FIDELITY
(REGISTERED TRADEMARK)
CALIFORNIA
MUNICIPAL
FUNDS
(FORMERLY FIDELITY CALIFORNIA TAX-FREE PORTFOLIOS)
ANNUAL REPORT
FEBRUARY 29, 1996
CONTENTS
CHECK PAGE NUMBERS !!!
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PRESIDENT'S MESSAGE 3 NED JOHNSON ON INVESTING
STRATEGIES
FIDELITY CALIFORNIA MUNICIPAL INCOME FUND
(FORMERLY 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 INSURED MUNICIPAL INCOME FUND
(FORMERLY FIDELITY CALIFORNIA TAX-FREE INSURED PORTFOLIO)
25 PERFORMANCE
28 FUND TALK: THE MANAGER'S OVERVI
EW
31 INVESTMENT CHANGES
32 INVESTMENTS
38 FINANCIAL STATEMENTS
FIDELITY CALIFORNIA MUNICIPAL MONEY MARKET FUND
(FORMERLY FIDELITY CALIFORNIA TAX-FREE MONEY MARKET PORTFOLIO)
42 PERFORMANCE
44 FUND TALK: THE MANAGER'S OVERVI
EW
46 INVESTMENT CHANGES
47 INVESTMENTS
55 FINANCIAL STATEMENTS
NOTES 59 NOTES TO THE FINANCIAL STATEMENTS
REPORT OF INDEPENDENT 63 THE AUDITOR'S OPINION
ACCOUNTANTS
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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 RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
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 were fairly positive in 1995, no one can predict what
lies ahead for investors. The previous 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 MUNICIPAL INCOME FUND
(FORMERLY 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 FEBRUARY 29, 1996 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
California Municipal Income 11.25% 45.40% 102.28%
Lehman Brothers California Municipal
Bond Index 11.71% n/a n/a
California Municipal Debt Funds Average 10.35% 46.36% 106.27%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, 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 California
Municipal Bond Index, which includes California investment-grade municipal
bonds. To measure how the fund's performance stacked up against its peers,
you can compare it to the California municipal debt funds average, which
reflects the performance of 93 California municipal debt funds with similar
objectives tracked by Lipper Analytical Services over the past year. Both
benchmarks include reinvested dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, 1996 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
California Municipal Income 11.25% 7.77% 7.30%
Lehman Brothers California Municipal
Bond Index 11.71% n/a n/a
California Municipal Debt Funds Average 10.35% 7.91% 7.49%
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
CA Municipal IncLB Municipal Bo
02/28/86 10000.00 10000.00
03/31/86 10137.06 10003.20
04/30/86 10090.96 10010.80
05/31/86 9940.48 9847.83
06/30/86 10019.92 9941.77
07/31/86 10061.65 10002.12
08/31/86 10524.69 10449.92
09/30/86 10494.24 10476.15
10/31/86 10669.56 10657.07
11/30/86 10844.63 10868.19
12/31/86 10874.86 10838.19
01/31/87 11163.82 11164.53
02/28/87 11250.31 11219.46
03/31/87 11170.31 11100.53
04/30/87 10315.00 10543.51
05/31/87 10159.70 10491.21
06/30/87 10342.10 10799.23
07/31/87 10459.77 10909.38
08/31/87 10511.96 10933.93
09/30/87 9944.89 10530.80
10/31/87 10037.34 10568.07
11/30/87 10275.39 10844.01
12/31/87 10476.06 11001.35
01/31/88 10975.84 11393.22
02/29/88 11117.00 11513.65
03/31/88 10758.07 11379.51
04/30/88 10801.59 11466.00
05/31/88 10845.72 11432.86
06/30/88 11021.52 11600.12
07/31/88 11086.25 11675.76
08/31/88 11131.14 11686.03
09/30/88 11373.48 11897.55
10/31/88 11638.28 12107.54
11/30/88 11504.74 11996.64
12/31/88 11709.63 12119.36
01/31/89 11872.54 12369.99
02/28/89 11758.24 12228.85
03/31/89 11740.98 12199.62
04/30/89 12081.63 12489.24
05/31/89 12337.56 12748.64
06/30/89 12494.70 12921.77
07/31/89 12607.91 13097.63
08/31/89 12454.65 12969.41
09/30/89 12470.70 12930.76
10/31/89 12594.91 13088.90
11/30/89 12790.73 13317.96
12/31/89 12842.18 13426.90
01/31/90 12752.37 13363.39
02/28/90 12915.35 13482.99
03/31/90 12943.92 13487.04
04/30/90 12759.40 13389.39
05/31/90 13066.07 13681.68
06/30/90 13186.18 13801.94
07/31/90 13389.93 14005.52
08/31/90 13204.59 13802.16
09/30/90 13257.00 13810.03
10/31/90 13428.30 14060.54
11/30/90 13683.99 14343.30
12/31/90 13735.77 14405.69
01/31/91 13860.48 14599.02
02/28/91 13911.66 14726.03
03/31/91 13926.90 14731.33
04/30/91 14091.13 14927.99
05/31/91 14231.12 15060.70
06/30/91 14234.29 15045.79
07/31/91 14413.72 15229.05
08/31/91 14542.86 15429.62
09/30/91 14698.74 15630.51
10/31/91 14880.25 15771.19
11/30/91 14882.47 15815.19
12/31/91 15131.14 16154.58
01/31/92 15212.64 16191.41
02/29/92 15238.59 16196.60
03/31/92 15230.29 16202.59
04/30/92 15350.83 16346.79
05/31/92 15541.88 16539.19
06/30/92 15784.46 16816.72
07/31/92 16273.30 17320.89
08/31/92 16047.61 17152.01
09/30/92 16129.49 17264.18
10/31/92 15830.52 17094.48
11/30/92 16199.79 17400.64
12/31/92 16449.70 17578.30
01/31/93 16646.06 17782.73
02/28/93 17407.24 18425.93
03/31/93 17200.80 18231.17
04/30/93 17355.10 18415.13
05/31/93 17456.13 18518.62
06/30/93 17737.44 18827.69
07/31/93 17737.42 18852.36
08/31/93 18169.94 19244.86
09/30/93 18399.68 19464.06
10/31/93 18431.09 19501.63
11/30/93 18240.79 19329.82
12/31/93 18659.43 19737.87
01/31/94 18870.63 19963.28
02/28/94 18349.26 19446.23
03/31/94 17410.92 18654.38
04/30/94 17484.05 18812.57
05/31/94 17604.43 18975.67
06/30/94 17424.53 18859.73
07/31/94 17779.65 19205.43
08/31/94 17840.86 19271.88
09/30/94 17567.12 18988.97
10/31/94 17136.13 18651.73
11/30/94 16715.26 18314.50
12/31/94 17002.16 18717.61
01/31/95 17611.41 19252.55
02/28/95 18182.08 19812.42
03/31/95 18368.82 20040.06
04/30/95 18372.31 20063.71
05/31/95 18989.02 20703.94
06/30/95 18742.63 20522.78
07/31/95 18914.01 20717.34
08/31/95 19135.22 20980.04
09/30/95 19305.58 21112.84
10/31/95 19630.56 21419.82
11/30/95 20020.99 21775.18
12/31/95 20262.04 21984.43
01/31/96 20385.38 22150.42
02/29/96 20228.03 22000.90
$10,000 OVER 10 YEARS: Let's say you invested $10,000 in Fidelity
California Municipal Income Fund ten years ago on February 28, 1986. As the
chart shows, by February 29, 1996, the value of your investment would have
grown to $20,228 - a 102.28% increase on your initial investment. For
comparison, look at how the Lehman Brothers Municipal Bond Index, which
reflects the performance of the investment-grade municipal bond market, did
over the same period. With dividends reinvested, the same $10,000 would
have grown to $22,001 - a 120.01% 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
YEAR ENDED
FEBRUARY 29, YEARS ENDED FEBRUARY 28,
1996 1995 1994 1993 1992
Dividend return 5.86% 5.96% 5.82% 6.89% 6.88%
Capital appreciation
return 5.39% -6.87% -0.41% 7.34% 2.66%
Total return 11.25% -0.91% 5.41% 14.23% 9.54%
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
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PERIODS ENDED FEBRUARY 29, 1996 PAST PAST 6 PAST 1
MONTH MONTHS YEAR
Dividends per share 4.85(cents) 30.58(cents) 62.22(cents)
Annualized dividend rate 5.15% 5.26% 5.42%
30-day annualized yield 4.69% - -
30-day annualized tax-equivalent yield 8.23% - -
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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 $11.85 over
the past month, $11.67 over the past six months and $11.47 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 1996 federal and state tax bracket but
does not reflect the payment of the federal alternative minimum tax, if
applicable.
FIDELITY CALIFORNIA MUNICIPAL INCOME FUND
(FORMERLY FIDELITY CALIFORNIA TAX-FREE HIGH YIELD PORTFOLIO)
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
In sharp contrast to much of
1994, the municipal bond market
posted strong returns for the 12
months ended February 29,
1996. For the period, the Lehman
Brothers Municipal Bond Index -
a broad measure of the tax-free
market - had a total return of
11.05%. By comparison, the
Lehman Brothers Aggregate
Bond Index - a proxy for
investment-grade taxable bonds
- - had a total return of 12.24%.
Tax-free bonds kicked off 1995
by surging ahead of their taxable
counterparts in the first quarter on
signs of a slowing economy and
tamer inflation expectations. By
spring, however, the muni bond
market began to underperform
U.S. Treasury securities when
various proposals for reforming
the tax-code, some of which
threatened the tax-exempt status
of municipal securities, began to
receive attention in Congress.
This threat of tax reform
dampened enthusiasm in the
municipal bond market, stalling
the rally and helping shorter
maturity bonds to outperform their
longer counterparts throughout
the spring and summer months.
By the fourth quarter of 1995,
historically attractive valuations
brought buyers back to the
market. Additionally, in the weeks
leading up to the end of the
period, the municipal market
responded favorably to
diminishing supply and the
rhetorical beating the "flat tax"
took in the Republican
presidential primaries.
An interview with Jonathan Short, Portfolio Manager of Fidelity California
Municipal Income Fund
Q. HOW HAS THE FUND PERFORMED, JONATHAN?
A. For the 12-month period ended February 29, 1996, the fund had a total
return of 11.25%. For the same period, the California municipal debt funds
average returned 10.35%, as tracked by Lipper Analytical Services.
Meanwhile, the Lehman Brothers California Municipal Bond Index returned
11.71%.
Q. WHAT HELPED THE FUND OUTPACE THE AVERAGE?
A. The main factor was its weighting in intermediate-term bonds. The yield
curve (a graphical representation of the yields bonds of various maturities
pay) steepened in the early part, and then again in the latter part, of the
period. When the yield curve steepened, intermediate bonds generally
performed better than longer-term bonds. On balance, the fund's weighting
in intermediate bonds was a positive for the fund and helped its
performance relative to its competitors. The fund's holdings in
non-callable bonds, which can't be redeemed by their issuer prior to
maturity, also performed well during the period.
Q. HOW DID YOU CHANGE THE WAY THE FUND IS DISTRIBUTED AMONG BONDS WITH
VARIOUS CREDIT QUALITIES?
A. I upgraded the fund's overall credit quality by reducing its stake in
bonds rated below investment-grade (below Baa, as judged by Moody's
Investors Service), and replaced them with investment-grade bonds (rated
Baa or higher). Credit spreads, which measure the difference in yields
between bonds of various credit ratings, were tight. By that I mean that
the difference in yields between lower- and higher-rated bonds had
narrowed. As spreads narrowed, the lower-rated bonds did well relative to
lower-quality securities, so I sold many to lock in their price
appreciation.
Q. WOULD THAT UPGRADING BE THE REASON WHY THE FUND'S STAKE IN HEALTH CARE
BONDS DECLINED OVER THE PAST SIX MONTHS?
A. That's part of the reason. I sold some of the fund's Baa-rated and
non-investment grade health care bonds in order to lock in the price
appreciation they had enjoyed. In doing so, I was able to reduce the fund's
exposure to Baa-rated securities. In particular, I weeded out hospital
bonds that I thought could be vulnerable in a more competitive, cost-driven
environment.
Q. ON THE OTHER HAND, THE FUND'S STAKE IN GENERAL OBLIGATION BONDS
INCREASED OVER THE PAST SIX MONTHS. WHY?
A. That's true. General obligation bonds (GOs) are backed by the full faith
and credit (which includes the taxing and further borrowing power) of an
issuing municipality or state. GOs in general have benefited from
California's improving economy, which has translated into higher tax
revenues. I concentrated on buying bonds issued by the state because that's
where the effects of an improving economy will first be apparent. State
revenues, including income taxes, tend to be more economically sensitive
than local revenues, such as property taxes.
Q. WERE THERE ANY DISAPPOINTMENTS?
A. Bonds issued by the Santa Ana Redevelopment Agency, which represented
less than 1% of the fund's investments at the end of the period, were
disappointing. Assessed property values in the region declined, which
translated into lower tax revenues for the agency. As a result, the credit
quality of the bonds deteriorated, and I subsequently sold these holdings.
Q. HOW DID RECENT CHANGES TO THE FUND'S INVESTMENT POLICY AFFECT YOUR
STRATEGY?
A. The fund is now permitted to invest in any amount of municipal
securities that may be considered taxable under the alternative minimum tax
(AMT). Previously, the fund was limited to 20%. The AMT is an alternative
method for calculating federal income tax liabilities and is generally
limited to individuals in high-income tax brackets. I am now able to focus
on all marketplace opportunities - including areas dominated by AMT
securities, such as student loans and airports. If you are not subject to
the AMT, the recent policy change will in no way affect the tax-exempt
status of your income from the fund. If you are an investor who is subject
to the AMT, or if you are unsure, you should consult your tax advisor for
further information as to how this change may impact your tax situation.
Q. WHAT'S YOUR OUTLOOK?
A. Interest rates are relatively low right now. Given that falling interest
rates were the primary engine driving the bond markets' performance last
year, it may be difficult for municipals to match last year's gains this
year. So in my view, identifying the right securities within the right
sectors will be a key to outperforming the market in 1996.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.
FUND FACTS
GOAL: high current tax-free
income for California
residents
START DATE: July 7, 1984
SIZE: as of February 29,
1996, more than $497 million
MANAGER: Jonathan Short,
since March 1995; manager,
Fidelity California Insured
Municipal Income, Fidelity
Minnesota Municipal Income,
Spartan California Municipal
Income, Spartan California
Intermediate Municipal Income,
since October 1995; Spartan
Arizona Municipal Income
fund, as of October 1, 1995;
joined Fidelity in 1990
(checkmark)
JONATHAN SHORT ON THE
CALIFORNIA ECONOMY:
"In hindsight, it appears that
the California economy hit a
turning point in 1995. Last
year, the state's economy
grew at a faster pace than the
nation as a whole, after
several years of lagging the
country. Job growth was
strong, driven by employment
gains in the entertainment,
technology and global trade
sectors. The state's
employment growth was
nearly three percent in 1995,
versus a national average of
below two percent. The
state's fiscal situation has
improved along with the
economy. For this fiscal year
so far, revenues are coming in
well ahead of budget. For
fiscal year 1996, which ends
June 30, 1996, revenues are
estimated to be $1 billion
ahead of budget. In
determining the risks and
rewards available in the
market, I use the Lehman
Brothers California Municipal
Bond Index as a proxy for the
overall market. I believe this
index is the best available
benchmark for managing the
fund."
DISTRIBUTIONS
The Board of Trustees of
Fidelity California Municipal
Trust: Fidelity California
Municipal Income Fund voted
to pay on April 8, 1996, to
shareholders of record at the
opening of business on April 4,
1996, a distribution of $.003
derived from capital gains
realized from sales of portfolio
securities.
