(2_FIDELITY_LOGOS)FIDELITY ADVISOR
(registered trademark)
MID CAP
FUND - CLASS A, CLASS T (FORMERLY CLASS A), AND CLASS B
ANNUAL REPORT
NOVEMBER 30, 1996
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over time.
FUND TALK 10 The manager's review of fund
performance, strategy and outlook.
INVESTMENT CHANGES 13 A summary of major shifts in the
fund's investments over the last six
months.
INVESTMENTS 14 A complete list of the fund's
investments with their market
values.
FINANCIAL STATEMENTS 26 Statements of assets and
liabilities, operations, and changes
in net assets, as well as financial
highlights.
NOTES 33 Notes to the financial statements.
REPORT OF INDEPENDENT 39 The auditors' opinion.
ACCOUNTANTS
DISTRIBUTIONS 40
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR DISTRIBUTION TO
PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN
EFFECTIVE
PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY ADVISOR FUND, INCLUDING CHARGES AND
EXPENSES,
CONTACT YOUR INVESTMENT PROFESSIONAL FOR A FREE PROSPECTUS. READ IT
CAREFULLY BEFORE YOU
INVEST OR SEND MONEY.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
Although stocks have managed to post solid returns throughout 1996, signs
of strength in the economy have led to inflation fears, causing some
uncertainty in bond markets so far this year. In 1995, both stock and bond
markets posted strong results, while the year before, stocks posted
below-average returns and bonds had one of the worst years in history.
These market ups and downs are a normal part of investing, and there are
some basic principles that are helpful for investors to remember in
different types of markets.
If you can leave your money invested over the long term, you can avoid the
results of the volatility that generally accompanies the stock market in
the short term, as we witnessed last year. You also can help to manage some
of the risks of investing through diversification. 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 types of 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. 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 or guaranteed 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. 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
ADVISOR MID CAP FUND - CLASS A
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can look at
the total percentage change in value, the average annual percentage change,
or the growth of a hypothetical $10,000 investment. A class' total return
includes changes in share price, plus reinvestment of any dividends (or
income) and capital gains (the profits the fund earns when it sells
securities that have grown in value). The initial offering of Class A
shares took place on September 3, 1996. Class A shares bear a 0.25% 12b-1
fee that is reflected in returns after September 3, 1996. Returns prior to
September 3, 1996 are those of Class T and reflect Class T's 0.50% 12b-1
fee. If Fidelity had not reimbursed certain class expenses, the total
return would have been lower.
CUMULATIVE TOTAL RETURNS
PERIOD ENDED NOVEMBER 30, 1996 LIFE OF
FUND
Advisor Mid Cap - Class A 17.00%
Advisor Mid Cap - Class A 10.86%
(incl. 5.25% sales charge)
Standard & Poor's MidCap 400 13.78%
CUMULATIVE TOTAL RETURNS show Class A's performance in percentage terms
over a set period - in this case, since the fund started on February 20,
1996. For example, if you invested $1,000 in a fund that had a 5% return
over the past year, the value of your investment would be $1,050. You can
compare Class A's returns to the performance of the Standard & Poor's
MidCap 400 Index - a widely recognized, unmanaged index of 400
medium-capitalization stocks. This benchmark includes reinvested dividends
and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
AVERAGE ANNUAL RETURNS take Class A shares' actual (or cumulative) return
and show you what would have happened if Class A had performed at a
constant rate
each year. Since the fund is less than a year old, we will report these
numbers in the next report.
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19961130 19961216 104142 S00000000000001
FA Mid Cap -CL A SP MidCap 400
00251 SP004
1996/02/20 9475.00 10000.00
1996/02/29 9645.55 10023.70
1996/03/31 9721.35 10143.79
1996/04/30 10195.10 10453.58
1996/05/31 10678.33 10594.91
1996/06/30 10204.58 10435.88
1996/07/31 9560.28 9729.90
1996/08/31 10214.05 10291.02
1996/09/30 10886.78 10739.71
1996/10/31 10593.05 10770.96
1996/11/29 11085.75 11377.69
IMATRL PRASUN SHR__CHT 19961130 19961216 104144 R00000000000013
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Mid Cap Fund - Class A on February 20, 1996,
when the fund started, and the current maximum 5.25% sales charge was paid.
As the chart shows, by November 30, 1996, the value of the investment would
have grown to $11,086 - a 10.86% increase on the initial investment. For
comparison, look at how the Standard & Poor's MidCap 400 Index did over the
same period. With dividends reinvested, the same $10,000 investment would
have grown to $11,378 - a 13.78% 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)
ADVISOR MID CAP FUND - CLASS T
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can look at
the total percentage change in value, the average annual percentage change,
or the growth of a hypothetical $10,000 investment. A class' total return
includes changes in share price, plus reinvestment of any dividends (or
income) and capital gains (the profits the fund earns when it sells
securities that have grown in value).
CUMULATIVE TOTAL RETURNS
PERIOD ENDED NOVEMBER 30, 1996 LIFE OF
FUND
Advisor Mid Cap - Class T 17.00%
Advisor Mid Cap - Class T 12.91%
(incl. 3.50% sales charge)
Standard & Poor's MidCap 400 13.78%
CUMULATIVE TOTAL RETURNS show Class T's performance in percentage terms
over a set period - in this case, since the fund started on February 20,
1996. For example, if you invested $1,000 in a fund that had a 5% return
over the past year, the value of your investment would be $1,050. You can
compare Class T's returns to the performance of the Standard & Poor's
MidCap 400 Index - a widely recognized, unmanaged index of 400
medium-capitalization stocks. This benchmark includes reinvested dividends
and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
AVERAGE ANNUAL RETURNS take Class T shares' actual (or cumulative) return
and show you what would have happened if Class T has performed at a
constant rate
each year. Since the fund is less than a year old, we will report these
numbers in the next report.
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19961130 19961211 110621 S00000000000001
FA Mid Cap -CL T SP MidCap 400
00531 SP004
1996/02/20 9650.00 10000.00
1996/02/29 9823.70 10023.70
1996/03/31 9900.90 10143.79
1996/04/30 10383.40 10453.58
1996/05/31 10875.55 10594.91
1996/06/30 10393.05 10435.88
1996/07/31 9736.85 9729.90
1996/08/31 10402.70 10291.02
1996/09/30 11078.20 10739.71
1996/10/31 10788.70 10770.96
1996/11/29 11291.00 11377.69
IMATRL PRASUN SHR__CHT 19961130 19961211 110622 R00000000000013
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Mid Cap Fund - Class T on February 20, 1996,
when the fund started, and the current maximum 3.50% sales charge was paid.
As the chart shows, by November 30, 1996, the value of the investment would
have grown to $11,291 - a 12.91% increase on the initial investment. For
comparison, look at how the Standard & Poor's MidCap 400 Index did over the
same period. With dividends reinvested, the same $10,000 investment would
have grown to $11,378 - a 13.78% 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)
ADVISOR MID CAP FUND - CLASS B
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can look at
the total percentage change in value, the average annual percentage change,
or the growth of a hypothetical $10,000 investment. A class' total return
includes changes in share price, plus reinvestment of any dividends (or
income) and capital gains (the profits the fund earns when it sells
securities that have grown in value). Effective January 2, 1997, Class B's
contingent deferred sales charge is based on a declining scale that ranges
from 5% to 1% on Class B shares redeemed within six years of purchase. This
scale is revised from the previous scale of 4% to 1% on shares redeemed
within five years of purchase. Class B's contingent deferred sales charge
included in the life of fund total return figure is 5%.
CUMULATIVE TOTAL RETURNS
PERIOD ENDED NOVEMBER 30, 1996 LIFE OF
FUND
Advisor Mid Cap - Class B 16.10%
Advisor Mid Cap - Class B 11.10%
(incl. contingent deferred sales charge) 1
Standard & Poor's MidCap 400 13.78%
CUMULATIVE TOTAL RETURNS show Class B's performance in percentage terms
over a set period - in this case, since the fund started on February 20,
1996. For example, if you invested $1,000 in a fund that had a 5% return
over the past year, the value of your investment would be $1,050. You can
compare Class B's returns to the performance of the Standard & Poor's
MidCap 400 Index - a widely recognized, unmanaged index of 400
medium-capitalization stocks. This benchmark includes reinvested dividends
and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
AVERAGE ANNUAL RETURNS take Class B shares' actual (or cumulative) return
and show you what would have happened if Class B has performed at a
constant rate
each year. Since the fund is less than a year old, we will report these
numbers in the next report.
1 HAD CLASS B'S CONTINGENT DEFERRED SALES CHARGE SCALE PRIOR TO JANUARY 2,
1997 BEEN REFLECTED, THE CUMULATIVE LIFE OF FUND TOTAL RETURN WOULD HAVE
BEEN 12.10%.
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19960930 19961009 151627 S00000000000001
FA Midcap CL B SP Midcap 400 Index
00532 SP004
1996/02/20 10000.00 10000.00
1996/02/29 10170.00 10023.70
1996/03/31 10240.00 10143.79
1996/04/30 10730.00 10453.58
1996/05/31 11240.00 10594.91
1996/06/30 10730.00 10435.88
1996/07/31 10050.00 9729.90
1996/08/31 10720.00 10291.02
1996/09/30 11410.00 10739.71
1996/10/31 11110.00 10770.96
1996/11/30 11110.00 11377.69
IMATRL PRASUN SHR__CHT 19960930 19961009 151629 R00000000000123
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Mid Cap Fund - Class B on February 20, 1996,
when the fund started, and the applicable contingent deferred sales charge
was paid. As the chart shows, by November 30, 1996, the value of the
investment would have grown to $11,110 - a 11.10% increase on the initial
investment. For comparison, look at how the Standard & Poor's MidCap 400
Index did over the same period. With dividends reinvested, the same $10,000
investment would have grown to $11,378 - a 13.78% 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)
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
Paced by the robust performance
of blue chip stocks, the U.S. stock
market posted strong gains for
the year that ended November
30, 1996. The Standard & Poor's
500 Index returned 27.86%
during the period - well above its
long-term average of about 12%.
The stock market spent much of
the past year breaking price and
trading volume records. Solid
corporate earnings reports, large
cash inflows into mutual funds,
widespread optimism and a
generally favorable interest rate
environment propelled share
prices higher. Large capitalization
stocks thrived as investors
sought their lower volatility and
higher degree of liquidity over
smaller cap stocks in an
environment where it was
sometimes difficult to discern the
health of the economy. The Dow
Jones Industrial Average closed
above 6500 for the first time in
November. While short-term
confusion over the direction of
interest rates created a volatile
backdrop in the summer months,
stocks rallied again when the
Federal Reserve Board left
short-term interest rates
unchanged and it appeared
inflation would not be an issue for
the remainder of 1996.
Smaller-company stocks posted
strong gains at the beginning of
1996, but trended downward in
the spring and summer because
their earnings tend to be more
affected by the higher borrowing
costs brought on by higher rates.
When interest rate fears
subsided, these stocks
rebounded, only to fade toward
the end of the period due to
earnings concerns and a general
flight to quality.
An interview with Jennifer Uhrig, Portfolio Manager of Fidelity Advisor Mid
Cap Fund
Q. HOW DID THE FUND PERFORM, JENNIFER?
A. The fund performed well in the period from its inception on February 20,
1996 through November 30, 1996, outperforming its index. During this
period, the fund's Class A, Class T and Class B shares returned 17.00%,
17.00%, and 16.10% respectively. The Standard & Poor's MidCap 400 Index
returned 13.78% during the same period.
Q. WHAT WERE THE KEY FACTORS IN THE FUND'S PERFORMANCE?
A. The fund was relatively underweighted in technology stocks compared to
the index early in the period, which allowed me to escape the severe
correction in Nasdaq and technology stocks during the summer. As the
correction was ending, I became more aggressive, buying technology stocks
in August and September. These investments helped the fund quite a bit. I
had about 16% invested in the technology sector six months ago, and over
22% when the period ended on November 30. So, I didn't participate as much
in the down side of technology during the summer correction but managed to
do well in technology's upside later in the reporting period, particularly
in September. The fund's investments in semiconductor stocks, such as
Novellus Systems, worked out well, as did its holdings in networking
stocks, including 3Com.
Q. THE FUND'S INVESTMENTS IN THE DURABLES SECTOR DECREASED RATHER
SIGNIFICANTLY TO 4% FROM ALMOST 10% SIX MONTHS AGO? WHY IS THAT?
A. In the durables sector, I moved out of a good portion of my holdings in
auto parts and furniture companies. These generally are cyclical businesses
that did well with the relatively strong economy over the period. Given the
uncertainty of the economy going forward, I thought it was the appropriate
time to sell a number of the holdings and take some profits.
Q. AT THE SAME TIME, THE FUND'S INVESTMENTS IN ENERGY STOCKS ROSE FROM
VIRTUALLY NOTHING SIX MONTHS AGO TO OVER 6% AT THE END OF THE PERIOD? WHAT
DID YOU SEE IN THIS SECTOR?
A. There's been an increase in drilling because oil and gas prices have
been stable and technological advances, such as the use of seismics, have
driven the price of drilling down. As a result, the return on drilling has
improved significantly. At the same time, drilling capacity hasn't
increased in over 10 years. Therefore, oil service companies and drillers
have seen their prices and utilization improve
dramatically, and it looks like this cycle may be sustainable for several
years. While I didn't own many energy companies during most of the period,
I did make investments, such as Halliburton, to bring the fund's sector
weighting up to that of the S&P MidCap 400 Index and would consider adding
further if the sector corrects.
Q. EVEN WITH THE FUND'S PERFORMANCE DURING THE PERIOD, THERE MUST HAVE BEEN
SOME DISAPPOINTMENTS . . .
A. That's true. While the financial sector did well during the period,
particularly in October, the fund was underweighted relative to the index
in this sector, which hurt performance. Some individual holdings also
didn't do as well as I had hoped. For example, Nucor's performance didn't
keep pace with the rest of the fund due to softness in the steel industry.
Q. WHAT'S YOUR OUTLOOK FOR THE NEXT SEVERAL MONTHS?
A. A lot depends on how well the economy does. Chances are it will be
slower in 1997 than it was in 1996 because consumers are so extended on
their borrowing, and that typically doesn't bode well for the economy. An
equally compelling argument for a slowdown is that we're five years into a
recovery, and that's a long time without a breather. I don't know if there
will be a recession, but I doubt the economy will take off from the level
it's at today. With a slower economy, you usually want to be in growth
stocks, and I'll attempt to move the fund more into that type of stock as
opportunities arise. Since the performance of growth stocks usually isn't
dependent on the strength of the overall economy, I believe many of these
stocks could do well even in a slower environment.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.
NOTE TO SHAREHOLDERS:
Effective January 7, 1997, Katherine Collins became manager of the fund.
Ms. Collins joined Fidelity in 1990, and has worked as an analyst and
manager.
FUND FACTS
GOAL: long-term growth of
capital by investing mainly in
equity securities of
companies with
medium-sized market
capitalizations
START DATE: February 20, 1996
SIZE: as of November 30, 1996
,
more than $224 million
MANAGER: Jennifer Uhrig,
since inception; joined
Fidelity in 1987
(checkmark)
JENNIFER UHRIG ON THE
AEROSPACE INDUSTRY:
"The aerospace industry is
interesting because, similar to
other cyclical sectors, it goes
through some big up and down
periods. The last big up-cycle,
during the mid-to-late `80s, was
the biggest up-cycle ever. That
cycle came to a screeching halt
with the Gulf War in 1991.
Since then, there have been five
down years for the industry,
leading up to 1996, which many
expect will be the trough year
where airplane deliveries
bottom out.
"Boeing, for instance, will
produce about 215 planes in
1996. In 1997, Boeing's
expected to produce about 350
planes - a huge ramp-up.
Trend line demand - the
average demand required to
replace planes taken out of
service as well as to
accommodate the growth in
flying - is about 500 planes.
Typically, cycles should go
beyond their trend line on the
upside, just as they go below
the trend line on the downside.
Therefore, production could go
beyond 500 planes, assuming
Boeing maintains its market
share, which would provide
for several years of growth.
"As a way to invest in this
sector, I bought stocks in
mid-cap companies that serve
as suppliers to the major aircraft
manufacturers. My reasoning is
that the suppliers should
benefit from an increase in
production of new planes, since
aircraft manufacturers typically
outsource half of their
business to parts suppliers. In
addition, these suppliers
consolidated during the down
cycle, which bodes well for
profitability."
INVESTMENT CHANGES
TOP TEN STOCKS AS OF NOVEMBER 30, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE STOCKS
6 MONTHS AGO
Cytec Industries, Inc. 2.0 2.1
Mirage Resorts, Inc. 1.5 1.1
UNUM Corp. 1.3 0.9
Hexcel Corp. 1.3 1.4
Thiokol Corp. 1.2 1.6
Novellus System, Inc. 0.9 0.0
Sun International Hotels Ltd. Ord. 0.9 0.7
Chesapeake Energy Corp. 0.9 0.0
Federal National Mortgage 0.8 0.3
Association
Household International, Inc. 0.8 2.0
TOP FIVE MARKET SECTORS AS OF NOVEMBER 30, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE MARKET SECTORS
6 MONTHS AGO
Technology 22.1 16.4
Finance 12.7 10.9
Basic Industries 8.5 8.5
Retail & Wholesale 6.6 9.5
Energy 6.5 0.5
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF NOVEMBER 30, 1996 * AS OF MAY 31, 1996 **
Row: 1, Col: 1, Value: 4.4
Row: 1, Col: 2, Value: 1.1
Row: 1, Col: 3, Value: 94.5
Row: 1, Col: 1, Value: 9.699999999999999
Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 90.3
Stocks 95.5%
Bonds 0.1%
Short-term
investments 4.4%
FOREIGN
INVESTMENTS 2.4%
Stocks 90.3%
Bonds 0.0%
Short-term
investments 9.7%
FOREIGN
INVESTMENTS 3.3%
*
**
INVESTMENTS NOVEMBER 30, 1996
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 95.5%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 3.9%
AEROSPACE & DEFENSE - 3.4%
BE Aerospace, Inc. (a) 58,700 $ 1,353,733
Banner Aerospace, Inc. (a) 128,400 1,059,300
Gulfstream Aerospace Corp. (a) 49,500 1,188,000
Precision Castparts Corp. 7,900 370,313
Rohr Industries, Inc. (a) 13,600 238,000
Thiokol Corp. 57,450 2,642,700
Wyman-Gordon Co. (a) 37,200 795,150
7,647,196
DEFENSE ELECTRONICS - 0.5%
Raytheon Co. 24,100 1,232,113
TOTAL AEROSPACE & DEFENSE 8,879,309
BASIC INDUSTRIES - 8.4%
CHEMICALS & PLASTICS - 3.2%
Carbide/Graphite Group, Inc. (The) (a) 8,200 157,850
Cytec Industries, Inc. (a) 124,000 4,588,000
International Specialty Products, Inc. (a) 22,600 274,025
McWhorter Technologies, Inc. (a) 28,000 556,500
Valspar Corp. 11,000 631,125
Witco Corp. 34,300 1,041,863
7,249,363
IRON & STEEL - 2.3%
Hexcel Corp. (a) 159,100 2,883,688
Nucor Corp. 30,950 1,682,906
SPS Technologies, Inc. (a) 7,900 495,725
Steel Dynamics, Inc. 3,700 67,525
5,129,844
METALS & MINING - 0.4%
IMCO Recycling, Inc. 40,800 668,100
Superior Telecom, Inc. (a) 6,400 120,000
788,100
PACKAGING & CONTAINERS - 0.2%
Gaylord Container Corp. Class A (a) 77,600 494,700
PAPER & FOREST PRODUCTS - 2.3%
Boise Cascade Corp. 33,500 1,038,500
Champion International Corp. 38,640 1,661,520
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
BASIC INDUSTRIES - CONTINUED
PAPER & FOREST PRODUCTS - CONTINUED
Jefferson Smurfit Corp. (a) 39,900 $ 538,650
Mail-Well, Inc. (a) 18,000 254,250
Mercer International, Inc. SBI 62,700 760,238
Stone Container Corp. 62,900 967,088
5,220,246
TOTAL BASIC INDUSTRIES 18,882,253
CONGLOMERATES - 0.4%
AlliedSignal, Inc. 9,400 688,550
GenCorp, Inc. 2,900 53,650
Kysor Industrial Corp. 2,200 67,100
809,300
CONSTRUCTION & REAL ESTATE - 1.3%
BUILDING MATERIALS - 0.4%
Sherwin-Williams Co. 15,900 902,325
CONSTRUCTION - 0.4%
DR Horton, Inc. (a) 16,200 170,100
Kaufman & Broad Home Corp. 34,050 438,394
McDermott (J. Ray) SA (a) 13,700 339,075
947,569
ENGINEERING - 0.5%
MasTec, Inc. (a) 24,300 1,148,175
TOTAL CONSTRUCTION & REAL ESTATE 2,998,069
DURABLES - 4.0%
AUTOS, TIRES, & ACCESSORIES - 2.0%
Eaton Corp. 15,000 1,038,750
Federal-Mogul Corp. 18,700 416,075
Intermet Corp. 43,100 576,463
Lear Corp. (a) 16,400 588,350
Modine Manufacturing Co. 25,000 621,875
PACCAR, Inc. 17,600 1,170,400
4,411,913
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
DURABLES - CONTINUED
CONSUMER DURABLES - 0.7%
Dupont Photomasks, Inc. (a) 37,400 $ 1,552,100
HOME FURNISHINGS - 0.6%
Furniture Brands International, Inc. (a) 66,300 820,463
Heilig-Meyers Co. 47,100 653,513
1,473,976
TEXTILES & APPAREL - 0.7%
Cutter & Buck, Inc. (a) 2,700 28,350
Fruit of the Loom, Inc. Class A (a) 1,800 64,125
Liz Claiborne, Inc. 21,800 923,775
North Face, Inc. (a) 22,500 497,813
1,514,063
TOTAL DURABLES 8,952,052
ENERGY - 6.5%
ENERGY SERVICES - 3.4%
Baker Hughes, Inc. 19,100 699,538
Energy Ventures, Inc. (a) 10,100 496,163
Falcon Drilling, Inc. (a) 14,100 564,000
Halliburton Co. 21,500 1,295,375
Marine Drilling Companies, Inc. (a) 22,300 354,013
Noble Drilling Corp. (a) 57,300 1,103,025
Tidewater, Inc. 26,700 1,168,125
Transocean Offshore, Inc. 7,300 439,825
Weatherford Enterra, Inc. (a) 45,900 1,399,950
7,520,014
OIL & GAS - 3.1%
Belco Oil & Gas Corp. (a) 40,600 1,157,100
Chesapeake Energy Corp. (a) 29,700 1,941,638
Cooper Cameron Corp. (a) 19,100 1,255,825
Flores & Rucks, Inc. (a) 16,900 830,213
National-Oilwell, Inc. (a) 20,500 579,125
Tosco Corp. 10,600 806,925
Vastar Resources, Inc. 12,100 485,513
7,056,339
TOTAL ENERGY 14,576,353
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
FINANCE - 12.7%
BANKS - 1.1%
Fleet Financial Group, Inc. 25,700 $ 1,423,138
U.S. Bancorp 23,600 1,008,900
2,432,038
CREDIT & OTHER FINANCE - 2.8%
Aames Financial Corp. 5,300 227,238
Associates First Capital Corp. 27,900 1,349,663
Beneficial Corp. 28,300 1,758,138
Green Tree Financial Corp. 29,700 1,243,688
Household International, Inc. 18,800 1,781,300
6,360,027
FEDERAL SPONSORED CREDIT - 2.1%
Federal Home Loan Mortgage Corporation 10,450 1,193,913
Federal National Mortgage Association 45,200 1,864,500
Student Loan Marketing Association 17,300 1,662,963
4,721,376
INSURANCE - 5.9%
AMBAC, Inc. 6,700 458,950
Allmerica Financial Corp. 14,200 470,375
American Bankers Insurance Group, Inc. 15,700 764,884
American Financial Group, Inc. 23,400 842,400
Arbatax International, Inc. (a) 68,050 452,533
Equitable of Iowa Companies 16,200 724,950
Life RE Corp. 27,900 1,028,813
MBIA, Inc. 12,500 1,264,063
MMI Companies, Inc. 7,900 243,913
Mercury General Corp. 2,200 125,400
Penncorp. Financial Group, Inc. 30,700 1,055,313
Progressive Corp. 13,600 948,600
Protective Life Corp. 24,300 987,188
Provident Companies, Inc. 19,600 820,750
Transatlantic Holdings, Inc. 1,900 151,288
UNUM Corp. 41,875 2,978,359
13,317,779
SECURITIES INDUSTRY - 0.8%
Legg Mason, Inc. 25,800 1,002,975
Lehman Brothers Holdings, Inc. 22,000 640,750
1,643,725
TOTAL FINANCE 28,474,945
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
HEALTH - 5.0%
DRUGS & PHARMACEUTICALS - 0.3%
Guilford Pharmaceuticals, Inc. (a) 3,100 $ 54,638
Thermotrex Corp. (a) 16,300 554,200
608,838
MEDICAL EQUIPMENT & SUPPLIES - 2.8%
AmeriSource Health Corp. Class A (a) 12,600 496,125
Biopsys Medical, Inc. (a) 40,000 950,000
Cardinal Health, Inc. 9,475 792,347
Cygnus, Inc. (a) 15,100 186,863
Heartport, Inc. (a) 14,500 333,500
McKesson Corp. 18,000 1,012,500
Mentor Corp. 11,300 309,338
St. Jude Medical, Inc. (a) 41,900 1,749,325
Sunrise Medical, Inc. (a) 30,600 439,875
6,269,873
MEDICAL FACILITIES MANAGEMENT - 1.9%
HEALTHSOUTH Rehabilitation Corp. (a) 42,100 1,584,013
Health Management Associates, Inc. Class A (a) 59,100 1,307,588
PacifiCare Health Systems, Inc. Class B (a) 17,800 1,477,400
4,369,001
TOTAL HEALTH 11,247,712
INDUSTRIAL MACHINERY & EQUIPMENT - 2.4%
ELECTRICAL EQUIPMENT - 0.2%
California Amplifier, Inc. (a) 46,100 374,563
INDUSTRIAL MACHINERY & EQUIPMENT - 1.3%
IDEX Corp. 5,800 228,375
PRI Automation, Inc. 4,000 191,000
UCAR International, Inc. (a) 30,100 1,140,038
Watkins-Johnson Co. 54,100 1,406,600
2,966,013
POLLUTION CONTROL - 0.9%
Allied Waste Industries, Inc. (a) 155,300 1,397,700
USA Waste Services, Inc. 19,900 641,775
2,039,475
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 5,380,051
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
MEDIA & LEISURE - 6.3%
BROADCASTING - 1.1%
American Telecasting, Inc. (a) 55,200 $ 434,700
Heartland Wireless Communications, Inc. (a) 42,700 517,738
Lin Television Corp. (a) 26,900 1,079,363
People's Choice TV Corp. (a) 58,500 372,938
Wireless One, Inc. (a) 1,600 15,000
2,419,739
LODGING & GAMING - 3.5%
Circus Circus Enterprises, Inc. (a) 27,650 1,009,225
Hilton Hotels Corp. 27,200 795,600
International Game Technology Corp. 9,500 185,250
Mirage Resorts, Inc. (a) 141,700 3,418,513
Red Roof Inns, Inc. (a) 30,500 480,375
Sun International Hotels Ltd. Ord. (a) 40,600 2,014,775
7,903,738
PUBLISHING - 1.3%
ACNielsen Corp. 19,100 331,863
Dun & Bradstreet Corp. 14,700 332,588
Hollinger International, Inc. Class A 159,500 1,754,500
Meredith Corp. 10,500 540,750
2,959,701
RESTAURANTS - 0.4%
Rainforest Cafe, Inc. (a) 29,800 871,650
TOTAL MEDIA & LEISURE 14,154,828
NONDURABLES - 3.1%
BEVERAGES - 0.4%
Coors (Adolph) Co. Class B 46,100 916,238
HOUSEHOLD PRODUCTS - 0.4%
Safeskin Corp. (a) 15,600 807,300
TOBACCO - 2.3%
Dimon, Inc. 39,300 815,475
Philip Morris Companies, Inc. 16,000 1,650,000
RJR Nabisco Holdings Corp. 43,200 1,382,400
Schweitzer-Mauduit International, Inc. 18,100 597,300
Universal Corp. 29,100 836,625
5,281,800
TOTAL NONDURABLES 7,005,338
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
PRECIOUS METALS - 1.0%
Bre-X Minerals Ltd. (a) 61,800 $ 954,785
Getchell Gold Corp. (a) 32,600 1,275,475
Greenstone Resources Ltd. (a) 8,200 109,370
2,339,630
RETAIL & WHOLESALE - 6.6%
APPAREL STORES - 2.5%
Abercrombie & Fitch Co. (a) 24,200 444,675
Charming Shoppes, Inc. (a) 129,700 664,713
Footstar, Inc. (a) 10,853 222,487
Gymboree Corp. (a) 31,400 887,050
Just for Feet, Inc. (a) 14,100 333,113
Loehmanns, Inc. (a) 34,100 1,027,263
Ross Stores, Inc. 29,200 1,485,550
Talbots, Inc. 20,100 580,388
5,645,239
DRUG STORES - 0.7%
CVS Corp. 37,700 1,550,413
GENERAL MERCHANDISE STORES - 0.9%
Hot Topic, Inc. (a) 31,200 585,000
Michaels Stores, Inc. (a) 13,400 134,000
Neiman-Marcus Group, Inc. (a) 39,300 1,365,675
2,084,675
GROCERY STORES - 0.9%
Food Lion, Inc.:
Class A 91,000 819,000
Class B 9,600 85,800
Whole Foods Market, Inc. (a) 46,200 1,045,275
1,950,075
RETAIL & WHOLESALE, MISCELLANEOUS - 1.6%
Circuit City Stores, Inc. 1,700 56,738
Fingerhut Companies, Inc. 43,700 546,250
Friedmans, Inc. Class A (a) 26,800 368,500
Gadzooks, Inc. (a) 44,400 1,265,400
Office Depot, Inc. (a) 21,200 413,400
Tiffany & Co., Inc. 25,040 923,350
3,573,638
TOTAL RETAIL & WHOLESALE 14,804,040
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
SERVICES - 4.6%
ADVERTISING - 0.7%
ADVO, Inc. 92,200 $ 1,164,025
Omnicom Group, Inc. 11,800 601,800
1,765,825
EDUCATIONAL SERVICES - 1.0%
Strayer Education, Inc. 58,300 1,311,750
Sylvan Learning Systems (a) 32,700 854,288
2,166,038
SERVICES - 2.9%
CDI Corp. (a) 31,600 920,350
Craig (Jenny), Inc. (a) 89,400 826,950
Lawyers Title Corp. 63,700 1,210,300
Medaphis Corp. (a) 74,600 773,975
Medpartners, Inc. (a) 41,772 950,313
National Education Corp. (a) 54,900 775,463
Regis Corp. 42,900 1,072,500
6,529,851
TOTAL SERVICES 10,461,714
TECHNOLOGY - 22.1%
COMMUNICATIONS EQUIPMENT - 2.4%
Ascend Communications, Inc. (a) 25,000 1,778,125
Aspect Telecommunications Corp. (a) 21,800 1,188,100
Dynatech Corp. (a) 19,350 904,613
Tellabs, Inc. (a) 18,800 747,300
3Com Corp. (a) 10,500 788,813
5,406,951
COMPUTER SERVICES & SOFTWARE - 8.6%
Advent Software, Inc. (a) 11,600 371,200
Baan Co. NV (a) 19,200 684,000
Barra, Inc. (a) 33,600 873,600
CUC International, Inc. (a) 60,300 1,590,413
Cadence Design Systems, Inc. (a) 13,600 542,300
CompUSA, Inc. (a) 26,000 1,170,000
Computer Learning Centers, Inc. (a) 41,900 1,047,500
Equifax, Inc. 30,000 982,500
Forte Software, Inc. (a) 16,400 520,700
GT Interactive Software, Inc. (a) 58,100 682,675
Health Systems Design Corp. (a) 45,500 364,000
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TECHNOLOGY - CONTINUED
COMPUTER SERVICES & SOFTWARE - CONTINUED
International Network Services (a) 100 $ 3,200
Keane, Inc. (a) 22,500 1,189,688
McAfee Associates, Inc. (a) 18,600 888,150
Metromail Corp. (a) 20,300 469,438
Midway Games, Inc. (a) 6,700 151,588
Netscape Communications Corp. (a) 15,500 866,063
PeopleSoft, Inc. (a) 18,600 1,701,900
Rational Software Corp. (a) 8,200 289,050
Sabre Group Holdings, Inc. Class A (a) 45,300 1,325,025
Scopus Technology, Inc. (a) 19,000 710,125
Spectrum Holobyte, Inc. (a) 109,100 545,500
SunGard Data Systems, Inc. (a) 13,100 550,200
Sybase, Inc. (a) 43,200 761,400
Trusted Information Systems, Inc. (a) 300 3,600
Vantive Corp. (a) 31,200 1,076,400
19,360,215
COMPUTERS & OFFICE EQUIPMENT - 3.5%
Adaptec, Inc. (a) 24,200 901,450
Bay Networks, Inc. (a) 48,200 1,289,350
Bell & Howell Co. (a) 2,200 57,200
Compaq Computer Corp. (a) 7,900 626,075
Comverse Technology, Inc. (a) 5,500 187,000
Diebold, Inc. 7,600 453,150
Exabyte Corp. (a) 56,600 820,700
Kronos, Inc. (a) 16,550 471,675
SCI Systems, Inc. (a) 28,100 1,482,275
Sun Microsystems, Inc. (a) 13,900 809,675
Tech Data Corp. (a) 23,500 705,000
Wang Laboratories, Inc. (a) 2,700 57,038
7,860,588
ELECTRONIC INSTRUMENTS - 3.2%
Applied Materials, Inc. 22,600 861,625
GenRad, Inc. (a) 32,900 727,913
KLA Instruments Corp. 10,200 362,100
Kulicke & Soffa Industries, Inc. (a) 40,000 810,000
Lam Research Corp. (a) 40,700 1,460,113
Novellus System, Inc. (a) 36,000 2,070,000
Teradyne, Inc. (a) 8,200 193,725
Varian Associates, Inc. 13,800 679,650
7,165,126
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TECHNOLOGY - CONTINUED
ELECTRONICS - 4.1%
Actel Corp. (a) 32,500 $ 715,000
Cirrus Logic, Inc. (a) 33,200 651,550
Etec Systems, Inc. 1,300 38,188
Integrated Device Technology, Inc. (a) 62,200 773,613
Linear Technology Corp. 35,700 1,682,363
Maxim Integrated Products, Inc. (a) 15,400 714,175
OnTrak Systems, Inc. (a) 10,000 180,000
Solectron Corp. (a) 14,200 830,700
Speedfam International, Inc. (a) 82,400 1,678,900
Tencor Instruments (a) 60,900 1,621,463
Triumph Group, Inc. (a) 11,500 301,875
9,187,827
PHOTOGRAPHIC EQUIPMENT - 0.3%
Imation Corp. (a) 24,700 747,175
Polaroid Corp. 300 12,788
759,963
TOTAL TECHNOLOGY 49,740,670
TRANSPORTATION - 1.8%
RAILROADS - 0.8%
Wisconsin Central Transportation Corp. 43,600 1,776,700
SHIPPING - 0.2%
Kirby Corp. (a) 23,200 461,100
TRUCKING & FREIGHT - 0.8%
Consolidated Freightways, Inc. 37,100 895,038
M.S. Carriers, Inc. (a) 16,100 305,900
Yellow Corp. (a) 42,400 636,000
1,836,938
TOTAL TRANSPORTATION 4,074,738
UTILITIES - 5.4%
CELLULAR - 0.6%
Mobile Telecommunications Technologies, Inc. (a) 17,900 209,206
Nextel Communications, Inc. Class A (a) 33,800 507,000
360 Degrees Communications Co. (a) 30,600 726,750
1,442,956
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
UTILITIES - CONTINUED
TELEPHONE SERVICES - 4.8%
Ameritech Corp. 29,100 $ 1,713,263
BellSouth Corp. 22,000 888,250
Cincinnati Bell, Inc. 4,800 286,200
GTE Corp. 31,400 1,409,075
LCI International, Inc. (a) 38,700 1,262,588
MFS Communications, Inc. 31,900 1,539,175
NYNEX Corp. 31,700 1,470,088
Pacific Telesis Group 39,300 1,454,100
SBC Communications, Inc. 14,700 773,588
10,796,327
TOTAL UTILITIES 12,239,283
TOTAL COMMON STOCKS
(Cost $199,843,565) 215,020,285
CONVERTIBLE BONDS - 0.1%
MOODY'S PRINCIPAL
RATINGS AMOUNT
BASIC INDUSTRIES - 0.1%
IRON & STEEL - 0.1%
Hexcel Corp. 7%, 8/1/03 B2 $ 100,000 130,750
RETAIL & WHOLESALE - 0.0%
APPAREL STORES - 0.0%
Charming Shoppers, Inc. 7 1/2%, 7/15/06 B2 40,000 40,000
TOTAL CONVERTIBLE BONDS
(Cost $140,000) 170,750
CASH EQUIVALENTS - 4.4%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.71%, dated
11/29/96 due 12/2/96 $ 9,827,674 9,823,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $209,806,565) $ 225,014,035
LEGEND
1. Non-income producing
INCOME TAX INFORMATION
At November 30, 1996, the aggregate cost of investment securities for
income tax purposes was $210,255,252. Net unrealized appreciation
aggregated $14,758,783, of which $25,022,383 related to appreciated
investment securities and $10,263,600 related to depreciated investment
securities.
The fund hereby designates approximately $94,000 as a capital gain dividend
for the purpose of the dividend paid deduction.
The fund intends to elect to defer to its fiscal year ending November 30,
1997 approximately $867,000 of losses recognized during the period November
1, 1996 to November 30, 1996.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
NOVEMBER 30, 1996
ASSETS
Investment in securities, at value (including repurchase $ 225,014,035
agreements of $9,823,000) (cost $209,806,565) -
See accompanying schedule
Cash 40,833
Receivable for investments sold 1,471,395
Receivable for fund shares sold 505,637
Dividends receivable 142,806
Interest receivable 3,517
Prepaid expenses 15,091
TOTAL ASSETS 227,193,314
LIABILITIES
Payable for investments purchased $ 2,035,563
Payable for fund shares redeemed 207,212
Accrued management fee 103,124
Distribution fees payable 101,568
Other payables and accrued expenses 140,140
TOTAL LIABILITIES 2,587,607
NET ASSETS $ 224,605,707
Net Assets consist of:
Paid in capital $ 206,742,828
Accumulated net investment (loss) (60,692)
Accumulated undistributed net realized gain (loss) on 2,716,101
investments and foreign currency transactions
Net unrealized appreciation (depreciation) on 15,207,470
investments
NET ASSETS $ 224,605,707
CALCULATION OF MAXIMUM OFFERING PRICE $11.70
CLASS A:
NET ASSET VALUE and redemption price per share
($1,239,305 (divided by) 105,961 shares)
Maximum offering price per share (100/94.75 of $11.70) $12.35
CLASS B: $11.61
NET ASSET VALUE and offering price per share
($32,726,738 (divided by) 2,817,836 shares) A
CLASS T: $11.70
NET ASSET VALUE and redemption price per share
($187,039,655 (divided by) 15,988,394 shares)
Maximum offering price per share (100/96.50 of $11.70) $12.12
INSTITUTIONAL CLASS: $11.70
NET ASSET VALUE, offering price and redemption price per
share ($3,600,009 (divided by) 307,653 shares)
</TABLE>
A REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
FEBRUARY 20, 1996 (COMMENCEMENT OF OPERATIONS)
TO NOVEMBER 30, 1996
INVESTMENT INCOME $ 734,748
Dividends
Interest 585,591
TOTAL INCOME 1,320,339
EXPENSES
Management fee $ 644,430
Transfer agent fees 534
Class A
Class B 36,945
Class T 229,596
Institutional Class 3,174
Distribution fees 408
Class A
Class B 137,775
Class T 460,775
Accounting fees and expenses 65,738
Non-interested trustees' compensation 375
Custodian fees and expenses 32,066
Registration fees 10,854
Class A
Class B 56,065
Class T 116,822
Institutional Class 41,392
Audit 24,968
Legal 78
Miscellaneous 4,301
Total expenses before reductions 1,866,296
Expense reductions (45,012) 1,821,284
NET INVESTMENT INCOME (LOSS) (500,945)
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 2,999,620
Futures contracts 156,734 3,156,354
Change in net unrealized appreciation (depreciation) on 15,207,470
investment securities
NET GAIN (LOSS) 18,363,824
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 17,862,879
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C>
FEBRUARY 20, 1996
(COMMENCEMENT
OF OPERATIONS) TO
NOVEMBER 30, 1996
INCREASE (DECREASE) IN NET ASSETS
Operations $ (500,945)
Net investment income (loss)
Net realized gain (loss) 3,156,354
Change in net unrealized appreciation (depreciation) 15,207,470
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 17,862,879
Share transactions - net increase (decrease) 206,742,828
TOTAL INCREASE (DECREASE) IN NET ASSETS 224,605,707
NET ASSETS
Beginning of period -
End of period (including accumulated net investment loss of $60,692) $ 224,605,707
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
SEPTEMBER 3, 1996
(COMMENCEMENT
OF OPERATIONS) TO
NOVEMBER 30,
1996
SELECTED PER-SHARE DATA D
Net asset value, beginning of period $ 10.74
Income from Investment Operations
Net investment income (loss) (.01)
Net realized and unrealized gain (loss) .97
Total from investment operations .96
Net asset value, end of period $ 11.70
TOTAL RETURN B, C 8.94%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 1,239
Ratio of expenses to average net assets 1.56% A,
E
Ratio of net investment income (loss) to average net assets (.33)%
A
Portfolio turnover 101% A
Average commission rate F $ .0382
A ANNUALIZED
B THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURN DOES NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS
OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE
BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
F A FUND IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM
PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED
IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES
MAY DIFFER.
