(2_FIDELITY_LOGOS)FIDELITY ADVISOR
(registered trademark)
EQUITY PORTFOLIO GROWTH - CLASS A
ANNUAL REPORT
NOVEMBER 30, 1994
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 value.
FINANCIAL STATEMENTS 25 Statements of assets and liabilities,
operations, and changes in net
assets, as well as financial
highlights.
NOTES 30 Notes to the financial statements.
REPORT OF INDEPENDENT 35 The auditors' opinion.
ACCOUNTANTS
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, THE
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT
RISK,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. 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
DEAR SHAREHOLDER:
The unsettling period that began for investors when the Federal Reserve
Board raised short-term interest rates in February has continued into the
fourth quarter of 1994. The Board raised the federal funds rate - the rate
banks charge each other for overnight loans - five times from February
through August, taking it from 3.00% to 4.75%. A sixth increase in November
lifted the rate to 5.50%. The Fed rate hikes were intended to forestall
inflation that could result from an improving U.S. economy, and they led to
below-average returns for many stocks and negative returns for many bond
investments.
The volatility we have witnessed this year follows a period in which there
was a nearly perfect investing environment. Although there was a
late-summer rally in stocks and, to a lesser extent in bond markets, it is
impossible to predict where interest rates might go or what might happen in
the markets in the months ahead. That's why it probably is a good time to
again review your investment portfolio and how well it matches your goals.
If you can leave your money invested over the long term, you can avoid much
of the volatility that generally accompanies the stock market in the short
term, as we have been witnessing this year. You also can help to manage
risk through diversification of investments. A stock fund is already
diversified because it invests in many issues. You can diversify even
further by placing some of your money in several different stock funds or
in other investment categories, such as bonds.
If you have a short investment time horizon, you might want to consider
moving some of your investment into a money market fund, which seeks income
and a stable share price by investing in high-quality, short-term
investments. As with any mutual fund, of course, there is no assurance that
a money market fund will achieve its goal, and it is important to remember
that money market funds are not insured by any agency of the U.S.
government.
Finally, no matter what your investment horizon or portfolio diversity, it
makes good sense to follow a regular investment plan - investing a certain
amount of money at the same time each month or quarter - and to review your
portfolio periodically, as we have discussed here. A periodic investment
plan will not, of course, assure a profit or protect against a loss.
Remember to contact your investment professional if you need help with your
investments.
Best regards,
Edward C. Johnson 3d
EQUITY PORTFOLIO GROWTH - CLASS A
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's 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. A fund's total
return includes changes in a fund's share price, plus reinvestment of any
dividends (or income) and capital gains (the profits the fund earns when it
sells stocks that have grown in value). On September 10, 1992 the fund
began offering Class A shares. All performance information for Class A
prior to September 10, 1992 reflects the performance of the Institutional
Class and therefore does not reflect Class A's 12b-1 fee and different
transfer agent fee arrangements (see Notes to Financial Statements), which
if included, would have lowered Class A's performance.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1994 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Advisor Equity Portfolio Growth - Class A 1.58% 125.75% 504.83%
Advisor Equity Portfolio Growth -
Class A (incl. max. 4.75% sales charge) -3.24% 115.02% 476.10%
S&P 500(registered trademark) 1.05% 53.14% 287.95%
Average Growth Fund -0.36% 52.60% 242.52%
CUMULATIVE TOTAL RETURNS show Class A's performance in percentage terms
over a set period - in this case, one, five, or ten years. For example, if
you invested $1,000 in a fund that had a 5% return over the past year, you
would end up with $1,050. You can compare Class A's returns to those of the
Standard & Poor's Composite Index of 500 stocks - a common proxy for the
U.S. stock market. To measure how Class A's performance stacked up against
its peers, you can compare it to the average growth fund, which currently
reflects the performance of 468 growth funds tracked by Lipper Analytical
Services. These benchmarks include reinvested dividends and capital gains,
if any, and exclude the effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1994 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Advisor Equity Portfolio Growth - Class A 1.58% 17.69% 19.72%
Advisor Equity Portfolio Growth - Class A
(incl. max. 4.75% sales charge) -3.24% 16.55% 19.14%
S&P 500(registered trademark) 1.05% 8.90% 14.52%
Average Growth Fund -0.36% 8.53% 12.63%
AVERAGE ANNUAL TOTAL RETURNS take Class A shares' actual (or cumulative)
return and show you what would have happened if Class A shares had
performed at a constant rate each year.
$10,000 OVER 10 YEARS
FA Equity Port.:GStandard & Poor
11/30/84 9525.00 10000.00
12/31/84 9738.51 10264.00
01/31/85 11221.23 11063.57
02/28/85 11612.67 11199.65
03/31/85 11280.54 11207.49
04/30/85 11173.79 11197.40
05/31/85 11802.46 11844.61
06/30/85 11944.80 12030.57
07/31/85 12383.69 12012.52
08/31/85 12478.58 11910.42
09/30/85 11755.01 11537.62
10/31/85 12217.62 12070.66
11/30/85 13154.70 12898.71
12/31/85 13783.38 13523.01
01/31/86 14249.27 13598.73
02/28/86 15447.92 14615.92
03/31/86 16291.87 15431.49
04/30/86 16805.57 15257.11
05/31/86 17527.21 16068.79
06/30/86 17661.75 16340.35
07/31/86 16181.78 15426.93
08/31/86 16732.19 16571.60
09/30/86 15203.29 15201.13
10/31/86 16316.33 16078.24
11/30/86 16120.63 16468.94
12/31/86 15783.43 16048.98
01/31/87 17676.91 18210.78
02/28/87 19274.01 18930.11
03/31/87 19098.91 19477.19
04/30/87 18398.53 19303.84
05/31/87 18277.31 19471.78
06/30/87 18627.50 20455.11
07/31/87 19476.04 21492.18
08/31/87 20647.84 22293.84
09/30/87 20297.65 21805.60
10/31/87 14950.49 17108.68
11/30/87 13361.16 15698.92
12/31/87 15694.15 16893.61
01/31/88 15650.88 17604.83
02/29/88 16588.49 18425.22
03/31/88 16833.71 17855.88
04/30/88 16646.18 18054.08
05/31/88 16530.79 18211.15
06/30/88 18002.11 19047.04
07/31/88 17641.49 18974.66
08/31/88 16862.56 18329.52
09/30/88 17800.17 19110.36
10/31/88 17612.64 19641.63
11/30/88 17338.57 19360.75
12/31/88 18137.81 19699.57
01/31/89 19567.03 21141.57
02/28/89 19581.77 20615.15
03/31/89 20230.07 21095.48
04/30/89 21570.88 22190.34
05/31/89 23427.39 23089.05
06/30/89 22558.08 22957.44
07/31/89 24105.17 25030.49
08/31/89 25048.16 25521.09
09/30/89 25740.66 25416.46
10/31/89 25416.51 24826.79
11/30/89 25519.65 25333.26
12/31/89 26271.06 25941.26
01/31/90 23859.79 24200.60
02/28/90 24820.92 24512.79
03/31/90 26271.06 25162.38
04/30/90 25748.34 24533.32
05/31/90 29407.40 26925.32
06/30/90 29660.33 26742.22
07/31/90 28817.23 26656.65
08/31/90 25141.30 24246.89
09/30/90 23067.27 23066.06
10/31/90 23353.93 22966.88
11/30/90 26220.47 24450.54
12/31/90 28092.16 25132.71
01/31/91 32172.77 26228.50
02/28/91 35073.04 28103.83
03/31/91 38512.90 28783.95
04/30/91 38378.00 28853.03
05/31/91 40384.59 30099.48
06/30/91 37029.04 28720.92
07/31/91 40030.48 30059.32
08/31/91 42188.82 30771.72
09/30/91 42290.00 30257.84
10/31/91 42408.03 30663.29
11/30/91 40941.03 29427.56
12/31/91 46269.94 32794.07
01/31/92 47565.56 32184.10
02/29/92 47810.06 32602.50
03/31/92 45553.10 31966.75
04/30/92 44612.69 32906.57
05/31/92 44405.81 33067.81
06/30/92 42938.78 32575.10
07/31/92 44443.42 33907.42
08/31/92 43371.36 33212.32
09/30/92 44180.11 33604.23
10/31/92 46493.50 33721.84
11/30/92 49521.60 34871.76
12/31/92 50847.10 35300.68
01/31/93 52270.79 35597.21
02/28/93 50905.87 36081.33
03/31/93 52501.48 36842.64
04/30/93 51617.16 35951.05
05/31/93 54596.93 36914.54
06/30/93 54808.39 37021.59
07/31/93 53866.40 36873.51
08/31/93 55827.28 38271.01
09/30/93 57461.34 37976.33
10/31/93 58153.42 38762.44
11/30/93 56711.60 38394.19
12/31/93 58399.96 38858.76
01/31/94 60438.04 40179.96
02/28/94 59933.04 39091.08
03/31/94 57488.86 37386.71
04/30/94 58094.85 37865.26
05/31/94 57731.26 38486.25
06/30/94 55206.27 37543.34
07/31/94 56377.87 38774.76
08/31/94 58923.05 40364.53
09/30/94 57711.06 39375.59
10/31/94 59589.65 40261.55
11/30/94 57610.06 38795.22
$10,000 OVER 10 YEARS: Let's say you invested $10,000 in Advisor Equity
Portfolio Growth - Class A on November 30, 1984, and paid the maximum 4.75%
sales charge. As the chart shows, by November 30, 1994, the value of your
investment would have grown to $57,610 - a 476.10% increase on your initial
investment. For comparison, look at how the S&P 500 did over the same
period. With dividends reinvested, the same $10,000 investment would have
grown to $38,795 - a 287.95% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
growth in the long run and
volatility in the short run. In
turn, the share price and
return of a fund that invests in
stocks 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)
The fund commenced operations on November 22, 1983 by offering
Institutional Class shares, which are sold to eligible institutional
investors without a sales charge or a 12b-1 fee.
CUMULATIVE TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
PERIODS ENDED NOVEMBER 30, 1994 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Advisor Equity Portfolio Growth - Institutional Class 2.46% 129.70% 515.42%
</TABLE>
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
PERIODS ENDED NOVEMBER 30, 1994 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Advisor Equity Portfolio Growth - Institutional Class 2.46% 18.10% 19.93%
</TABLE>
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
Rising interest rates contributed
to below average returns in the
U.S. stock market during the 12
months ended November 30,
1994. The Standard & Poor's 500
stock index finished the 12-month
period with a total return of 1.05%
- - below its historical annual
average return of more than 10%.
After two months of steady gains,
stocks stumbled from February
through June 1994. During that
time, the Federal Reserve Board
raised short-term interest rates
four times in an effort to curb
possible future inflation triggered
by a strengthening economy.
Higher rates hurt stocks because
they raise the cost of borrowing
for companies and consumers,
often dampening future corporate
profits. In addition, higher rates
often make bonds and other
fixed-income investments more
attractive relative to stocks.
Despite a fifth Fed rate hike in
August, the market rallied from
July through October, fueled by
strengthening corporate earnings
and a flurry of merger and
acquisition activity. Interest rate
concerns resurfaced in
November, when the Fed raised
rates again. Although returns in
overseas markets were mixed,
foreign stocks generally fared
better than those in the U.S. The
Morgan Stanley EAFE (Europe,
Australia, Far East) index
returned 14.84% for the 12
months ended November 30,
while the Morgan Stanley
Emerging Markets Free index
was up 17.44% during the same
period.
An interview with Robert Stansky, Portfolio Manager of Fidelity Advisor
Equity Portfolio Growth
Q. BOB, HOW HAS THE FUND PERFORMED?
A. Not as well as I would have liked. With a volatile stock market and
rising interest rates as a backdrop, Class A's return was up 1.58% for the
year ended November 30, 1994. That's only slightly better than the average
growth fund, which was down 0.36% for the same time period, according to
Lipper Analytical Services.
Q. HOW DID RISING INTEREST RATES INFLUENCE PERFORMANCE?
A. We've seen that many growth stocks don't do well in a rising interest
rate environment. The fear in the market over the past six months was that
with rates climbing, the investing environment wouldn't be very favorable
for stocks in general. Many growth stocks don't perform well in an
increasing interest rate environment because investors often take advantage
of higher returns and invest in bonds. Though rising interest rates haven't
affected the balance sheets of most of the companies whose stocks I own, it
has influenced the public's perception of the overall market. But what I'd
really like to stress is that while interest rates and the economy matter,
a company's success in its own product cycle and execution is what really
drives stock prices.
Q. WHAT DO YOU MEAN BY "PRODUCT CYCLE" AND "EXECUTION?"
A. A company that's doing well in its product cycle is offering the right
products at the right time, products that customers want to buy. Execution
refers to distribution services provided by companies that don't
manufacture the products that they're selling, like a retailer, and offer
the right inventory to the public through an ever-increasing number of
stores.
Q. CAN YOU GIVE EXAMPLES OF COMPANIES WITH GOOD PRODUCT CYCLE AND EXECUTION
IN WHICH YOU'VE INVESTED?
A. Motorola is a good example. Motorola has grown much faster than the
overall communications market because it has products that the customer
wants and has kept up with demand. By contrast, IBM has suffered from
product cycle problems in the past, although the situation has improved
considerably. Lowe's, a leader in the home improvement market, opened
stores at a rapid pace this year, and is an example of a company with great
execution.
Q. TECHNOLOGY AS A SECTOR OF THE FUND HAS GROWN FROM 26.5% TO 31.4%. WHY?
A. I took more positions in smaller-to-medium sized technology companies in
order to increase exposure to technology, yet reduce risk in one large
individual holding. Compaq is an example. The company has a lot to do in
the next few months as it brings new products to market. It has to move
from selling mostly 486s to a mix of Pentiums and 486s. Still, as a 2%
holding, Compaq remains a large position in the fund. However, I want to be
sure that I don't have too much exposure during the transitional time.
Q. DOES THAT EXPLAIN WHY YOU'VE
CUT BACK YOUR HOLDINGS IN THE FINANCIAL SECTOR?
A. Yes. Rising rates affect financial companies first. The cost to borrow
funds increases as soon as rates go up - there's no lag time in financial
stocks like there is in some other sectors.
Q. WHAT DISAPPOINTMENTS DID YOU HAVE THIS YEAR?
A. This year, disappointments came in two categories, the investments I
shouldn't have made that went down, and the investments I should have made
more of that went up. Overall, General Electric has been a disappointing
investment over the past six months. Operationally it did a great job, but
the losses at a brokerage firm that GE owned held back profits and put
investors off. Though it's still a large holding that is both increasing
its dividend and buying back stock, it hasn't done as well as I had hoped.
Microsoft falls into the latter category. It had great earnings this year
and was placed in the S&P 500. There's no doubt that the fund should have
owned more Microsoft.
Q. WHAT'S YOUR OUTLOOK FOR THE NEXT SIX MONTHS?
A. Well, I believe that stock prices follow earnings, period. I ask myself,
"Did the company earn what was expected?" Companies are in much better
shape cost-wise and product cycle-wise and demand is pretty good. However,
as overall market growth slows in 1995, stocks that post superior earnings
should perform well. In general, I'm hopeful.
