SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT (No. 2-84776)
UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
----
Post-Effective Amendment No. 46 [X]
and
REGISTRATION STATEMENT (No. 811-3785)
UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 46 [X]
Fidelity Advisor Series I
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(Exact Name of Registrant as Specified in Charter)
82 Devonshire St., Boston, Massachusetts 02109
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(Address Of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number: 617-563-7000
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Eric D. Roiter, Secretary
82 Devonshire Street
Boston, Massachusetts 02109
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(Name and Address of Agent for Service)
It is proposed that this filing will become effective
( ) immediately upon filing pursuant to paragraph (b).
( ) on ( ) pursuant to paragraph (b).
( ) 60 days after filing pursuant to paragraph (a)(1).
( ) on ( ) pursuant to paragraph (a)(1) of Rule 485.
(X ) 75 days after filing pursuant to paragraph (a)(2).
( ) on ( ) pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
( ) this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE>
Fidelity Advisor Series I:
Fidelity Advisor Dividend Growth Fund
Fidelity Advisor Retirement Growth Fund
Fidelity Advisor Asset Allocation Fund
Class A, Class T, Class B and Class C Prospectus
Cross Reference Sheet
Form N-1A
ITEM NUMBER PROSPECTUS SECTION
- ----------- ------------------
1 ........ Cover Page
2 a ........ Expenses
b, c ........ Contents; Who May Want to Invest
3 a ........ *
b ........ *
c ........ *
d ........ *
4 a i....... Charter
ii...... Investment Principles and Risks; Securities and
Investment Practices
b ........ Investment Principles and Risks; Securities and
Investment Practices
c ........ Who May Want to Invest; Investment Principles and Risks
5 a ........ Charter
b i....... Charter
ii...... Charter; Breakdown of Expenses
iii..... Expenses; Breakdown of Expenses
c ........ Charter
d ........ Charter; Breakdown of Expenses
e ........ Charter; Breakdown of Expenses
f ........ Expenses; Breakdown of Expenses
g i....... Charter
ii...... *
5A ........ *
6 a i....... Charter
ii...... How to Buy Shares; How to Sell Shares; Investor
Services; Transaction Details; Exchange Restrictions
iii..... Charter
b ........ Charter
c ........ Transaction Details; Exchange Restrictions
d ........ Who May Want to Invest
e ........ Cover Page; How to Buy Shares; How to Sell Shares;
Investor Services
f, g ........ Dividends, Capital Gains, and Taxes
h ........ Who May Want to Invest
7 a ........ Cover Page; Charter
b ........ How to Buy Shares; Transaction Details
c ........ Sales Charge Reductions and Waivers
d ........ How to Buy Shares
e ........ Breakdown of Expenses; Transaction Details
f ........ Expenses; Breakdown of Expenses
g ........ Expenses; Transaction Details
8 ........ How to Sell Shares; Investor Services; Transaction
Details; Exchange Restrictions
9 ........ *
- --------------
* Not Applicable
<PAGE>
Fidelity Advisor Series I:
Fidelity Advisor Dividend Growth Fund
Fidelity Advisor Retirement Growth Fund
Fidelity Advisor Asset Allocation Fund
Institutional Class Prospectus
Cross Reference Sheet
Form N-1A
ITEM NUMBER PROSPECTUS SECTION
- ----------- ------------------
1 .........Cover Page
2 a .........Expenses
b, c .........Contents; Who May Want to Invest
3 a .........*
b .........*
c .........*
d .........*
4 a i........Charter
ii.......Investment Principles and Risks; Securities and
Investment Practices
b .........Investment Principles and Risks; Securities and
Investment Practices
c .........Who May Want to Invest; Investment Principles and Risks
5 a .........Charter
b i........Charter
ii.......Charter; Breakdown of Expenses
iii......Expenses; Breakdown of Expenses
c .........Charter
d .........Charter; Breakdown of Expenses
e .........Charter; Breakdown of Expenses
f .........Expenses; Breakdown of Expenses
g i........Charter
ii.......*
5A .........*
6 a i........Charter
ii.......How to Buy Shares; How to Sell Shares; Investor
Services; Transaction Details; Exchange Restrictions
iii......Charter
b .........Charter
c .........Transactions Details; Exchange Restrictions
d .........Who May Want to Invest
e .........Cover Page; How to Buy Shares; How to Sell Shares;
Investor Services
f, g .........Dividends, Capital Gains, and Taxes
h .........Who May Want to Invest
7 a .........Cover Page; Charter
b .........How to Buy Shares; Transaction Details
c .........*
d .........How to Buy Shares
e .........*
f .........Breakdown of Expenses
g .........*
8 .........How to Sell Shares; Investor Services; Transaction
Details; Exchange Restrictions
9 .........*
- --------------
* Not Applicable
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
SUBJECT TO COMPLETION. PRELIMINARY FIDELITY ADVISOR
PROSPECTUS DATED September 30, 1998.
Information contained herein is DOMESTIC EQUITY FUNDS
subject to completion or amendment. A
registration statement relating to
these securities has been filed with CLASS A, CLASS T, CLASS B, AND
the Securities and Exchange Class C
Commission. These securities may not
be sold nor may offers to buy be
accepted prior to the time the
registration statement becomes FIDELITY ADVISOR DIVIDEND GROWTH FUND
effective. This prospectus shall not Fund 714 (Class A), Fund 720 (Class T), Fund 715
constitute an offer to sell or the (Class B), Fund 716 (Class C)
solicitation of an offer to buy nor
shall there be any sale of these FIDELITY ADVISOR RETIREMENT GROWTH FUND
securities in any state in which such Fund 721 (Class A), Fund 725 (Class T), Fund 722
offer, solicitation or sale would be (Class B), Fund 723 (Class C)
unlawful prior to registration or
qualification under the securities FIDELITY ADVISOR ASSET ALLOCATION FUND
laws of any such state. Fund 726 (Class A), Fund 730 (Class T), Fund 727
(Class B), Fund 728 (Class C)
Please read this prospectus before
investing, and keep it on file for
future reference. It contains
important information, including how FUNDS OF FIDELITY ADVISOR SERIES I
each fund invests and the services
available to shareholders.
To learn more about each fund and its
investments, you can obtain a copy of
the Statement of Additional
Information (SAI) dated December 14, PROSPECTUS
1998. The SAI has been filed with the DECEMBER 14, 1998
Securities and Exchange Commission
(SEC) and is available along with
other related materials on the SEC's
Internet Web site (http://www.sec.
gov). The SAI is incorporated herein
by reference (legally forms a part of
the prospectus). For a free copy of
the document, contact Fidelity
Distributors Corporation (FDC), 82
Devonshire Street, Boston, MA 02109,
or your investment professional.
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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.
- --------------------------------------
LIKE ALL MUTUAL FUNDS, THESE
SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION [GRAPHIC - FIDELITY COMPANY LOGO](REGISTERED)
PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION 82 Devonshire Street, Boston, MA 02109
TO THE CONTRARY IS A CRIMINAL OFFENSE.
ACOMNEW-red-1098
1.708831.100
</TABLE>
<PAGE>
CONTENTS
KEY FACTS WHO MAY WANT TO INVEST
EXPENSES Each class's sales charge
(load) and its yearly operating
expenses.
PERFORMANCE
PRIOR PERFORMANCE OF SIMILAR FUNDS
THE FUNDS IN DETAIL CHARTER How each fund is organized.
INVESTMENT PRINCIPLES AND RISKS Each
fund's overall approach to investing.
BREAKDOWN OF EXPENSES How operating
costs are calculated and what they
include.
YOUR ACCOUNT TYPES OF ACCOUNTS Different ways to
set up your account, including tax-
advantaged retirement plans.
HOW TO BUY SHARES Opening an account
and making additional investments.
HOW TO SELL SHARES Taking money out
and closing your account.
INVESTOR SERVICES Services to help
you manage your account.
SHAREHOLDER AND ACCOUNT POLICIES DIVIDENDS, CAPITAL GAINS, AND TAXES
TRANSACTION DETAILS Share price
calculations and the timing of
purchases and redemptions.
EXCHANGE RESTRICTIONS
SALES CHARGE REDUCTIONS AND WAIVERS
APPENDIX
2
<PAGE>
KEY FACTS
WHO MAY WANT TO INVEST
Class A, Class T, Class B, and Class C shares are offered to investors who
engage an investment professional for investment advice.
Dividend Growth and Retirement Growth may be appropriate for investors who are
willing to ride out stock market fluctuations in pursuit of potentially high
long-term returns. Dividend Growth is designed for those who consider dividends
to be an indication of a company's growth potential. It is important to note
that Dividend Growth does not invest for income. Retirement Growth is designed
for non-profit organizations and investors in tax-qualified retirement plans and
does not consider the effect of taxes when it buys and sells securities.
Asset Allocation may be appropriate for investors who want to diversify among
stocks, bonds, short-term and money market instruments, and other types of
securities in one fund. If you are looking for a fund that can invest in a wide
range of security types within defined ranges in pursuit of total return, Asset
Allocation may be appropriate for you.
The value of each fund's investments and, as applicable, the income they
generate vary from day to day, generally reflecting changes in market
conditions, interest rates, and other company, political, and economic news. In
the short term, stock prices can fluctuate dramatically in response to these
factors. Over time, however, stocks have shown greater growth potential than
other types of securities. Investments in foreign securities may involve risks
in addition to those of U.S. investments, including increased political and
economic risk, as well as exposure to currency fluctuations. For Asset
Allocation, performance also depends on FMR's skill in allocating assets.
Each fund is not in itself a balanced investment plan. You should consider your
investment objective and tolerance for risk when making an investment decision.
When you sell your fund shares, they may be worth more or less than what you
paid for them.
Each fund is composed of multiple classes of shares. All classes of a fund have
a common investment objective and investment portfolio. Class A and Class T
shares have a front-end sales charge and pay a 12b-1 fee. Class A and Class T
shares may be subject to a contingent deferred sales charge (CDSC). Class B and
Class C shares do not have a front-end sales charge, but do have a CDSC, and pay
a 12b-1 fee. Institutional Class shares have no sales charge and do not pay a
12b-1 fee, but are available only to certain types of investors. See "Sales
Charge Reductions and Waivers," page __, for Institutional Class eligibility
information. You may obtain more information about Institutional Class shares,
which are not offered through this prospectus, by calling 1-800-522-7297 if you
are investing through a broker-dealer or insurance representative, or
1-800-843-3001 if you are investing through a bank representative, or from your
investment professional.
The performance of one class of shares of a fund may be different from the
performance of another class of shares of the same fund because of different
sales charges and class expenses. Contact your investment professional to
discuss which class is appropriate for you.
In determining which class of shares is appropriate for you, you should
consider, among other factors, the amount you plan to invest, the length of time
you intend to hold your shares, your eligibility for a sales charge waiver or
reduction, and the package of services provided to you by your investment
professional and the overall costs of those services. In general, Class A shares
have higher costs than Class T shares over a short holding period because Class
A shares have a higher front-end sales charge, and Class A shares have lower
costs than Class T shares over a longer holding period because Class A shares
have lower 12b-1 fees. If you are planning to invest a significant amount either
at one time or through a regular investment program, you should consider the
reduced front-end sales charges available on Class A and Class T shares. If you
are eligible for a front-end sales charge waiver on a purchase of both Class A
and Class T shares, Class A shares generally will have lower costs than Class T
shares because Class A shares have lower 12b-1 fees. However, you should
evaluate the overall costs of purchasing Class A shares or Class T shares in the
context of the package of services provided to you by your investment
professional. See "Transaction Details," page __, and "Sales Charge Reductions
and Waivers," page__, for sales charge reduction and waiver information.
3
<PAGE>
If you prefer not to pay a front-end sales charge, you should consider Class B
or Class C shares. While Class B and Class C shares are subject to higher
ongoing costs than Class A or Class T shares, in general because of their higher
12b-1 fees, Class B and Class C shares are sold with a CDSC instead of a
front-end sales charge so your entire purchase amount is immediately invested.
In general, Class B shares have higher costs than Class C shares over a short
holding period because Class B shares have a higher CDSC that declines over a
maximum of six years, and Class B shares have lower costs than Class C shares
over a longer period because Class B shares convert to Class A shares after a
3A
<PAGE>
maximum of seven years. Please note that purchase amounts of more than $250,000
will not be accepted for Class B shares, that purchase amounts of more than
$1,000,000 generally will not be accepted for Class C shares, and that Class A
or Class T shares may have lower costs for investments that qualify for a
front-end sales charge reduction or waiver. See "How to Buy Shares," page __,
for more information on the maximum purchase amount for Class C shares. If you
sell your Class B shares within six years, you will normally pay a CDSC that
varies depending on how long you have held your shares. If you sell your Class C
shares within one year, you will normally pay a 1.00% CDSC. See "Transaction
Details," page __, for CDSC schedules and related information. Class B shares
will automatically convert to Class A shares after a holding period of seven
years. Class C shares do not convert to another class of shares. See
"Transaction Details," page __, for conversion information.
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you may pay when you buy or sell
shares of a fund. In addition, you may be charged an annual account maintenance
fee if your account balance falls below $2,500. Lower front-end sales charges
may be available with purchases of $50,000 or more. See "Transaction Details,"
page __, for an explanation of how and when these charges apply.
A CDSC is imposed on Class B shares only if you redeem Class B shares within six
years of purchase. A CDSC is imposed on Class C shares only if you redeem Class
C shares within one year of purchase. See "Transaction Details," page ___, for
information about the CDSC.
Class A Class T Class B Class C
Maximum sales charge on
purchases (as a % of
offering price) 5.75% 3.50% None None
Maximum CDSC (as a % of the
lesser of original purchase price or
redemption proceeds) None[A] None[A] 5.00%[B] 1.00%[C]
Sales charge on None None None None
reinvested distributions
Annual account maintenance fee $12.00 $12.00 $12.00 $12.00
(for accounts under $2,500)
[A] A CONTINGENT DEFERRED SALES CHARGE OF 0.25% IS ASSESSED ON CERTAIN
REDEMPTIONS OF CLASS A AND CLASS T SHARES ON WHICH A FINDER'S FEE WAS PAID. SEE
"TRANSACTION DETAILS," PAGE __.
[B] DECLINES OVER 6 YEARS FROM 5.00% TO 0%.
[C] ON CLASS C SHARES REDEEMED WITHIN 1 YEAR OF PURCHASE.
ANNUAL OPERATING EXPENSES are paid out of each fund's assets. Each fund pays a
management fee to Fidelity Management & Research Company (FMR). Each fund also
incurs other expenses for services such as maintaining shareholder records and
furnishing shareholder statements and financial reports.
4
<PAGE>
12b-1 fees for Class A, Class T, Class B, and Class C include a distribution fee
and, for Class B and Class C, a shareholder service fee. Distribution fees are
paid by each class to FDC for services and expenses in connection with the
distribution of the applicable class's shares. Shareholder service fees are paid
by Class B and Class C of the funds to FDC for services and expenses incurred in
connection with providing personal service to and/or maintenance of Class B and
Class C shareholder accounts. Long-term shareholders may pay more than the
economic equivalent of the maximum sales charges permitted by the National
Association of Securities Dealers, Inc., due to 12b-1 fees.