FINANCIAL HIGHLIGHTS - CLASS B
FEBRUARY 20, 1996
(COMMENCEMENT
OF OPERATIONS) TO
NOVEMBER 30,
1996
SELECTED PER-SHARE DATA D
Net asset value, beginning of period $ 10.00
Income from Investment Operations
Net investment income (loss) (.10)
Net realized and unrealized gain (loss) 1.71
Total from investment operations 1.61
Net asset value, end of period $ 11.61
TOTAL RETURN B, C 16.10%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 32,727
Ratio of expenses to average net assets 2.38% A
Ratio of expenses to average net assets after expense reductions 2.37% A,
E
Ratio of net investment income (loss) to average net assets (1.14)%
A
Portfolio turnover 101% A
Average commission rate F $ .0382
A ANNUALIZED
B THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURN DOES NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE AND
FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES (SEE NOTE 5 OF
NOTES TO FINANCIAL STATEMENTS).
F A FUND IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM
PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED
IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES
MAY DIFFER.
FINANCIAL HIGHLIGHTS - CLASS T
FEBRUARY 20, 1996
(COMMENCEMENT
OF OPERATIONS) TO
NOVEMBER 30,
1996
SELECTED PER-SHARE DATA D
Net asset value, beginning of period $ 10.00
Income from Investment Operations
Net investment income (loss) (.03)
Net realized and unrealized gain (loss) 1.73
Total from investment operations 1.70
Net asset value, end of period $ 11.70
TOTAL RETURN B, C 17.00%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 187,040
Ratio of expenses to average net assets 1.60% A
Ratio of net investment income (loss) to average net assets (.37)%
A
Portfolio turnover 101% A
Average commission rate E $ .0382
A ANNUALIZED
B THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN.
C TOTAL RETURN DOES NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS
OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E A FUND IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM
PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED
IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES
MAY DIFFER.
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
FEBRUARY 20, 1996
(COMMENCEMENT
OF OPERATIONS) TO
NOVEMBER 30,
1996
SELECTED PER-SHARE DATA D
Net asset value, beginning of period $ 10.00
Income from Investment Operations
Net investment income (loss) (.02)
Net realized and unrealized gain (loss) 1.72
Total from investment operations 1.70
Net asset value, end of period $ 11.70
TOTAL RETURN B, C 17.00%
Ratios and Supplemental Data
Net assets, end of period (000 omitted) $ 3,600
Ratio of expenses to average net assets 1.50% A,
E
Ratio of net investment income (loss) to average net assets (.27)%
A
Portfolio turnover 101% A
Average commission rate F $ .0382
A ANNUALIZED
B THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURN FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE
BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS)
F A FUND IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM
PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED
IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES
MAY DIFFER.
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1996
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Mid Cap Fund (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, Class B, Class T, and Institutional Class shares,
each of which has equal rights as to assets and voting privileges. Each
class has exclusive voting rights with respect to its distribution plan.
The fund commenced sale of a new Class A of shares on September 3, 1996. On
this date, the original Class A was renamed Class T. Investment income,
realized and unrealized capital gains and losses, the common expenses of
the fund, and certain fund-level expense reductions are allocated on a pro
rata basis to each class based on the relative net assets of each class to
the total net assets of the fund. Each class of shares differs in its
respective distribution, transfer agent, registration, and certain other
class-specific fees, expenses, and expense reductions.
The financial statements have been prepared in conformity with generally
accepted accounting principles which permit management to make certain
estimates and assumptions at the date of the financial statements. The
following summarizes the significant accounting policies of the fund:
SECURITY VALUATION. Securities 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 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 with remaining maturities of sixty days or less for which
quotations are not readily available are valued at amortized cost or
original cost plus accrued interest, both of which approximate current
value.
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. Income receipts
and expense payments are translated into U.S. dollars at the prevailing
exchange rate on the respective dates of the transactions. Purchases and
sales of securities are translated into U.S. dollars at the contractual
currency exchange rates established at the time of each trade.
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, and the difference between
the amount of net investment income accrued and the U.S. dollar amount
actually received. The effects
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
FOREIGN CURRENCY TRANSLATION -
CONTINUED
of changes in foreign currency exchange rates on investments in securities
are included with the net realized and unrealized gain or loss on
investment securities.
INCOME TAXES. The fund intends to qualify as a regulated investment company
under Subchapter M of the Internal Revenue Code. By so qualifying, the fund
will not be subject to income taxes to the extent that it distributes
substantially all of its taxable income for its fiscal year. The schedule
of investments includes information regarding income taxes under the
caption "Income Tax Information."
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. Non-cash dividends included in dividend income, if any,
are recorded at the fair market value of the securities received. Interest
income, which includes accretion of original issue discount, 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.
PREPAID EXPENSES. Fidelity Management & Research Company (FMR) bears all
organizational expenses except for registering
and qualifying each class and shares of each class for distribution under
federal and state securities law. These expenses are borne by each class
and amortized over one year.
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 pro rata 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, which may result in distribution
reclassifications, are primarily due to differing treatments for passive
foreign investment companies (PFIC), non-taxable dividends and losses
deferred due to wash sales and excise tax regulations. The fund also
utilized earnings and profits distributed to shareholders on redemption of
shares as a part of the dividends paid deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect the per-share allocation between net investment income and realized
and unrealized gain (loss). Accumulated net investment loss and accumulated
undistributed net realized gain (loss) on investments and foreign currency
transactions may include temporary book and tax basis differences that will
reverse in a subsequent period. Any taxable income or gain remaining at
fiscal year end is distributed in the following year.
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign securities. Losses may
arise from changes in the value of the foreign currency or if the
counterparties do not perform under the contracts' terms. The U.S. dollar
value of foreign currency contracts is determined using contractual
currency exchange rates established at the time of each trade. The cost of
the foreign currency contracts is included in the cost basis of the
associated investment.
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 for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
Securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are
marked-to-market daily and maintained at a value at least equal to the
principal amount of the repurchase agreement (including accrued interest).
FMR, the fund's investment adviser, is responsible for determining that the
value of the underlying securities remains in accordance with the market
value requirements stated above.
FUTURES CONTRACTS. The fund may use futures contracts to manage its
exposure to the stock and bond markets and to fluctuations in interest
rates and currency values. Buying futures tends to increase the fund's
exposure to the underlying instrument, while selling futures tends to
decrease the fund's exposure to the underlying instrument or hedge other
fund investments. Losses may arise from changes in the value of the
underlying instruments, if there is an illiquid secondary market for the
contracts, or if the counterparties do not perform under the contracts'
terms. Futures contracts are valued at the settlement price established
each day by the board of trade or exchange on which they are traded.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $297,571,199 and $101,087,145, respectively.
The market value of futures contracts opened and closed during the period
amounted to $14,630,558 and $14,787,292, 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 .2500% to .5200% for the period. In the event that these
rates were lower than the contractual rates in effect during the period,
FMR voluntarily implemented the above rates, as they resulted in the same
or a lower management fee. The annual individual fund fee rate is .30%. For
the period, the management fee was equivalent to an annualized rate of .60%
of average net assets.
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the 1940
Act, the Trustees have adopted separate distribution plans with respect to
the fund's Class A shares (Class A Plan), Class B shares (Class B Plan),
Class T shares (Class T Plan), and Institutional Class shares (collectively
referred to as "the Plans"). Under the Class A, Class B, and Class T Plans,
the fund pays Fidelity Distributors Corporation (FDC), an affiliate of FMR,
a distribution and service fee. This fee is based on annual rates of .25%,
1.00% (of which .75% represents a distribution fee and .25% represents a
shareholder service fee), and .50% of the average net assets of the Class
A, Class B
and Class T shares, respectively. For the period, the fund paid FDC $408,
$137,775, and $460,775 under the Class A, Class B, and Class T Plans, of
which $408, $34,445, and $460,775 were paid to securities dealers, banks
and other financial institutions for the distribution of Class A, Class B,
and Class T shares, respectively, and providing shareholder support
services.
Under the Plans, FMR or FDC may use its resources to pay administrative and
promotional expenses related to the sale of the fund's Class A, Class B,
Class T, and Institutional Class shares. The Plans also authorize payments
to third parties that assist in the sale of the fund's shares or render
shareholder support services.
SALES LOAD. FDC receives a front-end sales charge of up to 5.25% and 3.50%
for selling Class A and Class T shares of the fund, respectively, and the
proceeds of a contingent deferred sales charge levied on Class B share
redemptions occurring within five years of purchase. The Class B charge is
based on declining rates which range from 4% to 1% of the lesser of the
cost of shares at the initial date of purchase or the net asset value of
the redeemed shares, excluding any reinvested dividends and capital gains.
Effective January 2, 1997, the Board of Trustees approved a revised Class B
contingent deferred sales charge for shares purchased on or after January
2, 1997. Under the revised arrangement, FDC receives the proceeds of a
contingent deferred sales charge levied on Class B share redemptions
occurring within six years of purchase. The Class B charge is based on
declining rates which range from 5% to 1%
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
SALES LOAD - CONTINUED
of the lesser of the cost of shares at the initial date of the purchase or
the net asset value of the redeemed shares, excluding any reinvested
dividends and capital gains.
For the period, FDC received sales charges of $25,943 and $1,836,711 on
sales of Class A and Class T shares of the fund, of which $21,509 and
$1,532,192 were paid to securities dealers, banks, and other financial
institutions. FDC also received contingent deferred sales charges of
$20,844 on Class B share redemptions from the fund. When Class B shares are
sold, FDC pays commissions from its own resources to dealers through which
the sales are made.
TRANSFER AGENT FEES. Fidelity Investments Institutional Operations Company
(FIIOC), an affiliate of FMR, is the transfer, dividend disbursing, and
shareholder servicing agent for the fund's Class A, Class B, and
Institutional Class Shares, while State Street Bank and Trust Company
(State Street) (collectively, with FIIOC, referred to as the Transfer
Agents) acts in that capacity for the fund's Class T shares. The Transfer
Agents receive account fees and asset-based fees that vary according to
account size and type of account of the shareholders of the respective
classes of the fund. With respect to the Class T shares, State Street has
delegated certain transfer, dividend disbursing, 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. For the period, the transfer agent fees
were equivalent to annualized rates of .33%, .27%, .25%, and .16% of the
average net assets of Class A, Class B, Class T, and Institutional Class,
respectively.
Effective January 1, 1997, FIIOC will replace State Street as the transfer
agent for the fund's Class T shares.
ACCOUNTING FEES. Fidelity Service Co. (FSC), an affiliate of FMR, maintains
the fund's accounting records. The fee is based on the level of average net
assets for the month plus out-of-pocket expenses.
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 $72,019 for the period.
5. EXPENSE REDUCTIONS.
FMR voluntarily agreed to reimburse operating expenses (excluding interest,
taxes, brokerage commissions and extraordinary expenses) above annual rates
of 1.75%, 2.50%, 2.00%, and 1.50% of average net assets for Class A, Class
B, Class T, and Institutional Class, respectively. For the period, the
reimbursement reduced expenses by $9,723 and $33,668 for Class A and
Institutional Class, respectively.
FMR has also 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 $150 under this arrangement.
5. EXPENSE REDUCTIONS -
CONTINUED
In addition, the fund has entered into an arrangement with its custodian
whereby interest earned on uninvested cash balances was used to offset a
portion of expenses. During the period, the fund's custodian fees were
reduced by $1,471 under the custodian arrangement.
6. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:
SHARES DOLLARS
PERIOD ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30,
1996 A, B 1996 A, B
CLASS A 106,629 $ 1,202,595
Shares sold
Shares redeemed (668) (7,639)
Net increase (decrease) 105,961 $ 1,194,956
CLASS B 2,990,066 $ 32,264,842
Shares sold
Shares redeemed (172,230) (1,849,188)
Net increase (decrease) 2,817,836 $ 30,415,654
CLASS T 19,947,368 $ 215,644,919
Shares sold
Shares redeemed (3,958,974) (43,721,153)
Net increase (decrease) 15,988,394 $ 171,923,766
INSTITUTIONAL CLASS 310,259 $ 3,236,523
Shares sold
Shares redeemed (2,606) (28,071)
Net increase (decrease) 307,653 $ 3,208,452
A SHARE TRANSACTIONS FOR CLASS A ARE FOR THE PERIOD SEPTEMBER 3, 1996
(COMMENCEMENT OF SALE OF SHARES) TO NOVEMBER 30, 1996.
B SHARE TRANSACTIONS FOR CLASS B, CLASS T AND INSTITUTIONAL CLASS ARE FOR
THE PERIOD FEBRUARY 20, 1996 (COMMENCEMENT OF SALE OF SHARES) TO NOVEMBER
30, 1996.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Advisor Series I and the Shareholders of
Fidelity Advisor Mid Cap Fund:
We have audited the accompanying statement of assets and liabilities of
Fidelity Advisor Series I: Fidelity Advisor Mid Cap Fund, including the
schedule of portfolio investments, as of November 30, 1996, and the related
statement of operations, the statement of changes in net assets, and the
financial highlights of Class A, Class B, Class T and Institutional Class
for the periods indicated therein. These financial statements and financial
highlights are the responsibility of the fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of November 30, 1996 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 Mid Cap Fund as of November
30, 1996, the results of its operations, the changes in its net assets. and
the financial highlights of Class A, Class B, Class T and Institutional
Class for the periods indicated therein, in conformity with generally
accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
January 10, 1997
DISTRIBUTIONS
The Board of Trustees of Fidelity Advisor Mid Cap Fund voted to pay to
shareholders of record at the opening of business on record date, the
following distributions derived from capital gains realized from sales of
portfolio securities, and dividends derived from net investment income:
PAY DATE RECORD DATE DIVIDENDS CAPITAL GAINS
Class A 12/23/96 12/20/96 $.01 $.20
Class B 12/23/96 12/20/96 $- $.15
Class T 12/23/96 12/20/96 $- $.18
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.)
Inc., London, England
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
William J. Hayes, Vice President
Jennifer Uhrig, Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
Robert H. Morrison, Manager,
Security Transactions
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
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 *
ADVISORY BOARD
William O. McCoy
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
State Street Bank and Trust Company
Boston, MA - Class T
Fidelity Investments Institutional
Operations Company
Boston, MA - Class A & Class B
CUSTODIAN
Brown Brothers Harriman & Co.
Boston, MA
FOCUS FUNDS
Fidelity Advisor Consumer
Industries Fund
Fidelity Advisor Cyclical
Industries Fund
Fidelity Advisor Financial
Services Fund
Fidelity Advisor Health Care Fund
Fidelity Advisor Natural
Resources Fund
Fidelity Advisor Technology Fund
Fidelity Advisor Utilities Growth Fund
GROWTH FUNDS
Fidelity Advisor TechnoQuant(trademark)
Growth Fund
Fidelity Advisor Overseas Fund
Fidelity Advisor Mid Cap Fund
Fidelity Advisor Equity Growth Fund
Fidelity Advisor Growth
Opportunities Fund
Fidelity Advisor Strategic
Opportunities Fund
Fidelity Advisor Large Cap Fund
GROWTH AND INCOME FUNDS
Fidelity Advisor Growth & Income Fund
Fidelity Advisor Equity Income Fund
Fidelity Advisor Balanced Fund
TAXABLE INCOME FUNDS
Fidelity Advisor Emerging Markets Income Fund
Fidelity Advisor High Yield Fund
Fidelity Advisor Strategic Income Fund
Fidelity Advisor Government Investment Fund
Fidelity Advisor Intermediate Bond Fund
Fidelity Advisor Short Fixed-Income Fund
MUNICIPAL FUNDS
Fidelity Advisor High Income
Municipal Fund
Fidelity Advisor Municipal Bond Fund
Fidelity Advisor Intermediate Municipal Income Fund
Fidelity Advisor Short-Intermediate Municipal Income Fund
STATE MUNICIPAL FUNDS
Fidelity Advisor California Municipal Income Fund
Fidelity Advisor New York Municipal Income Fund
MONEY MARKET FUNDS
Daily Money Fund: Money Market Portfolio
Daily Money Fund: U.S. Treasury Portfolio
Daily Tax-Exempt Money Fund
(REGISTERED TRADEMARK)
(2_FIDELITY_LOGOS)FIDELITY ADVISOR
(registered trademark)
MID CAP
FUND - INSTITUTIONAL CLASS
ANNUAL REPORT
NOVEMBER 30, 1996
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over time.
FUND TALK 6 The manager's review of fund
performance, strategy and outlook.
INVESTMENT CHANGES 9 A summary of major shifts in the
fund's investments over the last six
months.
INVESTMENTS 10 A complete list of the fund's
investments with their market
values.
FINANCIAL STATEMENTS 22 Statements of assets and
liabilities, operations, and changes
in net assets, as well as financial
highlights.
NOTES 29 Notes to the financial statements.
REPORT OF INDEPENDENT 35 The auditors' opinion.
ACCOUNTANTS
DISTRIBUTIONS 36
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR DISTRIBUTION TO
PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN
EFFECTIVE
PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY ADVISOR FUND, INCLUDING CHARGES AND
EXPENSES,
CONTACT YOUR INVESTMENT PROFESSIONAL FOR A FREE PROSPECTUS. READ IT
CAREFULLY BEFORE YOU
INVEST OR SEND MONEY.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
Although stocks have managed to post solid returns throughout 1996, signs
of strength in the economy have led to inflation fears, causing some
uncertainty in bond markets so far this year. In 1995, both stock and bond
markets posted strong results, while the year before, stocks posted
below-average returns and bonds had one of the worst years in history.
These market ups and downs are a normal part of investing, and there are
some basic principles that are helpful for investors to remember in
different types of markets.
If you can leave your money invested over the long term, you can avoid the
results of the volatility that generally accompanies the stock market in
the short term, as we witnessed last year. You also can help to manage some
of the risks of investing through diversification. 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 types of 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. 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 or guaranteed 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. 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
ADVISOR MID CAP FUND - INSTITUTIONAL CLASS
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can look at
the total percentage change in value, the average annual percentage change,
or the growth of a hypothetical $10,000 investment. A class' total return
includes changes in share price, plus reinvestment of any dividends (or
income) and capital gains (the profits the fund earns when it sells
securities that have grown in value). If Fidelity had not reimbursed
certain class expenses, the total return would have been lower.
CUMULATIVE TOTAL RETURNS
PERIOD ENDED NOVEMBER 30, 1996 LIFE OF
FUND
Advisor Mid Cap - Institutional Class 17.00%
Standard & Poor's MidCap 400 13.78%
CUMULATIVE TOTAL RETURNS show Institutional Class' performance in
percentage terms over a set period - in this case, since the fund started
on February 20, 1996. For example, if you invested $1,000 in a fund that
had a 5% return over the past year, the value of your investment would be
$1,050. You can compare Institutional Class' returns to the performance of
the Standard & Poor's MidCap 400 Index - a widely recognized, unmanaged
index of 400 medium-capitalization stocks. This benchmark includes
reinvested dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
AVERAGE ANNUAL 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. Since the fund is less than a year old, we will
report these numbers in the next report.
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19961130 19961216 104355 S00000000000001
FA Mid Cap -CL I SP MidCap 400
00533 SP004
1996/02/20 10000.00 10000.00
1996/02/29 10180.00 10023.70
1996/03/31 10250.00 10143.79
1996/04/30 10750.00 10453.58
1996/05/31 11260.00 10594.91
1996/06/30 10770.00 10435.88
1996/07/31 10100.00 9729.90
1996/08/31 10780.00 10291.02
1996/09/30 11480.00 10739.71
1996/10/31 11180.00 10770.96
1996/11/29 11710.00 11377.69
IMATRL PRASUN SHR__CHT 19961130 19961216 104356 R00000000000013
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Mid Cap Fund - Institutional Class on February
20, 1996, when the fund started. As the chart shows, by November 30, 1996,
the value of the investment would have grown to $11,700 - a 17.00% increase
on the initial investment. For comparison, look at how the Standard &
Poor's MidCap 400 Index did over the same period. With dividends
reinvested, the same $10,000 investment would have grown to $11,378 - a
13.78% 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)
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
Paced by the robust performance
of blue chip stocks, the U.S. stock
market posted strong gains for
the year that ended November
30, 1996. The Standard & Poor's
500 Index returned 27.86%
during the period - well above its
long-term average of about 12%.
The stock market spent much of
the past year breaking price and
trading volume records. Solid
corporate earnings reports, large
cash inflows into mutual funds,
widespread optimism and a
generally favorable interest rate
environment propelled share
prices higher. Large capitalization
stocks thrived as investors
sought their lower volatility and
higher degree of liquidity over
smaller cap stocks in an
environment where it was
sometimes difficult to discern the
health of the economy. The Dow
Jones Industrial Average closed
above 6500 for the first time in
November. While short-term
confusion over the direction of
interest rates created a volatile
backdrop in the summer months,
stocks rallied again when the
Federal Reserve Board left
short-term interest rates
unchanged and it appeared
inflation would not be an issue for
the remainder of 1996.
Smaller-company stocks posted
strong gains at the beginning of
1996, but trended downward in
the spring and summer because
their earnings tend to be more
affected by the higher borrowing
costs brought on by higher rates.
When interest rate fears
subsided, these stocks
rebounded, only to fade toward
the end of the period due to
earnings concerns and a general
flight to quality.
An interview with Jennifer Uhrig, Portfolio Manager of Fidelity Advisor Mid
Cap Fund
Q. HOW DID THE FUND PERFORM, JENNIFER?
A. The fund performed well in the period from its inception on February 20,
1996 through November 30, 1996, outperforming its index. During this
period, the fund's Institutional Class shares returned 17.00%. The Standard
& Poor's MidCap 400 Index returned 13.78% during the same period.
Q. WHAT WERE THE KEY FACTORS IN THE FUND'S PERFORMANCE?
A. The fund was relatively underweighted in technology stocks compared to
the index early in the period, which allowed me to escape the severe
correction in Nasdaq and technology stocks during the summer. As the
correction was ending, I became more aggressive, buying technology stocks
in August and September. These investments helped the fund quite a bit. I
had about 16% invested in the technology sector six months ago, and over
22% when the period ended on November 30. So, I didn't participate as much
in the down side of technology during the summer correction but managed to
do well in technology's upside later in the reporting period, particularly
in September. The fund's investments in semiconductor stocks, such as
Novellus Systems, worked out well, as did its holdings in networking
stocks, including 3Com.
Q. THE FUND'S INVESTMENTS IN THE DURABLES SECTOR DECREASED RATHER
SIGNIFICANTLY TO 4% FROM ALMOST 10% SIX MONTHS AGO? WHY IS THAT?
A. In the durables sector, I moved out of a good portion of my holdings in
auto parts and furniture companies. These generally are cyclical businesses
that did well with the relatively strong economy over the period. Given the
uncertainty of the economy going forward, I thought it was the appropriate
time to sell a number of the holdings and take some profits.
Q. AT THE SAME TIME, THE FUND'S INVESTMENTS IN ENERGY STOCKS ROSE FROM
VIRTUALLY NOTHING SIX MONTHS AGO TO OVER 6% AT THE END OF THE PERIOD? WHAT
DID YOU SEE IN THIS SECTOR?
A. There's been an increase in drilling because oil and gas prices have
been stable and technological advances, such as the use of seismics, have
driven the price of drilling down. As a result, the return on drilling has
improved significantly. At the same time, drilling capacity hasn't
increased in over 10 years. Therefore, oil service companies and drillers
have seen their prices and utilization improve
dramatically, and it looks like this cycle may be sustainable for several
years. While I didn't own many energy companies during most of the period,
I did make investments, such as Halliburton, to bring the fund's sector
weighting up to that of the S&P MidCap 400 Index and would consider adding
further if the sector corrects.
Q. EVEN WITH THE FUND'S PERFORMANCE DURING THE PERIOD, THERE MUST HAVE BEEN
SOME DISAPPOINTMENTS . . .
A. That's true. While the financial sector did well during the period,
particularly in October, the fund was underweighted relative to the index
in this sector, which hurt performance. Some individual holdings also
didn't do as well as I had hoped. For example, Nucor's performance didn't
keep pace with the rest of the fund due to softness in the steel industry.
Q. WHAT'S YOUR OUTLOOK FOR THE NEXT SEVERAL MONTHS?
A. A lot depends on how well the economy does. Chances are it will be
slower in 1997 than it was in 1996 because consumers are so extended on
their borrowing, and that typically doesn't bode well for the economy. An
equally compelling argument for a slowdown is that we're five years into a
recovery, and that's a long time without a breather. I don't know if there
will be a recession, but I doubt the economy will take off from the level
it's at today. With a slower economy, you usually want to be in growth
stocks, and I'll attempt to move the fund more into that type of stock as
opportunities arise. Since the performance of growth stocks usually isn't
dependent on the strength of the overall economy, I believe many of these
stocks could do well even in a slower environment.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.
NOTE TO SHAREHOLDERS:
Effective January 7, 1997, Katherine Collins became manager of the fund.
Ms. Collins joined Fidelity in 1990, and has worked as an analyst and
manager.
FUND FACTS
GOAL: long-term growth of
capital by investing mainly in
equity securities of
companies with
medium-sized market
capitalizations
START DATE: February 20, 1996
SIZE: as of November 30, 1996
,
more than $224 million
MANAGER: Jennifer Uhrig,
since inception; joined
Fidelity in 1987
(checkmark)
JENNIFER UHRIG ON THE
AEROSPACE INDUSTRY:
"The aerospace industry is
interesting because, similar to
other cyclical sectors, it goes
through some big up and down
periods. The last big up-cycle,
during the mid-to-late `80s, was
the biggest up-cycle ever. That
cycle came to a screeching halt
with the Gulf War in 1991.
Since then, there have been five
down years for the industry,
leading up to 1996, which many
expect will be the trough year
where airplane deliveries
bottom out.
"Boeing, for instance, will
produce about 215 planes in
1996. In 1997, Boeing's
expected to produce about 350
planes - a huge ramp-up.
Trend line demand - the
average demand required to
replace planes taken out of
service as well as to
accommodate the growth in
flying - is about 500 planes.
Typically, cycles should go
beyond their trend line on the
upside, just as they go below
the trend line on the downside.
Therefore, production could go
beyond 500 planes, assuming
Boeing maintains its market
share, which would provide
for several years of growth.
"As a way to invest in this
sector, I bought stocks in
mid-cap companies that serve
as suppliers to the major aircraft
manufacturers. My reasoning is
that the suppliers should
benefit from an increase in
production of new planes, since
aircraft manufacturers typically
outsource half of their
business to parts suppliers. In
addition, these suppliers
consolidated during the down
cycle, which bodes well for
profitability."
INVESTMENT CHANGES
TOP TEN STOCKS AS OF NOVEMBER 30, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE STOCKS
6 MONTHS AGO
Cytec Industries, Inc. 2.0 2.1
Mirage Resorts, Inc. 1.5 1.1
UNUM Corp. 1.3 0.9
Hexcel Corp. 1.3 1.4
Thiokol Corp. 1.2 1.6
Novellus System, Inc. 0.9 0.0
Sun International Hotels Ltd. Ord. 0.9 0.7
Chesapeake Energy Corp. 0.9 0.0
Federal National Mortgage 0.8 0.3
Association
Household International, Inc. 0.8 2.0
TOP FIVE MARKET SECTORS AS OF NOVEMBER 30, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE MARKET SECTORS
6 MONTHS AGO
Technology 22.1 16.4
Finance 12.7 10.9
Basic Industries 8.5 8.5
Retail & Wholesale 6.6 9.5
Energy 6.5 0.5
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF NOVEMBER 30, 1996 * AS OF MAY 31, 1996 **
Row: 1, Col: 1, Value: 4.4
Row: 1, Col: 2, Value: 1.1
Row: 1, Col: 3, Value: 94.5
Row: 1, Col: 1, Value: 9.699999999999999
Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 90.3
Stocks 95.5%
Bonds 0.1%
Short-term
investments 4.4%
FOREIGN
INVESTMENTS 2.4%
Stocks 90.3%
Bonds 0.0%
Short-term
investments 9.7%
FOREIGN
INVESTMENTS 3.3%
*
**
INVESTMENTS NOVEMBER 30, 1996
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 95.5%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 3.9%
AEROSPACE & DEFENSE - 3.4%
BE Aerospace, Inc. (a) 58,700 $ 1,353,733
Banner Aerospace, Inc. (a) 128,400 1,059,300
Gulfstream Aerospace Corp. (a) 49,500 1,188,000
Precision Castparts Corp. 7,900 370,313
Rohr Industries, Inc. (a) 13,600 238,000
Thiokol Corp. 57,450 2,642,700
Wyman-Gordon Co. (a) 37,200 795,150
7,647,196
DEFENSE ELECTRONICS - 0.5%
Raytheon Co. 24,100 1,232,113
TOTAL AEROSPACE & DEFENSE 8,879,309
BASIC INDUSTRIES - 8.4%
CHEMICALS & PLASTICS - 3.2%
Carbide/Graphite Group, Inc. (The) (a) 8,200 157,850
Cytec Industries, Inc. (a) 124,000 4,588,000
International Specialty Products, Inc. (a) 22,600 274,025
McWhorter Technologies, Inc. (a) 28,000 556,500
Valspar Corp. 11,000 631,125
Witco Corp. 34,300 1,041,863
7,249,363
IRON & STEEL - 2.3%
Hexcel Corp. (a) 159,100 2,883,688
Nucor Corp. 30,950 1,682,906
SPS Technologies, Inc. (a) 7,900 495,725
Steel Dynamics, Inc. 3,700 67,525
5,129,844
METALS & MINING - 0.4%
IMCO Recycling, Inc. 40,800 668,100
Superior Telecom, Inc. (a) 6,400 120,000
788,100
PACKAGING & CONTAINERS - 0.2%
Gaylord Container Corp. Class A (a) 77,600 494,700
PAPER & FOREST PRODUCTS - 2.3%
Boise Cascade Corp. 33,500 1,038,500
Champion International Corp. 38,640 1,661,520
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
BASIC INDUSTRIES - CONTINUED
PAPER & FOREST PRODUCTS - CONTINUED
Jefferson Smurfit Corp. (a) 39,900 $ 538,650
Mail-Well, Inc. (a) 18,000 254,250
Mercer International, Inc. SBI 62,700 760,238
Stone Container Corp. 62,900 967,088
5,220,246
TOTAL BASIC INDUSTRIES 18,882,253
CONGLOMERATES - 0.4%
AlliedSignal, Inc. 9,400 688,550
GenCorp, Inc. 2,900 53,650
Kysor Industrial Corp. 2,200 67,100
809,300
CONSTRUCTION & REAL ESTATE - 1.3%
BUILDING MATERIALS - 0.4%
Sherwin-Williams Co. 15,900 902,325
CONSTRUCTION - 0.4%
DR Horton, Inc. (a) 16,200 170,100
Kaufman & Broad Home Corp. 34,050 438,394
McDermott (J. Ray) SA (a) 13,700 339,075
947,569
ENGINEERING - 0.5%
MasTec, Inc. (a) 24,300 1,148,175
TOTAL CONSTRUCTION & REAL ESTATE 2,998,069
DURABLES - 4.0%
AUTOS, TIRES, & ACCESSORIES - 2.0%
Eaton Corp. 15,000 1,038,750
Federal-Mogul Corp. 18,700 416,075
Intermet Corp. 43,100 576,463
Lear Corp. (a) 16,400 588,350
Modine Manufacturing Co. 25,000 621,875
PACCAR, Inc. 17,600 1,170,400
4,411,913
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
DURABLES - CONTINUED
CONSUMER DURABLES - 0.7%
Dupont Photomasks, Inc. (a) 37,400 $ 1,552,100
HOME FURNISHINGS - 0.6%
Furniture Brands International, Inc. (a) 66,300 820,463
Heilig-Meyers Co. 47,100 653,513
1,473,976
TEXTILES & APPAREL - 0.7%
Cutter & Buck, Inc. (a) 2,700 28,350
Fruit of the Loom, Inc. Class A (a) 1,800 64,125
Liz Claiborne, Inc. 21,800 923,775
North Face, Inc. (a) 22,500 497,813
1,514,063
TOTAL DURABLES 8,952,052
ENERGY - 6.5%
ENERGY SERVICES - 3.4%
Baker Hughes, Inc. 19,100 699,538
Energy Ventures, Inc. (a) 10,100 496,163
Falcon Drilling, Inc. (a) 14,100 564,000
Halliburton Co. 21,500 1,295,375
Marine Drilling Companies, Inc. (a) 22,300 354,013
Noble Drilling Corp. (a) 57,300 1,103,025
Tidewater, Inc. 26,700 1,168,125
Transocean Offshore, Inc. 7,300 439,825
Weatherford Enterra, Inc. (a) 45,900 1,399,950
7,520,014
OIL & GAS - 3.1%
Belco Oil & Gas Corp. (a) 40,600 1,157,100
Chesapeake Energy Corp. (a) 29,700 1,941,638
Cooper Cameron Corp. (a) 19,100 1,255,825
Flores & Rucks, Inc. (a) 16,900 830,213
National-Oilwell, Inc. (a) 20,500 579,125
Tosco Corp. 10,600 806,925
Vastar Resources, Inc. 12,100 485,513
7,056,339
TOTAL ENERGY 14,576,353
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
FINANCE - 12.7%
BANKS - 1.1%
Fleet Financial Group, Inc. 25,700 $ 1,423,138
U.S. Bancorp 23,600 1,008,900
2,432,038
CREDIT & OTHER FINANCE - 2.8%
Aames Financial Corp. 5,300 227,238
Associates First Capital Corp. 27,900 1,349,663
Beneficial Corp. 28,300 1,758,138
Green Tree Financial Corp. 29,700 1,243,688
Household International, Inc. 18,800 1,781,300
6,360,027
FEDERAL SPONSORED CREDIT - 2.1%
Federal Home Loan Mortgage Corporation 10,450 1,193,913
Federal National Mortgage Association 45,200 1,864,500
Student Loan Marketing Association 17,300 1,662,963
4,721,376
INSURANCE - 5.9%
AMBAC, Inc. 6,700 458,950
Allmerica Financial Corp. 14,200 470,375
American Bankers Insurance Group, Inc. 15,700 764,884
American Financial Group, Inc. 23,400 842,400
Arbatax International, Inc. (a) 68,050 452,533
Equitable of Iowa Companies 16,200 724,950
Life RE Corp. 27,900 1,028,813
MBIA, Inc. 12,500 1,264,063
MMI Companies, Inc. 7,900 243,913
Mercury General Corp. 2,200 125,400
Penncorp. Financial Group, Inc. 30,700 1,055,313
Progressive Corp. 13,600 948,600
Protective Life Corp. 24,300 987,188
Provident Companies, Inc. 19,600 820,750
Transatlantic Holdings, Inc. 1,900 151,288
UNUM Corp. 41,875 2,978,359
13,317,779
SECURITIES INDUSTRY - 0.8%
Legg Mason, Inc. 25,800 1,002,975
Lehman Brothers Holdings, Inc. 22,000 640,750
1,643,725
TOTAL FINANCE 28,474,945
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
HEALTH - 5.0%
DRUGS & PHARMACEUTICALS - 0.3%
Guilford Pharmaceuticals, Inc. (a) 3,100 $ 54,638
Thermotrex Corp. (a) 16,300 554,200
608,838
MEDICAL EQUIPMENT & SUPPLIES - 2.8%
AmeriSource Health Corp. Class A (a) 12,600 496,125
Biopsys Medical, Inc. (a) 40,000 950,000
Cardinal Health, Inc. 9,475 792,347
Cygnus, Inc. (a) 15,100 186,863
Heartport, Inc. (a) 14,500 333,500
McKesson Corp. 18,000 1,012,500
Mentor Corp. 11,300 309,338
St. Jude Medical, Inc. (a) 41,900 1,749,325
Sunrise Medical, Inc. (a) 30,600 439,875
6,269,873
MEDICAL FACILITIES MANAGEMENT - 1.9%
HEALTHSOUTH Rehabilitation Corp. (a) 42,100 1,584,013
Health Management Associates, Inc. Class A (a) 59,100 1,307,588
PacifiCare Health Systems, Inc. Class B (a) 17,800 1,477,400
4,369,001
TOTAL HEALTH 11,247,712
INDUSTRIAL MACHINERY & EQUIPMENT - 2.4%
ELECTRICAL EQUIPMENT - 0.2%
California Amplifier, Inc. (a) 46,100 374,563
INDUSTRIAL MACHINERY & EQUIPMENT - 1.3%
IDEX Corp. 5,800 228,375
PRI Automation, Inc. 4,000 191,000
UCAR International, Inc. (a) 30,100 1,140,038
Watkins-Johnson Co. 54,100 1,406,600
2,966,013
POLLUTION CONTROL - 0.9%
Allied Waste Industries, Inc. (a) 155,300 1,397,700
USA Waste Services, Inc. 19,900 641,775
2,039,475
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 5,380,051
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
MEDIA & LEISURE - 6.3%
BROADCASTING - 1.1%
American Telecasting, Inc. (a) 55,200 $ 434,700
Heartland Wireless Communications, Inc. (a) 42,700 517,738
Lin Television Corp. (a) 26,900 1,079,363
People's Choice TV Corp. (a) 58,500 372,938
Wireless One, Inc. (a) 1,600 15,000
2,419,739
LODGING & GAMING - 3.5%
Circus Circus Enterprises, Inc. (a) 27,650 1,009,225
Hilton Hotels Corp. 27,200 795,600
International Game Technology Corp. 9,500 185,250
Mirage Resorts, Inc. (a) 141,700 3,418,513
Red Roof Inns, Inc. (a) 30,500 480,375
Sun International Hotels Ltd. Ord. (a) 40,600 2,014,775
7,903,738
PUBLISHING - 1.3%
ACNielsen Corp. 19,100 331,863
Dun & Bradstreet Corp. 14,700 332,588
Hollinger International, Inc. Class A 159,500 1,754,500
Meredith Corp. 10,500 540,750
2,959,701
RESTAURANTS - 0.4%
Rainforest Cafe, Inc. (a) 29,800 871,650
TOTAL MEDIA & LEISURE 14,154,828
NONDURABLES - 3.1%
BEVERAGES - 0.4%
Coors (Adolph) Co. Class B 46,100 916,238
HOUSEHOLD PRODUCTS - 0.4%
Safeskin Corp. (a) 15,600 807,300
TOBACCO - 2.3%
Dimon, Inc. 39,300 815,475
Philip Morris Companies, Inc. 16,000 1,650,000
RJR Nabisco Holdings Corp. 43,200 1,382,400
Schweitzer-Mauduit International, Inc. 18,100 597,300
Universal Corp. 29,100 836,625
5,281,800
TOTAL NONDURABLES 7,005,338
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
PRECIOUS METALS - 1.0%
Bre-X Minerals Ltd. (a) 61,800 $ 954,785
Getchell Gold Corp. (a) 32,600 1,275,475
Greenstone Resources Ltd. (a) 8,200 109,370
2,339,630
RETAIL & WHOLESALE - 6.6%
APPAREL STORES - 2.5%
Abercrombie & Fitch Co. (a) 24,200 444,675
Charming Shoppes, Inc. (a) 129,700 664,713
Footstar, Inc. (a) 10,853 222,487
Gymboree Corp. (a) 31,400 887,050
Just for Feet, Inc. (a) 14,100 333,113
Loehmanns, Inc. (a) 34,100 1,027,263
Ross Stores, Inc. 29,200 1,485,550
Talbots, Inc. 20,100 580,388
5,645,239
DRUG STORES - 0.7%
CVS Corp. 37,700 1,550,413
GENERAL MERCHANDISE STORES - 0.9%
Hot Topic, Inc. (a) 31,200 585,000
Michaels Stores, Inc. (a) 13,400 134,000
Neiman-Marcus Group, Inc. (a) 39,300 1,365,675
2,084,675
GROCERY STORES - 0.9%
Food Lion, Inc.:
Class A 91,000 819,000
Class B 9,600 85,800
Whole Foods Market, Inc. (a) 46,200 1,045,275
1,950,075
RETAIL & WHOLESALE, MISCELLANEOUS - 1.6%
Circuit City Stores, Inc. 1,700 56,738
Fingerhut Companies, Inc. 43,700 546,250
Friedmans, Inc. Class A (a) 26,800 368,500
Gadzooks, Inc. (a) 44,400 1,265,400
Office Depot, Inc. (a) 21,200 413,400
Tiffany & Co., Inc. 25,040 923,350
3,573,638
TOTAL RETAIL & WHOLESALE 14,804,040
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
SERVICES - 4.6%
ADVERTISING - 0.7%
ADVO, Inc. 92,200 $ 1,164,025
Omnicom Group, Inc. 11,800 601,800
1,765,825
EDUCATIONAL SERVICES - 1.0%
Strayer Education, Inc. 58,300 1,311,750
Sylvan Learning Systems (a) 32,700 854,288
2,166,038
SERVICES - 2.9%
CDI Corp. (a) 31,600 920,350
Craig (Jenny), Inc. (a) 89,400 826,950
Lawyers Title Corp. 63,700 1,210,300
Medaphis Corp. (a) 74,600 773,975
Medpartners, Inc. (a) 41,772 950,313
National Education Corp. (a) 54,900 775,463
Regis Corp. 42,900 1,072,500
6,529,851
TOTAL SERVICES 10,461,714
TECHNOLOGY - 22.1%
COMMUNICATIONS EQUIPMENT - 2.4%
Ascend Communications, Inc. (a) 25,000 1,778,125
Aspect Telecommunications Corp. (a) 21,800 1,188,100
Dynatech Corp. (a) 19,350 904,613
Tellabs, Inc. (a) 18,800 747,300
3Com Corp. (a) 10,500 788,813
5,406,951
COMPUTER SERVICES & SOFTWARE - 8.6%
Advent Software, Inc. (a) 11,600 371,200
Baan Co. NV (a) 19,200 684,000
Barra, Inc. (a) 33,600 873,600
CUC International, Inc. (a) 60,300 1,590,413
Cadence Design Systems, Inc. (a) 13,600 542,300
CompUSA, Inc. (a) 26,000 1,170,000
Computer Learning Centers, Inc. (a) 41,900 1,047,500
Equifax, Inc. 30,000 982,500
Forte Software, Inc. (a) 16,400 520,700
GT Interactive Software, Inc. (a) 58,100 682,675
Health Systems Design Corp. (a) 45,500 364,000
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TECHNOLOGY - CONTINUED
COMPUTER SERVICES & SOFTWARE - CONTINUED
International Network Services (a) 100 $ 3,200
Keane, Inc. (a) 22,500 1,189,688
McAfee Associates, Inc. (a) 18,600 888,150
Metromail Corp. (a) 20,300 469,438
Midway Games, Inc. (a) 6,700 151,588
Netscape Communications Corp. (a) 15,500 866,063
PeopleSoft, Inc. (a) 18,600 1,701,900
Rational Software Corp. (a) 8,200 289,050
Sabre Group Holdings, Inc. Class A (a) 45,300 1,325,025
Scopus Technology, Inc. (a) 19,000 710,125
Spectrum Holobyte, Inc. (a) 109,100 545,500
SunGard Data Systems, Inc. (a) 13,100 550,200
Sybase, Inc. (a) 43,200 761,400
Trusted Information Systems, Inc. (a) 300 3,600
Vantive Corp. (a) 31,200 1,076,400
19,360,215
COMPUTERS & OFFICE EQUIPMENT - 3.5%
Adaptec, Inc. (a) 24,200 901,450
Bay Networks, Inc. (a) 48,200 1,289,350
Bell & Howell Co. (a) 2,200 57,200
Compaq Computer Corp. (a) 7,900 626,075
Comverse Technology, Inc. (a) 5,500 187,000
Diebold, Inc. 7,600 453,150
Exabyte Corp. (a) 56,600 820,700
Kronos, Inc. (a) 16,550 471,675
SCI Systems, Inc. (a) 28,100 1,482,275
Sun Microsystems, Inc. (a) 13,900 809,675
Tech Data Corp. (a) 23,500 705,000
Wang Laboratories, Inc. (a) 2,700 57,038
7,860,588
ELECTRONIC INSTRUMENTS - 3.2%
Applied Materials, Inc. 22,600 861,625
GenRad, Inc. (a) 32,900 727,913
KLA Instruments Corp. 10,200 362,100
Kulicke & Soffa Industries, Inc. (a) 40,000 810,000
Lam Research Corp. (a) 40,700 1,460,113
Novellus System, Inc. (a) 36,000 2,070,000
Teradyne, Inc. (a) 8,200 193,725
Varian Associates, Inc. 13,800 679,650
7,165,126
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TECHNOLOGY - CONTINUED
ELECTRONICS - 4.1%
Actel Corp. (a) 32,500 $ 715,000
Cirrus Logic, Inc. (a) 33,200 651,550
Etec Systems, Inc. 1,300 38,188
Integrated Device Technology, Inc. (a) 62,200 773,613
Linear Technology Corp. 35,700 1,682,363
Maxim Integrated Products, Inc. (a) 15,400 714,175
OnTrak Systems, Inc. (a) 10,000 180,000
Solectron Corp. (a) 14,200 830,700
Speedfam International, Inc. (a) 82,400 1,678,900
Tencor Instruments (a) 60,900 1,621,463
Triumph Group, Inc. (a) 11,500 301,875
9,187,827
PHOTOGRAPHIC EQUIPMENT - 0.3%
Imation Corp. (a) 24,700 747,175
Polaroid Corp. 300 12,788
759,963
TOTAL TECHNOLOGY 49,740,670
TRANSPORTATION - 1.8%
RAILROADS - 0.8%
Wisconsin Central Transportation Corp. 43,600 1,776,700
SHIPPING - 0.2%
Kirby Corp. (a) 23,200 461,100
TRUCKING & FREIGHT - 0.8%
Consolidated Freightways, Inc. 37,100 895,038
M.S. Carriers, Inc. (a) 16,100 305,900
Yellow Corp. (a) 42,400 636,000
1,836,938
TOTAL TRANSPORTATION 4,074,738
UTILITIES - 5.4%
CELLULAR - 0.6%
Mobile Telecommunications Technologies, Inc. (a) 17,900 209,206
Nextel Communications, Inc. Class A (a) 33,800 507,000
360 Degrees Communications Co. (a) 30,600 726,750
1,442,956
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
UTILITIES - CONTINUED
TELEPHONE SERVICES - 4.8%
Ameritech Corp. 29,100 $ 1,713,263
BellSouth Corp. 22,000 888,250
Cincinnati Bell, Inc. 4,800 286,200
GTE Corp. 31,400 1,409,075
LCI International, Inc. (a) 38,700 1,262,588
MFS Communications, Inc. 31,900 1,539,175
NYNEX Corp. 31,700 1,470,088
Pacific Telesis Group 39,300 1,454,100
SBC Communications, Inc. 14,700 773,588
10,796,327
TOTAL UTILITIES 12,239,283
TOTAL COMMON STOCKS
(Cost $199,843,565) 215,020,285
CONVERTIBLE BONDS - 0.1%
MOODY'S PRINCIPAL
RATINGS AMOUNT
BASIC INDUSTRIES - 0.1%
IRON & STEEL - 0.1%
Hexcel Corp. 7%, 8/1/03 B2 $ 100,000 130,750
RETAIL & WHOLESALE - 0.0%
APPAREL STORES - 0.0%
Charming Shoppers, Inc. 7 1/2%, 7/15/06 B2 40,000 40,000
TOTAL CONVERTIBLE BONDS
(Cost $140,000) 170,750
CASH EQUIVALENTS - 4.4%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.71%, dated
11/29/96 due 12/2/96 $ 9,827,674 9,823,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $209,806,565) $ 225,014,035
LEGEND
1. Non-income producing
INCOME TAX INFORMATION
At November 30, 1996, the aggregate cost of investment securities for
income tax purposes was $210,255,252. Net unrealized appreciation
aggregated $14,758,783, of which $25,022,383 related to appreciated
investment securities and $10,263,600 related to depreciated investment
securities.