FIDELITY CALIFORNIA MUNICIPAL INCOME FUND
(FORMERLY FIDELITY CALIFORNIA TAX-FREE HIGH YIELD PORTFOLIO)
INVESTMENT CHANGES
TOP FIVE SECTORS AS OF FEBRUARY 29, 1996
% OF FUND'S % OF FUND'S INVESTMENT
INVESTMENTS S
IN THESE SECTORS
6 MONTHS AGO
General Obligation 25.4 7.5
Health Care 12.3 19.2
Special Tax 12.0 17.0
Electric Revenue 11.8 12.9
Water & Sewer 10.9 8.6
AVERAGE YEARS TO MATURITY AS OF FEBRUARY 29, 1996
6 MONTHS AGO
Years 15.8 16.0
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 FEBRUARY 29, 1996
6 MONTHS AGO
Years 7.9 8.2
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 FEBRUARY 29, 1996 AS OF AUGUST 31, 1995
Aaa 40.2%
Aa, A 38.5%
Baa 14.7%
Caa 0.5%
Non-rated 4.4%
Short-term investments 1.7%
Aaa 37.5%
Aa, A 35.2%
Baa 15.2%
Caa 0.5%
Non-rated 6.1%
Short-term investments 5.5%
Row: 1, Col: 1, Value: 40.2
Row: 1, Col: 2, Value: 38.5
Row: 1, Col: 3, Value: 14.8
Row: 1, Col: 4, Value: 1.5
Row: 1, Col: 5, Value: 4.4
Row: 1, Col: 6, Value: 2.6
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
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% OF THE FUND'S INVESTMENTS AT
FEBRUARY 29, 1996, AND AUGUST 31, 1995.
FIDELITY CALIFORNIA MUNICIPAL INCOME FUND
(FORMERLY FIDELITY CALIFORNIA TAX-FREE HIGH YIELD PORTFOLIO)
INVESTMENTS FEBRUARY 29, 1996
Showing Percentage of Total Value of Investments
MUNICIPAL BONDS - 98.3%
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - 98.3%
Alameda County Ctfs. of Prtn. Rfdg.
(Santa Rita Jail Proj.) 5.375% 6/1/09
(MBIA Insured) Aaa $ 4,100,000 $ 4,202,500
Alameda Hsg. Auth. Multi-Family Hsg. Rev.
(Independence Apts.) Series A, 7.50%
2/20/31 (GNMA Coll.) - 2,625,000 2,707,031
Buena Park Commty. Redev. Agcy. Tax Allocation
Rfdg. (Central Business Dist. Proj.)
7.10% 9/1/14 BBB+ 2,000,000 2,095,000
Burbank Redev. Agcy. Tax Allocation Series A:
Rfdg. 5.75% 12/1/08 Baa1 2,300,000 2,305,750
6% 12/1/23 Baa1 1,975,000 1,908,344
California Dept. Wtr. Resources Rev. (Ctr. Valley Proj.):
Series H, 6.90% 12/1/25 Aaa 2,000,000 2,237,500
Series J-3, 5.90% 12/1/05 Aa 1,005,000 1,097,963
California Ed. Facs. Auth. Rev. (Stanford Univ.)
Series J, 6% 11/1/16 Aaa 1,955,000 2,035,644
California Gen. Oblig.:
11% 9/1/96 A1 2,400,000 2,486,472
6.90% 4/1/05 A1 1,350,000 1,557,563
5.25% 10/1/13 A1 1,700,000 1,661,750
5.25% 10/1/14 A1 3,000,000 2,913,750
Unltd. Tax:
6% 9/1/03 A1 4,000,000 4,350,000
6.40% 2/1/05 A1 1,685,000 1,878,775
California Health Facs. Fing. Auth. Rev.:
Rfdg. (Alexian Brothers, San Jose):
7.05% 1/1/09 (MBIA Insured) Aaa 4,500,000 4,950,000
7.125% 1/1/16 (MBIA Insured) Aaa 2,510,000 2,729,625
Rfdg. (Children's Hosp.) Series A, 6% 7/1/05
(MBIA Insured) Aaa 1,850,000 2,011,875
(Daughters of Charity-St. Vincents Hosp.)
Series A, 9.25% 11/1/15 Aa 1,000,000 1,029,260
(Gould Med. Foundation)
Series A, 7.30% 4/1/20 A 3,000,000 3,390,000
(Kaiser Permanente Health Sys.) Series A:
0% 10/1/09 Aa3 7,140,000 3,373,650
0% 10/1/10 Aa3 3,795,000 1,674,544
(Robert F. Kennedy Med. Ctr.)
Series A, 7.75% 3/1/14 A 2,980,000 3,177,425
(Sacramento Med. Foundation)
Series F, 7.875% 6/1/18 A 1,000,000 1,072,500
(St. Elizabeth Hosp. Proj.) 6.30% 11/15/15
(Pre-Refunded to 11/15/02 @ 102) (c) A1 1,000,000 1,123,750
California Hsg. Fin. Agcy. Rev. (Home Mtg.):
Series A:
5% 8/1/03 (MBIA Insured) (f) Aaa 2,000,000 1,980,000
8.10% 8/1/16 Aa 1,475,000 1,510,857
Series F, 7.875% 8/1/19 Aa 830,000 858,013
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
California Industry Urban Ind. Dev. Agcy.:
Rfdg. (Civic Recreational Proj.#1)
Series A, 7.375% 5/1/12 - $ 7,990,000 $ 8,369,525
(Civic Recreational Proj.#1-B) 7.375% 5/1/15 - 245,000 256,638
California Poll. Cont. Fing. Auth. Poll. Cont. Rev.
(General Motors Corp.) 5.50% 4/1/08 A3 1,500,000 1,496,250
California Pub. Cap. Impt. Fing. Auth. Rev.
(Pooled Proj.) Series B, 8.10% 3/1/18
(MBIA Insured) Aaa 965,000 1,039,788
California Pub. Wrks. Board Lease Rev.:
Rfdg. (Dept. Corrections State Prisons)
Series A, 5% 12/1/19 (AMBAC Insured) Aaa 3,250,000 3,050,938
Rfdg. (Dept. Corrections St. Prisons, Del Norte)
Series C:
4.50% 12/1/01 A 2,845,000 2,834,331
4.875% 12/1/06 A 1,550,000 1,519,000
(Dept. Corrections State Prisons, Madera)
Series E, 5.50% 6/1/15 A 1,750,000 1,712,813
(University of California Projs.):
Series A:
6.50% 9/1/03 A 1,045,000 1,150,806
5.50% 6/1/10 A1 1,915,000 1,938,938
5.50% 6/1/14 A1 10,775,000 10,559,500
Series B:
5.25% 6/1/07 A1 2,965,000 3,009,475
6.40% 12/1/09 A1 1,000,000 1,108,750
5.55% 6/6/10 A1 3,195,000 3,250,913
5.50% 6/1/14 A1 2,750,000 2,664,063
5% 6/1/06 A1 1,730,000 1,740,813
6.30% 10/1/10 A 2,000,000 2,147,500
California Rural Home Mtg. Fin. 4.45% 8/1/01
(MBIA Insured) Aaa 2,500,000 2,484,375
California Statewide Commty. Dev. Corp. Ctfs. of Prtn.:
Rfdg. (Insured Hosp.) (Triad Healthcare)
6.25% 8/1/06 A 2,000,000 2,060,000
(Catholic Healthcare) 7.102% 7/1/13
(MBIA Insured), INFL (e) Aaa 2,000,000 1,990,000
(Odd Fellows):
5.375% 10/1/13 A+ 2,500,000 2,353,125
5.50% 10/1/23 A+ 475,000 445,313
(St. Joseph Health Sys.):
5.50% 7/1/14 Aa 3,500,000 3,408,125
5.50% 7/1/23 Aa 3,000,000 2,883,750
(Sisters of Charity Leavenworth) 5% 12/1/23 Aa 5,375,000 4,797,188
(Villaview Commty. Hosp. Proj.)
Series A, 7% 9/1/09 A 1,000,000 1,088,750
Campbell Ctfs. of Prtn. Rfdg. (Civic Center Proj.)
6% 10/1/18 A 2,400,000 2,397,000
Carson Redev. Agcy. Tax Allocation Rfdg.
(Redev. Proj. Area #1) :
6.375% 10/1/12 Baa1 1,500,000 1,518,750
6.375% 10/1/16 Baa1 1,000,000 1,006,250
(Redev. Proj. Area #2) 6% 10/1/13 Baa 1,750,000 1,701,875
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Castaic Lake Wtr. Agcy. Ctfs. of Prtn. Rfdg.
(Wtr. Sys. Impt. Prog.) Series A:
7.25% 8/1/08 (MBIA Insured) Aaa $ 1,500,000 $ 1,807,500
7% 8/1/13 (MBIA Insured) Aaa 1,580,000 1,860,450
Central California Joint Pwrs. Health Fing. Auth.
Ctfs. of Prtn.:
Rfdg. (Commty. Hosp. of Central California Proj.)
5% 2/1/23 A 5,600,000 4,739,000
(Commty. Hosp. of Central California Proj.)
5.25% 2/1/13 A 1,000,000 912,500
Central Valley Fing. Auth. Rev. (Cogeneration Proj.)
(Carson Ice Gen. Proj.):
5.80% 7/1/04 BBB- 1,500,000 1,531,875
6% 7/1/09 BBB- 1,750,000 1,745,625
6.10% 7/1/13 BBB- 1,000,000 988,750
Compton Commty. Redev. Agcy. Tax Allocation
Rfdg. (Walnut Ind. Park Proj.) 7.50% 8/1/13
(AMBAC Insured) Aaa 3,900,000 4,411,875
Contra Costa County Ctfs. of Prtn.
(Merrithew Mem. Hosp.):
0% 11/1/07 A1 4,615,000 2,405,569
(Capital Appreciation) 0%, 11/1/13 A1 6,805,000 2,424,281
Contra Costa Trans. Auth. (Sales Tax Rev.)
Series A, 6% 3/1/04 (FGIC Insured) Aaa 2,605,000 2,842,706
Contra Costa Wtr. Dist. Wtr. Rev. Series G, 5%
10/1/24 (MBIA Insured) Aaa 1,000,000 920,000
Desert Hosp. Dist. Rev. Ctfs. of Prtn.
6.392% 7/28/20 (CGIC Insured) Aaa 8,000,000 8,330,000
Duarte Ctfs of Prtn. (City of Hope Nat'l. Medical
Ctr.) 6.25% 4/1/23 Baa1 3,000,000 2,906,250
East Bay Mun. Util. Dist. Wtr. Sys. Rev.:
Rfdg. :
5.75% 6/1/04 (MBIA Insured) Aaa 4,000,000 4,305,000
6% 6/1/12 (FGIC Insured) Aaa 1,000,000 1,038,750
6.10% 6/1/07 A1 1,250,000 1,346,875
6% 6/1/09 (AMBAC Insured) Aaa 1,000,000 1,062,500
East Bay Reg. Park Dist. Series C:
6.50% 9/1/02 (FGIC Insured) Aaa 1,220,000 1,361,825
6.50% 9/1/03 (FGIC Insured) Aaa 1,285,000 1,445,625
Eastern Muni. Wtr. Dist. Wtr. & Swr. Rev. Ctfs. of
Prtn. 6.75% 7/1/12 (FGIC Insured) Aaa 1,600,000 1,830,000
Elk Grove Unified School Dist. Spl. Tax Rfdg.
(Commty. Facs. Dist. #1) 6.50% 12/1/07
(AMBAC Insured) Aaa 840,000 961,800
Fontana Redev. Agcy. Tax Allocation Rfdg. (Jurupa Hills):
Series 1992 A, 7.10% 10/1/23 BBB 2,495,000 2,597,919
Series A, 7% 10/1/14 BBB+ 2,300,000 2,412,125
Foothill/Eastern Trans. California Toll Rd. Rev. Sr. Lien
Series A, 6% 1/1/16 BBB- 9,500,000 9,345,625
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Foster City Pub. Fing. Auth. Rev.
(Foster City Commty. Proj.) Series A:
6% 9/1/06 A- $ 1,355,000 $ 1,405,813
6% 9/1/07 A- 1,440,000 1,477,800
6% 9/1/13 A- 1,925,000 1,929,813
Fountain Valley Agcy. for Commty. Dev. Tax
Allocation (Ind. Area Redev. Proj.)
9.10% 1/1/15 BBB+ 1,745,000 1,775,817
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 1,588,125
Irvine Ranch Wtr. Dist. Joint Pwr. Agcy. Local Pool Rev.:
7.875% 2/15/23 A+ 390,000 409,988
8.25% 8/15/23 A+ 15,675,000 16,850,625
Kern County High School Dist. Gen. Oblig.
7% 8/1/09 A 1,090,000 1,276,663
Kings River Conservation Dist. Rev. Rfdg.
(Pine Flat Pwr.) 6.375% 1/1/12 Aa 3,830,000 4,040,650
La Quinta Redev. Agcy. Rfdg. (Tax Allocation Proj.
Area #1) 7.30% 9/1/05 (MBIA Insured) Aaa 1,000,000 1,196,250
Livermore Redev. Agcy. Tax Allocation Rev.
(Livermore Redev. Proj.) Series A, 7.75%
8/1/09 - 1,000,000 1,023,540
Local Gov't. Fin. Auth. Rev. (Oakland Central
Dist.) 0% 9/1/08 Aaa 3,710,000 1,938,475
Los Angeles Ctfs. of Prtn. (Health Facs. Construction
Loan) (Bay Harbor Hosp.) 7.30% 4/1/20 A 2,000,000 2,137,500
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 1,683,750
Los Angeles County Ctfs. of Prtn.:
(Correctional Facs.) 0%, 9/1/10
(MBIA Insured) Aaa 3,770,000 1,687,075
(Disney Parking Proj.):
0%, 3/1/11 Baa1 1,950,000 733,688
0% 3/1/13 Baa1 2,835,000 928,463
0% 9/1/15 Baa1 3,800,000 1,035,500
0% 9/1/17 Baa1 3,370,000 804,588
0% 3/1/18 Baa1 3,000,000 693,750
(Cap. Appreciation):
0% 9/1/10 Baa1 2,980,000 1,177,100
0% 3/1/20 Baa1 1,000,000 197,500
Los Angeles County Metropolitan Trans. Auth.
Sales Tax Rev. (Prop. C) Series A:
5.90% 7/1/03 (AMBAC Insured) Aaa 1,655,000 1,791,538
5.90% 7/1/04 (AMBAC Insured) Aaa 2,100,000 2,275,875
5.90% 7/1/07 (AMBAC Insured) Aaa 1,730,000 1,868,400
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Los Angeles Dept. Arpt. Rev. Rfdg. Series A,
5.50% 5/15/08 (FGIC Insured) Aaa $ 2,390,000 $ 2,476,638
Los Angeles Hbr. Dept. Rev. 7.60% 10/1/18
(Escrowed to Maturity) (c) Aa 5,540,000 6,156,325
Los Angeles Wastewtr. Sys. Rev. Series B:
6% 2/1/04 (FGIC Insured) Aaa 3,000,000 3,281,250
7% 6/1/10 (FGIC Insured)
(Pre-refunded to 6/1/00 @102) (c) Aaa 1,000,000 1,126,250
Madera County Ctfs. Prtn. (Valley Children's
Hospital) 6.25% 3/15/05 (MBIA Insured) Aaa 500,000 551,875
Modesto Irrigation Dist. Ctfs. of Prtn.:
Rfdg. & Cap. Impts. Series A:
0% 10/1/05 (MBIA Insured) Aaa 2,140,000 1,342,850
0% 10/1/08 (MBIA Insured) Aaa 2,270,000 1,188,913
(Geysers Geothermal Pwr. Proj.)
Series 1986, 5% 10/1/17 A1 5,000,000 4,450,000
Northern California Pwr. Agcy. Pub. Pwr. Rev.:
Crossover Rfdg. (Geothermal Proj. #3)
Series A, 5.50% 7/1/05
(AMBAC Insured) (d) Aaa 2,250,000 2,379,375
Rfdg. (Geothermal Proj.) Series A, 5.80%
7/1/09 (AMBAC Insured) Aaa 1,875,000 2,017,969
Rfdg. (Geothermal Proj. #3-B) 5.50% 7/1/01
(AMBAC Insured) (f) Aaa 1,500,000 1,575,000
7.50% 7/1/23 (AMBAC Insured)
(Pre-Refunded to 7/1/21 @ 100) (c) Aaa 1,355,000 1,710,688
Northern California Transmission Rev. (Ore
Transmission Proj.) Series A,
7% 5/1/13 (MBIA Insured) Aaa 7,000,000 8,233,750
Norwalk Redev. Agcy. Tax Allocation
(Norwalk Redev. Proj. #1) 7.15% 12/1/15 - 2,500,000 2,693,750
Oakland Ctfs. of Prtn. Rfdg. (Oakland Museum)
Series A, 0%, 4/1/07 (AMBAC Insured) Aaa 2,750,000 1,570,938
Oakland Port Rev.:
Rfdg. (Cap. Appreciation) Series F,
Series F, 0% 11/1/08 (MBIA Insured) Aaa 1,770,000 915,975
Rfdg. Series F, 0% 11/1/06 (MBIA Insured) Aaa 1,640,000 967,600
(Cap. Appreciation) Series F,
0% 11/1/07 (MBIA Insured) Aaa 4,250,000 2,342,813
Ontario Redev. Fing. Auth. Rev.:
(Cap. Appreciation Proj. #1) (Ctr. City)
0% 8/1/10 (MBIA Insured) Aaa 3,255,000 1,497,300
6.85% 8/1/09 (MBIA Insured) Aaa 1,135,000 1,325,113
Orange County Dev. Agcy. Tax Allocation
(Santa Ana Heights Proj.) 6.125% 9/1/23 Caa 2,500,000 2,334,375
Orange County Local Trans. Auth. Sales Tax Rev.
