SUPPLEMENT TO THE FIDELITY ADVISOR FUNDS
CLASS A, CLASS T, AND CLASS B
FEBRUARY 28,1997 PROSPECTUS
The following information replaces similar information found on the cover
page.
High Yield and Strategic Income may each invest without limitation in
lower-quality debt securities, sometimes called "junk bonds." Investors
should consider that these securities carry greater risks, such as the risk
of default, than other debt securities. Refer to "Investment Principles and
Risks" on page 40 for further information.
The following information replaces similar information found in "Who May
Want to Invest" on page 3.
High Income Municipal, Municipal Bond, Intermediate Municipal Income, and
Short-Intermediate Municipal Income are designed for investors in higher
tax brackets who seek high current income that is free from federal income
tax. Municipal Bond, Intermediate Municipal Income, and Short-Intermediate
Municipal Income also invest consistent with consideration of capital
preservation. High Income Municipal may invest in lower-quality municipal
securities which invoke greater risks than the investment-grade securities.
Effective May 9, 1997, the following information replaces similar
information found in "Who May Want to Invest" beginning on page 3.
Each fund is composed of multiple classes of shares. All classes of a fund
have a common investment objective and investment portfolio. Class A and
Class T shares have a front-end sales charge and pay a distribution fee.
Class T shares may be subject to a contingent deferred sales charge (CDSC).
Class B shares do not have a front-end sales charge, but do have a CDSC,
and pay a distribution fee and a shareholder service fee. Institutional
Class shares have no sales charge and do not pay a distribution fee or a
shareholder service fee, but are available only to certain types of
investors. See "Sales Charge Reductions and Waivers," page 64, for
Institutional Class eligibility information. You may obtain more
information about Institutional Class shares, which are not offered through
this prospectus, by calling 1-800-843-3001 or from your investment
professional.
The performance of one class of shares of a fund may be different from the
performance of another class of shares of the same fund because of
different sales charges and class expenses. Contact your investment
professional to discuss which class is appropriate for you.
In determining which class of shares is appropriate for you, you should
consider, among other factors, the amount you plan to invest, the length of
time you intend to hold your shares, your eligibility for a sales charge
waiver or reduction, and the package of services provided to you by your
investment professional and the overall costs of those services. In
general, Class A shares have higher costs than Class T shares over a short
holding period because Class A shares have a higher front-end sales charge,
and Class A shares have lower costs than Class T shares over a longer
holding period because Class A shares have lower 12b-1 fees. If you are
planning to invest a significant amount either at one time or through a
regular investment program, you should consider the reduced front-end sales
charges available on Class A and Class T shares. See "Transaction Details,"
page 60, and "Sales Charge Reductions and Waivers," page 64, for sales
charge reduction information. If you are eligible for a front-end sales
charge waiver on a purchase of both Class A and Class T shares, Class A
shares generally will have lower costs than Class T shares because Class A
shares have lower 12b-1 fees. However, you should evaluate the overall
costs of purchasing Class A shares or Class T shares in the context of the
package of services provided to you by your investment professional. See
"Sales Charge Reductions and Waivers," page 64, for sales charge waiver
information. If you prefer not to pay a front-end sales charge, you should
consider Class B shares. While Class B shares are subject to higher ongoing
costs than Class A or Class T shares, because of their higher 12b-1 fees,
Class B shares are sold with a CDSC instead of a front-end sales charge so
your entire purchase amount is immediately invested. Please note that
purchase amounts of more than $250,000 will not be accepted for Class B
shares, and that Class A or Class T shares may have lower costs for
investments that qualify for a front-end sales charge reduction or waiver.
If you sell your Class B shares of the Intermediate-Term Bond Funds within
three years or your Class B shares of the Bond Funds and the Equity Funds
within six years, you will normally pay a CDSC that varies depending on how
long you have held your shares. See "Transaction Details," page 60, for
CDSC schedules and related information.
