As filed with the Securities and Exchange Commission
on January 27, 1998
Registration No. 2-84130
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-14
REGISTRATION STATEMENT
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UNDER THE SECURITIES ACT OF 1933
PRE-EFFECTIVE AMENDMENT NO. [ ]
POST-EFFECTIVE AMENDMENT NO. [ ]
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Fidelity Advisor Series VI
(Exact Name of Registrant as Specified in Charter)
82 Devonshire St., Boston, MA 02109
(Address Of Principal Executive Offices)
Registrant's Telephone Number (617) 563-7000
Eric D. Roiter, Secretary
82 Devonshire Street
Boston, MA 02109
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: As soon as practicable
after the Registration Statement becomes effective under the
Securities Act of 1933.
Title of Securities Being Registered: Class A, Class T, and
Institutional Class shares of Fidelity Advisor Intermediate Municipal
Income Fund.
No filing fee is due because of reliance on Section 24(f).
It is proposed that this filing will become effective on February 26,
1998, pursuant to Rule 488.
Fidelity Advisor Intermediate Municipal Income Fund
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement contains the following papers and
documents:
Facing Page
Contents of Registration Statement
Cross Reference Sheet
Solicitation Letter to Shareholders
Form of Proxy Card
Notice of Special Meeting
Part A - Proxy Statement and Prospectus
Part B- Statement of Additional Information
Part C - Other Information
Signature Page
Exhibits
Fidelity Advisor Series VI:
Fidelity Advisor Intermediate Municipal Income Fund
FORM N-14 CROSS REFERENCE SHEET
PART A
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FORM N-14 ITEM NUMBER AND CAPTION PROSPECTUS/PROXY STATEMENT CAPTION
1. BEGINNING OF REGISTRATION STATEMENT AND OUT- COVER PAGE
SIDE FRONT COVER PAGE OF PROSPECTUS
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2. BEGINNING AND OUTSIDE BACK COVER PAGE OF PRO- TABLE OF CONTENTS
SPECTUS
3. FEE TABLE, SYNOPSIS INFORMATION AND RISK FACTORS SYNOPSIS; COMPARISON OF OTHER POLICIES OF THE FUNDS;
COMPARISON OF PRINCIPAL RISK FACTORS; THE PROPOSED
TRANSACTION
4. INFORMATION ABOUT THE TRANSACTION SYNOPSIS; THE PROPOSED TRANSACTION;
PROSPECTUSES OF FIDELITY ADVISOR INTERMEDIATE
MUNICIPAL INCOME FUND DATED OCTOBER 31, 1997 AND
SUPPLEMENTED JANUARY 16, 1998
5. INFORMATION ABOUT THE REGISTRANT SYNOPSIS; COMPARISON OF OTHER POLICIES OF THE FUNDS;
COMPARISON OF PRINCIPAL RISK FACTORS; MISCELLANEOUS;
ADDITIONAL INFORMATION ABOUT FIDELITY ADVISOR
INTERMEDIATE MUNICIPAL INCOME FUND; PROSPECTUSES
OF FIDELITY ADVISOR INTERMEDIATE MUNICIPAL INCOME
FUND DATED OCTOBER 31, 1997 AND SUPPLEMENTED
JANUARY 16, 1998; ATTACHMENT I
6. INFORMATION ABOUT THE COMPANY BEING ACQUIRED COVER PAGE; SYNOPSIS; COMPARISON OF OTHER POLICIES
OF THE FUNDS; COMPARISON OF PRINCIPAL RISK FACTORS;
MISCELLANEOUS; PROSPECTUSES OF FIDELITY ADVISOR
SHORT-INTERMEDIATE MUNICIPAL INCOME FUND DATED
OCTOBER 31, 1997 AND SUPPLEMENTED JANUARY 16, 1998
7. VOTING INFORMATION VOTING INFORMATION
8. INTEREST OF CERTAIN PERSONS AND EXPERTS NOT APPLICABLE
9. ADDITIONAL INFORMATION REQUIRED FOR REOFFERING NOT APPLICABLE
BY PERSONS DEEMED TO BE UNDERWRITERS
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PART B
ITEM NUMBER AND CAPTION STATEMENT OF ADDITIONAL INFORMATION CAPTION
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10. COVER PAGE COVER PAGE
11. TABLE OF CONTENTS TABLE OF CONTENTS
12. ADDITIONAL INFORMATION ABOUT THE REGISTRANT PROSPECTUSES AND STATEMENT OF ADDITIONAL
INFORMATION OF FIDELITY ADVISOR INTERMEDIATE
MUNICIPAL INCOME FUND DATED OCTOBER 31,
1997 AND SUPPLEMENTED JANUARY 16, 1998
13. ADDITIONAL INFORMATION ABOUT THE COMPANY BE- NOT APPLICABLE
ING ACQUIRED
14. FINANCIAL STATEMENTS FINANCIAL STATEMENTS INCLUDED IN THE ANNUAL
REPORTS OF FIDELITY ADVISOR
SHORT-INTERMEDIATE MUNICIPAL INCOME FUND
FOR THE FISCAL YEAR ENDED NOVEMBER 30,
1997; FINANCIAL STATEMENTS INCLUDED IN THE
ANNUAL REPORTS OF FIDELITY ADVISOR
INTERMEDIATE MUNICIPAL INCOME FUND FOR THE
FISCAL YEAR ENDED NOVEMBER 30, 1997.
PRO-FORMA FINANCIAL STATEMENTS FOR THE FISCAL
YEAR ENDED NOVEMBER 30, 1997.
PART C INFORMATION REQUIRED TO BE INCLUDED IN PART C
IS SET FORTH UNDER THE APPROPRIATE ITEM SO
NUMBERED IN PART C OF THIS REGISTRATION
STATEMENT.
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March 9, 1998
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
1-800-527-7297. Thank you for your participation in this important
initiative for your fund.
Sincerely,
Edward C. Johnson 3d
Chairman and Chief Executive Officer
Q&A
1. 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).
2. 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.
3. 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%
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.
4. 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.
5. 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.
6. Who is the fund manager of Intermediate?
Norman Lind currently manages the fund and is expected to manage the
combined fund.
7. 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).
8. 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.
9. 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.
10. 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.
11. 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 1-800-527-7297.
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.
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- -------------------------
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:
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_____________________________________________________________________
________________________
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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.
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ASIT-PXC-0398 cusip # 315917880/fund # 264
cusip # 315917500/fund # 636
cusip # 315917708/fund # 606
FIDELITY ADVISOR SHORT-INTERMEDIATE MUNICIPAL INCOME FUND
A FUND OF
FIDELITY ADVISOR SERIES VI
82 DEVONSHIRE STREET, BOSTON, MASSACHUSETTS 02109
1-800-843-3001
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
1-800-843-3001
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 October 31, 1997 and supplemented January 16, 1998), which
offer 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 October 31,
1997 and supplemented Janaury 16, 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 October 31, 1997 and supplemented January 16, 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 1-800-527-7297.
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
1-800-843-3001
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 average 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 PRICE) ON PURCHASES 1.50% 3.75% 3.75%
MAXIMUM CDSC (AS A % OF THE
LESSER OF ORIGINAL PURCHASE PRICE
OR REDEMPTION PROCEEDS) NONE[A] NONE[A] NONE[A]
ANNUAL ACCOUNT MAINTENANCE FEE
(FOR ACCOUNTS UNDER $2,500) $12.00 $12.00 $12.00
</TABLE>
SHORT-INTERMEDIATE INTERMEDIATE COMBINED FUND
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
NET GROSS NET GROSS NET GROSS
EXPENSES EXPENSES EXPENSES EXPENSES EXPENSES EXPENSES
MANAGEMENT FEE 0.39% 0.39% 0.39% 0.39% 0.39% 0.39%
12B-1 FEE 0.15% 0.15% 0.15% 0.15% 0.15% 0.15%
OTHER EXPENSES 0.36% 8.86% 0.36% 8.83% 0.36% 2.72%
TOTAL OPERATING 0.90% 9.40% 0.90% 9.37% 0.90% 3.26%
EXPENSES
</TABLE>
CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SHORT-INTERMEDIATE INTERMEDIATE COMBINED FUND
MAXIMUM SALES CHARGE (AS A %
OF OFFERING PRICE) ON PURCHASES 1.50% 2.75% 2.75%
MAXIMUM CDSC (AS A % OF THE
LESSER OF ORIGINAL PURCHASE PRICE
OR REDEMPTION PROCEEDS) NONE[A] NONE[A] NONE[A]
ANNUAL ACCOUNT MAINTENANCE FEE
(FOR ACCOUNTS UNDER $2,500) $12.00 $12.00 $12.00
</TABLE>
SHORT-INTERMEDIATE INTERMEDIATE COMBINED FUND
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
NET GROSS NET GROSS NET GROSS
EXPENSES EXPENSES EXPENSES EXPENSES EXPENSES EXPENSES
MANAGEMENT FEE 0.39% 0.39% 0.39% 0.39% 0.39% 0.39%
12B-1 FEE 0.15% 0.15% 0.25% 0.25% 0.25% 0.25%
OTHER EXPENSES 0.36% 0.69% 0.36% 0.40% 0.26% 0.37%
TOTAL OPERATING 0.90% 1.23% 1.00% 1.04% 0.90% 1.01%
EXPENSES
</TABLE>
INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SHORT-INTERMEDIATE INTERMEDIATE COMBINED FUND
MAXIMUM SALES CHARGE (AS A %
OF OFFERING PRICE) ON PURCHASES NONE NONE NONE
MAXIMUM CDSC (AS A % OF THE
LESSER OF ORIGINAL PURCHASE PRICE
OR REDEMPTION PROCEEDS) NONE NONE NONE
ANNUAL ACCOUNT MAINTENANCE FEE
(FOR ACCOUNTS UNDER $2,500) $12.00 $12.00 $12.00
</TABLE>
SHORT-INTERMEDIATE INTERMEDIATE COMBINED FUND
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
NET GROSS NET GROSS NET GROSS
EXPENSES EXPENSES EXPENSES EXPENSES EXPENSES EXPENSES
MANAGEMENT FEE 0.39% 0.39% 0.39% 0.39% 0.39% 0.39%
12B-1 FEE NONE NONE NONE NONE NONE NONE
OTHER EXPENSES 0.36% 3.84% 0.36% 0.58% 0.36% 0.48%
TOTAL OPERATING 0.75% 4.23% 0.75% 0.97% 0.75% 0.87%
EXPENSES
</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 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 charges). 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.
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%
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.
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 of the fund's Reorganization. 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
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 aggregate 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 also 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 value 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 October 31, 1997 and supplemented January 16, 1998) is enclosed
with this Proxy Statement. The Prospectuses for Class A, Class T, and
Institutional Class (both dated October 31, 1997 and supplemented
January 16, 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 - CLASS A
YEAR ENDED
NOVEMBER 30
SELECTED PER-SHARE DATA AND RATIOS 1997 1996
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.410 $ 10.160
INCOME FROM INVESTMENT OPERATIONS
NET INTEREST INCOME .230 .113
NET REALIZED AND UNREALIZED GAIN (LOSS) (.089) .250
TOTAL FROM INVESTMENT OPERATIONS .141 .363
LESS DISTRIBUTIONS
FROM NET INTEREST INCOME (.230) (.113)
FROM NET REALIZED GAIN (.001) --
TOTAL DISTRIBUTIONS (.231) (.113)
NET ASSET VALUE, END OF PERIOD $ 10.320 $ 10.410
TOTAL RETURN, 1.38% 3.59%
NET ASSETS, END OF PERIOD (000 OMITTED) $ 344 $ 103
RATIO OF EXPENSES TO AVERAGE NET ASSETS .90%, .90%,
RATIO OF NET INTEREST INCOME TO AVERAGE NET ASSETS 4.47% 4.60%
PORTFOLIO TURNOVER 21% 35%
INTERMEDIATE MUNICIPAL - CLASS T
<TABLE>
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YEARS ENDED NOVEMBER 30
SELECTED PER-SHARE DATA AND RATIOS 1997 1996 1995 1994 1993
1992
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 .225 .461 .451 .455 .508
.131
NET REALIZED AND UNREALIZED GAIN (LOSS) (.079) .030 .980 (1.040) .260
.070
TOTAL FROM INVESTMENT OPERATIONS .146 .491 1.431 (.585) .768
.201
LESS DISTRIBUTIONS
FROM NET INTEREST INCOME (.225) (.461) (.451) (.455) (.508)
(.131)
FROM NET REALIZED GAIN (.001) -- -- -- (.880)
- --
IN EXCESS OF NET REALIZED GAIN -- -- -- (.020) --
- --
TOTAL DISTRIBUTIONS (.226) (.461) (.451) (.475) (1.388)
(.131)
NET ASSET VALUE, END OF PERIOD $ 10.330 $ 10.410 $ 10.380 $ 9.400 $ 10.460
$ 11.080
TOTAL RETURN, 1.43% 4.89% 15.49% (5.78)% 7.72%
1.37%
NET ASSETS, END OF PERIOD (000 OMITTED) $ 49,852 $ 56,729 $ 62,852 $ 57,382 $ 39,800
$ 1,752
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.00%, 1.00% .94% .90% .90%
1.04%,
RATIO OF NET INTEREST INCOME TO AVERAGE NET ASSETS 4.38% 4.42% 4.56% 4.49% 4.76%
5.65%
PORTFOLIO TURNOVER 21% 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 EFFECTIVE DECEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION
93-2, "DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION
OF INCOME, CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY
INVESTMENT COMPANIES." AS A RESULT, NET INVESTMENT INCOME PER SHARE
MAY REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX
DIFFERENCES.
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 SIX MONTHS ENDED MAY 31, 1997 (UNAUDITED)
G FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A
SHARES) TO NOVEMBER 30, 1996.
H FOR THE PERIOD SEPTEMBER 10, 1992 (COMENCEMENT OF SALE OF CLASS T
SHARES) TO NOVEMBER 30, 1992.
INTERMEDIATE MUNICIPAL - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
YEARS ENDED NOVEMBER 30
SELECTED PER-SHARE DATA AND RATIOS 1997 1996 1995 1994
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.410 $ 10.380 $ 9.400 $ 9.890
INCOME FROM INVESTMENT OPERATIONS
NET INTEREST INCOME .193 .394 .373 .155
NET REALIZED AND UNREALIZED GAIN (LOSS) (.089) .030 .980 (.490)
TOTAL FROM INVESTMENT OPERATIONS .104 .424 1.353 (.335)
LESS DISTRIBUTIONS
FROM NET INTEREST INCOME (.193) (.394) (.373) (.155)
FROM NET REALIZED GAIN (.001) -- -- --
TOTAL DISTRIBUTIONS (.194) (.394) (.373) (.155)
NET ASSET VALUE, END OF PERIOD $ 10.320 $ 10.410 $ 10.380 $ 9.400
TOTAL RETURN, 1.01% 4.21% 14.60% (3.44)%
NET ASSETS, END OF PERIOD (000 OMITTED) $ 7,349 $ 7,445 $ 6,226 $ 1,682
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.65%, 1.66% 1.68% 1.65%,
RATIO OF NET INTEREST INCOME TO AVERAGE NET ASSETS 3.75% 3.76% 3.71% 3.74%
PORTFOLIO TURNOVER 21% 35% 53% 53%
</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 CONTINGENT DEFERRED SALES CHARGE
AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D SIX MONTHS ENDED MAY 31, 1997 (UNAUDITED)
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.
INTERMEDIATE MUNICIPAL INCOME - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
YEARS ENDED NOVEMBER 30
SELECTED PER-SHARE DATA AND RATIOS
1997 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
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 $ 10.990
INCOME FROM INVESTMENT OPERATIONS
NET INTEREST INCOME
.238 .487 .477 .481 .536 .666 .682 .689 .674 .650 .641
NET REALIZED AND UNREALIZED GAIN (LOSS)
(.079) .050 .950 (1.030) .260 .280 .160 .030 .090 .140 (.540)
TOTAL FROM INVESTMENT OPERATIONS
.159 .537 1.427 (.549) .796 .946 .842 .719 .764 .790 .101
LESS DISTRIBUTIONS
FROM NET INTEREST INCOME
(.238) (.487) (.477) (.481) (.536) (.666) (.682) (.689) (.674) (.650) (.641)
FROM NET REALIZED GAIN
(.001) -- -- -- (.880) -- -- -- -- -- (.070)
IN EXCESS OF NET REALIZED GAIN
- -- -- -- (.020) -- -- -- -- -- -- --
TOTAL DISTRIBUTIONS
(.239) (.487) (.477) (.501) (1.416) (.666) (.682) (.689) (.674) (.650) (.711)
NET ASSET VALUE, END OF PERIOD
$ 10.330 $ 10.410 $ 10.360 $ 9.410 $ 10.460 $ 11.080 $ 10.800 $ 10.640 $ 10.610 $ 10.520 $ 10.380
TOTAL RETURN,
1.56% 5.36% 15.44% (5.43)% 8.01% 9.01% 8.15% 7.04% 7.50% 7.77% .97%
NET ASSETS, END OF PERIOD (000 OMITTED)
$ 7,468 $ 6,455 $ 11,085 $ 11,702 $ 15,076 $ 28,428 $ 100,294 $ 111,506 $ 121,418 $ 132,443 $ 162,857
RATIO OF EXPENSES TO AVERAGE NET ASSETS
.75%, .75% .70% .65% .65% .66% .61% .62% .65% .63% .59%
RATIO OF EXPENSES TO AVERAGE NET ASSETS
.75% .74% .70% .65% .65% .66% .61% .62% .65% .63% .59%
AFTER EXPENSE REDUCTIONS
RATIO OF NET INTEREST INCOME TO
4.64% 4.68% 4.96% 4.75% 5.01% 6.05% 6.40% 6.53% 6.45% 6.20% 6.01%
AVERAGE NET ASSETS
PORTFOLIO TURNOVER
21% 35% 53% 53% 46% 36% 20% 32% 31% 24% 43%
</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 SIX MONTHS ENDED MAY 31, 1997 (UNAUDITED)
E EFFECTIVE DECEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION
93-2, "DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION
OF INCOME, CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY
INVESTMENT COMPANIES." AS A RESULT, NET INVESTMENT INCOME PER SHARE
MAY REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX
DIFFERENCES.
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.
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
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%
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 19971211 155754 S00000000000001
FA Intermed Bond -CL A LB Intermediate Govt/Corp
00261 LB007
1987/11/30 9625.00 10000.00
1987/12/31 9720.78 10105.06
1988/01/31 10015.93 10363.63
1988/02/29 10165.88 10478.96
1988/03/31 10087.00 10438.68
1988/04/30 10065.68 10421.30
1988/05/31 10006.66 10375.22
1988/06/30 10191.83 10540.58
1988/07/31 10181.17 10518.19
1988/08/31 10209.99 10533.99
1988/09/30 10398.55 10716.73
1988/10/31 10537.91 10862.34
1988/11/30 10472.84 10769.66
1988/12/31 10482.47 10779.14
1989/01/31 10596.52 10892.36
1989/02/28 10571.43 10847.33
1989/03/31 10613.20 10894.20
1989/04/30 10791.73 11111.96
1989/05/31 10994.69 11332.61
1989/06/30 11262.57 11618.31
1989/07/31 11500.84 11856.86
1989/08/31 11345.51 11703.62
1989/09/30 11399.07 11758.91
1989/10/31 11636.92 12007.48
1989/11/30 11732.63 12122.28
1989/12/31 11751.98 12155.46
1990/01/31 11635.09 12077.52
1990/02/28 11673.36 12121.49
1990/03/31 11657.03 12137.29
1990/04/30 11581.67 12095.16
1990/05/31 11856.75 11939.81
1990/06/30 12015.28 12526.46
1990/07/31 12175.69 12700.25
1990/08/31 12074.05 12648.11
1990/09/30 12163.30 12745.80
1990/10/31 12277.93 12893.78
1990/11/30 12490.46 12636.79
1990/12/31 12681.84 13268.47
1991/01/31 12776.12 13403.02
1991/02/28 12878.58 13510.19
1991/03/31 12960.17 13602.09
1991/04/30 13104.73 13750.33
1991/05/31 13174.63 13834.85
1991/06/30 13178.60 13844.59
1991/07/31 13326.81 13998.89
1991/08/31 13606.60 14266.15
1991/09/30 13859.32 14511.56
1991/10/31 14023.32 14677.18
1991/11/30 14157.49 14845.70
1991/12/31 14604.11 15208.28
1992/01/31 14417.24 15070.57
1992/02/29 14454.63 15130.08
1992/03/31 14402.61 15070.57
1992/04/30 14483.54 15203.01
1992/05/31 14748.23 15438.68
1992/06/30 14956.20 15667.23
1992/07/31 15308.21 15978.72
1992/08/31 15449.75 16138.55
1992/09/30 15629.48 16357.63
1992/10/31 15398.81 16145.40
1992/11/30 15438.12 16084.05
1992/12/31 15644.98 16299.44
1993/01/31 15956.81 16616.46
1993/02/28 16275.19 16878.46
1993/03/31 16382.09 16945.60
1993/04/30 16482.68 17081.99
1993/05/31 16494.26 17044.08
1993/06/30 16821.27 17311.60
1993/07/31 16951.56 17353.99
1993/08/31 17324.45 17629.15
1993/09/30 17374.07 17702.35
1993/10/31 17467.62 17749.75
1993/11/30 17367.60 17650.75
1993/12/31 17443.10 17731.58
1994/01/31 17627.31 17928.54
1994/02/28 17286.62 17663.38
1994/03/31 16951.77 17371.90
1994/04/30 16884.37 17253.67
1994/05/31 16826.11 17265.26
1994/06/30 16821.44 17267.63
1994/07/31 16981.07 17516.19
1994/08/31 16979.06 17570.96
1994/09/30 16894.78 17409.29
1994/10/31 16895.81 17406.92
1994/11/30 16944.25 17327.93
1994/12/31 17012.86 17389.28
1995/01/31 17197.79 17682.34
1995/02/28 17410.41 18049.13
1995/03/31 17499.38 18152.35
1995/04/30 17671.90 18376.43
1995/05/31 18103.58 18932.01
1995/06/30 18210.69 19058.93
1995/07/31 18200.95 19061.56
1995/08/31 18347.03 19235.08
1995/09/30 18476.21 19374.37
1995/10/31 18661.66 19590.29
1995/11/30 18880.46 19847.81
1995/12/31 19087.36 20055.82
1996/01/31 19245.12 20228.82
1996/02/29 19007.36 19991.31
1996/03/31 18933.74 19888.36
1996/04/30 18838.06 19818.05
1996/05/31 18815.06 19803.04
1996/06/30 18987.35 20013.43
1996/07/31 19037.11 20072.94
1996/08/31 19069.02 20088.74
1996/09/30 19277.78 20368.63
1996/10/31 19582.77 20728.58
1996/11/30 19808.67 21001.90
1996/12/31 19701.01 20867.34
1997/01/31 19784.34 20948.44
1997/02/28 19803.00 20988.47
1997/03/31 19679.75 20843.65
1997/04/30 19896.89 21088.52
1997/05/31 20021.56 21263.63
1997/06/30 20219.79 21457.69
1997/07/31 20590.56 21894.25
1997/08/31 20512.06 21784.19
1997/09/30 20724.00 22037.50
1997/10/31 20920.84 22281.58
1997/11/28 20959.68 22330.82
IMATRL PRASUN SHR__CHT 19971130 19971211 155758 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
PERIODS ENDED NOVEMBER 30, 1997 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
ADVISOR INTERMEDIATE MUNICIPAL INCOME - 6.21% 5.48% 6.68%
CLASS T
ADVISOR INTERMEDIATE MUNICIPAL INCOME - 3.29% 4.89% 6.38%
CLASS T (INCL. MAX. 2.75% SALES CHARGE)
LEHMAN BROTHERS 1-17 YEAR MUNICIPAL 6.45% N/A N/A
BOND INDEX
INTERMEDIATE MUNICIPAL DEBT FUNDS AVERAGE 5.50% 6.12% 7.16%
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
PERIODS ENDED NOVEMBER 30, 1997 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
ADVISOR INTERMEDIATE MUNICIPAL INCOME - 6.48% 5.75% 6.82%
INSTITUTIONAL CLASS
LEHMAN BROTHERS 1-17 YEAR MUNICIPAL 6.45% N/A N/A
BOND INDEX
INTERMEDIATE MUNICIPAL DEBT FUNDS AVERAGE 5.50% 6.12% 7.16%
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 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, More 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.
FUND FACTS
GOAL: to seek the highest level
of income exempt from federal
income taxes that can be
obtained consistent with the
preservation of capital
START DATE: September 19, 1985
SIZE: as of November 30,
1997, more than $63 million
MANAGER: David Murphy,
since 1995; joined Fidelity
in 1989
(checkmark)
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 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
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
CALIFOR
NIA 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>
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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>
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CLASS A EFFECTIVE DATE CLASS T EFFECTIVE DATE CLASS B EFFECTIVE DATE CLASS C EFFECTIVE 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.
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 October
31, 1997. The SAI has been filed with the Securities and Exchange
Commission (SEC) and is available along with other related materials
on the SEC's Internet Web site (http://www.sec.gov). The SAI is
incorporated herein by reference (legally forms a part of the
prospectus). For a free copy of either document, 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-0297-01
GROWTH FUNDS: Classes
Fidelity Advisor TechnoQuant(trademark) 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
FIDELITY ADVISOR FUNDS
CLASS A, CLASS T, CLASS B,
AND CLASS 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 High Income Municipal Fund A,T,B,C Fidelity Advisor
Municipal Bond Fund A,T,B Fidelity Advisor Intermediate Municipal
Income Fund A,T,B,C Fidelity Advisor Short-Intermediate Municipal
A,T
Income Fund
STATE MUNICIPAL FUNDS:
Fidelity Advisor California Municipal Income A,T,B Fund
Fidelity Advisor New York Municipal Income Fund A,T,B
PROSPECTUS
OCTOBER 31, 1997(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON,
MA 02109
CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
KEY FACTS WHO MAY WANT TO INVEST
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-SHELTERED RETIREMENT PLANS.
HOW TO BUY SHARES OPENING AN ACCOUNT AND MAKING ADDITIONAL
INVESTMENTS.
HOW TO SELL SHARES TAKING MONEY OUT AND CLOSING YOUR ACCOUNT.
INVESTOR SERVICES SERVICES TO HELP YOU MANAGE YOUR ACCOUNT.
SHAREHOLDER AND ACCOUNT POLICIES DIVIDENDS, CAPITAL GAINS, AND TAXES
TRANSACTION DETAILS SHARE PRICE CALCULATIONS AND THE TIMING OF
PURCHASES AND REDEMPTIONS.
EXCHANGE RESTRICTIONS
SALES CHARGE REDUCTIONS AND WAIVERS
APPENDIX A
APPENDIX B
</TABLE>
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.
TechnoQuant(Trademark) 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, High Income
Municipal, Municipal Bond, and Intermediate Municipal Income are
diversified funds.
Strategic Income, Short-Intermediate Municipal Income, California
Municipal Income, and New York 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.
High Income Municipal, Municipal Bond, Intermediate Municipal Income,
and Short-Intermediate Municipal Income are designed for investors in
higher tax brackets who seek high current income that is free from
federal income tax. Municipal Bond, Intermediate Municipal Income, and
Short-Intermediate Municipal Income also invest consistent with
consideration of capital preservation. High Income Municipal may
invest in lower-quality municipal securities which involve greater
risk than investment-grade securities.
California Municipal Income is designed for investors in higher tax
brackets who seek high current income that is free from federal and
California personal income taxes. New York Municipal Income is
designed for investors in higher tax brackets who seek high current
income that is free from federal and New York State and City personal
income taxes.
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.
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 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. 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.
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>
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A CLASS T CLASS B CLASS C
MAXIMUM SALES CHARGE (AS A % OF OFFERING PRICE)
ON PURCHASES OF: TECHNOQUANT GROWTH, MID CAP,
EQUITY GROWTH, GROWTH OPPORTUNITIES, STRATEGIC 5.75% 3.50% NONE NONE
OPPORTUNITIES*, LARGE CAP, GROWTH & INCOME, EQUITY
INCOME, AND BALANCED (THE EQUITY FUNDS)
MAXIMUM SALES CHARGE (AS A % OF OFFERING PRICE)
ON PURCHASES OF: HIGH YIELD, STRATEGIC INCOME,
MORTGAGE SECURITIES*, GOVERNMENT INVESTMENT, HIGH 4.75% 3.50% NONE NONE
INCOME MUNICIPAL, MUNICIPAL BOND*, CALIFORNIA
MUNICIPAL INCOME*, AND NEW YORK MUNICIPAL INCOME*
(THE BOND FUNDS)
MAXIMUM SALES CHARGE (AS A % OF OFFERING PRICE)
ON PURCHASES OF: INTERMEDIATE BOND AND INTERMEDIATE
MUNICIPAL INCOME (THE INTERMEDIATE-TERM BOND 3.75% 2.75% NONE NONE
FUNDS)
MAXIMUM SALES CHARGE (AS A % OF OFFERING PRICE) ON
PURCHASES OF: SHORT FIXED-INCOME AND SHORT-INTERMEDIATE
MUNICIPAL INCOME* (THE SHORT-TERM BOND 1.50% 1.50% ** NONE
FUNDS)
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]
S ALES CHARGE ON REINVESTED DISTRIBUTIONS NONE NONE NONE NONE
ANNUAL ACCOUNT MAINTENANCE FEE $12.00 $12.00 $12.00 $12.00
(FOR ACCOUNTS UNDER $2,500)
</TABLE>
* FUND DOES NOT OFFER CLASS C SHARES.
** FUNDS DO NOT OFFER CLASS B SHARES.
[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 ).
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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
EQUITY FUNDS
OPERATING EXPENSES CLASS A CLASS T CLASS B CLASS C
TECHNOQUANT MANAGEMENT FEE 0.60%[A] 0.60%[A] 0.60%[A] 0.61%[A]
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%[A] 0.90%[A] 0.90%[A] 0.89%[A]
TOTAL OPERATING EXPENSES 1.75% 2.00% 2.50% 2.50%
MID CAP MANAGEMENT FEE 0.60% [A] 0.60% 0.60% 0.60% [A ]
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 C) 0.52%[A] 0.50% 0.78% 0. 90 %[A]
TOTAL OPERATING EXPENSES 1.37% 1.60% 2.38% 2. 50 %
EQUITY MANAGEMENT FEE 0.61% [A] 0.61% 0.61% [A] 0.61% [A]
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 C) 0.33%[A] 0.25% 0.34%[A] 0.34%[A]
TOTAL OPERATING EXPENSES 1.19% 1.36% 1.95% 1.95%
GROWTH MANAGEMENT FEE 0.61% [A] 0.61% 0.61% [A] 0.61% [A]
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 (AFTER REIMBURSEMENT
CLASS A, CLASS B, AND CLASS C) 0.24%[A] 0.23% 0.24%[A] 0 .24%[A]
TOTAL OPERATING EXPENSES 1.10% 1.34% 1.85% 1.85%
STRATEGIC MANAGEMENT FEE 0.4 1%[B] 0.4 8 % 0.4 8 % *
OPPORTUNITIES
12B-1 FEE (INCLUDING 0.25% SHAREHOLDER
SERVICE FEE FOR CLASS B SHARES) 0.25% 0.50% 1.00% *
OTHER EXPENSES 0. 83 %[B] 0.3 0 % 0.32% *
TOTAL OPERATING EXPENSES 1. 49 % 1.28% 1.80% *
LARGE CAP MANAGEMENT FEE 0.60% [A] 0.60% 0.60% 0.60% [A]
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%[A] 0. 90 % 0. 90 % 0.90%[A]
TOTAL OPERATING EXPENSES 1.75% 2.00% 2. 50 % 2.50%
GROWTH
& MANAGEMENT FEE 0.50%[A] 0.50%[A] 0.50%[A] 0.51%[A]
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) 0.75%[A] 0.56%[A] 0.75%[A] 0. 7 4%[A]
TOTAL OPERATING EXPENSES 1.50% 1.56% 2.25% 2. 2 5%
EQUITY MANAGEMENT FEE 0.50% [A] 0.50% 0.50% 0.50% [A]
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 C) 0.35%[A] 0.27% 0.31% 0.3 5 %[A]
TOTAL OPERATING EXPENSES 1.10% 1.27% 1.81% 1.8 5 %
BALANCED MANAGEMENT FEE 0.45% [A] 0.45% 0.45% [A] ]
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%[A] 0.26% 0.35%[A] 0.34 %[A]
TOTAL OPERATING EXPENSES 1.05% 1.21% 1.80% 1.80%
</TABLE>
* FUND DOES NOT OFFER CLASS C SHARES.
[A] BASED ON ESTIMATED EXPENSES FOR FIRST YEAR.
[B] SIX MONTHS ENDED JUNE 30, 1997.
TAXABLE INCOME FUNDS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
OPERATING EXPENSES CLASS A CLASS T CLASS B CLASS C
HIGH YIELD MANAGEMENT FEE 0.60% [A] 0.60% 0.60% 0.60% [A]
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 0.37%[A] 0.27% 0.29% 0.3 1 %[A]
TOTAL OPERATING EXPENSES 1.12% 1.12% 1.79% 1.9 1 %
STRATEGIC MANAGEMENT FEE 0. 60 %[B] 0. 59 % 0. 59 % 0. 60 %[A]
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 ) 0.5 0 %[B] 0.3 9 % 0.3 9 % 0. 50 %[A]
TOTAL OPERATING EXPENSES 1.25% 1.23% 1.88% 2.10 %
MORTGAGE MANAGEMENT FEE 0.4 4 %[A] 0.4 4 %[A] 0.4 4 %[A] *
SECURITIES
12B-1 FEE (INCLUDING 0.25% SHAREHOLDER
SERVICE FEE FOR CLASS B SHARES) 0.15% 0.25% 0.90% *
OTHER EXPENSES (AFTER REIMBURSEMENT) 0.3 1 %[A] 0.3 1 %[A] 0.3 1 %[A] *
TOTAL OPERATING EXPENSES 0.90% 1.00% 1.65% *
GOVERNMENT MANAGEMENT FEE 0.45% [A] 0.45% 0.45% 0.45% [A]
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
CLASS A, CLASS B, AND CLASS C) 0.30%[A] 0.30% 0.30% 0.30%[A]
TOTAL OPERATING EXPENSES 0.90% 1.00% 1.65% 1.75%
INTERMEDIATE MANAGEMENT FEE 0.45% [A] 0.45% 0.45% 0.44%[A]
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) 0.30%[A] 0.27% 0.30% 0.31%[A ]
TOTAL OPERATING EXPENSES 0.90% 0.97% 1.65% 1.75%
SHORT MANAGEMENT FEE 0.45% [A] 0.45% ** 0.45% [A]
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) 0.30%[A] 0.28% ** 0.30%[A]
TOTAL OPERATING EXPENSES 0.90% 0.88% ** 1.75%
</TABLE>
* FUND DOES NOT OFFER CLASS C SHARES.
** FUND DOES NOT OFFER CLASS B SHARES.
[A] BASED ON ESTIMATED EXPENSES FOR FIRST YEAR.
[B] SIX MONTHS ENDED JUNE 30, 1997.
MUNICIPAL FUNDS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
OPERATING EXPENSES CLASS A CLASS T CLASS B CLASS C
HIGH INCOME MANAGEMENT FEE 0.40% [A] 0.40% 0.40% 0.39%[A]
MUNICIPAL
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) 0.35%[A] 0.24% 0.27% 0.36%[A]
TOTAL OPERATING EXPENSES 0.90% 0.89% 1.57% 1.75%
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) 0.35%[A] 0.35% 0.35% *
TOTAL OPERATING EXPENSES 0.90% 1.00% 1.65% *
INTERMEDIATE MANAGEMENT FEE 0.40% [A] 0.40% 0.40% 0.39%[A ]
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) 0.35%[A] 0.35% 0.35% 0.36%[A]
TOTAL OPERATING EXPENSES 0.90% 1.00% 1.65% 1.75%
SHORT- MANAGEMENT FEE 0.40% [A] 0.40% ** *
INTERMEDIATE
MUNICIPAL
INCOME
12B-1 FEE (DISTRIBUTION FEE) 0.15% 0.15% ** *
OTHER EXPENSES (AFTER REIMBURSEMENT) 0.35%[A] 0.35% ** *
TOTAL OPERATING EXPENSES 0.90% 0.90% ** *
</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) 0.35%[A] 0.35% 0.35% *
TOTAL OPERATING EXPENSES 0.90% 1.00% 1.65% *
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) 0.35%[A] 0.35% 0.35% *
TOTAL OPERATING EXPENSES 0.90% 1.00% 1.65% *
</TABLE>
* FUND DOES NOT OFFER CLASS C SHARES.
** FUND DOES NOT OFFER CLASS B SHARES.
[A] BASED ON ESTIMATED EXPENSES FOR FIRST YEAR.
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>
<S> <C> <C> <C>
CLASS A CLASS T CLASS B
MID CAP (DAGGER) -- 2.37%
EQUITY GROWTH (DAGGER) 1.34% (DAGGER)
STRATEGIC OPPORTUNITIES 1.48% 1.2 7 % 1. 79 %
CLASS A CLASS T CLASS B
EQUITY INCOME (DAGGER) 1.26% 1.79%
BALANCED (DAGGER) 1.20% (DAGGER)
HIGH YIELD (DAGGER) 1.11% --
STRATEGIC INCOME -- 1.22% 1.87%
GOVERNMENT INVESTMENT (DAGGER) 0.99% --
INTERMEDIATE BOND (DAGGER) 0.96% --
SHORT-INTERMEDIATE MUNICIPAL INCOME (DAGGER) 0.89% *
CALIFORNIA MUNICIPAL INCOME FUND (DAGGER) 0.87% 1.62%
NEW YORK MUNICIPAL INCOME FUND (DAGGER) 0.97% 1.62%
</TABLE>
* FUND DOES NOT OFFER CLASS B SHARES.
(dagger) IMPACT OF CREDITS NOT APPLIED TO FIRST YEAR ESTIMATED
EXPENSES.
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>
<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
TECHNOQU 1 YEAR $74 $55 $75[A] $35[A] $25 $25
ANT
GROWTH
3 YEARS $109 $96 $108[A] $78 $78 $78
MID CAP 1 YEAR $71 $51 $74[A] $3 5 [A] $24 $2 5
3 YEARS $98 $84 $104[A] $7 8 $74 $7 8
5 YEARS $128 $119 $147[A] $1 33 $127 $1 33
10 $213 $218 $249 $2 84 $249 $2 84
YEARS[B
]
EQUITY 1 YEAR $69 $48 $70[A] $30[A] $20 $20
GROWTH
3 YEARS $93 $77 $91[A] $61 $61 $61
5 YEARS $119 $107 $125[A] $105 $105 $105
10 $194 $193 $199 $227 $199 $227
YEARS[B
]
GROWTH 1 YEAR $68 $48 $69[A] $29[A] $19 $19
OPPORTUN
ITIES
3 YEARS $90 $76 $88[A] $58 $58 $58
5 YEARS $115 $106 $120[A] $100 $100 $100
10 $184 $191 $ 188 $217 $ 188 $217
YEARS[B
]
STRATEGIC 1 YEAR $72 $ 48 $68[A] * $18 *
OPPORTUN
ITIES
3 YEARS $102 $74 $87[A] * $57 *
5 YEARS $134 $ 103 $ 117 [A] * $ 97 *
10 $225 $ 184 $ 190 * $ 190 *
YEARS[B
]
LARGE 1 YEAR $74 $55 $75[A] $35[A] $25 $25
CAP
3 YEARS $109 $96 $108[A] $78 $78 $78
5 YEARS $147 $139 $153[A] $133 $133 $133
10 $252 $260 $257 $284 $257 $284
YEARS[B
]
GROWTH 1 YEAR $72 $50 $73[A] $3 3 [A] $23 $2 3
& INCOME
3 YEARS $102 $83 $110[A] $7 0 $70 $7 0
EQUITY 1 YEAR $68 $47 $68[A] $29[A] $18 $19
INCOME
3 YEARS $90 $74 $87[A] $58 $57 $58
5 YEARS $115 $102 $118[A] $ 100 $98 $ 100
10 $184 $183 $185 $21 7 $185 $21 7
YEARS[B
]
BALANCED 1 YEAR $68 $47 $68[A] $28[A] $18 $18
3 YEARS $89 $72 $87[A] $57 $57 $57
5 YEARS $112 $99 $117[A] $97 $97 $97
10 $178 $176 $179 $212 $179 $212
YEARS[B
]
</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.
TAXABLE INCOME 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
HIGH 1 YEAR $58 $46 $68[A] $29[A] $18 $ 19
YIELD
3 YEARS $81 $69 $86[A] $60 $56 $ 60
5 YEARS $106 $95 $117[A] $103 $97 $ 103
10 $177 $167 $185 $22 3 $185 $ 223
YEARS[B
]
STRATEGIC 1 YEAR $55 $47 $69[A] $3 1 [A] $19 $ 21
INCOME
3 YEARS $80 $73 $89[A] $6 6 $59 $ 66
5 YEARS $108 $100 $122[A] $1 13 $102 $ 113
10 $187 $179 $196 $2 43 $196 $243
YEARS[B
]
MORTGAG 1 YEAR $56 $45 $67[A] * $17 *
E
SECURITIES
3 YEARS $75 $66 $82[A] * $52 *
5 YEARS $95 $88 $110[A] * $90 *
10 $153 $153 $166 * $166 *
YEARS[B
]
GOVERNM 1 YEAR $56 $45 $67[A] $28[A] $17 $ 18
ENT
INVESTME
NT
3 YEARS $75 $66 $82[A] $55 $52 $ 55
5 YEARS $95 $88 $110[A] $95 $90 $ 95
10 $153 $153 $166 $ 206 $166 $ 206
YEARS[B
]
INTERMEDI 1 YEAR $46 $37 $47[A] $28[A] $17 $ 18
ATE BOND
3 YEARS $65 $58 $62[A] $ 55 $52 $ 55
5 $85 $80 $90 $ 95 $90 $ 95
YEARS[C
]
10 $144 $143 $166 $ 206 $166 $ 206
YEARS[C
]
SHORT 1 YEAR $24 $24 ** $ 28 [A] ** $ 18
FIXED-INC
OME
3 YEARS $43 $43 ** $ 55 ** $ 55
5 YEARS $64 $63 ** $ 95 ** $ 95
10 $124 $122 ** $ 206 ** $ 206
YEARS
</TABLE>
* 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.
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
HIGH 1 YEAR $56 $44 $66[A] $ 28 [A] $16 $ 18
INCOME
MUNICIPAL
3 YEARS $75 $62 $80[A] $ 55 $50 $ 55
5 YEARS $95 $83 $106[A] $ 95 $86 $ 95
10 $153 $141 $160 $206 $160 $ 206
YEARS[B
]
MUNICIPAL 1 YEAR $56 $45 $67[A] * $17 *
BOND
3 YEARS $75 $66 $82[A] * $52 *
5 YEARS $95 $88 $110[A] * $90 *
10 $153 $153 $166 * $166 *
YEARS[B
]
INTERMEDI 1 YEAR $46 $37 $47 [A] $ 28[A] $17 $ 18
ATE
MUNICIPAL
INCOME
3 YEARS $65 $58 $62 [A] $ 55 $52 $ 55
5 $85 $81 $90 $ 95 $90 $ 95
YEARS[C
]
10 $144 $147 $166 $ 206 $166 $ 206
YEARS[C
]
SHORT-INTE 1 YEAR $24 $24 ** * ** *
RMEDIATE
MUNICIPAL
INCOME
3
YEARS $43 $43 ** * ** *
5
YEARS $64 $64 ** * ** *
10 $124 $124 ** * ** *
YEARS
STATE MUNICIPAL FUNDS
</TABLE>
<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 1 YEAR $56 $45 $67[A] * $17 *
MUNICIPAL
INCOME
3 YEARS $75 $66 $82[A] * $52 *
5 YEARS $ 95 $9 0 $ 110 [A] * $ 90 *
10 $ 153 $ 166 $166 * $ 166 *
YEARS[B
]
NEW 1 YEAR $56 $45 $67[A] * $17 *
YORK
MUNICIPAL
INCOME
3 YEARS $75 $66 $82[A] * $52 *
5 YEARS $95 $88 $110[A] * $90 *
10 $153 $153 $166 * $166 *
YEARS[B
]
</TABLE>
* 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.
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>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A EFFECTIVE
DATE CLASS T EFFECTIVE DATE CLASS B EFFECTIVE DATE CLASS C EFFECTIVE DATE
TECHNOQUANT 1.75% 12/31/96 2.00% 12/31/96 2.50% 12/31/96 2.50% 11/1 /97
GROWTH
MID CAP 1.75% 8/30/96 2.00% 2/20/96 2.50% 2/20/96 2.50% 11/1 /97
EQUITY
GROWTH 1. 20 % 1 1/1/97 1.45 % 1 1/1/97 1.95 % 11/1/97 1.95% 11/1 /97
GROWTH 1. 10 % 11/1/97 1.35 % 11 /1/97 1.85 % 11/1/97 1.85% 11/1 /97
OPPORTUNITIES
STRATEGIC 1.75% 3/1/97 2.00% 3/1/97 2.50% 3/1/97 * *
OPPORTUNITIES
LARGE CAP 1.75% 8/30/96 2.00% 2/20/96 2.50% 2/20/96 2.50% 11/1 /97
GROWTH &
INCOME 1.50% 12/31/96 1.75% 12/31/96 2.25% 12/31/96 2.25% 11/1 /97
EQUITY
INCOME 1. 10 % 11 /1/97 1.35 % 11 /1/97 1.85 % 11 /1/97 1.85% 11/1 /97
BALANCED 1. 05 % 11/1/97 1. 30 % 11/1/97 1.80 % 1 1/1/97 1.80% 11/1 /97
HIGH YIELD 1.25% 8/30/96 1.35% 7/1/95 2.00% 1/1/96 2.10% 11/1 /97
STRATEGIC
INCOME 1.25% 8/30/96 1.35% 10/31/94 2.00% 1/1/96 2.10% 11/1 /97
MORTGAGE
SECURITIES 0.90% 3/1/97 1.00% 3/1/97 1.65% 3/1/97 * *
GOVERNMENT 0.90% 8/30/96 1.00% 7/1/95 1.65% 1/1/96 1.75% 11/1 /97
INVESTMENT
INTERMEDIATE
BOND 0.90% 8/30/96 1.00% 7/1/95 1.65% 1/1/96 1.75% 11/1 /97
SHORT FIXED-
INCOME 0.90% 8/30/96 0.90% 8/30/96 ** ** 1.75% 11/1/97
HIGH INCOME 0.90% 8/30/96 1.00% 7/1/95 1.65% 1/1/96 1.75% 11/1 /97
MUNICIPAL
MUNICIPAL
BOND 0.90% 3/1/97 1.00% 7/1/9 6 1.65% 7/1/96 * *
INTERMED
IATE 0.90% 8/30/96 1.00% 7/1/95 1.65% 1/1/96 1.75% 11/1 /97
MUNICIPAL INCOME
SHORT-INTERMED
IATE 0.90% 8/30/96 0.90% 7/1/95 ** ** * *
MUNICIPAL INCOME
CALIFORNIA
MUNICIPAL 0.90% 8/30/96 1.00% 8/1/95 1.65% 1/1/96 * *
INCOME
NEW YORK
MUNICIPAL 0.90% 8/30/96 1.00% 8/1/95 1.65% 1/1/96 * *
INCOME
</TABLE>
* FUND DOES NOT OFFER CLASS C SHARES.
** FUND DOES NOT OFFER CLASS B 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:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
OTHER EXPENSES TOTAL OPERATING EXPENSES
CLASS A CLASS T CLASS B CLASS C [A] CLASS A CLASS T CLASS B CLASS C[A]
TECHNOQUANT GROWTH 1.37% 0.96% 1.37% 1.33% 2.22% 2.06% 2.97% 2.94%
[A]
MID CAP (DAGGER) (DAGGER) (DAGGER) 1.11% (DAGGER) (DAGGER) (DAGGER) 2.71%
EQUITY GROWTH (DAGGER) (DAGGER) (DAGGER) 0.55% (DAGGER) (DAGGER) (DAGGER) 2.16%
GROWTH OPPORTUNITIES 0.28%[A] (DAGGER) 0.32%[A] 0.29% 1.14%[A] (DAGGER) 1.93%[A] 1.90 %
LARGE CAP 0.96% [A] 1.34% 2.35% 1.49% 1.81%[A] 2.44% 3.95% 3.09 %
GROWTH & 0.86% (DAGGER) (DAGGER) 0.91% 1.61% (DAGGER) (DAGGER) 2.42%
INCOME[A]
EQUITY INCOME (DAGGER) (DAGGER) (DAGGER) 0.38% (DAGGER) (DAGGER) (DAGGER) 1.88%
BALANCED 0.40%[A] (DAGGER) 0.44%[A] 0.93% 1.10%[A] (DAGGER) 1.89%[A] 2.39%
STRATEGIC INCOME 4.21 % (DAGGER) (DAGGER) 0.84% 4.96% (DAGGER) (DAGGER) 2.44 %
MORTGAGE 2.26% 0.54% 1.09% * 2.85% 1.23% 2.43% *
SECURITIES[A]
GOVERNMENT 0.72%[A] (DAGGER) 0.43% 2.34% 1.32%[A] (DAGGER) 1.78% 3.79%
INVESTMENT
INTERMEDIATE BOND 0.48%[A] (DAGGER) 0.44% 1.78% 1.08%[A] (DAGGER) 1.79% 3.22%
SHORT FIXED-INCOME 0.50%[A] (DAGGER) ** 1.28% 1.10%[A] (DAGGER) ** 2.73%
HIGH INCOME 0.48%[A] (DAGGER) (DAGGER) 1.54% 1.03%[A] (DAGGER) (DAGGER) 2.93%
MUNICIPAL
MUNICIPAL BOND 2.80%[A] 0.37% 0.52% * 3.35%[A] 1.02% 1.82% *
INTERMEDIATE 1.00%[A] 0.39% 0.56% 1.39% 1.55%[A] 1.04% 1.86% 2.78%
MUNICIPAL INCOME
SHORT-INTERMEDIATE 1.29%[A] 0.60% ** * 1.84%[A] 1.15% ** *
MUNICIPAL INCOME
CALIFORNIA MUNICIPAL 2.01%[A] 0.38% 0.95% * 2.56%[A] 1.03% 2.25% *
INCOME
NEW YORK MUNICIPAL 1.95%[A] 1.97% 2.42% * 2.50%[A] 2.62% 3.72% *
INCOME
</TABLE>
* FUND DOES NOT OFFER CLASS C SHARES.
** FUND DOES NOT OFFER CLASS B 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.
Expenses eligible for reimbursement do not include interest, taxes,
brokerage commissions, and extraordinary expenses.
FINANCIAL HIGHLIGHTS
The financial highlights tables that follow for certain funds contain
annual information which has been audited by Coopers & Lybrand
L.L.P., independent accountants. The financial highlights tables
that follow for Mortgage Securities have been audited by Price
Waterhouse LLP , 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, Municipal Bond, Short-Intermediate Municipal
Income, California Municipal Income, and New York Municipal Income) is
expected to commence operations on or about November 3 , 1997.
TECHNOQUANT - CLASS A
1.SELECTED PER-SHARE DATA AND RATIOSD 1997G
2.NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
3.INCOME FROM INVESTMENT OPERATIONS
4. NET INVESTMENT INCOME (LOSS) (.02)
5. NET REALIZED AND UNREALIZED GAIN (LOSS) .02
6. TOTAL FROM INVESTMENT OPERATIONS .00
7.NET ASSET VALUE, END OF PERIOD $ 10.00
8.TOTAL RETURNB ,C 0.00%
9.NET ASSETS, END OF PERIOD (000 OMITTED) $ 3,957
10.RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.75%A,E
11.RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET (.42)%A
ASSETS
12.PORTFOLIO TURNOVER 398%A
13.AVERAGE COMMISSION RATEF $ .0281
TECHNOQUANT - CLASS T
14.SELECTED PER-SHARE DATA AND RATIOSD 1997H
15.NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
16.INCOME FROM INVESTMENT OPERATIONS
17. NET INVESTMENT INCOME (LOSS) (.03)
18. NET REALIZED AND UNREALIZED GAIN (LOSS) .02
19. TOTAL FROM INVESTMENT OPERATIONS (.01)
20.NET ASSET VALUE, END OF PERIOD $ 9.99
21.TOTAL RETURNB,C (.10)%
22.NET ASSETS, END OF PERIOD (000 OMITTED) $ 11,904
23.RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.00%A,E
24.RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET (.67)%A
ASSETS
25.PORTFOLIO TURNOVER 398%A
26.AVERAGE COMMISSION RATEF $ .0281
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
SHARES) TO MAY 31, 1997 (UNAUDITED).
H FOR THE PERIOD DECEMBER 31, 1996 (COMMENCEMENT OF SALE OF CLASS T
SHARES) TO MAY 31, 1997 (UNAUDITED).
KEY FACTS - CONTINUED
TECHNOQUANT - CLASS B
27.
28.SELECTED PER-SHARE DATA AND RATIOSD 1997G
29.NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
30.INCOME FROM INVESTMENT OPERATIONS
31. NET INVESTMENT INCOME (LOSS) (.05)
32. NET REALIZED AND UNREALIZED GAIN (LOSS) .01
33. TOTAL FROM INVESTMENT OPERATIONS (.04)
34.NET ASSET VALUE, END OF PERIOD $ 9.96
35.TOTAL RETURNB,C (.40)%
36.NET ASSETS, END OF PERIOD (000 OMITTED) $ 4,973
37.RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.50%A,E
38.RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET (1.17)%A
ASSETS
39.PORTFOLIO TURNOVER 398%A
40.AVERAGE COMMISSION RATEF $ .0281
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 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 B
SHARES) TO MAY 31, 1997 (UNAUDITED).
MID CAP - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C>
41. YEAR ENDED
NOVEMBER 30
42.SELECTED PER-SHARE DATA AND RATIOSD 1997J 1996H
43.NET ASSET VALUE, BEGINNING OF PERIOD $ 11.70 $ 10.74
44.INCOME FROM INVESTMENT OPERATIONS
45. NET INVESTMENT INCOME (LOSS) (.02) (.01)
46. NET REALIZED AND UNREALIZED GAIN (LOSS) .69 .97
47. TOTAL FROM INVESTMENT OPERATIONS .67 .96
48.LESS DISTRIBUTIONS
49. IN EXCESS OF NET INVESTMENT INCOME (.01) --
50. FROM NET REALIZED GAIN (.20) --
51. TOTAL DISTRIBUTIONS (.21) --
52.NET ASSET VALUE, END OF PERIOD $ 12.16 $ 11.70
53.TOTAL RETURNB,C 5.87% 8.94%
54.NET ASSETS, END OF PERIOD (000 OMITTED) $ 2,257 $ 1,239
55.RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.60%A,E 1.56%A,E
56.RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE 1.55%A,F 1.56%A
REDUCTIONS
57.RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET (.44)%A (.33)%A
ASSETS
58.PORTFOLIO TURNOVER 229%A 101%A
59.AVERAGE COMMISSION RATEG $ .0388 $ .0382
</TABLE>
MID CAP - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C>
60. YEAR ENDED
NOVEMBER 30
61.SELECTED PER-SHARE DATA AND RATIOSD 1997J 1996I
62.NET ASSET VALUE, BEGINNING OF PERIOD $ 11.70 $ 10.00
63.INCOME FROM INVESTMENT OPERATIONS
64. NET INVESTMENT INCOME (LOSS) (.02) (.03)
65. NET REALIZED AND UNREALIZED GAIN (LOSS) .70 1.73
66. TOTAL FROM INVESTMENT OPERATIONS .68 1.70
67.LESS DISTRIBUTIONS
68. FROM NET REALIZED GAIN (.18) --
69.NET ASSET VALUE, END OF PERIOD $ 12.20 $ 11.70
70.TOTAL RETURNB,C 5.94% 17.00%
71.NET ASSETS, END OF PERIOD (000 OMITTED) $ 254,825 $ 187,040
72.RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.51%A 1.60%A
73.RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE 1.45%A,F 1.60%A
REDUCTIONS
74.RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET (.33)%A (.37)%A
ASSETS
75.PORTFOLIO TURNOVER 229%A 101%A
76.AVERAGE COMMISSION RATEG $ .0388 $ .0382
</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 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.
J SIX MONTHS ENDED MAY 31, 1997 (UNAUDITED)
MID CAP - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C>
77. YEAR ENDED
NOVEMBER 30
78.SELECTED PER-SHARE DATA AND RATIOSD 1997H 1996G
79.NET ASSET VALUE, BEGINNING OF PERIOD $ 11.61 $ 10.00
80.INCOME FROM INVESTMENT OPERATIONS
81. NET INVESTMENT INCOME (LOSS) (.05) (.10)
82. NET REALIZED AND UNREALIZED GAIN (LOSS) .69 1.71
83. TOTAL FROM INVESTMENT OPERATIONS .64 1.61
84.LESS DISTRIBUTIONS
85. FROM NET REALIZED GAIN (.15) --
86.NET ASSET VALUE, END OF PERIOD $ 12.10 $ 11.61
87.TOTAL RETURNB,C 5.61% 16.10%
88.NET ASSETS, END OF PERIOD (000 OMITTED) $ 40,527 $ 32,727
89.RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.03%A 2.38%A
90.RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE 1.98%A,E 2.37%A,E
REDUCTIONS
91.RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET (.85)%A (1.14)%A
ASSETS
92.PORTFOLIO TURNOVER 229%A 101%A
93.AVERAGE COMMISSION RATEF $ .0388 $ .0382
</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 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 SIX MONTHS ENDED MAY 31, 1997 (UNAUDITED)
EQUITY GROWTH - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C>
94. YEAR ENDED
NOVEMBER 30
95.SELECTED PER-SHARE DATA AND RATIOSB 1997M 1996F
96.NET ASSET VALUE, BEGINNING OF PERIOD $ 44.80 $ 39.47
97.INCOME FROM INVESTMENT OPERATIONS
98. NET INVESTMENT INCOME (LOSS) (.01) .04
99. NET REALIZED AND UNREALIZED GAIN (LOSS) 2.75 5.29
100. TOTAL FROM INVESTMENT OPERATIONS 2.74 5.33
101.LESS DISTRIBUTIONS
102. FROM NET INVESTMENT INCOME (.36) --
103. FROM NET REALIZED GAIN (1.23) --
104. TOTAL DISTRIBUTIONS (1.59) --
105.NET ASSET VALUE, END OF PERIOD $ 45.95 $ 44.80
106.TOTAL RETURNB,C 6.43% 13.50%
107.NET ASSETS, END OF PERIOD (000 OMITTED) $ 13,170 $ 4,423
108.RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.52%A,G 1.52%A,D,G
109.RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE 1.49%A,H 1.50%A,H
REDUCTIONS
110.RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET (.32)%A .38%A
ASSETS
111.PORTFOLIO TURNOVER 139%A 76%
112.AVERAGE COMMISSION RATEI $ .0425 $ .0414
</TABLE>
EQUITY GROWTH - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
113. YEARS ENDED NOVEMBER 30
114.SELECTED 1997M 1996 1995 1994K 1993 1992J
PER-SHARE DATA AND
RATIOS
115.NET ASSET VALUE, $ 44.81 $ 39.83 $ 28.52 $ 29.50 $ 26.33 $ 23.78
BEGINNING OF PERIOD
116.INCOME FROM
INVESTMENT
OPERATIONS
117. NET INVESTMENT (.01)E .22E .06 .08 (.07)E .01
INCOME (LOSS)
118. NET REALIZED 2.81 6.90 11.54 .39 3.82 2.54
AND UNREALIZED GAIN
(LOSS)
119. TOTAL FROM 2.80 7.12 11.60 .47 3.75 2.55
INVESTMENT
OPERATIONS
120.LESS
DISTRIBUTIONS
121. FROM NET (.17) (.03)L (.08) - (.08) --
INVESTMENT INCOME
122. FROM NET (1.23) (2.11)L (.16) (1.45) (.50) --
REALIZED GAIN
123. IN EXCESS OF NET -- -- (.05) -- -- --
REALIZED GAIN
124. TOTAL (1.40) (2.14) (.29) (1.45) (.58) --
DISTRIBUTIONS
125.NET ASSET VALUE, $ 46.21 $ 44.81 $ 39.83 $ 28.52 $ 29.50 $ 26.33
END OF PERIOD
126.TOTAL RETURNB,C 6.53% 19.00% 41.11% 1.58% 14.52% 10.72%
127.NET ASSETS, END $ 3,801,250 $ 3,536,973 $ 2,051,429 $ 874,172 $ 377,894 $ 22,655
OF PERIOD (000
OMITTED)
128.RATIO OF 1.33%A 1.36% 1.55% 1.71% 1.85% 1.47%A
EXPENSES TO AVERAGE
NET ASSETS
129.RATIO OF 1.30%A,H 1.34%H 1.54%H 1.70%H 1.84%H 1.47%A
EXPENSES TO AVERAGE
NET ASSETS AFTER
EXPENSE REDUCTIONS
130.RATIO OF NET (.12)%A .54% .21% .15% (.24)% .25%A
INVESTMENT INCOME
(LOSS) TO AVERAGE NET
ASSETS
131.PORTFOLIO 139%A 76% 97% 137% 160% 240%
TURNOVER
132.AVERAGE $ .0425 $ .0414
COMMISSION RATEI
</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 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 EFFECTIVE DECEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION
93-2, "DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION
OF INCOME, CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY
INVESTMENT COMPANIES." AS A RESULT, NET INVESTMENT INCOME PER SHARE
MAY REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX
DIFFERENCES.
L THE AMOUNTS SHOWN REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK
AND TAX DIFFERENCES.
M SIX MONTHS ENDED MAY 31, 1997 (UNAUDITED)
EQUITY GROWTH - CLASS B
133.SELECTED PER-SHARE DATA AND RATIOSD 1997E
134.NET ASSET VALUE, BEGINNING OF PERIOD $ 41.81
135.INCOME FROM INVESTMENT OPERATIONS
136. NET INVESTMENT INCOME (LOSS) (.02)
137. NET REALIZED AND UNREALIZED GAIN (LOSS) 4.08
138. TOTAL FROM INVESTMENT OPERATIONS 4.06
139.LESS DISTRIBUTIONS
140. FROM NET REALIZED GAIN (.03)
141.NET ASSET VALUE, END OF PERIOD $ 45.84
142.TOTAL RETURNB,C 9.72%
143.NET ASSETS, END OF PERIOD (000 OMITTED) $ 26,147
144.RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.17%A
145.RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE 2.13%A,F
REDUCTIONS
146.RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET (.99)%A
ASSETS
147.PORTFOLIO TURNOVER 139%A
148.AVERAGE COMMISSION RATEG $ .0425
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 MAY 31, 1997 (UNAUDITED).
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.
<TABLE>
<CAPTION>
<S> <C> <C>
GROWTH OPPORTUNITIES - CLASS A
149. YEAR ENDED
OCTOBER 31
150.SELECTED PER-SHARE DATA AND RATIOSD 1997M 1996B
151.NET ASSET VALUE, BEGINNING OF PERIOD $ 35.39 $ 32.86
152.INCOME FROM INVESTMENT OPERATIONS
153. NET INVESTMENT INCOME .29 .09
154. NET REALIZED AND UNREALIZED GAIN (LOSS) 3.40 2.44
155. TOTAL FROM INVESTMENT OPERATIONS 3.69 2.53
156.LESS DISTRIBUTIONS
157. FROM NET INVESTMENT INCOME (.72) --
158. FROM NET REALIZED GAIN (1.44) --
159. TOTAL DISTRIBUTIONS (2.16) --
160.NET ASSET VALUE, END OF PERIOD $ 36.92 $ 35.39
161.TOTAL RETURNB,C 10.65% 7.70%
162.NET ASSETS, END OF PERIOD (000 OMITTED) $ 52,928 $ 10,185
163.RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.15%A 1.48%A,F
164.RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE 1.14%A,G 1.47%A,G
REDUCTIONS
165.RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 1.62%A 1.74%A
166.PORTFOLIO TURNOVER 38%A 33%
167.AVERAGE COMMIISSION RATEH $ .0471 $ .0401
</TABLE>
GROWTH OPPORTUNITIES - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
168. YEARS ENDED OCTOBER 31
169.SELECTE 1997M 1996 1995 1994I 1993 1992 1991 1990 1989 1988J
D PER-SHARE
DATA AND
RATIOS
170.NET $ 35.41 $ 30.89 $ 26.62 $ 25.39 $ 21.14 $ 20.58 $ 12.99 $ 16.53 $ 14.27 $ 10.00
ASSET VALUE,
BEGINNING OF
PERIOD
171.INCOME
FROM
INVESTMENT
OPERATIONS
172. NET .28D .61D .39 .22 .08 .14 .06 .18K .02 .05
INVESTMENT
INCOME
173. NET 3.39 4.72 5.31 1.92 5.56 2.04 7.70 (2.50) 3.03 4.22
REALIZED AND
UNREALIZED
GAIN (LOSS)
174. TOTAL 3.67 5.33 5.70 2.14 5.64 2.18 7.76 (2.32) 3.05 4.27
FROM
INVESTMENT
OPERATIONS
175.LESS
DISTRIBUTIONS
176. FROM (.54) (.41) (.27) (.07) (.13) (.09) (.17) (.05) (.03) --
NET
INVESTMENT
INCOME
177. FROM (1.44) (.40) (1.16) (.84) (1.26) (1.53) - (1.17) (.76) --
NET REALIZED
GAIN
178. TOTAL (1.98) (.81) (1.43) (.91) (1.39) (1.62) (.17) (1.22) (.79) --
DISTRIBUTIONS
179.NET $ 37.10 $ 35.41 $ 30.89 $ 26.62 $ 25.39 $ 21.14 $ 20.58 $ 12.99 $ 16.53 $ 14.27
ASSET VALUE,
END OF PERIOD
180.TOTAL 10.56% 17.61% 22.88% 8.71% 28.11% 12.09% 60.25% (15.05)% 22.69% 42.70%
RETURNB,C
181.NET $ 16,369,762 $ 14,314,950 $ 9,690,992 $ 4,598,668 $ 2,054,988 $ 580,595 $ 213,095 $ 51,122 $ 34,351 $8,097
ASSETS, END
OF PERIOD
(000
OMITTED)
182.RATIO OF 1.22%A 1.34% 1.59% 1.63% 1.65% 1.60% 1.73% 2.00% 2.45% 2.52%A,L
EXPENSES TO
AVERAGE NET
ASSETS
183.RATIO OF 1.21%A,G 1.34% 1.58%G 1.62%G 1.64%G 1.60% 1.73% 2.00% 2.45% 2.52%A
EXPENSES TO
AVERAGE
NET ASSETS
AFTER
EXPENSE
REDUCTIONS
184.RATIO OF 1.57%A 1.88% 1.56% 1.12% .43% .80% .47% 1.49% .31% .82%A
NET
INVESTMENT
INCOME TO
AVERAGE NET
ASSETS
185.PORTFOLI 38%A 33% 39% 43% 69% 94% 142% 136% 163% 143%A
O TURNOVER
186.AVERAG $ .0471 $ .0401
E
COMMISSION
RATEH
</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 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 EFFECTIVE NOVEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION
93-2, "DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION
OF INCOME, CAPTIAL 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.
J FOR THE PERIOD NOVEMBER 18, 1987 (COMMENCEMENT OF OPERATIONS) TO
OCTOBER 31, 1988.
K NET INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND WHICH
AMOUNTED TO $.09 PER SHARE.
L EXPENSES WERE LIMITED IN ACCORDANCE WITH A STATE EXPENSE LIMITATION.
WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE BEEN
HIGHER.
M SIX MONTHS ENDED APRIL 30, 1997 (UNAUDITED)
GROWTH OPPORTUNITIES - CLASS B
187.SELECTED PER-SHARE DATA AND RATIOSD 1997F
188.NET ASSET VALUE, BEGINNING OF PERIOD $ 37.62
189.INCOME FROM INVESTMENT OPERATIONS
190. NET INVESTMENT INCOME .15
191. NET REALIZED AND UNREALIZED GAIN (LOSS) (.69)
192. TOTAL FROM INVESTMENT OPERATIONS (.54)
193.NET ASSET VALUE, END OF PERIOD $ 37.08
194.TOTAL RETURNB,C (1.44)%
195.NET ASSETS, END OF PERIOD (000 OMITTED) $ 70,791
196.RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.81%A
197.RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE 1.79%A,G
REDUCTIONS
198.RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS .90%A
199.PORTFOLIO TURNOVER 38%A
200.AVERAGE COMMISSION RATEE $ .0471
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 APRIL 30, 1997 (UNAUDITED).
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
STRATEGIC OPPORTUNITIES - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C>
201. YEARS ENDED
DECEMBER 31
202.SELECTED PER-SHARE DATA AND RATIOSB 1997N 1996K
203.NET ASSET VALUE, BEGINNING OF PERIOD $ 22.51 $ 23.48
204.INCOME FROM INVESTMENT OPERATIONS
205. NET INVESTMENT INCOME (LOSS) (.04) .08
206. NET REALIZED AND UNREALIZED GAIN (LOSS) 2.86 1.26
207. TOTAL FROM INVESTMENT OPERATIONS 2.82 1.34
208.LESS DISTRIBUTIONS
209. FROM NET INVESTMENT INCOME -- (.37)
210. FROM NET REALIZED GAIN (.87) (1.94)
211. TOTAL DISTRIBUTIONS (.87) (2.31)
212.NET ASSET VALUE, END OF PERIOD $ 24.46 $ 22.51
213.TOTAL RETURNB,C 12.88% 5.80%
214.NET ASSETS, END OF PERIOD (000 OMITTED) $ 919 $ 638
215.RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.49%A,G .99%A,J
216.RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE 1.48%A,H .97%A,H
REDUCTIONS
217.RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET (.40)%A 1.00%A
ASSETS
218.PORTFOLIO TURNOVER 41%A 151%
219.AVERAGE COMMISSION RATEI $ .0420 $ .0409
</TABLE>
STRATEGIC OPPORTUNITIES - CLASS T
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
YEARS ENDED DECEMBER 31 YEARS ENDED SEPTEMBER 30
221.SELECTE
1997N 1996 1995 1994L 1994F 1993M 1992 1991 1990 1989 1988 1987
D PER-SHARE
DATA AND
RATIOS
222.NET
$ 22.69 $ 24.88 $ 18.70 $ 19.96 $ 22.52 $ 19.53 $ 21.38 $ 17.21 $ 19.55 $ 15.53 $ 19.06 $ 16.71
ASSET VALUE,
BEGINNING OF
PERIOD
223.INCOME
FROM
INVESTMENT
OPERATIONS
224. NET
(.02)E .17E .39 .10E .39E .33 .61 .66 .70 .50 .42 .46
INVESTMENT
INCOME
(LOSS)
225. NET
2.88 .18 6.73 (.75) (.81) 4.44 .58 4.26 (2.49) 4.08 (1.80) 2.95
REALIZED AND
UNREALIZED
GAIN (LOSS)
226. TOTAL
2.86 .35 7.12 (.65) (.42) 4.77 1.19 4.92 (1.79) 4.58 (1.38) 3.41
FROM
INVESTMENT
OPERATIONS
227.LESS
DISTRIBUTIONS
228. FROM
- - -- (.19) (.39) (.35) (.43) (.57) (.62) (.75) (.55) (.56) (.24) (.09)
NET
INVESTMENT
INCOME
229. FROM
(.87) (2.35) (.55) (.26) (1.71) (1.21) (2.42) -- -- -- (1.91) (.97)
NET REALIZED
GAIN
230. TOTAL
(.87) (2.54) (.94) (.61) (2.14) (1.78) (3.04) (.75) (.55) (.56) (2.15) (1.06)
DISTRIBUTIONS
231.NET
$ 24.68 $ 22.69 $ 24.88 $ 18.70 $ 19.96 $ 22.52 $ 19.53 $ 21.38 $ 17.21 $ 19.55 $ 15.53 $ 19.06
ASSET VALUE,
END OF PERIOD
232.TOTAL
12.96% 1.53% 38.16% (3.26)% (2.24)% 26.33% 7.26% 29.51% (9.49)% 30.45% (4.98)% 21.43%
RETURNB,C
233.NET
$ 469 $ 561 $ 620 $ 376 $ 385 $ 270 $ 195 $ 200 $ 172 $ 198 $ 191 $ 283
ASSETS, END OF
PERIOD (IN
MILLIONS)
234.RATIO OF
1.26%A 1.28% 1.61% 1.73%A,G 1.85% 1.57%D 1.46% 1.56% 1.59% 1.51% 1.71% 1.67%G,J
EXPENSES TO
AVERAGE NET
ASSETS
235.RATIO OF
1.25%A,H 1.27%H 1.61% 1.73%A 1.84%H 1.57% 1.46% 1.56% 1.59% 1.51% 1.71% 1.67%
EXPENSES TO
AVERAGE NET
ASSETS AFTER
EXPENSE
REDUCTIONS
236.RATIO OF
(.17)%A .70% 1.90% 2.03%A 1.89% 2.06% 3.22% 3.61% 3.70% 3.23% 3.10% 2.36%
NET
INVESTMENT
INCOME
(LOSS)
TO AVERAGE
NET ASSETS
237.PORTFOLI
41%A 151% 142% 228%A 159% 183% 211% 223% 114% 89% 160% 225%
O TURNOVER
238.AVERAG $ .0420 $ .0409
E
COMMISSION
RATEI
</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 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 EFFECTIVE OCTOBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION
93-2, "DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION
OF INCOME, CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY
INVESTMENT COMPANIES." AS A RESULT, NET INVESTMENT INCOME PER SHARE
MAY REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX
DIFFERENCES.
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 LIMITED IN ACCORDANCE WITH A STATE EXPENSE LIMITATION.
K FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A
SHARES) TO DECEMBER 31, 1996.
L THREE MONTHS ENDED DECEMBER 31, 1994
M AS OF OCTOBER 1, 1991, THE FUND DISCONTINUED THE USE OF EQUALIZATION
ACCOUNTING.
N SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
STRATEGIC OPPORTUNITIES - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
239. YEARS ENDED DECEMBER 31
240.SELECTED PER-SHARE DATA AND RATIOS 1997I 1996 1995 1994J 1994E
241.NET ASSET VALUE, BEGINNING OF PERIOD $ 22.36 $ 24.56 $ 18.57 $ 19.98 $ 19.65
242.INCOME FROM INVESTMENT OPERATIONS
243. NET INVESTMENT INCOME (LOSS) (.08)D .04D .38 .06D .05D
244. NET REALIZED AND UNREALIZED GAIN (LOSS) 2.83 .18 6.54 (.74) .28
245. TOTAL FROM INVESTMENT OPERATIONS 2.75 .22 6.92 (.68) .33
246.LESS DISTRIBUTIONS
247. FROM NET INVESTMENT INCOME -- (.07) (.38) (.47) --
248. FROM NET REALIZED GAIN (.87) (2.35) (.55) (.26) --
249. TOTAL DISTRIBUTIONS (.87) (2.42) (.93) (.73) --
250.NET ASSET VALUE, END OF PERIOD $ 24.24 $ 22.36 $ 24.56 $ 18.57 $ 19.98
251.TOTAL RETURNB,C 12.65% 1.00% 37.35% (3.41)% 1.68%
252.NET ASSETS, END OF PERIOD (000 OMITTED) $ 97,397 $ 98,535 $ 87,566 $ 17,090 $ 8,824
253.RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.82%A 1.80% 2.11% 2.58%A 2.63%A,F
254.RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER
EXPENSE 1.81%A,G 1.79%G 2.10%G 2.53%A,G 2.63%A
REDUCTIONS
255.RATIO OF NET INVESTMENT INCOME (LOSS) TO
AVERAGE NET (.73)%A .18% 1.40% 1.22%A 1.11%A
ASSETS
256.PORTFOLIO TURNOVER 41%A 151% 142% 228%A 159%
257.AVERAGE COMMISSION RATEH $ .0420 $ .0409
</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 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 SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
J THREE MONTHS ENDED DECEMBER 31, 1994
LARGE CAP - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C>
258. YEARS ENDED
NOVEMBER 30
259.SELECTED PER-SHARE DATA AND RATIOSD 1997J 1996G
260.NET ASSET VALUE, BEGINNING OF PERIOD $ 11.83 $ 10.21
261.INCOME FROM INVESTMENT OPERATIONS
262. NET INVESTMENT INCOME (LOSS) (.01) .00
263. NET REALIZED AND UNREALIZED GAIN (LOSS) .76 1.62
264. TOTAL FROM INVESTMENT OPERATIONS .75 1.62
265.LESS DISTRIBUTIONS
266. FROM NET REALIZED GAIN (.08) --
267.NET ASSET VALUE, END OF PERIOD $ 12.50 $ 11.83
268.TOTAL RETURNB,C 6.40% 15.87%
269.NET ASSETS, END OF PERIOD (000 OMITTED) $ 1,540 $ 503
270.RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.75%A,F 1.75%A,F
271.RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE 1.73%A,E 1.75%A
REDUCTIONS
272.RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET (.16)%A .11%A
ASSETS
273.PORTFOLIO TURNOVER 101%A 59%A
274.AVERAGE COMMISSION RATEH $ .0371 $ .0306
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
LARGE CAP - CLASS T
275. YEARS ENDED
NOVEMBER 30
276.SELECTED PER-SHARE DATA AND RATIOSD 1997J 1996I
277.NET ASSET VALUE, BEGINNING OF PERIOD $ 11.82 $ 10.00
278.INCOME FROM INVESTMENT OPERATIONS
279. NET INVESTMENT INCOME (LOSS) .00 (.01)
280. NET REALIZED AND UNREALIZED GAIN (LOSS) .76 1.83
281. TOTAL FROM INVESTMENT OPERATIONS .76 1.82
282.LESS DISTRIBUTIONS
283. FROM NET REALIZED GAIN (.06) --
284.NET ASSET VALUE, END OF PERIOD $ 12.52 $ 11.82
285.TOTAL RETURNB,C 6.47% 18.20%
286.NET ASSETS, END OF PERIOD (000 OMITTED) $ 35,913 $ 26,133
287.RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.65%A 2.00%A,F
288.RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE 1.62%A,E 2.00%A
REDUCTIONS
289.RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET (.06)%A (.14)%A
ASSETS
290.PORTFOLIO TURNOVER 101%A 59%A
291.AVERAGE COMMISSION RATEH $ .0371 $ .0306
</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 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.
J SIX MONTHS ENDED MAY 31, 1997 (UNAUDITED)
LARGE CAP - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C>
292. YEARS ENDED
NOVEMBER 30
293.SELECTED PER-SHARE DATA AND RATIOSD 1997I 1996H
294.NET ASSET VALUE, BEGINNING OF PERIOD $ 11.77 $ 10.00
295.INCOME FROM INVESTMENT OPERATIONS
296. NET INVESTMENT INCOME (LOSS) (.04) (.05)
297. NET REALIZED AND UNREALIZED GAIN (LOSS) .75 1.82
298. TOTAL FROM INVESTMENT OPERATIONS .71 1.77
299.LESS DISTRIBUTIONS
300. FROM NET REALIZED GAIN (.05) --
301.NET ASSET VALUE, END OF PERIOD $ 12.43 $ 11.77
302.TOTAL RETURNB,C 6.07% 17.70%
303.NET ASSETS, END OF PERIOD (000 OMITTED) $ 16,132 $ 9,721
304.RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.22%A 2.50%A,E
305.RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE 2.19%A,F 2.50%A
REDUCTIONS
306.RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET (.64)%A (.64)%A
ASSETS
307.PORTFOLIO TURNOVER 101%A 59%A
308.AVERAGE COMMISSION RATEG $ .0371 $ .0306
</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 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 SIX MONTHS ENDED MAY 31, 1997 (UNAUDITED)
GROWTH & INCOME - CLASS A
309.
310.SELECTED PER-SHARE DATA AND RATIOSD 1997G
311.NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
312.INCOME FROM INVESTMENT OPERATIONS
313. NET INVESTMENT INCOME .03
314. NET REALIZED AND UNREALIZED GAIN (LOSS) .89
315. TOTAL FROM INVESTMENT OPERATIONS .92
316.LESS DISTRIBUTIONS
317. FROM NET INVESTMENT INCOME (.01)
318.NET ASSET VALUE, END OF PERIOD $ 10.91
319.TOTAL RETURNB,C 9.21%
320.NET ASSETS, END OF PERIOD (000 OMITTED) $ 1,953
321.RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.50%A,E
322.RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS .76%A
323.PORTFOLIO TURNOVER 93%A
324.AVERAGE COMMISSION RATEF $ .0275
GROWTH & INCOME - CLASS T
325.
326.SELECTED PER-SHARE DATA AND RATIOSD 1997H
327.NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
328.INCOME FROM INVESTMENT OPERATIONS
329. NET INVESTMENT INCOME .02
330. NET REALIZED AND UNREALIZED GAIN (LOSS) .87
331. TOTAL FROM INVESTMENT OPERATIONS .89
332.LESS DISTRIBUTIONS
333. FROM NET INVESTMENT INCOME (.01)
334.NET ASSET VALUE, END OF PERIOD $ 10.88
335.TOTAL RETURNB,C 8.91%
336.NET ASSETS, END OF PERIOD (000 OMITTED) $ 43,225
337.RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.75%A,E
338.RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS .45%A
339.PORTFOLIO TURNOVER 93%A
340.AVERAGE COMMISSION RATEF $ .0275
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 MAY 31, 1997 (UNAUDITED).
H FOR THE PERIOD DECEMBER 31, 1996 (COMMENCEMENT OF SALE OF CLASS T
SHARES) TO MAY 31, 1997 (UNAUDITED).
GROWTH & INCOME - CLASS B
341.
342.SELECTED PER-SHARE DATA AND RATIOSD 1997G
343.NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
344.INCOME FROM INVESTMENT OPERATIONS
345. NET INVESTMENT INCOME (LOSS) .00
346. NET REALIZED AND UNREALIZED GAIN (LOSS) .88
347. TOTAL FROM INVESTMENT OPERATIONS .88
348.LESS DISTRIBUTIONS
349. FROM NET INVESTMENT INCOME (.01)
350.NET ASSET VALUE, END OF PERIOD $ 10.87
351.TOTAL RETURNB,C 8.81%
352.NET ASSETS, END OF PERIOD (000 OMITTED) $ 10,376
353.RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.25%A,E
354.RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET (.05)%A
ASSETS
355.PORTFOLIO TURNOVER 93%A
356.AVERAGE COMMISSION RATEF $ .0275
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 MAY 31, 1997 (UNAUDITED).
EQUITY INCOME - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C>
357. YEAR ENDED
NOVEMBER 30
358.SELECTED PER-SHARE DATA AND RATIOSE 1997L 1996J
359.NET ASSET VALUE, BEGINNING OF PERIOD $ 22.78 $ 20.38
360.INCOME FROM INVESTMENT OPERATIONS
361. NET INVESTMENT INCOME .13 .06
362. NET REALIZED AND UNREALIZED GAIN (LOSS) 1.85 2.44
363. TOTAL FROM INVESTMENT OPERATIONS 1.98 2.50
364.LESS DISTRIBUTIONS
365. FROM NET INVESTMENT INCOME (.20) (.10)
366. FROM NET REALIZED GAIN (.59) --
367. TOTAL DISTRIBUTIONS (.79) (.10)
368.NET ASSET VALUE, END OF PERIOD $ 23.97 $ 22.78
369.TOTAL RETURNB,C 9.02% 12.31%
370.NET ASSETS, END OF PERIOD (000 OMITTED) $ 11,312 $ 3,306
371.RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.44%A,F 1.46%A,D,F
372.RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE 1.43%A,G 1.44%A,G
REDUCTIONS
373.RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 1.17%A 1.27%A
374.PORTFOLIO TURNOVER 50%A 78%
375.AVERAGE COMMISSION RATEH $ .0423 $ .0424
</TABLE>
EQUITY INCOME - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
376. YEARS ENDED NOVEMBER 30
377.SELECTED PER-SHARE DATA AND RATIOS 1997L 1996 1995 1994I 1993 1992K
378.NET ASSET VALUE, BEGINNING OF
PERIOD $ 22.83 $ 19.95 $ 15.96 $ 14.86 $ 12.86 $ 12.37
379.INCOME FROM INVESTMENT OPERATIONS
380. NET INVESTMENT INCOME .15E .30E .31 .28E .33 .13
381. NET REALIZED AND UNREALIZED
GAIN (LOSS) 1.86 3.35 4.26 1.03 1.97 .47
382. TOTAL FROM INVESTMENT OPERATIONS 2.01 3.65 4.57 1.31 2.30 .60
383.LESS DISTRIBUTIONS
384. FROM NET INVESTMENT INCOME (.14) (.31) (.30) (.21) (.30) (.11)
385. FROM NET REALIZED GAIN (.59) (.46) (.28) -- -- --
386. TOTAL DISTRIBUTIONS (.73) (.77) (.58) (.21) (.30) (.11)
387.NET ASSET VALUE, END OF PERIOD $ 24.11 $ 22.83 $ 19.95 $ 15.96 $ 14.86 $ 12.86
388.TOTAL RETURNB,C 9.11% 18.89% 29.46% 8.84% 18.03% 4.88%
389.NET ASSETS, END OF PERIOD (000
OMITTED) $ 1,899,588 $ 1,672,994 $ 880,054 $ 179,501 $ 42,326 $ 1,462
390.RATIO OF EXPENSES TO AVERAGE NET
ASSETS 1.25%A 1.27% 1.48% 1.67% 1.77% 1.55%A
391.RATIO OF EXPENSES TO AVERAGE NET
ASSETS AFTER EXPENSE 1.24%A,G 1.26%G 1.47%G 1.64%G 1.77% 1.55%A
REDUCTIONS
392.RATIO OF NET INVESTMENT INCOME TO
AVERAGE NET ASSETS 1.31%A 1.45% 1.78% 1.69% 2.02% 3.39%A
393.PORTFOLIO TURNOVER 50%A 78% 80% 140% 120% 51%
394.AVERAGE COMMISSION RATEH $ .0423 $ .0424
</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 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 EFFECTIVE DECEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION
93-2, "DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION
OF INCOME, CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY
INVESTMENT COMPANIES." AS A RESULT, NET INVESTMENT INCOME PER SHARE
MAY REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX
DIFFERENCES.
J FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A
SHARES) TO NOVEMBER 30, 1996.
K FOR THE PERIOD SEPTEMBER 10, 1992 (COMMENCEMENT OF SALE OF CLASS T
SHARES) TO NOVEMBER 30, 1992.
L SIX MONTHS ENDED MAY 31, 1997 (UNAUDITED)
EQUITY INCOME - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
395. YEARS ENDED NOVEMBER 30
396.SELECTED PER-SHARE DATA AND RATIOS 1997H 1996 1995 1994E
397.NET ASSET VALUE, BEGINNING OF PERIOD $ 22.73 $ 19.90 $ 15.94 $ 15.21
398.INCOME FROM INVESTMENT OPERATIONS
399. NET INVESTMENT INCOME .09D .19D .26 .08D
400. NET REALIZED AND UNREALIZED GAIN (LOSS) 1.87 3.33 4.23 .72
401. TOTAL FROM INVESTMENT OPERATIONS 1.96 3.52 4.49 .80
402.LESS DISTRIBUTIONS
403. FROM NET INVESTMENT INCOME (.08) (.23) (.25) (.07)
404. FROM NET REALIZED GAIN (.59) (.46) (.28) --
405.TOTAL DISTRIBUTIONS (.67) (.69) (.53) (.07)
406.NET ASSET VALUE, END OF PERIOD $ 24.02 $ 22.73 $ 19.90 $ 15.94
407.TOTAL RETURNB,C 8.91% 18.22% 28.95% 5.25%
408.NET ASSETS, END OF PERIOD (000 OMITTED) $ 573,916 $ 500,447 $ 270,101 $ 35,373
409.RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.78%A 1.81% 1.85% 2.24%A
410.RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE 1.77%A,F 1.79%F 1.84%F 2.18%A,F
REDUCTIONS
411.RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS .79%A .92% 1.41% 1.15%A
412.PORTFOLIO TURNOVER 50%A 78% 80% 140%
413.AVERAGE COMMISSION RATEG $ .0423 $ .0424
</TABLE>
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 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 JUNE 30, 1994 (COMMENCEMENT OF SALE OF CLASS B
SHARES) TO NOVEMBER 30, 1994.