Each class's expenses are factored into its share price or dividends and are not
charged directly to shareholder accounts (see "Breakdown of Expenses" on page
__.)
The following figures are based on estimated expenses of Class A, Class T, Class
B, and Class C of each fund and are calculated as a percentage of average net
assets of Class A, Class T, Class B, and Class C of each fund.
DIVIDEND GROWTH
Class A Class T Class B Class C
Management fee 0.59%[A] 0.59%[A] 0.59%[A] 0.59%[A]
12b-1 fee (including 0.25% 0.50% 1.00% 1.00%
0.25% Shareholder
Service fee for Class B and
Class C shares)
Other expenses 0.47%[A] 0.44%[A] 0.45%[A] 0.44%[A]
--------- --------- --------- ---------
Total operating expenses 1.31% 1.53% 2.04% 2.03%
[A] BASED ON ESTIMATED EXPENSES FOR THE FIRST YEAR.
4A
<PAGE>
RETIREMENT GROWTH
Class A Class T Class B Class C
Management fee 0.59%[A] 0.59%[A] 0.59%[A] 0.59%[A]
12b-1 fee (including 0.25% 0.50% 1.00% 1.00%
0.25% Shareholder
Service fee for Class B
and Class C shares)
Other expenses 0.51%[A] 0.48%[A] 0.50%[A] 0.48%[A]
------------------------------------------
Total operating expenses 1.35% 1.57% 2.09% 2.07%
[A] BASED ON ESTIMATED EXPENSES FOR THE FIRST YEAR.
ASSET ALLOCATION
Class A Class T Class B Class C
Management fee 0.59%[A] 0.59%[A] 0.59%[A] 0.59%[A]
12b-1 fee (including 0.25% 0.50% 1.00% 1.00%
0.25% Shareholder
Service fee for Class B
and Class C shares)
Other expenses (after 0.91%[A] 0.91%[A] 0.91%[A] 0.91%[A]
reimbursement)
------------------------------------------
Total operating expenses 1.75% 2.00% 2.50% 2.50%
[A] BASED ON ESTIMATED EXPENSES FOR THE FIRST YEAR.
EXPENSE TABLE EXAMPLE: You would pay the following amount in total expenses on a
$1,000 investment, assuming a 5% annual return and either (1) full redemption or
(2) no redemption at the end of each time period. Total expenses shown below
include your shareholder transaction expenses, such as the maximum front-end
sales charge or CDSC, as applicable, and a class's annual operating expenses.
DIVIDEND GROWTH
1 Year 3 Years
(1) (2) (1) (2)
Class A $70 $70 $97 $97
Class T $50 $50 $81 $81
Class B $71[A] $21 $94[A] $64
Class C $31[A] $21 $64 $64
[A] REFLECTS DEDUCTION OF APPLICABLE CDSC.
5
<PAGE>
RETIREMENT GROWTH
1 Year 3 Years
(1) (2) (1) (2)
Class A $70 $70 $98 $98
Class T $50 $50 $83 $83
Class B $71[A] $21 $95[A] $65
Class C $31[A] $21 $65 $65
[A] REFLECTS DEDUCTION OF APPLICABLE CDSC.
ASSET ALLOCATION
1 Year 3 Years
(1) (2) (1) (2)
Class A $74 $74 $109 $109
Class T $55 $55 $96 $96
Class B $75[A] $25 $108[A] $78
Class C $35[A] $25 $78 $78
[A] REFLECTS DEDUCTION OF APPLICABLE CDSC.
THESE EXAMPLES ILLUSTRATE THE EFFECT OF EXPENSES, BUT ARE NOT MEANT TO SUGGEST
ACTUAL OR EXPECTED EXPENSES OR RETURNS, ALL OF WHICH MAY VARY.
5A
<PAGE>
FMR has voluntarily agreed to reimburse Class A, Class T, Class B, and Class C
of each fund to the extent that total operating expenses (excluding interest,
taxes, brokerage commissions and extraordinary expenses), as a percentage of
their respective average net assets, exceed the following rates:
<TABLE>
<CAPTION>
Class A Effective Class T Effective Class B Effective Class C Effective
Date Date Date Date
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Dividend
Growth 1.75% 12/14/98 2.00% 12/14/98 2.50% 12/14/98 2.50% 12/14/98
Retirement
Growth 1.75% 12/14/98 2.00% 12/14/98 2.50% 12/14/98 2.50% 12/14/98
Asset
Allocation 1.75% 12/14/98 2.00% 12/14/98 2.50% 12/14/98 2.50% 12/14/98
</TABLE>
If these agreements were not in effect, other expenses and total operating
expenses, as a percentage of average net assets, would be expected to be the
following amounts:
<TABLE>
<CAPTION>
Other Expenses [A] Total Operating Expenses [A]
Class A Class T Class B Class C Class A Class T Class B Class C
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Dividend + + + + + + + +
Growth
Retirement + + + + + + + +
Growth
Asset Allocation 1.25% 1.22% 1.24% 1.22% 2.09% 2.31% 2.83% 2.81%
</TABLE>
[A] BASED ON ESTIMATED EXPENSES FOR THE FIRST YEAR.
+ TOTAL OPERATING EXPENSES ARE EXPECTED TO BE LESS THAN THE VOLUNTARY EXPENSE
CAPS IN EFFECT DURING THE FISCAL YEAR ENDING NOVEMBER 30, 1999.
6
<PAGE>
PERFORMANCE
Mutual fund performance is commonly measured as TOTAL RETURN and/or YIELD.
Performance history will be available for each fund after the funds have been in
operation for six months.
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment over a given period,
assuming reinvestment of any dividends and capital gains. A CUMULATIVE TOTAL
RETURN reflects actual performance over a stated period of time. An AVERAGE
ANNUAL TOTAL RETURN is a hypothetical rate of return that, if achieved annually,
would have produced the same cumulative total return if performance had been
constant over the entire period. Average annual total returns smooth out
variations in performance; they are not the same as actual year-by-year results.
Average annual total returns covering periods of less than one year assume that
performance will remain constant for the rest of the year.
Average annual and cumulative total returns usually will include the effect of
paying the maximum applicable sales charge.
YIELD refers to the income generated by an investment in a fund over a given
period of time, expressed as an annual percentage rate. Yields are calculated
according to a standard that is required for all stock and bond funds. Because
this differs from other accounting methods, the quoted yield may not equal the
income actually paid to shareholders.
Other illustrations of fund performance may show moving averages over specified
periods.
The funds' recent strategies, performance, and holdings are detailed twice a
year in financial reports, which are sent to all shareholders.
7
<PAGE>
PRIOR PERFORMANCE OF SIMILAR FUNDS
Because the funds were new when this prospectus was printed, they have no
previous operating history. However, Dividend Growth, Retirement Growth, and
Asset Allocation are modeled after the following existing funds, respectively:
Fidelity Dividend Growth Fund, Fidelity Retirement Growth Fund, and Fidelity
Asset Manager: Growth Fund (Related Funds). The Related Funds are managed by FMR
and have investment objectives, policies, and strategies that are substantially
similar to the corresponding funds offered through this prospectus. The Related
Funds, however, have different expenses and are sold through different
distribution channels.
Below you will find information about the prior performance of the Related
Funds, not the performance of the funds offered through this prospectus. The
performance data of the Related Funds is net of advisory fees and other
expenses.
Although the funds have substantially similar investment objectives, policies,
and strategies as the corresponding Related Funds, you should not assume that
the funds offered through this prospectus will have the same performance as the
Related Funds. For example, a fund's future performance may be greater or less
than the performance of the corresponding Related Fund due to, among other
things, differences in sales charges, expenses, asset sizes and cash flows
between the fund and the corresponding Related Fund. Class A, T, B, and C shares
have higher sales charges and may have higher total expenses than the
corresponding Related Funds. Certain investors may be eligible for sales load
waivers. Please see page __.
Mutual fund performance is commonly measured as TOTAL RETURN. The total returns
that follow are based on historical results of the Related Funds and do not
reflect the effect of taxes.
The first table below sets forth the corresponding Related Fund of Dividend
Growth, Retirement Growth and Asset Allocation, the date FMR began managing each
Related Fund, and the asset size of each Related Fund as of August 31, 1998. The
next table shows each Related Fund's performance over past periods. The charts
in the Appendix beginning on page __, present calendar year performance for the
Related Funds compared to different measures, including a competitive funds
average.
FUNDS OFFERED THROUGH THIS CORRESPONDING RELATED FUND
PROSPECTUS (INCEPTION DATE AND ASSET SIZE)
Fidelity Advisor Dividend Growth Fund Fidelity Dividend Growth Fund
(April 27, 1993) $ 6,162,431,000
Fidelity Advisor Retirement Growth Fund Fidelity Retirement Growth Fund
(March 25, 1983) $3,549,382,000
Fidelity Advisor Asset Allocation Fund Fidelity Asset Manager: Growth Fund
(December 30, 1991) $ 4,497,340,000
7A
<PAGE>
<TABLE>
<CAPTION>
...................................................................................................................................
CORRESPONDING RELATED FUNDS [A]
Average Annual Total Return* Cumulative Total Return*
10 years/ 10 years/
Past 1 year Past 5 years Life of fund+ Past 1 year Past 5 years Life of fund+
<S> <C> <C> <C> <C> <C> <C>
Fidelity Dividend Growth 34.59% 26.88% 27.50% 34.59% 228.81% 251.83%
Fund#
Fidelity Retirement 29.29% 17.36% 16.12% 29.29% 122.66% 345.69%
Growth Fund#
Fidelity Asset Manager: 23.00% 15.84% 17.00% 23.00% 108.57% 177.57%
Growth Fund#
</TABLE>
* All figures are for periods ending at the most recent calendar quarter
end of the Related Funds (June 30, 1998).
+ Life of fund figures are from commencement of operations for Fidelity
Dividend Growth Fund (April 27, 1993) and Fidelity Asset Manager:
Growth Fund (December 30, 1991) through June 30, 1998.
# For the fiscal year ended July 31, 1998, the total operating expenses
were 0.86% for Fidelity Dividend Growth Fund (including expense
reductions). For the semi-annual period ended April 30, 1998, the total
annualized operating expenses were 0.59% for Fidelity Retirement Growth
Fund (including expense reductions). For the semi-annual period ended
March 31, 1998, the total annualized operating expenses were 0.84% for
Fidelity Asset Manager: Growth Fund (including expense reductions). If
FMR had not reimbursed certain expenses during these periods, Fidelity
Asset Manager: Growth Fund's total returns would have been lower.
[A] The funds offered through this prospectus assess a 12b-1 fee and may
sell their shares with a front-end sales load or contingent deferred
sales charge, while the Related Funds do not. Certain investors may be
eligible for sale load waivers. Please see page __. The inclusion of
any applicable sales charge and/or 12b-1 fee in a performance
calculation produces a lower return.
7B
<PAGE>
THE FUNDS IN DETAIL
CHARTER
EACH FUND IS A MUTUAL FUND: an investment that pools shareholders' money and
invests it toward a specified goal. Each fund is a diversified fund of Fidelity
Advisor Series I, an open-end management investment company organized as a
Massachusetts business trust on June 24, 1983.
EACH FUND IS GOVERNED BY A BOARD OF TRUSTEES which is responsible for protecting
the interests of shareholders. The trustees are experienced executives who meet
periodically throughout the year to oversee the funds' activities, review
contractual arrangements with companies that provide services to the funds, and
review the funds' performance. The trustees serve as trustees for other Fidelity
funds. The majority of trustees are not otherwise affiliated with Fidelity.
THE FUNDS MAY HOLD SPECIAL SHAREHOLDER MEETINGS AND MAIL PROXY MATERIALS. These
meetings may be called to elect or remove trustees, change fundamental policies,
approve a management contract, or for other purposes. Shareholders not attending
these meetings are encouraged to vote by proxy. The transfer agent will mail
proxy materials in advance, including a voting card and information about the
proposals to be voted on. The number of votes you are entitled to is based upon
the dollar value of your investment.
Separate votes are taken by each class of shares, fund, or trust, if a matter
affects just that class of shares, fund, or trust, respectively.
FMR AND ITS AFFILIATES
Fidelity Investments(REGISTERED TRADEMARK) is one of the largest investment
management organizations in the United States and has its principal business
address at 82 Devonshire Street, Boston, Massachusetts 02109. It includes a
number of different subsidiaries and divisions which provide a variety of
financial services and products. The funds employ various Fidelity companies to
perform activities required for their operation.
The funds are managed by FMR, which chooses the funds' investments and handles
their business affairs.
Affiliates assist FMR with foreign investments:
o Fidelity Management & Research (U.K.) Inc. (FMR U.K.), in London, England,
serves as a sub-adviser for each fund.
o Fidelity Management & Research Far East Inc. (FMR Far East), in Tokyo, Japan,
serves as a sub-adviser for each fund.
Beginning January 1, 1999, Fidelity Investments Money Management, Inc. (FIMM),
located in Merrimack, New Hampshire, will select certain types of investments
for Asset Allocation.
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As of August 31, 1998, FMR advised funds having approximately 38 million
shareholder accounts with a total value of more than $546 billion.
Charles Mangum is Vice President and manager of Advisor Dividend Growth, which
he has managed since December 1998. He also manages other Fidelity funds. Since
joining Fidelity in 1990, Mr. Mangum has worked as an analyst and manager.
J. Fergus Shiel is Vice President and manager of Advisor Retirement Growth,
which he has managed since December 1998. He also manages other Fidelity funds.
Since joining Fidelity in 1989, Mr. Shiel has worked as an analyst, portfolio
assistant and manager.
Dick Habermann is Vice President and lead manager of Advisor Asset Allocation,
which he has managed since December 1998. He also manages other Fidelity funds.
Mr. Habermann is a Senior Vice President of FMR Co. Previously, he was Division
Head for International Equities and Director of International Research from 1993
to 1996, and Joint Chief Strategist for Portfolio Advisory Services(SERVICEMARK)
from 1996 to 1997. Mr. Habermann joined Fidelity in 1968.
Fidelity investment personnel may invest in securities for their own accounts
pursuant to a code of ethics that establishes procedures for personal investing
and restricts certain transactions.
Fidelity Distributors Corporation (FDC) distributes and markets Fidelity's funds
and services.
Fidelity Investments Institutional Operations Company, Inc. (FIIOC) performs
transfer agent servicing functions for each class of each fund.
FMR Corp. is the ultimate parent company of FMR, FIMM, FMR U.K, and FMR Far
East. Members of the Edward C. Johnson 3d family are the predominant owners of a
class of shares of common stock representing approximately 49% of the voting
power of FMR Corp. Under the Investment Company Act of 1940 (the 1940 Act),
control of a company is presumed where one individual or group of individuals
owns more than 25% of the voting stock of that company; therefore, the Johnson
family may be deemed under the 1940 Act to form a controlling group with respect
to FMR Corp.
FMR may allocate brokerage transactions to its broker-dealer affiliates and in a
manner that takes into account the sale of shares of Fidelity Advisor Funds
(SERVICEMARK), provided that the fund receives brokerage services and commission
rates comparable to those of other broker-dealers.
