FIDELITY
(REGISTERED TRADEMARK)
CALIFORNIA
TAX-FREE
PORTFOLIOS
SEMIANNUAL REPORT
AUGUST 31, 1995
CONTENTS
PRESIDENT'S MESSAGE 3 NED JOHNSON ON INVESTING
STRATEGIES
FIDELITY CALIFORNIA TAX-FREE
HIGH YIELD PORTFOLIO 4 PERFORMANCE
7 FUND TALK: THE MANAGER'S OVERVI
EW
10 INVESTMENT CHANGES
11 INVESTMENTS
21 FINANCIAL STATEMENTS
FIDELITY CALIFORNIA TAX-FREE
INSURED PORTFOLIO 25 PERFORMANCE
28 FUND TALK: THE MANAGER'S OVERVI
EW
31 INVESTMENT CHANGES
32 INVESTMENTS
39 FINANCIAL STATEMENTS
FIDELITY CALIFORNIA TAX-FREE
MONEY MARKET PORTFOLIO 43 PERFORMANCE
45 FUND TALK: THE MANAGER'S OVERVI
EW
47 INVESTMENT CHANGES
48 INVESTMENTS
56 FINANCIAL STATEMENTS
NOTES 60 NOTES TO THE FINANCIAL STATEMENTS
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.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, THE
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
NEITHER THE FUNDS NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES,
CALL
1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST
OR SEND
MONEY.
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
Although the markets have been fairly positive this year, no one can
predict what lies ahead for investors. Last year, stocks posted
below-average returns and bonds had one of the worst years in history. This
downturn followed a period in which the investing environment was generally
very positive.
These market ups and downs are a normal part of investing, and there are
some basic principles that are helpful for investors to remember in
different types of markets.
Keeping in mind that the effects of interest rate changes on your bond
investments will only be "paper" gains or losses unless you sell your
shares, staying in your bond fund may be appropriate if your investment
horizon is at least a year or more. The longer your investing time frame,
the more likely it is that you will retain your principal investment
through both up and down markets. For example, a 10-year time frame, such
as saving for a college education, enables you to weather these ups and
downs in a long-term fund, which has higher potential returns. An
intermediate-length fund could be appropriate if your investment horizon is
two to four years, and a short-term bond fund could be the right choice if
you need your money in one or two years.
If your time horizon is less than a year, you might want to consider moving
some of your bond investment into a money market fund, which seeks income
and a stable share price by investing in high-quality, short-term
investments. Of course, there is no assurance that a money market fund will
achieve its goal, and it is important to remember that money market funds
are not insured or guaranteed by any agency of the U.S. government.
No matter what your investment horizon or portfolio diversity, it makes
good sense to follow a regular investment plan - investing a certain amount
of money at the same time each month or quarter - and to review your
portfolio periodically. A periodic investment plan will not, of course,
assure a profit or protect against a loss.
If you have any questions, please call us at 1-800-544-8888. We stand ready
to provide the information you need to make the investments that are right
for you.
Best regards,
Edward C. Johnson 3d
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, plus reinvestment of any
dividends (or income) and capital gains (the profits the fund earns when it
sells securities that have grown in value). You can also look at the fund's
income to measure performance.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED AUGUST 31, 1995 PAST 6 PAST 1 PAST 5 PAST 10
MONTHS YEAR YEARS YEARS
California Tax-Free High Yield 5.24% 7.26% 44.91% 119.16%
Lehman Brothers Municipal Bond Index 5.89% 8.87% 52.01% 147.13%
Average California Municipal Bond Fund 4.49% 7.07% 47.08% 123.38%
Consumer Price Index 1.33% 2.62% 16.19% 41.57%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years, or ten
years. For example, if you invested $1,000 in a fund that had a 5% return
over the past year, the value of your investment would be $1,050. You can
compare the fund's returns to the performance of the Lehman Brothers
Municipal Bond Index - a broad gauge of the municipal bond market. To
measure how the fund's performance stacked up against its peers, you can
compare it to the average California municipal bond fund, which reflects
the performance of 101 California municipal bond funds with similar
objectives tracked by Lipper Analytical Services over the past six months.
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.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED AUGUST 31, 1995 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
California Tax-Free High Yield 7.26% 7.70% 8.16%
Lehman Brothers Municipal Bond Index 8.87% 8.74% 9.47%
Average California Municipal Bond Fund 7.07% 8.01% 8.35%
Consumer Price Index 2.62% 3.05% 3.54%
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had achieved that return
by performing at a constant rate each year.
$10,000 OVER 10 YEARS
Cal Free High YieldMunicipal Bond Ind
08/31/85 10000.00 10000.00
09/30/85 9814.93 9899.70
10/31/85 10116.41 10238.96
11/30/85 10399.42 10606.23
12/31/85 10596.53 10699.46
01/31/86 11098.38 11329.66
02/28/86 11453.13 11779.00
03/31/86 11610.10 11782.77
04/30/86 11557.31 11791.72
05/31/86 11384.96 11599.75
06/30/86 11475.95 11710.41
07/31/86 11523.74 11781.49
08/31/86 12054.06 12308.95
09/30/86 12019.19 12339.85
10/31/86 12219.99 12552.96
11/30/86 12420.50 12801.63
12/31/86 12455.12 12766.30
01/31/87 12786.07 13150.69
02/28/87 12885.13 13215.39
03/31/87 12793.50 13075.31
04/30/87 11813.91 12419.19
05/31/87 11636.04 12357.59
06/30/87 11844.95 12720.41
07/31/87 11979.71 12850.16
08/31/87 12039.48 12879.07
09/30/87 11390.01 12404.22
10/31/87 11495.90 12448.13
11/30/87 11768.54 12773.15
12/31/87 11998.37 12958.49
01/31/88 12570.78 13420.07
02/29/88 12732.44 13561.92
03/31/88 12321.36 13403.93
04/30/88 12371.20 13505.80
05/31/88 12421.74 13466.76
06/30/88 12623.10 13663.78
07/31/88 12697.23 13752.87
08/31/88 12748.65 13764.97
09/30/88 13026.19 14014.12
10/31/88 13329.48 14261.47
11/30/88 13176.53 14130.83
12/31/88 13411.19 14275.39
01/31/89 13597.77 14570.61
02/28/89 13466.87 14404.36
03/31/89 13447.10 14369.93
04/30/89 13837.24 14711.07
05/31/89 14130.37 15016.62
06/30/89 14310.34 15220.55
07/31/89 14440.01 15427.70
08/31/89 14264.48 15276.66
09/30/89 14282.86 15231.14
10/31/89 14425.11 15417.41
11/30/89 14649.40 15687.22
12/31/89 14708.32 15815.54
01/31/90 14605.45 15740.73
02/28/90 14792.12 15881.61
03/31/90 14824.85 15886.38
04/30/90 14613.51 15771.36
05/31/90 14964.74 16115.65
06/30/90 15102.30 16257.30
07/31/90 15335.66 16497.10
08/31/90 15123.39 16257.56
09/30/90 15183.41 16266.83
10/31/90 15379.61 16561.91
11/30/90 15672.45 16894.97
12/31/90 15731.75 16968.46
01/31/91 15874.59 17196.18
02/28/91 15933.21 17345.78
03/31/91 15950.66 17352.03
04/30/91 16138.75 17583.68
05/31/91 16299.08 17740.00
06/30/91 16302.72 17722.43
07/31/91 16508.22 17938.29
08/31/91 16656.13 18174.54
09/30/91 16834.66 18411.17
10/31/91 17042.54 18576.87
11/30/91 17045.08 18628.70
12/31/91 17329.90 19028.48
01/31/92 17423.24 19071.86
02/29/92 17452.96 19077.96
03/31/92 17443.45 19085.02
04/30/92 17581.51 19254.88
05/31/92 17800.32 19481.51
06/30/92 18078.15 19808.41
07/31/92 18638.02 20402.27
08/31/92 18379.54 20203.34
09/30/92 18473.32 20335.47
10/31/92 18130.90 20135.58
11/30/92 18553.83 20496.20
12/31/92 18840.06 20705.47
01/31/93 19064.95 20946.27
02/28/93 19936.74 21703.90
03/31/93 19700.31 21474.49
04/30/93 19877.03 21691.17
05/31/93 19992.73 21813.07
06/30/93 20314.93 22177.13
07/31/93 20314.90 22206.19
08/31/93 20810.27 22668.52
09/30/93 21073.40 22926.71
10/31/93 21109.37 22970.96
11/30/93 20891.42 22768.59
12/31/93 21370.89 23249.23
01/31/94 21612.78 23514.74
02/28/94 21015.65 22905.71
03/31/94 19940.95 21972.99
04/30/94 20024.71 22159.32
05/31/94 20162.59 22351.44
06/30/94 19956.54 22214.87
07/31/94 20363.27 22622.07
08/31/94 20433.37 22700.34
09/30/94 20119.85 22367.10
10/31/94 19626.24 21969.86
11/30/94 19144.21 21572.65
12/31/94 19472.80 22047.46
01/31/95 20170.58 22677.58
02/28/95 20824.17 23337.04
03/31/95 21038.05 23605.18
04/30/95 21042.05 23633.04
05/31/95 21748.37 24387.17
06/30/95 21466.17 24173.78
07/31/95 21662.46 24402.95
08/31/95 21915.81 24713.00
$10,000 OVER 10 YEARS: Let's say you invested $10,000 in Fidelity
California Tax-Free High Yield Portfolio ten years ago on August 31, 1985.
As the chart shows, by August 31, 1995, the value of your investment would
have grown to $21,916 - a 119.16% 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 $24,713 - a 147.13% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is no
guarantee of how it will do
tomorrow. Bond prices, for
example, generally 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)
TOTAL RETURN COMPONENTS
SIX MONT
HS
ENDED YEARS ENDED FEBRUARY 28,
AUGUST 3
1,
1995 1995 1994 1993 1992 1991
Dividend return 2.90% 5.96% 5.82% 6.89% 6.88% 7.00%
Capital appreciation
return 2.34% -6.87% -0.41% 7.34% 2.66% 0.71%
Total return 5.24% -0.91% 5.41% 14.23% 9.54% 7.71%
DIVIDEND returns and capital appreciation returns are both part of a bond
fund's total return. A dividend return reflects the actual dividends paid
by the fund. A capital appreciation return reflects both the amount paid by
the fund to shareholders as capital gain distributions and changes in the
fund's share price. Both returns assume the dividends or gains are
reinvested.
DIVIDENDS AND YIELD
<TABLE>
<CAPTION>
<S> <C> <C> <C>
PERIODS ENDED AUGUST 31, 1995 PAST PAST 6 PAST 1
MONTH MONTHS YEAR
Dividends per share 5.22(cents) 31.64(cents) 65.52(cents)
Annualized dividend rate 5.49% 5.58% 5.95%
30-day annualized yield 5.29% - -
30-day annualized tax-equivalent yield 9.29% - -
</TABLE>
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 $11.21 over
the past month, $11.28 over the past six months and $11.02 over the past
year, you can compare the fund's income over these three 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 1995 federal and state tax bracket but
does not reflect the payment of the federal alternative minimum tax, if
applicable.
FIDELITY CALIFORNIA TAX-FREE HIGH YIELD PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Jonathan Short, Portfolio Manager of Fidelity California
Tax-Free High Yield Fund
Q. JONATHAN, HOW HAS THE FUND PERFORMED?
A. For the six- and 12-month periods ended August 31, 1995, the fund had
total returns of 5.24% and 7.26%, respectively. For the same six- and
12-month periods, the average California municipal bond fund returned 4.49%
and 7.07%, respectively, as tracked by Lipper Analytical Services.
Q. MUNICIPAL BONDS HAVE ENJOYED A RALLY SO FAR IN 1995. WHAT WAS DRIVING
THE MARKET'S PERFORMANCE?
A. Several things. In the first part of the year, the Federal Reserve Board
was still in a tightening mode, raising interest rates in an effort to
stave off possible inflation. During this period, however, many investors
began to anticipate that the economy's growth rate would slow and inflation
would remain subdued. This led investors to believe that the Fed might
switch courses and move toward an easing mode which would allow interest
rates to decline. That assumption proved to be correct as the Fed eased in
July. Since bond prices generally move in the opposite direction of
interest rates, lower interest rates translated into higher prices for
taxable and tax-free bond prices alike. The municipal market also was
helped by relatively low supply. For the first six months of 1995, the
supply of California municipal bonds was 40% less than it was during the
same period the previous year. Relatively healthy demand and low supply
caused the municipal market to outperform the Treasury market during the
first quarter of the year. But in the spring, municipals ran into a hurdle.
The public debate about various federal tax reform proposals heated up, and
investors worried about the implications of those proposals on the
tax-exempt status of municipal bonds. The proposal causing the most worry
was the flat tax, under which all individuals would be taxed at a uniform
rate and deductions would be eliminated. In my view, it's unlikely that a
flat tax will be enacted before 1997, if ever. So I believe that the market
has overreacted.
Q. WHY DID THE FUND PERFORM BETTER THAN THE AVERAGE?
A. Primarily because of its structure. Throughout the past six months the
yield curve - which measures the difference in yields between bonds of
various maturities - steepened. In anticipation of that steepening, I sold
some longer-term bonds with maturities of 20 years or longer and in their
place bought bonds with intermediate maturities in the 10- to 15-year
range. As the yield curve steepened, intermediate bonds generally performed
better than longer-term bonds and this helped the fund's performance. Most
of the intermediate bonds I bought were non-callable, which means they
can't be redeemed by their issuer prior to their maturity date. As the
market rallied, non-callable bonds were in high demand among investors, and
they tended to do quite well.
Q. WHAT KINDS OF BONDS HAVE YOU AVOIDED BUYING?
A. Callable bonds, or those that can be redeemed by their issuer before
their scheduled maturity dates. Here's why: When a bond rises above its
call price, it stops trading to its maturity date. Instead, it trades to
the earlier call date, which is the date the issuer can redeem the bond.
When that occurs, a callable bond's potential for price appreciation is
limited, yet it can decline in value like a longer-maturity bond. So
because callable bonds generally have reduced upside potential when they
are trading to their call date, I prefer to invest in non-callable bonds.
Q. THERE HAS BEEN A GENERAL IMPROVEMENT IN THE OVERALL CREDIT QUALITY OF
THE FUND DURING THE PAST SIX MONTHS. WHAT'S BEHIND THAT MOVE?
A. With the problems stemming from Orange County's bankruptcy still
lingering, municipal bond credit quality is under much more scrutiny now
and investors have tended to prefer higher-quality bonds. As a result, I
built up the fund's stake in Aaa bonds, as rated by Moody's Investors
Service.
Q. HOW DID THE FUND'S STAKE IN ORANGE COUNTY AND RELATED BONDS FARE OVER
THE PAST SIX MONTHS?
A. Let me start by pointing out that the fund held no investments in
uninsured securities issued directly by Orange County. However, at the end
of the period it did have about a 6% stake in bonds issued by entities
which were participants in the county's pool. Generally speaking, over the
past six months the prices of these bonds have rebounded to levels near
where they were prior to the bankruptcy. One bond affected by the Orange
County situation was the Orange County Development Agency, Santa Ana
Heights Project, which made up less than 1% of the fund's investments at
the end of the period. The Development Agency has met its two scheduled
debt service payments in full since the bankruptcy filing. Those payments
helped improve the outlook for the bond.
Q. WHAT'S AHEAD FOR THE FUND?
A. There are a number of things to consider. Further public debate about
federal tax reform proposals could continue to cause some volatility in the
municipal market. While I'm optimistic about the market's prospects from a
supply and demand standpoint, interest rates may not continue to drop as
much as they have. The past six months has been an extremely strong period
for the municipal market, and we could see a period in which municipals
pause and trade in a more narrow range. So I believe it's likely that the
fund's total return will be less dependent on bond prices rising and more
dependent on income.
FUND FACTS
GOAL: high current tax-free
income for California
residents
START DATE: July 7, 1984
SIZE: as of August 31, 1995,
more than $482 million
MANAGER: Jonathan Short,
since March 1995; manager,
Fidelity California Tax-Free
Insured, Spartan California
Municipal High Yield, and
Spartan California
Intermediate Municipal
Portfolios, since March 1995;
Spartan Arizona Municipal
Portfolio, as of
October 1, 1995; joined
Fidelity in 1990
(checkmark)
JONATHAN SHORT ON HIS
OUTLOOK FOR THE CALIFORNIA
ECONOMY:
"The California economy
appears to have hit bottom,
and I expect the state to
experience moderate
economic growth going
forward. However, I do not
expect this growth to be
robust. Employment is
starting to grow, primarily as a
result of the expanding
entertainment and service
sectors. But, job growth will
continue to be hindered by the
ongoing downsizing in the
defense industry. Although
new construction activity
remains low and the housing
sector has yet to show many
signs of a rebound, home
prices appear to be
stabilizing. This price
stabilization should add some
support to the housing market
and could eventually provide
a boost for the economy. A
positive sign for the economy
has been the increase in retail
sales, which have shown
growth over the past two
years and presently look
reasonably healthy. In
summary, I am cautiously
optimistic since I expect the
state's economy to show
gradual improvement."
FIDELITY CALIFORNIA TAX-FREE HIGH YIELD PORTFOLIO
INVESTMENT CHANGES
TOP FIVE SECTORS AS OF AUGUST 31, 1995
% OF FUND'S % OF FUND'S INVESTMENT
INVESTMENTS S
IN THESE SECTORS
6 MONTHS AGO
Health Care 19.2 24.6
Special Tax 17.0 16.6
Lease Revenue 13.0 16.0
Electric Revenue 12.9 11.8
Transportation 8.7 3.6
AVERAGE YEARS TO MATURITY AS OF AUGUST 31, 1995
6 MONTHS AGO
Years 16.0 18.5
AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY DOLLAR
AMOUNT.
DURATION AS OF AUGUST 31, 1995
6 MONTHS AGO
Years 8.2 8.6
DURATION SHOWS HOW MUCH A BOND FUND'S PRICE FLUCTUATES WITH CHANGES IN
COMPARABLE INTEREST RATES. IF RATES RISE 1%, FOR EXAMPLE, A FUND WITH A
FIVE-YEAR DURATION IS LIKELY TO LOSE ABOUT 5% OF ITS VALUE. OTHER FACTORS
ALSO CAN INFLUENCE A BOND FUND'S PERFORMANCE AND SHARE PRICE. ACCORDINGLY,
A BOND FUND'S ACTUAL PERFORMANCE MAY DIFFER FROM THIS EXAMPLE.
QUALITY DIVERSIFICATION (MOODY'S RATINGS)
AS OF AUGUST 31, 1995 AS OF FEBRUARY 28, 1995
Aaa 37.5%
Aa, A 35.3%
Baa 15.2%
Caa 0.5%
Non-rated 6.1%
Short-term and other
investments 5.4%
Aaa 30.3%
Aa, A 39.0%
Baa 14.0%
Caa 0.4%
Non-rated 10.3%
Short-term and other
investments 6.0%
Row: 1, Col: 1, Value: 37.5
Row: 1, Col: 2, Value: 35.3
Row: 1, Col: 3, Value: 15.2
Row: 1, Col: 4, Value: 1.5
Row: 1, Col: 5, Value: 6.1
Row: 1, Col: 6, Value: 5.4
Row: 1, Col: 1, Value: 30.3
Row: 1, Col: 2, Value: 39.0
Row: 1, Col: 3, Value: 14.0
Row: 1, Col: 4, Value: 1.4
Row: 1, Col: 5, Value: 10.3
Row: 1, Col: 6, Value: 6.0
SHOWN AS A PERCENTAGE OF THE FUND'S INVESTMENTS. WHERE MOODY'S RATINGS ARE
NOT AVAILABLE, WE HAVE USED S&P RATINGS. UNRATED DEBT SECURITIES THAT ARE
EQUIVALENT TO BA AND BELOW ACCOUNT FOR 0.0% AND 4.4% OF THE FUND'S
INVESTMENTS AT AUGUST 31, 1995, AND FEBRUARY, 28, 1995, RESPECTIVELY.
FIDELITY CALIFORNIA TAX-FREE HIGH YIELD PORTFOLIO
INVESTMENTS AUGUST 31, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investments
MUNICIPAL BONDS - 94.5%
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
CALIFORNIA - 93.6%
Alameda County Ctfs. of Prtn. Rfdg.
(Santa Rita Jail Proj.) 5.375% 6/1/09
(MBIA Insured) Aaa $ 4,100,000 $ 4,053,875
Alameda Hsg. Auth. Multi-Family Hsg. Rev.
(Independence Apts.) Series A, 7.50%
2/20/31 (GNMA Coll.) - 2,635,000 2,710,756
Anaheim Pub. Fin. Auth. Rev. 6.45% 12/28/18
(MBIA Insured) Aaa 3,000,000 3,138,750
Buena Park Commty. Redev. Agcy. Tax Allocation
Rfdg. (Central Business Dist. Proj.) 7.10%
9/1/14 BBB+ 2,000,000 2,045,000
Burbank Redev. Agcy. Tax Allocation Rfdg.
Series A:
5.75% 12/1/08 Baa1 2,300,000 2,199,375
6% 12/1/23 Baa1 1,975,000 1,807,125
California Gen. Oblig.:
6.50% 3/1/02 (AMBAC Insured) Aaa 2,070,000 2,277,000
4.50% 9/1/05 (AMBAC Insured) Aaa 3,000,000 2,823,750
Unltd. Tax:
6% 9/1/03 A1 4,000,000 4,265,000
6.40% 2/1/05 A1 1,685,000 1,828,225
California Health Facs. Fing. Auth. Rev.:
Rfdg. (Alexian Brothers, San Jose):
7.05% 1/1/09 (MBIA Insured) Aaa 4,500,000 4,876,875
7.125% 1/1/16 (MBIA Insured) Aaa 2,510,000 2,691,975
(Daughters of Charity-St. Vincents Hosp.)
Series A, 9.25% 11/1/15 Aa 1,000,000 1,053,850
(Gould Med. Foundation)
Series A, 7.30% 4/1/20 A 3,000,000 3,375,000
(Kaiser Permanente Health Sys.) Series A:
0% 10/1/09 Aa3 7,140,000 3,070,200
0% 10/1/10 Aa3 3,795,000 1,527,488
9.125% 10/1/15 Aa3 2,500,000 2,556,250
(Robert F. Kennedy Med. Ctr.)
Series A, 7.75% 3/1/14 A 2,980,000 3,173,700
(Sacramento Med. Foundation)
Series F, 7.875% 6/1/18 A 1,000,000 1,071,250
(St. Elizabeth Hosp. Proj.) 6.30%
11/15/15 A1 1,000,000 1,002,500
California Hsg. Fin. Agcy. Rev. (Home Mtg.):
Series A, 8.10% 8/1/16 Aa 1,475,000 1,517,406
Series F, 7.875% 8/1/19 Aa 870,000 889,575
California Poll. Cont. Fing. Auth. Poll. Cont. Rev.
(General Motors Corp.) 5.50% 4/1/08 A3 1,500,000 1,462,500
California Pub. Cap. Impt. Fing. Auth. Rev.
(Pooled Proj.) Series B, 8.10% 3/1/18
(MBIA Insured) Aaa 965,000 1,049,438
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
California Pub. Works Board Lease Rev.:
Rfdg. (Dept. Corrections State Prisons)
Series A, 5% 12/1/19 (AMBAC Insured) Aaa $ 3,250,000 $ 2,831,563
Rfdg. (Dept. Corrections State Prisons, Del Norte)
Series C:
4.50% 12/1/01 A 2,845,000 2,770,319
4.875% 12/1/06 A 1,550,000 1,457,000
(Univ. of California Projs.):
Series A:
6.50% 9/1/03 A 1,045,000 1,125,988
5.50% 6/1/10 A 1,915,000 1,814,463
5.50% 6/1/14 A 9,275,000 8,486,625
Series B:
5.25% 6/1/07 A1 2,965,000 2,853,813
6.40% 12/1/09 A1 1,000,000 1,036,250
5.50% 6/1/14 A1 2,500,000 2,303,125
California Statewide Commtys. Dev. Corp.
Ctfs. of Prtn.:
Rfdg. (Insured Health Facs.) (Eskaton, Inc.)
5.875% 5/1/20 A 880,000 814,000
Rfdg. (Insured Hosp.) (Triad Healthcare)
6.25% 8/1/06 A 2,000,000 2,002,500
(Catholic Healthcare)
7.102% 7/1/13 (MBIA Insured), INFL (e) Aaa 2,000,000 1,892,500
(Childrens) 6%, 6/1/10 (MBIA Insured) Aaa 2,835,000 2,905,875
(J. Paul Getty Trust) 5% 10/1/13 Aaa 1,450,000 1,294,125
(Odd Fellows) 5.375% 10/1/13 A+ 2,500,000 2,218,750
5.50% 10/1/23 A+ 1,500,000 1,301,250
(St. Joseph Health Sys.):
5.50% 7/1/14 Aa 3,500,000 3,281,250
5.50%7/1/23 Aa 3,000,000 2,715,000
(Sisters of Charity Leavenworth) 5%
12/1/23 Aa 5,375,000 4,488,125
(Villaview Commty. Hosp., Inc.)
Series A, 7% 9/1/09 A 1,000,000 1,066,250
California Wtr. Dept. Res.:
(Cent. Valley Proj. Rev.)
Series I, 6.95% 12/1/25 Aaa 1,000,000 1,125,000
5.90% 12/1/05 Aa 1,005,000 1,075,350
Campbell Ctfs. of Prtn. Rfdg. (Civic Center
Proj.) 6% 10/1/18 A 2,400,000 2,289,000
Carson Redev. Agcy. Redev. Proj. Area #1
Tax Allocation Rfdg.:
6.375% 10/1/12 Baa1 1,500,000 1,471,875
6.375% 10/1/16 Baa1 1,000,000 968,750
Carson Redev. Agcy. Redev. Proj. Area #2
Tax Allocation 6% 10/1/13 Baa 1,750,000 1,631,875
Castaic Lake Wtr. Agcy. Ctfs. of Prtn. Rfdg.
(Wtr. Sys. Impt. Proj.) Series A:
7.25% 8/1/08 (MBIA Insured) Aaa 1,500,000 1,764,375
7% 8/1/13 (MBIA Insured) Aaa 1,580,000 1,791,325
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Central California Joint Pwrs. Health Fing. Auth.
Ctfs. of Prtn.:
Rfdg. (Commty. Hosp. of Central California
Proj.) 5% 2/1/23 A $ 5,950,000 $ 4,700,500
(Commty. Hosp. of Central California Proj.)
5.25% 2/1/13 A 4,000,000 3,470,000
Central Valley Fing. Auth. Rev.
(Cogeneration Proj.) (Carson Ice Gen. Proj.):
6% 7/1/09 BBB- 1,750,000 1,719,375
6.10% 7/1/13 BBB- 1,000,000 970,000
Compton Commty. Redev. Agcy. Tax Allocation
Rfdg. (Walnut Ind. Park Proj.) 7.50% 8/1/13
(AMBAC Insured) Aaa 3,900,000 4,446,000
Contra Costa County Ctfs. of Prtn.
(Merrithew Mem. Hosp.):
Cap. Appreciation 0%, 11/1/13 A1 6,805,000 2,245,650
0% 11/1/07 A1 4,615,000 2,278,656
Contra Costa Trans. Auth. (Sales Tax
Rev.) Series A, 6% 3/1/04 (FGIC Insured) Aaa 2,605,000 2,803,631
Desert Hosp. Dist. Rev. Ctfs. of Prtn.
6.392% 7/28/20 (CGIC Insured) Aaa 8,000,000 8,150,000
Duarte Ctfs of Prtn. (City of Hope Nat'l.
Med. Ctr.) 6.25% 4/1/23 Baa1 3,000,000 2,805,000
Duarte Redev. Agcy. Tax Allocation (Huntington
Drive-PH 2 Redev. Proj.) 9.25% 11/1/10
(Pre-Refunded to 11/1/95 @ 102)(c) - 1,640,000 1,687,150
East Bay Muni. Util. Dist. Wtr. Sys. Rev. Rfdg.:
5.75% 6/1/04 (MBIA Insured) Aaa 4,000,000 4,255,000
6% 6/1/12 (FGIC Insured) Aaa 1,000,000 1,006,250
East Bay Reg. Park Dist. Series C:
6.50% 9/1/02 (FGIC Insured) Aaa 1,220,000 1,349,625
6.50% 9/1/03 (FGIC Insured) Aaa 1,285,000 1,427,956
Eastern Muni. Wtr. Dist. Wtr. & Swr. Rev.
Ctfs. of Prtn. 6.75% 7/1/12 (FGIC Insured) Aaa 1,600,000 1,764,000
Fontana Redev. Agcy. Tax Allocation Rfdg.
(Yurupa Hills):
Series 1992 A, 7.10% 10/1/23 BBB 2,495,000 2,535,544
Series A, 7% 10/1/14 BBB+ 2,300,000 2,343,125
Foothill/Eastern Trans. Toll Rd. Rev. Sr. Lien
Series A, 6% 1/1/16 BBB- 9,500,000 8,894,375
Foster City Pub. Fing. Auth. Rev.
(Foster City Commty. Rev. Proj.) Series A:
6% 9/1/06 A- 1,355,000 1,365,163
6% 9/1/07 A- 1,440,000 1,440,000
6% 9/1/13 A- 1,925,000 1,850,406
Fountain Valley Agcy. for Commty. Dev. Tax
Allocation (Ind. Area Redev. Proj.)
9.10% 1/1/15 BBB+ 1,745,000 1,782,081
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Industry Urban Ind. Dev. Agcy.:
Rfdg. (Civic Recreational Proj.#1)
Series A, 7.375% 5/1/12 - $ 11,250,000 $ 11,615,625
(Civic Recreational Proj.#1-B)
7.375% 5/1/15 - 245,000 252,963
Intermodal Container Transfer Facs. Joint Pwr.
Auth. Rev. Rfdg. Series 1989 A, 7.70%
11/1/14, LOC Industrial Bank of Japan Aa3 1,500,000 1,576,875
Irvine Ranch Wtr. Dist. Joint Pwr. Agcy.
Local Pool Rev.:
7.875% 2/15/23 A+ 390,000 410,475
8.25% 8/15/23 A+ 15,675,000 16,831,031
Kern County High School Dist. Gen. Oblig.
7% 8/1/09 A1 1,090,000 1,231,700
Kings River Conservation Dist. 6.375% 1/1/12 Aa 3,830,000 3,940,113
La Quinta Redev. Agcy. Rfdg. (Tax Allocation Proj.
Area #1) 7.30% 9/1/05 (MBIA Insured) Aaa 1,000,000 1,180,000
Livermore Redev. Agcy. Tax Allocation Rev.
(Livermore Redev. Proj.)
Series A, 7.75% 8/1/09 - 1,000,000 1,026,250
Local Gov't. Fin. Auth. Rev. (Oakland
Central Dist.) 0% 9/1/08 Aaa 3,710,000 1,799,350
Loma Linda Hosp. Rev. (Loma Linda Univ.
Med. Ctr Proj.) Series B, 9% 12/1/12 BBB 1,550,000 1,598,438
Los Angeles Ctfs. of Prtn. (Health Facs.
Construction Loan) (Bay Harbor Hosp.)
7.30% 4/1/20 A 2,000,000 2,100,000
Los Angeles Convention & Exhibition Ctr. Auth.
Ctfs. of Prtn. Rfdg.
Series A, 7.375% 8/15/18
(Pre-Refunded to 8/15/99 @ 101.5)(c) Aaa 2,500,000 2,818,750
Los Angeles Dept. of Wtr. & Pwr. Elec. Plant
Rev. 6% 11/15/03 (MBIA Insured) Aa 3,000,000 3,247,500
Los Angeles Hbr. Dept. Rev.
7.60% 10/1/18 (Escrowed to Maturity)(c) Aa 5,540,000 6,080,150
Los Angeles Wastewtr. Sys. Rev. Series B, 7%
6/1/10, (FGIC Insured) Aaa 1,000,000 1,131,250
Los Angeles County Ctfs. of Prtn:
(Correctional Facs.) 0%, 9/1/10
(MBIA Insured) Aaa 3,770,000 1,555,125
(Disney Parking):
0%, 3/1/11 Baa1 1,950,000 677,625
0% 3/1/13 Baa1 2,835,000 843,413
0% 9/1/15 Baa1 3,800,000 940,500
0% 9/1/17 Baa1 3,370,000 728,763
0% 3/1/18 Baa1 3,000,000 626,250
(Cap. Appreciation):
0% 9/1/10 Baa1 2,980,000 1,087,700
0% 3/1/20 Baa1 1,000,000 181,250
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Los Angeles County Metropolitan Trans. Auth.