The following information replaces similar information regarding Growth
Opportunities found in "Expenses" on page 5.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
EQUITY FUNDS
Operating Expenses Class Class T Class B
A
GROWTH OPPORTUNITIES Management fee 0.61% 0.61% 0.61%
12b-1 fee (including 0.25% Shareholder 0.25% 0.50% 1.00%
Service Fee for Class B shares)
Other expenses 0.28%[ 0.23% 0.32%
A] [A]
Total operating expenses 1.14% 1.34% 1.93%
</TABLE>
[A] BASED ON ESTIMATED EXPENSES FOR FIRST YEAR.
The following information replaces similar information found in "Expenses"
on page 7.
A portion of the brokerage commissions that certain of the funds pay is
used to reduce fund expenses. In addition, certain funds have entered into
arrangements with their custodian and transfer agent whereby interest
earned on uninvested cash balances is used to reduce custodian and transfer
agent expenses. Including these reductions, the total operating expenses
presented in the preceding tables for the applicable class would have been:
Class Class
T B
Mid Cap 1.60% 2.37%
Equity Growth 1.34% 1.95%
Strategic Opportunities 1.27% 1.79%
Large Cap 2.00% 2.50%
Equity Income 1.26% 1.79%
Balanced 1.20% 1.90%
High Yield 1.11% 1.79%
Strategic Income 1.22% 1.87%
Government Investment 0.99% 1.67%
Intermediate Bond 0.96% 1.66%
Short-Intermediate Municipal Income 0.89% *
California Municipal Income 0.87% 1.62%
New York Municipal Income 0.97% 1.62%
* FUND DOES NOT OFFER CLASS B SHARES
The following information replaces similar information regarding Growth
Opportunities found in "Expenses" on page 8.
EXPENSE TABLE EXAMPLE: You would pay the following expenses, including the
maximum front-end sales charge or CDSC, as applicable, on a $1,000
investment, assuming a 5% annual return and either (1) full redemption or
(2) no redemption, at the end of each time period:
EQUITY FUNDS
Examples
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Full Redemption No
Redempt
ion
Clas Class T Class B Class B
s A
GROWTH OPPORTUNITIES After 1 year $64 $48 $70[A] $20
After 3 years $87 $76 $91[A] $61
After 5 years $112 $106 $124[ $104
A]
After 10 $18 $191 $19 $195
years[B] 4 5
</TABLE>
[A] REFLECTS DEDUCTION OF APPLICABLE CDSC.
[B] REFLECTS CONVERSION OF CLASS B SHARES TO CLASS A SHARES AFTER SEVEN
YEARS.
The following information replaces similar information found in "Expenses"
on page 11.
If these agreements were not in effect, other expenses and total operating
expenses, as a percentage of average net assets, would have been the
following amounts:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Other Expenses Total Operating Expenses
Class Class Class Class Class Class B
A[A] T B A[A] T
Large Cap 0.96 1.34% 2.35% 1.81% 2.44% 3.95%
%
Strategic Income 0.65% (dagger) (dagger) 1.39% (dagger) (dagger)
Mortgage 2.25% 0.53% 1.08% 2.85% 1.23% 2.43%
Securities[A]
Government 0.72 (dagger) 0.43% 1.32% (dagger) 1.78%
Investment %
Intermediate Bond 0.48 (dagger) 0.44% 1.08% (dagger) 1.79%
%
Short Fixed-Income 0.50 (dagger) * 1.10% (dagger) *
%
High Income 0.48 (dagger) (dagger) 1.03% (dagger) (dagger)
Municipal %
Municipal Bond[A] 2.80% 0.37% 0.52% 3.35% 1.02% 1.82%
Intermediate 1.00% 0.39% 0.56% 1.55% 1.04% 1.86%
Municipal Income
Short-Intermediate 1.29% 0.60% * 1.84% 1.15% *
Municipal Income
California Municipal Income[A] 2.01% 0.38% 0.95% 2.50%[B] 1.03% 2.25%
New York Municipal Income 1.95% 1.97% 2.42% 2.50% 2.62% 3.72%
</TABLE>
* FUND DOES NOT OFFER CLASS B SHARES.
[A] BASED ON ESTIMATED EXPENSES FOR THE FIRST YEAR.