First Series-Measure M, 6% 2/15/08
(AMBAC Insured) Aaa 1,250,000 1,354,688
Palm Desert Fing. Auth. Tax Allocation
6.3675% 4/1/22 (MBIA Insured) Aaa 6,000,000 6,292,500
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (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 $ 1,852,813
Pasadena Ctfs. of Prtn. Rfdg. (Old Pasadena
Pkg. Facs. Proj.) 6.25% 1/1/18 A1 1,600,000 1,706,000
Placer County Wtr. Agcy. Middle Fork Proj. Rev.
Series A, 3.75% 7/1/12 A 8,830,000 7,130,225
Pleasanton Joint Pwrs. Fing. Auth. Rev. Reassessment
Series A:
5.70% 9/2/01 Baa 1,250,000 1,281,250
5.80% 9/2/02 Baa 2,895,000 2,978,231
6.15% 9/2/12 Baa 2,920,000 2,927,300
Rancho Mirage Joint Pwrs. Fing. Auth. Ctfs. of
Prtn. (Eisenhower Mem. Hosp.) 7% 3/1/22 A 3,300,000 3,526,875
Rancho Wtr. Dist. Fing. Auth. Rev.
Rfdg. 6.50% 11/1/04 (FGIC Insured) Aaa 1,985,000 2,240,569
Riverside County Asset Leasing Corp. Leasehold
Rev. (Riverside County Hosp. Proj.)
Series A, 6.50% 6/1/12 A 7,000,000 7,376,250
Riverside County. Trans. Commission Sales Tax Rev.
Series A, 5.30% 6/1/02 (AMBAC Insured) Aaa 1,000,000 1,045,000
Riverside Unified School Dist. Ctfs. of Prtn.
(Cap. Appreciation Land Acquisition Proj.)
Series B, 0% 9/1/26 (FSA Insured) Aaa 1,940,000 1,721,750
Sacramento Cogeneration Auth. Cogeneration Proj.
Rev. (Proctor & Gamble Proj.):
5.40% 7/1/98 BBB- 1,000,000 1,013,750
5.90% 7/1/02 BBB- 1,000,000 1,032,500
6.375% 7/1/10 BBB- 700,000 714,875
6.50% 7/1/14 BBB- 1,000,000 1,027,500
Sacramento Fing. Auth. Lease Rev. Rfdg.
Series A, 5.375% 11/1/14
(AMBAC Insured) Aaa 2,225,000 2,216,656
Sacramento Muni. Util. Dist. Elec. Rev.:
Rfdg. Series G, 6.5%, 9/1/13 Aaa 2,100,000 2,357,250
1.76% 11/15/08 (FGIC Insured) (g) Aaa 7,000,000 6,387,500
6.30% 8/15/18 (FGIC Insured) Aaa 3,500,000 3,692,500
Sacramento Pwr. Auth. Rev. (Cogeneration Proj.):
6.50% 7/1/06 BBB- 3,000,000 3,191,250
6.50% 7/1/07 BBB- 1,000,000 1,055,000
5.875% 7/1/15 BBB- 2,500,000 2,421,875
San Bernardino County Ctfs. of Prtn.:
(Cap. Facs. Proj.) Series B, 6.875% 8/1/24
(Escrowed to Maturity) (c) Baa1 2,500,000 3,071,875
(Med. Ctr. Fin.):
Rfdg. 5% 8/1/26 Baa1 1,855,000 1,511,825
5.50% 8/1/22 Baa1 5,500,000 4,915,625
San Diego County Reg. Trans. 5.25% 4/1/02
(FGIC Insured) Aaa 2,000,000 2,082,500
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (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 $ 4,415,000
6% 4/1/04 (FGIC Insured) Aaa 2,875,000 3,140,938
San Diego County Wtr. Auth. 5.632% 4/25/07
(FGIC Insured) Aaa 2,500,000 2,637,500
San Diego Multi-Family Hsg. Rev. (Island Gardens
Apts. Proj.) Series B, 9.50% 10/20/20
(Coll. GNMA) AAA 1,585,000 1,619,173
San Diego Pub. Facs. Fing. Swr. 6% 5/15/07
(FGIC Insured) Aaa 1,500,000 1,646,250
San Fransico Bay Area Rapid Transit Dist.
Sales Tax Rev. Rfdg. 6.75% 7/1/10,
(AMBAC Insured) Aaa 1,500,000 1,738,125
San Francisco Bldg. Auth. Lease Rev. (Dept. Gen.
Svcs. Lease) Series A 5% 10/1/08 A 1,320,000 1,295,250
San Francisco City & County Gen. Oblig.:
Series 1995 A & B, 6.50% 6/15/03
(FGIC Insured) Aaa 1,500,000 1,678,125
7.20% 9/1/01 A1 625,000 667,188
San Francisco City & County Public Safety Impt.
Proj. Series B, 7.20% 6/15/05 A1 1,000,000 1,081,250
San Francisco City & County Redev. Agcy.
7.75% 9/1/06 - 9,000,000 9,585,000
San Francisco City & County Redev. Fing.
Auth. Tax Allocation Rev. Series A:
0% 8/1/06 (FGIC Insured) Aaa 1,035,000 621,000
0% 8/1/07 (FGIC Insured) Aaa 1,085,000 608,956
0% 8/1/08 (FGIC Insured) Aaa 1,085,000 572,338
0% 8/1/09 (FGIC Insured) Aaa 1,085,000 533,006
0% 8/1/10 (FGIC Insured) Aaa 1,085,000 499,100
San Francisco City & County School Dist. Facs.
Impt. Proj. Series C, 6.20% 6/15/11
(FGIC Insured) Aaa 1,755,000 1,869,075
San Francisco City & County Swr. Rev. Rfdg.
5.90% 10/1/08 (AMBAC Insured) Aaa 2,000,000 2,122,500
San Jose Ctfs. of Prtn. Rfdg. (Communication
Ctr. Proj.) 6.50% 5/1/10 (MBIA Insured) Aaa 3,500,000 3,819,375
San Jose Redev. Agcy. Tax. Allocation
(Merged Area Redev. Proj.):
6% 8/1/07 (MBIA Insured) Aaa 1,000,000 1,093,750
6% 8/1/08 (MBIA Insured) Aaa 1,000,000 1,090,000
Santa Ana Commty Redev. Agcy. Tax Allocation
(Santa Ana Redev. Proj. Area) Series B, 6.50%
12/15/14 AAA 855,000 936,225
Santa Clara Elec. Rev. Series B, 0% 7/1/06
(MBIA Insured) Aaa 2,080,000 1,248,000
Santa Clara Fing. Lease Auth. Rev. (VMC
Fac. Replacement Proj. A) 7.75% 11/15/09
(AMBAC Insured) Aaa 3,725,000 4,684,188
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
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 $ 2,645,500
7.25% 8/1/12 (MBIA Insured) Aaa 1,865,000 2,235,669
Sequoia Hosp. Dist. Rev. Rfdg.:
5.375% 8/15/13 Baa1 2,875,000 2,504,844
South Orange County Pub. Fin. Auth. Spl. Tax Rev.:
(Foothill Area) Series C, 7.50% 8/15/06
(FGIC Insured) Aaa 2,000,000 2,417,500
(Sr. Lien) Series A, 7% 9/1/09
(MBIA Insured) Aaa 3,000,000 3,513,750
Southern California Metropolitan Wtr. Dist.
Crossover Rfdg:
Series A1, 5.50% 3/1/10 Aaa 2,000,000 2,032,500
Series A2, 5% 3/1/02 Aaa 2,000,000 2,070,000
5.75% 7/1/09 Aa 3,000,000 3,202,500
5.75% 8/12/18 Aa 5,000,000 5,106,250
5% 7/1/20 Aa 2,515,000 2,316,944
7.559% 8/5/22, INFL (e) Aa 1,300,000 1,355,250
5.375% 8/15/23 Baa1 3,110,000 2,585,188
Southern California Pub. Pwr. Auth. Pwr. Proj. Rev.
(Mead Adelanto Proj.) Series A,
4.75% 7/1/16 (AMBAC Insured) Aaa 2,000,000 1,805,000
(Multiple Proj.):
6.75% 7/1/10 A 1,400,000 1,573,250
6.75% 7/1/11 A 4,000,000 4,495,000
Stanislaus County Ctfs. of Prtn. 5.25% 5/1/14
(MBIA Insured) Aaa 1,500,000 1,455,000
Sulphur Springs Unified School Dist. Series A:
0%, 9/1/07 (MBIA Insured) Aaa 4,445,000 2,472,531
0% 9/1/09 (MBIA Insured) Aaa 2,485,000 1,214,544
Univ. of California Rev. (Multiple Purpose Projects)
Series D, 6.10% 9/1/10
(MBIA Insured) Aaa 2,000,000 2,120,000
Upland Ctfs. of Prtn. (San Antonio Commty. Hosp.):
5.25% 1/1/08 A 1,850,000 1,773,669
5.25% 1/1/13 A 5,500,000 5,018,750
5% 1/1/18 A 2,000,000 1,730,000
West Covina Ctfs. of Prtn. (Queen of the Valley Hosp.)
6.50% 8/15/24 A 1,100,000 1,126,125
TOTAL MUNICIPAL BONDS
(Cost $464,747,083) 490,002,549
MUNICIPAL NOTES (A) - 1.7%
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - 1.7%
California Gen. Oblig. RAN Series C, 5.75%
4/25/96, LOC Bank of America National
Trust & Savings MIG 1 $ 700,000 $ 702,366
California Poll. Cont. Fing. Auth.
(Southern California Edison Proj.)
Series 1986 C, 3.50%, VRDN VMIG 1 1,200,000 1,200,000
Contra Costa Trans. Sales Tax Auth. 1993 Tax
Rev. Series A, 3.10% (FGIC Insured) VRDN VMIG 1 700,000 700,000
Irvine Ranch Wtr. Dist. Rev, VRDN.:
(Consolidated Dist. #140, 240, 105, 250)
Series 1993, 3.55%,
LOC Bank of America VMIG 1 700,000 700,000
(Consolidated Dist. #102, 103, 105 & 106)
Series 1995, 3.20%,
LOC Commerzbank AG VMIG 1 700,000 700,000
Los Angeles County TRAN
4.50% 7/1/96 MIG 1 2,450,000 2,458,722
Orange County Sanitation Dist. Cap. Impt.
Prog. 1990-1992 Series A,
(Dist. 1,2,3,5,6 7,11,13,14) 3.20%,
LOC Nat'l. Westminster Bank, VRDN VMIG 1 1,800,000 1,800,000
TOTAL MUNICIPAL NOTES
(Cost $8,256,641) 8,261,088
TOTAL INVESTMENTS - 100%
(Cost $473,003,724) $ 498,263,637
FUTURES CONTRACTS
EXPIRATION UNDERLYING FACE UNREALIZED
DATE AMOUNT AT VALUE GAIN/(LOSS)
PURCHASED
27 Treasury Bond Contracts Mar. 1996 $ 3,100,781 $ (173,839)
THE FACE VALUE OF FUTURES PURCHASED AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 0.6%
SECURITY TYPE ABBREVIATIONS
INFL - Inverse Floating Rate Security
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) 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 $370,125.
(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.
(f) Security purchased on a delayed delivery basis (see Note 2 of Notes to
Financial Statements).
(g) Debt obligation initially issued at one coupon which converts to a
higher coupon at a specified date.
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total value
of investment in securities, is as follows (ratings are unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 66.9% AAA, AA, A 79.2%
Baa 7.8% BBB 9.4%
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 4.4%. 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:
General Obligation 25.4
Health Care 12.3
Special Tax 12.0
Electric Revenue 11.8
Water & Sewer 10.9
Others
(individually less than 10%) 27.6
TOTAL 100.0%
INCOME TAX INFORMATION
At February 29, 1996, the aggregate cost of investment securities for
income tax purposes was $473,003,724. Net unrealized appreciation
aggregated $25,259,913, of which $28,279,923 related to appreciated
investment securities and $3,020,010 related to depreciated investment
securities.
At February 29, 1996, the fund had a capital loss carryforward of
approximately $7,043,000 of which $2,270,000 will expire on February 28,
2003 and $4,773,000 will expire on February 29, 2004.
At February 29, 1996, the fund was required to defer $3,576,513 of losses
on futures contracts.
FIDELITY CALIFORNIA MUNICIPAL INCOME FUND
(FORMERLY FIDELITY CALIFORNIA TAX-FREE HIGH YIELD PORTFOLIO)
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
FEBRUARY 29, 1996
1.ASSETS
Investment in securities, at value (cost $473,003,724) - $ 498,263,637
See accompanying schedule
Interest receivable 6,812,146
Receivable for daily variation on futures contracts 3,375
2.TOTAL ASSETS 505,079,158
3.LIABILITIES
Payable for investments purchased $ 2,511,125
Regular delivery
Delayed delivery 3,581,984
Payable for fund shares redeemed 224,040
Distributions payable 529,107
Accrued management fee 166,794
Other payables and accrued expenses 86,900
4.TOTAL LIABILITIES 7,099,950
5.NET ASSETS $ 497,979,208
Net Assets consist of:
Paid in capital $ 483,238,451
Undistributed net interest income 100,772
Accumulated undistributed net realized gain (loss) (10,446,089)
on investments
Net unrealized appreciation (depreciation) 25,086,074
on investments
6.NET ASSETS, for 42,487,695 shares outstanding $ 497,979,208
7.NET ASSET VALUE, offering price and redemption price $11.72
per share ($497,979,208 (divided by) 42,487,695 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED FEBRUARY 29, 1996
8.9.INTEREST INCOME $ 29,470,525
10.EXPENSES
Management fee $ 1,959,028
Transfer agent, accounting and custodian fees 799,248
and expenses
Non-interested trustees' compensation 3,358
Registration fees 21,378
Audit 37,705
Legal 3,877
Miscellaneous 2,292
11.TOTAL EXPENSES 2,826,886
12.NET INTEREST INCOME 26,643,639
13.REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 990,943
Futures contracts (1,243,148) (252,205)
Change in net unrealized appreciation (depreciation) on:
Investment securities 25,074,314
Futures contracts 622,564 25,696,878
14.NET GAIN (LOSS) 25,444,673
15.NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 52,088,312
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR YEAR
ENDED ENDED
FEBRUARY 29, FEBRUARY 28,
1996 1995
16.INCREASE (DECREASE) IN NET ASSETS
Operations $ 26,643,639 $ 30,660,837
Net interest income
Net realized gain (loss) (252,205) (3,391,891)
Change in net unrealized appreciation (depreciation) 25,696,878 (37,131,726)
17.NET INCREASE (DECREASE) IN NET ASSETS RESULTING 52,088,312 (9,862,780)
FROM OPERATIONS
Distributions to shareholders (26,643,639) (30,660,837)
From net interest income
From net realized gain - (6,907,583)
18.TOTAL DISTRIBUTIONS (26,643,639) (37,568,420)
Share transactions 95,232,766 88,981,948
Net proceeds from sales of shares
Reinvestment of distributions 18,770,502 27,201,828
Cost of shares redeemed (118,512,417) (166,997,663)
19. NET INCREASE (DECREASE) IN NET ASSETS RESULTING (4,509,149) (50,813,887)
FROM SHARE TRANSACTIONS
20.TOTAL INCREASE (DECREASE) IN NET ASSETS 20,935,524 (98,245,087)
21.NET ASSETS
Beginning of period 477,043,684 575,288,771
End of period (including undistributed net interest income $ 497,979,208 $ 477,043,684
of $100,772 and $0, respectively)
22.OTHER INFORMATION
Shares
Sold 8,288,904 8,082,007
Issued in reinvestment of distributions 1,634,924 2,459,962
Redeemed (10,325,933) (15,215,484)
Net increase (decrease) (402,105) (4,673,515)
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEAR YEARS ENDED FEBRUARY 28, TEN MONTHS YEAR
ENDED ENDED ENDED
FEBRUARY 29, FEBRUARY 28, APRIL 30,
1996 1995 1994C 1993 1992
SELECTED PER-SHARE
DATA
Net asset value, $ 11.120 $ 12.100 $ 12.430 $ 11.540 $ 11.300
beginning of period
Income from Investment .625 .685 .719 .611 .744
Operations
Net interest income
Net realized and .597 (.830) (.060) .890 .240
unrealized gain (loss)
Total from investment 1.222 (.145) .659 1.501 .984
operations
Less Distributions (.622) (.685) (.719) (.611) (.744)
From net interest
income
From net realized - (.150) (.270) - -
gain
Total distributions (.622) (.835) (.989) (.611) (.744)
Net asset value, end of $ 11.720 $ 11.120 $ 12.100 $ 12.430 $ 11.540
period
TOTAL RETURNB 11.25 (.91) 5.41 13.40% 8.94
% % % %
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 497,979 $ 477,044 $ 575,289 $ 586,791 $ 529,445
(000 omitted)
Ratio of expenses to .58 .56% .57 .60% .59
average net assets % % A %
Ratio of net interest 5.44 6.16% 5.78 6.17% 6.52
income to average net % % A %
assets
Portfolio turnover rate 37 29% 44 32% 23
% % A %
</TABLE>
A ANNUALIZED
B TOTAL RETURNS 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.