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 SIX MONTHS ENDED MAY 31, 1997 (UNAUDITED)
BALANCED - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C>
414. YEAR ENDED
OCTOBER 31
415.SELECTED PER-SHARE DATA AND RATIOSH 1997L 1996D
416.NET ASSET VALUE, BEGINNING OF PERIOD $ 16.04 $ 15.22
417.INCOME FROM INVESTMENT OPERATIONS
418. NET INVESTMENT INCOME .23 .08
419. NET REALIZED AND UNREALIZED GAIN (LOSS) 1.24 .88
420. TOTAL FROM INVESTMENT OPERATIONS 1.47 .96
421.LESS DISTRIBUTIONS
422. FROM NET INVESTMENT INCOME (.26) (.14)
423. FROM NET REALIZED GAIN (.11) --
424. TOTAL DISTRIBUTIONS (.37) (.14)
425.NET ASSET VALUE, END OF PERIOD $ 17.14 $ 16.04
426.TOTAL RETURNB,C 9.26% 6.34%
427.NET ASSETS, END OF PERIOD (000 OMITTED) $ 3,914 $ 1,181
428.RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.44%A,E 1.50%A,E
429.RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE 1.44%A 1.49%A,F
REDUCTIONS
430.RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 2.79%A 3.07%A
431.PORTFOLIO TURNOVER 75%A 223%
432.AVERAGE COMMISSION RATEG $ .0452 $ .0106
</TABLE>
BALANCED - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
433. YEARS ENDED OCTOBER 31
434.SELEC
TE 1997L 1996 1995 1994I 1993 1992 1991 1990 1989 1988 1987J
D PER-SHARE
DATA AND
RATIOS
435.NET $ 16.07 $ 15.30 $ 14.67 $ 15.91 $ 14.41 $ 14.13 $ 10.41 $ 12.77 $ 11.07 $ 9.44 $ 10.00
ASSET VALUE,
BEGINNING OF
PERIOD
436.INCOME
FROM
INVESTMENT
OPERATIONS
437. NET .25H .51H .59 .38 .48 .50 .51 .56 1.01K .62 .27
INVESTMENT
INCOME
438. NET 1.24 .88 .54 (.79) 2.18 .85 3.74 (1.34) 1.27 1.56 (.63)
REALIZED AND
UNREALIZED
GAIN (LOSS)
439. TO
TAL 1.49 1.39 1.13 (.41) 2.66 1.35 4.25 (.78) 2.28 2.18 (.36)
FROM
INVESTMENT
OPERATIONS
440.LESS
DISTRIBUTIONS
441. FROM (.29) (.59) (.50) (.28) (.56) (.46) (.53) (1.06) (.58) (.55) (.20)
NET
INVESTMENT
INCOME
442. IN -- -- -- (.02) -- -- -- -- -- -- --
EXCESS OF NET
INVESTMENT
INCOME
443. FROM (.11) (.03) -- (.49) (.60) (.61) -- (.52) -- -- --
NET REALIZED
GAIN
444.RETURN -- -- -- (.04) -- -- -- -- -- -- --
OF CAPITAL
445. TOTAL (.40) (.62) (.50) (.83) (1.16) (1.07) (.53) (1.58) (.58) .55 (.20)
DISTRIBUTIONS
446.NET $ 17.16 $ 16.07 $ 15.30 $ 14.67 $ 15.91 $ 14.41 $ 14.13 $ 10.41 $ 12.77 $ 11.07 $ 9.44
ASSET VALUE,
END OF PERIOD
447.TOTAL 9.37% 9.30% 7.85% (2.69)% 19.66% 10.27% 41.73% (7.15)% 21.15% 23.66% (3.90)%
RETURNB,C
448.NET $ 2,802 $ 2,993 $ 3,441 $ 3,129 $ 1,654 $ 398 $ 136 $ 61 $ 46 $ 36 $ 34
ASSETS, END
OF PERIOD (IN
MILLIONS)
449.RATIO
OF 1.21%A 1.26% 1.47% 1.59% 1.52% 1.60% 1.71% 1.85% 1.91% 2.06% 2.06%A
EXPENSES TO
AVERAGE NET
ASSETS
450.RATIO
OF 1.20%A,F 1.25%F 1.46%F 1.58%F 1.51%F 1.60% 1.71% 1.85% 1.91% 2.06% 2.06%A
EXPENSES TO
AVERAGE
NET ASSETS
AFTER
EXPENSE
REDUCTIONS
451.RATIO
OF 3.03%A 3.32% 3.99% 3.79% 3.24% 3.97% 4.19% 5.29% 8.80% 5.83% 3.95%A
NET
INVESTMENT
INCOME TO
AVERAGE NET
ASSETS
452.PORT
FOLI 75%A 223% 297% 202% 200% 389% 220% 297% 151% 204% 206%A
O TURNOVER
453.AVERAG $ .0452 $ .0106
E
COMMISSION
RATEG
</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 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 EFFECTIVE NOVEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION
93-2, "DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION
OF INCOME, CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY
INVESTMENT COMPANIES." AS A RESULT, NET INVESTMENT INCOME PER SHARE
MAY REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX
DIFFERENCES.
J FOR THE PERIOD JANUARY 6, 1987 (COMMENCEMENT OF OPERATIONS) TO
OCTOBER 31, 1987.
K NET INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND WHICH
AMOUNTED TO $.26 PER SHARE.
L SIX MONTHS ENDED APRIL 30, 1997
BALANCED - CLASS B
454.
455.SELECTED PER-SHARE DATA AND RATIOSG 1997C
456.NET ASSET VALUE, BEGINNING OF PERIOD $ 16.36
457.INCOME FROM INVESTMENT OPERATIONS
458. NET INVESTMENT INCOME .10
459. NET REALIZED AND UNREALIZED GAIN (LOSS) .78
460. TOTAL FROM INVESTMENT OPERATIONS .88
461.LESS DISTRIBUTIONS
462. FROM NET INVESTMENT INCOME (.12)
463.NET ASSET VALUE, END OF PERIOD $ 17.12
464.TOTAL RETURNB,D 5.38%
465.NET ASSETS, END OF PERIOD (000 OMITTED) $ 3,793
466.RATIO OF EXPENSES TO AVERAGE NET ASSETS 2.19%A,E
467.RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 1.97%A
468.PORTFOLIO TURNOVER 75%A
469.AVERAGE COMMISSION RATEF $ .0452
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 APRIL 30, 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 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 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.
HIGH YIELD - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C>
470. YEAR ENDED
OCTOBER 31
471.SELECTED PER-SHARE DATA AND RATIOSD 1997K 1996E
472.NET ASSET VALUE, BEGINNING OF PERIOD $ 12.300 $ 12.010
473.INCOME FROM INVESTMENT OPERATIONS
474. NET INVESTMENT INCOME .516 .163
475. NET REALIZED AND UNREALIZED GAIN (LOSS) (.117) .267
476. TOTAL FROM INVESTMENT OPERATIONS .399 .430
477.LESS DISTRIBUTIONS
478. FROM NET INVESTMENT INCOME (.639) (.140)
479. FROM NET REALIZED GAIN (.060) --
480. TOTAL DISTRIBUTIONS (.699) (.140)
481.NET ASSET VALUE, END OF PERIOD $ 12.000 $ 12.300
482.TOTAL RETURNB,C 3.28% 3.58%
483.NET ASSETS, END OF PERIOD (000 OMITTED) $ 16,787 $ 3,860
484.RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.25%A,F 1.25%A,F
485.RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 8.62%A 9.06%A
486.PORTFOLIO TURNOVER 94%A 121%
487.AVERAGE COMMISSION RATEG $ .0369 $ .0388
</TABLE>
HIGH YIELD - CLASS T
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
YEARS ENDED OCTOBER 31
489.SELECTE
1997K 1996 1995 1994H 1993 1992 1991 1990 1989 1988 1987J
D PER-SHARE
DATA AND
RATIOS
490.NET
$ 12.310 $ 11.910 $ 11.220 $ 12.010 $ 11.070 $ 10.120 $ 8.150 $ 8.970 $ 9.860 $ 9.090 $ 10.000
ASSET VALUE,
BEGINNING OF
PERIOD
491.INCOME
FROM
INVESTMENT
OPERATIONS
492. NET
.535D 1.105D .930D .848 .980 1.146 1.115 1.144 1.237 1.165 .878
INVESTMENT
INCOME
493. NET
(.132) .364 .680 (.537) 1.153 .975 1.948 (.820) (.890) .770 (.910)
REALIZED AND
UNREALIZED
GAIN (LOSS)
494. TOTAL
.403 1.469 1.610 .311 2.133 2.121 3.063 .324 .347 1.935 (.032)
FROM
INVESTMENT
OPERATIONS
495.LESS
DISTRIBUTIONS
496. FROM
(.643) (1.069) (.920) (.851) (.963) (1.171) (1.093) (1.144) (1.237) (1.165) (.878)
NET
INVESTMENT
INCOME
497. FROM
(.060) -- -- (.250) (.230) -- -- -- -- -- --
NET REALIZED
GAIN
498. TOTAL
(.703) (1.069) (.920) (1.101) (1.193) (1.171) (1.093) (1.144) (1.237) (1.165) (.878)
DISTRIBUTIONS
499.NET
$ 12.010 $ 12.310 $ 11.910 $ 11.220 $ 12.010 $ 11.070 $ 10.120 $ 8.150 $ 8.970 $ 9.860 $ 9.090
ASSET VALUE,
END OF PERIOD
500.TOTAL
3.31% 12.92% 15.05% 2.64% 20.47% 21.96% 39.67% 3.58% 3.34% 22.14% (.81)%
RETURNB,C
501.NET
$ 1,881,451 $ 1,709,294 $ 1,200,495 $ 679,623 $ 485,559 $ 136,316 $ 38,681 $ 15,134 $ 13,315 $ 11,900 $ 9,077
ASSETS, END
OF PERIOD
(000
OMITTED)
502.RATIO OF
1.10%A 1.12% 1.15% 1.20% 1.11% 1.10%F 1.10%F 1.10%F 1.10%F 1.10%F 1.24%A,
EXPENSES TO
F
AVERAGE NET
ASSETS
503.RATIO OF
1.09%A,I 1.11%I 1.15% 1.20% 1.11% 1.10% 1.10% 1.10% 1.10% 1.10% 1.24%A
EXPENSES TO
AVERAGE
NET ASSETS
AFTER
EXPENSE
REDUCTIONS
504.RATIO OF
8.81%A 9.20% 8.32% 6.92% 8.09% 9.95% 12.20% 12.72% 12.98% 11.86% 10.74%A
NET
INVESTMENT
INCOME TO
AVERAGE NET
ASSETS
505.PORTFOLI
94%A 121% 112% 118% 79% 100% 103% 90% 131% 135% 166%A
O TURNOVER
506.AVERAG $ .0369 $ .0388
E
COMMISSION
RATEG
</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 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 EFFECTIVE NOVEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION
93-2, "DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION
OF INCOME, CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY
INVESTMENT COMPANIES." AS A RESULT, NET INVESTMENT INCOME PER SHARE
MAY REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX
DIFFERENCES.
I FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
J FOR THE PERIOD JANUARY 5, 1987 (COMMENCEMENT OF OPERATIONS) TO
OCTOBER 31, 1987.
K SIX MONTHS ENDED APRIL 30, 1997 (UNAUDITED)
HIGH YIELD - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
507. YEARS ENDED OCTOBER 31
508.SELECTED PER-SHARE DATA AND RATIOS 1997H 1996 1995 1994E
509.NET ASSET VALUE, BEGINNING OF PERIOD $ 12.280 $ 11.890 $ 11.210 $ 11.300
510.INCOME FROM INVESTMENT OPERATIONS
511. NET INVESTMENT INCOME .492D 1.017D .794D .223
512. NET REALIZED AND UNREALIZED GAIN (LOSS) (.129) .361 .721 (.118)
513. TOTAL FROM INVESTMENT OPERATIONS .363 1.378 1.515 .105
514.LESS DISTRIBUTIONS
515. FROM NET INVESTMENT INCOME (.603) (.988) (.835) (.195)
516. FROM NET REALIZED GAIN (.060) -- -- --
517. TOTAL DISTRIBUTIONS (.663) (.988) (.835) (.195)
518.NET ASSET VALUE, END OF PERIOD $ 11.980 $ 12.280 $ 11.890 $ 11.210
519.TOTAL RETURNB,C 2.99% 12.10% 14.12% 0.94%
520.NET ASSETS, END OF PERIOD (000 OMITTED) $ 426,322 $ 344,328 $ 155,730 $ 16,959
521.RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.76%A 1.79% 2.01% 2.20%A
522.RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE 1.75%A,F 1.79% 2.01% 2.20%A
REDUCTIONS
523.RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 8.14%A 8.52% 7.46% 5.92%A
524.PORTFOLIO TURNOVER 94%A 121% 112% 118%
525.AVERAGE COMMISSION RATEG $ .0369 $ .0388
</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 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 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 SIX MONTHS ENDED APRIL 30, 1997 (UNAUDITED)
STRATEGIC INCOME - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C>
526. 527.YEAR
ENDED
DECEMBER 31
528.SELECTED PER-SHARE DATA AND RATIOSD 1997I 1996E
529.NET ASSET VALUE, BEGINNING OF PERIOD $ 11.250 $ 11.010
530.INCOME FROM INVESTMENT OPERATIONS
531. NET INVESTMENT INCOME .413 .267
532. NET REALIZED AND UNREALIZED GAIN (LOSS) .079 .493
533. TOTAL FROM INVESTMENT OPERATIONS .492 .760
534.LESS DISTRIBUTIONS
535. FROM NET INVESTMENT INCOME (.372) (.280)
536. FROM NET REALIZED GAIN (.060) (.240)
537. TOTAL DISTRIBUTIONS (.432) (.520)
538.NET ASSET VALUE, END OF PERIOD $ 11.310 $ 11.250
539.TOTAL RETURNB,C 4.49% 6.95%
540.NET ASSETS, END OF PERIOD (000 OMITTED) $ 1,652 $ 587
541.RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.25%A,F 1.25%A,
F
542.RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE 1.24%A, 1.25%A
REDUCTIONS G
543.RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 7.52%A 7.32%A
544.PORTFOLIO TURNOVER 139%A 119%
</TABLE>
STRATEGIC INCOME - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
545. YEARS ENDED DECEMBER 31
546.SELECTED PER-SHARE DATA AND RATIOS 1997I 1996 1995 1994H
547.NET ASSET VALUE, BEGINNING OF PERIOD $ 11.250 $ 11.000 $ 9.920 $ 10.000
548.INCOME FROM INVESTMENT OPERATIONS
549. NET INVESTMENT INCOME .411D .813D .885 .064D
550. NET REALIZED AND UNREALIZED GAIN (LOSS) .086 .542 1.231 (.046)
551. TOTAL FROM INVESTMENT OPERATIONS .497 1.355 2.116 .018
552.LESS DISTRIBUTIONS
553. FROM NET INVESTMENT INCOME (.377) (.805) (.806) (.098)
554. FROM NET REALIZED GAIN (.060) (.300) (.230) --
555. TOTAL DISTRIBUTIONS (.437) (1.105) (1.036) (.098)
556.NET ASSET VALUE, END OF PERIOD $ 11.310 $ 11.250 $ 11.000 $ 9.920
557.TOTAL RETURNB,C 4.53% 12.89% 22.02% .17%
558.NET ASSETS, END OF PERIOD (000 OMITTED) $ 112,285 $ 99,327 $ 52,626 $ 10,687
559.RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.18%A 1.23% 1.35%F 1.35%A,F
560.RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER 1.17%A,G 1.22%G 1.35% 1.35%A
EXPENSE REDUCTIONS
561.RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 7.44%A 7.34% 7.28% 5.80%A
562.PORTFOLIO TURNOVER 139%A 119% 193% 104%A
</TABLE>
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 (COMMENCEM ENT OF OPERATIONS)
T O DECEMBER 31, 1994.
I SIX MONTHS ENDED JUNE 30, 19 97 (UNAUDITED)
STRATEGIC INCOME - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
563. YEARS ENDED DECEMBER 31
564.SELECTED PER-SHARE DATA AND RATIOS 1997H 1996 1995 1994E
565.NET ASSET VALUE, BEGINNING OF PERIOD $ 11.260 $ 11.010 $ 9.910 $ 10.000
566.INCOME FROM INVESTMENT OPERATIONS
567. NET INVESTMENT INCOME .376D .743D .820 .072D
568. NET REALIZED AND UNREALIZED GAIN (LOSS) .094 .538 1.237 (.078)
569. TOTAL FROM INVESTMENT OPERATIONS .470 1.281 2.057 (.006)
570.LESS DISTRIBUTIONS
571. FROM NET INVESTMENT INCOME (.340) (.731) (.727) (.084)
572. FROM NET REALIZED GAIN (.060) (.300) (.230) --
573. TOTAL DISTRIBUTIONS (.400) (1.031) (.957) (.084)
574.NET ASSET VALUE, END OF PERIOD $ 11.330 $ 11.260 $ 11.010 $ 9.910
575.TOTAL RETURNB,C 4.28% 12.14% 21.35% (.06)%
576.NET ASSETS, END OF PERIOD (000 OMITTED) $ 45,712 $ 37,403 $ 26,654 $ 9,379
577.RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.84%A 1.88% 2.10% 2.10%A,F
F
578.RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE 1.83%A, 1.87%G 2.10% 2.10%A
REDUCTIONS G
579.RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 6.79%A 6.69% 6.53% 5.06%A
580.PORTFOLIO TURNOVER 139%A 119% 193% 104%A
</TABLE>
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 SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
MORTGAGE SECURITIES - CLASS A
581. YEAR ENDED
JULY 31
582.SELECTED PER-SHARE DATA AND RATIOSF 1997E
583.NET ASSET VALUE, BEGINNING OF PERIOD $ 10.830
584.INCOME FROM INVESTMENT OPERATIONS
585. NET INVESTMENT INCOME .268
586. NET REALIZED AND UNREALIZED GAIN (LOSS) .224
587. TOTAL FROM INVESTMENT OPERATIONS .492
588.LESS DISTRIBUTIONS
589. FROM NET INVESTMENT INCOME (.272)
590.NET ASSET VALUE, END OF PERIOD $ 11.050
591.TOT AL RET URNB,C 4.61%
592.NET ASSETS, END OF PERIOD (000 OMITTED) $ 1,586
593.RATIO OF EXPENSES TO AVERAGE NET ASSETS .90%A,D
594.RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 6.09%A
595.PORTFOLIO TURNOVER 149%
MORTGAGE SECURITIES - CLASS T
596. YEAR ENDED
JULY 31
597.SELECTED PER-SHARE DATA AND RATIOSF 1997G
598.NET ASSET VALUE, BEGINNING OF PERIOD $ 10.830
599.INCOME FROM INVESTMENT OPERATIONS
600. NET INVESTMENT INCOME .255
601. NET REALIZED AND UNREALIZED GAIN (LOSS) .233
602. TOTAL FROM INVESTMENT OPERATIONS .488
603.LESS DISTRIBUTIONS
604. FROM NET INVESTMENT INCOME (.268)
605.NET ASSET VALUE, END OF PERIOD $ 11.050
606.TOTAL RETURNB,C 4.57%
607.NET ASSETS, END OF PERIOD (000 OMITTED) $ 12,193
608.RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.00%A,D
609.RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 5.99%A
610.PORTFOLIO TURNOVER 149%
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.
MORTGAGE SECURITIES - CLASS B
611. YEAR ENDED
JULY 31
612.SELECTED PER-SHARE DATA AND RATIOSF 1997D
613.NET ASSET VALUE, BEGINNING OF PERIOD $ 10.830
614.INCOME FROM INVESTMENT OPERATIONS
615. NET INVESTMENT INCOME .234
616. NET REALIZED AND UNREALIZED GAIN (LOSS) .214
617. TOTAL FROM INVESTMENT OPERATIONS .448
618.LESS DISTRIBUTIONS
619. FROM NET INVESTMENT INCOME (.238)
620.NET ASSET VALUE, END OF PERIOD $ 11.040
621.TOTAL RETURNB,C 4. 20 %
622.NET ASSETS, END OF PERIOD (000 OMITTED) $ 823
623.RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.65%A,E
624.RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 5.34%A
625.PORTFOLIO TURNOVER 149%
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.
GOVERNMENT INVESTMENT - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C>
626. YEAR ENDED
OCTOBER 31
627.SELECTED PER-SHARE DATA AND RATIOS D 1 997E 1996 F
628.NET ASSET VALUE, BEGINNING OF PERIOD $ 9.490 $ 9.250
629.INCOME FROM INVESTMENT OPERATIONS
630. NET INVESTMENT INCOME .272 .090
631. NET REALIZED AND UNREALIZED GAIN (LOSS) (.162) .241
632. TOTAL FROM INVESTMENT OPERATIONS .110 .331
633.LESS DISTRIBUTIONS
634. FROM NET INVESTMENT INCOME (.280) (.091)
635.NET ASSET VALUE, END OF PERIOD $ 9.320 $ 9.490
636.TOTAL RETURN B , C 1.17% 3.58%
637.NET ASSETS, END OF PERIOD (000 OMITTED) $ 623 $ 223
638.RATIO OF EXPENSES TO AVERAGE NET ASSETS .90% A , G .90 %A,G
639.RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 5.94% A 6.28% A
640.PORTFOLIO TURNOVER 160% A 153%
</TABLE>
GOVERNMENT INVESTMENT - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
641. YEARS ENDED OCTOBER 31
642.SELECTE
199 7E 1996 1995 1994 H 1993 1992 1991 1990 1989 1988 1987 J
D PER-SHARE
DATA AND
RATIOS
643.NET
$ 9.490 $ 9.670 $ 8.960 $ 10.140 $ 9.730 $ 9.590 $ 9.150 $ 9.310 $ 9.260 $ 9.200 $ 10.000
ASSET VALUE,
BEGINNING OF
PERIOD
644.INCOME
FROM
INVESTMENT
OPERATIONS
645. NET
.276 D .586 D .594 .515 .567 .666 .700 .735 .773 .769 .614
INVESTMENT
INCOME
646. NET
(.181) (.180) .701 (1.031) .601 .125 .419 (.160) .050 .060 (.800)
REALIZED AND
UNREALIZED
GAIN (LOSS)
647. TOTAL
.095 .406 1.295 (.516) 1.168 .791 1.119 .575 .823 .829 (.186)
FROM
INVESTMENT
OPERATIONS
648.LESS
DISTRIBUTIONS
649. FROM
(.275) (.586) (.585) (.504) (.558) (.651) (.679) (.735) (.773) (.769) (.614)
NET
INVESTMENT
INCOME
650. FROM
- - -- -- -- (.130) (.200) -- -- -- -- -- --
NET REALIZED
GAIN
651. IN
- - -- -- -- (.030) -- -- -- -- -- -- --
EXCESS OF NET
REALIZED GAIN
652. TOTAL
(.275) (.586) (.585) (.664) (.758) (.651) (.679) (.735) (.773) (.769) (.614)
DISTRIBUTIONS
653.NET
$ 9.310 $ 9.490 $ 9.670 $ 8.960 $ 10.140 $ 9.730 $ 9.590 $ 9.150 $ 9.310 $ 9.260 $ 9.200
ASSET VALUE,
END OF PERIOD
654.TOTAL
1.01% 4.38% 14.91% (5.27)% 12.53% 8.49% 12.65% 6.48% 9.37% 9.34% (1.84)%
RETURN B , C
655.NET
$ 169,077 $ 217,883 $ 208,620 $ 114,453 $ 69,876 $ 23,281 $ 13,058 $ 9,822 $ 8,203 $ 6,590 $ 4,584
ASSETS, END
OF PERIOD
(000
OMITTED)
656.RATIO OF
1.00% A , 1.00% .89% .74% .68% 1.10% 1.10% 1.10% 1.10% 1.10% 1.29% A,G
EXPENSES TO
G G G G G G G G G
AVERAGE NET
ASSETS
657.RATIO OF
1.00% A .99% I .89% .74% .68% 1.10% 1.10% 1.10% 1.10% 1.10% 1.29% A
EXPENSES TO
AVERAGE NET
ASSETS
AFTER
EXPENSE
REDUCTIONS
658.RATIO OF
5.90% A 6.19% 6.34% 6.18% 6.11% 6.98% 7.47% 8.04% 8.45% 8.30% 8.12% A
NET
INVESTMENT
INCOME TO
AVERAGE NET
ASSETS
659.PORTFOLI
160% A 153% 261% 313% 333% 315% 54% 31% 42% 44% 32% A
O TURNOVER
</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 NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E SIX MONTHS ENDED APRIL 30 , 1997 (UNAUDITED)
F FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A
SHARES) TO OCTOBER 31, 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 EFFECTIVE NOVEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION
93-2, "DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION
OF INCOME, CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY
INVESTMENT COMPANIES." AS A RESULT, NET INVESTMENT INCOME PER SHARE
MAY REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX
DIFFERENCES.
I FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
J FOR THE PE RIOD JANUARY 7, 1 987 (COMMENCEMENT OF OPERATIONS)
TO OCTOBER 31, 1987.
GOVERNMENT INVESTMENT - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
660. YEARS ENDED OCTOBER 31
661.SELECTED PER-SHARE DATA
AND RATIOS 1997 G 1996 1995 1994 E
662.NET ASSET VALUE,
BEGINNING OF PERIOD $ 9.490 $ 9.670 $ 8.950 $ 9.100
663.INCOME FROM INVESTMENT
OPERATIONS
664. NET INVESTMENT
INCOME .245 D .520 D .542 .144
665. NET REALIZED AND
UNREALIZED GAIN (LOSS) (.179) (.177) .693 (.137)
666. TOTAL FROM INVESTMENT
OPERATIONS .066 .343 1.235 .007
667.LESS DISTRIBUTIONS
668. FROM NET INVESTMENT
INCOME (.246) (.523) (.515) (.157)
669.NET ASSET VALUE, END OF
PERIOD $ 9.310 $ 9.490 $ 9.670 $ 8.950
670.TOTAL RETURN B ,
C 0.70% 3.69% 14.19% 0.10%
671.NET ASSETS, END OF PERIOD
(000 OMITTED) $ 16,990 $ 17,355 $ 11,766 $ 2,062
672.RATIO OF EXPENSES TO
AVERAGE NET ASSETS 1.65% A , F 1.67% F 1.65% F 1.70% A , F
673.RATIO OF NET INVESTMENT
INCOME TO AVERAGE NET ASSETS 5.26% A 5.51% 5.58% 5.22% A
674.PORTFOLIO TURNOVER 160% A 153% 261% 313%
</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 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.
G SIX MONTHS ENDED APRIL 30, 1997 (UNAUDITED)
INTERMEDIATE BOND - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C>
675. YEAR ENDED
NOVEMBER 30
676.SELECTED PER-SHARE DATA AND RAT IOSI 1997 D 1996 H
677.NET ASSET VALUE, BEGINNING OF PERIOD $ 10.590 $ 10.350
678.INCOME FROM INVESTMENT OPERATIONS
679. NET INVESTMENT INCOME .318 .159
680. NET REALIZED AND UNREALIZED GAIN (LOSS) (.208) .235
681. TOTAL FROM INVESTMENT OPERATIONS .110 .394
682.LESS DISTRIBUTIONS
683. FROM NET INVESTMENT INCOME (.320) (.154)
684.NET ASSET VALUE, END OF PERIOD $ 10.380 $ 10.590
685.TOTAL RETURN B , C 1.07% 3.83%
686.NET ASSETS, END OF PERIOD (000 OMITTED) $ 1,826 $ 687
687.RATIO OF EXPENSES TO AVERAGE NET ASSETS .90% A , G .90% A , G
688.RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 6.29% A 6.45% A
689.PORTFOLIO TURNOVER 121% A 200%
</TABLE>
INTERMEDIATE BOND - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
690. YEARS ENDED NOVEMBER 30
691.SELECTED PER-SHARE
DATA AND RATIOS 1997 D 1996 1995 1994 F 1993 1992 E
692.NET ASSET VALUE,
BEGINNING OF
PERIOD $ 10.610 $ 10.760 $ 10.260 $ 11.140 $ 10.640 $ 10.960
693.INCOME FROM
INVESTMENT
OPERATIONS
694. NET INVESTMENT
INCOME .320 I .671 I .649 .609 .785 .170
695. NET REALIZED
AND UNREALIZED
GAIN (LOSS) (.221) (.147) .491 (.876) .511 (.320)
696. TOTAL FROM
INVESTMENT
OPERATIONS .099 .524 1.140 (.267) 1.296 (.150)
697.LESS DISTRIBUTIONS
698. FROM NET
INVESTMENT INCOME (.319) (.674) (.640) (.555) (.796) (.170)
699. FROM RETURN OF
CAPITAL -- -- -- (.058) -- --
700. TOTAL
DISTRIBUTIONS (.319) (.674) (.640) (.613) (.796) (.170)
701.NET ASSET VALUE,
END OF PERIOD $ 10.390 $ 10.610 $ 10.760 $ 10.260 $ 11.140 $ 10.640
702.TOTAL
RETURN B,C .96% 5.10% 11.43% (2.44)% 12.50% (1.37)%
703.NET ASSETS, END OF
PERIOD (000 OMITTED) $ 257, 656 $ 262,103 $ 228,439 $ 141,866 $ 59,184 $ 2,583
704.RATIO OF EXPENSES TO
AVERAGE NET ASSETS .96% A .97% .94% G 1.02% G 1.23% .82% A
705.RATIO OF EXPENSES TO
AVERAGE NET ASSETS
AFTER .96% A .96% I .94% 1.02% 1.23% .82% A
EXPENSE REDUCTIONS
706.RATIO OF NET
INVESTMENT INCOME
TO AVERAGE NET
ASSETS 6.18% A 6.38% 6.20% 6.04% 6.81% 7.67% A
707.PORTFOLIO
TURNOVER 121% A 200% 189% 68% 59% 7%
</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 SIX MONTHS ENDED MAY 31, 1997 (UNAUDITED)
E FOR THE PERIOD SEPTEMBER 10, 1992 (COMMENCEMENT OF SALE OF CLASS T
SHARES) TO NOVEMBER 30, 1992.
F EFFECTIVE DECEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION
93-2, "DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION
OF INCOME, CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY
INVESTMENT COMPANIES." AS A RESULT, NET INVESTMENT INCOME PER SHARE
MAY REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX
DIFFERENCES.
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 FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A
SHARES) TO NOVEMBER 30, 1996.
I NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
J FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES.
INTERMEDIATE BOND - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
708. YEARS ENDED NOVEMBER 30
709.SELECTED PER-SHARE DATA
AND RATIOS 1997 G 1996 1995 1994 E
710.NET ASSET VALUE, BEGINNING
OF PERIOD $ 10.590 $ 10.750 $ 10.250 $ 10.430
711.INCOME FROM INVESTMENT OPERATIONS
712. NET INVESTMENT INCOME .283 D .597 D .579 .204
713. NET REALIZED AND UNREALIZED
GAIN (LOSS) (.211) (.153) .483 (.178)
714. TOTAL FROM INVESTMENT
OPERATIONS .072 .444 1.062 .026
715.LESS DISTRIBUTIONS
716. FROM NET INVESTMENT INCOME (.282) (.604) (.562) (.187)
717. FROM RETURN OF CAPITAL -- -- -- (.019)
718. TOTAL DISTRIBUTIONS (.282) (.604) (.562) (.206)
719.NET ASSET VALUE, END OF PERIOD $ 10.380 $ 10.590 $ 10.750 $ 10.250
720.TOTAL RETURN B , C .70% 4.32% 10.62% .24%
721.NET ASSETS, END OF PERIOD (000
OMITTED) $ 19,446 $ 18,972 $ 15,830 $ 3,156
722.RATIO OF EXPENSES TO AVERAGE
NET ASSETS 1.65% A , F 1.66% 1.70% 1.65% A , F
F F
723.RATIO OF NET INVESTMENT INCOME
TO AVERAGE NET ASSETS 5.48% A 5.69% 5.44% 5.42% A
724.PORTFOLIO TURNOVER 121% A 200% 189% 68%
</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 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 SIX MONTHS ENDED MAY 31, 1997 (UNAUDITED)
SHORT FIXED - INCOME - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C>
725. YEAR ENDED
OCTOBER 31
726.SELECTED PER-SHARE DATA AND RATIOS D 1997 E 1996 F
727.NET ASSET VALUE, BEGINNING OF PERIOD $ 9.370 $ 9.290
728.INCOME FROM INVESTMENT OPERATIONS
729. NET INVESTMENT INCOME .276 .090
730. NET REALIZED AND UNREALIZED GAIN (LOSS) (.110) .081
731. TOTAL FROM INVESTMENT OPERATIONS .166 .171
732.LESS DISTRIBUTIONS
733. FROM NET INVESTMENT INCOME (.286) (.091)
734.NET ASSET VALUE, END OF PERIOD $ 9.250 $ 9.370
735.TOTAL RETURN B , C 1.80% 1.85%
736.NET ASSETS, END OF PERIOD (000 OMITTED) $ 693 $ 204
737.RATIO OF EXPENSES TO AVERAGE NET ASSETS .90% A , G .90% A , G
738.RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 6.03% A 6.27% A
739.PORTFOLIO TURNOVER 107% A 124%
</TABLE>
SHORT FIXED-INCOME - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
740. YEARS ENDED OCTOBER 31
741.SELECTE
1997 E 1996 1995 1994 H 1993 1992 1991 1990 1989 1988 1987 I
D PER-SHARE
DATA AND
RATIOS
742.NET
$ 9.380 $ 9.470 $ 9.480 $ 10.090 $ 9.950 $ 9.870 $ 9.620 $ 9.950 $ 9.940 $ 10.060 $ 10.000
ASSET VALUE,
BEGINNING OF
PERIOD
743.INCOME
FROM
INVESTMENT
OPERATIONS
744. NET
.288 D .594 D .403 .479 .732 .830 .848 .868 .832 .852 .101
INVESTMENT
INCOME
745. NET
(.092) (.094) .148 (.501) .146 .071 .270 (.330) .010 (.120) .060
REALIZED AND
UNREALIZED
GAIN (LOSS)
746. TOTAL
.196 .500 .551 (.022) .878 .901 1.118 .538 .842 .732 .161
FROM
INVESTMENT
OPERATIONS
747.LESS
DISTRIBUTIONS
748. FROM
(.286) (.590) (.407) (.464) (.738) (.821) (.868) (.868) (.832) (.852) (.101)
NET
INVESTMENT
INCOME
749. IN
- - -- -- -- (.044) -- -- -- -- -- -- --
EXCESS OF NET
INVESTMENT
INCOME
750. FROM
- - -- -- (.154) (.080) -- -- -- -- -- -- --
R ETURN OF
CAPITAL
751. TOTAL
(.286) (.590) (.561) (.588) (.738) (.821) (.868) (.868) (.832) (.852) (.101)
DISTRIBUTIONS
752.NET
$ 9.290 $ 9.380 $ 9.470 $ 9.480 $ 10.090 $ 9.950 $ 9.870 $ 9.620 $ 9.950 $ 9.940 $ 10.060
ASSET VALUE,
END OF PERIOD
753.TOTAL
2.12% 5.45% 6.05% (.22)% 9.13% 9.44% 12.19% 5.59% 8.89% 7.56% 1.61%
RETURN B , C
754.NET
$ 372,238 $ 416,700 $ 546,546 $ 787,926 $ 654,202 $ 170,558 $ 25,244 $ 13,062 $ 12,394 $ 13,433 $ 3,252
ASSETS, END
OF PERIOD
(000
OMITTED)
755.RATIO OF
.89% .88% .89% .97% .95% .90% G .90% G .90%G .90% G .90%G .90% A ,
EXPENSES TO
A G
AVERAGE NET
ASSETS
756.RATIO OF
6.22% 6.29% 6.05% 5.91% 6.77% 7.59% 8.50% 8.86% 8.45% 8.39% 7.65% A
NET
A
INVESTMENT
INCOME TO
AVERAGE NET
ASSETS
757.PORTFOLI
107% 124% 179% 108% 58% 57% 127% 144% 157% 178% 119% A
O TURNOVER
A
</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 NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E SIX MONTHS ENDED APRIL 30, 1997 (UNAUDITED)
F FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A
SHARES) TO OCTOBER 31, 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 EFFECTIVE NOVEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION
93-2, "DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION
OF INCOME, CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY
INVESTMENT COMPANIES." AS A RESULT, NET INVESTMENT INCOME PER SHARE
MAY REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX
DIFFERENCES.
I FOR THE PERIOD SEPTEMBER 16, 1987 (COMMENCEMENT OF
OPERATIONS) TO OCTOBER 31, 1987.
HIGH INCOME MUNICIPAL - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C>
758. YEAR ENDED
OCTOBER 31
759.SELECTED PER-SHARE DATA AND RATIOSF 1997E 1996H
760.NET ASSET VALUE, BEGINNING OF PERIOD $ 11.740 $ 11.630
761.INCOME FROM INVESTMENT OPERATIONS
762. NET INTEREST INCOME .298 .105G
763. NET REALIZED AND UNREALIZED GAIN (LOSS) (.011) .109
764. TOTAL FROM INVESTMENT OPERATIONS .287 .214
765.LESS DISTRIBUTIONS
766. FROM NET INTEREST INCOME (.325)G (.104)
767. IN EXCESS OF NET INTEREST INCOME (.002)I --
768. TOTAL DISTRIBUTIONS (.327) (.104)
769.NET ASSET VALUE, END OF PERIOD $ 11.700 $ 11.740
770.TOTAL RETURNB,C 2.46% 1.84%
771.NET ASSETS, END OF PERIOD (000 OMITTED) $ 1,611 $ 202
772.RATIO OF EXPENSES TO AVERAGE NET ASSETS .90%A, .90%A,
D D
773.RATIO OF NET INTEREST INCOME TO AVERAGE NET ASSETS 5.21%A 5.73%A
774.PORTFOLIO TURNOVER 44%A 49%
</TABLE>
HIGH INCOME MUNICIPAL - CLASS T
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
775. YEARS ENDED OCTOBER 31
776.SELECTE
1997E 1996 1995 1994J 1993 1992 1991 1990 1989 1988 1987K
D PER-SHARE
DATA AND
RATIOS
777.NET
$ 11.760 $ 11.880 $ 11.220 $ 12.720 $ 11.650 $ 11.410 $ 10.870 $ 10.820 $ 10.460 $ 9.850 $ 10.000
ASSET VALUE,
BEGINNING OF
PERIOD
778.INCOME
FROM
INVESTMENT
OPERATIONS
779. NET
.304F .677F,G .700 .689 .710 .774 .803 .811 .800 .750 .092
INTEREST
INCOME
780. NET
(.041) (.136) .660 (1.430) 1.100 .250 .660 .150 .410 .610 (.150)
REALIZED AND
UNREALIZED
GAIN (LOSS)
781. TOTAL
.263 .541 1.360 (.741) 1.810 1.024 1.463 .961 1.210 1.360 (.058)
FROM
INVESTMENT
OPERATIONS
782.LESS
DISTRIBUTIONS
783. FROM
(.321)G (.661) (.700) (.689) (.710) (.774) (.803) (.811) (.800) (.750) (.092)
NET INTEREST
INCOME
784. FROM
- - -- -- -- (.060) (.030) (.010) (.120) (.100) (.050) -- --
NET REALIZED
GAIN
785. IN
(.002)I -- -- -- -- -- -- -- -- -- --
EXCESS OF NET
INTEREST
INCOME
786. IN
- - -- -- -- (.010) -- -- -- -- -- -- --
EXCESS OF NET
REALIZED GAIN
787. TOTAL
(.323) (.661) (.700) (.759) (.740) (.784) (.923) (.911) (.850) (.750) (.092)
DISTRIBUTIONS
788.NET
$ 11.700 $ 11.760 $ 11.880 $ 11.220 $ 12.720 $ 11.650 $ 11.410 $ 10.870 $ 10.820 $ 10.460 $ 9.850
ASSET VALUE,
END OF PERIOD
789.TOTAL
2.26% 4.68% 12.50% (6.03)% 15.95% 9.21% 14.02% 9.28% 12.05% 14.22% (.58)%
RETURNB,C
790.NET
$ 413,225 $ 480,432 $ 565,131 $ 544,422 $ 497,575 $ 156,659 $ 67,135 $ 22,702 $ 6,669 $ 3,290 $ 1,275
ASSETS, END
OF PERIOD
(000
OMITTED)
791.RATIO OF
.89% .89% .91% .89% .92% .90%D .90%D .90%D .90%D .89%D .80%A,
EXPENSES TO
A D
AVERAGE NET
ASSETS
792.RATIO OF
5.21% 5.74% 6.06% 5.78% 5.59% 6.59% 7.08% 7.37% 7.60% 7.33% 7.24%A
NET INTEREST
A
INCOME TO
AVERAGE NET
ASSETS
793.PORTFOLI
44% 49% 37% 38% 27% 13% 10% 11% 27% 19% 0%
O TURNOVER
A
</TABLE>
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 SIX MONTHS ENDED APRIL 30, 1997 (UNAUDITED)
F NET INTEREST INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
G NET INTEREST INCOME PER SHARE IN 1996 REFLECTS A PAYMENT RECEIVED
FROM AN ISSUER IN BANKRUPTCY WHICH WAS DISTRIBUTED IN 1997.
H FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A
SHARES) TO OCTOBER 31, 1996.
I THE AMOUNTS SHOWN REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK
TO TAX DIFFERENCES.
J EFFECTIVE NOVEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION
93-2, "DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION
OF INCOME, CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY
INVESTMENT COMPANIES." AS A RESULT, NET INVESTMENT INCOME PER SHARE
MAY REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX
DIFFERENCES.
K FOR THE PERIOD SEPTEMBER 16, 1987 (COMMENCEMENT OF OPERATIONS) TO
OCTOBER 31, 1987.
HIGH INCOME MUNICIPAL - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
794. YEARS ENDED OCTOBER 31
795.SELECTED PER-SHARE DATA AND RATIOS 1997I 1996 1995 1994G
796.NET ASSET VALUE, BEGINNING OF PERIOD $ 11.740 $ 11.860 $ 11.210 $ 11.610
797.INCOME FROM INVESTMENT OPERATIONS
798. NET INTEREST INCOME .263E .596E,F .612 .188
799. NET REALIZED AND UNREALIZED GAIN (LOSS) (.044) (.136) .650 (.400)
800. TOTAL FROM INVESTMENT OPERATIONS .219 .460 1.262 (.212)
801.LESS DISTRIBUTIONS
802. FROM NET INTEREST INCOME (.287)F (.580) (.612) (.188)
803. IN EXCESS OF NET INTEREST INCOME (.002)H -- -- --
804. TOTAL DISTRIBUTIONS (.289) (.580) (.612) (.188)
805.NET ASSET VALUE, END OF PERIOD $ 11.670 $ 11.740 $ 11.860 $ 11.210
806.TOTAL RETURNB,C 1.87% 3.98% 11.57% (1.86)%
807.NET ASSETS, END OF PERIOD (000 OMITTED) $ 39,396 $ 39,389 $ 32,395 $ 9,968
808.RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.58%A 1.57% 1.86%D 2.09%A
809.RATIO OF NET INTEREST INCOME TO AVERAGE NET ASSETS 4.53%A 5.06% 5.18% 4.58%A
810.PORTFOLIO TURNOVER 44%A 49% 37% 38%
</TABLE>
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.
I SIX MONTHS ENDED APRIL 30, 1997 (UNAUDITED)
MUNICIPAL BOND - CLASS A
811.
812.SELECTED PER-SHARE DATA AND RATIOS 1997G
813.NET ASSET VALUE, BEGINNING OF PERIOD $ 8.200
814.INCOME FROM INVESTMENT OPERATIONS
815. NET INTEREST INCOME .123
816. NET REALIZED AND UNREALIZED GAIN (LOSS) .040
817. TOTAL FROM INVESTMENT OPERATIONS .163
818.LESS DISTRIBUTIONS
819. FROM NET INTEREST INCOME (.123)
820.NET ASSET VALUE, END OF PERIOD $ 8.240
821.TOTAL RETURNB,C 2.01%
822.NET ASSETS, END OF PERIOD (000 OMITTED) $ 509
823.RATIO OF EXPENSES TO AVERAGE NET ASSETS .90%A,
D
824.RATIO OF NET INTEREST INCOME TO AVERAGE NET ASSETS 4.57%A
825.PORTFOLIO TURNOVER 34%A
MUNICIPAL BOND - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C>
826. YEAR ENDED
DECEMBER 31
827.SELECTED PER-SHARE DATA AND RATIOS 1997H 1996F
828.NET ASSET VALUE, BEGINNING OF PERIOD $ 8.190 $ 7.990
829.INCOME FROM INVESTMENT OPERATIONS
830. NET INTEREST INCOME .182 .185
831. NET REALIZED AND UNREALIZED GAIN (LOSS) .040 .200
832. TOTAL FROM INVESTMENT OPERATIONS .222 .385
833.LESS DISTRIBUTIONS
834. FROM NET INTEREST INCOME (.182) (.185)
835.NET ASSET VALUE, END OF PERIOD $ 8.230 $ 8.190
836.TOTAL RETURNB,C 2.75% 4.86%
837.NET ASSETS, END OF PERIOD (000 OMITTED) $ 2,694 $ 3,878
838.RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.00%A,D 1.00%A,
D
839.RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE .92%A,E 1.00%A
REDUCTIONS
840.RATIO OF NET INTEREST INCOME TO AVERAGE NET ASSETS 4.48%A 4.40%A
841.PORTFOLIO TURNOVER 34%A 35%
</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 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 THE PERIOD JULY 1, 1996 (COMMENCEMENT OF SALE OF CLASS T SHARES)
TO DECEMBER 31, 1996.
G FOR THE PERIOD MARCH 3, 1997 (COMMENCEMENT OF SALE OF CLASS A
SHARES) TO JUNE 30, 1997 (UNAUDITED).
H SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
MUNICIPAL BOND - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C>
842. YEAR ENDED
DECEMBER 31
843.SELECTED PER-SHARE DATA AND RATIOS 1997F 1996E
844.NET ASSET VALUE, BEGINNING OF PERIOD $ 8.190 $ 7.990
845.INCOME FROM INVESTMENT OPERATIONS
846. NET INTEREST INCOME .158 .160
847. NET REALIZED AND UNREALIZED GAIN (LOSS) .050 .200
848. TOTAL FROM INVESTMENT OPERATIONS .208 .360
849.LESS DISTRIBUTIONS
850. FROM NET INTEREST INCOME (.158) (.160)
851.NET ASSET VALUE, END OF PERIOD $ 8.240 $ 8.190
852.TOTAL RETURNB,C 2.57% 4.54%
853.NET ASSETS, END OF PERIOD (000 OMITTED) $ 1,146 $ 259
854.RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.65%A, 1.65%A,
D D
855.RATIO OF NET INTEREST INCOME TO AVERAGE NET ASSETS 3.91%A 3.91%A
856.PORTFOLIO TURNOVER 34%A 35%
</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 CONTINGENT DEFERRED 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 JULY 1, 1996 (COMMENCEMENT OF SALE OF CLASS B SHARES)
TO DECEMBER 31, 1996.
F SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
INTERMEDIATE MUNICIPAL - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C>
857. YEAR ENDED
NOVEMBER 30
858.SELECTED PER-SHARE DATA AND RATIOS 1 997F 1996 G
859.NET ASSET VALUE, BEGINNING OF PERIOD $ 10.410 $ 10.160
860.INCOME FROM INVESTMENT OPERATIONS
861. NET INTEREST INCOME .230 .113
862. NET REALIZED AND UNREALIZED GAIN (LOSS) (.089) .250
863. TOTAL FROM INVESTMENT OPERATIONS .141 .363
864.LESS DISTRIBUTIONS
865. FROM NET INTEREST INCOME (.230) (.113)
866. FROM NET REALIZED GAIN (.001) --
867. TOTAL DISTRIBUTIONS (.231) (.113)
868.NET ASSET VALUE, END OF PERIOD $ 10.320 $ 10.410
869.TOTAL RETURN B , C 1.38% 3.59%
870.NET ASSETS, END OF PERIOD (000 OMITTED) $ 344 $ 103
871.RATIO OF EXPENSES TO AVERAGE NET ASSETS .90%A,E .90%A,
E
872.RATIO OF NET INTEREST INCOME TO AVERAGE NET ASSETS 4.47%A 4.60%A
873.PORTFOLIO TURNOVER 21%A 35%
</TABLE>
INTERMEDIATE MUNICIPAL - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
874. YEARS ENDED NOVEMBER 30
875.SELECTED PER-SHARE DATA AND
RATIOS 1997 F 1996 1995 1994 D 1993 19 92 H
876.NET ASSET VALUE, BEGINNING OF
PERIOD $ 10.410 $ 10.380 $ 9.400 $ 10.460 $ 11.080 $ 11.010
877.INCOME FROM INVESTMENT OPERATIONS
878. NET INTEREST
INCOME .225 .461 .451 .455 .508 .131
879. NET REALIZED AND UNREALIZED GAIN
(LOSS) (.079) .030 .980 (1.040) .260 .070
880. TOTAL FROM INVESTMENT OPERA
TIONS .146 .491 1.431 (.585) .768 .201
881.LESS DISTRIBUTIONS
882. FROM NET INTEREST
INCOME (.225) (.461) (.451) (.455) (.508) (.131)
883. FROM NET REALIZED
GAIN (.001) -- -- -- (.880) --
884. IN EXCESS OF NET REALIZED
GAIN -- -- -- (.020) -- --
885. TOTAL DISTRIBU
TIONS (.226) (.461) (.451) (.475) (1.388) (.131)
886.NET ASSET VALUE, END OF
PERIOD $ 10.330 $ 10.410 $ 10.380 $ 9.400 $ 10.460 $ 11.080
887.TOTAL RETURN
B,C 1.43% 4.89% 15.49% (5.78)% 7.72% 1.37%
888.NET ASSETS, END OF PERIOD (000
OMITTED) $ 49,852 $ 56,729 $ 62,852 $ 57,382 $ 39,800 $ 1,752
889.RATIO OF EXPENSES TO AVERAGE NET
ASSETS 1.00%A,E 1.00%E .94%E .90%E .90%E 1.04%A,E
890.RATIO OF NET INTEREST INCOME TO AVERAGE NET
ASSETS 4.38%A 4.42% 4.56% 4.49% 4.76% 5.65%A
891.PORTFOLIO TURN
OVER 21%A 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 EFFECTIVE DECEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION
93-2, "DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION
OF INCOME, CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY
INVESTMENT COMPANIES." AS A RESULT, NET INVESTMENT INCOME PER SHARE
MAY REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX
DIFFERENCES.
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 SIX MONTHS ENDED MAY 31, 1997 (UNAUDITED)
G FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A
SHARES) TO NOVEMBER 30, 1996.
H FOR THE PERIOD SEPTEMBER 10, 1992 (COMENC EMENT OF SALE OF CLASS T
SHARES) TO NOVEMBER 30, 1992.
INTERMEDIATE MUNICIPAL - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
892. YEARS ENDED NOVEMBER 30
893.SELECTED PER-SHARE DATA AND RATIOS 19 97 D 1996 1995 1994 E
894.NET ASSET VALUE, BEGINNING OF PERIOD $ 10.410 $ 10.380 $ 9.400 $ 9.890
895.INCOME FROM INVESTMENT OPERATIONS
896. NET INTEREST INCOME .193 .394 .373 .155
897. NET REALIZED AND UNREALIZED GAIN
(LOSS) (.089) .030 .980 (.490)
898. TOTAL FROM INVESTMENT OPERATIONS .104 .424 1.353 (.335)
899.LESS DISTRIBUTIONS
900. FROM NET INTEREST INCOME (.193) (.394) (.373) (.155)
901. FROM NET REALIZED GAIN (.001) -- -- --
902. TOTAL DISTRIBUTIONS (.194) (.394) (.373) (.155)
903.NET ASSET VALUE, END OF PERIOD $ 10.320 $ 10.410 $ 10.380 $ 9.400
904.TOTAL RETURN B , C 1.01% 4.21% 14.60% (3.44)%
905.NET ASSETS, END OF PERIOD (000 OMITTED) $ 7,349 $ 7,445 $ 6,226 $ 1,682
906.RATIO OF EXPENSES TO AVERAGE NET
ASSETS 1.65%A,F 1.66% 1.68% 1.65%A,
F F F
907.RATIO OF NET INTEREST INCOME TO
AVERAGE NET ASSETS 3.75%A 3.76% 3.71% 3.74%A
908.PORTFOLIO TURNOVER 21%A 35% 53% 53%
</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 CONTINGENT DEFERRED SALES CHARGE
AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D SIX MONTHS ENDED MAY 31, 1997 (UNAUDITED)
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.
SHORT - INTERMEDIATE MUNICIPAL INCOME - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C>
909. YEAR ENDED
NOVEMBER 30
910.SELECTED PER-SHARE DATA AND RATIOS 1997H 1996D
911.NET ASSET VALUE, BEGINNING OF PERIOD $ 10.210 $ 10.100
912.INCOME FROM INVESTMENT OPERATIONS
913. NET INTEREST INCOME .202 .100
914. NET REALIZED AND UNREALIZED GAIN (LOSS) (.070) .110
915. TOTAL FROM INVESTMENT OPERATIONS .132 .210
916.LESS DISTRIBUTIONS
917. FROM NET INTEREST INCOME (.202) (.100)
918. FROM NET REALIZED GAIN (.030) --
919. TOTAL DISTRIBUTIONS (.232) (.100)
920.NET ASSET VALUE, END OF PERIOD $ 10.110 $ 10.210
921.TOTAL RETURNB,C 1.32% 2.09%
922.NET ASSETS, END OF PERIOD (000 OMITTED) $ 159 $ 186
923.RATIO OF EXPENSES TO AVERAGE NET ASSETS .90%A,F .90%A,F
924.RATIO OF NET INTEREST INCOME TO AVERAGE NET ASSETS 4.02%A 4.06%A
925.PORTFOLIO TURNOVER 35%A 62%
</TABLE>
SHORT-INTERMEDIATE MUNICIP AL INCOME - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
926. YEARS ENDED NOVEMBER 30
927.SELECTED PER-SHARE DATA AND RATIOS 1997H 1996 1995 1994E
928.NET ASSET VALUE, BEGINNING OF PERIOD $ 10.210 $ 10.240 $ 9.770 $ 10.000
929.INCOME FROM INVESTMENT OPERATIONS
930. NET INTEREST INCOME .202 .404 .430 .259
931. NET REALIZED AND UNREALIZED GAIN (LOSS) (.070) .000 .470 (.230)
932. TOTAL FROM INVESTMENT OPERATIONS .132 .404 .900 .029
933.LESS DISTRIBUTIONS
934. FROM NET INTEREST INCOME (.202) (.404) (.430) (.259)
935. FROM NET REALIZED GAIN (.030) (.030) -- --
936. TOTAL DISTRIBUTIONS (.232) (.434) (.430) (.259)
937.NET ASSET VALUE, END OF PERIOD $ 10.110 $ 10.210 $ 10.240 $ 9.770
938.TOTAL RETURNB,C 1.31% 4.06% 9.38% .27%
939.NET ASSETS, END OF PERIOD (000 OMITTED) $ 24,327 $ 29,887 $ 29,274 $ 16,563
940.RATIO OF EXPENSES TO AVERAGE NET ASSETS .90%A ,F .90%F .82%F .75%A ,
F
941.RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER
EXPENSE .90%A .89%G .82% .75%A
REDUCTIONS
942.RATIO OF NET INTEREST INCOME TO AVERAGE NET
ASSETS 4.01%A 3.97% 4.25% 3.74%A
943.PORTFOLIO TURNOVER 35%A 62% 80% 111%A
</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 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.
H SIX MONTHS ENDED MAY 31, 1997 (UNAUDITED)
CALIFORNIA MUNICIPAL INCOME - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C>
944. YEAR ENDED
OCTOBER 31
945.SELECTED PER-SHARE DATA AND RATIOS 1997H 1996F
946.NET ASSET VALUE, BEGINNING OF PERIOD $ 9.930 $ 9.750
947.INCOME FROM INVESTMENT OPERATIONS
948. NET INTEREST INCOME .211 .066
949. NET REALIZED AND UNREALIZED GAIN (LOSS) (.070) .180
950. TOTAL FROM INVESTMENT OPERATIONS .141 .246
951.LESS DISTRIBUTIONS
952. FROM NET INTEREST INCOME (.211) (.066)
953.NET ASSET VALUE, END OF PERIOD $ 9.860 $ 9.930
954.TOTAL RETURNB,C 1.41% 2.53%
955.NET ASSETS, END OF PERIOD (000 OMITTED) $ 137 $ 102
956.RATIO OF EXPENSES TO AVERAGE NET ASSETS .90%A,D .90%A,D
957.RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE .89%A,E .90%A
REDUCTIONS
958.RATIO OF NET INTEREST INCOME TO AVERAGE NET ASSETS 4.27%A 3.98%A
959.PORTFOLIO TURNOVER 13%A 21%A
</TABLE>
CALIFORNIA MUNICIPAL INCOME - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C>
960. YEAR ENDED
OCTOBER 31
961.SELECTED PER-SHARE DATA AND RATIOS 1997H 1996G
962.NET ASSET VALUE, BEGINNING OF PERIOD $ 9.920 $ 10.000
963.INCOME FROM INVESTMENT OPERATIONS
964. NET INTEREST INCOME .206 .261
965. NET REALIZED AND UNREALIZED GAIN (LOSS) (.050) (.080)
966. TOTAL FROM INVESTMENT OPERATIONS .156 .181
967.LESS DISTRIBUTIONS
968. FROM NET INTEREST INCOME (.206) (.261)
969.NET ASSET VALUE, END OF PERIOD $ 9.870 $ 9.920
970.TOTAL RETURNB,C 1.46% 1.99%
971.NET ASSETS, END OF PERIOD (000 OMITTED) $ 2,279 $ 2,244
972.RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.00%A,D 1.00%A,D
973.RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER .99%A,E .87%A,E
EXPENSE REDUCTIONS
974.RATIO OF NET INTEREST INCOME TO AVERAGE NET ASSETS 4.21%A 3.92%A
975.PORTFOLIO TURNOVER 13%A 21%A
</TABLE>
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 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 THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A
SHARES) TO OCTOBER 31, 1996.
G FOR THE PERIOD FEBRUARY 20, 1996 (COMMENCEMENT OF OPERATIONS) TO
OCTOBER 31, 1996.
H SIX MONTHS ENDED APRIL 30, 1997 (UNAUDITED)
CALIFORNIA MUNICIPAL INCOME - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C>
976. YEARS ENDED
OCTOBER 31
977.SELECTED PER-SHARE DATA AND RATIOS 1997F 1996G
978.NET ASSET VALUE, BEGINNING OF PERIOD $ 9.900 $ 10.000
979.INCOME FROM INVESTMENT OPERATIONS
980. NET INTEREST INCOME .174 .229
981. NET REALIZED AND UNREALIZED GAIN (LOSS) (.060) (.100)
982. TOTAL FROM INVESTMENT OPERATIONS .114 .129
983.LESS DISTRIBUTIONS
984. FROM NET INTEREST INCOME (.174) (.229)
985.NET ASSET VALUE, END OF PERIOD $ 9.840 $ 9.900
986.TOTAL RETURNB,C 1.14% 1.35%
987.NET ASSETS, END OF PERIOD (000 OMITTED) $ 676 $ 646
988.RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.65%A, 1.65%A,
D D
989.RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE 1.64%A,E 1.62%A,
REDUCTIONS E
990.RATIO OF NET INTEREST INCOME TO AVERAGE NET ASSETS 3.64%A 3.38%A
991.PORTFOLIO TURNOVER 13%A 21%A
</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 CONTINGENT DEFERRED 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 FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
F SIX MONTHS ENDED APRIL 30, 1997 (UNAUDITED)
G FOR THE PERIOD FEBRUARY 20, 1996 (COMMENCEMENT OF OPERATIONS) TO
OCTOBER 31, 1996.
NEW YORK MUNICIPAL INCOME - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C>
992. YEAR ENDED
OCTOBER 31
993.SELECTED PER-SHARE DATA AND RATIOS 1997 H 1996 F
994.NET ASSET VALUE, BEGINNING OF PERIOD $ 10.490 $ 10.290
995.INCOME FROM INVESTMENT OPERATIONS
996. NET INTEREST INCOME .231 .072
997. NET REALIZED AND UNREALIZED GAIN (LOSS) (.070) .200
998. TOTAL FROM INVESTMENT OPERATIONS .161 .272
999.LESS DISTRIBUTIONS
1000. FROM NET INTEREST INCOME (.231) (.072)
1001. FROM NET REALIZED GAIN (.060) --
1002. TOTAL DISTRIBUTIONS (.291) (.072)
1003.NET ASSET VALUE, END OF PERIOD $ 10.360 $ 10.490
1004.TOTAL RETURN B , C 1.54% 2.65%
1005.NET ASSETS, END OF PERIOD (000 OMITTED) $ 201 $ 102
1006.RATIO OF EXPENSES TO AVERAGE NET ASSETS .90% A , .90% A , D
D
1007.RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER .89% A , E .90% A
EXPENSE REDUCTIONS
1008.RATIO OF NET INTEREST INCOME TO AVERAGE NET ASSETS 4.35% A 4.43% A
1009.PORTFOLIO TURNOVER 18% A 17%
</TABLE>
NEW YORK MUNICIPAL INCOME - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1010. YEARS ENDED OCTOBER 31
1011.SELECTED PER-SHARE DATA AND RATIOS 1997 H 1996 1995 G
1012.NET ASSET VALUE, BEGINNING OF PERIOD $ 10.480 $ 10.400 $ 10 .000
1013.INCOME FROM INVESTMENT OPERATIONS
1014. NET INTE RES T INCOME .226 .444 .084
1015. NET REALIZED AND UNREALIZED GAIN (LOSS) (.060) .080 .400
1016. TOTAL FROM INVESTMENT OPERATIONS .166 .524 .484
1017.LESS DISTRIBUTIONS
1018. FROM N ET INTEREST INCOME (.226) (.444) (.084)
1019. FROM NET REALIZED GAIN (.060) -- --
1020. TOTAL DISTRIBUTIONS (.286) (.444) (.084)
1021.NET ASSET VALUE, END OF PERIOD $ 10.360 $ 10.480 $ 10.400
1022.TOTAL RETURN B , C 1.59% 5.15% 4.85%
1023.NET ASSETS, END OF PERIOD (000 OMITTED) $ 4,229 $ 4,125 $ 2,033
1024.RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.00% A , D 1.00% D 1.00% A , D
1025.RATIO OF EXPENSES TO AVERAGE NET ASSETS
AFTER .99% A , E .97% E 1.00% A
EXPENSE REDUCTIONS
1026.RATIO OF NET INTEREST INCOME TO AVERAGE
NET ASSETS 4.29% A 4.30% 4.16% A
1027.PORTFOLIO TURNOVER 18% A 17% 0%
</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 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 THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A
SHARES) TO OCTOBER 31, 1996.
G FOR THE PERIOD AUGUST 21, 1995 (COMMENCEMENT OF OPERATIONS) TO
OCTOBER 31, 1995.
H SIX MONTHS ENDED APRIL 30, 1997 (UNAUDITED)
NEW YORK MUNICIPAL INCOME - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1028. YEARS ENDED OCTOBER 31
1029.SELECTED PER-SHARE DATA AND RATIOS 1997 G 1996 1995 F
1030.NET ASSET VALUE, BEGINNING OF PERIOD $ 10.470 $ 10.390 $ 10 . 000
1031.INCOME FROM INVESTMENT OPERATIONS
1032. NET IN TEREST INCOME .192 .375 .074
1033. NET REALIZED AND UNREALIZED GAIN (LOSS) (.050) .080 .390
1034. TOTAL FROM INVESTMENT OPERATIONS .142 .455 .464
1035.LESS DISTRIBUTIONS
1036. FROM NET IN TEREST INCOME (.192) (.375) (.074)
1037. FROM NET REALIZED GAIN (.060) -- --
1038. TOTAL DISTRIBUTIONS (.252) (.375) (.074)
1039.NET ASSET VALUE, END OF PERIOD $ 10.360 $ 10.470 $ 10.390
1040.TOTAL RETURN B , C 1.36% 4.46% 4.65%
1041.NET ASSETS, END OF PERIOD (000 OMITTED) $ 2,677 $ 2,445 $ 1,161
1042.RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.65% A , D 1.66% D 1.75% A , D
1043.RATIO OF EXPENSES TO AVERAGE NET ASSETS
AFTER 1.64% A , E 1.62% E 1.75% A
EXPENSE REDUCTIONS
1044.RATIO OF NET IN TEREST INCOME TO
AVERAGE NET ASSETS 3.63% A 3.62% 3.52% A
1045.PORTFOLIO TURNOVER 18% A 17% 0%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURN S 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 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 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 THE PERIOD AUGUST 21, 1995 (COMMENCEMENT OF OPERATIONS) TO
OCTOBER 31, 1995.
G SIX M ONTHS ENDED APRIL 30, 1997 (UNAUDITED)
KEY FACTS
PERFORMANCE
Mutual fund performance is commonly measured as TOTAL RETURN and/or
YIELD.
For Growth Opportunities, Balanced, High Yield, Government Investment,
Short Fixed-Income, High Income Municipal, California Municipal
Income, and New York Municipal Income , the fiscal year runs
from November 1 to October 31. For TechnoQuant Growth, Mid Cap, Equity
Growth, 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 Opportunities, Strategic Income, and Municipal Bond, the
fiscal year runs from January 1 to December 31. For Mortgage
Securities the fiscal year runs from August 1 to July 31. The tables
below show the performance of each class of each fund (except Mortgage
Securities) over past fiscal periods ended April 30, 1997, May 31,
1997, or June 30, 1997, as indicated. The performance of each
class of Mortgage Securities over past fiscal years is shown in the
tables below. 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>
<S> <C> <C> <C> <C> <C> <C> <C>
AVERAGE ANNUAL TOTAL RETURN [F] CUMULATIVE TOTAL RETURN [F]
PAST 1 YEAR PAST 5 YEARS 10 YEARS/ PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS 10 YEARS/
LIFE OF FUND+ LIFE OF FUND+
TECHNOQU N/A N/A N/A N/A N/A N/A 0.00%
ANT
GROWTH -
CLASS A [C]
TECHNOQU N/A N/A N/A N/A N/A N/A -5.75%
ANT
GROWTH -
CLASS A
(LOAD ADJ.)
[A][C]
MID CAP - 9.91% N/A 18.22% 5.87% 9.91% N/A 23.87%
CLASS A [C]
MID CAP - 3.59% N/A 12.87% -0.21% 3.59% N/A 16.75%
CLASS A
(LOAD ADJ.)
[A][C]
EQUITY 14.73% 18.31% 18.87% 6.43% 14.73% 131.81% 463.19%
GROWTH -
CLASS A[C]
EQUITY 8.13% 16.92% 18.17% 0.31% 8.13% 118.48% 430.81%
GROWTH -
CLASS A
(LOAD ADJ.)
[A][C]
GROWTH 20.37% 17.39% 20.74% 10.65% 20.37% 122.88% 494.57%
OPPORTUNIT
IES - CLASS
A[B]
GROWTH 13.45% 16.00% 19.99% 4.28% 13.45% 110.07% 460.38%
OPPORTUNIT
IES - CLASS
A
(LOAD
ADJ.)[A][B]
STRATEGIC 14.60% 13.80% 11.79% 12.88% 14.60% 90.85% 204.89%
OPPORTUNIT
IES - CLASS
A [D]
STRATEGIC 8.01% 12.46% 11.13% 6.39% 8.01% 79.87% 187.36%
OPPORTUNIT
IES - CLASS
A
(LOAD ADJ.)
[A][D]
LARGE CAP 21.73% N/A 19.71% 6.40% 21.73% N/A 25.87%
- CLASS A
[C]
LARGE CAP 14.73% N/A 14.29% 0.28% 14.73% N/A 18.63%
- CLASS A
(LOAD ADJ.)
[A][C]
GROWTH & N/A N/A N/A N/A N/A N/A 9.21%
INCOME -
CLASS A [C]
GROWTH & N/A N/A N/A N/A N/A N/A 2.93%
INCOME -
CLASS A
(LOAD ADJ.)
[A][C]
EQUITY 19.51% 17.63% 12.96% 9.02% 19.51% 125.20% 238.28%
INCOME -
CLASS A [C]
EQUITY 12.64% 16.24% 12.29% 2.75% 12.64% 112.25% 218.83%
INCOME -
CLASS A
(LOAD ADJ.)
[A][C]
BALANCED 16.25% 9.39% 11.17% 9.26% 16.25% 56.67% 188.38%
- CLASS
A[B]
BALANCED 9.57% 8.11% 10.52% 2.97% 9.57% 47.66% 171.80%
- CLASS A
(LOAD
ADJ.)[A][B]
TAXABLE BOND FUNDS
- - - CLASS A
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
AVERAGE ANNUAL TOTAL RETURN [F] CUMULATIVE TOTAL RETURN [F]
PAST 1 YEAR PAST 5 YEARS 10 YEARS/ PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS 10 YEARS/
LIFE OF FUND+ LIFE OF FUND+
HIGH
YIELD 9.42% 11.94% 13.24% 3.28% 9.42% 75.78% 246.74%
- CLASS
A[B]
HIGH YIELD 4.22% 10.86% 12.69% -1.63% 4.22% 67.43% 230.29%
- CLASS A
(LOAD
ADJ.)[A][B]
STRATEGIC 13.73% N/A 14.67% 4.49% 13.73% N/A 44.08%
INCOME -
CLASS A [D]
STRATEGIC 8.33% N/A 12.60% -0.48% 8.33% N/A 37.23%
INCOME -
CLASS A
(LOAD
ADJ.)[A][D]
MORTGAGE 10.25% 7.65% 8.80% N/A 10.25% 44.60% 132.33%
SECURITIES
- CLASS
A[E]
MORTGAGE 5.01% 6.61% 8.27% N/A 5.01% 37.73% 121.29%
SECURITIES -
CLASS A
(LOAD ADJ.)
[A][E]
GOVERNME 5.87% 6.43% 7.42% 1.17% 5.87% 36.53% 104.61%
NT
INVESTMENT
- CLASS A
[B]
GOVERNMEN 0.84% 5.40% 6.90% -3.64% 0.84% 30.05% 94.89%
T
INVESTMENT
- CLASS A
(LOAD ADJ.)
[A][B]
INTERMEDIA 6.36% 6.29% 7.91% 1.07% 6.36% 35.69% 114.06%
TE BOND -
CLASS A [C]
INTERMED
IATE 2.37% 5.48% 7.50% 2.72% 2.37% 30.60% 106.03%
BOND -
CLASS A
(LOAD ADJ.)
[A][C]
SHORT 5.32% 5.24% 6.95% 1.80% 5.32% 29.09% 90.96%
FIXED-INCO
ME - CLASS
A [B]
SHORT 3.74% 4.92% 6.78% 0.27% 3.74% 27.16% 88.10%
FIXED-INCO
ME - CLASS
A
(LOAD
ADJ.)[A][B]
</TABLE>
MUNICIPAL FUNDS - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
AVERAGE ANNUAL TOTAL RETURN [F] CUMULATIVE TOTAL RETURN [F]
PAST 1 YEAR PAST 5 YEARS 10 YEARS/ PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS 10 YEARS/
LIFE OF FUND+ LIFE OF FUND+
HIGH 6.36% 6.49% 8.89% 2.46% 6.36% 36.94% 127.09%
INCOME
MUNICIPAL
- CLASS A
[B]
HIGH 1.31% 5.46% 8.34% -2.41% 1.31% 30.43% 116.31%
INCOME
MUNICIPAL
- CLASS A
(LOAD
ADJ.)[A][B]
MUNICIPAL 7.76% 6.45% 7.84% 2.89% 7.76% 36.67% 112.73%
BOND -
CLASS A [D]
MUNICIPAL 2.64% 5.42% 7.32% -1.99% 2.64% 30.17% 102.63%
BOND -
CLASS A
(LOAD
ADJ.)[A] [D]
INTERMEDIA 6.66% 5.49% 6.52% 1.38% 6.66% 30.65% 87.99%
TE
MUNICIPAL
INCOME -
CLASS A [C]
INTERMEDIA 2.66% 4.69% 6.11% -2.42% 2.66% 25.75% 80.94%
TE
MUNICIPAL
INCOME -
CLASS A
(LOAD
ADJ.)[A][C]
SHORT-
INTER 4.67% N/A 4.62% 1.32% 4.67% N/A 15.61%
MEDIATE
MUNICIPAL
INCOME -
CLASS A [C]
SHORT-
INTER 3.10% N/A 4.13% -0.20% 3.10% N/A 13.88%
MEDIATE
MUNICIPAL
INCOME -
CLASS A
(LOAD
ADJ.)[A][C]
</TABLE>
STATE MUNICIPAL FUNDS - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
AVERAGE ANNUAL TOTAL RETURN [F] CUMULATIVE TOTAL RETURN [F]
PAST 1 YEAR PAST 5 YEARS 10 YEARS/ PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS 10 YEARS/
LIFE OF FUND+ LIFE OF FUND+
CALIFORNIA 6.24% N/A 2.85% 1.41% 6.24% N/A 3.41%
MUNICIPAL
INCOME -
CLASS A [B]
CALIFORNIA 1.20% N/A -1.26% -3.40% 1.20% N/A -1.50%
MUNICIPAL
INCOME -
CLASS A
(LOAD
ADJ.)[A][B]
NEW YORK 6.07% N/A 6.93% 1.54% 6.07% N/A 12.03%
MUNICIPAL
INCOME -
CLASS A [B]
NEW YORK 1.03% N/A 3.90% -3.28% 1.03% N/A 6.71%
MUNICIPAL
INCOME -
CLASS A
(LOAD
ADJ.)[A][B]
</TABLE>
EQUITY FUNDS - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
AVERAGE ANNUAL TOTAL RETURN [F] CUMULATIVE TOTAL RETURN [F]
PAST 1 YEAR PAST 5 YEARS 10 YEARS/ PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS 10 YEARS/
LIFE OF FUND+ LIFE OF FUND+
TECHNOQU N/A N/A N/A N/A N/A N/A -0.10%
ANT
GROWTH -
CLASS T[C]
TECHNOQU N/A N/A N/A N/A N/A N/A -3.60%
ANT
GROWTH -
CLASS T
(LOAD ADJ.)
[A][C]
MID CAP - 9.98% N/A 18.28% 5.94% 9.98% N/A 23.95%
CLASS T[C]
MID CAP - 6.13% N/A 15.03% 2.23% 6.13% N/A 19.61%
CLASS T
(LOAD ADJ.)
[A][C]
EQUITY 14.86% 18.34% 18.88% 6.53% 14.86% 132.07% 463.83%
GROWTH -
CLASS T [C]
EQUITY 10.84% 17.50% 18.46% 2.80% 10.84% 123.95% 444.10%
GROWTH -
CLASS T
(LOAD ADJ.)
[A][C]
GROWTH 20.35% 17.38% 20.74% 10.56% 20.35% 122.84% 494.45%
OPPORTUNIT
IES - CLASS
T [B]
GROWTH 16.14% 16.55% 20.29% 6.69% 16.14% 115.04% 473.64%
OPPORTUNIT
IES - CLASS
T
(LOAD
ADJ.)[A][B]
STRATEGIC 14.67% 13.81% 11.80% 12.96% 14.67% 90.97% 205.08%
OPPORTUNIT
IES - CLASS
T [D]
STRATEGIC 10.66% 13.00% 11.40% 9.01% 10.66% 84.28% 194.40%
OPPORTUNIT
IES - CLASS
T
(LOAD ADJ.)
[A][D]
LARGE CAP 21.71% N/A 19.69% 6.47% 21.71% N/A 25.85%
- CLASS T
[C]
LARGE CAP 17.45% N/A 16.41% 2.75% 17.45% N/A 21.45%
- CLASS T
(LOAD ADJ.)
[A][C]
GROWTH & N/A N/A N/A N/A N/A N/A 8.91%
INCOME -
CLASS T [C]
GROWTH & N/A N/A N/A N/A N/A N/A 5.09%
INCOME -
CLASS T
(LOAD ADJ.)
[A][C]
EQUITY 19.70% 17.67% 12.98% 9.11% 19.70% 125.56% 238.83%
INCOME -
CLASS T [C]
EQUITY 15.51% 16.83% 12.58% 5.29% 15.51% 117.67% 226.97%
INCOME -
CLASS T
(LOAD ADJ.)
[A][C]
BALANCED 16.44% 9.43% 11.19% 9.37% 16.44% 56.93% 188.86%
- CLASS T
[B]
BALANCED 12.37% 8.65% 10.80% 5.55% 12.37% 51.43% 178.75%
- CLASS T
(LOAD
ADJ.)[A][B]
</TABLE>
TAXABLE BOND FUNDS - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
AVERAGE ANNUAL TOTAL RETURN [F] CUMULATIVE TOTAL RETURN [F]
PAST 1 YEAR PAST 5 YEARS 10 YEARS/ PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS 10 YEARS/
LIFE OF FUND+ LIFE OF FUND+
HIGH
YIELD 9.67% 11.99% 13.27% 3.31% 9.67% 76.18% 247.53%
- CLASS T
[B]
HIGH
YIELD 5.83% 11.20% 12.86% -0.31% 5.83% 70.01% 235.37%
- CLASS T
(LOAD
ADJ.)[A]][B]
STRATEGIC 13.86% N/A 14.72% 4.53% 13.86% N/A 44.24%
INCOME -
CLASS T [D]
STRATEGIC 9.88% N/A 13.20% 0.88% 9.88% N/A 39.20%
INCOME -
CLASS T
(LOAD
ADJ.)[A][D]
MORTGAGE 10.20% 7.65% 8.79% N/A 10.20% 44.54% 132.24%
SECURITIES
- CLASS T
[E]
MORTGAGE 6.35% 6.88% 8.40% N/A 6.35% 39.48% 124.11%
SECURITIES -
CLASS T
(LOAD ADJ.)
[A][E]
GOVERNME 5.74% 6.40% 7.41% 1.01% 5.74% 36.36% 104.35%
NT
INVESTMENT
- CLASS T
[B]
GOVERNMEN 2.04% 5.64% 7.03% -2.53% 2.04% 31.59% 97.20%
T
INVESTMENT
- CLASS T
(LOAD ADJ.)
[A][B]
INTERME
DIA 6.48% 6.32% 7.92% 0.96% 6.48% 35.84% 114.31%
TE BOND -
CLASS T [C]
INTERMED
IATE 3.55% 5.73% 7.62% -1.82% 3.55% 32.11% 108.42%
BOND -
CLASS T
(LOAD ADJ.)
[A] [C]
SHORT 5.82% 5.34% 7.00% 2.12% 5.82% 29.71% 91.87%
FIXED-INCO
ME - CLASS
T [B]
SHORT 4.23% 5.02% 6.83% 0.59% 4.23% 27.76% 88.99%
FIXED-INCO
ME - CLASS
T
(LOAD
ADJ.)[A][B]
</TABLE>
MUNICIPAL FUNDS - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
AVERAGE ANNUAL TOTAL RETURN [F] CUMULATIVE TOTAL RETURN [F]
PAST 1 YEAR PAST 5 YEARS 10 YEARS/ PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS 10 YEARS/
LIFE OF FUND+ LIFE OF FUND+
HIGH 6.40% 6.50% 8.89% 2.26% 6.40% 36.99% 127.18%
INCOME
MUNICIPAL
- CLASS T
[B]
HIGH 2.68% 5.74% 8.49% -1.32% 2.68% 32.20% 119.23%
INCOME
MUNICIPAL
- CLASS T
(LOAD
ADJ.)[A][B]
MUNICIPAL 7.61% 6.42% 7.83% 2.75% 7.61% 36.48% 112.44%
BOND -
CLASS T [D]
MUNICIPAL 3.84% 5.66% 7.44% -0.85% 3.84% 31.70% 105.00%
BOND -
CLASS T
(LOAD
ADJ.)[A][D]
INTERMEDIA 6.72% 5.50% 6.52% 1.43% 6.72% 30.72% 88.09%
TE
MUNICIPAL
INCOME -
CLASS T [C]
INTERMEDIA 3.78% 4.92% 6.22% -1.36% 3.78% 27.12% 82.92%
TE
MUNICIPAL
INCOME -
CLASS T
(LOAD
ADJ.)[A][C]
SHORT-
INTER 4.68% N/A 4.62% 1.31% 4.68% N/A 15.62%
MEDIATE
MUNICIPAL
INCOME -
CLASS T [C]
SHORT-
INTER 3.11% N/A 4.13% -0.21% 3.11% N/A 13.89%
MEDIATE
MUNICIPAL
INCOME -
CLASS T
(LOAD
ADJ.)[A][C]
</TABLE>
STATE MUNICIPAL FUNDS - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
AVERAGE ANNUAL TOTAL RETURN [F] CUMULATIVE TOTAL RETURN [F]
PAST 1 YEAR PAST 5 YEARS 10 YEARS/ PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS 10 YEARS/
LIFE OF FUND+ LIFE OF FUND+
CALIFORNIA 6.31% N/A 2.90% 1.46% 6.31% N/A 3.48%
MUNICIPAL
INCOME -
CLASS T[B]
CALIFORNIA 2.59% N/A -0.12% -2.09% 2.59% N/A -0.14%
MUNICIPAL
INCOME -
CLASS T
(LOAD
ADJ.)[A][B]
NEW YORK 6.04% N/A 6.91% 1.59% 6.04% N/A 12.00%
MUNICIPAL
INCOME -
CLASS T [B]
NEW YORK 2.33% N/A 4.69% -1.97% 2.33% N/A 8.08%
MUNICIPAL
INCOME -
CLASS T
(LOAD
ADJ.)[A][B]
</TABLE>
EQUITY FUNDS - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
AVERAGE ANNUAL TOTAL RETURN [F] CUMULATIVE TOTAL RETURN [F]
PAST 1 YEAR PAST 5 YEARS 10 YEARS/ PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS 10 YEARS/
LIFE OF FUND+ LIFE OF FUND+
TECHNOQU N/A N/A N/A N/A N/A N/A -0.40%
ANT
GROWTH -
CLASS B [C]
TECHNOQU N/A N/A N/A N/A N/A N/A -5.38%
ANT
GROWTH -
CLASS B
(LOAD
ADJ.)[A][C]
MID CAP - 9.09% N/A 17.28% 5.61% 9.09% N/A 22.62%
CLASS B [C]
MID CAP - 4.09% N/A 14.28% 0.61% 4.09% N/A 18.62%
CLASS B
(LOAD
ADJ.)[A][C]
EQUITY 13.94% 18.15% 18.79% 5.68% 13.94% 130.21% 459.32%
GROWTH -
CLASS B [C]
EQUITY 8.94% 17.94% 18.79% 0.68% 8.94% 128.21% 459.32%
GROWTH -
CLASS B
(LOAD ADJ.)
[A][C]
GROWTH 20.28% 17.37% 20.73% 10.50% 20.28% 122.72% 494.13%
OPPORTUNIT
IES - CLASS
B [B]
GROWTH 15.28% 17.16% 20.73% 5.50% 15.28% 120.72% 494.13%
OPPORTUNIT
IES - CLASS
B
(LOAD
ADJ.)[A][B]
STRATEGIC 14.10% 13.49% 11.64% 12.65% 14.10% 88.25% 200.74%
OPPORTUNIT
IES - CLASS
B [D]
STRATEGIC 9.10% 13.25% 11.64% 7.65% 9.10% 86.25% 200.74%
OPPORTUNIT
IES - CLASS
B
(LOAD ADJ.)
[A][D]
LARGE CAP 20.85% N/A 18.94% 6.07% 20.85% N/A 24.84%
- CLASS B
[C]
LARGE CAP 15.85% N/A 15.95% 1.07% 15.85% N/A 20.84%
- CLASS B
(LOAD
ADJ.)[A][C]
GROWTH & N/A N/A N/A N/A N/A N/A 8.81%
INCOME -
CLASS B [C]
GROWTH & N/A N/A N/A N/A N/A N/A 3.81%
INCOME -
CLASS B
(LOAD
ADJ.)[A][C]
EQUITY 19.13% 17.38% 12.84% 8.91% 19.13% 122.82% 234.71%
INCOME -
CLASS B [C]
EQUITY 14.13% 17.17% 12.84% 3.91% 14.13% 120.82% 234.71%
INCOME -
CLASS B
(LOAD
ADJ.)[A][C]
BALANCED 16.04% 9.35% 11.15% 8.99% 16.04% 56.38% 187.85%
- CLASS B
[B]
BALANCED 11.04% 9.07% 11.15% 3.99% 11.04% 54.38% 187.85%
- CLASS B
(LOAD
ADJ.)[A][B]
</TABLE>
TAXABLE BOND FUNDS - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
AVERAGE ANNUAL TOTAL RETURN [F] CUMULATIVE TOTAL RETURN [F]
PAST 1 YEAR PAST 5 YEARS 10 YEARS/ PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS 10 YEARS/
LIFE OF FUND+ LIFE OF FUND+
HIGH YIELD 8.98% 11.46% 13.00% 2.99% 8.98% 72.06% 239.41%
- CLASS B
[B]
HIGH YIELD 4.00% 11.20% 13.00% -1.89% 4.00% 70.06% 239.41%
- CLASS B
(LOAD
ADJ.)[A][B]
STRATEGIC 13.22% N/A 13.99% 4.28% 13.22% N/A 41.82%
INCOME -
CLASS B [D]
STRATEGIC 8.22% N/A 13.08% -0.72% 8.22% N/A 38.82%
INCOME -
CLASS B
(LOAD
ADJ.)[A][D]
MORTGAGE 9.81% 7.57% 8.75% N/A 9.81% 44.02% 131.40%
SECURITIES
- CLASS B
[E]
MORTGAGE 4.81% 7.27% 8.75% N/A 4.81% 42.02% 131.40%
SECURITIES -
CLASS B
(LOAD ADJ.)
[A][E]
GOVERNME 5.18% 5.97% 7.19% 0.70% 5.18% 33.63% 100.26%
NT
INVESTMENT
- CLASS B
[B]
GOVERNME 0.20% 5.66% 7.19% -4.20% 0.20% 31.67% 100.26%
NT
INVESTMENT
- CLASS B
(LOAD
ADJ.)[A][B]
INTERMEDIA 5.86% 5.84% 7.68% 0.70% 5.86% 32.85% 109.58%
TE BOND -
CLASS B [C]
INTERMEDIA 2.86% 5.84% 7.68% -2.24% 2.86% 32.85% 109.58%
TE BOND -
CLASS B
(LOAD
ADJ.)[A][C]
</TABLE>
MUNICIPAL FUNDS - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
AVERAGE ANNUAL TOTAL RETURN [F] CUMULATIVE TOTAL RETURN [F]
PAST 1 YEAR PAST 5 YEARS 10 YEARS/ PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS 10 YEARS/
LIFE OF FUND+ LIFE OF FUND+
HIGH 5.64% 5.99% 8.63% 1.87% 5.64% 33.78% 121.85%
INCOME
MUNICIPAL
- CLASS B
[B]
HIGH 0.64% 5.67% 8.63% -3.10% 0.64% 31.78% 121.85%
INCOME
MUNICIPAL
- CLASS B
(LOAD
ADJ.)[A][B]
MUNICIPAL 7.10% 6.32% 7.77% 2.57% 7.10% 35.83% 111.43%
BOND -
CLASS B [D]
MUNICIPAL 2.10% 6.01% 7.77% -2.43% 2.10% 33.90% 111.43%
BOND -
CLASS B
(LOAD
ADJ.)[A][D]
INTERMEDIA 6.04% 5.04% 6.29% 1.01% 6.04% 27.85% 83.97%
TE
MUNICIPAL
INCOME -
CLASS B [C]
INTERMEDIA 3.04% 5.04% 6.29% -1.96% 3.04% 27.85% 83.97%
TE
MUNICIPAL
INCOME -
CLASS B
(LOAD
ADJ.)[A][C]
</TABLE>
STATE MUNICIPAL FUNDS - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
AVERAGE ANNUAL TOTAL RETURN [F] CUMULATIVE TOTAL RETURN [F]
PAST 1 YEAR PAST 5 YEARS 10 YEARS/ PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS 10 YEARS/
LIFE OF FUND+ LIFE OF FUND+
CALIFORNIA 5.51% N/A 2.10% 1.14% 5.51% N/A 2.51%
MUNICIPAL
INCOME -
CLASS B [B]
CALIFORNIA 0.51% N/A -1.19% -3.83% 0.51% N/A -1.43%
MUNICIPAL
INCOME -
CLASS B
(LOAD
ADJ.)[A][B]
NEW YORK 5.47% N/A 6.24% 1.36% 5.47% N/A 10.81%
MUNICIPAL
INCOME -
CLASS B [B]
NEW YORK 0.47% N/A 3.96% -3.59% 0.47% N/A 6.81%
MUNICIPAL
INCOME -
CLASS B
(LOAD
ADJ.)[A][B]
</TABLE>
EQUITY FUNDS - CLASS C
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
AVERAGE ANNUAL TOTAL RETURN [F] CUMULATIVE TOTAL RETURN [F]
PAST 1 YEAR PAST 5 YEARS 10 YEARS/ PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS 10 YEARS/
LIFE OF FUND+ LIFE OF FUND+
TECHNOQU N/A N/A N/A N/A N/A N/A -0.40%
ANT
GROWTH -
CLASS C [C]
TECHNOQU N/A N/A N/A N/A N/A N/A -1.40%
ANT
GROWTH -
CLASS C
(LOAD ADJ.)
[A][C]
MID CAP - 9.09% N/A 17.28% 5.61% 9.09% N/A 22.62%
CLASS C [C]
MID CAP - 8.09% N/A 17.28% 4.61% 8.09% N/A 22.62%
CLASS C
(LOAD ADJ.)
[A][C]
EQUITY 13.94% 18.15% 18.79% 5.68% 13.94% 130.21% 459.32%
GROWTH -
CLASS C[C]
EQUITY 12.94% 18.15% 18.79% 4.68% 12.94% 130.21% 459.32%
GROWTH -
CLASS C
(LOAD ADJ.)
