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. 59 [X]
and
REGISTRATION STATEMENT (No. 811-3737)
UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 59 [X]
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 22, 1997 ) pursuant to paragraph (b).
( ) 60 days after filing pursuant to paragraph (a)(1).
( ) on ( ) pursuant to paragraph (a)(1) of Rule 485.
( ) 75 days after filing pursuant to paragraph (a)(2).
( ) on ( ) pursuant to paragraph (a)(2) 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 31, 1997.
FIDELITY ADVISOR SERIES IV
FIDELITY INSTITUTIONAL SHORT-INTERMEDIATE GOVERNMENT FUND
CROSS-REFERENCE SHEET
Form N-1A Item Number
Part A Prospectus Caption
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1 Cover Page
2 a Expenses
b,c Contents; Who May Want to Invest
3 a,b Financial Highlights
b *
c, d Performance
4 a(i) Charter
a(ii) Investment Principles and Risks; Fundamental Investment Policies
and Restrictions
b Investment Principles and Risks
c Who May Want to Invest; Investment Principles and Risks
5 a Charter
b(i) Cover Page; Charter
b(ii) Charter; Breakdown of Expenses
b(iii) Expenses; Breakdown of Expenses
c,d Charter; Breakdown and Expenses
e Charter; Breakdown of Expenses
f Expenses
g(i) Charter
g(ii) *
5A Performance
6 a(i) Charter
a(ii) How to Buy Shares; How to Sell Shares; Investor Services;
Transaction Details; Exchange Restrictions
a(iii) Charter
b Charter
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
Form N-1A Item Number
Part A Prospectus Caption
7 a Cover Page; Charter
b How to Buy Shares; Transaction Details
c *
d How to Buy Shares
e *
f Breakdown of Expenses
8 How to Sell Shares; Transaction Details; Exchange Restrictions
9 *
</TABLE>
* 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 22, 1997. The
SAI has been filed with the Securities and Exchange Commission (SEC) and is
available along with other related materials on the SEC's Internet Web site
(http:/www.sec.gov). The SAI is incorporated herein by reference (legally
forms a part of the prospectus). For a free copy of either document, call
Fidelity Client Services 82 Devonshire Street, Boston, MA 02109 at the
appropriate number listed below or 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, FEDERAL RESERVE
BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT
TO INVESTMENT RISKS, INCLUDING POSSIBLE
LOSS OF PRINCIPAL AMOUNT INVESTED.
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-0197
7764
FIDELITY
INSTITUTIONAL
SHORT-INTERMEDIATE
GOVERNMENT
FUND
(fund number 662)
A fund of Fidelity Advisor Series IV
The fund seeks a high level of current income in a manner consistent with
preserving principal.
PROSPECTUS
DATED JANUARY 22, 1997(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON,
MA 02109
AND
ANNUAL REPORT
FOR THE PERIOD ENDING
NOVEMBER 30, 1996
CONTENTS
PROSPECTUS
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KEY FACTS WHO MAY WANT TO INVEST
EXPENSES The fund's yearly operating expenses.
FINANCIAL HIGHLIGHTS A summary of the fund's
financial data.
PERFORMANCE How the fund has done over time.
THE FUND IN DETAIL CHARTER How the fund is organized.
INVESTMENT PRINCIPLES AND RISKS The fund's
overall approach to investing.
BREAKDOWN OF EXPENSES How operating costs
are calculated and what they include.
YOUR ACCOUNT TYPES OF ACCOUNTS Different ways to set up your
account, including tax-sheltered retirement plans.
HOW TO BUY SHARES Opening an account and
making additional investments.
HOW TO SELL SHARES Taking money out and closing
your account.
INVESTOR SERVICES Services to help you manage
your account.
SHAREHOLDER AND ACCOUNT POLICIES DIVIDENDS, CAPITAL GAINS, AND TAXES
TRANSACTION DETAILS Share price calculations and
the timing of purchases and redemptions.
EXCHANGE RESTRICTIONS
</TABLE>
ANNUAL REPORT
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PERFORMANCE A-1 How the fund has done over time.
FUND TALK A-4 The manager's review of fund performance,
strategy, and outlook.
INVESTMENT CHANGES A-7 A summary of major shifts in the fund's
investments over the past six months.
INVESTMENTS A-8 A complete list of the fund's investments with their
market values.
FINANCIAL STATEMENTS A-11 Statement of assets and liabilities, operations, and
changes in net assets, as well as financial
highlights.
NOTES A-15 Notes to the financial statements.
REPORT OF INDEPENDENT ACCOUNTANTS A-17 The auditor's opinion.
DISTRIBUTIONS A-18
</TABLE>
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 may pay when you buy or
sell shares of the fund.
Maximum sales charge on purchases and reinvested distributions None
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.
The 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 ).
The following figures are projection s based on historical expenses
adjusted for current fees , and are calculated as a percentage of
average net assets. FMR has entered into arrangements on behalf of the fund
with the fund's custodian and transfer agent whereby interest earned
on uninvested cash balances is used to offset a portion of the fund's
expenses. Including these reductions, the total operating expenses
presented in the table would have been 0.4 4 %.
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 Year 3 Years 5 Years 10 Years
$ 5 $ 14 $ 25 $ 57
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 Coopers & Lybrand L.L.P. , 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.
SELECTED PER-SHARE DATA
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<S><C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1.Years ended November 30
1996 1995 1994B 1993 1992 1991 1990 1989 1988 1987
2.Net asset value, beginning of
$ 9.600 $ 9.210 $ 9.890 $ 9.850 $ 9.770 $ 9.480 $ 9.520 $ 9.440 $ 9.670 $ 10.010
period
3.Income from Investment
Operations
4. Net investment income
.641 .669 .597 .654 .721 .747 .813 .875 .903 .813
5. Net realized and unrealized
(.102) .383 (.665) (.022) .014 .286 (.040) .080 (.230) (.340)
gain (loss)
6. Total from investment
.539 1.052 (.068) .632 .735 1.033 .773 .955 .673 .473
operations
7.Less Distributions
8. From net investment income
(.639) (.662) (.602) (.592) (.655) (.743) (.813) (.875) (.903) (.813)
9. From net realized gain
- -- -- (.010) -- -- -- -- -- -- --
10. Total distributions
(.639) (.662) (.612) (.592) (.655) (.743) (.813) (.875) (.903) (.813)
11.Net asset value, end of period
$ 9.500 $ 9.600 $ 9.210 $ 9.890 $ 9.850 $ 9.770 $ 9.480 $ 9.520 $ 9.440 $ 9.670
12.Total returnA
5.86% 11.79% (.71)% 6.53% 7.72% 11.31% 8.54% 10.61% 7.21% 4.95%
13.RATIOS AND SUPPLEMENTAL DATA
14.Net assets, end of period (000
$ 337,13 $ 348,57 $ 339,78 $ 344,93 $ 188,91 $ 171,22 $ 142,21 $ 151,57 $ 157,74 $ 73,930
omitted)
1 0 8 5 8 8 1 4 8
15.Ratio of expenses to average
.42%C .45% .45% .45% .45% .45% .45% .45% .45% .45%
net assets
16.Ratio of expenses to average
.41%D .45% .45% .45% .45% .45% .45% .45% .45% .45%
net assets after
expense reductions
17.Ratio of net investment
6.95% 7.14% 7.06% 7.14% 7.29% 7.77% 8.65% 9.26% 9.54% 8.30%
income to average net assets
18.Portfolio turnover
141% 214% 303% 351% 355% 192% 252% 689% 462% 309%
</TABLE>
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN.
B EFFECTIVE DECEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
C FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD HAVE
BEEN HIGHER.
D FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
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 through November 30. The tables
below shows the fund's performance over past fiscal years. The chart on
page presents calendar year performance.
AVERAGE ANNUAL TOTAL RETURNS
Fiscal periods ended Past 1 Past 5 Past 10
November 30, 1996 year years years
Institutional Short-Intermediate 5.86% 6.16% 7.32%
Government Fund
CUMULATIVE TOTAL RETURNS
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Fiscal periods ended Past 1 Past 5 Past 10
November 30 , 1996 year years years
</TABLE>
Institutional Short-Intermediate 5.86% 34.85% 102.76
Government Fund %
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment 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.
YEAR-BY-YEAR TOTAL RETURNS
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Calendar years 1987 1988 1989 1990 1991 1992 1993 1994 1995
INSTITUTIONAL SHORT-INTERMEDIATE 5.61 6.54 10.84 9.28 12.74 6.33 5.87 -0.86 12.44
GOVERNMENT FUND % % % % % % % % %
Salomon Bros. Treasury/Agency 4.95 6.19 11.61 9.88 12.92 6.72 6.89 -0.77 12.61
1-5 Year Index % % % % % % % % %
Lipper Short-Inter. U.S. Gov't 3.17 6.47 10.97 9.23 13.22 5.99 7.04 -2.28 12.48
Funds Average % % % % % % % % %
Consumer Price Index 4.43 4.42 4.65 6.11 3.06 2.90 2.75 2.67 2.54
% % % % % % % % %
</TABLE>
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 2, Col: 1, Value: 5.609999999999999
Row: 3, Col: 1, Value: 6.54
Row: 4, Col: 1, Value: 10.84
Row: 5, Col: 1, Value: 9.279999999999999
Row: 6, Col: 1, Value: 12.74
Row: 7, Col: 1, Value: 6.33
Row: 8, Col: 1, Value: 5.87
Row: 9, Col: 1, Value: -0.8600000000000001
Row: 10, Col: 1, Value: 12.44
(LARGE SOLID BOX) INSTITUTIONAL SHORT-
INTERMEDIATE GOVERNMENT
FUND
THE COMPETITIVE FUNDS AVERAGE is the Lipper Short-Intermediate U.S.