[B] LIMITED IN ACCORDANCE WITH A STATE LIMITATION. WITHOUT THIS LIMITATION,
TOTAL OPERATING EXPENSES WOULD BE 2.56% FOR CALIFORNIA MUNICIPAL INCOME,
CLASS A.
(dagger) TOTAL OPERATING EXPENSES WERE LESS THAN THE VOLUNTARY EXPENSE CAPS
IN EFFECT DURING THE FISCAL YEAR ENDED 1996.
The following information replaces similar information found in footnote F
of the "Performance" section on page 36.
[F] CLASS A OF MUNICIPAL BOND IS EXPECTED TO COMMENCE OPERATIONS ON OR
ABOUT FEBRUARY 28, 1997. RETURNS BETWEEN JULY 1, 1996 AND FEBRUARY 28, 1997
ARE THOSE OF CLASS T AND REFLECT CLASS T'S 0.25% 12B-1 FEE. RETURNS PRIOR
TO THAT DATE ARE THOSE OF INITIAL CLASS, THE ORIGINAL CLASS OF THE FUND
WHICH DOES NOT BEAR A 12B-1 FEE. CLASS A'S RETURNS WOULD HAVE BEEN LOWER IF
ITS 12B-1 FEE WAS REFLECTED IN RETURNS PRIOR TO JULY 1, 1996.
INITIAL OFFERING OF CLASS B SHARES OF EQUITY GROWTH TOOK PLACE ON DECEMBER
31, 1996. CLASS B SHARES BEAR A 12B-1 FEE (INCLUDING A SHAREHOLDER
SERVICING FEE), WHICH IS NOT REFLECTED IN PRIOR RETURN DATES. RETURNS
BETWEEN SEPTEMBER 10, 1992 AND DECEMBER 31, 1996 ARE THOSE OF CLASS T AND
REFLECT CLASS T'S APPLICABLE 12B-1 FEE (0.65% PRIOR TO JANUARY 1, 1996).
RETURNS PRIOR TO SEPTEMBER 10, 1992 ARE THOSE OF INSTITUTIONAL CLASS, THE
ORIGINAL CLASS OF THE FUND, WHICH DOES NOT BEAR A 12B-1 FEE. CLASS B
RETURNS WOULD HAVE BEEN LOWER IF ITS 12B-1 FEE (INCLUDING A SHAREHOLDER
SERVICING FEE) HAD BEEN REFLECTED IN PRIOR DATE RETURNS.
INITIAL OFFERING OF CLASS B SHARES OF BALANCED TOOK PLACE ON DECEMBER 31,
1996. CLASS B SHARES BEAR A 12B-1 FEE (INCLUDING A SHAREHOLDER SERVICING
FEE), WHICH IS NOT REFLECTED IN PRIOR RETURN DATES. RETURNS BETWEEN JANUARY
6, 1987 AND DECEMBER 31, 1996 ARE THOSE OF CLASS T AND REFLECT CLASS T'S
APPLICABLE 12B-1 FEE (0.65% PRIOR TO JANUARY 1, 1996). CLASS B RETURNS
WOULD HAVE BEEN LOWER IF ITS 12B-1 FEE (INCLUDING A SHAREHOLDER SERVICING
FEE) HAD BEEN REFLECTED IN PRIOR DATE RETURNS.
Effective April 15, 1997, the following information replaces similar
information under the heading "FMR and Its Affiliates" in the "Charter"
section beginning on page 38.
George Fischer is manager of Advisor Municipal Bond and Advisor High Income
Municipal, which he has managed since October 1995 and April 1997,
respectively. He also manages several other Fidelity funds. Since joining
Fidelity in 1989, Mr. Fischer has worked as an analyst and manager.
The following information supplements similar information found in "FMR and
Its Affiliates" on page 40.
As of January 31, 1997, approximately 29% of New York Municipal Income's
total outstanding shares were held by FMR Corp.
Effective March 17, 1997, the following information replaces similar
information found in "Investment Principles and Risks" on page 43.