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INVESTMENT PRINCIPLES AND RISKS
The value of the funds' investments varies in response to many factors. Stock
values fluctuate in response to the activities of individual companies and
general market and economic conditions. The value of bonds and short-term
instruments fluctuates based on changes in interest rates and in the credit
quality of the issuer. Investments in foreign securities may involve risks in
addition to those of U.S. investments, including increased political and
economic risk, as well as exposure to currency fluctuations.
FMR may use various investment techniques to hedge a portion of a fund's risks,
but there is no guarantee that these strategies will work as FMR intends. As a
mutual fund, each fund seeks to spread investment risk by diversifying its
holdings among many companies and industries. When you sell your shares of a
fund, they may be worth more or less than what you paid for them.
FMR normally invests each fund's assets according to its investment strategy.
Each fund also reserves the right to invest without limitation in preferred
stocks and investment-grade debt instruments for temporary, defensive purposes.
DIVIDEND GROWTH seeks capital appreciation by investing primarily in companies
that FMR believes have the potential for dividend growth by either increasing
their dividends or commencing dividends, if none are currently paid. FMR
normally invests at least 65% of the fund's total assets in equity securities of
these companies.
The fund's strategy is based on the premise that dividends are an indication of
a company's financial health and companies that are commencing or increasing
their dividends have an enhanced potential for capital growth. Although the fund
uses income to evaluate its investments, it is important to recognize that the
fund does not invest for income.
RETIREMENT GROWTH seeks capital appreciation by investing substantially in
common stocks, although it may invest in other types of instruments as well. FMR
considers economic, financial, and security trends when choosing the types of
securities the fund will buy. In pursuit of its goal, the fund has the
flexibility to invest in large or small domestic or foreign companies.
The fund may buy securities that provide income. However, it does not place any
emphasis on the income, except when FMR believes this income will have a
favorable influence on the securities' market value. Because the fund is
designed for those in tax-qualified retirement plans and non-profit
organizations, it may realize capital gains without regard to shareholders'
current tax liability.
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ASSET ALLOCATION seeks to maximize total return over the long term by allocating
its assets among stocks, bonds, short-term and money-market instruments, and
other instruments of U.S. and foreign issuers.
The fund allocates its assets among the following classes, or types, of
investments. The STOCK CLASS includes equity securities of all types. The BOND
CLASS includes all varieties of fixed-income securities maturing in more than
one year. The SHORT-TERM/MONEY MARKET CLASS includes all types of short-term and
money market instruments. FMR may use its judgment to place a security in the
most appropriate class based on its investment characteristics. Fixed-income
securities may be classified in the bond or short-term/money market class
according to interest rate sensitivity as well as maturity. The fund may also
make other investments that do not fall within these classes.
FMR has the ability to allocate the fund's assets within specified ranges. The
fund's NEUTRAL MIX represents the benchmark for its combination of investments
in each asset class over time. FMR may change the neutral mix from time to time.
The range and approximate neutral mix for each asset class are shown below:
RANGE NEUTRAL MIX
----- -----------
STOCK CLASS 50-100% 70%
BOND CLASS 0-50% 25%
SHORT-TERM/MONEY MARKET CLASS 0-50% 5%
The fund's aggressive approach focuses on stocks for high potential returns.
However, because the fund can invest in bonds and short-term and money market
instruments, its return may not be as high as a fund that invests only in
stocks.
In pursuit of the fund's objective, FMR will not try to pinpoint the precise
moment when a major reallocation should be made. Instead, FMR regularly reviews
the fund's allocations and makes changes gradually to favor investments that it
believes will provide the most favorable outlook for achieving the fund's
objective. Under normal circumstances, a single reallocation will not involve
more than 20% of the fund's total assets. Although FMR uses its expertise and
resources in allocating assets, FMR's decisions may not be advantageous to the
fund.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of instruments
in which a fund may invest, strategies FMR may employ in pursuit of a fund's
investment objective, and a summary of related risks. Any restrictions listed
supplement those discussed earlier in this section. A complete listing of each
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fund's limitations and more detailed information about each fund's investments
are contained in the funds' SAI. Policies and limitations are considered at the
time of purchase; the sale of instruments is not required in the event of a
subsequent change in circumstances.
FMR may not buy all of these instruments or use all of these techniques unless
it believes that they are consistent with a fund's investment objective and
policies and that doing so will help the fund achieve its goal. Fund holdings
and recent investment strategies are detailed in each fund's financial reports,
which are sent to shareholders twice a year. For a free SAI or financial report,
call your investment professional.
EQUITY SECURITIES may include common stocks and warrants. Common stocks, the
most familiar type, represent an equity (ownership) interest in a corporation.
Although equity securities have a history of long-term growth in value, their
prices fluctuate based on changes in a company's financial condition and on
overall market and economic conditions. Smaller companies are especially
sensitive to these factors.
RESTRICTIONS: With respect to 75% of its total assets, each fund may not invest
in more than 10% of the outstanding voting securities of a single issuer. This
limitation does not apply to securities of other investment companies.
DEBT SECURITIES. Bonds and other debt instruments are used by issuers to borrow
money from investors. The issuer generally pays the investor a fixed, variable,
or floating rate of interest, and must repay the amount borrowed at maturity.
Some debt securities, such as zero coupon bonds, do not pay current interest,
but are sold at a discount from their face values.
Debt securities have varying levels of sensitivity to changes in interest rates
and varying degrees of credit quality. In general, bond prices rise when
interest rates fall, and fall when interest rates rise. Longer-term bonds and
zero coupon bonds are generally more sensitive to interest rate changes.
Lower-quality debt securities are considered to have speculative
characteristics, and involve greater risk of default or price changes due to
changes in the issuer's creditworthiness, or they may already be in default. The
market prices of these securities may fluctuate more than higher-quality
securities and may decline significantly in periods of general or regional
economic difficulty.
RESTRICTIONS: For Dividend Growth and Retirement Growth, purchase of a debt
security is consistent with a fund's debt quality policy if it is rated at or
above the stated level by Moody's Investors Service (Moody's) or rated in the
equivalent categories by Standard & Poor's (S&P), or is unrated but judged to be
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of equivalent quality by FMR. Dividend Growth currently intends to limit its
investments in lower than Baa-quality debt securities (sometimes called "junk
bonds") to less than 35% of its assets. Retirement Growth currently intends to
limit its investments in lower than Baa-quality debt securities to 5% of its
assets.
For Asset Allocation, purchase of a debt security is consistent with the fund's
debt quality policy if it is rated at or above the stated level by Moody's, S&P,
Duff & Phelps Credit Rating Co., or Fitch IBCA, Inc., or is unrated but judged
to be of equivalent quality by FMR. Asset Allocation currently intends to limit
its investments in lower than Baa-quality debt securities to less than 35% of
its assets.
DEBT RATINGS
MOODY'S
INVESTORS STANDARD &
SERVICE POOR'S
RATING RATING
INVESTMENT GRADE
Highest quality Aaa AAA
High quality Aa AA
Upper-medium grade A A
Medium grade Baa BBB
LOWER QUALITY
Moderately speculative Ba BB
Speculative B B
Highly speculative Caa CCC
Poor quality Ca CC
Lowest quality, no interest C C
In default, in arrears - D
REFER TO THE FUNDS' SAI FOR A MORE COMPLETE DISCUSSION OF THESE RATINGS.
EACH FUND DOES NOT NECESSARILY RELY ON THE RATINGS OF MOODY'S OR S&P TO
DETERMINE COMPLIANCE WITH ITS DEBT QUALITY POLICY.
MONEY MARKET SECURITIES are high-quality, short-term instruments issued by the
U.S. Government, corporations, financial institutions, and other entities. These
securities may carry fixed, variable, or floating interest rates.
EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies, and
securities issued by U.S. entities with substantial foreign operations may
involve additional risks and considerations. These include risks relating to
political, economic, or regulatory conditions in foreign countries; fluctuations
in foreign currencies; withholding or other taxes; trading, settlement,
custodial, and other operational risks; and the potentially less stringent
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investor protection and disclosure standards of foreign markets. Additionally,
governmental issuers of foreign debt securities may be unwilling to pay interest
and repay principal when due and may require that the conditions for payment be
renegotiated. All of these factors can make foreign investments, especially
those in emerging markets, more volatile and potentially less liquid than U.S.
investments.
ASSET-BACKED SECURITIES include interests in pools of debt securities,
commercial or consumer loans, or other receivables. The value of these
securities depends on many factors, including changes in interest rates, the
availability of information concerning the pool and its structure, the credit
quality of the underlying assets, the market's perception of the servicer of the
pool, and any credit enhancement provided. In addition, these securities may be
subject to prepayment risk.
MORTGAGE SECURITIES include interests in pools of commercial or residential
mortgages, and may include complex instruments such as collateralized mortgage
obligations and stripped mortgage-backed securities. Mortgage securities may be
issued by agencies or instrumentalities of the U.S. Government or by private
entities.
The price of a mortgage security may be significantly affected by changes in
interest rates. Some mortgage securities may have a structure that makes their
reaction to interest rates and other factors difficult to predict, making their
price highly volatile. Also, mortgage securities, especially stripped
mortgage-backed securities, are subject to prepayment risk. Securities subject
to prepayment risk generally offer less potential for gains during a declining
interest rate environment, and similar or greater potential for loss in a rising
interest rate environment.
STRIPPED SECURITIES are the separate income or principal components of a debt
security. The risks associated with stripped securities are similar to those of
other debt securities, although stripped securities may be more volatile, and
the value of certain types of stripped securities may move in the same direction
as interest rates. U.S. Treasury securities that have been stripped by a Federal
Reserve Bank are obligations issued by the U.S. Treasury.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund buys a security at one
price and simultaneously agrees to sell it back at a higher price. Delays or
losses could result if the other party to the agreement defaults or becomes
insolvent.
ADJUSTING INVESTMENT EXPOSURE. A fund can use various techniques to increase or
decrease its exposure to changing security prices, interest rates, currency
exchange rates, commodity prices, or other factors that affect security values.
These techniques may involve derivative transactions such as buying and selling
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options and futures contracts, entering into currency exchange contracts or swap
agreements, purchasing indexed securities, and selling securities short.
FMR can use these practices to adjust the risk and return characteristics of a
fund's portfolio of investments. If FMR judges market conditions incorrectly or
employs a strategy that does not correlate well with a fund's investments, these
techniques could result in a loss, regardless of whether the intent was to
reduce risk or increase return. These techniques may increase the volatility of
a fund and may involve a small investment of cash relative to the magnitude of
the risk assumed. In addition, these techniques could result in a loss if the
counterparty to the transaction does not perform as promised.
DIRECT DEBT. Loans and other direct debt instruments are interests in amounts
owed to another party by a company, government, or other borrower. They have
additional risks beyond conventional debt securities because they may entail
less legal protection for a fund, or there may be a requirement that the fund
supply additional cash to a borrower on demand.
ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined by FMR,
under the supervision of the Board of Trustees, to be illiquid, which means that
they may be difficult to sell promptly at an acceptable price. The sale of some
illiquid securities, and some other securities, may be subject to legal
restrictions. Difficulty in selling securities may result in a loss or may be
costly to a fund.
RESTRICTIONS: A fund may not invest more than 10% of its assets in illiquid
securities.
WHEN-ISSUED AND FORWARD PURCHASE OR SALE TRANSACTIONS are trading practices in
which payment and delivery for the security take place at a later date than is
customary for that type of security. The market value of the security could
change during this period.
OTHER INSTRUMENTS may include securities of closed-end investment companies,
convertible securities, preferred stocks, and real estate-related instruments.
CASH MANAGEMENT. A fund may invest in money market securities, in repurchase
agreements, and in a money market fund available only to funds and accounts
managed by FMR or its affiliates, whose goal is to seek a high level of current
income while maintaining a stable $1.00 share price. A major change in interest
rates or a default on the money market fund's investments could cause its share
price to change.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce the risks
of investing. This may include limiting the amount of money invested in any one
issuer or, on a broader scale, in any one industry. Economic, business, or
political changes can affect all securities of a similar type.
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RESTRICTIONS: With respect to 75% of its total assets, each fund may not invest
more than 5% in the securities of any one issuer. This limitation does not apply
to U.S. Government securities or to securities of other investment companies.
Each fund may not invest more than 25% of its total assets in any one industry.
This limitation does not apply to U.S. Government securities.
BORROWING. Each fund may borrow from banks or from other funds advised by FMR or
its affiliates, or through reverse repurchase agreements. If a fund borrows
money, its share price may be subject to greater fluctuation until the borrowing
is paid off. If a fund makes additional investments while borrowings are
outstanding, this may be considered a form of leverage.
RESTRICTIONS: Each fund may borrow only for temporary or emergency purposes, but
not in an amount exceeding 33 1/3% of its total assets.
LENDING securities to broker-dealers and institutions, including Fidelity
Brokerage Services, Inc. (FBSI), an affiliate of FMR, is a means of earning
income. This practice could result in a loss or a delay in recovering a fund's
securities. A fund may also lend money to other funds advised by FMR or its
affiliates.
RESTRICTIONS: Loans, in the aggregate, may not exceed 33 1/3% of a fund's total
assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages are
fundamental, that is, subject to change only by shareholder approval. The
following paragraphs restate all those that are fundamental. All policies stated
throughout this prospectus, other than those identified in the following
paragraphs, can be changed without shareholder approval.
DIVIDEND GROWTH seeks capital appreciation.
RETIREMENT GROWTH seeks capital appreciation.
ASSET ALLOCATION seeks to maximize total return over the long term by allocating
its assets among stocks, bonds, short-term instruments, and other investments.
With respect to 75% of its total assets, each fund may not invest more than 5%
in the securities of any one issuer and may not invest in more than 10% of the
outstanding voting securities of a single issuer. These limitations do not apply
to U.S.Government securities or to securities of other investment companies.
Each fund may not invest more than 25% of its total assets in any one industry.
This limitation does not apply to U.S. Government securities.
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Each fund may borrow only for temporary or emergency purposes, but not in an
amount exceeding 33 1/3% of its total assets.
Loans, in the aggregate, may not exceed 33 1/3% of a fund's total assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, each fund pays fees related to its daily operations.
Expenses paid out of each class's assets are reflected in that class's share
price or dividends; they are neither billed directly to shareholders nor
deducted from shareholder accounts.
Each fund pays a MANAGEMENT FEE to FMR for managing its investments and business
affairs. FMR in turn pays fees to affiliates who provide assistance with these
services. Each fund also pays OTHER EXPENSES, which are explained on page __.
FMR may, from time to time, agree to reimburse each class for management fees
and other expenses above a specified limit. FMR retains the ability to be repaid
by a class if expenses fall below the specified limit prior to the end of the
fiscal year. Reimbursement arrangements, which may be terminated at any time
without notice, can decrease a class's expenses and boost its performance.
MANAGEMENT FEE
The management fee is calculated and paid to FMR every month. The fee is
calculated by adding a group fee rate to an individual fund fee rate, dividing
by twelve, and multiplying the result by the fund's average net assets
throughout the month.
The group fee rate is based on the average net assets of all the mutual funds
advised by FMR. This rate cannot rise above 0.52%, and it drops as total assets
under management increase.
For August 1998, the group fee rate was 0.2892%. The individual fund fee rate is
0.30% for each fund.
