SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT (No. 2-83672)
UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 49 [X]
and
REGISTRATION STATEMENT (No. 811-3737)
UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 49 [ ]
Fidelity Advisor Series IV
(Exact Name of Registrant as Specified in Charter)
82 Devonshire St., Boston, Massachusetts 02109
(Address Of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number: 617-570-7000
Arthur S. Loring, Secretary
82 Devonshire Street
Boston, Massachusetts 02109
(Name and Address of Agent for Service)
It is proposed that this filing will become effective
( ) immediately upon filing pursuant to paragraph (b)
(x) on (January 19, 1996) pursuant to paragraph (b)
( ) 60 days after filing pursuant to paragraph (a)(i)
( ) on ( ) pursuant to paragraph (a)(i)
( ) 75 days after filing pursuant to paragraph (a)(ii)
( ) on ( ) pursuant to paragraph (a)(ii) of rule 485.
If appropriate, check the following box:
( ) this post-effective amendment designates a new effective date for a
previously filed
post-effective amendment.
Registrant has filed a declaration pursuant to Rule 24f-2 under the
Investment Company Act of 1940 and intends to file the Notice required by
such Rule on or before January 19, 1996.
FIDELITY ADVISOR SERIES IV
FIDELITY INSTITUTIONAL SHORT-INTERMEDIATE GOVERNMENT PORTFOLIO
CROSS-REFERENCE SHEET
Form N-1A Item Number
Part A Prospectus Caption
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1 a,b Cover Page
2 a Expenses
b,c Contents; Who May Want to Invest
3 a,b *
c, d Performance
4 a(i) Charter
a(ii) Investment Principles and Risks; Fundamental Investment Policies
and Restrictions
b Securities and Investment Practices
c Who May Want to Invest; Investment Principles and Risks;
Securities and Investment Practices; Fundamental Investment
Policies and Restrictions
5 a Charter
b(i) Cover Page; Charter; FMR and Its Affiliates
b(ii) Charter; FMR and Its Affiliates; Breakdown of Expenses
b(iii) Expenses; Breakdown of Expenses; Management Fee
c,d Cover Page; Charter; FMR and Its Affiliates; Breakdown and
Expenses
e FMR and Its Affiliates; Other Expenses
f Expenses
g Expenses; FMR and Its Affiliates
5A Performance
6 a(i) Charter
a(ii) How to Buy Shares; How to Sell Shares; Investor Services;
Transaction Details; Exchange Restrictions
a(iii) Transaction Details
b FMR and Its Affiliates
c Transaction Details; Exchange Restrictions
d **
e Cover Page; Types of Accounts; How to Buy Shares; How to Sell
Shares; Investor Services; Exchange Restrictions
f,g Dividends, Capital Gains, and Taxes
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Form N-1A Item Number
Part A Prospectus Caption
7 a Cover Page; Charter
b,c How to Buy Shares; Transaction Details
d How to Buy Shares
e Expenses
f Breakdown of Expenses
8 How to Sell Shares; Transaction Details; Exchange Restrictions
9 **
* To be filed by subsequent amendment
** Not applicable
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how the fund
invests and the services available to shareholders.
To learn more about the fund and its investments, you can obtain a copy of
the fund's most recent financial report and portfolio listing or a copy of
the Statement of Additional Information (SAI) dated January 19, 1996. The
SAI has been filed with the Securities and Exchange Commission (SEC) and is
incorporated herein by reference (legally forms a part of the
prospectus). For a free copy of either document, call Fidelity Client
Services at the appropriate number listed below or contact your investment
professional.
INDIVIDUAL ACCOUNTS (PARTICIPANT)
If you are investing through a retirement plan sponsor or other
institution, refer to your plan materials or contact that
institution directly.
RETIREMENT PLAN LEVEL ACCOUNTS
(TRUSTEES, PLAN SPONSORS)
Corporate Clients 1-800- 962-1375
"Not for Profit" Clients 1-800- 343-0860
FINANCIAL AND OTHER INSTITUTIONS
Nationwide 1- 800-843-3001
MUTUAL FUND SHARES ARE NOT DEPOSITS OR
OBLIGATIONS OF, OR GUARANTEED BY, ANY
DEPOSITORY INSTITUTION. SHARES ARE NOT
INSURED BY THE FDIC, THE FEDERAL RESERVE
BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT
TO INVESTMENT RISK, INCLUDING THE POSSIBLE
LOSS OF PRINCIPAL.
LIKE ALL MUTUAL FUNDS, THESE
SECURITIES HAVE NOT BEEN APPROVED
OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
ISIG-pro-196
A fund of Fidelity Advisor Series IV
FIDELITY
INSTITUTIONAL
SHORT-INTERMEDIATE
GOVERNMENT PORTFOLIO
The fund seeks a high level of current
income in a manner consistent with
preserving principal.
PROSPECTUS
DATED JANUARY 19, 1996(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON,
MA 02109
AND
ANNUAL REPORT
FOR THE PERIOD ENDING
NOVEMBER 30, 1995
(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA 02109
CONTENTS
PROSPECTUS
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KEY FACTS P- WHO MAY WANT TO INVEST
P- EXPENSES The fund's yearly operating expenses.
P- FINANCIAL HIGHLIGHTS A summary of the fund's
financial data.
P- PERFORMANCE How the fund has done over time.
THE FUND IN DETAIL P- CHARTER How the fund is organized.
P-6 INVESTMENT PRINCIPLES AND RISKS The fund's overall
approach to investing.
P- BREAKDOWN OF EXPENSES How operating costs are
calculated and what they include.
YOUR ACCOUNT P- TYPES OF ACCOUNTS Different ways to set up your
account, including tax-sheltered retirement accounts.
P- HOW TO BUY SHARES Opening an account and making
additional investments.
P- HOW TO SELL SHARES Taking money out and closing
your account.
P- INVESTOR SERVICES Services to help you manage
your account.
SHAREHOLDER AND ACCOUNT POLICIES P- DIVIDENDS, CAPITAL GAINS, AND TAXES
P- TRANSACTION DETAILS Share price calculations and the
timing of purchases and redemptions.
P- EXCHANGE RESTRICTIONS
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ANNUAL REPORT
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PERFORMANCE A-1 How the fund has done over time.
FUND TALK A-2 The manager's review of fund performance, strategy
and outlook.
INVESTMENTS A-3 A complete list of the fund's investments with their
market values.
FINANCIAL STATEMENTS A-4 Statement of assets and liabilities, operations, and
changes in net assets .
NOTES A-5 Notes to the financial statements.
REPORT OF INDEPENDENT ACCOUNTANTS A-6 The auditor's opinion.
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KEY FACTS
WHO MAY WANT TO INVEST
The fund offers banks, corporations and other institutional investors a
convenient and economical way to invest in a professionally managed
portfolio.
The fund is designed for conservative bond investors who seek high
current income from a portfolio of U.S. Government securities in a manner
consistent with preserving principal. The fund's level of risk and
potential reward depend on the quality and maturity of its investments.
The value of the fund's investments and the income they generate vary from
day to day, and generally reflect changes in interest rates, market
conditions, and other political and economic news. The fund's
investments are also subject to prepayments, which can lower the fund's
yield, particularly in periods of declining interest rates.
The fund is not in itself a balanced investment plan. You should consider
your investment objective and tolerance for risk when making an investment
decision. When you sell your fund shares, they may be worth more or
less than what you paid for them.
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you pay when you buy or sell
shares of the fund.
Maximum sales charge on purchases and None
reinvested distributions
Maximum deferred sales charge None
Redemption fee None
Exchange fee None
ANNUAL OPERATING EXPENSES are paid out of the fund's assets. The fund pays
a management fee to Fidelity Management & Research Company (FMR). FMR is
responsible for the payment of all other fund expenses with certain limited
exceptions.
T he fund's expenses are factored into its share price or dividends
and are not charged directly to shareholder accounts (see "Breakdown of
Expenses" on page P- ).
The following are projections based on historical expenses of the fund, and
are calculated as a percentage of average net assets of the
fund .
Management fee 0.45
%
12b-1 fee (Distribution Fee) None
Other expenses 0.00
%
Total operating expenses 0.45
%
EXPENSE TABLE EXAMPLE: You would pay the following expenses on a
$1,000 investment , assuming a 5% annual return and full redemption
at the end of each time period:
1 3 5 10
Year Years Years Years
$ $ $ $
THESE EXAMPLES ILLUSTRATE THE EFFECT OF EXPENSES, BUT ARE NOT MEANT TO
SUGGEST ACTUAL OR EXPECTED COSTS OR RETURNS, ALL OF WHICH MAY VARY.
FINANCIAL HIGHLIGHTS
The financial highlights table that follows and the fund's financial
statements are included in the fund's Annual Report and have been audited
by __ _ _____________, independent accountants. Their report on the
financial statements and financial highlights is included in the Annual
Report. The financial statements, the financial highlights, and the
report are attached.
PERFORMANCE
Bond fund performance can be measured as TOTAL RETURN or YIELD. The
total returns and yields that follow are based on historical fund results
and do not reflect the effect of taxes.
The fund's fiscal year runs from December 1 to November 30. The tables
below show the fund's performance history compared to an index and a
measure of inflation.
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment in the fund over a
given period, assuming reinvestment of any dividends and capital gains. A
CUMULATIVE TOTAL RETURN reflects actual performance over a stated period of
time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that,
if achieved annually, would have produced the same cumulative total return
if performance had been constant over the entire period. Average annual
total returns smooth out variations in performance; they are not the same
as actual year-by-year results.
YIELD refers to the income generated by an investment in the fund over a
given period of time, expressed as an annual percentage rate. Yields are
calculated according to a standard that is required for all stock and bond
funds. Because this differs from other accounting methods, the quoted yield
may not equal the income actually paid to shareholders.
THE CONSUMER PRICE INDEX is a widely recognized measure of
inflation calculated by the U.S. Government.
The fund's recent strategies, performance, and holdings are detailed twice
a year in financial reports, which are sent to all shareholders.
For current performance, call Fidelity Client Services at the
appropriate number listed on page P- .
TOTAL RETURNS AND YIELDS ARE BASED ON PAST RESULTS AND ARE NOT AN
INDICATION OF FUTURE PERFORMANCE.
THE FUND IN DETAIL
CHARTER
INSTITUTIONAL SHORT-INTERMEDIATE GOVERNMENT IS A MUTUAL FUND: an investment
that pools shareholders' money and invests it toward a specified goal. The
fund is a diversified fund of Fidelity Advisor Series IV, an open-end
management investment company organized as a Massachusetts business trust
on May 6, 1983.
THE FUND IS GOVERNED BY A BOARD OF TRUSTEES which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet throughout the year to oversee the fund's activities,
review contractual arrangements with companies that provide services to the
fund, and review the fund's performance. The majority of trustees are not
otherwise affiliated with Fidelity.
THE FUND MAY HOLD SPECIAL MEETINGS AND MAIL PROXY MATERIALS. These meetings
may be called to elect or remove trustees, change fundamental policies,
approve a management contract, or for other purposes. Shareholders not
attending these meetings are encouraged to vote by proxy. The transfer
agent will mail proxy materials in advance, including a voting card and
information about the proposals to be voted on. The number of votes you are
entitled to is based upon the dollar value of your investment.
FMR AND ITS AFFILIATES
Fidelity Investments is one of the largest investment management
organizations in the United States and has its principal business address
at 82 Devonshire Street, Boston, Massachusetts 02109. It includes a number
of different subsidiaries and divisions which provide a variety of
financial services and products. The fund employs various Fidelity
companies to perform activities required for its operation.
The fund is managed by FMR, which chooses the fund's investments and
handles its business affairs.
As of November 30, 199 5 , FMR advised funds having approximately
___ million shareholder accounts with a total value of more than
$ ___ billion.
Curt Hollingsworth is manager and vice president of Institutional
Short-Intermediate Government, which he has managed since September, 1987.
Mr. Hollingsworth also manages Fidelity Short-Intermediate Government,
Spartan Short-Intermediate Government, Spartan Limited Maturity Government
and The North Carolina Capital Management Trust: Term Portfolio.
Previously, he managed Spartan Long Term Government Bond, Government
Securities and Advisor Government Investment. Mr. Hollingsworth joined
Fidelity in 1983.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.
Fidelity Distributors Corporation ( FDC ) distributes and
markets Fidelity's funds and services. Fidelity Investments
Institutional Operations Company ( FIIOC ) performs transfer agent
servicing functions for the fund.
FMR Corp. is the ultimate parent company of FMR. Members of the Edward
C. Johnson 3d family are the predominant owners of a class of shares of
common stock representing approximately 49% of the voting power of FMR
Corp. Under the Investment Company Act of 1940 (the 1940 Act), control of
a company is presumed where one individual or group of individuals owns
more than 25% of the voting stock of that company; therefore, the Johnson
family may be deemed under the 1940 Act to form a controlling group with
respect to FMR Corp.
To carry out the fund's transactions, FMR may use its broker-dealer
affiliates and other firms that sell fund shares, provided that the fund
receives services and commission rates comparable to those of other
broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
FMR normally invests at least 65% of the fund's total assets in U.S.
Government securities, including U.S. Government securities subject to
repurchase agreements. The fund intends to invest exclusively in U.S.
Government securities or in instruments that are backed by, or related to,
U.S. G overnment securities.
Although the fund can invest in securities of any maturity, the fund
maintains a dollar-weighted average maturity of between two and five years
under normal conditions. In determining a security's maturity for purposes
of calculating the fund's average maturity, an estimate of the average time
for its principal to be paid may be used. This can be substantially shorter
than its stated final maturity. As of the fiscal year ended November 30,
1995 the fund's dollar-weighted average maturity was ___.
The total return from a bond is a combination of income and price gains or
losses. While income is the most important component of bond returns over
time, the fund's emphasis on income does not mean that the fund invests
only in the highest-yielding bonds available, or that it can avoid risks to
principal. In selecting investments for the fund FMR considers a bond's
income potential together with its potential for price gains or losses.
FMR focuses on assembling a portfolio of income-producing securities that
it believes will provide the best tradeoff between risk and return within
the range of securities that are eligible investments for the fund.
The fund's yield and share price change daily and are based on changes in
interest rates, market conditions, other economic and political news ,
and on the quality and maturity of its investments . In general, bond
prices rise when interest rates fall, and vice versa. This effect is
usually more pronounced for longer-term securities. FMR may use various
investment techniques to hedge a portion of the fund's risk, but
there is no guarantee that these strategies will work as intended. When you
sell your shares, they may be worth more or less than what you paid for
them. It is important to note that neither the fund nor its yield is
guaranteed by the U.S. Government.
FMR normally invests the fund's assets according to its investment
strategy. The fund also reserves the right to invest without limitation in
investment-grade money market or short-term debt instruments for temporary,
defensive purposes.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which the fund may invest, strategies FMR may employ
in pursuit of the fund's investment objective , and a summary of related
risks . Any restrictions listed supplement those discussed earlier in
this section. A complete listing of the fund's limitations and more
detailed information about the fund's investments are contained in
the fund's SAI. Policies and limitations are considered at the time of
purchase; the sale of instruments is not required in the event of a
subsequent change in circumstances.
FMR may not buy all of these instruments or use all of these techniques
unless it believes that they are consistent with the fund's investment
objective and policies and that doing so will help the fund achieve its
goal. Current holdings and recent investment strategies are described in
the fund's financial reports, which are sent to shareholders twice a year.
For a free SAI or financial report , call Fidelity Client Services
at the appropriate number listed on page P- .
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.
MONEY MARKET INSTRUMENTS are high - quality instruments that present
minimal credit risk. They may include U.S. Government obligations,
commercial paper and other short-term corporate obligations, and
certificates of deposit, bankers' acceptances, bank deposits, and other
financial institution obligations. These instruments may carry fixed or
variable interest rates.
U.S. GOVERNMENT SECURITIES are high-quality debt securities issued or
guaranteed by the U.S. Treasury or by an agency or instrumentality of the
U.S. Government. Not all U.S. Government securities are backed by the full
faith and credit of the United States. For example, securities issued by
the Federal Farm Credit Bank or by the Federal National Mortgage
Association are supported by the instrumentality's right to borrow money
from the U.S. Treasury under certain circumstances. However, securities
issued by the Financing Corporation are supported only by the credit of the
entity that issued them.
ASSET-BACKED SECURITIES include interests in pools of
lower-rated debt securities, or consumer loans. The value of these
securities may be significantly affected by changes in the market's
perception of the issuers and the creditworthiness of the parties
involved.
MORTGAGE SECURITIES are interests in pools of commercial or residential
mortgages, and include complex instruments such as collateralized mortgage
obligations and stripped mortgage-backed securities. Mortgage securities
may be issued by the U.S. Government or by private entities. For example,
Ginnie Maes are interests in pools of mortgage loans insured or guaranteed
by a U.S. Government agency. Because mortgage securities pay both interest
and principal as their underlying mortgages are paid off, they are subject
to prepayment risk. This is especially true for stripped securities. Also,
the value of a mortgage security may be significantly affected by changes
in interest rates. Some mortgage securities may have a structure that makes
their reaction to interest rates and other factors difficult to predict,
making their value highly volatile.
STRIPPED SECURITIES are the separate income or principal components of a
debt security . Their risks are similar to those of other debt
securities, although they may be more volatile and the value of
certain types of stripped securities may move in the same
direction as interest rates.
REPURCHASE AGREEMENTS. In a repurchase agreement, the fund buys a security
at one price and simultaneously agrees to sell it back at a higher price.
Delays or losses could result if the other party to the agreement defaults
or becomes insolvent.
ADJUSTING INVESTMENT EXPOSURE. The fund can use various techniques to
increase or decrease its exposure to changing security prices, interest
rates, or other factors that affect security values. These techniques may
involve derivative transactions such as buying and selling options and
futures contracts, entering into swap agreements and purchasing indexed
securities.
FMR can use these practices to adjust the risk and return characteristics
of the fund's portfolio of investments. If FMR judges market conditions
incorrectly or employs a strategy that does not correlate well with the
fund's investments, these techniques could result in a loss, regardless of
whether the intent was to reduce risk or increase return. These techniques
may increase the volatility of the fund and may involve a small investment
of cash relative to the magnitude of the risk assumed. In addition, these
techniques could result in a loss if the counterparty to the transaction
does not perform as promised.
ILLIQUID SECURITIES. Some investments may be determined by FMR, under the
supervision of the Board of Trustees, to be illiquid, which means that they
may be difficult to sell promptly at an acceptable price. Difficulty in
selling securities may result in a loss or may be costly to the fund.
RESTRICTION : The fund may not purchase a security if, as a result,
more than 10% of its net assets would be invested in illiquid securities.
WHEN-ISSUED AND DELAYED-DELIVERY TRANSACTIONS are trading practices in
which payment and delivery for the securities take place at a future date.
The market value of a security could change during this period, which could
affect the fund's yield.
BORROWING. The fund may borrow from banks or from other funds advised by
FMR, or through reverse repurchase agreements. If the fund borrows money,
its share price may be subject to greater fluctuation until the borrowing
is paid off. If the fund makes additional investments while borrowings are
outstanding, this may be considered a form of leverage.
RESTRICTION : The fund may borrow only for temporary or emergency
purposes, but not in an amount exceeding 33% of its total assets.
LENDING securities to broker-dealers and institutions, including Fidelity
Brokerage Services, Inc. (FBSI), an affiliate of FMR, is a means of earning
income. This practice could result in a loss or a delay in recovering the
fund's securities. The fund may also lend money to other funds advised by
FMR.
RESTRICTION : Loans, in the aggregate, may not exceed 33% of the
fund's total assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages are
fundamental, that is, subject to change only by shareholder approval. The
following paragraphs restate all those that are fundamental. All policies
stated throughout this prospectus, other than those identified in the
following paragraphs, can be changed without shareholder approval.
The fund seeks a high level of current income in a manner consistent with
preserving principal.
The fund may borrow only for temporary or emergency purposes, but not in an
amount exceeding 33% of its total assets.
Loans, in the aggregate, may not exceed 33% of the fund's total assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the fund pays fees related to its daily operations.
Expenses paid out of the fund 's assets are reflected in its share
price or dividends; they are neither billed directly to shareholders nor
deducted from shareholder accounts.
FMR may, from time to time, agree to reimburse the fund for management fees
above a specified limit. Reimbursement arrangements, which may be
terminated at any time without notice, can decrease the fund's expenses and
boost its performance.
MANAGEMENT FEE
The management fee is calculated and paid to FMR every month. FMR pays all
of the expenses of the fund with limited exceptions. The annual management
fee is 0.45% of the fund's average net assets.
OTHER EXPENSES
FIIOC performs transfer agency, dividend disbursing and shareholder
servicing functions for the fund . Fidelity Service Co. (FSC)
calculates the net asset value ( NAV ) and dividends for the
fund , maintains the fund's general accounting records , and
administers the fund's securities lending program.
In the fiscal year ended November 30, 1995, FMR paid FIIOC on behalf of the
fund fees equal to __% of the fund's average net assets; and FMR paid FSC
on behalf of the fund fees equal to __% of the fund's average net assets.
These expenses are paid by FMR pursuant to its management contract.
The fund has adopted a DISTRIBUTION AND SERVICE PLAN. This plan
recognizes that FMR may use its resources, including management fees, to
pay expenses associated with the sale of fund shares. This may
include reimbursing FDC for payments to third parties, such as banks
or broker-dealers, that provide shareholder support services or engage in
the sale of the fund's shares. The Board of Trustees has not
authorized such payments.
The fund pays other expenses, such as brokerage fees and commissions,
taxes, and the compensation of trustees who are not affiliated with
Fidelity.
The fund's portfolio turnover rate for the fiscal year ended November
30, 199 5 was ___ %. This rate varies from year to year.
High turnover rates increase transaction costs and may increase taxable
capital gains. FMR considers these effects when evaluating the anticipated
benefits of short-term investing.
YOUR ACCOUNT
TYPES OF ACCOUNTS
If you invest through an i nvestment p rofessional, read
your i nvestment p rofessional's program materials in
conjunction with this prospectus for additional service features or fees
that may apply. Certain features of the fund, such as minimum
initial or subsequent investment amounts, may be modified in these
programs, and administrative charges may be imposed for the services
rendered. Your investment professional (including broker-dealers) may
charge you a transaction fee with respect to the purchase and sale of fund
shares.
The different ways to set up (register) your account with Fidelity are
listed on the right .
The account guidelines that follow may not apply to certain retirement
accounts. If your employer offers the fund through a retirement program,
contact your employer for more information . Otherwise, call Fidelity
Client Services at the appropriate number listed on page P-12.
WAYS TO SET UP YOUR ACCOUNT
TRUST
FOR MONEY BEING INVESTED BY A TRUST .
The trust must be established before an account can be opened.
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR OTHER
GROUPS.
For more specific information, call the appropriate number listed on page
P- .
TAX SAVING RETIREMENT PLANS. Fidelity can set up your new account in the
fund under one of several tax-sheltered plans. These plans let you save for
retirement and shelter your investment income from current taxes. Minimums
may differ from those listed on page P- , and the corresponding
information may not apply. Retirement plan participants should refer to
their retirement plan's guidelines for further information.
(solid bullet) DEFINED CONTRIBUTION PLANS, such as a 401(k)
Plan , employer-sponsored IRA programs, Thrift, Keogh or
Corporate Profit-Sharing or Money-Purchase Plans: open to self-employed
people and their partners or to corporations, to benefit themselves and
their employees.
(solid bullet) 403(B) CUSTODIAL ACCOUNTS are open to employees of most
non-profit organizations.
(solid bullet) DEFINED BENEFIT PLANS are open to corporations of all sizes
to benefit their employees.
(solid bullet) 457 PLANS are open to employees of most government agencies.
(solid bullet) ROLLOVER IRAS retain special tax advantages for certain
distributions from employer-sponsored retirement plans.
HOW TO BUY SHARES
THE FUND'S SHARE PRICE, called NAV, is calculated every business
day. The fund's shares are sold without a sales charge.
Shares are purchased at the next NAV calculated after your order is
received and accepted by the transfer agent . NAV is normally
calculated at 4:00 p.m. Eastern time.
Share certificates are not available for fund shares.
IF YOU ARE NEW TO FIDELITY, complete and sign an account application and
mail it along with your check. You may also open your account by wire as
described below. If there is no account application accompanying this
prospectus, call Fidelity Client Services at the appropriate number
listed below.
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can:
(small solid bullet) Mail an account application with a check,
(small solid bullet) Wire money into your account,
(small solid bullet) Open your account by exchanging from another Fidelity
fund , or
(small solid bullet) Contact your investment professional.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $100,000
TO ADD TO AN ACCOUNT $2,500
MINIMUM BALANCE $40,000
1.FOR INFORMATION OR ASSISTANCE IN OPENING A NEW ACCOUNT:
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Initial Investment Corporate Retirement Plans 1- 800-962-1375
(Client Services) "Not for Profit" Retirement Plans 1- 800-343-0860
Financial and Other Institutions 1- 800-843-3001
Additional Investment Corporate Retirement Plans 1- 800-962-1375
(Client Services) "Not for Profit" Retirement Plans 1- 800-343-0860
Financial and Other Institutions 1- 800-843-3001
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TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT
PHONE (small solid bullet) Exchange from another Fidelity fund (small solid bullet) Exchange from another Fidelity
account with the same registration, fund account with the same
including name, address, and registration, including name,
taxpayer ID number. address, and taxpayer ID number.
</TABLE>
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Mail (mail_graphic) (small solid bullet) Complete and sign the account (small solid bullet) Make your check payable to
application. Make your check "Fidelity Institutional
payable to "Fidelity Institutional Short-Intermediate Government
Short-Intermediate Government Portfolio." Indicate your fund
Portfolio . " Mail to the address account number on your check and
indicated on the application. mail to the address printed on your
account statement.
(small solid bullet) Exchange by mail: c all the
appropriate number listed above for
instructions.
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Wire (wire_graphic) (small solid bullet) Call the appropriate
number listed (small solid bullet) You must sign up for the wire
above to set up your account and to feature before using it. Call the
arrange a wire transaction. Not appropriate number listed above for
available for retirement accounts. instructions.
(small solid bullet) Wire within 24 hours
to (small solid bullet) Specify "Fidelity Institutional
:________________. Short-Intermediate Government
(small solid bullet) Specify "Fidelity
Institutional Portfolio" and include your account
Short-Intermediate Government number and your name.
Portfolio" and include your new (small solid bullet) Not available for retirement
account number and your name. accounts.
Call Client Services before 4:00 p.m.
Eastern time.
(small solid bullet) Call Client Services
before 4:00 p.m.
Eastern time.
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HOW TO SELL SHARES
You can arrange to take money out of your fund account at any time by
selling (redeeming) some or all of your shares. Your shares will be sold at
the next NAV calculated after your order is received and accepted by the
transfer agent. NAV is normally calculated at 4:00 p.m. Eastern time.
TO SELL SHARES IN A NON-RETIREMENT ACCOUNT, you may use any of the
methods described on these two pages.
TO SELL SHARES IN A RETIREMENT ACCOUNT, your request must be made in
writing except for exchanges to other Fidelity funds, which can be
requested by phone or in writing.
IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR SHARES, leave at least $40,000
worth of shares in the account to keep it open.
TO SELL SHARES BY BANK WIRE, you will need to sign up for these services in
advance.
CERTAIN REQUESTS MUST INCLUDE A SIGNATURE GUARANTEE. It is designed to
protect you and Fidelity from fraud. Your request must be made in writing
and include a signature guarantee if any of the following situations apply:
(small solid bullet) You wish to redeem more than $100,000 worth of shares,
(small solid bullet) Your account registration has changed within the last
30 days,
(small solid bullet) The check is being mailed to a different address than
the one on your account (record address),
(small solid bullet) The check is being made payable to someone other than
the account owner,
(small solid bullet) The redemption proceeds are being transferred to a
Fidelity account with a different registration, or
(small solid bullet) You wish to have redemption proceeds wired to a
non-predesignated bank account.
You should be able to obtain a signature guarantee from a bank, broker,
dealer, credit union (if authorized under state law), securities exchange
or association, clearing agency, or savings association. A notary public
cannot provide a signature guarantee.
SELLING SHARES IN WRITING
Write a "letter of instruction" with:
(small solid bullet) Your name,
(small solid bullet) The fund's name,
(small solid bullet) Your fund account number,
(small solid bullet) The dollar amount or number of shares to be redeemed,
and
(small solid bullet) Any other applicable requirements listed in the
table on page P-14 .
Mail your letter to the following address:
Fidelity Institutional Short-Intermediate Government Portfolio
F IIOC, ZR5
P.O. Box 1182
Boston, MA 02103-1182
Unless otherwise instructed, the transfer agent will send a check to the
record address.
ACCOUNT TYPE SPECIAL REQUIREMENTS
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PHONE All account types,
except retirement (small solid bullet) Maximum check request: $100,000.
(small solid bullet) You may exchange to other Fidelity
funds if both accounts are
registered with the same name(s),
address, and taxpayer ID number.
Retirement account (small solid bullet) If you have invested through an
employer-sponsored retirement
plan, contact your employer or call
the appropriate number listed on
page P- .
Mail or in Person (mail_graphic)(hand_graphic) Retirement account (small solid bullet) The account owner should complete
a retirement distribution form. Call
the appropriate number listed on
page P- or your Fidelity toll-free
retirement number .
Trust (small solid bullet) The trustee must sign the letter
indicating capacity as trustee. If the
trustee's name is not in the account
registration, provide a copy of the
trust document certified within the
last 60 days with a signature
guarantee letter.
Business or
Organization (small solid bullet) At least one person authorized by
corporate resolution to act on the
account must sign the letter with a
signature guarantee.
Wire (wire_graphic) All account types (small solid bullet) You must sign up for the wire
feature before using it. Call the
appropriate number listed on page
P- to verify that it is in place.
Minimum wire: $2,500.
(small solid bullet) Your wire redemption request must
be received by the transfer agent
before 4:00 p.m. Eastern time for
money to be wired on the next
business day.
</TABLE>
(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired:
1-800-544-0118
INVESTOR SERVICES
Fidelity provides a variety of services to help you manage your account.
INFORMATION SERVICES
STATEMENTS AND REPORTS that Fidelity sends to you include the following:
(small solid bullet) Confirmation statements (after every transaction,
except a reinvestment, that affects your account balance or your account
registration)
(small solid bullet) A ccount statements (quarterly for retirement
plans, monthly for all others)
(small solid bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports will be mailed,
even if you have more than one account in the fund. Call Fidelity Client
Services at the appropriate number listed on page P- if you need
additional copies of financial reports.
TRANSACTION SERVICES
EXCHANGE PRIVILEGE. You may sell your fund shares and buy shares of
other Fidelity funds by telephone or in writing.
Note that exchanges out of the fund are limited to four per calendar year,
and that they may have tax consequences for you. For details on policies
and restrictions governing exchanges, including circumstances under which a
shareholder's exchange privilege may be suspended or revoked, see "Exchange
Restrictions , " page P- .
SHAREHOLDER AND ACCOUNT POLICIES
DIVIDENDS, CAPITAL GAINS, AND TAXES
The fund distributes substantially all of its net investment income and
capital gains to shareholders each year. Income dividends are declared
daily and paid monthly. Capital gains are normally distributed in December.
DISTRIBUTION OPTIONS
When you open an account, specify on your account application how you want
to receive your distributions. The fund offers three options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions will
be automatically reinvested in additional shares of the fund. If you do not
indicate a choice on your application, you will be assigned this option.
2. INCOME-EARNED OPTION. Your capital gain distributions will be
automatically reinvested in additional shares of the fund, but you will be
sent a check for each dividend distribution.
3. CASH OPTION. You will be sent a check for your dividend and capital gain
distributions.
For retirement accounts, a ll distributions are automatically
reinvested. When you are over 59 1/2 years old, you can receive
distributions in cash.
Dividends will be reinvested at the fund 's NAV on the last day of
the month. Capital gain distributions will be reinvested at the NAV as of
the date the fund deducts the distribution from its NAV. The mailing
of distribution checks will begin within seven days.
TAXES
As with any investment, you should consider how your investment in the fund
will be taxed. If your account is not a tax-deferred retirement account,
you should be aware of these tax implications.
TAXES ON DISTRIBUTIONS. Distributions are subject to federal income tax,
and may also be subject to state or local taxes. If you live outside the
United States, your distributions could also be taxed by the country in
which you reside. Your distributions are taxable when they are paid,
whether you take them in cash or reinvest them. However, distributions
declared in December and paid in January are taxable as if they were paid
on December 31.
For federal tax purposes, the fund's income and short-term capital gain
distributions are taxed as dividends; long-term capital gain distributions
are taxed as long-term capital gains.
Mutual fund dividends from U.S. Government securities are generally free
from state and local income taxes. However, particular states may limit
this benefit, and some types of securities, such as repurchase agreements
and some agency-backed securities, may not qualify for the benefit. In
addition, some states may impose intangible property taxes. You should
consult your own tax adviser for details and up-to-date information on the
tax laws in your state.
During the fiscal year ended November 30, 199 5 ,
_____ % of the fund's income distributions were derived from interest
on U.S. Government securities which is generally exempt from state taxes.
Every January, Fidelity will send you and the Internal Revenue Service
( IRS ) a statement showing the taxable distributions paid to you
in the previous year.
TAXES ON TRANSACTIONS. Your redemptions-including exchanges-are subject to
capital gains tax. A capital gain or loss is the difference between the
cost of your shares and the price you receive when you sell them.
Whenever you sell shares of the fund, Fidelity will send you a confirmation
statement showing how many shares you sold and at what price.
You will also receive a consolidated transaction statement at least
quarterly. However, i t is up to you or your tax preparer to determine
whether this sale resulted in a capital gain and, if so, the amount of tax
to be paid. BE SURE TO KEEP YOUR REGULAR ACCOUNT STATEMENTS; the
information they contain will be essential in calculating the amount of
your capital gains.
"BUYING A DIVIDEND." If you buy shares just before the fund deducts
a capital gain distribution from its NAV, you will pay the full price for
the shares and then receive a portion of the price back in the form of a
taxable distribution.
There are tax requirements that all funds must follow in order to avoid
federal taxation. In its effort to adhere to these requirements, the fund
may have to limit its investment activity in some types of instruments.
TRANSACTION DETAILS
THE FUND IS OPEN FOR BUSINESS each day the New York Stock Exchange (NYSE)
is open. FSC normally calculates the fund's NAV as of the close of
business of the NYSE, normally 4:00 p.m. Eastern time.
THE FUND 'S NAV is the value of a single share. The NAV is computed
by adding the value of the fund's investments, cash, and other assets,
subtracting its liabilities, and dividing the result by the
number of shares outstanding.
The fund's assets are valued primarily on the basis of market quotations.
If quotations are not readily available, assets are valued by a method that
the Board of Trustees believes accurately reflects fair value.
THE FUND 'S OFFERING PRICE (price to buy one share) and REDEMPTION
PRICE (price to sell one share) are its NAV.
WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to certify that
your social security or taxpayer identification number is correct and that
you are not subject to 31% backup withholding for failing to report income
to the IRS. If you violate IRS regulations, the IRS can require the
fund to withhold 31% of your taxable distributions and redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Fidelity may only be
liable for losses resulting from unauthorized transactions if it does not
follow reasonable procedures designed to verify the identity of the caller.
Fidelity will request personalized security codes or other information, and
may also record calls. You should verify the accuracy of the confirmation
statements immediately after receipt. If you do not want the ability to
redeem and exchange by telephone, call Fidelity for instructions.
Additional documentation may be required from corporations, associations
and certain fiduciaries.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during periods
of unusual market activity), consider placing your order by mail.
THE FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period
of time. The fund also reserves the right to reject any specific purchase
order, including certain purchases by exchange. See "Exchange Restrictions"
on page P- . Purchase orders may be refused if, in FMR's opinion,
they would disrupt management of the fund.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your shares will be purchased at the
next NAV calculated after your order is received and accepted by the
transfer agent. Note the following:
(small solid bullet) All of your purchases must be made in U.S. dollars and
checks must be drawn on U.S. banks.
(small solid bullet) Fidelity does not accept cash.
(small solid bullet) When making a purchase with more than one check, each
check must have a value of at least $50.
(small solid bullet) The fund reserves the right to limit the number of
checks processed at one time.
(small solid bullet) If your check does not clear, your purchase will be
canceled and you could be liable for any losses or fees the fund or
Fidelity has incurred.
(small solid bullet) Confirmed Purchases: You begin to earn dividends as of
the business day the fund receives payment.
(small solid bullet) Automated Purchase Orders: You begin to earn
dividends as of the business day your order is received and accepted.
(small solid bullet) OTHER PURCHASES: You begin to earn dividends as of the
first business day following the day of your purchase.
CONFIRMED P URCHASES. Certain financial institutions that meet FDC's
creditworthiness criteria may enter confirmed purchase orders on behalf of
customers by phone, with payment to follow no later than close of business
on the first business day following the day your order is received and
accepted. If payment is not received by such date, the order will be
canceled and the financial institution will be liable for any losses.
AUTOMATED PURCHASE ORDERS. Shares of the fund can be purchased or sold
through investment professionals utilizing an automated order placement and
settlement system that guarantees payment for orders on a specified
date.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the
next NAV calculated after your order is received and accepted by the
transfer agent . Note the following:
(small solid bullet) Normally, redemption proceeds will be mailed to you on
the next business day, but if making immediate payment could adversely
affect the fund, it may take up to seven days to pay you.
(small solid bullet) Shares will earn dividends through the date of
redemption; however, shares redeemed on a Friday or prior to a holiday will
continue to earn dividends until the next business day.
(small solid bullet) The fund may hold payment on redemptions until it is
reasonably satisfied that investments made by check have been collected,
which can take up to seven business days.
(small solid bullet) Redemptions may be suspended or payment dates
postponed when the NYSE is closed (other than weekends or holidays), when
trading on the NYSE is restricted, or as permitted by the SEC.
IF YOUR NON-RETIREMENT ACCOUNT BALANCE FALLS BELOW $40,000, 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.
FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
EXCHANGE RESTRICTIONS
As a shareholder, you have the privilege of exchanging shares of the fund
for shares of other Fidelity funds. However, you should note the following:
(small solid bullet) The fund you are exchanging into must be registered
for sale in your state.
(small solid bullet) You may only exchange between accounts that are
registered in the same name, address, and taxpayer identification number.
(small solid bullet) Before exchanging into a fund, read its prospectus.
(small solid bullet) If you exchange into a fund with a sales charge, you
pay the difference between that fund's sales charge and any sales charge
you have previously paid in connection with the shares you are exchanging.
For example, if you had already paid a sales charge of 2% on your shares
and you exchange them into a fund with a 3% sales charge, you would pay an
additional 1% sales charge.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Because excessive trading can hurt fund performance
and shareholders, the fund reserves the right to temporarily or permanently
terminate the exchange privilege of any investor who makes more than four
exchanges out of the fund per calendar year. Accounts under common
ownership or control, including accounts with the same taxpayer
identification number, will be counted together for purposes of the four
exchange limit.
(small solid bullet) The fund reserves the right to refuse exchange
purchases by any person or group if, in FMR's judgment, the fund would be
unable to invest the money effectively in accordance with its investment
objective and policies, or would otherwise potentially be adversely
affected.
(small solid bullet) Your exchanges may be restricted or refused if the
fund receives or anticipates simultaneous orders affecting significant
portions of the fund's assets. In particular, a pattern of exchanges that
coincide s with a "market timing" strategy may be disruptive to the
fund.
Although the fund will attempt to give you prior notice whenever it is
reasonably able to do so, it may impose these restrictions at any time. The
fund reserves the right to terminate or modify the exchange privilege in
the future.
OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may impose
administrative fees of up to $7.50 and redemption fees of up to 1.50% on
exchanges. Check each fund's prospectus for details.
No dealer, sales representative or any other person has been authorized to
give any information or to make any representations, other than those
contained in this Prospectus and in the related SAI, in connection with the
offer contained in this Prospectus. If given or made, such other
information or representations must not be relied upon as having been
authorized by the fund or FDC. This Prospectus and the related SAI do not
constitute an offer by the fund or by FDC to sell or to buy shares of the
fund to any person to whom it is unlawful to make such offer.
Form N-1A Item Number
Part B Statement of Additional Information
<TABLE>
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10 a,b Cover Page
11 Table of Contents
12 FMR; Description of the Trust
13 a,b,c Investment Policies and Limitations
d Portfolio Transactions
14 a,b Trustees and Officers
c **
15 a,b,c FMR; Trustees and Officers
16 a(i) FMR
a(ii) Trustees and Officers
a(iii),b Management Contract; Portfolio Transactions
c **
d Management Contract; Contracts with FMR Affiliates
e **
f Distribution and Service Plan
g **
h Description of the Trust
i FMR; Management Contract; Contracts with FMR Affiliates
17 a Portfolio Transactions
b **
c,d Portfolio Transactions
e **
18 a Description of the Trust
b **
19 a Additional Purchase, Exchange and Redemption Information
b Valuation
c **
20 Distributions and Taxes
21 a(i),(ii) Management Contract; Contracts with FMR Affiliates; Distribution
and Service Plan
a(iii),b,c **
22 a **
b Performance
23 *
</TABLE>
* To be filed by subsequent amendment
** Not applicable
FIDELITY INSTITUTIONAL SHORT-INTERMEDIATE GOVERNMENT PORTFOLIO
A F UND OF FIDELITY ADVISOR SERIES IV
STATEMENT OF ADDITIONAL INFORMATION
JANUARY 19, 1996
This Statement of Additional Information (SAI) is not a prospectus but
should be read in conjunction with the fund's current Prospectus
(dated January 19, 1996) and Annual Report, for the period ended November
30, 1995 . Please retain this document for future reference. The fund's
financial statements and financial highlights are included in the
Annual Report and are incorporated herein by reference. To obtain an
additional copy of the Prospectus or financial report , please
call :
INDIVIDUAL ACCOUNTS (PARTICIPANT)
If you are investing through a retirement plan sponsor or other
institution, refer to your plan materials or contact that institution
directly.
RETIREMENT PLAN LEVEL ACCOUNTS (TRUSTEES, PLAN SPONSORS)
Corporate Clients 1- 800 - 962-1375
"Not for Profit" Clients 1- 800 - 343-0860
FINANCIAL AND OTHER INSTITUTIONS
Nationwide 1- 800 - 843-3001
TABLE OF CONTENTS PAGE
Investment Policies and Limitations
Portfolio Transactions
Valuation
Performance
Additional Purchase, Exchange and Redemption Information
Distributions and Taxes
FMR
Trustees and Officers
Management Contract
Contracts with FMR Affiliates
Distribution and Service Plan
Description of the Trust
Financial Statements
Appendix
INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
TRANSFER AGENT
Fidelity Investments Institutional Operations Company (FIIOC)
CUSTODIAN
The Bank of New York
ISIG-ptb- 196
INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth in
the Prospectus. Unless otherwise noted, whenever an investment
policy or limitation states a maximum percentage of the fund's assets that
may be invested in any security or other asset , or sets forth a
policy regarding quality standards, such standard or percentage limitation
will be determined immediately after and as a result of the fund's
acquisition of such security or other asset. Accordingly, any subsequent
change in values, net assets , or other circumstances will not be
considered when determining whether the investment complies with the fund's
investment policies and limitations.
The fund's fundamental policies and limitations cannot be changed without
approval by a " majority of the outstanding voting
securities " (as defined in the Investment Company Act of 1940
( the 1940 Act)) of the fund. However, except for the fundamental
investment limitations listed below, the investment policies and
limitations described in this SAI are not fundamental and may be changed
without shareholder approval. THE FOLLOWING ARE THE FUND'S FUNDAMENTAL
INVESTMENT LIMITATIONS SET FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
1. with respect to 75% of the fund's total assets, purchase the securities
of any issuer (other than securities issued or guaranteed by the U.S.
Government or any of its agencies or instrumentalities) if, as a result,
(a) more than 5% of the fund's total assets would be invested in securities
of that issuer, or (b) the fund would hold more than 10% of the outstanding
voting securities of that issuer;
2. issue senior securities, except as permitted under the Investment
Company Act of 1940;
3. borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of its total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to exceed
this amount will be reduced within three days (not including Sundays and
holidays) to the extent necessary to comply with the 33 1/3% limitation;
4. underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
5. purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the fund's total
assets would be invested in the securities of companies whose principal
business activities are in the same industry;
6. purchase or sell real estate unless acquired as a result of ownership of
securities or other instruments (but this shall not prevent the fund from
investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
7. purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
8. lend any security or make any loan if, as a result, more than 33 1/3% of
its total assets would be lent to other parties (but this limitation does
not apply to purchases of debt securities or to repurchase agreements).
9. The fund may, notwithstanding any other fundamental investment policy or
limitation, invest all of its assets in the securities of a single open-end
management investment company with substantially the same fundamental
investment objective, policies, and limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (3)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 10% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(v) The fund does not currently intend to invest in interests of real
estate investment trusts that are not readily marketable, or to invest in
interests of real estate limited partnerships that are not listed on the
New York Stock Exchange or the American Stock Exchange or traded on the
NASDAQ National Market System.
(vi) The fund does not currently intend to lend assets other than
securities to other parties. This limitation does not apply to purchases
of debt securities or to repurchase agreements.
(vii) The fund does not currently intend to purchase warrants, valued at
the lower of cost or market, in excess of 5% of the fund's net assets.
Included in that amount, but not to exceed 2% of the fund's net assets, may
be warrants that are not listed on the New York Stock Exchange or the
American Stock Exchange. Warrants acquired by the fund in units or
attached to securities are not subject to these restrictions.
(vi ii ) The fund does not currently intend to invest in oil, gas, or
other mineral exploration or development programs or leases.
( ix ) The fund does not currently intend to purchase the securities
of any issuer if those officers and Trustees of the T rust and those
officers and directors of FMR who individually own more than 1/2 of 1% of
the securities of such issuer together own more than 5% of such issuer's
securities.
( x ) The fund does not currently intend to invest all of its assets
in the securities of a single open-end management investment company with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
For the fund's limitation on futures contracts and options, see the section
entitled "Limitations on Futures and Options Transactions" beginning on
page .
AFFILIATED BANK TRANSACTIONS. The fund may engage in transactions with
financial institutions that are, or may be considered to be,"affiliated
persons" of the fund under the 1940 Act. These transactions may include
repurchase agreements with custodian banks; short-term obligations of, and
repurchase agreements with, the 50 largest U.S. banks (measured by
deposits); municipal securities; U.S. G overnment securities with
affiliated financial institutions that are primary dealers in these
securities; short-term currency transactions; and short-term borrowings. In
accordance with exemptive orders issued by the Securities and Exchange
Commission (SEC), the Board of Trustees has established and periodically
reviews procedures applicable to transactions involving affiliated
financial institutions.
DELAYED-DELIVERY TRANSACTIONS. The fund may buy and sell securities on a
delayed-delivery or when-issued basis. These transactions involve a
commitment by the fund to purchase or sell specific securities at a
predetermined price or yield, with payment and delivery taking place
after the customary settlement period for that type of security .
Typically, no interest accrues to the purchaser until the security is
delivered. The fund may receive fees for entering into delayed-delivery
transactions.
When purchasing securit ies on a delayed-delivery basis, the fund
assumes the rights and risks of ownership, including the risk of price and
yield fluctuations. Because the fund is not required to pay for securities
until the delivery date, these risks are in addition to the risks
associated with the fund's other investments. If the fund remains
substantially fully invested at a time when delayed-delivery purchases are
outstanding, the delayed-delivery purchases may result in a form of
leverage. When delayed-delivery purchases are outstanding, the fund will
set aside appropriate liquid assets in a segregated custodial account to
cover its purchase obligations. When the fund has sold a security on a
delayed-delivery basis, the fund does not participate in further gains or
losses with respect to the security. If the other party to a
delayed-delivery transaction fails to deliver or pay for the securities,
the fund could miss a favorable price or yield opportunity , or could
suffer a loss.
The fund may renegotiate delayed-delivery transactions after they are
entered into, and may sell underlying securities before they are delivered,
which may result in capital gains or losses.
FUTURES AND OPTIONS. The following paragraphs pertain to futures and
options: Asset Coverage for Futures and Options Positions, Combined
Positions, Correlation of Price Changes, Futures Contracts, Futures Margin
Payments, Limitations on Futures and Options Transactions, Liquidity of
Options and Futures Contracts, OTC Options, Purchasing Put and Call
Options, and Writing Put and Call Options.
ASSET COVERAGE FOR FUTURES AND OPTIONS POSITIONS. The fund will comply with
guidelines established by the SEC with respect to coverage of options and
futures strategies by mutual funds, and, if the guidelines so require, will
set aside appropriate liquid assets in a segregated custodial account in
the amount prescribed. Securities held in a segregated account cannot be
sold while the futures or option strategy is outstanding, unless they are
replaced with other suitable assets. As a result, there is a possibility
that segregation of a large percentage of the fund's assets could impede
portfolio management or the fund's ability to meet redemption requests or
other current obligations.
COMBINED POSITIONS. The fund may purchase and write options in combination
with each other, or in combination with futures or forward contracts, to
adjust the risk and return characteristics of the overall position. For
example, the fund may purchase a put option and write a call option on the
same underlying instrument, in order to construct a combined position whose
risk and return characteristics are similar to selling a futures contract.
Another possible combined position would involve writing a call option at
one strike price and buying a call option at a lower price, in order to
reduce the risk of the written call option in the event of a substantial
price increase. Because combined options positions involve multiple trades,
they result in higher transaction costs and may be more difficult to open
and close out.
CORRELATION OF PRICE CHANGES. Because there are a limited number of types
of exchange-traded options and futures contracts, it is likely that the
standardized contracts available will not match the fund's current or
anticipated investments exactly. The fund may invest in options and futures
contracts based on securities with different issuers, maturities, or other
characteristics from the securities in which it typically invests, which
involves a risk that the options or futures position will not track the
performance of the fund's other investments.
Options and futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments match the fund's
investments well. Options and futures prices are affected by such factors
as current and anticipated short-term interest rates, changes in volatility
of the underlying instrument, and the time remaining until expiration of
the contract, which may not affect security prices the same way. Imperfect
correlation may also result from differing levels of demand in the options
and futures markets and the securities markets, from structural differences
in how options and futures and securities are traded, or from imposition of
daily price fluctuation limits or trading halts. The fund may purchase or
sell options and futures contracts with a greater or lesser value than the
securities it wishes to hedge or intends to purchase in order to attempt to
compensate for differences in volatility between the contract and the
securities, although this may not be successful in all cases. If price
changes in the fund's options and futures positions are poorly correlated
with its other investments, the positions may fail to produce anticipated
gains or result in losses that are not offset by gains in other
investments.
FUTURES CONTRACTS. When the fund purchases a futures contract, it agrees to
purchase a specified underlying instrument at a specified future date. When
the fund sells a futures contract, it agrees to sell the underlying
instrument at a specified future date. The price at which the purchase and
sale will take place is fixed when the fund enters into the contract. Some
currently available futures contracts are based on specific securities,
such as U.S. Treasury bonds or notes, and some are based on indices of
securities prices, such as the Bond Buyer Municipal Bond Index. Futures can
be held until their delivery dates, or can be closed out before then if a
liquid secondary market is available.
The value of a futures contract tends to increase and decrease in tandem
with the value of its underlying instrument. Therefore, purchasing futures
contracts will tend to increase the fund's exposure to positive and
negative price fluctuations in the underlying instrument, much as if it had
purchased the underlying instrument directly. When the fund sells a futures
contract, by contrast, the value of its futures position will tend to move
in a direction contrary to the market. Selling futures contracts,
therefore, will tend to offset both positive and negative market price
changes, much as if the underlying instrument had been sold.
FUTURES MARGIN PAYMENTS. The purchaser or seller of a futures contract is
not required to deliver or pay for the underlying instrument unless the
contract is held until the delivery date. However, both the purchaser and
seller are required to deposit "initial margin" with a futures broker,
known as a futures commission merchant (FCM), when the contract is entered
into. Initial margin deposits are typically equal to a percentage of the
contract's value. If the value of either party's position declines, that
party will be required to make additional "variation margin" payments to
settle the change in value on a daily basis. The party that has a gain may
be entitled to receive all or a portion of this amount. Initial and
variation margin payments do not constitute purchasing securities on margin
for purposes of the fund's investment limitations. In the event of the
bankruptcy of an FCM that holds margin on behalf of the fund, the fund may
be entitled to return of margin owed to it only in proportion to the amount
received by the FCM's other customers, potentially resulting in losses to
the fund.
LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. The fund has filed a
notice of eligibility for exclusion from the definition of the term
"commodity pool operator" with the Commodity Futures Trading Commission
(CFTC) and the National Futures Association, which regulate trading in the
futures markets. The fund intends to comply with Rule 4.5 under the
Commodity Exchange Act, which limits the extent to which the fund can
commit assets to initial margin deposits and option premiums.
In addition, the fund will not: (a) sell futures contracts, purchase put
options, or write call options if, as a result, more than 50% of the fund's
total assets would be hedged with futures and options under normal
conditions; (b) purchase futures contracts or write put options if, as a
result, the fund's total obligations upon settlement or exercise of
purchased futures contracts and written put options would exceed 25% of its
total assets; (c) purchase call options if, as a result, the current value
of option premiums for call options purchased by the fund would exceed 5%
of the fund's total assets; or (d) write call options on securities, if, as
a result, the aggregate value of the securities underlying the calls would
exceed 25% of the fund's net assets. These limitations do not apply to
options attached to or acquired or traded together with their underlying
securities, and do not apply to securities that incorporate features
similar to options.
The above limitations on the fund's investments in futures contracts and
options, and the fund's policies regarding futures contracts and options
discussed elsewhere in this SAI may be changed as regulatory agencies
permit.
LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There is no assurance a liquid
secondary market will exist for any particular options or futures contract
at any particular time. Options may have relatively low trading volume and
liquidity if their strike prices are not close to the underlying
instrument's current price. In addition, exchanges may establish daily
price fluctuation limits for options and futures contracts, and may halt
trading if a contract's price moves upward or downward more than the limit
in a given day. On volatile trading days when the price fluctuation limit
is reached or a trading halt is imposed, it may be impossible for the fund
to enter into new positions or close out existing positions. If the
secondary market for a contract is not liquid because of price fluctuation
limits or otherwise, it could prevent prompt liquidation of unfavorable
positions, and potentially could require the fund to continue to hold a
position until delivery or expiration regardless of changes in its value.
As a result, the fund's access to other assets held to cover its options or
futures positions could also be impaired.
OTC OPTIONS. Unlike exchange-traded options, which are standardized with
respect to the underlying instrument, expiration date, contract size, and
strike price, the terms of over-the-counter (OTC) options (options not
traded on exchanges) generally are established through negotiation with the
other party to the option contract. While this type of arrangement allows
the fund greater flexibility to tailor an option to its needs, OTC options
generally involve greater credit risk than exchange-traded options, which
are guaranteed by the clearing organization of the exchanges where they are
traded.
PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, the fund
obtains the right (but not the obligation) to sell the option's underlying
instrument at a fixed strike price. In return for this right, the fund pays
the current market price for the option (known as the option premium).
Options have various types of underlying instruments, including specific
securities, indices of securities prices, and futures contracts. The fund
may terminate its position in a put option it has purchased by allowing it
to expire or by exercising the option. If the option is allowed to expire,
the fund will lose the entire premium it paid. If the fund exercises the
option, it completes the sale of the underlying instrument at the strike
price. The fund may also terminate a put option position by closing it out
in the secondary market at its current price, if a liquid secondary market
exists.
The buyer of a typical put option can expect to realize a gain if security
prices fall substantially. However, if the underlying instrument's price
does not fall enough to offset the cost of purchasing the option, a put
buyer can expect to suffer a loss (limited to the amount of the premium
paid, plus related transaction costs).
The features of call options are essentially the same as those of put
options, except that the purchaser of a call option obtains the right to
purchase, rather than sell, the underlying instrument at the option's
strike price. A call buyer typically attempts to participate in potential
price increases of the underlying instrument with risk limited to the cost
of the option if security prices fall. At the same time, the buyer can
expect to suffer a loss if security prices do not rise sufficiently to
offset the cost of the option.
WRITING PUT AND CALL OPTIONS. When the fund writes a put option, it takes
the opposite side of the transaction from the option's purchaser. In return
for receipt of the premium, the fund assumes the obligation to pay the
strike price for the option's underlying instrument if the other party to
the option chooses to exercise it. When writing an option on a futures
contract, the fund will be required to make margin payments to an FCM as
described above for futures contracts. The fund may seek to terminate its
position in a put option it writes before exercise by closing out the
option in the secondary market at its current price. If the secondary
market is not liquid for a put option the fund has written, however, the
fund must continue to be prepared to pay the strike price while the option
is outstanding, regardless of price changes, and must continue to set aside
assets to cover its position.
If security prices rise, a put writer would generally expect to profit,
although its gain would be limited to the amount of the premium it
received. If security prices remain the same over time, it is likely that
the writer will also profit, because it should be able to close out the
option at a lower price. If security prices fall, the put writer would
expect to suffer a loss. This loss should be less than the loss from
purchasing the underlying instrument directly, however, because the premium
received for writing the option should mitigate the effects of the decline.
Writing a call option obligates the fund to sell or deliver the option's
underlying instrument, in return for the strike price, upon exercise of the
option. The characteristics of writing call options are similar to those of
writing put options, except that writing calls generally is a profitable
strategy if prices remain the same or fall. Through receipt of the option
premium, a call writer mitigates the effects of a price decline. At the
same time, because a call writer must be prepared to deliver the underlying
instrument in return for the strike price, even if its current value is
greater, a call writer gives up some ability to participate in security
price increases.
ILLIQUID INVESTMENTS are investments that cannot be sold or disposed of in
the ordinary course of business at approximately the prices at which they
are valued. Under the supervision of the Board of Trustees, FMR determines
the liquidity of the fund's investments and, through reports from FMR, the
Board monitors investments in illiquid instruments. In determining the
liquidity of the fund's investments, FMR may consider various factors,
including (1) the frequency of trades and quotations, (2) the number of
dealers and prospective purchasers in the marketplace, (3) dealer
undertakings to make a market, (4) the nature of the security (including
any demand or tender features), and (5) the nature of the marketplace for
trades (including the ability to assign or offset the fund's rights and
obligations relating to the investment).
Investments currently considered by the fund to be illiquid include
repurchase agreements not entitling the holder to payment of principal and
interest within seven days, non-government stripped fixed-rate
mortgage-backed securities, and OTC options. Also, FMR may determine some
government-stripped fixed-rate mortgage-backed securities to be illiquid.
However, with respect to OTC options the fund writes, all or a portion of
the value of the underlying instrument may be illiquid depending on the
assets held to cover the option and the nature and terms of any agreement
the fund may have to close out the option before expiration.
In the absence of market quotations, illiquid investments are priced at
fair value as determined in good faith by a committee appointed by the
Board of Trustees. If through a change in values, net assets, or other
circumstances, the fund were in a position where more than 10% of its net
assets was invested in illiquid securities, it would seek to take
appropriate steps to protect liquidity.
INDEXED SECURITIES. The fund may purchase securities whose prices are
indexed to the prices of other securities, securities indices, or other
financial indicators. Indexed securities typically, but not always, are
debt securities or deposits whose value at maturity or coupon rate is
determined by reference to a specific instrument or statistic. A mortgage
indexed security, for example, could be synthesized to replicate the
performance of mortgage securities and the characteristics of direct
ownership.
The performance of indexed securities depends to a great extent on the
performance of the security or other instrument to which they are indexed,
and may also be influenced by interest rate changes. At the same time,
indexed securities are subject to the credit risks associated with the
issuer of the security, and their values may decline substantially if the
issuer's creditworthiness deteriorates. Indexed securities may be
more volatile than the underlying instruments.
INTERFUND BORROWING AND LENDING PROGRAM. Pursuant to an exemptive
order issued by the SEC, the fund has received permission to lend money to,
and borrow money from, other funds advised by FMR or its affiliates .
Interfund loans and borrowings normally extend overnight, but can
have a maximum duration of seven days. Loans may be called on one day's
notice . A fund will lend through the program only when the returns are
higher than those available from other short-term instruments (such as
repurchase agreements), and will borrow through the program only when the
costs are equal to or lower than the costs of bank loans. A fund may have
to borrow from a bank at a higher interest rate if an interfund loan is
called or not renewed. Any delay in repayment to a lending fund could
result in a lost investment opportunity or additional borrowing costs. The
fund does not currently intend to participate in the program as a lender.
MORTGAGE-BACKED SECURITIES. The fund may purchase mortgage-backed
securities issued by government and non-government entities such as banks,
mortgage lenders, or other financial institutions. A mortgage-backed
security may be an obligation of the issuer backed by a mortgage or pool of
mortgages or a direct interest in an underlying pool of mortgages. Some
mortgage-backed securities, such as collateralized mortgage obligations or
CMOs, make payments of both principal and interest at a variety of
intervals; others make semiannual interest payments at a predetermined rate
and repay principal at maturity (like a typical bond). Mortgage-backed
securities are based on different types of mortgages including those on
commercial real estate or residential properties. Other types of
mortgage-backed securities will likely be developed in the future, and the
fund may invest in them if FMR determines they are consistent with the
fund's investment objective and policies.
The value of mortgage-backed securities may change due to shifts in the
market's perception of issuers. In addition, regulatory or tax changes may
adversely affect the mortgage securities market as a whole. Non-government
mortgage-backed securities may offer higher yields than those issued by
government entities, but also may be subject to greater price changes than
government issues. Mortgage-backed securities are subject to prepayment
risk. Prepayment, which occurs when unscheduled or early payments are made
on the underlying mortgages, may shorten the effective maturities of these
securities and may lower their total returns.
REPURCHASE AGREEMENTS. In a repurchase agreement, the fund purchases a
security and simultaneously commits to sell that security back to the
original seller at an agreed-upon price. The resale price reflects the
purchase price plus an agreed-upon incremental amount which is unrelated to
the coupon rate or maturity of the purchased security. To protect the fund
from the risk that the original seller will not fulfill its obligation, the
securities are held in an account of the fund at a bank, marked-to-market
daily, and maintained at a value at least equal to the sale price plus the
accrued incremental amount. While it does not presently appear possible to
eliminate all risks from these transactions (particularly the possibility
that the value of the underlying security will be less than the resale
price, as well as delays and costs to the fund in connection with
bankruptcy proceedings), it is the fund's current policy to engage in
repurchase agreement transactions with parties whose creditworthiness has
been reviewed and found satisfactory by FMR.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, the fund
sells a portfolio instrument to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase the instrument
at a particular price and time. While a reverse repurchase agreement is
outstanding, the fund will maintain appropriate liquid assets in a
segregated custodial account to cover its obligation under the agreement.
The fund will enter into reverse repurchase agreements only with parties
whose creditworthiness has been found satisfactory by FMR. Such
transactions may increase fluctuations in the market value of the fund's
assets and may be viewed as a form of leverage.
SECURITIES LENDING. The fund may lend securities to parties such as
broker-dealers or institutional investors, including Fidelity Brokerage
Services, Inc. (FBSI). FBSI is a member of the New York Stock Exchange
(NYSE) and a subsidiary of FMR Corp.
Securities lending allows the fund to retain ownership of the securities
loaned and, at the same time, to earn additional income. Since there may be
delays in the recovery of loaned securities, or even a loss of rights in
collateral supplied should the borrower fail financially, loans will be
made only to parties deemed by FMR to be of good standing. Furthermore,
they will only be made if, in FMR's judgment, the consideration to be
earned from such loans would justify the risk.
FMR understands that it is the current view of the SEC Staff that
a fund may engage in loan transactions only under the following
conditions: (1) the fund must receive 100% collateral in the form of cash
or cash equivalents, (e.g., U.S. Treasury bills or notes) from the
borrower; (2) the borrower must increase the collateral whenever the market
value of the securities loaned (determined on a daily basis) rises above
the value of the collateral; (3) after giving notice, the fund must
be able to terminate the loan at any time; (4) the fund must receive
reasonable interest on the loan or at a flat fee from the borrower, as well
as amounts equivalent to any dividends, interest , or other
distributions on the securities loaned and any increase in market value;
(5) the fund may pay only reasonable custodian fees in connection with the
loan; and (6) the Board of Trustees must be able to vote proxies on the
securities loaned, either by terminating the loan or by entering into an
alternative arrangement with the borrower.
Cash received through loan transactions may be invested in any security in
which the fund is authorized to invest. Investing this cash subjects that
investment, as well as the security loaned, to market forces (i.e., capital
appreciation or depreciation).
STRIPPED GOVERNMENT SECURITIES. Stripped securities are created by
separating the income and principal components of a debt instrument and
selling them separately. U.S. Treasury STRIPS (Separate Trading of
Registered Interest and Principal of Securities) are created when the
coupon payments and the principal payment are stripped from an outstanding
Treasury bond by the Federal Reserve Bank. Bonds issued by the government
agencies also may be stripped in this fashion.
STRIPPED MORTGAGE-BACKED SECURITIES are created when a U.S. Government
agency or a financial institution separates the interest and principal
components of a mortgage-backed security and sells them as individual
securities. The holder of the "principal-only" security (PO) receives the
principal payments made by the underlying mortgage-backed security, while
the holder of the "interest-only" security (IO) receives interest payments
from the same underlying security.
The prices of stripped mortgage-backed securities may be particularly
affected by changes in interest rates. As interest rates fall, prepayment
rates tend to increase, which tends to reduce prices of IOs and increase
prices of POs. Rising interest rates can have the opposite effect.
SWAP AGREEMENTS. Swap agreements can be individually negotiated and
structured to include exposure to a variety of investments or market
factors. Depending on their structure, swap agreements may increase or
decrease the fund's exposure to long- or short-term interest rates,
mortgage securities, corporate borrowing rates, or other factors such as
security prices or inflation rates. Swap agreements can take many different
forms and are known by a variety of names. The fund is not limited to any
particular form of swap agreement if FMR determines it is consistent with
the fund's investment objective and policies.
In a typical cap or floor agreement, one party agrees to make payments only
under specified circumstances, usually in return for payment of a fee by
the other party. For example, the buyer of an interest rate cap obtains the
right to receive payments to the extent that a specified interest rate
exceeds an agreed-upon level, while the seller of an interest rate floor is
obligated to make payments to the extent that a specified interest rate
falls below an agreed-upon level. An interest rate collar combines
elements of buying a cap and selling a floor.
Swap agreements will tend to shift the fund's investment exposure from one
type of investment to another. For example, if the fund agreed to pay fixed
rates in exchange for floating rates while holding fixed-rate bonds, the
swap would tend to decrease the fund's exposure to long-term interest
rates. Caps and floors have an effect similar to buying or writing options.
Depending on how they are used, swap agreements may increase or decrease
the overall volatility of the fund's investments and its share price
and yield.
The most significant factor in the performance of swap agreements is the
change in the specific interest rate or other factors that determine the
amounts of payments due to and from the fund. If a swap agreement calls for
payments by the fund, the fund must be prepared to make such payments when
due. In addition, if the counterparty's creditworthiness declined, the
value of a swap agreement would be likely to decline, potentially resulting
in losses. The fund expects to be able to eliminate its exposure under swap
agreements either by assignment or other disposition, or by entering into
an offsetting swap agreement with the same party or a similarly
creditworthy party.
The fund will maintain appropriate liquid assets in a segregated custodial
account to cover its current obligations under swap agreements. If the fund
enters into a swap agreement on a net basis, it will segregate assets with
a daily value at least equal to the excess, if any, of the fund's accrued
obligations under the swap agreement over the accrued amount the fund is
entitled to receive under the agreement. If the fund enters into a swap
agreement on other than a net basis, it will segregate assets with a value
equal to the full amount of the fund's accrued obligations under the
agreement.
VARIABLE OR FLOATING RATE OBLIGATIONS bear variable or floating interest
rates and carry rights that permit holders to demand payment of the unpaid
principal balance plus accrued interest from the issuers or certain
financial intermediaries. Floating rate instruments have interest rates
that change whenever there is a change in a designated base rate while
variable rate instruments provide for a specified periodic adjustment in
the interest rate. These formulas are designed to result in a market value
for the instrument that approximates its par value.
ZERO COUPON BONDS. Zero coupon bonds do not make interest payments;
instead, they are sold at a deep discount from their face value and are
redeemed at face value when they mature. Because zero coupon bonds do not
pay current income, their prices can be very volatile when interest rates
change. In calculating its dividends, the fund takes into account as income
a portion of the difference between a zero coupon bond's purchase price and
its face value.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of the fund by FMR pursuant to authority contained in the management
contract. FMR is also responsible for the placement of transaction orders
for other investment companies and accounts for which it or its affiliates
act as investment adviser. In selecting broker-dealers, subject to
applicable limitations of the federal securities laws, FMR considers
various relevant factors, including, but not limited to: the size and type
of the transaction; the nature and character of the markets for the
security to be purchased or sold; the execution efficiency, settlement
capability, and financial condition of the broker-dealer firm; the
broker-dealer's execution services rendered on a continuing basis; and the
reasonableness of any commissions.
The fund may execute portfolio transactions with broker-dealers who provide
research and execution services to the fund or other accounts over which
FMR or its affiliates exercise investment discretion. Such services may
include advice concerning the value of securities; the advisability of
investing in, purchasing, or selling securities; and the
availability of securities or the purchasers or sellers of securities .
In addition, such broker-dealers may furnish analyses and reports
concerning issuers, industries, securities, economic factors and trends,
portfolio strategy, and performance of accounts; ef fect securities
transactions , and perform functions incidental thereto (such as
clearance and settlement). The selection of such broker-dealers generally
is made by FMR (to the extent possibl e consistent with execution
considerations) based upon the quality of research and execution services
provided.
The receipt of research from broker-dealers that execute transactions on
behalf of the fund may be useful to FMR in rendering investment management
services to the fund or its other clients, and conversely, such research
provided by broker-dealers who have executed transaction orders on behalf
of other FMR clients may be useful to FMR in carrying out its obligations
to the fund. The receipt of such research has not reduced FMR's normal
independent research activities; however, it enables FMR to avoid the
additional expenses that could be incurred if FMR tried to develop
comparable information through its own efforts.
Subject to applicable limitations to the federal securities laws,
broker-dealers may receive commissions for agency transactions that are in
excess of the amount of commissions charged by other broker-dealers in
recognition of their research and execution services. In order to cause the
fund to pay such higher commissions, FMR must determine in good faith that
such commissions are reasonable in relation to the value of the brokerage
and research services provided by such executing broker-dealers, viewed in
terms of a particular transaction or FMR's overall responsibilities to the
fund and its other clients. In reaching this determination, FMR will not
attempt to place a specific dollar value on the brokerage and research
services provided, or to determine what portion of the compensation should
be related to those services.
FMR is authorized to use research services provided by and to place
portfolio transactions with brokerage firms that have provided assistance
in the distribution of shares of the fund or shares of other Fidelity funds
to the extent permitted by law. FMR may use research services provided by
and place agency transactions with FBSI and Fidelity Brokerage Services
(FBS), subsidiaries of FMR Corp., if the commissions are fair,
reasonable, and comparable to commissions charged by non-affiliated,
qualified brokerage firms for similar services. From September 1992
through December 1994, FBS operated under the name Fidelity Brokerage
Services Limited, Inc. (FBSL). As of January 1995, FBSL was converted to an
unlimited liability company and assumed the name FBS. Prior to September 4,
1992, FBSL operated under the name Fidelity Portfolio Services, Ltd. (FPSL)
as a wholly owned subsidiary of Fidelity International Limited (FIL).
Edward C. Johnson 3d is Chairman of FIL. Mr. Johnson 3d, Johnson family
members, and various trusts for the benefit of the Johnson family own,
directly or indirectly, more than 25% of the voting common stock of
FIL.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members of
national securities exchanges from executing exchange transactions for
accounts which they or their affiliates manage, unless certain requirements
are satisfied. Pursuant to such requirements, the Board of Trustees has
authorized FBSI to execute portfolio transactions on national securities
exchanges in accordance with approved procedures and applicable SEC rules.
The Trustees periodically review FMR's performance of its responsibilities
in connection with the placement of portfolio transactions on behalf of the
fund and review the commissions paid by the fund over representative
periods of time to determine if they are reasonable in relation to the
benefits to the fund.
For the fiscal years ended November 30, 199 5 , and 199 4 , the
fund's portfolio turnover rates were ___ % and 303 %,
respectively. Because a high turnover rate increases transaction costs and
may increase taxable gains, FMR carefully weighs the anticipated benefits
of short-term investing against these consequences.
For fiscal years 199 5 , 199 4 , and 199 3 , the fund paid
no brokerage commissions.
From time to time the Trustees will review whether the recapture for the
benefit of the fund of some portion of the brokerage commissions or similar
fees paid by the fund on portfolio transactions is legally permissible and
advisable. The fund seeks to recapture soliciting broker-dealer fees on the
tender of portfolio securities, but at present no other recapture
arrangements are in effect. The Trustees intend to continue to review
whether recapture opportunities are available and are legally permissible
and, if so, to determine in the exercise of their business judgment whether
it would be advisable for the fund to seek such recapture.
Although the Trustees and officers of the fund are substantially the same
as those of other funds managed by FMR, investment decisions for the fund
are made independently from those of other funds managed by FMR or accounts
managed by FMR affiliates. It sometimes happens that the same security is
held in the portfolio of more than one of these funds or accounts.
Simultaneous transactions are inevitable when several funds and accounts
are managed by the same investment adviser, particularly when the same
security is suitable for the investment objective of more than one fund or
account.
When two or more funds are simultaneously engaged in the purchase or sale
of the same security, the prices and amounts are allocated in accordance
with procedures believed to be appropriate and equitable for each fund. In
some cases this system could have a detrimental effect on the price or
value of the security as far as the fund is concerned. In other cases,
however, the ability of the fund to participate in volume transactions will
produce better executions and prices for the fund. It is the current
opinion of the Trustees that the desirability of retaining FMR as
investment adviser to the fund outweighs any disadvantages that may be said
to exist from exposure to simultaneous transactions.
VALUATION
Fidelity Service Company (FSC) normally determines the fund's net asset
value per share (NAV) as of the close of the NYSE (normally 4:00 p.m.
Eastern time). The valuation of portfolio securities is determined as of
this time for the purpose of computing the fund's NAV.
Portfolio securities are valued by various methods depending on the primary
market or exchange on which they trade. Fixed-income securities and other
assets for which market quotations are readily available may be valued at
market values determined by such securities' most recent bid price (sales
prices if the principal market is an exchange) in the principal market in
which they normally are traded, as furnished by recognized dealers in such
securities or assets.
Fixed-income securities may also be valued on the basis of information
furnished by a pricing service that uses a valuation matrix which
incorporates both dealer-supplied valuations and electronic data processing
techniques. Use of pricing services has been approved by the Board of
Trustees. A number of pricing services are available, and the Trustees, on
the basis of an evaluation of these services, may use various pricing
services or discontinue the use of any pricing service.
Short-term securities are valued either at amortized cost or at original
cost plus accrued interest, both of which approximate current value.
Futures contracts and options are valued on the basis of market quotations,
if available.
Securities and other assets for which there is no readily available market
value are valued in good faith by a committee appointed by the Board of
Trustees. The procedures set forth above need not be used to determine the
value of the securities owned by the fund if, in the opinion of a committee
appointed by the Board of Trustees, some other method would more accurately
reflect the fair market value of such securities.
PERFORMANCE
The fund may quote performance in various ways. All performance information
supplied by the fund in advertising is historical and is not intended to
indicate future returns. The fund's share price, yield, and total return
fluctuate in response to market conditions and other factors, and the value
of the shares when redeemed may be more or less than their original cost.
YIELD CALCULATIONS. Yields for the fund are computed by dividing the fund's
interest income for a given 30-day or one-month period, net of expenses, by
the average number of shares entitled to receive distributions during the
period, dividing this figure by the fund's NAV at the end of the
period, and annualizing the result (assuming compounding of income) in
order to arrive at an annual percentage rate. Income is calculated for
purposes of yield quotations in accordance with standardized methods
applicable to all stock and bond funds. In general, interest income is
reduced with respect to bonds trading at a premium over their par value by
subtracting a portion of the premium from income on a daily basis, and is
increased with respect to bonds trading at a discount by adding a portion
of the discount to daily income. Capital gains and losses generally are
excluded from the calculation.
Income calculated for the purposes of calculating the fund's yield
differs from income as determined for other accounting purposes. Because of
the different accounting methods used, and because of the compounding of
income assumed in yield calculations, the fund's yield may not equal
its distribution rate, the income paid to your account, or the income
reported in the fund's financial statements.
Yield information may be useful in reviewing the fund's performance
and in providing a basis for comparison with other investment alternatives.
However, the fund's yield fluctuates, unlike investments that pay a
fixed interest rate over a stated period of time. When comparing investment
alternatives, investors should also note the quality and maturity of the
portfolio securities respective investment companies they have chosen to
consider.
Investors should recognize that in periods of declining interest rates
the fund 's yield will tend to be somewhat higher than prevailing
market rates, and in periods of rising interest rates the fund 's
yields will tend to be somewhat lower. Also, when interest rates are
falling, the inflow of net new money to the fund from the continuous sale
of its shares will likely be invested in instruments producing lower yields
than the balance of the fund's holdings, thereby reducing the current
yield. In periods of rising interest rates, the opposite can be expected to
occur.
TOTAL RETURN CALCULATIONS. Total returns quoted in advertising reflect all
aspects of the fund's return, including the effect of reinvesting
dividends and capital gain distributions, and any change in the
fund's NAV over a stated period. Average annual total returns are
calculated by determining the growth or decline in value of a hypothetical
historical investment in the fund over a stated period, and then
calculating the annually compounded percentage rate that would have
produced the same result if the rate of growth or decline in value had been
constant over the period. For example, a cumulative total return of
100% over ten years would produce an average annual total return of
7.18%, which is the steady annual rate of return that would equal
100% growth on a compounded basis in ten years. While average annual
total returns are a convenient means of comparing investment
alternatives, investors should realize that the fund's performance
is not constant over time, but changes from year to year, and that average
annual total returns represent averaged figures as opposed to the
actual year-to-year performance of the fund .
In addition to average annual total returns, the fund may
quote unaveraged or cumulative total returns reflecting the simple change
in value of an investment over a stated period. Average annual and
cumulative total returns may be quoted as a percentage or as a dollar
amount, and may be calculated for a single investment, a series of
investments, or a series of redemptions, over any time period. Total
returns may be broken down into their components of income and capital
(including capital gains and changes in share price) in order to illustrate
the relationship of these factors and their contributions to total return.
Total returns may be quoted on a before-tax or after-tax basis. Total
returns, yields, and other performance information may be quoted
numerically or in a table, graph, or similar illustration.
NET ASSET VALUE. Charts and graphs using the fund's NAVs , adjusted
NAV s, and benchmark indices may be used to exhibit performance. An
adjusted NAV includes any distributions paid by the fund and
reflects all elements of its return. Unless otherwise indicated, the
fund's adjusted NAVs are not adjusted for sales charges, if any.
HISTORICAL FUND RESULTS The following tables show the fund's yields and
total returns for the periods ended November 30, 1995.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Average Annual Total Returns (%) Cumulative Total Returns (%)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
One Five Ten Years/ One Five Ten Years/
Year Years Life of Year Years Life of
Fund * Fund *
Institutional Short-Intermediate
Government Portfolio*
</TABLE>
* From November 10, 1986 (commencement of operations).
The following table shows the income and capital elements of the fund's
cumulative total return , The table compares the fund's
return to the record of the Standard and Poor's Composite Index of
500 Stocks (S&P 500(registered trademark) ), the Dow Jones Industrial
Average (DJIA), and the cost of living (measured by the Consumer Price
Index , CPI) over the same period. The CPI information is as of the
month end closest to the initial investment date for the fund. The S&P 500
and DJIA comparisons are provided to show the fund's total
return compared to the record of a broad average of common stocks and a
narrower set of stocks of major industrial companies, respectively, over
the same period. Of course, since the fund invests in fixed-income
securities, common stocks represent a different type of investment from the
fund. Common stocks generally offer greater growth potential than the
fund, but generally experience greater price volatility, which means
greater potential for loss. In addition, common stocks generally provide
lower income than a fixed-income investment such as the fund. Figures for
the S&P 500 and DJIA are based on the prices of unmanaged groups of stocks
and, unlike the fund 's returns, do not include the effect of paying
brokerage commissions or other costs of investing.
During the period from November 10, 1986 (commencement of operations) to
November 30, 199 5 , a hypothetical $10,000 investment in
Institutional Short-Intermediate Government Portfolio would have grown to
$ ______ , assuming all distributions were reinvested. This was a
period of fluctuating interest rates and bond prices and the figures below
should not be considered representative of the dividend income or capital
gain or loss that could be realized from an investment in the fund today.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Institutional Short-Intermediate Government Port folio Indices
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Year ended Value of Value of Value of Total S&P 500 DJIA Cost of
November 30 Initial Reinvested Reinvested Value Living**
$10,000 Dividend Capital Gain
Investment Distributions Distributions
1986* $ 10,010 $ 39 $ 0 $ 10,049 $ 10,160 $ 10,168 $ 10,009
1987 9,670 877 0 10,547 9,685 10,040 10,462
1988 9,440 1,867 0 11,307 11,944 12,001 10,907
1989 9,520 2,987 0 12,507 15,629 15,939 11,414
1990 9,480 4,095 0 13,575 15,084 15,673 12,131
1991 9,770 5,341 0 15,111 18,154 18,331 12,493
1992 9,850 6,427 0 16,277 21,513 21,557 12,874
1993 9,890 7,450 0 17,340 23,686 24,726 13,219
1994 9,210 7,992 16 17,218 23,933 25,791 13,590
1995
</TABLE>
* From November 10, 1986 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 made on November
10, 1986, the net amount invested in fund shares was $10,000. The
cost of the initial investment ($10,000), together with the aggregate cost
of reinvested dividends and capital gain distributions for the period
covered (their cash value at the time they were reinvested), amounted to
$ ______ . If distributions had not been reinvested, the amount of
distributions earned from the fund over time would have been
smaller, and the cash payments for the period would have amounted to
$ _____ for dividends and $ __ for capital gains distributions.
Tax consequences of different investments have not been factored into the
above figures.
PERFORMANCE COMPARISONS. The fund's p erformance may be compared to
the performance of other mutual funds in general, or to the performance of
particular types of mutual funds. These comparisons may be expressed as
mutual fund rankings prepared by Lipper Analytical Services, Inc. (Lipper),
an independent service located in Summit, New Jersey that monitors the
performance of mutual funds. Lipper generally ranks funds on the basis of
total return, assuming reinvestment of distributions, but does not take
sales charges or redemption fees into consideration, and is prepared
without regard to tax consequences. Lipper may also rank funds based on
yield. In addition to the mutual fund rankings, the fund's
performance may be compared to stock, bond, and money market mutual
fund performance indices prepared by Lipper or other organizations.
When comparing these indices, it is important to remember the risk and
return characteristics of each type of investment. For example, while stock
mutual funds may offer higher potential returns, they also carry the
highest degree of share price volatility. Likewise, money market funds may
offer greater stability of principal, but generally do not offer the higher
potential returns available from stock mutual funds.
From time to time, the fund's performance may also be
compared to other mutual funds tracked by financial or business
publications and periodicals. For example, the fund may quote
Morningstar, Inc. in its advertising materials. Morningstar Inc. is a
mutual fund rating service that rates mutual funds on the basis of
risk-adjusted performance. Rankings that compare the performance of
Fidelity funds to one another in appropriate categories over specific
periods of time may also be quoted in advertising.
The fund may be compared in advertising to Certificates of Deposit
(CDs) or other investments issued by banks or other depository
institutions. Mutual funds differ from bank investments in several
respects. For example, the fund may offer greater liquidity or higher
potential returns than CDs, the fund does not guarantee your principal or
your return, and fund shares are not FDIC insured.
Fidelity may provide information designed to help individuals understand
their investment goals and explore various financial strategies. Such
information may include information about current economic, market, and
political conditions; materials that describe general principles of
investing, such as asset allocation, diversification, risk
tolerance , and goal setting; questionnaires designed to help create
a personal financial profile; worksheets used to project savings
needs based on assumed rates of inflation and hypothetical rates of return;
and action plans offering investment alternatives. Materials may also
include discussions of Fidelity's asset allocation funds and other Fidelity
funds, products, and services.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical
returns of the capital markets in the United States, including common
stocks, small capitalization stocks, long-term corporate bonds,
intermediate-term government bonds, long-term government bonds, Treasury
bills, the U.S. rate of inflation (based on the CPI), and combinations of
various capital markets. The performance of these capital markets is based
on the returns of different indices.
Fidelity funds may use the performance of these capital markets in order to
demonstrate general risk-versus-reward investment scenarios. Performance
comparisons may also include the value of a hypothetical investment in any
of these capital markets. The risks associated with the security types in
any capital market may or may not correspond directly to those of the
funds. Ibbotson calculates total returns in the same method as the
funds . The fund may also compare p erformance to that of
other compilations or indices that may be developed and made available
in the future.
T he fund may compare its performance or the performance of
securities in which it may invest to averages published by IBC USA
(Publications), Inc. of Ashland, Massachusetts. These averages assume
reinvestment of distributions. IBC/Donoghue's MONEY FUND
AVERAGES(trademark)/_________ which is reported in the MONEY FUND
REPORT(registered trademark), covers over ___ ______ money market funds.
The BOND FUND REPORT AVERAGES(trademark)/taxable bond funds, which is
reported in the BOND FUND REPORT(registered trademark), covers over
____ taxable bond funds. When evaluating comparisons to money market
funds, investors should consider the relevant differences in investment
objectives and policies. Specifically, money market funds invest in
short-term, high-quality instruments and seek to maintain a stable $1.00
share price. The fund, however, invests in longer-term instruments and its
share price changes daily in response to a variety of factors.
In advertising materials, Fidelity may reference or discuss its products
and services, which may include other Fidelity funds; retirement investing;
brokerage products and services; model portfolios or allocations;
sa ving for college or other goals; charitable giving; and the Fidelity
credit card. In addition, Fidelity may quote or reprint financial or
business publications and periodicals, as they relate to current economic
and political conditions, fund management, portfolio composition,
investment philosophy, investment techniques, the desirability of owning a
particular mutual fund, and Fidelity services and products. Fidelity may
also reprint, and use as advertising and sales literature, articles from
Fidelity Focus, a quarterly magazine provided free of charge to Fidelity
fund shareholders.
The fund may present its fund number, Quotron(trademark) number, and CUSIP
number, and discuss or quote its current portfolio manager.
VOLATILITY. The fund may quote v arious measures of volatility and
benchmark correlation in advertising. In addition, the fund may compare
these measures to those of other funds. Measures of volatility seek to
compare the fund's historical share price fluctuations or total
returns to those of a benchmark. Measures of benchmark correlation indicate
how valid a comparative benchmark may be. All measures of volatility and
correlation are calculated using averages of historical data. In
advertising, the fund may also discuss or illustrate examples of interest
rate sensitivity.
MOMENTUM INDICATORS indicate the fund 's price movements over
specific periods of time. Each point on the momentum indicator represents
the fund 's percentage change in price movements over that period.
The fund may advertise examples of the effects of periodic
investment plans, including the principle of dollar cost averaging. In such
a program, an investor invests a fixed dollar amount in a fund at
periodic intervals, thereby purchasing fewer shares when prices are high
and more shares when prices are low. While such a strategy does not assure
a profit or guard against loss in a declining market, the investor's
average cost per share can be lower than if fixed numbers of shares are
purchased at the same intervals. In evaluating such a plan, investors
should consider their willingness to continue purchasing shares
through periods of low price levels.
T he fund may be available for purchase through retirement plans or
other programs offering deferral of, or exemption from, income taxes, which
may produce superior after-tax returns over time. For example, a $1,000
investment earning a taxable return of 10% annually would have an after-tax
value of $1,949 after ten years, assuming tax was deducted from the return
each year at a 31% rate. An equivalent tax-deferred investment would have
an after-tax value of $2,100 after ten years, assuming tax was deducted at
a 31% rate from the tax-deferred earnings at the end of the ten-year
period.
As of November 30, 199 5 , FMR advised over $ __ billion in
tax-free fund assets, $ __ billion in money market fund assets,
$ ___ billion in equity fund assets, $ __ billion in
international fund assets, and $ __ billion in Spartan fund assets.
The fund may reference the growth and variety of money market mutual funds
and the adviser 's innovation and participation in the industry. The
equity funds under management figure represents the largest amount of
equity fund assets under management by a mutual fund investment adviser in
the United States, making FMR America's leading equity (stock) fund
manager. FMR, its subsidiaries, and affiliates maintain a worldwide
information and communications network for the purpose of researching and
managing investments abroad .
In addition to performance rankings, the fund may compare its total
expense ration to the average total expense ratio of similar funds tracked
by Lipper. The fund 's total expense ratio is a significant factor in
comparing bond and money market investments because of its effect on yield.
ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION
The fund is open for business and its NAV is calculated each day the NYSE
is open for trading. The NYSE has designated the following holiday closings
for 199 6 : New Year's Day, Washington's Birthday, Good Friday,
Memorial Day, Independence Day , Labor Day, Thanksgiving Day, and
Christmas Day. Although FMR expects the same holiday schedule to be
observed in the future, the NYSE may modify its holiday schedule at any
time.
FSC normally determines the fund's NAV as of the close of the NYSE
(normally 4:00 p.m. Eastern time). However, NAV may be calculated earlier
if trading on the NYSE is restricted or as permitted by the SEC. To the
extent that portfolio securities are traded in other markets on days when
the NYSE is closed, the fund 's NAV may be affected on days when
investors do not have access to the fund to purchase or redeem shares. In
addition, trading in some of the fund's portfolio securities may not occur
on days when the fund is open for business.
If the Trustees determine th at existing conditions make cash
payments undesirable, redemption payments may be made in whole or in part
in securities or other property, valued for this purpose as they are valued
in computing the fund 's NAV. Shareholders receiving securities or
other property on redemption may realize a gain or loss for tax purposes,
and will incur any costs of sale, as well as the associated inconveniences.
Pursuant to Rule 11a-3 under the 1940 Act, the fund is required to give
shareholders at least 60 days' notice prior to terminating or modifying the
fund's exchange privilege. Under the Rule, the 60 - day notification
requirement may be waived if (i) the only effect of a modification would be
to reduce or eliminate an administrative fee, redemption fee, or deferred
sales charge ordinarily payable at the time of an exchange, or (ii)
the fund suspends the redemption of shares to be exchanged as permitted
under the 1940 Act or the rules and regulations thereunder, or the fund to
be acquired suspends the sale of its shares because it is unable to invest
amounts effectively in accordance with its investment objective and
policies.
In the prospectus, the fund has notified shareholders that it reserves the
right at any time, without prior notice, to refuse exchange purchases by
any person or group if, in FMR's judgment, the fund would be unable to
invest effectively in accordance with its investment objective and
policies, or would otherwise potentially be adversely affected.
DISTRIBUTIONS AND TAXES
DISTRIBUTIONS. If you request to have distributions mailed to you and the
U.S. Postal Service cannot deliver your checks, or if your checks remain
uncashed for six months, Fidelity may reinvest your distributions at the
then-current NAV. All subsequent distributions will then be reinvested
until you provide Fidelity with alternate instructions.
DIVIDENDS. Because the fund's income is primarily derived from interest,
dividends from the fund generally will not qualify for the
dividends-received deduction available to corporate shareholders.
Short-term capital gains are distributed as dividend income, but do not
qualify for the dividends-received deduction. A portion of the fund's
dividends derived from certain U.S. G overnment obligations may be
exempt from state and local taxation. The fund will send each shareholder a
notice in January describing the tax status of dividend and capital gain
distributions for the prior year.
CAPITAL GAIN DISTRIBUTIONS. Long-term capital gains earned by the fund on
the sale of securities and distributed to shareholders are federally
taxable as long-term capital gains, regardless of the length of time
shareholders have held their shares. If a shareholder receives a long-term
capital gain distribution on shares of the fund, and such shares are held
six months or less and are sold at a loss, the portion of the loss equal to
the amount of the long-term capital gain distribution will be considered a
long-term loss for tax purposes. Short-term capital gains distributed by
the fund are taxable to shareholders as dividends, not as capital
gains.
STATE AND LOCAL TAX ISSUES. For mutual funds organized as business trusts,
state law provides for a pass-through of the state and local income tax
exemption afforded to direct owners of U.S. G overnment securities.
Some states limit this to mutual funds that invest a certain amount in U.S.
G overnment securities, and some types of securities, such as
repurchase agreements and some agency backed securities, may not qualify
for this benefit. The tax treatment of your dividend distributions from the
fund will be the same as if you directly owned your proportionate share of
the U.S. G overnment securities in the fund's portfolio. Because the
income earned on most U.S. G overnment securities in which the fund
invests is exempt from state and local income taxes, the portion of your
dividends from the fund attributable to these securities will also be free
from income taxes. The exemption from state and local income taxation does
not preclude states from assessing other taxes on the ownership of U.S.
G overnment securities . In a number of states, corporate franchise
(income tax) laws do not exempt interest earned on U.S. Government
securities whether such securities are held directly or through a fund.
TAX STATUS OF THE FUND. The fund intends to qualify each year as a
"regulated investment company" for tax purposes so that it will not be
liable for federal tax on income and capital gains distributed to
shareholders. In order to qualify as a regulated investment company and
avoid being subject to federal income or excise taxes at the fund
level, the fund intends to distribute substantially all of its net
investment income and net realized capital gains within each calendar year
as well as on a fiscal year basis. The fund intends to comply with other
tax rules applicable to regulated investment companies, including a
requirement that capital gains from the sale of securities held less than
three months constitute less than 30% of the fund's gross income for each
fiscal year. Gains from some futures contracts and options are included in
this 30% calculation, which may limit the fund's investments in such
instruments.
The fund is treated as a separate entity from the other funds of Fidelity
Advisor Series IV for tax purposes.
OTHER TAX INFORMATION. The information above is only a summary of some of
the tax consequences generally affecting the fund and its shareholders, and
no attempt has been made to discuss individual tax consequences. In
addition to federal income taxes, shareholders may be subject to state and
local taxes on fund distributions, and shares may be subject to state and
local personal property taxes. Investors should consult their tax advisers
to determine whether the fund is suitable to their particular tax
situation.
FMR
All of the stock of FMR is owned by FMR Corp., its parent organized in
1972. The voting common stock of FMR Corp. is divided into two classes.
Class B is held predominantly by members of the Edward C. Johnson 3d family
and is entitled to 49% of the vote on any matter acted upon by the voting
common stock. Class A is held predominantly by non-Johnson family member
employees of FMR Corp. and its affiliates and is entitled to 51% of the
vote on any such matter. The Johnson family group and all other Class B
shareholders have entered into a shareholders' voting agreement under which
all Class B shares will be voted in accordance with the majority vote of
Class B shares. Under the 1940 Act, control of a company is presumed where
one individual or group of individuals owns more than 25% of the voting
stock of that company. Therefore, through their ownership of voting common
stock and the execution of the shareholders' voting agreement, members of
the Johnson family may be deemed, under the 1940 Act, to form a controlling
group with respect to FMR Corp.
At present, the principal operating activities of FMR Corp. are those
conducted by three of its divisions as follows: FSC, which is the transfer
and shareholder servicing agent for certain of the funds advised by FMR;
FIIOC , which performs shareholder servicing functions for
institutional customers and funds sold through intermediaries; and Fidelity
Investments Retail Marketing Company, which provides marketing services to
various companies within the Fidelity organization.
Fidelity investment personnel may invest in securities for their own
account pursuant to a code of ethics that sets forth all employees'
fiduciary responsibilities regarding the funds, establishes procedures for
personal investing and restricts certain transactions. For example, all
personal trades in most securities require pre-clearance, and participation
in initial public offerings is prohibited. In addition, restrictions on the
timing of personal investing in relation to trades by Fidelity funds and on
short-term trading have been adopted.
TRUSTEES AND OFFICERS
The Trustees and executive officers of the trust are listed below.
Except as indicated, each individual has held the office shown or other
offices in the same company for the last five years. All persons named as
Trustees also serve in similar capacities for other funds advised by FMR.
The business address of each Trustee and officer who is an "interested
person" (as defined in the 1940 Act) is 82 Devonshire Street, Boston,
Massachusetts 02109, which is also the address of FMR. The business address
of all the other Trustees is Fidelity Investments, P.O. Box 9235, Boston,
Massachusetts 02205-9235. Those Trustees who are "interested persons" by
virtue of their affiliation with either the trust or FMR are indicated by
an asterisk (*).
*EDWARD C. JOHNSON 3d (__), Trustee and President, is Chairman, Chief
Executive Officer and a Director of FMR Corp.; a Director and Chairman of
the Board and of the Executive Committee of FMR; Chairman and a Director of
FMR Texas Inc., Fidelity Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.
*J. GARY BURKHEAD (__), Trustee and Senior Vice President, is President of
FMR; and President and a Director of FMR Texas Inc., Fidelity Management &
Research (U.K.) Inc., and Fidelity Management & Research (Far East) Inc.
RALPH F. COX (__), Trustee (1991), is a consultant to Western Mining
Corporation (1994). Prior to February 1994, he was President of Greenhill
Petroleum Corporation (petroleum exploration and production, 1990). Until
March 1990, Mr. Cox was President and Chief Operating Officer of Union
Pacific Resources Company (exploration and production). He is a Director
of Sanifill Corporation (non-hazardous waste, 1993) and CH2M Hill Companies
(engineering). In addition, he served on the Board of Directors of the
Norton Company (manufacturer of industrial devices, 1983-1990) and
continues to serve on the Board of Directors of the Texas State Chamber of
Commerce, and is a member of advisory boards of Texas A&M University and
the University of Texas at Austin.
PHYLLIS BURKE DAVIS (__), Trustee (1992). Prior to her retirement in
September 1991, Mrs. Davis was the Senior Vice President of Corporate
Affairs of Avon Products, Inc. She is currently a Director of BellSouth
Corporation (telecommunications), Eaton Corporation (manufacturing, 1991),
and the TJX Companies, Inc. (retail stores, 1990), and she previously
served as a Director of Hallmark Cards, Inc. (1985-1991) and Nabisco
Brands, Inc. In addition, she is a member of the President's Advisory
Council of The University of Vermont School of Business Administration.
RICHARD J. FLYNN (__), Trustee, is a financial consultant. Prior to
September 1986, Mr. Flynn was Vice Chairman and a Director of the Norton
Company (manufacturer of industrial devices). He is currently a Trustee of
College of the Holy Cross and Old Sturbridge Village, Inc, and he
previously served as a Director of Mechanics Bank (1971-1995).
E. BRADLEY JONES (__), Trustee (1990). Prior to his retirement in 1984,
Mr. Jones was Chairman and Chief Executive Officer of LTV Steel Company.
He is a Director of TRW Inc. (original equipment and replacement products),
Cleveland-Cliffs Inc (mining), Consolidated Rail Corporation, Birmingham
Steel Corporation, and RPM, Inc. (manufacturer of chemical products, 1990),
and he previously served as a Director of NACCO Industries, Inc. (mining
and marketing, 1985-1995) and Hyster-Yale Materials Handling,
Inc.(1985-1995). In addition, he serves as a Trustee of First Union Real
Estate Investments, a Trustee and member of the Executive Committee of the
Cleveland Clinic Foundation, a Trustee and member of the Executive
Committee of University School (Cleveland), and a Trustee of Cleveland
Clinic Florida.
DONALD J. KIRK (__), Trustee, is Executive-in-Residence (1995) at Columbia
University Graduate School of Business and a financial consultant. From
1987 to January 1995, Mr. Kirk was a Professor at Columbia University
Graduate School of Business. Prior to 1987, he was Chairman of the
Financial Accounting Standards Board. Mr. Kirk is a Director of General Re
Corporation (reinsurance), and he previously served as a Director of
Valuation Research Corp. (appraisals and valuations, 1993-1995). In
addition, he serves as Vice Chairman of the Board of Directors of the
National Arts Stabilization Fund, Vice Chairman of the Board of Trustees of
the Greenwich Hospital Association, and as a Member of the Public Oversight
Board of the American Institute of Certified Public Accountants' SEC
Practice Section (1995).
*PETER S. LYNCH (__), Trustee (1990) is Vice Chairman and Director of FMR
(1992). Prior to May 31, 1990, he was a Director of FMR and Executive Vice
President of FMR (a position he held until March 31, 1991); Vice President
of Fidelity Magellan Fund and FMR Growth Group Leader; and Managing
Director of FMR Corp. Mr. Lynch was also Vice President of Fidelity
Investments Corporate Services (1991-1992). He is a Director of W.R. Grace
& Co. (chemicals) and Morrison Knudsen Corporation (engineering and
construction). In addition, he serves as a Trustee of Boston College,
Massachusetts Eye & Ear Infirmary, Historic Deerfield and Society for the
Preservation of New England Antiquities, and as an Overseer of the Museum
of Fine Arts of Boston (1990).
GERALD C. McDONOUGH (__), Trustee, is Chairman of G.M. Management Group
(strategic advisory services). Prior to his retirement in July 1988, he
was Chairman and Chief Executive Officer of Leaseway Transportation Corp.
(physical distribution services). Mr. McDonough is a Director of
ACME-Cleveland Corp. (metal working, telecommunications and electronic
products), Brush-Wellman Inc. (metal refining), York International Corp.
(air conditioning and refrigeration), Commercial Intertech Corp. (water
treatment equipment, 1992), and Associated Estates Realty Corporation (a
real estate investment trust, 1993).
EDWARD H. MALONE (__), Trustee. Prior to his retirement in 1985, Mr.
Malone was Chairman, General Electric Investment Corporation and a Vice
President of General Electric Company. He is a Director of Allegheny Power
Systems, Inc. (electric utility), General Re Corporation (reinsurance) and
Mattel Inc. (toy manufacturer). In addition, he serves as a Trustee of
Corporate Property Investors, the EPS Foundation at Trinity College, the
Naples Philharmonic Center for the Arts, and Rensselaer Polytechnic
Institute, and he is a member of the Advisory Boards of Butler Capital
Corporation Funds and Warburg, Pincus Partnership Funds.
MARVIN L. MANN (__), Trustee (1993) is Chairman of the Board, President,
and Chief Executive Officer of Lexmark International, Inc. (office
machines, 1991). Prior to 1991, he held the positions of Vice President of
International Business Machines Corporation ("IBM") and President and
General Manager of various IBM divisions and subsidiaries. Mr. Mann is a
Director of M.A. Hanna Company (chemicals, 1993) and Infomart (marketing
services, 1991), a Trammell Crow Co. In addition, he serves as the
Campaign Vice Chairman of the Tri-State United Way (1993) and is a member
of the University of Alabama President's Cabinet (1990).
THOMAS R. WILLIAMS (__), Trustee, is President of The Wales Group, Inc.
(management and financial advisory services). Prior to retiring in 1987,
Mr. Williams served as Chairman of the Board of First Wachovia Corporation
(bank holding company), and Chairman and Chief Executive Officer of The
First National Bank of Atlanta and First Atlanta Corporation (bank holding
company). He is currently a Director of BellSouth Corporation
(telecommunications), ConAgra, Inc. (agricultural products), Fisher
Business Systems, Inc. (computer software), Georgia Power Company (electric
utility), Gerber Alley & Associates, Inc. (computer software), National
Life Insurance Company of Vermont, American Software, Inc., and AppleSouth,
Inc. (restaurants, 1992).
FRED L. HENNING, JR.(__), Vice President, is Vice President of Fidelity's
money market (1994) and fixed-income (1995) funds and Senior Vice President
of FMR Texas Inc.
CURTIS HOLLINGSWORTH, Vice President (1991) is an employee of FMR.
ARTHUR S. LORING (__), Secretary, is Senior Vice President (1993) and
General Counsel of FMR, Vice President-Legal of FMR Corp., and Vice
President and Clerk of FDC.
KENNETH A. RATHGEBER (__), Treasurer (1995), is Treasurer of the Fidelity
funds and is an employee of FMR (1995). Before joining FMR, Mr. Rathgeber
was a Vice President of Goldman Sachs & Co. (1978-1995), where he served in
various positions, including Vice President of Proprietary Accounting
(1988-1992), Global Co-Controller (1992-1994), and Chief Operations Officer
of Goldman Sachs (Asia) LLC (1994-1995).
JOHN H. COSTELLO (__), Assistant Treasurer, is an employee of FMR.
LEONARD M. RUSH (__), Assistant Treasurer (1994), is an employee of FMR
(1994). Prior to becoming Assistant Treasurer of the Fidelity funds, Mr.
Rush was Chief Compliance Officer of FMR Corp. (1993-1994); Chief Financial
Officer of Fidelity Brokerage Services, Inc. (1990-1993); and Vice
President, Assistant Controller, and Director of the Accounting Department
- - First Boston Corp. (1986-1990).
The following table sets forth information describing the compensation of
each current Trustee of the fund for his or her services as trustee for the
fiscal year ended November 30, 1995.
COMPENSATION TABLE
<TABLE>
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<S> <C> <C> <C> <C>
Trustees Aggregate Pension or Estimated Annual Total
Compensation Retirement Benefits Upon Compensation
from Benefits Accrued Retirement from from the Fund
the Fund as Part of Fund the Fund Complex*
Expenses from the Complex*
Fund Complex*
J. Gary Burkhead ** $ 0 $ 0 $ 0 $ 0
Ralph F. Cox 5,200 52,000 125,000
Phyllis Burke Davis 5,200 52,000 122,000
Richard J. Flynn 0 52,000 154,500
Edward C. Johnson 3d ** 0 0 0 0
E. Bradley Jones 5,200 49,400 123,500
Donald J. Kirk 5,200 52,000 125,000
Peter S. Lynch ** 0 0 0 0
Gerald C. McDonough 5,200 52,000 125,000
Edward H. Malone 5,200 44,200 128,000
Marvin L. Mann 5,200 52,000 125,000
Thomas R. Williams 5,200 52,000 126,500
</TABLE>
* Information is as of December 31, 1994 for 206 funds in the complex.
** Interested trustees of the fund are compensated by FMR.
Under a retirement program adopted in July 1988, the non-interested
Trustees, upon reaching age 72, become eligible to participate in a
retirement program under which they receive payments during their lifetime
from a fund based on their basic trustee fees and length of service. The
obligation of a fund to make such payments is not secured or funded.
Trustees become eligible if, at the time of retirement, they have served on
the Board for at least five years. Currently, Messrs. Ralph S. Saul,
William R. Spaulding, Bertram H. Witham, and David L. Yunich, all former
non-interested Trustees, receive retirement benefits under the program.
On November 30, 1995, the Trustees and officers of the fund owned, in the
aggregate, less than __% of the fund's total outstanding shares.
As of [DATE NOT EARLIER THAN 30 DAYS PRIOR TO SEC FILING DATE] the
following owned of record or beneficially 5% or more of
outstanding shares of the fund:
A shareholder owning of record or beneficially more than 25% of the fund's
outstanding shares may be considered a controlling person. That
shareholder's vote could have a more significant effect on matters
presented at a shareholders' meeting than votes of other shareholders of
the fund.
MANAGEMENT CONTRACT
The fund employs FMR to furnish investment advisory and other services.
Under its management contract with the fund, FMR acts as investment adviser
and, subject to the supervision of the Board of Trustees, directs the
investments of the fund in accordance with its investment objective,
policies and limitations. FMR also provides the fund with all necessary
office facilities and personnel for servicing the fund's investments,
compensates all officers of the fund and all Trustees who are "interested
persons" of the t rust or of FMR, and all personnel of the fund or
FMR performing services relating to research, statistical, and investment
activities.
In addition, FMR or its affiliates, subject to the supervision of the Board
of Trustees, provide s the management and administrative services
necessary for the operation of the fund. These services include providing
facilities for maintaining the fund's organization; supervising relations
with custodians, transfer and pricing agents, accountants,
underwriters , and other persons dealing with the fund; preparing all
general shareholder communications and conducting shareholder relations,
maintaining the fund's records and the registration of the fund's shares
under federal and state laws; developing management and shareholder
services for the fund; and furnishing reports, evaluations, and analyses on
a variety of subjects to the Trustees.
FMR is responsible for the payment of all expenses of the fund with certain
exceptions. Specific expenses payable by FMR include, without limitation,
expenses for the typesetting, printing, and mailing proxy materials to
shareholders; legal expenses, and the fees of the custodian, auditor; costs
of typesetting, printing, and mailing prospectuses and statements of
additional information, notices and reports to shareholders; the fund's
proportionate share of insurance premiums and Investment Company Institute
dues. FMR also provides for transfer agent and dividend disbursing services
through FIIOC and portfolio and general accounting record maintenance
through FSC.
FMR pays all other expenses of the fund with the following
exceptions: fees and expenses of all Trustees of the t rust who are
not "interested persons" of the t rust o r FMR (the
non-interested Trustees); taxes; brokerage commissions (if any); and such
nonrecurring expenses as may arise, including costs of any litigation to
which a fund may be a party, and any obligation it may have to indemnify
the officers and Trustees with respect to litigation.
FMR is the fund's manager pursuant to a management contract dated July 29,
1986, which was approved by shareholders on September 23, 1987. The
management fee paid to FMR is reduced by an amount equal to the fees and
expenses paid by the fund to the non-interested Trustees.
For the services of FMR under the contract, the fund pays FMR a monthly
management fee at the annual rate of 0.45% of the average net assets of the
fund throughout the month. For the fiscal years ended November 30,
199 5 , 199 4 , and 199 3 , FMR received $ ________ ,
$ 1,587,319 , and $ 1,144,829 , respectively, after reduction of
fees and expenses paid by the fund to the non-interested Trustees.
FMR may, from time to time, voluntarily reimburse all or a portion of the
fund's operating expenses (exclusive of interest, taxes, brokerage
commissions, and extraordinary expenses). FMR retains the ability to be
repaid for these expense reimbursements in the amount that expenses fall
below the limit prior to the end of the fiscal year. Expense reimbursements
by FMR will increase the fund's total returns and yield and repayment of
the reimbursement by the fund will lower its total returns and yield .
To comply with the California Code of Regulations, FMR will reimburse the
fund if and to the extent that the fund's aggregate annual operating
expenses exceed specified percentages of its average net assets. The
applicable percentages are 2 1/2% of the first $30 million, 2% of the next
$70 million, and 1 1/2% of average net assets in excess of $100 million.
When calculating the fund's expenses for purposes of this regulation, the
fund may exclude interest, taxes, brokerage commissions, and extraordinary
expenses .
CONTRACTS WITH FMR AFFILIATES
FIIOC is trans fe r, dividend disbursing , and
shareholder s' servicing agent for the fund. The costs of these
services are borne by FMR pursuant to its management contract with the
fund. FSC calculates the fund's NAV and dividends, maintains the funds
general accounting records, and administers the fund's securities lending
program. The costs of these services are also borne by FMR pursuant to its
management contract with the fund.
The fund has a distribution agreement with FDC, a Massachusetts corporation
organized on July 18, 1960. FDC is a broker-dealer registered under the
S ecurities Exchange Act of 1934 and is a member of the National
Association of Securities Dealers, Inc. The distribution agreement calls
for FDC to use all reasonable efforts, consistent with its other business,
to secure purchasers for shares of the fund, which are continuously
offered at NAV . Promotional and administrative expenses in
connection with the offer and sale of shares are paid by FMR.
DISTRIBUTION AND SERVICE PLAN
The Trustees have approved a Distribution and Service Plan on behalf
of the fund (the Plan) pursuant to Rule 12b-1 under the Investment
Company Act of 1940 (the Rule). The Rule provides in substance that a
mutual fund may not engage directly or indirectly in financing any activity
that is primarily intended to result in the sale of shares of a fund except
pursuant to a plan approved on behalf of the fund under the Rule. The Plan,
as approved by the Trustees, allow s the fund and FMR to incur
certain expenses that might be considered to constitute indirect payment by
the funds of distribution expenses.
Under the Plan, if the payment of management fees by the fund to FMR is
deemed to be indirect financing by the fund of the distribution of its
shares, such payment is authorized by the Plan. The Plan specifically
recognizes that FMR, may use its management fee revenue, as well as
past profits or its other resources , from any other
source , to reimburse FDC for expenses incurred in connection with
the distribution of the fund, including payments made to third
parties that assist in selling shares of the fund, or to third parties,
including banks, that render shareholder support services.
The Trustees have not authorized such payments to date.
Prior to approving P lan, the Trustees carefully considered all
pertinent factors relating to the implementation of the Plan , and
have determined that there is a reasonable likelihood that the Plan
will benefit the fund and its shareholders. In particular, the
Trustees noted that the Plan does not authorize payments by the fund other
than those made to FMR under its management contract with the fund. To the
extent that the Plan gives FMR and FDC greater flexibility in
connection with the distribution of shares of the fund, additional sales of
fund shares may result. Furthermore, certain shareholder support services
may be provided more effectively under the Plan by local entities with whom
shareholders have other relationships.
The Plan was approved by shareholders on _______, 19__.
The Glass-Steagall Act generally prohibits federally and state chartered or
supervised banks from engaging in the business of underwriting, selling, or
distributing securities. Although the scope of this prohibition under the
Glass-Steagall Act has not been clearly defined by the courts or
appropriate regulatory agencies, FDC believes that the Glass-Steagall Act
should not preclude a bank from performing shareholder support services, or
servicing and recordkeeping functions. FDC intends to engage banks only to
perform such functions. However, changes in federal or state statutes and
regulations pertaining to the permissible activities of banks and their
affiliates or subsidiaries, as well as further judicial or administrative
decisions or interpretations, could prevent a bank from continuing to
perform all or a part of the contemplated services. If a bank were
prohibited from so acting, the Trustees would consider what actions, if
any, would be necessary to continue to provide efficient and effective
shareholder services. In such event, changes in the operation of the fund
might occur, including possible termination of any automatic investment or
redemption or other services then provided by the bank. It is not expected
that shareholders would suffer any adverse financial consequences as a
result of any of these occurrences. In addition, state securities laws on
this issue may differ from the interpretations of federal law expressed
herein, and banks and other financial institutions may be required
to register as dealers pursuant to state law.
The fund may execute portfolio transactions with , and purchase
securities issued by , depository institutions that receive payments
under the Plan. No preference for the instruments of such depository
institutions will be shown in the selection of investments.
DESCRIPTION OF THE TRUST
TRUST ORGANIZATION. Institutional Short-Intermediate Government
Portfolio is a fund of Fidelity Advisor Series IV, an open-end
management investment company organized as a Massachusetts business trust
by Declaration of Trust dated May 6, 1983. On January 29, 1992, the name of
the Trust was changed from Fidelity Income Trust to Fidelity Advisor Series
IV. Currently, there are three funds of the Trust: Institutional
Short-Intermediate Government Portfolio, Advisor Limited Term Bond Fund and
Fidelity Real Estate High Income Fund. The Declaration of Trust permits the
Trustees to create additional funds.
In the event that FMR ceases to be the investment adviser to a fund,
the right of the t rust or fund to use the identifying name
"Fidelity" may be withdrawn.
The assets of the t rust received for the issue or sale of shares of
each fund and all income, earnings, profits, and proceeds thereof, subject
only to the rights of creditors, are especially allocated to such fund, and
constitute the underlying assets of such fund. The underlying assets of
each fund are segregated on the books of account, and are to be charged
with the liabilities with respect to such fund and with a share of the
general expenses of the t rust. Expenses with respect to the
t rust are to be allocated in proportion to the asset value of the
respective funds, except where allocations of direct expense can otherwise
be fairly made. The officers of the t rust, subject to the general
supervision of the Board of Trustees, have the power to determine which
expenses are allocable to a given fund, or which are general or allocable
to all of the funds. In the event of the dissolution or liquidation of the
t rust, shareholders of each fund are entitled to receive as a class
the underlying assets of such fund available for distribution.
SHAREHOLDER AND TRUSTEE LIABILITY. The t rust is an entity of the
type commonly known as a "Massachusetts business trust." Under
Massachusetts law, shareholders of such a t rust may, under certain
circumstances, be held personally liable for the obligations of the
t rust. The Declaration of Trust provides that the t rust shall
not have any claim against shareholders except for the payment of the
purchase price of shares and requires that each agreement, obligation, or
instrument entered into or executed by the t rust or the Trustees
include a provision limiting the obligations created thereby to the
t rust and its assets. The Declaration of Trust provides for
indemnification out of each fund's property of any shareholder held
personally liable for the obligations of the fund. The Declaration of Trust
also provides that each fund shall, upon request, assume the defense of any
claim made against any shareholder for any act or obligation of the fund
and satisfy any judgment thereon. Thus, the risk of a shareholder incurring
financial loss on account of shareholder liability is limited to
circumstances in which a fund itself would be unable to meet its
obligations. FMR believes that, in view of the above, the risk of personal
liability to shareholders is remote.
The Declaration of Trust further provides that the Trustees, if they have
exercised reasonable care, will not be liable for any neglect or
wrongdoing, but nothing in the Declaration of Trust protects Trustees
against any liability to which they would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence, or reckless disregard of
the duties involved in the conduct of their office.
VOTING RIGHTS. The fund's capital consists of shares of beneficial
interest. As a shareholder, you receive one vote for each dollar value of
net asset value you own. The shares have no preemptive or conversion
rights; the voting and dividend rights, the right of redemption, and the
privilege of exchange are described in the Prospectus. Shares are
fully paid and nonassessable, except as set forth under the heading
"Shareholder and Trustee Liability" above. Shareholders representing 10% or
more of the t rust or a fund may, as set forth in the
Declaration of Trust, call meetings of the t rust or a fund
for any purpose related to the t rust or the fund , as
the case may be, including, in the case of a meeting of the entire
t rust, the purpose of voting on removal of one or more Trustees. The
t rust or any fund may be terminated upon the sale of its assets to
another open-end management investment company, or upon liquidation and
distribution of its assets, if approved by vote of the holders of a
majority of the t rust or fund, as determined by the current value of
each shareholder's investment in the fund or t rust. If not so
terminated, the t rust and its funds will continue indefinitely.
The fund may invest all of its assets in another investment company.
CUSTODIAN. The Bank of New York, 48 Wall Street, New York, New York, is
custodian of the assets of the fund. The custodian is responsible for the
safekeeping of the fund's assets and the appointment of subcustodian banks
and clearing agencies. The custodian takes no part in determining the
investment policies of the fund or in deciding which securities are
purchased or sold by the fund. However, a fund may invest in
obligations of the custodian and may purchase securities from or sell
securities to the custodian. Chemical Bank, headquartered in New York,
also may serve as a special purpose custodian of certain assets in
connection with pooled repurchase agreement transactions.
FMR, its officers and directors, its affiliated companies, and the Board
of Trustees may , from time to time , conduct transactions
with various banks, including banks serving as custodians for certain funds
advised by FMR. Transactions that have occurred to date include mortgages
and personal and general business loans. In the judgment of FMR, the terms
and conditions of those transactions were not influenced by existing or
potential custodial or other fund relationships.
AUDITOR. _______________ , One Post Office Square, Boston,
Massachusetts, serves as the fund's independent accountant. The auditor
examines financial statements for the fund and provides other audit, tax,
and related services.
FINANCIAL STATEMENTS
The fund's financial statements and financial highlights for the fiscal
year ended November 30, 199 5 , are included in the fund's Annual
Report, which is attached to the Prospectus . The fund's financial
statements and financial highlights are incorporated herein by reference.
APPENDIX
DOLLAR-WEIGHTED AVERAGE MATURITY is derived by multiplying the value of
each investment by the number of days remaining to its maturity, adding
these calculations, and then dividing the total by the value of the fund's
portfolio. An obligation's maturity is typically determined on a stated
final maturity basis, although there are some exceptions to this rule.
For example, if it is probable that the issuer of an instrument will take
advantage of a maturity-shortening device, such as a call, refunding, or
redemption provision, the date on which the instrument will probably be
called, refunded, or redeemed may be considered to be its maturity date.
Also, the maturities of mortgage-backed securities and some asset-backed
securities, such as collateralized mortgage obligations, are determined on
a weighted average life basis, which is the average time for principal to
be repaid. For a mortgage security, this average time is calculated by
estimating the timing of principal payments , including
unscheduled prepayments, during the life of the mortgage . The weighted
average life of these securities is likely to be substantially shorter than
their stated final maturity.
PART C. OTHER INFORMATION
Item 24. (a) Audited financial statements and financial highlights for
Fidelity Institutional Short-Intermediate Government Portfolio for the
fiscal year ended November 30, 1995 will be filed by subsequent amendment.
(b) Exhibits:
(1) Amended and Restated Declaration of Trust, dated March 16, 1995, was
electronically filed and is incorporated by reference to Exhibit 1(a) to
Post-Effective Amendment No. 45.
(2) By-Laws of the Trust were electronically filed and are incorporated
herein by reference to Exhibit 2(a) to Union Street Trust's Post-Effective
Amendment No. 87.
(3) Not applicable.
(4) Form of Share Certificate was electronically filed on behalf of
Fidelity Advisor Limited Term Bond Fund and is incorporated herein as
Exhibit 4 to Post-Effective Amendment No. 46.
(5) (a) Management Contract between Fixed-Income Portfolios: Short-Term
Government Series and Fidelity Management & Research Company, dated July
29, 1986, is electronically filed herein as Exhibit 5(a) to Post-Effective
Amendment No. 49.
(b) Management Contract between Advisor Series IV: Fidelity Advisor
Limited Term Bond Fund and Fidelity Management & Research Company, dated
January 1, 1995, was electronically filed and is incorporated herein by
reference to Exhibit 5(b) to Post-Effective Amendment No. 43.
(c) Sub-Advisory Agreement between Fidelity Management & Research Company,
on behalf of Fidelity Advisor Limited Term Bond Fund, and Fidelity
Management & Research (U.K.) Inc., dated January 1, 1995, was
electronically filed and is incorporated herein by reference to Exhibit
5(c) to Post-Effective Amendment No. 43.
(d) Sub-Advisory Agreement between Fidelity Management & Research Company,
on behalf of Fidelity Advisor Limited Term Bond Fund, and Fidelity
Management & Research (Far East) Inc., dated January 1, 1995, was
electronically filed and is incorporated herein by reference to Exhibit
5(d) to Post-Effective Amendment No. 43.
(e) Management Contract between Fidelity Management & Research Company and
Fidelity Real Estate High Income Fund, dated December 30, 1994, was
electronically filed and is incorporated herein by reference to Exhibit
5(e) to Post-Effective Amendment No. 41.
(6) (a) General Distribution Agreement between Income Portfolios: Limited
Term Series and Fidelity Distributors Corporations dated April 1, 1987,
(amending in its entirety the Distribution Agreement dated June 1, 1986)
was electronically filed and is incorporated herein by reference to Exhibit
6(a) to Post-Effective Amendment No. 46.
(b) Amendment to the General Distribution Agreements, dated January 1,
1988, was electronically filed and is incorporated herein by reference to
Exhibit 6(b) to Post-Effective Amendment No. 46.
(c) General Distribution Agreement between Income Portfolios: Short
Government Series and Fidelity Distributors Corporations, dated July 29,
1987, (amending in its entirety the Distribution Agreement dated April 1,
1987) was electronically filed and is incorporated herein by reference to
Exhibit 6(c) to Post-Effective Amendment No. 46.
(d) General Distribution Agreement between Fidelity Distributors
Corporation and Fidelity Real Estate High Income Fund, dated December 30,
1994, was electronically filed and is incorporated herein by reference to
Exhibit 6(c) to Post-Effective Amendment No. 41.
(e) Form of Bank Agency Agreement (most recently revised May 1994) was
electronically filed and is incorporated herein by reference to Exhibit
6(d) to Post-Effective Amendment No. 45.
(f) Form of Selling Dealer Agreement (most recently revised May 1994)
was electronically filed and is incorporated herein by reference to Exhibit
6(e) to Post-Effective Amendment No. 45.
(g) Form of Selling Dealer Agreement for Bank Related Transactions (most
recently revised June 1994) was electronically filed and is incorporated
herein by reference to Exhibit 6(f) to Post-Effective Amendment No. 45.
(7) Retirement Plan for Non-Interested Person Trustees, Directors or
General Partners, effective November 1, 1989, was electronically filed and
is incorporated herein by reference to Exhibit 7 to Union Street Trust's
Post-Effective Amendment No. 87.
(8) (a) Custodian Agreement, Appendix A, and Appendix C, dated
December 1, 1994, between The Bank of New York and Registrant on behalf of
Fidelity Institutional Short-Intermediate Government Portfolio, Fidelity
Advisor Limited Term Bond Fund and Fidelity Real Estate High Income Fund
were electronically filed and are incorporated herein by reference to
Exhibit 8(b) to Post-Effective Amendment No. 45.
(9) Not applicable.
(10) Not applicable.
(11) Not applicable.
(12) None.
(13) None.
(14) (a) Fidelity Individual Retirement Account, as currently in effect,
was electronically filed and is incorporated herein by reference to Exhibit
14(a) to Union Street Trust's Post-Effective Amendment No. 87.
(b) Portfolio Advisory Services Individual Retirement Account, as
currently in effect, was electronically filed and is incorporated herein by
reference as Exhibit 14(i) to Union Street Trust's Post-Effective Amendment
No. 87.
(c) National Financial Services Corporation Individual Retirement
Account, as currently in effect, was electronically filed and is
incorporated herein by reference to Exhibit 14(h) to Union Street Trust's
Post-Effective Amendment No. 87.
(d) National Financial Services Defined Contribution Plan, as currently
in effect, was electronically filed and is incorporated herein by reference
to Exhibit 14(k) to Union Street's Trust Post-Effective Amendment No. 87.
(e) Fidelity Institutional Individual Retirement Account Custodian
Agreement and Disclosure Statement, as currently in effect, was
electronically filed and is incorporated herein by reference to Exhibit
14(d) to Union Street Trust's Post-Effective Amendment No. 87.
(f) Fidelity Advisor Funds Individual Retirement Account Custodial
Agreement Disclosure Statement in effect as of January 1, 1994, was
electronically filed and is incorporated herein by reference to Exhibit
14(b) to Advisor Series I Post-Effective Amendment No. 22.
(g) Plymouth Defined Contribution Plan, as currently in effect, was
electronically filed and is incorporated herein by reference to Exhibit
14(o) to Commonwealth Trust's Post-Effective Amendment No. 57.
(15) (a) Distribution and Service Plan pursuant to Rule 12b-1 for
Short-Term Government Series is electronically filed herein as Exhibit
15(a) to Post-Effective Amendment No. 49.
(b) Distribution and Service Plan pursuant to Rule 12b-1 for Fidelity
Advisor Limited Term Bond Fund-Class A was electronically filed and is
incorporated herein by reference to Exhibit 15(b) to Post-Effective
Amendment No. 43.
(c) Distribution and Service Plan pursuant to Rule 12b-1 for Institutional
Short-Intermediate Government Portfolio II was electronically filed and is
incorporated herein by reference to Exhibit 15 (c) to Post-Effective
Amendment No. 35.
(d) Distribution and Service Plan for Fidelity Advisor Limited Term Bond
Fund-Class B was electronically filed and is incorporated herein by
reference to Exhibit 15(d) to Post-Effective Amendment No. 43.
(e) Distribution and Service Plan for Fidelity Real Estate High Income
Fund was electronically filed and is incorporated herein by reference to
Exhibit 15(e) to Post-Effective Amendment No. 41.
(f) Distribution and Service Plan for Fidelity Advisor Limited Term Bond
Fund- Institutional Class was electronically filed and is incorporated
herein by reference as Exhibit 15(f) to Post-Effective Amendment No. 46.
(16) A schedule for computation of performance quotations for each
Series/Portfolio was electronically filed and is incorporated herein by
reference to Exhibit 16 to Post-Effective Amendment No. 15.
(17) A Financial Data Schedule for the trust will be filed by subsequent
amendment.
(18) Rule 18f-3 Plan, dated July 1, 1995, on behalf of Fidelity Advisor
Limited Term Bond Fund was electronically filed and is incorporated herein
as Exhibit 18 to Post-Effective Amendment No. 46.
Item 25. Persons Controlled by or under Common Control with Registrant
The Board of Trustees of the Registrant is the same as the Boards of other
Fidelity funds offered primarily to institutional investors, each of which
has Fidelity Management & Research Company as its investment adviser.
Nonetheless, Registrant takes the position that is not under common control
with these other funds since the power residing in the respective Boards
and officers arises as the result of an official position with the
respective funds.
Item 26. Number of Holders of Securities
October 31, 1995
Title of Class Number of Record Holders
Fidelity Advisor Limited Term Bond Fund: Class A 5,758
Fidelity Advisor Limited Term Bond Fund: Class B 577
Fidelity Advisor Limited Term Bond Fund: Institutional Class 1,530
Fidelity Institutional Short-Intermediate Government Portfolio: Class I
4,116
Fidelity Institutional Short-Intermediate Government Portfolio: Class II
1
Fidelity Real Estate High Income Fund 1
Item 27. Indemnification
Article XI, Section 2 of the Declaration of Trust sets forth the
reasonable and fair means for determining whether indemnification shall be
provided to any past or present Trustee or officer. It states that the
Registrant shall indemnify any present or past Trustee, or officer to the
fullest extent permitted by law against liability and all expenses
reasonably incurred by him in connection with any claim, action suit or
proceeding in which he is involved by virtue of his service as a trustee,
an officer, or both. Additionally, amounts paid or incurred in settlement
of such matters are covered by this indemnification. Indemnification will
not be provided in certain circumstances, however. These include instances
of willful misfeasance, bad faith, gross negligence, and reckless disregard
of the duties involved in the conduct of the particular office involved.
Item 28. Business and Other Connections of Investment Adviser
(1) FIDELITY MANAGEMENT & RESEARCH COMPANY
FMR serves as investment adviser to a number of other investment
companies. The directors and officers of the Adviser have held, during the
past two fiscal years, the following positions of a substantial nature.
<TABLE>
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<S> <C>
Edward C. Johnson 3d Chairman of the Executive Committee of FMR; President
and Chief Executive Officer of FMR Corp.; Chairman of
the Board and a Director of FMR, FMR Corp., FMR Texas
Inc., Fidelity Management & Research (U.K.) Inc., and
Fidelity Management & Research (Far East) Inc.; President
and Trustee of funds advised by FMR.
J. Gary Burkhead President of FMR; Managing Director of FMR Corp.;
President and a Director of FMR Texas Inc., Fidelity
Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.; Senior Vice
President and Trustee of funds advised by FMR.
Peter S. Lynch Vice Chairman and Director of FMR.
Robert Beckwitt Vice President of FMR and of funds advised by FMR.
David Breazzano Vice President of FMR (1993) and of a fund advised by
FMR.
Stephan Campbell Vice President of FMR (1993).
Dwight Churchill Vice President of FMR (1993).
William Danoff Vice President of FMR (1993) and of a fund advised by
FMR.
Scott DeSano Vice President of FMR (1993).
Penelope Dobkin Vice President of FMR and of a fund advised by FMR.
Larry Domash Vice President of FMR (1993).
George Domolky Vice President of FMR (1993) and of a fund advised by
FMR.
Robert K. Duby Vice President of FMR.
Margaret L. Eagle Vice President of FMR and of a fund advised by FMR.
Kathryn L. Eklund Vice President of FMR.
Richard B. Fentin Senior Vice President of FMR (1993) and of a fund advised
by FMR.
Daniel R. Frank Vice President of FMR and of funds advised by FMR.
Michael S. Gray Vice President of FMR and of funds advised by FMR.
Lawrence Greenberg Vice President of FMR (1993).
Barry A. Greenfield Vice President of FMR and of a fund advised by FMR.
William J. Hayes Senior Vice President of FMR; Equity Division Leader.
Robert Haber Vice President of FMR and of funds advised by FMR.
Richard Haberman Senior Vice President of FMR (1993).
Daniel Harmetz Vice President of FMR and of a fund advised by FMR.
Ellen S. Heller Vice President of FMR.
</TABLE>
John Hickling Vice President of FMR (1993) and of funds advised by
FMR.
<TABLE>
<CAPTION>
<S> <C>
Robert F. Hill Vice President of FMR; Director of Technical Research.
Stephen P. Jonas Treasurer and Vice President of FMR (1993)); Treasurer of
FMR Texas Inc. (1993), Fidelity Management & Research
(U.K.) Inc. (1993), and Fidelity Management & Research
(Far East) Inc. (1993).
David B. Jones Vice President of FMR (1993).
Steven Kaye Vice President of FMR (1993) and of a fund advised by
FMR.
Frank Knox Vice President of FMR (1993).
Robert A. Lawrence Senior Vice President of FMR (1993); High Income
Division Leader.
Alan Leifer Vice President of FMR and of a fund advised by FMR.
Harris Leviton Vice President of FMR (1993) and of a fund advised by
FMR.
Bradford E. Lewis Vice President of FMR and of funds advised by FMR.
Malcolm W. MacNaught II Vice President of FMR (1993).
Robert H. Morrison Vice President of FMR; Director of Equity Trading.
David Murphy Vice President of FMR and of funds advised by FMR.
Andrew Offit Vice President of FMR (1993).
Judy Pagliuca Vice President of FMR (1993).
Jacques Perold Vice President of FMR.
Anne Punzak Vice President of FMR and of funds advised by FMR.
Lee Sandwen Vice President of FMR (1993).
Patricia A. Satterthwaite Vice President of FMR (1993) and of a fund advised by
FMR.
Thomas T. Soviero Vice President of FMR (1993).
Robert E. Stansky Senior Vice President of FMR (1993) and of funds advised
by FMR.
Gary L. Swayze Vice President of FMR and of funds advised by FMR;
Tax-Free Fixed-Income Group Leader.
Thomas Sweeney Vice President of FMR (1993).
Beth F. Terrana Senior Vice President of FMR (1993) and of funds advised
by FMR.
Joel Tillinghast Vice President of FMR (1993) and of a fund advised by
FMR.
Robert Tucket Vice President of FMR (1993).
George A. Vanderheiden Senior Vice President of FMR; Vice President of funds
advised by FMR; Growth Group Leader.
Jeffrey Vinik Senior Vice President of FMR (1993) and of a fund advised
by FMR.
Guy E. Wickwire Vice President of FMR and of a fund advised by FMR.
Arthur S. Loring Senior Vice President (1993), Clerk, and General Counsel
of FMR; Vice President, Legal of FMR Corp.; Secretary of
funds advised by FMR.
</TABLE>
(2) FIDELITY MANAGEMENT & RESEARCH (U.K.) INC. (FMR U.K.)
FMR U.K. provides investment advisory services to Fidelity Management &
Research Company and Fidelity Management Trust Company. The directors and
officers of the Sub-Adviser have held the following positions of a
substantial nature during the past two fiscal years.
<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman and Director of FMR U.K.; Chairman of the
Executive Committee of FMR; Chief Executive Officer of FMR
Corp.; Chairman of the Board and a Director of FMR, FMR
Corp., FMR Texas Inc., and Fidelity Management & Research
(Far East) Inc.; President and Trustee of funds advised by FMR.
J. Gary Burkhead President and Director of FMR U.K.; President of FMR;
Managing Director of FMR Corp.; President and a Director of
FMR Texas Inc. and Fidelity Management & Research (Far
East) Inc.; Senior Vice President and Trustee of funds advised
by FMR.
Richard C. Habermann Senior Vice President of FMR U.K.; Senior Vice President of
Fidelity Management & Research (Far East) Inc.; Director of
Worldwide Research of FMR.
Rick Spillane Senior Vice President and Director of Operations and
Compliance of FMR U.K. (1993).
Stephen P. Jonas Treasurer of FMR U.K. (1993), Fidelity Management &
Research (Far East) Inc. (1993), and FMR Texas Inc. (1993);
Treasurer and Vice President of FMR (1993).
David Weinstein Clerk of FMR U.K.; Clerk of Fidelity Management & Research
(Far East) Inc.; Secretary of FMR Texas Inc.
</TABLE>
(3) FIDELITY MANAGEMENT & RESEARCH (FAR EAST) INC. (FMR Far East)
FMR Far East provides investment advisory services to Fidelity Management
& Research Company and Fidelity Management Trust Company. The directors
and officers of the Sub-Adviser have held the following positions of a
substantial nature during the past two fiscal years.
<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman and Director of FMR Far East; Chairman of the
Executive Committee of FMR; Chief Executive Officer of
FMR Corp.; Chairman of the Board and a Director of
FMR, FMR Corp., FMR Texas Inc. and Fidelity
Management & Research (U.K.) Inc.; President and
Trustee of funds advised by FMR.
J. Gary Burkhead President and Director of FMR Far East; President of
FMR; Managing Director of FMR Corp.; President and a
Director of FMR Texas Inc. and Fidelity Management &
Research (U.K.) Inc.; Senior Vice President and Trustee
of funds advised by FMR.
Richard C. Habermann Senior Vice President of FMR Far East; Senior Vice
President of Fidelity Management & Research (U.K.)
Inc.; Director of Worldwide Research of FMR.
William R. Ebsworth Vice President of FMR Far East.
Bill Wilder Vice President of FMR Far East (1993).
Stephen P. Jonas Treasurer of FMR Far East (1993), Fidelity Management
& Research (U.K.) Inc. (1993), and FMR Texas Inc.
(1993); Treasurer and Vice President of FMR (1993).
David C. Weinstein Clerk of FMR Far East; Clerk of Fidelity Management &
Research (U.K.) Inc.; Secretary of FMR Texas Inc.
</TABLE>
Item 29. Principal Underwriters
(a) Fidelity Distributors Corporation (FDC) acts as distributor for most
funds advised by FMR and the following other funds:
ARK Funds
(b)
Name and Principal Positions and Offices Positions and Offices
Business Address* With Underwriter With Registrant
Edward C. Johnson 3d Director Trustee and President
Nita B. Kincaid Director None
W. Humphrey Bogart Director None
Kurt A. Lange President and Treasurer None
William L. Adair Senior Vice President None
Thomas W. Littauer Senior Vice President None
Arthur S. Loring Vice President and Clerk Secretary
* 82 Devonshire Street, Boston, MA
(c) Not applicable.
Item 30. Location of Accounts and Records
All accounts, books, and other documents required to be maintained by
Section 31a of the 1940 Act and the Rules promulgated thereunder are
maintained by Fidelity Management & Research Company or Fidelity Service
Co., 82 Devonshire Street, Boston, MA 02109, or the funds' respective
custodian: The Bank of New York, 110 Washington Street, New York, N.Y.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
The Registrant, on behalf of Fidelity Advisor Limited Term Bond Fund,
Fidelity Institutional Short-Intermediate Government Portfolio and Real
Estate High Income Fund, undertakes to deliver to each person who has
received the prospectus or annual or semiannual financial report for a fund
in an electronic format, upon his or her request and without charge, a
paper copy of the prospectus or annual or semiannual report for the fund.
The Registrant, on behalf of Fidelity Advisor Limited Term Bond Fund and
Fidelity Institutional Short-Intermediate Government Portfolio, undertakes,
provided the information required by Item 5A is contained in the annual
report, to furnish each person to whom a prospectus has been delivered,
upon their request and without charge, a copy of the Registrant's latest
annual report to shareholders.
The Registrant undertakes for Fidelity Real Estate High Income Fund: (1)
to call a meeting of shareholders for the purpose of voting upon the
questions of removal of a trustee or trustees, when requested to do so by
record holders of not less than 10% of its outstanding shares; and (2) to
assist in communications with other shareholders pursuant to Section
16(c)(1) and (2), whenever shareholders meeting the qualifications set
forth in Section 16(c) seek the opportunity to communicate with other
shareholders with a view toward requesting a meeting.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment No. 49 to the Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Boston, and Massachusetts, on the 9th day of November 1995.
Fidelity Advisor Series IV
By /s/Edward C. Johnson 3d (dagger)
Edward C. Johnson 3d, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
(Signature) (Title) (Date)
<TABLE>
<CAPTION>
<S> <C> <C>
/s/Edward C. Johnson 3d(dagger) President and Trustee November 9, 1995
Edward C. Johnson 3d (Principal Executive Officer)
</TABLE>
/s/Kenneth A. Rathgeber Treasurer November 9, 1995
Kenneth A. Rathgeber
/s/J. Gary Burkhead Trustee November 9, 1995
J. Gary Burkhead
/s/Ralph F. Cox * Trustee November 9, 1995
Ralph F. Cox
/s/Phyllis Burke Davis * Trustee November 9, 1995
Phyllis Burke Davis
/s/Richard J. Flynn * Trustee November 9, 1995
Richard J. Flynn
/s/E. Bradley Jones * Trustee November 9, 1995
E. Bradley Jones
/s/Donald J. Kirk * Trustee November 9, 1995
Donald J. Kirk
/s/Peter S. Lynch * Trustee November 9, 1995
Peter S. Lynch
/s/Edward H. Malone * Trustee November 9, 1995
Edward H. Malone
/s/Marvin L. Mann * Trustee November 9, 1995
Marvin L. Mann
/s/Gerald C. McDonough* Trustee November 9, 1995
Gerald C. McDonough
/s/Thomas R. Williams * Trustee November 9, 1995
Thomas R. Williams
(dagger) Signatures affixed by J. Gary Burkhead pursuant to a power of
attorney dated December 15, 1994 and filed herewith.
* Signature affixed by Robert C. Hacker pursuant to a power of attorney
dated December 15, 1994 and filed herewith.
POWER OF ATTORNEY
We, the undersigned Directors, Trustees or General Partners, as the case
may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Annuity Fund Fidelity Income Fund
Fidelity Advisor Series I Fidelity Institutional Trust
Fidelity Advisor Series II Fidelity Investment Trust
Fidelity Advisor Series III Fidelity Magellan Fund
Fidelity Advisor Series IV Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series V Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series VI Fidelity Municipal Trust
Fidelity Advisor Series VII Fidelity New York Municipal Trust
Fidelity Advisor Series VIII Fidelity Puritan Trust
Fidelity California Municipal Trust Fidelity School Street Trust
Fidelity Capital Trust Fidelity Securities Fund
Fidelity Charles Street Trust Fidelity Select Portfolios
Fidelity Commonwealth Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Congress Street Fund Fidelity Summer Street Trust
Fidelity Contrafund Fidelity Trend Fund
Fidelity Corporate Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Court Street Trust Fidelity U.S. Investments-Government Securities
Fidelity Deutsche Mark Performance Fund, L.P.
Portfolio, L.P. Fidelity Union Street Trust
Fidelity Devonshire Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Exchange Fund Spartan U.S. Treasury Money Market
Fidelity Financial Trust Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Fidelity Government Securities Fund Variable Insurance Products Fund II
Fidelity Hastings Street Trust
</TABLE>
plus any other investment company for which Fidelity Management & Research
Company acts as investment adviser and for which the undersigned
individuals serve as Board Members (collectively, the "Funds"), hereby
severally constitute and appoint Arthur J. Brown, Arthur C. Delibert,
Robert C. Hacker, Richard M. Phillips, Dana L. Platt and Stephanie A.
Djinis, each of them singly, our true and lawful attorneys-in-fact, with
full power of substitution, and with full power to each of them, to sign
for us and in our names in the appropriate capacities, all Pre-Effective
Amendments to any Registration Statements of the Funds, any and all
subsequent Post-Effective Amendments to said Registration Statements, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
our names and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and Investment Company Act of 1940, and all related
requirements of the Securities and Exchange Commission, hereby ratifying
and confirming all that said attorneys-in-fact or their substitutes may do
or cause to be done by virtue hereof.
WITNESS our hands on this fifteenth day of December, 1994.
/s/Edward C. Johnson 3d /s/Donald J. Kirk
Edward C. Johnson 3d Donald J. Kirk
/s/J. Gary Burkhead /s/Peter S. Lynch
J. Gary Burkhead Peter S. Lynch
/s/Ralph F. Cox /s/Marvin L. Mann
Ralph F. Cox Marvin L. Mann
/s/Phyllis Burke Davis /s/Edward H. Malone
Phyllis Burke Davis Edward H. Malone
/s/Richard J. Flynn /s/Gerald C. McDonough
Richard J. Flynn Gerald C. McDonough
/s/E. Bradley Jones /s/Thomas R. Williams
E. Bradley Jones Thomas R. Williams
POWER OF ATTORNEY
I, the undersigned President and Director, Trustee or General Partner, as
the case may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Annuity Fund Fidelity Institutional Trust
Fidelity Advisor Series I Fidelity Investment Trust
Fidelity Advisor Series II Fidelity Magellan Fund
Fidelity Advisor Series III Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series IV Fidelity Money Market Trust
Fidelity Advisor Series V Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series VI Fidelity Municipal Trust
Fidelity Advisor Series VII Fidelity New York Municipal Trust
Fidelity Advisor Series VIII Fidelity Puritan Trust
Fidelity California Municipal Trust Fidelity School Street Trust
Fidelity Capital Trust Fidelity Securities Fund
Fidelity Charles Street Trust Fidelity Select Portfolios
Fidelity Commonwealth Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Congress Street Fund Fidelity Summer Street Trust
Fidelity Contrafund Fidelity Trend Fund
Fidelity Corporate Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Court Street Trust Fidelity U.S. Investments-Government Securities
Fidelity Destiny Portfolios Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity Union Street Trust
Portfolio, L.P. Fidelity Yen Performance Portfolio, L.P.
Fidelity Devonshire Trust Spartan U.S. Treasury Money Market
Fidelity Exchange Fund Fund
Fidelity Financial Trust Variable Insurance Products Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund II
Fidelity Government Securities Fund
Fidelity Hastings Street Trust
Fidelity Income Fund
</TABLE>
plus any other investment company for which Fidelity Management & Research
Company acts as investment adviser and for which the undersigned individual
serves as President and Board Member (collectively, the "Funds"), hereby
severally constitute and appoint J. Gary Burkhead, my true and lawful
attorney-in-fact, with full power of substitution, and with full power to
sign for me and in my name in the appropriate capacity, all Pre-Effective
Amendments to any Registration Statements of the Funds, any and all
subsequent Post-Effective Amendments to said Registration Statements, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
my name and behalf in connection therewith as said attorney-in-fact deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and Investment Company Act of 1940, and all related
requirements of the Securities and Exchange Commission. I hereby ratify
and confirm all that said attorneys-in-fact or their substitutes may do or
cause to be done by virtue hereof.
WITNESS my hand on the date set forth below.
/s/Edward C. Johnson 3d December 15, 1994
Edward C. Johnson 3d
Exhibit 5(a)
MANAGEMENT CONTRACT
between
FIXED-INCOME PORTFOLIOS:
SHORT-TERM GOVERNMENT SERIES
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
AGREEMENT made this 29th day of July, 1986 by and between Fixed-Income
Portfolios, a Massachusetts business trust which may issue one or more
series of shares of beneficial interest (hereinafter called the "Fund"), on
behalf of Short-Term Government Series (hereinafter called the "Portfolio")
and Fidelity Management & Research Company, a Massachusetts corporation
(hereinafter called the "Adviser").
1. (a) Investment Advisory Services. The Adviser undertakes to act as
investment adviser of the Portfolio and shall, subject to the supervision
of the Fund's Board of Trustees, direct the investments of the Portfolio in
accordance with the investment objective, policies and limitations as
provided in the Portfolio's Prospectus or other governing instruments, as
amended from time to time, the Investment Company Act of 1940 and rules
thereunder, as amended from time to time (the "1940 Act"), and such other
limitations as the Portfolio may impose by notice in writing to the
Adviser. The Adviser shall also furnish for the use of the Portfolio
office space and all necessary office facilities, equipment and personnel
for servicing the investments of the Portfolio; and shall pay the salaries
and fees of all officers of the Fund, of all Trustees of the Fund who are
"interested persons" of the Fund or of the Adviser and of all personnel of
the Fund or the Adviser performing services relating to research,
statistical and investment activities. The Adviser is authorized, in its
discretion and without prior consultation with the Portfolio, to buy, sell,
lend and otherwise trade in any stocks, bonds and other securities and
investment instruments on behalf of the Portfolio. The investment policies
and all other actions of the Portfolio are and shall at all times be
subject to the control and direction of the Fund's Board of Trustees.
(b) Management Services. The Adviser shall perform (or arrange for the
performance by its affiliates of) the management and administrative
services necessary for the operation of the Fund. The Adviser shall,
subject to the supervision of the Board of Trustees, perform various
services for the Portfolio, including but not limited to: (i) providing
the Portfolio with office space, equipment and facilities (which may be its
own) for maintaining its organization; (ii) on behalf of the Portfolio,
supervising relations with, and monitoring the performance of, custodians,
depositories, transfer and pricing agents, accountants, attorneys,
underwriters, brokers and dealers, insurers and other persons in any
capacity deemed to be necessary or desirable; (iii) preparing all general
shareholder communications, including shareholder reports; (iv) conducting
shareholder relations; (v) maintaining the Fund's existence and its
records; (vi) during such times as shares are publicly offered, maintaining
the registration and qualification of the Portfolio's shares under federal
and state law; and (vii) investigating the development of and developing
and implementing, if appropriate, management and shareholder services
designed to enhance the value or convenience of the Portfolio as an
investment vehicle.
The Adviser shall also furnish such reports, evaluations, information or
analyses to the Fund as the Fund's Board of Trustees may request from time
to time or as the Adviser may deem to be desirable. The Adviser shall make
recommendations to the Fund's Board of Trustees with respect to Fund
policies, and shall carry out such policies as are adopted by the Trustees.
The Adviser shall, subject to review by the Board of Trustees, furnish such
other services as the Adviser shall from time to time determine to be
necessary or useful to perform its obligations under this contract.
(c) The Adviser undertakes (i) to furnish, either itself or through an
affiliated or non-affiliated company, shareholder and dividend disbursing
services and portfolio and general accounting record maintenance, and (ii)
to pay all expenses involved in the operation of the Portfolio, except
taxes, the fees and expenses of all Trustees of the Fund who are not
"interested persons" of the Fund or of the Adviser, brokerage fees and
commissions, and such non-recurring and extraordinary expenses as may
arise, including actions, suits or proceedings to which the Portfolio is or
is threatened to be party and the legal obligations which the Portfolio may
have to indemnify the Fund's Trustees and officers with respect thereto,
which expenses shall be paid by the Portfolio. It is understood that
charges billed directly to shareholders of the Portfolio including charges
for sub-accounting services, shall not be payable by the Adviser. The
Adviser shall, in acting hereunder, be an independent contractor. The
Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees and officers of the Fund are or may
be or become interested in the Adviser as directors, officers or otherwise
and that directors, officers and stockholders of the Adviser are or may be
or become similarly interested in the Fund, and that the Adviser may be or
become interested in the Fund as a shareholder or otherwise.
3. For the services and facilities to be furnished hereunder, the Adviser
shall receive a monthly advisory and service fee at the Annual rate of
45/100 of 1% of the average daily net assets of the Portfolio (computed in
the manner set forth in the Declaration of Trust) throughout the month;
provided that the fee, so computed, shall be reduced by the compensation,
including reimbursement of expenses, paid by the Portfolio to those
Trustees who are not "interested persons" of the Fund or the Adviser. In
case of initiation or termination of this Contract during any month, the
fee for that month shall be reduced proportionately on the basis of the
number of business days during which it is in effect and the fee computed
upon the average net assets for the business days it is so in effect for
that month.
4. The services of the Adviser to the Portfolio are not to be deemed to
be exclusive, the Adviser being free to render services to others and
engage in other activities, provided, however, that such other services and
activities do not, during the term of this Contract, interfere, in a
material manner, with the Adviser's ability to meet all of its obligations
with respect to rendering services to the Portfolio hereunder. In the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Adviser,
the Adviser shall not be subject to liability to the Portfolio or to any
shareholder of the Portfolio for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding, or sale of any security.
5. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 5, this Contract shall continue in force until July 31, 1987
and indefinitely thereafter, but only so long as the continuance after such
date shall be specifically approved at least annually by vote of the
Trustees of the Fund or by vote of a majority of the outstanding voting
securities of the Portfolio.
(b) This Contract may be modified by mutual consent, such consent on the
part of the Fund to be authorized by vote of a majority of the outstanding
voting securities of the Portfolio.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of
this paragraph 5, the terms of any continuance or modification of the
Contract must have been approved by the vote of a majority of those
Trustees of the Fund who are not parties to the Contract or interested
persons of any such party, cast in person at a meeting called for the
purpose of voting on such approval.
(d) Either party hereto may, at any time on sixty (60) days' prior
written notice to the other, terminate this Contract, without penalty, by
action of its Trustees or Board of Directors, as the case may be, or with
respect to the Portfolio by vote of a majority of the outstanding voting
securities of the Portfolio. This Contract shall terminate automatically
in the event of its assignment.
6. The Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Fund's Declaration of Trust and
agrees that the obligations assumed by the Fund pursuant to this Contract
shall be limited in all cases to the Portfolio and its assets and the
Adviser shall not seek satisfaction of any such obligation from the
shareholders or any shareholder of the Portfolio or any other Portfolios of
the Fund. In addition the Advisor (sic) shall not seek satisfaction of any
such obligations from the Trustees or any individual Trustee. The Advisor
(sic) understands that the rights and obligations of any Portfolio under
the Declaration of Trust are separate and distinct from those of any and
all other Portfolios.
The terms "vote of a majority of the outstanding voting securities",
"assignment", and "interested persons", when used herein, shall have the
respective meanings specified in the 1940 Act as now in effect or as
hereafter amended, subject however, to such exemptions as may be granted by
the Securities and Exchange Commission.
IN WITNESS WHEREOF the parties hereto have caused this instrument to be
signed in their behalf by their respective officers thereunto duly
authorized, and their respective seals to be hereunto affixed, all as of
the date written above.
FIXED-INCOME PORTFOLIOS
on behalf of Short-Term
Government Series
S E A L By /s/Edward C. Johnson 3d
Edward C. Johnson 3d
President
FIDELITY MANAGEMENT &
RESEARCH COMPANY
S E A L By /s/J. Gary Burkhead
J. Gary Burkhead
President
Exhibit 15(a)
DISTRIBUTION AND SERVICE PLAN
of Short-Term Government Securities Series
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by Rule
12b-1 under the Investment Company Act of 1940 (the "Act") of Short-Term
Government Securities Series (the "Portfolio"), a series of shares of Fixed
Income Portfolios (the "Fund").
2. The Fund has entered into a General Distribution Agreement with respect
to the Portfolio with Fidelity Distributors Corporation (the
"Distributor"), a wholly-owned subsidiary of Fidelity Management & Research
Company (the "Adviser"), under which the Distributor uses all reasonable
efforts, consistent with its other business, to secure purchasers for the
Portfolio's shares of beneficial interest ("shares"). Under the agreement,
the Distributor pays the expenses of printing and distributing any
prospectuses, reports and other literature used by the Distributor,
advertising, and other promotional activities in connection with the
offering of Fund shares for sale to the public. It is understood that the
Adviser may reimburse the Distributor for these expenses from any source
available to it, including advisory and service fees paid to it by the
Portfolio.
3. The Adviser directly, or through the Distributor, may, subject to the
approval of the Trustees, make payments to securities dealers and other
third parties who engage in the sale of shares or who render shareholder
support services, including but not limited to providing office space,
equipment and telephone facilities, answering routine inquiries regarding
the Portfolio, processing shareholder transactions and providing such other
shareholder services as the Fund may reasonably request.
4. The Portfolio will not make separate payments as a result of this Plan
to the Adviser, Distributor or any other party, it being recognized that
the Portfolio presently pays, and will continue to pay, an advisory and
service fee to the Adviser. To the extent that any payments made by the
Portfolio to the Adviser, including payment of advisory and service fees,
should be deemed to be indirect financing of any activity primarily
intended to result in the sale of shares of the Portfolio within the
context of Rule 12b-1 under the Act, then such payments shall be deemed to
be authorized by this Plan.
5. This Plan shall become effective upon first business day of the month
following approval by a vote of at least a "majority of the outstanding
voting securities of the Portfolio" (as defined in the Act), the Plan
having been approved by a vote of a majority of the Trustees of the Fund,
including a majority of Trustees who are not "interested persons" of the
Fund (as defined in the Act) and who have no direct or indirect financial
interest in the operation of this Plan or in any agreements related to this
Plan (the "Independent Trustees"), cast in person at a meeting called for
the purpose of voting on this Plan.
6. This Plan shall, unless terminated as hereinafter provided, remain in
effect until July 31, 1986, and from year to year thereafter; provided,
however, that such continuance is subject to approval annually by a vote of
a majority of the Trustees of the Fund, including a majority of the
Independent Trustees, cast in person at a meeting called for the purpose of
voting on this Plan. This Plan may be amended at any time by the Board of
Trustees, provided that (a) any amendment to authorize direct payments by
the Portfolio to finance any activity primarily intended to result in the
sale of shares of the Portfolio, to increase materially the amount spent by
the Portfolio for distribution, or any amendment of the Advisory and
Service Contract to increase the amount to be paid by the Portfolio
thereunder shall be effective only upon approval by a vote of a majority of
the outstanding voting securities of the Portfolio, and (b) any material
amendments of this Plan shall be effective only upon approval in the manner
provided in the first sentence in this paragraph.
7. This Plan may be terminated at any time, without the payment of any
penalty, by vote of a majority of the Independent Trustees or by a vote of
a majority of the outstanding voting securities of the Portfolio.
8. During the existence of this Plan, the Fund shall require the Advisor
and/or Distributor to provide the Fund, for review by the Fund's Board of
Trustees, and the Trustees shall review, at least quarterly, a written
report of the amounts expended in connection with financing any activity
primarily intended to result in the sale of shares of the Portfolio (making
estimates of such costs where necessary or desirable) and the purposes for
which such expenditures were made.
9. This Plan does not require the Adviser or Distributor to perform any
specific type or level of distribution activities or to incur any specific
level of expenses for activities primarily intended to result in the sale
of shares of the Portfolio.
10. Consistent with the limitation of shareholder liability as set forth
in the Fund's Declaration of Trust, any obligations assumed by the
Portfolio pursuant to this Plan and any agreements related to this Plan
shall be limited in all cases to the Portfolio and its assets, and shall
not constitute obligations of any other series issued by the Fund.
11. If any provision of this Plan shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of the Plan shall not
be affected thereby.