Sales Tax Rev.:
Rfdg. (Prop. A) Series A,
5% 7/1/21 (FGIC Insured) Aaa $ 2,120,000 $ 1,833,800
(Prop. C) Series A:
5.90% 7/1/03 (AMBAC Insured) Aaa 1,655,000 1,779,125
5.90% 7/1/04 (AMBAC Insured) Aaa 2,100,000 2,257,500
5.90% 7/1/07 (AMBAC Insured) Aaa 1,730,000 1,829,475
Madera County Ctfs. of Prtn. (Valley Children's
Hospital) 6.25% 3/15/05 (MBIA Insured) Aaa 500,000 539,375
Metropolitan Wtr. Dist. Southern California
Gen. Oblig. 5% 3/1/02 Aaa 2,000,000 2,050,000
Metropolitan Wtr. Dist. Southern California
Crossover Rfdg. Series A1, 5.50% 3/1/10 Aaa 2,000,000 1,980,000
Metropolitan Wtr. Dist. Southern Wtrwks. Rev.:
5.75% 7/1/09 Aa 3,000,000 3,056,250
5.75% 8/12/18 Aa 5,000,000 4,806,250
7.559% 8/5/22, INFL (d) Aa 1,300,000 1,296,750
Modesto Irrigation Dist. Ctfs. of Prtn.:
Rfdg. & Cap. Impts. Series A:
0% 10/1/05 (MBIA Insured) Aaa 2,140,000 1,270,625
0% 10/1/08 (MBIA Insured) Aaa 2,270,000 1,103,788
(Geysers Geothermal Pwr. Proj.)
Series 1986, 5% 10/1/17 A1 5,000,000 4,237,500
Northern California Pwr. Agcy. Pub. Pwr. Rev.:
Rfdg. (Geothermal Proj.) Series A:
5.80% 7/1/09 (AMBAC Insured) Aaa 1,875,000 1,921,875
7.50% 7/1/23 (AMBAC Insured)
(Pre-Refunded to 7/1/21 @ 100) Aaa 1,355,000 1,627,694
Crossover Rfdg. (Geothermal Proj. #3)
Series A, 5.50% 7/1/05 (AMBAC Insured) Aaa 2,250,000 2,337,188
Northern California Transmission Rev.
(Ore Transmission Proj.) Series A, 7%
5/1/13 (MBIA Insured) Aaa 7,000,000 7,927,500
Norwalk Redev. Agcy. Tax Allocation (Norwalk
Redev. Proj. #1) 7.15% 12/1/15 - 2,500,000 2,593,750
Oakland Ctfs. of Prtn. Rfdg. (Oakland Museum)
Series A, 0%, 4/1/07 (AMBAC Insured) Aaa 2,750,000 1,467,813
Ontario Redev. Fing. Auth. Rev.
(Cap. Appreciation Proj. #1) (Ctr. City)
0% 8/1/10 (MBIA Insured) Aaa 3,255,000 1,379,306
Orange County Dev. Agcy. Tax Allocation
(Santa Ana Heights Proj.) 6.125% 9/1/23 Caa 2,500,000 2,184,375
Orange County Local Trans. Auth. Sales Tax Rev.
First Series-Measure M, 6% 2/15/08
(AMBAC Insured) Aaa 1,250,000 1,295,313
Palm Desert Fing. Auth. Tax Allocation
6.3675% 4/1/22 (MBIA Insured) Aaa 6,000,000 6,135,000
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Palm Springs Ctfs. of Prtn. (Muni. Golf Course
Expansion Proj.) 7.40% 11/1/18 BBB+ $ 1,750,000 $ 1,813,438
Pasadena Ctfs. of Prtn. Rfdg. (Old Pasadena
Pkg. Facs. Proj.) 6.25% 1/1/18 A1 1,600,000 1,646,000
Placer County Wtr. Agcy. Middle Fork Proj. Rev.
Series A, 3.75% 7/1/12 A 8,830,000 6,655,613
Pleasanton Joint Pwrs. Fing. Auth. Reassessment
Series A:
5.70% 9/2/01 Baa 1,250,000 1,281,250
5.80% 9/2/02 Baa 2,900,000 2,990,625
6.15% 9/2/12 Baa 2,930,000 2,878,725
Port Oakland Port. Rev.:
Rfdg. (Cap. Appreciation)
Series F, 0% 11/1/08 (MBIA Insured) Aaa 1,770,000 849,600
Rfdg. Series F, 0% 11/1/06 (MBIA Insured) Aaa 1,990,000 1,096,988
(Cap. Appreciation)
Series F, 0% 11/1/07 (MBIA Insured) Aaa 4,250,000 2,183,438
Rancho Wtr. Dist. Fing. Auth. Rev.
Rfdg. 6.50% 11/1/04 (FGIC Insured) Aaa 1,985,000 2,210,794
Rancho Mirage Joint Pwrs. Fing. Auth.
Ctfs. of Prtn. (Eisenhower Mem. Hosp.)
7% 3/1/22 A 3,300,000 3,403,125
Riverside County Asset Leasing Corp. Leasehold
Rev. (Riverside County Hosp. Proj.)
Series A, 6.50% 6/1/12 A 7,000,000 7,183,750
Riverside County. Trans. Commission Sales Tax Rev.
Series A, 5.30% 6/1/02, (AMBAC Insured) Aaa 1,000,000 1,033,750
Riverside Unified School Dist. Ctfs. of Prtn.
(Cap. Appreciation Land Acquisition Proj.)
Series B, 0% 9/1/26, (FSA Insured) Aaa 1,940,000 1,658,700
Sacramento Cogeneration Auth. Cogeneration
Proj. Rev. (Proctor & Gamble Proj.):
5.40% 7/1/98 BBB- 1,000,000 1,003,750
5.90% 7/1/02 BBB- 1,000,000 1,012,500
6.375% 7/1/10 BBB- 700,000 705,250
6.50% 7/1/14 BBB- 1,000,000 1,005,000
Sacramento Fing. Auth. Lease Rev. Rfdg.
Series A, 5.375% 11/1/14 (AMBAC Insured) Aaa 2,225,000 2,080,375
Sacramento Muni. Util. Dist. Elec. Rev.:
Rfdg. Series G, 6.50% 9/1/13 Aaa 2,100,000 2,252,250
1.76% 11/15/08 (FGIC Insured) Aaa 7,000,000 6,037,500
6.30% 8/15/18 (FGIC Insured) Aaa 3,500,000 3,583,125
San Bernardino County Ctfs. of Prtn.:
(Cap. Facs. Proj.) Series B,
6.875% 8/1/24 (Escrowed to Maturity)(c) Baa1 2,500,000 2,812,500
(Med. Ctr. Fin.) 5.50% 8/1/22 Baa1 5,500,000 4,764,375
San Diego County Wtr. Auth.
5.632% 4/25/07 (FGIC Insured) Aaa 2,500,000 2,537,500
San Diego Multi-Family Hsg. Rev.
(Island Gardens Apts. Proj.) Series B,
9.50% 10/20/20, LOC Swiss Bank Corp. AAA 1,585,000 1,634,531
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
San Diego County Reg. Trans. Commission
Sales Tax Rev. Second Sr.-Series A:
6.25% 4/1/03 (FGIC Insured) Aaa $ 4,000,000 $ 4,365,000
5% 4/1/07 (FGIC Insured) Aaa 1,500,000 1,455,000
San Francisco Bay Area Rapid Transit Dist.
Sales Tax Rev. Rfdg. 6.75% 7/1/10
(AMBAC Insured) Aaa 1,500,000 1,681,875
San Francisco City & County Gen. Oblig.:
Series 95 A & B, 6.50% 6/15/03
(FGIC Insured) Aaa 1,500,000 1,668,750
7.20% 9/1/01 A1 625,000 673,438
San Francisco City & County Public Safety
Impt. Proj. Series B, 7.20% 6/15/05 A1 1,000,000 1,086,250
San Francisco County City & County Redev.
Fing. Auth. Tax Allocation Rev. Series A:
0% 8/1/06 (FGIC Insured) Aaa 1,035,000 582,188
7.75% 9/1/06 - 9,000,000 9,618,750
0% 8/1/07 (FGIC Insured) Aaa 1,085,000 568,269
0% 8/1/08 (FGIC Insured) Aaa 1,085,000 531,650
0% 8/1/09 (FGIC Insured) Aaa 1,085,000 493,675
0% 8/1/10 (FGIC Insured) Aaa 1,085,000 459,769
San Jose Ctfs. of Prtn. Rfdg. (Communication
Ctr. Proj.) 6.50% 5/1/10, (MBIA Insured) Aaa 3,500,000 3,692,500
San Jose Redev. Agcy. Tax. Allocation (Merged
Area Redev. Proj.) 6% 8/1/07(MBIA Insured) Aaa 1,000,000 1,066,250
Santa Ana Commty. Redev. Agcy. Tax Allocation
Rev. Series B, 7.375% 9/1/09 BBB+ 5,000,000 5,193,750
Santa Clara Elec. Rev. Series B, 0% 7/1/06
(MBIA Insured) Aaa 2,080,000 1,167,400
Santa Clara County Fing. Lease Auth. Rev. (VMC
Fac. Replacement Proj. A) 7.75% 11/15/09
(AMBAC Insured) Aaa 3,725,000 4,544,500
Santa Margarita - Dana Point Auth. Rev.:
(Impt. Dists. 1-2-2A 8, Series A):
7.25% 8/1/07 (MBIA Insured) Aaa 2,200,000 2,587,750
7.25% 8/1/12 (MBIA Insured) Aaa 1,865,000 2,165,731
Santa Monica Rev. (Family YMCA Proj.) 9.50%
12/1/05, LOC Bank of Tokyo (d) - 2,750,000 2,842,813
Sequoia Hosp. Dist Rev. Rfdg.
5.375% 8/15/13 Baa1 4,170,000 3,586,200
Sequoia Hosp. Dist. Rev. 5.375% 8/15/23 Baa1 3,660,000 2,992,050
South Orange County Pub. Fin. Auth. Spl. Tax Rev.:
(Foothill Area) Series C, 7.50% 8/15/06,
(FGIC Insured) Aaa 2,000,000 2,390,000
(Sr. Lien) Series A, 7% 9/1/09, (MBIA Insured) Aaa 3,000,000 3,438,750
Southern California Pub. Pwr. Auth. Pwr. Proj. Rev.
Rfdg. (Mead Adelanto Proj.) Series A, 4.75%
7/1/16 (AMBAC Insured) Aaa 2,000,000 1,665,000
(Multiple Proj.):
6.75% 7/1/10 A 1,400,000 1,492,750
6.75% 7/1/11 A 4,000,000 4,255,000
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Southern California Pub. Pwr. Auth. Transmission
Proj. Rev. Rfdg. Series A, 5% 7/1/22
(MBIA Insured) Aaa $ 2,500,000 $ 2,156,250
Sulphur Springs Unified School Dist. Series A:
0%, 9/1/07 (MBIA Insured) Aaa 4,445,000 2,294,731
0% 9/1/09 (MBIA Insured) Aaa 2,485,000 1,118,250
Univ. of California Revs. Rfdg. (Multiple Purp.
Projs.) Series C, 4.70% 9/1/06
(AMBAC Insured) Aaa 3,000,000 2,865,000
Upland Ctfs. of Prtn.
(San Antonio Commty. Hosp.):
5.25% 1/1/08 A 1,850,000 1,715,875
5.25% 1/1/13 A 5,500,000 4,778,125
5% 1/1/18 A 2,000,000 1,615,000
West & Central Basin Fing. Auth. (West Basin
Proj.) Series A, 5% 8/1/10
(AMBAC Insured) Aaa 3,000,000 2,793,740
West Covina Ctfs. of Prtn. (Queen of the Valley
Hosp.) 6.50% 8/15/24 A 1,100,000 1,105,500
455,946,000
PUERTO RICO - 0.5%
Puerto Rico Elec. Pwr. Auth. Pwr. Rev. Rfdg.
(Wtr. Resources) Series M, 8% 7/1/08 Baa1 2,000,000 2,242,500
GUAM - 0.4%
Guam Arpt. Auth. Rev. 6.50% 10/1/23 BBB 1,700,000 1,704,250
TOTAL MUNICIPAL BONDS
(Cost $447,420,509) 459,892,750
MUNICIPAL NOTES (A) - 5.5%
CALIFORNIA - 5.5%
California Health Facs. Fing. Auth. Rev. Rfdg.
(St. Joseph Health Sys.) Series 1985 A,3.30%,
LOC Toronto-Dominion Bank, Canada,
VRDN VMIG 1 2,500,000 2,500,000
California Poll. Cont. Fing. Auth.:
(Southern California Edison Co.):
Series1986 A, 3.45% 2/28/08, VRDN VMIG 1 4,000,000 4,000,000
Series 1986 D, 3.45% 2/28/08 VMIG 1 2,400,000 2,400,000
(Shell Oil Co.) Series 1991 A, 3.30%
10/1/07 A-1+ 2,300,000 2,300,000
MUNICIPAL NOTES - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
California School Cash Reserve Program
(Authority Pool Bonds)
Series 1995 A, 4.75% 7/3/96,
LOC Industrial Bank of Japan Ltd. TRAN MIG 1 $ 3,000,000 $ 3,020,490
Los Angeles County Metropolitan Trans. Auth.
Series 1993-A, 3.35%, VRDN
(MBIA Insured) VMIG 1 5,800,000 5,800,000
Los Angeles County Trans. Commission Sales Tax
Rev. Rfdg. Series 1992 A, 3.20%
(FGIC Insured) LOC Industrial Bank of
Japan Ltd. VRDN VMIG 1 1,900,000 1,900,000
Southern California Pub. Pwr. Auth. Rev.
(Transmission Proj.) Series 1991, 3.15%
(AMBAC Insured) LOC Swiss Bank,
VRDN VMIG 1 5,100,000 5,100,000
TOTAL MUNICIPAL NOTES
(Cost $27,024,161) 27,020,490
TOTAL INVESTMENTS - 100%
(Cost $474,444,670) $ 486,913,240
FUTURES CONTRACTS
EXPIRATION UNDERLYING FACE UNREALIZED
DATE AMOUNT AT VALUE GAIN/(LOSS)
PURCHASED
3 Municipal Bond Contracts Sept. 1995 $ 343,312 $ 10,191
9 Municipal Bond Contracts Dec. 1995 1,020,375 3,106
50 30-Year Treasury Bond Contracts Dec. 1995 5,637,500 32,359
TOTAL FUTURES CONTRACTS $ 45,656
THE FACE VALUE OF FUTURES SOLD AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 1.4%
SECURITY TYPE ABBREVIATIONS
INFL - Inverse Floating Rate Notes
TRAN - Tax and 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) Security collateralized by an amount sufficient to pay interest and
principal.
(d) A portion of the security was pledged to cover margin requirements for
futures contracts. At the period end, the value of securities pledged
amounted to $1,033,750.
(e) Coupon is inversely indexed to a floating interest rate. The price will
be more volatile than the price of a comparable fixed rate security. The
rate shown is the rate at period end.
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 60.8% AAA, AA, A 72.9%
Baa 8.1% BBB 9.7%
Ba 0.0% BB 0.0%
B 0.0% B 0.0%
Caa 0.5% 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 6.1%. FMR has
determined that unrated debt securities that are lower quality account for
0.0% of the total value of investment in securities.
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%
Special Tax 17.0
Lease Revenue 13.0
Electric Revenue 12.9
Others
(individually less than 10%) 37.9
TOTAL 100.0%
INCOME TAX INFORMATION
At August 31, 1995, the aggregate cost of investment securities for income
tax purposes was $474,459,384. Net unrealized appreciation aggregated
$12,453,856, of which $19,842,581 related to appreciated investment
securities and $7,388,725 related to depreciated investment securities
At February 28, 1995, the fund had a capital loss carryforward of
approximately $2,269,893 which will expire on February 28, 2003.
At February 28, 1995, the fund elected to defer to its fiscal year ending
February 29, 1996, $5,288,702 of losses recognized during the period
November 1, 1994 to February 28, 1995.
At February 28 1995, the fund was required to defer $3,305,809 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>
AUGUST 31, 1995 (UNAUDITED)
1.ASSETS 2. 3.
4.Investment in securities, at value (cost $474,444,670) 5. $ 486,913,240
- -
See accompanying schedule
6.Receivable for investments sold 7. 2,685,615
8.Interest receivable 9. 6,760,032
10.Receivable for daily variation on futures contracts 11. 35,071
12. 13.TOTAL ASSETS 14. 496,393,958
15.LIABILITIES 16. 17.
18.Payable to custodian bank $ 86,298 19.
20.Payable for investments purchased 12,177,869 21.
22.Payable for fund shares redeemed 393,313 23.
24.Distributions payable 651,565 25.
26.Accrued management fee 158,009 27.
28.Other payables and accrued expenses 91,826 29.
30. 31.TOTAL LIABILITIES 32. 13,558,880
33.34.NET ASSETS 35. $ 482,835,078
36.Net Assets consist of: 37. 38.
39.Paid in capital 40. $ 482,640,500
41.Accumulated undistributed net realized gain (loss) 42. (12,319,648)
on investments
43.Net unrealized appreciation (depreciation) 44. 12,514,226
on investments
45.46.NET ASSETS, for 42,433,634 shares outstanding 47. $ 482,835,078
48.49.NET ASSET VALUE, offering price and redemption 50. $11.38
price per share ($482,835,078 (divided by) 42,433,634 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED AUGUST 31, 1995 (UNAUDITED)
51.52.INTEREST INCOME 53. $ 15,070,385
54.EXPENSES 55. 56.
57.Management fee $ 968,867 58.
59.Transfer agent, accounting and custodian fees 404,760 60.
and expenses
61.Non-interested trustees' compensation 2,444 62.
63.Registration fees 722 64.
65.Audit 17,846 66.
67.Legal 2,722 68.
69.Miscellaneous 1,438 70.
71. 72.TOTAL EXPENSES 73. 1,398,799
74.75.NET INTEREST INCOME 76. 13,671,586
77.REALIZED AND UNREALIZED GAIN (LOSS) 79. 80.
78.Net realized gain (loss) on:
81. Investment securities (756,275) 82.
83. Futures contracts (1,480,660) (2,236,935)
84.Change in net unrealized appreciation (depreciation) 85. 86.
on:
87. Investment securities 12,282,971 88.
89. Futures contracts 842,059 13,125,030
90.91.NET GAIN (LOSS) 92. 10,888,095
93.94.NET INCREASE (DECREASE) IN NET ASSETS 95. $ 24,559,681
RESULTING FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS YEAR
ENDED ENDED
AUGUST 31, 1995 FEBRUARY 28,
(UNAUDITED) 1995
96.INCREASE (DECREASE) IN NET ASSETS
97.Operations $ 13,671,586 $ 30,660,837
Net interest income
98. Net realized gain (loss) (2,236,935) (3,391,891)
99. Change in net unrealized appreciation (depreciation) 13,125,030 (37,131,726)
100. 24,559,681 (9,862,780)
101.NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS
102.Distributions to shareholders (13,671,586) (30,660,837)
From net interest income
103. From net realized gain - (6,907,583)
104. 105.TOTAL DISTRIBUTIONS (13,671,586) (37,568,420)
106.Share transactions 45,030,053 88,981,948
Net proceeds from sales of shares
107. Reinvestment of distributions 9,497,557 27,201,828
108. Cost of shares redeemed (59,624,311) (166,997,663)
109.110. (5,096,701) (50,813,887)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM SHARE TRANSACTIONS
111. 5,791,394 (98,245,087)
112.TOTAL INCREASE (DECREASE) IN NET ASSETS
113.NET ASSETS 114. 115.
116. Beginning of period 477,043,684 575,288,771
117. End of period $ 482,835,078 $ 477,043,684
118.OTHER INFORMATION 120. 121.
119.Shares
122. Sold 3,988,837 8,082,007
123. Issued in reinvestment of distributions 841,918 2,459,962
124. Redeemed (5,286,921) (15,215,484)
125. Net increase (decrease) (456,166) (4,673,515)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
126. SIX MONTHS YEARS ENDED FEBRUARY 28, TEN MONTHS YEARS ENDED APRIL 30,
ENDED ENDED
AUGUST 31, 199 FEBRUARY 28,
5
127. (UNAUDITED) 1995 1994C 1993 1992 1991
128.SELECTED PER-SHARE DATA
129.Net asset value,
beginning of period $ 11.120 $ 12.100 $ 12.430 $ 11.540 $ 11.300 $ 10.940
130.Income from
Investment Operations .316 .685 .719 .611 .744 .752
Net interest income
131. Net realized and
unrealized gain (loss) .260 (.830) (.060) .890 .240 .360
132. Total from
investment operations .576 (.145) .659 1.501 .984 1.112
133.Less Distributions (.316) (.685) (.719) (.611) (.744) (.752)
From net interest income
134. From net realized
gain on investments - (.150) (.270) - - -
135. Total distributions (.316) (.835) (.989) (.611) (.744) (.752)
136.Net asset value,
end of period $ 11.380 $ 11.120 $ 12.100 $ 12.430 $ 11.540 $ 11.300
137.TOTAL RETURN B 5.24% -.91% 5.41% 13.40% 8.94% 10.44%
138.RATIOS AND SUPPLEMENTAL DATA
139.Net assets, end of
period (000 omitted) $ 482,835 $ 477,044 $ 575,289 $ 586,791 $ 529,445 $ 523,590
140.Ratio of expenses
to average net assets .58%A .56% .57% .60%A .59% .58%
141.Ratio of net interest
income to average net
assets 5.65%A 6.16% 5.78% 6.17%A 6.52% 6.71%
142.Portfolio turnover
rate 43%A 29% 44% 32%A 23% 15%
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C EFFECTIVE MARCH 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INTEREST INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
FINANCIAL HIGHLIGHTS
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 to
measure performance. If Fidelity had not reimbursed certain fund expenses
during the periods shown, the past five years and life of fund total
returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED AUGUST 31, 1995 PAST 6 PAST 1 PAST 5 LIFE OF
MONTHS YEAR YEARS FUND
California Tax-Free Insured 4.48% 6.70% 45.49% 77.89%
Lehman Brothers Municipal Bond Index 5.89% 8.87% 52.01% n/a
Average California Insured
Municipal Bond Fund 4.07% 7.10% 49.38% n/a
Consumer Price Index 1.33% 2.62% 16.19% 38.75%
CUMULATIVE TOTAL RETURNS show the fund's performance over a set period - in
this case, six months, 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, the value of your investment would be
$1,050. You can compare the fund's returns to the performance of the Lehman
Brothers Municipal Bond Index - a broad gauge of the municipal bond market.
To measure how the fund's performance stacked up against its peers, you can
compare it to the average California insured municipal bond fund, which
reflects the performance of 26 California insured municipal bond funds with
similar objectives tracked by Lipper Analytical Services over the past six
months. Both benchmarks include reinvested dividends and capital gains, if
any. Comparing the fund's performance to the consumer price index (CPI)
helps show how your fund did compared to inflation. (The CPI returns begin
on the month end closest to the fund's start date.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED AUGUST 31, 1995 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
California Tax-Free Insured 6.70% 7.79% 6.64%
Lehman Brothers Municipal Bond Index 8.87% 8.74% n/a
Average California Insured
Municipal Bond Fund 7.10% 8.36% n/a
Consumer Price Index 2.62% 3.05% 3.74%
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had achieved that return
by performing at a constant rate each year.
$10,000 OVER LIFE OF FUND
Cal Free InsuredMunicipal Bond Ind
09/30/86 10000.00 10000.00
10/31/86 10123.71 10172.70
11/30/86 10256.02 10374.22
12/31/86 10317.83 10345.59
01/31/87 10603.31 10657.09
02/28/87 10604.77 10709.53
03/31/87 10513.44 10596.01
04/30/87 9640.18 10064.30
05/31/87 9517.04 10014.38
06/30/87 9640.69 10308.40
07/31/87 9744.95 10413.55
08/31/87 9799.00 10436.98
09/30/87 9216.27 10052.17
10/31/87 9475.90 10087.75
11/30/87 9702.91 10351.14
12/31/87 9855.53 10501.34
01/31/88 10443.18 10875.39
02/29/88 10585.52 10990.35
03/31/88 10158.72 10862.31
04/30/88 10215.68 10944.86
05/31/88 10227.00 10913.23
06/30/88 10391.85 11072.89
07/31/88 10423.95 11145.09
08/31/88 10491.93 11154.90
09/30/88 10696.79 11356.80
10/31/88 11005.99 11557.25
11/30/88 10859.51 11451.38
12/31/88 10999.82 11568.53
01/31/89 11198.36 11807.77
02/28/89 11060.27 11673.04
03/31/89 11063.14 11645.14
04/30/89 11360.28 11921.60
05/31/89 11588.22 12169.21
06/30/89 11709.08 12334.47
07/31/89 11830.70 12502.34
08/31/89 11663.10 12379.94
09/30/89 11677.92 12343.05
10/31/89 11761.13 12494.01
11/30/89 11946.85 12712.65
12/31/89 11963.78 12816.64
01/31/90 11852.69 12756.02
02/28/90 12041.00 12870.18
03/31/90 12032.81 12874.05
04/30/90 11831.86 12780.84
05/31/90 12136.60 13059.84
06/30/90 12251.80 13174.64
07/31/90 12443.18 13368.96
08/31/90 12238.68 13174.85
09/30/90 12279.77 13182.36
10/31/90 12475.40 13421.48
11/30/90 12762.40 13691.39
12/31/90 12803.27 13750.95
01/31/91 12895.57 13935.49
02/28/91 12920.79 14056.73
03/31/91 12921.08 14061.79
04/30/91 13094.04 14249.51
05/31/91 13228.25 14376.19
06/30/91 13201.36 14361.96
07/31/91 13390.41 14536.88
08/31/91 13525.24 14728.34
09/30/91 13718.23 14920.10
10/31/91 13911.62 15054.38
11/30/91 13925.97 15096.38
12/31/91 14206.60 15420.35
01/31/92 14265.69 15455.51
02/29/92 14263.37 15460.45
03/31/92 14280.07 15466.17
04/30/92 14421.86 15603.82
05/31/92 14609.32 15787.48
06/30/92 14865.12 16052.39
07/31/92 15355.50 16533.64
08/31/92 15067.01 16372.44
09/30/92 15167.23 16479.52
10/31/92 14817.19 16317.52
11/30/92 15241.60 16609.77
12/31/92 15507.07 16779.36
01/31/93 15684.80 16974.50
02/28/93 16510.40 17588.47
03/31/93 16288.65 17402.56
04/30/93 16454.83 17578.15
05/31/93 16533.51 17676.94
06/30/93 16851.43 17971.97
07/31/93 16807.85 17995.51
08/31/93 17235.79 18370.18
09/30/93 17447.88 18579.41
10/31/93 17462.70 18615.27
11/30/93 17209.66 18451.27
12/31/93 17650.00 18840.78
01/31/94 17870.42 19055.94
02/28/94 17267.63 18562.39
03/31/94 16270.05 17806.53
04/30/94 16363.48 17957.53
05/31/94 16507.00 18113.22
06/30/94 16299.01 18002.55
07/31/94 16659.91 18332.54
08/31/94 16688.02 18395.97
09/30/94 16343.39 18125.91
10/31/94 15933.82 17804.00
11/30/94 15521.36 17482.10
12/31/94 15842.43 17866.88
01/31/95 16471.78 18377.52
02/28/95 17043.43 18911.94
03/31/95 17175.11 19129.23
04/30/95 17147.11 19151.81
05/31/95 17768.46 19762.94
06/30/95 17421.76 19590.01
07/31/95 17552.24 19775.73
08/31/95 17806.22 20026.48
$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 August 31, 1995, the value of your
investment would have grown to $17,806 - a 78.06% 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 $20,026- a 100.26% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is no
guarantee of how it will do
tomorrow. Bond prices, for
example, generally 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)
TOTAL RETURN COMPONENTS
SIX MONT
HS
ENDED YEARS ENDED FEBRUARY 28,
AUGUST 3
1,
1995 1995 1994 1993 1992 1991
Dividend return 2.75% 5.50% 5.35% 6.43% 6.48% 6.58%
Capital appreciation
return 1.73% -6.80% -0.76% 9.32% 3.91% 0.73%
Total return 4.48% -1.30% 4.59% 15.75% 10.39% 7.31%
DIVIDEND returns and capital appreciation returns are both part of a bond
fund's total return. A dividend return reflects the actual dividends paid
by the fund. A capital appreciation return reflects both the amount paid by
the fund to shareholders as capital gain distributions and changes in the
fund's share price. Both returns assume the dividends or gains are
reinvested.
DIVIDENDS AND YIELD
<TABLE>
<CAPTION>
<S> <C> <C> <C>
PERIODS ENDED AUGUST 31, 1995 PAST PAST 6 PAST 1
MONTH MONTHS YEAR
Dividends per share 4.34(cents) 26.53(cents) 54.15(cents)
Annualized dividend rate 5.21% 5.31% 5.59%
30-day annualized yield 5.13% - -
30-day annualized tax-equivalent yield 9.01% - -
</TABLE>
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 $9.83 over
the past month, $9.94 over the past six months and $9.69 over the past
year, you can compare the fund's income over these three 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 1995 federal and state tax bracket but
does not reflect the payment of the federal alternative minimum tax, if
applicable.
FIDELITY CALIFORNIA TAX-FREE INSURED PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Jonathan Short, Portfolio Manager of Fidelity California
Tax-Free Insured Fund
Q. JONATHAN, HOW HAS THE FUND PERFORMED?
A. For the six- and 12-month periods ended August 31, 1995, the fund had
total returns of 4.48% and 6.70%, respectively. For the same six- and
12-month periods, the average California insured tax-free bond fund
returned 4.07% and 7.10%, respectively, as tracked by Lipper Analytical
Services.
Q. WHY HAS THE MUNICIPAL BOND MARKET ENJOYED A RALLY SO FAR IN 1995?
A. Several reasons. Beginning late last year, many investors began to
expect that the Federal Reserve Board would move from a tightening stance,
in which it raised interest rates in an effort to stave off possible
inflation, to an easing stance, in which it might cut interest rates. In
anticipation of the Fed lowering interest rates - which it did in July,
both the taxable and tax-free bond markets rallied. During this period the
demand for municipal bonds held fairly steady, and bumped against a
relatively limited supply of municipal bonds. For the first six months of
1995, the supply of California municipal bonds was 40% less than it was
during the same period of the previous year. The relatively healthy demand
and low supply helped the municipal market to outperform the Treasury
market during the first quarter of the year. Municipals hit a rough spot in
the spring when the public debate about various federal tax reform
proposals heated up. Some investors became worried that some federal tax
reform proposals would, if enacted, eliminate the tax-exempt status of
municipal bonds. The proposal causing the most worry was the flat tax,
under which all individuals would be taxed at a uniform rate and deductions
would be eliminated. In my view, it's unlikely that a flat tax will be
enacted before 1997, if ever. So I believe that the market has overreacted.
Despite this, municipal bonds continued to perform well through the end of
the summer.
Q. WHY DID THE FUND PERFORM BETTER THAN THE AVERAGE OVER THE PAST SIX
MONTHS?
A. The main factor was its weighting in intermediate-term bonds. The yield
curve - which measures the difference in yields between bonds of various
maturities - steepened over the past six months. In anticipation of this
steepening, I sold some longer-term bonds with maturities of 20 years or
longer and in their place bought bonds with intermediate maturities in the
10- to 20-year range. During the steepening process, intermediate bonds
generally performed better than longer-term bonds. Most of the intermediate
bonds I bought were non-callable, which means they can't be redeemed by
their issuer prior to their maturity date. As the market rallied,
non-callable bonds were in high demand among investors, and they tended to
do quite well. I continue to add non-callable bonds because they have the
potential to outperform callable bonds in both rising and declining
interest rate environments.
Q. ROUGHLY ONE-THIRD OF THE FUND'S INVESTMENTS IS IN UNINSURED BONDS. WHAT
ROLE DO THESE BONDS HAVE IN AN INSURED FUND?
A. Uninsured bonds tend to have higher yields than insured bonds. For
example, a California general obligation bond rated A by Moody's Investors
Service currently offers about 0.15% more in yield than an insured bond
with the same maturity. I try to identify uninsured bonds that offer
attractive yields relative to insured bonds, and which also have the
potential for price appreciation. For example, during the period I bought
California State Public Works at a time when the bonds were relatively
cheap. The state was having difficulty passing its budget and these bonds
were trading at below what I thought to be their fair value. Once the
budget was passed, these bonds richened, or moved closer to what I thought
was their fair value.
Q. DOES THE FUND STILL HOLD SOME ORANGE COUNTY BONDS OR BONDS RELATED TO
THE ORANGE COUNTY BANKRUPTCY?
A. Yes, but I want to remind shareholders that during the period, the fund
didn't hold any investments in uninsured securities issued directly by
Orange County. The fund did, however, have about a 5% stake in bonds issued
by entities that were participants in the county's pool. Recently, the
prices of these bonds have risen and are at or near the level they were
prior to Orange County declaring bankruptcy this past December. One bond
affected by the Orange County situation, the Orange County Development
Agency, Santa Ana Heights Project. This issue made up less than 1% of the
fund's investments at the end of the period. This issue's price has
improved over the past six months as the Development Agency has met its two
scheduled debt service payments on time.
