FIDELITY ADVISOR SHORT-INTERMEDIATE MUNICIPAL INCOME FUND
A FUND OF
FIDELITY ADVISOR SERIES VI
82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109
1-800-522-7297
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To the Shareholders of Fidelity Advisor Short-Intermediate Municipal
Income Fund:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
Meeting) of Fidelity Advisor Short-Intermediate Municipal Income Fund
(the fund) will be held at the office of Fidelity Advisor Series VI
(the trust), 82 Devonshire Street, Boston, Massachusetts 02109 on May
4, 1998, at 9:00 a.m. Eastern time. The purpose of the Meeting is to
consider and act upon the following proposal, and to transact such
other business as may properly come before the Meeting or any
adjournments thereof.
(1) To approve an Agreement and Plan of Reorganization between
Fidelity Advisor Short-Intermediate Municipal Income Fund and Fidelity
Advisor Intermediate Municipal Income Fund, another fund of the trust,
providing for the transfer of all of the assets of Fidelity Advisor
Short-Intermediate Municipal Income Fund to Fidelity Advisor
Intermediate Municipal Income Fund in exchange solely for shares of
beneficial interest in Class A, Class T, and Institutional Class of
Fidelity Advisor Intermediate Municipal Income Fund and the assumption
by Fidelity Advisor Intermediate Municipal Income Fund of Fidelity
Advisor Short-Intermediate Municipal Income Fund's liabilities,
followed by the distribution of such shares to shareholders of the
corresponding class of Fidelity Advisor Short-Intermediate Municipal
Income Fund in liquidation of Fidelity Advisor Short-Intermediate
Municipal Income Fund.
The Board of Trustees has fixed the close of business on March 9,
1998 as the record date for the determination of the shareholders of
Fidelity Advisor Short-Intermediate Municipal Income Fund entitled to
notice of, and to vote at, such Meeting and any adjournments thereof.
By order of the Board of Trustees,
ERIC D. ROITER, Secretary
March 9, 1998
YOUR VOTE IS IMPORTANT -
PLEASE RETURN YOUR PROXY CARD PROMPTLY.
SHAREHOLDERS ARE INVITED TO ATTEND THE MEETING IN PERSON. ANY
SHAREHOLDER WHO DOES NOT EXPECT TO ATTEND THE MEETING IS URGED TO
INDICATE VOTING INSTRUCTIONS ON THE ENCLOSED PROXY CARD, DATE AND SIGN
IT, AND RETURN IT IN THE ENVELOPE PROVIDED, WHICH NEEDS NO POSTAGE IF
MAILED IN THE UNITED STATES. IN ORDER TO AVOID UNNECESSARY EXPENSE, WE
ASK YOUR COOPERATION IN MAILING YOUR PROXY CARD PROMPTLY, NO MATTER
HOW LARGE OR SMALL YOUR HOLDINGS MAY BE.
INSTRUCTIONS FOR EXECUTING PROXY CARD
The following general rules for executing proxy cards may be of
assistance to you and help avoid the time and expense involved in
validating your vote if you fail to execute your proxy card properly.
1. INDIVIDUAL ACCOUNTS: Your name should be signed exactly as it
appears in the registration on the proxy card.
2. JOINT ACCOUNTS: Either party may sign, but the name of the party
signing should conform exactly to a name shown in the registration.
3. ALL OTHER ACCOUNTS should show the capacity of the individual
signing. This can be shown either in the form of the account
registration itself or by the individual executing the proxy card. For
example:
REGISTRATION VALID SIGNATURE
A. 1) ABC Corp. John Smith, Treasurer
2) ABC Corp. John Smith, Treasurer
c/o John Smith, Treasurer
B. 1) ABC Corp. Profit Sharing Plan Ann B. Collins, Trustee
2) ABC Trust Ann B. Collins, Trustee
3) Ann B. Collins, Trustee Ann B. Collins, Trustee
u/t/d 12/28/78
C. 1) Anthony B. Craft, Cust. Anthony B. Craft
f/b/o Anthony B. Craft, Jr.
UGMA
FIDELITY ADVISOR SHORT-INTERMEDIATE MUNICIPAL INCOME FUND
A FUND OF
FIDELITY ADVISOR SERIES VI
82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109
1-800- 522-7297
PROXY STATEMENT AND PROSPECTUS
MARCH 9, 1998
This Proxy Statement and Prospectus (Proxy Statement) is being
furnished to shareholders of Fidelity Advisor Short-Intermediate
Municipal Income Fund (Short-Intermediate), a fund of Fidelity Advisor
Series VI (the trust), in connection with the solicitation of proxies
by the trust's Board of Trustees for use at the Special Meeting of
Shareholders of Short-Intermediate and at any adjournments thereof
(the Meeting). The Meeting will be held on Monday, May 4, 1998 at 9:00
a.m. Eastern time at 82 Devonshire Street, Boston, Massachusetts
02109, the principal executive office of the trust.
As more fully described in the Proxy Statement, the purpose of the
Meeting is to vote on a proposed reorganization (Reorganization).
Pursuant to an Agreement and Plan of Reorganization (the Agreement),
Short-Intermediate would transfer all of its assets to Fidelity
Advisor Intermediate Municipal Income Fund (Intermediate), another
fund of the trust, in exchange solely for shares of beneficial
interest in Class A, Class T, and Institutional Class of Intermediate
and the assumption by Intermediate of Short-Intermediate's
liabilities. The number of shares to be issued in the proposed
Reorganization will be based upon the relative net asset values of the
outstanding shares of Class A, Class T, and Institutional Class of
Short-Intermediate and the corresponding class of Intermediate at the
time of the exchange. As provided in the Agreement, Short-Intermediate
will distribute Class A, Class T, and Institutional Class shares of
Intermediate to its shareholders of the corresponding class in
liquidation of Short-Intermediate on May 28, 1998, or such other date
as the parties may agree (the Closing Date). Shareholders of Class A,
Class T, and Institutional Class of Short-Intermediate will receive
shares of the corresponding class of Intermediate equal in value to
the shares of Short-Intermediate they are surrendering, based upon the
relative net asset values of Class A (Short-Intermediate) to Class A
(Intermediate), Class T (Short-Intermediate) to Class T
(Intermediate), and Institutional Class (Short-Intermediate) to
Institutional Class (Intermediate), respectively, as of the Closing
Date.
Intermediate, a municipal bond fund, is a diversified fund of
Fidelity Advisor Series VI, an open-end management investment company
organized as a Massachusetts business trust on June 1, 1983.
Intermediate's investment objective is to seek high current income
free from federal income tax consistent with the preservation of
capital. Intermediate seeks to achieve its investment objective by
normally investing in investment-grade municipal securities while
maintaining an average maturity of between three and 10 years.
This Proxy Statement, which should be retained for future reference,
sets forth concisely the information about the Reorganization and
Intermediate that a shareholder should know before voting on the
proposed Reorganization. The Statement of Additional Information dated
March 9, 1998 relating to this Proxy Statement has been filed with the
Securities and Exchange Commission (SEC) and is incorporated herein by
reference. This Proxy Statement is accompanied by the Prospectus
(dated February 28, 1998 ), which offer s shares of Class
A, Class T, and Institutional Class of Intermediate. The Statement of
Additional Information for Class A, Class T, and Institutional Class
of Intermediate (dated February 28, 1998 ) is available upon
request. Attachment 1 contains excerpts from the Annual Reports of
Class A, Class T, and Institutional Class of Intermediate dated
November 30, 1997. The Prospectuses and Statement of Additional
Information for Intermediate have been filed with the SEC and are
incorporated herein by reference. The Prospectuses and Statement of
Additional Information for Class A, Class T, and Institutional Class
of Short-Intermediate (each dated February 28, 1998 ) have been
filed with the SEC and are incorporated herein by reference. Copies of
these documents may be obtained without charge by contacting the trust
or Intermediate at Fidelity Client Services, 82 Devonshire Street,
Boston, Massachusetts 02109 or by calling 1-800-52 2 -7297.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROXY
STATEMENT AND PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
TABLE OF CONTENTS
Voting Information
Synopsis
Comparison of Other Policies of the Funds
Comparison of Principal Risk Factors
The Proposed Transaction
Additional Information About Intermediate
Miscellaneous
Attachment 1. Excerpts from the Annual Reports of Class A, Class T,
and Institutional Class of Fidelity Advisor
Intermediate Municipal Income Fund dated November 30, 1997
Exhibit 1. Form of Agreement and Plan of Reorganization between
Fidelity Advisor Short-Intermediate Municipal
Income Fund and Fidelity Advisor Intermediate Municipal Income Fund
PROXY STATEMENT AND PROSPECTUS
SPECIAL MEETING OF SHAREHOLDERS OF
FIDELITY ADVISOR SHORT-INTERMEDIATE MUNICIPAL INCOME FUND
A FUND OF
FIDELITY ADVISOR SERIES VI
82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109
1-800-52 2 -7297
TO BE HELD ON MAY 4, 1998
VOTING INFORMATION
This Proxy Statement and Prospectus (Proxy Statement) is furnished in
connection with a solicitation of proxies made by, and on behalf of,
the Board of Trustees of Fidelity Advisor Series VI (the trust) to be
used at the Special Meeting of Shareholders of Fidelity Advisor
Short-Intermediate Municipal Income Fund (Short-Intermediate or the
fund) and at any adjournments thereof (the Meeting), to be held on
Monday, May 4, 1998 at 9:00 a.m. Eastern time at 82 Devonshire Street,
Boston, Massachusetts 02109, the principal executive office of the
trust and Fidelity Management & Research Company (FMR), the fund's
investment adviser.
The purpose of the Meeting is set forth in the accompanying Notice.
The solicitation is made primarily by the mailing of this Proxy
Statement and the accompanying proxy card on or about March 9, 1998.
Supplementary solicitations may be made by mail, telephone, telegraph,
facsimile, electronic means or by personal interview by
representatives of the trust. In addition, D.F. King & Co., Inc.
and/or Management Information Services Corp. may be paid on a per-call
basis to solicit shareholders on behalf of the fund at an anticipated
cost of approximately $4,150. The expenses in connection with
preparing this Proxy Statement and its enclosures and of all
solicitations will be paid by the fund, provided the expenses do not
exceed Class A's, Class T's, or Institutional Class's expense cap of
0.90%, 1.00%, and 0.75% respectively. Expenses exceeding each class's
expense cap will be paid by FMR. The fund will reimburse brokerage
firms and others for their reasonable expenses in forwarding
solicitation material to the beneficial owners of shares.
If the enclosed proxy card is executed and returned, it may
nevertheless be revoked at any time prior to its use by written
notification received by the trust, by the execution of a later-dated
proxy card, or by attending the Meeting and voting in person.
All proxy cards solicited by the Board of Trustees that are properly
executed and received by the Secretary prior to the Meeting, and which
are not revoked, will be voted at the Meeting. Shares represented by
such proxies will be voted in accordance with the instructions
thereon. If no specification is made on a proxy card, it will be voted
FOR the matters specified on the proxy card. Only proxies that are
voted will be counted toward establishing a quorum. Broker non-votes
are not considered voted for this purpose. Shareholders should note
that while votes to ABSTAIN will count toward establishing a quorum,
passage of any proposal being considered at the Meeting will occur
only if a sufficient number of votes are cast FOR the proposal.
Accordingly, votes to ABSTAIN and votes AGAINST will have the same
effect in determining whether the proposal is approved.
Short-Intermediate may also arrange to have votes recorded by
telephone. D.F. King & Co., Inc. may be paid on a per-call basis for
vote-by-phone solicitations on behalf of the fund at an anticipated
cost of approximately $5,600. The expenses in connection with
telephone voting will be paid by the fund, provided the expenses do
not exceed Class A's, Class T's, or Institutional Class's expense cap
of 0.90%, 1.00%, and 0.75% respectively. Expenses exceeding each
class's expense cap will be paid by FMR. If the fund records votes by
telephone, it will use procedures designed to authenticate
shareholders' identities, to allow shareholders to authorize the
voting of their shares in accordance with their instructions, and to
confirm that their instructions have been properly recorded. Proxies
given by telephone may be revoked at any time before they are voted in
the same manner that proxies voted by mail may be revoked.
If a quorum is not present at the Meeting, or if a quorum is present
at the Meeting but sufficient votes to approve the proposed item are
not received, or if other matters arise requiring shareholder
attention, the persons named as proxy agents may propose one or more
adjournments of the Meeting to permit further solicitation of proxies.
Any such adjournment will require the affirmative vote of a majority
of those shares present at the Meeting or represented by proxy. When
voting on a proposed adjournment, the persons named as proxy agents
will vote FOR the proposed adjournment all shares that they are
entitled to vote with respect to each item, unless directed to vote
AGAINST the item, in which case such shares will be voted against the
proposed adjournment with respect to that item. A shareholder vote may
be taken on one or more of the items in this Proxy Statement or on any
other business properly presented at the meeting prior to such
adjournment if sufficient votes have been received and it is otherwise
appropriate.
Shares of each class of Short-Intermediate and Fidelity Advisor
Intermediate Municipal Income Fund (Intermediate) issued and
outstanding as of November 30, 1997 are listed below:
Short-Intermediate: Class A 62,680
Short-Intermediate: Class T 2,147,471
Short-Intermediate: Institutional Class 62,284
Intermediate: Class A 41,679
Intermediate: Class T 4,609,444
Intermediate: Class B 747,589
Intermediate: Class C 1,187
Intermediate: Institutional Class 575,743
Shareholders of Short-Intermediate of record at the close of business
on March 9, 1998 will be entitled to vote at the Meeting. Each such
shareholder will be entitled to one vote for each dollar of net asset
value held on that date.
As of November 30, 1997, the Trustees, Members of the Advisory Board,
and officers of each fund owned, in the aggregate, less than 1% of
each fund's total outstanding shares. As of November 30, 1997, the
Trustees, Members of the Advisory Board, and officers of each fund
owned, in the aggregate less than 1% of each class's total outstanding
shares. As of November 30, 1997, the following owned of record or
beneficially 5% or more of each fund or a class's outstanding shares
of Intermediate and Short-Intermediate:
Short-Intermediate: Class A: FIS Securities, Inc., Providence, RI
(49.43%); FMR Corp., Boston, MA (17.74%); Donaldson, Lufkin &
Jenrette, New York, NY (16.00%); Metlife Securities, Inc., Denver, CO
(13.37%); Investment Advisors & Consultants, Inc., Ocean, NJ (6.24%).
Short-Intermediate: Class T: Key Investments, Cleveland, OH (19.49%);
Cowles, Sabol & Co., Inc., Encino, CA (9.44%).
Short-Intermediate: Institutional Class: Peoples Bank and Trust Co.,
Indianapolis, IN (35.13%); First American Bank & Trust, Fort Atkinson,
WI (29.80%); FMR Corp., Boston, MA (18.76%); University Bank, Houston,
TX (13.96%).
Short-Intermediate: Key Investments, Cleveland, OH (18.48%); Cowles,
Sabol & Co., Inc., Encino, CA (8.95%).
Intermediate: Class A: FMR Corp., Boston, MA (27.43%); Summit Trust
Company, Summit, NJ (26.37%); Gerson Horowitz Green Sec. Corp., New
York, NY (13.48%); Locust Street Securities, Inc., Des Moines, IA
(13.30%); FSC Securities Corp., Atlanta, GA (10.02%); Corelink
Financial, Providence, RI (8.68%).
Intermediate: Class T: Royal Alliance Assoc., Inc., Birmingham, AL
(9.49%); Smith Barney, New York, NY (6.62%); Commonwealth Equity
Services, Waltham, MA (6.07%).
Intermediate: Class B: Merrill Lynch Pierce Fenner & Smith,
Jacksonville, FL (11.74%); Prudential Securities, New York, NY
(6.84%); Royal Alliance Assoc., Inc., Birmingham, AL (6.55%);
Donaldson, Lufkin & Jenrette, New York, NY (6.29%); National Financial
Services Corporation, Boston, MA (6.21%); A. G. Edwards & Sons, St.
Louis, MO (5.89%).
Intermediate: Class C: FMR. Corp., Boston, MA (80.04%); Merrill Lynch
Pierce Fenner & Smith, Jacksonville, FL (19.96%).
Intermediate: Institutional Class: Liberty National Bank & Trust,
Oklahoma City, OK (30.92%); South Holland Bancorp, South Holland, IL
(10.14%); Wells Fargo Bank, San Francisco, CA (8.95%); Laird Norton
Co., Seattle, WA (7.32%); Citizens National Bank of Evansville,
Evansville, IN (7.31%); Frost National Bank, San Antonio, TX (5.95%);
Tompkins County Trust Company, Ithaca, NY (5.56%).
Intermediate: Royal Alliance Assoc., Inc., Birmingham, AL (8.14%);
Smith Barney, New York, NY (5.31%); Merrill Lynch Pierce Fenner &
Smith, Jacksonville, FL (5.30%).
To the knowledge of the trust, no other shareholder owned of record
or beneficially 5% or more of the outstanding shares of any class or
of either fund on that date. It is not anticipated that any of the
above shareholders will own of record or beneficially 5% or more of
the outstanding shares of the combined fund as a result of the
Reorganization. It is anticipated that the following shareholders will
own of record or beneficially 5% or more of the outstanding classes of
Intermediate as a result of the Reorganization:
Intermediate: Class A: FMR Corp., Boston, MA (21.62%); Summit Trust
Company, Summit, NJ (10.55%); Gerson Horowitz Green Sec. Corp., New
York, NY (5.39%); Locust Street Securities, Inc., Des Moines, IA
(5.32%).
Intermediate: Class T: Royal Alliance Assoc., Inc., Birmingham, AL
(6.54%); Key Investments, Cleveland, OH (6.05%).
Intermediate: Institutional Class: Liberty National Bank & Trust,
Oklahoma City, OK (28.15%); South Holland Bancorp, South Holland, IL
(9.23%); Wells Fargo Bank, San Francisco, CA (8.15%); Laird Norton
Co., Seattle, WA (6.66%); Citizens National Bank of Evansville,
Evansville, IN (6.65%); Frost National Bank, San Antonio, TX (5.42%);
Tompkins County Trust Company, Ithaca, NY (5.06%).
VOTE REQUIRED: APPROVAL OF THE REORGANIZATION REQUIRES THE AFFIRMATIVE
VOTE OF A "MAJORITY OF THE OUTSTANDING VOTING SECURITIES" OF
SHORT-INTERMEDIATE. UNDER THE INVESTMENT COMPANY ACT OF 1940 (THE 1940
ACT), THE VOTE OF A "MAJORITY OF THE OUTSTANDING VOTING SECURITIES"
MEANS THE AFFIRMATIVE VOTE OF THE LESSER OF (A) 67% OR MORE OF THE
VOTING SECURITIES PRESENT AT THE MEETING OR REPRESENTED BY PROXY IF
THE HOLDERS OF MORE THAN 50% OF THE OUTSTANDING VOTING SECURITIES ARE
PRESENT OR REPRESENTED BY PROXY OR (B) MORE THAN 50% OF THE
OUTSTANDING VOTING SECURITIES. BROKER NON-VOTES ARE NOT CONSIDERED
"PRESENT" FOR THIS PURPOSE.
SYNOPSIS
The following is a summary of certain information contained elsewhere
in this Proxy Statement, in the Agreement, and in the Prospectuses of
Short-Intermediate and Intermediate, which are incorporated herein by
this reference. Shareholders should read the entire Proxy Statement
and the applicable Prospectus of Intermediate carefully for more
complete information.
The proposed reorganization (the Reorganization) would merge
Short-Intermediate into Intermediate, a municipal bond fund also
managed by FMR. If the Reorganization is approved, Short-Intermediate
will cease to exist and Class A, Class T, and Institutional Class
shareholders of Short-Intermediate will become shareholders of the
corresponding class of Intermediate. Approval of the Reorganization
will be determined by the shareholders of each class of
Short-Intermediate in the aggregate rather than by each class
separately.
Both Short-Intermediate and Intermediate seek high current income
free from federal income tax consistent with the preservation of
capital. The funds currently have the same portfolio manager. The
funds differ primarily with respect to their average maturity policies
and the class level expenses they incur.
The proposed merger is part of a wider strategy by Fidelity to reduce
the number of municipal bond funds it manages. Combining the funds
will allow Fidelity to consolidate its Advisor municipal bond fund
product line and potentially offer lower gross operating expenses in
the future by increasing the size of the combined fund.
INVESTMENT OBJECTIVES AND POLICIES
Short-Intermediate and Intermediate have substantially similar
investment objectives in that both seek high current income free from
federal income tax consistent with the preservation of capital.
Each fund invests in investment-grade municipal securities and
normally invests so that at least 80% of its assets is invested in
municipal securities whose interest is free from federal income tax.
Each fund reserves the right to invest up to 5% in below
investment-grade securities. Each fund may invest up to 100% of its
assets in municipal securities subject to the alternative minimum tax
(AMT).
Short-Intermediate and Intermediate differ primarily in their average
maturity policies. Short-Intermediate normally maintains an average
maturity of between two and five years. Intermediate normally
maintains an average maturity of between three and 10 years. As of
November 30, 1997, the dollar weighted average maturity for
Short-Intermediate and Intermediate was 3.2 years and 7.6 years,
respectively.
EXPENSE AND LOAD STRUCTURES
Short-Intermediate and Intermediate have similar expense structures.
Each fund pays a management fee. In addition, certain classes of each
fund pay distribution fees and each class of each fund pays other
expenses. The sum of the management fee, the distribution fee (if
applicable), and other expenses is a class's gross expenses. FMR has
agreed to voluntarily reimburse the gross expenses of each class of
each fund to the extent that they exceed a voluntary expense cap
applicable to that class. The funds also have different load
structures. In addition, Intermediate offers two classes of shares,
Class B and Class C, not offered by Short-Intermediate, which have
different expense and load structures. Intermediate will not issue
Class B or Class C shares in the Reorganization.
The Reorganization would provide Short-Intermediate shareholders with
a fund with the same management fee and a class of shares with similar
expenses after reimbursement.
MANAGEMENT FEE
Each fund pays the same management fee. The management fee is the
same with respect to all classes of shares of a fund.
DISTRIBUTION FEES
Class A, Class T, and Institutional Class of each fund have adopted a
Distribution and Service Plan (the Plans) pursuant to Rule 12b-1 of
the Investment Company Act of 1940.
Under the Plans, Class A and Class T of each fund is authorized to
pay Fidelity Distributors Corporation (FDC) a monthly distribution fee
as compensation for its services and expenses in connection with the
distribution of Class A and Class T shares.
Class A of each fund may pay FDC a distribution fee at an annual rate
of 0.40% of its average net assets, or such lesser amount as the
Trustees may determine from time to time. Class A of both
Short-Intermediate and Intermediate currently pays a distribution fee
of 0.15%.
Class T of each fund may pay FDC a distribution fee at an annual rate
of 0.40% of its average net assets, or such lesser amount as the
Trustees may determine from time to time. Class T of
Short - Intermediate currently pays a distribution fee of 0.15%
while Class T of Intermediate pays a distribution fee of 0.25%.
Institutional Class of both Short-Intermediate and Intermediate does
not pay a distribution fee.
In addition, the Distribution and Service Plan of each class
specifically recognizes that FMR may make payments from its management
fee revenue, past profits, or other resources (not from a fund's or
class's assets) to compensate financial intermediaries (including FDC)
for providing distribution-related services for a class.
TOTAL OPERATING EXPENSES AND EXPENSE REIMBURSEMENT
In addition to management fees and distribution fees, there are also
other operating expenses such as legal, audit, custody, transfer
agency, dividend disbursing, and shareholder servicing expenses. Such
expenses are paid by each class of each fund.
FMR has voluntarily agreed to reimburse Class A, Class T, and
Institutional Class of each fund to the extent that total operating
expenses, as a percentage of their respective net assets, exceed a
voluntary expense cap. The expense caps differ across classes of each
fund. The expense cap for Class A of Short-Intermediate and
Intermediate is 0.90%. The expense cap for Institutional Class of
Short-Intermediate and Intermediate is 0.75%. The expense cap for
Class T of Short-Intermediate is 0.90%, while the expense cap for
Class T of Intermediate is 1.00%.
SALES LOADS
Class A and Class T of each fund have a front-end sales load while
Institutional Class of each fund does not. Class A and Class T of
Short-Intermediate have a maximum load of 1.50%. Class A and Class T
of Intermediate have higher maximum loads of 3.75% and 2.75%,
respectively. On eligible purchases of Class A and Class T shares of
each fund in amounts of $1 million or more, investment professionals
are compensated with a finder's fee at the rate of 0.25% of the
purchase amount. Any assets on which a finder's fee has been paid will
bear a contingent deferred sales charge (CDSC) if they do not remain
in Class A or Class T shares of the Fidelity Advisor funds, or Daily
Money Class shares of Treasury Fund, Prime Fund, or Tax-Exempt Fund,
for a period of at least one uninterrupted year.
IMPACT OF PROPOSED REORGANIZATION ON EXPENSES
The Reorganization would provide Short-Intermediate shareholders with
a fund with the same management fee and a class of shares with similar
expenses. If the Reorganization is approved, shareholders of
Short-Intermediate will have the opportunity to participate in a
larger fund. Increases in fund and class assets have the potential to
result in lower total operating expenses.
Class T of Intermediate has a distribution fee that is 0.10% higher
than Class T of Short-Intermediate (0.25% vs. 0.15%), and an expense
cap that is 0.10% higher (1.00% vs. 0.90%). If the Reorganization is
approved, FMR will lower the expense cap for Class T of Intermediate
to 0.90%, and Intermediaries will continue to receive a 0.25%
distribution fee. FMR is proposing to lower the voluntary expense cap
so that Short-Intermediate's Class T shareholders do not suffer an
expense increase as a result of the Reorganization .
In sum, the Reorganization would provide Short-Intermediate
shareholders with a larger fund with potentially lower gross expenses
and greater interest-rate sensitivity. A reduction in gross expenses
resulting from growth in fund size ultimately benefits shareholders of
Short-Intermediate, because it increases the likelihood that FMR will
maintain the expense caps at current levels or that the expenses will
fall below the current expense cap levels. Greater interest-rate
sensitivity would likely result in better performance during periods
of falling interest rates and worse performance during periods of
rising interest rates. In general, Intermediate has had better
historical performance and greater interest rate sensitivity than
Short-Intermediate.
The Board of Trustees believes that the Reorganization would benefit
Short-Intermediate shareholders and recommends that shareholders vote
in favor of the Reorganization.
THE PROPOSED REORGANIZATION
Shareholders of Short-Intermediate will be asked at the Meeting to
vote upon and approve the Reorganization and the Agreement, which
provide for the acquisition by Intermediate of all of the assets of
Short-Intermediate in exchange solely for Class A, Class T, and
Institutional Class shares of Intermediate (Intermediate Class Shares)
and the assumption by Intermediate of the liabilities of
Short-Intermediate. Short-Intermediate will then distribute
Intermediate Class Shares to its shareholders of the corresponding
class, so that each shareholder will receive the number of full and
fractional Intermediate Class Shares equal in value to the net asset
value of the shareholder's shares of the corresponding class of
Short-Intermediate on the Closing Date (defined below). The exchange
of Short-Intermediate's assets for Intermediate Class Shares will
occur as of the close of business of the New York Stock Exchange on
May 28, 1998, or such other time and date as the parties may agree
(the Closing Date). Shareholders of Class A, Class T, and
Institutional Class of Short-Intermediate will receive shares of the
corresponding class of Intermediate equal in value to the shares of
Short-Intermediate they are surrendering, based upon the relative net
asset values of Class A (Short-Intermediate) to Class A
(Intermediate), Class T (Short-Intermediate) to Class T
(Intermediate), and Institutional Class (Short-Intermediate) to
Institutional Class (Intermediate), respectively, as of the Closing
Date. Short-Intermediate will then be liquidated as soon as
practicable thereafter. Approval of the Reorganization will be
determined by the shareholders of each of the three classes of shares
of Short-Intermediate voting in the aggregate. The number of votes
each shareholder is entitled to is based on the dollar value of their
investment.
The funds have received an opinion of counsel that, except with
respect to Section 1256 contracts, the Reorganization will not result
in any gain or loss for Federal income tax purposes either to
Short-Intermediate or Intermediate or to the shareholders of any fund.
The rights and privileges of the former shareholders of
Short-Intermediate will be effectively unchanged by the
Reorganization.
COMPARATIVE FEE TABLES
Each fund pays an identical management fee to FMR for managing its
investments and business affairs which is calculated and paid to FMR
every month. The management fee is calculated by adding a group fee
rate to an individual fund fee rate and multiplying the result by each
fund's average net assets. The group fee rate is based on the average
net assets of all mutual funds advised by FMR.
In addition, each class of each fund also incurs other expenses for
services such as maintaining shareholder records and furnishing
shareholder statements and financial reports.
The following tables show (i) the shareholder transaction expenses
that each shareholder of each class of Short-Intermediate and
Intermediate currently incurs, and the shareholder transaction
expenses that shareholders of each class of the combined fund will
incur after giving effect to the Reorganization, (ii) the current fees
and expenses of Class A, Class T, and Institutional Class of
Short-Intermediate and Intermediate for the 12 months ended November
30, 1997, and pro forma fees for the combined fund and classes based
on the same time period after giving effect to the Reorganization,
including the effect of FMR's voluntary expense limitation for Class
A, Class T, and Institutional Class of the combined fund of 0.90%,
0.90%, and 0.75%, respectively, of average net assets (excluding
interest, taxes, brokerage commissions and extraordinary expenses),
and (iii) the current fees and expenses of Class A, Class T, and
Institutional Class of Short-Intermediate and Intermediate for the 12
months ended November 30, 1997, and pro forma fees for the combined
fund and classes based on the same time period after giving effect to
the Reorganization, excluding the effect of FMR's voluntary expense
limitation for Class A, Class T, and Institutional Class. Net expenses
include the effect of any applicable voluntary expense limitation and
gross expenses do not include the effect of any applicable voluntary
expense limitation. The current voluntary expense cap for Class T of
Intermediate is 1.00%; FMR will lower the voluntary expense cap of
Class T of the combined fund to 0.90% if the Reorganization is
approved beginning on the first business day after the Closing Date of
the Reorganization. For more information about the funds' current
fees, refer to their prospectuses.
SHAREHOLDER TRANSACTION AND ANNUAL FUND OPERATING EXPENSES
Shareholder transaction expenses are charges that shareholders may
pay when they buy or sell shares of a fund.
Annual fund operating expenses are paid out of each fund's assets.
Expenses are factored into each class's share price or dividends and
are not charged directly to shareholder accounts. The following
figures are based on historical expenses of each class of each fund
and are calculated as a percentage of average net assets of the
applicable class of each fund.
CLASS A
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Short-Intermediate Intermediate Combined Fund
Maximum sales charge (as a % of offering 1.50% 3.75% 3.75%
price) on purchases
Maximum CDSC (as a % of the lesser of none[A] none[A] none[A]
original purchase price or redemption proceeds)
Annual account maintenance fee (for accounts $12.00 $12.00 $12.00
under $2,500)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Short-Intermediate Intermediate Combined Fund
Net Expenses Net Expenses Net Expenses
Management fee 0.39% 0.39% 0.39%
12b-1 fee 0.15% 0.15% 0.15%
Other Expenses (after reimbursement) 0.36% 0.36% 0.36%
TOTAL OPERATING EXPENSES 0.90% 0.90% 0.90%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Short-Intermediate Intermediate Combined Fund
Gross Expenses Gross Expenses Gross Expenses
Management fee 0.39% 0.39% 0.39%
12b-1 fee 0.15% 0.15% 0.15%
Other Expenses 8.86% 8.83% 2.72%
TOTAL OPERATING EXPENSES 9.40% 9.37% 3.26%
</TABLE>
CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Short-Intermediate Intermediate Combined Fund
Maximum sales charge (as a % of offering 1.50% 2.75% 2.75%
price) on purchases
Maximum CDSC (as a % of the lesser of None[A] None[A] None[A]
original purchase price or redemption proceeds)
Annual account maintenance fee (for accounts $12.00 $12.00 $12.00
under $2,500)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Short-Intermediate Intermediate Combined Fund
Net Expenses Net Expenses Net Expenses
Management fee 0.39% 0.39% 0.39%
12b-1 fee 0.15% 0.25% 0.25%
Other Expenses (after reimbursement) 0.36% 0.36% 0.26%
TOTAL OPERATING EXPENSES 0.90% 1.00% 0.90%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Short-Intermediate Intermediate Combined Fund
Gross Expenses Gross Expenses Gross Expenses
Management fee 0.39% 0.39% 0.39%
12b-1 fee 0.15% 0.25% 0.25%
Other Expenses 0.69% 0.40% 0.37%
TOTAL OPERATING EXPENSES 1.23% 1.04% 1.01%
</TABLE>
INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Short-Intermediate Intermediate Combined Fund
Maximum sales charge (as a % of offering None None
price) on purchases None
Maximum CDSC (as a % of the lesser of None None None
original purchase price or redemption proceeds)
Annual account maintenance fee (for accounts $12.00 $12.00 $12.00
under $2,500)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Short-Intermediate Intermediate Combined Fund
Net Expenses Net Expenses Net Expenses
Management fee 0.39% 0.39% 0.39%
12b-1 fee None None None
Other Expenses (after reimbursement) 0.36% 0.36% 0.36%
TOTAL OPERATING EXPENSES 0.75% 0.75% 0.75%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Short-Intermediate Intermediate Combined Fund
Gross Expenses Gross Expenses Gross Expenses
Management fee 0.39% 0.39% 0.39%
12b-1 fee None None None
Other Expenses 3.84% 0.58% 0.48%
TOTAL OPERATING EXPENSES 4.23% 0.97% 0.87%
</TABLE>
[A] A CDSC OF 0.25% IS ASSESSED ON CERTAIN REDEMPTIONS OF CLASS A AND
CLASS T SHARES ON WHICH A FINDER'S FEE WAS PAID.
Expenses eligible for reimbursement do not include interest, taxes,
brokerage commissions, and extraordinary expenses.
EXAMPLES OF EFFECT OF FUND EXPENSES
The following table illustrates the expenses on a hypothetical $1,000
investment in each class of each fund under the current and pro forma
(combined fund) expenses calculated at the rates stated above,
assuming a 5% annual return and full redemption at the end of each
time period. Total expenses shown below include shareholder
transaction expenses, such as each fund's current maximum front-end
sales charge and a class's annual operating expenses.
Class A Class T Institutional
Class
SHORT-INTERMEDIATE 1 year $ 24 $ 24 $ 8
3 years $ 43 $ 43 $ 24
5 years $ 64 $ 64 $ 42
10 years $ 124 $ 124 $ 93
INTERMEDIATE 1 year $ 46 $ 37 $ 8
3 years $ 65 $ 58 $ 24
5 years $ 85 $ 81 $ 42
10 years $ 144 $ 147 $ 93
COMBINED FUND 1 year $ 46 $ 36 $ 8
3 years $ 65 $ 55 $ 24
5 years $ 85 $ 76 $ 42
10 years $ 144 $ 135 $ 93
These examples assume that all dividends and other distributions are
reinvested and that the percentage amounts listed under Annual Fund
Operating Expenses remain the same in the years shown. These examples
illustrate the effect of expenses, but are not meant to suggest actual
or expected expenses, which may vary. The assumed return of 5% is not
a prediction of, and does not represent, actual or expected
performance of any class.
FORMS OF ORGANIZATION
Short-Intermediate, a non-diversified fund, and Intermediate, a
diversified fund, are funds of Fidelity Advisor Series VI, an open-end
management investment company organized as a Massachusetts business
trust on June 1, 1983. The trust is authorized to issue an unlimited
number of shares of beneficial interest. Because the funds are series
of the same Massachusetts business trust, the rights of the security
holders of Short-Intermediate under state law and the governing
documents are expected to remain unchanged after the Reorganization.
For more information regarding shareholder rights, refer to the
section of the fund's Statement of Additional Information called
"Description of the Trust."
INVESTMENT OBJECTIVES AND POLICIES
The funds have substantially similar investment objectives and
policies in that both seek high current income free from federal
income tax in a manner consistent with the preservation of capital by
investing in investment-grade municipal securities. Short-Intermediate
is a non-diversified fund and Intermediate is a diversified fund. As a
non-diversified fund, Short-Intermediate can invest a greater portion
of its assets in securities of individual issuers than Intermediate.
As a matter of fundamental policy, each fund invests at least 80% of
its assets in securities whose interest is free from federal income
tax. Additionally, Short-Intermediate and Intermediate may invest all
of their assets in municipal securities issued to finance private
securities. The interest from these securities is a tax-preference
item for purposes of the AMT.
The funds differ in their average maturity policies.
Short-Intermediate normally maintains an average maturity of between
two and five years. Intermediate normally maintains an average
maturity of between three and 10 years. As of November 30, 1997, the
average maturities of Short-Intermediate and Intermediate were 3.2
years and 7.6 years, respectively. Additionally, FMR generally manages
Intermediate to have the same interest rate sensitivity as municipal
bonds with maturities between seven and 10 years.
Each of Short-Intermediate and Intermediate normally invests only in
investment-grade securities but reserves the right to invest up to 5%
of its assets in below investment-grade bonds. As of November 30,
1997, both funds held only investment-grade securities. Each fund
currently can invest all of its assets in securities subject to the
AMT. As of November 30, 1997, 19.53% of Short-Intermediate's and 8.72%
of Intermediate's exempt-interest dividends were subject to the AMT.
The investment objective of each fund is fundamental and may not be
changed without the approval of a vote of at least a majority of the
outstanding voting securities of the fund. There can be no assurance
that either fund will achieve its objective. With the exception of
fundamental policies, investment policies of the funds can be changed
without shareholder approval. The differences between the funds
discussed above, except as noted, could be changed without a vote of
shareholders.
PERFORMANCE COMPARISONS OF THE FUNDS
Intermediate has generally experienced superior performance to
Short-Intermediate as shown below. The differential in performance can
be attributed primarily to the funds' historical differences in
portfolio holdings resulting from differences in investment policies
regarding average maturity. See "Comparison of Principal Risk Factors"
for more information on average maturity. The following table compares
the funds' year-by-year calendar total returns (excluding the effect
of sales loads) and cumulative total returns for Class T of each fund
for the periods indicated (both including and excluding the effect of
sales loads ). As the only class of shares offered by both funds
with three years of operating history, Class T was chosen to represent
performance. Please note that total returns are based on past results
and are not an indication of future performance.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Year-by-Year Calendar Total Returns
1994* 1995 1996 1997**
Short-Intermediate Class T 1.26% 8.68% 3.64% 4.44%
Intermediate Class T -2.64% 14.20% 3.89% 6.51%
</TABLE>
Cumulative Total Returns
3/16/94 - 11/30/97
Short-Intermediate Class T 19.12%
Short-Intermediate Class T (load adjusted) 17.33%
Intermediate Class T 23.03%
Intermediate Class T (load adjusted) 19.64%
* From March 16, 1994 (commencement of operations of Class T of
Short-Intermediate).
** Through November 30, 1997.
If FMR had not reimbursed certain class expenses, the total returns
would have been lower.
The following graph shows the value of a hypothetical $10,000
investment in Class T of each fund made on March 16, 1994 through
November 30, 1997 assuming all distributions are reinvested. The graph
compares the cumulative returns of Class T of each fund during this
period.
--- Short-Intermediate - Class T Intermediate - Class
T
12,303
11,912
FA Short-Int M FA Int -CL T
00636 00289
1994/03/16 10000.00 10000.00
1994/03/31 9978.52 9761.40
1994/04/30 10002.48 9847.80
1994/05/31 10019.99 9935.94
1994/06/30 10040.97 9864.53
1994/07/31 10122.63 10001.97
1994/08/31 10155.62 10039.76
1994/09/30 10127.57 9927.35
1994/10/31 10092.72 9776.40
1994/11/30 10027.44 9562.77
1994/12/31 10125.91 9735.87
1995/01/31 10265.89 9980.83
1995/02/28 10372.72 10234.13
1995/03/31 10443.56 10346.08
1995/04/30 10461.67 10343.11
1995/05/31 10606.60 10579.34
1995/06/30 10602.87 10522.50
1995/07/31 10693.89 10591.00
1995/08/31 10795.12 10734.15
1995/09/30 10831.87 10802.73
1995/10/31 10900.39 10917.95
1995/11/30 10967.86 11043.76
1995/12/31 11004.78 11117.97
1996/01/31 11084.81 11192.16
1996/02/29 11087.22 11155.59
1996/03/31 11037.08 11045.81
1996/04/30 11040.09 11010.54
1996/05/31 11044.99 11009.35
1996/06/30 11103.22 11094.32
1996/07/31 11162.36 11180.89
1996/08/31 11177.81 11180.09
1996/09/30 11237.17 11277.47
1996/10/31 11309.24 11397.90
1996/11/30 11412.79 11583.34
1996/12/31 11405.60 11550.29
1997/01/31 11444.01 11571.39
1997/02/28 11501.80 11666.31
1997/03/31 11439.48 11528.32
1997/04/30 11488.47 11615.00
1997/05/31 11562.45 11748.73
1997/06/30 11624.33 11859.02
1997/07/31 11779.51 12153.39
1997/08/31 11749.72 12047.67
1997/09/30 11822.57 12181.98
1997/10/31 11873.44 12237.53
1997/11/28 11911.68 12302.54
COMPARISON OF OTHER POLICIES OF THE FUNDS
DIVERSIFICATION. Short-Intermediate is a non-diversified fund.
Intermediate is a diversified fund. Generally, to meet federal tax
requirements at the close of each quarter, Short-Intermediate does not
invest more than 25% of its total assets in the securities of any one
issuer and, with respect to 50% of total assets, does not invest more
than 5% of its total assets in the securities of any one issuer.
Intermediate, as a matter of fundamental policy, with respect to 75%
of total assets, may not purchase a security if, as a result, more
than 5% would be invested in the securities of any issuer. Because
Short-Intermediate can invest a greater portion of its assets in
securities of individual issuers than Intermediate, changes in the
market value of a single issuer could cause greater share-price
fluctuation in Short-Intermediate than would occur in a diversified
fund such as Intermediate.
OTHER INVESTMENT POLICIES. Each fund may borrow from banks or other
funds advised by FMR, or through reverse repurchase agreements. As a
matter of fundamental policy, each fund may borrow only for temporary
or emergency purposes, but not in an amount exceeding 33 1/3% of its
total assets.
FMR normally invests each fund's assets according to its investment
strategy and does not expect to invest in federally taxable
obligations. However, each fund reserves the right to invest without
limitation in short-term instruments, to hold a substantial amount of
uninvested cash, or to invest more than normally permitted in taxable
obligations for temporary, defensive purposes. Each fund may also
enter into when-issued and forward purchase or sale transactions,
invest in asset-backed securities, variable and floating rate
securities, municipal lease obligations, securities with put features,
private entity securities, and illiquid and restricted securities.
Both funds have identical investment policies regarding issuing senior
securities, underwriting, concentration, real estate, commodities, and
securities lending. Additionally, Intermediate may not invest in
companies for the purposes of exercising control or management.
As stated above, for more information about the risks and
restrictions associated with these policies, see each fund's
Prospectus, and for a more detailed discussion of the funds'
investments, see their Statements of Additional Information, which are
incorporated herein by reference.
OPERATIONS OF INTERMEDIATE FOLLOWING THE REORGANIZATION
FMR does not expect Intermediate to revise its investment policies as
a result of the Reorganization. In addition, FMR does not anticipate
significant changes to the fund's management or to agents that provide
the fund with services. Specifically, the Trustees and officers, the
investment adviser, distributor, and other agents will continue to
serve Intermediate in their current capacities. Norm Lind, who is
currently the Portfolio Manager of Intermediate , is expected to
continue to be responsible for portfolio management after the
Reorganization.
All of the current investments of Short-Intermediate are permissible
investments for Intermediate. As explained above, however,
Short-Intermediate maintains a shorter average maturity than
Intermediate. If shareholders approve the Reorganization, FMR may sell
certain of Short-Intermediate's securities and invest in securities
with longer maturities during the period between shareholder approval
and the Closing Date of the Reorganization. As a result, the average
maturity of Short-Intermediate may exceed its average maturity policy
of between two and five years during that period. Transaction costs
associated with portfolio adjustments to Short-Intermediate and
Intermediate due to the Reorganization that occur prior to the Closing
Date will be borne by Short-Intermediate and Intermediate,
respectively. Transaction costs associated with portfolio adjustments
to Short-Intermediate and Intermediate due to the Reorganization that
occur after the Closing Date will be borne by Intermediate. The funds
may recognize a taxable gain or loss on the disposition of securities
pursuant to these portfolio adjustments. See the section entitled
"Reasons for the Reorganization."
PURCHASES AND REDEMPTIONS
Except for the differences in sales charges across classes, the
purchase and redemption policies for Class A, Class T, and
Institutional Class of Short-Intermediate and Intermediate are
identical.
The price to buy one share of Class A or Class T of each fund is the
class's offering price or the class's net asset value per share (NAV),
depending on whether you pay a front-end sales charge. The price to
buy one share of Institutional Class of each fund is the class's NAV.
Shares are purchased at the next NAV or offering price, as applicable,
calculated after your order is received in proper form. Each class's
offering price or NAV, as applicable, is normally calculated each
business day at 4:00 p.m. Eastern time. Refer to each class's
Prospectus for more information on how to buy shares.
The price to sell one share of each class is the class's NAV, minus
any applicable CDSC. Shares are sold at the next NAV, minus any
applicable CDSC, calculated after your order is received in proper
form, normally each business day at 4:00 p.m. Eastern time.
It is the responsibility of your investment professional to transmit
your order to buy or sell shares to Fidelity before the close of
business on the day you place your order.
On January 1, 1998, Short-Intermediate closed to new accounts pending
the Reorganization. Short-Intermediate shareholders on or prior to
that date can continue to purchase shares of their respective class of
the fund. Shareholders of Short-Intermediate may redeem shares through
the Closing Date. If the Reorganization is approved, the purchase and
redemption policies of the combined fund will remain unchanged. For
Short-Intermediate Class A or Class T purchases in the amount of $1
million or more, investment professionals will be compensated with a
finder's fee at the rate of 0.25% of the purchase amount. Any assets
on which a finder's fee was paid will bear a contingent deferred sales
charge (CDSC) if they do not remain in Class A or Class T shares of
the Fidelity Advisor funds, or Daily Money Class shares of Treasury
Fund, Prime Fund, and Tax-Exempt Fund, for a period of at least one
uninterrupted year. Refer to each class's Prospectus for more
information regarding how to exchange shares.
EXCHANGES
The exchange privilege currently offered by each corresponding class
of Short-Intermediate and Intermediate is the same and is not expected
to change after the Reorganization. Class A and Class T shares of
Short-Intermediate and Intermediate may be exchanged for the same
class of shares of other Fidelity Advisor funds or Daily Money Class
shares of Treasury Fund, Prime Fund, and Tax-Exempt Fund.
Institutional Class shares may be exchanged for Institutional Class
shares of other Fidelity Advisor funds or shares of other Fidelity
funds. Shareholders may exchange only into a class or fund that is
available for sale in the shareholder's state. Exchanges out of a fund
are limited to four per calendar year. Neither fund currently imposes
a redemption fee. For Short-Intermediate Class A or Class T purchases
in the amount of $1 million or more, investment professionals will be
compensated with a finder's fee at the rate of 0.25% of the purchase
amount. Any assets on which a finder's fee was paid will bear a
contingent deferred sales charge (CDSC) if they do not remain in Class
A or Class T shares of the Fidelity Advisor funds, or Daily Money
Class shares of Treasury Fund, Prime Fund, and Tax-Exempt Fund, for a
period of at least one uninterrupted year. Refer to each class's
Prospectus for more information regarding how to exchange shares.
DIVIDENDS AND OTHER DISTRIBUTIONS
Each fund distributes substantially all of its net investment income
and capital gains to shareholders each year. Each fund declares income
dividends daily and pays them monthly. Each fund pays capital gains,
if any, in December. On or before the Closing Date, Short-Intermediate
may declare additional dividends or other distributions in order to
distribute substantially all of its investment company taxable income
and net realized capital gain.
Short-Intermediate will be required to recognize gain or loss on
Section 1256 contracts held by the individual fund on the last day of
its taxable year which is November 30. If the Reorganization is
approved, gains or losses of Section 1256 contracts held on the
Closing Date will be recognized on the Closing Date.
FEDERAL INCOME TAX CONSEQUENCES OF THE REORGANIZATION
Each fund has received an opinion of its counsel, Kirkpatrick &
Lockhart LLP, that the Reorganization will constitute a tax-free
reorganization within the meaning of Section 368(a)(1)(C) of the
Internal Revenue Code of 1986, as amended (the Code). Accordingly,
except with respect to Section 1256 contracts, no gain or loss will be
recognized to the funds or their shareholders as a result of the
Reorganziation. Please see the section entitled "Federal Income Tax
Considerations" for more information.
As of November 30, 1997, neither Short-Intermediate nor Intermediate
had capital loss carryforwards for federal income tax purposes.
COMPARISON OF PRINCIPAL RISK FACTORS
Each fund is subject to the risks normally associated with bond
funds. As described more fully above, the funds have similar
investment objectives, policies, and permissible investments. The
principal risk factors associated with each fund are set forth below.
INVESTMENT STRATEGY. As noted above, Short-Intermediate maintains a
shorter average maturity than Intermediate. FMR generally manages
Intermediate so that it generally reacts to changes in interest rates
similarly to municipal bonds with maturities between seven and 10
years. Interest rate sensitivity refers to how much a fund is affected
by changes in interest rates. Generally, bond prices go down when
interest rates go up and vice versa. The effects of interest rate
sensitivity are more pronounced for longer-term securities, and
therefore, more pronounced for funds which invest in longer-term
securities. Thus, Intermediate may have better performance than
Short-Intermediate during periods of falling interest rates but may
have worse performance during periods of rising interest rates.
Short-Intermediate and Intermediate currently intend to invest only
in investment-grade securities. Each fund, however, has the ability to
invest up to 5% of its assets in below investment-grade securities.
Although these securities may provide the potential for significant
price appreciation, it is important to note that they are considered
to have speculative characteristics, and involve greater risk of
default or price changes due to changes in the issuer's
creditworthiness, or such securities may already be in default. The
market prices of these securities may fluctuate more than
higher-quality securities and may decline significantly in periods of
uncertain general or regional economic activity.
DIVERSIFICATION. Diversifying a fund's investment portfolio can
reduce the risks of investing. Diversification may include limiting
the amount of money invested in any one issuer. A fund that is not
diversified may be more sensitive to changes in the market value of a
single issuer. Short-Intermediate is a non-diversified fund.
Intermediate is a diversified fund. As a non-diversified fund,
Short-Intermediate can invest a greater portion of its assets in
securities of individual issuers than Intermediate and may be subject
to greater share price fluctuation.
THE PROPOSED TRANSACTION
1. TO APPROVE AN AGREEMENT AND PLAN OF REORGANIZATION BETWEEN
SHORT-INTERMEDIATE AND INTERMEDIATE.
REORGANIZATION PLAN
The terms and conditions under which the proposed transaction may be
consummated are set forth in the Agreement. Significant provisions of
the Agreement are summarized below; however, this summary is qualified
in its entirety by reference to the Agreement, a copy of which is
attached at Exhibit 1 to this Proxy Statement.
The Agreement contemplates (a) Intermediate acquiring as of the
Closing Date all of the assets of Short-Intermediate in exchange
solely for Class A, Class T, and Institutional Class shares of
Intermediate (Intermediate Class Shares) in each case based on the net
asset value attributable to the corresponding class of
Short-Intermediate and the assumption by Intermediate of
Short-Intermediate's liabilities; and (b) the distribution of
Intermediate Class Shares to shareholders of the corresponding class
of Short-Intermediate as provided for in the Agreement.
The assets of Short-Intermediate to be acquired by Intermediate
include all cash, cash equivalents, securities, receivables (including
interest or dividends receivables), claims, choses in action, and
other property owned by Short-Intermediate, and any deferred or
prepaid expenses shown as an asset on the books of Short-Intermediate
on the Closing Date. Intermediate will assume from Short-Intermediate
all liabilities, debts, obligations, and duties of Short-Intermediate
of whatever kind or nature, whether absolute, accrued, contingent, or
otherwise, whether or not arising in the ordinary course of business,
whether or not determinable on the Closing Date, and whether or not
specifically referred to in the Agreement; provided, however, that
Short-Intermediate will use its best efforts, to the extent
practicable, to discharge all of its known liabilities prior to the
Closing Date, other than liabilities incurred in the ordinary course
of business. Intermediate also will deliver to Short-Intermediate the
number of full and fractional Intermediate Class Shares having a net
asset value equal to the value of the net assets of the corresponding
class of Short-Intermediate less the liabilities of Short-Intermediate
as of the Closing Date.
The value of Short-Intermediate's assets to be acquired by
Intermediate and the amount of its liabilities to be assumed by
Intermediate will be determined as of the close of business of the New
York Stock Exchange on the Closing Date, using the valuation
procedures set forth in the then-current Prospectus and Statement of
Additional Information of each class of Short-Intermediate. The net
asset values per share of the Intermediate Class Shares will be
determined as of the same time using the valuation procedures set
forth in the then-current Prospectus and Statement of Additional
Information of each class.
As of the Closing Date, Short-Intermediate will distribute to its
shareholders of record the Intermediate Class A, Class T, and
Institutional Class shares it received, so that each shareholder of
the corresponding class of Short-Intermediate will receive the number
of full and fractional Class A, Class T, and Institutional Class
shares of Intermediate equal in value to the net asset value of shares
of the corresponding class of Short-Intermediate held by such
shareholder on the Closing Date; Short-Intermediate will be liquidated
as soon as practicable thereafter. Such distribution will be
accomplished by opening accounts on the books of Intermediate in the
names of the Short-Intermediate shareholders and by transferring
thereto the Intermediate Class Shares. Shareholders of Class A, Class
T, and Institutional Class of Short-Intermediate will receive shares
of the corresponding class of Intermediate equal in value to the
shares of Short-Intermediate they are surrendering, based upon the
relative net asset values of Class A (Short-Intermediate) to Class A
(Intermediate), Class T (Short-Intermediate) to Class T
(Intermediate), and Institutional Class (Short-Intermediate) to
Institutional Class (Intermediate), respectively, as of the Closing
Date. Each Short-Intermediate shareholder's account shall be credited
with the respective number of full and fractional Intermediate Class
Shares (rounded to the third decimal place) due that shareholder.
Intermediate shall not issue certificates representing its shares in
connection with such exchange.
Accordingly, immediately after the Reorganization, each former
Short-Intermediate Class A, Class T, and Institutional Class
shareholder will own shares of Class A, Class T, and Institutional
Class, respectively, of Intermediate equal to the net asset value of
that shareholder's shares of Class A, Class T, and Institutional Class
of Short-Intermediate immediately prior to the Reorganization. The net
asset value per share of each class of Intermediate will be unchanged
by the transaction. Thus, the Reorganization will not result in a
dilution of any shareholder interest.
Any transfer taxes payable upon issuance of Intermediate Class Shares
in a name other than that of the registered holder of the shares on
the books of Short-Intermediate as of that time shall be paid by the
person to whom such shares are to be issued as a condition of such
transfer. Any reporting responsibility of Short-Intermediate is and
will continue to be its responsibility up to and including the Closing
Date and such later date on which Short-Intermediate is liquidated.
Short-Intermediate will bear the cost of the Reorganization,
including professional fees, expenses associated with the filing of
registration statements, and the cost of soliciting proxies for the
Meeting, which will consist principally of printing and mailing
prospectuses and proxy statements, together with the cost of any
supplementary solicitation, provided that these expenses do not exceed
each class's expense cap. Any merger-related costs that may be
attributable to Intermediate will be borne by Intermediate, provided
that they do not exceed each class's expense cap. Expenses exceeding
each class's expense cap will be borne by FMR. However, there may be
some transaction costs associated with portfolio adjustments to
Short-Intermediate and Intermediate due to the Reorganization prior to
the Closing Date which will be borne by Short-Intermediate and
Intermediate, respectively. Any transaction costs associated with
portfolio adjustments to Short-Intermediate and Intermediate due to
the Reorganization that occur after the Closing Date will be borne by
Intermediate. The funds may recognize a taxable gain or loss on the
disposition of securities pursuant to these portfolio adjustments. See
the section entitled "Reasons for the Reorganization."
The consummation of the Reorganization is subject to a number of
conditions set forth in the Agreement, some of which may be waived by
a fund. In addition, the Agreement may be amended in any mutually
agreeable manner, except that no amendment that may have a materially
adverse effect on the shareholders' interests may be made subsequent
to the meeting.
REASONS FOR THE REORGANIZATION
The Board of Trustees (the Board) of each fund has determined that
the Reorganization is in the best interests of the shareholders of
both funds and that the Reorganization will not result in a dilution
of the interests of shareholders of either fund.
In considering the Reorganization, the Boards considered a number of
factors, including the following:
(1) the compatibility of the funds' investment objectives and
policies;
(2) the historical performance of each class of the funds;
(3) the relative expense ratios of each class of the funds;
(4) the costs to be incurred by each fund as a result of the
Reorganization;
(5) the tax consequences of the Reorganization;
(6) the relative size of the funds;
(7) the elimination of similar funds;
(8) the impact of changes to the municipal bond product line on the
funds and their shareholders; and
(9) the benefit to FMR and to the shareholders of the funds.
FMR recommended the Reorganization to the Board at a meeting of the
Board on November 20, 1997. In recommending the Reorganization, FMR
also advised the Board that the funds have similar investment
objectives, policies, and permissible investments. In particular, FMR
informed the Board that the funds differed primarily with respect to
their average maturity policies, the classes they offer, and the
class-level expenses they incur.
The Board also considered that former shareholders of
Short-Intermediate will receive Intermediate Class Shares equal to the
value of their shares in the corresponding class of
Short-Intermediate. In addition, the funds have received an opinion of
counsel that, except with respect to Section 1256 contracts, the
Reorganization will not result in any gain or loss for federal income
tax purposes either to Short-Intermediate or Intermediate or to the
shareholders of either fund.
Furthermore, on November 20, 1997, the Board considered that the
proposed Reorganization would provide shareholders of
Short-Intermediate with a fund with better overall historical
performance and that combining the funds is anticipated to result in
lower gross expenses. The Board also considered that the risk of
Short-Intermediate's small asset level could eventually lead to higher
expenses through an increase in the voluntary expense caps. The Board
considered FMR's representation to the Board that if the
Reorganization is approved, it would lower the voluntary expense cap
for Class T of the combined fund from 1.00% to 0.90% so that the
expenses incurred by shareholders of Class T of Short-Intermediate
would not increase as a result of the Reorganization. The Board was
informed that Class T of the combined fund would continue to pay a
0.25% 12b-1 fee. The Board was informed that any expenses associated
with the Reorganization, including professional fees, and any
additional merger-related costs directly attributable to
Short-Intermediate would be borne by Short-Intermediate, provided that
they do not exceed each class's expense cap. The Board was informed
that any merger-related costs, including professional fees, directly
attributable to Intermediate would be borne by Intermediate, provided
that they do not exceed each class's expense cap.
Finally, the Board considered the proposed Reorganization in the
context of a general goal of reducing the number of duplicative funds
managed by FMR. While the reduction of similar funds and funds with
lower assets potentially would benefit FMR, it should also benefit
shareholders by facilitating increased operational efficiencies.
DESCRIPTION OF THE SECURITIES TO BE ISSUED
Fidelity Advisor Series VI (the trust) is registered with the
Securities and Exchange Commission (the Commission) as an open-end
management investment company. The trust's Trustees are authorized to
issue an unlimited number of shares of beneficial interest of separate
series. Intermediate and Short-Intermediate are the only funds of the
trust. Each share of each class of Intermediate represents an equal
proportionate interest with each other share of each class of the
fund, and each such share of each class of Intermediate is entitled to
equal voting, dividend, liquidation, and redemption rights as each
other share of the same class. Shareholders of Class B of Intermediate
are entitled to vote on amendments to the Distribution and Service
Plan of Class A of Intermediate, if such amendments materially
increase the expenses of Class A. Each shareholder of the fund is
entitled to one vote for each dollar of net asset value of the class
of the fund that the shareholder owns. Shares of Intermediate have no
preemptive or conversion rights (other than shares of Class B of
Intermediate that convert to shares of Class A of Intermediate after
four years). The voting and dividend rights, the right of redemption,
and the privilege of exchange are described in the Prospectuses of
each class of Intermediate. Shares are fully paid and nonassessable,
except as set forth in the fund's Statement of Additional Information
under the heading "Shareholder and Trustee Liability."
The trust does not hold annual meetings of shareholders. There will
normally be no meetings of shareholders for the purpose of electing
Trustees unless less than a majority of the Trustees holding office
have been elected by shareholders, at which time the Trustees then in
office will call a shareholder meeting for the election of Trustees.
Under the 1940 Act, shareholders of record of at least two-thirds of
the outstanding shares of an investment company may remove a Trustee
by votes cast in person or by proxy at a meeting called for that
purpose. The Trustees are required to call a meeting of shareholders
for the purpose of voting upon the question of removal of any Trustee
when requested in writing to do so by the shareholders of record
holding at least 10% of the trust's outstanding shares.
FEDERAL INCOME TAX CONSIDERATIONS
The exchange of Short-Intermediate's assets for Intermediate Class
Shares and the assumption of the liabilities of Short-Intermediate by
Intermediate is intended to qualify for federal income tax purposes as
a tax-free reorganization under the Code. With respect to the
Reorganization, the participating funds have received an opinion from
Kirkpatrick & Lockhart LLP, counsel to Short-Intermediate and
Intermediate, substantially to the effect that:
(i) The acquisition by Intermediate of all of the assets of
Short-Intermediate solely in exchange for Intermediate Class Shares
and the assumption by Intermediate of Short-Intermediate's
liabilities, followed by the distribution by Short-Intermediate of
Intermediate Class Shares to shareholders of the corresponding class
of Short-Intermediate pursuant to the liquidation of
Short-Intermediate and constructively in exchange for their
Short-Intermediate shares, will constitute a reorganization within the
meaning of section 368(a)(1)(C) of the Code, and Short-Intermediate
and Intermediate will each be "a party to a reorganization" within the
meaning of section 368(b) of the Code;
(ii) No gain or loss will be recognized by Short-Intermediate upon
the transfer of all of its assets to Intermediate in exchange solely
for Intermediate Class Shares and Intermediate's assumption of
Short-Intermediate's liabilities, followed by Short-Intermediate's
subsequent distribution of those shares to shareholders of the
corresponding class in liquidation of Short-Intermediate;
(iii) No gain or loss will be recognized by Intermediate upon the
receipt of the assets of Short-Intermediate in exchange solely for
Intermediate Class Shares and its assumption of Short-Intermediate's
liabilities;
(iv) The shareholders of each class of Short-Intermediate will
recognize no gain or loss upon the exchange of their
Short-Intermediate shares solely for Intermediate Class Shares of the
corresponding class;
(v) The basis of Short-Intermediate's assets in the hands of
Intermediate will be the same as the basis of those assets in the
hands of Short-Intermediate immediately prior to the Reorganization,
and the holding period of those assets in the hands of Intermediate
will include the holding period of those assets in the hands of
Short-Intermediate;
(vi) The basis of Short-Intermediate shareholders in Intermediate
Class Shares will be the same as their basis in Short-Intermediate
shares of the corresponding class to be surrendered in exchange
therefor; and
(vii)The holding period of the Intermediate Class Shares to be
received by the Short-Intermediate shareholders will include the
period during which the Short-Intermediate shares of the corresponding
class to be surrendered in exchange therefor were held, provided such
Short-Intermediate shares were held as capital assets by those
shareholders on the date of the Reorganization.
Shareholders of Short-Intermediate should consult their tax advisers
regarding the effect, if any, of the proposed Reorganization in light
of their individual circumstances. Because the foregoing discussion
only relates to the federal income tax consequences of the
Reorganization, those shareholders also should consult their tax
advisers as to state and local tax consequences, if any, of the
Reorganization.
CAPITALIZATION
The following table shows the capitalization of each class of each
fund as of November 30, 1997 and on a pro forma combined basis
(unaudited) as of that date giving effect to the Reorganization.
Net Assets Net Asset Shares
Value Outstanding
Per Share
Short-Intermediate
Class A $ 639,381 $ 10.20 62,680
Class T $ 21,916,347 $ 10.21 2,147,471
Institutional Class $ 635,846 $ 10.21 62,284
Intermediate
Class A $ 441,602 $ 10.60 41,679
Class T $ 48,830,052 $ 10.59 4,609,444
Institutional Class $ 6,097,562 $ 10.59 575,743
Class B $ 7,916,605 $ 10.59 747,589
Class C $ 12,572 $ 10.59 1,187
Pro Forma Combined Fund
Class A $ 1,080,983 $ 10.60 101,998
Class T $ 70,746,399 $ 10.59 6,678,976
Institutional Class $ 6,733,408 $ 10.59 635,785
Class B $ 7,916,605 $ 10.59 747,589
Class C $ 12,572 $ 10.59 1,187
CONCLUSION
The Agreement and Plan of Reorganization and the transactions
provided for therein were approved by the Board at a meeting held on
November 20, 1997. The Board of Trustees of Fidelity Advisor Series VI
determined that the proposed Reorganization is in the best interests
of shareholders of each fund and that the interests of existing
shareholders of Short-Intermediate and Intermediate would not be
diluted as a result of the Reorganization. In the event that the
Reorganization is not consummated, Short-Intermediate will continue to
engage in business as a fund of a registered investment company and
FMR and the Board of Fidelity Advisor Series VI will consider other
proposals concerning the fund, including possible increase or removal
of the voluntary expense caps and proposals for the reorganization or
liquidation of the fund.
ADDITIONAL INFORMATION ABOUT INTERMEDIATE
The Prospectus for the applicable class of shares to be offered
(dated February 28, 1998 ) is enclosed with this Proxy
Statement. The Prospectuses for Class A, Class T, and Institutional
Class (both dated February 28, 1998 ) are incorporated herein by
reference. The Prospectuses contain additional information about the
fund including its investment objective and policies, investment
adviser, advisory fees and expenses, organization, and procedures for
purchasing and redeeming shares. The Prospectuses also contain
financial highlights for each class of Intermediate for the fiscal
years ended November 30, as shown below:
FINANCIAL HIGHLIGHTS
INTERMEDIATE MUNICIPAL INCOME - CLASS A
Selected Per-Share Data and
Ratios
Years ended November 30 1997 1996E
Net asset value, beginning $ 10.410 $ 10.160
of period
Income from Investment
Operations
Net interest income .459 .113
Net realized and .191 .250G
unrealized gain (loss)
Total from investment .650 .363
operations
Less Distributions
From net interest income (.459) (.113)
From net realized gain (.001) --
Total distributions (.460) (.113)
Net asset value, end of $ 10.600 $ 10.410
period
Total returnB,C 6.42% 3.59%
Net assets, end of period $ 442 $ 103
(000 omitted)
Ratio of expenses to .90%D .90%A,
average net assets D
Ratio of net interest income 4.37% 4.60%A
to average net assets
Portfolio turnover 18% 35%
INTERMEDIATE MUNICIPAL INCOME - CLASS T
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C>
Selected Per-Share
Data and Ratios
Years ended
1997 1996 1995 1994H 1993 1992F
November 30
Net asset value,
$ 10.410 $ 10.380 $ 9.400 $ 10.460 $ 11.080 $ 11.010
beginning of period
Income from
Investment
Operations
Net interest
.449 .461 .451 .455 .508 .131
income
Net realized and
.181 .030G .980 (1.040) .260 .070
unrealized gain
(loss)
Total from
.630 .491 1.431 (.585) .768 .201
investment
operations
Less Distributions
From net interest
(.449) (.461) (.451) (.455) (.508) (.131)
income
From net realized
(.001) -- -- -- (.880) --
gain
In excess of net
-- -- -- (.020) -- --
realized gain
Total distributions
(.450) (.461) (.451) (.475) (1.388) (.131)
Net asset value, end
$ 10.590 $ 10.410 $ 10.380 $ 9.400 $ 10.460 $ 11.080
of period
Total returnB,C
6.21% 4.89% 15.49% (5.78)% 7.72% 1.37%
Net assets, end of
$ 48,830 $ 56,729 $ 62,852 $ 57,382 $ 39,800 $ 1,752
period (000
omitted)
Ratio of expenses to
1.00%D 1.00%D .94%D .90%D .90%D 1.04%A,D
average net assets
Ratio of net interest
4.32% 4.42% 4.56% 4.49% 4.76% 5.65%A
income to average
net assets
Portfolio turnover
18% 35% 53% 53% 46% 36%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
E FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A
SHARES) TO NOVEMBER 30, 1996.
F FOR THE PERIOD SEPTEMBER 10, 1992 (COMMENCEMENT OF SALE OF CLASS T
SHARES) TO NOVEMBER 30, 1992.
G THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH
THE AGGREGATE NET LOSS ON INVESTMENTS FOR THE PERIOD DUE TO THE TIMING
OF SALES AND REPURCHASES OF CLASS SHARES IN RELATION TO FLUCTUATING
MARKET VALUES OF THE INVESTMENTS OF THE FUND.
H EFFECTIVE DECEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION
93-2, "DISTRIBUTION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION
OF INCOME, CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY
INVESTMENT COMPANIES." AS A RESULT, NET INTEREST INCOME PER SHARE MAY
REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
INTERMEDIATE MUNICIPAL INCOME - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Selected Per-Share
Data and Ratios
Years ended
1997 1996 1995 1994D 1993 1992 1991 1990 1989 1988
November 30
Net asset value,
$ 10.410 $ 10.360 $ 9.410 $ 10.460 $ 11.080 $ 10.800 $ 10.640 $ 10.610 $ 10.520 $ 10.380
beginning of period
Income from
Investment
Operations
Net interest
.475 .487 .477 .481 .536 .666 .682 .689 .674 .650
income
Net realized and
.181 .050E .950 (1.030) .260 .280 .160 .030 .090 .140
unrealized gain
(loss)
Total from
.656 .537 1.427 (.549) .796 .946 .842 .719 .764 .790
investment
operations
Less Distributions
From net interest
(.475) (.487) (.477) (.481) (.536) (.666) (.682) (.689) (.674) (.650)
income
From net realized
(.001) -- -- -- (.880) -- -- -- -- --
gain
In excess of net
- -- -- -- (.020) -- -- -- -- -- --
realized gain
Total distributions
(.476) (.487) (.477) (.501) (1.416) (.666) (.682) (.689) (.674) (.650)
Net asset value, end
$ 10.590 $ 10.410 $ 10.360 $ 9.410 $ 10.460 $ 11.080 $ 10.800 $ 10.640 $ 10.610 $ 10.520
of period
Total returnA
6.48% 5.36% 15.44% (5.43)% 8.01% 9.01% 8.15% 7.04% 7.50% 7.77%
Net assets, end of
$ 6,098 $ 6,455 $ 11,085 $ 11,702 $ 15,076 $ 28,428 $ 100,294 $ 111,506 $ 121,418 $ 132,443
period (000
omitted)
Ratio of expenses to
.75%B .75% .70% .65% .65% .66% .61% .62% .65% .63%
average net assets
B B B B B
Ratio of expenses to
.75% .74%C .70% .65% .65% .66% .61% .62% .65% .63%
average net assets
after expense
reductions
Ratio of net interest
4.57% 4.68% 4.96% 4.75% 5.01% 6.05% 6.40% 6.53% 6.45% 6.20%
income to
average net assets
Portfolio turnover
18% 35% 53% 53% 46% 36% 20% 32% 31% 24%
</TABLE>
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
B FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING
THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
C FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS'
EXPENSES.
D EFFECTIVE DECEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF
POSITION 93-2, "DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT
PRESENTATION OF INCOME, CAPITAL GAINS, AND RETURNS OF CAPITAL
DISTRIBUTIONS BY INVESTMENT COMPANIES." AS A RESULT, NET INTEREST
INCOME PER SHARE MAY REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK
TO TAX DIFFERENCES.
E THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH
THE AGGREGATE NET LOSS ON INVESTMENTS FOR THE PERIOD DUE TO THE TIMING
OF SALES AND REPURCHASES OF CLASS SHARES IN RELATION TO FLUCTUATING
MARKET VALUES OF THE INVESTMENTS OF THE FUND.
MISCELLANEOUS
LEGAL MATTERS. Certain legal matters in connection with the issuance
of Intermediate shares have been passed upon by Kirkpatrick & Lockhart
LLP, counsel to the trust.
EXPERTS. The audited financial statements of Short-Intermediate and
Intermediate incorporated by reference into the Statement of
Additional Information, have been examined by Coopers & Lybrand
L.L.P., independent accountants, whose reports thereon are included in
the Annual Reports to Shareholders for the fiscal year ended November
30, 1997. The financial statements audited by Coopers & Lybrand L.L.P.
have been incorporated by reference in reliance on their reports given
on their authority as experts in auditing and accounting.
AVAILABLE INFORMATION. Fidelity Advisor Series VI is subject to the
informational requirements of the Securities Exchange Act of 1934 and
the 1940 Act, and in accordance therewith file reports, proxy
material, and other information with the SEC. Such reports, proxy
material, and other information can be inspected and copied at the
Public Reference Room maintained by the SEC at 450 Fifth Street, N.W.,
Washington D.C. 20549 and 7 World Trade Center, New York, NY 10048.
Copies of such material can also be obtained from the Public Reference
Branch, Office of Consumer Affairs and Information Services,
Securities and Exchange Commission, Washington D.C. 20549, at
prescribed rates.
NOTICE TO BANKS, BROKER-DEALERS AND VOTING TRUSTEES AND THEIR
NOMINEES. Please advise Fidelity Advisor Series VI, in care of
Fidelity Investments Institutional Operations Company, Inc., 82
Devonshire Street, Boston, Massachusetts 02109, whether other persons
are beneficial owners of shares for which proxies are being solicited
and, if so, the number of copies of the Proxy Statement you wish to
receive in order to supply copies to the beneficial owners of the
respective shares.
ATTACHMENT 1
EXCERPTS FROM ANNUAL REPORTS OF FIDELITY ADVISOR INTERMEDIATE
MUNICIPAL INCOME FUND
DATED NOVEMBER 30, 1997
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
PERIODS ENDED NOVEMBER 30, 1997 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Advisor Intermediate Municipal Income - Class A 6.42% 5.53% 6.70%
Advisor Intermediate Municipal Income - 2.43% 4.72% 6.29%
Class A (incl. max. 3.75% sales charge)
Lehman Brothers 1-17 Year Municipal Bond Index 6.45% n/a n/a
Intermediate Municipal Debt Funds Average 5.50% 6.12% 7.16%
</TABLE>
AVERAGE ANNUAL TOTAL RETURNS take Class A's cumulative return and show
you what would have happened if Class A had performed at a constant
rate each year. The initial offering of Class A shares took place on
September 3, 1996. Class A shares bear a 0.15% 12b-1 fee that is
reflected in returns after September 3, 1996. Returns between
September 10, 1992 (the date Class T shares were first offered) and
September 3, 1996 are those of Class T shares and reflect Class T
shares' 0.25% 12b-1 fee. Returns prior to September 10, 1992 are those
of the Institutional Class, the original class of the fund. Had Class
A shares' 12b-1 fee been reflected, returns prior to September 10,
1992 would have been lower. If Fidelity had not reimbursed certain
class expenses, the total returns and dividends would have been lower.
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19971130 19971212 134507 S00000000000001
FA Int Muni Inc -CL A LB Municipal Bond
00262 LB015
1987/11/30 9625.00 10000.00
1987/12/31 9721.10 10145.10
1988/01/31 10069.70 10506.47
1988/02/29 10110.78 10617.52
1988/03/31 9962.95 10494.36
1988/04/30 10013.04 10574.12
1988/05/31 10044.72 10543.56
1988/06/30 10115.33 10697.81
1988/07/31 10167.96 10767.56
1988/08/31 10172.83 10777.03
1988/09/30 10284.45 10972.10
1988/10/31 10406.80 11165.21
1988/11/30 10372.94 11062.93
1988/12/31 10438.39 11176.11
1989/01/31 10544.03 11407.23
1989/02/28 10481.06 11277.07
1989/03/31 10447.82 11250.12
1989/04/30 10595.49 11517.20
1989/05/31 10753.71 11756.41
1989/06/30 10871.74 11916.06
1989/07/31 10980.23 12078.24
1989/08/31 10944.66 11959.99
1989/09/30 10942.49 11924.35
1989/10/31 11030.25 12070.19
1989/11/30 11150.93 12281.42
1989/12/31 11251.45 12381.88
1990/01/31 11214.75 12323.31
1990/02/28 11314.33 12432.99
1990/03/31 11333.61 12436.72
1990/04/30 11217.06 12346.68
1990/05/31 11421.57 12616.21
1990/06/30 11516.14 12727.10
1990/07/31 11655.11 12914.19
1990/08/31 11587.35 12726.68
1990/09/30 11618.38 12733.93
1990/10/31 11748.31 12964.92
1990/11/30 11935.75 13225.65
1990/12/31 11967.97 13283.18
1991/01/31 12101.60 13461.44
1991/02/28 12211.78 13578.56
1991/03/31 12219.98 13583.44
1991/04/30 12330.76 13764.10
1991/05/31 12429.55 13886.47
1991/06/30 12437.10 13872.72
1991/07/31 12561.67 14041.69
1991/08/31 12662.05 14226.62
1991/09/30 12739.65 14411.85
1991/10/31 12876.46 14541.56
1991/11/30 12908.91 14582.13
1991/12/31 13122.22 14895.06
1992/01/31 13213.89 14929.02
1992/02/29 13229.05 14933.80
1992/03/31 13178.47 14939.32
1992/04/30 13270.64 15072.28
1992/05/31 13416.20 15249.68
1992/06/30 13592.27 15505.57
1992/07/31 13885.00 15970.43
1992/08/31 13782.34 15814.72
1992/09/30 13912.62 15918.15
1992/10/31 13813.64 15761.67
1992/11/30 14066.04 16043.96
1992/12/31 14083.03 16207.77
1993/01/31 14243.17 16396.27
1993/02/28 14638.62 16989.32
1993/03/31 14493.41 16809.74
1993/04/30 14595.35 16979.35
1993/05/31 14656.77 17074.78
1993/06/30 14811.26 17359.76
1993/07/31 14828.08 17382.50
1993/08/31 15100.90 17744.40
1993/09/30 15257.12 17946.51
1993/10/31 15271.44 17981.15
1993/11/30 15152.40 17822.73
1993/12/31 15411.30 18198.97
1994/01/31 15554.28 18406.80
1994/02/28 15165.90 17930.07
1994/03/31 14573.36 17199.95
1994/04/30 14702.35 17345.81
1994/05/31 14833.94 17496.20
1994/06/30 14727.34 17389.30
1994/07/31 14932.53 17708.04
1994/08/31 14989.00 17769.31
1994/09/30 14821.12 17508.46
1994/10/31 14595.76 17197.51
1994/11/30 14276.82 16886.58
1994/12/31 14535.25 17258.25
1995/01/31 14901.02 17751.49
1995/02/28 15279.14 18267.70
1995/03/31 15446.27 18477.60
1995/04/30 15441.84 18499.40
1995/05/31 15794.52 19089.72
1995/06/30 15709.66 18923.64
1995/07/31 15811.92 19103.04
1995/08/31 16025.65 19345.26
1995/09/30 16128.02 19467.72
1995/10/31 16300.05 19750.78
1995/11/30 16487.87 20078.44
1995/12/31 16598.68 20271.40
1996/01/31 16709.43 20424.45
1996/02/29 16654.84 20286.58
1996/03/31 16490.94 20027.32
1996/04/30 16438.28 19970.64
1996/05/31 16436.51 19962.65
1996/06/30 16563.37 20180.05
1996/07/31 16692.61 20363.68
1996/08/31 16691.42 20358.80
1996/09/30 16838.01 20643.82
1996/10/31 17002.75 20877.30
1996/11/30 17297.63 21259.36
1996/12/31 17232.36 21170.07
1997/01/31 17282.09 21210.08
1997/02/28 17426.34 21404.79
1997/03/31 17221.82 21119.46
1997/04/30 17352.72 21296.23
1997/05/31 17537.06 21616.53
1997/06/30 17720.34 21846.74
1997/07/31 18161.76 22451.90
1997/08/31 18005.38 22241.52
1997/09/30 18207.55 22505.53
1997/10/31 18309.39 22650.24
1997/11/28 18407.97 22783.42
IMATRL PRASUN SHR__CHT 19971130 19971212 134512 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Intermediate Municipal Income Fund -
Class A on November 30, 1987, and the current maximum 3.75% sales
charge was paid. As the chart shows, by November 30, 1997, the value
of the investment would have grown to $18,408 - an 84.08% increase on
the initial investment. For comparison, look at how the Lehman
Brothers Municipal Bond Index, which reflects the performance of the
investment-grade municipal bond market, did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $22,783 - a 127.83% increase.
UNDERSTANDING
PERFORMANCE
HOW A FUND DID YESTERDAY IS
NO GUARANTEE OF HOW IT WILL DO
TOMORROW. BOND PRICES, FOR
EXAMPLE, GENERALLY MOVE IN THE
OPPOSITE DIRECTION OF INTEREST
RATES. IN TURN, THE SHARE PRICE,
RETURN AND YIELD OF A FUND THAT
INVESTS IN BONDS WILL VARY. THAT
MEANS IF YOU SELL YOUR SHARES
DURING A MARKET DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN
RIDE OUT THE MARKET'S UPS AND
DOWNS, YOU MAY HAVE A GAIN.
(CHECKMARK)
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
PERIODS ENDED NOVEMBER 30, 1997 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Advisor Intermediate Municipal Income - Class T 6.21% 5.48% 6.68%
Advisor Intermediate Municipal Income - Class T 3.29% 4.89% 6.38%
(incl. max. 2.75% sales charge)
Lehman Brothers 1-17 Year Municipal Bond Index 6.45% n/a n/a
Intermediate Municipal Debt Funds Average 5.50% 6.12% 7.16%
</TABLE>
AVERAGE ANNUAL TOTAL RETURNS take Class T's cumulative return and show
you what would have happened if Class T had performed at a constant
rate each year. The initial offering of Class T shares took place on
September 10, 1992. Class T shares bear a 0.25% 12b-1 fee that is
reflected in returns after September 10, 1992. Returns prior to that
date are those of Institutional Class, the original class of the fund.
Had Class T shares' 12b-1 fee been reflected, returns prior to
September 10, 1992 would have been lower. If Fidelity had not
reimbursed certain class expenses, the total returns and dividends
would have been lower.
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19971130 19971212 134601 S00000000000001
FA Int Muni Inc -CL T LB Municipal Bond
00289 LB015
1987/11/30 9725.00 10000.00
1987/12/31 9822.10 10145.10
1988/01/31 10174.32 10506.47
1988/02/29 10215.82 10617.52
1988/03/31 10066.46 10494.36
1988/04/30 10117.07 10574.12
1988/05/31 10149.08 10543.56
1988/06/30 10220.42 10697.81
1988/07/31 10273.60 10767.56
1988/08/31 10278.52 10777.03
1988/09/30 10391.30 10972.10
1988/10/31 10514.92 11165.21
1988/11/30 10480.71 11062.93
1988/12/31 10546.84 11176.11
1989/01/31 10653.58 11407.23
1989/02/28 10589.96 11277.07
1989/03/31 10556.37 11250.12
1989/04/30 10705.57 11517.20
1989/05/31 10865.44 11756.41
1989/06/30 10984.69 11916.06
1989/07/31 11094.31 12078.24
1989/08/31 11058.37 11959.99
1989/09/30 11056.18 11924.35
1989/10/31 11144.85 12070.19
1989/11/30 11266.79 12281.42
1989/12/31 11368.35 12381.88
1990/01/31 11331.26 12323.31
1990/02/28 11431.89 12432.99
1990/03/31 11451.36 12436.72
1990/04/30 11333.60 12346.68
1990/05/31 11540.24 12616.21
1990/06/30 11635.78 12727.10
1990/07/31 11776.20 12914.19
1990/08/31 11707.73 12726.68
1990/09/30 11739.09 12733.93
1990/10/31 11870.37 12964.92
1990/11/30 12059.76 13225.65
1990/12/31 12092.31 13283.18
1991/01/31 12227.33 13461.44
1991/02/28 12338.66 13578.56
1991/03/31 12346.95 13583.44
1991/04/30 12458.87 13764.10
1991/05/31 12558.68 13886.47
1991/06/30 12566.31 13872.72
1991/07/31 12692.18 14041.69
1991/08/31 12793.60 14226.62
1991/09/30 12872.01 14411.85
1991/10/31 13010.24 14541.56
1991/11/30 13043.03 14582.13
1991/12/31 13258.56 14895.06
1992/01/31 13351.18 14929.02
1992/02/29 13366.49 14933.80
1992/03/31 13315.38 14939.32
1992/04/30 13408.52 15072.28
1992/05/31 13555.59 15249.68
1992/06/30 13733.49 15505.57
1992/07/31 14029.26 15970.43
1992/08/31 13925.53 15814.72
1992/09/30 14057.17 15918.15
1992/10/31 13957.16 15761.67
1992/11/30 14212.18 16043.96
1992/12/31 14229.35 16207.77
1993/01/31 14391.15 16396.27
1993/02/28 14790.71 16989.32
1993/03/31 14643.99 16809.74
1993/04/30 14746.99 16979.35
1993/05/31 14809.05 17074.78
1993/06/30 14965.14 17359.76
1993/07/31 14982.14 17382.50
1993/08/31 15257.79 17744.40
1993/09/30 15415.64 17946.51
1993/10/31 15430.11 17981.15
1993/11/30 15309.83 17822.73
1993/12/31 15571.42 18198.97
1994/01/31 15715.89 18406.80
1994/02/28 15323.47 17930.07
1994/03/31 14724.77 17199.95
1994/04/30 14855.10 17345.81
1994/05/31 14988.06 17496.20
1994/06/30 14880.35 17389.30
1994/07/31 15087.68 17708.04
1994/08/31 15144.72 17769.31
1994/09/30 14975.11 17508.46
1994/10/31 14747.40 17197.51
1994/11/30 14425.15 16886.58
1994/12/31 14686.26 17258.25
1995/01/31 15055.84 17751.49
1995/02/28 15437.88 18267.70
1995/03/31 15606.75 18477.60
1995/04/30 15602.28 18499.40
1995/05/31 15958.62 19089.72
1995/06/30 15872.88 18923.64
1995/07/31 15976.20 19103.04
1995/08/31 16192.15 19345.26
1995/09/30 16295.59 19467.72
1995/10/31 16469.40 19750.78
1995/11/30 16659.18 20078.44
1995/12/31 16771.13 20271.40
1996/01/31 16883.03 20424.45
1996/02/29 16827.88 20286.58
1996/03/31 16662.27 20027.32
1996/04/30 16609.07 19970.64
1996/05/31 16607.28 19962.65
1996/06/30 16735.46 20180.05
1996/07/31 16866.04 20363.68
1996/08/31 16864.84 20358.80
1996/09/30 17011.73 20643.82
1996/10/31 17193.39 20877.30
1996/11/30 17473.12 21259.36
1996/12/31 17423.26 21170.07
1997/01/31 17455.10 21210.08
1997/02/28 17598.27 21404.79
1997/03/31 17390.13 21119.46
1997/04/30 17520.88 21296.23
1997/05/31 17722.60 21616.53
1997/06/30 17888.98 21846.74
1997/07/31 18333.03 22451.90
1997/08/31 18173.54 22241.52
1997/09/30 18376.16 22505.53
1997/10/31 18459.95 22650.24
1997/11/28 18558.01 22783.42
IMATRL PRASUN SHR__CHT 19971130 19971212 134603 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Intermediate Municipal Income Fund -
Class T on November 30, 1987, and the current maximum 2.75% sales
charge was paid. As the chart shows, by November 30, 1997, the value
of the investment would have grown to $18,558 - an 85.58% increase on
the initial investment. For comparison, look at how the Lehman
Brothers Municipal Bond Index, which reflects the performance of the
investment-grade municipal bond market, did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $22,783 - a 127.83% increase.
UNDERSTANDING
PERFORMANCE
HOW A FUND DID YESTERDAY IS
NO GUARANTEE OF HOW IT WILL DO
TOMORROW. BOND PRICES, FOR
EXAMPLE, GENERALLY MOVE IN THE
OPPOSITE DIRECTION OF INTEREST
RATES. IN TURN, THE SHARE PRICE,
RETURN AND YIELD OF A FUND THAT
INVESTS IN BONDS WILL VARY. THAT
MEANS IF YOU SELL YOUR SHARES
DURING A MARKET DOWNTURN, YOU
MIGHT LOSE MONEY. BUT IF YOU CAN
RIDE OUT THE MARKET'S UPS AND
DOWNS, YOU MAY HAVE A GAIN.
(CHECKMARK)
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
PERIODS ENDED NOVEMBER 30, 1997 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Advisor Intermediate Municipal Income - Institutional 6.48% 5.75% 6.82%
Class
Lehman Brothers 1-17 Year Municipal Bond Index 6.45% n/a n/a
Intermediate Municipal Debt Funds Average 5.50% 6.12% 7.16%
</TABLE>
AVERAGE ANNUAL TOTAL RETURNS take Institutional Class' cumulative
return and show you what would have happened if Institutional Class
had performed at a constant rate each year. If Fidelity had not
reimbursed certain class expenses, the total returns and dividends
would have been lower.
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19971130 19971212 134539 S00000000000001
FA Int Muni Inc -CL I LB Municipal Bond
00089 LB015
1987/11/30 10000.00 10000.00
1987/12/31 10099.85 10145.10
1988/01/31 10462.03 10506.47
1988/02/29 10504.70 10617.52
1988/03/31 10351.12 10494.36
1988/04/30 10403.16 10574.12
1988/05/31 10436.07 10543.56
1988/06/30 10509.43 10697.81
1988/07/31 10564.11 10767.56
1988/08/31 10569.17 10777.03
1988/09/30 10685.14 10972.10
1988/10/31 10812.26 11165.21
1988/11/30 10777.08 11062.93
1988/12/31 10845.08 11176.11
1989/01/31 10954.84 11407.23
1989/02/28 10889.41 11277.07
1989/03/31 10854.88 11250.12
1989/04/30 11008.30 11517.20
1989/05/31 11172.69 11756.41
1989/06/30 11295.31 11916.06
1989/07/31 11408.03 12078.24
1989/08/31 11371.08 11959.99
1989/09/30 11368.82 11924.35
1989/10/31 11460.00 12070.19
1989/11/30 11585.39 12281.42
1989/12/31 11689.82 12381.88
1990/01/31 11651.69 12323.31
1990/02/28 11755.15 12432.99
1990/03/31 11775.18 12436.72
1990/04/30 11654.09 12346.68
1990/05/31 11866.57 12616.21
1990/06/30 11964.82 12727.10
1990/07/31 12109.21 12914.19
1990/08/31 12038.80 12726.68
1990/09/30 12071.04 12733.93
1990/10/31 12206.04 12964.92
1990/11/30 12400.78 13225.65
1990/12/31 12434.25 13283.18
1991/01/31 12573.09 13461.44
1991/02/28 12687.57 13578.56
1991/03/31 12696.09 13583.44
1991/04/30 12811.18 13764.10
1991/05/31 12913.81 13886.47
1991/06/30 12921.66 13872.72
1991/07/31 13051.09 14041.69
1991/08/31 13155.37 14226.62
1991/09/30 13236.00 14411.85
1991/10/31 13378.14 14541.56
1991/11/30 13411.86 14582.13
1991/12/31 13633.48 14895.06
1992/01/31 13728.72 14929.02
1992/02/29 13744.47 14933.80
1992/03/31 13691.91 14939.32
1992/04/30 13787.68 15072.28
1992/05/31 13938.91 15249.68
1992/06/30 14121.84 15505.57
1992/07/31 14425.97 15970.43
1992/08/31 14319.31 15814.72
1992/09/30 14453.06 15918.15
1992/10/31 14354.35 15761.67
1992/11/30 14619.64 16043.96
1992/12/31 14626.29 16207.77
1993/01/31 14810.45 16396.27
1993/02/28 15210.02 16989.32
1993/03/31 15062.42 16809.74
1993/04/30 15171.20 16979.35
1993/05/31 15238.04 17074.78
1993/06/30 15402.32 17359.76
1993/07/31 15438.16 17382.50
1993/08/31 15711.46 17744.40
1993/09/30 15877.86 17946.51
1993/10/31 15911.44 17981.15
1993/11/30 15791.14 17822.73
1993/12/31 16079.68 18198.97
1994/01/31 16232.46 18406.80
1994/02/28 15815.67 17930.07
1994/03/31 15201.44 17199.95
1994/04/30 15339.16 17345.81
1994/05/31 15479.72 17496.20
1994/06/30 15371.76 17389.30
1994/07/31 15589.28 17708.04
1994/08/31 15651.48 17769.31
1994/09/30 15463.83 17508.46
1994/10/31 15247.42 17197.51
1994/11/30 14933.13 16886.58
1994/12/31 15206.41 17258.25
1995/01/31 15575.94 17751.49
1995/02/28 15974.20 18267.70
1995/03/31 16152.45 18477.60
1995/04/30 16151.32 18499.40
1995/05/31 16523.78 19089.72
1995/06/30 16438.42 18923.64
1995/07/31 16565.21 19103.04
1995/08/31 16776.25 19345.26
1995/09/30 16887.34 19467.72
1995/10/31 17071.14 19750.78
1995/11/30 17238.46 20078.44
1995/12/31 17391.80 20271.40
1996/01/31 17511.97 20424.45
1996/02/29 17458.75 20286.58
1996/03/31 17290.63 20027.32
1996/04/30 17239.39 19970.64
1996/05/31 17224.07 19962.65
1996/06/30 17377.67 20180.05
1996/07/31 17516.75 20363.68
1996/08/31 17518.90 20358.80
1996/09/30 17692.22 20643.82
1996/10/31 17867.39 20877.30
1996/11/30 18161.76 21259.36
1996/12/31 18113.70 21170.07
1997/01/31 18150.70 21210.08
1997/02/28 18304.13 21404.79
1997/03/31 18091.63 21119.46
1997/04/30 18231.36 21296.23
1997/05/31 18445.13 21616.53
1997/06/30 18622.09 21846.74
1997/07/31 19088.29 22451.90
1997/08/31 18926.23 22241.52
1997/09/30 19141.11 22505.53
1997/10/31 19232.44 22650.24
1997/11/28 19338.53 22783.42
IMATRL PRASUN SHR__CHT 19971130 19971212 134545 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Intermediate Municipal Income Fund -
Institutional Class on November 30, 1987. As the chart shows, by
November 30, 1997, the value of the investment would have grown to
$19,339 - a 93.39% increase on the initial investment. For comparison,
look at how the Lehman Brothers Municipal Bond Index, which reflects
the performance of the investment-grade bond market, did over the same
period. With dividends and capital gains, if any, reinvested, the same
$10,000 investment would have grown to $22,783 - a 127.83% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. Bond prices, for
example, generally move in the
opposite direction of interest
rates. In turn, the share price,
return and yield of a fund that
invests in bonds will vary. That
means if you sell your shares
during a market downturn, you
might lose money. But if you can
ride out the market's ups and
downs, you may have a gain.
(checkmark)
MARKET RECAP
With investor sentiment, shifting supply/
demand conditions and Federal
Reserve Board policymaking playing
key roles, municipal bonds performed
more or less in line with their taxable
counterparts for the 12 months that
ended November 30, 1997. The
Lehman Brothers Municipal Bond
Index - a broad measure of the
municipal bond market - returned
7.17%, while the Lehman Brothers
Aggregate Bond Index - a barometer
of the taxable bond market - returned
7.55%. Through much of the first half
of the period, the supply/demand
scenario within the muni market was
favorable: low supply and high
demand that led to rising municipal
bond prices. The second half,
however, saw a large amount of new
issuance come to market, and while
demand remained strong, it took time
for investors to become acclimated to
this new supply. In the interim, muni
bond prices fell. The cold months of
winter contrasted with what many felt
was an overheating economy ripe for
an inflation appearance. In late March,
the Federal Reserve Board raised a
key short-term interest rate by 0.25%.