FMR HAS SUB-ADVISORY AGREEMENTS with FMR U.K. and FMR Far East. These
sub-advisers provide FMR with investment research and advice on issuers based
outside the United States. Under the sub-advisory agreements, FMR pays FMR U.K.
and FMR Far East fees equal to 110% and 105%, respectively, of the costs of
providing these services.
The sub-advisers may also provide investment management services. In return, FMR
pays FMR U.K. and FMR Far East a fee equal to 50% of its management fee rate
with respect to the fund's investments that the sub-adviser manages on a
discretionary basis.
Beginning January 1, 1999, FIMM will select certain investments for Asset
Allocation. FMR will pay FIMM a fee equal to 50% of its management fee (before
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expense reimbursements) with respect to the fund's investments that FIMM
manages.
OTHER EXPENSES
While the management fee is a significant component of each fund's annual
operating costs, the funds have other expenses as well.
FIIOC performs transfer agency, dividend disbursing and shareholder servicing
functions for each class of each fund. Fidelity Service Company, Inc. (FSC)
calculates the net asset value per share (NAV) and dividends for each class of
each fund, maintains the general accounting records for each fund, and
administers the securities lending program for each fund.
Each fund also pays other expenses, such as legal, audit, and custodian fees; in
some instances, proxy solicitation costs; and the compensation of trustees who
are not affiliated with Fidelity. A broker-dealer may use a portion of the
commissions paid by a fund to reduce that fund's custodian or transfer agent
fees.
Class A and Class T shares of each fund have adopted a DISTRIBUTION AND SERVICE
PLAN. Under the plans, Class A and Class T of each fund are authorized to pay
FDC a monthly distribution fee as compensation for its services and expenses in
connection with the distribution of Class A and Class T shares. Class A and
Class T of each fund may pay FDC a distribution fee at an annual rate of 0.75%
of its average net assets, or such lesser amount as the Trustees may determine
from time to time. Class A and Class T of each fund currently pays FDC a monthly
distribution fee at an annual rate of 0.25% and 0.50%, respectively, of its
average net assets throughout the month. Class A and Class T distribution fee
rates may be increased only when the Trustees believe that it is in the best
interests of Class A and Class T shareholders to do so.
Up to the full amount of the Class A and Class T distribution fees may be
reallowed to investment professionals, as compensation for their services in
connection with the distribution of Class A and Class T shares and for providing
support services to Class A and Class T shareholders, based upon the level of
such services provided. These services may include, without limitation,
answering investor inquiries regarding the funds; providing assistance to
investors in changing dividend options, account designations, and addresses;
performing subaccounting and maintaining Class A and Class T shareholder
accounts; processing purchase and redemption transactions, including automatic
investment and redemption of investor account balances; providing periodic
statements showing an investor's account balance and integrating other
transactions into such statements; and performing other administrative services
in support of the shareholder.
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Class B shares of each fund have adopted a DISTRIBUTION AND SERVICE PLAN. Under
the plans, Class B of each fund is authorized to pay FDC a monthly distribution
fee as compensation for its services and expenses in connection with the
distribution of Class B shares. Class B of each fund may pay FDC a distribution
fee at an annual rate of 0.75% of its average net assets, or such lesser amount
as the Trustees may determine from time to time. Class B of each fund currently
pays FDC a monthly distribution fee at an annual rate of 0.75% of its average
net assets throughout the month.
In addition, pursuant to each Class B plan, Class B of each fund pays FDC a
monthly service fee at an annual rate of 0.25% of Class B's average net assets
throughout the month. Up to the full amount of the Class B service fee may be
reallowed to investment professionals for providing personal service to and/or
maintenance of Class B shareholder accounts.
Class C shares of each fund have adopted a DISTRIBUTION AND SERVICE PLAN. Under
the plans, Class C of each fund is authorized to pay FDC a monthly distribution
fee as compensation for its services and expenses in connection with the
distribution of Class C shares. Class C of each fund may pay FDC a distribution
fee at an annual rate of 0.75% of its average net assets, or such lesser amount
as the Trustees may determine from time to time. Class C of each fund currently
pays FDC a monthly distribution fee at an annual rate of 0.75% of its average
net assets throughout the month. Normally, after the first year of investment,
up to the full amount of the Class C distribution fee may be reallowed to
investment professionals as compensation for their services in connection with
the distribution of Class C shares.
In addition, pursuant to each Class C plan, Class C of each fund pays FDC a
monthly service fee at an annual rate of 0.25% of Class C's average net assets
throughout the month. Normally, after the first year of investment, up to the
full amount of the Class C service fee may be reallowed to investment
professionals for providing personal service to and/or maintenance of Class C
shareholder accounts.
For purchases of Class C shares made for an employee benefit plan or through
reinvested dividends or capital gain distributions, during the first year of
investment and thereafter, up to the full amount of the Class C distribution fee
and Class C service fee paid by such shares may be reallowed to investment
professionals as compensation for their services in connection with the
distribution of Class C shares and for providing personal service to and/or
maintenance of Class C shareholder accounts.
The Class A, Class T, Class B, and Class C plans specifically recognize that FMR
may make payments from its management fee revenue, past profits, or other
resources to FDC for expenses incurred in connection with the distribution of
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the applicable class's shares, including payments made to investment
professionals that provide shareholder support services or engage in the sale of
the applicable class's shares. Currently, the Board of Trustees of each fund has
authorized such payments.
The funds' portfolio turnover rates will vary from year to year. High turnover
rates increase transaction costs and may increase taxable capital gains. FMR
considers these effects when evaluating the anticipated benefits of short-term
investing.
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YOUR ACCOUNT
TYPES OF ACCOUNTS
When you invest through an investment professional, your investment
professional, including a broker-dealer or financial institution, may charge you
a transaction fee with respect to the purchase and sale of fund shares. Read
your investment professional's program materials in conjunction with this
prospectus for additional service features or fees that may apply. Certain
features of the funds, such as minimum initial or subsequent investment amounts,
may be modified.
The different ways to set up (register) your account with Fidelity are listed at
right.
The account guidelines that follow may not apply to certain retirement accounts.
If you are investing through a retirement account or if your employer offers a
fund through a retirement program, you may be subject to additional fees. For
more information, please refer to your program materials, contact your employer,
or call your retirement benefits number or your investment professional
directly, as appropriate.
If you have selected Fidelity Advisor funds as an investment option through an
insurance company group pension program, please contact the provider directly.
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WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
Individual accounts are owned by one person. Joint accounts can have two or
more owners (tenants).
- --------------------------------------------------------------------------------
RETIREMENT
FOR TAX-ADVANTAGED RETIREMENT SAVINGS
Retirement plans provide individuals with tax-advantaged ways to save for
retirement, either with tax-deductible contributions or tax-free growth.
Retirement accounts require special applications and typically have lower
minimums.
o TRADITIONAL INDIVIDUAL RETIREMENT ACCOUNTS (IRAS) allow individuals under age
70 1/2 with compensation to contribute up to $2,000 per tax year. Married
couples can contribute up to $4,000 per tax year, provided no more than $2,000
is contributed on behalf of either spouse. (These limits are aggregate for
Traditional and Roth IRAs.) Contributions may be tax-deductible, subject to
certain income limits.
o ROTH IRAs allow individuals to make non-deductible contributions of up to
$2,000 per tax year. Married couples can contribute up to $4,000 per tax year,
provided no more than $2,000 is contributed on behalf of either spouse. (These
limits are aggregate for Traditional and Roth IRAs.) Eligibility is subject to
certain income limits. Qualified distributions are tax-free.
o ROTH CONVERSION IRAs allow individuals with assets held in a Traditional IRA
or Rollover IRA to convert those assets to a Roth Conversion IRA. Eligibility is
subject to certain income limits. Qualified distributions are tax-free.
o ROLLOVER IRAS help retain special tax advantages for certain eligible rollover
distributions from employer-sponsored retirement plans.
o 401(K) PLANS, and certain other 401(a)-qualified plans, are employer-sponsored
retirement plans that allow employer contributions and may allow employee
after-tax contributions. In addition, 401(k) plans allow employee pre-tax
(tax-deferred) contributions. Contributions to these plans may be tax-deductible
to the employer.
o KEOGH PLANS are generally profit sharing or money purchase pension plans that
allow self-employed individuals or small business owners to make tax-deductible
contributions for themselves and any eligible employees.
o SIMPLE IRAs provide small business owners and those with self-employment
income (and their eligible employees) with many of the advantages of a 401(k)
plan, but with fewer administrative requirements.
15A
<PAGE>
o SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS) provide small business owners or
those with self-employment income (and their eligible employees) with many of
the same advantages as a Keogh, but with fewer administrative requirements.
o SALARY REDUCTION SEP-IRAS (SARSEPS) allow employees of businesses with 25 or
fewer employees to contribute a percentage of their wages on a tax-deferred
basis. These plans must have been established by the employer prior to January
1, 1997.
- --------------------------------------------------------------------------------
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
These custodial accounts provide a way to give money to a child and obtain tax
benefits. An individual can give up to $10,000 a year per child without paying
federal gift tax. Depending on state laws, you can set up a custodial account
under the Uniform Gifts to Minors Act (UGMA) or the Uniform Transfers to Minors
Act (UTMA). Contact your investment professional.
- --------------------------------------------------------------------------------
TRUST
FOR MONEY BEING INVESTED BY A TRUST
The trust must be established before an account can be opened.
- --------------------------------------------------------------------------------
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR OTHER
GROUPS
Contact your investment professional.
16
<PAGE>
HOW TO BUY SHARES
THE PRICE TO BUY ONE SHARE of Class A or Class T is the class's offering price
or the class's net asset value per share (NAV), depending on whether you pay a
front-end sales charge. If you pay a front-end sales charge, your price will be
Class A's or Class T's offering price. When you buy Class A or Class T shares at
the offering price, Fidelity deducts the appropriate sales charge and invests
the rest in Class A or Class T shares of the fund. If you qualify for a
front-end sales charge waiver, your price will be Class A's or Class T's NAV.
See "Transaction Details," page __, and "Sales Charge Reductions and Waivers,"
page __, for explanations of how and when the sales charge and waivers apply.
For Class B and Class C, the PRICE TO BUY ONE SHARE is the class's NAV. Class B
and Class C shares are sold without a front-end sales charge, but may be subject
to a CDSC upon redemption. See "Transaction Details," page __, for information
on how the CDSC is calculated.
Your shares will be purchased at the next offering price or NAV, as applicable,
calculated after your order is received in proper form. Each class's offering
price and NAV, as applicable, are normally calculated each business day at 4:00
p.m. Eastern time.
Short-term or excessive trading into and out of a fund may harm fund performance
by disrupting portfolio management strategies and by increasing fund expenses.
Accordingly, each fund may reject any purchase orders, including exchanges,
particularly from market timers or investors who, in FMR's opinion, have a
pattern of short-term or excessive trading or whose trading has been or may be
disruptive to the fund. For these purposes, FMR may consider an investor's
trading history in a fund or other Fidelity funds, and accounts under common
ownership or control.
It is the responsibility of your investment professional to transmit your order
to buy shares to the transfer agent before the close of business on the day you
place your order.
Fidelity must receive payment within three business days after an order for
shares is placed; otherwise your purchase order may be canceled and you could be
held liable for resulting fees and/or losses.
Share certificates are not available for Class A, Class T, Class B, or Class C
shares.
IF YOU ARE NEW TO THE FIDELITY ADVISOR FUNDS, complete and sign an account
application and mail it along with your check. If there is no account
application accompanying this prospectus, call your investment professional or,
if you are investing through a broker-dealer or insurance representative, call
1-800-522-7297 or, if you are investing through a bank representative, call
1-800-843-3001.
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<PAGE>
If you are investing through a tax-advantaged retirement plan, such as an IRA,
for the first time, you will need a special application. Contact your investment
professional for more information and a retirement account application.
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY ADVISOR FUND, you can:
o Mail an account application with a check,
o Place an order and wire money into your account,
o Open your account by exchanging from the same class of another Fidelity
Advisor fund or from another Fidelity fund, or
o Contact your investment professional.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $2,500
For certain Fidelity Advisor retirement accounts++ $500
Through regular investment plans* $1,000
TO ADD TO AN ACCOUNT $250
For certain Fidelity Advisor retirement accounts++ $100
Through regular investment plans* $100
MINIMUM BALANCE $1,000
For certain Fidelity Advisor retirement accounts++ None
++THESE LOWER MINIMUMS APPLY TO FIDELITY ADVISOR TRADITIONAL IRA, ROTH IRA, ROTH
CONVERSION IRA, ROLLOVER IRA, SEP-IRA, AND KEOGH ACCOUNTS.
*AN ACCOUNT MAY BE OPENED WITH A MINIMUM OF $1,000, PROVIDED THAT A REGULAR
INVESTMENT PLAN IS ESTABLISHED AT THE TIME THE ACCOUNT IS OPENED. FOR MORE
INFORMATION ABOUT REGULAR INVESTMENT PLANS, PLEASE REFER TO "INVESTOR SERVICES,"
PAGE __.
There is no minimum account balance or initial or subsequent investment minimum
for certain Fidelity retirement accounts funded through salary deduction, or
accounts opened with the proceeds of distributions from such retirement
accounts. Refer to the program materials for details. In addition, each fund
reserves the right to waive or lower investment minimums in other circumstances.
Investment and account minimums are waived for purchases of Class T shares with
distributions from a Fidelity Defined Trust account.
PURCHASE AMOUNTS OF MORE THAN $250,000 WILL NOT BE ACCEPTED FOR CLASS B SHARES.
PURCHASE AMOUNTS OF MORE THAN $1 MILLION WILL NOT BE ACCEPTED FOR CLASS C
SHARES. THIS LIMIT DOES NOT APPLY TO PURCHASES OF CLASS C SHARES MADE BY AN
EMPLOYEE BENEFIT PLAN.
For further information on opening an account, please consult your investment
professional or refer to the account application.
17A
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT
o Contact your investment professional or, o Contact your investment professional
PHONE if you are investing through a or, if you are investing through a
YOUR INVESTMENT broker-dealer or insurance broker-dealer or insurance
PROFESSIONAL representative, call 1-800-522-7297. If representative, call 1-800-522-7297. If
[GRAPHIC-TELEPHONE] you are investing through a bank you are investing through a bank
representative, call 1-800-843-3001. representative, call 1-800-843-3001.
o Exchange from the same class of another o Exchange from the same class of another
Fidelity Advisor fund or from another Fidelity Advisor fund or from another
Fidelity fund account with the same Fidelity fund account with the same
registration, including name, address, registration, including name, address,
and taxpayer ID number. and taxpayer ID number.
- ------------------------------------------------------------------------------------------------------------------------------------
MAIL o Complete and sign the account application. o Make your check payable to the complete
[GRAPHIC-ENVELOPE] Make your check payable to the complete name of the fund of your choice and note
name of the fund of your choice and note the applicable class. Indicate your fund
the applicable class. Mail to the address account number on your check and mail to
indicated on the application. the address printed on your account
statement.
o Exchange by mail: call your investment
professional for instructions.
- ------------------------------------------------------------------------------------------------------------------------------------
IN PERSON o Bring your account application and check o Bring your check to your investment
[GRAPHIC-HAND WITH LETTER] to your investment professional. professional.
