEMBER 30, 1994

ASSETS

Investment in securities, at value (including repurchase $ 7,545,580
agreements of $950,572) (cost $7,545,749) -
See accompanying schedule

Receivable for investments sold 183,642

Unrealized appreciation on foreign currency contracts 1,216

Receivable for fund shares sold 30,855

Dividends receivable 17,965

Interest receivable 10,863

Other receivables 31

TOTAL ASSETS 7,790,152

LIABILITIES

Payable for investments purchased $ 157,870

Unrealized depreciation on foreign currency contracts 100

Payable for fund shares redeemed 20,924

Accrued management fee 3,335

Other payables and accrued expenses 2,739

TOTAL LIABILITIES 184,968

NET ASSETS $ 7,605,184

Net Assets consist of:

Paid in capital $ 7,179,997

Undistributed net investment income 19,626

Accumulated undistributed net realized gain (loss) on 404,647
investments and foreign currency transactions

Net unrealized appreciation (depreciation) on 914
investments and assets and liabilities in foreign
currencies

NET ASSETS, for 409,628 shares outstanding $ 7,605,184

NET ASSET VALUE, offering price and redemption price per $18.57
share ($7,605,184 (divided by) 409,628 shares)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED NOVEMBER 30, 1994

INVESTMENT INCOME $ 128,620
Dividends (including $216 received from affiliated issuers)

Interest 69,748

TOTAL INCOME 198,368

EXPENSES

Management fee $ 32,556

Transfer agent fees 16,216

Accounting fees and expenses 766

Non-interested trustees' compensation 34

Custodian fees and expenses 479

Registration fees 1,242

Audit 90

Legal 41

Reports to shareholders 127

Miscellaneous 53

Total expenses before reductions 51,604

Expense reductions (892) 50,712

NET INVESTMENT INCOME 147,656

REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:

Investment securities 404,799

Foreign currency transactions (17,909) 386,890

Change in net unrealized appreciation (depreciation) on:

Investment securities (333,208)

Assets and liabilities in foreign currencies 1,083 (332,125)

NET GAIN (LOSS) 54,765

NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 202,421
FROM OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30,
1994 1993

INCREASE (DECREASE) IN NET ASSETS

Operations $ 147,656 $ 95,491
Net investment income

Net realized gain (loss) 386,890 207,418

Change in net unrealized appreciation (depreciation) (332,125) 234,493

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 202,421 537,402
FROM OPERATIONS

Distributions to shareholders: (144,019) (71,676)
From net investment income

From net realized gain (183,813) (45,921)

TOTAL DISTRIBUTIONS (327,832) (117,597)

Share transactions 4,818,748 3,502,848
Net proceeds from sales of shares

Reinvestment of distributions 317,638 114,466

Cost of shares redeemed (2,220,685) (1,164,550)

Net increase (decrease) in net assets resulting from 2,915,701 2,452,764
share transactions

TOTAL INCREASE (DECREASE) IN NET ASSETS 2,790,290 2,872,569

NET ASSETS

Beginning of period 4,814,894 1,942,325

End of period (including undistributed net investment $ 7,605,184 $ 4,814,894
income of $19,626 and $37,905, respectively)

OTHER INFORMATION
Shares

Sold 255,446 196,097

Issued in reinvestment of distributions 17,182 6,682

Redeemed (118,388) (64,583)

Net increase (decrease) 154,240 138,196

</TABLE>

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED NOVEMBER 30, AUGUST 21, 1990
(COMMENCEMENT
OF
OPERATIONS) TO
NOVEMBER 30,

1994 1993 1992 1991 1990

SELECTED PER-SHARE
DATA

Net asset value, $ 18.85 $ 16.57 $ 13.87 $ 10.18 $ 10.00
beginning of period

Income from Investment
Operations

Net investment income .37 .44 .40 .45 D .03

Net realized and .53 2.62 2.75 3.76 .15
unrealized gain (loss)

Total from investment .90 3.06 3.15 4.21 .18
operations

Less Distributions (.47) (.41) (.32) (.44) -
From net investment
income

From net realized gain (.71) (.37) (.13) (.08) -

Total distributions (1.18) (.78) (.45) (.52) -

Net asset value, end of $ 18.57 $ 18.85 $ 16.57 $ 13.87 $ 10.18
period

TOTAL RETURN B 4.91% 19.08% 23.18% 42.01% 1.80% C

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period $ 7,605 $ 4,815 $ 1,942 $ 292 $ 3
(in millions)

Ratio of expenses to .81% .88% 1.01% 1.52% 2.50% A,
average net assets C

Ratio of expenses to .83% .89% 1.01% 1.52% 2.50% A
average net assets
before expense
reductions

Ratio of net investment 2.36% 2.69% 3.09% 3.83% 3.89% A
income to average net
assets