While this move was anticipated by
investors, the market nonetheless
reacted negatively. From April through
mid-September, market conditions
were more friendly. Favorable
economic data soothed inflationary
concerns, while the Fed's reluctance
to raise rates further was another
positive influence. High supply and
low demand resulted in a sub-par
performance for muni bonds in
September and October, but Asian
volatility toward the end of the period
changed momentum. Currency
devaluations meant prices of Asian
goods would become cheaper, further
decreasing the likelihood of
inflation.
An interview with David Murphy, Portfolio Manager of Fidelity Advisor
Intermediate Municipal Income Fund
Q. HOW DID THE FUND PERFORM, DAVID?
A. For the 12-month period that ended November 30, 1997, the fund's
Institutional Class shares had a total return of 6.48%. To get a sense
of how the fund did relative to its competitors, the intermediate
municipal debt funds average returned 5.50% for the same 12-month
period, according to Lipper Analytical Services. Additionally, the
Lehman Brothers 1-17 Year Municipal Bond Index - which is a broad
measure of performance of the municipal bond market - returned
6.45% for the same one-year period.
A. For the 12-month period that ended November 30, 1997, the fund's
Class A, Class T, Class B and Class C shares had total returns of
6.42%, 6.21%, 5.54%, and 5.54%, respectively. To get a sense of how
the fund did relative to its competitors, the intermediate municipal
debt funds average returned 5.50% for the same 12-month period,
according to Lipper Analytical Services. Additionally, the Lehman
Brothers 1-17 Year Municipal Bond Index returned 6.45% for the same
one-year period.
Q. WHAT WAS YOUR STRATEGY?
A. In terms of the way the fund's investments were allocated among
bonds with various maturities, I focused on bonds with maturities
between five and 12 years. I did that because the municipal yield
curve - which is a graphical representation of the yield of
intermediate-term bonds by ascending maturity dates - was flatter
beyond 12 years. Up to about a 12-year maturity, an investor was paid
an appropriate amount of added income for each additional year of
maturity. It is this additional income that compensates the investor
for the added risk taken on by investing in the longer-maturity part
of the intermediate market. But for bonds with maturities of 12 years
or longer, the extra income for each successive year was, in my
opinion, less attractive given the level of risk inherent in
longer-term bonds. Another key strategy was that I kept the fund's
duration, which measures its sensitivity to changing interest rates,
neutral relative to the Lehman Brothers 1-17 Year Municipal Bond
Index. By doing so, the fund avoids getting whipsawed by becoming
bullish or bearish about the direction of interest rates at the wrong
time.
Q. WHAT WERE SOME OF THE FUND'S BEST PERFORMERS DURING THE PERIOD?
A. The fund's holdings in bonds issued in the state of New York were
winners. The state's finances improved, driven in part by the strength
of the securities industry, an important contributor to New York's tax
revenues. In recognition of this improvement, Standard & Poor's - one
of the municipal bond credit rating agencies - upgraded the credit
rating of some of the state's agencies, which was a positive
development for the prices of the fund's agency holdings. Likewise,
general obligation bonds issued by New York City also performed well
as the city's economy continued to expand. Additionally, bonds issued
by the Massachusetts Industrial Finance Agency on behalf of
Massachusetts Biomedical Research Corp. rose in value because more
investors became better-informed about its positive financial
performance.
Q. WERE THERE ANY DISAPPOINTMENTS DURING THE PERIOD?
A. The return from one of the fund's student loan bonds was
disappointing when prepayments - which rise as borrowers pay back
their loans early - came in a little bit higher than expected.
However, I continued to maintain a fairly heavy weighting in these
bonds because they generally offer attractive yields. With input from
Fidelity's research team, I try to pick student loan bonds that I
think will be prepaid more slowly.
Q. DURING THE PAST YEAR, THERE WAS AN INCREASE IN THE FUND'S ELECTRIC
UTILITY REVENUE POSITION. GIVEN THAT THE ELECTRIC INDUSTRY IS UNDER
PRESSURE FROM THE THREAT OF INCREASED COMPETITION, WHAT FACTORS DO YOU
LOOK FOR WHEN SELECTING THESE BONDS?
A. The electric utility industry is in the early stages of a
transformation from an environment where electric providers enjoy
monopolistic strongholds on a given service area to one where
competition will reign. With that in mind, I have focused on two types
of electric utilities: those that are well-prepared to deal with
increased competition; or those that I believe can meet competitive
challenges down the road but have been severely and unduly penalized
by the market today because of uncertainty surrounding future
deregulation.
Q. WHAT'S AHEAD FOR THE MUNICIPAL MARKET?
A. During the past several years, the amount of outstanding municipal
bonds has shrunk considerably. In the first half of 1997, the low
supply helped the municipal market outperform the taxable bond market.
I expect supply will increase next year. The question is, will there
be enough demand to digest that supply? In my view, that will depend
on how investors perceive the attractiveness of municipals relative to
other fixed-income alternatives and especially to equity investments.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT DATED
NOVEMBER 30, 1997. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY
TIME BASED ON MARKET AND OTHER CONDITIONS.
DAVID MURPHY ON MUNICIPAL
BOND SUPPLY:
"The supply of municipal bonds is an
important factor in their
performance. During the past six
months, interest rates have declined
fairly significantly. Falling interest
rates prompted municipal bond
issuers to refund, or refinance,
their older debt at current low
interest rates, much in the same
fashion that homeowners refinance
their mortgages when they see an
opportunity to lower their interest
costs. As a result of a recent increase
in the supply of municipal bonds,
their prices tended to lag U.S.
Treasuries during the final months
of the period. If interest rates stay at
current low levels, or fall further, I
think that the supply of issued
municipal bonds will continue to
expand, perhaps dramatically. This
would, in my opinion, lead to further
underperformance relative to U.S.
Treasuries. But if there is a
significant decline in the U.S. stock
market, m ore investment dollars
could be re-allocated to municipal
bonds."
NOTE TO SHAREHOLDERS: Effective
January 31, 1998, Norm Lind will
become portfolio manager of the
fund. He joined Fidelity in 1986.
EXHIBIT 1
FORM OF
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the Agreement) is made as
of March 9, 1998, by and between Fidelity Advisor Short-Intermediate
Municipal Income Fund (Short-Intermediate) and Fidelity Advisor
Intermediate Municipal Income Fund (Intermediate), funds of Fidelity
Advisor Series VI (the trust). The trust is a duly organized business
trust under the laws of the Commonwealth of Massachusetts with its
principal place of business at 82 Devonshire Street, Boston,
Massachusetts 02109. Intermediate and Short-Intermediate may be
referred to herein collectively as the "Funds" or each individually as
the "Fund."
This Agreement is intended to be, and is adopted as, a plan of
reorganization within the meaning of Section 368(a)(1)(C) of the
Internal Revenue Code of 1986, as amended (the Code). The
reorganization will comprise: (a) the transfer of all of the assets of
Short-Intermediate to Intermediate solely in exchange for shares of
beneficial interest in Class A, Class T, and Institutional Class of
Intermediate (the Intermediate Class Shares) in each case based upon
the net asset value attributable to the corresponding class of
Short-Intermediate and the assumption by Intermediate of
Short-Intermediate's liabilities; and (b) the constructive
distribution of such shares by Short-Intermediate to its shareholders
of the corresponding class in complete liquidation and termination of
Short-Intermediate in exchange for all of Short-Intermediate's
outstanding shares. Short-Intermediate shall receive shares of Class
A, Class T, and Institutional Class of Intermediate having a net asset
value equal to the value of the net assets of Class A, Class T, and
Institutional Class of Short-Intermediate, respectively, on the
Closing Date (as defined in Section 6), which shares
Short-Intermediate shall then distribute to its shareholders of the
corresponding class. Shareholders of Class A, Class T, and
Institutional Class of Short-Intermediate will receive shares of the
corresponding class of Intermediate equal in value to the shares of
Short-Intermediate they are surrendering, based upon the relative net
asset values of Class A (Short-Intermediate) to Class A
(Intermediate), Class T (Short-Intermediate) to Class T
(Intermediate), and Institutional Class (Short-Intermediate) to
Institutional Class (Intermediate), respectively, as of the Closing
Date. The foregoing transactions are referred to herein as the
"Reorganization."
In consideration of the mutual promises and subject to the terms and
conditions herein, the parties covenant and agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF SHORT-INTERMEDIATE.
Short-Intermediate represents and warrants to and agrees with
Intermediate that:
(a) Short-Intermediate is a series of Fidelity Advisor Series VI, a
business trust duly organized, validly existing, and in good standing
under the laws of the Commonwealth of Massachusetts, and has the power
to own all of its properties and assets and to carry out its
obligations under this Agreement. It has all necessary federal, state,
and local authorizations to carry on its business as now being
conducted and to carry out this Agreement;
(b) Fidelity Advisor Series VI is an open-end, management investment
company duly registered under the Investment Company Act of 1940, as
amended (the 1940 Act), and such registration is in full force and
effect;
(c) The Prospectuses and Statement of Additional Information of
Short-Intermediate (both dated February 28, 1998), previously
furnished to Intermediate, did not and do not contain any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading;
(d) There are no material legal, administrative, or other proceedings
pending or, to the knowledge of Short-Intermediate, threatened against
Short-Intermediate which assert liability on the part of
Short-Intermediate. Short-Intermediate knows of no facts which might
form the basis for the institution of such proceedings;
(e) Short-Intermediate is not in, and the execution, delivery, and
performance of this Agreement will not result in, violation of any
provision of its Amended and Restated Declaration of Trust or By-laws,
or, to the knowledge of Short-Intermediate, of any agreement,
indenture, instrument, contract, lease, or other undertaking to which
Short-Intermediate is a party or by which Short-Intermediate is bound
or result in the acceleration of any obligation or the imposition of
any penalty under any agreement, judgment or decree to which
Short-Intermediate is a party or is bound;
(f) The Statement of Assets and Liabilities, the Statement of
Operations, the Statement of Changes in Net Assets, Financial
Highlights (of each class), and the Schedule of Investments (including
market values) of Short-Intermediate at November 30, 1997, have been
audited by Coopers & Lybrand L.L.P., independent accountants, and have
been furnished to Intermediate. Said Statement of Assets and
Liabilities and Schedule of Investments fairly present the Fund's
financial position as of such date and said Statement of Operations,
Statement of Changes in Net Assets, and Financial Highlights (of each
class) fairly reflect its results of operations, changes in financial
position, and financial highlights for the periods covered thereby in
conformity with generally accepted accounting principles consistently
applied;
(g) Short-Intermediate has no known liabilities of a material nature,
contingent or otherwise, other than those shown as belonging to it on
its statement of assets and liabilities as of November 30, 1997 and
those incurred in the ordinary course of Short-Intermediate's business
as an investment company since November 30, 1997;
(h) The registration statement (Registration Statement) filed with
the Securities and Exchange Commission (Commission) by Fidelity
Advisor Series VI on Form N-14 relating to the shares of Intermediate
issuable hereunder and the proxy statement of Short-Intermediate
included therein (Proxy Statement), on the effective date of the
Registration Statement and insofar as they relate to
Short-Intermediate (i) comply in all material respects with the
provisions of the Securities Act of 1933, as amended (the 1933 Act),
the Securities Exchange Act of 1934, as amended (the 1934 Act), and
the 1940 Act, and the rules and regulations thereunder, and (ii) do
not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and at the time of the
shareholders' meeting referred to in Section 7 and on the Closing
Date, the prospectus contained in the Registration Statement of which
the Proxy Statement is a part (the Prospectus), as amended or
supplemented, insofar as it relates to Short-Intermediate, does not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading;
(i) All material contracts and commitments of Short-Intermediate
(other than this Agreement) will be terminated without liability to
Short-Intermediate prior to the Closing Date (other than those made in
connection with redemptions of Class A, Class T, and Institutional
Class shares and the purchase and sale of portfolio securities made in
the ordinary course of business);
(j) No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by
Short-Intermediate of the transactions contemplated by this Agreement,
except such as have been obtained under the 1933 Act, the 1934 Act,
the 1940 Act, and state securities or blue sky laws (which term as
used herein shall include the District of Columbia and Puerto Rico);
(k) Short-Intermediate has filed or will file all federal and state
tax returns which, to the knowledge of Short-Intermediate's officers,
are required to be filed by Short-Intermediate and has paid or will
pay all federal and state taxes shown to be due on said returns or
provision shall have been made for the payment thereof, and, to the
best of Short-Intermediate's knowledge, no such return is currently
under audit and no assessment has been asserted with respect to such
returns;
(l) Short-Intermediate has met the requirements of Subchapter M of
the Code for qualification and treatment as a regulated investment
company for all prior taxable years and intends to meet such
requirements for its current taxable year ending on the Closing Date;
(m) All of the issued and outstanding Class A, Class T, and
Institutional Class shares of Short-Intermediate are, and at the
Closing Date will be, duly and validly issued and outstanding and
fully paid and nonassessable as a matter of Massachusetts law (except
as disclosed in the Fund's Statement of Additional Information), and
have been offered for sale and in conformity with all applicable
federal securities laws. All of the issued and outstanding Class A,
Class T, and Institutional Class shares of Short-Intermediate will, at
the Closing Date, be held by the persons and in the amounts set forth
in the list of shareholders of each class submitted to Intermediate in
accordance with this Agreement;
(n) As of both the Valuation Time (as defined in Section 4) and the
Closing Date, Short-Intermediate will have the full right, power, and
authority to sell, assign, transfer, and deliver its portfolio
securities and any other assets of Short-Intermediate to be
transferred to Intermediate pursuant to this Agreement. As of the
Closing Date, subject only to the delivery of Short-Intermediate's
portfolio securities and any such other assets as contemplated by this
Agreement, Intermediate will acquire Short-Intermediate's portfolio
securities and any such other assets subject to no encumbrances,
liens, or security interests (except for those that may arise in the
ordinary course and are disclosed to Intermediate) and without any
restrictions upon the transfer thereof; and
(o) The execution, performance, and delivery of this Agreement will
have been duly authorized prior to the Closing Date by all necessary
corporate action on the part of Short-Intermediate, and this Agreement
constitutes a valid and binding obligation of Short-Intermediate
enforceable in accordance with its terms, subject to shareholder
approval.
2. REPRESENTATIONS AND WARRANTIES OF INTERMEDIATE.
Intermediate represents and warrants to and agrees with
Short-Intermediate that:
(a) Intermediate is a series of Fidelity Advisor Series VI, a
business trust duly organized, validly existing, and in good standing
under the laws of the Commonwealth of Massachusetts, and has the power
to own all of its properties and assets and to carry out its
obligations under this Agreement. It has all necessary federal, state,
and local authorizations to carry on its business as now being
conducted and to carry out this Agreement;
(b) Fidelity Advisor Series VI is an open-end, management investment
company duly registered under the 1940 Act, and such registration is
in full force and effect;
(c) The Prospectuses and Statement of Additional Information of
Intermediate (both dated February 28, 1998), previously furnished to
Short-Intermediate, did not and do not contain any untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
(d) There are no material legal, administrative, or other proceedings
pending or, to the knowledge of Intermediate, threatened against
Intermediate which assert liability on the part of Intermediate.
Intermediate knows of no facts which might form the basis for the
institution of such proceedings;
(e) Intermediate is not in, and the execution, delivery, and
performance of this Agreement will not result in, violation of any
provision of its Amended and Restated Declaration of Trust or By-laws,
or, to the knowledge of Intermediate, of any agreement, indenture,
instrument, contract, lease, or other undertaking to which
Intermediate is a party or by which Intermediate is bound or result in
the acceleration of any obligation or the imposition of any penalty
under any agreement, judgment, or decree to which Intermediate is a
party or is bound;
(f) The Statement of Assets and Liabilities, the Statement of
Operations, the Statement of Changes in Net Assets, Financial
Highlights (of each class), and the Schedule of Investments (including
market values) of Intermediate at November 30, 1997, have been audited
by Coopers & Lybrand L.L.P., independent accountants, and have been
furnished to Short-Intermediate. Said Statement of Assets and
Liabilities and Schedule of Investments fairly present its financial
position as of such date and said Statement of Operations, Statement
of Changes in Net Assets, and Financial Highlights (of each class)
fairly reflect its results of operations, changes in financial
position, and financial highlights for the periods covered thereby in
conformity with generally accepted accounting principles consistently
applied;
(g) Intermediate has no known liabilities of a material nature,
contingent or otherwise, other than those shown as belonging to it on
its statement of assets and liabilities as of November 30, 1997 and
those incurred in the ordinary course of Intermediate's business as an
investment company since November 30, 1997;
(h) No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by
Intermediate of the transactions contemplated by this Agreement,
except such as have been obtained under the 1933 Act, the 1934 Act,
the 1940 Act, and state securities or blue sky laws (which term as
used herein shall include the District of Columbia and Puerto Rico);
(i) Intermediate has filed or will file all federal and state tax
returns which, to the knowledge of Intermediate's officers, are
required to be filed by Intermediate and has paid or will pay all
federal and state taxes shown to be due on said returns or provision
shall have been made for the payment thereof, and, to the best of
Intermediate's knowledge, no such return is currently under audit and
no assessment has been asserted with respect to such returns;
(j) Intermediate has met the requirements of Subchapter M of the Code
for qualification and treatment as a regulated investment company for
all prior taxable years and intends to meet such requirements for its
current taxable year ending on November 30, 1998;
(k) As of the Closing Date, the Intermediate Class Shares of
beneficial interest of Intermediate to be issued to Short-Intermediate
will have been duly authorized and, when issued and delivered pursuant
to this Agreement, will be legally and validly issued and will be
fully paid and nonassessable as a matter of Massachusetts law (except
as disclosed in the Fund's Statement of Additional Information) by
Intermediate, and no shareholder of any class of Intermediate will
have any preemptive right of subscription or purchase in respect
thereof;
(l) The execution, performance, and delivery of this Agreement will
have been duly authorized prior to the Closing Date by all necessary
corporate action on the part of Intermediate, and this Agreement
constitutes a valid and binding obligation of Intermediate enforceable
in accordance with its terms, subject to approval by the shareholders
of Short-Intermediate;
(m) The Registration Statement and the Proxy Statement, on the
effective date of the Registration Statement and insofar as they
relate to Intermediate, (i) will comply in all material respects with
the provisions of the 1933 Act, the 1934 Act, and the 1940 Act, and
the rules and regulations thereunder, and (ii) will not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; and at the time of the shareholders' meeting
referred to in Section 7 and on the Closing Date, the Prospectus, as
amended or supplemented, insofar as it relates to Intermediate, will
not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading;
(n) The issuance of the Intermediate Class Shares pursuant to this
Agreement will be in compliance with all applicable federal securities
laws; and
(o) All of the issued and outstanding shares of beneficial interest
of Intermediate have been offered for sale and sold in conformity with
the federal securities laws.
3. REORGANIZATION.
(a) Subject to the requisite approval of the shareholders of
Short-Intermediate and to the other terms and conditions contained
herein, Short-Intermediate agrees to assign, sell, convey, transfer,
and deliver to Intermediate as of the Closing Date all of the assets
of Short-Intermediate of every kind and nature existing on the Closing
Date. Intermediate agrees in exchange therefor: (i) to assume all of
Short-Intermediate's liabilities existing on or after the Closing
Date, whether or not determinable on the Closing Date, and (ii) to
issue and deliver to Short-Intermediate the number of full and
fractional Intermediate Class Shares having a net asset value equal to
the value of the net assets of the corresponding class of
Short-Intermediate transferred hereunder, less the value of the
liabilities of Short-Intermediate, determined as provided for under
Section 4.
(b) The assets of Short-Intermediate to be acquired by Intermediate
shall include, without limitation, all cash, cash equivalents,
securities, receivables (including interest or dividends receivables),
claims, choses in action, and other property owned by
Short-Intermediate, and any deferred or prepaid expenses shown as an
asset on the books of Short-Intermediate on the Closing Date.
Short-Intermediate will pay or cause to be paid to Intermediate any
dividend or interest payments received by it on or after the Closing
Date with respect to the assets transferred to Intermediate hereunder,
and Intermediate will retain any dividend or interest payments
received by it after the Valuation Time with respect to the assets
transferred hereunder without regard to the payment date thereof.
(c) The liabilities of Short-Intermediate to be assumed by
Intermediate shall include (except as otherwise provided for herein)
all of Short-Intermediate's liabilities, debts, obligations, and
duties, of whatever kind or nature, whether absolute, accrued,
contingent, or otherwise, whether or not arising in the ordinary
course of business, whether or not determinable on the Closing Date,
and whether or not specifically referred to in this Agreement.
Notwithstanding the foregoing, Short-Intermediate agrees to use its
best efforts to discharge all of its known liabilities prior to the
Closing Date, other than liabilities incurred in the ordinary course
of business.
(d) Pursuant to this Agreement, as soon after the Closing Date as is
conveniently practicable, Short-Intermediate will constructively
distribute to its shareholders of record, determined as of the
Valuation Time on the Closing Date, the Class A, Class T, and
Institutional Class shares in exchange for such shareholders' shares
of beneficial interest in the corresponding class of
Short-Intermediate and Short-Intermediate will be liquidated in
accordance with the trust's Amended and Restated Declaration of Trust.
Shareholders of Class A, Class T, and Institutional Class of
Short-Intermediate will receive shares of the corresponding class of
Intermediate equal in value to the shares of Short-Intermediate they
are surrendering, based upon the relative net asset values of Class A
(Short-Intermediate) to Class A (Intermediate), Class T
(Short-Intermediate) to Class T (Intermediate), and Institutional
Class (Short-Intermediate) to Institutional Class (Intermediate),
respectively, as of the Closing Date. Such distribution shall be
accomplished by the Funds' transfer agent opening accounts on
Intermediate's share transfer books in the names of the
Short-Intermediate shareholders and transferring the Intermediate
Class Shares thereto. Each Short-Intermediate shareholder's account
shall be credited with the respective number of full and fractional
(rounded to the third decimal place) Intermediate Class Shares due
that shareholder. All outstanding Short-Intermediate shares, including
any represented by certificates, shall simultaneously be canceled on
Short-Intermediate's share transfer records. Intermediate shall not
issue certificates representing the Intermediate Class Shares in
connection with the Reorganization.
(e) Any reporting responsibility of Short-Intermediate is and shall
remain its responsibility up to and including the date on which it is
terminated.
(f) Any transfer taxes payable upon issuance of the Intermediate
Class Shares in a name other than that of the registered holder on
Short-Intermediate's books of the Short-Intermediate shares
constructively exchanged for the Intermediate Class Shares shall be
paid by the person to whom such Intermediate Class Shares are to be
issued, as a condition of such transfer.
4. VALUATION.
(a) The Valuation Time shall be as of the close of business of the
New York Stock Exchange on the Closing Date (the Valuation Time), or
such other date as may be mutually agreed upon in writing by the
parties hereto.
(b) As of the Closing Date, Intermediate will deliver to
Short-Intermediate the number of Intermediate Class Shares having a
net asset value equal to the value of the net assets attributable to
the corresponding class of Short-Intermediate transferred hereunder
less the liabilities of Short-Intermediate, determined as provided in
this Section 4.
(c) The net asset value per share of each class of the Intermediate
Class Shares to be delivered to Short-Intermediate, the value of the
assets of Short-Intermediate transferred hereunder, the value of the
liabilities of Short-Intermediate to be assumed hereunder, and the net
asset value per share of each class of Short-Intermediate to be
transferred hereunder shall in each case be determined as of the
Valuation Time.
(d) The net asset value per share of each class of the Intermediate
Class Shares shall be computed in the manner set forth in the
then-current Prospectus and Statement of Additional Information of
each class of Intermediate, and the value of the assets and
liabilities of Short-Intermediate shall be computed in the manner set
forth in the then-current Prospectus and Statement of Additional
Information of each class of Short-Intermediate.
(e) All computations pursuant to this Section shall be made by or
under the direction of Fidelity Service Company, Inc., a wholly-owned
subsidiary of FMR Corp., in accordance with its regular practice as
pricing agent for Short-Intermediate and Intermediate.
5. FEES; EXPENSES.
(a) Short-Intermediate shall be responsible for all expenses, fees
and other charges in connection with the transactions contemplated by
this Agreement, provided that they do not exceed the expense cap of
each class of Short-Intermediate. Expenses exceeding each class's
expense cap will be paid by FMR (but not including costs incurred in
connection with the purchase or sale of portfolio securities). Any
expenses incurred in connection with the transactions contemplated by
this Agreement which may be attributable to Intermediate will be borne
by Intermediate, provided that they do not exceed the expense cap of
each class of Intermediate. Expenses exceeding each class's expense
cap will be paid by FMR (but not including costs incurred in
connection with the purchase or sale of portfolio securities.
(b) Each of Intermediate and Short-Intermediate represents that there
is no person who has dealt with it who by reason of such dealings is
entitled to any broker's or finder's or other similar fee or
commission arising out of the transactions contemplated by this
Agreement.
6. CLOSING DATE.
(a) The Reorganization, together with related acts necessary to
consummate the same (the Closing), unless otherwise provided herein,
shall occur at the principal office of the Trust, 82 Devonshire
Street, Boston, Massachusetts, as of the Valuation Time on May 28,
1998, or at some other time, date, and place agreed to by
Short-Intermediate and Intermediate (the Closing Date).
(b) In the event that on the Closing Date: (i) any of the markets for
securities held by the Funds is closed to trading, or (ii) trading
thereon is restricted, or (iii) trading or the reporting of trading on
said market or elsewhere is disrupted, all so that accurate appraisal
of the total net asset value of each class of Short-Intermediate or
the net asset value per share of each class of Intermediate is
impracticable, the Valuation Time and the Closing Date shall be
postponed until the first business day after the day when such trading
shall have been fully resumed and such reporting shall have been
restored, or such other date as the parties may agree.
7. SHAREHOLDER MEETING AND TERMINATION OF SHORT-INTERMEDIATE.
(a) Short-Intermediate agrees to call a meeting of its shareholders
after the effective date of the Registration Statement, to consider
transferring its assets to Intermediate as herein provided, adopting
this Agreement, and authorizing the liquidation of Short-Intermediate.
(b) Short-Intermediate agrees that as soon as reasonably practicable
after distribution of the Intermediate Class Shares,
Short-Intermediate shall be terminated as a series of Fidelity Advisor
Series VI pursuant to its Amended and Restated Declaration of Trust,
any further actions shall be taken in connection therewith as required
by applicable law, and on and after the Closing Date
Short-Intermediate shall not conduct any business except in connection
with its liquidation and termination.
8. CONDITIONS TO OBLIGATIONS OF INTERMEDIATE.
(a) That Short-Intermediate furnishes to Intermediate a statement,
dated as of the Closing Date, signed by an officer of Fidelity Advisor
Series VI, certifying that as of the Valuation Time and the Closing
Date all representations and warranties of Short-Intermediate made in
this Agreement are true and correct in all material respects and that
Short-Intermediate has complied with all the agreements and satisfied
all the conditions on its part to be performed or satisfied at or
prior to such dates;
(b) That Short-Intermediate furnishes Intermediate with copies of the
resolutions, certified by an officer of Fidelity Advisor Series VI,
evidencing the adoption of this Agreement and the approval of the
transactions contemplated herein by the requisite vote of the holders
of the outstanding shares of beneficial interest of
Short-Intermediate;
(c) That, on or prior to the Closing Date, Short-Intermediate will
declare one or more dividends or distributions which, together with
all previous such dividends or distributions attributable to its
current taxable year, shall have the effect of distributing to the
shareholders of Short-Intermediate substantially all of
Short-Intermediate's investment company taxable income and all of its
net realized capital gain, if any, as of the Closing Date;
(d) That Short-Intermediate shall deliver to Intermediate at the
Closing a statement of its assets and liabilities, together with a
list of its portfolio securities showing each such security's adjusted
tax basis and holding period by lot, with values determined as
provided in Section 4 of this Agreement, all as of the Valuation Time,
certified on Short-Intermediate's behalf by its Treasurer or Assistant
Treasurer;
(e) That Short-Intermediate's custodian shall deliver to Intermediate
a certificate identifying the assets of Short-Intermediate held by
such custodian as of the Valuation Time on the Closing Date and
stating that as of the Valuation Time: (i) the assets held by the
custodian will be transferred to Intermediate; (ii)
Short-Intermediate's assets have been duly endorsed in proper form for
transfer in such condition as to constitute good delivery thereof; and
(iii) to the best of the custodian's knowledge, all necessary taxes in
conjunction with the delivery of the assets, including all applicable
federal and state stock transfer stamps, if any, have been paid or
provision for payment has been made;
(f) That Short-Intermediate's transfer agent shall deliver to
Intermediate at the Closing a certificate setting forth the number of
shares of each class of Short-Intermediate outstanding as of the
Valuation Time and the name and address of each holder of record of
any such shares and the number of shares held of record by each such
shareholder;
(g) That Short-Intermediate calls a meeting of its shareholders to be
held after the effective date of the Registration Statement, to
consider transferring its assets to Intermediate as herein provided,
adopting this Agreement, and authorizing the liquidation and
termination of Short-Intermediate;
(h) That Short-Intermediate delivers to Intermediate a certificate of
an officer of Fidelity Advisor Series VI, dated as of the Closing
Date, that there has been no material adverse change in
Short-Intermediate's financial position since November 30, 1997, other
than changes in the market value of its portfolio securities, or
changes due to net redemptions of its shares, dividends paid, or
losses from operations; and
(i) That all of the issued and outstanding shares of beneficial
interest of Short-Intermediate shall have been offered for sale and
sold in conformity with all applicable state securities laws and, to
the extent that any audit of the records of Short-Intermediate or its
transfer agent by Intermediate or its agents shall have revealed
otherwise, Short-Intermediate shall have taken all actions that in the
opinion of Intermediate are necessary to remedy any prior failure on
the part of Short-Intermediate to have offered for sale and sold such
shares in conformity with such laws.
9. CONDITIONS TO OBLIGATIONS OF SHORT-INTERMEDIATE.
(a) That Intermediate shall have executed and delivered to
Short-Intermediate an Assumption of Liabilities, certified by an
officer of Fidelity Advisor Series VI, dated as of the Closing Date
pursuant to which Intermediate will assume all of the liabilities of
Short-Intermediate existing at the Valuation Time in connection with
the transactions contemplated by this Agreement;
(b) That Intermediate furnishes to Short-Intermediate a statement,
dated as of the Closing Date, signed by an officer of Fidelity Advisor
Series VI, certifying that as of the Valuation Time and the Closing
Date all representations and warranties of Intermediate made in this
Agreement are true and correct in all material respects, and
Intermediate has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied at or prior to
such dates; and
(c) That Short-Intermediate shall have received an opinion of
Kirkpatrick & Lockhart LLP, counsel to Short-Intermediate and
Intermediate, to the effect that the Intermediate Class Shares are
duly authorized and upon delivery to Short-Intermediate as provided in
this Agreement will be validly issued and will be fully paid and
nonassessable by Intermediate as a matter of Massachusetts law (except
as disclosed in Intermediate's Statement of Additional Information)
and no shareholder of Intermediate has any preemptive right of
subscription or purchase in respect thereof.
10. CONDITIONS TO OBLIGATIONS OF INTERMEDIATE AND SHORT-INTERMEDIATE.
(a) That this Agreement shall have been adopted and the transactions
contemplated herein shall have been approved by the requisite vote of
the holders of the outstanding shares of beneficial interest of
Short-Intermediate;
(b) That all consents of other parties and all other consents,
orders, and permits of federal, state, and local regulatory
authorities (including those of the Commission and of state Blue Sky
and securities authorities, including "no action" positions of such
federal or state authorities) deemed necessary by Intermediate or
Short-Intermediate to permit consummation, in all material respects,
of the transactions contemplated hereby shall have been obtained,
except where failure to obtain any such consent, order, or permit
would not involve a risk of a material adverse effect on the assets or
properties of Intermediate or Short-Intermediate, provided that either
party hereto may for itself waive any of such conditions;
(c) That all proceedings taken by either fund in connection with the
transactions contemplated by this Agreement and all documents
incidental thereto shall be satisfactory in form and substance to it
and its counsel, Kirkpatrick & Lockhart LLP;
(d) That there shall not be any material litigation pending with
respect to the matters contemplated by this Agreement;
(e) That the Registration Statement shall have become effective under
the 1933 Act, and no stop order suspending such effectiveness shall
have been instituted or, to the knowledge of Intermediate and
Short-Intermediate, threatened by the Commission; and
(f) That Intermediate and Short-Intermediate shall have received an
opinion of Kirkpatrick & Lockhart LLP satisfactory to Intermediate and
Short-Intermediate that for federal income tax purposes:
(i) The Reorganization will be a reorganization under section
368(a)(1)(C) of the Code, and Short-Intermediate and Intermediate will
each be parties to the Reorganization under section 368(b) of the
Code;
(ii) No gain or loss will be recognized by Short-Intermediate upon
the transfer of all of its assets to Intermediate in exchange solely
for the Intermediate Class Shares and the assumption of
Short-Intermediate's liabilities followed by the distribution of those
Intermediate Class Shares to the shareholders of the corresponding
class of Short-Intermediate in liquidation of Short-Intermediate;
(iii) No gain or loss will be recognized by Intermediate on the
receipt of Short-Intermediate's assets in exchange solely for the
Intermediate Class Shares and the assumption of Short-Intermediate's
liabilities;
(iv) The basis of Short-Intermediate's assets in the hands of
Intermediate will be the same as the basis of such assets in
Short-Intermediate's hands immediately prior to the Reorganization;
(v) Intermediate's holding period in the assets to be received from
Short-Intermediate will include Short-Intermediate's holding period in
such assets;
(vi) A Short-Intermediate shareholder will recognize no gain or loss
on the exchange of each class of his or her shares of beneficial
interest in Short-Intermediate solely for the Intermediate Class
Shares of the corresponding class in the Reorganization;
(vii) A Short-Intermediate shareholder's basis in the Intermediate
Class Shares to be received by him or her will be the same as his or
her basis in the Short-Intermediate shares of the corresponding class
exchanged therefor;
(viii) A Short-Intermediate shareholder's holding period for his or
her Intermediate Class Shares will include the holding period of
Short-Intermediate shares of the corresponding class exchanged,
provided that those Short-Intermediate shares were held as capital
assets on the date of the Reorganization.
Notwithstanding anything herein to the contrary, neither
Short-Intermediate nor Intermediate may waive the conditions set forth
in this subsection 10(f).
11. COVENANTS OF INTERMEDIATE AND SHORT-INTERMEDIATE.
(a) Intermediate and Short-Intermediate each covenants to operate its
respective business in the ordinary course between the date hereof and
the Closing Date, it being understood that such ordinary course of
business will include the payment of customary dividends and
distributions;
(b) Short-Intermediate covenants that it is not acquiring the
Intermediate Class Shares for the purpose of making any distribution
other than in accordance with the terms of this Agreement;
(c) Short-Intermediate covenants that it will assist Intermediate in
obtaining such information as Intermediate reasonably requests
concerning the beneficial ownership of Short-Intermediate's shares;
and
(d) Short-Intermediate covenants that its liquidation and termination
will be effected in the manner provided in its Amended and Restated
Declaration of Trust in accordance with applicable law and after the
Closing Date, Short-Intermediate will not conduct any business except
in connection with its liquidation and termination.
12. TERMINATION; WAIVER.
Intermediate and Short-Intermediate may terminate this Agreement by
mutual agreement. In addition, either Intermediate or
Short-Intermediate may at its option terminate this Agreement at or
prior to the Closing Date because:
(i) of a material breach by the other of any representation,
warranty, or agreement contained herein to be performed at or prior to
the Closing Date; or
(ii) a condition herein expressed to be precedent to the obligations
of the terminating party has not been met and it reasonably appears
that it will not or cannot be met.
In the event of any such termination, there shall be no liability for
damages on the part of Short-Intermediate or Intermediate, or their
respective Trustees or officers.
13. SOLE AGREEMENT; AMENDMENTS; WAIVERS; SURVIVAL OF WARRANTIES.
(a) This Agreement supersedes all previous correspondence and oral
communications between the parties regarding the subject matter
hereof, constitutes the only understanding with respect to such
subject matter, may not be changed except by a letter of agreement
signed by each party hereto and shall be construed in accordance with
and governed by the laws of the Commonwealth of Massachusetts.
(b) This Agreement may be amended, modified, or supplemented in such
manner as may be mutually agreed upon in writing by the respective
President, any Vice President, or Treasurer of Intermediate or
Short-Intermediate; provided, however, that following the
shareholders' meeting called by Short-Intermediate pursuant to Section
7 of this Agreement, no such amendment may have the effect of changing
the provisions for determining the number of Intermediate Class Shares
to be delivered to shareholders of each class of Short-Intermediate
under this Agreement to the detriment of such shareholders without
their further approval.
(c) Either Fund may waive any condition to its obligations hereunder,
provided that such waiver does not have any material adverse effect on
the interests of such Fund's shareholders.
The representations, warranties, and covenants contained in the
Agreement, or in any document delivered pursuant hereto or in
connection herewith, shall survive the consummation of the
transactions contemplated hereunder.
14. DECLARATIONS OF TRUST.
A copy of the funds' Declaration of Trust, as restated and amended,
is on file with the Secretary of State of the Commonwealth of
Massachusetts, and notice is hereby given that this instrument is
executed on behalf of the Trustees of each Fund as trustees and not
individually and that the obligations of each Fund under this
instrument are not binding upon any of such Fund's Trustees, officers,
or shareholders individually but are binding only upon the assets and
property of such Fund. Each Fund agrees that its obligations hereunder
apply only to such Fund and not to its shareholders individually or to
the Trustees of such Fund.
15. ASSIGNMENT.
This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment
or transfer of any rights or obligations hereunder shall be made by
any party without the written consent of the other parties. Nothing
herein expressed or implied is intended or shall be construed to
confer upon or give any person, firm, or corporation other than the
parties hereto and their respective successors and assigns any rights
or remedies under or by reason of this Agreement.
This Agreement may be executed in any number of counterparts, each of
which, when executed and delivered, shall be deemed to be an original.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by an appropriate officer.
SIGNATURE LINES OMITTED
ASIM-PXS-0398 CUSIP#315917880/FUND#264
CUSIP#315917500/FUND#636
CUSIP#315917708/FUND#606
Vote this proxy card TODAY! Your prompt response will
save the expense of additional mailings.
Return the proxy card in the enclosed envelope or mail to:
FIDELITY INVESTMENTS
Proxy Department
P.O. Box 9107
Hingham, MA 02043-9848
PLEASE DETACH AT PERFORATION BEFORE MAILING.
- ---------------------------------------------------------------------
- -------------------------
FIDELITY ADVISOR SERIES VI: FIDELITY ADVISOR SHORT-INTERMEDIATE
MUNICIPAL INCOME FUND
PROXY SOLICITED BY THE TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward
C. Johnson 3d, Eric D. Roiter, and Donald J. Kirk, or any one or more
of them, attorneys, with full power of substitution, to vote all
shares of Fidelity Advisor Series VI: Fidelity Advisor
Short-Intermediate Municipal Income Fund which the undersigned is
entitled to vote at the Special Meeting of Shareholders of the fund to
be held at the office of the trust at 82 Devonshire St., Boston, MA
02109, on May 4, 1998 at 9:00 a.m. Eastern time and at any
adjournments thereof. All powers may be exercised by a majority of
said proxy holders or substitutes voting or acting or, if only one
votes and acts, then by that one. This Proxy shall be voted on the
proposals described in the Proxy Statement as specified on the reverse
side. Receipt of the Notice of the Meeting and the accompanying Proxy
Statement is hereby acknowledged.
NOTE: Please sign exactly as your name appears on this Proxy. When
signing in a fiduciary capacity, such as executor, administrator,
trustee, attorney, guardian, etc., please so indicate. Corporate and
partnership proxies should be signed by an authorized person
indicating the person's title.
Date _____________, 1998
_______________________________________
_______________________________________
Signature(s) (Title(s), if applicable)
PLEASE SIGN, DATE, AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
cusip # 315917880/fund #264
cusip # 315917500/fund #636
cusip # 315917708/fund #606
Please refer to the Proxy Statement discussion of this matter.
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE
PROPOSAL.
As to any other matter, said attorneys shall vote in accordance with
their best judgment.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE FOLLOWING:
- ---------------------------------------------------------------------
- -------------------------
_____________________________________________________________________
________________________
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
1. To approve an Agreement and Plan of Reorganization FOR [ ] AGAINST [ ] ABSTAIN [ ] 1.
between Fidelity Advisor Short-Intermediate
Municipal Income Fund and Fidelity Advisor
Intermediate Municipal Income Fund, another fund
of the trust, providing for the transfer of all of the
assets of Fidelity Advisor Short-Intermediate
Municipal Income Fund to Fidelity Advisor
Intermediate Municipal Income Fund in exchange
solely for shares of beneficial interest in Class A,
Class T, and Institutional Class of Fidelity Advisor
Intermediate Municipal Income Fund and the
assumption by Fidelity Advisor Intermediate
Municipal Income Fund of Fidelity Advisor
Short-Intermediate Municipal Income Fund's
liabilities, followed by the distribution of such shares
to shareholders of the corresponding class of Fidelity
Advisor Short-Intermediate Municipal Income Fund
in liquidation of Fidelity Advisor Short-Intermediate
Municipal Income Fund.
</TABLE>
ASIT-PXC-0398 cusip # 315917880/fund # 264
cusip # 315917500/fund # 636
cusip # 315917708/fund # 606
(PHOTO_OF_EDWARD_C_JOHNSON_3D)PROXY MATERIALS
I M P O R T A N T
PLEASE CAST YOUR VOTE NOW!
Dear Advisor Short-Intermediate Municipal Fund Shareholder:
I am writing to ask you to vote on an important proposal to merge
Advisor Short-Intermediate Municipal Income Fund into Advisor
Intermediate Municipal Income Fund. A shareholder meeting is scheduled
for May 4, 1998. Votes received in time to be counted at the meeting
will decide whether the merger takes place. This package contains
information about the proposal and includes all the materials you will
need to vote by mail.
The fund's Board of Trustees has reviewed the proposed merger and has
recommended that the proposed merger be presented to shareholders.
The Trustees, most of whom are not affiliated with Fidelity, are
responsible for protecting your interests as a shareholder. The
Trustees have determined that the merger is in the shareholders' best
interests. However, the final decision is up to you.
The proposal would merge Advisor Short-Intermediate Municipal into
Advisor Intermediate Municipal, a larger fund with a superior
long-term performance record. Fidelity believes that it can achieve a
higher level of efficiency if the two funds are combined. However,
because Advisor Intermediate Municipal invests in slightly longer-term
bonds than Advisor Short-Intermediate Municipal, its performance is
accompanied by slightly more interest rate risk (i.e., the risk of
poor performance if interest rates rise).
The merger would not be a taxable event for shareholders (i.e., you
will not have to take a capital gain or loss on your shares), and no
sales charges will be imposed on the merger. For future investments in
the merged fund, you should note that Advisor Intermediate Municipal
generally carries higher sales charges than Advisor Short-Intermediate
Municipal. This will not affect your existing investment, but may have
an impact on any future investments you want to make.
We have attached a Q&A to assist you in understanding the proposal.
The enclosed proxy statement provides more details.
It's important that you consider whether the merger is right for you.
Your vote is extremely important, no matter how large or small your
holdings may be. Voting by mail is quick and easy. Everything you need
is enclosed. To cast your vote, simply complete the proxy card(s)
enclosed in this package. Be sure to sign the card before mailing in
the postage-paid envelope provided.
If you have any questions before you vote, please call us at
1-800-522-7297. Thank you for your participation in this important
initiative for your fund.
Sincerely,
Edward C. Johnson 3d
Chairman and Chief Executive Officer
Important Information to Help You
Understand the Proposal on Which
You Are Being Asked to Vote.
PLEASE READ THE FULL TEXT OF THIS PROXY STATEMENT. BELOW IS A BRIEF
OVERVIEW OF THE MATTER TO BE VOTED UPON. YOUR VOTE IS IMPORTANT. IF
YOU HAVE ANY QUESTIONS REGARDING THE PROPOSAL PLEASE CALL CLIENT
SERVICES AT 800-522-7297 . WE APPRECIATE YOU PLACING YOUR TRUST
IN THE FIDELITY ADVISOR FUNDS AND LOOK FORWARD TO HELPING YOU ACHIEVE
YOUR FINANCIAL GOALS.
WHAT PROPOSAL AM I BEING ASKED TO VOTE ON?
As a shareholder in Advisor Short-Intermediate Municipal Income Fund
(Short-Intermediate), you are asked to vote on a merger into Advisor
Intermediate Municipal Income Fund (Intermediate).
WHAT IS THE REASON FOR AND THE ADVANTAGES OF THE MERGER?
The proposed merger is part of a larger strategy by Fidelity Advisor
Funds to consolidate smaller, less efficient funds that generally have
higher expenses. Fidelity believes that it can achieve a higher level
of efficiency if the funds are combined.
Historically, Intermediate has performed better than
Short-Intermediate. However, because Intermediate invests in slightly
longer-term bonds than Short-Intermediate, its superior long-term
performance has been accompanied by slightly more interest rate risk
(i.e., the risk of poor performance if interest rates rise).
Intermediate normally maintains an average maturity of between 3 to 10
years. Short-Intermediate normally maintains an average maturity of 2
to 5 years. The dollar-weighted average maturity of Intermediate and
Short-Intermediate was 7.6 years and 3.2 years, respectively, as of
November 30, 1997.
HOW DOES THE HISTORICAL PERFORMANCE OF EACH FUND COMPARE?
The table below shows that Intermediate's long-term performance is
superior to that of Short-Intermediate. The total returns in the table
below are for Short-Intermediate and Intermediate since
Short-Intermediate's inception and each calendar year thereafter.
Calendar Year Total Returns
1994* 1995 1996 1997**
Short-Intermediate Class T 1.26% 8.68% 3.64% 4.44%
Intermediate Class T -2.64% 14.20% 3.89% 6.51%
<TABLE>
<CAPTION>
<S> <C>
Cumulative Total Returns
3/16/94 - 11/30/97
Short-Intermediate Class T 19.12%
Short-Intermediate Class T (load adjusted) 17.33%
Intermediate Class T 23.03%
Intermediate Class T (load adjusted) 19.64%
* From March 16, 1994 (commencement of operations of Class T of Short-Intermediate).
** Through November 30, 1997.
If FMR had not reimbursed certain class expenses, the total returns would have been lower.
</TABLE>
WHAT WOULD BE THE INVESTMENT POLICIES OF THE MERGED FUND?
Both Short-Intermediate and Intermediate seek high current income that
is free from federal taxation, consistent with the preservation of
capital. The funds do, however, have different interest-rate risk.
Intermediate maintains a longer average maturity than
Short-Intermediate. Intermediate has been subject to more interest
rate sensitivity than Short-Intermediate, but the fund has provided
higher returns over the long term.
HOW DO THE EXPENSES OF THE FUNDS COMPARE?
Total expenses (i.e., the ongoing costs charged to the fund's assets)
of Intermediate and Short-Intermediate are similar. However, for
future investments in the merged fund, you should note that
Intermediate generally carries higher sales charges than
Short-Intermediate. This will not affect your existing investment, but
may have an impact on any future investments that you want to make.
WHO IS THE FUND MANAGER OF INTERMEDIATE?
Norman Lind currently manages the fund and is expected to manage the
combined fund.
WHAT ARE THE FEDERAL TAX IMPLICATIONS OF THE MERGER?
The merger will not be a taxable event for shareholders (i.e., you
will not have to take a capital gain or loss on your shares).
WHAT IF THERE ARE NOT ENOUGH VOTES TO REACH QUORUM BY THE SCHEDULED
SHAREHOLDER MEETING DATE?
We will keep trying to get shareholders to vote until at least 50% of
the fund's shares are voted. We or D.F. King & Co., a proxy
solicitation firm, may contact you by mail or telephone. Therefore, we
encourage you to vote as soon as you review the enclosed proxy
materials to avoid additional mailings or telephone calls. If there
are not sufficient votes to approve the proposal by the time of the
Shareholder Meeting (May 4, 1998), the meeting may be adjourned to
permit further solicitation of proxy votes.
IF THE MERGER IS APPROVED, WHAT WILL HAPPEN?
After voting your shares, there is nothing more to do. The closing
date for the merger is May 28, 1998 and after that date you will
receive a statement from Fidelity showing the merger transaction and
the number of shares you received.
WHAT HAPPENS IF THE PROPOSAL FOR SHORT-INTERMEDIATE IS NOT APPROVED?
If the proposal to merge Short-Intermediate is not approved by the
shareholders, the fund's Board of Trustees may consider other options.
Fidelity is currently bearing a portion of the fund's expenses under
voluntary expense caps. If the merger is not approved, Fidelity may be
unwilling to maintain the current voluntary expense caps at the same
level, which could result in higher expenses in the future.
WHAT DO I HAVE TO DO NOW?
Please vote right away. You can vote your shares by completing and
signing the enclosed proxy card, and mailing it in the enclosed
postage paid envelope. If you need any assistance, or have any
questions regarding the proposals or how to vote your shares, please
call Fidelity Client Services at 1-800-522-7297.
(registered trademark)
ASIM-PXL-0398
Please read this prospectus before investing, and keep it on file for future
reference. It contains important information, including how each fund invests
and the services available to shareholders.
To learn more about each fund and its investments, you can obtain a copy of a
fund's most recent financial report and portfolio listing or a copy of the
Statement of Additional Information (SAI) dated February 28, 1998. The SAI has
been filed with the Securities and Exchange Commission (SEC) and is available
along with other related materials on the SEC's Internet Web site
(http://www.sec.gov). The SAI is incorporated herein by reference (legally forms
a part of the prospectus). For a free copy of either document, contact Fidelity
Distributors Corporation (FDC), 82 Devonshire Street, Boston, MA 02109, or your
investment professional.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR
OBLIGATIONS OF, OR GUARANTEED BY, ANY
DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY
THE FDIC, FEDERAL RESERVE BOARD OR ANY OTHER
AGENCY, AND ARE SUBJECT TO INVESTMENT RISKS,
INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT
INVESTED.
HIGH YIELD AND STRATEGIC INCOME MAY INVEST SIGNIFICANTLY IN LOWER-QUALITY DEBT
SECURITIES, SOMETIMES CALLED "JUNK BONDS." THESE SECURITIES CARRY GREATER RISKS,
SUCH AS THE RISK OF DEFAULT, THAN OTHER DEBT SECURITIES.
LIKE ALL MUTUAL FUNDS, THESE SECURITIES HAVE
NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION, NOR
HAS THE SECURITIES AND EXCHANGE
COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
ACOM-PRO-0298
FIDELITY ADVISOR FUNDS
CLASS A, CLASS T, CLASS B,
AND CLASS C
GROWTH FUNDS: CLASSES
Fidelity Advisor TechnoQuantSM Growth Fund A,T,B,C
Fidelity Advisor Mid Cap Fund A,T,B,C
Fidelity Advisor Equity Growth Fund A,T,B,C
Fidelity Advisor Growth Opportunities Fund A,T,B,C
Fidelity Advisor Strategic Opportunities Fund A,T,B
Fidelity Advisor Large Cap Fund A,T,B,C
GROWTH AND INCOME FUNDS:
Fidelity Advisor Growth & Income Fund A,T,B,C
Fidelity Advisor Equity Income Fund A,T,B,C
Fidelity Advisor Balanced Fund A,T,B,C
TAXABLE INCOME FUNDS:
Fidelity Advisor High Yield Fund A,T,B,C
Fidelity Advisor Strategic Income Fund A,T,B,C
Fidelity Advisor Mortgage Securities Fund A,T,B
Fidelity Advisor Government Investment Fund A,T,B,C
Fidelity Advisor Intermediate Bond Fund A,T,B,C
Fidelity Advisor Short Fixed-Income Fund A,T,C
MUNICIPAL FUNDS:
Fidelity Advisor Municipal Income Fund
(formerly Fidelity Advisor High Income Municipal Fund) A,T,B,C
Fidelity Advisor Intermediate Municipal
Income Fund A,T,B,C
Fidelity Advisor Short-Intermediate Municipal
Income Fund A,T
PROSPECTUS
FEBRUARY 28, 1998
(FIDELITY_LOGO_GRAPHIC)
82 DEVONSHIRE STREET, BOSTON, MA 02109
<PAGE>
CONTENTS
<TABLE>
<CAPTION>
KEY FACTS WHO MAY WANT TO INVEST
<S> <C> <C>
EXPENSES Each class's sales charge (load) and its yearly
operating expenses.
FINANCIAL HIGHLIGHTS A summary of each fund's financial data.
PERFORMANCE How each fund has done over time.
THE FUNDS IN DETAIL CHARTER How each fund is organized.
INVESTMENT PRINCIPLES AND RISKS Each fund's overall approach
to investing.
BREAKDOWN OF EXPENSES How operating costs are calculated
and what they include.
YOUR ACCOUNT TYPES OF ACCOUNTS Different ways to set up your account,
including tax-advantaged retirement plans.
HOW TO BUY SHARES Opening an account and making additional
investments.
HOW TO SELL SHARES Taking money out and closing your account.
INVESTOR SERVICES Services to help you manage your account.
SHAREHOLDER AND ACCOUNT POLICIES DIVIDENDS, CAPITAL GAINS, AND TAXES
TRANSACTION DETAILS Share price calculations and the timing of
purchases and redemptions.
EXCHANGE RESTRICTIONS
SALES CHARGE REDUCTIONS AND WAIVERS
APPENDIX A
APPENDIX B
</TABLE>
<PAGE>
KEY FACTS
WHO MAY WANT TO INVEST
Class A, Class T, Class B, and Class C shares are offered to investors who
engage an investment professional for investment advice.
TechnoQuantSM Growth, Mid Cap, Equity Growth, Growth Opportunities, Strategic
Opportunities, Large Cap, Growth & Income, Equity Income, Balanced, High Yield,
Mortgage Securities, Government Investment, Intermediate Bond, Short
Fixed-Income, Municipal Income, and Intermediate Municipal Income are
diversified funds.
Strategic Income and Short-Intermediate Municipal Income are non-diversified
funds. Non-diversified funds may invest a greater portion of their assets in
securities of individual issuers than diversified funds. As a result, changes in
the market value of a single issuer could cause greater fluctuations in share
value than would occur in a more diversified fund.
TechnoQuant Growth, Mid Cap, Equity Growth, Growth Opportunities, Strategic
Opportunities, Large Cap, Growth & Income, Equity Income, and Balanced are
designed for investors who are willing to ride out stock market fluctuations in
pursuit of potentially high long-term returns. TechnoQuant Growth, Mid Cap,
Equity Growth, Growth Opportunities, Strategic Opportunities, and Large Cap are
designed for investors who want to be invested in the stock market for its
long-term growth potential. These funds invest for growth and do not pursue
income. Growth & Income, Equity Income, and Balanced are designed for those
investors who seek a combination of growth and income from equity and some bond
investments.
TechnoQuant Growth is designed to provide an alternative to more traditional
styles of investing for growth-oriented investors. The fund utilizes
computer-aided quantitative analysis emphasizing technical factors, such as
historical price and volume relationships.
High Yield and Strategic Income are designed for investors who want high current
income with some potential for capital growth from a portfolio of debt
instruments with a focus on lower-quality debt securities and income-producing
equity securities. These funds may be appropriate for long-term, aggressive
investors who understand the potential risks and rewards of investing in
lower-quality debt securities, including defaulted securities.
Strategic Income may also be appropriate for investors who want to pursue their
investment goals in markets outside of the United States. By including
international investments in your portfolio, you can achieve additional
diversification and participate in growth opportunities around the world.
Mortgage Securities is designed for investors who seek high current income from
a portfolio of mortgage-related securities of all types.
Government Investment is designed for investors who seek high current income
from a portfolio of U.S. Government securities in a manner consistent with
preserving principal.
Intermediate Bond and Short Fixed-Income are designed for investors who seek
high current income from a portfolio of investment-grade debt securities
consistent with capital preservation.
Municipal Income, Intermediate Municipal Income, and Short-Intermediate
Municipal Income are designed for investors in higher tax brackets who seek high
current income that is free from federal income tax. Intermediate Municipal
Income and Short-Intermediate Municipal Income also invest consistent with
consideration of capital preservation.
The value of each fund's investments and, as applicable, the income they
generate, will vary from day to day, and generally reflect changes in market
conditions, interest rates and other company, political, and economic news. In
the short term, stock prices can fluctuate dramatically in response to these
factors. The securities of small, less well-known companies may be more volatile
than those of larger companies. Bond values fluctuate based on changes in
interest rates and the credit quality of the issuer, and may be subject to
prepayment risk, which can limit their price appreciation potential in periods
of declining interest rates. Over time, however, stocks, although more volatile,
have shown greater growth potential than other types of securities. Investments
in foreign securities may involve risks in addition to those of U.S.
investments, including increased political and economic risk, as well as
exposure to currency fluctuations.
Each fund is not in itself a balanced investment plan. You should consider your
investment objective and tolerance for risk when making an investment decision.
When you sell your fund shares, they may be worth more or less than what you
paid for them.
Each fund is composed of multiple classes of shares. All classes of a fund have
a common investment objective and investment portfolio. Class A and Class T
shares have a front-end sales charge and pay a 12b-1 fee. Class A and Class T
shares may be subject to a contingent deferred sales charge (CDSC). Class B and
Class C shares do not have a front-end sales charge, but do have a CDSC, and pay
a 12b-1 fee. Institutional Class shares have no sales charge and do not pay a
12b-1 fee, but are available only to certain types of investors. See "Sales
Charge Reductions and Waivers," page , for Institutional Class
eligibility information. You may obtain more information about Institutional
Class shares, which are not offered through this prospectus, by calling
1-800-843-3001 or from your investment professional.
The performance of one class of shares of a fund may be different from the
performance of another class of shares of the same fund because of different
sales charges and class expenses. Contact your investment professional to
discuss which class is appropriate for you.
In determining which class of shares is appropriate for you, you should
consider, among other factors, the amount you plan to invest, the length of time
you intend to hold your shares, your eligibility for a sales charge waiver or
reduction, and the package of services provided to you by your investment
professional and the overall costs of those services.
<PAGE>
In general, Class A shares have higher costs than Class T shares over a short
holding period because Class A shares have a higher front-end sales charge, and
Class A shares have lower costs than Class T shares over a longer holding period
because Class A shares have lower 12b-1 fees. If you are planning to invest a
significant amount either at one time or through a regular investment program,
you should consider the reduced front-end sales charges available on Class A and
Class T shares. If you are eligible for a front-end sales charge waiver on a
purchase of both Class A and Class T shares, Class A shares generally will have
lower costs than Class T shares because Class A shares have lower 12b-1 fees.
However, you should evaluate the overall costs of purchasing Class A shares or
Class T shares in the context of the package of services provided to you by your
investment professional. See "Transaction Details," page , and "Sales
Charge Reductions and Waivers," page , for sales charge reduction and
waiver information.
If you prefer not to pay a front-end sales charge, you should consider Class B
or Class C shares. While Class B and Class C shares are subject to higher
ongoing costs than Class A or Class T shares, in general because of their higher
12b-1 fees, Class B and Class C shares are sold with a CDSC instead of a
front-end sales charge so your entire purchase amount is immediately invested.
In general, Class B shares have higher costs than Class C shares over a short
holding period because Class B shares have a higher CDSC that declines over a
maximum of six years, and Class B shares have lower costs than Class C shares
over a longer period because Class B shares convert to Class A shares after a
maximum of seven years. Please note that purchase amounts of more than $250,000
will not be accepted for Class B shares, that purchase amounts of more than
$1,000,000 generally will not be accepted for Class C shares, and that Class A
or Class T shares may have lower costs for investments that qualify for a
front-end sales charge reduction or waiver. See "How to Buy Shares," page
, for more information on the maximum purchase amount for Class C shares.
If you sell your Class B shares of the Intermediate-Term Bond Funds within three
years or your Class B shares of the Bond Funds and the Equity Funds within six
years, you will normally pay a CDSC that varies depending on how long you have
held your shares. If you sell your Class C shares within one year, you will
normally pay a 1.00% CDSC. See "Transaction Details," page , for CDSC
schedules and related information. Class B shares will automatically convert to
Class A shares after a holding period of four years for the Intermediate-Term
Bond Funds and seven years for the Bond Funds and the Equity Funds. Class C
shares do not convert to another class of shares. See "Transaction Details,"
page , for conversion information.
The Board of Trustees of Fidelity Advisor Short-Intermediate Municipal Income
Fund has unanimously approved an Agreement and Plan of Reorganization
("Agreement") between Fidelity Advisor Short-Intermediate Municipal Income Fund
and Fidelity Advisor Intermediate Municipal Income Fund, a fund of Fidelity
Advisor Series VI. The agreement will be presented to Fidelity Advisor
Short-Intermediate Municipal Income Fund shareholders for their vote of approval
or disapproval at a special meeting to be held on May 4, 1998. If the proposal
is approved at the meeting by a majority of Fidelity Advisor Short-Intermediate
Municipal Income Fund's shareholders and certain conditions required by the
Agreement are satisfied, the Reorganization is expected to become effective on
or about May 28, 1998.
Effective January 1, 1998 Fidelity Advisor Short-Intermediate Municipal
Income Fund was closed to new accounts pending the reorganization.
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you may pay when you buy or sell
shares of a fund. In addition, you may be charged an annual account maintenance
fee if your account balance falls below $2,500. Lower front-end sales charges
may be available with purchases of $50,000 or more. See "Transaction Details,"
page , for an explanation of how and when these charges apply.
A CDSC is imposed on Class B shares only if you redeem Class B shares within
three years of purchase for the Intermediate-Term Bond Funds, or within six
years of purchase for the Bond Funds and the Equity Funds. A CDSC is imposed on
Class C shares only if you redeem Class C shares within one year of purchase.
See "Transaction Details," page , for information about the CDSC.
<TABLE>
<CAPTION>
CLASS A CLASS T CLASS B CLASS C
<S> <C> <C> <C> <C>
MAXIMUM SALES CHARGE (AS A % OF OFFERING PRICE)
ON PURCHASES OF: TECHNOQUANT GROWTH, MID CAP,
EQUITY GROWTH, GROWTH OPPORTUNITIES, STRATEGIC
OPPORTUNITIES*, LARGE CAP, GROWTH & INCOME,
EQUITY INCOME, AND BALANCED (THE EQUITY FUNDS) 5.75% 3.50% NONE NONE
MAXIMUM SALES CHARGE (AS A % OF OFFERING PRICE)
ON PURCHASES OF: HIGH YIELD, STRATEGIC INCOME,
MORTGAGE SECURITIES*, GOVERNMENT INVESTMENT, AND
MUNICIPAL INCOME (THE BOND FUNDS) 4.75% 3.50% NONE NONE
MAXIMUM SALES CHARGE (AS A % OF OFFERING PRICE)
ON PURCHASES OF: INTERMEDIATE BOND AND
INTERMEDIATE MUNICIPAL INCOME
(THE INTERMEDIATE-TERM BOND FUNDS) 3.75% 2.75% NONE NONE
MAXIMUM SALES CHARGE (AS A % OF OFFERING PRICE)
ON PURCHASES OF: SHORT FIXED-INCOME AND
SHORT-INTERMEDIATE MUNICIPAL INCOME*
(THE SHORT-TERM BOND FUNDS) 1.50% 1.50% ** NONE
MAXIMUM CDSC FOR ALL EQUITY AND BOND FUNDS
(AS A % OF THE LESSER OF ORIGINAL PURCHASE PRICE OR
REDEMPTION PROCEEDS) NONE[A] NONE[A] 5.00%[B] 1.00%[D]
MAXIMUM CDSC FOR THE INTERMEDIATE-TERM BOND
FUNDS (AS A % OF THE LESSER OF ORIGINAL PURCHASE
PRICE OR REDEMPTION PROCEEDS) NONE[A] NONE[A] 3.00%[C] 1.00%[D]
MAXIMUM CDSC FOR SHORT FIXED-INCOME AND
SHORT-INTERMEDIATE MUNICIPAL INCOME*
(AS A % OF THE LESSER OF ORIGINAL PURCHASE PRICE OR
REDEMPTION PROCEEDS) NONE[A] NONE[A] ** 1.00%[D]
SALES CHARGE ON REINVESTED DISTRIBUTIONS NONE NONE NONE NONE
ANNUAL ACCOUNT MAINTENANCE FEE
(FOR ACCOUNTS UNDER $2,500) $12.00 $12.00 $12.00 $12.00
<FN>
* FUND DOES NOT OFFER CLASS C SHARES.
** FUNDS DO NOT OFFER CLASS B SHARES.
</TABLE>
<PAGE>
[A] A CDSC OF 0.25% IS ASSESSED ON CERTAIN REDEMPTIONS OF CLASS A AND CLASS T
SHARES
ON WHICH A FINDER'S FEE WAS PAID. SEE "TRANSACTION DETAILS," PAGE.
[B] DECLINES OVER 6 YEARS FROM 5.00% TO 0%.
[C] DECLINES OVER 3 YEARS FROM 3.00% TO 0%.
[D] ON CLASS C SHARES REDEEMED WITHIN 1 YEAR OF PURCHASE.
ANNUAL OPERATING EXPENSES are paid out of each fund's assets. Each fund pays a
management fee to Fidelity Management & Research Company (FMR) that, for Growth
Opportunities and Strategic Opportunities, varies based on performance. Each
fund also incurs other expenses for services such as maintaining shareholder
records and furnishing shareholder statements and financial reports.
12b-1 fees for Class A, Class T, Class B, and Class C include a distribution fee
and, for Class B and Class C, a shareholder service fee. Distribution fees are
paid by each class of each fund to FDC for services and expenses in connection
with the distribution of the applicable class's shares. Shareholder service fees
are paid by Class B and Class C of the funds to FDC for services and expenses in
connection with providing personal service to and/or maintenance of Class B and
Class C shareholder accounts. Long-term shareholders may pay more than the
economic equivalent of the maximum sales charges permitted by the National
Association of Securities Dealers, Inc., due to 12b-1 fees.
Each class's expenses are factored into its share price or dividends and are not
charged directly to shareholder accounts (see "Breakdown of Expenses" on
page 67).
The following figures are based on estimated or historical expenses, adjusted to
reflect current fees, of each class of each fund and are calculated as a
percentage of average net assets of the applicable class of each fund.
<PAGE>
<TABLE>
<CAPTION>
EQUITY FUNDS
OPERATING EXPENSES CLASS A CLASS T CLASS B CLASS C
<S> <C> <C> <C> <C> <C>
TECHNOQUANT MANAGEMENT FEE 0.60% 0.60% 0.60% 0.60%
GROWTH
12B-1 FEE (INCLUDING 0.25% SHAREHOLDER SERVICE FEE FOR
CLASS B AND CLASS C SHARES) 0.25% 0.50% 1.00% 1.00%
OTHER EXPENSES (AFTER REIMBURSEMENT) 0.90% 0.90% 0.90% 0.90%[A]
TOTAL OPERATING EXPENSES 1.75% 2.00% 2.50% 2.50%
MID CAP MANAGEMENT FEE 0.60% 0.60% 0.60% 0.60%
12B-1 FEE (INCLUDING 0.25% SHAREHOLDER SERVICE FEE FOR
CLASS B AND CLASS C SHARES) 0.25% 0.50% 1.00% 1.00%
OTHER EXPENSES (AFTER REIMBURSEMENT CLASS A AND CLASS C) 0.90% 0.38% 0.43% 0.90%[A]
TOTAL OPERATING EXPENSES 1.75% 1.48% 2.03% 2.50%
EQUITY MANAGEMENT FEE 0.60% 0.60% 0.60% 0.60%
GROWTH
12B-1 FEE (INCLUDING 0.25% SHAREHOLDER SERVICE FEE FOR
CLASS B AND CLASS C SHARES) 0.25% 0.50% 1.00% 1.00%
OTHER EXPENSES (AFTER REIMBURSEMENT CLASS A, CLASS B, AND CLASS C) 0.35% 0.21% 0.35% 0.35%[A]
TOTAL OPERATING EXPENSES 1.20% 1.31% 1.95% 1.95%
GROWTH MANAGEMENT FEE 0.49% 0.49% 0.49% 0.49%
OPPORTUNITIES
12B-1 FEE (INCLUDING 0.25% SHAREHOLDER SERVICE FEE FOR
CLASS B AND CLASS C SHARES) 0.25% 0.50% 1.00% 1.00%
OTHER EXPENSES 0.31% 0.19% 0.32%[A] 0.29%[A]
TOTAL OPERATING EXPENSES 1.05% 1.18% 1.81% 1.78%
STRATEGIC MANAGEMENT FEE 0.40% 0.40% 0.40% *
OPPORTUNITIES
12B-1 FEE (INCLUDING 0.25% SHAREHOLDER SERVICE FEE FOR
CLASS B SHARES) 0.25% 0.50% 1.00% *
OTHER EXPENSES (AFTER REIMBURSEMENT CLASS A) 1.10% 0.34% 0.38% *
TOTAL OPERATING EXPENSES 1.75% 1.24% 1.78% *
LARGE CAP MANAGEMENT FEE 0.60% 0.60% 0.60% 0.60%
12B-1 FEE (INCLUDING 0.25% SHAREHOLDER SERVICE FEE FOR
CLASS B AND CLASS C SHARES) 0.25% 0.50% 1.00% 1.00%
OTHER EXPENSES (AFTER REIMBURSEMENT CLASS A AND CLASS C) 0.90% 0.52% 0.56% 0.90%[A]
TOTAL OPERATING EXPENSES 1.75% 1.62% 2.16% 2.50%
GROWTH & MANAGEMENT FEE 0.50% 0.50% 0.50% 0.50%
INCOME
12B-1 FEE (INCLUDING 0.25% SHAREHOLDER SERVICE FEE FOR
CLASS B AND CLASS C SHARES) 0.25% 0.50% 1.00% 1.00%
OTHER EXPENSES (AFTER REIMBURSEMENT CLASS A, CLASS B, AND CLASS C) 0.75% 0.59% 0.75% 0.75%[A]
TOTAL OPERATING EXPENSES 1.50% 1.59% 2.25% 2.25%
EQUITY MANAGEMENT FEE 0.50% 0.50% 0.50% 0.50%
INCOME
12B-1 FEE (INCLUDING 0.25% SHAREHOLDER SERVICE FEE FOR
CLASS B AND CLASS C SHARES) 0.25% 0.50% 1.00% 1.00%
OTHER EXPENSES (AFTER REIMBURSEMENT CLASS A AND CLASS C) 0.35% 0.23% 0.24% 0.35%[A]
TOTAL OPERATING EXPENSES 1.10% 1.23% 1.74% 1.85%
BALANCED MANAGEMENT FEE 0.45% 0.45% 0.45% 0.45%
12B-1 FEE (INCLUDING 0.25% SHAREHOLDER SERVICE FEE FOR
CLASS B AND CLASS C SHARES) 0.25% 0.50% 1.00% 1.00%
OTHER EXPENSES (AFTER REIMBURSEMENT CLASS A, CLASS B, AND CLASS C) 0.35% 0.22% 0.35% 0.35%[A]
TOTAL OPERATING EXPENSES 1.05% 1.17% 1.80% 1.80%
<FN>
* FUND DOES NOT OFFER CLASS C SHARES.
[A] BASED ON ESTIMATED EXPENSES FOR FIRST YEAR.
</TABLE>
<PAGE>
TAXABLE INCOME FUNDS
<TABLE>
<CAPTION>
OPERATING EXPENSES CLASS A CLASS T CLASS B CLASS C
<S> <C> <C> <C> <C> <C>
HIGH YIELD MANAGEMENT FEE 0.59% 0.59% 0.59% 0.59%
12B-1 FEE (INCLUDING 0.25% SHAREHOLDER SERVICE FEE FOR
CLASS B AND CLASS C SHARES) 0.15% 0.25% 0.90% 1.00%
OTHER EXPENSES 0.41% 0.25% 0.25% 0.32%[A]
TOTAL OPERATING EXPENSES 1.15% 1.09% 1.74% 1.91%
STRATEGIC MANAGEMENT FEE 0.59% 0.59% 0.59% 0.59%
INCOME
12B-1 FEE (INCLUDING 0.25% SHAREHOLDER SERVICE FEE FOR
CLASS B AND CLASS C SHARES) 0.15% 0.25% 0.90% 1.00%
OTHER EXPENSES (AFTER REIMBURSEMENT CLASS A AND CLASS C) 0.51% 0.36% 0.37% 0.51%[A]
TOTAL OPERATING EXPENSES 1.25% 1.20% 1.86% 2.10%
MORTGAGE MANAGEMENT FEE 0.44% 0.44% 0.44% *
SECURITIES
12B-1 FEE (INCLUDING 0.25% SHAREHOLDER SERVICE FEE FOR CLASS B SHARES) 0.15% 0.25% 0.90% *
OTHER EXPENSES (AFTER REIMBURSEMENT) 0.31%[A] 0.31%[A] 0.31%[A] *
TOTAL OPERATING EXPENSES 0.90% 1.00% 1.65% *
GOVERNMENT MANAGEMENT FEE 0.44% 0.44% 0.44% 0.44%
INVESTMENT
12B-1 FEE (INCLUDING 0.25% SHAREHOLDER SERVICE FEE FOR
CLASS B AND CLASS C SHARES) 0.15% 0.25% 0.90% 1.00%
OTHER EXPENSES (AFTER REIMBURSEMENT) 0.31% 0.31% 0.31% 0.31%[A]
TOTAL OPERATING EXPENSES 0.90% 1.00% 1.65% 1.75%
INTERMEDIATE MANAGEMENT FEE 0.44% 0.44% 0.44% 0.44%
BOND
12B-1 FEE (INCLUDING 0.25% SHAREHOLDER SERVICE FEE FOR
CLASS B AND CLASS C SHARES) 0.15% 0.25% 0.90% 1.00%
OTHER EXPENSES (AFTER REIMBURSEMENT CLASS A, CLASS B, AND CLASS C) 0.31% 0.27% 0.31% 0.31%[A]
TOTAL OPERATING EXPENSES 0.90% 0.96% 1.65% 1.75%
SHORT MANAGEMENT FEE 0.44% 0.44% ** 0.44%
FIXED-INCOME
12B-1 FEE (INCLUDING 0.25% SHAREHOLDER SERVICE FEE FOR CLASS C SHARES) 0.15% 0.15% ** 1.00%
OTHER EXPENSES (AFTER REIMBURSEMENT CLASS A AND CLASS C) 0.31% 0.30% ** 0.31%[A]
TOTAL OPERATING EXPENSES 0.90% 0.89% ** 1.75%
<FN>
* FUND DOES NOT OFFER CLASS C SHARES.
** FUND DOES NOT OFFER CLASS B SHARES.
[A] BASED ON ESTIMATED EXPENSES FOR FIRST YEAR.
</TABLE>
<PAGE>
MUNICIPAL FUNDS
<TABLE>
<CAPTION>
OPERATING EXPENSES CLASS A CLASS T CLASS B CLASS C
<S> <C> <C> <C> <C> <C>
MUNICIPAL MANAGEMENT FEE 0.39% 0.39% 0.39% 0.39%
INCOME
12B-1 FEE (INCLUDING 0.25% SHAREHOLDER SERVICE FEE FOR CLASS B
AND CLASS C SHARES) 0.15% 0.25% 0.90% 1.00%
OTHER EXPENSES (AFTER REIMBURSEMENT CLASS A AND CLASS C) 0.36% 0.25% 0.27% 0.36%[A]
TOTAL OPERATING EXPENSES 0.90% 0.89% 1.56% 1.75%
INTERMEDIATE MANAGEMENT FEE 0.39% 0.39% 0.39% 0.39%
MUNICIPAL
INCOME
12B-1 FEE (INCLUDING 0.25% SHAREHOLDER SERVICE FEE FOR
CLASS B AND CLASS C SHARES) 0.15% 0.25% 0.90% 1.00%
OTHER EXPENSES (AFTER REIMBURSEMENT) 0.36% 0.36% 0.36% 0.36%[A]
TOTAL OPERATING EXPENSES 0.90% 1.00% 1.65% 1.75%
SHORT- MANAGEMENT FEE 0.39% 0.39% ** *
INTERMEDIATE
MUNICIPAL
INCOME
12B-1 FEE (DISTRIBUTION FEE) 0.15% 0.15% ** *
OTHER EXPENSES (AFTER REIMBURSEMENT) 0.36% 0.36% ** *
TOTAL OPERATING EXPENSES 0.90% 0.90% ** *
<FN>
* FUND DOES NOT OFFER CLASS C SHARES.
** FUND DOES NOT OFFER CLASS B SHARES.
[A] BASED ON ESTIMATED EXPENSES FOR THE FIRST YEAR.
</TABLE>
A portion of the brokerage commissions that certain of the funds pay is used to
reduce fund expenses. In addition, certain funds have entered into arrangements
with their custodian and transfer agent whereby credits realized as a result of
uninvested cash balances are used to reduce custodian and transfer agent
expenses. Including these reductions, the total operating expenses presented in
the preceding tables for the applicable class would have been:
<TABLE>
<CAPTION>
CLASS A CLASS T CLASS B
<S> <C> <C> <C>
MID CAP 1.71% 1.44% 1.98%
EQUITY GROWTH 1.18% 1.29% 1.92%
GROWTH OPPORTUNITIES 1.04% 1.17% +
STRATEGIC OPPORTUNITIES 1.73% 1.23% 1.77%
LARGE CAP 1.72% 1.60% 2.14%
EQUITY INCOME 1.09% 1.21% 1.73%
BALANCED 1.04% 1.17% 1.79%
HIGH YIELD 1.14% 1.08% 1.74%
STRATEGIC INCOME 1.24% 1.19% 1.85%
<FN>
+ IMPACT OF CREDITS NOT APPLIED TO FIRST YEAR ESTIMATES.
</TABLE>
<PAGE>
EXPENSE TABLE EXAMPLE: You would pay the following amount in total expenses on a
$1,000 investment, assuming a 5% annual return and either (1) full redemption or
(2) no redemption at the end of each time period. Total expenses shown below
include your shareholder transaction expenses, such as the maximum front-end
sales charge or CDSC, as applicable, and a class's annual operating expenses.
EQUITY FUNDS
<TABLE>
<CAPTION>
EXAMPLES
FULL REDEMPTION NO REDEMPTION
CLASS A CLASS T CLASS B CLASS C CLASS B CLASS C
<S> <C> <C> <C> <C> <C> <C> <C>
TECHNOQUANT GROWTH 1 YEAR $ 74 $ 55 $ 75[A] $ 35[A] $ 25 $ 25
3 YEARS $109 $ 96 $108[A] $ 78 $ 78 $ 78
5 YEARS $147 $139 $153[A] $133 $133 $133
10 YEARS[B] $252 $260 $257 $284 $257 $284
MID CAP 1 YEAR $ 74 $ 50 $ 71[A] $ 35[A] $ 21 $ 25
3 YEARS $109 $ 80 $ 94[A] $ 78 $ 64 $ 78
5 YEARS $147 $113 $129[A] $133 $109 $133
10 YEARS[B] $252 $206 $225 $284 $225 $284
EQUITY GROWTH 1 YEAR $ 69 $ 48 $ 70[A] $ 30[A] $ 20 $ 20
3 YEARS $ 93 $ 75 $ 91[A] $ 61 $ 61 $ 61
5 YEARS $120 $104 $125[A] $105 $105 $105
10 YEARS[B] $195 $187 $199 $227 $199 $227
GROWTH OPPORTUNITIES 1 YEAR $ 68 $ 47 $ 68[A] $ 28[A] $ 18 $ 18
3 YEARS $ 89 $ 71 $ 87[A] $ 56 $ 57 $ 56
5 YEARS $112 $ 98 $118[A] $ 96 $ 98 $ 96
10 YEARS[B] $178 $173 $183 $209 $183 $209
STRATEGIC OPPORTUNITIES 1 YEAR $ 74 $ 47 $ 68[A] * $ 18 *
3 YEARS $109 $ 73 $ 86[A] * $ 56 *
5 YEARS $147 $101 $116[A] * $ 96 *
10 YEARS[B] $252 $180 $208 * $208 *
LARGE CAP 1 YEAR $ 74 $ 51 $ 72[A] $ 35[A] $ 22 $ 25
3 YEARS $109 $ 84 $ 98[A] $ 78 $ 68 $ 78
5 YEARS $147 $120 $136[A] $133 $116 $133
10 YEARS[B] $252 $220 $234 $284 $234 $284
GROWTH & INCOME 1 YEAR $ 72 $ 51 $ 73[A] $ 33[A] $ 23 $ 23
3 YEARS $102 $ 83 $100[A] $ 70 $ 70 $ 70
5 YEARS $135 $119 $140[A] $120 $120 $120
10 YEARS[B] $226 $217 $231 $258 $231 $258
EQUITY INCOME 1 YEAR $ 68 $ 47 $ 63[A] $ 29[A] $ 13 $ 19
3 YEARS $ 90 $ 73 $ 69[A] $ 58 $ 39 $ 58
5 YEARS $115 $100 $ 88[A] $100 $ 68 $100
10 YEARS[B] $184 $179 $144 $217 $144 $217
BALANCED 1 YEAR $ 68 $ 47 $ 68[A] $ 28[A] $ 18 $ 18
3 YEARS $ 89 $ 71 $ 87[A] $ 57 $ 57 $ 57
5 YEARS $112 $ 97 $117[A] $ 97 $ 97 $ 97
10 YEARS[B] $178 $172 $183 $212 $183 $212
<FN>
* FUND DOES NOT OFFER CLASS C SHARES.
[A] REFLECTS DEDUCTION OF APPLICABLE CDSC.
[B] REFLECTS CONVERSION OF CLASS B SHARES TO CLASS A SHARES AFTER SEVEN YEARS.
</TABLE>
<PAGE>
TAXABLE INCOME FUNDS
<TABLE>
<CAPTION>
EXAMPLES
FULL REDEMPTION NO REDEMPTION
CLASS A CLASS T CLASS B CLASS C CLASS B CLASS C
<S> <C> <C> <C> <C> <C> <C> <C>
HIGH YIELD 1 YEAR $ 59 $ 46 $ 68[A] $ 29[A] $ 18 $ 19
3 YEARS $ 82 $ 68 $ 85[A] $ 60 $ 55 $ 60
5 YEARS $108 $ 93 $114[A] $103 $ 94 $103
10 YEARS[B] $181 $163 $182 $223 $182 $223
STRATEGIC INCOME 1 YEAR $ 60 $ 47 $ 69[A] $ 31[A] $ 19 $ 21
3 YEARS $ 85 $ 72 $ 88[A] $ 66 $ 58 $ 66
5 YEARS $113 $ 99 $121[A] $113 $101 $113
10 YEARS[B] $191 $175 $195 $243 $195 $243
MORTGAGE SECURITIES 1 YEAR $ 56 $ 45 $ 67[A] * $ 17 *
3 YEARS $ 75 $ 66 $ 82[A] * $ 52 *
5 YEARS $ 95 $ 88 $110[A] * $ 90 *
10 YEARS[B] $153 $153 $166 * $166 *
GOVERNMENT INVESTMENT 1 YEAR $ 56 $ 45 $ 67[A] $ 28[A] $ 17 $ 18
3 YEARS $ 75 $ 66 $ 82[A] $ 55 $ 52 $ 55
5 YEARS $ 95 $ 88 $110[A] $ 95 $ 90 $ 95
10 YEARS[B] $153 $153 $166 $206 $166 $206
INTERMEDIATE BOND 1 YEAR $ 46 $ 37 $ 47[A] $ 28[A] $ 17 $ 18
3 YEARS $ 65 $ 57 $ 62[A] $ 55 $ 52 $ 55
5 YEARS[C] $ 85 $ 79 $ 81 $ 95 $ 81 $ 95
10 YEARS[C] $144 $142 $140 $206 $140 $206
SHORT FIXED-INCOME 1 YEAR $ 24 $ 24 ** $ 28[A] ** $ 18
3 YEARS $ 43 $ 43 ** $ 55 ** $ 55
5 YEARS $ 64 $ 64 ** $ 95 ** $ 95
10 YEARS $124 $123 ** $206 ** $206
<FN>
* FUND DOES NOT OFFER CLASS C SHARES.
** FUND DOES NOT OFFER CLASS B SHARES.
[A] REFLECTS DEDUCTION OF APPLICABLE CDSC.
[B] REFLECTS CONVERSION OF CLASS B SHARES TO CLASS A SHARES AFTER SEVEN YEARS.
[C] REFLECTS CONVERSION OF CLASS B SHARES TO CLASS A SHARES AFTER FOUR YEARS.
</TABLE>
<PAGE>
MUNICIPAL FUNDS
<TABLE>
<CAPTION>
EXAMPLES
FULL REDEMPTION NO REDEMPTION
CLASS A CLASS T CLASS B CLASS C CLASS B CLASS C
<S> <C> <C> <C> <C> <C> <C> <C>
MUNICIPAL INCOME 1 YEAR $ 56 $ 44 $ 66[A] $ 28[A] $ 16 $ 18
3 YEARS $ 75 $ 62 $ 79[A] $ 55 $ 49 $ 55
5 YEARS $ 95 $ 83 $105[A] $ 95 $ 85 $ 95
10 YEARS[B] $153 $141 $160 $206 $160 $206
INTERMEDIATE MUNICIPAL INCOME 1 YEAR $ 46 $ 37 $ 47[A] $ 28[A] $ 17 $ 18
3 YEARS $ 65 $ 58 $ 62[A] $ 55 $ 52 $ 55
5 YEARS[C] $ 85 $ 81 $ 81 $ 95 $ 81 $ 95
10 YEARS[C] $144 $147 $140 $206 $140 $206
SHORT-INTERMEDIATE MUNICIPAL INCOME 1 YEAR $ 24 $ 24 ** * ** *
3 YEARS $ 43 $ 43 ** * ** *
5 YEARS $ 64 $ 64 ** * ** *
10 YEARS $124 $124 ** * ** *
<FN>
* FUND DOES NOT OFFER CLASS C SHARES.
** FUND DOES NOT OFFER CLASS B SHARES.
[A] REFLECTS DEDUCTION OF APPLICABLE CDSC.
[B] REFLECTS CONVERSION OF CLASS B SHARES TO CLASS A SHARES AFTER SEVEN YEARS.
[C] REFLECTS CONVERSION OF CLASS B SHARES TO CLASS A SHARES AFTER FOUR YEARS.
</TABLE>
THESE EXAMPLES ILLUSTRATE THE EFFECT OF EXPENSES, BUT ARE NOT MEANT TO SUGGEST
ACTUAL OR EXPECTED EXPENSES OR RETURNS, ALL OF WHICH MAY VARY.
FMR has voluntarily agreed to reimburse Class A, Class T, Class B, and Class C
of each fund to the extent that total operating expenses, as a percentage of
their respective average net assets, exceed the following rates:
<TABLE>
<CAPTION>
CLASS A EFFECTIVE DATE CLASS T EFFECTIVE DATE CLASS B EFFECTIVE DATE
<S> <C> <C> <C> <C> <C> <C>
TECHNOQUANT GROWTH 1.75% 12/31/96 2.00% 12/31/96 2.50% 12/31/96
MID CAP 1.75%+ 8/30/96 2.00% 2/20/96 2.50% 2/20/96
EQUITY GROWTH 1.20% 11/1/97 1.45% 11/1/97 1.95%+ 11/1/97
GROWTH OPPORTUNITIES 1.10% 11/1/97 1.35% 11/1/97 1.85% 11/1/97
STRATEGIC OPPORTUNITIES 1.75%+ 3/1/97 2.00% 3/1/97 2.50% 3/1/97
LARGE CAP 1.75% 8/30/96 2.00% 2/20/96 2.50% 2/20/96
GROWTH & INCOME 1.50% 12/31/96 1.75% 12/31/96 2.25% 12/31/96
EQUITY INCOME 1.10% 11/1/97 1.35% 11/1/97 1.85% 11/1/97
BALANCED 1.05% 11/1/97 1.30% 11/1/97 1.80% 11/1/97
HIGH YIELD 1.25% 8/30/96 1.35% 7/1/95 2.00% 1/1/96
STRATEGIC INCOME 1.25% 8/30/96 1.35% 10/31/94 2.00% 1/1/96
MORTGAGE SECURITIES 0.90% 3/1/97 1.00% 3/1/97 1.65% 3/1/97
GOVERNMENT INVESTMENT 0.90% 8/30/96 1.00% 7/1/95 1.65% 1/1/96
INTERMEDIATE BOND 0.90% 8/30/96 1.00% 7/1/95 1.65% 1/1/96
SHORT FIXED-INCOME 0.90% 8/30/96 0.90% 8/30/96 ** **
MUNICIPAL INCOME 0.90% 8/30/96 1.00% 7/1/95 1.65% 1/1/96
INTERMEDIATE MUNICIPAL INCOME 0.90% 8/30/96 1.00% 7/1/95 1.65% 1/1/96
SHORT-INTERMEDIATE MUNICIPAL INCOME 0.90% 8/30/96 0.90% 7/1/95 ** **
</TABLE>
<TABLE>
<CAPTION>
CLASS C EFFECTIVE DATE
<S> <C> <C>
TECHNOQUANT GROWTH 2.50% 11/1/97
MID CAP 2.50% 11/1/97
EQUITY GROWTH 1.95% 11/1/97
GROWTH OPPORTUNITIES 1.85% 11/1/97
STRATEGIC OPPORTUNITIES * *
LARGE CAP 2.50% 11/1/97
GROWTH & INCOME 2.25% 11/1/97
EQUITY INCOME 1.85% 11/1/97
BALANCED 1.80% 11/1/97
HIGH YIELD 2.10% 11/1/97
STRATEGIC INCOME 2.10% 11/1/97
MORTGAGE SECURITIES * *
GOVERNMENT INVESTMENT 1.75% 11/1/97
INTERMEDIATE BOND 1.75% 11/1/97
SHORT FIXED-INCOME 1.75% 11/1/97
MUNICIPAL INCOME 1.75% 11/1/97
INTERMEDIATE MUNICIPAL INCOME 1.75% 11/1/97
SHORT-INTERMEDIATE MUNICIPAL INCOME * *
<FN>
* FUND DOES NOT OFFER CLASS C SHARES.
** FUND DOES NOT OFFER CLASS B SHARES.
+ FMR ALSO REIMBURSED CERTAIN TRANSFER AGENT, REGISTRATION, AND OTHER
CLASS SPECIFIC EXPENSES.
</TABLE>
<PAGE>
If these agreements were not in effect, other expenses and total operating
expenses, as a percentage of average net assets, would have been the following
amounts:
<TABLE>
<CAPTION>
OTHER EXPENSES TOTAL OPERATING EXPENSES
CLASS A CLASS T CLASS B CLASS C[A] CLASS A CLASS T CLASS B CLASS C[A]
<S> <C> <C> <C> <C> <C> <C> <C> <C>
TECHNOQUANT GROWTH 1.56% 1.11% 1.27% 1.34% 2.41% 2.21% 2.87% 2.94%
MID CAP 1.43% + + 1.11% 2.28% + + 2.71%
EQUITY GROWTH 0.49% + 0.41% 0.56% 1.34% + 2.01% 2.16%
STRATEGIC OPPORTUNITIES 3.06% + + * 3.71% + + *
LARGE CAP 2.28% + + 1.49% 3.13% + + 3.09%
GROWTH & INCOME 1.71% + 0.79% 0.92% 2.46% + 2.29% 2.42%
EQUITY INCOME 0.53% + + 0.38% 1.28% + + 1.88%
BALANCED 0.97% + 0.67% 0.94% 1.67% + 2.12% 2.39%
STRATEGIC INCOME 2.14% + + 0.85% 2.88% + + 2.44%
MORTGAGE SECURITIES 3.05%[A] 0.92%[A] 4.24%[A] * 3.64%[A] 1.61%[A] 5.58%[A] *
GOVERNMENT INVESTMENT 4.39% 0.34% 0.39% 2.35% 4.98% 1.03% 1.73% 3.79%
INTERMEDIATE BOND 1.83% + 0.40% 1.78% 2.42% + 1.74% 3.22%
SHORT FIXED-INCOME 1.23% + ** 1.29% 1.82% + ** 2.73%
MUNICIPAL INCOME 1.62% + + 1.54% 2.16% + + 2.93%
INTERMEDIATE MUNICIPAL INCOME 8.83% 0.40% 0.56% 1.39% 9.37% 1.04% 1.85% 2.78%
SHORT-INTERMEDIATE MUNICIPAL
INCOME 8.86% 0.69% ** * 9.40% 1.23% ** *
<FN>
* FUND DOES NOT OFFER CLASS C SHARES.
** FUND DOES NOT OFFER CLASS B SHARES.
[A] BASED ON ESTIMATED EXPENSES FOR THE FIRST YEAR.
+ TOTAL OPERATING EXPENSES WERE LESS THAN THE VOLUNTARY EXPENSE CAPS
SHOWN IN THE TABLE ON THE PREVIOUS PAGE.
</TABLE>
Expenses eligible for reimbursement do not include interest, taxes, brokerage
commissions, and extraordinary expenses.
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights tables that follow contain annual information which has
been audited by Coopers & Lybrand L.L.P., or Price Waterhouse LLP, (TechnoQuant
Growth, Growth & Income, and Mortgage Securities only) independent accountants.
The funds' financial highlights, financial statements, and reports of the
auditors are included in each fund's Annual Report, and are incorporated by
reference into (are legally a part of) the funds' SAI. Contact FDC or your
investment professional for a free copy of an Annual Report or the SAI. Class C
of each fund (except Strategic Opportunities, Mortgage Securities, and
Short-Intermediate Municipal Income) commenced operations on November 3, 1997.
<TABLE>
<CAPTION>
TECHNOQUANT GROWTH - CLASS A
SELECTED PER-SHARE DATA AND RATIOS (D)
YEAR ENDED NOVEMBER 30 1997(G)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) (.07)
NET REALIZED AND UNREALIZED GAIN (LOSS) 1.45
TOTAL FROM INVESTMENT OPERATIONS 1.38
NET ASSET VALUE, END OF PERIOD $ 11.38
TOTAL RETURN, 13.80%
NET ASSETS, END OF PERIOD (000 OMITTED) $ 5,376
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.75%(A),(E)
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.73)%(A)
PORTFOLIO TURNOVER 213%(A)
AVERAGE COMMISSION RATE $ .0311
TECHNOQUANT GROWTH - CLASS T
</TABLE>
<TABLE>
<CAPTION>
SELECTED PER-SHARE DATA AND RATIOS (D)
YEAR ENDED NOVEMBER 30 1997(G)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) (.10)
NET REALIZED AND UNREALIZED GAIN (LOSS) 1.46
TOTAL FROM INVESTMENT OPERATIONS 1.36
NET ASSET VALUE, END OF PERIOD $ 11.36
TOTAL RETURN (B),(C) 13.60%
NET ASSETS, END OF PERIOD (000 OMITTED) $20,283
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.00%(A),(E)
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (1.00)%(A)
PORTFOLIO TURNOVER 213%(A)
AVERAGE COMMISSION RATE (F) $ .0311
<FN>
(A) ANNUALIZED
(B) THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
(C) TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
(D) NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
(E) FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE BEEN HIGHER.
(F) A FUND IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM
PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED IN
VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES MAY
DIFFER.
(G) FOR THE PERIOD DECEMBER 31, 1996 (COMMENCEMENT OF SALE OF CLASS A AND
CLASS T SHARES) TO NOVEMBER 30, 1997.