- ------------------------------------------------------------------------------------------------------------------------------------
WIRE o Not available o Wire to:
[GRAPHIC-WIRE SYMBOL] Banker's Trust Co.
Routing # 021001033
Fidelity DART Depository
Account # 00159759
FBO: (Account name)
(Account number)
Specify the complete name of the fund of
your choice, note the applicable class, and
include your account number and your
name.
- ------------------------------------------------------------------------------------------------------------------------------------
AUTOMATICALLY o Not available. o Use Fidelity Advisor Systematic
[GRAPHIC-CALENDAR] Investment Program. Sign up for this
Service when opening your account, or
call your investment professional to begin
the program.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
18
<PAGE>
HOW TO SELL SHARES
You can arrange to take money out of your fund account at any time by selling
(redeeming) some or all of your shares.
THE PRICE TO SELL ONE SHARE of Class A, Class T, Class B and Class C is the
class's NAV, minus any applicable CDSC.
Your shares will be sold at the next NAV calculated after your order is received
in proper form, minus any applicable CDSC. Each class's NAV is normally
calculated each business day at 4:00 p.m. Eastern time.
It is the responsibility of your investment professional to transmit your order
to sell shares to Fidelity before the close of business on the day you place
your order.
TO SELL SHARES IN A NON-RETIREMENT ACCOUNT, you may use any of the methods
described on these two pages.
TO SELL SHARES IN A FIDELITY ADVISOR RETIREMENT ACCOUNT, your request must be
made in writing, except for exchanges to shares of the same class of another
Fidelity Advisor fund or shares of other Fidelity funds, which can be requested
by phone or in writing.
IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR SHARES, leave at least $1,000 worth
of shares in the account to keep it open (account minimum balances do not apply
to retirement and Fidelity Defined Trust accounts).
TO SELL SHARES BY BANK WIRE, you will need to sign up for this service in
advance.
CERTAIN REQUESTS MUST INCLUDE A SIGNATURE GUARANTEE. It is designed to protect
you and Fidelity from fraud. Your request must be made in writing and include a
signature guarantee if any of the following situations apply:
o You wish to redeem more than $100,000 worth of shares,
o Your account registration has changed within the last 30 days,
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<PAGE>
o The check is being mailed to a different address than the one on your account
(record address),
o The check is being made payable to someone other than the account owner,
o The redemption proceeds are being transferred to a Fidelity Advisor account
with a different registration,
o You wish to set up the bank wire feature, or
o You wish to have redemption proceeds wired to a non-predesignated bank
account.
You should be able to obtain a signature guarantee from a bank, broker, dealer,
credit union (if authorized under state law), securities exchange or
association, clearing agency, or savings association. A notary public cannot
provide a signature guarantee.
SELLING SHARES IN WRITING
Write a "letter of instruction" with:
o Your name,
o The fund's name,
o The applicable class name,
o Your fund account number,
o The dollar amount or number of shares to be redeemed, and
o Any other applicable requirements listed in the table on page __.
Deliver your letter to your investment professional, or mail it to the following
address:
Fidelity Investments
P.O. Box 770002
Cincinnati, OH 45277-0081
Unless otherwise instructed, Fidelity will send a check to the record address.
19A
<PAGE>
<TABLE>
<CAPTION>
ACCOUNT TYPE SPECIAL REQUIREMENTS
<S> <C> <C>
PHONE All account types except retirement o Maximum check request: $100,000.
YOUR INVESTMENT
PROFESSIONAL
[GRAPHIC-TELEPHONE]
All account types o You may exchange to the same class of other
Fidelity Advisor funds or to other Fidelity
funds if both accounts are registered
with the same name(s), address, and taxpayer
ID number.
- ------------------------------------------------------------------------------------------------------------------------------------
MAIL OR IN PERSON Individual, Joint Tenant, Sole o The letter of instruction must be signed
[GRAPHIC-ENVELOPE] Proprietorship, UGMA, UTMA by all persons required to sign for
[GRAPHIC-HAND WITH LETTER] transactions, exactly as their names appear
on the account, and sent to your investment
professional.
Retirement account o The account owner should complete a
retirement distribution form. Contact your
investment professional or, if you purchased
your shares through a broker-dealer or
insurance representative, call
1-800-522-7297. If you purchased your shares
through a bank representative, call
1-800-843-3001.
Trust o The trustee must sign the letter indicating
capacity as trustee. If the trustee's name
is not in the account registration, provide
a copy of the trust document certified
within the last 60 days.
Business or Organization o At least one person authorized by corporate
resolution to act on the account must sign
the letter.
Executor, Administrator,
Conservator/Guardian o For instructions, contact your investment
professional or, if you purchased your
shares through a broker-dealer or insurance
representative, call 1-800-522-7297. If
you purchased your shares through a bank
representative, call 1-800-843-3001.
- ------------------------------------------------------------------------------------------------------------------------------------
WIRE All account types except retirement o You must sign up for the wire feature before
[GRAPHIC-WIRE SYMBOL] using it. To verify that it is in place,
contact your investment professional or, if
you purchased your shares through a
broker-dealer or insurance representative,
call 1-800-522-7297. If you purchased your
shares through a bank representative, call
1-800-843-3001. Minimum wire: $500
o Your wire redemption request must be
received in proper form by the transfer
agent before 4:00 p.m. Eastern time for
money to be wired on the next business day.
</TABLE>
20
<PAGE>
INVESTOR SERVICES
Fidelity Advisor funds provide a variety of services to help you manage your
account.
INFORMATION SERVICES
STATEMENTS AND REPORTS that Fidelity sends to you include the following:
o Confirmation statements (after every transaction, except a reinvestment, that
affects your account balance or your account registration)
o Account statements (quarterly)
o Financial reports (every six months)
To reduce expenses, only one copy of most financial reports and prospectuses
will be mailed, even if you have more than one account in a fund. Call your
investment professional if you need additional copies of financial reports and
prospectuses.
TRANSACTION SERVICES
EXCHANGE PRIVILEGE. You may sell your Class A or Class T shares and buy the same
class of shares of other Fidelity Advisor funds or Daily Money Class shares of
Treasury Fund, Prime Fund, and Tax-Exempt Fund by telephone or in writing. You
may sell your Class B shares and buy Class B shares of other Fidelity Advisor
funds or Advisor B Class shares of Treasury Fund by telephone or in writing. You
may sell your Class C shares and buy Class C shares of other Fidelity Advisor
funds or Advisor C Class shares of Treasury Fund by telephone or in writing. The
shares you exchange will carry credit for any front-end sales charge you
previously paid in connection with their purchase.
Note that exchanges out of a fund are limited to four per calendar year, and
that they may have tax consequences for you. For details on policies and
restrictions governing exchanges, including circumstances under which a
shareholder's exchange privilege may be suspended or revoked, see "Exchange
Restrictions," page ___.
FIDELITY ADVISOR SYSTEMATIC WITHDRAWAL PROGRAM lets you set up periodic
redemptions from your Class A, Class T, Class B and Class C account. Accounts
with a value of $10,000 or more in Class A, Class T, Class B and Class C shares
are eligible for this program. Aggregate redemptions per 12-month period from
your Class B account may not exceed 10% of the account value and are not subject
to a CDSC. Because of Class A's and Class T's front-end sales charge, you may
not want to set up a systematic withdrawal plan during a period when you are
buying Class A or Class T shares on a regular basis.
One easy way to pursue your financial goals is to invest money regularly.
Fidelity Advisor funds offer convenient services that let you transfer money
into your fund account, or between fund accounts, automatically. While regular
21
<PAGE>
investment plans do not guarantee a profit and will not protect you against loss
in a declining market, they can be an excellent way to invest for retirement, a
home, educational expenses, and other long-term financial goals. Certain
restrictions apply for retirement accounts. Call your investment professional
for more information.
21A
<PAGE>
REGULAR INVESTMENT PLANS
FIDELITY ADVISOR SYSTEMATIC INVESTMENT PROGRAM
To move money from your bank account to a Fidelity
Advisor Fund
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Minimum Minimum
Initial Additional Frequency Setting up or changing
$1,000 $100 Monthly, bimonthly, o For a new account, complete the appropriate section on the
quarterly, or semi-annually application.
o For existing accounts, call your investment professional for an
application.
o To change the amount or frequency of your investment, contact your
investment professional directly or, if you purchased your shares
through a broker-dealer or insurance representative, call
1-800-522-7297. If you purchased your shares through a bank
representative, call 1-800-843-3001. Call at least 10 business days
prior to your next scheduled investment date (20 business days if
you purchased your shares through a bank).
To direct distributions from a Fidelity Defined Trust to Class T of a Fidelity Advisor fund
Minimum Minimum
Initial Additional Setting up or changing
Not Not o For a new or existing account, ask your investment professional
Applicable Applicable for the appropriate enrollment form.
o To change the fund to which your distributions are directed, contact
your investment professional for instructions.
- ------------------------------------------------------------------------------------------------------------------------------------
FIDELITY ADVISOR SYSTEMATIC EXCHANGE PROGRAM
To move money from a Fidelity money market fund or a
Fidelity Advisor fund to another Fidelity Advisor fund
Minimum Frequency Setting up or changing
$100 Monthly, quarterly, o To establish, call your investment professional after both
semi-annually, or annually accounts are opened.
o To change the amount or frequency of your investment, contact your
investment professional directly or, if you purchased your shares
through a broker-dealer or insurance representative, call
1-800-522-7297. If you purchased your shares through a bank
representative, call 1-800-843-3001.
o The account from which the exchanges are to be processed must have a
minimum balance of $10,000. The account into which the exchange is
being processed must have a minimum of $1,000.
o Both accounts must have the same registrations and taxpayer ID
numbers.
o Call at least 2 business days prior to your next scheduled exchange
date.
22
</TABLE>
<PAGE>
SHAREHOLDER AND ACCOUNT POLICIES
DIVIDENDS, CAPITAL GAINS, AND TAXES
Each fund distributes substantially all of its net investment income and capital
gains to shareholders each year. Normally, dividends are distributed in December
and January. Capital gains are normally distributed in December and each fund
may pay additional capital gains after the close of its fiscal year.
DISTRIBUTION OPTIONS
When you open an account, specify on your account application how you want to
receive your distributions. The funds offer four options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions will be
automatically reinvested in additional shares of the same class of the fund. If
you do not indicate a choice on your application, you will be assigned this
option.
2. INCOME-EARNED OPTION. Your capital gain distributions will be automatically
reinvested in additional shares of the same class of the fund, but you will be
sent a check for each dividend distribution.
3. CASH OPTION. You will be sent a check for your dividend and capital gain
distributions.
4. DIRECTED DIVIDENDS(REGISTERED TRADEMARK) PROGRAM. Your dividend distributions
will be automatically invested in the same class of shares of another
identically registered Fidelity Advisor fund. You will be sent a check for your
capital gain distributions or your capital gain distributions will be
automatically reinvested in additional shares of the same class of the fund.
If you select distribution option 2, 3, or 4 and the U.S. Postal Service does
not deliver your checks, your election may be converted to the Reinvestment
Option. You will not receive interest on amounts represented by uncashed
distribution checks. To change your distribution option, call your investment
professional directly or, if you purchased your shares through a broker-dealer
or insurance representative, call 1-800-522-7297. If you purchased your shares
through a bank representative, call 1-800-843-3001.
Shares purchased through reinvestment of dividend and capital gain distributions
are not subject to a sales charge. If you direct Class A or Class T
distributions to a class with a front-end sales charge, you will not pay a sales
charge on those purchases.
When Class A, Class T, Class B, or Class C deducts a distribution from its NAV,
the reinvestment price is the applicable class's NAV at the close of business
that day. Distribution checks will be mailed within seven days.
TAXES
As with any investment, you should consider how your investment in a fund will
be taxed. If your account is not a tax-advantaged retirement account, you should
23
<PAGE>
be aware of these tax implications.
TAXES ON DISTRIBUTIONS. Distributions are subject to federal income tax, and may
also be subject to state or local taxes. If you live outside the United States,
your distributions could also be taxed by the country in which you reside. Your
distributions are taxable when they are paid, whether you take them in cash or
reinvest them. However, distributions declared in December and paid in January
are taxable as if they were paid on December 31.
For federal tax purposes, each fund's income and short-term capital gains are
distributed as dividends and taxed as ordinary income; capital gain
distributions are taxed as long-term capital gains.
Every January, Fidelity will send you and the IRS a statement showing the tax
characterization of distributions paid to you in the previous year.
TAXES ON TRANSACTIONS. Your redemptions--including exchanges--are subject to
capital gains tax. A capital gain or loss is the difference between the cost of
your shares and the price you receive when you sell them.
Whenever you sell shares of a fund, Fidelity will send you a confirmation
statement showing how many shares you sold and at what price.
You will also receive a consolidated transaction statement at least quarterly.
However, it is up to you or your tax preparer to determine whether this sale
resulted in a capital gain and, if so, the amount of tax to be paid. BE SURE TO
KEEP YOUR REGULAR ACCOUNT STATEMENTS; the information they contain will be
essential in calculating the amount of your capital gains.
"BUYING A DIVIDEND." If you buy shares when a class has realized but not yet
distributed income or capital gains, you will pay the full price for the shares
and then receive a portion of the price back in the form of a taxable
distribution.
CURRENCY CONSIDERATIONS. If a fund's dividends exceed its taxable income in any
year, which is sometimes the result of currency-related losses, all or a portion
of the fund's dividends may be treated as a return of capital to shareholders
for tax purposes. To minimize the risk of a return of capital, a fund may adjust
its dividends to take currency fluctuations into account, which may cause the
dividends to vary. Any return of capital will reduce the cost basis of your
shares, which will result in a higher reported capital gain or a lower reported
capital loss when you sell your shares. The statement you receive in January
will specify if any distributions included a return of capital.
EFFECT OF FOREIGN TAXES. Foreign governments may impose taxes on a fund and its
investments, and these taxes generally will reduce a fund's distributions.
23A
<PAGE>
However, if you meet certain holding period requirements with respect to your
fund shares, an offsetting tax credit may be available to you. If you do not
meet such holding period requirements, you may still be entitled to a deduction
for certain foreign taxes. In either case, your tax statement will show more
taxable income or capital gains than were actually distributed by the fund, but
will also show the amount of the available offsetting credit or deduction.
There are tax requirements that all funds must follow in order to avoid federal
taxation. In its effort to adhere to these requirements, a fund may have to
limit its investment activity in some types of instruments.
TRANSACTION DETAILS
THE FUNDS ARE OPEN FOR BUSINESS each day the New York Stock Exchange (NYSE) is
open. FSC normally calculates each class's NAV and offering price, as
applicable, as of the close of business of the NYSE, normally 4:00 p.m. Eastern
time.
A CLASS'S NAV is the value of a single share. The NAV of each class is computed
by adding that class's pro rata share of the value of the applicable fund's
investments, cash, and other assets, subtracting that class's pro rata share of
the value of the applicable fund's liabilities, subtracting the liabilities
allocated to that class, and dividing the result by the number of shares of that
class that are outstanding.
Each fund's assets are valued primarily on the basis of market quotations.
Short-term securities with remaining maturities of sixty days or less for which
quotations are not readily available are valued on the basis of amortized cost.