FUND FACTS
GOAL: to increase the value of
the fund's shares over the
long term by investing in
stocks that have
above-average growth
potential
START DATE: November 22, 1983
SIZE: as of November 30, 1994,
more than $1.2 billion
MANAGER: Robert Stansky, since
1987; joined Fidelity in 1983
(checkmark)
BOB STANSKY ON
PRICE/EARNINGS RATIO
"In a rising interest rate
environment, I think it's likely
that stocks with high
price/earnings (p/e) ratios
could contract or stay flat -
the stock price falling while
the earnings remain steady.
Most aggressive stocks -
those stocks that are growing
very quickly - often sell at 30
to 40 times earnings. If you
look at those stocks
arithmetically, they are the
most attractive, but in a rising
rate market, valuations are
likely to come down. I cut
back on some of the really
high p/e stocks early in the
cycle and most of the stocks
I'm holding now don't have
huge price/earnings ratios."
(solid bullet) The fund's cash position
has fallen from 18% to
6.7%, in the past six months.
(solid bullet) The fund's holdings in
healthcare stocks has
increased from 7.1% to
10.1% during the period.
(solid bullet) Though the fund is
authorized to invest in
derivative instruments such
as futures, options and
structured notes, it did not
have any significant holdings
of those investments during
the period.
INVESTMENT CHANGES
TOP TEN STOCKS AS OF NOVEMBER 30, 1994
NOVEMBER
% OF FUND'S
% OF FUND'S INVESTMENTS
INVESTMENTS IN THESE STOCKS
6 MONTHS AGO
General Electric Co. 2.4 2.4
Lowe's Companies, Inc. 2.0 1.1
Oracle Systems Corp. 1.9 0.9
Johnson & Johnson 1.9 0.9
Compaq Computer Corp. 1.8 4.9
Sears, Roebuck & Co. 1.8 1.1
Warner-Lambert Co. 1.7 1.1
Pfizer, Inc. 1.6 1.1
International Business Machines 1.6 1.4
Corp.
Philip Morris Companies, Inc. 1.5 0.6
TOP FIVE INDUSTRIES AS OF NOVEMBER 30, 1994
NOVEMBER
% OF FUND'S
% OF FUND'S INVESTMENTS
INVESTMENTS IN THESE INDUSTRIES
6 MONTHS AGO
Technology 31.4 26.5
Retail & Wholesale 14.4 10.6
Health 10.1 7.1
Finance 7.3 8.2
Utilities 5.6 4.9
ASSET ALLOCATION
NOVEMBER
AS OF NOVEMBER 30, 1994 AS OF MAY 31, 1994
Row: 1, Col: 1, Value: 6.7
Row: 1, Col: 2, Value: 1.0
Row: 1, Col: 3, Value: 43.2
Row: 1, Col: 4, Value: 50.0
Row: 1, Col: 1, Value: 18.0
Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 42.0
Row: 1, Col: 4, Value: 40.0
Stocks 93.2%
Bonds 0.1%
Short-term
Investments 6.7%
Stocks 82.0%
Bonds -
Short-term
Investments 18.0%
INVESTMENTS NOVEMBER 30, 1994
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 93.2%
NOVEMBER
SHARES VALUE (NOTE 1)
(000S)
BASIC INDUSTRIES - 4.8%
CHEMICALS & PLASTICS - 1.2%
Airgas, Inc. (a) 107,800 $ 2,695
Dow Chemical Co. 94,600 6,054
Praxair, Inc. 51,500 1,043
Sterling Chemical, Inc. (a) 12,400 133
Union Carbide Corp. 184,800 5,290
15,215
IRON & STEEL - 0.3%
Hylsamex SA de CV sponsored ADR (a)(b) 17,200 411
Nucor Corp. 72,100 3,929
Schnitzer Steel, Inc. Class A 1,300 25
4,365
METALS & MINING - 1.1%
Aluminum Co. of America 159,000 12,978
ASARCO, Inc. 49,700 1,361
14,339
PACKAGING & CONTAINERS - 0.1%
U.S. Can Corp. (a) 37,300 671
PAPER & FOREST PRODUCTS - 2.1%
Champion International Corp. 121,700 4,229
Federal Paper Board Co., Inc. 7,400 201
Georgia-Pacific Corp. 87,300 6,242
International Paper Co. 67,000 4,790
Jefferson Smurfit Corp. (a) 5,100 82
Klabin Industria de Papel e Celulose PN 185,500 323
Louisiana-Pacific Corp. 83,000 2,324
Scott Paper Co. 58,300 3,804
Stone Container Corp. (a) 42,700 683
Temple-Inland, Inc. 43,000 1,930
Union Camp Corp. 38,000 1,755
26,363
TOTAL BASIC INDUSTRIES 60,953
CONGLOMERATES - 0.0%
Tyco Laboratories, Inc. 10,000 460
COMMON STOCKS - CONTINUED
NOVEMBER
SHARES VALUE (NOTE 1)
(000S)
CONSTRUCTION & REAL ESTATE - 0.5%
BUILDING MATERIALS - 0.4%
Armstrong World Industries, Inc. 21,900 $ 876
Cemex SA, Series B 137,500 1,319
Golden Pharos BHD (a) 199,000 619
Hume Industries Malay BHD 320,000 1,390
USG Corp. (a) 50,000 981
5,185
CONSTRUCTION - 0.1%
Empresas Ica Sociedad Controladora SA de CV sponsored
ADR representing Ord. Participation Certificate 9,700 300
Schuler Homes, Inc. (a) 38,500 563
863
REAL ESTATE INVESTMENT TRUSTS - 0.0%
Innkeepers USA Trust (a) 28,400 209
Property Trust of America (SBI) 1 --
209
TOTAL CONSTRUCTION & REAL ESTATE 6,257
DURABLES - 4.7%
AUTOS, TIRES, & ACCESSORIES - 3.1%
Autozone, Inc. (a) 221,500 5,676
Chrysler Corp. 219,400 10,613
Dana Corp. 44,100 954
Edelbrock Corp. (a) 2,900 41
Ford Motor Co. 587,600 15,939
Gentex Corp. (a) 22,300 482
Pep Boys-Manny, Moe & Jack 150,500 4,872
38,577
CONSUMER ELECTRONICS - 0.3%
Whirlpool Corp. 85,600 4,269
HOME FURNISHINGS - 0.2%
Ethan Allen Interiors, Inc. (a) 40,700 921
Strouds, Inc. (a) 104,800 1,677
Welcome Home (a) 44,000 236
2,834
COMMON STOCKS - CONTINUED
NOVEMBER
SHARES VALUE (NOTE 1)
(000S)
DURABLES - CONTINUED
TEXTILES & APPAREL - 1.1%
Cygne Designs, Inc. (a) 121,200 $ 1,727
Kellwood Co. 34,300 703
Mohawk Industries Inc. (a) 81,000 1,377
Nautica Enterprises, Inc. (a) 13,800 393
NIKE, Inc. Class B 49,000 3,130
Nine West Group, Inc. (a) 6,900 171
Reebok International Ltd. 70,200 2,694
St. John Knits 12,300 374
Tommy Hilfiger (a) 89,000 3,816
14,385
TOTAL DURABLES 60,065
ENERGY - 2.3%
ENERGY SERVICES - 0.5%
Halliburton Co. 14,600 509
Schlumberger Ltd. 101,200 5,376
5,885
OIL & GAS - 1.8%
Amoco Corp. 90,400 5,492
Anadarko Petroleum Corp. 11,400 456
Anderson Exploration Ltd. (a) 85,400 838
British Petroleum PLC ADR 93,684 7,436
Canadian Natural Resources Ltd. (a) 59,900 697
Petroleum Geo-Services AS ADR (a) 61,600 1,371
Rio Alto Exploration Ltd. (a) 144,400 656
Unocal Corp. 198,132 5,275
22,221
TOTAL ENERGY 28,106
FINANCE - 7.3%
BANKS - 2.4%
Bank of Boston Corp. 57,082 1,527
Bank of New York Co., Inc. 252,400 7,036
BankAmerica Corp. 54,600 2,238
COMMON STOCKS - CONTINUED
NOVEMBER
SHARES VALUE (NOTE 1)
(000S)
FINANCE - CONTINUED
BANKS - CONTINUED
Chemical Banking Corp. 167,000 $ 6,075
Citicorp 149,193 6,210
Crestar Financial Corp. 48 2
First Chicago Corp. 44,900 2,088
HSBC Holdings PLC 3,297 36
NationsBank Corp. 105,932 4,754
Republic New York Corp. 900 38
Shawmut National Corp. 22,328 396
Signet Banking Corp. 558 17
30,417
CREDIT & OTHER FINANCE - 1.6%
American Express Co. 307,604 9,113
Beneficial Corp. 43,800 1,599
Dean Witter Discover & Co. 133,654 4,678
Green Tree Acceptance, Inc. 88,300 2,439
Grupo Financiero Inbursa Class B (a) 73,500 288
Household International, Inc. 37,209 1,433
19,550
FEDERAL SPONSORED CREDIT - 2.5%
Federal Home Loan Mortgage Corporation 264,000 13,167
Federal National Mortgage Association 250,300 17,802
30,969
INSURANCE - 0.3%
Allstate Corp. 89,500 2,114
Travelers, Inc. (The) 71,200 2,341
4,455
SECURITIES INDUSTRY - 0.5%
Merrill Lynch & Co., Inc. 137,600 5,229
Schwab (Charles) Corp. 24,000 765
5,994
TOTAL FINANCE 91,385
COMMON STOCKS - CONTINUED
NOVEMBER
SHARES VALUE (NOTE 1)
(000S)
HEALTH - 10.1%
DRUGS & PHARMACEUTICALS - 6.6%
ALZA Corp. Class A (a) 130,900 $ 2,520
Amgen, Inc. (a) 183,900 10,735
Biogen, Inc. (a) 13,400 519
Bristol-Myers Squibb Co. 107,700 6,220
COR Therapeutics, Inc. (a) 30,500 408
Dura Pharmaceuticals, Inc. (a) 69,400 902
Elan Corp. PLC:
therapeutic systems unit (Common & 1 ADR warrant) (a) 7,093 183
ADR (a) 215,550 7,598
Pfizer, Inc. 263,000 20,350
Rhone Poulenc Rorer, Inc. 45,200 1,763
Schering-Plough Corp. 136,800 10,243
Warner-Lambert Co. 268,000 20,736
82,177
MEDICAL EQUIPMENT & SUPPLIES - 2.8%
Beckman Instruments, Inc. 4,800 137
Becton, Dickinson & Co. 90,200 4,262
Boston Scientific Corp. (a) 60,800 973
Cardinal Health, Inc. 36,700 1,670
Johnson & Johnson 443,800 23,688
Medisense, Inc. (a) 9,200 226
Medtronic, Inc. 52,400 2,777
Pall Corp. 6,200 110
St. Jude Medical, Inc. 47,800 1,906
35,749
MEDICAL FACILITIES MANAGEMENT - 0.7%
Columbia/HCA Healthcare Corp. 81,670 3,093
Humana, Inc. (a) 20,700 463
Lincare Holdings, Inc. (a) 16,700 455
U.S. Healthcare, Inc. 105,000 4,699
8,710
TOTAL HEALTH 126,636
HOLDING COMPANIES - 0.2%
Grupo Carso SA de CV Class A-1 (a) 218,600 2,459
Grupo Sidek SA de CV Class B Ord. (a) 65,900 281
2,740
COMMON STOCKS - CONTINUED
NOVEMBER
SHARES VALUE (NOTE 1)
(000S)
INDUSTRIAL MACHINERY & EQUIPMENT - 4.0%
ELECTRICAL EQUIPMENT - 2.7%
American Power Conversion Corp. (a) 44,100 $ 711
General Electric Co. 648,500 29,831
Ortel Corp. (a) 2,100 55
Scientific-Atlanta, Inc. 65,000 1,284
Sensormatic Electronics Corp. 41,800 1,348
Star Paging International Holdings Ltd. (warrants) (a) 448,000 20
33,249
INDUSTRIAL MACHINERY & EQUIPMENT - 0.9%
Case Corp. 84,700 1,662
Caterpillar, Inc. 115,700 6,248
PRI Automation, Inc. (a) 42,100 705
Perspective Technologies Corp. unit (1 common & 1 warrant) (a) 80,000 720
Ultratech Stepper, Inc. (a) 39,600 1,544
Veeco Instruments, Inc. (a) 20,700 228
11,107
POLLUTION CONTROL - 0.4%
Browning-Ferris Industries, Inc. 40,900 1,104
WMX Technologies, Inc. 158,900 4,092
5,196
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 49,552
MEDIA & LEISURE - 2.7%
BROADCASTING - 1.4%
Clear Channel Communications, Inc. (a) 41,000 1,876
Comcast Corp. Class A (Special) 69,400 1,102
Infinity Broadcasting Corp. (a) 112,600 3,378
Tele-Communications, Inc. Class A (a) 180,000 4,253
Time Warner, Inc. 25 1
Viacom, Inc. (a) 13,832 551
Viacom, Inc. (rights) (a) 172,900 259
Viacom, Inc. (non-vtg.) (a) 149,102 5,740
17,160
ENTERTAINMENT - 0.5%
Carnival Cruise Lines, Inc. Class A 36,900 1,596
Disney (Walt) Co. 98,300 4,288
5,884
COMMON STOCKS - CONTINUED
NOVEMBER
SHARES VALUE (NOTE 1)
(000S)
MEDIA & LEISURE - CONTINUED
LEISURE DURABLES & TOYS - 0.2%
Cobra Golf, Inc. (a) 69,000 $ 2,484
LODGING & GAMING - 0.1%
International Game Technology Corp. 46,500 773
Mirage Resorts, Inc. (a) 41,900 827
1,600
PUBLISHING - 0.1%
McGraw-Hill, Inc. 13,100 889
Meredith Corp. 1,200 58
Scripps (E.W.) Co. Class A 7,500 226
1,173
RESTAURANTS - 0.4%
Apple South, Inc. 92,650 1,181
Applebee's International, Inc. 48,000 720
Brinker International, Inc. (a) 45,000 765
Morrison Restaurants, Inc. 63,800 1,691
Outback Steakhouse, Inc. (a) 15,400 398
Sbarro, Inc. 11,650 261
5,016
TOTAL MEDIA & LEISURE 33,317
NONDURABLES - 2.9%
BEVERAGES - 0.3%
Dr. Pepper/Seven-Up Companies, Inc. (a) 5,300 131
PepsiCo, Inc. 86,500 3,060
3,191
FOODS - 0.0%
Gruma SA Class B (a) 44,100 292
HOUSEHOLD PRODUCTS - 0.9%
Colgate-Palmolive Co. 22,400 1,344
Gillette Co. 28,200 2,073
Procter & Gamble Co. 123,400 7,712
11,129
TOBACCO - 1.7%
American Brands, Inc. 34,300 1,213
Philip Morris Companies, Inc. 322,000 19,240
RJR Nabisco Holdings Corp. (a) 176,400 1,103
21,556
TOTAL NONDURABLES 36,168
COMMON STOCKS - CONTINUED
NOVEMBER
SHARES VALUE (NOTE 1)
(000S)
RETAIL & WHOLESALE - 14.4%
APPAREL STORES - 1.8%
AnnTaylor Stores Corp. (a) 35,200 $ 1,320
Baby Superstore, Inc. (a) 1,400 56
Baker (J.), Inc. 50,000 819
Charming Shoppes, Inc. 153,300 1,035
Ellett Brothers, Inc. 60,000 907
Filene's Basement Corp. (a) 68,500 420
Gap, Inc. 188,700 6,652
Limited, Inc. (The) 202,400 3,921
Sportmart, Inc. Class A (non-vtg) (a) 27,100 315
TJX Companies, Inc. 156,200 2,363
Talbots, Inc. 133,000 4,273
22,081
APPLIANCE STORES - 0.0%
Elektra (Grupo) SA US CPO (a) 26,400 288
DRUG STORES - 0.2%
General Nutrition Companies, Inc. (a) 67,500 1,974
Revco (D.S.), Inc. (a) 29,600 666
2,640
GENERAL MERCHANDISE STORES - 4.4%
Dayton Hudson Corp. 162,800 13,289
Nordstrom, Inc. 22,400 1,081
Penney (J.C.) Co., Inc. 183,200 8,427
Price/Costco, Inc. (a) 244,000 3,751
Sears, Roebuck & Co. 471,900 22,297
Wal-Mart Stores, Inc. 261,100 6,038
54,883
GROCERY STORES - 0.6%
Fleming Companies, Inc. 10,511 242
Safeway, Inc. (a) 81,400 2,483
Starbucks Corp. (a) 139,100 3,729
Stop & Shop Companies, Inc. (a) 41,400 978
7,432
RETAIL & WHOLESALE, MISCELLANEOUS - 7.4%
Barnes & Noble, Inc. (a) 65,500 1,793
Bed Bath & Beyond, Inc. (a) 92,500 2,683
Best Buy Co., Inc. (a) 107,800 4,757
Campo Electronics Appliances and Computers, Inc. (a) 50,000 638
COMMON STOCKS - CONTINUED
NOVEMBER
SHARES VALUE (NOTE 1)
(000S)
RETAIL & WHOLESALE - CONTINUED