FIDELITY CALIFORNIA INSURED MUNICIPAL INCOME FUND
(FORMERLY 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 plus 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 FEBRUARY 29, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
California Insured Municipal Income 10.46% 45.71% 88.08%
Lehman Brothers California Insured 1-26 Ye
ar 11.87% n/a n/a
Municipal Bond Index
California Insured Municipal Funds Averag 10.57% 48.54% n/a
e
CUMULATIVE TOTAL RETURNS show the fund's performance over a set period - in
this case, one year, five years, or since the fund started on September 18,
1986. For example, if you invested $1,000 in a fund that had a 5% return
over the past year, the value of your investment would be $1,050. You can
compare the fund's returns to the performance of the Lehman Brothers
California Insured 1-26 Year Municipal Bond Index, which includes insured
California investment-grade municipal bonds with maturities between one and
26 years. To measure how the fund's performance stacked up against its
peers, you can compare it to the California insured municipal funds
average, which reflects the performance of 26 California insured municipal
funds with similar objectives tracked by Lipper Analytical Services over
the past year. Both benchmarks include reinvested dividends and capital
gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, 1996 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
California Insured Municipal Income 10.46% 7.82% 6.91%
Lehman Brothers California Insured 1-26 Ye
ar 11.87% n/a n/a
Municipal Bond Index
California Insured Municipal Funds Averag 10.57% 8.24% n/a
e
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
CA Insured MunicipaLB Municipal Bond I
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
09/30/95 17951.64 20153.25
10/31/95 18278.28 20446.28
11/30/95 18710.01 20785.48
12/31/95 18931.10 20985.23
01/31/96 19062.00 21143.67
02/29/96 18826.86 21000.95
$10,000 OVER LIFE OF FUND: Let's say you invested $10,000 in Fidelity
California Insured Municipal Income Fund on September 30, 1986, shortly
after the fund started. As the chart shows, by February 29, 1996, the value
of your investment would have grown to $18,827 - a 88.27% increase on your
initial investment. For comparison, look at how the Lehman Brothers
Municipal Bond Index, which reflects the performance of the
investment-grade municipal bond market, did over the same period. With
dividends reinvested, the same $10,000 would have grown to $21,001 - a
110.01% 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
YEAR ENDED
FEBRUARY 29, YEARS ENDED FEBRUARY 28,
1996 1995 1994 1993 1992
Dividend return 5.48% 5.50% 5.35% 6.43% 6.48%
Capital appreciation
return 4.98% -6.80% -0.76% 9.32% 3.91%
Total return 10.46% -1.30% 4.59% 15.75% 10.39%
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 FEBRUARY 29, 1996 PAST PAST 6 PAST 1
MONTH MONTHS YEAR
Dividends per share 4.05(cents) 25.09(cents) 51.63(cents)
Annualized dividend rate 4.86% 4.89% 5.10%
30-day annualized yield 4.62% - -
30-day annualized tax-equivalent yield 8.11% - -
</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 $10.48 over
the past month, $10.30 over the past six months and $10.12 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 1996 federal and state tax bracket but
does not reflect the payment of the federal alternative minimum tax, if
applicable.
FIDELITY CALIFORNIA INSURED MUNICIPAL INCOME FUND
(FORMERLY FIDELITY CALIFORNIA TAX-FREE INSURED PORTFOLIO)
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
In sharp contrast to much of
1994, the municipal bond market
posted strong returns for the 12
months ended February 29,
1996. For the period, the Lehman
Brothers Municipal Bond Index -
a broad measure of the tax-free
market - had a total return of
11.05%. By comparison, the
Lehman Brothers Aggregate
Bond Index - a proxy for
investment-grade taxable bonds
- - had a total return of 12.24%.
Tax-free bonds kicked off 1995
by surging ahead of their taxable
counterparts in the first quarter on
signs of a slowing economy and
tamer inflation expectations. By
spring, however, the muni bond
market began to underperform
U.S. Treasury securities when
various proposals for reforming
the tax-code, some of which
threatened the tax-exempt status
of municipal securities, began to
receive attention in Congress.
This threat of tax reform
dampened enthusiasm in the
municipal bond market, stalling
the rally and helping shorter
maturity bonds to outperform their
longer counterparts throughout
the spring and summer months.
By the fourth quarter of 1995,
historically attractive valuations
brought buyers back to the
market. Additionally, in the weeks
leading up to the end of the
period, the municipal market
responded favorably to
diminishing supply and the
rhetorical beating the "flat tax"
took in the Republican
presidential primaries.
An interview with Jonathan Short, Portfolio Manager of Fidelity California
Insured Municipal Income Fund
Q. HOW HAS THE FUND PERFORMED,
JONATHAN?
A. It generally performed in line with its competitors and its benchmark.
For the 12-month period ended February 29, 1996, the fund had a total
return of 10.46%. For the same period, the California insured municipal
debt funds average returned 10.57%, as tracked by Lipper Analytical
Services. Meanwhile, the Lehman Brothers California Insured 1-26 Year
Municipal Bond Index returned 11.87%.
Q. HOW DID YOU STRUCTURE THE FUND DURING THE YEAR?
A. I emphasized intermediate bonds with maturities between five and 15
years. The yield curve (a graphical representation of the yields bonds of
various maturities pay) steepened in the early part, and then again in the
latter part, of the period. When the yield curve steepened, intermediate
bonds generally performed better than longer-term bonds. Additionally, I
focused on adding non-callable bonds, which can't be redeemed by their
issuers prior to maturity.
Q. THE FUND'S STAKE IN GENERAL OBLIGATION BONDS, OR GOS, HAS RISEN
SUBSTANTIALLY OVER THE PAST SIX MONTHS. WHY DID THIS SECTOR BECOME MORE
ATTRACTIVE RECENTLY?
A. Let me start by explaining what a GO is. GOs are municipal bonds backed
by the full faith and credit (which includes the taxing and further
borrowing power) of the issuing municipality or state. A GO bond is repaid
with general fund revenues, in contrast to revenue bonds which are repaid
by revenues from a specific facility built with borrowed funds, such as a
tunnel or sewer system. Improvements in California's economy have, in turn,
translated into higher revenues for many municipalities and that's why GOs
have become so attractive of late. I focused on buying state GOs since the
improving economy is more likely to have a more immediate effect on state
revenues, including income taxes, than on local revenues such as property
taxes.
Q. TYPICALLY, THE WORD "INSURED" IMPLIES THAT ANY LOSSES WILL BE COVERED BY
AN INSURANCE AGENCY. IS THAT THE CASE WITH INSURED MUNICIPAL BONDS
AS WELL?
A. No, and it's important for shareholders to realize that insured bond
prices, like other bond prices, will rise and fall with interest rate
moves, supply and demand, and other factors. When a municipal bond is
insured, it means that its timely principal and interest payments are
guaranteed by a municipal bond insurer. That insurance, in turn, means that
these bonds carry the highest credit quality, rated Aaa by Moody's
Investors Service. Over the past several years, the amount of municipal
bonds with insurance has increased, and now roughly 40% of new issuance is
insured. From my standpoint, that is a positive development since it means
I have more to choose from when selecting investments for the fund.
Q. HOW DID RECENT CHANGES TO THE FUND'S INVESTMENT POLICY AFFECT YOUR
STRATEGY?
A. The fund is now permitted to invest in any amount of municipal
securities that may be considered taxable under the alternative minimum tax
(AMT). Previously, the fund was limited to 20%. The AMT is an alternative
method for calculating federal income tax liabilities and is generally
limited to individuals in high-income tax brackets. I am now able to focus
on all marketplace opportunities - including areas dominated by AMT
securities, such as student loans and airports. If you are not subject to
the AMT, the recent policy change will in no way affect the tax-exempt
status of your income from the fund. If you are an investor who is subject
to the AMT, or if you are unsure, you should consult your tax advisor for
further information as to how this change may impact your tax situation.
Q. WHAT'S YOUR OUTLOOK?
A. Interest rates are relatively low right now. Given that falling interest
rates were the primary engine driving the bond markets' performance last
year, it may be difficult for municipals to match last year's gains this
year. So in my view, identifying the right securities within the right
sectors will be a key to outperforming the market in 1996.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.
FUND FACTS
GOAL: high current tax-free
income for California
residents
START DATE: September 18,
1986
SIZE: as of February 29,
1996, more than $221 million
MANAGER: Jonathan Short,
since March 1995; manager,
Fidelity California Municipal
Income, Spartan California
Municipal Income, Spartan
California Intermediate
Municipal Income, since
March 1995; Spartan
Arizona Municipal Income
fund, as of October 1, 1995;
joined Fidelity in 1990
(checkmark)
JONATHAN SHORT ON THE
CALIFORNIA ECONOMY:
"In hindsight, it appears that
the California economy hit a
turning point in 1995. Last
year, the state's economy
grew at a faster pace than the
nation as a whole, after
several years of lagging the
country. Job growth was
strong, driven by employment
gains in the entertainment,
technology and global trade
sectors. The state's
employment growth was
nearly three percent in 1995,
versus a national average of
below two percent. The
state's fiscal situation has
improved along with the
economy. For this fiscal year
so far, revenues are coming
in well ahead of budget. For
fiscal year 1996, which ends
June 30, 1996, it is estimated
that revenues will come in at
about $1 billion ahead of
budget. In determining the
risks and rewards available in
the market, I use the Lehman
Brothers California Insured
1-26 Year Municipal Bond
Index as a proxy for the overall
market. I believe this index is
the best available benchmark
for managing the fund."
DISTRIBUTIONS
The Board of Trustees of
Fidelity California Municipal
Trust: Fidelity California
Insured Municipal Income Fund
voted to pay on April 8, 1996,
to shareholders of record at
the opening of business on April
4, 1996, a distribution of $.001
derived from capital gains
realized from sales of portfolio
securities.
FIDELITY CALIFORNIA INSURED MUNICIPAL INCOME FUND
(FORMERLY FIDELITY CALIFORNIA TAX-FREE INSURED PORTFOLIO)
INVESTMENT CHANGES
TOP FIVE SECTORS AS OF FEBRUARY 29, 1996
% OF FUND'S % OF FUND'S INVESTMENT
INVESTMENTS S
IN THESE SECTORS
6 MONTHS AGO
General Obligation 23.9 8.3
Water & Sewer 16.1 12.2
Lease Revenue 15.3 18.5
Special Tax 14.0 22.6
Electric Revenue 11.7 11.7
AVERAGE YEARS TO MATURITY AS OF FEBRUARY 29, 1996
6 MONTHS AGO
Years 16.8 17.3
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 FEBRUARY 29, 1996
6 MONTHS AGO
Years 8.3 8.3
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 FEBRUARY 29, 1996 AS OF AUGUST 31, 1995
Aaa 70.9%
Aa, A 21.3%
Baa 5.1%
Caa 0.6%
Non-rated 0.5%
Short-term investments 1.6%
Aaa 69.3%
Aa, A 21.6%
Baa 4.4%
Caa 0.6%
Non-rated 0.5%
Short-term investments 3.6%
Row: 1, Col: 1, Value: 70.90000000000001
Row: 1, Col: 2, Value: 21.3
Row: 1, Col: 3, Value: 5.1
Row: 1, Col: 4, Value: 1.6
Row: 1, Col: 5, Value: 1.5
Row: 1, Col: 6, Value: 2.6
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
SHOWN AS A PERCENTAGE OF THE FUND'S INVESTMENTS. WHERE MOODY'S RATINGS ARE
NOT AVAILABLE, WE HAVE USED S&P RATINGS.
FIDELITY CALIFORNIA INSURED MUNICIPAL INCOME FUND
(FORMERLY FIDELITY CALIFORNIA TAX-FREE INSURED PORTFOLIO)
INVESTMENTS FEBRUARY 29, 1996
Showing Percentage of Total Value of Investments
MUNICIPAL BONDS - 98.4%
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - 98.4%
Alameda County Ctfs. of Prtn. Rfdg. (Santa Rita
Jail Proj.) 5.375% 6/1/09 (MBIA Insured) Aaa $ 2,500,000 $ 2,562,500
Burbank Redev. Agcy. Tax Allocation Rfdg. (City Ctr.
Proj.) Series A, 5% 12/1/15 (FSA Insured) Aaa 4,000,000 3,690,000
California Dept. of Wtr. Resources Wtr. Sys. Rev.
(Center Valley Proj.) Series J-2, 6.125% 12/1/13 Aa 2,500,000 2,590,625
California Edl. Facs. Auth. Rev.:
(Pooled Facs. Prog.) Series 1987, 7.625%
11/1/12 (MBIA Insured) Aaa 1,000,000 1,070,000
(Stanford Univ.) Series J, 6% 11/1/16 Aaa 2,000,000 2,082,500
California Gen. Oblig.:
Unltd. Tax 6% 9/1/03 A1 1,000,000 1,087,500
6.90% 4/1/05 A1 1,000,000 1,153,750
6.40% 9/1/07 A1 1,000,000 1,131,250
5.25% 10/1/14 A1 1,000,000 971,250
California Health Facs. Fin. Auth. Rev.:
Rfdg. (San Diego Children's Hosp.):
6% 7/1/03 (MBIA Insured) Aaa 1,200,000 1,302,000
6% 7/1/06 (MBIA Insured) Aaa 500,000 543,750
(San Diego Children's Hosp.)
6.80% 7/1/02 (MBIA Insured) Aaa 1,855,000 2,082,238
(San Francisco Children's Hosp.)
Series A, 7.50% 10/1/20 (MBIA Insured) Aaa 1,650,000 1,848,000
California Hsg. Fin. Agcy. Rev. (Home Mtg.):
Series 1983 A, 0% 2/1/15 Aa 8,187,000 1,274,716
Series 1983 B, 0% 8/1/15 Aa 170,000 23,800
Series A, 5.20% 8/1/05 (MBIA Insured) (f) Aaa 1,350,000 1,334,813
California Pub. Cap. Impt. Fing. Auth. Rev. (Pooled
Proj.) Series B, 8.10% 3/1/18
(MBIA Insured) (BIG Insured) Aaa 2,875,000 3,097,813
California Pub. Works Board Lease Rev.:
Rfdg. (Dept. Corrections St. Prisons) Series A, 5%
12/1/19 (AMBAC Insured) Aaa 2,000,000 1,877,500
(Dept. Correction State Prisons, Madera) Series E:
6% 6/1/07 A 1,500,000 1,605,000
5.50% 6/1/15 A 2,000,000 1,957,500
(California University Projs.) Series B,
6.40% 12/1/09 A1 1,700,000 1,884,875
5% 6/1/06 A1 1,000,000 1,006,250
California Statewide Commty. Dev. Corp. Ctfs. of Prtn.
