SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT (No. 2-84130) UNDER THE
SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 31* [x]
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [x]
Amendment No. [ ]
Fidelity Advisor Series VI (Formerly Fidelity Oliver Street Trust)
(Exact Name of Registrant as Specified in Declaration of Trust)
82 Devonshire St., Boston, MA 02109
(Address Of Principal Executive Office)
Registrant's Telephone Number: (617) 570-7000
Arthur S. Loring, Esq.
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 February 14, 1994 pursuant to paragraph (b)
( ) 60 days after filing pursuant to paragraph (a)
( ) On ___________ pursuant to paragraph (a) of Rule 485
Registrant will file a declaration pursuant to Rule 24f-2 under the
Investment Company Act of 1940 and will file the notice required by such
Rule by January 29, 1995.
* The preceding Post-Effective Amendment No. 29 filed on January 29, 1994
should have been numbered Post-Effective Amendment No. 30."
Page 1 of ____
FIDELITY ADVISOR SERIES VI
FIDELITY ADVISOR SHORT-INTERMEDIATE TAX-EXEMPT FUND
CROSS-REFERENCE SHEET
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Form N-1A Item Number
Part B Statement of Additional Information
10 Cover Page
11 Table of Contents
12 FMR; Description of the Trust
13 a,b,c Investment Policies and Limitations
d Portfolio Transactions
14 a,b Trustees and Officers
c *
15 a *
b Description of the Trust
c *
16 a(i, ii) FMR, Management Contract; Trustees and Officers;
Distribution and Service Plans
a(iii),b,c,d Management Contract;
e Portfolio Transactions
f Distribution and Service Plan
g *
h Description of the Trust
i Management Contract;
17 a,b,c,d Portfolio Transactions
e *
18 a Description of the Trust
b *
19 a Additional Purchase, Exchange and Redemption Information
b Valuation of Portfolio Securities
20 Distributions and Taxes
21 Distribution and Service Plans
22 a *
b Performance
23 *
</TABLE>
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* Not Applicable
FIDELITY ADVISOR SERIES VI
FIDELITY ADVISOR SHORT-INTERMEDIATE TAX-EXEMPT FUND
CROSS-REFERENCE SHEET
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Form N-1A Item Number
Part A Prospectus Caption
1 Cover Page
2 Financial History
3 a,b *
c *
4 a(i) The Fund and the Fidelity Organization
a(ii),b,c Investment Objective; Investment Policies and Risk; Investment
Limitations; Appendix
5 a The Fund and the Fidelity Organization
b,c,d,e Fees, The Fund and the Fidelity Organization
f Portfolio Transactions
5A Performance
6 a The Fund and the Fidelity Organization; How to Buy Shares; How
to Exchange; How to Sell Shares; Shareholder Communications
b *
c Investment Objective ; The Fund and the Fidelity Organization
d The Fund and the Fidelity Organization
e How to Buy Shares; How to Sell Shares; How to Exchange;
f,g Distribution Options; Distributions and Taxes
7 a Fees
b Valuation; How to Buy Shares
c How to Exchange
d How to Buy Shares
e,f Fees
8 How to Sell Shares
9 **
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* Not Applicable
** To be filed by amendment
SUBJECT TO COMPLETION, DATED JANUARY 17, 1993
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time the registration statemnet
becomes effective. This Prospectus shall not constitutue an offer to buy
nor shall there be any sale of these securities in any State in which such
offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any State.
FIDELITY ADVISOR SHORT-INTERMEDIATE
TAX-EXEMPT FUND
A FUND OF FIDELITY ADVISOR SERIES VI
82 Devonshire Street
Boston, Massachusetts 02109
PROSPECTUS
February __, 1994
Fidelity Advisor Short-Intermediate Tax-Exempt Fund (the Fund) seeks as
high a level of current income, exempt from federal income tax, as is
consistent with preservation of capital.
Please read this Prospectus before investing. It is designed to provide you
with information and to help you decide if the Fund's goals match your own.
Retain this document for future reference.
A Statement of Additional Information (SAI) (dated February __, 1994) for
the Fund has been filed with the Securities and Exchange Commission (SEC)
and is incorporated herein by reference. The SAI is available free upon
request from Fidelity Distributors Corporation (Distributors), 82
Devonshire Street, Boston, Massachusetts 02109 or from your investment
professional.
MUTUAL FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF (OR ENDORSED OR GUARANTEED
BY) ANY BANK, NOR ARE THEY FEDERALLY INSURED OR OTHERWISE PROTECTED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC), THE FEDERAL RESERVE BOARD OR
ANY OTHER AGENCY.
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.
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 Statement of Additional
Information, 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 Distributors. This Prospectus
and the related Statement of Additional Information do not constitute an
offer by the Fund or by Distributors to sell or to buy shares of the Fund
to any person to whom it is unlawful to make such offer.
TABLE OF CONTENTS
Financial Summary
Investment Objective
How to Buy Shares
Investor Services
Shareholder Communications
How to Exchange
How to Sell Shares
Distribution Options
Distributions and Taxes
Investment Policies
Investment Limitations
Fees
Valuation
Performance
Portfolio Transactions
The Fund and the Fidelity
Organization
Appendix
FINANCIAL SUMMARY
The purpose of the table below is to assist you in understanding the
various costs and expenses that an investor in the Fund would bear directly
or indirectly. The expense summary format below was developed for use by
all mutual funds to help you make your investment decisions. This expense
information should be considered along with other important information
including the Fund's investment objective.
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases
(as a percentage of the offering price) 1.50%
Sales Charge Imposed on Reinvested Dividends None
Deferred Sales Charge Imposed on Redemptions None
Redemption Fee None
Exchange Fee None
Shareholder Transaction Expenses represent charges paid when you purchase,
redeem or exchange shares of the Fund. If you exchange shares or direct
dividends of the Fund into other Fidelity Advisor Funds, a differential
sales change may apply. Lower sales charges may be available with
purchases over $1,000,000 or in conjunction with various programs. See "How
to Buy Shares," page __.
ANNUAL OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management Fees %
12b-1 Fees 0.15%
Other Expenses %
TOTAL OPERATING EXPENSES %
Annual operating expenses are based on the Fund's estimated expenses for
its first year of operations. Management Fees are paid by the Fund to
Fidelity Management & Research Company (FMR) for managing its
investments and business affairs. The expense for management fees is based
on an average group fee plus an individual fund fee, annualized. 12b-1 fees
are paid by the Fund to Distributors for services and expenses in
connection with the distribution of Fund shares. Long-term shareholders may
pay more than the economic equivalent of the maximum front end sales charge
permitted by the National Association of Securities Dealers (NASD) due to
12b-1 payments. The Fund incurs other expenses for maintaining shareholder
records, furnishing shareholder statements and reports, and providing other
services. Management fees, 12b-1 fees and other expenses are reflected in
the Fund's share price and are not charged directly to individual
shareholder accounts. Please refer to the section "Fees" on page __ for
further information.
EXAMPLE
You would pay the following expenses, including the maximum 1.50% sales
charge, on a $1,000 investment in the Fund assuming (1) a 5% annual return
and (2) full redemption at the end of each time period:
1 YEAR 3 YEARS
$ $
The above hypothetical example illustrates the expenses, including the
maximum 1.50% sales charge, associated with a $1,000 investment over
periods of one and three years, based on the expenses in the table and an
assumed annual return of 5%. THE RETURN OF 5% AND EXPENSES SHOULD NOT BE
CONSIDERED INDICATIONS OF ACTUAL OR EXPECTED FUND PERFORMANCE OR EXPENSES,
BOTH OF WHICH MAY VARY.
INVESTMENT OBJECTIVE
Fidelity Advisor Short-Intermediate Tax-Exempt Fund seeks as high a level
of current income, exempt from federal income tax, as is consistent with
preservation of capital by focusing on investment-grade municipal
securities. The Fund normally maintains a dollar-weighted average maturity
of between two and four years.
Under normal conditions, as a fundamental policy, the Fund will invest its
assets so that 80% or more of its assets will be exempt from federal
income tax. The Fund maintains the ability under normal circumstances to
derive up to 20% of its income from municipal securities issued to
finance private activities whose interest is a tax preference item for
purposes of the federal alternative minimum tax. If you are subject to the
federal alternative minimum tax, a portion of your income may not be exempt
from federal income tax. See "Distributions and Taxes" on page __ for
further information.
The investment objective of the Fund is fundamental and can only be changed
by vote of a majority of the outstanding shares of the Fund. Except as
otherwise noted, the Fund's investment limitations and policies are not
fundamental. Non-fundamental limitations and policies may be changed
without shareholder approval.
The Fund may not always achieve its investment objective, but it follows
the investment policies described in "Investment Policies," page __.
HOW TO BUY SHARES
Shares are offered continuously to investors who engage an investment
professional for investment advice and may be purchased at the public
offering price (the offering price) next determined after the Fund's
transfer agent receives your order to purchase. State Street Bank and Trust
Company (the Transfer Agent), P.O. Box 8302, Boston, Massachusetts 02110
provides transfer and dividend paying services for the Fund.
You can open an account for $2,500 or more by completing and returning an
account application. You can make additional investments of $250 or more.
For accounts established with a systematic investment or exchange program,
there is a $1,000 initial and $100 subsequent investment minimum
requirement. FOR INFORMATION ON OPENING AN ACCOUNT, PLEASE CONSULT YOUR
INVESTMENT PROFESSIONAL OR REFER TO THE APPLICATION.
The offering price is equal to the net asset value (NAV) plus a sales
charge, which is a variable percentage of the offering price depending upon
the amount of the purchase. The following table shows total sales charges
and concessions to securities dealers and banks having agreements with
Distributors (investment professionals).
SALES CHARGES AND INVESTMENT PROFESSIONAL CONCESSIONS
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SALES CHARGES AS % OF INVESTMENT PROFESSIONAL
AMOUNT OF PURCHASE OFFERING NET AMOUNT CONCESSION AS %
IN SINGLE TRANSACTIONS PRICE INVESTED OF OFFERING PRICE
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Less than $1,000,000 1.50% 1.52% 1.20%
$1,000,000 or more None None See below*
* THERE IS NO INITIAL SALES CHARGE ON PURCHASES OF $1 MILLION OR MORE.
HOWEVER, DISTRIBUTORS WILL COMPENSATE INVESTMENT PROFESSIONALS AT THE RATE
OF .25% ON SUCH PURCHASES (SEE "DISTRIBUTION AND SERVICE PLAN," PAGE __).
It is the responsibility of your investment professional to transmit your
order to the Transfer Agent before 4:00 p.m. Eastern time in order for you
to receive that day's share price. The Transfer Agent must receive payment
within five business days after an order is placed. Otherwise, the purchase
order may be canceled and you could be held liable for resulting fees
and/or losses.
All your purchases must be made in U.S. dollars and checks must be drawn on
U.S. banks. The Fund reserves the right to limit the number of your checks
processed at one time. If your check does not clear, the Fund may cancel
your purchase and you could be held liable for any fees and/or losses
incurred. When you purchase directly by check, the Fund can hold the
proceeds of redemptions until the Transfer Agent is reasonably satisfied
that the purchase payment has been collected (which can take up to seven
calendar days). You may avoid a delay in receiving redemption proceeds by
purchasing shares with a certified check. Shares purchased through
investment professionals utilizing an automated order placement and
settlement system that guarantees payment for orders on a specified date,
begin to earn income dividends on that date. Direct purchases and all other
orders begin to earn income dividends on the business day after the Fund
receives payment.
The Fund and Distributors each reserves the right to suspend the offering
of shares for a period of time and to reject any order for the purchase of
shares, including certain purchases by exchange (see "How to Exchange,"
page __ ).
MINIMUM ACCOUNT BALANCE. You must maintain an account balance of $1,000. If
your account falls below $1,000 due to redemption, the Transfer Agent may
close it at the NAV next determined on the day your account is closed and
mail you the proceeds at the address shown on the Transfer Agent's records.
The Transfer Agent will give you 30 days notice that your account will be
closed unless you make an investment to increase your account balance to
the $1,000 minimum.
SALES CHARGE WAIVERS. Sales charges do not apply to shares of the Fund
purchased:
(1) by registered representatives, bank trust officers and other employees
(and their immediate families) of investment professionals having
agreements with Distributors;
(2) by a current or former Trustee or officer of a Fidelity fund or a
current or retired officer, director or full-time employee of FMR Corp. or
its direct or indirect subsidiaries (a "Fidelity Trustee or employee"), the
spouse of a Fidelity Trustee or employee, a Fidelity Trustee or employee
acting as custodian for a minor child, or a person acting as trustee of a
trust for the sole benefit of the minor child of a Fidelity Trustee or
employee;
(3) by a charitable organization (as defined in Section 501(c)(3) of the
Internal Revenue Code) investing $100,000 or more;
(4) by a charitable remainder trust or life income pool established for the
benefit of a charitable organization (as defined in Section 501(c)(3) of
the Internal Revenue Code);
(5) by trust institutions investing on behalf of their clients;
(6) in accounts as to which a bank or broker-dealer charges an account
management fee, provided the bank or broker-dealer has a Dealer Agreement
with Distributors;
(7) as part of an employee benefit plan having more than 200 eligible
employees or a minimum of $1,000,000 invested in Fidelity Advisor funds;
(8) in a Fidelity or Fidelity Advisor IRA account purchased with the
proceeds of a distribution from (i) an employee benefit plan having more
than 200 eligible employees or a minimum of $3,000,000 in plan assets
invested in Fidelity mutual funds or $1,000,000 invested in Fidelity
Advisor mutual funds, or (ii) an insurance company separate account
qualifying under (9) below or funding annuity contracts purchased by
employee benefit plans which in the aggregate have at least $3,000,000 in
plan assets invested in Fidelity mutual funds;
(9) by an insurance company separate account used to fund annuity contracts
purchased by employee benefit plans which in the aggregate have more than
200 eligible employees or $1,000,000 invested in Fidelity Advisor mutual
funds;
(10) by any state, county, or city, or any governmental instrumentality,
department, authority or agency; or
(11) with redemption proceeds from other mutual fund complexes on which the
investor has paid a front-end sales charge only.
Sales charge waivers must be qualified through Distributors in advance, and
employee benefit plan investors must meet additional requirements specified
in the SAI. Your investment professional should call Fidelity for more
information.
INVESTOR SERVICES
You may initiate many transactions by telephone. Note that the Transfer
Agent will not be responsible for any losses resulting from unauthorized
transactions if it follows reasonable procedures designed to verify the
identity of the caller. The Transfer Agent will request personalized
security codes or other information, and may also record calls. You should
verify the accuracy of your confirmation statements immediately after you
receive them. If you do not want the ability to redeem and exchange by
telephone, call the Transfer Agent for instructions.
QUANTITY DISCOUNTS. Reduced sales charges are applicable to purchases of
$1,000,000 or more of the Fund alone or in combination with purchases of
shares of other Fidelity Advisor Funds made at any one time (including
Daily Money Fund and Daily Tax-Exempt Money Fund shares acquired by
exchange from any Fidelity Advisor Fund). To obtain the reduction of the
sales charge, you or your investment professional must notify the Transfer
Agent at the time of purchase whenever a quantity discount is applicable to
your purchase. Upon such notification, you will receive the lowest
applicable sales charge.
For purposes of qualifying for a reduction in sales charges under the
combined purchase, rights of accumulation or letter of intent provisions,
the following may qualify as an individual, or a "company" as defined in
Section 2(a)(8) of the Investment Company Act of 1940 (1940 Act): an
individual, spouse, and their children under age 21 purchasing for his,
her, or their own account; a trustee, administrator or other fiduciary
purchasing for a single trust estate or single fiduciary account or for a
single or a parent-subsidiary group of "employee benefit plans" (as defined
in Section 3(3) of the Employee Retirement Income Security Act of 1974);
and tax-exempt organizations under Section 501(c)(3) of the Internal
Revenue Code.
COMBINED PURCHASES. When you invest in the Fund for several accounts at the
same time, you may combine these investments into a single transaction if
purchased through one investment professional, and if the total is at least
$1,000,000.
RIGHTS OF ACCUMULATION. Your "Rights of Accumulation" permit reduced sales
charges on any future purchases after you have reached a new breakpoint in
the Fund's sales charge schedule. You can add the value of existing
Fidelity Advisor Fund shares (including Daily Money Fund and Daily
Tax-Exempt Money Fund shares acquired by exchange from any Fidelity Advisor
Fund), determined at the previous day's NAV at the close of business, to
the amount of your new purchase valued at the current offering price to
determine your reduced sales charge.
LETTER OF INTENT. If you anticipate purchasing $1,000,000 or more of the
Fund's shares alone or in combination with shares of other Fidelity Advisor
Funds (excluding Daily Money Fund and Daily Tax-Exempt Money Fund) within a
13-month period, you may obtain shares at the same reduced sales charge as
though the total quantity were invested in one lump sum, by filing a
non-binding Letter of Intent (the Letter) within 90 days of the start of
the purchases. Each investment you make after signing the Letter will be
entitled to the sales charge applicable to the total investment indicated
in the Letter. For example, a $2,500 purchase toward a $1,000,000 Letter
would receive the same reduced sales charge as if the $1,000,000 had been
invested at one time. To ensure that the reduced price will be received on
future purchases, you or your investment professional must inform the
Transfer Agent that the Letter is in effect each time shares are purchased.
Neither income dividends nor capital gain distributions taken in additional
shares will apply toward the completion of the Letter.
Your initial investment must be at least 5% of the total amount you plan to
invest. Out of the initial purchase, 5% of the dollar amount specified in
the Letter will be registered in your name and held in escrow. The shares
held in escrow cannot be redeemed or exchanged until the Letter is
satisfied or the additional sales charges have been paid. You will earn
income dividends and capital gain distributions on escrowed shares. The
escrow will be released when your purchase of the total amount has been
completed. You are not obligated to complete the Letter.
If you purchase more than the amount specified in the Letter and qualify
for a further sales charge reduction, the sales charge will be adjusted to
reflect your total purchase at the end of 13 months. Surplus funds will be
applied to the purchase of additional shares at the then current offering
price applicable to the total purchase.
If you do not complete your purchase under the Letter within the 13-month
period, 30 days written notice will be provided for you to pay the
increased sales charges due. Otherwise, sufficient escrowed shares will be
redeemed to pay such charges.
SYSTEMATIC INVESTMENT PLAN. You can make regular investments in the Fund
with the Systematic Investment Plan by completing the appropriate section
of the account application and attaching a voided personal check.
Investments may be made monthly by automatically deducting $100 or more
from your bank checking account. You may change the amount of your monthly
purchase at any time. There is a $1,000 minimum initial investment
requirement for systematic investment plans. Shares will be purchased at
the offering price next determined following receipt of the order by the
Transfer Agent. You may cancel the Systematic Investment Plan at any time
without payment of a cancellation fee. You will receive a confirmation from
the Transfer Agent for every transaction, and a debit entry will appear on
your bank statement.
SHAREHOLDER COMMUNICATIONS
The Transfer Agent will send you a confirmation after every transaction
that affects the share balance or the account registration. At least twice
a year each shareholder will receive the Fund's financial statements, with
a summary of its portfolio composition and performance. To reduce expenses,
only one copy of most shareholder reports (such as the Fund's Annual
Report) may be mailed to each shareholder address. Please write to the
Transfer Agent or contact your investment professional if you need to have
additional reports sent each time.
The Fund pays for these shareholder communications, but not for special
services that are required by a few shareholders, such as a request for a
historical transcript of an account. You may be required to pay a fee for
such special services. If you are purchasing shares of the Fund through a
program of administrative services offered by an investment professional,
you should read the additional materials pertaining to that program in
conjunction with this Prospectus. Certain features of the Fund, such as the
minimum initial or subsequent investment, may be modified in these
programs, and administrative charges may be imposed for the services
rendered.
HOW TO EXCHANGE
An exchange is the redemption of shares of one Fund and the purchase of
shares of another Fund, each at the next determined NAV. The exchange
privilege is a convenient way to sell and buy shares of other Fidelity
Advisor Funds and certain Fidelity money market funds registered in your
state. FOR MORE INFORMATION ON ENTERING AN EXCHANGE TRANSACTION, PLEASE
CONSULT YOUR INVESTMENT PROFESSIONAL.
To protect the Fund's performance and shareholders, FMR discourages
frequent trading in response to short-term market fluctuations. The Fund
reserves the right to refuse exchange purchases by any person or group if,
in FMR's opinion, the Fund would be unable to invest effectively in
accordance with its investment objective and policies, or would otherwise
be affected adversely. 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.
Exchange restrictions may be imposed at any time. The Fund may modify or
terminate the exchange privilege.
Exchange instructions may be given by you in writing or by telephone
directly to the Transfer Agent or through your investment professional.
Please consult your investment professional or refer to the account
application for instructions.
Before you make an exchange:
1. Read the prospectus of the fund into which you want to exchange.
2. Shares may be exchanged into other Fidelity Advisor Funds seven calendar
days after purchase. Shares of the Fund held for more than six months will
be exchanged at NAV. If you have held shares of the Fund for less than six
months, you will pay a sales charge equal to the difference between the
sales charge on the Fund you are exchanging into and the sales charge
applicable to Fund shares being exchanged. For example, if you paid the
Fund's full 1.5% sales charge when you purchased your shares, you will have
to pay a sales charge of up to 3.25% when you exchange these shares into
another Fidelity Advisor Fund having a maximum sales charge of 4.75%. After
six months, shares may be exchanged at NAV, without additional sales
charges. Exchanges into a Fidelity Advisor Fund from certain Fidelity money
market funds will be processed at the next determined offering price
(unless the shares were acquired by exchange from another Fidelity Advisor
Fund).
3. You may only exchange between accounts that are registered in the same
name, address, and taxpayer identification number.
4. You may make four exchanges out of the Fund per calendar year; if you
exceed this limit, your future purchases of (including exchanges into)
Fidelity Advisor Funds may be permanently refused. For purposes of the four
exchange limit, accounts under common ownership or control, including
accounts having the same taxpayer identification number, will be
aggregated.
5. Taxes: The shares exchanged represent a sale and are taxable. The
Transfer Agent will send you a confirmation of each exchange transaction.
FIDELITY ADVISOR SYSTEMATIC EXCHANGE PLAN. You can exchange a specific
dollar amount of shares from the Fund into another Fidelity Advisor Fund on
a monthly, quarterly or semiannual basis under the following conditions:
1. The account from which the exchanges are to be processed must have a
minimum balance of $10,000.
2. The account into which the exchanges are to be processed must be an
existing account with a minimum balance of $1,000.
3. Both accounts must have identical registrations and taxpayer
identification numbers. The minimum amount that can be exchanged
systematically into the Fund is $100.
4. Systematic exchanges will be processed at the NAV determined on the
transaction date, except that Systematic Exchanges into the Fund from any
money market fund will be processed at the offering price next determined
on the transaction date (unless the shares were acquired by exchange from
another Fidelity Advisor Fund). Also, shares of the Fund held less than
six months may be subject to a differential sales charge (see above).
HOW TO SELL SHARES
You may sell (redeem) all or a portion of your shares on any day the New
York Stock Exchange (NYSE) is open, at the NAV next determined after the
Transfer Agent receives your request to sell. Orders to sell may be placed
by you in writing or by telephone or through your investment professional.
Orders to sell received by the Transfer Agent before 4:00 p.m. Eastern time
will receive that day's share price.
Once your shares are redeemed, the Fund normally will send the proceeds on
the next business day to the address of record. If making immediate payment
could adversely affect the Fund, the Fund may take up to seven days to pay
you. The Fund may withhold redemption proceeds until it is reasonably
satisfied that it has collected investments that were made by check (which
can take up to seven calendar days).
When the NYSE is closed (or when trading is restricted) for any reason
other than its customary weekend or holiday closings, or under any
emergency circumstances as determined by the SEC to merit such action, the
Fund may suspend redemption or postpone payment dates. The Transfer Agent
requires additional documentation to redeem shares registered in the name
of a corporation, agent or fiduciary or a surviving joint owner. Call
1-800-221-5207 for specific requirements.
REDEMPTION REQUESTS BY TELEPHONE:
BY CHECK: You may sell shares of the Fund having a value of $100,000 or
less from your account by calling the Transfer Agent. Redemption proceeds
must be sent to the address of record listed on the account, and a change
of address must not have occurred within the preceding 60 days.
BY WIRE: You may sell shares of the Fund and have the proceeds wired to a
pre-designated bank account. Wires will be sent the next business day
following receipt of your request.
REDEMPTION REQUESTS IN WRITING. For your protection, if you redeem shares
of the Fund having a value of more than $100,000, or if you are sending the
proceeds of a redemption of any amount to an address other than the address
of record listed on the account, or if you have requested a change of
address within the preceding 60 days, you must send a letter of instruction
signed by all registered owners with signature(s) guaranteed to the
Transfer Agent. A signature guarantee is a widely recognized way to protect
you by guaranteeing the signature on your request; it may not be provided
by a notary public. Signature guarantee(s) will be accepted from banks,
brokers, dealers, municipal securities dealers, municipal securities
brokers, government securities dealers, government securities brokers,
credit unions (if authorized under state law), national securities
exchanges, registered securities associations, clearing agencies and
savings associations.
REINSTATEMENT PRIVILEGE. If you have sold all or part of your Fund shares
you may reinvest an amount equal to all or a portion of the redemption
proceeds in the Fund or in any of the other Fidelity Advisor Funds, at the
NAV next determined after receipt of your investment order, without a sales
charge, provided that such reinvestment is made within 30 days of
redemption. You must reinstate your shares into an account with the same
registration. The privilege may be exercised only once by a shareholder
with respect to the Fund.
SYSTEMATIC WITHDRAWAL PROGRAM. If you own shares of the Fund worth $10,000
or more, you may periodically have proceed checks sent from your account to
you, to a person named by you, or to your bank checking account. You may
obtain information about the Systematic Withdrawal Program by contacting
your investment professional. Your Systematic Withdrawal Program payments
are drawn from share redemptions. If Systematic Withdrawal Program
redemptions exceed income dividends earned on your shares, your account
eventually may be exhausted. Since a sales charge is applied on new shares
you buy, it is to your disadvantage to buy shares while also making
systematic redemptions.
CHECKWRITING SERVICE. The Fund offers a check-writing service ($500
minimum). Refer to the Application or the SAI and complete the attached
signature card. Upon receipt of the properly completed account application
and signature card, the Fund will provide checks drawn on the Transfer
Agent. If you redeem by check from the Fund and the amount of the check is
greater than the value of your account, your check will be returned to you
and you may be subject to additional charges.
DISTRIBUTION OPTIONS
When you fill out your account application, you can choose from four
different Distribution Options:
A. REINVESTMENT OPTION. Dividends 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.
B. INCOME-EARNED OPTION. Capital gain distributions will be automatically
reinvested but a check will be sent for each dividend distribution.
C. CASH OPTION. A check will be sent for each dividend and capital gain
distributions.
D. DIRECTED DIVIDENDS OPTION. Dividends and capital gain distributions
will be automatically invested in another identically registered Fidelity
Advisor Fund.
You may change your Distribution Option at any time by notifying the
Transfer Agent in writing. Distribution checks will be mailed no later than
seven days after the last day of the month. On the day the Fund goes
ex-dividend, the amount of the distribution is deducted from its share
price. Reinvestment of distributions will be made at that day's NAV. Cash
distribution checks will be mailed within seven days.
DISTRIBUTIONS AND TAXES
DISTRIBUTIONS. Income dividends are declared to your account daily and paid
monthly. The Fund distributes substantially all of its net investment
income and capital gains to shareholders each year. Any net capital gains
earned by the Fund normally are distributed in February and December.
FEDERAL TAXES. Federally tax-free interest earned by the Fund is federally
tax-free when distributed to you as income dividends. If the Fund earned
taxable income from any of its investments, it would be distributed as a
taxable dividend.
The Fund may invest in municipal obligations whose interest is subject to
the federal alternative minimum tax for individuals (AMT bonds). To the
extent that the Fund invests in AMT bonds, individuals who are subject to
the AMT will be required to report a portion of the Fund's dividends as a
"tax preference item" in determining their federal tax.
Distributions from the Fund's short-term capital gains and a portion of the
gain on bonds purchased at a discount after _________ 1993, are federally
taxable as dividends, and long-term capital gain distributions are
federally taxable as long-term capital gains. The Fund's distributions are
taxable when they are paid, whether you take them in cash or reinvest them
in additional shares, except that distributions declared in December and
paid in January are taxable as if paid on December 31. The Fund will send
you a tax statement by January 31 showing the tax status of the
distributions you received in the past year, and will file a copy with the
Internal Revenue Service (IRS).
CAPITAL GAINS. You may realize a capital gain or loss when you sell
(redeem) or exchange shares. For most types of accounts, the Fund will
report the proceeds of your redemptions to you and the IRS annually.
However, because the tax treatment also depends on your purchase price and
your personal tax position, you should keep your regular account statements
to use in determining your tax.
"BUYING A DIVIDEND." On the record date for a distribution from the Fund,
the Fund's share price is reduced by the amount of the distribution. If you
buy shares just before the record date ("buying a dividend"), you will pay
the full offering price for the shares and then receive a portion of the
price back as a taxable distribution.
OTHER TAX INFORMATION. In addition to federal taxes, you may be subject to
state or local taxes on your investment, depending on the laws in your
area. Because some states exempt their own municipal obligations from tax,
you will receive tax information each year showing how the Fund allocated
its investments by state.
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.
INVESTMENT POLICIES
Further information relating to the types of securities in which the Fund
may invest and the investment policies of the Fund in general are set forth
in the Appendix to this Prospectus. As is the case with any investment in
securities, investment in the Fund involves certain risks and there can be
no assurance that the Fund will achieve its investment objective.
The Fund will maintain a dollar-weighted average portfolio maturity
of two to four years under normal conditions . Although the Fund is
permitted to hold securities with maturities of more than four years, its
dollar-weighted average maturity is limited to a maximum of four years.
The Fund normally invests at least 60% of its net assets in securities
that FMR judges to be of equivalent quality to those rated A or better by
Moody's Investors Service, Inc. (Moody's) or Standard & Poor's
Corporation (S&P). The Fund may not invest more than 5% of its net
assets in securities rated below Baa by Moody's or BBB by S&P, or in
unrated securities of equivalent quality, and does not currently intend to
purchase securities rated lower than Ba or BB.
The Fund may invest up to 25% of its total assets in a single issuer's
securities. The Fund may invest any portion of its assets in industrial
revenue bonds (IRBs) backed by private issuers, and may invest up to 25% of
its total assets in IRBs related to a single industry. The Fund may also
invest 25% or more of its total assets in municipal securities whose
revenue sources are from similar types of projects, e.g., education,
electric utilities, healthcare, housing, transportation, or water, sewer,
and gas utilities.
Municipal securities are issued to raise money for various public purposes,
including general purpose financing for state and local governments as well
as financing for specific projects or public facilities. Municipal
securities may be backed by the full taxing power of a municipality or by
the revenues from a specific project or the credit of a private
organization. Some municipal securities are insured by private insurance
companies, while others may be supported by letters of credit furnished by
domestic or foreign banks. FMR monitors the financial condition of parties
(including insurance companies, banks, and corporations) whose
creditworthiness is relied upon in determining the credit quality of
securities the Fund may purchase.
The Fund's investments in municipal securities may include fixed, variable,
or floating rate general obligations and revenue bonds (including municipal
lease obligations and resource recovery bonds); zero coupon and
asset-backed securities; inverse floaters; tax, revenue, or bond
anticipation notes; and tax-exempt commercial paper. The Fund may buy or
sell securities on a when-issued or delayed-delivery basis (including
refunding contracts), and may purchase restricted and illiquid securities.
The Fund may also buy and sell options and futures contracts. See the
Appendix for further discussion of the Fund's investments.
The Fund may temporarily change its investment focus for defensive
purposes. During periods when, in FMR's opinion, a temporary defensive
posture in the market is appropriate, the Fund may hold cash that is not
earning interest or invest without limitation in short-term
municipal obligations and money market instruments, including obligations
whose interest may be federally taxable. Under such circumstances, the
Fund may temporarily invest so that less than 80% of its income
distributions will be federally tax-free. Federally taxable obligations
include, but are not limited to, obligations issued by the U.S. government
or any of its agencies or instrumentalities, high-quality commercial paper,
certificates of deposit, and repurchase agreements. The Fund does not
intend to invest in federally taxable obligations under normal conditions.
CONSIDERATIONS IN INVESTING IN THE FUND:
An investment in the Fund should not be considered a complete investment
program and may not be appropriate for all investors. Yields on municipal
bonds, and therefore the Fund's yield, depend on factors such as general
market conditions, the maturities of the obligations and the quality of the
issues. Bonds generally are considered to be interest rate sensitive, which
means that their values move inversely to interest rates.
The Fund is designed for individuals in higher tax brackets seeking income
free from federal income tax. By itself, the Fund does not constitute a
balanced investment plan; the Fund stresses tax-exempt income.
Share price volatility and investment return depend in part on interest
rate changes. The value of fund shares will tend to decrease when interest
rates rise and increase when interest rates fall. Shorter-term obligations
generally offer greater stability and are less sensitive to interest rate
changes, but longer-term bonds generally offer higher yields. The Fund's
share price and yield also depend in part on the quality of its
investments.
Obligations rated investment grade or better (Baa/BBB or higher) generally
are of medium to high quality. Bonds rated Ba/BB have been judged by the
rating agencies to be moderately speculative. Such issues offer only
moderate protection of interest and principal payments, and are therefore
not well safeguarded during both good and bad times in the future.
Uncertainty of position characterizes bonds in this class. The Fund does
not currently intend to purchase securities that are in payment default or
that FMR believes present substantial risk of payment default. Lower-rated
bonds generally involve greater risk of loss or price declines because of
their uncertain credit standing. These securities typically have moderate
to poor protection of principal and interest payments and have speculative
characteristics. Unrated obligations may be either investment grade or
lower quality, but usually are not attractive to as many buyers. The Fund
relies heavily on FMR's credit analysis when purchasing unrated or
lower-rated bonds.
While lower-rated bonds have traditionally been less sensitive to interest
rate changes than higher-rated investments, as with all bonds, the prices
of lower-rated bonds will be affected by interest rate changes. Economic
changes may affect lower-rated securities differently than other
securities. Lower-rated municipal bonds may be more sensitive to adverse
economic changes (including recession) in specific regions or localities or
among specific types of issuers. During an economic downturn or a
prolonged period of rising interest rates, the ability of issuers of
lower-rated debt to service their payment obligations, meet projected
goals, or obtain additional financing may be impaired. Periods of economic
uncertainty and interest rate changes may cause market price volatility for
lower-rated bonds and corresponding volatility in the Fund's share price.
INVESTMENT LIMITATIONS
The Fund has adopted the following investment limitations designed to
reduce investment risk. The policies and limitations discussed below, and
in the Appendix on page __, are considered at the time of purchase. With
the exception of the Fund's borrowing policy, the sale of portfolio
securities is not required in the event of a subsequent change in
circumstances.
1. The Fund is non-diversified; however, to meet federal tax requirements
for qualification as a "regulated investment company," the Fund limits its
investments so that at the close of each quarter of its taxable year: (a)
no more than 25% of its total assets are invested in the securities of a
single issuer, and (b) with regard to at least 50% of its total assets, no
more than 5% of its total assets are invested in the securities of a single
issuer.
2. (a) The Fund may borrow money for temporary or emergency purposes, in an
amount not exceeding 33 1/3% of its total assets. (b) The Fund may borrow
money from banks or from other funds advised by FMR, or by engaging in
reverse repurchase agreements. (c) The Fund will not purchase securities
when borrowings exceed 5% of its total assets.
3. The Fund will not lend any security or make any other 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).
Except for the Fund's investment objective, its policy that, under normal
conditions, 80% or more of its income will be exempt from federal income
tax, and investment limitations 2(a) and 3 above, the Fund's policies and
limitations described in this Prospectus are not fundamental and may be
changed without shareholder approval.
FEES
MANAGEMENT AND OTHER SERVICES. For managing its investments and business
affairs, the Fund pays a monthly fee to FMR. The annual fee rate is made up
of the sum of two components:
1. A group fee rate based on the monthly average net assets of all of the
mutual funds advised by FMR. On an annual basis, this rate cannot rise
above .37% and it drops (to as low as a marginal rate of .14%) as total
assets in all these funds rise. The effective group fee rate for the month
of December, 1993 was ___%.
2. An individual fund fee rate of .25%.
One-twelfth of the annual management fee rate is applied to the Fund's net
assets averaged over the most recent month, resulting in a dollar amount
which is the management fee for that month.
FMR may, from time to time, agree to reimburse the Fund for expenses above
a specified percentage of average net assets. An expense reimbursement will
reduce the Fund's expense ratio and increase its yield and total return.
FMR retains the ability to be repaid by the Fund for such expense
reimbursements in the amount that expenses fall below the limit prior to
the end of the fiscal year.
............................................................... acts
as the Fund's custodian, transfer and pricing and bookkeeping agent. United
Missouri has a sub-arrangement with the Transfer Agent for transfer agent
services and a sub-arrangement with Fidelity Service Co. (Service) for
pricing and bookkeeping services. Service is an affiliate of FMR and is
located at 82 Devonshire Street, Boston, Massachusetts 02109. The Transfer
Agent is paid transfer agent fees based on the type, size and number of
accounts in the Fund and the number of monetary transactions made by
shareholders. The fees for pricing and bookkeeping services are based on
the Fund's average net assets, but must fall within a range of $45,000 to
$750,000 per year.
The Transfer Agent has delegated certain transfer, dividend paying and
shareholder services to Fidelity Investments Institutional Operations
Company (FIIOC), 82 Devonshire Street, Boston, Massachusetts 02109, an
affiliate of FMR. The Transfer Agent reallows to FIIOC a portion of its
fee for accounts for which FIIOC provides limited services, or its full fee
for accounts that FIIOC maintains on its behalf.
The Fund's operating expenses include custodial, legal and accounting fees,
charges to register Fidelity Advisor Series VI (the Trust) or the Fund with
federal and state regulatory authorities and other miscellaneous expenses.
DISTRIBUTION AND SERVICE PLAN. The Trustees of the Trust have adopted a
Distribution and Service Plan (the Plan) on behalf of the Fund 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 intended primarily to result
in the sale of shares of the fund except pursuant to a plan adopted by the
fund under the Rule. The Board of Trustees has adopted the Plan to allow
the Fund and FMR to incur certain expenses that might be considered to
constitute direct or indirect payment by the Fund of distribution expenses.
Under the Plan, the Fund is authorized to pay Distributors a monthly
distribution fee as compensation for its services and expenses in
connection with the distribution of shares of the Fund. The Fund pays
Distributors a distribution fee at an annual rate of up to .40% (or such
lesser amount as the Trustees may, from time to time, determine) of the
Fund's average net assets determined as of the close of business on each
day throughout the month. Currently, the Trustees have approved an annual
rate of .15% of the Fund's average net assets. This fee may be increased
only when, in the opinion of the Trustees, it is in the best interest of
the Fund's shareholders to do so. This distribution fee is paid by the
Fund, not by individual accounts.
All or a portion of the distribution fee may be paid by Distributors to
investment professionals as compensation for selling shares of the Fund and
providing ongoing sales support services or for shareholder support
services. The distribution fee is an expense of the Fund in addition to the
management fee and the Fund's other expenses. Such expenses will reduce the
Fund's net investment income, yield and total return.
The Plan also provides that through Distributors, FMR may make payments
from its management fee or other resources to investment professionals in
connection with the distribution of Fund shares. Investment professionals
will be compensated at the rate of .25% for purchases of $1 million or
more. (Certain restrictions may apply. Plea se refer to the Fund's
SAI.)
D istributors may pay all or a portion of the applicable sales charge
and distribution and service fee to investment professionals who sell
shares of the Fund. Investment professionals who provide enhanced inquiry,
order entry and sales facilities in connection with transactions in Fund
shares by their clients may receive an administrative fee up to the maximum
applicable sales charge described in "Sales Charges and Investment
Professional Concessions," on page __. In addition, Distributors may, at
its expense, provide promotional incentives such as sales contests and
trips to investment professionals who support the sale of shares of the
Fund. In some instances, these incentives may be offered only to certain
types of investment professionals, such as bank-affiliated or non-bank
affiliated broker-dealers, or to investment professionals whose
representatives provide services in connection with the sale or expected
sale of significant amounts of shares.
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 fully defined, in Distributors' opinion it
should not prohibit banks from being paid for shareholder servicing and
recordkeeping. If, because of changes in law or regulation, or because of
new interpretations of existing law, a bank or the Fund were prevented from
continuing these arrangements, it is expected that the Board would make
other arrangements for these services and that shareholders would not
suffer adverse financial consequences. 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.
VALUATION
The Fund's shares are valued at NAV, which is computed by adding the value
of all security holdings and other assets of the Fund, deducting
liabilities and dividing the result by the number of shares of the Fund
outstanding. NAV normally is calculated as of the close of business of the
NYSE (normally 4:00 p.m. Eastern time). The Fund is open for business and
its NAV is calculated each day the NYSE is open for trading. Fund
securities and other assets are valued primarily on the basis of market
quotations furnished by pricing services, or if quotations are not
available, by a method that the Board of Trustees believes accurately
reflects fair value.
PERFORMANCE
The Fund's performance may be quoted in advertising in terms of yield and
total return. All performance information is historical and is not intended
to indicate future performance. Share price, yield and total return
fluctuate in response to market conditions and other factors, and the
Fund's shares when redeemed may be worth more or less than their original
cost. Excluding the Fund's 1.50% sales charge from a performance
calculation produces a higher return figure.
YIELD refers to the income generated by a investment in the Fund over a
given period of time, expressed as an annual percentage rate. Yields are
calculated according to accounting methods that are standardized for all
stock and bond funds. The Fund also may quote its distribution rate, which
reflects the Fund's income dividends to its shareholders, divided by the
Fund's offering price (including the maximum sales charge) for each day in
a given period. The Fund may quote TAX-EQUIVALENT YIELDS, which show the
taxable yields an investor would have to earn after taxes to equal the
Fund's after tax yield. A tax-equivalent yield is calculated by dividing
the Fund's yield by the result of one minus a stated federal tax rate.
Because yield calculation methods differ from the methods used for other
accounting purposes, the Fund's yield may not equal, the income paid to
your account or the income reported in the Fund's financial statements. In
calculating yield, the Fund may from time to time use a security's coupon
rate instead of its yield to maturity in order to reflect the risk premium
of that security. This practice will have the effect of reducing the
Fund's yield. The Fund may also quote DISTRIBUTION RATE, which reflects
the Fund's income dividends to its shareholders, divided by the Fund's
offering price (including the maximum sales charge) for each day in a given
period. Other illustrations of performance may show moving averages over
specific periods.
TOTAL RETURN is the change in value of an investment in the Fund over a
given period assuming reinvestment of any dividends and capital gains. A
CUMULATIVE TOTAL RETURN reflects actual performance over a stated period of
time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that,
if achieved annually, would have produced the same cumulative total return
if the Fund's performance had been constant over the entire period. Average
annual total returns tend to smooth out variations in performance and are
not the same as actual year-by-year results. Average annual and cumulative
total returns usually will include the effect of paying the Fund's maximum
sales charge.
PORTFOLIO TRANSACTIONS
The Fund's securities generally are traded in the over-the-counter market
through broker-dealers. A broker-dealer is a securities firm or bank which
makes a market for securities by offering to buy at one price and sell at a
slightly higher price. The difference between the prices is known as a
spread. Since FMR trades a large number of securities, including those of
Fidelity's other funds, broker-dealers are willing to work with the funds
on a more favorable spread than would be possible for most individual
investors. Also, the Fund generally pays lower commissions when placing
trades with broker-dealers. The Fund will pay commissions in connection
with transactions in futures contracts and options.
The Fund has authorized FMR to allocate transactions to some broker-dealers
who help distribute the Fund's shares or shares of Fidelity's other funds,
and on an agency basis to an affiliate, Fidelity Brokerage Services, Inc.
(FBSI). FMR will make such allocations if commissions are comparable to
those charged by non-affiliated qualified broker-dealers for similar
services.
Higher commissions may be paid to firms that provide research services to
the extent permitted by law. FMR also is authorized to allocate brokerage
transactions to FBSI in order to secure from FBSI research services
produced by third party, independent entities. FMR may use this research
information in managing the Fund's assets, as well as the assets of other
clients.
When consistent with its investment objective, the Fund may engage in
short-term trading when consistent with its objective. Also, a security may
be sold and another of comparable quality simultaneously purchased to take
advantage of what FMR believes to be a temporary disparity in the normal
yield relationship of the two securities. The frequency of portfolio
transactions - the Fund's turnover rate - will vary from year to year,
depending on market conditions, but is not expected to exceed ____% in
the Fund's first fiscal period ending November 30, 1994.
THE FUND AND THE FIDELITY ORGANIZATION
Fidelity Advisor Series VI is an open-end, management investment company
established as a Massachusetts business trust on June 1, 1983 . The
Trust's Board of Trustees supervises Fund activities and reviews the Fund's
contractual arrangements with companies that provide the Fund with
services. The Fund is not required to hold annual shareholder meetings,
although special meetings may be called for the Fund or the Trust as a
whole for purposes such as electing or removing Trustees, changing
fundamental investment policies or limitations or approving a management
contract or plan of distribution. As a shareholder, you receive one vote
for each share and fractional votes for fractional shares of the Fund you
own. Separate votes are taken by each portfolio of the Trust if a matter
affects just that portfolio.
Fidelity Investments is one of the largest investment management
organizations in the U.S. and has its principal business address at 82
Devonshire Street, Boston, Massachusetts 02109. It includes a number of
different companies that provide a variety of financial services and
products. The Trust employs various Fidelity companies to perform certain
activities required to operate the Fund.
Fidelity Management & Research Company is the original Fidelity
company, founded in 1946. It provides a number of mutual funds and other
clients with investment research and portfolio management services. It
maintains a large staff of experienced investment personnel and a full
complement of related support facilities. As of _______________________,
FMR advised funds having approximately million shareholder accounts
with a total value of more than $__ billion. Fidelity Distributors
Corporation distributes shares for the Fidelity funds.
FMR Corp. is the parent company for the Fidelity companies. Through
ownership of voting common stock, Edward C. Johnson 3d, President and a
Trustee of the Trust, Johnson family members, and various trusts for the
benefit of Johnson family members form a controlling group with respect to
FMR Corp.
[FUND MANAGER BIO - TO BE INSERTED]
APPENDIX
The following paragraphs provide a brief description of securities in which
the Fund may invest and transactions it may make. The Fund is not limited
by this discussion, however, and may purchase other types of securities and
enter into other types of transactions if they are consistent with the
Fund's investment objective and policies.
MUNICIPAL SECURITIES include GENERAL OBLIGATION SECURITIES, which are
backed by the full taxing power of a municipality, and REVENUE SECURITIES,
which are backed by the revenues of a specific tax, project, or facility.
INDUSTRIAL REVENUE BONDS are a type of revenue bond backed by the credit
and security of a private issuer and may involve greater risk. PRIVATE
ACTIVITY MUNICIPAL SECURITIES, which may be subject to the federal
alternative minimum tax, include securities issued to finance housing
projects, student loans, and privately owned solid waste disposal and water
and sewage treatment facilities.
TAX AND REVENUE ANTICIPATION NOTES are issued by municipalities in
expectation of future tax or other revenues, and are payable from those
specific taxes or revenues. BOND ANTICIPATION NOTES normally provide
interim financing in advance of an issue of bonds or notes, the proceeds of
which are used to repay the anticipation notes. TAX-EXEMPT COMMERCIAL PAPER
is issued by municipalities to help finance short-term capital or operating
needs.
MUNICIPAL LEASE OBLIGATIONS are issued by a state or local government or
authority to acquire land and a wide variety of equipment and facilities.
These obligations typically are not fully backed by the municipality's
credit, and their interest may become taxable if the lease is assigned. If
funds are not appropriated for the following year's lease payments, a lease
may terminate, with the possibility of default on the lease obligation and
significant loss to the Fund. CERTIFICATES OF PARTICIPATION in municipal
lease obligations or installment sales contracts entitle the holder to a
proportionate interest in the lease-purchase payments made.
RESOURCE RECOVERY BONDS are a type of revenue bond issued to build
facilities such as solid waste incinerators or waste-to-energy plants.
Typically, a private corporation will be involved, at least during the
construction phase, and the revenue stream will be secured by fees or rents
paid by municipalities for use of the facilities. The viability of a
resource recovery project, environmental protection regulations, and
project operator tax incentives may affect the value and credit quality of
resource recovery bonds.
ZERO COUPON BONDS. Zero coupon bonds do not make regular 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 daily dividend, the Fund takes into account as
income a portion of the difference between a zero coupon bond's purchase
price and its face value.
ASSET-BACKED SECURITIES. The Fund may purchase units of beneficial interest
in pools of purchase contracts, financing leases, and sales agreements
entered into by municipalities. These municipal obligations may be created
when a municipality enters into an installment purchase contract or lease
with a vendor and may be secured by the assets purchased or leased by the
municipality. However, except in very limited circumstances, there will be
no recourse against the vendor if the municipality stops making payments.
The market for tax-exempt asset-backed securities is still relatively new.
These obligations are likely to involve unscheduled prepayments of
principal.
VARIABLE AND FLOATING RATE INSTRUMENTS, including certain participation
interests in municipal obligations, have interest rate adjustment formulas
that help to stabilize their market values. Many variable or floating rate
instruments also carry demand features that permit the Fund to sell them at
par value plus accrued interest on short notice.
A DEMAND FEATURE is a put that entitles the security holder to repayment of
the principal amount of the underlying security on no more than 30 days'
notice at any time or at specified intervals. A STANDBY COMMITMENT is a put
that entitles the security holder to same-day settlement at amortized cost
plus accrued interest.
Issuers or financial intermediaries who provide demand features or standby
commitments often support their ability to buy securities on demand by
obtaining LETTERS OF CREDIT (LOCS) or other guarantees from domestic or
foreign banks. LOCs also may be used as credit supports for other types of
municipal instruments. FMR may rely upon its evaluation of a bank's credit
in determining whether to purchase an instrument supported by an LOC. In
evaluating a foreign bank's credit, FMR will consider whether adequate
public information about the bank is available and whether the bank may be
subject to unfavorable political or economic developments, currency
controls, or other governmental restrictions that might affect the bank's
ability to honor its credit commitment.
DELAYED-DELIVERY TRANSACTIONS. The Fund may buy and sell securities on a
when-issued or delayed-delivery basis, with payment and delivery taking
place at a future date. The market value of securities purchased in this
way may change before the delivery date, which could increase fluctuations
in the Fund's yield. Ordinarily, the Fund will not earn interest on the
securities purchased until they are delivered.
INVERSE FLOATERS are instruments whose interest rates bear an inverse
relationship to the interest rate on another security or the value of an
index. Changes in the interest rate on the other security or index
inversely affect the residual interest rate paid on the inverse floater,
with the result that the inverse floater's price will be considerably more
volatile than that of a fixed-rate bond.
REFUNDING CONTRACTS. The Fund may purchase securities on a when-issued
basis in connection with the refinancing of an issuer's outstanding
indebtedness. Refunding contracts require the issuer to sell and the Fund
to buy refunded municipal obligations at a stated price and yield on a
settlement date that may be several months or several years in the future.
ILLIQUID INVESTMENTS. The Fund may invest up to 10% of its assets in
illiquid investments. Under the supervision of the Board of Trustees, FMR
determines the liquidity of the Fund's investments. The absence of a
trading market can make it difficult to ascertain a market value for
illiquid investments. Disposing of illiquid investments may involve
time-consuming negotiation and legal expenses, and it may be difficult or
impossible for the Fund to sell them promptly at an acceptable price.
RESTRICTED SECURITIES. The Fund may purchase securities which cannot be
sold to the public without registration under the Securities Act of 1933
(restricted securities). Unless registered for sale, these securities can
only be sold in privately negotiated transactions or pursuant to an
exemption from registration.
OPTIONS AND FUTURES CONTRACTS. The Fund may buy and sell options and
futures contracts to manage its exposure to changing interest rates and
security prices. Some options and futures strategies, including selling
futures, buying puts, and writing calls, tend to hedge the Fund's
investments against price fluctuations. Other strategies, including buying
futures, writing puts, and buying calls, tend to increase market exposure.
Options and futures may be combined with each other in order to adjust the
risk and return characteristics of the overall strategy. The Fund may
invest in options and futures based on any type of security or index,
including options not traded on exchanges.
Options and futures can be volatile investments, and involve certain risks.
If FMR applies a hedge at an inappropriate time or judges interest rates
incorrectly, options and futures strategies may lower the Fund's return.
The Fund could also experience losses if the prices of its options and
futures positions were poorly correlated with its other investments, or if
it could not close out its positions because of an illiquid secondary
market. Options and futures do not pay interest, but may produce taxable
capital gains.
The Fund will not hedge more than 25% of its total assets by selling
futures, buying puts, and writing calls under normal conditions. In
addition, the Fund will not buy futures or write puts whose underlying
value exceeds 25% of its total assets, and will not buy calls with a value
exceeding 5% of its total assets.
INTERFUND BORROWING PROGRAM. The Fund has received permission from the SEC
to lend money to and borrow money from other funds advised by FMR or its
affiliates, but it will participate in the interfund borrowing program only
as a borrower. Interfund loans normally will 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 cost of bank loans. The
Fund will not borrow through the program if, after doing so, total
outstanding borrowings would exceed 15% of total assets. 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.
FIDELITY ADVISOR SHORT-INTERMEDIATE TAX-EXEMPT FUND
A FUND OF FIDELITY ADVISOR SERIES VI
STATEMENT OF ADDITIONAL INFORMATION
FEBRUARY 14, 1994
This Statement is not a prospectus but should be read in conjunction with
the current Prospectus (dated February 14, 1994) of Fidelity Advisor
Short-Intermediate Tax-Exempt Fund (the Fund). Please retain this document
for future reference. Additional copies of the Prospectus and Statement of
Additional Information are available upon request from Fidelity
Distributors Corporation, 82 Devonshire Street Boston, Massachusetts 02109,
or from your investment professional.
(bullet) NATIONWIDE 800-522-7297
TABLE OF CONTENTS PAGE
Investment Policies and Limitations
Portfolio Transactions
Valuation of Portfolio Securities
Performance
Additional Purchase, Exchange and Redemption Information
Distributions and Taxes
FMR
Trustees and Officers
Management Contract
Distribution and Service Plan
Description of the Trust
Appendix
Investment Manager
Fidelity Management & Research Company (FMR)
Distributor
Fidelity Distributors Corporation (Distributors)
Transfer Agent
United Missouri Bank, N.A. (United Missouri)
Sub-Transfer Agent
State Street Bank and Trust Company (State Street)
ASIM-SAI-2/94
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 shall 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 investment policies and limitations may not be
changed without approval by a "majority of the outstanding voting
securities" (as defined in the Investment Company Act of 1940) of the Fund.
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH
IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(2) 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;
(3) 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;
(4) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities, or tax-exempt obligations issued or guaranteed by a U.S.
territory or possession or a state or local government, or a political
subdivision of any of the foregoing) if, as a result, more than 25% of the
Fund's total assets would be invested in securities of companies whose
principal business activities are in the same industry;
(5) 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;
(6) 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);
(7) lend any security or make any other 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); or
(8) invest in oil, gas or other mineral exploration or development
programs.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) To meet federal tax requirements for qualification as a "regulated
investment company," the Fund limits its investments so that at the close
of each quarter of its taxable year: (a) with regard to at least 50% of
total assets, no more than 5% of total assets are invested in the
securities of a single issuer, and (b) no more than 25% of total assets are
invested in the securities of a single issuer. Limitations (a) and (b) do
not apply to "Government securities" as defined for federal tax purposes.
(ii) The Fund does not currently intend to sell securities short.
(iii) 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.
(iv) 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 ( 2 )). 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.
(v) 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.
(vi) The Fund does not currently intend to engage in repurchase agreements
or make loans, but this limitation does not apply to purchases of debt
securities.
(vii) 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 to securities received as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or merger.
(viii) 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.
For purposes of limitations (1), (4), and (i), FMR identifies the issuer of
a security depending on its terms and conditions. In identifying the
issuer, FMR will consider the entity or entities responsible for payment of
interest and repayment of principal and the source of such payments; the
way in which assets and revenues of an issuing political subdivision are
separated from those of other political entities; and whether a
governmental body is guaranteeing the security.
For the Fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions"
beginning on page __.
AFFILIATED BANK TRANSACTIONS. Pursuant to exemptive orders issued by the
Securities and Exchange Commission (SEC), the Fund may engage in
transactions with banks that are, or may be considered to be, "affiliated
persons" of the Fund under the 1940 Act. Such transactions may be entered
into only pursuant to procedures established and periodically reviewed by
the Board of Trustees. These transactions may include repurchase
agreements with custodian banks; purchases, as principal, of short-term
obligations of and repurchase agreements with, the 50 largest U.S. banks
(measured by deposits); transactions in municipal securities; and
transactions in U.S. government securities with affiliated banks that are
primary dealers in these securities.
FUND'S RIGHTS AS A SHAREHOLDER. The Fund does not intend to direct or
administer the day-to-day operations of any company. The Fund, however,
may exercise its rights as a shareholder and may communicate its views on
important matters of policy to management, the board of directors, and
other shareholders of a company when FMR determines that such matters could
have a significant effect on the value of the Fund's investment in the
company. The activities that the Fund may engage in, either individually
or in conjunction with others, may include, among others, supporting or
opposing proposed changes in a company's corporate structure or business
activities; seeking changes in a company's directors or management; seeking
changes in company's direction or policies; seeking the sale or
reorganization of the company or a portion of its assets; or supporting or
opposing third-party takeover efforts. This area of corporate activity is
increasingly prone to litigation and it is possible that the Fund could be
involved in lawsuits related to such activities. FMR will monitor such
activities with a view to mitigating, to the extent possible, the risk of
litigation against the Fund and the risk of actual liability if the Fund is
involved in litigation. No guarantee can be made, however, that litigation
against the Fund will not be undertaken or liabilities incurred.
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 (and more than
seven days in the future). 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.
REFUNDING CONTRACTS. The Fund may purchase securities on a when-issued
basis in connection with the refinancing of an issuer's outstanding
indebtedness. Refunding contracts require the issuer to sell and the Fund
to buy refunded municipal obligations at a stated price and yield on a
settlement date that may be several months or several years in the future.
The Fund generally will not be obligated to pay the full purchase price if
it fails to perform under a refunding contract. Instead, refunding
contracts generally provide for payment of liquidated damages to the issuer
(currently 15-20% of the purchase price). The Fund may secure its
obligations under a refunding contract by depositing collateral or a letter
of credit equal to the liquidated damages provisions of the refunding
contract. When required by SEC guidelines, the Fund will place liquid
assets in a segregated custodial account equal in amount to its obligations
under refunding contracts.
INVERSE FLOATERS are instruments whose interest rates bear an inverse
relationship to the interest rate on another security or the value of an
index. Changes in the interest rate on the other security or index
inversely affect the residual interest rate paid on the inverse floater,
with the result that the inverse floater's price will be considerably more
volatile than that of a fixed-rate bond. For example, a municipal issuer
may decide to issue two variable-rate instruments instead of a single
long-term, fixed-rate bond. The interest rate on one instrument reflects
short-term interest rates, while the interest rate on the other instrument
(the inverse floater) reflects the approximate rate the issuer would have
paid on a fixed-rate bond, multiplied by two, minus the interest rate paid
on the short-term instrument. Depending on market availability, the two
portions may be recombined to form a fixed-rate municipal bond. The market
for inverse floaters is relatively new.
VARIABLE OR FLOATING RATE OBLIGATIONS, including certain participation
interests in municipal instruments, have interest rate adjustment formulas
that help stabilize their market values. Many variable and floating rate
instruments also carry demand features that permit the Fund to sell them at
par value plus accrued interest on short notice.
In many instances bonds and participation interests have tender options or
demand features that permit the Fund to tender (or put) the bonds to an
institution at periodic intervals and to receive the principal amount
thereof. The Fund considers variable rate instruments structured in this
way (Participating VRDOs) to be essentially equivalent to other VRDOs it
purchases. The IRS has not ruled whether the interest on Participating
VRDOs is tax-exempt and, accordingly, the Fund intends to purchase these
instruments based on opinions of bond counsel. The Fund may also invest in
fixed-rate bonds that are subject to third party puts and in participation
interests in such bonds held by a bank in trust or otherwise.
TENDER OPTION BONDS are created by coupling an intermediate- or long-term,
tax-exempt bond (generally held pursuant to a custodial arrangement) with a
tender agreement that gives the holder the option to tender the bond at its
face value. As consideration for providing the tender option, the sponsor
(usually a bank, broker-dealer, or other financial institution) receives
periodic fees equal to the difference between the bond's fixed coupon rate
and the rate (determined by a remarketing or similar agent) that would
cause the bond, coupled with the tender option, to trade at par on the date
of such determination. After payment of the tender option fee, the Fund
effectively holds a demand obligation that bears interest at the prevailing
short-term tax-exempt rate. In selecting tender option bonds for the Fund,
FMR will consider the creditworthiness of the issuer of the underlying
bond, the custodian, and the third party provider of the tender option. In
certain instances, a sponsor may terminate a tender option if, for example,
the issuer of the underlying bond defaults on interest payments.
ZERO COUPON BONDS do not make regular 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 daily dividend, the Fund takes into account as income a
portion of the difference between a zero coupon bond's purchase price and
its face value.
STANDBY COMMITMENTS are puts that entitle holders to same-day settlement at
an exercise price equal to the amortized cost of the underlying security
plus accrued interest, if any, at the time of exercise. The Fund may
acquire standby commitments to enhance the liquidity of portfolio
securities.
Ordinarily the Fund will not transfer a standby commitment to a third
party, although it could sell the underlying municipal security to a third
party at any time. The Fund may purchase standby commitments separate from
or in conjunction with the purchase of securities subject to such
commitments. In the latter case, the Fund would pay a higher price for the
securities acquired, thus reducing their yield to maturity.
Issuers or financial intermediaries may obtain letters of credit or other
guarantees to support their ability to buy securities on demand. FMR may
rely upon its evaluation of a bank's credit in determining whether to
support an instrument supported by a letter of credit. In evaluating a
foreign bank's credit, FMR will consider whether adequate public
information about the bank is available and whether the bank may be subject
to unfavorable political or economic developments, currency controls, or
other governmental restrictions that might affect the bank's ability to
honor its credit commitment.
Standby commitments are subject to certain risks, including the ability of
issuers of standby commitments to pay for securities at the time the
commitments are exercised; the fact that standby commitments are not
marketable by the Fund; and the possibility that the maturities of the
underlying securities may be different from those of the commitments.
MUNICIPAL LEASE OBLIGATIONS. The Fund may invest a portion of its assets in
municipal leases and participation interests therein. These obligations,
which may take the form of a lease, an installment purchase, or a
conditional sale contract, are issued by state and local governments and
authorities to acquire land and a wide variety of equipment and facilities.
Generally, the Fund will not hold such obligations directly as a lessor of
the property, but will purchase a participation interest in a municipal
obligation from a bank or other third party. A participation interest gives
the Fund a specified, undivided interest in the obligation in proportion to
its purchased interest in the total amount of the obligation.
Municipal leases frequently have risks distinct from those associated with
general obligation or revenue bonds. State constitutions and statutes set
forth requirements that states or municipalities must meet to incur debt.
These may include voter referenda, interest rate limits, or public sale
requirements. Leases, installment purchases, or conditional sale contracts
(which normally provide for title to the leased asset to pass to the
governmental issuer) have evolved as a means for governmental issuers to
acquire property and equipment without meeting their constitutional and
statutory requirements for the issuance of debt. Many leases and contracts
include non-appropriation clauses" providing that the governmental issuer
has no obligation to make future payments under the lease or contract
unless money is appropriated for such purposes by the appropriate
legislative body on a yearly or other periodic basis. Non-appropriation
clauses free the issuer from debt issuance limitations.
FEDERALLY TAXABLE OBLIGATIONS. The Fund does not intend to invest in
securities whose interest is federally taxable; however, from time to time,
the Fund may invest a portion of its assets on a temporary basis in
fixed-income obligations whose interest is subject to federal income tax.
For example, the Fund may invest in obligations whose interest is federally
taxable pending the investment or reinvestment in municipal securities of
proceeds from the sale of its shares or sales of portfolio securities.
Should the Fund invest in federally taxable obligations, it would purchase
securities that in FMR's judgment are of high quality. These would include
obligations issued or guaranteed by the U.S. government or its agencies or
instrumentalities; obligations of domestic banks; and repurchase
agreements. The Fund's standards for high-quality, taxable obligations are
essentially the same as those described by Moody's Investors Service, Inc.
(Moody's) in rating corporate obligations within its two highest ratings of
Prime-1 and Prime-2, and those described by Standard & Poor's
Corporation (S&P) in rating corporate obligations within its two
highest ratings of A-1 and A-2.
Proposals to restrict or eliminate the federal income tax exemption for
interest on municipal obligations are introduced before Congress from time
to time. Proposals also may be introduced before state legislatures that
would affect the state tax treatment of the Fund's distributions. If such
proposals were enacted, the availability of municipal obligations and the
value of the Fund's holdings would be affected and the Trustees would
reevaluate the Fund's investment objective and policies.
The Fund anticipates being as fully invested as practicable in municipal
securities; however, there may be occasions when, as a result of maturities
of portfolio securities, sales of Fund shares, or in order to meet
redemption requests, the Fund may hold cash that is not earning income. In
addition, there may be occasions when, in order to raise cash to meet
redemptions, the Fund may be required to sell securities at a loss.
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 over-the-counter options. Also, FMR may
determine some restricted securities and municipal lease obligations to be
illiquid. However, with respect to over-the-counter 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 were invested in illiquid securities, it would seek to take
appropriate steps to protect liquidity.
RESTRICTED SECURITIES generally can be sold in privately negotiated
transactions, pursuant to an exemption from registration under the
Securities Act of 1933, or in a registered public offering. Where
registration is required, the Fund may be obligated to pay all or part of
the registration expense and a considerable period may elapse between the
time it decides to seek registration and the time the Fund may be permitted
to sell a security under an effective registration statement. If, during
such a period, adverse market conditions were to develop, the Fund might
obtain a less favorable price than prevailed when it decided to seek
registration of the security.
LOWER-RATED MUNICIPAL SECURITIES. The Fund may invest a portion of its
assets in lower-rated municipal securities as described in the Prospectus.
While the market for municipals is considered to be substantial, adverse
publicity and changing investor perceptions may affect the ability of
outside pricing services used by the Fund to value its portfolio
securities, and the Fund's ability to dispose of lower-rated bonds. The
outside pricing services are monitored by FMR and reported to the Board to
determine whether the services are furnishing prices that accurately
reflect fair value. The impact of changing investor perceptions may be
especially pronounced in markets where municipal securities are thinly
traded.
The Fund may choose, at its expense or in conjunction with others, to
pursue litigation or otherwise exercise its rights as a security holder to
seek to protect the interests of security holders if it determines this to
be in the best interest of the Fund's shareholders.
REPURCHASE AGREEMENTS. In a repurchase agreement, the Fund purchases a
security and simultaneously commits to resell that security to the seller
at an agreed-upon price on an agreed-upon date within a number of days from
the date of purchase. 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. A repurchase agreement involves the
obligation of the seller to pay the agreed-upon price, which obligation is
in effect secured by the value (at least equal to the amount of the
agreed-upon resale price and marked to market daily) of the underlying
security. The Fund may enter into a repurchase agreement with respect to
any security in which it is authorized to invest. While it does not
presently appear possible to eliminate all risks from these transactions
(particularly the possibility of a decline in the market value of the
underlying securities, as well as delay and costs to the Fund in connection
with bankruptcy proceedings), it is the Fund's current policy to limit
repurchase agreements to those member banks of the Federal Reserve System
and primary dealers in U.S. government securities 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 is deemed satisfactory by FMR. As a result, such
transactions may increase fluctuations in the market value of the Fund's
assets and may be viewed as a form of leverage.
LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. The Fund intends to file
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 Section 4.5 of the
regulations 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 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 Statement of Additional Information are not
fundamental policies and may be changed as regulatory agencies permit.
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.
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 underlying 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.
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 or 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.
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 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.
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.
EDUCATION. In general, there are two types of education-related bonds;
those issued to finance projects for public colleges and universities, and
those representing pooled interests in student loans. Bonds issued to
supply public educational institutions with funds are subject to the risk
of unanticipated revenue decline, primarily the result of decreasing
student enrollment. Among the factors that may affect enrollment are
restrictions on students' ability to pay tuition, availability of state and
federal funding, and general economic conditions.
Student loan revenue bonds are backed by pools of student loans and are
generally offered by state (or substate) authorities or commissions.
Student loans are guaranteed by state guarantee agencies and reinsured by
the Department of Education. The risks associated with these issues is
that default on the student loans may result in prepayment to bondholders
and an earlier-than-anticipated retirement of the bond.
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 will consider
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; the availability of
securities or the purchasers or sellers of securities; furnishing analyses
and reports concerning issuers, industries, securities, economic factors
and trends, portfolio strategy and performance of accounts; and effecting
securities transactions and performing functions incidental thereto (such
as clearance and settlement). The selection of such broker-dealers is
generally made by FMR (to the extent possible consistent with execution
considerations) in accordance with a ranking of broker-dealers determined
periodically by FMR's investment staff 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
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 on shares of other Fidelity
Funds to the extent permitted by law. FMR may use research services
provided by and place agency transactions with Fidelity Brokerage Services,
Inc. (FBSI), a member of the New York Stock Exchange (NYSE) and subsidiary
of FMR Corp., if the commissions are fair and reasonable and comparable to
commissions charged by non-affiliated qualified brokerage firms for similar
services. 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, except in
accordance with regulations of the SEC. Pursuant to such regulations, the
Board of Trustees has approved a written agreement which permits FBSI to
effect fund portfolio transactions on national securities exchanges and to
retain compensation in connection with such transactions.
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 whether they are reasonable in relation to the
benefits of the Fund.
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 are managed by
the same investment adviser, particularly when the same security is
suitable for the investment objective of more than one fund.
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 a formula considered by the officers of the funds involved to be
equitable to 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 OF PORTFOLIO SECURITIES
Valuations of portfolio securities furnished by the pricing service
employed by the Fund are based upon a computerized matrix system or
appraisals by the pricing service, in each case in reliance upon
information concerning market transactions and quotations from recognized
municipal securities dealers. The methods used by the pricing service and
the quality of valuations so established are reviewed by officers of the
Fund and Fidelity Service Company (Service) under the general supervision
of the Trustees or officers acting on behalf of the Trustees. There are a
number of pricing services available, and the Trustees, on the basis of
on-going evaluation of these services, may use other pricing services or
discontinue the use of any pricing service in whole or in part.
The Fund's money market instruments are valued on the basis of amortized
cost. This technique involves initially valuing an instrument at its cost
and thereafter assuming a constant amortization to maturity of any discount
or premium, regardless of the market value of the instrument. The
amortized cost value of an instrument may be higher or lower than the price
the Fund would receive if it sold the instrument.
During periods of declining interest rates, the Fund's yield based on
amortized cost may be higher than a yield based on market prices and
estimates of market prices. Under these circumstances, a new investor in
the Fund would be able to obtain a somewhat higher yield than would result
from investment in a fund utilizing solely market quotations to determine
its NAV, and existing shareholders would receive less investment income.
The converse would apply in a period of rising interest rates.
PERFORMANCE
The Fund may quote its 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 returns 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 are computed by dividing the Fund's interest
and dividend 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 its offering price (including
the 1.5% maximum sales charge) 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 are excluded from the calculation.
The Fund's tax-equivalent yield is the rate an investor would have to earn
from a fully taxable investment in order to equal the Fund's tax-free
yields. Tax-equivalent yields are calculated by dividing the Fund's yield
by the result of one minus a stated federal and state tax rate. (If only a
portion of the Fund's yield was tax-exempt, only that portion is adjusted
in the calculation.)
1993 TAX RATES AND TAX-EQUIVALENT YIELDS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Federal If individual tax-exempt yield is:
Single Return Joint Return Tax 4.5% 5.0% 5.5% 6.0% 6.5% 7.0%
Taxable Income* Taxable Income Bracket** The taxable-equivalent yield is:
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$22, 101 - $53,500 $36,901 - $89,150 28% 6.25% 6.94% 7.64% 8.33% 9.03% 9.72%
$53,501 - above $89,151 - above 31% 6.52% 7.25% 7.97% 8.70% 9.42% 10.14%
</TABLE>
* Net amount subject to federal income tax after deductions and exemptions.
Assumes ordinary income only; does not include impact of preferential rate
on long-term capital gain income.
** Excludes the impact of the phaseout of personal exemptions, limitation
on itemized deductions, and other credits, exclusions, and adjustments
which may raise a taxpayer's marginal tax rate. An increase in a
shareholder's marginal tax rate would increase that shareholder's
tax-equivalent yield.
The Fund may invest a portion of its assets in obligations that are subject
to federal income tax. When the Fund invests in these obligations, its
tax-equivalent yield will be lower. In the table above, tax-equivalent
yields are calculated assuming investments are 100% federally tax-free.
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 the 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 that 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 current yield of the Fund. 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 net asset
value per share (NAV) over the 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 return of 100% over
ten years would produce an average annual return of 7.18%, which is the
steady annual rate 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 gain or loss and
changes in share price) in order to illustrate the relationship of these
factors and their contributions to total returns. Total returns may be
quoted with or without taking the Fund's 1.5% maximum sales charge into
account. Excluding the Fund's sales charge from a total return calculation
produces a higher total return figure. Total returns, yields and other
performance information may be quoted numerically or in a table, graph or
similar illustration.
PERFORMANCE COMPARISONS. 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 Consumer
Price Index), 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.
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 which monitors the performance of
mutual funds. Lipper generally ranks funds on the basis of total return,
assuming reinvestment of distributions, but does not take sales charges or
redemption fees into consideration, and is prepared without regard to tax
consequences. Lipper may also rank the funds based on yield. In addition
to the mutual fund rankings, The Fund's average annual total returns,
yields and distribution rate include the effect of the maximum 1.5% sales
charge. Cumulative total returns do not include the effect of the sales
charge and would have been lower if the sales charge had been taken into
account. The Fund's performance may be compared to mutual fund performance
indices prepared by Lipper.
The Fund may compare its performance to that of other compilations or
indices of comparable quality to those listed above which may be developed
and made available in the future.
The Fund may quote its performance in advertising and other types of
literature as compared to certificates of deposit (CDs), bank-issued money
market instruments and money market mutual funds. Unlike CDs and money
market instruments, money market mutual funds and the Fund are not insured
by the FDIC.
The Fund may compare and contrast in advertising the relative advantages of
investing in a mutual fund versus an individual municipal bond. Unlike
tax-free mutual funds, individual municipal bonds offer a stated rate of
interest, and, if held to maturity, repayment of principal. Although some
individual municipal bonds might offer a higher return, they do not offer
the reduced risk of a mutual fund which invests in many different
securities. The initial investment requirements and sales charges of many
tax-free mutual funds are lower than the purchase cost of individual
municipal bonds, which generally are issued in $5,000 denominations and are
subject to direct brokerage costs. The Fund may quote the yield or total
return of Ginnie Maes, Fannie Maes, Freddie Macs, corporate bonds and U.S.
Treasury bonds and notes, either in comparison to each other or to the
Fund's performance. The Fund may compare and contrast in advertising the
relative advantages of investing in a mutual fund versus an individual
government security.
The Fund may compare its performance or the performance of securities in
which it may invest to averages published by IBC USA (Publications), Inc.
of Ashland, Massachusetts. These averages assume reinvestment of
distributions. The Bond Fund Report Averages/All Municipal, which is
reported in the BOND FUND REPORT, covers over 225 municipal 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.
The Fund may reference and discuss its fund number, Quotron number, CUSIP
number, and current portfolio manager in advertising.
From time to time, in reports and promotional literature, the Fund's
performance also may 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. In addition, the Fund may quote financial or
business publications and periodicals as they relate to fund management,
investment philosophy, and investment techniques. 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.
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.
The Fund may advertise examples of the effects of periodic investment
plans, including the principle of dollar cost averaging. In such a
program, the investor invests a fixed dollar amount in the 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
nor guard against loss in a declining market, the investor's average cost
per share can be lower than if fixed numbers of shares had been purchased
at the same intervals. In evaluating such a plan, investors should
consider their ability to continue purchasing shares through periods of low
price levels.
Of course, no assurance can be given that the Fund will achieve any
specific tax-exempt yield. While it is expected that the Fund will invest
principally in municipal obligations whose interest is not includable in
gross income for purposes of calculating federal income tax, other income
received by the Fund may be taxable.
TRADITION OF PERFORMANCE. Fidelity's tradition of performance is achieved
through
Money Management: a proud tradition of money management motivated by the
expectation of excellence backed by solid analysis and worldwide resources.
Fidelity employs a bottom-up approach to security selection based upon
in-depth analysis of the fundamentals of that investment opportunity.
Innovation: constant attention to the changing needs of today's investors
and vigilance to the opportunities that arise from changing global markets.
Research is central to Fidelity's investment decision-making process.
Fidelity's greatest resource--over 200 skilled investment
professionals--are supported with the most sophisticated technology
available.
Fidelity provides:
- - Global research resources: an opportunity to diversify portfolios and
share in the growth of markets outside the United States.
- - In-house, proprietary bond-rating system, constantly updated, which
provides extremely sensitive credit analysis.
- - Comprehensive chart room with over 1500 exhibits to provide sophisticated
charting of worldwide economic, financial, and technical indicators, as
well as to provide tracking of over 800 individual stocks for portfolio
managers.
- - State-of-the-art trading desk, with access to over 200 brokerage houses,
providing real-time information to achieve the best executions and optimize
the value of each transaction.
- - Use of extensive on-line computer-based research services.
Service: Timely, accurate and complete reporting. Prompt and expert
attention when an investor or an investment professional needs it.
As of ______________, FMR managed approximately $__ billion in fixed income
assets, as defined and tracked by Lipper. From time to time the Fund may
compare FMR's fixed income assets under management with that of other
investment advisors.
DURATION. Duration is a measure of volatility commonly used in the bond
market. Bonds with long durations are more volatile, or interest rate
sensitive, than bonds with short durations. (Interest rate sensitivity is
the magnitude of the change in a bond's price for a given change in a
bond's yield to maturity.) Duration also can be calculated for other fixed
income securities, or for portfolios of fixed income securities.
Unlike the maturity of a bond, which reflects only the time remaining until
the final principal payment is made to the bondholders, duration reflects
all of the coupon payments made to bondholders during the life of the bond,
as well as the final principal payment made when the bond matures. More
precisely, duration is the weighted average time remaining for the payment
of all cash flows generated by a bond, with the weights being the present
value of these cash flows. Present values are calculated using the bond's
yield to maturity.
Because there is only one payment to take into account, the duration of a
bond that pays all of its interest at maturity (a zero coupon security) is
the same as its maturity. The duration of a coupon bearing security will
be shorter than its maturity, however, because of the effect of its regular
interest payments. Generally, bonds with lower coupons or longer
maturities will have longer durations, and thus be more volatile, than
otherwise similar bonds with higher coupons or shorter maturities.
When the Fund invests in mortgage-backed securities, callable corporate
bonds or other bonds with imbedded options, there is a degree of
uncertainty regarding the timing of these securities' cash flows. As a
result, in order to calculate the durations of these securities, forecasts
of their probable cash flow patterns must be made. These forecasts require
various assumptions to be made as to future interest rate levels and, for
example, mortgage prepayment rates. Because duration calculations for
these types of securities are based in part on assumptions, duration
figures may not be precise and may change as economic conditions change.
ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION
The Fund is open for business and its NAV is calculated every day the NYSE
is open for trading. The NYSE has designated the following holiday
closings for 1994: Presidents Day (observed), Good Friday, Memorial Day
(observed), Independence Day (observed), Labor Day, Thanksgiving Day, and
Christmas Day (observed). Although FMR expects the same holiday schedule,
with the addition of New Year's Day, to be observed in the future, the NYSE
may modify its holiday schedule at any time. On any day that the NYSE
closes early, or as permitted by the SEC, the right is reserved to advance
the time on that day by which purchase and redemption orders must be
received. 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. Certain Fidelity funds may follow different holiday closing
schedules.
If the Trustees determine that existing conditions make cash payment
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 (the Rule) under the 1940 Act, the Fund is required
to give shareholders at least 60 days' notice prior to terminating or
modifying its 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 the shares to be exchanged as permitted
under the 1940 Act or by the SEC, 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 Fund's 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.
PURCHASE INFORMATION
As provided for in Rule 22d-1 under the 1940 Act, Distributors exercises
its right to waive the Fund's maximum 1.5% sales charge in connection with
the Fund's merger with or acquisition of any investment company or trust.
NET ASSET VALUE PURCHASES. Sales charges do not apply to shares of the
Fund purchased: (1) by registered representatives, bank trust officers and
other employees (and their immediate families) of investment professionals
having agreements with Distributors; (2) by a current or former Trustee or
officer of a Fidelity fund or a current or retired officer, director or
full-time employee of FMR Corp. or its direct or indirect subsidiaries (a
"Fidelity Trustee or employee"), the spouse of a Fidelity Trustee or
employee, a Fidelity Trustee or employee acting as custodian for a minor
child, or a person acting as trustee of a trust for the sole benefit of the
minor child of a Fidelity Trustee or employee; (3) by a charitable
organization (as defined in Section 501(c)(3) of the Internal Revenue Code)
investing $100,000 or more; (4) by a charitable remainder trust or life
income pool established for the benefit of a charitable organization (as
defined in Section 501(c)(3) of the Internal Revenue Code); (5) by trust
institutions investing on behalf of their clients; (6) in accounts as to
which a bank or broker-dealer charges an investment management fee,
provided the bank or broker-dealer has an agreement with Distributors; (7)
as part of an employee benefit plan (including Fidelity-Sponsored 403(b)
and Corporate IRA programs, but otherwise as defined in the Employee
Retirement Income Security Act (ERISA)), maintained by a U.S. Employer
having more than 200 eligible employees or a minimum of $1,000,000 invested
in Fidelity Advisor mutual funds, and the assets of which are held in a
bona fide trust for the exclusive benefit of employees participating
therein; (8) by any state, county, or city, or any governmental
instrumentality, department, authority or agency; (9) in a Fidelity or
Fidelity Advisor IRA account purchased with the proceeds of a distribution
from an employee benefit plan that is part of an employee benefit plan
having more than 200 eligible employees or a minimum of $3,000,000 in plan
assets invested in Fidelity mutual funds or $1,000,000 invested in Fidelity
Advisor mutual funds; (10) with redemption proceeds from other mutual fund
complexes on which the investor has paid a front-end sales charge only; and
(11) by an insurance company separate account used to fund annuity
contracts purchased by employee benefit plans (including 403(b) programs,
but otherwise as defined in ERISA), which, in the aggregate, have either
more than 200 eligible employees or a minimum of $3,000,000 in assets
invested in Fidelity mutual funds or a minimum of $1,000,000 invested in
Fidelity Advisor mutual funds.
Distributors compensates securities dealers and banks having agreements
with Distributors (investment professionals), who sell shares of the Fund
according to the schedule in the Fund's Prospectus. Distributors may, at
its expense, provide promotional incentives to investment professionals who
support the sale of shares of the Fund without reimbursement from the Fund.
In some instances, these incentives may be offered only to certain
investment professionals whose representatives provide services in
connection with the sale or expected sale of significant amounts of shares.
Fidelity Investments Institutional Operations Company (FIIOC), an affiliate
of FMR is paid fees based on the type, size and number of bank affiliated
client accounts and number of their monetary transactions.
QUANTITY DISCOUNTS. Reduced sales charges are applicable to purchases of
$50,000 or more of the Fund alone or in combination with purchases of
shares of other Fidelity Advisor Funds made at any one time (including
Daily Money Fund and Daily Tax-Exempt Money Fund shares acquired by
exchange from any Fidelity Advisor Fund with a sales charge). To obtain
the reduction of the sales charge, you or your investment professional must
notify FIIOC at the time of purchase whenever a quantity discount is
applicable to your purchase. Upon such notification, you will receive the
lowest applicable sales charge.
In addition to investing at one time in any combination of funds
(excluding Fidelity Capital Appreciation Fund) in an amount entitling you
to a reduced sales charge, you may qualify for a reduction in the sales
charge under the following programs:
COMBINED PURCHASES. When you invest in the Fund for several accounts at
the same time, you may combine these investments into a single transaction
if purchased through one investment professional and if the total is at
least $1,000,000. The following may qualify for this privilege: an
individual, or "company" as defined in Section 2(a)(8) of the 1940 Act; an
individual, spouse, and their children under age 21 purchasing for his,
her, or their own account; a trustee, administrator or other fiduciary
purchasing for a single trust estate or single fiduciary account or for a
single or a parent-subsidiary group of "employee benefit plans" (as defined
in Section 3(3) of ERISA); and tax-exempt organizations under Section
501(c)(3) of the Internal Revenue Code.
RIGHTS OF ACCUMULATION. Your "Rights of Accumulation" permit reduced
sales charges on any future purchases after you have reached a new
breakpoint in the Fund's sales charge schedule (see the Prospectus for the
Fund's sales charge schedule). You can add the value of existing Fidelity
Advisor Fund shares (including Daily Money Fund and Daily Tax-Exempt Money
Fund shares acquired by exchange from any Fidelity Advisor Fund), held by
you, your spouse, and your children under age 21 determined at the previous
day's NAV at the close of business, to the amount of your new purchase
valued at the current offering price to determine your reduced sales
charge.
LETTER OF INTENT. If you anticipate purchasing $50,000 or more of shares
of the Fund in combination with shares of certain other Fidelity Advisor
Funds (excluding Daily Money Fund and Daily Tax-Exempt Money Fund) within a
13-month period, you may obtain shares of the portfolios at the same
reduced sales charge as though the total quantity were invested in one lump
sum, by filing a nonbinding Letter of Intent (the Letter) within 90 days of
the start of the purchases. Each investment you make after signing the
Letter will be entitled to the sales charge applicable to the total
investment indicated in the Letter. For example, a $2,500 purchase toward
a $50,000 Letter would receive the same reduced sales charge as if the
$50,000 had been invested at one time. To ensure that the reduced price
will be received on future purchases, you or your investment professional
must inform the Transfer Agent that the Letter is in effect each time
shares are purchased. Neither income dividends nor capital gain
distributions taken in additional shares will apply toward the completion
of the Letter.
Your initial investment must be at least 5% of the total amount you plan
to invest. Out of the initial purchase, 5% of the dollar amount specified
in the Letter will be registered in your name and held in escrow. The
shares held in escrow cannot be redeemed or exchanged until the Letter is
satisfied or the additional sales charges have been paid. You will earn
income dividends and capital gain distributions on escrowed shares. The
escrow will be released when your purchase of the total amount has been
completed. You are not obligated to complete the Letter.
If you purchase more than the amount specified in the Letter and qualify
for a further sales charge reduction, the sales charge will be adjusted to
reflect your total purchase at the end of 13 months. Surplus funds will be
applied to the purchase of additional shares at the then current offering
price applicable to the total purchase.
If you do not complete your purchase under the Letter within the 13-month
period, your sales charge will be adjusted upward, corresponding to the
amount actually purchased, and if after written notice, you do not pay the
increased sales charge, sufficient escrowed shares will be redeemed to pay
such charge.
SYSTEMATIC INVESTMENT PLAN. You can make regular investments in certain
other Fidelity Advisor Funds with the Systematic Investment Plan by
completing the appropriate section of the account application and attaching
a voided personal check with your bank's magnetic ink coding number across
the front. If your bank account is jointly owned, be sure that all owners
sign. Investments may be made monthly by automatically deducting $100 or
more from your bank checking account. You may change the amount of your
monthly purchase at any time.
Your account will be drafted on or about the first business day of every
month. Shares will be purchased at the offering price next determined
following receipt of the order by the Transfer Agent. You may cancel the
Systematic Investment option at any time without payment of a cancellation
fee. You will receive a confirmation from the Transfer Agent for every
transaction, and a debit entry will appear on your bank statement.
EXCHANGE INFORMATION
SYSTEMATIC EXCHANGE PLAN. With the Systematic Exchange Plan, you can
exchange a specific dollar amount from one Fidelity Advisor fund into
another on a monthly, quarterly or semiannual basis.
The account from which the exchanges are to be processed must have a
minimum value of $10,000 before you may elect to begin exchanging
systematically. The account into which the exchanges are to be processed
must be an existing account with a minimum of $1,000.
Both accounts must have identical registrations and taxpayer
identification numbers. The minimum amount to be exchanged systematically
into the Fund is $100.
Systematic Exchanges will be processed at the NAV determined on the
transaction date, except that Systematic Exchanges into a Fidelity Advisor
Fund from any money market fund will be processed at the offering price
next determined on the transaction date (unless the shares were acquired by
exchange from another Fidelity Advisor Fund).
REDEMPTION INFORMATION
REINSTATEMENT PRIVILEGE. If you have redeemed all or part of your shares
you may reinvest an amount equal to all or a portion of the redemption
proceeds in the Fund or in any of the other Fidelity Advisor Funds, at the
NAV next determined after receipt of your investment order, without a sales
charge, provided that such reinvestment is made within 30 days of
redemption. No charge currently is made for reinvestment in shares of the
Fund. 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 the Fund. For information on which funds are available for
the Reinstatement Privilege, please consult the Application.
SYSTEMATIC WITHDRAWAL PLAN. If you own shares worth $10,000 or more, you
can have monthly, quarterly or semiannual checks sent from your account to
you, to a person named by you, or to your bank checking account. You may
obtain information about the Systematic Withdrawal Plan by contacting your
investment professional. Your Systematic Withdrawal Plan payments are drawn
from share redemptions. If Systematic Withdrawal Plan redemptions exceed
income dividends earned on your shares, your account eventually may be
exhausted. Since a sales charge is applied on new shares you buy, it is to
your disadvantage to buy shares while also making systematic redemptions.
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, the Transfer Agent may reinvest your distributions
at the then-current NAV. All subsequent distributions will then be
reinvested until you provide the Transfer Agent with alternate
instructions.
DIVIDENDS. To the extent that the Fund's income is derived from federally
tax-exempt interest, the daily dividends declared by the Fund also are
federally tax-exempt. The Fund will send each shareholder a notice in
January describing the tax status of dividends and capital gain
distributions for the prior year.
Shareholders are required to report tax-exempt income on their federal tax
returns. Shareholders who earn other income, such as Social Security
benefits, may be subject to federal income tax on such benefits to the
extent that their income, including tax-exempt income, exceeds certain base
amounts.
The Fund purchases municipal obligations on the basis of opinions of bond
counsel regarding the federal income tax status of the obligations. These
opinions generally will be based upon covenants by the issuers regarding
continuing compliance with federal tax requirements. If the issuer of an
obligation fails to comply with its covenants at any time, interest on the
obligations could become federally taxable retroactive to the date the
obligation was issued.
As a result of The Tax Reform Act of 1986 interest on certain "private
activity" bonds (referred to in the Internal Revenue Code as "qualified
bonds"), is subject to the federal alternative minimum tax (AMT), although
the interest continues to be excludable from gross income for other
purposes. Interest from private activity municipal obligations is a tax
preference item for the purpose of determining whether a taxpayer is
subject to the AMT and the amount of AMT tax to be paid, if any. Private
activity obligations issued after August 7, 1986 to benefit a private or
industrial user or to finance a private facility are affected by this rule.
CAPITAL GAIN DISTRIBUTIONS. Long-term capital gains realized 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 that
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
less than six months 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
long-term for tax purposes.
A portion of the gain on Bonds purchased at a discount after April 30, 1993
and short-term capital gains distributed by the Fund are federally taxable
to shareholders as dividends, not as capital gains. Distributions from the
short-term capital gains do not qualify for the dividends received
deduction.
TAX STATUS OF THE FUND. The Fun d intends t o qualify 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, the Fund intends to
distribute substantially all of its net investment income and realized
capital gains within each calendar year as well as on a fiscal year basis.
The Fund also intends to comply with other tax rules applicable to
regulated investment companies, including a requirement that capital gains
from sale of securities held for less than three months must 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 portfolios of Fidelity Advisor
Series VI for tax purposes.
OTHER TAX INFORMATION. The information above is only a summary of some of
the federal tax considerations 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 of the
Fund may be subject to state and local taxes on distributions received from
the Fund. Investors should consult their tax advisers to determine whether
the Fund is suitable for their particular tax situation.
FMR
FMR is a wholly owned subsidiary of FMR Corp., a parent company organized
in 1972. At present, the principal operating activities of FMR Corp. are
those conducted by three of its divisions as follows: Fidelity Service
Company, which is the transfer and shareholder servicing agent for certain
of the funds advised by FMR, Fidelity Investments Institutional Operations
Company, which performs shareholder servicing functions for certain
institutional customers, and Fidelity Investments Retail Marketing Company,
which provides marketing services to various companies within the Fidelity
organization.
Several affiliates of FMR also are engaged in the investment advisory
business. Fidelity Management Trust Company provides trustee, investment
advisory and administrative services to retirement plans and corporate
employee benefit accounts. Fidelity Management & Research (U.K.) Inc.
(FMR U.K.) and Fidelity Management & Research (Far East) Inc. (FMR Far
East), both wholly-owned subsidiaries of FMR formed in 1986 supply
investment research, and may supply portfolio management services, to FMR
in connection with certain funds advised by FMR. Analysts employed by FMR,
FMR U.K., and FMR Far East research and visit thousands of domestic and
foreign companies each year. FMR Texas Inc., a wholly-owned subsidiary of
FMR formed in 1989, supplies portfolio management and research services in
connection with certain money market funds advised by FMR.
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
and officers also serve in similar capacities for other funds advised by
FMR. Unless otherwise noted, the business address of each Trustee and
officer is 82 Devonshire Street, Boston, MA 02109, which is also the
address of FMR. Those Trustees who are "interested persons" (as defined in
the Investment Company Act of 1940) by virtue of their affiliation with
either the Fund or FMR, are indicated by an asterisk (*).
*EDWARD C. JOHNSON 3d, Trustee and President, is Chairman, Chief Executive
Officer and a Director of FMR Corp.; a Director and Chairman of the Board
and of the Executive Committee of FMR; Chairman and a Director of FMR Texas
Inc. (1989), Fidelity Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.
*J. GARY BURKHEAD, Trustee and Senior Vice President, is President of FMR;
and President and a Director of FMR Texas Inc. (1989), Fidelity Management
& Research (U.K.) Inc. and Fidelity Management & Research (Far
East) Inc.
RALPH F. COX, 200 Rivercrest Drive, Fort Worth, TX, Trustee (1991), is
President of Greenhill Petroleum Corporation (petroleum exploration and
production, 1990). Prior to his retirement in March 1990, Mr. Cox was
President and Chief Operating Officer of Union Pacific Resources Company
(exploration and production). He is a Director of Bonneville Pacific
Corporation (independent power, 1989) and CH2M Hill Companies
(engineering). In addition, he served on the Board of Directors of the
Norton Company (manufacturer of industrial devices, 1983-1990) and
continues to serve on the Board of Directors of the Texas State Chamber of
Commerce, and is a member of advisory boards of Texas A&M University
and the University of Texas at Austin.
PHYLLIS BURKE DAVIS, 340 E. 64th Street #22C, New York, NY, Trustee (1992).
Prior to her retirement in September 1991, Mrs. Davis was the Senior Vice
President of Corporate Affairs of Avon Products, Inc. She is currently a
Director of BellSouth Corporation (telecommunications), Eaton Corporation
(manufacturing, 1991), and the TJX Companies, Inc. (retail stores, 1990),
and previously served as a Director of Hallmark Cards, Inc. (1985-1991) and
Nabisco Brands, Inc. In addition, she serves as a Director of the New York
City Chapter of the National Multiple Sclerosis Society, and is a member of
the Advisory Council of the International Executive Service Corps. and the
President's Advisory Council of The University of Vermont School of
Business Administration (1988).
RICHARD J. FLYNN, 77 Fiske Hill, Sturbridge, MA, Trustee, is a financial
consultant. Prior to September 1986, Mr. Flynn was Vice Chairman and a
Director of the Norton Company (manufacturer of industrial devices). He is
currently a Director of Mechanics Bank and a Trustee of College of the Holy
Cross and Old Sturbridge Village, Inc.
E. BRADLEY JONES, 61 Dove Plum Road, Vero Beach, FL, Trustee (1990). Prior
to his retirement in 1984, Mr. Jones was Chairman and Chief Executive
Officer of LTV Steel Company. Prior to May 1990, he was Director of
National City Corporation (a bank holding company) and National City Bank
of Cleveland. He is a Director of TRW Inc. (original equipment and
replacement products), Cleveland-Cliffs Inc. (mining), NACCO Industries,
Inc. (mining and marketing), Consolidated Rail Corporation, Birmingham
Steel Corporation (1988), Hyster-Yale Materials Handling, Inc. (1989), and
RPM, Inc. (manufacturer of chemical products, 1990). In addition, he
serves as a Trustee of First Union Real Estate Investments; Chairman of the
Board of Trustees and a member of the Executive Committee of the Cleveland
Clinic Foundation, a Trustee and a member of the Executive Committee of
University School (Cleveland), and a Trustee of Cleveland Clinic Florida.
DONALD J. KIRK, 680 Steamboat Road, Apartment #1-North, Greenwich, CT,
Trustee, is a Professor at Columbia University Graduate School of Business
and a financial consultant. Prior to 1987, he was Chairman of the
Financial Accounting Standards Board. Mr. Kirk is a Director of General Re
Corporation (reinsurance), the National Arts Stabilization Fund, Greenwich
Hospital Association (1989), and Valuation Research Corp. (appraisals and
valuations, 1993).
*PETER S. LYNCH, Trustee (1990) is Vice Chairman of FMR (1992). Prior to
his retirement on May 31, 1990, he was a Director of FMR (1989) 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, 1989) and Morrison Knudsen Corporation
(engineering and construction, 1988). 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
(1990).
GERALD C. McDONOUGH, 135 Aspenwood Drive, Cleveland, OH, Trustee (1989), is
Chairman of G.M. Management Group (strategic advisory services). Prior to
his retirement in July 1988, he was Chairman and Chief Executive Officer of
Leaseway Transportation Corp. (physical distribution services). Mr.
McDonough is a Director of ACME-Cleveland Corp. (metal working,
telecommunications and electronic products), Brush-Wellman Inc. (metal
refining), York International Corp. (air conditioning and refrigeration,
1989), and Commercial Intertech Corp. (water treatment equipment, 1992).
In addition, he serves as a Director for United Way Services of Greater
Cleveland, a member of the Executive Committee of the Weatherhead School of
Management, and as a Trustee of The Center for Economic Education.
EDWARD H. MALONE, 5601 Turtle Bay Drive #2104, Naples, FL, Trustee (1988).
Prior to his retirement in 1985, Mr. Malone was Chairman, General Electric
Investment Corporation and a Vice President of General Electric Company.
He is a Director of Allegheny Power Systems, Inc. (electric utility),
General Re Corporation (reinsurance) and Mattel Inc. (toy manufacturer).
He is also a Trustee of Rensselaer Polytechnic Institute and of Corporate
Property Investors and a member of the Advisory Boards of Butler Capital
Corporation Funds and Warburg, Pincus Partnership Funds.
MARVIN L. MANN, 55 Railroad Avenue, Greenwich, CT, Trustee (1993) is
Chairman of the Board, President, and Chief Executive Officer of Lexmark
International, Inc. (office machines, 1991). Prior to 1991, he held the
positions of Vice President of International Business Machines Corporation
("IBM") and President and General Manager of various IBM divisions and
subsidiaries. Mr. Mann is a Director of M.A. Hanna Company (chemicals,
1993) and Infomart (marketing services, 1991), a Trammell Crow Co. In
addition, he serves as the Campaign Vice Chairman of the Tri-State United
Way (1993) and is a member of the University of Alabama President's Cabinet
(1990).
THOMAS R. WILLIAMS, 21st Floor, 191 Peachtree Street, N.E., Atlanta, GA,
Trustee (1988), 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, 1988), Georgia Power Company (electric utility), Gerber
Alley & Associates, Inc. (computer software), National Life Insurance
Company of Vermont, American Software, Inc. (1989), and AppleSouth, Inc.
(restaurants, 1992).
GARY L. FRENCH, Treasurer (1991). Prior to becoming Treasurer of the
Fidelity funds, Mr. French was Senior Vice President, Fund Accounting -
Fidelity Accounting & Custody Services Co. (1991); Vice President, Fund
Accounting - Fidelity Accounting & Custody Services Co. (1990); and
Senior Vice President, Chief Financial and Operations Officer - Huntington
Advisers, Inc. (1985-1990).
ARTHUR S. LORING, Secretary, is Senior Vice President and General Counsel
of FMR, Vice President-Legal of FMR Corp., and Vice President and Clerk of
Distributors.
Under a retirement program which became effective on November 1, 1989, a
Trustee, upon reaching age 72, become eligible to participate in a defined
benefit retirement program under which they receive payments during their
lifetime from the Fund based on their basic trustees fees and length of
service. Currently, Messrs. Robert L. Johnson, William R. Spaulding,
Bertram H. Witham, and David L. Yunich participate in the program.
As of _______, 1993 the Trustees and officers owned in the aggregate less
than 1% of the Fund's outstanding shares.
MANAGEMENT CONTRACTS
The Fund employs FMR to furnish investment and other services. Under its
Management Contract with the Fund, FMR acts as investment advisor 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, and
compensates all officers of the Fidelity Advisor Series VI (the Trust), all
Trustees who are "interested persons" of the Trust or of FMR, and all
personnel of the Trust or FMR performing services relating to research,
statistical, and investment activities.
In addition, FMR or its affiliates, subject to the supervision of the Board
of Trustees, provide 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
law; developing management and shareholder services for the Fund; and
furnishing reports, evaluations and analyses on a variety of subjects to
the Board of Trustees.
In addition to the management fee payable to FMR and the fees payable to
United Missouri, the Fund pays all its expenses, without limitation, that
are not assumed by those parties. The Fund pays for typesetting, printing
and mailing of prospectuses, statements of additional information, notices,
reports, and proxy material to existing shareholders, legal expenses, and
the fees of the custodian, auditor and non-interested Trustees. Other
expenses paid by the Fund include interest, taxes, brokerage commissions,
the Fund's proportionate share of insurance premiums and Investment Company
Institute dues, and the costs of registering shares under federal and state
securities laws. The Fund is also liable for such nonrecurring expenses as
may arise, including costs of litigation to which the Fund may be a party,
and any obligation it may have to indemnify its officers and Trustees with
respect to such litigation.
For the services of FMR under the contract, the Fund pays FMR a monthly
management fee composed of the sum of two elements: a group fee rate and
an individual fund fee rate. The group fee rate is based on the monthly
average net assets of all of the registered investment companies with which
FMR has management contracts and is calculated on a cumulative basis
pursuant to the graduated fee rate schedule shown on the left below. On
the right, the effective fee rate schedules are the result of cumulatively
applying the annualized rates at varying asset levels. Also shown below is
the effective annual fee rate at various levels of group net assets. For
example, the effective annual fee rate at $___ billion of group net assets
- -- their approximate level for the month of _____________ -- was ___%,
which is the weighted average of the respective fee rates for each level of
group net assets up to $190 billion.
GROUP FEE EFFECTIVE ANNUAL
RATE SCHEDULE* FEE RATES
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Average Annualized Group Effective Annual
Group Assets Rate Net Assets Fee Rates
$ 0 - 3 billion .370% $ 0.5 billion .3700%
3 - 6 .340 10 .3340
6 - 9 .310 20 .2855
9 - 12 .280 30 .2520
12 - 15 .250 40 .2323
15 - 18 .220 50 .2188
18 - 21 .200 60 .2090
21 - 24 .190 70 .2017
24 - 30 .180 80 .1959
30 - 36 .175 90 .1910
36 - 42 .170 100 .1869
42 - 48 .165 110 .1835
48 - 66 .160 120 .1808
66 - 84 .155 130 .1780
84 - 120 .150 140 .1756
120 - 174 .145 150 .1736
174 - 228 .140 160 .1718
228 - 282 .1375 170 .1702
282 - 336 .1350 180 .1687
Over 336 .1325 190 .1672
200 .1658
</TABLE>
* The rates shown for average group assets in excess of $120 billion were
adopted by FMR on a voluntary basis on January 1, 1992. Rates in excess of
$174 billion were adopted by FMR on a voluntary basis on November 1, 1993.
Each was adopted pending shareholder approval of a new management contract
reflecting the extended schedule. The extended schedule provides for lower
management fees as total assets under management increase.
The individual fund fee rate is .25%. Based on the average net assets of
the funds advised by FMR for the period from ____________, the annual
management fee rate would be calculated as follows:
Group Fee Rate Individual Fund Total Management
___% + Fee Rate Fee Rate
.25% = .___%
One twelfth of this annual management fee rate is then applied to the
Fund's average net assets for the current month, giving a dollar amount
which is the fee for that month.
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, as well as a portion of its distribution plan expenses.
United Missouri is transfer, dividend-disbursing and shareholder servicing
agent for the Fund. United Missouri has a sub-arrangement with State
Street for transfer agent services. State Street has delegated certain
transfer, dividend paying and shareholder services to FIIOC, 82 Devonshire
Street, Boston, Massachusetts 02109, an affiliate of FMR. Under a revised
fee arrangement effective January 1, 1993, the Fund pays an annual per
account fee and a monetary transaction fee of $30 and $6, respectively.
For accounts that FIIOC maintains on behalf of State Street, FIIOC receives
all such fees. For accounts as to which FIIOC provides limited services,
FIIOC may receive a portion (currently up to $20 and $6, respectively) of
related per account fees and monetary transaction fees, less applicable
charges and expenses of State Street for account maintenance and
transactions.
United Missouri has a sub-contract with Service, pursuant to which Service
performs the calculations necessary to determine the Fund's net asset value
per share and dividends and maintains the Fund's accounting records. The
annual fee rates for these pricing and bookkeeping services are based on
the Fund's average net assets, specifically, .04% for the first $500
million of average net assets and .02% for average net assets in excess of
$500 million. The fee is limited to a minimum of $45,000 and a maximum of
$750,000 per year.
The pricing and bookkeeping fees and transfer agency fees described above
are paid by United Missouri, which is entitled to reimbursement from the
Fund for these expenses.
DISTRIBUTION AND SERVICE PLAN
The Fund has a distribution agreement with Distributors, a Massachusetts
corporation organized on July 18, 1960. Distributors 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 Distributors to use all reasonable efforts, consistent
with its other business, to secure purchasers for shares of the Fund, which
are continuously offered at net asset value. Promotional and
administrative expenses in connection with the offer and sale of shares are
paid by FMR.
The Trustees of the Fund on behalf of the Fund have adopted a Distribution
and Service Plan (the Plan) pursuant to Rule 12b-1 under the Investment
Company Act of 1940 (the Rule). The Plan has been approved by the Trustees
and by the Fund's shareholders at a special meeting held ______________.
As required by the Rule, the Trustees carefully considered all pertinent
factors relating to the implementation of the Plan prior to its approval,
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 payments under the Plan may provide additional incentives to
promote the sale of shares of the Fund, which may result in additional
sales of the Fund's shares and an increase in the Fund's assets. The Fund
pays to Distributors a distribution fee at an annual rate of up to .40% (or
such lesser amount as the Trustees may, from time to time, determine) of
its average net assets determined as of the close of business on each day
throughout the month, but excluding assets attributable to shares purchased
more than 144 months prior to such day. Currently, the Trustees have
approved an annual rate of .15% of the Fund's average net assets. This fee
may be increased only when, in the opinion of the Trustees, it is in the
best interest of the Fund's shareholders to do so. This distribution fee
will be paid by the Fund, not by individual accounts.
The Plan specifically recognizes that FMR, either directly or through
Distributors, may use its management fee revenue, past profits or other
resources, without limitation, to pay promotional and administrative
expenses in connection with the offer and sale of shares of the Fund.
Under the Plan, if the payment by the Fund or FMR of management fees should
be deemed to be indirect financing of the distribution of the Fund's
shares, such payment is authorized by the Plan. In addition, the Plan
provides that FMR may use its resources, including its management fee
revenues, to make payments to third parties that assist in selling shares
of the Fund or in other distribution activities.
The Plan does not provide for specific payment by the Fund of any of the
expenses of Distributors, nor obligate Distributors or FMR to perform any
specific type or level of distribution activities or incur any specific
level of expense in connection with distribution activities. After
payments by Distributors for advertising, marketing and distribution and
payments to Investment Professionals, the amounts remaining, if any, may be
used as Distributors may elect.
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 fully defined, in Distributors opinion it
should not prohibit banks from being paid for shareholder support services,
servicing and recordkeeping functions. Distributors 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. The Fund may execute
portfolio transactions with and purchase securities issued by depository
institutions that receive payments under the Plan. No preference will be
shown in the selection of investments for the instruments of such
depository institutions. In addition, state securities laws on this issue
may differ from the interpretations of federal law expressed herein, and
banks and financial institutions may be required to register as dealers
pursuant to state law.
DESCRIPTION OF THE TRUST
TRUST ORGANIZATION. Fidelity Advisor Short-Intermediate Tax-Exempt Fund is
a portfolio of Fidelity Advisor Series VI. In the event that FMR ceases to
be the investment adviser to the Fund 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 portfolios
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 and 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.
As of February 14, 1994, FMR owned 100% of the Fund's outstanding shares.
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 a Trustee against any
liability to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the
duties involved in the conduct of his office.
VOTING RIGHTS. Each fund's capital consists of shares of beneficial
interest. 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 outstanding shares of
the Trust or the fund. If not so terminated, the Trust and its funds will
continue indefinitely.
CUSTODIAN. United Missouri Bank, N.A., 1010 Grand Avenue, Kansas City, MO,
is custodian of the assets of the Fund. The custodian is responsible for
the safekeeping of the Trust's assets and the appointment of subcustodian
banks and clearing agencies. The custodian takes no part in determining
the investment policies of the Fund or in deciding which securities are
purchased or sold by the Fund. The Fund may, however, invest in
obligations of the custodian and may purchase securities from or sell
securities to the custodian.
FMR, its officers and directors, its affiliated companies, and the Trust's
Trustees may from time to time have transactions with various banks,
including banks serving as custodians for certain of the 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. _________________________, serves as the Fund's independent
accountant. The auditor examines financial statements for the Fund and
provides other audit, tax and related services.
APPENDIX
DOLLAR-WEIGHTED AVERAGE MATURITY for the Fund is derived by multiplying the
value of each investment by the number of days remaining to its maturity,
adding these calculations, and then dividing the total by the value of the
Fund's portfolio. An obligation's maturity is typically determined on a
stated final maturity basis, although there are some exceptions to this
rule.
For example, if it is probable that the issuer of an instrument will take
advantage of a maturity-shortening device, such as a call, refunding, or
redemption provision, the date on which the instrument will probably be
called, refunded, or redeemed may be considered to be its maturity date.
When a municipal bond issuer has committed to call an issue of bonds and
has established an independent escrow account that is sufficient to, and is
pledged to, refund that issue, the number of days to maturity for the
prerefunded bond is considered to be the number of days to the announced
call date of the bonds.
DESCRIPTION OF MOODY'S INVESTORS SERVICE INC.'S RATINGS OF STATE AND
MUNICIPAL NOTES:
Moody's ratings for state and municipal and other short-term obligations
will be designated Moody's Investment Grade (MIG, or VMIG for variable rate
obligations). This distinction is in recognition of the difference between
short-term credit risk and long-term risk. Factors affecting the liquidity
of the borrower and short-term cyclical elements are critical in short-term
ratings, while other factors of major importance in bond risk, long-term
secular trends, for example, may be less important in the short run.
Symbols used will be as follows:
MIG-1/VMIG-1 - This designation denotes best quality. There is present
strong protection by established cash flows, superior liquidity support or
demonstrated broad-based access to the market for refinancing.
MIG-2/VMIG-2 - This designation denotes high quality. Margins of
protection are ample although not so large as in the preceding group.
DESCRIPTION OF STANDARD & POOR'S CORPORATION'S RATINGS OF STATE AND
MUNICIPAL NOTES:
SP-1 - Very strong or strong capacity to pay principal and interest. Those
issues determined to possess overwhelming safety characteristics will be
given a plus (+) designation.
SP-2 - Satisfactory capacity to pay principal and interest.
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S MUNICIPAL BOND RATINGS:
AAA - Bonds rated Aaa are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as "gilt
edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective
elements are likely to change, such changes as can be visualized are most
unlikely to impair the fundamentally strong position of such issues.
AA - Bonds rated Aa are judged to be of high quality by all standards.
Together with Aaa group they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other
elements present which make the long-term risks appear somewhat larger than
in Aaa securities.
A - Bonds rated A possess many favorable investment attributes and are to
be considered as upper-medium-grade obligations. Factors giving security
to principal and interest are considered adequate but elements may be
present which suggest a susceptibility to impairment sometime in the
future.
BAA - Bonds rated Baa are considered as medium-grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain
protective elements may be lacking or may be characteristically unreliable
over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
BA - Bonds rated Ba are judged to have speculative elements. Their future
cannot be considered as well assured. Often the protection of interest and
principal payments may be very moderate and thereby not well safeguarded
during both good and bad times in the future. Uncertainty of position
characterizes bonds in this class.
Those bonds in the Aa, A, Baa and Ba groups which Moody's believes possess
the strongest investment attributes are designated by the symbols Aa1, A1,
Baa1 and Ba1.
DESCRIPTION OF STANDARD & POOR'S CORPORATION'S MUNICIPAL BOND RATINGS:
AAA - Debt rated AAA has the highest rating assigned by Standard &
Poor's to a debt obligation. Capacity to pay interest and repay principal
is extremely strong.
AA - Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the highest-rated debt issues only in small
degree.
A - Debt rated A has a strong capacity to pay interest and repay principal,
although it is somewhat more susceptible to the adverse effects of changes
in circumstances and economic conditions.
BBB - Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in higher-rated
categories.
BB - Debt rated BB has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions which could
lead to inadequate capacity to meet timely interest and principal payments.
The ratings from AA to BB may be modified by the addition of a plus or
minus to show relative standing within the major rating categories.
PART C. OTHER INFORMATION
Item 24. Financial Information
(a) Not Applicable.
(b) Exhibits:
(1) (a) Declaration of Trust dated as of June 1, 1983 is incorporated
herein by reference to Exhibit 1 to Pre-Effective Amendment No. 1.
(b) Amended and Restated Declaration of Trust dated January 24, 1985, is
incorporated herein by reference to Exhibit 1(b) to Post-Effective
Amendment No. 4.
(c) Supplement to Declaration of Trust dated November 9, 1987, is
incorporated herein by reference to Exhibit 1(c) to Post-Effective
Amendment No. 9.
(d) Supplement to the Declaration of Trust dated December 1, 1988, is
incorporated herein by reference to Exhibit 1(d) to Post-Effective
Amendment No. 15.
(e) Supplement to the Declaration of Trust dated December 20, 1991 is
incorporated herein by reference to Exhibit 1(e) to Post-Effective
Amendment No. 19.
(f) Amendment to the Fund's Declaration of Trust dated May 3, 1993 is
incorporated herein by reference to Exhibit 1(f) to Post-Effective
Amendment No.26.
(2) By-Laws of the Trust are incorporated herein by reference to Exhibit
2 to the initial Registration Statement.
(3) None.
(4) Not applicable.
(5) (a) Amended Management Contract between Tax-Exempt Portfolios:
Limited Term Series and Fidelity Management & Research Company is
incorporated herein by reference to Exhibit 5(d) to Post-Effective
Amendment No. 15.
(b) Form of Management Contract, dated January 29, 1993, between
Fidelity Advisor North American Government Portfolio and Fidelity
Management & Research Company is incorporated herein by reference to
Exhibit 5(b) to Post-Effective Amendment No. 23.
(c) Form of Management Contract between Fidelity Advisor
Short-Intermediate Tax-Exempt Fund and Fidelity Management & Research
Company is filed herein as Exhibit 5(c) .
(6) (a) General Distribution Agreement between Limited Term Series and
Fidelity Distributors Corporation, dated April 1, 1987 is incorporated
herein by reference to Exhibit 6 (c) to Post-Effective Amendment No. 9.
(b) Form of General Distribution Agreement, dated January 29, 1993,
between Fidelity Distributors Corporation and Fidelity Advisor North
American Government Portfolio - Retail Class is incorporated herein by
reference to Exhibit 6(b) to Post-Effective Amendment No. 23.
(c) Form of General Distribution Agreement, dated January 29, 1993,
between Fidelity Distributors Corporation and Fidelity Advisor North
American Government Portfolio - Institutional Class is incorporated herein
by reference to Exhibit 6(c) to Post-Effective Amendment No 23.
(d) Form of General Distribution Agreement Between Fidelity Advisor
Short-Intermediate Tax-Exempt Fund and Fidelity Distributors Corporation,
dated February 14, 1994 is incorporated herein as Exhibit 6(d).
(7) Retirement Plan for Non-Interested Person Trustees, Directors or
General Partners, effective November 1, 1989, is incorporated herein by
reference to Exhibit 7 to Post-Effective Amendment No. 19.
(8) (a) Custodian Agreement between State Street Bank and Trust Company
and Tax-Exempt Portfolios, dated January 11, 1984, is incorporated herein
by reference to Exhibit 8 to Post-Effective Amendment No. 1.
(b) Amendment, dated July 7, 1986, to the Custodian Contract is
incorporated herein by reference to Exhibit 8(b) to Post-Effective
Amendment No. 9.
(c) Form of Custodian Contract on behalf of Fidelity Advisor North
American Government Portfolio, dated January 29, 1993, to be filed by
amendment.
(d) Form of Custodian Agreement between Fidelity Advisor Short-Intermediate
Tax-Exempt Fund and United Missouri Bank, N.A., is filed herein as Exhibit
8(d).
(9) (a) Amended Service Agreement dated June 1, 1989 between the
Registrant and State Street Bank and Trust Company is incorporated herein
by reference to Exhibit 9(b) to Post-Effective Amendment No. 15.
(b) Schedules B and C, dated July 1, 1991 and June 1, 1989,
respectively, to the Amended Service Agreement between the Registrant and
State Street Bank and Trust Company, on behalf of Limited Term, is
incorporated herein by reference to Exhibit 9(i) and 9(c), respectively, to
Post-Effective Amendment No. 15.
(c) Appointment of Sub-Servicing Agent dated June 1, 1989 on behalf of
the Limited Term Series, among Fidelity Management & Research Company,
Fidelity Service Co. and State Street Bank and Trust Company is
incorporated herein by reference to Exhibit 9(e) to Post-Effective
Amendment No. 15.
(d) Service Agreement, and related schedules B and C, dated
January 29, 1993 between Fidelity Service Co. and Fidelity Advisor North
American Government Portfolio is incorporated herein by reference to
Exhibit 9 (d) to Post-Effective Amendment No. 23.
(e) Amended Transfer Agent Agreement between the Registrant and State
Street Bank and Trust Company dated June 1, 1989 is incorporated herein by
reference to Exhibit 9(f) to Post-Effective Amendment No. 15.
(f) Schedule A dated June 1, 1989 to the Amended Transfer Agent
Agreement between the Registrant, on behalf of the Limited Term Series, and
State Street Bank and Trust Company is incorporated herein by reference to
Exhibit 9(g) to Post-Effective Amendment No. 15.
(g) Appointment of Sub-Transfer Agent dated June 1, 1989 on behalf of
the Limited Term Series, among Fidelity Management & Research Company,
Fidelity Investments Institutional Operations Company and State Street Bank
and Trust Company is incorporated herein by reference to Exhibit 9(h) to
Post-Effective Amendment No. 15.
(h) Form of Transfer Agent Agreement and related Schedule A, dated
January 29, 1993, between Fidelity Investments Institutional Operations
Company and Fidelity Advisor North American Government Portfolio -
Institutional Class is incorporated herein by reference to Exhibit 9(h) to
Post-Effective Amendment No. 23.
(i) Form of Transfer Agent Agreement and related schedule A, dated
January 29, 1993, between State Street Bank & Trust Company and
Fidelity Advisor North American Government Portfolio-Retail Class to be
filed by amendment.
(j) Forms of Schedules A, B, and C to the amended Transfer Agent
Agreement dated June 1, 1989, are filed herein as Exhibit 9(j).
(10) None.
(11) Consent of the Fund's independent accountant, Coopers & Lybrand,
is filed herein as Exhibit 11.
(12) None.
(13) None.
(14) Not applicable.