Q. WHAT'S AHEAD FOR THE FUND?
A. In terms of strategy, I'll most likely continue to buy more
intermediate-maturity securities. I'll also continue to look for uninsured
bonds that provide the opportunity to add yield to the fund and also offer
the potential for price appreciation. Of course the fund's performance will
be closely tied to that of the municipal market. Further public debate
about federal tax reform proposals could continue to cause some volatility
in the municipal market. The past six months has been an extremely strong
period for the municipal market, and we could see a period in which
municipals pause and trade in a more narrow range. While I'm optimistic
about the market's prospects from a supply and demand standpoint, interest
rates may not continue to drop as much as they have in the past six months.
So I believe it's likely that the fund's total return will be less
dependent on bond prices rising and more dependent on income.
FUND FACTS
GOAL: high current tax-free
income for California
residents
START DATE: September 18,
1986
SIZE: as of August 31, 1995,
more than $213 million
MANAGER: Jonathan Short,
since March 1995; manager,
Fidelity California Tax-Free
High Yield Fund, Spartan
California Municipal High
Yield, and Spartan California
Intermediate Municipal
Portfolios, since March 1995;
Spartan Arizona Municipal
and
Fidelity Minnesota Tax-Free
Portfolios, as of October 1,
1995; joined Fidelity in 1990
(checkmark)
JONATHAN SHORT ON HIS
OUTLOOK FOR THE CALIFORNIA
ECONOMY:
"The California economy
appears to have hit bottom,
and I expect the state to
experience moderate
economic growth going
forward. However, I do not
expect this growth to be
robust. Employment is
starting to grow, primarily as a
result of the expanding
entertainment and service
sectors. But, job growth will
continue to be hindered by the
ongoing downsizing in the
defense industry. Although
new construction activity
remains low and the housing
sector has yet to show many
signs of a rebound, home
prices appear to be
stabilizing. This price
stabilization should add some
support to the housing market
and could eventually provide
a boost for the economy. A
positive sign for the economy
has been the increase in retail
sales, which have shown
growth over the past two
years and presently look
reasonably healthy. In
summary, I am cautiously
optimistic since I expect the
state's economy to show
gradual improvement."
FIDELITY CALIFORNIA TAX-FREE INSURED PORTFOLIO
INVESTMENT CHANGES
TOP FIVE SECTORS AS OF AUGUST 31, 1995
% OF FUND'S % OF FUND'S INVESTMENT
INVESTMENTS S
IN THESE SECTORS
6 MONTHS AGO
Special Tax 22.6 26.9
Lease Revenue 18.5 24.2
Water & Sewer 12.2 5.4
Electric Revenue 11.7 11.4
Health Care 11.3 12.5
AVERAGE YEARS TO MATURITY AS OF AUGUST 31, 1995
6 MONTHS AGO
Years 17.3 18.5
AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY DOLLAR
AMOUNT.
DURATION AS OF AUGUST 31, 1995
6 MONTHS AGO
Years 8.3 9.1
DURATION SHOWS HOW MUCH A BOND FUND'S PRICE FLUCTUATES WITH CHANGES IN
COMPARABLE INTEREST RATES. IF RATES RISE 1%, FOR EXAMPLE, A FUND WITH A
FIVE-YEAR DURATION IS LIKELY TO LOSE ABOUT 5% OF ITS VALUE. OTHER FACTORS
ALSO CAN INFLUENCE A BOND FUND'S PERFORMANCE AND SHARE PRICE. ACCORDINGLY,
A BOND FUND'S ACTUAL PERFORMANCE MAY DIFFER FROM THIS EXAMPLE.
QUALITY DIVERSIFICATION (MOODY'S RATINGS)
AS OF AUGUST 31, 1995 AS OF FEBRUARY 28, 1995
Aaa 69.3%
Aa, A 21.6%
Baa 4.4%
Caa 0.6%
Non-rated 0.5%
Short-term and other
investments 3.6%
Aaa 67.8%
Aa, A 18.3%
Baa 6.3%
Caa 0.5%
Non-rated 0.5%
Short-term and other
investments 6.6%
Row: 1, Col: 1, Value: 69.3
Row: 1, Col: 2, Value: 21.6
Row: 1, Col: 3, Value: 5.4
Row: 1, Col: 4, Value: 1.6
Row: 1, Col: 5, Value: 1.5
Row: 1, Col: 6, Value: 4.6
Row: 1, Col: 1, Value: 67.8
Row: 1, Col: 2, Value: 18.3
Row: 1, Col: 3, Value: 6.3
Row: 1, Col: 4, Value: 1.5
Row: 1, Col: 5, Value: 1.5
Row: 1, Col: 6, Value: 6.6
SHOWN AS A PERCENTAGE OF THE FUND'S INVESTMENTS. WHERE MOODY'S RATINGS ARE
NOT AVAILABLE, WE HAVE USED S&P RATINGS.
FIDELITY CALIFORNIA TAX-FREE INSURED PORTFOLIO
INVESTMENTS AUGUST 31, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investments
MUNICIPAL BONDS - 96.4%
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
CALIFORNIA - 96.4%
Alameda County Ctfs. of Prtn. Rfdg. (Santa Rita
Jail Proj.) 5.375% 6/1/09 (MBIA Insured) Aaa $ 2,500,000 $ 2,471,875
Anaheim Pub. Fin. Auth. Tax Allocation Rev.
6.45% 12/28/18 (MBIA Insured) Aaa 2,000,000 2,092,500
Bay Area Gov't. Assoc. Rev. (Muni. Fing. Pool)
Series A, 8.05% 9/1/10 A 1,470,000 1,470,000
Burbank Redev. Agcy. Tax Allocation
(City Ctr. Redev. Proj.) Series A,
5% 12/1/15 (CGIC Insured) Aaa 4,000,000 3,475,000
California Edl. Facs. Auth. Rev.
(Pooled Facs. Prog.) Series 1987,
7.625% 11/1/12 (MBIA Insured) Aaa 1,000,000 1,075,000
California Gen. Oblig.
6.50% 3/1/02 (AMBAC Insured) Aaa 2,000,000 2,200,000
California Gen. Oblig. Unltd. Tax 6% 9/1/03 A1 1,000,000 1,066,250
California Hsg. Fin. Agcy. Rev. (Home Mtg.):
Series 1983 A, 0% 2/1/15 Aa 8,187,000 1,207,583
Series 1983 B, 0% 8/1/15 Aa 170,000 22,738
California Health Facs. Fing. Auth. Rev.:
(Children's Hosp. - San Diego)
6.80% 7/1/02 (MBIA Insured) Aaa 1,855,000 2,054,413
(Children's Hosp. - San Francisco)
Series A, 7.50% 10/1/20 (MBIA Insured) Aaa 1,650,000 1,823,250
California Pub. Cap. Impt. Fing. Auth. Rev.
(Pooled Proj.) Series B, 8.10% 3/1/18
(MBIA Insured) Aaa 2,875,000 3,126,563
California Pub. Works Board Lease Rev.:
Rfdg. (Dept. Corrections State Prisons)
Series A, 5% 12/1/19 (AMBAC Insured) Aaa 2,000,000 1,742,500
(Dept. Correction State Prisons - Madera)
Series E, 6% 6/1/07 A 1,500,000 1,545,000
(University Projs.) Series B, 6.40% 12/1/09 A1 1,700,000 1,761,625
California Statewide Commty. Dev. Auth..
Ctfs. of Prtn.:
(Catholic Health Care West)
5.616% 7/1/13 (MBIA Insured) Aaa 2,000,000 1,932,500
(Cedars Hosp.)
5.10% 11/1/07 (MBIA Insured) Aaa 1,985,000 1,925,450
(Childrens Hosp.) 6% 6/1/11
(MBIA Insured) Aaa 1,700,000 1,727,625
(Sisters Charity Leavenworth Sys.):
4.875% 12/1/10 Aa 1,000,000 870,000
5% 12/1/23 Aa 1,000,000 835,000
(St. Joseph Health Sys.) 5.50%7/1/23 Aa 1,000,000 905,000
California Wtr. Dept. Res.:
Rfdg. (Cent. Valley Proj. Rev.) Series L,
5.70% 12/1/16 Aa 6,800,000 6,519,500
Series I, 6.95% 12/1/25 Aaa 500,000 562,500
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Carson Redev. Agcy. Redev. Proj. Area #1
Tax Allocation Rfdg. 6.375% 10/1/12 Baa1 $ 1,000,000 $ 981,250
Castaic Lake Wtr. Agcy. Ctfs. of Prtn. Rfdg.
(Wtr. Sys. Impt. Proj.) Series A:
7% 8/1/12 (MBIA Insured) Aaa 1,000,000 1,135,000
7% 8/1/13 (MBIA Insured) Aaa 1,580,000 1,791,325
Central California Joint Pwrs. Health Fing. Auth.
Ctfs. of Prtn. (Commty. Hosp. of Central
California Proj.) 5.25% 2/1/13 A 2,000,000 1,735,000
Chino Basin Reg. Fing. Auth. Rev. (Mun. Wtr. Dist.
Swr. Sys. Proj.) 7.0% 8/1/06
(AMBAC Insured) Aaa 1,145,000 1,325,338
Desert Hosp. Dist. Rev. Ctfs. of Prtn.
6.392% 7/28/20 (CGIC Insured) Aaa 4,000,000 4,075,000
East Bay Muni. Util. Dist. Wtr. Sys. Rev. Rfdg.
5.75% 6/1/04 (MBIA Insured) Aaa 3,000,000 3,191,250
East Bay Reg. Park Dist. Series C, 6.50%
9/1/01, (FGIC Insured) Aaa 660,000 726,825
Eureka Unified School Dist. Ctfs. of Prtn.
(Cap. Appreciation):
Series A, 0% 9/1/27 (FSA Insured) Aaa 660,000 647,625
Series B, 0% 9/1/27 (FSA Insured) Aaa 1,555,000 1,393,669
Fontana Redev. Agcy. Tax Allocation Rfdg.
(Yurupa Hills):
Series 1992 A, 7.10% 10/1/23 BBB 1,000,000 1,016,250
Series A, 7% 10/1/14 BBB+ 2,300,000 2,343,125
Foothill De Anza Commty. College Ctfs. of Prtn.
5.25% 9/1/21, (Connie Lee Insured) AAA 1,175,000 1,035,469
Grossmont Hosp. Dist. Rev. Series A, 8%
11/15/17 (MBIA Insured)
(Pre-Refunded to 11/15/97 @ 102)(c) Aaa 1,500,000 1,651,875
Irvine Ranch Wtr. Dist. Joint Pwr. Agcy. Local
Pool Rev.:
7.875% 2/15/23 A+ 3,850,000 4,052,125
8.25% 8/15/23 A+ 3,000,000 3,221,250
Kings River Conservation Dist. 6.375% 1/1/12 Aa 1,000,000 1,028,750
Lemon Grove Commty. Dev. Agcy. Tax Allocation
Rev. (Lemon Grove Redev. Proj.)
6.90% 8/1/20 Baa 1,000,000 1,016,250
Local Gov't. Fin. Auth. Rev. (Oakland Cent.
Dist.) 0% 9/1/09, (MBIA Insured) Aaa 3,565,000 1,613,163
Los Angeles Convention & Exhibition Ctr. Auth.
Ctfs. of Prtn. Rfdg.
Series A, 7.375% 8/15/18
(Pre-Refunded to 8/15/99 @101.50)(c) Aaa 1,500,000 1,691,250
Los Angeles County Ctfs. of Prtn.:
(Disney Parking Proj.)
0% 3/1/15 Baa1 1,000,000 257,500
(Disney Parking Proj.) (Cap. Appreciation)
0% 3/1/10 Baa1 2,000,000 755,000
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Los Angeles County Metropolitan Trans. Auth.
Sales Tax Rev:.
Rfdg. (Prop. A) Series A,
5% 7/1/21 (FGIC Insured) Aaa $ 2,100,000 $ 1,816,500
(Prop. C) Series A 5.90% 7/1/03
(AMBAC Insured) Aaa 1,750,000 1,881,250
Los Angeles County Pub. Wks. Fing.
Auth. Lease Rev. (Multi. Cap. Facs. Proj. IV)
4.75% 12/1/13 (MBIA Insured) Aaa 5,000,000 4,293,750
Los Angeles Dept. of Wtr. & Pwr. Elec. Plant
Rev. 6% 11/15/03 (MBIA Insured) Aa 1,200,000 1,299,000
Los Angeles Wastewtr. Sys. Rev. Rfdg. Series A,
9% 6/1/00 (MBIA Insured) Aaa 500,000 595,000
M-S-R Pub. Pwr. Agcy. Rev. (San Juan Proj.)
Series D, 6.75% 7/1/20 (MBIA Insured) Aaa 2,500,000 2,762,500
Mesa Consolidated Wtr. Dist. Ctfs. of Prtn.
(Cap. Impt. Phase II) 7.625% 3/15/08
(AMBAC Insured) Aaa 1,000,000 1,097,500
Metropolitan Wtr. Dist. Southern California
Gen. Oblig. 5% 3/1/02 Aaa 1,250,000 1,281,250
Metropolitan Wtr. Dist. Southern California
Crossover Rfdg. Series A1, 5.50% 3/1/10 Aaa 1,000,000 990,000
Metropolitan Wtr. Dist. Southern California
Wtrwks. Rev. 5.75% 8/12/18 Aa 4,000,000 3,845,000
Modesto Ctfs. of Prtn. (Commty. Ctr. Refing.
Proj.) Series A, 5% 11/1/23
(AMBAC Insured) Aaa 2,500,000 2,150,000
Modesto Irrigation Dist. Ctfs. of Prtn. Rfdg. &
Cap. Impts. Series A, 0% 10/1/09
(MBIA Insured) Aaa 2,270,000 1,021,500
Moreno Valley Unified School Dist. Ctfs. of Prtn.
(Land Acquisition) 0% 9/1/11 (FSA Insured) Aaa 2,350,000 1,974,000
Northern California Pwr. Agcy. Pub. Pwr. Rev.:
Crossover Rfdg. (Geothermal Proj. #3)
Series A, 5.50% 7/1/05 (AMBAC Insured) Aaa 500,000 519,375
Rfdg. (Geothermal Proj.) Series A, 5.80%
7/1/09 (AMBAC Insured) Aaa 1,085,000 1,112,125
7.50% 7/1/23 (AMBAC Insured)
(Pre-Refunded to 7/1/21 @ 100)(c) Aaa 1,300,000 1,561,625
Norwalk Redev. Agcy. Tax Allocation
(Norwalk Redev. Proj. #1) 7.15% 12/1/15 - 1,000,000 1,037,500
Oakland Redev. Agcy. Central Dist. Redev.
(Sub. Tax Allocation): 5.00% 9/1/13
(MBIA Insured) Aaa 2,960,000 2,652,900
Orange County Dev. Agcy. Tax Allocation
(Santa Ana Heights Proj.) 6.125% 9/1/23 Caa 1,500,000 1,310,625
Palm Desert Fing. Auth. Tax Allocation
6.3675% 4/1/22 (MBIA Insured) Aaa 3,500,000 3,578,750
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
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 $ 1,115,000
Pleasanton Joint Pwrs. Fing. Auth. Reassessment
Series A, 6% 9/2/05 Baa 1,975,000 2,058,938
Rancho Mirage Joint Pwrs. Fing. Auth. Ctfs. of
Prtn. (Eisenhower Mem. Hosp.) 7% 3/1/22 A 1,000,000 1,031,250
Redding Elec. Sys. Rev. Ctfs. of Prtn.
(Cap. Appreciation) Series A:
0% 6/1/05 (FGIC Insured) Aaa 2,000,000 1,207,500
0% 6/1/06 (FGIC Insured) Aaa 1,730,000 975,288
0% 6/1/07 (FGIC Insured) Aaa 1,890,000 994,613
0% 6/1/08 (FGIC Insured) Aaa 1,300,000 638,625
Redondo Beach Redev. Agcy. Tax Allocation
(South Bay Ctr.) 8.625% 5/1/14,
(FGIC Insured) Aaa 1,000,000 1,072,500
Richmond Redev. Agcy. Tax Allocation
(Harbour Redev. Proj.) 7% 7/1/09
(Cap. Guaranty Insured) Aaa 1,750,000 1,953,438
Riverside County Asset Leasing Corp.
Leasehold Rev. (Riverside County Hosp. Proj.)
Series A:
6.375% 6/1/09 A 2,000,000 2,035,000
6.50% 6/1/12 A 5,500,000 5,644,375
Riverside County Trans. Commission Sales Tax
Rev. Series A:
5.30% 6/1/02 (AMBAC Insured) Aaa 500,000 516,875
5.75% 6/1/09 (AMBAC Insured) Aaa 2,000,000 2,057,500
Riverside Unified School Dist. Ctfs. of Prtn.
(Cap. Appreciation Land Acquisition Proj.)
Series B, 0% 9/1/26 (FSA Insured) Aaa 1,710,000 1,462,050
Sacramento Fing. Auth. Gas Tax Rev.
Series A, 6% 10/1/07 (AMBAC Insured) Aaa 1,290,000 1,383,525
Sacramento Fing. Auth. Lease Rev. Rfdg.
Series A, 5.375% 11/1/14
(AMBAC Insured) Aaa 6,500,000 6,077,500
Sacramento Muni. Util. Dist. Elec. Rev.:
Rfdg. Series G, 6.5%, 9/1/13 (d) Aaa 7,000,000 7,507,500
1.76% 11/15/08 (FGIC Insured) Aaa 3,700,000 3,191,250
6.30% 8/15/18 (FGIC Insured) Aaa 2,000,000 2,047,500
San Bernardino Redev. Agcy. Tax Allocation
Rfdg. (Southeast Ind. Park) 7.40% 3/1/14
(AMBAC Insured) Aaa 2,100,000 2,268,000
San Diego County Reg. Trans. Commission
(Sales Tax Rev.) Second Sr. Series A:
6.25% 4/1/03 (FGIC Insured) Aaa 4,000,000 4,365,000
5% 4/1/07 (FGIC Insured) Aaa 1,000,000 970,000
San Francisco Arpt. 6% 5/1/13 (FGIC Insured) Aaa 1,075,000 1,075,000
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
San Francisco City & County Redev. Fing. Tax
Allocation Rfdg. (San Francisco Redev. Proj. B)
5.25% 8/1/17 (FGIC Insured) Aaa $ 1,500,000 $ 1,357,500
San Francisco City & County Swr. Rev.
Series B, 0% 10/1/07 (FGIC Insured) Aaa 4,770,000 2,462,513
San Jacinto Unified School Dist. Series B, 0%
9/1/26 (FSA Insured) Aaa 1,585,000 1,509,713
San Joaquin Ctfs. of Prtn.:
Rfdg. (Cap. Facs. Proj.) 5% 11/15/09
(MBIA Insured) Aaa 1,000,000 937,500
(Cap. Facs. Proj.)
5% 11/15/10 (MBIA Insured) Aaa 1,110,000 1,026,750
(Gen. Hosp. Proj.) 6.625% 9/1/20 A 2,500,000 2,481,250
San Jose Ctfs. of Prtn. Rfdg. (Communication
Ctr. Proj.) 6.50% 5/1/10, (MBIA Insured) Aaa 1,500,000 1,582,500
San Jose Redev. Agcy. Tax Allocation
(Merged Area Redev. Proj.) 6% 8/1/15
(MBIA Insured) Aaa 3,000,000 3,037,500
Santa Ana Commty. Redev. Agcy. Tax Allocation
(South Main St. Redev.)
5.25% 9/1/13 (MBIA Insured) Aaa 3,000,000 2,771,250
Sequoia Hosp. Dist. Rev. 5.375% 8/15/13 Baa1 1,000,000 860,000
South Orange County Pub. Fin. Auth. Spl. Tax Rev.:
(Foothill Area) Series C, 7.50%
8/15/07 (FGIC Insured) Aaa 2,290,000 2,733,688
(Sr. Lien) Series A, 7% 9/1/09
(MBIA Insured) Aaa 2,000,000 2,292,500
Sulpher Springs Unified School Dist. Series A,
0% 9/1/08, (MBIA Insured) Aaa 2,000,000 962,500
Tahoe-Truckee Joint Union School Dist.
(Cap. Appreciation) Series A, 0% 9/1/10 Aaa 6,625,000 2,790,781
Torrance Hosp. Rev. (Little Co. of Mary Hosp.)
6.875% 7/1/15 A 1,415,000 1,462,756
Univ. of California Rev. Rfdg. Series C, 5%
9/1/23 (AMBAC Insured) Aaa 2,750,000 2,365,000
Upland Ctfs. of Prtn. (San Antonio Commty.
Hosp.) 5% 1/1/18 A 1,000,000 807,500
Walnut Creek Ctfs. of Prtn. Rfdg. (John Muir
Med. Ctr.) 5%, 2/15/16 (MBIA Insured) Aaa 3,250,000 2,819,369
West & Central Basin Fing. Auth.
(West Basin Proj.) Series A, 5% 8/1/10
(AMBAC Insured) Aaa 2,000,000 1,862,500
West Covina Ctfs. of Prtn. (Queen of the Valley
Hosp.) 6.50% 8/15/24 A 1,000,000 1,005,000
TOTAL MUNICIPAL BONDS
(Cost $202,318,546) 204,652,608
MUNICIPAL NOTES (A) - 3.6%
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
CALIFORNIA - 3.6%
Los Angeles County Metropolitan Trans. Auth.
Series 1993-A, 3.35%,
(MBIA Insured) VRDN VMIG 1 $ 2,000,000 $ 2,000,000
Los Angeles County Trans. Commission Sales Tax
Rev. Rfdg. Series 1992 A, 3.20%
(FGIC Insured) BPA Industrial Bank of
Japan Ltd. VRDN VMIG 1 2,100,000 2,100,000
Southern California Pub. Pwr. Auth. Rev.
(Transmission Proj.) Series 1991, 3.15%
(AMBAC Insured) LOC Swiss Bank,
VRDN VMIG 1 1,500,000 1,500,000
Ventura County TRAN 4.50% 7/2/96 MIG 1 2,000,000 2,007,740
TOTAL MUNICIPAL NOTES
(Cost $7,611,740) 7,607,740
TOTAL INVESTMENTS - 100%
(Cost $209,930,286) $ 212,260,348
FUTURES CONTRACTS
EXPIRATION UNDERLYING FACE UNREALIZED
DATE AMOUNT AT VALUE GAIN/(LOSS)
PURCHASED
10 Municipal Bond Contracts Sept. 1995 $ 1,144,375 $ 34,909
27 Municipal Bond Contracts Dec. 1995 3,061,125 9,318
THE FACE VALUE OF FUTURES SOLD AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 2.0%
TOTAL FUTURES CONTRACTS $ 44,227
SECURITY TYPE ABBREVIATIONS
TRAN - Tax and 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) Security collateralized by an amount sufficient to pay interest and
principal.
(d) A portion of the security was pledged to cover margin requirements for
futures contracts. At the period end, the value of securities pledged
amounted to $3,217,500.
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 86.0% AAA, AA, A 88.5%
Baa 2.8% BBB 3.1%
Ba 0.0% BB 0.0%
B 0.0% B 0.0%
Caa 0.6% 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 0.5%. FMR has
determined that unrated debt securities that are lower quality account for
0.0% of the total value of investment in securities.
The distribution of municipal securities by revenue source, as a percentage
of total value of investment in securities, is as follows:
Special Tax 22.6%
Lease Revenue 18.5
Water & Sewer 12.2
Electric Revenue 11.7
Health Care 11.3
Others
(individually less than 10%) 23.7
TOTAL 100.0%
INCOME TAX INFORMATION
At August 31, 1995, the aggregate cost of investment securities for income
tax purposes was $209,930,286. Net unrealized appreciation aggregated
$2,330,062, of which $6,370,360 related to appreciated investment
securities and $4,040,298 related to depreciated investment securities.
At February 28, 1995, the fund had a capital loss carryforward of
approximately $1,010,908 which will expire on February 28, 2003.
At February 28, 1995, the fund elected to defer to its fiscal year ending
February 29, 1996, $5,226,675 of losses recognized during the period
November 1, 1994 to February 28, 1995.
At February 28 1995, the fund was required to defer $145,506 of losses on
futures contracts and options.
FIDELITY CALIFORNIA TAX-FREE INSURED PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AUGUST 31, 1995 (UNAUDITED)
143.ASSETS 144. 145.
146.Investment in securities, at value (cost 147. $ 212,260,348
$209,930,286) -
See accompanying schedule
148.Cash 149. 220,082
150.Receivable for investments sold 151. 2,914,817
152.Interest receivable 153. 2,887,677
154.Receivable for daily variation on futures contracts 155. 16,555
156. 157.TOTAL ASSETS 158. 218,299,479
159.LIABILITIES 160. 161.
162.Payable for investments purchased $ 4,720,579 163.
164.Distributions payable 162,703 165.
166.Accrued management fee 70,079 167.
168.Other payables and accrued expenses 48,532 169.
170. 171.TOTAL LIABILITIES 172. 5,001,893
173.174.NET ASSETS 175. $ 213,297,586
176.Net Assets consist of: 177. 178.
179.Paid in capital 180. $ 220,062,597
181.Accumulated undistributed net realized gain (loss) 182. (9,139,300)
on investments
183.Net unrealized appreciation (depreciation) 184. 2,374,289
on investments
185.186.NET ASSETS, for 21,308,054 shares 187. $ 213,297,586
outstanding
188.189.NET ASSET VALUE, offering price and 190. $10.01
redemption price per share ($213,297,586 (divided by)
21,308,054 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED AUGUST 31, 1995 (UNAUDITED)
191.192.INTEREST INCOME 193. $ 6,256,554
194.EXPENSES 195. 196.
197.Management fee $ 428,908 198.
199.Transfer agent, accounting and custodian fees 187,474 200.
and expenses
201.Non-interested trustees' compensation 1,129 202.
203.Registration fees 668 204.
205.Audit 17,505 206.
207.Legal 1,210 208.
209.Miscellaneous 785 210.
211. 212.TOTAL EXPENSES 213. 637,679
214.215.NET INTEREST INCOME 216. 5,618,875
217.REALIZED AND UNREALIZED GAIN (LOSS) 219. 220.
218.Net realized gain (loss) on:
221. Investment securities (2,270,220) 222.
223. Futures contracts (1,268,460) (3,538,680)
224.Change in net unrealized appreciation 225. 226.
(depreciation) on:
227. Investment securities 6,466,537 228.
229. Futures contracts 826,696 7,293,233
230.231.NET GAIN (LOSS) 232. 3,754,553
233.234.NET INCREASE (DECREASE) IN NET ASSETS 235. $ 9,373,428
RESULTING FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS YEAR
ENDED ENDED
AUGUST 31, 1995 FEBRUARY 28,
(UNAUDITED) 1995
236.INCREASE (DECREASE) IN NET ASSETS
237.Operations $ 5,618,875 $ 13,165,699
Net interest income
238. Net realized gain (loss) (3,538,680) (4,982,204)
239. Change in net unrealized appreciation 7,293,233 (15,911,365)
(depreciation)
240. 9,373,428 (7,727,870)
241.NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS
242.Distributions to shareholders (5,618,875) (13,165,699)
From net interest income
243. From net realized gain - (4,232,425)
244. 245.TOTAL DISTRIBUTIONS (5,618,875) (17,398,124)
246.Share transactions 40,016,976 89,403,793
Net proceeds from sales of shares
247. Reinvestment of distributions 4,100,375 13,115,054
248. Cost of shares redeemed (51,480,409) (152,246,558)
249.250. (7,363,058) (49,727,711)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM SHARE TRANSACTIONS
251. (3,608,505) (74,853,705)
252.TOTAL INCREASE (DECREASE) IN NET ASSETS
253.NET ASSETS 254. 255.
256. Beginning of period 216,906,091 291,759,796
257. End of period $ 213,297,586 $ 216,906,091
258.OTHER INFORMATION 260. 261.
259.Shares
262. Sold 4,019,305 9,161,615
263. Issued in reinvestment of distributions 412,816 1,344,750
264. Redeemed (5,175,853) (15,615,632)
265. Net increase (decrease) (743,732) (5,109,267)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
266. SIX MONTHS YEARS ENDED FEBRUARY 28, TEN MONTHS YEARS ENDED APRIL 30,
ENDED ENDED
AUGUST 31, 199 FEBRUARY 28,
5
267. (UNAUDITED) 1995 1994C 1993 1992 1991
268.SELECTED PER-SHARE DATA
269.Net asset value,
beginning of period $ 9.840 $ 10.740 $ 11.030 $ 10.100 $ 9.740 $ 9.370
270.Income from
Investment Operations .265 .558 .589 .492 .603 .605
Net interest income
271. Net realized and
unrealized gain (loss) .170 (.730) (.090) .930 .360 .370
272. Total from
investment operations .435 (.172) .499 1.422 .963 .975
273.Less Distributions (.265) (.558) (.589) (.492) (.603) (.605)
From net interest income
274. From net realized
gain on investments - (.170) (.200) - - -
275. Total distributions (.265) (.728) (.789) (.492) (.603) (.605)
276.Net asset value,
end of period $ 10.010 $ 9.840 $ 10.740 $ 11.030 $ 10.100 $ 9.740
277.TOTAL RETURN B 4.48% -1.30% 4.59% 14.48% 10.14% 10.67%
278.RATIOS AND SUPPLEMENTAL DATA
279.Net assets, end of
period (000 omitted) $ 213,298 $ 216,906 $ 291,760 $ 274,872 $ 177,763 $ 113,711
280.Ratio of expenses
to average net assets .60%A .59% .48% .63%A .66% .72%
281.Ratio of expenses to
average net assets before .60%A .59% .60% .63%A .66% .72%
expense reductions
282.Ratio of net interest
income to average net
assets 5.25%A 5.71% 5.31% 5.72%A 6.06% 6.30%
283.Portfolio turnover
rate 47%A 32% 60% 27%A 19% 14%
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C EFFECTIVE MARCH 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INTEREST INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
FINANCIAL HIGHLIGHTS
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, the past 10 years total
returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED AUGUST 31, 1995 PAST 6 PAST 1 PAST 5 PAST 10
MONTHS YEAR YEARS YEARS
California Tax-Free Money Market 1.67% 3.22% 15.78% 46.80%
Average California Tax-Free
Money Market Fund 1.67% 3.18% 15.84% n/a
Consumer Price Index 1.33% 2.62% 16.19% 41.57%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years or ten
years. For example, if you invested $1,000 in a fund that had a 5% return
over the past year, the value of your investment would be $1,050. To
measure how the fund's performance stacked up against its peers, you can
compare it to the average California tax-free money market fund, which
reflects the performance of 44 California tax-free money market funds with
similar objectives tracked by IBC/Donoghue over the past six months.
Comparing the fund's performance to the consumer price index (CPI) helps
show how your fund did compared to inflation. (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 AUGUST 31, 1995 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
California Tax-Free Money Market 3.22% 2.97% 3.91%
Average California Tax-Free
Money Market Fund 3.18% 2.98% n/a
Consumer Price Index 2.62% 3.05% 3.54%
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had achieved that return
by performing at a constant rate each year.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YIELDS
8/29/94 11/28/94 2/27/95 5/29/95 8/28/95
California Tax-Free 2.58% 3.10% 3.45% 3.53% 3.08%
Money Market
Average California Tax-Free 2.56% 3.07% 3.45% 3.50% 3.11%
Money Market Fund
California Tax-Free 4.53% 5.44% 6.06% 6.20% 5.41%
Money Market Tax-equivalen
t
</TABLE>
Row: 1, Col: 1, Value: 2.58
Row: 1, Col: 2, Value: 2.56
Row: 2, Col: 1, Value: 3.1
Row: 2, Col: 2, Value: 3.07
Row: 3, Col: 1, Value: 3.45
Row: 3, Col: 2, Value: 3.45
Row: 4, Col: 1, Value: 3.53
Row: 4, Col: 2, Value: 3.5
Row: 5, Col: 1, Value: 3.08
Row: 5, Col: 2, Value: 3.11
4% -
3% -
2% -
1% -
0%
California
Tax-Free
Money Market
Average California
Tax-Free Money
Market Fund
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
seven-day yield at quarterly intervals over the past year. You can compare
these yields to the average California tax-free money market fund. Or you
can look at the fund's tax-equivalent yield, which is based on a combined
effective 1995 federal and state income tax rate of 43.04%. Figures for the
average California tax-free money market fund are from IBC/Donoghue. A
portion of the fund's income may be subject to the alternative minimum tax.
A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS WILL VARY, AND 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
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Deborah Watson,
Portfolio Manager of Fidelity California Tax-Free Money Market Portfolio
Q. DEBORAH, WHAT KIND OF AN INVESTMENT CLIMATE HAVE YOU BEEN OPERATING IN
FOR THE PAST SIX MONTHS?
A. Last February, before the period began, the Federal Reserve raised the
federal funds rate - the interest rate banks charge each other for
overnight loans - one-half percentage point. It was the seventh increase in
just over a year and brought the federal funds rate to 6%. But even as the
Fed was taking its final step in a policy designed to slow down the pace of
economic growth and prevent an outbreak of inflation, there were signs of
an economic slowdown. During the first quarter of 1995, the gross domestic
product expanded at an annual rate of 2.7%, well below the 5.1% expansion
rate during the fourth quarter of 1994. The slowdown continued throughout
the spring and early summer, with second-quarter growth registering a mild
1.1%, well below the Fed's target rate of 2.5%. In July, fearful that the
economy was losing too much steam too fast, the Fed intervened again, this
time cutting the federal funds rate one-quarter percentage point in hopes
of stimulating economic activity.
