SUPPLEMENT TO THE FIDELITY ADVISOR FUNDS
CLASS A, CLASS T, CLASS B, AND CLASS C
OCTOBER 31,1997 PROSPECTUS
PROPOSED REORGANIZATION. 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 provides for the transfer of all of the assets and the
assumption of all of the liabilities of Fidelity Advisor
Short-Intermediate Municipal Income Fund solely in exchange for Class
A, Class T, and Institutional Class shares of Fidelity Advisor
Intermediate Municipal Income Fund equal in value to the relative net
asset value of the outstanding shares of Class A, Class T, and
Institutional Class, respectively, of Fidelity Advisor
Short-Intermediate Municipal Income Fund. Following such exchange,
Fidelity Advisor Short-Intermediate Municipal Income Fund will
distribute such shares pro rata to the corresponding class in
liquidation of Fidelity Advisor Short-Intermediate Municipal Income
Fund as provided in the Agreement (the transactions contemplated by
the Agreement referred to as the "Reorganization").
The Reorganization can be consummated only if, among other things, it
is approved by a majority vote of shareholders. A Special Meeting (the
"Meeting") of the Shareholders of Fidelity Advisor Short-Intermediate
Municipal Income Fund will be held on May 4, 1998, and approval of the
Agreement will be voted on at that time. In connection with the
Meeting, Fidelity Advisor Short-Intermediate Municipal Income Fund
will be filing with the Securities and Exchange Commission and
delivering to its shareholders of record a Proxy Statement describing
the Reorganization and a Prospectus for Fidelity Advisor Intermediate
Municipal Income Fund.
If the Agreement is approved at the Meeting and certain conditions
required by the Agreement are satisfied, the Reorganization is
expected to become effective on or about May 28, 1998. If shareholder
approval of the Agreement is delayed due to failure to meet a quorum
or otherwise, the Reorganization will become effective, if approved,
as soon as practicable thereafter.
In the event Fidelity Advisor Short-Intermediate Municipal Income Fund
shareholders fail to approve the Agreement, Fidelity Advisor
Short-Intermediate Municipal Income Fund will continue to engage in
business as a registered investment company and the Board of Trustees
will consider other proposals for the reorganization or liquidation of
the Fund.
Fidelity Advisor Short-Intermediate Municipal Income Fund is
closed to new accounts pending the Reorganization.
Fidelity Advisor California Municipal Income Fund and Fidelity Advisor
New York Municipal Income Fund are closed to new and existing
accounts.
Class A, Class T, and Class B of Fidelity Advisor Municipal Bond Fund
are closed to new and existing accounts except for shares purchased by
investors participating in the Fidelity sponsored TARGETS Program who
may purchase shares through December 31, 1997.
Fidelity Advisor High Income Municipal Fund has been renamed
Fidelity Advisor Municipal Income Fund.
The following information replaces similar information found in "Who
May Want to Invest" on page 3.
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 80, 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 86, 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 86, for conversion information.
T he following information replaces similar information for
MUNICIPAL BOND, CALIFORNIA MUNICIPAL INCOME, AND NEW YORK MUNICIPAL
INCOME found in "Expenses" on page 8.
MUNICIPAL FUNDS
Operating Expenses Class A Class T Class B Class C
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
MUNICIPAL Management fee 0.40%[A] 0.40% 0.40% *
BOND
12b-1 fee (including 0.25% Shareholder Service Fee for Class B shares) 0.15% 0.25% 0.90% *
Other expenses (after reimbursement Class A) 1.60%[A] 0.37% 0.52% *
Total operating expenses 2.15% 1.02% 1.82% *
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
STATE MUNICIPAL FUNDS
Operating Expenses Class A Class T Class B Class C
CALIFORNIA Management fee 0.40%[A] 0.40% 0.40% *
MUNICIPAL
INCOME
12b-1 fee (including 0.25% Shareholder Service Fee
for Class B shares) 0.15% 0.25% 0.90% *
Other expenses (after reimbursement Class A) 1.60%[A] 0.38% 0.95% *
Total operating expenses 2.15% 1.03% 2.25% *
NEW YORK Management fee 0.40%[A] 0.40% 0.40% *
MUNICIPAL
INCOME
12b-1 fee (including 0.25% Shareholder Service Fee for
Class B shares) 0.15% 0.25% 0.90% *
Other expenses (after reimbursement) 1.60%[A] 1.60% 1.60% *
Total operating expenses 2.15% 2.25% 2.90% *
</TABLE>
* FUND DOES NOT OFFER CLASS C SHARES.