</TABLE>
<PAGE>
KEY FACTS - CONTINUED
TECHNOQUANT GROWTH - CLASS B
<TABLE>
<CAPTION>
<S> <C>
SELECTED PER-SHARE DATA AND RATIOS(D)
YEAR ENDED NOVEMBER 30 1997G
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) (.15)
NET REALIZED AND UNREALIZED GAIN (LOSS) 1.46
TOTAL FROM INVESTMENT OPERATIONS 1.31
NET ASSET VALUE, END OF PERIOD $ 11.31
TOTAL RETURN(B),(C) 13.10%
NET ASSETS, END OF PERIOD (000 OMITTED) $11,370
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.50%A,E
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (1.51)%A
PORTFOLIO TURNOVER 213%A
AVERAGE COMMISSION RATE(F) $ .0311
</TABLE>
TECHNOQUANT GROWTH - CLASS C
<TABLE>
<CAPTION>
SELECTED PER-SHARE DATA AND RATIOS(D)
YEAR ENDED NOVEMBER 30 1997H
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.85
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) --
NET REALIZED AND UNREALIZED GAIN (LOSS) (.49)
TOTAL FROM INVESTMENT OPERATIONS (.49)
NET ASSET VALUE, END OF PERIOD $ 11.36
TOTAL RETURN(B),(C) (4.14)%
NET ASSETS, END OF PERIOD (000 OMITTED) $ 48
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.50%A,E
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.60)%A
PORTFOLIO TURNOVER 213%A
AVERAGE COMMISSION RATEF $ .0311
<FN>
(A) ANNUALIZED
(B) THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
(C) TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
(D) NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
(E) FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE BEEN HIGHER.
(F) A FUND IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM
PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED IN
VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES MAY
DIFFER.
(G) FOR THE PERIOD DECEMBER 31, 1996 (COMMENCEMENT OF SALE OF CLASS B SHARES) TO
NOVEMBER 30, 1997.
(H) FOR THE PERIOD NOVEMBER 3, 1997 (COMMENCEMENT OF SALE OF CLASS C SHARES) TO
NOVEMBER 30, 1997.
</TABLE>
<PAGE>
MID CAP - CLASS A
<TABLE>
<CAPTION>
SELECTED PER-SHARE DATA AND RATIOS(D)
YEARS ENDED NOVEMBER 30 1997 1996H
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $11.70 $10.74
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) (.09) (.01)
NET REALIZED AND UNREALIZED GAIN (LOSS) 2.64 .97
TOTAL FROM INVESTMENT OPERATIONS 2.55 .96
LESS DISTRIBUTIONS
FROM NET REALIZED GAIN (.21) --
NET ASSET VALUE, END OF PERIOD $14.04 $11.70
TOTAL RETURN(B),(C) 22.24% 8.94%
NET ASSETS, END OF PERIOD (000 OMITTED) $4,670 $1,239
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.62%E 1.56%A,E
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.58%F 1.56%A
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.71)% (.33)%A
PORTFOLIO TURNOVER 208% 101%A
AVERAGE COMMISSION RATE(G) $.0401 $.0382
</TABLE>
MID CAP - CLASS T
<TABLE>
<CAPTION>
SELECTED PER-SHARE DATA AND RATIOS(D)
YEARS ENDED NOVEMBER 30 1997 1996I
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.70 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) (.07) (.03)
NET REALIZED AND UNREALIZED GAIN (LOSS) 2.64 1.73
TOTAL FROM INVESTMENT OPERATIONS 2.57 1.70
LESS DISTRIBUTIONS
FROM NET REALIZED GAIN (.18) --
NET ASSET VALUE, END OF PERIOD $ 14.09 $ 11.70
TOTAL RETURN (B),(C) 22.35% 17.00%
NET ASSETS, END OF PERIOD (000 OMITTED) $326,642 $187,040
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.48% 1.60%A
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.44%F 1.60%A
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.53)% (.37)%A
PORTFOLIO TURNOVER 208% 101%A
AVERAGE COMMISSION RATE (G) $ .0401 $ .0382
<FN>
(A) ANNUALIZED
(B) THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
(C) TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
(D) NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
(E) FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE BEEN HIGHER.
(F) FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
(G) A FUND IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM
PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED IN
VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES MAY
DIFFER.
(H) FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A SHARES) TO
NOVEMBER 30, 1996.
(I) FOR THE PERIOD FEBRUARY 20, 1996 (COMMENCEMENT OF SALE OF CLASS T SHARES) TO
NOVEMBER 30, 1996.
</TABLE>
<PAGE>
MID CAP - CLASS B
<TABLE>
<CAPTION>
SELECTED PER-SHARE DATA AND RATIOS(D)
YEARS ENDED NOVEMBER 30 1997 1996 G
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.61 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) (.14) (.10)
NET REALIZED AND UNREALIZED GAIN (LOSS) 2.62 1.71
TOTAL FROM INVESTMENT OPERATIONS 2.48 1.61
LESS DISTRIBUTIONS
FROM NET REALIZED GAIN (.15) --
NET ASSET VALUE, END OF PERIOD $ 13.94 $ 11.61
TOTAL RETURN (B),(C) 21.67% 16.10%
NET ASSETS, END OF PERIOD (000 OMITTED) $58,758 $32,727
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.03% 2.38%A
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.98%E 2.37%A,E
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (1.08)% (1.14)%A
PORTFOLIO TURNOVER 208% 101%A
AVERAGE COMMISSION RATE (F) $ .0401 $ .0382
</TABLE>
MID CAP - CLASS C
<TABLE>
<CAPTION>
SELECTED PER-SHARE DATA AND RATIOS(D)
YEAR ENDED NOVEMBER 30 1997 I
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $14.16
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) (.01)
NET REALIZED AND UNREALIZED GAIN (LOSS) (.07)J
TOTAL FROM INVESTMENT OPERATIONS (.08)
NET ASSET VALUE, END OF PERIOD $14.08
TOTAL RETURN(B),(C) (.56)%
NET ASSETS, END OF PERIOD (000 OMITTED) $ 345
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.50%A,H
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 2.40%A,E
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (1.07)%A
PORTFOLIO TURNOVER 208%
AVERAGE COMMISSION RATE(F) $.0401
<FN>
(A) ANNUALIZED
(B) THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
(C) TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
(D) NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
(E) FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
(F) A FUND IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM
PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED IN
VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES MAY
DIFFER.
(G) FOR THE PERIOD FEBRUARY 20, 1996 (COMMENCEMENT OF SALE OF CLASS B SHARES) TO
NOVEMBER 30, 1996.
(H) FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE BEEN HIGHER.
(I) FOR THE PERIOD NOVEMBER 3, 1997 (COMMENCEMENT OF SALE OF CLASS C SHARES) TO
NOVEMBER 30, 1997.
(J) THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH THE
AGGREGATE NET GAIN ON INVESTMENTS FOR THE PERIOD DUE TO THE TIMING OF SALES AND
REPURCHASES OF CLASS SHARES IN RELATION TO FLUCTUATING MARKET VALUES OF THE
INVESTMENTS OF THE FUND.
</TABLE>
<PAGE>
EQUITY GROWTH - CLASS A
<TABLE>
<CAPTION>
SELECTED PER-SHARE DATA AND RATIOS (E)
YEARS ENDED NOVEMBER 30 1997 1996F
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 44.80 $39.47
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) (.06) .04
NET REALIZED AND UNREALIZED GAIN (LOSS) 8.54 5.29
TOTAL FROM INVESTMENT OPERATIONS 8.48 5.33
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.36) --
FROM NET REALIZED GAIN (1.23) --
TOTAL DISTRIBUTIONS (1.59) --
NET ASSET VALUE, END OF PERIOD $ 51.69 $44.80
TOTAL RETURN(B),(C) 19.73% 13.50%
NET ASSETS, END OF PERIOD (000 OMITTED) $28,522 $4,423
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.32%G 1.52%A,D,G
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.30%H 1.50%A,H
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.12)% .38%A
PORTFOLIO TURNOVER 108% 76%
AVERAGE COMMISSION RATE (I) $ .0427 $.0414
</TABLE>
EQUITY GROWTH - CLASS T
<TABLE>
<CAPTION>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED NOVEMBER 30 1997 1996 1995 1994 1993 1992J
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 44.81 $ 39.83 $ 28.52 $ 29.50 $ 26.33 $ 23.78
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) (.04)E .22E .06 .08 (.07)E .01
NET REALIZED AND UNREALIZED GAIN (LOSS) 8.60 6.90 11.54 .39 3.82 2.54
TOTAL FROM INVESTMENT OPERATIONS 8.56 7.12 11.60 .47 3.75 2.55
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.17) (.03)K (.08) -- (.08) --
FROM NET REALIZED GAIN (1.23) (2.11)K (.16) (1.45) (.50) --
IN EXCESS OF NET REALIZED GAIN -- -- (.05) -- -- --
TOTAL DISTRIBUTIONS (1.40) (2.14) (.29) (1.45) (.58) --
NET ASSET VALUE, END OF PERIOD $ 51.97 $ 44.81 $ 39.83 $ 28.52 $ 29.50 $ 26.33
TOTAL RETURN (B),(C) 19.81% 19.00% 41.11% 1.58% 14.52% 10.72%
NET ASSETS, END OF PERIOD (000 OMITTED) $4,205,772 $3,536,973 $2,051,429 $874,172 $377,894 $22,655
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.31%G 1.36% 1.55% 1.71% 1.85% 1.47%A
RATIO OF EXPENSES TO AVERAGE NET ASSETS
AFTER EXPENSE REDUCTIONS 1.29%H 1.34%H 1.54%H 1.70%H 1.84%H 1.47%A
RATIO OF NET INVESTMENT INCOME (LOSS)
TO AVERAGE NET ASSETS (.08)% .54% .21% .15% (.24)% .25%A
PORTFOLIO TURNOVER 108% 76% 97% 137% 160% 240%
AVERAGE COMMISSION RATE (I) $ .0427 $ .0414
<FN>
(A) ANNUALIZED
(B) THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
(C) TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
(D) LIMITED IN ACCORDANCE WITH A STATE EXPENSE LIMITATION.
(E) NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
(F) FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A SHARES) TO
NOVEMBER 30, 1996.
(G) FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE BEEN HIGHER.
(H) FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
(I) FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS REQUIRED
TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR SECURITY TRADES ON WHICH
COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM PERIOD TO PERIOD AND FUND TO
FUND DEPENDING ON THE MIX OF TRADES EXECUTED IN VARIOUS MARKETS WHERE TRADING
PRACTICES AND COMMISSION RATE STRUCTURES MAY DIFFER.
(J) FOR THE PERIOD SEPTEMBER 10, 1992 (COMMENCEMENT OF SALE OF CLASS T SHARES)
TO NOVEMBER 30, 1992.
(K) THE AMOUNTS SHOWN REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK AND TAX
DIFFERENCES.
</TABLE>
<PAGE>
EQUITY GROWTH - CLASS B
<TABLE>
<CAPTION>
SELECTED PER-SHARE DATA AND RATIOS(D)
YEAR ENDED NOVEMBER 30 1997E
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 41.81
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) (.32)
NET REALIZED AND UNREALIZED GAIN (LOSS) 9.95
TOTAL FROM INVESTMENT OPERATIONS 9.63
LESS DISTRIBUTIONS
FROM NET REALIZED GAIN (.03)
NET ASSET VALUE, END OF PERIOD $ 51.41
TOTAL RETURN(B),(C) 23.05%
NET ASSETS, END OF PERIOD (000 OMITTED) $71,496
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.93%A,H
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.90%A,F
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.73)%A
PORTFOLIO TURNOVER 108%
AVERAGE COMMISSION RATE(G) $ .0427
</TABLE>
EQUITY GROWTH - CLASS C
<TABLE>
<CAPTION>
SELECTED PER-SHARE DATA AND RATIOS(D)
YEAR ENDED NOVEMBER 30 1997I
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $51.84
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) (.02)
NET REALIZED AND UNREALIZED GAIN (LOSS) .13
TOTAL FROM INVESTMENT OPERATIONS .11
NET ASSET VALUE, END OF PERIOD $51.95
TOTAL RETURN(B),(C) 0.21%
NET ASSETS, END OF PERIOD (000 OMITTED) $ 965
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.95%A,H
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.89%A,F
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.82)%A
PORTFOLIO TURNOVER 108%
AVERAGE COMMISSION RATE(G) $.0427
<FN>
(A) ANNUALIZED
(B) THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
(C) TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
(D) NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
(E) FOR THE PERIOD DECEMBER 31, 1996 (COMMENCEMENT OF SALE OF CLASS B SHARES) TO
NOVEMBER 30, 1997.
(F) FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
(G) A FUND IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSIONS RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM
PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED IN VARIOUS
MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES MAY DIFFER.
(H) FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE BEEN HIGHER.
(I) FOR THE PERIOD NOVEMBER 3, 1997 (COMMENCEMENT OF SALE OF CLASS C SHARES) TO
NOVEMBER 30, 1997.
</TABLE>
<PAGE>
GROWTH OPPORTUNITIES - CLASS A
194. SELECTED PER-SHARE DATA AND RATIOS D
<TABLE>
<CAPTION>
YEARS ENDED 1997M 1997L 1996E
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 42.57 $ 35.39 $ 32.86
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .04 .54 .09
NET REALIZED AND UNREALIZED GAIN (LOSS) 1.41 8.80 2.44
TOTAL FROM INVESTMENT OPERATIONS 1.45 9.34 2.53
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME -- (.72) --
FROM NET REALIZED GAIN -- (1.44) --
TOTAL DISTRIBUTIONS -- (2.16) --
NET ASSET VALUE, END OF PERIOD $ 44.02 $ 42.57 $ 35.39
TOTAL RETURN(B),(C) 3.41% 27.58% 7.70%
NET ASSETS, END OF PERIOD (000 OMITTED) $142,754 $129,628 $10,185
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.10%A,F 1.05% 1.48%A,F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.09%A,G 1.04%G 1.47%A,G
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 1.22%A 1.36% 1.74%A
PORTFOLIO TURNOVER 33%A 35% 33%
AVERAGE COMMISSION RATE(H) $ .0497 $ .0480 $ .0401
</TABLE>
GROWTH OPPORTUNITIES - CLASS T
<TABLE>
<CAPTION>
SELECTED PER-SHARE DATA AND
RATIOS
YEARS ENDED 1997M 1997L 1996L 1995L 1994L
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 42.76 $ 35.41 $ 30.89 $ 26.62 $ 25.39
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .03D .55D .61D .39 .22
NET REALIZED AND UNREALIZED
GAIN (LOSS) 1.41 8.78 4.72 5.31 1.92
TOTAL FROM INVESTMENT OPERATIONS 1.44 9.33 5.33 5.70 2.14
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME -- (.54) (.41) (.27) (.07)
FROM NET REALIZED GAIN -- (1.44) (.40) (1.16) (.84)
TOTAL DISTRIBUTIONS -- (1.98) (.81) (1.43) (.91)
NET ASSET VALUE, END OF PERIOD $ 44.20 $ 42.76 $ 35.41 $ 30.89 $ 26.62
TOTAL RETURN(B),(C) 3.37% 27.43% 17.61% 22.88% 8.71%
NET ASSETS, END OF PERIOD (000 OMITTED) $20,410,697 $19,651,539 $14,314,950 $9,690,992 $4,598,668
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.28%A 1.18% 1.34% 1.59% 1.63%
RATIO OF EXPENSES TO AVERAGE
NET ASSETS AFTER EXPENSE REDUCTIONS 1.27%A,G 1.17%G 1.34% 1.58%G 1.62%G
RATIO OF NET INVESTMENT
INCOME TO AVERAGE NET ASSETS 1.03%A 1.39% 1.88% 1.56% 1.12%
PORTFOLIO TURNOVER 33%A 35% 33% 39% 43%
AVERAGE COMMISSION RATE(H) $ .0497 $ .0480 $ .0401
</TABLE>
<TABLE>
<CAPTION>
SELECTED PER-SHARE DATA AND
RATIOS
YEARS ENDED 1993L 1992L 1991L 1990L 1989L 1988I
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 21.14 $ 20.58 $ 12.99 $ 16.53 $ 14.27 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .08 .14 .06 .18J .02 .05
NET REALIZED AND UNREALIZED
GAIN (LOSS) 5.56 2.04 7.70 (2.50) 3.03 4.22
TOTAL FROM INVESTMENT OPERATIONS 5.64 2.18 7.76 (2.32) 3.05 4.27
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.13) (.09) (.17) (.05) (.03) --
FROM NET REALIZED GAIN (1.26) (1.53) -- (1.17) (.76) --
TOTAL DISTRIBUTIONS (1.39) (1.62) (.17) (1.22) (.79) --
NET ASSET VALUE, END OF PERIOD $ 25.39 $ 21.14 $ 20.58 $ 12.99 $ 16.53 $ 14.27
TOTAL RETURN(B),(C) 28.11% 12.09% 60.25% (15.05)% 22.69% 42.70%
NET ASSETS, END OF PERIOD (000 OMITTED) $2,054,988 $580,595 $213,095 $51,122 $34,351 $ 8,097
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.65% 1.60% 1.73% 2.00% 2.45% 2.52%A,K
RATIO OF EXPENSES TO AVERAGE
NET ASSETS AFTER EXPENSE REDUCTIONS 1.64%G 1.60% 1.73% 2.00% 2.45% 2.52%A
RATIO OF NET INVESTMENT
INCOME TO AVERAGE NET ASSETS .43% .80% .47% 1.49% .31% .82%A
PORTFOLIO TURNOVER 69% 94% 142% 136% 163% 143%A
AVERAGE COMMISSION RATE(H)
<FN>
(A) ANNUALIZED
(B) THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
(C) TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
(D) NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
(E) FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A SHARES) TO
OCTOBER 31, 1996.
(F) FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE BEEN HIGHER.
(G) FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
(H) FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS REQUIRED
TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR SECURITY TRADES ON WHICH
COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM PERIOD TO PERIOD AND FUND TO
FUND DEPENDING ON THE MIX OF TRADES EXECUTED IN VARIOUS MARKETS WHERE TRADING
PRACTICES AND COMMISSION RATE STRUCTURES MAY DIFFER.
(I) FOR THE PERIOD NOVEMBER 18, 1987 (COMMENCEMENT OF OPERATIONS) TO OCTOBER 31,
1988.
(J) NET INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND WHICH AMOUNTED
TO $.09 PER SHARE.
(K) EXPENSES WERE LIMITED IN ACCORDANCE WITH A STATE EXPENSE LIMITATION. WITHOUT
THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE BEEN HIGHER.
(L) YEARS ENDED OCTOBER 31.
(M) ONE MONTH ENDED NOVEMBER 30, 1997.
</TABLE>
<PAGE>
GROWTH OPPORTUNITIES - CLASS B
SELECTED PER-SHARE DATA AND RATIOS(D)
<TABLE>
<CAPTION>
YEARS ENDED 1997J 1997F
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 42.60 $ 37.62
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .02 .13
NET REALIZED AND UNREALIZED GAIN (LOSS) 1.40 4.85
TOTAL FROM INVESTMENT OPERATIONS 1.42 4.98
NET ASSET VALUE, END OF PERIOD $ 44.02 $ 42.60
TOTAL RETURN(B),(C) 3.33% 13.24%
NET ASSETS, END OF PERIOD (000 OMITTED) $422,511 $370,662
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.85%A,H 1.75%A
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.84%A,G 1.74%A,G
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS .47%A .48%A
PORTFOLIO TURNOVER 33%A 35%A
AVERAGE COMMISSION RATE(E) $ .0497 $ .0480
</TABLE>
GROWTH OPPORTUNITIES - CLASS C
<TABLE>
<CAPTION>
SELECTED PER-SHARE DATA AND RATIOS(D)
YEAR ENDED 1997I
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 43.62
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .02
NET REALIZED AND UNREALIZED GAIN (LOSS) .56
TOTAL FROM INVESTMENT OPERATIONS .58
NET ASSET VALUE, END OF PERIOD $ 44.20
TOTAL RETURN(B),(C) 1.33%
NET ASSETS, END OF PERIOD (000 OMITTED) $ 5,845
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.85%A,H
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.84%A,G
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS .74%A
PORTFOLIO TURNOVER 33%A
AVERAGE COMMISSION RATE(E) $ .0497
<FN>
(A) ANNUALIZED
(B) THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
(C) TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
(D) NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
(E) A FUND IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM
PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED IN
VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES MAY
DIFFER.
(F) FOR THE PERIOD MARCH 3, 1997 (COMMENCEMENT OF SALE OF CLASS B SHARES) TO
OCTOBER 31, 1997.
(G) FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
(H) FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT, THE CLASS'S EXPENSE RATIO WOULD HAVE BEEN HIGHER.
(I) FOR THE PERIOD NOVEMBER 3, 1997 (COMMENCEMENT OF SALE OF CLASS C SHARES) TO
NOVEMBER 30, 1997.
(J) ONE MONTH ENDED NOVEMBER 30, 1997.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STRATEGIC OPPORTUNITIES - CLASS A
SELECTED PER-SHARE DATA AND RATIOS (E)
YEARS ENDED 1997(M) 1996(J)
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 22.51 $ 23.48
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) (.13) .08
NET REALIZED AND UNREALIZED GAIN (LOSS) 6.00 1.26
TOTAL FROM INVESTMENT OPERATIONS 5.87 1.34
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME -- (.37)
FROM NET REALIZED GAIN (.87) (1.94)
TOTAL DISTRIBUTIONS (.87) (2.31)
NET ASSET VALUE, END OF PERIOD $ 27.51 $ 22.51
TOTAL RETURN (B), (C) $26.96% 5.80%
NET ASSETS, END OF PERIOD (000 OMITTED) $ 2,309 $ 638
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.49%(A),(F) .99%(A),(I)
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.47%(A),(G) .97%(A),(G)
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.59)%(A) 1.00%(A)
PORTFOLIO TURNOVER 61%(A) 151%
AVERAGE COMMISSION RATE(H) $ .0382 $ .0409
</TABLE>
<TABLE>
<CAPTION>
STRATEGIC OPPORTUNITIES - CLASS T
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED 1997(M) 1996(O) 1995(O) 1994(K) 1994(N) 1993(L),(N)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF $22.69 $24.88 $18.70 $19.96 $22.52 $19.53
PERIOD
INCOME FROM INVESTMENT
OPERATIONS
NET INVESTMENT INCOME (LOSS) (.07)(E) .17(E) .39 .10(E) .39(E) .33
NET REALIZED AND UNREALIZED 6.03 .18 6.73 (.75) (.81) 4.44
GAIN (LOSS)
TOTAL FROM INVESTMENT OPERATIONS 5.96 .35 7.12 (.65) (.42) 4.77
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME -- (.19) (.39) (.35) (.43) (.57)
FROM NET REALIZED GAIN (.87) (2.35) (.55) (.26) (1.71) (1.21)
TOTAL DISTRIBUTIONS (.87) (2.54) (.94) (.61) (2.14) (1.78)
NET ASSET VALUE, END OF PERIOD $27.78 $22.69 $24.88 $18.70 $19.96 $22.52
TOTAL RETURN(B), (C) 27.15% 1.53% 38.16% (3.26)% (2.24)% 26.33%
NET ASSETS, END OF PERIOD (IN $ 529 $ 561 $ 620 $ 376 $ 385 $ 270
MILLIONS)
RATIO OF EXPENSES TO AVERAGE NET 1.24%(A) 1.28% 1.61% 1.73%(A), (F) 1.85% 1.57%(D)
ASSETS
RATIO OF EXPENSES TO AVERAGE 1.23%(A), (G) 1.27%(G) 1.61% 1.73%(A) 1.84%(G) 1.57%
NET ASSETS AFTER EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT INCOME (.29)(A) .70% 1.90% 2.03%(A) 1.89% 2.06%
(LOSS) TO AVERAGE NET ASSETS
PORTFOLIO TURNOVER 61%(A) 151% 142% 228%(A) 159% 183%
AVERAGE COMMISSION RATE(H) $.0382 $.0409
</TABLE>
<TABLE>
<CAPTION>
SELECTED PER-SHARE DATA AND
RATIOS
YEARS ENDED 1992(N) 1991(N) 1990(N) 1989(N) 1988(N) 1987(N)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF $21.38 $17.21 $19.55 $15.53 $19.06 $16.71
PERIOD
INCOME FROM INVESTMENT
OPERATIONS
NET INVESTMENT INCOME (LOSS) .61 .66 .70 .50 .42 .46
NET REALIZED AND UNREALIZED .58 4.26 (2.49) 4.08 (1.80) 2.95
GAIN (LOSS)
TOTAL FROM INVESTMENT OPERATIONS 1.19 4.92 (1.79) 4.58 (1.38) 3.41
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.62) (.75) (.55) (.56) (.24) (.09)
FROM NET REALIZED GAIN (2.42) -- -- -- (1.91) (.97)
TOTAL DISTRIBUTIONS (3.04) (.75) (.55) (.56) (2.15) (1.06)
NET ASSET VALUE, END OF PERIOD $19.53 $21.38 $17.21 $19.55 $15.53 $19.06
TOTAL RETURN(B), (C) 7.26% 29.51% (9.49)% 30.45% (4.98)% 21.43%
NET ASSETS, END OF PERIOD (IN $ 195 $ 200 $ 172 $ 198 $ 191 $ 283
MILLIONS)
RATIO OF EXPENSES TO AVERAGE NET 1.46% 1.56% 1.59% 1.51% 1.71% 1.67%(F),(I)
ASSETS
RATIO OF EXPENSES TO AVERAGE 1.46% 1.56% 1.59% 1.51% 1.71% 1.67%
NET ASSETS AFTER EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT INCOME 3.22% 3.61% 3.70% 3.23% 3.10% 2.36%
(LOSS) TO AVERAGE NET ASSETS
PORTFOLIO TURNOVER 211% 223% 114% 89% 160% 225%
AVERAGE COMMISSION RATE(H)
<FN>
(A) ANNUALIZED.
(B) THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
(C) TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
(D) INCLUDES REIMBURSEMENT OF $.03 PER SHARE FOR ADJUSTMENTS TO PRIOR PERIOD'S FEES.
(E) NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
(F) FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO
WOULD HAVE BEEN HIGHER.
(G) FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS'
EXPENSES.
(H) FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE
FOR SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE
MIX OF TRADES EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES MAY DIFFER.
(I) LIMITED IN ACCORDANCE WITH A STATE EXPENSE LIMITATION.
(J) FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A SHARES) TO DECEMBER 31, 1996.
(K) THREE MONTHS ENDED DECEMBER 31, 1994.
(L) AS OF OCTOBER 1, 1991, THE FUND DISCONTINUED THE USE OF EQUALIZATION ACCOUNTING.
(M) ELEVEN MONTHS ENDED NOVEMBER 30, 1997.
(N) YEARS ENDED SEPTEMBER 30.
(O) YEARS ENDED DECEMBER 31.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STRATEGIC OPPORTUNITIES - CLASS B
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED 1997(I) 1996(K) 1995(K) 1994(J) 1994(E)
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 22.36 $ 24.56 $ 18.57 $ 19.98 $19.65
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) (.18)(D) .04(D) .38 .06(D) .05(D)
NET REALIZED AND UNREALIZED GAIN (LOSS) 5.92 .18 6.54 (.74) .28
TOTAL FROM INVESTMENT OPERATIONS 5.74 .22 6.92 (.68) .33
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME -- (.07) (.38) (.47) --
FROM NET REALIZED GAIN (.87) (2.35) (.55) (.26) --
TOTAL DISTRIBUTIONS (.87) (2.42) (.93) (.73) --
NET ASSET VALUE, END OF PERIOD $ 27.23 $ 22.36 $ 24.56 $ 18.57 $19.98
TOTAL RETURN(B), (C) 26.55% 1.00% 37.35% (3.41)% 1.68%
NET ASSETS, END OF PERIOD (000 OMITTED) $109,646 $98,535 $87,566 $17,090 $8,824
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.78%(A) 1.80% 2.11% 2.58%(A) 2.63%(A), (F)
RATIO OF EXPENSES TO AVERAGE NET ASSETS
AFTER EXPENSE REDUCTIONS 1.77%(A), (G) 1.79%(G) 2.10%(G) 2.53%(A), (G) 2.63%(A)
RATIO OF NET INVESTMENT INCOME (LOSS)
TO AVERAGE NET ASSETS (.84)%(A) .18% 1.40% 1.22%(A) 1.11%(A)
PORTFOLIO TURNOVER 61%(A) 151% 142% 228%(A) 159%
AVERAGE COMMISSION RATE(H) $ .0382 $ .0409
<FN>
(A) ANNUALIZED.
(B) THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
(C) TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
(D) NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
(E) FOR THE PERIOD JUNE 30, 1994 (COMMENCEMENT OF SALE OF CLASS B SHARES) TO SEPTEMBER 30, 1994.
(F) FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO
WOULD HAVE BEEN HIGHER.
(G) FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS'
EXPENSES.
(H) FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE
FOR SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE
MIX OF TRADES EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES MAY DIFFER.
(I) ELEVEN MONTHS ENDED NOVEMBER 30, 1997.
(J) THREE MONTHS ENDED DECEMBER 31, 1994.
(K) YEARS ENDED DECEMBER 31.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LARGE CAP - CLASS A
SELECTED PER-SHARE DATA AND RATIOS(D)
YEARS ENDED NOVEMBER 30 1997 1996(G)
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $11.83 $10.21
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) (.04) .00
NET REALIZED AND UNREALIZED GAIN (LOSS) 2.25 1.62
TOTAL FROM INVESTMENT OPERATIONS 2.21 1.62
LESS DISTRIBUTIONS
FROM NET REALIZED GAIN (.08) --
NET ASSET VALUE, END OF PERIOD $13.96 $11.83
TOTAL RETURN(B), (C) 18.82% 15.87%
NET ASSETS, END OF PERIOD (000 OMITTED) $2,330 $ 503
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.75%(F) 1.75%(A), (F)
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.72%(E) 1.75%(A)
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.34)% .11%(A)
PORTFOLIO TURNOVER 93% 59%(A)
AVERAGE COMMISSION RATE(H) $.0412 $.0306
</TABLE>
<TABLE>
<CAPTION>
LARGE CAP - CLASS T
SELECTED PER-SHARE DATA AND RATIOS(D)
YEARS ENDED NOVEMBER 30 1997 1996(I)
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.82 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) (.02) (.01)
NET REALIZED AND UNREALIZED GAIN (LOSS) 2.24 1.83
TOTAL FROM INVESTMENT OPERATIONS 2.22 1.82
LESS DISTRIBUTIONS
FROM NET REALIZED GAIN (.06) --
NET ASSET VALUE, END OF PERIOD $ 13.98 $ 11.82
TOTAL RETURN(B), (C) 18.89% 18.20%
NET ASSETS, END OF PERIOD (000 OMITTED) $42,753 $26,133
RATIO OF EXPENSES TO AVERAGE NET ASSETS H 1.62% 2.00%(A), (F)
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.60%(E) 2.00%(A)
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.18)% (.14)%(A)
PORTFOLIO TURNOVER 93% 59%(A)
AVERAGE COMMISSION RATE(H) $ .0412 $ .0306
<FN>
(A) ANNUALIZED
(B) THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
(C) TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
(D) NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
(E) FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS'
EXPENSES.
(F) FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO
WOULD HAVE BEEN HIGHER.
(G) FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A SHARES) TO NOVEMBER 30, 1996.
(H) A FUND IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS
AMOUNT MAY VARY FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED IN VARIOUS MARKETS WHERE TRADING
PRACTICES AND COMMISSION RATE STRUCTURES MAY DIFFER.
(I) FOR THE PERIOD FEBRUARY 20, 1996 (COMMENCEMENT OF SALE OF CLASS T SHARES) TO NOVEMBER 30, 1996.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
LARGE CAP - CLASS B
SELECTED PER-SHARE DATA AND RATIOS(D)
YEARS ENDED NOVEMBER 30 1997 1996(H)
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.77 $10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) (.09) (.05)
NET REALIZED AND UNREALIZED GAIN (LOSS) 2.22 1.82
TOTAL FROM INVESTMENT OPERATIONS 2.13 1.77
LESS DISTRIBUTIONS
FROM NET REALIZED GAIN (.05) --
NET ASSET VALUE, END OF PERIOD $ 13.85 $11.77
TOTAL RETURN(B),(C) 18.18% 17.70%
NET ASSETS, END OF PERIOD (000 OMITTED) $20,926 $9,721
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.16% 2.50%(A),(E)
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 2.14%(F) 2.50%(A)
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.73)% (.64)%(A)
PORTFOLIO TURNOVER 93% 59%(A)
AVERAGE COMMISSION RATE(G) $ .0412 $.0306
</TABLE>
<TABLE>
<CAPTION>
LARGE CAP - CLASS C
SELECTED PER-SHARE DATA AND RATIOS(D)
YEAR ENDED NOVEMBER 30 1997(I)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $13.97
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) (.01)
NET REALIZED AND UNREALIZED GAIN (LOSS) .02
TOTAL FROM INVESTMENT OPERATIONS .01
NET ASSET VALUE, END OF PERIOD $13.98
TOTAL RETURN(B),(C) 0.07%
NET ASSETS, END OF PERIOD (000 OMITTED) $ 41
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.50% (A),(E)
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 2.35% (A),(F)
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.62)%(A)
PORTFOLIO TURNOVER 93%
AVERAGE COMMISSION RATE(G) $.0412
<FN>
(A) ANNUALIZED.
(B) THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
(C) TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
(D) NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
(E) FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO
WOULD HAVE BEEN HIGHER.
(F) FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS'
EXPENSES.
(G) A FUND IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS
AMOUNT MAY VARY FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED IN VARIOUS MARKETS WHERE TRADING
PRACTICES AND COMMISSION RATE STRUCTURES MAY DIFFER.
(H) FOR THE PERIOD FEBRUARY 20, 1996 (COMMENCEMENT OF SALE OF CLASS B SHARES) TO NOVEMBER 30, 1996.
(I) FOR THE PERIOD NOVEMBER 3, 1997 (COMMENCEMENT OF SALE OF CLASS C SHARES) TO NOVEMBER 30, 1997.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GROWTH & INCOME - CLASS A
SELECTED PER-SHARE DATA AND RATIOS (D)
YEAR ENDED NOVEMBER 30 1997 (G)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .04
NET REALIZED AND UNREALIZED GAIN (LOSS) 2.46
TOTAL FROM INVESTMENT OPERATIONS 2.50
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.03)
NET ASSET VALUE, END OF PERIOD $ 12.47
TOTAL RETURN (B),(C) 25.04%
NET ASSETS, END OF PERIOD (000 OMITTED) $ 6,977
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.50% (A), (E)
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS .34% (A)
PORTFOLIO TURNOVER 82% (A)
AVERAGE COMMISSION RATE (F) $ .0345
</TABLE>
<TABLE>
<CAPTION>
GROWTH & INCOME - CLASS T
SELECTED PER-SHARE DATA AND RATIOS (D)
YEAR ENDED NOVEMBER 30 1997 (H)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .03
NET REALIZED AND UNREALIZED GAIN (LOSS) 2.45
TOTAL FROM INVESTMENT OPERATIONS 2.48
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.02)
NET ASSET VALUE, END OF PERIOD $ 12.46
TOTAL RETURN (B), (C) 24.83%
NET ASSETS, END OF PERIOD (000 OMITTED) $ 133,468
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.59% (A)
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS .24% (A)
PORTFOLIO TURNOVER 82% (A)
AVERAGE COMMISSION RATE (F) $ .0345
<FN>
(A) ANNUALIZED
(B) THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
(C) TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
(D) NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
(E) FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE BEEN HIGHER.
(F) A FUND IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM
PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED IN
VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES MAY
DIFFER.
(G) FOR THE PERIOD DECEMBER 31, 1996 (COMMENCEMENT OF SALE OF CLASS A SHARES) TO
NOVEMBER 30, 1997.
(H) FOR THE PERIOD DECEMBER 31, 1996 (COMMENCEMENT OF SALE OF CLASS T SHARES) TO
NOVEMBER 30, 1997.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GROWTH & INCOME - CLASS B
SELECTED PER-SHARE DATA AND RATIOS (D)
YEAR ENDED NOVEMBER 30 1997 (G)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS) (.04)
NET REALIZED AND UNREALIZED GAIN (LOSS) 2.46
TOTAL FROM INVESTMENT OPERATIONS 2.42
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.01)
NET ASSET VALUE, END OF PERIOD $ 12.41
TOTAL RETURN (B) ,(C) 24.22%
NET ASSETS, END OF PERIOD (000 OMITTED) $ 28,825
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.25% (A), (E)
RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET ASSETS (.42)% (A)
PORTFOLIO TURNOVER 82% (A)
AVERAGE COMMISSION RATE (F) $ .0345
</TABLE>
<TABLE>
<CAPTION>
GROWTH & INCOME - CLASS C
SELECTED PER-SHARE DATA AND RATIOS (D)
YEAR ENDED NOVEMBER 30 1997 (H)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.22
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .00
NET REALIZED AND UNREALIZED GAIN (LOSS) .23
TOTAL FROM INVESTMENT OPERATIONS .23
NET ASSET VALUE, END OF PERIOD $ 12.45
TOTAL RETURN (B), (C) 1.88%
NET ASSETS, END OF PERIOD (000 OMITTED) $ 391
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.24% (A),(E)
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS .19% (A)
PORTFOLIO TURNOVER 82% (A)
AVERAGE COMMISSION RATE (F) $ .0345
<FN>
(A) ANNUALIZED
(B) TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
(C) THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
(D) NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
(E) FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE BEEN HIGHER.
(F) A FUND IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM
PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED IN
VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES MAY
DIFFER.
(G) FOR THE PERIOD DECEMBER 31, 1996 (COMMENCEMENT OF SALE OF CLASS B SHARES) TO
NOVEMBER 30, 1997.
(H) FOR THE PERIOD NOVEMBER 3, 1997 (COMMENCEMENT OF SALE OF CLASS C SHARES) TO
NOVEMBER 30, 1997.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EQUITY INCOME - CLASS A
SELECTED PER-SHARE DATA AND RATIOS (E)
YEARS ENDED NOVEMBER 30 1997 1996 (I)
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 22.78 $ 20.38
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .23 .06
NET REALIZED AND UNREALIZED GAIN (LOSS) 4.61 2.44
TOTAL FROM INVESTMENT OPERATIONS 4.84 2.50
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.34) (.10)
FROM NET REALIZED GAIN (.59) --
TOTAL DISTRIBUTIONS (.93) (.10)
NET ASSET VALUE, END OF PERIOD $ 26.69 $ 22.78
TOTAL RETURN (B), (C) 22.05% 12.31%
NET ASSETS, END OF PERIOD (000 OMITTED) $ 25,659 $ 3,306
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.26% (F) 1.46% (A), (D), (F)
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.25% (G) 1.44% (A), (G)
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS .93% 1.27% (A)
PORTFOLIO TURNOVER 55% 78%
AVERAGE COMMISSION RATE (H) $ .0430 $ .0424
</TABLE>
<TABLE>
<CAPTION>
EQUITY INCOME - CLASS T
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED NOVEMBER 30 1997 1996 1995 1994 1993 1992 (J)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 22.83 $ 19.95 $ 15.96 $ 14.86 $ 12.86 $ 12.37
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .26 (E) .30 (E) .31 .28 (E) .33 .13
NET REALIZED AND UNREALIZED GAIN (LOSS) 4.62 3.35 4.26 1.03 1.97 .47
TOTAL FROM INVESTMENT OPERATIONS 4.88 3.65 4.57 1.31 2.30 .60
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.27) (.31) (.30) (.21) (.30) (.11)
FROM NET REALIZED GAIN (.59) (.46) (.28) -- -- --
TOTAL DISTRIBUTIONS (.86) (.77) (.58) (.21) (.30) (.11)
NET ASSET VALUE, END OF PERIOD $ 26.85 $ 22.83 $ 19.95 $ 15.96 $ 14.86 $ 12.86
TOTAL RETURN (B), (C) 22.12% 18.89% 29.46% 8.84% 18.03% 4.88%
NET ASSETS, END OF PERIOD (000 OMITTED) $ 2,190,070 $ 1,672,994 $ 880,054 $ 179,501 $ 42,326 $ 1,462
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.23% 1.27% 1.48% 1.67% 1.77% 1.55% (A)
RATIO OF EXPENSES TO AVERAGE 1.21% (G) 1.26% (G) 1.47% (G) 1.64% (G) 1.77% 1.55% (A)
NET ASSETS AFTER EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT INCOME TO 1.05% 1.45% 1.78% 1.69% 2.02% 3.39% (A)
AVERAGE NET ASSETS
PORTFOLIO TURNOVER 55% 78% 80% 140% 120% 51%
AVERAGE COMMISSION RATE(H) $ .0430 $ .0424
<FN>
(A) ANNUALIZED
(B) THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
(C) TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
(D) LIMITED IN ACCORDANCE WITH A STATE EXPENSE LIMITATION.
(E) NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
(F) FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE BEEN HIGHER.
(G) FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
(H) FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS REQUIRED
TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR SECURITY TRADES ON WHICH
COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM PERIOD TO PERIOD AND FUND TO
FUND DEPENDING ON THE MIX OF TRADES EXECUTED IN VARIOUS MARKETS WHERE TRADING
PRACTICES AND COMMISSION RATE STRUCTURES MAY DIFFER.
(I) FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A SHARES) TO
NOVEMBER 30, 1996.
(J) FOR THE PERIOD SEPTEMBER 10, 1992 (COMMENCEMENT OF SALE OF CLASS T SHARES) TO
NOVEMBER 30, 1992.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EQUITY INCOME - CLASS B
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED NOVEMBER 30 1997 1996 1995 1994(E)
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 22.73 $ 19.90 $ 15.94 $ 15.21
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .13(D) .19(D) .26 .08(D)
NET REALIZED AND UNREALIZED GAIN (LOSS) 4.61 3.33 4.23 .72
TOTAL FROM INVESTMENT OPERATIONS 4.74 3.52 4.49 .80
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.15) (.23) (.25) (.07)
FROM NET REALIZED GAIN (.59) (.46) (.28) --
TOTAL DISTRIBUTIONS (.74) (.69) (.53) (.07)
NET ASSET VALUE, END OF PERIOD $ 26.73 $ 22.73 $ 19.90 $ 15.94
TOTAL RETURN(B),(C) 21.52% 18.22% 28.95% 5.25%
NET ASSETS, END OF PERIOD (000 OMITTED) $ 682,308 $ 500,447 $ 270,101 $ 35,373
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.74%(F) 1.81% 1.85% 2.24%(A)
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.73%(G) 1.79%(G) 1.84%(G) 2.18%(A),(G)
AFTER EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS .53% .92% 1.41% 1.15%(A)
PORTFOLIO TURNOVER 55% 78% 80% 140%
AVERAGE COMMISSION RATE(H) $ .0430 $ .0424
</TABLE>
<TABLE>
<CAPTION>
EQUITY INCOME - CLASS C
SELECTED PER-SHARE DATA AND RATIOS(D)
YEAR ENDED NOVEMBER 30 1997(I)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 26.65
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .02
NET REALIZED AND UNREALIZED GAIN (LOSS) .17
TOTAL FROM INVESTMENT OPERATIONS .19
NET ASSET VALUE, END OF PERIOD $ 26.84
TOTAL RETURN (B),(C) .71%
NET ASSETS, END OF PERIOD (000 OMITTED) $ 684
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.85%(A),(F)
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.81%(A,(G)
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 1.24%(A)
PORTFOLIO TURNOVER 55%
AVERAGE COMMISSION RATE(H) $ .0430
<FN>
(A) ANNUALIZED
(B) THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
(C) TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
(D) NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
(E) FOR THE PERIOD JUNE 30, 1994 (COMMENCEMENT OF SALE OF CLASS B SHARES) TO
NOVEMBER 30, 1994.
(F) FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE BEEN HIGHER.
(G) FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
(H) FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS REQUIRED
TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR SECURITY TRADES ON WHICH
COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM PERIOD TO PERIOD AND FUND TO
FUND DEPENDING ON THE MIX OF TRADES EXECUTED IN VARIOUS MARKETS WHERE TRADING
PRACTICES AND COMMISSION RATE STRUCTURES MAY DIFFER.
(I) FOR THE PERIOD NOVEMBER 3, 1997 (COMMENCEMENT OF SALE OF CLASS C SHARES) TO
NOVEMBER 30, 1997.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BALANCED - CLASS A
SELECTED PER-SHARE DATA AND RATIOS (H)
YEARS ENDED OCTOBER 31 1997 1996(D)
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 16.04 $ 15.22
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .48 .08
NET REALIZED AND UNREALIZED GAIN (LOSS) 2.83 .88
TOTAL FROM INVESTMENT OPERATIONS 3.31 .96
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.49) (.14)
FROM NET REALIZED GAIN (.11) --
TOTAL DISTRIBUTIONS (.60) (.14)
NET ASSET VALUE, END OF PERIOD $ 18.75 $ 16.04
TOTAL RETURN (B), (C) 20.99% 6.34%
NET ASSETS, END OF PERIOD (000 OMITTED) $ 7,565 $ 1,181
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.41%(E) 1.50% (A), (E)
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.40%(F) 1.49% (A), (F)
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 2.68% 3.07% (A)
PORTFOLIO TURNOVER 70% 223%
AVERAGE COMMISSION RATE (G) $ .0435 $ .0106
</TABLE>
<TABLE>
<CAPTION>
BALANCED - CLASS T
SELECTED PER-SHARE DATA
AND RATIOS
YEARS ENDED OCTOBER 31 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, $ 16.07 $ 15.30 $ 14.67 $ 15.91 $ 14.41 $ 14.13 $ 10.41 $ 12.77 $ 11.07 $ 9.44
BEGINNING OF PERIOD
INCOME FROM INVESTMENT
OPERATIONS
NET INVESTMENT INCOME .53(H) .51(H) .59 .38 .48 .50 .51 .56 1.01I .62
NET REALIZED AND 2.84 .88 .54 (.79) 2.18 .85 3.74 (1.34) 1.27 1.56
UNREALIZED GAIN (LOSS)
TOTAL FROM INVESTMENT 3.37 1.39 1.13 (.41) 2.66 1.35 4.25 (.78) 2.28 2.18
OPERATIONS
LESS DISTRIBUTIONS
FROM NET INVESTMENT (.54) (.59) (.50) (.28) (.56) (.46) (.53) (1.06) (.58) (.55)
INCOME
IN EXCESS OF NET -- -- -- (.02) -- -- -- -- -- --
INVESTMENT INCOME
FROM NET REALIZED GAIN (.11) (.03) -- (.49) (.60) (.61) -- (.52) -- --
RETURN OF CAPITAL -- -- -- (.04) -- -- -- -- -- --
TOTAL DISTRIBUTIONS (.65) (.62) (.50) (.83) (1.16) (1.07) (.53) (1.58) (.58) (.55)
NET ASSET VALUE, $ 18.79 $ 16.07 $ 15.30 $ 14.67 $ 15.91 $ 14.41 $ 14.13 $ 10.41 $ 12.77 $ 11.07
END OF PERIOD
TOTAL RETURN (B), (C) 21.36% 9.30% 7.85% (2.69)% 19.66% 10.27% 41.73% (7.15)% 21.15% 23.66%
NET ASSETS, $ 2,901 $ 2,993 $ 3,441 $ 3,129 $ 1,654 $ 398 $ 136 $ 61 $ 46 $ 36
END OF PERIOD (IN MILLIONS)
RATIO OF EXPENSES 1.17% 1.26% 1.47% 1.59% 1.52% 1.60% 1.71% 1.85% 1.91% 2.06%
TO AVERAGE NET ASSETS
RATIO OF EXPENSES TO 1.17% 1.25%(F) 1.46%(F) 1.58%(F) 1.51%(F) 1.60% 1.71% 1.85% 1.91% 2.06%
AVERAGE NET ASSETS AFTER
EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT 2.98% 3.32% 3.99% 3.79% 3.24% 3.97% 4.19% 5.29% 8.80% 5.83%
INCOME TO AVERAGE NET ASSETS
PORTFOLIO TURNOVER 70% 223% 297% 202% 200% 389% 220% 297% 151% 204%
AVERAGE COMMISSION RATE (G) $ .0435 $ .0106
<FN>
(A) ANNUALIZED
(B) THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
(C) TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
(D) FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A SHARES) TO
OCTOBER 31, 1996.
(E) FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE BEEN HIGHER.
(F) FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
(G) FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS REQUIRED
TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR SECURITY TRADES ON WHICH
COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM PERIOD TO PERIOD AND FUND TO
FUND DEPENDING ON THE MIX OF TRADES EXECUTED IN VARIOUS MARKETS WHERE TRADING
PRACTICES AND COMMISSION RATE STRUCTURES MAY DIFFER.
(H) NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
(I) NET INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND WHICH AMOUNTED TO
$.26 PER SHARE.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BALANCED - CLASS B
SELECTED PER-SHARE DATA AND RATIOS(G)
YEAR ENDED OCTOBER 31 1997(C)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 16.36
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .29
NET REALIZED AND UNREALIZED GAIN (LOSS) 2.38
TOTAL FROM INVESTMENT OPERATIONS 2.67
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.32)
NET ASSET VALUE, END OF PERIOD $ 18.71
TOTAL RETURN(B),(D) 16.40%
NET ASSETS, END OF PERIOD (000 OMITTED) $ 15,958
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.12%(A)
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 2.11%(A),(E)
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 1.88%(A)
PORTFOLIO TURNOVER 70%
AVERAGE COMMISSION RATE(F) $ .0435
<FN>
(A) ANNUALIZED
(B) THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
(C) FOR THE PERIOD DECEMBER 31, 1996 (COMMENCEMENT OF SALE OF CLASS B SHARES) TO
OCTOBER 31, 1997.
(D) TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
(E) FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
(F) FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS REQUIRED
TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR SECURITY TRADES ON WHICH
COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM PERIOD TO PERIOD AND FUND TO
FUND DEPENDING ON THE MIX OF TRADES EXECUTED IN VARIOUS MARKETS WHERE TRADING
PRACTICES AND COMMISSION RATE STRUCTURES MAY DIFFER.
(G) NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
HIGH YIELD - CLASS A
SELECTED PER-SHARE DATA AND RATIOS (D)
YEARS ENDED OCTOBER 31 1997 1996 (E)
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.300 $ 12.010
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME 1.058 .163
NET REALIZED AND UNREALIZED GAIN (LOSS) .710 .267
TOTAL FROM INVESTMENT OPERATIONS 1.768 .430
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (1.078) (.140)
FROM NET REALIZED GAIN (.060) --
TOTAL DISTRIBUTIONS (1.138) (.140)
NET ASSET VALUE, END OF PERIOD $ 12.930 $ 12.300
TOTAL RETURN (B), (C) 15.18% 3.58%
NET ASSETS, END OF PERIOD (000 OMITTED) $ 44,236 $ 3,860
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.15% 1.25% (A), (F)
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.14% (H) 1.25% (A)
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 8.58% 9.06% (A)
PORTFOLIO TURNOVER 105% 121%
AVERAGE COMMISSION RATE (G) $ .0431 $ .0388
</TABLE>
<TABLE>
<CAPTION>
HIGH YIELD - CLASS T
SELECTED PER-SHARE DATA
AND RATIOS
YEARS ENDED OCTOBER 31 1997 1996 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, $ 12.310 $ 11.910 $ 11.220 $ 12.010 $ 11.070 $ 10.120 $ 8.150
BEGINNING OF PERIOD
INCOME FROM INVESTMENT
OPERATIONS
NET INVESTMENT INCOME 1.086 (D) 1.105 (D) .930 (D) .848 .980 1.146 1.115
NET REALIZED AND .686 .364 .680 (.537) 1.153 .975 1.948
UNREALIZED GAIN (LOSS)
TOTAL FROM INVESTMENT 1.772 1.469 1.610 .311 2.133 2.121 3.063
OPERATIONS
LESS DISTRIBUTIONS
FROM NET INVESTMENT (1.082) (1.069) (.920) (.851) (.963) (1.171) (1.093)
INCOME
FROM NET REALIZED GAIN (.060) -- -- (.250) (.230) -- --
TOTAL DISTRIBUTIONS (1.142) (1.069) (.920) (1.101) (1.193) (1.171) (1.093)
NET ASSET VALUE, $ 12.940 $ 12.310 $ 11.910 $ 11.220 $ 12.010 $ 11.070 $ 10.120
END OF PERIOD
TOTAL RETURN(B),(C) 15.21% 12.92% 15.05% 2.64% 20.47% 21.96% 39.67%
NET ASSETS, END OF $ 2,208,172 $ 1,709,294 $ 1,200,495 $ 679,623 $ 485,559 $ 136,316 $ 38,681
PERIOD (000 OMITTED)
RATIO OF EXPENSES TO 1.09% 1.12% 1.15% 1.20% 1.11% 1.10% (F) 1.10%(F)
AVERAGE NET ASSETS
RATIO OF EXPENSES 1.08%(H) 1.11% (H) 1.15% 1.20% 1.11% 1.10% 1.10%
TO AVERAGE NET ASSETS
AFTER EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT 8.72% 9.20% 8.32% 6.92% 8.09% 9.95% 12.20%
INCOME TO AVERAGE NET ASSETS
PORTFOLIO TURNOVER 105% 121% 112% 118% 79% 100% 103%
AVERAGE COMMISSION RATE(G) $ .0431 $ .0388
</TABLE>
<TABLE>
<CAPTION>
HIGH YIELD - CLASS T
SELECTED PER-SHARE DATA
AND RATIOS
YEARS ENDED OCTOBER 31 1990 1989 1988
<S> <C> <C> <C>
NET ASSET VALUE, $ 8.970 $ 9.860 $ 9.090
BEGINNING OF PERIOD
INCOME FROM INVESTMENT
OPERATIONS
NET INVESTMENT INCOME 1.144 1.237 1.165
NET REALIZED AND (.820) (.890) .770
UNREALIZED GAIN (LOSS)
TOTAL FROM INVESTMENT .324 .347 1.935
OPERATIONS
LESS DISTRIBUTIONS
FROM NET INVESTMENT (1.144) (1.237) (1.165)
INCOME
FROM NET REALIZED GAIN -- -- --
TOTAL DISTRIBUTIONS (1.144) (1.237) (1.165)
NET ASSET VALUE, $ 8.150 $ 8.970 $ 9.860
END OF PERIOD
TOTAL RETURN (B),(C) 3.58% 3.34% 22.14%
NET ASSETS, END OF $ 15,1300 $ 13,315 $ 11,900
PERIOD (000 OMITTED)
RATIO OF EXPENSES TO 1.10% (F) 1.10% (F) 1.10%
AVERAGE NET ASSETS
RATIO OF EXPENSES 1.10% 1.10% 1.10%
TO AVERAGE NET ASSETS
AFTER EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT 12.72% 12.98% 11.86%
INCOME TO AVERAGE NET ASSETS
PORTFOLIO TURNOVER 90% 131% 135%
AVERAGE COMMISSION RATE(G)
<FN>
(A) ANNUALIZED
(B) THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
(C) TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF LESS
THAN ONE YEAR ARE NOT ANNUALIZED.
(D) NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
(E) FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A SHARES) TO
OCTOBER 31, 1996.
(F) FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE BEEN HIGHER.
(G) FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS REQUIRED
TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR SECURITY TRADES ON WHICH
COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM PERIOD TO PERIOD AND FUND TO
FUND DEPENDING ON THE MIX OF TRADES EXECUTED IN VARIOUS MARKETS WHERE TRADING
PRACTICES AND COMMISSION RATE STRUCTURES MAY DIFFER.
(H) FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
HIGH YIELD - CLASS B
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED OCTOBER 31 1997 1996 1995 1994(D)
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 12.280 $ 11.890 $ 11.210 $ 11.300
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .998(C) 1.017(C) .794(C) .223
NET REALIZED AND UNREALIZED GAIN (LOSS) .674 .361 .721 (.118)
TOTAL FROM INVESTMENT OPERATIONS 1.672 1.378 1.515 .105
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (1.002) (.988) (.835) (.195)
FROM NET REALIZED GAIN (.060) -- -- --
TOTAL DISTRIBUTIONS (1.062) (.988) (.835) (.195)
NET ASSET VALUE, END OF PERIOD $ 12.890 $ 12.280 $ 11.890 $ 11.210
TOTAL RETURN(B) 14.34% 12.10% 14.12% 0.93%
NET ASSETS, END OF PERIOD 000 OMITTED $593,358 $344,328 $155,730 $ 16,959
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.74% 1.79% 2.01% 2.20%(A)
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.74% 1.79% 2.01% 2.20%(A)
AFTER EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT INCOME TO 8.04% 8.52% 7.46% 5.92%(A)
AVERAGE NET ASSETS
PORTFOLIO TURNOVER 105% 121% 112% 118%
AVERAGE COMMISSION RATE(E) $ .0431 $ .0388
<FN>
(A) ANNUALIZED
(B) TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
(C) NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
(D) FOR THE PERIOD JUNE 30, 1994 COMMENCEMENT OF SALE OF CLASS B SHARES TO
OCTOBER 31, 1994.
(E) FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS REQUIRED
TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR SECURITY TRADES ON WHICH
COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM PERIOD TO PERIOD AND FUND TO
FUND DEPENDING ON THE MIX OF TRADES EXECUTED IN VARIOUS MARKETS WHERE TRADING
PRACTICES AND COMMISSION RATE STRUCTURES MAY DIFFER.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STRATEGIC INCOME - CLASS A
SELECTED PER-SHARE DATA AND RATIOS(D)
YEARS ENDED DECEMBER 31 1997 1996 E
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.250 $ 11.010
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .802 .267
NET REALIZED AND UNREALIZED GAIN (LOSS) .198 .493
TOTAL FROM INVESTMENT OPERATIONS 1.000 .760
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.790) (.280)
FROM NET REALIZED GAIN (.370) (.240)
TOTAL DISTRIBUTIONS (1.160) (.520)
NET ASSET VALUE, END OF PERIOD $ 11.090 $ 11.250
TOTAL RETURN(B),(C) 9.24% 6.95%
NET ASSETS, END OF PERIOD (000 OMITTED) $ 3,379 $ 587
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.25%(F) 1.25%(A),(F)
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.24%(G) 1.25%(A)
AFTER EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT INCOME TO AVERAGE 7.16% 7.32%(A)
NET ASSETS
PORTFOLIO TURNOVER 140% 119%
</TABLE>
<TABLE>
<CAPTION>
STRATEGIC INCOME - CLASS T
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED DECEMBER 31 1997 1996 1995 1994(H)
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.250 $ 11.000 $ 9.920 $ 10.000
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .814(D) .813(D) .885 .064(D)
NET REALIZED AND UNREALIZED GAIN (LOSS) .194 .542 1.231 (.046)
TOTAL FROM INVESTMENT OPERATIONS 1.008 1.355 2.116 .018
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.798) (.805) (.806) (.098)
FROM NET REALIZED GAIN (.370) (.300) (.230) --
TOTAL DISTRIBUTIONS (1.168) (1.105) (1.036) (.098)
NET ASSET VALUE, END OF PERIOD $ 11.090 $ 11.250 $ 11.000 $ 9.920
TOTAL RETURN(B),(C) 9.33% 12.89% 22.02% .17%
NET ASSETS, END OF PERIOD (000 OMITTED) $119,204 $ 99,327 $ 52,626 $ 10,687
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.20% 1.23% 1.35%(F) 1.35%(A),(F)
RATIO OF EXPENSES TO AVERAGE NET ASSETS
AFTER EXPENSE REDUCTIONS 1.19%(G) 1.22%(G) 1.35% 1.35%(A)
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 7.21% 7.34% 7.28% 5.80%(A)
PORTFOLIO TURNOVER 140% 119% 193% 104%(A)
<FN>
(A) ANNUALIZED
(B) TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF LESS
THAN ONE YEAR ARE NOT ANNUALIZED.
(C) THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
(D) NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
(E) FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A SHARES) TO
DECEMBER 31, 1996.
(F) FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE BEEN HIGHER.
(G) FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
(H) FOR THE PERIOD OCTOBER 31, 1994 (COMMENCEMENT OF OPERATIONS) TO DECEMBER 31,
1994.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STRATEGIC INCOME - CLASS B
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED DECEMBER 31 1997 1996 1995 1994(E)
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.260 $ 11.010 $ 9.910 $10.000
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .740(D) .743(D) .820 .072(D)
NET REALIZED AND UNREALIZED GAIN (LOSS) .194 .538 1.237 (.078)
TOTAL FROM INVESTMENT OPERATIONS .934 1.281 2.057 (.006)
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.724) (.731) (.727) (.084)
FROM NET REALIZED GAIN (.370) (.300) (.230) --
TOTAL DISTRIBUTIONS (1.094) (1.031) (.957) (.084)
NET ASSET VALUE, END OF PERIOD $ 11.100 $ 11.260 $ 11.010 $ 9.910
TOTAL RETURN(B),(C) 8.60% 12.14% 21.35% (.06)%
NET ASSETS, END OF PERIOD (000 OMITTED) $ 54,562 $ 37,403 $ 26,654 $ 9,379
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.86% 1.88% 2.10%(F) 2.10%(A),(F)
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.85%(G) 1.87%(G) 2.10% 2.10%(A)
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 6.55% 6.69% 6.53% 5.06%(A)
PORTFOLIO TURNOVER 140% 119% 193% 104%(A)
</TABLE>
<TABLE>
<CAPTION>
STRATEGIC INCOME - CLASS C
SELECTED PER-SHARE DATA AND RATIO(D)
YEAR ENDED DECEMBER 31 1997(H)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $11.400
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .105
NET REALIZED AND UNREALIZED GAIN (LOSS) .037
TOTAL FROM INVESTMENT OPERATIONS .142
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.152)
FROM NET REALIZED GAIN (.310)
TOTAL DISTRIBUTIONS (.462)
NET ASSET VALUE, END OF PERIOD $11.080
TOTAL RETURN(B),(C) 1.27%
NET ASSETS, END OF PERIOD (000 OMITTED) $ 659
RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.10%(A),(F)
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 6.30%(A)
PORTFOLIO TURNOVER 140%
<FN>
(A) ANNUALIZED
(B) TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
(C) THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
(D) NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
(E) FOR THE PERIOD OCTOBER 31, 1994 (COMMENCEMENT OF OPERATIONS) TO DECEMBER 31,
1994.
(F) FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE BEEN HIGHER.
(G) FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
(H) FOR THE PERIOD NOVEMBER 3, 1997 (COMMENCEMENT OF SALE OF CLASS C SHARES) TO
DECEMBER 31, 1997.
</TABLE>
<PAGE>
MORTGAGE SECURITIES - CLASS A
<TABLE>
<CAPTION>
SELECTED PER-SHARE DATA AND RATIOS(F)
YEARS ENDED 1997(H) 1997(E)
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $11.050 $10.830
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .170 .268
NET REALIZED AND UNREALIZED GAIN (LOSS) .048 .224
TOTAL FROM INVESTMENT OPERATIONS .218 .492
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.168) (.272)
FROM NET REALIZED GAIN (.080) --
TOTAL DISTRIBUTIONS (.248) (.272)
NET ASSET VALUE, END OF PERIOD $11.020 $11.050
TOTAL RETURN(B), (C) 2.00% 4.61%
NET ASSETS, END OF PERIOD (000 OMITTED) $ 1,648 $ 1,586
RATIO OF EXPENSES TO AVERAGE NET ASSETS .90%(A), (D) .90%(A), (D)
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 6.18%(A) 6.09%(A)
PORTFOLIO TURNOVER 125%(A) 149%
</TABLE>
MORTGAGE SECURITIES - CLASS T
<TABLE>
<CAPTION>
SELECTED PER-SHARE DATA AND RATIOS(F)
YEARS ENDED 1997(H) 1997(G)
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $11.050 $10.830
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .167 .255
NET REALIZED AND UNREALIZED GAIN (LOSS) .048 .233
TOTAL FROM INVESTMENT OPERATIONS .215 .488
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.165) (.268)
FROM NET REALIZED GAIN (.080) --
TOTAL DISTRIBUTIONS (.245) (.268)
NET ASSET VALUE, END OF PERIOD $11.020 $11.050
TOTAL RETURN(B), (C) 1.98% 4.57%
NET ASSETS, END OF PERIOD (000 OMITTED) $14,649 $12,193
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.00%(A), (D) 1.00%(A), (D)
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 6.10%(A) 5.99%(A)
PORTFOLIO TURNOVER 125%(A) 149%
<FN>
(A) ANNUALIZED
(B) THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
(C) TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF LESS
THAN ONE YEAR ARE NOT ANNUALIZED.
(D) FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE BEEN HIGHER.
(E) FOR THE PERIOD MARCH 3, 1997 (COMMENCEMENT OF SALE OF CLASS A SHARES) TO JULY
31, 1997.
(F) NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
(G) FOR THE PERIOD MARCH 3, 1997 (COMMENCEMENT OF SALE OF CLASS T SHARES) TO JULY
31, 1997.
(H) THREE MONTHS ENDED OCTOBER 31, 1997.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MORTGAGE SECURITIES - CLASS B
SELECTED PER-SHARE DATA AND RATIOS(F)
YEARS ENDED 1997(G) 1997(D)
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $11.040 $10.830
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .142 .234
NET REALIZED AND UNREALIZED GAIN (LOSS) .065 .214
TOTAL FROM INVESTMENT OPERATIONS .207 .448
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.147) (.238)
FROM NET REALIZED GAIN (.080) --
TOTAL DISTRIBUTIONS (.227) (.238)
NET ASSET VALUE, END OF PERIOD $11.020 $11.040
TOTAL RETURN(B), (C) 1.90% 4.20%
NET ASSETS, END OF PERIOD (000 OMITTED) $ 1,587 $ 823
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.65%(A), (E) 1.65%(A), (E)
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 5.32%(A) 5.34%(A)
PORTFOLIO TURNOVER 125%(A) 149%
<FN>
(A) ANNUALIZED
(B) THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
(C) TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
(D) FOR THE PERIOD MARCH 3, 1997 (COMMENCEMENT OF SALE OF CLASS B SHARES) TO JULY
31, 1997.
(E) FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE BEEN HIGHER.
(F) NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
(G) THREE MONTHS ENDED OCTOBER 31, 1997.
</TABLE>
<PAGE>
GOVERNMENT INVESTMENT - CLASS A
<TABLE>
<CAPTION>
SELECTED PER-SHARE DATA AND RATIOS (D)
YEARS ENDED OCTOBER 31 1997 1996 (E)
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $9.490 $ 9.250
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .552 .090
NET REALIZED AND UNREALIZED GAIN (LOSS) .187 .241
TOTAL FROM INVESTMENT OPERATIONS .739 .331
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.559) (.091)
NET ASSET VALUE, END OF PERIOD $9.670 $ 9.490
TOTAL RETURN (B), (C) 8.09% 3.58%
NET ASSETS, END OF PERIOD (000 OMITTED) $1,582 $ 223
RATIO OF EXPENSES TO AVERAGE NET ASSETS .90% (F) .90% (A), (F)
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 5.98% 6.28% (A)
PORTFOLIO TURNOVER 136% 153%
</TABLE>
GOVERNMENT INVESTMENT - CLASS T
<TABLE>
<CAPTION>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED OCTOBER 31 1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, $ 9.490 $ 9.670 $ 8.960 $ 10.140 $ 9.730
BEGINNING OF PERIOD
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .558 (D) .586 (D) .594 .515 .567
NET REALIZED AND UNREALIZED GAIN (LOSS) .171 (.180) .701 (1.031) .601
TOTAL FROM INVESTMENT OPERATIONS .729 .406 1.295 (.516) 1.168
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.549) (.586) (.585) (.504) (.558)
FROM NET REALIZED GAIN -- -- -- (.130) (.200)
IN EXCESS OF NET REALIZED GAIN -- -- -- (.030) --
TOTAL DISTRIBUTIONS (.549) (.586) (.585) (.664) (.758)
NET ASSET VALUE, END OF PERIOD $ 9.670 $ 9.490 $ 9.670 $ 8.960 $10.140
TOTAL RETURN (B), (C) 7.97% 4.38% 14.91% (5.27)% 12.53%
NET ASSETS, END OF PERIOD (000 OMITTED) $144,948 $217,883 $208,620 $114,453 $69,876
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.00% (F) 1.00% .89% (F) .74% (F) .68% (F)
RATIO OF EXPENSES TO AVERAGE NET ASSETS
AFTER EXPENSE REDUCTIONS 1.00% .99% (G) .89% .74% .68%
RATIO OF NET INVESTMENT INCOME TO
AVERAGE NET ASSETS 5.88% 6.19% 6.34% 6.18% 6.11%
PORTFOLIO TURNOVER 136% 153% 261% 313% 333%
<CAPTION>
YEARS ENDED OCTOBER 31 1992 1991 1990 1989 1988
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, $ 9.590 $ 9.150 $ 9.310 $ 9.260 $ 9.200
BEGINNING OF PERIOD
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .666 .700 .735 .773 .769
NET REALIZED AND UNREALIZED GAIN (LOSS) .125 .419 (.160) .050 .060
TOTAL FROM INVESTMENT OPERATIONS .791 1.119 .575 .823 .829
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.651) (.679) (.735) (.773) (.769)
FROM NET REALIZED GAIN -- -- -- -- --
IN EXCESS OF NET REALIZED GAIN -- -- -- -- --
TOTAL DISTRIBUTIONS (.651) (.679) (.735) (.773) (.769)
NET ASSET VALUE, END OF PERIOD $ 9.730 $ 9.590 $ 9.150 $ 9.310 $ 9.260
TOTAL RETURN (B), (C) 8.49% 12.65% 6.48% 9.37% 9.34%
NET ASSETS, END OF PERIOD (000 OMITTED) $ 23,281 $ 13,058 $ 9,822 $ 8,203 $ 6,590
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.10% (F) 1.10% (F) 1.10% (F) 1.10% (F) 1.10% (F)
RATIO OF EXPENSES TO AVERAGE NET ASSETS
AFTER EXPENSE REDUCTIONS 1.10% 1.10% 1.10% 1.10% 1.10%
RATIO OF NET INVESTMENT INCOME TO
AVERAGE NET ASSETS 6.98% 7.47% 8.04% 8.45% 8.30%
PORTFOLIO TURNOVER 315% 54% 31% 42% 44%
<FN>
(A) ANNUALIZED
(B) THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
(C) TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
(D) NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
(E) FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A SHARES) TO OCTOBER 31, 1996.
(F) FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE PERIOD. WITHOUT THIS REIMBURSEMENT,
THE CLASS' EXPENSE RATIO WOULD HAVE BEEN HIGHER.
(G) FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES WHO EITHER PAID OR REDUCED A
PORTION OF THE CLASS' EXPENSES.
</TABLE>
<PAGE>
GOVERNMENT INVESTMENT - CLASS B
<TABLE>
<CAPTION>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED OCTOBER 31 1997 1996 1995 1994(E)
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.490 $ 9.670 $ 8.950 $9.100
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .494(D) .520(D) .542 .144
NET REALIZED AND UNREALIZED GAIN (LOSS) .166 (.177) .693 (.137)
TOTAL FROM INVESTMENT OPERATIONS .660 .343 1.235 .007
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.490) (.523) (.515) (.157)
NET ASSET VALUE, END OF PERIOD $ 9.660 $ 9.490 $ 9.670 $8.950
TOTAL RETURN(B),(C) 7.20% 3.69% 14.19% 0.10%
NET ASSETS, END OF PERIOD (000 OMITTED) $18,782 $17,355 $11,766 $2,062
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.65%(F) 1.67%(F) 1.65%(F) 1.70%(A),(F)
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 5.24% 5.51% 5.58% 5.22%(A)
PORTFOLIO TURNOVER 136% 153% 261% 313%
<FN>
(A) ANNUALIZED
(B) THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
(C) TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE AND FOR PERIODS OF LESS THAN ONE YEAR ARE
NOT ANNUALIZED.
(D) NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
(E) FOR THE PERIOD JUNE 30, 1994 (COMMENCEMENT OF SALE OF CLASS B SHARES) TO OCTOBER 31, 1994.
(F) FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE PERIOD. WITHOUT THIS REIMBURSEMENT,
THE CLASS' EXPENSE RATIO WOULD HAVE BEEN HIGHER.
</TABLE>
<PAGE>
INTERMEDIATE BOND - CLASS A
<TABLE>
<CAPTION>
SELECTED PER-SHARE DATA AND RATIOS(G)
YEARS ENDED NOVEMBER 30 1997 1996(F)
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.590 $10.350
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .615 .159
NET REALIZED AND UNREALIZED GAIN (LOSS) (.023) .235(I)
TOTAL FROM INVESTMENT OPERATIONS .592 .394
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.622) (.154)
NET ASSET VALUE, END OF PERIOD $10.560 $10.590
TOTAL RETURN(B), (C) 5.81% 3.83%
NET ASSETS, END OF PERIOD (000 OMITTED) $ 3,819 $ 687
RATIO OF EXPENSES TO AVERAGE NET ASSETS .90%(E) .90%(A), (E)
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 5.93% 6.45%(A)
PORTFOLIO TURNOVER 138% 200%
</TABLE>
INTERMEDIATE BOND - CLASS T
<TABLE>
<CAPTION>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED NOVEMBER 30 1997 1996 1995 1994 1993 1992(D)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.610 $ 10.760 $ 10.260 $ 11.140 $10.640 $ 10.960
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .625(G) .671(G) .649 .609 .785 .170
NET REALIZED AND UNREALIZED GAIN (LOSS) (.058) (.147) .491 (.876) .511 (.320)
TOTAL FROM INVESTMENT OPERATIONS .567 .524 1.140 (.267) 1.296 (.150)
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.617) (.674) (.640) (.555) (.796) (.170)
FROM RETURN OF CAPITAL -- -- -- (.058) -- --
TOTAL DISTRIBUTIONS (.617) (.674) (.640) (.613) (.796) (.170)
NET ASSET VALUE, END OF PERIOD $ 10.560 $ 10.610 $ 10.760 $ 10.260 $11.140 $ 10.640
TOTAL RETURN(B), (C) 5.56% 5.10% 11.43% (2.44)% 12.50% (1.37)%
NET ASSETS, END OF PERIOD (000 OMITTED) $278,869 $262,103 $228,439 $141,866 $59,184 $ 2,583
RATIO OF EXPENSES TO AVERAGE NET ASSETS .96% .97% .94%(E) 1.02%(E) 1.23% .82%(A)
RATIO OF EXPENSES TO AVERAGE NET ASSETS
AFTER EXPENSE REDUCTIONS .96% .96%(H) .94% 1.02% 1.23% .82%(A)
RATIO OF NET INVESTMENT INCOME TO AVERAGE
NET ASSETS 5.97% 6.38% 6.20% 6.04% 6.81% 7.67%(A)
PORTFOLIO TURNOVER 138% 200% 189% 68% 59% 7%
<FN>
(A) ANNUALIZED
(B) THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
(C) TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
(D) FOR THE PERIOD SEPTEMBER 10, 1992 (COMMENCEMENT OF SALE OF CLASS T SHARES) TO NOVEMBER 30, 1992.
(E) FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS'
EXPENSE RATIO WOULD HAVE BEEN HIGHER.
(F) FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A SHARES) TO NOVEMBER 30, 1996.
(G) NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
(H) FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE
FUND'S EXPENSES.
(I) THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH THE AGGREGATE NET LOSS ON INVESTMENTS FOR THE PERIOD
DUE TO THE TIMING OF SALES AND REPURCHASES OF CLASS SHARES IN RELATION TO FLUCTUATING MARKET VALUES OF THE INVESTMENTS
OF THE FUND.
</TABLE>
<PAGE>
INTERMEDIATE BOND - CLASS B
<TABLE>
<CAPTION>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED NOVEMBER 30 1997 1996 1995 1994 (E)
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.590 $10.750 $10.250 $10.430
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .551 (D) .597 (D) .579 .204
NET REALIZED AND UNREALIZED GAIN (LOSS) (.057) (.153) .483 (.178)
TOTAL FROM INVESTMENT OPERATIONS .494 .444 1.062 .026
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.544) (.604) (.562) (.187)
FROM RETURN OF CAPITAL -- -- -- (.019)
TOTAL DISTRIBUTIONS (.544) (.604) (.562) (.206)
NET ASSET VALUE, END OF PERIOD $10.540 $10.590 $10.750 $10.250
TOTAL RETURN (B), (C) 4.83% 4.32% 10.62% .24%
NET ASSETS, END OF PERIOD (000 OMITTED) $22,201 $18,972 $15,830 $ 3,156
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.65% (F) 1.66% (F) 1.70% (F) 1.65% (A), (F)
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 5.27% 5.69% 5.44% 5.42% A
PORTFOLIO TURNOVER 138% 200% 189% 68%
</TABLE>
INTERMEDIATE BOND - CLASS C
<TABLE>
<CAPTION>
SELECTED PER-SHARE DATA AND RATIOS (D)
YEAR ENDED NOVEMBER 30 1997 (H)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.570
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .031
NET REALIZED AND UNREALIZED GAIN (LOSS) (.005)
TOTAL FROM INVESTMENT OPERATIONS .026
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.036)
NET ASSET VALUE, END OF PERIOD $10.560
TOTAL RETURN (B), (C) 0.25%
NET ASSETS, END OF PERIOD (000 OMITTED) $ 160
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.75% (A), (F)
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS 1.73% (A), (G)
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 4.42% (A)
PORTFOLIO TURNOVER 138%
<FN>
(A) ANNUALIZED
(B) THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
(C) TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE AND FOR PERIODS OF LESS THAN ONE YEAR ARE
NOT ANNUALIZED.
(D) NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
(E) FOR THE PERIOD JUNE 30, 1994 (COMMENCEMENT OF SALE OF CLASS B SHARES) TO NOVEMBER 30, 1994.
(F) FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE
CLASS' EXPENSE RATIO WOULD HAVE BEEN HIGHER.
(G) FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES WHO EITHER PAID OR REDUCED A PORTION
OF THE CLASS' EXPENSES.
(H) FOR THE PERIOD NOVEMBER 3, 1997 (COMMENCEMENT OF SALE OF CLASS C SHARES) TO NOVEMBER 30, 1997.
</TABLE>
<PAGE>
SHORT FIXED-INCOME - CLASS A
<TABLE>
<CAPTION>
SELECTED PER-SHARE DATA AND RATIOS (D)
YEARS ENDED OCTOBER 31 1997 1996 (E)
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.370 $ 9.290
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .532 .090
NET REALIZED AND UNREALIZED GAIN (LOSS) (.021) .081 (G)
TOTAL FROM INVESTMENT OPERATIONS .511 .171
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.571) (.091)
NET ASSET VALUE, END OF PERIOD $ 9.310 $ 9.370
TOTAL RETURN, (B), (C) 5.64% 1.85%
NET ASSET, END OF PERIOD (000 OMITTED) $19,726 $ 204
RATIO OF EXPENSES TO AVERAGE NET ASSETS .90% (F) .90% (A), (F)
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 6.00% 6.27% (A)
PORTFOLIO TURNOVER 105% 124%
</TABLE>
SHORT FIXED-INCOME - CLASS T
<TABLE>
<CAPTION>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED OCTOBER 31 1997 1996 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.380 $ 9.470 $ 9.480 $ 10.090 $ 9.950 $ 9.870 $ 9.620
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .578 (D) .594 (D) .403 .479 .732 .830 .848
NET REALIZED AND UNREALIZED GAIN (LOSS) (.036) (.094) .148 (.501) .146 .071 .270
TOTAL FROM INVESTMENT OPERATIONS .542 .500 .551 (.022) .878 .901 1.118
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.572) (.590) (.407) (.464) (.738) (.821) (.868)
IN EXCESS OF NET INVESTMENT INCOME -- -- -- (.044) -- -- --
FROM RETURN OF CAPITAL -- -- (.154) (.080) -- -- --
TOTAL DISTRIBUTIONS (.572) (.590) (.561) (.588) (.738) (.821) (.868)
NET ASSET VALUE, END OF PERIOD $ 9.350 $ 9.380 $ 9.470 $ 9.480 $ 10.090 $ 9.950 $ 9.870
TOTAL RETURN (B), (C) 5.97% 5.45% 6.05% (.22)% 9.13% 9.44% 12.19%
NET ASSETS, END OF PERIOD (000 OMITTED) $351,614 $416,700 $546,546 $787,926 $654,202 $170,558 $25,244
RATIO OF EXPENSES TO AVERAGE NET ASSETS .89% .88% .89% .97% .95% .90% (F) .90% (F)
RATIO OF NET INVESTMENT INCOME TO 6.19% 6.29% 6.05% 5.91% 6.77% 7.59% 8.50%
AVERAGE NET ASSETS
PORTFOLIO TURNOVER 105% 124% 179% 108% 58% 57% 127%
</TABLE>
<TABLE>
<CAPTION>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED OCTOBER 31 1990 1989 1988
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.950 $ 9.940 $10.060
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .868 .832 .852
NET REALIZED AND UNREALIZED GAIN (LOSS) (.330) .010 (.120)
TOTAL FROM INVESTMENT OPERATIONS .538 .842 .732
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.868) (.832) (.852)
IN EXCESS OF NET INVESTMENT INCOME -- -- --
FROM RETURN OF CAPITAL -- -- --
TOTAL DISTRIBUTIONS (.868) (.832) (.852)
NET ASSET VALUE, END OF PERIOD $ 9.620 $ 9.950 $ 9.940
TOTAL RETURN (B), (C) 5.59% 8.89% 7.56%
NET ASSETS, END OF PERIOD (000 OMITTED) $13,062 $12,394 $13,433
RATIO OF EXPENSES TO AVERAGE NET ASSETS .90% (F) .90% (F) .90% (F)
RATIO OF NET INVESTMENT INCOME TO 8.86% 8.45% 8.39%
AVERAGE NET ASSETS
PORTFOLIO TURNOVER 144% 157% 178%
<FN>
(A) ANNUALIZED
(B) THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
(C) TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF LESS
THAN ONE YEAR ARE NOT ANNUALIZED.
(D) NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
(E) FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A SHARES) TO
OCTOBER 31, 1996.
(F) FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE BEEN HIGHER.
(G) THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH THE
AGGREGATE NET LOSS ON INVESTMENTS FOR THE PERIOD DUE TO THE TIMING OF SALES AND
REPURCHASES OF CLASS SHARES IN RELATION TO FLUCTUATING MARKET VALUES OF THE
INVESTMENTS OF THE FUND.
</TABLE>
<PAGE>
MUNICIPAL INCOME - CLASS A
<TABLE>
<CAPTION>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED OCTOBER 31 1997 1996 (G)
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $11.740 $11.630
INCOME FROM INVESTMENT OPERATIONS
NET INTEREST INCOME .583 (E) .105 (E),(F)
NET REALIZED AND UNREALIZED GAIN (LOSS) .445 .109
TOTAL FROM INVESTMENT OPERATIONS 1.028 .214
LESS DISTRIBUTIONS
FROM NET INTEREST INCOME (.616) (F) (.104)
IN EXCESS OF NET INTEREST INCOME (.002) (H) --
TOTAL DISTRIBUTIONS (.618) (.104)
NET ASSET VALUE, END OF PERIOD $12.150 $11.740
TOTAL RETURN (B),(C) 9.02% 1.84%
NET ASSETS, END OF PERIOD (000 OMITTED) $ 3,755 $ 202
RATIO OF EXPENSES TO AVERAGE NET ASSETS .90% (D) .90% (A),(D)
RATIO OF NET INTEREST INCOME TO AVERAGE NET ASSETS 4.87% 5.73% (A)
PORTFOLIO TURNOVER 36% 49%
</TABLE>
MUNICIPAL INCOME - CLASS T
<TABLE>
<CAPTION>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED OCTOBER 31 1997 1996 1995 1994(I) 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 11.760 $ 11.880 $ 11.220 $ 12.720 $11.650 $ 11.410 $10.870
INCOME FROM INVESTMENT OPERATIONS
NET INTEREST INCOME .597 (E) .677 (E), (F) .700 .689 .710 .774 .803
NET REALIZED AND UNREALIZED GAIN (LOSS) .407 (.136) .660 (1.430) 1.100 .250 .660
TOTAL FROM INVESTMENT OPERATIONS 1.004 .541 1.360 (.741) 1.810 1.024 1.463
LESS DISTRIBUTIONS
FROM NET INTEREST INCOME (.612) (F) (.661) (.700) (.689) (.710) (.774) (.803)
IN EXCESS OF NET INTEREST INCOME (.002) (H) -- -- -- -- -- --
FROM NET REALIZED GAIN -- -- -- (.060) (.030) (.010) (.120)
IN EXCESS OF NET REALIZED GAIN -- -- -- (.010) -- -- --
TOTAL DISTRIBUTIONS (.614) (.661) (.700) (.759) (.740) (.784) (.923)
NET ASSET VALUE, END OF PERIOD $ 12.150 $ 11.760 $ 11.880 $ 11.220 $ 12.720 $ 11.650 $11.410
TOTAL RETURN (B),(C) 8.89% 4.68% 12.50% (6.03)% 15.95% 9.21% 14.02%
NET ASSETS, END OF PERIOD (000 OMITTED) $392,075 $480,432 $565,131 $544,422 $497,575 $156,659 $67,135
RATIO OF EXPENSES TO AVERAGE NET ASSETS .89% .89% .91% .89% .92% .90% (D) .90% (D)
RATIO OF NET INTEREST INCOME TO 5.04% 5.74% 6.06% 5.78% 5.59% 6.59% 7.08%
AVERAGE NET ASSETS
PORTFOLIO TURNOVER 36% 49% 37% 38% 27% 13% 10%
</TABLE>
<TABLE>
<CAPTION>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED OCTOBER 31 1990 1989 1988
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $10.820 $10.460 $ 9.850
INCOME FROM INVESTMENT OPERATIONS
NET INTEREST INCOME .811 .800 .750
NET REALIZED AND UNREALIZED GAIN (LOSS) .150 .410 .610
TOTAL FROM INVESTMENT OPERATIONS .961 1.210 1.360
LESS DISTRIBUTIONS
FROM NET INTEREST INCOME (.811) (.800) (.750)
IN EXCESS OF NET INTEREST INCOME -- -- --
FROM NET REALIZED GAIN (.100) (.050) --
IN EXCESS OF NET REALIZED GAIN -- -- --
TOTAL DISTRIBUTIONS (.911) (.850) (.750)
NET ASSET VALUE, END OF PERIOD $10.870 $10.820 $10.460
TOTAL RETURN (B), (C) 9.28% 12.05% 14.22%
NET ASSETS, END OF PERIOD (000 OMITTED) $22,702 $ 6,669 $ 3,290
RATIO OF EXPENSES TO AVERAGE NET ASSETS .90% (D) .90% (D) .89% (D)
RATIO OF NET INTEREST INCOME TO 7.37% 7.60% 7.33%
AVERAGE NET ASSETS
PORTFOLIO TURNOVER 11% 27% 19%
<FN>
(A) ANNUALIZED
(B) TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF LESS
THAN ONE YEAR ARE NOT ANNUALIZED.
(C) THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
(D) FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE BEEN HIGHER.
(E) NET INTEREST INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
(F) NET INTEREST INCOME PER SHARE IN 1996 REFLECTS A PAYMENT RECEIVED FROM AN
ISSUER IN BANKRUPTCY WHICH WAS DISTRIBUTED IN 1997.
(G) FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A SHARES) TO
OCTOBER 31, 1996.
(H) THE AMOUNTS SHOWN REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX
DIFFERENCES.
(I) EFFECTIVE DECEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DISTRIBUTION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES." AS A
RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN RECLASSIFICATIONS
RELATED TO BOOK TO TAX DIFFERENCES. MUNICIPAL INCOME - CLASS B
</TABLE>
<PAGE>
MUNICIPAL INCOME - CLASS B
<TABLE>
<CAPTION>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED OCTOBER 31 1997 1996 1995 1994 (G)
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $11.740 $11.860 $11.210 $11.610
INCOME FROM INVESTMENT OPERATIONS
NET INTEREST INCOME .515 (E) .596 (E),(F) .612 .188
NET REALIZED AND UNREALIZED GAIN (LOSS) .416 (.136) .650 (.400)
TOTAL FROM INVESTMENT OPERATIONS .931 .460 1.262 (.212)
LESS DISTRIBUTIONS
FROM NET INTEREST INCOME (.539) (F) (.580) (.612) (.188)
IN EXCESS OF NET INTEREST INCOME (.002) (H) -- -- --
TOTAL DISTRIBUTIONS (.541) (.580) (.612) (.188)
NET ASSET VALUE, END OF PERIOD $12.130 $11.740 $11.860 $11.210
TOTAL RETURN (B), (C) 8.15% 3.98% 11.57% (1.86)
NET ASSETS, END OF PERIOD (000 OMITTED) $41,024 $39,389 $32,395 $ 9,968
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.56% 1.57% 1.86% (D) 2.09% (A)
RATIO OF NET INTEREST INCOME TO AVERAGE NET ASSETS 4.35% 5.06% 5.18% 4.58% (A)
PORTFOLIO TURNOVER 36% 49% 37% 38%
<FN>
(A) ANNUALIZED
(B) TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
(C) THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
(D) FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE BEEN HIGHER.
(E) NET INTEREST INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
(F) NET INTEREST INCOME PER SHARE IN 1996 REFLECTS A PAYMENT RECEIVED FROM AN
ISSUER IN BANKRUPTCY WHICH WAS DISTRIBUTED IN 1997.
(G) FOR THE PERIOD JUNE 30, 1994 (COMMENCEMENT OF SALE OF CLASS B SHARES) TO
OCTOBER 31, 1994.
(H) THE AMOUNTS SHOWN REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX
DIFFERENCES. INTERMEDIATE MUNICIPAL INCOME - CLASS A
</TABLE>
<PAGE>
INTERMEDIATE MUNICIPAL INCOME - CLASS A
<TABLE>
<CAPTION>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED NOVEMBER 30 1997 1996(E)
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.410 $ 10.160
INCOME FROM INVESTMENT OPERATIONS
NET INTEREST INCOME .459 .113
NET REALIZED AND UNREALIZED GAIN (LOSS) .191 .250(G)
TOTAL FROM INVESTMENT OPERATIONS .650 .363
LESS DISTRIBUTIONS
FROM NET INTEREST INCOME (.459) (.113)
FROM NET REALIZED GAIN (.001) --
TOTAL DISTRIBUTIONS (.460) (.113)
NET ASSET VALUE, END OF PERIOD $ 10.600 $ 10.410
TOTAL RETURN (B),(C) 6.42% 3.59%
NET ASSETS, END OF PERIOD (000 OMITTED) $ 442 $ 103
RATIO OF EXPENSES TO AVERAGE NET ASSETS .90%(D) .90%(A),(D)
RATIO OF NET INTEREST INCOME TO AVERAGE NET ASSETS 4.37% 4.60%(A)
PORTFOLIO TURNOVER 18% 35%
</TABLE>
INTERMEDIATE MUNICIPAL INCOME - CLASS T
<TABLE>
<CAPTION>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED NOVEMBER 30 1997 1996 1995 1994(H) 1993 1992(F)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.410 $ 10.380 $ 9.400 $ 10.460 $ 11.080 $ 11.010
INCOME FROM INVESTMENT OPERATIONS
NET INTEREST INCOME .449 .461 .451 .455 .508 .131
NET REALIZED AND UNREALIZED GAIN (LOSS) .181 .030G .980 (1.040) .260 .070
TOTAL FROM INVESTMENT OPERATIONS .630 .491 1.431 (.585) .768 .201
LESS DISTRIBUTIONS
FROM NET INTEREST INCOME (.449) (.461) (.451) (.455) (.508) (.131)
FROM NET REALIZED GAIN (.001) -- -- -- (.880) --
IN EXCESS OF NET REALIZED GAIN -- -- -- (.020) -- --
TOTAL DISTRIBUTIONS (.450) (.461) (.451) (.475) (1.388) (.131)
NET ASSET VALUE, END OF PERIOD $ 10.590 $ 10.410 $ 10.380 $ 9.400 $ 10.460 $ 11.080
TOTAL RETURN (B), (C) 6.21% 4.89% 15.49% (5.78)% 7.72% 1.37%
NET ASSETS, END OF PERIOD (000 OMITTED) $ 48,830 $ 56,729 $ 62,852 $ 57,382 $ 39,800 $ 1,752
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.00%(D) 1.00%(D) .94%(D) .90%(D) .90%(D) 1.04%(A),(D)
RATIO OF NET INTEREST INCOME TO AVERAGE NET ASSETS 4.32% 4.42% 4.56% 4.49% 4.76% 5.65%(A)
PORTFOLIO TURNOVER 18% 35% 53% 53% 46% 36%
<FN>
(A) ANNUALIZED
(B) THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
(C) TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF LESS
THAN ONE YEAR ARE NOT ANNUALIZED.
(D) FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE BEEN HIGHER.
(E) FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A SHARES) TO
NOVEMBER 30, 1996.
(F) FOR THE PERIOD SEPTEMBER 10, 1992 (COMMENCEMENT OF SALE OF CLASS T SHARES) TO
NOVEMBER 30, 1992.
(G) THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH THE
AGGREGATE NET LOSS ON INVESTMENTS FOR THE PERIOD DUE TO THE TIMING OF SALES AND
REPURCHASES OF CLASS SHARES IN RELATION TO FLUCTUATING MARKET VALUES OF THE
INVESTMENTS OF THE FUND.
(H) EFFECTIVE DECEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DISTRIBUTION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES." AS A
RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN RECLASSIFICATIONS
RELATED TO BOOK TO TAX DIFFERENCES.
</TABLE>
<PAGE>
INTERMEDIATE MUNICIPAL INCOME - CLASS B
<TABLE>
<CAPTION>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED NOVEMBER 30 1997 1996 1995 1994D
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.410 $ 10.380 $ 9.400 $ 9.890
INCOME FROM INVESTMENT OPERATIONS
NET INTEREST INCOME .382 .394 .373 .155
NET REALIZED AND UNREALIZED GAIN (LOSS) .181 .030F .980 (.490)
TOTAL FROM INVESTMENT OPERATIONS .563 .424 1.353 (.335)
LESS DISTRIBUTIONS
FROM NET INTEREST INCOME (.382) (.394) (.373) (.155)
FROM NET REALIZED GAIN (.001) -- -- --
TOTAL DISTRIBUTIONS (.383) (.394) (.373) (.155)
NET ASSET VALUE, END OF PERIOD $ 10.590 $ 10.410 $ 10.380 $ 9.400
TOTAL RETURN(B),(C) 5.54% 4.21% 14.60% (3.44)%
NET ASSETS, END OF PERIOD (000 OMITTED) $ 7,917 $ 7,445 $ 6,226 $ 1,682
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.65%E 1.66%E 1.68%E 1.65%A,E
RATIO OF NET INTEREST INCOME TO AVERAGE NET ASSETS 3.67% 3.76% 3.71% 3.74%A
PORTFOLIO TURNOVER 18% 35% 53% 53%
</TABLE>
<TABLE>
<CAPTION>
INTERMEDIATE MUNICIPAL INCOME - CLASS C
SELECTED PER-SHARE DATA AND RATIOS
YEAR ENDED NOVEMBER 30 1997G
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.550
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .027
NET REALIZED AND UNREALIZED GAIN (LOSS) .040
TOTAL FROM INVESTMENT OPERATIONS .067
LESS DISTRIBUTIONS
FROM NET INTEREST INCOME (.027)
NET ASSET VALUE, END OF PERIOD $ 10.590
TOTAL RETURN(B),(C) 0.63%
NET ASSETS, END OF PERIOD (000 OMITTED) $ 13
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.75%A,E
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 3.33%A
PORTFOLIO TURNOVER 18%
<FN>
(A) ANNUALIZED
(B) THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
(C) TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
(D) FOR THE PERIOD JUNE 30, 1994 (COMMENCEMENT OF SALE OF CLASS B SHARES) TO
NOVEMBER 30, 1994.
(E) FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE BEEN HIGHER.
(F) THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH THE
AGGREGATE NET LOSS ON INVESTMENTS FOR THE PERIOD DUE TO THE TIMING OF SALES AND
REPURCHASES OF CLASS SHARES IN RELATION TO FLUCTUATING MARKET VALUES OF THE
INVESTMENTS OF THE FUND.
(G) FOR THE PERIOD NOVEMBER 3, 1997 (COMMENCEMENT OF SALE OF CLASS C SHARES) TO
NOVEMBER 30, 1997.