Q. WHAT WAS YOUR STRATEGY DURING THE PERIOD?
A. Throughout the spring and early summer, the economy was sending out
contradictory signals, with signs of strength alternating with signs of
weakness. During this time, I felt the Fed could lower interest rates;
therefore I chose to remain flexible, maintaining an average maturity of
between 20 and 25 days. Then, as we entered the summer borrowing season, I
took advantage of an abundance of new issues to add longer-term securities
at attractive rates. By July, the Fund's average maturity was approaching
70 days, and has stayed close to that ever since.
Q. DID THE FUND SUFFER LOSSES TIED TO THE ORANGE COUNTY BANKRUPTCY LAST
YEAR?
A. No. The fund has no direct exposure to Orange County or to any of the
municipalities who participated in the Orange County investment pool. That
was true at the time of the bankruptcy filing and it is still true today.
At no time was the fund's stable $1 share price threatened. Since the
bankruptcy filing, we've maintained our already strict credit standards and
have in some cases required credit enhancement before investing.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on August 31, 1995 was 3.04%, compared to
3.44% six months ago. The latest yield was the equivalent of a 5.34%
taxable yield for California investors in the 43.04% combined state and
federal income tax bracket. The fund's total return from February 28, 1995,
through August 31, 1995, was 1.67%, compared to 1.67% for the average
California tax-free money market fund, according to IBC/Donoghue.
Q. WHAT'S THE OUTLOOK?
A. Going forward, I think it's highly unlikely that the Fed will consider
raising interest rates again anytime soon. Since pockets of economic
weakness continue to materialize, the Fed may decide, however, to stand pat
until Congress shows its hand in the next round of budget deliberations. I
therefore expect stable to lower interest rates at least for the next six
months. As a result, I'll aim to keep the fund's average maturity somewhat
aggressive, in the 60- 70-day range.
FUND FACTS
GOAL: high current tax-free
income for California
residents while maintaining a
stable $1 share price
START DATE: July 7, 1984
SIZE: as of August 31,1995,
more than $754 million
MANAGER: Deborah Watson,
since July 1988; manager,
Spartan California Municipal
Money Market Portfolio, since
1989; Spartan Pennsylvania
Municipal Money Market
Portfolio, since 1989; joined
Fidelity in 1982
(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
INVESTMENT CHANGES
MATURITY DIVERSIFICATION
DAYS % OF FUND ASSETS % OF FUND ASSETS % OF FUND ASSETS
8/31/95 2/28/95 8/31/94
0 - 30 75 85 82
31 - 90 6 7 9
91 - 180 2 8 0
181 - 397 17 0 9
WEIGHTED AVERAGE MATURITY
8/31/95 2/28/95 8/31/94
California Tax-Free
Money Market 66 days 21 days 39 days
Average California
Tax-Free Money Market Fun 52 days 33 days 53 days
d*
ASSET ALLOCATION
AS OF AUGUST 31, 1995 AS OF FEBRUARY 28, 1995
Row: 1, Col: 1, Value: 67.0
Row: 1, Col: 2, Value: 11.0
Row: 1, Col: 3, Value: 4.0
Row: 1, Col: 4, Value: 18.0
Row: 1, Col: 5, Value: 0.0
Row: 1, Col: 1, Value: 69.0
Row: 1, Col: 2, Value: 14.0
Row: 1, Col: 3, Value: 4.0
Row: 1, Col: 4, Value: 14.0
Row: 1, Col: 5, Value: 2.0
Variable rate
demand notes
(VRDNs) 67%
Commercial
paper 11%
Tender bonds 4%
Municipal
notes 18%
Other 0%
Variable rate
demand notes
(VRDNs) 69%
Commercial
paper 14%
Tender bonds 2%
Municipal
notes 14%
Other 1%
* SOURCE: IBC/DONOGHUE'S MONEY FUND REPORT(registered trademark)
FIDELITY CALIFORNIA TAX-FREE MONEY MARKET PORTFOLIO
INVESTMENTS AUGUST 31, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investments
MUNICIPAL SECURITIES (A) - 100%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CALIFORNIA - 100.0%
Alameda County Ind. Dev. Auth. Ind. Rev.:
(Jacobs Investment Co. Proj.) Series 1985 A,4.15%,
LOC Bank of America, VRDN $ 3,800,000 $ 3,800,000
(Longview Fibre Co.) Series 1988, 3.65%,
LOC ABN-AMRO Bank, VRDN 1,750,000 1,750,000
Alameda County TRAN 4.75% 7/25/96,
LOC Union Bank of Switzerland 6,000,000 6,038,711
Anaheim Hsg. Auth. Multi-Family Hsg. Rev. (Parka Vista Apts)
3.65%, LOC Citibank, VRDN (b) 5,500,000 5,500,000
Azusa Multi-Family Hsg. Rev. (Pacific Glen Apt. Proj.)
Series 1994, 3.95%, VRDN 1,400,000 1,400,000
California Central School Dist. Ctfs. of Prtn. 3.85%,
LOC Bank of California, VRDN 2,000,000 2,000,000
California Ed. Facs. Auth. Rev. (Stanford University)
Series L-2, 3.20%, VRDN 4,500,000 4,500,000
California Gen. Oblig. Bonds (c):
Series 1993N, 3.85% tender 9/1/95 (AMBAC Insured)
(Liquidity Facility Citibank) 8,000,000 8,000,000
Series CR-26I,3.90%, tender 9/15/95
(Liquidity Facility Citibank) (AMBAC Insured) 8,000,000 8,000,000
California Gen. Oblig. RAN Series C,
5.75% 4/25/96 (FGIC Insured) 3,200,000 3,238,841
California Health Facs. Fin. Auth. Rev.
(Catholic Healthcare West) Series 1995 B, 3.40%
(MBIA Insured)(Liquidity Facility Rabobank) 6,400,000 6,400,000
California Health Facs. Auth. (Enloe Memorial Hosp.) 3.45%,
LOC Bank of America, VRDN 1,500,000 1,500,000
California Hsg. Fin. Agcy. Bonds Series PT-40C, 4%
tender 12/7/95 (Liquidity Facility Banque
Nationale de Paris) 8,330,000 8,330,000
California Hsg. Fin. Agcy. Home. Mtg. Rev. Bonds
Series 1995 E, 4.60% tender 2/1/96(FGIC Insured)(b) 4,375,000 4,375,000
California Hsg. Fin. Agcy. Participating VRDN (c):
Series 1994-1, 3.91%
(Liquidity Facility State Street Bank) (b) 9,628,724 9,628,724
Series PA-58, 3.60% (Liquidity Facility Merrill Lynch) 1,390,000
1,390,000
Series PA-90, 3.65% (Liquidity Facility Merrill Lynch) (b) 2,335,000
2,335,000
Series PT-14, 3.65%
(Liquidity Facility Dai-Ichi Kangyo Bank Ltd.) 2,890,000 2,890,000
Series PT-40A, 4.25%
(Liquidity Facility Dai-Ichi Kangyo Bank Ltd.) (b) 6,000,000 6,000,000
Series PT-40B, 3.75%
(Liquidity Facility Dai-Ichi Kangyo Bank Ltd.) (b) 9,500,000 9,500,000
Series PT-56, 3.75% (Liquidity Facility Credit Suisse) 1,500,000
1,500,000
California Hsg. Fin. Agcy. Tender Option Bonds
Series CR-156, 3.82% (Liquidity Facility Citibank) (b)(c) 4,500,000
4,500,000
California Poll. Cont. Fing. Auth. Resource Recovery Rev.:
(Burney Forest Products Proj.) Series 1989 A, 3.65%,
LOC Natl. Westminster Bank, VRDN 1,000,000 1,000,000
(Delano Proj.):
Series 1990, 3.50%, LOC Algemene Bank, VRDN (b) 500,000 500,000
Series 1991, 3.50%, LOC Amro Holdings, VRDN (b) 800,000 800,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
California Dept. of Water Resources Water Rev. Series 1,
3.30% 9/7/95 (Liquidity Facility Canadian Imperial
Bank of Commerce) $ 4,800,000 $ 4,800,000
California Poll. Cont. & Fin. Auth. Rev. Bonds:
(Chevron USA, Inc. Proj.) Series B, 4.25% tender 6/15/96 1,360,000
1,365,725
(Pacific Gas & Elec. Co.):
Rfdg. Series 1988 B, 3.80% tender 11/20/95,
LOC Sumitomo Bank (b) 4,600,000 4,600,000
Rfdg. Series 1988 F, 3.35% tender 9/11/95,
LOC Banque Nationale De Paris 4,000,000 4,000,000
Series 1988 A:
4.20% tender 9/8/95, LOC Swiss Bank Corp.(b) 3,000,000 3,000,000
4.10% tender 9/11/95, LOC Swiss Bank Corp. (b) 2,300,000 2,300,000
3.35% tender 9/18/95 LOC Swiss Bank Corp. (b) 2,000,000 2,000,000
3.35% tender 9/19/95, LOC Swiss Bank Corp. (b) 2,000,000 2,000,000
3.70% tender 10/16/95, LOC Swiss Bank Corp 2,000,000 2,000,000
3.65% tender 10/26/95, LOC Swiss Bank Corp. (b) 3,000,000 3,000,000
3.70% tender 11/15/95, LOC Swiss Bank Corp. (b) 6,000,000 6,000,000
3.70% tender 10/23/95, LOC Swiss Bank Corp 5,000,000 5,000,000
Series 1988 D:
4.10% tender 9/11/95, LOC Bank of Tokyo 1,000,000 1,000,000
3.80% tender 10/13/95, LOC Bank of Tokyo 4,000,000 4,000,000
California Poll. Cont. Fing. Auth. Solid Waste Disp. Rev.:
(Shell Oil Co. Martinez Proj.)
Series 1994 S, 3.60%, VRDN (b) 600,000 600,000
(Western Waste Industries):
Series 1994 A, 3.85%,
LOC Bank of California, VRDN (b) 3,500,000 3,500,000
3.925%, LOC Citibank, VRDN 2,200,000 2,200,000
California School Cash Reserve Prog. Auth. TRAN Series 1995 A,
4.75% 7/3/96, LOC Industrial Bank of Japan 12,000,000 12,096,642
California Statewide Commty. Dev. Auth. Apt. Dev. Rev., VRDN:
Rfdg:
Series 1995 A-2, 3.35% (Liquidity Facility FNMA) 3,000,000 3,000,000
Series 1995 A-3, 3.35% (FNMA Guaranteed) 5,200,000 5,200,000
Series 1995 A-4, 3.45% (Liquidity Facility FNMA) 4,000,000 4,000,000
Series 1995 A-5, 3.45% ( FNMA Guaranteed) 23,000,000 23,000,000
Series 1995 A-6, 3.45% ( FNMA Guaranteed) 1,100,000 1,100,000
California Statewide Commty. Dev. Auth. Rev., VRDN:
(Covenant Retirement Commty.) 3.70%,
LOC Lasalle Nat'l. Bank 7,000,000 7,000,000
(Florestone Prod. Co.) Series 1989, 3.75%,
LOC Bank of Tokyo (b) 775,000 775,000
(Triple H Food Processors Proj.) Series 1991,3.90%,
LOC Bank of Tokyo (b) 2,065,000 2,065,000
(W&H Voortman Inc. Proj.) Series 1990, 3.90%,
LOC Bank of Tokyo (b) 1,005,000 1,005,000
California Statewide Commty. Dev. Auth. Rev. Ctfs. of Prtn, VRDN:
(Covenant Retirement Commty. Inc.) Series1995, 3.70%,
LOC LaSalle Bank 4,000,000 4,000,000
(Delancey St. Foundation) 3.85%,
LOC Bank of America, VRDN 2,475,000 2,475,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Carlsbad Multi-Family Hsg. Rev.:
(La Costa Apt. Proj.) Series 1993 A, 3.45%,
LOC Bank of America, VRDN $ 3,000,000 $ 3,000,000
(Seascape Village Proj.) Series A, 4%, VRDN 10,600,000 10,600,000
Chula Vista Ind. Dev. Rev. Bonds
(San Diego Gas & Elec. Co.)(b):
Series C:
3.10% tender 9/21/95 3,000,000 3,000,000
3.50% tender 10/12/95 1,000,000 1,000,000
Series E, 3.85% tender 11/9/95 2,500,000 2,500,000
Conejo Valley Unified School Dist. TRAN
(Ventura County Proj.) 4.75% 7/5/96 3,900,000 3,923,628
Contra Costa County Multi-Family Hsg. Rev., VRDN (b):
(Del Norte Place Apt.) Series 1994 A, 3.90%,
LOC Sumitomo Bank Ltd. 3,500,000 3,500,000
(Park Regency) Series A, 3.60%, LOC Sumitomo Bank 4,000,000 4,000,000
Contra Costa County TRAN 4.50% 7/3/96 6,000,000 6,041,108
Covina Redev. Agcy. Multi-Family Hsg. Rev. (Shadowhills Apt.
Proj.) Series 1994 A, 3.95%, VRDN 500,000 500,000
Duarte Redev. Agcy. Single-Family Mtg. Rev.
Participating VRDN, Series A-1, 3.90%
(Liquidity Facility Norwest Bank) (c) 3,100,000 3,100,000
Eastern Muni. Wtr. Dist. Wtr. & Swr. Ctfs. of Prtn.
(Riverside County) Series 1993, 3.35%
(FGIC Insured) VRDN 5,700,000 5,700,000
East Bay Muni. Util. Dist. Wtr. Sys. Rev. CP:
Series 1988, 3.10% 9/12/95
(Liquidity Facility Sanwa Bank, Ltd.) 3,000,000 3,000,000
Series 1988, 3.30% 9/8/95
(Liquidity Facility Sanwa Bank) 5,000,000 5,000,000
Escondido Commty. Dev. Commission Rev. (Escondido
Promeneade Proj.) 4%, LOC Bank of America,
VRDN (b) 4,000,000 4,000,000
Fontana Apt. Dev. Rev. Rfdg. (Citrus Ave. Apt. Proj.)
Series 1992 A, 3.45%, LOC Bank of America, VRDN 1,800,000 1,800,000
Foothills Eastern Transport Corridor Agcy. Toll Road Rev.,
VRDN:
Series 1995 C, 3.30%, LOC Credit Suisse 2,000,000 2,000,000
Series 1995 D:
3.35%, LOC Morgan Guaranty Trust Co. 4,000,000 4,000,000
3.50%, LOC Ind. Bank of Japan 8,000,000 8,000,000
Series 1995 E, 3.35% LOC Banque Nat'l. De Paris 1,500,000 1,500,000
Fremont Bldg. & Equip. Acquisition Fing. (Fremont Park
Facs. Corp.) 3.70%, LOC Sumitomo Bank Ltd., VRDN 2,500,000 2,500,000
Garden Grove Hsg. Auth. Multi-Family Hsg. Rev.
(Valley View Sr. Villas Proj.) Series 1990 A, 3.75%,
LOC Wells Fargo Bank, VRDN 1,500,000 1,500,000
Grand Terrace Commty. Redev. Multi-Family Hsg. Rev.
(Mt. Vernon Villas) 3.65%, LOC Ind. Bank of Japan,
VRDN 5,000,000 5,000,000
Humbolt County TRAN 4.50% 7/5/96 3,500,000 3,514,147
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Irvine Ranch Wtr. Dist. Rev., VRDN:
(Dist. #140, 240, 105, 250) Series 1993, 3.60%,
LOC Bank of America $ 2,700,000 $ 2,700,000
Series 1985 B, 3.60%, LOC Sumitomo Bank Ltd. 700,000 700,000
Series B, 3.60%, LOC Sumitomo Bank Ltd. 1,400,000 1,400,000
Series 1988 A, 3.60%, LOC Sumitomo Bank Ltd. 700,000 700,000
Kern Commty. College Dist. Ctfs. of Prtn. 3.65%,
LOC Bank of California, VRDN 6,600,000 6,600,000
Kern County Ctfs. of Prtn., VRDN:
(Kern Pub. Facs. Proj.) Series B, 3.45%,
LOC Union Bank of Switzerland 2,000,000 2,000,000
Series 1986 A, 3.85% 8/1/06
LOC Union Bank of Switzerland 1,700,000 1,700,000
Kern County TRAN 4.50% 7/2/95 6,690,000 6,716,700
Lancaster Redev. Agcy. Multi-Family Hsg. Rev.
(Westwood Park Apt.) Series 1985 K, 3.40%
LOC Bank of America, VRDN 1,200,000 1,200,000
Livermore Ctfs. of Prtn. (Wtr. Reclamation Plant Expansion
Proj.) 3.60%, LOC Nat'l. Westminster Bank, VRDN 470,000 470,000
Loma Linda Wtr. Rev. Rfdg. Bonds 3.85%,
LOC Bank of California, VRDN 2,000,000 2,000,000
Long Beach Hbr. Rev. Series A, 3.90%, 11/7/95
(Liquidity Facility CIBC) CP (b) 1,600,000 1,600,000
Long Beach TRAN Series 1994-95, 4.75% 9/20/95 1,000,000 1,000,266
Los Angeles Ctfs. of Prtn. (Baldwin Hills Pub. Parking Facs.)
Series 1984, 3.70%, LOC Wells Fargo Bank, VRDN 8,500,000 8,500,000
Los Angeles Commty. Redev. Agcy. Ctfs. of Prtn. (CMC Med.
Plaza) 3.75%, LOC Bank of America, VRDN 600,000 600,000
Los Angeles Convention & Exhibit Ctr. Auth. Participating
VRDN, Series PA-1006, 3.65%,(MBIA Insured)
(Liquidity Facility Merrill Lynch) (c) 565,000 565,000
Los Angeles Dept. of Wtr. & Pwr. Elec. Plant Rev. 3.75%
10/25/95, CP 3,000,000 3,000,000
Los Angeles Dept. of Wtr. & Pwr. Participating VRDN,
Series BTP-51, 3.80% (Liquidity Facility Bankers Trust) (c) 3,600,000
3,600,000
Los Angeles Multi-Family Hsg. Rev., VRDN:
(Channel Gateway Apts.) Series 1989 B, 3.75%,
LOC FBank Ltd. (b) 4,500,000 4,500,000
(Malibu Meadows Proj.) Series 1991 A, 3.70%,
LOC Sumitomo Bank Ltd. 10,211,000 10,211,000
(Malibu Meadows II Proj.) Series 1991 B, 3.70%,
LOC Sumitomo Bank Ltd. 6,100,000 6,100,000
(Meadowridge Apt. Proj.) Series 1994 B, 3.95%, VRDN 1,400,000 1,400,000
(Museum Terrace Apt. Proj.) Series H, 3.60%,
LOC Bank of America 3,800,000 3,800,000
(Raintree Meadows Proj.) Series 1991 D, 3.40%
LOC Federal Home Loan Bank, of San Francisco 3,558,000 3,558,000
(Studio Colony Proj.) Series 1985 C, 3.50%,
LOC Ind. Bank of Japan Ltd. 4,987,000 4,987,000
Series 1985 K, 3.50%,
LOC Federal Home Loan Bank, of San Francisco 7,600,000 7,600,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Los Angeles TRAN 4.50% 7/1/96,
LOC Credit Suisse $ 26,525,000 $ 26,673,079
Los Angeles Unified School Dist. TRAN 4.50%
7/3/96 9,000,000 9,058,031
Los Angeles Wastewtr. Sys. CP:
3.50% 9/14/95 (Liquidity Facility Sumitomo Bank) 3,500,000 3,500,000
4.15% 10/12/95 (Liquidity Facility Sumitomo Bank) 1,000,000 1,000,000
3.80% 10/20/95 (Liquidity Facility Sumitomo Bank) 2,000,000 2,000,000
Metropolitan Wtr. Dist. of Southern California
Participating VRDN (c):
Series 32-A, 3.55%
(Liquidity Facility Morgan Guaranty Trust) 5,700,000 5,700,000
Series 32-B, 3.55%
(Liquidity Facility Morgan Guaranty Trust) 3,000,000 3,000,000
Midpeninsula Reg'l. Open Space Dist.
(Santa Clara & San Mateo Counties) Series A, 3.75%,
LOC Fuji Bank Ltd., VRDN 3,275,000 3,275,000
Monterey County Fing. Auth. Rev. (Reclamation &
Distribution Proj.) Series 1995 A, 3.60%,
LOC Dai-Ichi Kangyo Bank, VRDN 4,200,000 4,200,000
Monterey Wastewtr. (Reclamation Proj.) Series 1992, 3.65%,
LOC Sumitomo Bank, VRDN 1,000,000 1,000,000
Mt. Diablo Unified School Dist. TRAN
Series 1994-95, 5% 10/27/95 6,000,000 6,006,399
Northern California Pwr. Agcy. Participating VRDN,
Series PW-9, 3.80% (Liquidity Facility Canadian
Imperial Bank of Commerce) (c) 9,900,000 9,900,000
Oakland Rev. (Children's Hosp. Med. Ctr.)
Series 1994 B, 3.50%,
LOC Banque Nationale de Paris, VRDN 10,600,000 10,600,000
Oakland TRAN 4.50% 7/31/96 4,000,000 4,021,815
Oakland Unified School Dist. TRAN 4.50% 8/30/96 4,000,000 4,015,677
Oceanside Multi-Family Rev. (Lakeridge Apt. Proj.)
Series 1994, 4.05%, VRDN 6,700,000 6,700,000
Olcese Water. Dist. Rev. Bonds (Rio Bravo Wtr. Delivery Sys.
Proj.) 3.65% tender 9/28/95, LOC Sumitomo Bank (b) 2,800,000 2,800,000
Ontario Ind. Dev. Auth. Rev. (Safari Land Proj.) Series 1989,
4.10%, LOC Bank of America, VRDN (b) 900,000 900,000
Orange County Apt. Dev. Rev, VRDN.:
Rfdg. (Harbor Pointe Apts.) Series 1992 D, 3.70%,
LOC Citibank 3,000,000 3,000,000
(Bear Brands Apt.) Series 1985 Z, 3.65%,
LOC Fuji Bank Ltd. 8,000,000 8,000,000
(Niguel Summit II) Series 1985 U-B, 4.25%,
LOC Bank of America 2,740,000 2,740,000
(Villa Marguerite Apts.), Series 1993 A, 3.50%,
LOC Wells Fargo Bank 2,900,000 2,900,000
(Vista Verde Apt. Proj.) Series 1988 A, 3.75%,
LOC Wells Fargo Bank (b) 4,200,000 4,200,000
Orange County Capital Impt. Prog.1990-92,
Series A, (Sanitation Dist. 1,2,3,5,6,7,11,13,14), 3.40%,
LOC Nat'l. Westminster Bank, VRDN 2,600,000 2,600,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Orange County Hsg. Auth. Apt. Dev. Rev. (Lantern Pines
Proj.-Frost Group) 3.70%, LOC Bank of Tokyo, VRDN $ 5,800,000 $ 5,800,000
Orange County Wtr. Dist. Ctfs. of Prtn. Rev. Series 1990 B,
3.35%, LOC Nat'l Westminster Bank, VRDN 5,000,000 5,000,000
Oxnard Redev. Agcy. Ctfs. of Prtn. (Channel Islands Bus.
Ctr. Proj.) 3.925%, LOC Wells Fargo Bank, VRDN 3,195,000 3,195,000
Palm Springs Ctfs. of Prtn. Commty. Redev. Agcy. Rev.
(Headquarters Hotel Proj.) Series 1984 II, 3.70%,
LOC Citibank, VRDN 800,000 800,000
Panama-Buena Vista Unified School Dist. Capital Impt. Fing.
Rev. Series 1994, 3.65%, LOC Bank of California, VRDN 3,000,000
3,000,000
Pittsburg Multi-Family Hsg. Auth. Rev. (Fountain Plaza Apt.)
3.65%, VRDN 7,000,000 7,000,000
Pittsburg Unified School Dist. TRAN (Contra Costa County)
4.75% 7/5/95 3,000,000 3,021,872
Redlands Multi-Family Hsg. Rev. (Parkview Terrace Proj.)
3.45%, LOC Bank of America, VRDN 1,600,000 1,600,000
Riverside County Ctfs. of Prtn. (Aces Pub.
Facs. Fin. Prog.), VRDN:
Series 1985-A, 3.45%LOC Sanwa Bank Ltd. 3,000,000 3,000,000
Series 1985 B, 3.50%, LOC Sanwa Bank Ltd. 1,400,000 1,400,000
Riverside County Hsg. Auth. Multi-Family Hsg. Mtg. Rev.:
(Mt. View Apts.) Series 1995A, 3.50%,
LOC Federal Home Loan Bank of San Francisco, VRDN 2,000,000 2,000,000
(Victoria Springs Apts.) Series 1989 C, 3.60,
LOC Bank of America, VRDN (b) 2,500,000 2,500,000
Sacramento Multi-Family Hsg. Auth. Rev., VRDN:
(River Oaks Apts.) Series 1985 E,
3.60%, LOC Dai-Ichi Kangyo Bank 1,000,000 1,000,000
(Smoketree Apts.) Series 1990 A, 3.55% 9,000,000 9,000,000
Sacramento Muni. Util. Dist. Elec. Rev. CP Series H:
3.80%, 9/7/95 LOC Bank of America 1,000,000 1,000,000
3.30% 9/18/95 LOC Morgan Guaranty Trust Co 1,300,000 1,300,000
San Bernardino County Mtg. Rev. Rfdg. (Pepperwood Apts.)
Series 1993 A, 3.45%, LOC FHLRDN 4,000,000 4,000,000
San Bernardino County Multi-Family Hsg. Rev., VRDN:
(Alta Park Apts.) 3.70%, LOC Sumitomo Bank 15,945,000 15,945,000
(Quail Pointe Apt.) Series 1990 A, 3.55% 3,500,000 3,500,000
(Western Properties II) 3.60%, LOC Bank of America 500,000 500,000
(Western Properties IV) 3.60%, LOC Bank of America 1,500,000 1,500,000
(Western Properties V) 3.60%, LOC Bank of America 800,000 800,000
San Bernardino County TRAN 4.50% 7/5/96,
LOC Bank of Nova Scotia 5,500,000 5,524,479
San Diego Hsg. Auth. Multi-Family Hsg. Rev., VRDN:
Rfdg. (Coral Pointe Apt. Proj.) Series 1993 A, 4.15%, 3,265,000
3,265,000
(Carmel Del Mar Apt. Proj.) Series 1993-E, 3.60%,
LOC Citibank 3,000,000 3,000,000
(Nobel Court Apts.) Series 1985 L, 3.50%,
LOC Citibank 3,825,000 3,825,000
(Paseo Point Apt.) Series 1994 A, 3.60%,
LOC Bank of Tokyo 5,100,000 5,100,000
Series 1985 C, 3.55% 1,300,000 1,300,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
San Diego Ind. Dev. Rev. Bonds (San Diego Gas & Elec. Co.)
Series 1995 B, 3.30% tender 9/27/95 $ 2,000,000 $ 2,000,000
San Francisco City & County Multi-Family Hsg. Rev.
(Winterland Proj.) 3.45%, LOC Citibank, VRDN 8,400,000 8,400,000
San Francisco City & County Parking Auth. Tender Option
Ctfs. Series A, 3.50%, BPA Bank of America (c) 3,000,000 3,000,000
San Francisco Redev. Agcy. Multi-Family Hsg. Rev., VRDN:
(Bayside Village Apts.) 3.45%,
LOC Ind. Bank of Japan Ltd. 2,200,000 2,200,000
(Rincon Ctr.) Series 1985 B, 3.45%, LOC Citibank 9,240,000 9,240,000
San Jose Multi-Family Hsg. Rev. (Kimberly Woods)
Series 1984, 3.40%, LOC Bank of America, VRDN 3,000,000 3,000,000
San Luis Obispo TRAN 4.50% 7/19/96 7,600,000 7,638,552
Santa Ana Ind. Dev. Auth. Rev. (McFadden Properties Proj.)
3.90%, LOC Bank of America, VRDN 400,000 400,000
Santa Clara County TRAN 4.50% 8/2/96 8,500,000 8,544,838
Santa Clara Elec. Sys. Rev. Series A, 3.30%
LOC Nat'l. Westminster Bank, VRDN 1,000,000 1,000,000
Simi Valley Multi-Family Hsg. Rev., VRDN:
(Lincoln Wood Ranch Apt.) 3.55%,
LOC Sumitomo Bank 16,600,000 16,600,000
(Shadowridge Apts.) Series 1989, 3.60%,
LOC Citibank (b) 2,800,000 2,800,000
Southern California Pub. Pwr. Auth. Participating VRDN
Series SG-35, 3.60%, (Liquidity Facility Societe
Generale)(c) 7,300,000 7,300,000
Southern California Pub. Pwr. Auth. Transmission Proj.
Rev. Bonds 3.60% tender 7/1/96 2,635,000 2,795,716
Stanislaus County TRAN 4.50% 7/19/96 6,600,000 6,633,479
Stockton Hosp. Rev. (St. Joseph's Hosp.) Series 1985 A,
3.65%, LOC Dai-Ichi Kangyo Bantd., VRDN 10,120,000 10,120,000
Torrance Hospital Rev. (Little Co. of Mary Hosp.-Torrance
Mem. Med. Ctr.) Series 1992,3.65%,
LOC Fuji Bank Ltd., VRDN 5,600,000 5,600,000
Tustin Impt. Assessment Dist. #85-1 Bonds
3.80% tender 9/12/95 5,000,000 5,000,000
Upland Commty. Redev. Agcy. Multi-Family Hsg. Rev.
(Northwoods) Series 1989 B, 4%,
LOC Sanwa Bank Ltd., VRDN 3,800,000 3,800,000
Ventura County TRAN 4.50% 7/2/96 9,500,000 9,553,348
Vista Ind. Dev. Auth. Rev. (Desalination Sys., Inc.)
Series 1995, 3.85%, LOC Wells Fargo Bank, VRDN (b) 2,000,000 2,000,000
Washington Township Hosp. Dist. Rev., Series 1985 A,
3.65%, LOC Ind. Bank of Japan Ltd., VRDN 7,300,000 7,300,000
TOTAL INVESTMENTS - 100% $ 749,437,777
Total Cost for Income Tax Purposes $ 749,438,085
SECURITY TYPE ABBREVIATIONS
BAN - Bond Anticipation Notes
CP - Commercial Paper
RAN - Revenue Anticipation Notes
TAN - Tax Anticipation Notes
TRAN - Tax and 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, 1995, the fund had a capital loss carryforward of
approximately $585,900 of which $27,400, $52,500, $28,800 and $477,200 will
expire on February 28, 1996, 1997, 1998 and 2003, respectively.
FIDELITY CALIFORNIA TAX-FREE MONEY MARKET PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AUGUST 31, 1995 (UNAUDITED)
284.ASSETS 285. 286.
287.Investment in securities, at value - See 288. $ 749,437,777
accompanying schedule
289.Cash 290. 4,067,906
291.Interest receivable 292. 4,038,792
293. 294.TOTAL ASSETS 295. 757,544,475
296.LIABILITIES 297. 298.
299.Payable for investments purchased $ 3,001,256 300.
301.Distributions payable 54,933 302.
303.Accrued management fee 252,308 304.
305.Other payables and accrued expenses 178,592 306.
307. 308.TOTAL LIABILITIES 309. 3,487,089
310.311.NET ASSETS 312. $ 754,057,386
313.Net Assets consist of: 314. 315.
316.Paid in capital 317. $ 754,563,503
318.Accumulated net realized gain (loss) on 319. (506,117)
investments
320.321.NET ASSETS, for 754,587,343 shares 322. $ 754,057,386
outstanding
323.324.NET ASSET VALUE, offering price and 325. $1.00
redemption price per share ($754,057,386 (divided by)
754,587,343 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED AUGUST 31, 1995 (UNAUDITED)
326.327.INTEREST INCOME 328. $ 14,250,246
329.EXPENSES 330. 331.
332.Management fee $ 1,451,492 333.
334.Transfer agent, accounting and custodian fees 818,967 335.
and expenses
336.Non-interested trustees' compensation 2,737 337.
338.Registration fees 1,296 339.
340.Audit 19,932 341.
342.Legal 3,895 343.
344.Miscellaneous 1,085 345.
