SUPPLEMENT TO THE FIDELITY CALIFORNIA MUNICIPAL FUNDS' APRIL 19, 1996
PROSPECTUS
The following changes are effective April 1, 1997:
With respect to Fidelity California Insured Municipal Income Fund and
Fidelity California Municipal Income Fund, the minimum investments have
been changed to the following:
TO OPEN AN ACCOUNT $10,000
TO ADD TO AN ACCOUNT $1,000
Through regular investment plans $500
MINIMUM BALANCE $5,000
With respect to Fidelity California Insured Municipal Income Fund and
Fidelity California Municipal Income Fund, the minimum check amount has
been increased to $1,000.
References to the minimums throughout the prospectus are changed to the
above minimums with respect to Fidelity California Insured Municipal Income
Fund and Fidelity California Municipal Income Fund.
The following information replaces similar information found in "Expenses"
on page 5:
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you may pay when you
buy, sell or exchange shares of a fund. In addition, you may be charged an
annual account maintenance fee if your balance falls below $2,500. See
"Transaction Details," page 31 for an explanation of how and when these
charges apply.
Maximum sales charge on purchases None
and reinvested distributions
Deferred sales charge on redemptions None
Exchange Fee None
Annual account maintenance fee $12.0
(for accounts under $2,500) 0
ANNUAL FUND OPERATING EXPENSES are paid out of each fund's
assets. Each fund pays a management fee to FMR. It also incurs other
expenses for services such as maintaining shareholder records and
furnishing shareholder statements and financial reports. A fund's expenses
are factored into its share price or dividends and are not charged directly
to shareholder accounts (see page 21).
The following figures are based on historical expenses, adjusted to reflect
current fees, and are calculated as a percentage of average net assets.
CA INSURED
Management fee (after reimbursement) .35%
12b-1 fee None
Other expenses .20%
Total fund operating expenses .55%
(after reimbursement)
CA INCOME
Management fee .37%
12b-1 fee None
Other expenses .18%
Total fund operating expenses .55%
(after reimbursement)
EXAMPLES: Let's say, hypothetically, that each fund's annual
return is 5% and that its operating expenses are exactly as just described.
For every $1,000 you invested, here's how much you would pay in total
expenses after the number of years indicated.
CA INSURED
After 1 year $ 6
After 3 years $ 18
After 5 years $ 31
After 10 years $ 69
CA INCOME
After 1 year $ 6
After 3 years $ 18
After 5 years $ 31
After 10 years $ 69
These examples illustrate the effect of expenses, but are not meant to
suggest actual or expected costs or returns, all of which may vary.
Effective April 1, 1997, FMR voluntarily agreed to implement an expense cap
for Fidelity California Insured Municipal Income Fund and Fidelity
California Municipal Income Fund. FMR will reimburse each fund to the
extent that total operating expenses exceed .55%. If these agreements were
not in effect, the management fee and total operating expenses would be
.40% and .60%, respectively, for Fidelity California Insured Municipal
Income and .40% and .58%, respectively, for Fidelity California Municipal
Income.
PROPOSED REORGANIZATION. The Board of Trustees of Fidelity California
Insured Municipal Income Fund has unanimously approved an Agreement and
Plan of Reorganization ("Agreement") between Fidelity California Insured
Municipal Income Fund and Fidelity California Municipal Income Fund, a fund
of Fidelity California Municipal Trust.
The Agreement provides for transfer of substantially all of the assets and
the assumption of all of the liabilities of Fidelity California Insured
Municipal Income Fund solely in exchange for the number of shares of
Fidelity California Municipal Income Fund equal in value to the relative
net asset value of the outstanding shares of Fidelity California Insured
Municipal Income Fund. Following such exchange, Fidelity California Insured
Municipal Income Fund will distribute the Fidelity California Municipal
Income Fund shares to its shareholders pro rata, in liquidation of Fidelity
California Insured Municipal Income Fund as provided in the Agreement (the
transactions contemplated by the Agreement referred to as the
"Reorganization").
The Reorganization can be consummated only if, among other things, it is
approved by a majority vote of shareholders. A Special Meeting (the
"Meeting") of the Shareholders of Fidelity California Insured Municipal
Income Fund will be held on August 4, 1997, and approval of the Agreement
will be voted on at that time. In connection with the Meeting, Fidelity
California Insured Municipal Income Fund will be filing with the Securities
and Exchange Commission and delivering to its shareholders of record a
Proxy Statement describing the Reorganization and a Prospectus for Fidelity
California Municipal Income Fund.
If the Agreement is approved at the Meeting and certain conditions required
by the Agreement are satisfied, the Reorganization is expected to become
effective on or about August 28, 1997. If shareholder approval of the
Agreement is delayed due to failure to meet a quorum or otherwise, the
Reorganization will become effective, if approved, as soon as practicable
thereafter.