Rfdg. (Cedars - Sinai Hosp.) 5.10% 11/1/07
(MBIA Insured) Aaa 1,985,000 1,989,963
(Childrens Hosp.) 6% 6/1/11 (MBIA Insured) Aaa 1,700,000 1,821,125
(St. Joseph Health Sys.) 5.50%7/1/23 Aa 1,000,000 961,250
(Sisters Charity Leavenworth Sys.):
4.875% 12/1/10 Aa 1,000,000 925,000
5% 12/1/23 Aa 1,000,000 892,500
5.616% 7/1/13 Aaa 2,000,000 1,997,500
Carson Redev. Agcy. Redev. Proj. Area #1 Tax
Allocation 6.375% 10/1/12 Baa1 1,000,000 1,012,500
Castaic Lake Wtr. Agcy. Ctfs. of Prtn. Rfdg.
(Wtr. Sys. Impt. Proj.) Series A:
7% 8/1/12 (MBIA Insured) Aaa 1,000,000 1,177,500
7% 8/1/13 (MBIA Insured) Aaa 1,580,000 1,860,450
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
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 $ 1,825,000
Chino Basin Fing. Auth. Rev. (Muni. Wtr. Dist. Swr.
Sys. Proj.) 7.0% 8/1/06 (AMBAC Insured) Aaa 1,145,000 1,348,238
Contra Costa Trans. Auth. Sales Tax Rev.
Series A, 6% 3/1/03 (FGIC Insured) Aaa 1,000,000 1,087,500
Contra Costa Wtr. Dist. Wtr. Rev. Series G,
5% 10/1/24 (MBIA Insured) Aaa 4,000,000 3,680,000
Desert Hosp. Dist. Rev. Ctfs. of Prtn.
6.392% 7/28/20 (CGIC Insured) Aaa 4,000,000 4,165,000
East Bay Muni. Util. Dist. Wastewtr. Treatment Rev:
Rfdg. 5.75% 6/1/04 (MBIA Insured) Aaa 3,000,000 3,228,750
6% 6/1/03 (FGIC Insured) Aaa 1,300,000 1,417,000
6% 6/1/05 (FGIC Insured) Aaa 1,550,000 1,697,250
6% 6/1/06 (FGIC Insured) Aaa 1,840,000 2,014,800
East Bay Reg. Park Dist.:
Series C, 6.50% 9/1/01 (FGIC Insured) Aaa 660,000 729,300
6.10% 9/1/06 Aa 1,000,000 1,062,500
Elk Grove Unified School Dist. Spl. Tax Rfdg.
(Commty. Facs. Dist. #1) 6.50% 12/1/24,
(AMBAC Insured) Aaa 2,000,000 2,300,000
Eureka Unified School Dist. Ctfs. of Prtn.
(Cap. Appreciation):
Series A, 0% 9/1/27 (FSA Insured) Aaa 660,000 683,100
Series B, 0% 9/1/27 (FSA Insured) Aaa 1,555,000 1,471,419
Fontana Redev. Agcy. Tax Allocation Rfdg. (Jurupa Hills):
Series 1992 A, 7.10% 10/1/23 BBB 1,000,000 1,041,250
Series A, 7% 10/1/14 BBB+ 2,300,000 2,412,125
Foothill - De Anza Commty. College Ctfs. of Prtn.
5.25% 9/1/21, (Connie Lee Insured) AAA 1,175,000 1,098,625
Irvine Ranch Wtr. Dist. Joint Pwr. Agcy. Local Pool Rev.:
7.875% 2/15/23 A+ 3,850,000 4,047,313
8.25% 8/15/23 A+ 3,000,000 3,225,000
Kings River Conservation Dist. Rev. Rfdg.
(Pine Flat Pwr. Rev.) Series D, 6.375% 1/1/12 Aa 1,000,000 1,055,000
Lemon Grove Commty. Dev. Agcy. Tax Allocation
Rev. (Lemon Grove Redev. Proj.) 6.90% 8/1/20 Baa 1,000,000 1,033,750
Local Gov't. Fin. Auth. Rev. (Oakland Central
Dist.) 0% 9/1/09, (MBIA Insured) Aaa 3,565,000 1,742,394
Los Angeles County Ctfs. of Prtn.:
(Disney Parking Proj.)
0% 3/1/15 Baa1 1,000,000 282,500
(Cap. Appreciation) 0% 3/1/10 Baa1 2,000,000 815,000
Los Angeles County Metropolitan Trans. Auth.
Sales Tax Rev. Prop. C, Series A 5.90%
7/1/03 (AMBAC Insured) Aaa 1,750,000 1,894,375
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Los Angeles County Pub. Wks. Fing.
Auth. Lease Rev. (Multiple Cap. Facs. Proj. IV)
4.75% 12/1/13 (MBIA Insured) Aaa $ 2,500,000 $ 2,287,500
Los Angeles Dept. Wtr. & Pwr. Elec. Plant Rev.:
Rfdg. 6.375% 2/1/20 Aa 1,200,000 1,267,500
5.20% 2/15/18 (MBIA Insured) Aaa 1,765,000 1,685,575
Los Angeles Wastewtr. Sys. Rev.:
Rfdg. Series A, 9% 6/1/00 (MBIA Insured) Aaa 500,000 589,375
6% 2/1/04 (FGIC Insured) Aaa 3,000,000 3,281,250
Modesto Ctfs. of Prtn. (Commty. Ctr. Refing. Proj.)
Series A, 5% 11/1/23 (AMBAC Insured) Aaa 2,500,000 2,318,750
Modesto Irrigation Dist. Ctfs. of Prtn. Rfdg. & Cap.
Impts. Series A, 0% 10/1/09 (MBIA Insured) Aaa 2,270,000 1,106,625
Modesto Pub. Pwr. Agcy. San Juan Proj. Rev.
Series D, 6.75% 7/1/20, (MBIA Insured) Aaa 2,500,000 2,912,500
Moreno Valley Unified School Dist. Ctfs. of Prtn. (Land
Acquisition) 0% 9/1/11 (FSA Insured) (d) Aaa 2,350,000 2,018,063
Northern California Pwr. Agcy. Pub. Pwr. Rev.:
Crossover Rfdg. (Geothermal Proj. #3)
Series A, 5.50% 7/1/05 (AMBAC Insured) Aaa 500,000 528,750
Rfdg. (Geothermal Proj.) Series A, 5.80%
7/1/09 (AMBAC Insured) Aaa 1,085,000 1,167,731
Rfdg. (Geothermal Proj. #3-B) 5.50% 7/1/01
(AMBAC Insured) (f) Aaa 1,000,000 1,050,000
7.50% 7/1/23 (AMBAC Insured)
(Pre-Refunded to 7/1/21 @ 100) (c) Aaa 1,300,000 1,641,250
Norwalk Redev. Agcy. Tax Allocation
(Norwalk Redev. Proj. #1) 7.15% 12/1/15 - 1,000,000 1,077,500
Oakland Redev. Agcy. Central Dist. Redev. (Sub. Tax
Allocation) 5.00% 9/1/13 (MBIA Insured) Aaa 2,960,000 2,808,300
Ontario Redev. Fing. Auth. Rev.:
Rfdg. (Ontario Redev. Proj. #1) 6.90% 8/1/10
(MBIA Insured) Aaa 1,215,000 1,421,550
6.65% 8/1/07 (MBIA Insured) Aaa 500,000 575,000
6.75% 8/1/08 (MBIA Insured) Aaa 1,065,000 1,234,069
Orange County Dev. Agcy. Tax Allocation
(Santa Ana Heights Proj.) 6.125% 9/1/23 Caa 1,500,000 1,400,625
Palm Desert Fing. Auth. Tax Allocation
6.3675% 4/1/22 (MBIA Insured) Aaa 3,500,000 3,670,625
Pleasanton Joint Pwrs. Fin. Auth. Reassessment
Series A, 6% 9/2/05 Baa 1,760,000 1,837,000
Rancho Mirage Joint Pwrs. Fing. Auth. Ctfs. of Prtn.
(Eisenhower Mem. Hosp.) 7% 3/1/22 A 1,000,000 1,068,750
Redding Elec. Sys. Rev. Ctfs. of Prtn.
(Cap. Appreciation) Series A:
0% 6/1/05 (FGIC Insured) Aaa 2,000,000 1,277,500
0% 6/1/06 (FGIC Insured) Aaa 1,730,000 1,040,163
0% 6/1/07 (FGIC Insured) Aaa 1,890,000 1,065,488
0% 6/1/08 (FGIC Insured) Aaa 1,300,000 687,375
Redondo Beach Redev. Agcy. Tax Allocation
(South Bay Ctr.) 8.625% 5/1/14 (FGIC Insured) Aaa 1,000,000 1,060,000
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Richmond Redev. Agcy. Tax Allocation Rfdg.
(Harbor Redev. Proj.) 7% 7/1/09
(CGIC Insured) Aaa $ 1,750,000 $ 1,986,250
Riverside County Asset Leasing Corp. Leasehold Rev.
(Riverside County Hosp. Proj.) Series A:
6.375% 6/1/09 A 2,000,000 2,105,000
6.50% 6/1/12 A 5,500,000 5,795,625
Riverside County. Trans. Commission Sales Tax Rev.
Series A:
5.30% 6/1/02 (AMBAC Insured) Aaa 500,000 522,500
5.75% 6/1/09 (AMBAC Insured) Aaa 2,000,000 2,142,500
Riverside Unified School Dist. Ctfs. of Prtn.
(Cap. Appreciation Land Acquisition Proj.)
Series B, 0% 9/1/26 (FSA Insured) (d) Aaa 1,710,000 1,517,625
Sacramento Cogeneration Auth. Rev.:
6% 7/1/03 BBB- 700,000 726,250
6.50% 7/1/07 BBB- 1,000,000 1,055,000
6.50% 7/1/08 BBB- 1,000,000 1,053,750
Sacramento Fing. Auth. Gas Tax Rev.
Series A, 6% 10/1/07 (AMBAC Insured) Aaa 1,290,000 1,414,163
Sacramento Fing. Auth. Lease Rev. Rfdg.
Series A, 5.375% 11/1/14 (AMBAC Insured) Aaa 6,500,000 6,475,625
Sacramento Muni. Util. Dist. Elec. Rev.:
Rfdg. Series G, 6.50%, 9/1/13 Aaa 7,000,000 7,857,500
1.76% 11/15/08 (FGIC Insured) (e) Aaa 3,700,000 3,376,250
6.30% 8/15/18 (FGIC Insured) Aaa 2,000,000 2,110,000
San Diego County Reg. Trans. Commission:
Sales Tax Rev. Second Series A:
6.25% 4/1/03 (FGIC Insured) Aaa 4,000,000 4,415,000
6% 4/1/04 (FGIC Insured) Aaa 1,150,000 1,256,375
5.25% 4/1/02 (FGIC Insured) Aaa 1,000,000 1,041,250
San Fransisco City & County Arpt. Commission
International Arpt. Rev.
6% 5/1/13 (FGIC Insured) Aaa 1,075,000 1,115,313
San Francisco City & County Swr. Rev.:
Rfdg.5.90% 10/1/08 (AMBAC Insured) Aaa 1,000,000 1,061,250
Series B, 0% 10/1/07 (FGIC Insured) Aaa 4,770,000 2,641,388
San Jacinto Unified School Dist. Series B, 0%
9/1/26 (FSA Insured) (d) Aaa 1,585,000 1,563,206
San Joaquin Ctfs. of Prtn.:
Rfdg. (Cap. Facs. Proj.) 5% 11/15/09
(MBIA Insured) Aaa 1,000,000 978,750
(Cap. Facs. Proj.) 5% 11/15/10
(MBIA Insured) Aaa 1,110,000 1,075,313
(Gen. Hosp. Proj.) 6.625% 9/1/20 A 2,500,000 2,534,375
San Jose Ctfs. of Prtn. Rfdg. (Communication
Ctr. Proj.) 6.50% 5/1/10 (MBIA Insured) Aaa 1,500,000 1,636,875
San Jose Redev. Agcy. Tax Alloc. Merged Area
Redev. Proj., 6% 8/1/15 (MBIA Insured) Aaa 3,000,000 3,210,000
Santa Ana Commty. Redev. Agcy. Tax Allocation Rfdg.
(South Main St. Redev.) 5.25% 9/1/13,
(MBIA Insured) Aaa 3,000,000 2,913,750
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) (B) AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
South Orange County Pub. Fin. Auth. Spl. Tax Rev.:
(Foothill Area) Series C, 7.50%
8/15/07 (FGIC Insured) Aaa $ 2,290,000 $ 2,782,350
(Sr. Lien) Series A, 7% 9/1/09 (MBIA Insured) Aaa 2,000,000 2,342,500
Southern California Metropolitan Wtr. Dist. Rev.:
Crossover Rfdg. 5% 3/1/02 Aaa 1,250,000 1,293,750
5.75% 8/12/18 Aa 4,000,000 4,085,000
Sulphur Springs Unified School Dist. Series A,
0% 9/1/08 (MBIA Insured) Aaa 2,000,000 1,045,000
Tahoe-Truckee Joint Union School Dist.
(Cap. Appreciation) Series A, 0% 9/1/10 Aaa 6,625,000 3,055,781
Univ. of California Rev. Rfdg. Series C, 5%
9/1/23 (AMBAC Insured) Aaa 2,750,000 2,499,056
Upland Ctfs. of Prtn. (San Antonio Commty.
Hosp.) 5% 1/1/18 A 1,000,000 865,000
West Covina Ctfs. of Prtn. (Queen of the Valley Hosp.)
6.50% 8/15/24 A 1,000,000 1,023,750
TOTAL MUNICIPAL BONDS
(Cost $210,722,694) 218,824,491
MUNICIPAL NOTES (A) - 1.6%
CALIFORNIA - 1.6%
California Gen. Oblig. RAN
Series C, 5.75% 4/25/96 MIG 1 1,960,000 1,966,625
Contra Costa Trans. Sales Tax Auth. 1993 Tax
Rev. Series A, 3.10% (FGIC Insured), VRDN VMIG 1 500,000 500,000
Los Angeles County Metropolitan Trans. Auth.
(Union Station Gateway Proj.) Series 1995-A,
2.95% (FSA Insured)(Liqudity Facility
Societe Generale) VRDN VMIG 1 700,000 700,000
Orange County Various Sanitation Dist. Ctfs. of Prtn.
(Cap. Impt. Prog.) (Dist. 1-7 & 11) 3.35%,
(FGIC Insured), VRDN VMIG 1 300,000 300,000
TOTAL MUNICIPAL NOTES
(Cost $3,464,183) 3,466,625
TOTAL INVESTMENTS - 100%
(Cost $214,186,877) $ 222,291,116
SECURITY TYPE ABBREVIATIONS
RAN - 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) Debt obligation initially issued in zero coupon form which converts to
coupon form at a specified rate and date.
(e) Debt obligation initially issued at one coupon which converts to a
higher coupon at a specified date.
(f) Security purchased on a delayed delivery basis (see Note 2 of Notes to
Financial Statements).
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total value
of investment in securities, is as follows (ratings are unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 88.1% AAA, AA, A 90.1%
Baa 2.3% BBB 4.4%
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:
General Obligation 23.9
Water & Sewer 16.1
Lease Revenue 15.3
Special Tax 14.0
Electric Revenue 11.7
Others
(individually less than 10%) 19.0
TOTAL 100.0%
INCOME TAX INFORMATION
At February 29, 1996, the aggregate cost of investment securities for
income tax purposes was $214,186,877. Net unrealized appreciation
aggregated $8,104,239, of which $9,250,641 related to appreciated
investment securities and $1,146,402 related to depreciated investment
securities.
At February 29, 1996, the fund had a capital loss carryforward of
approximately $7,535,000 of which $1,011,000 will expire on February 28,
2003 and $6,524,000 will expire on February 29, 2004.
The fund intends to elect to defer to its fiscal year ending February 28,
1997, $32,744 of losses recognized during the period November 1, 1995 to
February 29, 1996.
At February 29, 1996, the fund was required to defer $395,576 of losses on
futures contracts.