346. 347.TOTAL EXPENSES 348. 2,299,404
349.350.NET INTEREST INCOME 351. 11,950,842
352.REALIZED AND UNREALIZED GAIN (LOSS) 354. 78,437
353.Net realized gain (loss) on investment securities
355.Increase (decrease) in net unrealized gain from 356. (10,065)
accretion of market discount
357.358.NET GAIN (LOSS) 359. 68,372
360.361.NET INCREASE IN NET ASSETS RESULTING FROM 362. $ 12,019,214
OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS YEAR
ENDED ENDED
AUGUST 31, 1995 FEBRUARY 28,
(UNAUDITED) 1995
363.INCREASE (DECREASE) IN NET ASSETS
364.Operations $ 11,950,842 $ 17,225,679
Net interest income
365. Net realized gain (loss) 78,437 (475,878)
366. Increase (decrease) in net unrealized gain from (10,065) 8,614
accretion of market discount
367. 12,019,214 16,758,415
368.NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS
369.Distributions to shareholders from net interest (11,950,842) (17,225,679)
income
370.Share transactions at net asset value of $1.00 per 1,266,759,924 1,890,883,466
share
Proceeds from sales of shares
371. Reinvestment of distributions from net interest 11,546,254 16,639,355
income
372. Cost of shares redeemed (1,199,502,010) (1,843,636,022)
373.374. 78,804,168 63,886,799
NET INCREASE (DECREASE) IN NET ASSETS AND SHARES
RESULTING FROM SHARE TRANSACTIONS
375. 78,872,540 63,419,535
376.TOTAL INCREASE (DECREASE) IN NET ASSETS
377.NET ASSETS 378. 379.
380. Beginning of period 675,184,846 611,765,311
381. End of period $ 754,057,386 $ 675,184,846
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
382. SIX MONTHS YEARS ENDED FEBRUARY 28, TEN MONTHS YEARS ENDED APRIL 30,
ENDED ENDED
AUGUST 31, 199 FEBRUARY 28,
5
383. (UNAUDITED) 1995 1994 1993 1992 1991
384.SELECTED PER-SHARE DATA
385.Net asset value,
beginning of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
386.Income from
Investment Operations .017 .026 .020 .019 .035 .047
Net interest income
387.Less Distributions (.017) (.026) (.020) (.019) (.035) (.047)
From net interest income
388.Net asset value,
end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
389.TOTAL RETURN B 1.67% 2.60% 1.97% 1.92% 3.59% 4.85%
390.RATIOS AND SUPPLEMENTAL DATA
391.Net assets, end of
period (000 omitted) $ 754,057 $ 675,185 $ 611,765 $ 568,280 $ 556,516 $ 538,791
392.Ratio of expenses to
average net assets .63%A .62% .64% .62%A .63% .61%
393.Ratio of net interest
income to average 3.29%A 2.58% 1.95% 2.29%A 3.50% 4.75%
net assets
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED
FINANCIAL HIGHLIGHTS
NOTES TO FINANCIAL STATEMENTS
For the period ended August 31, 1995 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity California Municipal High Yield Portfolio (the high yield fund)
and Fidelity California Insured Portfolio (the insured fund)are a funds of
Fidelity California Municipal Trust. Fidelity California Municipal 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. Each fund is
authorized to issue an unlimited number of shares. The following summarizes
the significant accounting policies of the high yield fund, the insured
fund and the money market fund:
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 of their purchase date 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 substantially 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
principals. These differences, which may result
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
in distribution reclassifications, are primarily due to differing
treatments for futures and options transactions, losses deferred due to
wash sales, futures and options and excise tax regulations.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
FUTURES CONTRACTS AND OPTIONS. The high yield and insured funds may use
futures and options contracts to manage its exposure to the bond market and
to fluctuations in interest rates. Buying futures, writing puts, and buying
calls tend to increase the fund's exposure to the underlying instrument.
Selling futures, buying puts, and writing calls tend to decrease the fund's
exposure to the underlying instrument, or hedge other fund investments.
Futures contracts and written options involve, to varying degrees, risk of
loss in excess of the futures variation margin or the option value
reflected in the Statement of Assets and Liabilities. The underlying face
amount at value is shown in the schedules of investments under the caption
"Futures Contracts". This amount reflects each contract's exposure to the
underlying instrument at period end. Losses may arise from changes in the
value of the underlying instruments, if there is an illiquid secondary
market for the contracts, or if the counterparties do not perform under the
contracts' terms.
Futures contracts are valued at the settlement price established each day
by the board of trade or exchange on which they are traded. Exchange-traded
options 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 $108,211,107 and $98,153,820, respectively.
The market value of futures contracts opened and closed during the period
amounted to $76,200,157 and $84,958,962, respectively.
INSURED FUND. Purchases and sales of securities, other than short-term
securities, aggregated $48,372,256 and $47,381,504 respectively.
The market value of futures contracts opened and closed during the period
amounted to $44,883,995 and $55,309,184, 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
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
and is based on the monthly average net assets of all the mutual funds
advised by FMR. The rates ranged from .1200% to .3700% for the period . In
the event that these rates were lower than the contractual rates in effect
during the period, FMR voluntarily implemented the above rates, as they
resulted in the same or a lower management fee. The annual individual fund
fee rate is .25%. For the period, the management fees were equivalent to an
annualized rate of .41% of average net assets for the high yield, insured
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.
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 $1,126, $1,227
and $53,113 for the high yield, insured and money market funds,
respectively, for the period.
TRANSFER AGENT AND ACCOUNTING FEES. UMB Bank, n.a. (UMB) 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 performs the activities associated with the funds'
transfer and shareholder servicing agent and accounting functions.
Effective January 1, 1995, the Board of Trustees approved a revised
transfer agent contract pursuant to which the funds pay account fees and
asset-based fees that vary according to account size and type of account.
FSC pays for typesetting, printing and mailing of all shareholder reports,
except proxy statements. 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
$294,251 and $102,457 for the high yield fund, $137,351 and $46,043 for the
insured fund and $734,228 and $63,627 for the money market fund.
TO WRITE FIDELITY
If more than one address is listed, please locate the address that is
closest to you. We'll give your correspondence immediate attention and send
you written confirmation upon completion of your request.
(LETTER_GRAPHIC)(LETTER_GRAPHIC)MAKING CHANGES
TO YOUR ACCOUNT
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(LETTER_GRAPHIC)(LETTER_GRAPHIC)FOR NON-RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
OVERNIGHT EXPRESS
Fidelity Investments
100 Crosby Parkway - KP2C
Covington, KY 41015-4399
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6I
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 193
Boston, MA 02210-0193
(LETTER_GRAPHIC)(LETTER_GRAPHIC)FOR RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6R
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
INVESTMENT ADVISER
(registered trademark)
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
Fred L. Henning, Jr. , Vice President
Deborah F. Watson, Vice President -
MONEY MARKET FUND
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
Thomas D. Maher, Assistant
Vice President - MONEY MARKET FUND
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox*
Phyllis Burke Davis*
Richard J. Flynn*
Edward C. Johnson 3d
E. Bradley Jones*
Donald J. Kirk*
Peter S. Lynch
Marvin L. Mann*
Edward H. Malone*
Gerald C. McDonough*
Thomas R. Williams*
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
UMB Bank, n.a.
Kansas City, MO
and
Fidelity Service Co.
Boston, MA
CUSTODIAN
UMB 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
SPARTAN(registered trademark)
(registered trademark)
CALIFORNIA
MUNICIPAL
PORTFOLIOS
SEMIANNUAL REPORT
AUGUST 31, 1995
CONTENTS
PRESIDENT'S MESSAGE 3 NED JOHNSON ON INVESTING
STRATEGIES
SPARTAN CALIFORNIA MUNICIPAL
HIGH YIELD PORTFOLIO 4 PERFORMANCE
7 FUND TALK: THE MANAGER'S OVERVI
EW
10 INVESTMENT CHANGES
11 INVESTMENTS
20 FINANCIAL STATEMENTS
SPARTAN CALIFORNIA
INTERMEDIATE MUNICIPAL
PORTFOLIO 24 PERFORMANCE
27 FUND TALK: THE MANAGER'S OVERVI
EW
30 INVESTMENT CHANGES
31 INVESTMENTS
36 FINANCIAL STATEMENTS
SPARTAN CALIFORNIA MUNICIPAL
MONEY MARKET PORTFOLIO 40 PERFORMANCE
42 FUND TALK: THE MANAGER'S OVERVI
EW
44 INVESTMENT CHANGES
45 INVESTMENTS
55 FINANCIAL STATEMENTS
NOTES 59 NOTES TO THE FINANCIAL STATEMENTS
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.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, THE
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
NEITHER THE FUNDS NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES,
CALL
1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST
OR SEND
MONEY.
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
Although the markets have been fairly positive this year, no one can
predict what lies ahead for investors. Last year, stocks posted
below-average returns and bonds had one of the worst years in history. This
downturn followed a period in which the investing environment was generally
very positive.
These market ups and downs are a normal part of investing, and there are
some basic principles that are helpful for investors to remember in
different types of markets.
Keeping in mind that the effects of interest rate changes on your bond
investments will only be "paper" gains or losses unless you sell your
shares, staying in your bond fund may be appropriate if your investment
horizon is at least a year or more. The longer your investing time frame,
the more likely it is that you will retain your principal investment
through both up and down markets. For example, a 10-year time frame, such
as saving for a college education, enables you to weather these ups and
downs in a long-term fund, which has higher potential returns. An
intermediate-length fund could be appropriate if your investment horizon is
two to four years, and a short-term bond fund could be the right choice if
you need your money in one or two years.
If your time horizon is less than a year, you might want to consider moving
some of your bond investment into a money market fund, which seeks income
and a stable share price by investing in high-quality, short-term
investments. Of course, there is no assurance that a money market fund will
achieve its goal, and it is important to remember that money market funds
are not insured or guaranteed by any agency of the U.S. government.
No matter what your investment horizon or portfolio diversity, it makes
good sense to follow a regular investment plan - investing a certain amount
of money at the same time each month or quarter - and to review your
portfolio periodically. A periodic investment plan will not, of course,
assure a profit or protect against a loss.
If you have any questions, please call us at 1-800-544-8888. We stand ready
to provide the information you need to make the investments that are right
for you.
Best regards,
Edward C. Johnson 3d
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 to measure performance. If Fidelity
had not reimbursed certain fund expenses during the periods shown, the past
five years and life of fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED AUGUST 31, 1995 PAST 6 PAST 1 PAST 5 LIFE OF
MONTHS YEAR YEARS FUND
Spartan California Municipal High Yield 4.82% 6.92% 49.22% 54.99%
Lehman Brothers Municipal Bond Index 5.89% 8.87% 52.01% n/a
Average California Municipal Bond Fund 4.49% 7.07% 47.08% n/a
Consumer Price Index 1.33% 2.62% 16.19% 21.45%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years, or
since the fund started on November 27, 1989. For example, if you invested
$1,000 in a fund that had a 5% return over the past year, the value of your
investment would be $1,050. You can compare the fund's returns to the
performance of the Lehman Brothers Municipal Bond Index - a broad gauge of
the municipal bond market. To measure how the fund's performance stacked up
against its peers, you can compare it to the average California municipal
bond fund, which reflects the performance of 101 California municipal bond
funds with similar objectives tracked by Lipper Analytical Services over
the past six months. Both benchmarks include reinvested dividends and
capital gains, if any. Comparing the fund's performance to the consumer
price index (CPI)helps show how your fund did compared to inflation. (The
CPI returns begin on the month end closest to the fund's start date.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED AUGUST 31, 1995 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Spartan California Municipal High Yield 6.92% 8.33% 7.90%
Lehman Brothers Municipal Bond Index 8.87% 8.74% n/a
Average California Municipal Bond Fund 7.07% 8.01% n/a
Consumer Price Index 2.62% 3.05% 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.
$10,000 OVER LIFE OF FUND
Spartan California: lb015
11/30/89 10000.00 10000.00
12/31/89 10089.59 10081.80
01/31/90 9987.25 10034.11
02/28/90 10117.35 10123.92
03/31/90 10159.32 10126.96
04/30/90 10004.71 10053.64
05/31/90 10291.89 10273.11
06/30/90 10405.52 10363.41
07/31/90 10581.77 10516.27
08/31/90 10331.20 10363.57
09/30/90 10395.14 10369.48
10/31/90 10553.03 10557.58
11/30/90 10839.14 10769.89
12/31/90 10913.37 10816.74
01/31/91 11018.97 10961.90
02/28/91 11069.19 11057.27
03/31/91 11087.33 11061.25
04/30/91 11257.63 11208.92
05/31/91 11362.91 11308.57
06/30/91 11346.29 11297.37
07/31/91 11518.86 11434.98
08/31/91 11648.24 11585.57
09/30/91 11801.25 11736.42
10/31/91 11931.27 11842.05
11/30/91 11937.35 11875.08
12/31/91 12173.82 12129.92
01/31/92 12203.84 12157.58
02/29/92 12206.43 12161.47
03/31/92 12224.31 12165.97
04/30/92 12344.97 12274.25
05/31/92 12515.95 12418.72
06/30/92 12732.29 12627.10
07/31/92 13141.15 13005.66
08/31/92 12932.81 12878.86
09/30/92 13009.44 12963.08
10/31/92 12727.10 12835.66
11/30/92 13058.63 13065.54
12/31/92 13248.16 13198.94
01/31/93 13414.28 13352.45
02/28/93 14043.77 13835.41
03/31/93 13901.29 13689.16
04/30/93 14029.92 13827.29
05/31/93 14111.35 13905.00
06/30/93 14341.36 14137.07
07/31/93 14346.56 14155.59
08/31/93 14721.68 14450.31
09/30/93 14903.97 14614.90
10/31/93 14947.67 14643.11
11/30/93 14794.62 14514.10
12/31/93 15105.43 14820.49
01/31/94 15269.35 14989.74
02/28/94 14833.85 14601.51
03/31/94 14078.16 14006.94
04/30/94 14135.58 14125.72
05/31/94 14220.77 14248.19
06/30/94 14092.86 14161.13
07/31/94 14375.56 14420.70
08/31/94 14419.07 14470.60
09/30/94 14204.30 14258.17
10/31/94 13876.60 14004.94
11/30/94 13517.02 13751.73
12/31/94 13750.68 14054.41
01/31/95 14245.85 14456.09
02/28/95 14707.09 14876.47
03/31/95 14837.90 15047.40
04/30/95 14833.36 15065.16
05/31/95 15321.72 15545.88
06/30/95 15123.46 15409.86
07/31/95 15240.64 15555.94
08/31/95 15417.15 15753.19
$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 August 31, 1995, the value
of your investment would have grown to $15,417 - a 54.17% increase on your
initial investment. This assumes you still own the fund on August 31, 1995
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 $15,753 - a 57.53% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is no
guarantee of how it will do
tomorrow. Bond prices, for
example, generally 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)
TOTAL RETURN COMPONENTS
SIX MONT
HS
ENDED YEARS ENDED FEBRUARY 28,
AUGUST 3
1,
1995 1995 1994 1993 1992 1991
Dividend return 2.93% 5.83% 5.62% 6.72% 6.83% 7.51%
Capital appreciation
return 1.89% -6.69% 0.00% 8.32% 3.43% 1.89%
Total return 4.82% -0.86% 5.62% 15.04% 10.26% 9.40%
DIVIDEND returns and capital appreciation returns are both part of a bond
fund's total return. A dividend return reflects the actual dividends paid
by the fund. A capital appreciation return reflects both the amount paid by
the fund to shareholders as capital gain distributions and changes in the
fund's share price. Both returns assume the dividends or gains are
reinvested. Capital appreciation and total returns include the effect of
the $5 account closeout fee.
DIVIDENDS AND YIELD
<TABLE>
<CAPTION>
<S> <C> <C> <C>
PERIODS ENDED AUGUST 31, 1995 PAST PAST 6 PAST 1
MONTH MONTHS YEAR
Dividends per share 4.74(cents) 28.82(cents) 58.62(cents)
Annualized dividend rate 5.57% 5.65% 5.92%
30-day annualized yield 5.45% - -
30-day annualized tax-equivalent yield 9.47% - -
</TABLE>
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 $10.06 over
the past month, $10.14 over the past six months and $9.91 over the past
year, you can compare the fund's income over these three 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 1995 federal and state income tax bracket
but does not reflect payment of the federal alternative minimum tax, if
applicable.
SPARTAN CALIFORNIA MUNICIPAL HIGH YIELD PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Jonathan Short, Portfolio Manager of Spartan California
Municipal High Yield Portfolio
Q. JONATHAN, HOW HAS THE FUND PERFORMED?
A. For the six- and 12-month periods ended August 31, 1995, the fund had
total returns of 4.82% and 6.92%, respectively. For the same six- and
12-month periods, the average California municipal bond fund returned 4.49%
and 7.07%, respectively, as tracked by Lipper Analytical Services.
Q. MUNICIPAL BONDS HAVE ENJOYED A RALLY SO FAR IN 1995. WHAT WAS DRIVING
THAT MARKET'S PERFORMANCE?
A. Several things. In the first part of the year, the Federal Reserve Board
was still in a tightening mode, raising interest rates in an effort to
stave off possible inflation. During this period, however, many investors
began to perceive that the economy's growth rate would slow and inflation
would remain relatively subdued. This led investors to believe that the Fed
would switch courses and move toward an easing mode and would allow
interest rates to decline. That assumption proved to be correct as the Fed
began to ease in July. Since bond prices generally move in the opposite
direction of interest rates, lower interest rates translated into higher
prices for taxable and tax-free bond prices alike. The municipal market
also was helped by relatively low supply. For the first six months of 1995,
the supply of California municipal bonds was 40% less than it was during
the same period the previous year. Relatively healthy demand and low supply
caused the municipal market to outperform the Treasury market during the
first quarter of the year. But in the spring, municipals ran into a hurdle.
The public debate about various federal tax reform proposals heated up, and
investors worried about the implications of those proposals on the
tax-exempt status of municipal bonds. The proposal causing the most worry
was the flat tax, under which all individuals would be taxed at a uniform
rate and deductions would be eliminated. In my view, it's unlikely that a
flat tax will be enacted before 1997, if ever. So I believe that the market
has overreacted.
Q. WHY DID THE FUND PERFORM BETTER THAN THE AVERAGE OVER THE PAST SIX
MONTHS?
A. Primarily because of its structure. Throughout the past six months the
yield curve - which measures the difference in yields between bonds of
various maturities - steepened. In anticipation of that steepening, I sold
some longer-term bonds with maturities of 20 years or longer and in their
place bought bonds with intermediate maturities in the 10- to 15-year range
toward the beginning of the period. As the yield curve steepened,
intermediate bonds generally performed better than longer-term bonds and
this helped the fund's performance. Most of the intermediate bonds I bought
were non-callable, which means they can't be redeemed by their issuer prior
to their maturity date. As the market rallied, non-callable bonds were in
high demand among investors, and they tended to do quite well.
Q. WHAT KINDS OF BONDS HAVE YOU AVOIDED BUYING?
A. Callable bonds, or those that can be redeemed by their issuer before
their scheduled maturity dates. Here's why: When a bond rises above its
call price, it stops trading to its maturity date. Instead, it trades to an
earlier call date, which is the first date the issuer can redeem the bond.
When that occurs, a callable bond's potential for price appreciation is
limited, yet it can decline in value like a longer-maturity bond. So
because callable bonds generally have reduced upside potential when they
are trading to their call dates, I prefer to invest in non-callable bonds.
Q. THERE HAS BEEN A GENERAL IMPROVEMENT IN THE OVERALL CREDIT QUALITY OF
THE FUND DURING THE PAST SIX MONTHS. WHAT'S BEHIND THAT MOVE?
A. With the problems stemming from Orange County's bankruptcy still
lingering, municipal bond credit quality is under much more scrutiny now
and investors have tended to prefer higher-quality bonds. So I reduced the
fund's holdings in non-investment grade bonds to less than 1% of the fund's
investments by the end of the period and built up its stake in Aaa bonds,
as rated by Moody's Investors Service.
Q. HOW DID THE FUND'S STAKE IN ORANGE COUNTY AND RELATED BONDS FARE OVER
THE PAST SIX MONTHS?
A. Let me start by pointing out that the fund held no investments in
uninsured securities issued directly by Orange County during the period.
However, it did have about a 6% stake in bonds issued by entities that were
participants in the county's pool at the end of the period. Generally
speaking, over the past six months the prices of these bonds have rebounded
to the levels near where they were priced prior to the bankruptcy. One bond
affected by Orange County situation was the Orange County Development
Agency, Santa Ana Heights Project, which made up less than 1% of the fund's
investments at the end of the period. The Development Agency has met its
two scheduled debt service payments in full since the bankruptcy filing.
Those payments helped improve the outlook for the bond.
Q. WHAT'S AHEAD FOR THE FUND?
A. There are a number of things to consider. While I'm optimistic about the
market's prospects from a supply and demand standpoint, interest rates may
not continue to drop as much as they have. The past six months have been
extremely strong for the municipal market, and we could see a period in
which municipals pause and trade in a more narrow range. So I believe it's
likely that the fund's total return will be less dependent on bond prices
rising and more dependent on income.
FUND FACTS
GOAL: to provide high current
income exempt from
California state and federal
income taxes by investing
primarily in investment-grade
California municipal securities
START DATE: November 27,
1989
SIZE: as of August 31, 1995,
more than $394 million
MANAGER: Jonathan Short,
since March 1995; manager,
Fidelity California Tax-Free
Insured, Fidelity California
Tax-Free High Yield, and
Spartan California
Intermediate Municipal
Portfolios, since March 1995;
Spartan Arizona Municipal
and Fidelity Minnesota
Tax-Free Portfolios, as of
October 1, 1995; joined
Fidelity in 1990
(checkmark)
JONATHAN SHORT ON HIS
OUTLOOK FOR THE CALIFORNIA
ECONOMY:
"The California economy
appears to have hit bottom
and I expect the state to
experience moderate
economic growth going
forward. However, I do not
expect this growth to be
robust. Employment is
starting to grow, primarily as a
result of the expanding
entertainment and service
sectors. But, job growth will
continue to be hindered by the
ongoing downsizing in the
defense industry. Although
new home construction
activity continues to remain
low and the housing sector
has yet to show any signs of a
rebound, home prices finally
appear to be stabilizing. This
price stabilization should add
some support to the housing
market and could eventually
provide a boost for the
economy. A positive sign has
been retail sales, which have
experienced growth over that
past two years and actually
look reasonably healthy. In
summary, I am cautiously
optimistic since I expect the
state's economy to show
gradual improvement."
SPARTAN CALIFORNIA MUNICIPAL HIGH YIELD PORTFOLIO
INVESTMENT CHANGES
TOP FIVE SECTORS AS OF AUGUST 31, 1995
% OF FUND'S % OF FUND'S INVESTMENT
INVESTMENTS S
IN THESE SECTORS
6 MONTHS AGO
Special Tax 22.0 19.7
Health Care 15.3 19.8
Lease Revenue 15.1 19.7
Electric Revenue 9.5 7.9
Water & Sewer 7.4 6.3
AVERAGE YEARS TO MATURITY AS OF AUGUST 31, 1995
6 MONTHS AGO
Years 17.4 19.2
AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY DOLLAR
AMOUNT.
DURATION AS OF AUGUST 31, 1995
6 MONTHS AGO
Years 8.0 8.6
DURATION SHOWS HOW MUCH A BOND FUND'S PRICE FLUCTUATES WITH CHANGES IN
COMPARABLE INTEREST RATES. IF RATES RISE 1%, FOR EXAMPLE, A FUND WITH A
FIVE-YEAR DURATION IS LIKELY TO LOSE ABOUT 5% OF ITS VALUE. OTHER FACTORS
ALSO CAN INFLUENCE A BOND FUND'S PERFORMANCE AND SHARE PRICE. ACCORDINGLY,
A BOND FUND'S ACTUAL PERFORMANCE MAY DIFFER FROM THIS EXAMPLE.
QUALITY DIVERSIFICATION (MOODY'S RATINGS)
AS OF AUGUST 31, 1995 AS OF FEBRUARY 28, 1995
Aaa 34.3%
Aa, A 33.6%
Baa 18.2%
Caa 0.8%
Non-rated 7.2%
Short-term and other
investments 5.9%
Aaa 26.2%
Aa, A 38.6%
Baa 15.5%
Caa 0.7%
Non-rated 13.5%
Short-term and other
investments 5.5%
Row: 1, Col: 1, Value: 34.3
Row: 1, Col: 2, Value: 33.6
Row: 1, Col: 3, Value: 18.2
Row: 1, Col: 4, Value: 1.8
Row: 1, Col: 5, Value: 7.2
Row: 1, Col: 6, Value: 5.9
Row: 1, Col: 1, Value: 26.2
Row: 1, Col: 2, Value: 38.6
Row: 1, Col: 3, Value: 15.5
Row: 1, Col: 4, Value: 2.0
Row: 1, Col: 5, Value: 13.5
Row: 1, Col: 6, Value: 5.5
SHOWN AS A PERCENTAGE OF THE FUND'S INVESTMENTS. WHERE MOODY'S RATINGS ARE
NOT AVAILABLE, WE HAVE USED S&P RATINGS. UNRATED DEBT SECURITIES THAT ARE
EQUIVALENT TO BA AND BELOW ACCOUNT FOR 0.0% AND 4.3% OF THE FUND'S
INVESTMENTS AT AUGUST 31, 1995, AND FEBRUARY 28, 1995, RESPECTIVELY.
SPARTAN CALIFORNIA MUNICIPAL HIGH YIELD PORTFOLIO
INVESTMENTS AUGUST 31, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investments
MUNICIPAL BONDS - 94.1%
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
CALIFORNIA - 94.1%
Alameda County Ctfs. of Prtn. Rfdg.
(Santa Rita Jail Proj.) 5.375% 6/1/09
(MBIA Insured) Aaa $ 3,100,000 $ 3,065,125
Alameda Hsg. Auth. Multi-Family Hsg. Rev.
(Independence Apts.) Series A, 7.50%
2/20/31 (GNMA Coll.) - 1,770,000 1,820,888
Anaheim Pub. Fing. Auth. Rev. 6.45%
12/28/18 (MBIA Insured) Aaa 3,000,000 3,138,750
Anaheim Pub. Fing. Auth. Tax Allocation Rev.
(Cap. Appreciation Redev. Proj.) 0%
12/1/06 (MBIA Insured) Aaa 5,000,000 2,731,250
Buena Park Commty. Redev. Agcy. Tax Allocation
Rfdg. (Central Business Dist. Proj.) 7.10%
9/1/14 BBB+ 1,500,000 1,533,750
Burbank Redev. Agcy. Tax Allocation Series A:
5.75% 12/1/08 Baa1 2,355,000 2,251,969
6% 12/1/23 Baa1 1,950,000 1,784,250
California Edl. Facs. Auth. Rev.
(Univ. of San Francisco Proj.) 7.30%
10/1/20 (MBIA Insured) Aaa 1,000,000 1,098,750
California Gen. Oblig.:
Unltd. Tax 6% 9/1/03 A1 5,000,000 5,331,250
Unltd. Tax 6.40% 2/1/05 A1 1,690,000 1,833,650
4.50% 9/1/05 (AMBAC Insured) Aaa 2,000,000 1,882,500
California Health Facs. Fing. Auth. Rev.:
(Children's Hosp.) Series A, 7.50%
10/1/20 (MBIA Insured) Aaa 2,450,000 2,707,250
(Gould Med. Foundation)
Series A, 7.30% 4/1/20 A 1,500,000 1,687,500
(Los Medanos Health Care Corp.)
Series A, 7.25% 3/1/20 A 1,500,000 1,539,375
(Mills-Peninsula Hosp.)
Series A, 7.875% 1/15/12 A- 2,000,000 2,142,500
California Hsg. Fin. Agcy. Rev. (Home Mtg.) (b):
Series A, 0% 8/1/23 Aa 3,650,000 433,438
Series C:
8.30% 8/1/19 Aa 1,405,000 1,457,688
0% 8/1/21 Aa 5,870,000 807,125
7.60% 8/1/30 Aa 6,580,000 6,859,650
Series F-2,. 7.25% 8/1/16 Aa 4,620,000 4,914,525
California Pub. Cap. Impt. Fing. Auth. Rev.
(Pooled Proj.) Series B, 8.10% 3/1/18
(MBIA Insured) Aaa 1,855,000 2,017,313
California Pub. Wks. Board Lease Rev.:
Rfdg. (Dept. Correction State Prisons)
Series A, 5.25% 12/1/13
(AMBAC Insured) Aaa 1,355,000 1,255,069
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
California Pub. Wks. Board Lease Rev. - continued
(California University Proj.):
Series A:
6.50% 9/1/04 A $ 1,090,000 $ 1,174,475
5.50% 6/1/14 A 6,475,000 5,924,625
Series B, 6.40% 12/1/09 A1 1,000,000 1,036,250
California Statewide Commtys. Dev. Corp.
Ctfs. of Prtn.:
Rfdg. (Insured Health Facs.) (Eskaton, Inc.)
5.875% 5/1/20 A 785,000 726,125
Rfdg. (Insured Hosp.) (Triad Healthcare)
6.25% 8/1/06 A 2,000,000 2,002,500
(Childrens Hosp.) 5% 12/1/14 Aa 1,570,000 1,571,963
(Odd Fellows) 5.375% 10/1/13 A+ 2,500,000 2,218,750
(St. Joseph Health Sys.) 5.50% 7/1/23 Aa 3,000,000 2,715,000
(Sisters of Charity Leavenworth Sys.):
5% 12/1/14 Aa 1,315,000 1,132,544
5% 12/1/23 Aa 5,000,000 4,175,000
(Villaview Commty. Hosp., Inc.)
Series A, 7% 9/1/09 A 1,200,000 1,279,500
5.616% 7/1/13 Aaa 4,000,000 3,865,000
5.50% 10/1/23 A+ 2,400,000 2,082,000
California Wtr. Dept. Res. (Central Valley Proj. Rev.):
Series I, 6.95% 12/1/25 Aaa 1,000,000 1,125,000
Series J-1, 7% 12/1/12 (e) Aa 1,000,000 1,133,750
Campbell Ctfs. of Prtn. Rfdg. (Civic Center Proj.)
6% 10/1/18 A 2,565,000 2,446,369
Carson Redev. Agcy. Redev. Proj. Tax Allocation
Rfdg.:
(Area #1):
6.375% 10/1/12 Baa1 1,465,000 1,437,531
6.375% 10/1/16 Baa1 1,000,000 968,750
(Area #2) 5.875% 10/1/09 Baa 2,000,000 1,905,000
Castaic Lake Wtr. Agcy. Ctfs. of Prtn. Rfdg.:
Rfdg. (Wtr. Sys. Impt. Proj.):
Series A, 7% 8/1/13 (MBIA Insured) Aaa 1,580,000 1,791,325
7% 8/1/11 (MBIA Insured) Aaa 1,500,000 1,711,875
Central California Joint Powers Health Fing. Auth.
Ctfs. of Prtn. (Commty. Hosp. of Central
California Proj.):
5.25% 2/1/13 A 4,000,000 3,470,000
5% 2/1/23 A 7,920,000 6,256,800
Central Valley Fing. Auth. Rev. (Cogeneration Proj.)
(Carson Ice Gen. Proj.):
6% 7/1/09 BBB- 3,050,000 2,996,625
6.10% 7/1/13 BBB- 1,000,000 970,000
6.20% 7/1/20 BBB- 1,450,000 1,399,250
Clovis Unified School Dist. Series B, 0% 8/1/03
(MBIA Insured) Aaa 3,485,000 2,348,019
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Coalinga Ctfs. of Prtn. 7% 4/1/10 BBB+ $ 1,655,000 $ 1,686,031
Contra Costa County Ctfs. of Prtn. (Merrithew
Mem. Hosp.) (Cap. Appreciation) 0%
11/1/14 A1 3,000,000 922,500
Contra Costa Trans. Auth. (Sales Tax Rev.)
Series A, 6% 3/1/05 (FGIC Insured) Aaa 1,030,000 1,107,250
Desert Hosp. Dist. Rev. Ctfs. of Prtn.
6.392% 7/28/20 (CGIC Insured) Aaa 8,000,000 8,150,000
Duarte Ctfs of Prtn. (City of Hope Nat'l.
Med. Ctr.) 6.25% 4/1/23 Baa1 2,000,000 1,870,000
East Bay Muni. Util. Dist. Wtr. Sys. Rev. Rfdg.:
5.75% 6/1/04 (MBIA Insured) Aaa 1,000,000 1,063,750
6% 6/1/12 (FGIC Insured) Aaa 1,000,000 1,006,250
Eastern Muni. Wtr. Dist. Wtr. & Swr. Rev. Ctfs.
of Prtn. 6.75% 7/1/12 (FGIC Insured) Aaa 2,000,000 2,205,000
Fairfield-Suisun Swr. Dist. Swr. Rev. Rfdg.
Series A:
0% 5/1/07 (MBIA Insured) Aaa 1,635,000 864,506
0% 5/1/08 (MBIA Insured) Aaa 2,085,000 1,029,469
0% 5/1/09 (MBIA Insured) Aaa 2,080,000 959,400
Folsom Pub. Fing. Auth. Local Agcy. Rev.
Series A, 7.25% 10/1/10 BBB+ 1,285,000 1,326,763
Fontana Redev. Agcy. Tax Allocation Rfdg.
(Yurupa Hills):
Series 1992 A, 7.10% 10/1/23 BBB 2,000,000 2,032,500
Series A, 7% 10/1/14 BBB+ 1,900,000 1,935,625
Foothill/Eastern Trans. Toll Rd. Rev. Sr. Lien
Series A, 6% 1/1/16 BBB- 8,000,000 7,490,000
Industry Urban Ind. Dev. Agcy.