[A][C]
GROWTH 20.28% 17.37% 20.73% 10.50% 20.28% 122.72% 494.13%
OPPORTUNIT
IES - CLASS
C[B]
GROWTH 19.28% 17.37% 20.73% 9.50% 19.28% 122.72% 494.13%
OPPORTUNIT
IES - CLASS
C
(LOAD
ADJ.)[A][B]
LARGE CAP 20.85% N/A 18.94% 6.07% 20.85% N/A 24.84%
- CLASS C
[C]
LARGE CAP 19.85% N/A 18.94% 5.07% 19.85% N/A 24.84%
- CLASS C
(LOAD ADJ.)
[A][C]
GROWTH & N/A N/A N/A N/A N/A N/A 8.81%
INCOME -
CLASS C [C]
GROWTH & N/A N/A N/A N/A N/A N/A 7.81%
INCOME -
CLASS C
(LOAD ADJ.)
[A][C]
EQUITY 19.13% 17.38% 12.84% 8.91% 19.13% 122.82% 234.71%
INCOME -
CLASS C [C]
EQUITY 18.13% 17.38% 12.84% 7.91% 18.13% 122.82% 234.71%
INCOME -
CLASS C
(LOAD ADJ.)
[A][C]
BALANCED 16.04% 9.35% 11.15% 8.99% 16.04% 56.38% 187.85%
- CLASS
C[B]
BALANCED 15.04% 9.35% 11.15% 7.99% 15.04% 56.38% 187.85%
- CLASS C
(LOAD
ADJ.)[A][B]
</TABLE>
TAXABLE BOND FUNDS - CLASS C
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
AVERAGE ANNUAL TOTAL RETURN [F] CUMULATIVE TOTAL RETURN [F]
PAST 1 YEAR PAST 5 YEARS 10 YEARS/ PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS 10 YEARS/
LIFE OF FUND+ LIFE OF FUND+
HIGH YIELD 8.98% 11.46% 13.00% 2.99% 8.98% 72.06% 239.41%
- CLASS
C[B]
HIGH YIELD 7.98% 11.46% 13.00% 1.99% 7.98% 72.06% 239.41%
- CLASS C
(LOAD
ADJ.)[A][B]
STRATEGIC 13.22% N/A 13.99% 4.28% 13.22% N/A 41.82%
INCOME -
CLASS C [D]
STRATEGIC 12.22% N/A 13.99% 3.28% 12.22% N/A 41.82%
INCOME -
CLASS C
(LOAD
ADJ.)[A][D]
GOVERNME 5.18% 5.97% 7.19% 0.70% 5.18% 33.63% 100.26%
NT
INVESTMENT
- CLASS C
[B]
GOVERNMEN 4.18% 5.97% 7.19% -0.30% 4.18% 33.63% 100.26%
T
INVESTMENT
- CLASS C
(LOAD ADJ.)
[A][B]
INTERMEDIA 5.86% 5.84% 7.68% 0.70% 5.86% 32.85% 109.58%
TE BOND -
CLASS C [C]
INTERMED
IATE 4.86% 5.84% 7.68% -0.30% 4.86% 32.85% 109.58%
BOND -
CLASS C
(LOAD ADJ.)
[A][C]
SHORT 5.82% 5.34% 7.00% 2.12% 5.82% 29.71% 91.87%
FIXED-INCO
ME - CLASS
C [B]
SHORT 4.82% 5.34% 7.00% 1.12% 4.82% 29.71% 91.87%
FIXED-INCO
ME - CLASS
C
(LOAD
ADJ.)[A][B]
</TABLE>
MUNICIPAL FUNDS - CLASS C
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
AVERAGE ANNUAL TOTAL RETURN [F] CUMULATIVE TOTAL RETURN [F]
PAST 1 YEAR PAST 5 YEARS 10 YEARS/ PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS 10 YEARS/
LIFE OF FUND+ LIFE OF FUND+
HIGH 5.64% 5.99% 8.63% 1.87% 5.64% 33.78% 121.85%
INCOME
MUNICIPAL
- CLASS C
[B]
HIGH 4.64% 5.99% 8.63% 0.87% 4.64% 33.78% 121.85%
INCOME
MUNICIPAL
- CLASS C
(LOAD
ADJ.)[A][B]
INTERMEDIA 6.04% 5.04% 6.29% 1.01% 6.04% 27.85% 83.97%
TE
MUNICIPAL
INCOME -
CLASS C [C]
INTERMEDIA 5.04% 5.04% 6.29% 0.01% 5.04% 27.85% 83.97%
TE
MUNICIPAL
INCOME -
CLASS C
(LOAD
ADJ.)[A][C]
</TABLE>
+ LIFE OF FUND FIGURES ARE FROM COMMENCEMENT OF OPERATIONS
(NOVEMBER 18, 1987 FOR GROWTH OPPORTUNITIES; OCTOBER 31, 1994 FOR
STRATEGIC INCOME; SEPTEMBER 16, 1987 FOR SHORT FIXED-INCOME AND HIGH
INCOME MUNICIPAL; MARCH 16, 1994 FOR SHORT-INTERMEDIATE MUNICIPAL
INCOME; AUGUST 21, 1995 FOR NEW YORK MUNICIPAL INCOME; FEBRUARY 20,
1996 FOR MID CAP, LARGE CAP, AND CALIFORNIA MUNICIPAL INCOME; AND
DECEMBER 31, 1996 FOR TECHNOQUANT GROWTH AND GROWTH & INCOME) THROUGH
THE SEMIANNUAL PERIODS ENDED 1997 (THROUGH THE ANNUAL PERIOD ENDED
1997 FOR MORTGAGE SECURITIES).
[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
.
[B] PERIOD ENDED APRIL 30, 1997.
[C] PERIOD ENDED MAY 31, 1997.
[D] PERIOD ENDED JUNE 30, 1997.
[E] PERIOD ENDED JULY 31, 1997.
[F] INITIAL OFFERING OF CLASS A FOR EACH FUND (EXCEPT MORTGAGE
SECURITIES, MUNICIPAL BOND, 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
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 WOULD HAVE BEEN HIGHER.
FOR EQUITY GROWTH, EQUITY INCOME, INTERMEDIATE BOND, AND
INTERMEDIATE MUNICIPAL INCOME, 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 A OF MUNICIPAL BOND TOOK PLACE ON MARCH
3, 1997. CLASS A RETURNS PRIOR TO MARCH 3, 1997 THROUGH JULY 1, 1996
ARE THOSE OF CLASS T WHICH REFLECT A 12B-1 FEE OF 0.25%. CLASS A
RETURNS PRIOR TO JULY 1, 1996 ARE THOSE OF INITIAL CLASS WHICH HAS NO
12B-1 FEE. IF CLASS A'S 12B-1 FEE HAD BEEN REFLECTED, TOTAL RETURNS
PRIOR TO MARCH 3, 1997 THROUGH JULY 1, 1996 WOULD HAVE BEEN HIGHER AND
TOTAL RETURNS PRIOR TO JULY 1, 1996 WOULD HAVE BEEN LOWER.
INITIAL OFFERING OF CLASS T AND CLASS B OF MUNICIPAL BOND TOOK
PLACE ON JULY 1, 1996. CLASS T AND CLASS B RETURNS PRIOR TO JULY 1,
1996 ARE THOSE OF INITIAL CLASS WHICH HAS NO 12B-1 FEE. IF CLASS T'S
AND CLASS B'S RESPECTIVE 12B-1 FEES HAD BEEN REFLECTED, TOTAL RETURNS
PRIOR TO JULY 1, 1996 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 HIGH INCOME MUNICIPAL 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.
CLASS C OF EACH FUND (EXCEPT STRATEGIC OPPORTUNITIES, MORTGAGE
SECURITIES, MUNICIPAL BOND, SHORT-INTERMEDIATE MUNICIPAL INCOME,
CALIFORNIA MUNICIPAL INCOME, AND NEW YORK MUNICIPAL INCOME) IS
EXPECTED TO COMMENCE OPERATIONS ON OR ABOUT NOVEMBER 3, 1997.
CLASS C RETURNS FOR TECHNOQUANT GROWTH, MID CAP, LARGE CAP, AND
GROWTH & INCOME FOR THE PERIOD ENDED MAY 31, 1997 ARE THOSE OF CLASS B
WHICH REFLECT A 12B-1 FEE OF 1.00%.
CLASS C RETURNS FOR STRATEGIC INCOME FOR THE PERIOD ENDED JUNE 30,
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 AFTER DECEMBER 31, 1995 WOULD HAVE BEEN LOWER.
CLASS C RETURNS FOR EQUITY GROWTH FROM MAY 31, 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.
CLASS C RETURNS FOR GROWTH OPPORTUNITIES FROM APRIL 30, 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.
CLASS C RETURNS FOR BALANCED FROM APRIL 30, 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.
CLASS C RETURNS FOR HIGH YIELD, GOVERNMENT INVESTMENT, AND HIGH
INCOME MUNICIPAL FROM APRIL 30, 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 APRIL 30, 1997 THROUGH DECEMBER 31,
1995 AND PRIOR TO JUNE 30, 1994 WOULD HAVE BEEN LOWER.
CLASS C RETURNS FOR SHORT FIXED-INCOME FOR THE PERIOD ENDED APRIL
30, 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.
CLASS C RETURNS FOR EQUITY INCOME, INTERMEDIATE BOND, AND
INTERMEDIATE MUNICIPAL INCOME FROM MAY 31, 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 MAY 31, 1997 THROUGH DECEMBER
31, 1995 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 securities.
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.
SALOMON BROTHERS MORTGAGE 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 Fannie Mae
and FHLMC balloon mortgages with fixed-rate coupons.
SALOMON BROTHERS TREASURY/AGENCY INDEX is a market capitalization
weighted index of U.S. Treasury and U.S. government agency securities
with fixed-rate coupons and weighted average lives of at least one
year.
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.
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.
Each class of each equity fund may quote its adjusted net asset value
including all distributions paid. This value may be averaged over
specified periods and may be used to calculate a class's moving
average.
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.
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,
Equity Growth, Mid Cap, Large Cap, and Growth & Income are diversified
funds of Fidelity Advisor Series I, a Massachusetts business trust
organized on June 24, 1983. Growth Opportunities, 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. High Income
Municipal is a diversified fund and California Municipal Income and
New York Municipal Income are non-diversified funds 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. Strategic Opportunities is a diversified fund of
Fidelity Advisor Series VIII, a Massachusetts business trust organized
on September 22, 1983. Mortgage Securities is a diversified fund of
Fidelity Income Fund, a Massachusetts business trust organized on
August 7, 1984. Municipal Bond is a diversified fund of Fidelity
Municipal Trust, a Massachusetts business trust organized on June 22,
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, High Income Municipal, Municipal Bond, Intermediate
Municipal Income, Short-Intermediate Municipal Income, California
Municipal Income, and New York 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 September 30, 1997, FMR advised funds having approximately 33
million shareholder accounts with a total value of more than
$ 521 billion.
John Avery is associate 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 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.
Bettina Doulton is Vice President and lead manager of Advisor
Balanced, which she has managed since March 1996. She also manages
other Fidelity funds. Since joining Fidelity in 1986, Ms. Doulton has
worked as a research assistant, analyst , and manager.
Andrew Dudley is manager of Advisor Short Fixed-Income, which he has
managed since February 1997. 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.
George Fischer is Vice President and manager of Advisor Municipal Bond
and Advisor High Income Municipal, which he has managed since October
1995 and April 1997, respectively. He also manages several other
Fidelity funds. Since joining Fidelity in 1989, Mr. Fischer has worked
as an analyst and manager.
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.
Previously, he was a quantitative analyst. Mr. Krochuk joined Fidelity
as a research associate in 1992, after receiving a bachelor of arts
degree in economics/pre-med from Harvard University.
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 New York Municipal
Income and Advisor Short-Intermediate Municipal Income, which he has
managed since August 1995 and October 1995, respectively. He also
manages several other Fidelity funds. Since joining Fidelity in
1986, Mr. Lind has worked as an analyst and manager.
David Murphy is Vice President and manager of Advisor Intermediate
Municipal Income, which he has managed since March 1995. He also
manages several other Fidelity funds. Mr. Murphy joined Fidelity as a
portfolio manager in 1989.
Jonathan Short is Vice President and manager of Advisor California
Municipal Income, which he has managed since inception. 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
h as 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. 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 several 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 High Income Municipal,
Municipal Bond, Intermediate Municipal Income, Short-Intermediate
Municipal Income, California Municipal Income, and New York 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, 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.
As of September 30, 1997, approximately 41.85 % and
29.83 % of California Municipal Income's and New York
Municipal Income's total outstanding shares, respectively, were
held by an FMR affiliate .
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
T he value of each fund's domestic and foreign investments
varies in response to many factors. Stock values fluctuate in response
to the activities of individual companies and general market and
economic conditions. Bond values fluctuate based on changes in
interest rates, market conditions, other economic and political news,
and on their quality and maturity. In general, bond prices rise when
interest rates fall, and fall when interest rates rise. This effect is
more pronounced for longer-term securities. Lower-quality securities
offer higher yields, but also carry more risk.
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 many 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.
The total return from a bond includes both income and price gains or
losses. In selecting investments for a bond fund, FMR considers a
bond's expected income together with its potential for price gains or
losses. While income is generally the most important component of bond
returns over time, a bond fund's emphasis on income does not mean the
fund invests only in the highest-yielding bonds available, or that it
can avoid losses of principal.
FMR generally focuses on assembling a portfolio of bonds that it
believes will provide the best balance between risk and return within
the range of eligible investments for the fund. FMR's evaluation of a
potential investment includes an analysis of the credit quality of the
issuer, its structural features, its current price compared to FMR's
estimate of its long-term value, and any short-term trading
opportunities resulting from market inefficiencies.
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, 1996, the S&P MidCap 400 included companies with
capitalizations of between $192 million and $6.5 billion.
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.
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. 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. As of October 31, 1996, the fund's dollar-weighted average
maturity was approximately 8.5 years.
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 of November 30, 1996, the fund's
dollar-weighted average maturity was approximately 5.7 years.
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.
Although the fund can invest in securities of any maturity, the fund
maintains a dollar-weighted average maturity of three years or less
under normal conditions. 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 of October
31, 1996, the fund's dollar-weighted average maturity was
approximately 2.2 years.
HIGH INCOME MUNICIPAL FUND seeks high current income that is free from
federal income tax by investing primarily in investment-grade
municipal securities. The fund may also invest up to 35% of its assets
in below investment-grade securities. FMR normally invests so that at
least 80% of the fund's assets 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.
MUNICIPAL BOND FUND seeks a high level of 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 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
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 December 31, 1996, the fund's dollar-weighted average
maturity was approximately 12.4 years.
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 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, the fund
maintains a dollar-weighted average maturity of between three and 10
years under normal conditions. FMR seeks to manage the fund so that it
generally reacts to changes in interest rates similarly to municipal
bonds with maturities between seven and 10 years. As of November 30,
1996, the fund's dollar-weighted average maturity was approximately
8.6 years.
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 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, the fund
maintains a dollar-weighted average maturity of between two and five
years under normal conditions. As of November 30, 1996, the fund's
dollar-weighted average maturity was approximately 3.4 years.
CALIFORNIA MUNICIPAL INCOME FUND seeks high current income that is
free from federal income tax and California state personal income tax
by investing in investment-grade municipal securities under normal
conditions. FMR normally invests so that at least 80% of the fund's
assets is invested in securities whose interest is free from federal
and California income taxes. 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 14.4 years.
The performance of California Municipal Income is affected by the
economic and political conditions within the state of California.
California suffered a severe economic recession between 1990-1993,
which resulted in broad-based revenue shortfalls for the State and
many local governments. California's fiscal condition has improved as
its economy has been in a sustained recovery since 1994. During the
recession, the State substantially reduced local assistance, and
further reductions could adversely affect the financial condition of
cities, counties and other government agencies facing constraints in
their own revenue collections. California's long-term credit rating
stabilized after having been reduced in the past several years.
California voters in the past have passed amendments to the California
Constitution and other measures that limit the taxing and spending
authority of California governmental entities, and future voter
initiatives could result in adverse consequences affecting California
municipal bonds.
NEW YORK MUNICIPAL INCOME FUND seeks high current income that is free
from federal income tax and New York State and City personal income
taxes by investing in investment-grade municipal securities under
normal conditions. FMR normally invests so that at least 80% of the
fund's assets is invested in securities whose interest is free from
federal and New York State and City personal income taxes. 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 13.3 years.
The performance of New York Municipal Income is affected by the
economic and political conditions within the state of New York. Both
New York City and State have recently experienced significant
financial difficulty, and both the City's and the State's credit
ratings are among the lowest in the country.
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 High Income Municipal, Municipal Bond, Intermediate Municipal
Income, and Short-Intermediate Municipal Income do not expect to
invest in federally taxable obligations. California Municipal Income
and New York Municipal Income do not expect to invest in federally or
state taxable obligations. Each of High Income Municipal, Municipal
Bond, Intermediate Municipal Income, Short-Intermediate Municipal
Income, California Municipal Income, and New York 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, High Income Municipal,
Municipal Bond, 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 below 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 year ended 1996, 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 YEAR ENDED 1996 DEBT HOLDINGS (AS A % OF INVESTMENTS), BY
RATING
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
MID** EQUITY** GROWTH* STRATEGIC*** LARGE** EQUITY** BALANCED HIGH* STRATEGIC HIGH
CAP GROWTH OPPORTU OPPORT *** INCOME*
S&P Rating NITIES UNITIES CAP INCOME
* YIELD INCOME MUNICIPAL
(AVERAGE OF TOTAL INVESTMENTS)
INVESTMENT GRADE
HIGHEST QUALITY AAA
HIGH QUALITY AA -- -- 15.44% 6.43% -- 2.80% 31.90% -- 40.55% 27.16%
UPPER-MEDIUM GRADE A
MEDIUM GRADE BBB -- -- -- -- -- 3.26% 0.30% 0.57% 22.24%
LOWER QUALITY
MODERATELY SPECULATIVE BB -- -- -- -- -- 0.45% 0.56% 11.90% 8.33% 9.89%
SPECULATIVE B 0.06% -- -- -- -- 0.06% 1.96% 47.80% 27.31% 0.53%
HIGHLY SPECULATIVE CCC -- -- -- -- -- -- 0.25% 5.40% 2.20% --
POOR QUALITY CC -- -- -- -- -- -- -- -- -- --
LOWEST QUALITY, NO INTEREST C
IN DEFAULT, IN ARREARS D -- -- -- -- -- -- -- 0.10% -- 0.38%
MID EQUITY GROWTH STRATEGIC LARGE EQUITY BALANCED HIGH STRATEGIC HIGH
CAP GROWTH OPPORTU OPPORT INCOME
S&P Rating NITIES UNITIES CAP INCOME YIELD INCOME MUNICIPAL
(AVERAGE OF TOTAL INVESTMENTS)
INVESTMENT GRADE
HIGHEST QUALITY AAA
HIGH QUALITY AA -- -- 15.44% 6.43% -- 2.80% 33.87% -- 39.06% 26.58%
UPPER-MEDIUM GRADE A
MEDIUM GRADE BAA -- -- -- -- -- 0.02% 2.29% 0.10% 0.18% 22.72%
LOWER QUALITY
MODERATELY SPECULATIVE BA -- -- -- -- -- 0.25% 0.94% 8.60% 7.21% 9.19%
SPECULATIVE B -- -- -- 0.21% -- 0.26% 2.29% 48.90% 2 1 .31% 0.18%
HIGHLY SPECULATIVE CAA -- -- -- -- -- -- 0.12% 9.70% 3.23% 0.60%
POOR QUALITY CA -- -- -- -- -- -- -- 0.03% 0.02% --
LOWEST QUALITY, NO INTEREST C -- -- -- -- -- -- -- -- -- --
IN DEFAULT, IN ARREARS --- -- -- -- -- -- -- -- -- -- --
</TABLE>
* FISCAL YEAR ENDED OCTOBER 31, 1996.
** FISCAL YEAR ENDED NOVEMBER 30, 1996.
*** FISCAL YEAR ENDED DECEMBER 31, 1996.
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 0.76% OF
BALANCED'S INVESTMENTS, 1.02% OF STRATEGIC OPPORTUNITIES'
INVESTMENTS, 7.68% OF HIGH YIELD'S INVESTMENTS, 8.98% OF STRATEGIC
INCOME'S INVESTMENTS, AND 27.02% OF HIGH INCOME
MUNICIPAL'S 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 0.76% OF BALANCED'S INVESTMENTS, 1.02% OF STRATEGIC
OPPORTUNITIES' INVESTMENTS, 7.68% OF HIGH YIELD'S INVESTMENTS, 8.97%
OF STRATEGIC INCOME'S INVESTMENTS, AND 24.84% OF
HIGH INCOME MUNICIPAL'S 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 Mortgage Securities, Short Fixed-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.
Intermediate Bond invests only in investment-grade securities, and
will limit its investments in medium quality securities to 5% of its
assets. A security is considered to be investment-grade or medium
quality if it is rated investment-grade or medium quality,
respectively, by Moody's, S&P, Duff & Phelps, or Fitch, or is unrated
but judged by FMR to be of equivalent quality.
High Income Municipal currently intends to limit its investment in
below investment-grade securities to less than 35% of its assets and
does not currently intend to invest more than 10% of its total assets
in bonds that are in default. A security is considered to be
investment-grade if it is rated investment-grade by Moody's, S&P, Duff
& Phelps, or Fitch, or is unrated but judged by FMR to be of
equivalent quality.
Municipal Bond invests only in investment-grade securities. A security
is considered to be investment-grade if it is judged by FMR to be of
equivalent quality to securities rated Baa or BBB or higher by Moody's
or S&P, respectively. However, the fund will limit its investments in
medium quality securities as judged by FMR to one-third of its total
assets; will not purchase securities rated below Baa or BBB by Moody's
or S&P, respectively; and will not invest more than 20% of its total
assets in securities not rated by Moody's and S&P.
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.
STATE MUNICIPAL SECURITIES include municipal obligations issued by the
state of California or New York or their respective counties,
municipalities, authorities, or other subdivisions. The ability of
issuers to repay their debt can be affected by many factors that
impact the economic vitality of either the state or a region within
the state.
Other state municipal securities include obligations of U.S.
territories and possessions such as Guam, the Virgin Islands, Puerto
Rico, and their political subdivisions and public corporations. The
economy of Puerto Rico is closely linked to the U.S. economy and will
be affected by the strength of the U.S. dollar, interest rates, the
price stability of oil imports, and the continued existence of
favorable tax incentives.
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 or economic conditions in foreign
countries, fluctuations in foreign currencies, withholding or other
taxes, operational risks, increased regulatory burdens, 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 developing countries, more volatile 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, 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: California Municipal Income and New York Municipal
Income do not currently intend to invest in a money market fund. High
Income Municipal, Municipal Bond, Intermediate Municipal Income,
Short-Intermediate Municipal Income, California Municipal Income, and
New York 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, High Income Municipal,
Municipal Bond, 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, Short-Intermediate Municipal Income, California
Municipal Income, and New York 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 High Income Municipal, Municipal Bond, Intermediate Municipal
Income, Short-Intermediate Municipal Income, California Municipal
Income, and New York 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, High Income
Municipal, Municipal Bond, Intermediate Municipal Income,
Short-Intermediate Municipal Income, California Municipal Income, and
New York 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.
HIGH INCOME MUNICIPAL 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.
MUNICIPAL BOND FUND seeks to provide as high a level of interest
income exempt from federal income tax as is consistent with
preservation of capital.
The fund invests in a diversified portfolio of municipal bonds. The
fund will invest primarily in municipal bonds judged by FMR to be of
high-grade or upper-medium-grade quality, although it may invest up to
one-third of its total assets in bonds judged to be of medium-grade
quality if they are suitable for achieving its investment objective.
The fund's standards for high-grade, upper-medium-grade, and
medium-grade obligations are essentially the same as Moody's and S&P's
four highest categories of Baa or BBB and above. The fund will not
invest in any bond rated lower than Baa by Moody's or BBB by S&P, but
may invest up to 20% of its total assets in bonds not rated by either
of these rating services if FMR judges them to meet the fund's quality
standards. The fund will normally invest at least 80% of its assets in
municipal securities whose interest is exempt 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.
CALIFORNIA MUNICIPAL INCOME FUND seeks a high level of current income
free from federal income tax and California state personal income tax
by investing primarily in municipal securities. The fund normally
invests at least 80% of its assets in securities whose interest is
free from federal and California income taxes.
NEW YORK MUNICIPAL INCOME FUND seeks a high level of current income
free from federal income tax and New York State and City personal
income taxes by investing primarily in municipal securities. The fund
normally invests at least 80% of its assets in securities whose
interest is free from federal and New York State and City personal
income taxes.
With respect to 75% of its total assets, each of the Equity Funds,
High Yield, Mortgage Securities, Government Investment, Intermediate
Bond, Short Fixed-Income, High Income Municipal, Municipal Bond, 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 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 pag e .
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, High Income Municipal, Municipal Bond,
Intermediate Municipal Income, Short-Intermediate Municipal Income,
California Municipal Income, and New York Municipal Income, the fee is
calculated by adding a group fee rate to an individual fund fee rate,
and multiplying the result by the fund's average net assets. For
Growth Opportunities and Strategic Opportunities, the fee is
calculated by taking 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 rate (calculated monthly) is calculated by adding a
group fee rate to an individual fund fee rate, and multiplying the
result by the fund's average net assets.
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, High
Income Municipal, Municipal Bond, Intermediate Municipal Income,
Short-Intermediate Municipal Income, California Municipal Income, and
New York Municipal Income, and it drops as total assets under
management increase.
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 following table states the management fee rate for each fund for
its most recent fiscal year end:
GROUP INDIVIDUAL TOTAL MANAGEMENT
FEE RATE FUND FEE FEE RATE
RATE
TECHNOQUANT 0.30% 0.30% 0.60%
GROWTH [A]
MID CAP 0.30% 0.30% 0.60%
EQUITY GROWTH 0.30% 0.30% 0.61%
GROWTH 0.30% 0.30% 0.61%
OPPORTUNITIES [B]
STRATEGIC 0.30% 0.30% 0.48%
OPPORTUNITIES [B]
LARGE CAP 0.30% 0.30% 0.60%
GROWTH & INCOME 0.30% 0.20% 0.50%
[A]
EQUITY INCOME N/A N/A 0.50%
BALANCED 0.30% 0.15%[C] 0.50%
HIGH YIELD 0.14% 0.45% 0.60%
STRATEGIC INCOME 0.14% 0.45% 0.59%
MORTGAGE SECURITIES 0.1 4 % 0.30% 0.4 4 %
GOVERNMENT 0.14% 0.30% 0.45%
INVESTMENT
INTERMEDIATE BOND 0.14% 0.30% 0.45%
SHORT FIXED-INCOME 0.14% 0.30% 0.45%
HIGH INCOME 0.14% 0.25% 0.40%
MUNICIPAL FUND
MUNICIPAL BOND 0.14% 0.25% 0.40%
FUND
INTERMEDIATE 0.14% 0.25% 0.40%
MUNICIPAL INCOME
SHORT-INTERMEDIATE 0.14% 0.25% 0.40%
MUNICIPAL INCOME
CALIFORNIA MUNICIPAL 0.14% 0.25% 0.40%
INCOME [A]
NEW YORK MUNICIPAL 0.14% 0.25% 0.40%
INCOME
[A] ESTIMATED
[B] THE BASIC FEE RATE FOR THE FISCAL YEAR ENDED 1996 WAS 0.61% FOR
GROWTH OPPORTUNITIES AND 0.61% FOR STRATEGIC OPPORTUNITIES.
[C] EFFECTIVE AUGUST 1, 1996, FMR VOLUNTARILY AGREED TO REDUCE THE
FUND'S INDIVIDUAL FUND FEE RATE FROM 0.20% TO 0.15%. IF THIS REDUCTION
WERE NOT IN EFFECT, THE TOTAL FEE WOULD HAVE BEEN 0.5 0 %.
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 year ended 1996, 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.
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 year ended 1997, transfer agency fees (as a percentage
of average net assets) for Class A, Class T, and Class B of Mortgage
Securities amounted to 0.22 %, 0.14 %, and 0.57 %,
respectively. Pricing and bookkeeping fees (as a percentage of average
net assets) for Mortgage Securities amounted to 0.04 %. These
amounts are before expense reductions, if any.
For the fiscal year ended 1996, transfer agency and pricing and
bookkeeping fees (as a percentage of average net assets) amounted to
the following. These amounts are before expense reductions, if any.
TRANSFER AGENCY FEES PAID BY PRICING AND
BOOKKEEPING
FEES PAID
CLASS T CLASS B BY FUND
MID CAP 0.25% 0.27% 0.05%
EQUITY GROWTH 0.19% ** 0.02%
GROWTH 0.19% *** 0.01%
OPPORTUNITIES
STRATEGIC 0.22% 0.25% 0.05%
OPPORTUNITIES
LARGE CAP 0.24% 0.28% 0.22%
EQUITY INCOME 0.20% 0.22% 0.04%
BALANCED 0.19% ** 0.02%
HIGH YIELD 0.20% 0.20% 0.04%
STRATEGIC INCOME 0.22% 0.20% 0.06%
GOVERNMENT 0.21% 0.24% 0.04%
INVESTMENT
INTERMEDIATE BOND 0.19% 0.24% 0.04%
SHORT-FIXED INCOME 0.22% * 0.04%
* FUND DOES NOT OFFER CLASS B SHARES.
** CLASS COMMENCED OPERATIONS ON DECEMBER 31, 1996.
*** CLASS COMMENCED OPERATIONS ON MARCH 3, 1997.
UMB is the transfer and service agent for High Income Municipal,
Municipal Bond, Intermediate Municipal Income, Short-Intermediate
Municipal Income, California Municipal Income, and New York 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 1996, 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.
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TRANSFER AGENCY FEES PAID BY PRICING AND
BOOKKEEPING
FEES PAID
CLASS T CLASS B BY FUND
HIGH INCOME 0.18% 0.16% 0.04%
MUNICIPAL
MUNICIPAL BOND 0.20% 0.46% 0.03%
INTERMEDIATE 0.17% 0.20% 0.08%
MUNICIPAL INCOME
SHORT-INTERMEDIATE 0.20% * 0.20%
MUNICIPAL INCOME
CALIFORNIA MUNICIPAL 0.22% 0.24% 0.18%
INCOME
NEW YORK MUNICIPAL 0.14% 0.17% 0.10%
INCOME
</TABLE>
* FUND DOES NOT OFFER CLASS B SHARES.
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% o f 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, High Income Municipal,
Municipal Bond, Intermediate Municipal Income, Short-Intermediate
Municipal Income, California Municipal Income, and New York 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% if 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, Municipal Bond, Short-Intermediate Municipal Income,
California Municipal Income, and New York Municipal Income) have
adopted a DISTRIBUTION AND SERVICE PLAN. Under the plans, 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.
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 portfolio turnover rate for TechnoQuant Growth is projected to
exceed 200% for its first fiscal period ending November 30, 1997. The
portfolio turnover rate for Growth & Income is not expected to exceed
200% for its first fiscal period ending November 30, 1997. These rates
will vary from year to year.
The portfolio turnover rate for the fiscal year ended 1997 was
149 % for Mortgage Securities.
The portfolio turnover rate for the fiscal year ended 1996 was 101%
for Mid Cap, 76% for Equity Growth, 33% for Growth Opportunities, 151%
for Strategic Opportunities, 59% for Large Cap, 78% for Equity Income,
223% for Balanced, 121% for High Yield, 119% for Strategic Income,
153% for Government Investment, 200% for Intermediate Bond, 124% for
Short Fixed-Income, 49% for High Income Municipal, 35% for Municipal
Bond, 35% for Intermediate Municipal Income, 62% for
Short-Intermediate Municipal Income, 21% for California Municipal
Income, and 17% for New York Municipal Income.
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.
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 (THE FOLLOWING OPTIONS ARE AVAILABLE ONLY FOR TAXABLE
FUNDS)
TO SHELTER YOUR RETIREMENT SAVINGS FROM TAXES
Retirement plans allow individuals to shelter investment income and
capital gains from current taxes. In addition, contributions to these
accounts may be tax deductible. Retirement accounts require special
applications and typically have lower minimums.
(solid bullet) INDIVIDUAL RETIREMENT ACCOUNTS (IRAS) allow anyone of
legal age and under 70 1/2(checkmark)(solid club) with earned income
to invest up to $2,000 per tax year. Individuals can also invest in a
spouse's IRA if the spouse has earned income of less than $250.
(solid bullet) ROLLOVER IRAS retain special tax advantages for certain
distributions from employer-sponsored retirement plans.
(solid bullet) 401(K) PLANS allow employees of corporations 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.
(solid bullet) MONEY PURCHASE/PROFIT SHARING PLANS (KEOGH PLANS) are
tax-deferred pension accounts designated for employees of
unincorporated businesses or for persons who are self-employed.
(solid bullet) SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS) provide
small business owners or those with self-employed income (and their
eligible employees) with many of the same advantages as a Keogh, but
with fewer administrative requirements.
(solid bullet) SIMPLE IRAS provide small business owners and those
with self-employed income (and their eligible employees) with many of
the advantages of a 401(k) plan, but with fewer administrative
requirements.
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 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 s hares will be purchased at the next offering price
or NAV, as applicable, calculated after your order is received and
accepted. Each class's offering price and NAV , as
applicable, are 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 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-sheltered 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 Fidelity Advisor IRA, Rollover IRA,
SEP-IRA and Keogh accounts $500
Through regular investment plans* $1,000
TO ADD TO AN ACCOUNT $250
For Fidelity Advisor IRA, Rollover IRA,
SEP-IRA and Keogh accounts $100
Through regular investment plans* $100
MINIMUM BALANCE $1,000
For Fidelity Advisor IRA, Rollover IRA,
SEP-IRA and Keogh accounts None
*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.
For further information on opening an account, please consult your
investment professional or refer to the account application.
<TABLE>
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<S> <C> <C>
TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT
PHONE (small solid bullet) Contact your (small solid bullet) Contact your investment professional or,
if you are investing
YOUR INVESTMENT investment through a broker-dealer or insurance representative, call
professional or, if you 1-800-522-7297. If you are investing through a bank
PROFESSIONAL are investing through representative, call 1-800-843-3001.
a broker-dealer or (small solid bullet) Exchange from the same class of another
Fidelity Advisor fund
insurance or from another Fidelity fund account with the same
representative, call registration, including name, address, and taxpayer ID number.
1-800-522-7297.
If you are investing
through a bank
representative, call
1-800-843-3001.
(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 (small solid bullet) Make your check payable to the complete
name of the fund of
account application. your choice and note the applicable class. Indicate your fund
Make your check account number on your check and mail to the address printed
payable to the on your account statement.
complete name of the (small solid bullet) Exchange by mail: call, your investment
professional for
fund of your choice instructions.
and note the
applicable class. Mail
to the address
indicated on the
application.
In Person
(hand_graphic) (small solid bullet) Bring your account (small solid bullet) Bring your check to your investment
professional.
application and check
to your investment
professional.
Wire (wire_graphic)(small solid bullet) Not available (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) 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 each class is the class's NAV, minus
any applicable CDSC.
Your shares will be sold at the next NAV, minus any applicable
CDSC, calculated after your order is received and accepted. 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.
ACCOUNT TYPE SPECIAL REQUIREMENTS
<TABLE>
<CAPTION>
<S> <C> <C>
PHONE All account types except (small solid bullet) Maximum check request: $100,000.
YOUR
INVESTMENT retirement (small solid bullet) You may exchange to the same class of other
Fidelity Advisor
All account types funds or to other Fidelity funds if both accounts are registered
PROFESSIONAL with the same name(s), address, and taxpayer ID number.
PHONE
YOUR INVESTMENT
PROFESSIONAL
Mail or in Person
(mail_graphic)
(hand_graphic) Individual, Joint Tenant, (small solid bullet) The letter of instruction must be signed by all
persons required to
Sole Proprietorship, sign for transactions, exactly as their names appear on the
UGMA, UTMA account and sent to your investment professional.
(small solid bullet) The account owner should complete a retirement
distribution
form. Contact your investment professional or, if you purchased
your shares through a broker-dealer or insurance representative,
Retirement account call 1-800-522-7297. If you purchased your shares through a
bank representative, call 1-800-843-3001.
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 authorized by corporate resolution
to act on
Organization the account must sign the letter.
Executor, (small solid bullet) For instructions, contact your investment professional
or, if you
Administrator, purchased your shares through a broker-dealer or insurance
Conservator/Guardian representative, call 1-800-522-7297. If you purchased your
shares through a bank representative, call 1-800-843-3001.
Wire (wire_graphic) All account types except (small solid bullet) You must sign up for the wire feature before using it.
To verify
retirement 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
(small solid bullet) Your wire redemption request must be received and
accepted by
Fidelity before 4:00 p.m. Eastern time for money to be wired on
the next business day.
Check
(check_graphic) For all non-retirement (small solid bullet) Minimum check: $500.
Short Fixed-Income and (small solid bullet) All account owners must sign a signature card to receive
a
Short-Intermediate checkbook.
Municipal Income
accounts only.
</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
a fund. Call your investment professional if you need additional
copies of financial reports and prospectuses.
TRANSACTION SERVICES
EXCHANGE PRIVILEGE. You may sell your Class A or Class T shares and
buy the same class of shares of other Fidelity Advisor funds or Daily
Money Class shares of Treasury Fund, Prime Fund, and Tax-Exempt Fund
by telephone or in writing. You may sell your Class B shares and buy
Class B shares of other Fidelity Advisor funds or Advisor B Class
shares of Treasury Fund by telephone or in writing. You may sell your
Class C shares and buy Class C shares of other Fidelity Advisor funds
or Advisor C Class shares of Treasury Fund by telephone or in writing.
The shares you exchange will carry credit for any front-end sales
charge you previously paid in connection with their purchase.
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 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.
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>
MINIMUM MINIMUM
INITIAL ADDITIONAL FREQUENCY SETTING UP OR CHANGING
$1,000 $100 MONTHLY, BIMONTHLY, QUARTERLY, (SMALL SOLID BULLET) FOR A NEW ACCOUNT, COMPLETE THE APPROPRIATE
OR SEMI-ANNUALLY 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, 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).
</TABLE>
TO DIRECT DISTRIBUTIONS FROM A FIDELITY DEFINED TRUST TO CLASS T OF A
FIDELITY ADVISOR FUND
<TABLE>
<CAPTION>
<S> <C> <C>
MINIMUM MINIMUM
INITIAL ADDITIONAL SETTING UP OR CHANGING
NOT NOT (SMALL SOLID BULLET) FOR A NEW OR EXISTING ACCOUNT, ASK YOUR
APPLICABLE APPLICABLE INVESTMENT 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>
FIDELITY ADVISOR SYSTEMATIC EXCHANGE PROGRAM
TO MOVE MONEY FROM A FIDELITY MONEY MARKET FUND OR A FIDELITY ADVISOR
FUND TO ANOTHER FIDELITY ADVISOR FUND
<TABLE>
<CAPTION>
<S> <C> <C>
MINIMUM FREQUENCY SETTING UP OR CHANGING
$100 Monthly, quarterly, (small solid bullet) To establish, call your investment professional
semi-annually, or annually 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>
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,
and Large Cap are distributed in December and January ;
dividends for Growth Opportunities are distributed in December;
dividends for Strategic Opportunities are distributed in December and
February; dividends for Strategic Income, High Yield, Mortgage
Securities, Government Investment, Intermediate Bond, Short
Fixed-Income, High Income Municipal, Municipal Bond, Intermediate
Municipal Income, Short-Intermediate Municipal Income, California
Municipal Income, and New York 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 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.
For retirement accounts, all distributions are automatically
reinvested. When you are over 59 years old, you can receive
distributions in cash.
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 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-deferred 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 (except California
Municipal Income and New York Municipal Income) 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 gain s 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.
To the extent that California Municipal Income's income dividends are
derived from interest on California state tax-free investments, they
will be free from California state personal income tax. Distributions
derived from obligations that are not California state tax-free
obligations, as well as distributions from short or long-term capital
gains, are subject to California state personal income tax. Corporate
taxpayers should note that the fund's income dividends and other
distributions are not exempt from California state franchise or
corporate income taxes. Interest on indebtedness incurred to
purchase, or continued to carry, shares of California Municipal Income
generally will not be deductible for Calfiornia State income tax
purposes.
To the extent that New York Municipal Income's income dividends are
derived from state tax-free investments, they will be free from New
York State and City personal income taxes. Corporate taxpayers
should note that New York Municipal Income's income dividends and
other distributions are not exempt from New York State and City
franchise or corporate income taxes. In addition, interest on
indebtedness incurred to purchase, or continued to carry, shares of
New York Municipal Income generally will not be deductible for New
York State personal income tax purposes.
During the fiscal year ended 1996, 100% of the income dividends from
High Income Municipal, Municipal Bond, Intermediate Municipal Income,
Short-Intermediate Municipal Income, California Municipal Income, and
New York Municipal Income was free from federal income tax. During the
fiscal year ended 1996, 100% of California Municipal Income's income
dividends was free from California taxes, and 100% of New York
Municipal Income's income dividends was free from New York taxes.
During the fiscal year ended 1996, 26.36% of High Income Municipal's,
0.79% of Municipal Bond's, 7.58% of Intermediate Municipal Income's,
18.99% of Short-Intermediate Municipal Income's, 5.5% of California
Municipal Income's, and 0.09% of New York Municipal Income's income
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 investment s, 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 e ach 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.
SALES CHARGES AND INVESTMENT PROFESSIONAL
CONCESSIONS - CLASS A
EQUITY Sales Charge: Investment
FUNDS: Professional
Concession as %
of Offering Price
As a % of As an
Offering Price approximate %
of Net Amount
Invested
Up to $49,999 5.75% 6.10% 5.00%
$50,000 to 4.50% 4.71% 3.75%
$99,999
$100,000 to 3.50% 3.63% 2.75%
$249,999
$250,000 to 2.50% 2.56% 2.00%
$499,999
$500,000 to 2.00% 2.04% 1.75%
$999,999
$1,000,000 to 1.00% 1.01% 0.75%
$24,999,999
$25,000,000 or None* None* *
more
BOND Sales Charge: Investment
FUNDS: Professional
Concession as % of
Offering Price
As a % of As an
Offering Price approximate %
of Net Amount
Invested
Up to $49,999 4.75% 4.99% 4.25%
$50,000 to 4.50% 4.71% 4.00%
$99,999
$100,000 to 3.50% 3.63% 3.00%
$249,999
$250,000 to 2.50% 2.56% 2.25%
$499,999
$500,000 to 2.00% 2.04% 1.75%
$999,999
$1,000,000 to 0.50% 0.50% 0.50%
$24,999,999
$25,000,000 or None* None* *
more
* SEE SECTION ENTITLED FINDER'S FEE.
INTERMEDIAT Sales Charge: Investment
E-TERM Professional
BOND Concession as % of
FUNDS: Offering Price
As a % of As an
Offering Price approximate %
of Net Amount
Invested
Up to $49,999 3.75% 3.91% 3.00%
$50,000 to 3.00% 3.10% 2.25%
$99,999
$100,000 to 2.25% 2.30% 1.75%
$249,999
$250,000 to 1.75% 1.78% 1.50%
$499,999
$500,000 to 1.50% 1.52% 1.25%
$999,999
$1,000,000 to 0.50% 0.50% 0.50%
$24,999,999
$25,000,000 or None* None* *
more
SHORT-TERM Sales Charge: Investment
BOND Professional
FUNDS: Concession as % of
Offering Price
As a % of As an
Offering Price approximate %
of Net Amount
Invested
Up to $499,999 1.50% 1.52% 1.25%
$500,000 to 1.00% 1.01% 0.75%
$999,999
$1,000,000 or None* None* *
more
SALES CHARGES AND INVESTMENT PROFESSIONAL
CONCESSIONS - CLASS T
EQUITY Sales Charge: Investment
FUNDS: Professional
Concession as % of
Offering Price
As a % of As an
Offering Price approximate %
of Net Amount
Invested
Up to $49,999 3.50% 3.63% 3.00%
$50,000 to 3.00% 3.09% 2.50%
$99,999
$100,000 to 2.50% 2.56% 2.00%
$249,999
$250,000 to 1.50% 1.52% 1.25%
$499,999
$500,000 to 1.00% 1.01% 0.75%
$999,999
$1,000,000 or None* None* *
more
BOND Sales Charge: Investment
FUNDS: Professional
Concession as % of
Offering Price
As a % of As an
Offering Price approximate %
of Net Amount
Invested
Up to $49,999 3.50% 3.63% 3.00%
$50,000 to 3.00% 3.09% 2.50%
$99,999
$100,000 to 2.50% 2.56% 2.00%
$249,999
$250,000 to 1.50% 1.52% 1.25%
$499,999
$500,000 to 1.00% 1.01% 0.75%
$999,999
$1,000,000 or None* None* *
more
INTERMEDIAT Sales Charge: Investment
E-TERM Professional
BOND Concession as % of
FUNDS: Offering Price
As a % of As an
Offering Price approximate %
of Net Amount
Invested
Up to $49,999 2.75% 2.83% 2.25%
$50,000 to 2.25% 2.30% 2.00%
$99,999
$100,000 to 1.75% 1.78% 1.50%
$249,999
$250,000 to 1.50% 1.52% 1.25%
$499,999
$500,000 to 1.00% 1.01% 0.75%
$999,999
$1,000,000 or None* None* *
more
SHORT-TERM Sales Charge: Investment
BOND Professional
FUNDS: Concession as % of
Offering Price
As a % of As an
Offering approximate %
Price of Net Amount
Invested
Up to $499,999 1.50% 1.52% 1.25%
$500,000 to 1.00% 1.01% 0.75%
$999,999
$1,000,000 or None* None* *
more
* SEE SECTION ENTITLED FINDER'S FEE.
FINDER'S FEE. For all funds except the Short-Term Bond Funds,
o n 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 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 Contingent Deferred
Purchase Sales Charge
Less than 1 year 5%
1 year to less 4%
than 2 years
2 years to less 3%
than 3 years
3 years to less 3%
than 4 years
4 years to less 2%
than 5 years
5 years to less 1%
than 6 years
6 years to less 0%
than 7 years [A]
BOND
FUNDS:
From Date of Contingent Deferred
Purchase Sales Charge
Less than 1 year 5%
1 year to less 4%
than 2 years
2 years to less 3%
than 3 years
3 years to less 3%
than 4 years
4 years to less 2%
than 5 years
5 years to less 1%
than 6 years
6 years to less 0%
than 7 years [A]
INTERMEDIAT
E-TERM
BOND
FUNDS:
From Date Of Contingent Deferred
Purchase Sales Charge
Less than 1 year 3%
1 year to less 2%
than 2 years
2 years to less 1%
than 3 years
3 years to less 0%
than 4 years [B]
[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 and acceptance of your
investment order, provided that such reinvestment is made within 90
days of redemption. Under these circumstances, the dollar amount of
the CDSC, if any, you paid on Class 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 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. Fidelity may only be
liable for losses resulting from unauthorized transactions if it does
not follow reasonable procedures designed to verify the identity of
the caller. Fidelity will request personalized security codes or other
information, and may also record calls. You should verify the accuracy
of the confirmation statements immediately after receipt. If you do
not want the ability to redeem and exchange by telephone, call
Fidelity for instructions. Additional documentation may be required
from corporations, associations, and certain fiduciaries.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during
periods of unusual market activity), consider placing your order by
mail.
EACH FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a
period of time. Each fund also reserves the right to reject any
specific purchase order, including certain purchases by exchange. See
"Exchange Restrictions" on page . Purchase orders may be refused if,
in FMR's opinion, they would disrupt management of a fund.
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 and accepted. Note the
following:
(small solid bullet) All of your purchases must be made in U.S.
dollars and checks must be drawn on U.S. banks.
(small solid bullet) Fidelity does not accept cash.
(small solid bullet) When making a purchase with more than one check,
each check must have a value of at least $50.
(small solid bullet) 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 and accepted ,
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 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% on exchanges. Check each fund's
prospectus for details.
SALES CHARGE REDUCTIONS AND WAIVERS
If your purchase qualifies for one of the following 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 pag e . 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 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 which, in the aggregate,
have more than 200 eligible employees or a minimum of $1 million in
plan assets invested in Fidelity Advisor funds;
2. Purchased by a trust institution or bank trust department
(excluding employee benefit plan assets) that has executed a
participation agreement with FDC specifying certain asset minimums and
qualifications, and marketing restrictions. Assets managed by third
parties do not qualify for this waiver;
3. Purchased for use in a broker-dealer managed account program,
provided the broker-dealer has executed a participation agreement with
FDC specifying certain asset minimums and qualifications, and
marketing, program and trading restrictions. Employee benefit plan
assets do not qualify for this waiver;
4. Purchased on a discretionary basis by a registered investment
advisor which is not part of an organization primarily engaged in the
brokerage business, that has executed a participation agreement with
FDC specifying certain asset minimums and qualifications, and
marketing, program and trading restrictions. Employee benefit plan
assets do not qualify for this waiver; or
5. Purchased as part of an employee benefit plan having $25 million or
more in plan assets.
For the purpose of load waiver (3), certain broker-dealers that
otherwise meet the qualifications and asset minimums established by
FDC are not required to sign a participation agreement.
A FRONT-END SALES CHARGE WILL NOT APPLY TO THE FOLLOWING CLASS T
SHARES:
1. 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;
2. 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;
3. Purchased by a charitable organization (as defined for purposes of
Section 501(c)(3) of the Internal Revenue Code) investing $100,000 or
more;
4. 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);
5. Purchased for a Fidelity or Fidelity Advisor account with the
proceeds of a distribution (i) from an employee benefit plan that
qualified for waiver (11) below or had a minimum of $3 million in plan
assets invested in Fidelity funds; or (ii) from an insurance company
separate account qualifying under (6) below, or used to fund annuity
contracts purchased by employee benefit plans having in the aggregate
at least $3 million in plan assets invested in Fidelity funds.
(Distributions other than those transferred to an IRA account must be
transferred directly into a Fidelity account);
6. Purchased for an insurance company separate account used to fund
annuity contracts for employee benefit plans which, in the aggregate,
have more than 200 eligible employees or a minimum of $1 million in
plan assets invested in Fidelity Advisor funds;
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 trust institution or bank trust department
(excluding assets described in (11) and (12) below) that has executed
a participation agreement with FDC specifying certain asset minimums
and qualifications, and marketing restrictions. Assets managed by
third parties do not qualify for this waiver;
10. Purchased for use in a broker-dealer managed account program,
provided the broker-dealer has executed a participation agreement with
FDC specifying certain asset minimums and qualifications, and
marketing, program and trading restrictions. Employee benefit plan
assets do not qualify for this waiver;
11. Purchased as part of an employee benefit plan having more than (i)
200 eligible employees or a minimum of $1 million of plan assets
invested in Fidelity Advisor funds; or (ii) 25 eligible employees or
$250,000 of plan assets invested in Fidelity Advisor funds that
subscribe to the Advisor Retirement Connection or similar
FIIS-sponsored program;
12. Purchased as part of an employee benefit plan through an
intermediary that has executed a participation agreement with FDC
specifying certain asset minimums and qualifications, and marketing,
program and trading restrictions;
13. Purchased on a discretionary basis by a registered investment
advisor which is not part of an organization primarily engaged in the
brokerage business, that has executed a participation agreement with
FDC specifying certain asset minimums and qualifications, and
marketing, program and trading restrictions. Employee benefit plan
assets do not qualify for this waiver; or
14. Purchased with distributions of income, principal, and capital
gains from Fidelity Defined Trusts.
Employee benefits plans that purchased Class T shares load waived
prior to June 30, 1995 but do not meet the qualifications of waiver
(12) will be permitted to make additional purchases of Class T shares
on a load waived basis.
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 page ), Class
T shares without a sales charge (as described in (6), (9), (10)
and (13) at left) , 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;
or
3. In connection with redemptions through the Fidelity Advisor
Systematic Withdrawal Program.
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. 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
EQUITY GROWTH - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
year total
returns+
EQUITY -0.57% 15.57% 44.84% 6.93% 64.71% 9.89% 14.85% -0.89% 39.14% 16.21%
GROWT
H -
CLASS
A
Lipper 3.08% 14.79% 26.91% -4.49% 36.70% 8.08% 10.63% -2.17% 30.79% 19.24%
Growt
h
Funds
Averag
eA
S&P 5.10% 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96%
500
Consu 4.43% 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
mer
Price
Index
</TABLE>
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
(LARGE SOLID BOX) EQUITY GROWTH - CLASS A
GROWTH OPPORTUNITIES - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total 1988 1989 1990 1991 1992 1993 1994 1995 1996
returns+
GROWTH 33.28% 24.14% -1.65% 42.68% 15.03% 22.17% 2.86% 33.04% 17.69%
OPPORTUNITI
ES - CLASS
A
Lipper 14.79% 26.91% -4.49% 36.70% 8.08% 10.63% -2.17% 30.79% 19.24%
Growth
Funds
AverageA
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96%
Consumer 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
Price Index
</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
(LARGE SOLID BOX) GROWTH OPPORTUNITIES - CLASS A
STRATEGIC OPPORTUNITIES - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
returns+
STRATEGIC -6.33% 22.25% 32.60% -7.17% 23.08% 12.87% 20.44% -7.17% 38.16% 1.53%
OPPORTUNITI
ES - CLASS
A
Lipper -0.03% 14.09% 26.60% -8.24% 39.91% 8.78% 15.68% -3.38% 30.34% 16.31%
Capital
Appreciatio
n FundsB
S&P 500 5.10% 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96%
Consumer 4.43% 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
Price Index
</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
(LARGE SOLID BOX) STRATEGIC OPPORTUNITIES - CLASS A
EQUITY INCOME - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
returns+
EQUITY -2.24% 23.23% 18.43% -14.28% 29.81% 14.68% 18.03% 6.46% 32.55% 14.47%
INCOME -
CLASS A
Lipper -2.18% 16.74% 22.18% -6.78% 26.86% 9.77% 13.66% -2.54% 30.17% 18.85%
Equity
Income
Funds
AverageC
S&P 500 5.10% 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96%
Consumer 4.43% 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
Price Index
</TABLE>
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
(LARGE SOLID BOX) EQUITY INCOME - CLASS A
BALANCED - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total 1988 1989 1990 1991 1992 1993 1994 1995 1996
returns+
BALANCED - 20.89% 24.60% -2.94% 34.48% 9.20% 19.66% -5.09% 14.06% 8.31%
CLASS A
Lipper 12.34% 19.57% -0.57% 26.69% 7.07% 10.91% -2.50% 25.16% 13.76%
Balanced
Funds
AverageD
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96%
Consumer 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
Price Index
</TABLE>
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
(LARGE SOLID BOX) BALANCED -
CLASS A
HIGH YIELD - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total 1988 1989 1990 1991 1992 1993 1994 1995 1996
returns+
HIGH YIELD 17.24% 3.64% 7.30% 34.94% 23.09% 20.45% -1.49% 19.27% 13.05%
- - - CLASS A
Lipper High 12.89% -0.58% -10.13% 36.91% 17.51% 18.95% -3.85% 16.43% 13.67%
Current Yield
Funds
AverageE
Merrill 13.47% 4.23% -4.35% 34.58% 18.16% 17.18% -1.17% 19.91% 11.06%
Lynch High
Yield
Master
Index
Consumer 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
Price Index
</TABLE>
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
(LARGE SOLID BOX) HIGH YIELD - CLASS A
STRATEGIC INCOME - CLASS A
Calendar year total returns+ 1995 1996
STRATEGIC INCOME - CLASS A 22.02% 12.81%
Lipper Multi-Sector Income Funds 16.92% 11.74%
AverageF
Merrill Lynch High Yield Master Index 19.91% 11.06%
Consumer Price Index 2.54% 3.32%
MORTGAGE SECURITIES - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
returns+
MORTGAGE 2.70% 6.72% 13.64% 10.36% 13.61% 5.45% 6.71% 1.94% 17.02% 5.43%
SECURITIES -
CLASS A
Lipper U.S. 2.53% 7.47% 12.71% 9.52% 15.00% 6.38% 7.58% -4.83% 16.29% 3.87%
Mortgage
Funds
AverageG
Salomon 4.06% 8.81% 15.16% 10.90% 15.64% 7.37% 7.04% -1.43% 16.77% 5.37%
Brothers
Mortgage
Index
Consumer 4.43% 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
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: 5.430000000000001
ROW: 11, COL: 1, VALUE: 0.0
(LARGE SOLID BOX) MORTGAGE SECURITIES -
CLASS A
GOVERNMENT INVESTMENT - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total 1988 1989 1990 1991 1992 1993 1994 1995 1996
returns+
GOVERNMEN 6.57% 11.75% 8.37% 13.45% 6.48% 9.36% -3.85% 17.65% 1.99%
T
INVESTMENT
- - - CLASS A
Lipper 6.67% 12.46% 8.22% 14.44% 6.41% 9.42% -4.64% 17.34% 1.72%
General
U.S.
Governmen
t Bond
Funds
AverageH
Salomon 7.10% 14.24% 8.78% 15.33% 7.24% 10.74% -3.40% 18.39% 2.76%
Brothers
Treasury/Ag
ency Index
Consumer 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
Price Index
</TABLE>
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
(LARGE SOLID BOX) GOVERNMENT INVESTMENT-CLASS A
INTERMEDIATE BOND - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
returns+
INTERMEDIAT 2.32% 7.84% 12.11% 7.91% 15.16% 7.13% 11.49% -2.47% 12.19% 3.16%
E BOND -
CLASS A
Lipper 2.13% 7.06% 11.67% 7.22% 15.63% 6.88% 9.52% -3.25% 16.62% 3.12%
Intermediat
e
Investment
Grade
Bond Funds
AverageI
Lehman 3.66% 6.67% 12.77% 9.16% 14.62% 7.17% 8.79% -1.93% 15.33% 4.05%
Brothers
Intermediat
e
Governmen
t/Corporate
Bond Index
Consumer 4.43% 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
Price Index
</TABLE>
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
(LARGE SOLID BOX) INTERMEDIATE BOND - CLASS A
SHORT FIXED-INCOME - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total 1988 1989 1990 1991 1992 1993 1994 1995 1996
returns+
SHORT 6.19% 10.31% 5.87% 13.37% 7.61% 9.49% -3.37% 9.81% 4.07%
FIXED-INCO
ME - CLASS
A
Lipper Short 6.86% 10.22% 7.87% 12.88% 5.97% 6.45% -0.44% 10.84% 4.64%
Investment
Grade
Bond
Funds
AverageJ
Lehman 6.34% 10.97% 9.69% 11.83% 6.35% 5.55% 0.55% 10.96% 5.14%
Brothers
1-3 Year
Governmen
t/Corporate
Bond Index
Consumer 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
Price Index
</TABLE>
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
(LARGE SOLID BOX) SHORT FIXED-INCOME - CLASS A
HIGH INCOME MUNICIPAL - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total 1988 1989 1990 1991 1992 1993 1994 1995 1996
returns+
HIGH 11.80% 13.09% 10.29% 12.18% 11.11% 13.79% -8.05% 16.65% 2.99%
INCOME
MUNICIPAL -
CLASS A
Lipper High 11.28% 10.11% 5.13% 11.52% 8.51% 11.41% -4.67% 15.98% 4.17%
Yield
Municipal
Bond
Funds
AverageK
Consumer 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
Price Index
</TABLE>
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
(LARGE SOLID BOX) HIGH INCOME MUNICIPAL - CLASS
A
MUNICIPAL BOND - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
returns+
MUNICIPAL -1.56% 12.30% 9.56% 6.91% 11.91% 8.93% 13.17% -8.49% 18.15% 3.88%
BOND -
CLASS A
Lipper -0.94% 11.53% 9.65% 6.05% 12.09% 8.79% 12.47% -6.50% 16.84% 3.30%
General
Municipal
Debt Funds
AverageL
Consumer 4.43% 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
Price Index
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: -1.56
ROW: 3, COL: 1, VALUE: 12.3
ROW: 4, COL: 1, VALUE: 9.560000000000001
ROW: 5, COL: 1, VALUE: 6.91
ROW: 6, COL: 1, VALUE: 11.91
ROW: 7, COL: 1, VALUE: 8.93
ROW: 8, COL: 1, VALUE: 13.17
ROW: 9, COL: 1, VALUE: -8.49
ROW: 10, COL: 1, VALUE: 18.15
ROW: 11, COL: 1, VALUE: 3.88
(LARGE SOLID BOX) MUNICIPAL BOND -
CLASS A
INTERMEDIATE MUNICIPAL INCOME - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
returns+
INTERMEDIAT 2.33% 7.38% 7.79% 6.37% 9.64% 7.31% 9.43% -5.68% 14.20% 3.78%
E MUNICIPAL
INCOME -
CLASS A
Lipper 1.32% 7.57% 8.26% 6.59% 10.52% 7.80% 10.18% -3.51% 12.89% 3.70%
Intermediat
e Municipal
Debt
Funds
AverageM
Consumer 4.43% 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
Price Index
</TABLE>
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
(LARGE SOLID BOX) INTERMEDIATE MUNICIPAL INCOME -
CLASS A
SHORT-INTERMEDIATE MUNICIPAL INCOME - CLASS A
Calendar year total 1995 1996
returns+
SHORT-INTER 8.68% 3.53%
MEDIATE
MUNICIPAL
INCOME -
CLASS A
Lipper 7.43% 3.53%
Short-Inter
mediate
Municipal
Debt Funds
AverageN
Consumer 2.54% 3.32%
Price Index
NEW YORK MUNICIPAL INCOME - CLASS A
Calendar year total 1996
returns+
NEW YORK 3.50%
MUNICIPAL -
CLASS A
Lipper New 3.15%
York
Municipal
Debt Funds
AverageO
Consumer 3.32%
Price Index
EQUITY GROWTH - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
returns+
EQUITY -0.57% 15.57% 44.84% 6.93% 64.71% 9.89% 14.85% -0.89% 39.14% 16.24%
GROWTH -
CLASS T
Lipper 3.08% 14.79% 26.91% -4.49% 36.70% 8.08% 10.63% -2.17% 30.79% 19.24%
Growth
Funds
AverageA
S&P 500 5.10% 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96%
Consumer 4.43% 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
Price Index
</TABLE>
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
(LARGE SOLID BOX) EQUITY GROWTH - CLASS T
GROWTH OPPORTUNITIES - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total 1988 1989 1990 1991 1992 1993 1994 1995 1996
returns+
GROWTH 33.28% 24.14% -1.65% 42.68% 15.03% 22.17% 2.86% 33.04% 17.73%
OPPORTUNITI
ES - CLASS T
Lipper 14.79% 26.91% -4.49% 36.7 0 % 8.08% 10.63% -2.17% 30.79% 19.24%
Growth
Funds
AverageA
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96%
Consumer 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
Price Index
</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: 17.73
(LARGE SOLID BOX) GROWTH OPPORTUNITIES - CLASS T
STRATEGIC OPPORTUNITIES - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
returns+
STRATEGIC -6.33% 22.25% 32.60% -7.17% 23.08% 12.87% 20.44% -7.17% 38.16% 1.53%
OPPORTUNITI
ES - CLASS T
Lipper -0.03% 14.09% 26.60% -8.24% 39.91% 8.78% 15.68% -3.38% 30.34% 16.31%
Capital
Appreciatio
n FundsB
S&P 500 5.10% 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96%
Consumer 4.43% 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
Price Index
</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
(LARGE SOLID BOX) STRATEGIC OPPORTUNITIES - CLASS T
EQUITY INCOME - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
returns+
EQUITY -2.24% 23.23% 18.43% -14.28% 29.81% 14.68% 18.03% 6.46% 32.55% 14.61%
INCOME -
CLASS T
Lipper -2.18% 16.74% 22.18% -6.78% 26.86% 9.77% 13.66% -2.54% 30.17% 18.85%
Equity
Income
Funds
AverageC
S&P 500 5.10% 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96%
Consumer 4.43% 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
Price Index
</TABLE>
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
(LARGE SOLID BOX) EQUITY INCOME - CLASS T
BALANCED - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total 1988 1989 1990 1991 1992 1993 1994 1995 1996
returns+
BALANCED - 20.89% 24.60% -2.94% 34.48% 9.20% 19.66% -5.09% 14.06% 8.43%
CLASS T
Lipper 12.34% 19.57% -0.57% 26.69% 7.07% 10.91% -2.50% 25.16% 13.76%
Balanced
Funds
AverageD
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96%
Consumer 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
Price Index
</TABLE>
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
(LARGE SOLID BOX) BALANCED -
CLASS T
HIGH YIELD - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total 1988 1989 1990 1991 1992 1993 1994 1995 1996
returns+
HIGH YIELD 17.24% 3.64% 7.30% 34.94% 23.09% 20.45% -1.49% 19.27% 13.26%
- - - CLASS T
Lipper High 12.89% -0.58% -10.13% 36.91% 17.51% 18.95% -3.85% 16.43% 13.67%
Current Yield
Funds
AverageE
Merrill 13.47% 4.23% -4.35% 34.58% 18.16% 17.18% -1.17% 19.91% 11.06%
Lynch High
Yield
Master
Index
Consumer 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
Price Index
</TABLE>
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
(LARGE SOLID BOX) HIGH YIELD - CLASS T
STRATEGIC INCOME - CLASS T
Calendar year total 1995 1996
returns+
STRATEGIC 22.02% 12.89%
INCOME -
CLASS T
Lipper 16.92% 11.74%
Multi-Sector
Income
Funds
AverageF
Merrill 19.91% 11.06%
Lynch High
Yield
Master
Index
Consumer 2.54% 3.32%
Price Index
MORTGAGE SECURITIES - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
returns+
MORTGAGE 2.70% 6.72% 13.64% 10.36% 13.61% 5.45% 6.71% 1.94% 17.02% 5.43%
SECURITIES -
CLASS T
Lipper U.S. 2.53% 7.47% 12.71% 9.52% 15.00% 6.38% 7.58% -4.83% 16.29% 3.87%
Mortgage
Funds
AverageG
Salomon 4.06% 8.81% 15.16% 10.90% 15.64% 7.37% 7.04% -1.43% 16.77% 5.37%
Brothers
Mortgage
Index
Consumer 4.43% 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
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: 5.430000000000001
ROW: 11, COL: 1, VALUE: 0.0
(LARGE SOLID BOX) MORTGAGE SECURITIES -
CLASS T
GOVERNMENT INVESTMENT - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total 1988 1989 1990 1991 1992 1993 1994 1995 1996
returns+
GOVERNMEN 6.57% 11.75% 8.37% 13.45% 6.48% 9.36% -3.85% 17.65% 2.12%
T
INVESTMENT
- - - CLASS T
Lipper 6.67% 12.46% 8.22% 14.44% 6.41% 9.42% -4.64% 17.34% 1.72%
General
U.S.
Governmen
t Bond
Funds
AverageH
Salomon 7.10% 14.24% 8.78% 15.33% 7.24% 10.74% -3.40% 18.39% 2.76%
Brothers
Treasury/Ag
ency Index
Consumer 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
Price Index
</TABLE>
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
(LARGE SOLID BOX) GOVERNMENT INVESTMENT - CLASS T
INTERMEDIATE BOND - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
returns+
INTERMEDIAT 2.32% 7.84% 12.11% 7.91% 15.16% 7.13% 11.49% -2.47% 12.19% 3.41%
E BOND -
CLASS T
Lipper 2.13% 7.06% 11.67% 7.22% 15.63% 6.88% 9.52% -3.25% 16.62% 3.12%
Intermediat
e
Investment
Grade
Bond Funds
AverageI
Lehman 3.66% 6.67% 12.77% 9.16% 14.62% 7.17% 8.79% -1.93% 15.33% 4.05%
Brothers
Intermediat
e
Governmen
t/Corporate
Bond Index
Consumer 4.43% 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
Price Index
</TABLE>
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
(LARGE SOLID BOX) INTERMEDIATE BOND - CLASS T
SHORT FIXED-INCOME - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total 1988 1989 1990 1991 1992 1993 1994 1995 1996
returns+
SHORT 6.19% 10.31% 5.87% 13.37% 7.61% 9.49% -3.37% 9.81% 4.57%
FIXED-INCO
ME - CLASS
T
Lipper Short 6.86% 10.22% 7.87% 12.88% 5.97% 6.45% -0.44% 10.84% 4.64%
Investment
Grade
Bond
Funds
AverageJ
Lehman 6.84% 10.97% 9.69% 11.83% 6.35% 5.55% 0.55% 10.96% 5.26%
Brothers
1-3 Year
Governmen
t/Corporate
Bond Index
Consumer 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
Price Index
</TABLE>
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
(LARGE SOLID BOX) SHORT FIXED-INCOME - CLASS T
HIGH INCOME MUNICIPAL - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total 1988 1989 1990 1991 1992 1993 1994 1995 1996
returns+
HIGH 11.80% 13.09% 10.29% 12.18% 11.11% 13.79% -8.05% 16.65% 2.95%
INCOME
MUNICIPAL -
CLASS T
Lipper High 11.28% 10.11% 5.13% 11.52% 8.51% 11.41% -4.67% 15.98% 4.17%
Yield
Municipal
Bond
Funds
AverageK
Consumer 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
Price Index
</TABLE>
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
(LARGE SOLID BOX) HIGH INCOME MUNICIPAL - CLASS T
MUNICIPAL BOND - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
returns+
MUNICIPAL -1.56% 12.30% 9.56% 6.91% 11.91% 8.93% 13.17% -8.49% 18.15% 3.88%
BOND -
CLASS T
Lipper -0.94% 11.53% 9.65% 6.05% 12.09% 8.79% 12.47% -6.50% 16.84% 3.30%
General
Municipal
Debt Funds
AverageL
Consumer 4.43% 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
Price Index
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: -1.56
ROW: 3, COL: 1, VALUE: 12.3
ROW: 4, COL: 1, VALUE: 9.560000000000001
ROW: 5, COL: 1, VALUE: 6.91
ROW: 6, COL: 1, VALUE: 11.91
ROW: 7, COL: 1, VALUE: 8.93
ROW: 8, COL: 1, VALUE: 13.17
ROW: 9, COL: 1, VALUE: -8.49
ROW: 10, COL: 1, VALUE: 18.51
ROW: 11, COL: 1, VALUE: 3.88
(LARGE SOLID BOX) MUNICIPAL BOND -
CLASS T
INTERMEDIATE MUNICIPAL INCOME - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
returns+
INTERMEDIAT 2.33% 7.38% 7.79% 6.37% 9.64% 7.31% 9.43% -5.68% 14.20% 3.89%
E MUNICIPAL
INCOME -
CLASS T
Lipper 1.32% 7.57% 8.26% 6.59% 10.52% 7.80% 10.18% -3.51% 12.89% 3.70%
Intermediat
e Municipal
Debt
Funds
AverageM
Consumer 4.43% 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
Price Index
</TABLE>
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
(LARGE SOLID BOX) INTERMEDIATE MUNICIPAL INCOME -
CLASS T
SHORT-INTERMEDIATE MUNICIPAL INCOME - CLASS T
Calendar year total 1995 1996
returns+
SHORT-INTER 8.68% 3.64%
MEDIATE
MUNICIPAL
INCOME -
CLASS T
Lipper 7.43% 3.53%
Short-Inter
mediate
Municipal
Debt Funds
AverageN
Consumer 2.54% 3.32%
Price Index
NEW YORK MUNICIPAL INCOME - CLASS T
Calendar year total 1996
returns+
NEW YORK 3.50%
MUNICIPAL -
CLASS T
Lipper New 3.15%
York
Municipal
Debt Funds
AverageO
Consumer 3.32%
Price Index
EQUITY GROWTH - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
returns+
EQUITY -0.57% 15.57% 44.84% 6.93% 64.71% 9.89% 14.85% -0.89% 39.14% 15.69%
GROWTH -
CLASS B
Lipper 3.08% 14.79% 26.91% -4.49% 36.70% 8.08% 10.63% -2.17% 30.79% 19.24%
Growth
Funds
AverageA
S&P 500 5.10% 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96%
Consumer 4.43% 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
Price Index
</TABLE>
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
(LARGE SOLID BOX) EQUITY GROWTH - CLASS B
GROWTH OPPORTUNITIES - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total 1988 1989 1990 1991 1992 1993 1994 1995 1996
returns+
GROWTH 33.28% 24.14% -1.65% 42.68% 15.03% 22.17% 2.86% 33.04% 17.73%
OPPORTUNITI
ES - CLASS
B
Lipper 14.79% 26.91% -4.49% 36.70% 8.08% 10.63% -2.17% 30.79% 19.24%
Growth
Funds
AverageA
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96%
Consumer 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
Price Index
</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: 17.73
(LARGE SOLID BOX) GROWTH OPPORTUNITIES - CLASS B
STRATEGIC OPPORTUNITIES - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
returns+
STRATEGIC -6.33% 22.25% 32.60% -7.17% 23.08% 12.87% 20.44% -7.22% 37.35% 1.00%
OPPORTUNITI
ES - CLASS
B
Lipper -0.03% 14.09% 26.60% -8.24% 39.91% 8.78% 15.68% -3.38% 30.34% 16.31%
Capital
Appreciatio
n FundsB
S&P 500 5.10% 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96%
Consumer 4.43% 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
Price Index
</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: -7.22
ROW: 10, COL: 1, VALUE: 37.34999999999999
ROW: 11, COL: 1, VALUE: 1.0
(LARGE SOLID BOX) STRATEGIC OPPORTUNITIES - CLASS B
EQUITY INCOME - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
returns+
EQUITY -2.24% 23.23% 18.43% -14.28% 29.81% 14.68% 18.03% 6.39% 31.96% 14.00%
INCOME -
CLASS B
Lipper -2.18% 16.74% 22.18% -6.78% 26.86% 9.77% 13.66% -2.54% 30.17% 18.85%
Equity
Income
Funds
AverageC
S&P 500 5.10% 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96%
Consumer 4.43% 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
Price Index
</TABLE>
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
(LARGE SOLID BOX) EQUITY INCOME - CLASS B
BALANCED - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total 1988 1989 1990 1991 1992 1993 1994 1995 1996
returns+
BALANCED - 20.89% 24.60% -2.94% 34.48% 9.20% 19.66% -5.09% 14.06% 8.29%
CLASS B
Lipper 12.34% 19.57% -0.57% 26.69% 7.07% 10.91% -2.50% 25.16% 13.76%
Balanced
Funds
AverageD
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96%
Consumer 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
Price Index
</TABLE>
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
(LARGE SOLID BOX) BALANCED -
CLASS B
HIGH YIELD - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total 1988 1989 1990 1991 1992 1993 1994 1995 1996
returns+
HIGH YIELD 17.24% 3.64% 7.30% 34.94% 23.09% 20.45% -2.11% 18.34% 12.45%
- - - CLASS B
Lipper High 12.89% -0.58% -10.13% 36.91% 17.51% 18.95% -3.85% 16.43% 13.67%
Current
Yield Funds
AverageE
Merrill 13.47% 4.23% -4.35% 34.58% 18.16% 17.18% -1.17% 19.91% 11.06%
Lynch High
Yield
Master
Index
Consumer 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
Price Index
</TABLE>
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
(LARGE SOLID BOX) HIGH YIELD - CLASS B
STRATEGIC INCOME - CLASS B
Calendar year total 1995 1996
returns+
STRATEGIC 21.35% 12.14%
INCOME -
CLASS B
Lipper 16.92% 11.74%
Multi-Sector
Income
Funds
AverageF
Merrill 19.91% 11.06%
Lynch High
Yield
Master
Index
Consumer 2.54% 3.32%
Price Index
MORTGAGE SECURITIES - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
returns+
MORTGAGE 2.70% 6.72% 13.64% 10.36% 13.61% 5.45% 6.71% 1.94% 17.02% 5.43%
SECURITIES -
CLASS B
Lipper U.S. 2.53% 7.47% 12.71% 9.52% 15.00% 6.38% 7.58% -4.83% 16.29% 3.87%
Mortgage
Funds
AverageG
Salomon 4.06% 8.81% 15.16% 10.90% 15.64% 7.37% 7.04% -1.43% 16.77% 5.37%
Brothers
Mortgage
Index
Consumer 4.43% 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
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: 5.430000000000001
ROW: 11, COL: 1, VALUE: 0.0
(LARGE SOLID BOX) MORTGAGE SECURITIES -
CLASS B
GOVERNMENT INVESTMENT - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total 1988 1989 1990 1991 1992 1993 1994 1995 1996
returns+
GOVERNMEN 6.57% 11.75% 8.37% 13.45% 6.48% 9.36% -4.38% 16.92% 1.37%
T
INVESTMENT
- - - CLASS B
Lipper 6.67% 12.46% 8.22% 14.44% 6.41% 9.42% -4.64% 17.34% 1.72%
General
U.S.
Governmen
t Bond
Funds
AverageH
Salomon 7.10% 14.24% 8.78% 15.33% 7.24% 10.74% -3.40% 18.39% 2.76%
Brothers
Treasury/Ag
ency Index
Consumer 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
Price Index
</TABLE>
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
(LARGE SOLID BOX) GOVERNMENT INVESTMENT - CLASS B
INTERMEDIATE BOND - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
returns+
INTERMEDIAT 2.32% 7.84% 12.11% 7.91% 15.16% 7.13% 11.49% -3.12% 11.51% 2.63%
E BOND -
CLASS B
Lipper 2.13% 7.06% 11.67% 7.22% 15.63% 6.88% 9.52% -3.25% 16.62% 3.12%
Intermediat
e
Investment
Grade
Bond Funds
AverageI
Lehman 3.66% 6.67% 12.77% 9.16% 14.62% 7.17% 8.79% -1.93% 15.33% 4.05%
Brothers
Intermediat
e
Governmen
t/Corporate
Bond Index
Consumer 4.43% 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
Price Index
</TABLE>
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
(LARGE SOLID BOX) INTERMEDIATE BOND - CLASS B
HIGH INCOME MUNICIPAL - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total 1988 1989 1990 1991 1992 1993 1994 1995 1996
returns+
HIGH 11.80% 13.09% 10.29% 12.18% 11.11% 13.79% -8.54% 15.60% 2.28%
INCOME
MUNICIPAL -
CLASS B
Lipper High 11.28% 10.11% 5.13% 11.52% 8.51% 11.41% -4.67% 15.98% 4.17%
Yield
Municipal
Bond
Funds
AverageK
Consumer 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
Price Index
</TABLE>
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
(LARGE SOLID BOX) HIGH INCOME MUNICIPAL - CLASS B
MUNICIPAL BOND - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
returns+
MUNICIPAL -1.56% 12.30% 9.56% 6.91% 11.91% 8.93% 13.17% -8.49% 18.15% 3.69%
BOND -
CLASS B
Lipper -0.94% 11.53% 9.65% 6.05% 12.09% 8.79% 12.47% -6.50% 16.84% 3.30%
General
Municipal
Debt Funds
AverageL
Consumer 4.43% 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
Price Index
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: NIL
ROW: 2, COL: 1, VALUE: -1.56
ROW: 3, COL: 1, VALUE: 12.3
ROW: 4, COL: 1, VALUE: 9.560000000000001
ROW: 5, COL: 1, VALUE: 6.91
ROW: 6, COL: 1, VALUE: 11.91
ROW: 7, COL: 1, VALUE: 8.93
ROW: 8, COL: 1, VALUE: 13.17
ROW: 9, COL: 1, VALUE: -8.49
ROW: 10, COL: 1, VALUE: 18.51
ROW: 11, COL: 1, VALUE: 3.69
(LARGE SOLID BOX) MUNICIPAL BOND -
CLASS B
INTERMEDIATE MUNICIPAL INCOME - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
returns+
INTERMEDIAT 2.33% 7.38% 7.79% 6.37% 9.64% 7.32% 9.43% -6.13% 13.22% 3.23%
E MUNICIPAL
INCOME -
CLASS B
Lipper 1.32% 7.57% 8.26% 6.59% 10.52% 7.80% 10.18% -3.51% 12.89% 3.70%
Intermediat
e Municipal
Debt
Funds
AverageM
Consumer 4.43% 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
Price Index
</TABLE>
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
(LARGE SOLID BOX) INTERMEDIATE MUNICIPAL INCOME -
CLASS B
NEW YORK MUNICIPAL INCOME - CLASS B
Calendar year total 1996
returns+
NEW YORK 2.84%
MUNICIPAL
INCOME -
CLASS B
Lipper New 3.15%
York
Municipal
Debt Funds
AverageO
Consumer 3.32%
Price Index
EQUITY GROWTH - CLASS C
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
returns+
EQUITY -0.57% 15.57% 44.84% 6.93% 64.71% 9.89% 14.85% -0.89% 39.14% 15.69%
GROWTH -
CLASS C
Lipper 3.08% 14.79% 26.91% -4.49% 36.70% 8.08% 10.63% -2.17% 30.79% 19.24%
Growth
Funds
AverageA
S&P 500 5.10% 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96%
Consumer 4.43% 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
Price Index
</TABLE>
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
(LARGE SOLID BOX) EQUITY GROWTH - CLASS C
GROWTH OPPORTUNITIES - CLASS C
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total 1988 1989 1990 1991 1992 1993 1994 1995 1996
returns+
GROWTH 33.28% 24.14% -1.65% 42.68% 15.03% 22.17% 2.86% 33.04% 17.73%
OPPORTUNITI
ES - CLASS
C
Lipper 14.79% 26.91% -4.49% 36.70% 8.08% 10.63% -2.17% 30.79% 19.24%
Growth
Funds
AverageA
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96%
Consumer 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
Price Index
</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: 17.73
(LARGE SOLID BOX) STRATEGIC OPPORTUNITIES - CLASS C
EQUITY INCOME - CLASS C
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
returns+
EQUITY -2.24% 23.23% 18.43% -14.28% 29.81% 14.68% 18.03% 6.39% 31.96% 14.00%
INCOME -
CLASS C
Lipper -2.18% 16.74% 22.18% -6.78% 26.86% 9.77% 13.66% -2.54% 30.17% 18.85%
Equity
Income
Funds
AverageC
S&P 500 5.10% 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96%
Consumer 4.43% 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
Price Index
</TABLE>
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
(LARGE SOLID BOX) EQUITY INCOME - CLASS C
BALANCED - CLASS C
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total 1988 1989 1990 1991 1992 1993 1994 1995 1996
returns+
BALANCED - 20.89% 24.60% -2.94% 34.48% 9.20% 19.66% -5.09% 14.06% 8.29%
CLASS C
Lipper 12.34% 19.57% -0.57% 26.69% 7.07% 10.91% -2.50% 25.16% 13.76%
Balanced
Funds
AverageD
S&P 500 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96%
Consumer 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
Price Index
</TABLE>
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
(LARGE SOLID BOX) BALANCED -
CLASS C
HIGH YIELD - CLASS C
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total 1988 1989 1990 1991 1992 1993 1994 1995 1996
returns+
HIGH YIELD 17.24% 3.64% 7.30% 34.94% 23.09% 20.45% -2.11% 18.34% 12.45%
- CLASS C
Lipper High 12.89% -0.58% -10.13% 36.91% 17.51% 18.95% -3.85% 16.43% 13.67%
Current Yield
Funds
AverageE
Merrill 13.47% 4.23% -4.35% 34.58% 18.16% 17.18% -1.17% 19.91% 11.06%
Lynch High
Yield
Master
Index
Consumer 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
Price Index
</TABLE>
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
(LARGE SOLID BOX) HIGH YIELD - CLASS C
STRATEGIC INCOME - CLASS C
Calendar year total 1995 1996
returns+
STRATEGIC 21.35% 12.14%
INCOME -
CLASS C
Lipper 16.92% 11.74%
Multi-Sector
Income
Funds
AverageF
Merrill 19.91% 11.06%
Lynch High
Yield
Master
Index
Consumer 2.54% 3.32%
Price Index
GOVERNMENT INVESTMENT - CLASS C
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total 1988 1989 1990 1991 1992 1993 1994 1995 1996
returns+
GOVERNMEN 6.57% 11.75% 8.37% 13.45% 6.48% 9.36% -4.38% 16.92% 1.37%
T
INVESTMENT
- CLASS C
Lipper 6.67% 12.46% 8.22% 14.44% 6.41% 9.42% -4.64% 17.34% 1.72%
General
U.S.
Governmen
t Bond
Funds
AverageH
Salomon 7.10% 14.24% 8.78% 15.33% 7.24% 10.74% -3.40% 18.39% 2.76%
Brothers
Treasury/Ag
ency Index
Consumer 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
Price Index
</TABLE>
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
(LARGE SOLID BOX) GOVERNMENT INVESTMENT -
CLASS C
INTERMEDIATE BOND - CLASS C
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
returns+
INTERMEDIAT 2.32% 7.84% 12.11% 7.91% 15.16% 7.13% 11.49% -3.12% 11.51% 2.63%
E BOND -
CLASS C
Lipper 2.13% 7.06% 11.67% 7.22% 15.63% 6.88% 9.52% -3.25% 16.62% 3.12%
Intermediat
e
Investment
Grade
Bond Funds
AverageI
Lehman 3.66% 6.67% 12.77% 9.16% 14.62% 7.17% 8.79% -1.93% 15.33% 4.05%
Brothers
Intermediat
e
Governmen
t/Corporate
Bond Index
Consumer 4.43% 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
Price Index
</TABLE>
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
(LARGE SOLID BOX) INTERMEDIATE BOND - CLASS C
SHORT FIXED-INCOME - CLASS C
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total 1988 1989 1990 1991 1992 1993 1994 1995 1996
returns+
SHORT 6.19% 10.31% 5.87% 13.37% 7.61% 9.49% -3.37% 9.81% 4.57%
FIXED-INCO
ME - CLASS
C
Lipper Short 6.86% 10.22% 7.87% 12.88% 5.97% 6.45% -0.44% 10.84% 4.64%
Investment
Grade
Bond
Funds
AverageJ
Lehman 6.84% 10.97% 9.69% 11.83% 6.35% 5.55% 0.55% 10.96% 5.26%
Brothers
1-3 Year
Governmen
t/Corporate
Bond Index
Consumer 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
Price Index
</TABLE>
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
(LARGE SOLID BOX) SHORT FIXED-INCOME - CLASS C
HIGH INCOME MUNICIPAL - CLASS C
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total 1988 1989 1990 1991 1992 1993 1994 1995 1996
returns+
HIGH 11.80% 13.09% 10.29% 12.18% 11.11% 13.79% -8.54% 15.60% 2.28%
INCOME
MUNICIPAL -
CLASS C
Lipper High 11.28% 10.11% 5.13% 11.52% 8.51% 11.41% -4.67% 15.98% 4.17%
Yield
Municipal
Bond
Funds
AverageK
Consumer 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
Price Index
</TABLE>
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
(LARGE SOLID BOX) HIGH INCOME MUNICIPAL - CLASS C
INTERMEDIATE MUNICIPAL INCOME - CLASS C
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
returns+
INTERMEDIAT 2.33% 7.38% 7.79% 6.37% 9.64% 7.32% 9.43% -6.13% 13.22% 3.23%
E MUNICIPAL
INCOME -
CLASS C
Lipper 1.32% 7.57% 8.26% 6.59% 10.52% 7.80% 10.18% -3.51% 12.89% 3.70%
Intermediat
e Municipal
Debt
Funds
AverageM
Consumer 4.43% 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
Price Index
</TABLE>
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
(LARGE SOLID BOX) INTERMEDIATE MUNICIPAL INCOME -
CLASS C
+ 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 MORTGAGE
SECURITIES AND MUNICIPAL BOND) 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 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 WOULD HAVE BEEN HIGHER.
FOR EQUITY GROWTH, EQUITY INCOME, INTERMEDIATE BOND, AND
INTERMEDIATE MUNICIPAL INCOME, 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 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 WOULD HAVE BEEN LOWER.
INITIAL OFFERING OF CLASS A OF MUNICIPAL BOND TOOK PLACE ON MARCH
3, 1997. CLASS A RETURNS PRIOR TO AND INCLUDING DECEMBER 31, 1996
THROUGH JULY 1, 1996 ARE THOSE OF CLASS T WHICH REFLECT A 12B-1 FEE OF
0.25%. CLASS A RETURNS PRIOR TO JULY 1, 1996 ARE THOSE OF INITIAL
CLASS WHICH HAS NO 12B-1 FEE. IF CLASS A'S 12B-1 FEE HAD BEEN
REFLECTED, TOTAL RETURNS PRIOR TO AND INCLUDING DECEMBER 31, 1996
THROUGH JULY 1, 1996 WOULD HAVE BEEN HIGHER AND TOTAL RETURNS PRIOR TO
JULY 1, 1996 WOULD HAVE BEEN LOWER.
INITIAL OFFERING OF CLASS T AND CLASS B OF MUNICIPAL BOND TOOK
PLACE ON JULY 1, 1996. CLASS T AND CLASS B RETURNS PRIOR TO JULY 1,
1996 ARE THOSE OF INITIAL CLASS WHICH HAS NO 12B-1 FEE. IF CLASS T'S
AND CLASS B'S RESPECTIVE 12B-1 FEES HAD BEEN REFLECTED, TOTAL RETURNS
PRIOR TO JULY 1, 1996 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 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 WOULD HAVE
BEEN LOWER.