[A] BASED ON ESTIMATED EXPENSES FOR FIRST YEAR.
T he following information replaces similar information for
MUNICIPAL BOND, CALIFORNIA MUNICIPAL INCOME, AND NEW YORK MUNICIPAL
INCOME found in "Expenses" on page 11.
MUNICIPAL FUNDS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Examples
Full Redemption No Redemption
Class A Class T Class B Class C Class B Class C
MUNICIPAL BOND 1 year $ 68 $ 45 $ 68[A] * $ 18 *
3 years $ 112 $ 66 $ 87[A] * $ 57 *
5 years $ 157 $ 89 $ 119[A] * $ 99 *
10 years[B] $ 284 $ 155 $ 226 * $ 226 *
</TABLE>
STATE MUNICIPAL FUNDS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Examples
Full Redemption No Redemption
Class A Class T Class B Class C Class B Class C
CALIFORNIA MUNICIPAL INCOME 1 year $ 68 $ 45 $ 73[A] * $ 23 *
3 years $ 112 $ 67 $ 100[A] * $ 70 *
5 years $ 157 $ 90 $ 140[A] * $ 120 *
10 years[B] $ 284 $ 157 $ 255 * $ 255 *
NEW YORK MUNICIPAL INCOME 1 year $ 68 $ 57 $ 79[A] * $ 29 *
3 years $ 112 $ 103 $ 120[A] * $ 90 *
5 years $ 157 $ 151 $ 173[A] * $ 153 *
10 years[B] $ 284 $ 284 $ 296 * $ 296 *
</TABLE>
* 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.
T he following information replaces similar information for
MUNICIPAL BOND, CALIFORNIA MUNICIPAL INCOME, AND NEW YORK MUNICIPAL
INCOME found in "Expenses" on page 12.
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>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A Effective Class T Effective Class B Effective Class C Effective Date
Date Date Date
Municipal Bond 2.15% 1/1/98 2.25% 1/1/98 2.90% 1/1/98 * *
California Municipal Income 2.15% 1/1/98 2.25% 1/1/98 2.90% 1/1/98 * *
New York Municipal Income 2.15% 1/1/98 2.25% 1/1/98 2.90% 1/1/98 * *
</TABLE>
* FUND DOES NOT OFFER CLASS C SHARES.
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:
Other Expenses Total Operating Expenses
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A Class T Class B Class C Class A Class T Class B Class C
Municipal Bond 2.80%[A] (dagger) (dagger) * 3.35%[A] (dagger) (dagger) *
California Municipal Income 2.01%[A] (dagger) (dagger) * 2.56%[A] (dagger) (dagger) *
New York Municipal Income 1.95%[A] 1.97% 2.42% * 2.50%[A] 2.62% 3.72% *
</TABLE>
* FUND DOES NOT OFFER CLASS C SHARES.
[A] BASED ON ESTIMATED EXPENSES FOR THE FIRST YEAR.
(dagger) TOTAL OPERATING EXPENSES WERE LESS THAN THE VOLUNTARY EXPENSE
CAPS SHOWN IN THE FIRST TABLE ABOVE.
T he following information replaces similar information found
under the heading "FMR and Its Affiliates" in the "Charter" section on
page 63.
John Avery is manager of Advisor Balanced, which he has managed since
September 1997. He also manages another Fidelity fund. Mr. Avery
joined Fidelity as an analyst in 1995. Previously, he was an analyst
for Putman Investments from 1993 to 1994. Mr. Avery received his MBA
from The Wharton School at the University of Pennsylvania in 1993.
The following information replaces similar information found in
"Investment Principles and Risks" on page 67.
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.
Although the fund can invest in securities of any maturity, FMR seeks
to manage the fund so that it generally reacts to changes in interest
rates similarly to government bonds with maturities between two and 10
years. However, the reaction of mortgage securities to changes in
interest rates can be difficult to predict since mortgage securities
are subject to prepayment of principal and can be structured in a
complex manner. 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. As of July 31,
1997, the fund's dollar-weighted average maturity was approximately
5.8 years.
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.