(Civic Recreational Proj.#1):
Rfdg. Series A, 7.375% 5/1/12 - 8,600,000 8,879,500
7.30% 5/1/06 - 4,000,000 4,140,000
7.375% 5/1/15 - 1,140,000 1,177,050
Inglewood Ctfs. of Prtn. (Civic Center Impt. Proj.)
7% 8/1/19 A 1,000,000 1,025,000
Irvine Ranch Wtr. Dist. Joint Pwr. Agcy.
Local Pool Rev.:
7.80% 2/15/08 A+ 1,560,000 1,643,850
7.875% 2/15/23 A+ 5,500,000 5,788,750
8.25% 8/15/23 A+ 16,365,000 17,571,919
King Ctfs. of Prtn. 7.50% 7/1/04 - 2,800,000 3,006,500
Kings River Conservation Dist.
6.375% 1/1/12 Aa 2,000,000 2,057,500
Los Angeles Ctfs. of Prtn. (Health Facs.
Construction Loan) (Bay Harbor Hosp.)
7.30% 4/1/20 A 1,000,000 1,050,000
Los Angeles Dept. of Wtr. & Pwr. Elec. Plant
Rev. 6% 11/15/03 (MBIA Insured) Aa 2,000,000 2,165,000
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Los Angeles County Ctfs. of Prtn.:
(Correctional Facs.)(Cap. Appreciation)
0% 9/1/11 (MBIA Insured) Aaa $ 6,400,000 $ 2,448,000
(Disney Parking Proj.):
(Cap. Appreciation) 0% 9/1/10 Baa1 2,980,000 1,087,700
0% 9/1/11 Baa1 6,270,000 2,108,288
0% 3/1/12 Baa1 2,180,000 700,325
0% 3/1/13 Baa1 2,750,000 818,125
0% 9/1/13 Baa1 3,215,000 924,313
0% 9/1/15 Baa1 3,815,000 944,213
0% 9/1/18 Baa1 7,500,000 1,509,375
0% 3/1/19 Baa1 3,175,000 615,156
Los Angeles County Metropolitan Trans. Auth.
Sales Tax Rev.:
Rfdg. Series A, 5% 7/1/21 (FGIC Insured) Aaa 2,100,000 1,816,500
Rfdg. Second Series A, 5.90% 7/1/04
(AMBAC Insured) Aaa 2,135,000 2,295,125
(Prop C) Series A, 5.90% 7/1/08
(AMBAC Insured) Aaa 1,070,000 1,124,838
Madera County Ctfs. of Prtn. (Valley Children's
Hospital) 6.25% 3/15/05 (MBIA Insured) Aaa 500,000 539,375
Metropolitan Wtr. Dist. Southern California
Wtrwks. Rev.:
5% 3/1/02 Aaa 1,250,000 1,281,250
5.75% 8/12/18 Aa 5,000,000 4,806,250
Modesto Ctfs. of Prtn.:
(Commty. Ctr. Refing. Proj.) Series A, 5.60%
11/1/14 (AMBAC Insured) Aaa 1,370,000 1,316,913
(Golf Course Refing. Proj.) Series B, 5%
11/1/23 (AMBAC Insured) Aaa 1,585,000 1,363,100
Modesto Irrigation Dist. Ctfs. of Prtn. Rfdg. &
Cap. Impts. Series A, 0% 10/1/10
(MBIA Insured) Aaa 2,270,000 950,563
Northern California Pwr. Agcy. Pub. Pwr. Rev.:
Rfdg. (Geothermal Proj.) Series A, 5.80%
7/1/09 (AMBAC Insured) Aaa 5,675,000 5,816,875
Rfdg. (Geothermal Proj. #3)
Series A, 5.50% 7/1/05 (AMBAC Insured) Aaa 2,250,000 2,337,188
7.50% 7/1/23 (AMBAC Insured)
(Pre-Refunded to 7/1/21 @ 100)(d) Aaa 1,170,000 1,405,463
Norwalk Redev. Agcy. Tax Allocation
(Norwalk Redev. Proj. #1) 7.15% 12/1/15 - 3,900,000 4,046,250
Ontario Redev. Fing. Auth. Rev.
(Ctr. City Cimarron Proj.#1):
0% 8/1/08 (MBIA Insured) Aaa 3,255,000 1,586,813
0% 8/1/09 (MBIA Insured) Aaa 3,260,000 1,483,300
Orange County Dev. Agcy. Tax Allocation
(Santa Ana Heights Proj.) 6.125% 9/1/23 Caa 3,500,000 3,058,125
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Orange County Local Trans. Auth. Sales Tax
Rev. First Series-Measure M, 6% 2/15/08
(AMBAC Insured) Aaa $ 1,250,000 $ 1,295,313
Palm Desert Fing. Auth. Tax Allocation
6.3675% 4/1/22 (MBIA Insured) Aaa 5,500,000 5,623,750
Palm Springs Ctfs. of Prtn. (Muni. Golf Course
Expansion Proj.) 7.40% 11/1/18 BBB+ 1,500,000 1,554,375
Palomar Pomerado Health Sys. Rev. 0%
11/1/05 (MBIA Insured) Aaa 3,075,000 1,806,563
Pasadena Ctfs. of Prtn. Rfdg. (Old Pasadena
Pkg. Facs. Proj.) 6.25% 1/1/18 A1 1,605,000 1,651,144
Pleasanton Joint Pwrs. Fin. Auth. Reassessment:
Series A:
5.80% 9/2/02 Baa 2,500,000 2,578,125
6% 9/2/05 Baa 1,815,000 1,892,138
6.15% 9/2/12 Baa 5,255,000 5,163,038
Port Oakland Port. Rev. Rfdg. Series F:
(Cap. Appreciation) 0% 11/1/08
(MBIA Insured) Aaa 3,500,000 1,680,000
0% 11/1/06 (MBIA Insured) Aaa 1,250,000 689,063
Rancho Mirage Joint Pwrs. Fing. Auth.
Ctfs. of Prtn. (Eisenhower Mem. Hosp.)
7% 3/1/22 A 1,000,000 1,031,250
Rancho Wtr. Dist. Fing. Auth. Rev. Rfdg.
5.875% 11/1/10 (FGIC Insured) Aaa 2,500,000 2,550,000
Richmond Joint Pwrs. Fing. Auth. Rev. Series B:
7% 5/15/07 A- 2,375,000 2,544,219
7.25% 5/15/13 A- 2,500,000 2,568,750
Riverside County Asset Leasing Corp. Leasehold
Rev. (Riverside County Hosp. Proj.) Series A:
5.75% 6/1/01 A 1,250,000 1,265,625
6.375% 6/1/09 A 3,000,000 3,052,500
6.50% 6/1/12 A 5,500,000 5,644,375
Riverside County Redev. Agcy. Tax Allocation
(Redev. Proj. #4) Series A:
7.50% 10/1/10 BBB 1,000,000 1,051,250
7.50% 10/1/26 BBB 2,500,000 2,603,125
Riverside County. Trans. Commission Sales Tax
Rev. Series A, 5.30% 6/1/02
(AMBAC Insured) Aaa 1,000,000 1,033,750
Riverside Unified School Dist. Ctfs. of Prtn.
(Cap. Appreciation Land Acquisition Proj.)
Series B, 0% 9/1/26 (FSA Insured) Aaa 1,835,000 1,568,925
Sacramento Cogeneration Auth. Cogeneration
Proj. Rev. (Proctor & Gamble Proj.):
5.40% 7/1/98 BBB- 1,000,000 1,003,750
5.70% 7/1/00 BBB- 1,200,000 1,210,500
6.375% 7/1/10 BBB- 800,000 806,000
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Sacramento Muni. Util. Dist. Elec. Rev.
1.76% 11/15/08 (FGIC Insured) Aaa $ 7,000,000 $ 6,037,500
6.30% 8/15/18 (FGIC Insured) Aaa 3,500,000 3,583,125
San Bernardino County Ctfs. of Prtn.:
(Cap. Facs. Proj.) Series B, 6.875%
8/1/24 (Escrowed to Maturity)(d) Baa1 2,500,000 2,812,500
(Med. Ctr. Fin.) 5.50% 8/1/22 Baa1 4,500,000 3,898,125
San Diego County Reg. Trans. Commission Sales
Tax Rev. Second Sr. Series A, 5% 4/1/07,
(FGIC Insured) Aaa 1,500,000 1,455,000
San Diego County Wtr. Auth. Ctfs. of Prtn.
5.632% 4/25/07 (FGIC Insured) Aaa 2,500,000 2,537,500
San Francisco City & County Gen. Oblig.
7.20% 9/1/01 A1 625,000 673,438
San Francisco City & County Redev. Agcy.
7.75% 9/1/06 - 6,000,000 6,412,500
San Francisco City & County Redev. Fing. Auth.
Tax Allocation Rfdg. (Cap. Appreciation)
(Redev. Proj.) Series B, 0% 8/1/10,
(MBIA Insured) Aaa 1,475,000 625,031
San Francisco City & County Swr. Rev. Series B:
0% 10/1/06 (FGIC Insured) Aaa 3,690,000 2,043,338
0% 10/1/08 (FGIC Insured) Aaa 1,600,000 772,000
San Joaquin County Ctfs. of Prtn.
(Gen. Hosp. Proj.) 6.25% 9/1/13 A 2,500,000 2,434,375
San Jose Redev. Agcy. Tax. Allocation
(Merged Area Redev. Proj.):
6% 8/1/07 (MBIA Insured) Aaa 1,000,000 1,066,250
6% 8/1/08 (MBIA Insured) Aaa 1,300,000 1,379,625
Santa Barbara Ctfs. of Prtn. (American Baptist
Hosp.) 7.40% 5/15/15 A 2,000,000 2,120,000
Santa Clara County Fing. Auth. Lease Rev.
(VMC Replacement Proj.) Series A, 7.75%
11/15/08 (AMBAC Insured) Aaa 1,175,000 1,433,500
Santa Margarita-Dana Point Auth. Rev.
(Impt. Dists. 1-2-2A & 8)
7.25% 8/1/08 (MBIA Insured) Aaa 1,780,000 2,093,725
Selma Redev. Agcy. Tax Allocation
(Selma Redev. Proj.) 8.10% 8/1/13 - 825,000 849,750
Sequoia Hosp. Dist. Rev. Rfdg.:
5.375% 8/15/13 Baa1 4,000,000 3,440,000
5.375% 8/15/23 Baa1 4,330,000 3,539,775
South Orange County Pub. Fin. Auth.:
(Spl. Tax Rev. Foothill Area C)
8% 8/15/09 (FGIC Insured) Aaa 3,650,000 4,535,125
(Spl. Tax Rev. Sr. Lien)
7% 9/1/10 (MBIA Insured) Aaa 3,300,000 3,766,125
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Southern California Pub. Pwr. Auth. Pwr. Proj. Rev.:
Rfdg. (Mead Phoenix Proj.) SeriesA, 4.875%
7/1/20 (AMBAC Insured) Aaa $ 2,190,000 $ 1,825,913
Rfdg. Series A, 5% 7/1/22
(MBIA Insured) Aaa 2,565,000 2,212,313
(Multiple Proj.) 6.75% 7/1/11 A 2,500,000 2,659,375
Sulpher Springs Unified School Dist.:
Unltd. Tax Series A, 0% 9/1/12
(MBIA Insured) Aaa 2,750,000 990,000
Series A, 0% 9/1/08 (MBIA Insured) Aaa 2,745,000 1,321,031
Univ. of California Revs. Rfdg. (Multiple Purp.
Projs.) Series C, 4.70% 9/1/06
(AMBAC Insured) Aaa 1,750,000 1,671,250
Upland Ctfs. Prtn. (San Antonio Commty. Hosp.) :
5.25% 1/1/08 A 1,850,000 1,715,875
5.25% 1/1/13 A 3,000,000 2,606,250
Vista Unified School Dist. Ctfs. of Prtn. 0%
9/1/11 (MBIA Insured) Aaa 8,585,000 2,843,781
West & Central Basin Fing. Auth. Rev.:
Rfdg. (West Basin Proj.) Series A,
5% 8/1/10 (FGIC Insured) Aaa 1,155,000 1,075,592
(West Basin Proj.) Series A,
5% 8/1/10 (AMBAC Insured) Aaa 1,750,000 1,629,677
West Covina Ctfs. of Prtn. (Queen of the Valley
Hosp.) 6.50% 8/15/24 A 1,100,000 1,105,500
TOTAL MUNICIPAL BONDS
(Cost $366,663,259) 371,727,519
MUNICIPAL NOTES (A) - 5.9%
CALIFORNIA - 5.9%
California Poll. Cont. Fin. Auth. Solid Waste Disp.
Rev. (Shell Oil Co.)(Martinez Proj.)
Series 1994A, 3.60% 10/1/24,
VRDN (b) VMIG 1 4,800,000 4,800,000
California Poll. Cont. Fing. Auth. Resource
Recovery Rev., VRDN (b):
(Burney Forest Prod. Proj.) 3.65%,
LOC Nat'l. Westminster Bank P-1 1,300,000 1,300,000
(Delano Proj.) Series 1991, 3.35%,
LOC Algemene/ABN-AMRO Bank P-1 3,300,000 3,300,000
(OMS Equity of Stanislaus) Series 1987,
3.55%, LOC Swiss Bank VMIG 1 2,700,000 2,700,000
MUNICIPAL NOTES (A) - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
California School Cash Reserve Program TRAN
(Authority Pool Bonds) Series 1995 A, 4.75%
7/3/96, LOC Industrial Bank of Japan Ltd.
(MBIA Insured) MIG 1 $ 3,000,000 $ 3,020,490
Los Angeles County Metropolitan Trans. Auth.
Series 1993-A, 3.35%
(MBIA Insured), VRDN VMIG 1 6,300,000 6,300,000
Southern California Pub. Pwr. Auth. Rev.
(Transmission Proj.) Series 1991, 3.15%
(AMBAC Insured) LOC Swiss Bank,
VRDN VMIG 1 1,700,000 1,700,000
TOTAL MUNICIPAL NOTES
(Cost $23,124,161) 23,120,490
TOTAL INVESTMENTS - 100%
(Cost $389,787,420) $ 394,848,009
FUTURES CONTRACTS
EXPIRATION UNDERLYING FACE UNREALIZED
DATE AMOUNT AT VALUE GAIN/(LOSS)
PURCHASED
16 Municipal Bond Contracts Sept. 1995 $ 1,831,000 $ 54,917
46 Municipal Bond Contracts Dec. 1995 5,215,250 16,083
TOTAL FUTURES CONTRACTS $ 71,000
THE FACE VALUE OF FUTURES SOLD AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 1.8%
SECURITY TYPE ABBREVIATIONS
TRAN - Tax and 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) Standard & Poor's Corporation credit ratings are used in the absence of
a rating by Moody's Investors Service, Inc.
(d) Security collateralized by an amount sufficient to pay interest and
principal.
(e) A portion of the security was pledged to cover margin requirements for
futures contracts. At the period end, the value of securities pledged
amounted to $257,361.
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 54.5% AAA, AA, A 68.1%
Baa 10.7% BBB 11.8%
Ba 0.0% BB 0.0%
B 0.0% B 0.0%
Caa 0.8% 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 7.2%. FMR has
determined that unrated debt securities that are lower quality account for
0.0% of the total value of investment in securities.
The distribution of municipal securities by revenue source, as a percentage
of total value of investment in securities, is as follows:
Special Tax 22.0%
Health Care 15.3
Lease Revenue 15.1
Others
(individually less than 10%) 47.6
TOTAL 100.0%
INCOME TAX INFORMATION
At August 31, 1995, the aggregate cost of investment securities for income
tax purposes was $389,967,770. Net unrealized appreciation aggregated
$4,880,239, of which $12,043,370 related to appreciated investment
securities and $7,163,131 related to depreciated investment securities.
At February 28, 1995, the fund had a capital loss carryforward of
approximately $2,477,438 which will expire on February 28, 2003.
At February 28, 1995, the fund elected to defer to its fiscal year ending
February 29, 1996, $8,177,757 of losses recognized during the period
November 1, 1994 to February 28, 1995.
At February 28 1995, the fund was required to defer $876,175 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>
AUGUST 31, 1995 (UNAUDITED)
5.ASSETS 6. 7.
8.Investment in securities, at value (cost $389,787,420) 9. $ 394,848,009
- -
See accompanying schedule
10.Receivable for investments sold 11. 2,590,098
12.Interest receivable 13. 4,790,957
14.Receivable for daily variation on futures contracts 15. 27,853
16. 17.TOTAL ASSETS 18. 402,256,917
19.LIABILITIES 20. 21.
22.Payable to custodian bank $ 235,489 23.
24.Payable for investments purchased 6,927,010 25.
26.Payable for fund shares redeemed 28,205 27.
28.Distributions payable 399,042 29.
30.Accrued management fee 181,002 31.
32. 33.TOTAL LIABILITIES 34. 7,770,748
35.36.NET ASSETS 37. $ 394,486,169
38.Net Assets consist of: 39. 40.
41.Paid in capital 42. $ 403,188,573
43.Accumulated undistributed net realized gain (loss) 44. (13,833,993)
on investments
45.Net unrealized appreciation (depreciation) 46. 5,131,589
on investments
47.48.NET ASSETS, for 38,624,717 shares outstanding 49. $ 394,486,169
50.51.NET ASSET VALUE, offering price and redemption 52. $10.21
price per share ($394,486,169 (divided by) 38,624,717 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED AUGUST 31, 1995 (UNAUDITED)
53.54.INTEREST INCOME 55. $ 12,493,716
56.EXPENSES 57. 58.
59.Management fee $ 1,102,615 60.
61.Non-interested trustees' compensation 920 62.
63. 64.TOTAL EXPENSES 65. 1,103,535
66.67.NET INTEREST INCOME 68. 11,390,181
69.REALIZED AND UNREALIZED GAIN (LOSS) 71. 72.
70.Net realized gain (loss) on:
73. Investment securities (1,437,976) 74.
75. Futures contracts (1,479,283) (2,917,259)
76.Change in net unrealized appreciation (depreciation) 77. 78.
on:
79. Investment securities 9,637,696 80.
81. Futures contracts 865,986 10,503,682
82.83.NET GAIN (LOSS) 84. 7,586,423
85.86.NET INCREASE (DECREASE) IN NET ASSETS 87. $ 18,976,604
RESULTING FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS YEAR
ENDED ENDED
AUGUST 31, 1995 FEBRUARY 28,
(UNAUDITED) 1995
88.INCREASE (DECREASE) IN NET ASSETS
89.Operations $ 11,390,181 $ 26,733,413
Net interest income
90. Net realized gain (loss) (2,917,259) (7,835,729)
91. Change in net unrealized appreciation (depreciation) 10,503,682 (31,637,782)
92. 93.NET INCREASE (DECREASE) IN NET ASSETS 18,976,604 (12,740,098)
RESULTING FROM OPERATIONS
94.Distributions to shareholders (11,390,181) (26,733,413)
From net interest income
95. From net realized gain - (8,512,355)
96. 97.TOTAL DISTRIBUTIONS (11,390,181) (35,245,768)
98.Share transactions 24,357,994 80,085,080
Net proceeds from sales of shares
99. Reinvestment of distributions 8,978,216 28,631,425
100. Cost of shares redeemed (42,217,715) (231,670,779)
101. Redemption fees 21,005 87,648
102.103. (8,860,500) (122,866,626)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM SHARE TRANSACTIONS
104. (1,274,077) (170,852,492)
105.TOTAL INCREASE (DECREASE) IN NET ASSETS
106.NET ASSETS 107. 108.
109. Beginning of period 395,760,246 566,612,738
110. End of period $ 394,486,169 $ 395,760,246
111.OTHER INFORMATION 113. 114.
112.Shares
115. Sold 2,403,823 8,049,380
116. Issued in reinvestment of distributions 885,754 2,869,048
117. Redeemed (4,161,389) (23,261,421)
118. Net increase (decrease) (871,812) (12,342,993)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
119. SIX MONTHS YEARS ENDED FEBRUARY 28, TEN MONTHS YEARS ENDED APRIL 30,
ENDED ENDED
AUGUST 31, 199 FEBRUARY 28,
5
120. (UNAUDITED) 1995 1994C 1993 1992 1991
121.SELECTED PER-SHARE DATA
122.Net asset value,
beginning of period $ 10.020 $ 10.930 $ 11.330 $ 10.540 $ 10.240 $ 9.760
123.Income from
Investment Operations .288 .603 .631 .543 .663 .706
Net interest income
124. Net realized and
unrealized gain (loss) .189 (.732) (.012) .858 .297 .472
125. Total from
investment operations .477 (.129) .619 1.401 .960 1.178
126.Less Distributions (.288) (.603) (.631) (.543) (.663) (.706)
From net interest income
127. From net realized
gain on investments - (.180) (.330) (.070) - -
128. In excess of net
realized gain on
investments - - (.060) - - -
129. Total distributions (.288) (.783) (1.021) (.613) (.663) (.706)
130.Redemption fees added
to paid in capital .001 .002 .002 .002 .003 .008
131.Net asset value,
end of period $ 10.210 $ 10.020 $ 10.930 $ 11.330 $ 10.540 $ 10.240
132.TOTAL RETURN B 4.83% -.85% 5.63% 13.76% 9.66% 12.52%
133.RATIOS AND SUPPLEMENTAL DATA
134.Net assets, end of
period (000 omitted) $ 394,486 $ 395,760 $ 566,613 $ 573,871 $ 479,137 $ 281,725
135.Ratio of expenses
to average net assets .55%A .55% .52% .40%A .36% .19%
136.Ratio of expenses to
average net assets before .55%A .55% .55% .55%A .55% .55%
expense reductions
137.Ratio of net interest
income to average net
assets 5.69%A 6.04% 5.58% 6.07%A 6.36% 7.02%
138.Portfolio turnover
rate 40%A 30% 54% 26%A 13% 15%
</TABLE>
A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED. THE TOTAL RETURNS WOULD HAVE BEEN
LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
C EFFECTIVE MARCH 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INTEREST INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
FINANCIAL HIGHLIGHTS
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 to measure 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 AUGUST 31, 1995 PAST 6 PAST 1 LIFE OF
MONTHS YEAR FUND
Spartan California Intermediate Municipal 5.68% 7.57% 5.61%
Lehman Brothers Municipal Bond Index 5.89% 8.87% n/a
Average California Intermediate
Municipal Bond Fund 5.18% 6.77% n/a
Consumer Price Index 1.33% 2.62% 4.87%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year or since the fund
started on December 30, 1993. For example, if you invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment would
be $1,050. You can compare the fund's returns to the performance of the
Lehman Brothers Municipal Bond Index - a broad gauge of the municipal bond
market. To measure how the fund's performance stacks up against its peers,
you can compare it to the average California intermediate municipal bond
fund, which reflects the performance of 30 California intermediate
municipal bond funds with similar objectives tracked by Lipper Analytical
Services over the past six months. Both benchmarks include reinvested
dividends and capital gains, if any. Comparing the fund's performance to
the consumer price index (CPI) helps show how your fund did compared to
inflation. (The CPI returns begin on the month end closest to the fund's
start date.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED AUGUST 31, 1995 PAST 1 LIFE OF
YEAR FUND
Spartan California Intermediate Municipal 7.57% 3.32%
Lehman Brothers Municipal Bond Index 8.87% n/a
Average California Intermediate
Municipal Bond Fund 6.77% n/a
Consumer Price Index 2.62% 2.90%
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
Spartan California lb015
12/31/93 10000.00 10000.00
01/31/94 10114.46 10114.20
02/28/94 9828.19 9852.24
03/31/94 9522.27 9451.06
04/30/94 9579.71 9531.20
05/31/94 9659.48 9613.84
06/30/94 9607.30 9555.10
07/31/94 9783.77 9730.24
08/31/94 9816.77 9763.91
09/30/94 9713.91 9620.58
10/31/94 9559.65 9449.71
11/30/94 9394.31 9278.86
12/31/94 9532.70 9483.09
01/31/95 9774.19 9754.12
02/28/95 9992.53 10037.77
03/31/95 10067.59 10153.10
04/30/95 10078.44 10165.08
05/31/95 10389.38 10489.45
06/30/95 10291.45 10397.67
07/31/95 10419.57 10496.24
08/31/95 10560.65 10629.33
$10,000 OVER LIFE OF FUND: Let's say you invested $10,000 in Spartan
California Intermediate Municipal Portfolio on December 31, 1993, shortly
after the fund started. As the chart shows, by August 31, 1995, the value
of your investment would have grown to $10,561 - a 5.61% increase on your
initial investment. This assumes you still own the fund on August 31, 1995
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 $10,629 - a 6.29% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is no
guarantee of how it will do
tomorrow. Bond prices, for
example, generally 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)
TOTAL RETURN COMPONENTS
DECEMBER 30, 1993
SIX MONTHS YEAR (COMMENCEMENT
ENDED ENDED OF OPERATIONS) TO
AUGUST 31, FEBRUARY 28, FEBRUARY 28,
1995 1995 1994
Dividend return 2.61% 5.05% 0.69%
Capital appreciation
return 3.07% -3.39% -2.41%
Total return 5.68% 1.66% -1.72%
DIVIDEND returns and capital appreciation returns are both part of a bond
fund's total return. A dividend return reflects the actual dividends paid
by the fund. A capital appreciation return reflects both the amount paid by
the fund to shareholders as capital gain distributions and changes in the
fund's share price. Both returns assume the dividends or gains are
reinvested. Capital appreciation and total returns include the effect of
the $5 account closeout fee.
DIVIDENDS AND YIELD
<TABLE>
<CAPTION>
<S> <C> <C> <C>
PERIODS ENDED AUGUST 31, 1995 PAST PAST 6 PAST 1
MONTH MONTHS YEAR
Dividends per share 4.04(cents) 24.00(cents) 48.17(cents)
Annualized dividend rate 4.97% 4.99% 5.13%
30-day annualized yield 4.97% - -
30-day annualized tax-equivalent yield 8.73% - -
</TABLE>
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 $9.60 over
the past month, $9.57 over the past six months, and $9.39 over the past
year, you can compare the fund's income over these three 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 1995 federal and state income tax bracket
but does not reflect payment of the federal alternative minimum tax, if
applicable. If the advisor had not reimbursed certain portfolio expenses
during the period shown, the yield and tax-equivalent yield would have been
4.67% and 8.20%, respectively.
SPARTAN CALIFORNIA INTERMEDIATE MUNICIPAL PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Jonathan Short, Portfolio Manager of Spartan California
Intermediate Portfolio
Q. JONATHAN, HOW HAS THE FUND PERFORMED?
A. For the six- and 12-month periods ended August 31, 1995, the fund had
total returns of 5.68% and 7.57%, respectively. For the same six- and
12-month periods, the average California intermediate tax-free bond fund
returned 5.18% and 6.77%, respectively, as tracked by Lipper Analytical
Services.
Q. MUNICIPAL BONDS HAVE ENJOYED A RALLY SO FAR IN 1995. WHAT WAS DRIVING
THE MARKET'S PERFORMANCE?
A. Several things. Beginning late last year, investors began to expect that
the Federal Reserve Board would move from a tightening mode, in which it
raised interest rates in an effort to stave off possible inflation, to an
easing mode, in which it might cut interest rates. In anticipation of the
Fed lowering interest rates - which it did in July - both the taxable and
tax-free bond markets rallied. Also, demand for municipal bonds held fairly
steady, and bumped against a relatively limited supply. For the first six
months of 1995, the new issue supply of California municipal bonds was 40%
less than it was during the same period the previous year. The relatively
healthy demand and low supply helped the municipal market outperform the
Treasury market during the first quarter of the year. Municipals hit a
rough spot in the spring when the public debate about various federal tax
reform proposals heated up. Investors became worried that some proposals
would, if enacted, adversely affect the tax-exempt status of municipal
bonds. The proposal causing the most worry was the flat tax, under which
all individuals would be taxed at a uniform rate and deductions eliminated.
In my view, it's unlikely that a flat tax will be enacted before 1997, if
ever, and I believe that the market has overreacted. Despite this,
municipal bonds continued to perform well through the end of the summer.
Q. WHY DID THE FUND PERFORM BETTER THAN THE AVERAGE OVER THE PAST SIX
MONTHS?
A. The main factor was its weighting in non-callable bonds, or bonds that
can't be redeemed by their issuer before their scheduled maturity date.
Non-callable bonds have the potential to do well when interest rates rise
or fall, and they performed well as interest rates declined during the past
six months.
Q. DID YOU CHANGE THE WAY IN WHICH YOU SPREAD THE FUND'S INVESTMENTS ACROSS
BONDS WITH VARIOUS MATURITIES?
A. Yes, because the yield curve - which measures the difference in yields
between bonds of various maturities - steepened over the past six months.
In anticipation of that steepening, I began to position the fund so that it
had a heavy weighting in intermediate bonds with maturities between seven
and 10 years, at the beginning of the period. As the yield curve steepened,
those intermediate bonds generally outperformed longer-term intermediate
bonds with maturities of more than 10 years.
Q. YOU'VE ALSO MADE SOME CHANGES
IN THE WAY YOU DISTRIBUTED THE FUND'S INVESTMENTS AMONG BONDS WITH VARIOUS
CREDIT RATINGS. WHAT WAS BEHIND THAT MOVE?
A. Bonds with lower credit quality typically provide investors with a fair
amount of additional yield to compensate for the increased credit risk they
carry. But during the period, the spread between lower-and higher-quality
bonds was narrow. In other words, bonds with lower credit ratings didn't
offer investors much of an incentive in the form of additional yield. So I
increased the fund's stake in bonds rated Aaa by Moody's Investors Service,
to 54.5% of the fund's investments at the end of the period. What's more,
if credit spreads widen out again and lower quality bonds are forced to
offer higher yields, their prices will likely adjust downward.
Q. DOES THE FUND STILL HOLD SOME ORANGE COUNTY BONDS OR BONDS RELATED TO
THE ORANGE COUNTY BANKRUPTCY?
A. Yes, but I want to remind shareholders that during the past six months
the fund didn't hold any investments in uninsured securities issued
directly by Orange County. However, at the end of the period, the fund had
about a 7% stake in insured bonds issued by entities that were participants
in the county's investment pool. The prices of these bonds have risen and
are at or near the level they were prior to Orange County declaring
bankruptcy.
Q. WHAT'S AHEAD FOR THE FUND?
A. Going forward, I'll probably move some of the fund's investments into
bonds with maturities in the slightly shorter or slightly longer end of the
maturity range creating a "barbell" structure. This strategy could benefit
the fund if the yield curve flattens once again. Of course the fund's
performance will be related to the performance of the municipal market in
general.
Q. SO WHAT'S YOUR OUTLOOK?
A. There are a number of things to consider. While I'm optimistic about the
market's prospects from a supply and demand standpoint, interest rates may
not continue to drop as much as they have. The past six months have been
extremely strong for the municipal market, and we could see a period in
which municipals pause and trade in a more narrow range. So I believe it's
likely that the fund's total return will be less dependent on bond prices
rising and more dependent on income.
FUND FACTS
GOAL: to provide high current
income exempt from
California state and federal
income taxes by investing
primarily in investment-grade
intermediate California
municipal securities
START DATE: December 30,
1993
SIZE: as of August 31, 1995,
more than $55 million
MANAGER: Jonathan Short,
since March 1995; manager,
Fidelity California Tax-Free
High Yield Fund, Spartan
California Municipal High
Yield, and Fidelity California
Tax-Free Insured Portfolios,
since March 1995; Spartan
Arizona Municipal and
Fidelity Minnesota Tax-Free
Portfolios, as of October 1,
1995; joined Fidelity in 1990
(checkmark)
JONATHAN SHORT ON HIS
OUTLOOK FOR THE CALIFORNIA
ECONOMY:
"The California economy
appears to have hit bottom
and I expect the state to
experience moderate
economic growth going
forward. However, I do not
expect this growth to be
robust. Employment is
starting to grow, primarily as a
result of the expanding
entertainment and service
sectors. But, job growth will
continue to be hindered by the
ongoing downsizing in the
defense industry. Although
new home construction
activity continues to remain
low and the housing sector
has yet to show any signs of a
rebound, home prices finally
appear to be stabilizing. This
price stabilization should add
some support to the housing
market and could eventually
provide a boost for the
economy. A positive sign has
been retail sales, which have
experienced growth over that
past two years and actually
look reasonably healthy. In
summary, I am cautiously
optimistic since I expect the
state's economy to show
gradual improvement."
SPARTAN CALIFORNIA INTERMEDIATE MUNICIPAL PORTFOLIO
INVESTMENT CHANGES
TOP FIVE SECTORS AS OF AUGUST 31, 1995
% OF FUND'S % OF FUND'S INVESTMENT
INVESTMENTS S
IN THESE SECTORS
6 MONTHS AGO
Water & Sewer 16.7 19.7
Transportation 15.1 9.2
Health Care 15.1 17.3
Lease Revenue 12.7 16.2
Escrowed/Pre-Refunded 10.8 7.6
AVERAGE YEARS TO MATURITY AS OF AUGUST 31, 1995
6 MONTHS AGO
Years 7.8 8.0
AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY DOLLAR
AMOUNT.