HIGH INCOME MUNICIPAL FUND seeks high current income that is free from
federal income tax by investing primarily in investment-grade municipal
securities. The fund may also invest up to 35% of its assets in below
investment-grade securities. FMR normally invests so that at least 80% of
the fund's assets are invested in municipal securities whose interest is
free from federal income tax. In addition, FMR may invest all of the fund's
assets in municipal securities issued to finance private activities. The
interest from these securities is a tax preference item for the purposes of
the federal alternative minimum tax.
Although the fund can invest in securities of any maturity, FMR seeks to
manage the fund so that it generally reacts to changes in interest rates
similarly to municipal bonds with maturities between eight and 18 years. As
of October 31, 1996, the fund's dollar-weighted average maturity was
approximately 16.4 years.
Effective March 17, 1997, the following information replaces similar
information found under the heading "Securities and Investment Practices"
in the "Investment Principles and Risks" section on page 46.
High Income Municipal currently intends to limit its investments in below
investment-grade securities to less than 35% of its assets and does not
currently intend to invest more than 10% of its total assets in bonds that
are in default. A security is considered to be investment-grade quality if
it is rated investment-grade by Moody's Investor Service, Standard and
Poor's, Duff & Phelps Credit Rating Co., or Fitch Investors Service L.P.,
or is unrated but judged by FMR to be of equivalent quality.
Effective May 9, 1997, the following information replaces similar
information found in "How to Buy Shares" on page 54.
Once each business day, two share prices are calculated for Class A and
Class T shares of each fund: the offering price and the NAV. If you pay a
front-end sales charge or qualify for a reduction as described on page 61,
your Class A or Class T share price will be the offering price. If you
qualify for a front-end sales charge waiver as described on page 64, your
Class A or Class T share price will be the NAV. When you buy Class A or
Class T shares at the offering price, the transfer agent deducts the
appropriate sales charge and invests the rest in Class A or Class T shares
of the fund. Class B's NAV is also calculated every business day. Class B
shares of each fund are sold without a front-end sales charge and may be
subject to a CDSC upon redemption. For information on how the CDSC is
calculated, see "Transaction Details," page 60.
PURCHASE AMOUNTS OF MORE THAN $250,000 WILL NOT BE ACCEPTED FOR CLASS B
SHARES.
Effective May 9, 1997, the following information replaces similar
information found in "Investor Services" on page 58.
FIDELITY ADVISOR SYSTEMATIC WITHDRAWAL PROGRAM lets you set up
periodic redemptions from your Class A, Class T, or Class B account.
Accounts with a value of $10,000 or more in Class A, Class T or Class B
shares are eligible for this program. Aggregate redemptions per 12 month
period from your Class B account may not exceed 10 % of the account value
and are not subject to a CDSC. Because of Class A's and Class T's front-end
sales charge, you may not want to set up a systematic withdrawal plan
during a period when you are buying Class A or Class T shares on a regular
basis.
Effective May 9, 1997, the following information replaces similar
information found in "Transaction Details" on page 63.
REINSTATEMENT PRIVILEGE. If you have sold all or part of your Class
A, Class T, or Class B shares of a fund, you may reinvest an amount equal
to all or a portion of the redemption proceeds in the same class of the
fund or any of the other Fidelity Advisor funds, at the NAV next determined
after receipt and acceptance of your investment order, provided that such
reinvestment is made within 90 days of redemption. Under these
circumstances, the dollar amount of the CDSC, if any, you paid on Class T
or Class B shares will be reimbursed to you by reinvesting that amount in
Class T shares or Class B shares, as applicable. You must reinstate your
shares into an account with the same registration. This privilege may be
exercised only once by a shareholder with respect to a fund and certain
restrictions may apply. For purposes of the CDSC holding period schedule,
the holding period of your Class T or Class B shares will continue as if
the shares had not been redeemed.
Effective May 9, 1997, the following information supplements information
found in "Sales Charge Reductions and Waivers" on page 65.