Government Funds Average, which currently reflects the performance of over
89 mutual funds with similar objectives. This average published by
Lipper Analytical Services, Inc., excludes the effect of sales charges.
Unlike the fund's returns, the total returns of the comparative index do
not include the effect of any brokerage commissions, transaction fees, or
other costs of investing.
THE SALOMON BROTHERS TREASURY/AGENCY 1-5 YEAR INDEX, is a
market-capitalization weighted index of U.S. Treasury and U.S. Government
agency securities with fixed-rate coupons and weighted average lives
between one and five years.
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 or a free annual report call Fidelity Client Services
at the appropriate number listed on page .
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, 1996, FMR advised funds having approximately 29
million shareholder accounts with a total value of more than
$43 5 billion.
Curt Hollingsworth is Vice President and manager of Institutional
Short-Intermediate Government Fun d , which he has managed since
September 1987. He also manages several other Fidelity funds. 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
THE FUND'S INVESTMENT APPROACH
BOND FUND IN GENERAL. The yield and share price of a bond fund change daily
based on changes in interest rates and market conditions, and in response
to other economic, political or financial events. The types and maturities
of the securities a bond fund purchases and the credit quality of their
issuers will impact a bond fund's reaction to these events.
INTEREST RATE RISK. In general, bond prices rise when interest rates fall
and fall when interest rates rise. Longer-term bonds are usually more
sensitive to interest rate changes. In other words, the longer the maturity
of a bond, the greater the impact a change in interest rates is likely to
have on the bond's price. In addition, short-term interest rates and
long-term interest rates do not necessarily move in the same amount or in
the same direction . A short-term bond tends to react to changes in
short-term interest rates and a long-term bond tends to react to changes in
long-term interest rates.
ISSUER RISK. The price of a bond is affected by the credit quality of its
issuer. Changes in the financial condition of an issuer, changes in general
economic conditions , and changes in specific economic conditions
that affect a particular type of issuer can impact the credit quality of an
issuer. Lower quality bonds generally tend to be more sensitive to these
changes than higher quality bonds.
PREPAYMENT RISK. Many types of debt securities, including mortgage
securities, are subject to prepayment risk. Prepayment risk occurs when the
issuer of a security can prepay principal prior to the security's maturity.
Securities subject to prepayment risk generally offer less potential for
gains during a declining interest rate environment, and similar or greater
potential for loss in a rising interest rate environment. In addition,
prepayment rates, on some securities, such as mortgage securities, can be
unpredictable and result in unexpected volatility.
FIDELITY'S APPROACH TO BOND FUNDS. The total return from a bond includes
both income and price gains or losses. In selecting investments for a bond
fund, FMR considers a bond's expected income together with its potential
for price gains or losses. While income is the most important component of
bond returns over time, a bond fund's emphasis on income does not mean the
fund invests only in the highest-yielding bonds available, or that it can
avoid losses of principal.
FMR focuses on assembling a portfolio of income-producing bonds that it
believes will provide the best balance between risk and return within the
range of eligible investments for the fund. FMR's evaluation of a potential
investment includes an analysis of the credit quality of the issuer, its
structural features, its current price compared to FMR's estimate of its
long-term value, and any short-term trading opportunities resulting from
market inefficiencies.
In structuring a bond fund, FMR allocates assets among different market
sectors (for example, U.S. Treasury or U.S. Government agency securities)
and different maturities based on its view of the relative value of each
sector or maturity. The performance of the fund will depend on how
successful FMR is in pursuing this approach.
INSTITUTIONAL SHORT-INTERMEDIATE GOVERNMENT seeks a high level of
current income in a manner consistent with preserving principal.
The fund normally invests only in U.S. Government securities, repurchase
agreements, and other instruments related to U.S. Government securities.
Under normal conditions, the fund will invest at least 65% of its total
assets in U.S. Government securities and repurchase agreements for U.S.
Government securities. Other instruments may include futures or options on
U.S. Government securities or interests in U.S. Government securities that
have been repackaged by dealers or other third parties. It is important to
note that neither the fund's share price s nor yield are
guaranteed by the U.S. Government.
Although the fund can invest in securities of any maturity, the fund
maintains a dollar weighted average maturity of two to five years. As of
November 30, 1996, the fund's dollar-weighted average maturity was
approximately 3.4 years. (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.)
FMR may use various techniques to hedge a portion of the fund's risks, but
there is no guarantee that these strategies will work as intended. When you
sell your shares of the fund, they may be worth more or less than what you
paid for them.
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. Fund holdings and recent investment strategies are detailed in the
fund's financial reports, which are sent to shareholders twice a year. For
a free SAI, call Fidelity Client Services at the appropriate number listed
on page .
DEBT SECURITIES. Bonds and other debt instruments are used by issuers to
borrow money from investors. The issuer generally pays the investor a
fixed, variable, or floating 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 sold at a discount from
their face values.
Debt securities have varying levels of sensitivity to changes in interest
rates and varying degrees of credit quality. In general, bond prices rise
when interest rates fall, and fall when interest rates rise. Longer-term
bonds and zero coupon bonds are generally mores sensitive to interest rate
changes. In addition, the credit quality of a debt security impacts its
price.
U.S. GOVERNMENT SECURITIES are high-quality debt instruments 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, U.S. Government
securities such as those issued by the Federal National Mortgage
Association are supported by the instrumentality's right to borrow money
from the U.S. Treasury under certain circumstances. Other U.S. Government
securities such as those issued by the Federal Farm Credit Banks Funding
Corporation are supported only by the credit of the entity that issued
them.
ASSET-BACKED SECURITIES include interests in pools of debt securities,
commercial or consumer loans, or other receivables. The value of these
securities depends on many factors, including changes in interest rates,
the availability of information concerning the pool and its structure,
prepayment expectations, the credit quality of the underlying assets, the
market's perception of the services of the pool and any credit enhancement
provided.
MORTGAGE SECURITIES are interests in pools of commercial or residential
mortgages, and may include complex instruments such as collateralized
mortgage obligations and stripped mortgage-backed securities. Mortgage
securities may be issued by agencies or instrumentalities of the U.S.
Government or by private entities.
The price 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 price highly volatile. Also, mortgage securities, especially
stripped mortgage-backed securities, are subject to prepayment risk. During
periods of declining interest rates, borrowers are more likely to prepay
their mortgages. Prepayments can limit price appreciation and result in
proceeds generally being reinvested in lower-yielding securities.
STRIPPED SECURITIES are the separate income or principal components of a
debt security. The risks associated with stripped securities are similar to
those of other debt securities, although stripped securities may be more
volatile, and the value of certain types of stripped securities may move in
the same direction as interest rates. U.S. Treasury securities that have
been stripped by a Federal Reserve Bank are obligations issued by the U.S.
Treasury.
REPURCHASE AGREEMENTS. In a repurchase agreement, a 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 a 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 AND RESTRICTED 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.
The sale of some illiquid securities, and some other securities, may be
subject to legal restrictions. Difficulty in selling securities may result
in a loss or may be costly to a fund.
RESTRICTIONS: A fund may not purchase a security if, as a result, more than
10% of its assets would be invested in illiquid securities.
WHEN-ISSUED AND FORWARD PURCHASE OR SALE TRANSACTIONS are trading practices
in which payment and delivery for the security take place at a future date
than is customary for that type of security. The price of the security
could change during this period.
CASH MANAGEMENT. The fund may invest in money market securities, in
repurchase agreements, and in a money market fund available only to funds
and accounts managed by FMR or its affiliates, whose goal is to seek a high
level of current income while maintaining a stable $1.00 share price. A
major change in interest rates or a default on the money market fund's
investments could cause its share price to change.
BORROWING. A fund may borrow from banks or from other funds advised by FMR,
or through reverse repurchase agreements. If a 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.
RESTRICTIONS: A fund may borrow only for temporary or emergency purposes,
but not in an amount exceeding 331/3% of its total assets.
LENDING. 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 a fund's securities. A fund may also lend money to other funds
advised by FMR.
RESTRICTIONS: Loans, in the aggregate, may not exceed 331/3% of a 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 331/3% of its total assets.
Loans, in the aggregate, may not exceed 331/3% 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 Company, Inc. (FSC)
calculates the net asset value per share (NAV) and dividends for the fund,
and maintains the fund's general accounting records.
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 authorized such payments.
The fund also 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
1996 was 141%. 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 investment professional, your investment
professional, including a broker-dealer or financial institution, may
charge you a transaction fee with respect to the purchase and sale of fund
shares. Read your investment professional'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.
The different ways to set up (register) your account with Fidelity are
listed below.
The account guidelines that follow may not apply to certain retirement
accounts. If you are investing through a retirement account or if your
employer offers the fund through a retirement program, you may be subject
to additional fees. For more information, please refer to your program
materials, contact your employer, or call your retirement benefits number
or Fidelity Client Services directly , as appropriate.
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 .
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 , 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 401(k) Plan
employer/company sponsored IRA programs, Thrift, Keogh or Corporate
Profit-Sharing or Money-Purchase Plans are 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 . NAV is normally calculated at 4:00 p.m.
Eastern time.
Share certificates are not available for 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 on page . If there is no account application accompanying this
prospectus, call Fidelity Client Services.
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) Place an order and 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
For Fidelity IRA, Rollover IRA, SEP-IRA and Keogh accounts
$ 500
TO ADD TO AN ACCOUNT $2,500
For Fidelity IRA, Rollover IRA, SEP-IRA and Keogh accounts
$ 250
MINIMUM BALANCE $40,000
For Fidelity IRA, Rollover IRA, SEP-IRA and Keogh accounts
$ 500
There is no minimum account balance or initial or subsequent investment
minimums for certain retirement accounts funded through salary reduction,
or accounts opened with the proceeds of distributions from such Fidelity
retirement accounts. Refer to the program materials for details.