DURATION AS OF AUGUST 31, 1995
6 MONTHS AGO
Years 6.0 5.7
DURATION SHOWS HOW MUCH A BOND FUND'S PRICE FLUCTUATES WITH CHANGES IN
COMPARABLE INTEREST RATES. IF RATES RISE 1%, FOR EXAMPLE, A FUND WITH A
FIVE-YEAR DURATION IS LIKELY TO LOSE ABOUT 5% OF ITS VALUE. OTHER FACTORS
ALSO CAN INFLUENCE A BOND FUND'S PERFORMANCE AND SHARE PRICE. ACCORDINGLY,
A BOND FUND'S ACTUAL PERFORMANCE MAY DIFFER FROM THIS EXAMPLE.
QUALITY DIVERSIFICATION (MOODY'S RATINGS)
AS OF AUGUST 31, 1995 AS OF FEBRUARY 28, 1995
Aaa 54.5%
Aa, A 29.3%
Baa 10.8%
Ba, B 0.0%
Non-rated 0.0%
Short-term
investments 5.4%
Aaa 38.5%
Aa, A 34.3%
Baa 8.1%
Ba, B 0.0%
Non-rated 0.0%
Short-term
investments 19.1%
Row: 1, Col: 1, Value: 54.5
Row: 1, Col: 2, Value: 29.3
Row: 1, Col: 3, Value: 10.8
Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: 0.0
Row: 1, Col: 6, Value: 5.5
Row: 1, Col: 1, Value: 38.5
Row: 1, Col: 2, Value: 34.3
Row: 1, Col: 3, Value: 8.1
Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: 0.0
Row: 1, Col: 6, Value: 19.1
SHOWN AS A PERCENTAGE OF THE FUND'S INVESTMENTS. WHERE MOODY'S RATINGS ARE
NOT AVAILABLE, WE HAVE USED S&P RATINGS.
SPARTAN CALIFORNIA INTERMEDIATE MUNICIPAL PORTFOLIO
INVESTMENTS AUGUST 31, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investments
MUNICIPAL BONDS - 94.6%
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
CALIFORNIA - 94.6%
California Gen. Oblig. 6.50% 3/1/02,
(AMBAC Insured) Aaa $ 1,500,000 $ 1,650,000
California Pub. Works Board Lease Rev.:
(California Univ. Projs.)
Series A, 6.10%10/1/06 (e) A 1,210,000 1,264,450
(Dept. Correction State Prisons - Madera)
Series E, 6% 6/1/07 A 590,000 607,700
California Statewide Commty. Dev. Corp.
Ctfs. of Prtn. Rfdg. (Insured Hosp.)
(Triad Healthcare):
5.25% 8/1/97 A 250,000 248,438
5.90% 8/1/01 A 200,000 200,000
6.25% 8/1/06 A 1,000,000 1,001,250
California Trans. Rev. (San Francisco Bay Toll
Bridge) Series A, 4.60% 12/1/05 Aa 1,160,000 1,096,200
California Wtr. Dept. Res. (Cent. Valley Proj.):
Series I, 6.95% 12/1/25 Aaa 500,000 562,500
Series J-2, 5.50% 12/1/01 Aa 500,000 520,625
Carson Redev. Agcy. Rfdg. Redev. Proj.
Area 2 Tax Allocation 5.50% 10/1/02 Baa 100,000 97,875
Castaic Lake Wtr. Agcy. Ctfs. of Prtn. Rfdg.
(Wtr. Sys. Impt. Proj.)
7.25% 8/1/07 (MBIA Insured) Aaa 1,755,000 2,064,319
Chino Basin Fing. Auth. Rev. Rfdg. (Muni. Wtr.
Dist. Swr. Sys. Proj.) 7.0% 8/1/05
(AMBAC Insured) Aaa 1,185,000 1,373,119
Clovis Unified School Dist. Series B, 0%
8/1/02 (MBIA Insured) Aaa 300,000 214,125
East Bay Reg. Park Dist. Series C, 6.50%
9/1/01 (FGIC Insured) Aaa 500,000 550,625
Escondido Joint Pwrs. Fing. Auth. Lease Rev.
(California Ctr. for the Arts) 0% 9/1/04
(AMBAC Insured) Aaa 570,000 356,250
Foothill/Eastern Trans. Corridor A (California Toll
Td. Rev.) Sr. Lien Series A, 0% 1/1/04 BBB- 1,000,000 580,000
Inglewood Hosp. Rev. (Daniel Freeman Hosp.
Inc.) 6.50% 5/1/01 A 1,000,000 1,056,250
La Quinta Redev. Agcy. Tax Allocation Rfdg.
(Redev. Proj. Area #1):
7.30% 9/1/06 (MBIA Insured) Aaa 620,000 733,925
7.30% 9/1/11 (MBIA Insured) Aaa 555,000 651,431
Los Angeles Convention & Exhibition Ctr. Auth.
Ctfs. of Prtn. Rfdg. Series A, 7.375% 8/15/18
(Pre-Refunded to 8/15/99 @ 101.5)(d) Aaa 2,500,000 2,818,750
Los Angeles County Metropolitan Trans. Auth.
(Sales Tax Rev.):
Series A:
5.30% 7/1/05 (MBIA Insured) Aaa 2,000,000 2,040,000
6.75% 7/1/11 Aaa 1,250,000 1,418,750
Second Series A, 5.90% 7/1/02
(AMBAC Insured) Aaa 1,200,000 1,287,000
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Los Angeles Dept. of Wtr. & Pwr. Elec. Plant Rev.:
9% 10/15/01 Aa $ 110,000 $ 133,650
6% 11/15/03 (MBIA Insured) Aa 525,000 568,313
Los Angeles Wastewtr. Sys. Rev. Rfdg. Series A,
9% 6/1/00 (MBIA Insured) Aaa 500,000 595,000
Madera County Ctfs. of Prtn. (Valley Children's
Hospital) 6.25% 3/15/05 (MBIA Insured) Aaa 480,000 517,800
Metropolitan Wtr. Dist. Southern California
Wtrwks. Rev. 5% 3/1/02 Aaa 500,000 512,500
Orange County Wtr. Dist. Ctfs. of Prtn.
Series A, 5.50% 8/15/09
(AMBAC Insured) Aaa 1,000,000 962,500
Port Oakland Port. Rev. Rfdg. Series F, 0%
11/1/05 (MBIA Insured) Aaa 300,000 177,375
Rancho Wtr. Dist. Fing. Auth. Rev. Rfdg.:
6.50% 11/1/00 (FGIC Insured) Aaa 1,315,000 1,434,994
6.50% 11/1/03 (FGIC Insured) Aaa 1,300,000 1,443,000
Redlands Ctfs. of Prtn. Rfdg.
(Wtr. Treatment Facs. Proj.)
4.50% 9/1/15 (FGIC Insured) Aaa 930,000 935,813
Riverside County Asset Leasing Corp. Leasehold
Rev. (Riverside County Hosp. Proj.)
Series A, 6.0% 6/1/03 A 2,000,000 2,045,000
Riverside County Trans. Commission (Sales Tax
Rev.) Series A, 6.625% 6/1/02
(AMBAC Insured) Aaa 1,045,000 1,162,563
Rosemead Redev. Agcy. (Subordinated Lien
Tax Allocation Proj. Area 1)
0% 10/1/98 (Escrowed to Maturity)(d) A- 1,120,000 980,000
Roseville Joint Unified High School Dist. Series B,
0% 8/1/00 (FGIC Insured) Aaa 1,060,000 848,000
Sacramento Cogeneration Auth. Cogeneration
Proj. Rev. (Proctor & Gamble Proj.):
5.80%7/1/01 BBB- 1,400,000 1,414,000
7% 7/1/05 BBB- 1,500,000 1,603,125
Sacramento Fing. Auth. (Gas Tax Rev.)
Series A, 6.75% 12/1/08
(AMBAC Insured) Aaa 1,475,000 1,677,813
San Diego County Reg. Trans. Commission
(Sales Tax Rev.) Second Series A,
(FGIC Insured) Aaa 1,000,000 1,091,250
San Diego Metropolitan Transit Dist. Auth.
Lease Rev. Rfdg. 5.625% 9/1/09 Aa 1,500,000 1,466,250
San Francisco Bldg. Auth. Lease Rev. (Dept.
Gen'l Svcs. Lease) Series A, 5% 10/1/05 A1 400,000 381,000
San Francisco City & County Gen. Oblig.
Series 95 A & B, 6.50% 6/15/03
(FGIC Insured) Aaa 680,000 756,500
MUNICIPAL BONDS - CONTINUED
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
San Francisco Port. Comm. Rev. Rfdg.
5.50% 7/1/04 A $ 1,000,000 $ 1,031,250
Santa Barbara Ctfs. of Prtn. Rfdg. 5.10%
3/1/03 A1 1,000,000 980,000
Santa Margarita-Dana Point Auth. Rev.
(Impt. Dists 1-2-2a & 8) Series A, 7.25%
8/1/06 (MBIA Insured) Aaa 1,500,000 1,768,125
Sequoia Hosp. Dist. Rev.:
Rfdg. 5% 8/15/03 Baa1 1,285,000 1,203,081
4.90% 8/15/02 Baa1 1,225,000 1,151,500
Southern California Pub. Pwr. Auth. Pwr. Proj.
Rev. Series 11, 0% 7/1/15
(Pre-Prefunded to 7/1/00 @ 101)(d) Aaa 300,000 244,500
California University Rev. Rfdg.:
(Multiple Purp. Projs.) Series C, 9% 9/1/02
(AMBAC Insured) Aaa 100,000 124,375
(UCLA Med. Ctr.) 8.00% 12/1/95
(MBIA Insured) Aaa 200,000 202,000
Walnut Creek Ctfs. of Prtn. Rfdg.
(John Muir Med. Ctr.) 4.95% 2/15/05
(MBIA Insured) Aaa 300,000 295,500
West Covina Ctfs. of Prtn.
(Queen of the Valley Hosp.):
5.90% 8/15/02 A 875,000 891,406
6.00% 8/15/03 A 925,000 942,341
6.125% 8/15/04 A 980,000 997,150
TOTAL MUNICIPAL BONDS
(Cost $51,997,155) 52,931,256
MUNICIPAL NOTES (A) - 5.4%
MOODY'S PRINCIPAL VALUE
RATINGS (B) AMOUNT (NOTE 1)
CALIFORNIA - 5.4%
Big Bear Lake Ind. Dev. Board
(Southwest Gas Corp. Proj.) 1993 Series A,
LOC Union Bank of Switzerland
VRDN (b) VMIG 1 $ 1,100,000 $ 1,100,000
California Poll. Cont. Fing. Auth. Resource
Recovery Rev. (Malaga Proj.) Series A, 3.55%,
LOC Bank of America Nat'l. Trust & Savings,
VRDN (b) - 200,000 200,000
California Poll. Cont. Fin. Auth. Solid Waste
Disp. Rev. (Shell Oil Co.)(Martinez Proj.)
Series 1994A, 3.60% 10/1/24,
VRDN (b) VMIG 1 1,700,000 1,700,000
TOTAL MUNICIPAL NOTES
(Cost $3,000,000) 3,000,000
TOTAL INVESTMENTS - 100%
(Cost $54,997,155) $ 55,931,256
FUTURES CONTRACTS
EXPIRATION UNDERLYING FACE UNREALIZED
DATE AMOUNT AT VALUE GAIN/(LOSS)
PURCHASED
5 Municipal Bond Contracts Dec. 1995 $ 566,875 $ 1,517
THE FACE VALUE OF FUTURES SOLD AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 1.0%
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) Security collateralized by an amount sufficient to pay interest and
principal.
(e) A portion of the security was pledged to cover margin requirements for
futures contracts. At the period end, the value of securities pledged
amounted to $1,045,000.
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 77.6% AAA, AA, A 86.2%
Baa 4.4% BBB 8.5%
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 0.00%.
The distribution of municipal securities by revenue source, as a percentage
of total value of investment in securities, is as follows:
Water & Sewer 16.7%
Transportation 15.1
Health Care 15.1
Lease Revenue 12.7
Escrowed/Pre-Refunded 10.8
Others
(individually less than 10%) 29.6
TOTAL 100.0%
INCOME TAX INFORMATION
At August 31, 1995, the aggregate cost of investment securities for income
tax purposes was $54,997,155. Net unrealized appreciation aggregated
$934,101, of which $1,139,035 related to appreciated investment securities
and $204,934 related to depreciated investment securities.
At February 28, 1995, the fund had a capital loss carryforward of
approximately $586,607 which will expire on February 28, 2003.
At February 28, 1995, the fund elected to defer to its fiscal year ending
February 29, 1996, $470,388 of losses recognized during the period November
1, 1994 to February 28, 1995.
SPARTAN CALIFORNIA INTERMEDIATE MUNICIPAL PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AUGUST 31, 1995 (UNAUDITED)
139.ASSETS 140. 141.
142.Investment in securities, at value (cost 143. $ 55,931,256
$54,997,155) -
See accompanying schedule
144.Cash 145. 141,861
146.Interest receivable 147. 596,361
148.Receivable for daily variation on futures contracts 149. 2,245
150.Receivable from investment adviser for expense 151. 13,585
reductions
152. 153.TOTAL ASSETS 154. 56,685,308
155.LIABILITIES 156. 157.
158.Payable for investments purchased $ 1,096,962 159.
160.Distributions payable 51,490 161.
162.Accrued management fee 24,905 163.
164. 165.TOTAL LIABILITIES 166. 1,173,357
167.168.NET ASSETS 169. $ 55,511,951
170.Net Assets consist of: 171. 172.
173.Paid in capital 174. $ 55,321,407
175.Accumulated undistributed net realized gain (loss) 176. (745,074)
on investments
177.Net unrealized appreciation (depreciation) 178. 935,618
on investments
179.180.NET ASSETS, for 5,708,811 shares outstanding 181. $ 55,511,951
182.183.NET ASSET VALUE, offering price and 184. $9.72
redemption price per share ($55,511,951 (divided by) 5,708,811
shares)
</TABLE>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED AUGUST 31, 1995 (UNAUDITED)
185.186.INTEREST INCOME 187. $ 1,287,784
188.EXPENSES 189. 190.
191.Management fee $ 136,499 192.
193.Non-interested trustees' compensation 101 194.
195. Total expenses before reductions 136,600 196.
197. Expense reductions (86,100) 50,500
198.199.NET INTEREST INCOME 200. 1,237,284
201.REALIZED AND UNREALIZED GAIN (LOSS) 203. 204.
202.Net realized gain (loss) on:
205. Investment securities 215,238 206.
207. Futures contracts 96,683 311,921
208.Change in net unrealized appreciation 209. 210.
(depreciation) on:
211. Investment securities 1,181,585 212.
213. Futures contracts 1,517 1,183,102
214.215.NET GAIN (LOSS) 216. 1,495,023
217.218.NET INCREASE (DECREASE) IN NET ASSETS 219. $ 2,732,307
RESULTING FROM OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS YEAR
ENDED ENDED
AUGUST 31, 1995 FEBRUARY 28,
(UNAUDITED) 1995
220.INCREASE (DECREASE) IN NET ASSETS
221.Operations $ 1,237,284 $ 1,842,201
Net interest income
222. Net realized gain (loss) 311,921 (1,056,995)
223. Change in net unrealized appreciation 1,183,102 152,087
(depreciation)
224. 2,732,307 937,293
225.NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS
226.Distributions to shareholders from net interest (1,237,284) (1,842,201)
income
227.Share transactions 22,678,310 53,135,545
Net proceeds from sales of shares
228. Reinvestment of distributions from net interest 941,616 1,537,975
income
229. Cost of shares redeemed (15,374,144) (30,710,334)
230.231. 8,245,782 23,963,186
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM SHARE TRANSACTIONS
232. 9,740,805 23,058,278
233.TOTAL INCREASE (DECREASE) IN NET ASSETS
234.NET ASSETS 235. 236.
237. Beginning of period 45,771,146 22,712,868
238. End of period $ 55,511,951 $ 45,771,146
239.OTHER INFORMATION 241. 242.
240.Shares
243. Sold 2,367,748 5,689,086
244. Issued in reinvestment of distributions 98,276 164,937
245. Redeemed (1,610,315) (3,327,012)
246. Net increase (decrease) 855,709 2,527,011
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SIX MONTHS YEAR DECEMBER 30, 1993
ENDED ENDED (COMMENCEMENT
AUGUST 31, 199 FEBRUARY 28, OF OPERATIONS) TO
5 FEBRUARY 28,
(UNAUDITED) 1995 1994
247.SELECTED PER-SHARE DATA
248.Net asset value, beginning of period $ 9.430 $ 9.760 $ 10.000
249.Income from Investment Operations .240 .477 .070
Net interest income
250. Net realized and unrealized gain (loss) .290 (.330) (.240)
251. Total from investment operations .530 .147 (.170)
252.Less Distributions (.240) (.477) (.070)
From net interest income
253.Net asset value, end of period $ 9.720 $ 9.430 $ 9.760
254.TOTAL RETURN B 5.69% 1.67% -1.71%
255.RATIOS AND SUPPLEMENTAL DATA
256.Net assets, end of period $ 55,512 $ 45,771 $ 22,713
(000 omitted)
257.Ratio of expenses to average net .20%A .05% -
assets
258.Ratio of expenses to average net .55%A .55% .55%A
assets
before expense reductions
259.Ratio of net interest income to 4.99%A 5.16% 4.66%A
average
net assets
260.Portfolio turnover rate 56%A 55% -
</TABLE>
A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED. THE TOTAL RETURNS WOULD HAVE BEEN
LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN. SEE
NOTE 4 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. If Fidelity had not
reimbursed certain fund expenses during the periods shown, the total
returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED AUGUST 31, 1995 PAST 6 PAST 1 PAST 5 LIFE OF
MONTHS YEAR YEARS FUND
Spartan California Municipal Money Market 1.87% 3.61% 18.49% 23.85%
Average California Tax-Free
Money Market Fund 1.67% 3.18% 15.84% 20.42%
Consumer Price Index 1.33% 2.62% 16.19% 21.45%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years or since
the fund started on November 27, 1989. For example, if you invested $1,000
in a fund that had a 5% return over the past year, the value of your
investment would be $1,050. To measure how the fund's performance stacked
up against its peers, you can compare it to the average California tax-free
money market fund, which reflects the performance of 44 California tax-free
money market funds with similar objectives tracked by IBC/Donoghue over the
past six months. Comparing the fund's performance to the consumer price
index (CPI) helps show how your investment did compared to inflation. (The
periods covered by CPI and IBC Donoghue are the closest available match to
those covered by the fund.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED AUGUST 31, 1995 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Spartan California Municipal Money Market 3.61% 3.45% 3.78%
Average California Tax-Free
Money Market Fund 3.18% 2.98% 3.28%
Consumer Price Index 2.62% 3.05% 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
8/29/94 11/28/94 2/27/95 5/29/95 8/28/95
Spartan California 2.94% 3.46% 3.90% 3.88% 3.47%
Municipal Money Market
If Fidelity had not reimburs 2.71% 3.26% 3.70% 3.70% 3.29%
ed
certain fund expenses
Average California Tax-Free 2.56% 3.07% 3.45% 3.50% 3.11%
Money Market Fund
Spartan California 5.11% 6.07% 6.85% 6.81% 6.09%
Municipal Money Market -
Tax-equivalent
If Fidelity had not reimburs 4.76% 5.72% 6.50% 6.50% 5.78%
ed
certain fund expenses
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. If the
advisor had not reimbursed certain fund expenses during the periods shown,
the yields would have been lower. You can compare these yields to the
average California tax-free money market fund. Or you can look at the
fund's tax-equivalent yield, which is based on a combined effective 1995
federal and state income tax rate of 43.04%. Figures for the average
California tax-free money market fund are from IBC/Donoghue. A portion of
the funds income may be subject to the alternative minimum tax.
A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS WILL VARY, AND 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, WHAT KIND OF AN INVESTMENT CLIMATE HAVE YOU BEEN OPERATING IN
FOR THE PAST SIX MONTHS?
A. Last February, before the period began, the Federal Reserve raised the
federal funds rate - the interest rate banks charge each other for
overnight loans - one-half percentage point. It was the seventh increase in
just over a year and brought the federal funds rate to 6%. But even as the
Fed was taking its final step in a policy designed to slow down the pace of
economic growth and prevent an outbreak of inflation, there were signs of
an economic slowdown. During the first quarter of 1995, the gross domestic
product expanded at an annual rate of 2.7%, well below the 5.1% expansion
rate during the fourth quarter of 1994. The slowdown continued throughout
the spring and early summer, with second-quarter growth registering a mild
1.1%, well below the Fed's target rate of 2.5%. In July, fearful that the
economy was losing too much steam too fast, the Fed intervened again, this
time cutting the federal funds rate one-quarter percentage point in hopes
of stimulating economic activity.
Q. WHAT WAS YOUR STRATEGY DURING THE PERIOD?
A. Throughout the spring and early summer, the economy was sending out
contradictory signals, with signs of strength alternating with signs of
weakness. During this time I felt the Fed could lower interest rates;
therefore, I chose to remain flexible, maintaining an average maturity of
around 24 days. Then, as we entered the summer borrowing season, I took
advantage of an abundance of new issues to add longer-term securities at
attractive rates. By July, the fund's average maturity was approaching 70
days, and has stayed close to that ever since.
Q. DID THE FUND SUFFER LOSSES TIED TO THE ORANGE COUNTY BANKRUPTCY LAST
YEAR?
A. No. The fund has no direct exposure to Orange County or to any of the
municipalities that participated in the Orange County investment pool. That
was true at the time of the bankruptcy filing and it is still true today.
At no time was the fund's stable $1 share price threatened. Since the
bankruptcy filing, we've maintained our strict credit standards and have in
some cases required credit enhancement before investing.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on August 31, 1995, was 3.44%, compared to
3.90% six months ago. The latest yield was the equivalent of a 6.04%
taxable yield for California investors in the 43.04% combined state and
federal income tax bracket. The fund's total return from February 28, 1995
through August 31, 1995 was 1.87%, compared
to 1.67% for the average California tax-free money market fund, according
to IBC/Donoghue.
Q. WHAT'S THE OUTLOOK?
A. Going forward, I think it's highly unlikely that the Fed will consider
raising interest rates again anytime soon. Because pockets of economic
weakness continue to materialize, the Fed may decide to stand pat until
Congress shows its hand in the next round of budget deliberations. I
therefore expect stable to lower interest rates at least for the next six
months. As a result, I'll aim to keep the fund's average maturity somewhat
aggressive, in the 60 - 70-day range.
FUND FACTS
GOAL: to provide high current
tax-free income for California
residents while maintaining a
stable $1 share price
START DATE: November 27,
1989
SIZE: as of August 31,1995,
more than $1 billion
MANAGER: Deborah Watson,
since November 1989;
manager, Fidelity California
Tax-Free Money Market
Portfolio, since 1988; Spartan
Pennsylvania Municipal
Money Market Portfolio, since
1989; joined
Fidelity in 1982
(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
8/31/95 2/28/95 8/31/94
0 - 30 76 80 80
31 - 90 6 10 10
91 - 180 1 10 0
181 - 397 17 0 10
WEIGHTED AVERAGE MATURITY
8/31/95 2/28/95 8/31/94
Spartan California Municipal
Money Market 65 days 24 days 41 days
Average California Municipa
l 52 days 33 days 53 days
Money Market Fund*
ASSET ALLOCATION
AS OF AUGUST 31, 1995 AS OF FEBRUARY 28, 1995
Row: 1, Col: 1, Value: 66.0
Row: 1, Col: 2, Value: 12.0
Row: 1, Col: 3, Value: 4.0
Row: 1, Col: 4, Value: 18.0
Row: 1, Col: 5, Value: 2.0
Row: 1, Col: 1, Value: 68.0
Row: 1, Col: 2, Value: 14.0
Row: 1, Col: 3, Value: 3.0
Row: 1, Col: 4, Value: 14.0
Row: 1, Col: 5, Value: 3.0
Variable rate
demand notes
(VRDNs) 66%
Commercial
paper 12%
Tender bonds 3%
Municipal
notes 18%
Other 1%
Variable rate
demand notes
(VRDNs) 68%
Commercial
paper 14%
Tender bonds 2%
Municipal
notes 14%
Other 2%
* SOURCE: IBC/DONOGHUE'S MONEY FUND REPORT(registered trademark)
SPARTAN CALIFORNIA MUNICIPAL MONEY MARKET PORTFOLIO
INVESTMENTS AUGUST 31, 1995 (UNAUDITED)
Showing Percentage of Total Value of Investments
MUNICIPAL SECURITIES (A) - 100%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CALIFORNIA - 100.0%
Alameda County TRAN 4.75% 7/25/96,
LOC Union Bank of Switzerland $ 10,000,000 $ 10,064,519
Anaheim Hsg. Auth. Multi-Family Hsg. Rev.:
(Bel Age Apts. Proj.) 3.65%, VRDN (b) 5,200,000 5,200,000
(Sage Park Proj.) Series A, 3.65%,
LOC Bank of America, VRDN (b) 3,900,000 3,900,000
(Parka Vista Apts) 3.65%, LOC Citibank, VRDN (AMT) 8,500,000 8,500,000
Big Bear Lake Ind. Dev. Board (Southwest Gas Corp. Proj.)
Series 1993 A, 3.40%, LOC Union Bank of Switzerland,
VRDN (b) 200,000 200,000
Butte County Gen. Oblig. Board of Ed. BAN 5%
10/27/95 2,000,000 2,001,649
California Central School Dist. Ctfs. of Prtn. 3.85%,
LOC Bank of California, VRDN 4,000,000 4,000,000
California Ed. Facs. Auth. Rev. (Stanford University)
Series L-2, 3.20%, VRDN 4,275,000 4,275,000
California Gen. Oblig. Bonds:
Series 1993N, 3.85% tender 9/1/95 (AMBAC Insured)
(Liquidity Facility Citibank) 14,000,000 14,000,000
Series CR-26I, 3.90%, tender 3/15/95
(Liquidity Facility Citibank) (AMBAC Insured) (c) 7,925,000 7,925,000
California Gen. Oblig. RAN Series C, 5.75%
tender 4/25/96 (FGIC Insured) 5,125,000 5,187,434
California Hsg. Fin. Agcy. Home. Mtg. Rev. Bonds
Series 1995 E, 4.60% tender 2/1/96 (FGIC Insured)(b) 7,250,000 7,250,000
California Hsg. Fin. Agcy. Participating VRDN (c):
Series 1994-1, 3.91%
(Liquidity Facility State Street Bank) (b) 15,705,376 15,705,376
Series PA-58, 3.60% (Liquidity Facility Merrill Lynch) 2,695,000
2,695,000
Series PA-90, 3.65% (Liquidity Facility Merrill Lynch) (b) 6,470,000
6,470,000
Series PT-14, 3.65%
(Liquidity Facility Dai-Ichi Kangyo Bank Ltd.) 5,360,000 5,360,000
Series PT-40B, 3.75%
(Liquidity Facility Dai-Ichi Kangyo Bank Ltd.) (b) 14,950,000
14,950,000
Series PT-40C, 4%
(Liquidity Facility Banque Nat'l. de Paris) 4,180,000 4,180,000
Series PT-40D, 3.75%
(Liquidity Facility Banque Nat'l. De Paris) 14,995,000 14,995,000
Series PT-56, 3.75% (Liquidity Facility Credit Suisse) 2,000,000
2,000,000
California Hsg. Fin. Agcy. Tender Option Bonds,
Series CR-156, 3.82% (Liquidity Facility Citibank) (b)(c) 7,500,000
7,500,000
California Health Facs. Fing. Auth. Rev. (Pooled Loan Prog.)
Series 1985 B, 3.35%, (FGIC Insured)
BPA Morgan Guaranty, VRDN 2,825,000 2,825,000
California Health Facs. Fing. Hosp. Rev.
(Huntington Mem. Hosp.) Series 1985, 3.35%,
LOC Morgan Guaranty Trust Co., VRDN 1,415,000 1,415,000
California Health Facs. Auth. Rev. Bonds
(Sisters of Providence Proj.) 9.30% 10/1/95 1,600,000 1,638,474
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
California Poll. Cont. & Fin. Auth. Rev. Bonds:
(Pacific Gas & Elec. Co.):
Rfdg. Series 1988 B (b):
3.35% tender 9/7/95, LOC Sumitomo Bank $ 14,000,000 $ 14,000,000
3.80% tender 11/20/95, LOC Sumitomo Bank 4,000,000 4,000,000
Series 1988 A (b):
4.20% tender 9/8/95, LOC Swiss Bank Corp 3,000,000 3,000,000
4.10% tender 9/11/95, LOC Swiss Bank Corp 8,000,000 8,000,000
3.05% tender 9/12/95, LOC Swiss Bank Corp 3,500,000 3,500,000
3.35% tender 9/18/95 LOC Swiss Bank Corp 7,275,000 7,275,000
3.35% tender 9/19/95, LOC Swiss Bank Corp 2,000,000 2,000,000
3.35% tender 9/20/95, LOC Swiss Bank Corp 3,300,000 3,300,000
3.45% tender 9/21/95, LOC Swiss Bank Corp 7,495,000 7,495,000
4% tender 10/13/95, LOC Swiss Bank Corp 8,775,000 8,775,000
4% tender 10/16/95, LOC Swiss Bank Corp 2,500,000 2,500,000
3.65% tender 10/26/95, LOC Swiss Bank Corp 9,500,000 9,500,000
3.70% tender 11/10/95, LOC Swiss Bank Corp 3,800,000 3,800,000
3.70% tender 11/15/95, LOC Swiss Bank Corp 3,600,000 3,600,000
3.70% tender 11/17/95, LOC Swiss Bank Corp 5,000,000 5,000,000
Series 1988 C, 3.40% tender 10/12/95,
LOC Credit Suisse 1,000,000 1,000,000
Series 1988 D, 3.80% tender 10/13/95,
LOC Bank of Tokyo 6,500,000 6,500,000
Series 1988 D,4.10% tender 9/11/95,
LOC Bank of Tokyo 2,000,000 2,000,000
California Poll. Cont. Fing. Auth. Resource Recovery Rev., VRDN (b):
(Burney Forest Prod. Proj.) 3.65%,
LOC Nat'l. Westminster Bank 600,000 600,000
(Delano Proj.)
Series 1989, 3.50%, LOC Algemene Bank 1,000,000 1,000,000
Series 1991, 3.50%, LOC Amro Holdings 400,000 400,000
California Poll. Cont. Fing. Auth. Solid Waste Disp. Rev.,
VRDN (b):
(Colmac Energy Proj.) Series B, 3.45%,
LOC Swiss Bank 2,600,000 2,600,000
(Taormina Industries, Inc.) Series 1994 B, 3.50%,
LOC Sanwa Bank Ltd. 7,000,000 7,000,000
(Western Waste Industries) Series 1994 A, 3.85%,
LOC Bank of California 6,500,000 6,500,000
California School Cash Reserve Prog. Auth. TRAN Series
1995 A, 4.75% 7/3/96, LOC Industrial Bank of Japan 20,000,000 20,161,070
California Statewide Commty. Dev. Auth. Apt. Dev.
Rev. Rfdg., VRDN:
Series 1995 A-2, 3.35%, (Liquidity Facility FNMA) 2,000,000 2,000,000
Series 1995 A-3, 3.35%,(FNMA Guaranteed) 800,000 800,000
Series 1995 A-7, 3.60% (FNMA Guaranteed) (b) 8,000,000 8,000,000
California Statewide Commty. Dev. Corp. Rev.:
(AHNN Proj.) 3.75%, LOC California State Teachers'
Retirement Sys., VRDN (b) 375,000 375,000
(American River Packaging) 3.65% LOC California State
Teachers' Retirement Sys., VRDN (b) 1,800,000 1,800,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
California Statewide Commty. Dev. Corp. Rev. - continued
(American Zettler, Inc. Proj.) 3.75%, LOC California
State Teachers' Retirement Sys., VRDN (b) $ 2,240,000 $ 2,240,000
(Bro-Co Gen. Partnership Proj.) Series 1990, 3.90%,
LOC Bank of Tokyo, VRDN (b) 4,320,000 4,320,000
(Carvin Corp.) 3.65%, LOC California State Teachers'
Retirement Sys., VRDN (b) 1,400,000 1,400,000
(Charles & Loralie Harris Proj.) 3.75%,
LOC California State Teachers' Retirement Sys.,
VRDN (b) 975,000 975,000
(Covenant Retirement Commty. Inc.) Series1995, 3.70%,
LOC LaSalle Bank, VRDN 4,000,000 4,000,000
(Florestone Prod. Co.) Series 1989, 3.75%, LOC California
State Teachers' Retirement Sys., VRDN (b) 440,000 440,000
(Grundfos Pumps) Series 1989, 3.75%, LOC California
State Teachers' Retirement Sys., VRDN (b) 5,700,000 5,700,000
(K.U.M. LTD Proj.) Series 1992, 3.90%,
LOC Bank of Tokyo, VRDN (b) 2,000,000 2,000,000
(Lance Computer Manufacturer) 3.65%
LOC California Teachers Retirement Sys., VRDN (b) 4,000,000 4,000,000
(Merrill Packaging Proj.) 3.80%
LOC Bank of Tokyo, VRDN (b) 2,005,000 2,005,000
(Northwest Pipe & Casing Co. Proj.) Series 1990, 3.75%,
LOC California State Teachers' Retirement Sys., VRDN (b) 3,750,000
3,750,000
(Pasco Scientific Proj.) 3.65% LOC California Teachers
Retirement Sys. VRDN, (b) 3,300,000 3,300,000
(Propak-California Corp. Proj.) Series 1994 B, 3.65%
LOC California State Teachers' Retirement Sys., VRDN (b) 1,000,000
1,000,000
(Rapelli of California Proj.) Series 1989, 3.75%, LOC
California State Teachers' Retirement Sys., VRDN (b) 2,500,000
2,500,000
(Reliance Upholstery Supply Co., Inc. Proj.) Series 1990, 3.75%,
LOC California State Teachers' Retirement Sys., VRDN (b) 500,000
500,000
(Santa Cruz-Wilson Entities Ltd. Proj.) Series 1993, 3.85%,
LOC California State Teachers' Retirement Sys., (b) 2,485,000 2,485,000
(Sunclipse, Inc.):
(Alhambra Proj.) Series 1989, 3.75%,
LOC California State Teachers' Retirement Sys.,
VRDN (b) 2,600,000 2,600,000
(Union City Proj.) Series 1989, 3.75%, LOC
California State Teachers' Retirement Sys., VRDN (b) 1,785,000
1,785,000
(Zarn Inc. Proj.) Series 1989, 3.75%, LOC
California State Teachers' Retirement Sys., VRDN (b) 1,445,000
1,445,000
(Zieman Manufacturing Co. Proj.) Series 1990, 3.75%,
LOC California State Teachers' Retirement Sys., VRDN (b) 525,000
525,000
Camarillo Multi-Family Hsg. Rev. (Heritage Park Apts.)