FIDELITY CALIFORNIA INSURED MUNICIPAL INCOME FUND
(FORMERLY FIDELITY CALIFORNIA TAX-FREE INSURED PORTFOLIO)
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
FEBRUARY 29, 1996
23.ASSETS
Investment in securities, at value (cost $214,186,877) - $ 222,291,116
See accompanying schedule
Cash 18,836
Interest receivable 2,980,076
24.TOTAL ASSETS 225,290,028
25.LIABILITIES
Payable for investments purchased $ 2,404,725
Delayed delivery
Payable for fund shares redeemed 563,283
Distributions payable 656,819
Accrued management fee 74,883
Other payables and accrued expenses 41,521
26.TOTAL LIABILITIES 3,741,231
27.NET ASSETS $ 221,548,797
Net Assets consist of:
Paid in capital $ 221,388,363
Undistributed net interest income 19,929
Accumulated undistributed net realized gain (loss) on (7,963,734)
investments
Net unrealized appreciation (depreciation) on investments 8,104,239
28.NET ASSETS, for 21,442,140 shares outstanding $ 221,548,797
29.NET ASSET VALUE, offering price and redemption price $10.33
per share ($221,548,797 (divided by) 21,442,140 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED FEBRUARY 29, 1996
30.31.INTEREST INCOME $ 12,810,865
32.EXPENSES
Management fee $ 867,946
Transfer agent, accounting and custodian fees 365,017
and expenses
Non-interested trustees' compensation 1,532
Registration fees 19,793
Audit 38,421
Legal 1,716
Miscellaneous 1,124
33.TOTAL EXPENSES 1,295,549
34.NET INTEREST INCOME 11,515,316
35.REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities (1,133,586)
Futures contracts (1,207,421) (2,341,007)
Change in net unrealized appreciation (depreciation) on:
Investment securities 12,240,714
Futures contracts 782,469 13,023,183
36.NET GAIN (LOSS) 10,682,176
37.NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 22,197,492
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
FEBRUARY 29, FEBRUARY 28,
1996 1995
38.INCREASE (DECREASE) IN NET ASSETS
Operations $ 11,515,316 $ 13,165,699
Net interest income
Net realized gain (loss) (2,341,007) (4,982,204)
Change in net unrealized appreciation (depreciation) 13,023,183 (15,911,365)
39.NET INCREASE (DECREASE) IN NET ASSETS RESULTING 22,197,492 (7,727,870)
FROM OPERATIONS
Distributions to shareholders (11,515,316) (13,165,699)
From net interest income
From net realized gain - (4,232,425)
40.TOTAL DISTRIBUTIONS (11,515,316) (17,398,124)
Share transactions 78,520,810 89,403,793
Net proceeds from sales of shares
Reinvestment of distributions 8,004,086 13,115,054
Cost of shares redeemed (92,564,366) (152,246,558)
41. NET INCREASE (DECREASE) IN NET ASSETS RESULTING (6,039,470) (49,727,711)
FROM SHARE TRANSACTIONS
42.TOTAL INCREASE (DECREASE) IN NET ASSETS 4,642,706 (74,853,705)
43.NET ASSETS
Beginning of period 216,906,091 291,759,796
End of period (including undistributed net interest income $ 221,548,797 $ 216,906,091
of $19,929 and $0, respectively)
44.OTHER INFORMATION
Shares
Sold 7,754,730 9,161,615
Issued in reinvestment of distributions 790,944 1,344,750
Redeemed (9,155,320) (15,615,632)
Net increase (decrease) (609,646) (5,109,267)
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEAR YEARS ENDED FEBRUARY 28, TEN MONTHS YEAR
ENDED ENDED ENDED
FEBRUARY 29, FEBRUARY 28, APRIL 30,
1996 1995 1994 D 1993 1992
SELECTED PER-SHARE
DATA
Net asset value, $ 9.840 $ 10.740 $ 11.030 $ 10.100 $ 9.740
beginning of period
Income from Investment .517 .558 .589 .492 .603
Operations
Net interest income
Net realized and .489 (.730) (.090) .930 .360
unrealized gain (loss)
Total from investment 1.006 (.172) .499 1.422 .963
operations
Less Distributions (.516) (.558) (.589) (.492) (.603)
From net interest
income
From net realized - (.170) (.200) - -
gain
Total distributions (.516) (.728) (.789) (.492) (.603)
Net asset value, end of $ 10.330 $ 9.840 $ 10.740 $ 11.030 $ 10.100
period
TOTAL RETURN B 10.46 (1.30) 4.59% 14.48% 10.14
% % %
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of $ 221,549 $ 216,906 $ 291,760 $ 274,872 $ 177,763
period (000 omitted)
Ratio of expenses to .60 .59% .48% .63% .66
average net assets % C A %
Ratio of net interest 5.31 5.71% 5.31% 5.72% 6.06
income to average net % A %
assets
Portfolio turnover rate 49 32% 60% 27% 19
% A %
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. THE
TOTAL RETURN(S) WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIOD(S) SHOWN.
C FMR AGREED TO REIMBURSE A PORTION OF THE EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD HAVE BEEN HIGHER
D 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.
FIDELITY CALIFORNIA MUNICIPAL MONEY MARKET FUND
(FORMERLY 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, total returns for the
past 10 years would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, 1996 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
California Municipal Money Market 3.21% 14.77% 45.04%
California Tax-Free
Money Market Funds Average 3.25% 14.85% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year, five years or 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
California tax-free money market funds average, which reflects the
performance of 43 California tax-free money market funds with similar
objectives tracked by IBC/Donoghue over the past year.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED FEBRUARY 29, 1996 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
California Municipal Money Market 3.21% 2.79% 3.79%
California Tax-Free
Money Market Funds Average 3.25% 2.80% n/a
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had achieved that return
by performing at a constant rate each year.
YIELDS
2/27/95 5/29/95 8/28/95 11/27/95 2/26/96
California Municipal 3.45% 3.53% 3.08% 3.13% 2.76%
Money Market
California Tax-Free 3.45% 3.50% 3.11% 3.22% 2.76%
Money Market Funds
Average
California Tax-Free 6.06% 6.20% 5.41% 5.50% 4.85%
Money Market Tax-equivalen
t
Row: 1, Col: 1, Value: 3.45
Row: 1, Col: 2, Value: 3.45
Row: 2, Col: 1, Value: 3.53
Row: 2, Col: 2, Value: 3.5
Row: 3, Col: 1, Value: 3.08
Row: 3, Col: 2, Value: 3.11
Row: 4, Col: 1, Value: 3.13
Row: 4, Col: 2, Value: 3.22
Row: 5, Col: 1, Value: 2.76
Row: 5, Col: 2, Value: 2.76
4% -
3% -
2% -
1% -
0%
California
Municipal
Money Market
California
Tax-Free Money
Market Funds Average
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 California tax-free money market funds average. Or you
can look at the fund's tax-equivalent yield, which is based on a combined
effective 1996 federal and state income tax rate of 43.04%. Figures for the
California tax-free money market funds average 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 MUNICIPAL MONEY MARKET FUND
(FORMERLY FIDELITY CALIFORNIA TAX-FREE MONEY MARKET PORTFOLIO)
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Deborah Watson,
Portfolio Manager of Fidelity California
Municipal Money Market Fund
Q. DEBORAH, WHAT KIND OF INVESTMENT CLIMATE HAVE YOU BEEN OPERATING IN FOR
THE PAST YEAR?
A. As late as February 1995, just before the period began, the Federal
Reserve was still in a restrictive mode, raising interest rates to slow
down the pace of economic growth and prevent an outbreak of inflation.
Early in the period, however, it became clear that growth had slowed
dramatically, and further rate increases would be unnecessary. With the
announcement that the economy had expanded at an annual rate of only 2.7%
during the first quarter of 1995, down from more than 5% during the fourth
quarter of 1994, speculation centered on when the Fed would reverse
direction and begin cutting rates. The first one-quarter percentage point
reduction in the rate banks charge each other for overnight loans - known
as the federal funds rate - came in July. Two more quarter-point rate cuts
followed in December and January. Lately, signals have been mixed, with
auto sales surprisingly strong, for example, and housing prices and
consumer spending rather weak. However, after the fourth-quarter growth
rate came in below expectations at less than 1%, most market participants
assumed the Fed would probably continue lowering rates on into the summer
of 1996.
Q. HOW DID YOU POSITION THE FUND TO TAKE ADVANTAGE OF DECLINING RATES?
A. When the period began, the fund's average maturity was a cautious 21
days. That was appropriate as long as interest rates were edging higher and
the supply of new issues was at a seasonal low. Later, as supplies entered
the market and rates began to fall, I extended the fund's average maturity,
reaching 69 days at the end of July. In lengthening the fund, I relied less
on variable rate demand notes, or VRDNs, and more on fixed-rate securities.
During the period, VRDNs as a percentage of the fund's total assets
declined from a high of around 70% to about 60%. Basically, the fund's
average maturity stayed between 60 and 70 days for most of the rest of the
period. The fund ended the period with an average maturity of 52 days.
That's toward the aggressive side of neutral and reflects my view that the
Fed may lower rates again in the near future.
Q. HOW DID THE FUND PERFORM?
A. It slightly lagged its peers. The fund's seven-day yield on February 29,
1996, was 2.76%, compared to 3.44% on February 28, 1995. The latest yield
was the equivalent of a 4.85% taxable yield for California investors in the
43.04% combined state and federal income-tax bracket. The fund's total
return for the full one-year period was 3.21%, compared to 3.25% for the
California tax-free money market funds average, according to IBC/Donoghue.
Q. WHAT'S THE OUTLOOK?
A. As we head toward the summer months and the start of California's annual
borrowing season, I'll probably let the fund's average maturity roll back
down. On the other hand, I believe the Fed has at least one more rate cut
in store for us, so I probably won't let the fund get as short as it did
last summer. Any such rate cuts are likely to be both modest and gradual.
As for the California economy, conditions are no worse and may even have
improved slightly since this time a year ago. Some, though not all,
industries are doing better, and the state's cash position - a measure of
its ability to meet its debt obligations - is healthier than it was during
the depths of the California recession.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.
FUND FACTS
GOAL: high current tax-free
income for California
residents while maintaining a
stable $1 share price
START DATE: July 7, 1984
SIZE: as of February 29,1996,
more than $732 million
MANAGER: Deborah Watson,
since July 1988; manager,
Spartan California Municipal
Money Market Fund, since
1989; Spartan Pennsylvania
Municipal Money Market Fund,
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 MUNICIPAL MONEY MARKET FUND
(FORMERLY FIDELITY CALIFORNIA TAX-FREE MONEY MARKET PORTFOLIO)
INVESTMENT CHANGES
MATURITY DIVERSIFICATION
DAYS % OF FUND ASSETS % OF FUND ASSETS % OF FUND ASSETS
2/29/96 8/31/95 2/28/95
0 - 30 66 75 85
31 - 90 8 6 7
91 - 180 19 2 8
181 - 397 7 17 0
WEIGHTED AVERAGE MATURITY
2/29/96 8/31/95 2/28/95
California Municipal
Money Market 52 days 66 days 21 days
California TaxFree Money M
arket Funds Average* 42 days 52 days 33 days
ASSET ALLOCATION
AS OF FEBRUARY 29, 1996 AS OF AUGUST 31, 1995
Row: 1, Col: 1, Value: 58.0
Row: 1, Col: 2, Value: 13.0
Row: 1, Col: 3, Value: 5.0
Row: 1, Col: 4, Value: 21.0
Row: 1, Col: 5, Value: 3.0
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
Variable rate
demand notes
(VRDNs) 58%
Commercial
paper 13%
Tender bonds 5%
Municipal
notes 21%
Other 3%
Variable rate
demand notes
(VRDNs) 67%
Commercial
paper 11%
Tender bonds 4%
Municipal
notes 18%
Other 0%
* SOURCE: IBC/DONOGHUE'S MONEY FUND REPORT(registered trademark)
FIDELITY CALIFORNIA MUNICIPAL MONEY MARKET FUND
(FORMERLY FIDELITY CALIFORNIA TAX-FREE MONEY MARKET PORTFOLIO)
INVESTMENTS FEBRUARY 29, 1996
Showing Percentage of Total Value of Investments
MUNICIPAL SECURITIES (A) - 100%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CALIFORNIA - 98.4%
Alameda County Ind. Dev. Auth. Ind. Rev., VRDN:
(Jacobs Investment Co. Proj.) Series 1985 A, 3.35%,
LOC Bank of America $ 3,800,000 $ 3,800,000
(Longview Fibre Co.) Series 1988, 3.35%,
LOC ABN-AMRO Bank 1,750,000 1,750,000
Alameda County TRAN 4.75% 7/25/96,
LOC Union Bank of Switzerland 6,000,000 6,017,231
Anaheim Hsg. Auth. Multi-Family Hsg. Rev.
(Parka Vista Apts) Series 1993 A, 3.30%,
LOC Citibank, VRDN (b) 5,500,000 5,500,000
Azusa Multi-Family Hsg. Rev. (Pacific Glen Apt. Proj.)
Series 1994, 3.60%, VRDN 1,400,000 1,400,000
Big Bear Lake Ind. Dev. Board Rev. (Southwest Gas Corp. Proj.)