In the event Fidelity California Insured Municipal Income Fund shareholders
fail to approve the Agreement, Fidelity California Insured Municipal Income
Fund will continue to engage in business as a registered investment company
and the Board of Trustees will consider other proposals for the
reorganization or liquidation of Fidelity California Insured Municipal
Income Fund.
Effective the close of business on February 28, 1997, the fund was closed
to new accounts pending the Reorganization. Only shareholders of the fund
on or prior to that date, including participants in an employee benefit
plan which offered the fund on or prior to that date (except participants
in an employee benefit plan for which an affiliate of FMR maintains the
accounts at the participant level other than pursuant to a recordkeeping
agreement), can continue to purchase shares of the fund.
The following information replaces similar information found in the seventh
paragraph of "Investment Principles and Risks" beginning on page 13.
CALIFORNIA MUNICIPAL INCOME seeks high current income that is free from
federal income tax and California personal income tax by investing in
investment-grade municipal securities under normal conditions. FMR normally
invests so that at least 80% of the fund's income distributions are free
from federal and California personal income tax.
The following information replaces similar information found in "Securities
and Investment Practices" beginning on page 15.
DEBT SECURITIES. Bonds and other debt instruments are used by issuers to
borrow money from investors. The issuer pays the investor a fixed or
variable rate of interest, and must repay the amount borrowed at maturity.
Some debt securities, such as zero coupon bonds, do not pay current
interest, but are purchased at a discount from their face values. In
general, bond prices rise when interest rates fall, and vice versa. Debt
securities have varying degrees of quality and varying levels of
sensitivity to changes in interest rates. Longer-term bonds are generally
more sensitive to interest rate changes than short-term bonds.
Investment-grade debt securities are medium- and high-quality securities.
Some, however, may possess speculative characteristics, and may be more
sensitive to economic changes and to changes in the financial condition of
issuers.
RESTRICTIONS: California Insured invests only in investment-grade
securities. A security is considered to be investment-grade if it is judged
by FMR to be of equivalent quality to securities rated Baa or BBB or higher
by Moody's Investors Service or Standard & Poor's, respectively. California
Income normally invests in investment-grade securities, but reserves the
right to invest up to 5% of its assets in below investment-grade securities
(sometimes called "municipal junk bonds"). A security is considered to be
investment-grade if it is rated investment-grade by Moody's Investors
Service (Moody's), Standard & Poor's (S&P), Duff & Phelps Credit Rating
Co., or Fitch Investors Service, L.P., or is unrated but judged by FMR to
be of equivalent quality. The fund may not invest in securities judged by
FMR to be of equivalent quality to those rated lower than B by Moody's or
S&P.
The following information supplements the information found in "Securities
and Investment Practices" beginning on page 15.
CASH MANAGEMENT. A fund may invest in money market securities and in a
money market fund available only to funds and accounts managed by FMR or
its affiliates, whose goal is to seek a high level of current income exempt
from federal income tax while maintaining a stable $1.00 share price. A
major change in interest rates or a default on the money market fund's
investments could cause its share price to change.
RESTRICTION: The bond funds do not currently intend to invest in a money
market fund.
The following information replaces similar information found in "How to Buy
Shares" on page 24.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $2,500
For California Money Market $5,000
TO ADD TO AN ACCOUNT $250
Through regular investment plans* $100
MINIMUM BALANCE $2,000
*FOR MORE INFORMATION ABOUT REGULAR INVESTMENT PLANS, PLEASE REFER TO
INVESTOR SERVICES, PAGE 29.
These minimums may vary for investments through Fidelity Portfolio Advisory
Services. Refer to the program materials for details.
The following information replaces similar information found in "How to
Sell Shares" on page 26.
IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR SHARES, leave at least $2,000
worth of shares in the account to keep it open.
The following information replaces similar information found in
"Transaction Details" beginning on page 31.
FIDELITY RESERVES THE RIGHT TO DEDUCT AN ANNUAL MAINTENANCE FEE of $12.00
from accounts with a value of less than $2,500, subject to an annual
maximum charge of $24.00 per shareholder. It is expected that accounts will
be valued on the second Friday in November of each year. Accounts opened
after September 30 will not be subject to the fee for that year. The fee,
which is payable to the transfer agent, is designed to offset in part the
relatively higher costs of servicing smaller accounts. This fee will not be
deducted from Fidelity brokerage accounts, retirement accounts (except
non-prototype retirement accounts), accounts using regular investment
plans, or if total assets in Fidelity exceed $30,000. Eligibility for the
$30,000 waiver is determined by aggregating Fidelity accounts maintained by
FSC or FBSI which are registered under the same social security number or
which list the same social security number for the custodian of a Uniform
Gifts/Transfers to Minors Act account.