Series 1989 A, 3.65%, VRDN (b) 1,000,000 1,000,000
Chula Vista Ind. Dev. Rev. (San Diego Gas & Elec. Co.) (b):
Bonds:
Series C, 4.25% tender 9/8/95 5,000,000 5,000,000
Series E, 3.85% tender 11/9/95 2,500,000 2,500,000
Series B, 3.60%, VRDN 4,000,000 4,000,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Concord Multi-Family Mtg. Rev.:
(Crossroads Apts.) Series 1988 B, 3.55%,
FNMA Guaranteed, VRDN $ 1,400,000 $ 1,400,000
(Hill Apt. Proj.) 3.60%, LOC Citibank, VRDN 8,950,000 8,950,000
Conejo Valley Unified School Dist. TRAN
(Ventura County Proj.) 4.75% 7/5/96 6,100,000 6,136,957
Contra Costa County Multi-Family Hsg. Rev. (Park Regency)
Series A, 3.60%, LOC Sumitomo Bank, VRDN (b) 22,000,000 22,000,000
Contra Costa County TRAN 4.50% 7/3/96 11,000,000 11,075,365
Costa Mesa Redev. Agcy. Multi-Family Hsg. Rev.
(Costa Mesa Family Village Apts.) Series 1994 A, 3.40%,
LOC Bank of America, VRDN 3,500,000 3,500,000
Covina Redev. Agcy. Multi-Family Hsg. Rev.
(Shadowhills Apt. Proj.) Series 1994 A, 3.95%, VRDN 500,000 500,000
Duarte Redev. Agcy. Single-Family Mtg. Rev.
Participating VRDN, Series A-1, 3.90%
(Liquidity Facility Norwest Bank) (c) 5,355,000 5,355,000
East Bay Muni. Util. Dist. Wtr. Sys. Rev. Series 1988, 3.10%
9/12/95 (Liquidity Facility Sanwa Bank, Ltd.), CP 5,000,000 5,000,000
Emeryville Redev. Agcy. Multi-Family Hsg.
(Emerybay Apts. II) 3.55%,
LOC Security Pacific Nat'l. Bank, VRDN (b) 8,000,000 8,000,000
Escondido Commty. Dev. Commission Rev. (Escondido
Promeneade Proj.) 4%, LOC Bank of America,
VRDN (b) 1,000,000 1,000,000
Fairfield Ind. Dev. Auth., 3.80%,
LOC Wells Fargo Bank, VRDN (b) 1,800,000 1,800,000
Fontana Apt. Dev. Rev. Rfdg. (Citrus Ave. Apt. Proj.)
Series 1992 A, 3.45%, LOC Bank of America, VRDN 3,700,000 3,700,000
Foothills Eastern Transport Corridor Agcy. Toll Road Rev.:
Series 1995 D:
3.35%, LOC Morgan Guaranty Trust Co., VRDN 3,500,000 3,500,000
3.50%, LOC Ind. Bank of Japan, VRDN 9,500,000 9,500,000
Series 1995 E, 3.35% LOC Banque Nat'l. De Paris,
VRDN 4,400,000 4,400,000
Garden Grove Hsg. Auth. Multi-Family Hsg. Rev.
(Valley View Sr. Villas Proj.) Series 1990 A, 3.75%,
LOC Wells Fargo Bank, VRDN (b) 5,400,000 5,400,000
Grand Terrace Commty. Redev. Multi-Family Hsg. Rev.
(Mt. Vernon Villas) 3.65%, LOC Ind. Bank of Japan,
VRDN 11,420,000 11,420,000
Humbolt County TRAN 4.50% 7/5/96 6,500,000 6,526,273
Huntington Beach Multi-Family Hsg. (Five Point Seniors Proj.)
Series 1991 A, 3.70%,LOC Wells Fargo Bank,
VRDN (b) 6,400,000 6,400,000
Huntington Park Multi-Family Rev. (Casa Rita Apts.)
Series 1994 A, 3.75%,
LOC First Interstate Bank of California, VRDN (b) 1,700,000 1,700,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Irvine Assessment Dist. #94-15 Rev. 3.45%,
LOC Dia-Ichi Kangyo Bank, VRDN $ 1,000,000 $ 1,000,000
Irvine Ranch Wtr. Dist. Rev.:
Series B, 3.60%, LOC Sumitomo Bank Ltd., VRDN 1,800,000 1,800,000
Series 1985 B, 3.60%, LOC Sumitomo Bank, VRDN 1,400,000 1,400,000
Series 1988 A, 3.60%, LOC Sumitomo Bank Ltd.,
VRDN 300,000 300,000
(Consolidated Dist.#140) Series 1989, 3.60%,
LOC Industrial Bank of Japan, VRDN 1,900,000 1,900,000
(Consolidated Dist. #140, 240, 105, 250)
Series 1993, 3.60%, LOC Bank of America, VRDN 2,200,000 2,200,000
Kern Commty. College Dist. Ctfs. of Prtn. 3.65%,
LOC Bank of California, VRDN 5,700,000 5,700,000
Kern County Ctfs. of Prtn. (Kern Pub. Facs. Proj.) Series B,
3.45%, LOC Union Bank of Switerland, VRDN 3,000,000 3,000,000
Kern County TRAN 4.50% 7/2/95 11,000,000 11,043,902
La Verne Ind. Dev. Auth. Rev. (Paper-Pak Products Inc. Proj.)
3.85%, LOC First Union Nat'l Bank of North Carolina,
VRDN (b) 7,505,000 7,505,000
Livermore Ctfs. of Prtn. (Wtr. Reclamation Plant Expansion
Proj.) 3.60%, LOC Nat'l. Westminster Bank, VRDN 830,000 830,000
Livermore Multi-Family Mtg. Rev. (Portola Meadows Apts.)
Series 1989 A, 3.65%, LOC Bank of America,
VRDN (b) 10,400,000 10,400,000
Loma Linda Wtr. Rev. 3.85%,
LOC Bank of California, VRDN 3,000,000 3,000,000
Long Beach Hbr. Rev. Series A, 3.90%, 11/7/95
(Liquidity Facility Canadian Imperial Bank),
VRDN (b) 5,400,000 5,400,000
Long Beach TRAN Series 1994-95, 4.75% 9/20/95 2,000,000 2,001,262
Los Angeles Ctfs. of Prtn. (Baldwin Hills Pub. Parking Facs.)
Series 1984, 3.70%, LOC Wells Fargo Bank, VRDN 5,400,000 5,400,000
Los Angeles Commty. Redev. Agcy. Ctfs. of Prtn.
(CMC Med. Plaza) 3.75%, LOC Bank of America, VRDN 4,500,000 4,500,000
Los Angeles County Ind. Dev. Auth. (Caitac & Jae Proj.),
3.90%, LOC Bank of Tokyo, VRDN (b) 4,200,000 4,200,000
Los Angeles Convention & Exhibit Ctr. Auth. Participating VRDN (c):
Series PA-1006, 3.65%, (MBIA Insured)
(Liquidity Facility Merrill Lynch) 9,420,000 9,420,000
Series 94PW10, 3.80%
(Liquidity Facility Bank of Nova Scotia) 11,130,000 11,130,000
Los Angeles Dept. of Wtr. & Pwr. Participating VRDN,
Series BTP-51, 3.80% (Liquidity Facility Bankers Trust) (c) 6,430,000
6,430,000
Los Angeles Dept. of Wtr. & Pwr. Elec. Plant Rev. Bonds:
(Crossover Rfdg.) 2nd Issue, 9% 11/15/95 3,880,000 3,921,834
Los Angeles Dept. of Wtr. & Pwr. Elec. Plant Rev. CP:
3.10% 9/11/95 5,000,000 5,000,000
3.75% 10/25/95 1,400,000 1,400,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Los Angeles Multi-Family Hsg. Rev.:
(Beverly Park Apts.) Series 1988 A, 3.55%,
LOC Barclay's Bank, VRDN (b) $ 13,000,000 $ 13,000,000
(Channel Gateway Apts.) Series 1989 B, 3.75%,
LOC FBank Ltd., VRDN (b) 62,600,000 62,600,000
(Loan to Lenders Prog.) 3.50%, LOC Federal Home
Loan Bank of San Francisco, VRDN (b) 800,000 800,000
(Meadowridge Apt. Proj.) Series 1994 B, 3.95%, VRDN 4,000,000 4,000,000
(Museum Terrace Apt. Proj.) Series H, 3.60%,
LOC Bank of America, VRDN 6,000,000 6,000,000
(Park Sierra Apt.) 3.60%, LOC Citibank, VRDN (b) 39,200,000 39,200,000
(Poinsettia Apts. Proj.) Series 1989 A, 3.85%,
LOC Dai-Ichi Kangyo Bank, VRDN (b) 900,000 900,000
(River Park Apt.) Series 1988 D, 3.70%,
LOC Dai-Ichi Kangyo Bank, VRDN 2,100,000 2,100,000
(Sand Canyon Villas Proj.) Series 1989 A, 3.85%,
LOC Ind. Bank of Japan Ltd., VRDN (b) 17,000,000 17,000,000
Series 1985 K, 3.50%, LOC Federal Home Loan Bank of
San Francisco, VRDN 2,100,000 2,100,000
Los Angeles TRAN 4.50% 7/1/96, LOC Credit Suisse 47,200,000 47,461,572
Los Angeles Unified School Dist. TRAN 4.50% 7/3/96 16,000,000 16,103,166
Los Angeles Wastewtr. Sys. CP:
4.15% 10/12/95 (Liquidity Facility Sumitomo Bank) 2,800,000 2,800,000
3.70% 10/20/95 (Liquidity Facility Sumitomo Bank) 3,000,000 3,000,000
Marin County Hsg. Auth. Rev. (Crest Marin Apt. II Proj.) 3.65%,
LOC Dai-Ichi Kango Bank) VRDN 14,650,000 14,650,000
Monterey County Fing. Auth. Rev. (Reclamation & Distribution
Proj.) Series 1995 A,3.60%,
LOC Dai-Ichi Kangyo Bank, VRDN 6,800,000 6,800,000
Monterey County Reg'l. Waste Mgt. Auth. Rev.
(Integrated Waste Mgt.) 3.60%
(Liquidity Facility Dai-Ichi Kangyo Bank) VRDN 3,200,000 3,200,000
Monterey Wastewtr. (Reclamation Proj.) Series 1992, 3.65%,
LOC Sumitomo Bank, VRDN 5,700,000 5,700,000
Mt. Diablo Unified School Dist. TRAN Series 1994-95,
5% 10/27/95 10,300,000 10,310,985
Newark Ind. Dev. Auth. Rev. (Gas Tech Proj.) Series 1989 A,
3.60%, LOC Union Bank of Switzerland, VRDN (b) 3,000,000 3,000,000
Oakland TRAN 4.50% 7/31/96 6,000,000 6,032,723
Oakland County Rev. (Children's Hosp. Med. Ctr.)
Series 1994 B, 3.50%,
LOC Banque Nationale de Paris, VRDN 5,500,000 5,500,000
Oakland Unified School Dist. TRAN 4.50%
8/30/96 7,000,000 7,027,435
Oceanside Multi-Family Mtg. Rev.:
(Lakeridge Apt. Proj.) Series 1994, 4.05%, VRDN 6,000,000 6,000,000
(Riverview Springs Apts.) Series 1990 A, 3.95%,
LOC Bank of Tokyo, VRDN (b) 8,380,000 8,380,000
Olcese Water. Dist. Rev. Bonds (Rio Bravo Wtr.
Delivery Sys. Proj.) 3.65% tender9/28/95,
LOC Sumitomo Bank (b) 6,000,000 6,000,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Ontario Ind. Dev. Auth. Rev. (Safari Land Proj.) Series 1989,
4.10%, LOC Tokai Bank Lt., VRDN (b) $ 3,600,000 $ 3,600,000
Orange County Apt. Dev. Rev.:
(Bear Brands Apt.) Series 1985 Z, 3.65%,
LOC Fuji Bank Ltd., VRDN 4,500,000 4,500,000
(Foothill Oaks Apts. Proj.) Issue 1989 B, 3.65%,
LOC Bank of America, VRDN (b) 12,000,000 12,000,000
(Frost Construction) Series 1985 B, 3.70%,
LOC Wells Fargo Bank, VRDN 2,000,000 2,000,000
(Niguel Summit II) Series 1985 U-B, 4.25%,
LOC Bank of America, VRDN 8,000,000 8,000,000
(Seaside Meadows Proj.) 3.65%,
LOC Fuji Bank Ltd., VRDN 11,000,000 11,000,000
(Trabuco Woods Apts.) Series 1993 B, 3.50%,
LOC Wells Fargo Bank, VRDN 2,670,000 2,670,000
(Villa Marguerite Apts.) Series 1993 A, 3.50%,
LOC Wells Fargo Bank, VRDN 4,635,000 4,635,000
(Vista Verde Apt. Proj.) Series 1988 A, 3.75%,
LOC Wells Fargo Bank, VRDN (b) 12,050,000 12,050,000
(Wood Canyon Villas) Issue 1991 B, 3.85%
LOC Bank of America, VRDN (b) 10,500,000 10,500,000
Orange County Hsg. Auth. Apt. Dev. Rev.
(Lantern Pines Proj.-Frost Group) 3.70%,
LOC Bank of Tokyo, VRDN 12,700,000 12,700,000
Oxnard School Dist. TRAN (Ventura County) 4.75%
7/5/96 4,030,000 4,059,382
Panama-Buena Vista Unified School Dist. Capital Impt.
Fing. Rev. Series 1994, 3.65%,
LOC Bank of California, VRDN 5,000,000 5,000,000
Pittsburg Unified School Dist. TRAN (Contra Costa County)
4.75% 7/5/96 2,000,000 2,014,581
Redlands Multi-Family Hsg. Rev. (Parkview Terrace Proj.)
3.45%, LOC Bank of America, VRDN 2,500,000 2,500,000
Riverside County Ctfs. of Prtn. (Aces Pub. Facs. Fin. Prog.)
Series 1985-A, 3.45%LOC Sanwa Bank Ltd., VRDN 1,600,000 1,600,000
Riverside County Hsg. Auth. Multi-Family Hsg. Mtg. Rev.
(Mt. View Apts.) Series 1995A, 3.50%,
LOC Federal Home Loan Bank of San Francisco, VRDN 2,000,000 2,000,000
Riverside County Ind. Dev. Auth. (Golden West Homes Proj.)
4.20%, LOC Wells Fargo Bank, VRDN (b) 2,500,000 2,500,000
Rohnert Park Multi-Family Hsg. Rev. Rfdg.
Series 1995 A, 3.55%, VRDN 2,500,000 2,500,000
Sacramento Multi-Family Hsg. Rev. (River Oaks Apts.)
Series 1985 E, 3.60%,
LOC Dai-Ichi Kangyo Bank, VRDN 3,100,000 3,100,000
Sacramento Muni. Elec. Dist. Rev. Series H,
3.30% 9/18/95 LOC Bank of America, CP 4,500,000 4,500,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
San Bernardino County TRAN 4.50% 7/5/96,
LOC Bank of Nova Scotia $ 9,000,000 $ 9,040,057
San Bernardino County Ind. Dev. Auth. Rev., VRDN (b):
(McClain Citrus Inc. Proj.) 3.75%,
LOC California State Teachers' Retirement Sys. 900,000 900,000
(McElroy Metal Mill Proj.) 3.75%,
LOC California State Teachers' Retirement Sys. 650,000 650,000
(NRI, Inc.) 3.75%, LOC California State Teachers'
Retirement Sys. 1,385,000 1,385,000
San Bernardino County Multi-Family Hsg. Rev.:
Rfdg. (Pepperwood Apts.) Series 1993 A, 3.45%,
LOC Federal Home Loan Bank of San Francisco 3,000,000 3,000,000
(Alta Park Apts.) 3.70%, LOC Sumitomo Bank, VRDN 3,000,000 3,000,000
(Western Properties II) 3.60%, LOC Bank of America,
VRDN 900,000 900,000
(Western Properties IV) 3.60%, LOC Bank of America,
VRDN 2,700,000 2,700,000
(Woodview Apts.) 3.40%, LOC Bank of America, VRDN 1,400,000 1,400,000
San Diego Hsg. Auth. Multi-Family Hsg. Rev.:
Rfdg. (Coral Pointe Apt. Proj.) Series 1993 A, 4.15%,
VRDN 5,000,000 5,000,000
(Carmel Del Mar Apt. Proj.) Series 1993-E,3.60%,
LOC Citibank, VRDN 7,608,000 7,608,000
(Lusk Mira Mesa Apts.) Series 1985 E, 3.40%,
LOC Bank of America 2,200,000 2,200,000
(Paseo Point Apt.) Series 1994 A, 3.60%,
LOC Bank of Tokyo, VRDN 3,000,000 3,000,000
(University Town Center Apts.) 3.45%,
LOC Bank of America 3,700,000 3,700,000
San Diego Ind. Dev. Rev. Bonds (San Diego Gas & Elec Co.)
Series 1995 B, 3.30% tender 9/27/95 3,000,000 3,000,000
San Francisco City & County Parking Auth. Tender Option
Ctfs. Series A, 3.50%,SBPA Bank of America (c) 5,180,000 5,180,000
San Francisco Redev. Agcy. Multi-Family Hsg. Rev.
(Bayside Village Apts.) 3.45%,
LOC Ind. Bank of Japan Ltd., VRDN 1,000,000 1,000,000
San Jose Multi-Family Mtg. Rev.:
(Kimberly Woods) Series 1984, 3.40%,
LOC Bank of America, VRDN 6,600,000 6,600,000
(Somerset Park Apts.) Series 1987 A, 3.80%,
LOC Bank of America, VRDN 3,100,000 3,100,000
San Jose Redev. Agcy. Participating VRDN, Series PA-42I,
3.65%, (MBIA Insured) (Liquidity Facility Merrill Lynch) (c) 3,400,000
3,400,000
San Luis Obispo TRAN 4.50% 7/19/96 12,400,000 12,462,900
Santa Ana Ind. Dev. Auth. Rev. (McFadden Properties Proj.)
3.90%, LOC Bank of America, VRDN 800,000 800,000
Santa Clara County Apt. Dev. Rev.(Lincoln Pajaro Proj.)
3.65%, LOC Sumi Bank, VRDN 2,800,000 2,800,000
Santa Clara County TRAN 4.50% 8/2/96 14,500,000 14,576,489
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Simi Valley Multi-Family Hsg. Rev.:
(Lincoln Wood Ranch Apt.) 3.55%,
LOC Sumitomo Bank, VRDN $ 12,200,000 $ 12,200,000
(Shadowridge Apts.) Series 1989, 3.60%,
LOC Citibank, VRDN (b) 20,200,000 20,200,000
South Poway Commty. Facs. Dist. #1 Spl. Tax Rev. Bonds
(Pomerado Business Park) Series A. 9.75% 3/2/96 1,000,000 1,058,365
Southern California Metropolitan Wtr. Dist.
Participating VRDN (c):
Series 32-A, 3.55%
(Liquidity Facility Morgan Guaranty Trust) 6,350,000 6,350,000
Series 32-B, 3.55%
(Liquidity Facility Morgan Guaranty Trust) 4,945,000 4,945,000
Southern California Pub. Pwr. Auth. Participating VRDN,
Series SG-35, 3.60%,
(Liquidity Facility Societe Generale)(c) 11,765,000 11,765,000
Southern California Pub. Pwr. Auth. Rev. (Transmission
Proj.) Series 1991, 3.15%, LOC Swiss Bank Corp.
(AMBAC Insured) VRDN 1,000,000 1,000,000
Stanislaus County TRAN 4.50% 7/19/96 10,000,000 10,050,726
Stockton Hosp. Rev. (St. Joseph's Hosp.) Series 1985 A,
3.65%, LOC Dai-Ichi Kangyo Bank, VRDN 16,780,000 16,780,000
Torrance Hospital Rev. (Little Co. of Mary Hosp.-Torrance
Mem. Med. Ctr.) Series 1992,3.65%,
LOC Fuji Bank Ltd., VRDN 18,800,000 18,800,000
Tustin Impt. Bonds Assessment Dist. #85-1:
3.80% tender 9/12/95 8,700,000 8,700,000
3.80% tender 9/13/95, LOC Mitsubishi Trust 5,433,000 5,433,000
Upland Commty. Redev. Agcy. Multi-Family Hsg. Rev.
(Northwoods) Series 1989 B, 4%,
LOC Sanwa Bank Ltd., VRDN 1,300,000 1,300,000
Ventura County TRAN 4.50% 7/2/96 15,500,000 15,587,036
Vista City Ind. Dev. Auth. Rev. (Desalination Sys., Inc.)
Series 1995, 3.85%, LOC Wells Fargo Bank,
VRDN (b) 6,550,000 6,550,000
Washington Township Hosp. Dist. Rev., Series 1985 A, 3.65%,
LOC Ind. Bank of Japan Ltd., VRDN 2,700,000 2,700,000
Windsor Multi-Family Hsg. Rev. (Oakmont at Windsor Proj.)
Series 1995 A, 3.75%,LOC Banque Paribas,
VRDN (b) 2,160,000 2,160,000
TOTAL INVESTMENTS - 100% $ 1,250,410,532
Total Cost for Income Tax Purposes $ 1,250,410,349
SECURITY TYPE ABBREVIATIONS
BAN - Bond Anticipation Notes
CP - Commercial Paper
RAN - Revenue Anticipation Notes
TAN - Tax Anticipation Notes
TRAN - Tax and 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, 1995, the fund had a capital loss carryforward of
approximately $760,300 of which $34,300 and $726,000 will expire on
February 28, 2001 and 2003, respectively.
SPARTAN CALIFORNIA MUNICIPAL MONEY MARKET PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AUGUST 31, 1995 (UNAUDITED)
261.ASSETS 262. 263.
264.Investment in securities, at value - See 265. $ 1,250,410,532
accompanying schedule
266.Cash 267. 1,614,105
268.Interest receivable 269. 7,079,189
270. 271.TOTAL ASSETS 272. 1,259,103,826
273.LIABILITIES 274. 275.
276.Payable for investments purchased $ 5,502,384 277.
278.Distributions payable 80,713 279.
280.Accrued management fee 331,584 281.
282. 283.TOTAL LIABILITIES 284. 5,914,681
285.286.NET ASSETS 287. $ 1,253,189,145
288.Net Assets consist of: 289. 290.
291.Paid in capital 292. $ 1,253,841,294
293.Accumulated net realized gain (loss) on 294. (652,149)
investments
295.296.NET ASSETS, for 1,253,841,267 shares 297. $ 1,253,189,145
outstanding
298.299.NET ASSET VALUE, offering price and 300. $1.00
redemption price per share ($1,253,189,145 (divided by)
1,253,841,267 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED AUGUST 31, 1995 (UNAUDITED)
301.302.INTEREST INCOME 303. $ 24,805,628
304.EXPENSES 305. 306.
307.Management fee $ 3,098,298 308.
309.Non-interested trustees' compensation 3,196 310.
311. Total expenses before reductions 3,101,494 312.
313. Expense reductions (1,198,669) 1,902,825
314.315.NET INTEREST INCOME 316. 22,902,803
317.REALIZED AND UNREALIZED GAIN (LOSS) 319. 108,097
318.Net realized gain (loss) on investment securities
320.Increase (decrease) in net unrealized gain from 321. (375)
accretion
of market discount
322.323.NET GAIN (LOSS) 324. 107,722
325.326.NET INCREASE IN NET ASSETS RESULTING FROM 327. $ 23,010,525
OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS YEAR
ENDED ENDED
AUGUST 31, 1995 FEBRUARY 28,
(UNAUDITED) 1995
328.INCREASE (DECREASE) IN NET ASSETS
329.Operations $ 22,902,803 $ 35,570,302
Net interest income
330. Net realized gain (loss) 108,097 (725,885)
331. Increase (decrease) in net unrealized gain from (375) 375
accretion of market discount
332. 23,010,525 34,844,792
333.NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS
334.Distributions to shareholders from net interest (22,902,803) (35,570,302)
income
335.Share transactions at net asset value of $1.00 per 837,915,741 1,667,363,709
share
Proceeds from sales of shares
336. Reinvestment of distributions from net interest 22,199,605 34,366,827
income
337. Cost of shares redeemed (770,285,288) (1,602,356,882)
338.339. 89,830,058 99,373,654
NET INCREASE (DECREASE) IN NET ASSETS AND SHARES
RESULTING FROM SHARE TRANSACTIONS
340. 89,937,780 98,648,144
341.TOTAL INCREASE (DECREASE) IN NET ASSETS
342.NET ASSETS 343. 344.
345. Beginning of period 1,163,251,365 1,064,603,221
346. End of period $ 1,253,189,145 $ 1,163,251,365
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
347. SIX MONTHS YEARS ENDED FEBRUARY 28, TEN MONTHS YEARS ENDED APRIL 30,
ENDED ENDED
AUGUST 31, 199 FEBRUARY 28,
5
348. (UNAUDITED) 1995 1994 1993 1992 1991
349.SELECTED PER-SHARE DATA
350.Net asset value,
beginning of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
351.Income from
Investment Operations .019 .030 .024 .022 .041 .054
Net interest income
352.Less Distributions (.019) (.030) (.024) (.022) (.041) (.054)
From net interest income
353.Net asset value,
end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
354.TOTAL RETURN B 1.87% 3.00% 2.45% 2.24% 4.15% 5.52%
355.RATIOS AND SUPPLEMENTAL DATA
356.Net assets, end of
period (000 omitted) $ 1,253,189 $ 1,163,251 $ 1,064,603 $ 855,590 $ 917,640 $ 763,959
357.Ratio of expenses
to average net assets .31% .28% .21% .30% .10% .07%
A A
358.Ratio of expenses
to average net assets
before .50% .50% .50% .50% .50% .50%
expense reductions A A
359.Ratio of net
interest income to
average net assets 3.69% 2.96% 2.42% 2.67% 4.05% 5.33%
A A
</TABLE>
A ANNUALIZED
B TOTAL RETURNS DO NOT INCLUDE THE ACCOUNT CLOSEOUT FEE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED. THE TOTAL RETURNS WOULD HAVE BEEN
LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
SEE NOTE 4 OF NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
NOTES TO FINANCIAL STATEMENTS
For the period ended August 31, 1995 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES.
Spartan California Municipal High Yield Portfolio (the high yield fund) and
Spartan California Intermediate Portfolio (the intermediate fund)are a
funds of Fidelity California Municipal Trust. Spartan California Municipal
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.
Each fund is authorized to issue an unlimited number of shares. The
following summarizes the significant accounting policies of the high yield
fund, the intermediate fund and the money market fund:
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 of their purchase date 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 substantially 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
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principals. These differences, which may result in distribution
reclassifications, are primarily due to differing treatments for futures
and options transactions, losses deferred due to wash sales, futures and
options and excise tax regulations.
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.
2. OPERATING POLICIES.
FUTURES CONTRACTS AND OPTIONS. The high yield and intermediate funds may
use futures and options contracts to manage its exposure to the bond market
and to fluctuations in interest rates. Buying futures, writing puts, and
buying calls tend to increase the fund's exposure to the underlying
instrument. Selling futures, buying puts, and writing calls tend to
decrease the fund's exposure to the underlying instrument, or hedge other
fund investments. Futures contracts and written options involve, to varying
degrees, risk of loss in excess of the futures variation margin or the
option value reflected in the Statement of Assets and Liabilities. The
underlying face amount at value is shown in the schedules of investments
under the caption "Futures Contracts". This amount reflects each contract's
exposure to the underlying instrument at period end. Losses may arise from
changes in the value of the underlying instruments, if there is an illiquid
secondary market for the contracts, or if the counterparties do not perform
under the contracts' terms.
Futures contracts are valued at the settlement price established each day
by the board of trade or exchange on which they are traded. Exchange-traded
options 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.
HIGH YIELD FUND. Purchases and sales of securities, other than short-term
securities, aggregated $74,934,652 and $80,535,399, respectively.
The market value of futures contracts opened and closed during the period
amounted to $74,776,793 and $82,349,789, respectively.
INTERMEDIATE FUND. Purchases and sales of securities, other than short-term
securities, aggregated $ 27,670,037 and $12,504,951, respectively.
The market value of futures contracts opened and closed during the period
amounted to $10,268,845 and $9,800,170, respectively.
3. 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.
FMR also bears the cost of providing shareholder services to each fund. To
offset the cost of providing these services, FMR or its affiliates
collected certain transaction fees from shareholders which amounted to
$2,395, $568 and $11,070 for the high yield, intermediate and money market
funds, respectively.
4. EXPENSE REDUCTIONS.
FMR voluntarily agreed to reimburse the funds' operating expenses
(excluding interest, taxes, brokerage commissions and extraordinary
expenses) above a specified percentage of average net assets.
INTERMEDIATE FUND. For the period, the expense limitation ranged from an
annualized rate of .10% to .25%. For the period, the reimbursement reduced
expenses by $86,100.
MONEY MARKET FUND. For the period, the expense limitation ranged from an
annualized rate of .30% to .32%. For the period, the reimbursement reduced
expenses by $1,198,669.
TO CALL FIDELITY
FOR FUND INFORMATION AND QUOTES
The Fidelity Telephone Connection offers you special automated telephone
services for quotes and balances. The services are easy to use,
confidential and quick. All you need is a Touch Tone telephone.
YOUR PERSONAL IDENTIFICATION NUMBER
(PIN)
The first time you call one of our automated telephone services, we'll ask
you
to set up your Personal Identification
Number (PIN). The PIN assures that
only you have automated telephone
access to your account information.
Please have your Customer Number
(T-account #) handy when you call -
you'll need it to establish your PIN. If
you would ever like to change your PIN, just choose the "Change your
Personal
Identification Number" option when
you call. If you forget your PIN, please
call a Fidelity representative at 1-800-
544-6666 for assistance.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND QUOTES*
1-800-544-8544
Just make a selection from this record-ed menu:
PRESS
For quotes on funds you own.
1.
For an individual fund quote.
2.
For the ten most frequently
requested Fidelity fund quotes.
3.
For quotes on Fidelity Select
Portfolios(registered trademark).
4.
To change your Personal
Identification Number (PIN).
5.
To speak with a Fidelity
representative.
6.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND ACCOUNT
BALANCES 1-800-544-7544
Just make a selection from this record-
ed menu:
PRESS
For balances on funds you own.
1.
For your most recent fund activity
(purchases, redemptions, and
dividends).
2.
To change your Personal
Identification Number (PIN).
3.
To speak with a Fidelity
representative.
4.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
RETURN WILL
VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS
MEANS THAT
YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO
ASSURANCE THAT
MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN
INVESTMENT IN
A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF
DIVIDENDS
AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES.
TO WRITE FIDELITY
If more than one address is listed, please locate the address that is
closest to you. We'll give your correspondence immediate attention and send
you written confirmation upon completion of your request.
(LETTER_GRAPHIC)(LETTER_GRAPHIC)MAKING CHANGES
TO YOUR ACCOUNT
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(LETTER_GRAPHIC)(LETTER_GRAPHIC)FOR NON-RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
OVERNIGHT EXPRESS
Fidelity Investments
100 Crosby Parkway - KP2C
Covington, KY 41015-4399
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6I
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 193
Boston, MA 02210-0193
(LETTER_GRAPHIC)(LETTER_GRAPHIC)FOR RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6R
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