RETAIL & WHOLESALE, MISCELLANEOUS - CONTINUED
Circuit City Stores, Inc. 49,400 $ 1,216
Corporate Express (a) 46,800 995
Gateway 2000, Inc. (a) 60,500 1,323
Home Depot, Inc. (The) 380,500 17,598
Lillian Vernon Corp. 6,000 99
Lowe's Companies, Inc. 687,400 25,692
Micro Warehouse, Inc. (a) 92,200 3,002
Officemax, Inc. (a) 178,300 4,391
Office Depot, Inc. (a) 390,400 9,272
Spiegel, Inc. Class A 30,900 413
Sports Authority, Inc. (a) 2,700 61
Staples, Inc. (a) 388,350 8,447
Sunglass Hut International, Inc. (a) 80,800 1,747
Toys "R" Us, Inc. (a) 117,000 4,285
Viking Office Products, Inc. (a) 6,200 178
Waban, Inc. (a) 135,400 2,302
Williams-Sonoma, Inc. (a) 65,400 1,982
92,874
TOTAL RETAIL & WHOLESALE 180,198
SERVICES - 0.7%
LEASING & RENTAL - 0.2%
Hollywood Entertainment Corp. (a) 55,200 1,835
Movie Gallery, Inc. (a) 7,100 186
2,021
PRINTING - 0.2%
Alco Standard Corp. 56,300 3,153
SERVICES - 0.3%
Careerstaff Unlimited, Inc. (a) 3,000 37
Norrell Corp. GA 8,300 164
Western Atlas, Inc. (a) 84,600 3,691
3,892
TOTAL SERVICES 9,066
COMMON STOCKS - CONTINUED
NOVEMBER
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - 31.4%
COMMUNICATIONS EQUIPMENT - 6.0%
Cabletron Systems, Inc. (a) 294,150 $ 13,972
Centigram Communications Corp. (a) 72,100 1,442
Cisco Systems, Inc. (a) 280,400 9,043
DSC Communications Corp. (a) 492,900 15,403
Ericsson (L.M.) Telefon AB Class B ADR 14,200 788
General Instrument Corp. (a) 41,600 1,248
Global Village Communication (a) 81,000 658
ITI Technologies 2,000 34
Inter-Tel, Inc. (a) 2,500 18
InterVoice, Inc. (a) 62,800 809
Newbridge Networks Corp. (a) 292,500 9,835
Nokia Corp. sponsored ADR (a) 180,500 12,612
Pairgain Technologies, Inc. (a) 87,600 1,248
PictureTel Corp. (a) 23,500 526
Shiva Corp. (a) 1,200 37
3Com Corp. (a) 178,100 7,747
75,420
COMPUTER SERVICES & SOFTWARE - 6.5%
Adobe Systems, Inc. 119,300 3,937
Ascend Communications, Inc. (a) 80,600 2,579
Aspen Technology, Inc. (a) 1,800 30
Brock Control Systems, Inc. (a) 17,600 123
CUC International, Inc. (a) 88,400 2,718
Cadence Design Systems, Inc. (a) 74,400 1,535
Chipcom Corp. (a) 50,550 2,085
Computer Associates International, Inc. 149,900 6,820
CompUSA, Inc. (a) 122,600 1,686
EIS International, Inc. (a) 63,800 853
Equifax, Inc. 45,900 1,182
Informix Corp. (a) 49,100 1,412
Infosoft International, Inc. (a) 17,800 547
Intelligent Electronics, Inc. 64,100 825
Lotus Development Corp. (a) 49,800 2,229
Mercury Interactive Group Corp. (a) 56,100 659
MicroAge, Inc. (a) 2,850 34
Microsoft Corp. (a) 174,900 10,997
Network Peripherals, Inc. (a) 49,000 1,250
Novell, Inc. (a) 209,400 4,162
COMMON STOCKS - CONTINUED
NOVEMBER
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
COMPUTER SERVICES & SOFTWARE - CONTINUED
Oracle Systems Corp. (a) 578,400 $ 23,859
Parametric Technology Corp. (a) 210,200 7,304
Platinum Technology, Inc. (a) 32,300 630
Spectrum Holobyte, Inc. (a) 21,100 280
Sybase, Inc. (a) 55,900 2,711
Synopsys, Inc. (a) 31,400 1,293
81,740
COMPUTERS & OFFICE EQUIPMENT - 9.0%
Adaptec, Inc. (a) 85,000 1,870
Bay Networks, Inc. (a) 275,200 7,086
Compaq Computer Corp. (a) 583,300 22,822
Danka Business Systems PLC sponsored ADR 48,500 976
Data General Corp. (a) 12,100 130
Dell Computer Corp. (a) 80,700 3,475
Digital Equipment Corp. (a) 173,800 5,909
EMC Corp. (a) 713,900 16,063
Hewlett-Packard Co. 80,100 7,850
International Business Machines Corp. 286,300 20,256
Read Rite Corp. (a) 1,900 31
Seagate Technology (a) 123,000 2,937
Silicon Graphics, Inc. (a) 283,900 8,730
Stratus Computer, Inc. (a) 167,500 6,260
Sun Microsystems, Inc. (a) 252,400 8,455
TSL Holding, Inc. (a) 23 -
Tech Data Corp. (a) 22,100 376
113,226
ELECTRONIC INSTRUMENTS - 1.6%
Applied Materials, Inc. (a) 341,300 16,340
Credence Systems Corp. (a) 23,800 626
Electro Scientific Industries, Inc. (a) 11,700 227
Novellus System, Inc. (a) 57,000 2,971
20,164
ELECTRONICS - 8.3%
Actel Corp. (a) 32,700 270
Advanced Micro Devices, Inc. (a) 106,000 2,676
Alliance Semiconductor Corp. (a) 25,700 842
Altera Corp. (a) 97,100 3,738
Analog Devices, Inc. (a) 136,000 4,505
COMMON STOCKS - CONTINUED
NOVEMBER
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
ELECTRONICS - CONTINUED
Applied Digital Access, Inc. (a) 20,400 $ 490
Cascade Communications Corp. (a) 2,900 158
Integrated Device Technology, Inc. (a) 49,100 1,277
Intel Corp. 196,800 12,423
LSI Logic Corp. (a) 20,200 864
Linear Technology Corp. 158,000 7,623
Maxim Integrated Products, Inc. (a) 79,800 4,928
Microchip Technology, Inc. (a) 9,900 295
Micron Technology, Inc. 267,600 11,105
Motorola, Inc. 314,100 17,707
National Semiconductor Corp. (a) 251,600 4,623
Quality Semiconductor, Inc. 5,000 61
Standard Microsystems Corp. (a) 100,000 2,388
Tencor Instruments (a) 149,000 6,612
Texas Instruments, Inc. 191,600 14,466
Xilinx, Inc. (a) 112,400 6,575
103,626
TOTAL TECHNOLOGY 394,176
TRANSPORTATION - 1.6%
AIR TRANSPORTATION - 0.5%
AMR Corp. (a) 25,500 1,294
Atlantic Southeast Airlines, Inc. 35,600 543
Delta Air Lines, Inc. 35,900 1,799
KLM Royal Dutch Airlines (a) 30,200 744
Malaysian Helicopter Services (BHD) 123,600 244
Technology Resources Industries (BHD) (a) 358,000 1,219
5,843
RAILROADS - 0.9%
CSX Corp. 144,000 10,008
Conrail, Inc. 36,700 1,908
11,916
COMMON STOCKS - CONTINUED
NOVEMBER
SHARES VALUE (NOTE 1)
(000S)
TRANSPORTATION - CONTINUED
TRUCKING & FREIGHT - 0.2%
Knights Transportation, Inc. (a) 2,100 $ 29
Landstar System, Inc. (a) 57,800 1,474
MTL, Inc. (a) 7,800 97
TNT Freightways Corp. 23,600 587
US Xpress Enterprises, Inc. (a) 4,200 49
2,236
TOTAL TRANSPORTATION 19,995
UTILITIES - 5.6%
CELLULAR - 1.2%
Airtouch Communications (a) 318,035 8,627
Arch Communications Group, Inc. (a) 68,700 1,357
LIN Broadcasting Corp. (a) 16,900 2,425
United States Cellular Corp. (a) 41,300 1,291
Vanguard Cellular Systems, Inc. Class A (a) 36,500 967
14,667
ELECTRIC UTILITY - 0.3%
Huaneng Power International, Inc. Class N sponsored ADR (a) 223,600 3,857
TELEPHONE SERVICES - 4.1%
ALC Communications Corp. (a) 123,100 4,185
AT & T Corp. 52,600 2,584
Ameritech Corp. 188,700 7,454
BellSouth Corp. 161,500 8,378
LCI International, Inc. (a) 72,200 1,606
NYNEX Corp. 152,800 5,749
Pakistan Telecommunications Voucher GDR (a)(b) 10,000 1,580
Indosat (Indonesia Satellite) sponsored ADR (a) 23,300 885
Southwestern Bell Corp. 312,600 12,934
Sprint Corp. 48,800 1,458
Telefonos de Mexico SA sponsored ADR representing
shares Ord. Class L 39,200 2,078
Telephone & Data Systems, Inc. 69,809 3,028
51,919
TOTAL UTILITIES 70,443
TOTAL COMMON STOCKS
(Cost $1,141,478) 1,169,517
NONCONVERTIBLE PREFERRED STOCKS - 0.0%
NOVEMBER
SHARES VALUE (NOTE 1)
(000S)
DURABLES - 0.0%
AUTOS, TIRES, & ACCESSORIES - 0.0%
Porsche AG Ord. (Cost $156) 300 $ 128
CONVERTIBLE BONDS - 0.1%
NOVEMBER
MOODY'S RATINGS PRINCIPAL
(UNAUDITED) AMOUNT (000S)
CONSTRUCTION & REAL ESTATE - 0.1%
BUILDING MATERIALS - 0.1%
Cemex SA 4 1/4%, 11/1/97 (b)
(Cost $800) Ba3 $ 800 828
REPURCHASE AGREEMENTS - 6.7%
NOVEMBER
MATURITY
AMOUNT
(000S)
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.71% dated
11/30/94 due 12/1/94 $ 83,897 83,884
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $1,226,318) $ 1,254,357
LEGEND
(a) Non-income producing
(b) Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $2,819,000 or 0.2% of net
assets.
INCOME TAX INFORMATION
At November 30,1994, the aggregate cost of investment securities for income
tax purposes was $1,234,590,000. Net unrealized appreciation aggregated
$19,767,000, of which $78,111,000 related to appreciated investment
securities and $58,344,000 related to depreciated investment securities.
The fund hereby designates $2,299,000 as a capital gain dividend for the
purpose of the dividend paid deduction.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNTS) NOVEMBER 30, 1994
ASSETS
Investment in securities, at value (including repurchase $ 1,254,357
agreements of $83,884) (cost $1,226,318) -
See accompanying schedule
Cash 150
Receivable for investments sold 46,527
Receivable for fund shares sold 23,967
Dividends receivable 1,669
Interest receivable 5
Other receivables 57
TOTAL ASSETS 1,326,732
LIABILITIES
Payable for investments purchased $ 37,156
Payable for fund shares redeemed 3,405
Accrued management fee 660
Distribution fees payable 467
Other payables and accrued expenses 422
TOTAL LIABILITIES 42,110
NET ASSETS $ 1,284,622
Net Assets consist of:
Paid in capital $ 1,252,453
Undistributed net investment income 4,543
Accumulated undistributed net realized gain (loss) on (413)
investments and foreign currency transactions
Net unrealized appreciation (depreciation) on 28,039
investments and assets and liabilities in foreign
currencies
NET ASSETS $ 1,284,622
CALCULATION OF MAXIMUM OFFERING PRICE $28.52
CLASS A:
NET ASSET VALUE, and redemption price per share
($874,172 (divided by) 30,654 shares)
Maximum offering price per share (100/95.25 of $28.52) $29.94
INSTITUTIONAL CLASS: $28.90
NET ASSET VALUE, offering price and redemption price per
share ($410,450 (divided by) 14,203 shares)
</TABLE>
STATEMENT OF OPERATIONS
NOVEMBER
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED NOVEMBER 30, 1994
INVESTMENT INCOME $ 11,406
Dividends
Interest 7,564
TOTAL INCOME 18,970
EXPENSES
Management fee $ 6,567
Transfer agent fees 2,102
Class A
Institutional Class 414
Distribution fees - Class A 4,313
Accounting fees and expenses 461
Non-interested trustees' compensation 6
Custodian fees and expenses 121
Registration fees 269
Class A
Institutional Class 142
Audit 55
Legal 23
Interest 1
Miscellaneous 14
Total expenses before reductions 14,488
Expense reductions (163) 14,325
NET INVESTMENT INCOME 4,645
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 5,899
Foreign currency transactions (22) 5,877
Change in net unrealized appreciation (depreciation) on (1,948)
investment securities
NET GAIN (LOSS) 3,929
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 8,574
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
NOVEMBER
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30,
1994 1993
INCREASE (DECREASE) IN NET ASSETS
Operations $ 4,645 $ 1,059
Net investment income
Net realized gain (loss) 5,877 37,971
Change in net unrealized appreciation (depreciation) (1,948) 9,617
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 8,574 48,647
FROM OPERATIONS
Distributions to shareholders from:
Net investment income
Class A - (92)
Institutional Class (1,108) (658)
Net realized gain
Class A (19,906) (625)
Institutional Class (14,674) (3,309)
TOTAL DISTRIBUTIONS (35,688) (4,684)
Share transactions - net increase (decrease) 637,286 428,507
TOTAL INCREASE (DECREASE) IN NET ASSETS 610,172 472,470
NET ASSETS
Beginning of period 674,450 201,980
End of period (including undistributed net investment $ 1,284,622 $ 674,450
income of $4,543 and $1,329, respectively)
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
NOVEMBER
<TABLE>
<CAPTION>
<S> <C> <C> <C>
YEAR ENDED PERIOD ENDED
NOVEMBER 30, B
NOVEMBER 30,
1994 1993 1992
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 29.50 $ 26.33 $ 23.78
Income from Investment Operations
Net investment income .08 (.07)F .01
Net realized and unrealized gain (loss) on .39 3.82 2.54
investments
Total from investment operations .47 3.75 2.55
Less Distributions
From net investment income - (.08) -
From net realized gain (1.45) (.50) -
Total distributions (1.45) (.58) -
Net asset value, end of period $ 28.52 $ 29.50 $ 26.33
TOTAL RETURN D,E 1.58% 14.52% 10.72%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 874,172 $ 377,894 $ 22,655
Ratio of expenses to average net assets C 1.70% 1.84% 1.47% A
Ratio of expenses to average net assets before 1.71% 1.85% 1.47% A
expense reductions C
Ratio of net investment income to average net .15% (.24) .25% A
assets %
Portfolio turnover 137% 160% 240%
</TABLE>
1 ANNUALIZED
2 FOR THE PERIOD SEPTEMBER 10, 1992 (COMMENCEMENT OF SALES OF CLASS A
SHARES) TO NOVEMBER 30, 1992.