INITIAL OFFERING OF CLASS B OF GROWTH OPPORTUNITIES TOOK PLACE ON
MARCH 3, 1997. CLASS B RETURNS 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 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 HIGH INCOME MUNICIPAL 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.
CLASS C OF EACH FUND (EXCEPT STRATEGIC OPPORTUNITIES, MORTGAGE
SECURITIES, MUNICIPAL BOND, SHORT-INTERMEDIATE MUNICIPAL INCOME,
CALIFORNIA MUNICIPAL INCOME, AND NEW YORK MUNICIPAL INCOME) IS
EXPECTED TO COMMENCE OPERATIONS ON OR ABOUT NOVEMBER 3, 1997.
CLASS C RETURNS FOR STRATEGIC INCOME 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 AFTER DECEMBER 31,
1995 WOULD HAVE BEEN LOWER.
CLASS C RETURNS FOR EQUITY GROWTH 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 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 WOULD
HAVE BEEN LOWER.
CLASS C RETURNS FOR GROWTH OPPORTUNITIES 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 WOULD HAVE
BEEN LOWER.
CLASS C RETURNS FOR BALANCED 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 WOULD HAVE BEEN LOWER.
CLASS C RETURNS FOR HIGH YIELD, GOVERNMENT INVESTMENT, AND HIGH
INCOME MUNICIPAL FROM DECEMBER 31, 1996 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 FROM DECEMBER 31, 1996 THROUGH DECEMBER
31, 1995 AND PRIOR TO JUNE 30, 1994 WOULD HAVE BEEN LOWER.
CLASS C RETURNS FOR SHORT FIXED-INCOME 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.
CLASS C RETURNS FOR EQUITY INCOME, INTERMEDIATE BOND, AND
INTERMEDIATE MUNICIPAL INCOME FROM DECEMBER 31, 1996 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 FROM DECEMBER 31, 1996 THROUGH
DECEMBER 31, 1995 AND PRIOR TO JUNE 30, 1994 WOULD HAVE BEEN
LOWER.
[A] THE LIPPER GROWTH FUNDS AVERAGE CURRENTLY REFLECTS THE PERFORMANCE
OF OVER 669 MUTUAL FUNDS WITH SIMILAR OBJECTIVES.
[B] THE LIPPER CAPITAL APPRECIATION FUNDS AVERAGE CURRENTLY REFLECTS
THE PERFORMANCE OF OVER 189 MUTUAL FUNDS WITH SIMILAR OBJECTIVES.
[C] THE LIPPER EQUITY INCOME FUNDS AVERAGE CURRENTLY REFLECTS THE
PERFORMANCE OF OVER 160 MUTUAL FUNDS WITH SIMILAR OBJECTIVES.
[D] THE LIPPER BALANCED FUNDS AVERAGE CURRENTLY REFLECTS THE
PERFORMANCE OF OVER 272 MUTUAL FUNDS WITH SIMILAR OBJECTIVES.
[E] THE LIPPER HIGH CURRENT YIELD FUNDS AVERAGE CURRENTLY REFLECTS THE
PERFORMANCE OF OVER 148 MUTUAL FUNDS WITH SIMILAR OBJECTIVES.
[F] THE LIPPER MULTI-SECTOR INCOME FUNDS AVERAGE CURRENTLY REFLECTS
THE PERFORMANCE OF OVER 51 MUTUAL FUNDS WITH SIMILAR OBJECTIVES.
[G] THE LIPPER U.S. MORTGAGE FUNDS AVERAGE CURRENTLY REFLECTS THE
PERFORMANCE OF OVER 59 MUTUAL FUNDS WITH SIMILAR OBJECTIVES.
[H] THE LIPPER GENERAL U.S. GOVERNMENT BOND FUNDS AVERAGE CURRENTLY
REFLECTS THE PERFORMANCE OF OVER 170 MUTUAL FUNDS WITH SIMILAR
OBJECTIVES.
[I] THE LIPPER INTERMEDIATE INVESTMENT GRADE BOND FUNDS AVERAGE
CURRENTLY REFLECTS THE PERFORMANCE OF OVER 176 MUTUAL FUNDS WITH
SIMILAR OBJECTIVES.
[J] THE LIPPER SHORT INVESTMENT GRADE BOND FUNDS AVERAGE CURRENTLY
REFLECTS THE PERFORMANCE OF OVER 95 MUTUAL FUNDS WITH SIMILAR
OBJECTIVES.
[K] THE LIPPER HIGH YIELD MUNICIPAL BOND FUNDS AVERAGE CURRENTLY
REFLECTS THE PERFORMANCE OF OVER 43 MUTUAL FUNDS WITH SIMILAR
OBJECTIVES.
[L] THE LIPPER GENERAL MUNICIPAL DEBT FUNDS AVERAGE CURRENTLY REFLECTS
THE PERFORMANCE OF OVER 225 MUTUAL FUNDS WITH SIMILAR OBJECTIVES.
[M] THE LIPPER INTERMEDIATE MUNICIPAL DEBT FUNDS AVERAGE CURRENTLY
REFLECTS THE PERFORMANCE OF OVER 136 MUTUAL FUNDS WITH SIMILAR
OBJECTIVES.
[N] THE LIPPER SHORT-INTERMEDIATE MUNICIPAL DEBT FUNDS AVERAGE
CURRENTLY REFLECTS THE PERFORMANCE OF OVER 28 MUTUAL FUNDS WITH
SIMILAR OBJECTIVES.
[O] THE LIPPER NEW YORK MUNICIPAL DEBT FUNDS AVERAGE CURRENTLY
REFLECTS THE PERFORMANCE OF OVER 96 MUTUAL FUNDS WITH SIMILAR
OBJECTIVES.
TECHNOQUANT IS A TRADEMARK OF FMR CORP.
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.
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 October
31, 1997. The SAI has been filed with the Securities and Exchange
Commission (SEC) and is available along with other related materials
on the SEC's Internet Web site (http://www.sec.gov). The SAI is
incorporated herein by reference (legally forms a part of the
prospectus). For a free copy of either document, 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-0297-01
GROWTH FUNDS:
Fidelity Advisor TechnoQuantTM 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 High Income Municipal Fund
Fidelity Advisor Municipal Bond Fund
Fidelity Advisor Intermediate Municipal Income Fund
Fidelity Advisor Short-Intermediate Municipal Income Fund
STATE MUNICIPAL FUNDS:
Fidelity Advisor California Municipal Income Fund
Fidelity Advisor New York Municipal Income Fund
PROSPECTUS
OCTOBER 31, 1997(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON,
MA 02109
CONTENTS
<TABLE>
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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-SHELTERED RETIREMENT PLANS.
HOW TO BUY SHARES OPENING AN ACCOUNT AND MAKING ADDITIONAL
INVESTMENTS.
HOW TO SELL SHARES TAKING MONEY OUT AND CLOSING YOUR ACCOUNT.
INVESTOR SERVICES SERVICES TO HELP YOU MANAGE YOUR ACCOUNT.
SHAREHOLDER AND ACCOUNT POLICIES DIVIDENDS, CAPITAL GAINS, AND TAXES
TRANSACTION DETAILS SHARE PRICE CALCULATIONS AND THE TIMING OF
PURCHASES AND REDEMPTIONS.
EXCHANGE RESTRICTIONS
APPENDIX A
APPENDIX B
</TABLE>
KEY FACTS
WHO MAY WANT TO INVEST
Institutional Class shares are offered to accounts managed (i) by a
bank trust department and other trust institutions, (ii) by a
broker-dealer , and (iii) by a registered investment advisor
(RIA) on a discretionary basis (collectively, eligible
intermediaries). Institutional Class shares are available through
eligible intermediaries that have signed a participation agreement
with FDC. The participation agreement specifies certain aggregate
asset minimums and asset qualifications, trading guidelines, marketing
restrictions, and program requirements. In addition, Institutional
Class shares are available through certain eligible intermediaries
that meet qualifications established by FDC but have not signed a
participation agreement.
Institutional Class shares are also offered to insurance company
separate accounts used to fund annuity contracts for employee benefit
plans which, in the aggregate, have more than 200 eligible employees
or a minimum of $1 million in plan assets invested in Fidelity Advisor
funds.
Investors (including employee benefit plans) and intermediaries (other
than eligible intermediaries) that established Institutional Class
accounts prior to June 30, 1995, may continue to purchase
Institutional Class shares.
TechnoQuant(Trademark) 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, High Income
Municipal, Municipal Bond, and Intermediate Municipal Income are
diversified funds.
Strategic Income, Short-Intermediate Municipal Income, California
Municipal Income, and New York 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.
High Income Municipal, Municipal Bond, Intermediate Municipal Income,
and Short-Intermediate Municipal Income are designed for investors in
higher tax brackets who seek high current income that is free from
federal income tax. Municipal Bond, Intermediate Municipal Income, and
Short-Intermediate Municipal Income also invest consistent with
consideration of capital preservation. High Income Municipal may
invest in lower-quality municipal securities which involve greater
risk than investment-grade securities.
California Municipal Income is designed for investors in higher tax
brackets who seek high current income that is free from federal and
California personal income taxes. New York Municipal Income is
designed for investors in higher tax brackets who seek high current
income that is free from federal and New York State and City personal
income taxes.
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.
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.
INSTITUTIONAL CLASS
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,
adjusted to reflect current fees, of the Institutional 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
<TABLE>
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OPERATING EXPENSES EXAMPLES
TECHNOQUANT GROWTH MANAGEMENT FEE 0.60%[A] 1 YEAR $ 15
12B-1 FEE NONE 3 YEARS $ 47
OTHER EXPENSES (AFTER REIMBURSEMENT) 0.90%[A]
TOTAL OPERATING EXPENSES 1.50%
MID CAP 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
EQUITY GROWTH MANAGEMENT FEE 0.61% 1 YEAR $ 8
12B-1 FEE NONE 3 YEARS $ 25
OTHER EXPENSES 0.18% 5 YEARS $ 44
TOTAL OPERATING EXPENSES 0.79% 10 YEARS $ 98
GROWTH OPPORTUNITIES MANAGEMENT FEE 0.61% 1 YEAR $ 9
12B-1 FEE NONE 3 YEARS $ 27
OTHER EXPENSES 0.24% 5 YEARS $ 47
TOTAL OPERATING EXPENSES 0.85% 10 YEARS $ 105
STRATEGIC OPPORTUNITIES MANAGEMENT FEE 0.4 8 % 1 YEAR $ 8
12B-1 FEE NONE 3 YEARS $ 25
OTHER EXPENSES 0. 30 % 5 YEARS $ 43
TOTAL OPERATING EXPENSES 0.78 % 10 YEARS $ 97
LARGE CAP 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
GROWTH & INCOME MANAGEMENT FEE 0.50%[A] 1 YEAR $ 13
12B-1 FEE NONE 3 YEARS $ 40
OTHER EXPENSES (AFTER REIMBURSEMENT) 0.75%[A]
TOTAL OPERATING EXPENSES 1.25%
EQUITY INCOME MANAGEMENT FEE 0.50% 1 YEAR $ 7
12B-1 FEE NONE 3 YEARS $ 23
OTHER EXPENSES 0.21% 5 YEARS $ 40
TOTAL OPERATING EXPENSES 0.71% 10 YEARS $ 88
BALANCED MANAGEMENT FEE 0.45% 1 YEAR $ 8
12B-1 FEE NONE 3 YEARS $ 26
OTHER EXPENSES (AFTER REIMBURSEMENT) 0. 35 % 5 YEARS $ 44
TOTAL OPERATING EXPENSES 0.80 % 10 YEARS $ 99
</TABLE>
[A] BASED ON ESTIMATED EXPENSES FOR FIRST YEAR.
TAXABLE INCOME FUNDS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
OPERATING EXPENSES EXAMPLES
HIGH YIELD MANAGEMENT FEE 0.60% 1 YEAR $ 11
12B-1 FEE NONE 3 YEARS $ 35
OTHER EXPENSES 0.50% 5 YEARS $ 61
TOTAL OPERATING EXPENSES 1.10% 10 YEARS $ 134
STRATEGIC INCOME MANAGEMENT FEE 0. 59 % 1 YEAR $ 11
12B-1 FEE NONE 3 YEARS $ 35
OTHER EXPENSES (AFTER REIMBURSEMENT) 0.5 1 % 5 YEARS $ 61
TOTAL OPERATING EXPENSES 1.10% 10 YEARS $ 134
MORTGAGE SECURITIES MANAGEMENT FEE 0.4 4 % [A] 1 YEAR $ 8
12B-1 FEE NONE 3 YEARS $ 24
OTHER EXPENSES (AFTER
REIMBURSEMENT) 0.3 1 % [A] 5 YEARS $ 42
TOTAL OPERATING EXPENSES 0.75% 10 YEARS $ 93
GOVERNMENT INVESTMENT MANAGEMENT FEE 0.45% 1 YEAR $ 8
12B-1 FEE NONE 3 YEARS $ 24
OTHER EXPENSES (AFTER REIMBURSEMENT) 0.30% 5 YEARS $ 42
TOTAL OPERATING EXPENSES 0.75% 10 YEARS $ 93
INTERMEDIATE BOND MANAGEMENT FEE 0.45% 1 YEAR $ 7
12B-1 FEE NONE 3 YEARS $ 21
OTHER EXPENSES 0.21% 5 YEARS $ 37
TOTAL OPERATING EXPENSES 0.66% 10 YEARS $ 82
SHORT FIXED-INCOME MANAGEMENT FEE 0.45% 1 YEAR $ 8
12B-1 FEE NONE 3 YEARS $ 24
OTHER EXPENSES (AFTER REIMBURSEMENT) 0.3 0 % 5 YEARS $ 42
TOTAL OPERATING EXPENSES 0. 75 % 10 YEARS $ 93
</TABLE>
MUNICIPAL FUNDS
<TABLE>
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OPERATING EXPENSES EXAMPLES
HIGH INCOME MUNICIPAL MANAGEMENT FEE 0.40% 1 YEAR $ 8
12B-1 FEE NONE 3 YEARS $ 24
OTHER EXPENSES (AFTER REIMBURSEMENT) 0.35% 5 YEARS $ 42
TOTAL OPERATING EXPENSES 0.75% 10 YEARS $ 93
MUNICIPAL BOND MANAGEMENT FEE 0.40% [A] 1 YEAR $ 8
12B-1 FEE NONE 3 YEARS $ 24
OTHER EXPENSES (AFTER REIMBURSEMENT) 0.35%[A] 5 YEARS $ 42
TOTAL OPERATING EXPENSES 0.75% 10 YEARS $ 93
</TABLE>
[A] BASED ON ESTIMATED EXPENSES FOR FIRST YEAR.
<TABLE>
<CAPTION>
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OPERATING EXPENSES EXAMPLES
INTERMEDIATE MUNICIPAL INCOME MANAGEMENT FEE 0.40% 1 YEAR $ 8
12B-1 FEE NONE 3 YEARS $ 24
OTHER EXPENSES (AFTER REIMBURSEMENT) 0.35% 5 YEARS $ 42
TOTAL OPERATING EXPENSES 0.75% 10 YEARS $ 93
SHORT-INTERMEDIATE MUNICIPAL
INCOME MANAGEMENT FEE 0.40% 1 YEAR $ 8
12B-1 FEE NONE 3 YEARS $ 24
OTHER EXPENSES (AFTER REIMBURSEMENT) 0.35% 5 YEARS $ 42
TOTAL OPERATING EXPENSES 0.75% 10 YEARS $ 93
</TABLE>
STATE MUNICIPAL FUNDS
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OPERATING EXPENSES EXAMPLES
CALIFORNIA MUNICIPAL INCOME MANAGEMENT FEE 0.40% 1 YEAR $ 8
12B-1 FEE NONE 3 YEARS $ 24
OTHER EXPENSES (AFTER REIMBURSEMENT) 0.35% 5 YEARS $ 42
TOTAL OPERATING EXPENSES 0.75% 10 YEARS $ 93
NEW YORK MUNICIPAL INCOME MANAGEMENT FEE 0.40% 1 YEAR $ 8
12B-1 FEE NONE 3 YEARS $ 24
OTHER EXPENSES (AFTER REIMBURSEMENT) 0.35% 5 YEARS $ 42
TOTAL OPERATING EXPENSES 0.75% 10 YEARS $ 93
</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.
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 table s would have been:
INSTITUTIONAL CLASS
EQUITY GROWTH 0.77%
GROWTH OPPORTUNITIES 0.84%
STRATEGIC OPPORTUNITIES 0.76 %
LARGE CAP 1.48%
EQUITY INCOME 0.70%
BALANCED 0. 77 %
HIGH YIELD 1.05%
MORTGAGE SECURITIES 0.70%
INTERMEDIATE MUNICIPAL INCOME 0.74%
SHORT-INTERMEDIATE MUNICIPAL INCOME 0.74%
CALIFORNIA MUNICIPAL INCOME 0.72%
NEW YORK MUNICIPAL INCOME 0.68%
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:
<TABLE>
<CAPTION>
<S> <C> <C>
EFFECTIVE
DATE
TECHNOQUANT GROWTH 1.50% 12/31/96
MID CAP 1.50% 2/20/96
EQUITY GROWTH 0.95 % 1 1 /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 % 1 1 / 1 /9 7
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
HIGH INCOME MUNICIPAL 0.75% 7/1/95
MUNICIPAL BOND 0.75% 7/1/96
INTERMEDIATE MUNICIPAL INCOME 0.75% 7/1/95
SHORT-INTERMEDIATE MUNICIPAL INCOME 0.75% 7/1/95
CALIFORNIA MUNICIPAL INCOME 0.75% 8/1/95
NEW YORK MUNICIPAL INCOME 0.75% 8/1/95
</TABLE>
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 0.9 6 % 1.55%
MORTGAGE SECURITIES [A] 4.1 3 % 4.57%
GOVERNMENT INVESTMENT 0.38% 0.83%
SHORT FIXED-INCOME 0.55% 1.00%
HIGH INCOME MUNICIPAL 3.86% 4.26%
MUNICIPAL BOND [A] 1.14% 1.54%
INTERMEDIATE MUNICIPAL INCOME 0.44% 0.84%
SHORT-INTERMEDIATE MUNICIPAL INCOME 13.15% 13.55%
CALIFORNIA MUNICIPAL INCOME 0.45% 0.85%
NEW YORK MUNICIPAL INCOME 3.43% 3.83%
</TABLE>
[A] BASED ON ESTIMATED EXPENSES FOR THE FIRST YEAR.
Expenses eligible for reimbursement do not include interest, taxes,
brokerage commissions, and extraordinary expenses.
FINANCIAL HIGHLIGHTS
The financial highlights tables that follow for certain funds contain
annual information which has been audited by Coopers & Lybrand,
L.L.P., independent accountants. The financial highlights tables
that follow for Mortgage Securities have been audited by Price
Waterhouse LLP , 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.
TECHNOQUANT - INSTITUTIONAL CLASS
1.
2.SELECTED PER-SHARE DATA AND RATIOSD 1997G
3.NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
4.INCOME FROM INVESTMENT OPERATIONS
5. NET INVESTMENT INCOME (LOSS) .00
6. NET REALIZED AND UNREALIZED GAIN (LOSS) .00
7. TOTAL FROM INVESTMENT OPERATIONS .00
8.NET ASSET VALUE, END OF PERIOD $ 10.00
9.TOTAL RETURNB,C 0.00%
10.NET ASSETS, END OF PERIOD (000 OMITTED) $ 1,223
11.RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.50%A,E
12.RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET (.07)%A
ASSETS
13.PORTFOLIO TURNOVER 398%A
14.AVERAGE COMMISSION RATEF $ .0281
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 MAY 31, 1997 (UNAUDITED) .
MID CAP - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C>
15. YEAR ENDED
NOVEMBER 30
16.SELECTED PER-SHARE DATA AND RATIOSD 1997I 1996H
17.NET ASSET VALUE, BEGINNING OF PERIOD $ 11.70 $ 10.00
18.INCOME FROM INVESTMENT OPERATIONS
19. NET INVESTMENT INCOME (LOSS) .02 (.02)
20. NET REALIZED AND UNREALIZED GAIN (LOSS) .69 1.72
21. TOTAL FROM INVESTMENT OPERATIONS .71 1.70
22.LESS DISTRIBUTIONS
23. FROM NET INVESTMENT INCOME (.02) --
24. FROM NET REALIZED GAIN (.20) --
25. TOTAL DISTRIBUTIONS (.22) --
26.NET ASSET VALUE, END OF PERIOD $ 12.19 $ 11.70
27.TOTAL RETURNB,C 6.23% 17.00%
28.NET ASSETS, END OF PERIOD (000 OMITTED) $ 55,233 $ 3,600
29.RATIO OF EXPENSES TO AVERAGE NET ASSETS .91%A 1.50%A,E
30.RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE .81%A,F 1.50%A
REDUCTIONS
31.RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET .29%A (.27)%A
ASSETS
32.PORTFOLIO TURNOVER 229%A 101%A
33.AVERAGE COMMISSION RATEG $ .0388 A $ .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.
I SIX MONTHS ENDED MAY 31, 1997 (UNAUDITED)
EQUITY GROWTH - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
34. YEARS ENDED NOVEMBER 30
35.SELECT
ED 1997J 1996 1995 1994E 1993 1992 1991 1990 1989 1988 1987
PER-SHARE
DATA AND
RATIOS
36.NET
ASSET $ 45.52 $ 40.39 $ 28.90 $ 29.74 $ 26.37 $ 24.28 $ 15.55 $ 17.32 $ 12.02 $ 9.92 $ 13.18
VALUE,
BEGINNING OF
PERIOD
37.INCOME
FROM
INVESTMENT
OPERATIONS
38. NET .03D .45D .28 .30 .19D .17 .04 .01 .06 .28I .00 D
INVESTMENT
INCOME
39. NET 2.92 7.00 11.69 .42 3.78 4.55 8.69 .34 5.50 2.59 (2.03)
REALIZED AND
UNREALIZED
GAIN (LOSS)
40. TOTAL 2.95 7.45 11.97 .72 3.97 4.72 8.73 .35 5.56 2.87 (2.03)
FROM
INVESTMENT
OPERATIONS
41.LESS
DISTRIBUTIONS
42. FROM (.37) (.21)F (.27) (.11) (.10) (.03) -- (.08) (.26) (.01) (.01)
NET
INVESTMENT
INCOME
43. FROM (1.23) (2.11)F (.16) (1.45) (.50) (2.60) -- (2.04) -- (.76) (1.22)
NET REALIZED
GAIN
44. IN -- -- (.05) -- -- -- -- -- -- -- --
EXCESS OF NET
REALIZED GAIN
45. TOTAL (1.60) (2.32) (.48) (1.56) (.60) (2.63) -- (2.12) (.26) (.77) (1.23)
DISTRIBUTIONS
46.NET
ASSET $ 46.87 $ 45.52 $ 40.39 $ 28.90 $ 29.74 $ 26.37 $ 24.28 $ 15.55 $ 17.32 $ 12.02 $ 9.92
VALUE,
END OF PERIOD
47.TOTAL 6.81% 19.68% 42.15% 2.46% 15.36% 21.14% 56.14% 2.75% 47.18% 29.77% (17.12)%
RETURNB,C
48.NET $ 1,106,643 $ 1,323,526 $ 791,074 $ 410,450 $ 296,466 $ 179,325 $ 68,766 $ 27,473 $ 24,523 $ 20,182 $ 43,537
ASSETS, END
OF PERIOD
(000
OMITTED)
49.RATIO
OF .78%A .79% .83% .86% .95% .98% 1.13% 1.74% 1.60% 1.47% 1.11%
EXPENSES
TO AVERAGE
NET ASSETS
50.RATIO
OF .75%A,G .77%G .83% .84%G .94%G .98% 1.13% 1.74% 1.60% 1.47% 1.11%
EXPENSES
TO AVERAGE
NET ASSETS
AFTER
EXPENSE
REDUCTIONS
51.RATIO
OF .44%A 1.11% .92% 1.00% .66% .73% .25% .07% .38% 1.20% .00%
NET
INVESTMENT
INCOME
TO AVERAGE
NET ASSETS
52.PORTFO
LIO 139%A 76% 97% 137% 160% 240% 254% 262% 269% 331% 226%
TURNOVER
53.AVERAGE $ .0425 $ .0414
COMMISSION
RATEH
</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 EFFECTIVE DECEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION
93-2, "DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION
OF INCOME, CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY
INVESTMENT COMPANIES." AS A RESULT, NET INVESTMENT INCOME PER SHARE
MAY REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX
DIFFERENCES.
F THE AMOUNTS SHOWN REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK
AND TAX DIFFERENCES.
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 AR 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 DURING THE PERIOD, A SIGNIFICANT SHAREHOLDER REDEMPTION CAUSED AN
UNUSUALLY HIGH LEVEL OF INVESTMENT INCOME PER SHARE.
J SIX MONTHS ENDED MAY 31, 1997 (UNAUDITED)
GROWTH OPPORTUNITIES - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
54. YEARS ENDED OCTOBER 31
55.SELECTED PER-SHARE DATA AND RATIOS 1997H 1996 1995E
56.NET ASSET VALUE, BEGINNING OF PERIOD $ 35.47 $ 30.97 $ 29.04
57.INCOME FROM INVESTMENT OPERATIONS
58. NET INVESTMENT INCOME .38D .77D .12
59. NET REALIZED AND UNREALIZED GAIN (LOSS) 3.39 4.74 1.81
60. TOTAL FROM INVESTMENT OPERATIONS 3.77 5.51 1.93
61.LESS DISTRIBUTIONS
62. FROM NET INVESTMENT INCOME (.71) (.61) --
63. FROM NET REALIZED GAIN (1.44) (.40) --
64. TOTAL DISTRIBUTIONS (2.15) (1.01) --
65.NET ASSET VALUE, END OF PERIOD $ 37.09 $ 35.47 $ 30.97
66.TOTAL RETURNB,C 10.86% 18.25% 6.65%
67.NET ASSETS, END OF PERIOD (000 OMITTED) $ 290,567 $ 250,283 $ 71,953
68.RATIO OF EXPENSES TO AVERAGE NET ASSETS .69%A .85% .82%A
69.RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE .68%A,F .84%F .81%A,F
REDUCTIONS
70.RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 2.13%A 2.38% 2.33%A
71.PORTFOLIO TURNOVER 38%A 33% 39%
72.AVERAGE COMMISSION RATEG $ .0471 $ .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 SIX MONTHS ENDED APRIL 30, 1997 (UNAUDITED)
STRATEGIC OPPORTUNITIES - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
73. YEARS ENDED DECEMBER 31
74.SELECTED PER-SHARE DATA AND RATIOS 1997I 1996 1995E
75.NET ASSET VALUE, BEGINNING OF PERIOD $ 22.57 $ 24.80 $ 22.35
76.INCOME FROM INVESTMENT OPERATIONS
77. NET INVESTMENT INCOME (LOSS) (.04)D .29D .55
78. NET REALIZED AND UNREALIZED GAIN (LOSS) 2.86 .17 3.00
79. TOTAL FROM INVESTMENT OPERATIONS 2.82 .46 3.55
80.LESS DISTRIBUTIONS
81. FROM NET INVESTMENT INCOME -- (.34) (.55)
82. FROM NET REALIZED GAIN (.87) (2.35) (.55)
83. TOTAL DISTRIBUTIONS (.87) (2.69) (1.10)
84.NET ASSET VALUE, END OF PERIOD $ 24.52 $ 22.57 $ 24.80
85.TOTAL RETURNB,C 12.85% 1.99% 15.96%
86.NET ASSETS, END OF PERIOD (000 OMITTED) $ 3,960 $ 41,832 $ 20,429
87.RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.24%A,F .78% .97%A
88.RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE 1.23%A,G .76%G .96%A,G
REDUCTIONS
89.RATIO OF NET INVESTMENT INCOME (LOSS) TO AVERAGE NET (.30)%A 1.21% 2.55%A
ASSETS
90.PORTFOLIO TURNOVER 41%A 151% 142%
91.AVERAGE COMMISSION RATEH $ .0420 $ .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 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 SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
LARGE CAP - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C>
92. YEAR ENDED
NOVEMBER 30
93.SELECTED PER-SHARE DATA AND RATIOSD 1997I 1996H
94.NET ASSET VALUE, BEGINNING OF PERIOD $ 11.86 $ 10.00
95.INCOME FROM INVESTMENT OPERATIONS
96. NET INVESTMENT INCOME .03 .03
97. NET REALIZED AND UNREALIZED GAIN (LOSS) .75 1.83
98. TOTAL FROM INVESTMENT OPERATIONS .78 1.86
99.LESS DISTRIBUTIONS
100. FROM NET REALIZED GAIN (.09) --
101.NET ASSET VALUE, END OF PERIOD $ 12.55 $ 11.86
102.TOTAL RETURNB,C 6.64% 18.60%
103.NET ASSETS, END OF PERIOD (000 OMITTED) $ 5,733 $ 9,144
104.RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.10%A 1.50%A,E
105.RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE 1.07%A,F 1.48%A,F
REDUCTIONS
106.RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS .46%A .38%A
107.PORTFOLIO TURNOVER 101%A 59%A
108.AVERAGE COMMISSION RATEG $ .0371 $ .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 SIX MONTHS ENDED MAY 31, 1997 (UNAUDITED)
GROWTH & INCOME - INSTITUTIONAL CLASS
109.
110.SELECTED PER-SHARE DATA AND RATIOSD 1997G
111.NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
112.INCOME FROM INVESTMENT OPERATIONS
113. NET INVESTMENT INCOME .05
114. NET REALIZED AND UNREALIZED GAIN (LOSS) .86
115. TOTAL FROM INVESTMENT OPERATIONS .91
116.LESS DISTRIBUTIONS
117. FROM NET INVESTMENT INCOME (.02)
118.NET ASSET VALUE, END OF PERIOD $ 10.89
119.TOTAL RETURNB,C 9.11%
120.NET ASSETS, END OF PERIOD (000 OMITTED) $ 1,240
121.RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.25%A,E
122.RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 1.17%A
123.PORTFOLIO TURNOVER 93%A
124.AVERAGE COMMISSION RATEF $ .0275
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 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 MAY 31, 1997 (UNAUDITED).
EQUITY INCOME - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
125. YEARS ENDED NOVEMBER 30
126.SELECTED PER-SHARE DATA AND
RATIOS 1997H 1996 1995 1994D 1993 1992
127.NET ASSET VALUE, BEGINNING
OF PERIOD $ 23.00 $ 20.09 $ 16.07 $ 14.93 $ 12.88 $ 11.08
128.INCOME FROM INVESTMENT OPERATIONS
129. NET INVESTMENT INCOME .21C .42C .45 .41C .39 .49
130. NET REALIZED AND UNREALIZED
GAIN (LOSS) 1.89 .3.37 4.28 1.05 2.02 1.79
131. TOTAL FROM INVESTMENT
OPERATIONS 2.10 3.79 4.73 1.46 2.41 2.28
132.LESS DISTRIBUTIONS
133. FROM NET INVESTMENT
INCOME (.21) (.42) (.43) (.32) (.36) (.48)
134. FROM NET REALIZED GAIN (.59) (.46) (.28) -- -- --
135. TOTAL DISTRIBUTIONS (.80) (.88) (.71) (.32) (.36) (.48)
136.NET ASSET VALUE, END OF
PERIOD $ 24.30 $ 23.00 $ 20.09 $ 16.07 $ 14.93 $ 12.88
137.TOTAL RETURNB,I 9.47% 19.54% 30.43% 9.82% 18.90% 20.91%
138.NET ASSETS, END OF PERIOD
(000 OMITTED) $ 464,643 $ 343,867 $ 297,453 $ 197,533 $ 191,138 $ 139,391
139.RATIO OF EXPENSES TO
AVERAGE NET ASSETS .71%A .71% .74% .73% .80% .71%F
140.RATIO OF EXPENSES TO AVERAGE
NET ASSETS AFTER EXPENSE .68%A,E .70%E .73%E .71%E .79%E .71%
REDUCTIONS
141.RATIO OF NET INVESTMENT INCOME
TO AVERAGE NET ASSETS 1.85%A 2.02% 2.52% 2.62% 3.00% 3.77%
142.PORTFOLIO TURNOVER 50%A 78% 80% 140% 120% 51%
143.AVERAGE COMMISSION RATEG $ .0423 $ .0424
</TABLE>
A ANNUALIZED
B THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
C NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
D EFFECTIVE DECEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION
93-2, "DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION
OF INCOME, CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY
INVESTMENT COMPANIES." AS A RESULT, NET INVESTMENT INCOME PER SHARE
MAY REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX
DIFFERENCES.
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 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 SIX MONTHS ENDED MAY 31, 1997 (UNAUDITED)
I TOTAL RETURNS FOR PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED.
BALANCED - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
144. YEARS ENDED OCTOBER 31
145. SELECTED PER-SHARE DATA AND RATIOS 1997I 1996 1995D
146. NET ASSET VALUE, BEGINNING OF PERIOD $ 16.11 $ 15.40 $ 15.23
147. INCOME FROM INVESTMENT OPERATIONS
148. NET INVESTMENT INCOME .28H .54H .25
149. NET REALIZED AND UNREALIZED GAIN
(LOSS) 1.26 .87 .09
150. TOTAL FROM INVESTMENT OPERATIONS 1.54 1.41 .34
151. LESS DISTRIBUTIONS
152. FROM NET INVESTMENT INCOME (.32) (.67) (.17)
153. FROM NET REALIZED GAIN (.11) (.03) --
154. TOTAL DISTRIBUTIONS (.43) (.70) (.17)
155. NET ASSET VALUE, END OF PERIOD $ 17.22 $ 16.11 $ 15.40
156. TOTAL RETURNB,C 9.67% 9.41% 2.22%
157. NET ASSETS, END OF PERIOD (000
OMITTED) $ 25,190 $ 21,819 $ 993
158. RATIO OF EXPENSES TO AVERAGE NET
ASSETS .78%A 1.06% .92A,E
159. RATIO OF EXPENSES TO AVERAGE NET ASSETS
AFTER EXPENSE .78%A 1.03%F .91%A,F
REDUCTIONS
160. RATIO OF NET INVESTMENT INCOME TO
AVERAGE NET ASSETS 3.45%A 3.54% 4.54%A
161. PORTFOLIO TURNOVER 75%A 223% 297%
162. AVERAGE COMMISSION RATEG $ .0452 $ .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.
I SIX MONTHS ENDED APRIL 30, 1997
HIGH YIELD - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
163. YEARS ENDED OCTOBER 31
164.SELECTED PER-SHARE DATA AND RATIOS H 1997G 1996 1995 D
165.NET ASSET VALUE, BEGINNING OF PERIOD $ 12.120 $ 11.760 $ 11.560
166.INCOME FROM INVESTMENT OPERATIONS
167. NET INVESTMENT INCOME .537 1.070 .390
168. NET REALIZED AND UNREALIZED GAIN (LOSS) (.117) .368 .193
169. TOTAL FROM INVESTMENT OPERATIONS .420 1.438 .583
170.LESS DISTRIBUTIONS
171. FROM NET INVESTMENT INCOME (.660) (1.078) (.383)
172. FROM NET REALIZED GAIN (.060) -- --
173. TOTAL DISTRIBUTIONS (.720) (1.078) (.383)
174.NET ASSET VALUE, END OF PERIOD $ 11.820 $ 12.120 $ 11.760
175.TOTAL RETURNB,C 3.51% 12.81% 5.07%
176.NET ASSETS, END OF PERIOD (000 OMITTED) $ 51,119 $ 37,632 $ 126
177.RATIO OF EXPENSES TO AVERAGE NET ASSETS .88%A 1.10% .70%A
178.RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE .87%A,E 1.05%E .70%A
REDUCTIONS
179.RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 9.02%A 9.26% 8.77%A
180.PORTFOLIO TURNOVER 94%A 121% 112%
181.AVERAGE COMMISSION RATEF $ .0369 $ .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 SIX MONTHS ENDED APRIL 30, 1997 (UNAUDITED)
H NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED USING AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
STRATEGIC INCOME - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
182. YEARS ENDED DECEMBER 31
183.SELECTED PER-SHARE DATA AND RATIOS 1997H 1996 1995E
184.NET ASSET VALUE, BEGINNING OF PERIOD $ 11.300 $ 11.030 $ 10.890
185.INCOME FROM INVESTMENT OPERATIONS
186. NET INVESTMENT INCOME .417D .826D .456
187. NET REALIZED AND UNREALIZED GAIN (LOSS) .083 .548 .340
188. TOTAL FROM INVESTMENT OPERATIONS .500 1.374 .796
189.LESS DISTRIBUTIONS
190. FROM NET INVESTMENT INCOME (.380) (.804) (.426)
191. FROM NET REALIZED GAIN (.060) (.300) (.230)
192. TOTAL DISTRIBUTIONS (.440) (1.104) (.656)
193.NET ASSET VALUE, END OF PERIOD $ 11.360 $ 11.300 $ 11.030
194.TOTAL RETURNB,C 4.54% 13.04% 7.47%
195.NET ASSETS, END OF PERIOD (000 OMITTED) $ 6,318 $ 6,107 $ 107
196.RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.10%A,F 1.10%F 1.10%A,F
197.RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE 1.09%A,G 1.10% 1.10%A
REDUCTIONS
198.RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 7.49%A 7.47% 7.53%A
199.PORTFOLIO TURNOVER 139%A 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 VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
H SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
MORTGAGE SECURITIES - INSTITUTIONAL CLASS
200. YEAR ENDED
JULY 31
201.SELECTED PER-SHARE DATA AND RATIOS F 1997E
202.NET ASSET VALUE, BEGINNING OF PERIOD $ 10.830
203.INCOME FROM INVESTMENT OPERATIONS
204. NET INVESTMENT INCOME .263
205. NET REALIZED AND UNREALIZED GAIN (LOSS) .226
206. TOTAL FROM INVESTMENT OPERATIONS .489
207.LESS DISTRIBUTIONS
208. FROM NET INVESTMENT INCOME (.279)
209.NET ASSET VALUE, END OF PERIOD $ 11.040
210.TOTAL RETURNB,C 4. 59 %
211.NET ASSETS, END OF PERIOD (000 OMITTED) $ 13,17 7
212.RATIO OF EXPENSES TO AVERAGE NET ASSETS .75%A,D
213.RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE .70%A,G
REDUCTIONS
214.RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 6.29%A
215.PORTFOLIO TURNOVER 149%
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.
GOVERNMENT INVESTMENT - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
216. YEARS ENDED OCTOBER 31
217.SELECTED PER-SHARE DATA AND RATIOS 1997G 1996 1995E
218.NET ASSET VALUE, BEGINNING OF PERIOD $ 9.480 $ 9.670 $ 9.560
219.INCOME FROM INVESTMENT OPERATIONS
220. NET INVESTMENT INCOME .287D .604D .197
221. NET REALIZED AND UNREALIZED GAIN (LOSS) (.178) (.180) .108
222. TOTAL FROM INVESTMENT OPERATIONS .109 .424 .305
223.LESS DISTRIBUTIONS
224. FROM NET INVESTMENT INCOME (.289) (.614) (.195)
225.NET ASSET VALUE, END OF PERIOD $ 9.300 $ 9.480 $ 9.670
226.TOTAL RETURNB,C 1.16% 4.58% 3.23%
227.NET ASSETS, END OF PERIOD (000 OMITTED) $ 20,600 $ 27,660 $ 14,588
228.RATIO OF EXPENSES TO AVERAGE NET ASSETS .75%A,F .75%F .75%A,F
229.RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 6.14%A 6.43% 6.48%A
230.PORTFOLIO TURNOVER 160%A 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.
G SIX MONTHS ENDED APRIL 30, 1997 (UNAUDITED)
INTERMEDIATE BOND - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
231. YEARS ENDED NOVEMBER 30
232.SELECTED 1997G 1996 1995 1994E 1993 1992 1991 1990 1989 1988 1987
PER-SHARE
DATA AND
RATIOS
233.NET $ 10.620 $ 10.770 $ 10.270 $ 11.160 $ 10.640 $ 10.550 $ 10.140 $ 10.410 $ 10.180 $ 10.250 $ 11.240
ASSET VALUE,
BEGINNING OF
PERIOD
234.INCOME
FROM
INVESTMENT
OPERATIONS
235. NET .334D .705D .671 .602 .832 .840 .884 .901 .937 .944 .953
INVESTMENT
INCOME
236. NET (.220) (.151) .499 (.833) .531 .102 .411 (.270) .230 (.070) (.770)
REALIZED AND
UNREALIZED
GAIN (LOSS)
237. TOTAL .114 .554 1.170 (.231) 1.363 .942 1.295 .631 1.167 .874 .183
FROM
INVESTMENT
OPERATIONS
238.LESS
DISTRIBUTIONS
239. FROM (.334) (.704) (.670) (.597) (.843) (.852) (.885) (.901) (.937) (.944) (.953)
NET
INVESTMENT
INCOME
240. FROM -- -- -- -- -- -- -- -- -- -- (.220)
NET REALIZED
GAIN
241. FROM -- -- -- (.062) -- -- -- -- -- -- --
RETURN OF
CAPITAL
242. TOTAL (.334) (.704) (.670) (.659) (.843) (.852) (.885) (.901) (.937) (.944) (1.173)
DISTRIBUTIONS
243.NET $ 10.400 $ 10.620 $ 10.770 $ 10.270 $ 11.160 $ 10.640 $ 10.550 $ 10.140 $ 10.410 $ 10.180 $ 10.250
ASSET VALUE,
END OF PERIOD
244.TOTAL 1.10% 5.40% 11.73% (2.10)% 13.17% 9.21% 13.35% 6.46% 12.03% 8.81% 1.78%
RETURNB,C
245.NET $ 191,827 $ 211,866 $ 208,861 $ 172,122 $ 183,790 $ 160,156 $ 327,756 $ 356,564 $ 426,832 $ 418,929 $ 407,228
ASSETS, END
OF PERIOD
(000
OMITTED)
246.RATIO OF .67%A .66% .67%F .61% .64% .57% .57% .58% .54% .54% .53%
EXPENSES TO
AVERAGE NET
ASSETS
247.RATIO OF 6.45%A 6.69% 6.47% 6.45% 7.41% 7.96% 8.59% 8.90% 9.16% 9.16% 9.03%
NET
INVESTMENT
INCOME TO
AVERAGE NET
ASSETS
248.PORTFOLI 121%A 200% 189% 68% 59% 7% 60% 59% 87% 48% 92%
O TURNOVER
</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 EFFECTIVE DECEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION
93-2, "DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION
OF INCOME, CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY
INVESTMENT COMPANIES." AS A RESULT, NET INVESTMENT INCOME PER SHARE
MAY REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX
DIFFERENCES.
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 SIX MONTHS ENDED MAY 31, 1997 (UNAUDITED)
SHORT FIXED-INCOME - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
249. YEARS ENDED OCTOBER 31
250.SELECTED PER-SHARE DATA AND RATIOS 1997G 1996 1995E
251.NET ASSET VALUE, BEGINNING OF PERIOD $ 9.370 $ 9.470 $ 9.450
252.INCOME FROM INVESTMENT OPERATIONS
253. NET INVESTMENT INCOME .293D .598D .137
254. NET REALIZED AND UNREALIZED GAIN (LOSS) (.090) (.098) .067
255. TOTAL FROM INVESTMENT OPERATIONS .203 .500 .204
256.LESS DISTRIBUTIONS
257. FROM NET INVESTMENT INCOME (.293) (.600) (.136)
258. FROM RETURN OF CAPITAL -- -- (.048)
259. TOTAL DISTRIBUTIONS (.293) (.600) (.184)
260.NET ASSET VALUE, END OF PERIOD $ 9.280 $ 9.370 $ 9.470
261.TOTAL RETURNB,C 2.20% 5.45% 2.18%
262.NET ASSETS, END OF PERIOD (000 OMITTED) $ 4,604 $ 9,200 $ 9,827
263.RATIO OF EXPENSES TO AVERAGE NET ASSETS .75%A,F .80%F .85%A,F
264.RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 6.30%A 6.37% 6.10%A
265.PORTFOLIO TURNOVER 107%A 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.
G SIX MONTHS ENDED APRIL 30, 1997 (UNAUDITED)
HIGH INCOME MUNICIPAL - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
266. YEARS ENDED OCTOBER 31
267.SELECTED PER-SHARE DATA AND RATIOS 1997F 1996 1995H
268.NET ASSET VALUE, BEGINNING OF PERIOD $ 11.720 $ 11.880 $ 11.700
269.INCOME FROM INVESTMENT OPERATIONS
270. NET INTEREST INCOME .313E .707E,G .232
271. NET REALIZED AND UNREALIZED GAIN (LOSS) .002 (.197) .180
272. TOTAL FROM INVESTMENT OPERATIONS .315 .510 .412
273.LESS DISTRIBUTIONS
274. FROM NET INTEREST INCOME (.353)G (.670) (.232)
275. IN EXCESS OF NET INTEREST INCOME (.002)I -- --
276. TOTAL DISTRIBUTIONS (.355) (.670) (.232)
277.NET ASSET VALUE, END OF PERIOD $ 11.680 $ 11.720 $ 11.880
278.TOTAL RETURNB,C 2.70% 4.41% 3.55%
279.NET ASSETS, END OF PERIOD (000 OMITTED) $ 774 $ 927 $ 154
280.RATIO OF EXPENSES TO AVERAGE NET ASSETS .75%A,D .75%D .75%A,D
281.RATIO OF NET INTEREST INCOME TO AVERAGE NET ASSETS 5.36%A 5.88% 5.89%A
282.PORTFOLIO TURNOVER 44%A 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 SIX MONTHS ENDED APRIL 30, 1997 (UNAUDITED)
G NET INTEREST INCOME PER SHARE IN 1996 REFLECTS A PAYMENT RECEIVED
FROM AN ISSUER IN BANKRUPTCY WHICH WAS DISTRIBUTED IN 1997.
H FOR THE PERIOD JULY 3, 1995 (COMMENCEMENT OF SALE OF INSTITUTIONAL
CLASS SHARES) TO OCTOBER 31, 1995.
I THE AMOUNTS SHOWN REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK
TO TAX DIFFERENCES.
MUNICIPAL BOND - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C>
283. YEAR ENDED
DECEMBER 31
284.SELECTED PER-SHARE DATA AND RATIOS 1997F 1996E
285.NET ASSET VALUE, BEGINNING OF PERIOD $ 8.190 $ 7.990
286.INCOME FROM INVESTMENT OPERATIONS
287. NET INTEREST INCOME .192 .196
288. NET REALIZED AND UNREALIZED GAIN (LOSS) .040 .200
289. TOTAL FROM INVESTMENT OPERATIONS .232 .396
290.LESS DISTRIBUTIONS
291. FROM NET INTEREST INCOME (.192) (.196)
292.NET ASSET VALUE, END OF PERIOD $ 8.230 $ 8.190
293.TOTAL RETURNB,C 2.88% 5.00%
294.NET ASSETS, END OF PERIOD (000 OMITTED) $ 1,133 $ 846
295.RATIO OF EXPENSES TO AVERAGE NET ASSETS .75%A,D .75%A,D
296.RATIO OF NET INTEREST INCOME TO AVERAGE NET ASSETS 4.77%A 4.88%A
297.PORTFOLIO TURNOVER 34%A 35%
</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 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 JULY 1, 1996 (COMMENCEMENT OF SALE OF INSTITUTIONAL
CLASS SHARES) TO DECEMBER 31, 1996.
F SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
INTERMEDIATE MUNICIPAL INCOME - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
298. YEARS ENDED NOVEMBER 30
299.SELECTED 1997D 1996 1995 1994E 1993 1992 1991 1990 1989 1988 1987
PER-SHARE
DATA AND
RATIOS
300.NET $ 10.410 $ 10.360 $ 9.410 $ 10.460 $ 11.080 $ 10.800 $ 10.640 $ 10.610 $ 10.520 $ 10.380 $ 10.990
ASSET VALUE,
BEGINNING OF
PERIOD
301.INCOME
FROM
INVESTMENT
OPERATIONS
302. NET .238 .487 .477 .481 .536 .666 .682 .689 .674 .650 .641
INTEREST
INCOME
303. NET (.079) .050 .950 (1.030) .260 .280 .160 .030 .090 .140 (.540)
REALIZED AND
UNREALIZED
GAIN (LOSS)
304. TOTAL .159 .537 1.427 (.549) .796 .946 .842 .719 .764 .790 .101
FROM
INVESTMENT
OPERATIONS
305.LESS
DISTRIBUTIONS
306. FROM (.238) (.487) (.477) (.481) (.536) (.666) (.682) (.689) (.674) (.650) (.641)
NET INTEREST
INCOME
307. FROM (.001) -- -- -- (.880) -- -- -- -- -- (.070)
NET REALIZED
GAIN
308. IN -- -- -- (.020) -- -- -- -- -- -- --
EXCESS OF
NET REALIZED
GAIN
309. TOTAL (.239) (.487) (.477) (.501) (1.416) (.666) (.682) (.689) (.674) (.650) (.711)
DISTRIBUTIONS
310.NET $ 10.330 $ 10.410 $ 10.360 $ 9.410 $ 10.460 $ 11.080 $ 10.800 $ 10.640 $ 10.610 $ 10.520 $ 10.380
ASSET VALUE,
END OF PERIOD
311.TOTAL 1.56% 5.36% 15.44% (5.43)% 8.01% 9.01% 8.15% 7.04% 7.50% 7.77% .97%
RETURNB,C
312.NET $ 7,468 $ 6,455 $ 11,085 $ 11,702 $ 15,076 $ 28,428 $ 100,294 $ 111,506 $ 121,418 $ 132,443 $ 162,857
ASSETS, END
OF PERIOD
(000
OMITTED)
313.RATIO OF .75%A,F .75%F .70%F .65%F .65%F .66%F .61% .62% .65% .63% .59%
EXPENSES TO
AVERAGE NET
ASSETS
314.RATIO OF .75%A .74%G .70% .65% .65% .66% .61% .62% .65% .63% .59%
EXPENSES TO
AVERAGE NET
ASSETS
AFTER
EXPENSE
REDUCTIONS
315.RATIO OF 4.64%A 4.68% 4.96% 4.75% 5.01% 6.05% 6.40% 6.53% 6.45% 6.20% 6.01%
NET INTEREST
INCOME TO
AVERAGE NET
ASSETS
316.PORTFOLI 21%A 35% 53% 53% 46% 36% 20% 32% 31% 24% 43%
O TURNOVER
</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 SIX MONTHS ENDED MAY 31, 1997 (UNAUDITED)
E EFFECTIVE DECEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION
93-2, "DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION
OF INCOME, CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY
INVESTMENT COMPANIES." AS A RESULT, NET INVESTMENT INCOME PER SHARE
MAY REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX
DIFFERENCES.
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.
SHORT-INTERMEDIATE MUNICIPAL INCOME - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
317. YEARS ENDED NOVEMBER 30
318.SELECTED PER-SHARE DATA AND RATIOS 1997G 1996 1995D
319.NET ASSET VALUE, BEGINNING OF PERIOD $ 10.210 $ 10.230 $ 10.070
320.INCOME FROM INVESTMENT OPERATIONS
321. NET INTEREST INCOME .209 .407 .178
322. NET REALIZED AND UNREALIZED GAIN (LOSS) (.070) .010 .160
323. TOTAL FROM INVESTMENT OPERATIONS .139 .417 .338
324.LESS DISTRIBUTIONS
325. FROM NET INTEREST INCOME (.209) (.407) (.178)
326. FROM NET REALIZED GAIN (.030) (.030) --
327. TOTAL DISTRIBUTIONS (.239) (.437) (.178)
328.NET ASSET VALUE, END OF PERIOD $ 10.110 $ 10.210 $ 10.230
329.TOTAL RETURNB,C 1.38% 4.19% 3.37%
330.NET ASSETS, END OF PERIOD (000 OMITTED) $ 457 $ 487 $ 134
331.RATIO OF EXPENSES TO AVERAGE NET ASSETS .75%A,E .75%E .75%A,E
332.RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE .75%A .74%F .75%A
REDUCTIONS
333.RATIO OF NET INTEREST INCOME TO AVERAGE NET ASSETS 4.15%A 4.03% 4.18%A
334.PORTFOLIO TURNOVER 35%A 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 3 0 , 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 SIX MONTHS ENDED MAY 31, 199 7 (UNAUDITED)
CALIFORNIA MUNICIPAL INCOME - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C>
335. YEAR ENDED
OCTOBER 31
336.SELECTED PER-SHARE DATA AND RATIOS 1997F 1996G
337.NET ASSET VALUE, BEGINNING OF PERIOD $ 9.910 $ 10.000
338.INCOME FROM INVESTMENT OPERATIONS
339. NET INTEREST INCOME .217 .307
340. NET REALIZED AND UNREALIZED GAIN (LOSS) (.100) (.090)
341. TOTAL FROM INVESTMENT OPERATIONS .117 .217
342.LESS DISTRIBUTIONS
343. FROM NET INTEREST INCOME (.217) (.307)
344.NET ASSET VALUE, END OF PERIOD $ 9.810 $ 9.910
345.TOTAL RETURNB,C 1.18% 2.27%
346.NET ASSETS, END OF PERIOD (000 OMITTED) $ 1,889 $ 1,841
347.RATIO OF EXPENSES TO AVERAGE NET ASSETS .75%A,D .75%A,D
348.RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE .74%A,E .72%A,E
REDUCTIONS
349.RATIO OF NET INTEREST INCOME TO AVERAGE NET ASSETS 4.48%A 4.51%A
350.PORTFOLIO TURNOVER 13%A 21%A
</TABLE>
A ANNUALIZED
B THE TOTAL RETURN S 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 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 FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
F SIX MONTHS ENDED APRIL 30, 1997 (UNAUDITED)
G FOR THE PERIOD FEBRUARY 20, 1996 (COMMENCEMENT OF OPERATIONS) TO
OCTOBER 31, 1996.
NEW YORK MUNICIPAL INCOME - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
351. YEARS ENDED OCTOBER 31
352.SELECTED PER-SHARE DATA AND RATIOS 1997G 1996 1995F
353.NET ASSET VALUE, BEGINNING OF PERIOD $ 10.470 $ 10.400 $ 10.000
354.INCOME FROM INVESTMENT OPERATIONS
355. NET INTEREST INCOME .239 .468 .095
356. NET REALIZED AND UNREALIZED GAIN (LOSS) (.040) .070 .400
357. TOTAL FROM INVESTMENT OPERATIONS .199 .538 .495
358.LESS DISTRIBUTIONS
359. FROM NET INTEREST INCOME (.239) (.468) (.095)
360. FROM NET REALIZED GAIN (.060) -- --
361. TOTAL DISTRIBUTIONS (.299) (.468) (.095)
362.NET ASSET VALUE, END OF PERIOD $ 10.370 $ 10.470 $ 10.400
363.TOTAL RETURNB,C 1.91% 5.28% 4.96%
364.NET ASSETS, END OF PERIOD (000 OMITTED) $ 732 $ 718 $ 683
365.RATIO OF EXPENSES TO AVERAGE NET ASSETS .75%A,D .75%D .75%A,D
366.RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER EXPENSE .74%A,E .68%E .75%A
REDUCTIONS
367.RATIO OF NET INTEREST INCOME TO AVERAGE NET ASSETS 4.53%A 4.53% 4.75%A
368.PORTFOLIO TURNOVER 18%A 17% 0%
</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 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 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 THE PERIOD AUGUST 21, 1995 (COMMENCEMENT OF OPERATIONS) TO
OCTOBER 31, 1995.
G SIX MONTHS ENDED APRIL 30, 1997 (UNAUDITED)
PERFORMANCE
Mutual fund performance is commonly measured as TOTAL RETURN and/or
YIELD.
For Growth Opportunities, Balanced, High Yield, Government Investment,
Short Fixed-Income, High Income Municipal, California Municipal
Income, and New York Municipal Income, the fiscal year runs from
November 1 to October 31. For TechnoQuant Growth, Mid Cap, Equity
Growth, 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 Opportunities, Strategic Income, and Municipal Bond, the
fiscal year runs from January 1 to December 31. For Mortgage
Securities, the fiscal year runs from August 1 to July 31. The tables
below show the performance of Institutional Class of each fund (except
Mortgage Securities) over past fiscal periods ended April 30, 1997,
May 31, 1997, or June 30, 1997, as indicated. The performance of
Institutional Class of Mortgage Securities over past fiscal years is
shown in the tables below. 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
AVERAGE ANNUAL TOTAL RETURN* CUMULATIVE TOTAL RETURN*
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
PAST 1 YEAR PAST 5 YEARS 10 YEARS/ PAST 6 MONTHS 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 N/A 0.00%
MID CAP[B] 10.38% N/A 18.53% 6.23% 10.38% N/A 24.28%
EQUITY
GROWTH[B] 15.48% 19.12% 19.27% 6.81% 15.48% 139.86% 482.76%
GROWTH
OPPORTUNITIES[A] 20.95% 17.63% 20.88% 10.86% 20.95% 125.23% 500.82%
STRATEGIC
OPPORTUNITIES[C] 14.89% 14.15% 12.23% 12.85% 14.89% 93.80% 217.10
LARGE CAP[B] 22.20% N/A 20.16% 6.64% 22.20% N/A 26.48%
GROWTH &
INCOME[B] N/A N/A N/A N/A N/A N/A 9.11%
EQUITY INCOME[B] 20.41% 18.47% 13.36% 9.47% 20.41% 133.37% 250.57%
BALANCED[A] 16.81% 9.70% 11.33% 9.67% 16.81% 58.84% 192.37%
TAXABLE INCOME FUNDS - INSTITUTIONAL CLASS
AVERAGE ANNUAL TOTAL RETURN* CUMULATIVE TOTAL RETURN*
PAST 1 YEAR PAST 5 YEARS 10 YEARS/ PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS 10 YEARS/
LIFE OF FUND+ LIFE OF FUND+
HIGH YIELD [A] 9.78% 11.90% 13.22% 3.51% 9.78% 75.47% 246.14 %
STRATEGIC
INCOME [C] 13.97% N/A 14.90% 4.54% 13.97% N/A 44.87 %
MORTGAGE
SECURITIES [D] 10.22% 7.65% 8.79% N/A 10.22% 44.56% 132.27 %
GOVERNMENT
INVESTMENT [A] 6.03% 6.49% 7.45% 1.16% 6.03% 36.95% 105.23 %
INTERMEDIATE
BOND [B] 6.89% 6.70% 8.11% 1.10% 6.89% 38.31% 118.19 %
SHORT FIXED-
INCOME [A] 5.82% 5.36% 7.01% 2.20% 5.82% 29.84% 92.06 %
MUNICIPAL FUNDS - INSTITUTIONAL CLASS
AVERAGE ANNUAL TOTAL RETURN* CUMULATIVE TOTAL RETURN*
PAST 1 YEAR PAST 5 YEARS 10 YEARS/ PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS 10 YEARS/
LIFE OF FUND+ LIFE OF FUND+
HIGH INCOME
MUNICIPAL [A] 6.46% 6.55% 8.92% 2.70% 6.46% 37.32% 127.72%
MUNICIPAL
BOND[C] 7.89% 6.47% 7.85% 2.88% 7.89% 36.83% 112.99%
INTERMEDIATE
MUNICIPAL 7.09% 5.76% 6.65% 1.56% 7.09% 32.33% 90.41%
INCOME [B]
SHORT-INTERMEDIATE
MUNICIPAL 4.72% N/A 4.67% 1.38% 4.72% N/A 15.80%
INCOME [B]
STATE MUNICIPAL FUNDS - INSTITUTIONAL CLASS
AVERAGE ANNUAL TOTAL RETURN* CUMULATIVE TOTAL RETURN
PAST 1 YEAR PAST 5 YEARS 10 YEARS/ PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS 10 YEARS/
LIFE OF FUND+ LIFE OF FUND+
CALIFORNIA
MUNICIPAL 6.50% N/A 2.91% 1.18% 6.50% N/A 3.48%
INCOME[A]
NEW YORK MUNICIPAL
INCOME [A] 6.29% N/A 7.25% 1.91% 6.29% N/A 12.61%
</TABLE>
[A] PERIOD ENDED APRIL 30, 1997.
[B] PERIOD ENDED MAY 31, 1997.
[C] PERIOD ENDED JUNE 30, 1997.
[D] PERIOD ENDED JULY 31, 1997.
+ LIFE OF FUND FIGURES ARE FROM COMMENCEMENT OF OPERATIONS (NOVEMBER
18, 1987 FOR GROWTH OPPORTUNITIES; OCTOBER 31, 1994 FOR STRATEGIC
INCOME; SEPTEMBER 16, 1987 FOR SHORT FIXED-INCOME AND HIGH INCOME
MUNICIPAL; MARCH 16, 1994 FOR SHORT-INTERMEDIATE MUNICIPAL INCOME;
AUGUST 21, 1995 FOR NEW YORK MUNICIPAL INCOME; FEBRUARY 20, 1996 FOR
MID CAP, LARGE CAP, AND CALIFORNIA MUNICIPAL INCOME; AND DECEMBER 31,
1996 FOR TECHNOQUANT GROWTH AND GROWTH & INCOME) THROUGH THE
SEMIANNUAL PERIODS ENDED 1997 (THROUGH THE ANNUAL PERIOD ENDED 1997
FOR MORTGAGE SECURITIES).
* INITIAL OFFERING OF INSTITUTIONAL CLASS OF GROWTH OPPORTUNITIES,
BALANCED, HIGH YIELD, STRATEGIC INCOME, GOVERNMENT INVESTMENT, SHORT
FIXED-INCOME, HIGH INCOME MUNICIPAL, 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
HIGH INCOME MUNICIPAL, 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 MUNICIPAL BOND TOOK
PLACE ON JULY 1, 1996. INSTITUTIONAL CLASS RETURNS PRIOR TO JULY 1,
1996 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 securities.
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.
SALOMON BROTHERS MORTGAGE 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 Fannie Mae
and FHLMC balloon mortgages with fixed-rate coupons.
SALOMON BROTHERS TREASURY/AGENCY INDEX is a market capitalization
weighted index of U.S. Treasury and U.S. government agency securities
with fixed-rate coupons and weighted average lives of at least one
year.
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.
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. Government.
The Institutional Class of each equity fund may quote its adjusted net
asset value including all distributions paid. This value may be
averaged over specified periods and may be used to calculate a class's
moving average.
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,
Equity Growth, Mid Cap, Large Cap, and Growth & Income are diversified
funds of Fidelity Advisor Series I, a Massachusetts business trust
organized on June 24, 1983. Growth Opportunities, 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. High Income
Municipal is a diversified fund and California Municipal Income and
New York Municipal Income are non-diversified funds 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. Strategic Opportunities is a diversified fund of
Fidelity Advisor Series VIII, a Massachusetts business trust organized
on September 22, 1983. Mortgage Securities is a diversified fund of
Fidelity Income Fund, a Massachusetts business trust organized on
August 7, 1984. Municipal Bond is a diversified fund of Fidelity
Municipal Trust, a Massachusetts business trust organized on June 22,
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, High Income Municipal, Municipal Bond, Intermediate
Municipal Income, Short-Intermediate Municipal Income, California
Municipal Income, and New York 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 September 30, 1997, FMR advised funds having approximately 33
million shareholder accounts with a total value of more than $521
billion.
John Avery is associate 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 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.
Bettina Doulton is Vice President and lead manager of Advisor
Balanced, which she has managed since March 1996. She also manages
other Fidelity funds. Since joining Fidelity in 1986, Ms. Doulton has
worked as a research assistant, analyst , and manager.
Andrew Dudley is manager of Advisor Short Fixed-Income, which he has
managed since February 1997. 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.
* George Fischer is Vice President and manager of Advisor
Municipal Bond and Advisor High Income Municipal, which he has managed
since October 1995 and April 1997, respectively. He also manages
several other Fidelity funds. Since joining Fidelity in 1989, Mr.
Fischer has worked as an analyst and manager.
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 Incom e, 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.
Previously, he was a quantitative analyst. Mr. Krochuk joined Fidelity
as a research associate in 1992, after receiving a bachelor of arts
degree in economics/pre-med from Harvard University.
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 New York Municipal
Income and Advisor Short-Intermediate Municipal Income, which he has
managed since August 1995 and October 1995, respectively. He also
manages several other Fidelity funds. Since joining Fidelity in
1986, Mr. Lind has worked as an analyst and manager.
David Murphy is Vice President and manager of Advisor Intermediate
Municipal Income, which he has managed since March 1995. He also
manages several other Fidelity funds. Mr. Murphy joined Fidelity as a
portfolio manager in 1989.
Jonathan Short is Vice President and manager of Advisor California
Municipal Income, which he has managed since inception. 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. 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 several 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 High
Income Municipal, Municipal Bond, Intermediate Municipal Income,
Short-Intermediate Municipal Income, California Municipal Income, and
New York 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, 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.
As of September 30, 1997, approximately 41.85 % and 29.83% of
each of California Municipal Income's and New York Municipal Income's
total outstanding shares , respectively, were held by an
FMR affiliate.
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 domestic and foreign investments
varies in response to many factors. Stock values fluctuate in response
to the activities of individual companies and general market and
economic conditions. Bond values fluctuate based on changes in
interest rates, market conditions, other economic and political news,
and on their quality and maturity. In general, bond prices rise when
interest rates fall, and fall when interest rates rise. This effect is
more pronounced for longer-term securities. Lower-quality securities
offer higher yields, but also carry more risk.
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 many 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.
The total return from a bond includes both income and price gains or
losses. In selecting investments for a bond fund, FMR considers a
bond's expected income together with its potential for price gains or
losses. While income is generally the most important component of bond
returns over time, a bond fund's emphasis on income does not mean the
fund invests only in the highest-yielding bonds available, or that it
can avoid losses of principal.
FMR generally focuses on assembling a portfolio of bonds that it
believes will provide the best balance between risk and return within
the range of eligible investments for the fund. FMR's evaluation of a
potential investment includes an analysis of the credit quality of the
issuer, its structural features, its current price compared to FMR's
estimate of its long-term value, and any short-term trading
opportunities resulting from market inefficiencies.
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, 1996, the S&P MidCap 400 included companies with
capitalizations of between $192 million and $6.5 billion.
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.
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. 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. As of October 31, 1996, the fund's dollar-weighted average
maturity was approximately 8.5 years.
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 of November 30, 1996, the fund's
dollar-weighted average maturity was approximately 5.7 years.
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.
Although the fund can invest in securities of any maturity, the fund
maintains a dollar-weighted average maturity of three years or less
under normal conditions. 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 of October
31, 1996, the fund's dollar-weighted average maturity was
approximately 2.2 years.
HIGH INCOME MUNICIPAL FUND seeks high current income that is free from
federal income tax by investing primarily in investment-grade
municipal securities. The fund may also invest up to 35% of its assets
in below investment-grade securities. FMR normally invests so that at
least 80% of the fund's assets 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.
MUNICIPAL BOND FUND seeks a high level of 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 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
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 December 31, 1996, the fund's dollar-weighted average
maturity was approximately 12.4 years.
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 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, the fund
maintains a dollar-weighted average maturity of between three and 10
years under normal conditions. FMR seeks to manage the fund so that it
generally reacts to changes in interest rates similarly to municipal
bonds with maturities between seven and 10 years. As of November 30,
1996, the fund's dollar-weighted average maturity was approximately
8.6 years.
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 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, the fund
maintains a dollar-weighted average maturity of between two and five
years under normal conditions. As of November 30, 1996, the fund's
dollar-weighted average maturity was approximately 3.4 years.
CALIFORNIA MUNICIPAL INCOME FUND seeks high current income that is
free from federal income tax and California state personal income tax
by investing in investment-grade municipal securities under normal
conditions. FMR normally invests so that at least 80% of the fund's
assets is invested in securities whose interest is free from federal
and California income taxes. 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 14.4 years.
The performance of California Municipal Income is affected by the
economic and political conditions within the state of California.
California suffered a severe economic recession between 1990-1993,
which resulted in broad-based revenue shortfalls for the State and
many local governments. California's fiscal condition has improved as
its economy has been in a sustained recovery since 1994. During the
recession, the State substantially reduced local assistance, and
further reductions could adversely affect the financial condition of
cities, counties and other government agencies facing constraints in
their own revenue collections. California's long-term credit rating
stabilized after having been reduced in the past several years.
California voters in the past have passed amendments to the California
Constitution and other measures that limit the taxing and spending
authority of California governmental entities, and future voter
initiatives could result in adverse consequences affecting California
municipal bonds.
NEW YORK MUNICIPAL INCOME FUND seeks high current income that is free
from federal income tax and New York State and City personal income
taxes by investing in investment-grade municipal securities under
normal conditions. FMR normally invests so that at least 80% of the
fund's assets is invested in securities whose interest is free from
federal and New York State and City personal income taxes. 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 13.3 years.
The performance of New York Municipal Income is affected by the
economic and political conditions within the state of New York. Both
New York City and State have recently experienced significant
financial difficulty, and both the City's and the State's credit
ratings are among the lowest in the country.
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 High Income Municipal, Municipal Bond, Intermediate Municipal
Income, and Short-Intermediate Municipal Income do not expect to
invest in federally taxable obligations. California Municipal Income
and New York Municipal Income do not expect to invest in federally or
state taxable obligations. Each of High Income Municipal, Municipal
Bond, Intermediate Municipal Income, Short-Intermediate Municipal
Income, California Municipal Income, and New York 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, High Income Municipal,
Municipal Bond, 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 year ended 1996, 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.
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 Mortgage Securities, Short Fixed-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.
Intermediate Bond invests only in investment-grade securities, and
will limit its investments in medium quality securities to 5% of its
assets. A security is considered to be investment-grade or medium
quality if it is rated investment-grade or medium quality,
respectively, by Moody's, S&P, Duff & Phelps, or Fitch, or is unrated
but judged by FMR to be of equivalent quality.
High Income Municipal currently intends to limit its investment in
below investment-grade securities to less than 35% of its assets and
does not currently intend to invest more than 10% of its total assets
in bonds that are in default. A security is considered to be
investment-grade if it is rated investment-grade by Moody's, S&P, Duff
& Phelps, or Fitch, or is unrated but judged by FMR to be of
equivalent quality.
Municipal Bond invests only in investment-grade securities. A security
is considered to be investment-grade if it is judged by FMR to be of
equivalent quality to securities rated Baa or BBB or higher by Moody's
or S&P, respectively. However, the fund will limit its investments in
medium quality securities as judged by FMR to one-third of its total
assets; will not purchase securities rated below Baa or BBB by Moody's
or S&P, respectively; and will not invest more than 20% of its total
assets in securities not rated by Moody's and S&P.
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 the fund's share price.
STATE MUNICIPAL SECURITIES include municipal obligations issued by the
state of California or New York or their respective counties,
municipalities, authorities, or other subdivisions. The ability of
issuers to repay their debt can be affected by many factors that
impact the economic vitality of either the state or a region within
the state.
FISCAL YEAR ENDED 1996 DEBT HOLDINGS (AS A % OF INVESTMENTS), BY
RATING
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<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Mid Equity Growth Strat Large Equity Balan High Strategic High Income
S&P RATING Cap** Growth** Opport egic
unities* Opport
unities
*** Cap** Income** ced* Yield* Income*** Municipal*
(Average of total investments)
INVESTMENT GRADE
Highest
quality AAA
High
quality AA -- -- 15.44% 6.43% 2.80% 31.90% -- 40.55% 27.16%
Upper-medium
grade A
Medium
grade BBB -- -- -- -- -- -- 3.26% 0.30% 0.57% 22.24%
LOWER QUALITY
Moderately
speculative BB -- -- -- -- -- 0.45% 0.56% 11.90% 8.33% 9.89%
Speculative B 0.06% -- -- -- -- 0.06% 1.96% 47.80% 27.31% 0.53%
Highly
speculative CCC -- -- -- -- -- 0.25% 5.40% 2.20% --
Poor quality CC -- -- -- -- -- -- -- -- -- --
Lowest
quality,
no interest C
In default,
in arrears D -- -- -- -- -- -- -- 0.10% -- 0.38%
Mid Equity Growth Strat Large Equity Balan High Strategic High Income
Moody's RATING Cap Growth Opport egic
unities Opport
unities
Cap Income ced Yield Income Municipal
(Average of total investments)
INVESTMENT GRADE
Highest
quality Aaa
High quality Aa -- -- 15.44% 6.43% -- 2.80% 33.87% -- 39.06% 26.58%
Upper-medium
grade A
Medium
grade Baa -- -- -- -- -- 0.02% 2.29% 0.10% 0.18% 22.72%
LOWER QUALITY
Moderately
speculative Ba -- -- -- -- -- 0.25% 0.94% 8.60% 7.21% 9.19%
Speculative B -- -- -- 0.21% -- 0.26% 2.29% 48.90% 21.31% 0.18%
Highly
speculative Caa -- -- -- -- -- -- 0.12% 9.70% 3.23% 0.60%
Poor quality Ca -- -- -- -- -- -- -- 0.03% 0.02% --
Lowest
quality,
no interest C -- -- -- -- -- -- -- -- -- --
In default,
in
arrear -- -- -- -- -- -- -- -- -- -- --
</TABLE>
* FISCAL Y EAR ENDED OCTOBER 31, 1996 .
** FISCAL Y EAR ENDED NOVEMBER 30, 1996 .
*** FISCAL YEAR ENDED DECEMBER 31, 1996 .
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
0.76% OF BALANCED'S INVESTMENTS, 1.02% OF STRATEGIC OPPORTUNITIES'
INVESTMENTS, 7.68% OF HIGH YIELD'S INVESTMENTS, 8.98% OF STRATEGIC
INCOME'S INVESTMENTS, AND 27.02% OF HIGH
INCOME MUNICIPAL'S 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 0.76% OF BALANCED'S
INVESTMENTS, 1.02% OF STRATEGIC OPPORTUNITIES' INVESTMENTS, 7.68% OF
HIGH YIELD'S INVESTMENTS, 8.97% OF STRATEGIC
INCOME'S INVESTMENTS, AND 24.84% FOR HIGH INCOME MUNICIPAL'S
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.
Other state municipal securities include obligations of U.S.
territories and possessions such as Guam, the Virgin Islands, Puerto
Rico, and their political subdivisions and public corporations. The
economy of Puerto Rico is closely linked to the U.S. economy and will
be affected by the strength of the U.S. dollar, interest rates, the
price stability of oil imports, and the continued existence of
favorable tax incentives.
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 or economic conditions in foreign
countries, fluctuations in foreign currencies, withholding or other
taxes, operational risks, increased regulatory burdens, 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 developing countries, more volatile 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, 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: California Municipal Income and New York Municipal
Income do not currently intend to invest in a money market fund. High
Income Municipal, Municipal Bond, Intermediate Municipal Income, and
Short-Intermediate Municipal Income, California Municipal Income,
and New York 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, High Income Municipal,
Municipal Bond, 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, Short-Intermediate Municipal Income, California
Municipal Income, and New York 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 High Income Municipal, Municipal Bond, Intermediate Municipal
Income, Short-Intermediate Municipal Income, California Municipal
Income, and New York 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, High Income
Municipal, Municipal Bond, Intermediate Municipal Income,
Short-Intermediate Municipal Income, California Municipal Income, and
New York 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.
HIGH INCOME MUNICIPAL 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.
MUNICIPAL BOND FUND seeks to provide as high a level of interest
income exempt from federal income tax as is consistent with
preservation of capital.
The fund invests in a diversified portfolio of municipal bonds. The
fund will invest primarily in municipal bonds judged by FMR to be of
high-grade or upper-medium-grade quality, although it may invest up to
one-third of its total assets in bonds judged to be of medium-grade
quality if they are suitable for achieving its investment objective.
The fund's standards for high-grade, upper-medium-grade, and
medium-grade obligations are essentially the same as Moody's and S&P's
four highest categories of Baa or BBB and above. The fund will not
invest in any bond rated lower than Baa by Moody's or BBB by S&P, but
may invest up to 20% of its total assets in bonds not rated by either
of these rating services if FMR judges them to meet the fund's quality
standards. The fund will normally invest at least 80% of its assets in
municipal securities whose interest is exempt 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.
CALIFORNIA MUNICIPAL INCOME FUND seeks a high level of current income
free from federal income tax and California state personal income tax
by investing primarily in municipal securities. The fund normally
invests at least 80% of its assets in securities whose interest is
free from federal and California income taxes.
NEW YORK MUNICIPAL INCOME FUND seeks a high level of current income
free from federal income tax and New York State and City personal
income taxes by investing primarily in municipal securities. The fund
normally invests at least 80% of its assets in securities whose
interest is free from federal and New York State and City personal
income taxes.
With respect to 75% of its total assets, each of the Equity Funds,
High Yield, Mortgage Securities, Government Investment, Intermediate
Bond, Short Fixed-Income, High Income Municipal, Municipal Bond, 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 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, High Income Municipal, Municipal Bond,
Intermediate Municipal Income, Short-Intermediate Municipal Income,
California Municipal Income, and New York Municipal Income, the fee is
calculated by adding a group fee rate to an individual fund fee rate,
and multiplying the result by the fund's average net assets. For
Growth Opportunities and Strategic Opportunities, the fee is
calculated by taking 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 rate (calculated monthly) is calculated by adding a
group fee rate to an individual fund fee rate, and multiplying the
result by the fund's average net assets.
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, High
Income Municipal, Municipal Bond, Intermediate Municipal Income,
Short-Intermediate Municipal Income, California Municipal Income, and
New York Municipal Income, and it drops as total assets under
management increase.
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 following table states the management fee rate for each fund for
its most recent fiscal year end:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
GROUP INDIVIDUAL TOTAL MANAGEMENT
FEE RATE FUND FEE FEE RATE
RATE
TECHNOQUANT GROWTH [A] 0.30% 0.30% 0.60%
MID CAP 0.30% 0.30% 0.60%
EQUITY GROWTH 0.30% 0.30% 0.61%
GROWTH OPPORTUNITIES [ B ] 0.30% 0.30% 0.61%
STRATEGIC OPPORTUNITIES [ B ] 0.30% 0.30% 0.48%
LARGE CAP 0.30% 0.30% 0.60%
GROWTH & INCOME [A] 0.30% 0.20% 0.50%
EQUITY INCOME N/A N/A 0.50%
BALANCED 0.30% 0.15%[ C ] 0.50%
HIGH YIELD 0.14% 0.45% 0.60%
STRATEGIC INCOME 0.14% 0.45% 0.59%
MORTGAGE SECURITIES 0.1 4 % 0.30% 0.4 4 %
GOVERNMENT INVESTMENT 0.14% 0.30% 0.45%
</TABLE>
INTERMEDIATE BOND 0.14% 0.30% 0.45%
SHORT FIXED-INCOME 0.14% 0.30% 0.45%
HIGH INCOME MUNICIPAL FUND 0.14% 0.25% 0.40%
MUNICIPAL BOND FUND 0.14% 0.25% 0.40%
INTERMEDIATE MUNICIPAL INCOME 0.14% 0.25% 0.40%
SHORT-INTERMEDIATE MUNICIPAL INCOME 0.14% 0.25% 0.40%
CALIFORNIA MUNICIPAL INCOME[A] 0.14% 0.25% 0.40%
NEW YORK MUNICIPAL INCOME 0.14% 0.25% 0.40%
[A] ESTIMATED
[ B ] THE BASIC FEE RATE FOR THE FISCAL YEAR ENDED 1996 WAS 0.61%
FOR GROWTH OPPORTUNITIES AND 0.61% FOR STRATEGIC OPPORTUNITIES.
[ C ] EFFECTIVE AUGUST 1, 1996, FMR VOLUNTARILY AGREED TO REDUCE
THE FUND'S INDIVIDUAL FUND FEE RATE FROM 0.20% TO 0.15%. IF THIS
REDUCTION WAS NOT IN EFFECT, THE TOTAL FEE WOULD HAVE BEEN
0.5 0 %.
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 year ended 1996, 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.
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 year ended 1997, transfer agency fees (as a percentage
of average net assets) for Institutional Class of Mortgage Securities
amounted to 0.21 %. Pricing and bookkeeping fees (as a
percentage of average net assets) for Mortgage Securities amounted to
0.04 %. These amounts are before expense reductions, if any.
For the fiscal year ended 1996, transfer agency and pricing and
bookkeeping fees (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
MID CAP 0.16% 0.05%
EQUITY GROWTH 0.14% 0.02%
GROWTH OPPORTUNITIES 0.14% 0.01%
STRATEGIC OPPORTUNITIES 0.16% 0.05%
LARGE CAP 0.16% 0.22%
EQUITY INCOME 0.14% 0.04%
BALANCED 0.15% 0.02%
HIGH YIELD 0.16% 0.04%
STRATEGIC INCOME 0.17% 0.06%
GOVERNMENT INVESTMENT 0.16% 0.04%
INTERMEDIATE BOND 0.14% 0.04%
SHORT FIXED-INCOME 0.15% 0.04%
UMB is the transfer and service agent for High Income Municipal,
Municipal Bond, Intermediate Municipal Income, Short-Intermediate
Municipal Income, California Municipal Income , and New York
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 1996, 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
HIGH INCOME MUNICIPAL 0.20% 0.04%
MUNICIPAL BOND 0.31% 0.03%
INTERMEDIATE MUNICIPAL INCOME 0.17% 0.08%
SHORT-INTERMEDIATE MUNICIPAL INCOME 0.33% 0.20%
CALIFORNIA MUNICIPAL INCOME 0.13% 0.18%
NEW YORK MUNICIPAL INCOME 0.10% 0.10%
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.
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 portfolio turnover rate for TechnoQuant Growth is projected to
exceed 200% for its first fiscal period ending November 30, 1997. The
portfolio turnover rate for Growth & Income is not expected to exceed
200% for its first fiscal period ending November 30, 1997. These rates
will vary from year to year.
The portfolio turnover rate for the fiscal year ended 1997 was
149 % for Mortgage Securities.
The portfolio turnover rate for the fiscal year ended 1996 was 101%
for Mid Cap, 76% for Equity Growth, 33% for Growth Opportunities, 151%
for Strategic Opportunities, 59% for Large Cap, 78% for Equity Income,
223% for Balanced, 121% for High Yield, 119% for Strategic Income,
153% for Government Investment, 200% for Intermediate Bond, 124% for
Short Fixed-Income, 49% for High Income Municipal, 35% for Municipal
Bond, 35% for Intermediate Municipal Income, 62% for
Short-Intermediate Municipal Income, 21% for California Municipal
Income, and 17% for New York Municipal Income.
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 (THE FOLLOWING OPTIONS ARE AVAILABLE ONLY FOR TAXABLE
FUNDS)
TO SHELTER YOUR RETIREMENT SAVINGS FROM TAXES
Retirement plans allow individuals to shelter investment income and
capital gains from current taxes. In addition, contributions to these
accounts may be tax deductible. Retirement accounts require special
applications and typically have lower minimums.
(solid bullet) INDIVIDUAL RETIREMENT ACCOUNTS (IRAS) allow anyone of
legal age and under 70 1/2 (checkmark)(solid club) with earned income
to invest up to $2,000 per tax year. Individuals can also invest in a
spouse's IRA if the spouse has earned income of less than $250.
(solid bullet) ROLLOVER IRAS retain special tax advantages for certain
distributions from employer-sponsored retirement plans.
(solid bullet) 401(K) PLANS allow employees of corporations 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.
(solid bullet) MONEY PURCHASE/PROFIT SHARING PLANS (KEOGH PLANS) are
tax-deferred pension accounts designated for employees of
unincorporated businesses or for persons who are self-employed.
(solid bullet) SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS) provide
small business owners or those with self-employed income (and their
eligible employees) with many of the same advantages as a Keogh, but
with fewer administrative requirements.
(solid bullet) SIMPLE IRAS provide small business owners and those
with self-employed income (and their eligible employees) with many of
the advantages of a 401(k) plan, but with fewer administrative
requirements.
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 s hares will be purchased at the next NAV calculated
after your order is received and accepted. 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 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 invest ment professional.
If you are investing through a tax-sheltered 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 Fidelity Advisor IRA, Rollover IRA, SEP-IRA and Keogh accounts
$500
Through regular investment plans* $1,000
TO ADD TO AN ACCOUNT $250
For Fidelity Advisor IRA, Rollover IRA, SEP-IRA and Keogh accounts
$100
Through regular investment plans* $100
MINIMUM BALANCE $1,000
For Fidelity Advisor IRA, Rollover IRA, SEP-IRA and Keogh accounts
None
*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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TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT
PHONE (small solid bullet) Exchange from the same
class of another Fidelity Advisor fund or (small solid bullet) Exchange from the same class of another
Fidelity Advisor fund or
1-800-843-3001
OR YOUR from another Fidelity fund account with the
same registration, from another Fidelity fund account with the same registration,
INVESTMENT
PROFESSIONAL including name, address, and taxpayer ID
number. including name, address, and taxpayer ID number.
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<TABLE>
<CAPTION>
<S> <C> <C>
Mail
(mail_graphic) (small solid bullet) Complete and sign the
account application. Make your check (small solid bullet) Make your check payable to the complete name
of the fund of your
payable to the complete name of the fund
of your choice and note choice and note the applicable class. Indicate your fund account
the applicable class. Mail to the address
indicated on the number on your check and mail to the address printed on your
application. 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
application and check to your investment (small solid bullet) Bring your check to your investment
professional.
professional.
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Wire
(wire_graphic) (small solid bullet) Call 1-800-843-3001
to set up your account and to arrange a
wire (small solid bullet) Not available for retirement accounts.
transaction. Not available for retirement
accounts. (small solid bullet) Wire to:
(small solid bullet) Wire to: Banker's Trust Co.
Banker's Trust Co. Routing # 021001033
Routing # 021001033 Fidelity DART Depository
Fidelity DART Depository Account # 00159759
Account #00159759 FBO: (account name)
FBO: (account name) (account number)
(account number)
Specify the complete name of the fund of your choice, note the
Specify the complete name of the fund of
your choice, note the applicable class and include your account number and your name.
applicable class and include your new
account number and your
name.
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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.
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HOW TO SELL SHARES
You can arrange to take money out of your fund account at any time by
selling (redeeming) some or all of your shares.
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 and accepted. Instistutional 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
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PHONE All account types except retirement (small solid bullet) Maximum check request: $100,000.
1-800-843-3001
OR YOUR All account types (small solid bullet) You may exchange to the same class of other Fidelity
Advisor funds
INVESTMENT
PROFESSIONAL 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, Sole
Proprietorship, UGMA, UTMA (small solid bullet) The letter of instruction must be signed by all
persons required to
sign for transactions, exactly as their names appear on the account.
Retirement 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 Organization (small solid bullet) At least one person authorized by corporate
resolution to act on
the account must sign the letter.
Executor, Administrator,
Conservator/Guardian (small solid bullet) Call 1-800-843-3001 or your investment
professional for
instructions.
Wire
(wire_graphic) All account types except retirement (small solid bullet) You must sign up for 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
and accepted 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
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MINIMUM MINIMUM FREQUENCY SETTING UP OR CHANGING
INITIAL ADDITIONAL
$1,000 $100 Monthly, bimonthly,
quarterly, (small solid bullet) For a new account, complete the appropriate section on the
application.
or semi-annually (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,
and Large Cap are distributed in December and January ;
dividends for Growth Opportunities are distributed in December;
dividends for Strategic Opportunities are distributed in December and
February; dividends for Strategic Income, High Yield, Mortgage
Securities, Government Investment, Intermediate Bond, Short
Fixed-Income, High Income Municipal, Municipal Bond, Intermediate
Municipal Income, Short-Intermediate Municipal Income, California
Municipal Income, and New York 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.
For retirement accounts, all distributions are automatically
reinvested. When you are over 59 years old, you can receive
distributions in cash.
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 be gin
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-deferred 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 (except California
Municipal Income and New York Municipal Income) 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 gain s 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.
To the extent that California Municipal Income's income dividends are
derived from interest on California state tax-free investments, they
will be free from California state personal income tax. Distributions
derived from obligations that are not California state tax-free
obligations, as well as distributions from short or long-term capital
gains, are subject to California State personal income tax. Corporate
taxpayers should note that the fund's income dividends and other
distributions are not exempt from California state franchise or
corporate income taxes. Interest on indebtedness incurred to
purchase, or continued to carry, shares of California Municipal Income
generally will not be deductible for California State income tax
purposes.
To the extent that New York Municipal Income's income dividends are
derived from state-tax free investments, they will be free from New
York State and City personal income taxes. Corporate taxpayers
should note that New York Municipal Income's income dividends and
other distributions are not exempt from New York State and City
franchise or corporate income taxes. In addition, interest or
indebtedness incurred to purchase, or continued to carry, shares of
New York Municipal Income generally will not be deductible for New
York State personal income tax purposes.
During the fiscal year ended 1996, 100% of the income dividends from
High Income Municipal, Municipal Bond, Intermediate Municipal Income,
Short-Intermediate Municipal Income, California Municipal
Income , and New York Municipal Income was free from federal
income tax. During the fiscal year ended 1996, 100% of California
Municipal Income's income dividends was free from California taxes,
and 100% of New York Municipal Income's income dividends was free from
New York taxes. During the fiscal year ended 1996, 26.36% of High
Income Municipal's, 0.79% of Municipal Bond's, 7.58% of Intermediate
Municipal Income's, 18.99% of Short-Intermediate Municipal Income's,
5.5% of California Municipal Income's, and 0.09% of New York Municipal
Income 's income 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. Fidelity may only be
liable for losses resulting from unauthorized transactions if it does
not follow reasonable procedures designed to verify the identity of
the caller. Fidelity will request personalized security codes or other
information, and may also record calls. You should verify the accuracy
of the confirmation statements immediately after receipt. If you do
not want the ability to redeem and exchange by telephone, call
Fidelity for instructions. Additional documentation may be required
from corporations, associations, and certain fiduciaries.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during
periods of unusual market activity), consider placing your order by
mail.
