FIDELITY FINANCIAL TRUST, N-30D, 1997-01-14

FIDELITY FINANCIAL TRUST
N-30D, 1997-01-14

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FIDELITY

(REGISTERED TRADEMARK)
RETIREMENT GROWTH
FUND
ANNUAL REPORT
NOVEMBER 30, 1996
CONTENTS

PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.

PERFORMANCE 4 How the fund has done over time.

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

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

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

FINANCIAL STATEMENTS 21 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.

NOTES 25 Notes to the financial statements.

REPORT OF INDEPENDENT 30 The auditors' opinion.
ACCOUNTANTS

DISTRIBUTIONS 31

THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR DISTRIBUTION TO
PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN
EFFECTIVE
PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISKS,
INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES,
CALL
1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST
OR SEND MONEY.
To reduce expenses and demonstrate respect for our environment, we have
initiated a project through which we will begin eliminating duplicate
copies of most financial reports and prospectuses to most households, even
if they have more than one account in the fund. If additional copies of
financial reports, prospectuses or historical account information are
needed, please call 1-800-544-6666.
PRESIDENT'S MESSAGE

(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
Although stocks have managed to post solid returns throughout 1996, signs
of strength in the economy have led to inflation fears, causing some
uncertainty in both the stock and bond markets so far this year. In 1995,
both stock and bond markets posted strong results, while the year before,
stocks posted below-average returns and bonds had one of the worst years in
history.
These market ups and downs are a normal part of investing, and there are
some basic principles that are helpful for investors to remember in
different types of markets.
If you can leave your money invested over the long term, you can avoid the
results of the volatility that generally accompanies the stock market in
the short term. You also can help to manage some of the risks of investing
through diversification. 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 types of 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. 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 or guaranteed 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. 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. A fund's total
return includes changes in share price, plus reinvestment of any dividends
(or income) and capital gains (the profits the fund earns when it sells
securities that have grown in value).
<TABLE>
<CAPTION>
<S> <C> <C> <C>
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1996 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

Retirement Growth 13.45% 111.70% 286.16%

S&P 500(registered trademark) 27.86% 130.90% 310.22%

Capital Appreciation Funds 18.05% 109.58% 243.35%
Average
</TABLE>
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, the
value of your investment would be $1,050. You can compare the fund's
returns to the performance of the Standard & Poor's 500 Index - a widely
recognized, unmanaged index of common stocks. To measure how the fund's
performance stacked up against its peers, you can compare it to the capital
appreciation funds average, which reflects the performance of 185 mutual
funds with similar objectives tracked by Lipper Analytical Services, Inc.
over the past 12 months. Both benchmarks include reinvested dividends and
capital gains, if any, and excludes the effects of sales charges.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1996 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

Retirement Growth 13.45% 16.18% 14.47%

S&P 500 27.86% 18.21% 15.16%

Capital Appreciation Funds Average 18.05% 15.37% 12.29%
</TABLE>
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
IMAHDR PRASUN SHR__CHT 19961130 19961209 103224 S00000000000001
Retirement Growth SP Standard & Poor 500
00073 SP001
1986/11/30 10000.00 10000.00
1986/12/31 9633.79 9745.00
1987/01/31 10985.91 11057.65
1987/02/28 11720.78 11494.43
1987/03/31 12143.89 11826.62
1987/04/30 12151.31 11721.36
1987/05/31 12388.85 11823.34
1987/06/30 12804.53 12420.42
1987/07/31 13791.78 13050.13
1987/08/31 14207.46 13536.90
1987/09/30 14096.12 13240.44
1987/10/31 10295.58 10388.45
1987/11/30 9605.25 9532.44
1987/12/31 10531.80 10257.86
1988/01/31 10716.40 10689.72
1988/02/29 11629.67 11187.86
1988/03/31 11619.96 10842.15
1988/04/30 11833.70 10962.50
1988/05/31 11775.41 11057.87
1988/06/30 12387.49 11565.43
1988/07/31 12241.76 11521.48
1988/08/31 11901.71 11129.75
1988/09/30 12261.19 11603.88
1988/10/31 12348.63 11926.47
1988/11/30 12193.18 11755.92
1988/12/31 12166.89 11961.65
1989/01/31 13105.85 12837.24
1989/02/28 12838.99 12517.59
1989/03/31 13175.03 12809.25
1989/04/30 13797.71 13474.05
1989/05/31 14064.57 14019.75
1989/06/30 13866.89 13939.84
1989/07/31 15171.55 15198.61
1989/08/31 15349.46 15496.50
1989/09/30 15576.78 15432.96
1989/10/31 15033.18 15074.92
1989/11/30 15438.41 15382.45
1989/12/31 15866.94 15751.63
1990/01/31 15085.23 14694.69
1990/02/28 15242.91 14884.25
1990/03/31 15369.06 15278.69
1990/04/30 14927.54 14896.72
1990/05/31 16325.68 16349.15
1990/06/30 16693.62 16237.98
1990/07/31 16630.54 16186.01
1990/08/31 14927.54 14722.80
1990/09/30 13340.17 14005.80
1990/10/31 12909.17 13945.57
1990/11/30 13802.72 14846.46
1990/12/31 14255.62 15260.67
1991/01/31 14912.75 15926.04
1991/02/28 16142.23 17064.75
1991/03/31 16566.19 17477.72
1991/04/30 16672.18 17519.66
1991/05/31 17223.33 18276.51
1991/06/30 16121.03 17439.45
1991/07/31 17170.33 18252.13
1991/08/31 17901.66 18684.70
1991/09/30 18124.24 18372.67
1991/10/31 18770.78 18618.86
1991/11/30 18240.83 17868.52
1991/12/31 20754.03 19912.68
1992/01/31 20799.57 19542.31
1992/02/29 21095.57 19796.35
1992/03/31 20446.65 19410.33
1992/04/30 20674.34 19980.99
1992/05/31 21061.42 20078.90
1992/06/30 20287.27 19779.72
1992/07/31 20981.72 20588.71
1992/08/31 20412.50 20166.64
1992/09/30 20651.57 20404.61
1992/10/31 21300.49 20476.03
1992/11/30 22507.25 21174.26
1992/12/31 22953.18 21434.70
1993/01/31 23525.61 21614.75
1993/02/28 22785.64 21908.71
1993/03/31 23427.88 22370.99
1993/04/30 23246.38 21829.61
1993/05/31 24475.01 22414.64
1993/06/30 24796.13 22479.65
1993/07/31 24963.68 22389.73
1993/08/31 26359.85 23238.30
1993/09/30 26457.59 23059.36
1993/10/31 27239.45 23536.69
1993/11/30 26890.40 23313.09
1993/12/31 28032.59 23595.18
1994/01/31 28824.69 24397.42
1994/02/28 28528.98 23736.25
1994/03/31 27221.59 22701.35
1994/04/30 27470.62 22991.92
1994/05/31 27657.39 23368.99
1994/06/30 27050.39 22796.45
1994/07/31 27735.21 23544.18
1994/08/31 29073.72 24509.49
1994/09/30 28746.87 23909.00
1994/10/31 28871.39 24446.96
1994/11/30 28030.93 23556.60
1994/12/31 28049.71 23905.94
1995/01/31 28172.26 24525.82
1995/02/28 28818.10 25481.60
1995/03/31 29429.02 26233.56
1995/04/30 30197.04 27006.14
1995/05/31 30581.04 28085.57
1995/06/30 31209.42 28738.00
1995/07/31 32728.00 29690.95
1995/08/31 32972.37 29765.47
1995/09/30 33688.02 31021.58
1995/10/31 32954.92 30910.83
1995/11/30 34037.12 32267.82
1995/12/31 34860.20 32889.29
1996/01/31 35378.91 34008.85
1996/02/29 35745.03 34324.11
1996/03/31 35860.64 34654.65
1996/04/30 36997.55 35165.46
1996/05/31 37325.13 36072.38
1996/06/30 36515.81 36209.81
1996/07/31 34453.97 34610.06
1996/08/31 35051.32 35339.99
1996/09/30 36650.70 37328.92
1996/10/31 36361.65 38358.45
1996/11/29 38616.19 41022.00
IMATRL PRASUN SHR__CHT 19961130 19961209 103230 R00000000000123

$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was invested
in Fidelity Retirement Growth Fund on November 30, 1986. As the chart
shows, by November 30, 1996, the value of the investment would have grown
to $38,616 - a 286.16% increase on the 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 $41,022 - a
310.22% 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
Paced by the robust performance
of blue chip stocks, the U.S. stock
market posted strong gains for
the year that ended November
30, 1996. The Standard & Poor's
500 Index returned 27.86%
during the period - well above its
long-term average of about 12%.
The stock market spent much of
the past year breaking price and
trading volume records. Solid
corporate earnings reports, large
cash inflows into mutual funds,
widespread optimism and a
generally favorable interest rate
environment propelled share
prices higher. Large capitalization
stocks thrived as investors
sought their lower volatility and
higher degree of liquidity over
smaller cap stocks in an
environment where it was
sometimes difficult to discern the
health of the economy. The Dow
Jones Industrial Average closed
above 6500 for the first time in
November. While short-term
confusion over the direction of
interest rates created a volatile
backdrop in the summer months,
stocks rallied again when the
Federal Reserve Board left
short-term interest rates
unchanged and it appeared
inflation would not be an issue for
the remainder of 1996.
Smaller-company stocks posted
strong gains at the beginning of
1996, but trended downward in
the spring and summer because
their earnings tend to be more
affected by the higher borrowing
costs brought on by higher rates.
When interest rate fears
subsided, these stocks
rebounded, only to fade toward
the end of the period due to
earnings concerns and a general
flight to quality.
NOTE TO SHAREHOLDERS: Fergus Shiel became Portfolio Manager of Fidelity
Retirement Growth Fund on June 3, 1996.
Q. FERGUS, HOW DID THE FUND PERFORM?
A. For the 12 months that ended November 30, 1996, the fund had a return of
13.45%. To see how the fund fared relative to its peers, the capital
appreciation funds average was up 18.05% over the same period, according to
Lipper Analytical Services. The Standard & Poor's 500 Index, a common
measuring stick for the U.S. stock market, had a 12-month return of 27.86%
as of November 30, 1996.
Q. THROUGH THE FIRST SIX MONTHS OF THE PERIOD, THE FUND'S RETURNS WERE MORE
COMPARABLE TO THAT OF THE S&P 500. WHAT HAPPENED IN THE SECOND HALF?
A. Like its peers in the capital appreciation group, the fund lost ground
to the S&P 500 due to the phenomenal success of large-cap stocks - equity
securities of the larger, household-name companies. The top 50 stocks in
the S&P enjoyed a heck of a ride. My strategy involves a disciplined
stock-by-stock approach that doesn't always lead me to the larger-sized
stocks. Though the fund did own some of these bigger stocks, I felt it
important not to abandon my valuation and growth disciplines. I've always
tried to buy the best value for the money while simultaneously keeping my
eye on a company's fundamental characteristics. My feeling was that some of
the larger stocks were expensive.
Q. THE U.S. STOCK MARKET HAS CERTAINLY BEEN AN APPEALING INVESTMENT VEHICLE
OVER THE PAST 12 MONTHS. WHAT'S YOUR TAKE ON THE OVERALL ENVIRONMENT YOU'VE
SEEN?
A. There's been a dramatic increase in the amount of money - both domestic
and international - flowing into the U.S. markets. In the overall economy,
the rate of money growth has outpaced actual economic growth, and I think
the surplus has flowed into the financial markets. Popular averages,
heavily weighted by large-capitalization stocks, have done exceptionally
well. For smaller companies, it became difficult to increase earnings
without possessing "pricing power," or the flexibility to price their own
products. As a result, many of these companies had a hard time competing
with the bigger firms.
Q. WERE THERE ANY UNDERLYING THEMES TO YOUR STOCK PICKING DURING THE
PERIOD?
A. There were a couple. While overseas money was streaming into the U.S., I
made some fairly significant investments in French-based, information
technology processing companies. Because Europe is about five years behind
the U.S. in terms of outsourcing information technology usage, I think that
area presents strong future potential. The other area I liked was gaming
stocks. Gaming stocks typically grow in value when companies add to
existing capacity, and there's a new building cycle underway in Las Vegas.
Q. LET'S TALK ABOUT SECTORS FOR A MOMENT. DOES THE SECTOR IN WHICH A
PARTICULAR STOCK RESIDES INFLUENCE YOUR STRATEGY? ALONG THOSE LINES, HOW
DID THE FUND'S TECHNOLOGY AND RETAIL STOCKS PERFORM?
A. While I'm not oblivious to my sector weightings, I do try to maintain a
stock-by-stock mentality. If I see a sector position getting a little too
large or small for my liking, I'll try to correct that. But it's not the
first thing I think of when I wake up in the morning. Concerning technology
specifically, many of my tech holdings are oriented toward information
services, a steady, recurring business. In the cyclical technology area,
there were signs of slowing demand, so I don't think the technology market
is as healthy as many think. Retail stocks, on the other hand, bounced back
a little from three years of subpar performance. This was driven by easier
year-over-year sales comparisons and corporate restructuring by some large
retailers such as Dayton-Hudson Corp. and Woolworth's. However, shoppers
are not back in droves and the industry may still suffer from overcapacity.
Q. WHICH INDIVIDUAL STOCKS PLAYED SIGNIFICANT ROLES IN DETERMINING THE
FUND'S RETURN?
A. On the positive end of the spectrum, Dayton-Hudson Corp., a
multi-business retailing entity based in Minneapolis, was a strong
turnaround story. It showed good return on capital and was able to improve
some of its existing businesses. The fund's financial stocks, including
Citicorp and First Bank System, also held their own. As far as
disappointments, Best Buy - a low-margin electronic superstore chain - saw
performance drop due to a fall-off in sales and brutal competition in the
overall consumer electronics area.
Q. WHAT'S YOUR OUTLOOK?
A. I'm bullish. I think the market can still go up from here. The U.S.
economy as a whole is in good shape, and it's my feeling that there's no
concrete inflation anywhere in the world right now. U.S. companies are
among the most efficient and productive companies in the world. I think the
stock market will continue to be an attractive place to be.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.

FUND FACTS
GOAL: capital appreciation
by investing mainly in
common stocks with the
potential for growth
FUND NUMBER: 073
TRADING SYMBOL: FDFFX
START DATE: March 25, 1983
SIZE: as of November 30,
1996, more than $4.2 billion
MANAGER: J. Fergus Shiel,
since June 1996; manager,
Fidelity Trend Fund, 1995-
1996; Fidelity Dividend
Growth Fund, 1994-1995;
Fidelity Select Broadcast &
Media Portfolio, 1993;
Fidelity Select
Telecommunications
Portfolio, 1992- 1994;
Fidelity Select Consumer
Products Portfolio,
1991-1992; joined Fidelity in
1989
(checkmark)
FERGUS SHIEL EXPLORES THE
POPULARITY OF THE U.S.
STOCK MARKET:
"Two specific factors behind
the market's surge have been
an increase in efficiency
within corporate America and
the appeal the U.S. market
has held for worldwide
investors. Corporate
managements have
increased their overall
productivity; they are now
more financially focused in
terms of return on capital and
cash flow generation.
Companies have become
adept at concerning
themselves with shareholder
value. For instance, rather
than dissipating shareholders'
funds by making illogical
acquisitions, companies are
more inclined to focus on
existing operations or return
excess capital to their
shareholders. At the same
time, overseas investors have
been underweighted in U.S.
equities. Relative to the
rest of the world, however,
the U.S. offers a stable
economy, a
shareholder-friendly
environment, large liquid
stocks and an appreciating
currency. These factors
should continue to make the
U.S. markets quite appealing
to foreign investors."
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C>

TOP TEN STOCKS AS OF NOVEMBER 30, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE STOCKS
6 MONTHS AGO

General Electric Co. 3.0 0.0

Intel Corp. 2.7 0.1

Citicorp 2.1 0.0

Coca-Cola Co. (The) 1.9 0.0

Mirage Resorts, Inc. 1.9 0.1

Tyco International Ltd. 1.8 1.0

SunGard Data Systems, Inc. 1.8 1.5

Ceridian Corp. 1.6 1.6

Circus Circus Enterprises, Inc. 1.6 0.1

Affiliated Computer Services, Inc. Class 1.4 0.0
A

TOP FIVE MARKET SECTORS AS OF NOVEMBER 30, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE MARKET
SECTORS
6 MONTHS AGO

Technology 18.6 6.7

Media & Leisure 13.8 12.5

Finance 13.5 2.7

Health 10.4 4.4

Retail & Wholesale 6.5 7.3
</TABLE>
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF NOVEMBER 30, 1996 * AS OF MAY 31, 1996 **
Row: 1, Col: 1, Value: 2.6
Row: 1, Col: 2, Value: 1.4
Row: 1, Col: 3, Value: 40.0
Row: 1, Col: 4, Value: 46.0
Row: 1, Col: 1, Value: 14.2
Row: 1, Col: 2, Value: 5.4
Row: 1, Col: 3, Value: 40.0
Row: 1, Col: 4, Value: 40.4
Stocks 98.2%
Bonds 0.2%
Short-term
investments 1.6%
FOREIGN
INVESTMENTS 10.4%
Stocks 80.4%
Bonds 5.4%
Short-term
investments 14.2%
FOREIGN
INVESTMENTS 12.9%
*
**
INVESTMENTS NOVEMBER 30, 1996

Showing Percentage of Total Value of Investment in Securities

COMMON STOCKS - 98.0%
SHARES VALUE (NOTE 1)
(000S)
AEROSPACE & DEFENSE - 3.2%
AEROSPACE & DEFENSE - 2.8%
Boeing Co. 357,600 $ 35,536
Lockheed Martin Corp. 260,200 23,581
McDonnell Douglas Corp. 718,100 37,970
Precision Castparts Corp. 72,500 3,398
Sundstrand Corp. 434,600 16,949
117,434
SHIP BUILDING & REPAIR - 0.4%
General Dynamics Corp. 243,400 17,951
TOTAL AEROSPACE & DEFENSE 135,385
BASIC INDUSTRIES - 3.5%
CHEMICALS & PLASTICS - 2.8%
Avery Dennison Corp. 49,000 3,461
Cytec Industries, Inc. 4,000 148
du Pont (E.I.) de Nemours & Co. 314,400 29,632
Goodrich (B.F.) Co. 300,200 13,471
Monsanto Co. 528,500 21,008
Morton International, Inc. 298,800 12,064
Sealed Air Corp. (a) 384,400 15,953
Witco Corp. 625,100 18,987
114,724
PACKAGING & CONTAINERS - 0.3%
Tupperware Corp. 266,500 14,124
PAPER & FOREST PRODUCTS - 0.4%
American Pad & Paper Co. (a) 183,800 3,630
Pentair, Inc. 401,500 11,644
15,274
TOTAL BASIC INDUSTRIES 144,122
CONGLOMERATES - 2.3%
AlliedSignal, Inc. 305,900 22,407
Tyco International Ltd. 1,346,057 73,697
96,104
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
CONSTRUCTION & REAL ESTATE - 0.4%
BUILDING MATERIALS - 0.0%
Sherwin-Williams Co. 22,800 $ 1,294
CONSTRUCTION - 0.2%
Compagnie de Saint Gobain 40,000 5,751
Sundance Homes, Inc. (a) 177,000 509
6,260
REAL ESTATE INVESTMENT TRUSTS - 0.2%
Beacon Properties Corp. 71,000 2,245
Cali Realty Corp. 232,300 6,563
8,808
TOTAL CONSTRUCTION & REAL ESTATE 16,362
DURABLES - 2.8%
AUTOS, TIRES, & ACCESSORIES - 1.9%
Chrysler Corp. 1,044,700 37,087
General Motors Corp. 283,000 16,308
Scania AB Class B 207,400 5,234
Volvo AB Class B 846,600 18,593
77,222
CONSUMER DURABLES - 0.8%
Minnesota Mining & Manufacturing Co. 360,300 30,175
Swedish Match Co. 1,281,900 4,199
34,374
CONSUMER ELECTRONICS - 0.1%
Getinge Class B 300,000 5,785
TOTAL DURABLES 117,381
ENERGY - 2.2%
OIL & GAS - 2.2%
American Exploration Co. 31,500 516
Belco Oil & Gas Corp. 30,800 878
British Petroleum PLC:
Ord. 1,100,554 12,727
ADR 232,876 32,311
Nationale Elf Aquitaine 110,000 9,606
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
ENERGY - CONTINUED
OIL & GAS - CONTINUED
Occidental Petroleum Corp. 1,160,200 $ 27,845
Parker & Parsley Petroleum Co. 36,300 1,198
United Meridian Corp. (a) 111,700 5,697
TOTAL ENERGY 90,778
FINANCE - 13.3%
BANKS - 7.5%
Allied Irish Banks PLC 869,849 5,719
Bank of Ireland, Inc. 2,382,000 20,748
Bank of New York Co., Inc. 820,100 29,421
BankAmerica Corp. 385,000 39,655
Citicorp 796,200 86,985
Comerica, Inc. 288,500 16,877
Credit Local de France (b) 35,000 3,169
First Bank System, Inc. 751,500 54,766
NationsBank Corp. 405,100 41,978
SunTrust Banks, Inc. 266,700 13,535
Wachovia Corp. 41,100 2,466
315,319
CREDIT & OTHER FINANCE - 1.4%
Axime SA Ex Segin (a)(b) 47,619 5,698
First Chicago NBD Corp. 248,100 14,576
First USA, Inc. 270,360 8,888
Group Axime 167,786 20,078
Irish Permanent PLC 260,000 2,112
MBNA Corp. 122,200 4,934
Woodchester Investments PLC Unit 988,802 3,491
59,777
FEDERAL SPONSORED CREDIT - 0.5%
Federal National Mortgage Association 524,400 21,631
INSURANCE - 2.8%
Aetna, Inc. 748,893 54,014
Allstate Corp. 485,300 29,239
Irish Life PLC 1,222,399 5,653
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - CONTINUED
INSURANCE - CONTINUED
MGIC Investment Corp. 202,300 $ 15,147
Paul Revere Corp. 349,900 11,066
115,119
SECURITIES INDUSTRY - 1.1%
Merrill Lynch & Co., Inc. 331,600 26,611
Morgan Stanley Group, Inc. 315,000 18,939
45,550
TOTAL FINANCE 557,396
HEALTH - 10.4%
DRUGS & PHARMACEUTICALS - 4.1%
American Home Products Corp. 725,600 46,620
Elan Corp. PLC ADR (a) 596,000 17,731
Merck & Co., Inc. 495,400 41,118
Pfizer, Inc. 274,900 24,638
Schering-Plough Corp. 514,500 36,658
Twinlab Corp. 500,000 6,000
172,765
MEDICAL EQUIPMENT & SUPPLIES - 4.9%
AmeriSource Health Corp. Class A (a) 406,300 15,998
Bard (C.R.), Inc. 567,000 15,876
Becton, Dickinson & Co. 1,045,900 43,928
Boston Scientific Corp. (a) 290,100 16,935
InControl, Inc. (a) 78,800 694
Johnson & Johnson 817,400 43,424
McKesson Corp. 49,400 2,779
Medtronic, Inc. 238,100 15,744
Omnicare, Inc. 704,100 21,475
St. Jude Medical, Inc. (a) 604,200 25,225
202,078
MEDICAL FACILITIES MANAGEMENT - 1.4%
Columbia/HCA Healthcare Corp. 432,800 17,312
HEALTHSOUTH Rehabilitation Corp. (a) 278,900 10,494
Health Management Associates, Inc. Class A (a) 273,000 6,040
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
HEALTH - CONTINUED
MEDICAL FACILITIES MANAGEMENT - CONTINUED
Oxford Health Plans, Inc. (a) 267,200 $ 15,498
Tenet Healthcare Corp. (a) 420,500 9,409
58,753
TOTAL HEALTH 433,596
HOLDING COMPANIES - 0.4%
Norfolk Southern Corp. 175,600 15,804
INDUSTRIAL MACHINERY & EQUIPMENT - 4.3%
ELECTRICAL EQUIPMENT - 4.3%
Alcatel Alsthom Compagnie Generale d'Electricite SA 341,866 31,078
Emerson Electric Co. 175,500 17,221
General Electric Co. 1,218,700 126,745
General Instrument Corp. (a) 9,000 199
General Signal Corp. 100,000 4,312
179,555
INDUSTRIAL MACHINERY & - 0.0%
Stanley Works 58,700 1,732
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 181,287
MEDIA & LEISURE - 13.8%
BROADCASTING - 1.2%
Time Warner, Inc. 1 -
TV 4 AB Class A 192,800 3,904
Viacom, Inc. Class B (non-vtg.) (a) 1,265,400 47,769
51,673
ENTERTAINMENT - 2.0%
Cinergi Pictures Entertainment, Inc. (a) 245,500 499
Disney (Walt) Co. 522,100 38,505
MGM Grand, Inc. (a) 1,127,600 43,553
82,557
LEISURE DURABLES & TOYS - 1.0%
Harley-Davidson, Inc. 949,200 42,121
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
MEDIA & LEISURE - CONTINUED
LODGING & GAMING - 5.2%
Aztar Corp. (a) 483,100 $ 3,503
Bally Entertainment Corp. 803,400 23,399
Circus Circus Enterprises, Inc. (a) 1,775,400 64,802
HFS, Inc. (a) 275,600 17,845
Millennium & Copthorne Hotels PLC (b) 200 1
Mirage Resorts, Inc. (a) 3,326,200 80,245
Rio Hotel & Casino, Inc. (a) 633,000 9,495
Sun International Hotels Ltd. Ord. (a) 345,996 17,170
216,460
PUBLISHING - 3.5%
Times Mirror Co. Class A 431,700 22,610
Dun & Bradstreet Corp. 540,300 12,224
EMAP PLC 850,000 10,434
Gannett Co., Inc. 210,400 16,516
Independent Newspapers PLC 1,264,999 6,488
Knight-Ridder, Inc. 636,700 26,742
Schibsted AS, Series B 505,000 9,195
Scholastic Corp. (a) 367,300 27,364
VNU Ord. 760,000 15,500
147,073
RESTAURANTS - 0.9%
Apple South, Inc. 878,900 12,964
J.D. Wetherspoon PLC 201,156 4,160
Lone Star Steakhouse Saloon 49,400 1,414
Starbucks Corp. (a) 513,100 17,766
36,304
TOTAL MEDIA & LEISURE 576,188
NONDURABLES - 5.6%
BEVERAGES - 2.6%
Anheuser-Busch Companies, Inc. 615,300 26,073
Coca-Cola Co. (The) 1,577,900 80,670
106,743
FOODS - 0.3%
General Mills, Inc. 226,000 14,351
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
NONDURABLES - CONTINUED
HOUSEHOLD PRODUCTS - 2.7%
Clorox Co. 237,700 $ 24,780
Gillette Co. 534,200 39,397
Procter & Gamble Co. 439,200 47,763
111,940
TOTAL NONDURABLES 233,034
RETAIL & WHOLESALE - 6.5%
APPAREL STORES - 0.5%
Ann Taylor Stores Corp. (a) 1,026,400 20,785
DRUG STORES - 0.1%
Walgreen Co. 148,200 6,187
GENERAL MERCHANDISE STORES - 1.9%
Dayton Hudson Corp. 1,371,900 53,333
Woolworth Corp. (a) 1,053,800 25,291
78,624
GROCERY STORES - 1.5%
American Stores Co. 268,700 10,714
Kroger Co. (The) (a) 654,900 30,207
Safeway, Inc. (a) 539,900 21,934
62,855
RETAIL & WHOLESALE, MISCELLANEOUS - 2.5%
Bed Bath & Beyond, Inc. (a) 759,800 19,897
Lowe's Companies, Inc. 329,200 13,374
Officemax, Inc. (a) 379,600 5,504
Office Depot, Inc. (a) 180,300 3,516
PETsMART, Inc. (a) 200,200 5,105
Staples, Inc. (a) 857,700 16,940
Toys "R" Us, Inc. (a) 340,300 11,740
Viking Office Products, Inc. (a) 859,200 26,904
102,980
TOTAL RETAIL & WHOLESALE 271,431
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
SERVICES - 4.5%
ADVERTISING - 1.9%
ADVO, Inc. 1,389,500 $ 17,542
Aegis Group PLC 9,978,000 10,444
Interpublic Group of Companies, Inc. 281,900 13,954
More O'Ferrall PLC 440,900 4,682
Omnicom Group, Inc. 651,800 33,242
79,864
PRINTING - 0.6%
Harland (John H.) Co. 752,700 23,240
SERVICES - 2.0%
Catalina Marketing Corp. (a) 107,700 5,493
Ecolab, Inc. 340,500 13,237
Employee Solutions, Inc. (a) 416,800 7,711
Groupe Photo Services (GPS) 5,000 814
HCIA, Inc. (a) 309,300 8,892
HealthCare COMPARE Corp. (a) 638,000 27,354
Premier Technologies, Inc. (a) 500,000 11,625
Telespectrum Worldwide, Inc. (a) 542,500 9,629
84,755
TOTAL SERVICES 187,859
TECHNOLOGY - 18.6%
COMMUNICATIONS EQUIPMENT - 1.4%
Aspect Telecommunications Corp. (a) 80,700 4,398
Ericsson (L.M.) Telephone Co. Class B ADR 1,068,500 32,990
Nokia Corp. AB sponsored ADR 313,700 17,607
Pairgain Technologies, Inc. (a) 56,100 3,583
58,578
COMPUTER SERVICES & SOFTWARE - 12.1%
Affiliated Computer Services, Inc. Class A (a) 1,977,200 57,339
CBT Group PLC sponsored ADR (a) 266,400 15,318
CUC International, Inc. (a) 832,885 21,967
Cap Gemini Sogeti SA (a) 590,000 28,026
Ceridian Corp. (a) 1,407,500 67,736
Clarify, Inc. (a) 144,400 6,498
Computer Sciences Corp. (a) 336,445 26,453
Equifax Inc. 958,100 31,378
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
COMPUTER SERVICES & SOFTWARE - CONTINUED
First Data Corp. 508,400 $ 20,272
HBO & Co. 281,200 15,993
Microsoft Corp. (a) 346,600 54,373
Netscape Communications Corp. (a) 242,600 13,555
Paychex, Inc. 207,300 11,091
Sabre Group Holdings, Inc. Class A (a) 157,800 4,616
Saville Systems Ireland PLC sponsored ADR (a) 100,000 4,162
Sema Group PLC 2,025,400 32,439
Shared Medical Systems Corp. 179,700 8,940
SunGard Data Systems, Inc. (a) 1,746,900 73,370
Wind River Systems, Inc. (a) 251,250 12,343
505,869
COMPUTERS & OFFICE EQUIPMENT - 0.6%
Diebold, Inc. 174,400 10,399
Symbol Technologies, Inc. (a) 319,100 14,878
25,277
ELECTRONICS - 4.2%
Atmel Corp. 19,700 648
Intel Corp. 901,900 114,428
Linear Technology Corp. 670,000 31,574
Maxim Integrated Products, Inc. (a) 632,100 29,314
175,964
PHOTOGRAPHIC EQUIPMENT - 0.3%
Imation Corp. (a) 414,590 12,541
TOTAL TECHNOLOGY 778,229
TRANSPORTATION - 2.5%
AIR TRANSPORTATION - 2.0%
Atlantic Southeast Airlines, Inc. 387,600 8,818
Comair Holdings, Inc. 1,295,100 32,215
Northwest Airlines Corp. Class A (a) 887,900 35,849
Trans World Airlines, Inc. (a) 1,123,700 8,709
85,591
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TRANSPORTATION - CONTINUED
RAILROADS - 0.5%
Wisconsin Central Transportation Corp. 503,900 $ 20,534
TOTAL TRANSPORTATION 106,125
UTILITIES - 3.7%
CELLULAR - 1.4%
AirTouch Communications, Inc. (a) 619,000 15,862
Century Telephone Enterprises, Inc. 481,600 15,351
Nera AS 75,000 3,070
360 Degrees Communications Co. (a) 980,300 23,282
57,565
ELECTRIC UTILITY - 0.1%
Portland General Corp. 71,300 3,066
TELEPHONE SERVICES - 2.2%
Ameritech Corp. 278,200 16,379
Cincinnati Bell, Inc. 36,300 2,165
NYNEX Corp. 224,500 10,411
Pacific Telesis Group 1,105,900 40,918
SBC Communications, Inc. 230,600 12,135
Tele Danmark AS Class B 210,000 10,482
92,490
TOTAL UTILITIES 153,121
TOTAL COMMON STOCKS
(Cost $3,571,812) 4,094,202
CONVERTIBLE PREFERRED STOCKS - 0.2%
FINANCE - 0.2%
INSURANCE - 0.2%
Aetna, Inc. Class C 6.25% (Cost $8,015) 113,181 8,404
CONVERTIBLE BONDS - 0.2%
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (000S) (000S)
UTILITIES - 0.2%
TELEPHONE SERVICES - 0.2%
MIDCOM Communications, Inc. 8 1/4%,
8/15/03 (b) (Cost $7,319) - $ 7,319 $ 7,465
CASH EQUIVALENTS - 1.6%
SHARES
Taxable Central Cash Fund
(Cost $67,993)(c) 67,992,931 67,993
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $3,655,139) $ 4,178,064
LEGEND
1. Non-income producing
2. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $16,333,000 or 0.4% of net
assets.
3. At period end, the seven-day yield on the Taxable Central Cash Fund was
5.46%. The yield refers to the income earned by investing in the fund over
the seven-day period, expressed as an annual percentage.
OTHER INFORMATION
Distribution of investments by country of issue, as a percentage of total
value of investment in securities, is as follows:
United States 89.6%
United Kingdom 2.6
France 2.5
Ireland 2.0
Sweden 1.7
Others (individually less than 1%) 1.6
TOTAL 100.0%
INCOME TAX INFORMATION
At November 30, 1996, the aggregate cost of investment securities for
income tax purposes was $3,662,269,000. Net unrealized appreciation
aggregated $515,795,000, of which $575,051,000 related to appreciated
investment securities and $59,256,000 related to depreciated investment
securities.
The fund hereby designates approximately $378,654,000 as a capital gain
dividend for the purpose of the dividend paid deduction.
The fund intends to elect to defer to its fiscal year ending November 30,
1997 approximately $14,860,000 of losses recognized during the period
November 1, 1996 to November 30, 1996.
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNT) NOVEMBER 30, 1996

ASSETS

Investment in securities, at value (cost $3,655,139) - $ 4,178,064
See accompanying schedule

Cash 417

Receivable for investments sold 102,543

Receivable for fund shares sold 2,681

Dividends receivable 4,237

Interest receivable 746

Other receivables 767

TOTAL ASSETS 4,289,455

LIABILITIES

Payable for investments purchased $ 73,902

Payable for fund shares redeemed 7,917

Accrued management fee 1,478

Other payables and accrued expenses 808

TOTAL LIABILITIES 84,105

NET ASSETS $ 4,205,350

Net Assets consist of:

Paid in capital $ 3,225,186

Undistributed net investment income 52,707

Accumulated undistributed net realized gain (loss) on 404,533
investments and foreign currency transactions

Net unrealized appreciation (depreciation) on 522,924
investments and assets and liabilities in foreign
currencies

NET ASSETS, for 209,852 shares outstanding $ 4,205,350

NET ASSET VALUE, offering price and redemption price per $20.04
share ($4,205,350 (divided by) 209,852 shares)

STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS YEAR ENDED NOVEMBER 30, 1996

INVESTMENT INCOME $ 51,393
Dividends (including $992 received from affiliated
issuers)

Interest (including income on securities loaned of $7) 29,933

TOTAL INCOME 81,326

EXPENSES

Management fee $ 25,112
Basic fee

Performance adjustment (4,324)

Transfer agent fees 8,391

Accounting and security lending fees 811

Non-interested trustees' compensation 16

Custodian fees and expenses 426

Registration fees 83

Audit 78

Legal 42

Miscellaneous 40

Total expenses before reductions 30,675

Expense reductions (1,539) 29,136

NET INVESTMENT INCOME 52,190

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

Investment securities (including realized gain of 404,681
$35,455 on sales of investments in affiliated issuers)

Foreign currency transactions (137) 404,544

Change in net unrealized appreciation (depreciation) on:

Investment securities 59,383

Assets and liabilities in foreign currencies 10 59,393

NET GAIN (LOSS) 463,937

NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 516,127
FROM OPERATIONS

STATEMENT OF CHANGES IN NET ASSETS
</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30,
1996 1995

INCREASE (DECREASE) IN NET ASSETS

Operations $ 52,190 $ 68,660
Net investment income

Net realized gain (loss) 404,544 314,324

Change in net unrealized appreciation (depreciation) 59,393 317,181

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 516,127 700,165
FROM OPERATIONS

Distributions to shareholders (68,464) (34,963)
From net investment income

From net realized gain (312,726) (310,283)

TOTAL DISTRIBUTIONS (381,190) (345,246)

Share transactions 659,602 789,784
Net proceeds from sales of shares

Reinvestment of distributions 380,575 344,637

Cost of shares redeemed (939,573) (682,351)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 100,604 452,070
FROM SHARE TRANSACTIONS

TOTAL INCREASE (DECREASE) IN NET ASSETS 235,541 806,989

NET ASSETS

Beginning of period 3,969,809 3,162,820

End of period (including undistributed net investment $ 4,205,350 $ 3,969,809
income of $52,707 and $67,851, respectively)

OTHER INFORMATION
Shares

Sold 35,293 45,146

Issued in reinvestment of distributions 21,160 21,376

Redeemed (50,139) (38,605)

Net increase (decrease) 6,314 27,917

</TABLE>

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

1996 1995 1994 B 1993 1992

SELECTED PER-SHARE DATA

Net asset value, beginning $ 19.50 $ 18.01 $ 19.26 $ 19.77 $ 17.21
of period

Income from Investment
Operations

Net investment income .26 .34 .19 .09 .14

Net realized and 2.14 3.09 .58 3.09 3.66
unrealized gain (loss)

Total from investment 2.40 3.43 .77 3.18 3.80
operations

Less Distributions

From net investment (.34) C (.20) (.14) (.16) (.20)
income

From net realized gain (1.52) C (1.74) (1.88) (3.53) (1.04)

Total distributions (1.86) (1.94) (2.02) (3.69) (1.24)

Net asset value, end $ 20.04 $ 19.50 $ 18.01 $ 19.26 $ 19.77
of period

TOTAL RETURN A 13.45% 21.43% 4.24% 19.47% 23.39%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period $ 4,205 $ 3,970 $ 3,163 $ 2,688 $ 2,166
(in millions)

Ratio of expenses to average .74% .99% 1.07% 1.05% 1.02%
net assets

Ratio of expenses to .70% .99% 1.07% 1.05% 1.02%
average net assets after D
expense reductions

Ratio of net investment 1.26% 1.92% 1.13% .80% 1.01%
income to average net
assets

Portfolio turnover rate 230% 108% 72% 101% 138%

Average commission rate E $ .0307

</TABLE>

A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 6 OF NOTES TO FINANCIAL
STATEMENTS).
B 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, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
C THE AMOUNTS SHOWN REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO
TAX DIFFERENCES (SEE NOTE 1 OF NOTES TO FINANCIAL STATEMENTS).
D FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES (SEE NOTE 6 OF
NOTES TO FINANCIAL STATEMENTS).
E FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR SECURITY
TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM PERIOD
TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED IN
VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES MAY
DIFFER.
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1996

1. 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 financial statements have
been prepared in conformity with generally accepted accounting principles
which permit management to make certain estimates and assumptions at the
date of the financial statements. The following summarizes the significant
accounting policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are readily
available are valued at the last sale price, or if no sale price, at the
closing bid price. Securities (including restricted securities) for which
exchange quotations are not readily available (and in certain cases debt
securities which trade on an exchange) are valued primarily using
dealer-supplied valuations or at their fair value as determined in good
faith under consistently applied procedures under the general supervision
of the Board of Trustees. Short-term securities with remaining maturities
of sixty days or less for which quotations are not readily available are
valued at amortized cost or original cost plus accrued interest, both of
which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Income receipts
and expense payments are translated into U.S. dollars at the prevailing
exchange rate on the respective dates of the transactions. Purchases and
sales of securities are translated into U.S. dollars at the contractual
currency exchange rates established at the time of each trade.
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, 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 included with the net realized and
unrealized gain or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes substantially all of its taxable income for
its fiscal year. The schedule of investments includes information regarding
income taxes under the caption "Income Tax Information."
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. Non-cash dividends included in dividend income, if any,
are recorded at the fair market value of the securities received. Interest
income is accrued as earned. Investment income is recorded net of foreign
taxes withheld where recovery of such taxes is uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned 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, which may result in distribution
reclassifications, are primarily due to differing treatments for litigation
proceeds, foreign currency transactions, passive foreign investment
companies (PFIC), market discount, non-taxable dividends and losses
deferred due to wash sales and excise tax regulations.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect the per-share allocation between net investment income and realized
and unrealized gain (loss). Undistributed net investment income and
accumulated undistributed net realized gain (loss) on investments and
foreign currency transactions may include temporary book and tax basis
differences which will reverse in a subsequent period. Any taxable income
or gain remaining at fiscal year end is distributed in the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign securities. Losses may
arise from changes in the value of the foreign currency or if the
counterparties do not perform under the contracts' terms. The U.S. dollar
value of foreign currency contracts is determined using contractual
currency exchange rates established at the time of each trade. The cost of
the foreign currency contracts is included in the cost basis of the
associated investment.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with other
affiliated entities of Fidelity Management & Research Company (FMR), may
transfer uninvested cash balances into one or more joint trading accounts.
These balances are invested in one or more repurchase agreements that
mature in 60 days or less from the date of purchase for U.S. Treasury or
Federal Agency obligations.
2. OPERATING POLICIES - CONTINUED
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
Securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are marked-to-market
daily and maintained at a value at least equal to the principal amount of
the repurchase agreement (including accrued interest). FMR, the fund's
investment adviser, is responsible for determining that the value of the
underlying securities remains in accordance with the market value
requirements stated above.
TAXABLE CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by the
SEC, the fund may invest in the Taxable Central Cash Fund (the Cash Fund)
managed by FMR. The Cash Fund is an open-end money market fund available
only to investment companies and other accounts managed by FMR and its
affiliates. The Cash Fund seeks preservation of capital, liquidity, and
current income by investing in U.S. Treasury securities and repurchase
agreements for these securities, and may be utilized by the fund as an
additional cash management option. Dividends from the Cash Fund are
declared daily and paid monthly from net interest income. Income
distributions received by the fund are recorded as interest income.
RESTRICTED SECURITIES. The fund is permitted to invest in securities that
are subject to legal or contractual restrictions on resale. These
securities generally
may be resold in transactions exempt from registration or to the public if
the securities are registered. Disposal of these securities may involve
time-consuming negotiations and expense, and prompt sale at an acceptable
price may be difficult. At the end of the period, the fund had no
investments in restricted securities (excluding 144A issues).
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $8,835,775,000 and $8,628,776,000, respectively, of which U.S.
government and government agency obligations aggregated $238,069,000 and
$233,487,000, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly
basic fee that is calculated on the basis of a group fee rate plus a fixed
individual fund fee rate applied to the average net assets of the fund. The
group fee rate is the weighted average of a series of rates and is based on
the monthly average net assets of all the mutual funds advised by FMR. The
rates ranged from .2500% to .5200% for the period. In the event that these
rates were lower than the contractual rates in effect during the period,
FMR voluntarily implemented the above rates, as they resulted in the same
or a lower management fee. The annual individual fund fee rate is .30%. The
basic fee is subject to a performance
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
adjustment (up to a maximum of (plus/minus) .20% of the fund's average net
assets over the performance period) based on the fund's investment
performance as compared to the appropriate index over a specified period of
time. For the period, the management fee was equivalent to an annual rate
of .50% 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 its 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 $5,000 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 account fees and asset-based fees that vary according to
account size and type of account. FSC pays for typesetting, printing and
mailing of all shareholder
reports, except proxy statements. For the period, the transfer agent fees
were equivalent to an annual rate of .20% of average net assets.
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 $3,165,000 for the period.
5. 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.
6. EXPENSE REDUCTIONS.
FMR has directed certain portfolio trades to brokers who paid a portion of
the fund's expenses. For the period, the fund's expenses were reduced by
$1,368,000 under this arrangement.
In addition, the fund has entered into arrangements with its custodian and
transfer agent whereby interest earned on uninvested cash balances was used
to offset a portion of the fund's expenses.
During the period, the fund's custodian and transfer agent fees were
reduced by $9,000 and $162,000, respectively, under these arrangements.
7. TRANSACTIONS WITH AFFILIATED COMPANIES.
An affiliated company is a company in which the fund has ownership of at
least 5% of the voting securities. Transactions during the period with
companies which are or were affiliates are as follows:
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES
AMOUNTS IN THOUSANDS PURCHASE SALES DIVIDEND VALUE
AFFILIATE COST COST INCOME
AFC Cable Systems, Inc. $ - $ 8,244 $ - $ -
American Banker Insurance Group - 32,971 310 -
Bradlees, Inc. - 2,477 - -
Bugaboo Creek Steak House, Inc. - 2,900 - -
CFC International - 617 - -
Cable Design Technology Corp. - 4,506 - -
Carlisle Plastics, Inc. Class A 1,713 - - -
Cinergi Pictures Entertainment, Inc. - 5,317 - -
Cole National Corp. Class A - 12,150 - -
Cygnus, Inc. - 7,348 - -
Fred's, Inc. Class A - 16,016 46 -
Gametek, Inc. - 1,404 - -
Image Industries, Inc. - 4,800 - -
Innovative International Holdings Ltd. - 886 165 -
Just Toys, Inc. 14 2,865 - -
K-Swiss, Inc. Class A - 2,205 6 -
Kentucky Electric Steel, Inc. - 1,560 - -
Lechters, Inc. 482 18,576 - -
Libbey, Inc. - 8,132 82 -
Maxwell Shoe, Inc. Class A - 8,582 - -
OroAmerica, Inc. - 293 - -
People's Choice TV Corp. - 15,543 - -
Pillowtex Corp. - 7,452 49 -
QNI Ltd. 9,192 14,012 311 -
Quantum Restaurant Group, Inc. - 5,119 - -
Rexene Corp. - 603 23 -
Rhodes, Inc. - 6,610 - -
Sierra On-line, Inc. 6,929 26,327 - -
SunGard Data Systems, Inc. - 12,899 - -
Whole Foods Market, Inc. - 17,578 - -
Wireless One, Inc. 433 2,348 - -
TOTALS $ 18,763 $ 250,340 $ 992 $ -
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, 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, 1996, the results of its operations for the year then ended,
and 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
Retirement Growth'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 at November 30, 1996 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.
/s/:Price Waterhouse LLP
PRICE WATERHOUSE LLP
Boston, Massachusetts
January 3, 1997
DISTRIBUTIONS

The Board of Trustees of Fidelity Retirement Growth Fund voted to pay to
shareholders of record at the opening of business on record date, the
following distributions derived from capital gains realized from sales of
portfolio securities, and dividends derived from net investment income:
PAY DATE RECORD DATE DIVIDENDS CAPITAL GAINS
12/23/96 12/20/96 $.26 $2.05
A total of 8.52% 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 26% of the dividends distributed during the fiscal year
qualifies for the dividends-received deduction for corporate shareholders.
The fund will notify shareholders in January 1997 of these percentages for
use in preparing 1996 income tax returns.

INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research
(U.K.) Inc., London, England
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
William J. Hayes, Vice President
Fergus Shiel, Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
Robert H. Morrison, Manager,
Security Transactions
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
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 *
ADVISORY BOARD
William O. McCoy
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Co.
Boston, MA
CUSTODIAN
Brown Brothers Harriman & Co.
Boston, MA
FIDELITY'S GROWTH FUNDS
Blue Chip Growth Fund
Capital Appreciation Fund
Contrafund
Disciplined Equity Fund
Dividend Growth Fund
Emerging Growth Fund
Export Fund
Fidelity Fifty
Growth Company Fund
Large Cap Stock Fund
Low-Priced Stock Fund
Magellan(registered trademark) Fund
Mid-Cap Stock Fund
New Millennium(trademark) Fund
OTC Portfolio
Retirement Growth Fund
Small Cap Stock Fund
Stock Selector
Trend Fund
Value Fund
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Exchanges/Redemptions 1-800-544-7777
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
(registered trademark)
TouchTone Xpress 1-800-544-5555
SM
* INDEPENDENT TRUSTEES
AUTOMATED LINE FOR QUICKEST SERVICE

(2_FIDELITY_LOGOS)FIDELITY

CONVERTIBLE SECURITIES
FUND
ANNUAL REPORT
NOVEMBER 30, 1996
CONTENTS

PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.

PERFORMANCE 4 How the fund has done over time.

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

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

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

FINANCIAL STATEMENTS 24 Statements of assets and liabilities,
operations, and changes in net
assets, as well as financial
highlights.

NOTES 28 Notes to the financial statements.

REPORT OF INDEPENDENT 33 The auditors' opinion.
ACCOUNTANTS

DISTRIBUTIONS 34

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. A fund's total
return includes changes in 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).
<TABLE>
<CAPTION>
<S> <C> <C> <C>
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND

Convertible Securities 16.02% 106.08% 263.63%

Merrill Lynch Convertible Securities 16.35% 104.13% n/a
Index

Convertible Securities Funds 15.88% 90.43% n/a
Average
</TABLE>
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, the value of your investment would
be $1,050. You can compare the fund's returns to the performance of the
Merrill Lynch Convertible Securities Index - a market capitalization
weighted index of over 450 non-mandatory domestic corporate convertible
securities. To measure how the fund's performance stacked up against its
peers, you can compare it to the convertible securities funds average,
which reflects the performance of 42 mutual funds with similar objectives
tracked by Lipper Analytical Services, Inc. over the past 12 months. Both
benchmarks include reinvested dividends and capital gains, if any, and
exclude the effects of sales charges.
<TABLE>
<CAPTION>
<C> <C> <C> <C>
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND

Convertible Securities 16.02% 15.56% 13.91%

Merrill Lynch Convertible Securities Index 16.35% 15.34% n/a

Convertible Securities Funds Average 15.88% 13.63% n/a
</TABLE>
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
IMAHDR PRASUN SHR__CHT 19960930 19961009 151627 S00000000000001
Fidelity Conv Sec. FB Conv. Sec. Index
00308 FB002
1987/01/31 10000.00 10000.00
1987/02/28 10350.19 10414.00
1987/03/31 10437.74 10521.26
1987/04/30 10282.10 10523.37
1987/05/31 10252.92 10554.94
1987/06/30 10429.22 10775.54
1987/07/31 10949.70 11215.18
1987/08/31 11195.21 11439.48
1987/09/30 11119.15 11271.32
1987/10/31 9020.63 9151.19
1987/11/30 9000.74 8857.43
1987/12/31 9253.19 9308.28
1988/01/31 9598.16 9567.05
1988/02/29 9993.85 10007.13
1988/03/31 10126.04 9973.11
1988/04/30 10321.56 10179.55
1988/05/31 10249.53 10078.77
1988/06/30 10675.20 10466.80
1988/07/31 10602.16 10357.95
1988/08/31 10445.63 10174.61
1988/09/30 10582.76 10356.74
1988/10/31 10752.09 10488.27
1988/11/30 10593.35 10317.31
1988/12/31 10723.60 10556.67
1989/01/31 11181.78 11030.67
1989/02/28 11301.78 11028.46
1989/03/31 11630.82 11171.83
1989/04/30 12062.00 11547.21
1989/05/31 12338.39 11781.61
1989/06/30 12437.48 11695.61
1989/07/31 12997.22 12031.27
1989/08/31 13422.63 12295.96
1989/09/30 13433.82 12188.99
1989/10/31 13161.97 11803.81
1989/11/30 13377.19 11996.22
1989/12/31 13542.01 12009.41
1990/01/31 13040.03 11531.44
1990/02/28 13191.79 11683.65
1990/03/31 13450.80 11862.41
1990/04/30 13344.43 11597.88
1990/05/31 13876.31 12160.38
1990/06/30 14031.25 12145.78
1990/07/31 13935.55 12037.69
1990/08/31 13014.49 11344.32
1990/09/30 12372.25 10848.57
1990/10/31 12129.89 10442.83
1990/11/30 12760.02 10953.49
1990/12/31 13150.08 11182.42
1991/01/31 13965.02 11684.51
1991/02/28 14866.39 12382.07
1991/03/31 15261.65 12685.43
1991/04/30 15436.49 12813.55
1991/05/31 15961.04 13192.84
1991/06/30 15657.98 12824.76
1991/07/31 16289.35 13312.10
1991/08/31 16908.09 13808.64
1991/09/30 17190.33 13783.78
1991/10/31 17930.53 13982.27
1991/11/30 17164.81 13645.30
1991/12/31 18244.09 14438.09
1992/01/31 19164.97 14838.02
1992/02/29 19792.23 15222.33
1992/03/31 19458.45 15095.98
1992/04/30 19620.16 15268.08
1992/05/31 19997.47 15545.96
1992/06/30 19878.15 15472.89
1992/07/31 20422.38 15898.39
1992/08/31 20027.81 15798.23
1992/09/30 20504.91 16114.20
1992/10/31 20985.60 16152.87
1992/11/30 21658.57 16619.69
1992/12/31 22261.36 16988.65
1993/01/31 23005.79 17518.69
1993/02/28 22604.94 17587.02
1993/03/31 23729.83 18230.70
1993/04/30 23946.74 18227.05
1993/05/31 24539.62 18546.03
1993/06/30 24511.53 18722.22
1993/07/31 24759.71 18915.05
1993/08/31 25343.67 19433.33
1993/09/30 25638.09 19652.92
1993/10/31 26227.47 20116.73
1993/11/30 25976.98 19812.97
1993/12/31 26221.17 20139.88
1994/01/31 26874.71 20717.90
1994/02/28 26444.33 20388.48
1994/03/31 25286.77 19556.63
1994/04/30 24867.74 19200.70
1994/05/31 24771.04 19242.94
1994/06/30 24752.39 19025.50
1994/07/31 25193.23 19562.02
1994/08/31 26532.08 19947.39
1994/09/30 26366.37 19594.32
1994/10/31 26531.68 19762.83
1994/11/30 25837.39 19045.44
1994/12/31 25760.75 19190.19
1995/01/31 25760.75 19165.24
1995/02/28 26297.44 19791.94
1995/03/31 27074.58 20314.45
1995/04/30 27684.52 20775.59
1995/05/31 27989.49 21388.47
1995/06/30 28689.58 22167.01
1995/07/31 29442.32 22953.94
1995/08/31 29784.47 23194.95
1995/09/30 30349.81 23540.56
1995/10/31 29607.46 22817.86
1995/11/30 30487.92 23611.93
1995/12/31 30753.32 23741.79
1996/01/31 31379.46 24266.48
1996/02/29 32134.92 24919.25
1996/03/31 32545.78 25128.57
1996/04/30 33308.29 25714.07
1996/05/31 33847.62 26287.49
1996/06/30 33473.24 25664.48
1996/07/31 31895.38 24663.57
1996/08/31 32778.23 25581.05
1996/09/30 33493.76 26248.72
1996/10/31 33892.27 26411.46
1996/11/30 35372.44 26494.33
IMATRL PRASUN SHR__CHT 19960930 19961009 151629 R00000000000123

$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Convertible Securities Fund on January 31, 1987,
shortly after the fund started. As the chart shows, by November 30, 1996,
the value of the investment would have grown to $35,372 - a 253.72%
increase on the initial investment. For comparison, look at how the First
Boston Convertible Securities Index - a market capitalization weighed index
of over 250 convertible bonds and preferred stocks - 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 $26,494 -
a 164.94% 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

MARKET RECAP
Paced by the robust performance
of blue chip stocks, the U.S. stock
market posted strong gains for
the year that ended November
30, 1996. The Standard & Poor's
500 Index returned 27.86%
during the period - well above its
long-term average of about 12%.
The stock market spent much of
the past year breaking price and
trading volume records. Solid
corporate earnings reports, large
cash inflows into mutual funds,
widespread optimism and a
generally favorable interest rate
environment propelled share
prices higher. Large capitalization
stocks thrived as investors
sought their lower volatility and
higher degree of liquidity over
smaller cap stocks in an
environment where it was
sometimes difficult to discern the
health of the economy. The Dow
Jones Industrial Average closed
above 6500 for the first time in
November. While short-term
confusion over the direction of
interest rates created a volatile
backdrop in the summer months,
stocks rallied again when the
Federal Reserve Board left
short-term interest rates
unchanged and it appeared
inflation would not be an issue for
the remainder of 1996.
Smaller-company stocks posted
strong gains at the beginning of
1996, but trended downward in
the spring and summer because
their earnings tend to be more
affected by the higher borrowing
costs brought on by higher rates.
When interest rate fears
subsided, these stocks
rebounded, only to fade toward
the end of the period due to
earnings concerns and a general
flight to quality.
An interview with Robert Bertelson, Portfolio Manager of Fidelity
Convertible Securities Fund
Q. BOB, HOW DID THE FUND PERFORM?
A. For the 12 months that ended November 30, 1996, the fund had a total
return of 16.02%. The convertible securities funds average was 15.88%,
according to Lipper Analytical Services. The Merrill Lynch Convertible
Securities Index posted a 16.35% return over the same 12-month period.
Q. WHAT FACTORS CONTRIBUTED TO THE FUND'S PERFORMANCE?
A. The fund benefited because I kept its portfolio more equity sensitive,
as opposed to investing in securities that act more like bonds. A
convertible security tends to act more like a bond when the issuing
company's common stock declines in price after the convertible bond is
issued. The convertible security provides regular income like a bond, but
benefits to a smaller extent than equities from the initial positive
influence of common stock price increases until the stock recovers to the
original price level seen at the time of issuance. Conversely, a
convertible bond can be more equity-sensitive if the underlying value of
the common stock is at or above the price seen when the convertible
security was issued. I've sought the more equity-sensitive securities,
because they can increase in value more immediately when the price of the
common stock goes up. In general, stocks have done well over the past year,
so the fund was helped by its equity-sensitive orientation.
Q. WHY DID YOU POSITION THE FUND SO THAT IT WAS MORE EQUITY SENSITIVE?
A. I felt optimistic about the stock market, given the favorable backdrop,
including controlled inflation and low interest rates. In addition, by
owning more equity-sensitive bonds, I felt I was able to more fully
leverage the in-depth research capabilities at Fidelity.
Q. WERE THERE ANY SECTORS THAT PROVIDED SIGNIFICANT OPPORTUNITIES?
A. I didn't pursue any particular sector strategies. Instead, I looked for
what I determined to be high-quality companies in the convertible security
universe, trying to locate companies with strong competitive positions and
low valuations when compared to their growth rates. I also pursued the
equity-sensitive theme I mentioned earlier.
Q. AT THE SAME TIME, THERE WERE SOME CHANGES IN THE FUND'S SECTOR
WEIGHTINGS OVER THE PAST SIX MONTHS . . .
A. I reduced the fund's health investments because many of the fund's
health holdings were securities that performed more like bonds and less
like stocks. I increased energy investments because I saw a number of good
opportunities in this sector. Fortunately, it's also a sector that's done
quite well this year, due to strong oil and natural gas prices. Among the
opportunities I found to be attractive were Pogo Producing and Noble
Affiliates. While finance is the fund's top sector at 13.8%, that stake is
a reflection of my attraction to the individual securities, not a broad
sector strategy. It's important to add that some of the fund's finance
holdings are convertible preferred stocks issued by corporations' financing
subsidiaries, or securities issued by underwriters that are convertible
into shares of companies in other sectors.
Q. YOU'VE ALSO INCREASED THE FUND'S PERCENTAGE OF NONDURABLES AND
TECHNOLOGY INVESTMENTS . . .
A. I believe we're at a point in the economic cycle where profit growth
will be more difficult to come by. In this type of climate, companies in
the nondurables sector appeal to me because they tend to have more
predictable earnings and free cash flow to buy back stock or make
acquisitions - which can bolster the share price or improve earnings
growth. In the technology sector, I found some attractively priced
securities of companies that benefited from the continued efforts of
corporate America to upgrade its hardware and software.
Q. WERE THERE ANY DISAPPOINTMENTS?
A. The fund's investments in the airline industry - including Continental,
USAir and TWA - were poor performers. That business normally does well in
the summer, but was hit hard by higher-than-expected oil prices and the
after-effects of the crash of TWA flight 800.
Q. WHAT'S YOUR OUTLOOK?
A. I think profit growth will become increasingly difficult for many
corporations. That's because corporate profit margins are at or surpassing
levels seen in previous economic cycles, and the underlying growth in the
economy is not enough to sustain profit margins. Therefore, I believe
higher-quality companies that are able to grow 10% to 20% will become
increasingly sought after and driven to higher levels of valuation. I
intend to continue focusing on companies that can provide this kind of
growth, as well as the high-quality companies I believe investors should
favor in this type of environment.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.

<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN INVESTMENTS AS OF NOVEMBER 30, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO

RJR Nabisco Holdings Corp. depositary 3.4 2.4
shares representing 1/10 pfd., Series C

Philip Morris Companies, Inc. 2.1 0.0

EMC Corp. Mass. 4 1/4%, 1/1/01 1.8 0.0

Tenet HealthCare Corp. 6%, 12/1/05 1.8 1.7

Valhi, Inc. liquid yield option notes 0%, 1.8 1.0
10/20/07

Alberto Culver Co. 5 1/2%, 6/30/05 1.6 1.4

MFS Communications, Inc. $2.68 depository 1.6 0.0
shares representing 1/100 share (dividend
enhanced) Series A

Vanstar Financing Trust $3.38 1.5 0.0

Pogo Producing Co. 5 1/2%, 6/15/06 1.5 0.0

Cityscape Financial Corp. 6%, 5/1/06 1.5 0.0

TOP FIVE MARKET SECTORS AS OF NOVEMBER 30, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE MARKET
SECTORS
6 MONTHS AGO

Finance 13.8 11.5

Energy 12.5 5.5

Technology 12.2 10.5

Nondurables 8.8 4.7

Health 7.7 19.3
</TABLE>
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF NOVEMBER 30, 1996 * AS OF MAY 31, 1996 **

Convertible
securities 75.5%
Stocks 16.0%
Short-term
investments 7.5%
Nonconvertible
bonds 1.0%
FOREIGN
INVESTMENTS 7.3%
Convertible
securities 81.4%
Stocks 14.4%
Short-term
investments 2.9%
Nonconvertible
bonds 1.3%
FOREIGN
INVESTMENTS 4.5%
Row: 1, Col: 1, Value: 1.3
Row: 1, Col: 2, Value: 7.5
Row: 1, Col: 3, Value: 16.0
Row: 1, Col: 4, Value: 35.2
Row: 1, Col: 5, Value: 40.0
Row: 1, Col: 1, Value: 1.3
Row: 1, Col: 2, Value: 2.9
Row: 1, Col: 3, Value: 14.4
Row: 1, Col: 4, Value: 41.4
Row: 1, Col: 5, Value: 40.0
*
**
INVESTMENTS NOVEMBER 30, 1996

Showing Percentage of Total Value of Investment in Securities

CORPORATE BONDS - 46.1%
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (D) (000S) (000S)
CONVERTIBLE BONDS - 45.1%
BASIC INDUSTRIES - 4.1%
CHEMICALS & PLASTICS - 1.8%
Valhi, Inc. liquid yield option notes
0%, 10/20/07 B1 $ 42,550 $ 20,318
IRON & STEEL - 1.4%
Hexcel Corp. 7%, 8/1/03 B2 4,850 6,341
Trimas Corp. 5%, 8/1/03 Ba3 8,871 10,157
16,498
METALS & MINING - 0.9%
Cookson Group PLC 7%, 11/2/04 - GBP 5,850 9,812
TOTAL BASIC INDUSTRIES 46,628
CONSTRUCTION & REAL ESTATE - 2.3%
REAL ESTATE - 1.8%
Land Securities PLC 9 3/8%, 7/31/04 A1 GBP 3,000 5,927
Trizec Hahn Corp. 3 1/4%, 12/10/18 Ba2 15,000 15,450
21,377
REAL ESTATE INVESTMENT TRUSTS - 0.5%
Sizeler Property Investors, Inc. 8%, 7/15/03 - 6,150 5,351
TOTAL CONSTRUCTION & REAL ESTATE 26,728
DURABLES - 0.6%
AUTOS, TIRES, & ACCESSORIES - 0.6%
Titan Wheel International, Inc.
4 3/4%, 12/1/00 B2 5,895 6,455
ENERGY - 4.8%
ENERGY SERVICES - 1.8%
Baker Hughes, Inc. 0%, 5/5/08 A2 10,000 7,575
Nabors Industries, Inc. 5%, 5/1/06 Ba2 9,918 12,695
20,270
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (D) (000S) (000S)
CONVERTIBLE BONDS - CONTINUED
ENERGY - CONTINUED
OIL & GAS - 3.0%
Apache Corp. 6%, 1/15/02 (g) Baa2 $ 2,000 $ 2,550
Garnet Resources Corp.
9 1/2%, 12/21/98 (g) - 4,500 900
Pogo Producing Co.:
5 1/2%, 3/15/04 B2 4,000 8,100
5 1/2%, 6/15/06 (g) B2 14,050 16,895
Swift Energy Co. 6 1/4%, 11/15/06 B1 6,000 6,705
35,150
TOTAL ENERGY 55,420
FINANCE - 6.0%
CREDIT & OTHER FINANCE - 5.5%
Aames Financial Corp. 5 1/2%, 3/15/06 (g) B2 9,440 14,962
Cityscape Financial Corp. 6%, 5/1/06 (g) - 15,850 16,682
Elan International Finance Ltd. liquid yield option
notes 0%, 10/16/12 Ba2 17,800 11,526
RAC Financial, Inc. 7 1/4%, 8/15/03 (g) - 5,040 8,064
Sandoz Capital BVI Ltd. 2%, 10/6/02 - 10,000 11,450
62,684
INSURANCE - 0.5%
Royal & Sun Alliance Insurance Group
PLC 7 1/4%, 11/30/08 - GBP 3,000 5,940
TOTAL FINANCE 68,624
HEALTH - 5.1%
DRUGS & PHARMACEUTICALS - 1.2%
Medimmune, Inc. 7%, 7/1/03 (g) - 2,000 2,005
Roche Holdings, Inc. 0%, 9/23/08 (g) 15,000 11,925
13,930
MEDICAL EQUIPMENT & SUPPLIES - 0.4%
BEC Group, Inc. pay-in-kind 8%, 5/3/02 - 5,333 4,746
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (D) (000S) (000S)
CONVERTIBLE BONDS - CONTINUED
HEALTH - CONTINUED
MEDICAL FACILITIES MANAGEMENT - 3.5%
Healthsource, Inc. 5%, 3/1/03 (g) Ba3 $ 7,000 $ 5,478
Multicare Companies, Inc.:
7%, 3/15/03 (g) B- 5,660 7,075
7%, 3/15/03 B- 3,660 4,575
NovaCare, Inc. 5 1/2%, 1/15/00 B1 2,920 2,621
Tenet Healthcare Corp. 6%, 12/1/05 B1 19,490 20,464
40,213
TOTAL HEALTH 58,889
HOLDING COMPANIES - 0.7%
Lonrho Finance PLC 6%, 2/27/04 (Bearer) Ba3 GBP 5,000 7,756
INDUSTRIAL MACHINERY & EQUIPMENT - 2.6%
INDUSTRIAL MACHINERY & EQUIPMENT - 0.7%
Cooper Industries, Inc. 7.05%, 1/1/15 A3 4,000 4,240
Robbins & Myers, Inc. 6 1/2%, 9/1/03 - 4,000 4,240
8,480
POLLUTION CONTROL - 1.9%
Sanifill, Inc. 5%, 3/1/06 Ba3 8,730 11,218
WMX Technologies, Inc. 2%, 1/24/05 A2 10,260 10,106
21,324
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 29,804
MEDIA & LEISURE - 3.2%
BROADCASTING - 1.0%
Home Shopping Network, Inc.
5 7/8%, 3/1/06 (g) B- 3,495 3,897
International Cabletel, Inc.
7%, 6/15/08 (g) Caa 5,000 4,550
Time Warner, Inc. liquid yield option notes
0%, 6/22/13 Ba1 6,000 2,595
11,042
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (D) (000S) (000S)
CONVERTIBLE BONDS - CONTINUED
MEDIA & LEISURE - CONTINUED
LEISURE DURABLES & TOYS - 0.7%
Hasbro Corp. 6%, 11/15/98 A3 $ 6,020 $ 8,428
LODGING & GAMING - 1.5%
Hilton Hotels Corp. 5%, 5/15/06 Baa2 10,940 11,979
WMS Industries, Inc. 5 3/4%, 12/1/02 B1 5,350 5,511
17,490
TOTAL MEDIA & LEISURE 36,960
NONDURABLES - 2.2%
BEVERAGES - 0.6%
Grand Metropolitan PLC
6 1/2%, 1/31/00 (g) A2 6,000 7,095
HOUSEHOLD PRODUCTS - 1.6%
Alberto Culver Co. 5 1/2%, 6/30/05 (g) - 13,700 18,187
TOTAL NONDURABLES 25,282
PRECIOUS METALS - 0.8%
Stillwater Mining Co. 7%, 5/1/03 (g) - 9,500 9,120
RETAIL & WHOLESALE - 4.3%
APPAREL STORES - 0.7%
Charming Shoppers, Inc. 7 1/2%, 7/15/06 B2 2,356 2,356
Saks Holdings, Inc. 5 1/2%, 9/15/06 - 6,000 6,083
8,439
GENERAL MERCHANDISE STORES - 1.0%
Proffitts, Inc. 4 3/4%, 11/1/03 B1 10,628 11,106
GROCERY STORES - 0.2%
Central Garden & Pet Co. 6%, 11/15/03 (g) B1 2,000 2,040
RETAIL & WHOLESALE, MISCELLANEOUS - 2.4%
Corporate Express, Inc.
4 1/2%, 7/1/00 (g) B 6,000 5,370
Home Depot, Inc. 3 1/4%, 10/1/01 A1 10,000 9,975
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (D) (000S) (000S)
CONVERTIBLE BONDS - CONTINUED
RETAIL & WHOLESALE - CONTINUED
RETAIL & WHOLESALE, MISCELLANEOUS - CONTINUED
Office Depot liquid yield option
notes 0%, 12/11/07 Baa3 $ 6,120 $ 3,825
Staples, Inc. 4 1/2%, 10/1/00 (g) Ba3 8,280 8,901
28,071
TOTAL RETAIL & WHOLESALE 49,656
TECHNOLOGY - 7.1%
COMPUTER SERVICES & SOFTWARE - 2.4%
Automatic Data Processing, Inc. 0%, 2/20/12 Aa3 21,000 11,708
InaCom Corp. 6%, 6/15/06 (g) B2 6,000 8,880
National Data Corp. 5%, 11/1/03 - 7,000 7,000
27,588
COMPUTERS & OFFICE EQUIPMENT - 4.3%
Applied Magnetics Corp. 7%, 3/15/06 (g) 5,130 8,439
EMC Corp. Mass. 4 1/4%, 1/1/01 Ba3 13,000 20,897
Quantum Corp. 5%, 3/1/03 (g) B2 3,640 4,846
Synoptics Communications, Inc.
5 1/4%, 5/15/03 (g) Ba3 15,990 15,190
49,372
ELECTRONICS - 0.4%
S3, Inc. 5 3/4%, 10/1/03 (g) - 4,000 4,480
TOTAL TECHNOLOGY 81,440
TRANSPORTATION - 0.4%
AIR TRANSPORTATION - 0.4%
BAA PLC 5%, 3/29/06 (Bearer) AA- GBP 3,000 5,171
Florida West Airlines, Inc.
8%, 3/18/99 (c)(g) - 2,000 100
5,271
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (D) (000S) (000S)
CONVERTIBLE BONDS - CONTINUED
UTILITIES - 0.9%
GAS - 0.4%
Consolidated Natural Gas Co.
7 1/4%, 12/15/15 A2 $ 4,300 $ 4,714
TELEPHONE SERVICES - 0.5%
Cam-Net Communications Network, Inc.
11 1/2%, 4/4/98 (f) - 2,275 1,138
MIDCOM Communications, Inc.
8 1/4%, 8/15/03 (g) - 4,000 4,079
5,217
TOTAL UTILITIES 9,931
TOTAL CONVERTIBLE BONDS 517,964
NONCONVERTIBLE BONDS - 1.0%
HEALTH - 1.0%
MEDICAL EQUIPMENT & SUPPLIES - 1.0%
Advanced Medical, Inc. 15%, 7/15/99 - 12,033 12,033
TOTAL CORPORATE BONDS
(Cost $497,413) 529,997
COMMON STOCKS - 16.0%
SHARES
BASIC INDUSTRIES - 0.3%
METALS & MINING - 0.3%
Oregon Metallurgical Corp. 87,300 3,099
DURABLES - 0.2%
AUTOS, TIRES, & ACCESSORIES - 0.2%
Ugly Duckling Corp. (a) 130,000 2,259
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
ENERGY - 4.4%
OIL & GAS - 4.4%
Amerada Hess Corp. 100,000 $ 5,888
Belco Oil & Gas Corp. (a) 140,400 4,001
Chesapeake Energy Corp. (a) 133,700 8,741
Noble Affiliates, Inc. 329,618 15,532
Tosco Corp. 108,000 8,222
Vastar Resources, Inc. 194,800 7,816
50,200
FINANCE - 1.2%
CREDIT & OTHER FINANCE - 0.1%
Delta Financial Corp. (a) 59,400 1,359
FEDERAL SPONSORED CREDIT - 0.4%
Federal National Mortgage Association 100,000 4,125
INSURANCE - 0.3%
GCR Holdings Ltd. 157,600 3,566
SAVINGS & LOANS - 0.4%
Long Island Bancorp., Inc. 150,000 4,790
TOTAL FINANCE 13,840
HEALTH - 0.8%
DRUGS & PHARMACEUTICALS - 0.7%
Bristol-Myers Squibb Co. 70,000 7,963
MEDICAL EQUIPMENT & SUPPLIES - 0.1%
BEC Group, Inc. (a) 364,082 1,729
TOTAL HEALTH 9,692
INDUSTRIAL MACHINERY & EQUIPMENT - 1.9%
ELECTRICAL EQUIPMENT - 0.7%
Premier Farnell PLC sponsored ADR 280,500 7,854
INDUSTRIAL MACHINERY & EQUIPMENT - 1.2%
Caterpillar, Inc. 120,000 9,495
Ingersoll-Rand Co. 100,000 4,650
14,145
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 21,999
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
NONDURABLES - 3.2%
FOODS - 0.3%
General Mills, Inc. 63,000 $ 4,001
HOUSEHOLD PRODUCTS - 0.4%
Clorox Co. 40,000 4,170
TOBACCO - 2.5%
Dimon, Inc. 97,700 2,027
Philip Morris Companies, Inc. 230,000 23,718
Universal Corp. 100,000 2,875
28,620
TOTAL NONDURABLES 36,791
PRECIOUS METALS - 0.2%
William Resources, Inc. (rights) (a)(g) 3,000,000 2,290
RETAIL & WHOLESALE - 1.0%
APPAREL STORES - 0.6%
Ross Stores, Inc. 125,400 6,380
GENERAL MERCHANDISE STORES - 0.3%
Family Dollar Stores, Inc. 207,000 3,881
RETAIL & WHOLESALE, MISCELLANEOUS - 0.1%
Corporate Express, Inc. 40,000 1,120
TOTAL RETAIL & WHOLESALE 11,381
SERVICES - 0.5%
Medpartners, Inc. (a) 250,000 5,688
TECHNOLOGY - 2.2%
COMPUTER SERVICES & SOFTWARE - 0.7%
Cadence Design Systems, Inc. (a) 220,000 8,773
COMPUTERS & OFFICE EQUIPMENT - 0.7%
Bay Networks, Inc. (a) 300,000 8,025
ELECTRONICS - 0.8%
Intel Corp. 70,000 8,881
TOTAL TECHNOLOGY 25,679
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TRANSPORTATION - 0.1%
AIR TRANSPORTATION - 0.1%
Florida West Airlines, Inc. (c) 18,236 $ -
USAir Group, Inc. 60,000 1,395
1,395
UTILITIES - 0.0%
TELEPHONE SERVICES - 0.0%
Cam-Net Communications Network, Inc. (a)(f) 875,935 175
MFS Communications, Inc. 3,235 156
331
TOTAL COMMON STOCKS
(Cost $163,418) 184,644
CONVERTIBLE PREFERRED STOCKS - 30.4%
AEROSPACE & DEFENSE - 1.1%
DEFENSE ELECTRONICS - 1.1%
Loral Space & Communications Ltd. $3.00 (g) 220,000 12,320
BASIC INDUSTRIES - 1.3%
METALS & MINING - 0.9%
Reynolds Metals Co. $3.31 104,900 5,153
Timet Capital Trust I $3.3125 (g) 100,000 5,375
10,528
PACKAGING & CONTAINERS - 0.4%
Crown Cork & Seal, Inc. $1.88 81,500 4,167
TOTAL BASIC INDUSTRIES 14,695
CONSTRUCTION & REAL ESTATE - 0.7%
BUILDING MATERIALS - 0.1%
Bird Corp. $1.85 87,250 1,440
CONVERTIBLE PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
CONSTRUCTION & REAL ESTATE - CONTINUED
REAL ESTATE INVESTMENT TRUSTS - 0.6%
Felcor Suite Hotels, Inc., Series A, $1.95 250,000 $ 6,906
TOTAL CONSTRUCTION & REAL ESTATE 8,346
DURABLES - 1.1%
AUTOS, TIRES, & ACCESSORIES - 1.1%
Chrysler Corp., Series A, $4.625 (g) 29,100 5,747
Mascotech, Inc. $1.20 (dividend enhanced) 428,700 7,127
12,874
ENERGY - 3.3%
OIL & GAS - 3.3%
Diamond Shamrock, Inc. $2.50 (g) 61,800 3,785
Lomak Petroleum, Inc. exchangeable $2.03 (g) 110,000 4,991
Occidental Petroleum Corp. Indexed $3.00 49,000 3,210
Santa Fe Energy Resources, Inc. $.732 1,092,400 13,518
Unocal Capital Trust $3.125 100,000 5,675
Valero Energy Corp. $3.125 122,400 7,191
38,370
FINANCE - 6.6%
CREDIT & OTHER FINANCE - 1.8%
Continental Airlines Finance Trust $4.25 (g) 246,000 16,482
Money Store, Inc. $1.72 150,000 4,388
20,870
INSURANCE - 1.9%
Aetna, Inc. Class C $6.25 100,000 7,424
Alexander & Alexander Services, Inc.,
Series A, $3.625 (g) 100,000 4,450
Frontier Financing Trust $3.13 (g) 75,000 3,863
Pennsylvania Corp. Financial Group, Inc.
Series II, $3.50 (g) 100,000 5,813
21,550
CONVERTIBLE PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - CONTINUED
SAVINGS & LOANS - 0.9%
Glendale Federal Bank, Series E, $2.1875 195,000 $ 10,408
SECURITIES INDUSTRY - 2.0%
Merrill Lynch & Co, Inc. exchangeable $2.3906 215,000 8,304
Salomon, Inc.:
$2.03 297,600 8,854
exchangeable 100,000 6,050
23,208
TOTAL FINANCE 76,036
HEALTH - 0.8%
DRUGS & PHARMACEUTICALS - 0.2%
Neorx Corp., Series 1, $2.44 123,400 2,082
MEDICAL FACILITIES MANAGEMENT - 0.6%
FHP International Corp., Series A, $1.25 250,000 7,406
TOTAL HEALTH 9,488
INDUSTRIAL MACHINERY & EQUIPMENT - 1.9%
Case Corp. Series A, $4.50 89,500 11,579
Cooper Industries, Inc. exchangeable $0.81 498,200 9,528
21,107
MEDIA & LEISURE - 2.8%
BROADCASTING - 0.8%
Cablevision Systems Corp. $2.125 depositary shares
representing 1/10 pfd., Series I 225,900 4,603
Granite Broadcasting Corp. $1.93 90,000 5,164
9,767
ENTERTAINMENT - 0.9%
AMC Entertainment, Inc. $1.75 308,400 10,370
LEISURE DURABLES & TOYS - 0.1%
Tyco Toys, Inc., Series C, $0.4125 depositary share
representing 1/20 pfd. 163,100 1,692
CONVERTIBLE PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
MEDIA & LEISURE - CONTINUED
LODGING & GAMING - 0.5%
Host Marriott Financial Trust $3.375 (g) 100,000 $ 5,225
PUBLISHING - 0.5%
Hollinger International, Inc. $0.95 500,000 5,438
TOTAL MEDIA & LEISURE 32,492
NONDURABLES - 3.4%
TOBACCO - 3.4%
RJR Nabisco Holdings Corp. depositary shares representing
1/10 pfd., Series C 6,112,700 38,968
TECHNOLOGY - 2.9%
COMPUTER SERVICES & SOFTWARE - 1.0%
Ceridian Corp. $2.75 106,100 11,220
COMPUTERS & OFFICE EQUIPMENT - 1.9%
Vanstar Financing Trust $3.38 (g) 301,700 17,196
Wang Labs, Inc. $3.25 (g) 102,000 5,126
22,322
TOTAL TECHNOLOGY 33,542
TRANSPORTATION - 0.9%
AIR TRANSPORTATION - 0.9%
Trans World Airlines, Inc. $4.00 (g) 260,000 7,215
USAir Group, Inc., Series B, $4.375 depositary shares
representing 1/100 share (a) 41,000 2,696
9,911
UTILITIES - 3.6%
CELLULAR - 0.8%
AirTouch Communications, Inc. Class B $1.74 300,000 8,588
GAS - 0.3%
MCN Corp. $2.0125 125,400 3,574
CONVERTIBLE PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
UTILITIES - CONTINUED
TELEPHONE SERVICES - 2.5%
MFS Communications, Inc., $2.68 depositary
shares representing 1/100 share
(dividend enhanced) Series A 219,900 $ 18,059
Enhance Financial Services Group, Inc. $7.625 351,400 10,806
U.S. West, Inc. $4.50 200 9
28,874
TOTAL UTILITIES 41,036
TOTAL CONVERTIBLE PREFERRED STOCKS
(Cost $321,779) 349,185
CASH EQUIVALENTS - 7.5%
MATURITY
AMOUNT (000S)
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.71%, dated
11/29/96 due 12/2/96 $ 28,525 28,511
SHARES
Taxable Central Cash Fund (b) 57,352,092 57,352
TOTAL CASH EQUIVALENTS
(Cost $85,863) 85,863
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $1,068,473) $ 1,149,689
CURRENCY ABBREVIATIONS
GBP - British pound
LEGEND
1. Non-income producing
2. At period end, the seven-day yield on the Taxable Central Cash Fund was
5.46%. The yield refers to the income earned by investing in the fund over
the seven-day period, expressed as an annual percentage.
3. Non-income producing - issuer filed for protection under the Federal
Bankruptcy Code or is in default of interest payment.
4. Principal amount is stated in United States dollars unless otherwise
noted.
5. Standard & Poor's credit ratings are used in the absence of a rating by
Moody's Investors Service, Inc.
6. 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 (000S)
Cam-Net Communications
Network, Inc. 11 1/2%,
4/4/98 4/12/96 $ 1,838
Cam-Net Communications
Network, Inc. 4/12/96 $ 684
7. 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 $291,588,000 or 25.4% of net
assets.
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 6.4% AAA, AA, A 5.3%
Baa 1.7% BBB 4.2%
Ba 11.2% BB 4.8%
B 12.6% B 13.4%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
The percentage not rated by both S&P and Moody's amounted to 13.9%.
INCOME TAX INFORMATION
At November 30, 1996, the aggregate cost of investment securities for
income tax purposes was $1,069,021,000. Net unrealized appreciation
aggregated $80,668,000, of which $106,283,000 related to appreciated
investment securities and $25,615,000 related to depreciated investment
securities.
The fund hereby designates approximately $8,324,000 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 AMOUNT) NOVEMBER 30, 1996

ASSETS

Investment in securities, at value (including repurchase $ 1,149,689
agreements of $28,511) (cost $1,068,473) -
See accompanying schedule

Receivable for investments sold 5,365

Receivable for fund shares sold 1,454

Dividends receivable 1,214

Interest receivable 6,625

Other receivables 495

TOTAL ASSETS 1,164,842

LIABILITIES

Payable for investments purchased $ 14,241

Payable for fund shares redeemed 2,326

Accrued management fee 473

Other payables and accrued expenses 275

TOTAL LIABILITIES 17,315

NET ASSETS $ 1,147,527

Net Assets consist of:

Paid in capital $ 982,078

Undistributed net investment income 15,316

Accumulated undistributed net realized gain (loss) on 68,882
investments and foreign currency transactions

Net unrealized appreciation (depreciation) on 81,251
investments and assets and liabilities in foreign
currencies

NET ASSETS, for 61,567 shares outstanding $ 1,147,527

NET ASSET VALUE, offering price and redemption price per $18.64
share ($1,147,527 (divided by) 61,567 shares)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED NOVEMBER 30, 1996

INVESTMENT INCOME $ 20,934
Dividends

Interest (including interest on securities loaned of $33) 37,989

TOTAL INCOME 58,923

EXPENSES

Management fee $ 5,606
Basic fee

Performance adjustment 588

Transfer agent fees 2,485

Accounting and security lending fees 489

Non-interested trustees' compensation 4

Custodian fees and expenses 70

Registration fees 74

Audit 19

Legal 9

Miscellaneous 27

Total expenses before reductions 9,371

Expense reductions (124) 9,247

NET INVESTMENT INCOME 49,676

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

Investment securities (including realized loss of 70,814
$858 on sales of investments in affiliated issuers)

Foreign currency transactions 27 70,841

Change in net unrealized appreciation (depreciation) on 41,980
investment securities

NET GAIN (LOSS) 112,821

NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 162,497
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,
1996 1995

INCREASE (DECREASE) IN NET ASSETS

Operations $ 49,676 $ 44,341
Net investment income

Net realized gain (loss) 70,841 68,607

Change in net unrealized appreciation (depreciation) 41,980 45,718

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 162,497 158,666
FROM OPERATIONS

Distributions to shareholders (46,048) (40,653)
From net investment income

From net realized gain (53,549) -

TOTAL DISTRIBUTIONS (99,597) (40,653)

Share transactions 445,945 432,412
Net proceeds from sales of shares

Reinvestment of distributions 92,396 36,917

Cost of shares redeemed (503,046) (441,400)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 35,295 27,929
FROM SHARE TRANSACTIONS

TOTAL INCREASE (DECREASE) IN NET ASSETS 98,195 145,942

NET ASSETS

Beginning of period 1,049,332 903,390

End of period (including undistributed net investment $ 1,147,527 $ 1,049,332
income of $15,316 and $9,649, respectively)

OTHER INFORMATION
Shares

Sold 25,384 26,247

Issued in reinvestment of distributions 5,440 2,300

Redeemed (28,688) (26,902)

Net increase (decrease) 2,136 1,645

</TABLE>

FINANCIAL HIGHLIGHTS

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

1996 1995 1994 B 1993 1992

SELECTED PER-SHARE DATA

Net asset value, beginning $ 17.66 $ 15.63 $ 17.63 $ 15.77 $ 13.45
of period

Income from Investment
Operations

Net investment income .83 .79 .78 .75 .67

Net realized and unrealized 1.79 1.94 (.86) 2.24 2.66

gain (loss)

Total from investment 2.62 2.73 (.08) 2.99 3.33
operations

Less Distributions

From net investment (.74) E (.70) (.91) (.73) (.64)
income

From net realized gain (.90) E - (1.01) (.40) (.37)

Total distributions (1.64) (.70) (1.92) (1.13) (1.01)

Net asset value, end of $ 18.64 $ 17.66 $ 15.63 $ 17.63 $ 15.77
period

TOTAL RETURN A 16.02% 18.00% (.54)% 19.94% 26.18%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period $ 1,148 $ 1,049 $ 903 $ 1,056 $ 412
(in millions)

Ratio of expenses to .85% .70% .86% .92% .96%
average net assets

Ratio of expenses to .83% .70% .85% .92% .96%
average net assets after C C
expense reductions

Ratio of net investment 4.48% 4.59% 4.61% 4.62% 4.82%
income to average net
assets

Portfolio turnover rate 175% 203% 318% 312% 258%

Average commission rate D $ .0436

</TABLE>

F THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 6 OF NOTES TO FINANCIAL
STATEMENTS).
G 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, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
H FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES (SEE NOTE 6 OF
NOTES TO FINANCIAL STATEMENTS).
I FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR SECURITY
TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM PERIOD
TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED IN
VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES MAY
DIFFER.
J THE AMOUNTS SHOWN REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO
TAX DIFFERENCES (SEE NOTE 1 OF NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1996

8. 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 financial
statements have been prepared in conformity with generally accepted
accounting principles which permit management to make certain estimates and
assumptions at the date of the financial statements. The following
summarizes the significant accounting policies of the fund:
SECURITY VALUATION. Equity securities for which quotations are readily
available are valued at the last sale price, or if no sale price, at the
closing bid price. Debt securities for which quotations are readily
available are valued by a pricing service at their market values as
determined by their most recent bid prices in the principal market (sales
prices if the principal market is an exchange) in which such securities are
normally traded. Securities (including restricted securities) for which
market quotations are not readily available are valued at their fair value
as determined in good faith under consistently applied procedures under the
general supervision of the Board of Trustees. Short-term securities with
remaining maturities of sixty days or less for which quotations are not
readily
available are valued at amortized cost or original cost plus accrued
interest, both of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Income receipts
and expense payments are translated into U.S. dollars at the prevailing
exchange rate on the respective dates of the transactions. Purchases and
sales of securities are translated into U.S. dollars at the contractual
currency exchange rates established at the time of each trade.
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, 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 included with the net realized and
unrealized gain or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes substantially all of its taxable income for
its fiscal year. The schedule of investments includes information regarding
income taxes under the caption "Income Tax Information."
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. Non-cash dividends included in dividend income, if any,
are recorded at the fair market value of the securities received. Interest
income, which includes accretion of original issue discount, is accrued as
earned. Investment income is recorded net of foreign taxes withheld where
recovery of such taxes is uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned 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, which may result in distribution
reclassifications, are primarily due to differing treatments for foreign
currency transactions, passive foreign investment companies (PFIC), market
discount, 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 the per-share allocation between net investment income and realized
and unrealized gain (loss). Undistributed net investment income and
accumulated undistributed net realized gain (loss) on investments and
foreign currency transactions may include temporary book and tax basis
differences which will reverse in a subsequent period. Any taxable income
or gain remaining at fiscal year end is distributed in the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
9. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign securities. Losses may
arise from changes in the value of the foreign currency or if the
counterparties do not perform under the contracts' terms. The U.S. dollar
value of foreign currency contracts is determined using contractual
currency exchange rates established at the time of each trade. The cost of
the foreign currency contracts is included in the cost basis of the
associated investment.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (SEC), the fund, along with other
affiliated entities of Fidelity Management & Research Company (FMR), may
transfer uninvested cash balances into one or more joint trading accounts.
These balances are invested in one or more repurchase agreements that
mature in 60 days or less from the date of purchase for U.S. Treasury or
Federal Agency obligations.
2. OPERATING POLICIES - CONTINUED
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
Securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are marked-to-market
daily and maintained at a value at least equal to the principal amount of
the repurchase agreement (including accrued interest). FMR, the fund's
investment adviser, is responsible for determining that the value of the
underlying securities remains in accordance with the market value
requirements stated above.
TAXABLE CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by the
SEC, the fund may invest in the Taxable Central Cash Fund (the Cash Fund)
managed by FMR. The Cash Fund is an open-end money market fund available
only to investment companies and other accounts managed by FMR and its
affiliates. The Cash Fund seeks preservation of capital, liquidity, and
current income by investing in U.S. Treasury securities and repurchase
agreements for these securities, and may be utilized by the fund as an
additional cash management option. Dividends from the Cash Fund are
declared daily and paid monthly from net interest income. Income
distributions received by the fund are recorded as interest income.
RESTRICTED SECURITIES. The fund is permitted to invest in securities that
are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from registration
or to the public if the securities are registered. Disposal of these
securities may involve time-consuming negotiations and expense, and prompt
sale at an acceptable price may be difficult. At the end of the period,
restricted securities (excluding 144A issues) amounted to $1,313,000 or
0.1% of net assets.
10. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $1,831,184,000 and $1,890,474,000, respectively.
11. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly
basic fee that is calculated on the basis of a group fee rate plus a fixed
individual fund fee rate applied to the average net assets of the fund. The
group fee rate is the weighted average of a series of rates and is based on
the monthly average net assets of all the mutual funds advised by FMR. The
rates ranged from .2500% to .5200% for the period. In the event that these
rates were lower than the contractual rates in effect during the period,
FMR voluntarily implemented the above rates, as they resulted in the same
or a lower management fee. The annual individual fund fee rate is .20%. The
basic fee is subject to a performance adjustment (up to a maximum of
(plus/minus) .15% of the fund's average net assets over the performance
period) based on the fund's investment performance as compared
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
to the appropriate index over a specified period of time. For the period,
the management fee was equivalent to an annual rate of .56% 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 its 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 $6,000 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 account fees and asset-based fees that vary according to
account size and type of account. FSC pays for typesetting, printing and
mailing of all shareholder reports, except proxy statements. For the
period, the transfer agent fees were equivalent to an annual rate of .22%
of average net assets.
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 $133,000 for the period.
12. 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.
13. 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
$85,000 under this arrangement.
In addition, the fund has entered into arrangements with its custodian and
transfer agent whereby interest earned
6. EXPENSE REDUCTIONS -
CONTINUED
on uninvested cash balances was used to offset a portion of the fund's
expenses. During the period, the fund's custodian and transfer agent fees
were reduced by $18,000 and $21,000, respectively, under these
arrangements.
14. TRANSACTIONS WITH AFFILIATED COMPANIES.
An affiliated company is a company in which the fund has ownership of at
least 5% of the voting securities. Transactions during the period with
companies which are or were affiliates are as follows:
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES
AMOUNTS IN THOUSANDS
PURCHASE SALES DIVIDEND VALUE
AFFILIATE COST COST INCOME
Advanced Medical, Inc. $ - $ 2,080 $ - $ -
TOTALS $ - $ 2,080 $ - $ -
REPORT OF INDEPENDENT ACCOUNTANTS

To the Trustees of Fidelity Financial Trust and the Shareholders of
Fidelity Convertible Securities 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 Convertible Securities Fund (a
fund of Fidelity Financial Trust) at November 30, 1996, the results of its
operations for the year then ended, and 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 Convertible Securities 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 at November 30, 1996 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.
/s/:Price Waterhouse LLP
PRICE WATERHOUSE LLP
Boston, Massachusetts
January 6, 1997
DISTRIBUTIONS

The Board of Trustees of Fidelity Convertible Securities Fund voted to pay
to shareholders of record at the opening of business on record date, the
following distributions derived from capital gains realized from sales of
portfolio securities, and dividends derived from net investment income:
PAY DATE RECORD DATE DIVIDENDS CAPITAL GAINS
12/16/96 12/13/96 $.23 $.81
12/31/96 12/30/96 $.02 -
A total of 16% of the dividends distributed during the fiscal year
qualifies for the dividends-received deduction for corporate shareholders.
The fund will
notify shareholders in January 1997 of the applicable percentage for use in
preparing 1996 income tax returns.
MANAGING YOUR INVESTMENTS

Fidelity offers several ways to conveniently manage your personal
investments via your telephone or PC. You can access your account
information, conduct trades and research your investments 24 hours a day.
BY PHONE
Fidelity TouchTone Xpressprovides a single toll-free number to access
account balances, positions, quotes and trading. It's easy to navigate the
service, and on your first call, the system will help you create a personal
identification number (PIN) for security.
SM
(PHONE_GRAPHIC)(PHONE_GRAPHIC)TOUCHTONE XPRESS
1-800-544-5555
PRESS
For mutual fund and brokerage trading.
1
For quotes.*
2
For account balances and holdings.
3
To review orders and mutual
fund activity.
4
To change your PIN.
5
To speak to a Fidelity representative.
*
0
BY PC
Fidelity's Web site on the Internet provides a wide range of information,
including daily financial news, fund performance, interactive planning
tools and news about Fidelity products and services.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)FIDELITY'S WEB SITE
WWW.FIDELITY.COM
If you are not currently on the Internet, call Fidelity at 1-800-544-7272
for significant savings on Web access from internetMCI.
SM
(PHONE_GRAPHIC)(PHONE_GRAPHIC)
FIDELITY ON-LINE XPRESS+
TM
Fidelity On-line Xpress+ software for Windows combines comprehensive
portfolio management capabilities, securities trading and access to
research and analysis tools . . . all on your desktop. Call Fidelity at
1-800-544-7272 or visit our Web site for more information on how to manage
your investments via your PC.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
RETURN WILL
VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS
MEANS THAT
YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO
ASSURANCE THAT
MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN
INVESTMENT
IN A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF
DIVIDENDS
AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES.
TO VISIT FIDELITY

For directions and hours,
please call 1-800-544-9797.
ARIZONA
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851 East Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
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Irvine, CA
10100 Santa Monica Blvd.
Los Angeles, CA
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Los Angeles, CA
251 University Avenue
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1760 Challenge Way
Sacramento, CA
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455 Market Street
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950 Northgate Drive
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1400 Civic Drive
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COLORADO
1625 Broadway
Denver, CO
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265 Church Street
New Haven, CT
300 Atlantic Street
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DELAWARE
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Boca Raton, FL
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GEORGIA
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Atlanta, GA
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HAWAII
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Honolulu, HI
ILLINOIS
215 East Erie Street
Chicago, IL
One North Franklin
Chicago, IL
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1700 East Golf Road
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3232 Lake Avenue
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LOUISIANA
201 St. Charles Avenue
New Orleans, LA
MAINE
3 Canal Plaza
Portland, ME
MARYLAND
7401 Wisconsin Avenue
Bethesda, MD
1 West Pennsylvania Ave.
Towson, MD
MASSACHUSETTS
470 Boylston Street
Boston, MA
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Boston, MA
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Boston, MA
300 Granite Street
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MICHIGAN
280 North Woodward Ave.
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MINNESOTA
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UTAH
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WASHINGTON
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511 Pine Street
Seattle, WA
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1775 K Street, N.W.
Washington, DC
WISCONSIN
595 North Barker Road
Brookfield, WI

TO WRITE FIDELITY

INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.) Inc., London, England
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
William J. Hayes, Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
Robert H. Morrison, Manager,
Security Transactions
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
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 *
ADVISORY BOARD
William O. McCoy
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Co.
Boston, MA
CUSTODIAN
Brown Brothers Harriman & Co.
Boston, MA
FIDELITY'S 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 Fund
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Exchanges/Redemptions 1-800-544-7777
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
(registered trademark)
TouchTone Xpress 1-800-544-5555
SM
* INDEPENDENT TRUSTEES
AUTOMATED LINE FOR QUICKEST SERVICE

(2_FIDELITY_LOGOS)FIDELITY

EQUITY-INCOME II
FUND
ANNUAL REPORT
NOVEMBER 30, 1996
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 27 Statements of assets and liabilities,
operations, and changes in net
assets, as well as financial
highlights.

NOTES 31 Notes to the financial statements.

REPORT OF INDEPENDENT 36 The auditors' opinion.
ACCOUNTANTS

DISTRIBUTIONS 37

Equity-Income II 22.75% 134.45% 238.94%

S&P 500(registered trademark) 27.86% 130.90% 175.58%

Equity Income Funds 22.28% 105.93% n/a
Average
</TABLE>
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 August 21, 1990. For example, if you invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment would
be $1,050. You can compare the fund's returns to the performance of the
Standard & Poor's 500 Index - a widely recognized, unmanged index of common
stocks. To measure how the fund's performance stacked up against its peers,
you can compare it to the equity income funds average, which reflects the
performance of 156 mutual funds with similar objectives tracked by Lipper
Analytical Services, Inc. over the past 12 months. Both benchmarks include
reinvested dividends and capital gains, if any.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND

Equity-Income II 22.75% 18.58% 21.44%

S&P 500 27.86% 18.21% 17.50%

Equity Income Funds Average 22.28% 15.43% n/a
</TABLE>
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and shows you what would have happened if the fund had performed at a
constant rate each year.

$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19961130 19961209 074324 S00000000000001
Equity-Income II SP Standard & Poor 500
00319 SP001
1990/08/21 10000.00 10000.00
1990/08/31 10090.00 9833.94
1990/09/30 9790.00 9355.02
1990/10/31 9790.00 9314.80
1990/11/30 10180.00 9916.53
1990/12/31 10451.06 10193.20
1991/01/31 10954.00 10637.63
1991/02/28 11929.70 11398.22
1991/03/31 12424.99 11674.06
1991/04/30 12770.41 11702.07
1991/05/31 13420.62 12207.60
1991/06/30 13105.67 11648.49
1991/07/31 13833.74 12191.31
1991/08/31 14361.43 12480.25
1991/09/30 14456.53 12271.83
1991/10/31 14904.71 12436.27
1991/11/30 14456.53 11935.09
1991/12/31 15320.99 13300.46
1992/01/31 15754.68 13053.08
1992/02/29 16262.56 13222.77
1992/03/31 16199.86 12964.92
1992/04/30 16550.87 13346.09
1992/05/31 16731.70 13411.49
1992/06/30 16626.27 13211.65
1992/07/31 17139.50 13752.01
1992/08/31 16786.65 13470.10
1992/09/30 17001.04 13629.04
1992/10/31 17140.75 13676.74
1992/11/30 17807.03 14143.12
1992/12/31 18240.51 14317.08
1993/01/31 18739.36 14437.34
1993/02/28 19071.82 14633.69
1993/03/31 19793.85 14942.46
1993/04/30 19849.55 14580.86
1993/05/31 20150.30 14971.62
1993/06/30 20341.51 15015.04
1993/07/31 20543.02 14954.98
1993/08/31 21214.73 15521.77
1993/09/30 21136.47 15402.26
1993/10/31 21530.18 15721.08
1993/11/30 21203.96 15571.73
1993/12/31 21685.43 15760.15
1994/01/31 22723.07 16296.00
1994/02/28 22286.55 15854.37
1994/03/31 21374.40 15163.12
1994/04/30 21955.29 15357.21
1994/05/31 22216.10 15609.07
1994/06/30 22047.50 15226.65
1994/07/31 22643.38 15726.08
1994/08/31 23418.02 16370.85
1994/09/30 22879.58 15969.77
1994/10/31 23274.88 16329.08
1994/11/30 22244.70 15734.38
1994/12/31 22370.95 15967.72
1995/01/31 22345.60 16381.76
1995/02/28 23154.03 17020.16
1995/03/31 23916.45 17522.43
1995/04/30 24475.31 18038.46
1995/05/31 25046.86 18759.46
1995/06/30 25390.89 19195.24
1995/07/31 26386.61 19831.75
1995/08/31 26527.03 19881.53
1995/09/30 27125.59 20720.53
1995/10/31 26317.59 20646.56
1995/11/30 27612.95 21552.95
1995/12/31 28274.79 21968.05
1996/01/31 29056.25 22715.85
1996/02/29 29427.41 22926.42
1996/03/31 30226.90 23147.20
1996/04/30 30706.27 23488.39
1996/05/31 30999.21 24094.16
1996/06/30 30759.08 24185.96
1996/07/31 29714.58 23117.42
1996/08/31 30397.52 23604.97
1996/09/30 31443.22 24933.46
1996/10/31 32022.26 25621.12
1996/11/29 33894.04 27557.82
IMATRL PRASUN SHR__CHT 19961130 19961209 074326 R00000000000079

$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Equity-Income II Fund on August 21, 1990, when the
fund started. As the chart shows, by November 30, 1996, the value of the
investment would have grown to $33,894 - a 238.94% increase on the 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 $27,558 - a 175.58% 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
Paced by the robust performance
of blue chip stocks, the U.S. stock
market posted strong gains for
the year that ended November
30, 1996. The Standard & Poor's
500 Index returned 27.86%
during the period - well above its
long-term average of about 12%.
The stock market spent much of
the past year breaking price and
trading volume records. Solid
corporate earnings reports, large
cash inflows into mutual funds,
widespread optimism and a
generally favorable interest rate
environment propelled share
prices higher. Large capitalization
stocks thrived as investors
sought their lower volatility and
higher degree of liquidity over
smaller cap stocks in an
environment where it was
sometimes difficult to discern the
health of the economy. The Dow
Jones Industrial Average closed
above 6500 for the first time in
November. While short-term
confusion over the direction of
interest rates created a volatile
backdrop in the summer months,
stocks rallied again when the
Federal Reserve Board left
short-term interest rates
unchanged and it appeared
inflation would not be an issue for
the remainder of 1996.
Smaller-company stocks posted
strong gains at the beginning of
1996, but trended downward in
the spring and summer because
their earnings tend to be more
affected by the higher borrowing
costs brought on by higher rates.
When interest rate fears
subsided, these stocks
rebounded, only to fade toward
the end of the period due to
earnings concerns and a general
flight to quality.
NOTE TO SHAREHOLDERS: Effective December 3, 1996 - after the period covered
by this report - Bettina Doulton became Portfolio Manager of Fidelity
Equity-Income II Fund.
Q. HOW DID THE FUND DO, BETTINA?
A. For the 12 months that ended November 30, 1996, the fund had a total
return of 22.75%, while the equity income funds' average return was 22.28%,
according to Lipper Analytical Services. For the same 12-month period, the
Standard & Poor's 500 Index posted a return of 27.86%.
Q. WHAT FACTORS CONTRIBUTED TO THE FUND'S PERFORMANCE?
A. The fund's investments in the energy sector and several individual
stocks were the primary influences on performance. The energy sector
rallied as oil prices remained higher than expected, in part because Iraq
did not re-enter the market when anticipated. Schlumberger and British
Petroleum were two of the better performers for the fund. British
Petroleum, the largest position in the fund, continued its restructuring
efforts, accelerated its production, generated strong cash flow and
remained committed to building shareholder value.
Q. WHAT STOCKS STOOD OUT IN TERMS OF THEIR STRONG CONTRIBUTION TO THE
FUND'S PERFORMANCE?
A. I'd highlight IBM. The stock has performed brilliantly since the fund's
significant position was accumulated on weakness in mid-1996. The market
became increasingly convinced of the company's ability to sustain strong
profit growth driven by an improving revenue outlook. IBM generates
substantial free cash flow that can be used for share repurchases,
growth-enhancing acquisitions and dividend increases. Fannie Mae - the
Federal National Mortgage Association - and Freddie Mac - the Federal Home
Loan Mortgage Corporation - also performed well. These holdings were buoyed
by a favorable interest rate climate as well as strong business prospects.
Asset growth, tightly controlled operating expenses and declining credit
costs were driving profit growth. Fruit of the Loom - with new management
in control - was another positive contributor. Profitability has improved
because of market share gains, lower raw material costs and operating
expense cuts.
Q. AT THE SAME TIME, THE FUND TRAILED THE S&P 500. WHY WAS THAT?
A. While the fund's performance relative to the S&P was affected somewhat
by the performance of individual stocks, it was mainly a result of the
fund's make-up. Specifically, the fund's median market capitalization - the
average market value of the companies held by the fund - was significantly
smaller than that of the S&P 500. Over the past year, the stocks that have
performed best have been large-capitalization, blue-chip growth stocks,
many of which are included in the S&P 500 but not in the fund. In addition,
bank-related financial stocks also performed well, and the fund had less
invested in this area than the index.
Q. WERE THERE ANY OTHER STRATEGIC MOVES OF NOTE DURING THE PERIOD?
A. The fund took advantage of market weakness in July to add to some of its
larger positions in the nondurables and health sectors. In particular, the
fund increased its holdings in pharmaceutical stocks such as Bristol-Myers
Squibb.
Q. WHAT'S YOUR OUTLOOK?
A. I think we're entering a difficult period as pressures on corporate
earnings increase. Revenue growth has decelerated due to slower global
economic growth, a lack of pricing flexibility and less favorable foreign
exchange rates. In light of more moderate revenue growth and dwindling
benefits of multiyear restructuring programs, corporations will be
hard-pressed to sustain their profit growth at the rates of prior years. I
believe the successful companies will be those that maintain a competitive
advantage, be it through a dominant market position, low-cost
manufacturing, financial flexibility or, most importantly, aggressive
management. I'll seek to orient the fund toward those kinds of companies,
since I expect the second-tier companies that lack one or more of these
advantages to struggle, losing market share and facing eroding
profitability.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.

<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF NOVEMBER 30, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE STOCKS
6 MONTHS AGO

British Petroleum PLC ADR 2.9 3.0

American Express Co. 2.8 2.6

Wal-Mart Stores, Inc. 2.0 2.1

International Business Machines 2.0 1.5
Corp.

du Pont (E.I.) de Nemours & Co. 2.0 2.1

Federal National Mortgage 1.7 1.4
Association

Philip Morris Companies, Inc. 1.6 1.7

Royal Dutch Petroleum Co. ADR 1.5 0.9

Bank of New York Co., Inc. 1.5 1.2

Western Atlas, Inc. 1.4 1.3

TOP FIVE MARKET SECTORS AS OF NOVEMBER 30, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE MARKET
SECTORS
6 MONTHS AGO

Finance 15.1 13.8

Energy 13.2 13.8

Durables 9.9 9.3

Basic Industries 8.1 9.9

Retail & Wholesale 7.3 8.2
</TABLE>
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF NOVEMBER 30, 1996 * AS OF MAY 31, 1996 **
Stocks 85.8%
Bonds 1.4%
Convertible
securities 5.2%
Short-term
investments 7.6%
FOREIGN
INVESTMENTS 10.2%
Stocks 85.0%
Bonds 1.7%
Convertible
securities 4.5%
Short-term
investments 8.8%
FOREIGN
INVESTMENTS 9.9%
Row: 1, Col: 1, Value: 8.800000000000001
Row: 1, Col: 2, Value: 4.5
Row: 1, Col: 3, Value: 1.7
Row: 1, Col: 4, Value: 40.0
Row: 1, Col: 5, Value: 45.0
Row: 1, Col: 1, Value: 14.5
Row: 1, Col: 2, Value: 3.3
Row: 1, Col: 3, Value: 1.7
Row: 1, Col: 4, Value: 40.0
Row: 1, Col: 5, Value: 40.5
*
**
INVESTMENTS NOVEMBER 30, 1996

Showing Percentage of Total Value of Investment in Securities

COMMON STOCKS - 85.8%
SHARES VALUE (NOTE 1)
(000S)
AEROSPACE & DEFENSE - 2.2%
AEROSPACE & DEFENSE - 1.7%
Flightsafety International, Inc. 879,300 $ 43,525
Gulfstream Aerospace Corp. (a) 1,076,400 25,834
Harsco Corp. 203,600 14,201
Lockheed Martin Corp. 1,109,554 100,553
Rockwell International Corp. 1,396,600 89,732
273,845
DEFENSE ELECTRONICS - 0.5%
Litton Industries, Inc. (a) 420,500 19,658
Raytheon Co. 1,066,500 54,525
74,183
TOTAL AEROSPACE & DEFENSE 348,028
BASIC INDUSTRIES - 7.9%
CHEMICALS & PLASTICS - 5.2%
du Pont (E.I.) de Nemours & Co. 3,295,100 310,563
Ferro Corp. (e) 1,572,000 45,392
Great Lakes Chemical Corp. 1,126,100 60,387
IMC Global, Inc. 1,827,500 66,018
Nalco Chemical Co. 1,838,700 70,100
Olin Corp. 1,323,100 52,759
Rohm & Haas Co. 231,700 18,449
Union Carbide Corp. 3,799,000 175,229
Witco Corp. 317,300 9,638
808,535
IRON & STEEL - 0.6%
Armco, Inc. (a) 1,087,700 4,895
Inland Steel Industries, Inc. 758,900 14,135
LTV Corp. 2,367,800 25,453
Nucor Corp. 917,600 49,895
94,378
METALS & MINING - 1.7%
Alcan Aluminium Ltd. 1,425,000 50,261
Alumax, Inc. (a) 654,107 21,177
Aluminum Co. of America 2,491,600 158,528
Cookson Group PLC 1,250,000 4,750
Inco Ltd. 525,900 18,354
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
BASIC INDUSTRIES - CONTINUED
METALS & MINING - CONTINUED
Pechiney SA Class A 100,000 $ 4,023
Ryerson Tull, Inc. Class A (a)(e) 308,400 4,433
261,526
PACKAGING & CONTAINERS - 0.2%
Caradon PLC 6,997,856 28,064
PAPER & FOREST PRODUCTS - 0.2%
Fort Howard Corp. (a) 1,089,400 30,776
TOTAL BASIC INDUSTRIES 1,223,279
CONGLOMERATES - 1.2%
AlliedSignal, Inc. 1,326,000 97,130
American Standard Companies, Inc. (a) 985,800 37,584
United Technologies Corp. 414,500 58,133
192,847
CONSTRUCTION & REAL ESTATE - 2.8%
BUILDING MATERIALS - 0.8%
Masco Corp. 2,990,800 109,164
Rugby Group PLC 4,008,400 6,471
115,635
CONSTRUCTION - 0.4%
McDermott (J. Ray) SA (a)(e) 2,629,600 65,083
ENGINEERING - 0.2%
Foster Wheeler Corp. 847,500 30,615
REAL ESTATE - 0.0%
Arden Realty Group, Inc. (a) 100,000 2,413
REAL ESTATE INVESTMENT TRUSTS - 1.4%
Bay Apartment Communities, Inc. 252,000 8,190
Beacon Properties Corp. 606,900 19,192
Bradley Real Estate Trust (SBI) 479,150 8,385
CBL & Associates Properties, Inc. 250,000 6,125
Cali Realty Corp. 577,300 16,308
CenterPoint Properties Corp. 99,400 2,696
Colonial Properties Trust (SBI) 200,000 5,375
Duke Realty Investors, Inc. 271,600 9,744
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
CONSTRUCTION & REAL ESTATE - CONTINUED
REAL ESTATE INVESTMENT TRUSTS - CONTINUED
Equity Residential Properties Trust (SBI) 441,700 $ 17,722
Excel Realty Trust, Inc. 298,900 6,763
Felcor Suite Hotels, Inc. 300,000 10,687
First Industrial Realty Trust, Inc. 211,800 6,063
Highwoods Properties, Inc. 132,900 4,087
LTC Properties, Inc. 263,100 4,506
Liberty Property Trust (SBI) 299,900 6,973
Macerich Co. 606,000 14,090
Patriot American Hospitality, Inc. 300,000 11,363
Public Storage, Inc. 574,800 14,585
RFS Hotel Investors, Inc. 300,000 5,025
Realty Income Corp. 100,000 2,375
Reckson Associates Realty Corp. 231,200 8,757
Shurgard Storage Centers, Inc. 21,800 600
Sovran Self Storage, Inc. 188,400 5,346
Starwood Lodging Trust combined certificate (SBI) 412,000 19,673
Urban Shopping Centers, Inc. 150,000 3,956
Weeks Corp. 100,000 2,838
221,424
TOTAL CONSTRUCTION & REAL ESTATE 435,170
DURABLES - 9.5%
AUTOS, TIRES, & ACCESSORIES - 5.6%
Bandag, Inc. 269,100 12,715
Chrysler Corp. 4,535,000 160,992
Cummins Engine Co., Inc. 938,400 42,463
Eaton Corp. 1,669,800 115,633
Echlin, Inc. 947,200 31,850
Federal Signal Co. 77,000 2,089
General Motors Corp. 3,205,618 184,723
Johnson Controls, Inc. 733,800 56,870
Modine Manufacturing Co. 106,500 2,649
PACCAR, Inc. 354,400 23,568
Scania AB:
Class A 223,000 5,595
Class B 1,279,000 32,279
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
DURABLES - CONTINUED
AUTOS, TIRES, & ACCESSORIES - CONTINUED
Superior Industries International, Inc. 1,163,900 $ 29,098
TRW, Inc. 395,300 38,492
Volvo AB Class B 5,438,900 119,447
858,463
CONSUMER DURABLES - 0.9%
Department 56, Inc. (a) 359,400 8,356
Minnesota Mining & Manufacturing Co. 1,374,500 115,114
Swedish Match Co. 6,983,900 22,877
146,347
CONSUMER ELECTRONICS - 1.1%
Newell Co. 3,416,700 105,918
Whirlpool Corp. 1,326,400 66,320
172,238
TEXTILES & APPAREL - 1.9%
Fruit of the Loom, Inc. Class A (a) 2,991,500 106,573
Intimate Brands, Inc. Class A 893,300 14,515
Russell Corp. (e) 1,993,700 57,319
Unifi, Inc. 2,350,300 71,390
Westpoint Stevens, Inc. Class A (a) 1,459,900 43,798
293,595
TOTAL DURABLES 1,470,643
ENERGY - 12.4%
ENERGY SERVICES - 4.3%
Baker Hughes, Inc. 4,171,900 152,796
Dresser Industries, Inc. 4,213,700 137,999
Halliburton Co. 275,000 16,569
McDermott International, Inc. 550,900 9,778
Schlumberger Ltd. 1,266,400 131,706
Western Atlas, Inc. (a)(e) 3,151,969 222,213
671,061
OIL & GAS - 8.1%
Amerada Hess Corp. 414,400 24,398
British Petroleum PLC:
Ord. 34,901 404
ADR 3,198,921 443,850
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
ENERGY - CONTINUED
OIL & GAS - CONTINUED
Burlington Resources, Inc. 1,687,100 $ 89,416
Canada Occidental Petroleum Ltd. 500,000 8,873
Coastal Corp. (The) 1,144,200 55,065
Exxon Corp. 365,000 34,538
Noble Affiliates, Inc. 437,900 20,636
Occidental Petroleum Corp. 4,176,400 100,234
Royal Dutch Petroleum Co. ADR 1,418,600 240,985
Total SA:
Class B 1,857,442 148,546
sponsored ADR 559,413 22,586
Union Pacific Resources Group, Inc. 2,106,415 62,929
1,252,460
TOTAL ENERGY 1,923,521
FINANCE - 13.7%
BANKS - 1.8%
Bank of New York Co., Inc. 6,479,928 232,467
Canadian Imperial Bank of Commerce 650,000 29,284
Norwest Corp. 530,400 24,796
286,547
CREDIT & OTHER FINANCE - 4.2%
American Express Co. 8,436,812 440,824
First Chicago NBD Corp. 2,322,300 136,435
Mercury Finance Co. 5,890,300 68,475
645,734
FEDERAL SPONSORED CREDIT - 2.5%
Federal Home Loan Mortgage Corporation 215,800 24,655
Federal National Mortgage Association 6,534,500 269,548
Student Loan Marketing Association 987,600 94,933
389,136
INSURANCE - 4.4%
Alexander & Alexander Services, Inc. 356,850 5,174
Allstate Corp. 3,247,800 195,680
Angerstein Underwriting Trust PLC (e) 6,500,000 12,897
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - CONTINUED
INSURANCE - CONTINUED
Berkley (W.R.) Corp. (e) 1,022,960 $ 53,705
General Re Corp. 826,500 139,472
Gryphon Holdings, Inc. (a)(e) 547,900 7,739
Hiscox Select Insurance Fund PLC 750,000 1,614
ITT Hartford Group, Inc. (a) 1,334,400 91,240
MBIA, Inc. 950,500 96,120
Masthead Insurance Underwriting PLC 900,000 1,680
PXRE Corp. 10,000 241
Protective Life Corp. 62,500 2,539
Syndicate Capital Trust PLC (e) 4,416,666 7,946
Travelers, Inc. (The) 619,315 27,869
Terra Nova (Bermuda) Holdings Ltd. (e) 1,323,000 30,760
Unionamerica Holdings PLC sponsored ADR 480,200 9,004
683,680
SECURITIES INDUSTRY - 0.8%
Lehman Brothers Holdings, Inc. 4,361,880 127,040
TOTAL FINANCE 2,132,137
HEALTH - 5.8%
DRUGS & PHARMACEUTICALS - 3.6%
American Home Products Corp. 1,110,400 71,343
Bristol-Myers Squibb Co. 1,320,700 150,230
Genentech, Inc. special (a) 1,589,100 86,010
Merck & Co., Inc. 370,000 30,710
Pharmacia & Upjohn, Inc. 3,410,800 131,742
Schering-Plough Corp. 1,367,400 97,427
567,462
MEDICAL EQUIPMENT & SUPPLIES - 1.3%
Bard (C.R.), Inc. 951,300 26,636
Bausch & Lomb, Inc. 2,339,900 86,869
Becton, Dickinson & Co. 585,500 24,591
Hillenbrand Industries, Inc. 136,500 5,034
Pall Corp. 2,088,200 54,554
197,684
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
HEALTH - CONTINUED
MEDICAL FACILITIES MANAGEMENT - 0.9%
Columbia/HCA Healthcare Corp. 762,500 $ 30,500
Tenet Healthcare Corp. (a) 2,838,800 63,518
United HealthCare Corp. 701,300 30,243
Wellpoint Health Networks, Inc. 250,000 7,563
131,824
TOTAL HEALTH 896,970
HOLDING COMPANIES - 0.4%
Norfolk Southern Corp. 419,300 37,737
U.S. Industries, Inc. (a) 600,000 17,700
55,437
INDUSTRIAL MACHINERY & EQUIPMENT - 3.1%
ELECTRICAL EQUIPMENT - 0.4%
Alcatel Alsthom Compagnie Generale d'Electricite SA 245,000 22,272
Scientific-Atlanta, Inc. 2,362,600 36,620
58,892
INDUSTRIAL MACHINERY & EQUIPMENT - 1.2%
Cooper Industries, Inc. 1,816,338 75,378
Keystone International, Inc. 484,900 9,456
Stanley Works 2,271,900 67,021
Stewart & Stevenson Services, Inc. (e) 1,688,500 41,790
193,645
POLLUTION CONTROL - 1.5%
Browning-Ferris Industries, Inc. 4,203,400 112,966
Safety Kleen Corp. 800,000 12,700
WMX Technologies, Inc. 2,945,200 106,028
231,694
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 484,231
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
MEDIA & LEISURE - 1.4%
BROADCASTING - 0.0%
Infinity Broadcasting Corp. Class A 115,000 $ 3,694
LODGING & GAMING - 0.3%
ITT Corp. 1,041,900 48,058
PUBLISHING - 0.6%
ACNielsen Corp. 307,466 5,342
Cognizant Corp. (a) 922,400 31,823
Dun & Bradstreet Corp. 922,400 20,869
New York Times Co. (The) Class A 952,600 35,604
93,638
RESTAURANTS - 0.5%
Brinker International, Inc. (a) 2,755,900 50,984
Darden Restaurants, Inc. 1,664,900 14,360
65,344
TOTAL MEDIA & LEISURE 210,734
NONDURABLES - 4.7%
BEVERAGES - 0.5%
Anheuser-Busch Companies, Inc. 1,656,400 70,190
FOODS - 1.4%
General Mills, Inc. 1,358,800 86,284
Quaker Oats Co. 1,674,000 65,914
Ralston Purina Group 954,000 72,981
225,179
HOUSEHOLD PRODUCTS - 1.0%
Premark International, Inc. 1,466,700 35,567
Procter & Gamble Co. 75,000 8,156
Rubbermaid, Inc. 3,347,400 80,338
Unilever NV:
Ord. 50,000 8,645
ADR 130,000 22,506
155,212
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
NONDURABLES - CONTINUED
TOBACCO - 1.8%
Philip Morris Companies, Inc. 2,361,500 $ 243,530
UST, Inc. 1,343,100 43,818
287,348
TOTAL NONDURABLES 737,929
PRECIOUS METALS - 0.9%
Barrick Gold Corp. 1,075,000 32,300
Newmont Mining Corp. 1,501,600 71,889
Santa Fe Pacific Gold Corp. 3,055,300 35,136
139,325
RETAIL & WHOLESALE - 6.8%
APPAREL STORES - 0.9%
Gap, Inc. 135,000 4,337
Limited, Inc. (The) 5,725,795 103,065
Payless ShoeSource, Inc. (a) 863,908 33,800
141,202
DRUG STORES - 0.6%
Revco (D.S.), Inc. (a) 76,500 2,638
Rite Aid Corp. 2,224,800 88,158
90,796
GENERAL MERCHANDISE STORES - 4.5%
Carson Pirie Scott & Co. (a) 251,300 6,502
Dayton Hudson Corp. 1,994,800 77,548
Dillard Department Stores, Inc. Class A 2,516,700 77,074
Federated Department Stores, Inc. (a) 2,814,900 96,058
May Department Stores Co. (The) 877,200 42,764
Sears, Roebuck & Co. 1,545,000 76,864
Wal-Mart Stores, Inc. 12,463,700 317,824
694,634
RETAIL & WHOLESALE, MISCELLANEOUS - 0.8%
Duty Free International, Inc. 717,200 11,296
Fingerhut Companies, Inc. 1,216,000 15,200
Pier 1 Imports, Inc. 722,300 9,842
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
RETAIL & WHOLESALE - CONTINUED
RETAIL & WHOLESALE, MISCELLANEOUS - CONTINUED
Sound Advice, Inc. (warrants) (a) 6 $ -
Toys "R" Us, Inc. (a) 2,770,300 95,575
131,913
TOTAL RETAIL & WHOLESALE 1,058,545
SERVICES - 1.0%
ADVERTISING - 0.2%
WPP Group PLC 3,890,100 14,423
WPP Group PLC (f) 6,000,000 22,398
36,821
LEASING & RENTAL - 0.0%
GATX Corp. 97,800 4,878
PRINTING - 0.0%
Donnelley (R.R.) & Sons Co. 173,200 5,802
SERVICES - 0.8%
Block (H&R), Inc. 2,290,900 67,009
Christies International PLC 5,282,100 22,205
Sotheby's Holdings, Inc. Class A 1,544,700 27,225
116,439
TOTAL SERVICES 163,940
TECHNOLOGY - 5.4%
COMPUTER SERVICES & SOFTWARE - 1.0%
Automatic Data Processing, Inc. 2,717,200 116,500
Electronic Data Systems Corp. 697,200 33,727
150,227
COMPUTERS & OFFICE EQUIPMENT - 2.9%
International Business Machines Corp. 1,948,900 310,606
Pitney Bowes, Inc. 1,768,300 104,330
Silicon Graphics, Inc. (a) 2,079,100 41,322
Wang Laboratories, Inc. (a) 100,000 2,112
458,370
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
ELECTRONIC INSTRUMENTS - 0.2%
Teradyne, Inc. (a) 1,500,000 $ 35,438
Varian Associates, Inc. 84,700 4,171
39,609
ELECTRONICS - 1.1%
AMP, Inc. 3,260,700 124,722
Avnet, Inc. 616,400 36,059
Thomas & Betts Corp. 174,900 7,914
168,695
PHOTOGRAPHIC EQUIPMENT - 0.2%
Polaroid Corp. 595,400 25,380
TOTAL TECHNOLOGY 842,281
TRANSPORTATION - 1.9%
AIR TRANSPORTATION - 0.3%
AMR Corp. (a) 470,000 42,888
RAILROADS - 1.1%
Burlington Northern Santa Fe Corp. 711,806 63,973
CSX Corp. 2,482,200 116,043
180,016
SHIPPING - 0.1%
Kirby Corp. (a) 698,700 13,887
TRUCKING & FREIGHT - 0.4%
Consolidated Freightways, Inc. 652,900 15,751
Hunt (J.B.) Transport Services, Inc. 1,627,300 22,782
Roadway Express, Inc. 590,100 9,737
USFreightways Corp. 685,000 17,767
66,037
TOTAL TRANSPORTATION 302,828
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
UTILITIES - 4.7%
CELLULAR - 0.2%
AirTouch Communications, Inc. (a) 1,388,000 $ 35,566
ELECTRIC UTILITY - 1.2%
American Electric Power Co., Inc. 751,600 31,191
DPL, Inc. 434,700 10,596
DQE, Inc. 256,300 7,561
Duke Power Co. 300,000 13,913
Entergy Corp. 1,586,300 43,028
Veba AG Ord. 1,200,000 70,244
176,533
TELEPHONE SERVICES - 3.3%
AT&T Corp. 990,200 38,865
ALLTEL Corp. 1,881,500 59,973
Ameritech Corp. 1,658,000 97,615
Bell Atlantic Corp. 737,000 46,339
MCI Communications Corp. 1,079,000 32,910
NYNEX Corp. 2,742,200 127,170
SBC Communications, Inc. 1,225,000 64,466
U.S. West, Inc. 1,643,400 51,355
518,693
TOTAL UTILITIES 730,792
TOTAL COMMON STOCKS
(Cost $10,236,210) 13,348,637
PREFERRED STOCKS - 3.0%
CONVERTIBLE PREFERRED STOCKS - 3.0%
BASIC INDUSTRIES - 0.1%
IRON & STEEL - 0.1%
Armco, Inc. Class A $3.625 418,100 18,501
ENERGY - 0.4%
OIL & GAS - 0.4%
Atlantic Richfield Co. exchangeable $2.23 2,121,200 47,727
Occidental Petroleum Corp. $3.875 (f) 305,000 17,919
65,646
PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
CONVERTIBLE PREFERRED STOCKS - CONTINUED
FINANCE - 1.3%
INSURANCE - 1.3%
Aetna, Inc. Class C 6.25% 617,700 $ 45,864
Alexander & Alexander Services, Inc., Series A, $3.625 (f) 539,800 24,021
Allstate Corp. exchangeable $2.30 2,594,400 128,423
198,308
INDUSTRIAL MACHINERY & EQUIPMENT - 0.3%
ELECTRICAL EQUIPMENT - 0.3%
Westinghouse Electric Corp. $1.30 (f) 2,506,200 42,291
MEDIA & LEISURE - 0.5%
ENTERTAINMENT - 0.5%
Time Warner Financing Trust $1.24 1,766,000 70,640
RETAIL & WHOLESALE - 0.3%
GENERAL MERCHANDISE STORES - 0.3%
K mart Financing I $3.875 823,700 41,494
UTILITIES - 0.1%
CELLULAR - 0.1%
AirTouch Communications, Inc. Class B $1.74 435,300 12,460
TELEPHONE SERVICES - 0.0%
Sprint Corp. $2.63 236,700 8,818
TOTAL UTILITIES 21,278
TOTAL CONVERTIBLE PREFERRED STOCKS 458,158
NONCONVERTIBLE PREFERRED STOCKS - 0.0%
ENERGY - 0.0%
OIL & GAS - 0.0%
Gulf Canada Resources Ltd., Series 1, adj. rate 422,000 1,386
TOTAL PREFERRED STOCKS
(Cost $422,737) 459,544
CORPORATE BONDS - 3.6%
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (D) (000S) (000S)
CONVERTIBLE BONDS - 2.2%
CONGLOMERATES - 0.1%
Hanson America, Inc. 2.39%, 3/1/01 (f) Baa3 $ 19,054 $ 16,648
CONSTRUCTION & REAL ESTATE - 0.0%
REAL ESTATE INVESTMENT TRUSTS - 0.0%
Centerpoint Properties 8.22%, 1/15/04 Ba2 1,030 1,494
Sizeler Property Investors, Inc. 8%, 7/15/03 - 1,000 870
2,364
ENERGY - 0.1%
ENERGY SERVICES - 0.1%
Baker Hughes, Inc. 0%, 5/5/08 A2 14,870 11,264
HEALTH - 0.4%
DRUGS & PHARMACEUTICALS - 0.4%
Roche Holdings, Inc. liquid yield option
notes 0%, 4/20/10 (f) - 118,000 54,280
INDUSTRIAL MACHINERY & EQUIPMENT - 0.4%
INDUSTRIAL MACHINERY & EQUIPMENT - 0.2%
Cooper Industries, Inc. 7.05%, 1/1/15 A3 34,262 36,318
POLLUTION CONTROL - 0.2%
WMX Technologies, Inc. 2%, 1/24/05 A2 22,500 22,162
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 58,480
RETAIL & WHOLESALE - 0.2%
GENERAL MERCHANDISE STORES - 0.2%
Federated Department Stores, Inc.
5%, 10/1/03 Ba3 30,000 34,725
SERVICES - 0.3%
ADT Operations, Inc. liquid yield option
notes 0%, 7/6/10 Ba3 87,940 53,643
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (D) (000S) (000S)
CONVERTIBLE BONDS - CONTINUED
TECHNOLOGY - 0.7%
COMPUTERS & OFFICE EQUIPMENT - 0.3%
Silicon Graphics, Inc. 0%, 11/2/13 (f) B1 $ 86,740 $ 42,286
ELECTRONICS - 0.4%
National Semiconductor Corp. 6 1/2%, 10/1/02 (f) Ba2 59,000 57,377
VLSI Technology, Inc. 8 1/4%, 10/1/05 B 11,000 10,808
68,185
TOTAL TECHNOLOGY 110,471
TOTAL CONVERTIBLE BONDS 341,875
NONCONVERTIBLE BONDS - 1.4%
BASIC INDUSTRIES - 0.1%
PAPER & FOREST PRODUCTS - 0.1%
Stone Container Corp. 9 7/8%, 2/1/01 B1 20,000 19,975
CONGLOMERATES - 0.3%
American Standard, Inc.:
10 7/8%, 5/15/99 Ba3 1,000 1,078
11 3/8%, 5/15/04 Ba3 17,530 18,867
0%, 6/1/05 (d) B1 15,000 14,044
Sequa Corp. 9 3/8%, 12/15/03 B3 12,110 12,260
46,249
DURABLES - 0.4%
TEXTILES & APPAREL - 0.4%
Westpoint Stevens, Inc.:
8 3/4%, 12/15/01 Ba3 32,690 33,507
9 3/8%, 12/15/05 B2 29,750 30,568
64,075
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (E) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (D) (000S) (000S)
NONCONVERTIBLE BONDS - CONTINUED
ENERGY - 0.3%
ENERGY SERVICES - 0.2%
Global Marine, Inc. 12 3/4%, 12/15/99 Ba1 $ 24,200 $ 26,106
OIL & GAS - 0.1%
Transtexas Gas Corp. 11 1/2%, 6/15/02 B2 12,000 13,020
TOTAL ENERGY 39,126
FINANCE - 0.1%
CLOSED END INVESTMENT COMPANY - 0.1%
Airplanes Pass Through Trust Class D
10 7/8%, 3/15/19 Ba2 12,610 14,060
INSURANCE - 0.0%
ITT Hartford Group, Inc. 7 1/4%, 12/1/96 A1 1,500 1,500
SAVINGS & LOANS - 0.0%
Coast Savings Financial, Inc. 10%, 3/1/00 Ba2 2,800 2,898
TOTAL FINANCE 18,458
HEALTH - 0.0%
MEDICAL FACILITIES MANAGEMENT - 0.0%
Tenet Healthcare Corp. 8 5/8%, 12/1/03 Ba1 7,480 7,949
TRANSPORTATION - 0.2%
AIR TRANSPORTATION - 0.2%
AMR Corp. 7 3/4%, 12/1/97 Baa3 26,000 26,415
TOTAL NONCONVERTIBLE BONDS 222,247
TOTAL CORPORATE BONDS
(Cost $534,127) 564,122
CASH EQUIVALENTS - 7.6%
SHARES VALUE (NOTE 1)
(000S)
Taxable Central Cash Fund (c)
(Cost $1,183,157) 1,183,157,248 $ 1,183,157
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $12,376,231) $ 15,555,460
LEGEND
1. Non-income producing
2. Standard & Poor's credit ratings are used in the absence of a rating by
Moody's Investors Service, Inc.
3. At period end, the seven-day yield on the Taxable Central Cash Fund was
5.46%. The yield refers to the income earned by investing in the fund over
the seven-day period, expressed as an annual percentage.
4. Debt obligation initially issued in zero coupon form which converts to
coupon form at a specified rate and date.
5. Affiliated company (see Note 6 of Notes to Financial Statements).
6. 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 $277,220,000 or 1.8% 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 89.8%
United Kingdom 3.7
Netherlands 1.7
France 1.3
Sweden 1.2
Others (individually less than 1%) 2.3
TOTAL 100.0%
INCOME TAX INFORMATION
At November 30, 1996, the aggregate cost of investment securities for
income tax purposes was $12,381,339,000. Net unrealized appreciation
aggregated $3,174,121,000, of which $3,353,110,000 related to appreciated
investment securities and $178,989,000 related to depreciated investment
securities.
The fund hereby designates approximately $112,580,000 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 AMOUNT) NOVEMBER 30, 1996

ASSETS

Investment in securities, at value (cost $12,376,231) - $ 15,555,460
See accompanying schedule

Cash 21

Receivable for investments sold 31,881

Receivable for fund shares sold 14,649

Dividends receivable 29,332

Interest receivable 11,505

Other receivables 356

TOTAL ASSETS 15,643,204

LIABILITIES

Payable for investments purchased $ 11,627

Payable for fund shares redeemed 25,904

Accrued management fee 6,362

Other payables and accrued expenses 3,285

TOTAL LIABILITIES 47,178

NET ASSETS $ 15,596,026

Net Assets consist of:

Paid in capital $ 11,526,617

Undistributed net investment income 70,992

Accumulated undistributed net realized gain (loss) on 819,191
investments and foreign currency transactions

Net unrealized appreciation (depreciation) on 3,179,226
investments and assets and liabilities in foreign
currencies

NET ASSETS, for 619,727 shares outstanding $ 15,596,026

NET ASSET VALUE, offering price and redemption price per $25.17
share ($15,596,026 (divided by) 619,727 shares)

</TABLE>

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED NOVEMBER 30, 1996

INVESTMENT INCOME $ 283,190
Dividends (including $2,415 received from affiliated
issuers)

Interest 107,115

TOTAL INCOME 390,305

EXPENSES

Management fee $ 69,271

Transfer agent fees 28,060

Accounting fees and expenses 828

Non-interested trustees' compensation 50

Custodian fees and expenses 490

Registration fees 796

Audit 98

Legal 81

Miscellaneous 134

Total expenses before reductions 99,808

Expense reductions (1,273) 98,535

NET INVESTMENT INCOME 291,770

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

Investment securities (including realized gain (loss) of 828,708
$2,325 on sales of investments in affiliated issuers)

Foreign currency transactions (99) 828,609

Change in net unrealized appreciation (depreciation) on:

Investment securities 1,678,794

Assets and liabilities in foreign currencies 43 1,678,837

NET GAIN (LOSS) 2,507,446

NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 2,799,216
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,
1996 1995

INCREASE (DECREASE) IN NET ASSETS

Operations $ 291,770 $ 227,830
Net investment income

Net realized gain (loss) 828,609 349,107

Change in net unrealized appreciation (depreciation) 1,678,837 1,499,475

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 2,799,216 2,076,412
FROM OPERATIONS

Distributions to shareholders (257,012) (189,161)
From net investment income

From net realized gain (347,350) (351,737)

TOTAL DISTRIBUTIONS (604,362) (540,898)

Share transactions 4,678,475 4,531,327
Net proceeds from sales of shares

Reinvestment of distributions 583,372 521,445

Cost of shares redeemed (3,413,375) (2,640,770)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 1,848,472 2,412,002
FROM SHARE TRANSACTIONS

TOTAL INCREASE (DECREASE) IN NET ASSETS 4,043,326 3,947,516

NET ASSETS

Beginning of period 11,552,700 7,605,184

End of period (including undistributed net investment $ 15,596,026 $ 11,552,700
income of $70,992 and $36,874, respectively)

OTHER INFORMATION
Shares

Sold 206,780 232,585

Issued in reinvestment of distributions 26,774 28,726

Redeemed (150,529) (134,237)

Net increase (decrease) 83,025 127,074

</TABLE>

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

1996 1995 1994 B 1993 1992

SELECTED PER-SHARE DATA

Net asset value, beginning $ 21.53 $ 18.57 $ 18.85 $ 16.57 $ 13.87
of period

Income from Investment
Operations

Net investment income .48 .42 .37 .44 .40

Net realized and 4.23 3.80 .53 2.62 2.75
unrealized gain (loss)

Total from investment 4.71 4.22 .90 3.06 3.15
operations

Less Distributions

From net (.43) (.40) (.47) (.41) (.32)
investment income

From net realized gain (.64) (.86) (.71) (.37) (.13)

Total distributions (1.07) (1.26) (1.18) (.78) (.45)

Net asset value, end $ 25.17 $ 21.53 $ 18.57 $ 18.85 $ 16.57
of period

TOTAL RETURN A 22.75% 24.13% 4.91% 19.08% 23.18%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period $ 15,596 $ 11,553 $ 7,605 $ 4,815 $ 1,942
(in millions)

Ratio of expenses to .73% .76% .83% .89% 1.01%
average net assets

Ratio of expenses to .72% C .75% C .81% .88% 1.01%
average net assets after C C
expense reductions

Ratio of net investment 2.13% 2.37% 2.36% 2.69% 3.09%
income to average net
assets

Portfolio turnover rate 46% 45% 75% 55% 89%

Average commission rate D $ .0397

</TABLE>

A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
B EFFECTIVE DECEMBER 31, 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, NET INVESTMENT INCOME PER SHARE MAY
REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
C FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES (SEE NOTE 5 OF
NOTES TO FINANCIAL STATEMENTS).
D FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR SECURITY
TRADES
ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM PERIOD TO
PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED
IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES
MAY DIFFER.
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1996

15. 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 financial statements have
been prepared in conformity with generally accepted accounting principles
which permit management to make certain estimates and assumptions at the
date of the financial statements. The following summarizes the significant
accounting policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are readily
available are valued at the last sale price, or if no sale price, at the
closing bid price. Securities (including restricted securities) for which
exchange quotations are not readily available (and in certain cases debt
securities which trade on an exchange) are valued primarily using
dealer-supplied valuations or at their fair value as determined in good
faith under consistently applied procedures under the general supervision
of the Board of Trustees. Short-term securities with remaining maturities
of sixty days or less for which quotations are not readily available are
valued at amortized cost or original cost plus accrued interest, both of
which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Income receipts
and expense payments are translated into U.S. dollars at the prevailing
exchange rate on the respective dates of the transactions. Purchases and
sales of securities are translated into U.S. dollars at the contractual
currency exchange rates established at the time of each trade.
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, 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 included with the net realized and
unrealized gain or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes substantially all of its taxable income for
its fiscal year. The schedule of investments includes information regarding
income taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date,
except certain dividends from foreign securities where the ex-dividend date
may have passed, are recorded as soon as the fund is informed of the
ex-dividend date. Non-cash dividends included in dividend income, if any,
are recorded at
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
INVESTMENT INCOME - CONTINUED
the fair market value of the securities received. Interest income, which
includes accretion of original issue discount, is accrued as earned.
Investment income is recorded net of foreign taxes withheld where recovery
of such taxes is uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned 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, which may result in distribution
reclassifications, are primarily due to differing treatments for litigation
proceeds, 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 the per-share allocation between net investment income and realized
and unrealized gain (loss). Undistributed net investment income and
accumulated undistributed net realized gain (loss) on investments and
foreign currency transactions may include temporary book and tax basis
differences which will reverse in a subsequent period. Any taxable income
or gain remaining at fiscal year end is distributed in the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
16. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign securities. Losses may
arise from changes in the value of the foreign currency or if the
counterparties do not perform under the contracts' terms. The U.S. dollar
value of foreign currency contracts is determined using contractual
currency exchange rates established at the time of each trade. The cost of
the foreign currency contracts is included in the cost basis of the
associated investment.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with other
affiliated entities of Fidelity Management & Research Company (FMR), may
transfer uninvested cash balances into one or more joint trading accounts.
These balances are invested in one or more repurchase agreements that
mature in 60 days or less from the date of purchase for U.S. Treasury or
Federal Agency obligations.
2. OPERATING POLICIES - CONTINUED
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
Securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are marked-to-market
daily and maintained at a value at least equal to the principal amount of
the repurchase agreement (including accrued interest). FMR, the fund's
investment adviser, is responsible for determining that the value of the
underlying securities remains in accordance with the market value
requirements stated above.
TAXABLE CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by the
SEC, the fund may invest in the Taxable Central Cash Fund (the Cash Fund)
managed by FMR. The Cash Fund is an open-end money market fund available
only to investment companies and other accounts managed by FMR and its
affiliates. The Cash Fund seeks preservation of capital, liquidity, and
current income by investing in U.S. Treasury securities and repurchase
agreements for these securities, and may be utilized by the fund as an
additional cash management option. Dividends from the Cash Fund are
declared daily and paid monthly from net interest income. Income
distributions received by the fund are recorded as interest income.
RESTRICTED SECURITIES. The fund is permitted to invest in securities that
are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from registration
or to the public if the securities are registered. Disposal of these
securities may involve time-consuming negotiations and expense, and prompt
sale at an acceptable price may be difficult. At the end of the period the
fund had no investments in restricted securities (excluding 144A issues).
17. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $7,368,459,000 and $5,625,181,000, respectively.
18. 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 .2500% to .5200% for the period. In the event that these
rates were lower than the contractual rates in effect during the period,
FMR voluntarily implemented the above rates, as they resulted in the same
or a lower management fee. The annual individual fund fee rate is .20%. For
the period, the management fee was equivalent to an annual rate of .51% of
average net assets.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
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 its 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 $11,000 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 account fees and asset-based fees that vary according to
account size and type of account. FSC pays for typesetting, printing and
mailing of all shareholder reports, except proxy statements. For the
period, the transfer agent fees were equivalent to an annual rate of .20%
of average net assets.
ACCOUNTING FEES. FSC maintains the fund's accounting records. The fee is
based on the level of average net assets for the month plus out-of-pocket
expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $3,030,000 for the period.
19. EXPENSE REDUCTIONS.
FMR has directed certain portfolio trades to brokers who paid a portion of
the fund's expenses. For the period, the fund's expenses were reduced by
$1,166,000 under this arrangement.
In addition, the fund has entered into arrangements with its custodian and
transfer agent whereby interest earned on uninvested cash balances was used
to offset a portion of the fund's expenses. During the period, the fund's
custodian and transfer agent fees were reduced by $23,000 and $84,000,
respectively under these arrangements.
20. TRANSACTIONS WITH AFFILIATED COMPANIES.
An affiliated company is a company in which the fund has ownership of at
least 5% of the voting securities. Transactions during the period with
companies which are or were affiliates are as follows:
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES
AMOUNTS IN THOUSANDS
PURCHASE SALES DIVIDEND VALUE
AFFILIATE COST COST INCOME
Angerstein Underwriting Trust PLC $ - $ - $ 183 $ 12,897Berkley (W.R.)
Corp. - - - 53,705
Ferro Corp. 4,240 - 868 45,392Gryphon Holdings, Inc. - - - 7,739
Hornbeck Offshore Services Inc. - - - -
McDermott (J. Ray) SA 10,813 - - 65,083Russell Corp. 17,007 30,917
1,237 57,319
Ryerson Tull, Inc. Class A 185 - - 4,433Stewart & Stevenson Services,
Inc. 583 - - 41,790Syndicate Capital Trust PLC - - 77 7,946
Terra Nova (Bermuda) Holdings Ltd. 1,907 - 50 30,760 Western Atlas,
Inc. 24,360 - - 222,213
TOTALS $ 59,095 $ 30,917 $ 2,415 $ 549,277
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 statements of assets and liabilities,
including the schedules 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, 1996, the results of its
operations for the year then ended, and 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 at November 30, 1996 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.
/s/: Price Waterhouse LLP
PRICE WATERHOUSE LLP
Boston, Massachusetts
January 3, 1997
DISTRIBUTIONS

The Board of Trustees of Fidelity Equity-Income II Fund voted to pay to
shareholders of record at the opening of business on record date, the
following distributions derived from capital gains realized from sales of
portfolio securities, and dividends derived from net investment income:
PAY DATE RECORD DATE DIVIDENDS CAPITAL GAINS
12/30/96 12/27/96 $.15 $1.04
1/6/97 1/3/97 __ $.12
A total of 44% of the dividends distributed during the fiscal year
qualifies for the dividends-received deduction for corporate shareholders.
A total of 3.5% 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.
The fund will notify shareholders in January 1997 of the applicable
percentage for use in preparing 1996 income tax returns.
MANAGING YOUR INVESTMENTS

If more than one address is listed, please locate the address that is
closest to you. We'll give your correspondence immediate attention and send
you written confirmation upon completion of your request.
(LETTER_GRAPHIC)(LETTER_GRAPHIC)MAKING CHANGES
TO YOUR ACCOUNT
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(LETTER_GRAPHIC)(LETTER_GRAPHIC)FOR NON-RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
OVERNIGHT EXPRESS
Fidelity Investments
100 Crosby Parkway - KP2C
Covington, KY 41015-4399
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6I
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 193
Boston, MA 02210-0193
(LETTER_GRAPHIC)(LETTER_GRAPHIC)FOR RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6R
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.) Inc., London, England
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Bettina E. Doulton, Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
Robert H. Morrison, Manager,
Security Transactions
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
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 *
ADVISORY BOARD
William O. McCoy
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
* INDEPENDENT TRUSTEES
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Co.
Boston, MA
CUSTODIAN
Chase Manhattan Bank, N.A.
New York, NY
FIDELITY'S 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 Fund
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Exchanges/Redemptions 1-800-544-7777
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
(registered trademark)
TouchTone Xpress 1-800-544-5555
SM
AUTOMATED LINE FOR QUICKEST SERVICE