3 SEE NOTE 7 OF NOTES TO FINANCIAL STATEMENTS.
4 THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
5 TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
6 NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
NOVEMBER
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEAR ENDED NOVEMBER 30,
1994 1993 1992 1991 1990
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 29.74 $ 26.37 $ 24.28 $ 15.55 $ 17.32
period
Income from Investment
Operations
Net investment income .30 .19 C .17 .04 .01
Net realized and unrealized .42 3.78 4.55 8.69 .34
gain (loss) on investments
Total from investment .72 3.97 4.72 8.73 .35
operations
Less Distributions
From net investment income (.11) (.10) (.03) - (.08)
From net realized gain (1.45) (.50) (2.60) - (2.04)
Total distributions (1.56) (.60) (2.63) - (2.12)
Net asset value, end of period $ 28.90 $ 29.74 $ 26.37 $ 24.28 $ 15.55
TOTAL RETURN B 2.46% 15.36 21.14 56.14 2.75
% % % %
RATIOS AND SUPPLEMENTAL
DATA
Net assets, end of period (000 $ 410,450 $ 296,466 $ 179,325 $ 68,766 $ 27,473
omitted)
Ratio of expenses to average .84% .94 .98 1.13 1.74
net assets A % % % %
Ratio of expenses to average .86% .95 .98 1.13 1.74
net assets before expense % % % %
reductions A
Ratio of net investment income 1.00% .66 .73 .25 .07
to average net assets % % % %
Portfolio turnover 137% 160 240 254 262
% % % %
</TABLE>
A SEE NOTE 7 OF NOTES TO FINANCIAL STATEMENTS.
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN AND FOR PERIODS
OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1994
1. SIGNIFICANT ACCOUNTING
POLICIES.
Fidelity Advisor Equity Portfolio Growth (the fund) is a fund of Fidelity
Advisor Series I(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 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. Investment income,
realized and unrealized capital gains and losses, and the common expenses
of the fund are allocated on a prorata 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 and expenses.
SECURITY VALUATION. Securities for which exchange quotations are readily
available are valued at the last sale price, or if no sale price, at the
closing bid price. Securities (including restricted securities) for which
exchange quotations are not readily available (and in certain cases debt
securities which trade on an exchange), are valued primarily using
dealer-supplied valuations or 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 maturing within sixty days
of their purchase date are valued at amortized cost or original cost plus
accrued interest, both of which approximate current value.
FOREIGN CURRENCY TRANSLATION.
The accounting records of the fund are maintained in U.S. dollars.
Investment securities and other assets and liabilities denominated in a
foreign currency are translated into U.S. dollars at the prevailing rates
of exchange at period end. Purchases and sales of securities, income
receipts, and expense payments are translated into U.S. dollars at the
prevailing exchange rate on the respective dates of the transactions.
Effective December 1, 1993, the fund adopted Statement of Position (SOP)
93-4: Foreign Currency Accounting and Financial Statement Presentation for
Investment Companies. In accordance with this SOP, reported net realized
gains and losses on foreign currency transactions represent net gains and
losses from sales and maturities of forward currency contracts, disposition
of foreign currencies, currency gains and losses realized between the trade
and settlement dates on securities transactions, and the difference between
the amount of net investment income accrued and the U.S. dollar amount
actually received. As permitted under the SOP, the effects of changes in
foreign currency exchange rates on investments in securities are not
segregated in the Statement of Operations from the effects of changes in
market prices of those securities, but are included with the net realized
and unrealized gain or loss on investment securities.
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
FOREIGN CURRENCY TRANSLATION - CONTINUED
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 all of its taxable income for its fiscal
year. The schedule of investments includes information regarding income
taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date,
except certain dividends from foreign securities where the ex-dividend date
may have passed, are recorded as soon as the fund is informed of the
ex-dividend date. Interest income is accrued as earned. Investment income
is recorded net of foreign taxes withheld where recovery of such taxes is
uncertain.
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.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date. Income dividends are declared separately for each class,
while capital gain distributions are declared at the fund level and
allocated to each class on a prorata basis based on the number of shares
held by each class on the ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
non-taxable dividends and losses deferred due to wash sales.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect net investment income per share. Accumulated undistributed net
investment income may include temporary book and tax basis differences
which will reverse in a subsequent period. Any taxable income or gain
remaining at fiscal year end is distributed in the following year.
CHANGE IN ACCOUNTING FOR DISTRIBUTIONS TO SHAREHOLDERS. 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,
the fund changed the classification of distributions to shareholders to
better disclose the differences between financial statement amounts and
distributions determined in accordance with income tax regulations.
Accordingly, amounts as of the beginning of the fiscal year have been
reclassified to reflect an increase in paid in capital of $49,562,000,a
decrease in undistributed net investment income of $1,347,000 and a
decrease in accumulated net realized gain on investments of $48,215,000.
2. OPERATING POLICIES.
FORWARD FOREIGN CURRENCY CONTRACTS. The fund may enter into forward foreign
currency contracts. The U.S. dollar value of forward foreign currency
contracts is determined using forward currency exchange rates supplied by a
quotation service. Losses may arise due to changes in the value of the
foreign currency or if the counterparty does not perform under the
contract.
Purchases and sales of forward foreign currency contracts having the same
settlement date and broker are offset and any realized gain (loss) is
recognized on the date of offset, otherwise gain (loss) is recognized on
settlement date.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying securities, whose market value is required to be at least
102% of the resale price at the time of purchase. The fund's investment
adviser, Fidelity Management & Research Company (FMR), is responsible for
determining that the value of these underlying securities remains at least
equal to the resale price.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other affiliated
entities of FMR, may transfer uninvested cash balances into one or more
joint trading accounts. These balances are invested in one or more
repurchase agreements that mature in 60 days or less from the date of
purchase, and are collateralized by U.S. Treasury or Federal Agency
obligations.
3. PURCHASES AND SALES
OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $1,768,920,000 and $1,187,024,000, 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 .2850% to .5200% for the period December 1, 1993 to July
31, 1994 and .2700% to .5200% for the period August 1, 1994 to November 30,
1994. In the event that these rates were lower than the contractual rates
in effect during those periods, FMR voluntarily implemented the above
rates, as they resulted in the same or a lower management fee. The annual
individual fund fee rate is .33%. For the period, the management fee was
equivalent to an annual rate of .64% of average net assets.
DISTRIBUTION AND SERVICE PLAN. Pursuant to the Class A Distribution and
Service Plan ("Class A Plan") and in accordance with Rule 12b-1 of the 1940
Act, Class A pays Fidelity Distributors Corporation (FDC), an affiliate of
FMR, a distribution and service fee that is based on annual rates of .65%
of its
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
DISTRIBUTION AND SERVICE PLAN - CONTINUED
average net assets. For the period, Class A paid FDC $4,313,000, of which
$3,313,000 was paid to securities dealers, banks and other financial
institutions for the distribution of Class A shares, and providing
shareholder support services.
In addition, under the Class A Plan and the Institutional Class
Distribution and Service Plan, FMR or FDC may use its resources to pay
administrative and promotional expenses related to the sale of the fund's
shares. Subject to the approval of the Board of Trustees, the Plans also
authorize payments to third parties that assist in the sale of the fund's
shares or render shareholder support services. No payments were made under
the Plans during the period.
SALES LOAD. FDC receives a front-end sales charge of up to 4.75% for
selling Class A shares of the fund. For the period, FDC received sales
charges of $9,353,000 on sales of Class A shares of the fund, of which
$7,956,000 was paid to securities dealers, banks, and other financial
institutions.
TRANSFER AGENT FEES. State Street Bank and Trust Company (State Street) is
the transfer, dividend disbursing, and shareholder servicing agent for the
fund's Class A shares, while Fidelity Investments Institutional Operations
Company (FIIOC), an affiliate of FMR (collectively, with State Street,
referred to as the Transfer Agents) acts in that capacity for the fund's
Institutional Class shares. The Transfer Agents receive fees based on the
type, size, number of accounts, and the number of transactions made by
shareholders of the respective classes of the fund. With respect to the
Class A shares, State Street has delegated certain transfer, dividend
paying, and shareholder services to FIIOC for which FIIOC receives its
allocable share of all such fees. FIIOC pays for typesetting, printing and
mailing of all shareholder reports, except proxy statements.
ACCOUNTING AND SECURITY LENDING FEES. Fidelity Service Co. (FSC), an
affiliate of FMR, maintains the fund's accounting records and administers
the security lending program. The security lending fee is based on the
number and duration of lending transactions. The accounting fee is based on
the level of average net assets for the month plus out-of-pocket expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $730,000 for the period.
5. INTERFUND LENDING
PROGRAM.
The fund participated in the interfund lending program as a lender. The
maximum loan and the average daily loan balances during the periods for
which loans were outstanding amounted to
5. INTERFUND LENDING
PROGRAM - CONTINUED
$26,973,000 and $24,896,000, respectively. The weighted average interest
rate was 3.67%. Interest earned from the interfund lending program amounted
to $15,000 and is included in interest income on the Statement of
Operations.
6. BANK BORROWINGS.
The fund is permitted to have bank borrowings for temporary or emergency
purposes to fund shareholder redemptions. The fund has established
borrowing arrangements with certain banks. Under the most restrictive
arrangement, each fund must pledge to the bank securities having a market
value in excess of 220% of the total bank borrowings. The interest rate on
the borrowings is the bank's base rate, as revised from time to time. The
maximum loan and the average daily loan balances during the periods for
which loans were outstanding amounted to $6,739,000. The weighted average
interest rate was 3.88%.
7. EXPENSE REDUCTIONS.
FMR has directed certain portfolio trades to brokers who paid a portion of
the fund's expenses. For the period, the fund's expenses were reduced by
$163,000 under this arrangement.
8. SHARE TRANSACTIONS.
Share transactions for both classes were as follows:
SHARES DOLLARS
YEAR ENDED NOVEMBER 30, YEAR ENDED NOVEMBER 30,
AMOUNTS IN THOUSANDS 1994 1993 1994 1993
CLASS A
Shares sold 24,742 14,584 $ 713,195 $ 412,420
Reinvestment of distributions 591 22 16,940 564
Shares redeemed (7,490) (2,654) (214,991) (75,501)
Net increase (decrease) 17,843 11,952 $ 515,144 $ 337,483
INSTITUTIONAL CLASS
Shares sold 10,161 7,349 $ 296,185 $ 209,624
Reinvestment of distributions 294 78 8,468 2,044
Shares redeemed (6,221) (4,258) (182,511) (120,644)
Net increase (decrease) 4,234 3,169 $ 122,142 $ 91,024
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Advisor
Series I and the Shareholders of
Fidelity Advisor Equity Portfolio Growth:
We have audited the accompanying statement of assets and liabilities of
Fidelity Advisor Series I: Fidelity Advisor Equity Portfolio Growth,
including the schedule of portfolio investments, as of November 30, 1994,
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 for each of the five years in the
period then ended (Institutional Class), and for the two years in the
period then ended and for the period September 10, 1992 (commencement of
sale of Class A shares) to November 30, 1992 (Class A). 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, 1994 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 I: Fidelity Advisor Equity Portfolio Growth as
of November 30, 1994, 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 for each of the five years
in the period then ended (Institutional Class), and for the two years in
the period then ended and for the period September 10, 1992 (commencement
of sale of Class A shares) to November 30, 1992 (Class A), in conformity
with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
January 9, 1995
DISTRIBUTIONS
The Board of Trustees of Advisor Equity Portfolio Growth 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: 12/19/94 12/16/94 $.08 $.21
INSTITUTIONAL CLASS: 12/19/94 12/16/94 $.27 $.21
14% of the dividends distributed during the fiscal year qualify for the
dividends received deduction for corporate shareholders.
The fund will notify shareholders in January 1995 of the applicable
percentage for use in preparing 1994 income
tax returns.
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Robert E. Stansky, Vice President
Gary L. French, Treasurer
John H. Costello, Assistant Treasurer
Arthur S. Loring, Secretary
Robert H. Morrison, Manager,
Security Transactions
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox
Phyllis Burke Davis
Richard J. Flynn
Edward C. Johnson 3d
E. Bradley Jones
Donald J. Kirk
Peter S. Lynch
Edward H. Malone
Marvin L. Mann
Gerald C. McDonough
Thomas R. Williams
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
State Street Bank and Trust Company
Boston, MA
CUSTODIAN
Chase Manhattan Bank, N.A.
New York, NY
GROWTH FUNDS
Fidelity Advisor Overseas Fund
Fidelity Advisor Equity Portfolio Growth
Fidelity Advisor Global Resources Fund
Fidelity Advisor Growth
Opportunities Fund
Fidelity Advisor Strategic
Opportunities Fund
GROWTH AND INCOME FUNDS
Fidelity Advisor Equity Portfolio Income
Fidelity Advisor Income & Growth Fund
INCOME FUNDS
Fidelity Advisor Emerging Markets Income Fund
Fidelity Advisor High Yield Fund
Fidelity Advisor Strategic Income Fund
Fidelity Advisor Government Investment Fund
Fidelity Advisor Limited Term Bond Fund
Fidelity Advisor Short Fixed-Income Fund
TAX-EXEMPT FUNDS
Fidelity Advisor High Income
Municipal Fund
Fidelity Advisor Limited Term Tax-Exempt Fund
Fidelity Advisor Short-Intermediate Tax-Exempt Fund
MONEY MARKET FUNDS
Daily Money Fund: Money Market Portfolio
Daily Money Fund: U.S. Treasury Portfolio
Daily Tax-Exempt Money Fund
(REGISTERED TRADEMARK)
(registered trademark)
(2_FIDELITY_LOGOS)FIDELITY ADVISOR
(registered trademark)
EQUITY PORTFOLIO GROWTH -
INSTITUTIONAL CLASS
ANNUAL REPORT
NOVEMBER 30, 1994
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 25 Statements of assets and liabilities,
operations, and changes in net
assets, as well as financial
highlights.
NOTES 30 Notes to the financial statements.
REPORT OF INDEPENDENT 35 The auditors' opinion.
ACCOUNTANTS
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, THE
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT
RISK,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. 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
DEAR SHAREHOLDER:
The unsettling period that began for investors when the Federal Reserve
Board raised short-term interest rates in February has continued into the
fourth quarter of 1994. The Board raised the federal funds rate - the rate
banks charge each other for overnight loans - five times from February
through August, taking it from 3.00% to 4.75%. A sixth increase in November
lifted the rate to 5.50%. The Fed rate hikes were intended to forestall
inflation that could result from an improving U.S. economy, and they led to
below-average returns for many stocks and negative returns for many bond
investments.
The volatility we have witnessed this year follows a period in which there
was a nearly perfect investing environment. Although there was a
late-summer rally in stocks and, to a lesser extent in bond markets, it is
impossible to predict where interest rates might go or what might happen in
the markets in the months ahead. That's why it probably is a good time to
again review your investment portfolio and how well it matches your goals.
If you can leave your money invested over the long term, you can avoid much
of the volatility that generally accompanies the stock market in the short
term, as we have been witnessing this year. You also can help to manage
risk through diversification of investments. A stock fund is already
diversified because it invests in many issues. You can diversify even
further by placing some of your money in several different stock funds or
in other investment categories, such as bonds.
If you have a short investment time horizon, you might want to consider
moving some of your investment into a money market fund, which seeks income
and a stable share price by investing in high-quality, short-term
investments. As with any mutual fund, of course, there is no assurance that
a money market fund will achieve its goal, and it is important to remember
that money market funds are not insured by any agency of the U.S.
government.
Finally, no matter what your investment horizon or portfolio diversity, it
makes good sense to follow a regular investment plan - investing a certain
amount of money at the same time each month or quarter - and to review your
portfolio periodically, as we have discussed here. A periodic investment
plan will not, of course, assure a profit or protect against a loss.
Remember to contact your investment professional if you need help with your
investments.
Best regards,
Edward C. Johnson 3d
EQUITY PORTFOLIO GROWTH - INSTITUTIONAL CLASS
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $100,000 investment. A fund's total
return includes changes in a fund's share price, plus reinvestment of any
dividends (or income) and capital gains (the profits the fund earns when it
sells stocks that have grown in value).
CUMULATIVE TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
PERIODS ENDED NOVEMBER 30, 1994 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Advisor Equity Portfolio Growth - Institutional 2.46% 129.70% 515.42%
Class
S&P 500(registered trademark) 1.05% 53.14% 287.95%
Average Growth Fund -0.36% 52.60% 242.52%
</TABLE>
CUMULATIVE TOTAL RETURNS show Institutional Class' performance in
percentage terms over a set period - in this case, one, five, or ten years.
For example, if you invested $1,000 in a fund that had a 5% return over the
past year, you would end up with $1,050. You can compare Institutional
Class' returns to the performance of the Standard & Poor's Composite Index
of 500 stocks - a common proxy for the U.S. stock market. To measure how
Institutional Class' performance stacked up against its peers, you can
compare it to the average growth fund, which currently reflects the
performance of 468 growth funds tracked by Lipper Analytical Services. Both
benchmarks include reinvested dividends and capital gains, if any, and
exclude the effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
PERIODS ENDED NOVEMBER 30, 1994 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Advisor Equity Portfolio Growth - Institutional Class 2.46% 18.10% 19.93%
S&P 500(registered trademark) 1.05% 8.90% 14.52%
Average Growth Fund -0.36% 8.53% 12.63%
</TABLE>
AVERAGE ANNUAL TOTAL RETURNS take Institutional Class' actual (or
cumulative) return and show you what would have happened if Institutional
Class had performed at a constant rate each year.
$100,000 OVER 10 YEARS
FA Equity Port.: Growth -Standard & Poor's 5
11/30/84 100000.00 100000.00
12/31/84 102241.59 102640.00
01/31/85 117808.22 110635.66
02/28/85 121917.81 111996.47
03/31/85 118430.88 112074.87
04/30/85 117310.09 111974.00
05/31/85 123910.34 118446.10
06/30/85 125404.73 120305.71
07/31/85 130012.45 120125.25
08/31/85 131008.72 119104.18
09/30/85 123412.20 115376.22
10/31/85 128268.99 120706.60
11/30/85 138107.10 128987.08
12/31/85 144707.35 135230.05
01/31/86 149598.59 135987.34
02/28/86 162182.85 146159.19
03/31/86 171043.20 154314.88
04/30/86 176436.45 152571.12
05/31/86 184012.69 160687.90
06/30/86 185425.21 163403.53
07/31/86 169887.50 154269.27
08/31/86 175665.99 165716.05
09/30/86 159614.64 152011.33
10/31/86 171300.02 160782.39
11/30/86 169245.45 164689.40
12/31/86 165705.30 160489.82
01/31/87 185584.37 182107.80
02/28/87 202351.89 189301.05
03/31/87 200513.61 194771.85
04/30/87 193160.50 193038.38
05/31/87 191887.85 194717.82
06/30/87 195564.40 204551.07
07/31/87 204472.97 214921.81
08/31/87 216775.29 222938.39
09/30/87 213098.74 218056.04
10/31/87 156960.58 171086.77
11/30/87 140274.68 156989.22
12/31/87 164768.01 168936.10
01/31/88 164313.69 176048.31
02/29/88 174157.37 184252.16
03/31/88 176731.87 178558.77
04/30/88 174763.13 180540.77
05/31/88 173551.60 182111.48
06/30/88 188998.61 190470.39
07/31/88 185212.58 189746.60
08/31/88 177034.75 183295.22
09/30/88 186878.43 191103.60
10/31/88 184909.69 196416.28
11/30/88 182032.31 193607.52
12/31/88 190423.30 196995.66
01/31/89 205428.23 211415.74
02/28/89 205582.92 206151.49
03/31/89 212389.27 210954.82
04/30/89 226466.06 221903.37
05/31/89 245956.99 230890.46
06/30/89 236830.28 229574.38
07/31/89 253072.73 250304.95
08/31/89 262972.88 255210.92
09/30/89 270243.31 254164.56
10/31/89 266840.13 248267.94
11/30/89 267922.96 253332.61
12/31/89 275811.73 259412.59
01/31/90 250496.53 242006.01
02/28/90 260587.20 245127.88
03/31/90 275811.73 251623.77
04/30/90 270323.82 245333.18
05/31/90 308739.19 269253.16
06/30/90 311394.63 267422.24
07/31/90 302543.16 266566.49
08/31/90 263950.76 242468.88
09/30/90 242176.15 230660.64
10/31/90 245185.65 229668.80
11/30/90 275280.64 244505.41
12/31/90 294930.90 251327.11
01/31/91 337772.00 262284.97
02/28/91 368221.05 281038.35
03/31/91 404335.04 287839.47
04/30/91 402918.80 288530.29
05/31/91 423985.29 300994.80
06/30/91 388756.45 287209.24
07/31/91 420267.68 300593.19
08/31/91 442927.43 307717.25
09/30/91 443989.61 302578.37
10/31/91 445228.82 306632.92
11/30/91 429827.26 294275.61
12/31/91 485773.75 327940.74
01/31/92 499375.94 321841.04
02/29/92 501942.91 326024.98
03/31/92 478247.73 319667.49
04/30/92 468374.74 329065.71
05/31/92 466202.68 330678.14
06/30/92 450800.81 325751.03
07/31/92 466597.60 339074.25
08/31/92 455342.39 332123.23
09/30/92 463833.16 336042.28
10/31/92 488318.18 337218.43
11/30/92 520701.60 348717.58
12/31/92 535020.00 353006.80
01/31/93 549977.60 355972.06
02/28/93 536041.33 360813.28
03/31/93 553007.22 368426.44
04/30/93 544120.33 359510.52
05/31/93 576032.36 369145.40
06/30/93 578456.06 370215.92
07/31/93 568761.26 368735.06
08/31/93 589968.62 382710.12
09/30/93 607742.41 379763.25
10/31/93 615417.46 387624.35
11/30/93 600673.29 383941.92
12/31/93 619066.42 388587.62
01/31/94 641403.86 401799.60
02/28/94 636293.08 390910.83
03/31/94 610526.19 373867.11
04/30/94 617553.52 378652.61
05/31/94 614146.33 384862.52
06/30/94 587527.64 375433.39
07/31/94 600517.56 387747.60
08/31/94 627988.05 403645.25
09/30/94 615424.03 393755.94
10/31/94 635867.18 402615.45
11/30/94 615424.03 387952.20
$100,000 OVER 10 YEARS: Let's say you invested $100,000 in Advisor Equity
Portfolio Growth - Institutional Class on November 30, 1984. As the chart
shows, by November 30, 1994, the value of your investment would have grown
to $615,424 - a 515.42% increase on your initial investment. For
comparison, look at how the S&P 500 did over the same period. With
dividends reinvested, the same $100,000 investment would have grown to
$387,952 - a 287.95% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
growth in the long run and
volatility in the short run. In
turn, the share price and
return of a fund that invests in
stocks 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)
On September 10, 1992, the fund began offering Class A shares to retail
investors. All performance information for Class A prior to September 10,
1992, reflects the performance of the Institutional Class and therefore
does not reflect Class A's 12b-1 fee and different transfer agent fee
arrangements (see Notes to the Financial Statements), which if included,
would have lowered Class A's performance.
Average annual total returns include the effect of Class A's maximum 4.75%
sales charge for the past 1 year, past 5 years, and past 10 years total
return figures, respectively. Cumulative total returns exclude the effects
of sales charges.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1994 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Advisor Equity Portfolio Growth - Class A 1.58% 125.75% 504.83%
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1994 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Advisor Equity Portfolio Growth - Class A -3.24% 16.55% 19.14%
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
Rising interest rates contributed
to below average returns in the
U.S. stock market during the 12
months ended November 30,
1994. The Standard & Poor's 500
stock index finished the 12-month
period with a total return of 1.05%
- - below its historical annual
average return of more than 10%.
After two months of steady gains,
stocks stumbled from February
through June 1994. During that
time, the Federal Reserve Board
raised short-term interest rates
four times in an effort to curb
possible future inflation triggered
by a strengthening economy.
Higher rates hurt stocks because
they raise the cost of borrowing
for companies and consumers,
often dampening future corporate
profits. In addition, higher rates
often make bonds and other
fixed-income investments more
attractive relative to stocks.
Despite a fifth Fed rate hike in
August, the market rallied from
July through October, fueled by
strengthening corporate earnings
and a flurry of merger and
acquisition activity. Interest rate
concerns resurfaced in
November, when the Fed raised
rates again. Although returns in
overseas markets were mixed,
foreign stocks generally fared
better than those in the U.S. The
Morgan Stanley EAFE (Europe,
Australia, Far East) index
returned 14.84% for the 12
months ended November 30,
while the Morgan Stanley
Emerging Markets Free index
was up 17.44% during the same
period.
An interview with Robert Stansky, Portfolio Manager of Fidelity Advisor
Equity Portfolio Growth
Q. BOB, HOW HAS THE FUND PERFORMED?
A. Not as well as I would have liked. With a volatile stock market and
rising interest rates as a backdrop, the Institutional Class was up 2.46%
for the year ended November 30, 1994. That's only slightly better than the
average growth fund, which was down 0.36% for the same time period,
according to Lipper Analytical Services.
Q. HOW DID RISING INTEREST RATES INFLUENCE PERFORMANCE?
A. We've seen that many growth stocks don't do well in a rising interest
rate environment. The fear in the market over the past six months was that
with rates climbing, the investing environment wouldn't be very favorable
for stocks in general. Many growth stocks don't perform well in an
increasing interest rate environment because investors often take advantage
of higher returns and invest in bonds. Though rising interest rates
haven't affected the balance sheets of most of the companies whose stocks I
own, it has influenced the public's perception of the overall market. But
what I'd really like to stress is that while interest rates and the economy
matter, a company's success in its own product cycle and execution is what
really drives stock prices.
Q. WHAT DO YOU MEAN BY "PRODUCT CYCLE" AND "EXECUTION?"
A. A company that's doing well in its product cycle is offering the right
products at the right time, products that customers want to buy. Execution
refers to distribution services provided by companies that don't
manufacture the products that they're selling, like a retailer, and offer
the right inventory to the public through an ever-increasing number of
stores.
Q. CAN YOU GIVE EXAMPLES OF COMPANIES WITH GOOD PRODUCT CYCLE AND EXECUTION
IN WHICH YOU'VE INVESTED?
A. Motorola is a good example. Motorola has grown much faster than the
overall communications market because it has products that the customer
wants and has kept up with demand. By contrast, IBM has suffered from
product cycle problems in the past, although the situation has improved
considerably. Lowe's, a leader in the home improvement market, opened
stores at a rapid pace this year, and is an example of a company with great
execution.
Q. TECHNOLOGY AS A SECTOR OF THE FUND HAS GROWN FROM 26.5% TO 31.4%. WHY?
A. I took more positions in smaller-to medium-sized technology companies in
order to increase exposure to technology, yet reduce risk in one large
individual holding. Compaq is an example. The company has a lot to do in
the next few months as it brings new products to market. It has to move
from selling mostly 486s to a mix of Pentiums and 486s. Still, as a 2%
holding, Compaq remains a large position in the fund. However, I want to be
sure that I don't have too much exposure during the transitional time.
Q. DOES THAT EXPLAIN WHY YOU'VE
CUT BACK YOUR HOLDINGS IN THE FINANCIAL SECTOR?
A. Yes. Rising rates affect financial companies first. The cost to borrow
funds increases as soon as rates go up - there's no lag time in financial
stocks like there is in some other sectors.
Q. WHAT DISAPPOINTMENTS DID YOU HAVE THIS YEAR?
A. This year, disappointments came in two categories - the investments I
shouldn't have made that went down, and the investments I should have made
more of that went up. Overall, General Electric has been a disappointing
investment over the past six months. Operationally it did a great job, but
the losses at a brokerage firm that GE owned held back profits and put
investors off. Though it's still a large holding that is both increasing
its dividend and buying back stock, it hasn't done as well as I had hoped.
Microsoft falls into the latter category. It had great earnings this year
and was placed in the S&P 500. There's no doubt that the fund should have
owned more Microsoft.
Q. WHAT'S YOUR OUTLOOK FOR THE NEXT SIX MONTHS?
A. Well, I believe that stock prices follow earnings, period. I ask myself,
"Did the company earn what was expected?" Companies are in much better
shape cost-wise and product cycle-wise and demand is pretty good. However,
as overall market growth slows in 1995, stocks that post superior earnings
should perform well. In general, I'm hopeful.
FUND FACTS
GOAL: to increase the value of
the fund's shares over the
long term by investing in
stocks that have
above-average growth
potential
START DATE: November 22, 1983
SIZE: as of November 30, 1994,
more than $1.2 billion
MANAGER: Robert Stansky, since
1987; joined Fidelity in 1983
(checkmark)
BOB STANSKY ON
PRICE/EARNINGS RATIO
"In a rising interest rate
environment, I think it's likely
that stocks with high
price/earnings (p/e) ratios
could contract or stay flat -
the stock price falling while
the earnings remain steady.
Most aggressive stocks -
those stocks that are growing
very quickly - often sell at 30
to 40 times earnings. If you
look at those stocks
arithmetically, they are the
most attractive, but in a rising
rate market, valuations are
likely to come down. I cut
back on some of the really
high p/e stocks early in the
cycle and most of the stocks
I'm holding now don't have
huge price/earnings ratios."
(solid bullet) The fund's cash position
has fallen from 18% to
6.7%, in the past six months.
(solid bullet) The fund's holdings in
healthcare stocks has
increased from 7.1% to
10.1% during the period.
(solid bullet) Though the fund is
authorized to invest in
derivative instruments such
as futures, options and
structured notes, it did not
have any significant holdings
of those investments during
the period.
INVESTMENT CHANGES
TOP TEN STOCKS AS OF NOVEMBER 30, 1994
NOVEMBER
% OF FUND'S
% OF FUND'S INVESTMENTS
INVESTMENTS IN THESE STOCKS
6 MONTHS AGO
General Electric Co. 2.4 2.4
Lowe's Companies, Inc. 2.0 1.1
Oracle Systems Corp. 1.9 0.9
Johnson & Johnson 1.9 0.9
Compaq Computer Corp. 1.8 4.9
Sears, Roebuck & Co. 1.8 1.1
Warner-Lambert Co. 1.7 1.1
Pfizer, Inc. 1.6 1.1
International Business Machines 1.6 1.4
Corp.
Philip Morris Companies, Inc. 1.5 0.6
TOP FIVE INDUSTRIES AS OF NOVEMBER 30, 1994
NOVEMBER
% OF FUND'S
% OF FUND'S INVESTMENTS
INVESTMENTS IN THESE INDUSTRIES
6 MONTHS AGO
Technology 31.4 26.5
Retail & Wholesale 14.4 10.6
Health 10.1 7.1
Finance 7.3 8.2
Utilities 5.6 4.9
ASSET ALLOCATION
NOVEMBER
AS OF NOVEMBER 30, 1994 AS OF MAY 31, 1994
Row: 1, Col: 1, Value: 6.7
Row: 1, Col: 2, Value: 1.0
Row: 1, Col: 3, Value: 43.2
Row: 1, Col: 4, Value: 50.0
Row: 1, Col: 1, Value: 18.0
Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 42.0
Row: 1, Col: 4, Value: 40.0
Stocks 93.2%
Bonds 0.1%
Short-term
Investments 6.7%
Stocks 82.0%
Bonds -
Short-term
Investments 18.0%
INVESTMENTS NOVEMBER 30, 1994
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 93.2%
NOVEMBER
SHARES VALUE (NOTE 1)
(000S)
BASIC INDUSTRIES - 4.8%
CHEMICALS & PLASTICS - 1.2%
Airgas, Inc. (a) 107,800 $ 2,695
Dow Chemical Co. 94,600 6,054
Praxair, Inc. 51,500 1,043
Sterling Chemical, Inc. (a) 12,400 133
Union Carbide Corp. 184,800 5,290
15,215
IRON & STEEL - 0.3%
Hylsamex SA de CV sponsored ADR (a)(b) 17,200 411
Nucor Corp. 72,100 3,929
Schnitzer Steel, Inc. Class A 1,300 25
4,365
METALS & MINING - 1.1%
Aluminum Co. of America 159,000 12,978
ASARCO, Inc. 49,700 1,361
14,339
PACKAGING & CONTAINERS - 0.1%
U.S. Can Corp. (a) 37,300 671
PAPER & FOREST PRODUCTS - 2.1%
Champion International Corp. 121,700 4,229
Federal Paper Board Co., Inc. 7,400 201
Georgia-Pacific Corp. 87,300 6,242
International Paper Co. 67,000 4,790
Jefferson Smurfit Corp. (a) 5,100 82
Klabin Industria de Papel e Celulose PN 185,500 323
Louisiana-Pacific Corp. 83,000 2,324
Scott Paper Co. 58,300 3,804
Stone Container Corp. (a) 42,700 683
Temple-Inland, Inc. 43,000 1,930
Union Camp Corp. 38,000 1,755
26,363
TOTAL BASIC INDUSTRIES 60,953
CONGLOMERATES - 0.0%
Tyco Laboratories, Inc. 10,000 460
COMMON STOCKS - CONTINUED
NOVEMBER
SHARES VALUE (NOTE 1)
(000S)
CONSTRUCTION & REAL ESTATE - 0.5%
BUILDING MATERIALS - 0.4%
Armstrong World Industries, Inc. 21,900 $ 876
Cemex SA, Series B 137,500 1,319
Golden Pharos BHD (a) 199,000 619
Hume Industries Malay BHD 320,000 1,390
USG Corp. (a) 50,000 981
5,185
CONSTRUCTION - 0.1%
Empresas Ica Sociedad Controladora SA de CV sponsored
ADR representing Ord. Participation Certificate 9,700 300
Schuler Homes, Inc. (a) 38,500 563
863
REAL ESTATE INVESTMENT TRUSTS - 0.0%
Innkeepers USA Trust (a) 28,400 209
Property Trust of America (SBI) 1 --
209
TOTAL CONSTRUCTION & REAL ESTATE 6,257
DURABLES - 4.7%
AUTOS, TIRES, & ACCESSORIES - 3.1%
Autozone, Inc. (a) 221,500 5,676
Chrysler Corp. 219,400 10,613
Dana Corp. 44,100 954
Edelbrock Corp. (a) 2,900 41
Ford Motor Co. 587,600 15,939
Gentex Corp. (a) 22,300 482
Pep Boys-Manny, Moe & Jack 150,500 4,872
38,577
CONSUMER ELECTRONICS - 0.3%
Whirlpool Corp. 85,600 4,269
HOME FURNISHINGS - 0.2%
Ethan Allen Interiors, Inc. (a) 40,700 921
Strouds, Inc. (a) 104,800 1,677
Welcome Home (a) 44,000 236
2,834
COMMON STOCKS - CONTINUED
NOVEMBER
SHARES VALUE (NOTE 1)
(000S)
DURABLES - CONTINUED
TEXTILES & APPAREL - 1.1%
Cygne Designs, Inc. (a) 121,200 $ 1,727
Kellwood Co. 34,300 703
Mohawk Industries Inc. (a) 81,000 1,377
Nautica Enterprises, Inc. (a) 13,800 393
NIKE, Inc. Class B 49,000 3,130
Nine West Group, Inc. (a) 6,900 171
Reebok International Ltd. 70,200 2,694
St. John Knits 12,300 374
Tommy Hilfiger (a) 89,000 3,816
14,385
TOTAL DURABLES 60,065
ENERGY - 2.3%
ENERGY SERVICES - 0.5%
Halliburton Co. 14,600 509
Schlumberger Ltd. 101,200 5,376
5,885
OIL & GAS - 1.8%
Amoco Corp. 90,400 5,492
Anadarko Petroleum Corp. 11,400 456
Anderson Exploration Ltd. (a) 85,400 838
British Petroleum PLC ADR 93,684 7,436
Canadian Natural Resources Ltd. (a) 59,900 697
Petroleum Geo-Services AS ADR (a) 61,600 1,371
Rio Alto Exploration Ltd. (a) 144,400 656
Unocal Corp. 198,132 5,275
22,221
TOTAL ENERGY 28,106
FINANCE - 7.3%
BANKS - 2.4%
Bank of Boston Corp. 57,082 1,527
Bank of New York Co., Inc. 252,400 7,036
BankAmerica Corp. 54,600 2,238
COMMON STOCKS - CONTINUED
NOVEMBER
SHARES VALUE (NOTE 1)
(000S)
FINANCE - CONTINUED
BANKS - CONTINUED
Chemical Banking Corp. 167,000 $ 6,075
Citicorp 149,193 6,210
Crestar Financial Corp. 48 2
First Chicago Corp. 44,900 2,088
HSBC Holdings PLC 3,297 36
NationsBank Corp. 105,932 4,754
Republic New York Corp. 900 38
Shawmut National Corp. 22,328 396
Signet Banking Corp. 558 17
30,417
CREDIT & OTHER FINANCE - 1.6%
American Express Co. 307,604 9,113
Beneficial Corp. 43,800 1,599
Dean Witter Discover & Co. 133,654 4,678
Green Tree Acceptance, Inc. 88,300 2,439
Grupo Financiero Inbursa Class B (a) 73,500 288
Household International, Inc. 37,209 1,433
19,550
FEDERAL SPONSORED CREDIT - 2.5%
Federal Home Loan Mortgage Corporation 264,000 13,167
Federal National Mortgage Association 250,300 17,802
30,969
INSURANCE - 0.3%
Allstate Corp. 89,500 2,114
Travelers, Inc. (The) 71,200 2,341
4,455
SECURITIES INDUSTRY - 0.5%
Merrill Lynch & Co., Inc. 137,600 5,229
Schwab (Charles) Corp. 24,000 765
5,994
TOTAL FINANCE 91,385
COMMON STOCKS - CONTINUED
NOVEMBER
SHARES VALUE (NOTE 1)
(000S)
HEALTH - 10.1%
DRUGS & PHARMACEUTICALS - 6.6%
ALZA Corp. Class A (a) 130,900 $ 2,520
Amgen, Inc. (a) 183,900 10,735
Biogen, Inc. (a) 13,400 519
Bristol-Myers Squibb Co. 107,700 6,220
COR Therapeutics, Inc. (a) 30,500 408
Dura Pharmaceuticals, Inc. (a) 69,400 902
Elan Corp. PLC:
therapeutic systems unit (Common & 1 ADR warrant) (a) 7,093 183
ADR (a) 215,550 7,598
Pfizer, Inc. 263,000 20,350
Rhone Poulenc Rorer, Inc. 45,200 1,763
Schering-Plough Corp. 136,800 10,243
Warner-Lambert Co. 268,000 20,736
82,177
MEDICAL EQUIPMENT & SUPPLIES - 2.8%
Beckman Instruments, Inc. 4,800 137
Becton, Dickinson & Co. 90,200 4,262
Boston Scientific Corp. (a) 60,800 973
Cardinal Health, Inc. 36,700 1,670
Johnson & Johnson 443,800 23,688
Medisense, Inc. (a) 9,200 226
Medtronic, Inc. 52,400 2,777
Pall Corp. 6,200 110
St. Jude Medical, Inc. 47,800 1,906
35,749
MEDICAL FACILITIES MANAGEMENT - 0.7%
Columbia/HCA Healthcare Corp. 81,670 3,093
Humana, Inc. (a) 20,700 463
Lincare Holdings, Inc. (a) 16,700 455
U.S. Healthcare, Inc. 105,000 4,699
8,710
TOTAL HEALTH 126,636
HOLDING COMPANIES - 0.2%
Grupo Carso SA de CV Class A-1 (a) 218,600 2,459
Grupo Sidek SA de CV Class B Ord. (a) 65,900 281
2,740
COMMON STOCKS - CONTINUED
NOVEMBER
SHARES VALUE (NOTE 1)
(000S)
INDUSTRIAL MACHINERY & EQUIPMENT - 4.0%
ELECTRICAL EQUIPMENT - 2.7%
American Power Conversion Corp. (a) 44,100 $ 711
General Electric Co. 648,500 29,831
Ortel Corp. (a) 2,100 55
Scientific-Atlanta, Inc. 65,000 1,284
Sensormatic Electronics Corp. 41,800 1,348
Star Paging International Holdings Ltd. (warrants) (a) 448,000 20
33,249
INDUSTRIAL MACHINERY & EQUIPMENT - 0.9%
Case Corp. 84,700 1,662
Caterpillar, Inc. 115,700 6,248
PRI Automation, Inc. (a) 42,100 705
Perspective Technologies Corp. unit (1 common & 1 warrant) (a) 80,000 720
Ultratech Stepper, Inc. (a) 39,600 1,544
Veeco Instruments, Inc. (a) 20,700 228
11,107
POLLUTION CONTROL - 0.4%
Browning-Ferris Industries, Inc. 40,900 1,104
WMX Technologies, Inc. 158,900 4,092
5,196
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 49,552
MEDIA & LEISURE - 2.7%
BROADCASTING - 1.4%
Clear Channel Communications, Inc. (a) 41,000 1,876
Comcast Corp. Class A (Special) 69,400 1,102
Infinity Broadcasting Corp. (a) 112,600 3,378
Tele-Communications, Inc. Class A (a) 180,000 4,253
Time Warner, Inc. 25 1
Viacom, Inc. (a) 13,832 551
Viacom, Inc. (rights) (a) 172,900 259
Viacom, Inc. (non-vtg.) (a) 149,102 5,740
17,160
ENTERTAINMENT - 0.5%
Carnival Cruise Lines, Inc. Class A 36,900 1,596
Disney (Walt) Co. 98,300 4,288
5,884
COMMON STOCKS - CONTINUED
NOVEMBER
SHARES VALUE (NOTE 1)
(000S)
MEDIA & LEISURE - CONTINUED
LEISURE DURABLES & TOYS - 0.2%
Cobra Golf, Inc. (a) 69,000 $ 2,484
LODGING & GAMING - 0.1%
International Game Technology Corp. 46,500 773
Mirage Resorts, Inc. (a) 41,900 827
1,600
PUBLISHING - 0.1%
McGraw-Hill, Inc. 13,100 889
Meredith Corp. 1,200 58
Scripps (E.W.) Co. Class A 7,500 226
1,173
RESTAURANTS - 0.4%
Apple South, Inc. 92,650 1,181
Applebee's International, Inc. 48,000 720
Brinker International, Inc. (a) 45,000 765
Morrison Restaurants, Inc. 63,800 1,691
Outback Steakhouse, Inc. (a) 15,400 398
Sbarro, Inc. 11,650 261
5,016
TOTAL MEDIA & LEISURE 33,317
NONDURABLES - 2.9%
BEVERAGES - 0.3%
Dr. Pepper/Seven-Up Companies, Inc. (a) 5,300 131
PepsiCo, Inc. 86,500 3,060
3,191
FOODS - 0.0%
Gruma SA Class B (a) 44,100 292
HOUSEHOLD PRODUCTS - 0.9%
Colgate-Palmolive Co. 22,400 1,344
Gillette Co. 28,200 2,073
Procter & Gamble Co. 123,400 7,712
11,129
TOBACCO - 1.7%
American Brands, Inc. 34,300 1,213
Philip Morris Companies, Inc. 322,000 19,240
RJR Nabisco Holdings Corp. (a) 176,400 1,103
21,556
TOTAL NONDURABLES 36,168
COMMON STOCKS - CONTINUED
NOVEMBER
SHARES VALUE (NOTE 1)
(000S)
RETAIL & WHOLESALE - 14.4%
APPAREL STORES - 1.8%
AnnTaylor Stores Corp. (a) 35,200 $ 1,320
Baby Superstore, Inc. (a) 1,400 56
Baker (J.), Inc. 50,000 819
Charming Shoppes, Inc. 153,300 1,035
Ellett Brothers, Inc. 60,000 907
Filene's Basement Corp. (a) 68,500 420
Gap, Inc. 188,700 6,652
Limited, Inc. (The) 202,400 3,921
Sportmart, Inc. Class A (non-vtg) (a) 27,100 315
TJX Companies, Inc. 156,200 2,363
Talbots, Inc. 133,000 4,273
22,081
APPLIANCE STORES - 0.0%
Elektra (Grupo) SA US CPO (a) 26,400 288
DRUG STORES - 0.2%
General Nutrition Companies, Inc. (a) 67,500 1,974
Revco (D.S.), Inc. (a) 29,600 666
2,640
GENERAL MERCHANDISE STORES - 4.4%
Dayton Hudson Corp. 162,800 13,289
Nordstrom, Inc. 22,400 1,081
Penney (J.C.) Co., Inc. 183,200 8,427
Price/Costco, Inc. (a) 244,000 3,751
Sears, Roebuck & Co. 471,900 22,297
Wal-Mart Stores, Inc. 261,100 6,038
54,883
GROCERY STORES - 0.6%
Fleming Companies, Inc. 10,511 242
Safeway, Inc. (a) 81,400 2,483
Starbucks Corp. (a) 139,100 3,729
Stop & Shop Companies, Inc. (a) 41,400 978
7,432
RETAIL & WHOLESALE, MISCELLANEOUS - 7.4%
Barnes & Noble, Inc. (a) 65,500 1,793
Bed Bath & Beyond, Inc. (a) 92,500 2,683
Best Buy Co., Inc. (a) 107,800 4,757
Campo Electronics Appliances and Computers, Inc. (a) 50,000 638
COMMON STOCKS - CONTINUED
NOVEMBER
SHARES VALUE (NOTE 1)
(000S)
RETAIL & WHOLESALE - CONTINUED
RETAIL & WHOLESALE, MISCELLANEOUS - CONTINUED
Circuit City Stores, Inc. 49,400 $ 1,216
Corporate Express (a) 46,800 995
Gateway 2000, Inc. (a) 60,500 1,323
Home Depot, Inc. (The) 380,500 17,598
Lillian Vernon Corp. 6,000 99
Lowe's Companies, Inc. 687,400 25,692
Micro Warehouse, Inc. (a) 92,200 3,002
Officemax, Inc. (a) 178,300 4,391
Office Depot, Inc. (a) 390,400 9,272
Spiegel, Inc. Class A 30,900 413
Sports Authority, Inc. (a) 2,700 61
Staples, Inc. (a) 388,350 8,447
Sunglass Hut International, Inc. (a) 80,800 1,747
Toys "R" Us, Inc. (a) 117,000 4,285
Viking Office Products, Inc. (a) 6,200 178
Waban, Inc. (a) 135,400 2,302
Williams-Sonoma, Inc. (a) 65,400 1,982
92,874
TOTAL RETAIL & WHOLESALE 180,198
SERVICES - 0.7%
LEASING & RENTAL - 0.2%
Hollywood Entertainment Corp. (a) 55,200 1,835
Movie Gallery, Inc. (a) 7,100 186
2,021
PRINTING - 0.2%
Alco Standard Corp. 56,300 3,153
SERVICES - 0.3%
Careerstaff Unlimited, Inc. (a) 3,000 37
Norrell Corp. GA 8,300 164
Western Atlas, Inc. (a) 84,600 3,691
3,892
TOTAL SERVICES 9,066
COMMON STOCKS - CONTINUED
NOVEMBER
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - 31.4%
COMMUNICATIONS EQUIPMENT - 6.0%
Cabletron Systems, Inc. (a) 294,150 $ 13,972
Centigram Communications Corp. (a) 72,100 1,442
Cisco Systems, Inc. (a) 280,400 9,043
DSC Communications Corp. (a) 492,900 15,403
Ericsson (L.M.) Telefon AB Class B ADR 14,200 788
General Instrument Corp. (a) 41,600 1,248
Global Village Communication (a) 81,000 658
ITI Technologies 2,000 34
Inter-Tel, Inc. (a) 2,500 18
InterVoice, Inc. (a) 62,800 809
Newbridge Networks Corp. (a) 292,500 9,835
Nokia Corp. sponsored ADR (a) 180,500 12,612
Pairgain Technologies, Inc. (a) 87,600 1,248
PictureTel Corp. (a) 23,500 526
Shiva Corp. (a) 1,200 37
3Com Corp. (a) 178,100 7,747
75,420
COMPUTER SERVICES & SOFTWARE - 6.5%
Adobe Systems, Inc. 119,300 3,937
Ascend Communications, Inc. (a) 80,600 2,579
Aspen Technology, Inc. (a) 1,800 30
Brock Control Systems, Inc. (a) 17,600 123
CUC International, Inc. (a) 88,400 2,718
Cadence Design Systems, Inc. (a) 74,400 1,535
Chipcom Corp. (a) 50,550 2,085
Computer Associates International, Inc. 149,900 6,820
CompUSA, Inc. (a) 122,600 1,686
EIS International, Inc. (a) 63,800 853
Equifax, Inc. 45,900 1,182
Informix Corp. (a) 49,100 1,412
Infosoft International, Inc. (a) 17,800 547
Intelligent Electronics, Inc. 64,100 825
Lotus Development Corp. (a) 49,800 2,229
Mercury Interactive Group Corp. (a) 56,100 659
MicroAge, Inc. (a) 2,850 34
Microsoft Corp. (a) 174,900 10,997
Network Peripherals, Inc. (a) 49,000 1,250
Novell, Inc. (a) 209,400 4,162
COMMON STOCKS - CONTINUED
NOVEMBER
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
COMPUTER SERVICES & SOFTWARE - CONTINUED
Oracle Systems Corp. (a) 578,400 $ 23,859
Parametric Technology Corp. (a) 210,200 7,304
Platinum Technology, Inc. (a) 32,300 630
Spectrum Holobyte, Inc. (a) 21,100 280
Sybase, Inc. (a) 55,900 2,711
Synopsys, Inc. (a) 31,400 1,293
81,740
COMPUTERS & OFFICE EQUIPMENT - 9.0%
Adaptec, Inc. (a) 85,000 1,870
Bay Networks, Inc. (a) 275,200 7,086
Compaq Computer Corp. (a) 583,300 22,822
Danka Business Systems PLC sponsored ADR 48,500 976
Data General Corp. (a) 12,100 130
Dell Computer Corp. (a) 80,700 3,475
Digital Equipment Corp. (a) 173,800 5,909
EMC Corp. (a) 713,900 16,063
Hewlett-Packard Co. 80,100 7,850
International Business Machines Corp. 286,300 20,256
Read Rite Corp. (a) 1,900 31
Seagate Technology (a) 123,000 2,937
Silicon Graphics, Inc. (a) 283,900 8,730
Stratus Computer, Inc. (a) 167,500 6,260
Sun Microsystems, Inc. (a) 252,400 8,455
TSL Holding, Inc. (a) 23 -
Tech Data Corp. (a) 22,100 376
113,226
ELECTRONIC INSTRUMENTS - 1.6%
Applied Materials, Inc. (a) 341,300 16,340
Credence Systems Corp. (a) 23,800 626
Electro Scientific Industries, Inc. (a) 11,700 227
Novellus System, Inc. (a) 57,000 2,971
20,164
ELECTRONICS - 8.3%
Actel Corp. (a) 32,700 270
Advanced Micro Devices, Inc. (a) 106,000 2,676
Alliance Semiconductor Corp. (a) 25,700 842
Altera Corp. (a) 97,100 3,738
Analog Devices, Inc. (a) 136,000 4,505
COMMON STOCKS - CONTINUED
NOVEMBER
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
ELECTRONICS - CONTINUED
Applied Digital Access, Inc. (a) 20,400 $ 490
Cascade Communications Corp. (a) 2,900 158
Integrated Device Technology, Inc. (a) 49,100 1,277
Intel Corp. 196,800 12,423
LSI Logic Corp. (a) 20,200 864
Linear Technology Corp. 158,000 7,623
Maxim Integrated Products, Inc. (a) 79,800 4,928
Microchip Technology, Inc. (a) 9,900 295
Micron Technology, Inc. 267,600 11,105
Motorola, Inc. 314,100 17,707
National Semiconductor Corp. (a) 251,600 4,623
Quality Semiconductor, Inc. 5,000 61
Standard Microsystems Corp. (a) 100,000 2,388
Tencor Instruments (a) 149,000 6,612
Texas Instruments, Inc. 191,600 14,466
Xilinx, Inc. (a) 112,400 6,575
103,626
TOTAL TECHNOLOGY 394,176
TRANSPORTATION - 1.6%
AIR TRANSPORTATION - 0.5%
AMR Corp. (a) 25,500 1,294
Atlantic Southeast Airlines, Inc. 35,600 543
Delta Air Lines, Inc. 35,900 1,799
KLM Royal Dutch Airlines (a) 30,200 744
Malaysian Helicopter Services (BHD) 123,600 244
Technology Resources Industries (BHD) (a) 358,000 1,219
5,843
RAILROADS - 0.9%
CSX Corp. 144,000 10,008
Conrail, Inc. 36,700 1,908
11,916
COMMON STOCKS - CONTINUED
NOVEMBER
SHARES VALUE (NOTE 1)
(000S)
TRANSPORTATION - CONTINUED
TRUCKING & FREIGHT - 0.2%
Knights Transportation, Inc. (a) 2,100 $ 29
Landstar System, Inc. (a) 57,800 1,474
MTL, Inc. (a) 7,800 97
TNT Freightways Corp. 23,600 587
US Xpress Enterprises, Inc. (a) 4,200 49
2,236
TOTAL TRANSPORTATION 19,995
UTILITIES - 5.6%
CELLULAR - 1.2%
Airtouch Communications (a) 318,035 8,627
Arch Communications Group, Inc. (a) 68,700 1,357
LIN Broadcasting Corp. (a) 16,900 2,425
United States Cellular Corp. (a) 41,300 1,291
Vanguard Cellular Systems, Inc. Class A (a) 36,500 967
14,667
ELECTRIC UTILITY - 0.3%
Huaneng Power International, Inc. Class N sponsored ADR (a) 223,600 3,857
TELEPHONE SERVICES - 4.1%
ALC Communications Corp. (a) 123,100 4,185
AT & T Corp. 52,600 2,584
Ameritech Corp. 188,700 7,454
BellSouth Corp. 161,500 8,378
LCI International, Inc. (a) 72,200 1,606
NYNEX Corp. 152,800 5,749
Pakistan Telecommunications Voucher GDR (a)(b) 10,000 1,580
Indosat (Indonesia Satellite) sponsored ADR (a) 23,300 885
Southwestern Bell Corp. 312,600 12,934
Sprint Corp. 48,800 1,458
Telefonos de Mexico SA sponsored ADR representing
shares Ord. Class L 39,200 2,078
Telephone & Data Systems, Inc. 69,809 3,028
51,919
TOTAL UTILITIES 70,443
TOTAL COMMON STOCKS
(Cost $1,141,478) 1,169,517
NONCONVERTIBLE PREFERRED STOCKS - 0.0%
NOVEMBER
SHARES VALUE (NOTE 1)
(000S)
DURABLES - 0.0%
AUTOS, TIRES, & ACCESSORIES - 0.0%
Porsche AG Ord. (Cost $156) 300 $ 128
CONVERTIBLE BONDS - 0.1%
NOVEMBER
MOODY'S RATINGS PRINCIPAL
(UNAUDITED) AMOUNT (000S)
CONSTRUCTION & REAL ESTATE - 0.1%
BUILDING MATERIALS - 0.1%
Cemex SA 4 1/4%, 11/1/97 (b)
(Cost $800) Ba3 $ 800 828
REPURCHASE AGREEMENTS - 6.7%
NOVEMBER
MATURITY
AMOUNT
(000S)
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.71% dated
11/30/94 due 12/1/94 $ 83,897 83,884
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $1,226,318) $ 1,254,357
LEGEND
(c) Non-income producing
(d) Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $2,819,000 or 0.2% of net
assets.
INCOME TAX INFORMATION
At November 30,1994, the aggregate cost of investment securities for income
tax purposes was $1,234,590,000. Net unrealized appreciation aggregated
$19,767,000, of which $78,111,000 related to appreciated investment
securities and $58,344,000 related to depreciated investment securities.
The fund hereby designates $2,299,000 as a capital gain dividend for the
purpose of the dividend paid deduction.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNTS) NOVEMBER 30, 1994
ASSETS
Investment in securities, at value (including repurchase $ 1,254,357
agreements of $83,884) (cost $1,226,318) -
See accompanying schedule
Cash 150
Receivable for investments sold 46,527
Receivable for fund shares sold 23,967
Dividends receivable 1,669
Interest receivable 5
Other receivables 57
TOTAL ASSETS 1,326,732
LIABILITIES
Payable for investments purchased $ 37,156
Payable for fund shares redeemed 3,405
Accrued management fee 660
Distribution fees payable 467
Other payables and accrued expenses 422
TOTAL LIABILITIES 42,110
NET ASSETS $ 1,284,622
Net Assets consist of:
Paid in capital $ 1,252,453
Undistributed net investment income 4,543
Accumulated undistributed net realized gain (loss) on (413)
investments and foreign currency transactions
Net unrealized appreciation (depreciation) on 28,039
investments and assets and liabilities in foreign
currencies
NET ASSETS $ 1,284,622
CALCULATION OF MAXIMUM OFFERING PRICE $28.52
CLASS A:
NET ASSET VALUE, and redemption price per share
($874,172 (divided by) 30,654 shares)
Maximum offering price per share (100/95.25 of $28.52) $29.94
INSTITUTIONAL CLASS: $28.90
NET ASSET VALUE, offering price and redemption price per
share ($410,450 (divided by) 14,203 shares)
</TABLE>
STATEMENT OF OPERATIONS
NOVEMBER
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED NOVEMBER 30, 1994
INVESTMENT INCOME $ 11,406
Dividends
Interest 7,564
TOTAL INCOME 18,970
EXPENSES
Management fee $ 6,567
Transfer agent fees 2,102
Class A
Institutional Class 414
Distribution fees - Class A 4,313
Accounting fees and expenses 461
Non-interested trustees' compensation 6
Custodian fees and expenses 121
Registration fees 269
Class A
Institutional Class 142
Audit 55
Legal 23
Interest 1
Miscellaneous 14
Total expenses before reductions 14,488
Expense reductions (163) 14,325
NET INVESTMENT INCOME 4,645
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 5,899
Foreign currency transactions (22) 5,877
Change in net unrealized appreciation (depreciation) on (1,948)
investment securities
NET GAIN (LOSS) 3,929
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 8,574
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
NOVEMBER
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30,
1994 1993
INCREASE (DECREASE) IN NET ASSETS
Operations $ 4,645 $ 1,059
Net investment income
Net realized gain (loss) 5,877 37,971
Change in net unrealized appreciation (depreciation) (1,948) 9,617
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 8,574 48,647
FROM OPERATIONS
Distributions to shareholders from:
Net investment income
Class A - (92)
Institutional Class (1,108) (658)
Net realized gain
Class A (19,906) (625)
Institutional Class (14,674) (3,309)
TOTAL DISTRIBUTIONS (35,688) (4,684)
Share transactions - net increase (decrease) 637,286 428,507
TOTAL INCREASE (DECREASE) IN NET ASSETS 610,172 472,470
NET ASSETS
Beginning of period 674,450 201,980
End of period (including undistributed net investment $ 1,284,622 $ 674,450
income of $4,543 and $1,329, respectively)
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
NOVEMBER
<TABLE>
<CAPTION>
<S> <C> <C> <C>
YEAR ENDED PERIOD ENDED
NOVEMBER 30, B
NOVEMBER 30,
1994 1993 1992
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 29.50 $ 26.33 $ 23.78
Income from Investment Operations
Net investment income .08 (.07)F .01
Net realized and unrealized gain (loss) on .39 3.82 2.54
investments
Total from investment operations .47 3.75 2.55
Less Distributions
From net investment income - (.08) -
From net realized gain (1.45) (.50) -
Total distributions (1.45) (.58) -
Net asset value, end of period $ 28.52 $ 29.50 $ 26.33
TOTAL RETURN D,E 1.58% 14.52% 10.72%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 874,172 $ 377,894 $ 22,655
Ratio of expenses to average net assets C 1.70% 1.84% 1.47% A
Ratio of expenses to average net assets before 1.71% 1.85% 1.47% A
expense reductions C
Ratio of net investment income to average net .15% (.24) .25% A
assets %
Portfolio turnover 137% 160% 240%
</TABLE>
1 ANNUALIZED
2 FOR THE PERIOD SEPTEMBER 10, 1992 (COMMENCEMENT OF SALES OF CLASS A
SHARES) TO NOVEMBER 30, 1992.
3 SEE NOTE 7 OF NOTES TO FINANCIAL STATEMENTS.
4 THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
5 TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
6 NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
NOVEMBER
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEAR ENDED NOVEMBER 30,
1994 1993 1992 1991 1990
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 29.74 $ 26.37 $ 24.28 $ 15.55 $ 17.32
period
Income from Investment
Operations
Net investment income .30 .19 C .17 .04 .01
Net realized and unrealized .42 3.78 4.55 8.69 .34
gain (loss) on investments
Total from investment .72 3.97 4.72 8.73 .35
operations
Less Distributions
From net investment income (.11) (.10) (.03) - (.08)
From net realized gain (1.45) (.50) (2.60) - (2.04)
Total distributions (1.56) (.60) (2.63) - (2.12)
Net asset value, end of period $ 28.90 $ 29.74 $ 26.37 $ 24.28 $ 15.55
TOTAL RETURN B 2.46% 15.36 21.14 56.14 2.75
% % % %
RATIOS AND SUPPLEMENTAL
DATA
Net assets, end of period (000 $ 410,450 $ 296,466 $ 179,325 $ 68,766 $ 27,473
omitted)
Ratio of expenses to average .84% .94 .98 1.13 1.74
net assets A % % % %
Ratio of expenses to average .86% .95 .98 1.13 1.74
net assets before expense % % % %
reductions A
Ratio of net investment income 1.00% .66 .73 .25 .07
to average net assets % % % %
Portfolio turnover 137% 160 240 254 262
% % % %
</TABLE>
A SEE NOTE 7 OF NOTES TO FINANCIAL STATEMENTS.
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN AND FOR PERIODS
OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1994
9. SIGNIFICANT ACCOUNTING
POLICIES.
Fidelity Advisor Equity Portfolio Growth (the fund) is a fund of Fidelity
Advisor Series I(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 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. Investment income,
realized and unrealized capital gains and losses, and the common expenses
of the fund are allocated on a prorata 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 and expenses.
SECURITY VALUATION. Securities for which exchange quotations are readily
available are valued at the last sale price, or if no sale price, at the
closing bid price. Securities (including restricted securities) for which
exchange quotations are not readily available (and in certain cases debt
securities which trade on an exchange), are valued primarily using
dealer-supplied valuations or 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 maturing within sixty days
of their purchase date are valued at amortized cost or original cost plus
accrued interest, both of which approximate current value.
FOREIGN CURRENCY TRANSLATION.
The accounting records of the fund are maintained in U.S. dollars.
Investment securities and other assets and liabilities denominated in a
foreign currency are translated into U.S. dollars at the prevailing rates
of exchange at period end. Purchases and sales of securities, income
receipts, and expense payments are translated into U.S. dollars at the
prevailing exchange rate on the respective dates of the transactions.
Effective December 1, 1993, the fund adopted Statement of Position (SOP)
93-4: Foreign Currency Accounting and Financial Statement Presentation for
Investment Companies. In accordance with this SOP, reported net realized
gains and losses on foreign currency transactions represent net gains and
losses from sales and maturities of forward currency contracts, disposition
of foreign currencies, currency gains and losses realized between the trade
and settlement dates on securities transactions, and the difference between
the amount of net investment income accrued and the U.S. dollar amount
actually received. As permitted under the SOP, the effects of changes in
foreign currency exchange rates on investments in securities are not
segregated in the Statement of Operations from the effects of changes in
market prices of those securities, but are included with the net realized
and unrealized gain or loss on investment securities.
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
FOREIGN CURRENCY TRANSLATION - CONTINUED
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 all of its taxable income for its fiscal
year. The schedule of investments includes information regarding income
taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date,
except certain dividends from foreign securities where the ex-dividend date
may have passed, are recorded as soon as the fund is informed of the
ex-dividend date. Interest income is accrued as earned. Investment income
is recorded net of foreign taxes withheld where recovery of such taxes is
uncertain.
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.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date. Income dividends are declared separately for each class,
while capital gain distributions are declared at the fund level and
allocated to each class on a prorata basis based on the number of shares
held by each class on the ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
non-taxable dividends and losses deferred due to wash sales.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect net investment income per share. Accumulated undistributed net
investment income may include temporary book and tax basis differences
which will reverse in a subsequent period. Any taxable income or gain
remaining at fiscal year end is distributed in the following year.
CHANGE IN ACCOUNTING FOR DISTRIBUTIONS TO SHAREHOLDERS. 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,
the fund changed the classification of distributions to shareholders to
better disclose the differences between financial statement amounts and
distributions determined in accordance with income tax regulations.
Accordingly, amounts as of the beginning of the fiscal year have been
reclassified to reflect an increase in paid in capital of $49,562,000,a
decrease in undistributed net investment income of $1,347,000 and a
decrease in accumulated net realized gain on investments of $48,215,000.
10. OPERATING POLICIES.
FORWARD FOREIGN CURRENCY CONTRACTS. The fund may enter into forward foreign
currency contracts. The U.S. dollar value of forward foreign currency
contracts is determined using forward currency exchange rates supplied by a
quotation service. Losses may arise due to changes in the value of the
foreign currency or if the counterparty does not perform under the
contract.
Purchases and sales of forward foreign currency contracts having the same
settlement date and broker are offset and any realized gain (loss) is
recognized on the date of offset, otherwise gain (loss) is recognized on
settlement date.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying securities, whose market value is required to be at least
102% of the resale price at the time of purchase. The fund's investment
adviser, Fidelity Management & Research Company (FMR), is responsible for
determining that the value of these underlying securities remains at least
equal to the resale price.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other affiliated
entities of FMR, may transfer uninvested cash balances into one or more
joint trading accounts. These balances are invested in one or more
repurchase agreements that mature in 60 days or less from the date of
purchase, and are collateralized by U.S. Treasury or Federal Agency
obligations.
11. PURCHASES AND SALES
OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $1,768,920,000 and $1,187,024,000, respectively.
12. 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 .2850% to .5200% for the period December 1, 1993 to July
31, 1994 and .2700% to .5200% for the period August 1, 1994 to November 30,
1994. In the event that these rates were lower than the contractual rates
in effect during those periods, FMR voluntarily implemented the above
rates, as they resulted in the same or a lower management fee. The annual
individual fund fee rate is .33%. For the period, the management fee was
equivalent to an annual rate of .64% of average net assets.
DISTRIBUTION AND SERVICE PLAN. Pursuant to the Class A Distribution and
Service Plan ("Class A Plan") and in accordance with Rule 12b-1 of the 1940
Act, Class A pays Fidelity Distributors Corporation (FDC), an affiliate of
FMR, a distribution and service fee that is based on annual rates of .65%
of its
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
DISTRIBUTION AND SERVICE PLAN - CONTINUED
average net assets. For the period, Class A paid FDC $4,313,000, of which
$3,313,000 was paid to securities dealers, banks and other financial
institutions for the distribution of Class A shares, and providing
shareholder support services.
In addition, under the Class A Plan and the Institutional Class
Distribution and Service Plan, FMR or FDC may use its resources to pay
administrative and promotional expenses related to the sale of the fund's
shares. Subject to the approval of the Board of Trustees, the Plans also
authorize payments to third parties that assist in the sale of the fund's
shares or render shareholder support services. No payments were made under
the Plans during the period.
SALES LOAD. FDC receives a front-end sales charge of up to 4.75% for
selling Class A shares of the fund. For the period, FDC received sales
charges of $9,353,000 on sales of Class A shares of the fund, of which
$7,956,000 was paid to securities dealers, banks, and other financial
institutions.
TRANSFER AGENT FEES. State Street Bank and Trust Company (State Street) is
the transfer, dividend disbursing, and shareholder servicing agent for the
fund's Class A shares, while Fidelity Investments Institutional Operations
Company (FIIOC), an affiliate of FMR (collectively, with State Street,
referred to as the Transfer Agents) acts in that capacity for the fund's
Institutional Class shares. The Transfer Agents receive fees based on the
type, size, number of accounts, and the number of transactions made by
shareholders of the respective classes of the fund. With respect to the
Class A shares, State Street has delegated certain transfer, dividend
paying, and shareholder services to FIIOC for which FIIOC receives its
allocable share of all such fees. FIIOC pays for typesetting, printing and
mailing of all shareholder reports, except proxy statements.
ACCOUNTING AND SECURITY LENDING FEES. Fidelity Service Co. (FSC), an
affiliate of FMR, maintains the fund's accounting records and administers
the security lending program. The security lending fee is based on the
number and duration of lending transactions. The accounting fee is based on
the level of average net assets for the month plus out-of-pocket expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $730,000 for the period.
13. INTERFUND LENDING
PROGRAM.
The fund participated in the interfund lending program as a lender. The
maximum loan and the average daily loan balances during the periods for
which loans were outstanding amounted to
5. INTERFUND LENDING
PROGRAM - CONTINUED
$26,973,000 and $24,896,000, respectively. The weighted average interest
rate was 3.67%. Interest earned from the interfund lending program amounted
to $15,000 and is included in interest income on the Statement of
Operations.
14. BANK BORROWINGS.
The fund is permitted to have bank borrowings for temporary or emergency
purposes to fund shareholder redemptions. The fund has established
borrowing arrangements with certain banks. Under the most restrictive
arrangement, each fund must pledge to the bank securities having a market
value in excess of 220% of the total bank borrowings. The interest rate on
the borrowings is the bank's base rate, as revised from time to time. The
maximum loan and the average daily loan balances during the periods for
which loans were outstanding amounted to $6,739,000. The weighted average
interest rate was 3.88%.
15. EXPENSE REDUCTIONS.
FMR has directed certain portfolio trades to brokers who paid a portion of
the fund's expenses. For the period, the fund's expenses were reduced by
$163,000 under this arrangement.
16. SHARE TRANSACTIONS.
Share transactions for both classes were as follows:
SHARES DOLLARS
YEAR ENDED NOVEMBER 30, YEAR ENDED NOVEMBER 30,
AMOUNTS IN THOUSANDS 1994 1993 1994 1993
CLASS A
Shares sold 24,742 14,584 $ 713,195 $ 412,420
Reinvestment of distributions 591 22 16,940 564
Shares redeemed (7,490) (2,654) (214,991) (75,501)
Net increase (decrease) 17,843 11,952 $ 515,144 $ 337,483
INSTITUTIONAL CLASS
Shares sold 10,161 7,349 $ 296,185 $ 209,624
Reinvestment of distributions 294 78 8,468 2,044
Shares redeemed (6,221) (4,258) (182,511) (120,644)
Net increase (decrease) 4,234 3,169 $ 122,142 $ 91,024
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Advisor
Series I and the Shareholders of
Fidelity Advisor Equity Portfolio Growth:
We have audited the accompanying statement of assets and liabilities of
Fidelity Advisor Series I: Fidelity Advisor Equity Portfolio Growth,
including the schedule of portfolio investments, as of November 30, 1994,
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 for each of the five years in the
period then ended (Institutional Class), and for the two years in the
period then ended and for the period September 10, 1992 (commencement of
sale of Class A shares) to November 30, 1992 (Class A). 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, 1994 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 I: Fidelity Advisor Equity Portfolio Growth as
of November 30, 1994, 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 for each of the five years
in the period then ended (Institutional Class), and for the two years in
the period then ended and for the period September 10, 1992 (commencement
of sale of Class A shares) to November 30, 1992 (Class A), in conformity
with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
January 9, 1995
DISTRIBUTIONS
The Board of Trustees of Advisor Equity Portfolio Growth 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: 12/19/94 12/16/94 $.08 $.21
INSTITUTIONAL CLASS: 12/19/94 12/16/94 $.27 $.21
14% of the dividends distributed during the fiscal year qualify for the
dividends received deduction for corporate shareholders.
The fund will notify shareholders in January 1995 of the applicable
percentage for use in preparing 1994 income
tax returns.
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Robert E. Stansky, Vice President
Gary L. French, Treasurer
John H. Costello, Assistant Treasurer
Arthur S. Loring, Secretary
Robert H. Morrison, Manager,
Security Transactions
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox
Phyllis Burke Davis
Richard J. Flynn
Edward C. Johnson 3d
E. Bradley Jones
Donald J. Kirk
Peter S. Lynch
Edward H. Malone
Marvin L. Mann
Gerald C. McDonough
Thomas R. Williams
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Investments Institutional Operations Company
Boston, MA
CUSTODIAN
Chase Manhattan Bank, N.A.
New York, NY
GROWTH FUNDS
Fidelity Advisor Overseas Fund
Fidelity Advisor Equity Portfolio Growth
Fidelity Advisor Global Resources Fund
Fidelity Advisor Growth
Opportunities Fund
Fidelity Advisor Strategic
Opportunities Fund
GROWTH AND INCOME FUNDS
Fidelity Advisor Equity Portfolio Income
Fidelity Advisor Income & Growth Fund
INCOME FUNDS
Fidelity Advisor Emerging Markets Income Fund
Fidelity Advisor High Yield Fund
Fidelity Advisor Strategic Income Fund
Fidelity Advisor Government Investment Fund
Fidelity Advisor Limited Term Bond Fund
Fidelity Advisor Short Fixed-Income Fund
TAX-EXEMPT FUNDS
Fidelity Advisor High Income
Municipal Fund
Fidelity Advisor Limited Term Tax-Exempt Fund
Fidelity Advisor Short-Intermediate Tax-Exempt Fund
MONEY MARKET FUNDS
Daily Money Fund: Money Market Portfolio
Daily Money Fund: U.S. Treasury Portfolio
Daily Tax-Exempt Money Fund
(REGISTERED TRADEMARK)
(registered trademark)