</TABLE>
<PAGE>
SHORT-INTERMEDIATE MUNICIPAL INCOME - CLASS A
<TABLE>
<CAPTION>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED NOVEMBER 30 1997 1996D
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.210 $ 10.100
INCOME FROM INVESTMENT OPERATIONS
NET INTEREST INCOME .406 .100
NET REALIZED AND UNREALIZED GAIN (LOSS) .020 .110
TOTAL FROM INVESTMENT OPERATIONS .426 .210
LESS DISTRIBUTIONS
FROM NET INTEREST INCOME (.406) (.100)
FROM NET REALIZED GAIN (.030) --
TOTAL DISTRIBUTIONS (.436) (.100)
NET ASSET VALUE, END OF PERIOD $ 10.200 $ 10.210
TOTAL RETURN(B),(C) 4.28% 2.09%
NET ASSETS, END OF PERIOD (000 OMITTED) $ 639 $ 186
RATIO OF EXPENSES TO AVERAGE NET ASSETS .90%F .90%A,F
RATIO OF NET INTEREST INCOME TO AVERAGE NET ASSETS 4.00% 4.06%A
PORTFOLIO TURNOVER 41% 62%
</TABLE>
SHORT-INTERMEDIATE MUNICIPAL INCOME - CLASS T
<TABLE>
<CAPTION>
SELECTED PER-SHARE DATA AND RATIOS
YEARS ENDED NOVEMBER 30 1997 1996 1995 1994E
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.210 $ 10.240 $ 9.770 $ 10.000
INCOME FROM INVESTMENT OPERATIONS
NET INTEREST INCOME .405 .404 .430 .259
NET REALIZED AND UNREALIZED GAIN (LOSS) .030 .000 .470 (.230)
TOTAL FROM INVESTMENT OPERATIONS .435 .404 .900 .029
LESS DISTRIBUTIONS
FROM NET INTEREST INCOME (.405) (.404) (.430) (.259)
FROM NET REALIZED GAIN (.030) (.030) -- --
TOTAL DISTRIBUTIONS (.435) (.434) (.430) (.259)
NET ASSET VALUE, END OF PERIOD $ 10.210 $ 10.210 $ 10.240 $ 9.770
TOTAL RETURN(B),(C) 4.37% 4.06% 9.38% .27%
NET ASSETS, END OF PERIOD (000 OMITTED) $ 21,916 $ 29,887 $ 29,274 $ 16,563
RATIO OF EXPENSES TO AVERAGE NET ASSETS .90%F .90%F .82%F .75%A,F
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE REDUCTIONS .90% .89%G .82% .75%A
RATIO OF NET INTEREST INCOME TO AVERAGE NET ASSETS 3.99% 3.97% 4.25% 3.74%A
PORTFOLIO TURNOVER 41% 62% 80% 111%A
<FN>
(A) ANNUALIZED
(B) THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
(C) TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF LESS
THAN ONE YEAR ARE NOT ANNUALIZED.
(D) FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A SHARES) TO
NOVEMBER 30, 1996.
(E) FOR THE PERIOD MARCH 16, 1994 (COMMENCEMENT OF SALE OF CLASS T SHARES) TO
NOVEMBER 30, 1994.
(F) FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE PERIOD.
WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE BEEN HIGHER.
(G) FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES WHO
EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES. KEY FACTS
</TABLE>
<PAGE>
PERFORMANCE
Mutual fund performance is commonly measured as TOTAL RETURN and/or YIELD.
For Balanced, High Yield, Mortgage Securities, Government Investment, Short
Fixed-Income, and Municipal Income, the fiscal year runs from November 1 to
October 31. For TechnoQuant Growth, Mid Cap, Equity Growth, Growth
Opportunities, Strategic Opportunities, Large Cap, Growth & Income, Equity
Income, Intermediate Bond, Intermediate Municipal Income, and Short-Intermediate
Municipal Income, the fiscal year runs from December 1 to November 30. For
Strategic Income the fiscal year end runs from January 1 to December 31. The
tables below show the performance of each class of each fund over past fiscal
periods. The charts in Appendix B, beginning on page , present calendar year
performance for each class compared to different measures, including a
competitive funds average.
EQUITY FUNDS - CLASS A
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN [E] CUMULATIVE TOTAL RETURN [E]
PAST 1 YEAR PAST 5 YEARS 10 YEARS/ PAST 1 YEAR PAST 5 YEARS 10 YEARS/
LIFE OF FUND+ LIFE OF FUND+
<S> <C> <C> <C> <C> <C> <C>
TECHNOQUANT GROWTH - CLASS A [C] N/A N/A N/A N/A N/A 13.80%
TECHNOQUANT GROWTH - CLASS A (LOAD ADJ.) [A] [C] N/A N/A N/A N/A N/A 7.26%
MID CAP - CLASS A [C] 22.24% N/A 22.29% 22.24% N/A 43.02%
MID CAP - CLASS A (LOAD ADJ.) [A] [C] 15.21% N/A 18.29% 15.21% N/A 34.80%
EQUITY GROWTH - CLASS A [C] 19.73% 18.52% 24.10% 19.73% 133.83% 766.65%
EQUITY GROWTH - CLASS A (LOAD ADJ.) [A] [C] 12.84% 17.12% 23.37% 12.84% 120.38% 716.82%
GROWTH OPPORTUNITIES - CLASS A [C] 22.32% 20.41% 22.36% 22.32% 153.15% 652.56%
GROWTH OPPORTUNITIES - CLASS A (LOAD ADJ.) [A] [C] 15.28% 19.00% 21.64% 15.28% 138.60% 609.28%
STRATEGIC OPPORTUNITIES - CLASS A [C] 26.87% 15.15% 15.58% 26.87% 102.41% 325.58%
STRATEGIC OPPORTUNITIES - CLASS A (LOAD ADJ.) [A] [C] 19.58% 13.79% 14.90% 19.58% 90.77% 301.11%
LARGE CAP - CLASS A [C] 18.82% N/A 21.11% 18.82% N/A 40.57%
LARGE CAP - CLASS A (LOAD ADJ.) [A] [C] 11.99% N/A 17.14% 11.99% N/A 32.49%
GROWTH & INCOME - CLASS A [C] N/A N/A N/A N/A N/A 25.04%
GROWTH & INCOME - CLASS A (LOAD ADJ.) [A] [C] N/A N/A N/A N/A N/A 17.85%
EQUITY INCOME - CLASS A [C] 22.05% 19.25% 16.35% 22.05% 141.13% 354.83%
EQUITY INCOME - CLASS A (LOAD ADJ.) [A] [C] 15.03% 17.84% 15.67% 15.03% 127.27% 328.68%
BALANCED - CLASS A [B] 20.99% 10.67% 13.69% 20.99% 65.98% 260.84%
BALANCED - CLASS A (LOAD ADJ.) [A] [B] 14.03% 9.36% 13.02% 14.03% 56.44% 240.09%
</TABLE>
<PAGE>
TAXABLE BOND FUNDS - CLASS A
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN [E] CUMULATIVE TOTAL RETURN [E]
PAST 1 YEAR PAST 5 YEARS 10 YEARS/ PAST 1 YEAR PAST 5 YEARS 10 YEARS/
LIFE OF FUND+ LIFE OF FUND+
<S> <C> <C> <C> <C> <C> <C>
HIGH YIELD - CLASS A [B] 15.18% 13.05% 15.19% 15.18% 84.67% 311.25%
HIGH YIELD - CLASS A (LOAD ADJ.) [A] [B] 9.71% 11.96% 14.63% 9.71% 75.89% 291.72%
STRATEGIC INCOME - CLASS A [D] 9.24% N/A 13.81% 9.24% N/A 50.64%
STRATEGIC INCOME - CLASS A (LOAD ADJ.) [A] [D] 4.05% N/A 12.08% 4.05% N/A 43.48%
MORTGAGE SECURITIES - CLASS A [B] 8.74% 8.03% 9.01% 8.74% 47.12% 136.92%
MORTGAGE SECURITIES - CLASS A (LOAD ADJ.) [A] [B] 3.57% 6.98% 8.48% 3.57% 40.13% 125.67%
GOVERNMENT INVESTMENT - CLASS A [B] 8.09% 6.69% 7.96% 8.09% 38.22% 115.08%
GOVERNMENT INVESTMENT - CLASS A (LOAD ADJ.) [A] [B] 2.95% 5.65% 7.44% 2.95% 31.66% 104.86%
INTERMEDIATE BOND - CLASS A [C] 5.81% 6.31% 8.09% 5.81% 35.77% 117.76%
INTERMEDIATE BOND - CLASS A (LOAD ADJ.) [A] [C] 1.84% 5.50% 7.68% 1.84% 30.67% 109.60%
SHORT FIXED-INCOME - CLASS A [B] 5.64% 5.14% 6.91% 5.64% 28.50% 95.13%
SHORT FIXED-INCOME - CLASS A (LOAD ADJ.) [A] [B] 4.05% 4.83% 6.75% 4.05% 26.57% 92.20%
</TABLE>
MUNICIPAL FUNDS - CLASS A
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN [E] CUMULATIVE TOTAL RETURN [E]
PAST 1 YEAR PAST 5 YEARS 10 YEARS/ PAST 1 YEAR PAST 5 YEARS 10 YEARS/
LIFE OF FUND+ LIFE OF FUND+
<S> <C> <C> <C> <C> <C> <C>
MUNICIPAL INCOME- CLASS A [B] 9.02% 6.90% 9.29% 9.02% 39.63% 143.16%
MUNICIPAL INCOME- CLASS A(LOAD ADJ.) [A] [B] 3.84% 5.87% 8.76% 3.84% 32.99% 131.61%
INTERMEDIATE MUNICIPAL INCOME - CLASS A [C] 6.42% 5.53% 6.70% 6.42% 30.87% 91.25%
INTERMEDIATE MUNICIPAL INCOME - CLASS A (LOAD ADJ.) [A] [C] 2.43% 4.72% 6.29% 2.43% 25.96% 84.08%
SHORT-INTERMEDIATE MUNICIPAL INCOME - CLASS A [C] 4.28% N/A 4.81% 4.28% N/A 19.03%
SHORT-INTERMEDIATE MUNICIPAL INCOME - CLASS A 2.72% N/A 4.38% 2.72% N/A 17.25%
(LOAD ADJ.) [A] [C]
</TABLE>
<PAGE>
EQUITY FUNDS - CLASS T
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN [E] CUMULATIVE TOTAL RETURN [E]
PAST 1 YEAR PAST 5 YEARS 10 YEARS/ PAST 1 YEAR PAST 5 YEARS 10 YEARS/
LIFE OF FUND+ LIFE OF FUND+
<S> <C> <C> <C> <C> <C> <C>
TECHNOQUANT GROWTH - CLASS T [C] N/A N/A N/A N/A N/A 13.60%
TECHNOQUANT GROWTH - CLASS T (LOAD ADJ.) [A] [C] N/A N/A N/A N/A N/A 9.62%
MID CAP - CLASS T [C] 22.35% N/A 22.35% 22.35% N/A 43.15%
MID CAP - CLASS T (LOAD ADJ.) [A] [C] 18.07% N/A 19.93% 18.07% N/A 38.14%
EQUITY GROWTH - CLASS T [C] 19.81% 18.54% 24.11% 19.81% 134.04% 767.43%
EQUITY GROWTH - CLASS T (LOAD ADJ.) [A] [C] 15.62% 17.70% 23.67% 15.62% 125.84% 737.07%
GROWTH OPPORTUNITIES - CLASS T [C] 22.13% 20.39% 22.35% 22.13% 152.90% 651.81%
GROWTH OPPORTUNITIES - CLASS T (LOAD ADJ.) [A] [C] 17.86% 19.54% 21.92% 17.86% 144.05% 625.50%
STRATEGIC OPPORTUNITIES - CLASS T [C] 27.00% 15.18% 15.60% 27.00% 102.70% 326.19%
STRATEGIC OPPORTUNITIES - CLASS T (LOAD ADJ.) [A] [C] 22.56% 14.36% 15.19% 22.56% 95.61% 311.27%
LARGE CAP - CLASS T [C] 18.89% N/A 21.09% 18.89% N/A 40.53%
LARGE CAP - CLASS T (LOAD ADJ.) [A] [C] 14.73% N/A 18.69% 14.73% N/A 35.61%
GROWTH & INCOME - CLASS T [C] N/A N/A N/A N/A N/A 24.83%
GROWTH & INCOME - CLASS T (LOAD ADJ.) [A] [C] N/A N/A N/A N/A N/A 20.46%
EQUITY INCOME - CLASS T [C] 22.12% 19.28% 16.37% 22.12% 141.45% 355.43%
EQUITY INCOME - CLASS T (LOAD ADJ.) [A] [C] 17.84% 18.43% 15.96% 17.84% 133.00% 339.49%
BALANCED - CLASS T [B] 21.36% 10.75% 13.73% 21.36% 66.59% 262.16%
BALANCED - CLASS T (LOAD ADJ.) [A] [B] 17.11% 9.96% 13.33% 17.11% 60.76% 249.48%
</TABLE>
TAXABLE BOND FUNDS - CLASS T
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN [E] CUMULATIVE TOTAL RETURN [E]
PAST 1 YEAR PAST 5 YEARS 10 YEARS/ PAST 1 YEAR PAST 5 YEARS 10 YEARS/
LIFE OF FUND+ LIFE OF FUND+
<S> <C> <C> <C> <C> <C> <C>
HIGH YIELD - CLASS T [B] 15.21% 13.10% 15.21% 15.21% 85.08% 312.17%
HIGH YIELD - CLASS T (LOAD ADJ.) [A] [B] 11.18% 12.30% 14.80% 11.18% 78.60% 297.75%
STRATEGIC INCOME - CLASS T [D] 9.33% N/A 13.87% 9.33% N/A 50.86%
STRATEGIC INCOME - CLASS T (LOAD ADJ.) [A] [D] 5.50% N/A 12.59% 5.50% N/A 45.58%
MORTGAGE SECURITIES - CLASS T [B] 8.67% 8.01% 9.00% 8.67% 47.03% 136.78%
MORTGAGE SECURITIES - CLASS T (LOAD ADJ.) [A] [B] 4.87% 7.25% 8.61% 4.87% 41.89% 128.50%
GOVERNMENT INVESTMENT - CLASS T [B] 7.97% 6.66% 7.95% 7.97% 38.06% 114.82%
GOVERNMENT INVESTMENT - CLASS T (LOAD ADJ.) [A] [B] 4.20% 5.91% 7.56% 4.20% 33.23% 107.31%
INTERMEDIATE BOND - CLASS T [C] 5.56% 6.29% 8.09% 5.56% 35.68% 117.63%
INTERMEDIATE BOND - CLASS T (LOAD ADJ.) [A] [C] 2.65% 5.70% 7.79% 2.65% 31.95% 111.65%
SHORT FIXED-INCOME - CLASS T [B] 5.97% 5.23% 6.96% 5.97% 29.04% 95.95%
SHORT FIXED-INCOME - CLASS T (LOAD ADJ.) [A] [B] 4.38% 4.91% 6.80% 4.38% 27.11% 93.01%
</TABLE>
<PAGE>
MUNICIPAL FUNDS - CLASS T
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN [E] CUMULATIVE TOTAL RETURN [E]
PAST 1 YEAR PAST 5 YEARS 10 YEARS/ PAST 1 YEAR PAST 5 YEARS
LIFE OF FUND+
<S> <C> <C> <C> <C> <C>
MUNICIPAL INCOME- CLASS T [B] 8.89% 6.92% 9.30% 8.89% 39.73%
MUNICIPAL INCOME- CLASS T (LOAD ADJ.) [A] [B] 5.08% 6.16% 8.91% 5.08% 34.84%
INTERMEDIATE MUNICIPAL INCOME - CLASS T [C] 6.21% 5.48% 6.68% 6.21% 30.58%
INTERMEDIATE MUNICIPAL INCOME - CLASS T (LOAD ADJ.) [A] [C] 3.29% 4.89% 6.38% 3.29% 26.99%
SHORT-INTERMEDIATE MUNICIPAL INCOME - CLASS T [C] 4.37% N/A 4.83% 4.37% N/A
SHORT-INTERMEDIATE MUNICIPAL INCOME - CLASS T 2.81% N/A 4.40% 2.81% N/A
(LOAD ADJ.) [A] [C]
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN [E] CUMULATIVE TOTAL RETURN [E]
10 YEARS/
LIFE OF FUND+
<S> <C>
MUNICIPAL INCOME- CLASS T [B] 143.34%
MUNICIPAL INCOME- CLASS T (LOAD ADJ.) [A] [B] 134.83%
INTERMEDIATE MUNICIPAL INCOME - CLASS T [C] 90.83%
INTERMEDIATE MUNICIPAL INCOME - CLASS T (LOAD ADJ.) [A] [C] 85.58%
SHORT-INTERMEDIATE MUNICIPAL INCOME - CLASS T [C] 19.12%
SHORT-INTERMEDIATE MUNICIPAL INCOME - CLASS T 17.33%
(LOAD ADJ.) [A] [C]
</TABLE>
EQUITY FUNDS - CLASS B
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN [E] CUMULATIVE TOTAL RETURN [E]
PAST 1 YEAR PAST 5 YEARS 10 YEARS/ PAST 1 YEAR PAST 5 YEARS 10 YEARS/
LIFE OF FUND+ LIFE OF FUND+
<S> <C> <C> <C> <C> <C> <C>
TECHNOQUANT GROWTH - CLASS B [C] N/A N/A N/A N/A N/A 13.10%
TECHNOQUANT GROWTH - CLASS B (LOAD ADJ.) [A] [C] N/A N/A N/A N/A N/A 8.10%
MID CAP - CLASS B [C] 21.67% N/A 21.45% 21.67% N/A 41.26%
MID CAP - CLASS B (LOAD ADJ.) [A] [C] 16.67% N/A 19.50% 16.67% N/A 37.26%
EQUITY GROWTH - CLASS B [C] 19.09% 18.39% 24.04% 19.09% 132.62% 762.19%
EQUITY GROWTH - CLASS B (LOAD ADJ.) [A] [C] 14.09% 18.19% 24.04% 14.09% 130.62% 762.19%
GROWTH OPPORTUNITIES - CLASS B [C] 21.63% 20.29% 22.30% 21.63% 151.87% 648.75%
GROWTH OPPORTUNITIES - CLASS B (LOAD ADJ.) [A] [C] 16.63% 20.10% 22.30% 16.63% 149.87% 648.75%
STRATEGIC OPPORTUNITIES - CLASS B [C] 26.33% 14.80% 15.41% 26.33% 99.42% 319.29%
STRATEGIC OPPORTUNITIES - CLASS B (LOAD ADJ.) [A] [C] 21.33% 14.57% 15.41% 21.33% 97.42% 319.29%
LARGE CAP - CLASS B [C] 18.18% N/A 20.40% 18.18% N/A 39.10%
LARGE CAP - CLASS B (LOAD ADJ.) [A] [C] 13.18% N/A 18.44% 13.18% N/A 35.10%
GROWTH & INCOME - CLASS B [C] N/A N/A N/A N/A N/A 24.22%
GROWTH & INCOME - CLASS B (LOAD ADJ.) [A] [C] N/A N/A N/A N/A N/A 19.22%
EQUITY INCOME - CLASS B [C] 21.52% 18.92% 16.19% 21.52% 137.80% 348.55%
EQUITY INCOME - CLASS B (LOAD ADJ.) [A] [C] 16.52% 18.72% 16.19% 16.52% 135.80% 348.55%
BALANCED - CLASS B [B] 20.54% 10.60% 13.66% 20.54% 65.46% 259.70%
BALANCED - CLASS B (LOAD ADJ.) [A] [B] 15.54% 10.33% 13.66% 15.54% 63.46% 259.70%
</TABLE>
<PAGE>
TAXABLE BOND FUNDS - CLASS B
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN [E] CUMULATIVE TOTAL RETURN [E]
PAST 1 YEAR PAST 5 YEARS 10 YEARS/ PAST 1 YEAR PAST 5 YEARS 10 YEARS/
LIFE OF FUND+ LIFE OF FUND+
<S> <C> <C> <C> <C> <C> <C>
HIGH YIELD - CLASS B [B] 14.34% 12.47% 14.89% 14.34% 79.96.% 300.76%
HIGH YIELD - CLASS B (LOAD ADJ.) [A] [B] 9.34% 12.22% 14.89% 9.34% 77.96% 300.76%
STRATEGIC INCOME - CLASS B [D] 8.60% N/A 13.11% 8.60% N/A 47.70%
STRATEGIC INCOME - CLASS B (LOAD ADJ.) [A] [D] 3.67% N/A 12.38% 3.67% N/A 44.70%
MORTGAGE SECURITIES - CLASS B [B] 8.20% 7.92% 8.95% 8.20% 46.39% 135.75%
MORTGAGE SECURITIES - CLASS B (LOAD ADJ.) [A] [B] 3.20% 7.62% 8.95% 3.20% 44.39% 135.75%
GOVERNMENT INVESTMENT - CLASS B [B] 7.20% 6.14% 7.68% 7.20% 34.74% 109.65%
GOVERNMENT INVESTMENT - CLASS B (LOAD ADJ.) [A] [B] 2.20% 5.83% 7.68% 2.20% 32.75% 109.65%
INTERMEDIATE BOND - CLASS B [B] 4.83% 5.73% 7.80% 4.83% 32.13% 111.93%
INTERMEDIATE BOND - CLASS B (LOAD ADJ.) [A] [B] 1.85% 5.73% 7.80% 1.85% 32.13% 111.93%
</TABLE>
MUNICIPAL FUNDS - CLASS B
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN [E] CUMULATIVE TOTAL RETURN [E]
PAST 1 YEAR PAST 5 YEARS 10 YEARS/ PAST 1 YEAR PAST 5 YEARS
LIFE OF FUND+
<S> <C> <C> <C> <C> <C>
MUNICIPAL INCOME- CLASS B [B] 8.15% 6.35% 9.01% 8.15% 36.06%
MUNICIPAL INCOME- CLASS B (LOAD ADJ.) [A] [B] 3.15% 6.04% 9.01% 3.15% 34.06%
INTERMEDIATE MUNICIPAL INCOME - CLASS B [C] 5.54% 4.97% 6.41% 5.54% 27.42%
INTERMEDIATE MUNICIPAL INCOME - CLASS B (LOAD ADJ.) [A] [C] 2.54% 4.97% 6.41% 2.54% 27.42%
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN [E] CUMULATIVE TOTAL RETURN [E]
10 YEARS/
LIFE OF FUND+
<S> <C>
MUNICIPAL INCOME- CLASS B [B] 136.95%
MUNICIPAL INCOME- CLASS B (LOAD ADJ.) [A] [B] 136.95%
INTERMEDIATE MUNICIPAL INCOME - CLASS B [C] 86.22%
INTERMEDIATE MUNICIPAL INCOME - CLASS B (LOAD ADJ.) [A] [C] 86.22%
</TABLE>
<PAGE>
EQUITY FUNDS - CLASS C
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN [E] CUMULATIVE TOTAL RETURN [E]
PAST 1 YEAR PAST 5 YEARS 10 YEARS/ PAST 1 YEAR PAST 5 YEARS 10 YEARS/
LIFE OF FUND+ LIFE OF FUND+
<S> <C> <C> <C> <C> <C> <C>
TECHNOQUANT GROWTH - CLASS C [C] N/A N/A N/A N/A N/A 13.12%
TECHNOQUANT GROWTH - CLASS C (LOAD ADJ.) [A] [C] N/A N/A N/A N/A N/A 12.12%
MID CAP - CLASS C [C] 21.68% N/A 21.45% 21.68% N/A 41.27%
MID CAP - CLASS C (LOAD ADJ.) [A] [C] 20.68% N/A 21.45% 20.68% N/A 41.27%
EQUITY GROWTH - CLASS C [C] 19.08% 18.39% 24.04% 19.08% 132.62% 762.17%
EQUITY GROWTH - CLASS C (LOAD ADJ.) [A] [C] 18.08% 18.39% 24.04% 18.08% 132.62% 762.17%
GROWTH OPPORTUNITIES - CLASS C [C] 21.68% 20.30% 22.31% 21.68% 151.98% 649.06%
GROWTH OPPORTUNITIES - CLASS C (LOAD ADJ.) [A] [C] 20.68% 20.30% 22.31% 20.68% 151.98% 649.06%
LARGE CAP - CLASS C [C] 18.18% N/A 20.40% 18.18% N/A 39.10%
LARGE CAP - CLASS C (LOAD ADJ.) [A] [C] 17.18% N/A 20.40% 17.18% N/A 39.10%
GROWTH & INCOME - CLASS C [C] N/A N/A N/A N/A N/A 24.21%
GROWTH & INCOME - CLASS C (LOAD ADJ.) [A] [C] N/A N/A N/A N/A N/A 23.21%
EQUITY INCOME - CLASS C [C] 21.56% 18.93% 16.20% 21.56% 137.88% 348.71%
EQUITY INCOME - CLASS C (LOAD ADJ.) [A] [C] 20.56% 18.93% 16.20% 20.56% 137.88% 348.71%
BALANCED - CLASS C [B] 20.54% 10.60% 13.66% 20.54% 65.46% 259.70%
BALANCED - CLASS C (LOAD ADJ.) [A] [B] 19.54% 10.60% 13.66% 19.54% 65.46% 259.70%
</TABLE>
TAXABLE BOND FUNDS - CLASS C
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN [E] CUMULATIVE TOTAL RETURN [E]
PAST 1 YEAR PAST 5 YEARS 10 YEARS/ PAST 1 YEAR PAST 5 YEARS 10 YEARS/
LIFE OF FUND+ LIFE OF FUND+
<S> <C> <C> <C> <C> <C> <C>
HIGH YIELD - CLASS C [B] 14.37% 12.45% 14.89% 14.37% 79.83% 300.77%
HIGH YIELD - CLASS C (LOAD ADJ.) [A] [B] 13.37% 12.45% 14.89% 13.37% 79.83% 300.77%
STRATEGIC INCOME - CLASS C [D] 8.55% N/A 13.09% 8.55% N/A 47.61%
STRATEGIC INCOME - CLASS C (LOAD ADJ.) [A] [D] 7.55% N/A 13.09% 7.55% N/A 47.61%
GOVERNMENT INVESTMENT - CLASS C [B] 7.21% 6.16% 7.69% 7.21% 34.82% 109.81%
GOVERNMENT INVESTMENT - CLASS C (LOAD ADJ.) [A] [B] 6.21% 6.16% 7.69% 6.21% 34.82% 109.81%
INTERMEDIATE BOND - CLASS C [C] 4.82% 5.74% 7.80% 4.82% 32.19% 112.02%
INTERMEDIATE BOND - CLASS C (LOAD ADJ.) [A] [C] 3.82% 5.74% 7.80% 3.82% 32.19% 112.02%
SHORT FIXED-INCOME - CLASS C [B] 5.97% 5.23% 6.96% 5.97% 29.04% 95.95%
SHORT FIXED-INCOME - CLASS C (LOAD ADJ.) [A] [B] 4.97% 5.23% 6.96% 4.97% 29.04% 95.95%
</TABLE>
<PAGE>
MUNICIPAL FUNDS - CLASS C
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN [E] CUMULATIVE TOTAL RETURN [E]
PAST 1 YEAR PAST 5 YEARS 10 YEARS/ PAST 1 YEAR PAST 5 YEARS
LIFE OF FUND+
<S> <C> <C> <C> <C> <C>
MUNICIPAL INCOME - CLASS C [B] 8.17% 6.36% 9.01% 8.17% 36.10%
MUNICIPAL INCOME - CLASS C (LOAD ADJ.) [A] [B] 7.17% 6.36% 9.01% 7.17% 36.10%
INTERMEDIATE MUNICIPAL INCOME - CLASS C [C] 5.54% 4.97% 6.42% 5.54% 27.44%
INTERMEDIATE MUNICIPAL INCOME - CLASS C (LOAD ADJ.) [A] [C] 4.54% 4.97% 6.42% 4.54% 27.44%
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN [E] CUMULATIVE TOTAL RETURN [E]
10 YEARS/
LIFE OF FUND+
<S> <C>
MUNICIPAL INCOME - CLASS C [B] 136.95%
MUNICIPAL INCOME - CLASS C (LOAD ADJ.) [A] [B] 136.95%
INTERMEDIATE MUNICIPAL INCOME - CLASS C [C] 86.26%
INTERMEDIATE MUNICIPAL INCOME - CLASS C (LOAD ADJ.) [A] [C] 86.26%
<FN>
+ LIFE OF FUND FIGURES ARE FROM COMMENCEMENT OF OPERATIONS (OCTOBER 31, 1994 FOR
STRATEGIC INCOME; MARCH 16, 1994 FOR SHORT-INTERMEDIATE MUNICIPAL INCOME;
FEBRUARY 20, 1996 FOR MID CAP, AND LARGE CAP, AND DECEMBER 31, 1996 FOR
TECHNOQUANT GROWTH AND GROWTH & INCOME) THROUGH THE ANNUAL PERIOD ENDED 1997.
[A] LOAD ADJUSTED RETURNS INCLUDE THE EFFECT OF PAYING CLASS A'S MAXIMUM
FRONT-END SALES CHARGE OF 5.75% FOR THE EQUITY FUNDS; 4.75% FOR THE BOND FUNDS;
3.75% FOR THE INTERMEDIATE-TERM BOND FUNDS; AND 1.50% FOR THE SHORT-TERM BOND
FUNDS. LOAD ADJUSTED RETURNS INCLUDE THE EFFECT OF PAYING CLASS T'S MAXIMUM
FRONT-END SALES CHARGE OF 3.50% FOR THE EQUITY FUNDS AND BOND FUNDS; 2.75% FOR
THE INTERMEDIATE-TERM BOND FUNDS; AND 1.50% FOR THE SHORT-TERM BOND FUNDS.
CLASS B'S AND CLASS C'S CDSC INCLUDED IN THE TOTAL RETURN FIGURES ARE
CALCULATED PURSUANT TO THE CDSC INFORMATION BEGINNING ON PAGE 80 .
[B] PERIOD ENDED OCTOBER 31, 1997.
[C] PERIOD ENDED NOVEMBER 30, 1997.
[D] PERIOD ENDED DECEMBER 31, 1997.
[E] INITIAL OFFERING OF CLASS A FOR EACH FUND (EXCEPT MORTGAGE SECURITIES,
TECHNOQUANT GROWTH, AND GROWTH & INCOME) TOOK PLACE ON SEPTEMBER 3, 1996. CLASS
A RETURNS PRIOR TO SEPTEMBER 3, 1996 (EXCEPT FOR EQUITY GROWTH, EQUITY INCOME,
INTERMEDIATE BOND, AND INTERMEDIATE MUNICIPAL INCOME) ARE THOSE OF CLASS T WHICH
REFLECT A 12B-1 FEE OF 0.50% (0.65% PRIOR TO JANUARY 1, 1996) FOR EQUITY FUNDS,
0.25% FOR BOND FUNDS, AND 0.15% FOR SHORT-TERM BOND FUNDS. IF CLASS A'S 12B-1
FEE HAD BEEN REFLECTED, TOTAL RETURNS PRIOR TO SEPTEMBER 3, 1996 FOR THE EQUITY
FUNDS AND THE BOND FUNDS WOULD HAVE BEEN HIGHER.
</TABLE>
FOR EQUITY GROWTH, EQUITY INCOME, INTERMEDIATE BOND, AND INTERMEDIATE
MUNICIPAL INCOME, CLASS A RETURNS FROM SEPTEMBER 3, 1996 THROUGH SEPTEMBER 10,
1992 ARE THOSE OF CLASS T WHICH REFLECT A 12B-1 FEE OF 0.50% (0.65% PRIOR TO
JANUARY 1, 1996) FOR EQUITY GROWTH AND EQUITY INCOME AND 0.25% FOR INTERMEDIATE
BOND AND INTERMEDIATE MUNICIPAL INCOME. CLASS A RETURNS PRIOR TO SEPTEMBER 10,
1992 ARE THOSE OF INSTITUTIONAL CLASS WHICH HAS NO 12B-1 FEE. IF CLASS A'S 12B-1
FEE HAD BEEN REFLECTED, TOTAL RETURNS PRIOR TO SEPTEMBER 3, 1996 THROUGH
SEPTEMBER 10, 1992 WOULD HAVE BEEN HIGHER AND TOTAL RETURNS PRIOR TO SEPTEMBER
10, 1992 WOULD HAVE BEEN LOWER.
INITIAL OFFERING OF CLASS A, CLASS T, AND CLASS B OF MORTGAGE
SECURITIES TOOK PLACE ON MARCH 3, 1997. CLASS A, CLASS T, AND CLASS B RETURNS
PRIOR TO MARCH 3, 1997 ARE THOSE OF INITIAL CLASS WHICH HAS NO 12B-1 FEE. IF
CLASS A'S, CLASS T'S, AND CLASS B'S RESPECTIVE 12B-1 FEES HAD BEEN REFLECTED,
TOTAL RETURNS PRIOR TO MARCH 3, 1997 WOULD HAVE BEEN LOWER.
INITIAL OFFERING OF CLASS T OF EQUITY GROWTH, EQUITY INCOME,
INTERMEDIATE BOND, AND INTERMEDIATE MUNICIPAL INCOME TOOK PLACE ON SEPTEMBER 10,
1992. CLASS T RETURNS PRIOR TO SEPTEMBER 10, 1992 ARE THOSE OF INSTITUTIONAL
CLASS WHICH HAS NO 12B-1 FEE. IF CLASS T'S 12B-1 FEE HAD BEEN REFLECTED, TOTAL
RETURNS PRIOR TO SEPTEMBER 10, 1992 WOULD HAVE BEEN LOWER.
INITIAL OFFERING OF CLASS B OF EQUITY GROWTH TOOK PLACE ON DECEMBER 31,
1996. CLASS B RETURNS PRIOR TO DECEMBER 31, 1996 THROUGH SEPTEMBER 10, 1992 ARE
THOSE OF CLASS T WHICH REFLECT A 12B-1 FEE OF 0.50% (0.65% PRIOR TO JANUARY 1,
1996). CLASS B RETURNS PRIOR TO SEPTEMBER 10, 1992 ARE THOSE OF INSTITUTIONAL
CLASS WHICH HAS NO 12B-1 FEE. IF CLASS B'S 12B-1 FEE HAD BEEN REFLECTED, TOTAL
RETURNS PRIOR TO DECEMBER 31, 1996 WOULD HAVE BEEN LOWER.
INITIAL OFFERING OF CLASS B OF BALANCED TOOK PLACE ON DECEMBER 31,
1996. CLASS B RETURNS PRIOR TO DECEMBER 31, 1996 ARE THOSE OF CLASS T WHICH
REFLECT A 12B-1 FEE OF 0.50% (0.65% PRIOR TO JANUARY 1, 1996). IF CLASS B'S
12B-1 FEE HAD BEEN REFLECTED, TOTAL RETURNS PRIOR TO DECEMBER 31, 1996 WOULD
HAVE BEEN LOWER.
INITIAL OFFERING OF CLASS B OF GROWTH OPPORTUNITIES TOOK PLACE ON MARCH
3, 1997. CLASS B RETURNS PRIOR TO MARCH 3, 1997 ARE THOSE OF CLASS T WHICH
REFLECT A 12B-1 FEE OF 0.50%(0.65% PRIOR TO JANUARY 1, 1996). IF CLASS B'S 12B-1
FEE HAD BEEN REFLECTED, TOTAL RETURNS PRIOR TO MARCH 3, 1997 WOULD HAVE BEEN
LOWER.
INITIAL OFFERING OF CLASS B OF EQUITY INCOME, INTERMEDIATE BOND, AND
INTERMEDIATE MUNICIPAL INCOME TOOK PLACE ON JUNE 30, 1994. CLASS B RETURNS PRIOR
TO JUNE 30, 1994 THROUGH SEPTEMBER 10, 1992 ARE THOSE OF CLASS T WHICH REFLECT
A12B-1 FEE OF 0.65% FOR EQUITY INCOME, AND 0.25% FOR INTERMEDIATE BOND AND
INTERMEDIATE MUNICIPAL INCOME. CLASS B RETURNS PRIOR TO SEPTEMBER 10, 1992 ARE
THOSE OF INSTITUTIONAL CLASS WHICH HAS NO 12B-1 FEE. IF CLASS B'S 12B-1 FEE HAD
BEEN REFLECTED, TOTAL RETURNS PRIOR TO JUNE 30, 1994 WOULD HAVE BEEN LOWER.
INITIAL OFFERING OF CLASS B OF STRATEGIC OPPORTUNITIES TOOK PLACE ON
JUNE 30, 1994. CLASS B RETURNS PRIOR TO JUNE 30, 1994 ARE THOSE OF CLASS T WHICH
REFLECT A 12B-1 FEE OF 0.65%. IF CLASS B'S 12B-1 FEE HAD BEEN REFLECTED, TOTAL
RETURNS PRIOR TO JUNE 30, 1994 WOULD HAVE BEEN LOWER.
INITIAL OFFERING OF CLASS B OF HIGH YIELD, GOVERNMENT INVESTMENT, AND
MUNICIPAL INCOME TOOK PLACE ON JUNE 30, 1994. CLASS B RETURNS PRIOR TO JUNE 30,
1994 ARE THOSE OF CLASS T WHICH REFLECT A 12B-1 FEE OF 0.25%. IF CLASS B'S 12B-1
FEE HAD BEEN REFLECTED, TOTAL RETURNS PRIOR TO JUNE 30, 1994 WOULD HAVE BEEN
LOWER.
INITIAL OFFERING OF CLASS C OF TECHNOQUANT GROWTH, MID CAP, LARGE CAP,
AND GROWTH & INCOME TOOK PLACE ON NOVEMBER 3, 1997. CLASS C RETURNS PRIOR TO
NOVEMBER 3, 1997 ARE THOSE OF CLASS B WHICH REFLECT A 12B-1 FEE OF 1.00%.
INITIAL OFFERING OF CLASS C OF STRATEGIC INCOME TOOK PLACE ON NOVEMBER
3, 1997. CLASS C RETURNS PRIOR TO NOVEMBER 3, 1997 ARE THOSE OF CLASS B WHICH
REFLECT A 12B-1 FEE OF 0.90%(1.00% PRIOR TO JANUARY 1, 1996). IF CLASS C'S 12B-1
FEE HAD BEEN REFLECTED, TOTAL RETURNS PRIOR TO NOVEMBER 3, 1997 THROUGH
JANUARY 1, 1996 WOULD HAVE BEEN LOWER.
INITIAL OFFERING OF CLASS C OF EQUITY GROWTH TOOK PLACE ON NOVEMBER
3,1997. CLASS C RETURNS PRIOR TO NOVEMBER 3, 1997 THROUGH DECEMBER 31, 1996 ARE
THOSE OF CLASS B WHICH REFLECT A 12B-1 FEE OF 1.00%. CLASS C RETURNS PRIOR TO
DECEMBER 31, 1996 THROUGH SEPTEMBER 10, 1992 ARE THOSE OF CLASS T WHICH REFLECT
A 12B-1 FEE OF 0.50% (0.65% PRIOR TO JANUARY 1, 1996). CLASS C RETURNS PRIOR TO
SEPTEMBER 10, 1992 ARE THOSE OF INSTITUTIONAL CLASS WHICH HAS NO 12B-1 FEE. IF
CLASS C'S 12B-1 FEE HAD BEEN REFLECTED, TOTAL RETURNS PRIOR TO DECEMBER 31, 1996
WOULD HAVE BEEN LOWER.
INITIAL OFFERING OF CLASS C OF GROWTH OPPORTUNITIES TOOK PLACE ON
NOVEMBER 3, 1997. CLASS C RETURNS PRIOR TO NOVEMBER 3, 1997 THROUGH MARCH 3,
1997 ARE THOSE OF CLASS B WHICH REFLECT A 12B-1 FEE OF 1.00%. CLASS C RETURNS
PRIOR TO MARCH 3, 1997 ARE THOSE OF CLASS T WHICH REFLECT A 12B-1 FEE OF 0.50%
(0.65% PRIOR TO JANUARY 1, 1996). IF CLASS C'S 12B-1 FEE HAD BEEN REFLECTED,
TOTAL RETURNS PRIOR TO MARCH 3, 1997 WOULD HAVE BEEN LOWER.
INITIAL OFFERING OF CLASS C OF BALANCED TOOK PLACE ON NOVEMBER 3, 1997.
CLASS C RETURNS PRIOR TO NOVEMBER 3, 1997 THROUGH DECEMBER 31, 1996 ARE THOSE OF
CLASS B WHICH REFLECT A 12B-1 FEE OF 1.00%. CLASS C RETURNS PRIOR TO DECEMBER
31, 1996 ARE THOSE OF CLASS T WHICH REFLECT A 12B-1 FEE OF 0.50% (0.65% PRIOR TO
JANUARY 1, 1996). IF CLASS C'S 12B-1 FEE HAD BEEN REFLECTED, TOTAL RETURNS PRIOR
TO DECEMBER 31, 1996 WOULD HAVE BEEN LOWER.
INITIAL OFFERING OF CLASS C OF HIGH YIELD, GOVERNMENT INVESTMENT, AND
MUNICIPAL INCOME TOOK PLACE ON NOVEMBER 3, 1997. CLASS C RETURNS PRIOR TO
NOVEMBER 3, 1997
<PAGE>
THROUGH JUNE 30, 1994 ARE THOSE OF CLASS B WHICH REFLECT A 12B-1 FEE OF 0.90%
(1.00% PRIOR TO JANUARY 1, 1996). CLASS C RETURNS PRIOR TO JUNE 30, 1994 ARE
THOSE OF CLASS T WHICH REFLECT A 12B-1 FEE OF 0.25%. IF CLASS C'S 12B-1 FEE HAD
BEEN REFLECTED, TOTAL RETURNS PRIOR TO NOVEMBER 3, 1997 THROUGH JANUARY 1, 1996
AND PRIOR TO JUNE 30, 1994 WOULD HAVE BEEN LOWER.
INITIAL OFFERING OF CLASS C OF SHORT FIXED-INCOME TOOK PLACE ON
NOVEMBER 3, 1997. CLASS C RETURNS PRIOR TO NOVEMBER 3, 1997 ARE THOSE OF CLASS T
WHICH REFLECT A 12B-1 FEE OF 0.15%. IF CLASS C'S 12B-1 FEE HAD BEEN REFLECTED,
TOTAL RETURNS WOULD HAVE BEEN LOWER.
INITIAL OFFERING OF CLASS C OF EQUITY INCOME, INTERMEDIATE BOND, AND
INTERMEDIATE MUNICIPAL INCOME TOOK PLACE ON NOVEMBER 3, 1997. CLASS C RETURNS
PRIOR TO NOVEMBER 3, 1997 THROUGH JUNE 30, 1994 ARE THOSE OF CLASS B WHICH
REFLECT A 12B-1 FEE OF 1.00% FOR EQUITY INCOME AND 0.90% (1.00% PRIOR TO JANUARY
1, 1996) FOR INTERMEDIATE BOND AND INTERMEDIATE MUNICIPAL INCOME. CLASS C
RETURNS PRIOR TO JUNE 30, 1994 THROUGH SEPTEMBER 10, 1992 ARE THOSE OF CLASS T
WHICH REFLECT A 12B-1 FEE OF 0.65% FOR EQUITY INCOME AND 0.25% FOR INTERMEDIATE
BOND AND INTERMEDIATE MUNICIPAL INCOME. CLASS C RETURNS PRIOR TO SEPTEMBER 10,
1992 ARE THOSE OF INSTITUTIONAL CLASS WHICH HAS NO 12B-1 FEE. IF CLASS C'S 12B-1
FEE HAD BEEN REFLECTED, TOTAL RETURNS FOR EQUITY INCOME PRIOR TO JUNE 30, 1994
WOULD HAVE BEEN LOWER. IF CLASS C'S 12B-1 FEE HAD BEEN REFLECTED, TOTAL RETURNS
FOR INTERMEDIATE BOND AND INTERMEDIATE MUNICIPAL INCOME PRIOR TO NOVEMBER 3,
1997 THROUGH JANUARY 1, 1996 AND PRIOR TO JUNE 30, 1994 WOULD HAVE BEEN LOWER.
The exclusion of any applicable sales charge from a performance calculation
produces a higher return.
If FMR had not reimbursed certain class expenses during these periods, total
returns would have been lower.
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment over a given period,
assuming reinvestment of any dividends and capital gains. A CUMULATIVE TOTAL
RETURN reflects actual performance over a stated period of time. An AVERAGE
ANNUAL TOTAL RETURN is a hypothetical rate of return that, if achieved annually,
would have produced the same cumulative total return if performance had been
constant over the entire period. Average annual total returns smooth out
variations in performance; they are not the same as actual year-by-year results.
Average annual total returns covering periods of less than one year assume that
performance will remain constant for the rest of the year.
Average annual and cumulative total returns usually will include the effect of
paying the maximum applicable sales charge.
YIELD refers to the income generated by an investment in a fund over a given
period of time, expressed as an annual percentage rate. Yields are calculated
according to a standard that is required for all stock and bond funds. Because
this differs from other accounting methods, the quoted yield may not equal the
income actually paid to shareholders.
This difference may be significant for funds whose investments are denominated
in foreign currencies.
In calculating yield, a 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 on that
security. This practice will have the effect of reducing a fund's yield.
A TAX-EQUIVALENT YIELD shows what an investor would have to earn before taxes to
equal a tax-free yield.
THE COMPETITIVE FUNDS AVERAGE is each fund's applicable Lipper Funds Average,
which reflects the performance of mutual funds with similar objectives. These
averages, published by Lipper Analytical Services, Inc., exclude the effect of
sales loads.
STANDARD & POOR'S 500 INDEX (S&P 500(registered trademark)) is a widely
recognized, unmanaged index of common stocks.
STANDARD & POOR'S MIDCAP 400 INDEX is a widely recognized, unmanaged index of
400 medium-capitalization stocks.
MERRILL LYNCH HIGH YIELD MASTER INDEX is a market capitalization weighted index
of all domestic and yankee high-yield bonds. Issues included in the index have
maturities of at least one year and have a credit rating lower than BBB-/Baa3,
but are not in default.
LEHMAN BROTHERS 1-3 YEAR GOVERNMENT/CORPORATE BOND INDEX is a market value
weighted performance benchmark for government and corporate fixed-rate debt
issues with maturities between one and three years.
LEHMAN BROTHERS MORTGAGE-BACKED SECURITIES INDEX is a market capitalization
weighted benchmark of 15- and 30-year fixed-rate securities backed by mortgage
pools of the Government National Mortgage Association (GNMA), Fannie Mae and
Federal Home Loan Mortgage Corporation (FHLMC), and balloon mortgages with
fixed-rate coupons.
LEHMAN BROTHERS GOVERNMENT BOND INDEX is a market value weighted index
of U.S. Government and government agency securities (other than mortgage
securities) with maturities of one year or more.
LEHMAN BROTHERS INTERMEDIATE GOVERNMENT/CORPORATE BOND INDEX is a market value
weighted performance benchmark for government and corporate fixed-rate debt
issues with maturities between one and 10 years.
LEHMAN BROTHERS MUNICIPAL BOND INDEX is a total return performance benchmark
for investment grade municipal bonds with maturities of at least one year.
Unlike each class's returns, the total returns of each comparative index do not
include the effect of any brokerage commissions, transaction fees, or other
costs of investing.
THE CONSUMER PRICE INDEX is a widely recognized measure of inflation calculated
by the U.S. Government.
Other illustrations of equity fund performance may show moving averages over
specified periods.
The funds' recent strategies, performance, and holdings are detailed twice a
year in financial reports, which are sent to all shareholders. For current
performance or a free annual report, please contact your investment professional
or, if you are investing through a broker-dealer or insurance representative,
call 1-800-522-7297 or, if you are investing through a bank representative, call
1-800-843-3001.
TOTAL RETURNS AND YIELDS ARE BASED ON PAST RESULTS AND ARE NOT AN INDICATION OF
FUTURE PERFORMANCE.
<PAGE>
CHARTER
EACH FUND IS A MUTUAL FUND: an investment that pools shareholders' money and
invests it toward a specified goal. TechnoQuant Growth, Mid Cap, Equity Growth,
Growth Opportunities, Strategic Opportunities, Large Cap, and Growth & Income
are diversified funds of Fidelity Advisor Series I, a Massachusetts business
trust organized on June 24, 1983. Balanced, High Yield, Government Investment,
and Short Fixed-Income are diversified funds and Strategic Income is a
non-diversified fund of Fidelity Advisor Series II, a Massachusetts business
trust organized on April 23, 1986. Equity Income is a diversified fund of
Fidelity Advisor Series III, a Massachusetts business trust organized on May 17,
1982. Intermediate Bond is a diversified fund of Fidelity Advisor Series IV, a
Massachusetts business trust organized on May 6, 1983. Municipal Income is a
diversified fund of Fidelity Advisor Series V, a Massachusetts business trust
organized on April 23, 1986. Intermediate Municipal Income is a diversified fund
and Short-Intermediate Municipal Income is a non-diversified fund of Fidelity
Advisor Series VI, a Massachusetts business trust organized on June 1, 1983.
Mortgage Securities is a diversified fund of Fidelity Income Fund, a
Massachusetts business trust organized on August 7, 1984. Each trust is an
open-end management investment company. There is a remote possibility that one
fund might become liable for a misstatement in the prospectus about another
fund.
EACH FUND IS GOVERNED BY A BOARD OF TRUSTEES which is responsible for protecting
the interests of shareholders. The trustees are experienced executives who meet
periodically throughout the year to oversee the funds' activities, review
contractual arrangements with companies that provide services to the funds, and
review the funds' performance. The trustees serve as trustees for other Fidelity
funds. The majority of trustees are not otherwise affiliated with Fidelity.
THE FUNDS MAY HOLD SPECIAL SHAREHOLDER MEETINGS AND MAIL PROXY MATERIALS. These
meetings may be called to elect or remove trustees, change fundamental policies,
approve a management contract, or for other purposes. Shareholders not attending
these meetings are encouraged to vote by proxy. The transfer agent will mail
proxy materials in advance, including a voting card and information about the
proposals to be voted on. The number of votes you are entitled to is based upon
the dollar value of your investment.
Separate votes are taken by each class of shares, fund, or trust, if a matter
affects just that class of shares, fund, or trust, respectively.
FMR AND ITS AFFILIATES
Fidelity Investments is one of the largest investment management organizations
in the United States and has its principal business address at 82 Devonshire
Street, Boston, Massachusetts 02109. It includes a number of different
subsidiaries and divisions which provide a variety of financial services and
products. The funds employ various Fidelity companies to perform activities
required for their operation.
The funds are managed by FMR, which chooses each fund's investments and handles
its business affairs. FMR chooses investments with the assistance of foreign
affiliates for all funds except Government Investment, Municipal Income,
Intermediate Municipal Income, and Short-Intermediate Municipal Income.
Beginning January 1, 1999, Fidelity Investments Money Management, Inc.
(FIMM), located in Merrimack, New Hampshire, will select certain types of
investments for Balanced and Strategic Income. Beginning January 1, 1999, FIMM
will have primary responsibility for providing investment management services
for Mortgage Securities, Government Investment, Intermediate Bond, Short
Fixed-Income, Municipal Income, Intermediate Municipal Income, and
Short-Intermediate Municipal Income.
(small solid bullet) Fidelity Management & Research (U.K.) Inc. (FMR U.K.), in
London, England, serves as a sub-adviser for TechnoQuant Growth, Mid Cap, Equity
Growth, Growth Opportunities, Strategic Opportunities, Large Cap, Growth &
Income, Equity Income, Balanced, High Yield, Strategic Income, Mortgage
Securities, Intermediate Bond, and Short Fixed-Income.
(small solid bullet) Fidelity Management & Research Far East Inc. (FMR Far
East), in Tokyo, Japan, serves as a sub-adviser for TechnoQuant Growth, Mid Cap,
Equity Growth, Growth Opportunities, Strategic Opportunities, Large Cap, Growth
& Income, Equity Income, Balanced, High Yield, Strategic Income, Mortgage
Securities, Intermediate Bond, and Short Fixed-Income.
(small solid bullet) Fidelity International Investment Advisors (FIIA), in
Pembroke, Bermuda, serves as a sub-adviser for Strategic Income.
(small solid bullet) Fidelity International Investment Advisors (U.K.) Limited
(FIIA(U.K.)L), in London, England, serves as a sub-adviser for Strategic Income.
(small solid bullet) Fidelity Investment Japan Limited (FIJ), in Tokyo,
Japan , serves as a sub-adviser for Strategic Income.
As of December 31, 1997, FMR advised funds having approximately 34
million shareholder accounts with a total value of more than $ 529
billion.
John Avery is lead manager of Advisor Balanced, which he has managed since
January 1998. He has been a co-manager of the fund since September 1997 .
He also manages another Fidelity fund. Mr. Avery joined Fidelity as an analyst
in 1995. Previously, he was an analyst for Putnam Investments from 1993 to 1994.
Mr. Avery received his MBA from The Wharton School at the University of
Pennsylvania in 1993.
John Carlson is Vice President and lead manager of Advisor Strategic Income,
which he has managed since August 1995. He also manages several other Fidelity
funds. Prior to joining Fidelity in 1995, Mr. Carlson was Executive Director of
emerging markets at Lehman Brothers International from 1992 through 1995.
Robert Chow is manager of Advisor Equity Income, which he has managed since
March 1996. Previously, he managed other Fidelity funds. Since joining Fidelity
in 1989, Mr. Chow has worked as an analyst, portfolio assistant, and manager.
<PAGE>
Katherine Collins is manager of Advisor Mid Cap, which she has managed since
January 1997. She also manages another Fidelity fund. Since joining Fidelity in
1990, Ms. Collins has worked as an analyst and manager.
Andrew Dudley is manager of Advisor Short Fixed-Income, which he has managed
since February 1997. He also manages other Fidelity funds. Prior to
joining Fidelity as a manager in 1996, Mr. Dudley was a portfolio manager with
Putnam Investments from 1991 to 1996.
Margaret Eagle is Vice President and manager of Advisor High Yield and Advisor
Strategic Income, which she has managed since January 1987 and January 1996,
respectively. Ms. Eagle manages the high yield investments for Advisor Strategic
Income. In addition, she is a Senior Vice President of Fidelity Trust Company.
Ms. Eagle joined Fidelity in 1980.
Karen Firestone will be manager of Advisor Large Cap effective April 1, 1998.
She will also manage another Fidelity fund. Since joining Fidelity in 1983, Ms.
Firestone has worked as an analyst and manager.
Kevin Grant is Vice President and manager of Advisor Intermediate Bond and
Advisor Balanced, which he has managed since October 1995 and March 1996,
respectively. Mr. Grant manages the fixed-income investments for Advisor
Balanced. He also manages several other Fidelity funds. Prior to joining
Fidelity in 1993, Mr. Grant was a vice president and chief mortgage strategist
at Morgan Stanley for three years.
Brian Hogan is manager of Advisor Strategic Income's emerging market securities,
which he has managed since September 1997. Since joining Fidelity in 1994, Mr.
Hogan has worked as a fixed-income analyst, research analyst, and manager.
Previously, he worked as an analyst for Conseco Capital Management from 1993 to
1994 and Aegon USA Investment Management from 1990 to 1993.
Curt Hollingsworth is Vice President and manager of Advisor Government
Investment and Advisor Strategic Income, both of which he has managed since
February 1997. Mr. Hollingsworth manages the domestic investment-grade and U.S.
Government investments for Advisor Strategic Income. He also manages several
other Fidelity funds. Since joining Fidelity in 1983, Mr. Hollingsworth has
worked as a fixed-income trader and portfolio manager.
Jonathan Kelly is manager of Advisor Strategic Income's foreign bond investments
in developed markets, which he has managed since January 1996. Previously, he
managed other Fidelity funds. Since joining Fidelity in 1991, Mr. Kelly has
worked as a foreign bond analyst and manager.
Tim Krochuk is manager of Advisor TechnoQuant Growth, which he has managed since
inception. He also manages another Fidelity fund. Since joining Fidelity as a
research associate in 1992, Mr. Krochuk has worked as a quantitative analyst and
manager.
Harris Leviton is Vice President and manager of Advisor Strategic Opportunities,
which he has managed since March 1996. Previously, he managed other Fidelity
funds. Since joining Fidelity in 1986, he has worked as an analyst and manager.
Norm Lind is Vice President and manager of Advisor Short-Intermediate Municipal
Income and Advisor Intermediate Municipal Income , which he has managed
since October 1995 and January 1998, respectively . He also manages
several other Fidelity funds. Since joining Fidelity in 1986, Mr. Lind has
worked as an analyst and manager.
Charles Mangum will provide assistance in managing Advisor Growth
Opportunities from time to time. He also manages another Fidelity fund. Since
joining Fidelity in 1990, Mr. Mangum has worked as an analyst and manager.
Jonathan Short is Vice President and manager of Advisor Municipal Income,
which he has managed since January 1998. He also manages several other Fidelity
funds. Since joining Fidelity in 1990, Mr. Short has worked as an analyst and
manager.
Thomas Silvia is manager of Advisor Mortgage Securities. He has been a
co-manager of the fund since February 1997. Mr. Silvia joined Fidelity as a
senior mortgage trader in 1993. Previously, he was a quantitative analyst with
Donaldson, Lufkin & Jenrette in New York from 1990 to 1993.
Thomas Sprague is Vice President and manager of Advisor Large Cap, which he has
managed since March 1996 and will manage until March 31, 1998 . He also
manages another Fidelity fund. Since joining Fidelity in 1989, he has worked as
an analyst and manager.
Beth Terrana is Vice President and manager of Advisor Growth & Income, which she
has managed since inception. She also manages other Fidelity funds. Since
joining Fidelity in 1983, Ms. Terrana has worked as an analyst, portfolio
assistant, and manager.
Jennifer Uhrig is Vice President and manager of Advisor Equity Growth, which she
has managed since January 1997. She also manages another Fidelity fund. Since
joining Fidelity in 1987, Ms. Uhrig has worked as an analyst and manager.
George Vanderheiden is Vice President and manager of Advisor Growth
Opportunities, which he has managed since November 1987. He also manages
other Fidelity funds. Mr. Vanderheiden joined Fidelity in 1971.
Fidelity investment personnel may invest in securities for their own accounts
pursuant to a code of ethics that establishes procedures for personal investing
and restricts certain transactions.
FDC distributes and markets Fidelity's funds and services.
Fidelity Investments Institutional Operations Company, Inc. (FIIOC) performs
transfer agent servicing functions for each class of the Equity Funds, High
Yield, Strategic Income, Mortgage Securities, Government Investment,
Intermediate Bond, and Short Fixed-Income. UMB Bank, n.a. (UMB) is the transfer
agent for Municipal Income, Intermediate Municipal Income, and
Short-Intermediate Municipal Income, although it employs FIIOC to perform these
functions for each class of each fund. UMB is located at 1010 Grand Avenue,
Kansas City, Missouri.
FMR Corp. is the ultimate parent company of FMR, FIMM, FMR U.K., and FMR
Far East. Members of the Edward C. Johnson 3d family are the predominant owners
of a class of shares of common stock representing approximately 49% of the
voting power of FMR
<PAGE>
Corp. Under the Investment Company Act of 1940 (the 1940 Act), control of a
company is presumed where one individual or group of individuals owns more than
25% of the voting stock of that company; therefore, the Johnson family may be
deemed under the 1940 Act to form a controlling group with respect to FMR Corp.
Fidelity International Limited (FIL), is the parent company of FIIA, FIJ, and
FIIA(U.K.)L. The Johnson family group also owns, directly or indirectly, more
than 25% of the voting common stock of FIL.
FMR may use its broker-dealer affiliates and other firms that sell fund shares
to carry out a fund's transactions, provided that the fund receives brokerage
services and commission rates comparable to those of other broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
The value of each fund's investments varies in response to many factors. Stock
values fluctuate in response to the activities of individual companies and
general market and economic conditions.
The yield and share price of a bond fund change daily based on changes in
interest rates and market conditions, and in response to other economic,
political or financial events. The types and maturities of the securities a bond
fund purchases and the credit quality of their issuers will impact a bond fund's
reaction to these events.
The total return from a bond includes both income and price gains or losses.
While income is the most important component of bond returns over time, a bond
fund's emphasis on income does not mean the fund invests only in the
highest-yielding bonds available, or that it can avoid losses of principal.
In general, bond prices rise when interest rates fall and fall when interest
rates rise. Longer-term bonds are usually more sensitive to interest rate
changes. In other words, the longer the maturity of a bond, the greater the
impact a change in interest rates is likely to have on the bond's price. In
addition, short-term interest rates and long-term interest rates do not
necessarily move in the same amount or in the same direction. A short-term bond
tends to react to changes in short-term interest rates and a long-term bond
tends to react to changes in long-term interest rates.
The price of a bond is affected by the credit quality of its issuer. Changes in
the financial condition of an issuer, changes in general economic conditions,
and changes in specific economic conditions that affect a particular type of
issuer can impact the credit quality of an issuer. Lower quality bonds generally
tend to be more sensitive to these changes than higher quality bonds.
Many types of debt securities, including mortgage securities, are subject to
prepayment risk. Prepayment risk occurs when the issuer of a security can prepay
principal prior to the security's maturity. Securities subject to prepayment
risk generally offer less potential for gains during a declining interest rate
environment, and similar or greater potential for loss in a rising interest rate
environment. In addition, the potential impact of prepayment features on the
price of a debt security may be difficult to predict and result in greater
volatility.
Municipal securities are backed by the entity that issued them and/or other
revenue streams. Municipal security values may be significantly affected by
political changes as well as uncertainties in the municipal market related to
taxation or the rights of municipal securities holders.
Funds which invest in foreign securities have increased economic and political
risks as they are exposed to events and factors in the various world markets.
This is especially true for funds that invest in emerging markets. Also, because
certain of the funds' investments are denominated in foreign currencies, changes
in the value of foreign currencies can significantly affect a fund's share
price. FMR may use a variety of investment techniques to either increase or
decrease a fund's investment exposure to any currency.
FMR may use various investment techniques to hedge a portion of the funds'
risks, but there is no guarantee that these strategies will work as FMR intends.
When you sell your shares, they may be worth more or less than what you paid for
them.
TECHNOQUANT GROWTH FUND seeks growth of capital by investing mainly in common
stocks. However, the fund has the flexibility to invest in other types of equity
securities and debt securities as well. The fund's security selection process
utilizes computer-aided, quantitative analysis. FMR's computer models use many
types of data, but emphasize technical factors such as historical price and
volume relationships. Fundamental criteria, such as earnings estimates, and
dividend yield may also be considered.
FMR's emphasis on technical analysis can result in the fund holding different
types of stocks at different times. For example, the fund may hold stocks of
companies with large or small market capitalization or high or low
price/earnings ratios. The fund's focus may change rapidly based on FMR's
analysis of the most current information. At times, the fund may be concentrated
in a small number of market sectors or securities.
MID CAP FUND seeks long-term growth of capital by investing primarily in equity
securities of companies with medium market capitalizations. FMR normally invests
at least 65% of the fund's total assets in these securities. The fund has the
flexibility, however, to invest the balance in other market capitalizations and
security types.
Medium market capitalization companies are those whose market capitalization
falls within the capitalization range of the S&P MidCap 400 at the time of the
fund's investment. The S&P MidCap 400 Index is an unmanaged index of
medium-capitalization stocks. Companies whose capitalization falls outside this
range after purchase continue to be considered medium-capitalized for purposes
of the 65% policy. As of December 31, 1997, the S&P MidCap 400 included
companies with capitalizations of between $ 213 million and $ 13.7
billion. The capitalization range of the S&P MidCap 400 changes with market
conditions and the composition of the Index.
Investing in medium capitalization stocks may involve greater risk than
investing in large capitalization stocks, since they can be subject to more
abrupt or erratic movements. However, they tend to involve less risk than stocks
of small capitalization companies.
EQUITY GROWTH FUND seeks capital appreciation by investing primarily in common
and preferred stock and securities convertible into the common stock of
companies with above-average growth characteristics. FMR normally invests at
least 65% of the fund's total assets in common and preferred stock. The fund
looks for domestic and foreign companies with above-average growth
characteristics
<PAGE>
compared to the average of the companies included in the S&P 500. The S&P 500 is
a registered trademark of Standard & Poor's.
Growth may be measured by factors such as earnings or gross sales. Companies
with strong growth potential often have new products, technologies, distribution
channels, or other opportunities. As a general rule, these companies may include
smaller, less well-known companies, and companies whose stocks have higher than
average price/earnings (P/E) ratios. The market prices of these stocks may be
particularly sensitive to economic, market, or company news. FMR may also pursue
growth in larger or revitalized companies or companies that hold a strong
position in the market. These growth characteristics may be found in mature or
declining industries.
GROWTH OPPORTUNITIES FUND seeks capital growth by investing primarily in common
stocks and securities convertible into common stocks. FMR normally invests at
least 65% of the fund's total assets in securities of companies that FMR
believes have long-term growth potential. Although the fund invests primarily in
common stock and securities convertible into common stock, it has the ability to
purchase other securities, such as preferred stock and bonds, that may produce
capital growth. The fund may invest in foreign securities without limitation.
STRATEGIC OPPORTUNITIES FUND seeks capital appreciation by investing primarily
in securities of companies believed by FMR to involve a "special situation." FMR
normally invests at least 65% of the fund's total assets in these securities.
The term "special situation" refers to FMR's identification of an unusual, and
possibly non-repetitive, development taking place in a company or a group of
companies in an industry.
A special situation may involve one or more of the following characteristics:
(small solid bullet) A technological advance or discovery, the offering of a new
or unique product or service, or changes in consumer demand or consumption
forecasts.
(small solid bullet) Changes in the competitive outlook or growth potential of
an industry or a company within an industry, including changes in the scope or
nature of foreign competition or the development of an emerging industry.
(small solid bullet) New or changed management, or material changes in
management policies or corporate structure.
(small solid bullet) Significant economic or political occurrences abroad,
including changes in foreign or domestic import and tax laws or other
regulations.
(small solid bullet) Other events, including natural disasters, favorable
litigation settlements, or a major change in demographic patterns.
"Special situations" often involve breaks with past experience. They can be
relatively aggressive investments. In seeking capital appreciation, the fund
also may invest in securities of companies not involving a special situation,
but which are companies with valuable fixed assets and whose securities are
believed by FMR to be undervalued in relation to the companies' assets,
earnings, or growth potential. FMR intends to invest primarily in common stocks
and securities that are convertible into common stocks; however, it also may
invest in debt securities of all types and quality if FMR believes that
investing in these securities will result in capital appreciation. The fund may
invest up to 30% of its assets in foreign investments.
LARGE CAP FUND seeks long-term growth of capital by investing primarily in
equity securities of companies with large market capitalizations. FMR normally
invests at least 65% of the fund's total assets in these securities. The fund
has the flexibility, however, to invest the balance in other market
capitalizations and security types.
FMR defines large market capitalization companies as those with market
capitalizations of $1 billion or more at the time of the fund's investment.
Companies whose capitalization falls below this level after purchase continue to
be considered large-capitalized for purposes of the 65% policy.
Companies with large market capitalizations typically have a large number of
publicly held shares and a high trading volume, resulting in a high degree of
liquidity. These tend to be quality companies with strong management
organizations. However, large capitalization companies may have less growth
potential than smaller companies and may be able to react less quickly to
changes in the marketplace.
GROWTH & INCOME FUND seeks high total return through a combination of current
income and capital appreciation. The fund invests mainly in equity securities.
The fund expects to invest the majority of its assets in domestic and foreign
equity securities, with a focus on those that pay current dividends and show
potential earnings growth. However, the fund may buy debt securities as well as
equity securities that are not currently paying dividends, but offer prospects
for capital appreciation or future income.
EQUITY INCOME FUND seeks a yield which exceeds the composite dividend yield of
securities comprising the S&P 500. In addition, consistent with the primary
objective of obtaining income, the fund will consider the potential for
achieving capital appreciation. FMR normally invests at least 65% of the fund's
total assets in income-producing equity securities. For purposes of this policy,
equity securities are defined as common and preferred stocks. The balance of the
fund's assets will tend to be invested in debt securities, a high percentage of
which are expected to be convertible into common stocks.
The fund seeks to achieve a yield that beats that of the S&P 500. The fund does
not intend to invest in securities of issuers without proven earnings and/or
credit histories. Because the fund invests for income, as well as capital
appreciation, investors should not expect capital appreciation comparable with
funds which seek only capital appreciation. The yield on the fund's assets
generally will increase or decrease from year to year in accordance with market
conditions and in relation to the changes in yields of the stocks included in
the S&P 500.
BALANCED FUND seeks both income and growth of capital by investing in a
diversified portfolio of equity and fixed-income securities with income, growth
of income, and capital appreciation potential. FMR manages the fund to maintain
a balance between
<PAGE>
stocks and bonds. When FMR's outlook is neutral, it will invest approximately
60% of the fund's assets in stocks and other equity securities and the remainder
in bonds and other fixed-income securities. FMR may vary from this target if it
believes stocks or bonds offer more favorable opportunities, but will always
invest at least 25% of the fund's total assets in fixed-income senior securities
(including debt securities and preferred stock).
The fund may buy securities that are not currently paying income but offer
prospects for future income. The fund may invest in securities of foreign
issuers. In selecting investments for the fund, FMR will consider such factors
as the issuer's financial strength, its outlook for increased dividend or
interest payments, and the potential for capital gains.
HIGH YIELD FUND seeks a combination of a high level of income and the potential
for capital gains by investing in a diversified portfolio consisting primarily
of high-yielding, fixed-income and zero coupon securities, such as bonds,
debentures and notes, convertible securities and preferred stocks. FMR normally
invests at least 65% of the fund's total assets in these securities.
The fund may also invest in securities issued or guaranteed by the U.S.
Government, any state or any of their respective subdivisions, agencies or
instrumentalities, and securities of foreign issuers, including securities of
foreign governments. The fund may invest up to 35% of its total assets in equity
securities, including common stocks, warrants, and rights.
STRATEGIC INCOME FUND seeks a high level of current income by investing
primarily in debt securities. The fund may also seek capital appreciation. The
fund invests primarily in fixed-income securities, allocated among four general
investment categories: high yield securities, U.S. Government and
investment-grade securities, emerging market securities, and foreign developed
market securities. The fund's neutral mix, or the benchmark for its combination
of investments in each category over time, is approximately 40% high yield, 30%
U.S. Government and investment-grade, 15% emerging markets and 15% foreign
developed markets.
FMR regularly reviews the fund's allocation and makes changes gradually over
time to favor investments that it believes provide the most favorable outlook
for achieving the fund's objective. In normal market environments, FMR expects
the fund's asset allocation to approximate the neutral mix within a range of
plus or minus 10% of assets per category. There are no absolute limits on the
percent of assets invested in each category, however, and FMR reserves the right
to change the neutral mix from time to time.
The HIGH YIELD category includes high-yielding, lower-quality debt securities
consisting mainly of U.S. securities of a quality grade lower than BBB. The U.S.
GOVERNMENT AND INVESTMENT-GRADE category includes mortgage securities, U.S.
Government securities, government agency securities and other U.S.
dollar-denominated securities of investment-grade quality. The EMERGING MARKET
category includes corporate and governmental debt securities of issuers located
in emerging markets. The FOREIGN DEVELOPED MARKET category includes corporate
and governmental debt securities of issuers located in developed foreign
markets. These investment categories are only general guidelines, and FMR may
use its judgment as to which category an investment falls within. The fund may
also make investments that do not fall within these categories.
By allocating its investments across different types of fixed-income securities,
the fund attempts to moderate the significant risks of each investment category
through diversification. Diversification, when successful, can mean higher
returns with decreased volatility. However, each of the fund's four investment
categories may experience periods of volatile returns, and it is possible for
all investment categories to decline at the same time.
MORTGAGE SECURITIES FUND seeks high current income, consistent with prudent
investment risk, by investing primarily in mortgage-related securities. When
consistent with its goal, the fund may also consider the potential for capital
gain. FMR normally invests at least 65% of the fund's total assets in
mortgage-related securities. The fund may also invest in U.S. Government
securities and instruments related to U.S. Government securities. Instruments
related to U.S. Government securities may include futures or options on U.S.
Government securities or interests in U.S. Government securities that have been
repackaged by dealers or other third parties.
In managing the fund, FMR selects a benchmark index which is representative of
the universe of securities in which the fund invests. FMR uses this benchmark as
a guide in structuring the fund and selecting its investments. The benchmark
index for the fund is the Lehman Brothers Mortgage-Backed Securities Index, a
market capitalization weighted benchmark of 15- and 30- year fixed-rate
securities backed by mortgage pools of the Government National Mortgage
Association (GNMA), Fannie Mae and Federal Home Loan Mortgage Corporation
(FHLMC), and balloon mortgages with fixed-rate coupons. FMR manages the fund to
have similar overall interest rate risk to the Index. As of October 31, 1997,
the dollar-weighted average maturity of the fund and the Index was approximately
5.8 and 6.01 years, respectively.
FMR allocates assets among different market sectors (for example, fixed-rate or
adjustable rate mortgages) and different maturities based on its view of the
relative value of each sector or maturity.
FMR focuses on assembling a portfolio of income-producing bonds that it believes
will provide the best balance between risk and return within the universe of
securities in which the fund invests. FMR's evaluation of a potential investment
includes an analysis of the credit quality of the issuer, its structural
features, its current price compared to FMR's estimate of its long-term value,
and any short-term trading opportunities resulting from market inefficiencies.
In determining a security's maturity for purposes of calculating the fund's
average maturity, an estimate of the average time for its principal to be paid
may be used. This could be substantially shorter than its stated final maturity.
<PAGE>
GOVERNMENT INVESTMENT FUND seeks high current income by investing in U.S.
Government securities and instruments related to U.S. Government securities
under normal conditions. FMR normally invests the fund's assets only in U.S.
Government securities, repurchase agreements, and other instruments related to
U.S. Government securities. Under normal conditions, FMR invests at least 65% of
the fund's total assets in U.S. Government securities and repurchase agreements
for U.S. Government securities. Other instruments may include futures or options
on U.S. Government securities or interests in U.S. Government securities that
have been repackaged by dealers or other third parties. It is important to note
that neither the fund nor its yield is guaranteed by the U.S. Government.
In managing the fund, FMR selects a benchmark index which is representative of
the universe of securities in which the fund invest s . FMR uses this
benchmark as a guide in structuring the fund and selecting its investments. The
benchmark index for the fund is the Lehman Brothers Government Bond Index, a
market value weighted benchmark of U.S. Government and government
agency securities (other than mortgage securities) with maturities of one
year or more. FMR manages the fund to have similar overall interest rate
risk to the Index. As of October 31, 1997, the dollar-weighted average maturity
of the fund and the Index was approximately 8.2 and 8.67 years,
respectively.
FMR allocates assets among different market sectors (for example, U.S. Treasury
or U.S. Government agency securities) and different maturities based on its view
of the relative value of each sector or maturity.
FMR focuses on assembling a portfolio of income-producing bonds that it believes
will provide the best balance between risk and return within the universe of
securities in which the fund invests. FMR's evaluation of a potential investment
includes an analysis of the credit quality of the issuer, its structural
features, its current price compared to FMR's estimate of its long-term value,
and any short-term trading opportunities resulting from market inefficiencies.
In determining a security's maturity for purposes of calculating the fund's
average maturity, an estimate of the average time for its principal to be paid
may be used. This could be substantially shorter than its stated final maturity.
INTERMEDIATE BOND FUND seeks high current income by investing in U.S.
dollar-denominated investment-grade debt securities under normal conditions.
When consistent with its primary objective, the fund may also seek capital
appreciation.
In managing the fund, FMR selects a benchmark index which is representative of
the universe of securities in which the fund invests. FMR uses this benchmark as
a guide in structuring the fund and selecting its investments. The benchmark
index for the fund is the Lehman Brothers Intermediate Government/Corporate Bond
Index, a market value weighted benchmark for government and corporate fixed-rate
debt issues with maturities between one and 10 years. FMR manages the fund to
have similar overall interest rate risk to the Index. As of November 30, 1997,
the dollar-weighted average maturity of the fund and the Index was approximately
5.9 and 4.30 years, respectively. In addition, the fund normally
maintains a dollar-weighted average maturity between three and 10 years.
FMR allocates assets among different market sectors (for example, corporate or
government securities) and different maturities based on its view of the
relative value of each sector or maturity.
FMR focuses on assembling a portfolio of income-producing bonds that it believes
will provide the best balance between risk and return within the universe of
securities in which the fund invests. FMR's evaluation of a potential investment
includes an analysis of the credit quality of the issuer, its structural
features, its current price compared to FMR's estimate of its long-term value,
and any short-term trading opportunities resulting from market inefficiencies.
In determining a security's maturity for purposes of calculating the fund's
average maturity, an estimate of the average time for its principal to be paid
may be used. This can be substantially shorter than its stated final maturity.
SHORT FIXED-INCOME FUND seeks high current income, consistent with the
preservation of capital, by investing in U.S. dollar-denominated
investment-grade debt securities under normal conditions. Where appropriate the
fund will take advantage of opportunities to realize capital appreciation. FMR
normally invests at least 65% of the fund's total assets in fixed-income
securities of all types which may include convertible and zero coupon
securities.
In managing the fund, FMR selects a benchmark index which is representative of
the universe of securities in which the fund invests. FMR uses this benchmark as
a guide in structuring the fund and selecting its investments. The benchmark
index for the fund is the Lehman Brothers 1-3 Year Government/Corporate Bond
Index, a market value weighted benchmark for government and corporate fixed-rate
debt issues with maturities between one and three years. FMR manages the fund to
have similar overall interest rate risk to the Index. As of October 31, 1997,
the dollar-weighted average maturity of the fund and the Index was approximately
2.2 and 2.09 years, respectively. In addition, the fund normally
maintains a dollar-weighted average maturity of three years or less.
FMR allocates assets among different market sectors (for example, corporate or
government securities) and different maturities based on its view of the
relative value of each sector or maturity.
FMR focuses on assembling a portfolio of income-producing bonds that it believes
will provide the best balance between risk and return within the universe of
securities in which the fund invests. FMR's evaluation of a potential investment
includes an analysis of the credit quality of the issuer, its structural
features, its current price compared to FMR's estimate of its long-term value,
and any short-term trading opportunities resulting from market inefficiencies.
In determining a security's maturity for purposes of calculating the fund's
average maturity, an estimate of the average time for its principal to be paid
may be used. This can be substantially shorter than its stated final maturity.
<PAGE>
MUNICIPAL INCOME FUND seeks high current income that is free from federal income
tax by investing primarily in investment-grade municipal securities. FMR
normally invests at least 80% of the fund's assets in municipal securities whose
interest is free from federal income tax.
In managing the fund, FMR selects a benchmark index which is representative of
the universe of securities in which the fund invests. FMR uses this benchmark as
a guide in structuring the fund and selecting its investments. The benchmark
index for the fund is the Lehman Brothers Municipal Bond Index, a benchmark of
investment-grade municipal bonds with maturities of one year or more. FMR
manages the fund to have similar overall interest rate risk to the Index. As of
October 31, 1997, the dollar-weighted average maturity of the fund and the Index
was approximately 13.2 and
13.97 years, respectively.
FMR allocates assets among different market sectors (for example, general
obligation bonds of a state or bonds financing a specific project) and different
maturities based on its view of the relative value of each sector or maturity.
FMR focuses on assembling a portfolio of income-producing bonds that it believes
will provide the best balance between risk and return within the universe of
securities in which the fund invests. FMR's evaluation of a potential investment
includes an analysis of the credit quality of the issuer, its structural
features, its current price compared to FMR's estimate of its long-term value,
and any short-term trading opportunities resulting from market inefficiencies.
In addition, FMR may invest all of the fund's assets in municipal securities
issued to finance private activities. The interest from these securities is a
tax preference item for the purposes of the federal alternative minimum tax.
INTERMEDIATE MUNICIPAL INCOME FUND seeks high current income that is free from
federal income tax, consistent with the preservation of capital, by investing in
investment-grade municipal securities under normal conditions. FMR normally
invests at least 80% of the fund's assets in municipal securities whose interest
is free from federal income tax.
In managing the fund, FMR selects a benchmark index which is representative of
the universe of securities in which the fund invests. FMR uses this benchmark as
a guide in structuring the fund and selecting its investments. The benchmark
index for the fund is the Lehman Brothers 1-17 Year Municipal Bond Index, a
benchmark of investment-grade municipal bonds with maturities between one and 17
years. FMR manages the fund to have similar overall interest rate risk to the
Index. As of November 30, 1997, the dollar-weighted average maturity of the fund
and the Index was approximately 7.6 and 8.49 years, respectively.
In addition, the fund normally maintains a dollar-weighted average maturity
between three and 10 years.
FMR allocates assets among different market sectors (for example, general
obligation bonds of a state or bonds financing a specific project) and different
maturities based on its view of the relative value of each sector or maturity.
FMR focuses on assembling a portfolio of income-producing bonds that it believes
will provide the best balance between risk and return within the universe of
securities in which the fund invests. FMR's evaluation of a potential investment
includes an analysis of the credit quality of the issuer, its structural
features, its current price compared to FMR's estimate of its long-term value,
and any short-term trading opportunities resulting from market inefficiencies.
In addition, FMR may invest all of the fund's assets in municipal securities
issued to finance private activities. The interest from these securities is a
tax preference item for the purposes of the federal alternative minimum tax.
SHORT-INTERMEDIATE MUNICIPAL INCOME FUND seeks high current income that is free
from federal income tax, consistent with preservation of capital, by investing
in investment-grade municipal securities under normal conditions. FMR normally
invests at least 80% of the fund's assets in municipal securities whose interest
is free from federal income tax.
In managing the fund, FMR selects a benchmark index which is representative of
the universe of securities in which the fund invests. FMR uses this benchmark as
a guide in structuring the fund and selecting its investments. The benchmark
index for the fund is the Lehman Brothers 1-5 Year Municipal Bond Index, a
benchmark of investment-grade municipal bonds with maturities between one and
five years. FMR manages the fund to have similar overall interest rate risk to
the Index. As of November 30, 1997 the dollar-weighted average maturity of the
fund and the Index was approximately 3.2 and 3.69 years,
respectively. In addition, the fund normally maintains a dollar-weighted average
maturity between two and five years.
FMR allocates assets among different market sectors (for example, general
obligation bonds of a state or bonds financing a specific project) and different
maturities based on its view of the relative value of each sector or maturity.
FMR focuses on assembling a portfolio of income-producing bonds that it believes
will provide the best balance between risk and return within the universe of
securities in which the fund invests. FMR's evaluation of a potential investment
includes an analysis of the credit quality of the issuer, its structural
features, its current price compared to FMR's estimate of its long-term value,
and any short-term trading opportunities resulting from market inefficiencies.
In addition, FMR may invest all of the fund's assets in municipal securities
issued to finance private activities. The interest from these securities is a
tax preference item for the purposes of the federal alternative minimum tax.
TEMPORARY DEFENSIVE POLICIES. FMR normally invests each fund's assets according
to its investment strategy.
Each of the Equity Funds, High Yield, and Strategic Income reserves the right to
invest without limitation in preferred stocks and investment-grade debt
instruments for temporary, defensive purposes.
<PAGE>
Each of Mortgage Securities, Government Investment, Intermediate Bond, and Short
Fixed-Income reserves the right to invest without limitation in investment-grade
money market or short-term debt instruments for temporary, defensive purposes.
Each of Municipal Income, Intermediate Municipal Income, and Short-Intermediate
Municipal Income do not expect to invest in federally taxable obligations. Each
of Municipal Income, Intermediate Municipal Income, and Short-Intermediate
Municipal Income, reserves the right to invest without limitation in short-term
instruments, to hold a substantial amount of uninvested cash, or to invest more
than normally permitted in taxable obligations for temporary, defensive
purposes.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of instruments
in which a fund may invest, strategies FMR may employ in pursuit of a fund's
investment objective, and a summary of related risks. Any restrictions listed
supplement those discussed earlier in this section. A complete listing of each
fund's limitations and more detailed information about each fund's investments
are contained in the funds' SAI. Policies and limitations are considered at the
time of purchase; the sale of instruments is not required in the event of a
subsequent change in circumstances.
FMR may not buy all of these instruments or use all of these techniques unless
it believes that they are consistent with a fund's investment objective and
policies and that doing so will help a fund achieve its goal. Fund holdings and
recent investment strategies are detailed in each fund's financial reports,
which are sent to shareholders twice a year. For a free SAI or financial report,
call your investment professional.
EQUITY SECURITIES may include common stocks, preferred stocks, convertible
securities, and warrants. Common stocks, the most familiar type, represent an
equity (ownership) interest in a corporation. Although equity securities have a
history of long-term growth in value, their prices fluctuate based on changes in
a company's financial condition and on overall market and economic conditions.
Smaller companies are especially sensitive to these factors.
RESTRICTIONS: With respect to 75% of total assets, each of the Equity Funds,
High Yield, Mortgage Securities, Government Investment, Intermediate Bond, Short
Fixed-Income, Municipal Income, and Intermediate Municipal Income may not
purchase more than 10% of the outstanding voting securities of a single issuer.
For TechnoQuant Growth, Mid Cap, Equity Growth, Growth Opportunities, Strategic
Opportunities, Large Cap, and Growth & Income, this limitation does not apply to
securities of other investment companies.
DEBT SECURITIES. Bonds and other debt instruments are used by issuers to borrow
money from investors. The issuer generally pays the investor a fixed, variable,
or floating rate of interest, and must repay the amount borrowed at maturity.
Some debt securities, such as zero coupon bonds, do not pay current interest,
but are sold at a discount from their face values.
Debt securities have varying levels of sensitivity to changes in interest rates
and varying degrees of credit quality. In general, bond prices rise when
interest rates fall, and fall when interest rates rise. Longer-term bonds and
zero coupon bonds are generally more sensitive to interest rate changes. In
addition, bond prices are also affected by the credit quality of the issuer.
Lower-quality debt securities are considered to have speculative
characteristics, and involve greater risk of default or price changes due to
changes in the issuer's creditworthiness, or they may already be in default. The
market prices of these securities may fluctuate more than higher-quality
securities and may decline significantly in periods of general or regional
economic difficulty. Lower-quality securities may be thinly traded, making them
difficult to sell promptly at an acceptable price. Adverse publicity and
changing investor perceptions may affect the ability to obtain prices for, or to
sell these securities.
The default rate of lower-quality debt securities is likely to be higher when
issuers have difficulty meeting projected goals or obtaining additional
financing. This could occur during economic recessions or periods of high
interest rates. If an issuer defaults, the fund may try to protect the interests
of security holders if it determines such action to be in the interest of its
shareholders.
The table on the following page provides a summary of ratings assigned to
debt holdings (not including money market instruments) in the funds' portfolios.
These figures are dollar-weighted averages of month-end portfolio holdings
during the fiscal period ended 1997, and are presented as a percentage of
total security investments. These percentages are historical and do not
necessarily indicate a fund's current or future debt holdings.
FISCAL PERIOD ENDED 1997 DEBT HOLDINGS (AS A % OF INVESTMENTS), BY RATING
<PAGE>
<TABLE>
<CAPTION>
MID** EQUITY** GROWTH* GROWTH**** STRATEGIC** LARGE** GROWTH &** EQUITY**
S&P RATING CAP GROWTH OPPORTUNITIES OPPORTUNITIES OPPORTUNITIES CAP INCOME INCOME
(AVERAGE OF TOTAL INVESTMENTS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT GRADE
HIGHEST QUALITY AAA
HIGH QUALITY AA -- -- 14.00% 12.10% -- -- 0.20% 1.35%
UPPER-MEDIUM GRADE A
MEDIUM GRADE BBB -- -- -- -- -- -- 0.36% --
LOWER QUALITY
MODERATELY SPECULATIVE BB -- -- -- -- -- -- 0.35% 0.25%
SPECULATIVE B 0.01% -- -- -- -- 0.06% -- 0.14% --
HIGHLY SPECULATIVE CCC -- -- -- -- -- -- -- --
POOR QUALITY CC -- -- -- -- -- -- -- --
LOWEST QUALITY, NO INTEREST C -- -- -- -- -- -- -- --
IN DEFAULT, IN ARREARS D -- -- -- -- -- -- -- --
</TABLE>
<TABLE>
<CAPTION>
HIGH* STRATEGIC***
S&P RATING BALANCED* YIELD INCOME
(AVERAGE OF TOTAL INVESTMENTS)
<S> <C> <C> <C>
INVESTMENT GRADE
HIGHEST QUALITY AAA
HIGH QUALITY AA 22.57% -- 41.93%
UPPER-MEDIUM GRADE A
MEDIUM GRADE BBB 7.19% 0.32% 0.85%
LOWER QUALITY
MODERATELY SPECULATIVE BB 0.87% 6.39% 8.66%
SPECULATIVE B 0.01% 3.92% 51.18% 25.32%
HIGHLY SPECULATIVE CCC 0.33% 7.13% 2.85%
POOR QUALITY CC 0.04% 1.14% 0.30%
LOWEST QUALITY, NO INTEREST C -- -- --
IN DEFAULT, IN ARREARS D -- -- --
</TABLE>
<TABLE>
<CAPTION>
MID EQUITY GROWTH GROWTH STRATEGIC LARGE GROWTH &
MOODY'S RATING CAP GROWTH OPPORTUNITIES OPPORTUNITIES OPPORTUNITIES CAP INCOME
(AVERAGE OF TOTAL INVESTMENTS)
INVESTMENT GRADE
<S> <C> <C> <C> <C> <C> <C> <C>
HIGHEST QUALITY AAA
HIGH QUALITY AA -- -- 14.00% 12.10% -- -- 0.10%
UPPER-MEDIUM GRADE A
MEDIUM GRADE BAA -- -- -- -- -- -- 0.13%
LOWER QUALITY
MODERATELY SPECULATIVE BA -- -- -- -- -- -- 0.57%
SPECULATIVE B 0.01% -- -- -- 0.38% -- 0.23%
HIGHLY SPECULATIVE CAA -- -- -- -- -- -- --
POOR QUALITY CA -- -- -- -- -- -- --
LOWEST QUALITY, NO INTEREST C -- -- -- -- -- -- --
IN DEFAULT, IN ARREARS -- -- -- -- -- -- --
</TABLE>
<TABLE>
<CAPTION>
EQUITY HIGH STRATEGIC
MOODY'S RATING INCOME BALANCED YIELD INCOME
(AVERAGE OF TOTAL INVESTMENTS)
INVESTMENT GRADE
<S> <C> <C> <C> <C>
HIGHEST QUALITY AAA
HIGH QUALITY AA 1.35% 23.89% -- 41.40%
UPPER-MEDIUM GRADE A
MEDIUM GRADE BAA -- 4.64% -- 0.15%
LOWER QUALITY
MODERATELY SPECULATIVE BA 0.24% 2.19% 5.98% 7.98%
SPECULATIVE B 0.01% 3.90% 50.69% 27.95%
HIGHLY SPECULATIVE CAA -- 0.37% 11.11% 3.17%
POOR QUALITY CA -- -- 0.03% --
LOWEST QUALITY, NO INTEREST C -- -- -- --
IN DEFAULT, IN ARREARS -- -- -- --
<FN>
* FISCAL YEAR ENDED OCTOBER 31, 1997.
** FISCAL YEAR ENDED NOVEMBER 30, 1997.
*** FISCAL YEAR ENDED DECEMBER 31, 1997.
**** FOR THE ONE MONTH PERIOD ENDED NOVEMBER 30, 1997.
</TABLE>
REFER TO THE APPENDIX FOR A MORE COMPLETE DISCUSSION OF THESE RATINGS.
THE FUNDS DO NOT NECESSARILY RELY ON THE RATINGS OF MOODY'S OR S&P TO
DETERMINE COMPLIANCE WITH THEIR DEBT QUALITY POLICIES. SECURITIES NOT RATED BY
MOODY'S AND S&P AMOUNTED TO 0.66% OF BALANCED INVESTMENTS, 5.72% OF HIGH
YIELD INVESTMENTS, 9.16% OF STRATEGIC INCOME INVESTMENTS, AND 0.59% OF STRATEGIC
OPPORTUNITIES INVESTMENTS. THESE PERCENTAGES MAY INCLUDE SECURITIES
RATED BY OTHER NATIONALLY RECOGNIZED STATISTICAL RATING ORGANIZATIONS, AS WELL
AS UNRATED SECURITIES. UNRATED LOWER-QUALITY SECURITIES AMOUNTED TO 0.51% OF
BALANCED
INVESTMENTS, 5.66% OF HIGH YIELD INVESTMENTS, 9.09% OF STRATEGIC INCOME
INVESTMENTS, AND 0.59% OF STRATEGIC OPPORTUNITIES INVESTMENTS.
FOR FOREIGN GOVERNMENT OBLIGATIONS NOT INDIVIDUALLY RATED BY A NATIONALLY
RECOGNIZED STATISTICAL RATING ORGANIZATION, FMR ASSIGNS THE RATING OF THE
SOVEREIGN CREDIT OF THE ISSUING GOVERNMENT.
<PAGE>
RESTRICTIONS: For all of the Equity Funds, purchase of a debt security is
consistent with a fund's debt quality policy if it is rated at or above the
stated level by Moody's Investors Service (Moody's) or rated in the equivalent
categories by Standard & Poor's (S&P), or is unrated but judged to be of
equivalent quality by FMR.
Each of Mid Cap, Equity Growth, Growth Opportunities, Strategic Opportunities,
Large Cap, Growth & Income, Equity Income, and Balanced currently intends to
limit its investments in lower than Baa-quality debt securities to less than 35%
of its assets.
TechnoQuant Growth currently intends to limit its investments in lower than
Baa-quality debt securities to 5% of its assets.
Each of Intermediate Bond, Mortgage Securities, Short Fixed-Income, Municipal
Income, Intermediate Municipal Income, and Short-Intermediate Municipal Income
normally invests in investment-grade securities, but reserves the right to
invest up to 5% of its assets in below investment-grade securities. A security
is considered to be investment-grade if it is rated investment-grade by Moody's,
S&P, Duff & Phelps Credit Rating Co., or Fitch IBCA In c., or is unrated
but judged by FMR to be of equivalent quality.
U.S. GOVERNMENT SECURITIES are high-quality debt instruments issued or
guaranteed by the U.S. Treasury or by an agency or instrumentality of the U.S.
Government. Not all U.S. Government securities are backed by the full faith and
credit of the United States. For example, U.S. Government securities such as
those issued by Fannie Mae are supported by the instrumentality's right to
borrow money from the U.S. Treasury under certain circumstances. Other U.S.
Government securities, such as those issued by the Federal Farm Credit Banks
Funding Corporation, are supported only by the credit of the entity that issued
them.
MUNICIPAL SECURITIES are issued to raise money for a variety of public or
private purposes, including general financing for state and local governments,
or financing for specific projects or public facilities. They may be fully or
partially backed by the local government, or by the credit of a private issuer
or the current or anticipated revenues from specific projects or assets. Because
many municipal securities are issued to finance similar types of projects,
especially those relating to education, health care, housing, transportation,
and utilities, the municipal markets can be affected by conditions in those
sectors. In addition, all municipal securities may be affected by uncertainties
regarding their tax status, legislative changes, or rights of municipal
securities holders. A municipal security may be owned directly or through a
participation interest.
<PAGE>
CREDIT AND LIQUIDITY SUPPORT. Issuers may employ various forms of credit and
liquidity enhancement, including letters of credit, guarantees, puts and demand
features, and insurance, provided by foreign or domestic entities such as banks
and other financial institutions. These arrangements expose a fund to the credit
risk of the entity providing the credit or liquidity support. Changes in the
credit quality of the provider could affect the value of the security and a
fund's share price.
OTHER INSTRUMENTS may include securities of closed-end investment companies.
EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies, and
securities issued by U.S. entities with substantial foreign operations may
involve additional risks and considerations. These include risks relating to
political , economic , or regulatory conditions in foreign
countries ; fluctuations in foreign currencies ; withholding or
other taxes ; trading, settlement, custodial, and other operational
risks ; and the potentially less stringent investor protection and
disclosure standards of foreign markets. Additionally, governmental issuers of
foreign debt securities may be unwilling to pay interest and repay principal
when due and may require that the conditions for payment be renegotiated. All of
these factors can make foreign investments, especially those in emerging
markets , more volatile and potentially less liquid than U.S.
investments.
ASSET-BACKED SECURITIES include interests in pools of purchase contracts,
financing leases, or sales agreements entered into by municipalities, debt
securities, or consumer loans. The value of these securities depends on many
factors, including changes in interest rates, the availability of information
concerning the pool and its structure, the credit quality of the underlying
assets, the market's perception of the servicer of the pool, and any credit
enhancement provided. In addition, these securities may be subject to prepayment
risk.
MORTGAGE SECURITIES include interests in pools of commercial or residential
mortgages, and may include complex instruments such as collateralized mortgage
obligations and stripped mortgage-backed securities. Mortgage securities may be
issued by agencies or instrumentalities of the U.S. Government or by private
entities. The price of a mortgage security may be significantly affected by
changes in interest rates. Some mortgage securities may have a structure that
makes their reaction to interest rates and other factors difficult to predict,
making their price highly volatile. Also, mortgage securities, especially
stripped mortgage-backed securities, are subject to prepayment risk. Securities
subject to prepayment risk generally offer less potential for gains during a
declining interest rate environment, and similar or greater potential for loss
in a rising interest rate environment.
RESTRICTIONS: Government Investment does not currently intend to invest more
than 40% of its assets in mortgage securities.
VARIABLE AND FLOATING RATE SECURITIES have interest rates that are periodically
adjusted either at specific intervals or whenever a benchmark rate changes.
Inverse floaters have interest rates that move in the opposite direction from a
benchmark, often making the security's market value more volatile.
STRIPPED SECURITIES are the separate income or principal components of a debt
security. The risks associated with stripped securities are similar to those of
other debt securities, although stripped securities may be more volatile, and
the value of certain types of stripped securities may move in the same direction
as interest rates. U.S. Treasury securities that have been stripped by a Federal
Reserve Bank are obligations issued by the U.S. Treasury.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund buys a security at one
price and simultaneously agrees to sell it back at a higher price. Delays or
losses could result if the other party to the agreement defaults or becomes
insolvent.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a fund
temporarily transfers possession of a portfolio instrument to another party in
return for cash. This could increase the risk of fluctuation in the fund's yield
or in the market value of its assets.
MUNICIPAL LEASE OBLIGATIONS are used by municipalities to acquire land,
equipment, or facilities. If the municipality stops making payments or transfers
its obligations to a private entity, the obligation could lose value or become
taxable.
PUT FEATURES entitle the holder to put (sell back) an instrument to the issuer
or another party. In exchange for this benefit, a fund may accept a lower
interest rate. Demand features and standby commitments are types of put
features.
PRIVATE ENTITIES may be involved in some municipal securities. For example,
industrial revenue bonds are backed by private entities, and resource recovery
bonds often involve private corporations. The viability of a project or tax
incentives could affect the value and credit quality of these securities.
REAL ESTATE-RELATED INSTRUMENTS include real estate investment trusts,
commercial and residential mortgage-backed securities, and real estate
financings. Real estate-related instruments are sensitive to factors such as
changes in real estate values and property taxes, interest rates, cash flow of
underlying real estate assets, overbuilding, and the management skill and
creditworthiness of the issuer. Real estate-related instruments may also be
affected by tax and regulatory requirements, such as those relating to the
environment.
<PAGE>
ADJUSTING INVESTMENT EXPOSURE. A fund can use various techniques to increase or
decrease its exposure to changing security prices, interest rates, currency
exchange rates, commodity prices, or other factors that affect security values.
These techniques may involve derivative transactions such as buying and selling
options and futures contracts, entering into currency exchange contracts or swap
agreements, purchasing indexed securities, and selling securities short.
FMR can use these practices to adjust the risk and return characteristics of a
fund's portfolio of investments. If FMR judges market conditions incorrectly or
employs a strategy that does not correlate well with a fund's investments, these
techniques could result in a loss, regardless of whether the intent was to
reduce risk or increase return. These techniques may increase the volatility of
a fund and may involve a small investment of cash relative to the magnitude of
the risk assumed. In addition, these techniques could result in a loss if the
counterparty to the transaction does not perform as promised.
DIRECT DEBT. Loans and other direct debt instruments are interests in amounts
owed to another party by a company, government, or other borrower. They have
additional risks beyond conventional debt securities because they may entail
less legal protection for a fund, or there may be a requirement that the fund
supply additional cash to a borrower on demand.
ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined by FMR,
under the supervision of the Board of Trustees, to be illiquid, which means that
they may be difficult to sell promptly at an acceptable price. The sale of some
illiquid securities, and some other securities, may be subject to legal
restrictions. Difficulty in selling securities may result in a loss or may be
costly to a fund.
RESTRICTIONS: Each fund (except High Yield and Strategic Income) may not
purchase a security if, as a result, more than 10% of its assets would be
invested in illiquid securities.
Each of High Yield and Strategic Income may not purchase a security if, as a
result, more than 15% of its assets would be invested in illiquid securities.
WHEN-ISSUED AND FORWARD PURCHASE OR SALE TRANSACTIONS are trading practices in
which payment and delivery for the security take place at a later date than is
customary for that type of security. The market value of the security could
change during this period.
CASH MANAGEMENT. A fund may invest in money market securities, in repurchase
agreements, and in a money market fund available only to funds and accounts
managed by FMR or its affiliates, whose goal is to seek a high level of current
income (exempt from federal income tax in the case of a municipal money market
fund) while maintaining a stable $1.00 share price. A major change in interest
rates or a default on the money market fund's investments could cause its share
price to change.
RESTRICTIONS: Municipal Income, Intermediate Municipal Income, and
Short-Intermediate Municipal Income, do not currently intend to invest in
repurchase agreements.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce the risks
of investing. This may include limiting the amount of money invested in any one
issuer or, on a broader scale, in any one industry or type of project. Economic,
business, or political changes can affect all securities of a similar type. A
fund that is not diversified may be more sensitive to changes in the market
value of a single issuer or industry.
RESTRICTIONS: With respect to 75% of its total assets, each of the Equity Funds,
High Yield, Mortgage Securities, Government Investment, Intermediate Bond, Short
Fixed-Income, Municipal Income, and Intermediate Municipal Income may not
purchase a security if, as a result, more than 5% would be invested in the
securities of any issuer. This limitation does not apply to U.S. Government
securities or, for TechnoQuant Growth, Mid Cap, Equity Growth, Growth
Opportunities, Strategic Opportunities, Large Cap, and Growth & Income, to
securities of other investment companies.
Strategic Income and Short-Intermediate Municipal Income, are considered
non-diversified. Generally, to meet federal tax requirements at the close of
each quarter, each fund does not invest more than 25% of its total assets in any
issuer and, with respect to 50% of total assets, does not invest more than 5% of
its total assets in any issuer. These limitations do not apply to U.S.
Government securities or to securities of other investment companies.
A fund may not invest more than 25% of its total assets in any one industry.
This limitation does not apply to U.S. Government securities.
Each of Municipal Income, Intermediate Municipal Income, and Short-Intermediate
Municipal Income, may invest more than 25% of its total assets in tax-free
securities that finance similar types of projects.
BORROWING. Each fund may borrow from banks or from other funds advised by FMR,
or through reverse repurchase agreements. If a fund borrows money, its share
price may be subject to greater fluctuation until the borrowing is paid off. If
a fund makes additional investments while borrowings are outstanding, this may
be considered a form of leverage.
RESTRICTIONS: Each fund may borrow only for temporary or emergency purposes, but
not in an amount exceeding 331/3% of its total assets.
LENDING securities to broker-dealers and institutions, including Fidelity
Brokerage Services, Inc. (FBSI), an affiliate of FMR, is a means of earning
income. This practice could result in a loss or a delay in recovering a fund's
securities. A fund may also lend money to other funds advised by FMR.
RESTRICTIONS: Loans, in the aggregate, may not exceed 33 1/3% of a fund's total
assets; however, Government Investment, Municipal Income, Intermediate Municipal
Income, and Short-Intermediate Municipal Income do not currently intend to make
loans.
<PAGE>
FUNDAMENTAL INVESTMENT POLICIES AND
RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages are
fundamental, that is, subject to change only by shareholder approval. The
following paragraphs restate all those that are fundamental. All policies stated
throughout this prospectus, other than those identified in the following
paragraphs, can be changed without shareholder approval.
TECHNOQUANT GROWTH FUND seeks capital growth.
MID CAP FUND seeks long-term growth of capital.
EQUITY GROWTH FUND seeks to achieve capital appreciation by investing primarily
in common and preferred stock and securities convertible into the common stock
of companies with above-average growth characteristics.
GROWTH OPPORTUNITIES FUND seeks to provide capital growth by investing primarily
in common stocks and securities convertible into common stocks.
STRATEGIC OPPORTUNITIES FUND seeks capital appreciation by investing primarily
in securities of companies believed by FMR to involve a "special situation."
Under normal conditions, the fund will invest at least 65% of its total assets
in companies involving a special situation. FMR intends to invest primarily in
common stocks and securities that are convertible into common stocks; however,
it also may invest in debt securities of all types and quality if FMR believes
that investing in these securities will result in capital appreciation. The fund
may invest up to 30% of its assets in foreign investments.
LARGE CAP FUND seeks long-term growth of capital.
GROWTH & INCOME FUND seeks high total return through a combination of current
income and capital appreciation.
EQUITY INCOME FUND seeks a yield from dividend and interest income
which exceeds the composite dividend yield on securities comprising the S&P 500.
In addition, consistent with the primary objective of obtaining dividend and
interest income, the fund will consider the potential for achieving capital
appreciation.
BALANCED FUND seeks both income and growth of capital by investing
in a diversified portfolio of equity and fixed-income securities with income,
growth of income, and capital appreciation potential.
HIGH YIELD FUND seeks a combination of a high level of income and the potential
for capital gains by investing in a diversified portfolio consisting primarily
of high-yielding, fixed-income and zero coupon securities, such as bonds,
debentures and notes, convertible securities and preferred stocks.
STRATEGIC INCOME FUND seeks a high level of current income by investing
primarily in debt securities. The fund may also seek capital appreciation.
MORTGAGE SECURITIES FUND seeks a high level of current income, consistent with
prudent investment risk, by investing primarily in mortgage-related securities.
In seeking current income, the fund may also consider the potential for capital
gain.
GOVERNMENT INVESTMENT FUND seeks a high level of current income by investing
primarily in obligations issued or guaranteed by the U.S. Government or any of
its agencies or instrumentalities.
INTERMEDIATE BOND FUND seeks to provide a high rate of income through investment
primarily in investment-grade fixed-income obligations.
SHORT FIXED-INCOME FUND seeks to obtain a high level of current income,
consistent with the preservation of capital, by investing primarily in a broad
range of investment-grade fixed-income securities. Where appropriate the fund
will take advantage of opportunities to realize capital appreciation.
MUNICIPAL INCOME FUND seeks to provide a high current yield by investing in a
diversified portfolio of municipal obligations whose interest is not included in
gross income for purposes of calculating federal income tax. The fund normally
invests at least 80% of its assets in municipal obligations whose interest is
free from federal income tax.
INTERMEDIATE MUNICIPAL INCOME FUND seeks the highest level of income
exempt from federal income taxes that can be obtained consistent with the
preservation of capital. The fund normally invests at least 80% of its assets in
securities whose interest is free from federal income tax.
SHORT-INTERMEDIATE MUNICIPAL INCOME FUND seeks as high a level of current
income, exempt from federal income tax, as is consistent with preservation of
capital. The fund normally invests at least 80% of its assets in municipal
obligations whose interest is free from federal income tax.
With respect to 75% of its total assets, each of the Equity Funds, High Yield,
Mortgage Securities, Government Investment, Intermediate Bond, Short
Fixed-Income, Municipal Income, and Intermediate Municipal Income may not
purchase a security if, as a result, more than 5% would be invested in the
securities of any one issuer and may not purchase more than 10% of the
outstanding voting securities of a single issuer. These limitations do not apply
to U.S. Government securities or, for TechnoQuant Growth, Mid Cap, Equity
Growth, Growth Opportunities, Strategic Opportunities, Large Cap, and Growth &
Income, to securities of other investment companies.
Each fund may not invest more than 25% of its total assets in any one industry.
This limitation does not apply to U.S. Government securities.
Each fund may borrow only for temporary or emergency purposes, but not in an
amount exceeding 33 1/3% of its total assets.
Loans, in the aggregate, may not exceed 33 1/3% of each fund's total assets.
<PAGE>
BREAKDOWN OF EXPENSES
Like all mutual funds, the funds pay fees related to their daily operations.
Expenses paid out of each class's assets are reflected in that class's share
price or dividends; they are neither billed directly to shareholders nor
deducted from shareholder accounts.
Each fund pays a MANAGEMENT FEE to FMR for managing its investments and business
affairs. FMR in turn pays fees to affiliates who provide assistance with these
services for certain of the funds. Each fund also pays OTHER EXPENSES, which are
explained on page .
FMR may, from time to time, agree to reimburse a fund for management fees and
other expenses above a specified limit. FMR retains the ability to be repaid by
a fund if expenses fall below the specified limit prior to the end of the fiscal
year. Reimbursement arrangements, which may be terminated at any time without
notice, can decrease a fund's expenses and boost its performance.
MANAGEMENT FEE
The management fee is calculated and paid to FMR every month.
Equity Income pays a monthly management fee at an annual rate of 0.50% of its
average net assets.
For each of TechnoQuant Growth, Mid Cap, Equity Growth, Large Cap, Growth &
Income, Balanced, High Yield, Strategic Income, Mortgage Securities, Government
Investment, Intermediate Bond, Short Fixed-Income, Municipal Income,
Intermediate Municipal Income, and Short-Intermediate Municipal Income, the fee
is calculated by adding a group fee rate to an individual fund fee rate,
multiplying the result by the fund's monthly average net assets , and
dividing by twelve.
For Growth Opportunities and Strategic Opportunities, the fee is calculated
by calculating a basic fee and then applying a performance adjustment. The
performance adjustment either increases or decreases the management fee,
depending on how well each fund has performed relative to the S&P 500. The basic
fee is calculated by adding a group fee rate to an individual fund fee rate,
multiplying the result by the fund's monthly average net assets, and dividing by
twelve.
The group fee rate is based on the average net assets of all the mutual funds
advised by FMR. This rate cannot rise above 0.52% for TechnoQuant Growth, Mid
Cap, Equity Growth, Growth Opportunities, Strategic Opportunities, Large Cap,
Growth & Income, and Balanced or 0.37% for High Yield, Strategic Income,
Mortgage Securities, Government Investment, Intermediate Bond, Short
Fixed-Income, Municipal Income, Intermediate Municipal Income, and
Short-Intermediate Municipal Income, and it drops as total assets under
management increase. For December 1997, the group fee rate for the Equity
Funds was 0.29%, and the group fee rate for the Bond Funds, the
Intermediate-Term Bond Funds, and the Short-Term Bond Funds was 0.14%.
The performance adjustment rate is calculated monthly by comparing Growth
Opportunities' and Strategic Opportunities' performance to that of the S&P 500
over the most recent 36-month period. The difference is translated into a dollar
amount that is added to or subtracted from the basic fee. The maximum annualized
performance adjustment rate is (plus/minus) 0.20% of a fund's average net assets
over the performance period.
For the purposes of calculating the performance adjustment for each of Growth
Opportunities and Strategic Opportunities, the fund's investment performance
will be based on the average performance of all classes of the fund weighted
according to their average assets for each month in the performance period.
The individual fund fee rates for each of TechnoQuant Growth, Mid Cap, Equity
Growth, Growth Opportunities, Strategic Opportunities, Large Cap, Mortgage
Securities, Government Investment, Intermediate Bond, and Short-Fixed Income is
0.30%. The individual fund fee rate for Growth & Income is 0.20%. The individual
fund fee rate for Balanced is 0.15%. The individual fund fee rate for each of
High Yield and Strategic Income is 0.45%. The individual fund fee rate for each
of Municipal Income, Intermediate Municipal Income, and Short-Intermediate
Municipal Income is 0.25%.
The following table states the management fee , as a percentage of each fund's
average net assets, for each fund for its most recent fiscal year
end ed 1997:
<TABLE>
<CAPTION>
TOTAL
MANAGEMENT FEE
<S> <C>
MID CAP 0.60%
EQUITY GROWTH 0.60%
GROWTH OPPORTUNITIES 0.52%[A][B][C]
STRATEGIC OPPORTUNITIES 0.40%[A][B][C]
LARGE CAP 0.60%
EQUITY INCOME 0.50%
BALANCED 0.45%
HIGH YIELD 0.59%
STRATEGIC INCOME 0.59%
MORTGAGE SECURITIES 0.44%[B][D]
GOVERNMENT INVESTMENT 0.44%
INTERMEDIATE BOND 0.44%
SHORT FIXED-INCOME 0.44%
MUNICIPAL INCOME 0.39%
INTERMEDIATE MUNICIPAL INCOME 0.39%
SHORT-INTERMEDIATE MUNICIPAL INCOME 0.39%
</TABLE>
[A] THE ANNUALIZED BASIC FEE, AS A PERCENTAGE OF EACH FUND'S AVERAGE NET
ASSETS, FOR THE FISCAL PERIOD ENDED NOVEMBER 30, 1997 WAS 0.60% FOR GROWTH
OPPORTUNITIES AND 0.60% FOR STRATEGIC OPPORTUNITIES.
[B] ANNUALIZED
[C] FOR THE FISCAL PERIOD ENDED NOVEMBER 30, 1997.
[D] FOR THE FISCAL PERIOD ENDED OCTOBER 31, 1997.
The total management fee for Growth Opportunities for the fiscal year ended
October 31, 1997 was 0.49% of the fund's average net assets. The basic fee for
Growth Opportunities for the fiscal year ended October 31, 1997 was 0.60% of the
fund's average net assets.
<PAGE>
The total management fee for Mortgage Securities for the fiscal year ended
July 31, 1997 was 0.44% of the fund's average net assets.
FMR HAS SUB-ADVISORY AGREEMENTS with four affiliates: FMR U.K., FMR Far East,
FIJ and FIIA. FIIA in turn has a sub-advisory agreement with FIIA(U.K.)L. These
sub-advisers are compensated for providing FMR with investment research and
advice on issuers based outside the United States. FMR pays FMR U.K. and FMR Far
East fees equal to 110% and 105%, respectively, of the costs of providing these
services. FMR pays FIJ and FIIA a fee equal to 30% of its management fee rate
associated with investments for which the sub-adviser provided investment
advice.
The sub-advisers may also provide investment management services. In return, FMR
pays FMR U.K., FMR Far East, FIJ, and FIIA a fee equal to 50% of its management
fee rate with respect to a fund's investments that the sub-adviser manages on a
discretionary basis. FIIA pays FIIA(U.K.)L a fee equal to 110% of the cost of
providing these services.
For the fiscal period ended 1997, FMR, on behalf of each fund with
sub-advisory agreements paid FMR U.K., FMR Far East, FIJ, and FIIA fees equal to
less than 0.01 % of each fund's average net assets (annualized for
periods of less than one year). The numbers for Growth Opportunities and
Strategic Opportunities are for the fiscal period ended November 30, 1997 and
the number for Mortgage Securities is for the fiscal period ended October 31,
1997.
For the fiscal year ended October 31, 1997, FMR on behalf of Growth
Opportunities paid FMR U.K., and FMR Far East fees equal to less than 0.01% of
the fund's average net assets.
Beginning January 1, 1999, FIMM will select certain investments for Balanced
and Strategic Income.
Beginning January 1, 1999, FIMM, will have primary responsibility for
managing Mortgage Securities, Government Investment, Intermediate Bond, Short
Fixed-Income, Municipal Income, Intermediate Municipal Income, and
Short-Intermediate Municipal Income. FMR will pay FIMM 50% of its management fee
(before expense reimbursements) for FIMM's services.
OTHER EXPENSES
While the management fee is a significant component of each fund's annual
operating costs, the funds have other expenses as well.
FIIOC performs transfer agency, dividend disbursing and shareholder servicing
functions for each class of the Equity Funds, High Yield, Strategic Income,
Mortgage Securities, Government Investment, Intermediate Bond, and Short
Fixed-Income (the Taxable Funds). Fidelity Service Company, Inc. (FSC)
calculates the net asset value per share (NAV) and dividends for each class of
the Taxable Funds and maintains the general accounting records and administers
the securities lending program for the Taxable Funds.
For the fiscal period ended 1997, transfer agency and pricing and
bookkeeping fees paid (as a percentage of average net assets) amounted to the
following. These amounts (annualized for periods of less than one year)
are before expense reductions, if any.
<TABLE>
<CAPTION>
TRANSFER AGENCY FEES PRICING AND
PAID BY BOOKKEEPING
FEES PAID
BY FUND
CLASS A CLASS T CLASS B
<S> <C> <C> <C> <C>
TECHNOQUANT GROWTH 0.22% 0.32% 0.25% 0.24%
MID CAP 0.32% 0.24% 0.25% 0.06%
EQUITY GROWTH 0.27% 0.18% 0.26% 0.02%
GROWTH OPPORTUNITIES[A] 0.26% 0.18% 0.26% 0.00%
STRATEGIC OPPORTUNITIES[A] 0.36% 0.22% 0.25% 0.05%
LARGE CAP 0.28% 0.22% 0.24% 0.10%
GROWTH & INCOME 0.28% 0.21% 0.24% 0.09%
EQUITY INCOME 0.24% 0.18% 0.20% 0.03%
BALANCED 0.24% 0.18% 0.25% 0.03%
HIGH YIELD 0.21% 0.19% 0.19% 0.03%
STRATEGIC INCOME 0.37% 0.21% 0.20% 0.04%
MORTGAGE SECURITIES[B] 0.29% 0.52% 0.42% 0.04%
GOVERNMENT INVESTMENT 0.50% 0.24% 0.23% 0.04%
INTERMEDIATE BOND 0.34% 0.20% 0.26% 0.04%
SHORT FIXED-INCOME 0.27% 0.22% * 0.04%
<FN>
* FUND DOES NOT OFFER CLASS B SHARES.
[A] FOR THE FISCAL PERIOD ENDED NOVEMBER 30, 1997.
[B] FOR THE FISCAL PERIOD ENDED OCTOBER 31, 1997.
</TABLE>
The transfer agency fees paid by Class A, Class T, and Class B of Growth
Opportunities for the fiscal year ended October 31, 1997 were 0.24%, 0.17%, and
0.24%. The transfer agency fees paid by Class A, Class T, and Class B of
Mortgage Securities for the fiscal year ended July 31, 1997 were 0.22%, 0.14%,
and 0.57%, respectively.
The pricing and bookkeeping fees paid by Growth Opportunities for the fiscal
year ended October 31, 1997 were 0.00%. The pricing and bookkeeping fees paid by
Mortgage Securities for the fiscal year ended July 31, 1997 were 0.04%.
UMB is the transfer and service agent for Municipal Income, Intermediate
Municipal Income, and Short-Intermediate Municipal Income, (the Municipal
Funds). UMB has entered into a sub-agreement with FIIOC. FIIOC performs transfer
agency, dividend disbursing and shareholder servicing functions for each class
of the Municipal Funds. UMB has also entered into a sub-agreement with FSC. FSC
calculates the NAV and dividends for each class of the Municipal Funds, and
maintains the general accounting records for each fund. Under the terms of the
sub-agreements, FIIOC and FSC receive all related fees paid to UMB by the
applicable class.
For the fiscal year ended 1997, transfer agency and pricing and bookkeeping fees
paid (as a percentage of average net assets) amounted to the following. These
amounts are before expense reductions, if any.
<PAGE>
<TABLE>
<CAPTION>
TRANSFER AGENCY FEES PRICING AND
PAID BY BOOKKEEPING
FEES PAID
BY FUND
CLASS A CLASS T CLASS B
<S> <C> <C> <C> <C>
MUNICIPAL INCOME 0.21 % 0.18 % 0.18 % 0.04 %
INTERMEDIATE MUNICIPAL INCOME 0.36 % 0.20 % 0.19 % 0.09 %
SHORT-INTERMEDIATE MUNICIPAL INCOME 0.39 % 0.21 % * 0.26 %
</TABLE>
* FUND DOES NOT OFFER CLASS B SHARES.
Each fund also pays other expenses, such as legal, audit, and custodian fees;
in some instances, proxy solicitation costs; and the compensation of trustees
who are not affiliated with Fidelity. A broker-dealer may use a portion of the
commissions paid by a fund to reduce that fund's custodian or transfer agent
fees.
Class A shares of each fund have adopted a DISTRIBUTION AND SERVICE PLAN. Under
the plans, Class A of each fund is authorized to pay FDC a monthly distribution
fee as compensation for its services and expenses in connection with the
distribution of Class A shares. Class A of the Equity Funds may pay FDC a
distribution fee at an annual rate of 0.75% of its average net assets, or such
lesser amount as the Trustees may determine from time to time. Class A of the
Bond Funds, the Intermediate-Term Bond Funds, and the Short-Term Bond Funds may
pay FDC a distribution fee at an annual rate of 0.40% of its average net assets,
or such lesser amount as the Trustees may determine from time to time. Class A
of the Equity Funds currently pays FDC a monthly distribution fee at an annual
rate of 0.25% of its average net assets throughout the month; Class A of each of
the Bond Funds, the Intermediate-Term Bond Funds, and the Short-Term Bond Funds
currently pays FDC a monthly distribution fee at an annual rate of 0.15% of its
average net assets throughout the month. Class A distribution fee rates may be
increased only when the Trustees believe that it is in the best interests of
Class A shareholders to do so.
Class T shares of each fund have adopted a DISTRIBUTION AND SERVICE PLAN. Under
the plans, Class T of each fund is authorized to pay FDC a monthly distribution
fee as compensation for its services and expenses in connection with the
distribution of Class T shares. Class T of TechnoQuant Growth, Mid Cap, Equity
Growth, Equity Income, Large Cap, and Growth & Income may pay FDC a distribution
fee at an annual rate of 0.75% of its average net assets, or such lesser amount
as the Trustees may determine from time to time. Class T of Growth
Opportunities, Strategic Opportunities, and Balanced may pay FDC a distribution
fee at an annual rate of 0.65% of its average net assets, or such lesser amount
as the Trustees may determine from time to time. Class T of High Yield,
Strategic Income, Mortgage Securities, Government Investment, Intermediate Bond,
Municipal Income, Intermediate Municipal Income, and Short-Intermediate
Municipal Income, may pay FDC a distribution fee at an annual rate of 0.40% of
its average net assets, or such lesser amount as the Trustees may determine from
time to time. Class T of Short Fixed-Income may pay FDC a distribution fee at an
annual rate of 0.15% of its average net assets, or such lesser amount as the
Trustees may determine from time to time. Class T of each of the Equity Funds
currently pays FDC a monthly distribution fee at an annual rate of
0.50% o f its average net assets throughout the month; Class T of each of
the Bond Funds and the Intermediate-Term Bond Funds currently pays FDC a monthly
distribution fee at an annual rate of 0.25% of its average net assets throughout
the month; and Class T of each of the Short-Term Bond Funds currently pays FDC a
monthly distribution fee at an annual rate of 0.15% of its average net assets
throughout the month. Class T distribution fee rates for all funds except Short
Fixed-Income may be increased only when the Trustees believe that it is in the
best interests of Class T shareholders to do so.
Up to the full amount of the Class A and Class T distribution fees may be
reallowed to investment professionals, as compensation for their services in
connection with the distribution of Class A and Class T shares and for providing
support services to Class A and Class T shareholders, based upon the level of
such services provided. These services may include, without limitation,
answering investor inquiries regarding the funds; providing assistance to
investors in changing dividend options, account designations, and addresses;
performing subaccounting and maintaining Class A and Class T shareholder
accounts; processing purchase and redemption transactions, including automatic
investment and redemption of investor account balances; providing periodic
statements showing an investor's account balance and integrating other
transactions into such statements; and performing other administrative services
in support of the shareholder.
Class B shares of each Equity Fund, Bond Fund, and Intermediate-Term Bond Fund
have adopted a DISTRIBUTION AND SERVICE PLAN. Under the plans, Class B of each
fund is authorized to pay FDC a monthly distribution fee as compensation for its
services and expenses in connection with the distribution of Class B shares.
Class B of each fund may pay FDC a distribution fee at an annual rate of 0.75%
of its average net assets, or such lesser amount as the Trustees may determine
from time to time. Class B of the Equity Funds currently pays FDC a monthly
distribution fee at an annual rate of 0.75% of its average net assets throughout
the month. Class B of each of the Bond Funds and the Intermediate-Term Bond
Funds pays FDC a monthly distribution fee at an annual rate of 0.65% of its
average net assets, or such lesser amount as the Trustees may determine from
time to time. Class B distribution fee rates for each of the Bond Funds and
Intermediate-Term Bond Funds may be increased only when the Trustees believe
that it is in the best interests of Class B shareholders to do so.
In addition, pursuant to each Class B plan, Class B of each fund pays FDC a
monthly service fee at an annual rate of 0.25% of Class B's average net assets
throughout the month. The full amount of the Class B service fee is reallowed to
investment professionals for providing personal service to and/or maintenance of
Class B shareholder accounts.
Class C shares of each fund (except Strategic Opportunities, Mortgage
Securities, and Short-Intermediate Municipal Income) have adopted a DISTRIBUTION
AND SERVICE PLAN. Under the plans,
<PAGE>
Class C of each fund is authorized to pay FDC a monthly distribution fee as
compensation for its services and expenses in connection with the distribution
of Class C shares. Class C of each fund may pay FDC a distribution fee at an
annual rate of 0.75% of its average net assets, or such lesser amount as the
Trustees may determine from time to time. Class C of each fund currently pays
FDC a monthly distribution fee at an annual rate of 0.75% of its average net
assets throughout the month. After the first year of investment, up to the full
amount of the Class C distribution fee may be reallowed to investment
professionals as compensation for their services in connection with the
distribution of Class C shares.
In addition, pursuant to each Class C plan, Class C of each fund pays FDC a
monthly service fee at an annual rate of 0.25% of Class C's average net assets
throughout the month. After the first year of investment, the full amount of the
Class C service fee is reallowed to investment professionals for providing
personal service to and/or maintenance of Class C shareholder accounts.
The Class A, Class T, Class B, and Class C plans specifically recognize that FMR
may make payments from its management fee revenue, past profits, or other
resources to FDC for expenses incurred in connection with the distribution of
the applicable class's shares, including payments made to investment
professionals that provide shareholder support services or engage in the sale of
the applicable class's shares. Currently, the Board of Trustees of each fund has
authorized such payments.
The portfolio turnover rate (annualized for periods of less than
oneyear) for the fiscal period ended 1997 was 213 % for
TechnoQuantGrowth, 208 % for Mid Cap, 108 % for Equity Growth,
33 % forGrowth Opportunities (for the fiscal period ended November 30,
1997) , 61 % for Strategic Opportunities (for the fiscal period
ended November30, 1997) , 93 % for Large Cap, 82 % for Growth &
Income, 55 % for Equity Income, 70 % for Balanced, 105 % for
HighYield, 140 % for Strategic Income, 125 % for
Mortgage Securities (for the fiscal period ended October 31, 1997) ,
136 % for Government Investment, 138 % for Intermediate Bond,
105 % for Short Fixed-Income, 36 % for Municipal Income, 18 %
for Intermediate Municipal Income, and 41 % for Short-Intermediate
Municipal Income.
The portfolio turnover rate for Growth Opportunities for the fiscal year
ended October 31, 1997 was 35%. The portfolio turnover rate for Mortgage
Securities for the fiscal year ended July 31, 1997 was 149%.
Portfolio turnover rates vary from year to year. High turnover rates increase
transaction costs and may increase taxable capital gains. FMR considers these
effects when evaluating the anticipated benefits of short-term investing.
<PAGE>
YOUR ACCOUNT
TYPES OF ACCOUNTS
When you invest through an investment professional, your investment
professional, including a broker-dealer or financial institution, may charge you
a transaction fee with respect to the purchase and sale of fund shares. Read
your investment professional's program materials in conjunction with this
prospectus for additional service features or fees that may apply. Certain
features of the funds, such as minimum initial or subsequent investment amounts,
may be modified.
The different ways to set up (register) your account with Fidelity are listed at
right.
The account guidelines that follow may not apply to certain funds or to certain
retirement accounts. For instance, municipal funds are not available for
purchase in retirement accounts. If you are investing through a retirement
account or if your employer offers a fund through a retirement program, you may
be subject to additional fees. For more information, please refer to your
program materials, contact your employer, or call your retirement benefits
number or your investment professional directly, as appropriate.
If you have selected Fidelity Advisor funds as an investment option through an
insurance company group pension program, please contact the provider directly.
WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
Individual accounts are owned by one person. Joint accounts can have two or more
owners (tenants).
- - --------------------------------------------------------------------------
RETIREMENT (ONLY TAXABLE FUNDS ARE AVAILABLE FOR THE FOLLOWING ACCOUNTS)
FOR TAX-ADVANTAGED RETIREMENT SAVINGS
Retirement plans provid e individuals with tax-advantaged ways to save
for retirement, either with tax-deductible contributions or tax-free growth .
Retirement accounts require special applications and typically have lower
minimums.
(solid bullet) T RADITIONAL INDIVIDUAL RETIREMENT ACCOUNTS (IRAS) allow
individuals under age 70 1/2 with compensation to contribute up to $2,000
per tax year. Married couples can contribute up to $4,000 per tax year, provided
no more than $2,000 is contributed on behalf of either spouse. (These limits are
aggregate for Traditional and Roth IRAs.) Contributions may be tax deductible,
subject to certain income limits.
(solid bullet) ROTH IRAS allow individuals to make non-deductible
contributions of up to $2,000 per tax year. Married couples can contribute up to
$4,000 per tax year, provided no more than $2,000 is contributed on behalf of
either spouse. (These limits are aggregate for Traditional and Roth IRAs.)
Eligibility is subject to certain income limits. Qualified distributions are
tax-free.
(solid bullet) ROTH CONVERSION IRAS allow individuals with assets held in a
Traditional IRA or Rollover IRA to convert those assets to a Roth Conversion
IRA. Eligibility is subject to certain income limits. Qualified distributions
are tax-free.
(solid bullet) ROLLOVER IRAS help retain special tax advantages for
certain eligible rollover distributions from employer-sponsored retirement
plans.
(solid bullet) PROFIT SHARING OR MONEY PURCHASE PENSION PLANS (KEOGHS ) allow
self-employed individuals or small business owners to make tax-deductible
contributions for themselves and any eligible employees.
(solid bullet) SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS) provide small
business owners or those with self-employ ment income (and their eligible
employees) with many of the same advantages as a Keogh, but with fewer
administrative requirements.
(solid bullet) SALARY REDUCTION SEP-IRAS (SARSEPS) allow employees of
businesses with 25 or fewer employees to contribute a percentage of their wages
on a tax-deferred basis. These plans must have been established by the employer
prior to January 1, 1997.
(solid bullet) SIMPLE IRAS provide small business owners and those with
self-employ ment income (and their eligible employees) with many of the
advantages of a 401(k) plan, but with fewer administrative requirements.
(solid bullet) 401(K) PLANS allow employees of organizations of all
sizes to contribute a percentage of their wages on a tax-deferred basis. These
accounts need to be established by the trustee of the plan.
- - ---------------------------------------------------------------------------
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
These custodial accounts provide a way to give money to a child and obtain tax
benefits. An individual can give up to $10,000 a year per child without paying
federal gift tax. Depending on state laws, you can set up a custodial account
under the Uniform Gifts to Minors Act (UGMA) or the Uniform Transfers to Minors
Act (UTMA). Contact your investment professional.
- - ---------------------------------------------------------------------------
TRUST
FOR MONEY BEING INVESTED BY A TRUST
The trust must be established before an account can be opened.
- - ---------------------------------------------------------------------------
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR OTHER
GROUPS
Contact your investment professional.
<PAGE>
HOW TO BUY SHARES
THE PRICE TO BUY ONE SHARE of Class A or Class T is the class's offering price
or the class's net asset value per share (NAV), depending on whether you pay a
front-end sales charge. If you pay a front-end sales charge, your price will be
Class A's or Class T's offering price. When you buy Class A or Class T shares at
the offering price, Fidelity deducts the appropriate sales charge and invests
the rest in Class A or Class T shares of the fund. If you qualify for a
front-end sales charge waiver, your price will be Class A's or Class T's NAV.
See "Transactions Details," page , and "Sales Charge Reductions and
Waivers," page , for explanations of how and when the sales charge and
waivers apply.
For Class B and Class C, the PRICE TO BUY ONE SHARE is the class's NAV. Class B
and Class C shares are sold without a front-end sales charge, but may be subject
to a CDSC upon redemption. See "Transaction Details," page , for
information on how the CDSC is calculated.
Your shares will be purchased at the next offering price or NAV, as applicable,
calculated after your order is received in proper form. Each class's
offering price and NAV, as applicable, are normally calculated each business day
at 4:00 p.m. Eastern time. Shares of Short-Intermediate Municipal Income are
offered to current shareholders only.
Each fund reserves the right to reject any specific purchase order, including
certain purchases by exchange. See "Exchange Restrictions" on page . Purchase
orders may be refused if, in FMR's opinion, they would disrupt management of a
fund.
It is the responsibility of your investment professional to transmit your order
to buy shares to Fidelity before the close of business on the day you place your
order.
Fidelity must receive payment within three business days after an order for
shares is placed; otherwise your purchase order may be canceled and you could be
held liable for resulting fees and/or losses.
Share certificates are not available for Class A, Class T, Class B, or Class C
shares.
IF YOU ARE NEW TO THE FIDELITY ADVISOR FUNDS, complete and sign an account
application and mail it along with your check. If there is no account
application accompanying this prospectus, call your investment professional or,
if you are investing through a broker-dealer or insurance representative, call
1-800-522-7279 or, if you are investing through a bank representative, call
1-800-843-3001.
If you are investing through a tax- advantaged retirement plan, such as an
IRA, for the first time, you will need a special application. Contact your
investment professional for more information and a retirement account
application.
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY ADVISOR FUND, you can:
(small solid bullet) Mail an account application with a check,
(small solid bullet) Place an order and wire money into your account,
(small solid bullet) Open your account by exchanging from the same class of
another Fidelity Advisor fund or from another Fidelity fund, or
(small solid bullet) Contact your investment professional.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $2,500
For certain Fidelity Advisor retirement accounts(double dagger) $500
Through regular investment plans* $1,000
TO ADD TO AN ACCOUNT $250
For certain Fidelity Advisor retirement accounts(double dagger) $100
Through regular investment plans* $100
MINIMUM BALANCE $1,000
For certain Fidelity Advisor retirement accounts(double dagger) None
(double dagger) THESE LOWER MINIMUMS APPLY TO FIDELITY TRADITIONAL IRA, ROTH
IRA, ROTH CONVERSION IRA, ROLLOVER IRA, SEP-IRA, AND KEOGH ACCOUNTS.
* AN ACCOUNT MAY BE OPENED WITH A MINIMUM OF $1,000, PROVIDED THAT A REGULAR
INVESTMENT PLAN IS ESTABLISHED AT THE TIME THE ACCOUNT IS OPENED. FOR MORE
INFORMATION ABOUT REGULAR INVESTMENT PLANS, PLEASE REFER TO "INVESTOR SERVICES,"
PAGE
.
Investment and account minimums are waived for purchases of Class T shares with
distributions from a Fidelity Defined Trust account.
There is no minimum account balance or initial or subsequent investment minimum
for certain retirement accounts funded through salary deduction, or accounts
opened with the proceeds of distributions from such Fidelity retirement
accounts. Refer to the program materials for details.
PURCHASE AMOUNTS OF MORE THAN $250,000 WILL NOT BE ACCEPTED FOR CLASS B SHARES.
PURCHASE AMOUNTS OF MORE THAN $1 MILLION WILL NOT BE ACCEPTED FOR CLASS C
SHARES. THIS LIMIT DOES NOT APPLY TO PURCHASES OF CLASS C SHARES MADE BY AN
EMPLOYEE BENEFIT PLAN.
For further information on opening an account, please consult your investment
professional or refer to the account application.
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
TO OPEN AN ACCOUNT
PHONE (small solid bullet) Contact your investment professional or, if
YOUR INVESTMENT you are investing through a broker-dealer or insurance
PROFESSIONAL representative, call 1-800-522-7297. If you are investing through
a bank representative, call 1-800-843-3001.
(Phone_graphic) (small solid bullet) Exchange from the same class of another
Fidelity Advisor fund or from another Fidelity fund account with
the same registration, including name, address, and taxpayer ID
number.
Mail (mail_graphic) (small solid bullet) Complete and sign the account application.
Make your check payable to the complete name of the fund of your
choice and note the applicable class. Mail to the address
indicated on the application.
In Person (hand_graphic) (small solid bullet) Bring your account application and check to
your investment professional.
Wire (wire_graphic) (small solid bullet) Not available
Automatically (small solid bullet) Not available
(automatic_graphic)
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
TO ADD TO AN ACCOUNT
PHONE (small solid bullet) Contact your investment professional or, if
YOUR INVESTMENT you are investing through a broker-dealer or insurance
PROFESSIONAL representative, call 1-800-522-7297. If you are investing through
a bank representative, call 1-800-843-3001.
(Phone_graphic) (small solid bullet) Exchange from the same class of another
Fidelity Advisor fund or from another Fidelity fund account with
the same registration, including name, address, and taxpayer ID
number.
Mail (mail_graphic) (small solid bullet) Make your check payable to the complete name
of the fund of your choice and note the applicable class.
Indicate your fund account number on your check and mail to the
address printed on your account statement.
(small solid bullet) Exchange by mail: call, your investment
professional for instructions.
In Person (hand_graphic) (small solid bullet) Bring your check to your investment
professional.
Wire (wire_graphic) (small solid bullet) Wire to:
Banker's Trust Co.
Routing # 021001033
Fidelity DART Depository
Account # 00159759
FBO: (Account name)
(Account number)
Specify the complete name of the fund of your choice, note the
applicable class, and include your account number and your
name.
Automatically (automatic_graphic) (small solid bullet) Use Fidelity Advisor Systematic Investment Program. Sign up
for this service when opening your account, or call your investment professional
to begin the program.
</TABLE>
<PAGE>
HOW TO SELL SHARES
You can arrange to take money out of your fund account at any time by selling
(redeeming) some or all of your shares.
THE PRICE TO SELL ONE SHARE of each class is the class's NAV, minus any
applicable CDSC.
Your shares will be sold at the next NAV calculated after your order is
received in proper form, minus any applicable CD SC. Each class's NAV is
normally calculated each business day at 4:00 p.m. Eastern time.
It is the responsibility of your investment professional to transmit your order
to sell shares to Fidelity before the close of business on the day you place
your order.
TO SELL SHARES IN A NON-RETIREMENT ACCOUNT, you may use any of the methods
described on these two pages.
TO SELL SHARES IN A FIDELITY ADVISOR RETIREMENT ACCOUNT, your request must be
made in writing, except for exchanges to shares of the same class of another
Fidelity Advisor fund or shares of other Fidelity funds, which can be requested
by phone or in writing.
IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR SHARES, leave at least $1,000 worth
of shares in the account to keep it open (account minimum balances do not apply
to retirement and Fidelity Defined Trust accounts).
TO SELL SHARES BY BANK WIRE, you will need to sign up for this service in
advance.
CERTAIN REQUESTS MUST INCLUDE A SIGNATURE GUARANTEE. It is designed to protect
you and Fidelity from fraud. Your request must be made in writing and include a
signature guarantee if any of the following situations apply:
(small solid bullet) You wish to redeem more than $100,000 worth of shares,
(small solid bullet) Your account registration has changed within the last 30
days,
(small solid bullet) The check is being mailed to a different address than the
one on your account (record address),
(small solid bullet) The check is being made payable to someone other than the
account owner,
(small solid bullet) The redemption proceeds are being transferred to a Fidelity
Advisor account with a different registration,
(small solid bullet) You wish to set up the bank wire feature, or
(small solid bullet) You wish to have redemption proceeds wired to a
non-predesignated bank account.
You should be able to obtain a signature guarantee from a bank, broker, dealer,
credit union (if authorized under state law), securities exchange or
association, clearing agency, or savings association. A notary public cannot
provide a signature guarantee.
SELLING SHARES IN WRITING
Write a "letter of instruction" with:
(small solid bullet) Your name,
(small solid bullet) The fund's name,
(small solid bullet) The applicable class name,
(small solid bullet) Your fund account number,
(small solid bullet) The dollar amount or number of shares to be redeemed,
signed certificates (if previously issued), and
(small solid bullet) Any other applicable requirements listed in the following
table.
Deliver your letter to your investment professional, or mail it to the following
address:
Fidelity Investments
P.O. Box 770002
Cincinnati, OH 45277-0081
Unless otherwise instructed, Fidelity will send a check to the record address.
CHECKWRITING
If you have a checkbook for your account in Short Fixed-Income or
Short-Intermediate Municipal Income, you may write an unlimited number of
checks. The minimum amount for a check is $500. Do not, however, try to close
out your account by check.
<PAGE>
<TABLE>
<CAPTION>
- - ----------------------------------------------------------------------------------------------------------------------------------
ACCOUNT TYPE SPECIAL REQUIREMENTS
- - ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PHONE All account types except retirement - Maximum check request: $100,000
YOUR INVESTMENT All account types - You may exchange to the same class of other Fidelity
Advisor funds or to other Fidelity funds if both
PROFESSIONAL accounts are registered address with the same name(s),
(phone graphic) and taxpayer ID number.
- - ----------------------------------------------------------------------------------------------------------------------------------
MAIL OR IN PERSON Individual, Joint Tenant, Sole Proprietorship, - The letter of instruction must be signed by all
(mail graphic) UGMA, UTMA persons required to sign for transactions, exactly as
their names appear on the account and sent to your
investment professional.
(hand graphic) - The account owner should complete a retirement
Retirement account distribution form. Contact your investment
professional or, if you purchased your shares through
a broker-dealer or insurance representative, call
1-800-522-7297. If you purchased your shares through a
bank representative, call 1-800-843-3001.
Trust - The trustee must sign the letter indicating capacity
as trustee. If the trustee's name is not in the
account registration, provide a copy of the trust
document certified within the last 60 days.
Business or Organization - At least one person authorized by corporate resolution
to act on the account must sign the letter.
Executor, Administrator, Conservator/Guardian - For instructions, contact your investment professional
or, if you purchased your shares through a
broker-dealer or insurance representative, call
1-800-522-7297. If you purchased your shares through a
bank representative, call 1-800-843-3001.
- - ----------------------------------------------------------------------------------------------------------------------------------
WIRE All account types except retirement - You must sign up for the wire feature before using it.
(wire graphic) To verify that it is in place, contact your investment
professional or, if you purchased your shares through
a broker-dealer or insurance representative, call
1-800-522-7297. If you purchased your shares through a
bank representative, call 1-800-843-3001. Minimum
wire: $500.
- Your wire redemption request must be received in
proper form by Fidelity before 4:00 p.m. Eastern time
for money to be wired on the next business day.
- - ----------------------------------------------------------------------------------------------------------------------------------
CHECK For all non-retirement Short Fixed-Income and - Minimum check: $500.
(check graphic) Short-Intermediate Municipal Income accounts only.
- All account owners must sign a signature card to
receive a checkbook.
INVESTOR SERVICES TRANSACTION SERVICES
Fidelity Advisor funds provide a variety of services to help EXCHANGE PRIVILEGE. You may sell your Class A or Class T
you manage your account. shares and buy the same class of shares of other Fidelity
Advisor funds or Daily Money Class shares of Treasury Fund,
INFORMATION SERVICES Prime Fund, and Tax-Exempt Fund by telephone or in writing.
You may sell your Class B shares and buy Class B shares of
STATEMENTS AND REPORTS that Fidelity sends to you include the other Fidelity Advisor funds or Advisor B Class shares of
following: Treasury Fund by telephone or in writing. You may sell your
Class C shares and buy Class C shares of other Fidelity
- - - Confirmation statements after certain transactions Advisor funds or Advisor C Class shares of Treasury Fund by
- - - Account statements (quarterly) telephone or in writing. The shares you exchange will carry
- - - Financial reports (every six months) credit for any front-end sales charge you previously paid in
connection with their purchase.
To reduce expenses, only one copy of most financial reports
and prospectuses will be mailed, even if you have more than Note that exchanges out of a fund are limited to four per
one account in a fund. Call your investment professional if calendar year, and that they may have tax consequences for
you need additional copies of financial reports and you. For details on policies and restrictions governing
prospectuses. exchanges, including circumstances under which a shareholder's
exchange privilege may be suspended or revoked, see "Exchange
Restrictions," page 82.
</TABLE>
75
<PAGE>
FIDELITY ADVISOR SYSTEMATIC WITHDRAWAL PROGRAM lets you set up periodic
redemptions from your Class A, Class T, Class B, or Class C account. Accounts
with a value of $10,000 or more in Class A, Class T, Class B, or Class C shares
are eligible for this program. Aggregate redemptions per 12-month period from
your Class B or Class C account may not exceed 10% of the account value and are
not subject to a CDSC. Because of Class A's and Class T's front-end sales
charge, you may not want to set up a systematic withdrawal plan during a period
when you are buying Class A or Class T shares on a regular basis.
One easy way to pursue your financial goals is to invest money regularly.
Fidelity Advisor funds offer convenient services that let you transfer money
into your fund account, or between fund accounts, automatically. While regular
investment plans do not guarantee a profit and will not protect you against loss
in a declining market, they can be an excellent way to invest for retirement, a
home, educational expenses, and other long-term financial goals. Certain
restrictions apply for retirement accounts. Call your investment professional
for more information.
<TABLE>
<CAPTION>
REGULAR INVESTMENT PLANS
FIDELITY ADVISOR SYSTEMATIC INVESTMENT PROGRAM
TO MOVE MONEY FROM YOUR BANK ACCOUNT TO A FIDELITY ADVISOR FUND
<S> <C> <C> <C>
MINIMUM MINIMUM
INITIAL ADDITIONAL FREQUENCY SETTING UP OR CHANGING SMALL SOLID BULLET) FOR A NEW
$1,000 $100 MONTHLY, BIMONTHLY, QUARTERLY, ACCOUNT, COMPLETE THE APPROPRIATE SECTION ON THE
OR SEMI-ANNUALLY APPLICATION.
(SMALL SOLID BULLET) FOR EXISTING ACCOUNTS, CALL YOUR
INVESTMENT PROFESSIONAL FOR AN APPLICATION.
SMALL SOLID BULLET) TO CHANGE THE AMOUNT OR FREQUENCY OF YOUR
INVESTMENT, CONTACT YOUR INVESTMENT PROFESSIONAL DIRECTLY OR, IF YOU
PURCHASED YOUR SHARES THROUGH A BROKER-DEALER OR INSURANCE
REPRESENTATIVE, CALL 1-800-522-7297. IF YOU PURCHASED YOUR SHARES
THROUGH A BANK REPRESENTATIVE, CALL 1-800-843-3001. CALL AT LEAST 10
BUSINESS DAYS PRIOR TO YOUR NEXT SCHEDULED INVESTMENT DATE (20
BUSINESS DAYS IF YOU PURCHASED YOUR SHARES THROUGH A BANK).
TO DIRECT DISTRIBUTIONS FROM A FIDELITY DEFINED TRUST TO CLASS T OF A FIDELITY ADVISOR FUND
MINIMUM MINIMUM
INITIAL ADDITIONAL SETTING UP OR CHANGING
NOT NOT (SMALL SOLID BULLET) FOR A NEW OR EXISTING ACCOUNT, ASK YOUR INVESTMENT
APPLICABLE APPLICABLE PROFESSIONAL FOR THE APPROPRIATE ENROLLMENT FORM.
(SMALL SOLID BULLET) TO CHANGE THE FUND TO WHICH YOUR DISTRIBUTIONS
ARE DIRECTED, CONTACT YOUR INVESTMENT PROFESSIONAL FOR INSTRUCTIONS.
</TABLE>
<TABLE>
<CAPTION>
FIDELITY ADVISOR SYSTEMATIC EXCHANGE PROGRAM
TO DIRECT DISTRIBUTIONS FROM A FIDELITY DEFINED TRUST TO CLASS T OF A FIDELITY
ADVISOR FUND
<S> <C> <C>
MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Monthly, quarterly, (small solid bullet) To establish, call your investment
semi-annually, or annually professional after both accounts are opened.
(small solid bullet) To change the amount or frequency of your
investment, contact your investment professional directly or, if you
purchased your shares through a broker-dealer or insurance
representative, call 1-800-522-7297. If you purchased your shares
through a bank representative, call 1-800-843-3001.
(small solid bullet) The account from which the exchanges are to be
processed must have a minimum balance of $10,000. The account into
which the exchange is being processed must have a minimum of $1,000.
(small solid bullet) Both accounts must have the same registrations
and taxpayer ID numbers.
(small solid bullet) Call at least 2 business days prior to your next
scheduled exchange date.
</TABLE>
<PAGE>
SHAREHOLDER AND ACCOUNT POLICIES
DIVIDENDS, CAPITAL GAINS, AND TAXES
Each fund distributes substantially all of its net income and capital gains to
shareholders each year. Each fund pays capital gains, if any, in December and
may pay additional capital gains after the close of its fiscal year. Normally,
dividends for Growth & Income, Equity Income, and Balanced are distributed in
March, June, September and December; dividends for TechnoQuant Growth, Mid Cap,
Equity Growth, Growth Opportunities, Strategic Opportunities, and Large Cap are
distributed in December and January; dividends for Strategic Income, High Yield,
Mortgage Securities, Government Investment, Intermediate Bond, Short
Fixed-Income, Municipal Income, Intermediate Municipal Income, and
Short-Intermediate Municipal Income, are declared daily and paid monthly.
DISTRIBUTION OPTIONS
When you open an account, specify on your account application how you want to
receive your distributions. The funds offer four options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions will be
automatically reinvested in additional shares of the same class of the
fund. If you do not indicate a choice on your application, you will be
assigned this option.
2. INCOME-EARNED OPTION. Your capital gain distributions will be automatically
reinvested in additional shares of the same class of the fund, but you will
be sent a check for each dividend distribution.
3. CASH OPTION. You will be sent a check for your dividend and capital gain
distributions.
4. DIRECTED DIVIDENDS(registered trademark) PROGRAM. Your dividend
distributions will be automatically invested in the same class of shares of
another identically registered Fidelity Advisor fund. You will be sent a
check for your capital gain distributions or your capital gain
distributions will be automatically reinvested in additional shares of the
same class of the fund.
I f you select distribution option 2, 3, or 4 and the U.S. Postal Service
cannot deliver your checks, or if your checks remain uncashed for six months,
those checks will be reinvested in your account at the current NAV and your
election may be converted to the Reinvestment Option. To change your
distribution option, call your investment professional directly, or if you
purchased your shares through a broker-dealer or insurance representative, call
1-800-522-7297. If you purchased your shares through a bank representative, call
1-800-843-3001.
Shares purchased through reinvestment of dividend and capital gain distributions
are not subject to a sales charge. If you direct Class A or Class T
distributions to a fund/class with a front-end sales charge, you will not pay a
sales charge on those purchases.
When each of the Equity Funds deducts a distribution from its NAV, the
reinvestment price is the applicable class's NAV at the close of business that
day. Dividends from the Bond Funds, the Intermediate-Term Bond Funds and the
Short-Term Bond Funds will be reinvested at the applicable class's NAV on the
last day of the month. Capital gain distributions from the Bond Funds, the
Intermediate-Term Bond Funds, and the Short-Term Bond Funds will be reinvested
at the NAV as of the date the applicable fund deducts the distributions from its
NAV. The mailing of distribution checks will begin within seven days, or longer
for a December ex-dividend date.
TAXES
As with any investment, you should consider how an investment in the funds could
affect you. Below are some of the funds' tax implications. If your account is
not a tax-a dvantaged retirement account, be aware of these tax
implications.
TAXES ON DISTRIBUTIONS. Interest income that the Municipal Funds earn is
distributed to shareholders as income dividends. Interest that is federally
tax-free remains tax-free when it is distributed. Distributions from each fund
(except the Municipal Funds), however, are subject to federal income tax. Each
fund may also be subject to state or local taxes. If you live outside the United
States, your distributions from these funds could also be taxed by the country
in which you reside.
For federal tax purposes, income and short-term capital gains from the Taxable
Funds are distributed as dividends and taxed as ordinary income; capital gain
distributions are taxed as long-term capital gains.
However, for shareholders of the Municipal Funds, gain on the sale of tax-free
bonds results in taxable distributions. Short-term capital gains and a portion
of the gain on bonds purchased at a discount are distributed as dividends and
taxed as ordinary income; capital gain distributions, if any, are taxed as
long-term capital gains.
Mutual fund dividends from U.S. Government securities are generally free from
state and local income taxes. However, particular states may limit this benefit,
and some types of securities, such as repurchase agreements and some
agency-backed securities, may not qualify for the benefit. Ginnie Mae securities
and other mortgage-backed securities are notable exceptions in most states. In
addition, some states may impose intangible property taxes. You should consult
your own tax adviser for details and up-to-date information on the tax laws in
your state.
Distributions are taxable when they are paid, whether you take them in cash or
reinvest them. However, distributions declared in December and paid in January
are taxable as if they were paid on December 31.
Every January, Fidelity will send you and the IRS a statement showing the tax
characterization of distributions paid to you in the previous year.
The interest from some municipal securities is subject to the federal
alternative minimum tax. Each of the Municipal Funds may invest up to 100% of
its assets in these securities. Individuals who are subject to the tax must
report this interest on their tax returns.
A portion of the dividends from each of the Municipal Funds may be free from
state or local taxes. Income from investments in your state are often tax-free
to you. Each year, Fidelity will send you a
<PAGE>
breakdown of each of these funds' income from each state to help you calculate
your taxes.
During the fiscal period ended 1997, 100% of the income dividends from
Municipal Income, Intermediate Municipal Income, and Short-Intermediate
Municipal Income was free from federal income tax. During the fiscal year ended
1997, 18.90% of Municipal Income's, 8.72% of Intermediate Municipal Income's,
and 19.53% of Short-Intermediate Municipal Income's dividends were subject to
the federal alternative minimum tax.
TAXES ON TRANSACTIONS. Your redemptions-including exchanges-are subject to
capital gains tax. A capital gain or loss is the difference between the cost of
your shares and the price you receive when you sell them.
Whenever you sell shares of a fund, Fidelity will send you a confirmation
statement showing how many shares you sold and at what price.
You will also receive a consolidated transaction statement at least quarterly.
However, it is up to you or your tax preparer to determine whether this sale
resulted in a capital gain and, if so, the amount of tax to be paid. BE SURE TO
KEEP YOUR REGULAR ACCOUNT STATEMENTS; the information they contain will be
essential in calculating the amount of your capital gains.
"BUYING A DIVIDEND." If you buy shares when a class has realized but not yet
distributed income or capital gains, you will pay the full price for the shares
and then receive a portion of the price back in the form of a taxable
distribution.
CURRENCY CONSIDERATIONS. For funds that can invest in foreign securities, if a
fund's dividends exceed its taxable income in any year, which is sometimes the
result of currency-related losses, all or a portion of the fund's dividends may
be treated as a return of capital to shareholders for tax purposes. To minimize
the risk of a return of capital, a fund may adjust its dividends to take
currency fluctuations into account, which may cause the dividends to vary. Any
return of capital will reduce the cost basis of your shares, which will result
in a higher reported capital gain or a lower reported capital loss when you sell
your shares. The statement you receive in January will specify if any
distributions included a return of capital.
EFFECT OF FOREIGN TAXES. Foreign governments may impose taxes on a fund and its
investments, and these taxes generally will reduce a fund's distributions.
However, if you meet certain holding period requirements with respect to your
fund shares, an offsetting tax credit may be available to you. If you do not
meet such holding period requirements, you may still be entitled to a deduction
for certain foreign taxes. In either case, your tax statement will show more
taxable income or capital gains than were actually distributed by the fund, but
will also show the amount of the available offsetting credit or deduction.
There are tax requirements that all funds must follow in order to avoid federal
taxation. In its effort to adhere to these requirements, a fund may have to
limit its investment activity in some types of instruments.
TRANSACTION DETAILS
THE FUNDS ARE OPEN FOR BUSINESS each day the New York Stock Exchange (NYSE) is
open. FSC normally calculates each class's NAV and offering price, as
applicable, as of the close of business of the NYSE, normally 4:00 p.m. Eastern
time.
A CLASS'S NAV is the value of a single share. The NAV of each class is computed
by adding that class's pro rata share of the value of the applicable fund's
investments, cash, and other assets, subtracting that class's pro rata share of
the value of the applicable fund's liabilities, subtracting the liabilities
allocated to that class, and dividing the result by the number of shares of that
class that are outstanding.
Each fund's assets are valued primarily on the basis of market quotations or on
the basis of information furnished by a pricing service. Short-term securities
with remaining maturities of sixty days or less for which quotations and
information furnished by a pricing service are not readily available are valued
on the basis of amortized cost. This method minimizes the effect of changes in a
security's market value. Foreign securities are valued on the basis of
quotations from the primary market in which they are traded, and are translated
from the local currency into U.S. dollars using current exchange rates. In
addition, if quotations and information furnished by a pricing service are not
readily available, or if the values have been materially affected by events
occurring after the closing of a foreign market, assets may be valued by another
method that the Board of Trustees believes accurately reflects fair value.
THE OFFERING PRICE of Class A or Class T is its NAV divided by the difference
between one and the applicable front-end sales charge percentage. Class A has a
maximum front-end sales charge of 5.75% of the offering price for the Equity
Funds; 4.75% of the offering price for the Bond Funds; 3.75% of the offering
price for the Intermediate-Term Bond Funds; and 1.50% of the offering price for
the Short-Term Bond Funds. Class T has a maximum front-end sales charge of 3.50%
of the offering price for the Equity Funds and the Bond Funds; 2.75% of the
offering price for the Intermediate-Term Bond Funds; and 1.50% of the offering
price for the Short-Term Bond Funds.
<TABLE>
<CAPTION>
SALES CHARGES AND INVESTMENT PROFESSIONAL
CONCESSIONS - CLASS A
EQUITY FUNDS: Sales Charge:
As a % of As an Investment
Offering Price approximate % Professional
of Net Amount Concession as % of
Invested Offering Price
<S> <C> <C> <C>
Up to $49,999 5.75% 6.10% 5.00%
$50,000 to $99,999 4.50% 4.71% 3.75%
$100,000 to $249,999 3.50% 3.63% 2.75%
$250,000 to $499,999 2.50% 2.56% 2.00%
$500,000 to $999,999 2.00% 2.04% 1.75%
$1,000,000 to $24,999,999 1.00% 1.01% 0.75%
$25,000,000 or more None* None* *
</TABLE>
* SEE SECTION ENTITLED FINDER'S FEE.
<PAGE>
<TABLE>
<CAPTION>
BOND FUNDS: Sales Charge: Investment
Professional
Concession as % of
Offering Price
As a % of As an
Offering Price approximate %
of Net Amount
Invested
<S> <C> <C> <C>
Up to $49,999 4.75% 4.99% 4.25%
$50,000 to $99,999 4.50% 4.71% 4.00%
$100,000 to $249,999 3.50% 3.63% 3.00%
$250,000 to $499,999 2.50% 2.56% 2.25%
$500,000 to $999,999 2.00% 2.04% 1.75%
$1,000,000 to $24,999,999 0.50% 0.50% 0.50%
$25,000,000 or more None* None* *
<FN>
* SEE SECTION ENTITLED FINDER'S FEE.
</TABLE>
<TABLE>
<CAPTION>
INTERMEDIATE-TERM Sales Charge: Investment
BOND FUNDS: Professional
Concession as % of
Offering Price
As a % of As an
Offering Price approximate %
of Net Amount
Invested
<S> <C> <C> <C>
Up to $49,999 3.75% 3.91% 3.00%
$50,000 to $99,999 3.00% 3.10% 2.25%
$100,000 to $249,999 2.25% 2.30% 1.75%
$250,000 to $499,999 1.75% 1.78% 1.50%
$500,000 to $999,999 1.50% 1.52% 1.25%
$1,000,000 to $24,999,999 0.50% 0.50% 0.50%
$25,000,000 or more None* None* *
</TABLE>
<TABLE>
<CAPTION>
SHORT-TERM BOND FUNDS: Sales Charge:
Investment
As an Professional
approximate % Concession as % of
As a % of of Net Amount Concession as % of
Offering Price Invested Offering Price
<S> <C> <C> <C>
Up to $499,999 1.50% 1.52% 1.25%
$500,000 to $999,999 1.00% 1.01% 0.75%
$1,000,000 or more None* None* *
</TABLE>
<TABLE>
<CAPTION>
SALES CHARGES AND INVESTMENT PROFESSIONAL
CONCESSIONS - CLASS T
EQUITY FUNDS: Sales Charge: Investment
Professional
Concession as % of
Offering Price
As a % of As an
Offering Price approximate %
of Net Amount
Invested
<S> <C> <C> <C>
Up to $49,999 3.50% 3.63% 3.00%
$50,000 to $99,999 3.00% 3.09% 2.50%
$100,000 to $249,999 2.50% 2.56% 2.00%
$250,000 to $499,999 1.50% 1.52% 1.25%
$500,000 to $999,999 1.00% 1.01% 0.75%
$1,000,000 or more None* None* *
</TABLE>
<TABLE>
<CAPTION>
BOND FUNDS: Sales Charge: Investment
Professional
Concession as % of
Offering Price
As a % of As an
Offering Price approximate %
of Net Amount
Invested
<S> <C> <C> <C>
Up to $49,999 3.50% 3.63% 3.00%
$50,000 to $99,999 3.00% 3.09% 2.50%
$100,000 to $249,999 2.50% 2.56% 2.00%
$250,000 to $499,999 1.50% 1.52% 1.25%
$500,000 to $999,999 1.00% 1.01% 0.75%
$1,000,000 or more None* None* *
</TABLE>
<TABLE>
<CAPTION>
INTERMEDIATE-TERM Sales Charge: Investment
BOND FUNDS: Professional
Concession as % of
Offering Price
As a % of As an
Offering Price approximate %
of Net Amount
Invested
<S> <C> <C> <C>
Up to $49,999 2.75% 2.83% 2.25%
$50,000 to $99,999 2.25% 2.30% 2.00%
$100,000 to $249,999 1.75% 1.78% 1.50%
$250,000 to $499,999 1.50% 1.52% 1.25%
$500,000 to $999,999 1.00% 1.01% 0.75%
$1,000,000 or more None* None* *
</TABLE>
<TABLE>
<CAPTION>
SHORT-TERM BOND FUNDS: Sales Charge: Investment
Professional
Concession as % of
Offering Price
As a % of As an
Offering Price approximate %
of Net Amount
Invested
<C> <S> <S> <S>
Up to $499,999 1.50% 1.52% 1.25%
$500,000 to $999,999 1.00% 1.01% 0.75%
$1,000,000 or more None* None* *
<FN>
* SEE SECTION ENTITLED FINDER'S FEE.
</TABLE>
FINDER'S FEE. For all funds except the Short-Term Bond Funds, on eligible
purchases of (i) Class A shares in amounts of $1 million or more that qualify
for a Class A load waiver, (ii) Class A shares in amounts of $25 million or
more, or (iii) Class T shares in amounts of $1 million or more, investment
professionals will be compensated with a fee at the rate of 0.25% of the
purchase amount. For the Short-Term Bond Funds, on eligible purchases of Class A
or Class T shares in amounts of $1 million or more, investment professionals
will be compensated with a fee at the rate of 0.25% of the purchase amount.
Any assets on which a finder's fee has been paid will bear a CDSC (Class A or
Class T CDSC) if they do not remain in Class A or Class T shares of the Fidelity
Advisor funds, or Daily Money Class shares of Treasury Fund, Prime Fund, or
Tax-Exempt Fund, for a period of at least one uninterrupted year. The Class A or
Class T CDSC will be 0.25% of the lesser of the cost of the Class A or Class T
shares, as applicable, at the initial date of purchase or the value of the Class
A or Class T shares, as applicable, at redemption, not including any reinvested
dividends or capital gains. Class A and Class T shares acquired through
distributions (dividends or capital gains) will not be subject to a Class A or
Class T CDSC. In determining the
<PAGE>
applicability and rate of any Class A or Class T CDSC at redemption, Class A or
Class T shares representing reinvested dividends and capital gains, if any, will
be redeemed first, followed by those Class A or Class T shares that have been
held for the longest period of time. Shares held by an insurance company
separate account will be aggregated at the client (e.g., the contract holder or
plan sponsor) level, not at the separate account level. Upon request, anyone
claiming eligibility for the 0.25% fee with respect to shares held by an
insurance company separate account must provide FDC access to records detailing
purchases at the client level.
With respect to employee benefit plans, the Class A or Class T CDSC does not
apply to the following types of redemptions: (i) plan loans or distributions or
(ii) exchanges to non-Advisor fund investment options. With respect to
Individual Retirement Accounts, the Class A or Class T CDSC does not apply to
redemptions made for disability, payment of death benefits, or required partial
distributions starting at age 70. Your investment professional should advise
Fidelity at the time your redemption order is placed if you qualify for a waiver
of the Class A or Class T CDSC.
CONTINGENT DEFERRED SALES CHARGE. Class B shares may, upon redemption, be
assessed a CDSC based on the following schedule:
EQUITY FUNDS:
From Date of Purchase Contingent Deferred
Sales Charge
Less than 1 year 5%
1 year to less than 2 years 4%
2 years to less than 3 years 3%
3 years to less than 4 years 3%
4 years to less than 5 years 2%
5 years to less than 6 years 1%
6 years to less than 7 years [A] 0%
BOND FUNDS:
From Date of Purchase Contingent Deferred
Sales Charge
Less than 1 year 5%
1 year to less than 2 years 4%
2 years to less than 3 years 3%
3 years to less than 4 years 3%
4 years to less than 5 years 2%
5 years to less than 6 years 1%
6 years to less than 7 years [A] 0%
INTERMEDIATE-TERM BOND FUNDS:
From Date Of Purchase Contingent Deferred
Sales Charge
Less than 1 year 3%
1 year to less than 2 years 2%
2 years to less than 3 years 1%
3 years to less than 4 years [B] 0%
[A] AFTER A HOLDING PERIOD OF SEVEN YEARS, CLASS B SHARES WILL CONVERT
AUTOMATICALLY TO CLASS A SHARES OF THE SAME FIDELITY ADVISOR FUND. SEE
"CONVERSION FEATURE" BELOW FOR MORE INFORMATION.
[B] AFTER A HOLDING PERIOD OF FOUR YEARS, CLASS B SHARES WILL CONVERT
AUTOMATICALLY TO CLASS A SHARES OF THE SAME FIDELITY ADVISOR FUND. SEE
"CONVERSION FEATURE" BELOW FOR MORE INFORMATION.
When exchanging Class B shares of one fund for Class B shares of another
Fidelity Advisor fund or Advisor B Class shares of Treasury Fund, your Class B
shares retain the CDSC schedule in effect when they were originally purchased.
At the time of sale, investment professionals with whom FDC has agreements
receive as compensation from FDC a concession equal to 4.00% (2.00% for the
Intermediate-Term Bond Funds) of your purchase of Class B shares.
Class C shares may, upon redemption within one year of purchase, be assessed a
CDSC of 1.00%.
At the time of sale, investment professionals with whom FDC has agreements
receive as compensation from FDC a concession equal to 1.00% of your purchase of
Class C shares.
The CDSC for Class B and Class C shares will be calculated based on the lesser
of the cost of the Class B or Class C shares, as applicable, at the initial date
of purchase or the value of those Class B or Class C shares, as applicable, at
redemption, not including any reinvested dividends or capital gains. Class B and
Class C shares acquired through distributions (dividends or capital gains) will
not be subject to a CDSC. In determining the applicability and rate of any CDSC
at redemption, Class B or Class C shares representing reinvested dividends and
capital gains, if any, will be redeemed first, followed by those Class B or
Class C shares that have been held for the longest period of time.
CONVERSION FEATURE. After a holding period of seven years (four years for the
Intermediate-Term Bond Funds) from the initial date of purchase, Class B shares
and any capital appreciation associated with those shares, convert automatically
to Class A shares of the same Fidelity Advisor fund. Conversion to Class A
shares will be made at NAV. At the time of conversion, a portion of the Class B
shares purchased through the reinvestment of dividends or capital gains
(Dividend Shares) will also convert to Class A shares. The portion of Dividend
Shares that will convert is determined by the ratio of your converting Class B
non-Dividend Shares to your total Class B non-Dividend Shares. For more
information about the CDSC, including the conversion feature and the permitted
circumstances for CDSC waivers, contact your investment professional.
REINSTATEMENT PRIVILEGE. If you have sold all or part of your Class A, Class T,
Class B, or Class C shares of a fund, you may reinvest an amount equal to all or
a portion of the redemption proceeds in the same class of the fund or any of the
other Fidelity Advisor funds, at the NAV next determined after receipt in
proper form of your investment order, provided that such reinvestment is
made within 90 days of redemption. Under these circumstances, the dollar amount
of the CDSC, if any, you paid on Class A, Class T, Class B, or Class C shares
will be reimbursed to you by reinvesting that amount in Class A, Class T, Class
B, or Class C shares, as applicable. You must reinstate your shares into an
account with the same registration. This privilege may be exercised only once by
a shareholder with respect to a fund and certain restrictions may apply. For
purposes of the CDSC holding period schedule, the
<PAGE>
holding period of your Class A, Class T, Class B, or Class C shares will
continue as if the shares had not been redeemed.
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 a fund to withhold 31% of
your taxable distributions and redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE OR ELECTRONICALLY. Fidelity will
not be responsible for any losses resulting from unauthorized transactions if it
follows reasonable security procedures designed to verify the identity of the
investor. Fidelity will request personalized security codes or other
information, and may also record calls. For transactions conducted through the
Internet, Fidelity recommends the use of an Internet browser with 128-bit
encryption. 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 Fidelity for instructions. Additional documentation
may be required from corporations, associations, and certain fiduciaries.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during periods of
unusual market activity), consider placing your order by mail.
EACH FUND RESERVES THE RIGHT to suspend the offering of shares for a
period of time.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your shares will be purchased at the next
offering price or NAV, as applicable, calculated after your order is received in
proper form. Note the following:
(small solid bullet) All of your purchases must be made in U.S. dollars and
checks must be drawn on U.S. banks.
(small solid bullet) Fidelity does not accept cash.
(small solid bullet) When making a purchase with more than one check, each check
must have a value of at least $50.
(small solid bullet) Each fund reserves the right to limit the number of checks
processed at one time.
(small solid bullet) If your check does not clear, your purchase will be
canceled and you could be liable for any losses or fees a fund or Fidelity has
incurred.
(small solid bullet) Automated Purchase Orders: For shares of the Bond Funds,
the Intermediate-Term Bond Funds, and the Short-Term Bond Funds, you begin to
earn dividends as of the day your funds are received.
(small solid bullet) Other Purchases: For shares of the Bond Funds, the
Intermediate-Term Bond Funds, and the Short-Term Bond Funds, you begin to earn
dividends as of the first business day following the day your funds are
received.
AUTOMATED PURCHASE ORDERS. Class A, Class T, Class B, and Class C shares can be
purchased or sold through investment professionals utilizing an automated order
placement and settlement system that guarantees payment for orders on a
specified date.
CONFIRMED PURCHASES. Certain financial institutions that meet FDC's
creditworthiness criteria may enter confirmed purchase orders on behalf of
customers by phone, with payment to follow no later than close of business on
the next business day. If payment is not received by the next business day, the
order will be canceled and the financial institution will be liable for any
losses.
TO AVOID THE COLLECTION PERIOD associated with check purchases, consider buying
shares by bank wire, U.S. Postal money order, U.S. Treasury check, Federal
Reserve check, or automatic investment plans.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the next NAV
calculated after your order is received in proper form, minus any applicable
CDSC. Note the following:
(small solid bullet) Normally, redemption proceeds will be mailed to you on the
next business day, but if making immediate payment could adversely affect a
fund, it may take up to seven days to pay you.
(small solid bullet) Shares of the Bond Funds, the Intermediate-Term Bond Funds,
and the Short-Term Bond Funds will earn dividends through the date of
redemption; however, shares redeemed on a Friday or prior to a holiday will
continue to earn dividends until the next business day.
(small solid bullet) Each fund may hold payment on redemptions until it is
reasonably satisfied that investments made by check have been collected, which
can take up to seven business days.
(small solid bullet) Redemptions may be suspended or payment dates postponed
when the NYSE is closed (other than weekends or holidays), when trading on the
NYSE is restricted, or as permitted by the SEC.
(small solid bullet) If you sell shares of Short Fixed-Income and
Short-Intermediate Municipal Income by writing a check 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.
FIDELITY RESERVES THE RIGHT TO DEDUCT AN ANNUAL MAINTENANCE FEE of $12.00 from
accounts with a value of less than $2,500 (including any amount paid as a sales
charge), subject to an annual maximum charge of $60.00 per shareholder. Accounts
opened after September 30 will not be subject to the fee for that year. The fee,
which is payable to the transfer agent, is designed to offset in part the
relatively higher costs of servicing smaller accounts. The fee will not be
deducted from retirement accounts (except non-prototype retirement accounts),
accounts using a systematic investment program, certain (Network Level I and
III) accounts which are maintained through National Securities Clearing
Corporation (NSCC), or if total assets in Fidelity mutual funds exceed $50,000.
Eligibility for the $50,000 waiver is determined by aggregating Fidelity mutual
fund accounts (excluding contractual plans) maintained (i) by FIIOC and (ii)
through NSCC; provided those accounts are registered under the same primary
social security number.
IF YOUR NON-RETIREMENT ACCOUNT BALANCE FALLS BELOW $1,000, you will be given 30
days' notice to reestablish the minimum balance. If you do not increase your
balance, Fidelity reserves the right to close your account and send the proceeds
to you. Your
<PAGE>
shares will be redeemed at the NAV, minus any applicable CDSC, on the day your
account is closed.
FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing historical
account documents, that are beyond the normal scope of its services.
FDC will, at its expense, provide promotional incentives such as sales contests
and luxury trips to investment professionals who support the sale of shares of
the funds. In some instances, these incentives will 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.
EXCHANGE RESTRICTIONS As a shareholder, you have the privilege of exchanging
Class A, Class T, Class B, or Class C shares of a fund for the same class of
shares of other Fidelity Advisor funds; Class A or Class T shares for Daily
Money Class shares of Treasury Fund, Prime Fund, or Tax-Exempt Fund; Class B
shares for Advisor B Class shares of Treasury Fund; and Class C shares for
Advisor C Class shares of Treasury Fund. If you purchased your Class T shares
through certain investment professionals that have signed an agreement with FDC,
you also have the privilege of exchanging your Class T shares for shares of
Fidelity Capital Appreciation Fund. However, you should note the following:
(small solid bullet) The fund or class you are exchanging into must be available
for sale in your state.
(small solid bullet) You may only exchange between accounts that are registered
in the same name, address, and taxpayer identification number.
(small solid bullet) Before exchanging into a fund or class, read its
prospectus.
(small solid bullet) If you have held Class A or Class T shares of Short
Fixed-Income or Short-Intermediate Municipal Income for less than six months and
you exchange into Class A or Class T of another Advisor fund, you pay the
difference between that fund's Class A or Class T front-end sales charge and any
Class A or Class T front-end sales charge you may have previously paid in
connection with the shares you are exchanging.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Because excessive trading can hurt fund performance and
shareholders, each fund reserves the right to temporarily or permanently
terminate the exchange privilege of any investor who makes more than four
exchanges out of a fund per calendar year. Accounts under common ownership or
control, including accounts with the same taxpayer identification number, will
be counted together for purposes of the four exchange limit.
(small solid bullet) The exchange limit may be modified for accounts in certain
institutional retirement plans to conform to plan exchange limits and Department
of Labor regulations. See your plan materials for further information.
(small solid bullet) Each fund reserves the right to refuse exchange purchases
by any person or group if, in FMR's judgment, the fund would be unable to invest
the money effectively in accordance with its investment objective and policies,
or would otherwise potentially be adversely affected.
(small solid bullet) Your exchanges may be restricted or refused if a 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 a fund.
(small solid bullet) Any exchanges of Class A, Class T, Class B, or Class C
shares are not subject to a CDSC.
Although the funds will attempt to give you prior notice whenever they are
reasonably able to do so, they may impose these restrictions at any time. The
funds reserve the right to terminate or modify these exchange privileges in the
future.
OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may impose trading
fees of up to 1.00% of the amount exchanged. Check each fund's prospectus for
details.
SALES CHARGE REDUCTIONS AND WAIVERS
If your purchase qualifies for one of the following sales charge reduction
plans, the front-end sales charge will be reduced for purchases of Class A and
Class T shares according to the Sales Charge schedule beginning on page . Please
refer to the funds' SAI for more details about each plan or call your investment
professional.
If you purchased your shares through a broker-dealer or insurance
representative, call 1-800-522-7297. If you purchased your shares through a bank
representative, call 1-800-843-3001.
Your purchases and existing balances of Class A, Class T, Class B, and Class C
shares may be included in the following programs for purposes of qualifying for
a Class A or Class T front-end sales charge reduction.
QUANTITY DISCOUNTS apply to purchases of Class A or Class T shares of a single
Fidelity Advisor fund or to combined purchases of (i) Class A, Class T, Class B,
and Class C shares of any Fidelity Advisor fund, (ii) Advisor B Class shares and
Advisor C Class shares of Treasury Fund, and (iii) Daily Money Class shares of
Treasury Fund, Prime Fund, and Tax-Exempt Fund acquired by exchange from any
Fidelity Advisor fund. The minimum investment eligible for a quantity discount
is $50,000, except that the minimum investment for the Short-Term Bond Funds is
$500,000.
To qualify for a quantity discount, investing in a fund's Class A, Class T,
Class B, and Class C shares for several accounts at the same time will be
considered a single transaction (Combined Purchase), as long as shares are
purchased through one investment professional and the total is at least $50,000
(or at least $500,000 for the Short-Term Bond Funds).
RIGHTS OF ACCUMULATION let you determine your front-end sales charge on Class A
and Class T shares by adding to your new purchase of Class A and Class T shares
the value of all of the Fidelity Advisor fund Class A, Class T, Class B, and
Class C shares held by you, your spouse, and your children under age 21. You can
also add the value of Advisor B Class shares and Advisor C Class shares of
Treasury Fund, and Daily Money Class shares of Treasury
<PAGE>
Fund, Prime Fund, and Tax-Exempt Fund acquired by exchange from any Fidelity
Advisor fund.
A LETTER OF INTENT (Letter) lets you receive the same reduced front-end sales
charge on purchases of Class A and Class T shares made during a 13-month period
as if the total amount invested during the period had been invested in a single
lump sum (see Quantity Discounts above). Purchases of Class B and Class C shares
during the 13-month period will count toward the completion of your Letter. You
must file your non-binding Letter with Fidelity within 90 days of the start of
your purchases. Your initial investment must be at least 5% of the amount you
plan to invest. Out of the initial investment, Class A or Class T shares equal
to 5% of the dollar amount specified in your Letter will be registered in your
name and held in escrow. You will earn income dividends and capital gain
distributions on escrowed Class A and Class T shares. Reinvested income and
capital gain distributions do not count toward the completion of your Letter.
The escrow will be released when your purchase of the total amount has been
completed. You are not obligated to complete your Letter, and in such a case,
sufficient escrowed Class A or Class T shares will be redeemed to pay any
applicable front-end sales charges.
A FRONT-END SALES CHARGE WILL NOT APPLY TO THE FOLLOWING CLASS A SHARES:
1. Purchased for an insurance company separate account used to fund annuity
contracts for employee benefit plans;
2. Purchased by a trust institution or bank trust department for a managed
account that is charged an asset-based fee. Employee benefit plans and accounts
managed by third parties do not qualify for this waiver;
3. Purchased by a broker-dealer for a managed account that is charged an
asset-based fee. Employee benefit plans do not qualify for this waiver;
4. Purchased by a registered investment advisor that is not part of an
organization primarily engaged in the brokerage business for an account that is
managed on a discretionary basis and is charged an asset-based fee. Employee
benefit plans do not qualify for this waiver;
5. Purchased for an employee benefit plan that has $25 million or more in plan
assets; or
6. Purchased prior to December 31, 1998 by shareholders who have closed their
Class A Municipal Bond, Class A California Municipal Income, or Class A New York
Municipal Income accounts prior to December 31, 1997. This waiver is limited to
purchases of up to $10,000; shareholders are entitled to this waiver after the
original load waiver certificate is received in proper form by FIIOC.
A FRONT-END SALES CHARGE WILL NOT APPLY TO THE FOLLOWING CLASS T SHARES:
1. Purchased for an insurance company separate account used to fund annuity
contracts for employee benefit plans;
2. Purchased by a trust institution or bank trust department for a managed
account that is charged an asset-based fee. Accounts managed by third parties do
not qualify for this waiver;
3. Purchased by a broker-dealer for a managed account that is charged an
asset-based fee;
4. Purchased by a registered investment advisor that is not part of an
organization primarily engaged in the brokerage business for an account that is
managed on a discretionary basis and is charged an asset-based fee;
5. Purchased for an employee benefit plan;
6. Purchased for a Fidelity or Fidelity Advisor account with the proceeds of a
distribution from (i) an insurance company separate account used to fund annuity
contracts for employee benefit plans that are invested in Fidelity Advisor or
Fidelity funds, or (ii) an employee benefit plan that is invested in Fidelity
Advisor or Fidelity funds. (Distributions other than those transferred to an IRA
account must be transferred directly into a Fidelity account.);
7. Purchased for any state, county, or city, or any governmental
instrumentality, department, authority or agency;
8. Purchased with redemption proceeds from other mutual fund complexes on which
you have previously paid a front-end sales charge or CDSC;
9. Purchased by a current or former trustee or officer of a Fidelity fund
or a current or retired officer, director or regular employee of FMR Corp. or
FIL or their 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;
10. Purchased by a charitable organization (as defined for purposes of Section
501(c)(3) of the Internal Revenue Code) investing $100,000 or more;
11. Purchased by a bank trust officer, registered representative, or other
employee (or a member of one of their immediate families) of investment
professionals having agreements with FDC;
12. Purchased for a charitable remainder trust or life income pool established
for the benefit of a charitable organization (as defined for purposes of Section
501(c)(3) of the Internal Revenue Code);
13. Purchased with distributions of income, principal, and capital gains from
Fidelity Defined Trusts; or
14. Purchased prior to December 31, 1998 by shareholders who have closed their
Class T Municipal Bond, Class T California Municipal Income, or Class T New York
Municipal Income accounts prior to December 31, 1997. This waiver is limited to
purchases of up to $10,000; shareholders are entitled to this waiver after the
original load waiver certificate is received in proper form by FIIOC.
You must notify FDC in advance if you qualify for a front-end sales charge
waiver. Employee benefit plan investors must meet additional requirements
specified in the funds' SAI.
<PAGE>
If you are investing through an insurance company separate account, if you are
investing through a trust department, if your are investing through an account
managed by a broker-dealer, or if you have authorized an investment adviser to
make investment decisions for you, you may qualify to purchase Class A shares
without a sales charge (as described in (1), (2), (3) and (4) on the previous
page ), Class T shares without a sales charge (as described in (1), (2), (3)
and (4) on the previous page ), or Institutional Class shares. Because
Institutional Class shares have no sales charge, and do not pay a 12b-1 fee,
Institutional Class shares are expected to have a higher total return than Class
A, Class T, Class B, and Class C shares. Contact your investment professional to
discuss if you qualify.
THE CDSC ON CLASS B AND CLASS C SHARES MAY BE WAIVED:
1. In cases of disability or death, provided that the shares are redeemed within
one year following the death or the initial determination of disability;
2. In connection with a total or partial redemption related to certain
distributions from retirement plans or accounts at age 701/2, which are
permitted without penalty pursuant to the Internal Revenue Code;
3. In connection with redemptions through the Fidelity Advisor Systematic
Withdrawal Program; or
4. (APPLICABLE TO CLASS C ONLY) In connection with any redemptions from an
employee benefit plan. Employee benefit plan investors must meet additional
requirements specified in the funds' SAI.
Your investment professional should call Fidelity for more information.
No dealer, sales representative, or any other person has been authorized to give
any information or to make any representations, other than those contained in
this Prospectus and in the related SAI, in connection with the offer contained
in this Prospectus. If given or made, such other information or representations
must not be relied upon as having been authorized by the funds or FDC. This
Prospectus and the related SAI do not constitute an offer by the funds or by FDC
to sell or to buy shares of the funds to any person to whom it is unlawful to
make such offer.
APPENDIX A
DESCRIPTION OF MOODY'S INVESTORS SERVICE RATINGS OF CORPORATE BONDS
Moody's ratings for obligations with an original remaining maturity in excess of
one year fall within nine categories. They range from Aaa (highest quality) to C
(lowest quality). Moody applies numerical modifiers of 1, 2, or 3 to each
generic rating classification from Aa through B. The modifier 1 indicates that
the security ranks in the higher end of its generic rating category; the
modifier 2 indicates a mid-range ranking; and the modifier 3 indicates that the
issue ranks on the lower end of its generic rating category.
AAA - Bonds that are 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
edged." 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 that are rated Aa are judged to be of high quality by all standards.
Together with the 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 the Aaa securities.
A - Bonds that are 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 that are 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 that are 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 over the future. Uncertainty of position
characterizes bonds in this class.
B - Bonds that are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
CAA - Bonds that are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
CA - Bonds that are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked
short-comings.
C - Bonds that are rated C are the lowest-rated class of bonds and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
DESCRIPTION OF STANDARD & POOR'S RATINGS OF CORPORATE BONDS
Debt issues may be designated by Standard & Poor's as either investment grade
("AAA" through "BBB") or speculative grade ("BB" through "D"). While speculative
grade debt will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major exposures to adverse conditions.
<PAGE>
Ratings from AA to CCC may be modified by the addition of a plus sign (+) or
minus sign (-) to show relative standing within the major rating categories.
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 higher-rated 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 than debt in higher rated categories.
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 BB
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied BBB- rating.
B - Debt rated B has a greater vulnerability to default but currently has the
capacity to meet interest payments and principal repayments. Adverse business,
financial, or economic conditions will likely impair capacity or willingness to
pay interest and repay principal. The B rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied BB or BB-
rating.
CCC - Debt rated CCC has a currently identifiable vulnerability to default, and
is dependent upon favorable business, financial, and economic conditions to meet
timely payment of interest and repayment of principal. In the event of adverse
business, financial, or economic conditions, it is not likely to have the
capacity to pay interest and repay principal. The CCC rating category is also
used for debt subordinated to senior debt that is assigned an actual or implied
B or B- rating.
CC - Debt rated CC is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC debt rating.
C - The rating C is typically applied to debt subordinated to senior debt which
is assigned an actual or implied CCC- debt rating. The C rating may be used to
cover a situation where a bankruptcy petition has been filed but debt service
payments are continued.
CI - The rating CI is reserved for income bonds on which no interest is being
paid.
D - Debt rated D is in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due even if the
applicable grace period has not expired, unless S&P believes that such payments
will be made during such grace period. The D rating will also be used upon the
filing of a bankruptcy petition if debt service payments are jeopardized.
<PAGE>
APPENDIX B TECHNOQUANT GROWTH - CLASS A
<TABLE>
<CAPTION>
Calendar year total returns+ 1997
<S> <C>
TECHNOQUANT GROWTH - CLASS A 12.12%
Lipper Capital Appreciation Funds Average A 20.36%
S&P 500 33.36%
Consumer Price Index 1.70%
</TABLE>
MID CAP - CLASS A
<TABLE>
<CAPTION>
Calendar year total returns+ 1997
<S> <C>
MID CAP - CLASS A 27.36%
Lipper Mid Cap Funds Average B 19.63%
S&P 400 32.25%
Consumer Price Index 1.70%
</TABLE>
EQUITY GROWTH - CLASS A
<TABLE>
<CAPTION>
Calendar year total returns+ 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
EQUITY GROWTH - CLASS A 15.57% 44.84% 6.93% 64.71% 9.89% 14.85% -0.89% 39.14% 16.21% 23.89%
Lipper Growth Funds Average C 14.79% 26.91% -4.49% 36.70% 8.08% 10.63% -2.17% 30.79% 19.24% 25.30%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
(LARGE SOLID BOX) EQUITY GROWTH - CLASS A
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 14.51
ROW: 2, COL: 1, VALUE: -0.5700000000000001
ROW: 3, COL: 1, VALUE: 15.57
ROW: 4, COL: 1, VALUE: 44.84
ROW: 5, COL: 1, VALUE: 6.930000000000001
ROW: 6, COL: 1, VALUE: 64.71000000000001
ROW: 7, COL: 1, VALUE: 9.890000000000001
ROW: 8, COL: 1, VALUE: 14.85
ROW: 9, COL: 1, VALUE: -0.8900000000000001
ROW: 10, COL: 1, VALUE: 39.14
ROW: 11, COL: 1, VALUE: 16.21
ROW: 12, COL: 1, VALUE: 23.89
GROWTH OPPORTUNITIES - CLASS A
<PAGE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1988 1989 1990 1991 1992
<S> <C> <C> <C> <C> <C>
GROWTH OPPORTUNITIES - CLASS A 33.28% 24.14% -1.65% 42.68% 15.03%
Lipper Growth Funds AverageC 14.79% 26.91% -4.49% 36.70% 8.08%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90%
</TABLE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C>
GROWTH OPPORTUNITIES - CLASS A 22.17% 2.86% 33.04% 17.69% 28.73%
Lipper Growth Funds Average C 10.63% -2.17% 30.79% 19.24% 25.30%
S&P 500 10.08% 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: NIL
ROW: 3, COL: 1, VALUE: 33.28
ROW: 4, COL: 1, VALUE: 24.14
ROW: 5, COL: 1, VALUE: -1.65
ROW: 6, COL: 1, VALUE: 42.68
ROW: 7, COL: 1, VALUE: 15.03
ROW: 8, COL: 1, VALUE: 22.17
ROW: 9, COL: 1, VALUE: 2.86
ROW: 10, COL: 1, VALUE: 33.04
ROW: 11, COL: 1, VALUE: 17.69
ROW: 12, COL: 1, VALUE: 28.73
(LARGE SOLID BOX) GROWTH OPPORTUNITIES - CLASS A
STRATEGIC OPPORTUNITIES - CLASS A
<TABLE>
<CAPTION>
Calendar year total returns+ 1988 1989 1990 1991 1992
<S> <C> <C> <C> <C> <C>
STRATEGIC OPPORTUNITIES - CLASS A 22.25% 32.60% -7.17% 23.08% 12.87%
Lipper Capital Appreciation FundsA 14.09% 26.60% -8.24% 39.91% 8.78%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90%
</TABLE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C>
STRATEGIC OPPORTUNITIES - CLASS A 20.44% -7.17% 38.16% 1.53% 25.92%
Lipper Capital Appreciation Funds A 15.68% -3.38% 30.34% 16.31% 20.36%
S&P 500 10.08% 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 27.92
ROW: 2, COL: 1, VALUE: -6.33
ROW: 3, COL: 1, VALUE: 22.25
ROW: 4, COL: 1, VALUE: 32.6
ROW: 5, COL: 1, VALUE: -7.17
ROW: 6, COL: 1, VALUE: 23.08
ROW: 7, COL: 1, VALUE: 12.87
ROW: 8, COL: 1, VALUE: 20.44
ROW: 9, COL: 1, VALUE: -7.17
ROW: 10, COL: 1, VALUE: 38.16
ROW: 11, COL: 1, VALUE: 1.53
ROW: 12, COL: 1, VALUE: 25.92
(LARGE SOLID BOX) STRATEGIC OPPORTUNITIES - CLASS A
LARGE CAP - CLASS A
<TABLE>
<CAPTION>
Calendar year total returns+ 1997
<S> <C>
LARGE CAP - CLASS A 23.76%
Lipper Growth Funds Average C 25.30%
S&P 500 33.36%
Consumer Price Index 1.70%
</TABLE>
<PAGE>
GROWTH & INCOME - CLASS A
<TABLE>
<CAPTION>
Calendar year total returns+ 1997
<S> <C>
GROWTH & INCOME - CLASS A 28.00%
Lipper Growth & Income Funds Average D 27.14%
S&P 500 33.36%
Consumer Price Index 1.70%
</TABLE>
EQUITY INCOME - CLASS A
<TABLE>
<CAPTION>
Calendar year total returns+ 1988 1989 1990 1991 1992
<S> <C> <C> <C> <C> <C>
EQUITY INCOME - CLASS A 23.23% 18.43% -14.28% 29.81% 14.68%
Lipper Equity Income Funds Average E 16.74% 22.18% -6.78% 26.86% 9.77%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90%
</TABLE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C>
EQUITY INCOME - CLASS A 18.03% 6.46% 32.55% 14.47% 25.85%
Lipper Equity Income Funds Average E 13.66% -2.54% 30.17% 18.85% 27.51%
S&P 500 10.08% 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
(LARGE SOLID BOX) EQUITY INCOME - CLASS A
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 17.44
ROW: 2, COL: 1, VALUE: -2.24
ROW: 3, COL: 1, VALUE: 23.23
ROW: 4, COL: 1, VALUE: 18.43
ROW: 5, COL: 1, VALUE: -14.28
ROW: 6, COL: 1, VALUE: 29.81
ROW: 7, COL: 1, VALUE: 14.68
ROW: 8, COL: 1, VALUE: 18.03
ROW: 9, COL: 1, VALUE: 6.46
ROW: 10, COL: 1, VALUE: 32.55
ROW: 11, COL: 1, VALUE: 14.47
ROW: 12, COL: 1, VALUE: 25.85
BALANCED - CLASS A
<TABLE>
<CAPTION>
Calendar year total returns+ 1988 1989 1990 1991 1992 1993
<S> <C> <C> <C> <C> <C> <C>
BALANCED - CLASS A 20.89% 24.60% -2.94% 34.48% 9.20% 19.66%
Lipper Balanced Funds Average F 12.34% 19.57% -0.57% 26.69% 7.07% 10.91%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62% 10.08%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75%
</TABLE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1994 1995 1996 1997
<S> <C> <C> <C> <C>
BALANCED - CLASS A -5.09% 14.06% 8.31% 22.10%
Lipper Balanced Funds Average F -2.50% 25.16% 13.76% 19.00%
S&P 500 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 2.67% 2.54% 3.32% 1.70%
</TABLE>
(LARGE SOLID BOX) BALANCED - CLASS A
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: NIL
ROW: 3, COL: 1, VALUE: 20.89
ROW: 4, COL: 1, VALUE: 24.6
ROW: 5, COL: 1, VALUE: -2.94
ROW: 6, COL: 1, VALUE: 34.48
ROW: 7, COL: 1, VALUE: 9.199999999999999
ROW: 8, COL: 1, VALUE: 19.66
ROW: 9, COL: 1, VALUE: -5.09
ROW: 10, COL: 1, VALUE: 14.06
ROW: 11, COL: 1, VALUE: 8.310000000000001
ROW: 12, COL: 1, VALUE: 22.1
HIGH YIELD - CLASS A
<PAGE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1988 1989 1990 1991 1992
<S> <C> <C> <C> <C> <C>
HIGH YIELD - CLASS A 17.24% 3.64% 7.30% 34.94% 23.09%
Lipper High Current Yield Funds AverageG 12.89% -0.58% -10.13% 36.91% 17.51%
Merrill Lynch High Yield Master Index 13.47% 4.23% -4.35% 34.58% 18.16%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90%
</TABLE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C>
HIGH YIELD - CLASS A 20.45% -1.49% 19.27% 13.05% 15.07%
Lipper High Current Yield Funds AverageG 18.95% -3.85% 16.43% 13.67% 12.96%
Merrill Lynch High Yield Master Index 17.18% -1.17% 19.91% 11.06% 12.82%
Consumer Price Index 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
(LARGE SOLID BOX) HIGH YIELD - CLASS A
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: NIL
ROW: 3, COL: 1, VALUE: 17.24
ROW: 4, COL: 1, VALUE: 3.64
ROW: 5, COL: 1, VALUE: 7.3
ROW: 6, COL: 1, VALUE: 34.94
ROW: 7, COL: 1, VALUE: 23.09
ROW: 8, COL: 1, VALUE: 20.45
ROW: 9, COL: 1, VALUE: -1.49
ROW: 10, COL: 1, VALUE: 19.27
ROW: 11, COL: 1, VALUE: 13.05
ROW: 12, COL: 1, VALUE: 15.07
STRATEGIC INCOME - CLASS A
<TABLE>
<CAPTION>
Calendar year total returns+ 1995 1996 1997
<S> <C> <C> <C>
STRATEGIC INCOME - CLASS A 22.02% 12.81% 9.24%
Lipper Multi-Sector Income Funds AverageH 16.92% 11.74% 8.77%
Merrill Lynch High Yield Master Index 19.91% 11.06% 12.82%
Consumer Price Index 2.54% 3.32% 1.70%
</TABLE>
(LARGE SOLID BOX) STRATEGIC INCOME - CLASS A
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 0.0
ROW: 2, COL: 1, VALUE: 0.0
ROW: 3, COL: 1, VALUE: 0.0
ROW: 4, COL: 1, VALUE: 0.0
ROW: 5, COL: 1, VALUE: 0.0
ROW: 6, COL: 1, VALUE: 0.0
ROW: 7, COL: 1, VALUE: 0.0
ROW: 8, COL: 1, VALUE: 22.02
ROW: 9, COL: 1, VALUE: 12.81
ROW: 10, COL: 1, VALUE: 9.239999999999998
MORTGAGE SECURITIES - CLASS A
<TABLE>
<CAPTION>
Calendar year total returns+ 1988 1989 1990 1991 1992
<S> <C> <C> <C> <C> <C>
MORTGAGE SECURITIES - CLASS A 6.72% 13.64% 10.36% 13.61% 5.45%
Lipper U.S. Mortgage Funds AverageI 7.47% 12.71% 9.52% 15.00% 6.38%
Lehman Brothers Mortgage-Backed 8.72% 15.35% 10.72% 15.72% 6.97%
Securities Index
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90%
</TABLE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C>
MORTGAGE SECURITIES - CLASS A 6.71% 1.94% 17.02% 5.43% 8.87%
Lipper U.S. Mortgage Funds AverageI 7.58% -4.83% 16.29% 3.87% 8.58%
Lehman Brothers Mortgage-Backed 6.84% -1.61% 16.80% 5.35% 9.49%
Securities Index
Consumer Price Index 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
(LARGE SOLID BOX) MORTGAGE SECURITIES - CLASS A
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 2.7
ROW: 2, COL: 1, VALUE: 6.72
ROW: 3, COL: 1, VALUE: 13.64
ROW: 4, COL: 1, VALUE: 10.36
ROW: 5, COL: 1, VALUE: 13.61
ROW: 6, COL: 1, VALUE: 5.45
ROW: 7, COL: 1, VALUE: 6.71
ROW: 8, COL: 1, VALUE: 1.94
ROW: 9, COL: 1, VALUE: 17.02
ROW: 10, COL: 1, VALUE: 5.430000000000001
ROW: 11, COL: 1, VALUE: 8.870000000000001
GOVERNMENT INVESTMENT - CLASS A
<PAGE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1988 1989 1990 1991 1992 1993
<S> <C> <C> <C> <C> <C> <C>
GOVERNMENT INVESTMENT - CLASS A 6.57% 11.75% 8.37% 13.45% 6.48% 9.36%
Lipper General U.S. Government Bond 6.67% 12.46% 8.22% 14.44% 6.41% 9.42%
Funds Average J
Lehman Brothers Government Bond Index 7.03% 14.22% 8.72% 15.32% 7.23% 10.66%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75%
</TABLE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1994 1995 1996 1997
<S> <C> <C> <C> <C>
GOVERNMENT INVESTMENT - CLASS A -3.85% 17.65% 2.04% 9.01%
Lipper General U.S. Government Bond -4.64% 17.34% 1.72% 8.84%
Funds Average J
Lehman Brothers Government Bond Index -3.37% 18.34% 2.77% 9.59%
Consumer Price Index 2.67% 2.54% 3.32% 1.70%
</TABLE>
(LARGE SOLID BOX) GOVERNMENT INVESTMENT - CLASS A
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: NIL
ROW: 3, COL: 1, VALUE: 6.57
ROW: 4, COL: 1, VALUE: 11.75
ROW: 5, COL: 1, VALUE: 8.370000000000001
ROW: 6, COL: 1, VALUE: 13.45
ROW: 7, COL: 1, VALUE: 6.48
ROW: 8, COL: 1, VALUE: 9.360000000000001
ROW: 9, COL: 1, VALUE: -3.85
ROW: 10, COL: 1, VALUE: 17.65
ROW: 11, COL: 1, VALUE: 1.99
ROW: 12, COL: 1, VALUE: 9.01
INTERMEDIATE BOND - CLASS A
<TABLE>
<CAPTION>
Calendar year total returns+ 1988 1989 1990 1991 1992 1993
<S> <C> <C> <C> <C> <C> <C>
INTERMEDIATE BOND - CLASS A 7.84% 12.11% 7.91% 15.16% 7.13% 11.49%
Lipper Short-Intermediate Investment 6.16% 9.94% 8.11% 14.01% 6.24% 7.51%
Grade Bond Funds AverageK
Lehman Brothers Intermediate 6.67% 12.77% 9.16% 14.62% 7.17% 8.79%
Government/Corporate Bond Index
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75%
</TABLE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1994 1995 1996 1997
<S> <C> <C> <C> <C>
INTERMEDIATE BOND - CLASS A -2.47% 12.19% 3.21% 7.20%
Lipper Short-Intermediate Investment -2.08% 12.88% 4.17% 6.62%
Grade Bond Funds AverageK
Lehman Brothers Intermediate -1.93% 15.33% 4.05% 7.87%
Government/Corporate Bond Index
Consumer Price Index 2.67% 2.54% 3.32% 1.70%
</TABLE>
(LARGE SOLID BOX) INTERMEDIATE BOND - CLASS A
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 14.33
ROW: 2, COL: 1, VALUE: 2.32
ROW: 3, COL: 1, VALUE: 7.84
ROW: 4, COL: 1, VALUE: 12.11
ROW: 5, COL: 1, VALUE: 7.91
ROW: 6, COL: 1, VALUE: 15.16
ROW: 7, COL: 1, VALUE: 7.13
ROW: 8, COL: 1, VALUE: 11.49
ROW: 9, COL: 1, VALUE: -2.47
ROW: 10, COL: 1, VALUE: 12.19
ROW: 11, COL: 1, VALUE: 3.16
ROW: 12, COL: 1, VALUE: 7.2
SHORT FIXED-INCOME - CLASS A
<PAGE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1988 1989 1990 1991 1992
<S> <C> <C> <C> <C> <C>
SHORT FIXED-INCOME - CLASS A 6.19% 10.31% 5.87% 13.37% 7.61%
Lipper Short Investment Grade Bond
6.86% 10.22% 7.87% 12.88% 5.97%
Funds AverageL
Lehman Brothers 1-3 Year 6.34% 10.97% 9.69% 11.83% 6.35%
Government/Corporate Bond Index
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90%
</TABLE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C>
SHORT FIXED-INCOME - CLASS A 9.49% -3.37% 9.81% 4.13% 6.22%
Lipper Short Investment Grade Bond
6.45% -0.44% 10.84% 4.64% 6.19%
Funds AverageL
Lehman Brothers 1-3 Year 5.55% 0.55% 10.96% 5.14% 6.66%
Government/Corporate Bond Index
Consumer Price Index 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
(LARGE SOLID BOX) SHORT FIXED-INCOME - CLASS A
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: NIL
ROW: 3, COL: 1, VALUE: 6.19
ROW: 4, COL: 1, VALUE: 10.31
ROW: 5, COL: 1, VALUE: 5.87
ROW: 6, COL: 1, VALUE: 13.37
ROW: 7, COL: 1, VALUE: 7.609999999999999
ROW: 8, COL: 1, VALUE: 9.49
ROW: 9, COL: 1, VALUE: -3.37
ROW: 10, COL: 1, VALUE: 9.810000000000001
ROW: 11, COL: 1, VALUE: 4.07
ROW: 12, COL: 1, VALUE: 6.22
MUNICIPAL INCOME - CLASS A
<TABLE>
<CAPTION>
Calendar year total returns+ 1988 1989 1990 1991 1992
<S> <C> <C> <C> <C> <C>
MUNICIPAL INCOME - CLASS A 11.80% 13.09% 10.29% 12.18% 11.11%
Lipper General Municipal Debt
Funds Average M 11.53% 9.65% 6.05% 12.09% 8.79%
Lehman Brothers Municipal Bond Index 10.16% 10.79% 7.29% 12.14% 8.81%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90%
</TABLE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C>
MUNICIPAL INCOME - CLASS A 13.79% -8.05% 16.65% 3.04% 9.99%
Lipper General Municipal Debt
Funds Average M 12.47% -6.50% 16.84% 3.30% 9.11%
Lehman Brothers Municipal Bond Index 12.29% -5.17% 17.45% 4.43% 9.19%
Consumer Price Index 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
(LARGE SOLID BOX) MUNICIPAL INCOME - CLASS A
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: NIL
ROW: 3, COL: 1, VALUE: 11.8
ROW: 4, COL: 1, VALUE: 13.09
ROW: 5, COL: 1, VALUE: 10.29
ROW: 6, COL: 1, VALUE: 12.18
ROW: 7, COL: 1, VALUE: 11.11
ROW: 8, COL: 1, VALUE: 13.79
ROW: 9, COL: 1, VALUE: -8.050000000000001
ROW: 10, COL: 1, VALUE: 16.65
ROW: 11, COL: 1, VALUE: 2.99
ROW: 12, COL: 1, VALUE: 9.99
INTERMEDIATE MUNICIPAL INCOME - CLASS A
<TABLE>
<CAPTION>
Calendar year total returns+ 1988 1989 1990 1991 1992
<S> <C> <C> <C> <C> <C>
INTERMEDIATE MUNICIPAL INCOME - CLASS A 7.38% 7.79% 6.37% 9.64% 7.31%
Lipper Intermediate Municipal Debt
Funds Average N 7.57% 8.26% 6.59% 10.52% 7.80%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90%
</TABLE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C>
INTERMEDIATE MUNICIPAL INCOME - CLASS A 9.43% -5.68% 14.20% 3.82% 8.02%
Lipper Intermediate Municipal Debt
Funds Average N 10.18% -3.51% 12.89% 3.70% 7.16%
Consumer Price Index 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
(LARGE SOLID BOX) INTERMEDIATE MUNICIPAL INCOME -
CLASS A
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: 2.33
ROW: 3, COL: 1, VALUE: 7.38
ROW: 4, COL: 1, VALUE: 7.79
ROW: 5, COL: 1, VALUE: 6.37
ROW: 6, COL: 1, VALUE: 9.639999999999999
ROW: 7, COL: 1, VALUE: 7.31
ROW: 8, COL: 1, VALUE: 9.43
ROW: 9, COL: 1, VALUE: -5.68
ROW: 10, COL: 1, VALUE: 14.2
ROW: 11, COL: 1, VALUE: 3.78
ROW: 12, COL: 1, VALUE: 8.02
SHORT-INTERMEDIATE MUNICIPAL INCOME - CLASS A
<PAGE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1995 1996 1997
<S> <C> <C> <C>
SHORT-INTERMEDIATE MUNICIPAL INCOME - 8.68% 3.53% 5.14%
CLASS A
Lipper Short-Intermediate Municipal 7.43% 3.53% 5.20%
Debt Funds Average O
Consumer Price Index 2.54% 3.32% 1.70%
</TABLE>
(LARGE SOLID BOX) SHORT-INTERMEDIATE MUNICIPAL
INCOME - CLASS A
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 0.0
ROW: 2, COL: 1, VALUE: 0.0
ROW: 3, COL: 1, VALUE: 0.0
ROW: 4, COL: 1, VALUE: 0.0
ROW: 5, COL: 1, VALUE: 0.0
ROW: 6, COL: 1, VALUE: 0.0
ROW: 7, COL: 1, VALUE: 0.0
ROW: 8, COL: 1, VALUE: 0.0
ROW: 9, COL: 1, VALUE: 0.0
ROW: 10, COL: 1, VALUE: 8.68
ROW: 11, COL: 1, VALUE: 3.53
ROW: 12, COL: 1, VALUE: 5.14
TECHNOQUANT GROWTH - CLASS T
<TABLE>
<CAPTION>
Calendar year total returns+ 1997
<S> <C>
TECHNOQUANT GROWTH - CLASS T 11.82%
Lipper Capital Appreciation Funds Average A 20.36%
S&P 500 33.36%
Consumer Price Index 1.70%
</TABLE>
MID CAP - CLASS T
<TABLE>
<CAPTION>
Calendar year total returns+ 1997
<S> <C>
MID CAP - CLASS T 27.25%
Lipper Mid Cap Funds Average B 19.63%
S&P 400 32.25%
Consumer Price Index 1.70%
</TABLE>
<PAGE>
EQUITY GROWTH - CLASS T
<TABLE>
<CAPTION>
Calendar year total returns+ 1988 1989 1990 1991 1992 1993
<S> <C> <C> <C> <C> <C> <C>
EQUITY GROWTH - CLASS T 15.57% 44.84% 6.93% 64.71% 9.89% 14.85%
Lipper Growth Funds Average C 14.79% 26.91% -4.49% 36.70% 8.08% 10.63%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62% 10.08%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75%
</TABLE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1994 1995 1996 1997
<S> <C> <C> <C> <C>
EQUITY GROWTH - CLASS T -0.89% 39.14% 16.24% 23.93%
Lipper Growth Funds AverageC -2.17% 30.79% 19.24% 25.30%
S&P 500 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 2.67% 2.54% 3.32% 1.70%
</TABLE>
(LARGE SOLID BOX) EQUITY GROWTH - CLASS T
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 14.51
ROW: 2, COL: 1, VALUE: -0.5700000000000001
ROW: 3, COL: 1, VALUE: 15.57
ROW: 4, COL: 1, VALUE: 44.84
ROW: 5, COL: 1, VALUE: 6.930000000000001
ROW: 6, COL: 1, VALUE: 64.71000000000001
ROW: 7, COL: 1, VALUE: 9.890000000000001
ROW: 8, COL: 1, VALUE: 14.85
ROW: 9, COL: 1, VALUE: -0.8900000000000001
ROW: 10, COL: 1, VALUE: 39.14
ROW: 11, COL: 1, VALUE: 16.24
ROW: 12, COL: 1, VALUE: 23.93
GROWTH OPPORTUNITIES - CLASS T
<TABLE>
<CAPTION>
Calendar year total returns+ 1988 1989 1990 1991 1992
<S> <C> <C> <C> <C> <C>
GROWTH OPPORTUNITIES - CLASS T 33.28% 24.14% -1.65% 42.68% 15.03%
Lipper Growth Funds Average C 14.79% 26.91% -4.49% 36.70% 8.08%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90%
</TABLE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C>
GROWTH OPPORTUNITIES - CLASS T 22.17% 2.86% 33.04% 17.73% 28.56%
Lipper Growth Funds Average C 10.63% -2.17% 30.79% 19.24% 25.30%
S&P 500 10.08% 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
(LARGE SOLID BOX) GROWTH OPPORTUNITIES - CLASS T
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: NIL
ROW: 3, COL: 1, VALUE: 33.28
ROW: 4, COL: 1, VALUE: 24.14
ROW: 5, COL: 1, VALUE: -1.65
ROW: 6, COL: 1, VALUE: 42.68
ROW: 7, COL: 1, VALUE: 15.03
ROW: 8, COL: 1, VALUE: 22.17
ROW: 9, COL: 1, VALUE: 2.86
ROW: 10, COL: 1, VALUE: 33.04
ROW: 11, COL: 1, VALUE: 17.73
ROW: 12, COL: 1, VALUE: 28.56
STRATEGIC OPPORTUNITIES - CLASS T
<TABLE>
<CAPTION>
Calendar year total returns+ 1988 1989 1990 1991 1992
<S> <C> <C> <C> <C> <C>
STRATEGIC OPPORTUNITIES - CLASS T 22.25% 32.60% -7.17% 23.08% 12.87%
Lipper Capital Appreciation Funds A 14.09% 26.60% -8.24% 39.91% 8.78%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90%
</TABLE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C>
STRATEGIC OPPORTUNITIES - CLASS T 20.44% -7.17% 38.16% 1.53% 26.01%
Lipper Capital Appreciation Funds A 15.68% -3.38% 30.34% 16.31% 20.36%
S&P 500 10.08% 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
(LARGE SOLID BOX) STRATEGIC OPPORTUNITIES - CLASS T
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 27.92
ROW: 2, COL: 1, VALUE: -6.33
ROW: 3, COL: 1, VALUE: 22.25
ROW: 4, COL: 1, VALUE: 32.6
ROW: 5, COL: 1, VALUE: -7.17
ROW: 6, COL: 1, VALUE: 23.08
ROW: 7, COL: 1, VALUE: 12.87
ROW: 8, COL: 1, VALUE: 20.44
ROW: 9, COL: 1, VALUE: -7.17
ROW: 10, COL: 1, VALUE: 38.16
ROW: 11, COL: 1, VALUE: 1.53
ROW: 12, COL: 1, VALUE: 26.01
LARGE CAP - CLASS T
<PAGE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1997
<S> <C>
LARGE CAP - CLASS T 23.82%
Lipper Growth Funds Average C 25.30%
S&P 500 33.36%
Consumer Price Index 1.70%
</TABLE>
GROWTH & INCOME - CLASS T
<TABLE>
<CAPTION>
Calendar year total returns+ 1997
<S> <C>
GROWTH & INCOME - CLASS T 27.69%
Lipper Growth and Income Funds AverageD 27.14%
S&P 500 33.36%
Consumer Price Index 1.70%
</TABLE>
EQUITY INCOME - CLASS T
<TABLE>
<CAPTION>
Calendar year total returns+ 1988 1989 1990 1991 1992
<S> <C> <C> <C> <C> <C>
EQUITY INCOME - CLASS T 23.23% 18.43% -14.28% 29.81% 14.68%
Lipper Equity Income Funds Average E 16.74% 22.18% -6.78% 26.86% 9.77%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90%
</TABLE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C>
EQUITY INCOME - CLASS T 18.03% 6.46% 32.55% 14.61% 25.89%
Lipper Equity Income Funds Average E 13.66% -2.54% 30.17% 18.85% 27.51%
S&P 500 10.08% 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
(LARGE SOLID BOX) EQUITY INCOME - CLASS T
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 17.44
ROW: 2, COL: 1, VALUE: -2.24
ROW: 3, COL: 1, VALUE: 23.23
ROW: 4, COL: 1, VALUE: 18.43
ROW: 5, COL: 1, VALUE: -14.28
ROW: 6, COL: 1, VALUE: 29.81
ROW: 7, COL: 1, VALUE: 14.68
ROW: 8, COL: 1, VALUE: 18.03
ROW: 9, COL: 1, VALUE: 6.46
ROW: 10, COL: 1, VALUE: 32.55
ROW: 11, COL: 1, VALUE: 14.61
ROW: 12, COL: 1, VALUE: 25.89
BALANCED - CLASS T
<PAGE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1988 1989 1990 1991 1992 1993
<S> <C> <C> <C> <C> <C> <C>
BALANCED - CLASS T 20.89% 24.60% -2.94% 34.48% 9.20% 19.66%
Lipper Balanced Funds Average F 12.34% 19.57% -0.57% 26.69% 7.07% 10.91%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62% 10.08%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75%
</TABLE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1994 1995 1996 1997
<S> <C> <C> <C> <C>
BALANCED - CLASS T -5.09% 14.06% 8.43% 22.33%
Lipper Balanced Funds Average F -2.50% 25.16% 13.76% 19.00%
S&P 500 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 2.67% 2.54% 3.32% 1.70%
</TABLE>
(LARGE SOLID BOX) BALANCED - CLASS T
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: NIL
ROW: 3, COL: 1, VALUE: 20.89
ROW: 4, COL: 1, VALUE: 24.6
ROW: 5, COL: 1, VALUE: -2.94
ROW: 6, COL: 1, VALUE: 34.48
ROW: 7, COL: 1, VALUE: 9.199999999999999
ROW: 8, COL: 1, VALUE: 19.66
ROW: 9, COL: 1, VALUE: -5.09
ROW: 10, COL: 1, VALUE: 14.06
ROW: 11, COL: 1, VALUE: 8.43
ROW: 12, COL: 1, VALUE: 22.33
HIGH YIELD - CLASS T
<TABLE>
<CAPTION>
Calendar year total returns+ 1988 1989 1990 1991 1992
<S> <C> <C> <C> <C> <C>
HIGH YIELD - CLASS T 17.24% 3.64% 7.30% 34.94% 23.09%
Lipper High Current Yield Funds Average G 12.89% -0.58% -10.13% 36.91% 17.51%
Merrill Lynch High Yield Master Index 13.47% 4.23% -4.35% 34.58% 18.16%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90%
</TABLE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C>
HIGH YIELD - CLASS T 20.45% -1.49% 19.27% 13.26% 15.09%
Lipper High Current Yield Funds Average G 18.95% -3.85% 16.43% 13.67% 12.96%
Merrill Lynch High Yield Master Index 17.18% -1.17% 19.91% 11.06% 12.82%
Consumer Price Index 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
(LARGE SOLID BOX) HIGH YIELD - CLASS T
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: NIL
ROW: 3, COL: 1, VALUE: 17.24
ROW: 4, COL: 1, VALUE: 3.64
ROW: 5, COL: 1, VALUE: 7.3
ROW: 6, COL: 1, VALUE: 34.94
ROW: 7, COL: 1, VALUE: 23.09
ROW: 8, COL: 1, VALUE: 20.45
ROW: 9, COL: 1, VALUE: -1.49
ROW: 10, COL: 1, VALUE: 19.27
ROW: 11, COL: 1, VALUE: 13.26
ROW: 12, COL: 1, VALUE: 15.09
STRATEGIC INCOME - CLASS T
<TABLE>
<CAPTION>
Calendar year total returns+ 1995 1996 1997
<S> <C> <C> <C>
STRATEGIC INCOME - CLASS T 22.02% 12.89% 9.33%
Lipper Multi-Sector Income Funds Average H 16.92% 11.74% 8.77%
Merrill Lynch High Yield Master Index 19.91% 11.06% 12.82%
Consumer Price Index 2.54% 3.32% 1.70%
</TABLE>
(LARGE SOLID BOX) STRATEGIC INCOME - CLASS T
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 0.0
ROW: 2, COL: 1, VALUE: 0.0
ROW: 3, COL: 1, VALUE: 0.0
ROW: 4, COL: 1, VALUE: 0.0
ROW: 5, COL: 1, VALUE: 0.0
ROW: 6, COL: 1, VALUE: 0.0
ROW: 7, COL: 1, VALUE: 0.0
ROW: 8, COL: 1, VALUE: 22.02
ROW: 9, COL: 1, VALUE: 12.89
ROW: 10, COL: 1, VALUE: 9.33
MORTGAGE SECURITIES - CLASS T
<PAGE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1988 1989 1990 1991 1992
<S> <C> <C> <C> <C> <C>
MORTGAGE SECURITIES - CLASS T 6.72% 13.64% 10.36% 13.61% 5.45%
Lipper U.S. Mortgage Funds Average I 7.47% 12.71% 9.52% 15.00% 6.38%
Lehman Brothers Mortgage - Backed 8.72% 15.35% 10.72% 15.72% 6.97%
Securities Index
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90%
</TABLE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C>
MORTGAGE SECURITIES - CLASS T 6.71% 1.94% 17.02% 5.43% 8.88%
Lipper U.S. Mortgage Funds Average I 7.58% -4.83% 16.29% 3.87% 8.58%
Lehman Brothers Mortgage - Backed 6.84% -1.61% 16.80% 5.35% 9.49%
Securities Index
Consumer Price Index 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
(LARGE SOLID BOX) MORTGAGE SECURITIES - CLASS T
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 2.7
ROW: 2, COL: 1, VALUE: 6.72
ROW: 3, COL: 1, VALUE: 13.64
ROW: 4, COL: 1, VALUE: 10.36
ROW: 5, COL: 1, VALUE: 13.61
ROW: 6, COL: 1, VALUE: 5.45
ROW: 7, COL: 1, VALUE: 6.71
ROW: 8, COL: 1, VALUE: 1.94
ROW: 9, COL: 1, VALUE: 17.02
ROW: 10, COL: 1, VALUE: 5.430000000000001
ROW: 11, COL: 1, VALUE: 8.880000000000001
GOVERNMENT INVESTMENT - CLASS T
<TABLE>
<CAPTION>
Calendar year total returns+ 1988 1989 1990 1991 1992 1993
<S> <C> <C> <C> <C> <C> <C>
GOVERNMENT INVESTMENT - CLASS T 6.57% 11.75% 8.37% 13.45% 6.48% 9.36%
Lipper General U.S. Government Bond 6.67% 12.46% 8.22% 14.44% 6.41% 9.42%
Funds Average J
Lehman Brothers Government Bond Index 7.03% 14.22% 8.72% 15.32% 7.23% 10.66%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75%
</TABLE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1994 1995 1996 1997
<S> <C> <C> <C> <C>
GOVERNMENT INVESTMENT - CLASS T -3.85% 17.65% 2.12% 8.71%
Lipper General U.S. Government Bond -4.64% 17.34% 1.72% 8.84%
Funds Average J
Lehman Brothers Government Bond Index -3.37% 18.34% 2.77% 9.59%
Consumer Price Index 2.67% 2.54% 3.32% 1.70%
</TABLE>
(LARGE SOLID BOX) GOVERNMENT INVESTMENT - CLASS T
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: NIL
ROW: 3, COL: 1, VALUE: 6.57
ROW: 4, COL: 1, VALUE: 11.75
ROW: 5, COL: 1, VALUE: 8.370000000000001
ROW: 6, COL: 1, VALUE: 13.45
ROW: 7, COL: 1, VALUE: 6.48
ROW: 8, COL: 1, VALUE: 9.360000000000001
ROW: 9, COL: 1, VALUE: -3.85
ROW: 10, COL: 1, VALUE: 17.65
ROW: 11, COL: 1, VALUE: 2.12
ROW: 12, COL: 1, VALUE: 8.709999999999999
INTERMEDIATE BOND - CLASS T
<TABLE>
<CAPTION>
Calendar year total returns+ 1988 1989 1990 1991 1992
<S> <C> <C> <C> <C> <C>
INTERMEDIATE BOND - CLASS T 7.84% 12.11% 7.91% 15.16% 7.13%
Lipper Short- Intermediate Investment 6.16% 9.94% 8.11% 14.01% 6.24%
Grade Bond Funds Average K
Lehman Brothers Intermediate 6.67% 12.77% 9.16% 14.62% 7.17%
Government/Corporate Bond Index
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90%
</TABLE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C>
INTERMEDIATE BOND - CLASS T 11.49% -2.47% 12.19% 3.41% 7.03%
Lipper Short- Intermediate Investment 7.51% -2.08% 12.88% 4.17% 6.62%
Grade Bond Funds Average K
Lehman Brothers Intermediate 8.79% -1.93% 15.33% 4.05% 7.87%
Government/Corporate Bond Index
Consumer Price Index 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
(LARGE SOLID BOX) INTERMEDIATE BOND - CLASS T
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 14.33
ROW: 2, COL: 1, VALUE: 2.32
ROW: 3, COL: 1, VALUE: 7.84
ROW: 4, COL: 1, VALUE: 12.11
ROW: 5, COL: 1, VALUE: 7.91
ROW: 6, COL: 1, VALUE: 15.16
ROW: 7, COL: 1, VALUE: 7.13
ROW: 8, COL: 1, VALUE: 11.49
ROW: 9, COL: 1, VALUE: -2.47
ROW: 10, COL: 1, VALUE: 12.19
ROW: 11, COL: 1, VALUE: 3.41
ROW: 12, COL: 1, VALUE: 7.03
SHORT FIXED-INCOME - CLASS T
<PAGE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1988 1989 1990 1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SHORT FIXED-INCOME - CLASS T 6.19% 10.31% 5.87% 13.37% 7.61% 9.49% -3.37% 9.81% 4.57%
Lipper Short Investment Grade Bond 6.86% 10.22% 7.87% 12.88% 5.97% 6.45% -0.44% 10.84% 4.64%
Funds Average L
Lehman Brothers 1-3 Year 6.34% 10.97% 9.69% 11.83% 6.35% 5.55% 0.55% 10.96% 5.14%
Government/Corporate Bond Index
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
</TABLE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1997
<S> <C>
SHORT FIXED-INCOME - CLASS T 6.18%
Lipper Short Investment Grade Bond 6.19%
Funds Average L
Lehman Brothers 1-3 Year 6.66%
Government/Corporate Bond Index
Consumer Price Index 1.70%
</TABLE>
(LARGE SOLID BOX) SHORT FIXED-INCOME - CLASS T
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: NIL
ROW: 3, COL: 1, VALUE: 6.19
ROW: 4, COL: 1, VALUE: 10.31
ROW: 5, COL: 1, VALUE: 5.87
ROW: 6, COL: 1, VALUE: 13.37
ROW: 7, COL: 1, VALUE: 7.609999999999999
ROW: 8, COL: 1, VALUE: 9.49
ROW: 9, COL: 1, VALUE: -3.37
ROW: 10, COL: 1, VALUE: 9.810000000000001
ROW: 11, COL: 1, VALUE: 4.57
ROW: 12, COL: 1, VALUE: 6.18
MUNICIPAL INCOME - CLASS T
<TABLE>
<CAPTION>
Calendar year total returns+ 1988 1989 1990 1991 1992
<S> <C> <C> <C> <C> <C>
MUNICIPAL INCOME - CLASS T 11.80% 13.09% 10.29% 12.18% 11.11%
Lipper General Municipal Debt 11.53% 9.65% 6.05% 12.09% 8.79%
Funds Average M
Lehman Brothers Municipal Bond Index 10.16% 10.79% 7.29% 12.14% 8.81%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90%
</TABLE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C>
MUNICIPAL INCOME - CLASS T 13.79% -8.05% 16.65% 2.95% 10.13%
Lipper General Municipal Debt 12.47% -6.50% 16.84% 3.30% 9.11%
Funds Average M
Lehman Brothers Municipal Bond Index 12.29% -5.17% 17.45% 4.43% 9.19%
Consumer Price Index 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
(LARGE SOLID BOX) MUNICIPAL INCOME - CLASS T
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: NIL
ROW: 3, COL: 1, VALUE: 11.8
ROW: 4, COL: 1, VALUE: 13.09
ROW: 5, COL: 1, VALUE: 10.29
ROW: 6, COL: 1, VALUE: 12.18
ROW: 7, COL: 1, VALUE: 11.11
ROW: 8, COL: 1, VALUE: 13.79
ROW: 9, COL: 1, VALUE: -8.050000000000001
ROW: 10, COL: 1, VALUE: 16.65
ROW: 11, COL: 1, VALUE: 2.95
ROW: 12, COL: 1, VALUE: 10.13
INTERMEDIATE MUNICIPAL INCOME - CLASS T
<TABLE>
<CAPTION>
Calendar year total returns+ 1988 1989 1990 1991 1992
<S> <C> <C> <C> <C> <C>
INTERMEDIATE MUNICIPAL INCOME - CLASS T 7.38% 7.79% 6.37% 9.64% 7.31%
Lipper Intermediate Municipal Debt
7.57% 8.26% 6.59% 10.52% 7.80%
Funds Average N
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90%
</TABLE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C>
INTERMEDIATE MUNICIPAL INCOME - CLASS T 9.43% -5.68% 14.20% 3.89% 7.80%
Lipper Intermediate Municipal Debt
10.18% -3.51% 12.89% 3.70% 7.16%
Funds Average N
Consumer Price Index 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
(LARGE SOLID BOX) INTERMEDIATE MUNICIPAL INCOME -
CLASS T
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: 2.33
ROW: 3, COL: 1, VALUE: 7.38
ROW: 4, COL: 1, VALUE: 7.79
ROW: 5, COL: 1, VALUE: 6.37
ROW: 6, COL: 1, VALUE: 9.639999999999999
ROW: 7, COL: 1, VALUE: 7.31
ROW: 8, COL: 1, VALUE: 9.43
ROW: 9, COL: 1, VALUE: -5.68
ROW: 10, COL: 1, VALUE: 14.2
ROW: 11, COL: 1, VALUE: 3.89
ROW: 12, COL: 1, VALUE: 7.8
SHORT-INTERMEDIATE MUNICIPAL INCOME - CLASS T
<PAGE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1995 1996 1997
<S> <C> <C> <C>
SHORT-INTERMEDIATE MUNICIPAL INCOME - 8.68% 3.64% 5.03%
CLASS T
Lipper Short-Intermediate Municipal 7.43% 3.53% 5.20%
Debt Funds Average O
Consumer Price Index 2.54% 3.32% 1.70%
</TABLE>
(LARGE SOLID BOX) SHORT-INTERMEDIATE MUNICIPAL
INCOME - CLASS T
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 0.0
ROW: 2, COL: 1, VALUE: 0.0
ROW: 3, COL: 1, VALUE: 0.0
ROW: 4, COL: 1, VALUE: 0.0
ROW: 5, COL: 1, VALUE: 0.0
ROW: 6, COL: 1, VALUE: 0.0
ROW: 7, COL: 1, VALUE: 0.0
ROW: 8, COL: 1, VALUE: 8.68
ROW: 9, COL: 1, VALUE: 3.64
ROW: 10, COL: 1, VALUE: 5.03
TECHNOQUANT GROWTH - CLASS B
<TABLE>
<CAPTION>
Calendar year total returns+ 1997
<S> <C>
TECHNOQUANT GROWTH - CLASS B 11.31%
Lipper Capital Appreciation Funds Average A 20.36%
S&P 500 33.36%
Consumer Price Index 1.70%
</TABLE>
MID CAP - CLASS B
<TABLE>
<CAPTION>
Calendar year total returns+ 1997
<S> <C>
MID CAP - CLASS B 26.68%
Lipper Mid Cap Funds Average B 19.63%
S&P 400 32.25%
Consumer Price Index 1.70%
</TABLE>
<PAGE>
EQUITY GROWTH - CLASS B
<TABLE>
<CAPTION>
Calendar year total returns+ 1988 1989 1990 1991 1992 1993
<S> <C> <C> <C> <C> <C> <C>
EQUITY GROWTH - CLASS B 15.57% 44.84% 6.93% 64.71% 9.89% 14.85%
Lipper Growth Funds Average C 14.79% 26.91% -4.49% 36.70% 8.08% 10.63%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62% 10.08%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75%
</TABLE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C>
EQUITY GROWTH - CLASS B 14.85% -0.89% 39.14% 15.69% 23.11%
Lipper Growth Funds Average C 10.63% -2.17% 30.79% 19.24% 25.30%
S&P 500 10.08% 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
(LARGE SOLID BOX) EQUITY GROWTH - CLASS B
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: -0.5700000000000001
ROW: 3, COL: 1, VALUE: 15.57
ROW: 4, COL: 1, VALUE: 44.84
ROW: 5, COL: 1, VALUE: 6.930000000000001
ROW: 6, COL: 1, VALUE: 64.71000000000001
ROW: 7, COL: 1, VALUE: 9.890000000000001
ROW: 8, COL: 1, VALUE: 14.85
ROW: 9, COL: 1, VALUE: -0.8900000000000001
ROW: 10, COL: 1, VALUE: 39.14
ROW: 11, COL: 1, VALUE: 15.69
ROW: 12, COL: 1, VALUE: 23.11
GROWTH OPPORTUNITIES - CLASS B
<TABLE>
<CAPTION>
Calendar year total returns+ 1988 1989 1990 1991 1992
<S> <C> <C> <C> <C> <C>
GROWTH OPPORTUNITIES - CLASS B 33.28% 24.14% -1.65% 42.68% 15.03%
Lipper Growth Funds Average C 14.79% 26.91% -4.49% 36.70% 8.08%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90%
</TABLE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C>
GROWTH OPPORTUNITIES - CLASS B 22.17% 2.86% 33.04% 17.73% 27.96%
Lipper Growth Funds Average C 10.63% -2.17% 30.79% 19.24% 25.30%
S&P 500 10.08% 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
(LARGE SOLID BOX) GROWTH OPPORTUNITIES - CLASS B
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: NIL
ROW: 3, COL: 1, VALUE: 33.28
ROW: 4, COL: 1, VALUE: 24.14
ROW: 5, COL: 1, VALUE: -1.65
ROW: 6, COL: 1, VALUE: 42.68
ROW: 7, COL: 1, VALUE: 15.03
ROW: 8, COL: 1, VALUE: 22.17
ROW: 9, COL: 1, VALUE: 2.86
ROW: 10, COL: 1, VALUE: 33.04
ROW: 11, COL: 1, VALUE: 17.73
ROW: 12, COL: 1, VALUE: 27.96
STRATEGIC OPPORTUNITIES - CLASS B
<TABLE>
<CAPTION>
Calendar year total returns+ 1988 1989 1990 1991 1992
<S> <C> <C> <C> <C> <C>
STRATEGIC OPPORTUNITIES - CLASS B 22.25% 32.60% -7.17% 23.08% 12.87%
Lipper Capital Appreciation Funds A 14.09% 26.60% -8.24% 39.91% 8.78%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90%
</TABLE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C>
STRATEGIC OPPORTUNITIES - CLASS B 20.44% -7.22% 37.35% 1.00% 25.47%
Lipper Capital Appreciation Funds A 15.68% -3.38% 30.34% 16.31% 20.36%
S&P 500 10.08% 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
(LARGE SOLID BOX) STRATEGIC OPPORTUNITIES - CLASS B
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 27.92
ROW: 2, COL: 1, VALUE: -6.33
ROW: 3, COL: 1, VALUE: 22.25
ROW: 4, COL: 1, VALUE: 32.6
ROW: 5, COL: 1, VALUE: -7.17
ROW: 6, COL: 1, VALUE: 23.08
ROW: 7, COL: 1, VALUE: 12.87
ROW: 8, COL: 1, VALUE: 20.44
ROW: 9, COL: 1, VALUE: -7.22
ROW: 10, COL: 1, VALUE: 37.34999999999999
ROW: 11, COL: 1, VALUE: 1.0
ROW: 12, COL: 1, VALUE: 25.47
LARGE CAP - CLASS B
<PAGE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1997
<S> <C>
LARGE CAP - CLASS B 23.21%
Lipper Growth Funds Average C 25.30%
S&P 500 33.36%
Consumer Price Index 1.70%
</TABLE>
GROWTH & INCOME - CLASS B
<TABLE>
<CAPTION>
Calendar year total returns+ 1997
<S> <C>
GROWTH & INCOME - CLASS B 27.07%
Lipper Growth and Income Funds Average D 27.14%
S&P 500 33.36%
Consumer Price Index 1.70%
</TABLE>
EQUITY INCOME - CLASS B
<TABLE>
<CAPTION>
Calendar year total returns+ 1988 1989 1990 1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
EQUITY INCOME - CLASS B 23.23% 18.43% -14.28% 29.81% 14.68% 18.03% 6.39% 31.96% 14.00%
Lipper Equity Income Funds Average E 16.74% 22.18% -6.78% 26.86% 9.77% 13.66% -2.54% 30.17% 18.85%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
</TABLE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1997
<S> <C>
EQUITY INCOME - CLASS B 25.25%
Lipper Equity Income Funds Average E 27.51%
S&P 500 33.36%
Consumer Price Index 1.70%
</TABLE>
(LARGE SOLID BOX) EQUITY INCOME - CLASS B
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 17.44
ROW: 2, COL: 1, VALUE: -2.24
ROW: 3, COL: 1, VALUE: 23.23
ROW: 4, COL: 1, VALUE: 18.43
ROW: 5, COL: 1, VALUE: -14.28
ROW: 6, COL: 1, VALUE: 29.81
ROW: 7, COL: 1, VALUE: 14.68
ROW: 8, COL: 1, VALUE: 18.03
ROW: 9, COL: 1, VALUE: 6.39
ROW: 10, COL: 1, VALUE: 31.96
ROW: 11, COL: 1, VALUE: 14.0
ROW: 12, COL: 1, VALUE: 25.25
<PAGE>
BALANCED - CLASS B
<TABLE>
<CAPTION>
Calendar year total returns+ 1988 1989 1990 1991 1992 1993
<S> <C> <C> <C> <C> <C> <C>
BALANCED - CLASS B 20.89% 24.60% -2.94% 34.48% 9.20% 19.66%
Lipper Balanced Funds AverageF 12.34% 19.57% -0.57% 26.69% 7.07% 10.91%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62% 10.08%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75%
</TABLE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1994 1995 1996 1997
<S> <C> <C> <C> <C>
BALANCED - CLASS B -5.09% 14.06% 8.29% 21.40%
Lipper Balanced Funds AverageF -2.50% 25.16% 13.76% 19.00%
S&P 500 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 2.67% 2.54% 3.32% 1.70%
</TABLE>
(LARGE SOLID BOX) BALANCED - CLASS B
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: NIL
ROW: 3, COL: 1, VALUE: 20.89
ROW: 4, COL: 1, VALUE: 24.6
ROW: 5, COL: 1, VALUE: -2.94
ROW: 6, COL: 1, VALUE: 34.48
ROW: 7, COL: 1, VALUE: 9.199999999999999
ROW: 8, COL: 1, VALUE: 19.66
ROW: 9, COL: 1, VALUE: -5.09
ROW: 10, COL: 1, VALUE: 14.06
ROW: 11, COL: 1, VALUE: 8.289999999999999
ROW: 12, COL: 1, VALUE: 21.4
HIGH YIELD - CLASS B
<TABLE>
<CAPTION>
Calendar year total returns+ 1988 1989 1990 1991 1992
<S> <C> <C> <C> <C> <C>
HIGH YIELD - CLASS B 17.24% 3.64% 7.30% 34.94% 23.09%
Lipper High Current Yield 12.89% -0.58% -10.13% 36.91% 17.51%
Funds AverageG
Merrill Lynch High Yield Master Index 13.47% 4.23% -4.35% 34.58% 18.16%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90%
</TABLE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C>
HIGH YIELD - CLASS B 20.45% -2.11% 18.34% 12.45% 14.32%
Lipper High Current Yield 18.95% -3.85% 16.43% 13.67% 12.96%
Funds AverageG
Merrill Lynch High Yield Master Index 17.18% -1.17% 19.91% 11.06% 12.82%
Consumer Price Index 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
(LARGE SOLID BOX) HIGH YIELD - CLASS B
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: NIL
ROW: 3, COL: 1, VALUE: 17.24
ROW: 4, COL: 1, VALUE: 3.64
ROW: 5, COL: 1, VALUE: 7.3
ROW: 6, COL: 1, VALUE: 34.94
ROW: 7, COL: 1, VALUE: 23.09
ROW: 8, COL: 1, VALUE: 20.45
ROW: 9, COL: 1, VALUE: -2.11
ROW: 10, COL: 1, VALUE: 18.34
ROW: 11, COL: 1, VALUE: 12.45
ROW: 12, COL: 1, VALUE: 14.32
STRATEGIC INCOME - CLASS B
<TABLE>
<CAPTION>
Calendar year total returns+ 1995 1996 1997
<S> <C> <C> <C>
STRATEGIC INCOME - CLASS B 21.35% 12.14% 8.60%
Lipper Multi-Sector Income Funds AverageH 16.92% 11.74% 8.77%
Merrill Lynch High Yield Master Index 19.91% 11.06% 12.82%
Consumer Price Index 2.54% 3.32% 1.70%
</TABLE>
(LARGE SOLID BOX) STRATEGIC INCOME - CLASS B
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 0.0
ROW: 2, COL: 1, VALUE: 0.0
ROW: 3, COL: 1, VALUE: 0.0
ROW: 4, COL: 1, VALUE: 0.0
ROW: 5, COL: 1, VALUE: 0.0
ROW: 6, COL: 1, VALUE: 0.0
ROW: 7, COL: 1, VALUE: 0.0
ROW: 8, COL: 1, VALUE: 21.35
ROW: 9, COL: 1, VALUE: 12.14
ROW: 10, COL: 1, VALUE: 8.6
MORTGAGE SECURITIES - CLASS B
<PAGE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1988 1989 1990 1991 1992 1993
<S> <C> <C> <C> <C> <C> <C>
MORTGAGE SECURITIES - CLASS B 6.72% 13.64% 10.36% 13.61% 5.45% 6.71%
Lipper U.S. Mortgage Funds Average I 7.47% 12.71% 9.52% 15.00% 6.38% 7.58%
Lehman Brothers Mortgage-Backed 8.72% 15.35% 10.72% 15.72% 6.97% 6.84%
Securities Index
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75%
</TABLE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1994 1995 1996 1997
<S> <C> <C> <C> <C>
MORTGAGE SECURITIES - CLASS B 1.94% 17.02% 5.43% 8.19%
Lipper U.S. Mortgage Funds Average I -4.83% 16.29% 3.87% 8.58%
Lehman Brothers Mortgage-Backed -1.61% 16.80% 5.35% 9.49%
Securities Index
Consumer Price Index 2.67% 2.54% 3.32% 1.70%
</TABLE>
(LARGE SOLID BOX) MORTGAGE SECURITIES - CLASS B
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 2.7
ROW: 2, COL: 1, VALUE: 6.72
ROW: 3, COL: 1, VALUE: 13.64
ROW: 4, COL: 1, VALUE: 10.36
ROW: 5, COL: 1, VALUE: 13.61
ROW: 6, COL: 1, VALUE: 5.45
ROW: 7, COL: 1, VALUE: 6.71
ROW: 8, COL: 1, VALUE: 1.94
ROW: 9, COL: 1, VALUE: 17.02
ROW: 10, COL: 1, VALUE: 5.430000000000001
ROW: 11, COL: 1, VALUE: 8.19
GOVERNMENT INVESTMENT - CLASS B
<TABLE>
<CAPTION>
Calendar year total returns+ 1988 1989 1990 1991 1992 1993
<S> <C> <C> <C> <C> <C> <C>
GOVERNMENT INVESTMENT - CLASS B 6.57% 11.75% 8.37% 13.45% 6.48% 9.36%
Lipper General U.S. Government Bond 6.67% 12.46% 8.22% 14.44% 6.41% 9.42%
Funds Average J
Lehman Brothers Government Bond Index 7.03% 14.22% 8.72% 15.32% 7.23% 10.66%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75%
</TABLE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1994 1995 1996 1997
<S> <C> <C> <C> <C>
GOVERNMENT INVESTMENT - CLASS B -4.38% 16.92% 1.37% 8.02%
Lipper General U.S. Government Bond -4.64% 17.34% 1.72% 8.84%
Funds Average J
Lehman Brothers Government Bond Index -3.37% 18.34% 2.77% 9.59%
Consumer Price Index 2.67% 2.54% 3.32% 1.70%
</TABLE>
(LARGE SOLID BOX) GOVERNMENT INVESTMENT - CLASS B
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: NIL
ROW: 3, COL: 1, VALUE: 6.57
ROW: 4, COL: 1, VALUE: 11.75
ROW: 5, COL: 1, VALUE: 8.370000000000001
ROW: 6, COL: 1, VALUE: 13.45
ROW: 7, COL: 1, VALUE: 6.48
ROW: 8, COL: 1, VALUE: 9.360000000000001
ROW: 9, COL: 1, VALUE: -4.38
ROW: 10, COL: 1, VALUE: 16.92
ROW: 11, COL: 1, VALUE: 1.37
ROW: 12, COL: 1, VALUE: 8.02
INTERMEDIATE BOND - CLASS B
<PAGE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1988 1989 1990 1991 1992 1993
<S> <C> <C> <C> <C> <C> <C>
INTERMEDIATE BOND - CLASS B 7.84% 12.11% 7.91% 15.16% 7.13% 11.49%
Lipper Short-Intermediate Investment 6.16% 9.94% 8.11% 14.01% 6.24% 7.51%
GradeBond Funds Average K
Lehman Brothers Intermediate 6.67% 12.77% 9.16% 14.62% 7.17% 8.79%
Government/Corporate Bond Index
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75%
</TABLE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1994 1995 1996 1997
<S> <C> <C> <C> <C>
INTERMEDIATE BOND - CLASS B -3.12% 11.51% 2.63% 6.30%
Lipper Short-Intermediate Investment- 2.08% 12.88% 4.17% 6.62%
Grade Bond Funds AverageK
Lehman Brothers Intermediate -1.93% 15.33% 4.05% 7.87%
Government/Corporate Bond Index
Consumer Price Index 2.67% 2.54% 3.32% 1.70%
</TABLE>
(LARGE SOLID BOX) INTERMEDIATE BOND - CLASS B
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 14.33
ROW: 2, COL: 1, VALUE: 2.32
ROW: 3, COL: 1, VALUE: 7.84
ROW: 4, COL: 1, VALUE: 12.11
ROW: 5, COL: 1, VALUE: 7.91
ROW: 6, COL: 1, VALUE: 15.16
ROW: 7, COL: 1, VALUE: 7.13
ROW: 8, COL: 1, VALUE: 11.49
ROW: 9, COL: 1, VALUE: -3.1
ROW: 10, COL: 1, VALUE: 11.51
ROW: 11, COL: 1, VALUE: 2.63
ROW: 12, COL: 1, VALUE: 6.3
MUNICIPAL INCOME - CLASS B
<TABLE>
<CAPTION>
Calendar year total returns+ 1988 1989 1990 1991 1992
<S> <C> <C> <C> <C> <C>
MUNICIPAL INCOME - CLASS B 11.80% 13.09% 10.29% 12.18% 11.11%
Lipper General Municipal Debt 11.53% 9.65% 6.05% 12.09% 8.79%
Funds Average M
Lehman Brothers Municipal Bond Inde x 10.16% 10.79% 7.29% 12.14% 8.81%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90%
</TABLE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C>
MUNICIPAL INCOME - CLASS B 13.79% -8.54% 15.60% 2.28% 9.38%
Lipper General Municipal Debt 12.47% -6.50% 16.84% 3.30% 9.11%
Funds Average M
Lehman Brothers Municipal Bond Index 12.29% -5.17% 17.45% 4.43% 9.19%
Consumer Price Index 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
(LARGE SOLID BOX) MUNICIPAL INCOME - CLASS B
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: NIL
ROW: 3, COL: 1, VALUE: 11.8
ROW: 4, COL: 1, VALUE: 13.09
ROW: 5, COL: 1, VALUE: 10.29
ROW: 6, COL: 1, VALUE: 12.18
ROW: 7, COL: 1, VALUE: 11.11
ROW: 8, COL: 1, VALUE: 13.79
ROW: 9, COL: 1, VALUE: -8.52
ROW: 10, COL: 1, VALUE: 15.6
ROW: 11, COL: 1, VALUE: 2.28
ROW: 12, COL: 1, VALUE: 9.380000000000001
INTERMEDIATE MUNICIPAL INCOME - CLASS B
<TABLE>
<CAPTION>
Calendar year total returns+ 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INTERMEDIATE MUNICIPAL INCOME - CLASS B 7.38% 7.79% 6.37% 9.64% 7.32% 9.43% -6.13% 13.22% 3.23% 7.22%
Lipper Intermediate Municipal Debt 7.57% 8.26% 6.59% 10.52% 7.80% 10.18% -3.51% 12.89% 3.70% 7.16%
Funds Average N
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
<PAGE>
(LARGE SOLID BOX) INTERMEDIATE MUNICIPAL INCOME -
CLASS B
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 13.71
ROW: 2, COL: 1, VALUE: 2.33
ROW: 3, COL: 1, VALUE: 7.38
ROW: 4, COL: 1, VALUE: 7.79
ROW: 5, COL: 1, VALUE: 6.37
ROW: 6, COL: 1, VALUE: 9.639999999999999
ROW: 7, COL: 1, VALUE: 7.319999999999999
ROW: 8, COL: 1, VALUE: 9.43
ROW: 9, COL: 1, VALUE: -6.119999999999999
ROW: 10, COL: 1, VALUE: 13.22
ROW: 11, COL: 1, VALUE: 2.84
ROW: 12, COL: 1, VALUE: 7.22
TECHNOQUANT GROWTH - CLASS C
<TABLE>
<CAPTION>
Calendar year total returns+ 1997
<S> <C>
TECHNOQUANT GROWTH - CLASS C 11.35%
Lipper Capital Appreciation Funds AverageA 20.36%
S&P 500 33.36%
Consumer Price Index 1.70%
</TABLE>
MID CAP - CLASS C
<TABLE>
<CAPTION>
Calendar year total returns+ 1997
<S> <C>
MID CAP - CLASS C 26.67%
Lipper Mid Cap Funds Average B 19.63%
S&P 400 32.25%
Consumer Price Index 1.70%
</TABLE>
EQUITY GROWTH - CLASS C
<TABLE>
<CAPTION>
Calendar year total returns+ 1988 1989 1990 1991 1992 1993
<S> <C> <C> <C> <C> <C> <C>
EQUITY GROWTH - CLASS C 15.57% 44.84% 6.93% 64.71% 9.89% 14.85%
Lipper Growth Funds AverageC 14.79% 26.91% -4.49% 36.70% 8.08% 10.63%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62% 10.08%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75%
</TABLE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1994 1995 1996 1997
<S> <C> <C> <C> <C>
EQUITY GROWTH - CLASS C -0.89% 39.14% 15.69% 23.11%
Lipper Growth Funds AverageC -2.17% 30.79% 19.24% 25.30%
S&P 500 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 2.67% 2.54% 3.32% 1.70%
</TABLE>
<PAGE>
(LARGE SOLID BOX) EQUITY GROWTH - CLASS C
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: -0.5700000000000001
ROW: 3, COL: 1, VALUE: 15.57
ROW: 4, COL: 1, VALUE: 44.84
ROW: 5, COL: 1, VALUE: 6.930000000000001
ROW: 6, COL: 1, VALUE: 64.71000000000001
ROW: 7, COL: 1, VALUE: 9.890000000000001
ROW: 8, COL: 1, VALUE: 14.85
ROW: 9, COL: 1, VALUE: -0.8900000000000001
ROW: 10, COL: 1, VALUE: 39.14
ROW: 11, COL: 1, VALUE: 15.69
ROW: 12, COL: 1, VALUE: 23.11
GROWTH OPPORTUNITIES - CLASS C
<TABLE>
<CAPTION>
Calendar year total returns+ 1988 1989 1990 1991 1992
<S> <C> <C> <C> <C> <C>
GROWTH OPPORTUNITIES - CLASS C 33.28% 24.14% -1.65% 42.68% 15.03%
Lipper Growth Funds AverageC 14.79% 26.91% -4.49% 36.70% 8.08%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90%
</TABLE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C>
GROWTH OPPORTUNITIES - CLASS C 22.17% 2.86% 33.04% 17.73% 28.00%
Lipper Growth Funds AverageC 10.63% -2.17% 30.79% 19.24% 25.30%
S&P 500 10.08% 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
(LARGE SOLID BOX) GROWTH OPPORTUNITIES - CLASS C
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: NIL
ROW: 3, COL: 1, VALUE: 33.28
ROW: 4, COL: 1, VALUE: 24.14
ROW: 5, COL: 1, VALUE: -1.65
ROW: 6, COL: 1, VALUE: 42.68
ROW: 7, COL: 1, VALUE: 15.03
ROW: 8, COL: 1, VALUE: 22.17
ROW: 9, COL: 1, VALUE: 2.86
ROW: 10, COL: 1, VALUE: 33.04
ROW: 11, COL: 1, VALUE: 17.73
ROW: 12, COL: 1, VALUE: 28.0
LARGE CAP - CLASS C
<TABLE>
<CAPTION>
Calendar year total returns+ 1997
<S> <C>
LARGE CAP - CLASS C 23.12%
Lipper Growth Funds AverageC 25.30%
S&P 500 33.36%
Consumer Price Index 1.70%
</TABLE>
GROWTH & INCOME - CLASS C
<TABLE>
<CAPTION>
Calendar year total returns+ 1997
<S> <C>
GROWTH & INCOME - CLASS C 27.06%
Lipper Growth and Income Funds AverageD 27.14%
S&P 500 33.36%
Consumer Price Index 1.70%
</TABLE>
<PAGE>
EQUITY INCOME - CLASS C
<TABLE>
<CAPTION>
Calendar year total returns+ 1988 1989 1990 1991 1992
<S> <C> <C> <C> <C> <C>
EQUITY INCOME - CLASS C 23.23% 18.43% -14.28% 29.81% 14.68%
Lipper Equity Income Funds AverageE 16.74% 22.18% -6.78% 26.86% 9.77%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90%
</TABLE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C>
EQUITY INCOME - CLASS C 18.03% 6.39% 31.96% 14.00% 25.29%
Lipper Equity Income Funds AverageE 13.66% -2.54% 30.17% 18.85% 27.51%
S&P 500 10.08% 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
(LARGE SOLID BOX) EQUITY INCOME - CLASS C
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: -2.24
ROW: 3, COL: 1, VALUE: 23.23
ROW: 4, COL: 1, VALUE: 18.43
ROW: 5, COL: 1, VALUE: -14.28
ROW: 6, COL: 1, VALUE: 29.81
ROW: 7, COL: 1, VALUE: 14.68
ROW: 8, COL: 1, VALUE: 18.03
ROW: 9, COL: 1, VALUE: 6.39
ROW: 10, COL: 1, VALUE: 31.96
ROW: 11, COL: 1, VALUE: 14.0
ROW: 12, COL: 1, VALUE: 25.29
BALANCED - CLASS C
<TABLE>
<CAPTION>
Calendar year total returns+ 1988 1989 1990 1991 1992
<S> <C> <C> <C> <C> <C>
BALANCED - CLASS C 20.89% 24.60% -2.94% 34.48% 9.20%
Lipper Balanced Funds AverageF 12.34% 19.57% -0.57% 26.69% 7.07%
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90%
</TABLE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C>
BALANCED - CLASS C 19.66% -5.09% 14.06% 8.29% 21.51%
Lipper Balanced Funds AverageF 10.91% -2.50% 25.16% 13.76% 19.00%
S&P 500 10.08% 1.32% 37.58% 22.96% 33.36%
Consumer Price Index 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
(LARGE SOLID BOX) BALANCED - CLASS C
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: NIL
ROW: 3, COL: 1, VALUE: 20.89
ROW: 4, COL: 1, VALUE: 24.6
ROW: 5, COL: 1, VALUE: -2.94
ROW: 6, COL: 1, VALUE: 34.48
ROW: 7, COL: 1, VALUE: 9.199999999999999
ROW: 8, COL: 1, VALUE: 19.66
ROW: 9, COL: 1, VALUE: -5.09
ROW: 10, COL: 1, VALUE: 14.06
ROW: 11, COL: 1, VALUE: 8.289999999999999
ROW: 12, COL: 1, VALUE: 21.51
HIGH YIELD - CLASS C
<TABLE>
<CAPTION>
Calendar year total returns+ 1988 1989 1990 1991 1992
<S> <C> <C> <C> <C> <C>
HIGH YIELD - CLASS C 17.24% 3.64% 7.30% 34.94% 23.09%
Lipper High Current Yield Funds AverageG 12.89% -0.58% -10.13% 36.91% 17.51%
Merrill Lynch High Yield Master Index 13.47% 4.23% -4.35% 34.58% 18.16%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90%
</TABLE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C>
HIGH YIELD - CLASS C 20.45% -2.11% 18.34% 12.45% 14.18%
Lipper High Current Yield Funds AverageG 18.95% -3.85% 16.43% 13.67% 12.96%
Merrill Lynch High Yield Master Index 17.18% -1.17% 19.91% 11.06% 12.82%
Consumer Price Index 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
<PAGE>
(LARGE SOLID BOX) HIGH YIELD - CLASS C
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: NIL
ROW: 3, COL: 1, VALUE: 17.24
ROW: 4, COL: 1, VALUE: 3.64
ROW: 5, COL: 1, VALUE: 7.3
ROW: 6, COL: 1, VALUE: 34.94
ROW: 7, COL: 1, VALUE: 23.09
ROW: 8, COL: 1, VALUE: 20.45
ROW: 9, COL: 1, VALUE: -2.11
ROW: 10, COL: 1, VALUE: 18.34
ROW: 11, COL: 1, VALUE: 12.45
ROW: 12, COL: 1, VALUE: 14.18
STRATEGIC INCOME - CLASS C
<TABLE>
<CAPTION>
Calendar year total returns+ 1995 1996 1997
<S> <C> <C> <C>
STRATEGIC INCOME - CLASS C 21.35% 12.14% 8.55%
Lipper Multi-Sector Income Funds AverageH 16.92% 11.74% 8.77%
Merrill Lynch High Yield Master Index 19.91% 11.06% 12.82%
Consumer Price Index 2.54% 3.32% 1.70%
</TABLE>
(LARGE SOLID BOX) STRATEGIC INCOME - CLASS C
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 0.0
ROW: 2, COL: 1, VALUE: 0.0
ROW: 3, COL: 1, VALUE: 0.0
ROW: 4, COL: 1, VALUE: 0.0
ROW: 5, COL: 1, VALUE: 0.0
ROW: 6, COL: 1, VALUE: 0.0
ROW: 7, COL: 1, VALUE: 0.0
ROW: 8, COL: 1, VALUE: 0.0
ROW: 9, COL: 1, VALUE: 0.0
ROW: 10, COL: 1, VALUE: 21.35
ROW: 11, COL: 1, VALUE: 12.14
ROW: 12, COL: 1, VALUE: 8.550000000000001
GOVERNMENT INVESTMENT - CLASS C
<TABLE>
<CAPTION>
Calendar year total returns+ 1988 1989 1990 1991 1992
<S> <C> <C> <C> <C> <C>
GOVERNMENT INVESTMENT - CLASS C 6.57% 11.75% 8.37% 13.45% 6.48%
Lipper General U.S. Government Bond 6.67% 12.46% 8.22% 14.44% 6.41%
Funds AverageJ
Lehman Brothers Government Bond Index 7.03% 14.22% 8.72% 15.32% 7.23%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90%
</TABLE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C>
GOVERNMENT INVESTMENT - CLASS C 9.36% -4.38% 16.92% 1.37% 8.00%
Lipper General U.S. Government Bond 9.42% -4.64% 17.34% 1.72% 8.84%
Funds AverageJ
Lehman Brothers Government Bond Index 10.66% -3.37% 18.34% 2.77% 9.59%
Consumer Price Index 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
(LARGE SOLID BOX) GOVERNMENT INVESTMENT -
CLASS C
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: NIL
ROW: 3, COL: 1, VALUE: 6.57
ROW: 4, COL: 1, VALUE: 11.75
ROW: 5, COL: 1, VALUE: 8.370000000000001
ROW: 6, COL: 1, VALUE: 13.45
ROW: 7, COL: 1, VALUE: 6.48
ROW: 8, COL: 1, VALUE: 9.360000000000001
ROW: 9, COL: 1, VALUE: -4.38
ROW: 10, COL: 1, VALUE: 16.92
ROW: 11, COL: 1, VALUE: 1.37
ROW: 12, COL: 1, VALUE: 8.0
INTERMEDIATE BOND - CLASS C
<TABLE>
<CAPTION>
Calendar year total returns+ 1988 1989 1990 1991 1992
<S> <C> <C> <C> <C> <C>
INTERMEDIATE BOND - CLASS C 7.84% 12.11% 7.91% 15.16% 7.13%
Lipper Short-Intermediate Investment 6.16% 9.94% 8.11% 14.01% 6.24%
Grade Bond Funds AverageK
Lehman Brothers Intermediate 6.67% 12.77% 9.16% 14.62% 7.17%
Government/Corporate Bond Index
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90%
</TABLE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C>
INTERMEDIATE BOND - CLASS C 11.49% -3.12% 11.51% 2.63% 6.27%
Lipper Short-Intermediate Investment 7.51% -2.08% 12.88% 4.17% 6.62%
Grade Bond Funds AverageK
Lehman Brothers Intermediate 8.79% -1.93% 15.33% 4.05% 7.87%
Government/Corporate Bond Index
Consumer Price Index 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
<PAGE>
(LARGE SOLID BOX) INTERMEDIATE BOND - CLASS C
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: 2.32
ROW: 3, COL: 1, VALUE: 7.84
ROW: 4, COL: 1, VALUE: 12.11
ROW: 5, COL: 1, VALUE: 7.91
ROW: 6, COL: 1, VALUE: 15.16
ROW: 7, COL: 1, VALUE: 7.13
ROW: 8, COL: 1, VALUE: 11.49
ROW: 9, COL: 1, VALUE: -3.12
ROW: 10, COL: 1, VALUE: 11.51
ROW: 11, COL: 1, VALUE: 2.63
ROW: 12, COL: 1, VALUE: 6.270000000000001
SHORT FIXED-INCOME - CLASS C
<TABLE>
<CAPTION>
Calendar year total returns+ 1988 1989 1990 1991 1992
<S> <C> <C> <C> <C> <C>
SHORT FIXED-INCOME - CLASS C 6.19% 10.31% 5.87% 13.37% 7.61%
Lipper Short Investment Grade Bond 6.86% 10.22% 7.87% 12.88% 5.97%
Funds AverageL
Lehman Brothers 1-3 Year 6.84% 10.97% 9.69% 11.83% 6.35%
Government/Corporate Bond Index
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90%
</TABLE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C>
SHORT FIXED-INCOME - CLASS C 9.49% -3.37% 9.81% 4.57% 6.01%
Lipper Short Investment Grade Bond 6.45% -0.44% 10.84% 4.64% 6.19%
Funds AverageL
Lehman Brothers 1-3 Year 5.55% 0.55% 10.96% 5.26% 6.66%
Government/Corporate Bond Index
Consumer Price Index 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
(LARGE SOLID BOX) SHORT FIXED-INCOME - CLASS C
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: NIL
ROW: 3, COL: 1, VALUE: 6.19
ROW: 4, COL: 1, VALUE: 10.31
ROW: 5, COL: 1, VALUE: 5.87
ROW: 6, COL: 1, VALUE: 13.37
ROW: 7, COL: 1, VALUE: 7.609999999999999
ROW: 8, COL: 1, VALUE: 9.49
ROW: 9, COL: 1, VALUE: -3.37
ROW: 10, COL: 1, VALUE: 9.810000000000001
ROW: 11, COL: 1, VALUE: 4.57
ROW: 12, COL: 1, VALUE: 6.01
MUNICIPAL INCOME - CLASS C
<TABLE>
<CAPTION>
Calendar year total returns+ 1988 1989 1990 1991 1992
<S> <C> <C> <C> <C> <C>
MUNICIPAL INCOME- CLASS C 11.80% 13.09% 10.29% 12.18% 11.11%
Lipper General Municipal Debt 11.53% 9.65% 6.05% 12.09% 8.79%
Funds Average M
Lehman Brothers Municipal Bond Index 10.16% 10.79% 7.29% 12.14% 8.81%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90%
</TABLE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C>
MUNICIPAL INCOME- CLASS C 13.79% -8.54% 15.60% 2.28% 9.34%
Lipper General Municipal Debt 12.47% -6.50% 16.84% 3.30% 9.11%
Funds Average M
Lehman Brothers Municipal Bond Index 12.29% -5.17% 17.45% 4.43% 9.19%
Consumer Price Index 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
(LARGE SOLID BOX) MUNICIPAL INCOME - CLASS C
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: NIL
ROW: 3, COL: 1, VALUE: 11.8
ROW: 4, COL: 1, VALUE: 13.09
ROW: 5, COL: 1, VALUE: 10.29
ROW: 6, COL: 1, VALUE: 12.18
ROW: 7, COL: 1, VALUE: 11.11
ROW: 8, COL: 1, VALUE: 13.79
ROW: 9, COL: 1, VALUE: -8.539999999999999
ROW: 10, COL: 1, VALUE: 15.6
ROW: 11, COL: 1, VALUE: 2.28
ROW: 12, COL: 1, VALUE: 9.34
INTERMEDIATE MUNICIPAL INCOME - CLASS C
<TABLE>
<CAPTION>
Calendar year total returns+ 1988 1989 1990 1991 1992
<S> <C> <C> <C> <C> <C>
INTERMEDIATE MUNICIPAL INCOME - CLASS C 7.38% 7.79% 6.37% 9.64% 7.32%
Lipper Intermediate Municipal Debt 7.57% 8.26% 6.59% 10.52% 7.80%
Funds AverageN
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90%
</TABLE>
<TABLE>
<CAPTION>
Calendar year total returns+ 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C>
INTERMEDIATE MUNICIPAL INCOME - CLASS C 9.43% -6.13% 13.22% 3.23% 7.21%
Lipper Intermediate Municipal Debt 10.18% -3.51% 12.89% 3.70% 7.16%
Funds AverageN
Consumer Price Index 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
<PAGE>
(LARGE SOLID BOX) INTERMEDIATE MUNICIPAL INCOME -
CLASS C
Percentage (%)
Row: 1, Col: 1, Value: nil
Row: 2, Col: 1, Value: 2.33
Row: 3, Col: 1, Value: 7.38
Row: 4, Col: 1, Value: 7.79
Row: 5, Col: 1, Value: 6.37
Row: 6, Col: 1, Value: 9.639999999999999
Row: 7, Col: 1, Value: 7.319999999999999
Row: 8, Col: 1, Value: 9.43
Row: 9, Col: 1, Value: -6.13
Row: 10, Col: 1, Value: 13.22
Row: 11, Col: 1, Value: 3.23
Row: 12, Col: 1, Value: 7.21
+ RETURNS DO NOT INCLUDE THE EFFECT OF PAYING CLASS A OR CLASS T'S MAXIMUM
FRONT-END SALES CHARGE OR CLASS B AND CLASS C'S APPLICABLE CONTINGENT DEFERRED
SALES CHARGE.
INITIAL OFFERING OF CLASS A FOR EACH FUND (EXCEPT TECHNOQUANT GROWTH,
GROWTH & INCOME, AND MORTGAGE SECURITIES )TOOK PLACE ON SEPTEMBER 3, 1996.
CLASS A RETURNS PRIOR TO SEPTEMBER 3, 1996 (EXCEPT FOR EQUITY GROWTH, EQUITY
INCOME, INTERMEDIATE BOND, AND INTERMEDIATE MUNICIPAL INCOME) ARE THOSE OF CLASS
T WHICH REFLECT A 12B-1 FEE OF 0.50% (0.65% PRIOR TO JANUARY 1, 1996) FOR EQUITY
FUNDS, 0.25% FOR BOND FUND S, AND 0.15% FOR SHORT-TERM BOND FUNDS. IF
CLASS A'S 12B-1 FEE HAD BEEN REFLECTED, TOTAL RETURNS PRIOR TO SEPTEMBER 3, 1996
FOR THE EQUITY FUNDS AND THE B OND FUNDS WOULD HAVE BEEN HIGHER.
FOR EQUITY GROWTH, EQUITY INCOME, INTERMEDIATE BOND, AND INTERMEDIATE
MUNICIPAL INCOME, CLASS A RETURNS FROM SEPTEMBER 3, 1996 THROUGH SEPTEMBER 10,
1992 ARE THOSE OF CLASS T WHICH REFLECT A 12B-1 FEE OF 0.50% (0.65% PRIOR TO
JANUARY 1, 1996) FOR EQUITY GROWTH AND EQUITY INCOME AND 0.25% FOR INTERMEDIATE
BOND AND INTERMEDIATE MUNICIPAL INCOME. CLASS A RETURNS PRIOR TO SEPTEMBER 10,
1992 ARE THOSE OF INSTITUTIONAL CLASS WHICH HAS NO 12B-1 FEE. IF CLASS A'S 12B-1
FEE HAD BEEN REFLECTED, TOTAL RETURNS PRIOR TO SEPTEMBER 3, 1996 THROUGH
SEPTEMBER 10, 1992 WOULD HAVE BEEN HIGHER AND TOTAL RETURNS PRIOR TO SEPTEMBER
10, 1992 WOULD HAVE BEEN LOWER.
INITIAL OFFERING OF CLASS A, CLASS T, AND CLASS B OF MORTGAGE SECURITIES
TOOK PLACE ON MARCH 3, 1997. CLASS A, CLASS T, AND CLASS B RETURNS PRIOR TO
MARCH 3, 1997 ARE THOSE OF INITIAL CLASS WHICH HAS NO 12B-1 FEE. IF CLASS A'S,
CLASS T'S, AND CLASS B'S RESPECTIVE 12B-1 FEES HAD BEEN REFLECTED, TOTAL RETURNS
PRIOR TO MARCH 3, 1997 WOULD HAVE BEEN LOWER.
INITIAL OFFERING OF CLASS T OF EQUITY GROWTH, EQUITY INCOME, INTERMEDIATE
BOND, AND INTERMEDIATE MUNICIPAL INCOME TOOK PLACE ON SEPTEMBER 10, 1992. CLASS
T RETURNS PRIOR TO SEPTEMBER 10, 1992 ARE THOSE OF INSTITUTIONAL CLASS WHICH HAS
NO 12B-1 FEE. IF CLASS T'S 12B-1 FEE HAD BEEN REFLECTED, TOTAL RETURNS PRIOR TO
SEPTEMBER 10, 1992 WOULD HAVE BEEN LOWER.
INITIAL OFFERING OF CLASS B OF EQUITY GROWTH TOOK PLACE ON DECEMBER 31,
1996. CLASS B RETURNS FROM DECEMBER 31, 1996 THROUGH SEPTEMBER 10, 1992 ARE
THOSE OF CLASS T WHICH REFLECT A 12B-1 FEE OF 0.50% (0.65% PRIOR TO JANUARY 1,
1996). CLASS B RETURNS PRIOR TO SEPTEMBER 10, 1992 ARE THOSE OF INSTITUTIONAL
CLASS WHICH HAS NO 12B-1 FEE. IF CLASS B'S 12B-1 FEE HAD BEEN REFLECTED, TOTAL
RETURNS PRIOR TO DECEMBER 31, 1996 WOULD HAVE BEEN LOWER.
INITIAL OFFERING OF CLASS B OF BALANCED TOOK PLACE ON DECEMBER 31, 1996.
CLASS B RETURNS PRIOR TO DECEMBER 31, 1996 ARE THOSE OF CLASS T WHICH REFLECT A
12B-1 FEE OF 0.50% (0.65% PRIOR TO JANUARY 1, 1996). IF CLASS B'S 12B-1 FEE HAD
BEEN REFLECTED, TOTAL RETURNS PRIOR TO DECEMBER 31, 1996 WOULD HAVE BEEN
LOWER.
INITIAL OFFERING OF CLASS B OF GROWTH OPPORTUNITIES TOOK PLACE ON MARCH 3,
1997. CLASS B RETURNS PRIOR TO MARCH 3, 1997 ARE THOSE OF CLASS T WHICH REFLECT
A 12B-1 FEE OF 0.50%(0.65% PRIOR TO JANUARY 1, 1996). IF CLASS B'S 12B-1 FEE HAD
BEEN REFLECTED , TOTAL RETURNS PRIOR TO MARCH 3, 199 7 WOULD HAVE
BEEN LOWER.
INITIAL OFFERING OF CLASS B OF EQUITY INCOME, INTERMEDIATE BOND, AND
INTERMEDIATE MUNICIPAL INCOME TOOK PLACE ON JUNE 30, 1994. CLASS B RETURNS PRIOR
TO JUNE 30, 1994 THROUGH SEPTEMBER 10, 1992 ARE THOSE OF CLASS T WHICH REFLECT A
12B-1 FEE OF 0.65% FOR EQUITY INCOME, AND 0.25% FOR INTERMEDIATE BOND AND
INTERMEDIATE MUNICIPAL INCOME. CLASS B RETURNS PRIOR TO SEPTEMBER 10, 1992 ARE
THOSE OF INSTITUTIONAL CLASS WHICH HAS NO 12B-1 FEE. IF CLASS B'S 12B-1 FEE HAD
BEEN REFLECTED, TOTAL RETURNS PRIOR TO JUNE 30, 1994 WOULD HAVE BEEN LOWER.
INITIAL OFFERING OF CLASS B OF STRATEGIC OPPORTUNITIES TOOK PLACE ON JUNE
30, 1994. CLASS B RETURNS PRIOR TO JUNE 30, 1994 ARE THOSE OF CLASS T WHICH
REFLECT A 12B-1 FEE OF 0.65%. IF CLASS B'S 12B-1 FEE HAD BEEN REFLECTED, TOTAL
RETURNS PRIOR TO JUNE 30, 1994 WOULD HAVE BEEN LOWER.
INITIAL OFFERING OF CLASS B OF HIGH YIELD, GOVERNMENT INVESTMENT, AND
MUNICIPAL INCOME TOOK PLACE ON JUNE 30, 1994. CLASS B RETURNS PRIOR TO JUNE 30,
1994 ARE THOSE OF CLASS T WHICH REFLECT A 12B-1 FEE OF 0.25%. IF CLASS B'S 12B-1
FEE HAD BEEN REFLECTED, TOTAL RETURNS PRIOR TO JUNE 30, 1994 WOULD HAVE BEEN
LOWER.
INITIAL OFFERING OF CLASS C OF STRATEGIC INCOME TOOK PLACE ON NOVEMBER 3,
1997. CLASS C RETURNS PRIOR TO NOVEMBER 3, 1997 ARE THOSE OF CLASS B WHICH
REFLECT A 12B-1 FEE OF 0.90%(1.00% PRIOR TO JANUARY 1, 1996). IF CLASS C'S 12B-1
FEE HAD BEEN REFLECTED, TOTAL RETURNS PRIOR TO NOVEMBER 3, 1997 THROUGH
JANUARY 1, 1996 WOULD HAVE BEEN LOWER.
INITIAL OFFERING OF CLASS C OF EQUITY GROWTH TOOK PLACE ON NOVEMBER 3,
1997. CLASS C RETURNS PRIOR TO NOVEMBER 3, 1997 THROUGH DECEMBER 31, 1996 ARE
THOSE OF CLASS B WHICH REFLECT A 12B-1 FEE OF 1.00%. CLASS C RETURNS PRIOR TO
DECEMBER 31, 1996 THROUGH SEPTEMBER 10, 1992 ARE THOSE OF CLASS T WHICH REFLECT
A 12B-1 FEE OF 0.65%. CLASS C RETURNS PRIOR TO SEPTEMBER 10, 1992 ARE THOSE OF
INSTITUTIONAL CLASS WHICH HAS NO 12B-1 FEE. IF CLASS C'S 12B-1 FEE HAD BEEN
REFLECTED, TOTAL RETURNS PRIOR TO DECEMBER 31, 1996 WOULD HAVE BEEN LOWER.
INITIAL OFFERING OF CLASS C OF GROWTH OPPORTUNITIES TOOK PLACE ON NOVEMBER
3, 1997. CLASS C RETURNS PRIOR TO NOVEMBER 3, 1997 THROUGH MARCH 3, 1997 ARE
THOSE OF CLASS B WHICH REFLECT A 12B-1 FEE OF 1.00%. CLASS C RETURNS PRIOR TO
MARCH 3, 1997 ARE THOSE OF CLASS T WHICH REFLECT A 12B-1 FEE OF 0.50% (0.65%
PRIOR TO JANUARY 1, 1996). IF CLASS C'S 12B-1 FEE HAD BEEN REFLECTED, TOTAL
RETURNS PRIOR TO MARCH 3, 1997 WOULD HAVE BEEN LOWER.
INITIAL OFFERING OF CLASS C OF BALANCED TOOK PLACE ON NOVEMBER 3, 1997.
CLASS C RETURNS PRIOR TO NOVEMBER 3, 1997 THROUGH DECEMBER 31, 1996 ARE THOSE OF
CLASS B WHICH REFLECT A 12B-1 FEE OF 1.00%. CLASS C RETURNS PRIOR TO DECEMBER
31, 1996 ARE THOSE OF CLASS T WHICH REFLECT A 12B-1 FEE OF 0.50% (0.65% PRIOR TO
JANUARY 1, 1996). IF CLASS C'S 12B-1 FEE HAD BEEN REFLECTED, TOTAL RETURNS PRIOR
TO DECEMBER 31, 1996 WOULD HAVE BEEN LOWER.
INITIAL OFFERING OF CLASS C OF HIGH YIELD, GOVERNMENT INVESTMENT, AND
MUNICIPAL INCOME TOOK PLACE ON NOVEMBER 3, 1997. CLASS C RETURNS PRIOR TO
NOVEMBER 3, 1997 THROUGH JUNE 30, 1994 ARE THOSE OF CLASS B WHICH REFLECT A
12B-1 FEE OF 0.90% (1.00% PRIOR TO JANUARY 1, 1996). CLASS C RETURNS PRIOR TO
JUNE 30, 1994 ARE THOSE OF CLASS T WHICH REFLECT A 12B-1 FEE OF 0.25%. IF CLASS
C'S 12B-1 FEE HAD BEEN REFLECTED, TOTAL RETURNS PRIOR TO NOVEMBER 3, 1997
THROUGH JANUARY 1, 1996 AND PRIOR TO JUNE 30, 1994 WOULD HAVE BEEN LOWER.
INITIAL OFFERING OF CLASS C OF TECHNOQUANT GROWTH, MID CAP, LARGE CAP, AND
GROWTH & INCOME TOOK PLACE ON NOVEMBER 3, 1997. CLASS C RETURNS PRIOR TO
NOVEMBER 3, 1997 ARE THOSE OF CLASS B WHICH REFLECT A 12B-1 FEE OF 1.00%.
INITIAL OFFERING OF CLASS C OF SHORT FIXED-INCOME TOOK PLACE ON
NOVEMBER 3, 1997. CLASS C RETURNS PRIOR TO NOVEMBER 3, 1997 ARE THOSE OF CLASS T
WHICH REFLECT A 12B-1 FEE OF 0.15%. IF CLASS C'S 12B-1 FEE HAD BEEN REFLECTED,
TOTAL RETURNS WOULD HAVE BEEN LOWER.
INITIAL OFFERING OF CLASS C OF EQUITY INCOME, INTERMEDIATE BOND, AND
INTERMEDIATE MUNICIPAL INCOME TOOK PLACE ON NOVEMBER 3, 1997. CLASS C RETURNS
PRIOR TO NOVEMBER 3, 1997 THROUGH JUNE 30, 1994 ARE THOSE OF CLASS B WHICH
REFLECT A 12B-1 FEE OF 1.00% FOR EQUITY INCOME AND 0.90% (1.00% PRIOR TO JANUARY
1, 1996) FOR INTERMEDIATE BOND AND INTERMEDIATE MUNICIPAL INCOME. CLASS C
RETURNS PRIOR TO JUNE 30, 1994 THROUGH SEPTEMBER 10, 1992 ARE THOSE OF CLASS T
WHICH REFLECT A 12B-1 FEE OF 0.65% FOR EQUITY INCOME AND 0.25% FOR INTERMEDIATE
BOND AND INTERMEDIATE MUNICIPAL INCOME. CLASS C RETURNS PRIOR TO SEPTEMBER 10,
1992 ARE THOSE OF INSTITUTIONAL CLASS WHICH HAS NO 12B-1 FEE. IF CLASS C'S 12B-1
FEE HAD BEEN REFLECTED, TOTAL RETURNS FOR EQUITY INCOME PRIOR TO JUNE 30, 1994
WOULD HAVE BEEN LOWER. IF CLASS C'S 12B-1 FEE HAD BEEN REFLECTED, TOTAL RETURNS
FOR INTERMEDIATE BOND AND INTERMEDIATE MUNICIPAL INCOME PRIOR TO NOVEMBER 3,
1997 THROUGH JANUARY 1, 1996 AND PRIOR TO JUNE 30, 1994 WOULD HAVE BEEN
LOWER.
[A] THE LIPPER CAPITAL APPRECIATION FUNDS AVERAGE CURRENTLY REFLECTS
THE PERFORMANCE OF OVER 231 MUTUAL FUNDS WITH SIMILAR OBJECTIVES.
[B] THE LIPPER MID CAP FUNDS AVERAGE CURRENTLY REFLECTS THE
PERFORMANCE OF OVER 249 MUTUAL FUNDS WITH SIMILAR OBJECTIVES.
[C ] THE LIPPER GROWTH FUNDS AVERAGE CURRENTLY REFLECTS THE
PERFORMANCE OF OVER 820 MUTUAL FUNDS WITH SIMILAR OBJECTIVES.
[D] THE LIPPER GROWTH AND INCOME FUNDS AVERAGE CURRENTLY REFLECTS
THE PERFORMANCE OF OVER 611 MUTUAL FUNDS WITH SIMILAR OBJECTIVES.
[E] THE LIPPER EQUITY INCOME FUNDS AVERAGE CURRENTLY REFLECTS THE
PERFORMANCE OF OVER 182 MUTUAL FUNDS WITH SIMILAR OBJECTIVES.
[F] THE LIPPER BALANCED FUNDS AVERAGE CURRENTLY REFLECTS THE
PERFORMANCE OF OVER 350 MUTUAL FUNDS WITH SIMILAR OBJECTIVES.
[G] THE LIPPER HIGH CURRENT YIELD FUNDS AVERAGE CURRENTLY REFLECTS
THE PERFORMANCE OF OVER 181 MUTUAL FUNDS WITH SIMILAR OBJECTIVES.
[H] THE LIPPER MULTI-SECTOR INCOME FUNDS AVERAGE CURRENTLY
REFLECTS THE PERFORMANCE OF OVER 81 MUTUAL FUNDS WITH SIMILAR OBJECTIVES.
[I] THE LIPPER U.S. MORTGAGE FUNDS AVERAGE CURRENTLY REFLECTS THE
PERFORMANCE OF OVER 59 MUTUAL FUNDS WITH SIMILAR OBJECTIVES.
[J] THE LIPPER GENERAL U.S. GOVERNMENT BOND FUNDS AVERAGE
CURRENTLY REFLECTS THE PERFORMANCE OF OVER
179 MUTUAL FUNDS WITH SIMILAR OBJECTIVES.
[K ] THE LIPPER SHORT- INTERMEDIATE INVESTMENT GRADE BOND FUNDS
AVERAGE CURRENTLY REFLECTS THE PERFORMANCE OF OVER 195 MUTUAL FUNDS WITH
SIMILAR OBJECTIVES.
[L] THE LIPPER SHORT INVESTMENT GRADE BOND FUNDS AVERAGE CURRENTLY
REFLECTS THE PERFORMANCE OF OVER 101 MUTUAL FUNDS WITH SIMILAR
OBJECTIVES.
[M] THE LIPPER GENERAL MUNICIPAL DEBT FUNDS AVERAGE CURRENTLY
REFLECTS THE PERFORMANCE OF OVER 235 MUTUAL FUNDS WITH SIMILAR
OBJECTIVES.
[N] THE LIPPER INTERMEDIATE MUNICIPAL DEBT FUNDS AVERAGE CURRENTLY
REFLECTS THE PERFORMANCE OF OVER 140 MUTUAL FUNDS WITH SIMILAR
OBJECTIVES.
[O] THE LIPPER SHORT-INTERMEDIATE MUNICIPAL DEBT FUNDS AVERAGE
CURRENTLY REFLECTS THE PERFORMANCE OF OVER
33 MUTUAL FUNDS WITH SIMILAR OBJECTIVES.
TECHNOQUANT IS A TRADEMARK OF FMR CORP.
FIDELITY ADVISOR FUNDS
INSTITUTIONAL CLASS
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how
each fund invests and the services available to shareholders.
To learn more about each fund and its investments, you can obtain a
copy of a fund's most recent financial report and portfolio listing or
a copy of the Statement of Additional Information (SAI) dated February
28, 1998. The SAI has been filed with the Securities and Exchange
Commission (SEC) and is available along with other related materials
on the SEC's Internet Web site (http://www.sec.gov). The SAI is
incorporated herein by reference (legally forms a part of the
prospectus). For a free copy of either document, contact Fidelity
Distributors Corporation (FDC), 82 Devonshire Street, Boston, MA
02109, or your investment professional.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR
OBLIGATIONS OF, OR GUARANTEED BY, ANY
DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY
THE FDIC, FEDERAL RESERVE BOARD OR ANY OTHER
AGENCY, AND ARE SUBJECT TO INVESTMENT RISKS,
INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT
INVESTED.
HIGH YIELD AND STRATEGIC INCOME MAY INVEST SIGNIFICANTLY IN
LOWER-QUALITY DEBT SECURITIES, SOMETIMES CALLED "JUNK BONDS." THESE
SECURITIES CARRY GREATER RISKS, SUCH AS THE RISK OF DEFAULT, THAN
OTHER DEBT SECURITIES.
LIKE ALL MUTUAL FUNDS, THESE SECURITIES HAVE NOT
BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
ACOMI-PRO-0298
GROWTH FUNDS:
Fidelity Advisor TechnoQuantSM Growth Fund
Fidelity Advisor Mid Cap Fund
Fidelity Advisor Equity Growth Fund
Fidelity Advisor Growth Opportunities Fund
Fidelity Advisor Strategic Opportunities Fund
Fidelity Advisor Large Cap Fund
GROWTH AND INCOME FUNDS:
Fidelity Advisor Growth & Income Fund
Fidelity Advisor Equity Income Fund
Fidelity Advisor Balanced Fund
TAXABLE INCOME FUNDS:
Fidelity Advisor High Yield Fund
Fidelity Advisor Strategic Income Fund
Fidelity Advisor Mortgage Securities Fund
Fidelity Advisor Government Investment Fund
Fidelity Advisor Intermediate Bond Fund
Fidelity Advisor Short Fixed-Income Fund
MUNICIPAL FUNDS:
Fidelity Advisor Municipal Income Fund
(formerly Fidelity Advisor High Income Municipal Fund)
Fidelity Advisor Intermediate Municipal Income Fund
Fidelity Advisor Short-Intermediate Municipal Income Fund
PROSPECTUS
FEBRUARY 28, 1998(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON,
MA 02109
CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
KEY FACTS WHO MAY WANT TO INVEST
EXPENSES Institutional Class's yearly operating expenses.
FINANCIAL HIGHLIGHTS A summary of each fund's financial data.
PERFORMANCE How each fund has done over time.
THE FUNDS IN DETAIL CHARTER How each fund is organized.
INVESTMENT PRINCIPLES AND RISKS Each fund's overall approach
to investing.
BREAKDOWN OF EXPENSES How operating costs are calculated
and what they include.
YOUR ACCOUNT TYPES OF ACCOUNTS Different ways to set up your account,
including tax- advantaged retirement plans.
HOW TO BUY SHARES Opening an account and making additional
investments.
HOW TO SELL SHARES Taking money out and closing your account.
INVESTOR SERVICES Services to help you manage your account.
SHAREHOLDER AND ACCOUNT POLICIES DIVIDENDS, CAPITAL GAINS, AND TAXES
TRANSACTION DETAILS Share price calculations and the timing of
purchases and redemptions.
EXCHANGE RESTRICTIONS
APPENDIX A
APPENDIX B
</TABLE>
KEY FACTS
WHO MAY WANT TO INVEST
Institutional Class shares are offered to:
1. Broker-dealer managed account programs that (i) charge an
asset-based fee and (ii) will have at least $1 million invested in the
Institutional Class of the Advisor funds. In addition, employee
benefit plans must have at least $50 million in plan assets;
2. Registered investment advisor managed account programs, provided
the registered investment advisor is not part of an organization
primarily engaged in the brokerage business, and the program (i)
charges an asset-based fee and (ii) will have at least $1 million
invested in the Institutional Class of the Advisor funds. In addition,
non-employee benefit plan accounts in the program must be managed on a
discretionary basis;
3. Trust institution and bank trust department managed account
programs that (i) charge an asset-based fee and (ii) will have at
least $1 million invested in the Institutional Class of the Advisor
funds. Accounts managed by third parties are not eligible to purchase
Institutional Class shares;
4. Insurance company separate accounts that will have at least $1
million invested in the Institutional Class of the Advisor funds; and
5. Fidelity Trustees and employees.
For purchases made by managed account programs or insurance company
separate accounts, FDC reserves the right to waive the requirement
that $1 million be invested in the Institutional Class of the Advisor
funds. Employee benefit plan investors must meet additional
requirements specified in the funds' SAI.