The fund hereby designates approximately $94,000 as a capital gain dividend
for the purpose of the dividend paid deduction.
The fund intends to elect to defer to its fiscal year ending November 30,
1997 approximately $867,000 of losses recognized during the period November
1, 1996 to November 30, 1996.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
NOVEMBER 30, 1996
ASSETS
Investment in securities, at value (including repurchase $ 225,014,035
agreements of $9,823,000) (cost $209,806,565) -
See accompanying schedule
Cash 40,833
Receivable for investments sold 1,471,395
Receivable for fund shares sold 505,637
Dividends receivable 142,806
Interest receivable 3,517
Prepaid expenses 15,091
TOTAL ASSETS 227,193,314
LIABILITIES
Payable for investments purchased $ 2,035,563
Payable for fund shares redeemed 207,212
Accrued management fee 103,124
Distribution fees payable 101,568
Other payables and accrued expenses 140,140
TOTAL LIABILITIES 2,587,607
NET ASSETS $ 224,605,707
Net Assets consist of:
Paid in capital $ 206,742,828
Accumulated net investment (loss) (60,692)
Accumulated undistributed net realized gain (loss) on 2,716,101
investments and foreign currency transactions
Net unrealized appreciation (depreciation) on 15,207,470
investments
NET ASSETS $ 224,605,707
CALCULATION OF MAXIMUM OFFERING PRICE $11.70
CLASS A:
NET ASSET VALUE and redemption price per share
($1,239,305 (divided by) 105,961 shares)
Maximum offering price per share (100/94.75 of $11.70) $12.35
CLASS B: $11.61
NET ASSET VALUE and offering price per share
($32,726,738 (divided by) 2,817,836 shares) A
CLASS T: $11.70
NET ASSET VALUE and redemption price per share
($187,039,655 (divided by) 15,988,394 shares)
Maximum offering price per share (100/96.50 of $11.70) $12.12
INSTITUTIONAL CLASS: $11.70
NET ASSET VALUE, offering price and redemption price per
share ($3,600,009 (divided by) 307,653 shares)
</TABLE>
A REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
FEBRUARY 20, 1996 (COMMENCEMENT OF OPERATIONS)
TO NOVEMBER 30, 1996
INVESTMENT INCOME $ 734,748
Dividends
Interest 585,591
TOTAL INCOME 1,320,339
EXPENSES
Management fee $ 644,430
Transfer agent fees 534
Class A
Class B 36,945
Class T 229,596
Institutional Class 3,174
Distribution fees 408
Class A
Class B 137,775
Class T 460,775
Accounting fees and expenses 65,738
Non-interested trustees' compensation 375
Custodian fees and expenses 32,066
Registration fees 10,854
Class A
Class B 56,065
Class T 116,822
Institutional Class 41,392
Audit 24,968
Legal 78
Miscellaneous 4,301
Total expenses before reductions 1,866,296
Expense reductions (45,012) 1,821,284
NET INVESTMENT INCOME (LOSS) (500,945)
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 2,999,620
Futures contracts 156,734 3,156,354
Change in net unrealized appreciation (depreciation) on 15,207,470
investment securities
NET GAIN (LOSS) 18,363,824
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 17,862,879
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C>
FEBRUARY 20, 1996
(COMMENCEMENT
OF OPERATIONS) TO
NOVEMBER 30, 1996
INCREASE (DECREASE) IN NET ASSETS
Operations $ (500,945)
Net investment income (loss)
Net realized gain (loss) 3,156,354
Change in net unrealized appreciation (depreciation) 15,207,470
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 17,862,879
Share transactions - net increase (decrease) 206,742,828
TOTAL INCREASE (DECREASE) IN NET ASSETS 224,605,707
NET ASSETS
Beginning of period -
End of period (including accumulated net investment loss of $60,692) $ 224,605,707
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
SEPTEMBER 3, 1996
(COMMENCEMENT
OF OPERATIONS) TO
NOVEMBER 30,
1996
SELECTED PER-SHARE DATA D
Net asset value, beginning of period $ 10.74
Income from Investment Operations
Net investment income (loss) (.01)
Net realized and unrealized gain (loss) .97
Total from investment operations .96
Net asset value, end of period $ 11.70
TOTAL RETURN B, C 8.94%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 1,239
Ratio of expenses to average net assets 1.56% A,
E
Ratio of net investment income (loss) to average net assets (.33)%
A
Portfolio turnover 101% A
Average commission rate F $ .0382
A ANNUALIZED
B THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURN DOES NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS
OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE
BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
F A FUND IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM
PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED
IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES
MAY DIFFER.
FINANCIAL HIGHLIGHTS - CLASS B
FEBRUARY 20, 1996
(COMMENCEMENT
OF OPERATIONS) TO
NOVEMBER 30,
1996
SELECTED PER-SHARE DATA D
Net asset value, beginning of period $ 10.00
Income from Investment Operations
Net investment income (loss) (.10)
Net realized and unrealized gain (loss) 1.71
Total from investment operations 1.61
Net asset value, end of period $ 11.61
TOTAL RETURN B, C 16.10%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 32,727
Ratio of expenses to average net assets 2.38% A
Ratio of expenses to average net assets after expense reductions 2.37% A,
E
Ratio of net investment income (loss) to average net assets (1.14)%
A
Portfolio turnover 101% A
Average commission rate F $ .0382
A ANNUALIZED
B THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURN DOES NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE AND
FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES (SEE NOTE 5 OF
NOTES TO FINANCIAL STATEMENTS).
F A FUND IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM
PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED
IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES
MAY DIFFER.
FINANCIAL HIGHLIGHTS - CLASS T
FEBRUARY 20, 1996
(COMMENCEMENT
OF OPERATIONS) TO
NOVEMBER 30,
1996
SELECTED PER-SHARE DATA D
Net asset value, beginning of period $ 10.00
Income from Investment Operations
Net investment income (loss) (.03)
Net realized and unrealized gain (loss) 1.73
Total from investment operations 1.70
Net asset value, end of period $ 11.70
TOTAL RETURN B, C 17.00%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 187,040
Ratio of expenses to average net assets 1.60% A
Ratio of net investment income (loss) to average net assets (.37)%
A
Portfolio turnover 101% A
Average commission rate E $ .0382
A ANNUALIZED
B THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN.
C TOTAL RETURN DOES NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS
OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E A FUND IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM
PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED
IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES
MAY DIFFER.
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
FEBRUARY 20, 1996
(COMMENCEMENT
OF OPERATIONS) TO
NOVEMBER 30,
1996
SELECTED PER-SHARE DATA D
Net asset value, beginning of period $ 10.00
Income from Investment Operations
Net investment income (loss) (.02)
Net realized and unrealized gain (loss) 1.72
Total from investment operations 1.70
Net asset value, end of period $ 11.70
TOTAL RETURN B, C 17.00%
Ratios and Supplemental Data
Net assets, end of period (000 omitted) $ 3,600
Ratio of expenses to average net assets 1.50% A,
E
Ratio of net investment income (loss) to average net assets (.27)%
A
Portfolio turnover 101% A
Average commission rate F $ .0382
A ANNUALIZED
B THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURN FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE
BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS)
F A FUND IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM
PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED
IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES
MAY DIFFER.
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1996
7. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Mid Cap Fund (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, Class B, Class T, and Institutional Class shares,
each of which has equal rights as to assets and voting privileges. Each
class has exclusive voting rights with respect to its distribution plan.
The fund commenced sale of a new Class A of shares on September 3, 1996. On
this date, the original Class A was renamed Class T. Investment income,
realized and unrealized capital gains and losses, the common expenses of
the fund, and certain fund-level expense reductions are allocated on a pro
rata basis to each class based on the relative net assets of each class to
the total net assets of the fund. Each class of shares differs in its
respective distribution, transfer agent, registration, and certain other
class-specific fees, expenses, and expense reductions.
The financial statements have been prepared in conformity with generally
accepted accounting principles which permit management to make certain
estimates and assumptions at the date of the financial statements. The
following summarizes the significant accounting policies of the fund:
SECURITY VALUATION. Securities 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 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 with remaining maturities of sixty days or less for which
quotations are not readily available are valued at amortized cost or
original cost plus accrued interest, both of which approximate current
value.
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. Income receipts
and expense payments are translated into U.S. dollars at the prevailing
exchange rate on the respective dates of the transactions. Purchases and
sales of securities are translated into U.S. dollars at the contractual
currency exchange rates established at the time of each trade.
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, and the difference between
the amount of net investment income accrued and the U.S. dollar amount
actually received. The effects
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
FOREIGN CURRENCY TRANSLATION -
CONTINUED
of changes in foreign currency exchange rates on investments in securities
are included with the net realized and unrealized gain or loss on
investment securities.
INCOME TAXES. The fund intends to qualify as a regulated investment company
under Subchapter M of the Internal Revenue Code. By so qualifying, the fund
will not be subject to income taxes to the extent that it distributes
substantially all of its taxable income for its fiscal year. The schedule
of investments includes information regarding income taxes under the
caption "Income Tax Information."
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. Non-cash dividends included in dividend income, if any,
are recorded at the fair market value of the securities received. Interest
income, which includes accretion of original issue discount, 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.
PREPAID EXPENSES. Fidelity Management & Research Company (FMR) bears all
organizational expenses except for registering
and qualifying each class and shares of each class for distribution under
federal and state securities law. These expenses are borne by each class
and amortized over one year.
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 pro rata 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, which may result in distribution
reclassifications, are primarily due to differing treatments for passive
foreign investment companies (PFIC), non-taxable dividends and losses
deferred due to wash sales and excise tax regulations. The fund also
utilized earnings and profits distributed to shareholders on redemption of
shares as a part of the dividends paid deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect the per-share allocation between net investment income and realized
and unrealized gain (loss). Accumulated net investment loss and accumulated
undistributed net realized gain (loss) on investments and foreign currency
transactions may include temporary book and tax basis differences that will
reverse in a subsequent period. Any taxable income or gain remaining at
fiscal year end is distributed in the following year.
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
8. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign securities. Losses may
arise from changes in the value of the foreign currency or if the
counterparties do not perform under the contracts' terms. The U.S. dollar
value of foreign currency contracts is determined using contractual
currency exchange rates established at the time of each trade. The cost of
the foreign currency contracts is included in the cost basis of the
associated investment.
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 for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
Securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are
marked-to-market daily and maintained at a value at least equal to the
principal amount of the repurchase agreement (including accrued interest).
FMR, the fund's investment adviser, is responsible for determining that the
value of the underlying securities remains in accordance with the market
value requirements stated above.
FUTURES CONTRACTS. The fund may use futures contracts to manage its
exposure to the stock and bond markets and to fluctuations in interest
rates and currency values. Buying futures tends to increase the fund's
exposure to the underlying instrument, while selling futures tends to
decrease the fund's exposure to the underlying instrument or hedge other
fund investments. Losses may arise from changes in the value of the
underlying instruments, if there is an illiquid secondary market for the
contracts, or if the counterparties do not perform under the contracts'
terms. Futures contracts are valued at the settlement price established
each day by the board of trade or exchange on which they are traded.
9. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $297,571,199 and $101,087,145, respectively.
The market value of futures contracts opened and closed during the period
amounted to $14,630,558 and $14,787,292, respectively.
10. 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 .2500% to .5200% for the period. In the event that these
rates were lower than the contractual rates in effect during the period,
FMR voluntarily implemented the above rates, as they resulted in the same
or a lower management fee. The annual individual fund fee rate is .30%. For
the period, the management fee was equivalent to an annualized rate of .60%
of average net assets.
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the 1940
Act, the Trustees have adopted separate distribution plans with respect to
the fund's Class A shares (Class A Plan), Class B shares (Class B Plan),
Class T shares (Class T Plan), and Institutional Class shares (collectively
referred to as "the Plans"). Under the Class A, Class B, and Class T Plans,
the fund pays Fidelity Distributors Corporation (FDC), an affiliate of FMR,
a distribution and service fee. This fee is based on annual rates of .25%,
1.00% (of which .75% represents a distribution fee and .25% represents a
shareholder service fee), and .50% of the average net assets of the Class
A, Class B
and Class T shares, respectively. For the period, the fund paid FDC $408,
$137,775, and $460,775 under the Class A, Class B, and Class T Plans, of
which $408, $34,445, and $460,775 were paid to securities dealers, banks
and other financial institutions for the distribution of Class A, Class B,
and Class T shares, respectively, and providing shareholder support
services.
Under the Plans, FMR or FDC may use its resources to pay administrative and
promotional expenses related to the sale of the fund's Class A, Class B,
Class T, and Institutional Class shares. The Plans also authorize payments
to third parties that assist in the sale of the fund's shares or render
shareholder support services.
SALES LOAD. FDC receives a front-end sales charge of up to 5.25% and 3.50%
for selling Class A and Class T shares of the fund, respectively, and the
proceeds of a contingent deferred sales charge levied on Class B share
redemptions occurring within five years of purchase. The Class B charge is
based on declining rates which range from 4% to 1% of the lesser of the
cost of shares at the initial date of purchase or the net asset value of
the redeemed shares, excluding any reinvested dividends and capital gains.
Effective January 2, 1997, the Board of Trustees approved a revised Class B
contingent deferred sales charge for shares purchased on or after January
2, 1997. Under the revised arrangement, FDC receives the proceeds of a
contingent deferred sales charge levied on Class B share redemptions
occurring within six years of purchase. The Class B charge is based on
declining rates which range from 5% to 1%
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
SALES LOAD - CONTINUED
of the lesser of the cost of shares at the initial date of the purchase or
the net asset value of the redeemed shares, excluding any reinvested
dividends and capital gains.
For the period, FDC received sales charges of $25,943 and $1,836,711 on
sales of Class A and Class T shares of the fund, of which $21,509 and
$1,532,192 were paid to securities dealers, banks, and other financial
institutions. FDC also received contingent deferred sales charges of
$20,844 on Class B share redemptions from the fund. When Class B shares are
sold, FDC pays commissions from its own resources to dealers through which
the sales are made.
TRANSFER AGENT FEES. Fidelity Investments Institutional Operations Company
(FIIOC), an affiliate of FMR, is the transfer, dividend disbursing, and
shareholder servicing agent for the fund's Class A, Class B, and
Institutional Class Shares, while State Street Bank and Trust Company
(State Street) (collectively, with FIIOC, referred to as the Transfer
Agents) acts in that capacity for the fund's Class T shares. The Transfer
Agents receive account fees and asset-based fees that vary according to
account size and type of account of the shareholders of the respective
classes of the fund. With respect to the Class T shares, State Street has
delegated certain transfer, dividend disbursing, 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. For the period, the transfer agent fees
were equivalent to annualized rates of .33%, .27%, .25%, and .16% of the
average net assets of Class A, Class B, Class T, and Institutional Class,
respectively.
Effective January 1, 1997, FIIOC will replace State Street as the transfer
agent for the fund's Class T shares.
ACCOUNTING FEES. Fidelity Service Co. (FSC), an affiliate of FMR, maintains
the fund's accounting records. The fee is based on the level of average net
assets for the month plus out-of-pocket expenses.
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 $72,019 for the period.
11. EXPENSE REDUCTIONS.
FMR voluntarily agreed to reimburse operating expenses (excluding interest,
taxes, brokerage commissions and extraordinary expenses) above annual rates
of 1.75%, 2.50%, 2.00%, and 1.50% of average net assets for Class A, Class
B, Class T, and Institutional Class, respectively. For the period, the
reimbursement reduced expenses by $9,723 and $33,668 for Class A and
Institutional Class, respectively.
FMR has also 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 $150 under this arrangement.
5. EXPENSE REDUCTIONS -
CONTINUED
In addition, the fund has entered into an arrangement with its custodian
whereby interest earned on uninvested cash balances was used to offset a
portion of expenses. During the period, the fund's custodian fees were
reduced by $1,471 under the custodian arrangement.
12. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:
SHARES DOLLARS
PERIOD ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30,
1996 A, B 1996 A, B
CLASS A 106,629 $ 1,202,595
Shares sold
Shares redeemed (668) (7,639)
Net increase (decrease) 105,961 $ 1,194,956
CLASS B 2,990,066 $ 32,264,842
Shares sold
Shares redeemed (172,230) (1,849,188)
Net increase (decrease) 2,817,836 $ 30,415,654
CLASS T 19,947,368 $ 215,644,919
Shares sold
Shares redeemed (3,958,974) (43,721,153)
Net increase (decrease) 15,988,394 $ 171,923,766
INSTITUTIONAL CLASS 310,259 $ 3,236,523
Shares sold
Shares redeemed (2,606) (28,071)
Net increase (decrease) 307,653 $ 3,208,452
A SHARE TRANSACTIONS FOR CLASS A ARE FOR THE PERIOD SEPTEMBER 3, 1996
(COMMENCEMENT OF SALE OF SHARES) TO NOVEMBER 30, 1996.
B SHARE TRANSACTIONS FOR CLASS B, CLASS T AND INSTITUTIONAL CLASS ARE FOR
THE PERIOD FEBRUARY 20, 1996 (COMMENCEMENT OF SALE OF SHARES) TO NOVEMBER
30, 1996.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Advisor Series I and the Shareholders of
Fidelity Advisor Mid Cap Fund:
We have audited the accompanying statement of assets and liabilities of
Fidelity Advisor Series I: Fidelity Advisor Mid Cap Fund, including the
schedule of portfolio investments, as of November 30, 1996, and the related
statement of operations, the statement of changes in net assets, and the
financial highlights of Class A, Class B, Class T and Institutional Class
for the periods indicated therein. These financial statements and financial
highlights are the responsibility of the fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of November 30, 1996 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 Mid Cap Fund as of November
30, 1996, the results of its operations, the changes in its net assets. and
the financial highlights of Class A, Class B, Class T and Institutional
Class for the periods indicated therein, in conformity with generally
accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
January 10, 1997
DISTRIBUTIONS
The Board of Trustees of Fidelity Advisor Mid Cap Fund voted to pay to
shareholders of record at the opening of business on record date, the
following distributions derived from capital gains realized from sales of
portfolio securities, and dividends derived from net investment income:
PAY DATE RECORD DATE DIVIDENDS CAPITAL GAINS
Institutional Class 12/23/96 12/20/96 $.02 $.20
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.)
Inc., London, England
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
William J. Hayes, Vice President
Jennifer Uhrig, Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
Robert H. Morrison, Manager,
Security Transactions
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
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 *
ADVISORY BOARD
William O. McCoy
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Investments Institutional
Operations Company
Boston, MA
CUSTODIAN
Brown Brothers Harriman & Co.
Boston, MA
FOCUS FUNDS
Fidelity Advisor Consumer
Industries Fund
Fidelity Advisor Cyclical
Industries Fund
Fidelity Advisor Financial
Services Fund
Fidelity Advisor Health Care Fund
Fidelity Advisor Natural
Resources Fund
Fidelity Advisor Technology Fund
Fidelity Advisor Utilities Growth Fund
GROWTH FUNDS
Fidelity Advisor TechnoQuant(trademark)
Growth Fund
Fidelity Advisor Overseas Fund
Fidelity Advisor Mid Cap Fund
Fidelity Advisor Equity Growth Fund
Fidelity Advisor Growth
Opportunities Fund
Fidelity Advisor Strategic
Opportunities Fund
Fidelity Advisor Large Cap Fund
GROWTH AND INCOME FUNDS
Fidelity Advisor Growth & Income Fund
Fidelity Advisor Equity Income Fund
Fidelity Advisor Balanced Fund
TAXABLE INCOME FUNDS
Fidelity Advisor Emerging Markets Income Fund
Fidelity Advisor High Yield Fund
Fidelity Advisor Strategic Income Fund
Fidelity Advisor Government Investment Fund
Fidelity Advisor Intermediate Bond Fund
Fidelity Advisor Short Fixed-Income Fund
MUNICIPAL FUNDS
Fidelity Advisor High Income
Municipal Fund
Fidelity Advisor Municipal Bond Fund
Fidelity Advisor Intermediate Municipal Income Fund
Fidelity Advisor Short-Intermediate Municipal Income Fund
STATE MUNICIPAL FUNDS
Fidelity Advisor California Municipal Income Fund
Fidelity Advisor New York Municipal Income Fund
MONEY MARKET FUNDS
Daily Money Fund: Money Market Portfolio
Daily Money Fund: U.S. Treasury Portfolio
Daily Tax-Exempt Money Fund
(REGISTERED TRADEMARK)
(2_FIDELITY_LOGOS)FIDELITY ADVISOR
(registered trademark)
LARGE CAP
FUND - CLASS A, CLASS T (FORMERLY CLASS A), AND CLASS B
ANNUAL REPORT
NOVEMBER 30, 1996
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over time.
FUND TALK 10 The manager's review of fund
performance, strategy and outlook.
INVESTMENT CHANGES 13 A summary of major shifts in the
fund's investments over the past six
months.
INVESTMENTS 14 A complete list of the fund's
investments with their market
values.
FINANCIAL STATEMENTS 22 Statements of assets and
liabilities, operations, and changes
in net assets, as well as financial
highlights.
NOTES 29 Notes to the financial statements.
REPORT OF INDEPENDENT 35 The auditors' opinion.
ACCOUNTANTS
DISTRIBUTIONS 36
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR DISTRIBUTION TO
PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN
EFFECTIVE
PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY ADVISOR FUND, INCLUDING CHARGES AND
EXPENSES,
CONTACT YOUR INVESTMENT PROFESSIONAL FOR A FREE PROSPECTUS. READ IT
CAREFULLY BEFORE YOU
INVEST OR SEND MONEY.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
Although stocks have managed to post solid returns throughout 1996, signs
of strength in the economy have led to inflation fears, causing some
uncertainty in bond markets so far this year. In 1995, both stock and bond
markets posted strong results, while the year before, stocks posted
below-average returns and bonds had one of the worst years in history.
These market ups and downs are a normal part of investing, and there are
some basic principles that are helpful for investors to remember in
different types of markets.
If you can leave your money invested over the long term, you can avoid the
results of the volatility that generally accompanies the stock market in
the short term, as we witnessed last year. You also can help to manage some
of the risks of investing through diversification. 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 types of 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. 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 or guaranteed 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. 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
ADVISOR LARGE CAP FUND - CLASS A
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can look at
the total percentage change in value, the average annual percentage change,
or the growth of a hypothetical $10,000 investment. A class' total return
includes changes in share price, plus reinvestment of any dividends (or
income) and capital gains (the profits the fund earns when it sells
securities that have grown in value). The initial offering of Class A
shares took place on September 3, 1996. Class A shares bear a 0.25% 12b-1
fee that is reflected in returns after September 3, 1996. Returns prior to
September 3, 1996 are those of Class T and reflect Class T's 0.50% 12b-1
fee. If Fidelity had not reimbursed certain class expenses, the life of
fund total return would have been lower.
CUMULATIVE TOTAL RETURNS
PERIOD ENDED NOVEMBER 30, 1996 LIFE OF
FUND
Advisor Large Cap - Class A 18.30%
Advisor Large Cap - Class A 12.09%
(incl. max. 5.25% sales charge)
S&P 500 (registered trademark) 18.90%
CUMULATIVE TOTAL RETURNS show Class A's performance in percentage terms
over a set period - in this case, since the fund started on February 20,
1996. For example, if you invested $1,000 in a fund that had a 5% return
over the past year, the value of your investment would be $1,050. You can
compare Class A's returns to the performance of the Standard & Poor's 500
Index - a widely recognized, unmanaged index of common stocks. This
benchmark includes reinvested dividends and capital gains, if any, and
excludes the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
AVERAGE ANNUAL RETURNS take Class A shares' actual (or cumulative) return
and show you what would have happened if Class A has performed at a
constant rate
each year. Since the fund is less than a year old, we will report these
numbers in the next report.
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19961130 19961210 085109 S00000000000001
FA Large Cap -CL A SP Standard & Poor 500
00250 SP001
1996/02/20 9475.00 10000.00
1996/02/29 9503.43 9891.39
1996/03/31 9531.85 9986.65
1996/04/30 9598.18 10133.85
1996/05/31 9797.15 10395.20
1996/06/30 9844.53 10434.81
1996/07/31 9370.78 9973.80
1996/08/31 9673.98 10184.14
1996/09/30 10327.75 10757.31
1996/10/31 10441.45 11053.99
1996/11/29 11208.93 11889.57
IMATRL PRASUN SHR__CHT 19961130 19961210 085111 R00000000000013
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Large Cap Fund - Class A on February 20, 1996,
when the fund started, and the current maximum 5.25% sales charge was paid.
As the chart shows, by November 30, 1996, the value of the investment would
have grown to $11,209 - a 12.09% increase on the 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
$11,890 - an 18.90% 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)
ADVISOR LARGE CAP FUND - CLASS T
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can look at
the total percentage change in value, the average annual percentage change,
or the growth of a hypothetical $10,000 investment. A class' total return
includes changes in share price, plus reinvestment of any dividends (or
income) and capital gains (the profits the fund earns when it sells
securities that have grown in value). If Fidelity had not reimbursed
certain class expenses, the life of fund total return would have been
lower.
CUMULATIVE TOTAL RETURNS
PERIOD ENDED NOVEMBER 30, 1996 LIFE OF
FUND
Advisor Large Cap - Class T 18.20%
Advisor Large Cap - Class T 14.06%
(incl. max. 3.50% sales charge)
S&P 500 (registered trademark) 18.90%
CUMULATIVE TOTAL RETURNS show Class T's performance in percentage terms
over a set period - in this case, since the fund started on February 20,
1996. For example, if you invested $1,000 in a fund that had a 5% return
over the past year, the value of your investment would be $1,050. You can
compare Class T's returns to the performance of the Standard & Poor's 500
Index - a widely recognized, unmanaged index of common stocks. This
benchmark includes reinvested dividends and capital gains, if any, and
excludes the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
AVERAGE ANNUAL RETURNS take Class T shares' actual (or cumulative) return
and show you what would have happened if Class T has performed at a
constant rate
each year. Since the fund is less than a year old, we will report these
numbers in the next report.
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19961130 19961210 085906 S00000000000001
FA Large Cap -CL T SP Standard & Poor 500
00534 SP001
1996/02/20 9650.00 10000.00
1996/02/29 9678.95 9891.39
1996/03/31 9707.90 9986.65
1996/04/30 9775.45 10133.85
1996/05/31 9978.10 10395.20
1996/06/30 10026.35 10434.81
1996/07/31 9543.85 9973.80
1996/08/31 9852.65 10184.14
1996/09/30 10518.50 10757.31
1996/10/31 10634.30 11053.99
1996/11/29 11406.30 11889.57
IMATRL PRASUN SHR__CHT 19961130 19961210 085908 R00000000000013
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Large Cap Fund - Class T on February 20, 1996,
when the fund started, and the current maximum 3.50% sales charge was paid.
As the chart shows, by November 30, 1996, the value of the investment would
have grown to $11,406 - a 14.06% increase on the 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
$11,890 - an 18.90% 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)
ADVISOR LARGE CAP FUND - CLASS B
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can look at
the total percentage change in value, the average annual percentage change,
or the growth of a hypothetical $10,000 investment. A class' total return
includes changes in share price, plus reinvestment of any dividends (or
income) and capital gains (the profits the fund earns when it sells
securities that have grown in value). Effective January 2, 1997, Class B's
contingent deferred sales charge is based on a declining scale that ranges
from 5% to 1% on Class B shares redeemed within six years of purchase. This
scale is revised from the previous scale of 4% to 1% on shares redeemed
within five years of purchase. Class B's contingent deferred sales charge
included in the life of fund total return figure is 5%. If Fidelity had not
reimbursed certain class expenses, the life of fund total return would have
been lower.
CUMULATIVE TOTAL RETURNS
PERIOD ENDED NOVEMBER 30, 1996 LIFE OF
FUND
Advisor Large Cap - Class B 17.70%
Advisor Large Cap - Class B 12.70%
(incl. contingent deferred sales charge) 1
S&P 500 (registered trademark) 18.90%
CUMULATIVE TOTAL RETURNS show Class B's performance in percentage terms
over a set period - in this case, since the fund started on February 20,
1996. For example, if you invested $1,000 in a fund that had a 5% return
over the past year, the value of your investment would be $1,050. You can
compare Class B's returns to the performance of the Standard & Poor's 500
Index - a widely recognized, unmanaged index of common stocks. This
benchmark includes reinvested dividends and capital gains, if any, and
excludes the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
AVERAGE ANNUAL RETURNS take Class B shares' actual (or cumulative) return
and show you what would have happened if Class B has performed at a
constant rate
each year. Since the fund is less than a year old, we will report these
numbers in the next report.
1 HAD CLASS B'S CONTINGENT DEFERRED SALES CHARGE SCALE PRIOR TO JANUARY 2,
1997 BEEN REFLECTED, THE CUMULATIVE LIFE OF FUND TOTAL RETURN WOULD HAVE
BEEN 13.70%.
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19960930 19961009 151627 S00000000000001
FA Large Cap CL B S&P 500 Index
00535 SP001
1996/02/20 10000.00 10000.00
1996/02/29 10020.00 9891.39
1996/03/31 10060.00 9986.65
1996/04/30 10120.00 10133.85
1996/05/31 10330.00 10395.20
1996/06/30 10370.00 10434.81
1996/07/31 9860.00 9973.80
1996/08/31 10180.00 10184.14
1996/09/30 10860.00 10757.31
1996/10/31 10970.00 11053.99
1996/11/30 11270.00 11889.57
IMATRL PRASUN SHR__CHT 19960930 19961009 151629 R00000000000123
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Large Cap Fund - Class B on February 20, 1996,
when the fund started, and the applicable contingent deferred sales charge
was paid. As the chart shows, by November 30, 1996, the value of the
investment would have grown to $11,270 - a 12.70% increase on the 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 $11,890 - an 18.90% 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)
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
Paced by the robust performance
of blue chip stocks, the U.S. stock
market posted strong gains for
the year that ended November
30, 1996. The Standard & Poor's
500 Index returned 27.86%
during the period - well above its
long-term average of about 12%.
The stock market spent much of
the past year breaking price and
trading volume records. Solid
corporate earnings reports, large
cash inflows into mutual funds,
widespread optimism and a
generally favorable interest rate
environment propelled share
prices higher. Large capitalization
stocks thrived as investors
sought their lower volatility and
higher degree of liquidity over
smaller cap stocks in an
environment where it was
sometimes difficult to discern the
health of the economy. The Dow
Jones Industrial Average closed
above 6500 for the first time in
November. While short-term
confusion over the direction of
interest rates created a volatile
backdrop in the summer months,
stocks rallied again when the
Federal Reserve Board left
short-term interest rates
unchanged and it appeared
inflation would not be an issue for
the remainder of 1996.
Smaller-company stocks posted
strong gains at the beginning of
1996, but trended downward in
the spring and summer because
their earnings tend to be more
affected by the higher borrowing
costs brought on by higher rates.
When interest rate fears
subsided, these stocks
rebounded, only to fade toward
the end of the period due to
earnings concerns and a general
flight to quality.
An interview with Thomas Sprague, Portfolio Manager of Fidelity Advisor
Large Cap Fund
Q. HOW DID THE FUND PERFORM, TOM?
A. For the period that ended November 30, 1996, the fund's Class A shares
had a total return of 18.30% since the fund's inception on February 20,
1996. The fund's Class T shares and Class B shares returned 18.20% and
17.70%, respectively. For the same period, the Standard & Poor's 500 Index
returned 18.90%.
Q. HOW WOULD YOU CHARACTERIZE THE INVESTING CLIMATE DURING THE PERIOD?
A. It's been pretty benign. Interest rates, after rising early in the year,
were flat to down over the past six months. Corporate earnings have come in
stronger than expected. According to Dow Jones, net income rose 27% on a
year-over-year basis during the third quarter, after a 19% increase in the
second quarter and flat earnings at the beginning of the year. This
combination of good earnings growth and an absence of rising rates allowed
the market to post solid returns during the period.
Q. BEFORE WE BEGIN, WOULD YOU MIND SUMMARIZING WHAT YOU LOOK FOR IN A
COMPANY?
A. Basically, I look for companies that offer three things: strong
short-term earnings momentum, good long-term earnings growth and attractive
valuations. I'm looking for companies that have built some type of
sustainable competitive advantage in manufacturing, distribution, marketing
or R&D. I believe these are the types of companies that can grow their
earnings faster than the market over the long-term and that may offer a few
positive short-term earnings surprises.
Q. LET'S LOOK AT SOME OF THE MAJOR INDUSTRY AREAS IN THE FUND. WHAT
HAPPENED WITH TECHNOLOGY?
A. Technology stocks were a mixed bag. Earlier in the period, we saw rising
inventories, weakening demand and negative earnings announcements from some
of the larger tech companies. Since the market correction in July, however,
not only have the valuations of technology stocks improved, but their
businesses have shown improvement. Inventories are being worked down and
demand has increased - as evident in the uptick in the semiconductor
industry's book-to-bill ratio. As a result, compared to the fund's index,
I've overweighted the technology sector in the fund during the period. Some
tech stocks I favored included chip-maker Intel - which reported a 41%
year-over-year earnings gain for the third quarter - semiconductor company
Adaptec, IBM and networking firm Cisco Systems.
Q. WHAT TYPE OF COMPANY DID YOU LOOK FOR IN HEALTH CARE?
A. I liked pharmaceuticals. Health care stocks, particularly
pharmaceuticals, did well over the period as demand remained strong and
earnings projections were generally met or beaten. In a nutshell,
pharmaceutical usage is increasing fairly rapidly, driven by an aging
population - Baby Boomers are entering their higher prescription-usage
years - and an acceleration of new drug approvals by the FDA. Additionally,
an increasing number of people belong to managed care organizations -
which typically have higher per member drug utilization than traditional
indemnity health insurance plans.
Q. THE FUND ALSO HAS A FAIRLY LARGE POSITION IN FINANCE STOCKS. WHAT'S THE
STORY THERE?
A. I've been able to find many financial companies that have moved away
from traditional banking activities - which depend on the direction of
interest rates - and more toward fee-based financial services. This has
added more stability and predictability to their earnings stream, which is
often reflected in higher price-to-earnings multiples. Additionally, the
traditional banking industry has improved earnings through consolidation,
balance sheet restructuring and cost cutting.
Q. WAS THERE ONE AREA THAT PROVED DISAPPOINTING?
A. The fund was hurt by exposure in the telecommunications area -
specifically, its positions in long-distance and local telephone companies.
AT&T - which the fund no longer owns - didn't perform as well as I
anticipated, as it lost 10% of its value when it announced its earnings
would be adversely effected by a slowdown in the consumer long-distance
market. In addition, as investors began to sort out the ramifications of
the telecommunications law enacted earlier this year, it appeared the law
would hurt local phone companies in the short term by opening up their
markets to long-distance carriers.
Q. WHAT DO YOU SEE GOING FORWARD?
A. Earnings growth and interest rates have the most impact on stock market
performance. Since I don't try to predict where rates are going, I'll stick
to my basic philosophy of looking for companies that offer short-term
earnings momentum, long-term earnings growth and good valuations. If rates
stay where they are, and earnings growth momentum can be sustained, the
market should stay healthy. If something significant happens - be it a rate
hike or a recession - it could be a different ballgame.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.