Although the fund can invest in securities of any maturity, FMR seeks
to manage the fund so that it generally reacts to changes in interest
rates similarly to government bonds with maturities between five and
12 years. In determining a security's maturity for purposes of
calculating the fund's average maturity, an estimate of the average
time for its principal to be paid may be used. This could be
substantially shorter than its stated final maturity. As of October
31, 1996, the fund's dollar-weighted average maturity was
approximately 8.5 years.
The following information supplements the information found in
"Investment Principles and Risks" on page 67.
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. Although the fund can invest in
securities of any maturity, the fund normally maintains a
dollar-weighted average maturity between three and 10 years. In
determining a security's maturity for purposes of calculating the
fund's average maturity, an estimate of the average time for its
principal to be paid may be used. This can be substantially shorter
than its stated final maturity. As November 30, 1996, the fund's
dollar-weighted average maturity was approximately 5.7 years.
In managing Intermediate Bond, FMR selects a benchmark index which
is representative of the portion of the bond market in which the fund
invests. FMR uses this benchmark index as a guide in structuring the
fund and selecting its investments. The benchmark index for
Intermediate Bond is the Lehman Brothers Intermediate
Government/Corporate Bond Index, a market value weighted benchmark of
government and corporate fixed-rate debt issues with maturities
between one and 10 years. FMR manages the fund to have a similar
overall interest rate risk to its Index.
T he following information replaces similar information found
under the heading "High Income Municipal Fund" in "Investment
Principles and Risks" on page 68.
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 so that at least 80% of the
fund's assets is invested in municipal securities whose interest is
free from federal income tax. In addition, FMR may invest all of the
fund's assets in municipal securities issued to finance private
activities. The interest from these securities is a tax preference
item for the purposes of the federal alternative minimum tax.
Although the fund can invest in securities of any maturity, FMR seeks
to manage the fund so that it generally reacts to changes in interest
rates similarly to municipal bonds with maturities between eight and
18 years. As of October 31, 1996, the fund's dollar-weighted average
maturity was approximately 16.4 years.
T he following information replaces similar information found
under the heading "Debt Securities" in "Securities and Investment
Practices" on page 69.
Each of Mortgage Securities, Short Fixed-Income, Municipal Income,
Intermediate Municipal Income, Short-Intermediate Municipal Income,
California Municipal Income, and New York 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.
(Duff & Phelps), or Fitch Investors Service, L.P. (Fitch), or is
unrated but judged by FMR to be of equivalent quality.
EFFECTIVE FEBRUARY 28, 1998, the following information replaces
similar information found under the heading "Debt Securities" in
"Securities and Investment Practices" on page 69.
Each of Mortgage Securities, Intermediate Bond, Short Fixed-Income,
Municipal Income, Intermediate Municipal Income, Short-Intermediate
Municipal Income, California Municipal Income, and New York 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. (Duff & Phelps), or Fitch Investors Service, L.P. (Fitch), or is
unrated but judged by FMR to be of equivalent quality.
The following information replaces similar information found "How to
Buy Shares" on page 80.
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.
The following information replaces similar information found in "Sales
Charge Reductions and Waivers" beginning on page 91.
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 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 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.
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 and above),
Class T shares without a sales charge (as described in (1), (2), (3)
and (4) above), 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;
4. (APPLICABLE TO CLASS B ONLY) In connection with redemptions of
Class B California Municipal Income or Class B New York Municipal
Income; or
5 . (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.
SUPPLEMENT TO THE FIDELITY ADVISOR FUNDS
INSTITUTIONAL CLASS OCTOBER 31,1997 PROSPECTUS
PROPOSED REORGANIZATION. 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 provides for the transfer of all of the assets and the
assumption of all of the liabilities of Fidelity Advisor
Short-Intermediate Municipal Income Fund solely in exchange for Class
A, Class T, and Institutional Class shares of Fidelity Advisor
Intermediate Municipal Income Fund equal in value to the relative net
asset value of the outstanding shares of Class A, Class T, and
Institutional Class, respectively, of Fidelity Advisor
Short-Intermediate Municipal Income Fund. Following such exchange,
Fidelity Advisor Short-Intermediate Municipal Income Fund will
distribute such shares pro rata to the corresponding class in
liquidation of Fidelity Advisor Short-Intermediate Municipal Income
Fund as provided in the Agreement (the transactions contemplated by
the Agreement referred to as the "Reorganization").