(15) (a) 12b-1 Distribution and Service Plan for the Limited Term Series
is incorporated herein by reference to Exhibit 15(a) to Post-Effective
Amendment No. 6.
(b) Form of 12b-1 Distribution and Service Plan dated January 29, 1993
between Fidelity Distributors Corporation and Fidelity Advisor North
American Government Portfolio - Institutional Class is incorporated herein
by reference to Exhibit 15(b) to Post-Effective Amendment No. 23.
(c) Form of 12b-1 Distribution and Service Plan dated January 29, 1993
between Fidelity Distributors Corporation and Fidelity Advisor North
American Government Portfolio - Retail Class is incorporated herein by
reference to Exhibit 15(c) to Post-Effective Amendment No. 23.
(d) Form of 12b-1 Distribution and Service Plan dated February 14, 1994
between Fidelity Distributors Corporation and Fidelity Advisor
Short-Intermediate Tax-Exempt Fund is filed herein as exhibit 15(d).
(16) A schedule for computation of performance quotations is incorporated
herein by reference to Exhibit 16(a) to Post-Effective Amendment No. 16.
Item 25. Persons Controlled by or under Common Control with Registrant
The Board of Trustees of the Registrant is the same as the Boards of other
Fidelity funds offered primarily to institutional investors, each of which
has Fidelity Management & Research Company as its investment adviser.
Nonetheless, Registrant takes the position that it 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, 1993
Title of Class: Shares of Beneficial Interest
Name of Series Number of Record Holders
Fidelity Advisor North American Government Portfolio: 0
Fidelity Advisor Limited Term Tax-Exempt Fund 1080
Fidelity Advisor Institutional Limited Term Tax-Exempt Fund 67
Fidelity Advisor Short-Intermediate Tax-Exempt Fund 0
Item 27. Indemnification
Article XI, Section 2 of the Declaration of Trust sets forth the
reasonable and fair means for determining whether indemnification shall be
provided to any past or present Trustee or officer. It states that the
Registrant shall indemnify any present or past Trustee or officer to the
fullest extent permitted by law against liability and all expenses
reasonably incurred by him in connection with any claim, action, suit or
proceeding in which he is involved by virtue of his service as a trustee,
an officer, or both. Additionally, amounts paid or incurred in settlement
of such matters are covered by this indemnification. Indemnification will
not be provided in certain circumstances, however. These include instances
of willful misfeasance, bad faith, gross negligence, and reckless disregard
of the duties involved in the conduct of the particular office involved.
Item 28. Business and Other Connections of Investment Adviser
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 a Director of FMR, FMR Corp., FMR Texas Inc. (1989),
Fidelity Management & Research (U.K.) Inc. and Fidelity
Management & Research (Far East) Inc.; President and
Trustee of funds advised by FMR;
J. Gary Burkhead President of FMR; Managing Director of FMR Corp.; President
and a Director of FMR Texas Inc. (1989), Fidelity Management
& Research (U.K.) Inc. and Fidelity Management &
Research (Far East) Inc.; Senior Vice President and Trustee of
funds advised by FMR.
Peter S. Lynch Vice Chairman of FMR (1992).
David Breazzano Vice President of FMR (1993) and of a fund advised by FMR.
Stephan Campbell Vice President of FMR (1993).
Rufus C. Cushman, Jr. Vice President of FMR and of funds advised by FMR; Corporate
Preferred Group Leader.
Will Danoff Vice President of FMR (1993) and of a fund advised by FMR.
Scott DeSano Vice President of FMR (1993).
Penelope Dobkin Vice President of FMR (1990) and of a fund advised by FMR.
Larry Domash Vice President of FMR (1993).
George Domolky Vice President of FMR (1993) and of a fund advised by FMR.
Charles F. Dornbush Senior Vice President of FMR (1991); Chief Financial Officer of
the Fidelity funds; Treasurer of FMR Texas Inc. (1989), Fidelity
Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.
Robert K. Duby Vice President of FMR.
Margaret L. Eagle Vice President of FMR and of a fund advised by FMR.
Kathryn L. Eklund Vice President of FMR (1991).
Richard B. Fentin Senior Vice President of FMR (1993) and of a fund advised by
FMR.
Daniel R. Frank Vice President of FMR and of funds advised by FMR.
Gary L. French Vice President of FMR (1991) and Treasurer of the funds advised
by FMR (1991). Prior to assuming the position as Treasurer he
was Senior Vice President, Fund Accounting - Fidelity
Accounting & Custody Services Co. (1991) (Vice President,
1990-1991); and Senior Vice President, Chief Financial and
Operations Officer - Huntington Advisers, Inc. (1985-1990).
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.
William J. Hayes Senior Vice President of FMR (1989); Income/Growth Group
Leader (1990) and International Group Leader (1990).
Robert Haber Vice President of FMR (1991) and of funds advised by FMR.
Daniel Harmetz Vice President of FMR (1991) and of a fund advised by FMR.
Ellen S. Heller Vice President of FMR (1991).
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
John Hickling Vice President of FMR (1993) and of funds advised by FMR.
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Robert F. Hill Vice President of FMR (1989); and Director of Technical
Research.
Stephan Jonas Vice President of FMR (1993).
David B. Jones Vice President of FMR (1993).
Steven Kaye Vice President of FMR (1993) and of a fund advised by FMR.
Frank Knox Vice President of FMR (1993).
Robert A. Lawrence Senior Vice President of FMR (1993); and High Income Group
Leader.
Alan Leifer Vice President of FMR and of a fund advised by FMR.
Harris Leviton Vice President of FMR (1993) and of a fund advised by FMR.
Bradford E. Lewis Vice President of FMR (1991) and of funds advised by FMR.
Robert H. Morrison Vice President of FMR and Director of Equity Trading.
David Murphy Vice President of FMR (1991) and of funds advised by FMR.
Jacques Perold Vice President of FMR (1991).
Brian Posner Vice President of FMR (1993) and of a fund advised by FMR.
Anne Punzak Vice President of FMR (1990) and of funds advised by FMR.
Richard A. Spillane Vice President of FMR (1990) and of funds advised by FMR; and
Director of Equity Research (1989).
Robert E. Stansky Senior Vice President of FMR (1993) and of funds advised by
FMR.
Thomas Steffanci Senior Vice President of FMR (1993); and Fixed-Income Division
Head.
Gary L. Swayze Vice President of FMR and of funds advised by FMR; and
Tax-Free Fixed-Income Group Leader.
Donald Taylor Vice President of FMR (1993) and of funds advised by FMR.
Beth F. Terrana Senior Vice President of FMR (1993) and of funds advised by
FMR.
Joel Tillinghast Vice President of FMR (1993) and of a fund advised by FMR.
Robert Tucket Vice President of FMR (1993).
George A. Vanderheiden Senior Vice President of FMR; Vice President of funds advised by
FMR; and Growth Group Leader (1990).
Jeffrey Vinik Senior Vice President of FMR (1993) and of a fund advised by
FMR.
Guy E. Wickwire Vice President of FMR and of a fund advised by FMR.
Arthur S. Loring Senior Vice President (1993), Clerk and General Counsel of FMR;
Vice President, Legal of FMR Corp.; and Secretary of funds
advised by FMR.
</TABLE>
Item 29. Principal Underwriters
(a) Fidelity Distributors Corporation (Distributors) acts as distributor
for most funds advised by FMR and the following other fund:
CrestFunds, Inc.
The Victory Funds
ARK Funds
(b)
Name and Principal Positions and Offices Positions and Offices
Business Address* With Underwriter With Registrant
Edward C. Johnson 3d Director Trustee and President
Nita B. Kincaid Director None
W. Humphrey Bogart Director None
Kurt A. Lange President and Treasurer None
William L. Adair Senior Vice President None
Thomas W. Littauer Senior Vice President None
Arthur S. Loring Vice President and Clerk Secretary
* 82 Devonshire Street, Boston, MA
(c) Not applicable.
Item 30. Location of Accounts and Records
All accounts, books, and other documents required to be maintained by
Section 31a of the 1940 Act and the Rules promulgated thereunder are
maintained by Fidelity Management & Research Company or Fidelity
Service Co., 82 Devonshire St., Boston, MA, 02109, or the fund's custodian:
United Missouri Bank, N.A., 1010 Grand Avenue, Kansas City, MO.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
The Registrant undertakes to file a Post-Effective Amendment, using
financial statements for Fidelity Advisor Short-Intermediate Tax-Exempt
Fund, which need not be certified, within six months of the fund's
effectiveness. The Registrant undertakes for the fund: (1) to call a
meeting of shareholders for the purpose of voting upon the question of
removal of a trustee or trustees, when requested to do so by record holders
of not less than 10% of its outstanding shares; and (2) to assist in
communications with other shareholders pursuant to Section 16(c)(1) and
(2), whenever shareholders meeting the qualifications set forth in Section
16(c) seek the opportunity to communicate with other shareholders with a
view toward requesting a meeting.
The Registrant on behalf of Fidelity Advisor Series VI and Advisor Short
Intermediate Tax-Exempt Fund undertakes, provided the information required
by Item 5(a) is contained in the annual report, to furnish each person to
whom a prospectus has been delivered, upon their request and without
charge, a copy of the Registrant's latest annual report to shareholders.
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. 31 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 14th day
of February 1994.
Fidelity Advisor Series VI
Fidelity Advisor Short-Intermediate Tax-Exempt Fund
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 February 14, 1994
Edward C. Johnson 3d (Principal Executive Officer)
/s/Gary L. French
Gary L. French Treasurer February 14, 1994
</TABLE>
/s/J. Gary Burkhead
J. Gary Burkhead Trustee February 14, 1994
/s/Ralph F. Cox*
Ralph F. Cox Trustee February 14, 1994
/s/Phyllis Burke Davis*
Phyllis Burke Davis Trustee February 14, 1994
/s/Richard J. Flynn*
Richard J. Flynn Trustee February 14, 1994
/s/E. Bradley Jones*
E. Bradley Jones Trustee February 14, 1994
/s/Donald J. Kirk*
Donald J. Kirk Trustee February 14, 1994
/s/Peter S. Lynch*
Peter S. Lynch Trustee February 14, 1994
/s/Edward H. Malone*
Edward H. Malone Trustee February 14, 1994
/s/Marvin L. Mann *
Marvin L. Mann Trustee February 14, 1994
/s/Gerald C. McDonough*
Gerald C. McDonough Trustee February 14, 1994
/s/Thomas R. Williams*
Thomas R. Williams Trustee February 14, 1994
(dagger) Signatures affixed by J. Gary Burkhead pursuant to a power of
attorney dated October 20, 1993 and filed herewith.
* Signature affixed by Robert C. Hacker pursuant to a power of attorney
dated October 20, 1993 and filed herewith.
POWER OF ATTORNEY
I, the undersigned Director, Trustee or General Partner, as the case may
be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Series I Fidelity Magellan Fund
Fidelity Advisor Series III Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series IV Fidelity Money Market Trust
Fidelity Advisor Series VI Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series VIII Fidelity New York Municipal Trust
Fidelity California Municipal Trust Fidelity Puritan Trust
Fidelity Capital Trust Fidelity School Street Trust
Fidelity Charles Street Trust Fidelity Select Portfolios
Fidelity Commonwealth Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Congress Street Fund Fidelity Summer Street Trust
Fidelity Contrafund Fidelity Trend Fund
Fidelity Deutsche Mark Performance Fidelity Union Street Trust
Portfolio, L.P. Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Devonshire Trust Fidelity U.S. Investments-Government Securities
Fidelity Financial Trust Fund, L.P.
Fidelity Fixed-Income Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Government Securities Fund Spartan U.S. Treasury Money Market
Fidelity Hastings Street Trust Fund
Fidelity Income Fund Variable Insurance Products Fund
Fidelity Institutional Trust Variable Insurance Products Fund II
Fidelity Investment Trust
</TABLE>
plus any other investment company for which Fidelity Management &
Research Company acts as investment adviser and for which the undersigned
individual serves as a Board Member (collectively, the "Funds"), hereby
severally constitute and appoint Arthur J. Brown, Arthur C. Delibert,
Robert C. Hacker, Richard M. Phillips, Dana L. Platt and Stephanie A.
Xupolos, 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 Pre-Effective
Amendments to any Registration Statements of the Funds, any and all
subsequent Post-Effective Amendments to said Registration Statements, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
my name and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and Investment Company Act of 1940, and all related
requirements of the Securities and Exchange Commission, hereby ratifying
and confirming all that said attorneys-in-fact or their substitutes may do
or cause to be done by virtue hereof.
WITNESS my hand on the date set forth below.
/s/Ralph F. Cox October 20, 1993
Ralph F. Cox
POWER OF ATTORNEY
I, the undersigned Director, Trustee or General Partner, as the case may
be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Series I Fidelity Investment Trust
Fidelity Advisor Series III Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series IV Fidelity School Street Trust
Fidelity Advisor Series VI Fidelity Select Portfolios
Fidelity Advisor Series VIII Fidelity Sterling Performance Portfolio, L.P.
Fidelity Beacon Street Trust Fidelity Trend Fund
Fidelity Capital Trust Fidelity Union Street Trust
Fidelity Commonwealth Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Contrafund Fidelity U.S. Investments-Government Securities
Fidelity Deutsche Mark Performance Fund, L.P.
Portfolio, L.P. Fidelity Yen Performance Portfolio, L.P.
Fidelity Devonshire Trust Spartan U.S. Treasury Money Market
Fidelity Financial Trust Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Fidelity Government Securities Fund Variable Insurance Products Fund II
Fidelity Hastings Street Trust
Fidelity Institutional Trust
</TABLE>
plus any other investment company for which Fidelity Management &
Research Company acts as investment adviser and for which the undersigned
individual serves as a Board Member (collectively, the "Funds"), hereby
severally constitute and appoint Arthur J. Brown, Arthur C. Delibert,
Robert C. Hacker, Richard M. Phillips, Dana L. Platt and Stephanie A.
Xupolos, 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 Pre-Effective
Amendments to any Registration Statements of the Funds, any and all
subsequent Post-Effective Amendments to said Registration Statements, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
my name and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and Investment Company Act of 1940, and all related
requirements of the Securities and Exchange Commission, hereby ratifying
and confirming all that said attorneys-in-fact or their substitutes may do
or cause to be done by virtue hereof.
WITNESS my hand on the date set forth below.
/s/Phyllis Burke Davis October 20, 1993
Phyllis Burke Davis
POWER OF ATTORNEY
I, the undersigned Director, Trustee or General Partner, as the case may
be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Series I Fidelity Investment Trust
Fidelity Advisor Series III Fidelity Special Situations Fund
Fidelity Advisor Series IV Fidelity Sterling Performance Portfolio, L.P.
Fidelity Advisor Series VI Fidelity Trend Fund
Fidelity Advisor Series VII Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Advisor Series VIII Fidelity U.S. Investments-Government Securities
Fidelity Contrafund Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity Yen Performance Portfolio, L.P.
Portfolio, L.P. Spartan U.S. Treasury Money Market
Fidelity Fixed-Income Trust Fund
Fidelity Government Securities Fund Variable Insurance Products Fund
Fidelity Hastings Street Trust Variable Insurance Products Fund II
Fidelity Institutional Trust
</TABLE>
plus any other investment company for which Fidelity Management &
Research Company acts as investment adviser and for which the undersigned
individual serves as a Board Member (collectively, the "Funds"), hereby
severally constitute and appoint Arthur J. Brown, Arthur C. Delibert,
Robert C. Hacker, Richard M. Phillips, Dana L. Platt and Stephanie A.
Xupolos, 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 Pre-Effective
Amendments to any Registration Statements of the Funds, any and all
subsequent Post-Effective Amendments to said Registration Statements, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
my name and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and Investment Company Act of 1940, and all related
requirements of the Securities and Exchange Commission, hereby ratifying
and confirming all that said attorneys-in-fact or their substitutes may do
or cause to be done by virtue hereof.
WITNESS my hand on the date set forth below.
/s/Marvin L. Mann October 20, 1993
Marvin L. Mann
POWER OF ATTORNEY
I, the undersigned President and Director, Trustee or General Partner, as
the case may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Series I Fidelity Institutional Trust
Fidelity Advisor Series II Fidelity Investment Trust
Fidelity Advisor Series III Fidelity Magellan Fund
Fidelity Advisor Series IV Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series V Fidelity Money Market Trust
Fidelity Advisor Series VI Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series VII Fidelity Municipal Trust
Fidelity Advisor Series VIII Fidelity New York Municipal Trust
Fidelity California Municipal Trust Fidelity Puritan Trust
Fidelity Capital Trust Fidelity School Street Trust
Fidelity Charles Street Trust Fidelity Securities Fund
Fidelity Commonwealth Trust Fidelity Select Portfolios
Fidelity Congress Street Fund Fidelity Sterling Performance Portfolio, L.P.
Fidelity Contrafund Fidelity Summer Street Trust
Fidelity Corporate Trust Fidelity Trend Fund
Fidelity Court Street Trust 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 Yen Performance Portfolio, L.P.
Fidelity Exchange Fund Spartan U.S. Treasury Money Market
Fidelity Financial Trust Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Fidelity Government Securities Fund Variable Insurance Products Fund II
Fidelity Hastings Street Trust
Fidelity Income Fund
</TABLE>
plus any other investment company for which Fidelity Management &
Research Company acts as investment adviser and for which the undersigned
individual serves as President and Board Member (collectively, the
"Funds"), hereby severally constitute and appoint J. Gary Burkhead, my true
and lawful attorney-in-fact, with full power of substitution, and with full
power to sign for me and in my name in the appropriate capacity, all
Pre-Effective Amendments to any Registration Statements of the Funds, any
and all subsequent Post-Effective Amendments to said Registration
Statements, any Registration Statements on Form N-14, and any supplements
or other instruments in connection therewith, and generally to do all such
things in my name and behalf in connection therewith as said
attorney-in-fact deem necessary or appropriate, to comply with the
provisions of the Securities Act of 1933 and Investment Company Act of
1940, and all related requirements of the Securities and Exchange
Commission. I hereby ratify and confirm all that said attorneys-in-fact or
their substitutes may do or cause to be done by virtue hereof.
WITNESS my hand on the date set forth below.
/s/Edward C. Johnson 3d October 20, 1993
Edward C. Johnson 3d
FORM OF MANAGEMENT CONTRACT
between
FIDELITY ADVISOR SERIES VI
FIDELITY ADVISOR SHORT-INTERMEDIATE TAX-EXEMPT FUND
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
AGREEMENT made this __ day of __ 1993, by and between Fidelity Advisor
Series VI, a Massachusetts business trust which may issue one or more
series of shares of beneficial interest (hereinafter called the "Fund"), on
behalf of Fidelity Advisor Short-Intermediate Tax-Exempt Fund (hereinafter
called the "Portfolio"), and Fidelity Management & Research Company, a
Massachusetts corporation (hereinafter called the "Adviser").
Required authorization and approval by shareholders and Trustees having
been obtained, the Fund, on behalf of the Portfolio, and the Adviser hereby
consent, pursuant to Paragraph 6 of the existing Management Contract dated
_______.
1. (a) Investment Advisory Services. The Adviser undertakes to act as
investment adviser of the Portfolio and shall, subject to the supervision
of the Fund's Board of Trustees, direct the investments of the Portfolio in
accordance with the investment objective, policies and limitations as
provided in the Portfolio's Prospectus or other governing instruments, as
amended from time to time, the Investment Company Act of 1940 and rules
thereunder, as amended from time to time (the "1940 Act"), and such other
limitations as the Portfolio may impose by notice in writing to the
Adviser. The Adviser shall also furnish for the use of the Portfolio
office space and all necessary office facilities, equipment and personnel
for servicing the investments of the Portfolio; and shall pay the salaries
and fees of all officers of the Fund, of all Trustees of the Fund who are
"interested persons" of the Fund or of the Adviser and of all personnel of
the Fund or the Adviser performing services relating to research,
statistical and investment activities. The Adviser is authorized, in its
discretion and without prior consultation with the Portfolio, to buy, sell,
lend and otherwise trade in any stocks, bonds and other securities and
investment instruments on behalf of the Portfolio. The investment policies
and all other actions of the Portfolio are and shall at all times be
subject to the control and direction of the Fund's Board of Trustees.
(b) Management Services. The Adviser shall perform (or arrange for the
performance by its affiliates of) the management and administrative
services necessary for the operation of the Fund. The Adviser shall,
subject to the supervision of the Board of Trustees, perform various
services for the Portfolio, including but not limited to: (i) providing the
Portfolio with office space, equipment and facilities (which may be its
own) for maintaining its organization; (ii) on behalf of the Portfolio,
supervising relations with, and monitoring the performance of, custodians,
depositories, transfer and pricing agents, accountants, attorneys,
underwriters, brokers and dealers, insurers and other persons in any
capacity deemed to be necessary or desirable; (iii) preparing all general
shareholder communications, including shareholder reports; (iv) conducting
shareholder relations; (v) maintaining the Fund's existence and its
records; (vi) during such times as shares are publicly offered, maintaining
the registration and qualification of the Portfolio's shares under federal
and state law; and (vii) investigating the development of and developing
and implementing, if appropriate, management and shareholder services
designed to enhance the value or convenience of the Portfolio as an
investment vehicle.
The Adviser shall also furnish such reports, evaluations, information or
analyses to the Fund as the Fund's Board of Trustees may request from time
to time or as the Adviser may deem to be desirable. The Adviser shall make
recommendations to the Fund's Board of Trustees with respect to Fund
policies, and shall carry out such policies as are adopted by the Trustees.
The Adviser shall, subject to review by the Board of Trustees, furnish such
other services as the Adviser shall from time to time determine to be
necessary or useful to perform its obligations under this Contract.
(c) The Adviser shall place all orders for the purchase and sale of
portfolio securities for the Portfolio's account with brokers or dealers
selected by the Adviser, which may include brokers or dealers affiliated
with the Adviser. The Adviser shall use its best efforts to seek to
execute portfolio transactions at prices which are advantageous to the
Portfolio and at commission rates which are reasonable in relation to the
benefits received. In selecting brokers or dealers qualified to execute a
particular transaction, brokers or dealers may be selected who also provide
brokerage and research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of 1934) to the Portfolio and/or the
other accounts over which the Adviser or its affiliates exercise investment
discretion. The Adviser is authorized to pay a broker or dealer who
provides such brokerage and research services a commission for executing a
portfolio transaction for the Portfolio which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if the Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer. This determination
may be viewed in terms of either that particular transaction or the overall
responsibilities which the Adviser and its affiliates have with respect to
accounts over which they exercise investment discretion. The Trustees of
the Fund shall periodically review the commissions paid by the Portfolio to
determine if the commissions paid over representative periods of time were
reasonable in relation to the benefits to the Portfolio.
The Adviser shall, in acting hereunder, be an independent contractor. The
Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of the
Fund are or may be or become interested in the Adviser as directors,
officers or otherwise and that directors, officers and stockholders of the
Adviser are or may be or become similarly interested in the Fund, and that
the Adviser may be or become interested in the Fund as a shareholder or
otherwise.
3. The Adviser will be compensated on the following basis for the services
and facilities to be furnished hereunder. The Adviser shall receive a
monthly management fee, payable monthly as soon as practicable after the
last day of each month, composed of a Group Fee and an Individual Fund Fee.
(a) Group Fee Rate. The Group Fee Rate shall be based upon the monthly
average of the net assets of the registered investment companies having
Advisory and Service or Management Contracts with the Adviser (computed in
the manner set forth in the fund's Declaration of Trust or other
organizational document) determined as of the close of business on each
business day throughout the month. The Group Fee Rate shall be determined
on a cumulative basis pursuant to the following schedule:
Average Net Assets Annualized Fee Rate (for each level)
$0 - 3 billion .3700%
3 - 6 .3400
6 - 9 .3100
9 - 12 .2800
12 - 15 .2500
15 - 18 .2200
18 - 21 .2000
21 - 24 .1900
24 - 30 .1800
30 - 36 .1750
36 - 42 .1700
42 - 48 .1650
48 - 66 .1600
66 - 84 .1550
84-120 .1500
120-174 .1450
174-228 .1400
228-282 .1375
282-336 .1350
Over 336 .1325
(b) Individual Fund Fee Rate. The Individual Fund Fee Rate shall be .__%.
The sum of the Group Fee Rate, calculated as described above to the
nearest millionth, and the Individual Fund Fee Rate shall constitute the
Annual Management Fee Rate. One-twelfth of the Annual Management Fee Rate
shall be applied to the average of the net assets of the Portfolio
(computed in the manner set forth in the Fund's Declaration of Trust or
other organizational document) determined as of the close of business on
each business day throughout the month.
4. It is understood that the Portfolio will pay all its expenses other
than those expressly stated to be payable by the Adviser hereunder, which
expenses payable by the Portfolio shall include, without limitation, (i)
interest and taxes; (ii) brokerage commissions and other costs in
connection with the purchase or sale of securities and other investment
instruments; (iii) fees and expenses of the Fund's Trustees other than
those who are "interested persons" of the Fund or the Adviser; (iv) legal
and audit expenses; (v) custodian, registrar and transfer agent fees and
expenses; (vi) fees and expenses related to the registration and
qualification of the Fund and the Portfolio's shares for distribution under
state and federal securities laws; (vii) expenses of printing and mailing
reports and notices and proxy material to shareholders of the Portfolio;
(viii) all other expenses incidental to holding meetings of the Portfolio's
shareholders, including proxy solicitations therefor; (ix) a pro rata
share, based on relative net assets of the Portfolio and other registered
investment companies having Advisory and Service or Management Contracts
with the Adviser, of 50% of insurance premiums for fidelity and other
coverage; (x) its proportionate share of association membership dues; (xi)
expenses of typesetting for printing Prospectuses and Statements of
Additional Information and supplements thereto; (xii) expenses of printing
and mailing Prospectuses and Statements of Additional Information and
supplements thereto sent to existing shareholders; and (xiii) such
non-recurring or extraordinary expenses as may arise, including those
relating to actions, suits or proceedings to which the Portfolio is a party
and the legal obligation which the Portfolio may have to indemnify the
Fund's Trustees and officers with respect thereto.
5. The services of the Adviser to the Portfolio are not to be deemed
exclusive, the Adviser being free to render services to others and engage
in other activities, provided, however, that such other services and
activities do not, during the term of this Contract, interfere, in a
material manner, with the Adviser's ability to meet all of its obligations
with respect to rendering services to the Portfolio hereunder. In the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Adviser,
the Adviser shall not be subject to liability to the Portfolio or to any
shareholder of the Portfolio for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security.
6. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 6, this Contract shall continue in force until June 31, 1994
and indefinitely thereafter, but only so long as the continuance after such
date shall be specifically approved at least annually by vote of the
Trustees of the Fund or by vote of a majority of the outstanding voting
securities of the Portfolio.
(b) This Contract may be modified by mutual consent, such consent on the
part of the Fund to be authorized by vote of a majority of the outstanding
voting securities of the Portfolio.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of this
paragraph 6, the terms of any continuance or modification of this Contract
must have been approved by the vote of a majority of those Trustees of the
Fund who are not parties to the Contract or interested persons of any such
party, cast in person at a meeting called for the purpose of voting on such
approval.
(d) Either party hereto may, at any time on sixty (60) days' prior written
notice to the other, terminate this Contract, without payment of any
penalty, by action of its Trustees or Board of Directors, as the case may
be, or with respect to the Portfolio by vote of a majority of the
outstanding voting securities of the Portfolio. This Contract shall
terminate automatically in the event of its assignment.
7. The Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Fund's Declaration of Trust or
other organizational document and agrees that the obligations assumed by
the Fund pursuant to this Contract shall be limited in all cases to the
Portfolio and its assets, and the Adviser shall not seek satisfaction of
any such obligation from the shareholders or any shareholder of the
Portfolio or any other Portfolios of the Fund. In addition, the Adviser
shall not seek satisfaction of any such obligations from the Trustees or
any individual Trustee. The Adviser understands that the rights and
obligations of any Portfolio under the Declaration of Trust or other
organizational document are separate and distinct from those of any and all
other Portfolios.
8. This Agreement shall be governed by, and construed in accordance with,
the laws of the Commonwealth of Massachusetts, without giving effect to the
choice of laws provisions thereof.
The terms "vote of a majority of the outstanding voting securities,"
"assignment," and "interested persons," when used herein, shall have the
respective meanings specified in the 1940 Act, as now in effect or as
hereafter amended, and subject to such orders as may be granted by the
Securities and Exchange Commission.
IN WITNESS WHEREOF the parties have caused this instrument to be signed in
their behalf by their respective officers thereunto duly authorized, and
their respective seals to be hereunto affixed, all as of the date written
above.
FIDELITY ADVISOR SERIES VI
on behalf of Fidelity Advisor Short-Intermediate Tax-Exempt Fund
By _________________________________________
Senior Vice President
FIDELITY MANAGEMENT & RESEARCH COMPANY
By _________________________________________
President
FORM OF
GENERAL DISTRIBUTION AGREEMENT
between
FIDELITY ADVISOR SERIES VI
and
FIDELITY DISTRIBUTORS CORPORATION
Agreement made this ___ day of , 19 , between Fidelity Advisor
Series VI, a Massachusetts business trust having its principal place of
business in Boston, Massachusetts and which may issue one or more series of
beneficial interest ("Issuer"), with respect to shares of Fidelity Advisor
Short-Intermediate Tax-Exempt Fund, a series of the Issuer, and Fidelity
Distributors Corporation, a Massachusetts corporation having its principal
place of business in Boston, Massachusetts ("Distributors").
In consideration of the mutual promises and undertakings herein contained,
the parties agree as follows:
1. Sale of Shares - The Issuer grants to Distributors the right to sell
shares on behalf of the Issuer during the term of this Agreement and
subject to the registration requirements of the Securities Act of 1933, as
amended ("1933 Act"), and of the laws governing the sale of securities in
the various states ("Blue Sky Laws") under the following terms and
conditions: Distributors (i) shall have the right to sell, as agent on
behalf of the Issuer, shares authorized for issue and registered under the
1933 Act, and (ii) may sell shares under offers of exchange, if available,
between and among the funds advised by Fidelity Management & Research
Company ("FMR").
2. Sale of Shares by the Issuer - The rights granted to Distributors shall
be nonexclusive in that the Issuer reserves the right to sell its shares to
investors on applications received and accepted by the Issuer. Further,
the Issuer reserves the right to issue shares in connection with the merger
or consolidation, or acquisition by the Issuer through purchase or
otherwise, with any other investment company, trust, or personal holding
company.
3. Shares Covered by this Agreement - This Agreement shall apply to
unissued shares of the Issuer, shares of the Issuer held in its treasury in
the event that in the discretion of the Issuer treasury shares shall be
sold, and shares of the Issuer repurchased for resale.
4. Public Offering Price - Except as otherwise noted in the Issuer's
current Prospectus and/or Statement of Additional Information, all shares
sold to investors by Distributors or the Issuer will be sold at the public
offering price. The public offering price for all accepted subscriptions
will be the net asset value per share, as determined in the manner
described in the Issuer's current Prospectus and/or Statement of Additional
Information, plus a sales charge (if any) described in the Issuer's current
Prospectus and/or Statement of Additional Information. The Issuer shall in
all cases receive the net asset value per share on all sales. If a sales
charge is in effect, Distributors shall have the right subject to such
rules or regulations of the Securities and Exchange Commission as may then
be in effect pursuant to Section 22 of the Investment Company Act of 1940
to pay a portion of the sales charge to dealers who have sold shares of the
Issuer. If a fee in connection with shareholder redemptions is in effect,
the Issuer shall collect the fee on behalf of Distributors and, unless
otherwise agreed upon by the Issuer and Distributors, Distributors shall be
entitled to receive all of such fees.
5. Suspension of Sales - If and whenever the determination of net asset
value is suspended and until such suspension is terminated, no further
orders for shares shall be processed by Distributors except such
unconditional orders as may have been placed with Distributors before it
had knowledge of the suspension. In addition, the Issuer reserves the
right to suspend sales and Distributors' authority to process orders for
shares on behalf of the Issuer if, in the judgment of the Issuer, it is in
the best interests of the Issuer to do so. Suspension will continue for
such period as may be determined by the Issuer.
6. Solicitation of Sales - In consideration of these rights granted to
Distributors, Distributors agrees to use all reasonable efforts, consistent
with its other business, to secure purchasers for shares of the Issuer.
This shall not prevent Distributors from entering into like arrangements
(including arrangements involving the payment of underwriting commissions)
with other issuers. This does not obligate Distributors to register as a
broker or dealer under the Blue Sky Laws of any jurisdiction in which it is
not now registered or to maintain its registration in any jurisdiction in
which it is now registered. If a sales charge is in effect, Distributors
shall have the right to enter into sales agreements with dealers of its
choice for the sale of shares of the Issuer to the public at the public
offering price only and fix in such agreements the portion of the sales
charge which may be retained by dealers, provided that the Issuer shall
approve the form of the dealer agreement and the dealer discounts set forth
therein and shall evidence such approval by filing said form of dealer
agreement and amendments thereto as an exhibit to its currently effective
Registration Statement under the 1933 Act.
7. Authorized Representations - Distributors is not authorized by the
Issuer to give any information or to make any representations other than
those contained in the appropriate registration statements or Prospectuses
and Statements of Additional Information filed with the Securities and
Exchange Commission under the 1933 Act (as these registration statements,
Prospectuses and Statements of Additional Information may be amended from
time to time), or contained in shareholder reports or other material that
may be prepared by or on behalf of the Issuer for Distributors' use. This
shall not be construed to prevent Distributors from preparing and
distributing sales literature or other material as it may deem appropriate.
8. Portfolio Securities - Portfolio securities of the Issuer may be bought
or sold by or through Distributors, and Distributors may participate
directly or indirectly in brokerage commissions or "spreads" for
transactions in portfolio securities of the Issuer. However, all sums of
money received by Distributors as a result of such purchases and sales or
as a result of such participation must, after reimbursement of actual
expenses of Distributors in connection with such activity, be paid over by
Distributors for the benefit of the Issuer.
9. Registration of Shares - The Issuer agrees that it will take all action
necessary to register shares under the 1933 Act (subject to the necessary
approval of its shareholders) so that there will be available for sale the
number of shares Distributors may reasonably be expected to sell. The
Issuer shall make available to Distributors such number of copies of its
currently effective Prospectus and Statement of Additional Information as
Distributors may reasonably request. The Issuer shall furnish to
Distributors copies of all information, financial statements and other
papers which Distributors may reasonably request for use in connection with
the distribution of shares of the Issuer.
10. Expenses - The Issuer shall pay all fees and expenses (a) in connection
with the preparation, setting in type and filing of any registration
statement, Prospectus and Statement of Additional Information under the
1933 Act and amendments for the issue of its shares, (b) in connection with
the registration and qualification of shares for sale in the various states
in which the Board of Trustees of the Issuer shall determine it advisable
to qualify such shares for sale (including registering the Issuer as a
broker or dealer or any officer of the Issuer as agent or salesman in any
state), (c) of preparing, setting in type, printing and mailing any report
or other communication to shareholders of the Issuer in their capacity as
such, and (d) of preparing, setting in type, printing and mailing
Prospectuses, Statements of Additional Information and any supplements
thereto sent to existing shareholders.
[ FUNDS THAT HAVE A 12B-1 PLAN SHOULD INCLUDE: As provided in the
Distribution and Service Plan adopted by the Issuer, it is recognized by
the Issuer that FMR may reimburse Distributors for any direct expenses
incurred in the distribution of shares of the Issuer from any source
available to it, including advisory and service or management fees paid to
it by the Issuer. ]
11. Indemnification - The Issuer agrees to indemnify and hold harmless
Distributors and each of its directors and officers and each person, if
any, who controls Distributors within the meaning of Section 15 of the 1933
Act against any loss, liability, claim, damages or expense (including the
reasonable cost of investigating or defending any alleged loss, liability,
claim, damages, or expense and reasonable counsel fees incurred in
connection therewith) 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 Issuer (as from time to time
amended) included an untrue statement of a material fact or omitted to
state a material fact required to be stated or necessary in order to make
the statements not misleading under the 1933 Act, or any other statute or
the common law. However, the Issuer does not agree to indemnify
Distributors 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 Issuer by or on behalf of Distributors. In no case (i) is
the indemnity of the Issuer in favor of Distributors or any person
indemnified to be deemed to protect Distributors or any person against any
liability to the Issuer or its security holders to which Distributors or
such person would otherwise be subject by reason of wilful misfeasance, bad
faith or gross negligence in the performance of its duties or by reason of
its reckless disregard of its obligations and duties under this Agreement,
or (ii) is the Issuer to be liable under its indemnity agreement contained
in this paragraph with respect to any claim made against Distributors or
any person indemnified unless Distributors or person, as the case may be,
shall have notified the Issuer in writing of the claim within a reasonable
time after the summons or other first written notification giving
information of the nature of the claim shall have been served upon
Distributors or any such person (or after Distributors or such person shall
have received notice of service on any designated agent). However, failure
to notify the Issuer of any claim shall not relieve the Issuer from any
liability which it may have to Distributors or any person against whom such
action is brought otherwise than on account of its indemnity agreement
contained in this paragraph. The Issuer shall be entitled to participate
at its own expense in the defense, or, if it so elects, to assume the
defense of any suit brought to enforce any claims, but if the Issuer elects
to assume the defense, the defense shall be conducted by counsel chosen by
it and satisfactory to Distributors or person or persons, defendant or
defendants in the suit. In the event the Issuer elects to assume the
defense of any suit and retain counsel, Distributors, officers or directors
or controlling person or persons, defendant or defendants in the suit,
shall bear the fees and expenses of any additional counsel retained by
them. If the Issuer does not elect to assume the defense of any suit, it
will reimburse Distributors, officers or directors or controlling person or
persons, defendant or defendants in the suit, for the reasonable fees and
expenses of any counsel retained by them. The Issuer agrees to notify
Distributors promptly of the commencement of any litigation or proceedings
against it or any of its officers or trustees in connection with the
issuance or sale of any of the shares.
Distributors also covenants and agrees that it will indemnify and hold
harmless the Issuer and each of its Board members and officers and each
person, if any, who controls the Issuer within the meaning of Section 15 of
the 1933 Act, against any loss, liability, damages, claim or expense
(including the reasonable cost of investigating or defending any alleged
loss, liability, damages, claim or expense and reasonable counsel fees
incurred in connection therewith) arising by reason of any person acquiring
any shares, based upon the 1933 Act or any other statute or common law,
alleging any wrongful act of Distributors or any of its employees or
alleging that the registration statement, Prospectus, Statement of
Additional Information, shareholder reports or other information filed or
made public by the Issuer (as from time to time amended) included an untrue
statement of a material fact or omitted to state a material fact required
to be stated or necessary in order to make the statements not misleading,
insofar as the statement or omission was made in reliance upon, and in
conformity with information furnished to the Issuer by or on behalf of
Distributors. In no case (i) is the indemnity of Distributors in favor of
the Issuer or any person indemnified to be deemed to protect the Issuer or
any person against any liability to which the Issuer or such person would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under this Agreement, or (ii) is
Distributors to be liable under its indemnity agreement contained in this
paragraph with respect to any claim made against the Issuer or any person
indemnified unless the Issuer or person, as the case may be, shall have
notified Distributors in writing of the claim within a reasonable time
after the summons or other first written notification giving information of
the nature of the claim shall have been served upon the Issuer or any such
person (or after the Issuer or such person shall have received notice of
service on any designated agent). However, failure to notify Distributors
of any claim shall not relieve Distributors from any liability which it may
have to the Issuer or any person against whom the action is brought
otherwise than on account of its indemnity agreement contained in this
paragraph. In the case of any notice to Distributors, it shall be entitled
to participate, at its own expense, in the defense or, if it so elects, to
assume the defense of any suit brought to enforce the claim, but if
Distributors elects to assume the defense, the defense shall be conducted
by counsel chosen by it and satisfactory to the Issuer, to its officers and
Board and to any controlling person or persons, defendant or defendants in
the suit. In the event that Distributors elects to assume the defense of
any suit and retain counsel, the Issuer or controlling persons, defendant
or defendants in the suit, shall bear the fees and expense of any
additional counsel retained by them. If Distributors does not elect to
assume the defense of any suit, it will reimburse the Issuer, officers and
Board or controlling person or persons, defendant or defendants in the
suit, for the reasonable fees and expenses of any counsel retained by them.
Distributors agrees to notify the Issuer promptly of the commencement of
any litigation or proceedings against it in connection with the issue and
sale of any of the shares.
12. Effective Date - This agreement shall be effective upon its execution,
and unless terminated as provided, shall continue in force until January
31, 199 <<use the year that corresponds to the January following the
sole shareholder vote>> and thereafter from year to year, provided
continuance is approved annually by the vote of a majority of the Board
members of the Issuer, and by the vote of those Board members of the Issuer
who are not "interested persons" of the Issuer and, if a plan under Rule
12b-1 under the Investment Company Act of 1940 is in effect, by the vote of
those Board members of the Issuer who are not "interested persons" of the
Issuer and who are not parties to the Distribution and Service Plan or this
Agreement and have no financial interest in the operation of the
Distribution and Service Plan or in any agreements related to the
Distribution and Service Plan, cast in person at a meeting called for the
purpose of voting on the approval. This Agreement shall automatically
terminate in the event of its assignment. As used in this paragraph, the
terms "assignment" and "interested persons" shall have the respective
meanings specified in the Investment Company Act of 1940 as now in effect
or as hereafter amended. In addition to termination by failure to approve
continuance or by assignment, this Agreement may at any time be terminated
by either party upon not less than sixty days' prior written notice to the
other party.
13. Notice - Any notice required or permitted to be given by either party
to the other shall be deemed sufficient if sent by registered or certified
mail, postage prepaid, addressed by the party giving notice to the other
party at the last address furnished by the other party to the party giving
notice: if to the Issuer, at 82 Devonshire Street, Boston, Massachusetts,
and if to Distributors, at 82 Devonshire Street, Boston, Massachusetts.
14. Limitation of Liability - Distributors is expressly put on notice of
the limitation of shareholder liability as set forth in the Declaration of
Trust or other organizational document of the Issuer and agrees that the
obligations assumed by the Issuer under this contract shall be limited in
all cases to the Issuer and its assets. Distributors shall not seek
satisfaction of any such obligation from the shareholders or any
shareholder of the Issuer. Nor shall Distributors seek satisfaction of any
such obligation from the Trustees or any individual Trustee of the Issuer.
Distributors understands that the rights and obligations of each series of
shares of the Issuer under the Issuer's Declaration of Trust or other
organizational document are separate and distinct from those of any and all
other series.
15. This agreement shall be governed by, and construed in accordance with,
the laws of the Commonwealth of Massachusetts, without giving effect to the
choice of laws provisions thereof.
IN WITNESS WHEREOF, the Issuer has executed this instrument in its name
and behalf, and its seal affixed, by one of its officers duly authorized,
and Distributors has executed this instrument in its name and behalf by one
of its officers duly authorized, as of the day and year first above
written.
FIDELITY ADVISOR SERIES VI
FIDELITY SHORT-INTERMEDIATE TAX-EXEMPT FUND
By _____________________________
FIDELITY DISTRIBUTORS CORPORATION
By _____________________________
LG912940017
DISTRIBUTION AND SERVICE PLAN
of Fidelity Advisor Series VI:
Fidelity Advisor Short-Intermediate Tax-Exempt Fund
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by Rule
12b-1 under the Investment Company Act of 1940 (the "Act") of Fidelity
Advisor Short-Intermediate Tax-Exempt Fund (the "Portfolio"), a series of
shares of Fidelity Advisor Series VI (the "Fund").
2. The Fund has entered into a General Distribution Agreement with respect
to the Portfolio with Fidelity Distributors Corporation (the
"Distributor"), a wholly-owned subsidiary of Fidelity Management &
Research Company (the "Adviser"), under which the Distributor uses all
reasonable efforts, consistent with its other business, to secure
purchasers for the Portfolio's shares of beneficial interest ("shares").
Under the agreement, the Distributor pays the expenses of printing and
distributing any prospectuses, reports and other literature used by the
Distributor, advertising, and other promotional activities in connection
with the offering of shares of the Portfolio for sale to the public. It is
understood that the Adviser may reimburse the Distributor for these
expenses from any source available to it, including management fees paid to
it by the Portfolio.
3. The Adviser directly, or through the Distributor, may, subject to the
approval of the Trustees, make payments to securities dealers and other
third parties who engage in the sale of shares or who render shareholder
support services, including but not limited to providing office space,
equipment and telephone facilities, answering routine inquiries regarding
the Portfolio, processing shareholder transactions and providing such other
shareholder services as the Fund may reasonably request.
4. The Portfolio will not make separate payments as a result of this Plan
to the Adviser, Distributor or any other party, it being recognized that
the Portfolio presently pays, and will continue to pay, a management fee to
the Adviser. To the extent that any payments made by the Portfolio to the
Adviser, including payment of management fees, should be deemed to be
indirect financing of any activity primarily intended to result in the sale
of shares of the Portfolio within the context of Rule 12b-1 under the Act,
then such payments shall be deemed to be authorized by this Plan.
5. This Plan shall become effective upon the first business day of the
month following approval by a vote of at least a "majority of the
outstanding voting securities of the Portfolio" (as defined in the Act),
the plan having been approved by a vote of a majority of the Trustees of
the Fund, including a majority of Trustees who are not "interested persons"
of the Fund (as defined in the Act) and who have no direct or indirect
financial interest in the operation of this Plan or in any agreements
related to this Plan (the "Independent Trustees"), cast in person at a
meeting called for the purpose of voting on this Plan.
6. This Plan shall, unless terminated as hereinafter provided, remain in
effect from the date specified above until June 30 199_ and from year to
year thereafter, provided, however, that such continuance is subject to
approval annually by a vote of a majority of the Trustees of the Fund,
including a majority of the Independent Trustees, cast in person at a
meeting called for the purpose of voting on this Plan. This Plan may be
amended at any time by the Board of Trustees, provided that (a) any
amendment to authorize direct payments by the Portfolio to finance any
activity primarily intended to result in the sale of shares of the
Portfolio, to increase materially the amount spent by the Portfolio for
distribution, or any amendment of the Management Contract to increase the
amount to be paid by the Portfolio thereunder shall be effective only upon
approval by a vote of a majority of the outstanding voting securities of
the Portfolio, and (b) any material amendments of this Plan shall be
effective only upon approval in the manner provided in the first sentence
in this paragraph.
7. This Plan may be terminated at any time, without the payment of any
penalty, by vote of a majority of the Independent Trustees or by a vote of
a majority of the outstanding voting securities of the Portfolio.
8. During the existence of this Plan, the Fund shall require the Adviser
and/or Distributor to provide the Fund, for review by the Fund's Board of
Trustees, and the Trustees shall review, at least quarterly, a written
report of the amounts expended in connection with financing any activity
primarily intended to result in the sale of shares of the Portfolio (making
estimates of such costs where necessary or desirable) and the purposes for
which such expenditures were made.
9. This Plan does not require the Adviser or Distributor to perform any
specific type or level of distribution activities or to incur any specific
level of expenses for activities primarily intended to result in the sale
of shares of the Portfolio.
10. Consistent with the limitation of shareholder liability as set forth
in the Fund's Declaration of Trust or other organizational document, any
obligations assumed by the Portfolio pursuant to this Plan and any
agreements related to this Plan shall be limited in all cases to the
Portfolio and its assets, and shall not constitute obligations of any other
series of shares of the Fund.
11. If any provision of this Plan shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of the Plan shall not
be affected thereby.
LG912940020
Dated as of ______________, 1993
FIDELITY ADVISOR SERIES VI
Fidelity Advisor Short-Intermediate Tax-Exempt Fund (the Portfolio)
SCHEDULE A: TRANSFER AGENT, DIVIDEND AND DISTRIBUTION DISBURSING AGENT,
AND SHAREHOLDER SERVICING AGENT
I. Services To Be Performed: United Missouri Bank, N.A. (the Bank) shall
be responsible for the following:
A. The Bank shall administer and/or perform transfer agent functions for
the Portfolio. It will:
(1) receive for acceptance, orders for the purchase of Portfolio shares,
and promptly deliver payments received by it and appropriate documentation
therefor to the Portfolio's custodian;
(2) pursuant to purchase orders, issue the appropriate number of Portfolio
shares and properly register such shares to the appropriate shareholder
account;
(3) receive for acceptance, redemption requests and redemption instructions
(including redemptions by check transmitted to the Bank by any duly
appointed check processing agent) and process payments for redemption to
shareholders in accordance with the terms, conditions and rules governing
each shareholder's account as set forth in the Portfolio's prospectus,
statement of additional information and each shareholder's account
application;
(4) effect transfers of shares by the registered owners thereof upon
receipt of appropriate instructions; and
(5) prepare and mail to Portfolio shareholders such confirmations and
statements of account as may be required under applicable law and as may be
reasonably requested by the Portfolio.