TechnoQuantSM Growth, Mid Cap, Equity Growth, Growth Opportunities,
Strategic Opportunities, Large Cap, Growth & Income, Equity Income,
Balanced, High Yield, Mortgage Securities, Government Investment,
Intermediate Bond, Short Fixed-Income, Municipal Income, and
Intermediate Municipal Income are diversified funds.
Strategic Income and Short-Intermediate Municipal Income are
non-diversified funds. Non-diversified funds may invest a greater
portion of their assets in securities of individual issuers than
diversified funds. As a result, changes in the market value of a
single issuer could cause greater fluctuations in share value than
would occur in a more diversified fund.
TechnoQuant Growth, Mid Cap, Equity Growth, Growth Opportunities,
Strategic Opportunities, Large Cap, Growth & Income, Equity Income,
and Balanced are designed for investors who are willing to ride out
stock market fluctuations in pursuit of potentially high long-term
returns. TechnoQuant Growth, Mid Cap, Equity Growth, Growth
Opportunities, Strategic Opportunities, and Large Cap are designed for
investors who want to be invested in the stock market for its
long-term growth potential. These funds invest for growth and do not
pursue income. Growth & Income, Equity Income, and Balanced are
designed for those investors who seek a combination of growth and
income from equity and some bond investments.
TechnoQuant Growth is designed to provide an alternative to more
traditional styles of investing for growth-oriented investors. The
fund utilizes computer-aided quantitative analysis emphasizing
technical factors, such as historical price and volume relationships.
High Yield and Strategic Income are designed for investors who want
high current income with some potential for capital growth from a
portfolio of debt instruments with a focus on lower-quality debt
securities and income-producing equity securities. These funds may be
appropriate for long-term, aggressive investors who understand the
potential risks and rewards of investing in lower-quality debt
securities, including defaulted securities.
Strategic Income may also be appropriate for investors who want to
pursue their investment goals in markets outside of the United States.
By including international investments in your portfolio, you can
achieve additional diversification and participate in growth
opportunities around the world.
Mortgage Securities is designed for investors who seek high current
income from a portfolio of mortgage-related securities of all types.
Government Investment is designed for investors who seek high current
income from a portfolio of U.S. Government securities in a manner
consistent with preserving principal.
Intermediate Bond and Short Fixed-Income are designed for investors
who seek high current income from a portfolio of investment-grade debt
securities consistent with capital preservation.
Municipal Income, Intermediate Municipal Income, and
Short-Intermediate Municipal Income are designed for investors in
higher tax brackets who seek high current income that is free from
federal income tax. Intermediate Municipal Income and
Short-Intermediate Municipal Income also invest consistent with
consideration of capital preservation.
The value of each fund's investments and, as applicable, the income
they generate, will vary from day to day, and generally reflect
changes in market conditions, interest rates and other company,
political, and economic news. In the short term, stock prices can
fluctuate dramatically in response to these factors. The securities of
small, less well-known companies may be more volatile than those of
larger companies. Bond values fluctuate based on changes in interest
rates and the credit quality of the issuer, and may be subject to
prepayment risk, which can limit their price appreciation potential in
periods of declining interest rates. Over time, however, stocks,
although more volatile, have shown greater growth potential than other
types of securities. Investments in foreign securities may involve
risks in addition to those of U.S. investments, including increased
political and economic risk, as well as exposure to currency
fluctuations.
Each fund is not in itself a balanced investment plan. You should
consider your investment objective and tolerance for risk when making
an investment decision. When you sell your fund shares, they may be
worth more or less than what you paid for them.
Each fund is composed of multiple classes of shares. All classes of a
fund have a common investment objective and investment portfolio. Each
fund offers Institutional Class shares, Class A shares, and Class T
shares. Certain of the funds also offer Class B shares and Class C
shares. Class A and Class T shares have a front-end sales charge and
pay a 12b-1 fee. Class A and Class T shares may be subject to a
contingent deferred sales charge (CDSC). Class B and Class C shares do
not have a front-end sales charge, but do have a CDSC, and pay a 12b-1
fee. You may obtain more information about Class A, Class T, Class B,
and Class C shares, which are not offered through this prospectus, by
calling 1-800-843-3001 or from your investment professional.
The performance of one class of shares of a fund may be different from
the performance of another class of shares of the same fund because of
different sales charges and class expenses. For example, because
Institutional Class shares have no sales charge, and do not pay a
12b-1 fee, Institutional Class shares are expected to have a higher
total return than Class A, Class T, Class B, and Class C shares.
The Board of Trustees of Fidelity Advisor Short-Intermediate Municipal
Income Fund has unanimously approved an Agreement and Plan of
Reorganization ("Agreement") between Fidelity Advisor
Short-Intermediate Municipal Income Fund and Fidelity Advisor
Intermediate Municipal Income Fund, a fund of Fidelity Advisor Series
VI. The Agreement will be presented to Fidelity Advisor
Short-Intermediate Municipal Income Fund shareholders for their vote
of approval or disapproval at a special meeting to be held on May 4,
1998. If the proposal is approved at the Meeting by a
majority of Fidelity Advisor Short-Intermediate Municipal Income
Fund's shareholders and certain conditions required by the
Agreement are satisfied, the Reorganization is expected to become
effective on or about May 28, 1998.
Effective January 1, 1998 , Fidelity Advisor Short-Intermediate
Municipal Income Fund was closed to new accounts pending the
reorganization.
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you may pay when you buy
or sell Institutional Class shares of a fund. In addition, you may be
charged an annual account maintenance fee if your account balance
falls below $2,500. See "Transaction Details," page , for an
explanation of how and when these charges apply.
Sales charge on purchases and reinvested distributions None
Deferred sales charge on redemptions None
Annual account maintenance fee (for accounts under $2,500) $12.00
ANNUAL OPERATING EXPENSES are paid out of each fund's assets. Each
fund pays a management fee to Fidelity Management & Research Company
(FMR) that, for Growth Opportunities and Strategic Opportunities,
varies based on performance. Each fund also incurs other expenses for
services such as maintaining shareholder records and furnishing
shareholder statements and financial reports.
Institutional Class's expenses are factored into its share price or
dividends and are not charged directly to shareholder accounts (see
"Breakdown of Expenses" on page ).
The following figures are based on estimated or historical expenses
of the Inst itutional Class of each fund and are calculated as a
percentage of average net assets of the Institutional Class of each
fund.
EXPENSE TABLE EXAMPLE: You would pay the following amount in total
expenses on a $1,000 investment in Institutional Class shares of a
fund, assuming a 5% annual return and full redemption at the end of
each time period. Total expenses shown on the next page include any
shareholder transaction expenses and Institutional Class's annual
operating expenses.
EQUITY FUNDS
Operating Expenses Examples
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
TECHNOQUANT GROWTH Management fee 0.60% 1 year $ 15
12b-1 fee None 3 years $ 47
Other expenses (after reimbursement) 0.90% 5 years $ 82
Total operating expenses 1.50% 10 years $ 179
MID CAP Management fee 0.60% 1 year $ 9
12b-1 fee None 3 years $ 29
Other expenses 0.31% 5 years $ 50
Total operating expenses 0.91% 10 years $ 112
EQUITY GROWTH Management fee 0.60% 1 year $ 8
12b-1 fee None 3 years $ 25
Other expenses 0.17% 5 years $ 43
Total operating expenses 0.77% 10 years $ 95
GROWTH OPPORTUNITIES Management fee 0.49% 1 year $ 7
12b-1 fee None 3 years $ 21
Other expenses 0.17% 5 years $ 37
Total operating expenses 0.66% 10 years $ 82
STRATEGIC OPPORTUNITIES Management fee 0.40% 1 year $ 11
12b-1 fee None 3 years $ 34
Other expenses 0.66% 5 years $ 58
Total operating expenses 1.06% 10 years $ 129
LARGE CAP Management fee 0.60% 1 year $ 12
12b-1 fee None 3 years $ 37
Other expenses 0.55% 5 years $ 63
Total operating expenses 1.15% 10 years $ 140
GROWTH & INCOME Management fee 0.50% 1 year $ 12
12b-1 fee None 3 years $ 38
Other expenses 0.69% 5 years $ 65
Total operating expenses 1.19% 10 years $ 144
EQUITY INCOME Management fee 0.50% 1 year $ 7
12b-1 fee None 3 years $ 22
Other expenses 0.19% 5 years $ 38
Total operating expenses 0.69% 10 years $ 86
BALANCED Management fee 0.45% 1 year $ 7
12b-1 fee None 3 years $ 22
Other expenses 0.24% 5 years $ 38
Total operating expenses 0.69% 10 years $ 86
</TABLE>
TAXABLE INCOME FUNDS
Operating Expenses Examples
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
HIGH YIELD Management fee 0.59% 1 year $ 9
12b-1 fee None 3 years $ 27
Other expenses 0.26% 5 years $ 47
Total operating expenses 0.85% 10 years $ 105
STRATEGIC INCOME Management fee 0.59% 1 year $ 11
12b-1 fee None 3 years $ 35
Other expenses (after reimbursement) 0.51% 5 years $ 61
Total operating expenses 1.10% 10 years $ 134
MORTGAGE SECURITIES Management fee 0.44% 1 year $ 8
12b-1 fee None 3 years $ 24
Other expenses (after reimbursement) 0.31%[A] 5 years $ 42
Total operating expenses 0.75% 10 years $ 93
GOVERNMENT INVESTMENT Management fee 0.44% 1 year $ 8
12b-1 fee None 3 years $ 24
Other expenses (after reimbursement) 0.31% 5 years $ 42
Total operating expenses 0.75% 10 years $ 93
INTERMEDIATE BOND Management fee 0.44% 1 year $ 7
12b-1 fee None 3 years $ 21
Other expenses 0.23% 5 years $ 37
Total operating expenses 0.67% 10 years $ 83
SHORT FIXED-INCOME Management fee 0.44% 1 year $ 8
12b-1 fee None 3 years $ 24
Other expenses (after reimbursement) 0.31% 5 years $ 42
Total operating expenses 0.75% 10 years $ 93
</TABLE>
MUNICIPAL FUNDS
Operating Expenses Examples
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
MUNICIPAL INCOME Management fee 0.39% 1 year $ 8
12b-1 fee None 3 years $ 24
Other expenses (after reimbursement) 0.36% 5 years $ 42
Total operating expenses 0.75% 10 years $ 93
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
INTERMEDIATE MUNICIPAL INCOME Management fee 0.39% 1 year $ 8
12b-1 fee None 3 years $ 24
Other expenses (after reimbursement) 0.36% 5 years $ 42
Total operating expenses 0.75% 10 years $ 93
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SHORT-INTERMEDIATE MUNICIPAL INCOME Management fee 0.39% 1 year $ 8
12b-1 fee None 3 years $ 24
Other expenses (after reimbursement) 0.36% 5 years $ 42
Total operating expenses 0.75% 10 years $ 93
</TABLE>
[A] BASED ON ESTIMATED EXPENSES FOR FIRST YEAR
THESE EXAMPLES ILLUSTRATE THE EFFECT OF EXPENSES, BUT ARE NOT MEANT TO
SUGGEST ACTUAL OR EXPECTED EXPENSES OR RETURNS, ALL OF WHICH MAY VARY.
A portion of the brokerage commissions that certain of the funds pay
is used to reduce fund expenses. In addition, certain funds have
entered into arrangements with their custodian and transfer agent
whereby credits realized as a result of uninvested cash balances are
used to reduce custodian and transfer agent expenses. Including these
reductions, the total Institutional Class operating expenses presented
in the preceding tables would have been:
Institutional Class
Mid Cap 0.84%
Equity Growth 0.75 %
Growth Opportunities 0.65 %
Strategic Opportunities 1.05 %
Large Cap 1.12 %
Equity Income 0.67 %
Strategic Income 1.09%
FMR has voluntarily agreed to reimburse the Institutional Class of
each fund to the extent that total operating expenses, as a percentage
of their respective average net assets, exceed the following rates:
Effective
Date
TechnoQuant Growth 1.50% 12/31/96
Mid Cap 1.50% 2/20/96
Equity Growth 0.95% 11/1/97
Growth Opportunities 0.85% 11/1/97
Strategic Opportunities 1.50% 3/1/97
Large Cap 1.50% 2/20/96
Growth & Income 1.25% 12/31/96
Equity Income 0.85% 11/1/97
Balanced 0.80% 11/1/97
High Yield 1.10% 7/1/95
Strategic Income 1.10% 7/1/95
Mortgage Securities 0.75% 3/1/97
Government Investment 0.75% 7/1/95
Intermediate Bond 0.75% 7/1/95
Short Fixed Income 0.75% 8/30/96
Municipal Income 0.75% 7/1/95
Intermediate Municipal Income 0.75% 7/1/95
Short-Intermediate Municipal Income 0.75% 7/1/95
If these agreements were not in effect, other expenses and total
operating expenses of the Institutional Class of each fund, as a
percentage of average net assets, would have been the following
amounts:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Other Expenses Total Operating
Expenses
TechnoQuant Growth 3.84% 4.44%
Strategic Income 0.62% 1.21%
Mortgage Securities 0.69%[A] 1.13%[A]
Government Investment 0.34% 0.78%
Short Fixed-Income 0.58% 1.02%
Municipal Income 1.56% 1.95%
Intermediate Municipal Income 0.58% 0.97%
Short-Intermediate Municipal
Income 3.84% 4.23%
</TABLE>
[A] BASED ON ESTIMATED EXPENSES FOR FIRST YEAR.
Expenses eligible for reimbursement do not include interest, taxes,
brokerage commissions, and extraordinary expenses.
KEY FACTS
FINANCIAL HIGHLIGHTS
TECHNOQUANT GROWTH - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C>
Selected Per-Share Data and RatiosD
Year ended November 30 1997G
Net asset value, beginning of period $ 10.00
Income from Investment Operations
Net investment income (loss) (.04)
Net realized and unrealized gain (loss) 1.44
Total from Investment Operations 1.40
Net asset value, end of period $ 11.40
Total returnB,C 14.00%
Net assets, end of period (000 omitted) $ 1,459
Ratio of expenses to average net assets 1.50%A,E
Ratio of net investment income (loss) to average net assets (.42)%A
Portfolio turnover 213%A
Average commission rateF $ .0311
</TABLE>
A ANNUALIZED
B THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
C TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
F A FUND IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE
FOR SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY
VARY FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF
TRADES EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND
COMMISSION RATE STRUCTURES MAY DIFFER.
G FOR THE PERIOD DECEMBER 31, 1996 (COMMENCEMENT OF SALE OF
INSTITUTIONAL CLASS SHARES) TO NOVEMBER 30, 1997.
MID CAP - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C>
Selected Per-Share Data and RatiosD
Years ended November 30 1997 1996H
Net asset value, beginning of period $ 11.70 $ 10.00
Income from Investment Operations
Net investment income (loss) .01 (.02)
Net realized and unrealized gain (loss) 2.63 1.72
Total from investment operations 2.64 1.70
Less Distributions
From net realized gain (.22) --
Net asset value, end of period $ 14.12 $ 11.70
Total returnB,C 23.04% 17.00%
Net assets, end of period (000 omitted) $ 30,542 $ 3,600
Ratio of expenses to average net assets .91% 1.50%A,E
Ratio of expenses to average net assets after expense reductions .84%F 1.50%A
Ratio of net investment income (loss) to average net assets .08% (.27)%A
Portfolio turnover 208% 101%A
Average commission rateG $ .0401 $ .0382
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
G A FUND IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE
FOR SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY
VARY FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF
TRADES EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND
COMMISSION RATE STRUCTURES MAY DIFFER.
H FOR THE PERIOD FEBRUARY 20, 1996 (COMMENCEMENT OF SALE OF
INSTITUTIONAL CLASS SHARES) TO NOVEMBER 30, 1996.
EQUITY GROWTH - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Selected Per-Share Data and Ratios
Years ended November 30
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
Net asset value, beginning of period
$ 45.52 $ 40.39 $ 28.90 $ 29.74 $ 26.37 $ 24.28 $ 15.55 $ 17.32 $ 12.02 $ 9.92
Income from Investment Operations
Net investment income
.22D .45D .28 .30 .19D .17 .04 .01 .06 .28A
Net realized and unrealized gain (loss)
8.72 7.00 11.69 .42 3.78 4.55 8.69 .34 5.50 2.59
Total from investment operations
8.94 7.45 11.97 .72 3.97 4.72 8.73 .35 5.56 2.87
Less Distributions
From net investment income
(.37) (.21)E (.27) (.11) (.10) (.03) -- (.08) (.26) (.01)
From net realized gain
(1.23) (2.11)E (.16) (1.45) (.50) (2.60) -- (2.04) -- (.76)
In excess of net realized gain
-- -- (.05) -- -- -- -- -- -- --
Total distributions
(1.60) (2.32) (.48) (1.56) (.60) (2.63) -- (2.12) (.26) (.77)
Net asset value, end of period
$ 52.86 $ 45.52 $ 40.39 $ 28.90 $ 29.74 $ 26.37 $ 24.28 $ 15.55 $ 17.32 $ 12.02
Total returnC
20.46% 19.68% 42.15% 2.46% 15.36% 21.14% 56.14% 2.75% 47.18% 29.77%
Net assets, end of period (000 omitted)
$ 1,032,453 $ 1,323,526 $ 791,074 $ 410,450 $ 296,466 $ 179,325 $ 68,766 $ 27,473 $ 24,523 $ 20,182
Ratio of expenses to average net assets
.77% .79% .83% .86% .95% .98% 1.13% 1.74% 1.60% 1.47%
Ratio of expenses to average net
.75%F .77%F .83% .84%F .94%F .98% 1.13% 1.74% 1.60% 1.47%
assets after expense reductions
Ratio of net investment income to
.46% 1.11% .92% 1.00% .66% .73% .25% .07% .38% 1.20%
average net assets
Portfolio turnover
108% 76% 97% 137% 160% 240% 254% 262% 269% 331%
Average commission rateB
$ .0427 $ .0414
</TABLE>
A DURING THE PERIOD, A SIGNIFICANT SHAREHOLDER REDEMPTION CAUSED AN
UNUSUALLY HIGH LEVEL OF INVESTMENT INCOME PER SHARE.
B FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY
FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES
EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION
RATE STRUCTURES MAY DIFFER.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E THE AMOUNTS SHOWN REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK
AND TAX DIFFERENCES.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
GROWTH OPPORTUNITIES - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Selected Per-Share Data and Ratios
Years ended 1997I 1997H 1996H 1995E
Net asset value, beginning of period $ 42.85 $ 35.47 $ 30.97 $ 29.04
Income from Investment Operations
Net investment income .05D .75D .77D .12
Net realized and unrealized gain (loss) 1.41 8.78 4.74 1.81
Total from investment operations 1.46 9.53 5.51 1.93
Less Distributions
From net investment income -- (.71) (.61) --
From net realized gain -- (1.44) (.40) --
Total distributions -- (2.15) (1.01) --
Net asset value, end of period $ 44.31 $ 42.85 $ 35.47 $ 30.97
Total returnB,C 3.41% 28.07% 18.25% 6.65%
Net assets, end of period (000 omitted) $ 391,713 $ 374,978 $ 250,283 $ 71,953
Ratio of expenses to average net assets .71%A .66% .85% .82%A
Ratio of expenses to average net assets after expense reductions .70%A,F .65%F .84%F .81%A,F
Ratio of net investment income to average net assets 1.60%A 1.91% 2.38% 2.33%A
Portfolio turnover 33%A 35% 33% 39%
Average commission rateG $ .0497 $ .0480 $ .0401
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
C TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD JULY 3, 1995 (COMMENCEMENT OF SALE OF INSTITUTIONAL
CLASS SHARES) TO OCTOBER 31, 1995.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
G FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY
FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES
EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION
RATE STRUCTURES MAY DIFFER.
H YEAR ENDED OCTOBER 31
I ONE MONTH ENDED NOVEMBER 30, 1997
STRATEGIC OPPORTUNITIES - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Selected Per-Share Data and Ratios
Years ended 1997H 1996I 1995E
Net asset value, beginning of period $ 22.57 $ 24.80 $ 22.35
Income from Investment Operations
Net investment income (loss) (.05)D .29D .55
Net realized and unrealized gain (loss) 5.98 .17 3.00
Total from investment operations 5.93 .46 3.55
Less Distributions
From net investment income -- (.34) (.55)
From net realized gain (.87) (2.35) (.55)
Total distributions (.87) (2.69) (1.10)
Net asset value, end of period $ 27.63 $ 22.57 $ 24.80
Total returnB,C 27.16% 1.99% 15.96%
Net assets, end of period (000 omitted) $ 5,564 $ 41,832 $ 20,429
Ratio of expenses to average net assets 1.06%A .78% .97%A
Ratio of expenses to average net assets after expense reductions 1.05%A,F .76%F .96%A,F
Ratio of net investment income (loss) to average net assets (.21)%A 1.21% 2.55%A
Portfolio turnover 61%A 151% 142%
Average commission rateG $ .0382 $ .0409
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD JULY 3, 1995 (COMMENCEMENT OF SALE OF INSTITUTIONAL
CLASS SHARES) TO DECEMBER 31, 1995.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
G FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY
FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES
EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION
RATE STRUCTURES MAY DIFFER.
H ELEVEN MONTHS ENDED NOVEMBER 30, 1997
I YEAR ENDED DECEMBER 31, 1996
LARGE CAP - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C>
Selected Per-Share Data and RatiosD
Years ended November 30 1997 1996H
Net asset value, beginning of period $ 11.86 $ 10.00
Income from Investment Operations
Net investment income .04I .03
Net realized and unrealized gain (loss) 2.24 1.83
Total from investment operations 2.28 1.86
Less Distributions
From net realized gain (.09) --
Net asset value, end of period $ 14.05 $ 11.86
Total returnB,C 19.39% 18.60%
Net assets, end of period (000 omitted) $ 6,560 $ 9,144
Ratio of expenses to average net assets 1.15% 1.50%A,E
Ratio of expenses to average net assets after expense reductions 1.12%F 1.48%A,F
Ratio of net investment income to average net assets .32% .38%A
Portfolio turnover 93% 59%A
Average commission rateG $ .0412 $ .0306
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
G A FUND IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE
FOR SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY
VARY FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF
TRADES EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND
COMMISSION RATE STRUCTURES MAY DIFFER.
H FOR THE PERIOD FEBRUARY 20, 1996 (COMMENCEMENT OF SALE OF
INSTITUTIONAL CLASS SHARES) TO NOVEMBER 30, 1996.
I DURING THE PERIOD, A SIGNIFICANT SHAREHOLDER REDEMPTION CAUSED AN
UNUSUALLY HIGH LEVEL INVESTMENT INCOME PER SHARE.
GROWTH & INCOME - INSTITUTIONAL CLASS
Selected Per-Share Data and RatiosD
Year ended November 30 1997F
Net asset value, beginning of period $ 10.00
Income from Investment Operations
Net investment income .07
Net realized and unrealized gain (loss) 2.45
Total from investment operations 2.52
Less Distributions
From net investment income (.05)
Net asset value, end of period $ 12.47
Total returnB,C 25.26%
Net assets, end of period (000 omitted) $ 73,911
Ratio of expenses to average net assets 1.19%A
Ratio of net investment income to average net assets .64%A
Portfolio turnover 82%A
Average commission rateE $ .0345
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E A FUND IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE
FOR SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY
VARY FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF
TRADES EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND
COMMISSION RATE STRUCTURES MAY DIFFER.
F FOR THE PERIOD DECEMBER 31, 1996 (COMMENCEMENT OF SALE OF
INSTITUTIONAL CLASS SHARES) TO NOVEMBER 30, 1997.
EQUITY INCOME - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Selected Per-Share Data and Ratios
Years ended November 30
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
Net asset value, beginning of period
$ 23.00 $ 20.09 $ 16.07 $ 14.93 $ 12.88 $ 11.08 $ 9.52 $ 12.27 $ 11.10 $ 10.93
Income from Investment Operations
Net investment income
.39B .42B .45 .41B .39 .49 .63F .69 .75 .75
Net realized and unrealized gain (loss)
4.68 .3.37 4.28 1.05 2.02 1.79 1.52 (2.42) 1.17 1.81
Total from investment operations
5.07 3.79 4.73 1.46 2.41 2.28 2.15 (1.73) 1.92 2.56
Less Distributions
From net investment income
(.41) (.42) (.43) (.32) (.36) (.48) (.59) (.72) (.75) (.74)
From net realized gain
(.59) (.46) (.28) -- -- -- -- (.30) -- (1.65)
Total distributions
(1.00) (.88) (.71) (.32) (.36) (.48) (.59) (1.02) (.75) (2.39)
Net asset value, end of period
$ 27.07 $ 23.00 $ 20.09 $ 16.07 $ 14.93 $ 12.88 $ 11.08 $ 9.52 $ 12.27 $ 11.10
Total returnA
22.87% 19.54% 30.43% 9.82% 18.90% 20.91% 22.97% (14.90)% 17.58% 26.99%
Net assets, end of period (000 omitted)
$ 464,031 $ 343,867 $ 297,453 $ 197,533 $ 191,138 $ 139,391 $ 168,590 $ 253,049 $ 463,696 $ 436,753
Ratio of expenses to average net assets
.69% .71% .74% .73% .80% .71%D .67%D .61%D .55%D .55%D
Ratio of expenses to average net assets
.67%C .70%C .73%C .71%C .79%C .71% .67% .61% .55% .55%
after expense reductions
Ratio of net investment income to average net assets
1.60% 2.02% 2.52% 2.62% 3.00% 3.77% 5.66% 6.11% 6.09% 6.86%
Portfolio turnover
55% 78% 80% 140% 120% 51% 91% 103% 93 78%
Average commission rateE
$ .0430 $ .0424
</TABLE>
A THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
B NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
C FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
D FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
E FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY
FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES
EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION
RATE STRUCTURES MAY DIFFER.
F INCLUDES $.04 PER SHARE FROM FOREIGN TAXES RECOVERED.
BALANCED - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Selected Per-Share Data and Ratios
Years ended October 31 1997 1996 1995D
Net asset value, beginning of period $ 16.11 $ 15.40 $ 15.23
Income from Investment Operations
Net investment income .61H .54H .25
Net realized and unrealized gain (loss) 2.86 .87 .09
Total from investment operations 3.47 1.41 .34
Less Distributions
From net investment income (.62) (.67) (.17)
From net realized gain (.11) (.03) --
Total distributions (.73) (.70) (.17)
Net asset value, end of period $ 18.85 $ 16.11 $ 15.40
Total returnB,C 21.97% 9.41% 2.22%
Net assets, end of period (000 omitted) $ 38,924 $ 21,819 $ 993
Ratio of expenses to average net assets .69% 1.06% .92%A,E
Ratio of expenses to average net assets after expense reductions .69% 1.03%F .91%A,F
Ratio of net investment income to average net assets 3.42% 3.54% 4.54%A
Portfolio turnover 70% 223% 297%
Average commission rateG $ .0435 $ .0106
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
D FOR THE PERIOD JULY 3, 1995 (COMMENCEMENT OF SALE OF INSTITUTIONAL
CLASS SHARES) TO OCTOBER 31, 1995.
E FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
G FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY
FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES
EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION
RATE STRUCTURES MAY DIFFER.
H NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
HIGH YIELD - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Selected Per-Share Data and RatiosG
Years ended October 31 1997 1996 1995D
Net asset value, beginning of period $ 12.120 $ 11.760 $ 11.560
Income from Investment Operations
Net investment income 1.094 1.070 .390
Net realized and unrealized gain (loss) .671 .368 .193
Total from investment operations 1.765 1.438 .583
Less Distributions
From net investment income (1.115) (1.078) (.383)
From net realized gain (.060) -- --
Total distributions (1.175) (1.078) (.383)
Net asset value, end of period $ 12.710 $ 12.120 $ 11.760
Total returnB,C 15.42% 12.81% 5.07%
Net assets, end of period (000 omitted) $ 75,827 $ 37,632 $ 126
Ratio of expenses to average net assets .85% 1.10% .70%A
Ratio of expenses to average net assets after expense reductions .85% 1.05%E .70%A
Ratio of net investment income to average net assets 8.96% 9.26% 8.77%A
Portfolio turnover 105% 121% 112%
Average commission rateF $ .0431 $ .0388
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
D FOR THE PERIOD JULY 3, 1995 (COMMENCEMENT OF SALE OF INSTITUTIONAL
CLASS SHARES) TO OCTOBER 31, 1995.
E FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
F FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY
FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES
EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION
RATE STRUCTURES MAY DIFFER.
G NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
STRATEGIC INCOME - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Selected Per-Share Data and Ratios
Years ended December 31 1997 1996 1995E
Net asset value, beginning of period $ 11.300 $ 11.030 $ 10.890
Income from Investment Operations
Net investment income .830D .826D .456
Net realized and unrealized gain (loss) .186 .548 .340
Total from investment operations 1.016 1.374 .796
Less Distributions
From net investment income (.806) (.804) (.426)
From net realized gain (.370) (.300) (.230)
Total distributions (1.176) (1.104) (.656)
Net asset value, end of period $ 11.140 $ 11.300 $ 11.030
Total returnB,C 9.36% 13.04% 7.47%
Net assets, end of period (000 omitted) $ 6,289 $ 6,107 $ 107
Ratio of expenses to average net assets 1.10%F 1.10%F 1.10%A,F
Ratio of expenses to average net assets after expense reductions 1.09%G 1.10% 1.10%A
Ratio of net investment income to average net assets 7.31% 7.47% 7.53%A
Portfolio turnover 140% 119% 193%
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD JULY 3, 1995 (COMMENCEMENT OF SALE OF INSTITUTIONAL
CLASS SHARES) TO DECEMBER 31, 1995.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
G FMR OR THE FUND HAS ENTERED INTO VARIOUS ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
MORTGAGE SECURITIES - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C>
Selected Per-Share Data and RatiosF
Years ended 1997H 1997E
Net asset value, beginning of period $ 11.040 $ 10.830
Income from Investment Operations
Net investment income .172 .263
Net realized and unrealized gain (loss) .050 .226
Total from investment operations .222 .489
Less Distributions
From net investment income (.172) (.279)
From net realized gain (.080) --
Total distributions (.252) (.279)
Net asset value, end of period $ 11.010 $ 11.040
Total returnB,C 2.05% 4.59%
Net assets, end of period (000 omitted) $ 19,718 $ 13,177
Ratio of expenses to average net assets .75%A,D .75%A,D
Ratio of expenses to average net assets after expense reductions .75%A .70%A,G
Ratio of net investment income to average net assets 6.35%A 6.29%A
Portfolio turnover 125%A 149%
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
D FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
E FOR THE PERIOD MARCH 3, 1997 (COMMENCEMENT OF SALE OF INSTITUTIONAL
CLASS SHARES) TO JULY 31, 1997.
F NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
H THREE MONTHS ENDED OCTOBER 31, 1997
GOVERNMENT INVESTMENT - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Selected Per-Share Data and Ratios
Years ended October 31 1997 1996 1995E
Net asset value, beginning of period $ 9.480 $ 9.670 $ 9.560
Income from Investment Operations
Net investment income .580D .604D .197
Net realized and unrealized gain (loss) .165 (.180) .108
Total from investment operations .745 .424 .305
Less Distributions
From net investment income (.575) (.614) (.195)
Net asset value, end of period $ 9.650 $ 9.480 $ 9.670
Total returnB,C 8.18% 4.58% 3.23%
Net assets, end of period (000 omitted) $ 20,366 $ 27,660 $ 14,588
Ratio of expenses to average net assets .75%F .75% .75%A,F
F
Ratio of net investment income to average net assets 6.12% 6.43% 6.48%A
Portfolio turnover 136% 153% 261%
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD JULY 3, 1995 (COMMENCEMENT OF SALE OF INSTITUTIONAL
CLASS SHARES) TO OCTOBER 31, 1995.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
INTERMEDIATE BOND - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Selected Per-Share Data and Ratios
Years ended November 30
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
Net asset value, beginning of period
$ 10.620 $ 10.770 $ 10.270 $ 11.160 $ 10.640 $ 10.550 $ 10.140 $ 10.410 $ 10.180 $ 10.250
Income from Investment Operations
Net investment income
.658B .705B .671 .602 .832 .840 .884 .901 .937 .944
Net realized and unrealized gain (loss)
(.060) (.151) .499 (.833) .531 .102 .411 (.270) .230 (.070)
Total from investment operations
.598 .554 1.170 (.231) 1.363 .942 1.295 .631 1.167 .874
Less Distributions
From net investment income
(.648) (.704) (.670) (.597) (.843) (.852) (.885) (.901) (.937) (.944)
From net realized gain
-- -- -- -- -- -- -- -- -- --
From return of capital
-- -- -- (.062) -- -- -- -- -- --
Total distributions
(.648) (.704) (.670) (.659) (.843) (.852) (.885) (.901) (.937) (.944)
Net asset value, end of period
$ 10.570 $ 10.620 $ 10.770 $ 10.270 $ 11.160 $ 10.640 $ 10.550 $ 10.140 $ 10.410 $ 10.180
Total returnA
5.86% 5.40% 11.73% (2.10)% 13.17% 9.21% 13.35% 6.46% 12.03% 8.81%
Net assets, end of period (000 omitted)
$ 177,427 $ 211,866 $ 208,861 $ 172,122 $ 183,790 $ 160,156 $ 327,756 $ 356,564 $ 426,832 $ 418,929
Ratio of expenses to average net assets
.67% .66% .67%C .61% .64% .57% .57% .58% .54% .54%
Ratio of net investment income to
6.27% 6.69% 6.47% 6.45% 7.41% 7.96% 8.59% 8.90% 9.16% 9.16%
average net assets
Portfolio turnover
138% 200% 189% 68% 59% 7% 60% 59% 87% 48%
</TABLE>
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
B NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
C FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
SHORT FIXED-INCOME - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Selected Per-Share Data and Ratios
Years ended October 31 1997 1996 1995E
Net asset value, beginning of period $ 9.370 $ 9.470 $ 9.450
Income from Investment Operations
Net investment income .589D .598D .137
Net realized and unrealized gain (loss) (.023) (.098) .067
Total from investment operations .566 .500 .204
Less Distributions
From net investment income (.586) (.600) (.136)
From return of capital -- -- (.048)
Total distributions (.586) (.600) (.184)
Net asset value, end of period $ 9.350 $ 9.370 $ 9.470
Total returnB,C 6.24% 5.45% 2.18%
Net assets, end of period (000 omitted) $ 6,750 $ 9,200 $ 9,827
Ratio of expenses to average net assets .75%F .80%F .85%A,
F
Ratio of net investment income to average net assets 6.30% 6.37% 6.10%A
Portfolio turnover 105% 124% 179%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
C TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD JULY 3, 1995 (COMMENCEMENT OF SALE OF INSTITUTIONAL
CLASS SHARES) TO OCTOBER 31, 1995.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
MUNICIPAL INCOME - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Selected Per-Share Data and Ratios
Years ended October 31 1997 1996 1995G
Net asset value, beginning of period $ 11.720 $ 11.880 $ 11.700
Income from Investment Operations
Net interest income .609E .707E,F .232
Net realized and unrealized gain (loss) .464 (.197) .180
Total from investment operations 1.073 .510 .412
Less Distributions
From net interest income (.671)F (.670) (.232)
In excess of net interest income (.002)H -- --
Total distributions (.673) (.670) (.232)
Net asset value, end of period $ 12.120 $ 11.720 $ 11.880
Total returnB,C 9.44% 4.41% 3.55%
Net assets, end of period (000 omitted) $ 1,511 $ 927 $ 154
Ratio of expenses to average net assets .75%D .75%D .75%A,D
Ratio of net interest income to average net assets 5.11% 5.88% 5.89%A
Portfolio turnover 36% 49% 37%
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
D FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
E NET INTEREST INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
F NET INTEREST INCOME PER SHARE IN 1996 REFLECTS A PAYMENT RECEIVED
FROM AN ISSUER IN BANKRUPTCY WHICH WAS DISTRIBUTED IN 1997.
G FOR THE PERIOD JULY 3, 1995 (COMMENCEMENT OF SALE OF INSTITUTIONAL
CLASS SHARES) TO OCTOBER 31, 1995.
H THE AMOUNTS SHOWN REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK
TO TAX DIFFERENCES.
INTERMEDIATE MUNICIPAL INCOME - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Selected Per-Share Data and Ratios
Years ended November 30
1997 1996 1995 1994D 1993 1992 1991 1990 1989 1988
Net asset value, beginning of period
$ 10.410 $ 10.360 $ 9.410 $ 10.460 $ 11.080 $ 10.800 $ 10.640 $ 10.610 $ 10.520 $ 10.380
Income from Investment Operations
Net interest income
.475 .487 .477 .481 .536 .666 .682 .689 .674 .650
Net realized and unrealized gain (loss)
.181 .050 .950 (1.030) .260 .280 .160 .030 .090 .140
Total from investment operations
.656 .537 1.427 (.549) .796 .946 .842 .719 .764 .790
Less Distributions
From net interest income
(.475) (.487) (.477) (.481) (.536) (.666) (.682) (.689) (.674) (.650)
From net realized gain
(.001) -- -- -- (.880) -- -- -- -- --
In excess of net realized gain
-- -- -- (.020) -- -- -- -- -- --
Total distributions
(.476) (.487) (.477) (.501) (1.416) (.666) (.682) (.689) (.674) (.650)
Net asset value, end of period
$ 10.590 $ 10.410 $ 10.360 $ 9.410 $ 10.460 $ 11.080 $ 10.800 $ 10.640 $ 10.610 $ 10.520
Total returnA
6.48% 5.36% 15.44% (5.43)% 8.01% 9.01% 8.15% 7.04% 7.50% 7.77%
Net assets, end of period (000 omitted)
$ 6,098 $ 6,455 $ 11,085 $ 11,702 $ 15,076 $ 28,428 $ 100,294 $ 111,506 $ 121,418 $ 132,443
Ratio of expenses to average net assets
.75%B .75% .70% .65% .65% .66% .61% .62% .65% .63%
B B B B B
Ratio of expenses to average net assets
.75% .74%C .70% .65% .65% .66% .61% .62% .65% .63%
after expense reductions
Ratio of net interest income to
4.57% 4.68% 4.96% 4.75% 5.01% 6.05% 6.40% 6.53% 6.45% 6.20%
average net assets
Portfolio turnover
18% 35% 53% 53% 46% 36% 20% 32% 31% 24%
</TABLE>
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
B FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
C FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
D EFFECTIVE DECEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION
93-2, "DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION
OF INCOME, CAPITAL GAINS, AND RETURNS OF CAPITAL DISTRIBUTIONS BY
INVESTMENT COMPANIES." AS A RESULT, NET INTEREST INCOME PER SHARE MAY
REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
SHORT-INTERMEDIATE MUNICIPAL INCOME - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Selected Per-Share Data and Ratios
Years ended November 30 1997 1996 1995D
Net asset value, beginning of period $ 10.210 $ 10.230 $ 10.070
Income from Investment Operations
Net interest income .420 .407 .178
Net realized and unrealized gain (loss) .030 .010 .160
Total from investment operations .450 .417 .338
Less Distributions
From net interest income (.420) (.407) (.178)
From net realized gain (.030) (.030) --
Total distributions (.450) (.437) (.178)
Net asset value, end of period $ 10.210 $ 10.210 $ 10.230
Total returnB,C 4.52% 4.19% 3.37%
Net assets, end of period (000 omitted) $ 636 $ 487 $ 134
Ratio of expenses to average net assets .75%E .75%E .75%A,E
Ratio of expenses to average net assets after expense reductions .75% .74%F .75%A
Ratio of net interest income to average net assets 4.14% 4.03% 4.18%A
Portfolio turnover 41% 62% 80%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
C TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D FOR THE PERIOD JULY 3, 1995 (COMMENCEMENT OF SALE OF INSTITUTIONAL
CLASS SHARES) TO NOVEMBER 30, 1995.
E FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS'
EXPENSES.
The financial highlights tables that follow contain annual
information which has been audited by Coopers & Lybrand, L.L.P., or
Price Waterhouse LLP, (TechnoQuant Growth, Growth & Income, and
Mortgage Securities only) independent accountants. The funds'
financial highlights, financial statements, and reports of the
auditors are included in each fund's Annual Report, and are
incorporated by reference into (are legally a part of) the funds' SAI.
Contact FDC or your investment professional for a free copy of an
Annual Report or the SAI.
KEY FACTS
PERFORMANCE
Mutual fund performance is commonly measured as TOTAL RETURN and/or
YIELD.
For Balanced, High Yield, Mortgage Securities, Government Investment,
Short Fixed-Income, and Municipal Income, the fiscal year runs from
November 1 to October 31. For TechnoQuant Growth, Mid Cap, Equity
Growth, Growth Opportunities, Strategic Opportunities, Large Cap,
Growth & Income, Equity Income, Intermediate Bond, Intermediate
Municipal Income, and Short-Intermediate Municipal Income, the fiscal
year runs from December 1 to November 30. For Strategic Income the
fiscal year runs from January 1 to December 31. The tables below show
the performance of Institutional Class of each fund over past fiscal
periods . The charts in Appendix B, beginning on page , present
Institutional Class's calendar year performance compared to different
measures, including a competitive funds average.
GROWTH FUNDS - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Average Annual Total Return* Cumulative Total Return*
Past 1 year Past 5 years 10 Years/ Past 1 year Past 5 years 10 Years/
Life of fund+ Life of fund+
TECHNOQUANT GROWTH[B] n/a n/a n/a n/a n/a 14.00%
MID CAP[B] 23.04% n/a 22.74% 23.04% n/a 43.96%
EQUITY GROWTH[B] 20.46% 19.35% 24.56% 20.46% 142.20% 799.06%
GROWTH OPPORTUNITIES[B] 22.75% 20.71% 22.52% 22.75% 156.32% 661.97%
STRATEGIC OPPORTUNITIES[B] 27.07% 15.74% 16.14% 27.07% 107.66% 346.58%
LARGE CAP[B] 19.39% n/a 21.61% 19.39% n/a 41.60%
GROWTH & INCOME[B] n/a n/a n/a n/a n/a 25.26%
EQUITY INCOME[B] 22.87% 20.13% 16.80% 22.87% 150.15% 372.57%
BALANCED[A] 21.97% 11.07% 13.90% 21.97% 69.00% 267.41%
</TABLE>
TAXABLE INCOME FUNDS - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Average Annual Total Return* Cumulative Total Return*
Past 1 year Past 5 years 10 Years/ Past 1 year Past 5 years 10 Years/
Life of fund+ Life of fund+
HIGH YIELD[A] 15.42% 13.01% 15.17% 15.42% 84.31% 310.46%
STRATEGIC INCOME[C] 9.36% n/a 14.03% 9.36% n/a 51.55%
MORTGAGE SECURITIES[A] 8.75% 8.03% 9.01% 8.75% 47.15% 136.96%
GOVERNMENT INVESTMENT[A] 8.18% 6.76% 8.00% 8.18% 38.72% 115.85%
INTERMEDIATE BOND[B] 5.86% 6.67% 8.30% 5.86% 38.13% 121.90%
SHORT FIXED-INCOME[A] 6.24% 5.29% 6.99% 6.24% 29.42% 96.53%
</TABLE>
MUNICIPAL FUNDS - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Average Annual Total Return* Cumulative Total Return*
Past 1 year Past 5 years 10 Years/ Past 1 year Past 5 years 10 Years/
Life of fund+ Life of fund+
MUNICIPAL INCOME[A] 9.44% 6.99% 9.34% 9.44% 40.18% 144.13%
INTERMEDIATE MUNICIPAL INCOME[B] 6.48% 5.75% 6.82% 6.48% 32.28% 93.39%
SHORT-INTERMEDIATE MUNICIPAL
INCOME[B] 4.52% n/a 4.89% 4.52% n/a 19.40%
</TABLE>
[A] PERIOD ENDED OCTOBER 31, 1997
[B] PERIOD ENDED NOVEMBER 30, 1997
[C] PERIOD ENDED DECEMBER 31, 1997
+ LIFE OF FUND FIGURES ARE FROM COMMENCEMENT OF OPERATIONS (OCTOBER
31, 1994 FOR STRATEGIC INCOME; MARCH 16, 1994 FOR SHORT-INTERMEDIATE
MUNICIPAL INCOME; FEBRUARY 20, 1996 FOR MID CAP AND LARGE CAP; AND
DECEMBER 31, 1996 FOR TECHNOQUANT GROWTH AND GROWTH & INCOME) THROUGH
THE ANNUAL PERIO D ENDED 1997.
* INITIAL OFFERING OF INSTITUTIONAL CLASS OF GROWTH OPPORTUNITIES,
BALANCED, HIGH YIELD, STRATEGIC INCOME, GOVERNMENT INVESTMENT, SHORT
FIXED-INCOME, MUNICIPAL INCOME, AND SHORT-INTERMEDIATE MUNICIPAL
INCOME TOOK PLACE ON JULY 3, 1995. INSTITUTIONAL CLASS RETURNS PRIOR
TO JULY 3, 1995 ARE THOSE OF CLASS T WHICH REFLECT A 12B-1 FEE OF
0.65% FOR GROWTH OPPORTU NITIES AND BALA NCED, 0.25% FOR HIGH
YIELD, STRATEGIC INCOME, GOVERNMENT INVESTMENT, AND MUNICIPAL INCOME,
AND 0.15% FOR SHORT FIXED-INCOME AND SHORT-INTERMEDIATE MUNICIPAL
INCOME. TOTAL RETURNS FOR INSTITUTIONAL CLASS PRIOR TO JULY 3, 1995
WOULD HAVE BEEN HIGHER IF CLASS T'S 12B-1 FEE HAD NOT BEEN REFLECTED.
INITIAL OFFERING OF INSTITUTIONAL CLASS OF STRATEGIC OPPORTUNITIES
TOOK PLACE ON JULY 3, 1995. INSTITUTIONAL CLASS RETURNS PRIOR TO JULY
3, 1995 ARE THOSE OF INITIAL CLASS WHICH HAS NO 12B-1 FEE.
INITIAL OFFERING OF INSTITUTIONAL CLASS OF MORTGAGE SECURITIES TOOK
PLACE ON MARCH 3, 1997. INSTITUTIONAL CLASS RETURNS PRIOR TO MARCH 3,
1997 ARE THOSE OF INITIAL CLASS WHICH HAS NO 12B-1 FEE.
If FMR had not reimbursed certain class expenses during these periods,
total returns would have been lower.
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment over a given
period, assuming reinvestment of any dividends and capital gains. A
CUMULATIVE TOTAL RETURN reflects actual performance over a stated
period of time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate
of return that, if achieved annually, would have produced the same
cumulative total return if performance had been constant over the
entire period. Average annual total returns smooth out variations in
performance; they are not the same as actual year-by-year results.
Average annual total returns covering periods of less than one year
assume that performance will remain constant for the rest of the year.
YIELD refers to the income generated by an investment in a fund over a
given period of time, expressed as an annual percentage rate. Yields
are calculated according to a standard that is required for all stock
and bond funds. Because this differs from other accounting methods,
the quoted yield may not equal the income actually paid to
shareholders.
This difference may be significant for funds whose investments are
denominated in foreign currencies .
In calculating yield, a 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 on that security. This practice will have the effect of
reducing a fund's yield.
A TAX-EQUIVALENT YIELD shows what an investor would have to earn
before taxes to equal a tax-free yield.
THE COMPETITIVE FUNDS AVERAGE is each fund's applicable Lipper Funds
Average, which reflects the performance of mutual funds with similar
investment objectives. These averages, published by Lipper Analytical
Services, Inc., exclude the effect of sales loads.
STANDARD & POOR'S 500 INDEX (S&P 500(registered trademark)) is a
widely recognized, unmanaged index of common stocks.
STANDARD & POOR'S MIDCAP 400 INDEX is a widely recognized, unmanaged
index of 400 medium-capitalization stocks.
MERRILL LYNCH HIGH YIELD MASTER INDEX is a market capitalization
weighted index of all domestic and yankee high-yield bonds. Issues
included in the index have maturities of at least one year and have a
credit rating lower than BBB-/Baa3, but are not in default.
LEHMAN BROTHERS 1-3 YEAR GOVERNMENT/CORPORATE BOND INDEX is a market
value weighted performance benchmark for government and corporate
fixed-rate debt issues with maturities between one and three years.
LEHMAN BROTHERS MORTGAGE-BACKED SECURITIES INDEX is a market
capitalization weighted index of 15- and 30-year fixed-rate securities
backed by mortgage pools of the Government National Mortgage
Association (GNMA), Fannie Mae and Federal Home Loan Mortgage
Corporation (FHLMC), and balloon mortgages with fixed-rate coupons.
LEHMAN BROTHERS GOVERNMENT BOND INDEX is a market value weighted
index of U.S. G overnment and government agency securities
(other than mortgage securities) with maturities of one year or
more.
LEHMAN BROTHERS INTERMEDIATE GOVERNMENT/CORPORATE BOND INDEX is a
market value weighted performance benchmark for government and
corporate fixed-rate debt issues with maturities between one and 10
years.
LEHMAN BROTHERS MUNICIPAL BOND INDEX is a total return performance
benchmark for investment-grade municipal bonds with maturities of at
least one year.
Unlike Institutional Class's returns, the total returns of each
comparative index do not include the effect of any brokerage
commissions, transaction fees, or other costs of investing.
THE CONSUMER PRICE INDEX is a widely recognized measure of inflation
calculated by the U.S. Governmen t.
Other illustrations of equity fund performance may show moving
averages over specified periods.
The funds' recent strategies, performance, and holdings are detailed
twice a year in financial reports, which are sent to all shareholders.
For current performance or a free annual report, please contact your
investment professional, or call 1-800-843-3001.
TOTAL RETURNS AND YIELDS ARE BASED ON PAST RESULTS AND ARE NOT AN
INDICATION OF FUTURE PERFORMANCE.
THE FUNDS IN DETAIL
CHARTER
EACH FUND IS A MUTUAL FUND: an investment that pools shareholders'
money and invests it toward a specified goal. TechnoQuant Growth, Mid
Cap, Equity Growth, Growth Opportunities, Strategic Opportunities,
Large Cap, and Growth & Income are diversified funds of Fidelity
Advisor Series I, a Massachusetts business trust organized on June 24,
1983. Balanced, High Yield, Government Investment, and Short
Fixed-Income are diversified funds and Strategic Income is a
non-diversified fund of Fidelity Advisor Series II, a Massachusetts
business trust organized on April 23, 1986. Equity Income is a
diversified fund of Fidelity Advisor Series III, a Massachusetts
business trust organized on May 17, 1982. Intermediate Bond is a
diversified fund of Fidelity Advisor Series IV, a Massachusetts
business trust organized on May 6, 1983. Municipal Income is a
diversified fund of Fidelity Advisor Series V, a Massachusetts
business trust organized on April 23, 1986. Intermediate Municipal
Income is a diversified fund and Short-Intermediate Municipal Income
is a non-diversified fund of Fidelity Advisor Series VI, a
Massachusetts business trust organized on June 1, 1983. Mortgage
Securities is a diversified fund of Fidelity Income Fund, a
Massachusetts business trust organized on August 7, 1984. Each trust
is an open-end management investment company. There is a remote
possibility that one fund might become liable for a misstatement in
the prospectus about another fund.
EACH FUND IS GOVERNED BY A BOARD OF TRUSTEES which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet periodically throughout the year to oversee the
funds' activities, review contractual arrangements with companies that
provide services to the funds, and review the funds' performance. The
trustees serve as trustees for other Fidelity funds. The majority of
trustees are not otherwise affiliated with Fidelity.
THE FUNDS MAY HOLD SPECIAL SHAREHOLDER MEETINGS AND MAIL PROXY
MATERIALS. These meetings may be called to elect or remove trustees,
change fundamental policies, approve a management contract, or for
other purposes. Shareholders not attending these meetings are
encouraged to vote by proxy. The transfer agent will mail proxy
materials in advance, including a voting card and information about
the proposals to be voted on. The number of votes you are entitled to
is based upon the dollar value of your investment.
Separate votes are taken by each class of shares, fund, or trust, if a
matter affects just that class of shares, fund, or trust,
respectively.
FMR AND ITS AFFILIATES
Fidelity Investments is one of the largest investment management
organizations in the United States and has its principal business
address at 82 Devonshire Street, Boston, Massachusetts 02109. It
includes a number of different subsidiaries and divisions which
provide a variety of financial services and products. The funds employ
various Fidelity companies to perform activities required for their
operation.
The funds are managed by FMR, which chooses each fund's investments
and handles its business affairs. FMR chooses investments with the
assistance of foreign affiliates for all funds except Government
Investment, Municipal Income, Intermediate Municipal Income, and
Short-Intermediate Municipal Income.
Beginning January 1, 1999, Fidelity Investments Money Management,
Inc. (FIMM), located in Merrimack, New Hampshire, will select certain
types of investments for Balanced, and Strategic Income. Beginning
January 1, 1998, FIMM will have primary responsibility for providing
investment management services for Mortgage Securities, Government
Investment, Intermediate Bond, Short Fixed-Income, Municipal Income,
Intermediate Municipal Income, and Short-Intermediate Municipal
Income.
(small solid bullet) Fidelity Management & Research (U.K.) Inc. (FMR
U.K.), in London, England, serves as a sub-adviser for TechnoQuant
Growth, Mid Cap, Equity Growth, Growth Opportunities, Strategic
Opportunities, Large Cap, Growth & Income, Equity Income, Balanced,
High Yield, Strategic Income, Mortgage Securities, Intermediate Bond,
and Short Fixed-Income.
(small solid bullet) Fidelity Management & Research Far East Inc. (FMR
Far East), in Tokyo, Japan, serves as a sub-adviser for TechnoQuant
Growth, Mid Cap, Equity Growth, Growth Opportunities, Strategic
Opportunities, Large Cap, Growth & Income, Equity Income, Balanced,
High Yield, Strategic Income, Mortgage Securities, Intermediate Bond,
and Short Fixed-Income.
(small solid bullet) Fidelity International Investment Advisors
(FIIA), in Pembroke, Bermuda, serves as a sub-adviser for Strategic
Income.
(small solid bullet) Fidelity International Investment Advisors (U.K.)
Limited (FIIA(U.K.)L), in London, England, serves as a sub-adviser for
Strategic Income.
(small solid bullet) Fidelity Investment Japan Limited (FIJ), in
Tokyo, Japan, serves as a sub-adviser for Strategic Income.
As of December 31, 199 7 , FMR advised funds having
approximately 3 4 million shareholder accounts with a total
value of more than $ 529 billion .
John Avery is lead manager of Advisor Balanced, which he has managed
since January 1998. He was a co-manager of the fund since September
1997 . He also manages another Fidelity fund. Mr. Avery joined
Fidelity as an analyst in 1995. Previously, he was an analyst for
Putnam Investments from 1993 to 1994. Mr. Avery received his MBA from
The Wharton School at the University of Pennsylvania in 1993.
John Carlson is Vice President and lead manager of Advisor Strategic
Income, which he has managed since August 1995. He also manages
several other Fidelity funds. Prior to joining Fidelity in 1995, Mr.
Carlson was Executive Director of emerging markets at Lehman Brothers
International from 1992 through 1995.
Robert Chow is manager of Advisor Equity Income, which he has managed
since March 1996. Previously, he managed other Fidelity funds. Since
joining Fidelity in 1989, Mr. Chow has worked as an analyst, portfolio
assistant, and manager.
Katherine Collins is manager of Advisor Mid Cap, which she has managed
since January 1997. She also manages another Fidelity fund. Since
joining Fidelity in 1990, Ms. Collins has worked as an analyst and
manager.
Andrew Dudley is manager of Advisor Short Fixed-Income, which he has
managed since February 1997. He also manages other Fidelity funds.
Prior to joining Fidelity as a manager in 1996, Mr. Dudley was a
portfolio manager with Putnam Investments from 1991 to 1996.
Margaret Eagle is Vice President and manager of Advisor High Yield and
Advisor Strategic Income, which she has managed since January 1987 and
January 1996, respectively. Ms. Eagle manages the high yield
investments for Advisor Strategic Income. In addition, she is a Senior
Vice President of Fidelity Trust Company. Ms. Eagle joined Fidelity in
1980.
Karen Firestone will be manager of Advisor Large Cap effective
April 1, 1998. She will also manage another Fidelity fund. Since
joining Fidelity in 1983, Ms. Firestone has worked as an analyst and
manager.
Kevin Grant is Vice President and manager of Advisor Intermediate Bond
and Advisor Balanced, which he has managed since October 1995 and
March 1996, respectively. Mr. Grant manages the fixed-income
investments for Advisor Balanced. He also manages several other
Fidelity funds. Prior to joining Fidelity in 1993, Mr. Grant was a
vice president and chief mortgage strategist at Morgan Stanley for
three years.
Brian Hogan is manager of Advisor Strategic Income's emerging market
securities, which he has managed since September 1997. Since joining
Fidelity in 1994, Mr. Hogan has worked as a fixed-income analyst,
research analyst, and manager. Previously, he worked as an analyst for
Conseco Capital Management from 1993 to 1994 and Aegon USA Investment
Management from 1990 to 1993.
Curt Hollingsworth is Vice President and manager of Advisor Government
Investment and Advisor Strategic Income, both of which he has managed
since February 1997. Mr. Hollingsworth manages the domestic investment
grade and U.S. Government investments for Advisor Strategic Income. He
also manages several other Fidelity funds. Since joining Fidelity in
1983, Mr. Hollingsworth has worked as a fixed-income trader and
portfolio manager.
Jonathan Kelly is manager of Advisor Strategic Income's foreign bond
investments in developed markets, which he has managed since January
1996. Previously, he managed other Fidelity funds. Since joining
Fidelity in 1991, Mr. Kelly has worked as a foreign bond analyst and
manager.
Tim Krochuk is manager of Advisor TechnoQuant Growth, which he has
managed since inception. He also manages another Fidelity fund.
Since joining Fidelity as a research associate in 1992, Mr. Krochuk
has worked as a quantitative analyst and manager.
Harris Leviton is Vice President and manager of Advisor Strategic
Opportunities, which he has managed since March 1996. Previously, he
managed other Fidelity funds. Since joining Fidelity in 1986, he has
worked as an analyst and manager.
Norm Lind is Vice President and manager of Advisor Short-Intermediate
Municipal Income, and Advisor Intermediate Municipal income,
which he has managed since October 1995 and January 1998,
respectively . He also manages several other Fidelity funds. Since
joining Fidelity in 1986, Mr. Lind has worked as an analyst and
manager.
Charles Mangum will provide assistance in managing Advisor Growth
Opportunities from time to time. He also manages another Fidelity
fund. Since joining Fidelity in 1990, Mr. Mangum has worked as an
analyst and manager.
Jonathan Short is Vice-President and Manager of Advisor Municipal
Income, which he has managed since January 1998. He also manages
several other Fidelity funds. Since joining Fidelity in 1990, Mr.
Short has worked as an analyst and manager.
Thomas Silvia is manager of Advisor Mortgage Securities. He has been a
co-manager of the fund since February 1997. Mr. Silvia joined Fidelity
as a senior mortgage trader in 1993. Previously, he was a quantitative
analyst with Donaldson, Lufkin & Jenrette in New York from 1990 to
1993.
Thomas Sprague is Vice President and manager of Advisor Large Cap,
which he has managed since March 1996 and will manage until March
31, 1998 . He also manages another Fidelity fund. Since joining
Fidelity in 1989, he has worked as an analyst and manager.
Beth Terrana is Vice President and manager of Advisor Growth & Income,
which she has managed since inception. She also manages other Fidelity
funds. Since joining Fidelity in 1983, Ms. Terrana has worked as an
analyst, portfolio assistant, and manager.
Jennifer Uhrig is Vice President and manager of Advisor Equity Growth,
which she has managed since January 1997. She also manages another
Fidelity fund. Since joining Fidelity in 1987, Ms. Uhrig has worked as
an analyst and manager.
George Vanderheiden is Vice President and manager of Advisor Growth
Opportunities, which he has managed since November 1987. He also
manages other Fidelity funds. Mr. Vanderheiden joined Fidelity in
1971.
Fidelity investment personnel may invest in securities for their own
accounts pursuant to a code of ethics that establishes procedures for
personal investing and restricts certain transactions.
FDC distributes and markets Fidelity's funds and services.
Fidelity Investments Institutional Operations Company, Inc. (FIIOC)
performs transfer agent servicing functions for the Institutional
Class of the Equity Funds, High Yield, Strategic Income, Mortgage
Securities, Government Investment, Intermediate Bond, and Short
Fixed-Income. UMB Bank, n.a. (UMB) is the transfer agent for Municipal
Income, Intermediate Municipal Income, and Short-Intermediate
Municipal Income, although it employes FIIOC to perform these
functions for the Institutional Class of each fund. UMB is located at
1010 Grand Avenue, Kansas City, Missouri.
FMR Corp. is the ultimate parent company of FMR, FIMM, FMR
U.K., and FMR Far East. Members of the Edward C. Johnson 3d family are
the predominant owners of a class of shares of common stock
representing approximately 49% of the voting power of FMR Corp. Under
the Investment Company Act of 1940 (the 1940 Act), control of a
company is presumed where one individual or group of individuals owns
more than 25% of the voting stock of that company; therefore, the
Johnson family may be deemed under the 1940 Act to form a controlling
group with respect to FMR Corp.
Fidelity International Limited (FIL), is the parent company of FIIA,
FIJ, and FIIA(U.K.)L. The Johnson family group also owns, directly or
indirectly, more than 25% of the voting common stock of FIL.
FMR may use its broker-dealer affiliates and other firms that
sell fund shares to carry out a fund's transactions, provided that the
fund receives brokerage services and commission rates comparable to
those of other broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
The value of each fund's investments varies in response to many
factors. Stock values fluctuate in response to the activities of
individual companies and general market and economic conditions.
The yield and share price of a bond fund change daily based on changes
in interest rates and market conditions, and in response to other
economic, political or financial events. The types and maturities of
the securities a bond fund purchases and the credit quality of their
issuers will impact a bond fund's reaction to these events.
The total return from a bond includes both income and price gains or
losses. While income is the most important component of bond returns
over time, a bond fund's emphasis on income does not mean the fund
invests only in the highest-yielding bonds available, or that it can
avoid losses of principal.
In general, bond prices rise when interest rates fall and fall when
interest rates rise. Longer-term bonds are usually more sensitive to
interest rate changes. In other words, the longer the maturity of a
bond, the greater the impact a change in interest rates is likely to
have on the bond's price. In addition, short-term interest rates and
long-term interest rates do not necessarily move in the same amount or
in the same direction. A short-term bond tends to react to changes in
short-term interest rates and a long-term bond tends to react to
changes in long-term interest rates.
The price of a bond is affected by the credit quality of its issuer.
Changes in the financial condition of an issuer, changes in general
economic conditions, and changes in specific economic conditions that
affect a particular type of issuer can impact the credit quality of an
issuer. Lower quality bonds generally tend to be more sensitive to
these changes than higher quality bonds.
Many types of debt securities, including mortgage securities, are
subject to prepayment risk. Prepayment risk occurs when the issuer of
a security can prepay principal prior to the security's maturity.
Securities subject to prepayment risk generally offer less potential
for gains during a declining interest rate environment, and similar or
greater potential for loss in a rising interest rate environment. In
addition, the potential impact of prepayment features on the price of
a debt security may be difficult to predict and result in greater
volatility.
Municipal securities are backed by the entity that issued them and/or
other revenue streams. Municipal security values may be significantly
affected by political changes as well as uncertainties in the
municipal market related to taxation or the rights of municipal
securities holders.
Funds which invest in foreign securities have increased economic and
political risks as they are exposed to events and factors in the
various world markets. This is especially true for funds that invest
in emerging markets. Also, because certain of the funds' investments
are denominated in foreign currencies, changes in the value of foreign
currencies can significantly affect a fund's share price. FMR may use
a variety of investment techniques to either increase or decrease a
fund's investment exposure to any currency.
FMR may use various investment techniques to hedge a portion of the
funds' risks, but there is no guarantee that these strategies will
work as FMR intends. When you sell your shares, they may be worth more
or less than what you paid for them.
TECHNOQUANT GROWTH FUND seeks growth of capital by investing mainly in
common stocks. However, the fund has the flexibility to invest in
other types of equity securities and debt securities as well. The
fund's security selection process utilizes computer-aided,
quantitative analysis. FMR's computer models use many types of data,
but emphasize technical factors such as historical price and volume
relationships. Fundamental criteria, such as earnings estimates, and
dividend yield may also be considered.
FMR's emphasis on technical analysis can result in the fund holding
different types of stocks at different times. For example, the fund
may hold stocks of companies with large or small market capitalization
or high or low price/earnings ratios. The fund's focus may change
rapidly based on FMR's analysis of the most current information. At
times, the fund may be concentrated in a small number of market
sectors or securities.
MID CAP FUND seeks long-term growth of capital by investing primarily
in equity securities of companies with medium market capitalizations.
FMR normally invests at least 65% of the fund's total assets in these
securities. The fund has the flexibility, however, to invest the
balance in other market capitalizations and security types.
Medium market capitalization companies are those whose market
capitalization falls within the capitalization range of the S&P MidCap
400 at the time of the fund's investment. The S&P MidCap 400 Index is
an unmanaged index of medium-capitalization stocks. Companies whose
capitalization falls outside this range after purchase continue to be
considered medium-capitalized for purposes of the 65% policy. As of
December 31, 1997, the S&P MidCap 400 included companies with
capitalizations of between $ 213 million and $ 13.7
billion. The capitalization range of the S&P MidCap 400 changes with
market conditions and the composition of the Index.
Investing in medium capitalization stocks may involve greater risk
than investing in large capitalization stocks, since they can be
subject to more abrupt or erratic movements. However, they tend to
involve less risk than stocks of small capitalization companies.
EQUITY GROWTH FUND seeks capital appreciation by investing primarily
in common and preferred stock and securities convertible into the
common stock of companies with above-average growth characteristics.
FMR normally invests at least 65% of the fund's total assets in common
and preferred stock. The fund looks for domestic and foreign companies
with above-average growth characteristics compared to the average of
the companies included in the S&P 500. The S&P 500 is a registered
trademark of Standard & Poor's.
Growth may be measured by factors such as earnings or gross sales.
Companies with strong growth potential often have new products,
technologies, distribution channels, or other opportunities. As a
general rule, these companies may include smaller, less well-known
companies, and companies whose stocks have higher than average
price/earnings (P/E) ratios. The market prices of these stocks may be
particularly sensitive to economic, market, or company news. FMR may
also pursue growth in larger or revitalized companies or companies
that hold a strong position in the market. These growth
characteristics may be found in mature or declining industries.
GROWTH OPPORTUNITIES FUND seeks capital growth by investing primarily
in common stocks and securities convertible into common stocks. FMR
normally invests at least 65% of the fund's total assets in securities
of companies that FMR believes have long-term growth potential.
Although the fund invests primarily in common stock and securities
convertible into common stock, it has the ability to purchase other
securities, such as preferred stock and bonds, that may produce
capital growth. The fund may invest in foreign securities without
limitation.
STRATEGIC OPPORTUNITIES FUND seeks capital appreciation by investing
primarily in securities of companies believed by FMR to involve a
"special situation." FMR normally invests at least 65% of the fund's
total assets in these securities. The term "special situation" refers
to FMR's identification of an unusual, and possibly non-repetitive,
development taking place in a company or a group of companies in an
industry.
A special situation may involve one or more of the following
characteristics:
(small solid bullet) A technological advance or discovery, the
offering of a new or unique product or service, or changes in consumer
demand or consumption forecasts.
(small solid bullet) Changes in the competitive outlook or growth
potential of an industry or a company within an industry, including
changes in the scope or nature of foreign competition or the
development of an emerging industry.
(small solid bullet) New or changed management, or material changes in
management policies or corporate structure.
(small solid bullet) Significant economic or political occurrences
abroad, including changes in foreign or domestic import and tax laws
or other regulations.
(small solid bullet) Other events, including natural disasters,
favorable litigation settlements, or a major change in demographic
patterns.
"Special situations" often involve breaks with past experience. They
can be relatively aggressive investments. In seeking capital
appreciation, the fund also may invest in securities of companies not
involving a special situation, but which are companies with valuable
fixed assets and whose securities are believed by FMR to be
undervalued in relation to the companies' assets, earnings, or growth
potential. FMR intends to invest primarily in common stocks and
securities that are convertible into common stocks; however, it also
may invest in debt securities of all types and quality if FMR believes
that investing in these securities will result in capital
appreciation. The fund may invest up to 30% of its assets in foreign
investments.
LARGE CAP FUND seeks long-term growth of capital by investing
primarily in equity securities of companies with large market
capitalizations. FMR normally invests at least 65% of the fund's total
assets in these securities. The fund has the flexibility, however, to
invest the balance in other market capitalizations and security types.
FMR defines large market capitalization companies as those with market
capitalizations of $1 billion or more at the time of the fund's
investment. Companies whose capitalization falls below this level
after purchase continue to be considered large-capitalized for
purposes of the 65% policy.
Companies with large market capitalizations typically have a large
number of publicly held shares and a high trading volume, resulting in
a high degree of liquidity. These tend to be quality companies with
strong management organizations. However, large capitalization
companies may have less growth potential than smaller companies and
may be able to react less quickly to changes in the marketplace.
GROWTH & INCOME FUND seeks high total return through a combination of
current income and capital appreciation. The fund invests mainly in
equity securities. The fund expects to invest the majority of its
assets in domestic and foreign equity securities, with a focus on
those that pay current dividends and show potential earnings growth.
However, the fund may buy debt securities as well as equity securities
that are not currently paying dividends, but offer prospects for
capital appreciation or future income.
EQUITY INCOME FUND seeks a yield which exceeds the composite dividend
yield of securities comprising the S&P 500. In addition, consistent
with the primary objective of obtaining income, the fund will consider
the potential for achieving capital appreciation. FMR normally invests
at least 65% of the fund's total assets in income-producing equity
securities. For purposes of this policy, equity securities are defined
as common and preferred stocks. The balance of the fund's assets will
tend to be invested in debt securities, a high percentage of which are
expected to be convertible into common stocks.
The fund seeks to achieve a yield that beats that of the S&P 500. The
fund does not intend to invest in securities of issuers without proven
earnings and/or credit histories. Because the fund invests for income,
as well as capital appreciation, investors should not expect capital
appreciation comparable with funds which seek only capital
appreciation. The yield on the fund's assets generally will increase
or decrease from year to year in accordance with market conditions and
in relation to the changes in yields of the stocks included in the S&P
500.
BALANCED FUND seeks both income and growth of capital by investing in
a diversified portfolio of equity and fixed-income securities with
income, growth of income, and capital appreciation potential. FMR
manages the fund to maintain a balance between stocks and bonds. When
FMR's outlook is neutral, it will invest approximately 60% of the
fund's assets in stocks and other equity securities and the remainder
in bonds and other fixed-income securities. FMR may vary from this
target if it believes stocks or bonds offer more favorable
opportunities, but will always invest at least 25% of the fund's total
assets in fixed-income senior securities (including debt securities
and preferred stock).
The fund may buy securities that are not currently paying income but
offer prospects for future income. The fund may invest in securities
of foreign issuers. In selecting investments for the fund, FMR will
consider such factors as the issuer's financial strength, its outlook
for increased dividend or interest payments, and the potential for
capital gains.
HIGH YIELD FUND seeks a combination of a high level of income and the
potential for capital gains by investing in a diversified portfolio
consisting primarily of high-yielding, fixed-income and zero coupon
securities, such as bonds, debentures and notes, convertible
securities and preferred stocks. FMR normally invests at least 65% of
the fund's total assets in these securities.
The fund may also invest in securities issued or guaranteed by the
U.S. Government, any state or any of their respective subdivisions,
agencies or instrumentalities, and securities of foreign issuers,
including securities of foreign governments. The fund may invest up to
35% of its total assets in equity securities, including common stocks,
warrants, and rights.
STRATEGIC INCOME FUND seeks a high level of current income by
investing primarily in debt securities. The fund may also seek capital
appreciation.
The fund invests primarily in fixed-income securities, allocated among
four general investment categories: high yield securities, U.S.
Government and investment-grade securities, emerging market
securities, and foreign developed market securities. The fund's
neutral mix, or the benchmark for its combination of investments in
each category over time, is approximately 40% high yield, 30% U.S.
Government and investment-grade, 15% emerging markets and 15% foreign
developed markets.
FMR regularly reviews the fund's allocation and makes changes
gradually over time to favor investments that it believes provide the
most favorable outlook for achieving the fund's objective. In normal
market environments, FMR expects the fund's asset allocation to
approximate the neutral mix within a range of plus or minus 10% of
assets per category. There are no absolute limits on the percent of
assets invested in each category, however, and FMR reserves the right
to change the neutral mix from time to time.
The HIGH YIELD category includes high-yielding, lower-quality debt
securities consisting mainly of U.S. securities of a quality grade
lower than BBB. The U.S. GOVERNMENT AND INVESTMENT-GRADE category
includes mortgage securities, U.S. Government securities, government
agency securities and other U.S. dollar-denominated securities of
investment-grade quality. The EMERGING MARKET category includes
corporate and governmental debt securities of issuers located in
emerging markets. The FOREIGN DEVELOPED MARKET category includes
corporate and governmental debt securities of issuers located in
developed foreign markets. These investment categories are only
general guidelines, and FMR may use its judgment as to which category
an investment falls within. The fund may also make investments that do
not fall within these categories.
By allocating its investments across different types of fixed-income
securities, the fund attempts to moderate the significant risks of
each investment category through diversification. Diversification,
when successful, can mean higher returns with decreased volatility.
However, each of the fund's four investment categories may experience
periods of volatile returns, and it is possible for all investment
categories to decline at the same time.
MORTGAGE SECURITIES FUND seeks high current income, consistent with
prudent investment risk, by investing primarily in mortgage-related
securities. When consistent with its goal, the fund may also consider
the potential for capital gain. FMR normally invests at least 65% of
the fund's total assets in mortgage-related securities. The fund may
also invest in U.S. Government securities and instruments related to
U.S. Government securities. Instruments related to U.S. Government
securities may include futures or options on U.S. Government
securities or interests in U.S. Government securities that have been
repackaged by dealers or other third parties.
In managing the fund, FMR selects a benchmark index which is
representative of the universe of securities in which the fund
invests. FMR uses this benchmark as a guide in structuring the fund
and selecting its investments. The benchmark index for the fund is the
Lehman Brothers Mortgage-Backed Securities Index, a market
capitalization weighted benchmark of 15- and 30-year fixed-rate
securities backed by mortgage pools of the Government National
Mortgage Association (GNMA), Fannie Mae and Federal Home Loan Mortgage
Corporation (FHLMC), and balloon mortgages with fixed-rate coupons.
FMR manages the fund to have similar overall interest rate risk to the
Index. As of October 31, 1997, the dollar-weighted average maturity of
the fund and the Index was approximately 5.8 and 6.01
years, respectively.
FMR allocates assets among different market sectors (for example,
fixed-rate or adjustable rate mortgages) and different maturities
based on its view of the relative value of each sector or maturity.
FMR focuses on assembling a portfolio of income-producing bonds that
it believes will provide the best balance between risk and return
within the universe of securities in which the fund invests. FMR's
evaluation of a potential investment includes an analysis of the
credit quality of the issuer, its structural features, its current
price compared to FMR's estimate of its long-term value, and any
short-term trading opportunities resulting from market inefficiencies.
In determining a security's maturity for purposes of calculating the
fund's average maturity, an estimate of the average time for its
principal to be paid may be used. This could be substantially shorter
than its stated final maturity.
GOVERNMENT INVESTMENT FUND seeks high current income by investing in
U.S. Government securities and instruments related to U.S. Government
securities under normal conditions. FMR normally invests the fund's
assets only in U.S. Government securities, repurchase agreements, and
other instruments related to U.S. Government securities. Under normal
conditions, FMR invests at least 65% of the fund's total assets in
U.S. Government securities and repurchase agreements for U.S.
Government securities. Other instruments may include futures or
options on U.S. Government securities or interests in U.S. Government
securities that have been repackaged by dealers or other third
parties. It is important to note that neither the fund nor its yield
is guaranteed by the U.S. Government.
In managing the fund, FMR selects a benchmark index which is
representative of the universe of securities in which the fund
invests. FMR uses this benchmark as a guide in structuring the fund
and selecting its investments. The benchmark index for the fund is the
Lehman Brothers Government Bond Index, a market value weighted
benchmark of U.S. G overnment and government agency
securities (other than mortgage securities) with maturities of one
year or more . FMR manages the fund to have similar overall
interest rate risk to the Index. As of October 31, 1997, the
dollar-weighted average maturity of the fund and the Index was
approximately 8.2 and 8.67 years, respectively.
FMR allocates assets among different market sectors (for example, U.S.
Treasury or U.S. Government agency securities) and different
maturities based on its view of the relative value of each sector or
maturity.
FMR focuses on assembling a portfolio of income-producing bonds that
it believes will provide the best balance between risk and return
within the universe of securities in which the fund invests. FMR's
evaluation of a potential investment includes an analysis of the
credit quality of the issuer, its structural features, its current
price compared to FMR's estimate of its long-term value, and any
short-term trading opportunities resulting from market inefficiencies.
In determining a security's maturity for purposes of calculating the
fund's average maturity, an estimate of the average time for its
principal to be paid may be used. This could be substantially shorter
than its stated final maturity.
INTERMEDIATE BOND FUND seeks high current income by investing in U.S.
dollar-denominated investment-grade debt securities under normal
conditions. When consistent with its primary objective, the fund may
also seek capital appreciation.
In managing the fund, FMR selects a benchmark index which is
representative of the universe of securities in which the fund
invests. FMR uses this benchmark as a guide in structuring the fund
and selecting its investments. The benchmark index for the fund is the
Lehman Brothers Intermediate Government/Corporate Bond Index, a market
value weighted benchmark for government and corporate fixed-rate debt
issues with maturities between one and 10 years. FMR manages the fund
to have similar overall interest rate risk to the Index. As of
November 30, 1997, the dollar-weighted average maturity of the fund
and the Index was approximately 5.9 and 4.30 years,
respectively. In addition, the fund normally maintains a
dollar-weighted average maturity between three and 10 years.
FMR allocates assets among different market sectors (for example,
corporate or government securities) and different maturities based on
its view of the relative value of each sector or maturity.
FMR focuses on assembling a portfolio of income-producing bonds that
it believes will provide the best balance between risk and return
within the universe of securities in which the fund invests. FMR's
evaluation of a potential investment includes an analysis of the
credit quality of the issuer, its structural features, its current
price compared to FMR's estimate of its long-term value, and any
short-term trading opportunities resulting from market inefficiencies.
In determining a security's maturity for purposes of calculating the
fund's average maturity, an estimate of the average time for its
principal to be paid may be used. This can be substantially shorter
than its stated final maturity.
SHORT FIXED-INCOME FUND seeks high current income, consistent with the
preservation of capital, by investing in U.S. dollar-denominated
investment-grade debt securities under normal conditions. Where
appropriate the fund will take advantage of opportunities to realize
capital appreciation. FMR normally invests at least 65% of the fund's
total assets in fixed-income securities of all types which may include
convertible and zero coupon securities.
In managing the fund, FMR selects a benchmark index which is
representative of the universe of securities in which the fund
invests. FMR uses this benchmark as a guide in structuring the fund
and selecting its investments. The benchmark index for the fund is the
Lehman Brothers 1-3 Year Government/Corporate Bond Index, a market
value weighted benchmark for government and corporate fixed-rate debt
issues with maturities between one and three years. FMR manages the
fund to have similar overall interest rate risk to the Index. As of
October 31, 1997, the dollar-weighted average maturity of the fund and
the Index was approximately 2.2 and 2.09 years,
respectively. In addition, the fund normally maintains a
dollar-weighted average maturity of three years or less.
FMR allocates assets among different market sectors (for example,
corporate or government securities) and different maturities based on
its view of the relative value of each sector or maturity.
FMR focuses on assembling a portfolio of income-producing bonds that
it believes will provide the best balance between risk and return
within the universe of securities in which the fund invests. FMR's
evaluation of a potential investment includes an analysis of the
credit quality of the issuer, its structural features, its current
price compared to FMR's estimate of its long-term value, and any
short-term trading opportunities resulting from market inefficiencies.
In determining a security's maturity for purposes of calculating the
fund's average maturity, an estimate of the average time for its
principal to be paid may be used. This can be substantially shorter
than its stated final maturity.
MUNICIPAL INCOME FUND seeks high current income that is free from
federal income tax by investing primarily in investment-grade
municipal securities. FMR normally invests at least 80% of the fund's
assets in municipal securities whose interest is free from federal
income tax.
In managing the fund, FMR selects a benchmark index which is
representative of the universe of securities in which the fund
invests. FMR uses this benchmark as a guide in structuring the fund
and selecting its investments. The benchmark index for the fund is the
Lehman Brothers Municipal Bond Index, a benchmark of investment-grade
municipal bonds with maturities of one year or more. FMR manages the
fund to have similar overall interest rate risk to the Index. As of
October 31, 1997, the dollar-weighted average maturity of the fund and
the Index was approximately 13.2 and 13.97 years,
respectively.
FMR allocates assets among different market sectors (for example,
general obligation bonds of a state or bonds financing a specific
project) and different maturities based on its view of the relative
value of each sector or maturity.
FMR focuses on assembling a portfolio of income-producing bonds that
it believes will provide the best balance between risk and return
within the universe of securities in which the fund invests. FMR's
evaluation of a potential investment includes an analysis of the
credit quality of the issuer, its structural features, its current
price compared to FMR's estimate of its long-term value, and any
short-term trading opportunities resulting from market inefficiencies.
In addition, FMR may invest all of the fund's assets in municipal
securities issued to finance private activities. The interest from
these securities is a tax preference item for the purposes of the
federal alternative minimum tax.
INTERMEDIATE MUNICIPAL INCOME FUND seeks high current income that is
free from federal income tax, consistent with the preservation of
capital, by investing in investment-grade municipal securities under
normal conditions. FMR normally invests at least 80% of the fund's
assets in municipal securities whose interest is free from federal
income tax.
In managing the fund, FMR selects a benchmark index which is
representative of the universe of securities in which the fund
invests. FMR uses this benchmark as a guide in structuring the fund
and selecting its investments. The benchmark index for the fund is the
Lehman Brothers 1-17 Year Municipal Bond Index, a benchmark of
investment-grade municipal bonds with maturities between one and 17
years. FMR manages the fund to have similar overall interest rate risk
to the Index. As of November 30, 1997, the dollar-weighted average
maturity of the fund and the Index was approximately 7.6 and
8.49 years, respectively. In addition, the fund normally
maintains a dollar-weighted average maturity between three and 10
years.
FMR allocates assets among different market sectors (for example,
general obligation bonds of a state or bonds financing a specific
project) and different maturities based on its view of the relative
value of each sector or maturity.
FMR focuses on assembling a portfolio of income-producing bonds that
it believes will provide the best balance between risk and return
within the universe of securities in which the fund invests. FMR's
evaluation of a potential investment includes an analysis of the
credit quality of the issuer, its structural features, its current
price compared to FMR's estimate of its long-term value, and any
short-term trading opportunities resulting from market inefficiencies.
In addition, FMR may invest all of the fund's assets in municipal
securities issued to finance private activities. The interest from
these securities is a tax preference item for the purposes of the
federal alternative minimum tax.
SHORT-INTERMEDIATE MUNICIPAL INCOME FUND seeks high current income
that is free from federal income tax, consistent with preservation of
capital, by investing in investment-grade municipal securities under
normal conditions. FMR normally invests at least 80% of the fund's
assets in municipal securities whose interest is free from federal
income tax.
In managing the fund, FMR selects a benchmark index which is
representative of the universe of securities in which the fund
invests. FMR uses this benchmark as a guide in structuring the fund
and selecting its investments. The benchmark index for the fund is the
Lehman Brothers 1-5 Year Municipal Bond Index, a benchmark of
investment-grade municipal bonds with maturities between one and five
years. FMR manages the fund to have similar overall interest rate risk
to the Index. As of November 30, 1997, the dollar-weighted average
maturity of the fund and the Index was approximately 3.2 and
3.69 years, respectively. In addition, the fund normally
maintains a dollar-weighted average maturity between two and five
years.
FMR allocates assets among different market sectors (for example,
general obligation bonds of a state or bonds financing a specific
project) and different maturities based on its view of the relative
value of each sector or maturity.
FMR focuses on assembling a portfolio of income-producing bonds that
it believes will provide the best balance between risk and return
within the universe of securities in which the fund invests. FMR's
evaluation of a potential investment includes an analysis of the
credit quality of the issuer, its structural features, its current
price compared to FMR's estimate of its long-term value, and any
short-term trading opportunities resulting from market inefficiencies.
In addition, FMR may invest all of the fund's assets in municipal
securities issued to finance private activities. The interest from
these securities is a tax preference item for the purposes of the
federal alternative minimum tax.
TEMPORARY DEFENSIVE POLICIES. FMR normally invests each fund's assets
according to its investment strategy.
Each of the Equity Funds, High Yield, and Strategic Income reserves
the right to invest without limitation in preferred stocks and
investment-grade debt instruments for temporary, defensive purposes.
Each of Mortgage Securities, Government Investment, Intermediate Bond,
and Short Fixed-Income reserves the right to invest without limitation
in investment-grade money market or short-term debt instruments for
temporary, defensive purposes.
Each of Municipal Income, Intermediate Municipal Income, and
Short-Intermediate Municipal Income do not expect to invest in
federally taxable obligations. Each of Municipal Income, Intermediate
Municipal Income, and Short-Intermediate Municipal Income, reserves
the right to invest without limitation in short-term instruments, to
hold a substantial amount of uninvested cash, or to invest more than
normally permitted in taxable obligations for temporary, defensive
purposes.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which a fund may invest, strategies FMR may employ in
pursuit of a fund's investment objective, and a summary of related
risks. Any restrictions listed supplement those discussed earlier in
this section. A complete listing of each fund's limitations and more
detailed information about each fund's investments are contained in
the funds' SAI. Policies and limitations are considered at the time of
purchase; the sale of instruments is not required in the event of a
subsequent change in circumstances.
FMR may not buy all of these instruments or use all of these
techniques unless it believes that they are consistent with a fund's
investment objective and policies and that doing so will help a fund
achieve its goal. Fund holdings and recent investment strategies are
detailed in each fund's financial reports, which are sent to
shareholders twice a year. For a free SAI or financial report, call
your investment professional.
EQUITY SECURITIES may include common stocks, preferred stocks,
convertible securities, and warrants. Common stocks, the most familiar
type, represent an equity (ownership) interest in a corporation.
Although equity securities have a history of long-term growth in
value, their prices fluctuate based on changes in a company's
financial condition and on overall market and economic conditions.
Smaller companies are especially sensitive to these factors.
RESTRICTIONS: With respect to 75% of its total assets, each of the
Equity Funds, High Yield, Mortgage Securities, Government Investment,
Intermediate Bond, Short Fixed-Income, Municipal Income, and
Intermediate Municipal Income may not purchase more than 10% of the
outstanding voting securities of a single issuer. For TechnoQuant
Growth, Mid Cap, Equity Growth, Growth Opportunities, Strategic
Opportunities, Large Cap, and Growth & Income, this limitation does
not apply to securities of other investment companies.
DEBT SECURITIES. Bonds and other debt instruments are used by issuers
to borrow money from investors. The issuer generally pays the investor
a fixed, variable, or floating rate of interest, and must repay the
amount borrowed at maturity. Some debt securities, such as zero coupon
bonds, do not pay current interest, but are sold at a discount from
their face values.
Debt securities have varying levels of sensitivity to changes in
interest rates and varying degrees of credit quality. In general, bond
prices rise when interest rates fall, and fall when interest rates
rise. Longer-term bonds and zero coupon bonds are generally more
sensitive to interest rate changes. In addition, bond prices are also
affected by the credit quality of the issuer.
Lower-quality debt securities are considered to have speculative
characteristics, and involve greater risk of default or price changes
due to changes in the issuer's creditworthiness, or they may already
be in default. The market prices of these securities may fluctuate
more than higher-quality securities and may decline significantly in
periods of general or regional economic difficulty. Lower-quality
securities may be thinly traded, making them difficult to sell
promptly at an acceptable price. Adverse publicity and changing
investor perceptions may affect the ability to obtain prices for, or
to sell these securities.
The default rate of lower-quality debt securities is likely to be
higher when issuers have difficulty meeting projected goals or
obtaining additional financing. This could occur during economic
recessions or periods of high interest rates. If an issuer defaults,
the fund may try to protect the interests of security holders if it
determines such action to be in the interest of its shareholders.
The table on the following page provides a summary of ratings assigned
to debt holdings (not including money market instruments) in the
funds' portfolios. These figures are dollar-weighted averages of
month-end portfolio holdings during the fiscal period ended 1997, and
are presented as a percentage of total security investments. These
percentages are historical and do not necessarily indicate a fund's
current or future debt holdings.
FISCAL PERIOD ENDED 1997 DEBT HOLDINGS (AS A % OF INVESTMENTS), BY
RATING
MID** EQUITY** GROWTH* GROWTH**** STRATEGIC** LARGE** GROWTH &**
EQUITY** HIGH* STRATEGIC***
S&P RATING CAP GROWTH OPPORTUNITIES OPPORTUNITIES OPPORTUNITIES CAP
INCOME INCOME BALANCED* YIELD INCOME
(AVERAGE OF TOTAL INVESTMENTS)
INVESTMENT GRADE
HIGHEST QUALITY AAA
HIGH QUALITY AA -- -- 14.0 0 % 12.10% -- -- 0.20% 1.35% 22.57% --
41.93%
UPPER-MEDIUM GRADE A
MEDIUM GRADE BBB -- -- -- -- -- -- 0.36% -- 7.19% 0.32% 0.85%
LOWER QUALITY
MODERATELY SPECULATIVE BB -- -- -- -- -- -- 0.35% 0.25% 0.87% 6.39%
8.66%
SPECULATIVE B 0.01% -- -- -- 0.06% -- 0.14% -- 3. 9 2% 51.18%
25.32%
HIGHLY SPECULATIVE CCC -- -- -- -- -- -- -- -- 0.33% 7.13% 2.85%
POOR QUALITY CC -- -- -- -- -- -- -- -- 0.04% 1.14% 0.30%
LOWEST QUALITY, NO INTEREST C -- -- -- -- -- -- -- -- -- -- --
IN DEFAULT, IN ARREARS D -- -- -- -- -- -- -- -- -- -- --
MID EQUITY GROWTH GROWTH STRATEGIC LARGE GROWTH & EQUITY HIGH
STRATEGIC
MOODY'S RATING CAP GROWTH OPPORTUNITIES OPPORTUNITIES OPPORTUNITIES
CAP INCOME INCOME BALANCED YIELD INCOME
(AVERAGE OF TOTAL INVESTMENTS)
INVESTMENT GRADE
HIGHEST QUALITY AAA
HIGH QUALITY AA -- -- 14.0 0 % 12.10 % -- -- 0.10% 1.35%
23.89% -- 41.40%
UPPER-MEDIUM GRADE A
MEDIUM GRADE BAA -- -- -- -- -- -- 0.13% -- 4.64% -- 0.15%
LOWER QUALITY
MODERATELY SPECULATIVE BA -- -- -- -- -- -- 0.57% 0.24% 2.19% 5.98%
7.98%
SPECULATIVE B 0.01% -- -- -- 0.38% -- 0.23% 0.01% 3. 9 0%
50.69% 27.95%
HIGHLY SPECULATIVE CAA -- -- -- -- -- -- -- -- 0.37% 11.11% 3.17%
POOR QUALITY CA -- -- -- -- -- -- -- -- -- 0.03% --
LOWEST QUALITY, NO INTEREST C -- -- -- -- -- -- -- -- -- -- --
IN DEFAULT, IN ARREARS --- -- -- -- -- -- -- -- -- -- -- --
* FISCAL YEAR ENDED OCTOBER 31, 1997.
** FISCAL YEAR ENDED NOVEMBER 30, 1997.
*** FISCAL YEAR ENDED DECEMBER 31, 1997.
**** FOR THE MONTH PERIOD ENDED NOVEMBER 30, 1997.
REFER TO THE APPENDIX FOR A MORE COMPLETE DISCUSSION OF THESE RATINGS.
THE FUNDS DO NOT NECESSARILY RELY ON THE RATINGS OF MOODY'S OR S&P TO
DETERMINE COMPLIANCE WITH THEIR DEBT QUALITY POLICIES. SECURITIES NOT
RATED BY MOODY'S AND S&P AMOUNTED TO
0.6 6 % OF BALANCED INVESTMENTS, 5.72% OF HIGH YIELD INVESTMENTS,
9 .16% OF STRATEGIC INCOME INVESTMENTS, 0.59% OF STRATEGIC
OPPORTUNITIES INVESTMENTS. THESE PERCENTAGES MAY
INCLUDE SECURITIES RATED BY OTHER NATIONALLY RECOGNIZED STATISTICAL
RATING ORGANIZATIONS, AS WELL AS UNRATED SECURITIES. UNRATED
LOWER-QUALITY SECURITIES AMOUNTED TO 0.51% OF BALANCED
INVESTMENTS, 5. 66 % OF HIGH YIELD INVESTMENTS, 9.09% OF
STRATEGIC INCOME INVESTMENTS , AND 0.59% OF STRATEGIC OPPORTUNITIES
INVESTMENTS.
FOR FOREIGN GOVERNMENT OBLIGATIONS NOT INDIVIDUALLY RATED BY A
NATIONALLY RECOGNIZED STATISTICAL RATING ORGANIZATION, FMR ASSIGNS THE
RATING OF THE SOVEREIGN CREDIT OF THE ISSUING GOVERNMENT.
RESTRICTIONS: For all of the Equity Funds, purchase of a debt security
is consistent with a fund's debt quality policy if it is rated at or
above the stated level by Moody's Investors Service (Moody's) or rated
in the equivalent categories by Standard & Poor's (S&P), or is unrated
but judged to be of equivalent quality by FMR.
Each of Mid Cap, Equity Growth, Growth Opportunities, Strategic
Opportunities, Large Cap, Growth & Income, Equity Income, and Balanced
currently intends to limit its investments in lower than Baa-quality
debt securities to less than 35% of its assets.
TechnoQuant Growth currently intends to limit its investments in lower
than Baa-quality debt securities to 5% of its assets.
Each of Intermediate Bond, Mortgage Securities, Short Fixed-Income,
Municipal Income, Intermediate Municipal Income, and
Short-Intermediate Municipal Income normally invests in
investment-grade securities, but reserves the right to invest up to 5%
of its assets in below investment-grade securities. A security is
considered to be investment-grade if it is rated investment-grade by
Moody's, S&P, Duff & Phelps Credit Rating Co., or Fitch IBCA,
Inc., or is unrated but judged by FMR to be of equivalent quality.
U.S. GOVERNMENT SECURITIES are high-quality debt instruments issued or
guaranteed by the U.S. Treasury or by an agency or instrumentality of
the U.S. Government. Not all U.S. Government securities are backed by
the full faith and credit of the United States. For example, U.S.
Government securities such as those issued by Fannie Mae are supported
by the instrumentality's right to borrow money from the U.S. Treasury
under certain circumstances. Other U.S. Government securities, such as
those issued by the Federal Farm Credit Banks Funding Corporation, are
supported only by the credit of the entity that issued them.
MUNICIPAL SECURITIES are issued to raise money for a variety of public
or private purposes, including general financing for state and local
governments, or financing for specific projects or public facilities.