EACH FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a
period of time. Each fund also reserves the right to reject any
specific purchase order, including certain purchases by exchange. See
"Exchange Restrictions" on page . Purchase orders may be
refused if, in FMR's opinion, they would disrupt management of a fund.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your shares will be purchased
at the next NAV calculated after your order is received and accepted.
Note the following:
(small solid bullet) All of your purchases must be made in U.S.
dollars and checks must be drawn on U.S. banks.
(small solid bullet) Fidelity does not accept cash.
(small solid bullet) When making a purchase with more than one check,
each check must have a value of at least $50.
(small solid bullet) 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 and accepted.
Note the following:
(small solid bullet) Normally, redemption proceeds will be mailed to
you on the next business day, but if making immediate payment could
adversely affect 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
fees of up to 1.00% on purchases, administrative fees of up to $7.50,
and t r ading fees of up to 1.50% on exchanges. Check each
fund's prospectus for details.
No dealer, sales representative, or any other person has been
authorized to give any information or to make any representations,
other than those contained in this Prospectus and in the related SAI,
in connection with the offer contained in this Prospectus. If given or
made, such other information or representations must not be relied
upon as having been authorized by the 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
E Q UITY GROWTH - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns+ 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
EQUITY GROWTH -
INSTITUTIONAL CLASS -0.57% 15.57% 44.84% 6.93% 64.71% 10.14% 15.71% -0.04% 40.12% 16.89%
Lipper Growth Funds AverageA 3.08% 14.79% 26.91% -4.49% 36.70% 8.08% 10.63% -2.17% 30.79% 19.24%
S&P 500 5.10% 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96%
Consumer Price Index 4.43% 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
</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
(LARGE SOLID BOX) EQUITY GROWTH - INSTITUTIONAL
CLASS
G R OWTH OPPORTUNITIES - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns+ 1988 1989 1990 1991 1992 1993 1994 1995 1996
GROWTH OPPORTUNITIES - 33.28% 24.14% -1.65% 42.68% 15.03% 22.17% 2.86% 33.58% 18.30%
INSTITUTIONAL CLASS
Lipper Growth Funds AverageA 14.79% 26.91% -4.49% 36.70% 8.08% 10.63% -2.17% 30.79% 19.24%
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>
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
(LARGE SOLID BOX) GROWTH OPPORTUNITIES -
INSTITUTIONAL CLASS
ST R ATEGIC OPPORTUNITIES - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns+ 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
STRATEGIC OPPORTUNITIES - -5.72% 22.71% 32.98% -6.59% 23.69% 13.47% 21.07% -6.35% 37.42% 1.99%
INSTITUTIONAL CLASS
Lipper Capital Appreciation
FundsB -0.03% 14.09% 26.60% -8.24% 39.91% 8.78% 15.68% -3.38% 30.34% 16.31%
S&P 500 5.10% 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96%
Consumer Price Index 4.43% 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
</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: 37.42
ROW: 10, COL: 1, VALUE: 1.99
(LARGE SOLID BOX) STRATEGIC OPPORTUNITIES -
INSTITUTIONAL CLASS
EQU I TY INCOME - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns+ 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
EQUITY INCOME -
INSTITUTIONAL CLASS -2.24% 23.23% 18.43% -14.28% 29.81% 14.94% 18.80% 7.50% 33.49% 15.26%
Lipper Equity Income Funds
AverageC -2.18% 16.74% 22.18% -6.78% 26.86% 9.77% 13.66% -2.54% 30.17% 18.85%
S&P 500 5.10% 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96%
Consumer Price Index 4.43% 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
</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
(LARGE SOLID BOX) EQUITY INCOME -
INSTITUTIONAL CLASS
BA L ANCED - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns+ 1988 1989 1990 1991 1992 1993 1994 1995 1996
BALANCED - INSTITUTIONAL CLASS 20.89% 24.60% -2.94% 34.48% 9.20% 19.66% -5.09% 15.00% 8.68%
Lipper Balanced Funds AverageD 12.34% 19.57% -0.57% 26.69% 7.07% 10.91% -2.50% 25.16% 13.76%
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>
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
(LARGE SOLID BOX) BALANCED - INSTITUTIONAL CLASS
HIGH YIELD - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns+ 1988 1989 1990 1991 1992 1993 1994 1995 1996
HIGH YIELD - INSTITUTIONAL CLASS 17.24% 3.64% 7.30% 34.94% 23.09% 20.45% -1.49% 18.69% 13.24%
Lipper High Current Yield Funds AverageE 12.89% -0.58% -10.13% 36.91% 17.51% 18.95% -3.85% 16.43% 13.67%
Merrill Lynch High Yield Master Index 13.47% 4.23% -4.35% 34.58% 18.16% 17.18% -1.17% 19.91% 11.06%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
</TABLE>
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
(LARGE SOLID BOX) HIGH YIELD - INSTITUTIONAL CLASS
STRATEGIC INCOME - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns+ 1995 1996
STRATEGIC INCOME - INSTITUTIONAL CLASS 22.41% 13.04%
Lipper Multi-Sector Income Funds AverageF 16.92% 11.74%
Merrill Lynch High Yield Master Index 19.91% 11.06%
Consumer Price Index 2.54% 3.32%
</TABLE>
MOR T GAGE SECURITIES - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns+ 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
MORTGAGE SECURITIES -
INSTITUTIONAL CLASS 2.70% 6.72% 13.64% 10.36% 13.61% 5.45% 6.71% 1.94% 17.02% 5. 4 3%
Lipper U.S. Mortgage Funds
AverageG 2.53% 7.47% 12.71% 9.52% 15.00% 6.38% 7.58% -4.83% 16.29% 3.07%
Salomon Brothers Mortgage Index 4.06% 8.81% 15.16% 10.90% 15.64% 7.37% 7.04% -1.43% 16.77% 5. 3 7%
Consumer Price Index 4.43% 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
</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
(LARGE SOLID BOX) MORTGAGE SECURITIES -
INSTITUTIONAL CLASS
GO V ERNMENT INVESTMENT - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns+ 1988 1989 1990 1991 1992 1993 1994 1995 1996
GOVERNMENT INVESTMENT - INSTITUTIONAL CLASS 6.57% 11.75% 8.37% 13.45% 6.48% 9.36% -3.85% 17.70% 2.33%
Lipper General U.S. Government Funds 6.67% 12.46% 8.22% 14.44% 6.41% 9.42% -4.64% 17.34% 1.72%
AverageH
Salomon Brothers Treasury/Agency Index 7.10% 14.24% 8.78% 15.33% 7.24% 10.74% -3.40% 18.39% 2.76%
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
</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: 17.7
ROW: 10, COL: 1, VALUE: 2.33
(LARGE SOLID BOX) GOVERNMENT INVESTMENT -
INSTITUTIONAL CLASS
I NTERMEDIATE BOND - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns+ 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
INTERMEDIATE BOND - INSTITUTIONAL
CLASS 2.32% 7.84% 12.11% 7.91% 15.16% 7.32% 12.08% -2.06% 12.50% 3.70%
Lipper Intermediate Investment Grade 2.13% 7.06% 11.67% 7.22% 15.63% 6.88% 9.52% -3.25% 16.62% 3.12%
Debt Funds AverageI
Lehman Brothers Intermediate 3.66% 6.67% 12.77% 9.16% 14.62% 7.17% 8.79% -1.93% 15.33% 4.05%
Government/Corporate Bond Index
Consumer Price Index 4.43% 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
</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
(LARGE SOLID BOX) INTERMEDIATE BOND -
INSTITUTIONAL CLASS
S HORT FIXED-INCOME - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns+ 1988 1989 1990 1991 1992 1993 1994 1995 1996
SHORT FIXED-INCOME - INSTITUTIONAL
CLASS 6.19% 10.31% 5.87% 13.37% 7.61% 9.49% -3.37% 9.90% 4.69%
Lipper Short Investment Grade Bond 6.86% 10.22% 7.87% 12.88% 5.97% 6.45% -0.44% 10.84% 4.64%
Funds AverageJ
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>
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
(LARGE SOLID BOX) SHORT FIXED-INCOME -
INSTITUTIONAL CLASS
H I GH INCOME MUNICIPAL - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns+ 1988 1989 1990 1991 1992 1993 1994 1995 1996
HIGH INCOME MUNICIPAL - 11.80% 13.09% 10.29% 12.18% 11.11% 13.79% -8.05% 16.84% 3.09%
INSTITUTIONAL CLASS
Lipper High Yield Municipal Bond 11.28% 10.11% 5.13% 11.52% 8.51% 11.41% -4.67% 15.98% 4.17%
Funds AverageK
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
</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
(LARGE SOLID BOX) HIGH INCOME MUNICIPAL -
INSTITUTIONAL CLASS
M U NICIPAL BOND- INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns+ 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
MUNICIPAL BOND - INSTITUTIONAL CLASS -1.56% 12.30% 9.56% 6.91% 11.91% 8.93% 13.17% -8.49% 18.15% 4.02%
Lipper General Municipal Debt Funds 0.94 11.53% 9.65% 6.05% 12.09% 8.79% 12.47% -6.50% 16.84% 3.30%
AverageL
Consumer Price Index 4.43% 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
</TABLE>
PERCENTAGE (%)
ROW: 1, COL: 1, VALUE: -1.56
ROW: 2, COL: 1, VALUE: 12.3
ROW: 3, COL: 1, VALUE: 9.560000000000001
ROW: 4, COL: 1, VALUE: 6.91
ROW: 5, COL: 1, VALUE: 11.91
ROW: 6, COL: 1, VALUE: 8.93
ROW: 7, COL: 1, VALUE: 13.17
ROW: 8, COL: 1, VALUE: -8.49
ROW: 9, COL: 1, VALUE: 18.15
ROW: 10, COL: 1, VALUE: -4.02
(LARGE SOLID BOX) MUNICIPAL BOND- INSTITUTIONAL
CLASS
I NTERMEDIATE MUNICIPAL INCOME - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns+ 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
INTERMEDIATE MUNICIPAL INCOME - 2.33% 7.38% 7.79% 6.37% 9.64% 7.28% 9.94% -5.43% 14.37% 4.15%
INSTITUTIONAL CLASS
Lipper Intermediate Municipal Debt 1.32% 7.57% 8.26% 6.59% 10.52% 7.80% 10.18% -3.51% 12.89% 3.70%
Funds AverageM
Consumer Price Index 4.43% 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32%
</TABLE>
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
(LARGE SOLID BOX) INTERMEDIATE MUNICIPAL
INCOME - INSTITUTIONAL CLASS
S HORT-INTERMEDIATE MUNICIPAL INCOME - INSTITUTIONAL
CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns+ 1995 1996
SHORT-INTERMEDIATE MUNICIPAL INCOME - 8.75% 3.67%
INSTITUTIONAL CLASS
Lipper Short- Intermediate Municipal 7.43% 3.53%
Debt Funds AverageN
Consumer Price Index 2.54% 3.32%
</TABLE>
N EW YORK MUNICIPAL INCOME - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns+ 1996
NEW YORK MUNICIPAL INCOME - 3.81%
INSTITUTIONAL CLASS
Lipper New York Municipal Debt Funds 3.15%
AverageP
Consumer Price Index 3.32%
</TABLE>
+INITIAL OFFERING OF INSTITUTIONAL CLASS OF GROWTH OPPORTUNITIES,
BALANCED, HIGH YIELD, STRATEGIC INCOME, GOVERNMENT INVESTMENT, SHORT
FIXED-INCOME, HIGH INCOME MUNICIPAL, 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
HIGH INCOME MUNICIPAL, 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 MUNICIPAL BOND TOOK
PLACE ON JULY 1, 1996. INSTITUTIONAL CLASS RETURNS PRIOR TO JULY 1,
1996 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 GROWTH FUNDS AVERAGE CURRENTLY REFLECTS THE PERFORMANCE
OF OVER 669 MUTUAL FUNDS WITH SIMILAR OBJECTIVES.
[B] THE LIPPER CAPITAL APPRECIATION FUNDS AVERAGE CURRENTLY REFLECTS
THE PERFORMANCE OF OVER 189 MUTUAL FUNDS WITH SIMILAR OBJECTIVES.
[C] THE LIPPER EQUITY INCOME FUNDS AVERAGE CURRENTLY REFLECTS THE
PERFORMANCE OF OVER 160 MUTUAL FUNDS WITH SIMILAR OBJECTIVES.
[D] THE LIPPER BALANCED FUNDS AVERAGE CURRENTLY REFLECTS THE
PERFORMANCE OF OVER 272 MUTUAL FUNDS WITH SIMILAR OBJECTIVES.
[E] THE LIPPER HIGH CURRENT YIELD FUNDS AVERAGE CURRENTLY REFLECTS THE
PERFORMANCE OF OVER 148 MUTUAL FUNDS WITH SIMILAR OBJECTIVES.
[F] THE LIPPER MULTI-SECTOR INCOME FUNDS AVERAGE CURRENTLY REFLECTS
THE PERFORMANCE OF OVER 51 MUTUAL FUNDS WITH SIMILAR OBJECTIVES.
[G] THE LIPPER U.S. MORTGAGE FUNDS AVERAGE CURRENTLY REFLECTS THE
PERFORMANCE OF OVER 59 MUTUAL FUNDS WITH SIMILAR OBJECTIVES.
[H] THE LIPPER GENERAL U.S. GOVERNMENT BOND FUNDS AVERAGE CURRENTLY
REFLECTS THE PERFORMANCE OF OVER 170 MUTUAL FUNDS WITH SIMILAR
OBJECTIVES.
[I] THE LIPPER INTERMEDIATE INVESTMENT GRADE BOND FUNDS AVERAGE
CURRENTLY REFLECTS THE PERFORMANCE OF OVER 176 MUTUAL FUNDS WITH
SIMILAR OBJECTIVES.
[J] THE LIPPER SHORT INVESTMENT GRADE BOND FUNDS AVERAGE CURRENTLY
REFLECTS THE PERFORMANCE OF OVER 95 MUTUAL FUNDS WITH SIMILAR
OBJECTIVES.
[K] THE LIPPER HIGH YIELD MUNICIPAL BOND FUNDS AVERAGE CURRENTLY
REFLECTS THE PERFORMANCE OF OVER 43 MUTUAL FUNDS WITH SIMILAR
OBJECTIVES.
[L] THE LIPPER GENERAL MUNICIPAL DEBT FUNDS AVERAGE CURRENTLY REFLECTS
THE PERFORMANCE OF OVER 225 MUTUAL FUNDS WITH SIMILAR OBJECTIVES.
[M] THE LIPPER INTERMEDIATE MUNICIPAL DEBT FUNDS AVERAGE CURRENTLY
REFLECTS THE PERFORMANCE OF OVER 136 MUTUAL FUNDS WITH SIMILAR
OBJECTIVES.
[N] THE LIPPER SHORT MUNICIPAL DEBT FUNDS AVERAGE CURRENTLY REFLECTS
THE PERFORMANCE OF OVER 28 MUTUAL FUNDS WITH SIMILAR OBJECTIVES.
[O] THE LIPPER NEW YORK MUNICIPAL DEBT FUNDS AVERAGE CURRENTLY
REFLECTS THE PERFORMANCE OF OVER 96 MUTUAL FUNDS WITH SIMILAR
OBJECTIVES
TECHNOQUANT IS A TRADEMARK OF FMR CORP.
(2_FIDELITY_LOGOS)FIDELITY ADVISOR
(REGISTERED TRADEMARK)
INTERMEDIATE MUNICIPAL INCOME FUND - CLASS A, CLASS T, CLASS B
AND CLASS C
ANNUAL REPORT
NOVEMBER 30, 1997
CONTENTS
PRESIDENT'S MESSAGE 3 NED JOHNSON ON INVESTING STRATEGIES.
PERFORMANCE 4 HOW THE FUND HAS DONE OVER TIME.
FUND TALK 19 THE MANAGER'S REVIEW OF FUND
PERFORMANCE, STRATEGY AND OUTLOOK.
INVESTMENT CHANGES 22 A SUMMARY OF MAJOR SHIFTS IN THE FUND'S
INVESTMENTS OVER THE PAST SIX MONTHS.
INVESTMENTS 23 A COMPLETE LIST OF THE FUND'S INVESTMENTS
WITH THEIR MARKET VALUES.
FINANCIAL STATEMENTS 30 STATEMENTS OF ASSETS AND LIABILITIES,
OPERATIONS, AND CHANGES IN NET ASSETS,
AS WELL AS FINANCIAL HIGHLIGHTS.
NOTES 39 NOTES TO THE FINANCIAL STATEMENTS.
REPORT OF INDEPENDENT 48 THE AUDITORS' OPINION.
ACCOUNTANTS
DISTRIBUTIONS 49
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION
OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS
IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
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.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY ADVISOR FUND, INCLUDING CHARGES
AND EXPENSES, CONTACT YOUR
INVESTMENT PROFESSIONAL FOR A FREE PROSPECTUS. READ IT CAREFULLY
BEFORE YOU INVEST OR SEND MONEY.
PRESIDENT'S MESSAGE
(PHOTO_OF_EDWARD_C_JOHNSON_3D)DEAR SHAREHOLDER:
Although financial turmoil in Pacific Basin countries was a catalyst
for significant volatility in U.S. markets in late October and into
November, the Standard & Poor's 500 Index has risen more than 31%
year-to-date, almost three times its historical annual average.
Meanwhile, bond markets - primarily influenced by a relatively steady
flow of positive news on the inflation front - continued to post solid
returns through the first 11 months of 1997.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
The longer your investment time frame, the less likely it is that you
will be affected by short-term market volatility. A 10-year investment
horizon appropriate for saving for a college education, for example,
enables you to weather market cycles in a long-term fund, which may
have a higher risk potential, but also has a higher potential rate of
return.
An intermediate-length fund could make sense if your investment
horizon is two to four years, while a short-term bond fund could be
the right choice if you need your money in one or two years.
If your time horizon is less than a year, you might want to consider
moving some of your bond investment into a money market fund. These
funds seek income and a stable share price by investing in
high-quality, short-term investments. Of course, it's important to
remember that there is no assurance that a money market fund will
achieve its goal of maintaining a stable net asset value of $1.00 per
share, and that these types of funds are neither insured nor
guaranteed by any agency of the U.S. government.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases.
Remember to contact your investment professional if you need help with
your investments.
Best regards,
Edward C. Johnson 3d
ADVISOR INTERMEDIATE MUNICIPAL INCOME FUND - CLASS A
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can
look at the total percentage change in value, the average annual
percentage change or the growth of a hypothetical $10,000 investment.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). You can also look at the class' income, as reflected in its
yield, to measure performance. 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. Effective August 1, 1997, the maximum
3.25% sales charge on Class A shares was increased to 3.75%. If
Fidelity had not reimbursed certain class expenses, the total returns
and dividends would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1997 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
ADVISOR INTERMEDIATE MUNICIPAL INCOME - 6.42% 30.87% 91.25%
CLASS A
ADVISOR INTERMEDIATE MUNICIPAL INCOME - 2.43% 25.96% 84.08%
CLASS A (INCL. MAX. 3.75% SALES CHARGE)
LEHMAN BROTHERS 1-17 YEAR MUNICIPAL 6.45% N/A N/A
BOND INDEX
INTERMEDIATE MUNICIPAL DEBT FUNDS AVERAGE 5.50% 34.65% 99.90%
CUMULATIVE TOTAL RETURNS show Class A's performance in percentage
terms over a set period - in this case, one year, five years or 10
years. For example, if you had invested $1,000 in a fund that had a 5%
return over the past year, the value of your investment would be
$1,050. You can compare Class A's returns to those of the Lehman
Brothers 1-17 Year Municipal Bond Index - a total return performance
benchmark for investment-grade municipal bonds with maturities between
one and 17 years. To measure how Class A's performance stacked up
against its peers, you can compare it to the intermediate municipal
debt funds average, which reflects the performance of mutual funds
with similar objectives tracked by Lipper Analytical Services, Inc.
The past one year average represents a peer group of 141 mutual funds.
These benchmarks include reinvested dividends and capital gains, if
any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
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%
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.
$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)
TOTAL RETURN COMPONENTS
YEARS ENDED NOVEMBER 30,
1997 1996 1995 1994 1993
DIVIDEND RETURN 4.58% 4.58% 5.06% 4.18% 5.13%
CAPITAL APPRECIATION RETURN 1.84% 0.29% 10.43% -9.96% 2.59%
TOTAL RETURN 6.42% 4.87% 15.49% -5.78% 7.72%
TOTAL RETURN COMPONENTS include both dividend returns and capital
appreciation returns. A dividend return reflects the actual dividends
paid by the class. A capital appreciation return reflects both the
amount paid by the class to shareholders as capital gain distributions
and changes in the class' share price. Both returns assume the
dividends or capital gains paid by the class are reinvested, if any,
and exclude the effect of sales charges.
DIVIDENDS AND YIELD
<TABLE>
<CAPTION>
<S> <C> <C> <C>
PERIODS ENDED NOVEMBER 30, 1997 PAST 1 PAST 6 PAST 1
MONTH MONTHS YEAR
DIVIDENDS PER SHARE 3.70(CENTS) 22.90(CENTS) 45.94(CENTS)
ANNUALIZED DIVIDEND RATE 4.26% 4.35% 4.42%
30-DAY ANNUALIZED YIELD 3.68% - -
30-DAY ANNUALIZED TAX-EQUIVALENT YIELD 5.75% - -
</TABLE>
DIVIDENDS per share show the income paid by the class for a set
period. If you annualize this number, based on an average net asset
value of $10.56 over the past one month, $10.51 over the past six
months and $10.40 over the past one year, you can compare the class'
income over these three periods. The 30-day annualized YIELD is a
standard formula for all funds based on the yields of the bonds in the
fund, averaged over the past 30 days. This figure shows you the yield
characteristics of the fund's investments at the end of the period.
It also helps you to compare funds from different companies on an
equal basis. The offering share price used in the calculation of the
yield includes the effect of Class A's maximum 3.75% sales charge. The
tax-equivalent yield shows what you would have to earn on a taxable
investment to equal the class' tax-free yield, if you're in the 36%
federal tax bracket, but does not reflect payment of the federal
alternative minimum tax, if applicable. If Fidelity had not reimbursed
certain class expenses, the yield and tax-equivalent yield would have
been 3.61% and 5.64%, respectively.
ADVISOR INTERMEDIATE MUNICIPAL INCOME FUND - CLASS T
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can
look at the total percentage change in value, the average annual
percentage change or the growth of a hypothetical $10,000 investment.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). You can also look at the class' income, as reflected in its
yield, to measure performance. 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.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1997 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
ADVISOR INTERMEDIATE MUNICIPAL INCOME - 6.21% 30.58% 90.83%
CLASS T
ADVISOR INTERMEDIATE MUNICIPAL INCOME - 3.29% 26.99% 85.58%
CLASS T (INCL. MAX. 2.75% SALES CHARGE)
LEHMAN BROTHERS 1-17 YEAR MUNICIPAL 6.45% N/A N/A
BOND INDEX
INTERMEDIATE MUNICIPAL DEBT FUNDS AVERAGE 5.50% 34.65% 99.90%
CUMULATIVE TOTAL RETURNS show Class T's performance in percentage
terms over a set period - in this case, one year, five years or 10
years. For example, if you had invested $1,000 in a fund that had a 5%
return over the past year, the value of your investment would be
$1,050. You can compare Class T's returns to those of the Lehman
Brothers 1-17 Year Municipal Bond Index - a total return performance
benchmark for investment-grade municipal bonds with maturities between
one and 17 years.
To measure how Class T's performance stacked up against its peers, you
can compare it to the intermediate municipal debt funds average, which
reflects the performance of mutual funds with similar objectives
tracked by Lipper Analytical Services, Inc. The past one year average
represents a peer group of 141 mutual funds. These benchmarks include
reinvested dividends and capital gains, if any, and exclude the effect
of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1997 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
ADVISOR INTERMEDIATE MUNICIPAL INCOME - 6.21% 5.48% 6.68%
CLASS T
ADVISOR INTERMEDIATE MUNICIPAL INCOME - 3.29% 4.89% 6.38%
CLASS T (INCL. MAX. 2.75% SALES CHARGE)
LEHMAN BROTHERS 1-17 YEAR MUNICIPAL 6.45% N/A N/A
BOND INDEX
INTERMEDIATE MUNICIPAL DEBT FUNDS AVERAGE 5.50% 6.12% 7.16%
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.
$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)
TOTAL RETURN COMPONENTS
YEARS ENDED NOVEMBER 30,
1997 1996 1995 1994 1993
DIVIDEND RETURN 4.47% 4.60% 5.06% 4.18% 5.13%
CAPITAL APPRECIATION RETURN 1.74% 0.29% 10.43% -9.96% 2.59%
TOTAL RETURN 6.21% 4.89% 15.49% -5.78% 7.72%
TOTAL RETURN COMPONENTS include both dividend returns and capital
appreciation returns. A dividend return reflects the actual dividends
paid by the class. A capital appreciation return reflects both the
amount paid by the class to shareholders as capital gain distributions
and changes in the class' share price. Both returns assume the
dividends or capital gains paid by the class are reinvested, if any,
and exclude the effect of sales charges.
DIVIDENDS AND YIELD
<TABLE>
<CAPTION>
<S> <C> <C> <C>
PERIODS ENDED NOVEMBER 30, 1997 PAST 1 PAST 6 PAST 1
MONTH MONTHS YEAR
DIVIDENDS PER SHARE 3.61(CENTS) 22.37(CENTS) 44.87(CENTS)
ANNUALIZED DIVIDEND RATE 4.16% 4.25% 4.31%
30-DAY ANNUALIZED YIELD 3.63% - -
30-DAY ANNUALIZED TAX-EQUIVALENT YIELD 5.67% - -
</TABLE>
DIVIDENDS per share show the income paid by the class for a set
period. If you annualize this number, based on an average net asset
value of $10.56 over the past one month, $10.51 over the past six
months and $10.41 over the past one year, you can compare the class'
income over these three periods. The 30-day annualized YIELD is a
standard formula for all funds based on the yields of the bonds in the
fund, averaged over the past 30 days. This figure shows you the yield
characteristics of the fund's investments at the end of the period.
It also helps you to compare funds from different companies on an
equal basis. The offering share price used in the calculation of the
yield includes the effect of Class T's maximum 2.75% sales charge. The
tax-equivalent yield shows what you would have to earn on a taxable
investment to equal the class' tax-free yield, if you're in the 36%
federal tax bracket, but does not reflect payment of the federal
alternative minimum tax, if applicable. If Fidelity had not reimbursed
certain class expenses, the yield and tax-equivalent yield would have
been 3.59% and 5.61%, respectively.
ADVISOR INTERMEDIATE MUNICIPAL INCOME FUND - CLASS B
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can
look at the total percentage change in value, the average annual
percentage change or the growth of a hypothetical $10,000 investment.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). You can also look at the class' income, as reflected in its
yield, to measure performance.
The initial offering of Class B shares took place on June 30, 1994.
Class B shares bear a 0.90% 12b-1/shareholder service fee (1.00% prior
to January 1, 1996) that is reflected in returns after June 30, 1994.
Returns between September 10, 1992 (the date Class T shares were first
offered) and June 30, 1994 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 Institutional Class, the original class of the fund. Had
Class B shares' 12b-1 fee been reflected, returns prior to June 30,
1994 would have been lower. Class B shares' contingent deferred sales
charges included in the past one year, past five years and past 10
years total return figures are 3%, 0% and 0%, respectively. If
Fidelity had not reimbursed certain class expenses, the total returns
and dividends would have been lower.
CUMULATIVE TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
PERIODS ENDED NOVEMBER 30, 1997 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
ADVISOR INTERMEDIATE MUNICIPAL INCOME - 5.54% 27.42% 86.22%
CLASS B
ADVISOR INTERMEDIATE MUNICIPAL INCOME - 2.54% 27.42% 86.22%
CLASS B (INCL. CONTINGENT DEFERRED SALES CHARGE)
LEHMAN BROTHERS 1-17 YEAR MUNICIPAL 6.45% N/A N/A
BOND INDEX
INTERMEDIATE MUNICIPAL DEBT FUNDS AVERAGE 5.50% 34.65% 99.90%
</TABLE>
CUMULATIVE TOTAL RETURNS show Class B's performance in percentage
terms over a set period - in this case, one year, five years or 10
years. For example, if you had invested $1,000 in a fund that had a 5%
return over the past year, the value of your investment would be
$1,050. You can compare Class B's returns to those of the Lehman
Brothers 1-17 Year Municipal Bond Index - a total return performance
benchmark for investment-grade municipal bonds with maturities between
one and 17 years. To measure how Class B's performance stacked up
against its peers, you can compare it to the intermediate municipal
debt funds average, which reflects the performance of mutual funds
with similar objectives tracked by Lipper Analytical Services, Inc.
The past one year average represents a peer group of 141 mutual funds.
These benchmarks include reinvested dividends and capital gains, if
any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1997 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
ADVISOR INTERMEDIATE MUNICIPAL INCOME - 5.54% 4.97% 6.41%
CLASS B
ADVISOR INTERMEDIATE MUNICIPAL INCOME - 2.54% 4.97% 6.41%
CLASS B (INCL. CONTINGENT DEFERRED SALES CHARGE)
LEHMAN BROTHERS 1-17 YEAR MUNICIPAL 6.45% N/A N/A
BOND INDEX
INTERMEDIATE MUNICIPAL DEBT FUNDS AVERAGE 5.50% 6.12% 7.16%
AVERAGE ANNUAL TOTAL RETURNS take Class Bs' cumulative return and show
you what would have happened if Class B had performed at a constant
rate each year.
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19971130 19971212 134538 S00000000000001
FA Int Muni Inc -CL B LB Municipal Bond
00689 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 14454.67 15918.15
1992/10/31 14351.83 15761.67
1992/11/30 14614.07 16043.96
1992/12/31 14631.72 16207.77
1993/01/31 14798.10 16396.27
1993/02/28 15208.95 16989.32
1993/03/31 15058.09 16809.74
1993/04/30 15164.00 16979.35
1993/05/31 15227.82 17074.78
1993/06/30 15388.32 17359.76
1993/07/31 15405.80 17382.50
1993/08/31 15689.25 17744.40
1993/09/30 15851.56 17946.51
1993/10/31 15866.44 17981.15
1993/11/30 15742.75 17822.73
1993/12/31 16011.74 18198.97
1994/01/31 16160.29 18406.80
1994/02/28 15756.78 17930.07
1994/03/31 15141.16 17199.95
1994/04/30 15275.17 17345.81
1994/05/31 15411.89 17496.20
1994/06/30 15301.13 17389.30
1994/07/31 15499.06 17708.04
1994/08/31 15543.99 17769.31
1994/09/30 15343.58 17508.46
1994/10/31 15115.48 17197.51
1994/11/30 14774.88 16886.58
1994/12/31 15032.60 17258.25
1995/01/31 15399.54 17751.49
1995/02/28 15780.97 18267.70
1995/03/31 15943.34 18477.60
1995/04/30 15928.50 18499.40
1995/05/31 16281.69 19089.72
1995/06/30 16183.82 18923.64
1995/07/31 16294.57 19103.04
1995/08/31 16488.23 19345.26
1995/09/30 16583.84 19467.72
1995/10/31 16750.21 19750.78
1995/11/30 16931.92 20078.44
1995/12/31 17019.31 20271.40
1996/01/31 17140.81 20424.45
1996/02/29 17075.72 20286.58
1996/03/31 16882.14 20027.32
1996/04/30 16836.05 19970.64
1996/05/31 16808.53 19962.65
1996/06/30 16946.04 20180.05
1996/07/31 17068.68 20363.68
1996/08/31 17057.63 20358.80
1996/09/30 17197.08 20643.82
1996/10/31 17354.41 20877.30
1996/11/30 17644.64 21259.36
1996/12/31 17568.44 21170.07
1997/01/31 17608.80 21210.08
1997/02/28 17744.56 21404.79
1997/03/31 17525.01 21119.46
1997/04/30 17647.43 21296.23
1997/05/31 17823.61 21616.53
1997/06/30 17998.76 21846.74
1997/07/31 18418.15 22451.90
1997/08/31 18265.14 22241.52
1997/09/30 18458.99 22505.53
1997/10/31 18532.98 22650.24
1997/11/28 18621.50 22783.42
IMATRL PRASUN SHR__CHT 19971130 19971212 134542 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Intermediate Municipal Income Fund -
Class B on November 30, 1987. As the chart shows, by November 30,
1997, the value of the investment would have been $18,622 - an 86.22%
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 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)
TOTAL RETURN COMPONENTS
YEARS ENDED NOVEMBER 30,
1997 1996 1995 1994 1993
DIVIDEND RETURN 3.80% 3.92% 4.17% 3.81% 5.13%
CAPITAL APPRECIATION RETURN 1.74% 0.29% 10.43% -9.96% 2.59%
TOTAL RETURN 5.54% 4.21% 14.60% -6.15% 7.72%
TOTAL RETURN COMPONENTS include both dividend returns and capital
appreciation returns. A dividend return reflects the actual dividends
paid by the class. A capital appreciation return reflects both the
amount paid by the class to shareholders as capital gain distributions
and changes in the class' share price. Both returns assume the
dividends or capital gains paid by the class are reinvested, if any,
and exclude the effect of sales charges.
DIVIDENDS AND YIELD
<TABLE>
<CAPTION>
<S> <C> <C> <C>
PERIODS ENDED NOVEMBER 30, 1997 PAST 1 PAST 6 PAST 1
MONTH MONTHS YEAR
DIVIDENDS PER SHARE 3.05(CENTS) 18.95(CENTS) 38.21(CENTS)
ANNUALIZED DIVIDEND RATE 3.51% 3.60% 3.67%
30-DAY ANNUALIZED YIELD 3.08% - -
30-DAY ANNUALIZED TAX-EQUIVALENT YIELD 4.81% - -
</TABLE>
DIVIDENDS per share show the income paid by the class for a set
period. If you annualize this number, based on an average net asset
value of $10.56 over the past one month, $10.51 over the past six
months and $10.40 over the past one year, you can compare the class'
income over these three periods. The 30-day annualized YIELD is a
standard formula for all funds based on the yields of the bonds in the
fund, averaged over the past 30 days. This figure shows you the yield
characteristics of the fund's investments at the end of the period. It
also helps you compare funds from different companies on an equal
basis. The offering share price used in the calculation of the yield
excludes the effect of Class B's contingent deferred sales charge. The
tax-equivalent yield shows what you would have to earn on a taxable
investment to equal the class' tax-free yield, if you're in the 36%
federal tax bracket, but does not reflect payment of the federal
alternative minimum tax, if applicable.
ADVISOR INTERMEDIATE MUNICIPAL INCOME FUND - CLASS C
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can
look at the total percentage change in value, the average annual
percentage change, or the growth of a hypothetical $10,000 investment.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). You can also look at the class' income, as reflected in its
yield, to measure performance.
The initial offering of Class C shares took place on November 3, 1997.
Class C shares bear a 1.00% 12b-1/shareholder service fee that is
reflected in returns after November 3, 1997. Returns between June 30,
1994 and November 3, 1997 are those of Class B shares and reflect
Class B shares' 0.90% 12b-1 fee (1.00% prior to January 1, 1996).
Returns between September 10, 1992 (the date Class T shares were first
offered) and June 30, 1994 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 Institutional Class, the original class of the fund. Had
Class C shares' 12b-1 fee been reflected, returns prior to November 3,
1997 would have been lower. Class C's contingent deferred sales
charges included in the past one year total return figure is 1.00%. If
Fidelity had not reimbursed certain class expenses, the total returns
and dividends would have been lower.
CUMULATIVE TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
PERIODS ENDED NOVEMBER 30, 1997 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
ADVISOR INTERMEDIATE MUNICIPAL INCOME - 5.54% 27.44% 86.26%
CLASS C
ADVISOR INTERMEDIATE MUNICIPAL INCOME - 4.54% 27.44% 86.26%
CLASS C (INCL. CONTINGENT DEFERRED SALES CHARGE)
LEHMAN BROTHERS 1-17 YEAR MUNICIPAL 6.45% N/A N/A
BOND INDEX
INTERMEDIATE MUNICIPAL DEBT FUNDS AVERAGE 5.50% 34.65% 99.90%
</TABLE>
CUMULATIVE TOTAL RETURNS show Class C's performance in percentage
terms over a set period - in this case, one year, five years or 10
years. For example, if you had invested $1,000 in a fund that had a 5%
return over the past year, the value of your investment would be
$1,050. You can compare Class C's returns to those of the Lehman
Brothers 1-17 Year Municipal Bond Index - a total return performance
benchmark for investment-grade municipal bonds with maturities between
one and 17 years. To measure how Class C's performance stacked up
against its peers, you can compare it to the intermediate municipal
debt funds average, which reflects the performance of mutual funds
with similar objectives tracked by Lipper Analytical Services, Inc.
The past one year average represents a peer group of 141 mutual funds.
These benchmarks include reinvested dividends and capital gains, if
any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1997 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
ADVISOR INTERMEDIATE MUNICIPAL INCOME - 5.54% 4.97% 6.42%
CLASS C
ADVISOR INTERMEDIATE MUNICIPAL INCOME - 4.54% 4.97% 6.42%
CLASS C (INCL. CONTINGENT DEFERRED SALES CHARGE)
LEHMAN BROTHERS 1-17 YEAR MUNICIPAL 6.45% N/A N/A
BOND INDEX
INTERMEDIATE MUNICIPAL DEBT FUNDS AVERAGE 5.50% 6.12% 7.16%
AVERAGE ANNUAL TOTAL RETURNS take Class Cs' cumulative return and show
you what would have happened if Class C had performed at a constant
rate each year.
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19971130 19980120 080947 S00000000000001
FA Int Muni Inc -CL C LB Municipal Bond
00525 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 10403.15 10574.12
1988/05/31 10436.07 10543.56
1988/06/30 10509.44 10697.81
1988/07/31 10564.11 10767.56
1988/08/31 10569.18 10777.03
1988/09/30 10685.14 10972.10
1988/10/31 10812.25 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 10854.87 11250.12
1989/04/30 11008.29 11517.20
1989/05/31 11172.69 11756.41
1989/06/30 11295.30 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 11459.99 12070.19
1989/11/30 11585.38 12281.42
1989/12/31 11689.81 12381.88
1990/01/31 11651.68 12323.31
1990/02/28 11755.14 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 12071.05 12733.93
1990/10/31 12206.03 12964.92
1990/11/30 12400.78 13225.65
1990/12/31 12434.25 13283.18
1991/01/31 12573.10 13461.44
1991/02/28 12687.56 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 12921.65 13872.72
1991/07/31 13051.08 14041.69
1991/08/31 13155.36 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 13728.85 14929.02
1992/02/29 13744.78 14933.80
1992/03/31 13692.20 14939.32
1992/04/30 13787.98 15072.28
1992/05/31 13939.55 15249.68
1992/06/30 14122.76 15505.57
1992/07/31 14427.61 15970.43
1992/08/31 14320.80 15814.72
1992/09/30 14456.56 15918.15
1992/10/31 14353.38 15761.67
1992/11/30 14616.02 16043.96
1992/12/31 14630.62 16207.77
1993/01/31 14797.45 16396.27
1993/02/28 15209.20 16989.32
1993/03/31 15057.95 16809.74
1993/04/30 15163.95 16979.35
1993/05/31 15227.88 17074.78
1993/06/30 15388.84 17359.76
1993/07/31 15406.26 17382.50
1993/08/31 15690.23 17744.40
1993/09/30 15852.66 17946.51
1993/10/31 15867.31 17981.15
1993/11/30 15743.39 17822.73
1993/12/31 16012.63 18198.97
1994/01/31 16161.62 18406.80
1994/02/28 15757.41 17930.07
1994/03/31 15140.64 17199.95
1994/04/30 15274.99 17345.81
1994/05/31 15412.28 17496.20
1994/06/30 15300.68 17389.30
1994/07/31 15498.95 17708.04
1994/08/31 15544.10 17769.31
1994/09/30 15343.45 17508.46
1994/10/31 15114.81 17197.51
1994/11/30 14774.31 16886.58
1994/12/31 15032.26 17258.25
1995/01/31 15399.89 17751.49
1995/02/28 15781.80 18267.70
1995/03/31 15944.43 18477.60
1995/04/30 15929.24 18499.40
1995/05/31 16282.95 19089.72
1995/06/30 16184.74 18923.64
1995/07/31 16295.53 19103.04
1995/08/31 16489.87 19345.26
1995/09/30 16585.52 19467.72
1995/10/31 16752.07 19750.78
1995/11/30 16934.20 20078.44
1995/12/31 17021.82 20271.40
1996/01/31 17143.75 20424.45
1996/02/29 17078.42 20286.58
1996/03/31 16884.73 20027.32
1996/04/30 16838.74 19970.64
1996/05/31 16811.13 19962.65
1996/06/30 16949.15 20180.05
1996/07/31 17072.29 20363.68
1996/08/31 17060.78 20358.80
1996/09/30 17200.51 20643.82
1996/10/31 17358.13 20877.30
1996/11/30 17648.91 21259.36
1996/12/31 17572.75 21170.07
1997/01/31 17613.38 21210.08
1997/02/28 17749.16 21404.79
1997/03/31 17529.19 21119.46
1997/04/30 17652.00 21296.23
1997/05/31 17828.49 21616.53
1997/06/30 18003.73 21846.74
1997/07/31 18423.76 22451.90
1997/08/31 18270.66 22241.52
1997/09/30 18464.83 22505.53
1997/10/31 18539.06 22650.24
1997/11/28 18626.33 22783.42
IMATRL PRASUN SHR__CHT 19971130 19980120 080949 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Intermediate Municipal Income Fund -
Class C on November 30, 1987. As the chart shows, by November 30,
1997, the value of the investment would have been $18,626 - a 86.26%
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 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)
TOTAL RETURN COMPONENTS
YEARS ENDED NOVEMBER 30,
1997 1996 1995 1994 1993
DIVIDEND RETURN 3.79% 3.92% 4.17% 3.81% 5.13%
CAPITAL APPRECIATION RETURN 1.75% 0.29% 10.43% -9.96% 2.59%
TOTAL RETURN 5.54% 4.21% 14.60% -6.15% 7.72%
TOTAL RETURN COMPONENTS include both dividend returns and capital
appreciation returns. A dividend return reflects the actual dividends
paid by the class. A capital appreciation return reflects both the
amount paid by the class to shareholders as capital gain distributions
and changes in the class' share price. Both returns assume the
dividends or capital gains paid by the class are reinvested, if any,
and exclude the effect of sales charges.
DIVIDENDS AND YIELD
PERIODS ENDED NOVEMBER 30, 1997 LIFE OF
CLASS
DIVIDENDS PER SHARE 2.67(CENTS)
ANNUALIZED DIVIDEND RATE 3.42%
30-DAY ANNUALIZED YIELD -
30-DAY ANNUALIZED TAX-EQUIVALENT YIELD -
DIVIDENDS per share show the income paid by the class for a set
period. The annualized dividend rate is based on an average net asset
value of $10.56 over the life of the class. The 30-day annualized
YIELD is a standard formula for all funds based on the yields of the
bonds in the fund, averaged over the past 30 days. This figure shows
you the yield characteristics of the fund's investments at the end of
the period. It also helps you compare funds from different companies
on an equal basis. The tax-equivalent yield shows what you would have
to earn on a taxable investment to equal the class' tax-free yield, if
you're in the 36% federal tax bracket, but does not reflect payment of
the federal alternative minimum tax, if applicable. Yield information
will be reported once Class C has a longer, more stable, operating
history.
FUND TALK: THE MANAGER'S OVERVIEW
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
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 AS STATED ON
THE COVER. 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, MORE 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.
FUND FACTS
GOAL: TO SEEK THE HIGHEST LEVEL
OF INCOME EXEMPT FROM FEDERAL
INCOME TAXES THAT CAN BE
OBTAINED CONSISTENT WITH THE
PRESERVATION OF CAPITAL
START DATE: SEPTEMBER 19, 1985
SIZE: AS OF NOVEMBER 30,
1997, MORE THAN $63 MILLION
MANAGER: DAVID MURPHY,
SINCE 1995; JOINED FIDELITY
IN 1989
(CHECKMARK)
INVESTMENT CHANGES
TOP FIVE STATES AS OF NOVEMBER 30, 1997
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE STATES
6 MONTHS AGO
CALIFORNIA 15.9 18.5
NEW YORK 11.1 12.4
MASSACHUSETTS 7.6 7.3
TEXAS 6.7 6.1
NEW MEXICO 5.7 5.5
TOP FIVE SECTORS AS OF NOVEMBER 30, 1997
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE SECTORS
6 MONTHS AGO
GENERAL OBLIGATION 28.9 29.8
EDUCATION 20.3 19.9
ELECTRIC REVENUE 16.7 13.7
HEALTH CARE 6.9 7.8
TRANSPORTATION 6.2 5.1
AVERAGE YEARS TO MATURITY AS OF NOVEMBER 30, 1997
6 MONTHS AGO
YEARS 7.6 7.8
AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY
DOLLAR AMOUNT.
DURATION AS OF NOVEMBER 30, 1997
6 MONTHS AGO
YEARS 5.6 5.7
DURATION SHOWS HOW MUCH A BOND FUND'S PRICE FLUCTUATES WITH CHANGES IN
COMPARABLE INTEREST RATES. IF RATES RISE 1%, FOR EXAMPLE, A FUND WITH
A FIVE-YEAR DURATION IS LIKELY TO LOSE ABOUT 5% OF ITS VALUE. OTHER
FACTORS ALSO CAN INFLUENCE A BOND FUND'S PERFORMANCE AND SHARE PRICE.
ACCORDINGLY, A BOND FUND'S ACTUAL PERFORMANCE MAY DIFFER FROM THIS
EXAMPLE.
QUALITY DIVERSIFICATION (MOODY'S RATINGS)
AS OF NOVEMBER 30, 1997 AS OF MAY 31, 1997
AAA 44.3%
AA, A 35.5%
BAA 16.2%
SHORT-TERM
INVESTMENTS 4.0%
AAA 38.8%
AA, A 39.1%
BAA 17.2%
SHORT-TERM
INVESTMENTS 4.9%
ROW: 1, COL: 1, VALUE: 4.0
ROW: 1, COL: 2, VALUE: 16.2
ROW: 1, COL: 3, VALUE: 35.5
ROW: 1, COL: 4, VALUE: 44.3
ROW: 1, COL: 1, VALUE: 4.9
ROW: 1, COL: 2, VALUE: 17.2
ROW: 1, COL: 3, VALUE: 39.1
ROW: 1, COL: 4, VALUE: 38.8
WHERE MOODY'S RATINGS ARE NOT AVAILABLE, WE HAVE USED S&P RATINGS.
AMOUNTS SHOWN ARE AS A PERCENTAGE OF THE FUND'S INVESTMENTS.
INVESTMENTS NOVEMBER 30, 1997
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES
MUNICIPAL BONDS - 96.0%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
ALASKA - 3.8%
North Slope Borough Gen. Oblig. (Cap. Appreciation)
Series B, 0% 1/1/03 (MBIA Insured) $ 3,000,000 $ 2,381,250 662523RR
ARKANSAS - 1.3%
Arkansas College Savings Gen. Oblig. (Cap. Appreciation)
Series A, 0% 6/1/02 1,000,000 820,000 041039QG
CALIFORNIA - 15.9%
California Edl. Facs. Auth. Rev. Rfdg. (Chapman Univ.)
5.375% 10/1/16 (Connie Lee Insured) 225,000 225,563 130174J2
California Gen. Oblig.
6.25% 10/1/19 400,000 435,500 130627BB
California Hsg. Fin. Agcy. Rev. (Home Mtg.) Series R,
5.35% 8/1/07 (MBIA Insured) (e) 1,000,000 1,045,000 13033EYM
California Poll. Cont. Fing. Auth. Resource Recovery
Rev. (Waste Management, Inc.)
Series A, 7.15% 2/1/11 (e) 500,000 544,375 130535BD
California Pub. Wks. Board Lease Rev. Rfdg.:
(Dept. of Corrections State Prison, Monterey County
Soledad II) Series D, 5.375% 11/1/14 500,000 506,250 13068G4K
(Various California State Univ. Projs.)
Series A, 5.50% 6/1/10 1,000,000 1,056,250 13068GRE
California Rural Home Mtg. Fin. Auth. Lease Rev.
(Rural Lease Purchase) Series A,
4.45% 8/1/01 (MBIA Insured) 1,000,000 1,011,250 130574AA
Long Beach Hbr. Rev. Rfdg. Series A, 5.50% 5/15/07
(FGIC Insured) (e)(g) 250,000 262,188 542424FJ
Los Angeles Unified School Dist. Series A, 6% 7/1/11
(FGIC Insured) 250,000 277,813 544644BA
Los Angeles County Ctfs. of Prtn. (Disney Parking Proj.)
(Cap. Appreciation) 0% 9/1/04 970,000 695,975 5446633R
Sacramento Muni. Util. Dist. Elec. Rev. 1.76% 11/15/08
(FGIC Insured) (a) 1,000,000 1,023,750 7860042C
Sacramento Pwr. Auth. Cogeneration Proj. Rev.:
6% 7/1/02 1,000,000 1,057,500 78605NAE
6.50% 7/1/08 300,000 331,125 78605NAL
San Bernadino County Ctfs. of Prtn. Rfdg.
(Med. Ctr. Fing. Proj.) 5.25% 8/1/04 500,000 512,500 796815NW
West Covina Ctfs. of Prtn. (Queen of The Valley Hosp.)
6.50% 8/15/09 1,000,000 1,086,250 952358BQ
10,071,289
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
COLORADO - 1.7%
Arapaho County Cap. Impt. Tr. Fed. Hwy. Rev.
(Cap. Appreciation) Series C, 0% 8/31/26
(Pre-Refunded to 8/31/05 @ 20.863) (f) $ 3,620,000 $ 524,900
03866ECC
Colorado Health Facs. Auth. Rev. Rfdg.
(Rocky Mountain Adventist) 6.25% 2/1/04 500,000 530,625 1964732L
1,055,525
DISTRICT OF COLUMBIA - 2.5%
District of Columbia Gen. Oblig. Rfdg. Series B-1,
5.40% 6/1/06 (AMBAC Insured) 1,000,000 1,043,750 254760ZF
District of Columbia Redev. Land Agcy. Spl. Tax Rev.
(Washington D.C. Sports Arena)
5.40% 11/1/00 500,000 509,375 254838AE
1,553,125
FLORIDA - 2.6%
Broward County Resource Recovery Rev.
(SES Broward Co. LP South Proj.) 7.95% 12/1/08 500,000 543,750
115064AE
Dade County Wtr. & Swr. Sys. Rev. 6.25%
10/1/10 (FGIC Insured) 500,000 573,750 233620DJ
Jacksonville Port Auth. Rev. Rfdg. (Port Facs.)
5.75% 11/1/09 (MBIA Insured) (e) 500,000 538,750 469466DS
1,656,250
GEORGIA - 2.7%
Georgia Gen. Oblig. Rfdg. Series A, 6.25% 3/1/06 1,000,000
1,118,750 373382QE
Monroe County Dev. Auth. Poll. Cont. Rev. Rfdg.
(Oglethorpe Pwr. Scherer Corp.)
Series A, 6.60% 1/1/07 500,000 566,875 610530BX
1,685,625
HAWAII - 0.4%
Honolulu Hawaii City and County Rfdg.
Series C, 5.50% 11/1/04 (FGIC Insured) 250,000 264,688 438669YX
ILLINOIS - 4.0%
Chicago Midway Arpt. Rev. Series B,
6% 1/1/09 (MBIA Insured) (e) 300,000 321,750 167562BU
Illinois Health Facs. Auth. Rev. Rfdg.
(Felician Health Care, Inc.) Series A,
6.85% 1/1/00 (AMBAC Insured) 1,000,000 1,050,000 45201HZC
Metropolitan Pier & Exposition Auth. Dedicated Tax Rev.
(McCormick Place Expansion Proj.) (Cap. Appreciation):
Series A, 0% 6/15/09 (FGIC Insured) 500,000 281,875 592247CQ
0% 6/15/00 (AMBAC Insured) 1,000,000 895,000 592247BU
2,548,625
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
IOWA - 1.7%
Iowa Student Loan Liquidity Corp. Student Loan Rev.
Series A, 6.35% 3/1/01 $ 1,000,000 $ 1,052,500 462590BT
LOUISIANA - 1.4%
Louisiana Pub. Facs. Auth. Rev. Rfdg. (Student Loan)
Sr. Series A-1, 6.20% 3/1/01 830,000 870,463 54640AJY
MASSACHUSETTS - 7.6%
Boston Rev. (Boston City Hosp.) Series A,
7.625% 2/15/21 (FHA Guaranteed)
(Pre-Refunded to 8/15/00 @ 102) (f) 250,000 276,563 101026AP
Massachusetts Gen. Oblig. Rfdg.
Series A, 5.50% 2/1/11 250,000 255,932 5758234S
Massachusetts Health & Edl. Facs. Auth. Rev. Rfdg.
(Fairview Extended Care) Series B, 4.55% 7/15/02
(MBIA Insured) LOC Bank Boston, N.A. 400,000 400,000 57585JRR
Massachusetts Ind. Fin. Agcy. Rev. (Cap. Appreciation)
(Massachusetts Biomedical Research)
Series A-1, 0% 8/1/02 1,600,000 1,292,000 575914DY
Massachusetts Tpk. Auth. Western Tpk. Rev. Series A,
5.55% 1/1/17 (MBIA Insured) 600,000 610,962 57604EAA
New England Ed. Loan Marketing Corp. Student Loan
Rev. Rfdg. Series B, 5.40% 6/1/00 1,950,000 1,998,750 643898BG
4,834,207
MINNESOTA - 2.1%
Minnesota Gen. Oblig. 6% 5/1/06 1,000,000 1,103,750 604128XY
Minnesota Higher Ed. Facs. Auth. Rev.
(Macalester College) Series 4-C,
5.50% 3/1/12 200,000 206,750 604151UN
1,310,500
NEW JERSEY - 1.8%
New Jersey Econ. Dev. Auth. Market Transition Facs.
Rev. (Sr. Lien) Series A, 7% 7/1/04 (MBIA Insured) 1,000,000
1,142,500 645910AH
NEW MEXICO - 5.7%
Albuquerque Arpt. Rev. Rfdg. 6.75% 7/1/09
(AMBAC Insured) (e) 450,000 519,750 013538EU
New Mexico Edl. Assistance Foundation Student Loan
Rev. Sr. Series IV-A2, 6.65% 3/1/07 2,300,000 2,501,250 647111DH
Rio Rancho Wtr. & Wastewtr. Sys. Rev.
Series A, 8% 5/15/04 (FSA Insured) 500,000 596,875 767175AH
3,617,875
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NEW YORK - 11.1%
Metropolitan Trans. Auth. Svc. Contract Rfdg. (Transit Facs.)
Series 5, 6.90% 7/1/05 $ 1,000,000 $ 1,092,500 592597WF
New York City Gen. Oblig. Series G, 5.40% 2/1/01 2,000,000
2,060,000 649664HN
New York City Muni. Assistance Corp. Rfdg.
Series E, 6% 7/1/04 500,000 543,125 626190G5
New York State Dorm. Auth. Rev.
(City Univ. Sys. Consolidated):
Series A, 5.75% 7/1/13 500,000 526,250 649834HV
Series C, 7.50% 7/1/10 500,000 606,250 649832DG
(State Univ. Edl. Facs.)
Series A, 6.50% 5/15/04 500,000 553,750 649835LU
New York State Local Gov't. Assistance Corp.
(Cap. Appreciation) Series A, 0% 4/1/08 1,000,000 601,250
649876AW
New York State Thruway Auth. Hwy. & Bridge Trust Fund
Series A, 5.80% 4/1/09 500,000 530,625 650013AQ
New York State Urban Dev. Corp. Rev.
Series A, 5.50% 4/1/10 (MBIA Insured) 500,000 520,625 650034AX
7,034,375
NORTH CAROLINA - 3.3%
North Carolina Eastern Muni. Pwr. Agcy. Pwr. Sys. Rev.:
Rfdg.:
Series B, 6% 1/1/06 1,000,000 1,067,500 658196NS
Series C, 5.50% 1/1/07 200,000 206,000 658196TB
Series A, 5.625% 1/1/03 500,000 518,750 658196NM
North Carolina Muni. Pwr. Agcy. Rfdg..
(Catawba Elec.) 5.90% 1/1/03 250,000 263,125 658203QC
2,055,375
OHIO - 1.2%
Ohio Bldg. Auth. State Facs. (Adult Correctional)
Series A, 5.95% 10/1/14 (MBIA Insured) 500,000 522,500 67755AJY
Ohio Tpk. Commission Tpk. Rev. Series A, 5.60%
2/15/12 (MBIA Insured) 250,000 259,063 67760HBP
781,563
PENNSYLVANIA - 3.9%
Pennsylvania Higher Edl. Facs. Auth. College & Univ.
Rev. Rfdg. (RIDC Reg'l. Growth - Carnegie Mellon
Univ. Proj.) 6% 11/1/04 1,270,000 1,395,413 709171H4
Pennsylvania Hsg. Fin. Agcy. Rfdg. (Residential Dev.)
Series A, 7% 7/1/01 1,000,000 1,077,500 708791ZL
2,472,913
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
RHODE ISLAND - 1.7%
Rhode Island Student Loan Auth. Student Loan Rev. Rfdg.
Series A, 6.55% 12/1/00 $ 1,000,000 $ 1,066,250 762315AQ
SOUTH CAROLINA - 3.7%
South Carolina Ed. Assistance Auth. Rev. Rfdg.
(Guaranteed Student Loan):
Series A-2, 5.40% 9/1/02 1,250,000 1,306,250 837114FC
Series B, 5.70% 9/1/05 (e) 1,000,000 1,050,000 837114FR
2,356,250
TENNESSEE - 0.5%
Memphis-Shelby County Arpt. Auth. Arpt. Rev. Rfdg.
Series A, 6% 2/15/07 (MBIA Insured) (e) 265,000 288,519 586111EH
TEXAS - 6.7%
Hurst Euless Bedford Independent School Dist. Rfdg.
(Cap. Appreciation) 0% 8/15/11
(PSF Guaranteed) 1,000,000 496,250 4478163B
Irving Texas Independent School Dist. (Cap. Appreciation)
0% 2/15/00 (PSF Guaranteed) (g) 250,000 227,813 46799QAC
North East Independent School Dist. Rfdg.
(Cap. Appreciation) Series D, 0% 2/1/00 2,065,000 1,886,894
659154YL
Port Arthur Hsg. Fin. Corp. Single Family Mtg.
Rev. Rfdg. 8.70% 3/1/12 465,000 507,431 733500BV
Texas Pub. Fin. Auth. Bldg. Rev. Rfdg. (Texas Technical
College) 6.25% 8/1/09 (MBIA Insured) 1,000,000 1,132,500 88275MDY
4,250,888
UTAH - 3.8%
Intermountain Pwr. Agcy. Pwr. Supply Rev.:
(Cap. Appreciation)
Series A, 0% 7/1/06 (MBIA Insured) 2,860,000 1,901,900 4588403Z
Rfdg.:
Series A, 6.50% 7/1/08 (AMBAC Insured) 250,000 287,188 45884AFR
Series D, 5% 7/1/21 (MBIA Insured) 200,000 193,000 45884AFE
2,382,088
WASHINGTON - 4.9%
Washington Pub. Pwr. Supply Sys.Rev.:
(Nuclear Proj. #2)
Rfdg. Series C, 7.50% 7/1/03 525,000 582,094 939828MP
5.40% 7/1/12 (b) 2,000,000 2,027,500 939828TX
(Nuclear Proj. #3)
Rfdg. Series C, 5.10% 7/1/07 500,000 514,375 939830PP
3,123,969
TOTAL MUNICIPAL BONDS
(Cost $58,387,323) 60,676,612
CASH EQUIVALENTS - 4.0%
SHARES VALUE
(NOTE 1)
Municipal Central Cash Fund (c)(d)
(Cost $2,516,501) 2,516,501 $ 2,516,501 31635A20
TOTAL INVESTMENTS IN SECURITIES - 100%
(Cost $60,903,824) $ 63,193,113
FUTURES CONTRACTS
EXPIRATION UNDERLYING FACE UNREALIZED
DATE AMOUNT AT VALUE GAIN/(LOSS)
PURCHASED
10 Municipal Bond Futures Contracts Dec. 97 $ 1,222,812 $ 16,502
THE FACE VALUE OF FUTURES PURCHASED AS A PERCENTAGE OF TOTAL
INVESTMENT IN SECURITIES - 1.9%
LEGEND
1. Debt obligation initially issued at one coupon which converts to a
higher coupon at a specified date. The rate shown is the rate at
period end.
2. A portion of the security was pledged to cover margin requirements
for futures contracts. At the period end, the value of securities
pledged amounted to $50,688.
3. Information in this report regarding holdings by state and security
types do not reflect the holdings of the Municipal Central Cash Fund.
A listing of the Municipal Central Cash Fund's holdings as of its most
recent fiscal period end is available upon request.
4. At the period end, the seven-day yield of the Municipal Central
Cash Fund was 3.86% The yield refers to the income earned by investing
in the fund over the seven-day period, expressed as an annual
percentage.
5. Private activity obligations whose interest is subject to the
federal alternative minimum tax for individuals.
6. Security collateralized by an amount sufficient to pay interest and
principal.
7. Security purchased on a delayed delivery or when-issued basis (see
Note 2 of Notes to Financial Statements).
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total
value of investment in securities, is as follows (ratings are
unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 76.5% AAA, AA, A 72.3%
Baa 14.6% BBB 14.3%
Ba 0.0% BB 0.0%
B 0.0% B 0.1%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
The percentage not rated by Moody's or S&P amounted to 0.0%.
The distribution of municipal securities by revenue source, as a
percentage of total value of investment in securities, is as follows:
General Obligation 28.9%
Education 20.3
Electric Revenue 16.7
Health Care 6.9
Transportation 6.2
Housing 5.8
Others (individually less than 5%) 15.2
TOTAL 100.0%
INCOME TAX INFORMATION
At November 30, 1997 the aggregate cost of investment securities for
income tax purposes was $60,903,824. Net unrealized appreciation
aggregated $2,289,289, of which $2,290,144 related to appreciated
investment securities and $855 related to depreciated investment
securities.
The fund hereby designates approximately $68,000 as a capital gain
dividend for the purpose of the dividend paid deduction.
At November 30, 1997, the fund was required to defer approximately
$113,000 of losses on futures contracts.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
NOVEMBER 30, 1997
ASSETS
INVESTMENT IN SECURITIES, AT VALUE (COST $60,903,824) - $ 63,193,113
SEE ACCOMPANYING SCHEDULE
INTEREST RECEIVABLE 864,602
RECEIVABLE FOR DAILY VARIATION ON FUTURES CONTRACTS 313
PREPAID EXPENSES 13,782
TOTAL ASSETS 64,071,810
LIABILITIES
PAYABLE TO CUSTODIAN BANK $ 47,694
PAYABLE FOR INVESTMENTS PURCHASED 491,209
DELAYED DELIVERY
PAYABLE FOR FUND SHARES REDEEMED 61,659
DISTRIBUTIONS PAYABLE 73,338
DISTRIBUTION FEES PAYABLE 14,440
ACCRUED MANAGEMENT FEE 18,402
OTHER PAYABLES AND ACCRUED EXPENSES 66,675
TOTAL LIABILITIES 773,417
NET ASSETS $ 63,298,393
NET ASSETS CONSIST OF:
PAID IN CAPITAL $ 60,935,835
ACCUMULATED UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON 56,767
INVESTMENTS
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS 2,305,791
NET ASSETS $ 63,298,393
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
NOVEMBER 30, 1997
CALCULATION OF MAXIMUM OFFERING PRICE $10.60
CLASS A:
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
($441,602 (DIVIDED BY) 41,679 SHARES)
MAXIMUM OFFERING PRICE PER SHARE (100/96.25 OF $10.60) $11.01
CLASS T: $10.59
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
($48,830,052 (DIVIDED BY) 4,609,444 SHARES)
MAXIMUM OFFERING PRICE PER SHARE (100/97.25 OF $10.59) $10.89
CLASS B: $10.59
NET ASSET VALUE AND OFFERING PRICE PER SHARE
($7,916,605 (DIVIDED BY) 747,589 SHARES) A
CLASS C: $10.59
NET ASSET VALUE AND OFFERING PRICE PER SHARE
($12,572 (DIVIDED BY) 1,187 SHARES) A
INSTITUTIONAL CLASS: $10.59
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER
SHARE ($6,097,562 (DIVIDED BY) 575,743 SHARES)
A REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED NOVEMBER 30, 1997
INTEREST INCOME $ 3,478,411
EXPENSES
MANAGEMENT FEE $ 255,140
TRANSFER AGENT FEES 127,011
DISTRIBUTION FEES 194,896
ACCOUNTING FEES AND EXPENSES 61,883
NON-INTERESTED TRUSTEES' COMPENSATION 180
CUSTODIAN FEES AND EXPENSES 6,548
REGISTRATION FEES 74,299
AUDIT 43,635
LEGAL 886
MISCELLANEOUS 1,700
TOTAL EXPENSES BEFORE REDUCTIONS 766,178
EXPENSE REDUCTIONS (82,120) 684,058
NET INTEREST INCOME 2,794,353
REALIZED AND UNREALIZED GAIN (LOSS)
NET REALIZED GAIN (LOSS) ON:
INVESTMENT SECURITIES 858,153
FUTURES CONTRACTS 16,876 875,029
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON:
INVESTMENT SECURITIES 175,681
FUTURES CONTRACTS 16,502 192,183
NET GAIN (LOSS) 1,067,212
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 3,861,565
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30,
1997 1996
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS $ 2,794,353 $ 3,449,493
NET INTEREST INCOME
NET REALIZED GAIN (LOSS) 875,029 684,780
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) 192,183 (712,133)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 3,861,565 3,422,140
FROM OPERATIONS
DISTRIBUTIONS TO SHAREHOLDERS (2,794,353) (3,449,493)
FROM NET INTEREST INCOME
FROM NET REALIZED GAIN (6,721) -
TOTAL DISTRIBUTIONS (2,801,074) (3,449,493)
SHARE TRANSACTIONS - NET INCREASE (DECREASE) (8,495,226) (9,402,984)
TOTAL INCREASE (DECREASE) IN NET ASSETS (7,434,735) (9,430,337)
NET ASSETS
BEGINNING OF PERIOD 70,733,128 80,163,465
END OF PERIOD $ 63,298,393 $ 70,733,128
</TABLE>
FINANCIAL HIGHLIGHTS CLASS - A
YEARS ENDED NOVEMBER 30,
1997 1996 E
SELECTED PER-SHARE DATA
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 D
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%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 442 $ 103
RATIO OF EXPENSES TO AVERAGE NET ASSETS .90% F .90% A,
F
RATIO OF NET INTEREST INCOME TO AVERAGE NET ASSETS 4.37% 4.60% A
PORTFOLIO TURNOVER RATE 18% 35%
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D 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.
E FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A
SHARES) TO NOVEMBER 30, 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 (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED NOVEMBER 30,
1997 1996 1995 1994 F 1993
SELECTED PER-SHARE DATA
NET ASSET VALUE, BEGINNING $ 10.410 $ 10.380 $ 9.400 $ 10.460 $ 11.080
OF PERIOD
INCOME FROM INVESTMENT OPERATIONS
NET INTEREST INCOME .449 .461 .451 .455 .508
NET REALIZED .181 .030 D .980 (1.040) .260
AND UNREALIZED GAIN (LOSS)
TOTAL FROM INVESTMENTOPERATIONS .630 .491 1.431 (.585) .768
LESS DISTRIBUTIONS
FROM NET INTEREST INCOME (.449) (.461) (.451) (.455) (.508)
FROM NET REALIZED GAIN (.001) - - - (.880)
IN EXCESS OF NET REALIZED GAIN - - - (.020) -
TOTAL DISTRIBUTIONS (.450) (.461) (.451) (.475) (1.388)
NET ASSET VALUE, END OF PERIOD $ 10.590 $ 10.410 $ 10.380 $ 9.400 $ 10.460
TOTAL RETURN B, C 6.21% 4.89% 15.49% (5.78)% 7.72%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $ 48,830 $ 56,729 $ 62,852 $ 57,382 $ 39,800
(000 OMITTED)
RATIO OF EXPENSES TO AVERAGE 1.00% 1.00% .94% .90% .90%
NET ASSETS E E E E E
RATIO OF NET INTEREST INCOME TO 4.32% 4.42% 4.56% 4.49% 4.76%
AVERAGE NET ASSETS
PORTFOLIO TURNOVER RATE 18% 35% 53% 53% 46%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D 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.
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 (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
F 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.
FINANCIAL HIGHLIGHTS - CLASS B
YEARS ENDED NOVEMBER 30,
1997 1996 1995 1994 D
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
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 .030 F .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)%
RATIOS AND SUPPLEMENTAL DATA
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 3.67% 3.76% 3.71% 3.74% A
NET ASSETS
PORTFOLIO TURNOVER RATE 18% 35% 53% 53%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
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 (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
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.
FINANCIAL HIGHLIGHTS - CLASS C
YEAR ENDED
NOVEMBER 30,
1997 D
SELECTED PER-SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.550
INCOME FROM INVESTMENT OPERATIONS
NET INTEREST 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%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 13
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.75% A, E
RATIO OF NET INTEREST INCOME TO AVERAGE NET ASSETS 3.33% A
PORTFOLIO TURNOVER RATE 18%
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
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 NOVEMBER 3, 1997 (COMMENCEMENT OF SALE OF CLASS C
SHARES) TO NOVEMBER 30, 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 (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
YEARS ENDED NOVEMBER 30,
1997 1996 1995 1994 E 1993
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
NET ASSET VALUE, BEGINNING OF $ 10.410 $ 10.360 $ 9.410 $ 10.460 $ 11.080
PERIOD
INCOME FROM INVESTMENT OPERATIONS
NET INTEREST INCOME .475 .487 .477 .481 .536
NET REALIZED AND .181 .050 B .950 (1.030) .260
UNREALIZED GAIN (LOSS)
TOTAL FROM INVESTMENT OPERATIONS .656 .537 1.427 (.549) .796
LESS DISTRIBUTIONS
FROM NET INTEREST INCOME (.475) (.487) (.477) (.481) (.536)
FROM NET REALIZED GAIN (.001) - - - (.880)
IN EXCESS OF NET REALIZED GAIN - - - (.020) -
TOTAL DISTRIBUTIONS (.476) (.487) (.477) (.501) (1.416)
NET ASSET VALUE, END OF PERIOD $ 10.590 $ 10.410 $ 10.360 $ 9.410 $ 10.460
TOTAL RETURN A 6.48% 5.36% 15.44% (5.43)% 8.01%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $ 6,098 $ 6,455 $ 11,085 $ 11,702 $ 15,076
(000 OMITTED)
RATIO OF EXPENSES TO AVERAGE .75% C .75% .70% .65% .65%
NET ASSETS C C C C
RATIO OF EXPENSES TO AVERAGE NET .75% .74% .70% .65% .65%
ASSETS AFTER EXPENSE REDUCTIONS D
RATIO OF NET INTEREST INCOME TO 4.57% 4.68% 4.96% 4.75% 5.01%
AVERAGE NET ASSETS
PORTFOLIO TURNOVER RATE 18% 35% 53% 53% 46%
</TABLE>
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
B 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.
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 (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
D FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
E 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.
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1997
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Intermediate Municipal Income Fund(the fund) is a
fund of Fidelity Advisor Series VI(the trust) and is authorized to
issue an unlimited number of shares. The trust is registered under the
Investment Company Act of 1940, as amended (the 1940 Act), as an
open-end management investment company organized as a Massachusetts
business trust.
The fund offers Class A, Class T, Class B, Class C, and Institutional
Class shares, each of which has equal rights as to assets and voting
privileges. Each class has exclusive voting rights with respect to its
distribution plan. The fund commenced sale of Class C shares on
November 3, 1997. Interest income, realized and unrealized capital
gains and losses, the common expenses of the fund, and certain
fund-level expense reductions, if any, are allocated on a pro rata
basis to each class based on the relative net assets of each class to
the total net assets of the fund. Each class of shares differs in its
respective distribution, transfer agent, registration, and certain
other class-specific fees, expenses, and expense reductions.
The financial statements have been prepared in conformity with
generally accepted accounting principles which permit management to
make certain estimates and assumptions at the date of the financial
statements. The following summarizes the significant accounting
policies of the fund:
SECURITY VALUATION. Securities are valued based upon a computerized
matrix system and/ or appraisals by a pricing service, both of which
consider market transactions and dealer-supplied valuations.
Securities for which quotations are not readily available are valued
at their fair value as determined in good faith under consistently
applied procedures under the general supervision of the Board of
Trustees. Short-term securities with remaining maturities of sixty
days or less for which quotations are not readily available are valued
at amortized cost or original cost plus accrued interest, both of
which approximate current value.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent that it distributes substantially all of
its taxable income for its fiscal year. The schedule of investments
includes information regarding income taxes under the caption "Income
Tax Information."
INTEREST INCOME. Interest income, which includes amortization of
premium and accretion of original issue discount, is accrued as
earned.
EXPENSES. Most expenses of the, trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
between the funds in the trust.
PREPAID EXPENSES. Fidelity Management & Research Company (FMR) bears
all organizational expenses except for registering and qualifying
Class C and shares of Class C for distribution under federal and state
securities law. These expenses are borne by Class C and amortized over
one year.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are declared daily and
paid monthly from net interest income. Distributions from realized
gains, if any, are recorded on the ex-dividend date. Income dividends
and capital gain distributions are declared separately for each class.
Income and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. These differences, which may result in
distribution reclassifications, are primarily due to differing
treatments for futures transactions, capital loss carryforwards and
losses deferred due to futures. The fund also utilized earnings and
profits distributed to shareholders on redemption of shares as a part
of the dividends paid deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and
may affect the per-share allocation between net interest income and
realized and unrealized gain (loss). Accumulated undistributed net
realized gain (loss) on investments may include temporary book and tax
basis differences that will reverse in a subsequent period. Any
taxable income or gain remaining at fiscal year end is distributed in
the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
MUNICIPAL CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by
the Securities and Exchange Commission, the fund may invest in the
Municipal Central Cash Fund (the Cash Fund) managed by FMR Texas Inc.,
an affiliate of (FMR). The Cash Fund is an open-end money market fund
available only to investment companies and other accounts managed by
FMR and its affiliates. The Cash Fund seeks preservation of capital,
liquidity, and current income by investing in high-quality, short-term
municipal securities of various states and municipalities. Income
distributions from the Cash Fund are declared daily and paid monthly
from net interest income. Income distributions received by the fund
are recorded as interest income in the accompanying financial
statements.
WHEN-ISSUED SECURITIES. The fund may purchase or sell securities on a
when-issued basis. Payment and delivery may take place a month or more
after the date of the transaction. The price of the underlying
securities is fixed at the time the transaction is negotiated. The
market values of the securities purchased on a when-issued or forward
commitment basis are identified as such in the fund's schedule of
investments. The fund may receive compensation for interest forgone in
the purchase of a when-issued security. With respect to purchase
commitments, the fund identifies securities as segregated in its
custodial records with a value at least equal to the amount of the
commitment. The payables and receivables
2. OPERATING POLICIES - CONTINUED
WHEN-ISSUED SECURITIES - CONTINUED
associated with the purchases and sales of when-issued securities
having the same settlement date and broker are offset. When-issued
securities that have been purchased from and sold to different brokers
are reflected as both payables and receivables in the statement of
assets and liabilities under the caption "Delayed delivery." Losses
may arise due to changes in the market value of the underlying
securities, if the counterparty does not perform under the contract,
or if the issuer does not issue the securities due to political,
economic, or other factors.
FUTURES CONTRACTS. The fund may use futures contracts to manage its
exposure to the bond market and to fluctuations in interest rates .
Buying futures tends to increase the fund's exposure to the underlying
instrument, while selling futures tends to decrease the fund's
exposure to the underlying instrument or hedge other fund investments.
Futures contracts involve, to varying degrees, risk of loss in excess
of the futures variation margin reflected in the Statement of Assets
and Liabilities. The underlying face amount at value of any open
futures contracts at period end is shown in the schedule of
investments under the caption "Futures Contracts." This amount
reflects each contract's exposure to the underlying instrument at
period end. Losses may arise from changes in the value of the
underlying instruments or if the counterparties do not perform under
the contracts' terms. Gains (losses) are realized upon the expiration
or closing of the futures contracts. Futures contracts are valued at
the settlement price established each day by the board of trade or
exchange on which they are traded.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $11,608,485 and $22,805,234, respectively.
The market value of futures contracts opened and closed during the
period amounted to $11,482,118 and $10,292,684, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus a
fixed individual fund fee rate applied to the average net assets of
the fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds advised by FMR. The rates ranged from .1100% to .3700% for the
period. The annual individual fund fee rate is .25%. In the event that
these rates were lower than the contractual rates in effect
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
during the period, FMR voluntarily implemented the above rates, as
they resulted in the same or a lower management fee. For the period,
the management fee was equivalent to an annual rate of .39% of average
net assets .
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the
1940 Act, the Trustees have adopted separate distribution plans with
respect to each class of shares (collectively referred to as "the
Plans"). Under certain of the Plans, the class pays Fidelity
Distributors Corporation (FDC), an affiliate of FMR, a distribution
and service fee. This fee is based on the following annual rates of
the average net assets of each applicable class:
CLASS A .15%
CLASS T .25%
CLASS B .90%*
CLASS C 1.00%**
* .65% REPRESENTS A DISTRIBUTION FEE AND .25% REPRESENTS A
SHAREHOLDER SERVICE FEE.
** .75% REPRESENTS A DISTRIBUTION FEE AND .25% REPRESENTS A
SHAREHOLDER SERVICE FEE.
For the period, each class paid FDC the following amounts, a portion
of which was paid to securities dealers, banks and other financial
institutions for the distribution of each class' applicable shares,
and providing shareholder support services:
PAID TO DEALERS'
FDC PORTION
CLASS A $ 521 $ 521
CLASS T 127,082 127,082
CLASS B 67,287 18,691
CLASS C 6 -
$ 194,896 $ 146,294
Under the Plans, FMR or FDC may use its resources to pay
administrative and promotional expenses related to the sale of each
class' shares. The Plans also authorize payments to third parties that
assist in the sale of each class' shares or render shareholder support
services.
SALES LOAD. FDC receives a front-end sales charge of up to 3.75% for
selling Class A shares (3.25% prior to August 1, 1997), and 2.75% for
selling Class T shares of the fund, respectively. FDC receives the
proceeds of contingent deferred sales charges levied on Class B share
redemptions occurring within three years of purchase and Class C share
redemptions occuring within one year of purchase. Contingent deferred
sales charges are based on declining rates ranging from 3% to 1% for
Class B and 1% for Class C, of the lesser of the cost of shares at the
initial date of purchase or the net asset value of the redeemed
shares, excluding any reinvested dividends and capital gains.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
SALES LOAD - CONTINUED
For the period, FDC received the following sales charge amounts
related to each class, a portion of which is paid to securities,
dealers, banks, and other financial institutions:
PAID TO DEALERS'
FDC PORTION
CLASS A $ 5,724 $ 4,474
CLASS T 21,915 15,303
CLASS B 19,218 -*
CLASS C - -*
$ 46,857 $ 19,777
* WHEN CLASS B AND CLASS C SHARES ARE INITIALLY SOLD, FDC PAYS
COMMISSIONS FROM ITS OWN RESOURCES TO DEALERS THROUGH
WHICH THE SALES ARE MADE.
TRANSFER AGENT AND ACCOUNTING FEES. UMB Bank, n.a. (UMB) is the
custodian, transfer agent, and shareholder servicing agent for the
fund's Class A, Class T, Class B, Class C,and Institutional Class
shares. UMB has entered into a sub-arrangements with Fidelity
Investments Institutional Operations Company, Inc. (FIIOC) with
respect to all classes of the fund to perform the transfer, dividend
disbursing, and shareholder servicing agent functions. FIIOC, an
affiliate of FMR, receives account fees and asset-based fees that vary
according to the account size and type of account of the shareholders
of the respective classes of the fund. All fees are paid to FIIOC by
UMB, which is reimbursed by each class for such payments. FIIOC pays
for typesetting, printing and mailing of all shareholder reports. For
the period, each class paid the following transfer agent fees:
TRANSFER AMOUNT % OF
AGENT AVERAGE
NET ASSETS
CLASS A UMB $ 1,254 .36
CLASS T UMB 99,245 .20
CLASS B UMB 14,216 .19
CLASS C UMB 5 .64*
INSTITUTIONAL CLASS UMB 12,291 .18
$ 127,011
* ANNUALIZED
UMB also has a sub-contract with Fidelity Service Company, Inc. (FSC),
an affiliate of FMR, under which FSC maintains the fund's accounting
records. The fee is based on the level of average net assets for the
month plus out-of-pocket expenses.
5. EXPENSE REDUCTIONS.
FMR voluntarily agreed to reimburse operating expenses (excluding
interest, taxes, brokerage commissions and extraordinary expenses)
above the following annual rates or range of annual rates of average
net assets for each of the following classes:
FMR REIMBURSEMENT
EXPENSE
LIMITATIONS
CLASS A .90% $ 29,398
CLASS T 1.00% 19,986
CLASS B 1.65% 15,147
CLASS C 1.75% 1,250
INSTITUTIONAL CLASS .75% 14,954
$ 80,735
In addition, the fund has entered into an arrangement with each class'
transfer agent whereby credits realized as a result of uninvested cash
balances were used to reduce a portion of expenses. During the period,
Class T expenses were reduced as follows under the transfer agent
arrangement.
TRANSFER
AGENT
INTEREST CREDITS
CLASS T $ 1,385
6. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
YEAR ENDED NOVEMBER 30,
1997 B 1996 A
CLASS A
FROM NET INTEREST INCOME $ 15,189 $ 1,046
FROM NET REALIZED GAIN 24 -
TOTAL $ 15,213 $ 1,046
CLASS T
FROM NET INTEREST INCOME $ 2,195,690 $ 2,699,983
FROM NET REALIZED GAIN 5,310 -
TOTAL $ 2,201,000 $ 2,699,983
CLASS B
FROM NET INTEREST INCOME $ 274,703 $ 269,283
FROM NET REALIZED GAIN 767 -
TOTAL $ 275,470 $ 269,283
CLASS C
FROM NET INTEREST INCOME $ 26 $ -
FROM NET REALIZED GAIN - -
TOTAL $ 26 $ -
INSTITUTIONAL CLASS
FROM NET INTEREST INCOME $ 308,745 $ 479,181
FROM NET REALIZED GAIN 620 -
TOTAL $ 309,365 $ 479,181
$ 2,801,074 $ 3,449,493
A DISTRIBUTIONS FOR CLASS A ARE FOR THE PERIOD SEPTEMBER 3, 1996
(COMMENCEMENT OF SALE OF SHARES) TO NOVEMBER 30, 1996.
B DISTRIBUTIONS FOR CLASS C ARE FOR THE PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO NOVEMBER 30, 1997.
7. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:
SHARES DOLLARS
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1997 B 1996 A 1997 B 1996 A
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CLASS A 37,401 9,815 $ 388,486 $ 99,788
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 1,437 108 14,999 1,046
SHARES REDEEMED (7,082) - (74,532) -
NET INCREASE (DECREASE) 31,756 9,923 $ 328,953 $ 100,834
CLASS T 1,237,934 2,035,422 $ 12,868,543 $ 20,912,410
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 150,942 189,811 1,571,556 1,947,724
SHARES REDEEMED (2,228,549) (2,833,821) (23,132,793) (28,990,305)
NET INCREASE (DECREASE) (839,673) (608,588) $ (8,692,694) $ (6,130,171)
CLASS B 162,293 326,024 $ 1,686,065 $ 3,345,475
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 17,600 17,066 183,295 175,043
SHARES REDEEMED (147,606) (227,839) (1,530,078) (2,324,198)
NET INCREASE (DECREASE) 32,287 115,251 $ 339,282 $ 1,196,320
CLASS C 1,185 - $ 12,505 $ -
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 2 - 25 -
SHARES REDEEMED - - - -
NET INCREASE (DECREASE) 1,187 - $ 12,530 $ -
INSTITUTIONAL CLASS 221,521 476,090 $ 2,293,637 $ 4,887,410
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 5,385 6,443 55,968 66,083
SHARES REDEEMED (271,323) (932,023) (2,832,902) (9,523,460)
NET INCREASE (DECREASE) (44,417) (449,490) $ (483,297) $ (4,569,967)
</TABLE>
A SHARE TRANSACTIONS FOR CLASS A ARE FOR THE PERIOD SEPTEMBER 3, 1996
(COMMENCEMENT OF SALE OF SHARES) TO NOVEMBER 30, 1996.
B SHARE TRANSACTIONS FOR CLASS C ARE FOR THE PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO NOVEMBER 30, 1997.
8. REGISTRATION FEES.
For the period, each class paid the following amounts to register its
shares for sale:
REGISTRATION
FEES
CLASS A $ 28,753
CLASS T 14,768
CLASS B 14,527
CLASS C 1,253
INSTITUTIONAL CLASS 14,998
$ 74,299
9. PROPOSED REORGANIZATION.
The Board of Trustees of Fidelity Advisor Intermediate Municipal
Income Fund has approved an Agreement and Plan of Reorganization
("Agreement") between the fund and Fidelity Advisor Short-Intermediate
Municipal Income Fund ("Reorganization"). 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 in exchange solely for the number of shares of Class A, Class T,
and Institutional Class of the fund having the same relative net asset
value as the outstanding shares of Class A, Class T, and Institutional
Class of Fidelity Advisor Short-Intermediate Municipal Income Fund as
of the close of business of the New York Stock Exchange, on the day
that the Reorganization is effective. The Reorganization can be
consummated only if, among other things, it is approved by the vote of
a majority (as defined by the 1940 Act) of outstanding voting
securities of Fidelity Advisor Short-Intermediate Municipal Income
Fund. A Special Meeting of Shareholders ("Meeting") of Fidelity
Advisor Short-Intermediate Municipal Income Fund will be held on May
4, 1998 to vote on the Agreement. A detailed description of the
proposed transaction and voting information will be sent to
shareholders of Fidelity Advisor Short-Intermediate Municipal Income
Fund in March, 1998. If the Agreement is approved at the Meeting, the
Reorganization is expected to become effective on or about May 28,
1998.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Advisor Series VI and the Shareholders of
Fidelity Advisor Intermediate Municipal Income Fund:
We have audited the accompanying statement of assets and liabilities
of Fidelity Advisor Series VI: Fidelity Advisor Intermediate Municipal
Income Fund, including the schedule of portfolio investments, as of
November 30, 1997, and the related statement of operations for the
year then ended, the statement of changes in net assets for each of
the two years in the period then ended and the financial highlights of
Class A, Class B, Class C, Class T, and Institutional Class for each
of the periods indicated therein. These financial statements and
financial highlights are the responsibility of the fund's management.
Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of November 30, 1997 by
correspondence with the custodian and brokers. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of Fidelity Advisor Series VI: Fidelity Advisor
Intermediate Municipal Income Fund as of November 30, 1997, the
results of its operations for the year then ended, the changes in its
net assets for each of the two years in the period then ended, and the
financial highlights of Class A, Class B, Class C, Class T, and
Institutional Class for each of the periods indicated therein, in
conformity with generally accepted accounting principles.
/s/COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
January 16, 1998
DISTRIBUTIONS
The Board of Trustees of Fidelity Advisor Intermediate Municipal
Income Fund voted to pay to shareholders of record at the opening of
business on record date, the following distributions derived from
capital gains realized from sales of portfolio securities, and
dividends derived from net investment income:
PAY DATE RECORD DATE DIVIDENDS CAPITAL GAINS
Class A 12/29/97 12/26/97 $__ $.03
Class T 12/29/97 12/26/97 $__ $.03
Class B 12/29/97 12/26/97 $__ $.03
Class C 12/29/97 12/26/97 $__ $.03
The fund will notify shareholders in January 1998 of these percentages
for use in preparing 1997 income tax returns.
During fiscal year ended 1997, 100% of the fund's income dividends was
free from federal income tax, and 8.72% of the fund's income dividends
was subject to the federal alternative minimum tax.
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Fred L. Henning, Jr., Vice President
David L. Murphy, Vice President
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
Thomas J. Simpson, Assistant Treasurer
Thomas D. Maher, Assistant Vice President
Dwight D. Churchill, Vice President
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
ADISORY BOARD
J. Gary Burkhead
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
UMB Bank, n.a.
Kansas City, MO
Fidelity Investments Institutional Operations Company, Inc.
Boston, MA
CUSTODIAN
UMB Bank, n.a.