Portfolio turnover rate 75% 55% 89% 206% 167% A

</TABLE>

A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED AND
WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE
PERIODS SHOWN.
C DURING THE PERIOD AUGUST 21, 1990 (COMMENCEMENT OF OPERATIONS) TO
NOVEMBER 30, 1990, EXPENSES WERE LIMITED IN ACCORDANCE WITH A STATE EXPENSE
LIMITATION.
D NET INVESTMENT INCOME PER SHARE REFLECTS $.12 PER SHARE RELATING TO A
NONRECURRING INITIATIVE TO INVEST IN DIVIDEND INCOME PRODUCING SECURITIES
WHICH WAS IN EFFECT FOR A PORTION OF 1991.
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1994

18. SIGNIFICANT ACCOUNTING
POLICIES.
Fidelity Equity-Income II Fund (the fund) is a fund of Fidelity Financial
Trust (the trust) and is authorized to issue an unlimited number of shares.
The trust is registered under the Investment Company Act of 1940, as
amended (the 1940 Act), as an open-end management investment company
organized as a Massachusetts business trust. The following summarizes the
significant accounting policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are readily
available are valued at the last sale price, or if no sale price, at the
closing bid price. Securities (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 maturing within sixty days
of their purchase date are valued at amortized cost or original cost plus
accrued interest, both of which approximate current value.
FOREIGN CURRENCY TRANSLATION.
The accounting records of the fund are maintained in U.S. dollars.
Investment securities and other assets and liabilities denominated in a
foreign currency are translated into U.S. dollars at the prevailing rates
of exchange at period end. Purchases and sales of securities, income
receipts, and expense payments are translated into U.S. dollars at the
prevailing exchange rate on the respective dates of the transactions.
Effective December 1, 1993, the fund adopted Statement of Position (SOP)
93-4: Foreign Currency Accounting and Financial Statement Presentation for
Investment Companies. In accordance with this SOP, reported net realized
gains and losses on foreign currency transactions represent net gains and
losses from sales and maturities of forward currency contracts, disposition
of foreign currencies, currency gains and losses realized between the trade
and settlement dates on security transactions, and the difference between
the amount of net investment income accrued and the U.S. dollar amount
actually received. Further, as permitted under the SOP, the effects of
changes in foreign currency exchange rates on investments in securities are
not segregated in the Statement of Operations from the effects of changes
in market prices of those securities, but are included with the net
realized and unrealized gain or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes all of its taxable income for its fiscal
year. The schedule of investments includes information regarding income
taxes under the caption "Income Tax Information."
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date,
except certain dividends from foreign securities where the ex-dividend date
may have passed, are recorded as soon as the fund is informed of the
ex-dividend date. Interest income is accrued as earned. Investment income
is recorded net of foreign taxes withheld where recovery of such taxes is
uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
foreign currency transactions, market discount, 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 and may
affect net investment income per share. Accumulated undistributed net
investment income may include temporary book and tax basis differences
which will reverse in a subsequent period. Any taxable income or gain
remaining at fiscal year end is distributed in the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
CHANGE IN ACCOUNTING FOR DISTRIBUTIONS TO SHAREHOLDERS. Effective December
1, 1993, the fund adopted Statement of Position 93-2: Determination,
Disclosure, and Financial Statement Presentation of Income, Capital Gain,
and Return of Capital Distributions by Investment Companies. As a result,
the fund changed the classification of distributions to shareholders to
better disclose the differences between financial statement amounts and
distributions determined in accordance with income tax regulations.
Accordingly, amounts as of the beginning of the fiscal year have been
reclassified to reflect an increase in paid in capital of $11,134,960, a
decrease in undistributed net investment income of $721,108 and a decrease
in accumulated net realized gain on investments of $10,413,852.
19. OPERATING POLICIES.
FORWARD FOREIGN CURRENCY
CONTRACTS. The fund may enter into forward foreign currency contracts.
These contracts involve market risk in excess of the amount reflected in
the fund's Statement of Assets and Liabilities. The face or contract amount
in U.S. dollars, as reflected in the schedule of investments under the
caption "Forward Foreign Currency Contracts," reflects
the total exposure the fund has in that particular currency contract. The
U.S. dollar value of forward foreign currency contracts is determined using
forward currency exchange rates supplied by a quotation service. Losses may
arise due to changes in the value of the foreign currency or if the
counterparty does not perform under the contract.
Purchases and sales of forward foreign currency contracts having the same
settlement date and broker are offset and any realized gain (loss) is
recognized on the date of offset, otherwise gain (loss) is recognized on
settlement date.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying securities, whose market value is required to be at least
102% of the resale price at the time of purchase. The fund's investment
adviser, Fidelity Management & Research Company (FMR), is responsible for
determining that the value of these underlying securities remains at least
equal to the resale price.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with other
affiliated entities of FMR, may transfer uninvested cash balances into one
or more joint trading accounts. These balances are invested in one or more
repurchase agreements that mature in 60 days or less from the date of
purchase, and are collateralized by U.S. Treasury or Federal Agency
obligations.
RESTRICTED SECURITIES. The fund is permitted to invest in privately placed
restricted securities. These securities 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, restricted securities (excluding 144A issues) amounted
to $5,234,000 or 0.07% of net assets.
20. PURCHASES AND SALES
OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $6,659,051,000 and $4,113,234,000, respectively, of which U.S.
government and government agency obligations aggregated $169,175,000 and
$96,032,000, respectively.
21. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly
fee that is calculated on the basis of a group fee rate plus a fixed
individual fund fee rate applied to the average net assets of the fund. The
group fee rate is the weighted average of a series of rates and is based on
the monthly average net assets of all the mutual funds advised by FMR. The
rates ranged from .2850% to .5200% for the period December 1, 1993 to July
31, 1994 and .2700% to .5200% for the period August 1, 1994 to November 30,
1994.
In the event that these rates were lower than the contractual rates in
effect during those periods, FMR voluntarily implemented the above rates,
as they resulted in the same or a lower management fee. The annual
individual fund fee rate is .20%. For the period, the management fee was
equivalent to an annual rate of .52% of average net assets.
DISTRIBUTION AND SERVICE PLAN. Pursuant to the Distribution and Service
Plan (the Plan), and in accordance with Rule 12b-1 of the 1940 Act, FMR or
the fund's distributor, Fidelity Distributors Corporation (FDC), an
affiliate of FMR, may use their resources to pay administrative and
promotional expenses related to the sale of the fund's shares. Subject
to the approval of the Board of Trustees, the Plan also authorizes payments
to third parties that assist in the sale of the fund's shares or render
shareholder support services. FMR or FDC has informed the fund that
payments made to third parties under the Plan amounted to $57,000 for the
period.
TRANSFER AGENT FEES. Fidelity Service Co. (FSC), an affiliate of FMR, is
the fund's transfer, dividend disbursing
and shareholder servicing agent. FSC receives fees based on the type, size,
number of accounts and the number of transactions made by shareholders. FSC
pays for typesetting, printing and mailing of all shareholder reports,
except proxy statements.
ACCOUNTING FEES. FSC maintains the fund's accounting records. The fee is
based on the level of average net assets for the month plus out-of-pocket
expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $3,810,000 for the period.
22. TRANSACTIONS WITH AFFILIATED COMPANIES.
An affiliated company is a company in which the fund has ownership of at
least 5% of the voting securities. Transactions with companies which are or
were affiliates are as follows:
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES
PURCHASE SALES DIVIDEND MARKET
AFFILIATE COST COST INCOME VALUE
Bradley Real Estate, Inc. $ 132 $ - $ 216 $ 6,214
Gryphon Holdings, Inc. (a) 105 - - 7,328
TOTALS $ 237 $ - $ 216 $ 13,542
(a) Non-income producing
23. 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
$892,000 under this arrangement.
REPORT OF INDEPENDENT ACCOUNTANTS