They may be fully or partially backed by the local government, or by
the credit of a private issuer or the current or anticipated revenues
from specific projects or assets. Because many municipal securities
are issued to finance similar types of projects, especially those
relating to education, health care, housing, transportation, and
utilities, the municipal markets can be affected by conditions in
those sectors. In addition, all municipal securities may be affected
by uncertainties regarding their tax status, legislative changes, or
rights of municipal securities holders. A municipal security may be
owned directly or through a participation interest.
CREDIT AND LIQUIDITY SUPPORT. Issuers may employ various forms of
credit and liquidity enhancement, including letters of credit,
guarantees, puts and demand features, and insurance, provided by
foreign or domestic entities such as banks and other financial
institutions. These arrangements expose a fund to the credit risk of
the entity providing the credit or liquidity support. Changes in the
credit quality of the provider could affect the value of the security
and a fund's share price.
OTHER INSTRUMENTS may include securities of closed-end investment
companies.
EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies,
and securities issued by U.S. entities with substantial foreign
operations may involve additional risks and considerations. These
include risks relating to political , economic , or
regulatory conditions in foreign countries ; fluctuations in
foreign currencies ; withholding or other taxes ; trading,
settlement, custodial, and other operational risks; and the
potentially less stringent investor protection and disclosure
standards of foreign markets. Additionally, governmental issuers of
foreign debt securities may be unwilling to pay interest and repay
principal when due and may require that the conditions for payment be
renegotiated. All of these factors can make foreign investments,
especially those in emerging markets , more volatile and
potentially less liquid than U.S. investments.
ASSET-BACKED SECURITIES include interests in pools of purchase
contracts, financing leases, or sales agreements entered into by
municipalities, debt securities, or consumer loans. The value of these
securities depends on many factors, including changes in interest
rates, the availability of information concerning the pool and its
structure, the credit quality of the underlying assets, the market's
perception of the servicer of the pool, and any credit enhancement
provided. In addition, these securities may be subject to prepayment
risk.
MORTGAGE SECURITIES include interests in pools of commercial or
residential mortgages, and may include complex instruments such as
collateralized mortgage obligations and stripped mortgage-backed
securities. Mortgage securities may be issued by agencies or
instrumentalities of the U.S. Government or by private entities.
The price of a mortgage security may be significantly affected by
changes in interest rates. Some mortgage securities may have a
structure that makes their reaction to interest rates and other
factors difficult to predict, making their price highly volatile.
Also, mortgage securities, especially stripped mortgage-backed
securities, are subject to prepayment risk. Securities subject to
prepayment risk generally offer less potential for gains during a
declining interest rate environment, and similar or greater potential
for loss in a rising interest rate environment.
RESTRICTIONS: Government Investment does not currently intend to
invest more than 40% of its assets in mortgage securities.
VARIABLE AND FLOATING RATE SECURITIES have interest rates that are
periodically adjusted either at specific intervals or whenever a
benchmark rate changes. Inverse floaters have interest rates that move
in the opposite direction from a benchmark, often making the
security's market value more volatile.
STRIPPED SECURITIES are the separate income or principal components of
a debt security. The risks associated with stripped securities are
similar to those of other debt securities, although stripped
securities may be more volatile, and the value of certain types of
stripped securities may move in the same direction as interest rates.
U.S. Treasury securities that have been stripped by a Federal Reserve
Bank are obligations issued by the U.S. Treasury.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund buys a
security at one price and simultaneously agrees to sell it back at a
higher price. Delays or losses could result if the other party to the
agreement defaults or becomes insolvent.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a
fund temporarily transfers possession of a portfolio instrument to
another party in return for cash. This could increase the risk of
fluctuation in the fund's yield or in the market value of its assets.
MUNICIPAL LEASE OBLIGATIONS are used by municipalities to acquire
land, equipment, or facilities. If the municipality stops making
payments or transfers its obligations to a private entity, the
obligation could lose value or become taxable.
PUT FEATURES entitle the holder to put (sell back) an instrument to
the issuer or another party. In exchange for this benefit, a fund may
accept a lower interest rate. Demand features and standby commitments
are types of put features.
PRIVATE ENTITIES may be involved in some municipal securities. For
example, industrial revenue bonds are backed by private entities, and
resource recovery bonds often involve private corporations. The
viability of a project or tax incentives could affect the value and
credit quality of these securities.
REAL ESTATE-RELATED INSTRUMENTS include real estate investment trusts,
commercial and residential mortgage-backed securities, and real estate
financings. Real estate-related instruments are sensitive to factors
such as changes in real estate values and property taxes, interest
rates, cash flow of underlying real estate assets, overbuilding, and
the management skill and creditworthiness of the issuer. Real
estate-related instruments may also be affected by tax and regulatory
requirements, such as those relating to the environment.
ADJUSTING INVESTMENT EXPOSURE. A fund can use various techniques to
increase or decrease its exposure to changing security prices,
interest rates, currency exchange rates, commodity prices, or other
factors that affect security values. These techniques may involve
derivative transactions such as buying and selling options and futures
contracts, entering into currency exchange contracts or swap
agreements, purchasing indexed securities, and selling securities
short.
FMR can use these practices to adjust the risk and return
characteristics of a fund's portfolio of investments. If FMR judges
market conditions incorrectly or employs a strategy that does not
correlate well with a fund's investments, these techniques could
result in a loss, regardless of whether the intent was to reduce risk
or increase return. These techniques may increase the volatility of a
fund and may involve a small investment of cash relative to the
magnitude of the risk assumed. In addition, these techniques could
result in a loss if the counterparty to the transaction does not
perform as promised.
DIRECT DEBT. Loans and other direct debt instruments are interests in
amounts owed to another party by a company, government, or other
borrower. They have additional risks beyond conventional debt
securities because they may entail less legal protection for a fund,
or there may be a requirement that the fund supply additional cash to
a borrower on demand.
ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined
by FMR, under the supervision of the Board of Trustees, to be
illiquid, which means that they may be difficult to sell promptly at
an acceptable price. The sale of some illiquid securities, and some
other securities, may be subject to legal restrictions. Difficulty in
selling securities may result in a loss or may be costly to a fund.
RESTRICTIONS: Each fund (except High Yield and Strategic Income) may
not purchase a security if, as a result, more than 10% of its assets
would be invested in illiquid securities.
Each of High Yield and Strategic Income may not purchase a security
if, as a result, more than 15% of its assets would be invested in
illiquid securities.
WHEN-ISSUED AND FORWARD PURCHASE OR SALE TRANSACTIONS are trading
practices in which payment and delivery for the security take place at
a later date than is customary for that type of security. The market
value of the security could change during this period.
CASH MANAGEMENT. A fund may invest in money market securities, in
repurchase agreements, and in a money market fund available only to
funds and accounts managed by FMR or its affiliates, whose goal is to
seek a high level of current income (exempt from federal income tax in
the case of a municipal money market fund) while maintaining a stable
$1.00 share price. A major change in interest rates or a default on
the money market fund's investments could cause its share price to
change.
RESTRICTIONS: Municipal Income, Intermediate Municipal Income, and
Short-Intermediate Municipal Income, do not currently intend to invest
in repurchase agreements.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce
the risks of investing. This may include limiting the amount of money
invested in any one issuer or, on a broader scale, in any one industry
or type of project. Economic, business, or political changes can
affect all securities of a similar type. A fund that is not
diversified may be more sensitive to changes in the market value of a
single issuer or industry.
RESTRICTIONS: With respect to 75% of its total assets, each of the
Equity Funds, High Yield, Mortgage Securities, Government Investment,
Intermediate Bond, Short Fixed-Income, Municipal Income, and
Intermediate Municipal Income may not purchase a security if, as a
result, more than 5% would be invested in the securities of any
issuer. This limitation does not apply to U.S. Government securities
or, for TechnoQuant Growth, Mid Cap, Equity Growth, Growth
Opportunities, Strategic Opportunities, Large Cap, and Growth &
Income, to securities of other investment companies.
Strategic Income and Short-Intermediate Municipal Income are
considered non-diversified. Generally, to meet federal tax
requirements at the close of each quarter, each fund does not invest
more than 25% of its total assets in any issuer and, with respect to
50% of total assets, does not invest more than 5% of its total assets
in any issuer. These limitations do not apply to U.S. Government
securities or to securities of other investment companies.
A fund may not invest more than 25% of its total assets in any one
industry. This limitation does not apply to U.S. Government
securities.
Each of Municipal Income, Intermediate Municipal Income, and
Short-Intermediate Municipal Income may invest more than 25% of its
total assets in tax-free securities that finance similar types of
projects.
BORROWING. Each fund may borrow from banks or from other funds advised
by FMR, or through reverse repurchase agreements. If a fund borrows
money, its share price may be subject to greater fluctuation until the
borrowing is paid off. If a fund makes additional investments while
borrowings are outstanding, this may be considered a form of leverage.
RESTRICTIONS: Each fund may borrow only for temporary or emergency
purposes, but not in an amount exceeding 331/3% of its total assets.
LENDING securities to broker-dealers and institutions, including
Fidelity Brokerage Services, Inc. (FBSI), an affiliate of FMR, is a
means of earning income. This practice could result in a loss or a
delay in recovering a fund's securities. A fund may also lend money to
other funds advised by FMR.
RESTRICTIONS: Loans, in the aggregate, may not exceed 331/3% of a
fund's total assets; however, Government Investment, Municipal Income,
Intermediate Municipal Income, and Short-Intermediate Municipal Income
do not currently intend to make loans.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages
are fundamental, that is, subject to change only by shareholder
approval. The following paragraphs restate all those that are
fundamental. All policies stated throughout this prospectus, other
than those identified in the following paragraphs, can be changed
without shareholder approval.
TECHNOQUANT GROWTH FUND seeks capital growth.
MID CAP FUND seeks long-term growth of capital.
EQUITY GROWTH FUND seeks to achieve capital appreciation by investing
primarily in common and preferred stock and securities convertible
into the common stock of companies with above-average growth
characteristics.
GROWTH OPPORTUNITIES FUND seeks to provide capital growth by investing
primarily in common stocks and securities convertible into common
stocks.
STRATEGIC OPPORTUNITIES FUND seeks capital appreciation by investing
primarily in securities of companies believed by FMR to involve a
"special situation." Under normal conditions, the fund will invest at
least 65% of its total assets in companies involving a special
situation. FMR intends to invest primarily in common stocks and
securities that are convertible into common stocks; however, it also
may invest in debt securities of all types and quality if FMR believes
that investing in these securities will result in capital
appreciation. The fund may invest up to 30% of its assets in foreign
investments.
LARGE CAP FUND seeks long-term growth of capital.
GROWTH & INCOME FUND seeks high total return through a combination of
current income and capital appreciation.
EQUITY INCOME FUND seeks a yield from dividend and interest income
which exceeds the composite dividend yield on securities comprising
the S&P 500. In addition, consistent with the primary objective of
obtaining dividend and interest income, the fund will consider the
potential for achieving capital appreciation.
BALANCED FUND seeks both income and growth of capital by investing in
a diversified portfolio of equity and fixed-income securities with
income, growth of income, and capital appreciation potential.
HIGH YIELD FUND seeks a combination of a high level of income and the
potential for capital gains by investing in a diversified portfolio
consisting primarily of high-yielding, fixed-income and zero coupon
securities, such as bonds, debentures and notes, convertible
securities and preferred stocks.
STRATEGIC INCOME FUND seeks a high level of current income by
investing primarily in debt securities. The fund may also seek capital
appreciation.
MORTGAGE SECURITIES FUND seeks a high level of current income,
consistent with prudent investment risk, by investing primarily in
mortgage-related securities. In seeking current income, the fund may
also consider the potential for capital gain.
GOVERNMENT INVESTMENT FUND seeks a high level of current income by
investing primarily in obligations issued or guaranteed by the U.S.
Government or any of its agencies or instrumentalities.
INTERMEDIATE BOND FUND seeks to provide a high rate of income through
investment primarily in investment-grade fixed-income obligations.
SHORT FIXED-INCOME FUND seeks to obtain a high level of current
income, consistent with the preservation of capital, by investing
primarily in a broad range of investment-grade fixed-income
securities. Where appropriate the fund will take advantage of
opportunities to realize capital appreciation.
MUNICIPAL INCOME FUND seeks to provide a high current yield by
investing in a diversified portfolio of municipal obligations whose
interest is not included in gross income for purposes of calculating
federal income tax. The fund normally invests at least 80% of its
assets in municipal obligations whose interest is free from federal
income tax.
INTERMEDIATE MUNICIPAL INCOME FUND seeks the highest level of income
exempt from federal income taxes that can be obtained consistent with
the preservation of capital. The fund normally invests at least 80% of
its assets in securities whose interest is free from federal income
tax.
SHORT-INTERMEDIATE MUNICIPAL INCOME FUND seeks as high a level of
current income, exempt from federal income tax, as is consistent with
preservation of capital. The fund normally invests at least 80% of its
assets in municipal obligations whose interest is free from federal
income tax.
With respect to 75% of its total assets, each of the Equity Funds,
High Yield, Mortgage Securities, Government Investment, Intermediate
Bond, Short Fixed-Income, Municipal Income, and Intermediate Municipal
Income may not purchase a security if, as a result, more than 5% would
be invested in the securities of any one issuer and may not purchase
more than 10% of the outstanding voting securities of a single issuer.
These limitations do not apply to U.S. Government securities or, for
TechnoQuant Growth, Mid Cap, Equity Growth, Growth Opportunities,
Strategic Opportunities, Large Cap, and Growth & Income, to securities
of other investment companies.
Each fund may not invest more than 25% of its total assets in any one
industry. This limitation does not apply to U.S. Government
securities.
Each fund may borrow only for temporary or emergency purposes, but not
in an amount exceeding 331/3% of its total assets.
Loans, in the aggregate, may not exceed 331/3% of each fund's total
assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the funds pay fees related to their daily
operations. Expenses paid out of each clas s's assets are
reflected in that class's share price or dividends; they are neither
billed directly to shareholders nor deducted from shareholder
accounts.
Each fund pays a MANAGEMENT FEE to FMR for managing its investments
and business affairs. FMR in turn pays fees to affiliates who provide
assistance with these services for certain of the funds. Each fund
also pays OTHER EXPENSES, which are explained on page .
FMR may, from time to time, agree to reimburse a fund for management
fees and other expenses above a specified limit. FMR retains the
ability to be repaid by a fund if expenses fall below the specified
limit prior to the end of the fiscal year. Reimbursement arrangements,
which may be terminated at any time without notice, can decrease a
fund's expenses and boost its performance.
MANAGEMENT FEE
The management fee is calculated and paid to FMR every month.
Equity Income pays a monthly management fee at an annual rate of 0.50%
of its average net assets.
For each of TechnoQuant Growth, Mid Cap, Equity Growth, Large Cap,
Growth & Income, Balanced, High Yield, Strategic Income, Mortgage
Securities, Government Investment, Intermediate Bond, Short
Fixed-Income, Municipal Income, Intermediate Municipal Income, and
Short-Intermediate Municipal Income, the fee is calculated by adding a
group fee rate to an individual fund fee rate, multiplying the result
by the fund's monthly average net asset s, and dividing by
twelve.
For Growth Opportunities and Strategic Opportunities, the fee is
calculated by calculating a basic fee and then applying a
performance adjustment. The performance adjustment either increases or
decreases the management fee, depending on how well each fund has
performed relative to the S&P 500. The basic fee is calculated by
adding a group fee rate to an individual fund fee rate, multiplying
the result by the fund's monthly average net assets, and dividing by
twelve.
The group fee rate is based on the average net assets of all the
mutual funds advised by FMR. This rate cannot rise above 0.52% for
TechnoQuant Growth, Mid Cap, Equity Growth, Growth Opportunities,
Strategic Opportunities, Large Cap, Growth & Income, and Balanced or
0.37% for High Yield, Strategic Income, Mortgage Securities,
Government Investment, Intermediate Bond, Short Fixed-Income,
Municipal Income, Intermediate Municipal Income, and
Short-Intermediate Municipal Income, and it drops as total assets
under management increase. For December 1997, the group fee rate
for the Equity Funds was 0.29%, and the group fee rate for the Bond
Funds, the Intermediate-Term Bond Funds, and the Short-Term Bond Funds
was 0.14%.
The performance adjustment rate is calculated monthly by comparing
Growth Opportunities' and Strategic Opportunities' performance to that
of the S&P 500 over the most recent 36-month period. The difference is
translated into a dollar amount that is added to or subtracted from
the basic fee. The maximum annualized performance adjustment rate
is (plus/minus) 0.20% of a fund's average net assets over the
performance period.
For purposes of calculating the performance adjustment for each of
Growth Opportunities and Strategic Opportunities, the fund's
investment performance will be based on the average performance of all
classes of the fund weighted according to their average assets for
each month in the performance period.
The individual fund fee rates for each of TechnoQuant Growth, Mid
Cap, Equity Growth, Growth Opportunities, Strategic Opportunities,
Large Cap, Mortgage Securities, Government Investment, Intermediate
Bond, and Short-Fixed Income is 0.30%. The individual fund fee rate
for Growth & Income is 0.20%. The individual fund fee rate for
Balanced is 0.15%. The individual fund fee rate for each of High Yield
and Strategic Income is 0.45%. The individual fund fee rate for each
of Municipal Income, Intermediate Municipal Incom e, and
Short-Intermediate Municipal Income is 0.25%.
The following table states the management fee, as a percentage of each
fund's average net assets, for each fund for its most recent fiscal
year end ed 1997.
TOTAL
MANAGEMENT FEE
MID CAP 0.60%
EQUITY GROWTH 0.60%
GROWTH OPPORTUNITIES 0.52%[A][B][C]
STRATEGIC OPPORTUNITIES 0.40%[A][B][C]
LARGE CAP 0.60%
EQUITY INCOME 0.50%
BALANCED 0.45%
HIGH YIELD 0.59%
STRATEGIC INCOME 0.59%
MORTGAGE SECURITIES 0.44%[B][D]
GOVERNMENT INVESTMENT 0.44%
INTERMEDIATE BOND 0.44%
SHORT FIXED-INCOME 0.44%
MUNICIPAL INCOME 0.39%
INTERMEDIATE MUNICIPAL 0.39%
INCOME
SHORT-INTERMEDIATE 0.39%
MUNICIPAL INCOME
[A] THE ANNUALIZED BASIC FEE, AS A PERCENTAGE OF EACH FUND'S
AVERAGE NET ASSETS, FOR THE FISCAL PERIOD ENDED NOVEMBER
30, 1997 WAS 0.60 % FOR GROWTH OPPORTUNITIES AND
0.60 % FOR STRATEGIC OPPORTUNITIES.
[B] ANNUALIZED
[C] FOR THE FISCAL PERIOD ENDED NOVEMBER 30, 1997.
[ D ] FOR THE FISCAL PERIOD ENDED OCTOBER 31, 1997.
The total management fee for Growth Opportunities for the fiscal
year ended October 31, 1997 was 0.49% of the fund's average net
assets. The basic fee for Growth Opportunities for the fiscal year
ended October 31, 1997 was 0.60% of the fund's average net assets. The
total management fee for Mortgage Securities for the fiscal year ended
July 31, 1997 was 0.44% of the fund's average net assets.
FMR HAS SUB-ADVISORY AGREEMENTS with four affiliates: FMR U.K., FMR
Far East, FIJ, and FIIA. FIIA in turn has a sub-advisory agreement
with FIIA(U.K.)L. These sub-advisers are compensated for providing FMR
with investment research and advice on issuers based outside the
United States. FMR pays FMR U.K. and FMR Far East fees equal to 110%
and 105%, respectively, of the costs of providing these services. FMR
pays FIJ and FIIA a fee equal to 30% of its management fee rate
associated with investments for which the sub-adviser provided
investment advice.
The sub-advisers may also provide investment management services. In
return, FMR pays FMR U.K., FMR Far East, FIJ, and FIIA a fee equal to
50% of its management fee rate with respect to a fund's investments
that the sub-adviser manages on a discretionary basis. FIIA pays
FIIA(U.K.)L a fee equal to 110% of the cost of providing these
services.
For the fiscal period ended 1997, FMR, on behalf of each fund
with sub-advisory agreements paid FMR U.K., FMR Far East, FIJ, and
FIIA fees equal to less than 0.01 %, of each fund's average net
assets (annualized for periods of less than one year) . The
numbers for Growth Opportunities and Strategic Opportunities are for
the fiscal period ended November 30, 1997 and the number for Mortgage
Securities is for the fiscal period ended October 31, 1997.
For the fiscal year ended October 31, 1997, FMR on behalf of Growth
Opportunities paid FMR U.K., and FMR Far East fees equal to less than
0.01% of the fund's average net assets.
Beginning January 1, 1999, FIMM will select certain investments for
Balanced and Strategic Income.
Beginning January 1, 1999, FIMM will have primary responsibility
for managing Mortgage Securities, Government Investment, Intermediate
Bond, Short Fixed-Income, Municipal Income, Intermediate Municipal
Income, and Short-Intermediate Municipal Income. FMR will pay FIMM 50%
of its management fee (before expense reimbursements) for FIMM's
services.
OTHER EXPENSES
While the management fee is a significant component of each fund's
annual operating costs, the funds have other expenses as well.
FIIOC performs transfer agency, dividend disbursing and shareholder
servicing functions for the Institutional Class of the Equity Funds,
High Yield, Strategic Income, Mortgage Securities, Government
Investment, Intermediate Bond, and Short Fixed-Income (the Taxable
Funds). Fidelity Service Company, Inc. (FSC) calculates the net asset
value per share (NAV) and dividends for the Institutional Class of the
Taxable Funds, and maintains the general accounting records and
administers the securities lending program for the Taxable Funds.
For the fiscal period ended 1997, transfer agency and pricing
and bookkeeping fees paid (as a percentage of average net
assets) amounted to the following. These amounts (annualized for
periods of less than one year) are before expense reductions, if
any.
TRANSFER AGENCY PRICING AND
FEES PAID BOOKKEEPING
FEES PAID
BY FUND
TECHNOQUANT GROWTH 0.30% 0.24%
MID CAP 0.15% 0.06%
EQUITY GROWTH 0.14% 0.02%
GROWTH OPPORTUNITIES [A] 0.15% 0.00%
STRATEGIC OPPORTUNITIES [A] 0.23% 0.05%
LARGE CAP 0.15% 0.10%
GROWTH & INCOME 0.15% 0.09%
EQUITY INCOME 0.14% 0.03%
BALANCED 0.14% 0.03%
HIGH YIELD 0.17% 0.03%
STRATEGIC INCOME 0.18% 0.04%
MORTGAGE SECURITIES [B] 0.24% 0.04%
GOVERNMENT INVESTMENT 0.18% 0.04%
INTERMEDIATE BOND 0.15% 0.04%
SHORT FIXED-INCOME 0.22% 0.04%
[A] FOR THE FISCAL PERIOD ENDED NOVEMBER 30, 1997.
[B] FOR THE FISCAL PERIOD ENDED OCTOBER 31, 1997.
The transfer agency fees paid by Institutional Class of Growth
Opportunities for the fiscal year ended October 31, 1997 were 0.15%.
The transfer agency fees paid by Institutional Class of Mortgage
Securities for the fiscal year ended July 31, 1997 were 0.21%.
The pricing and bookkeeping fees paid by Growth Opportunities for
the fiscal year ended October 31, 1997 were 0.00%. The pricing and
bookkeeping fees paid by Mortgage Securities for the fiscal year ended
July 31, 1997 were 0.04%.
UMB is the transfer and service agent for Municipal Income,
Intermediate Municipal Income, and Short-Intermediate Municipal Income
(the Municipal Funds). UMB has entered into a sub-agreement with
FIIOC. FIIOC performs transfer agency, dividend disbursing and
shareholder servicing functions for the Institutional Class of the
Municipal Funds. UMB has also entered into a sub-agreement with FSC.
FSC calculates the NAV and dividends for the Institutional Class of
the Municipal Funds, and maintains the general accounting records for
each fund. Under the terms of the sub-agreements, FIIOC and FSC
receive all related fees paid to UMB by the Institutional Class.
For the fiscal year ended 1997, transfer agency and pricing and
bookkeeping fees paid (as a percentage of average net assets) amounted
to the following. These amounts are before expense reductions, if any.
TRANSFER AGENCY PRICING AND
FEES PAID BOOKKEEPING
FEES PAID
BY FUND
MUNICIPAL INCOME 0.26% 0.04%
INTERMEDIATE MUNICIPAL 0.18% 0.09%
INCOME
SHORT-INTERMEDIATE 0.30% 0.26%
MUNICIPAL INCOME
Each fund also pays other expenses, such as legal, audit, and
custodian fees; in some instances, proxy solicitation costs; and the
compensation of trustees who are not affiliated with Fidelity. A
broker-dealer may use a portion of the commissions paid by a fund to
reduce that fund's custodian or transfer agent fees.
The Institutional Class of each fund has adopted a DISTRIBUTION AND
SERVICE PLAN. Each plan recognizes that FMR may use its management fee
revenues, as well as its past profits or its resources from any other
source, to pay FDC for expenses incurred in connection with the
distribution of Institutional Class shares. FMR, directly or through
FDC, may make payments to third parties, such as banks or
broker-dealers, that engage in the sale of, or provide shareholder
support services for, Institutional Class shares. Currently, the Board
of Trustees of each fund has authorized such payments.
The portfolio turnover rate (annualized for periods of less than
one year) for the fiscal period ended 1997 was 213 %
for TechnoQuant Growth, 208 % for Mid Cap, 108 % for
Equity Growth, 33 % for Growth Opportunities (for the fiscal
period ended November 30, 1997) , 61 % for Strategic
Opportunities (for the fiscal period ended November 30, 1997) ,
93 % for Large Cap, 82 % for Growth & Income, 55 %
for Equity Income, 70 % for Balanced, 105 % for High
Yield, 140 % for Strategic Income, 125 % for Mortgage
Securities (for the fiscal period ended October 31, 1997) ,
136 % for Government Investment, 138 % for
Intermediate Bond, 105 % for Short Fixed-Income, 36 % for
Municipal Income, 18 % for Intermediate Municipal Income, and
41 % for Short-Intermediate Municipal Income .
The portfolio turnover rate for Growth Opportunities for the fiscal
year ended October 31, 1997 was 35%. The portfolio turnover rate for
Mortgage Securities for the fiscal year ended July 31, 1997 was
149%.
Portfolio turnover rates vary from year to year. High turnover rates
increase transaction costs and may increase taxable capital gains. FMR
considers these effects when evaluating the anticipated benefits of
short-term investing.
YOUR ACCOUNT
TYPES OF ACCOUNTS
When you invest through an investment professional, your investment
professional, including a broker-dealer or financial institution, may
charge you a transaction fee with respect to the purchase and sale of
fund shares. Read your investment professional's program materials in
conjunction with this prospectus for additional service features or
fees that may apply. Certain features of the funds, such as minimum
initial or subsequent investment amounts, may be modified.
The different ways to set up (register) your account with Fidelity are
listed at right.
The account guidelines that follow may not apply to certain funds or
to certain retirement accounts. For instance, municipal funds are not
available for purchase in retirement accounts. If you are investing
through a retirement account or if your employer offers a fund through
a retirement program, you may be subject to additional fees. For more
information, please refer to your program materials, contact your
employer, or call your retirement benefits number or your investment
professional directly, as appropriate.
WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
Individual accounts are owned by one person. Joint accounts can have
two or more owners (tenants).
RETIREMENT (ONLY TAXABLE FUNDS ARE AVAILABLE FOR THE FOLLOWING
ACCOUNTS)
FOR TAX-ADVANTAGED RETIREMENT SAVINGS
Retirement plans provide individuals with tax-advantaged
ways to save for retirement, either with tax-deductible contributions
or tax-free growth. Retirement accounts require special applications
and typically have lower minimums.
(solid bullet) TRADITIONAL INDIVIDUAL RETIREMENT ACCOUNTS
(IRAS) allow individuals under age 70
1/2(checkmark)(solid club) with compensation to contribute u p
to $2,000 per tax year. Married couples can contribute up to $4,000
per tax year, provided no more than $2,000 is contributed on behalf of
either spouse. (These limits are aggregate for Traditional and Roth
IRAs.) Contributions may be tax deductible, subject to certain income
limits.
(solid bullet) ROTH IRAS allow individuals to make non-deductible
contributions of up to $2,000 per tax year. Married couples can
contribute up to $4,000 per tax year, provided no more than $2,000 is
contributed on behalf of either spouse. (These limits are aggregate
for Traditional and Roth IRAs.) Eligibility is subject to certain
income limits. Qualified distributions are tax-free.
(solid bullet) ROTH CONVERSION IRAS allow individuals with assets
held in a Traditional IRA or Rollover IRA to convert those assets to a
Roth Conversion IRA. Eligibility is subject to certain income limits.
Qualified distributions are tax-free.
(solid bullet) ROLLOVER IRAS help retain special tax advantages for
certain eligible rollover distributions from employer-sponsored
retirement plans.
(solid bullet) PROFIT SHARING OR MONEY PURCHASE PENSION PLANS
(KEOGHS) allow self-employed individuals or small business owners to
make tax-deductible contributions for themselves and any eligible
employees.
(solid bullet) SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS) provide
small business owners or those with self-employment income (and their
eligible employees) with many of the same advantages as a Keogh, but
with fewer administrative requirements.
(solid bullet) SALARY REDUCTION SEP-IRAS (SARSEPS) allow employees
of businesses with 25 or fewer employees to contribute a percentage of
their wages on a tax-deferred basis. These plans must have been
established by the employer prior to January 1, 1997.
(solid bullet) SIMPLE IRAS provide small business owners and those
with self-employment income (and their eligible employees) with many
of the advantages of a 401(k) plan, but with fewer administrative
requirements.
(solid bullet) 401(K) PLANS allow employees of organizations of all
sizes to contribute a percentage of their wages on a tax-deferred
basis. These accounts need to be established by the trustee of the
plan.
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
These custodial accounts provide a way to give money to a child and
obtain tax benefits. An individual can give up to $10,000 a year per
child without paying federal gift tax. Depending on state laws, you
can set up a custodial account under the Uniform Gifts to Minors Act
(UGMA) or the Uniform Transfers to Minors Act (UTMA). Contact your
investment professional.
TRUST
FOR MONEY BEING INVESTED BY A TRUST
The trust must be established before an account can be opened.
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR
OTHER GROUPS
Contact your investment professional.
HOW TO BUY SHARES
THE PRICE TO BUY ONE SHARE of Institutional Class is the class's net
asset value per share (NAV). Institutional Class's shares are sold
without a sales charge.
Your shares will be purchased at the next NAV calculated after your
order is received in proper form. Institutional Class's NAV is
normally calculated each business day at 4:00 p.m. Eastern time.
Shares of Sh ort-Intermediate Municipal Income are offered to
current shareholders only.
Each fund reserves the right to reject any specific purchase order,
including certain purchases by exchange. See "Exchange Restrictions"
on page . Purchase orders may be refused if, in FMR's opinion, they
would disrupt management of a fund.
It is the responsibility of your investment professional to transmit
your order to buy shares to Fidelity before the close of business on
the day you place your order.
Fidelity must receive payment within three business days after an
order for shares is placed; otherwise your purchase order may be
canceled and you could be held liable for resulting fees and/or
losses.
Share certificates are not available for Institutional Class shares.
IF YOU ARE NEW TO THE FIDELITY ADVISOR FUNDS, complete and sign an
account application and mail it along with your check. You may also
open your account by wire as described on page . If there is no
account application accompanying this prospectus, call 1-800-843-3001
or your investment professional.
If you are investing through a tax- advantag ed retirement plan,
such as an IRA, for the first time, you will need a special
application. Contact your investment professional for more information
and a retirement account application.
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY ADVISOR FUND, you
can:
(small solid bullet) Mail an account application with a check,
(small solid bullet) Place an order and wire money into your account,
(small solid bullet) Open your account by exchanging from the same
class of another Fidelity Advisor fund or from another Fidelity fund,
or
(small solid bullet) Contact your investment professional.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $2,500
For certain Fidelity Advisor retirement accounts(double
dagger) $500
Through regular investment plans* $1,000
TO ADD TO AN ACCOUNT $250
For certain Fidelity Advisor retirement accounts(double dagger)
$100
Through regular investment plans* $100
MINIMUM BALANCE $1,000
For certain Fidelity Advisor retirement accounts(double dagger)
None
(double dagger)THESE LOWER MINIMUMS APPLY TO FIDELITY TRADITIONAL
IRA, ROTH IRA, ROTH CONVERSION IRA, ROLLOVER IRA, SEP-IRA, AND KEOGH
ACCOUNTS.
*AN ACCOUNT MAY BE OPENED WITH A MINIMUM OF $1,000, PROVIDED THAT A
REGULAR INVESTMENT PLAN IS ESTABLISHED AT THE TIME THE ACCOUNT IS
OPENED. FOR MORE INFORMATION ABOUT REGULAR INVESTMENT PLANS, PLEASE
REFER TO "INVESTOR SERVICES," PAGE .
There is no minimum account balance or initial or subsequent
investment minimum for certain retirement accounts funded through
salary deduction, or accounts opened with the proceeds of
distributions from such Fidelity retirement accounts. Refer to the
program materials for details.
For further information on opening an account, please consult your
investment professional or refer to the account application.
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<CAPTION>
<S> <C> <C>
TO OPEN AN TO ADD TO AN
ACCOUNT ACCOUNT
PHONE (SMALL SOLID BULLET) EXCHANGE FROM THE (SMALL SOLID BULLET) EXCHANGE FROM THE
1-800-843-300 SAME CLASS OF ANOTHER SAME CLASS OF ANOTHER
1 OR YOUR FIDELITY ADVISOR FUND OR FIDELITY ADVISOR FUND OR
INVESTMENT FROM ANOTHER FIDELITY FROM ANOTHER FIDELITY
PROFESSIONAL FUND ACCOUNT WITH THE FUND ACCOUNT WITH THE
SAME REGISTRATION, SAME REGISTRATION,
INCLUDING NAME, INCLUDING NAME,
ADDRESS, AND TAXPAYER ADDRESS, AND TAXPAYER
ID NUMBER. ID NUMBER.
MAIL (MAIL_GRAPHIC) (SMALL SOLID BULLET) COMPLETE AND SIGN THE (SMALL SOLID BULLET) MAKE YOUR CHECK
ACCOUNT APPLICATION. PAYABLE TO THE
MAKE YOUR CHECK COMPLETE NAME OF THE
PAYABLE TO THE FUND OF YOUR CHOICE
COMPLETE NAME OF THE AND NOTE THE
FUND OF YOUR CHOICE APPLICABLE CLASS.
AND NOTE THE INDICATE YOUR FUND
APPLICABLE CLASS. MAIL ACCOUNT NUMBER ON
TO THE ADDRESS YOUR CHECK AND MAIL TO
INDICATED ON THE THE ADDRESS PRINTED ON
APPLICATION. YOUR ACCOUNT
STATEMENT.
(SMALL SOLID BULLET) EXCHANGE BY MAIL: CALL
1-800-843-3001 OR
YOUR INVESTMENT
PROFESSIONAL FOR
INSTRUCTIONS.
IN PERSON (HAND_GRAPHIC) (SMALL SOLID BULLET) BRING YOUR ACCOUNT (SMALL SOLID BULLET) BRING YOUR CHECK TO
APPLICATION AND CHECK YOUR INVESTMENT
TO YOUR INVESTMENT PROFESSIONAL.
PROFESSIONAL.
WIRE (WIRE_GRAPHIC) (SMALL SOLID BULLET) CALL 1-800-843-3001 (SMALL SOLID BULLET) NOT AVAILABLE FOR
TO SET UP YOUR ACCOUNT RETIREMENT ACCOUNTS.
AND TO ARRANGE A WIRE (SMALL SOLID BULLET) WIRE TO:
TRANSACTION. NOT BANKER'S TRUST CO.
AVAILABLE FOR ROUTING #
RETIREMENT ACCOUNTS. 021001033
(SMALL SOLID BULLET) WIRE TO: FIDELITY DART
BANKER'S TRUST CO. DEPOSITORY
ROUTING # ACCOUNT # 00159759
021001033 FBO: (ACCOUNT NAME)
FIDELITY DART (ACCOUNT NUMBER)
DEPOSITORY
ACCOUNT #00159759 SPECIFY THE COMPLETE
FBO: (ACCOUNT NAME) NAME OF THE FUND OF
(ACCOUNT NUMBER) YOUR CHOICE, NOTE THE
APPLICABLE CLASS AND
SPECIFY THE COMPLETE INCLUDE YOUR ACCOUNT
NAME OF THE FUND OF NUMBER AND YOUR
YOUR CHOICE, NOTE THE NAME.
APPLICABLE CLASS AND
INCLUDE YOUR NEW
ACCOUNT NUMBER AND
YOUR NAME.
AUTOMATICALLY
(AUTOMATIC_GRAPHIC) (SMALL SOLID BULLET) NOT AVAILABLE. (SMALL SOLID BULLET) USE FIDELITY ADVISOR
SYSTEMATIC INVESTMENT
PROGRAM. SIGN UP FOR
THIS SERVICE WHEN
OPENING YOUR ACCOUNT,
OR CALL YOUR INVESTMENT
PROFESSIONAL TO BEGIN
THE PROGRAM.
</TABLE>
HOW TO SELL SHARES
You can arrange to take money out of your fund account at any time by
selling (redeeming) some or all of your shares.
THE PRICE TO SELL ONE SHARE of Institutional Class is the class's NAV.
Your shares will be sold at the next NAV calculated after your order
is received in proper form. Institutional Class's NAV is normally
calculated each business day at 4:00 p.m. Eastern time.
It is the responsibility of your investment professional to transmit
your order to sell shares to Fidelity before the close of business on
the day you place your order.
TO SELL SHARES IN A NON-RETIREMENT ACCOUNT, you may use any of the
methods described on these two pages.
TO SELL SHARES IN A FIDELITY ADVISOR RETIREMENT ACCOUNT, your request
must be made in writing, except for exchanges to shares of the same
class of another Fidelity Advisor fund or shares of other Fidelity
funds, which can be requested by phone or in writing.
IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR SHARES, leave at least
$1,000 worth of shares in the account to keep it open (account minimum
balances do not apply to retirement and Fidelity Defined Trust
accounts).
TO SELL SHARES BY BANK WIRE, you will need to sign up for this service
in advance.
CERTAIN REQUESTS MUST INCLUDE A SIGNATURE GUARANTEE. It is designed to
protect you and Fidelity from fraud. Your request must be made in
writing and include a signature guarantee if any of the following
situations apply:
(small solid bullet) You wish to redeem more than $100,000 worth of
shares,
(small solid bullet) Your account registration has changed within the
last 30 days,
(small solid bullet) The check is being mailed to a different address
than the one on your account (record address),
(small solid bullet) The check is being made payable to someone other
than the account owner,
(small solid bullet) The redemption proceeds are being transferred to
a Fidelity Advisor account with a different registration,
(small solid bullet) You wish to set up the bank wire feature, or
(small solid bullet) You wish to have redemption proceeds wired to a
non-predesignated bank account.
You should be able to obtain a signature guarantee from a bank,
broker, dealer, credit union (if authorized under state law),
securities exchange or association, clearing agency, or savings
association. A notary public cannot provide a signature guarantee.
SELLING SHARES IN WRITING
Write a "letter of instruction" with:
(small solid bullet) Your name,
(small solid bullet) The fund's name,
(small solid bullet) The applicable class name,
(small solid bullet) Your fund account number,
(small solid bullet) The dollar amount or number of shares to be
redeemed, and
(small solid bullet) Any other applicable requirements listed in the
table on page .
Deliver your letter to your investment professional, or mail it to the
following address:
Fidelity Investments
P.O. Box 770002
Cincinnati, OH 45277-0081
Unless otherwise instructed, Fidelity will send a check to the record
address.
ACCOUNT TYPE SPECIAL REQUIREMENTS
<TABLE>
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<S> <C> <C>
PHONE ALL ACCOUNT TYPES EXCEPT (SMALL SOLID BULLET) MAXIMUM CHECK
1-800-843-300 RETIREMENT REQUEST: $100,000.
1 OR YOUR ALL ACCOUNT TYPES (SMALL SOLID BULLET) YOU MAY EXCHANGE TO
INVESTMENT THE SAME CLASS OF
PROFESSIONAL OTHER FIDELITY ADVISOR
FUNDS OR TO OTHER
FIDELITY FUNDS IF BOTH
ACCOUNTS ARE
REGISTERED WITH THE
SAME NAME(S),
ADDRESS, AND
TAXPAYER ID NUMBER.
MAIL OR IN PERSON (MAIL_GRAPHIC)(HAND_GRAPHIC) INDIVIDUAL, JOINT TENANT, (SMALL SOLID BULLET) THE LETTER OF
SOLE PROPRIETORSHIP, INSTRUCTION MUST BE
UGMA, UTMA SIGNED BY ALL PERSONS
REQUIRED TO SIGN FOR
RETIREMENT ACCOUNT TRANSACTIONS, EXACTLY
AS THEIR NAMES
APPEAR ON THE
ACCOUNT.
(SMALL SOLID BULLET) THE ACCOUNT OWNER
SHOULD COMPLETE A
RETIREMENT DISTRIBUTION
FORM. CALL
1-800-843-3001 OR
YOUR INVESTMENT
PROFESSIONAL TO REQUEST
ONE.
TRUST (SMALL SOLID BULLET) THE TRUSTEE MUST SIGN
THE LETTER INDICATING
CAPACITY AS TRUSTEE. IF
THE TRUSTEE'S NAME IS
NOT IN THE ACCOUNT
REGISTRATION, PROVIDE A
COPY OF THE TRUST
DOCUMENT CERTIFIED
WITHIN THE LAST 60
DAYS.
BUSINESS OR (SMALL SOLID BULLET) AT LEAST ONE PERSON
ORGANIZATION AUTHORIZED BY
CORPORATE RESOLUTION
TO ACT ON THE ACCOUNT
MUST SIGN THE LETTER.
EXECUTOR, (SMALL SOLID BULLET) CALL
ADMINISTRATOR, 1-800-843-3001 OR
CONSERVATOR/GUARDIAN YOUR INVESTMENT
PROFESSIONAL FOR
INSTRUCTIONS.
WIRE (WIRE_GRAPHIC) ALL ACCOUNT TYPES EXCEPT (SMALL SOLID BULLET) YOU MUST SIGN UP FOR
RETIREMENT THE WIRE FEATURE
BEFORE USING IT. TO
VERIFY THAT IT IS IN
PLACE, CALL
1-800-843-3001.
MINIMUM WIRE:
$500.
(SMALL SOLID BULLET) YOUR WIRE REDEMPTION
REQUEST MUST BE
RECEIVED IN PROPER
FORM BY THE TRANSFER
AGENT BEFORE 4:00
P.M. EASTERN TIME FOR
MONEY TO BE WIRED
ON THE NEXT BUSINESS
DAY.
</TABLE>
INVESTOR SERVICES
Fidelity Advisor funds provide a variety of services to help you
manage your account.
INFORMATION SERVICES
STATEMENTS AND REPORTS that Fidelity sends to you include the
following:
(small solid bullet) Confirmation statements after certain
transactions
(small solid bullet) Account statements (quarterly)
(small solid bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports and
prospectuses will be mailed, even if you have more than one account in
the fund. Call your investment professional if you need additional
copies of financial reports and prospectuses.
TRANSACTION SERVICES
EXCHANGE PRIVILEGE. You may sell your Institutional Class shares and
buy Institutional Class shares of other Fidelity Advisor funds or
shares of other Fidelity funds, by telephone or in writing.
Note that exchanges out of a fund are limited to four per calendar
year, and that they may have tax consequences for you. For details on
policies and restrictions governing exchanges, including circumstances
under which a shareholder's exchange privilege may be suspended or
revoked, see "Exchange Restrictions," page .
FIDELITY ADVISOR SYSTEMATIC WITHDRAWAL PROGRAM lets you set up
periodic redemptions from your account. Accounts with a value of
$10,000 or more in Institutional Class shares are eligible for this
program.
One easy way to pursue your financial goals is to invest money
regularly. Fidelity Advisor funds offer convenient services that let
you transfer money into your fund account, or between fund accounts,
automatically. While regular investment plans do not guarantee a
profit and will not protect you against loss in a declining market,
they can be an excellent way to invest for retirement, a home,
educational expenses, and other long-term financial goals. Certain
restrictions apply for retirement accounts. Call your investment
professional for more information.
REGULAR INVESTMENT PLANS
FIDELITY ADVISOR SYSTEMATIC INVESTMENT PROGRAM
TO MOVE MONEY FROM YOUR BANK ACCOUNT TO A FIDELITY ADVISOR FUND
<TABLE>
<CAPTION>
<S> <C> <C> <C>
MINIMUM MINIMUM FREQUENCY SETTING UP OR
INITIAL ADDITIONAL CHANGING
$1,000 $100 MONTHLY, BIMONTHLY, QUARTERLY, (SMALL SOLID BULLET) FOR A NEW ACCOUNT,
OR SEMI-ANNUALLY COMPLETE THE
APPROPRIATE SECTION ON
THE APPLICATION.
(SMALL SOLID BULLET) FOR EXISTING ACCOUNTS,
CALL YOUR INVESTMENT
PROFESSIONAL FOR AN
APPLICATION.
(SMALL SOLID BULLET) TO CHANGE THE AMOUNT
OR FREQUENCY OF YOUR
INVESTMENT, CONTACT
YOUR INVESTMENT
PROFESSIONAL DIRECTLY
OR, CALL
1-800-843-3001.
CALL AT LEAST 10
BUSINESS DAYS PRIOR TO
YOUR NEXT SCHEDULED
INVESTMENT DATE.
</TABLE>
SHAREHOLDER AND ACCOUNT POLICIES
DIVIDENDS, CAPITAL GAINS, AND TAXES
Each fund distributes substantially all of its net income and capital
gains to shareholders each year. Each fund pays capital gains, if any,
in December and may pay additional capital gains after the close of
its fiscal year. Normally, dividends for Growth & Income, Equity
Income, and Balanced are distributed in March, June, September and
December; dividends for TechnoQuant Growth, Mid Cap, Equity Growth,
Growth Opportunities, Strategic Opportunities, and Large Cap are
distributed in December and January; dividends for Strategic Income,
High Yield, Mortgage Securities, Government Investment, Intermediate
Bond, Short Fixed-Income, Municipal Income, Intermediate Municipal
Income, and Short-Intermediate Municipal Income are declared daily and
paid monthly.
DISTRIBUTION OPTIONS
When you open an account, specify on your account application how you
want to receive your distributions. The funds offer four options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions
will be automatically reinvested in additional shares of the same
class of the fund. If you do not indicate a choice on your
application, you will be assigned this option.
2. INCOME-EARNED OPTION. Your capital gain distributions will be
automatically reinvested in additional shares of the same class of the
fund, but you will be sent a check for each dividend distribution.
3. CASH OPTION. You will be sent a check for your dividend and capital
gain distributions.
4. DIRECTED DIVIDENDS(registered trademark) PROGRAM. Your dividend
distributions will be automatically invested in the same class of
shares of another identically registered Fidelity Advisor fund. You
will be sent a check for your capital gain distributions or your
capital gain distributions will be automatically reinvested in
additional shares of the same class of the fund.
If you select distribution option 2, 3, or 4 and the U.S. Postal
Service cannot deliver your checks, or if your checks remain uncashed
for six months, those checks will be reinvested in your account at the
current NAV and your election may be converted to the Reinvestment
Option. To change your distribution option, call your investment
professional directly or call 1-800-843-3001.
When each of the Equity Funds deducts a distribution from its NAV, the
reinvestment price is the applicable class's NAV at the close of
business that day. Dividends from the Bond Funds, the
Intermediate-Term Bond Funds, and the Short-Term Bond Funds will be
reinvested at the applicable class's NAV on the last day of the month.
Capital gain distributions from Bond Funds, the Intermediate-Term Bond
Funds, and the Short-Term Bond Funds will be reinvested at the NAV as
of the date the applicable fund deducts the distributions from its
NAV. The mailing of distribution checks will begin within seven days,
or longer for a December ex-dividend date.
TAXES
As with any investment, you should consider how an investment in the
funds could affect you. Below are some of the funds' tax implications.
If your account is not a tax-advantaged retirement account, be aware
of these tax implications.
TAXES ON DISTRIBUTIONS. Interest income that the Municipal Funds earn
is distributed to shareholders as income dividends. Interest that is
federally tax-free remains tax-free when it is distributed.
Distributions from each fund (except the Municipal Funds), however,
are subject to federal income tax. Each fund may also be subject to
state or local taxes. If you live outside the United States, your
distributions from these funds could also be taxed by the country in
which you reside.
For federal tax purposes, income and short-term capital gains from the
Taxable Funds are distributed as dividends and taxed as ordinary
income; capital gain distributions are taxed as long-term capital
gains.
However, for shareholders of the Municipal Funds, gain on the sale of
tax-free bonds results in taxable distributions. Short-term capital
gains and a portion of the gain on bonds purchased at a discount are
distributed as dividends and taxed as ordinary income; capital gain
distributions, if any, are taxed as long-term capital gains.
Mutual fund dividends from U.S. Government securities are generally
free from state and local income taxes. However, particular states may
limit this benefit, and some types of securities, such as repurchase
agreements and some agency-backed securities, may not qualify for the
benefit. Ginnie Mae securities and other mortgage-backed securities
are notable exceptions in most states. In addition, some states may
impose intangible property taxes. You should consult your own tax
adviser for details and up-to-date information on the tax laws in your
state.
Distributions are taxable when they are paid, whether you take them in
cash or reinvest them. However, distributions declared in December and
paid in January are taxable as if they were paid on December 31.
Every January, Fidelity will send you and the IRS a statement showing
the tax characterization of distributions paid to you in the previous
year.
The interest from some municipal securities is subject to the federal
alternative minimum tax. Each of the Municipal Funds may invest up to
100% of its assets in these securities. Individuals who are subject to
the tax must report this interest on their tax returns.
A portion of the dividends from each of the Municipal Funds may be
free from state or local taxes. Income from investments in your state
are often tax-free to you. Each year, Fidelity will send you a
breakdown of each of these funds' income from each state to help you
calculate your taxes.
During the fiscal year ended 1997, 100 % of the income
dividends from Municipal Income, Intermediate Municipal Income, and
Short-Intermediate Municipal Income was free from federal income tax.
During the fiscal year ended 1997, 18.90 % of Municipal
Income's, 8.72 % of Intermediate Municipal Income's, and
19.53 % of Short-Intermediate Municipal Income's dividends were
subject to the federal alternative minimum tax.
TAXES ON TRANSACTIONS. Your redemptions-including exchanges-are
subject to capital gains tax. A capital gain or loss is the difference
between the cost of your shares and the price you receive when you
sell them.
Whenever you sell shares of a fund, Fidelity will send you a
confirmation statement showing how many shares you sold and at what
price.
You will also receive a consolidated transaction statement at least
quarterly. However, it is up to you or your tax preparer to determine
whether this sale resulted in a capital gain and, if so, the amount of
tax to be paid. BE SURE TO KEEP YOUR REGULAR ACCOUNT STATEMENTS; the
information they contain will be essential in calculating the amount
of your capital gains.
"BUYING A DIVIDEND." If you buy shares when a class has realized but
not yet distributed income or capital gains, you will pay the full
price for the shares and then receive a portion of the price back in
the form of a taxable distribution.
CURRENCY CONSIDERATIONS. For funds that can invest in foreign
securities, if a fund's dividends exceed its taxable income in any
year, which is sometimes the result of currency-related losses, all or
a portion of the fund's dividends may be treated as a return of
capital to shareholders for tax purposes. To minimize the risk of a
return of capital, a fund may adjust its dividends to take currency
fluctuations into account, which may cause the dividends to vary. Any
return of capital will reduce the cost basis of your shares, which
will result in a higher reported capital gain or a lower reported
capital loss when you sell your shares. The statement you receive in
January will specify if any distributions included a return of
capital.
EFFECT OF FOREIGN TAXES. Foreign governments may impose taxes on a
fund and its investments, and these taxes generally will reduce a
fund's distributions. However, if you meet certain holding period
requirements with respect to your fund shares, an offsetting tax
credit may be available to you. If you do not meet such holding period
requirements, you may still be entitled to a deduction for certain
foreign taxes. In either case, your tax statement will show more
taxable income or capital gains than were actually distributed by the
fund, but will also show the amount of the available offsetting credit
or deduction.
There are tax requirements that all funds must follow in order to
avoid federal taxation. In its effort to adhere to these requirements,
a fund may have to limit its investment activity in some types of
instruments.
TRANSACTION DETAILS
THE FUNDS ARE OPEN FOR BUSINESS each day the New York Stock Exchange
(NYSE) is open. FSC normally calculates Institutional Class's NAV as
of the close of business of the NYSE, normally 4:00 p.m. Eastern time.
A CLASS'S NAV is the value of a single share. The NAV of each class
is computed by adding that class's pro rata share of the value of the
applicable fund's investments, cash, and other assets, subtracting
that class's pro rata share of the value of the applicable fund's
liabilities, subtracting the liabilities allocated to that class, and
dividing the result by the number of shares of that class that are
outstanding.
Each fund's assets are valued primarily on the basis of market
quotations or on the basis of information furnished by a pricing
service. Short-term securities with remaining maturities of sixty days
or less for which quotations and information furnished by a pricing
service are not readily available are valued on the basis of amortized
cost. This method minimizes the effect of changes in a security's
market value. Foreign securities are valued on the basis of quotations
from the primary market in which they are traded, and are translated
from the local currency into U.S. dollars using current exchange
rates. In addition, if quotations and information furnished by a
pricing service are not readily available, or if the values have been
materially affected by events occurring after the closing of a foreign
market, assets may be valued by another method that the Board of
Trustees believes accurately reflects fair value.
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 a fund to withhold 31% of your taxable distributions and
redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE OR ELECTRONICALLY.
Fidelity will not be responsible for any losses resulting from
unauthorized transactions if it follows reasonable security procedures
designed to verify the identity of the investor. Fidelity will request
personalized security codes or other information, and may also record
calls. For transactions conducted through the Internet, Fidelity
recommends the use of an Internet browser with 128-bit encryption. 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 Fidelity for instructions. Additional
documentation may be required from corporations, associations, and
certain fiduciaries.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during
periods of unusual market activity), consider placing your order by
mail.
EACH FUND RESERVES THE RIGHT to suspend the offering of shares for a
period of time.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your shares will be purchased
at the next NAV calculated after your order is received in proper
form. Note the following:
(small solid bullet) All of your purchases must be made in U.S.
dollars and checks must be drawn on U.S. banks.
(small solid bullet) Fidelity does not accept cash.
(small solid bullet) When making a purchase with more than one check,
each check must have a value of at least $50.
(small solid bullet) Each fund reserves the right to limit the number
of checks processed at one time.
(small solid bullet) If your check does not clear, your purchase will
be canceled and you could be liable for any losses or fees a fund or
Fidelity has incurred.
(small solid bullet) Automated Purchase Orders: For shares of the Bond
Funds, the Intermediate-Term Bond Funds, and Short-Term Bond Funds,
you begin to earn dividends as of the day your funds are received.
(small solid bullet) Other Purchases: For shares of the Bond Funds,
the Intermediate-Term Bond Funds, and Short-Term Bond Funds, you begin
to earn dividends as of the first business day following the day your
funds are received.
AUTOMATED PURCHASE ORDERS. Institutional Class shares can be purchased
or sold through investment professionals utilizing an automated order
placement and settlement system that guarantees payment for orders on
a specified date.
CONFIRMED PURCHASES. Certain financial institutions that meet FDC's
creditworthiness criteria may enter confirmed purchase orders on
behalf of customers by phone, with payment to follow no later than
close of business on the next business day. If payment is not received
by the next business day, the order will be canceled and the financial
institution will be liable for any losses.
TO AVOID THE COLLECTION PERIOD associated with check purchases,
consider buying shares by bank wire, U.S. Postal money order, U.S.
Treasury check, Federal Reserve check, or automatic investment plans.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at
the next NAV calculated after your order is received in proper form.
Note the following:
(small solid bullet) Normally, redemption proceeds will be mailed to
you on the next business day, but if making immediate payment could
adversely affect a fund, it may take up to seven days to pay you.
(small solid bullet) Shares of the Bonds Funds, the Intermediate-Term
Bond Funds, and the Short-Term Bond Funds will earn dividends through
the date of redemption; however, shares redeemed on a Friday or prior
to a holiday will continue to earn dividends until the next business
day.
(small solid bullet) Each fund may hold payment on redemptions until
it is reasonably satisfied that investments made by check have been
collected, which can take up to seven business days.
(small solid bullet) Redemptions may be suspended or payment dates
postponed when the NYSE is closed (other than weekends or holidays),
when trading on the NYSE is restricted, or as permitted by the SEC.
FIDELITY RESERVES THE RIGHT TO DEDUCT AN ANNUAL MAINTENANCE FEE of
$12.00 from accounts with a value of less than $2,500, subject to an
annual maximum charge of $60.00 per shareholder. Accounts opened after
September 30 will not be subject to the fee for that year. The fee,
which is payable to the transfer agent, is designed to offset in part
the relatively higher costs of servicing smaller accounts. The fee
will not be deducted from retirement accounts (except non-prototype
retirement accounts), accounts using a systematic investment program,
certain (Network Level I and III) accounts which are maintained
through National Securities Clearing Corporation (NSCC), or if total
assets in Fidelity mutual funds exceed $50,000. Eligibility for the
$50,000 waiver is determined by aggregating Fidelity mutual fund
accounts (excluding contractual plans) maintained (i) by FIIOC and
(ii) through NSCC; provided those accounts are registered under the
same primary social security number.
IF YOUR NON-RETIREMENT ACCOUNT BALANCE FALLS BELOW $1,000 you will be
given 30 days' notice to reestablish the minimum balance. If you do
not increase your balance, Fidelity reserves the right to close your
account and send the proceeds to you. Your shares will be redeemed at
the NAV on the day your account is closed.
FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
FDC will, at its expense, provide promotional incentives such as sales
contests and luxury trips to investment professionals who support the
sale of shares of the funds. In some instances, these incentives will
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.
EXCHANGE RESTRICTIONS
As a shareholder, you have the privilege of exchanging your
Institutional Class shares for Institutional Class shares of other
Fidelity Advisor funds or for shares of other Fidelity funds. However,
you should note the following:
(small solid bullet) The fund or class you are exchanging into must be
available for sale in your state.
(small solid bullet) You may only exchange between accounts that are
registered in the same name, address, and taxpayer identification
number.
(small solid bullet) Before exchanging into a fund or class, read its
prospectus.
(small solid bullet) If you exchange into a fund with a sales charge,
you pay the percentage difference between that fund's sales charge and
any sales charge you may have previously paid in connection with the
shares you are exchanging. For example, if you had already paid a
sales charge of 2% on your shares and you exchange them into a fund
with a 3% sales charge, you would pay an additional 1% sales charge.
(small solid bullet) Exchanges may have tax consequences for you.
(small solid bullet) Because excessive trading can hurt fund
performance and shareholders, each fund reserves the right to
temporarily or permanently terminate the exchange privilege of any
investor who makes more than four exchanges out of a fund per calendar
year. Accounts under common ownership or control, including accounts
with the same taxpayer identification number, will be counted together
for purposes of the four exchange limit.
(small solid bullet) The exchange limit may be modified for accounts
in certain institutional retirement plans to conform to plan exchange
limits and Department of Labor regulations. See your plan materials
for further information.
(small solid bullet) Each fund reserves the right to refuse exchange
purchases by any person or group if, in FMR's judgment, the fund would
be unable to invest the money effectively in accordance with its
investment objective and policies, or would otherwise potentially be
adversely affected.
(small solid bullet) Your exchanges may be restricted or refused if a
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 a
fund.
Although the funds will attempt to give you prior notice whenever they
are reasonably able to do so, they may impose these restrictions at
any time. The funds reserve the right to terminate or modify these
exchange privileges in the future.
OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may impose
administrative fees of up to 1.00% and trading fees of up to 1.50% of
the amount exchanged. Check each fund's prospectus for details.
No dealer, sales representative, or any other person has been
authorized to give any information or to make any representations,
other than those contained in this Prospectus and in the related SAI,
in connection with the offer contained in this Prospectus. If given or
made, such other information or representations must not be relied
upon as having been authorized by the funds or FDC. This Prospectus
and the related SAI do not constitute an offer by the funds or by FDC
to sell or to buy shares of the funds to any person to whom it is
unlawful to make such offer.
APPENDIX A
DESCRIPTION OF MOODY'S INVESTORS SERVICE RATINGS OF CORPORATE BONDS
Moody's ratings for obligations with an original remaining maturity in
excess of one year fall within nine categories. They range from Aaa
(highest quality) to C (lowest quality). Moody applies numerical
modifiers of 1, 2, or 3 to each generic rating classification from Aa
through B. The modifier 1 indicates that the security ranks in the
higher end of its generic rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates that the issue ranks
on the lower end of its generic rating category.
AAA - Bonds that are 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 edged." 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 that are rated Aa are judged to be of high quality by all
standards. Together with the 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 the Aaa securities.
A - Bonds that are 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 that are 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 that are 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 over the
future. Uncertainty of position characterizes bonds in this class.
B - Bonds that are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or
of maintenance of other terms of the contract over any long period of
time may be small.
CAA - Bonds that are rated Caa are of poor standing. Such issues may
be in default or there may be present elements of danger with respect
to principal or interest.
CA - Bonds that are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in default or have
other marked short-comings.
C - Bonds that are rated C are the lowest-rated class of bonds and
issues so rated can be regarded as having extremely poor prospects of
ever attaining any real investment standing.
DESCRIPTION OF STANDARD & POOR'S RATINGS OF CORPORATE BONDS
Debt issues may be designated by Standard & Poor's as either
investment grade ("AAA" through "BBB") or speculative grade ("BB"
through "D"). While speculative grade debt will likely have some
quality and protective characteristics, these are outweighed by large
uncertainties or major exposures to adverse conditions. Ratings from
AA to CCC may be modified by the addition of a plus sign (+) or minus
sign (-) to show relative standing within the major rating categories.
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 higher-rated 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 than debt
in higher rated categories.
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 BB rating category is also used
for debt subordinated to senior debt that is assigned an actual or
implied BBB- rating.
B - Debt rated B has a greater vulnerability to default but currently
has the capacity to meet interest payments and principal repayments.
Adverse business, financial, or economic conditions will likely impair
capacity or willingness to pay interest and repay principal. The B
rating category is also used for debt subordinated to senior debt that
is assigned an actual or implied BB or BB- rating.
CCC - Debt rated CCC has a currently identifiable vulnerability to
default, and is dependent upon favorable business, financial, and
economic conditions to meet timely payment of interest and repayment
of principal. In the event of adverse business, financial, or economic
conditions, it is not likely to have the capacity to pay interest and
repay principal. The CCC rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied B or
B- rating.
CC - Debt rated CC is typically applied to debt subordinated to senior
debt which is assigned an actual or implied CCC debt rating.
C - The rating C is typically applied to debt subordinated to senior
debt which is assigned an actual or implied CCC- debt rating. The C
rating may be used to cover a situation where a bankruptcy petition
has been filed but debt service payments are continued.
CI - The rating CI is reserved for income bonds on which no interest
is being paid.
D - Debt rated D is in payment default. The D rating category is used
when interest payments or principal payments are not made on the date
due even if the applicable grace period has not expired, unless S&P
believes that such payments will be made during such grace period. The
D rating will also be used upon the filing of a bankruptcy petition if
debt service payments are jeopardized.
APPENDIX B
TECHNOQUANT GROWTH - INSTITUTIONAL CLASS
CALENDAR YEAR TOTAL 1997
RETURNS+
TECHNOQUA 12.33%
NT GROWTH
-
INSTITUTIONAL
CLASS
LIPPER 20.36%
CAPITAL
APPRECIATIO
N FUNDS
AVERAGEA
S&P 500 33.36%
CONSUMER 1.70%
PRICE INDEX
MID CAP - INSTITUTIONAL CLASS
CALENDAR YEAR TOTAL 1997
RETURNS+
MID CAP - 28.05%
INSTITUTIONAL
CLASS
LIPPER MID 19.63%
CAP FUNDS
AVERAGEB
S&P 400 32.25%
CONSUMER 1.70%
PRICE INDEX
EQUITY GROWTH - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CALENDAR 1988 1989 1990 1991 1992
YEAR TOTAL
RETURNS+
EQUITY 15.57% 44.84% 6.93% 64.71% 10.14%
GROWT
H -
INSTITUTI
ONAL
CLASS
LIPPER 14.79% 26.91% -4.49% 36.70% 8.08%
GROWT
H
FUNDS
AVERAG
EC
S&P 16.61% 31.69% -3.10% 30.47% 7.62%
500
CONSU 4.42% 4.65% 6.11% 3.06% 2.90%
MER
PRICE
INDEX
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CALENDAR 1993 1994 1995 1996 1997
YEAR TOTAL
RETURNS+
EQUITY 15.71% -0.04% 40.12% 16.89% 24.61%
GROWT
H -
INSTITUTI
ONAL
CLASS
LIPPER 10.63% -2.17% 30.79% 19.24% 25.30%
GROWT
H
FUNDS
AVERAG
EC
S&P 10.08% 1.32% 37.58% 22.96% 33.36%
500
CONSU 2.75% 2.67% 2.54% 3.32% 1.70%
MER
PRICE
INDEX
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: -0.5700000000000001
ROW: 2, COL: 1, VALUE: 15.57
ROW: 3, COL: 1, VALUE: 44.84
ROW: 4, COL: 1, VALUE: 6.930000000000001
ROW: 5, COL: 1, VALUE: 64.71000000000001
ROW: 6, COL: 1, VALUE: 10.14
ROW: 7, COL: 1, VALUE: 15.71
ROW: 8, COL: 1, VALUE: -0.04000000000000001
ROW: 9, COL: 1, VALUE: 40.12000000000001
ROW: 10, COL: 1, VALUE: 16.89
ROW: 11, COL: 1, VALUE: 24.61
(LARGE SOLID BOX) EQUITY GROWTH - INSTITUTIONAL
CLASS
GROWTH OPPORTUNITIES - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CALENDAR 1988 1989 1990 1991 1992
YEAR TOTAL
RETURNS+
GROWT 33.28% 24.14% -1.65% 42.68% 15.03%
H
OPPOR
TUNITIES
-
INSTITUTI
ONAL CL
ASS
LIPPER 14.79% 26.91% -4.49% 36.70% 8.08%
GROWT
H
FUNDS
AVERAG
EC
S&P 16.61% 31.69% -3.10% 30.47% 7.62%
500
CONSU 4.42% 4.65% 6.11% 3.06% 2.90%
MER
PRICE
INDEX
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CALENDAR 1993 1994 1995 1996 1997
YEAR TOTAL
RETURNS+
GROWT 22.17% 2.86% 33.58% 18.30% 29.20%
H
OPPOR
TUNITIES
-
INSTITUTI
ONAL CL
ASS
LIPPER 10.63% -2.17% 30.79% 19.24% 25.30%
GROWT
H
FUNDS
AVERAG
EC
S&P 10.08% 1.32% 37.58% 22.96% 33.36%
500
CONSU 2.75% 2.67% 2.54% 3.32% 1.70%
MER
PRICE
INDEX
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 0.0
ROW: 2, COL: 1, VALUE: 33.28
ROW: 3, COL: 1, VALUE: 24.14
ROW: 4, COL: 1, VALUE: -1.65
ROW: 5, COL: 1, VALUE: 42.68
ROW: 6, COL: 1, VALUE: 15.03
ROW: 7, COL: 1, VALUE: 22.17
ROW: 8, COL: 1, VALUE: 2.86
ROW: 9, COL: 1, VALUE: 33.58
ROW: 10, COL: 1, VALUE: 18.3
ROW: 11, COL: 1, VALUE: 29.2
(LARGE SOLID BOX) GROWTH OPPORTUNITIES -
INSTITUTIONAL CLASS
STRATEGIC OPPORTUNITIES - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CALENDAR 1988 1989 1990 1991 1992
YEAR TOTAL
RETURNS+
STRATEG 22.71% 32.98% -6.59% 23.69% 13.47%
IC
OPPOR
TUNITIES
-
INSTITUTI
ONAL CL
ASS
LIPPER 14.09% 26.60% -8.24% 39.91% 8.78%
CAPITAL
APPRE
CIATION
FUNDSA
S&P 16.61% 31.69% -3.10% 30.47% 7.62%
500
CONSU 4.42% 4.65% 6.11% 3.06% 2.90%
MER
PRICE
INDEX
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CALENDAR 1993 1994 1995 1996 1997
YEAR TOTAL
RETURNS+
STRATEG 21.07% -6.35% 38.78% 1.99% 26.11%
IC
OPPOR
TUNITIES
-
INSTITUTI
ONAL CL
ASS
LIPPER 15.68% -3.38% 30.34% 16.31% 20.36%
CAPITAL
APPRE
CIATION
FUNDSA
S&P 10.08% 1.32% 37.58% 22.96% 33.36%
500
CONSU 2.75% 2.67% 2.54% 3.32% 1.70%
MER
PRICE
INDEX
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: -6.33
ROW: 2, COL: 1, VALUE: 22.25
ROW: 3, COL: 1, VALUE: 32.6
ROW: 4, COL: 1, VALUE: -7.17
ROW: 5, COL: 1, VALUE: 23.08
ROW: 6, COL: 1, VALUE: 12.87
ROW: 7, COL: 1, VALUE: 20.44
ROW: 8, COL: 1, VALUE: -7.17
ROW: 9, COL: 1, VALUE: 38.78
ROW: 10, COL: 1, VALUE: 1.99
ROW: 11, COL: 1, VALUE: 26.11
(LARGE SOLID BOX) STRATEGIC OPPORTUNITIES -
INSTITUTIONAL CLASS
LARGE CAP - INSTITUTIONAL CLASS
CALENDAR YEAR TOTAL 1997
RETURNS+
LARGE CAP 24.34%
-
INSTITUTIONAL
CLASS
LIPPER 25.30%
GROWTH
FUNDS
AVERAGEC
S&P 500 33.36%
CONSUMER 1.70%
PRICE INDEX
GROWTH & INCOME - INSTITUTIONAL CLASS
CALENDAR YEAR TOTAL 1997
RETURNS+
GROWTH & 28.23%
INCOME -
INSTITUTIONAL
CLASS
LIPPER 27.14%
GROWTH AND
INCOME
FUNDS
AVERAGED
S&P 500 33.36%
CONSUMER 1.70%
PRICE INDEX
EQUITY INCOME - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CALENDAR 1988 1989 1990 1991 1992
YEAR TOTAL
RETURNS+
EQUITY 23.23% 18.43% -14.28% 29.81% 14.94%
INCOME
-
INSTITUTI
ONAL
CLASS
LIPPER 16.74% 22.18% -6.78% 26.86% 9.77%
EQUITY
INCOME
FUNDS
AVERAG
EE
S&P 16.61% 31.69% -3.10% 30.47% 7.62%
500
CONSU 4.42% 4.65% 6.11% 3.06% 2.90%
MER
PRICE
INDEX
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CALENDAR 1993 1994 1995 1996 1997
YEAR TOTAL
RETURNS+
EQUITY 18.80% 7.50% 33.49% 15.26% 26.64%
INCOME
-
INSTITUTI
ONAL
CLASS
LIPPER 13.66% -2.54% 30.17% 18.85% 27.51%
EQUITY
INCOME
FUNDS
AVERAG
EE
S&P 10.08% 1.32% 37.58% 22.96% 33.36%
500
CONSU 2.75% 2.67% 2.54% 3.32% 1.70%
MER
PRICE
INDEX
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: -2.24
ROW: 2, COL: 1, VALUE: 23.23
ROW: 3, COL: 1, VALUE: 18.43
ROW: 4, COL: 1, VALUE: -14.28
ROW: 5, COL: 1, VALUE: 29.81
ROW: 6, COL: 1, VALUE: 14.94
ROW: 7, COL: 1, VALUE: 18.8
ROW: 8, COL: 1, VALUE: 7.5
ROW: 9, COL: 1, VALUE: 33.49
ROW: 10, COL: 1, VALUE: 15.26
ROW: 11, COL: 1, VALUE: 26.64
(LARGE SOLID BOX) EQUITY INCOME -
INSTITUTIONAL CLASS
BALANCED - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CALENDAR 1988 1989 1990 1991 1992
YEAR TOTAL
RETURNS+
BALANC 20.89% 24.60% -2.94% 34.48% 9.20%
ED -
INSTITUTI
ONAL
CLASS
LIPPER 12.34% 19.57% -0.57% 26.69% 7.07%
BALANC
ED
FUNDS
AVERAG
EF
S&P 16.61% 31.69% -3.10% 30.47% 7.62%
500
CONSU 4.42% 4.65% 6.11% 3.06% 2.90%
MER
PRICE
INDEX
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CALENDAR 1993 1994 1995 1996 1997
YEAR TOTAL
RETURNS+
BALANC 19.66% -5.09% 15.00% 8.68% 22.92%
ED -
INSTITUTI
ONAL
CLASS
LIPPER 10.91% -2.50% 25.16% 13.76% 19.00%
BALANC
ED
FUNDS
AVERAG
EF
S&P 10.08% 1.32% 37.58% 22.96% 33.36%
500
CONSU 2.75% 2.67% 2.54% 3.32% 1.70%
MER
PRICE
INDEX
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: 20.89
ROW: 3, COL: 1, VALUE: 24.6
ROW: 4, COL: 1, VALUE: -2.94
ROW: 5, COL: 1, VALUE: 34.58
ROW: 6, COL: 1, VALUE: 9.199999999999999
ROW: 7, COL: 1, VALUE: 19.66
ROW: 8, COL: 1, VALUE: -5.09
ROW: 9, COL: 1, VALUE: 15.0
ROW: 10, COL: 1, VALUE: 8.68
ROW: 11, COL: 1, VALUE: 22.92
(LARGE SOLID BOX) BALANCED - INSTITUTIONAL CLASS
HIGH YIELD - INSTITUTIONAL CLASS
CALENDAR 1988 1989 1990 1991 1992
YEAR TOTAL
RETURNS+
HIGH 17.24% 3.64% 7.30% 34.94% 23.09%
YIELD -
INSTITUTI
ONAL
CLASS
LIPPER 12.89% -0.58% -10.13% 36.91% 17.51%
HIGH
CURRENT
YIELD
FUNDS
AVERAG
E G
MERRILL 13.47% 4.23% -4.35% 34.58% 18.16%
LYNCH
HIGH
YIELD
MASTER
INDEX
CONSU 4.42% 4.65% 6.11% 3.06% 2.90%
MER
PRICE
INDEX
CALENDAR 1993 1994 1995 1996 1997
YEAR TOTAL
RETURNS+
HIGH 20.45% -1.49% 18.69% 13.24% 15.30%
YIELD -
INSTITUTI
ONAL
CLASS
LIPPER 18.95% -3.85% 16.43% 13.67% 12.96%
HIGH
CURRENT
YIELD
FUNDS
AVERAG
E G
MERRILL 17.18% -1.17% 19.91% 11.06% 12.82%
LYNCH
HIGH
YIELD
MASTER
INDEX
CONSU 2.75% 2.67% 2.54% 3.32% 1.70%
MER
PRICE
INDEX
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: 17.24
ROW: 3, COL: 1, VALUE: 3.64
ROW: 4, COL: 1, VALUE: 7.3
ROW: 5, COL: 1, VALUE: 34.94
ROW: 6, COL: 1, VALUE: 23.09
ROW: 7, COL: 1, VALUE: 20.45
ROW: 8, COL: 1, VALUE: -1.49
ROW: 9, COL: 1, VALUE: 18.69
ROW: 10, COL: 1, VALUE: 13.24
ROW: 11, COL: 1, VALUE: 15.3
(LARGE SOLID BOX) HIGH YIELD - INSTITUTIONAL CLASS
STRATEGIC INCOME - INSTITUTIONAL CLASS
CALENDAR 1995 1996 1997
YEAR TOTAL
RETURNS+
STRATEG 22. 38 % 13.04% 9.36%
IC
INCOME
- -
INSTITUTI
ONAL
CLASS
LIPPER 16.92% 11.74% 8.77%
MULTI-S
ECTOR
INCOME
FUNDS
AVERAG
E H
MERRILL 19.91% 11.06% 12.82%
LYNCH
HIGH
YIELD
MASTER
INDEX
CONSU 2.54% 3.32% 1.70%
MER
PRICE
INDEX
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: NIL
ROW: 3, COL: 1, VALUE: NIL
ROW: 4, COL: 1, VALUE: NIL
ROW: 5, COL: 1, VALUE: NIL
ROW: 6, COL: 1, VALUE: NIL
ROW: 7, COL: 1, VALUE: NIL
ROW: 8, COL: 1, VALUE: NIL
ROW: 9, COL: 1, VALUE: 22.38
ROW: 10, COL: 1, VALUE: 13.04
ROW: 11, COL: 1, VALUE: 9.360000000000001
(LARGE SOLID BOX) STRATEGIC INCOME -
INSTITUTIONAL CLASS
MORTGAGE SECURITIES - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CALENDAR 1988 1989 1990 1991 1992
YEAR TOTAL
RETURNS+
MORTG 6.72% 13.64% 10.36% 13.61% 5.45%
AGE
SECURIT
IES -
INSTITUTI
ONAL
CLASS
LIPPER 7.47% 12.71% 9.52% 15.00% 6.38%
U.S.
MORTG
AGE
FUNDS
AVERAG
E I
LEHMA 8.72 % 15.35 % 10.72 % 15.72 % 6.97 %
N
BROTHER
S
MORTG
AGE-BA
CKED
SECURITI
ES
INDEX
CONSU 4.42% 4.65% 6.11% 3.06% 2.90%
MER
PRICE
INDEX
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CALENDAR 1993 1994 1995 1996 1997
YEAR TOTAL
RETURNS+
MORTG 6.71% 1.94% 17.02% 5.43% 9.01%
AGE
SECURIT
IES -
INSTITUTI
ONAL
CLASS
LIPPER 7.58% -4.83% 16.29% 3 .87 % 8.58%
U.S.
MORTG
AGE
FUNDS
AVERAG
E I
LEHMA 6.84 % -1.61 % 16.80% 5.35 % 9.49%
N
BROTHER
S
MORTG
AGE-BA
CKED
SECURITI
ES
INDEX
CONSU 2.75% 2.67% 2.54% 3.32% 1.70%
MER
PRICE
INDEX
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 2.7
ROW: 2, COL: 1, VALUE: 6.72
ROW: 3, COL: 1, VALUE: 13.64
ROW: 4, COL: 1, VALUE: 10.36
ROW: 5, COL: 1, VALUE: 13.61
ROW: 6, COL: 1, VALUE: 5.45
ROW: 7, COL: 1, VALUE: 6.71
ROW: 8, COL: 1, VALUE: 1.94
ROW: 9, COL: 1, VALUE: 17.02
ROW: 10, COL: 1, VALUE: 5.930000000000001
ROW: 11, COL: 1, VALUE: 9.01
(LARGE SOLID BOX) MORTGAGE SECURITIES -
INSTITUTIONAL CLASS
GOVERNMENT INVESTMENT - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CALENDAR 1988 1989 1990 1991 1992
YEAR TOTAL
RETURNS+
GOVER 6.57% 11.75% 8.37% 13.45% 6.48%
NMENT
INVEST
MENT -
INSTITUTI
ONAL CL
ASS
LIPPER 6.67% 12.46% 8.22% 14.44% 6.41%
GENER
AL U.S.
GOVER
NMENT
FUNDS
AVERAG
E J
LEHMA 7.03 % 14.22 % 8.72 % 15.32 % 7.23 %
N
BROTHER
S
GOVERN
MENT
BOND
INDEX
CONSU 4.42% 4.65% 6.11% 3.06% 2.90%
MER
PRICE
INDEX
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CALENDAR 1993 1994 1995 1996 1997
YEAR TOTAL
RETURNS+
GOVER 9.36% -3.85% 17.7 2 % 2.33% 8.99 %
NMENT
INVEST
MENT -
INSTITUTI
ONAL CL
ASS
LIPPER 9.42% -4.64% 17.34% 1.72% 8.84 %
GENER
AL U.S.
GOVER
NMENT
FUNDS
AVERAG
E J
LEHMA 10.66 % -3.37 % 18.34 % 2.77 % 9.59 %
N
BROTHER
S
GOVERN
MENT
BOND
INDEX
CONSU 2.75% 2.67% 2.54% 3.32% 1.70 %
MER
PRICE
INDEX
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: 6.57
ROW: 3, COL: 1, VALUE: 11.75
ROW: 4, COL: 1, VALUE: 8.370000000000001
ROW: 5, COL: 1, VALUE: 13.45
ROW: 6, COL: 1, VALUE: 6.48
ROW: 7, COL: 1, VALUE: 9.360000000000001
ROW: 8, COL: 1, VALUE: -3.85
ROW: 9, COL: 1, VALUE: 17.72
ROW: 10, COL: 1, VALUE: 2.33
ROW: 11, COL: 1, VALUE: 8.99
(LARGE SOLID BOX) GOVERNMENT INVESTMENT -
INSTITUTIONAL CLASS
INTERMEDIATE BOND - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CALENDAR 1988 1989 1990 1991 1992
YEAR TOTAL
RETURNS+
INTERM 7.84% 12.11% 7.91% 15.16% 7.32%
EDIATE
BOND -
INSTITUTI
ONAL
CLASS
LIPPER 6.16 % 9.94 % 8.11 % 14.01 % 6.24 %
SHORT- I
NTERME
DIATE
INVESTM
ENT
GRADE
DEBT
FUNDS
AVERAG
E K
LEHMA 6.67% 12.77% 9.16% 14.62% 7.17%
N
BROTHER
S
INTERM
EDIATE
GOVER
NMENT
/CORP
ORATE
BOND
INDEX
CONSU 4.42% 4.65% 6.11% 3.06% 2.90%
MER
PRICE
INDEX
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CALENDAR 1993 1994 1995 1996 1997
YEAR TOTAL
RETURNS+
INTERM 12.08% -2.06% 12.50% 3.70% 7.23 %
EDIATE
BOND -
INSTITUTI
ONAL
CLASS
LIPPER 7.51 % -2.08 % 12.88 % 4.17 % 6.62 %
SHORT- I
NTERME
DIATE
INVESTM
ENT
GRADE
DEBT
FUNDS
AVERAG
E K
LEHMA 8.79% -1.93% 15.33% 4.05% 7.87 %
N
BROTHER
S
INTERM
EDIATE
GOVER
NMENT
/CORP
ORATE
BOND
INDEX
CONSU 2.75% 2.67% 2.54% 3.32% 1.70 %
MER
PRICE
INDEX
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 2.32
ROW: 2, COL: 1, VALUE: 7.84
ROW: 3, COL: 1, VALUE: 12.11
ROW: 4, COL: 1, VALUE: 7.91
ROW: 5, COL: 1, VALUE: 15.16
ROW: 6, COL: 1, VALUE: 7.319999999999999
ROW: 7, COL: 1, VALUE: 12.08
ROW: 8, COL: 1, VALUE: -2.06
ROW: 9, COL: 1, VALUE: 12.5
ROW: 10, COL: 1, VALUE: 3.7
ROW: 11, COL: 1, VALUE: 7.23
(LARGE SOLID BOX) INTERMEDIATE BOND -
INSTITUTIONAL CLASS
SHORT FIXED-INCOME - INSTITUTIONAL CLASS
CALENDAR 1988 1989 1990 1991 1992
YEAR TOTAL
RETURNS+
SHORT 6.19% 10.31% 5.87% 13.37% 7.61%
FIXED-I
NCOME
- -
INSTITUTI
ONAL
CLASS
LIPPER 6.86% 10.22% 7.87% 12.88% 5.97%
SHORT
INVESTM
ENT
GRADE
BOND
FUNDS
AVERAG
E L
LEHMA 6.34% 10.97% 9.69% 11.83% 6.35%
N
BROTHER
S 1-3
YEAR
GOVER
NMENT
/CORP
ORATE
BOND
INDEX
CONSU 4.42% 4.65% 6.11% 3.06% 2.90%
MER
PRICE
INDEX
CALENDAR 1993 1994 1995 1996 1997
YEAR TOTAL
RETURNS+
SHORT 9.49% -3.37% 9.90% 4.69% 6.33 %
FIXED-I
NCOME
- -
INSTITUTI
ONAL
CLASS
LIPPER 6.45% -0.44% 10.84% 4.64% 6.19 %
SHORT
INVESTM
ENT
GRADE
BOND
FUNDS
AVERAG
E L
LEHMA 5.55% 0.55% 10.96% 5.14% 6.66 %
N
BROTHER
S 1-3
YEAR
GOVER
NMENT
/CORP
ORATE
BOND
INDEX
CONSU 2.75% 2.67% 2.54% 3.32% 1.70 %
MER
PRICE
INDEX
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: 6.19
ROW: 3, COL: 1, VALUE: 10.31
ROW: 4, COL: 1, VALUE: 5.87
ROW: 5, COL: 1, VALUE: 13.37
ROW: 6, COL: 1, VALUE: 7.609999999999999
ROW: 7, COL: 1, VALUE: 9.49
ROW: 8, COL: 1, VALUE: -3.37
ROW: 9, COL: 1, VALUE: 9.9
ROW: 10, COL: 1, VALUE: 4.69
ROW: 11, COL: 1, VALUE: 6.33
(LARGE SOLID BOX) SHORT FIXED-INCOME -
INSTITUTIONAL CLASS
MUNICIPAL INCOME - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CALENDAR 1988 1989 1990 1991 1992
YEAR TOTAL
RETURNS+
MUNICI 11.80% 13.09% 10.29% 12.18% 11.11%
PAL
INCOME
- -
INSTITUTI
ONAL CL
ASS
LIPPER 11.53 % 9.65 % 6.05 % 12.09 % 8.79 %
GENER
AL
MUNICI
PAL
DEBT
FUNDS
AVERAG
E M
LEHMA 10.16% 10.79% 7.29% 12.14% 8.81%
N
BROTHER
S
MUNICI
PAL
BOND
INDEX
CONSU 4.42% 4.65% 6.11% 3.06% 2.90%
MER
PRICE
INDEX
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CALENDAR 1993 1994 1995 1996 1997
YEAR TOTAL
RETURNS+
MUNICI 13.79% -8.05% 16.84% 3.09% 10.22 %
PAL
INCOME
- -
INSTITUTI
ONAL CL
ASS
LIPPER 12.47 % - 6.50 % 16.84 % 3.30 % 9.11 %
GENER
AL
MUNICI
PAL
DEBT
FUNDS
AVERAG
E M
LEHMA 12.29% -5.17% 17.45% 4.43% 9.19%
N
BROTHER
S
MUNICI
PAL
BOND
INDEX
CONSU 2.75% 2.67% 2.54% 3.32% 1.70 %
MER
PRICE
INDEX
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: 11.8
ROW: 3, COL: 1, VALUE: 13.09
ROW: 4, COL: 1, VALUE: 10.29
ROW: 5, COL: 1, VALUE: 12.18
ROW: 6, COL: 1, VALUE: 11.11
ROW: 7, COL: 1, VALUE: 13.79
ROW: 8, COL: 1, VALUE: -8.050000000000001
ROW: 9, COL: 1, VALUE: 16.84
ROW: 10, COL: 1, VALUE: 3.09
ROW: 11, COL: 1, VALUE: 10.22
(LARGE SOLID BOX) MUNICIPAL INCOME -
INSTITUTIONAL CLASS
INTERMEDIATE MUNICIPAL INCOME - INSTITUTIONAL CLASS
CALENDAR 1988 1989 1990 1991 1992
YEAR TOTAL
RETURNS+
INTERM 7.38% 7.79% 6.37% 9.64% 7.28%
EDIATE
MUNICI
PAL
INCOME
- -
INSTITUTI
ONAL
CLASS
LIPPER 7.57% 8.26% 6.59% 10.52% 7.80%
INTERM
EDIATE
MUNICI
PAL
DEBT
FUNDS
AVERAG
E N
CONSU 4.42% 4.65% 6.11% 3.06% 2.90%
MER
PRICE
INDEX
CALENDAR 1993 1994 1995 1996 1997
YEAR TOTAL
RETURNS+
INTERM 9.94% -5.43% 14.37% 4.15% 8.07 %
EDIATE
MUNICI
PAL
INCOME
- -
INSTITUTI
ONAL
CLASS
LIPPER 10.18% -3.51% 12.89% 3.70% 7.16 %
INTERM
EDIATE
MUNICI
PAL
DEBT
FUNDS
AVERAG
E N
CONSU 2.75% 2.67% 2.54% 3.32% 1.70 %
MER
PRICE
INDEX
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 2.33
ROW: 2, COL: 1, VALUE: 7.38
ROW: 3, COL: 1, VALUE: 7.79
ROW: 4, COL: 1, VALUE: 6.37
ROW: 5, COL: 1, VALUE: 9.639999999999999
ROW: 6, COL: 1, VALUE: 7.28
ROW: 7, COL: 1, VALUE: 9.94
ROW: 8, COL: 1, VALUE: -5.430000000000001
ROW: 9, COL: 1, VALUE: 14.37
ROW: 10, COL: 1, VALUE: 4.15
ROW: 11, COL: 1, VALUE: 8.07
(LARGE SOLID BOX) INTERMEDIATE MUNICIPAL
INCOME - INSTITUTIONAL CLASS
SHORT-INTERMEDIATE MUNICIPAL INCOME - INSTITUTIONAL CLASS
CALENDAR 1995 1996 1997
YEAR TOTAL
RETURNS+
SHORT-I 8.76% 3.67% 5.18%
NTERME
DIATE
MUNICI
PAL
INCOME
-
INSTITUTI
ONAL
CLASS
LIPPER 7.43% 3.53% 5.20%
SHORT-I
NTERME
DIATE
MUNICI
PAL
DEBT
FUNDS
AVERAG
EO
CONSU 2.54% 3.32% 1.70%
MER
PRICE
INDEX
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: 0.0
ROW: 2, COL: 1, VALUE: 0.0
ROW: 3, COL: 1, VALUE: 0.0
ROW: 4, COL: 1, VALUE: 0.0
ROW: 5, COL: 1, VALUE: 0.0
ROW: 6, COL: 1, VALUE: 0.0
ROW: 7, COL: 1, VALUE: 0.0
ROW: 8, COL: 1, VALUE: 0.0
ROW: 9, COL: 1, VALUE: 8.76
ROW: 10, COL: 1, VALUE: 3.67
ROW: 11, COL: 1, VALUE: 5.18
(LARGE SOLID BOX) SHORT-INTERMEDIATE MUNICIPAL
INCOME - INSTITUTIONAL CLASS
+INITIAL OFFERING OF INSTITUTIONAL CLASS OF GROWTH OPPORTUNITIES,
BALANCED, HIGH YIELD, STRATEGIC INCOME, GOVERNMENT INVESTMENT, SHORT
FIXED-INCOME, MUNICIPAL INCOME, AND SHORT-INTERMEDIATE MUNICIPAL
INCOME TOOK PLACE ON JULY 3, 1995. INSTITUTIONAL CLASS RETURNS PRIOR
TO JULY 3, 1995 ARE THOSE OF CLASS T WHICH REFLECT A 12B-1 FEE OF
0.65% FOR GROWTH OPPORTUNITIES, STRATEGIC OPPORTUNITIES, AND BALANCED,
0.25% FOR HIGH YIELD, STRATEGIC INCOME, GOVERNMENT INVESTMENT, AND
MUNICIPAL INCOME, AND 0.15% FOR SHORT FIXED-INCOME AND SHORT
INTERMEDIATE MUNICIPAL INCOME. TOTAL RETURNS FOR INSTITUTIONAL CLASS
PRIOR TO JULY 3, 1995 WOULD HAVE BEEN HIGHER IF CLASS T'S 12B-1 FEE
HAD NOT BEEN REFLECTED.
INITIAL OFFERING OF INSTITUTIONAL CLASS OF STRATEGIC OPPORTUNITIES
TOOK PLACE ON JULY 3, 1995. INSTITUTIONAL CLASS RETURNS PRIOR TO JULY
3, 1995 ARE THOSE OF INITIAL CLASS WHICH HAS NO 12B-1 FEE.
INITIAL OFFERING OF INSTITUTIONAL CLASS OF MORTGAGE SECURITIES TOOK
PLACE ON MARCH 3, 1997. INSTITUTIONAL CLASS RETURNS PRIOR TO MARCH 3,
1997 ARE THOSE OF INITIAL CLASS WHICH HAS NO 12B-1 FEE.
[A] THE LIPPER CAPITAL APPRECIATION FUNDS AVERAGE CURRENTLY
REFLECTS THE PERFORMANCE OF OVER 231 MUTUAL FUNDS WITH SIMILAR
OBJECTIVES.
[ B ] THE LIPPER MID CAP FUNDS AVERAGE CURRENTLY REFLECTS
THE PERFORMANCE OF OVER 249 MUTUAL FUNDS WITH SIMILAR
OBJECTIVES.
[ C ] THE LIPPER GROWTH FUNDS AVERAGE CURRENTLY
REFLECTS THE PERFORMANCE OF OVER 820 MUTUAL FUNDS WITH SIMILAR
OBJECTIVES.
[ D ] THE LIPPER GROWTH AND INCOME FUNDS AVERAGE CURRENTLY
REFLECTS THE PERFORMANCE OF OVER 611 MUTUAL FUNDS WITH SIMILAR
OBJECTIVES.
[ E ] THE LIPPER EQUITY INCOME FUNDS AVERAGE CURRENTLY
REFLECTS THE PERFORMANCE OF OVER 182 MUTUAL FUNDS WITH SIMILAR
OBJECTIVES.
[F] THE LIPPER BALANCED FUNDS AVERAGE CURRENTLY REFLECTS THE
PERFORMANCE OF OVER 350 MUTUAL FUNDS WITH SIMILAR OBJECTIVES.
[G] THE LIPPER HIGH CURRENT YIELD FUNDS AVERAGE CURRENTLY REFLECTS
THE PERFORMANCE OF OVER 181 MUTUAL FUNDS WITH SIMILAR OBJECTIVES.
[H] THE LIPPER MULTI-SECTOR INCOME FUNDS AVERAGE CURRENTLY REFLECTS
THE PERFORMANCE OF OVER 81 MUTUAL FUNDS WITH SIMILAR OBJECTIVES.
[I] THE LIPPER U.S. MORTGAGE FUNDS AVERAGE CURRENTLY REFLECTS THE
PERFORMANCE OF OVER 59 MUTUAL FUNDS WITH SIMILAR OBJECTIVES.
[J] THE LIPPER GENERAL U.S. GOVERNMENT BOND FUNDS AVERAGE CURRENTLY
REFLECTS THE PERFORMANCE OF OVER 179 MUTUAL FUNDS WITH SIMILAR
OBJECTIVES.
[K] THE LIPPER SHORT-INTERMEDIATE INVESTMENT GRADE BOND FUNDS
AVERAGE CURRENTLY REFLECTS THE PERFORMANCE OF OVER 195 MUTUAL FUNDS
WITH SIMILAR OBJECTIVES.
[L] THE LIPPER SHORT INVESTMENT GRADE BOND AVERAGE FUNDS CURRENTLY
REFLECTS THE PERFORMANCE OF OVER 101 MUTUAL FUNDS WITH SIMILAR
OBJECTIVES.
[M] THE LIPPER GENERAL MUNICIPAL DEBT FUNDS FUNDS AVERAGE CURRENTLY
REFLECTS THE PERFORMANCE OF OVER 235 MUTUAL FUNDS WITH SIMILAR
OBJECTIVES.
[N] THE LIPPER INTERMEDIATE MUNICIPAL DEBT FUNDS AVERAGE CURRENTLY
REFLECTS THE PERFORMANCE OF OVER 140 MUTUAL FUNDS WITH SIMILAR
OBJECTIVES.
[O] THE LIPPER SHORT-INTERMEDIATE MUNICIPAL DEBT FUNDS AVERAGE
CURRENTLY REFLECTS THE PERFORMANCE OF OVER 33 MUTUAL FUNDS WITH
SIMILAR OBJECTIVES.
TECHNOQUANT IS A TRADEMARK OF FMR CORP.