IF YOUR ACCOUNT BALANCE FALLS BELOW $2,000, you will be given 30 days'
notice to reestablish the minimum balance. If you do not increase your
balance, Fidelity reserves the right to close your account and send the
proceeds to you. Your shares will be redeemed at the NAV on the day your
account is closed.
SUPPLEMENT TO THE SPARTAN(registered trademark) CALIFORNIA MUNICIPAL FUNDS'
APRIL 19, 1996 PROSPECTUS
The follo wing changes are effective April 1, 1997:
With respect to Spartan California Intermediate Municipal Income Fund and
Spartan California Municipal Income Fund, the following fees for individual
transactions have been eliminated: the $5.00 exchange fee, the $5.00 wire
fee, the $5.00 account closeout fee, and the $2.00 checkwriting fee.
References to these fees throughout the prospectus are no longer in effect
with respect to these funds.
The following information replaces similar information found in "Expenses"
on page 5:
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you may pay when you
buy, sell or exchange shares of a fund. In addition, you may be charged an
annual account maintenance fee if your balance falls below $2,500. See
"Transaction Details," page 31, for an explanation of how and when these
charges apply.
Maximum sales charge on purchases None
and reinvested distributions
Deferred sales charge on redemptions None
Redemption fee (as a % of amount redeemed on shares held less None
than 180 days) None
for Spartan CA Money Market .50%
for Spartan CA Intermediate
for Spartan CA Income
Exchange and wire transaction fees $5.00
(for Spartan CA Money Market only)
Checkwriting fee, per check written $2.00
(available for Spartan CA Money Market
and Spartan CA Intermediate)
Account closeout fee (for Spartan CA Money Market only) $5.00
Annual account maintenance fee $12.0
(for accounts under $2,500) 0
THESE FEES ARE WAIVED (except for the redemption fee) if your
account balance at the time of the transaction is $50,000 or more.
EXAMPLES: Let's say, hypothetically, that each fund's annual return
is 5% and that its operating expenses are exactly as just described. For
every $1,000 you invested, here's how much you would pay in total expenses
after the number of years indicated.
CA INSURED
After 1 year $ 6
After 3 years $ 18
After 5 years $ 31
After 10 years $ 69
SPARTAN CA INCOME
After 1 year $ 6
After 3 years $ 18
After 5 years $ 31
After 10 years $ 69
These examples illustrate the effect of expenses, but are not meant to
suggest actual or expected costs or returns, all o f which may vary.
PROPOSED REORGANIZATIONS. The Board of Trustees of Spartan California
Intermediate Municipal Income Fund and Spartan California Municipal Income
Fund has unanimously approved Agreements and Plans of Reorganization
("Agreements") between Spartan California Intermediate Municipal Income
Fund and Fidelity California Municipal Income Fund, a fund of Fidelity
California Municipal Trust and between Spartan California Municipal Income
Fund and Fidelity California Municipal Income Fund.
The Agreements provide for transfer of substantially all of the assets and
the assumption of all of the liabilities of Spartan California Intermediate
Municipal Income Fund and Spartan California Municipal Income Fund solely
in exchange for the number of shares of Fidelity California Municipal
Income Fund equal in value to the relative net asset value of the
outstanding shares of Spartan California Intermediate Municipal Income Fund
or Spartan California Municipal Income Fund. Following such exchange,
Spartan California Intermediate Municipal Income Fund and Spartan
California Municipal Income Fund will distribute the Fidelity California
Municipal Income Fund shares to their shareholders pro rata, in liquidation
of Spartan California Intermediate Municipal Income Fund and Spartan
California Municipal Income Fund as provided in the Agreements (the
transactions contemplated by the Agreements referred to as the
"Reorganizations").
The Reorganizations can be consummated only if, among other things, they
are approved by a majority vote of shareholders. A Special Meeting (the
"Meeting") of the Shareholders of Spartan California Intermediate Municipal
Income Fund and Spartan California Municipal Income Fund will be held on
August 4, 1997, and approval of the Agreements will be voted on at that
time. In connection with the Meeting, Spartan California Intermediate
Municipal Income Fund and Spartan California Municipal Income Fund will be
filing with the Securities and Exchange Commission and delivering to their
shareholders of record a Proxy Statement describing the Reorganizations and
a Prospectus for Fidelity California Municipal Income Fund.
If the Agreements are approved at the Meeting and certain conditions
required by the Agreements are satisfied, the Reorganizations are expected
to become effective on or about August 14, 1997 for Spartan California
Municipal Income Fund and on or about August 21, 1997 for Spartan
California Intermediate Municipal Income Fund. If shareholder approval of
any Agreement is delayed due to failure to meet a quorum or otherwise, that
Reorganization will become effective, if approved, as soon as practicable
thereafter.