FOR INFORMATION OR ASSISTANCE IN OPENING A NEW ACCOUNT:
INITIAL INVESTMENT Corporate Retirement Plans 800-962-1375
(Fidelity Client Services) "Not for Profit" Retirement Plans 800-343-0860
Financial and Other Institutions 800-843-3001
ADDITIONAL INVESTMENT Corporate Retirement Plans 800-962-1375
(Fidelity Client Services) "Not for Profit" Retirement Plans 800-343-0860
Financial and Other Institutions 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.
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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 Fund." Indicate your fund account
Fund." Mail to the address indicated number on your check and mail to
on the application. the address printed on your account
statement.
(small solid bullet) Exchange by mail: call Fidelity Client
Services for instructions.
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Wire (wire_graphic) (small solid bullet) Call Fidelity Client Services at the (small solid bullet) You must sign up for
the wire
appropriate number listed above to feature before using it. Call Fidelity
set up your account and to arrange a Client Services at the appropriate
wire transaction. Not available for number listed above for instructions.
retirement accounts. (small solid bullet) Not available for
retirement
(small solid bullet) Call Fidelity Client Services before accounts.
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 .
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 this page.
TO SELL SHARES IN A FIDELITY RETIREMENT ACCOUNT, your request must be made
in writing, except for exchanges to shares of other Fidelity funds, which
can be requested by phone or in writing.
IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR SHARES, please leave at least
$40,000 worth of shares in the account to keep it open ($500 for
retirement accounts).
TO SELL SHARES BY BANK WIRE, you will need to sign up for this service 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
(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 .
Mail your letter to the following address:
Fidelity Institutional Short-Intermediate Government Fund
P.O. Box 770002
Cincinnati, OH 45277-0081
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.
YOUR INVESTMENT Retirement Account (small solid bullet) You may exchange to other Fidelity
PROFESSIONAL funds if both accounts are
registered with the same name(s),
address, and taxpayer ID number.
(small solid bullet) If you have invested through an
employer-sponsored retirement
plan, contact your employer or call
the appropriate number listed on
page .
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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 or your Fidelity toll-free
Trust retirement number.
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
Business or Organization trust document certified within the
last 60 days with a signature
guarantee letter.
(small solid bullet) At least one person authorized by
corporate resolution to act on the
account must sign the letter (with
signature guarantee).
Wire (wire_graphic) All account types , except retirement (small solid bullet) You must sign up for the wire
feature before using it. Call the
appropriate number listed on page
to verify that it is in place.
Minimum wire: $2,500.
Your wire redemption request must
be received and accepted by the
transfer agent before 4:00 p.m.
Eastern time for money to be wired
on the next business day.
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(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) Account 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 and
prospectuses will be mailed, even if you have more than one account in the
fund. Call Fidelity Client Services if you need additional copies of
financial reports and prospectuses.
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 .
SYSTEMATIC WITHDRAWAL PLANS let you set up periodic redemptions from your
account.
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, all distributions are automatically reinvested.
When you are over 59 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.
For the fiscal year ended November 30, 1996, 47.47% of Institutional
Short-Intermediate Government 's income distributions was derived from
interest on U.S. Government securities which is generally exempt from state
income tax.
Every January, Fidelity will send you and the 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, it 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 when the fund has realized but not
yet distributed capital gains, 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. Short-term securities with remaining maturities of sixty
days or less for which quotations are not readily available are valued on
the basis of amortized cost. This method minimizes the effect of changes in
a security's market value. In addition, i f quotations are not readily
available, assets may be 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 . 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 . 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) Other Purchases: You begin to earn dividends as of the
first business day following the day of your purchase.
(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 day your funds are received and accepted.
CONFIRMED PURCHASES. 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 . 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 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
available 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
coincides 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
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10 a,b Cover Page
11 Cover Page
12 Description of the Trust
13 a,b,c Investment Policies and Limitations
d Portfolio Transactions
14 a,b,c Trustees and Officers
15 a *
b,c Trustees and Officers
16 a(i) FMR; Portfolio Transactions
a(ii) Trustees and Officers
a(iii),b Management Contract
c,d Contracts with FMR Affiliates
e *
f Distribution and Service Plan
g *
h Description of the Trust
i 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 Financial Statements
</TABLE>
* Not applicable
FIDELITY INSTITUTIONAL SHORT-INTERMEDIATE GOVERNMENT FUND
A FUND OF FIDELITY ADVISOR SERIES IV
STATEMENT OF ADDITIONAL INFORMATION
JANUARY 22, 1997
This Statement of Additional Information (SAI) is not a prospectus but
should be read in conjunction with the fund's current Prospectus (dated
January 22, 1997). Please retain this document for future reference. The
fund's financial statements and financial highlights, included in the
Annual Report, for the fiscal year ended November 30, 1996 are incorporated
herein by reference. To obtain an additional copy of the Prospectus and
Annual Report, or this SAI, please call the appropriate number listed
below.
For more information or assistance in opening a new account:
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
Distribution and Service Plan
Contracts with FMR Affiliates
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 , Inc. (FIIOC)
CUSTODIAN
The Bank of New York
ISIG-ptb-0197
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 at no additional cost (other
than ancillary transaction and settlement costs) 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 in real
estate investment trusts that are not readily marketable, or to invest in
interests in 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 NYSE or the American Stock Exchange.
Warrants acquired by the fund in units or attached to securities are not
subject to these restrictions.
(viii) 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 Trust 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.
(xi) The fund does not currently intend to (a) purchase securities of other
investment companies, except in the open market where no commission except
the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply (i) to securities received as dividends, through
offers of exchange, or as a result of a reorganization, consolidation, or
merger, or (ii) to securities of other open-end investment companies
managed by FMR or a successor or affiliate purchased pursuant to an
exemptive order granted by the Securities and Exchange Commission (SEC).
For the fund's limitations 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. Government 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 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 securities 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 25% 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; or (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. 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 fund further limits its options and futures investments to options and
futures contracts relating to U.S. Government securities.
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, but it
currently intends to participate in this program only as a borrower.
Interfund borrowings normally extend overnight but can have a maximum
duration of seven days. The fund will borrow through the program only when
the costs are equal to or lower than the costs of bank loans. Loans may be
called on one day's notice, and the fund may have to borrow from a bank at
a higher interest rate if an interfund loan is called or not renewed.
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 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 government
agencies also may be stripped in this fashion.
Privately stripped government securities are created when a dealer deposits
a Treasury security or federal agency security with a custodian for
safekeeping and then sells the coupon payments and principal payment that
will be generated by this security. Proprietary receipts, such as
Certificates of Accrual on Treasury Securities (CATS), Treasury Investment
Growth Receipts (TIGRS), and generic Treasury Receipts (TRs), are stripped
U.S. Treasury securities that are separated into their component parts
through trusts created by their broker sponsors. Bonds issued by 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.
A broker-dealer creates a DERIVATIVE ZERO by separating the interest and
principal components of a U.S. Treasury security and selling them as two
individual securities. CATS, TIGRs, and TRs are examples of derivative
zeros.
The Federal Reserve Bank creates STRIPS by separating the interest and
principal components of an outstanding U.S. Treasury bond and selling them
as individual securities. Bonds issued by the Resolution Funding
Corporation (REFCORP) and the Financing Corporation (FICO) can also be
separated in this fashion. ORIGINAL ISSUE ZEROS are zero coupon securities
originally issued by the U.S. Government, a government agency, or a
corporation in zero coupon form.
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; effect 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
possible 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 of 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.
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 and 1995, the fund's
portfolio turnover rates were 141 % and 214%, 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 the fiscal year ended November 199 6 , 199 5 ,
and 199 4 , the fund paid no brokerage commissions.
During the fiscal year ended November 199 6 , the fund
paid no fees to brokerage firms that provided research services.
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 Co mpany, Inc . (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 prices (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 fund
may use various pricing services or discontinue the use of any pricing
service.
Futures contracts and options are valued on the basis of market quotations,
if available.
Short-term securities with remaining maturities of sixty days or less
for which market quotations are not readily available are valued either at
amortized cost or at original cost plus accrued interest, both of which
approximate current value. In addition, securities and other assets for
which there is no readily available market value may be 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 fund 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 of 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 yield 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 fund's 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 net asset values,
adjusted net asset values, 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 yield and
total returns for periods ended November 30.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Average Annual Total Returns Cumulative Total Returns
Thirty-Da One Five Ten One Five Ten
y Year Years Years Year Years Years
Yield
Institutional
Short-Intermediate 5.91 % 5.86 % 6.16 % 7.32 % 5.86 % 34.85 % 102.76 %
Government Fund
</TABLE>
Note: If FMR had not reimbursed certain fund expenses, the one year
total returns would have been lower.
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 & Poor's 500 Index (S&P 500(registered trademark)), the Dow
Jones Industrial Average (DJIA), and the cost of living, as 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 how the fund's total
return compared to the record of a broad unmanaged index of common stocks
and a narrower set of stocks of major industrial companies, respectively,
over the same period. Because 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. The S&P 500 and
DJIA returns are based on the prices of unmanaged groups of stocks and,
unlike the fund's returns, do not include the effect of brokerage
commissions or other costs of investing.
During the ten year period ended November 30, a hypothetical $10,000
investment in Institutional Short-Intermediate Government would have grown
to $ 20,276 , 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.
Tax consequences of different investments have not been factored into the
figures below.