Kansas City, MO
FOCUS FUNDS
Fidelity Advisor Consumer
Industries Fund
Fidelity Advisor Cyclical
Industries Fund
Fidelity Advisor Financial
Services Fund
Fidelity Advisor Health Care Fund
Fidelity Advisor Natural
Resources Fund
Fidelity Advisor Technology Fund
Fidelity Advisor Utilities Growth Fund
GROWTH FUNDS
Fidelity Advisor International Capital Appreciation Fund
Fidelity Advisor Overseas Fund
Fidelity Advisor TechnoQuant
Growth Fund
SM
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 Emerging Markets Income Fund
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
Fidelity Advisor Intermediate Municipal Income Fund
Fidelity Advisor Short-Intermediate Municipal Income Fund
MONEY MARKET FUNDS
Prime Fund
Treasury Fund
Tax-Exempt Fund
(registered trademark)
(2_FIDELITY_LOGOS)FIDELITY ADVISOR
(REGISTERED TRADEMARK)
INTERMEDIATE MUNICIPAL INCOME FUND - CLASS A, CLASS T, CLASS B
AND CLASS C
ANNUAL REPORT
NOVEMBER 30, 1997
CONTENTS
PRESIDENT'S MESSAGE 3 NED JOHNSON ON INVESTING STRATEGIES.
PERFORMANCE 4 HOW THE FUND HAS DONE OVER TIME.
FUND TALK 7 THE MANAGER'S REVIEW OF FUND
PERFORMANCE, STRATEGY AND OUTLOOK.
INVESTMENT CHANGES 10 A SUMMARY OF MAJOR SHIFTS IN THE FUND'S
INVESTMENTS OVER THE PAST SIX MONTHS.
INVESTMENTS 11 A COMPLETE LIST OF THE FUND'S INVESTMENTS
WITH THEIR MARKET VALUES.
FINANCIAL STATEMENTS 18 STATEMENTS OF ASSETS AND LIABILITIES,
OPERATIONS, AND CHANGES IN NET ASSETS,
AS WELL AS FINANCIAL HIGHLIGHTS.
NOTES 27 NOTES TO THE FINANCIAL STATEMENTS.
REPORT OF INDEPENDENT 36 THE AUDITORS' OPINION.
ACCOUNTANTS
DISTRIBUTIONS 37
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION
OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS
IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
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.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY ADVISOR FUND, INCLUDING CHARGES
AND EXPENSES, CONTACT YOUR
INVESTMENT PROFESSIONAL FOR A FREE PROSPECTUS. READ IT CAREFULLY
BEFORE YOU INVEST OR SEND MONEY.
PRESIDENT'S MESSAGE
(PHOTO_OF_EDWARD_C_JOHNSON_3D)DEAR SHAREHOLDER:
Although financial turmoil in Pacific Basin countries was a catalyst
for significant volatility in U.S. markets in late October and into
November, the Standard & Poor's 500 Index has risen more than 31%
year-to-date, almost three times its historical annual average.
Meanwhile, bond markets - primarily influenced by a relatively steady
flow of positive news on the inflation front - continued to post solid
returns through the first 11 months of 1997.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
The longer your investment time frame, the less likely it is that you
will be affected by short-term market volatility. A 10-year investment
horizon appropriate for saving for a college education, for example,
enables you to weather market cycles in a long-term fund, which may
have a higher risk potential, but also has a higher potential rate of
return.
An intermediate-length fund could make sense if your investment
horizon is two to four years, while a short-term bond fund could be
the right choice if you need your money in one or two years.
If your time horizon is less than a year, you might want to consider
moving some of your bond investment into a money market fund. These
funds seek income and a stable share price by investing in
high-quality, short-term investments. Of course, it's important to
remember that there is no assurance that a money market fund will
achieve its goal of maintaining a stable net asset value of $1.00 per
share, and that these types of funds are neither insured nor
guaranteed by any agency of the U.S. government.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases.
Remember to contact your investment professional if you need help with
your investments.
Best regards,
Edward C. Johnson 3d
ADVISOR INTERMEDIATE MUNICIPAL INCOME FUND - INSTITUTIONAL CLASS
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can
look at the total percentage change in value, the average annual
percentage change or the growth of a hypothetical $10,000 investment.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). You can also look at the class' income, as reflected in its
yield, to measure performance. If Fidelity had not reimbursed certain
class expenses, the total returns and dividends would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1997 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
ADVISOR INTERMEDIATE MUNICIPAL INCOME - 6.48% 32.28% 93.39%
INSTITUTIONAL CLASS
LEHMAN BROTHERS 1-17 YEAR MUNICIPAL 6.45% N/A N/A
BOND INDEX
INTERMEDIATE MUNICIPAL DEBT FUNDS AVERAGE 5.50% 34.65% 99.90%
CUMULATIVE TOTAL RETURNS show Institutional Class' performance in
percentage terms over a set period - in this case, one year, five
years or 10 years. For example, if you had invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment
would be $1,050. You can compare Institutional Class' returns to
those of the Lehman Brothers 1-17 Year Municipal Bond Index - a total
return performance benchmark for investment-grade municipal bonds with
maturities between one and 17 years. To measure how Institutional
Class' performance stacked up against its peers, you can compare it to
the intermediate municipal debt funds average, which reflects the
performance of mutual funds with similar objectives tracked by Lipper
Analytical Services, Inc. The past one year average represents a peer
group of 141 mutual funds. These benchmarks include reinvested
dividends and capital gains, if any, and exclude the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1997 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
ADVISOR INTERMEDIATE MUNICIPAL INCOME - 6.48% 5.75% 6.82%
INSTITUTIONAL CLASS
LEHMAN BROTHERS 1-17 YEAR MUNICIPAL 6.45% N/A N/A
BOND INDEX
INTERMEDIATE MUNICIPAL DEBT FUNDS AVERAGE 5.50% 6.12% 7.16%
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.
$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)
TOTAL RETURN COMPONENTS
YEARS ENDED NOVEMBER 30,
1997 1996 1995 1994 1993
DIVIDEND RETURN 4.74% 4.88% 5.34% 4.44% 5.41%
CAPITAL APPRECIATION 1.74% 0.48% 10.10% -9.87% 2.60%
RETURN
TOTAL RETURN 6.48% 5.36% 15.44% -5.43% 8.01%
TOTAL RETURN COMPONENTS include both dividend returns and capital
appreciation returns. A dividend return reflects the actual dividends
paid by the class. A capital appreciation return reflects both the
amount paid by the class to shareholders as capital gain distributions
and changes in the class' share price. Both returns assume the
dividends or capital gains paid by the class are reinvested, if any.
DIVIDENDS AND YIELD
<TABLE>
<CAPTION>
<S> <C> <C> <C>
PERIODS ENDED NOVEMBER 30, 1997 PAST 1 PAST 6 PAST 1
MONTH MONTHS YEAR
DIVIDENDS PER SHARE 3.83(CENTS) 23.68(CENTS) 47.52(CENTS)
ANNUALIZED DIVIDEND RATE 4.41% 4.49% 4.57%
30-DAY ANNUALIZED YIELD 3.98% - -
30-DAY ANNUALIZED TAX-EQUIVALENT YIELD 6.22% - -
</TABLE>
DIVIDENDS per share show the income paid by the class for a set
period. If you annualize this number, based on an average net asset
value of $10.56 over the past one month, $10.51 over the past six
months and $10.40 over the past one year, you can compare the class'
income over these three periods. The 30-day annualized YIELD is a
standard formula for all funds based on the yields of the bonds in the
fund, averaged over the past 30 days. This figure shows you the yield
characteristics of the fund's investments at the end of the period. It
also helps you compare funds from different companies on an equal
basis. The tax- equivalent yield shows what you would have to earn on
a taxable investment to equal the class' tax-free yield, if you're in
the 36% federal tax bracket, but does not reflect payment of the
federal alternative minimum tax, if applicable. If Fidelity had not
reimbursed certain class expenses, the yield and tax-equivalent yield
would have been 3.96% and 6.19%, respectively.
FUND TALK: THE MANAGER'S OVERVIEW
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 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 AS STATED ON
THE COVER. 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, MORE 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.
FUND FACTS
GOAL: TO SEEK THE HIGHEST LEVEL
OF INCOME EXEMPT FROM FEDERAL
INCOME TAXES THAT CAN BE
OBTAINED CONSISTENT WITH THE
PRESERVATION OF CAPITAL
START DATE: SEPTEMBER 19, 1985
SIZE: AS OF NOVEMBER 30,
1997, MORE THAN $63 MILLION
MANAGER: DAVID MURPHY,
SINCE 1995; JOINED FIDELITY
IN 1989
(CHECKMARK)
INVESTMENT CHANGES
TOP FIVE STATES AS OF NOVEMBER 30, 1997
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE STATES
6 MONTHS AGO
CALIFORNIA 15.9 18.5
NEW YORK 11.1 12.4
MASSACHUSETTS 7.6 7.3
TEXAS 6.7 6.1
NEW MEXICO 5.7 5.5
TOP FIVE SECTORS AS OF NOVEMBER 30, 1997
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE SECTORS
6 MONTHS AGO
GENERAL OBLIGATION 28.9 29.8
EDUCATION 20.3 19.9
ELECTRIC REVENUE 16.7 13.7
HEALTH CARE 6.9 7.8
TRANSPORTATION 6.2 5.1
AVERAGE YEARS TO MATURITY AS OF NOVEMBER 30, 1997
6 MONTHS AGO
YEARS 7.6 7.8
AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY
DOLLAR AMOUNT.
DURATION AS OF NOVEMBER 30, 1997
6 MONTHS AGO
YEARS 5.6 5.7
DURATION SHOWS HOW MUCH A BOND FUND'S PRICE FLUCTUATES WITH CHANGES IN
COMPARABLE INTEREST RATES. IF RATES RISE 1%, FOR EXAMPLE, A FUND WITH
A FIVE-YEAR DURATION IS LIKELY TO LOSE ABOUT 5% OF ITS VALUE. OTHER
FACTORS ALSO CAN INFLUENCE A BOND FUND'S PERFORMANCE AND SHARE PRICE.
ACCORDINGLY, A BOND FUND'S ACTUAL PERFORMANCE MAY DIFFER FROM THIS
EXAMPLE.
QUALITY DIVERSIFICATION (MOODY'S RATINGS)
AS OF NOVEMBER 30, 1997 AS OF MAY 31, 1997
AAA 44.3%
AA, A 35.5%
BAA 16.2%
SHORT-TERM
INVESTMENTS 4.0%
AAA 38.8%
AA, A 39.1%
BAA 17.2%
SHORT-TERM
INVESTMENTS 4.9%
ROW: 1, COL: 1, VALUE: 4.0
ROW: 1, COL: 2, VALUE: 16.2
ROW: 1, COL: 3, VALUE: 35.5
ROW: 1, COL: 4, VALUE: 44.3
ROW: 1, COL: 1, VALUE: 4.9
ROW: 1, COL: 2, VALUE: 17.2
ROW: 1, COL: 3, VALUE: 39.1
ROW: 1, COL: 4, VALUE: 38.8
WHERE MOODY'S RATINGS ARE NOT AVAILABLE, WE HAVE USED S&P RATINGS.
AMOUNTS SHOWN ARE AS A PERCENTAGE OF THE FUND'S INVESTMENTS.
INVESTMENTS NOVEMBER 30, 1997
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES
MUNICIPAL BONDS - 96.0%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
ALASKA - 3.8%
North Slope Borough Gen. Oblig. (Cap. Appreciation)
Series B, 0% 1/1/03 (MBIA Insured) $ 3,000,000 $ 2,381,250 662523RR
ARKANSAS - 1.3%
Arkansas College Savings Gen. Oblig. (Cap. Appreciation)
Series A, 0% 6/1/02 1,000,000 820,000 041039QG
CALIFORNIA - 15.9%
California Edl. Facs. Auth. Rev. Rfdg. (Chapman Univ.)
5.375% 10/1/16 (Connie Lee Insured) 225,000 225,563 130174J2
California Gen. Oblig.
6.25% 10/1/19 400,000 435,500 130627BB
California Hsg. Fin. Agcy. Rev. (Home Mtg.) Series R,
5.35% 8/1/07 (MBIA Insured) (e) 1,000,000 1,045,000 13033EYM
California Poll. Cont. Fing. Auth. Resource Recovery
Rev. (Waste Management, Inc.)
Series A, 7.15% 2/1/11 (e) 500,000 544,375 130535BD
California Pub. Wks. Board Lease Rev. Rfdg.:
(Dept. of Corrections State Prison, Monterey County
Soledad II) Series D, 5.375% 11/1/14 500,000 506,250 13068G4K
(Various California State Univ. Projs.)
Series A, 5.50% 6/1/10 1,000,000 1,056,250 13068GRE
California Rural Home Mtg. Fin. Auth. Lease Rev.
(Rural Lease Purchase) Series A,
4.45% 8/1/01 (MBIA Insured) 1,000,000 1,011,250 130574AA
Long Beach Hbr. Rev. Rfdg. Series A, 5.50% 5/15/07
(FGIC Insured) (e)(g) 250,000 262,188 542424FJ
Los Angeles Unified School Dist. Series A, 6% 7/1/11
(FGIC Insured) 250,000 277,813 544644BA
Los Angeles County Ctfs. of Prtn. (Disney Parking Proj.)
(Cap. Appreciation) 0% 9/1/04 970,000 695,975 5446633R
Sacramento Muni. Util. Dist. Elec. Rev. 1.76% 11/15/08
(FGIC Insured) (a) 1,000,000 1,023,750 7860042C
Sacramento Pwr. Auth. Cogeneration Proj. Rev.:
6% 7/1/02 1,000,000 1,057,500 78605NAE
6.50% 7/1/08 300,000 331,125 78605NAL
San Bernadino County Ctfs. of Prtn. Rfdg.
(Med. Ctr. Fing. Proj.) 5.25% 8/1/04 500,000 512,500 796815NW
West Covina Ctfs. of Prtn. (Queen of The Valley Hosp.)
6.50% 8/15/09 1,000,000 1,086,250 952358BQ
10,071,289
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
COLORADO - 1.7%
Arapaho County Cap. Impt. Tr. Fed. Hwy. Rev.
(Cap. Appreciation) Series C, 0% 8/31/26
(Pre-Refunded to 8/31/05 @ 20.863) (f) $ 3,620,000 $ 524,900
03866ECC
Colorado Health Facs. Auth. Rev. Rfdg.
(Rocky Mountain Adventist) 6.25% 2/1/04 500,000 530,625 1964732L
1,055,525
DISTRICT OF COLUMBIA - 2.5%
District of Columbia Gen. Oblig. Rfdg. Series B-1,
5.40% 6/1/06 (AMBAC Insured) 1,000,000 1,043,750 254760ZF
District of Columbia Redev. Land Agcy. Spl. Tax Rev.
(Washington D.C. Sports Arena)
5.40% 11/1/00 500,000 509,375 254838AE
1,553,125
FLORIDA - 2.6%
Broward County Resource Recovery Rev.
(SES Broward Co. LP South Proj.) 7.95% 12/1/08 500,000 543,750
115064AE
Dade County Wtr. & Swr. Sys. Rev. 6.25%
10/1/10 (FGIC Insured) 500,000 573,750 233620DJ
Jacksonville Port Auth. Rev. Rfdg. (Port Facs.)
5.75% 11/1/09 (MBIA Insured) (e) 500,000 538,750 469466DS
1,656,250
GEORGIA - 2.7%
Georgia Gen. Oblig. Rfdg. Series A, 6.25% 3/1/06 1,000,000
1,118,750 373382QE
Monroe County Dev. Auth. Poll. Cont. Rev. Rfdg.
(Oglethorpe Pwr. Scherer Corp.)
Series A, 6.60% 1/1/07 500,000 566,875 610530BX
1,685,625
HAWAII - 0.4%
Honolulu Hawaii City and County Rfdg.
Series C, 5.50% 11/1/04 (FGIC Insured) 250,000 264,688 438669YX
ILLINOIS - 4.0%
Chicago Midway Arpt. Rev. Series B,
6% 1/1/09 (MBIA Insured) (e) 300,000 321,750 167562BU
Illinois Health Facs. Auth. Rev. Rfdg.
(Felician Health Care, Inc.) Series A,
6.85% 1/1/00 (AMBAC Insured) 1,000,000 1,050,000 45201HZC
Metropolitan Pier & Exposition Auth. Dedicated Tax Rev.
(McCormick Place Expansion Proj.) (Cap. Appreciation):
Series A, 0% 6/15/09 (FGIC Insured) 500,000 281,875 592247CQ
0% 6/15/00 (AMBAC Insured) 1,000,000 895,000 592247BU
2,548,625
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
IOWA - 1.7%
Iowa Student Loan Liquidity Corp. Student Loan Rev.
Series A, 6.35% 3/1/01 $ 1,000,000 $ 1,052,500 462590BT
LOUISIANA - 1.4%
Louisiana Pub. Facs. Auth. Rev. Rfdg. (Student Loan)
Sr. Series A-1, 6.20% 3/1/01 830,000 870,463 54640AJY
MASSACHUSETTS - 7.6%
Boston Rev. (Boston City Hosp.) Series A,
7.625% 2/15/21 (FHA Guaranteed)
(Pre-Refunded to 8/15/00 @ 102) (f) 250,000 276,563 101026AP
Massachusetts Gen. Oblig. Rfdg.
Series A, 5.50% 2/1/11 250,000 255,932 5758234S
Massachusetts Health & Edl. Facs. Auth. Rev. Rfdg.
(Fairview Extended Care) Series B, 4.55% 7/15/02
(MBIA Insured) LOC Bank Boston, N.A. 400,000 400,000 57585JRR
Massachusetts Ind. Fin. Agcy. Rev. (Cap. Appreciation)
(Massachusetts Biomedical Research)
Series A-1, 0% 8/1/02 1,600,000 1,292,000 575914DY
Massachusetts Tpk. Auth. Western Tpk. Rev. Series A,
5.55% 1/1/17 (MBIA Insured) 600,000 610,962 57604EAA
New England Ed. Loan Marketing Corp. Student Loan
Rev. Rfdg. Series B, 5.40% 6/1/00 1,950,000 1,998,750 643898BG
4,834,207
MINNESOTA - 2.1%
Minnesota Gen. Oblig. 6% 5/1/06 1,000,000 1,103,750 604128XY
Minnesota Higher Ed. Facs. Auth. Rev.
(Macalester College) Series 4-C,
5.50% 3/1/12 200,000 206,750 604151UN
1,310,500
NEW JERSEY - 1.8%
New Jersey Econ. Dev. Auth. Market Transition Facs.
Rev. (Sr. Lien) Series A, 7% 7/1/04 (MBIA Insured) 1,000,000
1,142,500 645910AH
NEW MEXICO - 5.7%
Albuquerque Arpt. Rev. Rfdg. 6.75% 7/1/09
(AMBAC Insured) (e) 450,000 519,750 013538EU
New Mexico Edl. Assistance Foundation Student Loan
Rev. Sr. Series IV-A2, 6.65% 3/1/07 2,300,000 2,501,250 647111DH
Rio Rancho Wtr. & Wastewtr. Sys. Rev.
Series A, 8% 5/15/04 (FSA Insured) 500,000 596,875 767175AH
3,617,875
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
NEW YORK - 11.1%
Metropolitan Trans. Auth. Svc. Contract Rfdg. (Transit Facs.)
Series 5, 6.90% 7/1/05 $ 1,000,000 $ 1,092,500 592597WF
New York City Gen. Oblig. Series G, 5.40% 2/1/01 2,000,000
2,060,000 649664HN
New York City Muni. Assistance Corp. Rfdg.
Series E, 6% 7/1/04 500,000 543,125 626190G5
New York State Dorm. Auth. Rev.
(City Univ. Sys. Consolidated):
Series A, 5.75% 7/1/13 500,000 526,250 649834HV
Series C, 7.50% 7/1/10 500,000 606,250 649832DG
(State Univ. Edl. Facs.)
Series A, 6.50% 5/15/04 500,000 553,750 649835LU
New York State Local Gov't. Assistance Corp.
(Cap. Appreciation) Series A, 0% 4/1/08 1,000,000 601,250
649876AW
New York State Thruway Auth. Hwy. & Bridge Trust Fund
Series A, 5.80% 4/1/09 500,000 530,625 650013AQ
New York State Urban Dev. Corp. Rev.
Series A, 5.50% 4/1/10 (MBIA Insured) 500,000 520,625 650034AX
7,034,375
NORTH CAROLINA - 3.3%
North Carolina Eastern Muni. Pwr. Agcy. Pwr. Sys. Rev.:
Rfdg.:
Series B, 6% 1/1/06 1,000,000 1,067,500 658196NS
Series C, 5.50% 1/1/07 200,000 206,000 658196TB
Series A, 5.625% 1/1/03 500,000 518,750 658196NM
North Carolina Muni. Pwr. Agcy. Rfdg..
(Catawba Elec.) 5.90% 1/1/03 250,000 263,125 658203QC
2,055,375
OHIO - 1.2%
Ohio Bldg. Auth. State Facs. (Adult Correctional)
Series A, 5.95% 10/1/14 (MBIA Insured) 500,000 522,500 67755AJY
Ohio Tpk. Commission Tpk. Rev. Series A, 5.60%
2/15/12 (MBIA Insured) 250,000 259,063 67760HBP
781,563
PENNSYLVANIA - 3.9%
Pennsylvania Higher Edl. Facs. Auth. College & Univ.
Rev. Rfdg. (RIDC Reg'l. Growth - Carnegie Mellon
Univ. Proj.) 6% 11/1/04 1,270,000 1,395,413 709171H4
Pennsylvania Hsg. Fin. Agcy. Rfdg. (Residential Dev.)
Series A, 7% 7/1/01 1,000,000 1,077,500 708791ZL
2,472,913
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
RHODE ISLAND - 1.7%
Rhode Island Student Loan Auth. Student Loan Rev. Rfdg.
Series A, 6.55% 12/1/00 $ 1,000,000 $ 1,066,250 762315AQ
SOUTH CAROLINA - 3.7%
South Carolina Ed. Assistance Auth. Rev. Rfdg.
(Guaranteed Student Loan):
Series A-2, 5.40% 9/1/02 1,250,000 1,306,250 837114FC
Series B, 5.70% 9/1/05 (e) 1,000,000 1,050,000 837114FR
2,356,250
TENNESSEE - 0.5%
Memphis-Shelby County Arpt. Auth. Arpt. Rev. Rfdg.
Series A, 6% 2/15/07 (MBIA Insured) (e) 265,000 288,519 586111EH
TEXAS - 6.7%
Hurst Euless Bedford Independent School Dist. Rfdg.
(Cap. Appreciation) 0% 8/15/11
(PSF Guaranteed) 1,000,000 496,250 4478163B
Irving Texas Independent School Dist. (Cap. Appreciation)
0% 2/15/00 (PSF Guaranteed) (g) 250,000 227,813 46799QAC
North East Independent School Dist. Rfdg.
(Cap. Appreciation) Series D, 0% 2/1/00 2,065,000 1,886,894
659154YL
Port Arthur Hsg. Fin. Corp. Single Family Mtg.
Rev. Rfdg. 8.70% 3/1/12 465,000 507,431 733500BV
Texas Pub. Fin. Auth. Bldg. Rev. Rfdg. (Texas Technical
College) 6.25% 8/1/09 (MBIA Insured) 1,000,000 1,132,500 88275MDY
4,250,888
UTAH - 3.8%
Intermountain Pwr. Agcy. Pwr. Supply Rev.:
(Cap. Appreciation)
Series A, 0% 7/1/06 (MBIA Insured) 2,860,000 1,901,900 4588403Z
Rfdg.:
Series A, 6.50% 7/1/08 (AMBAC Insured) 250,000 287,188 45884AFR
Series D, 5% 7/1/21 (MBIA Insured) 200,000 193,000 45884AFE
2,382,088
WASHINGTON - 4.9%
Washington Pub. Pwr. Supply Sys.Rev.:
(Nuclear Proj. #2)
Rfdg. Series C, 7.50% 7/1/03 525,000 582,094 939828MP
5.40% 7/1/12 (b) 2,000,000 2,027,500 939828TX
(Nuclear Proj. #3)
Rfdg. Series C, 5.10% 7/1/07 500,000 514,375 939830PP
3,123,969
TOTAL MUNICIPAL BONDS
(Cost $58,387,323) 60,676,612
CASH EQUIVALENTS - 4.0%
SHARES VALUE
(NOTE 1)
Municipal Central Cash Fund (c)(d)
(Cost $2,516,501) 2,516,501 $ 2,516,501 31635A20
TOTAL INVESTMENTS IN SECURITIES - 100%
(Cost $60,903,824) $ 63,193,113
FUTURES CONTRACTS
EXPIRATION UNDERLYING FACE UNREALIZED
DATE AMOUNT AT VALUE GAIN/(LOSS)
PURCHASED
10 Municipal Bond Futures Contracts Dec. 97 $ 1,222,812 $ 16,502
THE FACE VALUE OF FUTURES PURCHASED AS A PERCENTAGE OF TOTAL
INVESTMENT IN SECURITIES - 1.9%
LEGEND
8. Debt obligation initially issued at one coupon which converts to a
higher coupon at a specified date. The rate shown is the rate at
period end.
9. A portion of the security was pledged to cover margin requirements
for futures contracts. At the period end, the value of securities
pledged amounted to $50,688.
10. Information in this report regarding holdings by state and
security types do not reflect the holdings of the Municipal Central
Cash Fund. A listing of the Municipal Central Cash Fund's holdings as
of its most recent fiscal period end is available upon request.
11. At the period end, the seven-day yield of the Municipal Central
Cash Fund was 3.86% The yield refers to the income earned by investing
in the fund over the seven-day period, expressed as an annual
percentage.
12. Private activity obligations whose interest is subject to the
federal alternative minimum tax for individuals.
13. Security collateralized by an amount sufficient to pay interest
and principal.
14. Security purchased on a delayed delivery or when-issued basis (see
Note 2 of Notes to Financial Statements).
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total
value of investment in securities, is as follows (ratings are
unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 76.5% AAA, AA, A 72.3%
Baa 14.6% BBB 14.3%
Ba 0.0% BB 0.0%
B 0.0% B 0.1%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
The percentage not rated by Moody's or S&P amounted to 0.0%.
The distribution of municipal securities by revenue source, as a
percentage of total value of investment in securities, is as follows:
General Obligation 28.9%
Education 20.3
Electric Revenue 16.7
Health Care 6.9
Transportation 6.2
Housing 5.8
Others (individually less than 5%) 15.2
TOTAL 100.0%
INCOME TAX INFORMATION
At November 30, 1997 the aggregate cost of investment securities for
income tax purposes was $60,903,824. Net unrealized appreciation
aggregated $2,289,289, of which $2,290,144 related to appreciated
investment securities and $855 related to depreciated investment
securities.
The fund hereby designates approximately $68,000 as a capital gain
dividend for the purpose of the dividend paid deduction.
At November 30, 1997, the fund was required to defer approximately
$113,000 of losses on futures contracts.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
NOVEMBER 30, 1997
ASSETS
INVESTMENT IN SECURITIES, AT VALUE (COST $60,903,824) - $ 63,193,113
SEE ACCOMPANYING SCHEDULE
INTEREST RECEIVABLE 864,602
RECEIVABLE FOR DAILY VARIATION ON FUTURES CONTRACTS 313
PREPAID EXPENSES 13,782
TOTAL ASSETS 64,071,810
LIABILITIES
PAYABLE TO CUSTODIAN BANK $ 47,694
PAYABLE FOR INVESTMENTS PURCHASED 491,209
DELAYED DELIVERY
PAYABLE FOR FUND SHARES REDEEMED 61,659
DISTRIBUTIONS PAYABLE 73,338
DISTRIBUTION FEES PAYABLE 14,440
ACCRUED MANAGEMENT FEE 18,402
OTHER PAYABLES AND ACCRUED EXPENSES 66,675
TOTAL LIABILITIES 773,417
NET ASSETS $ 63,298,393
NET ASSETS CONSIST OF:
PAID IN CAPITAL $ 60,935,835
ACCUMULATED UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON 56,767
INVESTMENTS
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS 2,305,791
NET ASSETS $ 63,298,393
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
NOVEMBER 30, 1997
CALCULATION OF MAXIMUM OFFERING PRICE $10.60
CLASS A:
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
($441,602 (DIVIDED BY) 41,679 SHARES)
MAXIMUM OFFERING PRICE PER SHARE (100/96.25 OF $10.60) $11.01
CLASS T: $10.59
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
($48,830,052 (DIVIDED BY) 4,609,444 SHARES)
MAXIMUM OFFERING PRICE PER SHARE (100/97.25 OF $10.59) $10.89
CLASS B: $10.59
NET ASSET VALUE AND OFFERING PRICE PER SHARE
($7,916,605 (DIVIDED BY) 747,589 SHARES) A
CLASS C: $10.59
NET ASSET VALUE AND OFFERING PRICE PER SHARE
($12,572 (DIVIDED BY) 1,187 SHARES) A
INSTITUTIONAL CLASS: $10.59
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER
SHARE ($6,097,562 (DIVIDED BY) 575,743 SHARES)
A REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED NOVEMBER 30, 1997
INTEREST INCOME $ 3,478,411
EXPENSES
MANAGEMENT FEE $ 255,140
TRANSFER AGENT FEES 127,011
DISTRIBUTION FEES 194,896
ACCOUNTING FEES AND EXPENSES 61,883
NON-INTERESTED TRUSTEES' COMPENSATION 180
CUSTODIAN FEES AND EXPENSES 6,548
REGISTRATION FEES 74,299
AUDIT 43,635
LEGAL 886
MISCELLANEOUS 1,700
TOTAL EXPENSES BEFORE REDUCTIONS 766,178
EXPENSE REDUCTIONS (82,120) 684,058
NET INTEREST INCOME 2,794,353
REALIZED AND UNREALIZED GAIN (LOSS)
NET REALIZED GAIN (LOSS) ON:
INVESTMENT SECURITIES 858,153
FUTURES CONTRACTS 16,876 875,029
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON:
INVESTMENT SECURITIES 175,681
FUTURES CONTRACTS 16,502 192,183
NET GAIN (LOSS) 1,067,212
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 3,861,565
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30,
1997 1996
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS $ 2,794,353 $ 3,449,493
NET INTEREST INCOME
NET REALIZED GAIN (LOSS) 875,029 684,780
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) 192,183 (712,133)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 3,861,565 3,422,140
FROM OPERATIONS
DISTRIBUTIONS TO SHAREHOLDERS (2,794,353) (3,449,493)
FROM NET INTEREST INCOME
FROM NET REALIZED GAIN (6,721) -
TOTAL DISTRIBUTIONS (2,801,074) (3,449,493)
SHARE TRANSACTIONS - NET INCREASE (DECREASE) (8,495,226) (9,402,984)
TOTAL INCREASE (DECREASE) IN NET ASSETS (7,434,735) (9,430,337)
NET ASSETS
BEGINNING OF PERIOD 70,733,128 80,163,465
END OF PERIOD $ 63,298,393 $ 70,733,128
</TABLE>
FINANCIAL HIGHLIGHTS CLASS - A
YEARS ENDED NOVEMBER 30,
1997 1996 E
SELECTED PER-SHARE DATA
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 D
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%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 442 $ 103
RATIO OF EXPENSES TO AVERAGE NET ASSETS .90% F .90% A,
F
RATIO OF NET INTEREST INCOME TO AVERAGE NET ASSETS 4.37% 4.60% A
PORTFOLIO TURNOVER RATE 18% 35%
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D 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.
E FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A
SHARES) TO NOVEMBER 30, 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 (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED NOVEMBER 30,
1997 1996 1995 1994 F 1993
SELECTED PER-SHARE DATA
NET ASSET VALUE, BEGINNING $ 10.410 $ 10.380 $ 9.400 $ 10.460 $ 11.080
OF PERIOD
INCOME FROM INVESTMENT OPERATIONS
NET INTEREST INCOME .449 .461 .451 .455 .508
NET REALIZED .181 .030 D .980 (1.040) .260
AND UNREALIZED GAIN (LOSS)
TOTAL FROM INVESTMENTOPERATIONS .630 .491 1.431 (.585) .768
LESS DISTRIBUTIONS
FROM NET INTEREST INCOME (.449) (.461) (.451) (.455) (.508)
FROM NET REALIZED GAIN (.001) - - - (.880)
IN EXCESS OF NET REALIZED GAIN - - - (.020) -
TOTAL DISTRIBUTIONS (.450) (.461) (.451) (.475) (1.388)
NET ASSET VALUE, END OF PERIOD $ 10.590 $ 10.410 $ 10.380 $ 9.400 $ 10.460
TOTAL RETURN B, C 6.21% 4.89% 15.49% (5.78)% 7.72%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $ 48,830 $ 56,729 $ 62,852 $ 57,382 $ 39,800
(000 OMITTED)
RATIO OF EXPENSES TO AVERAGE 1.00% 1.00% .94% .90% .90%
NET ASSETS E E E E E
RATIO OF NET INTEREST INCOME TO 4.32% 4.42% 4.56% 4.49% 4.76%
AVERAGE NET ASSETS
PORTFOLIO TURNOVER RATE 18% 35% 53% 53% 46%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D 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.
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 (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
F 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.
FINANCIAL HIGHLIGHTS - CLASS B
YEARS ENDED NOVEMBER 30,
1997 1996 1995 1994 D
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
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 .030 F .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)%
RATIOS AND SUPPLEMENTAL DATA
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 3.67% 3.76% 3.71% 3.74% A
NET ASSETS
PORTFOLIO TURNOVER RATE 18% 35% 53% 53%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
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 (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
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.
FINANCIAL HIGHLIGHTS - CLASS C
YEAR ENDED
NOVEMBER 30,
1997 D
SELECTED PER-SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.550
INCOME FROM INVESTMENT OPERATIONS
NET INTEREST 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%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 13
RATIO OF EXPENSES TO AVERAGE NET ASSETS 1.75% A, E
RATIO OF NET INTEREST INCOME TO AVERAGE NET ASSETS 3.33% A
PORTFOLIO TURNOVER RATE 18%
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
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 NOVEMBER 3, 1997 (COMMENCEMENT OF SALE OF CLASS C
SHARES) TO NOVEMBER 30, 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 (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
YEARS ENDED NOVEMBER 30,
1997 1996 1995 1994 E 1993
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
NET ASSET VALUE, BEGINNING OF $ 10.410 $ 10.360 $ 9.410 $ 10.460 $ 11.080
PERIOD
INCOME FROM INVESTMENT OPERATIONS
NET INTEREST INCOME .475 .487 .477 .481 .536
NET REALIZED AND .181 .050 B .950 (1.030) .260
UNREALIZED GAIN (LOSS)
TOTAL FROM INVESTMENT OPERATIONS .656 .537 1.427 (.549) .796
LESS DISTRIBUTIONS
FROM NET INTEREST INCOME (.475) (.487) (.477) (.481) (.536)
FROM NET REALIZED GAIN (.001) - - - (.880)
IN EXCESS OF NET REALIZED GAIN - - - (.020) -
TOTAL DISTRIBUTIONS (.476) (.487) (.477) (.501) (1.416)
NET ASSET VALUE, END OF PERIOD $ 10.590 $ 10.410 $ 10.360 $ 9.410 $ 10.460
TOTAL RETURN A 6.48% 5.36% 15.44% (5.43)% 8.01%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD $ 6,098 $ 6,455 $ 11,085 $ 11,702 $ 15,076
(000 OMITTED)
RATIO OF EXPENSES TO AVERAGE .75% C .75% .70% .65% .65%
NET ASSETS C C C C
RATIO OF EXPENSES TO AVERAGE NET .75% .74% .70% .65% .65%
ASSETS AFTER EXPENSE REDUCTIONS D
RATIO OF NET INTEREST INCOME TO 4.57% 4.68% 4.96% 4.75% 5.01%
AVERAGE NET ASSETS
PORTFOLIO TURNOVER RATE 18% 35% 53% 53% 46%
</TABLE>
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
B 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.
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 (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
D FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
E 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.
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1997
10. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Intermediate Municipal Income Fund(the fund) is a
fund of Fidelity Advisor Series VI(the trust) and is authorized to
issue an unlimited number of shares. The trust is registered under the
Investment Company Act of 1940, as amended (the 1940 Act), as an
open-end management investment company organized as a Massachusetts
business trust.
The fund offers Class A, Class T, Class B, Class C, and Institutional
Class shares, each of which has equal rights as to assets and voting
privileges. Each class has exclusive voting rights with respect to its
distribution plan. The fund commenced sale of Class C shares on
November 3, 1997. Interest income, realized and unrealized capital
gains and losses, the common expenses of the fund, and certain
fund-level expense reductions, if any, are allocated on a pro rata
basis to each class based on the relative net assets of each class to
the total net assets of the fund. Each class of shares differs in its
respective distribution, transfer agent, registration, and certain
other class-specific fees, expenses, and expense reductions.
The financial statements have been prepared in conformity with
generally accepted accounting principles which permit management to
make certain estimates and assumptions at the date of the financial
statements. The following summarizes the significant accounting
policies of the fund:
SECURITY VALUATION. Securities are valued based upon a computerized
matrix system and/ or appraisals by a pricing service, both of which
consider market transactions and dealer-supplied valuations.
Securities for which quotations are not readily available are valued
at their fair value as determined in good faith under consistently
applied procedures under the general supervision of the Board of
Trustees. Short-term securities with remaining maturities of sixty
days or less for which quotations are not readily available are valued
at amortized cost or original cost plus accrued interest, both of
which approximate current value.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent that it distributes substantially all of
its taxable income for its fiscal year. The schedule of investments
includes information regarding income taxes under the caption "Income
Tax Information."
INTEREST INCOME. Interest income, which includes amortization of
premium and accretion of original issue discount, is accrued as
earned.
EXPENSES. Most expenses of the, trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
between the funds in the trust.
PREPAID EXPENSES. Fidelity Management & Research Company (FMR) bears
all organizational expenses except for registering and qualifying
Class C and shares of Class C for distribution under federal and state
securities law. These expenses are borne by Class C and amortized over
one year.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are declared daily and
paid monthly from net interest income. Distributions from realized
gains, if any, are recorded on the ex-dividend date. Income dividends
and capital gain distributions are declared separately for each class.
Income and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. These differences, which may result in
distribution reclassifications, are primarily due to differing
treatments for futures transactions, capital loss carryforwards and
losses deferred due to futures. The fund also utilized earnings and
profits distributed to shareholders on redemption of shares as a part
of the dividends paid deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and
may affect the per-share allocation between net interest income and
realized and unrealized gain (loss). Accumulated undistributed net
realized gain (loss) on investments may include temporary book and tax
basis differences that will reverse in a subsequent period. Any
taxable income or gain remaining at fiscal year end is distributed in
the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
11. OPERATING POLICIES.
MUNICIPAL CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by
the Securities and Exchange Commission, the fund may invest in the
Municipal Central Cash Fund (the Cash Fund) managed by FMR Texas Inc.,
an affiliate of (FMR). The Cash Fund is an open-end money market fund
available only to investment companies and other accounts managed by
FMR and its affiliates. The Cash Fund seeks preservation of capital,
liquidity, and current income by investing in high-quality, short-term
municipal securities of various states and municipalities. Income
distributions from the Cash Fund are declared daily and paid monthly
from net interest income. Income distributions received by the fund
are recorded as interest income in the accompanying financial
statements.
WHEN-ISSUED SECURITIES. The fund may purchase or sell securities on a
when-issued basis. Payment and delivery may take place a month or more
after the date of the transaction. The price of the underlying
securities is fixed at the time the transaction is negotiated. The
market values of the securities purchased on a when-issued or forward
commitment basis are identified as such in the fund's schedule of
investments. The fund may receive compensation for interest forgone in
the purchase of a when-issued security. With respect to purchase
commitments, the fund identifies securities as segregated in its
custodial records with a value at least equal to the amount of the
commitment. The payables and receivables
2. OPERATING POLICIES - CONTINUED
WHEN-ISSUED SECURITIES - CONTINUED
associated with the purchases and sales of when-issued securities
having the same settlement date and broker are offset. When-issued
securities that have been purchased from and sold to different brokers
are reflected as both payables and receivables in the statement of
assets and liabilities under the caption "Delayed delivery." Losses
may arise due to changes in the market value of the underlying
securities, if the counterparty does not perform under the contract,
or if the issuer does not issue the securities due to political,
economic, or other factors.
FUTURES CONTRACTS. The fund may use futures contracts to manage its
exposure to the bond market and to fluctuations in interest rates .
Buying futures tends to increase the fund's exposure to the underlying
instrument, while selling futures tends to decrease the fund's
exposure to the underlying instrument or hedge other fund investments.
Futures contracts involve, to varying degrees, risk of loss in excess
of the futures variation margin reflected in the Statement of Assets
and Liabilities. The underlying face amount at value of any open
futures contracts at period end is shown in the schedule of
investments under the caption "Futures Contracts." This amount
reflects each contract's exposure to the underlying instrument at
period end. Losses may arise from changes in the value of the
underlying instruments or if the counterparties do not perform under
the contracts' terms. Gains (losses) are realized upon the expiration
or closing of the futures contracts. Futures contracts are valued at
the settlement price established each day by the board of trade or
exchange on which they are traded.
12. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $11,608,485 and $22,805,234, respectively.
The market value of futures contracts opened and closed during the
period amounted to $11,482,118 and $10,292,684, respectively.
13. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus a
fixed individual fund fee rate applied to the average net assets of
the fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds advised by FMR. The rates ranged from .1100% to .3700% for the
period. The annual individual fund fee rate is .25%. In the event that
these rates were lower than the contractual rates in effect
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
during the period, FMR voluntarily implemented the above rates, as
they resulted in the same or a lower management fee. For the period,
the management fee was equivalent to an annual rate of .39% of average
net assets .
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the
1940 Act, the Trustees have adopted separate distribution plans with
respect to each class of shares (collectively referred to as "the
Plans"). Under certain of the Plans, the class pays Fidelity
Distributors Corporation (FDC), an affiliate of FMR, a distribution
and service fee. This fee is based on the following annual rates of
the average net assets of each applicable class:
CLASS A .15%
CLASS T .25%
CLASS B .90%*
CLASS C 1.00%**
* .65% REPRESENTS A DISTRIBUTION FEE AND .25% REPRESENTS A
SHAREHOLDER SERVICE FEE.
** .75% REPRESENTS A DISTRIBUTION FEE AND .25% REPRESENTS A
SHAREHOLDER SERVICE FEE.
For the period, each class paid FDC the following amounts, a portion
of which was paid to securities dealers, banks and other financial
institutions for the distribution of each class' applicable shares,
and providing shareholder support services:
PAID TO DEALERS'
FDC PORTION
CLASS A $ 521 $ 521
CLASS T 127,082 127,082
CLASS B 67,287 18,691
CLASS C 6 -
$ 194,896 $ 146,294
Under the Plans, FMR or FDC may use its resources to pay
administrative and promotional expenses related to the sale of each
class' shares. The Plans also authorize payments to third parties that
assist in the sale of each class' shares or render shareholder support
services.
SALES LOAD. FDC receives a front-end sales charge of up to 3.75% for
selling Class A shares (3.25% prior to August 1, 1997), and 2.75% for
selling Class T shares of the fund, respectively. FDC receives the
proceeds of contingent deferred sales charges levied on Class B share
redemptions occurring within three years of purchase and Class C share
redemptions occuring within one year of purchase. Contingent deferred
sales charges are based on declining rates ranging from 3% to 1% for
Class B and 1% for Class C, of the lesser of the cost of shares at the
initial date of purchase or the net asset value of the redeemed
shares, excluding any reinvested dividends and capital gains.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
SALES LOAD - CONTINUED
For the period, FDC received the following sales charge amounts
related to each class, a portion of which is paid to securities,
dealers, banks, and other financial institutions:
PAID TO DEALERS'
FDC PORTION
CLASS A $ 5,724 $ 4,474
CLASS T 21,915 15,303
CLASS B 19,218 -*
CLASS C - -*
$ 46,857 $ 19,777
* WHEN CLASS B AND CLASS C SHARES ARE INITIALLY SOLD, FDC PAYS
COMMISSIONS FROM ITS OWN RESOURCES TO DEALERS THROUGH
WHICH THE SALES ARE MADE.
TRANSFER AGENT AND ACCOUNTING FEES. UMB Bank, n.a. (UMB) is the
custodian, transfer agent, and shareholder servicing agent for the
fund's Class A, Class T, Class B, Class C,and Institutional Class
shares. UMB has entered into a sub-arrangements with Fidelity
Investments Institutional Operations Company, Inc. (FIIOC) with
respect to all classes of the fund to perform the transfer, dividend
disbursing, and shareholder servicing agent functions. FIIOC, an
affiliate of FMR, receives account fees and asset-based fees that vary
according to the account size and type of account of the shareholders
of the respective classes of the fund. All fees are paid to FIIOC by
UMB, which is reimbursed by each class for such payments. FIIOC pays
for typesetting, printing and mailing of all shareholder reports. For
the period, each class paid the following transfer agent fees:
TRANSFER AMOUNT % OF
AGENT AVERAGE
NET ASSETS
CLASS A UMB $ 1,254 .36
CLASS T UMB 99,245 .20
CLASS B UMB 14,216 .19
CLASS C UMB 5 .64*
INSTITUTIONAL CLASS UMB 12,291 .18
$ 127,011
* ANNUALIZED
UMB also has a sub-contract with Fidelity Service Company, Inc. (FSC),
an affiliate of FMR, under which FSC maintains the fund's accounting
records. The fee is based on the level of average net assets for the
month plus out-of-pocket expenses.
14. EXPENSE REDUCTIONS.
FMR voluntarily agreed to reimburse operating expenses (excluding
interest, taxes, brokerage commissions and extraordinary expenses)
above the following annual rates or range of annual rates of average
net assets for each of the following classes:
FMR REIMBURSEMENT
EXPENSE
LIMITATIONS
CLASS A .90% $ 29,398
CLASS T 1.00% 19,986
CLASS B 1.65% 15,147
CLASS C 1.75% 1,250
INSTITUTIONAL CLASS .75% 14,954
$ 80,735
In addition, the fund has entered into an arrangement with each class'
transfer agent whereby credits realized as a result of uninvested cash
balances were used to reduce a portion of expenses. During the period,
Class T expenses were reduced as follows under the transfer agent
arrangement.
TRANSFER
AGENT
INTEREST CREDITS
CLASS T $ 1,385
15. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
YEAR ENDED NOVEMBER 30,
1997 B 1996 A
CLASS A
FROM NET INTEREST INCOME $ 15,189 $ 1,046
FROM NET REALIZED GAIN 24 -
TOTAL $ 15,213 $ 1,046
CLASS T
FROM NET INTEREST INCOME $ 2,195,690 $ 2,699,983
FROM NET REALIZED GAIN 5,310 -
TOTAL $ 2,201,000 $ 2,699,983
CLASS B
FROM NET INTEREST INCOME $ 274,703 $ 269,283
FROM NET REALIZED GAIN 767 -
TOTAL $ 275,470 $ 269,283
CLASS C
FROM NET INTEREST INCOME $ 26 $ -
FROM NET REALIZED GAIN - -
TOTAL $ 26 $ -
INSTITUTIONAL CLASS
FROM NET INTEREST INCOME $ 308,745 $ 479,181
FROM NET REALIZED GAIN 620 -
TOTAL $ 309,365 $ 479,181
$ 2,801,074 $ 3,449,493
A DISTRIBUTIONS FOR CLASS A ARE FOR THE PERIOD SEPTEMBER 3, 1996
(COMMENCEMENT OF SALE OF SHARES) TO NOVEMBER 30, 1996.
B DISTRIBUTIONS FOR CLASS C ARE FOR THE PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO NOVEMBER 30, 1997.
16. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:
SHARES DOLLARS
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1997 B 1996 A 1997 B 1996 A
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CLASS A 37,401 9,815 $ 388,486 $ 99,788
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 1,437 108 14,999 1,046
SHARES REDEEMED (7,082) - (74,532) -
NET INCREASE (DECREASE) 31,756 9,923 $ 328,953 $ 100,834
CLASS T 1,237,934 2,035,422 $ 12,868,543 $ 20,912,410
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 150,942 189,811 1,571,556 1,947,724
SHARES REDEEMED (2,228,549) (2,833,821) (23,132,793) (28,990,305)
NET INCREASE (DECREASE) (839,673) (608,588) $ (8,692,694) $ (6,130,171)
CLASS B 162,293 326,024 $ 1,686,065 $ 3,345,475
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 17,600 17,066 183,295 175,043
SHARES REDEEMED (147,606) (227,839) (1,530,078) (2,324,198)
NET INCREASE (DECREASE) 32,287 115,251 $ 339,282 $ 1,196,320
CLASS C 1,185 - $ 12,505 $ -
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 2 - 25 -
SHARES REDEEMED - - - -
NET INCREASE (DECREASE) 1,187 - $ 12,530 $ -
INSTITUTIONAL CLASS 221,521 476,090 $ 2,293,637 $ 4,887,410
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 5,385 6,443 55,968 66,083
SHARES REDEEMED (271,323) (932,023) (2,832,902) (9,523,460)
NET INCREASE (DECREASE) (44,417) (449,490) $ (483,297) $ (4,569,967)
</TABLE>
A SHARE TRANSACTIONS FOR CLASS A ARE FOR THE PERIOD SEPTEMBER 3, 1996
(COMMENCEMENT OF SALE OF SHARES) TO NOVEMBER 30, 1996.
B SHARE TRANSACTIONS FOR CLASS C ARE FOR THE PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO NOVEMBER 30, 1997.
17. REGISTRATION FEES.
For the period, each class paid the following amounts to register its
shares for sale:
REGISTRATION
FEES
CLASS A $ 28,753
CLASS T 14,768
CLASS B 14,527
CLASS C 1,253
INSTITUTIONAL CLASS 14,998
$ 74,299
18. PROPOSED REORGANIZATION.
The Board of Trustees of Fidelity Advisor Intermediate Municipal
Income Fund has approved an Agreement and Plan of Reorganization
("Agreement") between the fund and Fidelity Advisor Short-Intermediate
Municipal Income Fund ("Reorganization"). 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 in exchange solely for the number of shares of Class A, Class T,
and Institutional Class of the fund having the same relative net asset
value as the outstanding shares of Class A, Class T, and Institutional
Class of Fidelity Advisor Short-Intermediate Municipal Income Fund as
of the close of business of the New York Stock Exchange, on the day
that the Reorganization is effective. The Reorganization can be
consummated only if, among other things, it is approved by the vote of
a majority (as defined by the 1940 Act) of outstanding voting
securities of Fidelity Advisor Short-Intermediate Municipal Income
Fund. A Special Meeting of Shareholders ("Meeting") of Fidelity
Advisor Short-Intermediate Municipal Income Fund will be held on May
4, 1998 to vote on the Agreement. A detailed description of the
proposed transaction and voting information will be sent to
shareholders of Fidelity Advisor Short-Intermediate Municipal Income
Fund in March, 1998. If the Agreement is approved at the Meeting, the
Reorganization is expected to become effective on or about May 28,
1998.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Advisor Series VI and the Shareholders of
Fidelity Advisor Intermediate Municipal Income Fund:
We have audited the accompanying statement of assets and liabilities
of Fidelity Advisor Series VI: Fidelity Advisor Intermediate Municipal
Income Fund, including the schedule of portfolio investments, as of
November 30, 1997, and the related statement of operations for the
year then ended, the statement of changes in net assets for each of
the two years in the period then ended and the financial highlights of
Class A, Class B, Class C, Class T, and Institutional Class for each
of the periods indicated therein. These financial statements and
financial highlights are the responsibility of the fund's management.
Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of November 30, 1997 by
correspondence with the custodian and brokers. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of Fidelity Advisor Series VI: Fidelity Advisor
Intermediate Municipal Income Fund as of November 30, 1997, the
results of its operations for the year then ended, the changes in its
net assets for each of the two years in the period then ended, and the
financial highlights of Class A, Class B, Class C, Class T, and
Institutional Class for each of the periods indicated therein, in
conformity with generally accepted accounting principles.
/s/COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
January 16, 1998
DISTRIBUTIONS
The Board of Trustees of Fidelity Advisor Intermediate Municipal
Income fund voted to pay to shareholders of record at the opening of
business on record date, the following distributions derived from
capital gains realized from sales of portfolio securities, and
dividends derived from net investment income:
PAY DATE RECORD DATE DIVIDENDS CAPITAL GAINS
Institutional Class 12/29/97 12/26/97 $__ $.03
The fund will notify shareholders in January 1998 of these percentages
for use in preparing 1997 income tax returns.
During fiscal year ended 1997, 100% of the fund's income dividends was
free from federal income tax, and 8.72% of the fund's income dividends
was subject to the federal alternative minimum tax.
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Fred L. Henning, Jr., Vice President
David L. Murphy, Vice President
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
Thomas J. Simpson, Assistant Treasurer
Thomas D. Maher, Assistant Vice President
Dwight D. Churchill, Vice President
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
ADVISORY BOARD
J. Gary Burkhead
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
UMB Bank, n.a.
Kansas City, MO
Fidelity Investments Institutional Operations Company, Inc.
Boston, MA
CUSTODIAN
UMB Bank, n.a.
Kansas City, MO
FOCUS FUNDS
Fidelity Advisor Consumer
Industries Fund
Fidelity Advisor Cyclical
Industries Fund
Fidelity Advisor Financial
Services Fund
Fidelity Advisor Health Care Fund
Fidelity Advisor Natural
Resources Fund
Fidelity Advisor Technology Fund
Fidelity Advisor Utilities Growth Fund
GROWTH FUNDS
Fidelity Advisor International Capital Appreciation Fund
Fidelity Advisor Overseas Fund
Fidelity Advisor TechnoQuant
Growth Fund
SM
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 Emerging Markets Income Fund
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
Fidelity Advisor Intermediate Municipal Income Fund
Fidelity Advisor Short-Intermediate Municipal Income Fund
MONEY MARKET FUNDS
Prime Fund
Treasury Fund
Tax-Exempt Fund
(registered trademark)
(2_FIDELITY_LOGOS)FIDELITY ADVISOR
(REGISTERED TRADEMARK)
INTERMEDIATE MUNICIPAL INCOME FUND - CLASS A, CLASS T, CLASS B
AND CLASS C
FUND - CLASS A AND CLASS T
ANNUAL REPORT
NOVEMBER 30, 1997
CONTENTS
PRESIDENT'S MESSAGE 3 NED JOHNSON ON INVESTING STRATEGIES.
PERFORMANCE 4 HOW THE FUND HAS DONE OVER TIME.
FUND TALK 11 THE MANAGER'S REVIEW OF FUND
PERFORMANCE, STRATEGY AND OUTLOOK.
INVESTMENT CHANGES 14 A SUMMARY OF MAJOR SHIFTS IN THE FUND'S
INVESTMENTS OVER THE PAST SIX MONTHS.
INVESTMENTS 15 A COMPLETE LIST OF THE FUND'S INVESTMENTS
WITH THEIR MARKET VALUES.
FINANCIAL STATEMENTS 19 STATEMENTS OF ASSETS AND LIABILITIES,
OPERATIONS, AND CHANGES IN NET ASSETS,
AS WELL AS FINANCIAL HIGHLIGHTS.
NOTES 26 NOTES TO THE FINANCIAL STATEMENTS.
REPORT OF INDEPENDENT 33 THE AUDITORS' OPINION.
ACCOUNTANTS
DISTRIBUTIONS 34
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION
OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS
IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
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.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY ADVISOR FUND, INCLUDING CHARGES
AND EXPENSES, CONTACT YOUR
INVESTMENT PROFESSIONAL FOR A FREE PROSPECTUS. READ IT CAREFULLY
BEFORE YOU INVEST OR SEND MONEY.
PRESIDENT'S MESSAGE
(PHOTO_OF_EDWARD_C_JOHNSON_3D)DEAR SHAREHOLDER:
Although financial turmoil in Pacific Basin countries was a catalyst
for significant volatility in U.S. markets in late October and into
November, the Standard & Poor's 500 Index has risen more than 31%
year-to-date, almost three times its historical annual average.
Meanwhile, bond markets - primarily influenced by a relatively steady
flow of positive news on the inflation front - continued to post solid
returns through the first 11 months of 1997.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
The longer your investment time frame, the less likely it is that you
will be affected by short-term market volatility. A 10-year investment
horizon appropriate for saving for a college education, for example,
enables you to weather market cycles in a long-term fund, which may
have a higher risk potential, but also has a higher potential rate of
return.
An intermediate-length fund could make sense if your investment
horizon is two to four years, while a short-term bond fund could be
the right choice if you need your money in one or two years.
If your time horizon is less than a year, you might want to consider
moving some of your bond investment into a money market fund. These
funds seek income and a stable share price by investing in
high-quality, short-term investments. Of course, it's important to
remember that there is no assurance that a money market fund will
achieve its goal of maintaining a stable net asset value of $1.00 per
share, and that these types of funds are neither insured nor
guaranteed by any agency of the U.S. government.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases.
Remember to contact your investment professional if you need help with
your investments.
Best regards,
Edward C. Johnson 3d
ADVISOR SHORT-INTERMEDIATE MUNICIPAL INCOME FUND - CLASS A
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can
look at the total percentage change in value, the average annual
percentage change or the growth of a hypothetical $10,000 investment.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). You can also look at the class' income, as reflected in its
yield, to measure performance. 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 prior to
September 3, 1996 are those of Class T, the original class of the
fund, and reflect Class T's 0.15% 12b-1 fee. If Fidelity had not
reimbursed certain class expenses, the total returns and dividends
would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1997 PAST 1 LIFE OF
YEAR FUND
ADVISOR SHORT-INTERMEDIATE MUNICIPAL INCOME FUND - 4.28% 19.03%
CLASS A
ADVISOR SHORT-INTERMEDIATE MUNICIPAL INCOME FUND - 2.72% 17.25%
CLASS A (INCL. MAX. 1.50% SALES CHARGE)
LEHMAN BROTHERS 1-5 YEAR MUNICIPAL BOND INDEX 4.83% N/A
SHORT-INTERMEDIATE MUNICIPAL DEBT FUNDS AVERAGE 4.39% N/A
CUMULATIVE TOTAL RETURNS show Class A's performance in percentage
terms over a set period - in this case, one year, and since the fund
started on March 16, 1994. For example, if you had invested $1,000 in
a fund that had a 5% return over the past year, the value of your
investment would be $1,050. You can compare Class A's returns to the
performance of the Lehman Brothers 1-5 Year Municipal Bond Index - a
total return benchmark for investment-grade municipal bonds with
maturities between one and five years. To measure how Class A's
performance stacked up against its peers, you can compare it to the
short-intermediate municipal debt funds average, which reflects the
performance of mutual funds with similar objectives tracked by Lipper
Analytical Services, Inc. The past one year average represents a peer
group of 33 mutual funds. These benchmarks include reinvested
dividends and capital gains, if any, and exclude the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1997 PAST 1 LIFE OF
YEAR FUND
ADVISOR SHORT-INTERMEDIATE MUNICIPAL INCOME FUND - 4.28% 4.81%
CLASS A
ADVISOR SHORT-INTERMEDIATE MUNICIPAL INCOME FUND - 2.72% 4.38%
CLASS A (INCL. MAX. 1.50% SALES CHARGE)
LEHMAN BROTHERS 1-5 YEAR MUNICIPAL BOND INDEX 4.83% N/A
SHORT-INTERMEDIATE MUNICIPAL DEBT FUNDS AVERAGE 4.39% N/A
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.
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19971130 19971211 172125 S00000000000001
FA Short-Int Muni -CL A LB Municipal Bond
00264 LB015
1994/03/31 9850.00 10000.00
1994/04/30 9873.66 10084.80
1994/05/31 9890.94 10172.24
1994/06/30 9911.64 10110.08
1994/07/31 9992.26 10295.40
1994/08/31 10024.82 10331.02
1994/09/30 9997.13 10179.36
1994/10/31 9962.73 9998.58
1994/11/30 9898.29 9817.80
1994/12/31 9995.49 10033.89
1995/01/31 10133.68 10320.66
1995/02/28 10239.13 10620.79
1995/03/31 10309.05 10742.82
1995/04/30 10326.92 10755.50
1995/05/31 10469.99 11098.70
1995/06/30 10466.31 11002.15
1995/07/31 10556.16 11106.45
1995/08/31 10656.08 11247.28
1995/09/30 10692.36 11318.47
1995/10/31 10759.99 11483.04
1995/11/30 10826.60 11673.55
1995/12/31 10863.04 11785.73
1996/01/31 10942.04 11874.71
1996/02/29 10944.42 11794.56
1996/03/31 10894.93 11643.82
1996/04/30 10897.90 11610.87
1996/05/31 10902.74 11606.22
1996/06/30 10960.22 11732.62
1996/07/31 11018.60 11839.38
1996/08/31 11033.85 11836.54
1996/09/30 11092.02 12002.25
1996/10/31 11164.36 12138.00
1996/11/30 11267.64 12360.12
1996/12/31 11249.86 12308.21
1997/01/31 11287.91 12331.47
1997/02/28 11356.16 12444.68
1997/03/31 11283.49 12278.79
1997/04/30 11331.76 12381.56
1997/05/31 11416.10 12567.78
1997/06/30 11477.55 12701.63
1997/07/31 11630.72 13053.46
1997/08/31 11601.32 12931.15
1997/09/30 11673.29 13084.65
1997/10/31 11712.09 13168.78
1997/11/28 11749.86 13246.21
IMATRL PRASUN SHR__CHT 19971130 19971211 172128 R00000000000047
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Short-Intermediate Municipal Income Fund
- - Class A on March 31, 1994, shortly after the fund started, and the
current maximum 1.50% sales charge was paid. As the chart shows, by
November 30, 1997, the value of the investment would have grown to
$11,750 - a 17.50% increase on the initial investment. For comparison,
look at how the Lehman Brothers Municipal Bond Index - a total return
performance benchmark for investment-grade municipal bonds with
maturities of at least one year - did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $13,246 - a 32.46% 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)
TOTAL RETURN COMPONENTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MARCH 16, 1994
(COMMENCEMENT
OF OPERATIONS) TO
NOVEMBER 30,
1994
YEARS ENDED NOVEMBER 30,
1997 1996 1995
</TABLE>
DIVIDEND RETURN 4.08% 4.04% 4.57% 2.57%
CAPITAL APPRECIATION 0.20% 0.00% 4.81% -2.30%
RETURN
TOTAL RETURN 4.28% 4.04% 9.38% 0.27%
TOTAL RETURN COMPONENTS include both dividend returns and capital
appreciation returns. A dividend return reflects the actual dividends
paid by the class. A capital appreciation return reflects both the
amount paid by the class to shareholders as capital gain distributions
and changes in the class' share price. Both returns assume the
dividends or capital gains paid by the class are reinvested, if any,
and exclude the effect of sales charges.
DIVIDENDS AND YIELD
<TABLE>
<CAPTION>
<S> <C> <C> <C>
PERIODS ENDED NOVEMBER 30, 1997 PAST 1 PAST 6 PAST 1
MONTH MONTHS YEAR
DIVIDENDS PER SHARE 3.29(CENTS) 20.36(CENTS) 40.60(CENTS)
ANNUALIZED DIVIDEND RATE 3.93% 3.99% 4.00%
30-DAY ANNUALIZED YIELD 3.47% - -
30-DAY ANNUALIZED TAX-EQUIVALENT YIELD 5.42% - -
</TABLE>
DIVIDENDS per share show the income paid by the class for a set
period. If you annualize this number, based on an average net asset
value of $10.19 over the past one month, $10.18 over the past six
months and $10.15 over the past one year, you can compare the class'
income over these three periods. The 30-day annualized YIELD is a
standard formula for all funds based on the yields of the bonds in the
fund, averaged over the past 30 days. This figure shows you the yield
characteristics of the fund's investments at the end of the period.
The offering share price used in the calculation of the yield includes
the effect of Class A's maximum 1.50% sales charge. The tax-equivalent
yield shows what you would have to earn on a taxable investment to
equal the class' tax-free yield, if you're in the 36% federal tax
bracket, but does not reflect payment of the federal alternative
minimum tax, if applicable. If Fidelity had not reimbursed certain
class expenses, the yield and tax-equivalent yield would have been
3.22% and 5.03%, respectively.
ADVISOR SHORT-INTERMEDIATE MUNICIPAL INCOME FUND - CLASS T
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can
look at the total percentage change in value, the average annual
percentage change or the growth of a hypothetical $10,000 investment.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). You can also look at the class' income, as reflected in its
yield, to measure performance. If Fidelity had not reimbursed certain
class expenses, the total returns and dividends would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1997 PAST 1 LIFE OF
YEAR FUND
ADVISOR SHORT-INTERMEDIATE MUNICIPAL INCOME FUND - 4.37% 19.12%
CLASS T
ADVISOR SHORT-INTERMEDIATE MUNICIPAL INCOME FUND - 2.81% 17.33%
CLASS T (INCL. MAX. 1.50% SALES CHARGE)
LEHMAN BROTHERS 1-5 YEAR MUNICIPAL BOND INDEX 4.83% N/A
SHORT-INTERMEDIATE MUNICIPAL DEBT FUNDS AVERAGE 4.39% N/A
CUMULATIVE TOTAL RETURNS show Class T's performance in percentage
terms over a set period - in this case, one year, and since the fund
started on March 16, 1994. For example, if you had invested $1,000 in
a fund that had a 5% return over the past year, the value of your
investment would be $1,050. You can compare Class T's returns to the
performance of the Lehman Brothers 1-5 Year Municipal Bond Index - a
total return benchmark for investment-grade municipal bonds with
maturities between one and five years. To measure how Class T's
performance stacked up against its peers, you can compare it to the
short-intermediate municipal debt funds average, which reflects the
performance of mutual funds with similar objectives tracked by Lipper
Analytical Services, Inc. The past one year average represents a peer
group of 33 mutual funds. These benchmarks include reinvested
dividends and capital gains, if any, and exclude the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1997 PAST 1 LIFE OF
YEAR FUND
ADVISOR SHORT-INTERMEDIATE MUNICIPAL INCOME FUND - 4.37% 4.83%
CLASS T
ADVISOR SHORT-INTERMEDIATE MUNICIPAL INCOME FUND - 2.81% 4.40%
CLASS T (INCL. MAX. 1.50% SALES CHARGE)
LEHMAN BROTHERS 1-5 YEAR MUNICIPAL BOND INDEX 4.83% N/A
SHORT-INTERMEDIATE MUNICIPAL DEBT FUNDS AVERAGE 4.39% N/A
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.
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19971130 19971211 172138 S00000000000001
FA Short-Int Muni -CL T LB Municipal Bond
00636 LB015
1994/03/31 9850.00 10000.00
1994/04/30 9873.66 10084.80
1994/05/31 9890.94 10172.24
1994/06/30 9911.64 10110.08
1994/07/31 9992.26 10295.40
1994/08/31 10024.82 10331.02
1994/09/30 9997.13 10179.36
1994/10/31 9962.73 9998.58
1994/11/30 9898.29 9817.80
1994/12/31 9995.49 10033.89
1995/01/31 10133.68 10320.66
1995/02/28 10239.13 10620.79
1995/03/31 10309.05 10742.82
1995/04/30 10326.92 10755.50
1995/05/31 10469.99 11098.70
1995/06/30 10466.31 11002.15
1995/07/31 10556.16 11106.45
1995/08/31 10656.08 11247.28
1995/09/30 10692.36 11318.47
1995/10/31 10759.99 11483.04
1995/11/30 10826.60 11673.55
1995/12/31 10863.04 11785.73
1996/01/31 10942.04 11874.71
1996/02/29 10944.42 11794.56
1996/03/31 10894.93 11643.82
1996/04/30 10897.90 11610.87
1996/05/31 10902.74 11606.22
1996/06/30 10960.22 11732.62
1996/07/31 11018.60 11839.38
1996/08/31 11033.85 11836.54
1996/09/30 11092.44 12002.25
1996/10/31 11163.59 12138.00
1996/11/30 11265.80 12360.12
1996/12/31 11258.70 12308.21
1997/01/31 11296.61 12331.47
1997/02/28 11353.66 12444.68
1997/03/31 11292.15 12278.79
1997/04/30 11340.50 12381.56
1997/05/31 11413.53 12567.78
1997/06/30 11474.62 12701.63
1997/07/31 11627.79 13053.46
1997/08/31 11598.39 12931.15
1997/09/30 11670.30 13084.65
1997/10/31 11720.52 13168.78
1997/11/28 11758.27 13246.21
IMATRL PRASUN SHR__CHT 19971130 19971211 172141 R00000000000047
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Short-Intermediate Municipal Income Fund
- - Class T on March 31, 1994, shortly after the fund started, and the
current maximum 1.50% sales charge was paid. As the chart shows, by
November 30, 1997, the value of the investment would have grown to
$11,758 - a 17.58% increase on the initial investment. For comparison,
look at how the Lehman Brothers Municipal Bond Index - a total return
performance benchmark for investment-grade municipal bonds with
maturities of at least one year - did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $13,246 - a 32.46% 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)
TOTAL RETURN COMPONENTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MARCH 16, 1994
(COMMENCEMENT
OF OPERATIONS) TO
NOVEMBER 30,
1994
YEARS ENDED NOVEMBER 30,
1997 1996 1995
</TABLE>
DIVIDEND RETURN 4.07% 4.06% 4.57% 2.57%
CAPITAL APPRECIATION 0.30% 0.00% 4.81% -2.30%
RETURN
TOTAL RETURN 4.37% 4.06% 9.38% 0.27%
TOTAL RETURN COMPONENTS include both dividend returns and capital
appreciation returns. A dividend return reflects the actual dividends
paid by the class. A capital appreciation return reflects both the
amount paid by the class to shareholders as capital gain distributions
and changes in the class' share price. Both returns assume the
dividends or capital gains paid by the class are reinvested, if any,
and exclude the effect of sales charges.
DIVIDENDS AND YIELD
<TABLE>
<CAPTION>
<S> <C> <C> <C>
PERIODS ENDED NOVEMBER 30, 1997 PAST 1 PAST 6 PAST 1
MONTH MONTHS YEAR
DIVIDENDS PER SHARE 3.29(CENTS) 20.33(CENTS) 40.52(CENTS)
ANNUALIZED DIVIDEND RATE 3.93% 3.98% 3.99%
30-DAY ANNUALIZED YIELD 3.46% - -
30-DAY ANNUALIZED TAX-EQUIVALENT YIELD 5.41% - -
</TABLE>
DIVIDENDS per share show the income paid by the class for a set
period. If you annualize this number, based on an average net asset
value of $10.19 over the past one month, $10.18 over the past six
months and $10.15 over the past one year, you can compare the class'
income over these three periods. The 30-day annualized YIELD is a
standard formula for all funds based on the yields of the bonds in the
fund, averaged over the past 30 days. This figure shows you the yield
characteristics of the fund's investments at the end of the period.
The offering share price used in the calculation of the yield includes
the effect of Class T's maximum 1.50% sales charge. The tax-equivalent
yield shows what you would have to earn on a taxable investment to
equal the class' tax-free yield, if you're in the 36% federal tax
bracket, but does not reflect payment of the federal alternative
minimum tax, if applicable. If Fidelity had not reimbursed certain
class expenses, the yield and tax-equivalent yield would have been
3.18% and 4.97%, respectively.
FUND TALK: THE MANAGER'S OVERVIEW
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 Norm Lind, Portfolio Manager of Fidelity Advisor
Short-Intermediate Municipal Income Fund
Q. HOW DID THE FUND PERFORM, NORM?
A. For the 12-month period that ended November 30, 1997, the fund's
Class A and Class T shares had total returns of 4.28% and 4.37%. To
get a sense of how the fund did relative to its competitors, the
short-intermediate municipal debt funds average returned 4.39% for the
same 12-month period, according to Lipper Analytical Services.
Additionally, the Lehman Brothers 1-5 Year Municipal Bond Index
returned 4.83% for the same one-year period.
Q. HAVE YOU ALTERED YOUR STRATEGY DURING THE YEAR?
A. Yes, in one sense. Early in the year, the fund had significant
holdings in bonds with maturities of between one and four years.
During that period, the demand for these bonds was strong, helping
them to generally outperform other securities in the
short-intermediate part of the municipal market. But by mid-year, I
sold some of those bonds and replaced them with bonds maturing in five
to seven years. As the municipal bond market rallied in the summer and
fall, these bonds performed better than shorter-term securities,
helping the fund's performance. Despite these alterations, I kept the
fund's duration - which is a measure of the fund's sensitivity to
interest rate changes - "neutral" relative to the short-intermediate
part of the municipal bond market, as represented by the Lehman
Brothers index. By that, I mean that the fund wasn't any more or any
less sensitive to changes in interest rates than the index. When I
bought the longer-term five- to seven-year holdings - which are more
sensitive to interest-rate changes than shorter-term bonds - I offset
them with securities that matured in less than one year, thereby
keeping the fund's duration in line with the market as a whole.
Q. WHAT WERE SOME OF THE FUND'S BEST PERFORMERS DURING THE PERIOD?
A. Some of the fund's biggest winners throughout the year were bonds
with credit ratings of Baa - as judged by Moody's Investors Service -
which were boosted by favorable supply and demand conditions. Because
Baa-rated bonds typically offer the highest yields among municipal
bonds deemed "investment-grade," demand for them was strong.
Alternatively, the supply of these bonds was limited. As I've
discussed in previous reports to shareholders, roughly half of all
municipal bonds issued are insured and carry credit ratings of Aaa.
Consequently, only a small portion of bonds issued during the past
year had Baa-ratings. The upshot was that Baa bond prices generally
rose as investors were forced to vie for a limited number of them.
Some of the fund's best-performing Baa-rated bonds were those issued
by New York City, which benefited from the same trends that benefited
the Baa-rated sector as well as from the city's strong economy and
improved fiscal situation.
Q. WERE THERE ANY DISAPPOINTMENTS?
A. My disappointments were not a result of what I owned, but from not
owning more of some of the stronger performers. For example, bonds
issued in California generally performed well during the period. While
the fund did benefit from its California holdings, it didn't fully
participate in their rally by having more invested there.
Q. WHICH SECTORS OF THE MUNICIPAL MARKET WERE ATTRACTIVE DURING THE
PERIOD?
A. I continued to like general obligation bonds (G0s), which are
backed by the full faith and credit - including the taxing power - of
the issuer - be it a city, county or state. GOs are repaid by general
revenues, includings taxes, and as such tend to do well when the
economy is strong and tax receipts rise. That's exactly what happened
with New York City bonds. In addition, the fund had a relatively large
stake, compared to the overall municipal market, in education bonds.
Most of the fund's education bonds were student loan securities that
offered attractive yields relative to other bonds with comparable
credit ratings and maturities.
Q. WHAT'S AHEAD FOR THE FUND?
A. As always, the direction of interest rates will be the primary
factor determining the performance of municipal bonds. At present, it
doesn't appear that the market has any firm conviction about whether
interest rates are headed higher or lower. Many observers argue that
recent economic and fiscal problems in Southeast Asia ultimately will
slow the U.S. economy enough to ward off future interest-rate hikes.
Others argue that the economy is still strong enough to prompt the
Federal Reserve Board to raise interest rates as a guard against
inflation. Until those countervailing trends are reconciled, I expect
we'll see some continued volatility in the bond markets.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
NORM LIND ON MUNICIPAL SUPPLY:
"The amount of new municipal
bonds in a given period can be an
important factor in determining the
market's performance. New-issue
supply has declined over the past
several years and has helped munis
outperform U.S. Treasuries during
the past year. However, if interest
rates continue to fall in 1998 as they
did in the latter portion of 1997,
more municipal issuers may
refinance their older, more
expensive debt at current lower
interest rates, or issue new debt.
Those actions effectively would
increase municipal supply. On the
other hand, if interest rates stay at
current levels or rise, I would
expect supply to remain fairly
stable."
(solid bullet) Effective January 1, 1998, the
Class A and Class T shares are no
longer available for purchase or
exchange to new accounts pending
a proposed reorganization.
However, existing shareholders
of Class A and Class T can
continue to purchase shares of the
class in which they currently hold
shares.
(solid bullet) Effective January 1, 1998, the
Institutional Class shares are no
longer available for purchase or
exchange to new accounts pending
a proposed reorganization.
However, existing shareholders
of the Institutional Class can
continue to purchase Institutional
Class shares.
FUND FACTS
GOAL: to seek high current
income exempt from federal
income taxes consistent with
preservation of capital
START DATE: March 16, 1994
SIZE: as of November 30,
1997, more than $23 million
MANAGER: Norm Lind, since
1995; joined Fidelity in 1986
(checkmark)
INVESTMENT CHANGES
TOP FIVE STATES AS OF NOVEMBER 30, 1997
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE STATES
6 MONTHS AGO
TEXAS 16.7 20.5
NEW YORK 11.4 15.4
CALIFORNIA 8.5 7.8
VIRGINIA 6.5 2.1
SOUTH CAROLINA 5.8 5.3
TOP FIVE SECTORS AS OF NOVEMBER 30, 1997
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE SECTORS
6 MONTHS AGO
GENERAL OBLIGATION 35.9 34.0
EDUCATION 21.8 16.1
ELECTRIC REVENUE 14.7 14.7
TRANSPORTATION 5.5 4.5
ESCROWED/PRE-REFUNDED 5.3 11.1
AVERAGE YEARS TO MATURITY AS OF NOVEMBER 30, 1997
6 MONTHS AGO
YEARS 3.2 3.2
AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY
DOLLAR AMOUNT.
DURATION AS OF NOVEMBER 30, 1997
6 MONTHS AGO
YEARS 3.0 2.8
DURATION SHOWS HOW MUCH A BOND FUND'S PRICE FLUCTUATES WITH CHANGES IN
COMPARABLE INTEREST RATES. IF RATES RISE 1%, FOR EXAMPLE, A FUND WITH
A FIVE-YEAR DURATION IS LIKELY TO LOSE ABOUT 5% OF ITS VALUE. OTHER
FACTORS ALSO CAN INFLUENCE A BOND FUND'S PERFORMANCE AND SHARE PRICE.
ACCORDINGLY, A BOND FUND'S ACTUAL PERFORMANCE MAY DIFFER FROM THIS
EXAMPLE.
QUALITY DIVERSIFICATION (MOODY'S RATINGS)
AS OF NOVEMBER 30, 1997 AS OF MAY 31, 1997
AAA 56.7%
AA, A 30.5%
BAA 12.8%
SHORT-TERM
INVESTMENTS 0.0%
AAA 53.6%
AA, A 26.3%
BAA 14.3%
SHORT-TERM
INVESTMENTS 5.8%
ROW: 1, COL: 1, VALUE: 0.0
ROW: 1, COL: 2, VALUE: 12.8
ROW: 1, COL: 3, VALUE: 30.5
ROW: 1, COL: 4, VALUE: 56.7
ROW: 1, COL: 1, VALUE: 5.8
ROW: 1, COL: 2, VALUE: 14.3
ROW: 1, COL: 3, VALUE: 26.3
ROW: 1, COL: 4, VALUE: 53.6
WHERE MOODY'S RATINGS ARE NOT AVAILABLE, WE HAVE USED S&P RATINGS.
AMOUNTS SHOWN ARE AS A
PERCENTAGE OF THE FUND'S INVESTMENTS.
INVESTMENTS NOVEMBER 30, 1997
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES
MUNICIPAL BONDS - 100%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
ALABAMA - 0.7%
Mobile Board of Wtr. & Swr. Commissioners Wtr. Svc. Rev.
9.875% 1/1/98 (Escrowed to Maturity) (b) $ 175,000 $ 175,802
607148PZ
ALASKA - 1.3%
Alaska Student Loan Corp. Student Loan Rev.
Series A, 5% 7/1/03 (AMBAC Insured) (a) 300,000 305,625 011857EH
CALIFORNIA - 8.5%
California Rural Home Mtg. Fin. Auth. Lease Rev.
(Rural Lease Purchase) Series A, 4.45%
8/1/01 (MBIA Insured) 1,000,000 1,011,250 130574AA
Central Valley Fing. Auth. Rev. (Carson Ice-Generation Proj.)
5% 7/1/98 1,000,000 1,004,760 155689AA
2,016,010
COLORADO - 1.1%
Denver City & County Arpt. Rev. Series A,
6.90% 11/15/98 (a) 250,000 256,283 249181LB
FLORIDA - 2.6%
Dade County Aviation Rev. Rfdg. (Miami Int'l Arpt.)
Series A, 5.25% 10/1/01 (FSA Insured) (a) 500,000 516,875
233455C9
St. Petersburg Excise Tax Rev. Rfdg. 3.80% 10/1/98
(FGIC Insured) 100,000 100,093 793257AE
616,968
GEORGIA - 2.3%
Georgia Gen. Oblig. Series D, 6.80% 8/1/01 500,000 545,000
373382ZV
INDIANA - 2.3%
Indianapolis Resource Recovery Rev. Rfdg. (Ogden Martin
Sys. Inc. Proj.) 6.50% 12/1/01 (AMBAC Insured) 500,000 539,375
455356BE
LOUISIANA - 4.4%
Louisiana Pub. Facs. Auth. Rev. Rfdg.
(Student Loan) Sr. Series A-1, 6.20% 3/1/01 995,000 1,043,506
54640AJY
MAINE - 4.3%
Maine Edl. Loan Marketing Corp. Student Loan Rev. Series A-4,
5.45% 11/1/99 (a) 1,000,000 1,025,000 560409BA
MASSACHUSETTS - 2.1%
Massachusetts Health & Edl. Facs. Auth. Rev. Rfdg.
(Fairview Extended Care) Series B, 4.55% 7/14/02
(MBIA Insured) LOC BankBoston N.A 300,000 300,000 57585JRR
Nantucket Gen. Oblig. Rfdg.
5% 7/15/03 (MBIA Insured) 200,000 206,250 630191JT
506,250
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
MICHIGAN - 4.5%
Michigan Hosp. Fin. Auth. Rev. Rfdg. (Mercy Health Services)
Series S, 5.75% 8/15/05 $ 200,000 $ 214,000 59465ELV
Michigan Pub. Pwr. Agcy. Rev. Rfdg. (Campbell Proj.)
Series A, 5.50% 1/1/04 (AMBAC Insured) 700,000 736,750 594570FQ
Utica Commty. Schools Bldg. & Site Rfdg.
4.10% 5/1/98 (FGIC Insured) 125,000 125,180 917661SU
1,075,930
MINNESOTA - 0.7%
Minneapolis Gen. Oblig. (Cap. Appreciation)
Series B, 0% 12/1/02 200,000 161,250 60374AQX
MONTANA - 5.5%
Montana Higher Ed. Student Assistance Corp. Student Loan
Rev. Series B, 6.60% 12/1/99 (a) 1,240,000 1,295,800 612130CP
NEVADA - 2.5%
Clark County School Dist. Series A,
9.75% 6/1/01 (MBIA Insured) 500,000 588,750 181054UB
NEW MEXICO - 1.1%
Albuquerque Arpt. Rev. Rfdg.
6.25% 7/1/00 (AMBAC Insured) (a) 250,000 261,563 013538EK
NEW YORK - 11.4%
New York City Gen. Oblig. Rfdg. Series H,
7.875% 8/1/00 1,000,000 1,090,000 649650TP
New York City Muni. Assistance Corp. Rfdg.
Series E, 5.50% 7/1/00 1,000,000 1,033,750 626190F9
New York State Local Gov't. Assistance Corp. Rfdg.
Series A, 5.50% 4/1/04 (AMBAC Insured) 100,000 105,750 649876SC
New York State Thruway Auth. Svc. Contract
Rev. (Local Hwy. & Bridge):
5.40% 4/1/03 250,000 258,750 650017DB
6% 4/1/03 200,000 212,750 650017BR
2,701,000
NORTH CAROLINA - 3.3%
North Carolina Muni. Pwr. Agcy. #1 Catawba
Elec. Rev. Rfdg. 5.75% 1/1/02 750,000 780,938 658203QB
OHIO - 1.2%
Columbus Variable Purp. Wtrwks. & Swr.
Impt. Unltd. Tax 12% 5/15/98 270,000 279,680 199488VJ
PENNSYLVANIA - 3.7%
Pennsylvania Convention Ctr. Auth. Rev. Rfdg.
Series A, 5.75% 9/1/99 215,000 219,838 708681AY
Pennsylvania Higher Ed. Facs. Auth. Health Svcs. Rev. Rfdg.
(Penn. Univ.) Series A, 5.125% 1/1/01 650,000 666,250 709172CQ
886,088
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
SOUTH CAROLINA - 5.8%
South Carolina Gen. Oblig. (State Hwy.)
5.40% 8/1/03 $ 1,300,000 $ 1,374,750 837107JW
TENNESSEE - 3.4%
Memphis-Shelby County Arpt. Auth. Arpt. Rev. Rfdg. Series A,
5.25% 2/15/01 (MBIA Insured) (a) 275,000 282,563 586111EB
Metropolitan Gov't Nashville & Davidson County
Series A, 5.125% 11/15/05 505,000 525,200 592013J4
807,763
TEXAS - 16.7%
Austin Gen. Oblig. Pub. Impt. Ltd. Tax
7% 9/1/01 1,000,000 1,093,750 052394SC
Austin Independent School Dist. School Bldg.
8.125% 8/1/01 (PSF Guaranteed)
(Escrowed to Maturity) (b) 500,000 565,625 052429F5
Brazos Higher Ed. Auth. Student Loan Rev. Rfdg.
Series A-1, 6.05% 12/1/01 (a) 500,000 525,000 106238DE
Deer Park Independent School Dist. Rfdg.
0% 2/15/03 (PSF Guaranteed) 200,000 158,500 244127PN
Northside Independent School Dist. School Bldg.
8.375% 2/1/00 (PSF Guaranteed) 500,000 543,122 6670262Q
San Antonio Gen. Oblig. Rfdg. (Gen. Impt.)
5.50% 8/1/02 (c) 125,000 128,906 796236JF
Texas A&M Univ. Rev. Rfdg. (Fing. Sys.)
5% 5/15/00 (c) 980,000 988,575 882135NZ
4,003,478
UTAH - 1.9%
Intermountain Pwr. Agcy. Pwr. Supply Rev. Rfdg.
(Cap. Appreciation) Series B, 0% 7/1/00 (MBIA Insured) 500,000
448,125 458840ZH
VIRGINIA - 6.5%
Fairfax County Pub. Impt. Series A, 5.50% 6/1/99 1,000,000
1,023,750 303820PY
Virginia Pub. School Auth. School Fing. Series A,
6.20% 1/1/00 (Pre-Refunded to 1/1/00 @ 102) (b) 500,000 530,000
9281764U
1,553,750
WASHINGTON - 2.2%
Washington Pub. Pwr. Supply Sys. Rev. Rfdg.
(Nuclear Proj. #1) Series A, 7.25% 7/1/99 500,000 523,750
939827LB
TOTAL INVESTMENTS IN SECURITIES - 100%
(Cost $23,368,945) $ 23,772,434
LEGEND
15. Private activity obligations whose interest is subject to the
federal alternative minimum tax for individuals.
16. Security collateralized by an amount sufficient to pay interest
and principal.
17. Security purchased on a delayed delivery or when-issued basis (see
Note 2 of Notes to Financial Statements).
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total
value of investment in securities, is as follows (ratings are
unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 87.2% AAA, AA, A 70.0%
Baa 8.6% BBB 12.8%
Ba 0.0% BB 0.0%
B 0.0% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
The percentage not rated by Moody's or S&P amounted to 0.0%.
The distribution of municipal securities by revenue source, as a
percentage of total value of investment in securities, is as follows:
General Obligation 35.9%
Education 21.8
Electric Revenue 14.7
Transportation 5.5
Escrowed/Pre-Refunded 5.3
Special Tax 5.2
Health Care 5.0
Others (individually less than 5%) 6.6
TOTAL 100.0%
INCOME TAX INFORMATION
At November 30, 1997 the aggregate cost of investment securities for
income tax purposes was $23,368,945. Net unrealized appreciation
aggregated $403,489, of which $406,360 related to appreciated
investment securities and $2,871 related to depreciated investment
securities.