FUND FACTS
GOAL: to seek long-term
growth of capital by investing
primarily in equity securities of
companies with large market
capitalizations
START DATE: February 20, 1996
SIZE: as of November 30,
1996, more than $45 million
MANAGER: Tom Sprague,
since March 26, 1996; joined
Fidelity in 1989
(checkmark)
TOM SPRAGUE COMPARES AND
CONTRASTS LARGE AND SMALL
COMPANIES:
"Large companies have
typically been around longer
and are more entrenched
within their marketplaces. So,
they're able to develop
capabilities smaller
companies just can't compete
with. A good large company
has lots of weapons in its
arsenal. Take a company like
Walt Disney, for example,
which rarely has "down"
earnings. If it's looking at a
weak period, it just dips
into its film archives and
re-releases "Snow White," for
instance. This gives it a boost
in earnings that smaller movie
companies can't match.
"The drawback to larger
companies is that because of
their sheer size, they normally
don't exhibit the rapid
growth rate typified by smaller
companies. Smaller
companies can also react to
market shifts more quickly."
INVESTMENT CHANGES
TOP TEN STOCKS AS OF NOVEMBER 30, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE STOCKS
6 MONTHS AGO
International Business Machines 2.6 3.0
Corp.
General Electric Co. 2.0 2.3
Merck & Co., Inc. 1.8 1.4
Owens-Illinois, Inc. 1.7 1.4
Phillip Morris Companies, Inc. 1.6 2.1
Cisco Systems, Inc. 1.6 1.3
Adaptec, Inc. 1.5 1.3
Allstate Corp. 1.5 1.2
American Home Products Corp. 1.4 0.9
Columbia/HCA Healthcare Corp. 1.4 1.3
TOP FIVE MARKET SECTORS AS OF NOVEMBER 30, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE MARKET
SECTORS
6 MONTHS AGO
Technology 21.5 18.1
Health 12.7 15.0
Finance 10.7 9.1
Retail & Wholesale 9.3 9.3
Nondurables 7.0 8.1
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF NOVEMBER 30, 1996 * AS OF MAY 31, 1996 **
Row: 1, Col: 1, Value: 9.300000000000001
Row: 1, Col: 2, Value: 40.7
Row: 1, Col: 3, Value: 50.0
Row: 1, Col: 1, Value: 9.0
Row: 1, Col: 2, Value: 41.0
Row: 1, Col: 3, Value: 50.0
Stocks 90.7%
Short-term
investments 9.3%
FOREIGN
INVESTMENTS 3.7%
Stocks 91.0%
Short-term
investments 9.0%
FOREIGN
INVESTMENTS 2.9%
*
**
INVESTMENTS NOVEMBER 30, 1996
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 90.7%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 0.5%
Lockheed Martin Corp. 2,470 $ 223,828
BASIC INDUSTRIES - 3.4%
CHEMICALS & PLASTICS - 1.2%
Air Products & Chemicals, Inc. 300 20,850
Monsanto Co. 5,250 208,688
Praxair, Inc. 6,690 325,301
554,839
PACKAGING & CONTAINERS - 2.1%
Owens-Illinois, Inc. (a) 42,340 783,290
Tupperware Corp. 3,130 165,890
949,180
PAPER & FOREST PRODUCTS - 0.1%
Kimberly-Clark Corp. 600 58,650
TOTAL BASIC INDUSTRIES 1,562,669
CONGLOMERATES - 1.6%
AlliedSignal, Inc. 4,840 354,530
Tyco International Ltd. 6,880 376,680
731,210
CONSTRUCTION & REAL ESTATE - 0.5%
BUILDING MATERIALS - 0.5%
Sherwin-Williams Co. 3,760 213,380
DURABLES - 3.1%
AUTOS, TIRES, & ACCESSORIES - 0.7%
Snap-on Tools Corp. 8,570 310,663
CONSUMER ELECTRONICS - 0.8%
Black & Decker Corp. 7,370 279,139
Newell Co. 3,600 111,600
390,739
HOME FURNISHINGS - 0.6%
Leggett & Platt, Inc. 8,900 272,563
TEXTILES & APPAREL - 1.0%
Jones Apparel Group, Inc. (a) 3,140 96,555
Nine West Group, Inc. (a) 3,200 151,600
Warnaco Group, Inc. Class A 7,070 188,239
436,394
TOTAL DURABLES 1,410,359
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
ENERGY - 4.3%
ENERGY SERVICES - 1.8%
Dresser Industries, Inc. 5,500 $ 180,125
Halliburton Co. 6,500 391,625
Schlumberger Ltd. 2,530 263,120
834,870
OIL & GAS - 2.5%
Anadarko Petroleum Corp. 2,150 143,781
British Petroleum PLC ADR 4,231 587,051
Royal Dutch Petroleum Co. ADR 2,430 412,796
1,143,628
TOTAL ENERGY 1,978,498
FINANCE - 10.7%
BANKS - 2.4%
Bank of New York Co., Inc. 12,980 465,658
NationsBank Corp. 5,930 614,496
1,080,154
CREDIT & OTHER FINANCE - 1.2%
American Express Co. 6,430 335,968
Household International, Inc. 2,430 230,243
566,211
FEDERAL SPONSORED CREDIT - 2.4%
Federal Home Loan Mortgage Corporation 4,160 475,280
Federal National Mortgage Association 15,170 625,763
1,101,043
INSURANCE - 4.7%
AMBAC, Inc. 1,800 123,300
Aetna, Inc. 8,150 587,819
Allstate Corp. 11,480 691,670
American International Group, Inc. 2,000 230,000
MBIA, Inc. 3,380 341,803
UNUM Corp. 2,190 155,764
2,130,356
TOTAL FINANCE 4,877,764
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
HEALTH - 12.7%
DRUGS & PHARMACEUTICALS - 5.8%
Allergan, Inc. 280 $ 8,995
American Home Products Corp. 10,020 643,785
Bristol-Myers Squibb Co. 3,890 442,488
Merck & Co., Inc. 9,770 810,910
Pfizer, Inc. 2,050 183,731
Schering-Plough Corp. 3,230 230,138
SmithKline Beecham PLC ADR 4,380 301,673
2,621,720
MEDICAL EQUIPMENT & SUPPLIES - 3.6%
Baxter International, Inc. 5,740 243,950
Becton, Dickinson & Co. 10,920 458,640
Bergen Brunswig Corp. Class A 11,840 322,640
Cardinal Health, Inc. 960 80,280
Johnson & Johnson 5,940 315,563
St. Jude Medical, Inc. (a) 5,670 236,723
1,657,796
MEDICAL FACILITIES MANAGEMENT - 3.3%
Columbia/HCA Healthcare Corp. 15,930 637,200
HEALTHSOUTH Rehabilitation Corp. (a) 1,200 45,150
Health Management Associates, Inc. Class A (a) 9,495 210,077
Health Care & Retirement Corp. (a) 6,855 187,656
PacifiCare Health Systems, Inc. Class B (a) 2,600 215,800
Tenet Healthcare Corp. (a) 8,800 196,900
1,492,783
TOTAL HEALTH 5,772,299
INDUSTRIAL MACHINERY & EQUIPMENT - 4.3%
ELECTRICAL EQUIPMENT - 2.0%
General Electric Co. 8,800 915,200
INDUSTRIAL MACHINERY & EQUIPMENT - 2.3%
Caterpillar, Inc. 5,700 451,013
Ingersoll-Rand Co. 4,640 215,760
Stanley Works 12,700 374,650
1,041,423
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 1,956,623
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
MEDIA & LEISURE - 5.1%
ENTERTAINMENT - 0.5%
Carnival Cruise Lines, Inc. Class A 4,140 $ 130,928
Disney (Walt) Co. 1,000 73,750
204,678
LEISURE DURABLES & TOYS - 0.3%
Hasbro, Inc. 3,400 139,825
LODGING & GAMING - 2.3%
HFS, Inc. (a) 5,940 384,615
Hilton Hotels Corp. 3,600 105,300
La Quinta Motor Inns, Inc. 7,500 144,375
Marriott International, Inc. 5,750 320,563
Mirage Resorts, Inc. (a) 3,700 89,263
1,044,116
PUBLISHING - 1.3%
Knight-Ridder, Inc. 3,760 157,920
Scholastic Corp. (a) 2,370 176,565
Times Mirror Co. Class A 4,870 255,066
589,551
RESTAURANTS - 0.7%
Brinker International, Inc. (a) 10,590 195,915
Rainforest Cafe, Inc. (a) 4,500 131,625
327,540
TOTAL MEDIA & LEISURE 2,305,710
NONDURABLES - 7.0%
AGRICULTURE - 0.4%
Pioneer Hi-Bred International, Inc. 2,950 205,763
BEVERAGES - 0.9%
Coca-Cola Co. (The) 3,080 157,465
PepsiCo, Inc. 7,880 235,415
392,880
FOODS - 1.4%
ConAgra, Inc. 2,090 111,031
General Mills, Inc. 3,350 212,725
Ralston Purina Group 1,880 143,820
Sysco Corp. 4,570 155,951
623,527
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
NONDURABLES - CONTINUED
HOUSEHOLD PRODUCTS - 1.8%
First Brands Corp. 6,620 $ 189,498
Gillette Co. 2,500 184,375
Procter & Gamble Co. 4,110 446,963
820,836
TOBACCO - 2.5%
Philip Morris Companies, Inc. 7,090 731,156
RJR Nabisco Holdings Corp. 12,560 401,920
1,133,076
TOTAL NONDURABLES 3,176,082
RETAIL & WHOLESALE - 9.3%
APPAREL STORES - 1.0%
Gymboree Corp. (a) 13,160 371,770
Payless ShoeSource, Inc. (a) 2,100 82,163
453,933
DRUG STORES - 1.8%
Eckerd Corp. (a) 4,360 150,420
General Nutrition Companies, Inc. (a) 16,850 290,663
Rite Aid Corp. 9,610 380,796
821,879
GENERAL MERCHANDISE STORES - 1.5%
Dollar General Corp. 4,663 134,047
Sears, Roebuck & Co. 11,400 567,150
701,197
GROCERY STORES - 0.7%
Kroger Co. (The) (a) 5,600 258,300
Safeway, Inc. (a) 1,200 48,750
307,050
RETAIL & WHOLESALE, MISCELLANEOUS - 4.3%
Circuit City Stores, Inc. 6,530 217,939
Lowe's Companies, Inc. 9,270 376,594
PETsMART, Inc. (a) 15,460 394,230
Staples, Inc. (a) 10,800 213,300
Toys "R" Us, Inc. (a) 18,340 632,730
Viking Office Products, Inc. (a) 3,400 106,463
1,941,256
TOTAL RETAIL & WHOLESALE 4,225,315
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
SERVICES - 1.3%
ADVERTISING - 0.7%
Omnicom Group, Inc. 5,870 $ 299,370
SERVICES - 0.6%
Block (H&R), Inc. 3,540 103,545
Service Corp. International 5,680 171,110
274,655
TOTAL SERVICES 574,025
TECHNOLOGY - 21.5%
COMMUNICATIONS EQUIPMENT - 4.7%
Ascend Communications, Inc. (a) 8,000 569,000
Aspect Telecommunications Corp. (a) 1,500 81,750
Cisco Systems, Inc. (a) 10,650 722,869
Network General Corp. (a) 17,400 420,863
Pairgain Technologies, Inc. (a) 1,400 89,425
3Com Corp. (a) 3,320 249,415
2,133,322
COMPUTER SERVICES & SOFTWARE - 5.1%
America Online, Inc. (a) 4,070 143,976
American Management Systems, Inc. (a) 6,100 216,931
Automatic Data Processing, Inc. 8,730 374,299
CUC International, Inc. (a) 21,511 567,339
Ceridian Corp. (a) 2,300 110,688
Computer Sciences Corp. (a) 2,770 217,791
Electronic Data Systems Corp. 3,150 152,381
Equifax, Inc. 4,990 163,423
Oracle Systems Corp. (a) 3,700 181,300
PeopleSoft, Inc. (a) 1,400 128,100
SunGard Data Systems, Inc. (a) 1,300 54,600
2,310,828
COMPUTERS & OFFICE EQUIPMENT - 6.8%
Adaptec, Inc. (a) 18,800 700,300
Bay Networks, Inc. (a) 14,080 376,640
Comdisco, Inc. 2,900 94,250
Compaq Computer Corp. (a) 3,160 250,430
International Business Machines Corp. 7,540 1,201,688
Pitney Bowes, Inc. 8,160 481,440
3,104,748
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TECHNOLOGY - CONTINUED
ELECTRONICS - 3.9%
Analog Devices, Inc. (a) 8,100 $ 260,213
Intel Corp. 5,000 634,375
Linear Technology Corp. 13,300 626,763
Maxim Integrated Products, Inc. (a) 5,280 244,860
1,766,211
PHOTOGRAPHIC EQUIPMENT - 1.0%
Eastman Kodak Co. 5,800 469,800
TOTAL TECHNOLOGY 9,784,909
TRANSPORTATION - 0.7%
RAILROADS - 0.7%
CSX Corp. 7,100 331,925
UTILITIES - 4.7%
CELLULAR - 1.1%
360 Degrees Communications Co. (a) 12,030 285,713
Vodafone Group PLC sponsored ADR 5,530 239,173
524,886
TELEPHONE SERVICES - 3.6%
Ameritech Corp. 6,340 373,268
Cincinnati Bell, Inc. 1,600 95,400
Frontier Corp. 6,830 179,288
LCI International, Inc. (a) 4,400 143,550
MCI Communications Corp. 5,700 173,850
SBC Communications, Inc. 9,740 512,568
WorldCom, Inc. (a) 6,560 151,700
1,629,624
TOTAL UTILITIES 2,154,510
TOTAL COMMON STOCKS
(Cost $36,292,454) 41,279,106
CASH EQUIVALENTS - 9.3%
MATURITY VALUE
AMOUNT (NOTE 1)
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.71%, dated
11/29/96 due 12/2/96 $ 4,232,013 $ 4,230,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $40,522,454) $ 45,509,106
LEGEND
1. Non-income producing
INCOME TAX INFORMATION
At November 30, 1996, the aggregate cost of investment securities for
income tax purposes was $40,583,197. Net unrealized appreciation aggregated
$4,925,909, of which $5,248,715 related to appreciated investment
securities and $322,806 related to depreciated investment securities.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
NOVEMBER 30, 1996
ASSETS
Investment in securities, at value (including repurchase $ 45,509,106
agreements of $4,230,000) (cost $40,522,454) -
See accompanying schedule
Cash 919
Receivable for fund shares sold 185,061
Dividends receivable 45,393
Prepaid expenses 15,091
TOTAL ASSETS 45,755,570
LIABILITIES
Payable for investments purchased $ 141,757
Payable for fund shares redeemed 21,536
Accrued management fee 13,471
Distribution fees payable 17,385
Other payables and accrued expenses 59,727
TOTAL LIABILITIES 253,876
NET ASSETS $ 45,501,694
Net Assets consist of:
Paid in capital $ 40,315,277
Accumulated undistributed net realized gain (loss) 199,765
on investments
Net unrealized appreciation (depreciation) on 4,986,652
investments
NET ASSETS $ 45,501,694
CALCULATION OF MAXIMUM OFFERING PRICE $11.83
CLASS A:
NET ASSET VALUE and redemption price per share
($502,504 (divided by) 42,474 shares)
Maximum offering price per share (100/94.75 of $11.83) $12.49
CLASS B: $11.77
NET ASSET VALUE and offering price per share
($9,721,442 (divided by) 825,843 shares) A
CLASS T: $11.82
NET ASSET VALUE and redemption price per share
($26,133,498 (divided by) 2,210,378 shares)
Maximum offering price per share (100/96.50 of $11.82) $12.25
INSTITUTIONAL CLASS: $11.86
NET ASSET VALUE, offering price and redemption price per
share ($9,144,250 (divided by) 771,165 shares)
</TABLE>
A REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
FEBRUARY 20, 1996 (COMMENCEMENT OF OPERATIONS)
TO NOVEMBER 30, 1996
INVESTMENT INCOME $ 228,266
Dividends
Interest 82,008
TOTAL INCOME 310,274
EXPENSES
Management fee $ 100,564
Transfer agent fees 216
Class A
Class B 8,141
Class T 24,123
Institutional Class 5,999
Distribution fees 161
Class A
Class B 29,159
Class T 49,326
Accounting fees and expenses 46,209
Non-interested trustees' compensation 55
Custodian fees and expenses 26,475
Registration fees 9,945
Class A
Class B 44,522
Class T 47,087
Institutional Class 44,349
Audit 28,909
Legal 14
Miscellaneous 197
Total expenses before reductions 465,451
Expense reductions (136,896) 328,555
NET INVESTMENT INCOME (LOSS) (18,281)
REALIZED AND UNREALIZED GAIN (LOSS) 218,046
Net realized gain (loss) on investment securities
Change in net unrealized appreciation (depreciation) on 4,986,652
investment securities
NET GAIN (LOSS) 5,204,698
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 5,186,417
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C>
FEBRUARY 20, 1996
(COMMENCEMENT
OF OPERATIONS) TO
NOVEMBER 30, 1996
INCREASE (DECREASE) IN NET ASSETS
Operations $ (18,281)
Net investment income (loss)
Net realized gain (loss) 218,046
Change in net unrealized appreciation (depreciation) 4,986,652
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 5,186,417
Share transactions - net increase (decrease) 40,315,277
TOTAL INCREASE (DECREASE) IN NET ASSETS 45,501,694
NET ASSETS
Beginning of period -
End of period $ 45,501,694
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
SEPTEMBER 3, 1996
(COMMENCEMENT
OF OPERATIONS) TO
NOVEMBER 30, 1996
SELECTED PER-SHARE DATA D
Net asset value, beginning of period $ 10.21
Income from Investment Operations
Net investment income .00
Net realized and unrealized gain (loss) 1.62
Total from investment operations 1.62
Net asset value, end of period $ 11.83
TOTAL RETURN B, C 15.87%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 503
Ratio of expenses to average net assets 1.75% A, E
Ratio of net investment income to average net assets .11% A
Portfolio turnover 59% A
Average commission rate F $ .0306
A ANNUALIZED
B TOTAL RETURN DOES NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS
OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE
BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
F A FUND IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM
PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED
IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES
MAY DIFFER.
FINANCIAL HIGHLIGHTS - CLASS B
FEBRUARY 20, 1996
(COMMENCEMENT
OF OPERATIONS) TO
NOVEMBER 30, 1996
SELECTED PER-SHARE DATA D
Net asset value, beginning of period $ 10.00
Income from Investment Operations
Net investment income (loss) (.05)
Net realized and unrealized gain (loss) 1.82
Total from investment operations 1.77
Net asset value, end of period $ 11.77
TOTAL RETURN B, C 17.70%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 9,721
Ratio of expenses to average net assets 2.50% A, E
Ratio of net investment income (loss) to average net assets (.64)% A
Portfolio turnover 59% A
Average commission rate F $ .0306
A ANNUALIZED
B TOTAL RETURN DOES NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE AND
FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED
C THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE
BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
F A FUND IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM
PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED
IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES
MAY DIFFER.
FINANCIAL HIGHLIGHTS - CLASS T
FEBRUARY 20, 1996
(COMMENCEMENT
OF OPERATIONS) TO
NOVEMBER 30, 1996
SELECTED PER-SHARE DATA D
Net asset value, beginning of period $ 10.00
Income from Investment Operations
Net investment income (loss) (.01)
Net realized and unrealized gain (loss) 1.83
Total from investment operations 1.82
Net asset value, end of period $ 11.82
TOTAL RETURN B, C 18.20%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 26,133
Ratio of expenses to average net assets 2.00% A, E
Ratio of net investment income (loss) to average net assets (.14)% A
Portfolio turnover 59% A
Average commission rate F $ .0306
A ANNUALIZED
B TOTAL RETURN DOES NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS
OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE
BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
F A FUND IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM
PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED
IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES
MAY DIFFER.
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
FEBRUARY 20, 1996
(COMMENCEMENT
OF OPERATIONS) TO
NOVEMBER 30, 1996
SELECTED PER-SHARE DATA D
Net asset value, beginning of period $ 10.00
Income from Investment Operations
Net investment income .03
Net realized and unrealized gain (loss) 1.83
Total from investment operations 1.86
Net asset value, end of period $ 11.86
TOTAL RETURN B, C 18.60%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 9,144
Ratio of expenses to average net assets 1.50% A, E
Ratio of expenses to average net assets after expense reductions 1.48% A, G
Ratio of net investment income to average net assets .38% A
Portfolio turnover 59% A
Average commission rate F $ .0306
A ANNUALIZED
B TOTAL RETURN FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE
BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
F A FUND IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM
PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED
IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES
MAY DIFFER.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES (SEE NOTE 5 OF
NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1996
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Large Cap Fund (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, Class B, Class T, and Institutional Class shares,
each of which has equal rights as to assets and voting privileges. Each
class has exclusive voting rights with respect to its distribution plan.
The fund commenced sale of a new Class A of shares on September 3, 1996. On
this date, the original Class A was renamed Class T. Investment income,
realized and unrealized capital gains and losses, the common expenses of
the fund, and certain fund-level expense reductions are allocated on a pro
rata basis to each class based on the relative net assets of each class to
the total net assets of the fund. Each class of shares differs in its
respective distribution, transfer agent, registration, and certain other
class-specific fees, expenses, and expense reductions.
The financial statements have been prepared in conformity with generally
accepted accounting principles which permit management to make certain
estimates and assumptions at the date of the financial statements. The
following summarizes the significant accounting policies of the fund:
SECURITY VALUATION. Securities 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 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 with remaining maturities of sixty days or less for which
quotations are not readily available are valued at amortized cost or
original cost plus accrued interest, both of which approximate current
value.
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. Income receipts
and expense payments are translated into U.S. dollars at the prevailing
exchange rate on the respective dates of the transactions. Purchases and
sales of securities are translated into U.S. dollars at the contractual
currency exchange rates established at the time of each trade.
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, and the difference between
the amount of net investment income accrued and the U.S.
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
FOREIGN CURRENCY TRANSLATION -
CONTINUED
dollar amount actually received. The effects of changes in foreign currency
exchange rates on investments in securities are included with the net
realized and unrealized gain or loss on investment securities.
INCOME TAXES. The fund intends to qualify as a regulated investment company
under Subchapter M of the Internal Revenue Code. By so qualifying, the fund
will not be subject to income taxes to the extent that it distributes
substantially all of its taxable income for its fiscal year. The schedule
of investments includes information regarding income taxes under the
caption "Income Tax Information."
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. Non-cash dividends included in dividend income, if any,
are recorded at the fair market value of the securities received. 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.
PREPAID EXPENSES. Fidelity Management & Research Company (FMR) bears all
organizational expenses except for registering and qualifying the fund and
shares of the fund for distribution under federal and state securities law.
These expenses are borne by each class and amortized over one year.
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 pro rata 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, which may result in distribution
reclassifications, are primarily due to differing treatments for net
operating losses and for losses deferred due to wash sales. The fund also
utilized earnings and profits distributed to shareholders on redemption of
shares as a part of the dividends paid deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect the per-share allocation between net investment income and realized
and unrealized gain (loss). Accumulated undistributed net realized gain
(loss) on investments 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.
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
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 for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
Securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are marked-to-market
daily and maintained at a value at least equal to the principal amount of
the repurchase agreement (including accrued interest). FMR, the fund's
investment adviser, is responsible for determining that the value of the
underlying securities remains in accordance with the market value
requirements stated above.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $45,636,722 and $9,562,314, 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 .2500% to .5200% for the period. In the event that these
rates were lower than the contractual rates in effect during the period,
FMR voluntarily implemented the above rates, as they resulted in the same
or a lower management fee. The annual individual fund fee rate is .30%. For
the period, the management fee was equivalent to an annualized rate of .60%
of average net assets.
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the 1940
Act, the Trustees have adopted separate distribution plans with respect to
the fund's Class A shares (Class A Plan), Class B shares (Class B Plan),
Class T shares (Class T Plan), and Institutional Class shares (collectively
referred to as "the Plans"). Under the Class A, Class B, and Class T Plans,
the fund pays Fidelity Distributors Corporation (FDC), an affiliate of FMR,
a distribution and service fee. This fee is based on annual rates of .25%,
1.00% (of which .75% represents a distribution fee and .25% represents a
shareholder service fee), and .50% of the average net assets of the Class
A, Class B and Class T shares, respectively. For the period, the fund paid
FDC $161, $29,159, and $49,326 under the Class A, Class B, and Class T
Plans, of which
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
DISTRIBUTION AND SERVICE PLAN -
CONTINUED
$161, $7,479, and $49,326 were paid to securities dealers, banks and other
financial institutions for the distribution of Class A, Class B, and Class
T shares, respectively, and providing shareholder support services.
Under the Plans, FMR or FDC may use its resources to pay administrative and
promotional expenses related to the sale of the fund's Class A, Class B,
Class T, and Institutional Class shares. The Plans also authorize payments
to third parties that assist in the sale of the fund's shares or render
shareholder support services.
SALES LOAD. FDC receives a front-end sales charge of up to 5.25% and 3.50%
for selling Class A and Class T shares of the fund, respectively, and the
proceeds of a contingent deferred sales charge levied on Class B share
redemptions occurring within five years of purchase. The Class B charge is
based on declining rates which range from 4% to 1% of the lesser of the
cost of shares at the initial date of purchase or the net asset value of
the redeemed shares, excluding any reinvested dividends and capital gains.
Effective January 2, 1997, the Board of Trustees approved a revised Class B
contingent deferred sales charge for shares purchased on or after January
2, 1997. Under the revised arrangement, FDC receives the proceeds of a
contingent deferred sales charge levied on Class B share redemptions
occuring within six years of purchase. The Class B charge is based on
declining rates which range from 5% to 1% of the lesser of the cost of
shares at the initial date of the purchase or the net asset value of the
redeemed shares, excluding any reinvested dividends and capital gains.
For the period, FDC received sales charges of $1,495 and $203,839 on sales
of Class A and Class T shares of the fund, of which $19 and $171,497 were
paid to securities dealers, banks, and other financial institutions. FDC
also received contingent deferred sales charges of $5,900 on Class B share
redemptions from the fund. When Class B shares are sold, FDC pays
commissions from its own resources to dealers through which the sales are
made.
TRANSFER AGENT FEES. Fidelity Investments Institutional Operations Company
(FIIOC), an affiliate of FMR, is the transfer, dividend disbursing, and
shareholder servicing agent for the fund's Class A, Class B,and
Institutional Class Shares, while State Street Bank and Trust Company
(State Street) (collectively, with FIIOC, referred to as the Transfer
Agents) acts in that capacity for the fund's Class T shares. The Transfer
Agents receive account fees and asset-based fees that vary according to
account size and type of account of the shareholders of the respective
classes of the fund. With respect to the Class T shares, State Street has
delegated certain transfer, dividend disbursing, 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,
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
TRANSFER AGENT FEES -
CONTINUED
except proxy statements. For the period, the transfer agent fees were
equivalent to annualized rates of .34%, .28%, .24%, and .16% of the average
net assets of Class A, Class B, Class T, and Institutional Class,
respectively.
Effective January 1, 1997, FIIOC will replace State Street as the transfer
agent for the fund's Class T shares.
ACCOUNTING FEES. Fidelity Service Co. maintains the fund's accounting
records. The fee is based on the level of average net assets for the month
plus out-of-pocket expenses.
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 $8,248 for the period.
5. EXPENSE REDUCTIONS.
FMR voluntarily agreed to reimburse operating expenses (excluding interest,
taxes, brokerage commissions and extraordinary expenses) above annual rates
of 1.75%, 2.50%, 2.00%, and 1.50% of average net assets for Class A, Class
B, Class T, and Institutional Class, respectively. For the period, the
reimbursement reduced expenses by $9,578, $42,204, $43,648, and $40,416 for
Class A, Class B, Class T, and Institutional Class, respectively.
FMR has also 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 $35 under this arrangement.
In addition, the fund has entered into arrangements with its custodian and
transfer agents whereby interest earned on uninvested cash balances was
used to offset a portion of expenses. During the period, the fund's
custodian fees were reduced by $85 under the custodian arrangement, and
Institutional Class expenses were reduced by $930 under the transfer agent
arrangement.
6. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:
SHARES DOLLARS
PERIOD ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30,
1996 A, B 1996 A, B
CLASS A 42,933 $ 469,990
Shares sold
Shares redeemed (459) (4,991)
Net increase (decrease) 42,474 $ 464,999
CLASS B 859,428 $ 9,066,601
Shares sold
Shares redeemed (33,585) (354,172)
Net increase (decrease) 825,843 $ 8,712,429
CLASS T 2,758,551 $ 28,830,863
Shares sold
Shares redeemed (548,173) (5,771,968)
Net increase (decrease) 2,210,378 $ 23,058,895
INSTITUTIONAL CLASS 774,817 $ 8,117,325
Shares sold
Shares redeemed (3,652) (38,371)
Net increase (decrease) 771,165 $ 8,078,954
A SHARE TRANSACTIONS FOR CLASS B, CLASS T, AND INSTITUTIONAL CLASS ARE FOR
THE PERIOD FEBRUARY 20, 1996 (COMMENCEMENT OF SALE OF SHARES)
TO NOVEMBER 30, 1996.
B SHARE TRANSACTIONS FOR CLASS A ARE FOR THE PERIOD SEPTEMBER 3, 1996
(COMMENCEMENT OF SALE OF SHARES) TO NOVEMBER 30, 1996.
7. BENEFICIAL INTEREST.
At the end of the period, one shareholder was record owner of approximately
12.8% of the total outstanding shares of the fund.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Advisor Series I and the Shareholders of
Fidelity Large Cap Fund:
We have audited the accompanying statement of assets and liabilities of
Fidelity Advisor Series I: Fidelity Large Cap Fund, including the schedule
of portfolio investments, as of November 30, 1996, and the related
statement of operations, the statement of changes in net assets, and the
financial highlights of Class A, Class B, Class T and Institutional Class
for each of the periods indicated therein. These financial statements and
financial highlights are the responsibility of the fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audit.
We conducted our audit 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, 1996 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 audit provides 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 Large Cap Fund as of November
30,1996, the results of its operations, the changes in its net assets, and
the financial highlights of Class A, Class B, Class T and Institutional
Class for each of the periods indicated therein, in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
January 10, 1996
DISTRIBUTIONS
The Board of Trustees of Fidelity Advisor Large Cap Fund voted to pay to
shareholders of record at the opening of business on record date, the
following distributions derived from capital gains realized from sales of
portfolio securities, and dividends derived from net investment income:
PAY DATE RECORD DATE DIVIDENDS CAPITAL GAINS
Class A 12/23/96 12/20/96 $- $.04
1/6/97 1/3/97 $- $.04
Class B 12/23/96 12/20/96 $- $.04
1/6/97 1/3/97 $- $.01
Class T 12/23/96 12/20/96 $- $.04
1/6/97 1/3/97 $- $.02
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.)
Inc., London, England
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
William J. Hayes, Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
Robert H. Morrison, Manager,
Security Transactions
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
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 *
ADVISORY BOARD
William O. McCoy
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
State Street Bank and Trust Company
Boston, MA - Class T
Fidelity Investments Institutional
Operations Company
Boston, MA - Class A & Class B
CUSTODIAN
Brown Brothers Harriman & Co.
Boston, MA
FOCUS FUNDS
Fidelity Advisor Consumer
Industries Fund
Fidelity Advisor Cyclical
Industries Fund
Fidelity Advisor Financial
Services Fund
Fidelity Advisor Health Care Fund
Fidelity Advisor Natural
Resources Fund
Fidelity Advisor Technology Fund
Fidelity Advisor Utilities Growth Fund
GROWTH FUNDS
Fidelity Advisor TechnoQuant
Growth Fund
Fidelity Advisor Overseas Fund
Fidelity Advisor Mid Cap Fund
Fidelity Advisor Equity Growth Fund
Fidelity Advisor Growth
Opportunities Fund
Fidelity Advisor Strategic
Opportunities Fund
Fidelity Advisor Large Cap Fund
GROWTH AND INCOME FUNDS
Fidelity Advisor Equity Income Fund
Fidelity Advisor Balanced Fund
Fidelity Advisor Growth & Income Fund
TAXABLE 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 Intermediate Bond Fund
Fidelity Advisor Short Fixed-Income Fund
MUNICIPAL FUNDS
Fidelity Advisor High Income
Municipal Fund
Fidelity Advisor Municipal Bond Fund
Fidelity Advisor Intermediate Municipal Income Fund
Fidelity Advisor Short-Intermediate Municipal Income Fund
STATE MUNICIPAL FUNDS
Fidelity Advisor California Municipal Income Fund
Fidelity Advisor New York Municipal Income Fund
MONEY MARKET FUNDS
Daily Money Fund: Money Market Portfolio
Daily Money Fund: U.S. Treasury Portfolio
Daily Tax-Exempt Money Fund
(REGISTERED TRADEMARK)
(2_FIDELITY_LOGOS)FIDELITY ADVISOR
(registered trademark)
LARGE CAP
FUND - INSTITUTIONAL CLASS
ANNUAL REPORT
NOVEMBER 30, 1996
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over time.
FUND TALK 6 The manager's review of fund
performance, strategy and outlook.
INVESTMENT CHANGES 9 A summary of major shifts in the
fund's investments over the past six
months.
INVESTMENTS 10 A complete list of the fund's
investments with their market
values.
FINANCIAL STATEMENTS 18 Statements of assets and
liabilities, operations, and changes
in net assets, as well as financial
highlights.
NOTES 25 Notes to the financial statements.
REPORT OF INDEPENDENT 31 The auditors' opinion.
ACCOUNTANTS
DISTRIBUTIONS 32
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR DISTRIBUTION TO
PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN
EFFECTIVE
PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY ADVISOR FUND, INCLUDING CHARGES AND
EXPENSES,
CONTACT YOUR INVESTMENT PROFESSIONAL FOR A FREE PROSPECTUS. READ IT
CAREFULLY BEFORE YOU
INVEST OR SEND MONEY.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
Although stocks have managed to post solid returns throughout 1996, signs
of strength in the economy have led to inflation fears, causing some
uncertainty in bond markets so far this year. In 1995, both stock and bond
markets posted strong results, while the year before, stocks posted
below-average returns and bonds had one of the worst years in history.
These market ups and downs are a normal part of investing, and there are
some basic principles that are helpful for investors to remember in
different types of markets.
If you can leave your money invested over the long term, you can avoid the
results of the volatility that generally accompanies the stock market in
the short term, as we witnessed last year. You also can help to manage some
of the risks of investing through diversification. 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 types of 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. 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 or guaranteed 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. 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
ADVISOR LARGE CAP FUND - INSTITUTIONAL CLASS
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can look at
the total percentage change in value, the average annual percentage change,
or the growth of a hypothetical $10,000 investment. A class' total return
includes changes in share price, plus reinvestment of any dividends (or
income) and capital gains (the profits the fund earns when it sells
securities that have grown in value). If Fidelity had not reimbursed
certain class expenses, the life of fund total return would have been
lower.
CUMULATIVE TOTAL RETURN
PERIOD ENDED NOVEMBER 30, 1996 LIFE OF
FUND
Advisor Large Cap Fund - 18.60%
Institutional Class
S&P 500 (registered trademark) 18.90%
CUMULATIVE TOTAL RETURNS show Institutional Class' performance in
percentage terms over a set period - in this case, since the fund started
on February 20, 1996. For example, if you invested $1,000 in a fund that
had a 5% return over the past year, the value of your investment would be
$1,050. You can compare the Institutional Class' returns to the performance
of the Standard & Poor's 500 Index - a widely recognized, unmanaged index
of common stocks. This benchmark includes reinvested dividends and capital
gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
AVERAGE ANNUAL RETURNS take Institutional Class shares' actual (or
cumulative) return and show you what would have happened if Institutional
Class has performed at a constant rate
each year. Since the fund is less than a year old, we will report these
numbers in the next report.
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19961130 19961219 140805 S00000000000001
FA Large Cap -CL I SP Standard & Poor 500
00536 SP001
1996/02/20 10000.00 10000.00
1996/02/29 10020.00 9891.39
1996/03/31 10060.00 9986.65
1996/04/30 10140.00 10133.85
1996/05/31 10350.00 10395.20
1996/06/30 10400.00 10434.81
1996/07/31 9900.00 9973.80
1996/08/31 10220.00 10184.14
1996/09/30 10910.00 10757.31
1996/10/31 11040.00 11053.99
1996/11/29 11860.00 11889.57
IMATRL PRASUN SHR__CHT 19961130 19961219 140806 R00000000000013
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Large Cap Fund - Institutional Class on
February 20, 1996, when the fund started. As the chart shows, by November
30, 1996, the value of the investment would have grown to $11,860 - an
18.60% increase on the 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 $11,890 - an 18.90% 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)
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
Paced by the robust performance
of blue chip stocks, the U.S. stock
market posted strong gains for
the year that ended November
30, 1996. The Standard & Poor's
500 Index returned 27.86%
during the period - well above its
long-term average of about 12%.
The stock market spent much of
the past year breaking price and
trading volume records. Solid
corporate earnings reports, large
cash inflows into mutual funds,
widespread optimism and a
generally favorable interest rate
environment propelled share
prices higher. Large capitalization
stocks thrived as investors
sought their lower volatility and
higher degree of liquidity over
smaller cap stocks in an
environment where it was
sometimes difficult to discern the
health of the economy. The Dow
Jones Industrial Average closed
above 6500 for the first time in
November. While short-term
confusion over the direction of
interest rates created a volatile
backdrop in the summer months,
stocks rallied again when the
Federal Reserve Board left
short-term interest rates
unchanged and it appeared
inflation would not be an issue for
the remainder of 1996.
Smaller-company stocks posted
strong gains at the beginning of
1996, but trended downward in
the spring and summer because
their earnings tend to be more
affected by the higher borrowing
costs brought on by higher rates.
When interest rate fears
subsided, these stocks
rebounded, only to fade toward
the end of the period due to
earnings concerns and a general
flight to quality.
An interview with Thomas Sprague, Portfolio Manager of Fidelity Advisor
Large Cap Fund
Q. HOW DID THE FUND PERFORM, TOM?
A. For the period that ended November 30, 1996, the fund's Institutional
Class shares had a total return of 18.60% since inception on February 20,
1996. The Standard & Poor's 500 Index returned 18.90% for the same time
period.
Q. HOW WOULD YOU CHARACTERIZE THE INVESTING CLIMATE DURING THE PERIOD?
A. It's been pretty benign. Interest rates, after rising early in the year,
were flat to down over the past six months. Corporate earnings have come in
stronger than expected. According to Dow Jones, net income rose 27% on a
year-over-year basis during the third quarter, after a 19% increase in the
second quarter and flat earnings at the beginning of the year. This
combination of good earnings growth and an absence of rising rates allowed
the market to post solid returns during the period.
Q. BEFORE WE BEGIN, WOULD YOU MIND SUMMARIZING WHAT YOU LOOK FOR IN A
COMPANY?
A. Basically, I look for companies that offer three things: strong
short-term earnings momentum, good long-term earnings growth and attractive
valuations. I'm looking for companies that have built some type of
sustainable competitive advantage in manufacturing, distribution, marketing
or R&D. I believe these are the types of companies that can grow their
earnings faster than the market over the long-term and that may offer a few
positive short-term earnings surprises.
Q. LET'S LOOK AT SOME OF THE MAJOR INDUSTRY AREAS IN THE FUND. WHAT
HAPPENED WITH TECHNOLOGY?
A. Technology stocks were a mixed bag. Earlier in the period, we saw rising
inventories, weakening demand and negative earnings announcements from some
of the larger tech companies. Since the market correction in July, however,
not only have the valuations of technology stocks improved, but their
businesses have shown improvement. Inventories are being worked down and
demand has increased - as evident in the uptick in the semiconductor
industry's book-to-bill ratio. As a result, compared to the fund's index,
I've overweighted the technology sector in the fund during the period. Some
tech stocks I favored included chip-maker Intel - which reported a 41%
year-over-year earnings gain for the third quarter - semiconductor company
Adaptec, IBM and networking firm Cisco Systems.
Q. WHAT TYPE OF COMPANY DID YOU LOOK FOR IN HEALTH CARE?
A. I liked pharmaceuticals. Health care stocks, particularly
pharmaceuticals, did well over the period as demand remained strong and
earnings projections were generally met or beaten. In a nutshell,
pharmaceutical usage is increasing fairly rapidly, driven by an aging
population - Baby Boomers are entering their higher prescription-usage
years - and an acceleration of new drug approvals by the FDA. Additionally,
an increasing number of people belong to managed care organizations -
which typically have higher per member drug utilization than traditional
indemnity health insurance plans.
Q. THE FUND ALSO HAS A FAIRLY LARGE POSITION IN FINANCE STOCKS. WHAT'S THE
STORY THERE?
A. I've been able to find many financial companies that have moved away
from traditional banking activities - which depend on the direction of
interest rates - and more toward fee-based financial services. This has
added more stability and predictability to their earnings stream, which is
often reflected in higher price-to-earnings multiples. Additionally, the
traditional banking industry has improved earnings through consolidation,
balance sheet restructuring and cost cutting.
Q. WAS THERE ONE AREA THAT PROVED DISAPPOINTING?
A. The fund was hurt by exposure in the telecommunications area -
specifically, its positions in long-distance and local telephone companies.
AT&T - which the fund no longer owns - didn't perform as well as I
anticipated, as it lost 10% of its value when it announced its earnings
would be adversely effected by a slowdown in the consumer long-distance
market. In addition, as investors began to sort out the ramifications of
the telecommunications law enacted earlier this year, it appeared the law
would hurt local phone companies in the short term by opening up their
markets to long-distance carriers.
Q. WHAT DO YOU SEE GOING FORWARD?
A. Earnings growth and interest rates have the most impact on stock market
performance. Since I don't try to predict where rates are going, I'll stick
to my basic philosophy of looking for companies that offer short-term
earnings momentum, long-term earnings growth and good valuations. If rates
stay where they are, and earnings growth momentum can be sustained, the
market should stay healthy. If something significant happens - be it a rate
hike or a recession - it could be a different ballgame.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.
FUND FACTS
GOAL: to seek long-term
growth of capital by investing
primarily in equity securities of
companies with large market
capitalizations
START DATE: February 20, 1996
SIZE: as of November 30,
1996, more than $45 million
MANAGER: Tom Sprague,
since March 26, 1996; joined
Fidelity in 1989
(checkmark)
TOM SPRAGUE COMPARES AND
CONTRASTS LARGE AND SMALL
COMPANIES:
"Large companies have
typically been around longer
and are more entrenched
within their marketplaces. So,
they're able to develop
capabilities smaller
companies just can't compete
with. A good large company
has lots of weapons in its
arsenal. Take a company like
Walt Disney, for example,
which rarely has "down"
earnings. If it's looking at a
weak period, it just dips
into its film archives and
re-releases "Snow White," for
instance. This gives it a boost
in earnings that smaller movie
companies can't match.
"The drawback to larger
companies is that because of
their sheer size, they normally
don't exhibit the rapid
growth rate typified by smaller
companies. Smaller
companies can also react to
market shifts more quickly."
INVESTMENT CHANGES
TOP TEN STOCKS AS OF NOVEMBER 30, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE STOCKS
6 MONTHS AGO
International Business Machines 2.6 3.0
Corp.
General Electric Co. 2.0 2.3
Merck & Co., Inc. 1.8 1.4
Owens-Illinois, Inc. 1.7 1.4
Phillip Morris Companies, Inc. 1.6 2.1
Cisco Systems, Inc. 1.6 1.3
Adaptec, Inc. 1.5 1.3
Allstate Corp. 1.5 1.2
American Home Products Corp. 1.4 0.9
Columbia/HCA Healthcare Corp. 1.4 1.3
TOP FIVE MARKET SECTORS AS OF NOVEMBER 30, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE MARKET
SECTORS
6 MONTHS AGO
Technology 21.5 18.1
Health 12.7 15.0
Finance 10.7 9.1
Retail & Wholesale 9.3 9.3
Nondurables 7.0 8.1
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF NOVEMBER 30, 1996 * AS OF MAY 31, 1996 **
Row: 1, Col: 1, Value: 9.300000000000001
Row: 1, Col: 2, Value: 40.7
Row: 1, Col: 3, Value: 50.0
Row: 1, Col: 1, Value: 9.0
Row: 1, Col: 2, Value: 41.0
Row: 1, Col: 3, Value: 50.0
Stocks 90.7%
Short-term
investments 9.3%
FOREIGN
INVESTMENTS 3.7%
Stocks 91.0%
Short-term
investments 9.0%
FOREIGN
INVESTMENTS 2.9%
*
**
INVESTMENTS NOVEMBER 30, 1996
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 90.7%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 0.5%
Lockheed Martin Corp. 2,470 $ 223,828
BASIC INDUSTRIES - 3.4%
CHEMICALS & PLASTICS - 1.2%
Air Products & Chemicals, Inc. 300 20,850
Monsanto Co. 5,250 208,688
Praxair, Inc. 6,690 325,301
554,839
PACKAGING & CONTAINERS - 2.1%
Owens-Illinois, Inc. (a) 42,340 783,290
Tupperware Corp. 3,130 165,890
949,180
PAPER & FOREST PRODUCTS - 0.1%
Kimberly-Clark Corp. 600 58,650
TOTAL BASIC INDUSTRIES 1,562,669
CONGLOMERATES - 1.6%
AlliedSignal, Inc. 4,840 354,530
Tyco International Ltd. 6,880 376,680
731,210
CONSTRUCTION & REAL ESTATE - 0.5%
BUILDING MATERIALS - 0.5%
Sherwin-Williams Co. 3,760 213,380
DURABLES - 3.1%
AUTOS, TIRES, & ACCESSORIES - 0.7%
Snap-on Tools Corp. 8,570 310,663
CONSUMER ELECTRONICS - 0.8%
Black & Decker Corp. 7,370 279,139
Newell Co. 3,600 111,600
390,739
HOME FURNISHINGS - 0.6%
Leggett & Platt, Inc. 8,900 272,563
TEXTILES & APPAREL - 1.0%
Jones Apparel Group, Inc. (a) 3,140 96,555
Nine West Group, Inc. (a) 3,200 151,600
Warnaco Group, Inc. Class A 7,070 188,239
436,394
TOTAL DURABLES 1,410,359
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
ENERGY - 4.3%
ENERGY SERVICES - 1.8%
Dresser Industries, Inc. 5,500 $ 180,125
Halliburton Co. 6,500 391,625
Schlumberger Ltd. 2,530 263,120
834,870
OIL & GAS - 2.5%
Anadarko Petroleum Corp. 2,150 143,781
British Petroleum PLC ADR 4,231 587,051
Royal Dutch Petroleum Co. ADR 2,430 412,796
1,143,628
TOTAL ENERGY 1,978,498
FINANCE - 10.7%
BANKS - 2.4%
Bank of New York Co., Inc. 12,980 465,658
NationsBank Corp. 5,930 614,496
1,080,154
CREDIT & OTHER FINANCE - 1.2%
American Express Co. 6,430 335,968
Household International, Inc. 2,430 230,243
566,211
FEDERAL SPONSORED CREDIT - 2.4%
Federal Home Loan Mortgage Corporation 4,160 475,280
Federal National Mortgage Association 15,170 625,763
1,101,043
INSURANCE - 4.7%
AMBAC, Inc. 1,800 123,300
Aetna, Inc. 8,150 587,819
Allstate Corp. 11,480 691,670
American International Group, Inc. 2,000 230,000
MBIA, Inc. 3,380 341,803
UNUM Corp. 2,190 155,764
2,130,356
TOTAL FINANCE 4,877,764
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
HEALTH - 12.7%
DRUGS & PHARMACEUTICALS - 5.8%
Allergan, Inc. 280 $ 8,995
American Home Products Corp. 10,020 643,785
Bristol-Myers Squibb Co. 3,890 442,488
Merck & Co., Inc. 9,770 810,910
Pfizer, Inc. 2,050 183,731
Schering-Plough Corp. 3,230 230,138
SmithKline Beecham PLC ADR 4,380 301,673
2,621,720
MEDICAL EQUIPMENT & SUPPLIES - 3.6%
Baxter International, Inc. 5,740 243,950
Becton, Dickinson & Co. 10,920 458,640
Bergen Brunswig Corp. Class A 11,840 322,640
Cardinal Health, Inc. 960 80,280
Johnson & Johnson 5,940 315,563
St. Jude Medical, Inc. (a) 5,670 236,723
1,657,796
MEDICAL FACILITIES MANAGEMENT - 3.3%
Columbia/HCA Healthcare Corp. 15,930 637,200
HEALTHSOUTH Rehabilitation Corp. (a) 1,200 45,150
Health Management Associates, Inc. Class A (a) 9,495 210,077
Health Care & Retirement Corp. (a) 6,855 187,656
PacifiCare Health Systems, Inc. Class B (a) 2,600 215,800
Tenet Healthcare Corp. (a) 8,800 196,900
1,492,783
TOTAL HEALTH 5,772,299
INDUSTRIAL MACHINERY & EQUIPMENT - 4.3%
ELECTRICAL EQUIPMENT - 2.0%
General Electric Co. 8,800 915,200
INDUSTRIAL MACHINERY & EQUIPMENT - 2.3%
Caterpillar, Inc. 5,700 451,013
Ingersoll-Rand Co. 4,640 215,760
Stanley Works 12,700 374,650
1,041,423
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 1,956,623
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
MEDIA & LEISURE - 5.1%
ENTERTAINMENT - 0.5%
Carnival Cruise Lines, Inc. Class A 4,140 $ 130,928
Disney (Walt) Co. 1,000 73,750
204,678
LEISURE DURABLES & TOYS - 0.3%
Hasbro, Inc. 3,400 139,825
LODGING & GAMING - 2.3%
HFS, Inc. (a) 5,940 384,615
Hilton Hotels Corp. 3,600 105,300
La Quinta Motor Inns, Inc. 7,500 144,375
Marriott International, Inc. 5,750 320,563
Mirage Resorts, Inc. (a) 3,700 89,263
1,044,116
PUBLISHING - 1.3%
Knight-Ridder, Inc. 3,760 157,920
Scholastic Corp. (a) 2,370 176,565
Times Mirror Co. Class A 4,870 255,066
589,551
RESTAURANTS - 0.7%
Brinker International, Inc. (a) 10,590 195,915
Rainforest Cafe, Inc. (a) 4,500 131,625
327,540
TOTAL MEDIA & LEISURE 2,305,710
NONDURABLES - 7.0%
AGRICULTURE - 0.4%
Pioneer Hi-Bred International, Inc. 2,950 205,763
BEVERAGES - 0.9%
Coca-Cola Co. (The) 3,080 157,465
PepsiCo, Inc. 7,880 235,415
392,880
FOODS - 1.4%
ConAgra, Inc. 2,090 111,031
General Mills, Inc. 3,350 212,725
Ralston Purina Group 1,880 143,820
Sysco Corp. 4,570 155,951
623,527
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
NONDURABLES - CONTINUED
HOUSEHOLD PRODUCTS - 1.8%
First Brands Corp. 6,620 $ 189,498
Gillette Co. 2,500 184,375
Procter & Gamble Co. 4,110 446,963
820,836
TOBACCO - 2.5%
Philip Morris Companies, Inc. 7,090 731,156
RJR Nabisco Holdings Corp. 12,560 401,920
1,133,076
TOTAL NONDURABLES 3,176,082
RETAIL & WHOLESALE - 9.3%
APPAREL STORES - 1.0%
Gymboree Corp. (a) 13,160 371,770
Payless ShoeSource, Inc. (a) 2,100 82,163
453,933
DRUG STORES - 1.8%
Eckerd Corp. (a) 4,360 150,420
General Nutrition Companies, Inc. (a) 16,850 290,663
Rite Aid Corp. 9,610 380,796
821,879
GENERAL MERCHANDISE STORES - 1.5%
Dollar General Corp. 4,663 134,047
Sears, Roebuck & Co. 11,400 567,150
701,197
GROCERY STORES - 0.7%
Kroger Co. (The) (a) 5,600 258,300
Safeway, Inc. (a) 1,200 48,750
307,050
RETAIL & WHOLESALE, MISCELLANEOUS - 4.3%
Circuit City Stores, Inc. 6,530 217,939
Lowe's Companies, Inc. 9,270 376,594
PETsMART, Inc. (a) 15,460 394,230
Staples, Inc. (a) 10,800 213,300
Toys "R" Us, Inc. (a) 18,340 632,730
Viking Office Products, Inc. (a) 3,400 106,463
1,941,256
TOTAL RETAIL & WHOLESALE 4,225,315
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
SERVICES - 1.3%
ADVERTISING - 0.7%
Omnicom Group, Inc. 5,870 $ 299,370
SERVICES - 0.6%
Block (H&R), Inc. 3,540 103,545
Service Corp. International 5,680 171,110
274,655
TOTAL SERVICES 574,025
TECHNOLOGY - 21.5%
COMMUNICATIONS EQUIPMENT - 4.7%
Ascend Communications, Inc. (a) 8,000 569,000
Aspect Telecommunications Corp. (a) 1,500 81,750
Cisco Systems, Inc. (a) 10,650 722,869
Network General Corp. (a) 17,400 420,863
Pairgain Technologies, Inc. (a) 1,400 89,425
3Com Corp. (a) 3,320 249,415
2,133,322
COMPUTER SERVICES & SOFTWARE - 5.1%
America Online, Inc. (a) 4,070 143,976
American Management Systems, Inc. (a) 6,100 216,931
Automatic Data Processing, Inc. 8,730 374,299
CUC International, Inc. (a) 21,511 567,339
Ceridian Corp. (a) 2,300 110,688
Computer Sciences Corp. (a) 2,770 217,791
Electronic Data Systems Corp. 3,150 152,381
Equifax, Inc. 4,990 163,423
Oracle Systems Corp. (a) 3,700 181,300
PeopleSoft, Inc. (a) 1,400 128,100
SunGard Data Systems, Inc. (a) 1,300 54,600
2,310,828
COMPUTERS & OFFICE EQUIPMENT - 6.8%
Adaptec, Inc. (a) 18,800 700,300
Bay Networks, Inc. (a) 14,080 376,640
Comdisco, Inc. 2,900 94,250
Compaq Computer Corp. (a) 3,160 250,430
International Business Machines Corp. 7,540 1,201,688
Pitney Bowes, Inc. 8,160 481,440
3,104,748
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TECHNOLOGY - CONTINUED
ELECTRONICS - 3.9%
Analog Devices, Inc. (a) 8,100 $ 260,213
Intel Corp. 5,000 634,375
Linear Technology Corp. 13,300 626,763
Maxim Integrated Products, Inc. (a) 5,280 244,860
1,766,211
PHOTOGRAPHIC EQUIPMENT - 1.0%
Eastman Kodak Co. 5,800 469,800
TOTAL TECHNOLOGY 9,784,909
TRANSPORTATION - 0.7%
RAILROADS - 0.7%
CSX Corp. 7,100 331,925
UTILITIES - 4.7%
CELLULAR - 1.1%
360 Degrees Communications Co. (a) 12,030 285,713
Vodafone Group PLC sponsored ADR 5,530 239,173
524,886
TELEPHONE SERVICES - 3.6%
Ameritech Corp. 6,340 373,268
Cincinnati Bell, Inc. 1,600 95,400
Frontier Corp. 6,830 179,288
LCI International, Inc. (a) 4,400 143,550
MCI Communications Corp. 5,700 173,850
SBC Communications, Inc. 9,740 512,568
WorldCom, Inc. (a) 6,560 151,700
1,629,624
TOTAL UTILITIES 2,154,510
TOTAL COMMON STOCKS
(Cost $36,292,454) 41,279,106
CASH EQUIVALENTS - 9.3%
MATURITY VALUE
AMOUNT (NOTE 1)
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.71%, dated
11/29/96 due 12/2/96 $ 4,232,013 $ 4,230,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $40,522,454) $ 45,509,106
LEGEND
1. Non-income producing
INCOME TAX INFORMATION
At November 30, 1996, the aggregate cost of investment securities for
income tax purposes was $40,583,197. Net unrealized appreciation aggregated
$4,925,909, of which $5,248,715 related to appreciated investment
securities and $322,806 related to depreciated investment securities.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
NOVEMBER 30, 1996
ASSETS
Investment in securities, at value (including repurchase $ 45,509,106
agreements of $4,230,000) (cost $40,522,454) -
See accompanying schedule
Cash 919
Receivable for fund shares sold 185,061
Dividends receivable 45,393
Prepaid expenses 15,091
TOTAL ASSETS 45,755,570
LIABILITIES
Payable for investments purchased $ 141,757
Payable for fund shares redeemed 21,536
Accrued management fee 13,471
Distribution fees payable 17,385
Other payables and accrued expenses 59,727
TOTAL LIABILITIES 253,876
NET ASSETS $ 45,501,694
Net Assets consist of:
Paid in capital $ 40,315,277
Accumulated undistributed net realized gain (loss) 199,765
on investments
Net unrealized appreciation (depreciation) on 4,986,652
investments
NET ASSETS $ 45,501,694
CALCULATION OF MAXIMUM OFFERING PRICE $11.83
CLASS A:
NET ASSET VALUE and redemption price per share
($502,504 (divided by) 42,474 shares)
Maximum offering price per share (100/94.75 of $11.83) $12.49
CLASS B: $11.77
NET ASSET VALUE and offering price per share
($9,721,442 (divided by) 825,843 shares) A
CLASS T: $11.82
NET ASSET VALUE and redemption price per share
($26,133,498 (divided by) 2,210,378 shares)
Maximum offering price per share (100/96.50 of $11.82) $12.25
INSTITUTIONAL CLASS: $11.86
NET ASSET VALUE, offering price and redemption price per
share ($9,144,250 (divided by) 771,165 shares)
</TABLE>
A REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
FEBRUARY 20, 1996 (COMMENCEMENT OF OPERATIONS)
TO NOVEMBER 30, 1996
INVESTMENT INCOME $ 228,266
Dividends
Interest 82,008
TOTAL INCOME 310,274
EXPENSES
Management fee $ 100,564
Transfer agent fees 216
Class A
Class B 8,141
Class T 24,123
Institutional Class 5,999
Distribution fees 161
Class A
Class B 29,159
Class T 49,326
Accounting fees and expenses 46,209
Non-interested trustees' compensation 55
Custodian fees and expenses 26,475
Registration fees 9,945
Class A
Class B 44,522
Class T 47,087
Institutional Class 44,349
Audit 28,909
Legal 14
Miscellaneous 197
Total expenses before reductions 465,451
Expense reductions (136,896) 328,555
NET INVESTMENT INCOME (LOSS) (18,281)
REALIZED AND UNREALIZED GAIN (LOSS) 218,046
Net realized gain (loss) on investment securities
Change in net unrealized appreciation (depreciation) on 4,986,652
investment securities
NET GAIN (LOSS) 5,204,698
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 5,186,417
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C>
FEBRUARY 20, 1996
(COMMENCEMENT
OF OPERATIONS) TO
NOVEMBER 30, 1996
INCREASE (DECREASE) IN NET ASSETS
Operations $ (18,281)
Net investment income (loss)
Net realized gain (loss) 218,046
Change in net unrealized appreciation (depreciation) 4,986,652
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 5,186,417
Share transactions - net increase (decrease) 40,315,277
TOTAL INCREASE (DECREASE) IN NET ASSETS 45,501,694
NET ASSETS
Beginning of period -
End of period $ 45,501,694
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
SEPTEMBER 3, 1996
(COMMENCEMENT
OF OPERATIONS) TO
NOVEMBER 30, 1996
SELECTED PER-SHARE DATA D
Net asset value, beginning of period $ 10.21
Income from Investment Operations
Net investment income .00
Net realized and unrealized gain (loss) 1.62
Total from investment operations 1.62
Net asset value, end of period $ 11.83
TOTAL RETURN B, C 15.87%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 503
Ratio of expenses to average net assets 1.75% A, E
Ratio of net investment income to average net assets .11% A
Portfolio turnover 59% A
Average commission rate F $ .0306
A ANNUALIZED
B TOTAL RETURN DOES NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS
OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE
BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
F A FUND IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM
PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED
IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES
MAY DIFFER.
FINANCIAL HIGHLIGHTS - CLASS B
FEBRUARY 20, 1996
(COMMENCEMENT
OF OPERATIONS) TO
NOVEMBER 30, 1996
SELECTED PER-SHARE DATA D
Net asset value, beginning of period $ 10.00
Income from Investment Operations
Net investment income (loss) (.05)
Net realized and unrealized gain (loss) 1.82
Total from investment operations 1.77
Net asset value, end of period $ 11.77
TOTAL RETURN B, C 17.70%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 9,721
Ratio of expenses to average net assets 2.50% A, E
Ratio of net investment income (loss) to average net assets (.64)% A
Portfolio turnover 59% A
Average commission rate F $ .0306
A ANNUALIZED
B TOTAL RETURN DOES NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE AND
FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED
C THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE
BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
F A FUND IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM
PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED
IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES
MAY DIFFER.
FINANCIAL HIGHLIGHTS - CLASS T
FEBRUARY 20, 1996
(COMMENCEMENT
OF OPERATIONS) TO
NOVEMBER 30, 1996
SELECTED PER-SHARE DATA D
Net asset value, beginning of period $ 10.00
Income from Investment Operations
Net investment income (loss) (.01)
Net realized and unrealized gain (loss) 1.83
Total from investment operations 1.82
Net asset value, end of period $ 11.82
TOTAL RETURN B, C 18.20%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 26,133
Ratio of expenses to average net assets 2.00% A, E
Ratio of net investment income (loss) to average net assets (.14)% A
Portfolio turnover 59% A
Average commission rate F $ .0306
A ANNUALIZED
B TOTAL RETURN DOES NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS
OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE
BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
F A FUND IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM
PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED
IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES
MAY DIFFER.
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
FEBRUARY 20, 1996
(COMMENCEMENT
OF OPERATIONS) TO
NOVEMBER 30, 1996
SELECTED PER-SHARE DATA D
Net asset value, beginning of period $ 10.00
Income from Investment Operations
Net investment income .03
Net realized and unrealized gain (loss) 1.83
Total from investment operations 1.86
Net asset value, end of period $ 11.86
TOTAL RETURN B, C 18.60%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 9,144
Ratio of expenses to average net assets 1.50% A, E
Ratio of expenses to average net assets after expense reductions 1.48% A, G
Ratio of net investment income to average net assets .38% A
Portfolio turnover 59% A
Average commission rate F $ .0306
A ANNUALIZED
B TOTAL RETURN FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE
BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
F A FUND IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM
PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED
IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES
MAY DIFFER.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES (SEE NOTE 5 OF
NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1996
8. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Large Cap Fund (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, Class B, Class T, and Institutional Class shares,
each of which has equal rights as to assets and voting privileges. Each
class has exclusive voting rights with respect to its distribution plan.
The fund commenced sale of a new Class A of shares on September 3, 1996. On
this date, the original Class A was renamed Class T. Investment income,
realized and unrealized capital gains and losses, the common expenses of
the fund, and certain fund-level expense reductions are allocated on a pro
rata basis to each class based on the relative net assets of each class to
the total net assets of the fund. Each class of shares differs in its
respective distribution, transfer agent, registration, and certain other
class-specific fees, expenses, and expense reductions.
The financial statements have been prepared in conformity with generally
accepted accounting principles which permit management to make certain
estimates and assumptions at the date of the financial statements. The
following summarizes the significant accounting policies of the fund:
SECURITY VALUATION. Securities 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 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 with remaining maturities of sixty days or less for which
quotations are not readily available are valued at amortized cost or
original cost plus accrued interest, both of which approximate current
value.
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. Income receipts
and expense payments are translated into U.S. dollars at the prevailing
exchange rate on the respective dates of the transactions. Purchases and
sales of securities are translated into U.S. dollars at the contractual
currency exchange rates established at the time of each trade.
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, and the difference between
the amount of net investment income accrued and the U.S.
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
FOREIGN CURRENCY TRANSLATION -
CONTINUED
dollar amount actually received. The effects of changes in foreign currency
exchange rates on investments in securities are included with the net
realized and unrealized gain or loss on investment securities.
INCOME TAXES. The fund intends to qualify as a regulated investment company
under Subchapter M of the Internal Revenue Code. By so qualifying, the fund
will not be subject to income taxes to the extent that it distributes
substantially all of its taxable income for its fiscal year. The schedule
of investments includes information regarding income taxes under the
caption "Income Tax Information."
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. Non-cash dividends included in dividend income, if any,
are recorded at the fair market value of the securities received. 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.
PREPAID EXPENSES. Fidelity Management & Research Company (FMR) bears all
organizational expenses except for registering and qualifying the fund and
shares of the fund for distribution under federal and state securities law.
These expenses are borne by each class and amortized over one year.
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 pro rata 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, which may result in distribution
reclassifications, are primarily due to differing treatments for net
operating losses and for losses deferred due to wash sales. The fund also
utilized earnings and profits distributed to shareholders on redemption of
shares as a part of the dividends paid deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital and may
affect the per-share allocation between net investment income and realized
and unrealized gain (loss). Accumulated undistributed net realized gain
(loss) on investments 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.
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
9. OPERATING POLICIES.
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 for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
Securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are marked-to-market
daily and maintained at a value at least equal to the principal amount of
the repurchase agreement (including accrued interest). FMR, the fund's
investment adviser, is responsible for determining that the value of the
underlying securities remains in accordance with the market value
requirements stated above.
10. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $45,636,722 and $9,562,314, respectively.
11. 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 .2500% to .5200% for the period. In the event that these
rates were lower than the contractual rates in effect during the period,
FMR voluntarily implemented the above rates, as they resulted in the same
or a lower management fee. The annual individual fund fee rate is .30%. For
the period, the management fee was equivalent to an annualized rate of .60%
of average net assets.
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the 1940
Act, the Trustees have adopted separate distribution plans with respect to
the fund's Class A shares (Class A Plan), Class B shares (Class B Plan),
Class T shares (Class T Plan), and Institutional Class shares (collectively
referred to as "the Plans"). Under the Class A, Class B, and Class T Plans,
the fund pays Fidelity Distributors Corporation (FDC), an affiliate of FMR,
a distribution and service fee. This fee is based on annual rates of .25%,
1.00% (of which .75% represents a distribution fee and .25% represents a
shareholder service fee), and .50% of the average net assets of the Class
A, Class B and Class T shares, respectively. For the period, the fund paid
FDC $161, $29,159, and $49,326 under the Class A, Class B, and Class T
Plans, of which
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
DISTRIBUTION AND SERVICE PLAN -
CONTINUED
$161, $7,479, and $49,326 were paid to securities dealers, banks and other
financial institutions for the distribution of Class A, Class B, and Class
T shares, respectively, and providing shareholder support services.
Under the Plans, FMR or FDC may use its resources to pay administrative and
promotional expenses related to the sale of the fund's Class A, Class B,
Class T, and Institutional Class shares. The Plans also authorize payments
to third parties that assist in the sale of the fund's shares or render
shareholder support services.
SALES LOAD. FDC receives a front-end sales charge of up to 5.25% and 3.50%
for selling Class A and Class T shares of the fund, respectively, and the
proceeds of a contingent deferred sales charge levied on Class B share
redemptions occurring within five years of purchase. The Class B charge is
based on declining rates which range from 4% to 1% of the lesser of the
cost of shares at the initial date of purchase or the net asset value of
the redeemed shares, excluding any reinvested dividends and capital gains.
Effective January 2, 1997, the Board of Trustees approved a revised Class B
contingent deferred sales charge for shares purchased on or after January
2, 1997. Under the revised arrangement, FDC receives the proceeds of a
contingent deferred sales charge levied on Class B share redemptions
occuring within six years of purchase. The Class B charge is based on
declining rates which range from 5% to 1% of the lesser of the cost of
shares at the initial date of the purchase or the net asset value of the
redeemed shares, excluding any reinvested dividends and capital gains.
For the period, FDC received sales charges of $1,495 and $203,839 on sales
of Class A and Class T shares of the fund, of which $19 and $171,497 were
paid to securities dealers, banks, and other financial institutions. FDC
also received contingent deferred sales charges of $5,900 on Class B share
redemptions from the fund. When Class B shares are sold, FDC pays
commissions from its own resources to dealers through which the sales are
made.
TRANSFER AGENT FEES. Fidelity Investments Institutional Operations Company
(FIIOC), an affiliate of FMR, is the transfer, dividend disbursing, and
shareholder servicing agent for the fund's Class A, Class B,and
Institutional Class Shares, while State Street Bank and Trust Company
(State Street) (collectively, with FIIOC, referred to as the Transfer
Agents) acts in that capacity for the fund's Class T shares. The Transfer
Agents receive account fees and asset-based fees that vary according to
account size and type of account of the shareholders of the respective
classes of the fund. With respect to the Class T shares, State Street has
delegated certain transfer, dividend disbursing, 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,
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES -
CONTINUED
TRANSFER AGENT FEES -
CONTINUED
except proxy statements. For the period, the transfer agent fees were
equivalent to annualized rates of .34%, .28%, .24%, and .16% of the average
net assets of Class A, Class B, Class T, and Institutional Class,
respectively.
Effective January 1, 1997, FIIOC will replace State Street as the transfer
agent for the fund's Class T shares.
ACCOUNTING FEES. Fidelity Service Co. maintains the fund's accounting
records. The fee is based on the level of average net assets for the month
plus out-of-pocket expenses.
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 $8,248 for the period.
12. EXPENSE REDUCTIONS.
FMR voluntarily agreed to reimburse operating expenses (excluding interest,
taxes, brokerage commissions and extraordinary expenses) above annual rates
of 1.75%, 2.50%, 2.00%, and 1.50% of average net assets for Class A, Class
B, Class T, and Institutional Class, respectively. For the period, the
reimbursement reduced expenses by $9,578, $42,204, $43,648, and $40,416 for
Class A, Class B, Class T, and Institutional Class, respectively.
FMR has also 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 $35 under this arrangement.
In addition, the fund has entered into arrangements with its custodian and
transfer agents whereby interest earned on uninvested cash balances was
used to offset a portion of expenses. During the period, the fund's
custodian fees were reduced by $85 under the custodian arrangement, and
Institutional Class expenses were reduced by $930 under the transfer agent
arrangement.
13. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:
SHARES DOLLARS
PERIOD ENDED PERIOD ENDED
NOVEMBER 30, NOVEMBER 30,
1996 A, B 1996 A, B
CLASS A 42,933 $ 469,990
Shares sold
Shares redeemed (459) (4,991)
Net increase (decrease) 42,474 $ 464,999
CLASS B 859,428 $ 9,066,601
Shares sold
Shares redeemed (33,585) (354,172)
Net increase (decrease) 825,843 $ 8,712,429
CLASS T 2,758,551 $ 28,830,863
Shares sold
Shares redeemed (548,173) (5,771,968)
Net increase (decrease) 2,210,378 $ 23,058,895
INSTITUTIONAL CLASS 774,817 $ 8,117,325
Shares sold
Shares redeemed (3,652) (38,371)
Net increase (decrease) 771,165 $ 8,078,954
A SHARE TRANSACTIONS FOR CLASS B, CLASS T, AND INSTITUTIONAL CLASS ARE FOR
THE PERIOD FEBRUARY 20, 1996 (COMMENCEMENT OF SALE OF SHARES)
TO NOVEMBER 30, 1996.
B SHARE TRANSACTIONS FOR CLASS A ARE FOR THE PERIOD SEPTEMBER 3, 1996
(COMMENCEMENT OF SALE OF SHARES) TO NOVEMBER 30, 1996.
14. BENEFICIAL INTEREST.
At the end of the period, one shareholder was record owner of approximately
12.8% of the total outstanding shares of the fund.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Advisor Series I and the Shareholders of
Fidelity Large Cap Fund:
We have audited the accompanying statement of assets and liabilities of
Fidelity Advisor Series I: Fidelity Large Cap Fund, including the schedule
of portfolio investments, as of November 30, 1996, and the related
statement of operations, the statement of changes in net assets, and the
financial highlights of Class A, Class B, Class T and Institutional Class
for each of the periods indicated therein. These financial statements and
financial highlights are the responsibility of the fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audit.
We conducted our audit 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, 1996 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 audit provides 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 Large Cap Fund as of November
30,1996, the results of its operations, the changes in its net assets, and
the financial highlights of Class A, Class B, Class T and Institutional
Class for each of the periods indicated therein, in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
January 10, 1996
DISTRIBUTIONS
The Board of Trustees of Fidelity Advisor Large Cap Fund voted to pay to
shareholders of record at the opening of business on record date, the
following distributions derived from capital gains realized from sales of
portfolio securities, and dividends derived from net investment income:
PAY DATE RECORD DATE DIVIDENDS CAPITAL GAINS
Institutional Class 12/23/96 12/20/96 $- $.04
1/6/97 1/3/97 $- $.05
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.)
Inc., London, England
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
William J. Hayes, Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
Robert H. Morrison, Manager,
Security Transactions
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
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 *
ADVISORY BOARD
William O. McCoy
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Investments Institutional
Operations Company
Boston, MA
CUSTODIAN
Brown Brothers Harriman & Co.
Boston, MA
FOCUS FUNDS
Fidelity Advisor Consumer
Industries Fund
Fidelity Advisor Cyclical
Industries Fund
Fidelity Advisor Financial
Services Fund
Fidelity Advisor Health Care Fund
Fidelity Advisor Natural
Resources Fund
Fidelity Advisor Technology Fund
Fidelity Advisor Utilities Growth Fund
GROWTH FUNDS
Fidelity Advisor TechnoQuant
Growth Fund
Fidelity Advisor Overseas Fund
Fidelity Advisor Mid Cap Fund
Fidelity Advisor Equity Growth Fund
Fidelity Advisor Growth
Opportunities Fund
Fidelity Advisor Strategic
Opportunities Fund
Fidelity Advisor Large Cap Fund
GROWTH AND INCOME FUNDS
Fidelity Advisor Equity Income Fund
Fidelity Advisor Balanced Fund
Fidelity Advisor Growth & Income Fund
TAXABLE 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 Intermediate Bond Fund
Fidelity Advisor Short Fixed-Income Fund
MUNICIPAL FUNDS
Fidelity Advisor High Income
Municipal Fund
Fidelity Advisor Municipal Bond Fund
Fidelity Advisor Intermediate Municipal Income Fund
Fidelity Advisor Short-Intermediate Municipal Income Fund
STATE MUNICIPAL FUNDS
Fidelity Advisor California Municipal Income Fund
Fidelity Advisor New York Municipal Income Fund
MONEY MARKET FUNDS
Daily Money Fund: Money Market Portfolio
Daily Money Fund: U.S. Treasury Portfolio
Daily Tax-Exempt Money Fund
(REGISTERED TRADEMARK)
(2_FIDELITY_LOGOS)FIDELITY ADVISOR
(registered trademark)
EQUITY GROWTH
FUND - CLASS A AND
CLASS T (FORMERLY CLASS A)
ANNUAL REPORT
NOVEMBER 30, 1996
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over time.
FUND TALK 8 The manager's review of fund
performance, strategy and outlook.
INVESTMENT CHANGES 11 A summary of major shifts in the
fund's investments over the past six
months.
INVESTMENTS 12 A complete list of the fund's
investments with their market value.
FINANCIAL STATEMENTS 28 Statements of assets and liabilities,
operations, and changes in net
assets, as well as financial
highlights.
NOTES 34 Notes to the financial statements.
REPORT OF INDEPENDENT 40 The auditors' opinion.
ACCOUNTANTS
DISTRIBUTIONS 41
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR DISTRIBUTION TO
PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN
EFFECTIVE
PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY ADVISOR FUND, INCLUDING CHARGES AND
EXPENSES,
CONTACT YOUR INVESTMENT PROFESSIONAL FOR A FREE PROSPECTUS. READ IT
CAREFULLY BEFORE YOU
INVEST OR SEND MONEY.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
Although stocks have managed to post solid returns throughout 1996, signs
of strength in the economy have led to inflation fears, causing some
uncertainty in bond markets so far this year. In 1995, both stock and bond
markets posted strong results, while the year before, stocks posted
below-average returns and bonds had one of the worst years in history.
These market ups and downs are a normal part of investing, and there are
some basic principles that are helpful for investors to remember in
different types of markets.
If you can leave your money invested over the long term, you can avoid the
results of the volatility that generally accompanies the stock market in
the short term, as we witnessed last year. You also can help to manage some
of the risks of investing through diversification. 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 types of 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. 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 or guaranteed 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. 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
ADVISOR EQUITY GROWTH - CLASS A
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can look at
the total percentage change in value, the average annual percentage change,
or the growth of a hypothetical $10,000 investment. A class' total return
includes changes in share price, plus reinvestment of any dividends (or
income) and capital gains (the profits the fund earns when it sells
securities that have grown in value). If Fidelity had not reimbursed
certain class expenses during the periods shown, the total returns would
have been lower. The initial offering of Class A shares took place on
September 3, 1996. Class A shares bear a 0.25% 12b-1 fee that is reflected
in returns after September 3, 1996. Returns between September 10, 1992 (the
date Class T shares were first offered) and September 3, 1996 are those of
Class T and reflect Class T's 0.50% 12b-1 fee (0.65% prior to January 1,
1996). Returns prior to September 10, 1992 are those of the Institutional
Class, the original class of the fund. Had Class A's 12b-1 fee been
reflected, returns prior to September 10, 1992 would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1996 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Advisor Equity Growth - Class A 18.97% 136.23% 499.94%
Advisor Equity Growth - Class A 12.72% 123.83% 468.44%
(incl. max. 5.25% sales charge)
S&P 500(registered trademark) 27.86% 130.90% 310.22%
Growth Funds Average 21.09% 110.80% 264.19%
CUMULATIVE TOTAL RETURNS show Class A's performance in percentage terms
over a set period - in this case, one, five, or 10 years. For example, if
you invested $1,000 in a fund that had a 5% return over the past year, the
value of your investment would be $1,050. You can compare Class A's returns
to those of the Standard & Poor's 500 Index - a widely recognized,
unmanaged index of common stocks. To measure how Class A's performance
stacked up against its peers, you can compare it to the growth funds
average, which reflects the performance of 652 mutual funds with similar
objectives tracked by Lipper Analytical Services, Inc. over the past 12
months. Both benchmarks include reinvested dividends and capital gains, if
any, and exclude the effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1996 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Advisor Equity Growth - Class A 18.97% 18.76% 19.62%
Advisor Equity Growth - Class A 12.72% 17.48% 18.98%
(incl. max. 5.25% sales charge)
S&P 500 27.86% 18.21% 15.16%
Growth Funds Average 21.09% 15.77% 13.39%
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
IMAHDR PRASUN SHR__CHT 19961130 19961209 164409 S00000000000001
FA Equity Growth -CL A SP Standard & Poor 500
00245 SP001
1986/11/30 9475.00 10000.00
1986/12/31 9276.81 9745.00
1987/01/31 10389.71 11057.65
1987/02/28 11328.42 11494.43
1987/03/31 11225.51 11826.62
1987/04/30 10813.86 11721.36
1987/05/31 10742.61 11823.34
1987/06/30 10948.43 12420.42
1987/07/31 11447.17 13050.13
1987/08/31 12135.90 13536.90
1987/09/30 11930.07 13240.44
1987/10/31 8787.25 10388.45
1987/11/30 7853.11 9532.44
1987/12/31 9224.34 10257.86
1988/01/31 9198.90 10689.72
1988/02/29 9749.99 11187.86
1988/03/31 9894.12 10842.15
1988/04/30 9783.90 10962.50
1988/05/31 9716.08 11057.87
1988/06/30 10580.86 11565.43
1988/07/31 10368.90 11521.48
1988/08/31 9911.07 11129.75
1988/09/30 10462.16 11603.88
1988/10/31 10351.94 11926.47
1988/11/30 10190.86 11755.92
1988/12/31 10660.62 11961.65
1989/01/31 11500.65 12837.24
1989/02/28 11509.31 12517.59
1989/03/31 11890.35 12809.25
1989/04/30 12678.43 13474.05
1989/05/31 13769.60 14019.75
1989/06/30 13258.65 13939.84
1989/07/31 14167.97 15198.61
1989/08/31 14722.22 15496.50
1989/09/30 15129.24 15432.96
1989/10/31 14938.72 15074.92
1989/11/30 14999.34 15382.45
1989/12/31 15440.98 15751.63
1990/01/31 14023.74 14694.69
1990/02/28 14588.66 14884.25
1990/03/31 15440.98 15278.69
1990/04/30 15133.75 14896.72
1990/05/31 17284.39 16349.15
1990/06/30 17433.05 16237.98
1990/07/31 16937.51 16186.01
1990/08/31 14776.96 14722.80
1990/09/30 13557.94 14005.80
1990/10/31 13726.42 13945.57
1990/11/30 15411.25 14846.46
1990/12/31 16511.35 15260.67
1991/01/31 18909.75 15926.04
1991/02/28 20614.41 17064.75
1991/03/31 22636.20 17477.72
1991/04/30 22556.92 17519.66
1991/05/31 23736.30 18276.51
1991/06/30 21764.06 17439.45
1991/07/31 23528.17 18252.13
1991/08/31 24796.75 18684.70
1991/09/30 24856.22 18372.67
1991/10/31 24925.59 18618.86
1991/11/30 24063.36 17868.52
1991/12/31 27195.45 19912.68
1992/01/31 27956.95 19542.31
1992/02/29 28100.66 19796.35
1992/03/31 26774.12 19410.33
1992/04/30 26221.39 19980.99
1992/05/31 26099.79 20078.90
1992/06/30 25237.53 19779.72
1992/07/31 26121.90 20588.71
1992/08/31 25491.79 20166.64
1992/09/30 25967.13 20404.61
1992/10/31 27326.84 20476.03
1992/11/30 29106.63 21174.26
1992/12/31 29885.69 21434.70
1993/01/31 30722.47 21614.75
1993/02/28 29920.23 21908.71
1993/03/31 30858.06 22370.99
1993/04/30 30338.30 21829.61
1993/05/31 32089.68 22414.64
1993/06/30 32213.97 22479.65
1993/07/31 31660.31 22389.73
1993/08/31 32812.82 23238.30
1993/09/30 33773.25 23059.36
1993/10/31 34180.02 23536.69
1993/11/30 33332.58 23313.09
1993/12/31 34324.94 23595.18
1994/01/31 35522.82 24397.42
1994/02/28 35226.01 23736.25
1994/03/31 33789.42 22701.35
1994/04/30 34145.60 22991.92
1994/05/31 33931.90 23368.99
1994/06/30 32447.82 22796.45
1994/07/31 33136.43 23544.18
1994/08/31 34632.38 24509.49
1994/09/30 33920.02 23909.00
1994/10/31 35024.18 24446.96
1994/11/30 33860.66 23556.60
1994/12/31 34021.06 23905.94
1995/01/31 33721.15 24525.82
1995/02/28 35016.74 25481.60
1995/03/31 36336.31 26233.56
1995/04/30 37907.81 27006.14
1995/05/31 39215.39 28085.57
1995/06/30 42202.43 28738.00
1995/07/31 45345.41 29690.95
1995/08/31 45813.26 29765.47
1995/09/30 47096.85 31021.58
1995/10/31 46856.93 30910.83
1995/11/30 47780.63 32267.82
1995/12/31 47336.63 32889.29
1996/01/31 48444.58 34008.85
1996/02/29 49523.10 34324.11
1996/03/31 49865.69 34654.65
1996/04/30 51350.24 35165.46
1996/05/31 52733.28 36072.38
1996/06/30 52060.79 36209.81
1996/07/31 48901.36 34610.06
1996/08/31 50043.33 35339.99
1996/09/30 53405.77 37328.92
1996/10/31 53659.54 38358.45
1996/11/29 56844.35 41022.00
IMATRL PRASUN SHR__CHT 19961130 19961209 164412 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was invested
in Advisor Equity Growth - Class A on November 30, 1986, and the current
maximum 5.25% sales charge was paid. As the chart shows, by November 30,
1996, the value of the investment would have grown to $56,844 - a 468.44%
increase on the 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 $41,022 - a 310.22% 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)
ADVISOR EQUITY GROWTH - CLASS T
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can look at
the total percentage change in value, the average annual percentage change,
or the growth of a hypothetical $10,000 investment. A class' total return
includes changes in share price, plus reinvestment of any dividends (or
income) and capital gains (the profits the fund earns when it sells
securities that have grown in value). The initial offering of Class T
shares took place on September 10, 1992. Class T shares bear a 0.50% 12b-1
fee (0.65% prior to January 1, 1996) that is reflected in returns after
September 10, 1992. Returns prior to that date are those of the
Institutional Class, the original class of the fund. Had Class T's 12b-1
fee been reflected, returns prior to September 10, 1992 would have been
lower. Effective January 1, 1996, the maximum 4.75% sales charge on Class T
shares was reduced to 3.50%.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1996 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Advisor Equity Growth - Class T 19.00% 136.28% 500.07%
Advisor Equity Growth - Class T 14.83% 128.01% 479.07%
(incl. max. 3.50% sales charge)
S&P 500(registered trademark) 27.86% 130.90% 310.22%
Growth Funds Average 21.09% 110.80% 264.19%
CUMULATIVE TOTAL RETURNS show Class T's performance in percentage terms
over a set period - in this case, one, five, or 10 years. For example, if
you invested $1,000 in a fund that had a 5% return over the past year, the
value of your investment would be $1,050. You can compare Class T's returns
to those of the Standard & Poor's 500 Index - a widely recognized,
unmanaged index of common stocks. To measure how Class T's performance
stacked up against its peers, you can compare it to the growth funds
average, which reflects the performance of 652 mutual funds with similar
objectives tracked by Lipper Analytical Services, Inc. over the past 12
months. Both benchmarks include reinvested dividends and capital gains, if
any, and exclude the effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1996 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Advisor Equity Growth - Class T 19.00% 18.76% 19.62%
Advisor Equity Growth - Class T 14.83% 17.92% 19.20%
(incl. max. 3.50% sales charge)
S&P 500 27.86% 18.21% 15.16%
Growth Funds Average 21.09% 15.77% 13.39%
AVERAGE ANNUAL TOTAL RETURNS take Class T shares' actual (or cumulative)
return and show you what would have happened if Class T shares had
performed at a constant rate each year.