A FRONT-END SALES CHARGE WILL NOT APPLY TO THE FOLLOWING CLASS A
SHARES:
1. Purchased by a trust institution or bank trust department that
has executed a participation agreement with FDC specifying certain asset
minimums and qualifications, and marketing restrictions. Assets managed by
third parties do not qualify for this waiver;
2. Purchased for use in a broker-dealer managed account program,
provided the broker-dealer has executed a participation agreement with FDC
specifying certain asset minimums and qualifications, and marketing,
program and trading restrictions. Employee benefit plan assets do not
qualify for this waiver; or
3. Purchased on a discretionary basis by a registered investment
advisor which is not part of an organization primarily engaged in the
brokerage business, that has executed a participation agreement with FDC
specifying certain asset minimums and qualifications, and marketing,
program and trading restrictions. Employee benefit plan assets do not
qualify for this waiver.
For the purpose of load waiver (2) certain broker dealers that otherwise
meet the qualifications and asset minimums established by FDC are not
required to sign a participation agreement.
Effective May 9, 1997, the following information replaces similar
information found in "Sales Charge Reductions and Waivers" on page 66.
If you are investing through an account managed by a broker-dealer, if you
have authorized an investment adviser to make investment decisions for you,
or if you are investing through a trust department, you may qualify to
purchase Class T shares without a sales charge (as described in (9), (10)
and (13), above), Class A shares without a sales charge (as described in
(1), (2) and (3) above), or Institutional Class shares. Because
Institutional Class shares have no sales charge, and do not pay a
distribution fee or a shareholder service fee, Institutional Class shares
are expected to have a higher total return than Class A, Class T, or Class
B shares. Contact your investment professional to discuss if you qualify.
THE CDSC ON CLASS B SHARES MAY BE WAIVED:
1. In cases of disability or death, provided that Class B shares are
redeemed within one year following the death or the initial determination
of disability;
2. In connection with a total or partial redemption related to
certain distributions from retirement plans or accounts; or
3. In connection with redemptions through the Fidelity Advisor
Systematic Withdrawal Program.
SUPPLEMENT TO THE FIDELITY ADVISOR FUNDS: CLASS A, CLASS T, CLASS B,
INSTITUTIONAL CLASS, AND INITIAL CLASS
FEBRUARY 28, 1997
STATEMENT OF ADDITIONAL INFORMATION
Effective May 9, 1997, the following information supplements information
found in "Additional Purchase, Exchange, and Redemption Information" on
page 119.
CLASS A SHARES ONLY
Pursuant to Rule 22d-1 under the 1940 Act, FDC exercises its right to waive
Class A's maximum 5.25% (Equity Funds); 4.25% (Bond Funds); 3.25%
(Intermediate Bond Funds); or 1.50% (Short Bond Funds) front-end sales
charge in connection with a fund's merger with or acquisition of any
investment company or trust. In addition, FDC has chosen to waive Class A's
front-end sales charge in certain instances because of efficiencies
involved in those sales of shares. The sales charge will not apply:
1. to shares purchased by a trust institution or bank trust department that
has executed a participation agreement with FDC specifying certain asset
minimums and qualifications, and marketing restrictions. Assets managed by
third parties do not qualify for this waiver;
2. to shares purchased for use in a broker-dealer managed account program,
provided the broker-dealer has executed a participation agreement with FDC
specifying certain asset minimums and qualifications, and marketing,
program and trading restrictions. Employee benefit plan assets do not
qualify for this waiver; or
3. to shares purchased on a discretionary basis by a registered investment
adviser which is not part of an organization primarily engaged in the
brokerage business, that has executed a participation agreement with FDC
specifying certain asset minimums and qualifications, and marketing,
program and trading restrictions. Employee benefit plan assets do not
qualify for this waiver.
For the purpose of load waiver (2), certain broker-dealers that otherwise
meet the qualifications and asset minimums established by FDC are not
required to sign a participation agreement.
A sales load waiver form must accompany these transactions.
Effective May 9, 1997, the following information replaces similar
information found in "Additional Purchase, Exchange, and Redemption
Information" on page 121.