Series 1993 A, 3.05%, LOC Union Bank of Switzerland,
VRDN (b) 7,000,000 7,000,000
California Dept. of Water Resources Water Sys. Rev. Bond
(Central Valley Proj.) Series O, 8.75% 12/1/96 1,500,000 1,558,178
California Gen. Oblig. RAN Series C, 5.75%
tender 4/25/96 (FGIC Insured) 6,000,000 6,018,383
California Gen. Oblig. Bonds:
Series CR-26I, 3.35%, tender 3/15/96
(Liquidity Facility Citibank) (c) 8,000,000 8,000,000
4% 10/1/96 2,160,000 2,161,798
4.40% 10/1/96 7,500,000 7,521,224
California Gen. Oblig. Participating VRDN, Series 1993 N,
3.40% (Liquidity Facility Citibank)(c)(d) 8,000,000 8,000,000
California Health Facs. Auth. (Enloe Memorial Hosp.) 2.90%,
LOC Bank of America, VRDN 1,500,000 1,500,000
California Health Facs. Auth. Bonds (Sisters of Providence)
Series 1996, 4%, tender 10/1/96 645,000 647,390
California Health Facs. Fin. Auth. Rev. (Catholic Healthcare West)
Series 1995 B,3% (MBIA Insured)(Liquidity Facility Rabobank) 5,400,000
5,400,000
California Hsg. Fin. Agcy. Home. Mtg. Rev. Bonds
Series 1995 E, 3.50% tender 2/1/97 (b) 7,200,000 7,200,000
California Hsg. Fin. Agcy. Participating VRDN (c):
Series CR-156, 3.47% (Liquidity Facility Citibank) (b) 4,475,000
4,475,000
Series PA-58, 3.20% (Liquidity Facility Merrill Lynch) 3,570,000
3,570,000
Series PA-90, 3.35% (Liquidity Facility Merrill Lynch) (b) 2,335,000
2,335,000
Series PT-14, 3.20% (Liquidity Facility Commerzbank) 5,190,000
5,190,000
Series PT-40 A, 3.35% (Liquidity Facility Commerzbank) (b) 6,700,000
6,700,000
Series PA-40 B, 3.35%
(Liquidity Facility Bayerische Hypothenken) (b) 9,260,000 9,260,000
Series PT-40 C, 3.50%
(Liquidity Facility Banque Nationale de Paris) (d) 7,570,000 7,570,000
Series PT-40 D,
3.35% (Liquidity Facility Banque Nat'l. de Paris) (b) 100,000 100,000
Series PT-56, 3.35% (Liquidity Facility Credit Suisse) 1,500,000
1,500,000
Series PA-112, 3.35% (MBIA Insured)
(Liquidity Facility Merrill Lynch & Co.) (b) 2,500,000 2,500,000
Series 1994-1, 3.48% (Liquidity Facility State
Street Bank) (b)(c) 9,498,936 9,498,936
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
California Poll. Cont. Fing. Auth. Resource Recovery Rev., VRDN (b):
(Burney Forest Prod. Proj.):
Series 1989 A, 3.45%, LOC Natl. Westminster Bank $ 500,000 $ 500,000
3.45%, LOC Nat'l. Westminster Bank 200,000 200,000
(Delano Proj.) Series 1991, 3.25% LOC ABN-AMRO 1,200,000 1,200,000
(Malaga Proj.) Series B, 3.30%, LOC Bank of America 900,000 900,000
(Ultra Pwr. Rocklin Proj.) Series 1988 B, 3.30%,
LOC Bank of America, VRDN (b) 1,300,000 1,300,000
California Poll. Cont. Fing. Auth. Rev. Bonds.:
(Chevron USA, Inc. Proj.) Series B, 4.25%, tender 6/15/96 1,360,000
1,362,107
(Pacific Gas & Elec. Co.):
Rfdg. Series 1988 F, 3.20%, tender 3/18/96,
LOC Banque Nationale De Paris 4,000,000 4,000,000
Rfdg. 3.15%, tender 3/14/96,
LOC Banque Nationale De Paris 1,000,000 1,000,000
Series 1988 A (b):
3.70%, tender 3/8/96, LOC Swiss Bank Corp. 1,300,000 1,300,000
3.30% tender 3/13/96, LOC Swiss Bank Corp 6,000,000 6,000,000
3.35%, tender 3/14/96, LOC Swiss Bank Corp 4,000,000 4,000,000
3.35%, tender 3/15/96, LOC Swiss Bank Corp 1,000,000 1,000,000
3.50%, tender 3/19/96, LOC Swiss Bank Corp 5,700,000 5,700,000
3.40%, tender 5/14/96, LOC Swiss Bank Corp 4,000,000 4,000,000
Series 1988 C, 3.50%, tender 3/11/96, LOC Credit Suisse 6,000,000
6,000,000
(Southern California Edison Co.) Series 1985 D, 3.15%,
tender 5/23/96 4,900,000 4,900,000
California Poll. Cont. Fing. Auth. Solid Waste Disp. Rev., VRDN:
(Athens Disp. Co. Proj.) Series 1995, 3.20%,
LOC Wells Fargo Bank of San Francisco (b) 2,000,000 2,000,000
(Colmac Energy Proj.) Series B, 3.05%,
LOC Swiss Bank Corp. (b) 4,000,000 4,000,000
(Gilton Solid Waste Mgmt. Inc. Proj.) Series 1995 A,
3.45%, LOC Bank of America (b) 2,900,000 2,900,000
(Sanifill Inc. Proj.) Series 1995 A, 3.20%,
LOC California Teachers Retirement Sys. (b) 2,000,000 2,000,000
(Western Waste Industries) 3.625%, LOC Citibank 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 7,000,000 7,022,845
California Statewide Commty. Dev. Auth. Apt. Dev. Rev. Rfdg. VRDN:
Series 1995 A-1, 3% (FNMA Guaranteed) 1,000,000 1,000,000
Series 1995 A-2, 3% (FNMA Guaranteed) 3,000,000 3,000,000
Series 1995 A-3, 3% (FNMA Guaranteed) 3,000,000 3,000,000
Series 1995 A-4, 3% (FNMA Guaranteed) 4,000,000 4,000,000
Series 1995 A-5, 3% (FNMA Guaranteed) 17,000,000 17,000,000
Series 1995 A-6, 3% (FNMA Guaranteed) 7,700,000 7,700,000
California Statewide Commty. Dev. Auth. Rev., VRDN:
(AHNN Proj.) 3.15%,
LOC California Teachers Retirement Sys. (b) 260,000 260,000
(Andercraft Prod. Inc.) Series 1989, 3.15%,
LOC California Teachers Retirement Sys. (b) 600,000 600,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
California Statewide Commty. Dev. Auth. Rev., VRDN - continued
(Covenant Retirement Commty.):
Series1995, 3.30%, LOC LaSalle Bank $ 4,000,000 $ 4,000,000
3.30%, LOC Lasalle Nat'l. Bank 10,500,000 10,500,000
(Delancey St. Foundation) 3.30%, LOC Bank of America 2,475,000
2,475,000
(Florestone Prod. Co.) Series 1989, 3.40%,
LOC California Teachers Retirement Sys. (b) 775,000 775,000
(Instrument Specialties Co.) Series 1989, 3.15%,
LOC California Teachers Retirement Sys. (b) 1,100,000 1,100,000
(Kaiser Foundation Hosp.) Series 1995, 2.90% 4,500,000 4,500,000
(Redline Synthetic Oil Corp.) 3.15%,
LOC California Teachers Retirement Sys. (b) 1,125,000 1,125,000
(Setton Prop. Inc. Proj.) Series 1995 E, 3.40%,
LOC Wells Fargo Bank of San Francisco (b) 2,140,000 2,140,000
(Sys. Engineering & Mgmt. Co.) 3.15%,
LOC California Teachers Retirement Sys. (b) 500,000 500,000
(W & H Voortman Inc. Proj.) Series 1990, 3.15%,
LOC California Teachers Retirement Sys. (b) 1,005,000 1,005,000
Carlsbad Multi-Family Hsg. Rev., VRDN:
(La Costa Apt. Proj.) Series 1993 A, 3.05%,
LOC Bank of America 5,000,000 5,000,000
(Seascape Village Proj.) Series A, 3.65% 10,600,000 10,600,000
Chula Vista Ind. Dev. Rev. Bonds (San Diego Gas & Elec.) (b):
Bonds:
Series C:
3.20%, tender 5/10/96 3,000,000 3,000,000
3.30%, tender 5/13/96 1,000,000 1,000,000
Series E, 3.30%, tender 5/15/96 2,500,000 2,500,000
Series B, 3.15%, VRDN 2,000,000 2,000,000
Chula Vista Tax Allocation Rev. Bond (Bayfront Town Center)
7.875% 5/1/96 3,535,000 3,629,496
Conejo Valley Unified School Dist. TRAN
(Ventura County Proj.) 4.75% 7/5/96 3,900,000 3,909,666
Contra Costa County TRAN 4.50% 7/3/96 8,300,000 8,323,795
Contra Costa Transit Auth. Tax Rev. Series 1993 A, 3.10%,
(FGIC Insured), VRDN 5,000,000 5,000,000
Covina Redev. Agcy. Multi-Family Hsg. Rev. (Shadowhills Apt.
Proj.) Series 1994 A, 3.60%, VRDN 500,000 500,000
Duarte Redev. Agcy. Single-Family Mtg. Rev. Participating VRDN,
Series A-1, 3.45% (Liquidity Facility Norwest Bank) (c) 3,100,000
3,100,000
East Bay Muni. Util. Dist. Water Sys. Rev. Series 1988, CP:
3.50% 3/21/96
(Liquidity Facility Westdeutsche Landesbanken Giron) 3,000,000
3,000,000
3.20% 6/7/96
(Liquidity Facility Westdeutsche Landesbanken Giron) 1,500,000
1,500,000
Emeryville Redev. Agcy. Multi-Family Hsg. Rev. (Emery Bay Apts. II)
3.15%, LOC Bank of America, VRDN (b) 3,000,000 3,000,000
Escondido Commty. Dev. Commission Rev. (Escondido
Promeneade Proj.) 3.45%, LOC Bank of America, VRDN (b) 4,000,000
4,000,000
Escondido Multi-Family Hsg. Rev. (Morning View Terrace
Proj.) Series 1985 A, 3%, LOC Bank of America, VRDN 1,000,000 1,000,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Fontana Apt. Dev. Rev. Rfdg. (Citrus Ave. Apt. Proj.)
Series 1992 A, 3%, LOC Bank of America, VRDN $ 1,800,000 $ 1,800,000
Foothills-Eastern Transport Corridor Agcy. Toll Road Rev., VRDN:
Series 1995 D, 2.95%, LOC Morgan Guaranty Trust Co 7,700,000 7,700,000
Series 1995 E, 2.80%, LOC Banque Nat'l. De Paris 3,800,000 3,800,000
Fowler Ind. Dev. Ind. Dev. Rev. (Bee Sweet Citrus Inc. Proj.)
3.45%, LOC Bank of America, VRDN (b) 2,000,000 2,000,000
Garden Grove Hsg. Auth. Multi-Family Hsg. Rev.
(Valley View Sr. Villas Proj.) Series 1990 A, 3.30%,
LOC Wells Fargo Bank of San Francisco, VRDN (b) 1,500,000 1,500,000
Humbolt County TRAN 4.50% 7/5/96 3,500,000 3,505,787
Irvine Ranch Wtr. Dist. Consolidated Rfdg. (Impt. Dist. #103,105,
109) 3.55%, LOC Bank of America, VRDN 400,000 400,000
Kern County Ctfs. of Prtn., VRDN:
Series 1986 A, 2.95%,
LOC Union Bank of Switzerland 3,900,000 3,900,000
Series 1986 B, 2.95%,
LOC Union Bank of Switzerland 3,500,000 3,500,000
Series 1986 C, 2.95%,
LOC Union Bank of Switzerland 1,000,000 1,000,000
Series 1986 D, 2.95%,
LOC Union Bank of Switzerland 1,800,000 1,800,000
Kern County TRAN 4.50% 7/2/95 6,690,000 6,700,768
Lancaster Redev. Agcy. Multi-Family Hsg. Rev. (Westwood Park
Apt.) Series 1985 K, 3%, LOC Bank of America, VRDN 1,200,000 1,200,000
Livermore Ctfs. of Prtn. (Reverse Osmosis Proj.) 3.25%,
LOC Nat'l. Westminster Bank, VRDN 2,000,000 2,000,000
Los Angeles Ctfs. of Prtn. (Baldwin Hills Pub. Parking Facs.)
Series 1984, 3.20%,
LOC Wells Fargo Bank of San Francisco, VRDN 8,700,000 8,700,000
Los Angeles Commty. Redev. Agcy. Ctfs. of Prtn.
(CMC Med. Plaza) 3.30%, LOC Bank of America, VRDN 500,000 500,000
Los Angeles Convention & Exhibit Ctr. Auth. Participating
VRDN, Series PA-1006, 3.20% (MBIA Insured)
(Liquidity Facility Merrill Lynch) (c) 565,000 565,000
Los Angeles County Metropolitan Trans. Auth. Rev.
(Union Station Gateway Proj.) Series 1995 A, 2.95%
(FGIC Insured)(Liquidity Facility Societe Generale) VRDN 3,500,000
3,500,000
Los Angeles County Multi-Family Hsg. Rev., VRDN:
(Meadowridge Apt. Proj.) Series 1994 B, 3.60% 1,400,000 1,400,000
(Raintree Meadows Proj.) Series 1991 D, 3%
LOC Federal Home Loan Bank of San Francisco 3,510,000 3,510,000
Los Angeles County TRAN 4.50% 7/1/96 23,725,000 23,790,783
Los Angeles County Unified School Dist. TRAN 4.50% 7/3/96 8,400,000
8,422,267
Los Angeles Dept. of Wtr. & Pwr. Elec. Plant Short Term
Rev. 3.15% 5/16/96, CP 3,000,000 3,000,000
Los Angeles Dept. of Wtr. & Pwr. Participating VRDN,
Series BTP-51, 3.35% (Liquidity Facility Bankers Trust) (c) 3,600,000
3,600,000
Los Angeles Harbor Dept. Rev. Series B, 3.20% 3/8/96
(Liquidity Facility Union Bank of Switzerland), CP 2,000,000 2,000,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Los Angeles Multi-Family Hsg. Rev.:
(Museum Terrace Apt. Proj.) Series H,
3.10%, LOC Bank of America, VRDN $ 5,800,000 $ 5,800,000
Series 1985 K, 3%, LOC Federal Home Loan Bank of
San Francisco, VRDN 10,600,000 10,600,000
Los Angeles Wastewtr. Sys. CP:
3.10% 4/18/96 2,000,000 2,000,000
3.10% 5/7/96 1,500,000 1,500,000
3.10% 5/10/96 3,100,000 3,100,000
3.15% 5/13/96 3,000,000 3,000,000
3.25% 5/28/96 1,700,000 1,700,000
Modesto Pub. Pwr. Agcy. Rev. (San Juan Proj.)
Series 1995 B, 3.05% (AMBAC Insured)
(Liquidity Facility Bank of Nova Scotia), VRDN 2,700,000 2,700,000
Oakland Rev. (Children's Hosp. Med. Ctr.) Series 1994 B, 3.10%,
LOC Banque Nationale de Paris, VRDN 10,600,000 10,600,000
Oakland TRAN 4.50% 7/31/96 4,000,000 4,009,928
Oakland Unified School Dist. TRAN 4.50% 8/30/96 4,000,000 4,007,838
Oceanside Multi-Family Rev. (Lakeridge Apt. Proj.)
Series 1994, 3.65%, (Continental Casualty Insured), VRDN 6,700,000
6,700,000
Ontario Ind. Dev. Auth. Rev. (Safari Land Proj.)
Series 1989, 3.55%, LOC Bank of America, VRDN (b) 900,000 900,000
Orange County Apt. Dev. Rev., VRDN:
Rfdg. (Harbor Pointe Apts.) Series 1992 D,
3.25%, LOC Citibank 3,000,000 3,000,000
(Niguel Summit II) Series 1985 U-B,
3.20%, LOC Bank of America 2,740,000 2,740,000
(Villa Marguerite Apts.) Series 1993 A, 3.15%,
LOC Wells Fargo Bank of San Francisco 3,000,000 3,000,000
(Vista Verde Apt. Proj.) Series 1988 A, 3.40%,
LOC Wells Fargo Bank of San Francisco (b) 4,200,000 4,200,000
(Wood Canyon Villas) Series 1991 B,
3% LOC Bank of America (b) 1,000,000 1,000,000
Orange County Hsg. Auth. Apt. Dev. Rev. (Costa Mesa Partners)
Series 1985-BB, 3.20%, LOC Chemical Bank, VRDN 10,600,000 10,600,000
Oxnard Redev. Agcy. Ctfs. of Prtn.
(Channel Islands Bus. Ctr. Proj.) 3.525%,
LOC Wells Fargo Bank of San Francisco, VRDN 3,195,000 3,195,000
Palm Springs Commty. Redev. Agcy. Ctfs. of Prtn.
(Headquarters Hotel Proj.) Series 1984 II, 3.05%,
LOC Citibank, VRDN 700,000 700,000
Paso Robles Union School Dist. Ctfs. of Prtn.
(Cap. Proj. Measure D) 4.50% 8/1/96 (FSA Insured) 625,000 627,823
Pittsburg Multi-Family Hsg. Auth. Rev.
(Fountain Plaza Apt.) 3.15% (FNMA Guaranteed), VRDN 7,000,000 7,000,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
Pittsburg Unified School Dist. TRAN
(Contra Costa County) 4.75% 7/5/95 $ 3,000,000 $ 3,008,948
Plumas County TRAN 4% 12/6/96 1,300,000 1,303,839
Redlands Multi-Family Hsg. Rev. (Parkview Terrace Proj.)
3.05%, LOC Bank of America, VRDN 6,900,000 6,900,000
Redondo Beach Multi-Family Hsg. Rev.
(McCandless Senior Hsg. Proj.) Series 1995 A, 3%,
LOC Comerica Bank of Detroit, VRDN 2,140,000 2,140,000
Riverside Hsg. Auth. Multi-Family Hsg. Rev.:
(Victoria Springs Apts.) Series 1989 C, 3.40%,
LOC Bank of America, VRDN (b) 2,500,000 2,500,000
Riverside Hsg. Auth. Multi-Family Hsg. Mtg. Rev.
(Mt. View Apts.) Series 1995 A, 3%,
LOC Federal Home Loan Bank of San Francisco, VRDN 2,000,000 2,000,000
Sacramento County Office of Ed. TRAN 4.25% 12/12/96 3,200,000 3,220,054
Sacramento Hsg. Auth. Multi-Family Hsg. Rev.
(Smoketree Apts.) Series 1990 A, 3.05%,
VRDN (FNMA Guaranteed) 9,000,000 9,000,000
Sacramento Unified School Dist. TRAN 4% 11/29/96 3,600,000 3,609,045
San Bernardino County Mtg. Rev. Rfdg. (Pepperwood Apts.)