The Reorganization can be consummated only if, among other things, it
is approved by a majority vote of shareholders. A Special Meeting (the
"Meeting") of the Shareholders of Fidelity Advisor Short-Intermediate
Municipal Income Fund will be held on May 4, 1998, and approval of the
Agreement will be voted on at that time. In connection with the
Meeting, Fidelity Advisor Short-Intermediate Municipal Income Fund
will be filing with the Securities and Exchange Commission and
delivering to its shareholders of record a Proxy Statement describing
the Reorganization and a Prospectus for Fidelity Advisor Intermediate
Municipal Income Fund.
If the Agreement is approved at the Meeting and certain conditions
required by the Agreement are satisfied, the Reorganization is
expected to become effective on or about May 28, 1998. If shareholder
approval of the Agreement is delayed due to failure to meet a quorum
or otherwise, the Reorganization will become effective, if approved,
as soon as practicable thereafter.
In the event Fidelity Advisor Short-Intermediate Municipal Income Fund
shareholders fail to approve the Agreement, Fidelity Advisor
Short-Intermediate Municipal Income Fund will continue to engage in
business as a registered investment company and the Board of Trustees
will consider other proposals for the reorganization or liquidation of
the Fund.
Fidelity Advisor Short-Intermediate Municipal Income Fund is
closed to new accounts pending the Reorganization.
Fidelity Advisor California Municipal Income Fund and Fidelity Advisor
New York Municipal Income Fund are closed to new and existing
accounts.
Institutional Class of Fidelity Advisor Municipal Bond Fund is closed
to new and existing accounts except for shares purchased by investors
participating in the Fidelity sponsored TARGETS Program who may
purchase shares through December 31, 1997.
Fidelity Advisor High Income Municipal Fund has been renamed
Fidelity Advisor Municipal Income Fund.
The following information replaces the first three paragraphs found in
"Who May Want to Invest" on page 4.
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.
Th e following information replaces similar information for
MUNICIPAL BOND, CALIFORNIA MUNICIPAL INCOME, AND NEW YORK MUNICIPAL
INCOME found in "Expenses" beginning on page 7.
MUNICIPAL FUNDS
Operating Expenses Examples
MUNICIPAL BOND Management fee 0.40%[A] 1 year $ 16
12b-1 fee None 3 years $ 49
Other expenses 1.14%[A] 5 years $ 84
Total operating expenses 1.54% 10 years $ 183
STATE MUNICIPAL FUNDS
Operating Expenses Examples
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CALIFORNIA MUNICIPAL INCOME Management fee 0.40% 1 year $ 9
12b-1 fee None 3 years $ 27
Other expenses 0.45% 5 years $ 47
Total operating expenses 0.85% 10 years $ 105
NEW YORK MUNICIPAL INCOME Management fee 0.40% 1 year $ 20
12b-1 fee None 3 years $ 63
Other expenses (after reimbursement) 1.60% 5 years $ 108
Total operating expenses 2.00% 10 years $ 233
</TABLE>
[A] BASED ON ESTIMATED EXPENSES FOR FIRST YEAR.
T he following information replaces similar information for
MUNICIPAL BOND, CALIFORNIA MUNICIPAL INCOME, AND NEW YORK MUNICIPAL
INCOME found in "Expenses" on page 9.
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
Municipal Bond 2.00% 1/1/98
California Municipal Income 2.00% 1/1/98
New York Municipal Income 2.00% 1/1/98
T he following information replaces similar information found in
"Expenses" on page 9.
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> <C> <C>
Other Expenses Total Operating Expenses
TechnoQuant Growth[A] 7.03% 7.63%
Mid Cap 2.64% 3.24%
Large Cap 1.94% 2.54%
Growth & Income[A] 0.78% 1.28%
Balanced 0.56% 1.01%
Strategic Income 0.96% 1.55%
Mortgage Securities[A] 4.13% 4.57%
Government Investment 0.38% 0.83%
Short Fixed-Income 0.55% 1.00%
High Income Municipal 3.86% 4.26%
Intermediate Municipal Income 0.44% 0.84%
Short-Intermediate Municipal Income 13.15% 13.55%
New York Municipal Income 3.43% 3.83%
</TABLE>
[A] BASED ON ESTIMATED EXPENSES FOR THE FIRST YEAR.
T he following information replaces similar information found
under the heading "FMR and Its Affiliates" in the "Charter" section on
page 26.