This method minimizes the effect of changes in a security's market value.
Foreign securities are valued on the basis of quotations from the primary market
in which they are traded, and are translated from the local currency into U.S.
dollars using current exchange rates. In addition, if quotations are not readily
available, or if the values have been materially affected by events occurring
after the closing of a foreign market, assets may be valued by another method
that the Board of Trustees believes accurately reflects fair value.
THE OFFERING PRICE of Class A or Class T is its NAV divided by the difference
between one and the applicable front-end sales charge percentage. Class A has a
maximum front-end sales charge of 5.75% of the offering price for each fund.
Class T has a maximum front-end sales charge of 3.50% of the offering price for
each fund.
24
<PAGE>
SALES CHARGES AND INVESTMENT PROFESSIONAL
CONCESSIONS -- CLASS A
Sales Charge:
As an Investment
As a % approximate Professional
of % of Net Concession
Offering Amount as % of
Price Invested Offering
Price
Up to $49,999 5.75% 6.10% 5.00%
$50,000 to $99,999 4.50% 4.71% 3.75%
$100,000 to $249,999 3.50% 3.63% 2.75%
$250,000 to $499,999 2.50% 2.56% 2.00%
$500,000 to $999,999 2.00% 2.04% 1.75%
$1,000,000 to $24,999,999 1.00% 1.01% 0.75%
$25,000,000 or more None* None* *
* SEE SECTION ENTITLED FINDER'S FEE.
SALES CHARGES AND INVESTMENT PROFESSIONAL
CONCESSIONS -- CLASS T
Sales Charge:
As an Investment
As a % approximate Professional
of % of Net Concession as
Offering Amount % of Offering
Price Invested Price
Up to $49,999 3.50% 3.63% 3.00%
$50,000 to $99,999 3.00% 3.09% 2.50%
$100,000 to $249,999 2.50% 2.56% 2.00%
$250,000 to $499,999 1.50% 1.52% 1.25%
$500,000 to $999,999 1.00% 1.01% 0.75%
$1,000,000 or more None* None* *
* SEE SECTION ENTITLED FINDER'S FEE.
FINDER'S FEE. On eligible purchases of (i) Class A shares in amounts of $1
million or more that qualify for a Class A load waiver, (ii) Class A shares in
amounts of $25 million or more, and (iii) Class T shares in amounts of $1
million or more, investment professionals will be compensated with a fee at the
rate of 0.25% of the purchase amount.
Any assets on which a finder's fee has been paid will bear a contingent deferred
sales charge (Class A or Class T CDSC) if they do not remain in Class A or Class
T shares of the Fidelity Advisor funds, or Daily Money Class shares of Treasury
Fund, Prime Fund, or Tax-Exempt Fund, for a period of at least one uninterrupted
year. The Class A or Class T CDSC will be 0.25% of the lesser of the cost of the
Class A or Class T shares, as applicable, at the initial date of purchase or the
value of the Class A or Class T shares, as applicable, at redemption, not
including any reinvested dividends or capital gains. Class A and Class T shares
acquired through distributions (dividends or capital gains) will not be subject
to a Class A or Class T CDSC. In determining the applicability and rate of any
Class A or Class T CDSC at redemption, Class A or Class T shares representing
reinvested dividends and capital gains, if any, will be redeemed first, followed
by those Class A or Class T CDSC shares that have been held for the longest
period of time.
24A
<PAGE>
Shares held by an insurance company separate account will be aggregated at the
client (e.g., the contract holder or plan sponsor) level, not at the separate
account level. Upon request, anyone claiming eligibility for the 0.25% fee with
respect to shares held by an insurance company separate account must provide FDC
access to records detailing purchases at the client level.
With respect to employee benefit plans, the Class A or Class T CDSC does not
apply to the following types of redemptions: (i) plan loans or distributions or
(ii) exchanges to non-Advisor fund investment options. With respect to
Individual Retirement Accounts, the Class A or Class T CDSC does not apply to
redemptions made for disability, payment of death benefits, or required partial
distributions starting at age 70 1/2. Your investment professional should advise
Fidelity at the time your redemption order is placed if you qualify for a waiver
of the Class A or Class T CDSC.
Investment professionals must notify FDC in advance of a purchase eligible for a
finder's fee, and may be required to enter into an agreement with FDC in order
to receive the finder's fee.
CONTINGENT DEFERRED SALES CHARGE. Class B shares may, upon redemption, be
assessed a CDSC based on the following schedule:
Contingent
Deferred
From Date of Purchase Sales Charge
Less than 1 year 5%
1 year to less than 2 years 4%
2 years to less than 3 years 3%
3 years to less than 4 years 3%
4 years to less than 5 years 2%
5 years to less than 6 years 1%
6 years to less than 7 years [A] 0%
[A] AFTER A HOLDING PERIOD OF SEVEN YEARS, CLASS B SHARES WILL CONVERT
AUTOMATICALLY TO CLASS A SHARES OF THE SAME FIDELITY ADVISOR FUND. SEE
"CONVERSION FEATURE" BELOW FOR MORE INFORMATION.
When exchanging Class B shares of one fund for Class B shares of another
Fidelity Advisor fund or Advisor B Class shares of Treasury Fund, your Class B
shares retain the CDSC schedule in effect when they were originally purchased.
Except as provided below, investment professionals with whom FDC has agreements
receive as compensation from FDC, at the time of the sale, a concession equal to
4.00% of your purchase of Class B shares. For purchases of Class B shares
through reinvested dividends or capital gain distributions, investment
professionals do not receive a concession at the time of sale.
25
<PAGE>
Class C shares may, upon redemption within one year of purchase, be assessed a
CDSC of 1.00%.
Except as provided below, investment professionals with whom FDC has agreements
receive as compensation from FDC, at the time of the sale, a concession equal to
1.00% of your purchase of Class C shares. For purchases of Class C shares made
for an employee benefit plan or through reinvested dividends or capital gain
distributions, investment professionals do not receive a concession at the time
of sale.
The CDSC for Class B and Class C shares will be calculated based on the lesser
of the cost of the Class B or Class C shares, as applicable, at the initial date
of purchase or the value of those Class B or Class C shares, as applicable, at
redemption, not including any reinvested dividends or capital gains. Class B and
Class C shares acquired through distributions (dividends or capital gains) will
not be subject to a CDSC. In determining the applicability and rate of any CDSC
at redemption, Class B or Class C shares representing reinvested dividends and
capital gains, if any, will be redeemed first, followed by those Class B or
Class C shares that have been held for the longest period of time.
CONVERSION FEATURE. After a holding period of seven years from the initial date
of purchase, Class B shares and any capital appreciation associated with those
shares convert automatically to Class A shares of the same Fidelity Advisor
fund. Conversion to Class A shares will be made at NAV. At the time of
conversion, a portion of the Class B shares purchased through the reinvestment
of dividends or capital gains (Dividend Shares) will also convert to Class A
shares. The portion of Dividend Shares that will convert is determined by the
ratio of your converting Class B non-Dividend Shares to your total Class B
non-Dividend Shares.
For more information about the CDSC, including the conversion feature and the
permitted circumstances for CDSC waivers, contact your investment professional.
REINSTATEMENT PRIVILEGE. If you have sold all or part of your Class A, Class T,
Class B, or Class C shares of a fund, you may reinvest an amount equal to all or
a portion of the redemption proceeds in the same class of the fund or any of the
other Fidelity Advisor funds, at the NAV next determined after receipt in proper
form of your investment order, provided that such reinvestment is made within 90
days of redemption. Under these circumstances, the dollar amount of the CDSC, if
any, you paid on Class A, Class T, Class B, or Class C shares will be reimbursed
to you by reinvesting that amount in Class A, Class T, Class B, or Class C
shares, as applicable. You must reinstate your shares into an account with the
same registration. This privilege may be exercised only once by a shareholder
with respect to a fund and certain restrictions may apply. For purposes of the
25A
<PAGE>
CDSC holding period schedule, the holding period of your Class A, Class T, Class
B, or Class C shares will continue as if the shares had not been redeemed.
WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to certify that your
social security or taxpayer identification number is correct and that you are
not subject to 31% backup withholding for failing to report income to the IRS.
If you violate IRS regulations, the IRS can require a fund to withhold 31% of
your taxable distributions and redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE OR ELECTRONICALLY. Fidelity will
not be responsible for any losses resulting from unauthorized transactions if it
follows reasonable security procedures designed to verify the identity of the
investor. Fidelity will request personalized security codes or other
information, and may also record calls. For transactions conducted through the
Internet, Fidelity recommends the use of an Internet browser with 128-bit
encryption. You should verify the accuracy of your confirmation statements
immediately after you receive them. If you do not want the ability to redeem and
exchange by telephone, call Fidelity for instructions. Additional documentation
may be required from corporations, associations, and certain fiduciaries.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during periods of
unusual market activity), consider placing your order by mail.
EACH FUND RESERVES THE RIGHT to suspend the offering of shares for a period of
time.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your shares will be purchased at the next
offering price or NAV, as applicable, calculated after your order is received in
proper form. Note the following:
o All of your purchases must be made in U.S. dollars and checks must be drawn on
U.S. banks.
o Fidelity does not accept cash.
o When making a purchase with more than one check, each check must have a value
of at least $50.
o Each fund reserves the right to limit the number of checks processed at one
time.
o If your check does not clear, your purchase will be canceled and you could be
liable for any losses or fees a fund or Fidelity has incurred.
AUTOMATED PURCHASE ORDERS. Class A, Class T, Class B, and Class C shares can be
purchased or sold through investment professionals utilizing an automated order
placement and settlement system that guarantees payment for orders on a
specified date.
CONFIRMED PURCHASES. Certain financial institutions that meet FDC's
creditworthiness criteria may enter confirmed purchase orders on behalf of
customers by phone, with payment to follow no later than close of business on
26
<PAGE>
the next business day. If payment is not received by the next business day, the
order will be canceled and the financial institution will be liable for any
losses.
TO AVOID THE COLLECTION PERIOD associated with check purchases, consider buying
shares by bank wire, U.S. Postal money order, U.S. Treasury check, Federal
Reserve check, or automatic investment plans.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the next NAV
calculated after your order is received in proper form, minus any applicable
CDSC. Note the following:
o Normally, redemption proceeds will be mailed to you on the next business day,
but if making immediate payment could adversely affect a fund, it may take up to
seven days to pay you.
o Each fund may hold payment on redemptions until it is reasonably satisfied
that investments made by check have been collected, which can take up to seven
business days.
o Redemptions may be suspended or payment dates postponed when the NYSE is
closed (other than weekends or holidays), when trading on the NYSE is
restricted, or as permitted by the SEC.
o You will not receive interest on amounts represented by uncashed redemption
checks.
FIDELITY RESERVES THE RIGHT TO DEDUCT AN ANNUAL MAINTENANCE FEE of $12.00 from
accounts with a value of less than $2,500 (including any amount paid as a sales
charge), subject to an annual maximum charge of $60.00 per shareholder. Accounts
opened after September 30 will not be subject to the fee for that year. The fee,
which is payable to the transfer agent, is designed to offset in part the
relatively higher costs of servicing smaller accounts. The fee will not be
deducted from retirement accounts (except non-prototype retirement accounts),
accounts using a systematic investment program, certain (Network Level I and
III) accounts which are maintained through National Securities Clearing
Corporation (NSCC), or if total assets in Fidelity mutual funds exceed $50,000.
Eligibility for the $50,000 waiver is determined by aggregating Fidelity mutual
fund accounts (excluding contractual plans) maintained (i) by FIIOC and (ii)
through NSCC; provided those accounts are registered under the same primary
social security number.
IF YOUR NON-RETIREMENT ACCOUNT BALANCE FALLS BELOW $1,000, you will be given 30
days' notice to reestablish the minimum balance. If you do not increase your
balance, Fidelity reserves the right to close your account and send the proceeds
to you. Your shares will be redeemed at the NAV, minus any applicable CDSC, on
the day your account is closed.
26A
<PAGE>
FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing historical
account documents, that are beyond the normal scope of its services.
FDC will, at its expense, provide promotional incentives such as sales contests
and luxury trips to investment professionals who support the sale of shares of
the funds. In some instances, these incentives will be offered only to certain
types of investment professionals, such as bank-affiliated or non-bank
affiliated broker-dealers, or to investment professionals whose representatives
provide services in connection with the sale or expected sale of significant
amounts of shares.
EXCHANGE RESTRICTIONS
As a shareholder, you have the privilege of exchanging Class A, Class T, Class
B, or Class C shares of a fund for the same class of shares of other Fidelity
Advisor funds; Class A or Class T shares for Daily Money Class shares of
Treasury Fund, Prime Fund, or Tax-Exempt Fund; Class B shares for Advisor B
Class shares of Treasury Fund; and Class C shares for Advisor C Class shares of
Treasury Fund. If you purchased your Class T shares through certain investment
professionals that have signed an agreement with FDC, you also have the
privilege of exchanging your Class T shares for shares of Fidelity Capital
Appreciation Fund. However, you should note the following:
o The fund or class you are exchanging into must be available for sale in your
state.
o You may only exchange between accounts that are registered in the same name,
address, and taxpayer identification number.
o Before exchanging into a fund or class, read its prospectus.
o Exchanges may have tax consequences for you.
o Each fund reserves the right to temporarily or permanently terminate the
exchange privilege of any investor who makes more than four exchanges out of a
fund per calendar year. Accounts under common ownership or control, including
accounts with the same taxpayer identification number, will be counted together
for purposes of the four exchange limit.
o Each fund reserves the right to refuse exchange purchases by any person or
group if, in FMR's judgment, the fund would be unable to invest the money
effectively in accordance with its investment objective and policies, or would
otherwise potentially be adversely affected.
o The exchange limit may be modified for accounts in certain institutional
retirement plans to conform to plan exchange limits and Department of Labor
regulations. See your plan materials for further information.
o Any exchanges of Class A, Class T, Class B, or Class C shares are not subject
to a CDSC.
Although the funds will attempt to give you prior notice whenever they are
reasonably able to do so, they may impose these restrictions at any time. The
27
<PAGE>
funds reserve the right to terminate or modify these exchange privileges in the
future.
OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may impose trading
fees of up to 1.00% of the amount exchanged. Check each fund's prospectus for
details.
SALES CHARGE REDUCTIONS AND WAIVERS
If your purchase qualifies for one of the following sales charge reduction
plans, the front-end sales charge will be reduced for purchases of Class A and
Class T shares according to the Sales Charge schedule shown on page __. Please
refer to the funds' SAI for more details about each plan or call your investment
professional.
If you purchased your shares through a broker-dealer or insurance
representative, call 1-800-522-7297. If you purchased your shares through a bank
representative, call 1-800-843-3001.
Your purchases and existing balances of Class A, Class T, Class B, and Class C
shares may be included in the following programs for purposes of qualifying for
a Class A or Class T front-end sales charge reduction.
QUANTITY DISCOUNTS apply to purchases of Class A or Class T shares of a single
Fidelity Advisor fund or to combined purchases of (i) Class A, Class T, Class B,
and Class C shares of any Fidelity Advisor fund, (ii) Advisor B Class shares and
Advisor C Class shares of Treasury Fund, and (iii) Daily Money Class shares of
Treasury Fund, Prime Fund, and Tax-Exempt Fund acquired by exchange from any
Fidelity Advisor fund. The minimum investment eligible for a quantity discount
is $50,000.