Series 1993 A, 3.10%, LOC Federal Home Loan Bank of
San Francisco, VRDN 3,900,000 3,900,000
San Bernardino County Multi-Family Hsg. Rev., VRDN:
(Quail Pointe Apt.) Series 1990 A, 3.05%
(FNMA Guaranteed) 3,500,000 3,500,000
(Western Properties II) 3.10%, LOC Bank America 1,500,000 1,500,000
(Western Properties IV) 3.10%, LOC Bank of America 1,500,000 1,500,000
(Western Properties V) 3.10%, 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 5,510,014
San Diego County Wtr. Auth. Series 1, CP:
3.15% 5/23/96
(Liquidity Facility Bayerische Landesbank Girozent) 2,000,000 2,000,000
3.10% 5/29/96
(Liquidity Facility Bayerische Landesbank Girozent) 2,000,000 2,000,000
3.20% 6/10/96
(Liquidity Facility Bayerische Landesbank Girozent) 5,500,000 5,500,000
San Diego Hsg. Auth. Multi-Family Hsg. Rev., VRDN:
Rfdg. (Coral Pointe Apt. Proj.) Series 1993 A, 3.55%
(Continental Casualty Insured) 3,265,000 3,265,000
(Carmel Del Mar Apr. Proj.) Series 1993-E, 3.15%,
LOC Citibank 3,000,000 3,000,000
(Las Flores Proj.) Series 1991 A, 3.10%,
LOC Swiss Bank Corp. 6,400,000 6,400,000
(Lusk Mira Mesa Apts.) Series 1985 E,
3.05%, LOC Bank of America 3,400,000 3,400,000
(Nobel Court Apts.) Series 1985 L, 3%, LOC Citibank 3,825,000 3,825,000
(University Town Center Apts.) 3.05%, LOC Bank of America 1,500,000
1,500,000
Series 1985 C, 3.05% 1,300,000 1,300,000
San Diego Ind. Dev. Rev. Bonds (San Diego Gas & Elec. Co.)
Series 1995 B, 3.10%, tender 5/24/96 2,300,000 2,300,000
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CALIFORNIA - CONTINUED
San Francisco City & County Multi-Family Hsg. Rev., VRDN:
(Rincon Ctr.) Series 1985 B, 3.25%, LOC Citibank $ 9,075,000 $ 9,075,000
(Winterland Proj.) 3.10%, LOC Citibank 8,400,000 8,400,000
San Francisco City & County Parking Auth. Participating
VRDN, Series 1996 A, 3.35%,
(Liquidity Facility Bank of America) (c) 3,000,000 3,000,000
San Francisco City & County TRAN 4.75% 9/19/96 9,250,000 9,339,106
San Jose Multi-Family Hsg. Rev., VRDN:
(Kimberly Woods) Series 1984, 3%,
LOC Bank of America 3,000,000 3,000,000
(Timberwood Apt. Proj.) Series 1990 A:
3%, LOC Wells Fargo Bank of San Francisco 1,000,000 1,000,000
3%, LOC Wells Fargo Bank of San Francisco 2,000,000 2,000,000
San Luis Coastal School Dist. TRAN 4% 12/6/96 1,800,000 1,805,316
San Luis Obispo TRAN 4.50% 7/19/96 7,600,000 7,616,762
Santa Clara County TRAN 4.50% 8/2/96 8,500,000 8,520,551
Santa Clara Elec. Sys. Rev. Series A, 2.90%,
LOC Nat'l. Westminster Bank, VRDN 1,000,000 1,000,000
Simi Valley Multi-Family Hsg. Rev. (Shadowridge Apts.)
Series 1989, 3.25%, LOC Citibank, VRDN (b) 2,800,000 2,800,000
Southern California Metropolitan Wtr. Auth. Participating VRDN (c):
Series 32 A, (Liquidity Facility Morgan Guaranty Trust Co.) 5,700,000
5,700,000
Series 32 B, (Liquidity Facility Morgan Guaranty Trust Co.) 3,000,000
3,000,000
Southern California Metropolitan Wtr. Dist., CP:
Series A, 3.10% 5/10/96 3,500,000 3,500,000
Series B, 3.15% 3/13/96 6,800,000 6,800,000
Southern California Pub. Pwr. Auth. Participating VRDN
Series SG-35, 3.30% (Liquidity Facility Societe Generale) (c) 7,300,000
7,300,000
Southern California Pub. Pwr. Auth. Rev. (Palo Verde Proj.)
Series A, 8.125% 7/1/96 1,000,000 1,045,616
Southern California Pub. Pwr. Auth. Rev. Bond
Series SG-35, 3.60%, VRDN 4,935,000 5,148,777
Stanislaus County TRAN 4.50% 7/19/96 6,600,000 6,614,557
Stockton Unified School Dist. TRAN Series 1995-96,
4.50% 11/1/96 8,200,000 8,235,899
Ventura County TRAN 4.50% 7/2/96 9,500,000 9,521,514
Vista Ind. Dev. Auth. Rev. (Desalination Sys., Inc.)
Series 1995, 3.50%,
LOC Wells Fargo Bank of San Francisco, VRDN (b) 2,000,000 2,000,000
709,181,241
PUERTO RICO - 1.6%
Puerto Rico Gov't. Dev. Bank, CP:
3% 4/11/96 2,000,000 2,000,000
3.15% 4/19/96 7,300,000 7,300,000
Univ. of Puerto Rico Participating VRDN, Series PA 109,
3% (Liquidity Facility Merrill Lynch & Co.) (c) 2,000,000 2,000,000
11,300,000
TOTAL INVESTMENTS - 100% $ 720,481,241
Total Cost for Income Tax Purposes $ 720,482,042
SECURITY TYPE ABBREVIATIONS
CP - Commercial Paper
RAN - Revenue 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.
(c) Provides evidence of ownership in one or more underlying bonds.
(d) Restricted securities - Investment in securities not registered under
the Securities Act of 1933 (see Note 2 of Notes to Financial Statements).
Additional information on each holding is as follows:
ACQUISITION ACQUISITION
SECURITY DATE COST
California Gen.
Oblig. Participating VRDN,
Series 1993 N, 3.40%
(Liquidity Facility
Citibank) 2/1/96 $ 8,000,000
California Hsg. Fin. Auth.
Participating VRDN,
Series Pt-40 C, 3.50%
(Banque Nat'l.
De Paris) 12/14/95 $ 7,570,000
INCOME TAX INFORMATION
At February 29, 1996, the fund had a capital loss carryforward of
approximately $447,000 which will expire on February 28, 2003.
FIDELITY CALIFORNIA MUNICIPAL MONEY MARKET FUND
(FORMERLY FIDELITY CALIFORNIA TAX-FREE MONEY MARKET PORTFOLIO)
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
FEBRUARY 29, 1996
45.ASSETS
Investment in securities, at value - See accompanying $ 720,481,241
schedule
Cash 1,045,718
Receivable for investments sold 6,202,820
Interest receivable 6,445,790
46.TOTAL ASSETS 734,175,569
47.LIABILITIES
Payable for investments purchased $ 1,200,000
Distributions payable 60,664
Accrued management fee 241,987
Other payables and accrued expenses 149,666
48.TOTAL LIABILITIES 1,652,317
49.NET ASSETS $ 732,523,252
Net Assets consist of:
Paid in capital $ 732,967,611
Accumulated net realized gain (loss) on investments (444,359)
50.NET ASSETS, for 732,991,451 shares outstanding $ 732,523,252
51.NET ASSET VALUE, offering price and redemption price $1.00
per share ($732,523,252 (divided by) 732,991,451 shares)
</TABLE>
STATEMENT OF OPERATIONS
YEAR ENDED FEBRUARY 29, 1996
52.53.INTEREST INCOME $ 27,804,266
54.EXPENSES
Management fee $ 2,925,181
Transfer agent, accounting and custodian fees 1,653,620
and expenses
Non-interested trustees' compensation 4,529
Registration fees 23,203
Audit 29,832
Legal 5,713
Miscellaneous 683
Total Expenses 4,642,761
55.NET INTEREST INCOME 23,161,505
56.REALIZED AND UNREALIZED GAIN (LOSS) 140,195
Net realized gain (loss) on investment securities
Increase (decrease) in net unrealized gain from (10,065)
accretion of market discount
57.NET GAIN (LOSS) 130,130
58.NET INCREASE IN NET ASSETS RESULTING FROM $ 23,291,635
OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
FEBRUARY 29, FEBRUARY 28,
1996 1995
59.INCREASE (DECREASE) IN NET ASSETS
Operations $ 23,161,505 $ 17,225,679
Net interest income
Net realized gain (loss) 140,195 (475,878)
Increase (decrease) in net unrealized gain from (10,065) 8,614
accretion of market discount
60.NET INCREASE (DECREASE) IN NET ASSETS RESULTING 23,291,635 16,758,415
FROM OPERATIONS
Distributions to shareholders from net interest income (23,161,505) (17,225,679)
Share transactions at net asset value of $1.00 per share 2,557,400,271 1,890,883,466
Proceeds from sales of shares
Reinvestment of distributions from net interest income 22,361,567 16,639,355
Cost of shares redeemed (2,522,553,562) (1,843,636,022)
61. NET INCREASE (DECREASE) IN NET ASSETS AND 57,208,276 63,886,799
SHARES RESULTING FROM SHARE TRANSACTIONS
62.TOTAL INCREASE (DECREASE) IN NET ASSETS 57,338,406 63,419,535
63.NET ASSETS
Beginning of period 675,184,846 611,765,311
End of period $ 732,523,252 $ 675,184,846
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEAR YEARS ENDED FEBRUARY 28, TEN MONTHS YEAR
ENDED ENDED ENDED
FEBRUARY 29, FEBRUARY 28, APRIL 30,
1996 1995 1994 1993 1992
SELECTED PER-SHARE
DATA
Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
beginning of period
Income from Investment .032 .026 .020 .019 .035
Operations
Net interest income
Less Distributions (.032) (.026) (.020) (.019) (.035)
From net interest
income
Net asset value, end of $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
period
TOTAL RETURNB 3.21 2.60% 1.97% 1.92% 3.59
% %
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 732,523 $ 675,185 $ 611,765 $ 568,280 $ 556,516
(000 omitted)
Ratio of expenses to .64 .62% .64% .62% .63
average net assets % A %
Ratio of net interest 3.17 2.58% 1.95% 2.29% 3.50
income to average net % A %
assets
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
NOTES TO FINANCIAL STATEMENTS
For the period ended February 29, 1996
1. SIGNIFICANT ACCOUNTING
POLICIES.
On December 14, 1995, the Board of Trustees approved a change in the funds'
names from Fidelity California Tax-Free High Yield Portfolio, Fidelity
California Tax-Free Insured Portfolio and Fidelity California Tax-Free
Money Market Portfolio to Fidelity California Municipal Income Fund,
Fidelity California Insured Municipal Income Fund and Fidelity California
Municipal Money Market Fund, respectively. The fund name changes became
effective February 20, 1996. Fidelity California Municipal Income Fund (the
income fund) and Fidelity California Insured Municipal Income Fund (the
insured fund) are funds of Fidelity California Municipal Trust. Fidelity
California Municipal Money Market Fund (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
financial statements have been prepared in conformity with generally
accepted accounting principles which permit management to make certain
estimates and assumptions at the date of the financial statements. The
following summarizes the significant accounting policies of the income
fund, insured fund, and money market fund:
SECURITY VALUATION.
INCOME 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
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
INTEREST INCOME - CONTINUED
discount represents unrealized gain until realized at the time of a
security disposition or maturity.
EXPENSES. Most expenses of each trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between
the funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Dividends are declared daily and paid
monthly from net interest income. Distributions to shareholders from
realized capital gains on investments, if any, are recorded on the
ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences, which may result in distribution
reclassifications, are primarily due to differing treatments for futures
and options transactions, capital loss carryforwards, market discount and
losses deferred due to wash sales, futures and options, and excise tax
regulations.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Undistributed net interest income and accumulated undistributed net
realized gain (loss) on investments may include temporary book and tax
basis differences that will reverse in a subsequent period. Any taxable
gain remaining at fiscal year end is distributed in the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
DELAYED DELIVERY TRANSACTIONS. Each fund may purchase or sell securities on
a when-issued or forward commitment basis. Payment and delivery may take
place a month or more after the date of the transaction. The price of the
underlying securities and the date when the securities will be delivered
and paid for are fixed at the time the transaction is negotiated. The
market value of the securities purchased or sold on a when-issued or
forward commitment basis are identified as such in the fund's schedule of
investments. Each fund may receive compensation for interest forgone in the
purchase of a delayed delivery security. Losses may arise due to changes in
the market value of the underlying securities or if the counterparty does
not perform under the contract.
FUTURES CONTRACTS AND OPTIONS. The income and insured funds may use futures
and options contracts to manage their exposure to the bond markets and to
fluctuations in interest rates. Buying futures, writing puts, and buying
calls tend to increase the funds' exposure to the underlying instrument.
Selling futures, buying puts, and writing calls tend to decrease the funds'
exposure to the underlying instrument, or hedge other fund investments.
Futures contracts involve, to varying degrees, risk of loss in excess of
the futures variation margin reflected in the Statement of Assets and
2. OPERATING POLICIES -
CONTINUED
FUTURES CONTRACTS AND OPTIONS - CONTINUED
Liabilities. The underlying face amount at value of any open futures
contracts at period end, is shown in the schedule 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.
RESTRICTED SECURITIES. Each fund is permitted to invest in securities that
are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from registration
or to the public if the securities are registered. Disposal of these
securities may involve time-consuming negotiations and expense, and prompt
sale at an acceptable price may be difficult. At the end of the period,
restricted securities (excluding 144A issues) amounted to $15,570,000 or
2.1% of net assets for the money market fund.
3. PURCHASES AND SALES OF
INVESTMENTS.
INCOME FUND. Purchases and sales of securities, other than short-term
securities, aggregated $196,601,745 and $171,743,916, respectively.
The market value of futures contracts opened and closed during the period
amounted to $112,265,490 and $124,942,718, respectively.
INSURED FUND. Purchases and sales of securities, other than short-term
securities, aggregated $108,317,241 and $100,996,732, respectively.
The market value of futures contracts opened and closed during the period
amounted to $67,421,375 and $82,068,875, 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 and is based on the monthly average net assets
of all the mutual funds advised by FMR. The rates ranged from .1100% 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
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
period, the management fees were equivalent to an annual rate of .40% of
average net assets for the income, insured and money market funds.
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. This fee is paid prior to any
voluntary expense reimbursements which may be in effect.
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 $1,735, $1,810
and $86,056 for the income, 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. UMB 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. 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 $576,068 and $210,213 for the income fund, $264,784 and
$92,930 for the insured fund, and $1,486,770 and $128,347 for the money
market fund, respectively.
For the period, the transfer agent fees were equivalent to annual rates of
.12%, .12% and .20% of average net assets for the income, insured and money
market funds, respectively.
Money market fund shareholders participating in the Fidelity Ultra Service
Account(registered trademark) Program (the Program) pay a $5.00 monthly fee
to Fidelity Brokerage Services, Inc. (FBSI), an affiliate of FMR, for
performing services associated with the Program. For the period, fees paid
to FBSI by shareholders participating in the Program amounted to $130,556.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity California Municipal Trust and Fidelity
California Municipal Trust II and the Shareholders
of Fidelity California Municipal Income Fund (formerly Fidelity California
Tax-Free High Yield Portfolio), Fidelity California Insured Municipal
Income Fund (formerly Fidelity California Tax-Free Insured Portfolio), and
Fidelity California Municipal Money Market Fund (formerly Fidelity
California Tax-Free Money Market Portfolio):
In our opinion, the accompanying statements of assets and liabilities,
including the schedules of investments (except for Moody's and Standard &
Poor's ratings), and the related statements of operations and of changes in
net assets and the financial highlights present fairly, in all material
respects, the financial position of Fidelity California Municipal Income
Fund (formerly Fidelity California Tax-Free High Yield Portfolio) and
Fidelity California Insured Municipal Income Fund (formerly Fidelity
California Tax-Free Insured Portfolio)(funds of Fidelity California
Municipal Trust) and Fidelity California Municipal Money Market Fund
(formerly Fidelity California Tax-Free Money Market Portfolio) (a fund of
Fidelity California Municipal Trust II) at February 29, 1996, the results
of each of their operations for the year then ended, the changes in each of
their net assets and the financial highlights for the periods indicated, in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of each portfolio's management; our
responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these financial statements in
accordance with generally accepted auditing standards which require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which
included confirmation of securities at February 29, 1996 by correspondence
with the custodian and brokers and the application of alternative auditing
procedures where confirmations from brokers were not received, provide a
reasonable basis for the opinion expressed above.
/s/PRICE WATERHOUSE LLP
Boston, Massachusetts
April 3, 1996
INVESTMENT ADVISER
(registered trademark)
Fidelity Management & Research
Company
Boston, MA
INVESTMENT 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