John Avery is manager of Advisor Balanced, which he has managed since
September 1997. He also manages another Fidelity fund. Mr. Avery
joined Fidelity as an analyst in 1995. Previously, he was an analyst
for Putman Investments from 1993 to 1994. Mr. Avery received his MBA
from The Wharton School at the University of Pennsylvania in 1993.
The following information replaces similar information found in
"Investment Principles and Risks" on page 30.
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.
Although the fund can invest in securities of any maturity, FMR seeks
to manage the fund so that it generally reacts to changes in interest
rates similarly to government bonds with maturities between two and 10
years. However, the reaction of mortgage securities to changes in
interest rates can be difficult to predict since mortgage securities
are subject to prepayment of principal and can be structured in a
complex manner. 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. As of July 31,
1997, the fund's dollar-weighted average maturity was approximately
5.8 years.
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.
Although the fund can invest in securities of any maturity, FMR seeks
to manage the fund so that it generally reacts to changes in interest
rates similarly to government bonds with maturities between five and
12 years. In determining a security's maturity for purposes of
calculating the fund's average maturity, an estimate of the average
time for its principal to be paid may be used. This could be
substantially shorter than its stated final maturity. As of October
31, 1996, the fund's dollar-weighted average maturity was
approximately 8.5 years.
The following information supplements the information found in
"Investment Principles and Risks" on page 30.
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. Although the fund can invest in
securities of any maturity, the fund normally maintains a
dollar-weighted average maturity between three and 10 years.
In determining a security's maturity for purposes of calculating
the fund's average maturity, an estimate of the average time for its
principal to be paid may be used. This can be substantially shorter
than its stated final maturity. As November 30, 1996, the fund's
dollar-weighted average maturity was approximately 5.7 years.
In managing Intermediate Bond, FMR selects a benchmark index which
is representative of the portion of the bond market in which the fund
invests. FMR uses this benchmark index as a guide in structuring the
fund and selecting its investments. The benchmark index for
Intermediate Bond is the Lehman Brothers Intermediate
Government/Corporate Bond Index, a market value weighted benchmark of
government and corporate fixed-rate debt issues with maturities
between one and 10 years. FMR manages the fund to have a similar
overall interest rate risk to its Index.
T h e following information replaces similar information
found under the heading "High Income Municipal Fund" in "Investment
Principles and Risks" on page 31.
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 so that at least 80% of the
fund's assets is invested in municipal securities whose interest is
free from federal income tax. In addition, FMR may invest all of the
fund's assets in municipal securities issued to finance private
activities. The interest from these securities is a tax preference
item for the purposes of the federal alternative minimum tax.
Although the fund can invest in securities of any maturity, FMR seeks
to manage the fund so that it generally reacts to changes in interest
rates similarly to municipal bonds with maturities between eight and
18 years. As of October 31, 1996, the fund's dollar-weighted average
maturity was approximately 16.4 years.
T he following information replaces similar information found
under the heading "Debt Securities" in "Securities and Investment
Practices" beginning on page 32.
Each of Mortgage Securities, Short Fixed-Income, Municipal Income,
Intermediate Municipal Income, Short-Intermediate Municipal Income,
California Municipal Income, and New York 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.
(Duff & Phelps), or Fitch Investors Service, L.P. (Fitch), or is
unrated but judged by FMR to be of equivalent quality.
EFFECTIVE FEBRUARY 28, 1998, the following information replaces
similar information found under the heading "Debt Securities" in
"Securities and Investment Practices" beginning on page 32.
Each of Mortgage Securities, Intermediate Bond, Short Fixed-Income,
Municipal Income, Intermediate Municipal Income, Short-Intermediate
Municipal Income, California Municipal Income, and New York 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. (Duff & Phelps), or Fitch Investors Service, L.P. (Fitch), or is
unrated but judged by FMR to be of equivalent quality.
SUPPLEMENT TO THE FIDELITY ADVISOR FUNDS:
CLASS A, CLASS T, CLASS B, CLASS C, INSTITUTIONAL CLASS, AND INITIAL
CLASS
OCTOBER 31, 1997
STATEMENT OF ADDITIONAL INFORMATION
Fidelity Advisor California Municipal Income Fund and Fidelity Advisor
New York Municipal Income Fund are closed to new and existing
accounts.
Class A, Class T, Class B, and Institutional Class of Fidelity Advisor
Municipal Bond Fund are closed to new and existing accounts except for
shares purchased by investors participating in the Fidelity sponsored
TARGETS Program who may purchase shares through December 31, 1997.