To qualify for a quantity discount, investing in a fund's Class A, Class T,
Class B, and Class C shares for several accounts at the same time will be
considered a single transaction (Combined Purchase), as long as shares are
purchased through one investment professional and the total is at least $50,000.
RIGHTS OF ACCUMULATION let you determine your front-end sales charge on Class A
and Class T shares by adding to your new purchase of Class A and Class T shares
the value of all of the Fidelity Advisor fund Class A, Class T, Class B, and
Class C shares held by you, your spouse, and your children under age 21. You can
also add the value of Advisor B Class shares and Advisor C Class shares of
Treasury Fund and Daily Money Class shares of Treasury Fund, Prime Fund, and
Tax-Exempt Fund acquired by exchange from any Fidelity Advisor fund.
A LETTER OF INTENT (the Letter) lets you receive the same reduced front-end
sales charge on purchases of Class A and Class T shares made during a 13-month
period as if the total amount invested during the period had been invested in a
single lump sum. (See Quantity Discounts above.) Purchases of Class B and Class
C shares during the 13-month period will count toward the completion of your
27A
<PAGE>
Letter. You must file your non-binding Letter with Fidelity within 90 days of
the start of your purchases. Your initial investment must be at least 5% of the
amount you plan to invest. Out of the initial investment, Class A or Class T
shares equal to 5% of the dollar amount specified in the Letter will be
registered in your name and held in escrow. You will earn income dividends and
capital gain distributions on escrowed Class A and Class T shares. Reinvested
income and capital gain distributions do not count toward the completion of the
Letter. The escrow will be released when your purchase of the total amount has
been completed. You are not obligated to complete the Letter, and in such a
case, sufficient escrowed Class A or Class T shares will be redeemed to pay any
applicable front-end sales charges.
A FRONT-END SALES CHARGE WILL NOT APPLY TO THE FOLLOWING CLASS A SHARES:
1. Purchased for an insurance company separate account used to fund annuity
contracts for employee benefit plans;
2. Purchased by a trust institution or bank trust department for a managed
account that is charged an asset-based fee. Employee benefit plans and accounts
managed by third parties do not qualify for this waiver;
3. Purchased by a broker-dealer for a managed account that is charged an
asset-based fee. Employee benefit plans do not qualify for this waiver;
4. Purchased by a registered investment advisor that is not part of an
organization primarily engaged in the brokerage business for an account that is
managed on a discretionary basis and is charged an asset-based fee. Employee
benefit plan assets do not qualify for this waiver;
5. Purchased for (i) an employee benefit plan that has $25 million or more in
plan assets or (ii) an employee benefit plan that is part of an investment
professional sponsored program that requires the participating employee benefit
plan to initially invest in Class C or Class B shares and, upon meeting certain
criteria, subsequently requires the plan to invest in Class A shares; or
6. Purchased prior to December 31, 1998 by shareholders who have closed their
Class A Municipal Bond, Class A California Municipal Income, or Class A New York
Municipal Income accounts prior to December 31, 1997. This waiver is limited to
purchases of up to $10,000; shareholders are entitled to this waiver after the
original load waiver certificate is received in proper form by FIIOC.
A FRONT-END SALES CHARGE WILL NOT APPLY TO THE FOLLOWING CLASS T SHARES:
1. Purchased for an insurance company separate account used to fund annuity
contracts for employee benefit plans;
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<PAGE>
2. Purchased by a trust institution or bank trust department for a managed
account that is charged an asset-based fee. Accounts managed by third parties do
not qualify for this waiver;
3. Purchased by a broker-dealer for a managed account that is charged an
asset-based fee;
4. Purchased by a registered investment advisor that is not part of an
organization primarily engaged in the brokerage business for an account that is
managed on a discretionary basis and is charged an asset-based fee;
5. Purchased for an employee benefit plan, except certain small employer
retirement plans;
6. Purchased for a Fidelity or Fidelity Advisor account with the proceeds of a
distribution from (i) an insurance company separate account used to fund annuity
contracts for employee benefit plans that are invested in Fidelity Advisor or
Fidelity funds, or (ii) an employee benefit plan that is invested in Fidelity
Advisor or Fidelity funds. (Distributions other than those transferred to an IRA
account must be transferred directly into a Fidelity account.);
7. Purchased for any state, county, or city, or any governmental
instrumentality, department, authority or agency;
8. Purchased with redemption proceeds from other mutual fund complexes on which
you have previously paid a front-end sales charge or CDSC;
9. Purchased by a current or former trustee or officer of a Fidelity fund or a
current or retired officer, director or regular employee of FMR Corp. or
Fidelity International Limited or their direct or indirect subsidiaries (a
Fidelity trustee or employee), the spouse of a Fidelity trustee or employee, a
Fidelity trustee or employee acting as custodian for a minor child, or a person
acting as trustee of a trust for the sole benefit of the minor child of a
Fidelity trustee or employee;
10. Purchased by a charitable organization (as defined for purposes of Section
501(c)(3) of the Internal Revenue Code) investing $100,000 or more;
11. Purchased by a bank trust officer, registered representative, or other
employee (or a member of one of their immediate families) of investment
professionals having agreements with FDC;
12. Purchased for a charitable remainder trust or life income pool established
for the benefit of a charitable organization (as defined for purposes of Section
501(c)(3) of the Internal Revenue Code);
13. Purchased with distributions of income, principal, and capital gains from
Fidelity Defined Trusts; or
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<PAGE>
14. Purchased prior to December 31, 1998 by shareholders who have closed their
Class T Municipal Bond, Class T California Municipal Income; or Class T New York
Municipal Income accounts prior to December 31, 1997. This waiver is limited to
purchases of up to $10,000; shareholders are entitled to this waiver after the
original load waiver certificate is received in proper form by FIIOC.
You must notify FDC in advance if you qualify for a front-end sales charge
waiver. Employee benefit plan investors must meet additional requirements
specified in the funds' SAI.
If you are investing through an insurance company separate account, if you are
investing through a trust department, if you are investing through an account
managed by a broker-dealer, or if you have authorized an investment adviser to
make investment decisions for you, you may qualify to purchase Class A shares
without a sales charge (as described in (1), (2), (3) and (4) on page __), Class
T shares without a sales charge (as described in (1), (2), (3) and (4) on page
__), or Institutional Class shares. Because Institutional Class shares have no
sales charge, and do not pay a 12b-1 fee, Institutional Class shares are
expected to have a higher total return than Class A, Class T, Class B, or Class
C shares. Contact your investment professional to discuss if you qualify.
THE CDSC ON CLASS B AND CLASS C SHARES MAY BE WAIVED:
1. In cases of disability or death, provided that the shares are redeemed within
one year following the death or the initial determination of disability;
2. In connection with a total or partial redemption related to certain
distributions from retirement plans or accounts at age 70 1/2 which are
permitted without penalty pursuant to the Internal Revenue Code;
3. In connection with redemptions through the Fidelity Advisor Systematic
Withdrawal Program; or
4. (APPLICABLE TO CLASS C ONLY) In connection with any redemptions from an
employee benefit plan. Employee benefit plan investors must meet additional
requirements specified in the funds' SAI.
Your investment professional should call Fidelity for more information.
No dealer, sales representative, or any other person has been authorized to give
any information or to make any representations, other than those contained in
this Prospectus and in the related SAI, in connection with the offer contained
in this Prospectus. If given or made, such other information or representations
must not be relied upon as having been authorized by the funds or FDC. This
Prospectus and the related SAI do not constitute an offer by the funds or by FDC
to sell or to buy shares of the funds to any person to whom it is unlawful to
make such offer.
Fidelity, Fidelity Investments, Fidelity Investments & (Pyramid) Design, and
Directed Dividends are registered trademarks of FMR Corp. Portfolio Advisory
Services and Fidelity Advisor Funds are servicemarks of FMR Corp.
The third party marks appearing above are the marks of their respective owners.
29
<PAGE>
APPENDIX
CALENDAR YEAR PERFORMANCE FOR RELATED FUNDS
Set forth below are charts presenting the calendar year performance of each
Related Fund for the past 10 years or since its inception. You should not assume
Dividend Growth, Retirement Growth, or Asset Allocation will have the same
future performance as the Related Funds. The Related Funds have different cost
structures than the funds offered through this prospectus. The performance of
each Related Fund does not represent the historical performance of the funds and
should not be interpreted as indicative of the future performance of the funds
or the Related Funds.
FIDELITY DIVIDEND GROWTH FUND
Calendar year total returns 1994 1995 1996 1997
Fidelity Dividend Growth 4.27% 37.53% 30.14% 27.90%
Fund
S&P 500(REGISTEREDTRADEMARK) 1.32% 37.58% 22.96% 33.36%
Lipper Growth Funds -2.17% 30.79% 19.24% 25.30%
Average
Consumer Price Index 2.67% 2.54% 3.32% 1.70%
[GRAPHIC: BAR CHART DESCRIBING FIDELITY DIVIDEND GROWTH FUND CALENDAR YEAR TOTAL
RETURNS FOR THE PERIOD 1994 THROUGH 1997]
1994 4.27%
1995 37.53%
1996 30.14%
1997 27.90%
<PAGE>
<TABLE>
<CAPTION>
FIDELITY RETIREMENT GROWTH FUND
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
Fidelity Retirement Growth 15.53% 30.41% -10.16% 45.58% 10.60% 22.13% 0.06% 24.28% 8.33% 18.54%
Fund
S&P 500(REGISTEREDTRADEMARK) 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96% 33.36%
Lipper Capital Appreciation 14.09% 26.60% -8.24% 39.91% 8.78% 15.68% -3.38% 30.34% 16.32% 20.36%
Funds Average
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32% 1.70%
[GRAPHIC: BAR CHART DESCRIBING FIDELITY RETIREMENT GROWTH FUND CALENDAR YEAR
TOTAL RETURNS FOR THE PERIOD 1988 THROUGH 1997]
1988 15.53%
1989 30.41%
1990 -10.16%
1991 45.58%
1992 10.60%
1993 22.13%
1994 0.06%
1995 24.28%
1996 8.33%
1997 18.54%
FIDELITY ASSET MANAGER: GROWTH FUND
Calendar year total returns 1992 1993 1994 1995 1996 1997
Fidelity Asset Manager: 19.08% 26.32% -7.39% 19.95% 17.59% 26.46%
Growth Fund
Fidelity Aggressive Asset 7.34% 9.95% 0.11% 29.89% 15.74% 25.81%
Allocation Composite Index
S&P 500(REGISTEREDTRADEMARK) 7.62% 10.08% 1.32% 37.58% 22.96% 33.36%
Lipper Flexible Portfolio 7.51% 11.94% -2.65% 25.08% 13.39% 18.69%
Funds Average
Consumer Price Index 2.90% 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
[GRAPHIC: BAR CHART DESCRIBING FIDELITY ASSET MANAGER: GROWTH FUND CALENDAR YEAR
TOTAL RETURNS FOR THE PERIOD 1992 THROUGH 1997]
1992 19.08%
1993 26.32%
1994 -7.39%
1995 19.95%
1996 17.59%
1997 26.46%
2
<PAGE>
THE COMPETITIVE FUNDS average is each fund's Lipper Funds Average which reflects
the performance of mutual funds with similar investment objectives. These
averages, published by Lipper Analytical Services, Inc., exclude the effect of
sales loads.
As of June 30, 1998, the Lipper Growth Funds Average reflects the performance of
884 mutual funds with similar investment objectives; the Lipper Capital
Appreciation Funds Average reflects the performance of 231 mutual funds with
similar investment objectives; and the Lipper Flexible Portfolio Funds Average
reflects the performance of 194 mutual funds with similar investment objectives.
FIDELITY AGGRESSIVE ASSET ALLOCATION COMPOSITE INDEX is a hypothetical
representation of the performance of Fidelity Asset Manager: Growth Fund's three
asset classes according to their respective weightings in the fund's neutral mix
(70% stocks, 25% bonds and 5% short term/money market). The following indexes
are used to calculate the Composite Index: stocks--the Standard & Poor's 500
Index (S&P 500(REGISTEREDTRADEMARK)), bonds--the Lehman Brothers Aggregate Bond
Index, and short-term/money market--the Lehman Brothers 3-Month Treasury Bill
Index. Prior to January 1, 1997, the Lehman Brothers Treasury Bond Index was
used for the bond class. The index weightings of the Composite Index are
rebalanced monthly.
STANDARD & POOR'S 500 INDEX (S&P 500) is a widely recognized, unmanaged index of
common stocks.
LEHMAN BROTHERS AGGREGATE BOND INDEX is a market value weighted performance
benchmark for investment-grade fixed-rate debt issues, including government,
corporate, asset-backed, and mortgage-backed securities, with maturities of at
least one year.
LEHMAN BROTHERS 3-MONTH TREASURY BILL INDEX represents the average of Treasury
Bill rates for each of the prior three months, adjusted to a bond equivalent
yield basis (short-term and money market instruments).
Unlike each fund's returns, the total returns of each comparative index do not
include the effect of any brokerage commissions, transaction fees, or other
costs of investing.
THE CONSUMER PRICE INDEX is a widely recognized measure of inflation calculated
by the U.S. Government.
3
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
SUBJECT TO COMPLETION. PRELIMINARY PROSPECTUS FIDELITY ADVISOR
DATED September 30, 1998. Information
contained herein is subject to completion or DOMESTIC EQUITY FUNDS
amendment. A registration statement relating
to these securities has been filed with the
Securities and Exchange Commission. These
securities may not be sold nor may offers to
buy be accepted prior to the time the INSTITUTIONAL CLASS
registration statement becomes effective.
This prospectus shall not constitute an offer
to sell or the solicitation of an offer to
buy nor shall there be any sale of these
securities in any state in which such offer,
solicitation or sale would be unlawful prior FIDELITY ADVISOR DIVIDEND GROWTH FUND
to registration or qualification under the Fund 717 (Institutional Class)
securities laws of any such state.
FIDELITY ADVISOR RETIREMENT GROWTH FUND
Please read this prospectus before investing, Fund 724 (Institutional Class)
and keep it on file for future reference. It
contains important information, including how FIDELITY ADVISOR ASSET ALLOCATION FUND
each fund invests and the services available Fund 729 (Institutional Class)
to shareholders.
To learn more about each fund and its
investments, you can obtain a copy of the
Statement of Additional Information (SAI)
dated December 14, 1998. The SAI has been
filed with the Securities and Exchange
Commission (SEC) and is available along with FUNDS OF FIDELITY ADVISOR SERIES I
other related materials on the SEC's Internet
Web site (http://www.sec.gov). The SAI is
incorporated herein by reference (legally
forms a part of the prospectus). For a free
copy of the document, contact Fidelity
Distributors Corporation (FDC), 82 Devonshire
Street, Boston, MA 02109, or your investment
professional.
- ---------------------------------------------
MUTUAL FUND SHARES ARE NOT DEPOSITS OR
OBLIGATIONS OF, OR GUARANTEED BY, ANY
DEPOSITORY INSTITUTION. SHARES ARE NOT PROSPECTUS
INSURED BY THE FDIC, FEDERAL RESERVE BOARD OR December 14, 1998
ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS INCLUDING POSSIBLE LOSS OF
PRINCIPAL AMOUNT INVESTED.