CLASS B SHARES ONLY
The contingent deferred sales charge (CDSC) on Class B shares may be waived
(1) in the case of disability or death, provided that Class B shares are
redeemed within one year following the death or the initial determination
of disability; (2) in connection with a total or partial redemption related
to certain distributions from retirement plans or accounts at age 70 1/2,
which are permitted without penalty pursuant to the Internal Revenue
Code; or (3) in connection with redemptions through the Fidelity Advisor
Systematic Withdrawal Program.
A sales load waiver form must accompany these transactions.
Effective May 9, 1997, the following information replaces similar
information found in "Additional Purchase, Exchange, and Redemption
Information" on page 122.
CLASS A, CLASS T, CLASS B, AND INSTITUTIONAL CLASS SHARES ONLY
FIDELITY ADVISOR SYSTEMATIC WITHDRAWAL PROGRAM. If you own Class A, Class
T, or Institutional Class shares worth $10,000 or more, you can have
monthly, quarterly or semi-annual checks sent from your account to you, to
a person named by you, or to your bank checking account. If you own Class B
shares worth $10,000 or more, you can have monthly or quarterly checks sent
from your account to you, to a person named by you, or to your bank
checking account. Aggregate redemptions per 12 month period from your Class
B account may not exceed 10% of the value of the account and are not
subject to a CDSC; and you may set your withdrawal amount as a percentage
of the value of your account or a fixed dollar amount. Your Systematic
Withdrawal Program payments are drawn from Class A, Class T, Class B ,
or Institutional Class share redemptions, as applicable. If Systematic
Withdrawal Plan redemptions exceed income dividends earned on your shares,
your account eventually may be exhausted.
The following information replaces similar information found in "Trustees
and Officers" on page 126.
The Trustees and executive officers of the trusts are listed below. Except
as indicated, each individual has held the office shown or other offices in
the same company for the last five years. All persons named as Trustees
also serve in similar capacities for other funds advised by FMR. The
business address of each Trustee and officer who is an "interested person"
(as defined in the 1940 Act) is 82 Devonshire Street, Boston, Massachusetts
02109, which is also the address of FMR. The business address of all the
other Trustees is Fidelity Investments, P.O. Box 9235, Boston,
Massachusetts 02205-9235. Those Trustees who are "interested persons" by
virtue of their affiliation with either a trust or FMR are indicated by an
asterisk (*).
ROBERT M. GATES (53), Trustee (1997), is a consultant, author, and
lecturer (1993). Mr. Gates was Director of the Central Intelligence Agency
(CIA) from 1991-1993. From 1989 to 1991, Mr. Gates served as Assistant to
the President of the United States and Deputy National Security Advisor.
Mr. Gates is currently a Trustee for the Forum For International Policy, a
Board Member for the Virginia Neurological Institute, and a Senior Advisor
of the Harvard Journal of World Affairs. In addition, Mr. Gates also serves
as a member of the corporate board for LucasVarity PLC (automotive
components and diesel engines), Charles Stark Draper Laboratory
(non-profit), NACCO Industries, Inc. (mining and manufacturing), and TRW
Inc. (original equipment and replacement products) Mr. Gates currently
serves as a Trustee for each of the following trusts: Fidelity Advisor
Series II, III, IV, V, and VI, Fidelity Municipal Trust, and Fidelity
Income Fund.
WILLIAM O. McCOY (63),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, 1984) and President
of BellSouth Enterprises (1986). He is currently a Director of Liberty
Corporation (holding company, 1984), Weeks Corporation of Atlanta (real
estate, 1994), Carolina Power and Light Company (electric utility, 1996),
and the Kenan Transport Co. (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, 1988). Mr. McCoy
currently serves as a Trustee for each of the following trusts: Fidelity
Advisor Series II, III, IV, V, and VI, Fidelity Municipal Trust, and
Fidelity Income Fund.
The following footnote replaces a similar footnote found in the "Trustees
and Officers" section on page 130.
(double dagger)(double dagger)(double dagger) During the period from May
1, 1996 through December 31, 1996, William O. McCoy served as a Member of
the Advisory Board of each trust. Mr. McCoy was appointed to the Board of
Trustees of Fidelity Advisor Series II, III, IV, V, and VI, Fidelity
Municipal Trust, and Fidelity Income Fund, effective January 1, 1997.