INDICES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Year Value of Value of Value of Total S&P 500 DJIA Cost of
Ended Initial Reinvested Reinvested Value Living
$10,000 Dividend Capital Gain
Investment Distributions Distributions
1996 9,491 10,768 17 20,276 41,258 46,321 14,366
1995 9,590 9,546 17 19,154 32,268 35,282 13,913
1994 9,201 7,916 16 17,133 23,557 25,366 13,578
1993 9,880 7,375 0 17,255 23,313 24,318 13,207
1992 9,840 6,357 0 16,197 21,174 21,201 12,862
1991 9,760 5,277 0 15,037 17,869 18,029 12,482
1990 9,471 4,037 0 13,508 14,846 15,414 12,120
1989 9,510 2,936 0 12,446 15,382 15,676 11,404
1988 9,431 1,821 0 11,252 11,756 11,803 10,897
1987 9,660 835 0 10,495 9,532 9,875 10,453
</TABLE>
Explanatory Notes: With an initial investment of $10,000 in the fund
on December 1, 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
$ 20,886 . If distributions had not been reinvested, the amount of
distributions earned from the fund over time would have been smaller, and
cash payments for the period would have amounted to $ 7,290 for
dividends and $ 10 for capital gains distributions.
PERFORMANCE COMPARISONS. The fund's performance 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. Generally, Lipper rankings are based on total
return, assume reinvestment of distributions, do not take sales charges or
redemption fees into consideration, and are 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's performance may also be compared to that of a benchmark index
representing the universe of securities in which the fund may invest. The
total return of a benchmark index reflects reinvestment of all dividends
and capital gains paid by securities included in the index. Unlike the
fund's returns, however, the index returns do not reflect brokerage
commissions, transaction fees, or other costs of investing directly in the
securities included in the index.
Institutional Short-Intermediate Government may compare its performance to
that of the Salomon Brothers Treasury/Agency 1-5 Year Index, a market
capitalization weighted index of U.S. Treasury and U.S. Government agency
securities with fixed-rate coupons and weighted average lives between one
and five years. For U.S. Treasury issues, the entry and exit amounts are $1
billion public amount outstanding. For U.S. Government agency issues, the
entry and exit amounts are $100 million and $75 million, respectively.
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 funds may also compare performance to that of other compilations or
indices that may be developed and made available in the future.
A fund may compare its performance or the performance of securities in
which it may invest to averages published by IBC Financial Data,
Inc. of Ashland, Massachusetts. These averages assume reinvestment of
distributions. IBC 's MONEY FUND REPORT
AVERAGES(trademark)/All Taxable, which is reported in IBC's
MONEY FUND REPOR TTM, covers over 815 taxable money market funds.
IBC's Bond Fund Report AverageS(trademark)/All Taxable, which is
reported in IBC's BOND FUND REPOR TTM , covers over 523
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; saving
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 various 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
ability to continue purchasing shares during periods of low price levels.
The 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, FMR advised over $ 28 billion in tax-free fund
assets, $ 94 billion in money market fund assets, $ 308 billion
in equity fund assets, $ 60 billion in international fund assets, and
$ 24 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, each fund may compare its total
expense ratio to the average total expense ratio of similar funds tracked
by Lipper. A 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 1997: 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 that 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. Government 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.
As of the fiscal year ended November 30, 1996, the fund had a capital loss
carryforward aggregating approximately $ 22,273,000. This loss
carryforward, of which $ 14,816,000, $ 3,288,000, and
$4,169,000 will expire on the fiscal years ended 2002, 2003, and
2004 , respectively, is available to offset future 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. Government securities. Some
states limit this to mutual funds that invest a certain amount in U.S.
Government 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. Government securities in the fund's portfolio. Because the income
earned on most U.S. Government 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.
Government 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 its division , 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 Investment Company Act of 1940) 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 (66), 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 (55), 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 (64), Trustee (1991), is a management consultant (1994). Prior
to February 1994, he was President of Greenhill Petroleum Corporation
(petroleum exploration and production). 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), CH2M Hill Companies (engineering), Rio Grande,
Inc. (oil and gas production), and Daniel Industries (petroleum measurement
equipment manufacturer). In addition, he is a member of advisory boards of
Texas A&M University and the University of Texas at Austin.
PHYLLIS BURKE DAVIS (64), 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), and 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.
E. BRADLEY JONES (68), Trustee. 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), 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 (63), 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 Chairman of the Board of Directors of the National
Arts Stabilization Fund, Chairman of the Board of Trustees of the Greenwich
Hospital Association, a Member of the Public Oversight Board of the
American Institute of Certified Public Accountants' SEC Practice Section
(1995), and as a Public Governor of the National Association of Securities
Dealers, Inc. (1996).
*PETER S. LYNCH (53), Trustee, 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 (1989) and Society
for the Preservation of New England Antiquities, and as an Overseer of the
Museum of Fine Arts of Boston.
GERALD C. McDONOUGH (67), Trustee and Vice-Chairman of the non-interested
Trustees, 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 Brush-Wellman Inc. (metal
refining), York International Corp. (air conditioning and refrigeration),
Commercial Intertech Corp. (hydraulic systems, building systems, and metal
products, 1992), CUNO, Inc. (liquid and gas filtration products, 1996), and
Associated Estates Realty Corporation (a real estate investment trust,
1993). Mr. McDonough served as a Director of ACME-Cleveland Corp. (metal
working, telecommunications, and electronic products) from 1987-1996.
MARVIN L. MANN (63), 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.
WILLIAM O. McCOY (62), Trustee (1997), is the Vice President of Finance for
the University of North Carolina (16-school system, 1995). Prior to his
retirement in December 1994, Mr. McCoy was Vice Chairman of the Board of
BellSouth Corporation (telecommunications) and President of BellSouth
Enterprises. He is currently a Director of Liberty Corporation (holding
company), Weeks Corporation of Atlanta (real estate, 1994), and Carolina
Power and Light Company (electric utility, 1996). Previously, he was a
Director of First American Corporation (bank holding company, 1979-1996).
In addition, Mr. McCoy serves as a member of the Board of Visitors for the
University of North Carolina at Chapel Hill (1994) and for the Kenan Flager
Business School (University of North Carolina at Chapel Hill).
THOMAS R. WILLIAMS (67), 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. (57), Vice President, is Vice President of Fidelity's
fixed-income (1995) funds and Senior Vice President of FMR (1995).
CURTIS HOLLINGSWORTH (39), Vice President, is Vice President and manager of
the fund. He also manages several other Fidelity funds. Since joining
Fidelity in 1983, Mr . Hollingsworth has worked as a manager.
ARTHUR S. LORING (48), 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 (49), 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 (50), Assistant Treasurer, is an employee of FMR.
LEONARD M. RUSH (50), 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) and Chief
Financial Officer of Fidelity Brokerage Services, Inc. (1990-1993).
The following table sets forth information describing the compensation of
each Trustee of the fund for his or her services as trustee for the
fiscal year ended November 30, 1996.
COMPENSATION TABLE
<TABLE>
<CAPTION>
<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* Complex*
Expenses from the
Fund Complex*
J. Gary Burkhead ** $ 0 $ 0 $ 0 $ 0
Ralph F. Cox 116 5,200 52,000 1 32 , 5 00
Phyllis Burke Davis 113 5,200 52,000 12 9 , 5 00
Richard J. Flynn *** 149 0 52,000 16 8 , 0 00
Edward C. Johnson 3d ** 0 0 0 0
E. Bradley Jones 115 5,200 49,400 12 9 , 5 00
Donald J. Kirk 116 5,200 52,000 1 31 , 0 00
Peter S. Lynch ** 0 0 0 0
Gerald C. McDonough 114 5,200 52,000 1 31 ,000
Edward H. Malone *** 114 5,200 44,200 1 31 ,000
Marvin L. Mann 114 5,200 52,000 12 9 , 5 00
William O. McCoy (double dagger) 62 N/A N/A 85,333
Thomas R. Williams 114 5,200 52,000 1 31 ,000
</TABLE>
* Information is as of December 31, 1996 for 235 funds in the
complex.
** Interested trustees of the fund are compensated by FMR.
*** Prior to December 31, 1996, Richard J. Flynn and Edward H. Malone
served on the Board of Trustees.
(double dagger) During the period from May 1, 1996 through December 31,
1996, William O. McCoy served as a Member of the Advisory Board.
The non-interested Trustees may elect to defer receipt of all or a
percentage of their annual fees in accordance with the terms of a Deferred
Compensation Plan (the Plan). Under the Plan, compensation deferred by a
Trustee is periodically adjusted as though an equivalent amount had been
invested and reinvested in shares of one or more funds in the complex
designated by such Trustee (designated securities). The amount paid to the
Trustee under the Plan will be determined based upon the performance of
such investments. Deferral of Trustees' fees in accordance with the Plan
will have a negligible effect on the fund's assets, liabilities, and net
income per share, and will not obligate the fund to retain the services of
any Trustee or to pay any particular level of compensation to the Trustee.
The fund may invest in such designated securities under the Plan without
shareholder approval.
Under a retirement program adopted in July 1988 and modified in November
1995, each non-interested Trustee may receive payments from a Fidelity fund
during his or her lifetime based on his or her basic trustee fees and
length of service. The obligation of a fund to make such payments is
neither secured nor funded. A Trustee becomes eligible to participate in
the program at the end of the calender year in which he or she reaches age
72, provided that, at the time of retirement, he or she has served as a
Fidelity fund Trustee 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.
As of December 31, 1996, the Trustees , Members of the Advisory
Board, and officers of the fund owned, in the aggregate, less than
1 % of the fund's total outstanding shares.
As of December 31, 1996, the following owned of record or
beneficially 5% or more of outstanding shares of the fund: Sandia
National Laboratories, Albuquerque, NM; The Walt Disney Company, Burbank,
CA; International Business Machines Corporation, Armank, NY; Reliastar
Life, Minneapolis, MN; and Capital Cities/ABC, Inc., New York, NY.