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19961130 19961209 164759 S00000000000001
FA Equity Growth -CL T SP Standard & Poor 500
00286 SP001
1986/11/30 9650.00 10000.00
1986/12/31 9448.15 9745.00
1987/01/31 10581.61 11057.65
1987/02/28 11537.66 11494.43
1987/03/31 11432.84 11826.62
1987/04/30 11013.58 11721.36
1987/05/31 10941.02 11823.34
1987/06/30 11150.65 12420.42
1987/07/31 11658.60 13050.13
1987/08/31 12360.05 13536.90
1987/09/30 12150.42 13240.44
1987/10/31 8949.54 10388.45
1987/11/30 7998.15 9532.44
1987/12/31 9394.71 10257.86
1988/01/31 9368.80 10689.72
1988/02/29 9930.07 11187.86
1988/03/31 10076.86 10842.15
1988/04/30 9964.61 10962.50
1988/05/31 9895.53 11057.87
1988/06/30 10776.28 11565.43
1988/07/31 10560.41 11521.48
1988/08/31 10094.13 11129.75
1988/09/30 10655.39 11603.88
1988/10/31 10543.14 11926.47
1988/11/30 10379.08 11755.92
1988/12/31 10857.51 11961.65
1989/01/31 11713.06 12837.24
1989/02/28 11721.88 12517.59
1989/03/31 12109.97 12809.25
1989/04/30 12912.59 13474.05
1989/05/31 14023.92 14019.75
1989/06/30 13503.54 13939.84
1989/07/31 14429.65 15198.61
1989/08/31 14994.13 15496.50
1989/09/30 15408.67 15432.96
1989/10/31 15214.63 15074.92
1989/11/30 15276.37 15382.45
1989/12/31 15726.17 15751.63
1990/01/31 14282.76 14694.69
1990/02/28 14858.10 14884.25
1990/03/31 15726.17 15278.69
1990/04/30 15413.26 14896.72
1990/05/31 17603.62 16349.15
1990/06/30 17755.03 16237.98
1990/07/31 17250.34 16186.01
1990/08/31 15049.89 14722.80
1990/09/30 13808.35 14005.80
1990/10/31 13979.94 13945.57
1990/11/30 15695.89 14846.46
1990/12/31 16816.31 15260.67
1991/01/31 19259.01 15926.04
1991/02/28 20995.15 17064.75
1991/03/31 23054.29 17477.72
1991/04/30 22973.54 17519.66
1991/05/31 24174.70 18276.51
1991/06/30 22166.03 17439.45
1991/07/31 23962.73 18252.13
1991/08/31 25254.74 18684.70
1991/09/30 25315.30 18372.67
1991/10/31 25385.96 18618.86
1991/11/30 24507.80 17868.52
1991/12/31 27697.74 19912.68
1992/01/31 28473.31 19542.31
1992/02/29 28619.67 19796.35
1992/03/31 27268.63 19410.33
1992/04/30 26705.69 19980.99
1992/05/31 26581.84 20078.90
1992/06/30 25703.66 19779.72
1992/07/31 26604.36 20588.71
1992/08/31 25962.61 20166.64
1992/09/30 26446.74 20404.61
1992/10/31 27831.56 20476.03
1992/11/30 29644.22 21174.26
1992/12/31 30437.67 21434.70
1993/01/31 31289.91 21614.75
1993/02/28 30472.85 21908.71
1993/03/31 31428.00 22370.99
1993/04/30 30898.64 21829.61
1993/05/31 32682.36 22414.64
1993/06/30 32808.95 22479.65
1993/07/31 32245.06 22389.73
1993/08/31 33418.86 23238.30
1993/09/30 34397.03 23059.36
1993/10/31 34811.32 23536.69
1993/11/30 33948.23 23313.09
1993/12/31 34958.91 23595.18
1994/01/31 36178.92 24397.42
1994/02/28 35876.62 23736.25
1994/03/31 34413.50 22701.35
1994/04/30 34776.26 22991.92
1994/05/31 34558.61 23368.99
1994/06/30 33047.12 22796.45
1994/07/31 33748.45 23544.18
1994/08/31 35272.03 24509.49
1994/09/30 34546.51 23909.00
1994/10/31 35671.06 24446.96
1994/11/30 34486.05 23556.60
1994/12/31 34649.41 23905.94
1995/01/31 34343.97 24525.82
1995/02/28 35663.48 25481.60
1995/03/31 37007.43 26233.56
1995/04/30 38607.95 27006.14
1995/05/31 39939.68 28085.57
1995/06/30 42981.89 28738.00
1995/07/31 46182.93 29690.95
1995/08/31 46659.42 29765.47
1995/09/30 47966.71 31021.58
1995/10/31 47722.36 30910.83
1995/11/30 48663.12 32267.82
1995/12/31 48210.92 32889.29
1996/01/31 49339.33 34008.85
1996/02/29 50437.77 34324.11
1996/03/31 50786.69 34654.65
1996/04/30 52298.66 35165.46
1996/05/31 53707.25 36072.38
1996/06/30 53022.34 36209.81
1996/07/31 49804.56 34610.06
1996/08/31 50967.61 35339.99
1996/09/30 54392.16 37328.92
1996/10/31 54663.54 38358.45
1996/11/29 57907.16 41022.00
IMATRL PRASUN SHR__CHT 19961130 19961209 164802 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was invested
in Advisor Equity Growth - Class T on November 30, 1986, and the current
maximum 3.50% sales charge was paid. As the chart shows, by November 30,
1996, the value of the investment would have grown to $57,907 - a 479.07%
increase on the 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 $41,022 - a 310.22% 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)
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
Paced by the robust performance
of blue chip stocks, the U.S. stock
market posted strong gains for the
year that ended November 30,
1996. The Standard & Poor's 500
Index returned 27.86% during the
period - well above its long-term
average of about 12%. The stock
market spent much of the past
year breaking price and trading
volume records. Solid corporate
earnings reports, large cash
inflows into mutual funds,
widespread optimism and a
generally favorable interest rate
environment propelled share
prices higher. Large capitalization
stocks thrived as investors sought
their lower volatility and higher
degree of liquidity over smaller
cap stocks in an environment
where it was sometimes difficult to
discern the health of the economy.
The Dow Jones Industrial
Average closed above 6500 for
the first time in November. While
short-term confusion over the
direction of interest rates created
a volatile backdrop in the summer
months, stocks rallied again when
the Federal Reserve Board left
short-term interest rates
unchanged and it appeared
inflation would not be an issue for
the remainder of 1996.
Smaller-company stocks posted
strong gains at the beginning of
1996, but trended downward in
the spring and summer because
their earnings tend to be more
affected by the higher borrowing
costs brought on by higher rates.
When interest rate fears subsided,
these stocks rebounded, only to
fade toward the end of the period
due to earnings concerns and a
general flight to quality.
An interview with Larry Greenberg, Portfolio Manager of Fidelity Advisor
Equity Growth Fund
Q. WHAT CAN YOU TELL US ABOUT THE FUND'S PERFORMANCE, LARRY?
A. For the one-year period that ended November 30, 1996, the fund's Class A
shares had a total return of 18.97%. The fund's Class T shares returned
19.00%. The Standard & Poor's 500 Index returned 27.86% and the growth
funds average, according to Lipper Analytical Services, was up 21.09%. The
fund's underperformance in the past year is reflective of the
underperformance of technology stocks earlier in the period, which hurt
many growth-oriented investors if they sold these stocks.
Q. HAVE YOU MADE ANY MAJOR CHANGES SINCE YOU TOOK OVER THE FUND?
A. When I took over, the fund had about 18% of its assets in short-term
investments, so the first thing I did was try to reinvest some of those
assets in the stock market. Other than that, I haven't made any significant
changes. In fact, I can't imagine a smoother transition between managers.
The previous manager, Bob Stansky, and I have very similar investment
styles, and we've worked together for a number of years.
Q. HOW IS THE FUND POSITIONED IN TECHNOLOGY-RELATED COMPANIES? WERE THERE
ANY THEMES YOU FOLLOWED?
A. I focused the fund's technology weighting in what I call the "Nasdaq
Four" - Intel, Microsoft, Cisco Systems and Oracle. In the technology
arena, we've seen the bigger firms getting bigger at the expense of smaller
firms, which are finding it harder and harder to gain market share.
Additionally, the Nasdaq Four were well-positioned to benefit from two
major trends during the period - growth of the Internet and personal
computers.
Q. DECLINING SEMICONDUCTOR PRICES HAVE HURT THAT INDUSTRY OVER THE PAST
YEAR. WERE THERE ANY RECENT DEVELOPMENTS IN THIS SITUATION?
A. Semiconductor prices have stabilized following a freefall for much of
this past year. An oversupply in the market continues, but demand has
picked up as some companies have been able to work through their excess
inventories. Breaking it down a bit, DRAM (dynamic random access memory)
companies' pricing is still anemic; however, CPU (central processing unit)
pricing is stronger.
Q. WHAT WAS THE STORY WITH THE FUND'S HEALTH CARE POSITION?
A. In my opinion, one of the most intriguing parts of the health care
market has been the pharmaceutical area. It was one segment of the market
where business fundamentals improved steadily throughout the year. With the
proliferation of managed care, we've seen strong unit demand for drugs. For
example, in the third quarter of 1996, Merck had a phenomenal 25% unit
growth in their domestic pharmaceutical business. In general, I looked for
companies with accelerated earnings momentum, good year-over-year earnings
growth and strong revenue growth that were trading at reasonable prices.
Q. HOW ABOUT RETAIL?
A. I think finally we may be seeing a good time for retail. If you look at
the past three years, consumer demand was pretty poor. In the past year,
however, we've seen demand picking up and the beginnings of a turnaround in
the earnings growth rate of some major retailers. I also targeted specialty
retailers considered to be "category killers" - companies that dominate
their market segment no matter what is happening in the overall retail
market or the economy. One example of a category killer was PETsMART.
Q. WAS THERE A PARTICULAR STOCK THAT DIDN'T LIVE UP TO EXPECTATIONS?
A. While category killer retail stocks can be great growth companies, they
can be quite volatile as well. Such was the case with Sunglass Hut
International, whose revenue growth and earnings rapidly deteriorated
during the period. Thus, the fund sustained some losses as a result of
holding the stock.
Q. HOW ARE YOU POSITIONING THE FUND GOING FORWARD?
A. Obviously, the stock market has had quite a run, and we have enjoyed a
long economic expansion. In this environment, I'm trying to reduce some of
the risk in the fund by spreading its assets over a variety of industries
and stocks that haven't gone up as much as the overall market. While this
strategy does not eliminate all risk in the fund, I believe it's the best
course of action in an uncertain time.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.
FUND FACTS
GOAL: to achieve capital
appreciation by investing
primarily in common and
preferred stock and securities
convertible into common
stock of companies with
above-average growth
characteristics
START DATE: November 22, 1983
SIZE: as of November 30,
1996, more than $4.8 billion
MANAGER: Larry Greenberg,
since June 1996; manager,
VIP: Growth Portfolio, since
1991; joined Fidelity in 1986
(checkmark)
LARRY GREENBERG ON
COMPETITION IN HIGH TECH
INDUSTRIES:
"Much is discussed in the
financial press about the
intense competition in certain
segments of high tech. While
these corporate wars make
good news stories, they are
often oversimplified and
blown out of proportion. For
example, there's been a lot of
attention in the media devoted
to the "browser war" between
Netscape and Microsoft.
While Internet browsers are
Netscape's best-known
product, the company
generates most of its
revenues from corporate
applications of Internet
technology - not browsers.
"Another issue is whether
microprocessor-maker Intel
can maintain its
dominance in the face of new
competition. While it has
some notable competitors in a
rapidly changing market,
people often forget Intel's
industry clout, its vast R&D
budget and marketing
strength, and its ability to
maintain aggressive pricing."
NOTE TO SHAREHOLDERS:
Effective January 7, 1997,
Jennifer Uhrig became
manager of the fund. Ms.
Uhrig joined Fidelity in 1987,
and has worked as an
analyst and manager.
INVESTMENT CHANGES
TOP TEN STOCKS AS OF NOVEMBER 30, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE STOCKS
6 MONTHS AGO
Intel Corp. 2.7 1.2
General Electric Co. 2.4 2.1
Cisco Systems, Inc. 2.3 1.9
Oracle Systems Corp. 2.0 1.3
HFS, Inc. 2.0 1.0
Federal National Mortgage 1.7 1.4
Association
International Business Machines 1.6 0.2
Corp.
CUC International, Inc. 1.6 0.8
Microsoft Corp. 1.4 1.4
Lowe's Companies, Inc. 1.2 1.0
TOP FIVE MARKET SECTORS AS OF NOVEMBER 30, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE MARKET
SECTORS
6 MONTHS AGO
Technology 26.7 23.0
Health 10.4 10.8
Retail & Wholesale 9.6 9.6
Finance 8.8 10.1
Media & Leisure 6.7 4.5
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF NOVEMBER 30, 1996 * AS OF MAY 31, 1996 **
Row: 1, Col: 1, Value: 10.0
Row: 1, Col: 2, Value: 40.0
Row: 1, Col: 3, Value: 50.0
Row: 1, Col: 1, Value: 18.1
Row: 1, Col: 2, Value: 40.0
Row: 1, Col: 3, Value: 41.9
Stocks 90.0%
Short-term
investments 10.0%
FOREIGN
INVESTMENTS 3.6%
Stocks 81.9%
Short-term
investments 18.1%
FOREIGN
INVESTMENTS 3.1%
*
**
INVESTMENTS NOVEMBER 30, 1996
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 90.0%
SHARES VALUE (NOTE 1)
(000S)
AEROSPACE & DEFENSE - 1.0%
AEROSPACE & DEFENSE - 0.8%
Boeing Co. 216,400 $ 21,506
Gulfstream Aerospace Corp. (a) 142,600 3,422
Lockheed Martin Corp. 126,800 11,491
36,419
DEFENSE ELECTRONICS - 0.2%
Raytheon Co. 190,400 9,734
TOTAL AEROSPACE & DEFENSE 46,153
BASIC INDUSTRIES - 2.3%
CHEMICALS & PLASTICS - 1.4%
Air Products & Chemicals, Inc. 48,400 3,364
Airgas, Inc. (a) 157,000 4,043
du Pont (E.I.) de Nemours & Co. 225,000 21,206
IMC Global, Inc. 16,700 603
Monsanto Co. 625,000 24,844
Potash Corp. of Saskatchewan 34,500 2,602
Praxair, Inc. 125,000 6,078
Union Carbide Corp. 133,100 6,140
68,880
IRON & STEEL - 0.1%
Nucor Corp. 94,400 5,133
METALS & MINING - 0.4%
Aluminum Co. of America 100,000 6,363
Freeport McMoRan Copper & Gold, Inc. Class A 60,000 1,793
Inco Ltd. 138,100 4,820
Titanium Metals Corp. (a) 143,400 4,803
17,779
PACKAGING & CONTAINERS - 0.2%
Crown Cork & Seal Co., Inc. 135,300 7,171
Tupperware Corp. 75,000 3,975
11,146
PAPER & FOREST PRODUCTS - 0.2%
International Paper Co. 140,000 5,950
Kimberly-Clark Corp. 58,100 5,679
11,629
TOTAL BASIC INDUSTRIES 114,567
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
CONGLOMERATES - 0.8%
AlliedSignal, Inc. 240,000 $ 17,580
Mark IV Industries, Inc. 168,500 3,686
United Technologies Corp. 120,000 16,830
38,096
CONSTRUCTION & REAL ESTATE - 0.3%
CONSTRUCTION - 0.0%
Oakwood Homes Corp. 80,000 1,770
ENGINEERING - 0.3%
MasTec, Inc. (a) 252,200 11,916
REAL ESTATE INVESTMENT TRUSTS - 0.0%
RFS Hotel Investors, Inc. 108,300 1,814
TOTAL CONSTRUCTION & REAL ESTATE 15,500
DURABLES - 4.2%
AUTOS, TIRES, & ACCESSORIES - 2.5%
AutoZone, Inc. (a) 665,600 16,390
Chrysler Corp. 1,024,000 36,352
Danaher Corp. 126,700 5,670
Eaton Corp. 100,000 6,925
General Motors Corp. 682,721 39,342
Honda Motor Co. Ltd. 149,000 4,405
PACCAR, Inc. 46,400 3,086
Pep Boys-Manny, Moe & Jack 240,000 8,790
TRW, Inc. 25,000 2,434
123,394
CONSUMER DURABLES - 0.4%
Minnesota Mining & Manufacturing Co. 235,000 19,681
CONSUMER ELECTRONICS - 0.2%
Harman International Industries, Inc. 125,000 6,375
Newell Co. 176,100 5,459
11,834
HOME FURNISHINGS - 0.1%
Furniture Brands International, Inc. (a) 46,400 574
Leggett & Platt, Inc. 84,800 2,597
3,171
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
DURABLES - CONTINUED
TEXTILES & APPAREL - 1.0%
Adidas AG (b) 26,600 $ 2,301
Adidas AG 44,700 3,867
Gucci Group NV 87,400 6,413
Liz Claiborne, Inc. 82,900 3,513
NIKE, Inc. Class B 461,700 26,259
Tommy Hilfiger (a) 90,000 4,860
47,213
TOTAL DURABLES 205,293
ENERGY - 5.0%
ENERGY SERVICES - 1.5%
Baker Hughes, Inc. 110,400 4,043
Diamond Offshore Drilling, Inc. (a) 96,700 6,165
Dresser Industries, Inc. 157,000 5,142
Halliburton Co. 131,000 7,893
Schlumberger Ltd. 325,000 33,800
Tidewater, Inc. 87,400 3,824
Transocean Offshore, Inc. 37,800 2,277
Varco International, Inc. (a) 93,900 2,148
Western Atlas, Inc. (a) 100,000 7,050
72,342
INDEPENDENT POWER - 0.2%
Thermo Electron Corp. 225,050 8,158
OIL & GAS - 3.3%
Abacan Resource Corp. (a) 213,000 1,824
Amerada Hess Corp. 194,200 11,434
Anadarko Petroleum Corp. 85,000 5,684
Apache Corp. 170,600 6,206
Atlantic Richfield Co. 175,200 24,375
British Petroleum PLC ADR 153,807 21,341
Burlington Resources, Inc. 71,600 3,795
Chesapeake Energy Corp. (a) 161,600 10,565
Enron Oil & Gas Co. 115,900 3,086
Kerr-McGee Corp. 41,100 2,877
Louisiana Land & Exploration Co. 133,500 7,977
Nationale Elf Aquitaine 29,400 2,567
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
ENERGY - CONTINUED
OIL & GAS - CONTINUED
Occidental Petroleum Corp. 239,500 $ 5,748
Parker & Parsley Petroleum Co. 48,200 1,591
Pennzoil Co. 69,300 3,897
Royal Dutch Petroleum Co. ADR 235,100 39,937
Union Pacific Resources Group, Inc. 94,000 2,807
Unocal Corp. 176,320 7,185
162,896
TOTAL ENERGY 243,396
FINANCE - 8.8%
BANKS - 2.6%
Bank of New York Co., Inc. 624,200 22,393
BankAmerica Corp. 325,000 33,475
Citicorp 430,000 46,978
First Bank System, Inc. 87,700 6,391
NationsBank Corp. 196,661 20,379
129,616
CREDIT & OTHER FINANCE - 1.5%
American Express Co. 900,004 47,025
Beneficial Corp. 93,200 5,790
Concord EFS, Inc. (a) 9,300 271
Green Tree Financial Corp. 185,000 7,747
Household International, Inc. 120,082 11,378
PHH Corp. 38,600 1,732
73,943
FEDERAL SPONSORED CREDIT - 2.6%
Federal Home Loan Mortgage Corporation 340,000 38,845
Federal National Mortgage Association 1,976,700 81,539
Student Loan Marketing Association 49,300 4,739
125,123
INSURANCE - 1.9%
Allstate Corp. 165,079 9,946
American General Corp. 47,000 1,933
American International Group, Inc. 235,000 27,025
CIGNA Corp. 56,600 8,002
Capital Re Corp. 24,700 948
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - CONTINUED
INSURANCE - CONTINUED
General Re Corp. 69,400 $ 11,711
ITT Hartford Group, Inc. 50,000 3,418
MBIA, Inc. 76,700 7,756
MGIC Investment Corp. 109,700 8,214
SunAmerica, Inc. 65,000 2,722
Travelers, Inc. (The) 132,933 5,982
UNUM Corp. 54,100 3,848
91,505
SECURITIES INDUSTRY - 0.2%
Schwab (Charles) Corp. 290,900 8,763
United Asset Management Corp. 58,200 1,579
10,342
TOTAL FINANCE 430,529
HEALTH - 10.4%
DRUGS & PHARMACEUTICALS - 6.0%
ALZA Corp. Class A (a) 154,500 4,365
American Home Products Corp. 465,000 29,876
Amgen, Inc. (a) 177,000 10,775
Biochem Pharmaceuticals, Inc. (a) 103,500 4,425
Biogen, Inc. (a) 464,000 17,748
Bristol-Myers Squibb Co. 332,400 37,811
Elan Corp. PLC ADR (a) 250,000 7,438
Genentech, Inc. special (a) 300,000 16,237
Lilly (Eli) & Co. 305,000 23,333
Merck & Co., Inc. 638,200 52,971
Perseptive Biosystems, Inc. (a) 50 -
Perseptive Biosystems, Inc. Class G (warrants) (a) 28 -
Pfizer, Inc. 431,900 38,708
Schering-Plough Corp. 317,000 22,586
SmithKline Beecham PLC ADR 293,500 20,215
Thermotrex Corp. (a) 29,200 993
Warner-Lambert Co. 74,200 5,305
292,786
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
HEALTH - CONTINUED
MEDICAL EQUIPMENT & SUPPLIES - 2.1%
Boston Scientific Corp. (a) 179,400 $ 10,472
Cardinal Health, Inc. 111,700 9,341
Johnson & Johnson 750,000 39,844
Medtronic, Inc. 404,600 26,754
Omnicare, Inc. 135,000 4,118
Pall Corp. 151,900 3,969
St. Jude Medical, Inc. (a) 107,500 4,488
Sofamor/Danek Group, Inc. (a) 89,400 2,514
101,500
MEDICAL FACILITIES MANAGEMENT - 2.3%
American Medical Response, Inc. (a) 98,500 2,955
Carematrix Corp. (a) 158,800 2,184
Columbia/HCA Healthcare Corp. 615,105 24,604
HEALTHSOUTH Rehabilitation Corp. (a) 1,036,900 39,013
Lincare Holdings, Inc. (a) 211,400 8,403
Oxford Health Plans, Inc. (a) 310,000 17,979
PacifiCare Health Systems, Inc. Class B (a) 130,200 10,807
United HealthCare Corp. 171,700 7,405
Vencor, Inc. (a) 29,800 965
114,315
TOTAL HEALTH 508,601
HOLDING COMPANIES - 0.1%
Norfolk Southern Corp. 35,000 3,150
INDUSTRIAL MACHINERY & EQUIPMENT - 4.0%
ELECTRICAL EQUIPMENT - 3.0%
Alcatel Alsthom Compagnie Generale d'Electricite SA 52,300 4,754
American Power Conversion Corp. (a) 116,600 2,762
Duracell International, Inc. 19,900 1,326
Emerson Electric Co. 175,000 17,172
General Electric Co. 1,125,000 117,000
Leitch Technology Corp. (a) 177,000 3,410
Oak Industries, Inc. (a) 36,600 851
Westinghouse Electric Corp. 35,300 662
147,937
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED
INDUSTRIAL MACHINERY & EQUIPMENT - 0.9%
Case Corp. 151,500 $ 7,954
Caterpillar, Inc. 157,900 12,494
Illinois Tool Works, Inc. 52,700 4,519
Ingersoll-Rand Co. 150,000 6,975
MSC Industrial Direct, Inc. (a) 55,500 2,074
Stanley Works 83,100 2,451
UCAR International, Inc. (a) 124,000 4,697
41,164
POLLUTION CONTROL - 0.1%
USA Waste Services, Inc. (a) 125,300 4,041
WMX Technologies, Inc. 58,000 2,088
6,129
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 195,230
MEDIA & LEISURE - 6.7%
BROADCASTING - 0.6%
Clear Channel Communications, Inc. (a) 43,500 3,002
Emmis Broadcasting Corp. Class A (a) 21,900 753
Evergreen Media Corp. Class A (a) 195,500 4,839
Grupo Televisa SA de CV sponsored ADR (a) 114,600 3,123
Jacor Communications, Inc. Class A (a) 51,600 1,238
Lin Television Corp. (a) 81,500 3,270
PanAmSat Corp. (a) 142,400 4,094
Time Warner, Inc. 327 13
Viacom, Inc. Class B (non-vtg.) (a) 195,502 7,380
27,712
ENTERTAINMENT - 0.4%
Disney (Walt) Co. 110,100 8,120
MGM Grand, Inc. (a) 170,000 6,566
Regal Cinemas, Inc. (a) 110,700 3,612
18,298
LEISURE DURABLES & TOYS - 0.2%
Harley-Davidson, Inc. 186,800 8,289
Nintendo Co. Ltd. Ord. 42,500 3,010
11,299
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
MEDIA & LEISURE - CONTINUED
LODGING & GAMING - 3.6%
Anchor Gaming (a) 75,000 $ 3,131
Circus Circus Enterprises, Inc. (a) 507,000 18,506
Doubletree Corp. (a) 85,000 3,570
Extended Stay America, Inc. (a) 114,000 2,366
HFS, Inc. (a) 1,474,900 95,500
Hilton Hotels Corp. 440,000 12,870
Host Marriott Corp. 196,400 2,995
ITT Corp. (a) 70,000 3,228
Mirage Resorts, Inc. (a) 1,026,100 24,755
Penske Motorsports, Inc. (a) 5,100 156
Prime Hospitality Corp. (a) 64,900 1,079
Sun International Hotels Ltd. Ord. (a) 125,000 6,203
Wyndham Hotel Corp. (a) 23,500 461
174,820
PUBLISHING - 0.6%
Gannett Co., Inc. 100,000 7,850
Knight-Ridder, Inc. 170,000 7,140
New York Times Co. (The) Class A 105,000 3,924
Scholastic Corp. (a) 52,100 3,882
Times Mirror Co. Class A 139,800 7,322
30,118
RESTAURANTS - 1.3%
Apple South, Inc. 365,900 5,397
Applebee's International, Inc. 146,300 4,261
Landry's Seafood Restaurants, Inc. (a) 387,200 9,293
Lone Star Steakhouse Saloon (a) 448,800 12,847
Outback Steakhouse, Inc. (a) 104,900 3,029
Planet Hollywood International, Inc. Class A (a) 193,300 4,446
Rainforest Cafe, Inc. (a) 285,100 8,339
Starbucks Corp. (a) 432,100 14,961
62,573
TOTAL MEDIA & LEISURE 324,820
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
NONDURABLES - 3.3%
BEVERAGES - 1.1%
Anheuser-Busch Companies, Inc. 347,800 $ 14,738
Coca-Cola Co. (The) 316,900 16,202
PepsiCo, Inc. 832,800 24,880
55,820
FOODS - 0.2%
General Mills, Inc. 35,200 2,235
Nabisco Holdings Corp. Class A 137,500 5,328
7,563
HOUSEHOLD PRODUCTS - 1.1%
Avon Products, Inc. 75,800 4,225
Gillette Co. 311,100 22,944
Procter & Gamble Co. 243,500 26,481
53,650
TOBACCO - 0.9%
Philip Morris Companies, Inc. 414,400 42,735
TOTAL NONDURABLES 159,768
PRECIOUS METALS - 0.3%
Barrick Gold Corp. 325,000 9,765
Bre-X Minerals Ltd. 255,600 3,949
Newmont Mining Corp. 41,600 1,992
15,706
RETAIL & WHOLESALE - 9.6%
APPAREL STORES - 1.2%
Baby Superstore, Inc. (a) 308,200 8,553
Footstar, Inc. (a) 64,777 1,328
Gap, Inc. 451,500 14,504
Gymboree Corp. (a) 75,000 2,119
Just for Feet, Inc. (a) 639,000 15,096
Limited, Inc. (The) 39,613 713
Loehmanns, Inc. (a) 112,100 3,377
Saks Holdings, Inc. (a) 149,600 4,862
TJX Companies, Inc. 190,000 8,574
59,126
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
RETAIL & WHOLESALE - CONTINUED
DRUG STORES - 0.3%
CVS Corp. 225,000 $ 9,253
General Nutrition Companies, Inc. (a) 171,500 2,958
Revco (D.S.), Inc. (a) 93,200 3,215
15,426
GENERAL MERCHANDISE STORES - 2.4%
Consolidated Stores Corp. (a) 223,200 8,258
Dayton Hudson Corp. 151,100 5,874
Family Dollar Stores, Inc. 388,800 7,290
Federated Department Stores, Inc. (a) 325,000 11,091
Meyer (Fred), Inc. (a) 82,800 2,774
Nordstrom, Inc. 34,100 1,483
Price/Costco, Inc. (a) 368,400 8,565
Sears, Roebuck & Co. 245,000 12,190
Stein Mart, Inc. (a) 133,200 2,547
Wal-Mart Stores, Inc. 2,175,900 55,485
Woolworth Corp. (a) 88,400 2,122
117,679
GROCERY STORES - 0.1%
Safeway, Inc. (a) 70,200 2,852
RETAIL & WHOLESALE, MISCELLANEOUS - 5.6%
Barnes & Noble, Inc. (a) 109,500 3,422
Bed Bath & Beyond, Inc. (a) 327,500 8,576
Circuit City Stores, Inc. 278,300 9,288
Corporate Express, Inc. (a) 387,350 10,846
Home Depot, Inc. (The) 809,800 42,211
Lowe's Companies, Inc. 1,425,000 57,891
Officemax, Inc. (a) 1,027,375 14,897
Office Depot, Inc. (a) 563,200 10,982
Petco Animal Supplies, Inc. (a) 27,100 593
PETsMART, Inc. (a) 2,101,500 53,588
Sports Authority, Inc. (a) 73,450 1,818
Staples, Inc. (a) 1,400,087 27,652
Sunglass Hut International, Inc. (a) 801,600 5,912
Toys "R" Us, Inc. (a) 307,800 10,619
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
RETAIL & WHOLESALE - CONTINUED
RETAIL & WHOLESALE, MISCELLANEOUS - CONTINUED
U.S. Office Products Co. (a) 50,700 $ 1,572
Viking Office Products, Inc. (a) 393,400 12,318
Waban, Inc. (a) 114,800 3,028
275,213
TOTAL RETAIL & WHOLESALE 470,296
SERVICES - 1.1%
ADVERTISING - 0.2%
Interpublic Group of Companies, Inc. 72,200 3,574
Omnicom Group, Inc. 58,100 2,963
Universal Outdoor Holdings, Inc. (a) 101,500 2,766
9,303
EDUCATIONAL SERVICES - 0.0%
Sylvan Learning Systems (a) 49,650 1,297
LEASING & RENTAL - 0.1%
Hollywood Entertainment Corp. (a) 315,800 6,355
SERVICES - 0.8%
ADT Ltd. (a) 47,000 964
APAC Teleservices, Inc. (a) 107,900 5,098
AccuStaff, Inc. (a) 362,600 7,343
Employee Solutions, Inc. (a) 23,200 429
Medpartners, Inc. (a) 158,600 3,608
Service Corp. International 455,600 13,725
Sitel Corp. (a) 57,900 1,144
Teletech Holdings, Inc. (a) 70,100 2,208
Zebra Technologies Corp. Class A (a) 59,700 1,537
36,056
TOTAL SERVICES 53,011
TECHNOLOGY - 26.7%
COMMUNICATIONS EQUIPMENT - 4.6%
ADC Telecommunications, Inc. (a) 150,000 5,437
Ascend Communications, Inc. (a) 598,200 42,547
Aspect Telecommunications Corp. (a) 126,300 6,883
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
COMMUNICATIONS EQUIPMENT - CONTINUED
Checkpoint Systems, Inc. (a) 100,000 $ 2,250
Cisco Systems, Inc. (a) 1,669,300 113,304
Dialogic Corp. (a) 12,400 381
Lucent Technologies, Inc. 301,500 15,452
Nokia Corp. AB sponsored ADR 61,100 3,429
P-COM, Inc. (a) 17,600 559
Tellabs, Inc. (a) 177,000 7,036
3Com Corp. (a) 296,100 22,245
U.S. Robotics Corp. (a) 47,400 3,727
223,250
COMPUTER SERVICES & SOFTWARE - 11.3%
Affiliated Computer Services, Inc. Class A (a) 55,400 1,607
America Online, Inc. (a) 178,100 6,300
American Management Systems, Inc. (a) 161,300 5,736
Automatic Data Processing, Inc. 371,800 15,941
BBN Corp. (a) 39,600 911
BMC Software, Inc. (a) 240,000 10,440
CUC International, Inc. (a) 2,927,575 77,215
Cadence Design Systems, Inc. (a) 520,050 20,737
Ceridian Corp. (a) 164,000 7,893
Citrix Systems, Inc. (a) 37,700 1,720
Computer Associates International, Inc. 281,700 18,522
CompUSA, Inc. (a) 609,700 27,437
Computer Sciences Corp. (a) 251,600 19,782
DST Systems, Inc. (a) 75,000 2,427
Electronic Data Systems Corp. 186,100 9,003
Electronics for Imaging, Inc. (a) 126,400 10,744
Equifax Inc. 171,500 5,617
First Data Corp. 301,442 12,020
HBO & Co. 348,700 19,832
Inso Corp. (a) 136,800 5,831
McAfee Associates, Inc. (a) 372,100 17,767
Microsoft Corp. (a) 429,800 67,425
Netscape Communications Corp. (a) 387,400 21,646
Oracle Systems Corp. (a) 2,015,925 98,780
Orckit Communications Ltd. (a) 6,200 70
Parametric Technology Corp. (a) 594,700 32,337
Paychex, Inc. 149,600 8,004
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
COMPUTER SERVICES & SOFTWARE - CONTINUED
PeopleSoft, Inc. (a) 450,000 $ 20,587
Physician Computer Network, Inc. (a) 44,400 366
Remedy Corp. (a) 92,500 4,186
Sabre Group Holdings, Inc. Class A (a) 58,900 1,723
Sybase, Inc. (a) 105,300 1,856
554,462
COMPUTERS & OFFICE EQUIPMENT - 5.5%
Adaptec, Inc. (a) 897,800 33,443
Bay Networks, Inc. (a) 210,000 5,618
Compaq Computer Corp. (a) 563,900 44,689
Dell Computer Corp. (a) 248,000 25,203
EMC Corp. (a) 434,300 14,006
Eltron International, Inc. (a) 62,200 1,928
Gateway 2000, Inc. (a) 34,000 1,823
Hewlett-Packard Co. 276,900 14,917
Ingram Micro, Inc. Class A (a) 79,500 1,957
International Business Machines Corp. 496,600 79,146
Lexmark International Group, Inc. (a) 109,900 2,844
Micron Electronics, Inc. (a) 193,300 3,721
Pitney Bowes, Inc. 150,000 8,850
Quantum Corp. (a) 178,800 4,783
Seagate Technology (a) 516,800 20,414
Tech Data Corp. (a) 236,200 7,086
270,428
ELECTRONIC INSTRUMENTS - 0.2%
Applied Materials, Inc. (a) 142,200 5,421
Perkin-Elmer Corp. 61,900 3,815
9,236
ELECTRONICS - 4.8%
Analog Devices, Inc. (a) 250,000 8,031
Atmel Corp. (a) 223,300 7,341
Cascade Communications Corp. (a) 54,700 3,781
Cirrus Logic, Inc. (a) 175,000 3,434
Intel Corp. 1,023,300 129,831
KEMET Corp. (a) 154,200 3,547
Linear Technology Corp. 391,000 18,426
Maxim Integrated Products, Inc. (a) 402,900 18,684
Micron Technology, Inc. 134,400 4,452
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
ELECTRONICS - CONTINUED
Motorola, Inc. 82,300 $ 4,557
S3, Inc. (a) 48,600 826
Solectron Corp. (a) 23,300 1,364
Storage Technology Corp. (a) 187,800 9,367
Texas Instruments, Inc. 98,900 6,305
Uniphase Corp. (a) 150,000 8,925
Xilinx, Inc. (a) 110,700 4,857
233,728
PHOTOGRAPHIC EQUIPMENT - 0.3%
Eastman Kodak Co. 156,900 12,709
TOTAL TECHNOLOGY 1,303,813
TRANSPORTATION - 1.0%
AIR TRANSPORTATION - 0.7%
AMR Corp. (a) 150,000 13,687
America West Airlines, Inc. Class B (a) 398,400 5,827
Comair Holdings, Inc. 150,050 3,732
Delta Air Lines, Inc. 29,400 2,212
Midwest Express Holdings, Inc. (a) 2,400 79
UAL Corp. (a) 101,000 5,808
31,345
RAILROADS - 0.3%
CSX Corp. 332,400 15,540
TRUCKING & FREIGHT - 0.0%
Hunt (J.B.) Transport Services, Inc. 94,200 1,319
TOTAL TRANSPORTATION 48,204
UTILITIES - 4.4%
CELLULAR - 1.4%
AirTouch Communications, Inc. (a) 1,705,035 43,692
Arch Communications Group, Inc. (a) 131,000 1,441
Palmer Wireless, Inc. (a) 139,000 2,085
360 Degrees Communications Co. (a) 566,600 13,456
Vanguard Cellular Systems, Inc. Class A (a) 349,500 5,898
66,572
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
UTILITIES - CONTINUED
ELECTRIC UTILITY - 0.0%
Calpine Corp. (a) 142,500 $ 2,565
GAS - 0.2%
Enron Corp. 226,800 10,376
TELEPHONE SERVICES - 2.8%
Ameritech Corp. 157,700 9,285
Bell Atlantic Corp. 141,300 8,884
BellSouth Corp. 362,200 14,624
Cincinnati Bell, Inc. 39,200 2,337
Comsat Corp., Series 1 50,000 1,313
Frontier Corp. 18,500 486
LCI International, Inc. (a) 554,800 18,100
MCI Communications Corp. 640,200 19,526
MFS Communications, Inc. 494,800 23,873
SBC Communications, Inc. 124,900 6,573
Sprint Corp. 200,600 8,400
Telebras sponsored ADR 128,300 9,719
Telefonos de Mexico SA sponsored ADR representing Ord.
Class L shares 130,600 3,967
WorldCom, Inc. (a) 434,800 10,055
137,142
TOTAL UTILITIES 216,655
TOTAL COMMON STOCKS
(Cost $3,335,089) 4,392,788
CASH EQUIVALENTS - 10.0%
MATURITY
AMOUNT (000S)
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.71%, dated
11/29/96 due 12/2/96 $ 489,989 489,756
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $3,824,845) $ 4,882,544
LEGEND
1. Non-income producing
2. 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 $2,301,000 or 0.0% of net
assets.
INCOME TAX INFORMATION
At November 30, 1996, the aggregate cost of investment securities for
income tax purposes was $3,837,792,000. Net unrealized appreciation
aggregated $1,044,752,000, of which $1,113,944,000 related to appreciated
investment securities and $69,192,000 related to depreciated investment
securities.
The fund hereby designates approximately $26,024,000 as a capital gain
dividend for the purpose of the dividend paid deduction.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNTS) NOVEMBER 30, 1996
ASSETS
Investment in securities, at value (including repurchase $ 4,882,544
agreements of $489,756) (cost $3,824,845) -
See accompanying schedule
Cash 1,219
Receivable for investments sold 7,480
Receivable for fund shares sold 7,261
Dividends receivable 3,551
Other receivables 171
Prepaid expenses 15
TOTAL ASSETS 4,902,241
LIABILITIES
Payable for investments purchased $ 29,024
Payable for fund shares redeemed 3,259
Accrued management fee 2,359
Distribution fees payable 1,431
Other payables and accrued expenses 1,246
TOTAL LIABILITIES 37,319
NET ASSETS $ 4,864,922
Net Assets consist of:
Paid in capital $ 3,636,198
Undistributed net investment income 26,034
Accumulated undistributed net realized gain (loss) on 144,992
investments and foreign currency transactions
Net unrealized appreciation (depreciation) on 1,057,698
investments and assets and liabilities in foreign
currencies
NET ASSETS $ 4,864,922
CALCULATION OF MAXIMUM OFFERING PRICE $44.80
CLASS A:
NET ASSET VALUE and redemption price per share
($4,423 (divided by) 98.73 shares)
Maximum offering price per share (100/94.75 of $44.80) $47.28
CLASS T: $44.81
NET ASSET VALUE and redemption price per share
($3,536,973 (divided by) 78,926 shares)
Maximum offering price per share (100/96.50 of $44.81) $46.44
INSTITUTIONAL CLASS: $45.52
NET ASSET VALUE, offering price and redemption price
per share ($1,323,526 (divided by) 29,078 shares)
STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS YEAR ENDED NOVEMBER 30, 1996
INVESTMENT INCOME $ 36,764
Dividends
Interest 34,798
TOTAL INCOME 71,562
EXPENSES
Management fee $ 23,048
Transfer agent fees 1
Class A
Class T 5,414
Institutional Class 1,443
Distribution fees 1
Class A
Class T 14,154
Accounting fees and expenses 805
Non-interested trustees' compensation 13
Custodian fees and expenses 111
Registration fees 11
Class A
Class T 490
Institutional Class 165
Audit 68
Legal 42
Miscellaneous 116
Total expenses before reductions 45,882
Expense reductions (634) 45,248
NET INVESTMENT INCOME 26,314
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 155,837
Foreign currency transactions (3) 155,834
Change in net unrealized appreciation (depreciation) on:
Investment securities 529,933
Assets and liabilities in foreign currencies (1) 529,932
NET GAIN (LOSS) 685,766
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 712,080
FROM OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30,
1996 1995
INCREASE (DECREASE) IN NET ASSETS
Operations $ 26,314 $ 8,342
Net investment income
Net realized gain (loss) 155,834 163,818
Change in net unrealized appreciation (depreciation) 529,932 499,727
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 712,080 671,887
FROM OPERATIONS
Distributions to shareholders (2,317) (2,488)
From net investment income
Class T
Institutional Class (3,419) (3,809)
From net realized gain (112,907) (4,889)
Class T
Institutional Class (41,604) (2,227)
In excess of net realized gain - (1,642)
Class T
Institutional Class - (756)
TOTAL DISTRIBUTIONS (160,247) (15,811)
Share transactions - net increase (decrease) 1,470,586 901,805
TOTAL INCREASE (DECREASE) IN NET ASSETS 2,022,419 1,557,881
NET ASSETS
Beginning of period 2,842,503 1,284,622
End of period (including undistributed net investment $ 4,864,922 $ 2,842,503
income of $26,034 and $5,825, respectively)
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
YEAR ENDED
NOVEMBER 30,
1996 G
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 39.47
Income from Investment Operations
Net investment income .04 F
Net realized and unrealized gain (loss) 5.29
Total from investment operations 5.33
Net asset value, end of period $ 44.80
TOTAL RETURN B, C 13.50%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in millions) $ 4
Ratio of expenses to average net assets 1.52% A, D
, E
Ratio of expenses to average net assets after expense reductions 1.50% A, H
Ratio of net investment income to average net assets .38% A
Portfolio turnover 76%
Average commission rate I $ .0414
A ANNUALIZED
B THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D LIMITED IN ACCORDANCE WITH A STATE EXPENSE LIMITATION. WITHOUT THIS
REIMBURSEMENT, THE CLASS' RATIO OF EXPENSES TO AVERAGE NET ASSETS WOULD
HAVE BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
E FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE
BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
F NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
G FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A SHARES)
TO NOVEMBER 30, 1996.
H FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES (SEE NOTE 5 OF
NOTES TO FINANCIAL STATEMENTS).
I FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR SECURITY
TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM PERIOD
TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED IN
VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES MAY
DIFFER.
FINANCIAL HIGHLIGHTS - CLASS T
YEARS ENDED NOVEMBER 30,
1996 1995 1994 F 1993 1992 E
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning $ 39.83 $ 28.52 $ 29.50 $ 26.33 $ 23.78
of period
Income from Investment
Operations
Net investment income .22 D .06 .08 (.07) D .01
Net realized and 6.90 11.54 .39 3.82 2.54
unrealized gain (loss)
Total from investment 7.12 11.60 .47 3.75 2.55
operations
Less Distributions
From net investment income (.03) G (.08) - (.08) -
From net realized gain (2.11) G (.16) (1.45) (.50) -
In excess of net realized - (.05) - - -
gain
Total distributions (2.14) (.29) (1.45) (.58) -
Net asset value, end of period $ 44.81 $ 39.83 $ 28.52 $ 29.50 $ 26.33
TOTAL RETURN B, C 19.00% 41.11% 1.58% 14.52% 10.72%
RATIOS AND SUPPLEMENTAL
DATA
Net assets, end of period $ 3,537 $ 2,051 $ 874 $ 378 $ 23
(in millions)
Ratio of expenses to average 1.36% 1.55% 1.71% 1.85% 1.47%
net assets A
Ratio of expenses to average 1.34% 1.54% 1.70% 1.84% 1.47%
net assets after expense H H H H A
reductions
Ratio of net investment income .54% .21% .15% (.24)% .25%
to average net assets A
Portfolio turnover 76% 97% 137% 160% 240%
Average commission rate I $ .0414
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD SEPTEMBER 10, 1992 (COMMENCEMENT OF SALE OF CLASS T
SHARES) TO NOVEMBER 30, 1992.
F EFFECTIVE DECEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
G THE AMOUNTS SHOWN REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO
TAX DIFFERENCES (SEE NOTE 1 OF NOTES TO FINANCIAL STATEMENTS).
H FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES (SEE NOTE 5 OF
NOTES TO FINANCIAL STATEMENTS).
I FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR SECURITY
TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM PERIOD
TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED IN
VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES MAY
DIFFER.
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
YEARS ENDED NOVEMBER 30,
1996 1995 1994 C 1993 1992
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning $ 40.39 $ 28.90 $ 29.74 $ 26.37 $ 24.28
of period
Income from Investment
Operations
Net investment income .45 B .28 .30 .19 B .17
Net realized and 7.00 11.69 .42 3.78 4.55
unrealized gain (loss)
Total from investment 7.45 11.97 .72 3.97 4.72
operations
Less Distributions
From net investment income (.21) D (.27) (.11) (.10) (.03)
From net realized gain (2.11) D (.16) (1.45) (.50) (2.60)
In excess of net realized - (.05) - - -
gain
Total distributions (2.32) (.48) (1.56) (.60) (2.63)
Net asset value, end of period $ 45.52 $ 40.39 $ 28.90 $ 29.74 $ 26.37
TOTAL RETURN A 19.68% 42.15% 2.46% 15.36% 21.14%
RATIOS AND SUPPLEMENTAL
DATA
Net assets, end of period $ 1,324 $ 791 $ 410 $ 296 $ 179
(in millions)
Ratio of expenses to average .79% .83% .86% .95% .98%
net assets
Ratio of expenses to average .77% .83% .84% .94% .98%
net assets after expense E E E
reductions
Ratio of net investment income 1.11% .92% 1.00% .66% .73%
to average net assets
Portfolio turnover 76% 97% 137% 160% 240%
Average commission rate F $ .0414
</TABLE>
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS).
B NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
C EFFECTIVE DECEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
D THE AMOUNTS SHOWN REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO
TAX DIFFERENCES (SEE NOTE 1 OF NOTES TO FINANCIAL STATEMENTS).
E FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES (SEE NOTE 5 OF
NOTES TO FINANCIAL STATEMENTS).
F FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR SECURITY
TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM PERIOD
TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED IN
VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES MAY
DIFFER.
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1996
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Equity Growth Fund (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, Class T, and Institutional Class shares, each of
which has equal rights as to assets and voting privileges. Each class has
exclusive voting rights with respect to its distribution plan. The fund
commenced sale of a new Class A of shares on September 3, 1996. On this
date, the original Class A was renamed Class T. Investment income, realized
and unrealized capital gains and losses, the common expenses of the fund,
and certain fund-level expense reductions are allocated on a pro rata basis
to each class based on the relative net assets of each class to the total
net assets of the fund. Each class of shares differs in its respective
distribution, transfer agent, registration, and certain other
class-specific fees, expenses, and expense reductions.
On July 10, 1996, the Board of Trustees approved the creation of an
additional class of Retail shares (Class B). Offering of the new class
commences on December 31, 1996. Class B shares are subject to an annual
distribution and service fee of 1.00% (of which .75% represents a
distribution fee and .25% represents a shareholder service fee) of the
class' average net assets, and a contingent deferred sales charge upon
redemption within six years of purchase which decreases from a maximum of
5% to 1%.
The financial statements have been prepared in conformity with generally
accepted accounting principles which permit management to make certain
estimates and assumptions at the date of the financial statements. The
following summarizes the significant accounting policies of the fund:
SECURITY VALUATION. Securities 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 with remaining maturities
of sixty days or less for which quotations are not readily available are
valued at amortized cost or original cost plus accrued interest, both of
which approximate current value.
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. Income receipts
and expense payments are translated into U.S. dollars at the prevailing
exchange
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
FOREIGN CURRENCY TRANSLATION - CONTINUED
rate on the respective dates of the transactions. Purchases and sales of
securities are translated into U.S. dollars at the contractual currency
exchange rates established at the time of each trade.
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, and the difference between
the amount of net investment income accrued and the U.S. dollar amount
actually received. The effects of changes in foreign currency exchange
rates on investments in securities are included with the net realized and
unrealized gain or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes substantially all of its taxable income for
its fiscal year. The schedule of investments includes information regarding
income taxes under the caption "Income Tax Information."
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. Non-cash dividends included in dividend income, if any,
are recorded at the fair market value of the securities received. 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.
PREPAID EXPENSES. Fidelity Management & Research Company (FMR) bears all
organizational expenses except for registering and qualifying each class
and shares of each class for distribution under federal and state
securities law. These expenses are borne by each class and amortized over
one year.
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 pro rata 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, which may result in distribution
reclassifications, are primarily due to differing treatments for losses
deferred due to wash sales. The fund also utilized earnings and profits
distributed to shareholders on redemption of shares as a part of the
dividends paid deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
and may affect the per-share allocation between net investment income and
realized and unrealized gain (loss). Undistributed net investment income
and accumulated undistributed net realized gain (loss) on investments and
foreign currency transactions 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.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign securities. Losses may
arise from changes in the value of the foreign currency or if the
counterparties do not perform under the contracts' terms. The U.S. dollar
value of foreign currency contracts is determined using contractual
currency exchange rates established at the time of each trade. The cost of
the foreign currency contracts is included in the cost basis of the
associated investment.
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 for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
Securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are marked-to-market
daily and maintained at a value at least equal to the principal amount of
the repurchase agreement (including accrued interest). FMR, the fund's
investment adviser, is responsible for determining that the value of the
underlying securities remains in accordance with the market value
requirements stated above.
RESTRICTED SECURITIES. The fund is permitted to invest in securities that
are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from registration
or to the public if the securities are registered. Disposal of these
securities may involve time-consuming negotiations and expense, and prompt
sale at an acceptable price may be difficult. At the end of the period, the
fund had no investments in restricted securities (excluding 144A issues).
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $3,661,051,000 and $2,431,557,000, 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 .2500% to .5200% for the period. In the event that these
rates were lower than the contractual rates in effect during the period,
FMR voluntarily implemented the above rates, as they resulted in the same
or a lower management fee. The annual individual fund fee rate is .30%. For
the period, the management fee was equivalent to an annual rate of .61% of
average net assets.
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the 1940
Act, the Trustees have adopted separate distribution plans with respect to
the fund's Class A shares (Class A Plan), Class T shares (Class T Plan),
and Institutional Class shares (collectively referred to as "the Plans").
Under the Class A and Class T Plans, the fund pays Fidelity Distributors
Corporation (FDC), an affiliate of FMR, a distribution and service fee.
This fee is based on annual rates of .25% and .50% (.65% prior to January
1, 1996) of the average net assets of the Class A and Class T shares,
respectively. For the period, the fund paid FDC $1,000 and $14,154,000
under the Class A and Class T Plans, of which $1,000 and $13,898,000 were
paid to securities dealers, banks and other financial institutions for the
distribution of Class A and Class T shares, and providing shareholder
support services.
Under the Plans, FMR or FDC may use its resources to pay administrative and
promotional expenses related to the sale of the fund's Class A, Class T,
and Institutional Class shares. The Plans also authorize payments to third
parties that assist in the sale of the fund's shares or render shareholder
support services.
SALES LOAD. FDC receives a front-end sales charge of up to 5.25% and 3.50%
(4.75% prior to January 1, 1996) for selling Class A and Class T shares of
the fund, respectively.
For the period, FDC received sales charges of $152,000 and $11,846,000 on
sales of Class A and Class T shares of the fund, of which $136,000 and
$9,847,000 were paid to securities dealers, banks, and other financial
institutions.
TRANSFER AGENT FEES. Fidelity Investments Institutional Operations Company
(FIIOC), an affiliate of FMR, is the transfer, dividend disbursing, and
shareholder servicing agent for the fund's Class A and Institutional Class
Shares, while State Street Bank and Trust Company (State Street)
(collectively, with FIIOC, referred to as the Transfer Agents) acts in that
capacity for the fund's Class T shares. The Transfer Agents receive account
fees and asset-based fees that vary according
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
TRANSFER AGENT FEES - CONTINUED
to account size and type of account of the shareholders of the respective
classes of the fund. With respect to the Class T shares, State Street has
delegated certain transfer, dividend disbursing, 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. For the period, the transfer agent fees
were equivalent to annual rates of .29%, .19%, and .14% of the average net
assets of Class A, Class T, and Institutional Class, respectively.
Effective January 1, 1997, FIIOC will replace State Street as the transfer
agent for the fund's Class T shares.
ACCOUNTING FEES. Fidelity Service Co., an affiliate of FMR, maintains the
fund's accounting records. The fee is based on the level of average net
assets for the month plus out-of-pocket expenses.
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 $830,000 for the period.
5. EXPENSE REDUCTIONS.
FMR agreed to reimburse expenses in accordance with a state expense
limitation. FMR retains the ability to be repaid by the fund, or any class
for these expense reductions in the event that expenses fall below the
state limitation prior to the end of the fiscal year. For the period, the
reimbursement reduced the expenses of Class A by $8,000.
FMR has also voluntarily agreed to reimburse certain transfer agent,
distribution and registration expenses for Class A. For the period, the
reimbursement reduced these expenses by $1,000.
FMR has also 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 $496,000 under this arrangement.
In addition, the fund has entered into arrangements with its custodian and
transfer agent whereby interest earned on uninvested cash balances was used
to offset a portion of expenses. During the period, the fund's custodian
fees were reduced by $8,000 under the custodian arrangement, and Class T
and Institutional Class expenses were reduced by $54,000 and $67,000,
respectively, under the transfer agent arrangement.
6. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SHARES DOLLARS
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
AMOUNTS IN THOUSANDS 1996 A 1995 1996 A 1995
CLASS A 100 - $ 4,269 $ -
Shares sold
Shares redeemed (1) - (67) -
Net increase (decrease) 99 - $ 4,202 $ -
CLASS T 45,074 31,684 $ 1,801,024 $ 1,094,983
Shares sold
Reinvestment of distributions 2,864 299 106,705 8,317
Shares redeemed (20,513) (11,136) (824,097) (378,584)
Net increase (decrease) 27,425 20,847 $ 1,083,632 $ 724,716
INSTITUTIONAL CLASS 18,894 11,766 $ 763,651 $ 398,403
Shares sold
Reinvestment of distributions 847 151 31,892 4,231
Shares redeemed (10,250) (6,533) (412,791) (225,545)
Net increase (decrease) 9,491 5,384 $ 382,752 $ 177,089
</TABLE>
A SHARE TRANSACTIONS FOR CLASS A ARE FOR THE PERIOD SEPTEMBER 3, 1996
(COMMENCEMENT OF SALE OF CLASS A SHARES) TO NOVEMBER 30, 1996.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Advisor Series I and the Shareholders of
Fidelity Advisor Equity Growth Fund:
We have audited the accompanying statement of assets and liabilities of
Fidelity Advisor Series I: Fidelity Advisor Equity Growth Fund, including
the schedule of portfolio investments, as of November 30, 1996, and the
related statement of operations for the year then ended, the statement of
changes in net assets for each of the two years in the period then ended
and the financial highlights of Class A, Class T and Institutional Class
for each of the periods indicated therein. These financial statements and
financial highlights are the responsibility of the fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of November 30, 1996 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 Growth Fund as of
November 30, 1996, the results of its operations for the year then ended,
the changes in its net assets for each of the two years in the period then
ended, and the financial highlights of Class A, Class T and Institutional
Class for each of the periods indicated therein, in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
January 10, 1997
DISTRIBUTIONS
The Board of Trustees of Fidelity Advisor Equity Growth Fund voted to pay
to shareholders of record at the opening of business on record date, the
following distributions derived from capital gains realized from sales of
portfolio securities, and dividends derived from net investment income:
PAY DATE RECORD DATE DIVIDENDS CAPITAL GAINS
Class A 12/23/96 12/20/96 $0.36 $1.20
1/6/97 1/3/97 $0.00 $0.03
Class T 12/23/96 12/20/96 $0.17 $1.20
1/6/97 1/3/97 $0.00 $0.03
A total of 15% of the dividends distributed during the fiscal year
qualifies for the dividends-received deduction for corporate shareholders.
The fund will notify shareholders in January 1997 of the applicable
percentage for use in preparing 1996 income tax returns.
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.)
Inc., London, England
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
William J. Hayes, Vice President
Lawrence Greenberg, Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
Robert H. Morrison, Manager,
Security Transactions
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
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 *
ADVISORY BOARD
William O. McCoy
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
State Street Bank and Trust Company
Boston, MA - Class T
Fidelity Investments Institutional Operations Company
Boston, MA - Class A
CUSTODIAN
Chase Manhattan Bank, N.A.
New York, NY
FOCUS FUNDS
Fidelity Advisor Consumer
Industries Fund
Fidelity Advisor Cyclical
Industries Fund
Fidelity Advisor Financial
Services Fund
Fidelity Advisor Health Care Fund
Fidelity Advisor Natural
Resources Fund
Fidelity Advisor Technology Fund
Fidelity Advisor Utilities Growth Fund
GROWTH FUNDS
Fidelity Advisor TechnoQuant(trademark)
Growth Fund
Fidelity Advisor Overseas Fund
Fidelity Advisor Mid Cap Fund
Fidelity Advisor Equity Growth Fund
Fidelity Advisor Growth
Opportunities Fund
Fidelity Advisor Strategic
Opportunities Fund
Fidelity Advisor Large Cap Fund
GROWTH AND INCOME FUNDS
Fidelity Advisor Growth & Income Fund
Fidelity Advisor Equity Income Fund
Fidelity Advisor Balanced Fund
TAXABLE INCOME FUNDS
Fidelity Advisor Emerging Markets Income Fund
Fidelity Advisor High Yield Fund
Fidelity Advisor Strategic Income Fund
Fidelity Advisor Government Investment Fund
Fidelity Advisor Intermediate Bond Fund
Fidelity Advisor Short Fixed-Income Fund
MUNICIPAL FUNDS
Fidelity Advisor High Income
Municipal Fund
Fidelity Advisor Municipal Bond Fund
Fidelity Advisor Intermediate Municipal Income Fund
Fidelity Advisor Short-Intermediate Municipal Income Fund
STATE MUNICIPAL FUNDS
Fidelity Advisor California Municipal Income Fund
Fidelity Advisor New York Municipal Income Fund
MONEY MARKET FUNDS
Daily Money Fund: Money Market Portfolio
Daily Money Fund: U.S. Treasury Portfolio
Daily Tax-Exempt Money Fund
(REGISTERED TRADEMARK)
(2_FIDELITY_LOGOS)FIDELITY ADVISOR
(registered trademark)
EQUITY GROWTH
FUND - INSTITUTIONAL CLASS
ANNUAL REPORT
NOVEMBER 30, 1996
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over time.
FUND TALK 6 The manager's review of fund
performance, strategy and outlook.
INVESTMENT CHANGES 9 A summary of major shifts in the
fund's investments over the past six
months.
INVESTMENTS 10 A complete list of the fund's
investments with their market value.
FINANCIAL STATEMENTS 26 Statements of assets and liabilities,
operations, and changes in net
assets, as well as financial
highlights.
NOTES 32 Notes to the financial statements.
REPORT OF INDEPENDENT 38 The auditors' opinion.
ACCOUNTANTS
DISTRIBUTIONS 39
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR DISTRIBUTION TO
PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN
EFFECTIVE
PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY ADVISOR FUND, INCLUDING CHARGES AND
EXPENSES,
CONTACT YOUR INVESTMENT PROFESSIONAL FOR A FREE PROSPECTUS. READ IT
CAREFULLY BEFORE YOU
INVEST OR SEND MONEY.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
Although stocks have managed to post solid returns throughout 1996, signs
of strength in the economy have led to inflation fears, causing some
uncertainty in bond markets so far this year. In 1995, both stock and bond
markets posted strong results, while the year before, stocks posted
below-average returns and bonds had one of the worst years in history.
These market ups and downs are a normal part of investing, and there are
some basic principles that are helpful for investors to remember in
different types of markets.
If you can leave your money invested over the long term, you can avoid the
results of the volatility that generally accompanies the stock market in
the short term, as we witnessed last year. You also can help to manage some
of the risks of investing through diversification. 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 types of 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. 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 or guaranteed 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. 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
ADVISOR EQUITY GROWTH - INSTITUTIONAL CLASS
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can look at
the total percentage change in value, the average annual percentage change,
or the growth of a hypothetical $10,000 investment. Total return includes
changes in share price, plus reinvestment of any dividends (or income) and
capital gains (the profits the fund earns when it sells securities that
have grown in value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1996 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Advisor Equity Growth - Institutional 19.68% 143.58% 518.61%
Class
S&P 500(registered trademark) 27.86% 130.90% 310.22%
Growth Funds Average 21.09% 110.80% 264.19%
CUMULATIVE TOTAL RETURNS show Institutional Class' performance in
percentage terms over a set period - in this case, one, five, or 10 years.
For example, if you invested $1,000 in a fund that had a 5% return over the
past year, the value of your investment would be $1,050. You can compare
Institutional Class' returns to the performance of the Standard & Poor's
500 Index - a widely recognized, unmanaged index of common stocks. To
measure how Institutional Class' performance stacked up against its peers,
you can compare it to the growth funds average, which reflects the
performance of 652 mutual funds with similar objectives tracked by Lipper
Analytical Services, Inc. over the past 12 months. Both benchmarks include
reinvested dividends and capital gains, if any, and exclude the effects of
sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1996 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS
Advisor Equity Growth - Institutional Class 19.68% 19.49% 19.99%
S&P 500 27.86% 18.21% 15.16%
Growth Funds Average 21.09% 15.77% 13.39%
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.
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19961130 19961209 164559 S00000000000001
FA Equity Growth -CL I SP Standard & Poor 500
00086 SP001
1986/11/30 10000.00 10000.00
1986/12/31 9790.83 9745.00
1987/01/31 10965.40 11057.65
1987/02/28 11956.12 11494.43
1987/03/31 11847.50 11826.62
1987/04/30 11413.04 11721.36
1987/05/31 11337.84 11823.34
1987/06/30 11555.08 12420.42
1987/07/31 12081.45 13050.13
1987/08/31 12808.34 13536.90
1987/09/30 12591.11 13240.44
1987/10/31 9274.14 10388.45
1987/11/30 8288.24 9532.44
1987/12/31 9735.45 10257.86
1988/01/31 9708.60 10689.72
1988/02/29 10290.22 11187.86
1988/03/31 10442.34 10842.15
1988/04/30 10326.02 10962.50
1988/05/31 10254.43 11057.87
1988/06/30 11167.13 11565.43
1988/07/31 10943.43 11521.48
1988/08/31 10460.24 11129.75
1988/09/30 11041.86 11603.88
1988/10/31 10925.53 11926.47
1988/11/30 10755.52 11755.92
1988/12/31 11251.31 11961.65
1989/01/31 12137.89 12837.24
1989/02/28 12147.03 12517.59
1989/03/31 12549.19 12809.25
1989/04/30 13380.92 13474.05
1989/05/31 14532.56 14019.75
1989/06/30 13993.30 13939.84
1989/07/31 14953.00 15198.61
1989/08/31 15537.96 15496.50
1989/09/30 15967.54 15432.96
1989/10/31 15766.46 15074.92
1989/11/30 15830.44 15382.45
1989/12/31 16296.55 15751.63
1990/01/31 14800.78 14694.69
1990/02/28 15397.00 14884.25
1990/03/31 16296.55 15278.69
1990/04/30 15972.29 14896.72
1990/05/31 18242.10 16349.15
1990/06/30 18399.00 16237.98
1990/07/31 17876.00 16186.01
1990/08/31 15595.74 14722.80
1990/09/30 14309.17 14005.80
1990/10/31 14486.99 13945.57
1990/11/30 16265.17 14846.46
1990/12/31 17426.22 15260.67
1991/01/31 19957.52 15926.04
1991/02/28 21756.63 17064.75
1991/03/31 23890.45 17477.72
1991/04/30 23806.77 17519.66
1991/05/31 25051.50 18276.51
1991/06/30 22969.98 17439.45
1991/07/31 24831.85 18252.13
1991/08/31 26170.71 18684.70
1991/09/30 26233.47 18372.67
1991/10/31 26306.69 18618.86
1991/11/30 25396.68 17868.52
1991/12/31 28702.32 19912.68
1992/01/31 29506.02 19542.31
1992/02/29 29657.69 19796.35
1992/03/31 28257.64 19410.33
1992/04/30 27674.29 19980.99
1992/05/31 27545.95 20078.90
1992/06/30 26635.92 19779.72
1992/07/31 27569.29 20588.71
1992/08/31 26904.26 20166.64
1992/09/30 27405.95 20404.61
1992/10/31 28852.66 20476.03
1992/11/30 30766.06 21174.26
1992/12/31 31612.08 21434.70
1993/01/31 32495.86 21614.75
1993/02/28 31672.42 21908.71
1993/03/31 32674.87 22370.99
1993/04/30 32149.78 21829.61
1993/05/31 34035.32 22414.64
1993/06/30 34178.53 22479.65
1993/07/31 33605.71 22389.73
1993/08/31 34858.76 23238.30
1993/09/30 35908.94 23059.36
1993/10/31 36362.42 23536.69
1993/11/30 35491.25 23313.09
1993/12/31 36578.02 23595.18
1994/01/31 37897.85 24397.42
1994/02/28 37595.87 23736.25
1994/03/31 36073.42 22701.35
1994/04/30 36488.63 22991.92
1994/05/31 36287.32 23368.99
1994/06/30 34714.53 22796.45
1994/07/31 35482.05 23544.18
1994/08/31 37105.17 24509.49
1994/09/30 36362.81 23909.00
1994/10/31 37570.71 24446.96
1994/11/30 36362.81 23556.60
1994/12/31 36562.30 23905.94
1995/01/31 36255.16 24525.82
1995/02/28 37675.68 25481.60
1995/03/31 39121.79 26233.56
1995/04/30 40823.85 27006.14
1995/05/31 42269.96 28085.57
1995/06/30 45507.72 28738.00
1995/07/31 48924.64 29690.95
1995/08/31 49449.33 29765.47
1995/09/30 50869.85 31021.58
1995/10/31 50639.49 30910.83
1995/11/30 51688.88 32267.82
1995/12/31 51229.77 32889.29
1996/01/31 52457.24 34008.85
1996/02/29 53653.16 34324.11
1996/03/31 54047.26 34654.65
1996/04/30 55691.65 35165.46
1996/05/31 57213.72 36072.38
1996/06/30 56507.05 36209.81
1996/07/31 53095.97 34610.06
1996/08/31 54359.83 35339.99
1996/09/30 58042.71 37328.92
1996/10/31 58355.28 38358.45
1996/11/29 61861.49 41022.00
IMATRL PRASUN SHR__CHT 19961130 19961209 164604 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was invested
in Advisor Equity Growth - Institutional Class on November 30, 1986. As the
chart shows, by November 30, 1996, the value of the investment would have
grown to $61,861 - a 518.61% increase on the 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
$41,022 - a 310.22% 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)
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
Paced by the robust performance
of blue chip stocks, the U.S. stock
market posted strong gains for the
year that ended November 30,
1996. The Standard & Poor's 500
Index returned 27.86% during the
period - well above its long-term
average of about 12%. The stock
market spent much of the past
year breaking price and trading
volume records. Solid corporate
earnings reports, large cash
inflows into mutual funds,
widespread optimism and a
generally favorable interest rate
environment propelled share
prices higher. Large capitalization
stocks thrived as investors sought
their lower volatility and higher
degree of liquidity over smaller
cap stocks in an environment
where it was sometimes difficult to
discern the health of the economy.
The Dow Jones Industrial
Average closed above 6500 for
the first time in November. While
short-term confusion over the
direction of interest rates created
a volatile backdrop in the summer
months, stocks rallied again when
the Federal Reserve Board left
short-term interest rates
unchanged and it appeared
inflation would not be an issue for
the remainder of 1996.
Smaller-company stocks posted
strong gains at the beginning of
1996, but trended downward in
the spring and summer because
their earnings tend to be more
affected by the higher borrowing
costs brought on by higher rates.
When interest rate fears subsided,
these stocks rebounded, only to
fade toward the end of the period
due to earnings concerns and a
general flight to quality.
An interview with Larry Greenberg, Portfolio Manager of Fidelity Advisor
Equity Growth Fund
Q. WHAT CAN YOU TELL US ABOUT THE FUND'S PERFORMANCE, LARRY?
A. For the one-year period that ended November 30, 1996, the fund's
Institutional Class shares had a total return of 19.68%. Additionally, the
Standard & Poor's 500 Index returned 27.86% and the growth funds average,
according to Lipper Analytical Services, was up 21.09%. The fund's
underperformance in the past year is reflective of the underperformance of
technology stocks earlier in the period, which hurt many growth-oriented
investors if they sold these stocks.
Q. HAVE YOU MADE ANY MAJOR CHANGES SINCE YOU TOOK OVER THE FUND?
A. When I took over, the fund had about 18% of its assets in short-term
investments, so the first thing I did was try to reinvest some of those
assets in the stock market. Other than that, I haven't made any significant
changes. In fact, I can't imagine a smoother transition between managers.
The previous manager, Bob Stansky, and I have very similar investment
styles, and we've worked together for a number of years.
Q. HOW IS THE FUND POSITIONED IN TECHNOLOGY-RELATED COMPANIES? WERE THERE
ANY THEMES YOU FOLLOWED?
A. I focused the fund's technology weighting in what I call the "Nasdaq
Four" - Intel, Microsoft, Cisco Systems and Oracle. In the technology
arena, we've seen the bigger firms getting bigger at the expense of smaller
firms, which are finding it harder and harder to gain market share.
Additionally, the Nasdaq Four were well-positioned to benefit from two
major trends during the period - growth of the Internet and personal
computers.
Q. DECLINING SEMICONDUCTOR PRICES HAVE HURT THAT INDUSTRY OVER THE PAST
YEAR. WERE THERE ANY RECENT DEVELOPMENTS IN THIS SITUATION?
A. Semiconductor prices have stabilized following a freefall for much of
this past year. An oversupply in the market continues, but demand has
picked up as some companies have been able to work through their excess
inventories. Breaking it down a bit, DRAM (dynamic random access memory)
companies' pricing is still anemic; however, CPU (central processing unit)
pricing is stronger.
Q. WHAT WAS THE STORY WITH THE FUND'S HEALTH CARE POSITION?
A. In my opinion, one of the most intriguing parts of the health care
market has been the pharmaceutical area. It was one segment of the market
where business fundamentals improved steadily throughout the year. With the
proliferation of managed care, we've seen strong unit demand for drugs. For
example, in the third quarter of 1996, Merck had a phenomenal 25% unit
growth in their domestic pharmaceutical business. In general, I looked for
companies with accelerated earnings momentum, good year-over-year earnings
growth and strong revenue growth that were trading at reasonable prices.
Q. HOW ABOUT RETAIL?
A. I think finally we may be seeing a good time for retail. If you look at
the past three years, consumer demand was pretty poor. In the past year,
however, we've seen demand picking up and the beginnings of a turnaround in
the earnings growth rate of some major retailers. I also targeted specialty
retailers considered to be "category killers" - companies that dominate
their market segment no matter what is happening in the overall retail
market or the economy. One example of a category killer was PETsMART.
Q. WAS THERE A PARTICULAR STOCK THAT DIDN'T LIVE UP TO EXPECTATIONS?
A. While category killer retail stocks can be great growth companies, they
can be quite volatile as well. Such was the case with Sunglass Hut
International, whose revenue growth and earnings rapidly deteriorated
during the period. Thus, the fund sustained some losses as a result of
holding the stock.
Q. HOW ARE YOU POSITIONING THE FUND GOING FORWARD?
A. Obviously, the stock market has had quite a run, and we have enjoyed a
long economic expansion. In this environment, I'm trying to reduce some of
the risk in the fund by spreading its assets over a variety of industries
and stocks that haven't gone up as much as the overall market. While this
strategy does not eliminate all risk in the fund, I believe it's the best
course of action in an uncertain time.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.
FUND FACTS
GOAL: to achieve capital
appreciation by investing
primarily in common and
preferred stock and securities
convertible into common
stock of companies with
above-average growth
characteristics
START DATE: November 22, 1983
SIZE: as of November 30,
1996, more than $4.8 billion
MANAGER: Larry Greenberg,
since June 1996; manager,
VIP: Growth Portfolio, since
1991; joined Fidelity in 1986
(checkmark)
LARRY GREENBERG ON
COMPETITION IN HIGH TECH
INDUSTRIES:
"Much is discussed in the
financial press about the
intense competition in certain
segments of high tech. While
these corporate wars make
good news stories, they are
often oversimplified and
blown out of proportion. For
example, there's been a lot of
attention in the media devoted
to the "browser war" between
Netscape and Microsoft.
While Internet browsers are
Netscape's best-known
product, the company
generates most of its
revenues from corporate
applications of Internet
technology - not browsers.
"Another issue is whether
microprocessor-maker Intel
can maintain its
dominance in the face of new
competition. While it has
some notable competitors in a
rapidly changing market,
people often forget Intel's
industry clout, its vast R&D
budget and marketing
strength, and its ability to
maintain aggressive pricing."
NOTE TO SHAREHOLDERS:
Effective January 7, 1997,
Jennifer Uhrig became
manager of the fund. Ms.
Uhrig joined Fidelity in 1987,
and has worked as an
analyst and manager.
INVESTMENT CHANGES
TOP TEN STOCKS AS OF NOVEMBER 30, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE STOCKS
6 MONTHS AGO
Intel Corp. 2.7 1.2
General Electric Co. 2.4 2.1
Cisco Systems, Inc. 2.3 1.9
Oracle Systems Corp. 2.0 1.3
HFS, Inc. 2.0 1.0
Federal National Mortgage 1.7 1.4
Association
International Business Machines 1.6 0.2
Corp.
CUC International, Inc. 1.6 0.8
Microsoft Corp. 1.4 1.4
Lowe's Companies, Inc. 1.2 1.0
TOP FIVE MARKET SECTORS AS OF NOVEMBER 30, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE MARKET
SECTORS
6 MONTHS AGO
Technology 26.7 23.0
Health 10.4 10.8
Retail & Wholesale 9.6 9.6
Finance 8.8 10.1
Media & Leisure 6.7 4.5
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF NOVEMBER 30, 1996 * AS OF MAY 31, 1996 **
Row: 1, Col: 1, Value: 10.0
Row: 1, Col: 2, Value: 40.0
Row: 1, Col: 3, Value: 50.0
Row: 1, Col: 1, Value: 18.1
Row: 1, Col: 2, Value: 40.0
Row: 1, Col: 3, Value: 41.9
Stocks 90.0%
Short-term
investments 10.0%
FOREIGN
INVESTMENTS 3.6%
Stocks 81.9%
Short-term
investments 18.1%
FOREIGN
INVESTMENTS 3.1%
*
**
INVESTMENTS NOVEMBER 30, 1996
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 90.0%
SHARES VALUE (NOTE 1)
(000S)
AEROSPACE & DEFENSE - 1.0%
AEROSPACE & DEFENSE - 0.8%
Boeing Co. 216,400 $ 21,506
Gulfstream Aerospace Corp. (a) 142,600 3,422
Lockheed Martin Corp. 126,800 11,491
36,419
DEFENSE ELECTRONICS - 0.2%
Raytheon Co. 190,400 9,734
TOTAL AEROSPACE & DEFENSE 46,153
BASIC INDUSTRIES - 2.3%
CHEMICALS & PLASTICS - 1.4%
Air Products & Chemicals, Inc. 48,400 3,364
Airgas, Inc. (a) 157,000 4,043
du Pont (E.I.) de Nemours & Co. 225,000 21,206
IMC Global, Inc. 16,700 603
Monsanto Co. 625,000 24,844
Potash Corp. of Saskatchewan 34,500 2,602
Praxair, Inc. 125,000 6,078
Union Carbide Corp. 133,100 6,140
68,880
IRON & STEEL - 0.1%
Nucor Corp. 94,400 5,133
METALS & MINING - 0.4%
Aluminum Co. of America 100,000 6,363
Freeport McMoRan Copper & Gold, Inc. Class A 60,000 1,793
Inco Ltd. 138,100 4,820
Titanium Metals Corp. (a) 143,400 4,803
17,779
PACKAGING & CONTAINERS - 0.2%
Crown Cork & Seal Co., Inc. 135,300 7,171
Tupperware Corp. 75,000 3,975
11,146
PAPER & FOREST PRODUCTS - 0.2%
International Paper Co. 140,000 5,950
Kimberly-Clark Corp. 58,100 5,679
11,629
TOTAL BASIC INDUSTRIES 114,567
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
CONGLOMERATES - 0.8%
AlliedSignal, Inc. 240,000 $ 17,580
Mark IV Industries, Inc. 168,500 3,686
United Technologies Corp. 120,000 16,830
38,096
CONSTRUCTION & REAL ESTATE - 0.3%
CONSTRUCTION - 0.0%
Oakwood Homes Corp. 80,000 1,770
ENGINEERING - 0.3%
MasTec, Inc. (a) 252,200 11,916
REAL ESTATE INVESTMENT TRUSTS - 0.0%
RFS Hotel Investors, Inc. 108,300 1,814
TOTAL CONSTRUCTION & REAL ESTATE 15,500
DURABLES - 4.2%
AUTOS, TIRES, & ACCESSORIES - 2.5%
AutoZone, Inc. (a) 665,600 16,390
Chrysler Corp. 1,024,000 36,352
Danaher Corp. 126,700 5,670
Eaton Corp. 100,000 6,925
General Motors Corp. 682,721 39,342
Honda Motor Co. Ltd. 149,000 4,405
PACCAR, Inc. 46,400 3,086
Pep Boys-Manny, Moe & Jack 240,000 8,790
TRW, Inc. 25,000 2,434
123,394
CONSUMER DURABLES - 0.4%
Minnesota Mining & Manufacturing Co. 235,000 19,681
CONSUMER ELECTRONICS - 0.2%
Harman International Industries, Inc. 125,000 6,375
Newell Co. 176,100 5,459
11,834
HOME FURNISHINGS - 0.1%
Furniture Brands International, Inc. (a) 46,400 574
Leggett & Platt, Inc. 84,800 2,597
3,171
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
DURABLES - CONTINUED
TEXTILES & APPAREL - 1.0%
Adidas AG (b) 26,600 $ 2,301
Adidas AG 44,700 3,867
Gucci Group NV 87,400 6,413
Liz Claiborne, Inc. 82,900 3,513
NIKE, Inc. Class B 461,700 26,259
Tommy Hilfiger (a) 90,000 4,860
47,213
TOTAL DURABLES 205,293
ENERGY - 5.0%
ENERGY SERVICES - 1.5%
Baker Hughes, Inc. 110,400 4,043
Diamond Offshore Drilling, Inc. (a) 96,700 6,165
Dresser Industries, Inc. 157,000 5,142
Halliburton Co. 131,000 7,893
Schlumberger Ltd. 325,000 33,800
Tidewater, Inc. 87,400 3,824
Transocean Offshore, Inc. 37,800 2,277
Varco International, Inc. (a) 93,900 2,148
Western Atlas, Inc. (a) 100,000 7,050
72,342
INDEPENDENT POWER - 0.2%
Thermo Electron Corp. 225,050 8,158
OIL & GAS - 3.3%
Abacan Resource Corp. (a) 213,000 1,824
Amerada Hess Corp. 194,200 11,434
Anadarko Petroleum Corp. 85,000 5,684
Apache Corp. 170,600 6,206
Atlantic Richfield Co. 175,200 24,375
British Petroleum PLC ADR 153,807 21,341
Burlington Resources, Inc. 71,600 3,795
Chesapeake Energy Corp. (a) 161,600 10,565
Enron Oil & Gas Co. 115,900 3,086
Kerr-McGee Corp. 41,100 2,877
Louisiana Land & Exploration Co. 133,500 7,977
Nationale Elf Aquitaine 29,400 2,567
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
ENERGY - CONTINUED
OIL & GAS - CONTINUED
Occidental Petroleum Corp. 239,500 $ 5,748
Parker & Parsley Petroleum Co. 48,200 1,591
Pennzoil Co. 69,300 3,897
Royal Dutch Petroleum Co. ADR 235,100 39,937
Union Pacific Resources Group, Inc. 94,000 2,807
Unocal Corp. 176,320 7,185
162,896
TOTAL ENERGY 243,396
FINANCE - 8.8%
BANKS - 2.6%
Bank of New York Co., Inc. 624,200 22,393
BankAmerica Corp. 325,000 33,475
Citicorp 430,000 46,978
First Bank System, Inc. 87,700 6,391
NationsBank Corp. 196,661 20,379
129,616
CREDIT & OTHER FINANCE - 1.5%
American Express Co. 900,004 47,025
Beneficial Corp. 93,200 5,790
Concord EFS, Inc. (a) 9,300 271
Green Tree Financial Corp. 185,000 7,747
Household International, Inc. 120,082 11,378
PHH Corp. 38,600 1,732
73,943
FEDERAL SPONSORED CREDIT - 2.6%
Federal Home Loan Mortgage Corporation 340,000 38,845
Federal National Mortgage Association 1,976,700 81,539
Student Loan Marketing Association 49,300 4,739
125,123
INSURANCE - 1.9%
Allstate Corp. 165,079 9,946
American General Corp. 47,000 1,933
American International Group, Inc. 235,000 27,025
CIGNA Corp. 56,600 8,002
Capital Re Corp. 24,700 948
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
FINANCE - CONTINUED
INSURANCE - CONTINUED
General Re Corp. 69,400 $ 11,711
ITT Hartford Group, Inc. 50,000 3,418
MBIA, Inc. 76,700 7,756
MGIC Investment Corp. 109,700 8,214
SunAmerica, Inc. 65,000 2,722
Travelers, Inc. (The) 132,933 5,982
UNUM Corp. 54,100 3,848
91,505
SECURITIES INDUSTRY - 0.2%
Schwab (Charles) Corp. 290,900 8,763
United Asset Management Corp. 58,200 1,579
10,342
TOTAL FINANCE 430,529
HEALTH - 10.4%
DRUGS & PHARMACEUTICALS - 6.0%
ALZA Corp. Class A (a) 154,500 4,365
American Home Products Corp. 465,000 29,876
Amgen, Inc. (a) 177,000 10,775
Biochem Pharmaceuticals, Inc. (a) 103,500 4,425
Biogen, Inc. (a) 464,000 17,748
Bristol-Myers Squibb Co. 332,400 37,811
Elan Corp. PLC ADR (a) 250,000 7,438
Genentech, Inc. special (a) 300,000 16,237
Lilly (Eli) & Co. 305,000 23,333
Merck & Co., Inc. 638,200 52,971
Perseptive Biosystems, Inc. (a) 50 -
Perseptive Biosystems, Inc. Class G (warrants) (a) 28 -
Pfizer, Inc. 431,900 38,708
Schering-Plough Corp. 317,000 22,586
SmithKline Beecham PLC ADR 293,500 20,215
Thermotrex Corp. (a) 29,200 993
Warner-Lambert Co. 74,200 5,305
292,786
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
HEALTH - CONTINUED
MEDICAL EQUIPMENT & SUPPLIES - 2.1%
Boston Scientific Corp. (a) 179,400 $ 10,472
Cardinal Health, Inc. 111,700 9,341
Johnson & Johnson 750,000 39,844
Medtronic, Inc. 404,600 26,754
Omnicare, Inc. 135,000 4,118
Pall Corp. 151,900 3,969
St. Jude Medical, Inc. (a) 107,500 4,488
Sofamor/Danek Group, Inc. (a) 89,400 2,514
101,500
MEDICAL FACILITIES MANAGEMENT - 2.3%
American Medical Response, Inc. (a) 98,500 2,955
Carematrix Corp. (a) 158,800 2,184
Columbia/HCA Healthcare Corp. 615,105 24,604
HEALTHSOUTH Rehabilitation Corp. (a) 1,036,900 39,013
Lincare Holdings, Inc. (a) 211,400 8,403
Oxford Health Plans, Inc. (a) 310,000 17,979
PacifiCare Health Systems, Inc. Class B (a) 130,200 10,807
United HealthCare Corp. 171,700 7,405
Vencor, Inc. (a) 29,800 965
114,315
TOTAL HEALTH 508,601
HOLDING COMPANIES - 0.1%
Norfolk Southern Corp. 35,000 3,150
INDUSTRIAL MACHINERY & EQUIPMENT - 4.0%
ELECTRICAL EQUIPMENT - 3.0%
Alcatel Alsthom Compagnie Generale d'Electricite SA 52,300 4,754
American Power Conversion Corp. (a) 116,600 2,762
Duracell International, Inc. 19,900 1,326
Emerson Electric Co. 175,000 17,172
General Electric Co. 1,125,000 117,000
Leitch Technology Corp. (a) 177,000 3,410
Oak Industries, Inc. (a) 36,600 851
Westinghouse Electric Corp. 35,300 662
147,937
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED
INDUSTRIAL MACHINERY & EQUIPMENT - 0.9%
Case Corp. 151,500 $ 7,954
Caterpillar, Inc. 157,900 12,494
Illinois Tool Works, Inc. 52,700 4,519
Ingersoll-Rand Co. 150,000 6,975
MSC Industrial Direct, Inc. (a) 55,500 2,074
Stanley Works 83,100 2,451
UCAR International, Inc. (a) 124,000 4,697
41,164
POLLUTION CONTROL - 0.1%
USA Waste Services, Inc. (a) 125,300 4,041
WMX Technologies, Inc. 58,000 2,088
6,129
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 195,230
MEDIA & LEISURE - 6.7%
BROADCASTING - 0.6%
Clear Channel Communications, Inc. (a) 43,500 3,002
Emmis Broadcasting Corp. Class A (a) 21,900 753
Evergreen Media Corp. Class A (a) 195,500 4,839
Grupo Televisa SA de CV sponsored ADR (a) 114,600 3,123
Jacor Communications, Inc. Class A (a) 51,600 1,238
Lin Television Corp. (a) 81,500 3,270
PanAmSat Corp. (a) 142,400 4,094
Time Warner, Inc. 327 13
Viacom, Inc. Class B (non-vtg.) (a) 195,502 7,380
27,712
ENTERTAINMENT - 0.4%
Disney (Walt) Co. 110,100 8,120
MGM Grand, Inc. (a) 170,000 6,566
Regal Cinemas, Inc. (a) 110,700 3,612
18,298
LEISURE DURABLES & TOYS - 0.2%
Harley-Davidson, Inc. 186,800 8,289
Nintendo Co. Ltd. Ord. 42,500 3,010
11,299
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
MEDIA & LEISURE - CONTINUED
LODGING & GAMING - 3.6%
Anchor Gaming (a) 75,000 $ 3,131
Circus Circus Enterprises, Inc. (a) 507,000 18,506
Doubletree Corp. (a) 85,000 3,570
Extended Stay America, Inc. (a) 114,000 2,366
HFS, Inc. (a) 1,474,900 95,500
Hilton Hotels Corp. 440,000 12,870
Host Marriott Corp. 196,400 2,995
ITT Corp. (a) 70,000 3,228
Mirage Resorts, Inc. (a) 1,026,100 24,755
Penske Motorsports, Inc. (a) 5,100 156
Prime Hospitality Corp. (a) 64,900 1,079
Sun International Hotels Ltd. Ord. (a) 125,000 6,203
Wyndham Hotel Corp. (a) 23,500 461
174,820
PUBLISHING - 0.6%
Gannett Co., Inc. 100,000 7,850
Knight-Ridder, Inc. 170,000 7,140
New York Times Co. (The) Class A 105,000 3,924
Scholastic Corp. (a) 52,100 3,882
Times Mirror Co. Class A 139,800 7,322
30,118
RESTAURANTS - 1.3%
Apple South, Inc. 365,900 5,397
Applebee's International, Inc. 146,300 4,261
Landry's Seafood Restaurants, Inc. (a) 387,200 9,293
Lone Star Steakhouse Saloon (a) 448,800 12,847
Outback Steakhouse, Inc. (a) 104,900 3,029
Planet Hollywood International, Inc. Class A (a) 193,300 4,446
Rainforest Cafe, Inc. (a) 285,100 8,339
Starbucks Corp. (a) 432,100 14,961
62,573
TOTAL MEDIA & LEISURE 324,820
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
NONDURABLES - 3.3%
BEVERAGES - 1.1%
Anheuser-Busch Companies, Inc. 347,800 $ 14,738
Coca-Cola Co. (The) 316,900 16,202
PepsiCo, Inc. 832,800 24,880
55,820
FOODS - 0.2%
General Mills, Inc. 35,200 2,235
Nabisco Holdings Corp. Class A 137,500 5,328
7,563
HOUSEHOLD PRODUCTS - 1.1%
Avon Products, Inc. 75,800 4,225
Gillette Co. 311,100 22,944
Procter & Gamble Co. 243,500 26,481
53,650
TOBACCO - 0.9%
Philip Morris Companies, Inc. 414,400 42,735
TOTAL NONDURABLES 159,768
PRECIOUS METALS - 0.3%
Barrick Gold Corp. 325,000 9,765
Bre-X Minerals Ltd. 255,600 3,949
Newmont Mining Corp. 41,600 1,992
15,706
RETAIL & WHOLESALE - 9.6%
APPAREL STORES - 1.2%
Baby Superstore, Inc. (a) 308,200 8,553
Footstar, Inc. (a) 64,777 1,328
Gap, Inc. 451,500 14,504
Gymboree Corp. (a) 75,000 2,119
Just for Feet, Inc. (a) 639,000 15,096
Limited, Inc. (The) 39,613 713
Loehmanns, Inc. (a) 112,100 3,377
Saks Holdings, Inc. (a) 149,600 4,862
TJX Companies, Inc. 190,000 8,574
59,126
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
RETAIL & WHOLESALE - CONTINUED
DRUG STORES - 0.3%
CVS Corp. 225,000 $ 9,253
General Nutrition Companies, Inc. (a) 171,500 2,958
Revco (D.S.), Inc. (a) 93,200 3,215
15,426
GENERAL MERCHANDISE STORES - 2.4%
Consolidated Stores Corp. (a) 223,200 8,258
Dayton Hudson Corp. 151,100 5,874
Family Dollar Stores, Inc. 388,800 7,290
Federated Department Stores, Inc. (a) 325,000 11,091
Meyer (Fred), Inc. (a) 82,800 2,774
Nordstrom, Inc. 34,100 1,483
Price/Costco, Inc. (a) 368,400 8,565
Sears, Roebuck & Co. 245,000 12,190
Stein Mart, Inc. (a) 133,200 2,547
Wal-Mart Stores, Inc. 2,175,900 55,485
Woolworth Corp. (a) 88,400 2,122
117,679
GROCERY STORES - 0.1%
Safeway, Inc. (a) 70,200 2,852
RETAIL & WHOLESALE, MISCELLANEOUS - 5.6%
Barnes & Noble, Inc. (a) 109,500 3,422
Bed Bath & Beyond, Inc. (a) 327,500 8,576
Circuit City Stores, Inc. 278,300 9,288
Corporate Express, Inc. (a) 387,350 10,846
Home Depot, Inc. (The) 809,800 42,211
Lowe's Companies, Inc. 1,425,000 57,891
Officemax, Inc. (a) 1,027,375 14,897
Office Depot, Inc. (a) 563,200 10,982
Petco Animal Supplies, Inc. (a) 27,100 593
PETsMART, Inc. (a) 2,101,500 53,588
Sports Authority, Inc. (a) 73,450 1,818
Staples, Inc. (a) 1,400,087 27,652
Sunglass Hut International, Inc. (a) 801,600 5,912
Toys "R" Us, Inc. (a) 307,800 10,619
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
RETAIL & WHOLESALE - CONTINUED
RETAIL & WHOLESALE, MISCELLANEOUS - CONTINUED
U.S. Office Products Co. (a) 50,700 $ 1,572
Viking Office Products, Inc. (a) 393,400 12,318
Waban, Inc. (a) 114,800 3,028
275,213
TOTAL RETAIL & WHOLESALE 470,296
SERVICES - 1.1%
ADVERTISING - 0.2%
Interpublic Group of Companies, Inc. 72,200 3,574
Omnicom Group, Inc. 58,100 2,963
Universal Outdoor Holdings, Inc. (a) 101,500 2,766
9,303
EDUCATIONAL SERVICES - 0.0%
Sylvan Learning Systems (a) 49,650 1,297
LEASING & RENTAL - 0.1%
Hollywood Entertainment Corp. (a) 315,800 6,355
SERVICES - 0.8%
ADT Ltd. (a) 47,000 964
APAC Teleservices, Inc. (a) 107,900 5,098
AccuStaff, Inc. (a) 362,600 7,343
Employee Solutions, Inc. (a) 23,200 429
Medpartners, Inc. (a) 158,600 3,608
Service Corp. International 455,600 13,725
Sitel Corp. (a) 57,900 1,144
Teletech Holdings, Inc. (a) 70,100 2,208
Zebra Technologies Corp. Class A (a) 59,700 1,537
36,056
TOTAL SERVICES 53,011
TECHNOLOGY - 26.7%
COMMUNICATIONS EQUIPMENT - 4.6%
ADC Telecommunications, Inc. (a) 150,000 5,437
Ascend Communications, Inc. (a) 598,200 42,547
Aspect Telecommunications Corp. (a) 126,300 6,883
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
COMMUNICATIONS EQUIPMENT - CONTINUED
Checkpoint Systems, Inc. (a) 100,000 $ 2,250
Cisco Systems, Inc. (a) 1,669,300 113,304
Dialogic Corp. (a) 12,400 381
Lucent Technologies, Inc. 301,500 15,452
Nokia Corp. AB sponsored ADR 61,100 3,429
P-COM, Inc. (a) 17,600 559
Tellabs, Inc. (a) 177,000 7,036
3Com Corp. (a) 296,100 22,245
U.S. Robotics Corp. (a) 47,400 3,727
223,250
COMPUTER SERVICES & SOFTWARE - 11.3%
Affiliated Computer Services, Inc. Class A (a) 55,400 1,607
America Online, Inc. (a) 178,100 6,300
American Management Systems, Inc. (a) 161,300 5,736
Automatic Data Processing, Inc. 371,800 15,941
BBN Corp. (a) 39,600 911
BMC Software, Inc. (a) 240,000 10,440
CUC International, Inc. (a) 2,927,575 77,215
Cadence Design Systems, Inc. (a) 520,050 20,737
Ceridian Corp. (a) 164,000 7,893
Citrix Systems, Inc. (a) 37,700 1,720
Computer Associates International, Inc. 281,700 18,522
CompUSA, Inc. (a) 609,700 27,437
Computer Sciences Corp. (a) 251,600 19,782
DST Systems, Inc. (a) 75,000 2,427
Electronic Data Systems Corp. 186,100 9,003
Electronics for Imaging, Inc. (a) 126,400 10,744
Equifax Inc. 171,500 5,617
First Data Corp. 301,442 12,020
HBO & Co. 348,700 19,832
Inso Corp. (a) 136,800 5,831
McAfee Associates, Inc. (a) 372,100 17,767
Microsoft Corp. (a) 429,800 67,425
Netscape Communications Corp. (a) 387,400 21,646
Oracle Systems Corp. (a) 2,015,925 98,780
Orckit Communications Ltd. (a) 6,200 70
Parametric Technology Corp. (a) 594,700 32,337
Paychex, Inc. 149,600 8,004
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
COMPUTER SERVICES & SOFTWARE - CONTINUED
PeopleSoft, Inc. (a) 450,000 $ 20,587
Physician Computer Network, Inc. (a) 44,400 366
Remedy Corp. (a) 92,500 4,186
Sabre Group Holdings, Inc. Class A (a) 58,900 1,723
Sybase, Inc. (a) 105,300 1,856
554,462
COMPUTERS & OFFICE EQUIPMENT - 5.5%
Adaptec, Inc. (a) 897,800 33,443
Bay Networks, Inc. (a) 210,000 5,618
Compaq Computer Corp. (a) 563,900 44,689
Dell Computer Corp. (a) 248,000 25,203
EMC Corp. (a) 434,300 14,006
Eltron International, Inc. (a) 62,200 1,928
Gateway 2000, Inc. (a) 34,000 1,823
Hewlett-Packard Co. 276,900 14,917
Ingram Micro, Inc. Class A (a) 79,500 1,957
International Business Machines Corp. 496,600 79,146
Lexmark International Group, Inc. (a) 109,900 2,844
Micron Electronics, Inc. (a) 193,300 3,721
Pitney Bowes, Inc. 150,000 8,850
Quantum Corp. (a) 178,800 4,783
Seagate Technology (a) 516,800 20,414
Tech Data Corp. (a) 236,200 7,086
270,428
ELECTRONIC INSTRUMENTS - 0.2%
Applied Materials, Inc. (a) 142,200 5,421
Perkin-Elmer Corp. 61,900 3,815
9,236
ELECTRONICS - 4.8%
Analog Devices, Inc. (a) 250,000 8,031
Atmel Corp. (a) 223,300 7,341
Cascade Communications Corp. (a) 54,700 3,781
Cirrus Logic, Inc. (a) 175,000 3,434
Intel Corp. 1,023,300 129,831
KEMET Corp. (a) 154,200 3,547
Linear Technology Corp. 391,000 18,426
Maxim Integrated Products, Inc. (a) 402,900 18,684
Micron Technology, Inc. 134,400 4,452
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
TECHNOLOGY - CONTINUED
ELECTRONICS - CONTINUED
Motorola, Inc. 82,300 $ 4,557
S3, Inc. (a) 48,600 826
Solectron Corp. (a) 23,300 1,364
Storage Technology Corp. (a) 187,800 9,367
Texas Instruments, Inc. 98,900 6,305
Uniphase Corp. (a) 150,000 8,925
Xilinx, Inc. (a) 110,700 4,857
233,728
PHOTOGRAPHIC EQUIPMENT - 0.3%
Eastman Kodak Co. 156,900 12,709
TOTAL TECHNOLOGY 1,303,813
TRANSPORTATION - 1.0%
AIR TRANSPORTATION - 0.7%
AMR Corp. (a) 150,000 13,687
America West Airlines, Inc. Class B (a) 398,400 5,827
Comair Holdings, Inc. 150,050 3,732
Delta Air Lines, Inc. 29,400 2,212
Midwest Express Holdings, Inc. (a) 2,400 79
UAL Corp. (a) 101,000 5,808
31,345
RAILROADS - 0.3%
CSX Corp. 332,400 15,540
TRUCKING & FREIGHT - 0.0%
Hunt (J.B.) Transport Services, Inc. 94,200 1,319
TOTAL TRANSPORTATION 48,204
UTILITIES - 4.4%
CELLULAR - 1.4%
AirTouch Communications, Inc. (a) 1,705,035 43,692
Arch Communications Group, Inc. (a) 131,000 1,441
Palmer Wireless, Inc. (a) 139,000 2,085
360 Degrees Communications Co. (a) 566,600 13,456
Vanguard Cellular Systems, Inc. Class A (a) 349,500 5,898
66,572
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
(000S)
UTILITIES - CONTINUED
ELECTRIC UTILITY - 0.0%
Calpine Corp. (a) 142,500 $ 2,565
GAS - 0.2%
Enron Corp. 226,800 10,376
TELEPHONE SERVICES - 2.8%
Ameritech Corp. 157,700 9,285
Bell Atlantic Corp. 141,300 8,884
BellSouth Corp. 362,200 14,624
Cincinnati Bell, Inc. 39,200 2,337
Comsat Corp., Series 1 50,000 1,313
Frontier Corp. 18,500 486
LCI International, Inc. (a) 554,800 18,100
MCI Communications Corp. 640,200 19,526
MFS Communications, Inc. 494,800 23,873
SBC Communications, Inc. 124,900 6,573
Sprint Corp. 200,600 8,400
Telebras sponsored ADR 128,300 9,719
Telefonos de Mexico SA sponsored ADR representing Ord.
Class L shares 130,600 3,967
WorldCom, Inc. (a) 434,800 10,055
137,142
TOTAL UTILITIES 216,655
TOTAL COMMON STOCKS
(Cost $3,335,089) 4,392,788
CASH EQUIVALENTS - 10.0%
MATURITY
AMOUNT (000S)
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.71%, dated
11/29/96 due 12/2/96 $ 489,989 489,756
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $3,824,845) $ 4,882,544
LEGEND
1. Non-income producing
2. 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 $2,301,000 or 0.0% of net
assets.
INCOME TAX INFORMATION
At November 30, 1996, the aggregate cost of investment securities for
income tax purposes was $3,837,792,000. Net unrealized appreciation
aggregated $1,044,752,000, of which $1,113,944,000 related to appreciated
investment securities and $69,192,000 related to depreciated investment
securities.
The fund hereby designates approximately $26,024,000 as a capital gain
dividend for the purpose of the dividend paid deduction.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNTS) NOVEMBER 30, 1996
ASSETS
Investment in securities, at value (including repurchase $ 4,882,544
agreements of $489,756) (cost $3,824,845) -
See accompanying schedule
Cash 1,219
Receivable for investments sold 7,480
Receivable for fund shares sold 7,261
Dividends receivable 3,551
Other receivables 171
Prepaid expenses 15
TOTAL ASSETS 4,902,241
LIABILITIES
Payable for investments purchased $ 29,024
Payable for fund shares redeemed 3,259
Accrued management fee 2,359
Distribution fees payable 1,431
Other payables and accrued expenses 1,246
TOTAL LIABILITIES 37,319
NET ASSETS $ 4,864,922
Net Assets consist of:
Paid in capital $ 3,636,198
Undistributed net investment income 26,034
Accumulated undistributed net realized gain (loss) on 144,992
investments and foreign currency transactions
Net unrealized appreciation (depreciation) on 1,057,698
investments and assets and liabilities in foreign
currencies
NET ASSETS $ 4,864,922
CALCULATION OF MAXIMUM OFFERING PRICE $44.80
CLASS A:
NET ASSET VALUE and redemption price per share
($4,423 (divided by) 98.73 shares)
Maximum offering price per share (100/94.75 of $44.80) $47.28
CLASS T: $44.81
NET ASSET VALUE and redemption price per share
($3,536,973 (divided by) 78,926 shares)
Maximum offering price per share (100/96.50 of $44.81) $46.44
INSTITUTIONAL CLASS: $45.52
NET ASSET VALUE, offering price and redemption price
per share ($1,323,526 (divided by) 29,078 shares)
STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS YEAR ENDED NOVEMBER 30, 1996
INVESTMENT INCOME $ 36,764
Dividends
Interest 34,798
TOTAL INCOME 71,562
EXPENSES
Management fee $ 23,048
Transfer agent fees 1
Class A
Class T 5,414
Institutional Class 1,443
Distribution fees 1
Class A
Class T 14,154
Accounting fees and expenses 805
Non-interested trustees' compensation 13
Custodian fees and expenses 111
Registration fees 11
Class A
Class T 490
Institutional Class 165
Audit 68
Legal 42
Miscellaneous 116
Total expenses before reductions 45,882
Expense reductions (634) 45,248
NET INVESTMENT INCOME 26,314
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investment securities 155,837
Foreign currency transactions (3) 155,834
Change in net unrealized appreciation (depreciation) on:
Investment securities 529,933
Assets and liabilities in foreign currencies (1) 529,932
NET GAIN (LOSS) 685,766
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 712,080
FROM OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30,
1996 1995
INCREASE (DECREASE) IN NET ASSETS
Operations $ 26,314 $ 8,342
Net investment income
Net realized gain (loss) 155,834 163,818
Change in net unrealized appreciation (depreciation) 529,932 499,727
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 712,080 671,887
FROM OPERATIONS
Distributions to shareholders (2,317) (2,488)
From net investment income
Class T
Institutional Class (3,419) (3,809)
From net realized gain (112,907) (4,889)
Class T
Institutional Class (41,604) (2,227)
In excess of net realized gain - (1,642)
Class T
Institutional Class - (756)
TOTAL DISTRIBUTIONS (160,247) (15,811)
Share transactions - net increase (decrease) 1,470,586 901,805
TOTAL INCREASE (DECREASE) IN NET ASSETS 2,022,419 1,557,881
NET ASSETS
Beginning of period 2,842,503 1,284,622
End of period (including undistributed net investment $ 4,864,922 $ 2,842,503
income of $26,034 and $5,825, respectively)
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
YEAR ENDED
NOVEMBER 30,
1996 G
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 39.47
Income from Investment Operations
Net investment income .04 F
Net realized and unrealized gain (loss) 5.29
Total from investment operations 5.33
Net asset value, end of period $ 44.80
TOTAL RETURN B, C 13.50%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in millions) $ 4
Ratio of expenses to average net assets 1.52% A, D
, E
Ratio of expenses to average net assets after expense reductions 1.50% A, H
Ratio of net investment income to average net assets .38% A
Portfolio turnover 76%
Average commission rate I $ .0414
A ANNUALIZED
B THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D LIMITED IN ACCORDANCE WITH A STATE EXPENSE LIMITATION. WITHOUT THIS
REIMBURSEMENT, THE CLASS' RATIO OF EXPENSES TO AVERAGE NET ASSETS WOULD
HAVE BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
E FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE
BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
F NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
G FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A SHARES)
TO NOVEMBER 30, 1996.
H FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES (SEE NOTE 5 OF
NOTES TO FINANCIAL STATEMENTS).
I FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR SECURITY
TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM PERIOD
TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED IN
VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES MAY
DIFFER.
FINANCIAL HIGHLIGHTS - CLASS T
YEARS ENDED NOVEMBER 30,
1996 1995 1994 F 1993 1992 E
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning $ 39.83 $ 28.52 $ 29.50 $ 26.33 $ 23.78
of period
Income from Investment
Operations
Net investment income .22 D .06 .08 (.07) D .01
Net realized and 6.90 11.54 .39 3.82 2.54
unrealized gain (loss)
Total from investment 7.12 11.60 .47 3.75 2.55
operations
Less Distributions
From net investment income (.03) G (.08) - (.08) -
From net realized gain (2.11) G (.16) (1.45) (.50) -
In excess of net realized - (.05) - - -
gain
Total distributions (2.14) (.29) (1.45) (.58) -
Net asset value, end of period $ 44.81 $ 39.83 $ 28.52 $ 29.50 $ 26.33
TOTAL RETURN B, C 19.00% 41.11% 1.58% 14.52% 10.72%
RATIOS AND SUPPLEMENTAL
DATA
Net assets, end of period $ 3,537 $ 2,051 $ 874 $ 378 $ 23
(in millions)
Ratio of expenses to average 1.36% 1.55% 1.71% 1.85% 1.47%
net assets A
Ratio of expenses to average 1.34% 1.54% 1.70% 1.84% 1.47%
net assets after expense H H H H A
reductions
Ratio of net investment income .54% .21% .15% (.24)% .25%
to average net assets A
Portfolio turnover 76% 97% 137% 160% 240%
Average commission rate I $ .0414
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD SEPTEMBER 10, 1992 (COMMENCEMENT OF SALE OF CLASS T
SHARES) TO NOVEMBER 30, 1992.
F EFFECTIVE DECEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
G THE AMOUNTS SHOWN REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO
TAX DIFFERENCES (SEE NOTE 1 OF NOTES TO FINANCIAL STATEMENTS).
H FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES (SEE NOTE 5 OF
NOTES TO FINANCIAL STATEMENTS).
I FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR SECURITY
TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM PERIOD
TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED IN
VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES MAY
DIFFER.
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
YEARS ENDED NOVEMBER 30,
1996 1995 1994 C 1993 1992
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning $ 40.39 $ 28.90 $ 29.74 $ 26.37 $ 24.28
of period
Income from Investment
Operations
Net investment income .45 B .28 .30 .19 B .17
Net realized and 7.00 11.69 .42 3.78 4.55
unrealized gain (loss)
Total from investment 7.45 11.97 .72 3.97 4.72
operations
Less Distributions
From net investment income (.21) D (.27) (.11) (.10) (.03)
From net realized gain (2.11) D (.16) (1.45) (.50) (2.60)
In excess of net realized - (.05) - - -
gain
Total distributions (2.32) (.48) (1.56) (.60) (2.63)
Net asset value, end of period $ 45.52 $ 40.39 $ 28.90 $ 29.74 $ 26.37
TOTAL RETURN A 19.68% 42.15% 2.46% 15.36% 21.14%
RATIOS AND SUPPLEMENTAL
DATA
Net assets, end of period $ 1,324 $ 791 $ 410 $ 296 $ 179
(in millions)
Ratio of expenses to average .79% .83% .86% .95% .98%
net assets
Ratio of expenses to average .77% .83% .84% .94% .98%
net assets after expense E E E
reductions
Ratio of net investment income 1.11% .92% 1.00% .66% .73%
to average net assets
Portfolio turnover 76% 97% 137% 160% 240%
Average commission rate F $ .0414
</TABLE>
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS).
B NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
C EFFECTIVE DECEMBER 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2,
"DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME,
CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES."
AS A RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN
RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES.
D THE AMOUNTS SHOWN REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO
TAX DIFFERENCES (SEE NOTE 1 OF NOTES TO FINANCIAL STATEMENTS).
E FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES (SEE NOTE 5 OF
NOTES TO FINANCIAL STATEMENTS).
F FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR SECURITY
TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM PERIOD
TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED IN
VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES MAY
DIFFER.
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1996
7. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Equity Growth Fund (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, Class T, and Institutional Class shares, each of
which has equal rights as to assets and voting privileges. Each class has
exclusive voting rights with respect to its distribution plan. The fund
commenced sale of a new Class A of shares on September 3, 1996. On this
date, the original Class A was renamed Class T. Investment income, realized
and unrealized capital gains and losses, the common expenses of the fund,
and certain fund-level expense reductions are allocated on a pro rata basis
to each class based on the relative net assets of each class to the total
net assets of the fund. Each class of shares differs in its respective
distribution, transfer agent, registration, and certain other
class-specific fees, expenses, and expense reductions.
On July 10, 1996, the Board of Trustees approved the creation of an
additional class of Retail shares (Class B). Offering of the new class
commences on December 31, 1996. Class B shares are subject to an annual
distribution and service fee of 1.00% (of which .75% represents a
distribution fee and .25% represents a shareholder service fee) of the
class' average net assets, and a contingent deferred sales charge upon
redemption within six years of purchase which decreases from a maximum of
5% to 1%.
The financial statements have been prepared in conformity with generally
accepted accounting principles which permit management to make certain
estimates and assumptions at the date of the financial statements. The
following summarizes the significant accounting policies of the fund:
SECURITY VALUATION. Securities 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 with remaining maturities
of sixty days or less for which quotations are not readily available are
valued at amortized cost or original cost plus accrued interest, both of
which approximate current value.
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. Income receipts
and expense payments are translated into U.S. dollars at the prevailing
exchange
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
FOREIGN CURRENCY TRANSLATION - CONTINUED
rate on the respective dates of the transactions. Purchases and sales of
securities are translated into U.S. dollars at the contractual currency
exchange rates established at the time of each trade.
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, and the difference between
the amount of net investment income accrued and the U.S. dollar amount
actually received. The effects of changes in foreign currency exchange
rates on investments in securities are included with the net realized and
unrealized gain or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes substantially all of its taxable income for
its fiscal year. The schedule of investments includes information regarding
income taxes under the caption "Income Tax Information."
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. Non-cash dividends included in dividend income, if any,
are recorded at the fair market value of the securities received. 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.
PREPAID EXPENSES. Fidelity Management & Research Company (FMR) bears all
organizational expenses except for registering and qualifying each class
and shares of each class for distribution under federal and state
securities law. These expenses are borne by each class and amortized over
one year.
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 pro rata 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, which may result in distribution
reclassifications, are primarily due to differing treatments for losses
deferred due to wash sales. The fund also utilized earnings and profits
distributed to shareholders on redemption of shares as a part of the
dividends paid deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
and may affect the per-share allocation between net investment income and
realized and unrealized gain (loss). Undistributed net investment income
and accumulated undistributed net realized gain (loss) on investments and
foreign currency transactions 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.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
8. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign securities. Losses may
arise from changes in the value of the foreign currency or if the
counterparties do not perform under the contracts' terms. The U.S. dollar
value of foreign currency contracts is determined using contractual
currency exchange rates established at the time of each trade. The cost of
the foreign currency contracts is included in the cost basis of the
associated investment.
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 for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
Securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are marked-to-market
daily and maintained at a value at least equal to the principal amount of
the repurchase agreement (including accrued interest). FMR, the fund's
investment adviser, is responsible for determining that the value of the
underlying securities remains in accordance with the market value
requirements stated above.
RESTRICTED SECURITIES. The fund is permitted to invest in securities that
are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from registration
or to the public if the securities are registered. Disposal of these
securities may involve time-consuming negotiations and expense, and prompt
sale at an acceptable price may be difficult. At the end of the period, the
fund had no investments in restricted securities (excluding 144A issues).
9. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $3,661,051,000 and $2,431,557,000, respectively.
10. 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 .2500% to .5200% for the period. In the event that these
rates were lower than the contractual rates in effect during the period,
FMR voluntarily implemented the above rates, as they resulted in the same
or a lower management fee. The annual individual fund fee rate is .30%. For
the period, the management fee was equivalent to an annual rate of .61% of
average net assets.
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the 1940
Act, the Trustees have adopted separate distribution plans with respect to
the fund's Class A shares (Class A Plan), Class T shares (Class T Plan),
and Institutional Class shares (collectively referred to as "the Plans").
Under the Class A and Class T Plans, the fund pays Fidelity Distributors
Corporation (FDC), an affiliate of FMR, a distribution and service fee.
This fee is based on annual rates of .25% and .50% (.65% prior to January
1, 1996) of the average net assets of the Class A and Class T shares,
respectively. For the period, the fund paid FDC $1,000 and $14,154,000
under the Class A and Class T Plans, of which $1,000 and $13,898,000 were
paid to securities dealers, banks and other financial institutions for the
distribution of Class A and Class T shares, and providing shareholder
support services.
Under the Plans, FMR or FDC may use its resources to pay administrative and
promotional expenses related to the sale of the fund's Class A, Class T,
and Institutional Class shares. The Plans also authorize payments to third
parties that assist in the sale of the fund's shares or render shareholder
support services.
SALES LOAD. FDC receives a front-end sales charge of up to 5.25% and 3.50%
(4.75% prior to January 1, 1996) for selling Class A and Class T shares of
the fund, respectively.
For the period, FDC received sales charges of $152,000 and $11,846,000 on
sales of Class A and Class T shares of the fund, of which $136,000 and
$9,847,000 were paid to securities dealers, banks, and other financial
institutions.
TRANSFER AGENT FEES. Fidelity Investments Institutional Operations Company
(FIIOC), an affiliate of FMR, is the transfer, dividend disbursing, and
shareholder servicing agent for the fund's Class A and Institutional Class
Shares, while State Street Bank and Trust Company (State Street)
(collectively, with FIIOC, referred to as the Transfer Agents) acts in that
capacity for the fund's Class T shares. The Transfer Agents receive account
fees and asset-based fees that vary according
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
TRANSFER AGENT FEES - CONTINUED
to account size and type of account of the shareholders of the respective
classes of the fund. With respect to the Class T shares, State Street has
delegated certain transfer, dividend disbursing, 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. For the period, the transfer agent fees
were equivalent to annual rates of .29%, .19%, and .14% of the average net
assets of Class A, Class T, and Institutional Class, respectively.
Effective January 1, 1997, FIIOC will replace State Street as the transfer
agent for the fund's Class T shares.
ACCOUNTING FEES. Fidelity Service Co., an affiliate of FMR, maintains the
fund's accounting records. The fee is based on the level of average net
assets for the month plus out-of-pocket expenses.
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 $830,000 for the period.
11. EXPENSE REDUCTIONS.
FMR agreed to reimburse expenses in accordance with a state expense
limitation. FMR retains the ability to be repaid by the fund, or any class
for these expense reductions in the event that expenses fall below the
state limitation prior to the end of the fiscal year. For the period, the
reimbursement reduced the expenses of Class A by $8,000.
FMR has also voluntarily agreed to reimburse certain transfer agent,
distribution and registration expenses for Class A. For the period, the
reimbursement reduced these expenses by $1,000.
FMR has also 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 $496,000 under this arrangement.
In addition, the fund has entered into arrangements with its custodian and
transfer agent whereby interest earned on uninvested cash balances was used
to offset a portion of expenses. During the period, the fund's custodian
fees were reduced by $8,000 under the custodian arrangement, and Class T
and Institutional Class expenses were reduced by $54,000 and $67,000,
respectively, under the transfer agent arrangement.
12. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SHARES DOLLARS
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
AMOUNTS IN THOUSANDS 1996 A 1995 1996 A 1995
CLASS A 100 - $ 4,269 $ -
Shares sold
Shares redeemed (1) - (67) -
Net increase (decrease) 99 - $ 4,202 $ -
CLASS T 45,074 31,684 $ 1,801,024 $ 1,094,983
Shares sold
Reinvestment of distributions 2,864 299 106,705 8,317
Shares redeemed (20,513) (11,136) (824,097) (378,584)
Net increase (decrease) 27,425 20,847 $ 1,083,632 $ 724,716
INSTITUTIONAL CLASS 18,894 11,766 $ 763,651 $ 398,403
Shares sold
Reinvestment of distributions 847 151 31,892 4,231
Shares redeemed (10,250) (6,533) (412,791) (225,545)
Net increase (decrease) 9,491 5,384 $ 382,752 $ 177,089
</TABLE>
B SHARE TRANSACTIONS FOR CLASS A ARE FOR THE PERIOD SEPTEMBER 3, 1996
(COMMENCEMENT OF SALE OF CLASS A SHARES) TO NOVEMBER 30, 1996.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Advisor Series I and the Shareholders of
Fidelity Advisor Equity Growth Fund:
We have audited the accompanying statement of assets and liabilities of
Fidelity Advisor Series I: Fidelity Advisor Equity Growth Fund, including
the schedule of portfolio investments, as of November 30, 1996, and the
related statement of operations for the year then ended, the statement of
changes in net assets for each of the two years in the period then ended
and the financial highlights of Class A, Class T and Institutional Class
for each of the periods indicated therein. These financial statements and
financial highlights are the responsibility of the fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of November 30, 1996 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 Growth Fund as of
November 30, 1996, the results of its operations for the year then ended,
the changes in its net assets for each of the two years in the period then
ended, and the financial highlights of Class A, Class T and Institutional
Class for each of the periods indicated therein, in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
January 10, 1997
DISTRIBUTIONS
The Board of Trustees of Fidelity Advisor Equity Growth Fund -
Institutional Class 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
12/23/96 12/20/96 $0.37 $1.20
1/6/97 1/3/97 $0.00 $0.03
A total of 15% of the dividends distributed during the fiscal year
qualifies for the dividends-received deduction for corporate shareholders.
The fund will notify shareholders in January 1997 of the applicable
percentage for use in preparing 1996 income tax returns.
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.) Inc., London, England
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
William J. Hayes, Vice President
Lawrence Greenberg, Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
Robert H. Morrison, Manager,
Security Transactions
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
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 *
ADVISORY BOARD
William O. McCoy
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
FOCUS FUNDS
Fidelity Advisor Consumer
Industries Fund
Fidelity Advisor Cyclical
Industries Fund
Fidelity Advisor Financial
Services Fund
Fidelity Advisor Health Care Fund
Fidelity Advisor Natural
Resources Fund
Fidelity Advisor Technology Fund
Fidelity Advisor Utilities Growth Fund
GROWTH FUNDS
Fidelity Advisor TechnoQuant(trademark)
Growth Fund
Fidelity Advisor Overseas Fund
Fidelity Advisor Mid Cap Fund
Fidelity Advisor Equity Growth Fund
Fidelity Advisor Growth
Opportunities Fund
Fidelity Advisor Strategic
Opportunities Fund
Fidelity Advisor Large Cap Fund
GROWTH AND INCOME FUNDS
Fidelity Advisor Growth & Income Fund
Fidelity Advisor Equity Income Fund
Fidelity Advisor Balanced Fund
TAXABLE INCOME FUNDS
Fidelity Advisor Emerging Markets Income Fund
Fidelity Advisor High Yield Fund
Fidelity Advisor Strategic Income Fund
Fidelity Advisor Government Investment Fund
Fidelity Advisor Intermediate Bond Fund
Fidelity Advisor Short Fixed-Income Fund
MUNICIPAL FUNDS
Fidelity Advisor High Income
Municipal Fund
Fidelity Advisor Municipal Bond Fund
Fidelity Advisor Intermediate Municipal Income Fund
Fidelity Advisor Short-Intermediate Municipal Income Fund
STATE MUNICIPAL FUNDS
Fidelity Advisor California Municipal Income Fund
Fidelity Advisor New York Municipal Income Fund
MONEY MARKET FUNDS
Daily Money Fund: Money Market Portfolio
Daily Money Fund: U.S. Treasury Portfolio
Daily Tax-Exempt Money Fund
(REGISTERED TRADEMARK)