Fidelity Advisor High Income Municipal Fund has been renamed
Fidelity Advisor Municipal Income Fund.
THE FOLLOWING INFORMATION REPLACES THE SIMILAR INFORMATION FOUND UNDER
THE HEADING "ADDITIONAL PURCHASE, EXCHANGE, AND REDEMPTION
INFORMATION" ON PAGE 128.
CLASS A SHARES ONLY
Pursuant to Rule 22d-1 under the 1940 Act, FDC exercises its right to
waive Class A's front-end sales charge in connection with a fund's
merger with or acquisition of any investment company or trust. In
addition, FDC has chosen to waive Class A's front-end sales charge in
certain instances because of efficiencies involved in those sales of
shares. The sales charge will not apply:
1. to shares purchased for an insurance company separate account used
to fund annuity contracts for employee benefit plans (including 403(b)
programs, but otherwise as defined in ERISA);
2. to shares 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. to shares 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. to shares purchased by a registered investment adviser 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 plan assets do not qualify for
this waiver;
5. to shares purchased for an employee benefit plan that has $25
million or more in plan assets; or
6 . to shares 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 by FIIOC.
A sales load waiver form must accompany these transactions.
THE FOLLOWING INFORMATION REPLACES THE SIMILAR INFORMATION FOUND UNDER
THE HEADING "ADDITIONAL PURCHASE, EXCHANGE, AND REDEMPTION
INFORMATION" BEGINNING ON PAGE 128.
CLASS T SHARES ONLY
Pursuant to Rule 22d-1 under the 1940 Act, FDC exercises its right to
waive Class T's front-end sales charge in connection with a fund's
merger with or acquisition of any investment company or trust. In
addition, FDC has chosen to waive Class T's front-end sales charge in
certain instances because of efficiencies involved in those sales of
shares. The sales charge will not apply:
1. to shares purchased for an insurance company separate account used
to fund annuity contracts for employee benefit plans (including 403(b)
programs, but otherwise as defined in ERISA);
2. to shares 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. to shares purchased by a broker-dealer for a managed account that
is charged an asset-based fee;
4. to shares purchased by a registered investment adviser 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. to shares purchased for an employee benefit plan;
6. to shares purchased for a Fidelity or Fidelity Advisor account
(including purchases by exchange) 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. to shares purchased for any state, county, or city, or any
governmental instrumentality, department, authority or agency;
8. to shares purchased with redemption proceeds from other mutual fund
complexes on which the investor has paid a front-end or contingent
deferred sales charge;
9. to shares 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. to shares 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. to shares 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. to shares 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. to shares purchased with distributions of income, principal, and
capital gains from Fidelity Defined Trusts; or
14. to shares 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 by FIIOC.
A sales load waiver form must accompany these transactions.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND UNDER THE
HEADING "ADDITIONAL PURCHASE, EXCHANGE, AND REDEMPTION INFORMATION" ON
PAGE 130.
CLASS B AND CLASS C SHARES ONLY
The contingent deferred sales charge (CDSC) on Class B and Class C
shares may be waived (1) in the case 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 70, which are permitted without
penalty pursuant to the Internal Revenue Code; (3) in connection with
redemptions through the Fidelity Advisor Systematic Withdrawal
Program; (4) (APPLICABLE TO CLASS B ONLY) in connection with
redemptions of Class B California Municipal Income or Class B New York
Municipal Income; or ( 5 ) (APPLICABLE TO CLASS C ONLY) in
connection with any redemptions from an employee benefit plan
(including 403(b) programs, but otherwise as defined by ERISA).
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION FOUND UNDER THE
HEADING "ADDITIONAL PURCHASE, EXCHANGE, AND REDEMPTION INFORMATION" ON
PAGE 132.
INSTITUTIONAL CLASS SHARES ONLY
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 (including 403(b) programs, but otherwise as defined by
ERISA) 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 in
vested 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. Current or former Trustees or officers of a Fidelity fund or
current or retired officers, directors, or regular employees of FMR
Corp. or Fidelity International Limited or their direct or indirect
subsidiaries (Fidelity Trustee or employee), spouses of Fidelity
Trustees or employees, Fidelity Trustees or employees acting as a
custodian for a minor child, or persons acting as trustee of a trust
for the sole benefit of the minor child of a Fidelity Trustee or
employee.
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.