The fund hereby designates approximately $12,000 as a capital gain
dividend for the purpose of the dividend paid deduction.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
NOVEMBER 30, 1997
ASSETS
INVESTMENT IN SECURITIES, AT VALUE (COST $23,368,945) - $ 23,772,434
SEE ACCOMPANYING SCHEDULE
CASH 45,833
RECEIVABLE FOR INVESTMENTS SOLD 105,395
INTEREST RECEIVABLE 443,524
TOTAL ASSETS 24,367,186
LIABILITIES
PAYABLE FOR INVESTMENTS PURCHASED $ 1,119,035
DELAYED DELIVERY
DISTRIBUTIONS PAYABLE 15,097
DISTRIBUTION FEES PAYABLE 2,813
ACCRUED MANAGEMENT FEE 6,882
OTHER PAYABLES AND ACCRUED EXPENSES 31,785
TOTAL LIABILITIES 1,175,612
NET ASSETS $ 23,191,574
NET ASSETS CONSIST OF:
PAID IN CAPITAL $ 22,746,361
ACCUMULATED UNDISTRIBUTED NET REALIZED GAIN (LOSS) 41,724
ON INVESTMENTS
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS 403,489
NET ASSETS $ 23,191,574
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
NOVEMBER 30, 1997
CALCULATION OF MAXIMUM OFFERING PRICE $10.20
CLASS A:
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
($639,381 (DIVIDED BY) 62,680 SHARES)
MAXIMUM OFFERING PRICE PER SHARE (100/98.50 OF $10.20) $10.36
CLASS T: $10.21
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
($21,916,347 (DIVIDED BY) 2,147,471 SHARES)
MAXIMUM OFFERING PRICE PER SHARE (100/98.50 OF $10.21) $10.37
INSTITUTIONAL CLASS: $10.21
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER
SHARE ($635,846 (DIVIDED BY) 62,284 SHARES)
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED NOVEMBER 30, 1997
INTEREST INCOME $ 1,251,876
EXPENSES
MANAGEMENT FEE $ 99,898
TRANSFER AGENT FEES 54,809
DISTRIBUTION FEES 37,591
ACCOUNTING FEES AND EXPENSES 65,365
NON-INTERESTED TRUSTEES' COMPENSATION 179
CUSTODIAN FEES AND EXPENSES 4,383
REGISTRATION FEES 58,592
AUDIT 37,671
LEGAL 730
MISCELLANEOUS 602
TOTAL EXPENSES BEFORE REDUCTIONS 359,820
EXPENSE REDUCTIONS (130,260) 229,560
NET INTEREST INCOME 1,022,316
REALIZED AND UNREALIZED GAIN (LOSS)
NET REALIZED GAIN (LOSS) ON:
INVESTMENT SECURITIES 63,343
FUTURES CONTRACTS (1,274) 62,069
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON (29,224)
INVESTMENT SECURITIES
NET GAIN (LOSS) 32,845
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 1,055,161
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30,
1997 1996
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS $ 1,022,316 $ 1,180,079
NET INTEREST INCOME
NET REALIZED GAIN (LOSS) 62,069 130,000
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) (29,224) (87,628)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 1,055,161 1,222,451
FROM OPERATIONS
DISTRIBUTIONS TO SHAREHOLDERS (1,022,316) (1,180,079)
FROM NET INTEREST INCOME
FROM NET REALIZED GAIN (86,476) (83,995)
TOTAL DISTRIBUTIONS (1,108,792) (1,264,074)
SHARE TRANSACTIONS - NET INCREASE (DECREASE) (7,315,760) 1,194,041
TOTAL INCREASE (DECREASE) IN NET ASSETS (7,369,391) 1,152,418
NET ASSETS
BEGINNING OF PERIOD 30,560,965 29,408,547
END OF PERIOD $ 23,191,574 $ 30,560,965
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
YEARS ENDED NOVEMBER 30,
1997 1996 D
SELECTED PER-SHARE DATA
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%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 639 $ 186
RATIO OF EXPENSES TO AVERAGE NET ASSETS .90% E .90% A,
E
RATIO OF NET INTEREST INCOME TO AVERAGE NET ASSETS 4.00% 4.06% A
PORTFOLIO TURNOVER RATE 41% 62%
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
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 FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - CLASS T
YEARS ENDED NOVEMBER 30,
1997 1996 1995 1994 D
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
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 - .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%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 21,916 $ 29,887 $ 29,274 $ 16,563
RATIO OF EXPENSES TO AVERAGE NET ASSETS .90% E .90% E .82% E .75% A,
E
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER .90% .89% F .82% .75% A
EXPENSE REDUCTIONS
RATIO OF NET INTEREST INCOME TO AVERAGE 3.99% 3.97% 4.25% 3.74% A
NET ASSETS
PORTFOLIO TURNOVER RATE 41% 62% 80% 111% A
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
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 MARCH 16, 1994 (COMMENCEMENT OF OPERATIONS) 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 (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
YEARS ENDED NOVEMBER 30,
1997 1996 1995 D
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SELECTED PER-SHARE DATA
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 RETURN B, C 4.52% 4.19% 3.37%
RATIOS AND SUPPLEMENTAL DATA
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 .75% .74% F .75% A
EXPENSE REDUCTIONS
RATIO OF NET INTEREST INCOME TO AVERAGE NET ASSETS 4.14% 4.03% 4.18% A
PORTFOLIO TURNOVER RATE 41% 62% 80%
</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 (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
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 (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1997
19. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Short-Intermediate Municipal Income Fund (the fund)
is a fund of Fidelity Advisor Series VI (the trust) and is authorized
to issue an unlimited number of shares. The trust is registered under
the Investment Company Act of 1940, as amended (the 1940 Act), as an
open-end management investment company organized as a Massachusetts
business trust.
The fund offers Class A, Class T, and Institutional Class shares, each
of which has equal rights as to assets and voting privileges. Each
class has exclusive voting rights with respect to its distribution
plan. Interest income, realized and unrealized capital gains and
losses, the common expenses of the fund, and certain fund-level
expense reductions, if any, are allocated on a pro rata basis to each
class based on the relative net assets of each class to the total net
assets of the fund. Each class of shares differs in its respective
distribution, transfer agent, registration, and certain other
class-specific fees, expenses, and expense reductions.
The financial statements have been prepared in conformity with
generally accepted accounting principles which permit management to
make certain estimates and assumptions at the date of the financial
statements. The following summarizes the significant accounting
policies of the fund:
SECURITY VALUATION. Securities are valued based upon a computerized
matrix system and/or appraisals by a pricing service, both of which
consider market transactions and dealer-supplied valuations.
Securities for which quotations are not readily available are valued
at their fair value as determined in good faith under consistently
applied procedures under the general supervision of the Board of
Trustees. Short-term securities with remaining maturities of sixty
days or less for which quotations are not readily available are valued
at amortized cost or original cost plus accrued interest, both of
which approximate current value.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent that it distributes substantially all of
its taxable income for its fiscal year. The schedule of investments
includes information regarding income taxes under the caption "Income
Tax Information."
INTEREST INCOME. Interest income, which includes amortization of
premium and accretion of original issue discount, is accrued as
earned.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
between the funds in the trust.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are declared daily and
paid monthly from net interest income. Distributions from realized
gains, if any, are recorded on the ex-dividend date. Income dividends
and capital gain distributions are declared separately for each class.
Income and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. These differences, which may result in
distribution reclassifications, are primarily due to differing
treatments for losses deferred due to futures. The fund also utilized
earnings and profits distributed to shareholders on redemption of
shares as a part of the dividends paid deduction for income tax
purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and
may affect the per-share allocation between net interest income and
realized and unrealized gain (loss). Accumulated undistributed net
realized gain (loss) on investments may include temporary book and tax
basis differences that will reverse in a subsequent period. Any
taxable income or gain remaining at fiscal year end is distributed in
the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
20. OPERATING POLICIES.
MUNICIPAL CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by
the Securities and Exchange Commission, the fund may invest in the
Municipal Central Cash Fund (the Cash Fund) managed by FMR Texas Inc.,
an affiliate of Fidelity Management & Research Company (FMR). The Cash
Fund is an open-end money market fund available only to investment
companies and other accounts managed by FMR and its affiliates. The
Cash Fund seeks preservation of capital, liquidity, and current income
by investing in high-quality, short-term municipal securities of
various states and municipalities. Income distributions from the Cash
Fund are declared daily and paid monthly from net interest income.
Income distributions received by the fund are recorded as interest
income in the accompanying financial statements.
WHEN-ISSUED SECURITIES. The fund may purchase or sell securities on a
when-issued basis. Payment and delivery may take place a month or more
after the date of the transaction. The price of the underlying
securities is fixed at the time the transaction is negotiated. The
market values of the securities purchased on a when-issued or forward
commitment basis are identified as such in the fund's schedule of
investments. The fund may receive compensation for interest forgone in
the purchase of a when-issued security. With respect to purchase
commitments, the fund identifies securities as segregated in its
custodial
2. OPERATING POLICIES - CONTINUED
WHEN-ISSUED SECURITIES - CONTINUED
records with a value at least equal to the amount of the commitment.
The payables and receivables associated with the purchases and sales
of when-issued securities having the same settlement date and broker
are offset. When-issued securities that have been purchased from and
sold to different brokers are reflected as both payables and
receivables in the statement of assets and liabilities under the
caption "Delayed delivery." Losses may arise due to changes in the
market value of the underlying securities, if the counterparty does
not perform under the contract, or if the issuer does not issue the
securities due to political, economic, or other factors.
FUTURES CONTRACTS. The fund may use futures contracts to manage its
exposure to the bond market and to fluctuations in interest rates.
Buying futures tends to increase the fund's exposure to the underlying
instrument, while selling futures tends to decrease the fund's
exposure to the underlying instrument or hedge other fund investments.
Losses may arise from changes in the value of the underlying
instruments or if the counterparties do not perform under the
contracts' terms. Gains (losses) are realized upon the expiration or
closing of the futures contracts. Futures contracts are valued at the
settlement price established each day by the board of trade or
exchange on which they are traded.
21. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $10,461,839 and $16,922,928, respectively.
The market value of futures contracts opened and closed during the
period amounted to $2,323,606 and $2,322,332, respectively.
22. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus a
fixed individual fund fee rate applied to the average net assets of
the fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds advised by FMR. The rates ranged from .1100% to .3700% for the
period. The annual individual fund fee rate is .25%. In the event that
these rates were lower than the contractual rates in effect during the
period, FMR voluntarily implemented the above rates, as they resulted
in the same or a lower management fee. For the period, the management
fee was equivalent to an annual rate of .39% of average net assets.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the
1940 Act, the Trustees have adopted separate distribution plans with
respect to each class of shares (collectively referred to as "the
Plans"). Under certain of the Plans, the class pays Fidelity
Distributors Corporation (FDC), an affiliate of FMR, a distribution
and service fee. This fee is based on the following annual rates of
the average net assets of each applicable class:
CLASS A .15%
CLASS T .15%
For the period, each class paid FDC the following amounts, a portion
of which was paid to securities dealers, banks and other financial
institutions for the distribution of each class' applicable shares,
and providing shareholder support services:
PAID TO DEALERS'
FDC PORTION
CLASS A $ 523 $ 523
CLASS T 37,068 37,068
$ 37,591 $ 37,591
Under the Plans, FMR or FDC may use its resources to pay
administrative and promotional expenses related to the sale of each
class' shares. The Plans also authorize payments to third parties that
assist in the sale of each class' shares or render shareholder support
services.
SALES LOAD. FDC receives a front-end sales charge of up to 1.50% for
selling Class A and Class T shares of the fund.
For the period, FDC received the following sales charge amounts
related to each class, a portion of which is paid to securities,
dealers, banks, and other financial institutions:
PAID TO DEALERS'
FDC PORTION
CLASS A $ 1,921 $ 1,596
CLASS T 44,628 21,694
$ 46,549 $ 23,290
TRANSFER AGENT AND ACCOUNTING FEES. UMB Bank, n.a. (UMB) is the
custodian, transfer agent, and shareholder servicing agent for the
fund's Class A, Class T, and Institutional Class shares. UMB has
entered into a sub-arrangement with Fidelity Investments Institutional
Operations Company, Inc. (FIIOC) with respect to all classes of the
fund to perform the transfer, dividend disbursing, and shareholder
servicing agent functions. FIIOC an affiliate of FMR, receives account
fees and asset-based fees that vary according to the account size and
type of account of the shareholders of the respective classes of the
fund. All fees are paid to FIIOC by UMB, which is reimbursed by each
class for such payments.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
TRANSFER AGENT AND ACCOUNTING FEES - CONTINUED
FIIOC pays for typesetting, printing and mailing of all shareholder
reports. For the period, each class paid the following transfer agent
fees:
TRANSFER AMOUNT % OF
AGENT AVERAGE
NET ASSETS
CLASS A UMB $ 1,347 .39
CLASS T UMB 51,815 .21
INSTITUTIONAL CLASS UMB 1,647 .30
$ 54,809
UMB also has a sub-contract with Fidelity Service Company, Inc. (FSC),
an affiliate of FMR, under which FSC maintains the fund's accounting
records. The fee is based on the level of average net assets for the
month plus out-of-pocket expenses.
23. EXPENSE REDUCTIONS.
FMR voluntarily agreed to reimburse operating expenses (excluding
interest, taxes, brokerage commissions and extraordinary expenses)
above the following annual rates or range of annual rates of average
net assets for each of the following classes:
FMR REIMBURSEMENT
EXPENSE
LIMITATIONS
CLASS A .90% $ 29,665
CLASS T .90% 81,498
INSTITUTIONAL CLASS .75% 19,097
$ 130,260
24. BENEFICIAL INTEREST.
At the end of the period, one shareholder was record owner of
approximately 18% of the total outstanding shares of the fund.
25. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
YEARS ENDED NOVEMBER 30,
1997 1996 A
CLASS A
FROM NET INTEREST INCOME $ 13,958 $ 1,658
FROM NET REALIZED GAIN 543 -
TOTAL $ 14,501 $ 1,658
CLASS T
FROM NET INTEREST INCOME $ 985,656 $ 1,165,115
FROM NET REALIZED GAIN 84,495 83,601
TOTAL $ 1,070,151 $ 1,248,716
INSTITUTIONAL CLASS
FROM NET INTEREST INCOME $ 22,702 $ 13,306
FROM NET REALIZED GAIN 1,438 394
TOTAL $ 24,140 $ 13,700
$ 1,108,792 $ 1,264,074
A DISTRIBUTIONS FOR CLASS A ARE FOR THE PERIOD SEPTEMBER 3, 1996
(COMMENCEMENT OF SALE OF SHARES) TO NOVEMBER 30, 1996 .
26. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SHARES DOLLARS
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1997 1996 A 1997 1996 A
CLASS A 51,845 18,079 $ 526,388 $ 182,623
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 916 164 9,312 1,669
SHARES REDEEMED (8,324) - (84,132) -
NET INCREASE (DECREASE) 44,437 18,243 $ 451,568 $ 184,292
CLASS T 1,381,485 1,927,010 $ 14,006,050 $ 19,536,753
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 84,689 103,571 859,694 1,051,496
SHARES REDEEMED (2,246,722) (1,962,525) (22,781,470) (19,930,259)
NET INCREASE (DECREASE) (780,548) 68,056 $ (7,915,726) $ 657,990
INSTITUTIONAL CLASS 59,843 36,423 $ 608,273 $ 370,359
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 1,125 713 11,437 7,234
SHARES REDEEMED (46,406) (2,548) (471,312) (25,834)
NET INCREASE (DECREASE) 14,562 34,588 $ 148,398 $ 351,759
</TABLE>
A SHARE TRANSACTIONS FOR CLASS A ARE FOR THE PERIOD SEPTEMBER 3, 1996
(COMMENCEMENT OF SALE OF SHARES) TO NOVEMBER 30, 1996
27. REGISTRATION FEES.
For the period, each class paid the following amounts to register its
shares for sale:
REGISTRATION
FEES
CLASS A $ 28,087
CLASS T 13,406
INSTITUTIONAL CLASS 17,099
$ 58,592
28. PROPOSED REORGANIZATION.
The Board of Trustees of Fidelity Advisor Short-Intermediate Municipal
Income Fund has approved an Agreement and Plan of Reorganization
("Agreement") between the fund and Fidelity Advisor Intermediate
Municipal Income Fund ("Reorganization"). The Agreement provides for
the transfer of all of the assets of the fund to Fidelity Advisor
Intermediate Municipal Income Fund in exchange solely for the number
of shares of Class A, Class T, and Institutional Class of Fidelity
Advisor Intermediate Municipal Income Fund having the same relative
net asset value as the outstanding shares of Class A, Class T, and
Institutional Class of the fund as of the close of business of the
New York Stock Exchange on the day that the Reorganization is
effective and the assumption by Fidelity Advisor Intermediate
Municipal Income Fund of all of the liabilities of the fund. The
Reorganization can be consummated only if, among other things, it is
approved by the vote of a majority (as defined by the 1940 Act) of
outstanding voting securities of the fund. A Special Meeting of
Shareholders ("Meeting") of the fund will be held on May 4, 1998 to
vote on the Agreement. A detailed description of the proposed
transaction and voting information will be sent to shareholders of the
fund in March, 1998. If the Agreement is approved at the Meeting, the
Reorganization is expected to become effective on or about May 28,
1998.
Effective January 1, 1998, Class A, Class T, and Institutional Class
shares are no longer available for purchase or exchange to new
accounts pending the proposed reorganization. However, existing
shareholders of the Class A, Class T, and Institutional Class can
continue to purchase shares of the class which they currently hold.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Advisor Series VI and the Shareholders of
Fidelity Advisor Short-Intermediate Municipal Income Fund:
We have audited the accompanying statement of assets and liabilities
of Fidelity Advisor Series VI: Fidelity Advisor Short-Intermediate
Municipal Income Fund, including the schedule of portfolio
investments, as of November 30, 1997, and the related statement of
operations for the year then ended, the statement of changes in net
assets for each of the two years in the period then ended and the
financial highlights of Class A, Class T, and Institutional Class for
each of the periods indicated therein. These financial statements and
financial highlights are the responsibility of the fund's management.
Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of November 30, 1997 by
correspondence with the custodian and brokers. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well
as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of Fidelity Advisor Series VI: Fidelity Advisor
Short-Intermediate Municipal Income Fund as of November 30, 1997, the
results of its operations for the year then ended, the changes in its
net assets for each of the two years in the period then ended, and the
financial highlights of Class A, Class T, and Institutional Class for
each of the periods indicated therein, in conformity with generally
accepted accounting principles.
/s/COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
January 16, 1998
DISTRIBUTIONS
The Board of Trustees of Fidelity Advisor Short-Intermediate Municipal
Income Fund voted to pay to shareholders of record at the opening of
business on record date, the following distributions derived from
capital gains realized from sales of portfolio securities, and
dividends derived from net investment income:
PAY DATE RECORD DATE DIVIDENDS CAPITAL GAINS
Class A 12/29/97 12/26/97 $__ $.014
Class T 12/29/97 12/26/97 $__ $.014
The fund will notify shareholders in January 1998 of these percentages
for use in preparing 1997 income tax returns.
During fiscal year ended 1997, 100% of the fund's income dividends was
free from federal income tax, and 19.53% of the fund's income
dividends was subject to the federal alternative minimum tax.
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Fred L. Henning, Jr., Vice President
Dwight D. Churchill, Vice President
Norman U. Lind, Vice President
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
ADVISORY BOARD
J. Gary Burkhead
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
UMB Bank, n.a.
Kansas City, MO
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA
CUSTODIAN
UMB Bank, n.a.
Kansas City, MO
FOCUS FUNDS
Fidelity Advisor Consumer
Industries Fund
Fidelity Advisor Cyclical
Industries Fund
Fidelity Advisor Financial
Services Fund
Fidelity Advisor Health Care Fund
Fidelity Advisor Natural
Resources Fund
Fidelity Advisor Technology Fund
Fidelity Advisor Utilities Growth Fund
GROWTH FUNDS
Fidelity Advisor International Capital Appreciation Fund
Fidelity Advisor Overseas Fund
Fidelity Advisor TechnoQuant
Growth Fund
SM
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 Emerging Markets Income Fund
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
Fidelity Advisor Intermediate Municipal Income Fund
Fidelity Advisor Short-Intermediate Municipal Income Fund
MONEY MARKET FUNDS
Prime Fund
Treasury Fund
Tax-Exempt Fund
(registered trademark)
(2_FIDELITY_LOGOS)FIDELITY ADVISOR
(REGISTERED TRADEMARK)
INTERMEDIATE MUNICIPAL INCOME FUND - CLASS A, CLASS T, CLASS B
AND CLASS C
FUND - CLASS A AND CLASS T
ANNUAL REPORT
NOVEMBER 30, 1997
CONTENTS
PRESIDENT'S MESSAGE 3 NED JOHNSON ON INVESTING STRATEGIES.
PERFORMANCE 4 HOW THE FUND HAS DONE OVER TIME.
FUND TALK 7 THE MANAGER'S REVIEW OF FUND
PERFORMANCE, STRATEGY AND OUTLOOK.
INVESTMENT CHANGES 10 A SUMMARY OF MAJOR SHIFTS IN THE FUND'S
INVESTMENTS OVER THE PAST SIX MONTHS.
INVESTMENTS 11 A COMPLETE LIST OF THE FUND'S INVESTMENTS
WITH THEIR MARKET VALUES.
FINANCIAL STATEMENTS 15 STATEMENTS OF ASSETS AND LIABILITIES,
OPERATIONS, AND CHANGES IN NET ASSETS,
AS WELL AS FINANCIAL HIGHLIGHTS.
NOTES 22 NOTES TO THE FINANCIAL STATEMENTS.
REPORT OF INDEPENDENT 29 THE AUDITORS' OPINION.
ACCOUNTANTS
DISTRIBUTIONS 30
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION
OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS
IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
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.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY ADVISOR FUND, INCLUDING CHARGES
AND EXPENSES, CONTACT YOUR
INVESTMENT PROFESSIONAL FOR A FREE PROSPECTUS. READ IT CAREFULLY
BEFORE YOU INVEST OR SEND MONEY.
PRESIDENT'S MESSAGE
(PHOTO_OF_EDWARD_C_JOHNSON_3D)DEAR SHAREHOLDER:
Although financial turmoil in Pacific Basin countries was a catalyst
for significant volatility in U.S. markets in late October and into
November, the Standard & Poor's 500 Index has risen more than 31%
year-to-date, almost three times its historical annual average.
Meanwhile, bond markets - primarily influenced by a relatively steady
flow of positive news on the inflation front - continued to post solid
returns through the first 11 months of 1997.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
The longer your investment time frame, the less likely it is that you
will be affected by short-term market volatility. A 10-year investment
horizon appropriate for saving for a college education, for example,
enables you to weather market cycles in a long-term fund, which may
have a higher risk potential, but also has a higher potential rate of
return.
An intermediate-length fund could make sense if your investment
horizon is two to four years, while a short-term bond fund could be
the right choice if you need your money in one or two years.
If your time horizon is less than a year, you might want to consider
moving some of your bond investment into a money market fund. These
funds seek income and a stable share price by investing in
high-quality, short-term investments. Of course, it's important to
remember that there is no assurance that a money market fund will
achieve its goal of maintaining a stable net asset value of $1.00 per
share, and that these types of funds are neither insured nor
guaranteed by any agency of the U.S. government.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases.
Remember to contact your investment professional if you need help with
your investments.
Best regards,
Edward C. Johnson 3d
ADVISOR SHORT-INTERMEDIATE MUNICIPAL INCOME FUND -
INSTITUTIONAL CLASS
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can
look at the total percentage change in value, the average annual
percentage change or the growth of a hypothetical $10,000 investment.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). You can also look at the class' income, as reflected in its
yield, to measure performance. The initial offering of Institutional
Class shares took place on July 3, 1995. Institutional Class shares
are sold to eligible investors without a sales load or 12b-1 fee.
Returns prior to July 3, 1995 are those of Class T, the original class
of the fund, and reflect Class T's 0.15% 12b-1 fee. If Fidelity had
not reimbursed certain class expenses, the total returns and dividends
would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1997 PAST 1 LIFE OF
YEAR FUND
ADVISOR SHORT-INTERMEDIATE MUNICIPAL INCOME - 4.52% 19.40%
INSTITUTIONAL CLASS
LEHMAN BROTHERS 1-5 YEAR MUNICIPAL BOND INDEX 4.83% N/A
SHORT-INTERMEDIATE MUNICIPAL DEBT FUNDS AVERAGE 4.39% N/A
CUMULATIVE TOTAL RETURNS show Institutional Class' performance in
percentage terms over a set period - in this case, one year, and since
the fund started on March 16, 1994. For example, if you had invested
$1,000 in a fund that had a 5% return over the past year, the value of
your investment would be $1,050. You can compare the Institutional
Class' returns to the performance of the Lehman Brothers 1-5 Year
Municipal Bond Index - a total return benchmark for investment-grade
municipal bonds with maturities between one and five years. To measure
how Institutional Class' performance stacked up against its peers, you
can compare it to the short-intermediate municipal debt funds average,
which reflects the performance of mutual funds with similar objectives
tracked by Lipper Analytical Services, Inc. The past one year average
represents a peer group of 33 mutual funds. These benchmarks include
reinvested dividends and capital gains, if any, and exclude the effect
of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1997 PAST 1 LIFE OF
YEAR FUND
ADVISOR SHORT-INTERMEDIATE MUNICIPAL INCOME - 4.52% 4.89%
INSTITUTIONAL CLASS
LEHMAN BROTHERS 1-5 YEAR MUNICIPAL BOND INDEX 4.83% N/A
SHORT-INTERMEDIATE MUNICIPAL DEBT FUNDS AVERAGE 4.39% N/A
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.
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19971130 19971211 172138 S00000000000001
FA Short-Int Muni -CL I LB Municipal Bond
00606 LB015
1994/03/31 10000.00 10000.00
1994/04/30 10024.02 10084.80
1994/05/31 10041.56 10172.24
1994/06/30 10062.58 10110.08
1994/07/31 10144.43 10295.40
1994/08/31 10177.48 10331.02
1994/09/30 10149.37 10179.36
1994/10/31 10114.45 9998.58
1994/11/30 10049.02 9817.80
1994/12/31 10147.71 10033.89
1995/01/31 10288.00 10320.66
1995/02/28 10395.05 10620.79
1995/03/31 10466.04 10742.82
1995/04/30 10484.19 10755.50
1995/05/31 10629.43 11098.70
1995/06/30 10625.69 11002.15
1995/07/31 10718.19 11106.45
1995/08/31 10821.04 11247.28
1995/09/30 10859.18 11318.47
1995/10/31 10929.59 11483.04
1995/11/30 10988.08 11673.55
1995/12/31 11036.88 11785.73
1996/01/31 11118.29 11874.71
1996/02/29 11121.67 11794.56
1996/03/31 11060.20 11643.82
1996/04/30 11059.75 11610.87
1996/05/31 11083.08 11606.22
1996/06/30 11141.78 11732.62
1996/07/31 11202.33 11839.38
1996/08/31 11208.16 11836.54
1996/09/30 11269.05 12002.25
1996/10/31 11342.77 12138.00
1996/11/30 11448.08 12360.12
1996/12/31 11442.14 12308.21
1997/01/31 11482.11 12331.47
1997/02/28 11541.30 12444.68
1997/03/31 11480.29 12278.79
1997/04/30 11530.86 12381.56
1997/05/31 11606.58 12567.78
1997/06/30 11681.58 12701.63
1997/07/31 11838.88 13053.46
1997/08/31 11798.87 12931.15
1997/09/30 11873.50 13084.65
1997/10/31 11926.04 13168.78
1997/11/28 11965.92 13246.21
IMATRL PRASUN SHR__CHT 19971130 19971211 172140 R00000000000047
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Short-Intermediate Municipal Income Fund
- - Institutional Class on March 31, 1994, shortly after the fund
started. As the chart shows, by November 30, 1997, the value of the
investment would have grown to $11,966 - a 19.66% increase on the
initial investment. For comparison, look at how the Lehman Brothers
Municipal Bond Index - a total return performance benchmark for
investment-grade municipal bonds with maturities of at least one year
- - did over the same period. With dividends and capital gains, if any,
reinvested, the same $10,000 investment would have grown to $13,246 -
a 32.46% 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)
TOTAL RETURN COMPONENTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
YEARS ENDED NOVEMBER 30, MARCH 16, 1994
(COMMENCEMENT
OF OPERATIONS) TO
NOVEMBER 30,
1997 1996 1995 1994
</TABLE>
DIVIDEND RETURN 4.22% 4.09% 4.63% 2.57%
CAPITAL APPRECIATION 0.30% 0.10% 4.71% -2.30%
RETURN
TOTAL RETURN 4.52% 4.19% 9.34% 0.27%
TOTAL RETURN COMPONENTS include both dividend returns and capital
appreciation returns. A dividend return reflects the actual dividends
paid by the class. A capital appreciation return reflects both the
amount paid by the class to shareholders as capital gain distributions
and changes in the class' share price. Both returns assume the
dividends or capital gains paid by the class are reinvested, if any.
DIVIDENDS AND YIELD
<TABLE>
<CAPTION>
<S> <C> <C> <C>
PERIODS ENDED NOVEMBER 30, 1997 PAST 1 PAST 6 PAST 1
MONTH MONTHS YEAR
DIVIDENDS PER SHARE 3.41(CENTS) 21.09(CENTS) 42.00(CENTS)
ANNUALIZED DIVIDEND RATE 4.07% 4.13% 4.13%
30-DAY ANNUALIZED YIELD 3.67% - -
30-DAY ANNUALIZED TAX-EQUIVALENT YIELD 5.73% - -
</TABLE>
DIVIDENDS per share show the income paid by the class for a set
period. If you annualize this number, based on an average net asset
value of $10.20 over the past one month, $10.19 over the past six
months and $10.16 over the past one year, you can compare the class'
income over these three periods. The 30-day annualized YIELD is a
standard formula for all funds based on the yields of the bonds in the
fund, averaged over the past 30 days. This figure shows you the yield
characteristics of the fund's investments at the end of the period.
The tax-equivalent yield shows what you would have to earn on a
taxable investment to equal the class' tax-free yield, if you're in
the 36% federal tax bracket, but does not reflect payment of the
federal alternative minimum tax, if applicable. If Fidelity had not
reimbursed certain class expenses, the yield and tax-equivalent yield
would have been 3.37% and 5.27%, respectively.
FUND TALK: THE MANAGER'S OVERVIEW
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 Norm Lind, Portfolio Manager of Fidelity Advisor
Short-Intermediate Municipal Income Fund
Q. HOW DID THE FUND PERFORM, NORM?
A. For the 12-month period that ended November 30, 1997, the fund's
Institutional Class shares had a total return of 4.52%. To get a sense
of how the fund did relative to its competitors, the
short-intermediate municipal debt funds average returned 4.39% for the
same 12-month period, according to Lipper Analytical Services.
Additionally, the Lehman Brothers 1-5 Year Municipal Bond Index
returned 4.83% for the same one-year period.
Q. HAVE YOU ALTERED YOUR STRATEGY DURING THE YEAR?
A. Yes, in one sense. Early in the year, the fund had significant
holdings in bonds with maturities of between one and four years.
During that period, the demand for these bonds was strong, helping
them to generally outperform other securities in the
short-intermediate part of the municipal market. But by mid-year, I
sold some of those bonds and replaced them with bonds maturing in five
to seven years. As the municipal bond market rallied in the summer and
fall, these bonds performed better than shorter-term securities,
helping the fund's performance. Despite these alterations, I kept the
fund's duration - which is a measure of the fund's sensitivity to
interest rate changes - "neutral" relative to the short-intermediate
part of the municipal bond market, as represented by the Lehman
Brothers index. By that, I mean that the fund wasn't any more or any
less sensitive to changes in interest rates than the index. When I
bought the longer-term five- to seven-year holdings - which are more
sensitive to interest-rate changes than shorter-term bonds - I offset
them with securities that matured in less than one year, thereby
keeping the fund's duration in line with the market as a whole.
Q. WHAT WERE SOME OF THE FUND'S BEST PERFORMERS DURING THE PERIOD?
A. Some of the fund's biggest winners throughout the year were bonds
with credit ratings of Baa - as judged by Moody's Investors Service -
which were boosted by favorable supply and demand conditions. Because
Baa-rated bonds typically offer the highest yields among municipal
bonds deemed "investment-grade," demand for them was strong.
Alternatively, the supply of these bonds was limited. As I've
discussed in previous reports to shareholders, roughly half of all
municipal bonds issued are insured and carry credit ratings of Aaa.
Consequently, only a small portion of bonds issued during the past
year had Baa-ratings. The upshot was that Baa bond prices generally
rose as investors were forced to vie for a limited number of them.
Some of the fund's best-performing Baa-rated bonds were those issued
by New York City, which benefited from the same trends that benefited
the Baa-rated sector as well as from the city's strong economy and
improved fiscal situation.
Q. WERE THERE ANY DISAPPOINTMENTS?
A. My disappointments were not a result of what I owned, but from not
owning more of some of the stronger performers. For example, bonds
issued in California generally performed well during the period. While
the fund did benefit from its California holdings, it didn't fully
participate in their rally by having more invested there.
Q. WHICH SECTORS OF THE MUNICIPAL MARKET WERE ATTRACTIVE DURING THE
PERIOD?
A. I continued to like general obligation bonds (G0s), which are
backed by the full faith and credit - including the taxing power - of
the issuer - be it a city, county or state. GOs are repaid by general
revenues, includings taxes, and as such tend to do well when the
economy is strong and tax receipts rise. That's exactly what happened
with New York City bonds. In addition, the fund had a relatively large
stake, compared to the overall municipal market, in education bonds.
Most of the fund's education bonds were student loan securities that
offered attractive yields relative to other bonds with comparable
credit ratings and maturities.
Q. WHAT'S AHEAD FOR THE FUND?
A. As always, the direction of interest rates will be the primary
factor determining the performance of municipal bonds. At present, it
doesn't appear that the market has any firm conviction about whether
interest rates are headed higher or lower. Many observers argue that
recent economic and fiscal problems in Southeast Asia ultimately will
slow the U.S. economy enough to ward off future interest-rate hikes.
Others argue that the economy is still strong enough to prompt the
Federal Reserve Board to raise interest rates as a guard against
inflation. Until those countervailing trends are reconciled, I expect
we'll see some continued volatility in the bond markets.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
NORM LIND ON MUNICIPAL SUPPLY:
"The amount of new municipal
bonds in a given period can be an
important factor in determining the
market's performance. New-issue
supply has declined over the past
several years and has helped munis
outperform U.S. Treasuries during
the past year. However, if interest
rates continue to fall in 1998 as they
did in the latter portion of 1997,
more municipal issuers may
refinance their older, more
expensive debt at current lower
interest rates, or issue new debt.
Those actions effectively would
increase municipal supply. On the
other hand, if interest rates stay at
current levels or rise, I would
expect supply to remain fairly
stable."
(solid bullet) Effective January 1, 1998, the
Class A and Class T shares are no
longer available for purchase or
exchange to new accounts pending
a proposed reorganization.
However, existing shareholders
of Class A and Class T can
continue to purchase shares of the
class in which they currently hold
shares.
(solid bullet) Effective January 1, 1998, the
Institutional Class shares are no
longer available for purchase or
exchange to new accounts pending
a proposed reorganization.
However, existing shareholders
of the Institutional Class can
continue to purchase Institutional
Class shares.
FUND FACTS
GOAL: to seek high current
income exempt from federal
income taxes consistent with
preservation of capital
START DATE: March 16, 1994
SIZE: as of November 30,
1997, more than $23 million
MANAGER: Norm Lind, since
1995; joined Fidelity in 1986
(checkmark)
INVESTMENT CHANGES
TOP FIVE STATES AS OF NOVEMBER 30, 1997
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE STATES
6 MONTHS AGO
TEXAS 16.7 20.5
NEW YORK 11.4 15.4
CALIFORNIA 8.5 7.8
VIRGINIA 6.5 2.1
SOUTH CAROLINA 5.8 5.3
TOP FIVE SECTORS AS OF NOVEMBER 30, 1997
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE SECTORS
6 MONTHS AGO
GENERAL OBLIGATION 35.9 34.0
EDUCATION 21.8 16.1
ELECTRIC REVENUE 14.7 14.7
TRANSPORTATION 5.5 4.5
ESCROWED/PRE-REFUNDED 5.3 11.1
AVERAGE YEARS TO MATURITY AS OF NOVEMBER 30, 1997
6 MONTHS AGO
YEARS 3.2 3.2
AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY
DOLLAR AMOUNT.
DURATION AS OF NOVEMBER 30, 1997
6 MONTHS AGO
YEARS 3.0 2.8
DURATION SHOWS HOW MUCH A BOND FUND'S PRICE FLUCTUATES WITH CHANGES IN
COMPARABLE INTEREST RATES. IF RATES RISE 1%, FOR EXAMPLE, A FUND WITH
A FIVE-YEAR DURATION IS LIKELY TO LOSE ABOUT 5% OF ITS VALUE. OTHER
FACTORS ALSO CAN INFLUENCE A BOND FUND'S PERFORMANCE AND SHARE PRICE.
ACCORDINGLY, A BOND FUND'S ACTUAL PERFORMANCE MAY DIFFER FROM THIS
EXAMPLE.
QUALITY DIVERSIFICATION (MOODY'S RATINGS)
AS OF NOVEMBER 30, 1997 AS OF MAY 31, 1997
AAA 56.7%
AA, A 30.5%
BAA 12.8%
SHORT-TERM
INVESTMENTS 0.0%
AAA 53.6%
AA, A 26.3%
BAA 14.3%
SHORT-TERM
INVESTMENTS 5.8%
ROW: 1, COL: 1, VALUE: 0.0
ROW: 1, COL: 2, VALUE: 12.8
ROW: 1, COL: 3, VALUE: 30.5
ROW: 1, COL: 4, VALUE: 56.7
ROW: 1, COL: 1, VALUE: 5.8
ROW: 1, COL: 2, VALUE: 14.3
ROW: 1, COL: 3, VALUE: 26.3
ROW: 1, COL: 4, VALUE: 53.6
WHERE MOODY'S RATINGS ARE NOT AVAILABLE, WE HAVE USED S&P RATINGS.
AMOUNTS SHOWN ARE AS A
PERCENTAGE OF THE FUND'S INVESTMENTS.
INVESTMENTS NOVEMBER 30, 1997
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES
MUNICIPAL BONDS - 100%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
ALABAMA - 0.7%
Mobile Board of Wtr. & Swr. Commissioners Wtr. Svc. Rev.
9.875% 1/1/98 (Escrowed to Maturity) (b) $ 175,000 $ 175,802
607148PZ
ALASKA - 1.3%
Alaska Student Loan Corp. Student Loan Rev.
Series A, 5% 7/1/03 (AMBAC Insured) (a) 300,000 305,625 011857EH
CALIFORNIA - 8.5%
California Rural Home Mtg. Fin. Auth. Lease Rev.
(Rural Lease Purchase) Series A, 4.45%
8/1/01 (MBIA Insured) 1,000,000 1,011,250 130574AA
Central Valley Fing. Auth. Rev. (Carson Ice-Generation Proj.)
5% 7/1/98 1,000,000 1,004,760 155689AA
2,016,010
COLORADO - 1.1%
Denver City & County Arpt. Rev. Series A,
6.90% 11/15/98 (a) 250,000 256,283 249181LB
FLORIDA - 2.6%
Dade County Aviation Rev. Rfdg. (Miami Int'l Arpt.)
Series A, 5.25% 10/1/01 (FSA Insured) (a) 500,000 516,875
233455C9
St. Petersburg Excise Tax Rev. Rfdg. 3.80% 10/1/98
(FGIC Insured) 100,000 100,093 793257AE
616,968
GEORGIA - 2.3%
Georgia Gen. Oblig. Series D, 6.80% 8/1/01 500,000 545,000
373382ZV
INDIANA - 2.3%
Indianapolis Resource Recovery Rev. Rfdg. (Ogden Martin
Sys. Inc. Proj.) 6.50% 12/1/01 (AMBAC Insured) 500,000 539,375
455356BE
LOUISIANA - 4.4%
Louisiana Pub. Facs. Auth. Rev. Rfdg.
(Student Loan) Sr. Series A-1, 6.20% 3/1/01 995,000 1,043,506
54640AJY
MAINE - 4.3%
Maine Edl. Loan Marketing Corp. Student Loan Rev. Series A-4,
5.45% 11/1/99 (a) 1,000,000 1,025,000 560409BA
MASSACHUSETTS - 2.1%
Massachusetts Health & Edl. Facs. Auth. Rev. Rfdg.
(Fairview Extended Care) Series B, 4.55% 7/14/02
(MBIA Insured) LOC BankBoston N.A 300,000 300,000 57585JRR
Nantucket Gen. Oblig. Rfdg.
5% 7/15/03 (MBIA Insured) 200,000 206,250 630191JT
506,250
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
MICHIGAN - 4.5%
Michigan Hosp. Fin. Auth. Rev. Rfdg. (Mercy Health Services)
Series S, 5.75% 8/15/05 $ 200,000 $ 214,000 59465ELV
Michigan Pub. Pwr. Agcy. Rev. Rfdg. (Campbell Proj.)
Series A, 5.50% 1/1/04 (AMBAC Insured) 700,000 736,750 594570FQ
Utica Commty. Schools Bldg. & Site Rfdg.
4.10% 5/1/98 (FGIC Insured) 125,000 125,180 917661SU
1,075,930
MINNESOTA - 0.7%
Minneapolis Gen. Oblig. (Cap. Appreciation)
Series B, 0% 12/1/02 200,000 161,250 60374AQX
MONTANA - 5.5%
Montana Higher Ed. Student Assistance Corp. Student Loan
Rev. Series B, 6.60% 12/1/99 (a) 1,240,000 1,295,800 612130CP
NEVADA - 2.5%
Clark County School Dist. Series A,
9.75% 6/1/01 (MBIA Insured) 500,000 588,750 181054UB
NEW MEXICO - 1.1%
Albuquerque Arpt. Rev. Rfdg.
6.25% 7/1/00 (AMBAC Insured) (a) 250,000 261,563 013538EK
NEW YORK - 11.4%
New York City Gen. Oblig. Rfdg. Series H,
7.875% 8/1/00 1,000,000 1,090,000 649650TP
New York City Muni. Assistance Corp. Rfdg.
Series E, 5.50% 7/1/00 1,000,000 1,033,750 626190F9
New York State Local Gov't. Assistance Corp. Rfdg.
Series A, 5.50% 4/1/04 (AMBAC Insured) 100,000 105,750 649876SC
New York State Thruway Auth. Svc. Contract
Rev. (Local Hwy. & Bridge):
5.40% 4/1/03 250,000 258,750 650017DB
6% 4/1/03 200,000 212,750 650017BR
2,701,000
NORTH CAROLINA - 3.3%
North Carolina Muni. Pwr. Agcy. #1 Catawba
Elec. Rev. Rfdg. 5.75% 1/1/02 750,000 780,938 658203QB
OHIO - 1.2%
Columbus Variable Purp. Wtrwks. & Swr.
Impt. Unltd. Tax 12% 5/15/98 270,000 279,680 199488VJ
PENNSYLVANIA - 3.7%
Pennsylvania Convention Ctr. Auth. Rev. Rfdg.
Series A, 5.75% 9/1/99 215,000 219,838 708681AY
Pennsylvania Higher Ed. Facs. Auth. Health Svcs. Rev. Rfdg.
(Penn. Univ.) Series A, 5.125% 1/1/01 650,000 666,250 709172CQ
886,088
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
SOUTH CAROLINA - 5.8%
South Carolina Gen. Oblig. (State Hwy.)
5.40% 8/1/03 $ 1,300,000 $ 1,374,750 837107JW
TENNESSEE - 3.4%
Memphis-Shelby County Arpt. Auth. Arpt. Rev. Rfdg. Series A,
5.25% 2/15/01 (MBIA Insured) (a) 275,000 282,563 586111EB
Metropolitan Gov't Nashville & Davidson County
Series A, 5.125% 11/15/05 505,000 525,200 592013J4
807,763
TEXAS - 16.7%
Austin Gen. Oblig. Pub. Impt. Ltd. Tax
7% 9/1/01 1,000,000 1,093,750 052394SC
Austin Independent School Dist. School Bldg.
8.125% 8/1/01 (PSF Guaranteed)
(Escrowed to Maturity) (b) 500,000 565,625 052429F5
Brazos Higher Ed. Auth. Student Loan Rev. Rfdg.
Series A-1, 6.05% 12/1/01 (a) 500,000 525,000 106238DE
Deer Park Independent School Dist. Rfdg.
0% 2/15/03 (PSF Guaranteed) 200,000 158,500 244127PN
Northside Independent School Dist. School Bldg.
8.375% 2/1/00 (PSF Guaranteed) 500,000 543,122 6670262Q
San Antonio Gen. Oblig. Rfdg. (Gen. Impt.)
5.50% 8/1/02 (c) 125,000 128,906 796236JF
Texas A&M Univ. Rev. Rfdg. (Fing. Sys.)
5% 5/15/00 (c) 980,000 988,575 882135NZ
4,003,478
UTAH - 1.9%
Intermountain Pwr. Agcy. Pwr. Supply Rev. Rfdg.
(Cap. Appreciation) Series B, 0% 7/1/00 (MBIA Insured) 500,000
448,125 458840ZH
VIRGINIA - 6.5%
Fairfax County Pub. Impt. Series A, 5.50% 6/1/99 1,000,000
1,023,750 303820PY
Virginia Pub. School Auth. School Fing. Series A,
6.20% 1/1/00 (Pre-Refunded to 1/1/00 @ 102) (b) 500,000 530,000
9281764U
1,553,750
WASHINGTON - 2.2%
Washington Pub. Pwr. Supply Sys. Rev. Rfdg.
(Nuclear Proj. #1) Series A, 7.25% 7/1/99 500,000 523,750
939827LB
TOTAL INVESTMENTS IN SECURITIES - 100%
(Cost $23,368,945) $ 23,772,434
LEGEND
18. Private activity obligations whose interest is subject to the
federal alternative minimum tax for individuals.
19. Security collateralized by an amount sufficient to pay interest
and principal.
20. Security purchased on a delayed delivery or when-issued basis (see
Note 2 of Notes to Financial Statements).
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total
value of investment in securities, is as follows (ratings are
unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 87.2% AAA, AA, A 70.0%
Baa 8.6% BBB 12.8%
Ba 0.0% BB 0.0%
B 0.0% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
The percentage not rated by Moody's or S&P amounted to 0.0%.
The distribution of municipal securities by revenue source, as a
percentage of total value of investment in securities, is as follows:
General Obligation 35.9%
Education 21.8
Electric Revenue 14.7
Transportation 5.5
Escrowed/Pre-Refunded 5.3
Special Tax 5.2
Health Care 5.0
Others (individually less than 5%) 6.6
TOTAL 100.0%
INCOME TAX INFORMATION
At November 30, 1997 the aggregate cost of investment securities for
income tax purposes was $23,368,945. Net unrealized appreciation
aggregated $403,489, of which $406,360 related to appreciated
investment securities and $2,871 related to depreciated investment
securities.
The fund hereby designates approximately $12,000 as a capital gain
dividend for the purpose of the dividend paid deduction.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
NOVEMBER 30, 1997
ASSETS
INVESTMENT IN SECURITIES, AT VALUE (COST $23,368,945) - $ 23,772,434
SEE ACCOMPANYING SCHEDULE
CASH 45,833
RECEIVABLE FOR INVESTMENTS SOLD 105,395
INTEREST RECEIVABLE 443,524
TOTAL ASSETS 24,367,186
LIABILITIES
PAYABLE FOR INVESTMENTS PURCHASED $ 1,119,035
DELAYED DELIVERY
DISTRIBUTIONS PAYABLE 15,097
DISTRIBUTION FEES PAYABLE 2,813
ACCRUED MANAGEMENT FEE 6,882
OTHER PAYABLES AND ACCRUED EXPENSES 31,785
TOTAL LIABILITIES 1,175,612
NET ASSETS $ 23,191,574
NET ASSETS CONSIST OF:
PAID IN CAPITAL $ 22,746,361
ACCUMULATED UNDISTRIBUTED NET REALIZED GAIN (LOSS) 41,724
ON INVESTMENTS
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS 403,489
NET ASSETS $ 23,191,574
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
NOVEMBER 30, 1997
CALCULATION OF MAXIMUM OFFERING PRICE $10.20
CLASS A:
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
($639,381 (DIVIDED BY) 62,680 SHARES)
MAXIMUM OFFERING PRICE PER SHARE (100/98.50 OF $10.20) $10.36
CLASS T: $10.21
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
($21,916,347 (DIVIDED BY) 2,147,471 SHARES)
MAXIMUM OFFERING PRICE PER SHARE (100/98.50 OF $10.21) $10.37
INSTITUTIONAL CLASS: $10.21
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER
SHARE ($635,846 (DIVIDED BY) 62,284 SHARES)
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED NOVEMBER 30, 1997
INTEREST INCOME $ 1,251,876
EXPENSES
MANAGEMENT FEE $ 99,898
TRANSFER AGENT FEES 54,809
DISTRIBUTION FEES 37,591
ACCOUNTING FEES AND EXPENSES 65,365
NON-INTERESTED TRUSTEES' COMPENSATION 179
CUSTODIAN FEES AND EXPENSES 4,383
REGISTRATION FEES 58,592
AUDIT 37,671
LEGAL 730
MISCELLANEOUS 602
TOTAL EXPENSES BEFORE REDUCTIONS 359,820
EXPENSE REDUCTIONS (130,260) 229,560
NET INTEREST INCOME 1,022,316
REALIZED AND UNREALIZED GAIN (LOSS)
NET REALIZED GAIN (LOSS) ON:
INVESTMENT SECURITIES 63,343
FUTURES CONTRACTS (1,274) 62,069
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON (29,224)
INVESTMENT SECURITIES
NET GAIN (LOSS) 32,845
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 1,055,161
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30,
1997 1996
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS $ 1,022,316 $ 1,180,079
NET INTEREST INCOME
NET REALIZED GAIN (LOSS) 62,069 130,000
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) (29,224) (87,628)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 1,055,161 1,222,451
FROM OPERATIONS
DISTRIBUTIONS TO SHAREHOLDERS (1,022,316) (1,180,079)
FROM NET INTEREST INCOME
FROM NET REALIZED GAIN (86,476) (83,995)
TOTAL DISTRIBUTIONS (1,108,792) (1,264,074)
SHARE TRANSACTIONS - NET INCREASE (DECREASE) (7,315,760) 1,194,041
TOTAL INCREASE (DECREASE) IN NET ASSETS (7,369,391) 1,152,418
NET ASSETS
BEGINNING OF PERIOD 30,560,965 29,408,547
END OF PERIOD $ 23,191,574 $ 30,560,965
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
YEARS ENDED NOVEMBER 30,
1997 1996 D
SELECTED PER-SHARE DATA
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%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 639 $ 186
RATIO OF EXPENSES TO AVERAGE NET ASSETS .90% E .90% A,
E
RATIO OF NET INTEREST INCOME TO AVERAGE NET ASSETS 4.00% 4.06% A
PORTFOLIO TURNOVER RATE 41% 62%
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
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 FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - CLASS T
YEARS ENDED NOVEMBER 30,
1997 1996 1995 1994 D
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
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 - .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%
RATIOS AND SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD (000 OMITTED) $ 21,916 $ 29,887 $ 29,274 $ 16,563
RATIO OF EXPENSES TO AVERAGE NET ASSETS .90% E .90% E .82% E .75% A,
E
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER .90% .89% F .82% .75% A
EXPENSE REDUCTIONS
RATIO OF NET INTEREST INCOME TO AVERAGE 3.99% 3.97% 4.25% 3.74% A
NET ASSETS
PORTFOLIO TURNOVER RATE 41% 62% 80% 111% A
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
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 MARCH 16, 1994 (COMMENCEMENT OF OPERATIONS) 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 (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
YEARS ENDED NOVEMBER 30,
1997 1996 1995 D
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SELECTED PER-SHARE DATA
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 RETURN B, C 4.52% 4.19% 3.37%
RATIOS AND SUPPLEMENTAL DATA
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 .75% .74% F .75% A
EXPENSE REDUCTIONS
RATIO OF NET INTEREST INCOME TO AVERAGE NET ASSETS 4.14% 4.03% 4.18% A
PORTFOLIO TURNOVER RATE 41% 62% 80%
</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 (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
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 (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1997
29. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Short-Intermediate Municipal Income Fund (the fund)
is a fund of Fidelity Advisor Series VI (the trust) and is authorized
to issue an unlimited number of shares. The trust is registered under
the Investment Company Act of 1940, as amended (the 1940 Act), as an
open-end management investment company organized as a Massachusetts
business trust.
The fund offers Class A, Class T, and Institutional Class shares, each
of which has equal rights as to assets and voting privileges. Each
class has exclusive voting rights with respect to its distribution
plan. Interest income, realized and unrealized capital gains and
losses, the common expenses of the fund, and certain fund-level
expense reductions, if any, are allocated on a pro rata basis to each
class based on the relative net assets of each class to the total net
assets of the fund. Each class of shares differs in its respective
distribution, transfer agent, registration, and certain other
class-specific fees, expenses, and expense reductions.
The financial statements have been prepared in conformity with
generally accepted accounting principles which permit management to
make certain estimates and assumptions at the date of the financial
statements. The following summarizes the significant accounting
policies of the fund:
SECURITY VALUATION. Securities are valued based upon a computerized
matrix system and/or appraisals by a pricing service, both of which
consider market transactions and dealer-supplied valuations.
Securities for which quotations are not readily available are valued
at their fair value as determined in good faith under consistently
applied procedures under the general supervision of the Board of
Trustees. Short-term securities with remaining maturities of sixty
days or less for which quotations are not readily available are valued
at amortized cost or original cost plus accrued interest, both of
which approximate current value.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent that it distributes substantially all of
its taxable income for its fiscal year. The schedule of investments
includes information regarding income taxes under the caption "Income
Tax Information."
INTEREST INCOME. Interest income, which includes amortization of
premium and accretion of original issue discount, is accrued as
earned.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
between the funds in the trust.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are declared daily and
paid monthly from net interest income. Distributions from realized
gains, if any, are recorded on the ex-dividend date. Income dividends
and capital gain distributions are declared separately for each class.
Income and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. These differences, which may result in
distribution reclassifications, are primarily due to differing
treatments for losses deferred due to futures. The fund also utilized
earnings and profits distributed to shareholders on redemption of
shares as a part of the dividends paid deduction for income tax
purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and
may affect the per-share allocation between net interest income and
realized and unrealized gain (loss). Accumulated undistributed net
realized gain (loss) on investments may include temporary book and tax
basis differences that will reverse in a subsequent period. Any
taxable income or gain remaining at fiscal year end is distributed in
the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
30. OPERATING POLICIES.
MUNICIPAL CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by
the Securities and Exchange Commission, the fund may invest in the
Municipal Central Cash Fund (the Cash Fund) managed by FMR Texas Inc.,
an affiliate of Fidelity Management & Research Company (FMR). The Cash
Fund is an open-end money market fund available only to investment
companies and other accounts managed by FMR and its affiliates. The
Cash Fund seeks preservation of capital, liquidity, and current income
by investing in high-quality, short-term municipal securities of
various states and municipalities. Income distributions from the Cash
Fund are declared daily and paid monthly from net interest income.
Income distributions received by the fund are recorded as interest
income in the accompanying financial statements.
WHEN-ISSUED SECURITIES. The fund may purchase or sell securities on a
when-issued basis. Payment and delivery may take place a month or more
after the date of the transaction. The price of the underlying
securities is fixed at the time the transaction is negotiated. The
market values of the securities purchased on a when-issued or forward
commitment basis are identified as such in the fund's schedule of
investments. The fund may receive compensation for interest forgone in
the purchase of a when-issued security. With respect to purchase
commitments, the fund identifies securities as segregated in its
custodial
2. OPERATING POLICIES - CONTINUED
WHEN-ISSUED SECURITIES - CONTINUED
records with a value at least equal to the amount of the commitment.
The payables and receivables associated with the purchases and sales
of when-issued securities having the same settlement date and broker
are offset. When-issued securities that have been purchased from and
sold to different brokers are reflected as both payables and
receivables in the statement of assets and liabilities under the
caption "Delayed delivery." Losses may arise due to changes in the
market value of the underlying securities, if the counterparty does
not perform under the contract, or if the issuer does not issue the
securities due to political, economic, or other factors.
FUTURES CONTRACTS. The fund may use futures contracts to manage its
exposure to the bond market and to fluctuations in interest rates.
Buying futures tends to increase the fund's exposure to the underlying
instrument, while selling futures tends to decrease the fund's
exposure to the underlying instrument or hedge other fund investments.
Losses may arise from changes in the value of the underlying
instruments or if the counterparties do not perform under the
contracts' terms. Gains (losses) are realized upon the expiration or
closing of the futures contracts. Futures contracts are valued at the
settlement price established each day by the board of trade or
exchange on which they are traded.
31. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $10,461,839 and $16,922,928, respectively.
The market value of futures contracts opened and closed during the
period amounted to $2,323,606 and $2,322,332, respectively.
32. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus a
fixed individual fund fee rate applied to the average net assets of
the fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds advised by FMR. The rates ranged from .1100% to .3700% for the
period. The annual individual fund fee rate is .25%. In the event that
these rates were lower than the contractual rates in effect during the
period, FMR voluntarily implemented the above rates, as they resulted
in the same or a lower management fee. For the period, the management
fee was equivalent to an annual rate of .39% of average net assets.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the
1940 Act, the Trustees have adopted separate distribution plans with
respect to each class of shares (collectively referred to as "the
Plans"). Under certain of the Plans, the class pays Fidelity
Distributors Corporation (FDC), an affiliate of FMR, a distribution
and service fee. This fee is based on the following annual rates of
the average net assets of each applicable class:
CLASS A .15%
CLASS T .15%
For the period, each class paid FDC the following amounts, a portion
of which was paid to securities dealers, banks and other financial
institutions for the distribution of each class' applicable shares,
and providing shareholder support services:
PAID TO DEALERS'
FDC PORTION
CLASS A $ 523 $ 523
CLASS T 37,068 37,068
$ 37,591 $ 37,591
Under the Plans, FMR or FDC may use its resources to pay
administrative and promotional expenses related to the sale of each
class' shares. The Plans also authorize payments to third parties that
assist in the sale of each class' shares or render shareholder support
services.
SALES LOAD. FDC receives a front-end sales charge of up to 1.50% for
selling Class A and Class T shares of the fund.
For the period, FDC received the following sales charge amounts
related to each class, a portion of which is paid to securities,
dealers, banks, and other financial institutions:
PAID TO DEALERS'
FDC PORTION
CLASS A $ 1,921 $ 1,596
CLASS T 44,628 21,694
$ 46,549 $ 23,290
TRANSFER AGENT AND ACCOUNTING FEES. UMB Bank, n.a. (UMB) is the
custodian, transfer agent, and shareholder servicing agent for the
fund's Class A, Class T, and Institutional Class shares. UMB has
entered into a sub-arrangement with Fidelity Investments Institutional
Operations Company, Inc. (FIIOC) with respect to all classes of the
fund to perform the transfer, dividend disbursing, and shareholder
servicing agent functions. FIIOC an affiliate of FMR, receives account
fees and asset-based fees that vary according to the account size and
type of account of the shareholders of the respective classes of the
fund. All fees are paid to FIIOC by UMB, which is reimbursed by each
class for such payments.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
TRANSFER AGENT AND ACCOUNTING FEES - CONTINUED
FIIOC pays for typesetting, printing and mailing of all shareholder
reports. For the period, each class paid the following transfer agent
fees:
TRANSFER AMOUNT % OF
AGENT AVERAGE
NET ASSETS
CLASS A UMB $ 1,347 .39
CLASS T UMB 51,815 .21
INSTITUTIONAL CLASS UMB 1,647 .30
$ 54,809
UMB also has a sub-contract with Fidelity Service Company, Inc. (FSC),
an affiliate of FMR, under which FSC maintains the fund's accounting
records. The fee is based on the level of average net assets for the
month plus out-of-pocket expenses.
33. EXPENSE REDUCTIONS.
FMR voluntarily agreed to reimburse operating expenses (excluding
interest, taxes, brokerage commissions and extraordinary expenses)
above the following annual rates or range of annual rates of average
net assets for each of the following classes:
FMR REIMBURSEMENT
EXPENSE
LIMITATIONS
CLASS A .90% $ 29,665
CLASS T .90% 81,498
INSTITUTIONAL CLASS .75% 19,097
$ 130,260
34. BENEFICIAL INTEREST.
At the end of the period, one shareholder was record owner of
approximately 18% of the total outstanding shares of the fund.
35. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
YEARS ENDED NOVEMBER 30,
1997 1996 A
CLASS A
FROM NET INTEREST INCOME $ 13,958 $ 1,658
FROM NET REALIZED GAIN 543 -
TOTAL $ 14,501 $ 1,658
CLASS T
FROM NET INTEREST INCOME $ 985,656 $ 1,165,115
FROM NET REALIZED GAIN 84,495 83,601
TOTAL $ 1,070,151 $ 1,248,716
INSTITUTIONAL CLASS
FROM NET INTEREST INCOME $ 22,702 $ 13,306
FROM NET REALIZED GAIN 1,438 394
TOTAL $ 24,140 $ 13,700
$ 1,108,792 $ 1,264,074
A DISTRIBUTIONS FOR CLASS A ARE FOR THE PERIOD SEPTEMBER 3, 1996
(COMMENCEMENT OF SALE OF SHARES) TO NOVEMBER 30, 1996 .
36. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SHARES DOLLARS
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1997 1996 A 1997 1996 A
CLASS A 51,845 18,079 $ 526,388 $ 182,623
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 916 164 9,312 1,669
SHARES REDEEMED (8,324) - (84,132) -
NET INCREASE (DECREASE) 44,437 18,243 $ 451,568 $ 184,292
CLASS T 1,381,485 1,927,010 $ 14,006,050 $ 19,536,753
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 84,689 103,571 859,694 1,051,496
SHARES REDEEMED (2,246,722) (1,962,525) (22,781,470) (19,930,259)
NET INCREASE (DECREASE) (780,548) 68,056 $ (7,915,726) $ 657,990
INSTITUTIONAL CLASS 59,843 36,423 $ 608,273 $ 370,359
SHARES SOLD
REINVESTMENT OF DISTRIBUTIONS 1,125 713 11,437 7,234
SHARES REDEEMED (46,406) (2,548) (471,312) (25,834)
NET INCREASE (DECREASE) 14,562 34,588 $ 148,398 $ 351,759
</TABLE>
A SHARE TRANSACTIONS FOR CLASS A ARE FOR THE PERIOD SEPTEMBER 3, 1996
(COMMENCEMENT OF SALE OF SHARES) TO NOVEMBER 30, 1996
37. REGISTRATION FEES.
For the period, each class paid the following amounts to register its
shares for sale:
REGISTRATION
FEES
CLASS A $ 28,087
CLASS T 13,406
INSTITUTIONAL CLASS 17,099
$ 58,592
38. PROPOSED REORGANIZATION.
The Board of Trustees of Fidelity Advisor Short-Intermediate Municipal
Income Fund has approved an Agreement and Plan of Reorganization
("Agreement") between the fund and Fidelity Advisor Intermediate
Municipal Income Fund ("Reorganization"). The Agreement provides for
the transfer of all of the assets of the fund to Fidelity Advisor
Intermediate Municipal Income Fund in exchange solely for the number
of shares of Class A, Class T, and Institutional Class of Fidelity
Advisor Intermediate Municipal Income Fund having the same relative
net asset value as the outstanding shares of Class A, Class T, and
Institutional Class of the fund as of the close of business of the
New York Stock Exchange on the day that the Reorganization is
effective and the assumption by Fidelity Advisor Intermediate
Municipal Income Fund of all of the liabilities of the fund. The
Reorganization can be consummated only if, among other things, it is
approved by the vote of a majority (as defined by the 1940 Act) of
outstanding voting securities of the fund. A Special Meeting of
Shareholders ("Meeting") of the fund will be held on May 4, 1998 to
vote on the Agreement. A detailed description of the proposed
transaction and voting information will be sent to shareholders of the
fund in March, 1998. If the Agreement is approved at the Meeting, the
Reorganization is expected to become effective on or about May 28,
1998.
Effective January 1, 1998, Class A, Class T, and Institutional Class
shares are no longer available for purchase or exchange to new
accounts pending the proposed reorganization. However, existing
shareholders of the Class A, Class T, and Institutional Class can
continue to purchase shares of the class which they currently hold.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Advisor Series VI and the Shareholders of
Fidelity Advisor Short-Intermediate Municipal Income Fund:
We have audited the accompanying statement of assets and liabilities
of Fidelity Advisor Series VI: Fidelity Advisor Short-Intermediate
Municipal Income Fund, including the schedule of portfolio
investments, as of November 30, 1997, and the related statement of
operations for the year then ended, the statement of changes in net
assets for each of the two years in the period then ended and the
financial highlights of Class A, Class T, and Institutional Class for
each of the periods indicated therein. These financial statements and
financial highlights are the responsibility of the fund's management.
Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of November 30, 1997 by
correspondence with the custodian and brokers. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well
as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of Fidelity Advisor Series VI: Fidelity Advisor
Short-Intermediate Municipal Income Fund as of November 30, 1997, the
results of its operations for the year then ended, the changes in its
net assets for each of the two years in the period then ended, and the
financial highlights of Class A, Class T, and Institutional Class for
each of the periods indicated therein, in conformity with generally
accepted accounting principles.
/s/COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
January 16, 1998
DISTRIBUTIONS
The Board of Trustees of Fidelity Advisor Short-Intermediate Municipal
Income Fund voted to pay to shareholders of record at the opening of
business on record date, the following distributions derived from
capital gains realized from sales of portfolio securities, and
dividends derived from net investment income:
PAY DATE RECORD DATE DIVIDENDS CAPITAL GAINS
Institutional Class 12/29/97 12/26/97 $__ $.014
The fund will notify shareholders in January 1998 of these percentages
for use in preparing 1997 income tax returns.
During fiscal year ended 1997, 100% of the fund's income dividends was
free from federal income tax, and 19.53% of the fund's income
dividends was subject to the federal alternative minimum tax.
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Fred L. Henning, Jr., Vice President
Dwight D. Churchill, Vice President
Norman U. Lind, Vice President
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
ADVISORY BOARD
J. Gary Burkhead
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
UMB Bank, n.a.
Kansas City, MO
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA
CUSTODIAN
UMB Bank, n.a.
Kansas City, MO
FOCUS FUNDS
Fidelity Advisor Consumer
Industries Fund
Fidelity Advisor Cyclical
Industries Fund
Fidelity Advisor Financial
Services Fund
Fidelity Advisor Health Care Fund
Fidelity Advisor Natural
Resources Fund
Fidelity Advisor Technology Fund
Fidelity Advisor Utilities Growth Fund
GROWTH FUNDS
Fidelity Advisor International Capital Appreciation Fund
Fidelity Advisor Overseas Fund
Fidelity Advisor TechnoQuant
Growth Fund
SM
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 Emerging Markets Income Fund
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
Fidelity Advisor Intermediate Municipal Income Fund
Fidelity Advisor Short-Intermediate Municipal Income Fund
MONEY MARKET FUNDS
Prime Fund
Treasury Fund
Tax-Exempt Fund
(registered trademark)
Fidelity Advisor Short-Intermediate Municipal Income Fund
Fidelity Advisor Intermediate Municipal Income Fund
(Funds of Fidelity Advisor Series VI)
FORM N-14
STATEMENT OF ADDITIONAL INFORMATION
March 9, 1998
This Statement of Additional Information, relates to the proposed
reorganization whereby Fidelity Advisor Intermediate Municipal Income
Fund would acquire all of the assets of Fidelity Advisor
Short-Intermediate Municipal Income Fund, both funds of Fidelity
Advisor Series VI, and assume all of Fidelity Advisor
Short-Intermediate Municipal Income Fund's liabilities in exchange
solely for shares of beneficial interest in Class A, Class T, and
Institutional Class of Fidelity Advisor Intermediate Municipal Income
Fund.
This Statement of Additional Information consists of this cover page
and the following described documents, each of which is incorporated
herein by reference:
21. The Statement of Additional Information of Fidelity Advisor
Intermediate Municipal Income Fund dated October 31, 1997 which was
previously filed via EDGAR (Accession No. 0000722574-97-000306).
22. Supplement to the Statement of Additional Information of Fidelity
Advisor Intermediate Municipal Income Fund dated January 16, 1998,
which was previously filed via EDGAR (Accession No.
0000795422-98-000005).
23. The Prospectuses and Statement of Additional Information of
Fidelity Advisor Short-Intermediate Municipal Income Fund dated
October 31, 1997, which were previously filed via EDGAR (Accession No.
0000722574-97-000306).
24. Supplements to the Prospectuses and Statement of Additional
Information of Fidelity Advisor Short-Intermediate Municipal Income
Fund dated January 16, 1998, which were previously filed via EDGAR
(Accession No. 0000795422-98-000005).
25. The Financial Statements included in the Annual Reports of
Fidelity Advisor Intermediate Municipal Income Fund for the fiscal
year ended November 30, 1997.
26. The Financial Statements included in the Annual Reports of
Fidelity Advisor Short-Intermediate Municipal Income Fund for the
fiscal year ended November 30, 1997.
27. The Pro Forma Financial Statements for Fidelity Advisor
Short-Intermediate Municipal Income Fund and Fidelity Advisor
Intermediate Municipal Income Fund for the period ended November 30,
1997.
This Statement of Additional Information is not a prospectus. A Proxy
Statement and Prospectus dated March 9, 1998, relating to the
above-referenced matter may be obtained from Fidelity Client Services,
82 Devonshire Street, Boston, Massachusetts, 02109. This Statement of
Additional Information relates to, and should be read in conjunction
with, such Proxy Statement and Prospectus.
PART C. OTHER INFORMATION
Item 15. Indemnification
Article XI, Section 2 of the Declaration of Trust sets forth the
reasonable and fair means for determining whether indemnification
shall be provided to any past or present Trustee or officer. It states
that the Registrant shall indemnify any present or past Trustee or
officer to the fullest extent permitted by law against liability and
all expenses reasonably incurred by him in connection with any claim,
action, suit, or proceeding in which he is involved by virtue of his
service as a Trustee, an officer, or both. Additionally, amounts paid
or incurred in settlement of such matters are covered by this
indemnification. Indemnification will not be provided in certain
circumstances, however. These include instances of willful
misfeasance, bad faith, gross negligence, and reckless disregard of
the duties involved in the conduct of the particular office involved.
Pursuant to Section 11 of the Distribution Agreement, the Registrant
agrees to indemnify and hold harmless the Distributor and each of its
directors and officers and each person, if any, who controls the
Distributor within the meaning of Section 15 of the 1933 Act against
any loss, liability, claim, damages or expense arising by reason of
any person acquiring any shares, based upon the ground that the
registration statement, Prospectus, Statement of Additional
Information, shareholder reports or other information filed or made
public by the Registrant included a materially misleading statement or
omission. However, the Registrant does not agree to indemnify the
Distributor or hold it harmless to the extent that the statement or
omission was made in reliance upon, and in conformity with,
information furnished to the Registrant by or on behalf of the
Distributor. The Registrant does not agree to indemnify the parties
against any liability to which they would be subject by reason of
willful misfeasance, bad faith, gross negligence, and reckless
disregard of the obligations and duties under the Distribution
Agreement.
Pursuant to the agreement by which Fidelity Investments Institutional
Operations Company, Inc. ("FIIOC") is appointed sub-transfer agent,
the Transfer Agent agrees to indemnify FIIOC for FIIOC's losses,
claims, damages, liabilities and expenses (including reasonable
counsel fees and expenses) (losses) to the extent that the Transfer
Agent is entitled to and receives indemnification from the Portfolio
for the same events. Under the Transfer Agency Agreement, the
Registrant agrees to indemnify and hold the Transfer Agent harmless
against any losses, claims, damages, liabilities, or expenses
(including reasonable counsel fees and expenses) resulting from:
(1) any claim, demand, action or suit brought by any person other
than the Registrant, including by a shareholder which names the
Transfer Agent and/or the Registrant as a party and is not based on
and does not result from the Transfer Agent's willful misfeasance, bad
faith or negligence or reckless disregard of duties, and arises out of
or in connection with the Transfer Agent's performance under the
Transfer Agency Agreement; or
(2) any claim, demand, action or suit (except to the extent
contributed to by the Transfer Agent's willful misfeasance, bad faith
or negligence or reckless disregard of duties) which results from the
negligence of the Registrant, or from the Transfer Agent's acting upon
any instruction(s) reasonably believed by it to have been executed or
communicated by any person duly authorized by the Registrant, or as a
result of the Transfer Agent's acting in reliance upon advice
reasonably believed by the Transfer Agent to have been given by
counsel for the Registrant, or as a result of the Transfer Agent's
acting in reliance upon any instrument or stock certificate reasonably
believed by it to have been genuine and signed, countersigned or
executed by the proper person.
Item 16. Exhibits
(1) Amended and Restated Declaration of Trust, dated September 14,
1995, is incorporated herein by reference to Exhibit 1 of
Post-Effective Amendment No. 39.
(2) Amended and Restated By-Laws of the Trust are incorporated herein
by reference to Exhibit 2 of Post-Effective Amendment No. 39.
(3) Not applicable.
(4) Agreement and Plan of Reorganization between Fidelity Advisor
Series VI: Fidelity Advisor Short-Intermediate Municipal Income Fund
and Fidelity Advisor Series VI: Fidelity Advisor Intermediate
Municipal Income Fund is filed herein as Exhibit 1 to the Proxy
Statement and Prospectus.
(5) Article VIII of the Amended and Restated Declaration of Trust,
dated September 14, 1995, is incorporated herein by reference to
Exhibit 1 of Post-Effective Amendment No. 39.
(6)(a) Amended Management Contract between Fidelity Advisor Series VI,
on behalf of Fidelity Advisor Limited Term Tax-Exempt Fund (currently
known as Fidelity Advisor Intermediate Municipal Income Fund), and
Fidelity Management & Research Company, dated July 1, 1995, is
incorporated herein by reference to Exhibit 5(a) of Post-Effective
Amendment No. 39.
(b) Amended Management Contract between Fidelity Advisor Series
VI, on behalf of Fidelity Advisor Short-Intermediate Tax-Exempt Fund
(currently known as Fidelity Advisor Short-Intermediate Municipal
Income Fund), and Fidelity Management & Research Company, dated July
1, 1995, is incorporated herein by reference to Exhibit 5(c) of
Post-Effective Amendment No. 39.
(7)(a) General Distribution Agreement between Fidelity Advisor Series
VI, on behalf of Limited Term Series (currently known as Fidelity
Advisor Intermediate Municipal Income Fund), and Fidelity Distributors
Corporation, dated April 1, 1987, is incorporated herein by reference
to Exhibit 6(a) of Post-Effective Amendment No. 38.
(b) Amendment to the General Distribution Agreement between
Fidelity Advisor Series VI, on behalf of Limited Term Series
(currently known as Fidelity Advisor Intermediate Municipal Income
Fund), and Fidelity Distributors Corporation, dated January 1, 1988 is
incorporated herein by reference to Exhibit 6(b) of Post-Effective
Amendment No. 38.
(c) General Distribution Agreement between Fidelity Advisor
Series VI, on behalf of Fidelity Advisor Short-Intermediate Tax-Exempt
Fund (currently known as Fidelity Advisor Short-Intermediate Municipal
Income Fund), and Fidelity Distributors Corporation, dated January 20,
1994, is incorporated herein by reference to Exhibit 6(d) of
Post-Effective Amendment No. 37.
(d) Amendments to the General Distribution Agreement between
Fidelity Advisor Series VI, on behalf of Fidelity Advisor Intermediate
Municipal Income Fund, and Fidelity Distributors Corporation, dated
March 14, 1996 and July 15, 1996, are incorporated herein by reference
to Exhibit 6(b) of Fidelity Court Street Trust's (File No. 2-58774)
Post-Effective Amendment No. 61.
(e) Amendments to the General Distribution Agreement between
Fidelity Advisor Series VI, on behalf of Fidelity Short-Intermediate
Municipal Income Fund, and Fidelity Distributors Corporation, dated
March 14, 1996 and July 15, 1996, are incorporated herein by reference
to Exhibit 6(a) of Fidelity Court Street Trust's (File No. 2-58774)
Post-Effective Amendment No. 61.
(f) Form of Bank Agency Agreement (most recently revised January,
1997) is filed herein as Exhibit 7(f).
(g) Form of Selling Dealer Agreement (most recently revised
January, 1997) is filed herein as Exhibit 7(g).
(h) Form of Bank Agency Agreement for Bank-Related Transactions
(most recently revised January, 1997) is filed herein as Exhibit 7(h).
(8)(a) Retirement Plan for Non-Interested Person Trustees, Directors
or General Partners, as amended on November 16, 1995, is incorporated
herein by reference to Exhibit 7(a) of Fidelity Select Portfolio's
(File No. 2-69972) Post-Effective Amendment No. 54.
(b) The Fee Deferral Plan for Non-Interested Person Directors and
Trustees of the Fidelity Funds, effective as of September 14, 1995 and
amended through November 14, 1996, is incorporated herein by reference
to Exhibit 7(b) of Fidelity Aberdeen Street Trust's (File No.
33-43529) Post-Effective Amendment No. 19.
(9)(a) Custodian Agreement, Appendix B, and Appendix C, dated December
1, 1994, between UMB Bank, n.a. and the Registrant is incorporated
herein by reference to Exhibit 8 of Fidelity California Municipal
Trust's Post-Effective Amendment No. 28 (File No. 2-83367).
(b) Appendix A, dated September 18, 1997, to the Custodian
Agreement, dated December 1, 1994, between UMB Bank, n.a. and the
Registrant is incorporated herein by reference to Exhibit 8(b) of
Fidelity Municipal Trust's II Post-Effective Amendment No. 17 (File
No. 33-43986).
(10)(a) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Intermediate Municipal Income Fund: Class T (formerly
known as Class A) is incorporated herein by reference to Exhibit 15(a)
of Post-Effective Amendment No. 45.
(b) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Intermediate Municipal Income Fund: Class B is
incorporated herein by reference to Exhibit 15(e) of Post-Effective
Amendment No. 45.
(c) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Intermediate Municipal Income Fund: Institutional
Class is incorporated herein by reference to Exhibit 15(g) of
Post-Effective Amendment No. 45.
(d) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Intermediate Municipal Income Fund: Class A is
incorporated herein by reference to Exhibit 15(h) of Post-Effective
Amendment No. 42.
(e) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Intermediate Municipal Income Fund: Class C is
incorporated herein by reference to Exhibit 15(h) of Post-Effective
Amendment No. 48.
(f) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Short-Intermediate Municipal Income Fund: Class T
(formerly known as Class A) is incorporated herein by reference to
Exhibit 15(d) of Post-Effective Amendment No. 45.
(g) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Short-Intermediate Municipal Income Fund: Class A is
incorporated herein by reference to Exhibit 15(i) of Post-Effective
Amendment No. 42.
(h) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Short-Intermediate Municipal Income Fund:
Institutional Class is incorporated herein by reference to Exhibit
15(f) of Post-Effective Amendment No. 45.
(i) Rule 18f-3 Plan, dated October 16, 1997, is incorporated
herein by reference to Exhibit 18 of Post-Effective Amendment No. 48.
(11) Opinion and consent of counsel (K&L) as to the legality of shares
being registered is filed herein as Exhibit 11.
(12) Opinion and Consent of counsel (K&L) as to tax matters in
connection with the reorganization of Fidelity Advisor
Short-Intermediate Municipal Income Fund is filed herein as Exhibit
12.
(13) Not applicable.
(14) Consent of Coopers & Lybrand L.L.P. is filed herein as Exhibit
14.
(15) Pro Forma Financial Statements for the period ended November 30,
1997 are filed herein as Exhibit 15.
(16) Powers of Attorney, dated December 16, 1996, March 6, 1997, and
July 17, 1997, are filed herein as Exhibit 16.
(17) Not applicable.
Item 17. Undertakings
(1) The undersigned Registrant agrees that prior to any public
reoffering of the securities registered through the use of the
prospectus which is a part of this Registration Statement by any
person or party who is deemed to be an underwriter within the meaning
of Rule 145(c) of the Securities Act of 1933, the reoffering
prospectus will contain the information called for by the applicable
registration form for reoffering by persons who may be deemed
underwriters, in addition to the information called for by the other
items of the applicable form.
(2) The undersigned Registrant agrees that every prospectus that is
filed under paragraph (1) above will be filed as part of an amendment
to the Registration Statement and will not be used until the amendment
is effective, and that, in determining any liability under the
Securities Act of 1933, each Post-Effective Amendment shall be deemed
to be a new Registration Statement for the securities offered therein,
and the offering of securities at that time shall be deemed to be the
initial bona fide offering of them.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Boston, and
Commonwealth of Massachusetts, on the 26th day of January 1998.
Fidelity Advisor Series VI
By /s/Edward C. Johnson 3d (dagger)
Edward C. Johnson 3d, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons
in the capacities and on the dates indicated.
(SIGNATURE) (TITLE) (DATE)
<TABLE>
<CAPTION>
<S> <C> <C>
/S/EDWARD C. JOHNSON 3D (DAGGER) PRESIDENT AND TRUSTEE JANUARY 26, 1998
EDWARD C. JOHNSON 3D (PRINCIPAL EXECUTIVE OFFICER)
/S/RICHARD A. SILVER TREASURER JANUARY 26, 1998
RICHARD A. SILVER
/S/ROBERT C. POZEN TRUSTEE JANUARY 26, 1998
ROBERT C. POZEN
/S/RALPH F. COX * TRUSTEE JANUARY 26, 1998
RALPH F. COX
/S/PHYLLIS BURKE DAVIS * TRUSTEE JANUARY 26, 1998
PHYLLIS BURKE DAVIS
/S/ROBERT M. GATES ** TRUSTEE JANUARY 26, 1998
ROBERT M. GATES
/S/E. BRADLEY JONES * TRUSTEE JANUARY 26, 1998
E. BRADLEY JONES
/S/DONALD J. KIRK * TRUSTEE JANUARY 26, 1998
DONALD J. KIRK
/S/PETER S. LYNCH * TRUSTEE JANUARY 26, 1998
PETER S. LYNCH
/S/MARVIN L. MANN * TRUSTEE JANUARY 26, 1998
MARVIN L. MANN
/S/WILLIAM O. MCCOY * TRUSTEE JANUARY 26, 1998
WILLIAM O. MCCOY
/S/GERALD C. MCDONOUGH * TRUSTEE JANUARY 26, 1998
GERALD C. MCDONOUGH
/S/THOMAS R. WILLIAMS * TRUSTEE JANUARY 26, 1998
THOMAS R. WILLIAMS
</TABLE>
(dagger) Signatures affixed by Robert C. Pozen pursuant to a power of
attorney dated July 17, 1997 and filed herewith.
* Signature affixed by Robert C. Hacker pursuant to a power of
attorney dated December 19, 1996 and filed herewith.
** Signature affixed by Robert C. Hacker pursuant to a power of
attorney dated March 6, 1997 and filed herewith.
Exhibit 7(f)
FORM OF
BANK AGENCY AGREEMENT
We at Fidelity Distributors Corporation offer to make available to
your customers shares of the mutual funds, or the separate series or
classes of the mutual funds, listed on Schedules A and B attached to
this Agreement (the "Portfolios"). We may periodically change the
list of Portfolios by giving you written notice of the change. We are
the Portfolios' principal underwriter and act as agent for the
Portfolios. You (____________________________________) are a division
or affiliate of a bank (____________________________________) and
desire to make Portfolio shares available to your customers on the
following terms:
1. Certain Defined Terms: As used in this Agreement, the term
"Prospectus" means the applicable Portfolio's prospectus and related
statement of additional information, whether in paper format or
electronic format, included in the Portfolio's then currently
effective registration statement (or post-effective amendment
thereto), and any information that we or the Portfolio may issue to
you as a supplement to such prospectus or statement of additional
information (a "sticker"), all as filed with the Securities and
Exchange Commission (the "SEC") pursuant to the Securities Act of
1933.
2. Making Portfolio Shares Available to Your Customers: (a) In all
transactions covered by this Agreement: (i) you will act as agent for
your customers; in no transaction are you authorized to act as agent
for us or for any Portfolio; (ii) you will initiate transactions only
upon your customers' orders; (iii) we will execute transactions only
upon receiving instructions from you acting as agent for your
customers; and (iv) each transaction will be for your customer's
account and not for your own account. Each transaction will be
without recourse to you, provided that you act in accordance with the
terms of this Agreement.
(b) You agree to make Portfolio shares available to your customers
only at the applicable public offering price in accordance with the
Prospectus. If your customer qualifies for a reduced sales charge
pursuant to a special purchase plan (for example, a quantity discount,
letter of intent, or right of accumulation) as described in the
Prospectus, you agree to make Portfolio shares available to your
customer at the applicable reduced sales charge. You agree to deliver
or cause to be delivered to each customer, at or prior to the time of
any purchase of shares, a copy of the then current prospectus
(including any stickers thereto), unless such prospectus has already
been delivered to the customer, and to each customer who so requests,
a copy of the then current statement of additional information
(including any stickers thereto).
(c) You agree to order Portfolio shares from us only to cover
purchase orders that you have already received from your customers, or
for your own investment. You will not withhold placing customers'
orders so as to profit yourself as a result of such withholding (for
example, by a change in a Portfolio's net asset value from that used
in determining the offering price to your customers).
(d) We will accept your purchase orders only at the public offering
price applicable to each order, as determined in accordance with the
Prospectus. We will not accept from you a conditional order for
Portfolio shares. All orders are subject to acceptance or rejection
by us in our sole discretion. We may, without notice, suspend sales
or withdraw the offering of Portfolio shares, or make a limited
offering of Portfolio shares.
(e) The placing of orders with us will be governed by instructions
that we will periodically issue to you. You must pay for Portfolio
shares in New York or Boston clearing house funds or in federal funds
in accordance with such instructions, and we must receive your payment
on or before the settlement date established in accordance with Rule
15c6-1 under the Securities Exchange Act of 1934 (the "1934 Act").
(f) You agree to comply with all applicable state and federal laws
and with the rules and regulations of authorized regulatory agencies
thereunder. You agree to make Portfolio shares available to your
customers only in states where you may legally make such Portfolio's
shares available. You will not make available shares of any Portfolio
unless such shares are registered under the applicable state and
federal laws and the rules and regulations thereunder.
(g) Certificates evidencing Portfolio shares are not available; any
transaction in Portfolio shares will be effected and evidenced by
book-entry on the records maintained by Fidelity Investments
Institutional Operations Company, Inc. ("FIIOC"). A confirmation
statement evidencing transactions in Portfolio shares will be
transmitted to you.
(h) You may designate FIIOC to execute your customers' transactions
in Portfolio shares in accordance with the terms of any account,
program, plan, or service established or used by your customers, and
to confirm each transaction to your customers on your behalf on a
fully disclosed basis. At the time of the transaction, you guarantee
the legal capacity of your customers and any co-owners of such shares
so transacting in such shares.
3. Your Compensation: (a) Your fee, if any, for acting as agent
with respect to sales of Portfolio shares will be as provided in the
Prospectus or in the applicable schedule of agency fees issued by us
and in effect at the time of the sale. Upon written notice to you, we
or any Portfolio may change or discontinue any schedule of agency
fees, or issue a new schedule.
(b) If a Portfolio has adopted a plan pursuant to Rule 12b-1 under
the Investment Company Act of 1940 (a "Plan"), we may make
distribution payments or service payments to you under the Plan. If a
Portfolio does not have a currently effective Plan, we or Fidelity
Management & Research Company may make distribution payments or
service payments to you from our own funds. Any distribution payments
or service payments will be made in the amount and manner set forth in
the Prospectus or in the applicable schedule of distribution payments
or service payments issued by us and then in effect. Upon written
notice to you, we or any Portfolio may change or discontinue any
schedule of distribution payments or service payments, or issue a new
schedule. A schedule of distribution payments or service payments
will be in effect with respect to a Portfolio that has a Plan only so
long as that Portfolio's Plan remains in effect.
(c) After the effective date of any change in or discontinuance of
any schedule of agency fees, distribution payments, or service
payments, or the termination of a Plan, any agency fees, distribution
payments, or service payments will be allowable or payable to you only
in accordance with such change, discontinuance, or termination. You
agree that you will have no claim against us or any Portfolio by
virtue of any such change, discontinuance, or termination. In the
event of any overpayment by us of any agency fee, distribution
payment, or service payment, you will remit such overpayment.
(d) If, within seven (7) business days after our confirmation of
the original purchase order for shares of a Portfolio, such shares are
redeemed by the issuing Portfolio or tendered for redemption by the
customer, you agree (i) to refund promptly to us the full amount of
any agency fee, distribution payment, or service payment paid to you
on such shares, and (ii) if not yet paid to you, to forfeit the right
to receive any agency fee, distribution payment, or service payment
payable to you on such shares. We will notify you of any such
redemption within ten (10) days after the date of the redemption.
4. Certain Types of Accounts: (a) You may instruct FIIOC to
register purchased shares in your name and account as nominee for your
customers. If you hold Portfolio shares as nominee for your
customers, all Prospectuses, proxy statements, periodic reports, and
other printed material will be sent to you, and all confirmations and
other communications to shareholders will be transmitted to you. You
will be responsible for forwarding such printed material,
confirmations, and communications, or the information contained
therein, to all customers for whose account you hold any Portfolio
shares as nominee. However, we or FIIOC on behalf of itself or the
Portfolios will be responsible for the costs associated with your
forwarding such printed material, confirmations, and communications.
You will be responsible for complying with all reporting and tax
withholding requirements with respect to the customers for whose
account you hold any Portfolio shares as nominee.
(b) With respect to accounts other than those accounts referred to
in paragraph 4(a) above, you agree to provide us with all information
(including certification of taxpayer identification numbers and
back-up withholding instructions) necessary or appropriate for us to
comply with legal and regulatory reporting requirements.
(c) Accounts opened or maintained pursuant to the NETWORKING system
of the National Securities Clearing Corporation ("NSCC") will be
governed by applicable NSCC rules and procedures and any agreement or
other arrangement with us relating to NETWORKING.
(d) If you hold Portfolio shares in an omnibus account for two or
more customers, you will be responsible for determining, in accordance
with the Prospectus, whether, and the extent to which, a CDSC is
applicable to a purchase of Portfolio shares from such a customer, and
you agree to transmit immediately to us any CDSC to which such
purchase was subject. You hereby represent that if you hold Portfolio
shares subject to a CDSC, you have the capability to track and account
for such charge, and we reserve the right, at our discretion, to
verify that capability by inspecting your tracking and accounting
system or otherwise.