To the Trustees of Fidelity Financial Trust and the Shareholders
of Fidelity-Equity Income II Fund:
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments (except for Moody's and Standard &
Poor's ratings), and the related statements of operations and of changes in
net assets and the financial highlights present fairly, in all material
respects, the financial position of Fidelity Equity-Income II Fund (a fund
of Fidelity Financial Trust) at November 30, 1994, the results of its
operations for the year then ended, the changes in its net assets and the
financial highlights for the periods indicated in conformity with generally
accepted accounting principles. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of Fidelity Equity-Income II Fund's management; our
responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these financial statements in
accordance with generally accepted auditing standards which require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which
included confirmation of securities owned at November 30, 1994 by
correspondence with the custodian and brokers and the application of
alternative auditing procedures where confirmations from brokers were not
received, provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Boston, Massachusetts
January 5, 1995
DISTRIBUTIONS

The Board of Trustees of Fidelity Equity-Income II Fund voted to pay on
December 19, 1994, to shareholders of record at the opening of business on
December 16, 1994, a distribution of $0.85 derived from capital gains
realized from sales of portfolio securities and a dividend of $0.10 from
net investment income.
A total of 1.7% of the dividends distributed during the fiscal year was
derived from interest on U.S. Government securities which is generally
exempt from state income tax.
A total of 32% of the dividends distributed during the fiscal year
qualifies for the dividends-received deductions for corporate shareholders.
The fund will notify shareholders in January 1995 of the percentages for
use in preparing 1994 income tax returns.
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Brian S. Posner, Vice President
Gary L. French, Treasurer
John H. Costello, Assistant Treasurer
Arthur S. Loring, Secretary
Robert H. Morrison, Manager,
Security Transactions
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox *
Phyllis Burke Davis *
Richard J. Flynn *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Edward H. Malone *
Marvin L. Mann *
Gerald C. McDonough *
Thomas R. Williams *
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Co.
Boston, MA
CUSTODIAN
Chase Manhattan Bank, N.A.
New York, NY
GROWTH AND INCOME FUNDS
Balanced Fund
Convertible Securities Fund
Equity-Income Fund
Equity-Income II Fund
Fidelity Fund
Global Balanced Fund
Growth & Income Portfolio
Market Index Fund
Puritan(registered trademark) Fund
Real Estate Portfolio
Utilities Income Fund
THE FIDELITY
TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
(registered trademark)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE