EXHIBIT (A)(1)
FIDELITY
(Registered trademark)
CALIFORNIA
TAX-FREE
FUNDS
ANNUAL REPORT
FEBRUARY 28, 1994
CONTENTS
PRESIDENT'S MESSAGE 3 NED JOHNSON ON MINIMIZING
TAXES
FIDELITY CALIFORNIA TAX-FREE
HIGH YIELD PORTFOLIO 4 PERFORMANCE
7 FUND TALK: THE MANAGER'S OVERVI
EW
10 INVESTMENT CHANGES
11 INVESTMENTS
24 FINANCIAL STATEMENTS
FIDELITY CALIFORNIA TAX-FREE
INSURED PORTFOLIO 28 PERFORMANCE
31 FUND TALK: THE MANAGER'S OVERVI
EW
34 INVESTMENT CHANGES
35 INVESTMENTS
45 FINANCIAL STATEMENTS
FIDELITY CALIFORNIA TAX-FREE
MONEY MARKET PORTFOLIO 49 PERFORMANCE
51 FUND TALK: THE MANAGER'S OVERVI
EW
53 INVESTMENT CHANGES
54 INVESTMENTS
63 FINANCIAL STATEMENTS
NOTES 67 FOOTNOTES TO THE FINANCIAL
STATEMENTS
REPORT OF INDEPENDENT
ACCOUNTANTS 71 THE AUDITOR'S OPINION
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUNDS. THIS REPORT IS NOT AUTHORIZED
FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUNDS UNLESS PRECEDED OR
ACCOMPANIED BY
AN EFFECTIVE PROSPECTUS. NEITHER THE FUNDS NOR FIDELITY DISTRIBUTORS
CORPORATION IS A
BANK, AND FUND SHARES ARE NOT BACKED OR GUARANTEED BY ANY BANK OR INSURED
BY THE
FDIC.
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
No one wants to pay more taxes than they have to. But a recent survey of
500 U.S. households, conducted by Fidelity and Yankelovich Partners, showed
that few people took steps to reduce their taxes under the new tax laws
that went into effect last year. In fact, many people were not completely
aware of the changes until they filed their 1993 tax returns.
Whether or not you're someone whose tax bill increased as a result of these
changes, it may make sense to consider ways to keep more of what you earn.
First, if your employer offers a 401(k) or 403(b) retirement savings plan,
consider enrolling. These plans are set up so you can make regular
contributions -
before taxes - to a retirement savings plan. They offer a disciplined
savings strategy, the ability to accumulate earnings tax-deferred, and
immediate tax savings. For example, if you earn $40,000 a year and
contribute 7% of your salary to your 401(k) plan, your annual contribution
is $2,800. That reduces your taxable income to $37,200 and, if you're in
the
28% tax bracket, saves you $784 in federal taxes. In addition, you pay no
taxes on any earnings until withdrawal.
It may be a good idea to contact your benefits office as soon as possible
to find out when you can enroll or increase your contribution. Most
employers allow employees to make changes only a few times each year.
Second, consider an IRA. Many people are eligible to make an IRA
contribution (up to $2,000) that is fully tax deductible. That includes
people who are not covered by company pension plans, or those within
certain income brackets. Even if you don't qualify for a fully deductible
contribution, any IRA earnings will grow tax-deferred until withdrawal.
Third, consider adding to your tax-free investments, either municipal bonds
or municipal bond funds. Often these can provide higher after-tax yields
than comparable taxable investments. For example, if you're in the new 36%
federal income tax bracket and invest $10,000 in a taxable investment
yielding 7%, you'll pay $252 in federal taxes and receive $448 in income.
That same $10,000 invested in a tax-free bond fund yielding 5.5% would
allow you to keep $550 in income.
These are three investment strategies that could help lower your tax bill
in 1994. If you're interested in learning more, please call us at
1-800-544-8888 or visit a Fidelity Investor Center. We look forward to
talking with you.
Best regards,
Edward C. Johnson 3d, Chairman
FIDELITY CALIFORNIA TAX-FREE HIGH YIELD PORTFOLIO
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each figure
includes changes in a fund's share price, reinvestment of any dividends (or
income) and capital gains (the profits the fund earns when it sells bonds
that have grown in value). You can also look at the fund's income. If
Fidelity had not reimbursed certain fund expenses during the periods shown,
the total returns, dividends and yields would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED FEBRUARY 28, 1994 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
California Tax-Free High Yield 5.41% 56.05% 144.91%
Lehman Brothers Municipal Bond Index 5.54% 59.02% n/a
Average California Tax-Exempt
Municipal Bond Fund 5.39% 54.72% n/a
Consumer Price Index 2.52% 20.64% 41.47%
CUMULATIVE TOTAL RETURNS reflect actual performance over a set period - in
this case, one year, five years, or since the fund started on July 7, 1984.
For example, if you invested $1,000 in a fund that had a 5% return over the
past year, you would end up with $1,050. You can compare these figures to
the performance of the Lehman Brothers Municipal Bond Index - a broad gauge
of the municipal bond market. To measure how the fund stacked up against
its peers, you can look at the average California tax-exempt municipal bond
fund, which reflects the performance of 75 California tax-exempt municipal
bond funds tracked by Lipper Analytical Services. Both benchmarks include
reinvested dividends and capital gains, if any. Comparing the fund's
performance to the consumer price index helps show how your fund did
compared to inflation. (The periods covered by the CPI numbers are the
closest available match to those covered by the fund.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 28, 1994 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
California Tax-Free High Yield 5.41% 9.31% 9.72%
Lehman Brothers Municipal Bond Index 5.54% 9.72% n/a
Average California Tax-Exempt
Municipal Bond Fund 5.39% 9.12% n/a
Consumer Price Index 2.52% 3.82% 3.65%
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
$27,312
$24,247
'94
$10,000 OVER LIFE OF FUND: Let's say you invested $10,000 in Fidelity
California Tax-Free High Yield Portfolio on July 31, 1984, shortly after
the fund started. As the chart shows, by February 28, 1994, the value of
your investment would have grown to $24,247 - a 142.47% increase on your
initial investment. For comparison, look at how the Lehman Brothers
Municipal Bond Index did over the same period. With dividends reinvested,
the same $10,000 would have grown to $27,312 - a 173.12% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. Bond prices, for
example, move in the
opposite direction of interest
rates. In turn, the share price,
return, and yield of a fund
that invests in 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)
INCOME
YEARS ENDED FEBRUARY 28, 1994 1993 1992 1991 1990
Income return 5.82% 6.89% 6.88% 7.00% 7.18%
Capital gain return 2.24% 0.00% 0.00% 0.00% 0.00%
Change in share price -2.65% 7.34% 2.66% 0.71% 2.66%
Total return 5.41% 14.23% 9.54% 7.71% 9.84%
INCOME returns, capital gain returns, and changes in share price are all
part of a bond fund's total return. An income return reflects the dividends
paid by the fund. A capital gain return reflects the amount paid by the
fund to shareholders based on the profits it has from selling bonds that
have grown in value. Both returns assume the dividends or gains are
reinvested. Changes in the fund's share price include changes in the prices
of the bonds owned by the fund.
DIVIDENDS AND YIELD
PERIODS ENDED FEBRUARY 28, 1994 PAST 30 PAST 6 PAST 1
DAYS MONTHS YEAR
Dividends per share n/a 35.64(cents) 71.93(cents)
Annualized dividend rate n/a 5.74% 5.79%
Annualized yield 4.99% n/a n/a
Tax-equivalent yield 8.76% n/a n/a
DIVIDENDS per share show the income paid by the fund for a set period. If
you annualize this number, based on an average share price of $12.52 over
the past six months and $12.43 over the past year, you can compare the
fund's income over these two periods. The 30-day annualized YIELD is a
standard formula for all funds based on the yields of the bonds in the
fund, averaged over the past 30 days. This figure shows you the yield
characteristics of the fund's investments at the end of the period. It also
helps you compare funds from different companies on an equal basis. The
tax-equivalent yield shows what you would have to earn on a taxable
investment to equal the fund's tax-free yield, if you're in the 43.04%
combined effective 1994 federal and state tax bracket.
FIDELITY CALIFORNIA TAX-FREE HIGH YIELD PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
Bond investments - including
tax-free issues - provided solid
returns for the 12 months ended
February 28, 1994, despite a
dramatic downturn in February.
Falling interest rates pushed up
bond prices steadily through
mid-October, when the yield on the
benchmark 30-year Treasury bond
reached a historic low of 5.79%. By
year-end, a strengthening economy
had fueled mild inflation fears. That
pushed up the yield on the 30-year
bond to 6.35% on December 31,
which forced investors to give back
some of their earlier profits. Inflation
jitters eased and bond yields
dropped in January. However,
when the Federal Reserve Bank
raised short-term interest rates in
an attempt to control inflation on
February 4, investors reacted
negatively. At the end of February,
the yield on the 30-year bonds was
6.66%, about 38 basis points
higher than at the beginning of the
month. Over the year, higher
federal income taxes boosted
demand for municipal bonds. But
municipal bond prices were hurt by
the Fed's action in February and by
record new issuance, which kept
supplies high and dampened
prices. The return on the Lehman
Brothers Municipal Bond Index, a
broad measure of the tax-free
market, rose 5.54%. By
comparison, the Lehman Brothers
Aggregate Bond Index, which
tracks investment-grade taxable
bonds, returned 5.40%. Globally,
falling interest rates and low
inflation drove good annual returns
in Europe, Japan, and most
emerging markets, although many
of these markets fell in February
along with the U.S. bond market.
The Salomon Brothers World
Government Bond Index - which
includes U.S. issues - returned
9.34%, while the J.P. Morgan
Emerging Markets Bond Index was
up a dramatic 29.46%.
An interview with John Haley,
Portfolio Manager of Fidelity California Tax-Free High Yield
Portfolio
Q. JOHN, HOW DID THE FUND PERFORM?
A. About average. The fund had a total return of 5.41% for the year ended
February 28, 1994. The average California tax-free bond fund posted a total
return of 5.39% during the period, according to Lipper Analytical Services.
Q. WHAT ACCOUNTED FOR THE FUND'S PERFORMANCE?
A. First, having a somewhat longer duration than that of the typical
California tax-free bond fund. A longer duration makes a fund's share price
more sensitive to interest rate changes. I extended the fund's duration
from about 7.5 years to 8.9 years during the year because I expected
interest rates would continue to decline and drive bond prices higher.
That's what happened during most of the period, although the fund gave back
some gains when interest rates rebounded in February. Second, the fund also
held several issues that were pre-refunded during the period - that is,
their issuers set aside a pool of Treasury securities to pay the remaining
interest and principal due to bondholders. As a result, the bonds' credit
ratings went from A to Aaa, causing investors to bid their prices higher.
Plus, their maturities shortened, which also helped boost their prices.
Q. WHY DID YOU INCREASE THE FUND'S INVESTMENT IN STATE GENERAL OBLIGATION
BONDS (GOS) AND STATE LEASE BONDS?
A. During the early part of the year I avoided state GOs, which are backed
by the taxing power of the issuer, as well as California lease bonds, which
are backed by leases paid by the state. The state's economy was still
struggling, and I believed prices of those issues would lag bonds with
higher ratings. That proved to be true. But last fall I increased the
fund's investment in California GOs, lease bonds and other bonds backed by
the state to around 10% because I thought the California economy had hit
bottom. Also, I increased the fund's stake in bonds rated A or lower, which
are expected to benefit from improvements in the state's economy. These
decisions reduced the average credit rating of the fund's holdings. At the
end of February, about 45% of the fund's assets are rated Aa or Aaa. As the
economy begins to improve, those state GOs and lease bonds should
outperform issues with higher credit ratings.
Q. AT THE END OF FEBRUARY, NEARLY 20% OF THE FUND'S INVESTMENTS WERE IN
HEALTH-CARE BONDS, UP FROM 17.2% A YEAR EARLIER. ARE YOU CONCERNED THAT
HEALTH-CARE REFORM WILL HURT THOSE ISSUERS?
A. We are cautious on health care because the Clinton plan could affect the
health care sector. However, the issues I choose are mainly strong
hospitals that are expected to survive and potentially benefit from any
shake-up likely to occur. In fact, a number carry ratings of Aa or Aaa.
Q. DID THE LOS ANGELES EARTHQUAKE AFFECT THE FUND'S PERFORMANCE?
A. Not much. During the past two or three years I de-emphasized issuers in
the Los Angeles area because the economy in southern California has been
especially sluggish. As a result, we only held one or two bonds of issuers
in the vicinity of the earthquake. I believe in geographic diversification,
so the fund's investments are spread across different regions of the state.
That should offer some protection against future natural disasters.
Q. WHAT'S YOUR OUTLOOK FOR THE TAX-EXEMPT BOND MARKET?
A. The economy will probably show modest growth and inflation seems likely
to remain under control, so I don't expect interest rates to rise
dramatically from here. But interest rates aren't likely to fall much more
either, so gains in the bond market won't be driven by falling rates. The
tax-exempt market will probably benefit from a lower supply of new issues.
Also, demand for tax-exempt bonds will likely increase as investors realize
that the new, higher federal income tax rates. The combination of lower
supply and higher demand should help support prices in the tax-exempt
market.
Q. WHAT ABOUT THE CALIFORNIA TAX-EXEMPT MARKET?
A. I still feel that California bonds are attractive because the state's
economy is showing signs that it is set to begin a recovery. As that
happens, state GOs and lease bonds, should be especially strong performers,
because their credit quality is closely linked to the economy. Those issues
may be volatile over the next several months as the state goes through its
budget process. But I'll probably take advantage of any price declines to
buy more.
FUND FACTS
GOAL: to provide high current
income exempt from
California state and federal
income taxes
START DATE: July 7, 1984
SIZE: as of February 28, 1994
over $575 million
MANAGER: John Haley, since
September, 1985; manager,
Spartan California Tax-Free
High Yield Portfolio, since
December 1989; Fidelity
California Tax-Free Insured
Portfolio, since September
1986; Fidelity Advisor
Tax-Exempt Portfolio, since
1985
(checkmark)
JOHN HALEY ON THE FUND'S
STRATEGY:
"The fund can invest one-third
of its holdings in securities
rated below
investment-grade. However
during recent years, there
have been few attractive
opportunities in this area. At
the same time, I expected a
more severe economic
downturn in the California
economy than most
observers. As a result, I stuck
mainly with highly-rated
issues. But during the past six
months I have begun to
identify factors that suggest
the California economy is
reaching a bottom. As a
result, I've been increasing
the fund's investment in
higher-yielding issues. As the
economy improves, they
should be strong performers."
(bullet) As of February 28, 1994
34.5%
of the funds investments were
in Aaa-rated bonds, 39.1% in
Aa- and A-rated bonds, and
15.2% in bonds rated Baa or
below.
(bullet) The fund's duration as of
February 28, 1994 was 8.9
years. That means the fund's
share price could decline
roughly 8.9% if interest rates
rose one percentage point,
and rise 8.9% if rates fell one
percentage point.
FIDELITY CALIFORNIA TAX-FREE HIGH YIELD PORTFOLIO
INVESTMENT CHANGES
TOP FIVE SECTORS AS OF FEBRUARY 28, 1994
% OF FUND'S INVESTMENT % OF FUND'S INVESTMENT
S S
IN THESE SECTORS
6 MONTHS AGO
Lease Revenue 21.8 19.7
Health Care 20.5 15.3
Special Tax 20.0 22.2
Electric Revenue 8.8 12.5
Escrowed/Pre-Refunded 6.1 4.9
AVERAGE YEARS TO MATURITY AS OF FEBRUARY 28, 1994
6 MONTHS AGO
Years 21.0 20.1
AVERAGE YEARS TO MATURITY SHOWS THE AVERAGE TIME UNTIL THE PRINCIPAL OF THE
BONDS IN THE FUND IS EXPECTED TO BE REPAID, WEIGHTED BY DOLLAR AMOUNT.
DURATION AS OF FEBRUARY 28, 1994
6 MONTHS AGO
Years 8.9 8.8
DURATION SHOWS HOW MUCH A BOND'S PRICE FLUCTUATES WITH CHANGES IN INTEREST
RATES. IF RATES RISE 1%, FOR EXAMPLE, THE SHARE PRICE OF A FUND WITH A
FIVE-YEAR DURATION WILL FALL 5%.
QUALITY DIVERSIFICATION AS OF FEBRUARY 28, 1994
(MOODY'S RATINGS)
Row: 1, Col: 1, Value: 34.5
Row: 1, Col: 2, Value: 39.1
Row: 1, Col: 3, Value: 15.2
Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: 11.2
Aaa 34.5%
Aa, A 39.1%
Baa 15.2%
Ba, B 0%
Non-rated 11.2%
THIS CHART EXCLUDES SHORT-TERM INVESTMENTS. WHERE MOODY'S RATINGS ARE NOT
AVAILABLE, WE HAVE USED S&P RATINGS.
NON-RATED SECURITIES CONSIDERED TO BE BAA OR BETTER BY FIDELITY ARE 6.9% OF
THE FUNDS LONG TERM INVESTMENTS.
FIDELITY CALIFORNIA TAX-FREE HIGH YIELD PORTFOLIO
INVESTMENTS/FEBRUARY 28, 1994
(Showing Percentage of Total Value of Investments)
MUNICIPAL BONDS - 98.3%
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - 96.1%
Alameda County Ctfs. of Prtn. Rfdg.
(Santa Rita Jail Proj.) 5.375% 6/1/09,
(MBIA Insured) Aaa $ 2,250,000 $ 2,210,625 010891KG
Alameda Hsg. Auth. Multi-Family Hsg. Rev.
(Independence Apts.) Series A, 7.50%
2/20/31, (GNMA Coll.) AAA 2,650,000 2,809,000 010789AA
Anaheim Elec. Rev. 3.50% 10/1/94 Aa 2,150,000 2,160,750 032542GU
Anaheim Pub. Fing. Auth. Tax Allocation
Rev. (Reg. Rites) 10.27% 12/1/18,
(MBIA Insured)(c) Aaa 1,500,000 1,788,750 032559AV
Arcadia Hosp. Rev. (Methodist Hosp. of
Southern California) 6.625% 11/15/22 A 1,650,000 1,755,188 039060BQ
Berkeley Health Facs. Rev. Rdfg. (Alta Bates
Med. Ctr.) Series A, 6.55% 12/1/22 Baa1 3,500,000 3,513,125 084134AH
Brea & Olinda Unified School Dist.
(Brea H-O-P-E, Inc. Brea High School
Ctfs. of Prtn.) 7.70% 8/1/18 - 1,500,000 1,575,000 106331KM
Buena Park Commty. Redev. Agcy. Tax
Allocation Rfdg. (Central Business
Dist. Proj.) 7.10% 9/1/14 BBB+ 2,000,000 2,115,000 119147CN
Burbank Redev. Agcy. Tax Allocation
Series A:
6% 12/1/13 Baa1 1,750,000 1,717,188 120823DZ
6% 12/1/23 Baa1 1,975,000 1,925,625 120823EA
California Dept. Wtr. Resource Central
Valley Rev. Series G, 9.60% 12/1/12,
(Pre-Refunded to 12/1/95 @ 102)(d) Aaa 2,250,000 2,404,688 130663ND
California Edl. Facs. Auth. Rev.
(Mills College) 6.875% 9/1/22 Baa1 1,275,000 1,348,313 130174EP
California Gen. Oblig. 4.75%, 9/1/23 Aa 2,000,000 1,727,500 130627BZ
California Health Facs. Auth. Rev.
(St. Joseph Health Sys.):
Rfdg. (Alexian Brothers, San Jose)
(MBIA Insured):
7.05% 1/1/09 Aaa 4,500,000 5,000,625 13033H4M
7.125% 1/1/16 Aaa 2,510,000 2,798,650 13033H4N
Rfdg. (Catholic Healthcare West)
4.75% 7/1/19(MBIA Insured) Aaa 2,000,000 1,757,500 13033AAU
Rfdg. (Sutter Commty. Sacramento Hosp.):
9.125% 1/1/05 A1 1,250,000 1,328,125 130326VE
9.25% 1/1/13 A1 4,000,000 4,255,000 130326VJ
(Alexian Brothers San Jose, Inc.)
Series A, 9.40% 1/1/16,
(Pre-Refunded to 1/1/95 @ 102)(d) AAA 1,850,000 1,979,500 13033HBR
(Centinela Hosp. Med. Ctr.)
Series A, 9.375% 9/1/15,
(MBIA Insured) Aaa 1,850,000 2,044,250 13033HAW
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
California Health Facs. Auth. Rev. - continued
(St. Joseph Health Sys.): - continued:
(Children's Hosp.) 7% 7/1/13,
(MBIA Insured) Aaa $ 3,250,000 $ 3,623,750 13033H6L
(Daughters of Charity-Queen Angels)
Series A, 9.25% 11/1/15,
(Pre-Refunded to 5/1/96 @ 102)(d) Aaa 1,300,000 1,472,250 13033HHC
(Daughters of Charity-St. Vincents Hosp.)
Series A, 9.25% 11/1/15 Aa 1,000,000 1,117,500 13033HHD
(Gould Med. Foundation)
Series A, 7.30% 4/1/20 A+ 3,000,000 3,476,250 13033JBW
(Kaiser Permanente Health Sys.):
Series A:
0% 10/1/09 Aa2 7,140,000 2,980,950 13033H2Q
0% 10/1/10 Aa2 3,795,000 1,484,794 13033H2T
0% 10/1/12 Aa2 14,990,000 5,134,075 13033H2V
9.125% 10/1/15 Aa2 2,500,000 2,734,375 13033HCJ
(Robert F. Kennedy Med. Ctr.)
Series A, 7.75% 3/1/14 A+ 2,980,000 3,278,000 13033HUP
(Sacramento Med. Foundation)
Series F, 7.875% 6/1/18 A+ 1,000,000 1,110,000 13033HXJ
(St. Elizabeth Hosp. Proj.) 6.30%
11/15/15 A1 1,000,000 1,035,000 13033JL4
(San Diego Hosp. Assoc.)
Series A, 6.95% 10/1/21 A1 1,250,000 1,367,188 13033JTM
Series 1984 B, 9.875% 7/1/14,
(Pre-Refunded to 7/1/95 @ 101)(d) AAA 2,750,000 3,004,375 130326NC
California Hsg. Fin. Agcy. Rev. (Home Mtg.):
Series A, 8.10% 8/1/16 Aa 1,475,000 1,585,625 130329V9
Series F, 7.875% 8/1/19 Aa 1,175,000 1,249,906 13033CEC
California Poll. Cont. Fing. Solid Waste Disp.
Rev. (North County Recycling Ctr.)
Series A, 6.75% 7/1/11,
LOC Union Bank of Switzerland Aaa 2,000,000 2,185,000 130536BQ
California Pub. Cap. Impt. Fing. Auth. Rev.
(Pooled Proj.) Series B, 8.10% 3/1/18,
(MBIA Insured) Aaa 990,000 1,084,050 130552AS
California Pub. Wks. Board Lease Rev.:
Rfdg. (Dept. Corrections St. Prisons)
Series A, 5% 12/1/19,
(AMBAC Insured) Aaa 2,500,000 2,281,250 13068GPA
(California University Proj.) Series A:
6.30% 12/1/09, (AMBAC Insured) Aaa 2,000,000 2,122,500 13068GKV
5.50% 6/1/10 A1 1,915,000 1,891,063 13068GRE
5.50% 6/1/14 A1 8,550,000 8,250,750 13068GRB
5% 6/1/23 A1 2,500,000 2,190,625 13068GRD
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
California Pub. Wks. Board Lease Rev.: - continued
(Dept. Correction State Prisons, Susanville)
Series D:
5.25% 6/1/15 (CGIC Insured) Aaa $ 2,000,000 $ 1,915,000 13068GUA
5.375% 6/1/18 A1 1,500,000 1,398,750 13068GTQ
(Dept. Corrections State Prisons, Medera)
Series E, 5.50% 6/1/15 A1 1,400,000 1,351,000 13068GVV
(Univ. of California Projs.):
Series A, 5.50% 6/1/14 A1 5,000,000 4,768,750 13068GUX
Series B, 5.25% 6/1/07 A1 2,965,000 2,887,169 13068GUR
California Statewide Commty. Dev. Auth.
8.83% 7/1/13, (MBIA Insured) (c) Aaa 2,000,000 1,965,000 130909JH
California Statewide Commtys. Dev. Corp.
Ctfs. of Prtn.:
Rfdg. (Insured Health Facs.) (Eskaton, Inc.)
5.875% 5/1/20 A+ 4,000,000 3,920,000 130909GW
Rfdg. (Insured Hosp.) (Triad Healthcare):
6.25% 8/1/06 A+ 2,000,000 2,027,500 130909CM
6.50% 8/1/22 A+ 1,500,000 1,524,375 130909CR
(Childrens) 6%, 6/1/10
(MBIA Insured) Aaa 2,835,000 2,966,119 130909NH
(J. Paul Getty) 5% 10/1/23 Aaa 1,750,000 1,585,937 130907FM
(Odd Fellows) 5.375% 10/1/13 A+ 2,500,000 2,325,000 130907EP
(St. Joseph Health Sys.)
5.50% 7/1/23 Aa 3,000,000 2,835,000 130909GH
(Sisters of Charity Leavenworth)
5% 12/1/23 Aa 4,375,000 3,850,000 130909PR
(Villaview Commty. Hosp., Inc.)
Series A, 7% 9/1/09 A+ 1,000,000 1,086,250 130907AX
5.50% 10/1/23 A+ 2,000,000 1,865,000 130907EQ
California Univ. Hsg. Sys. Series A, 5%
11/1/14, (MBIA Insured) Aaa 2,435,000 2,252,374 914113RP
Campbell Ctfs. of Prtn.:
Rfdg. (Civic Center Proj.) 6% 10/1/18 A 2,400,000 2,376,000 134111BK
(Campbell Commty. Ctr.) 8.90% 8/1/05,
(Pre-Refunded to 8/1/95 @ 102)(d) Aaa 1,640,000 1,775,300 134111AB
Carson Redev. Agcy. Redev. Proj. Area #1
Tax Allocation:
6.375% 10/1/12 Baa1 1,500,000 1,486,875 145750CZ
6.375% 10/1/16 Baa1 1,000,000 985,000 145750DA
Carson Redev. Spl. Tax 6% 10/1/13 Baa 1,750,000 1,708,438 145750DP
Central California Jt. Pwrs. Health Fing.
Auth. Ctfs. of Prtn.:
Rfdg. (Commty. Hosp. of Central California
Proj.) 5% 2/1/23 A 1,500,000 1,297,500 152757AR
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Central California Jt. Pwrs. Health Fing.
Auth. Ctfs. of Prtn.: - continued
(Commty. Hosp. of Central California Proj.)
5.25% 2/1/13 A $ 4,000,000 $ 3,675,000 152757AQ
Central Valley Fing. Auth. Cogeneration Proj. Rev.
(Carson Ice Generation Proj.) 6.10%
7/1/13 BBB- 1,000,000 988,750 155689AK
Central Valley Fing. Auth. Rev.
(Cogeneration Proj.) (Carson Ice Gen. Proj.)
6% 7/1/09 BBB- 1,750,000 1,723,750 155689AG
Compton Commty. Redev. Agcy. Tax
Allocation Rfdg. (Walnut Ind. Park Proj.)
7.50% 8/1/13, (AMBAC Insured) Aaa 5,000,000 5,662,500 204712DR
Contra Costa County Ctfs. of Prtn.
(Merrithew Mem. Hosp.):
Cap. Appreciation 0%, 11/1/13 A1 6,805,000 2,143,575 21223TEJ
0% 11/1/07 A1 4,615,000 2,220,969 21223TEC
Contra Costa Home Mtg. Fin. Auth. Home
Mtg. Rev. 0% 9/1/17,
(MBIA Insured) Aaa 12,500,000 3,156,250 212216CA
Del Norte County Pub. Wks. Rev. Rfdg.
(Dept. of Corrections) 5.125%, 12/1/08 A1 1,500,000 1,438,125 13068GSY
Del Norte County Rev. Rfdg. (Department of
Corrections) 5.20%, 12/1/09 A1 4,300,000 4,122,625 13068GSZ
Desert Hosp. Rev. Ctfs. of Prtn.
(Desert Hosp. Corp.) Series 1992,
10.029% 7/28/20,
(Cap. Guaranty Insured)(c) Aaa 4,000,000 4,645,000 25041MAZ
Duarte Ctfs of Prtn. (City of Hope Nat'l.
Medical Ctr.) 6.25% 4/1/23 Baa1 2,000,000 2,025,000 263584CS
Duarte Redev. Agcy. Tax Allocation:
(Huntington Drive-PH 1 Redev. Proj.)
9.20% 11/1/01, (Pre-Refunded to
11/1/95 @ 102)(d) - 735,000 815,850 263590BN
(Huntington Drive-PH 2 Redev. Proj.)
9.25% 11/1/10, (Pre-Refunded to
11/1/95 @ 102)(d) - 1,640,000 1,822,450 263590BQ
Eastern Muni. Wtr. Dist. Wtr. & Swr. Rev.
Ctfs. of Prtn. 6.75% 7/1/12,
(FGIC Insured) Aaa 1,600,000 1,826,000 276771AR
Fontana Redev. Agcy. Tax Allocation Rfdg.
(Yurupa Hills) Series 1992 A, 7.10%
10/1/23 BBB 2,495,000 2,713,313 344619CL
Fontana Unified School Dist. Rfdg.,
(AMBAC Insured):
0% 7/1/14 Aaa 1,880,000 582,800 344640HE
0% 7/1/15 Aaa 1,880,000 549,900 344640HF
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Foster City Pub. Fing. Auth. Rev.
(Foster City Commty. Rev. Proj.) Series A:
6% 9/1/06 A- $ 1,355,000 $ 1,377,019 350057AN
6% 9/1/07 A- 1,440,000 1,450,800 350057AQ
Fountain Valley Agcy. for Commty. Dev. Tax
Allocation (Ind. Area Redev. Proj.) 9.10%
1/1/15 BBB+ 1,745,000 1,897,688 350771BD
Garden Grove Agcy. Commty. Dev. Tax
Allocation Rfdg. (Garden Grove Commty.
Proj.) 5.70% 10/1/13 A 2,000,000 1,927,500 365251CN
Industry Urban Ind. Dev. Agcy.:
Rfdg. (Civic Recreational Proj.#1)
Series A, 7.375% 5/1/12 - 11,250,000 12,164,063 456567MG
(Civic Recreational Proj.#1-B) 7.375%
5/1/15, (Unrefunded Balanced) - 245,000 264,906 456567QS
Intercommunity Hosp. Fing. Auth. Ctfs. of
Prtn. 9.75% 8/1/15, (Pre-Refunded
to 8/1/95 @ 103)(d) AAA 4,000,000 4,460,000 45853JAJ
Intermodal Container Transfer Facs. Joint Pwr.
Auth. Rev. Rfdg. Series 1989 A, 7.70%
11/1/14, LOC Industrial Bank of Japan,
(BIG Insured) Aa3 1,500,000 1,683,750 458925AK
Irvine Ranch Wtr. Dist. Joint Pwr. Agcy.
Local Pool Rev. 8.25% 8/15/23 BBB 15,675,000 17,242,500 463656BE
Kern County High School Dist. Gen. Oblig.
7% 8/1/09 A1 1,090,000 1,261,675 492246AT
La Habra Ctfs. of Prtn. (La Habra and View
Park) (Acquisition Proj.) 6.625% 11/1/22,
(FSA Insured) Aaa 1,000,000 1,102,500 503423BA
Livermore Redev. Agcy. Tax Allocation Rev.
(Livermore Redev. Proj.) Series A, 7.75%
8/1/09 - 1,000,000 1,042,500 53819TAL
Local Gov't. Fin. Auth. Rev.
(Oakland Central Dist.) 0% 9/1/08 Aaa 3,710,000 1,646,313 539558FF
Loma Linda Hosp. Rev. (Loma Linda Univ.
Med. Ctr Proj.) Series B, 9% 12/1/12 BBB 1,550,000 1,710,813 541482BV
Los Angeles Ctfs. of Prtn.:
(Health Facs. Construction Loan)
(Bay Harbor Hosp.) 7.30% 4/1/20 A+ 2,000,000 2,192,500 544358GV
(Solheim Lutheran Home, Inc.)
8.125% 11/1/17 A+ 2,000,000 2,232,500 544358EP
Los Angeles Commty. Redev. Agcy. (Central Bus.
Dist.) Series E, 8.85% 7/1/10 A- 4,000,000 4,310,000 544389HE
Los Angeles County Cap. Asset Leasing
Corp. Leasehold Rev. 4.05% 12/1/09,
(AMBAC Insured) Aaa 4,030,000 4,130,750 544900CE
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Los Angeles County Ctfs. of Prtn.:
(Cap. Appreciation):
0% 9/1/10 A $ 2,980,000 $ 1,102,600 5446634F
0% 3/1/18 A 3,000,000 675,000 5446634W
0% 9/1/19 A 9,190,000 1,883,950 5446634Z
0% 3/1/20 A 1,690,000 335,888 5446634C
(Cap. Appreciation Correctional Facs.)
0% 9/1/12, (MBIA Insured) Aaa 3,575,000 1,246,781 544663G9
(Correctional Facs.) 0%, 9/1/10,
(MBIA Insured) Aaa 3,770,000 1,479,725 544663G7
(Disney Parking):
0%, 9/1/08 A 2,030,000 898,275 5446633Y
0%, 3/1/11 A 3,950,000 1,397,313 5446634G
0% 3/1/13 A 2,835,000 885,938 5446634L
0% 9/1/15 A 3,800,000 1,007,000 5446634R
0% 9/1/17 A 3,370,000 779,313 5446634V
Los Angeles County Trans. Commission Sales Tax
Rev. 6.25% 7/1/13, (MBIA Insured) Aaa 2,250,000 2,373,750 545170JE
Los Angeles Dept. Wtr. & Pwr. Elec. Plant Rev.
9.20% 10/15/25, (Pre-Refunded to
10/15/95 @ 103) (d) Aa 1,500,000 1,676,250 544508AQ
Los Angeles Hbr. Dept. Rev. 7.60% 10/1/18 Aa 5,540,000 6,364,075
544552BQ
M-S-R Pub. Pwr. Agcy. San Juan Proj. Rev.
Series B, 6.75% 7/1/11, (MBIA Insured) Aaa 2,000,000 2,210,000 553751EV
Metropolitan Wtr. Dist. Southern Wtrwks. Rev.:
Rfdg. Series A, 5.75% 7/1/21 Aa 2,250,000 2,283,750 592663MS
8.172% 8/10/18(c) Aa 2,500,000 2,637,500 592663MN
6% 7/1/21 Aa 2,500,000 2,550,000 592663KN
8.775% 8/5/22(c) Aa 1,300,000 1,379,625 592663LP
Modesto Ctfs. of Prtn. (Golf Course Refing. Proj.)
Series B, 5% 11/1/23, (AMBAC Insured) Aaa 2,000,000 1,817,500 607715FF
Modesto Irrigation Dist. Ctfs. of Prtn.:
Rfdg. & Cap. Impts. Series A, 0%
10/1/05, (MBIA Insured) Aaa 2,140,000 1,155,600 607762DC
Rfdg. & Cap. Impts. Series A, 0%
10/1/08, (MBIA Insured) Aaa 2,270,000 1,001,638 607762DF
(Geysers Geothermal Pwr. Proj.)
Series 1986, 5% 10/1/17 A1 5,000,000 4,437,500 607762BL
Northern California Pwr. Agcy. Pub.
Pwr. Rev. Rfdg.:
Rfdg. (Combustion Turbine Proj. #1)
Series A, 6% 8/15/07,
(MBIA Insured) Aaa 1,500,000 1,545,000 664843MF
Rfdg. (Geothermal Proj. #3) Series A,
5.85% 7/1/10 A 1,000,000 1,022,500 664843SB
7.50% 7/1/23, (AMBAC Insured)
(Pre-Refunded to 7/1/21 @ 100)(d) Aaa 1,355,000 1,722,544 664843NV
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Northern California Trans. Rev. (Ore Trans. Proj.)
Series A, 7% 5/1/13, (MBIA Insured) Aaa $ 7,000,000 $ 8,128,750 664850BL
Norwalk Redev. Agcy. Tax Allocation
(Norwalk Redev. Proj. #1):
7.15% 12/1/15 - 2,500,000 2,625,000 668823CM
9.10% 12/1/15,
(Pre-Refunded to 12/1/95 @ 102)(d) - 9,285,000 10,155,469 668823CL
Oakland Ctfs. of Prtn. Rfdg. (Oakland Museum)
Series A, 0%, 4/1/07, (AMBAC Insured) Aaa 2,750,000 1,344,063 671900AR
Oakland Redev. Agcy. Rfdg. Central Dist.
Redev. (Sr. Tax Allocation) 5.50% 2/1/14,
(AMBAC Insured) Aaa 2,400,000 2,376,000 672321ET
Ontario Redev. Fing. Auth. Rev.
(Cap. Appreciation Proj. #1) (Ctr. City)
0% 8/1/10, (MBIA Insured) Aaa 3,255,000 1,293,863 68304EAW
Orange County Ctfs. of Prtn. Rfdg.
(Civic Ctr. Facs.), (AMBAC Insured):
0% 12/1/07 Aaa 1,400,000 659,750 684228FE
0% 12/1/09 Aaa 1,000,000 408,750 684228FG
Orange County Dev. Agcy. Tax Allocation
(Santa Ana Heights Proj.) 6.125% 9/1/23 Baa1 2,500,000 2,471,875
684246CB
Orange County Local Trans. Sales Tax Rev.
Ltd. Tax 6% 2/15/08 Aa 1,250,000 1,320,313 684273BP
Palm Desert Fing. Auth. Tax Allocation
RIB 9.83% 4/1/22, (MBIA Insured)(c) Aaa 3,000,000 3,416,250 696617BG
Palm Springs Ctfs. of Prtn. (Muni. Golf
Course Expansion Proj.) 7.40% 11/1/18 BBB+ 1,750,000 1,935,938 696656FK
Palomar Pomerado Health System Rev.
4.75%, 11/1/23 (MBIA Insured) Aaa 4,100,000 3,541,375 69753EAS
Pasadena Ctfs. of Prtn. Rfdg.
(Old Pasadena Pkg. Facs. Proj.)
6.25% 1/1/18 A1 3,600,000 3,739,500 702204HA
Placer County Wtr. Agcy. Middle Fork Proj.
Rev. Series A, 3.75% 7/1/12 A 8,830,000 7,384,088 726022DV
Pleasanton County Ctfs. of Prtn. (Pleasanton
Pub. Facs. Corp. Cap Proj. I & II)
8.75% 10/1/08 Baa1 1,000,000 1,112,500 728809AN
Pleasanton Jt. Pwrs. Fin. Auth. Reassessment,
Series A:
6% 9/2/05 Baa 2,000,000 2,015,000 728816AU
6.15% 9/1/12 Baa 3,000,000 3,022,500 728816AW
Port Oakland Port Rev. Series F, (MBIA Insured):
Rfdg. 0% 11/1/06 Aaa 1,990,000 1,004,950 734897RQ
Rfdg. (Cap. Appreciation)
Series F, 0% 1/1/08, (MBIA Insured) Aaa 1,770,000 778,800 734897RS
0% 11/1/07 Aaa 4,250,000 2,002,813 734897RR
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Poway Redev. Agcy. (Paguay Proj.) Tax Allocation
7.93% 12/15/14, (FGIC Insured) (c) Aaa $ 7,400,000 $ 7,446,250 738800DV
Rancho Cucamonga Redev. Agcy. Tax
Allocation (Rancho Redev. Proj.)
7.125% 9/1/19, (MBIA Insured) Aaa 7,500,000 8,437,500 752123CQ
Rancho Mirage Joint Pwrs. Fing. Auth.
Ctfs. of Prtn. (Eisenhower Mem. Hosp.)
7% 3/1/22 Baa1 1,300,000 1,399,125 75212HAM
Riverside County Asset Leasing Corp. Leasehold
Rev. (Riverside County Hosp. Proj.) Series A:
6.50% 6/1/12 A 7,000,000 7,372,500 768903AR
6.25% 6/1/19 A 2,500,000 2,553,125 768903AG
Riverside County Ctfs. of Prtn.
(Airforce Village West, Inc.) Series A :
Rfdg. 8.125% 6/15/20 A-1+ 5,850,000 6,171,750 768901FQ
8.125% 6/15/12 A-1+ 2,600,000 2,743,000 768901FT
Riverside Unified School Dist. Ctfs. of Prtn. (Cap.
Appreciation Land Acquisition Proj.) Series B,
0% 9/1/26, (FSA Insured) (g) Aaa 2,275,000 1,711,938 769062AD
Rosemead Redev. Agcy. Sub. Lien Tax
Allocation Proj. (Area 1) 0% 10/1/02 A- 1,450,000 951,563 777520BM
Sacramento Fing. Auth. (Cap. Appreciation
Tax Allocation Proj.) Series B, (MBIA Insured):
0% 11/1/13 Aaa 500,000 160,625 785849BP
0% 11/1/15 Aaa 5,695,000 1,608,838 785849BR
Sacramento Fing. Auth. Lease Rev. Rfdg.
Series A, 5.375% 11/1/14,
(AMBAC Insured) Aaa 2,225,000 2,172,155 785846BL
Sacramento Muni. Util. Dev. Index Inflows
0% 11/15/08, (FGIC Insured)(c) Aaa 7,000,000 6,938,750 7860042C
Sacramento Muni. Util. Dist. Elec. Rev.:
Rfdg. Series G, 6.5%, 9/1/13 Aaa 2,100,000 2,312,625 7860044K
9.78% 8/15/18, (FGIC Insured) (c) Aaa 1,750,000 2,021,250 786004U5
Sacramento Redev. Agcy. Tax Allocation
(Downtown Redev. Proj.) Series A,
6.75% 11/1/05, (MBIA Insured) Aaa 2,130,000 2,380,275 786059JZ
Salinas Facs. Rev. (Villa Sierra Proj.)
Series A, 7.95% 4/20/31, (GNMA Coll.) AAA 2,445,000 2,573,363 794904AD
Salinas Redev. Agcy. Tax Allocation 0%
11/1/22, (Cap. Guaranty Insured) Aaa 19,895,000 3,804,919 794891DN
San Bernadino County Ctfs. of Prtn.:
(Cap. Facs. Proj.) Series B:
6.75% 8/1/10 Baa1 2,500,000 2,862,500 796815KM
6.875% 8/1/24 Baa1 2,500,000 2,959,375 796815KR
(Equip. Fing.) (Cap. Facs. Proj.)
Series B, 6.25% 8/1/19 Baa1 2,500,000 2,746,875 796815KN
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
San Bernadino County Ctfs. of Prtn.: - continued
(Med Ctr. Fing. Proj.):
5.50% 8/1/17(e) Baa1 $ 6,500,000 $ 5,988,125 796815NL
5.50% 8/1/22(e) Baa1 4,500,000 4,095,000 796815NN
San Diego County Wtr. Auth. Wtr. Rev.
Ctfs. of Prtn. (Reg. Rites) 8.50724%,
(FGIC Insured) (c) Aaa 1,250,000 1,337,500 797415CS
San Diego Multi-Family Hsg. Rev.
(Island Gardens Apts. Proj.)
Series B, (GNMA Coll.) 9.50%
10/20/20, LOC Swiss Bank AAA 1,585,000 1,656,325 79729HBU
San Francisco Bay Area Rapid Trans. Dist.
Sales Tax Rev. Rfdg. 6.75% 7/1/10,
(AMBAC Insured) Aaa 1,500,000 1,704,375 797669DX
San Francisco City & County Redev.
Agcy. 7.75% 9/1/06 - 9,000,000 9,528,750 797712AE
San Francisco City & County Redev. Fing. Auth.
Tax Allocation Rev. (FGIC Insured):
Series A:
0% 8/1/06 Aaa 1,035,000 534,319 79771PCN
0% 8/1/07 Aaa 1,085,000 523,513 79771PCP
0% 8/1/08 Aaa 1,085,000 489,606 79771PCQ
0% 8/1/09 Aaa 1,085,000 459,769 79771PCR
0% 8/1/10 Aaa 1,085,000 431,288 79771PCS
San Francisco Port Commerce Rev. Series C,
9.50% 7/1/09, LOC Bankers Trust A1 1,000,000 1,047,500 797707CE
San Joaquin Hills Trans. Corridor Agcy.
Toll Road Rev. (Sr. Lien):
0% 1/1/05 - 2,500,000 1,528,125 798111AF
0% 1/1/07 - 3,000,000 1,890,000 798111AJ
5% 1/1/33 - 8,975,000 7,168,781 798111BJ
San Jose Redev. Agcy. Tax Allocation
(Merged Area Redev. Proj.) 4.75%
8/1/22, (MBIA Insured) A 5,000,000 4,225,000 798147KX
Santa Ana Commty. Redev. Agcy. Tax
Allocation Rev. Series B, 7.375% 9/1/09 A 5,000,000 5,537,500 801095FP
Santa Barbara Ctfs. of Prtn. (Harbor Rfdg.
Proj.) 6.75% 10/1/27 A 1,500,000 1,605,000 801242EX
Santa Clara Ctfs. of Prtn. Ref. Series A,
4.75% 2/1/14, (MBIA Insured) Aaa 1,250,000 1,131,250 801400BG
Santa Clara Elec. Rev. Series B, 0% 7/1/06,
(MBIA Insured) Aaa 2,080,000 1,079,000 801444DH
Santa Monica Family Rev. (YMCA Proj.)
9.50% 12/1/05, LOC Bank of Tokyo(f) - 2,890,000 3,150,100 802450AA
Sequoia Hosp. 5.375% 8/15/13 A 4,170,000 3,909,375 817393BZ
Sequoia Hosp. Dist. Rev. 5.375% 8/15/23 A 8,250,000 7,517,812 817393CA
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Solano County Ctfs. of Prtn. Rfdg. (Justice Facs. &
Pub. Bldg. Proj.), 5.875% 10/1/05 Baa1 $ 2,500,000 $ 2,521,874 834131BR
Southern California Pub. Pwr. Auth. Pwr. Proj. Rev.:
Rfdg. (Palo Verde Proj.) (AMBAC Insured):
Series A, 0% 7/1/14 Aaa 5,030,000 1,534,150 842475JH
Series C, 0% 7/1/16 Aaa 16,325,000 4,591,405 842475MJ
(Multiple Proj.):
6.75% 7/1/10 A 1,400,000 1,552,250 842475KK
6.75% 7/1/11 A 4,000,000 4,455,000 842475KL
6.75% 7/1/13 A 1,000,000 1,121,250 842475KN
Southern California Pub. Pwr. Auth. Southern
Transmission (Cap. Appreciation) 0%
7/1/14 Aa 5,000,000 1,506,250 842477JF
Sulphur Springs Unified School Dist. (MBIA Insured):
Series A:
0%, 9/1/07 Aaa 4,445,000 2,105,818 865480EX
0%, 9/1/09 Aaa 2,485,000 1,037,487 865480EZ
0%, 9/1/11 Aaa 1,830,000 677,100 865480FB
Unlimited Tax Series A, 0% 9/1/15 Aaa 2,280,000 664,049 865480FF
Torrance Hosp. Rev. (Little Co. of Mary Hosp.)
6.875% 7/1/15 A 925,000 1,005,937 891368CK
TriDam Pwr. Auth. California Hydro Elec. Rev.
(Sand Bar Proj.) 11.375% 1/1/17,
(FGIC Insured)(f) - 2,000,000 2,125,000 895566AA
Upland Ctfs. Partn. (San Antonio Commty.
Hosp.) 5.25% 1/1/08 A 1,850,000 1,764,437 915346DN
Upland Hosp. Ctfs. of Prtn. (San Antonio
Commtys. Hosp.) 5.25% 1/1/13 A 5,500,000 5,073,750 915346DP
Vallejo Ctfs. of Prtn. (Marine World Foundation Proj.):
7.80% 2/1/98 - 1,455,000 1,536,843 919191BE
8.10% 2/1/21 - 3,040,000 3,169,200 919191BC
West & Central Basin Fing. Auth. (West Basin Proj.)
Series A, 5% 8/1/10, (AMBAC Insured) Aaa 3,000,000 2,850,000 95122ECE
Western Placer Unified School Dist.
Series A, (FGIC Insured):
0% 8/1/12 Aaa 1,720,000 595,549 959214BR
0% 8/1/13 Aaa 1,855,000 600,555 959214BS
0% 8/1/14 Aaa 2,005,000 614,030 959214BT
0%, 8/1/15 Aaa 2,165,000 625,143 959214BU
0% 8/1/18 Aaa 2,500,000 600,000 959214BP
Unltd. Tax:
0% 8/1/16 Aaa 2,340,000 631,799 959214BV
0% 8/1/17 Aaa 2,525,000 650,187 959214BW
Yolo County Flood Cont. & Wtr. Cont. Dist.
Ctfs. of Prtn. (Tehama-Colusa Canal Wtr.
Supply) 7% 7/15/05, (FGIC Insured) Aaa 2,500,000 2,871,874 986012AB
544,189,462
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
PUERTO RICO - 1.6%
Puerto Rico Commonwealth Hwy. & Trns.
Auth. Rev. Series W, 5.50% 7/1/13 Baa1 $ 4,875,000 $ 4,783,594 745181BZ
Puerto Rico Elec. Pwr. Auth. Pwr. Rev.
Series O, 0% 7/1/17 Baa1 7,500,000 1,903,125 745268JW
Puerto Rico Tel. Auth. Rev. 6.78% 1/1/04,
(AMBAC Insured) (c) Aaa 2,250,000 2,188,125 745297HX
8,874,844
U.S. VIRGIN ISLANDS - 0.3%
Virgin Islands Pub. Fin. Auth. Rev. Rfdg.
Series A, 7.25% 10/1/18
(Escrowed to Maturity) - 1,500,000 1,650,000 927676CF
GUAM - 0.3%
Guam Arpt. Auth. Rev. 6.50% 10/1/23 BBB 1,700,000 1,776,500 400648BL
TOTAL MUNICIPAL BONDS
(Cost $520,132,086) 556,490,806
MUNICIPAL NOTES (A) - 1.7%
CALIFORNIA - 1.7%
Contra Costa TRAN,
Series A, 3.25% 7/29/94 MIG 1 3,000,000 3,002,790 212219BV
Los Angeles County Trans. Commission
Sales Tax Rev. Rfdg. Series 1992 A, 2.25%
(FGIC Insured) LOC Industrial Bank of
Japan Ltd. VRDN VMIG 1 4,800,000 4,800,000 545170HL
Santa Clara County TRAN,
Series 1993-1994, 3.25% 7/29/94 MIG 1 2,000,000 2,002,680 801546LF
TOTAL MUNICIPAL NOTES
(Cost $9,809,087) 9,805,470
OTHER SECURITIES - 0.0%
MOODY'S RATINGS VALUE
(UNAUDITED) (B) RIGHTS (NOTE 1)
CALIFORNIA - 0.0%
Riverside County Asset Leasing Corp. Leasehold Rev.
(Riverside County Hosp.) Series A (Call Rights)
6.50% 6/1/12 (Cost $59,590) - 1,100 $ 220,688
TOTAL INVESTMENTS - 100%
(Cost $530,000,763) $ 566,516,964
FUTURES CONTRACTS
AMOUNT IN THOUSANDS EXPIRATION UNDERLYING FACE UNREALIZED
DATE AMOUNT AT VALUE GAIN/(LOSS)
SELL
65 U.S. Treasury Bond Futures March, 1994 $ 7,306,406 $ 4,721
THE VALUE OF FUTURES CONTRACTS SOLD AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 1.3%
SECURITY TYPE ABBREVIATIONS
TRAN - Tax & Revenue Anticipation Notes
VRDN - Variable Rate Demand Notes
LEGEND
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(b) Standard & Poor's Corporation credit ratings are used in the
absence of a rating by Moody's Investors Service, Inc.
(c) Inverse floating rate security is a security where the coupon is
inversely indexed to a floating interest rate. The price will be more
volatile than the price of a comparable fixed rate security.
(d) Security collateralized by an amount sufficient to pay interest and
principal.
(e) Security purchased on a delayed delivery basis (see Note 2 of Notes to
Financial Statements).
(f) Security was pledged to cover margin requirements for futures
contracts. At the period end, the value of securities pledged amounted to
$3,215,000.
(g) Debt obligation initially issued in zero coupon form which converts to
coupon form at a specified rate and date.
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 59.2% AAA, AA, A 72.7%
Baa 7.8% BBB 7.7%
Ba 0.0% BB 0.0%
B 0.0% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
The percentage not rated by either S&P or Moody's amounted to 11.0%.
The distribution of municipal securities by revenue source, as a percentage
of total value of investment in securities, is as follows:
Lease Revenue 21.8%
Health Care 20.5
Special Tax 20.0
Others (individually less
than 10%) 37.7
TOTAL 100.0%
INCOME TAX INFORMATION
At February 28, 1994 the aggregate cost of investment securities for income
tax purposes was $530,077,875. Net unrealized appreciation aggregated
$36,439,089, of which $39,960,935 related to appreciated investment
securities and $3,521,846 related to depreciated investment securities.
The fund hereby designates $1,160,000 as a capital gain dividend for the
purpose of the dividend paid deduction.
At February 28, 1994 the fund was required to defer $6,602,000 of losses on
futures contracts and options.
FIDELITY CALIFORNIA TAX-FREE HIGH YIELD PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
FEBRUARY 28, 1994
1.ASSETS 2. 3.
4.Investment in securities, at value (cost $530,000,763) 5. $ 566,516,964
(Notes 1 and 2) - See accompanying schedule
6.Cash 7. 423,114
8.Receivable for investments sold 9. 12,281,033
10.Interest receivable 11. 7,571,140
12. 13.TOTAL ASSETS 14. 586,792,251
15.LIABILITIES 16. 17.
18.Payable for investments purchased $ 10,426,032 19.
Delayed Delivery (Note 2)
20.Dividends payable 736,601 21.
22.Accrued management fee 200,912 23.
24.Payable for daily variation on futures contracts 50,781 25.
26.Other payables and accrued expenses 89,154 27.
28. 29.TOTAL LIABILITIES 30. 11,503,480
31.32.NET ASSETS 33. $ 575,288,771
34.Net Assets consist of (Note 1): 35. 36.
37.Paid in capital 38. $ 537,839,637
39.Accumulated undistributed net realized gain (loss) on 40. 928,212
investments
41.Net unrealized appreciation (depreciation) on: 42. 43.
44. Investment securities 45. 36,516,201
46. Futures contracts 47. 4,721
48.49.NET ASSETS, for 47,563,315 shares outstanding 50. $ 575,288,771
51.52.NET ASSET VALUE, offering price and redemption 53. $12.10
price per share ($575,288,771 (divided by) 47,563,315 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED FEBRUARY 28, 1994
54.55.INTEREST INCOME 56. $ 37,371,692
57.EXPENSES 58. 59.
60.Management fee (Note 4) $ 2,434,987 61.
62.Transfer agent, accounting and custodian fees and 817,364 63.
expenses (Note 4)
64.Non-interested trustees' compensation 661 65.
66.Registration fees 757 67.
68.Audit 35,938 69.
70.Legal 46,575
71.Reports to shareholders 21,349
72.Miscellaneous 4,787 73.
74. 75.TOTAL EXPENSES 76. 3,362,418
77.78.NET INTEREST INCOME 79. 34,009,274
80.REALIZED AND UNREALIZED GAIN (LOSS) ON 82. 83.
INVESTMENTS
(NOTES 1 AND 3)
81.Net realized gain (loss) on:
84. Investment securities 23,219,374 85.
86. Futures contracts 1,695,300 24,914,674
87.Change in net unrealized appreciation (depreciation) 88. 89.
on:
90. Investment securities (27,257,141) 91.
92. Futures contracts (549,697) (27,806,838)
93.94.NET GAIN (LOSS) 95. (2,892,164)
96.97.NET INCREASE (DECREASE) IN NET ASSETS 98. $ 31,117,110
RESULTING FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR TEN MONTHS
ENDED ENDED
FEBRUARY 28, FEBRUARY 28, 1993
1994 (NOTE 1)
99.INCREASE (DECREASE) IN NET ASSETS
100.Operations $ 34,009,274 $ 27,948,890
Net interest income
101. Net realized gain (loss) on investments 24,914,674 8,864,729
102. Change in net unrealized appreciation (27,806,838) 32,015,891
(depreciation)
on investments
103. 31,117,110 68,829,510
104.NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM
OPERATIONS
105.Distributions to shareholders (34,009,274) (27,948,890)
From net interest income
106. From net realized gain (12,686,288) -
107. 108.TOTAL DISTRIBUTIONS (46,695,562) (27,948,890)
109.Share transactions 155,444,832 135,478,517
Net proceeds from sales of shares
110. Reinvestment of distributions from: 24,320,885 20,206,099
Net interest income
111. 9,675,447 -
Net realized gain
112. Cost of shares redeemed (185,364,588) (139,220,074)
113. 4,076,576 16,464,542
Net increase (decrease) in net assets resulting from
share transactions
114. (11,501,876) 57,345,162
115.TOTAL INCREASE (DECREASE) IN NET ASSETS
116.NET ASSETS 117. 118.
119. Beginning of period 586,790,647 529,445,485
120. End of period $ 575,288,771 $ 586,790,647
121.OTHER INFORMATION 123. 124.
122.Shares
125. Sold 12,515,698 11,455,837
126. Issued in reinvestment of distributions from: 1,958,696 1,705,997
Net interest income
127. 790,478 -
Net realized gain
128. Redeemed (14,926,974) (11,797,097)
129. Net increase (decrease) 337,898 1,364,737
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
130. YEAR TEN MONTHS YEARS ENDED APRIL 30,
ENDED ENDED
FEBRUARY 28, FEBRUARY 28,
1993
131. 1994 (NOTE 1) 1992 1991 1990
132.SELECTED PER-SHARE DATA
133.Net asset value, $ 12.430 $ 11.540 $ 11.300 $ 10.940 $ 11.080
beginning of period
134.Income from .719 .611 .744 .752 .756
Investment Operations
Net interest income
135. Net realized and (.060) .890 .240 .360 (.140)
unrealized gain (loss)
on investments
136. Total from .659 1.501 .984 1.112 .616
investment operations
137.Less Distributions (.719) (.611) (.744) (.752) (.756)
From net interest
income
138. From net realized (.270) - - - -
gain on investments
139. Total distributions (.989) (.611) (.744) (.752) (.756)
140.Net asset value, $ 12.100 $ 12.430 $ 11.540 $ 11.300 $ 10.940
end of period
141.TOTAL RETURN (dagger) 5.41% 13.40% 8.94% 10.44% 5.61%
142.RATIOS AND SUPPLEMENTAL DATA
143.Net assets, end of $ 575,289 $ 586,791 $ 529,445 $ 523,590 $ 513,682
period (000 omitted)
144.Ratio of expenses .57% .60%* .59% .58% .60%
to average net assets
145.Ratio of net interest 5.78% 6.17%* 6.52% 6.71% 6.73%
income to average net
assets
146.Portfolio turnover 44% 32%* 23% 15% 34%
rate
</TABLE>
* ANNUALIZED
(dagger) TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
FIDELITY CALIFORNIA TAX-FREE INSURED PORTFOLIO
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each figure
includes changes in a fund's share price, reinvestment of any dividends (or
income) and capital gains (the profits the fund earns when it sells bonds
that have grown in value). You can also look at the fund's income. If
Fidelity had not reimbursed certain fund expenses during the periods shown,
the total returns, dividends and yields would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED FEBRUARY 28, 1994 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
California Tax-Free Insured 4.59% 56.12% 72.51%
Lehman Brothers Municipal Bond Index 5.54% 59.02% n/a
Average California Insured
Tax-Exempt Municipal Bond Fund 4.99% 57.31% n/a
Consumer Price Index 2.52% 20.64% 33.12%
CUMULATIVE TOTAL RETURNS reflect actual performance over a set period - in
this case, one year, five years, or since the fund started on September 18,
1986. For example, if you invested $1,000 in a fund that had a 5% return
over the past year, you would end up with $1,050. You can compare these
figures to the performance of the Lehman Brothers Municipal Bond Index - a
broad gauge of the municipal bond market. To measure how the fund stacked
up against its peers, you can look at the average California insured
tax-exempt municipal bond fund, which reflects the performance of only 18
California insured tax-exempt municipal bond funds tracked by Lipper
Analytical Services. Both benchmarks include reinvested dividends and
capital gains, if any. Comparing the fund's performance to the consumer
price index helps show how your fund did compared to inflation. (The
periods covered by the CPI numbers are the closest available match to those
covered by the fund.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 28, 1994 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
California Tax-Free Insured 4.59% 9.32% 7.59%
Lehman Brothers Municipal Bond Index 5.54% 9.72% n/a
Average California Insured
Tax-Exempt Municipal Bond Fund 4.99% 9.48% n/a
Consumer Price Index 2.52% 3.82% 3.93%
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
$27,312
$24,247
'94
$10,000 OVER LIFE OF FUND: Let's say you invested $10,000 in Fidelity
California Tax-Free Insured Portfolio on September 30, 1986, shortly after
the fund started. As the chart shows, by February 28, 1994, the value of
your investment would have grown to $17,268 - a 72.68% increase on your
initial investment. For comparison, look at how the Lehman Brothers
Municipal Bond Index did over the same period. With dividends reinvested,
the same $10,000 would have grown to $18,561 - a 85.61% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. Bond prices, for
example, move in the
opposite direction of interest
rates. In turn, the share price,
return, and yield of a fund
that invests in 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)
INCOME
YEARS ENDED FEBRUARY 28, 1994 1993 1992 1991 1990
Income return 5.35% 6.43% 6.48% 6.58% 6.75%
Capital gain return 1.87% 0.00% 0.00% 0.00% 0.00%
Change in share price -2.63% 9.32% 3.91% 0.73% 2.12%
Total return 4.59% 15.75% 10.39% 7.31% 8.87%
INCOME returns, capital gain returns, and changes in share price are all
part of a bond fund's total return. An income return reflects the dividends
paid by the fund. A capital gain return reflects the amount paid by the
fund to shareholders based on the profits it has from selling bonds that
have grown in value. Both returns assume the dividends or gains are
reinvested. Changes in the fund's share price include changes in the prices
of the bonds owned by the fund.
DIVIDENDS AND YIELD
PERIODS ENDED FEBRUARY 28, 1994 PAST 30 PAST 6 PAST 1
DAYS MONTHS YEAR
Dividends per share n/a 28.43(cents) 58.89(cents)
Annualized dividend rate n/a 5.15% 5.33%
Annualized yield 4.90% n/a n/a
Tax-equivalent yield 8.60% n/a n/a
DIVIDENDS per share show the income paid by the fund for a set period. If
you annualize this number, based on an average share price of $11.14 over
the past six months and $11.05 over the past year, you can compare the
fund's income over these two periods. The 30-day annualized YIELD is a
standard formula for all funds based on the yields of the bonds in the
fund, averaged over the past 30 days. This figure shows you the yield
characteristics of the fund's investments at the end of the period. It also
helps you compare funds from different companies on an equal basis. The
tax-equivalent yield shows what you would have to earn on a taxable
investment to equal the fund's tax-free yield, if you're in the 43.04%
combined effective 1994 federal and state tax bracket.
FIDELITY CALIFORNIA TAX-FREE INSURED PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
Bond investments - including
tax-free issues - provided solid
returns for the 12 months ended
February 28, 1994, despite a
dramatic downturn in February.
Falling interest rates pushed up
bond prices steadily through
mid-October, when the yield on the
benchmark 30-year Treasury bond
reached a historic low of 5.79%. By
year-end, a strengthening economy
had fueled mild inflation fears. That
pushed up the yield on the 30-year
bond to 6.35% on December 31,
which forced investors to give back
some of their earlier profits. Inflation
jitters eased and bond yields
dropped in January. However,
when the Federal Reserve Bank
raised short-term interest rates in
an attempt to control inflation on
February 4, investors reacted
negatively. At the end of February,
the yield on 30-year bonds was
6.66%, about 38 basis points
higher than at the beginning of the
month. Over the year, higher
federal income taxes boosted
demand for municipal bonds. But
municipal bond prices were hurt by
the Fed's action in February and by
record new issuance, which kept
supplies high and dampened
prices. The return on the Lehman
Brothers Municipal Bond Index, a
broad measure of the tax-free
market, rose 5.54%. By
comparison, the Lehman Brothers
Aggregate Bond Index, which
tracks investment-grade taxable
bonds, returned 5.40%. Globally,
falling interest rates and low
inflation drove good annual returns
in Europe, Japan, and most
emerging markets, although many
of these markets fell in February
along with the U.S. bond market.
The Salomon Brothers World
Government Bond Index - which
includes U.S. issues - returned
9.34%, while the J.P. Morgan
Emerging Markets Bond Index was
up a dramatic 29.46%.
An interview with John Haley,
Portfolio Manager of Fidelity California Tax-Free Insured Portfolio
Q. JOHN, HOW DID THE FUND PERFORM?
A. The fund's performance slipped during the past year. The fund had a
total return of 4.59% for the year ended February 28, 1994. The average
California insured tax-free bond fund posted a total return of 4.99% during
the period, according to Lipper Analytical Services.
Q. WHY DID THE FUND LAG THE AVERAGE?
A. Mainly because its duration was somewhat longer than that of the typical
California insured tax-free bond fund. That meant its share price was more
sensitive to interest rate changes. During the year I expected interest
rates would continue to decline and drive bond prices higher, so I extended
the fund's duration from about 7.5 years to 11.3 years. This helped the
fund during most of the period. However, when interest rates rose in the
fourth quarter of '94 and then again in February, the fund gave back some
of its gains.
Q. DID YOU RE-STRUCTURE THE FUND TO INCREASE ITS DURATION?
A. Somewhat. I added to the fund's stake in non-callable coupon and
zero-coupon bonds, neither of which can be redeemed early by their issuers.
I invested heavily in bonds that are due to mature in 10 to 20 years; they
recently accounted for 41% of the fund's investments.
Q. WHY DID THE FUND HOLD SOME UNINSURED BONDS?
A. Insured bonds still accounted for 70% of the fund's investments at the
end of the period, while approximately 30% of the fund's investments were
in uninsured bonds. As the economy in the state improves, those uninsured
bonds should benefit and boost the total return of the fund. Some of the
fund's uninsured bonds were pre-refunded during the period-that is, their
issuers set aside a pool of Treasury securities to pay the remaining
interest and principal due to bondholders. As a result, the bonds' credit
ratings went from A to Aaa, causing investors to bid their prices higher.
Q. YOU INCREASED THE PERCENTAGE OF THE FUND'S ASSETS IN HEALTH-CARE BONDS.
WHY - WITH ALL THE CONTROVERSY ABOUT HEALTH-CARE REFORM?
A. It's true that in the past six months the fund's stake in health-care
has grown from 6% to 9%. That's not to say we aren't cautious on the sector
because the Clinton plan could affect these issues. However, the bonds I
choose are mainly strong hospitals that are expected to survive and
possibly benefit from any shake-up likely to occur. In fact, most are
insured.
Q. WHAT EFFECT DID THE RECENT EARTHQUAKE HAVE ON THE FUND'S PERFORMANCE?
A. The fund only held one or two bonds of issuers in the vicinity of the
earthquake, and they were insured. Fortunately, during the past two or
three years I have de-emphasized issuers in the Los Angeles area because
the economy in southern California has been especially sluggish. I've also
tried to spread the fund's investments across different regions of the
state. That helps offer some protection against natural disasters, if and
when they occur.
Q. WHAT'S YOUR OUTLOOK FOR THE TAX-EXEMPT BOND MARKET?
A. The economy will probably show modest growth and inflation seems likely
to remain under control, so I don't expect interest rates to rise
dramatically from here. But interest rates aren't likely to fall much more
either, so gains in the bond market won't be driven by falling rates. The
tax-exempt market will probably benefit from a lower supply of new issues,
which will likely amount to around $175 to $200 billion versus $290 billion
last year. Also, demand for tax-exempt bonds will likely increase as
investors realize that the new, higher federal income tax rates increase
the value of the tax exemption these issues offer. And about $35 billion in
tax-exempt bonds will mature in 1994, creating still more demand for new
bonds. The combination of lower
supply and higher demand should help support prices in the tax-exempt
market.
Q. WHAT ABOUT THE CALIFORNIA INSURED TAX-EXEMPT MARKET?
A. I still feel that California bonds are attractive because the state's
economy is showing signs that it is set to begin a recovery. As that
happens, state GOs and lease bonds, which are backed by leases held by the
state, should be especially strong performers, because their credit quality
is closely linked to the economy. Those issues may be volatile over the
next several months as the state goes through its budget process. But I'll
probably take advantage of any price declines to increase the fund's
investment in them.
FUND FACTS
GOAL: to provide high current
income exempt from
California state and federal
income taxes by investing
primarily in long-term
California municipal bonds
covered by insurance
START DATE: September 18,
1986
SIZE: as of February 28,1994,
over $291 million
MANAGER: John Haley, since
September 1986; manager,
Spartan California Municipal
High Yield Portfolio, since
December 1989; Fidelity
California Tax-Free High Yield
Portfolio, and Fidelity Advisor
Tax-Exempt Portfolio, since
September 1985
(checkmark)
JOHN HALEY ON THE FUND'S
STRATEGY:
"During the past two to three
years I expected a more
severe economic downturn in
the California economy than
most observers. As a result, I
stuck mainly with insured
issues. Recently I have begun
to identify factors that suggest
the California economy is
reaching a bottom. I expect a
gradual rebound in the state's
economy, and that should
help lower-rated
investment-grade bonds
outperform higher-rated ones.
Thus, I'm using Fidelity's
fixed-income research
analysts to identify stable and
improving investment-grade
securities that could enhance
the yield and total return of the
portfolio."
(bullet) As of February 28, 1994,
41% of the fund's investments
were in bonds with maturities
of 10 to 20 years, and 48%
were in bonds with maturities
of greater than 20 years.
(bullet) The fund's investment in
bonds rated Aaa accounted
for 75.5% its total
investments.
(bullet) About 30% of the fund's
investments were in
uninsured bonds, all rated
Baa or higher.
(bullet) About one-third of the fund
was in lease rental bonds,
which could improve with a
pickup in the California
economy.
FIDELITY CALIFORNIA TAX-FREE INSURED PORTFOLIO
INVESTMENT CHANGES
TOP FIVE SECTORS AS OF FEBRUARY 28, 1994
% OF FUND'S INVESTMENT % OF FUND'S INVESTMENT
S S
IN THESE SECTORS
6 MONTHS AGO
Lease Revenue 33.1 33.9
Special Tax 20.1 18.6
Health Care 9.2 6.0
General Obligation 8.9 10.0
Electric Revenue 8.8 11.3
AVERAGE YEARS TO MATURITY AS OF FEBRUARY 28, 1994
6 MONTHS AGO
Years 20.3 19.1
AVERAGE YEARS TO MATURITY SHOWS THE AVERAGE TIME UNTIL THE PRINCIPAL OF THE
BONDS IN THE FUND IS EXPECTED TO BE REPAID, WEIGHTED BY DOLLAR AMOUNT.
DURATION AS OF FEBRUARY 28, 1994
6 MONTHS AGO
Years 11.3 10.1
DURATION SHOWS HOW MUCH A BOND'S PRICE FLUCTUATES WITH CHANGES IN INTEREST
RATES. IF RATES RISE 1%, FOR EXAMPLE, THE SHARE PRICE OF A FUND WITH A
FIVE-YEAR DURATION WILL FALL 5%.
QUALITY DIVERSIFICATION AS OF FEBRUARY 28, 1994
(MOODY'S RATINGS)
Row: 1, Col: 1, Value: 75.5
Row: 1, Col: 2, Value: 15.4
Row: 1, Col: 3, Value: 8.699999999999999
Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: 1.5
Aaa 75.5%
Aa, A 15.4%
Baa 8.7%
Ba, B 0%
Non-rated 0.4%
THIS CHART EXCLUDES SHORT-TERM INVESTMENTS. WHERE MOODY'S RATINGS ARE NOT
AVAILABLE, WE HAVE USED S&P RATINGS.
FIDELITY CALIFORNIA TAX-FREE INSURED PORTFOLIO
INVESTMENTS/FEBRUARY 28, 1994
(Showing Percentage of Total Value of Investments)
MUNICIPAL BONDS - 97.7%
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - 96.3%
Alameda County Ctfs. of Prtn. Rfdg.
(Santa Rita Jail Proj.) 5.375% 6/1/09,
(MBIA Insured) Aaa $ 2,500,000 $ 2,456,250 010891KG
Alameda Ctfs. of Prtn. Rfdg. (Santa Rita Jail
Proj.), 5% 12/1/15 (MBIA Insured) Aaa 1,000,000 921,250 010891KK
Anaheim Pub. Fing. Auth. Tax Allocation
Rev. (Reg. Rites) 10.27% 12/1/18,
(MBIA Insured) (c) Aaa 1,000,000 1,192,500 032559AV
Antioch Area Pub. Facs. Fing. Agcy.
Special Tax Commty. Facs. Dist. 5% 8/1/18,
(FGIC Insured) Aaa 8,795,000 7,981,462 037060CM
Bay Area Gov't. Assoc. Rev. (Muni. Fing.
Pool) Series A, 8.05% 9/1/10 A 1,515,000 1,658,925 07201TAB
Bonita Unified School Dist. Ctfs. of Prtn.
(Cap. Appreciation Rfdg. Proj.) 0%
5/1/20, (MBIA Insured) Aaa 6,000,000 1,297,500 098204AX
Burbank Redev. Agcy. Tax Allocation
(City Ctr. Redev. Proj.) Series A, 5%
12/1/15, (Cap. Guaranty Insured) Aaa 4,000,000 3,705,000 120823EQ
California Edl. Facs. Auth. Rev. (Pooled Facs.
Prog.) Series 1987, 7.625% 11/1/12,
(MBIA Insured) Aaa 1,000,000 1,121,250 130173R5
California Health Facs. Fing. Auth. Rev.
(MBIA Insured):
Rfdg. (Catholic Healthcare West)
4.75% 7/1/19 Aaa 1,500,000 1,318,125 13033AAU
(Children's Hosp.) Series A, 7.50%
10/1/20 Aaa 1,650,000 1,899,562 13033JAJ
(Pomona Valley Hosp. Med. Ctr.)
Series A, 6.75% 1/1/07 Aaa 1,500,000 1,638,750 13033H3W
(Scripps Health) Series A, 4.625%
10/1/13 Aaa 1,345,000 1,188,644 13033J5V
(Sharp Temecula Valley) Series A,
7.05% 8/1/21 Aaa 1,000,000 1,118,750 13033JPT
California Hsg. Fin. Agcy. Rev.:
(Home Mtg.):
Series 1983 A, 0% 2/1/15 Aa 13,699,000 1,780,870 130329QE
Series 1983 B, 0% 8/1/15 Aa 290,000 35,163 130329RG
Series B, 5.1% 2/1/04 (MBIA Insured)(e) Aaa 2,295,000 2,243,362
13033C2R
California Poll. Cont. Fing. Auth. Solid Waste
Disp. Rev. (North County Recycling Ctr.)
6.75% 7/1/17, LOC Union Bank of
Switzerland Aaa 1,500,000 1,638,750 130536BR
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
California Pub. Cap. Impt. Fing. Auth. Rev.
(Pooled Proj.) Series B, 8.10% 3/1/18
(MBIA Insured) Aaa $ 2,960,000 $ 3,241,200 130552AS
California Pub. Works Board Lease Rev.
(Dept. Correction State Prisons, Susanville)
Series A, 5% 12/1/19
(AMBAC Insured) Aaa 3,000,000 2,737,500 13068GPA
Series D, 5.25% 6/1/15
(CGIC Insured) Aaa 1,000,000 957,500 13068GUA
California Statewide Commty. Dev. Auth.
8.83% 7/1/13, (MBIA Insured) (c) Aaa 1,000,000 982,500 130909JH
California Statewide Commtys. Dev. Corp.
Ctfs. of Prtn.:
Rfdg. (Insured Health Facs.)
(Eskaton, Inc.) 5.875% 5/1/20 A+ 1,000,000 980,000 130909GW
(Childrens Hosp.) 6% 6/1/11,
(MBIA Insured) Aaa 1,700,000 1,776,500 130909NJ
(St. Joseph Health Sys.) 5.50% 7/1/23 Aa 1,000,000 945,000 130909GH
California Univ. Rev. Rfdg. (Hsg. Sys. Group A)
(MBIA Insured):
Rfdg. Issue II, 7.80% 11/1/15 Aaa 1,000,000 1,102,500 914113CK
Series A, 5% 11/1/14 Aaa 2,500,000 2,312,500 914113RP
Campbell Ctfs. of Prtn. Rfdg. (Civic Center
Proj.) 6% 10/1/18 A 2,000,000 1,980,000 134111BK
Carson Redev. Agcy. Redev. Proj. Area #1
Tax Allocation 6.375% 10/1/12 Baa1 1,000,000 991,250 145750CZ
Castaic Lake Wtr. Agcy. Ctfs. of Prtn.
(Wtr. Sys. Impt. Proj.) 7.125% 8/1/16,
(MBIA Insured) Aaa 1,000,000 1,123,750 148370AM
Central California Jt. Pwrs. Health Fing. Auth.
Ctfs. of Prtn. (Commty. Hosp. of Central
California Proj.) 5.25% 2/1/13 A 2,000,000 1,837,500 152757AQ
Concord Redev. Agcy. Tax Allocation
(Central Concord Redev. Proj.)
Series 2, 8% 7/1/18, (MBIA Insured)
(Pre-Refunded to 7/1/98 @ 102) (d) Aaa 1,000,000 1,162,500 206141FF
Contra Costa Home Mtg. Fin. Auth. Home
Mtg. Rev. 0% 9/1/17, (MBIA Insured) Aaa 7,490,000 1,891,225 212216CA
Culver City Redev. Fing. Auth. Rev. Rfdg. Tax
Allocation (AMBAC Insured):
5.50%, 11/1/14 Aaa 4,000,000 3,990,000 230341BL
4.60%, 11/1/20 Aaa 5,000,000 4,275,000 230341BM
Del Norte County Pub. Wks. Rev. Rfdg.
(Dept. of Corrections) 5.125%, 12/1/08 A1 2,000,000 1,917,500 13068GSY
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Desert Hosp. Dist. Hosp. Rev. Ctfs. of Prtn.
(Desert Hosp. Corp.) 6.35% 7/1/04,
(Cap. Guaranty Insured) AAA $ 2,140,000 $ 2,378,075 25041MBD
Desert Hosp. Rev. Ctfs. of Prtn.
(Desert Hosp. Corp.) Series 1992,
10.029% 7/28/20, (Cap. Guaranty
Insured) (c) Aaa 2,000,000 2,322,500 25041MAZ
Empire Union School Dist. Spl. Tax
(Commty. Facs. Dist. #87-1)
Series A, 7.90% 10/1/14,
(FGIC Insured) (Pre-Refunded to
10/1/96 @ 103) (d) Aaa 1,000,000 1,125,000 292109AN
Eureka Unified School Dist. Ctfs. of Prtn.
(Cap. Appreciation) (FSA Insured):
Series A, 0% 9/1/27 Aaa 4,085,000 3,727,562 298522AD
Series B, 0% 9/1/27 Aaa 1,555,000 1,387,837 298522AE
Fontana Redev. Agcy. Tax Allocation Rfdg.
(Yurupa Hills) Series 1992 A, 7.10%
10/1/23 BBB 1,000,000 1,087,500 344619CL
Fontana Unified School Dist. Rfdg.
(AMBAC Insured):
0% 7/1/12 Aaa 1,655,000 581,319 344640HC
0% 7/1/13 Aaa 1,880,000 618,050 344640HD
Foothill De Anza Commty. College Ctfs. of
Prtn. (Connie Lee Rfdg. Proj.) 5.25%
9/1/21 AAA 1,175,000 1,086,875 345104CX
Grossmont Hosp. Dist. Rev. Series A, 8%
11/15/17, (MBIA Insured), (Pre-Refunded
to 11/15/97 @ 102) (d) Aaa 1,500,000 1,725,000 399226BH
Irvine Ranch Wtr. Dist. Joint Pwr. Agcy.
Local Pool Rev.:
7.875% 2/15/23 A 3,100,000 3,351,875 463656AR
8.25% 8/15/23 BBB 3,000,000 3,300,000 463656BE
La Habra Ctfs. of Prtn. (La Habra and
View Park) (Acquisition Proj.) 6.625%
11/1/22, (FSA Insured) Aaa 1,000,000 1,102,500 503423BA
Lemon Grove Commty. Dev. Agcy. Tax
Allocation Rev. (Lemon Grove Redev.
Proj.) 6.90% 8/1/20 Baa 1,000,000 1,058,750 525638AG
Local Gov't. Fin. Auth. Rev. (Oakland Cent.
Dist.) 0% 9/1/09, (MBIA Insured) Aaa 3,565,000 1,492,844 539558FG
Los Angeles Convention Ctr. Rfdg. Series A,
5.125% 8/15/13, (MBIA Insured) Aaa 3,000,000 2,820,000 544399AK
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Los Angeles County Cap. Asset Leasing
Corp. Leasehold Rev. 4.05% 12/1/09,
(AMBAC Insured) Aaa $ 2,250,000 $ 2,306,250 544900CE
Los Angeles County Ctfs. of Prtn.:
(Cap. Appreciation Correctional Facs.)
(MBIA Insured)
0% 9/1/12 Aaa 2,700,000 941,625 544663G9
0% 9/1/13 (f) Aaa 3,380,000 1,106,950 544663H4
(Disney Parking Proj.)
(Cap. Appreciation):
0% 3/1/10 A 3,000,000 1,143,750 5446634E
0% 3/1/15 A 1,000,000 273,750 5446634Q
0% 3/1/16 A 5,615,000 1,431,825 5446634S
0% 9/1/16 A 7,985,000 1,966,306 5446634T
0% 3/1/17 A 1,835,000 438,106 5446634U
Los Angeles County Metropolitan Trans. Auth.
Sales Tax Rev. Sr. Series B 4.75% 7/1/13,
(AMBAC Insured) Aaa 5,000,000 4,512,500 544712BP
Los Angeles County Pub. Wks. Fing.
Auth. Lease Rev. (Mult. Cap. Facs. Proj. IV)
4.75% 12/1/13, (MBIA Insured) Aaa 10,000,000 8,950,000 54473EAR
M-S-R Pub. Pwr. Agcy. San Juan Proj. Rev.
(MBIA Insured):
Series B, 6.75% 7/1/11 Aaa 1,000,000 1,105,000 553751EV
Series D, 6.75% 7/1/20 Aaa 2,500,000 2,834,375 553751DN
Mesa Consolidated Wtr. Dist. Ctfs. of Prtn.
(Cap. Impt. Phase II) 7.625% 3/15/08,
(AMBAC Insured) Aaa 1,000,000 1,123,750 590589AL
Metropolitan Wtr. Dist. Southern Wtrwks.
Rev. 8.172% 8/10/18(c) Aa 2,000,000 2,110,000 592663MN
Modesto Ctfs. of Prtn. (Commty. Ctr. Refing.
Proj.) Series A, 5% 11/1/23,
(AMBAC Insured) Aaa 2,500,000 2,271,875 607715FE
Modesto Irrigation Dist. Ctfs. of Prtn. Rfdg. &
Cap. Impts. Series A, 0% 10/1/09,
(MBIA Insured) Aaa 2,270,000 944,887 607762DG
Moreno Valley Unified School Dist.
Ctfs. of Prtn.:
(Land Acquisition) 0% 9/1/11,
(FSA Insured) Aaa 4,305,000 3,293,325 616872CT
7.375% 9/1/11 Baa 160,000 162,200 616872BS
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Northern California Pwr. Agcy. Pub. Pwr. Rev.:
Rfdg. (Geothermal Proj. #3) Series A,
5.85% 7/1/10 A $ 2,500,000 $ 2,556,250 664843SB
7.50% 7/1/23 (AMBAC Insured)
(Pre-Refunded to 7/1/21 @ 100) (d) Aaa 1,300,000 1,652,625 664843NV
Norwalk Redev. Agcy. Tax Allocation
(Norwalk Redev. Proj. #1) 7.15%
12/1/15 - 1,000,000 1,050,000 668823CM
Oakland Redev. Agcy. Central Dist. Redev.
(Sub. Tax Allocation):
Rfdg. 5.50% 2/1/14,
(AMBAC Insured) Aaa 3,000,000 2,970,000 672321ET
5% 9/1/21, (MBIA Insured) Aaa 2,025,000 1,850,344 672321FF
Orange County Ctfs. of Prtn.
(Civic Ctr. Facs.):
0% 12/1/13, (AMBAC Insured) Aaa 2,500,000 790,625 684228FL
0% 12/1/18, (AMBAC &
MBIA Insured) Aaa 7,500,000 1,753,125 684228FR
Orange County Dev. Agcy. Tax Allocation
(Santa Ana Heights Proj.) 6.125%
9/1/23 Baa1 1,500,000 1,483,125 684246CB
Palm Desert Fing. Auth. Tax Allocation RIB
9.83% 4/1/22, (MBIA Insured) (c) Aaa 1,750,000 1,992,812 696617BG
Palomar Pomerado Health Sys. Rev.
(MBIA Insured):
0% 11/1/00 Aaa 3,080,000 2,221,450 69753EAT
4.75%, 11/1/23 Aaa 1,500,000 1,295,625 69753EAS
Placer County Wtr. Agcy. Wtr. Rev. Ctfs. of
Prtn. (Phase 1 Cap. Impt. Proj.) 7.75%
7/1/18, (MBIA Insured) Aaa 1,000,000 1,138,750 726030AR
Pleasanton Jt. Pwrs. Fin. Auth. Reassessment,
Series A, 6% 9/2/05 Baa 2,000,000 2,015,000 728816AU
Poway Ctfs. of Prtn. (Poway Royal Mobile
Home Park) (Cap. Impt. Proj.) 7% 7/1/20,
(FSA Insured) Aaa 1,250,000 1,354,687 738756BC
Poway Redev. Agcy. (Paguay Proj.) Tax
Allocation 7.93% 12/15/14,
(FGIC Insured) (c) Aaa 4,200,000 4,226,250 738800DV
Rancho Mirage Joint Pwrs. Fing. Auth.
Ctfs. of Prtn. (Eisenhower Mem. Hosp.)
7% 3/1/22 Baa1 1,000,000 1,076,250 75212HAM
Rancho Wtr. Dist. Fin. Auth. 4.75% 8/15/21,
(AMBAC Insured) Aaa 2,000,000 1,737,500 752111DC
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Redding Elec. Sys. Rev. Ctfs. of Prtn.:
(Cap. Appreciation) Series A, (FGIC Insured):
0% 6/1/05 Aaa $ 2,000,000 $ 1,110,000 75728MBZ
0% 6/1/06 Aaa 1,730,000 899,600 75728MCB
0% 6/1/07 Aaa 1,890,000 921,375 75728MCD
0% 6/1/08 Aaa 1,300,000 591,500 75728MCF
Series A, 0% 7/1/19, (MBIA Insured) Aaa 2,000,000 387,500 75728MAX
Redondo Beach Redev. Agcy. Tax Allocation
(South Bay Ctr.) 8.625% 5/1/14,
(FGIC Insured) Aaa 1,000,000 1,132,500 757705AB
Richmond Redev. Agcy. Tax Allocation
(Harbour Redev. Proj.) 7% 7/1/09
(Cap. Guaranty Insured) Aaa 1,750,000 1,986,250 764472BU
Riverside County Asset Leasing Corp. Leasehold
Rev. (Riverside County Hosp. Proj.) Series A:
6.375% 6/1/09
(Detachable Call Option) A 2,000,000 2,087,500 768903AW
6.50% 6/1/12 A 5,500,000 5,791,875 768903AR
6.25% 6/1/19 A 2,000,000 2,042,500 768903AG
Riverside County Trans. Commission Sales
Tax Rev. Series A, 5.75% 6/1/09,
(AMBAC Insured) Aaa 2,000,000 2,052,500 769125BC
Riverside Unified School Dist. Ctfs. of Prtn.
(Cap. Appreciation Land Acquisition Proj.)
Series B, 0% 9/1/26, (FSA Insured) (g) Aaa 2,000,000 1,505,000 769062AD
Sacramento Ctfs. of Prtn. Rfdg. (Lt. Rail
Tran. Proj.) 6% 7/1/12 A1 1,000,000 1,003,750 785845FB
Sacramento Fing. Auth. (Cap.
Appreciation Tax Allocation Proj.)
Series A, 0% 11/1/14, (MBIA Insured) Aaa 5,700,000 1,710,000 785849BQ
Sacramento Fing. Auth. Lease Rev. Rfdg.
Series A, 5.375% 11/1/14,
(AMBAC Insured) Aaa 6,500,000 6,345,625 785846BL
Sacramento Muni. Util. Dist. Elec. Rev.:
Rfdg. Series G, 6.5%, 9/1/13 Aaa 7,000,000 7,708,750 7860044K
9.78% 8/15/18, (FGIC Insured) (c) Aaa 1,000,000 1,155,000 786004U5
Sacramento Muni. Util. Dev. Index
0% 11/15/08, (FGIC Insured) (c) Aaa 3,700,000 3,667,625 7860042C
San Bernadino County Ctfs. Prtn.
(Med Ctr. Fing. Proj.):
5.50% 8/1/17 (e) Baa1 3,350,000 3,086,187 796815NL
5.50% 8/1/22 (e) Baa1 2,660,000 2,420,600 796815NN
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
San Bernadino County Trans. Auth. Sales
Tax Rev. Series A, 6% 3/1/10,
(FGIC Insured) Aaa $ 3,625,000 $ 3,765,469 796846AP
San Bernadino Redev. Agcy. Tax Allocation
Rfdg. (Southeast Ind. Park) 7.40% 3/1/14,
(AMBAC Insured) Aaa 2,100,000 2,336,250 796779KY
San Diego County Wtr. Auth. Wtr. Rev.
Ctfs. of Prtn. (Reg. Rites) 8.55% 5/1/09,
(FGIC Insured) (c) Aaa 2,500,000 2,665,625 797415DC
San Francisco Bay Area Rapid Transit Dist.
Sales Tax Series 1990, 6.75% 7/1/09,
(AMBAC Insured) Aaa 3,200,000 3,524,000 797669DW
San Francisco City & County Redev. Agcy.
Mtg. Rev. Rfdg. (Section 8) Series A,
6.65% 7/1/24, (MBIA Insured) Aaa 1,750,000 1,758,750 797714FP
San Jacinto Unified School Dist. Series B,
0% 9/1/26, (FSA Insured)
step coupon Aaa 1,585,000 1,376,969 797852BM
San Joaquin County Ctfs. of Prtn. Rfdg.:
Rfdg. (Cap. Facs. Proj.) 5% 11/15/09,
(MBIA Insured) Aaa 1,000,000 957,500 798085EQ
(Cap. Facs. Proj.) 5% 11/15/10,
(MBIA Insured) Aaa 1,110,000 1,055,888 798085ER
(Gen. Hosp. Proj.) 6.625% 9/1/20 A 2,500,000 2,640,625 798085DX
San Jose Redev. Agcy. Tax Allocation
(Merged Area Redev. Proj.) (MBIA Insured):
6% 8/1/15 Aaa 3,000,000 3,150,000 798147LE
4.75% 8/1/24 Aaa 1,000,000 863,750 798147KV
Santa Ana Commty. Redev. Agcy. Tax
Allocation (South Main St. Redev.)
5.25% 9/1/13, (MBIA Insured) Aaa 3,000,000 2,868,750 801095GW
Santa Barbara Ctfs. of Prtn. (Harbor Rfdg.
Proj.) 6.75% 10/1/27 A 1,000,000 1,070,000 801242EX
Santa Clara Redev. Agcy. Tax Allocation
Rfdg. (Bayshore North Proj.) 5.75%
7/1/14, (AMBAC Insured) Aaa 1,000,000 1,011,250 801453DP
Santa Rosa Wtr. Rev. Rfdg. Series B, 6.125%
9/1/17, (FGIC Insured) Aaa 1,000,000 1,041,250 802649GT
Sequoia Hosp. 5.375% 8/15/13 A 1,000,000 937,500 817393BZ
Solano County Ctfs. of Prtn. Rfdg.
(Justice Facs. & Pub. Bldg. Proj.)
5.875% 10/1/05 Baa1 5,000,000 5,043,750 834131BR
Southern California Pub. Pwr. Auth. Pwr.
Proj. Rev. (Multiple Proj.) 7% 7/1/09 A 1,250,000 1,357,813 842475KE
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Southern California Pub. Pwr. Auth. Rev.
Rfdg. (Palo Verde Proj.) Series A, 0%
7/1/12, (AMBAC Insured) Aaa $ 1,855,000 $ 635,338 842475JF
Southern California Rapid Transit Dist.
Ctfs. of Prtn. (Worker's Compensation
Fund) 6% 7/1/10, (MBIA Insured) Aaa 1,500,000 1,573,125 842483AM
Sulphur Springs Unified School Dist. Series A,
(MBIA Insured):
0% 9/1/08 Aaa 2,000,000 890,000 865480EY
0% 9/1/16 Aaa 3,200,000 880,000 865480FG
Tahoe-Truckee Joint Union School Dist.
(Cap. Appreciation) Series A, 0% 9/1/10 Aaa 6,625,000 2,583,750
873873EZ
Torrance Hosp. Rev. (Little Co. of Mary Hosp.)
6.875% 7/1/15 A 1,475,000 1,604,063 891368CK
Valley Ctr. Union School Dist. Series A,
0% 9/1/17, (MBIA Insured) Aaa 8,835,000 2,263,969 919439BT
Vista Unified School Dist. Ctfs. of Prtn.
Rfdg. (Cap Appreciation) Series A, 0%
11/1/13, (FSA Insured) Aaa 6,145,000 1,951,038 92834MAY
Walnut Creek Ctfs. of Prtn. Rfdg. (John Muit
Med. Ctr.) 5%, 2/15/16, (MBIA Insured) Aaa 3,250,000 2,969,688 932702CH
West & Central Basin Fing. Auth.
(West Basin Proj.) Series A, 5% 8/1/10,
(AMBAC Insured) Aaa 2,000,000 1,900,000 95122ECE
Yolo County Flood Cont. & Wtr. Cont. Dist.
Ctfs. of Prtn. (FGIC Insured):
(Tehama-Colusa Canal Wtr. Supply)
7% 7/15/05 Aaa 1,000,000 1,148,750 986012AB
7.125% 7/15/15 Aaa 5,500,000 6,153,125 986012AA
274,230,239
PUERTO RICO - 1.4%
Puerto Rico Commonwealth Hwy. & Trns.
Auth. Rev. Series W, 5.50% 7/1/13 Baa1 2,500,000 2,453,125 745181BZ
Puerto Rico Tel. Auth. Rev. 6.78% 1/1/04,
(AMBAC Insured) (c) Aaa 1,500,000 1,458,750 745297HX
3,911,875
TOTAL MUNICIPAL BONDS
(Cost $267,287,883) 278,142,114
MUNICIPAL NOTES - (A) 2.3%
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - 2.3%
Los Angeles County Trans. Commission Sales
Tax Rev. Rfdg. Series 1992 A, 2.25%
(FGIC Insured) LOC Industrial Bank of
Japan Ltd. VRDN VMIG 1 $ 1,340,000 $ 1,340,000 545170HL
Orange County Various Sanitation Dist.
Ctfs. of Prtn. (Cap. Impt. Prog.)
(Dist. 1-7 & 11) 2.20%,
(FGIC Insured), VRDN VMIG 1 2,200,000 2,200,000 684285BK
Southern California Pub. Pwr. Auth. Rev.
(Transmission Proj.) Series 1991, 2.25%,
(AMBAC Insured) LOC Swiss Bank, VRDN VMIG 1 3,000,000 3,000,000
842477HH
TOTAL MUNICIPAL NOTES
(Cost $6,540,000) 6,540,000
OTHER SECURITIES - 0.0%
RIGHTS
CALIFORNIA - 0.0%
Riverside County Asset Leasing Corp.
Leasehold Rev. (Riverside County Hosp.)
Series A (Call Rights) 6.50% 6/1/12
(Cost $43,600) - 800 160,500
TOTAL INVESTMENTS
(Cost $273,871,483) $ 284,842,614
FUTURES CONTRACTS
AMOUNT IN THOUSANDS EXPIRATION UNDERLYING FACE UNREALIZED
DATE AMOUNT AT VALUE GAIN/(LOSS)
SELL
30 U.S. Treasury Bond Futures June, 1994 $ 3,340,313 $ 21,290
THE VALUE OF FUTURES CONTRACTS SOLD AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 1.1%
SECURITY TYPE ABBREVIATIONS
VRDN - Variable Rate Demand Notes
LEGEND
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(b) Standard & Poor's Corporation credit ratings are used in the
absence of a rating by Moody's Investors Service, Inc.
(c) Inverse floating rate security is a security where the coupon is
inversely indexed to a floating interest rate. The price will be more
volatile than the price of a comparable fixed rate security.
(d) Security collateralized by an amount sufficient to pay interest and
principal.
(e) Security purchased on a delayed delivery basis (see Note 2 of Notes to
Financial Statements).
(f) Security was pledged to cover margin requirements for futures
contracts. At the period end, the value of securities pledged amounted to
$1,106,950.
(g) Debt obligation initially issued in zero coupon form which converts to
coupon form at a specified rate and date.
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 85.5% AAA, AA, A 90.0%
Baa 7.0% BBB 2.4%
Ba 0.0% BB 0.0%
B 0.0% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
The percentage not rated by either S&P or Moody's amounted to 0.4%.
The distribution of municipal securities by revenue source, as a percentage
of total value of investment in securities, is as follows:
Lease Revenue 33.1%
Special Tax 20.1
Others (individually less
than 10%) 46.8
TOTAL 100.0%
INCOME TAX INFORMATION
At February 28, 1994, the aggregate cost of investment securities for
income tax purposes was $273,871,483. Net unrealized appreciation
aggregated $10,971,131, of which $14,074,614 related to appreciated
investment securities and $3,103,483 related to depreciated investment
securities.
The fund hereby designates $2,359,433 as a capital gain dividend for the
purpose of the dividend paid deduction.
FIDELITY CALIFORNIA TAX-FREE INSURED PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
FEBRUARY 28, 1994
147.ASSETS 148. 149.
150.Investment in securities, at value (cost 151. $ 284,842,614
$273,871,483) (Notes 1 and 2) - See accompanying
schedule
152.Cash 153. 130,026
154.Receivable for investments sold 155. 11,757,804
156.Interest receivable 157. 3,405,147
158.Receivable for daily variation on futures contracts 159. 22,500
160. 161.TOTAL ASSETS 162. 300,158,091
163.LIABILITIES 164. 165.
166.Payable for investments purchased $ 7,989,434 167.
Delayed delivery (Note 2)
168.Dividends payable 260,631 169.
170.Accrued management fee 104,568 171.
172.Other payables and accrued expenses 43,662 173.
174. 175.TOTAL LIABILITIES 176. 8,398,295
177.178.NET ASSETS 179. $ 291,759,796
180.Net Assets consist of (Note 1): 181. 182.
183.Paid in capital 184. $ 274,863,941
185.Accumulated undistributed net realized gain (loss) 186. 5,903,434
on investments
187.Net unrealized appreciation (depreciation) on: 188. 189.
190. Investment securities 191. 10,971,131
192. Futures contracts 193. 21,290
194.195.NET ASSETS, for 27,161,053 shares 196. $ 291,759,796
outstanding
197.198.NET ASSET VALUE, offering price and 199. $10.74
redemption price per share ($291,759,796 (divided by)
27,161,053 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED FEBRUARY 28, 1994
200.201.INTEREST INCOME 202. $ 17,357,295
203.EXPENSES 204. 205.
206.Management fee (Note 4) $ 1,240,128 207.
208.Transfer agent, accounting and custodian fees and 489,399 209.
expenses (Note 4)
210.Non-interested trustees' compensation 1,868 211.
212.Registration fees 11,273 213.
214.Audit 34,682 215.
216.Legal 2,596 217.
218.Reports to shareholders 12,607 219.
220. Total expenses before reductions 1,792,553 221.
222. Expense reductions (Note 9) (352,015) 1,440,538
223.224.NET INTEREST INCOME 225. 15,916,757
226.REALIZED AND UNREALIZED GAIN (LOSS) ON 228. 229.
INVESTMENTS
(NOTES 1 AND 3)
227.Net realized gain (loss) on:
230. Investment securities 13,524,569 231.
232. Futures contracts 628,258 14,152,827
233.Change in net unrealized appreciation 234. 235.
(depreciation) on:
236. Investment securities (16,401,673) 237.
238. Futures contracts (139,726) (16,541,399)
239.240.NET GAIN (LOSS) 241. (2,388,572)
242.243.NET INCREASE (DECREASE) IN NET ASSETS 244. $ 13,528,185
RESULTING FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR TEN MONTHS
ENDED ENDED
FEBRUARY 28, FEBRUARY 28, 1993
1994 (NOTE 1)
245.INCREASE (DECREASE) IN NET ASSETS
246.Operations $ 15,916,757 $ 10,158,424
Net interest income
247. Net realized gain (loss) on investments 14,152,827 1,333,021
248. Change in net unrealized appreciation (16,541,399) 19,225,483
(depreciation)
on investments
249. 13,528,185 30,716,928
250.NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM
OPERATIONS
251.Distributions to shareholders (15,916,757) (10,158,424)
From net interest income
252. From net realized gain (5,560,443) -
253. 254.TOTAL DISTRIBUTIONS (21,477,200) (10,158,424)
255.Share transactions 191,511,206 161,300,515
Net proceeds from sales of shares
256. Reinvestment of distributions from: 12,290,624 7,750,883
Net interest income
257. 4,540,746 -
Net realized gain
258. Cost of shares redeemed (183,505,791) (92,500,449)
259. 24,836,785 76,550,949
Net increase (decrease) in net assets resulting from
share transactions
260. 16,887,770 97,109,453
261.TOTAL INCREASE (DECREASE) IN NET ASSETS
262.NET ASSETS 263. 264.
265. Beginning of period 274,872,026 177,762,573
266. End of period $ 291,759,796 $ 274,872,026
267.OTHER INFORMATION 269. 270.
268.Shares
271. Sold 17,343,548 15,478,983
272. Issued in reinvestment of distributions from: 1,113,708 743,732
Net interest income
273. 417,348 -
Net realized gain
274. Redeemed (16,625,614) (8,911,574)
275. Net increase (decrease) 2,248,990 7,311,141
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
276. YEAR TEN MONTHS YEARS ENDED APRIL 30,
ENDED ENDED
FEBRUARY 28, FEBRUARY 28,
1993
277. 1994 (NOTE 1) 1992 1991 1990
278.SELECTED PER-SHARE DATA
279.Net asset value, $ 11.030 $ 10.100 $ 9.740 $ 9.370 $ 9.590
beginning of
period
280.Income from .589 .492 .603 .605 .618
Investment
Operations
Net interest income
281. Net realized and (.090) .930 .360 .370 (.220)
unrealized gain (loss)
on investments
282. Total from .499 1.422 .963 .975 .398
investment operations
283.Less Distributions (.589) (.492) (.603) (.605) (.618)
From net interest
income
284. From net realized (.200) - - - -
gain on investments
285. Total distributions (.789) (.492) (.603) (.605) (.618)
286.Net asset value, $ 10.740 $ 11.030 $ 10.100 $ 9.740 $ 9.370
end of period
287.TOTAL RETURN (dagger) 14.48% 10.14% 10.67% 4.15%
4.59%
288.RATIOS AND SUPPLEMENTAL DATA
289.Net assets, end of $ 291,760 $ 274,872 $ 177,763 $ 113,711 $ 87,438
period (000 omitted)
290.Ratio of expenses .48% .63%* .66% .72% .75%
to average net
assets (dagger)(dagger)
291.Ratio of expenses .60% .63%* .66% .72% .75%
to average net assets
before expense
reductions (dagger)(dagger)
292.Ratio of net 5.31% 5.72%* 6.06% 6.30% 6.38%
interest income to
average net assets
293.Portfolio turnover 60% 27%* 19% 14% 10%
rate
</TABLE>
* ANNUALIZED
(dagger) TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED. TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
(dagger)(dagger) SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS.
FIDELITY CALIFORNIA TAX-FREE MONEY MARKET PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Deborah Watson, Portfolio Manager of Fidelity California
Tax-Free Money Market Portfolio
Q. DEBORAH, HOW HAS THE SHORT-TERM MARKET BEHAVED OVER THE LAST SIX MONTHS?
A. Short-term interest rates remained stable through the fall, despite a
mild uptick in November fueled by inflation fears. The Federal Reserve kept
the federal funds rate at or near 3% from August through January. Then, on
February 4, the Fed pushed the fed funds rate up to 3.25%, essentially
raising all short-term rates.
Q. WAS THE FUND WELL POSITIONED FOR HIGHER RATES?
A. For the most part, yes. I had gradually reduced the fund's average
maturity through the fall and early winter; it fell from 81 days at the end
of August to 48 days at the end of January. The fund's shorter average
maturity will allow me to capture the higher yields available following
February's rate hike. In addition, supply and demand played a role in how I
positioned the fund earlier in the year. California usually issues its
heaviest supply of new obligations during the summer months, and 1993 was
no exception. I lengthened the fund's average maturity through August, and
was able to lock in higher-yielding issues before rates fell further.
Issuance then slowed heading into fall, which caused me to gradually
shorten the average maturity.
Q. HOW DID CALIFORNIA'S RECESSION AFFECT THE FUND?
A. The state's weak economy caused the financial health of many California
issuers to deteriorate. That meant there were fewer securities available
that met Fidelity's high standards for credit quality. However, I
compensated by buying more of those that did, resulting in little effect on
the fund's yield. Rebuilding efforts after January's earthquake should
boost economic growth in 1994. However, the annual borrowing season for
state and local governments is fast approaching, and their financial
picture hasn't improved. This may further reduce the supply of high quality
issues in California this summer.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on February was 1.91%, up slightly from 1.83%
a year ago. The latest yield translates into a tax equivalent yield of
3.35% for investors in the 43.04% combined federal and state tax bracket.
The fund's total return - which assumes reinvestment of monthly dividends -
for the 12 months ended February 28 was 1.97%. The average California
tax-free money market fund tracked by IBC/Donoghue returned 1.96% during
the same period.
Q. WHAT'S YOUR VIEW GOING FORWARD?
A. I think short-term interest rates will probably rise gradually over the
next six months, while the Fed continues inching up the fed funds rate to
control inflation. That said, I'll probably keep the fund's average
maturity in a neutral 35- to 50-day range. In addition, I've increased the
fund's stake in variable rate instruments to 59% by February 28. The
coupons (stated interest rates) on these securities are reset at fixed
intervals - for example, weekly or monthly - so when rates rise, the fund
can benefit from higher coupons at these reset intervals.
FUND FACTS
GOAL: tax-free income with
share price stability by
investing in high-quality,
short-term California municipal
securities
START DATE: July 7, 1984
SIZE: as of February 28, 1994,
$611 million
MANAGER: Deborah Watson,
since July 1988; manager,
Spartan California Municipal
Money Market Portfolio, since
November 1989; Spartan
Florida Municipal Money
Market Portfolio, since August
1992; Spartan Pennsylvania
Municipal Money Market
Portfolio, since September
1989
(checkmark)
WORDS TO KNOW
COMMERCIAL PAPER: A security
issued by a municipality to
finance capital or operating
needs.
FEDERAL FUNDS RATE: The interest
rate banks charge each other
for overnight loans.
MATURITY: The time remaining
before an issuer is scheduled
to repay the principal amount
on a debt security. When the
fund's average maturity -
weighted by dollar amount -
is short, the fund manager is
anticipating a rise in interest
rates. When the average
maturity is long, the manager
is expecting rates to fall.
When the average maturity is
neutral, the manager wants
the flexibility to respond to
rising rates, while still
capturing a portion of the
higher yields available from
issues with longer maturities.
MUNICIPAL NOTE: A security
issued in advance of future
tax or other revenues and
payable from those specific
sources.
TENDER BOND: A variable-rate,
long-term security that gives
the bond holder the option to
redeem the bond at face
value before maturity.
VARIABLE RATE DEMAND NOTE
(VRDN): A tender bond that
can be redeemed on short
notice, typically one or seven
days. VRDNs are useful in
managing the fund's average
maturity and liquidity.
FIDELITY CALIFORNIA TAX-FREE MONEY MARKET PORTFOLIO
PERFORMANCE: THE BOTTOM LINE
To measure a money market fund's performance, you can look at either total
return or yield. Total return reflects the change in a fund's share price
over a given period and reinvestment of its dividends (or income). Yield
measures the income paid by a fund. Since a money market fund tries to
maintain a $1 share price, yield is an important measure of performance. If
Fidelity had not reimbursed certain fund expenses during the periods shown,
the total returns, dividends and yields would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED FEBRUARY 28, 1994 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
California Tax-Free Money Market 1.97% 20.38% 49.06%
Consumer Price Index 2.52% 20.64% 41.47%
Average California Tax-Free
Money Market Fund 1.96% 20.22% n/a
CUMULATIVE TOTAL RETURNS reflect actual performance over a set period - in
this case, one year, five years or since the fund started on July 7, 1984.
For example, if you invested $1,000 in a fund that had a 5% return over the
past year, you would end up with $1,050. Comparing the fund's performance
to the consumer price index (CPI) helps show how your investment did
compared to inflation. To measure how the fund stacked up against its
peers, you can compare its return to the average California tax-free money
market fund's total return. This average currently reflects the performance
of 42 California tax-free money market funds tracked by IBC/Donoghue. (The
periods covered by the CPI and IBC/Donoghue numbers are the closest
available match to those covered by the fund.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 28, 1994 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
California Tax-Free Money Market 1.97% 3.78% 4.22%
Consumer Price Index 2.52% 3.82% 3.65%
Average California Tax-Free
Money Market Fund 1.96% 3.76% n/a
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
YIELDS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
2/28/93 5/31/93 8/31/93 11/30/93 2/28/94
California Tax-Free 1.83% 2.29% 1.97% 1.90% 1.91%
Money Market
Average California Tax-Free 1.75% 2.22% 2.01% 1.92% 1.96%
Money Market Fund
California Tax-Free 3.21% 4.02% 3.46% 3.34% 3.35%
Money Market Tax-equivalen
t
Average All Taxable 2.71% 2.62% 2.64% 2.69% 2.79%
Money Market Fund
</TABLE>
Row: 1, Col: 1, Value: 1.83
Row: 1, Col: 2, Value: 1.75
Row: 2, Col: 1, Value: 1.97
Row: 2, Col: 2, Value: 2.22
Row: 3, Col: 1, Value: 2.32
Row: 3, Col: 2, Value: 2.01
Row: 4, Col: 1, Value: 1.9
Row: 4, Col: 2, Value: 1.92
Row: 5, Col: 1, Value: 1.91
Row: 5, Col: 2, Value: 1.96
California
Tax-Free
Money Market
Average California
Tax-Free Money
Market Fund
3% -
2% -
1% -
0%
YIELD refers to the income paid by the fund over a given period. Yields for
money market funds are usually for seven-day periods, expressed as annual
percentage rates. A yield that assumes income earned is reinvested or
compounded is called an effective yield. The chart above shows the fund's
current seven-day yield at quarterly intervals over the past year. You can
compare these yields to the average tax-free money market fund. Or you can
look at the fund's tax-equivalent yield, which is based on a combined
effective 1994 federal and state income tax rate of 43.04%. The
tax-equivalent figures are useful in seeing how the fund stacked up against
the average taxable money market fund as tracked by IBC/Donoghue.
A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS REFLECT PAST RESULTS RATHER
THAN PREDICT FUTURE PERFORMANCE.
COMPARING
PERFORMANCE
Yields on tax-free investments
are usually lower than yields
on taxable investments.
However, a straight
comparison between the two
may be misleading because it
ignores the way taxes reduce
taxable returns. Tax-equivalent
yield - the yield you'd have to
earn on a similar taxable
investment to match the
tax-free yield - makes the
comparison more meaningful.
Keep in mind that the U.S.
government neither insures nor
guarantees a money market
fund. And there is no
assurance that a money fund
will maintain a $1 share price.
(checkmark)
FIDELITY CALIFORNIA TAX-FREE MONEY MARKET PORTFOLIO
INVESTMENT CHANGES
MATURITY DIVERSIFICATION
DAYS % OF FUND ASSETS % OF FUND ASSETS % OF FUND ASSETS
2/28/94 8/31/93 2/28/93
0 - 30 68.2 65.5 62.1
31 - 90 10.1 9.3 15.6
91 - 180 19.3 5.5 18.3
181 - 397 2.4 19.7 4.0
WEIGHTED AVERAGE MATURITY
2/28/94 8/31/93 2/28/93
California Tax-Free
Money Market 44 days 81 days 48 days
Average California
Tax-Free Money Market Fun 50 days 72 days 52 days
d*
ASSET ALLOCATION
AS OF 2/28/94 AS OF 8/31/93
Row: 1, Col: 1, Value: 59.0
Row: 1, Col: 2, Value: 14.7
Row: 1, Col: 3, Value: 3.9
Row: 1, Col: 4, Value: 22.0
Row: 1, Col: 5, Value: 2.0
Row: 1, Col: 1, Value: 54.1
Row: 1, Col: 2, Value: 11.7
Row: 1, Col: 3, Value: 5.9
Row: 1, Col: 4, Value: 27.0
Row: 1, Col: 5, Value: 3.0
Variable rate
demand notes
(VRDNs) 59.0%
Commercial
paper 14.7%
Tender bonds 3.9%
Municipal
notes 22.0%
Other 0.4%
Variable rate
demand notes
(VRDNs) 54.1%
Commercial
paper 11.7%
Tender bonds 5.9%
Municipal
notes 27.0%
Other 1.3%
* SOURCE: IBC/DONOGHUE'S MONEY FUND REPORT(Registered trademark)
FIDELITY CALIFORNIA TAX-FREE MONEY MARKET PORTFOLIO
INVESTMENTS/FEBRUARY 28, 1994
(Showing Percentage of Total Value of Investments)
MUNICIPAL SECURITIES (A) - 100%
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - 100.0%
ABAG Fin. Auth.
(L.S. Packard Children Hosp. at Stanford Proj.),
2.30%, (AMBAC Insured) (Liquidity Enhancement
Industrial Bank of Japan), VRDN $ 100,000 $ 100,000 00037EBJ
Alameda County Ind. Dev. Auth. Ind. Rev.:
(Jacobs Investment Co. Proj.) Series 1985 A, 2.60%,
LOC Bank of America, VRDN 3,800,000 3,800,000 011106AA
(Longview Fibre Co.) Series 1988, 2.45%,
LOC ABN-AMRO NV, VRDN 1,750,000 1,750,000 011106AD
Alameda County TRAN 3.25% 7/29/94 13,000,000 13,024,737 010878AB
Anaheim Ctfs. of Prtn. Series 1993, 2.25% 8/1/19,
(Liquidity Enhancement Industrial Bank of Japan Ltd.) 1,500,000
1,500,000 032540KQ
Anaheim Hsg. Auth. (Park Vista Apts) 2.50%
LOC Citibank, VRDN (b) 6,000,000 6,000,000 032557BH
Beverly Hills Pub. Fin. Auth. Lease Rev. Bonds,
Series 1993 A, 2.65 % 6/1/94 2,065,000 2,065,000 088006AA
Big Bear Lake Ind. Dev. (Southwest Gas Corp. Proj.)
Series 1993 A, 2.40%
LOC Union Bank of Switzerland, VRDN (b) 1,400,000 1,400,000 08901KAR
California Dept. of Wtr. Resources Tender Option Ctfs.
Series R-4, 2.50% (Liquidity Enhancement Svenska
Handelsbanken), VRDN (c) 17,000,000 17,000,000 130663W3
California Edl. Facs. Auth. Rev. Rfdg. Series L-1
(Stanford University) 2.50% VRDN 5,055,000 5,055,000 130174QL
California Gen. Oblig. Adj. Rate RAN, 2.55%
6/28/94 14,000,000 14,000,000 130619D5
California Gen. Oblig. RAN, Series 1993-94,
3.50% 6/28/94 17,160,000 17,192,758 130619D4
California Health. Facs. Fing. Auth. Rev.
(Kaiser Permanente)
Series A, 2.35% VRDN 3,400,000 3,400,000 13033J3L
California Hsg. Fin. Agcy. Home Mtg. Rev. Custodial Receipts:
Series 4A, 2.60%, (Liquidity Enhancement
Dai-ichi Kangyo Bank), VRDN (b) (c) 5,000,000 5,000,000 13033CQS
Series 15B, 2.60% (Liquidity Enhancement Dai-ichi
Kangyo Bank), VRDN (b) (c) 2,415,000 2,415,000 13033CWH
California Hsg. Fin. Agcy. Home Mtg. Rev.
Series 1993 F 2.40% 9/15/94, MT (b) 10,000,000 9,988,952 13033CZ5
California Hsg. Fin. Agcy. Rev. Custodial Receipts
Series 15A, 2.60%, (Liquidity Enhancement Dai-ichi
Kangyo Bank), VRDN (b) (c) 3,815,000 3,815,000 13033CWJ
California Hsg. Fin. Auth. Rev., VRDN:
(Camino Colony Apts.)
Series 1993 B, 2.50% LOC Federal Home Loan
Bank of San Francisco 2,000,000 2,000,000 13033CP8
MUNICIPAL SECURITIES (A) - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
California Poll. Cont. & Fin. Auth. CP mode:
(Pacific Gas & Elec. Co.):
Rfdg. Series 1988 B, 2.55% 4/25/94,
LOC Sumitomo Bank of Japan Ltd., CP mode (b) $ 2,500,000 $ 2,500,000
130995GE
Series 1988 A, LOC Swiss Bank, CP mode(b):
2.40% 4/13/94 2,000,000 2,000,000 130995FW
2.45% 4/22/94 5,000,000 5,000,000 130995GD
2.60% 5/12/94 3,000,000 3,000,000 130995GL
2.60% 5/13/94 3,500,000 3,500,000 130995GK
Series 1988 B, LOC Sumitomo Bank, CP mode (b):
2.60% 5/16/94 5,000,000 5,000,000 130995GJ
2.60% 5/20/94 2,000,000 2,000,000 130995GQ
Series 1988 D, 2.35% 3/23/94,
LOC Bank of Tokyo, CP mode 2,000,000 2,000,000 130995FX
Series 1988 E, 2.50% 5/16/94,
LOC Morgan Gauranty Trust Co., CP mode 3,000,000 3,000,000 130995GM
Series 1988 F, 2.50% 4/20/94,
LOC Banque Nationale De Paris, CP mode 2,000,000 2,000,000 130995GH
(Southern California Edison Co.)
Series 1985 D, 2.50% 4/18/94, CP mode 2,000,000 2,000,000 130995GG
California Poll. Cont. Fing. Auth. Solid Waste Disp. Rev.
(Western Waste Ind.) 2.825%, Citibank, VRDN 2,200,000 2,200,000
130536AW
California Poll. Cont. Rev. Fing. Auth. Resource Recovery Rev:
(Delano Proj.) VRDN (b):
Series 1989, 2.30%, LOC ABN-AMRO NV 600,000 600,000 130535AZ
Series 1991, 2.30%, LOC ABN-AMRO NV 500,000 500,000 130535BE
(Malaga Proj.) Series A,2.35%,
LOC Bank of America, VRDN (b) 800,000 800,000 130535AP
California Statewide Commty. Dev. Auth. Rev., VRDN:
(Covenant Retirement Commty.) 2.45% 12/1/22,
LOC Lasalle Nat'l Bank 2,300,000 2,300,000 130907CX
(Delancey Street Foundation) 2.55% 3/1/03,
LOC Bank of America 3,125,000 3,125,000 130907CY
(Florestone Prod. Co.) Series 1989, 2.45%,
LOC Bank of Tokyo (b) 1,030,000 1,030,000 130905AF
(Tri-H Foods Proj.) Series 1991, 2.90%,
LOC Bank of Tokyo(b) 2,375,000 2,375,000 130905BP
California Various Purpose Gen. Oblig.
Custodial Receipts 2.45% 10/15/93, (AMBAC Insured),
(Liquidity Enhancement Citibank) MT 8,000,000 8,000,000 130622WG
Chula Vista Ind. Dev. Rev.
(San Diego Gas & Elec. Co.) (b):
Series B, 2.45%, VRDN 1,000,000 1,000,000 17131HAB
MUNICIPAL SECURITIES (A) - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Chula Vista Ind. Dev. Rev. - continued 17199BBA
(San Diego Gas & Elec. Co.) (b) - continued 17199BBA
Series D, 2.30% 3/01/94, CP mode $ 2,000,000 $ 2,000,000 17199BBA
Series E, CP mode:
2.65% 3/10/94 2,500,000 2,500,000 17199BAS
2.70% 3/11/94 2,000,000 2,000,000 17199BAT
Concord Hsg. Auth. (Arcadian Apt. Proj.) First Nationwide
Grantor Trust Series 1991-1D, 2.50%, LOC Federal
Home Loan Bank of San Francisco, VRDN (c)(d) 2,800,000 2,800,000
33581FAK
Del Mar Race Track Auth. 2.60% 5/26/94
LOC Societe Generale, CP 5,000,000 5,000,000 2451259A
Duarte Single-Family Mtg. Rev Trust Ctfs.
2.70% (Liquidity Enhancement Norwest Bank)
(Escrowed to Maturity) VRDN (c) 3,100,000 3,100,000 263595AY
East Bay Muni. Util. Dist. Wtr. Sys. Rev.
2.55% 5/23/94, CP 3,000,000 3,000,000 2710149X
Escondido Commty. Dev. Commission Rev.
(Promeneade Proj.) 2.65%,
LOC Bank of America, VRDN (b) 4,000,000 4,000,000 296338AA
Fontana (Oakcrest Apt. Proj.)
First Nationwide Grantor Trust Series 1991-1G,
2.50% LOC Federal Home Loan Bank of
San Francisco, VRDN (c) 1,100,000 1,100,000 33581FAD
Fremont Bldg. and Equip. Acquisition Fing. Proj.
(Fremont Park Facs. Corp.) 3.85%,
LOC Mitshbishi Trust & Banking, VRDN 2,600,000 2,600,000 357122BA
Fresno County Unified School Dist. TRAN 3.50%
8/11/94 8,500,000 8,516,558 358232AD
Fresno TRAN 3% 6/30/94 1,500,000 1,500,535 358082FQ
Hayward Hsg. Auth. Rev. (Foothills Garden Apts.)
Series 1985 A, 2.35%, LOC Citibank, VRDN 7,650,000 7,650,000 421227AA
Huntington Beach Multi-Family Hsg. Rev.
(Seabridge Villas Proj.) 1985 A, 2.25%,
LOC Bank of America, VRDN 2,000,000 2,000,000 446196AA
Irvine Pub. Facs. & Infrastructure Auth. Lease Rev.
Series 1985, 2.40%, LOC Nat'l Westminister
Bank, VRDN 7,600,000 7,600,000 463904AA
Irvine Ranch Wtr. Dist. Rev. (Cap. Impt. Proj.) 2.20%,
LOC Morgan Gauranty, VRDN 400,000 400,000 463641AR
Kern County TRAN 3.25% 7/5/94 5,000,000 5,009,242 492248AA
Lancaster Redev. Agcy. Multi-Family Hsg. Rev.
(Westwood Park Apt.) Series 1985-K, 4.35%,
LOC Bank of America, VRDN 1,200,000 1,200,000 513795AJ
Livermore Ctfs. of Prtn. (Wtr. Reclamation Plant
Expansion Proj.) 2.40%, LOC Westminister
Nat'l. Bank, VRDN 2,000,000 2,000,000 538164CQ
MUNICIPAL SECURITIES (A) - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Loma Linda Multi-Family Hsg. Rev. (Loma Linda
Springs Apts.) Series 1989, 3.60%,
LOC Tokai Bank, VRDN (b) $ 1,490,000 $ 1,490,000 541905AB
Los Angeles Ctfs. of Prtn. (Baldwin Hills Public
Parking Facs.) Series 1984,2.55% 12/1/14,
LOC Wells Fargo Bank, VRDN 10,000,000 10,000,000 544391AU
Los Angeles Commty. College Dist. TRAN
Series 1993-94, 3.25% 7/6/94 4,000,000 4,007,453 54438CAA
Los Angeles Commty. Redev. Agcy.
(CMC Med. Plaza) 2.60%,
LOC Bank of America, VRDN 600,000 600,000 544391BQ
Los Angeles Commty. Redev. Agcy.
Multi-Family Hsg. Rev. (Grand Promenade Proj.)
Series 1985, 3%, LOC Tokai Bank Ltd., VRDN 1,700,000 1,700,000 544393AD
Los Angeles County Hsg. Auth. (Sand Canyon)
Series 1985F, 2.35%, LOC Citibank, VRDN 2,500,000 2,500,000 544688BC
Los Angeles County Hsg. Auth. Multi-Family Hsg. Rev.
(Malibu Meadows Proj.) Series 1991 A, 2.60%,
LOC Sumitomo Bank Ltd. VRDN 4,000,000 4,000,000 544688GD
(Sand Canyon Villas Proj.) Series 1989 A, 2.60%,
LOC Ind. Bank of Japan, VRDN 3,300,000 3,300,000 544688GC
Los Angeles County Metropolitan Trans. Auth.
Series 1993 A, 2.30%, (Liquidity Enhancement Industrial
Bank of Japan Ltd.), VRDN 13,400,000 13,400,000 544712AV
Los Angeles County Pub. Wks. Floating Rate
Trust Ctfs., Series 8, 2.55% (Liquidity
Enhancement Credit Suisse), VRDN (c) 7,695,166 7,695,166 31303KAA
Los Angeles County TRAN, Series B 93-94,
(Liquidity Enhancement Credit Suisse), CP mode 2,000,000 2,000,000
5446579L
Los Angeles County Transit Commty. Custodial Receipts,
Series 1992 B-37, 2.80%, (Liquidity Enhancement
Sakura Bank) (MBIA Insured), VRDN (c) 2,890,000 2,890,000 545170JQ
Los Angeles County Unified School Dist. TRAN 3.25%
7/15/94 10,000,000 10,017,000 544644AE
Los Angeles Custodial Receipts, Series A-2, 2.80%,
(Liquidity Enhancement Sakura Bank Ltd.)
(BIG Insured), VRDN 6,135,000 6,135,000 55377EAM
Los Angeles Dept. of Wtr. & Pwr. Elec. Plant
(Short Term Prog.) 2.55% 5/23/94, CP 1,000,000 1,000,000 5445219C
Los Angeles Dept. of Wtr. & Pwr. Elec. Plant Rev.
Issue 93, 2.65%, (Liquidity Enhancement
Banker's Trust), VRDN (c) 3,600,000 3,600,000 544506JM
Los Angeles Dept. of Wtr. & Pwr. Elec. Plant Rev. Tender
Option Ctfs. Series M, 2.70% (Liquidity Enhancement
Sanwa Bank), VRDN (c) 5,500,000 5,500,000 544506JM
MUNICIPAL SECURITIES (A) - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Los Angeles Hsg. Auth. Multi-Family Hsg. Rev.
(River Park Apt.) Series 1988 D, 2.70%,
LOC Dai-Ichi Kangyo Bank, VRDN $ 2,100,000 $ 2,100,000 544688GB
Los Angeles Multi-Family Hsg. Rev.:
(Beverly Park Apts.) Series 1988 A, 2.40%,
LOC Barclay's Bank, VRDN (b) 3,500,000 3,500,000 544582GV
(Channel Gateway Apts.) Series 1989 B, 2.65%,
LOC Fuji Bank, VRDN (b) 15,900,000 15,900,000 544582GX
(Studio Colony Proj.) Series 1985 C, 2.45%,
LOC Industrial Bank of Japan, VRDN 1,900,000 1,900,000 544582CC
Los Angeles Wastewtr. Sys. Rev.
(Liquidity Enhancement Sumitomo Bank), CP:
2.40% 3/14/94 3,800,000 3,800,000 544999AL
2.60% 3/16/94 4,100,000 4,100,000 544999AK
2.40% 3/17/94 2,300,000 2,300,000 544999AM
2.60% 5/18/94 2,700,000 2,700,000 544999AP
Los Angeles Wastewtr. Sys. Rev. Bonds Series B,
8.80% 6/01/94, (MBIA Insured) 550,000 558,209 544652SX
Los Angeles Variable Rate Multifamily Hsg. Rev.
(Museum Terrace Apt. Proj.) Series H, 2.40%,
LOC Bank of America, VRDN 3,800,000 3,800,000 544582AP
Madera County TRAN 3.25% 9/30/94 2,000,000 2,004,203 556903AN
Midpeninsula Regional Space Dist.
(Santa Clara & San Mateo Counties) Series A, 2.70%,
LOC Fuji Bank, VRDN 3,800,000 3,800,000 598022BE
Oceanside Multi-Family Mtg. Rev.
(Riverview Springs Apts.) Series 1990 A, 2.60%,
LOC Bank of Tokyo, VRDN (b) 900,000 900,000 675370AB
Olcese Wtr. Dist. (Rio Bravo Wtr. Delivery Sys. Proj.)
Series 1986 A, 2.40% 3/29/94,
LOC Sumitomo Bank, Ltd., CP mode (b) 2,800,000 2,800,000 6794749P
Ontario Ind. Dev. Auth. Rev. (Safari Land Proj.)
Series 1989, 3.25% 8/1/14,
LOC Tokai Bank, VRDN(b) 1,000,000 1,000,000 682908AA
Orange County Apt. Dev. Rev.:
(Bear Brands Apt.) Issue Z 1985, 2.35%,
LOC Fuji Bank, VRDN 4,800,000 4,800,000 684209JQ
(Foothill Oaks Apts. Proj.) Issue 1989 B, 2.50%,
Bank of America, VRDN (b) 3,100,000 3,100,000 684209JW
(Laguna Summit Apts.) Series 1985 X, 3%,
LOC Tokai Bank, VRDN 800,000 800,000 684209JN
(Niguel Summit II) Issue 1985, Series B, 2.50%,
LOC Bank of America, VRDN 4,740,000 4,740,000 684209JL
MUNICIPAL SECURITIES (A) - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Orange County Apt. Dev. Rev.: - continued
(Park Place Apts. Proj.) Series 1989 A, 3.40%,
LOC Tokai Bank, VRDN (b) $ 1,000,000 $ 1,000,000 684209JV
(Villa Marguerite Apts.) Series 1993 A, 2.40%,
LOC Wells Fargo Bank, VRDN 2,600,000 2,600,000 684209KE
(Vista Verde Apt. Proj.) Series 1988 A, 3.30%,
LOC Wells Fargo Bank, VRDN (b) 1,800,000 1,800,000 684209JU
(WLCO Partners) Series 1985 C-1, 3.20%,
LOC Tokai Bank Ltd., VRDN 1,000,000 1,000,000 684209CT
Orange County (Irvine Coast Assessment District #88-1)
2.60%, LOC Fuji Bank, Ind. Bank of Japan,
Mtsubishi Bank, VRDN 1,000,000 1,000,000 684265AV
Orange County Hsg. Auth. Apt. Dev. Rev.
(Costa Mesa Partners) Series 1985-BB, 3.25%,
LOC Tokai Bank, VRDN 17,100,000 17,100,000 684262AF
Orange County San. Dist. Rev. (#1,2,3,5,6,7, 11)
2.30%, (Liquidity Enhancement Industrial Bank of
Japan), VRDN (d) 5,000,000 5,000,000 684285BL
Orange County TRAN 3% 6/30/94 5,000,000 5,007,190 684201EF
Orange County Trans. Corridor Agcy. Rev.
(Foothill/Eastern) 2.25%
LOC Morgan Gauranty, VRDN 3,600,000 3,600,000 345105AA
Orange County Wtr. Dist. Ctfs. of Prtn. Rev.
Series 1990 B, 3.25%,
LOC Nat'l. Westminster Bank, VRDN 1,000,000 1,000,000 684420BR
Oxnard Redev. Agcy. Ctfs. of Prtn. Rev.
(Channel Islands Bus. Ctr. Proj.) 2.875%,
LOC Wells Fargo Bank, VRDN 3,195,000 3,195,000 692018AA
Paramount Hsg. Auth. Multi-Family Hsg. Rev.
Rfdg. (Centry Place Apt. Proj.) 2.55%,
LOC Dai-Ichi Kangyo Bank, VRDN 5,600,000 5,600,000 699195AB
Pleasonton (Vally Plaza II Proj.) First Nationwide
Grantor Trusty Series 1991-1L, 2.50%
LOC Federal Home Loan Bank of
San Francisco, VRDN (c) 1,000,000 1,000,000 699195AB
Rancho Wtr. Dist. Fin. Auth. Rev. Rfdg. Floating Option
Tax-Exempt Receipts Series PA-62, 2.55%, (Liquidity
Enhancement Merrill Lynch & Co. Inc.) VRDN (c) 2,600,000 2,600,000
752111DD
Redlands Multi-Family Hsg. Rev. (Parkview Terrace Proj.),
2.45%, LOC Bank of America, VRDN 1,600,000 1,600,000 757591AD
Riverside Multifamily Hsg. Rev.
(Victoria Springs Apts.) Series 1989 C, 2.70%,
LOC Bank of Amercia, VRDN (b) 1,500,000 1,500,000 76911MBS
MUNICIPAL SECURITIES (A) - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Sacramento (Smoketree Apt. Proj.) First Nationwide
Grantor Trust Series 1991-1K, 2.50% LOC Federal
Home Loan Bank of San Francisco, VRDN (c) $ 2,000,000 $ 2,000,000
786106DM
Sacramento County TRAN, 3% 7/29/94 7,000,000 7,010,225 786106DM
Sacramento Muni. Util. Dist. Rev.
Series H, LOC Bank of America, CP:
2.30% 3/23/94 3,000,000 3,000,000 785995MM
2.50% 4/19/94 3,800,000 3,800,000 785995MN
2.60% 5/19/94 8,000,000 8,000,000 785995MQ
San Bernardino (Quail Pte. Apt. Proj.) First Nationwide
Grantors Trust Series 1991-1N, 2.50%, LOC Federal
Home Loan Bank of San Francisco, VRDN (c) 1,500,000 1,500,000 796900BJ
San Bernadino County Mtg. Rev. Rfdg.
(Pepperwood Apts.) Series 1993 A, 2.40%,
LOC Fed Home Loan Bank of San Francisco, VRDN 4,000,000 4,000,000
796900CL
San Bernadino County Multi-Family Hsg. Rev.:
(Cedarbrook Terrace Apts. Proj.) Series 1990 A, 3.60%,
LOC Sumitrust, VRDN 2,000,000 2,000,000 796900CF
(Western Properties II) 2.40%,
LOC Bank of America, VRDN 500,000 500,000 796900BJ
(Western Properties IV) 2.40%,
LOC Bank of America, VRDN 1,500,000 1,500,000 796900BM
(Western Properties V Proj.) 2.40%,
LOC Bank of America, VRDN 800,000 800,000 796900BN
San Diego Commty. College Dist. TRAN Series,
3.15% 6/30/94 2,000,000 2,002,900 797272AA
San Diego Hsg. Auth. Multi-Family Hsg. Rev.:
(Carmel Del Mar Apr. Proj.) Series 1993-E, 2.55%,
LOC Citibank, VRDN 3,000,000 3,000,000 79728FEU
(La Cima Apts.) Issue 1985 K, 2.95% 12/1/08,
LOC Daiwa Bank, Ltd., VRDN 2,000,000 2,000,000 79728FES
(Nobel Court Apt.)Series 1985 L:
2.50%, LOC Citibank, VRDN 3,825,000 3,825,000 79728FEQ
2.95%, LOC Tokai Bank, VRDN 2,600,000 2,600,000 79728FET
San Diego Multi-Family Hsg. Rev. Rfdg.
(Coral Pointe Apt. Proj.) Series 1993 A, 2.65%
(Liquidity Enhancement Continental Casualty
Company), VRDN 3,265,000 3,265,000 79729HEQ
San Diego TAN Series 1993-94 A, 3% 6/30/94 5,000,000 5,002,121 797236SM
San Diego Unified School Dist. TRAN Series 1993-94 A,
3.50% 8/10/94 6,000,000 6,013,827 797355HH
San Francisco City & County Multi-Family Hsg. Rev. Bond
(Winterland Proj.) 2.35% LOC Citibank, VRDN 6,150,000 6,150,000
79765PCH
MUNICIPAL SECURITIES (A) - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
San Francisco Multi-Family Redev. Agcy. Hsg. Auth. Rev.
(Rincon Ctr.) Series 1985 B, 2.35%, LOC Citibank,
VRDN $ 13,405,000 $ 13,405,000 79765TAA
San Francisco Redev. Agcy. Rev.
(St. Francis Place Proj.) Series 1989 A, 3.25%,
LOC Mitsubishi Trust & Banking, VRDN 6,500,000 6,500,000 79771MAM
San Jose Multi-Family Hsg. Rev. (Kimberly Woods)
Series 1984, 2.40%, LOC Bank of America,
VRDN 3,100,000 3,100,000 798165AB
San Mateo County TRAN Series 1993-94,
3% 6/30/94 6,000,000 6,009,693 799034AB
Santa Ana Ind. Dev. Auth. Rev.
(Grand Partnership Proj.)
(Grand Plaza Dev. Co.) 2.875%,
LOC Wells Fargo Bank, VRDN 1,500,000 1,500,000 801082AA
(McFadden Properties Proj.) 2.55%,
LOC Bank of America, VRDN 400,000 400,000 801130AA
Santa Clara County TRAN Series 1993-94,
3.25% 7/29/94 12,750,000 12,775,081 801546LF
Santa Clara Elec. Sys. Rev. Series A, 2.30%
LOC National Westminster Bank, VRDN 1,000,000 1,000,000 801444AZ
Santa Cruz County TRAN Series 1993-94,
3.25% 8/1/94 5,000,000 5,005,473 801818CQ
Simi Valley Multi-Family Hsg. Rev. (Shadowridge Apts.)
Series 1989, 2.50%, LOC Citibank, VRDN (b) 3,800,000 3,800,000 828905BX
Solano County TRAN 3.25% 11/01/94 1,000,000 1,002,497 834127BH
Sonoma County TRAN Series 1993-94, 3.50%
8/2/94 4,000,000 4,008,126 835546BU
Southern California Pub. Pwr. Auth. Rev.
(Tran Mission Proj.) Series 1991, 2.50%,
LOC Swiss Bank, (AMBAC Insured), VRDN 8,500,000 8,500,000 842477HH
Stockton Hosp. Rev. (St. Joseph's Hosp.)
Series 1985 A, 2.45%,
LOC Dai-Ichi Kangyo Bank, VRDN 10,600,000 10,600,000 861344AY
Stockton Unified School Dist. TRAN 3% 12/14/94 2,000,000 2,006,812
861419FM
Torrance Hospital Rev.
(Little Co. of Mary Hosp.-Torrance Memorial Med Ctr.)
Series 1992, 2.45%, LOC Fuji Bank, VRDN 5,500,000 5,500,000 891368BX
Tustin, Orange County Assessment Dist. 85-1
LOC Mitsubihsi Trust, CP mode:
3.30% 3/2/94 5,000,000 5,000,000 901991MT
3.30% 3/4/94 3,700,000 3,700,000 901991MV
MUNICIPAL SECURITIES (A) - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Upland Commty. Redev. Agcy. Multi-Family Hsg.:
(Northwoods) 1989 B, 2.50%,
LOC Sanwa Bank, VRDN $ 3,950,000 $ 3,950,000 915354AB
(Pebble Grove Proj.) Series 1989 C, 2.55%,
LOC Sanwa Bank, VRDN 2,675,000 2,675,000 915354AD
Ventura County TRAN 3% 8/1/94 2,000,000 2,001,078 923035AG
Washington Township Hosp. Dist., Series 1985 A, 2.45%,
LOC Bank of Tokyo, VRDN 7,400,000 7,400,000 940212AR
Woodland (Crossroads Villiage Apt. Proj.) Nationwide
Grantor Trust Series 1991-1H, 2.50%, LOC Federal
Home Loan Bank of San Francisco, VRDN (c) 1,220,000 1,220,000 940212AR
TOTAL INVESTMENTS - 100% $ 605,479,836
Total Cost for Income Tax Purposes $ 605,479,143
SECURITY TYPE ABBREVIATIONS
BAN - Bond Anticipation Notes
CP - Commercial Paper
FRDN - Floating Rate Demand Notes
MT - Mandatory Tender
OT - Optional Tender
RAN - Revenue Anticipation Notes
TAN - Tax Anticipation Notes
TRAN - Tax & Revenue Anticipation Notes
VAN - Variable Rate Tax & Revenue
Anticipation Notes
VRDN - Variable Rate Demand Notes
LEGEND
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(b) Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals (AMT securities).
(c) Provides evidence of ownership in one or more underlying municipal
bonds.
(d) Security purchased on a delayed delivery basis (see Note 2 of Notes to
Financial Statements).
INCOME TAX INFORMATION
At February 28, 1994, the fund had a capital loss carryforward of
approximately $105,800 of which $24,500, $52,500 and $28,800 will expire on
February 28, 1996, 1997 and 2000, respectively.
FIDELITY CALIFORNIA TAX-FREE MONEY MARKET PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
FEBRUARY 28, 1994
294.ASSETS 295. 296.
297.Investment in securities, at value (Note 1) - See 298. $ 605,479,836
accompanying schedule
299.Cash 300. 6,931,622
301.Interest receivable 302. 4,003,389
303. 304.TOTAL ASSETS 305. 616,414,847
306.LIABILITIES 307. 308.
309.Payable for investments purchased $ 4,308,948 310.
Delayed Delivery (Note 2)
311.Dividends payable 10,667 312.
313.Accrued management fee 203,769 314.
315.Other payables and accrued expenses 126,152 316.
317. 318.TOTAL LIABILITIES 319. 4,649,536
320.321.NET ASSETS 322. $ 611,765,311
323.Net Assets consist of (Note 1): 324. 325.
326.Paid in capital 327. $ 611,872,536
328.Accumulated net realized gain (loss) on 329. (108,676)
investments
330.Unrealized gain from accretion of market 331. 1,451
discount (Note 1)
332.333.NET ASSETS, for 611,896,376 shares 334. $ 611,765,311
outstanding
335.336.NET ASSET VALUE, offering price and 337. $1.00
redemption price per share ($611,765,311 (divided by)
611,896,376 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED FEBRUARY 28, 1994
338.339.INTEREST INCOME 340. $ 14,010,724
341.EXPENSES 342. 343.
344.Management fee (Note 4) $ 2,236,908 345.
346.Transfer agent, accounting and custodian fees and 1,174,267 347.
expenses (Note 4)
348.Non-interested trustees' compensation 6,855 349.
350.Registration fees 2,752 351.
352.Audit 25,946 353.
354.Legal 5,565
355.Miscellaneous 8,969 356.
357. 358.TOTAL EXPENSES 359. 3,461,262
360.361.NET INTEREST INCOME 362. 10,549,462
363.REALIZED AND UNREALIZED GAIN (LOSS) ON 365. 26,686
INVESTMENTS
(NOTE 1)
364.Net realized gain (loss) on investment securities
366.Increase (decrease) in net unrealized gain from 367. 1,451
accretion
of market discount
368.369.NET GAIN (LOSS) 370. 28,137
371.372.NET INCREASE IN NET ASSETS RESULTING FROM 373. $ 10,577,599
OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR TEN MONTHS
ENDED ENDED
FEBRUARY 28, FEBRUARY 28, 1993
1994 (NOTE 1)
374.INCREASE (DECREASE) IN NET ASSETS
375.Operations $ 10,549,462 $ 10,446,282
Net interest income
376. Net realized gain (loss) on investments 26,686 1,934
377. Increase (decrease) in net unrealized gain from 1,451 -
accretion of market discount
378. 10,577,599 10,448,216
379.NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM
OPERATIONS
380.Dividends to shareholders from net interest income (10,549,462) (10,446,282)
381.Share transactions at net asset value of $1.00 per 1,472,161,834 832,985,394
share
Proceeds from sales of shares
382. Reinvestment of dividends from net interest 10,140,028 10,024,575
income
383. Cost of shares redeemed (1,438,844,793) (831,247,780)
384. 43,457,069 11,762,189
Net increase (decrease) in net assets and shares
resulting from share transactions
385. 43,485,206 11,764,123
386.TOTAL INCREASE (DECREASE) IN NET ASSETS
387.NET ASSETS 388. 389.
390. Beginning of period 568,280,105 556,515,982
391. End of period $ 611,765,311 $ 568,280,105
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
392. YEAR TEN MONTHS YEARS ENDED APRIL 30,
ENDED ENDED
FEBRUARY 28, FEBRUARY 28,
1993
393. 1994 (NOTE 1) 1992 1991 1990
394.SELECTED PER-SHARE DATA
395.Net asset $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
value, beginning
of period
396.Income from .020 .019 .035 .047 .054
Investment
Operations
Net interest
income
397.Less (.020) (.019) (.035) (.047) (.054)
Distributions
From net interest
income
398.Net asset $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
value, end of
period
399.TOTAL 1.92% 3.59 4.85 5.53
RETURN (dagger) 1.97 % % %
%
400.RATIOS AND SUPPLEMENTAL DATA
401.Net assets, $ 611,765 $ 568,280 $ 556,516 $ 538,791 $ 623,748
end of period
(000 omitted)
402.Ratio of .64 .62%* .63 .61 .60
expenses to % % % %
average net
assets
403.Ratio of net 1.95 2.29%* 3.50 4.75 5.42
interest income to % % % %
average net
assets
</TABLE>
* ANNUALIZED
(dagger) TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
NOTES TO FINANCIAL STATEMENTS
For the period ended February 28, 1994
1. SIGNIFICANT ACCOUNTING
POLICIES.
Fidelity California Tax-Free High Yield Portfolio (the high yield fund) and
Fidelity California Tax-Free Insured Portfolio (the insured fund) are funds
of Fidelity California Municipal Trust. Fidelity California Tax-Free Money
Market Portfolio (the money market fund) is a fund of Fidelity California
Municipal Trust II. Each trust is registered under the Investment Company
Act of 1940, as amended (the 1940 Act), as an open-end management
investment company. Fidelity California Municipal Trust and Fidelity
California Municipal Trust II (the trusts) are organized as a Massachusetts
business trust and a Delaware business trust, respectively. On November 19,
1992, the Trustees approved a change in the fiscal year-end of the trusts
to February 28. Each fund is authorized to issue an unlimited number of
shares. The following summarizes the significant accounting policies of the
funds:
SECURITY VALUATION.
HIGH YIELD AND INSURED FUNDS. Securities are valued based upon a
computerized matrix system and/or appraisals by a pricing service, both of
which consider market transactions and dealer-supplied valuations.
Short-term securities maturing within sixty days are valued either at
amortized cost or original cost plus accrued interest, both of which
approximate current value. Securities for which quotations are not readily
available through the pricing service are valued at their fair value as
determined in good faith under consistently applied procedures under the
general supervision of the Board of Trustees.
MONEY MARKET FUND. As permitted under Rule 2a-7 of the 1940 Act, and
certain conditions therein, securities are valued initially at cost and
thereafter assume a constant amortization to maturity of any discount or
premium.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, each fund is not subject to income taxes to
the extent that it distributes all of its taxable income for the fiscal
year. The schedules of investments include information regarding income
taxes under the caption "Income Tax Information."
INTEREST INCOME. Interest income, which includes amortization of premium
and accretion of original issue discount, is accrued as earned. For the
money market fund, accretion of market discount represents unrealized gain
until realized at the time of a security disposition or maturity.
EXPENSES. Most expenses of each 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. Dividends are declared daily and paid
monthly from net interest income. Distributions to shareholders from
realized capital gains on investments, if any, are recorded on the
ex-dividend date.
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
losses deferred due to wash sales and futures and options transactions.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
CHANGE IN ACCOUNTING FOR DISTRIBUTIONS TO SHAREHOLDERS. Effective March 1,
1993 the funds adopted Statement of Position 93-2: Determination,
Disclosure, and Financial Statement Presentation of Income, Capital Gain,
and Return of Capital Distributions by Investment Companies. As a result,
the funds changed the classification of distributions to shareholders to
better disclose the differences between financial statement amounts and
distributions determined in accordance with income tax regulations.
Accordingly, amounts as of February 28, 1994 have been reclassified as
follows:
HIGH YIELD FUND. Paid in capital and accumulated net realized loss on
investments decreased by $525,684.
INSURED FUND. Paid in capital and accumulated net realized loss on
investments decreased by $42,568.
MONEY MARKET FUND. Paid in capital and accumulated net realized loss on
investments increased by $2,034.
2. OPERATING POLICIES.
FUTURES CONTRACTS AND OPTIONS. The high yield and insured funds may invest
in futures contracts and write options. These investments involve to
varying degrees, elements of market risk and risks in excess of the amount
recognized in their Statements of Assets and Liabilities. The face or
contract amounts reflect the extent of the involvement the high yield and
insured funds have in the particular classes of instruments. Risks may be
caused by an imperfect correlation between movements in the price of the
instruments and the price of the underlying securities and interest rates.
Risks also may arise if there is an illiquid secondary market for the
instruments, or due to the inability of counterparties to perform.
Futures contracts are valued at the settlement price established each day
by the board of trade or exchange on which they are traded. Options traded
on an exchange are valued using the last sale price or, in the absence of a
sale, the last offering price. Options traded over-the-counter are valued
using dealer-supplied valuations.
DELAYED DELIVERY TRANSACTIONS. Each fund may purchase or sell securities on
a when-issued or forward commitment basis. Payment and delivery may take
place a month or more after the date of the transaction. The price of the
underlying securities and the date when the securities will be delivered
and paid for are fixed at the time the transaction is negotiated.
3. PURCHASES AND SALES OF
INVESTMENTS.
HIGH YIELD FUND. Purchases and sales of securities, other than short-term
securities, aggregated $251,239,277 and $251,166,205, respectively. The
gross market value of futures contracts opened and closed amounted to
$231,823,309 and $244,703,050, respectively.
INSURED FUND. Purchases and sales of securities, other than short-term
securities, aggregated $196,311,161 and $170,227,006, respectively. The
gross market value of futures contracts opened and closed amounted to
$122,485,024 and $135,616,823 respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As each fund's investment adviser, Fidelity Management
& Research Company (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 each fund. The group fee rate is the weighted
average of a series of rates ranging from .15% to .37% and is based on the
monthly average net assets of all the mutual funds advised by FMR. The
annual individual fund fee rate is .25%. For the period, the management
fees were equivalent to an annual rate of .41% of average net assets for
the high yield, insured and money market funds, respectively.
The Board of Trustees approved a new group fee rate schedule with rates
ranging from .1325% to .3700%. Effective November 1, 1993, FMR has
voluntarily agreed to implement this new group fee rate schedule as it
results in the same or a lower management fee (see Note 6).
SUB-ADVISER FEE. As the money market fund's investment sub-adviser, FMR
Texas Inc., a wholly owned subsidiary of FMR, receives a fee from FMR of
50% of the management fee payable to FMR. The fee is paid prior to any
voluntary expense reimbursements which may be in effect, and after reducing
the fee for any payments by FMR pursuant to the fund's Distribution and
Service Plan.
DISTRIBUTION AND SERVICE PLAN. Pursuant to the Distribution and Service
Plans (the Plans), and in accordance with Rule 12b-1 of the 1940 Act, FMR
or the funds' distributor, Fidelity Distributors Corporation (FDC), an
affiliate of FMR, may use their resources to pay administrative and
promotional expenses related to the sale of each fund's shares. Subject to
the approval of each Board of Trustees, the Plans also authorize payments
to third parties that assist in the sale of each fund's shares or render
shareholder support services. FMR or FDC has informed the funds that
payments made to third parties under the Plans amounted to $3,519, $4,748
and $31,948 for the high yield, insured and money market funds,
respectively, for the period.
TRANSFER AGENT AND ACCOUNTING FEES. United Missouri Bank, N.A. (the Bank)
is the custodian and transfer and shareholder servicing agent for the
funds. The Bank has entered into a sub-contract with Fidelity Service Co.
(FSC), an affiliate of FMR, under which FSC per
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
TRANSFER AGENT AND ACCOUNTING FEES
- - CONTINUED
forms the activities associated with the funds' transfer and shareholder
servicing agent and accounting functions. The funds pay transfer agent fees
based on the type, size, number of accounts and number of transactions made
by shareholders. FSC pays for typesetting, printing and mailing of all
shareholder reports, except proxy statements. The accounting fee is based
on the level of average net assets for the month plus out-of-pocket
expenses. For the period, FSC received transfer agent and accounting fees
amounting to $558,014 and $243,183 for the high yield fund, $346,638, and
$134,786 for the insured fund and $1,016,834 and $107,448 for the money
market fund, respectively.
Shareholders participating in the Fidelity Ultra Service Account(Registered
trademark) Program (the Program) pay a $5.00 monthly fee to Fidelity
Brokerage Services, Inc. (FBSI), an affiliate of FMR, for performing
services associated with the Program. For the period, fees paid to FBSI by
shareholders participating in the Program amounted to $148,453.
5. EXPENSE REDUCTIONS
INSURED FUND. For the period, FMR voluntarily agreed to reimburse the
fund's operating expenses (excluding interest, taxes, brokerage commissions
and extraordinary expenses) above a specified percentage of average net
assets. This expense limitation ranged from an annual rate of .35% to .55%
of average net assets and the reimbursement reduced expenses by $352,015.
6. SHAREHOLDER MEETING.
At a special meeting of shareholders of the high yield and insured funds
held on February 16, 1994, shareholders approved an amended management
contract and amendments to certain fundamental investment limitations of
the funds.
The new management contract , which became effective on March 1, 1994 will
reflect the new group fee rate schedule which FMR voluntarily implemented
on November 1, 1993.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and Shareholders of Fidelity California Municipal Trust and
Fidelity California Municipal Trust II
(the Trusts):
Fidelity California Tax-Free
High Yield Portfolio
Fidelity California Tax-Free
Insured Portfolio
Fidelity California Tax-Free
Money Market Portfolio
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 California Tax-Free
High Yield Portfolio, Fidelity California Tax-Free Insured Portfolio and
Fidelity California Tax-Free Money Market Portfolio at February 28, 1994,
the results of their operations, the changes in their 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 each portfolio's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with
generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which
included confirmation of securities owned at February 28, 1994 by
correspondence with the custodian and brokers and the application of
alternative auditing procedures where confirmations from brokers were not
received, provide a reasonable basis for the opinion expressed above.
/s/Price Waterhouse
PRICE WATERHOUSE
Boston, Massachusetts
March 31, 1994
INVESTMENT ADVISER
Fidelity Management & Research
Company
Boston, MA
SUB-ADVISER, MONEY MARKET FUND
FMR Texas Inc.
Irving, TX
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
John F. Haley Jr., Vice President
HIGH YIELD AND INSURED FUNDS
Deborah F. Watson, Vice President
MONEY MARKET FUND
Thomas D. Maher, Assistant
Vice President - MONEY MARKET FUND
Gary L. French, Treasurer
John H. Costello, Assistant Treasurer
Arthur S. Loring, Secretary
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox*
Phyllis Burke Davis*
Richard J. Flynn*
Edward C. Johnson 3d
E. Bradley Jones*
Donald J. Kirk*
Peter S. Lynch
Marvin L. Mann*
Edward H. Malone*
Gerald C. McDonough*
Thomas R. Williams*
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
United Missouri Bank, N.A.
Kansas City, MO
and
Fidelity Service Co.
Boston, MA
CUSTODIAN
United Missouri Bank, N.A.
Kansas City, MO
THE FIDELITY
TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774 (8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE
EXHIBIT 24(A)(2)
SPARTAN
(Registered trademark)
CALIFORNIA
MUNICIPAL
PORTFOLIOS
ANNUAL REPORT
FEBRUARY 28, 1994
CONTENTS
PRESIDENT'S MESSAGE 3 NED JOHNSON ON MINIMIZING
TAXES
SPARTAN CALIFORNIA MUNICIPAL
HIGH YIELD PORTFOLIO 4 PERFORMANCE
7 FUND TALK: THE MANAGER'S OVERVI
EW
10 INVESTMENT CHANGES
11 INVESTMENTS
24 FINANCIAL STATEMENTS
SPARTAN CALIFORNIA
INTERMEDIATE MUNICIPAL
PORTFOLIO 28 PERFORMANCE
30 FUND TALK: THE MANAGER'S OVERVI
EW
33 INVESTMENT SUMMARY
34 INVESTMENTS
39 FINANCIAL STATEMENTS
SPARTAN CALIFORNIA MUNICIPAL
MONEY MARKET PORTFOLIO 43 PERFORMANCE
45 FUND TALK: THE MANAGER'S OVERVI
EW
47 INVESTMENT CHANGES
48 INVESTMENTS
59 FINANCIAL STATEMENTS
NOTES 63 FOOTNOTES TO THE FINANCIAL
STATEMENTS
REPORT OF INDEPENDENT
ACCOUNTANTS 67 THE AUDITOR'S OPINION
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUNDS. THIS REPORT IS NOT AUTHORIZED
FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUNDS UNLESS PRECEDED OR
ACCOMPANIED BY
AN EFFECTIVE PROSPECTUS. NEITHER THE FUNDS NOR FIDELITY DISTRIBUTORS
CORPORATION IS A
BANK, AND FUND SHARES ARE NOT BACKED OR GUARANTEED BY ANY BANK OR INSURED
BY THE
FDIC.
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
No one wants to pay more taxes than they have to. But a recent survey of
500 U.S. households, conducted by Fidelity and Yankelovich Partners, showed
that few people took steps to reduce their taxes under the new tax laws
that went into effect last year. In fact, many people were not completely
aware of the changes until they filed their 1993 tax returns.
Whether or not you're someone whose tax bill increased as a result of these
changes, it may make sense to consider ways to keep more of what you earn.
First, if your employer offers a 401(k) or 403(b) retirement savings plan,
consider enrolling. These plans are set up so you can make regular
contributions -
before taxes - to a retirement savings plan. They offer a disciplined
savings strategy, the ability to accumulate earnings tax-deferred, and
immediate tax savings. For example, if you earn $40,000 a year and
contribute 7% of your salary to your 401(k) plan, your annual contribution
is $2,800. That reduces your taxable income to $37,200 and, if you're in
the
28% tax bracket, saves you $784 in federal taxes. In addition, you pay no
taxes on any earnings until withdrawal.
It may be a good idea to contact your benefits office as soon as possible
to find out when you can enroll or increase your contribution. Most
employers allow employees to make changes only a few times each year.
Second, consider an IRA. Many people are eligible to make an IRA
contribution (up to $2,000) that is fully tax deductible. That includes
people who are not covered by company pension plans, or those within
certain income brackets. Even if you don't qualify for a fully deductible
contribution, any IRA earnings will grow tax-deferred until withdrawal.
Third, consider adding to your tax-free investments, either municipal bonds
or municipal bond funds. Often these can provide higher after-tax yields
than comparable taxable investments. For example, if you're in the new 36%
federal income tax bracket and invest $10,000 in a taxable investment
yielding 7%, you'll pay $252 in federal taxes and receive $448 in income.
That same $10,000 invested in a tax-free bond fund yielding 5.5% would
allow you to keep $550 in income.
These are three investment strategies that could help lower your tax bill
in 1994. If you're interested in learning more, please call us at
1-800-544-8888 or visit a Fidelity Investor Center. We look forward to
talking with you.
Best regards,
Edward C. Johnson 3d, Chairman
SPARTAN CALIFORNIA MUNICIPAL HIGH YIELD PORTFOLIO
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each figure
includes changes in a fund's share price, reinvestment of any dividends (or
income) and capital gains (the profits the fund earns when it sells bonds
that have grown in value), and the effect of the $5 account closeout fee.
You can also look at the fund's income. If Fidelity had not reimbursed
certain fund expenses during the periods shown, the total returns,
dividends and yields would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED FEBRUARY 28, 1994 PAST 1 LIFE OF
YEAR FUND
Spartan California Municipal High Yield 5.62% 49.13%
Lehman Brothers Municipal Bond Index 5.54% n/a
Average California Tax-Exempt
Municipal Bond Fund 5.39% n/a
Consumer Price Index 2.52% 16.52%
CUMULATIVE TOTAL RETURNS reflect actual performance over a set period - in
this case, one year or since the fund started on November 27, 1989. For
example, if you had invested $1,000 in a fund that had a 5% return over the
past year, you would end up with $1,050. You can compare these figures to
the performance of the Lehman Brothers Municipal Bond Index - a broad gauge
of the municipal bond market. To measure how the fund stacked up against
its peers, you can look at the average California tax-exempt municipal bond
fund, which reflects the performance of 75 California tax-exempt municipal
bond funds tracked by Lipper Analytical Services. Both benchmarks include
reinvested dividends and capital gains, if any. Comparing the fund's
performance to the consumer price index helps show how your fund did
compared to inflation. (The periods covered by the CPI numbers are the
closest available match to those covered by the fund.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 28, 1994 PAST 1 LIFE OF
YEAR FUND
Spartan California Municipal High Yield 5.62% 9.84%
Lehman Brothers Municipal Bond Index 5.54% n/a
Average California Tax-Exempt
Municipal Bond Fund 5.39% n/a
Consumer Price Index 2.52% 3.66%
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
$27,312
$24,247
'94
$10,000 OVER LIFE OF FUND: Let's say you invested $10,000 in Spartan
California Municipal High Yield Portfolio on November 30, 1989, shortly
after the fund started. As the chart shows, by February 28, 1994, the value
of your investment would have grown to $14,834 - a 48.34% increase on your
initial investment. This assumes you still own the fund on February 28,
1994 and therefore does not include the effect of the $5 account closeout
fee. For comparison, look at how the Lehman Brothers Municipal Bond Index
did over the same period. With dividends reinvested, the same $10,000 would
have grown to $14,601 - a 46.01% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. Bond prices, for
example, move in the
opposite direction of interest
rates. In turn, the share price,
return, and yield of a fund
that invests in 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)
INCOME
YEARS ENDED FEBRUARY 28, 1994 1994 1993 1992 1991
Income return 5.62% 6.72% 6.84% 7.51%
Capital gain return 3.54% 0.74% 0.00% 0.00%
Change in share price -3.54% 7.59% 3.43% 1.89%
Total return 5.62% 15.05% 10.27% 9.40%
INCOME returns, capital gain returns, and changes in share price are all
part of a bond fund's total return. An income return reflects the dividends
paid by the fund. A capital gain return reflects the amount paid by the
fund to shareholders based on the profits it has from selling bonds that
have grown in value. Both returns assume the dividends or gains are
reinvested. Changes in the fund's share price include changes in the prices
of the bonds owned by the fund. Change in share price and total return
figures include the effect of the $5 account closeout fee.
DIVIDENDS AND YIELD
PERIODS ENDED FEBRUARY 28, 1994 PAST 30 PAST 6 PAST 1
DAYS MONTHS YEAR
Dividends per share n/a 31.02(cents) 63.06(cents)
Annualized dividend rate n/a 5.51% 5.59%
Annualized yield 5.26% n/a n/a
Tax-equivalent yield 9.23% n/a n/a
DIVIDENDS per share show the income paid by the fund for a set period. If
you annualize this number, based on an average share price of $11.35 over
the past six months and $11.28 over the past year, you can compare the
fund's income over these two periods. The 30-day annualized YIELD is a
standard formula for all funds based on the yields of the bonds in the
fund, averaged over the past 30 days. This figure shows you the yield
characteristics of the fund's investments at the end of the period. It also
helps you compare funds from different companies on an equal basis. The
tax-equivalent yield shows what you would have to earn on a taxable
investment to equal the fund's tax-free yield, if you're in the 43.04%
combined effective 1994 federal and state income tax bracket.
SPARTAN CALIFORNIA MUNICIPAL HIGH YIELD PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
Bond investments - including
tax-free issues - provided solid
returns for the 12 months ended
February 28, 1994, despite a
dramatic downturn in February.
Falling interest rates pushed up
bond prices steadily through
mid-October, when the yield on the
benchmark 30-year Treasury bond
reached a historic low of 5.79%. By
year-end, a strengthening economy
had fueled mild inflation fears. That
pushed up the yield on the 30-year
bond to 6.35% on December 31,
which forced investors to give back
some of their earlier profits. Inflation
jitters eased and bond yields
dropped in January. However,
when the Federal Reserve Bank
raised short-term interest rates in
an attempt to control inflation on
February 4, investors reacted
negatively. At the end of February,
the yield on the 30-year bonds was
6.66%, about 38 basis points
higher than at the beginning of the
month. Over the year, higher
federal income taxes boosted
demand for municipal bonds. But
municipal bond prices were hurt by
the Fed's action in February and by
record new issuance, which kept
supplies high and dampened
prices. The return on the Lehman
Brothers Municipal Bond Index, a
broad measure of the tax-free
market, rose 5.54%. By
comparison, the Lehman Brothers
Aggregate Bond Index, which
tracks investment-grade taxable
bonds, returned 5.40%. Globally,
falling interest rates and low
inflation drove good annual returns
in Europe, Japan, and most
emerging markets, although many
of these markets fell in February
along with the U.S. bond market.
The Salomon Brothers World
Government Bond Index - which
includes U.S. issues - returned
9.34%, while the J.P. Morgan
Emerging Markets Bond Index was
up a dramatic 29.46%.
An interview with John Haley,
Portfolio Manager of Spartan
California Municipal High Yield
Portfolio
Q. JOHN, HOW DID THE FUND PERFORM?
A. Quite well. The fund had a total return of 5.62% for the year ended
February 28, 1994. The average California tax-free bond fund posted a total
return of 5.39% during the period, according to Lipper Analytical Services.
Q. WHAT ACCOUNTED FOR THE FUND'S PERFORMANCE?
A. First, having a somewhat longer duration than that of the typical
California tax-free bond fund. A longer duration makes a fund's share price
more sensitive to interest rate changes. I extended the fund's duration
from about 7.5 years to 9.2 years during the year because I expected
interest rates would continue to decline and drive bond prices higher.
That's what happened during most of the period, although the fund gave back
some gains when interest rates rebounded in February. Second, the fund also
held several issues that were pre-refunded during the period - that is,
their issuers set aside a pool of Treasury securities to pay the remaining
interest and principal due to bondholders. As a result, the bonds' credit
ratings went from A to Aaa, causing investors to bid their prices higher.
Plus, their maturities shortened, which also helped boost their prices.
Q. WHY DID YOU INCREASE THE FUND'S INVESTMENT IN STATE GENERAL OBLIGATION
BONDS (GOS) AND STATE LEASE BONDS?
A. During the early part of the year I avoided state GOs, which are backed
by the taxing power of the issuer, as well as California lease bonds, which
are backed by leases paid by the state. The state's economy was still
struggling, and I believed prices of those issues would lag bonds with
higher ratings. That proved to be true. But last fall I increased the
fund's investment in California GOs, lease bonds and other bonds backed by
the state to around 10% because I thought the California economy had hit
bottom. Also, I increased the fund's stake in bonds rated A or lower, which
are expected to benefit from improvements in the state's economy. These
decisions reduced the average credit rating of the fund's holdings. At the
end of February, about 40% of the fund's investments were rated Aa or Aaa,
down from 80%. As the economy begins to improve, those state GOs and lease
bonds should outperform issues with higher credit ratings.
Q. AT THE END OF FEBRUARY, NEARLY 20% OF THE FUND'S INVESTMENTS WERE IN
HEALTH-CARE BONDS, UP FROM 13.5% A YEAR EARLIER. ARE YOU CONCERNED THAT
HEALTH-CARE REFORM WILL HURT THOSE ISSUERS?
A. We are cautious on health care because the Clinton plan could affect the
health care sector. However, the issues I choose are mainly strong
hospitals that are expected to survive and potentially benefit from any
shake-up likely to occur. In fact,
a number carry ratings of Aa or Aaa.
Q. DID THE LOS ANGELES EARTHQUAKE AFFECT THE FUND'S PERFORMANCE?
A. Not much. During the past two or three years I de-emphasized issuers in
the Los Angeles area because the economy in southern California has been
especially sluggish. As a result, we only held one or two bonds of issuers
in the vicinity of the earthquake. I believe in geographic diversification,
so the fund's investments are spread across different regions of the state.
That should offer some protection against future natural disasters.
Q. WHAT'S YOUR OUTLOOK FOR THE TAX-EXEMPT BOND MARKET?
A. The economy will probably show modest growth and inflation seems likely
to remain under control, so I don't expect interest rates to rise
dramatically from here. But interest rates aren't likely to fall much more
either, so gains in the bond market won't be driven by falling rates. The
tax-exempt market will probably benefit from a lower supply of new issues.
Also, demand for tax-exempt bonds will likely increase as investors realize
that the new, higher federal income tax rates. The combination of lower
supply and higher demand should help support prices in the tax-exempt
market.
Q. WHAT ABOUT THE CALIFORNIA TAX-EXEMPT MARKET?
A. I still feel that California bonds are attractive because the state's
economy is showing signs that it is set to begin a recovery. As that
happens, state GO's and lease bonds, should be especially strong
performers, because their credit quality is closely linked to the economy.
Those issues may be volatile over the next several months as the state goes
through its budget process. But I'll probably take advantage of any price
declines to buy more.
FUND FACTS
GOAL: to provide high current
income exempt from
California state and federal
income taxes
START DATE: November 27,
1989
SIZE: as of February 28, 1994
over $566 million
MANAGER: John Haley, since
December, 1989; manager,
Fidelity California Tax-Free
Insured Portfolio, since 1986;
Fidelity California Tax-Free
High Yield Portfolio, since
1985; Fidelity Advisor
Tax-Exempt Portfolio, since
1985
(checkmark)
JOHN HALEY ON THE FUND'S
STRATEGY:
"The fund can invest one-third
of its holdings in securities
rated below
investment-grade. However
during recent years, there
have been few attractive
opportunities in this area. At
the same time, I expected a
more severe economic
downturn in the California
economy than most
observers. As a result, I stuck
mainly with highly-rated
issues. But during the past six
months I have begun to
identify factors that suggest
the California economy is
reaching a bottom. As a
result, I've been increasing
the fund's investment in
higher-yielding issues. As the
economy improves, they
should be strong performers."
(bullet) The fund's duration as of
February 28, 1994 was 9.2
years. That means the fund's
share price could decline
roughly 9.2% if interest rates
rose one percentage point,
and rise 9.2% if rates fell one
percentage point.
SPARTAN CALIFORNIA MUNICIPAL HIGH YIELD PORTFOLIO
INVESTMENT CHANGES
TOP FIVE SECTORS AS OF FEBRUARY 28, 1994
% OF FUND'S % OF FUND'S INVESTMENT
INVESTMENTS S
IN THESE SECTORS
6 MONTHS AGO
Lease Revenue 26.1 23.7
Health Care 19.8 13.8
Special Tax 18.3 20.2
Electric Revenue 8.3 10.2
Housing 6.4 6.0
AVERAGE YEARS TO MATURITY AS OF FEBRUARY 28, 1994
6 MONTHS AGO
Years 22.2 22.6
AVERAGE YEARS TO MATURITY SHOWS THE AVERAGE TIME UNTIL THE PRINCIPAL OF THE
BONDS IN THE FUND IS EXPECTED TO BE REPAID, WEIGHTED BY DOLLAR AMOUNT.
DURATION AS OF FEBRUARY 28, 1994
6 MONTHS AGO
Years 9.2 8.8
DURATION SHOWS HOW MUCH A BOND'S PRICE FLUCTUATES WITH CHANGES IN INTEREST
RATES. IF RATES RISE 1%, FOR EXAMPLE, THE SHARE PRICE OF A FUND WITH A
FIVE-YEAR DURATION WILL FALL 5%.
QUALITY DIVERSIFICATION AS OF FEBRUARY 28, 1994
(MOODY'S RATINGS)
Aaa 32.4%
Aa, A 41.5%
Baa 17.4%
Ba, B 0%
Non-rated 8.7%
Row: 1, Col: 1, Value: 32.4
Row: 1, Col: 2, Value: 41.5
Row: 1, Col: 3, Value: 17.4
Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: 8.699999999999999
THIS CHART EXCLUDES SHORT-TERM INVESTMENTS. WHERE MOODY'S RATINGS ARE NOT
AVAILABLE, WE HAVE USED S&P RATINGS.
NON-RATED SECURITIES CONSIDERED TO BE BAA OR BETTER BY FIDELITY ARE 5.8% OF
THE FUNDS LONG TERM INVESTMENTS.
SPARTAN CALIFORNIA MUNICIPAL HIGH YIELD PORTFOLIO
INVESTMENTS/FEBRUARY 28, 1994
(Showing Percentage of Total Value of Investments)
MUNICIPAL BONDS - 98.5%
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - 95.3%
ABAG Fin. Auth. Nonprofit Ctfs. of Prtn.
(Peninsula Family YMCA) Series A, 6.80%
10/1/11, LOC Daiwa Bank Ltd A1 $ 1,000,000 $ 1,047,500 00037EAL
Alameda County Ctfs. of Prtn. Rfdg.
(Santa Rita Jail Proj.) 5.375% 6/1/09,
(MBIA Insured) Aaa 1,250,000 1,228,125 010891KG
Alameda Hsg. Auth. Multi-Family Hsg. Rev.
(Independence Apts.) Series A, 7.50%
2/20/31, (GNMA Coll.) AAA 1,775,000 1,881,500 010789AA
Anaheim Pub. Fing. Auth. Tax Allocation Rev.:
(Cap. Appreciation Redev. Proj.) 0%
12/1/06, (MBIA Insured) Aaa 5,000,000 2,525,000 032559AP
(Reg. Rites) 10.27% 12/1/18,
(MBIA Insured)(d) Aaa 1,500,000 1,788,750 032559AV
Azusa Redev. Agcy. Tax Allocation
(Central Bus. Dist. Redev. Proj.)
Series A, 7.875% 8/1/15 Baa 1,025,000 1,083,938 055031BD
Bakersfield Hosp. Rev. (Bakersfield Mem. Hosp.)
Series A, 6.50% 1/1/22 A 1,500,000 1,565,625 057509CM
Berkeley Health Facs. Rev. Rdfg.
(Alta Bates Med. Ctr.) Series A,
6.55% 12/1/22 Baa1 3,250,000 3,262,188 084134AH
Buena Park Commty. Redev. Agcy. Tax
Allocation Rfdg. (Central Business Dist.
Proj.) 7.10% 9/1/14 BBB+ 1,500,000 1,586,250 119147CN
Burbank Redev. Agcy. Tax Allocation
Series A, 6% 12/1/23 Baa1 1,950,000 1,901,250 120823EA
California Dept. Wtr. Resources Central
Valley Rev. (Wtr. Sys. Proj.) Series J-1,
7% 12/1/12 Aa 1,000,000 1,158,750 130663E6
California Fairs Fing. Auth. Rev. Series 1991,
6.50% 7/1/11, (Cap. Guaranty Insured) Aaa 2,000,000 2,152,500 130205BG
California Health Facs. Fing. Auth. Rev.:
Rfdg. (Catholic Healthcare West) 4.75%
7/1/19(MBIA Insured) Aaa 4,680,000 4,112,550 13033AAU
(Children's Hosp.) 7% 7/1/13,
(MBIA Insured) Aaa 2,485,000 2,770,775 13033H6L
(Children's Hosp.of San Francisco)
Series A, 7.50% 10/1/20, (MBIA Insured) Aaa 2,450,000 2,820,563
13033JAJ
(Gould Med. Foundation) Series A,
7.30% 4/1/20 A+ 1,500,000 1,738,126 13033JBW
(Kaiser Permanente Health Sys.)
Series A, 7% 12/1/10 Aa2 2,800,000 3,083,500 13033JLQ
(Los Medanos Health Care Corp.)
Series A, 7.25% 3/1/20 A+ 1,500,000 1,653,750 13033H6X
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
California Health Facs. Fing. Auth. Rev.: - continued
(Mills-Peninsula Hosp.) Series A, 7.875%
1/15/12 A- $ 2,000,000 $ 2,160,000 13033HRE
(San Diego Hosp. Assoc.) Series A:
6.70% 10/1/10, (MBIA Insured) Aaa 4,085,000 4,457,756 13033JTP
6.95% 10/1/21 A1 1,500,000 1,640,625 13033JTM
(St. Elizabeths Hosp. Proj.) 6.20%
11/15/09 A1 1,455,000 1,505,925 13033JL2
(Scripps Health) Series A, 4.625%
10/1/13 (MBIA Insured) Aaa 1,075,000 950,031 13033J5V
(Sharp Temecula Valley) Series A, 7.05%
8/1/21, (MBIA Insured) Aaa 1,100,000 1,230,625 13033JPT
(Valleycare Hosp. Corp.) Series A, 7%
5/1/20 A+ 2,000,000 2,185,000 13033H5P
California Hsg. Fin. Agcy. Rev. (Home Mtg.):
Series A, 0% 8/1/23 (b) Aa 8,080,000 858,500 13033CPJ
Series C:
8.30% 8/1/19 (b) Aa 2,450,000 2,603,124 1303296C
0% 8/1/21 (b) Aa 5,870,000 733,750 13033CTB
7.60% 8/1/30 (b) Aa 7,775,000 8,251,218 13033CPZ
Series F, 7.20% 8/1/09 Aa 1,095,000 1,145,643 13033CMW
California Poll. Cont. Fing. Auth. Poll. Cont.
Rev. (Southern California Edison Company)
Series 1988 A, 6.90% 9/1/06(b) A-1+ 1,660,000 1,823,924 130534RP
California Poll. Cont. Fing. Auth. Rev.
(Pacific Gas & Elec. Co.) Series B,
5.85% 12/1/23 (b) A1 6,000,000 5,925,000 130534VA
California Poll. Cont. Fing. Auth. Solid Waste
Disp. Rev.:
(Keller Canyon Landfill Proj.) Series 1992,
6.875% 11/1/27(b) A2 2,250,000 2,469,374 130536BT
(North County Recylcing Ctr.) Series A,
6.75% 7/1/11, LOC Union
Bank of Switzerland Aaa 1,000,000 1,092,500 130536BQ
California Pub. Cap. Impt. Fing. Auth. Rev.
(Pooled Proj.) Series B, 8.10% 3/1/18,
(MBIA Insured) Aaa 1,910,000 2,091,450 130552AS
California Pub. Wks. Board Lease Rev.:
Rfdg. (Dept. Correction State Prisons)
Series A, (AMBAC Insured):
5.25% 12/1/13 Aaa 1,355,000 1,300,800 13068GNZ
5% 12/1/19 Aaa 6,500,000 5,931,250 13068GPA
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
California Pub. Wks. Board Lease Rev.: - continued
(California University Proj.):
Series A:
5.50% 6/1/14 A1 $ 5,750,000 $ 5,548,750 13068GRB
5% 6/1/23 A1 3,500,000 3,066,874 13068GRD
(Dept. Correction State Prison)
(Medera)
Series E, 5.50% 6/1/15 (h) A1 3,300,000 3,184,500 13068GVV
(Susanville)
Series B, 5.50% 6/1/14 A1 2,000,000 1,907,500 13068GUX
Series D, 5.25% 6/1/15
(FGIC Insured) Aaa 2,000,000 1,915,000 13068GUA
5.375% 6/1/18 A1 1,500,000 1,398,750 13068GTQ
California Statewide Commty. Dev. Auth.
8.83% 7/1/13, (MBIA Insured) (d) Aaa 2,000,000 1,965,000 130909JH
California Statewide Commtys. Dev. Corp.
Ctfs. of Prtn.:
Rfdg. (Insured Health Facs.) (Eskaton, Inc.)
5.875% 5/1/20 A+ 4,000,000 3,920,000 130909GW
Rfdg. (Insured Hosp.) (Triad Healthcare):
6.25% 8/1/06 A+ 2,000,000 2,027,500 130909CM
6.50% 8/1/22 A+ 1,750,000 1,778,437 130909CR
(Children's Hosp.) 6%6/1/13
(MBIA Insured) Aaa 1,570,000 1,632,800 130909NE
(J. Paul Getty) 5% 10/1/23 Aaa 1,750,000 1,585,937 130907FM
(Odd Fellows):
5.375% 10/1/13 A+ 2,500,000 2,325,000 130907EP
5.50% 10/1/23 A+ 3,000,000 2,797,500 130907EQ
(St. Joseph Health Sys.) 5.50% 7/1/23 Aa 3,000,000 2,835,000 130909GH
(Sisters of Charity Leavenworth)
5% 12/1/23 Aa 4,375,000 3,850,000 130909PR
(Villaview Commty. Hosp., Inc.)
Series A, 7% 9/1/09 A+ 1,200,000 1,303,500 130907AX
California Urban Ind. Dev. Agcy. Rev.
(Civic Recreational Proj.#1) 7.30%
5/1/06 - 4,000,000 4,320,000 456567ME
Campbell Ctfs. of Prtn. Rfdg. (Civic Center Proj.):
6.75% 10/1/17 A 1,500,000 1,612,500 134111CR
6% 10/1/18 A 2,565,000 2,539,350 134111BK
Carson Redev. Agcy. 5.875% 10/1/09 Baa 2,000,000 1,952,500 145750DN
Carson Redev. Agcy. Redev. Proj. Area #1
Tax Allocation:
6.375% 10/1/12 Baa1 1,465,000 1,452,180 145750CZ
6.375% 10/1/16 Baa1 1,000,000 985,000 145750DA
Castaic Lake Wtr. Agcy. Ctfs. of Prtn.
(Wtr. Sys. Impt. Proj.) 7.125% 8/1/16,
(MBIA Insured) Aaa 2,750,000 3,090,312 148370AM
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Castaic Unified School Dist.
(Cap. Appreciation) Series A, 0% 5/1/18,
(FGIC Insured) Aaa $ 8,000,000 $ 1,990,000 148371AH
Central California Jt. Pwrs. Health Fing. Auth.:
Rfdg. (Commty. Hosp. of Central
California Proj.) 5% 2/1/23 A 3,500,000 3,027,500 152757AR
Ctfs. of Prtn. (Commty. Hosp. of Central
California Proj.) 5.25% 2/1/13 A 4,000,000 3,675,000 152757AQ
Central Valley Fing. Auth. Rev.
(Cogeneration Proj.) (Carson Ice Gen. Proj.):
6% 7/1/09 BBB- 2,050,000 2,019,250 155689AG
6.10% 7/1/13 BBB- 1,000,000 988,750 155689AK
6.20% 7/1/20 BBB- 1,450,000 1,440,937 155689AH
Chico Pub. Fing. Auth. Rev. 6.625% 4/1/21,
(FGIC Insured) Aaa 2,000,000 2,177,500 168505BG
Clovis Unified School Dist. (Cap. Appreciation)
Series B, 0% 8/1/03 A1 3,485,000 2,104,068 189342QG
Coalinga Ctfs. of Prtn. 7% 4/1/10 BBB+ 1,655,000 1,739,818 19021CAP
Contra Costa County Ctfs. of Prtn.
(Merrithew Mem. Hosp.) (Cap. Appreciation)
0% 11/1/14 A1 6,805,000 2,015,980 21223TEK
Contra Costa County Multi-Family Hsg. Rev.
(Del Norte Place) Series B, 7.85% 8/20/33,
(GNMA Coll.)(b) AAA 2,865,000 3,140,756 212249AA
Contra Costa Home Mtg. Fin. Auth. Home
Mtg. Rev. 0% 9/1/17, (MBIA Insured)
(Escrowed to Maturity) (e) Aaa 12,500,000 3,156,250 212216CA
Del Norte County Pub. Wks. Rev. Rfdg.:
(Dept. of Corrections):
5.125%, 12/1/08 A1 2,250,000 2,157,188 13068GSY
5.20%, 12/1/09 A1 6,110,000 5,857,963 13068GSZ
Desert Hosp. Rev. Ctfs. of Prtn.
(Desert Hosp. Corp.) Series 1992, 10.029%
7/28/20, (Cap. Guaranty Insured)(d) Aaa 4,000,000 4,645,000 25041MAZ
Duarte Ctfs of Prtn. (City of Hope Nat'l.
Medical Ctr.) 6.25% 4/1/23 Baa1 2,000,000 2,025,000 263584CS
Eastern Muni. Wtr. Dist. Wtr. & Swr. Rev.
Ctfs. of Prtn. 6.75% 7/1/12,
(FGIC Insured) Aaa 2,000,000 2,282,500 276771AR
Escondido Ctfs. of Prtn. Rfdg.
(Redwood Terrace Lutheran Home)
7% 11/15 A+ 1,600,000 1,740,000 296337CM
Escondido Joint Pwr. Fing. Auth. Rev.
(Cap. Appreciation) 0% 9/1/12,
(AMBAC Insured) Aaa 2,160,000 756,000 29634EAS
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Fairfield-Suisun Swr. Dist. Swr. Rev. Rfdg.
Series A, (MBIA Insured):
0% 5/1/07 Aaa $ 1,635,000 $ 799,106 304730CQ
0% 5/1/08 Aaa 2,085,000 953,888 304730CR
0% 5/1/09 Aaa 2,080,000 889,200 304730CS
Folsom Pub. Fing. Auth. Local Agcy. Rev.
Series A, 7.25% 10/1/10 BBB+ 1,285,000 1,370,131 344392BB
Fontana Redev. Agcy. Tax Allocation Rfdg.
(Yurupa Hills) Series 1992 A, 7.10%
10/1/23 BBB 2,000,000 2,175,000 344619CL
Foster City Pub. Fing. Auth. Foster City
Commty. Rev. (Proj. Loan) Series A,
6% 9/1/13 A- 3,000,000 2,917,500 350057AP
Fresno Swr. Rev. (AMBAC Insured):
(Fowler Ave. Proj.) Series 1991 A,
6.25% 8/1/11 Aaa 2,500,000 2,628,125 358229BQ
Series A-1, 6.25% 9/1/14 Aaa 2,250,000 2,452,500 358229CJ
Garden Grove Agcy. Commty. Dev. Tax
Allocation Rfdg. (Garden Grove Commty.
Proj.) 5.70% 10/1/13 A 2,000,000 1,927,500 365251CN
Glendale Hosp. Rev. Rfdg. (Adventist Health)
Series A, 6.50% 3/1/07, (MBIA Insured) Aaa 2,500,000 2,706,250 378432DH
Industry Urban Ind. Dev. Agcy. Rev.:
Rfdg. (Civic Recreational Proj.#1)
Series A, 7.375% 5/1/12 - 8,600,000 9,298,750 456567MG
(Civic Recreational Proj.#1-B) 7.375%
5/1/15, (Unrefunded Balanced) - 1,140,000 1,232,625 456567QS
Inglewood Ctfs. of Prtn. (Civic Center Impt.
Proj.) 7% 8/1/19 A 1,000,000 1,057,500 457079AV
Irvine Ranch Wtr. Dist. Joint Pwr. Agcy.
Local Pool Rev.:
7.80% 2/15/08 A 1,560,000 1,678,950 463656AP
7.875% 2/15/23 A 5,500,000 5,946,875 463656AR
8.25% 8/15/23 BBB 16,365,000 18,001,500 463656BE
Kaweah Delta Hosp. Dist. Rev. Rfdg.
7.25% 11/1/16 A 3,000,000 3,198,750 486380AH
King Ctfs. of Prtn. 7.50% 7/1/04 - 2,800,000 3,094,000 494688AJ
Los Angeles County Cap. Asset Leasing Corp.
Leasehold Rev. (AMBAC Insured):
4.05% 12/1/09 Aaa 2,320,000 2,378,000 544900CE
4.05% 12/1/10 Aaa 1,565,000 1,602,169 544900CF
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Los Angeles County Ctfs. of Prtn.:
(Cap. Appreciation):
0% 9/1/10 A $ 2,980,000 $ 1,102,600 5446634F
0% 3/1/17 A 3,450,000 823,688 5446634U
0% 3/1/20 A 1,000,000 198,750 5446634C
(Correctional Facs.) 0% 9/1/11,
(MBIA Insured) Aaa 6,400,000 2,368,000 544663G8
(Disney Parking Proj.):
0% 9/1/11 A 1,000,000 342,500 5446634J
0% 3/1/12 A 2,180,000 724,850 5446634J
0% 3/1/13 A 2,750,000 859,375 5446634L
0% 9/1/13 A 3,215,000 972,538 5446634M
0% 9/1/15 A 3,815,000 1,010,975 5446634R
0% 9/1/18 A 8,775,000 1,908,563 5446634X
0% 3/1/19 A 3,175,000 670,719 5446634Y
0% 9/1/20 A 5,425,000 1,044,313 5446635A
(Health Facs. Construction Loan)
(Bay Harbor Hosp.) 7.30% 4/1/20 A+ 1,000,000 1,096,250 544358GV
Los Angeles County Trans. Commission Sales
Tax Rev. Rfdg. Series B, 6.50% 7/1/13 A1 2,300,000 2,443,750 545170GM
Los Angeles Dept. Wtr. & Pwr. Wtrwks. Rev.
Rfdg. 4.50% 5/15/23 Aa 1,500,000 1,233,750 544524HJ
Los Angeles Wastewtr. Sys. Rev. Series D,
6.25% 12/1/15, (MBIA Insured) Aaa 2,000,000 2,102,500 544652NJ
M-S-R Pub. Pwr. Agcy. San Juan Proj. Rev.
Series B, 6.75% 7/1/11, (MBIA Insured) Aaa 1,750,000 1,933,750 553751EV
Manteca Ctfs. of Prtn. (St. Domenic's Hosp.)
7% 6/1/17, (MBIA Insured) Aaa 1,000,000 1,113,750 564512AK
Metropolitan Wtr. Dist. Southern Wtrwks.
Rev. 8.172% 8/10/18 (d) Aa 2,500,000 2,637,500 592663MN
Modesto Ctfs. of Prtn.:
(Commty. Ctr. Refing. Proj.) Series A,
5.60% 11/1/14, (AMBAC Insured) Aaa 1,370,000 1,370,000 607715FC
(Golf Course Refing. Proj.) Series B, 5%
11/1/23, (AMBAC Insured) Aaa 1,585,000 1,440,369 607715FF
Modesto Irrigation Dist. Ctfs. of Prtn.
Rfdg. & Cap. Impts. Series A, 0%
10/1/10, (MBIA Insured) Aaa 2,270,000 885,300 607762DH
Moreno Valley Unified School Dist. Ctfs. of
Prtn. 7.40% 9/1/16 Baa 175,000 174,344 616872BT
Mount Shasta Hosp. Rev. Ctfs. of Prtn.
(Mercy Med. Ctr.) Series A, 7.25%
7/1/19 A+ 1,435,000 1,592,850 623091AA
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Northern California Pwr. Agcy. Pub. Pwr. Rev.:
Rfdg. (Geothermal Proj. #3) Series A:
5.80% 7/1/09 A $ 3,000,000 $ 3,067,500 664843RZ
5.85% 7/1/10 A 1,875,000 1,917,188 664843SB
(Hydroelec. Proj. #1) Series E, 7.15%
7/1/24 A 1,000,000 1,090,000 664843NQ
7.50% 7/1/23, (AMBAC Insured)
(Pre-Refunded to 7/1/21 @ 100)(e) Aaa 1,170,000 1,487,363 664843NV
Norwalk Redev. Agcy. Tax Allocation
(Norwalk Redev. Proj. #1) 7.15%
12/1/15, (Pre-Refunded to
12/1/95 @ 102)(e) - 3,900,000 4,095,000 668823CM
Ontario Redev. Fing. Auth. Rev.
(Ctr. City Cimarron Proj.#1)
(MBIA Insured):
0% 8/1/08 Aaa 3,255,000 1,468,819 68304EAU
0% 8/1/09 Aaa 3,260,000 1,381,425 68304EAV
Orange County Ctfs. of Prtn.
(Civic Ctr. Facs.) 0% 12/1/18,
(AMBAC & MBIA Insured) Aaa 7,500,000 1,753,125 684228FR
Orange County Dev. Agcy. Tax Allocation
(Santa Ana Heights Proj.) 6.125%
9/1/23 Baa1 3,500,000 3,460,625 684246CB
Orange County Local Trans. Sales Tax Rev.
Ltd. Tax 6% 2/15/08 Aa 1,250,000 1,320,313 684273BP
Palm Desert Fing. Auth. Tax Allocation
9.83% 4/1/22, (MBIA Insured) (d) Aaa 2,750,000 3,131,563 696617BG
Palm Springs Ctfs. of Prtn. (Muni. Golf
Course Expansion Proj.) 7.40% 11/1/18 BBB+ 1,500,000 1,659,375 696656FK
Palomar Pomerado Health Sys. Rev.
(MBIA Insured):
0% 11/1/03 (Pre-Refunded to
5/1/96 @103) (e) Aaa 3,075,000 1,864,219 69753EAW
0% 11/1/05 Aaa 3,075,000 1,641,281 69753EAY
Pasadena Ctfs. of Prtn. Rfdg.
(Old Pasadena Pkg. Facs. Proj.)
6.25% 1/1/18 A1 3,605,000 3,744,694 702204HA
Perris Single Family Mtg. Rev. Series A,
0% 6/1/23, (GNMA Coll.)(Escrowed to
Maturity) (b)(e) Aaa 8,365,000 1,442,963 714386AT
Pleasanton Jt. Pwrs. Fin. Auth. Reassessment,
Series A, 6.15% 9/1/12 Baa 5,380,000 5,420,350 728816AW
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Port Oakland Port. Rev. Rfdg.
Series F, (MBIA Insured):
0% 11/1/06 Aaa $ 1,250,000 $ 631,250 734897RQ
0% 11/1/08 Aaa 3,500,000 1,540,000 734897RS
Poway Ctfs. of Prtn. (FSA Insured):
Rfdg. (Pointsettia Mobilehome Park)
6.375% 6/1/18 Aaa 2,800,000 2,954,000 738756CD
(Poway Royal Mobile Home Park)
(Cap. Impt. Proj.) 7% 7/1/20 Aaa 2,500,000 2,709,375 738756BC
Poway Redev. Agcy. (Paguay Proj.) Tax
Allocation 7.93% 12/15/14,
(FGIC Insured) (d) Aaa 9,365,000 9,423,531 738800DV
Rancho Cucamonga Redev. Agcy. Tax
Allocation (Rancho Redev. Proj.) 7.125%
9/1/19, (MBIA Insured) Aaa 1,000,000 1,125,000 752123CQ
Rancho Mirage Joint Pwrs. Fing. Auth.
Ctfs. of Prtn. (Eisenhower Mem. Hosp.)
7% 3/1/22 Baa1 1,000,000 1,076,250 75212HAM
Rancho Wtr. Dist. Fin. Auth. 4.75% 8/15/21,
(AMBAC Insured) Aaa 2,000,000 1,737,500 752111DC
Redlands Redev. Agcy. Tax Allocation
(Redlands Redev. Proj.) 7% 7/1/17 Baa 3,835,000 3,983,606 757593DP
Richmond Joint Pwr. Fing. Auth. Rev. Series B:
7% 5/15/07 A- 2,375,000 2,615,469 764440AH
7.25% 5/15/13 A- 2,500,000 2,775,000 764440AJ
Riverside County Asset Leasing Corp. Leasehold
Rev. (Riverside County Hosp. Proj.) Series A:
6.375% 6/1/09 (Detachable Call Option) A 3,000,000 3,131,250 768903AW
6.50% 6/1/12 A 5,500,000 5,795,625 768903AR
6.25% 6/1/19 A 4,000,000 4,085,000 768903AG
Riverside County Ctfs. of Prtn.:
Rfdg. (Air Force Village West, Inc.)
Series A, 8.125% 6/15/20 A-1+ 5,500,000 5,802,500 768901FQ
(Air Force Village West, Inc.)
Series A, 8.125% 6/15/12 A-1+ 2,690,000 2,837,950 768901FT
Riverside County Redev. Agcy. Tax Allocation
(Redev. Proj. #4) Series A:
7.50% 10/1/10 BBB 1,000,000 1,092,500 769123BN
7.50% 10/1/26 BBB 2,500,000 2,731,250 769123BP
Riverside Redev. Agcy. Multi-Family Rev.
(First & Market Proj.) Series A,
7.75% 9/1/21 (b) Baa 4,200,000 4,462,500 769046AB
Riverside Unified School Dist. Ctfs. of Prtn.
(Cap. Appreciation Land Acquisition Proj.)
Series B, 0% 9/1/26, (FSA Insured) (f) Aaa 2,150,000 1,617,875 769062AD
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Sacramento City Fing. Auth. (Cap. Appreciation
Tax Allocation Proj.)(MBIA Insured):
Series A, 0% 11/1/16 Aaa $ 5,700,000 $ 1,517,625 785849BS
Series B, 0%11/1/13 Aaa 500,000 160,625 785849BP
Sacramento County Single Family Mtg. Rev.
Series A, 7.80% 10/1/23,
(FNMA & GNMA Coll.)(b) AAA 115,000 120,606 786149EY
Sacramento Fing. Auth. Lease Rev. Rfdg.
Series A, 5.40% 11/1/20,
(AMBAC Insured) Aaa 2,500,000 2,421,875 785846BN
Sacramento Muni. Util. Dev. Index Inflows 0%
7.33%11/15/08, (FGIC Insured)(d) Aaa 7,000,000 6,938,750 7860042C
Sacramento Muni. Util Dist. Elec. Rev.
9.78% 8/15/18, (FGIC Insured) (d) Aaa 1,750,000 2,021,250 786004U5
Sacramento Redev. Agcy. Tax Allocation
(Downtown Redev. Proj.) Series A, (MBIA Insured):
6.75% 11/1/05 Aaa 2,000,000 2,235,000 786059JZ
6.50% 11/1/13 Aaa 2,000,000 2,147,500 786059KA
Salinas Facs. Rev. (Villa Sierra Proj.)
Series A, 7.95% 4/20/31, (GNMA Coll.) AAA 2,450,000 2,578,625 794904AD
San Bernardino County Ctfs. of Prtn.:
(Cap. Facs. Proj.) Series B, 6.875%
8/1/24 Baa1 2,500,000 2,959,375 796815KR
(Med Ctr. Fing. Proj.)(g):
5.50% 8/1/17 Baa1 6,500,000 5,988,125 796815NL
5.50% 8/1/22 Baa1 4,500,000 4,095,000 796815NN
San Bernardino County Trans. Auth. Sales Tax
Rev. Series A, 6% 3/1/10, (FGIC Insured) Aaa 2,000,000 2,077,500
796846AP
San Bernardino Health Care Sys. Rev.
(Sisters of Charity) Series A, 7% 7/1/11 Aa 1,410,000 1,551,000
796790CA
San Diego County Wtr. Auth. Wtr. Rev.
Ctfs. of Prtn. (Reg. Rites) 8.50724%
4/25/07, (FGIC Insured) (d) Aaa 1,250,000 1,337,500 797415CS
San Francisco City & County Redev. Agcy.
7.75% 9/1/06 - 6,000,000 6,352,500 797712AE
San Francisco City & County Redev. Agcy.
Multi-family Rev. Rfdg. Hsg.
(South Beach Proj.) 5.70% 3/1/29
(GNMA Coll.) Aaa 5,000,000 4,812,500 79765TAP
San Francisco City & County Redev. Fing.
Auth. Tax Allocation:
Rfdg. (Cap. Appreciation) (Redev. Proj.)
Series B, 0% 8/1/10, (MBIA Insured) Aaa 1,475,000 586,313 79771PDM
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
San Francisco City & County Redev. Fing.
Auth. Tax Allocation - continued:
Series B, 0% 8/1/12, (MBIA Insured) Aaa $ 1,475,000 $ 523,625 79771PDQ
San Francisco City & County Single Family
Mtg. Rev. 7.45% 1/1/24,
(FNMA & GNMA Coll.)(b) AAA 255,000 273,169 797717FP
San Joaquin County Ctfs. of Prtn.
(Gen. Hosp. Proj.) 6.25% 9/1/13 A 2,500,000 2,571,875 798085DW
San Joaquin Hills Trans. Corridor Agcy.
Toll Road Rev. (Sr. Lien):
0% 1/1/04 - 2,350,000 1,424,688 798111AE
0% 1/1/07 - 3,000,000 1,890,000 798111AJ
5% 1/1/33 - 4,975,000 3,973,781 798111BJ
San Jose Redev. Agcy. Tax Allocation
Redev. Proj. 5% 8/1/21 (MBIA Insured) A 10,000,000 8,787,500 798147LG
Santa Barbara Ctfs. of Prtn.:
(American Baptist Hosp.) 7.40% 5/15/15 A+ 2,000,000 2,227,500 801242DF
6.40% 2/1/11 A+ 2,490,000 2,570,925 801321DQ
Santa Clara Ctfs. of Prtn. Ref. Series A,
4.75% 2/1/14, (MBIA Insured) Aaa 1,250,000 1,131,250 801400BG
Selma Redev. Agcy. Tax Allocation
(Selma Redev. Proj.) 8.10% 8/1/13 (h) - 825,000 866,250 816537AN
Sequoia Hosp. Dist. Rev.:
5.375% 8/15/13 A 4,000,000 3,750,000 817393BZ
5.375% 8/15/23 A 8,275,000 7,540,594 817393CA
Solano County Ctfs. of Prtn. Rfdg.
(Justice Facs. & Pub. Bldg. Proj.)
5.875% 10/1/05 Baa1 2,500,000 2,521,875 834131BR
Southern California Home Fin. Auth. Single
Family Mtg. Rev. Series B, 7.75% 3/1/24,
(GNMA & FNMA Coll.)(b) AAA 275,000 299,406 842440DQ
Southern California Pub. Pwr. Auth. Pwr. Proj. Rev.:
Rfdg. (Palo Verde Proj.) Series A:
0% 7/1/14, (AMBAC Insured) Aaa 8,325,000 2,539,125 842475JH
5% 7/1/15 Aa 1,125,000 1,027,969 842475NF
(Multiple Proj.):
6.75% 7/1/11 A 6,500,000 7,239,375 842475KL
6.75% 7/1/12 A 1,960,000 2,190,300 842475KM
6.75% 7/1/13 A 3,000,000 3,363,750 842475KN
Southern California Pub. Pwr. Auth.
Southern Transmission (Cap. Appreciation)
0% 7/1/14 Aa 5,000,000 1,506,250 842477JF
Southern California Pub. Pwr. Auth. Transmission Proj.
Rev. Rfdg. (Sub Crossover) 0% 7/1/13
(100% GIC In Escrow until 1/1/94) Aa 1,500,000 480,000 842477JE
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Sulphur Springs Unified School Dist. (MBIA Insured):
Series A, 0% 9/1/08 Aaa $ 2,745,000 $ 1,221,525 865480EY
Unltd. Tax Series A, 0% 9/1/12 Aaa 2,750,000 948,750 865480FC
Sunnyvale Fing. Agcy. Util. Rev. (Solid Waste
Materials Recovery) Series B, 6%
10/1/17 (MBIA Insured)(b) Aaa 3,000,000 3,082,500 867549BU
Torrance Hosp. Rev. (Little Co. of Mary Hosp.)
6.875% 7/1/15 A 920,000 1,000,500 891368CK
Upland Ctfs. Partn. (San Antonio Commty.
Hosp.) 5.25% 1/1/08 A 1,850,000 1,764,438 915346DN
Upland Hosp. Ctfs. of Prtn. (San Antonio
Commtys. Hosp.) 5.25% 1/1/13 A 3,000,000 2,767,500 915346DP
Upland Hsg. Auth. Rev. Issue A, 7.85%
7/1/20 - 990,000 1,037,025 91536HAL
Vallejo Ctfs. of Prtn. (Marine World
Foundation Proj.) 8.10% 2/1/21 - 7,780,000 8,110,650 919191BC
Valley Ctr. Union School Dist. Series A,
0% 9/1/17, (MBIA Insured) Aaa 8,835,000 2,263,970 919439BT
Vista Unified School Dist. Ctfs. of Prtn. 0%
9/1/11, (MBIA Insured) Aaa 8,585,000 2,672,081 92834MAJ
Walnut Pub. Fing. Auth. Tax Allocation Rev.
Rfdg. (Walnut Impt. Proj.) 6.50%
9/1/22, (MBIA) Aaa 1,500,000 1,618,125 932660AR
West & Central Basin Fing. Auth. Rev.:
Rfdg. (West Basin Proj.) Series A, 5%
8/1/10, (AMBAC Insured) Aaa 1,155,000 1,097,250 95122ECD
(West Basin Proj.) Series A, 5% 8/1/10,
(AMBAC Insured) Aaa 1,750,000 1,662,500 95122ECE
527,930,712
GUAM - 0.7%
Guam Arpt. Auth. Rev.:
Series A, 6.60% 10/1/10(b) BBB 1,000,000 1,045,000 400648BK
Series B, 6.70% 10/1/23(b) BBB 2,850,000 2,988,938 400648BM
4,033,938
PUERTO RICO - 2.2%
Puerto Rico Commonwealth Hwy. & Trns.
Auth. Rev. Series W, 5.50% 7/1/13 Baa1 5,125,000 5,028,906 745181BZ
Puerto Rico Elec. Pwr. Auth. Pwr. Rev.
Series P, 7% 7/1/21 Baa1 4,000,000 4,440,000 745268LL
Puerto Rico Tel. Auth. Rev. 6.78% 1/1/04,
(AMBAC Insured) (d) Aaa 2,250,000 2,188,125 745297HX
11,657,031
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
U.S. VIRGIN ISLANDS - 0.3%
Virgin Islands Pub. Fin. Auth. Rev. Rfdg.
Series A, 7.25% 10/1/18 (e) - $ 1,500,000 $ 1,650,000 927676CF
TOTAL MUNICIPAL BONDS
(Cost $519,167,374) $ 545,271,681
MUNICIPAL NOTES (A) - 1.5%
CALIFORNIA - 1.5%
California Poll. Cont. Fing. Auth. Resources
Recovery Rev., VRDN:
(Delano Proj.) Series 1991, 2.30%,
LOC Algemene/ABN-AMRO Bank, (b) P-1 300,000 300,000 130535BE
(Ultra Pwr. Rocklin Proj.) Series 1988 B,
2.35%, LOC Bank of America Nat'l.
Trust & Savings - 3,000,000 3,000,000 130535AN
Contra Costa Tax and Rev. Anticipation
Notes, Series A, 3.25% 7/29/94 MIG 1 5,000,000 5,004,650 212219BV
TOTAL MUNICIPAL NOTES
(Cost $8,309,087) $ 8,304,650
OTHER SECURITIES - 0.0%
RIGHTS
CALIFORNIA - 0.0%
Riverside County Asset Leasing Corp. Leasehold Rev.
(Riverside County Hosp.) Series A (Call Rights)
6.50% 6/1/12 (Cost $59,590) - 1,100 220,688
TOTAL INVESTMENTS - 100%
(Cost $527,536,051) $ 553,797,019
FUTURES CONTRACTS
AMOUNT IN THOUSANDS EXPIRATION UNDERLYING FACE UNREALIZED
DATE AMOUNT AT VALUE GAIN/(LOSS)
SELL
65 U.S. Treasury Bond Futures March, 1994 7,306,406 $ 4,721
THE VALUE OF FUTURES CONTRACTS SOLD AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 1.3%
SECURITY TYPE ABBREVIATIONS
VRDN - Variable Rate Demand Notes
LEGEND
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(b) Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals (AMT securities).
(c) Standard & Poor's Corporation credit ratings are used in the
absence of a rating by Moody's Investors Service, Inc.
(d) Inverse floating rate security is a security where the coupon is
inversely indexed to a floating interest rate. The price will be more
volatile than the price of a comparable fixed rate security.
(e) Security collateralized by an amount sufficient to pay interest and
principal.
(f) Debt obligation initially issued in zero coupon form which converts to
coupon form at a specified rate and date.
(g) Security purchased on a delayed delivery basis (see Note 2 of Notes to
Financial Statements).
(h) Security was pledged to cover margin requirements for futures
contracts. At the period end, the value of securities pledged amounted to
$1,805,000.
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 59.5% AAA, AA, A 72.1%
Baa 9.6% BBB 9.2%
Ba 0.0% BB 0.0%
B 0.0% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
The percentage not rated by either S&P or Moody's amounted to 8.6%.
The distribution of municipal securities by revenue source, as a percentage
of total value of investment in securities, is as follows:
Lease Revenue 26.1%
Health Care 19.8
Special Tax 18.3
Others (individually less
than 10%) 35.8
TOTAL 100.0%
INCOME TAX INFORMATION
At February 28, 1994 the aggregate cost of investment securities for income
tax purposes was $527,536,051. Net unrealized appreciation aggregated
$26,260,968, of which $30,416,067 related to appreciated investment
securities and $4,155,099 related to depreciated investment securities.
The fund hereby designates $1,656,000 as a capital gain dividend for the
purpose of the dividend paid deduction.
At February 28, 1994 the fund was required to defer $3,065,000 of losses on
futures contracts and options.
SPARTAN CALIFORNIA MUNICIPAL HIGH YIELD PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
FEBRUARY 28, 1994
7.ASSETS 8. 9.
10.Investment in securities, at value (cost 11. $ 553,797,019
$527,536,051) (Notes 1 and 2) - See accompanying
schedule
12.Cash 13. 33,660
14.Receivable for investments sold 15. 19,997,305
16.Interest receivable 17. 7,182,991
18.Redemption fees receivable (Note 1) 19. 1,837
20. 21.TOTAL ASSETS 22. 581,012,812
23.LIABILITIES 24. 25.
26.Payable for investments purchased $ 10,426,032 27.
Delayed delivery (Note 2)
28.Payable for fund shares redeemed 3,263,887 29.
30.Dividends payable 409,777 31.
32.Accrued management fee 249,597 33.
34.Payable for daily variation on futures contracts 50,781 35.
36. 37.TOTAL LIABILITIES 38. 14,400,074
39.40.NET ASSETS 41. $ 566,612,738
42.Net Assets consist of (Note 1): 43. 44.
45.Paid in capital 46. $ 533,683,167
47.Accumulated undistributed net realized gain (loss) on 48. 6,663,882
investments
49.Net unrealized appreciation (depreciation) on: 50. 51.
52. Investment securities 53. 26,260,968
54. Futures contracts 55. 4,721
56.57.NET ASSETS, for 51,839,522 shares outstanding 58. $ 566,612,738
59.60.NET ASSET VALUE, offering price and redemption 61. $10.93
price per share ($566,612,738 (divided by) 51,839,522 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED FEBRUARY 28, 1994
62.63.INTEREST INCOME 64. $ 36,476,769
65.EXPENSES 66. 67.
68.Management fee (Note 4) $ 3,287,940 69.
70.Non-interested trustees' compensation 3,794
71. Total expenses before reductions 3,291,734
72. Expense Reductions (Note 5) (202,856) 3,088,878
73.74.NET INTEREST INCOME 75. 33,387,891
76.REALIZED AND UNREALIZED GAIN (LOSS) ON 78. 79.
INVESTMENTS
(NOTES 1 AND 3)
77.Net realized gain (loss) on:
80. Investment securities 24,834,702 81.
82. Futures contracts 1,770,838 26,605,540
83.Change in net unrealized appreciation (depreciation) 84. 85.
on:
86. Investment securities (26,250,217) 87.
88. Futures contracts (487,377) (26,737,594)
89.90.NET GAIN (LOSS) 91. (132,054)
92.93.NET INCREASE (DECREASE) IN NET ASSETS 94. $ 33,255,837
RESULTING FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR TEN MONTHS ENDE
ENDED D
FEBRUARY 28, 1994 FEBRUARY 28, 1993
(NOTE 1)
95.INCREASE (DECREASE) IN NET ASSETS
96.Operations $ 33,387,891 $ 25,995,632
Net interest income
97. Net realized gain (loss) on investments 26,605,540 3,878,795
98. Change in net unrealized appreciation (depreciation) (26,737,594) 37,174,010
on investments
99. 100.NET INCREASE (DECREASE) IN NET ASSETS 33,255,837 67,048,437
RESULTING FROM
OPERATIONS
101.Distributions to shareholders (33,387,891) (25,995,632)
From net interest income
102. From net realized gain (17,385,450) (3,291,418)
103. In excess of net realized gain (3,001,030) -
104. 105.TOTAL DISTRIBUTIONS (53,774,371) (29,287,050)
106.Share transactions 153,539,687 179,086,059
Net proceeds from sales of shares
107. 46,508,005 25,707,655
Reinvestment of distributions
108. Cost of shares redeemed (186,891,146) (147,921,333)
109. Redemption fees (Note 1) 103,560 100,581
110. 13,260,106 56,972,962
Net increase (decrease) in net assets resulting from
share transactions
111. (7,258,428) 94,734,349
112.TOTAL INCREASE (DECREASE) IN NET ASSETS
113.NET ASSETS 114. 115.
116. Beginning of period 573,871,166 479,136,817
117. End of period $ 566,612,738 $ 573,871,166
118.OTHER INFORMATION 120. 121.
119.Shares
122. Sold 13,616,855 16,578,722
123. Issued in reinvestment of distribution 4,155,944 2,379,910
124. Redeemed (16,596,175) (13,752,500)
125. Net increase (decrease) 1,176,624 5,206,132
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
126. YEAR TEN MONTHS YEARS ENDED APRIL 30, NOVEMBER 27,
ENDED ENDED 1989
FEBRUARY 28 FEBRUARY 28, (COMMENCEME
, 1993 NT
OF OPERATIONS)
TO
APRIL 30,
127. 1994 (NOTE 1) 1992 1991 1990
128.SELECTED PER-SHARE DATA
129.Net asset value, $ 11.330 $ 10.540 $ 10.240 $ 9.760 $ 10.000
beginning of period
130.Income from .631 .543 .663 .706 .301
Investment Operations
Net interest income
131. Net realized and (.012) .858 .297 .472 (.249)
unrealized gain (loss)
on investments
132. Total from .619 1.401 .960 1.178 .052
investment
operations
133.Less Distributions (.631) (.543) (.663) (.706) (.301)
From net interest
income
134. From net realized (.330) (.070) - - -
gain
on investments
135. Distributions in (.060) - - - -
excess of
net realized gain
136. Total distributions (1.021) (.613) (.663) (.706) (.301)
137.Redemption fees .002 .002 .003 .008 .009
added to paid in capital
138.Net asset value, end $ 10.930 $ 11.330 $ 10.540 $ 10.240 $ 9.760
of period
139.TOTAL RETURN (dagger) 5.63% 13.76% 9.66% 12.52% .59%
140.RATIOS AND SUPPLEMENTAL DATA
141.Net assets, end of $ 566,613 $ 573,871 $ 479,137 $ 281,725 $ 107,409
period (000 omitted)
142.Ratio of expenses to .52% .40%* .36% .19% -
average net assets(dagger)(dagger)
143.Ratio of expenses to .55% .55%* .55% .55% .55%*
average net assets
before expense
reductions(dagger)(dagger)
144.Ratio of net interest 5.58% 6.07%* 6.36% 7.02% 7.42%*
income to average net
assets
145.Portfolio turnover 54% 26%* 13% 15% 5%*
rate
</TABLE>
* ANNUALIZED
(dagger) TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. TOTAL RETURNS WOULD HAVE
BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
(dagger)(dagger) SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS.
SPARTAN CALIFORNIA INTERMEDIATE MUNICIPAL PORTFOLIO
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each figure
includes changes in a fund's share price, reinvestment of any dividends (or
income) and capital gains (the profits the fund earns when it sells bonds
that have grown in value), and the effect of the $5 account closeout fee.
You can also look at the fund's income. If Fidelity had not reimbursed
certain fund expenses during the periods shown, the total returns,
dividends and yields would have been lower.
CUMULATIVE TOTAL RETURNS
PERIOD ENDED FEBRUARY 28, 1994 LIFE OF
FUND
Spartan California Intermediate Municipal -1.72%
Lehman Brothers Municipal Bond Index n/a
Average California Tax-Exempt
Municipal Intermediate Bond Fund n/a
Consumer Price Index 0.62%
CUMULATIVE TOTAL RETURNS reflect actual performance over a set period - in
this case, since the fund started on December 30, 1993. For example, if you
had invested $1,000 in a fund that had a 5% return over the past year, you
would end up with $1,050. Once the fund is six months old, you can compare
the fund's results to the performance of the Lehman Brothers Municipal Bond
Index - a broad gauge of the municipal bond market. To measure how the fund
stacks up against its peers (again, once it's six months old), you can also
look at the average California tax-exempt intermediate municipal bond fund,
which reflects the performance of 22 California tax-exempt intermediate
municipal bond funds tracked by Lipper Analytical Services. Both benchmarks
include reinvested dividends and capital gains, if any. Comparing the
fund's performance to the consumer price index helps show how your fund did
compared to inflation. (The periods covered by the CPI numbers are the
closest available match to those covered by the fund.)
AVERAGE ANNUAL TOTAL RETURNS
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) results
and show you what would have happened if the fund had performed at a
consistent rate each year. Average annual returns for the fund and its
benchmarks will appear in the fund's next annual report, once the fund is
older; this next report will also show the effect of investing $10,000 over
the life of the fund for both the fund and the Lehman Brothers Municipal
Bond Index.
INCOME
DECEMBER 30, 1993
(COMMENCEMENT
OF OPERATIONS) TO
FEBRUARY 28, 1994
Income return 0.69%
Change in share price -2.41%
Total return -1.72%
INCOME returns and changes in share price are both part of a bond fund's
total return. An income return reflects the dividends paid by the fund and
assumes the dividends are reinvested. Changes in the fund's share price
include changes in the prices of the bonds owned by the fund. Change in
share price and total return figures include the effect of the $5 account
closeout fee.
DIVIDENDS AND YIELD
PERIOD ENDED FEBRUARY 28, 1994 PAST 30 LIFE OF
DAYS FUND
Dividends per share n/a 7.02(cents)
Annualized dividend rate n/a 4.21%
Annualized yield 4.83% n/a
Tax-equivalent yield 8.48% n/a
DIVIDENDS per share show the income paid by the fund for a set period. If
you annualize this number, based on an average share price of $9.97 over
the life of the fund, you can compare the fund's income over these two
periods. The 30-day annualized YIELD is a standard formula for all funds
based on the yields of the bonds in the fund, averaged over the past 30
days. This figure shows you the yield characteristics of the fund's
investments at the end of the period. It also helps you compare funds from
different companies on an equal basis. The tax-equivalent yield shows what
you would have to earn on a taxable investment to equal the fund's tax-free
yield, if you're in the 43.04% combined effective 1994 federal and state
income tax bracket.
SPARTAN CALIFORNIA INTERMEDIATE MUNICIPAL PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
Bond investments - including
tax-free issues - provided solid
returns for the 12 months ended
February 28, 1994, despite a
dramatic downturn in February.
Falling interest rates pushed up
bond prices steadily through
mid-October, when the yield on the
benchmark 30-year Treasury bond
reached a historic low of 5.79%. By
year-end, a strengthening economy
had fueled mild inflation fears. That
pushed up the yield on the 30-year
bond to 6.35% on December 31,
which forced investors to give back
some of their earlier profits. Inflation
jitters eased and bond yields
dropped in January. However,
when the Federal Reserve Bank
raised short-term interest rates in
an attempt to control inflation on
February 4, investors reacted
negatively. At the end of February,
the yield on the 30-year bonds was
6.66%, about 38 basis points
higher than at the beginning of the
month. Over the year, higher
federal income taxes boosted
demand for municipal bonds. But
municipal bond prices were hurt by
the Fed's action in February and by
record new issuance, which kept
supplies high and dampened
prices. The return on the Lehman
Brothers Municipal Bond Index, a
broad measure of the tax-free
market, rose 5.54%. By
comparison, the Lehman Brothers
Aggregate Bond Index, which
tracks investment-grade taxable
bonds, returned 5.40%. Globally,
falling interest rates and low
inflation drove good annual returns
in Europe, Japan, and most
emerging markets, although many
of these markets fell in February
along with the U.S. bond market.
The Salomon Brothers World
Government Bond Index - which
includes U.S. issues - returned
9.34%, while the J.P. Morgan
Emerging Markets Bond Index was
up a dramatic 29.46%.
Interview with David Murphy,
Portfolio Manager of Spartan California Intermediate Municipal Portfolio
Q. DAVID, HOW DID THE FUND DO?
A. The fund's total return from the start of operations on December 30,
1993 to February 28, 1994 was -1.72.%.
Q. WHAT ACCOUNTED FOR THE NEGATIVE
RETURN?
A. In February, the Federal Reserve raised short-term interest rates, which
caused short-term bond prices to fall. That also caused longer-term bond
prices to drop, which in turn hurt the fund's investments. Despite the
municipal bond market's negative reaction, I still think interest rates
will continue to stay low over the long term. My view is that the Fed is
very serious about being the inflation watchdog. Low inflation is generally
good for bonds. Historically, a pick-up in the economy - like we saw in the
fourth quarter of 1993 - means higher inflation. But this time, I don't
think that relationship will hold up.
Q. WHY IS THAT?
A. Because I think that inflation is low, lower than the market has
anticipated. We still haven't seen a broad-based increase in any of the
three basic components of higher inflation: commodity prices, labor costs,
and the cost of borrowing money. While it's true that some commodity prices
- - like gold, grains, and copper - have risen, others - like oil - haven't.
Plus, some of the hike in agricultural products was due to extraordinary
factors like last year's flood and the recent cold weather.
Q. AND THE OTHER TWO INFLATIONARY SIGNALS?
A. On the wage side, many U.S. companies now have the flexibility to move
their production overseas, where labor prices are often cheaper, and that
has kept pressure on labor costs here. Also, productivity has increased,
which means the actual cost of producing one unit of a given good has come
down. Finally, the cost of borrowing money is still low. In my view, these
all add up to continued low inflation, which in turn could lead to falling
interest rates, especially in the longer end of the maturity spectrum
between 10 and 30 years.
Q. WHAT'S YOUR VIEW OF THE CALIFORNIA ECONOMY?
A. My view is that the California economy is at a turning point. I think we
should start to see evidence of expansion soon, even though that expansion
will be modest initially. Employment in California is expected to grow in
1994, and there's been a rebound in retail sales and help-wanted
advertising. Plus, the passage of NAFTA should be a positive for the state.
Finally, federal assistance and private insurance payments stemming from
the recent Los Angeles earthquake will provide a $14 billion stimulus for
California.
Q. IS YOUR OUTLOOK FOR THE STATE'S FISCAL SITUATION ALSO POSITIVE?
A. On that front I have a few concerns. First, the state has drawn down its
budget reserves. And second, the proposed 1994 budget assumes a $2.5
billion federal government appropriation earmarked for immigration issues.
Yet it's not certain that appropriation will materialize. But, as the
economy improves, so should tax revenues. As more people get back into the
work force, income tax receipts will rise. If retail sales improve that
would translate into higher sales tax revenues. The effect of those factors
probably won't be felt for at least a year. So I think the state will
continue to face fiscal pressures for the next 12 months.
Q. IN LIGHT OF THOSE CONCERNS, WHAT HAS YOUR STRATEGY BEEN?
A. Since we haven't seen a significant rebound yet, I've mainly focused on
higher quality bonds. The fund's stake in Aaa bonds was 35.5% on February
28. As the economic rebound gains momentum, I may add some A- and Baa-rated
bonds. In terms of maturity, I've concentrated on bonds with 10- to 15-year
maturities. Out to 15 years, the yield curve -meaning the difference in
yield between different maturity bonds - is steep. That means you get more
yield buying 12-year bonds than five-year bonds. Beyond 15 years, the yield
curve is flat and you don't get rewarded much for buying a longer-term
bond.
Q. WHAT DO YOU THINK INVESTORS CAN EXPECT FOR THE NEXT SIX MONTHS?
A. Over the short term, more volatility. The municipal bond market seems to
be expecting the Fed to raise short-term interest rates to 4%. Until that
happens, the market probably will remain unsettled. But eventually, I
believe that long-term municipal rates could start to fall again, and that
intermediate rates could come down as well. Plus, the dwindling supply of
municipal bonds should help. Falling interest rates and a shrinking supply
would be positive for municipal bond prices.
FUND FACTS
GOAL: to provide current
income exempt from federal
and state
income taxes
START DATE: December 30,
1993
SIZE: as of February 28, 1994,
over $22 million
MANAGER: David Murphy,
since December, 1993;
manager,
Spartan New York
Intermediate Portfolio, since
December,1993; Spartan
Intermediate Municipal
Portfolio, since April 1993;
Spartan New Jersey Municipal
High Yield Portfolio, since April
1991; Fidelity Limited Term
Municipals, since December
1989; Spartan
Short-Intermediate Municipal
Fund, since December 1989
(checkmark)
DAVID MURPHY ON INTERMEDIATE
BONDS:
"I think that intermediate
bonds in the five- to 15- year
range will be attractive in
1994. The yield curve - or
the difference in yield
between bonds with various
maturities - is very steep up
to 15 years. At the end of the
period, a 15-year California
Aaa bond paid about 5.40%
yield, compared to a five-year
bond which paid 4.40%. But in
the 15- to 30-year range, the
curve was flat. In that longer
range, you only got rewarded
with about one-quarter of a
percentage in incremental
yield. What's more, some
institutional investors have
started to increase their
investments in intermediate
bonds. That increased
demand could be a positive
for intermediate municipal
bond prices."
(bullet) About one-fifth of the fund's
investments were in utilities
- - like water, sewer, and
electric revenue bonds - on
February 28, 1994. These
were attractive because the
utilities have a stable cash
flow, which helps insulate
them during times when the
economy is weak.
(bullet) Health-care bonds were the
fund's second largest
concentration, at 19.2% of the
total investments. They were
attractive because of their
relatively high yields.
SPARTAN CALIFORNIA INTERMEDIATE MUNICIPAL PORTFOLIO
INVESTMENT SUMMARY
TOP FIVE SECTORS AS OF FEBRUARY 28, 1994
% OF FUND'S
INVESTMENTS
Health Care 19.2
Lease Revenue 19.2
Water & Sewer 12.5
Special Tax 9.9
Electric Revenue 8.4
AVERAGE YEARS TO MATURITY AS OF FEBRUARY 28, 1994
Years 8.3
AVERAGE YEARS TO MATURITY SHOWS THE AVERAGE TIME UNTIL THE PRINCIPAL OF THE
BONDS IN THE FUND IS EXPECTED TO BE REPAID, WEIGHTED BY DOLLAR AMOUNT.
DURATION AS OF FEBRUARY 28, 1994
Years 6.0
DURATION SHOWS HOW MUCH A BOND'S PRICE FLUCTUATES WITH CHANGES IN INTEREST
RATES. IF RATES RISE 1%, FOR EXAMPLE, THE SHARE PRICE OF A FUND WITH A
FIVE-YEAR DURATION WILL FALL 5%.
QUALITY DIVERSIFICATION AS OF FEBRUARY 28, 1994
(MOODY'S RATINGS)
Aaa 35.5%
Aa, A 46.3%
Baa 18.2%
Ba, B 0%
Non-rated 0%
Row: 1, Col: 1, Value: 35.5
Row: 1, Col: 2, Value: 46.3
Row: 1, Col: 3, Value: 18.2
Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: 0.0
THIS CHART EXCLUDES SHORT-TERM INVESTMENTS. WHERE MOODY'S RATINGS ARE NOT
AVAILABLE, WE HAVE USED S&P RATINGS.
SPARTAN CALIFORNIA INTERMEDIATE MUNICIPAL PORTFOLIO
INVESTMENTS/FEBRUARY 28, 1994
(Showing Percentage of Total Value of Investments)
MUNICIPAL BONDS - 78.7%
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - 76.8%
ABAG Fin. Auth. for Nonprofit Corp.
Cfts. of Prtn. (Stanford Univ. Hosp.)
5% 11/1/04 Aa $ 400,000 $ 401,500 00037EBA
California Health Facs. Fing. Auth. Rfdg.
(Catholic Healthcare West) 5% 7/1/07
(AMBAC Insured) Aaa 220,000 210,375 13033ABJ
California Pub. Wrks. Board Lease Rev.
Rfdg. Dept. State Prisons Series A,
5% 12/1/01 A1 200,000 199,500 13068GNR
California Statewide Commtys. Dev. Corp.
Auth. Rev. Ctfs. of Prtn. Rfdg. (Insured Hosp.)
(Triad Healthcare):
5.25% 8/1/97 A+ 250,000 247,812 130909CF
5.90% 8/1/01 A+ 200,000 202,250 130909CK
6.25% 8/1/06 A+ 1,000,000 1,013,750 130909CM
California University Rev. Rfdg.
(Multiple Purp. Projs.) Series C:
Rfdg. (Multiple Purp. Projs.)
Series C, 4.80% 9/1/07
(AMBAC Insured) Aaa 300,000 286,500
Series C, 9% 9/1/02
(AMBAC Insured) Aaa 100,000 128,500 914113UE
Carson Redev. Agcy. Rfdg.
(Redev. Proj. Area 2) (Tax Allocation)
5.50% 10/1/02 Baa 100,000 99,625 145750DK
Central Valley Fin. Auth. Cogeneration Proj.
Rev. (Carson Ice Proj.) 5.80% 7/1/04 BBB- 200,000 199,500 155689AJ
Clovis Unified School Dist. (Cap. Appreciation)
Series B, 0% 8/1/02 A1 300,000 192,750 189342QF
Cucamonga County Ctfs. of Prtn. Wtr. Dist.
Facs. Proj. 5% 9/1/10 (FGIC Insured) Aaa 455,000 431,112 229694CV
Fresno Swr. Rev. Series A-1, 5% 9/1/08,
(AMBAC Insured) Aaa 105,000 101,587 358229CD
Los Angeles County Ctfs. of Prtn.
(Multiple Cap. Facs. Proj.) 8.55%
11/1/01 (d) A1 200,000 220,000 544663R9
Los Angeles County Metropolitan Trans. Auth.
Sales Tax Rev. Rfdg. Series A:
5.20% 7/1/04 A1 750,000 749,063 544712AM
5.50% 7/1/09 A1 300,000 294,750 544712AA
Los Angeles Dept. of Wtr. & Pwr. Elec. Rev.:
Rfdg. 4.75% 8/15/07 Aa 800,000 756,000 544507LH
9% 10/15/01 Aa 110,000 138,875 544507JH
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Northern California Pwr. Agcy. Multiple Cap.
Facs. Rev. Series A, 6% 8/1/03,
(MBIA Insured) Aaa $ 300,000 $ 323,625 664842AH
Orange County Dev. Agcy. Tax Allocation
(Santa Ana Heights Proj.) 5.80% 9/1/03 Baa1 1,235,000 1,230,369
684246BU
Palomar Pomerado Health Sys. Rev. 5%
11/1/07 (MBIA Insured) Aaa 300,000 287,250 69753EAP
Port Oakland Port. Rev. Rfdg. Series F, 0%
11/1/05, (MBIA Insured) Aaa 300,000 161,625 734897RP
Rancho Cucamonga Redev. Agcy. Tax
Allocation (Rancho Redev. Proj.) 5% 9/1/10
(MBIA Insured) Aaa 300,000 286,125 752123DJ
Redlands Ctfs. of Prtn. Rfdg.
(Wtr. Treatment Facs. Proj.)
4.5% 9/1/15, (FGIC Insured) Aaa 930,000 942,788 757564GL
Riverside County Trans. Commtys. Sales Tax
Rev. Series A, 5.40% 6/1/03
(AMBAC Insured) Aaa 500,000 517,500 769125BB
Rosemead Redev. Agcy.
(Subordinated Lien Tax Allocation Proj.
Area 1) 0% 10/1/98 A- 1,120,000 908,600 777520BH
San Bernadino County Ctfs. of Prtn. Med.
Ctr. Fing. 5.25% 8/1/05 (f) Baa1 1,235,000 1,171,706 796815NX
San Diego County Ctfs. of Prtn. Rfdg.
5.25% 9/1/04 (AMBAC Insured) Aaa 500,000 509,375 797391HP
San Diego County Reg.'l Trans. Common
Sales Tax Rev. Rfdg. Series A, 5.20%
4/1/05 (FGIC Insured) Aaa 100,000 100,500 797400CC
San Diego Swr. Rev. Series A, 4.90%
5/15/09 (AMBAC Insured) Aaa 500,000 472,500 797304EB
San Diego Unified School Dist. Ctfs. of Prtn.
Rfdg. Cap. Proj. Series B, 5.25%
7/1/02 Aa 400,000 411,000 797358CU
San Francisco Bldg. Auth. Lease Rev. Dept.
Gen'l Svcs. Lease Series A:
5% 10/1/05 A1 400,000 388,000 79772LAM
5.10% 10/1/06 (MBIA Insured) Aaa 300,000 296,625 79772LAU
Sequoia Hosp. Dist. Rev.:
Rfdg. 5% 8/15/03 A 1,285,000 1,264,119 817393BU
4.90% 8/15/02 A 500,000 492,500 817393BT
Southern California Pub. Pwr. Auth. Pwr. Proj. Rev.:
Rfdg. (Mead Adelanto Proj.)
Series A, 4.75% 7/1/08
(AMBAC Insured) (f) Aaa 500,000 464,375 842475QZ
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Southern California Pub. Pwr. Auth. Pwr. Proj. Rev.: - continued
Rfdg. (Mead Adelanto Proj.)
Series 11, 0% 7/1/15,
(Pre-Prefunded to 7/1/00 @ 101)(e) Aaa $ 300,000 $ 224,625 842475JW
Walnut Creek Ctfs. of Prtn. Rfdg.
(John Muir Med. Ctr.) 4.95% 2/15/05
(MBIA Insured) Aaa 300,000 289,875 932702CD
16,616,531
PUERTO RICO - 1.9%
Puerto Rico Commonwealth Gen. Oblig.
5.70% 7/1/08 Baa1 300,000 303,750 745144EB
Puerto Rico Commonwealth Rfdg. Impt.
Gen. Oblig. 5.375% 7/1/06 Baa1 100,000 99,875 745144KE
403,625
TOTAL MUNICIPAL BONDS
(Cost $17,419,727) $ 17,020,156
MUNICIPAL NOTES (A) - 21.3%
CALIFORNIA - 21.3%
California Poll. Cont. Fing. Auth.
Resources Recovery Rev. VRDN (b):
(Delano Proj.) Series 1991, 2.30%,
LOC Algemene/ABN-AMRO Bank P-1 200,000 200,000 130535BE
(Malaga Proj.) Series A, 2.35%,
LOC Bank of America Nat'l.
Trust & Savings - 700,000 700,000 130535AP
(Ultra Pwr. Rocklin Proj.) Series 1988 B,
2.35%, LOC Bank of America Nat'l.
Trust & Savings - 700,000 700,000 130535AN
Los Angeles County Ind. Dev. Auth.
(Cataic & Jae Proj.) 2.45%,
LOC Union Banc Corp., VRDN (b) - 800,000 800,000 544689CX
Los Angeles County Trans. Commission Sales
Tax Rev. Rfdg. Series 1992 A, 2.25%
(Liquidity Enhancement Industrial Bank of
Japan Ltd., VRDN VMIG 1 800,000 800,000 545170HL
Orange County Various Sanitation Dist.
Ctfs. of Prtn. (Cap. Impt. Prog.)
(Dist. 1-7 & 11) 2.20%,
(FGIC Insured), VRDN VMIG 1 700,000 700,000 684285BK
MUNICIPAL NOTES (A) - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Southern California Pub. Pwr. Auth. Rev.
(Transmission Proj.) Series 1991, 2.25%,
(AMBAC Insured) LOC Swiss Bank, VRDN VMIG 1 $ 700,000 $ 700,000 842477HH
TOTAL MUNICIPAL NOTES
(Cost $4,600,000) $ 4,600,000
TOTAL INVESTMENTS - 100%
(Cost $22,019,727) $ 21,620,156
SECURITY TYPE ABBREVIATIONS
VRDN - Variable Rate Demand Notes
LEGEND
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(b) Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals (AMT securities).
(c) Standard & Poor's Corporation credit ratings are used in the
absence of a rating by Moody's Investors Service, Inc.
(d) Inverse floating rate security is a security where the coupon is
inversely indexed to a floating interest rate. The price will be more
volatile than the price of a comparable fixed rate security.
(e) Security collateralized by an amount sufficient to pay interest and
principal.
(f) Security purchased on a delayed delivery basis (see Note 2 of Notes to
Financial Statements).
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total value
of investment in securities, is as follows (ratings are unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 53.4% AAA, AA, A 71.7%
Baa 13.4% BBB 7.1%
Ba 0.0% BB 0.0%
B 0.0% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
The percentage not rated by either S&P or Moody's amounted to 0.0%.
The distribution of municipal securities by revenue source, as a percentage
of total value of investment in securities, is as follows:
Health Care 19.2%
Lease Revenue 19.2
Water & Sewer 12.5
Others (individually less
than 10%) 49.1
TOTAL 100.0%
INCOME TAX INFORMATION
At February 28, 1994 the aggregate cost of investment securities for income
tax purposes was $22,019,727. Net unrealized depreciation aggregated
$399,571, of which $125 related to appreciated investment securities and
$399,696 related to depreciated investment securities.
SPARTAN CALIFORNIA INTERMEDIATE MUNICIPAL PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
DECEMBER 30, 1993 (COMMENCEMENT OF OPERATIONS) TO FEBRUARY 28, 1994
146.ASSETS 147. 148.
149.Investment in securities, at value (cost 150. $ 21,620,156
$22,019,727)
(Notes 1 and 2) - See accompanying schedule
151.Cash 152. 4,120,719
153.Interest receivable 154. 198,003
155.Receivable from investment adviser for expense 156. 7,123
reductions (Note 5)
157. 158.TOTAL ASSETS 159. 25,946,001
160.LIABILITIES 161. 162.
163.Payable for investments purchased $ 3,224,966 164.
Delayed delivery (Note 2)
165.Dividends payable 1,044 166.
167.Accrued management fee 7,123 168.
169. 170.TOTAL LIABILITIES 171. 3,233,133
172.173.NET ASSETS 174. $ 22,712,868
175.Net Assets consist of (Note 1): 176. 177.
178.Paid in capital 179. $ 23,112,439
180.Net unrealized appreciation (depreciation) on 181. (399,571)
investment securities
182.183.NET ASSETS, for 2,326,091 shares outstanding 184. $ 22,712,868
185.186.NET ASSET VALUE, offering price and 187. $9.76
redemption price per share ($22,712,868 (divided by) 2,326,091
shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
DECEMBER 30, 1993 (COMMENCEMENT OF OPERATIONS) TO FEBRUARY 28, 1994
188.189.INTEREST INCOME 190. $ 60,323
191.EXPENSES 192. 193.
194.Management fee (Note 4) $ 7,123 195.
196.Non-interested trustees' compensation - 197.
198.Total expenses before reductions 7,123
199.Expense reductions (Note 5) (7,123) -
200.201.NET INTEREST INCOME 202. 60,323
203.UNREALIZED GAIN (LOSS) ON INVESTMENTS 204. 205.
(NOTES 1 AND 3)
206.Change in net unrealized appreciation 207. (399,571)
(depreciation) on investment securities
208.209.NET INCREASE (DECREASE) IN NET ASSETS 210. $ (339,248)
RESULTING FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C>
DECEMBER 30,
1993
(COMMENCEMENT
OF OPERATIONS) TO
FEBRUARY 28, 1994
211.INCREASE (DECREASE) IN NET ASSETS
212.Operations $ 60,323
Net interest income
213. Change in net unrealized appreciation (depreciation) on investments (399,571)
214. (339,248)
215.NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS
216.Dividends to shareholders from net interest income (60,323)
217.Share transactions 27,634,217
Net proceeds from sales of shares
218. Reinvestment of dividends from net interest income 49,121
219. Cost of shares redeemed (4,570,899)
220. 23,112,439
Net increase (decrease) in net assets resulting from share transactions
221. 22,712,868
222.TOTAL INCREASE (DECREASE) IN NET ASSETS
223.NET ASSETS 224.
225. Beginning of period -
226. End of period $ 22,712,868
227.OTHER INFORMATION 229.
228.Shares
230. Sold 2,780,541
231. Issued in reinvestment of dividends from net interest income 5,010
232. Redeemed (459,460)
233. Net increase (decrease) 2,326,091
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C>
234. DECEMBER 30,
1993
(COMMENCEMENT
OF OPERATIONS) TO
FEBRUARY 28, 199
4
235.SELECTED PER-SHARE DATA
236.Net asset value, beginning of period $ 10.000
237.Income from Investment Operations $ .070
Net interest income
238. Net realized and unrealized gain (loss) on investments (.240)
239. Total from investment operations (.170)
240.Less Distributions (.070)
From net interest income
241.Net asset value, end of period $ 9.760
242.TOTAL RETURN (dagger) -1.71%
243.RATIOS AND SUPPLEMENTAL DATA
244.Net assets, end of period (000 omitted) $ 22,713
245.Ratio of expenses to average net assets (dagger)(dagger) -
246.Ratio of expenses to average net assets before expense reductions (dagger) .55%*
(dagger)
247.Ratio of net interest income to average net assets 4.66%*
248.Portfolio turnover rate -
</TABLE>
* ANNUALIZED
(dagger) TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. TOTAL RETURNS WOULD HAVE
BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
(dagger)(dagger) SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS.
SPARTAN CALIFORNIA MUNICIPAL MONEY MARKET PORTFOLIO
PERFORMANCE: THE BOTTOM LINE
To measure a money market fund's performance, you can look at either total
return or yield. Total return reflects the change in a fund's share price
over a given period, reinvestment of its dividends (or income), and the
effect of the fund's $5 account closeout fee. Yield measures the income
paid by a fund. Since a money market fund tries to maintain a $1 share
price, yield is an important measure of performance. Both the fund's
returns and yields would have been lower if Fidelity hadn't reimbursed
certain fund expenses.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED FEBRUARY 28, 1994 PAST 1 LIFE OF
YEAR FUND
Spartan California Municipal Money Market 2.45% 18.04%
Consumer Price Index 2.52% 16.52%
Average California Tax-Free
Money Market Fund 1.96% 15.40%
CUMULATIVE TOTAL RETURNS reflect actual performance over a set period - in
this case, one year or since the fund started on November 27, 1989. For
example, if you invested $1,000 in a fund that had a 5% return over the
past year, you would have $1,050. Comparing the fund's performance to the
consumer price index (CPI) helps show how your investment did compared to
inflation. To measure how the fund stacked up against its peers, you can
compare its return to the average California tax-free money market fund's
total return. This average currently reflects the performance of 42
California tax-free money market funds tracked by IBC/Donoghue. (The
periods covered by the CPI and IBC/Donoghue numbers are the closest
available match to those covered by the fund.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 28, 1994 PAST 1 LIFE OF
YEAR FUND
Spartan California Municipal Money Market 2.45% 3.97%
Consumer Price Index 2.52% 3.66%
Average California Tax-Free
Money Market Fund 1.96% 3.43%
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.
YIELDS
2/28/93 5/31/93 8/31/93 11/30/93 2/28/94
Spartan California 2.16% 2.79% 2.53% 2.37% 2.44%
Municipal Money Market
Average California Tax-Free 1.75% 2.22% 2.01% 1.92% 1.96%
Money Market Fund
Spartan California 3.79% 4.90% 4.44% 4.16% 4.28%
Municipal Money Market -
Tax-equivalent
Average All Taxable 2.71% 2.62% 2.64% 2.69% 2.79%
Money Market Fund
Row: 1, Col: 1, Value: 2.16
Row: 1, Col: 2, Value: 1.75
Row: 2, Col: 1, Value: 2.79
Row: 2, Col: 2, Value: 2.22
Row: 3, Col: 1, Value: 2.53
Row: 3, Col: 2, Value: 2.01
Row: 4, Col: 1, Value: 2.37
Row: 4, Col: 2, Value: 1.92
Row: 5, Col: 1, Value: 2.44
Row: 5, Col: 2, Value: 1.96
Spartan California
Municipal Money
Market
Average California
Tax-Free Money
Market Fund
3% -
2% -
1% -
0%
YIELD refers to the income paid by the fund over a given period. Yields for
money market funds are usually for seven-day periods, expressed as annual
percentage rates. A yield that assumes income earned is reinvested or
compounded is called an effective yield. The chart above shows the fund's
current seven-day yield at quarterly intervals over the past year. You can
compare these yields to the average all tax-free money market fund. Or you
can look at the fund's tax-equivalent yield, which is based on a combined
effective 1994 federal and state income tax rate of 43.04%. The
tax-equivalent figures are useful in seeing how the fund stacked up against
the average taxable money market fund as tracked by IBC/Donoghue.
A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS REFLECT PAST RESULTS RATHER
THAN PREDICT FUTURE PERFORMANCE.
COMPARING
PERFORMANCE
Yields on tax-free investments
are usually lower than yields
on taxable investments.
However, a straight
comparison between the two
may be misleading because it
ignores the way taxes reduce
taxable returns. Tax-equivalent
yield - the yield you'd have to
earn on a similar taxable
investment to match the
tax-free yield - makes the
comparison more meaningful.
Keep in mind that the U.S.
government neither insures nor
guarantees a money market
fund. In fact, there is no
assurance that a money fund
will maintain a $1 share price.
(checkmark)
SPARTAN CALIFORNIA MUNICIPAL MONEY MARKET PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Deborah Watson, Portfolio Manager of Spartan California
Municipal Money Market Portfolio
Q. DEBORAH, HOW HAS THE SHORT-TERM MARKET BEHAVED OVER THE LAST SIX MONTHS?
A. Short-term interest rates remained stable through the fall, despite a
mild uptick in November fueled by inflation fears. The Federal Reserve kept
the federal funds rate at or near 3% from August through January. Then, on
February 4, the Fed pushed the fed funds rate up to 3.25%, essentially
raising all short-term rates.
Q. WAS THE FUND WELL POSITIONED FOR HIGHER RATES?
A. For the most part, yes. I had gradually reduced the fund's average
maturity through the fall and early winter; it fell from 79 days at the end
of August to 48 days at the end of January. The fund's shorter average
maturity will allow me to capture the higher yields available following
February's rate hike. In addition, supply and demand played a role in how I
positioned the fund earlier in the year. California usually issues its
heaviest supply of new obligations during the summer months, and 1993 was
no exception. I lengthened the fund's average maturity through August, and
was able to lock in higher-yielding issues before rates fell further.
Issuance then slowed heading into fall, which, combined with my growing
expectation of higher interest rates, caused me to gradually shorten the
average maturity.
Q. HOW DID CALIFORNIA'S RECESSION AFFECT THE FUND?
A. The state's weak economy caused the financial health of many California
issuers to deteriorate. That meant there were fewer securities available
that met Fidelity's high standards for credit quality. However, I
compensated by buying more of those that did, resulting in little effect on
the fund's yield. Rebuilding efforts after January's earthquake should
boost economic growth in 1994. However, the annual borrowing season for
state and local governments is fast approaching, and their financial
picture hasn't improved. This may further reduce the supply of high quality
issues in California this summer.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on February 28 was 2.44%, up from 2.16% a
year ago. The latest yield translates into a tax equivalent yield of 4.28%
for investors in the 43.04% combined federal and state tax bracket. The
fund's total return - which assumes reinvestment of monthly dividends - for
the 12 months ended February 28 was 2.45%. The average California tax-free
money market fund tracked by IBC/Donoghue returned 1.96% during
the same period.
Q. WHAT'S YOUR VIEW GOING FORWARD?
A. I think short-term interest rates will probably rise gradually over the
next six months, while the Fed continues inching up the fed funds rate to
control inflation. That said, I'll probably keep the fund's average
maturity in a neutral 35- to 50-day range. In addition, I've increased the
fund's stake in variable rate instruments to 59.3% by February 28. The
coupons (stated interest rates) on these securities are reset at fixed
intervals - for example, weekly or monthly - so when rates rise, the fund
can benefit from higher coupons at these reset intervals.
FUND FACTS
GOAL: tax-free income with
share price stability by
investing in high-quality,
short-term California
municipal securities
START DATE: November 27,
1989
SIZE: as of February 28,
1994, over $1 billion
MANAGER: Deborah Watson,
since November 1989;
manager, Fidelity California
Tax-Free Money Market
Portfolio, since July 1988;
Spartan Florida Municipal
Money Market Portfolio, since
August 1992; Spartan
Pennsylvania Municipal Money
Market Portfolio, since
September 1989
(checkmark)
WORDS TO KNOW
COMMERCIAL PAPER: A security
issued by a municipality to
finance capital or operating
needs.
FEDERAL FUNDS RATE: The interest
rate banks charge each other
for overnight loans.
MATURITY: The time remaining
before an issuer is scheduled
to repay the principal amount
on a debt security. When the
fund's average maturity -
weighted by dollar amount -
is short, the fund manager is
anticipating a rise in interest
rates. When the average
maturity is long, the manager
is expecting rates to fall.
When the average maturity is
neutral, the manager wants
the flexibility to respond to
rising rates, while still
capturing a portion of the
higher yields available from
issues with longer maturities.
MUNICIPAL NOTE: A security
issued in advance of future
tax or other revenues and
payable from those specific
sources.
TENDER BOND: A variable-rate,
long-term security that gives
the bond holder the option to
redeem the bond at face
value before maturity.
VARIABLE RATE DEMAND NOTE
(VRDN): A tender bond that
can be redeemed on short
notice, typically one or seven
days. VRDNs are useful in
managing the fund's average
maturity and liquidity.
SPARTAN CALIFORNIA MUNICIPAL MONEY MARKET PORTFOLIO
INVESTMENT CHANGES
MATURITY DIVERSIFICATION
DAYS % OF FUND ASSETS % OF FUND ASSETS % OF FUND ASSETS
2/28/94 8/31/93 2/28/93
0 - 30 66.8 66.8 61.8
31 - 90 12.3 8.0 14.8
91 - 180 20.3 5.8 19.7
181 - 397 0.6 19.4 3.7
WEIGHTED AVERAGE MATURITY
2/28/94 8/31/93 2/28/93
Spartan California Municipal
Money Market 43 days 79 days 49 days
Average California Municipa
l 50 days 72 days 52 days
Money Market Fund*
ASSET ALLOCATION
AS OF 2/28/94 AS OF 8/31/93
Row: 1, Col: 1, Value: 59.3
Row: 1, Col: 2, Value: 15.2
Row: 1, Col: 3, Value: 3.0
Row: 1, Col: 4, Value: 23.7
Row: 1, Col: 5, Value: 2.0
Row: 1, Col: 1, Value: 55.8
Row: 1, Col: 2, Value: 11.4
Row: 1, Col: 3, Value: 4.5
Row: 1, Col: 4, Value: 27.1
Row: 1, Col: 5, Value: 2.2
Variable rate
demand notes
(VRDNs) 59.3%
Commercial
paper 15.2%
Tender bonds 1.7%
Municipal
notes 23.7%
Other 0.1%
Variable rate
demand notes
(VRDNs) 55.8%
Commercial
paper 11.4%
Tender bonds 4.5%
Municipal
notes 27.1%
Other 1.2%
* SOURCE: IBC/DONOGHUE'S MONEY FUND REPORT(Registered trademark)
SPARTAN CALIFORNIA MUNICIPAL MONEY MARKET PORTFOLIO
INVESTMENTS/FEBRUARY 28, 1994
(Showing Percentage of Total Value of Investments)
MUNICIPAL SECURITIES (A) - 100%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CALIFORNIA - 100.0%
Alameda County TRAN 3.25% 7/29/94 $ 15,000,000 $ 15,027,910 010878AB
Anaheim Ctfs. of Prtn. Series 1993, 2.25%, (Liquidity
Enhancement Industrial Bank of Japan), VRDN 5,500,000 5,500,000
032540KQ
Anaheim Hsg. Auth. (Bel Age Apt. Proj.)
Nationwide Grantor Trust Series 1991-1Q, 2.50%,
LOC Federal Home Loan Bank of
San Francisco, VRDN (b)(c) 1,000,000 1,000,000
Anaheim Hsg. Auth. Multi-Family Hsg. Rev.
(Sage Park Proj.) Series A, 2.50%,
LOC Bank of America, VRDN (b) 1,600,000 1,600,000 032557BB
Anaheim Hsg. Auth. Rev. (Park Vista Apts) 2.50%
LOC Citibank, VRDN (b) 7,000,000 7,000,000 032557BH
City of Big Bear Lake Ind. Dev.
(Southwest Gas Corp. Proj.)
Series 1993 A, 2.40%,
LOC Union Bank of Switzerland, VRDN (b) 2,000,000 2,000,000 08901KAR
California Dept. of Wtr. Resources Tender Opt. Ctfs.:
(Central Valley Proj.) Series R-3, 2.50%
(Liquidity Enhancement Svenska
Handelsbanken), VRDN (c) 23,000,000 23,000,000 130663V8
Series R-4, 2.50% (Liquidity Enhancement Svenska
Handelsbanken), VRDN (c) 6,000,000 6,000,000 130663W3
California Gen. Oblig. Adj. Rate RAN 2.55%
6/28/94 30,500,000 30,500,000 130619D5
California Gen. Oblig. RAN, 3.5% 6/28/94 26,250,000 26,300,597 130619D4
California Hsg. Fin. Agcy. Home Mtg. Rev. Tender Option
Ctfs. Series 19B, 2.60%, (Liquidity Enhancement
Banque Nationale De Paris), VRDN (b)(c) 15,200,000 15,200,000 13033CC8
California Hsg. Fin. Agcy. Custodial Receipts, Series 15,
2.60%, (Liquidity Enhancement Daichi
Kango Bank), VRDN (b)(c) 11,590,000 11,590,000 13033CWJ
California Hsg. & Fing. Auth. Rev. (Camino Colony Apts.)
Series 1993 B, 2.50%, LOC Federal Home Loan
Bank of San Francisco, VRDN 3,600,000 3,600,000 13033CP8
California Poll. Cont. & Fing Auth. 1st Mtg. Rev. Bonds,
(Southern California Edison Co.) Series 1985 C,
2.40% 4/6/94, CP mode 4,300,000 4,300,000 130995GB
California Poll. Cont. Fing. Auth. Resource Recovery Rev.:
(Delano Proj.), LOC Algemene Bank, VRDN (b):
Series 1989, 2.30%, 3,500,000 3,500,000 130535AZ
Series 1990, 2.30% 1,000,000 1,000,000 130535BB
Series 1991, 2.30% 4,100,000 4,100,000 130535BE
(Malaga Proj.) Series A, 2.35%,
LOC Bank of America, VRDN (b) 3,400,000 3,400,000 130535AP
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
California Poll. Cont. Fing. Auth. Resource Recovery Rev. - continued:
(Ultra Pwr. Rocklin Proj.) Series 1988 B, 2.50%,
LOC Bank of America, VRDN (b) $ 900,000 $ 900,000 130535AN
California Poll. Contr. & Fing Auth. Rev.
(Pacific Gas & Elec. Co.):
Rfdg. Series 1988 B,
LOC Sumitomo Bank of Japan Ltd.,CP mode (b):
2.50% 3/22/94 2,600,000 2,600,000 130995GJ
2.55% 4/25/94 4,500,000 4,500,000 130995GJ
2.60% 5/16/94 4,400,000 4,400,000 130995GJ
2.60% 5/20/94 3,000,000 3,000,000 130995GQ
Series 1988 A, LOC Swiss Bank Corp., CP mode (b):
2.40% 4/13/94 3,000,000 3,000,000 130995FW
2.45% 4/21/94 8,500,000 8,500,000 130995GC
2.45% 4/22/94 8,500,000 8,500,000 130995GD
2.60% 5/12/94 3,000,000 3,000,000 130995GL
2.60% 5/13/94 6,500,000 6,500,000 130995GK
2.60% 5/19/94 3,000,000 3,000,000 130995GP
2.70% 5/24/94 10,000,000 10,000,000 130995GS
2.70% 5/25/94 12,000,000 12,000,000 130995GR
Series 1988 C, 2.30% 4/11/94 LOC Credit Suisse, CP mode 3,600,000
3,600,000 130995FU
Series 1988 D, LOC Bank of Tokyo, CP mode:
2.35% 3/23/94 2,655,000 2,655,000 130995FX
2.35% 4/8/94 9,500,000 9,500,000 130995FV
Series 1988 E, 2.50% 5/16/94,
LOC Morgan Guaranty Trust Co., CP mode 2,000,000 2,000,000 130995GM
(Southern California Edison Co.) 130995GG
Series 1985 D, 2.50% 4/18/94, CP mode 3,000,000 3,000,000 130995GG
California Poll. Cont. Fing. Auth. Solid Waste Disp. Rev.
(Colmac Energy Proj.) LOC Swiss Bank, VRDN:
Series A, 2.40% 4,000,000 4,000,000 130536BA
Series B, 2.40% 5,000,000 5,000,000 130536BB
California Statewide Commty. Dev. Corp. Ind. Dev. Rev., VRDN:
(AHNNN Proj.) 2.45%, LOC Bank of Tokyo 440,000 440,000 130905AM
(American Zettler, Inc. Proj.) 2.45%,
LOC Bank of Tokyo 2,500,000 2,500,000 130905AC
(Bro-Co Gen. Partnership Proj.) Series 1990, 2.45%,
LOC Union Bank 4,520,000 4,520,000 130905BL
(Charles & Loralie Harris Proj.) 2.45%,
LOC Bank of Tokyo 1,070,000 1,070,000 130905AK
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
California Statewide Commty. Dev. Corp. Ind. Dev. Rev., VRDN: - continued
(Covenant Retirement Commty.) 2.45%,
LOC Lasalle Nat'l Bank $ 4,800,000 $ 4,800,000 130907CX
(Florestone Prod. Co.) Series 1989, 2.45%,
LOC Bank of Tokyo (b) 490,000 490,000 130905AF
(Grundfos Pumps Corp. Proj.)
Series 1989, 2.45%, LOC Bank of Tokyo 5,700,000 5,700,000 130905AG
(K.U.M. LTD Proj.) Series 1992, 2.45%,
LOC Union Bank (b) 2,000,000 2,000,000 130905CA
(Merrill Packaging Proj.) 2.65%
LOC Bank of Tokyo(b) 2,095,000 2,095,000 130905CC
(Northwest Pipe & Casing Co. Proj.) Series 1990,
2.45%, LOC Bank of Tokyo 4,250,000 4,250,000 130905BA
(Rapelli of California Inc. Proj.) Series 1989, 2.45%,
LOC Bank of Tokyo 2,500,000 2,500,000 130905AX
(Santa Cruz-Wilson Entities Ltd. Proj.) 2.70%
LOC Bank of Tokyo, VRDN (b) 1,485,000 1,485,000 80174PAA
(Sierra Spring Wtr. Co.) LOC Bank of Tokyo, VRDN:
(Manteca Proj.) Series 1989, 2.45%, VRDN 695,000 695,000 130905AV
(Richmond Proj.) 2.45% 1,040,000 1,040,000 130905AU
(Sacramento Proj.) Series 1989, 2.45% 1,435,000 1,435,000 130905AP
(Staub Metals) 2.45%,
LOC Bank of Tokyo 440,000 440,000 130905AT
(Sunclipse, Inc., Alhambra Proj.) Series 1989, 2.45%,
LOC Bank of Tokyo, VRDN 2,600,000 2,600,000 130905AN
(Sunclipse, Inc., Union City Proj.) Series 1989, 2.45%,
LOC Bank of Tokyo, VRDN 2,500,000 2,500,000 130905AQ
(Upholstery Supply Proj.) Series 1990, 2.45%,
LOC Bank of Tokyo 700,000 700,000 130905BC
(Zarn Inc. Proj.) Series 1989, 2.45%,
LOC Bank of Tokyo, VRDN (b) 1,950,000 1,950,000 130905AJ
(Zieman Manufacturing Co. Proj.) Series 1990, 2.45%,
LOC Bank of Tokyo, VRDN 595,000 595,000 130905BB
California Various Purpose Gen. Oblig. Custodial Receipts,
2.45%, (AMBAC Insured),(Liquidity
Enhancement Citibank), CP mode(c) 7,925,000 7,925,000 130622WG
Chula Vista Ind. Dev. Rev.:
(San Diego Gas & Elec. Co.):
Series B, 2.45%, VRDN (b) 3,700,000 3,700,000 17131HAB
Series D, 2.30% 3/1/94, CP mode (b) 2,000,000 2,000,000 177199BA
Series E:
2.65% 3/10/94, CP mode (b) 2,500,000 2,500,000 17199BAS
2.70% 3/11/94, CP mode(b) 3,000,000 3,000,000 17199BAT
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Concord Hsg. Auth. (Crossroads Apt. Proj.) First Nationwide
Grantor Trust Series 1991-1E, 2.50%, LOC Federal
Home Loan Bank of San Francisco, VRDN (c) $ 1,100,000 $ 1,100,000
206131AA
Concord Multi-Family Hsg. Rev. (Hill Apt. Proj.) 2.50%,
LOC Citibank, VRDN(b) 9,050,000 9,050,000 206131AA
Contra Costa Multi Family Hsg. Rev.
(Park Regency) Series A, 2.45,
LOC Sumitomo Bank,VRDN (b) 6,300,000 6,300,000 212249AB
Contra Costa County TRAN Series A, 3.25% 7/29/94 12,930,000 12,951,609
212219BV
Contra Costa Transit Auth. Tax Rev. Series 1993 A,
2.40%, (FGIC Insured), VRDN 9,000,000 9,000,000 21221MBJ
Del Mar Race Track Auth. 2.60% 5/26/94
LOC Societe Generale, CP 5,500,000 5,500,000 2451259A
Duarte Single-Family Mtg. Rev. Trust Ctfs. 2.70%,
(Liquidity Enhancement Norwest Bank), VRDN (c) 5,355,000 5,355,000
263595AY
Emeryville Redev. Agcy. Multi-Family Hsg.
(Emerybay Apts. II) 2.65%,
LOC Security Pacific Nat'l. Bank, VRDN(b) 8,000,000 8,000,000 291200AA
Escondido Commty. Dev. Commission Rev.
(Promenade Proj.) 2.65%,
LOC Bank of America, VRDN (b) 1,000,000 1,000,000 296338AA
Fairfield Ind. Dev. Auth., 3.05%,
LOC Wells Fargo Bank, VRDN (b) 1,800,000 1,800,000 303900AD
Fontana (Oakcrest Apt. Proj.) First Nationwide Grantor Trust
Series 1991-1G, 2.50%, LOC Federal Home Loan Bank
of San Francisco, VRDN (c) 4,200,000 4,200,000 303900AD
Fresno County Unified School Dist. TRAN 3.50% 8/11/94 14,500,000
14,528,245 358232AD
Fresno City Hsg. Rev. (Palm Lakes Apt. Proj.)
Series 1985, 3.75%, LOC Tokai Bank, VRDN 2,000,000 2,000,000 35823HAA
Fresno TRAN 3% 6/30/94 4,080,000 4,081,865 358082FQ
Garden Grove Hsg. Auth. Multi-Family Hsg. Rev.
(Valley View Sr. Villas Proj.) Series 1990 A, 2.95%,
LOC Wells Fargo Bank, VRDN (b) 5,200,000 5,200,000 365265AB
Huntington Beach Multi-Family Hsg. Rev.:
(Five Point Seniors Proj.) Series 1991 A, 2.95%,
LOC Wells Fargo Bank, VRDN (b) 6,400,000 6,400,000 446196AQ
(Seabridge Villas Proj.) Series 1985 A, 2.25%,
LOC Bank of America, VRDN 2,700,000 2,700,000 446196AA
Kern County Ctfs. of Prtn., Series 1986 A, 2.35% ,
LOC Sanwa Bank Ltd., VRDN 1,700,000 1,700,000 49225HAA
Kern County TRAN 3.25% 7/5/94 5,000,000 5,009,242 492248AA
Livermore Ctfs. of Prtn. (Wtr. Reclamation Plant Expansion
Proj.), 2.40%, LOC Westminister Nat'l. Bank, VRDN 3,300,000 3,300,000
538164CQ
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Livermore Multi-Family Mtg. Rev. (Portola Meadows Apts.)
Series 1989 A, 2.50%,
LOC Bank of America, VRDN (b) $ 10,400,000 $ 10,400,000 537900AB
Livermore (Park Paseo Apt. Proj) First Nationwide Grantor
Trust Series 1991-1A, 2.50%,
LOC Federal Home Loan
Bank of San Francisco, VRDN (c) 2,000,000 2,000,000 537900AB
Loma Linda Multi-Family Hsg. Rev.
(Loma Linda Springs Apts.) Series 1989, 3.60%,
LOC Tokai Bank, VRDN (b) 12,205,000 12,205,000 541905AB
Los Angeles Commty. College Dist. TRAN
Series 1993-94, 3.25% 7/6/94 12,500,000 12,523,289 54438CAA
Los Angles Ctfs. of Prtn. (Baldwin Hills Public
Parking Facs.) Series 1984, 2.55%,
LOC Wells Fargo Bank, VRDN 3,700,000 3,700,000 544391AU
Los Angeles Commty. Redev. Agcy. Multi-family Hsg.
Rev. (Grand Promenade Proj.) Series 1985, 3%,
LOC Tokai Bank Ltd., VRDN 1,000,000 1,000,000 544393AD
Los Angeles Commty. Redev. Agcy. Rev. Ctfs. of Prtn.:
(CMC Med. Plaza) 2.60%, LOC Security Pacific
Nat'l. Bank, VRDN 4,700,000 4,700,000 544391BQ
Los Angeles County Hsg. Auth.(Sand Canyon)
Series 1985F, 2.35%,
LOC Citibank, VRDN 1,000,000 1,000,000
Los Angeles County Hsg. Auth. Multi-Family Hsg. Rev.:
(Malibu Meadows Proj.) Series 1991 A, 2.60%,
LOC Sumitomo Bank Ltd., VRDN 4,811,000 4,811,000 544688GD
(Park Sierra Apt.) 2.50%, LOC Citibank, VRDN (b) 39,200,000 39,200,000
544688FQ
(Sand Canyon Villas Proj.) Series 1989 A, 2.60%,
LOC Ind. Bank of Japan, VRDN (b) 8,700,000 8,700,000 544688GC
Los Angeles County Ind. Dev. Auth. Rev.
(Caitac & Jae Proj.), 2.45%, LOC Union Bank, VRDN (b) 4,200,000
4,200,000 544689CX
Los Angeles County Metropolitan Trans. Auth.
Series 1993 A, 2.30%, (Liquidity Enhancement
Industrial Bank of Japan) VRDN 2,800,000 2,800,000 544712AV
Los Angeles County Pub. Wks. Floating Rate Trust
Ctfs., Series 8, 2.55%, (Liquidity Enhancement
Credit Suisse), VRDN (c) 11,542,749 11,542,749 31303KAA
Los Angeles County TRAN, Series B 93-94,
(Liquidity Enhancement Credit Suisse), CP mode:
2.50% 4/05/94 10,000,000 10,000,000 5446579M
2.50% 4/07/94 3,000,000 3,000,000 5446579L
Los Angeles County Transit Commty., Custodial Receipts,
Series 1992B-36, 2.65%, (MBIA Insured), VRDN (c) 3,000,000 3,000,000
545170JP
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Los Angeles County Unified School Dist. TRAN
3.25% 7/15/94 $ 15,000,000 $ 15,026,067 544644AE
Los Angeles Dept. of Wtr. & Pwr. Elec. Plant Rev.
Tender Option Ctfs. 2.40%,
(Liquidity Enhancement Banker's Trust), VRDN (c) 6,430,000 6,430,000
544506JM
Los Angeles Dept. of Wtr. & Pwr. Elec. Plant
Rev. Tender Option Ctfs.
Series M, 2.70%, (Liquidity Enhancement
Sanwa Bank Ltd.), VRDN (c) 10,000,000 10,000,000 544507KC
Los Angeles Multi-Family Hsg. Rev., VRDN:
(Beverly Park Apts.) Series 1988 A, 2.40%,
LOC Barclay's Bank (b) 9,500,000 9,500,000 544582GV
(Channel Gateway Apts.) Series 1989 B, 2.65%,
LOC Fuji Bank (b) 47,700,000 47,700,000 544582GX
(Poinsettia Apts. Proj.) Series 1989 A, 2.55%,
LOC Dai-Ichi Kangyo Bank(b) 1,000,000 1,000,000 544582GW
(Studio Colony Proj.) Series 1985 C, 2.45%,
LOC Industrial Bank of Japan 3,000,000 3,000,000 544582CC
Los Angeles Variable Rate Multi-family Hsg. Rev.
(Museum Terrace Apt. Proj.) Series H, 2.40%,
LOC Bank of America, VRDN 4,500,000 4,500,000 544582AP
Los Angeles WasteWtr. Sys. Rev. (Liquidity Enhancement
Sumitomo Bank Ltd), CP:
2.40% 3/17/94 2,500,000 2,500,000 544999AM
2.60% 5/18/94 2,000,000 2,000,000 544999AP
Madera County TRAN 3.25% 9/30/94 3,000,000 3,006,305 556903AN
Marin County Hsg. Auth. Rev. (Crest Marin II Apt. Proj.)
2.50%, LOC Citibank, VRDN (b) 14,850,000 14,850,000 56785MAA
Metropolitan Wtr. Dist. of Southern California Rev.:
2.60% 3/16/94, CP 5,900,000 5,900,000 5926599K
2.55% 5/23/94, CP 3,000,000 3,000,000 5926599L
Metropolitan Wtr. Dist. of Southern California Wtrwks.
Tender Option Bonds Series MGT-19A, 2.40%,
(Liquidity Enhancement Morgan Guaranty), VRDN (c) 2,400,000 2,400,000
592659VY
Newark Ind. Dev. Auth. Rev. (Gas Tech Proj.)
Series 1989 A, 2.45%, LOC Union Bank of
Switzerland, VRDN (b) 3,000,000 3,000,000 650250AA
Oceanside Multi-Family Mtg. Rev. (Riverview Springs Apts.)
Series 1990 A, 2.60%, LOC Bank of Tokyo,
VRDN ( b) 6,700,000 6,700,000 675370AB
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Olcese Wtr. Dist. (Rio Bravo Wtr. Delivery Sys. Proj.)
Series 1986 A, 2.40% 3/29/94,
LOC Sumitomo Bank, Ltd., CP mode (b) $ 5,000,000 $ 5,000,000 6794749P
Ontario Ind. Dev. Auth. Rev. (Safari Land Proj.)
Series 1989, 3.25%, LOC Tokai Bank, VRDN (b) 3,500,000 3,500,000
682908AA
Orange County Apt. Dev. Rev., VRDN:
(Bear Brands Apt.) Issue Z 1985, 2.35%,
LOC Fuji Bank 4,700,000 4,700,000
(Foothill Oaks Apts. Proj.) Issue 1989 B, 2.50%,
LOC Bank of America (b) 12,175,000 12,175,000 684209CW
(Frost Construction) Series 1985 B, 2.35%,
LOC Wells Fargo Bank, VRDN 2,000,000 2,000,000 684209JQ
(Hon Dev. Corp.-Niguel Summit II) Issue 1985,
Series B, 2.50%, LOC Bank of America, VRDN 1,000,000 1,000,000
684209JN
(Laguna Summit Apts.) Series 1985 X, 3%,
LOC Tokai Bank, VRDN 3,000,000 3,000,000 684209JW
(Park Place Apts. Proj.) Series 1989 A, 3.40%,
LOC Tokai Bank, VRDN (b) 14,300,000 14,300,000 684209JL
(Trabuco Woods Apts.) Series 1993 B, 2.40%,
LOC Wells Fargo Bank, VRDN 2,670,000 2,670,000 684209JV
(Villa Marguerite Apts.) Series 1993 A, 2.40%,
LOC Wells Fargo Bank, VRDN 1,635,000 1,635,000 684209KE
(Vista Verde Apt. Proj.) Series 1988 A, 3.30%,
LOC Wells Fargo Bank, VRDN (b) 12,050,000 12,050,000 684209JU
(WLCO Partners) Series 1985 C-1, 3.20%,
LOC Tokai Bank Ltd., VRDN 900,000 900,000 684209CT
(Wood Canyon Villas) Issue 1991 B, 2.65%
LOC Bank of America, VRDN (b) 5,000,000 5,000,000 684209KA
Orange County Hsg. Auth. Apt. Dev. Rev.
(Costa Mesa Partners) Series 1985-BB, 3.25%,
LOC Tokai Bank, VRDN 9,500,000 9,500,000 684262AF
Orange County TRAN 3% 6/30/94 4,500,000 4,504,570 684201EF
Orange Unified School Dist. TRAN 3.25% 7/26/94 10,000,000 10,015,629
684133KA
Pleasant Hill (Quail Run Apt. Proj.) Fist Nationwide Grantor
Trust Series 1991-1A, 2.50%, LOC Federal Home Loan
Bank of San Francisco, VRDN (c) 3,200,000 3,200,000 684133KA
Rancho Wtr. Dist. Fin. Auth. Rev. Rfdg. Floating Option
Tax-Exempt Receipts, Series PA-62, 2.55%,
(Liquidity Enhancement
Merrill Lynch & Co. Inc.) VRDN (c) 5,120,000 5,120,000 752111DD
Riverside County Ind. Dev. Auth.
(Golden West Homes Proj.) 3.10%,
LOC Wells Fargo Bank, VRDN (b) 2,700,000 2,700,000 76911TAU
Sacramento County TRAN, 3% 7/29/94 7,000,000 7,007,759 786106DM
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Sacramento Muni. Util. Dist. Series H,
LOC Bank of America, CP:
2.30% 3/23/94 $ 5,843,000 $ 5,843,000 785995MM
2.55% 5/11/94 7,400,000 7,400,000 785995MP
Sacramento (Smoketree Apt. Proj.) First Nationwide Grantor
Trust Series 1991-1K, 2.50% LOC Federal Home Loan
Bank of San Francisco, VRDN (c) 1,000,000 1,000,000 796900CF
San Bernadino County Ind. Dev. Auth. Rev,
LOC Bank of Tokyo, VRDN (b):
(McCain Citrus Inc. Proj.) 2.45% 900,000 900,000 796901AL
(McElroy Metal Mill Proj.) 2.45%, 900,000 900,000 796901AM
(NRI, Inc. Proj.) Series 1989, 2.45% 1,490,000 1,490,000 796901AN
San Bernadino County Mtg. Rev. Rfdg.
(Pepperwood Apts.) Series 1993 A, 2.40%,
LOC Fed Home Loan Bank of San Francisco, VRDN 3,000,000 3,000,000
796900CL
San Bernadino County Multi Family Hsg. Rev., VRDN:
(Cedarbrook Terrace Apts. Proj.) Series 1990 A, 3.60%,
LOC Sumitrust 3,200,000 3,200,000 796900CF
(Western Properties II) 2.40%,
LOC Bank of America 1,000,000 1,000,000 796900BJ
(Western Properties IV) 2.40%,
LOC Bank of America 1,000,000 1,000,000 796900BM
(Woodview Apts.) 2.40%, LOC Bank of America 1,400,000 1,400,000
796900BK
San Diego Commty. College Dist. TRAN Series 1993,
3.15% 6/30/94 3,000,000 3,004,350 797272AA
San Diego Hsg. Auth. Multi-Family Hsg. Rev., VRDN:
Rfdg. (Coral Pointe Apt. Proj.) Series 1993 A, 2.65%,
(Liquidity Enhancement Continental Casualty Company) 5,000,000
5,000,000 79729HEQ
(La Cima Apts.) Issue 1985 K, 2.95%,
LOC Daiwa Bank, Ltd., VRDN 3,000,000 3,000,000 79728FES
(Lusk Mira Mesa Apts.) Series 1985 E, 2.40%,
LOC Bank of America, VRDN 2,200,000 2,200,000 79729HAA
San Diego Hsg. Auth. Rev. (Carmel Del Mar Apr. Proj.)
Series 1993-E, 2.55%, LOC Citibank, VRDN 5,608,000 5,608,000 79728FEU
San Diego Regional Trans. Comm. Bonds Series 1993 A,
2.60% 4/1/94, (FGIC Insured) 900,000 900,000 797400BR
San Diego TAN Series 1993-94 A, 3% 6/30/94 7,700,000 7,703,237 797236SM
San Diego Unified School Dist. TRAN
Series 1993-94 A, 3.50% 8/10/94 10,000,000 10,030,134 797355HH
San Francisco City and County Multi-Family Hsg. Rev. Bond
(Winterland Proj.) 2.35%, LOC Citibank, VRDN 3,400,000 3,400,000
79765PCH
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
San Francisco City And County Redev. Agcy. Multi-Family
Hsg. Agcy.Rev. Rfdg. (Fillmore Center B-1) 2.30%,
LOC Bank of Nova Scotia, VRDN $ 1,000,000 $ 1,000,000 79771MAU
San Francisco Redev. Agcy. Rev.
(St. Francis Place Proj.) Series 1989 A, 3.25%,
LOC Mitsubishi Trust & Banking, VRDN 14,300,000 14,300,000 79771MAM
San Jose Multi-Family Hsg. Rev. Bonds (Kimberly Woods)
Series 1984, 2.40%, LOC Bank of America, VRDN 4,700,000 4,700,000
798165AB
San Jose Multi-Family Mtg. Rev. (Somerset Park Apts.)
Series 1987 A, 2.50%, LOC Bank of America, VRDN 3,100,000 3,100,000
798163DZ
San Jose Redev. Agcy. Puttable Floating Option Tax-Exempt
Receipts Series PA-42, 2.55%, (Liquidity Enhancement
Merrill Lynch & Co. Inc.), VRDN (c) 5,080,000 5,080,000 798147MC
San Mateo County TRAN Series 1993-94, 3% 6/30/94 20,000,000 20,032,311
799034AB
Santa Anna Ind. Dev. Auth. Rev. (McFadden Properties Proj.)
2.55%, LOC Bank of America, VRDN 1,300,000 1,300,000 801130AA
Santa Clara County TRAN Series 1993-94,
3.25% 7/29/94 25,600,000 25,648,037 801546LF
Santa Cruz County TRAN Series 1993-94, 3.25% 8/1/94 7,500,000 7,508,209
801818CQ
Simi Valley Multi-Family Hsg. Rev. (Shadowridge Apts.)
Series 1989, 2.50%, LOC Citibank, VRDN 21,200,000 21,200,000 828905BX
Solano County TRAN 3.25% 11/01/94 3,000,000 3,007,492 834127BH
Sonoma County TRAN Series 1993-94, 3.50 8/2/94 11,000,000 11,022,192
835546BU
Southern California Pub. Pwr. Auth. Rev.
(Tran Mission Proj.) Series 1991, 2.50%,
LOC Swiss Bank, (AMBAC Insured), VRDN 7,500,000 7,500,000 842477HH
Stockton Hosp. Rev. (St. Joseph's Hosp.) Series 1985 A,
2.45%, LOC Dai-Ichi Kangyo Bank, VRDN 17,500,000 17,500,000 861344AY
Torrance Hospital Rev. (Little Co. Of Mary Hosp.-Torrance
Memorial Med. Ctr.) Series1992, 2.45%,
LOC Fuji Bank, VRDN 7,800,000 7,800,000 891368BX
Tustin, Orange County Assessment Dist. #85-1 Impt. Rev.
LOC Mitsubishi Trust, CP mode:
3.30% 3/3/94 6,694,000 6,694,000 901991MU
3.30% 3/4/94 2,409,000 2,409,000 901991MV
Upland Commty. Redev. Agcy. Multi-Family Hsg.
(Northwoods) 1989 B, 2.50%, LOC Sanwa Bank, VRDN 1,300,000 1,300,000
915354AB
Vacaville Hsg. Auth. (Quail Run Apt. Proj.) First Nationwide
Grantors Trust Series 1991-1B, 2.50%,
LOC Federal Home Loan Bank of
San Francisco, VRDN (c) 1,000,000 1,000,000 915354AB
Ventura County TRAN 3% 8/1/94 3,000,000 3,001,617 923035AG
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Washington Township Hosp. Dist., Series 1985 A, 2.45%,
LOC Bank of Tokyo, VRDN $ 2,700,000 $ 2,700,000 940212AR
Woodland (Crossroads Village Apt. Proj.) First Nationwide
Grantor Trust Series 1991-1H, 2.50%,
LOC Federal Home Loan Bank of
San Francisco, VRDN 1,900,000 1,900,000 940212AR
TOTAL INVESTMENTS - 100% $ 1,059,333,415
Total Cost for Income Tax Purposes $ 1,059,334,599
SECURITY TYPE ABBREVIATIONS
BAN - Bond Anticipation Notes
CP - Commercial Paper
FRDN - Floating Rate Demand Notes
MT - Mandatory Tender
OT - Optional Tender
RAN - Revenue Anticipation Notes
TAN - Tax Anticipation Notes
TRAN - Tax & Revenue Anticipation Notes
VAN - Variable Rate Tax & Revenue
Anticipation Notes
VRDN - Variable Rate Demand Notes
LEGEND
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(b) Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals (AMT securities).
(c) Provides evidence of ownership in one or more underlying municipal
bonds.
INCOME TAX INFORMATION
At February 28, 1994, the fund had a capital loss carryforward of
approximately $29,000 which will expire on February 28, 2001.
SPARTAN CALIFORNIA MUNICIPAL MONEY MARKET PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
FEBRUARY 28, 1994
249.ASSETS 250. 251.
252.Investment in securities, at value (Note 1) - See 253. $ 1,059,333,415
accompanying schedule
254.Cash 255. 45,771
256.Interest receivable 257. 7,093,997
258. 259.TOTAL ASSETS 260. 1,066,473,183
261.LIABILITIES 262. 263.
264.Payable for investments purchased $ 1,001,908 265.
266.Share transactions in process 655,110 267.
268.Dividends payable 54,873 269.
270.Accrued management fee 158,071 271.
272. 273.TOTAL LIABILITIES 274. 1,869,962
275.276.NET ASSETS 277. $ 1,064,603,221
278.Net Assets consist of (Note 1): 279. 280.
281.Paid in capital 282. $ 1,064,637,582
283.Accumulated net realized gain (loss) on 284. (34,361)
investments
285.286.NET ASSETS, for 1,064,637,555 shares 287. $ 1,064,603,221
outstanding
288.289.NET ASSET VALUE, offering price and 290. $1.00
redemption price per share ($1,064,603,221 (divided by)
1,064,637,555 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED FEBRUARY 28, 1994
291.292.INTEREST INCOME 293. $ 24,829,747
294.EXPENSES 295. 296.
297.Management fee (Note 4) $ 4,714,027 298.
299.Non-interested trustees' compensation 5,983 300.
301. Total expenses before reductions 4,720,010 302.
303. Expense reductions (Note 5) (2,767,561) 1,952,449
304.305.NET INTEREST INCOME 306. 22,877,298
307.308.NET REALIZED GAIN (LOSS) ON INVESTMENTS 309. 30,247
(NOTE 1)
310.311.NET INCREASE IN NET ASSETS RESULTING FROM 312. $ 22,907,545
OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR TEN MONTHS
ENDED ENDED
FEBRUARY 28, 1994 FEBRUARY 28, 1993
(NOTE 1)
313.INCREASE (DECREASE) IN NET ASSETS
314.Operations $ 22,877,298 $ 19,896,544
Net interest income
315. Net realized gain (loss) on investments 30,247 (48,709)
316. 22,907,545 19,847,835
317.NET INCREASE (DECREASE) IN NET ASSETS
RESULTING
FROM OPERATIONS
318.Dividends to shareholders from net interest income (22,877,298) (19,896,544)
319.Share transactions at net asset value of $1.00 per 1,234,266,731 668,146,371
share
Proceeds from sales of shares
320. Reinvestment of dividends from net interest 22,035,126 19,176,422
income
321. Cost of shares redeemed (1,047,318,874) (749,324,432)
322. 208,982,983 (62,001,639)
Net increase (decrease) in net assets and shares
resulting from share transactions
323. 209,013,230 (62,050,348)
324.TOTAL INCREASE (DECREASE) IN NET ASSETS
325.NET ASSETS 326. 327.
328. Beginning of period 855,589,991 917,640,339
329. End of period $ 1,064,603,221 $ 855,589,991
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
330. YEAR TEN MONTHS YEARS ENDED APRIL 30, NOVEMBER 27,
ENDED ENDED 1989
FEBRUARY 28, FEBRUARY 28, 199 (COMMENCEMEN
3 T
OF OPERATIONS) TO
APRIL 30,
331. 1994 (NOTE 1) 1992 1991 1990
332.SELECTED PER-SHARE DATA
333.Net asset $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
value,
beginning of
period
334.Income .024 .022 .041 .054 .025
from
Investment
Operations
Net interest
income
335.Less (.024) (.022) (.041) (.054) (.025)
Distributions
From net
interest
income
336.Net asset $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
value, end of
period
337.TOTAL 2.24% 4.15 5.52 2.54%
RETURN(dagger) 2.45 % %
%
338.RATIOS AND SUPPLEMENTAL DATA
339.Net $ 1,064,603 $ 855,590 $ 917,640 $ 763,959 $ 396,652
assets, end of
period (000
omitted)
340.Ratio of .21 .10 .07 -
expenses to % % %
average net
assets(dagger)(dagger) .30%*
341.Ratio of .50 .50%* .50 .50 .50%*
expenses to % % %
average net
assets before
expense
reductions(dagger)(dagger)
342.Ratio of net 2.42 2.67%* 4.05 5.33 5.99%*
interest incom % % %
e
to average
net assets
</TABLE>
* ANNUALIZED
(dagger) TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. TOTAL RETURNS WOULD HAVE
BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
(dagger)(dagger) SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS.
NOTES TO FINANCIAL STATEMENTS
For the period ended February 28, 1994
1. SIGNIFICANT ACCOUNTING
POLICIES.
Spartan California Municipal High Yield Portfolio, Spartan California
Intermediate Municipal Portfolio and Spartan California Municipal Money
Market Portfolio (the funds) are funds of Fidelity California Municipal
Trust (the trust). 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 (see Note 6). On
November 19, 1992, the Trustees approved a change in the fiscal year-end of
the trust to February 28. Each fund is authorized to issue an unlimited
number of shares. The following summarizes the significant accounting
policies of the funds:
SECURITY VALUATION.
HIGH YIELD AND INTERMEDIATE FUNDS. Securities are valued based upon a
computerized matrix system and/or appraisals by a pricing service, both of
which consider market transactions and dealer-supplied valuations.
Short-term securities maturing within sixty days are valued either at
amortized cost or original cost plus accrued interest, both of which
approximate current value. Securities for which quotations are not readily
available through the pricing service are valued at their fair value as
determined in good faith under consistently applied procedures under the
general supervision of the Board of Trustees.
MONEY MARKET FUND. As permitted under Rule 2a-7 of the 1940 Act, and
certain conditions therein, securities are valued initially at cost and
thereafter assume a constant amortization to maturity of any discount or
premium.
INCOME TAXES. The intermediate fund intends to qualify as a regulated
investment company under Subchapter M of the Internal Revenue Code. The
high yield and money market funds are each qualified as a regulated
investment company under Subchapter M of the Internal Revenue Code. By so
qualifying, each fund is not subject to income taxes to the extent that it
distributes all of its taxable income for the fiscal year. The schedules of
investments include information regarding income taxes under the caption
"Income Tax Information."
INTEREST INCOME. Interest income, which includes amortization of premium
and accretion of original issue discount, is accrued as earned. For the
money market fund, accretion of market discount represents unrealized gain
until realized at the time of a security disposition or maturity.
EXPENSES. Most expenses of each 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. Dividends are declared daily and paid
monthly from net interest income. Distributions to shareholders from
realized capital gains on investments, if any, are recorded on the
ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
treatments for futures and options transactions, excise tax regulations and
losses deferred due to wash sales.
REDEMPTION FEES. Shares held in the high yield fund less than 180 days are
subject to a redemption fee equal to .50% of the proceeds of the redeemed
shares. The fee, which is retained by the fund is accounted for as an
addition to paid in capital.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
CHANGE IN ACCOUNTING FOR DISTRIBUTIONS TO SHAREHOLDERS. Effective February
1, 1993, the money market and high yield funds adopted Statement of
Position 93-2: Determination, Disclosure, and Financial Statement
Presentation of Income, Capital Gain, and Return of Capital Distributions
by Investment Companies. As a result, the funds changed the classification
of distributions to shareholders to better disclose the differences between
financial statement amounts and distributions determined in accordance with
income tax regulations. Accordingly, amounts as of February 28, 1993 have
been restated to reflect an increase in paid in capital and a decrease in
accumulated net realized gain of $45,643 for the high yield fund. No
adjustments were necessary for the
money market fund.
2. OPERATING POLICIES.
DELAYED DELIVERY TRANSACTIONS. Each fund may purchase or sell securities on
a when-issued or forward commitment basis. Payment and delivery may take
place a month or more after the date of the transaction. The price of the
underlying securities and the date when the securities will be delivered
and paid for are fixed at the time the transaction is negotiated.
FUTURES CONTRACTS AND OPTIONS. The high yield and intermediate funds may
invest in futures contracts and write options. These investments involve to
varying degrees, elements of market risk and risks in excess of the amount
recognized in their Statements of Assets and Liabilities. The face or
contract amounts reflect the extent of the involvement the high yield and
intermediate funds have in the particular classes of instruments. Risks may
be caused by an imperfect correlation between movements in the price of the
instruments and the price of the underlying securities and interest rates.
Risks also may arise if there is an illiquid secondary market for the
instruments, or due to the inability of counterparties to perform.
Futures contracts are valued at the settlement price established each day
by the board of trade or exchange on which they are traded. Options traded
on an exchange are valued using the last sale price or, in the absence of a
sale, the last offering price. Options traded over-the-counter are valued
using dealer-supplied valuations.
3. PURCHASES AND SALES OF
INVESTMENTS.
HIGH YIELD FUND. Purchases and sales of securities, other than short-term
securities, aggregated $315,008,869 and $283,241,767, respectively. The
gross market value of futures contracts opened and closed amounted to
$237,948,678 and $258,547,360,
respectively.
INTERMEDIATE FUND. Purchases of securities, other than short-term
securities, aggregated $17,416,283; there were no sales of securities.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As each fund's investment adviser, Fidelity Management
& Research Company (FMR) pays all expenses except the compensation of
the non-interested Trustees and certain exceptions such as interest, taxes,
brokerage commissions and extraordinary expenses. FMR receives a fee that
is computed daily at an annual rate of .55%, .55% and .50% of average net
assets for the high yield, intermediate and money market funds,
respectively.
SUB-ADVISER FEE. As the money market fund's investment sub-adviser, FMR
Texas Inc., a wholly owned subsidiary of FMR, receives a fee from FMR of
50% of the management fee payable to FMR. The fee is paid prior to any
voluntary expense reimbursements which may be in effect, and after reducing
the fee for any payments by FMR pursuant to the fund's Distribution and
Service Plan.
FMR also bears the cost of providing shareholder services to each fund. For
the period, FMR or its affiliates collected certain transaction fees from
shareholders which aggregated $11,725, $95 and $34,156 for the high yield,
intermediate and money market funds, respectively.
5. EXPENSE REDUCTIONS
HIGH YIELD FUND. For the period, FMR voluntarily agreed to reimburse the
fund's operating expenses (excluding interest, taxes, brokerage commissions
and extraordinary expenses) above a specified percentage of average net
assets. This expense limitation ranged from an annual rate of .50% to .55%
of average net assets and the reimbursement reduced expenses by $202,856.
INTERMEDIATE FUND. For the period, FMR voluntarily agreed to reimburse all
of the fund's operating expenses (excluding interest, taxes, brokerage
commissions and extraordinary expenses) and the reimbursement reduced
expenses by $7,123.
MONEY MARKET FUND. For the period, FMR voluntarily agreed to reimburse all
of the fund's operating expenses (excluding interest, taxes, brokerage
commissions and extraordinary expenses) above a specified percentage of
average net assets. This expense limitation ranged from an annual rate of
.20% to .35% of average net assets and the reimbursement reduced expenses
by $2,767,561.
6. SHAREHOLDER MEETING.
At a special meeting of shareholders of the high yield and money market
funds held on February 16, 1994, shareholders approved amendments to
certain fundamental investment limitations of the funds.
6. SHAREHOLDER MEETING - CONTINUED
In addition, shareholders of the money market fund approved an Agreement
and Plan of Conversion and Termination (the Plan of Conversion), providing
for the conversion of the money market fund (the current fund) from a
separate series of Fidelity California Municipal Trust, a Massachusetts
business trust, to a separate series (the successor fund) of Fidelity
California Municipal Trust II, a Delaware business trust, effective April
20, 1994. The individual investment objective, policies and limitations of
the successor fund will be identical to those of the current fund. In
connection with the Plan of Conversion, a new management contract, new
sub-advisory agreement and new distribution plan identical to those
currently in effect for the current fund will take effect on April 20,
1994.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity California
Municipal Trust and Shareholders of:
Spartan California Municipal
High Yield Portfolio
Spartan California
Intermediate Municipal Portfolio
Spartan California
Municipal Money Market Portfolio:
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 Spartan California Municipal
High Yield Portfolio, Spartan California Intermediate Municipal Portfolio
and Spartan California Municipal Money Market Portfolio at February 28,
1994, the results of their operations, the changes in their 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 each portfolio's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with
generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which
included confirmation of securities owned at February 28, 1994 by
correspondence with the custodian and brokers and the application of
alternative auditing procedures where confirmations from brokers were not
received, provide a reasonable basis for the opinion expressed above.
/s/Price Waterhouse
PRICE WATERHOUSE
Boston, Massachusetts
March 30, 1994
TO CALL FIDELITY
FOR FUND INFORMATION AND QUOTES
The Fidelity Telephone Connection offers you special automated telephone
services for quotes and balances. The services are easy to use,
confidential and quick. All you need is a Touch Tone telephone.
YOUR PERSONAL IDENTIFICATION NUMBER
(PIN)
The first time you call one of our automated telephone services, we'll ask
you
to set up your Personal Identification
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only you have automated telephone
access to your account information.
Please have your Customer Number
(T-account #) handy when you call --
you'll need it to establish your PIN. If
you would ever like to change your PIN, just choose the "Change your
Personal
Identification Number" option when
you call. If you forget your PIN, please
call a Fidelity representative at 1-800-
544-6666 for assistance.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND QUOTES*
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Just make a selection from this record-ed menu:
PRESS
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1.
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2.
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requested Fidelity fund quotes.
3.
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4.
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Identification Number (PIN).
5.
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representative.
6.
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1.
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(purchases, redemptions, and
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2.
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3.
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representative.
4.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
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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
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AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES. FOR MORE
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FIDELITY FUND INCLUDING MANAGEMENT FEES AND CHARGES, CALL 1-800-544-8888
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(LETTER_GRAPHIC)MAKING CHANGES
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(such as changing name, address, bank, etc.)
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Fidelity Investments
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(LETTER_GRAPHIC)FOR NON-RETIREMENT
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Salt Lake City, UT 84131-0455
OVERNIGHT EXPRESS
Fidelity Investments
Additional Payments
World Trade Center
164 Northern Avenue
Boston, MA 02210
SELLING SHARES
Fidelity Investments
P.O. Box 193
Boston, MA 02103-0878
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
Fidelity Investments
P.O. Box 30281
Salt Lake City, UT 84130-0281
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions
World Trade Center
164 Northern Avenue
Boston, MA 02210
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 193
Boston, MA 02101-0193
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
(LETTER_GRAPHIC)FOR RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 620024
Dallas, TX 75262-0024
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
TO VISIT FIDELITY
For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
851 Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19100 Von Karman Avenue
Irvine, CA
10100 Santa Monica Blvd.
Los Angeles, CA
811 Wilshire Boulevard
Los Angeles, CA
251 University Avenue
Palo Alto, CA
1760 Challenge Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
455 Market Street
San Francisco, CA
1400 Civic Drive
Walnut Creek, CA
COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
185 Asylum Street
Hartford, CT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
2249 Galiano Street
Coral Gables, FL
4090 N. Ocean Boulevard
Ft. Lauderdale, FL
4001 Tamiami Trail, North
Naples, FL
32 West Central Boulevard
Orlando, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road
Sarasota, FL
2000 66th Street, North
St. Petersburg, FL
GEORGIA
3525 Piedmont Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
HAWAII
700 Bishop Street
Honolulu, HI
ILLINOIS
215 East Erie Street
Chicago, IL
One North Franklin
Chicago, IL
540 Lake Cook Road
Deerfield, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
LOUISIANA
201 St. Charles Avenue
New Orleans, LA
MAINE
3 Canal Plaza
Portland, ME
MARYLAND
1 West Pennsylvania Ave.
Towson, MD
7401 Wisconsin Avenue
Bethesda, MD
MASSACHUSETTS
470 Boylston Street
Boston, MA
21 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
Braintree, MA
101 Cambridge Street
Burlington, MA
416 Belmont Street
Worcester, MA
MICHIGAN
280 North Woodward Ave.
Birmingham, MI
26955 Northwestern Hwy.
Southfield, MI
MINNESOTA
38 South Sixth Street
Minneapolis, MN
MISSOURI
700 West 47th Street
Kansas City, MO
200 North Broadway
St. Louis, MO
NEW JERSEY
60B South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
505 Millburn Avenue
Short Hills, NJ
NEW YORK
1050 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
10 Bank Street
White Plains, NY
NORTH CAROLINA
2200 West Main Street
Durham, NC
OHIO
600 Vine Street
Cincinnati, OH
1903 East Ninth Street
Cleveland, OH
28699 Chagrin Boulevard
Woodmere Village, OH
OREGON
121 S.W. Morrison Street
Portland, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
TENNESSEE
5100 Poplar Avenue
Memphis, TN
TEXAS
10000 Research Boulevard
Austin, TX
7001 Preston Road
Dallas, TX
1155 Dairy Ashford
Houston, TX
1010 Lamar Street
Houston, TX
2701 Drexel Drive
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
UTAH
175 East 400 South Street
Salt Lake City, UT
VERMONT
199 Main Street
Burlington, VT
VIRGINIA
8180 Greensboro Drive
McLean, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
1001 Fourth Avenue
Seattle, WA
WASHINGTON, DC
1775 K Street, N.W.
Washington, DC
WISCONSIN
222 East Wisconsin Avenue
Milwaukee, WI
INVESTMENT ADVISER
Fidelity Management & Research
Company
Boston, MA
SUB-ADVISER
FMR Texas Inc.
Irving, TX
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Deborah F. Watson, Vice President
MONEY MARKET FUND
Thomas D. Maher, Assistant
Vice President - MONEY MARKET FUND
Gary L. French, Treasurer
John H. Costello, Assistant Treasurer
Arthur S. Loring, Secretary
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox*
Phyllis Burke Davis*
Richard J. Flynn*
Edward C. Johnson 3d
E. Bradley Jones*
Donald J. Kirk*
Peter S. Lynch
Edward H. Malone*
Marvin L. Mann*
Gerald C. McDonough*
Thomas R. Williams*
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
United Missouri Bank, N.A.
Kansas City, MO
and
Fidelity Service Co.
Boston, MA
CUSTODIAN
United Missouri Bank, N.A.
Kansas City, MO
THE FIDELITY
TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774 (8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE