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 trust 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, provides 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 trust who are not "interested persons"
of the trust or 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, 1996,
1995, and 1994, FMR received $ 1,535,780 , $1,541,845, and $1,589,438,
respectively, after reduction of fees and expenses paid by the fund to the
non-interested Trustees. In addition, for the fiscal year ended November
30, 1996, credits reducing management fees amounted to $141,223.
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.
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, allows the fund and FMR to incur certain expenses that
might be considered to constitute indirect payment by the fund 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.
No payments were made to FDC in the fiscal year ended November 30,
1996.
Prior to approving Plan, 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 September 23, 1987.
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.
CONTRACTS WITH FMR AFFILIATES
FIIOC, an affiliate of FMR, is the transfer, dividend disbursing, and
shareholder servicing agent for shares of the fund.
Under this arrangement FIIOC receives an annual account fee and an
asset-based fee each based on account size and fund type for each retail
account and certain institutional accounts. With respect to certain
institutional retirement accounts, FIIOC receives an annual account fee and
an asset - based fee based on account type or fund type. These annual
account fees are subject to increase based on postal rate changes.
FIIOC bears the expense of typesetting, printing, and mailing prospectuses,
statements of additional information, and all other reports, notices, and
statements to shareholders, with the exception of proxy statements. Also,
FIIOC pays out-of-pocket expenses associated with transfer agent services.
FSC, an affiliate of FMR, performs the calculations necessary to determine
the NAV and dividends for the shares of the fund, and maintains the fund's
accounting records. For pricing and bookkeeping services, FSC receives a
fee based on the fund's average net assets.
FMR must bear the cost of transfer, dividend disbursing, shareholder
servicing and pricing and bookkeeping services 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
Securities 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.
DESCRIPTION OF THE TRUST
TRUST ORGANIZATION. Fidelity Fidelity Institutional Short-Intermediate
Government Fund is a fund of Fidelity Advisor Series IV, an open-end
management investment company organized as a Massachusetts business trust
on May 6, 1983 pursuant to a Declaration of Trust dated May 6, 1983 that
was amended on October 26, 1984, September 30, 1987, December 30, 1988 and
March 16, 1995. On March 3, 1987 the name of the Trust changed from
Fixed-Income Portfolios to Income Portfolios, on December 20, 1991 the name
of the Trust changed from Income Portfolios to Fidelity Income Trust, and
on May 3, 1993, the name of the Trust changed from Fidelity Income Trust to
Fidelity Advisor Series IV. Currently, there are three funds of the trust:
Institutional Short-Intermediate Government Fund, Advisor Intermediate 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 the trust or a
fund, the right of the trust or fund to use the identifying name "Fidelity"
may be withdrawn.
The assets of the trust 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 trust. Expenses with respect to the trust 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 trust, 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 trust, 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 trust is an entity of the type
commonly known as a "Massachusetts business trust." Under Massachusetts
law, shareholders of such a trust may, under certain circumstances, be held
personally liable for the obligations of the trust. The Declaration of
Trust provides that the trust 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
trust or the Trustees include a provision limiting the obligations created
thereby to the trust 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. Each 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
trust or a fund may, as set forth in the Declaration of Trust, call
meetings of the trust or a fund for any purpose related to the trust or
fund, as the case may be, including, in the case of a meeting of the entire
trust, the purpose of voting on removal of one or more Trustees. The trust
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 trust or the fund, as determined by the current value of
each shareholder's investment in the fund or trust. If not so terminated,
the trust and its funds will continue indefinitely. Each fund may invest
all of its assets in another investment company.
CUSTODIAN. The Bank of New York, 110 Washington Street, New York, New York,
is custodian of the assets of the fund. The custodian is responsible for
the safekeeping of a fund's assets and the appointment of any subcustodian
banks and clearing agencies. The custodian takes no part in determining the
investment policies of a fund or in deciding which securities are purchased
or sold by a fund. However, a fund may invest in obligations of its
custodian and may purchase securities from or sell securities to the
custodian. The Chase Manhattan Bank, headquartered in New York, also may
serve as a special purpose custodian of certain assets in connection with
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. Coopers & Lybrand L.L.P., 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, financial highlights for the fiscal year
ended November 30, and the report of the auditors thereon are included in
the fund's Annual Report, 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 time 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, including
collateralized mortgage obligations, and some asset-backed securities 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.
Fidelity Advisor Series IV
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) (1) Financial Statements and Financial Highlights included
in the Annual Report for Fidelity Institutional Short-Intermediate
Government Fund for the fiscal year ended November 30, 1996, are
incorporated herein by reference to the fund's Statement of Additional
Information and were filed on January 21, 1997 for Fidelity Advisor Series
IV (No. 811-3737) pursuant to Rule 30d-1 under the Investment Company Act
of 1940.
(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) of
Post-Effective Amendment No. 45.
(2) By-Laws of the Trust were electronically filed and are incorporated
herein by reference to Exhibit 2(a) of Union Street Trust's (File No.
2-50318) 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 by
reference to Exhibit 4 of 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, was electronically filed and is incorporated herein by reference
to Exhibit 5(a) of Post-Effective Amendment No. 49.
(b) Management Contract between 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) of 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) of 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) of 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) of Post-Effective Amendment No. 41.
(6) (a) General Distribution Agreement between Income Portfolios:
Limited Term Series and Fidelity Distributors Corporation 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) of Post-Effective Amendment No. 46.
(b) General Distribution Agreement between Income Portfolios:
Short Government Series and Fidelity Distributors Corporation, 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.
(c) Amendment to the General Distribution Agreements for Income
Portfolios, dated January 1, 1988, was electronically filed and is
incorporated herein by reference to Exhibit 6(b) to Post-Effective
Amendment No. 46.
(d) Amendment to the General Distribution Agreements between
Fidelity Advisor Series IV on behalf of Fidelity Advisor Intermediate Bond,
Fidelity Institutional Short-Intermediate Government Fund, and Fidelity
Real Estate High Income Fund and Fidelity Distributors Corporation, dated
March 14, 1996 and July 15, 1996, are incorporated herein by reference to
Exhibit 6(a) of Fidelity Court Street Trust's Post-Effective Amendment No.
61 (File No. 2-58774).
(e) 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) of Post-Effective Amendment No. 41.
(f) Form of Bank Agency Agreement (most recently revised August,
1996) was electronically filed and is incorporated herein by reference to
Exhibit 6(f) of Post-Effective Amendment No. 58.
(g) Form of Selling Dealer Agreement (most recently revised July,
1996) was electronically filed and is incorporated herein by reference to
Exhibit 6(g) of Post-Effective Amendment No. 58.
(h) Form of Selling Dealer Agreement for Bank Related Transactions
(most recently revised August, 1996) was electronically filed and is
incorporated herein by reference to Exhibit 6(h) of Post-Effective
Amendment No. 58.
(7) (a) Retirement Plan for Non Interested Person Trustees, Directors
or General Partners, as amended on November 16, 1995 was electronically
filed and is incorporated herein by reference to Exhibit 7(a) to Fidelity
Select Portfolio's (File No. 2-69972) Post-Effective Amendment No. 54.
(b) The Fee Deferral Plan for Non-Interested Person Directors and
Trustees of the Fidelity Funds, effective as of December 1, 1995 was
electronically filed and is incorporated herein by reference to Exhibit
7(b) to Fidelity School Street Trust's (File No. 2-57167) Post-Effective
Amendment No. 47.
(8) (a) Custodian Agreement and Appendix C, dated December 1, 1994,
between The Bank of New York and Fidelity Advisor Series IV on behalf of
Fidelity Advisor Intermediate Bond Fund, Fidelity Institutional
Short-Intermediate Government Fund, and Fidelity Real Estate High Income
Fund is incorporated herein by reference to Exhibit 8(a) of Fidelity
Hereford Street Trust's Post-Effective Amendment No. 4 (File No. 33-52577).
(b) Appendix A, dated August 31, 1996, to the Custodian Agreement,
dated December 1, 1994, between The Bank of New York and Fidelity Advisor
Series IV on behalf of Fidelity Advisor Intermediate Bond Fund, Fidelity
Institutional Short-Intermediate Government Fund, and Fidelity Real Estate
High Income Fund is incorporated herein by reference to Exhibit 8(b) of
Daily Money Fund's Post-Effective Amendment No. 40 (File No. 2-77909).
(c) Appendix B, dated July 31, 1996, to the Custodian Agreement,
dated December 1, 1994, between The Bank of New York and Fidelity Advisor
Series IV on behalf of Fidelity Advisor Intermediate Bond Fund, Fidelity
Institutional Short-Intermediate Government Fund, and Fidelity Real Estate
High Income Fund is incorporated herein by reference to Exhibit 8(b) of
Fidelity Income Fund's Post-Effective Amendment No. 35 (File No. 2-92661).
(d) Fidelity Group Repo Custodian Agreement among The Bank of New
York, J. P. Morgan Securities, Inc., and the Registrant, dated February 12,
1996, is incorporated herein by reference to Exhibit 8(d) to Fidelity
Institutional Cash Portfolios Trust's (File No. 2-74708) Post-Effective
Amendment No. 31.
(e) Schedule 1 to the Fidelity Group Repo Custodian Agreement
among The Bank of New York, J. P. Morgan Securities, Inc., and the
Registrant, dated February 12, 1996, is incorporated herein by reference to
Exhibit 8(e) to Fidelity Institutional Cash Portfolios Trust's
Post-Effective Amendment No. 31.
(f) Fidelity Group Repo Custodian Agreement among The Chase
Manhattan Bank, Greenwich Capital Markets, Inc., and the Registrant, dated
November 13, 1995, is incorporated herein by reference to Exhibit 8(f) to
Fidelity Institutional Cash Portfolios Trust's Post-Effective Amendment No.
31.
(g) Schedule 1 to the Fidelity Group Repo Custodian Agreement
among The Chase Manhattan Bank and the Registrant, dated November 13, 1995,
is incorporated herein by reference to Exhibit 8(g) to Fidelity
Institutional Cash Portfolios Trust's Post-Effective Amendment No. 31.
(h) Joint Trading Account Custody Agreement between the The Bank
of New York and the Registrant, dated May 11, 1995, is incorporated herein
by reference to Exhibit 8(h) to Fidelity Institutional Cash Portfolios
Trust's Post-Effective Amendment No. 31.
(i) First Amendment to Joint Trading Account Custody Agreement
between the The Bank of New York and the Registrant, dated July 14, 1995,
is incorporated herein by reference to Exhibit 8(i) of Fidelity
Institutional Cash Portfolios Trust's Post-Effective Amendment No. 31.
(9) Not applicable.
(10) Not applicable.
(11) Consent of Coopers & Lybrand L.L.P. is filed herein as Exhibit 11.
(12) Not applicable
(13) Not applicable.
(14) (a) Fidelity Institutional Individual Retirement Account Custodial
Agreement and Disclosure Statement, as currently in effect, was
electronically filed and is incorporated herein by reference to Exhibit
14(d) of Fidelity Union Street Trust's Post-Effective Amendment No. 87.
(b) Plymouth Investments Defined Contribution Retirement Plan
and Trust Agreement, as currently in effect, was electronically filed and
is incorporated herein by reference to Exhibit 14(o) of Fidelity's
Commonwealth Trust's (File No. 2-52322) Post-Effective Amendment No. 57.
(c) The Institutional Prototype Plan Basic Plan Document,
Standardized Adoption Agreement, as currently in effect, was electronically
filed and is incorporated herein by reference to Exhibit 14(o) of
Fidelity's Securities Fund's (File No. 2-93601) Post-Effective Amendment
No. 33.
(d) Fidelity Advisor Funds Individual Retirement Account
Custodial Agreement and Disclosure Statement, as currently in effect, were
electronically filed and are incorporated herein by reference to Exhibit
14(b) of Fidelity Advisor Series V Trust's (File No. 33-9148)
Post-Effective Amendment No. 20.
(e) Fidelity 403(b)(7) Custodial Account Agreement, as
currently in effect, was electronically filed and is incorporated herein by
reference to Exhibit 14(e) of Fidelity Union Street Trust's (File No.
2-50318) Post-Effective Amendment No. 87.
(f) National Financial Services Corporation Defined
Contribution Retirement Plan and Trust Agreement, as currently in effect,
was electronically filed and is incorporated herein by reference to Exhibit
14(k) of Fidelity Union Street Trust's (File No. 2-50318) Post-Effective
Amendment No. 87.
(g) The CORPORATEplan for Retirement Profit Sharing/401K Plan,
as currently in effect, was electronically filed and is incorporated herein
by reference to Exhibit 14(l) of Fidelity Union Street Trust's (File No.
2-50318) Post-Effective Amendment No. 87.
(h) The CORPORATEplan for Retirement Money Purchase Pension
Plan, as currently in effect, was electronically filed and is incorporated
herein by reference to Exhibit 14(m) of Fidelity Union Street Trust's (File
No. 2-50318) Post-Effective Amendment No. 87.
(i) Fidelity Investments Section 403(b)(7) Individual Custodial
Account Agreement and Disclosure Statement, as currently in effect, was
electronically filed and is incorporated herein by reference to Exhibit
14(f) of Fidelity Commonwealth Trust's (File No. 2-52322) Post-Effective
Amendment No. 57.
(j) Plymouth Investments Defined Contribution Retirement Plan
and Trust Agreement, as currently in effect, was electronically filed and
is incorporated herein by reference to Exhibit 14(o) of Fidelity
Commonwealth Trust's (File No. 2-52322) Post-Effective Amendment No. 57.
(k) The Fidelity Prototype Defined Benefit Pension Plan and
Trust Basic Plan Document and Adoption Agreement, as currently in effect,
was electronically filed and is incorporated herein by reference to Exhibit
14(d) of Fidelity Securities Fund's (File No. 2-93601) Post-Effective
Amendment No. 33.
(l) The Institutional Prototype Plan Basic Plan Document,
Standardized Adoption Agreement, and Non-Standardized Adoption Agreement,
as currently in effect, was electronically filed and is incorporated herein
by reference to Exhibit 14(o) of Fidelity Securities Fund's (File No.
2-93601) Post-Effective Amendment No. 33.
(m) The CORPORATEplan for Retirement 100SM Profit
Sharing/401(k) Basic Plan Document, Standardized Adoption Agreement, and
Non-Standardized Adoption Agreement, as currently in effect, was
electronically filed and is incorporated herein by reference to Exhibit
14(f) of Fidelity Securities Fund's (File No. 2-93601) Post-Effective
Amendment No. 33.
(n) The Fidelity Investments 401(a) Prototype Plan for
Tax-Exempt Employers Basic Plan Document, Standardized Profit Sharing Plan
Adoption Agreement, Non-Standardized Discretionary Contribution Plan No.
002 Adoption Agreement, and Non-Standardized Discretionary Contribution
Plan No. 003 Adoption Agreement, as currently in effect, was electronically
filed and is incorporated herein by reference to Exhibit 14(g) of Fidelity
Securities Fund's (File No. 2-93601) Post-Effective Amendment No. 33.
(o) Fidelity Investments 403(b) Sample Plan Basic Plan Document
and Adoption Agreement, as currently in effect, was electronically filed
and is incorporated herein by reference to Exhibit 14(p) of Fidelity
Securities Fund's (File No. 2-93601) Post-Effective Amendment No. 33.
(p) Fidelity Defined Contribution Retirement Plan and Trust
Agreement, as currently in effect, was electronically filed and is
incorporated herein by reference to Exhibit 14(c) of Fidelity Securities
Fund's (File No. 2-93601) Post-Effective Amendment No. 33.
(15) (a) Distribution and Service Plan pursuant to Rule 12b-1 for
Short-Term Government Series was electronically filed and is incorporated
herein by reference to Exhibit 15(a) of Post-Effective Amendment No. 49.
(b) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Limited Term Bond Fund: Class T (formerly Class A) was
electronically filed and is incorporated herein by reference to Exhibit
15(b) of 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) of
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) of 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) of 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 to Exhibit 15(f) of Post-Effective
Amendment No. 52.
(g) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Intermediate Bond Fund (formerly Fidelity Advisor Limited
Term Bond Fund): Class A was electronically filed and is incorporated
herein by reference to Exhibit 15(g) of Post-Effective Amendment No. 58.
(16) (a) A schedule for computation of cumulative total return, average
annual return, 30-day yield and tax equivalent yield for bond funds was
electronically filed and is incorporated herein by reference to Exhibit 16
to Post-Effective Amendment No. 46.
(b) A schedule for computation of adjusted net asset value was
electronically filed and is incorporated herein by reference to Exhibit
16(b) to Post-Effective Amendment No. 52.
(17) A Financial Data Schedule for the fund is filed herein as Exhibit
27.
(18) Rule 18f-3 Plan, dated August 1, 1996, was electronically filed and
is incorporated herein by reference to Exhibit 18 of Post-Effective
Amendment No. 55.
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. In
addition, the officers of these funds are substantially identical.
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
December 31, 1996
Title of Class Number of Record Holders
Fidelity Institutional Short-Intermediate Government Fund 506
Fidelity Advisor Intermediate Bond Fund: Class A 68
Fidelity Advisor Intermediate Bond Fund: Class T 15,978
Fidelity Advisor Intermediate Bond Fund: Class B 2,932
Fidelity Advisor Intermediate Bond Fund: Institutional Class 974
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.
Pursuant to Section 11 of the Distribution Agreement, the Registrant
agrees to indemnify and hold harmless the Distributor and each of its
directors and officers and each person, if any, who controls the
Distributor within the meaning of Section 15 of the 1933 Act against any
loss, liability, claim, damages or expense arising by reason of any person
acquiring any shares, based upon the ground that the registration
statement, Prospectus, Statement of Additional Information, shareholder
reports or other information filed or made public by the Registrant
included a materially misleading statement or omission. However, the
Registrant does not agree to indemnify the Distributor or hold it harmless
to the extent that the statement or omission was made in reliance upon, and
in conformity with, information furnished to the Registrant by or on behalf
of the Distributor. The Registrant does not agree to indemnify the parties
against any liability to which they would be subject by reason of willful
misfeasance, bad faith, gross negligence, and reckless disregard of the
obligations and duties under the Distribution Agreement.
Pursuant to the agreement by which Fidelity Investments Institutional
Operations Company, Inc. ("FIIOC") is appointed transfer agent, the
Registrant agrees to indemnify and hold FIIOC harmless against any losses,
claims, damages, liabilities or expenses (including reasonable counsel fees
and expenses) resulting from:
(1) any claim, demand, action or suit brought by any person other than the
Registrant, including by a shareholder, which names FIIOC and/or the
Registrant as a party and is not based on and does not result from FIIOC's
willful misfeasance, bad faith or negligence or reckless disregard of
duties, and arises out of or in connection with FIIOC's performance under
the Transfer Agency Agreement; or
(2) any claim, demand, action or suit (except to the extent contributed to
by FIIOC's willful misfeasance, bad faith or negligence or reckless
disregard of duties) which results from the negligence of the Registrant,
or from FIIOC's acting upon any instruction(s) reasonably believed by it to
have been executed or communicated by any person duly authorized by the
Registrant, or as a result of FIIOC's acting in reliance upon advice
reasonably believed by FIIOC to have been given by counsel for the
Registrant, or as a result of FIIOC's acting in reliance upon any
instrument or stock certificate reasonably believed by it to have been
genuine and signed, countersigned or executed by the proper person.
Item 28. Business and Other Connections of Investment Adviser
(1) FIDELITY MANAGEMENT & RESEARCH COMPANY (FMR)
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>
<CAPTION>
<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 Director of FMR, FMR
Corp., FMR Texas Inc., FMR (U.K.) Inc., and FMR
(Far East) Inc.; Chairman of the Board and
Representative Director of Fidelity Investments Japan
Limited; President and Trustee of funds advised by
FMR.
J. Gary Burkhead President and Director of FMR, FMR Texas Inc., FMR
(U.K.) Inc., and FMR (Far East) Inc.; Managing
Director of FMR Corp.; Senior Vice President and
Trustee of funds advised by FMR.
Peter S. Lynch Vice Chairman of the Board and Director of FMR.
Marta Amieva Vice President of FMR.
Dwight D. Churchill Vice President of FMR.
John D. Crumrine Assistant Treasurer of FMR, FMR (U.K.) Inc., FMR
(Far East) Inc., and FMR Texas Inc.; Vice President
and Treasurer of FMR Corp.
William Danoff Vice President of FMR and of a fund advised by FMR.
Scott E. DeSano Vice President of FMR.
Craig P. Dinsell Vice President of FMR.
Penelope Dobkin Vice President of FMR and of a fund advised by FMR.
George C. Domolky Vice President of FMR.
Larry A. Domash Vice President of FMR.
Bettina Doulton Vice President of FMR and of funds advised by FMR.
Margaret L. Eagle Vice President of FMR and a fund advised by FMR.
Richard B. Fentin Senior Vice President of FMR and Vice President of a
fund advised by FMR.
Gregory Fraser Vice President of FMR and of a fund advised by FMR.
Jay Freedman Assistant Clerk of FMR; Clerk of FMR Corp., FMR
(U.K.) Inc., and FMR (Far East) Inc.; Secretary of
FMR Texas Inc.
Robert Gervis Vice President of FMR.
David L. Glancy Vice President of FMR and of a fund advised by FMR.
Kevin E. Grant Vice President of FMR and of funds advised by FMR.
Michael S. Gray Vice President of FMR and of funds advised by FMR.
Barry A. Greenfield Vice President of FMR and of a fund advised by FMR.
Boyce I. Greer Vice President of FMR.
Bart Grenier Vice President of FMR.
Robert Haber Vice President of FMR.
Richard C. Habermann Senior Vice President of FMR; Vice President of funds
advised by FMR.
William J. Hayes Senior Vice President of FMR; Vice President of
Equity funds advised by FMR.
Richard Hazlewood Vice President of FMR and of a fund advised by FMR.
Fred L. Henning Jr. Senior Vice President of FMR; Vice President of
Fixed-Income funds advised by FMR.
John R. Hickling Vice President of FMR and of a fund advised by FMR.
Robert F. Hill Vice President of FMR; Director of Technical
Research.
Curt Hollingsworth Vice President of FMR and of funds advised by FMR.
Abigail P. Johnson Vice President of FMR and of a fund advised by FMR.
Stephen P. Jonas Vice President of FMR; Treasurer of FMR, FMR
(U.K.) Inc., FMR (Far East) Inc., and FMR Texas Inc.
David B. Jones Vice President of FMR.
Steven Kaye Vice President of FMR and of a fund advised by FMR.
Francis V. Knox Vice President of FMR; Compliance Officer of FMR
(U.K.) Inc.
David P. Kurrasch Vice President of FMR.
Robert A. Lawrence Senior Vice President of FMR; Vice President of High
Income funds advised by FMR.
Alan Leifer Vice President of FMR.
Harris Leviton Vice President of FMR and of a fund advised by FMR.
Bradford E. Lewis Vice President of FMR and of funds advised by FMR.
Arthur S. Loring Senior Vice President, Clerk, and General Counsel of
FMR; Vice President/Legal, and Assistant Clerk of
FMR Corp.; Secretary of funds advised by FMR.
Richard R. Mace Jr. Vice President of FMR and of funds advised by FMR.
Malcolm W. MacNaught II Vice President of FMR and of a fund advised by FMR.
Robert H. Morrison Vice President of FMR; Director of Equity Trading.
David L. Murphy Vice President of FMR and of funds advised by FMR.
Jacques Perold Vice President of FMR.
Anne Punzak Vice President of FMR.
Kenneth A. Rathgeber Vice President of FMR; Treasurer of funds advised by
FMR.
Lee H. Sandwen Vice President of FMR.
Patricia A. Satterthwaite Vice President of FMR and of a fund advised by FMR.
Thomas T. Soviero Vice President of FMR and of a fund advised by FMR.
Richard Spillane Vice President of FMR; Senior Vice President and
Director of Operations and Compliance of FMR (U.K.)
Inc.
Robert E. Stansky Senior Vice President of FMR; Vice President of a
fund advised by FMR.
Thomas Sweeney Vice President of FMR and of a fund advised by FMR.
Beth F. Terrana Senior Vice President of FMR; Vice President of a
fund advised by FMR.
Yoko Tilley Vice President of FMR.
Joel C. Tillinghast Vice President of FMR and of a fund advised by FMR.
Robert Tuckett Vice President of FMR.
Jennifer Uhrig Vice President of FMR and of funds advised by FMR.
George A. Vanderheiden Senior Vice President of FMR; Vice President 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.
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.
Richard 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.
(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.
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.
Item 29. Principal Underwriters
(a) Fidelity Distributors Corporation (FDC) acts as distributor for most
funds advised by FMR.
(b)
Name and Principal Positions and Offices Positions and Offices
Business Address* With Underwriter With Registrant
Edward C. Johnson 3d Director Trustee and President
Michael Mlinac Director None
Mark Peterson Director None
Paul Hondros President None
Arthur S. Loring Vice President and Clerk Secretary
Caron Ketchum Treasurer and Controller None
Gary Greenstein Assistant Treasurer None
Jay Freedman Assistant Clerk None
Linda Holland Compliance Officer None
* 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
Company, Inc., 82 Devonshire Street, Boston, MA 02109, or the fund's
custodian: The Bank of New York, 110 Washington Street, New York, N.Y.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
The Registrant undertakes on behalf of 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) of the 1934 Act, 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.
The Registrant, on behalf of Fidelity Advisor Intermediate Bond Fund,
Fidelity Institutional Short-Intermediate Government Fund and Real Estate
High Income Fund, provided the information required by Item 5A is contained
in the annual report, undertakes to furnish to 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.
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 Aberdeen Street Trust Fidelity Government Securities Fund
Fidelity Advisor Annuity Fund Fidelity Hastings Street Trust
Fidelity Advisor Series I Fidelity Hereford Street Trust
Fidelity Advisor Series II Fidelity Income Fund
Fidelity Advisor Series III Fidelity Institutional Cash Portfolios
Fidelity Advisor Series IV Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Advisor Series V Fidelity Institutional Trust
Fidelity Advisor Series VI Fidelity Investment Trust
Fidelity Advisor Series VII Fidelity Magellan Fund
Fidelity Advisor Series VIII Fidelity Massachusetts Municipal Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust
Fidelity Boston Street Trust Fidelity Mt. Vernon Street Trust
Fidelity California Municipal Trust Fidelity Municipal Trust
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Capital Trust Fidelity New York Municipal Trust
Fidelity Charles Street Trust Fidelity New York Municipal Trust II
Fidelity Commonwealth Trust Fidelity Phillips Street Trust
Fidelity Congress Street Fund Fidelity Puritan Trust
Fidelity Contrafund Fidelity Revere Street Trust
Fidelity Corporate Trust Fidelity School Street Trust
Fidelity Court Street Trust Fidelity Securities Fund
Fidelity Court Street Trust II Fidelity Select Portfolios
Fidelity Covington Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Daily Money Fund Fidelity Summer Street Trust
Fidelity Daily Tax-Exempt Fund Fidelity Trend Fund
Fidelity Destiny Plans Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Destiny Portfolios Fidelity U.S. Investments-Government Securities
Fidelity Deutsche Mark Performance Fund, L.P.
Portfolio, L.P. Fidelity Union Street Trust
Fidelity Devonshire Trust Fidelity Union Street Trust II
Fidelity Exchange Fund Fidelity Yen Performance Portfolio, L.P.
Fidelity Financial Trust Variable Insurance Products Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund II
</TABLE>
plus any other investment company for which Fidelity Management & Research
Company or an affiliate acts as investment adviser and for which the
undersigned individual serves as President and Director, Trustee, or
General Partner (collectively, the "Funds"), hereby constitute and appoint
J. Gary Burkhead my true and lawful attorney-in-fact, with full power of
substitution, and with full power to him to sign for me and in my name in
the appropriate capacity, all Registration Statements of the Funds on Form
N-1A, Form N-8A, Form N-8B-2, or any successor thereto, any and all
subsequent Amendments, Pre-Effective Amendments, or Post-Effective
Amendments to said Registration Statements on Form N-1A or any successor
thereto, 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 deems necessary or appropriate, to comply with the
provisions of the Securities Act of 1933 and the Investment Company Act of
1940, and all related requirements of the Securities and Exchange
Commission. I hereby ratify and confirm all that said attorney-in-fact or
his substitutes may do or cause to be done by virtue hereof. This power of
attorney is effective for all documents filed on or after January 3, 1997.
WITNESS my hand on the date set forth below.
/s/Edward C. Johnson 3d January 3, 1997
Edward C. Johnson 3d
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 Aberdeen Street Trust Fidelity Government Securities Fund
Fidelity Advisor Annuity Fund Fidelity Hastings Street Trust
Fidelity Advisor Series I Fidelity Hereford Street Trust
Fidelity Advisor Series II Fidelity Income Fund
Fidelity Advisor Series III Fidelity Institutional Cash Portfolios
Fidelity Advisor Series IV Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Advisor Series V Fidelity Institutional Trust
Fidelity Advisor Series VI Fidelity Investment Trust
Fidelity Advisor Series VII Fidelity Magellan Fund
Fidelity Advisor Series VIII Fidelity Massachusetts Municipal Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust
Fidelity Boston Street Trust Fidelity Mt. Vernon Street Trust
Fidelity California Municipal Trust Fidelity Municipal Trust
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Capital Trust Fidelity New York Municipal Trust
Fidelity Charles Street Trust Fidelity New York Municipal Trust II
Fidelity Commonwealth Trust Fidelity Phillips Street Trust
Fidelity Congress Street Fund Fidelity Puritan Trust
Fidelity Contrafund Fidelity Revere Street Trust
Fidelity Corporate Trust Fidelity School Street Trust
Fidelity Court Street Trust Fidelity Securities Fund
Fidelity Court Street Trust II Fidelity Select Portfolios
Fidelity Covington Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Daily Money Fund Fidelity Summer Street Trust
Fidelity Daily Tax-Exempt Fund Fidelity Trend Fund
Fidelity Destiny Portfolios Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity U.S. Investments-Government Securities
Portfolio, L.P. Fund, L.P.
Fidelity Devonshire Trust Fidelity Union Street Trust
Fidelity Exchange Fund Fidelity Union Street Trust II
Fidelity Financial Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Variable Insurance Products Fund II
</TABLE>
plus any other investment company for which Fidelity Management & Research
Company or an affiliate acts as investment adviser and for which the
undersigned individual serves as Directors, Trustees, or General Partners
(collectively, the "Funds"), hereby constitute and appoint Arthur J. Brown,
Arthur C. Delibert, Stephanie A. Djinis, Robert C. Hacker, Thomas M.
Leahey, Richard M. Phillips, and Dana L. Platt, 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 Registration Statements of the Funds on Form
N-1A, Form N-8A or any successor thereto, any and all subsequent
Amendments, Pre-Effective Amendments, or Post-Effective Amendments to said
Registration Statements on Form N-1A or any successor thereto, 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
deems necessary or appropriate, to comply with the provisions of the
Securities Act of 1933 and the 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. This power of attorney is
effective for all documents filed on or after January 1, 1997.
WITNESS our hands on this nineteenth day of December, 1996.
/s/Edward C. Johnson 3d___________ /s/Peter S. Lynch________________
Edward C. Johnson 3d Peter S. Lynch
/s/J. Gary Burkhead_______________ /s/William O. McCoy______________
J. Gary Burkhead William O. McCoy
/s/Ralph F. Cox __________________ /s/Gerald C. McDonough___________
Ralph F. Cox Gerald C. McDonough
/s/Phyllis Burke Davis_____________ /s/Marvin L. Mann________________
Phyllis Burke Davis Marvin L. Mann
/s/E. Bradley Jones________________ /s/Thomas R. Williams ____________
E. Bradley Jones Thomas R. Williams
/s/Donald J. Kirk __________________
Donald J. Kirk
POWER OF ATTORNEY
I, the undersigned Treasurer and principal financial and accounting
officer of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Aberdeen Street Trust Fidelity Government Securities Fund
Fidelity Advisor Annuity Fund Fidelity Hastings Street Trust
Fidelity Advisor Series I Fidelity Hereford Street Trust
Fidelity Advisor Series II Fidelity Income Fund
Fidelity Advisor Series III Fidelity Institutional Cash Portfolios
Fidelity Advisor Series IV Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Advisor Series V Fidelity Institutional Trust
Fidelity Advisor Series VI Fidelity Investment Trust
Fidelity Advisor Series VII Fidelity Magellan Fund
Fidelity Advisor Series VIII Fidelity Massachusetts Municipal Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust
Fidelity Boston Street Trust Fidelity Mt. Vernon Street Trust
Fidelity California Municipal Trust Fidelity Municipal Trust
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Capital Trust Fidelity New York Municipal Trust
Fidelity Charles Street Trust Fidelity New York Municipal Trust II
Fidelity Commonwealth Trust Fidelity Phillips Street Trust
Fidelity Congress Street Fund Fidelity Puritan Trust
Fidelity Contrafund Fidelity Revere Street Trust
Fidelity Corporate Trust Fidelity School Street Trust
Fidelity Court Street Trust Fidelity Securities Fund
Fidelity Court Street Trust II Fidelity Select Portfolios
Fidelity Covington Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Daily Money Fund Fidelity Summer Street Trust
Fidelity Daily Tax-Exempt Fund Fidelity Trend Fund
Fidelity Destiny Portfolios Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity U.S. Investments-Government Securities
Portfolio, L.P. Fund, L.P.
Fidelity Devonshire Trust Fidelity Union Street Trust
Fidelity Exchange Fund Fidelity Union Street Trust II
Fidelity Financial Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Variable Insurance Products Fund II
</TABLE>
plus any other investment company for which Fidelity Management & Research
Company or an affiliate acts as investment adviser and for which the
undersigned individual serves as President and Director, Trustee, or
General Partner (collectively, the "Funds"), hereby constitute and appoint
John H. Costello and John E. Ferris each of them singly my true and lawful
attorneys-in-fact, with full power of substitution, and with full power to
each of them to sign for me and in my name in the appropriate capacity, all
Registration Statements of the Funds on Form N-1A, Form N-8A or any
successor thereto, any and all subsequent Amendments, Pre-Effective
Amendments, or Post-Effective Amendments to said Registration Statements on
Form N-1A or any successor thereto, 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 attorneys-in-fact deems necessary or appropriate, to
comply with the provisions of the Securities Act of 1933 and the 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. This power of attorney is effective for all documents filed on or
after January 1, 1997.
WITNESS my hand on the date set forth below.
/s/Kenneth A. Rathgeber__________ December 19, 1996
Kenneth A. Rathgeber
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all
of the requirements for the effectiveness of this Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Post-Effective Amendment No. 59 to the Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized,
in the City of Boston, and Commonwealth of Massachusetts, on the 17th day
of January 1997.
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 January 17, 1997
Edward C. Johnson 3d (Principal Executive Officer)
/s/Kenneth A. Rathgeber * Treasurer January 17, 1997
Kenneth A. Rathgeber
/s/J. Gary Burkhead Trustee January 17, 1997
J. Gary Burkhead
/s/Ralph F. Cox ** Trustee January 17, 1997
Ralph F. Cox
/s/Phyllis Burke Davis ** Trustee January 17, 1997
Phyllis Burke Davis
/s/E. Bradley Jones ** Trustee January 17, 1997
E. Bradley Jones
/s/Donald J. Kirk ** Trustee January 17, 1997
Donald J. Kirk
/s/Peter S. Lynch ** Trustee January 17, 1997
Peter S. Lynch
/s/Marvin L. Mann ** Trustee January 17, 1997
Marvin L. Mann
/s/William O. McCoy ** Trustee January 17, 1997
William O. McCoy
/s/Gerald C. McDonough ** Trustee January 17, 1997
Gerald C. McDonough
/s/Thomas R. Williams ** Trustee January 17, 1997
Thomas R. Williams
</TABLE>
(dagger) Signatures affixed by J. Gary Burkhead pursuant to a power of
attorney dated January 3, 1997 and filed herewith.
* Signature affixed by John H. Costello pursuant to a power of attorney
dated December 19, 1996 and filed herewith.
** Signature affixed by Robert C. Hacker pursuant to a power of attorney
dated December 19, 1996 and filed herewith.
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference, into the Prospectus
and Statement of Additional Information in Post-Effective Amendment No. 59
to the Registration Statement on Form N-1A of Fidelity Advisor Series IV:
Fidelity Institutional Short-Intermediate Government Fund, of our report
dated January 15, 1997 on the financial statements and financial highlights
included in the November 30, 1996 Annual Report to Shareholders of Fidelity
Institutional Short-Intermediate Government Fund.
We further consent to the references to our Firm under the headings
"Financial Highlights" in the Prospectus and "Auditor" in the Statement of
Additional Information.
/S/COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
January 17, 1997
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000719451
<NAME> Fidelity Advisor Series IV
<SERIES>
<NUMBER> 21
<NAME> Fidelity Institutional Short-Intermediate Government Fund
<MULTIPLIER> 1,000
<S>
<C>
<PERIOD-TYPE> year
<FISCAL-YEAR-END> nov-30-1996
<PERIOD-END> nov-30-1996
<INVESTMENTS-AT-COST> 329,489
<INVESTMENTS-AT-VALUE> 334,547
<RECEIVABLES> 4,755
<ASSETS-OTHER> 135
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 339,437
<PAYABLE-FOR-SECURITIES> 2,048
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 258
<TOTAL-LIABILITIES> 2,306
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 353,804
<SHARES-COMMON-STOCK> 35,486
<SHARES-COMMON-PRIOR> 36,300
<ACCUMULATED-NII-CURRENT> 559
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (22,290)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 5,058
<NET-ASSETS> 337,131
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 25,146
<OTHER-INCOME> 0
<EXPENSES-NET> 1,396
<NET-INVESTMENT-INCOME> 23,750
<REALIZED-GAINS-CURRENT> (4,684)
<APPREC-INCREASE-CURRENT> 114
<NET-CHANGE-FROM-OPS> 19,180
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 23,102
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 9,825
<NUMBER-OF-SHARES-REDEEMED> 12,868
<SHARES-REINVESTED> 2,228
<NET-CHANGE-IN-ASSETS> (11,439)
<ACCUMULATED-NII-PRIOR> 484
<ACCUMULATED-GAINS-PRIOR> (18,180)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,536
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,537
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 9.600
<PER-SHARE-NII> .641
<PER-SHARE-GAIN-APPREC> (.102)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> .639
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.500
<EXPENSE-RATIO> 42
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