B. The Bank shall act as service agent of the Portfolio in connection with
dividend and capital gains distributions by the Portfolio. It will:
(1) for each Portfolio shareholder who has elected to receive dividends
and/or distributions in cash, send payments to shareholders in accordance
with the shareholder's election; and
(2) for each Portfolio shareholder who has elected to receive dividends
and/or distributions in shares of the Portfolio or in shares of another
mutual fund for which the Bank serves as transfer agent, credit the
shareholder's account(s) for the proper number of shares.
C. In addition to the foregoing services, the Bank shall:
(1) perform all the customary administrative services related to its
transfer agent and dividend and distribution disbursing agent functions,
including, but not limited to:
(a) maintaining all shareholder accounts,
(b) preparing shareholder meeting lists, and supervising, but not paying
for, various agents and contractors employed to mail proxy materials and
receive and tabulate proxies,
(c) typesetting, printing and mailing shareholder reports and prospectuses
to current Portfolio shareholders,
(d) withholding taxes (including withholding for foreign taxes) for
shareholders for whom withholdings are required by federal or state
regulation and filing all required reports with respect thereto,
(e) preparing, distributing and filing all requisite shareholder tax
statements on appropriate forms and responding to inquiries with respect
thereto, and
(f) establishing and supervising the operation of bank accounts for the
receipt of funds for share purchases and the payment of dividends,
distributions and redemption proceeds;
(2) furnish the Portfolio with all necessary reports of Portfolio shares
sold in each state in order to permit compliance with the state securities
laws; and
(3) as required, respond to shareholder inquiries relating to the status of
their accounts, Portfolio performance, distributions, and share price, and
furnish shareholders with copies of account histories and make adjustments
to shareholder accounts to correct account files.
II. Compensation: For the performance of its obligations hereunder, the
Portfolio shall pay the Bank in accordance with this Schedule A.
A. Certain Defined Terms
For purposes of this Schedule A, the following terms shall have the
meanings indicated:
An "account" shall mean each and every account or subaccount of a
Portfolio shareholder of record maintained on a transfer agency system by
the Bank or on a transfer agency system operated by divisions and
subsidiaries of FMR Corp. or any other entity to whom the Bank has
delegated all or a portion of its duties under this Schedule A such term
shall not include an account maintained on any subaccounting system
operated by broker, bank or other intermediary who is acting on behalf of
its customer and who is not acting pursuant to a delegation of duties by
the Bank.
"Basic Retail Account" shall mean any account of the Portfolio other than
a USA Account, an Institutional Trading Account, a Broker-Dealer Trading
Account or an Institutional Employee Benefit Account.
"Broker-Dealer Trading Account" shall mean any account of the Portfolio
maintained on behalf of a broker-dealer (other than broker-dealer
affiliates of FMR) or its clients.
"Centralized Service Transaction" shall mean each monetary transaction
described in Exhibit A to this Schedule A executed on behalf of an
institutional customer (such as a bank trust department, corporation or
investment adviser), or its clients who has no remote system access and for
whom the Bank inputs all account activity information and performs all
account maintenance functions.
"Institutional Employee Benefit Account" shall mean an account of the
Portfolio maintained on behalf of a corporation, association, partnership
or other employer for the benefit of employees, by which employer and
employee contributions are invested in the Portfolio as part of a qualified
or non-qualified employee benefit plan primarily through payroll
deductions.
"Institutional Trading Account" shall mean any account maintained on
behalf of an institutional client (such as a bank, investment advisor,
insurance company or law firm), other than a broker-dealer, or its clients.
"Remote Service Transaction" shall mean each monetary transaction
described in Exhibit A-1 to the Schedule A executed on behalf of an
institutional customer (such as a bank, investment adviser, insurance
company or law firm), or its clients, who utilizes remote system access
equipment to input account activity information and to perform account
maintenance functions.
"USA Account" shall mean any account of the Portfolio established as the
core feature under the Fidelity USA Program, into which brokerage account
cash balances may be swept and from which brokerage account, credit card
and check debits may be satisfied.
B. Schedule of Account and Transaction Fees
(1) Basic Retail Accounts
(a) Account Fees - The Portfolio shall pay an account fee at the annual
rates (adjusted in accordance with the procedures set forth in II.C.(1)(a)
and (c) below) of $15.00 for Basic Retail Accounts with a value of less
than $5,000 and $25.50 for Basic Retail Accounts with a value of $5,000 or
more (the "December 31, 1992 Retail Account Fee Rates").
(b) Transaction Fees - For all Basic Retail Accounts the Portfolio shall
pay a fee (adjusted in accordance with the procedures set forth in
II.C.(1)(a) and (c) below) of $5.61 for each transaction described in
Exhibit A-1 to this Schedule A (the "December 31, 1992 Retail Transaction
Fee Rate").
(2) USA Accounts
(a) Account Fees - The Portfolio shall pay an account fee, in lieu of the
fees set forth in II.B.(1)(a), at the annual rate (adjusted in accordance
with the procedures set forth in II.C.(1)(b) and (c) below) of $12.35 for
each USA Account (the "December 31, 1992 Account Fee Rate").
(b) Transaction Fees - For all USA Accounts the Portfolio shall pay a fee
(adjusted in accordance with the procedures set forth in II.C.(1)(b)
below), in lieu of the fees set forth in II.B.(1)(b), of $0.74 for each
transaction described in Exhibit A-2 to this Schedule A (the "December 31,
1992 USA Transaction Fee Rate").
(c) Shareholder Service Fees - The foregoing Account Fees and Transactions
Fees, shall be in addition to, and not be reduced by, the fees charged to
shareholders directly for participating in the Fidelity USA program.
(3) Institutional Trading Accounts
(a) Account Fees - The Portfolio shall pay an account fee, in lieu of the
fees set forth in II.B.(1)(a) at the annual rate of $95.00 for each
Institutional Trading Account.
(b) Transaction Fees - The Portfolio shall pay a fee, in lieu of the fees
set forth in II.B.(1)(b), of $20.00 for each Centralized Service
Transaction and $17.50 for each Remote Service Transaction of such
Institutional Trading Account.
(4) Broker-Dealer Trading Accounts
(a) Account Fees - The Portfolio shall pay an account fee, in lieu of the
fees set forth in II.B.(1)(a), at the annual rate of $30.00 for each
Broker-Dealer Institutional Trading Account.
(b) Transaction Fees - The Portfolio shall pay a fee, in lieu of the fees
set forth in II.B.(1)(b) of $6.00 for each Centralized Service Transaction
and each Remote Service Transaction of such Broker-Dealer Institutional
Trading Account.
(5) Institutional Employee Benefit Plan Accounts - The Portfolio shall pay
a fee, in lieu of the fees set forth in II.B.(1), based upon the month end
value of all Institutional Employee Benefit Plan Accounts at an annual rate
of 0.30%.
C. Rate Changes
(1) Basic Retail Account and USA Account Rate Adjustments
(a) Annual Cost of Living Adjustment for Basic Retail Accounts - The
December 31, 1992 Retail Account Fee Rates and Retail Transaction Fee Rates
set forth in II.B.(1) of this Schedule A shall be adjusted annually for
increases in the cost of living as of the first day of January. On each
January 1, beginning January 1, 1994, the rates shall be adjusted by
multiplying 70% of the percentage change in the National Consumer Price
Index for Urban Areas Index (the Index) for the preceding calendar year
times the rates in effect for the preceding calendar year and adding the
results to the respective rates for the preceding calendar year to
determine the then current rate for the ensuing calendar year. Each
adjustment shall be rounded to the nearest one cent.
SAMPLE CALCULATION: Assuming the December 31, 1992 Retail Account Rate was
$7.00 and the December 31, 1992 Retail Transaction Fee Rate was $5.00, that
the Index reported a change in wage and price levels for the 12 months
ended December 31, 1993 of 5%, then the adjusted rates for the period
beginning January 1, 1994 would be calculated as follows:
Basic Retail Account Fee Rate Computation:
70% x 5% x $7.00 = $ .25
Add 7.00
1994 Basic Retail Account Fee $ 7.25
Basic Retail Transaction Fee Rate Computation:
70% x 5% x $5.00 = $ .18
Add 5.00
1994 Basic Retail Transaction Fee $ 5.18
(b) Annual Cost of Living Adjustment for USA Accounts - The December 31,
1992 USA Account Fee Rate and USA Transaction Fee Rate set forth in
II.B.(2) of this Schedule A shall be adjusted annually for increases in the
cost of living as of the first day of January. On each January 1,
beginning January 1, 1994, the rates shall be adjusted by multiplying 70%
of the percentage change in the Index for the preceding calendar year times
the rates in effect for the preceding calendar year and adding the results
to the respective rates for the preceding calendar year to determine the
then current rate for the ensuing calendar year.
SAMPLE CALCULATION: Assuming the December 31, 1992 USA Account Rate was
$11.00 and the December 31, 1992 USA Transaction Fee Rate was $.65, that
the Index reported a change in wage and price levels for the 12 months
ended December 31, 1993 of 5%, then the adjusted rates for the period
beginning January 1, 1994 would be calculated as follows:
USA Account Fee Rate Computation:
70% x 5% x $11.00 = $ .39
Add 11.00
1994 USA Account Fee $ 11.39
USA Transaction Fee Rate Computation:
70% x 5% x $0.65 = $ .02
Add .65
1994 USA Transaction Fee $ 0.67
(c) Postal Rate Changes - On the first day of any month following the
month in which the United States Postal Service implements a postal rate
increase, or if the increase is effective with the first day of a month,
then commencing on that first day, (Effective Date) the Account Fees and
Transaction Fees for Basic Retail Accounts and USA Accounts then in effect
shall be adjusted by a Postage Increase Factor (PIF). The PIF adjustment
shall be computed in the following fashion. The Account Fees and the
Transaction Fees for Basic Retail Accounts and USA Accounts then in effect
shall each be multiplied by the PIF and the resulting amounts shall be
added to the respective current rates. The PIF shall be determined by
dividing the revenues derived from the Account Fees and Transaction Fees
for Basic Retail Accounts and USA Accounts for the 12 months preceding the
Effective Date of the postal rate increase into the postal costs associated
with Basic Retail Accounts and with USA Accounts, respectively, for the
same 12-month period and then multiplying the result times a Class Cost
Factor. The Class Cost Factor shall be derived by calculating the dollar
weighted postage increase for all classes of postage being utilized to
perform services to Basic Retail Accounts and to USA Accounts,
respectively. The dollar-weighted postage increase shall be calculated by
multiplying the percentage increase for each class by the postal costs for
each such class and dividing the sum of such calculations by the total
postage costs for the 12 months preceding the Effective Date. Each
adjustment should be rounded to the nearest one cent.
SAMPLE CALCULATION: Postal rate adjustments would be calculated for
Account Fees and Transaction Fees for Basic Retail Accounts and USA
Accounts in the example set forth below for Basic Retail Accounts, assuming
(a) that on May 31 prior to the implementation of a postal rate increase,
the annual rate for Basic Retail Account Fees is $7.00 and the Transaction
Fee rate is $5.00, (b) that for the previous 12 months the revenues from
such fees are $10 million, and (c) that there were following three classes
of Basic Retail Account postage costs for the same period and the following
increases occur on June 1:
Postage 12 months of Postage Rate
Class Postage Cost Increases
1st $400,000 6%
2nd $100,000 9%
3rd $200,000 11%
STEP 1: CALCULATION OF THE DOLLAR-WEIGHTED POSTAGE INCREASE.
$400,000 x 6% = $ 24,000
$100,000 x 9% = 9,000
$200,000 x 11% = 22,000
$ 55,000
divided by total postage costs $700,000
Class Cost Factor .0785
STEP 2: CALCULATION OF POSTAGE INCREASE FACTOR (PIF).
12 month postage costs $700,000
divided by 12 month revenues 10,000,000
.07
multiplied by the Class Cost Factor .0785
PIF .0055
STEP 3: CALCULATION OF JUNE 1 RATES.
Basic Retail Account Fee computation:
$7.00 x .0055 = $ .04
Add 7.00
6/1 Basic Retail Account Fee $7.04
Basic Retail Transaction Fee Computation:
$5.00 x .0055 = $ .03
Add 5.00
6/1 Basic Retail Transaction Fee $5.03
D. Schedule of Payments
The Bank shall be entitled to receive the account fee in respect of an
account under the applicable provisions of paragraph B above in each year
in which such account has a share balance greater than zero as of January
1, and in respect of each account opened after January 1 of such year.
Accounts with a share balance of zero shall be closed as of December 31
each year, and no account fee shall be paid in respect of such accounts for
the following year unless it is reopened. Account fees shall be billed
monthly on a pro rata basis at one-twelfth of the applicable annual rate as
of the end of each calendar month for each account open or opened during
the month. An account shall be a billable account as of the end of the
month in which it is opened, and the end of each month thereafter through
December 31, even though the value of such account may become zero. The
net asset value of an account as most recently determined in accordance
with the Portfolio's prospectus before 11:59 p.m., Boston time, on the last
calendar day of a month shall be the value used to determine the applicable
fee for the entire month. The Bank may bill for accounts maintained on
transfer agency systems maintained by other divisions and subsidiaries of
FMR Corp. or any other entity to whom the Bank has delegated all or a
portion of its duties under this Schedule A. Transaction fees with respect
to an account are billable by the Bank as of the end of each month in which
the transaction occurs. In the event that a transaction is canceled or
corrected, the cancellation or correction shall be reflected as a credit to
the Fund against billable transactions for the month in which the
cancellation or correction occurs.
E. Shareholder Charges - The Bank shall be entitled to charge a shareholder
directly, and may redeem shares of the Portfolio held in a shareholder's
account, for:
(1) Exchange Fees - The Bank may from time to time receive, through payment
by shareholders of the Portfolio, all or a portion of an exchange fee in an
amount and under circumstances authorized by the Trustees of the Fund. If
a portion of any exchange fee collected is to be allocated to the
Portfolio, such amount shall be applied to reduce transaction fees or other
charges otherwise payable to the Bank pursuant to this Agreement in
accordance with the allocation authorization by the Board of Trustees of
the Fund.
(2) Wire fees - any fees in effect on January 1, 1993 as disclosed in the
Portfolio's Prospectus or which may be approved by the Trustees of the Fund
for executing a wire transfer of the proceeds of any wire redemption order
placed by a shareholder.
(3) Dishonored Checks - any fees reasonably related to cost and imposed by
the Bank when a shareholder purchases shares by check and the purchase is
subsequently canceled because the check was dishonored by the shareholder's
bank.
(4) Account Histories - any fees reasonably related to cost and imposed by
the Bank to prepare, at the request of a shareholder, an account history or
provide other research information for any year(s) prior to the calendar
year in which the request is made by the shareholder.
(5) Miscellaneous Supplemental Fees - any fees imposed by the Bank or any
affiliate of the Bank for providing supplemental services to a shareholder
pursuant to separate arrangements with the customer, including but not
limited to fees for personal advisory services, fees for providing check
redemption services, for maintaining and providing services to an
individual retirement custodian account, a Keogh custodian account, a
Prototype Profit Sharing or Money Purchase Pension Plan account or for
other similar supplemental services.
III. Costs and Expenses
A. Allocation of Costs. The Bank will be responsible for all expenses,
costs and other charges arising out of the performance of its obligations
hereunder, including the fees and disbursements of any third party retained
to perform any of the services to the Portfolio on behalf of the Bank
(including the fees and handling charges of brokers, banks and other
intermediaries for forwarding shareholder reports and statements with
respect to each account for which an account fee is imposed); all paper,
typesetting, printing, stationery, envelopes, postage, labeling costs, mail
sorting and other similar costs of preparing and mailing any dividend or
redemption payment, all shareholder reports (including the cost of printing
and mailing prospectuses sent to current shareholders), tax statements,
confirmations, notices and statements of account; all telephone and
computer equipment and usage charges; and all personnel expenses, heat,
light, rent, utilities, equipment purchases or rentals; all insurance
premiums associated with the provision of services under this agreement,
unless the Trustees shall have specifically authorized an allocation of all
or a portion of the premium to the Portfolio; all costs associated with the
provision of check redemption services (including, the costs of printing
and mailing of checks and checkbooks to shareholders, the charges of any
vendor retained by the Portfolio to process checks for payment, and the
charges of sending canceled checks to shareholders); and other necessary
expenses associated with the provision of services hereunder.
Notwithstanding the foregoing, the Portfolio shall be required to bear all
expenses for all accounts, including USA Core Accounts, Institutional
Trading Accounts, Broker-Dealer Trading Accounts and Institutional Employee
Benefit Accounts, associated with: (1) the printing, handling, forwarding
or mailing of shareholder reports and notices to shareholders who own
shares through an account of a broker, bank or other intermediary if the
Bank is not compensated by an account fee for each sub-account, (2) the
charges of any bank for establishing and operating accounts for the receipt
of funds for share purchases and the payment of dividends, distributions
and redemption proceeds, (3) all fees and expenses of registering shares
for sale under the state securities laws, and (4) the holding of annual or
special meetings of Portfolio shareholders, including: the costs of
typesetting, printing, postage and mailing notices, proxy cards and proxy
statements (and, if required, annual reports sent to shareholders who have
opened accounts subsequent to the last regular mailing date of such reports
to shareholders); the fees and other disbursements of any agent hired to
mail proxy materials and/or tabulate proxies; all charges incurred by any
proxy soliciting agent; the reasonable and customary fees and handling
charges of brokers, banks and other intermediaries for forwarding proxy
materials; and all other customary expenses associated with the holding of
shareholder meetings.
B. Reports. Once each year, the Bank shall cause Service to submit to the
Fund and the other funds advised by Fidelity Management & Research
Company with which the Bank has Transfer Agent Agreements (the Funds) a
report setting forth the total amount of costs and expenses incurred by the
Bank in the performance of its obligations to the Funds under the Transfer
Agent Agreements and the total amounts payable by the Funds for such
services. The Bank shall also cause Service to provide annually a report
by an independent certified public accounting firm (who may be the auditors
of Service) on Service's income and expenses. The term "Transfer Agent
Agreements" shall mean this agreement between the Bank and the Fund and
agreements of like tenor between the Bank and other Funds.
UNITED MISSOURI BANK, N.A.
By: ______________________
Name: ______________________
Title: ______________________
FIDELITY ADVISOR SERIES VI, on behalf of
Fidelity Advisor Short-Intermediate Tax-Exempt Fund
By: ______________________
Name: Gary L. French
Title: Treasurer
Exhibit A-1
Monetary Transaction Types
The following monetary transactions may be billed by United Missouri Bank,
N.A. under the Transfer Agent Agreement with FIDELITY ADVISOR SERIES VI:
Fidelity Advisor Short-Intermediate Tax-Exempt Fund:
Direct Payments - an investor pays cash and shares are issued pursuant to a
single order to purchase shares.
Direct Redemption - an investor's shares are redeemed and a check is sent
for redemption proceeds.
Exchange Redemption - A shareholder has entered an order to sell shares of
the Portfolio and invest proceeds in another Fund that permits exchange
privileges.
Exchange Purchase - A shareholder has entered an order of redemption to
another Fund and directed that proceeds of the redemption be invested in
the Portfolio.
Transfer - The change of ownership of an account is registered, by opening
a new account in the Portfolio and transferring of shares to the new
account.
Wire Purchases - An investor places an order for the purchase of shares and
purchase price is wired to the Portfolio.
Purchase by Directed Dividend - Pursuant to standing instruction of a
shareholder, shares of the Portfolio are purchased and the purchase price
is paid by a dividend from a different Fund.
Check Redemption - A shareholder's check is presented for payment and
shares sufficient to honor the check are redeemed.
Wire Liquidation - A shareholder requests that a specified number of shares
or dollar amount of shares be redeemed and a bank wire is sent for the
proceeds of redemption, less any applicable bank charges for the wire.
Electronic Funds Purchase - Shares are purchased by an electronic funds
transfer.
Electronic Funds Redemption - Shares are redeemed and the proceeds of
redemption are transferred electronically to the shareholder.
Systematic Withdrawal Plan Redemptions - Pursuant to standing instructions,
a shareholder redeems a specified amount of shares.
LG930190002
Dated ___________, 1993
FIDELITY ADVISOR SERIES VI
Fidelity Advisor Short-Intermediate Tax-Exempt Fund (the Portfolio)
SCHEDULE B: AGENT TO PERFORM PORTFOLIO PRICING AND BOOKKEEPING
I. Services To Be Performed. United Missouri Bank, N.A. (the Bank) shall
be responsible for:
A. Accounting relating to the Portfolio and portfolio transactions of the
Portfolio.
B. The determination of net asset value per share of the outstanding
shares of the Portfolio and the offering price, if any, at which shares
are to be sold, at the times and in the manner described in the
Declaration of Trust or Partnership Agreement, as amended, and
the Prospectus of the Portfolio (pricing).
C. The determination of distributions, if any.
D. The timely communication of information determined in B and C above, to
the person or
persons designated by the Portfolio.
E. Maintaining the books of account of the Portfolio.
F. In conjunction with the Custodian, receiving information and keeping
records about all corporate actions, including, but not limited to, cash
and stock distributions or dividends,
stock splits and reverse stock splits, taken by companies whose
securities are held by the
Portfolio.
G. Monitoring foreign corporate actions and foreign trades and entering
orders to convert foreign currency or establish contracts for future
settlement of foreign currency.
H. Processing and monitoring the settlement of Variable Rate Demand Notes
and GNMA's.
I. Monitoring and accounting for futures and options.
II. Compensation. For the performance of its obligations hereunder, the
Portfolio shall pay the Bank an annual fee based on average daily net
assets for each month. The fee schedule is as follows:
Portfolio's
Average Daily Net Assets Fee Rate
$500 million and under .04%
Over $500 million .02%
provided, however, that the minimum total annual fee payable by the
Portfolio to the Bank shall be $45,000 and the maximum total annual fee
payable by the Portfolio to the Bank shall be $750,000. Bank shall be
reimbursed for out-of-pocket expenses for pricing, dividend and interest
quotation services and related communications and telephone charges.
UNITED MISSOURI BANK, N.A.
By: ______________________
Name: ______________________
Title: ______________________
FIDELITY ADVISOR SERIES VI, on behalf of
Fidelity Advisor Short-Intermediate Tax-Exempt Fund
By: ______________________
Name: Gary L. French
Title: Treasurer
Dated ________________
FIDELITY ADVISOR SERIES VI
Fidelity Advisor Short-Intermediate Tax-Exempt Fund (the Portfolio)
SCHEDULE C: AGENT FOR SECURITIES LENDING TRANSACTIONS
I. Services To Be Performed. United Missouri Bank, N.A. (the Bank) shall
be responsible for administering a program of securities lending from the
Portfolio's portfolio by:
A. Carrying out security loan transactions between approved borrowers and
the Portfolio, including assisting Custodian in receiving and returning
collateral for loans.
B. Marking to market loans outstanding each day.
C. Ensuring that the value of collateral for loans is 100% or more of
loaned securities at market price and issuing demands for additional
collateral should the percentage fall below 100%.
The details of operating standards and procedures to be followed shall be
established from time to time by agreement between the Bank and the
Portfolio and shall be expressed in a procedures manual maintained by the
Bank.
II. Compensation. For the performance of its obligations hereunder, the
Portfolio shall pay the Bank according to the following:
Opening a loan $15
Closing a loan $15
Daily mark to market of collateral $ 5
UNITED MISSOURI BANK, N.A.
By: ______________________
Name: ______________________
Title: ______________________
FIDELITY ADVISOR SERIES VI, on behalf of
Fidelity Advisor Short-Intermediate Tax-Exempt Fund
By: ______________________
Name: Gary L. French
Title: Treasurer
Exhibit 11
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the references to our Firm in the Statement of
Additional Information in Post-Effective Amendment No. 31 to the
Registration Statement on Form N-1A, Fidelity Advisor Series VI (formerly
Fidelity Oliver Street Trust), Fidelity Advisor Short-Intermediate
Tax-Exempt Fund, under the heading "Auditor".
COOPERS & LYBRAND
Boston, Massachusetts
February 14, 1994