In the event either Spartan California Intermediate Municipal Income Fund
or Spartan California Municipal Income Fund shareholders fail to approve
that fund's Agreement, that fund will continue to engage in business as a
registered investment company and the Board of Trustees will consider other
proposals for the reorganization or liquidation of that fund.
Effective the close of business on February 28, 1997, the funds were closed
to new accounts pending the Reorganizations. Only shareholders of the funds
on or prior to that date, including participants in an employee benefit
plan which offered the funds on or prior to that date (except participants
in an employee benefit plan for which an affiliate of FMR maintains the
accounts at the participant level other than pursuant to a recordkeeping
agreement), can continue to purchase shares of the funds.
The following information replaces similar information found in "Key Facts"
on page 4.
CA INSURED
STRATEGY: Invests normally in investment-grade municipal securities whose
interest is free from federal income tax and California personal income
tax, while maintaining an average maturity of between three and 10 years.
SPARTAN CA INCOME
STRATEGY: Invests normally in investment-grade municipal securities whose
interest is free from federal income tax and California personal income
tax.
The following information replaces similar information found in the third
paragraph of "Investment Principles and Risks" on page 14.
SPARTAN CALIFORNIA INTERMEDIATE MUNICIPAL INCOME seeks high current income
that is free from federal income tax and California personal income tax by
investing in investment-grade municipal securities under normal conditions.
FMR normally invests at least 65% of the fund's total assets in state
tax-free securities, and normally invests at least 80% of the fund's assets
in municipal securities whose interest is free from federal income tax.
SPARTAN CALIFORNIA MUNICIPAL INCOME seeks high current income that is free
from federal income tax and California personal income tax by investing in
investment-grade municipal securities under normal conditions. FMR normally
invests so that at least 80% of the fund's income distributions are free
from federal and California personal income tax.
The following information replaces similar information found in "Securities
and Investment Practices" beginning on page 16.
DEBT SECURITIES. Bonds and other debt instruments are used by issuers to
borrow money from investors. The issuer pays the investor a fixed or
variable rate of interest, and must repay the amount borrowed at maturity.
Some debt securities, such as zero coupon bonds, do not pay current
interest, but are purchased at a discount from their face values. In
general, bond prices rise when interest rates fall, and vice versa. Debt
securities have varying degrees of quality and varying levels of
sensitivity to changes in interest rates. Longer-term bonds are generally
more sensitive to interest rate changes than short-term bonds.
Investment-grade debt securities are medium- and high-quality securities.
Some, however, may possess speculative characteristics, and may be more
sensitive to economic changes and to changes in the financial condition of
the issuers.
RESTRICTIONS: For Spartan California Intermediate and Spartan California
Income, each fund normally invests in investment-grade securities, but
reserves the right to invest up to 5% of its assets in below
investment-grade securities (sometimes called "municipal junk bonds"). A
security is considered to be investment-grade if it is rated
investment-grade by Moody's Investors Service, Standard & Poor's, Duff &
Phelps Credit Rating Co., or Fitch Investors Service, L.P., or is unrated
but judged by FMR to be of equivalent quality.
The following information supplements information found in "Securities and
Investment Practices" beginning on page 16.
CASH MANAGEMENT. A fund may invest in money market securities and in a
money market fund available only to funds and accounts managed by FMR or
its affiliates, whose goal is to seek a high level of current income exempt
from federal income tax while maintaining a stable $1.00 share price. A
major change in interest rates or a default on the money market fund's
investments could cause its share price to change.
RESTRICTION: The bond funds do not currently intend to invest in a money
market fund.
The following information replaces similar information found in
"Transaction Details" beginning on page 31.
FIDELITY RESERVES THE RIGHT TO DEDUCT AN ANNUAL MAINTENANCE FEE of $12.00
from accounts with a value of less than $2,500, subject to an annual
maximum charge of $24.00 per shareholder. It is expected that accounts will
be valued on the second Friday in November of each year. Accounts opened
after September 30 will not be subject to the fee for that year. The fee,
which is payable to the transfer agent, is designed to offset in part the
relatively higher costs of servicing smaller accounts. This fee will not be
deducted from Fidelity brokerage accounts, retirement accounts (except
non-prototype retirement accounts), accounts using regular investment
plans, or if total assets in Fidelity exceed $50,000. Eligibility for the
$50,000 waiver is determined by aggregating Fidelity accounts maintained by
FSC or FBSI which are registered under the same social security number or
which list the same social security number for the custodian of a Uniform
Gifts/Transfers to Minors Act account.