5. Status as Registered Broker/Dealer or "Bank": (a) Each party to
this Agreement represents to the other party that it is either (i) a
registered broker/dealer under the 1934 Act, or (ii) a "bank" as
defined in Section 3(a)(6) of the 1934 Act.
(b) If a party is a registered broker/dealer, such party represents
that it is qualified to act as a broker/dealer in the states where it
transacts business, and it is a member in good standing of the
National Association of Securities Dealers, Inc. ("NASD"). It agrees
to maintain its broker/dealer registration and qualifications and its
NASD membership in good standing throughout the term of this
Agreement. It agrees to abide by all of the NASD's rules and
regulations, including the NASD's Conduct Rules -- in particular,
Section 2830 of such Rules, which section is deemed a part of and is
incorporated by reference in this Agreement. This Agreement will
terminate automatically without notice in the event that a party's
NASD membership is terminated.
(c) If you are a "bank", you represent that you are duly authorized
to engage in the transactions to be performed under this Agreement,
and you agree to comply with all applicable federal and state laws,
including the rules and regulations of all applicable federal and
state bank regulatory agencies and authorities. This Agreement will
terminate automatically without notice in the event that you cease to
be a "bank" as defined in Section 3(a)(6) of the 1934 Act.
(d) Nothing in this Agreement shall cause you to be our partner,
employee, or agent, or give you any authority to act for us or for any
Portfolio. Neither we nor any Portfolio shall be liable for any of
your acts or obligations as a dealer under this Agreement.
6. Information Relating to the Portfolios: (a) No person is
authorized to make any representations concerning shares of a
Portfolio other than those contained in the Portfolio's Prospectus.
In ordering Portfolio shares from us under this Agreement, you will
rely only on the representations contained in the Prospectus. Upon
your request, we will furnish you with a reasonable number of copies
of the Portfolios' current prospectuses or statements of additional
information or both (including any stickers thereto).
(b) Any printed or electronic information that we furnish you
(other than the Portfolios' Prospectuses and periodic reports) is our
sole responsibility and not the responsibility of the respective
Portfolios. You agree that the Portfolios will have no liability or
responsibility to you with respect to any such printed or electronic
information. We or the respective Portfolio will bear the expense of
qualifying its shares under the state securities laws.
(c) You may not use any sales literature or advertising material
(including material disseminated through radio, television, or other
electronic media) concerning Portfolio shares, other than the printed
or electronic information referred to in paragraph 6(b) above, in
connection with making Portfolio shares available to your customers
without obtaining our prior written approval. You may not distribute
or make available to investors any information that we furnish you
marked "FOR DEALER USE ONLY" or that otherwise indicates that it is
confidential or not intended to be distributed to investors.
7. Indemnification: (a) We will indemnify and hold you harmless
from any claim, demand, loss, expense, or cause of action resulting
from the misconduct or negligence, as measured by industry standards,
of us, our agents and employees, in carrying out our obligations under
this Agreement. Such indemnification will survive the termination of
this Agreement.
(b) You will indemnify and hold us harmless from any claim, demand,
loss, expense, or cause of action resulting from the misconduct or
negligence, as measured by industry standards, of you, your agents and
employees, in carrying out your obligations under this Agreement.
Such indemnification will survive the termination of this Agreement.
8. Customer Lists: We hereby agree that we shall not use any list of
your customers which may be obtained in connection with this Agreement
for the purpose of solicitation of any product or service without your
express written consent. However, nothing in this paragraph or
otherwise shall be deemed to prohibit or restrict us or our affiliates
in any way from solicitations of any product or service directed at,
without limitation, the general public, any segment thereof, or any
specific individual, provided such solicitation is not based upon such
list.
9. Duration of Agreement: This Agreement, with respect to any Plan,
will continue in effect for one year from its effective date, and
thereafter will continue automatically for successive annual periods;
provided, however, that such continuance is subject to termination at
any time without penalty if a majority of a Portfolio's Trustees who
are not interested persons of the Portfolio (as defined in the
Investment Company Act of 1940 (the "1940 Act")), or a majority of the
outstanding shares of the Portfolio, vote to terminate or not to
continue the Plan. This Agreement, other than with respect to a Plan,
will continue in effect from year to year after its effective date,
unless terminated as provided herein.
10. Amendment and Termination of Agreement: (a) We may amend any
provision of this Agreement by giving you written notice of the
amendment. Either party to this Agreement may terminate the Agreement
without cause by giving the other party at least thirty (30) days'
written notice of its intention to terminate. This Agreement will
terminate automatically in the event of its assignment (as defined in
the 1940 Act).
(b) In the event that (i) an application for a protective decree
under the provisions of the Securities Investor Protection Act of 1970
is file against you; (ii) you file a petition in bankruptcy or a
petition seeking similar relief under any bankruptcy, insolvency, or
similar law, or a proceeding is commenced against you seeking such
relief; or (iii) you are found by the SEC, the NASD, or any other
federal or state regulatory agency or authority to have violated any
applicable federal or state law, rule or regulation arising out of
your activities as a broker/dealer or in connection with this
Agreement, this Agreement will terminate effective immediately upon
our giving notice of termination to you. You agree to notify us
promptly and to immediately suspend making Portfolio shares available
to your customers in the event of any such filing or violation, or in
the event that you cease to be a member in good standing of the NASD
or you cease to be a "bank" as defined in Section 3(a)(6) of the 1934
Act.
(c) Your or our failure to terminate this Agreement for a
particular cause will not constitute a waiver of the right to
terminate this Agreement at a later date for the same or another
cause. The termination of this Agreement with respect to any one
Portfolio will not cause its termination with respect to any other
Portfolio.
11. Arbitration: In the event of a dispute, such dispute will be
settled by arbitration before arbitrators sitting in Boston,
Massachusetts in accordance with the NASD's Code of Arbitration
Procedure in effect at the time of the dispute. The arbitrators will
act by majority decision and their award may allocate attorneys' fees
and arbitration costs between us. Their award will be final and
binding between us, and such award may be entered as a judgment in any
court of competent jurisdiction.
12. Notices: All notices required or permitted to be given under this
Agreement shall be given in writing and delivered by personal
delivery, by postage prepaid mail, or by facsimile machine or a
similar means of same day delivery (with a confirming copy by mail).
All notices to us shall be given or sent to us at our offices located
at 82 Devonshire Street, Mail Zone L12A, Boston, Massachusetts 02109,
Attn: Bank Wholesale Market. All notices to you shall be given or
sent to you at the address specified by you below. Each of us may
change the address to which notices shall be sent by giving notice to
the other party in accordance with this paragraph 12.
13. Miscellaneous: This Agreement, as it may be amended from time to
time, shall become effective as of the date when it is accepted and
dated below by us. This Agreement is to be construed in accordance
with the laws of the Commonwealth of Massachusetts. This Agreement
supersedes and cancels any prior agreement between us, whether oral or
written, relating to the sale of shares of the Portfolios or any other
subject covered by this Agreement. The captions in this Agreement are
included for convenience of reference only and in no way define or
limit any of the provisions of this Agreement or otherwise affect
their construction or effect.
Very truly yours,
FIDELITY DISTRIBUTORS
CORPORATION
Please return two signed copies of this Agreement to Fidelity
Distributors Corporation. Upon acceptance, one countersigned copy
will be returned to you for your files.
_____________________________________
Name of Firm
Address: _____________________________
_____________________________________
_____________________________________
By __________________________________
Authorized Representative
_____________________________________
Name and Title (please print or type)
ACCEPTED AND AGREED:
FIDELITY DISTRIBUTORS CORPORATION
By __________________________________
Dated: ________________
** DISCARD THIS PAGE AND ATTACH REVISED SCHEDULES A AND B **
Exhibit 7(g)
FORM OF
SELLING DEALER AGREEMENT
We at Fidelity Distributors Corporation invite you
(______________________________) to distribute shares of the mutual
funds, or the separate series or classes of the mutual funds, listed
on Schedule A attached to this Agreement (the "Portfolios"). We may
periodically change the list of Portfolios by giving you written
notice of the change. We are the Portfolios' principal underwriter
and, as agent for the Portfolios, we offer to sell Portfolio shares to
you on the following terms:
1. Certain Defined Terms: As used in this Agreement, the term
"Prospectus" means the applicable Portfolio's prospectus and related
statement of additional information, whether in paper format or
electronic format, included in the Portfolio's then currently
effective registration statement (or post-effective amendment
thereto), and any information that we or the Portfolio may issue to
you as a supplement to such prospectus or statement of additional
information (a "sticker"), all as filed with the Securities and
Exchange Commission (the "SEC") pursuant to the Securities Act of
1933.
2. Purchases of Portfolio Shares for Sale to Customers: (a) In
offering and selling Portfolio shares to your customers, you agree to
act as dealer for your own account; you are not authorized to act as
agent for us or for any Portfolio.
(b) You agree to offer and sell Portfolio shares to your customers
only at the applicable public offering price in accordance with the
Prospectus. If your customer qualifies for a reduced sales charge
pursuant to a special purchase plan (for example, a quantity discount,
letter of intent, or right of accumulation) as described in the
Prospectus, you agree to offer and sell Portfolio shares to your
customer at the applicable reduced sales charge. You agree to deliver
or cause to be delivered to each customer, at or prior to the time of
any purchase of shares, a copy of the then current prospectus
(including any stickers thereto), unless such prospectus has already
been delivered to the customer, and to each customer who so requests,
a copy of the then current statement of additional information
(including any stickers thereto).
(c) You agree to purchase Portfolio shares from us only to cover
purchase orders that you have already received from your customers, or
for your own investment. You also agree not to purchase any Portfolio
shares from your customers at a price lower than the applicable
redemption price, determined in the manner described in the
Prospectus. You will not withhold placing customers' orders so as to
profit yourself as a result of such withholding (for example, by a
change in a Portfolio's net asset value from that used in determining
the offering price to your customers).
(d) We will accept your purchase orders only at the public offering
price applicable to each order, as determined in accordance with the
Prospectus. We will not accept from you a conditional order for
Portfolio shares. All orders are subject to acceptance or rejection
by us in our sole discretion. We may, without notice, suspend sales
or withdraw the offering of Portfolio shares, or make a limited
offering of Portfolio shares.
(e) The placing of orders with us will be governed by instructions
that we will periodically issue to you. You must pay for Portfolio
shares in New York or Boston clearing house funds or in federal funds
in accordance with such instructions, and we must receive your payment
on or before the settlement date established in accordance with Rule
15c6-1 under the Securities Exchange Act of 1934 (the "1934 Act"). If
we do not receive your payment on or before such settlement date, we
may, without notice, cancel the sale, or, at our option, sell the
shares that you ordered back to the issuing Portfolio, and we may hold
you responsible for any loss suffered by us or the issuing Portfolio
as a result of your failure to make payment as required.
(f) You agree to comply with all applicable state and federal laws
and with the rules and regulations of authorized regulatory agencies
thereunder. You agree to offer and sell Portfolio shares only in
states where you may legally offer and sell such Portfolio's shares.
You will not offer shares of any Portfolio for sale unless such shares
are registered for sale under the applicable state and federal laws
and the rules and regulations thereunder.
(g) Certificates evidencing Portfolio shares are not available; any
transaction in Portfolio shares will be effected and evidenced by
book-entry on the records maintained by Fidelity Investments
Institutional Operations Company, Inc. ("FIIOC"). A confirmation
statement evidencing transactions in Portfolio shares will be
transmitted to you.
(h) You may designate FIIOC to execute your customers' transactions
in Portfolio shares in accordance with the terms of any account,
program, plan, or service established or used by your customers, and
to confirm each transaction to your customers on your behalf. At the
time of the transaction, you guarantee the legal capacity of your
customers and any co-owners of such shares so transacting in such
shares.
3. Your Compensation: (a) Your concession, if any, on your sales of
Portfolio shares will be as provided in the Prospectus or in the
applicable schedule of concessions issued by us and in effect at the
time of our sale to you. Upon written notice to you, we or any
Portfolio may change or discontinue any schedule of concessions, or
issue a new schedule.
(b) If a Portfolio has adopted a plan pursuant to Rule 12b-1 under
the Investment Company Act of 1940 (a "Plan"), we may make
distribution payments or service payments to you under the Plan. If a
Portfolio does not have a currently effective Plan, we or Fidelity
Management & Research Company may make distribution payments or
service payments to you from our own funds. Any distribution payments
or service payments will be made in the amount and manner set forth in
the Prospectus or in the applicable schedule of distribution payments
or service payments issued by us and then in effect. Upon written
notice to you, we or any Portfolio may change or discontinue any
schedule of distribution payments or service payments, or issue a new
schedule. A schedule of distribution payments or service payments
will be in effect with respect to a Portfolio that has a Plan only so
long as that Portfolio's Plan remains in effect.
(c) After the effective date of any change in or discontinuance of
any schedule of concessions, distribution payments, or service
payments, or the termination of a Plan, any concessions, distribution
payments, or service payments will be allowable or payable to you only
in accordance with such change, discontinuance, or termination. You
agree that you will have no claim against us or any Portfolio by
virtue of any such change, discontinuance, or termination. In the
event of any overpayment by us of any concession, distribution
payment, or service payment, you will remit such overpayment.
(d) If any Portfolio shares sold to you by us under the terms of
this Agreement are redeemed by the issuing Portfolio or tendered for
redemption by the customer within seven (7) business days after the
date of our confirmation of your original purchase order for such
shares, you agree (i) to refund promptly to us the full amount of any
concession, distribution payment, or service payment allowed or paid
to you on such shares, and (ii) if not yet allowed or paid to you, to
forfeit the right to receive any concession, distribution payment, or
service payment allowable or payable to you on such shares. We will
notify you of any such redemption within ten (10) days after the date
of the redemption.
4. Certain Types of Accounts: (a) You may instruct FIIOC to
register purchased shares in your name and account as nominee for your
customers. If you hold Portfolio shares as nominee for your
customers, all Prospectuses, proxy statements, periodic reports, and
other printed material will be sent to you, and all confirmations and
other communications to shareholders will be transmitted to you. You
will be responsible for forwarding such printed material,
confirmations, and communications, or the information contained
therein, to all customers for whose account you hold any Portfolio
shares as nominee. However, we or FIIOC on behalf of itself or the
Portfolios will be responsible for the costs associated with your
forwarding such printed material, confirmations, and communications.
You will be responsible for complying with all reporting and tax
withholding requirements with respect to the customers for whose
account you hold any Portfolio shares as nominee.
(b) With respect to accounts other than those accounts referred to
in paragraph 4(a) above, you agree to provide us with all information
(including certification of taxpayer identification numbers and
back-up withholding instructions) necessary or appropriate for us to
comply with legal and regulatory reporting requirements.
(c) Accounts opened or maintained pursuant to the NETWORKING system
of the National Securities Clearing Corporation ("NSCC") will be
governed by applicable NSCC rules and procedures and any agreement or
other arrangement with us relating to NETWORKING.
(d) If you hold Portfolio shares in an omnibus account for two or
more customers, you will be responsible for determining, in accordance
with the Prospectus, whether, and the extent to which, a CDSC is
applicable to a purchase of Portfolio shares from such a customer, and
you agree to transmit immediately to us any CDSC to which such
purchase was subject. You hereby represent that if you hold Portfolio
shares subject to a CDSC, you have the capability to track and account
for such charge, and we reserve the right, at our discretion, to
verify that capability by inspecting your tracking and accounting
system or otherwise.
5. Status as Registered Broker/Dealer: (a) Each party to this
Agreement represents to the other party that (i) it is registered as a
broker/dealer under the 1934 Act, (ii) it is qualified to act as a
broker/dealer in the states where it transacts business, and (iii) it
is a member in good standing of the National Association of Securities
Dealers, Inc. ("NASD"). Each party agrees to maintain its
broker/dealer registration and qualifications and its NASD membership
in good standing throughout the term of this Agreement. Each party
agrees to abide by all of the NASD's rules and regulations, including
the NASD's Conduct Rules -- in particular, Section 2830 of such Rules,
which section is deemed a part of and is incorporated by reference in
this Agreement. This Agreement will terminate automatically without
notice in the event that either party's NASD membership is terminated.
(b) Nothing in this Agreement shall cause you to be our partner,
employee, or agent, or give you any authority to act for us or for any
Portfolio. Neither we nor any Portfolio shall be liable for any of
your acts or obligations as a dealer under this Agreement.
6. Information Relating to the Portfolios: (a) No person is
authorized to make any representations concerning shares of a
Portfolio other than those contained in the Portfolio's Prospectus.
In buying Portfolio shares from us under this Agreement, you will rely
only on the representations contained in the Prospectus. Upon your
request, we will furnish you with a reasonable number of copies of the
Portfolios' current prospectuses or statements of additional
information or both (including any stickers thereto).
(b) Any printed or electronic information that we furnish you
(other than the Portfolios' Prospectuses and periodic reports) is our
sole responsibility and not the responsibility of the respective
Portfolios. You agree that the Portfolios will have no liability or
responsibility to you with respect to any such printed or electronic
information. We or the respective Portfolio will bear the expense of
qualifying its shares under the state securities laws.
(c) You may not use any sales literature or advertising material
(including material disseminated through radio, television, or other
electronic media) concerning Portfolio shares, other than the printed
or electronic information referred to in paragraph 6(b) above, in
connection with the offer or sale of Portfolio shares without
obtaining our prior written approval. You may not distribute or make
available to investors any information that we furnish you marked "FOR
DEALER USE ONLY" or that otherwise indicates that it is confidential
or not intended to be distributed to investors.
7. Indemnification: (a) We will indemnify and hold you harmless
from any claim, demand, loss, expense, or cause of action resulting
from the misconduct or negligence, as measured by industry standards,
of us, our agents and employees, in carrying out our obligations under
this Agreement. Such indemnification will survive the termination of
this Agreement.
(b) You will indemnify and hold us harmless from any claim, demand,
loss, expense, or cause of action resulting from the misconduct or
negligence, as measured by industry standards, of you, your agents and
employees, in carrying out your obligations under this Agreement.
Such indemnification will survive the termination of this Agreement.
8. Customer Lists: We hereby agree that we shall not use any list of
your customers which may be obtained in connection with this Agreement
for the purpose of solicitation of any product or service without your
express written consent. However, nothing in this paragraph or
otherwise shall be deemed to prohibit or restrict us or our affiliates
in any way from solicitations of any product or service directed at,
without limitation, the general public, any segment thereof, or any
specific individual, provided such solicitation is not based upon such
list.
9. Duration of Agreement: This Agreement, with respect to any Plan,
will continue in effect for one year from its effective date, and
thereafter will continue automatically for successive annual periods;
provided, however, that such continuance is subject to termination at
any time without penalty if a majority of a Portfolio's Trustees who
are not interested persons of the Portfolio (as defined in the
Investment Company Act of 1940 (the "1940 Act")), or a majority of the
outstanding shares of the Portfolio, vote to terminate or not to
continue the Plan. This Agreement, other than with respect to a Plan,
will continue in effect from year to year after its effective date,
unless terminated as provided herein.
10. Amendment and Termination of Agreement: (a) We may amend any
provision of this Agreement by giving you written notice of the
amendment. Either party to this Agreement may terminate the Agreement
without cause by giving the other party at least thirty (30) days'
written notice of its intention to terminate. This Agreement will
terminate automatically in the event of its assignment (as defined in
the 1940 Act).
(b) In the event that (i) an application for a protective decree
under the provisions of the Securities Investor Protection Act of 1970
is filed against you; (ii) you file a petition in bankruptcy or a
petition seeking similar relief under any bankruptcy, insolvency, or
similar law, or a proceeding is commenced against you seeking such
relief; or (iii) you are found by the SEC, the NASD, or any other
federal or state regulatory agency or authority to have violated any
applicable federal or state law, rule or regulation arising out of
your activities as a broker/dealer or in connection with this
Agreement, this Agreement will terminate effective immediately upon
our giving notice of termination to you. You agree to notify us
promptly and to immediately suspend sales of Portfolio shares in the
event of any such filing or violation, or in the event that you cease
to be a member in good standing of the NASD.
(c) Your or our failure to terminate this Agreement for a
particular cause will not constitute a waiver of the right to
terminate this Agreement at a later date for the same or another
cause. The termination of this Agreement with respect to any one
Portfolio will not cause its termination with respect to any other
Portfolio.
11. Arbitration: In the event of a dispute, such dispute will be
settled by arbitration before arbitrators sitting in Boston,
Massachusetts in accordance with the NASD's Code of Arbitration
Procedure in effect at the time of the dispute. The arbitrators will
act by majority decision and their award may allocate attorneys' fees
and arbitration costs between us. Their award will be final and
binding between us, and such award may be entered as a judgment in any
court of competent jurisdiction.
12. Notices: All notices required or permitted to be given under this
Agreement shall be given in writing and delivered by personal
delivery, by postage prepaid mail, or by facsimile machine or a
similar means of same day delivery (with a confirming copy by mail).
All notices to us shall be given or sent to us at our offices located
at 82 Devonshire Street, Mail Zone L10A, Boston, Massachusetts 02109,
Attn: Broker Dealer Services Group. All notices to you shall be given
or sent to you at the address specified by you below. Each of us may
change the address to which notices shall be sent by giving notice to
the other party in accordance with this paragraph 12.
13. Miscellaneous: This Agreement, as it may be amended from time to
time, shall become effective as of the date when it is accepted and
dated below by us. This Agreement is to be construed in accordance
with the laws of the Commonwealth of Massachusetts. This Agreement
supersedes and cancels any prior agreement between us, whether oral or
written, relating to the sale of shares of the Portfolios or any other
subject covered by this Agreement. The captions in this Agreement are
included for convenience of reference only and in no way define or
limit any of the provisions of this Agreement or otherwise affect
their construction or effect.
Very truly yours,
FIDELITY DISTRIBUTORS
CORPORATION
Please return two signed copies of this Agreement to Fidelity
Distributors Corporation. Upon acceptance, one countersigned copy
will be returned to you for your files.
_____________________________________
Name of Firm
Address: _____________________________
_____________________________________
_____________________________________
By __________________________________
Authorized Representative
_____________________________________
Name and Title (please print or type)
CRD # _______________________________
ACCEPTED AND AGREED:
FIDELITY DISTRIBUTORS CORPORATION
By __________________________________
Dated: _________________
BEFORE MAILING: DISCARD THIS PAGE AND ATTACH REVISED SCHEDULE A
Exhibit 7(h)
FORM OF
SELLING DEALER AGREEMENT
(FOR BANK-RELATED TRANSACTIONS)
We at Fidelity Distributors Corporation invite you to distribute
shares of the mutual funds, or the separate series or classes of the
mutual funds, listed on Schedules A and B attached to this Agreement
(the "Portfolios"). We may periodically change the list of Portfolios
by giving you written notice of the change. We are the Portfolios'
principal underwriter and, as agent for the Portfolios, we offer to
sell Portfolio shares to you on the following terms:
1. Certain Defined Terms: (a) You
(_____________________________________) are registered as a
broker/dealer under the Securities Exchange Act of 1934 (the "1934
Act") and have executed a written agreement with a bank or bank
affiliate to provide brokerage services to that bank, bank affiliate
and/or their customers. As used in this Agreement, the term "Bank"
means a bank as defined in Section 3(a)(6) of the 1934 Act, or an
affiliate of such a bank, with which you have entered into a written
agreement to provide brokerage services; and the term "Bank Client"
means a customer of such a Bank.
(b) As used in this Agreement, the term "Prospectus" means the
applicable Portfolio's prospectus and related statement of additional
information, whether in paper format or electronic format, included in
the Portfolio's then currently effective registration statement (or
post-effective amendment thereto), and any information that we or the
Portfolio may issue to you as a supplement to such prospectus or
statement of additional information (a "sticker"), all as filed with
the Securities and Exchange Commission (the "SEC") pursuant to the
Securities Act of 1933.
2. Purchases of Portfolio Shares for Sale to Customers: (a) In
offering and selling Portfolio shares to your customers, you agree to
act as dealer for your own account; you are not authorized to act as
agent for us or for any Portfolio.
(b) You agree to offer and sell Portfolio shares to your customers
only at the applicable public offering price in accordance with the
Prospectus. If your customer qualifies for a reduced sales charge
pursuant to a special purchase plan (for example, a quantity discount,
letter of intent, or right of accumulation) as described in the
Prospectus, you agree to offer and sell Portfolio shares to your
customer at the applicable reduced sales charge. You agree to deliver
or cause to be delivered to each customer, at or prior to the time of
any purchase of shares, a copy of the then current prospectus
(including any stickers thereto), unless such prospectus has already
been delivered to the customer, and to each customer who so requests,
a copy of the then current statement of additional information
(including any stickers thereto).
(c) You agree to purchase Portfolio shares from us only to cover
purchase orders that you have already received from your customers, or
for your own investment. You also agree not to purchase any Portfolio
shares from your customers at a price lower than the applicable
redemption price, determined in the manner described in the
Prospectus. You will not withhold placing customers' orders so as to
profit yourself as a result of such withholding (for example, by a
change in a Portfolio's net asset value from that used in determining
the offering price to your customers).
(d) We will accept your purchase orders only at the public offering
price applicable to each order, as determined in accordance with the
Prospectus. We will not accept from you a conditional order for
Portfolio shares. All orders are subject to acceptance or rejection
by us in our sole discretion. We may, without notice, suspend sales
or withdraw the offering of Portfolio shares, or make a limited
offering of Portfolio shares.
(e) The placing of orders with us will be governed by instructions
that we will periodically issue to you. You must pay for Portfolio
shares in New York or Boston clearing house funds or in federal funds
in accordance with such instructions, and we must receive your payment
on or before the settlement date established in accordance with Rule
15c6-1 under the 1934 Act. If we do not receive your payment on or
before such settlement date, we may, without notice, cancel the sale,
or, at our option, sell the shares that you ordered back to the
issuing Portfolio, and we may hold you responsible for any loss
suffered by us or the issuing Portfolio as a result of your failure to
make payment as required.
(f) You agree to comply with all applicable state and federal laws
and with the rules and regulations of authorized regulatory agencies
thereunder. You agree to offer and sell Portfolio shares only in
states where you may legally offer and sell such Portfolio's shares.
You will not offer shares of any Portfolio for sale unless such shares
are registered for sale under the applicable state and federal laws
and the rules and regulations thereunder.
(g) Certificates evidencing Portfolio shares are not available; any
transaction in Portfolio shares will be effected and evidenced by
book-entry on the records maintained by Fidelity Investments
Institutional Operations Company, Inc. ("FIIOC"). A confirmation
statement evidencing transactions in Portfolio shares will be
transmitted to you.
(h) You may designate FIIOC to execute your customers' transactions
in Portfolio shares in accordance with the terms of any account,
program, plan, or service established or used by your customers, and
to confirm each transaction to your customers on your behalf on a
fully disclosed basis. At the time of the transaction, you guarantee
the legal capacity of your customers and any co-owners of such shares
so transacting in such shares.
3. Your Compensation: (a) Your concession, if any, on your sales of
Portfolio shares will be as provided in the Prospectus or in the
applicable schedule of concessions issued by us and in effect at the
time of our sale to you. Upon written notice to you, we or any
Portfolio may change or discontinue any schedule of concessions, or
issue a new schedule.
(b) If a Portfolio has adopted a plan pursuant to Rule 12b-1 under
the Investment Company Act of 1940 (a "Plan"), we may make
distribution payments or service payments to you under the Plan. If a
Portfolio does not have a currently effective Plan, we or Fidelity
Management & Research Company may make distribution payments or
service payments to you from our own funds. Any distribution payments
or service payments will be made in the amount and manner set forth in
the Prospectus or in the applicable schedule of distribution payments
or service payments issued by us and then in effect. Upon written
notice to you, we or any Portfolio may change or discontinue any
schedule of distribution payments or service payments, or issue a new
schedule. A schedule of distribution payments or service payments
will be in effect with respect to a Portfolio that has a Plan only so
long as that Portfolio's Plan remains in effect.
(c) Concessions, distribution payments, and service payments apply
only with respect to (i) shares of the "Fidelity Funds" (as designated
on Schedule A attached to this Agreement) purchased or maintained for
the account of Bank Clients, and (ii) shares of the "Fidelity Advisor
Funds" (as designated on Schedule B attached to this Agreement).
Anything to the contrary notwithstanding, neither we nor any Portfolio
will provide to you, nor may you retain, concessions on your sales of
shares of, or distribution payments or service payments with respect
to assets of, the Fidelity Funds attributable to you or any of your
clients, other than Bank Clients. When you place an order in shares
of the Fidelity Funds with us, you will identify the Bank on behalf of
whose Clients you are placing the order; and you will identify as a
non-Bank Client Order, any order in shares of the Fidelity Funds
placed for the account of a non-Bank Client.
(d) After the effective date of any change in or discontinuance of
any schedule of concessions, distribution payments, or service
payments, or the termination of a Plan, any concessions, distribution
payments, or service payments will be allowable or payable to you only
in accordance with such change, discontinuance, or termination. You
agree that you will have no claim against us or any Portfolio by
virtue of any such change, discontinuance, or termination. In the
event of any overpayment by us of any concession, distribution
payment, or service payment, you will remit such overpayment.
(e) If any Portfolio shares sold to you by us under the terms of
this Agreement are redeemed by the issuing Portfolio or tendered for
redemption by the customer within seven (7) business days after the
date of our confirmation of your original purchase order for such
shares, you agree (i) to refund promptly to us the full amount of any
concession, distribution payment, or service payment allowed or paid
to you on such shares, and (ii) if not yet allowed or paid to you, to
forfeit the right to receive any concession, distribution payment, or
service payment allowable or payable to you on such shares. We will
notify you of any such redemption within ten (10) days after the date
of the redemption.
4. Certain Types of Accounts: (a) You may instruct FIIOC to
register purchased shares in your name and account as nominee for your
customers. If you hold Portfolio shares as nominee for your
customers, all Prospectuses, proxy statements, periodic reports, and
other printed material will be sent to you, and all confirmations and
other communications to shareholders will be transmitted to you. You
will be responsible for forwarding such printed material,
confirmations, and communications, or the information contained
therein, to all customers for whose account you hold any Portfolio
shares as nominee. However, we or FIIOC on behalf of itself or the
Portfolios will be responsible for the costs associated with your
forwarding such printed material, confirmations, and communications.
You will be responsible for complying with all reporting and tax
withholding requirements with respect to the customers for whose
account you hold any Portfolio shares as nominee.
(b) With respect to accounts other than those accounts referred to
in paragraph 4(a) above, you agree to provide us with all information
(including certification of taxpayer identification numbers and
back-up withholding instructions) necessary or appropriate for us to
comply with legal and regulatory reporting requirements.
(c) Accounts opened or maintained pursuant to the NETWORKING system
of the National Securities Clearing Corporation ("NSCC") will be
governed by applicable NSCC rules and procedures and any agreement or
other arrangement with us relating to NETWORKING.
(d) If you hold Portfolio shares in an omnibus account for two or
more customers, you will be responsible for determining, in accordance
with the Prospectus, whether, and the extent to which, a CDSC is
applicable to a purchase of Portfolio shares from such a customer, and
you agree to transmit immediately to us any CDSC to which such
purchase was subject. You hereby represent that if you hold Portfolio
shares subject to a CDSC, you have the capability to track and account
for such charge, and we reserve the right, at our discretion, to
verify that capability by inspecting your tracking and accounting
system or otherwise.
5. Status as Registered Broker/Dealer: (a) Each party to this
Agreement represents to the other party that (i) it is registered as a
broker/dealer under the 1934 Act, (ii) it is qualified to act as a
broker/dealer in the states where it transacts business, and (iii) it
is a member in good standing of the National Association of Securities
Dealers, Inc. ("NASD"). Each party agrees to maintain its
broker/dealer registration and qualifications and its NASD membership
in good standing throughout the term of this Agreement. Each party
agrees to abide by all of the NASD's rules and regulations, including
the NASD's Conduct Rules -- in particular, Section 2830 of such Rules,
which section is deemed a part of and is incorporated by reference in
this Agreement. This Agreement will terminate automatically without
notice in the event that either
party's NASD membership is terminated.
(b) Nothing in this Agreement shall cause you to be our partner,
employee, or agent, or give you any authority to act for us or for any
Portfolio. Neither we nor any Portfolio shall be liable for any of
your acts or obligations as a dealer under this Agreement.
6. Information Relating to the Portfolios: (a) No person is
authorized to make any representations concerning shares of a
Portfolio other than those contained in the Portfolio's Prospectus.
In buying Portfolio shares from us under this Agreement, you will rely
only on the representations contained in the Prospectus. Upon your
request, we will furnish you with a reasonable number of copies of the
Portfolios' current prospectuses or statements of additional
information or both (including any stickers thereto).
(b) Any printed or electronic information that we furnish you
(other than the Portfolios' Prospectuses and periodic reports) is our
sole responsibility and not the responsibility of the respective
Portfolios. You agree that the Portfolios will have no liability or
responsibility to you with respect to any such printed or electronic
information. We or the respective Portfolio will bear the expense of
qualifying its shares under the state securities laws.
(c) You may not use any sales literature or advertising material
(including material disseminated through radio, television, or other
electronic media) concerning Portfolio shares, other than the printed
or electronic information referred to in paragraph 6(b) above, in
connection with the offer or sale of Portfolio shares without
obtaining our prior written approval. You may not distribute or make
available to investors any information that we furnish you marked "FOR
DEALER USE ONLY" or that otherwise indicates that it is confidential
or not intended to be distributed to investors.
7. Indemnification: (a) We will indemnify and hold you harmless
from any claim, demand, loss, expense, or cause of action resulting
from the misconduct or negligence, as measured by industry standards,
of us, our agents and employees, in carrying out our obligations under
this Agreement. Such indemnification will survive the termination of
this Agreement.
(b) You will indemnify and hold us harmless from any claim, demand,
loss, expense, or cause of action resulting from the misconduct or
negligence, as measured by industry standards, of you, your agents and
employees, in carrying out your obligations under this Agreement.
Such indemnification will survive the termination of this Agreement.
8. Customer Lists: We hereby agree that we shall not use any list of
your customers which may be obtained in connection with this Agreement
for the purpose of solicitation of any product or service without your
express written consent. However, nothing in this paragraph or
otherwise shall be deemed to prohibit or restrict us or our affiliates
in any way from solicitations of any product or service directed at,
without limitation, the general public, any segment thereof, or any
specific individual, provided such solicitation is not based upon such
list.
9. Duration of Agreement: This Agreement, with respect to any Plan,
will continue in effect for one year from its effective date, and
thereafter will continue automatically for successive annual periods;
provided, however, that such continuance is subject to termination at
any time without penalty if a majority of a Portfolio's Trustees who
are not interested persons of the Portfolio (as defined in the
Investment Company Act of 1940 (the "1940 Act")), or a majority of the
outstanding shares of the Portfolio, vote to terminate or not to
continue the Plan. This Agreement, other than with respect to a Plan,
will continue in effect from year to year after its effective date,
unless terminated as provided herein.
10. Amendment and Termination of Agreement: (a) We may amend any
provision of this Agreement by giving you written notice of the
amendment. Either party to this Agreement may terminate the Agreement
without cause by giving the other party at least thirty (30) days'
written notice of its intention to terminate. This Agreement will
terminate automatically in the event of its assignment (as defined in
the 1940 Act).
(b) In the event that (i) an application for a protective decree
under the provisions of the Securities Investor Protection Act of 1970
is filed against you; (ii) you file a petition in bankruptcy or a
petition seeking similar relief under any bankruptcy, insolvency, or
similar law, or a proceeding is commenced against you seeking such
relief; or (iii) you are found by the SEC, the NASD, or any other
federal or state regulatory agency or authority to have violated any
applicable federal or state law, rule or regulation arising out of
your activities as a broker/dealer or in connection with this
Agreement, this Agreement will terminate effective immediately upon
our giving notice of termination to you. You agree to notify us
promptly and to immediately suspend sales of Portfolio shares in the
event of any such filing or violation, or in the event that you cease
to be a member in good standing of the NASD.
(c) Your or our failure to terminate this Agreement for a
particular cause will not constitute a waiver of the right to
terminate this Agreement at a later date for the same or another
cause. The termination of this Agreement with respect to any one
Portfolio will not cause its termination with respect to any other
Portfolio.
11. Arbitration: In the event of a dispute, such dispute will be
settled by arbitration before arbitrators sitting in Boston,
Massachusetts in accordance with the NASD's Code of Arbitration
Procedure in effect at the time of the dispute. The arbitrators will
act by majority decision and their award may allocate attorneys' fees
and arbitration costs between us. Their award will be final and
binding between us, and such award may be entered as a judgment in any
court of competent jurisdiction.
12. Notices: All notices required or permitted to be given under this
Agreement shall be given in writing and delivered by personal
delivery, by postage prepaid mail, or by facsimile machine or a
similar means of same day delivery (with a confirming copy by mail).
All notices to us shall be given or sent to us at our offices located
at 82 Devonshire Street, Mail Zone L12A, Boston, Massachusetts 02109,
Attn: Bank Wholesale Market. All notices to you shall be given or
sent to you at the address specified by you below. Each of us may
change the address to which notices shall be sent by giving notice to
the other party in accordance with this paragraph 11.
13. Miscellaneous: This Agreement, as it may be amended from time to
time, shall become effective as of the date when it is accepted and
dated below by us. This Agreement is to be construed in accordance
with the laws of the Commonwealth of Massachusetts. This Agreement
supersedes and cancels any prior agreement between us, whether oral or
written, relating to the sale of shares of the Portfolios or any other
subject covered by this Agreement. The captions in this Agreement are
included for convenience of reference only and in no way define or
limit any of the provisions of this Agreement or otherwise affect
their construction or effect.
Very truly yours,
FIDELITY DISTRIBUTORS
CORPORATION
Please return two signed copies of this Agreement to Fidelity
Distributors Corporation. Upon acceptance, one countersigned copy
will be returned to you for your files.
_____________________________________
Name of Firm
Address: _____________________________
_____________________________________
_____________________________________
By __________________________________
Authorized Representative
_____________________________________
Name and Title (please print or type)
CRD # _______________________________
ACCEPTED AND AGREED:
FIDELITY DISTRIBUTORS CORPORATION
By __________________________________
Dated: ________________
** DISCARD THIS PAGE AND ATTACH REVISED SCHEDULES A AND B **
Exhibit 11
KIRKPATRICK & LOCKHART LLP
1800 MASSACUSETTS AVENUE, NW
2ND FLOOR
WASHINGTON, D.C. 20036-1800
January 14, 1998
Fidelity Advisor Series VI
82 Devonshire Street
Boston, Massachusetts 02109
Ladies and Gentlemen:
You have requested our opinion regarding certain matters in
connection with the issuance of Class A, Class T, and Institutional
Class shares of Fidelity Advisor Intermediate Municipal Income Fund
("Advisor
Intermediate"), a series of Fidelity Advisor Series VI (the "Trust"),
pursuant to a Registration Statement to be filed by the Trust on Form
N-14 ("Registration Statement") under the Securities Act of 1933
("1933 Act") in connection with the proposed acquisition by Advisor
Intermediate of all of the assets of Fidelity Advisor
Short-Intermediate Municipal Income Fund (the "Merged Fund"), also a
series of the Trust, and the assumption by
Advisor Intermediate of the liabilities of the Merged Fund solely in
exchange for Class A, Class T, and
Institutional Class shares of Advisor Intermediate.
In connection with our services as counsel for the Trust, we have
examined, among other things,
originals or copies of such documents, certificates and corporate and
other records as we deemed necessary or appropriate for purposes of
this opinion. We have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us, the conformity to
original documents of all documents presented to us as copies thereof
and the authenticity of the original documents from which any such
copies were made, which
assumptions we have not independently verified. As to various matters
of fact material to this opinion, we have relied upon statements and
certificates of officers of the Trust. Based upon this examination,
we are of the
opinion that the Class A, Class T, and Institutional Class shares of
Advisor Intermediate to be issued pursuant to the Registration
Statement, when issued upon the terms provided in the Registration
Statement, subject to
compliance with the 1933 Act, the Investment Company Act of 1940, and
applicable state law regulating the offer and sale of securities, will
be legally issued, fully paid, and non-assessable.
The Trust is an entity of the type commonly known as a
"Massachusetts business trust." Under
Massachusetts law, shareholders of a business trust may be held
personally liable for the obligations of the
Trust. The Trust's Declaration of Trust provides that the Trustees
shall have no power to bind any shareholder personally or to call upon
any shareholder for the payment of any sum of money or assessment
whatsoever
other than such as the shareholder may at any time personally agree to
pay by way of subscription for any shares or otherwise. The
Declaration of Trust also requires that every note, bond, contract or
other undertaking issued by or on behalf of the Trust or the Trustees
relating to the Trust shall include a recitation limiting the
obligation represented thereby to the Trust and its assets (although
the omission of such recitation shall not operate to bind any
shareholder). The Declaration of Trust provides that: (i) in case
any shareholder or any former shareholder of any Series of the Trust
shall be held personally liable solely by reason of his being or
having been a shareholder and not because of his acts or omissions or
for some other reason, the shareholder or former shareholder shall be
entitled out of the assets belonging to the applicable Series to be
held harmless from and indemnified against all loss and expense
arising from such liability; and (ii) a Series shall, upon request by
the shareholder, assume the defense of any claim made against any
shareholder for any act or obligation of that Series and satisfy any
judgment thereon.
We hereby consent to the reference to our firm under the captions
"Federal Income Tax Consequences of the Reorganization," "Federal
Income Tax Considerations" and "Legal Matters" in the Proxy Statement
and Prospectus which constitute a part of the Registration Statement.
We further consent to your filing a copy of this opinion as an exhibit
to the Registration Statement.
Yours truly,
/s/Kirkpatrick & Lockhart LLP
Kirkpatrick & Lockhart LLP
Exhibit 12
KIRKPATRICK & LOCKHART LLP
ONE INTERNATIONAL PLACE
BOSTON, MASSACHUSETTS 02110-2637
January 27, 1998
Fidelity Advisor Series VI
82 Devonshire Street
Boston, MA 02109
Ladies and Gentlemen:
Fidelity Advisor Series VI ("Series VI"), a Massachusetts business
trust, on behalf of Fidelity Advisor Short-Intermediate Municipal
Income Fund ("Acquired") and Fidelity Advisor Intermediate Municipal
Income Fund ("Acquiring"), both series of Series VI, has requested our
opinion as to certain federal income tax consequences of a transaction
("Reorganization") in which Acquiring will acquire all of the assets
and assume all of the liabilities of Acquired in exchange solely for
Class A, Class T and Institutional Class shares of beneficial interest
in Acquiring ("Acquiring Shares") pursuant to an Agreement and Plan of
Reorganization ("Agreement") expected to be entered into between
Acquired and Acquiring on March 9, 1998.
In rendering this opinion, we have examined a draft of the Agreement
("Draft Agreement"), the prospectus/proxy statement to be filed with
the Securities and Exchange Commission in connection with the
Reorganization, the currently effective prospectuses and statements of
additional information of Acquired and Acquiring, and such other
documents as we have deemed necessary. We have also relied, with your
consent, on certificates of officers of Series VI.
OPINION
Based solely on the facts and representations set forth in the
reviewed documents and the certificates of officers of Series VI, and
assuming that (i) those representations are true on the date of the
Reorganization, (ii) the Reorganization is consummated in accordance
with the Agreement, and (iii) the Agreement does not differ materially
from the Draft Agreement, our opinion with respect to the federal
income tax consequences of the Reorganization is as follows:
1. The Reorganization will be a reorganization under section
368(a)(1)(C) of the Internal Revenue Code of 1986, as amended
("Code"), and Acquired and Acquiring will each be parties to the
Reorganization under section 368(b) of the Code.
2. No gain or loss will be recognized by Acquired upon the transfer
of all of its assets to Acquiring in exchange solely for Acquiring
Shares and Acquiring's assumption of Acquired's liabilities followed
by the distribution of those Acquiring Shares to the Acquired
shareholders of the corresponding class in liquidation of Acquired.
3. No gain or loss will be recognized by Acquiring on the receipt of
Acquired's assets in exchange solely for Acquiring Shares and the
assumption of Acquired's liabilities.
4. The basis of Acquired's assets in the hands of Acquiring will be
the same as the basis of such assets in Acquired's hands immediately
prior to the Reorganization.
5. Acquiring's holding period in the assets to be received from
Acquired will include Acquired's holding period in such assets.
6. The Acquired shareholders will recognize no gain or loss on the
exchange of each class of the shares of beneficial interest in
Acquired ("Acquired Shares") solely for the Acquiring Shares of the
corresponding class in the Reorganization.
7. The Acquired shareholders' basis in the Acquiring Shares to be
received by them will be the same as their basis in the Acquired
Shares of the corresponding class to be surrendered in exchange
therefor.
8. The holding period of the Acquiring Shares to be received by the
Acquired shareholders of the corresponding class will include the
holding period of the Acquired Shares to be surrendered in exchange
therefor, provided those Acquired Shares were held as capital assets
on the date of the Reorganization.
The foregoing opinion is based on, and is conditioned on the
continued applicability of, the provisions of the Code and the
regulations thereunder, case law precedent, and the Internal Revenue
Service pronouncements in existence at the date hereof. We express no
opinion as to whether Acquired will recognize gain or loss under
Section 1256 of the Code on the transfer of futures, forwards, or
options to Acquiring in the Reorganization. Nor do we express any
opinion other than those contained herein.
We consent to the inclusion of this opinion in the Registration
Statement on Form N 14 filed with the Securities and Exchange
Commission and the inclusion of the name "Kirkpatrick &
Lockhart LLP" in the "Federal Income Tax Consequences of the
Reorganization," "Federal Income Tax Considerations" and "Legal
Matters" sections of that Registration Statement.
Very truly yours,
. /s/Kirkpatrick & Lockhart LLP
Kirkpatrick & Lockhart LLP
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference, into the Proxy
Statement and Prospectus (the Proxy/Prospectus) constituting part of
this Registration Statement on Form N-14 (the Registration Statement)
of Fidelity Advisor Series VI: Fidelity Advisor Intermediate Municipal
Income Fund, of our report dated January 16, 1998 on the financial
statements and financial highlights included in the November 30, 1997
Annual Reports to Shareholders of Fidelity Advisor Series VI: Fidelity
Advisor Intermediate Municipal Income Fund.
We also consent to the incorporation by reference in the Registration
Statement, of our report dated January 16, 1998 on the financial
statements and financial highlights included in the November 30, 1997
Annual Reports to Shareholders of Fidelity Advisor Series VI: Fidelity
Advisor Short-Intermediate Municipal Income Fund.
We further consent to the references to our Firm under the headings
"Experts" and "Financial Highlights" in the Proxy/Prospectus and to
the references to our Firm under the headings "Financial Highlights"
in the Prospectuses and "Auditor" in the Statement of Additional
Information for Fidelity Advisor Series VI: Fidelity Advisor Municipal
Income Fund and Fidelity Advisor Short-Intermediate Municipal Income
Fund, which are also incorporated by reference into the
Proxy/Prospectus.
/s/ COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
January 20, 1998
<TABLE>
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<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FIDELITY ADVISOR INTERMEDIATE MUNICIPAL INCOME FUND
FIDELITY ADVISOR SHORT-INTERMEDIATE MUNICIPAL INCOME FUND
PRO FORMA COMBINING STATEMENT OF ASSETS & LIABILITIES AS OF NOVEMBER 30, 1997
(UNAUDITED)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FA INTERMEDIATE FA SHORT-INTERMED. PRO FORMA PRO FORMA
MUNICIPAL MUNI COMBINED ADJUSTMENTS COMBINED
ASSETS
Investment in securities, at value
- See accompanying schedule $63,193,113 $23,772,434 - $
86,965,547
Cash - 45,833 45,833 (45,833) (f) -
Interest receivable 864,602 443,524 1,308,126 - 1,308,126
Receivable for daily variation on 313 - 313 - 313
futures contracts
Receivable for investments sold - 105,395 105,395 - 105,395
Other receivables - - - - -
Prepaid expenses 13,782 - 13,782 - 13,782
TOTAL ASSETS 64,071,810 24,367,186 88,438,996 (45,833)
LIABILITIES
Payable to custodian bank $47,694 $ - $ (45,833) (f) $ 1,861
Payable for investments purchased - 491,209 1,119,035 1,610,244 - 1,610,244
delayed delivery
Payable for fund shares redeemed 61,659 - 61,659 - 61,659
Distributions payable 73,338 15,097 88,435 - 88,435
Distribution fees payable 14,440 2,813 17,253 - 17,253
Accrued management fee 18,402 6,882 25,284 - 25,284
Other payables and accrued expenses 66,675 31,785 98,460 - 98,460
TOTAL LIABILITIES 773,417 1,175,612 1,949,029 (45,833) 1,903,196
NET ASSETS $63,298,393 $23,191,574 $ - $86,489,967
Net Assets consist of:
Paid in capital $60,935,835 $22,746,361 - 83,682,196
Accumulated undistributed net
realized gain (loss) on
investments 56,767 41,724 98,491 -
Net unrealized appreciation
(depreciation) on
investments 2,305,791 403,489 2,709,280 - 2,709,280
NET ASSETS 63,298,393 $23,191,574 $ -
</TABLE>
<TABLE>
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FA INTERMEDIATE FA SHORT-INTER PRO FORMA PRO FORMA
MUNICIPAL MED.MUNI COMBINED ADJUSTMENTS COMBINED
CLASS A: $441,602 $639,381 $1,080,983 $1,080,983
NET ASSET VALUE and redemption $10.60 $10.20 $10.60
price per share
Shares outstanding 41,679 62,680 104,359 (2,361) (a) 101,998
Maximum offering price per share $11.01 $11.01
(100/96.25 of $10.60)
Maximum offering price per share $10.36
(100/98.50 of $10.20)
CLASS T: $48,830,052 $21,916,347
NET ASSET VALUE and redemption $10.59 $10.21 $10.59
price per share
Shares outstanding 4,609,444 2,147,471 6,756,915 (77,939) (a) 6,678,976
Maximum offering price per share $10.89 $10.89
(100/97.25 of $10.59)
Maximum offering price per share $10.37
(100/98.50 of $10.21)
CLASS B: $7,916,605 - $7,916,605 $7,916,605
NET ASSET VALUE and offering price $10.59 - $10.59
per share (A)
Shares outstanding 747,589 - 747,589 - 747,589
CLASS C: $12,572 - $12,572 $12,572
NET ASSET VALUE and offering price $10.59 - $10.59
per share (A)
Shares outstanding 1,187 - 1,187 - 1,187
INSTITUTIONAL CLASS: $6,097,562 $635,846 $6,733,408 $6,733,408
NET ASSET VALUE, offering price and $10.59 $10.21 $10.59
redemption price per share
Shares outstanding 575,743 62,284 638,027 (2,242) (a) 635,785
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
(A) REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FIDELITY ADVISOR INTERMEDIATE MUNICIPAL INCOME FUND
FIDELITY ADVISOR SHORT-INTERMEDIATE MUNICIPAL INCOME FUND
PRO FORMA COMBINING STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1997
(UNAUDITED)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FA INTERMEDIATE FA SHORT-INTERMED. PRO FORMA PRO FORMA
MUNICIPAL MUNI COMBINED ADJUSTMENTS COMBINED
INTEREST INCOME $ 3,478,411 $ 1,251,876 $ 4,730,287 - $ 4,730,287
EXPENSES
Management fee 255,140 99,898 355,038 - 355,038
Transfer agent fees - Class A 1,254 1,347 2,601 (1,014) (b) 1,587
Transfer agent fees - Class T 99,245 51,815 151,060 (666) (b) 150,394
Transfer agent fees - Class B 14,216 - 14,216 (546) (b) 13,670
Transfer agent fees - Class C (g) 5 - 5 - 5
Transfer agent fees - Institutional
Class 12,291 1,647 13,938 (1,058) (b) 12,880
Distribution Fees - Class A 521 523 1,044 - 1,044
Distribution Fees - Class T 127,082 37,068 164,150 24,689 (c) 188,839
Distribution Fees - Class B 67,287 - 67,287 - 67,287
Distribution Fees - Class C (g) 6 - 6 - 6
Accounting fees and expenses 61,883 65,365 127,248 (62,971) (b) 64,277
Non-interested trustees' compensation 180 179 359 (109) (b) 250
Custodian fees and expenses 6,548 4,383 10,931 (1,820) (b) 9,111
Registration fees - Class A 28,753 28,087 56,840 (40,840) (b) 16,000
Registration fees - Class T 14,768 13,406 28,174 (12,174) (b) 16,000
Registration fees - Class B 14,527 - 14,527 - 14,527
Registration fees - Class C (g) 1,253 - 1,253 - 1,253
Registration fees - Institutional
Class 14,998 17,099 32,097 (16,097) (b) 16,000
Audit 43,635 37,671 81,306 (35,171) (b) 46,135
Legal 886 730 1,616 (383) (b) 1,233
Miscellaneous 1,700 602 2,302 63 (d) 2,365
Total expenses before reductions 766,178 359,820 1,125,998 (148,097) 977,901
Expense reductions (82,120) (130,260) (212,380) 97,301 (e), (115,079)
(h)
Total expenses 684,058 229,560 913,618 (50,796) 862,822
NET INTEREST INCOME 2,794,353 1,022,316 3,816,669 50,796 3,867,465
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 858,153 63,343 921,496 - 921,496
Futures contracts 16,876 (1,274) 15,602 - 15,602
Change in net unrealized apprecation - - -
(depreciation) on:
Investment securities 175,681 (29,224) 146,457 - 146,457
Futures contracts 16,502 - 16,502 - 16,502
NET GAIN (LOSS) 1,067,212 32,845 1,100,057 - 1,100,057
-
NET INCREASE (DECREASE) IN NET ASSETS 3,861,565 1,055,161 4,916,726 50,796 4,967,522
RESULTING FROM OPERATIONS
</TABLE>
Fidelity Advisor Intermediate Municipal Income Fund
Fidelity Advisor Short-Intermediate Municipal Income Fund
Notes to Pro Forma Combining Financial Statements
(Unaudited)
The accompanying unaudited Pro Forma Combining Schedule of
Investments and Statement of Assets and Liabilities as of November
30, 1997 and the unaudited Pro Forma Combining Statement of Operations
for the year ended November 30, 1997 are intended to present the
financial condition and related results of operations of Fidelity
Advisor Intermediate Municipal Income Fund as if the reorganization
with Fidelity Advisor Short-Intermediate Municipal Income Fund, had
been consummated at December 1, 1996. Had the pro forma adjustments
not included the effect of the expense limitations, Pro Forma Combined
Expense reductions would have been $1,385, resulting in Pro Forma
Combined Net Interest Income and Pro Forma Combined Net Increase in
Net Assets resulting from operations of $3,751,001 and $4,851,058,
respectively.
The pro forma adjustments to these pro forma financial statements are
comprised of:
(a) Reflects the conversion of the Fidelity Advisor Short-Intermediate
Municipal Income Fund Class A, Class T, and Institutional Class shares
as of November 30, 1997.
(b) Decrease in fees reflects elimination of duplicate charges.
(c) Increase in fees reflects Class T's Pro Forma combined
distribution fee of 0.25% from Fidelity Advisor Short-Intermediate
Municipal Income Fund Class T's 0.15% distribution fee.
(d) Increase in fees reflects net increase in costs incurred as a
result of the reorganization offset with savings in duplicate charges.
(e) Decrease in expense reductions reflects the effect of the Pro
Forma adjustments and Class T's lower expense limitation.
(f) Reclass to reflect net cash position for the combined fund.
(g) Class C amounts reflect the period November 3, 1997 (commencement
of sale of Class C shares) to November 30, 1997.
(h) Reimbursement from FMR for the Pro Forma Combined Class A, Class
T, Class B, Class C, and Institutional Class amounted to $16,439,
$80,797, $6,357, $1,250, and $8,851 respectively. In addition, $1,385
related to credits earned on uninvested cash balances for Class T of
Fidelity Advisor Intermediate Municipal Income are included in Pro
Forma Combined expense reductions.
The unaudited pro forma combining statements should be read in
conjunction with the separate annual audited financial statements as
of November 30, 1997 for Fidelity Advisor Intermediate Municipal
Income Fund and Fidelity Advisor Short-Intermediate Municipal Income
Fund, which are incorporated by reference in the Statement of
Additional Information to this Proxy and Prospectus.
<TABLE>
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<S> <C> <C> <C> <C> <C> <C> <C>
FIDELITY ADVISOR INTERMEDIATE
MUNI. INCOME FUND & FIDELITY
ADVISOR SHORT-INTERMEDIATE
MUNI. INCOME FUND FIDELITY ADVISOR FIDELITY ADVISOR
INTERMEDIATE SHORT-INTERMEDIATE
INVESTMENTS AT NOVEMBER
30, 1997 (UNAUDITED) MUNI. INCOME FUND MUNI. INCOME FUND COMBINED
PRINCIPAL PRINCIPAL PRINCIPAL
AMOUNT VALUE ($) AMOUNT VALUE ($) AMOUNT VALUE ($)
MUNI. BONDS
Alabama Mobile Board of 175,000 $ 175,802 175,000 $ 175,802
Wtr. & Swr.
Commisioners
Wtr. Svc. Rev.
9.875% 1/1/98
(Escrowed to
Maturity)
Alaska North Slope 3,000,000 $2,381,250 3,000,000 2,381,250
Borough Gen.
Oblig. (Cap.
Appreciation)
Series B, 0%
1/1/03 (MBIA
Insured)
Alaska Alaska Student 300,000 305,625 300,000 305,625
Loan Corp.
Student Loan
Rev. Series A, 5%
7/1/03 (AMBAC
Insured) (AMT)
Arkansas Arkansas College 1,000,000 820,000 1,000,000 820,000
Savings Gen.
Oblig. (Cap.
Appreciation)
Series A, 0%
6/1/02
California California Edl. 225,000 225,563 225,000 225,563
Facs. Auth. Rev.
Rfdg. (Chapman
Univ.) 5.375%
10/1/16 (Connie
LeeInsured)
California California Hsg. 1,000,000 1,045,000 1,000,000 1,045,000
Fin. Agcy. Rev.
(Home Mtg.)
Series R, 5.35%
8/1/07 (MBIA
Insured) AMT
California California Poll. 500,000 544,375 500,000 544,375
Cont. Fing. Auth.
Resource
Recovery Rev.
(Waste Mgmt.,
Inc.) Series A,
7.15% 2/1/11
(AMT)
California California Rural 1,000,000 1,011,250 1,000,000 1,011,250 2,000,000 2,022,500
Home Mtg. Fin.
Auth. Lease Rev.
(Rural Lease
Purpose) Series
A, 4.45%8/1/01
(MBIA Insured)
California California Gen. 400,000 435,500 400,000 435,500
Oblig. (Various
Purpose) 6.25%
10/1/19
California California Pub. 500,000 506,250 500,000 506,250
Wks. Board
Lease Rev. Rfdg.
(Dept. of
Corrections State
Prison,Monterey
County Soledad
II) Series D,
5.375% 11/1/14
California California Pub. 1,000,000 1,056,250 1,000,000 1,056,250
Wks. Board
Lease Rev. Rfdg.
(Various
California State
Univ.
Projs.)Series A,
5.50% 6/1/10
California Central Valley 1,000,000 1,004,760 1,000,000 1,004,760
Fing. Auth. Rev.
(Carson
Ice-Generation
Proj.) 5% 7/1/98
California Long Beach Hbr. 250,000 262,188 250,000 262,188
Rev. Rfdg. Series
A, 5.50% 5/15/07
(FGIC Insured)
(AMT)
California Los Angeles 250,000 277,813 250,000 277,813
Unified School
Dist. Series A,
6% 7/1/11 (FGIC
Insured)
California Los Angeles 970,000 695,975 970,000 695,975
County Ctfs. of
Prtn. (Disney
Parking Proj.)
(Cap.
Appreciation) 0%
9/1/04
California Sacramento 1,000,000 1,023,750 1,000,000 1,023,750
Muni. Util. Dist.
Elec. Rev. 1.76%
11/15/08 (FGIC
Insured) (stepped
coupon)
California Sacramento Pwr. 1,000,000 1,057,500 1,000,000 1,057,500
Auth.
Cogeneration
Proj. Rev. 6%
7/1/02
California Sacramento Pwr. 300,000 331,125 300,000 331,125
Auth.
Cogeneration
Proj. Rev. 6.50%
7/1/08
California San Bernadino 500,000 512,500 500,000 512,500
County Ctfs. of
Prtn. Rfdg. (Med.
Ctr. Fing. Proj.)
5.25% 8/1/04
California West Covina Ctfs. 1,000,000 1,086,250 1,000,000 1,086,250
of Prtn. (Queen of
The Valley Hosp.)
6.50% 8/15/09
Colorado Arapaho County 3,620,000 524,900 3,620,000 524,900
Cap. Impt. Tr.
Fed. Hwy. Rev.
(Cap.
Appreciation)
Series E, 0%,
8/31/26
(Pre-Refunded to
8/31/05 @
20.8626
Colorado Colorado Health 500,000 530,625 500,000 530,625
Facs. Auth. Rev.
Rfdg. (Rocky
Mountain
Adventist) 6.25%
2/1/04
Colorado Denver City & 250,000 256,283 250,000 256,283
County Arpt. Rev.
Series A, 6.90%
11/15/98 (AMT)
District of District of 1,000,000 1,043,750 1,000,000 1,043,750
Columbia Columbia Gen.
Oblig. Rfdg.
Series B-1,
5.40% 6/1/06
(AMBAC Insured)
District of District of 500,000 509,375 500,000 509,375
Columbia Columbia Redev.
Land Agcy.
Washington D.C.
Sports Arena Spl.
Tax Rev.5.40%
11/1/00
Florida Broward County 500,000 543,750 500,000 543,750
Resource
Recovery Rev.
(SES Broward
Co. LP South
Proj.) 7.95%
12/1/08
Florida Dade County 500,000 516,875 500,000 516,875
Aviation Rev.
Rfdg. (Miami Int'l
Arpt.) Series A,
5.25 10/01/01
(FSA Insured)
(AMT)
Florida Dade County Wtr. 500,000 573,750 500,000 573,750
& Swr. Sys. Rev.
6.25% 10/1/10
(FGIC Insured)
Florida Jacksonville Port 500,000 538,750 500,000 538,750
Auth. Rev. Rfdg.
(Port Facs.)
5.75% 11/1/09
(MBIA Insured)
(AMT)
Florida St. Petersburg 100,000 100,093 100,000 100,093
Excise Tax Rev.
Rfdg. 3.80%
10/1/98 (FGIC
Insured)
Georgia Georgia Gen. 1,000,000 1,118,750 1,000,000 1,118,750
Oblig. Rfdg.
Series A, 6.25%
3/1/06
Georgia Georgia Gen. 500,000 545,000 500,000 545,000
Oblig. Series D,
6.80% 8/1/01
Georgia Monroe County 500,000 566,875 500,000 566,875
Dev. Auth. Poll.
Cont. Rev. Rfdg.
(Oglethorpe Pwr.
Scherer Corp.)
Series A, 6.60%
1/1/07
Hawaii Honolulu Hawaii 250,000 264,688 250,000 264,688
City and County
Rfdg. Series C,
5.50% 11/01/04
(FGIC Insured)
Illinois Chicago Midway 300,000 321,750 300,000 321,750
Arpt. Rev. Series
B, 6% 1/1/09
(MBIA Insured)
(AMT)
Illinois Illinois Health 1,000,000 1,050,000 1,000,000 1,050,000
Facs. Auth. Rev.
Rfdg. (Felician
Health Care, Inc.)
Series A,
6.85%1/1/00
(AMBAC Insured)
Illinois Metropolitan Pier 1,000,000 895,000 1,000,000 895,000
& Exposition
Auth. Dedicated
Tax Rev. 0%
6/15/00 (AMBAC
Insured)
Illinois Metropolitan Pier 500,000 281,875 500,000 281,875
& Exposition
Auth. Dedicated
Tax Rev.
(McCormick
Place
ExpansionProj.)
Series A, 0%
6/15/09 (FGIC
Insured)
Indiana Indianapolis 500,000 539,375 500,000 539,375
Resource
Recovery Rev.
Rfdg. (Ogden
Martin Sys. Inc.
Proj.) 6.50%
12/1/01 (AMBAC
Insured)
Iowa Iowa Student 1,000,000 1,052,500 1,000,000 1,052,500
Loan Liquidity
Corp. Student
Loan Rev. Series
A, 6.35% 3/1/01
Louisiana Louisiana Pub. 830,000 870,463 995,000 1,043,506 1,825,000 1,913,969
Facs. Auth. Rev.
Rfdg. (Student
Loan) Sr. Series
A-1, 6.20%
3/1/01
Maine Maine Edl. Loan 1,000,000 1,025,000 1,000,000 1,025,000
Marketing Corp
Student Loan
Rev. Series A-4,
5.45% 11/1/99
(AMT)
Massachusetts Boston Rev. 250,000 276,563 250,000 276,563
(Boston City
Hosp.) Series A,
7.625% 2/15/21
(FHA
Guaranteed)
(Pre-Refunded to
8/15/00 @ 102)
Massachusetts Massachusetts 250,000 255,932 250,000 255,932
Gen. Oblig. Rfdg.
Series A, 5.50%
2/1/11
Massachusetts Massachusetts 400,000 400,000 300,000 300,000 700,000 700,000
Health & Edl.
Facs. Auth. Rev.
Rfdg. (Fairview
Extended Care)
Series B,4.55%
7/14/02 (MBIA
Insured) LOC
BankBoston NA
Massachusetts Massachusetts 1,600,000 1,292,000 1,600,000 1,292,000
Ind. Fin. Agcy.
Rev. (Cap.
Appreciation)
(Massachusetts
BiomedicalResea
rch) Series A-1,
0% 8/1/02
Massachusetts Massachusetts 600,000 610,962 600,000 610,962
Tpk. Auth.
Western Tpk.
Rev. Series A,
5.55% 01/1/17
(MBIA Insured)
Massachusetts Nantucket Gen. 200,000 206,250 200,000 206,250
Oblig. 5% 7/15/03
(MBIA Insured)
Massachusetts New England Ed. 1,950,000 1,998,750 1,950,000 1,998,750
Loan Marketing
Corp. Student
Loan Rev. Rfdg.
Series B, 5.40%
6/1/00
Michigan Michigan Pub. 700,000 736,750 700,000 736,750
Pwr. Agcy. Rev.
Rfdg. (Campbell
Proj.) Series A,
5.50% 1/1/04
(AMBAC Insured)
Michigan Michigan Hosp. 200,000 214,000 200,000 214,000
Fin. Auth. Rev.
Rfdg. (Mercy
Health Services)
Series S, 5.75%
8/15/05
Michigan Utica Commty. 125,000 125,180 125,000 125,180
Schools Bldg. &
Site Rfdg. 4.10%
5/1/98 (FGIC
Insured)
Minnesota Minneapolis Gen. 200,000 161,250 200,000 161,250
Oblig. (Cap.
Appreciation)
Series B, 0%
12/1/02
Minnesota Minnesota Gen. 1,000,000 1,103,750 1,000,000 1,103,750
Oblig. 6% 5/1/06
Minnesota Minnesota Higher 200,000 206,750 200,000 206,750
Ed. Facs. Auth.
Rev. (MaCalester
College) Series
4-C, 5.50%
3/1/12
Montana Montana Higher 1,240,000 1,295,800 1,240,000 1,295,800
Ed. Student
Assistance Corp.
Student Loan
Rev. Series B,
6.60%
12/1/99(AMT)
Nevada Clark County 500,000 588,750 500,000 588,750
School Dist.
Series A, 9.75%
6/1/01 (MBIA
Insured)
New Jersey New Jersey Econ. 1,000,000 1,142,500 1,000,000 1,142,500
Dev. Auth. Market
Transition Facs.
Rev. (Sr. Lien)
Series A,
7%7/1/04 (MBIA
Insured)
New Mexico Albuquerque Arpt. 250,000 261,563 250,000 261,563
Rev. Rfdg. 6.25%
7/1/00 (AMBAC
Insured)
New Mexico Albuquerque Arpt. 450,000 519,750 450,000 519,750
Rev. Rfdg. 6.75%
7/1/09 (AMBAC
Insured) (AMT)
New Mexico New Mexico Edl. 2,300,000 2,501,250 2,300,000 2,501,250
Assistance
Foundation
Student Loan
Rev. Sr. Series
IV-A2, 6.65%
3/1/07 (AMT)
New Mexico Rio Rancho Wtr. 500,000 596,875 500,000 596,875
& Wastewtr. Sys.
Rev. Series A, 8%
5/15/04 (FSA
Insured)
New York Metropolitan 1,000,000 1,092,500 1,000,000 1,092,500
Trans. Auth. Svc.
Contract Transit
Facs. Rfdg.
Series 5, 6.90%
7/1/05
New York New York City 1,000,000 1,033,750 1,000,000 1,033,750
Muni. Assistance
Corp. Rfdg.
5.50% 7/1/00
New York New York City 500,000 543,125 500,000 543,125
Muni. Assistance
Corp. Rfdg.
Series E, 6%
7/1/04
New York New York City 1,000,000 1,090,000 1,000,000 1,090,000
Gen. Oblig. Rfdg.
Series H, 7.875%
8/1/00
New York New York City 2,000,000 2,060,000 2,000,000 2,060,000
Gen. Oblig.
Series G, 5.40%
2/1/01
New York New York State 500,000 606,250 500,000 606,250
Dorm. Auth. Rev.
(City Univ. Sys.
Consolidated)
Series C, 7.50%
7/1/10
New York New York State 500,000 526,250 500,000 526,250
Dorm. Auth. Rev.
(City Univ. Sys.
Consolidated)
Series A, 5.75%
7/1/13
New York New York State 500,000 553,750 500,000 553,750
Dorm. Auth. Rev.
Rfdg. (State Univ.
Edl. Facs.) Series
A, 6.50% 5/15/04
New York New York State 1,000,000 601,250 1,000,000 601,250
Local Gov't.
Assistance Corp.
(Cap.
Appreciation)
Series A, 0%
4/1/08
New York New York State 100,000 105,750 100,000 105,750
Local Gov't.
Assistance Corp.
Rfdg. Series A,
5.50% 4/1/04
(AMBAC Insured)
New York New York State 500,000 530,625 500,000 530,625
Thruway Auth.
Hwy. & Bridge
Trust Fund Series
A, 5.80% 4/1/09
New York New York State 200,000 212,750 200,000 212,750
Thruway Auth.
Svc. Contract
Rev. (Local Hwy.
& Bridge) 6%
4/1/03
New York New York State 250,000 258,750 250,000 258,750
Thruway Auth.
Svc. Contract
Rev. (Local Hwy.
& Bridge) 5.40%
4/1/03
New York New York State 500,000 520,625 500,000 520,625
Urban Dev. Corp.
Rev. Series A,
5.50% 4/1/10
(MBIA Insured)
North Carolina North Carolina 500,000 518,750 500,000 518,750
Eastern Muni.
Pwr. Agcy. Pwr.
Sys. Rev. Series
A, 5.625% 1/1/03
North Carolina North Carolina 1,000,000 1,067,500 1,000,000 1,067,500
Eastern Muni.
Pwr. Agcy. Pwr.
Sys. Rev. Rfdg.
Series B, 6%
1/1/06
North Carolina North Carolina 200,000 206,000 200,000 206,000
Eastern Muni.
Pwr. Agcy. Pwr.
Sys. Rev. Rfdg.
Series C, 5.50%
1/1/07
North Carolina North Carolina 750,000 780,938 750,000 780,938
Muni. Pwr. Agcy.
#1 Catawba Elec.
Rev. Rfdg. 5.75%
1/1/02
North Carolina North Carolina 250,000 263,125 250,000 263,125
Muni. Pwr. Agy.
Rfdg. (Catawba
Elec. Rev.) 5.90%
1/1/03
Ohio Columbus 270,000 279,680 270,000 279,680
Variable Purpose
Wtrwks. & Swr.
Impt. Unltd. Tax
12% 5/15/98
Ohio Ohio Bldg. Auth. 500,000 522,500 500,000 522,500
State Facs. (Adult
Correctional)
Series A, 5.95%
10/1/14 (MBIA
Insured)
Ohio Ohio Tpk. 250,000 259,063 250,000 259,063
Commission Tpk.
Rev. Series A,
5.60% 2/15/12
(MBIA Insured)
Pennsylvania Pennsylvania 215,000 219,838 215,000 219,838
Convention Ctr.
Auth. Rev. Rfdg.
Series A, 5.75%
9/1/99
Pennsylvania Pennsylvania 1,000,000 1,077,500 1,000,000 1,077,500
Hsg. Fin. Agcy.
Rfdg. (Residential
Dev. Section 8)
Series A, 7%
7/1/01
Pennsylvania Pennsylvania 1,270,000 1,395,413 1,270,000 1,395,413
Higher Edl. Facs.
Auth. College &
Univ. Revs. Rfdg.
(RIDC Reg'l.
Growth
-Carnegie Mellon
Univ. Proj.) 6%
11/1/04
Pennsylvania Pennsylvania 650,000 666,250 650,000 666,250
Higher Ed. Facs.
Auth. Health
Svcs. Rev. Rfdg.
(Penn. Univ.)
Series A, 5.125%
1/1/01
Rhode Island Rhode Island 1,000,000 1,066,250 1,000,000 1,066,250
Student Loan
Auth. Student
Loan Rev. Rfdg.
Series A, 6.55%
12/1/00
South Carolina South Carolina 1,300,000 1,374,750 1,300,000 1,374,750
Gen. Oblig. (State
Hwy.) 5.40%
8/1/03
South Carolina South Carolina 1,250,000 1,306,250 1,250,000 1,306,250
Ed. Assistance
Auth. Rev. Rfdg.
(Guaranteed
Student Loan)
(Sr. Lien)Series
A-2, 5.40% 9/1/
02
South Carolina South Carolina 1,000,000 1,050,000 1,000,000 1,050,000
Ed. Assistance
Auth. Rev. Rfdg.
(Guaranteed
Student Loan)
(Sub.-Lien)Series
B, 5.70% 9/1/05
(AMT)
Tennessee Memphis-Shelby 275,000 282,563 275,000 282,563
County Arpt.
Auth. Arpt. Rev.
Rfdg. Series A,
5.25% 2/15/01
(MBIA Insured)
(AMT)
Tennessee Memphis-Shelby 265,000 288,519 265,000 288,519
County Arpt.
Auth. Arpt. Rev.
Rfdg. Series A,
6% 2/15/07
(MBIA Insured)
(AMT)
Tennessee Metropolitan 505,000 525,200 505,000 525,200
Gov't N&D
County Sereis A,
5.125% 11/15/05
Texas Austin Gen. Oblig. 1,000,000 1,093,750 1,000,000 1,093,750
Pub. Impt. Ltd.
Tax 7% 9/1/01
Texas Austin 500,000 565,625 500,000 565,625
Independent
School Dist.
School Bldg.
8.125% 8/1/01
(PSF
Guaranteed)
(Escrowedto
Maturity)
Texas Brazos Higher 500,000 525,000 500,000 525,000
Ed. Auth. Student
Loan Rev. Rfdg.
Series A-1,
6.05% 12/1/01
(AMT)
Texas Deer Park 200,000 158,500 200,000 158,500
Independent
School Dist. Rfdg.
0% 2/15/03 (PSF
Guaranteed)
Texas Hurst Euless 1,000,000 496,250 1,000,000 496,250
Bedford
Independent
School Dist. Rfdg.
(Cap.
Appreciation) 0%
8/15/11(PSF
Guaranteed)
Texas Irving Texas 250,000 227,813 250,000 227,813
Independent
School Dist. 0%
2/15/00 (PSF
Guaranteed)
Texas North East 2,065,000 1,886,894 2,065,000 1,886,894
Independent
School Dist. Rfdg.
(Cap.
Appreciation)
Series D, 0%
2/1/00
Texas Northside 500,000 543,122 500,000 543,122
Independent
School Dist.
School Bldg.
8.375% 2/1/00
(PSF
Guaranteed)
Texas Port Arthur Hsg. 465,000 507,431 465,000 507,431
Fin. Corp. Single
Family Mtg. Rev.
Rfdg. 8.70%
3/1/12
Texas San Antonio Gen. 125,000 128,906 125,000 128,906
Oblig. Rfdg. (Gen.
Impt.) 5.50%
8/1/02
Texas Texas A&M Univ. 980,000 988,575 980,000 988,575
Rev. Rfdg. (Fing.
Sys.) 5% 5/15/00
Texas Texas Pub. Fin. 1,000,000 1,132,500 1,000,000 1,132,500
Auth. Bldg. Rev.
Rfdg. (Texas
Technical
College) 6.25%
8/1/09
(MBIAInsured)
Utah Intermountain 2,860,000 1,901,900 2,860,000 1,901,900
Pwr. Agcy. Pwr.
Supply Rev. (Cap.
Appreciation)
Series A, 0%
7/1/06(MBIA
Insured)
Utah Intermountain 500,000 448,125 500,000 448,125
Pwr. Agcy. Pwr.
Supply Rev. Rfdg.
(Cap.
Appreciation)
Series B, 0%
7/1/00 (MBIA
Insured)
Utah Intermountain 200,000 193,000 200,000 193,000
Pwr. Agcy. Pwr.
Supply Sys. Rev.
Rfdg. Series D,
5% 7/1/21 (MBIA
Insured)
Utah Intermountain 250,000 287,188 250,000 287,188
Pwr. Agcy. Pwr.
Supply Sys. Rev.
Rfdg. Series A,
6.50% 7/1/08
(AMBACInsured)
Virginia Fairfax County 1,000,000 1,023,750 1,000,000 1,023,750
Gen. Oblig. Pub.
Impt. Series A,
5.5% 6/1/99
Virginia Virginia Pub. 500,000 530,000 500,000 530,000
School Auth.
School Fing.
Series A, 6.20%
1/1/00
(Pre-Refunded to
1/1/00 @ 102)
Washington Washington Pub. 500,000 523,750 500,000 523,750
Pwr. Supply Sys.
Nuclear Proj. #1
Rev. Rfdg. Series
A, 7.25% 7/1/99
Washington Washington Pub. 525,000 582,094 525,000 582,094
Pwr. Supply Sys.
Nuclear Proj. #2
Rev. Rfdg. Series
C, 7.50% 7/1/03
Washington Washington Pub. 2,000,000 2,027,500 2,000,000 2,027,500
Pwr. Supply Sys.
Nuclear Proj. #2
Rev. 5.40%
7/1/12
Washington Washington Pub. 500,000 514,375 500,000 514,375
Pwr. Supply Sys.
Nuclear Proj. #3
Rev. Rfdg. Series
C, 5.10%7/1/07
TOTAL MUNI. 60,676,612 23,772,434 84,449,046
BONDS
CASH
EQUIVALENTS
Cash Equivalents Muni. Central 2,516,501 2,516,501 2,516,501 2,516,501
Cash Fund 3.86%
12/5/97
TOTAL $63,193,113 $23,772,434 $86,965,547
INVESTMENTS
IN SECURITIES
- - 100%
FUTURES
CONTRACTS
Underlying Unrealized Underlying Unrealized Underlying Unrealized
face face face
Expiration Date amount at Gain/ (Loss) amount at Gain/ (Loss) amount at Gain/ (Loss)
value value value
PURCHASED 10 Municipal $ 1,222,812 $ 16,502 $ 1,222,812 $ 16,502
Bond Future
Contracts Dec. 97
TOTAL COST OF $60,903,824 $23,368,945 $84,272,769
INVESTMENT
SECURITIES
</TABLE>
POWER OF ATTORNEY
We, the undersigned Directors, Trustees, or General Partners, as the
case may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Aberdeen Street Trust Fidelity Government Securities Fund
Fidelity Advisor Annuity Fund Fidelity Hastings Street Trust
Fidelity Advisor Series I Fidelity Hereford Street Trust
Fidelity Advisor Series II Fidelity Income Fund
Fidelity Advisor Series III Fidelity Institutional Cash Portfolios
Fidelity Advisor Series IV Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Advisor Series V Fidelity Institutional Trust
Fidelity Advisor Series VI Fidelity Investment Trust
Fidelity Advisor Series VII Fidelity Magellan Fund
Fidelity Advisor Series VIII Fidelity Massachusetts Municipal Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust
Fidelity Boston Street Trust Fidelity Mt. Vernon Street Trust
Fidelity California Municipal Trust Fidelity Municipal Trust
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Capital Trust Fidelity New York Municipal Trust
Fidelity Charles Street Trust Fidelity New York Municipal Trust II
Fidelity Commonwealth Trust Fidelity Phillips Street Trust
Fidelity Congress Street Fund Fidelity Puritan Trust
Fidelity Contrafund Fidelity Revere Street Trust
Fidelity Corporate Trust Fidelity School Street Trust
Fidelity Court Street Trust Fidelity Securities Fund
Fidelity Court Street Trust II Fidelity Select Portfolios
Fidelity Covington Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Daily Money Fund Fidelity Summer Street Trust
Fidelity Daily Tax-Exempt Fund Fidelity Trend Fund
Fidelity Destiny Portfolios Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity U.S. Investments-Government Securities
Portfolio, L.P. Fund, L.P.
Fidelity Devonshire Trust Fidelity Union Street Trust
Fidelity Exchange Fund Fidelity Union Street Trust II
Fidelity Financial Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Variable Insurance Products Fund II
</TABLE>
plus any other investment company for which Fidelity Management &
Research Company or an affiliate acts as investment adviser and for
which the undersigned individual serves as Directors, Trustees, or
General Partners (collectively, the "Funds"), hereby constitute and
appoint Arthur J. Brown, Arthur C. Delibert, Stephanie A. Djinis,
Robert C. Hacker, Thomas M. Leahey, Richard M. Phillips, and Dana L.
Platt, each of them singly, our true and lawful attorneys-in-fact,
with full power of substitution, and with full power to each of them,
to sign for us and in our names in the appropriate capacities, all
Registration Statements of the Funds on Form N-1A, Form N-8A or any
successor thereto, any and all subsequent Amendments, Pre-Effective
Amendments, or Post-Effective Amendments to said Registration
Statements on Form N-1A or any successor thereto, any Registration
Statements on Form N-14, and any supplements or other instruments in
connection therewith, and generally to do all such things in our names
and behalf in connection therewith as said attorneys-in-fact deems
necessary or appropriate, to comply with the provisions of the
Securities Act of 1933 and the Investment Company Act of 1940, and all
related requirements of the Securities and Exchange Commission. I
hereby ratify and confirm all that said attorneys-in-fact or their
substitutes may do or cause to be done by virtue hereof. This power
of attorney is effective for all documents filed on or after January
1, 1997.
WITNESS our hands on this nineteenth day of December, 1996.
/s/Edward C. Johnson 3d___________ /s/Peter S. Lynch________________
Edward C. Johnson 3d Peter S. Lynch
/s/J. Gary Burkhead_______________ /s/William O. McCoy______________
J. Gary Burkhead William O. McCoy
/s/Ralph F. Cox __________________ /s/Gerald C. McDonough___________
Ralph F. Cox Gerald C. McDonough
/s/Phyllis Burke Davis_____________ /s/Marvin L. Mann________________
Phyllis Burke Davis Marvin L. Mann
/s/E. Bradley Jones________________ /s/Thomas R. Williams ____________
E. Bradley Jones Thomas R. Williams
/s/Donald J. Kirk __________________
Donald J. Kirk
POWER OF ATTORNEY
I, the undersigned Director, Trustee, or General Partner, as the case
may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Aberdeen Street Trust Fidelity Government Securities Fund
Fidelity Advisor Annuity Fund Fidelity Hastings Street Trust
Fidelity Advisor Series I Fidelity Hereford Street Trust
Fidelity Advisor Series II Fidelity Income Fund
Fidelity Advisor Series III Fidelity Institutional Cash Portfolios
Fidelity Advisor Series IV Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Advisor Series V Fidelity Institutional Trust
Fidelity Advisor Series VI Fidelity Investment Trust
Fidelity Advisor Series VII Fidelity Magellan Fund
Fidelity Advisor Series VIII Fidelity Massachusetts Municipal Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust
Fidelity Boston Street Trust Fidelity Mt. Vernon Street Trust
Fidelity California Municipal Trust Fidelity Municipal Trust
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Capital Trust Fidelity New York Municipal Trust
Fidelity Charles Street Trust Fidelity New York Municipal Trust II
Fidelity Commonwealth Trust Fidelity Phillips Street Trust
Fidelity Congress Street Fund Fidelity Puritan Trust
Fidelity Contrafund Fidelity Revere Street Trust
Fidelity Corporate Trust Fidelity School Street Trust
Fidelity Court Street Trust Fidelity Securities Fund
Fidelity Court Street Trust II Fidelity Select Portfolios
Fidelity Covington Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Daily Money Fund Fidelity Summer Street Trust
Fidelity Daily Tax-Exempt Fund Fidelity Trend Fund
Fidelity Destiny Portfolios Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity U.S. Investments-Government Securities
Portfolio, L.P. Fund, L.P.
Fidelity Devonshire Trust Fidelity Union Street Trust
Fidelity Exchange Fund Fidelity Union Street Trust II
Fidelity Financial Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Variable Insurance Products Fund II
</TABLE>
plus any other investment company for which Fidelity Management &
Research Company or an affiliate acts as investment adviser and for
which the undersigned individual serves as Director, Trustee, or
General Partner (collectively, the "Funds"), hereby constitute and
appoint Arthur J. Brown, Arthur C. Delibert, Stephanie A. Djinis,
Robert C. Hacker, Thomas M. Leahey, Richard M. Phillips, and Dana L.
Platt, each of them singly, my true and lawful attorneys-in-fact, with
full power of substitution, and with full power to each of them, to
sign for me and in my name in the appropriate capacities, all
Registration Statements of the Funds on Form N-1A, Form N-8A or any
successor thereto, any and all subsequent Amendments, Pre-Effective
Amendments, or Post-Effective Amendments to said Registration
Statements on Form N-1A or any successor thereto, any Registration
Statements on Form N-14, and any supplements or other instruments in
connection therewith, and generally to do all such things in my name
and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the
Securities Act of 1933 and the Investment Company Act of 1940, and all
related requirements of the Securities and Exchange Commission. I
hereby ratify and confirm all that said attorneys-in-fact or their
substitutes may do or cause to be done by virtue hereof. This power
of attorney is effective for all documents filed on or after March 1,
1997.
WITNESS my hand on the date set forth below.
/s/Robert M. Gates March 6, 1997
Robert M. Gates
POWER OF ATTORNEY
I, the undersigned President and Director, Trustee, or General
Partner, as the case may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Aberdeen Street Trust Fidelity Hereford Street Trust
Fidelity Advisor Series I Fidelity Income Fund
Fidelity Advisor Series II Fidelity Institutional Cash Portfolios
Fidelity Advisor Series III Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Advisor Series IV Fidelity Investment Trust
Fidelity Advisor Series V Fidelity Magellan Fund
Fidelity Advisor Series VI Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series VII Fidelity Money Market Trust
Fidelity Advisor Series VIII Fidelity Mt. Vernon Street Trust
Fidelity Beacon Street Trust Fidelity Municipal Trust
Fidelity Boston Street Trust Fidelity Municipal Trust II
Fidelity California Municipal Trust Fidelity New York Municipal Trust
Fidelity California Municipal Trust II Fidelity New York Municipal Trust II
Fidelity Capital Trust Fidelity Phillips Street Trust
Fidelity Charles Street Trust Fidelity Puritan Trust
Fidelity Commonwealth Trust Fidelity Revere Street Trust
Fidelity Concord Street Trust Fidelity School Street Trust
Fidelity Congress Street Fund Fidelity Securities Fund
Fidelity Contrafund Fidelity Select Portfolios
Fidelity Corporate Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Court Street Trust Fidelity Summer Street Trust
Fidelity Court Street Trust II Fidelity Trend Fund
Fidelity Covington Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Daily Money Fund Fidelity U.S. Investments-Government Securities
Fidelity Destiny Portfolios Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity Union Street Trust
Portfolio, L.P. Fidelity Union Street Trust II
Fidelity Devonshire Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Exchange Fund Newbury Street Trust
Fidelity Financial Trust Variable Insurance Products Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund II
Fidelity Government Securities Fund Variable Insurance Products Fund III
Fidelity Hastings Street Trust
</TABLE>
in addition to any other investment company for which Fidelity
Management & Research Company or an affiliate acts as investment
adviser and for which the undersigned individual serves as President
and Director, Trustee, or General Partner (collectively, the "Funds"),
hereby constitute and appoint Robert C. Pozen my true and lawful
attorney-in-fact, with full power of substitution, and with full power
to him to sign for me and in my name in the appropriate capacity, all
Registration Statements of the Funds on Form N-1A, Form N-8A, or any
successor thereto, any and all subsequent Amendments, Pre-Effective
Amendments, or Post-Effective Amendments to said Registration
Statements on Form N-1A, Form N-8A, or any successor thereto, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such
things in my name and on my behalf in connection therewith as said
attorney-in-fact deems necessary or appropriate, to comply with the
provisions of the Securities Act of 1933 and the Investment Company
Act of 1940, and all related requirements of the Securities and
Exchange Commission. I hereby ratify and confirm all that said
attorney-in-fact or his substitutes may do or cause to be done by
virtue hereof. This power of attorney is effective for all documents
filed on or after August 1, 1997.
WITNESS my hand on the date set forth below.
/s/Edward C. Johnson 3d_ July 17, 1997
Edward C. Johnson 3d