- ---------------------------------------------
LIKE ALL MUTUAL FUNDS, THESE SECURITIES HAVE
NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS [GRAPHIC - FIDELITY COMPANY LOGO](REGISTERED)
PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE. 82 Devonshire Street, Boston, MA 02109
ACOMINEW-red-1098
1.708834.100
</TABLE>
<PAGE>
CONTENTS
KEY FACTS WHO MAY WANT TO INVEST
EXPENSES Institutional Class's yearly
operating expenses.
PERFORMANCE
PRIOR PERFORMANCE OF SIMILAR FUNDS
THE FUNDS IN DETAIL CHARTER How each fund is organized.
INVESTMENT PRINCIPLES AND RISKS Each
fund's overall approach to investing.
BREAKDOWN OF EXPENSES How operating costs
are calculated and what they include.
YOUR ACCOUNT TYPES OF ACCOUNTS Different ways to set up
your account, including tax-advantaged
retirement plans.
HOW TO BUY SHARES Opening an account and
making additional investments.
HOW TO SELL SHARES Taking money out and
closing your account.
INVESTOR SERVICES Services to help you
manage your account.
SHAREHOLDER AND ACCOUNT POLICIES DIVIDENDS, CAPITAL GAINS, AND TAXES
TRANSACTION DETAILS Share price
calculations and the timing of purchases
and redemptions.
EXCHANGE RESTRICTIONS
APPENDIX
2
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KEY FACTS
WHO MAY WANT TO INVEST
Institutional Class shares are offered to:
1. Broker-dealer managed account programs that (i) charge an asset-based fee and
(ii) will have at least $1 million invested in the Institutional Class of the
Advisor funds. In addition, employee benefit plans must have at least $50
million in plan assets;
2. Registered investment advisor managed account programs, provided the
registered investment advisor is not part of an organization primarily engaged
in the brokerage business, and the program (i) charges an asset-based fee and
(ii) will have at least $1 million invested in the Institutional Class of the
Advisor funds. In addition, non-employee benefit plan accounts in the program
must be managed on a discretionary basis;
3. Trust institution and bank trust department managed account programs that (i)
charge an asset-based fee and (ii) will have at least $1 million invested in the
Institutional Class of the Advisor funds. Accounts managed by third parties are
not eligible to purchase Institutional Class shares;
4. Insurance company separate accounts that will have at least $1 million
invested in the Institutional Class of the Advisor funds; and
5. Fidelity Trustees and employees.
For purchases made by managed account programs or insurance company separate
accounts, FDC reserves the right to waive the requirement that $1 million be
invested in the Institutional Class of the Advisor funds. Employee benefit plan
investors must meet additional requirements specified in the funds' SAI.
Dividend Growth and Retirement Growth may be appropriate for investors who are
willing to ride out stock market fluctuations in pursuit of potentially high
long-term returns. Dividend Growth is designed for those who consider dividends
to be an indication of a company's growth potential. It is important to note
that Dividend Growth does not invest for income. Retirement Growth is designed
for non-profit organizations and investors in tax-qualified retirement plans and
does not consider the effect of taxes when it buys and sells securities.
Asset Allocation may be appropriate for investors who want to diversify among
stocks, bonds, short-term and money market instruments, and other types of
securities in one fund. If you are looking for a fund that can invest in a wide
range of security types within defined ranges in pursuit of total return, Asset
Allocation may be appropriate for you.
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The value of each fund's investments and, as applicable, the income they
generate vary from day to day, generally reflecting changes in market
conditions, interest rates, and other company, political, and economic news. In
the short term, stock prices can fluctuate dramatically in response to these
factors. Over time, however, stocks have shown greater growth potential than
other types of securities. Investments in foreign securities may involve risks
in addition to those of U.S. investments, including increased political and
economic risk, as well as exposure to currency fluctuations. For Asset
Allocation, performance also depends on FMR's skill in allocating assets.
Each fund is not in itself a balanced investment plan. You should consider your
investment objective and tolerance for risk when making an investment decision.
When you sell your fund shares, they may be worth more or less than what you
paid for them.
Each fund is composed of multiple classes of shares. All classes of a fund have
a common investment objective and investment portfolio. Class A and Class T
shares have a front-end sales charge and pay a distribution fee. Class A and
Class T shares may be subject to a contingent deferred sales charge (CDSC).
Class B and Class C shares do not have a front-end sales charge, but do have a
CDSC, and pay a distribution fee and a shareholder service fee. The performance
of one class of shares of a fund may be different from the performance of
another class of shares of the same fund because of different sales charges and
class expenses. For example, because Institutional Class shares have no sales
charge, and do not pay a distribution fee or a shareholder service fee,
Institutional Class shares are expected to have a higher total return than Class
A, Class T, Class B, or Class C shares.
You may obtain more information about Class A, Class T, Class B, and Class C
shares, which are not offered through this prospectus, by calling 1-800-522-7297
if you are investing through a broker-dealer or insurance representative, or
1-800-843-3001 if you are investing through a bank representative, or from your
investment professional.
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you may pay when you buy or sell
Institutional Class shares of a fund. In addition, you may be charged an annual
account maintenance fee if your account balance falls below $2,500. See
"Transaction Details," page __, for an explanation of how and when these charges
apply.
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Sales charge on purchases and reinvested distributions None
Deferred sales charge on redemptions None
Annual account maintenance fee (for accounts under $2,500) $12.00
ANNUAL OPERATING EXPENSES are paid out of each fund's assets. Each fund pays a
management fee to Fidelity Management & Research Company (FMR). Each fund also
incurs other expenses for services such as maintaining shareholder records and
furnishing shareholder statements and financial reports.
Each class's expenses are factored into its share price or dividends and are not
charged directly to shareholder accounts (see "Breakdown of Expenses" on page
__).
The following figures are based on estimated expenses of Institutional Class of
each fund and are calculated as a percentage of average net assets of
Institutional Class of each fund.
DIVIDEND GROWTH
Management fee 0.59 %[A]
12b-1 fee (Distribution Fee) None
Other expenses 0.37 %[A]
---------------------
Total operating expenses 0.96%
[A] BASED ON ESTIMATED EXPENSES FOR THE
FIRST YEAR.
RETIREMENT GROWTH
Management fee 0.59 %[A]
12b-1 fee (Distribution Fee) None
Other expenses 0.41 %[A]
---------------------
Total operating expenses 1.00%
[A] BASED ON ESTIMATED EXPENSES FOR THE
FIRST YEAR.
ASSET ALLOCATION
Management fee 0.59 %[A]
12b-1 fee (Distribution Fee) None
Other expenses (after reimbursement) 0.91%[A]
---------------------
Total operating expenses 1.50%
[A] BASED ON ESTIMATED EXPENSES FOR THE
FIRST YEAR.
EXPENSE TABLE EXAMPLE: You would pay the following amount in total expenses on a
$1,000 investment in Institutional Class shares of a fund, assuming a 5% annual
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return and full redemption at the end of each time period. Total expenses shown
below include any shareholder transaction expenses and Institutional Class's
annual operating expenses.
DIVIDEND GROWTH
1 Year 3 Years
Institutional Class $10 $31
RETIREMENT GROWTH
1 Year 3 Years
Institutional Class $10 $32
ASSET ALLOCATION
1 Year 3 Years
Institutional Class $15 $47
THESE EXAMPLES ILLUSTRATE THE EFFECT OF EXPENSES, BUT ARE NOT MEANT TO SUGGEST
ACTUAL OR EXPECTED EXPENSES OR RETURNS, ALL OF WHICH MAY VARY.
FMR has voluntarily agreed to reimburse Institutional Class of each fund to the
extent that total operating expenses (excluding interest, taxes, brokerage
commissions and extraordinary expenses), as a percentage of its average net
assets, exceed the following rates:
Effective
Date
Dividend Growth 1.50% 12/14/98
Retirement Growth 1.50% 12/14/98
Asset Allocation 1.50% 12/14/98
If these agreements were not in effect, other expenses and total operating
expenses, as a percentage of average net assets, would be expected to be the
following amounts:
Other Expenses [A] Total Operating Expenses [A]
Dividend Growth + +
Retirement Growth + +
Asset Allocation 1.15% 1.74%
[A] BASED ON ESTIMATED EXPENSES FOR THE FIRST YEAR.
+ TOTAL OPERATING EXPENSES ARE EXPECTED TO BE LESS THAN THE VOLUNTARY EXPENSE
CAPS IN EFFECT DURING THE FISCAL YEAR ENDING
NOVEMBER 30, 1999.
4A
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PERFORMANCE
Mutual fund performance is commonly measured as TOTAL RETURN and/or YIELD.
Performance history will be available for each fund after the funds have been in
operation for six months.
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment over a given period,
assuming reinvestment of any dividends and capital gains. A CUMULATIVE TOTAL
RETURN reflects actual performance over a stated period of time. An AVERAGE
ANNUAL TOTAL RETURN is a hypothetical rate of return that, if achieved annually,
would have produced the same cumulative total return if performance had been
constant over the entire period. Average annual total returns smooth out
variations in performance; they are not the same as actual year-by-year results.
Average annual total returns covering periods of less than one year assume that
performance will remain constant for the rest of the year.
YIELD refers to the income generated by an investment in a fund over a given
period of time, expressed as an annual percentage rate. Yields are calculated
according to a standard that is required for all stock and bond funds. Because
this differs from other accounting methods, the quoted yield may not equal the
income actually paid to shareholders.
Other illustrations of fund performance may show moving averages over specified
periods.
The funds' recent strategies, performance, and holdings are detailed twice a
year in financial reports, which are sent to all shareholders.
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PRIOR PERFORMANCE OF SIMILAR FUNDS
Because the funds were new when this prospectus was printed, they have no
previous operating history. However, Dividend Growth, Retirement Growth, and
Asset Allocation are modeled after the following existing funds, respectively:
Fidelity Dividend Growth Fund, Fidelity Retirement Growth Fund, and Fidelity
Asset Manager: Growth Fund (Related Funds). The Related Funds are managed by FMR
and have investment objectives, policies, and strategies that are substantially
similar to the corresponding funds offered through this prospectus. The Related
Funds, however, have different expenses and are sold through different
distribution channels.
Below you will find information about the prior performance of the Related
Funds, not the performance of the funds offered through this prospectus. The
performance data of the Related Funds is net of advisory fees and other
expenses.
Although the funds have substantially similar investment objectives, policies,
and strategies as the corresponding Related Funds, you should not assume that
the funds offered through this prospectus will have the same performance as the
Related Funds. For example, a fund's future performance may be greater or less
than the performance of the corresponding Related Fund due to, among other
things, differences in sales charges, expenses, asset sizes and cash flows
between the fund and the corresponding Related Fund.
Mutual fund performance is commonly measured as TOTAL RETURN. The total returns
that follow are based on historical results of the Related Funds and do not
reflect the effect of taxes.
The first table below sets forth the corresponding Related Fund of Dividend
Growth, Retirement Growth, and Asset Allocation, the date FMR began managing
each Related Fund, and the asset size of each Related Fund as of August 31,
1998. The next table shows each Related Fund's performance over past periods.
The charts in the Appendix beginning on page __, present calendar year
performance for the Related Funds compared to different measures, including a
competitive funds average.
FUNDS OFFERED THROUGH THIS CORRESPONDING RELATED FUND
PROSPECTUS (INCEPTION DATE AND ASSET SIZE)
Fidelity Advisor Dividend Growth Fund Fidelity Dividend Growth Fund
(April 27, 1993) $ 6,162,431,000
Fidelity Advisor Retirement Growth Fund Fidelity Retirement Growth Fund
(March 25, 1983) $3,549,382,000
Fidelity Advisor Asset Allocation Fund Fidelity Asset Manager: Growth Fund
(December 30, 1991) $ 4,497,340,000
5A
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<TABLE>
<CAPTION>
...................................................................................................................................
CORRESPONDING RELATED FUNDS
Average Annual Total Return* Cumulative Total Return*
10 years/ 10 years/
Past 1 year Past 5 years Life of fund+ Past 1 year Past 5 years Life of fund+
<S> <C> <C> <C> <C> <C> <C>
Fidelity Dividend Growth 34.59% 26.88% 27.50% 34.59% 228.81% 251.83%
Fund #
Fidelity Retirement 29.29% 17.36% 16.12% 29.29% 122.66% 345.69%
Growth Fund #
Fidelity Asset Manager: 23.00% 15.84% 17.00% 23.00% 108.57% 177.57%
Growth Fund #
</TABLE>
* All figures are for periods ending at the most recent calendar quarter
end of the Related Funds (June 30, 1998).
+ Life of fund figures are from commencement of operations for Fidelity
Dividend Growth Fund (April 27, 1993) and Fidelity Asset Manager:
Growth Fund (December 30, 1991) through June 30, 1998.
# For the fiscal year ended July 31, 1998, the total operating expenses
were 0.86% for Fidelity Dividend Growth Fund (including expense
reductions). For the semi-annual period ended April 30, 1998, the total
annualized operating expenses were 0.59% for Fidelity Retirement Growth
Fund (including expense reductions). For the semi-annual period ended
March 31, 1998, the total annualized operating expenses were 0.84% for
Fidelity Asset Manager: Growth Fund (including expense reductions). If
FMR had not reimbursed certain expenses during these periods, Fidelity
Asset Manager: Growth Fund's total returns would have been lower.
5B
<PAGE>
THE FUND IN DETAIL
CHARTER
EACH FUND IS A MUTUAL FUND: an investment that pools shareholders' money and
invests it toward a specified goal. Each fund is a diversified fund of Fidelity
Advisor Series I, an open-end management investment company organized as a
Massachusetts business trust on June 24, 1983.
EACH FUND IS GOVERNED BY A BOARD OF TRUSTEES which is responsible for protecting
the interests of shareholders. The trustees are experienced executives who meet
periodically throughout the year to oversee the funds' activities, review
contractual arrangements with companies that provide services to the funds, and
review the funds' performance. The trustees serve as trustees for other Fidelity
funds. The majority of trustees are not otherwise affiliated with Fidelity.
THE FUNDS MAY HOLD SPECIAL SHAREHOLDER MEETINGS AND MAIL PROXY MATERIALS. These
meetings may be called to elect or remove trustees, change fundamental policies,
approve a management contract, or for other purposes. Shareholders not attending
these meetings are encouraged to vote by proxy. The transfer agent will mail
proxy materials in advance, including a voting card and information about the
proposals to be voted on. The number of votes you are entitled to is based upon
the dollar value of your investment.
Separate votes are taken by each class of shares, fund, or trust, if a matter
affects just that class of shares, fund, or trust, respectively.
FMR AND ITS AFFILIATES
Fidelity Investments(Registered Trademark) is one of the largest investment
management organizations in the United States and has its principal business
address at 82 Devonshire Street, Boston, Massachusetts 02109. It includes a
number of different subsidiaries and divisions which provide a variety of
financial services and products. The funds employ various Fidelity companies to
perform activities required for their operation.
The funds are managed by FMR, which chooses the funds' investments and handles
their business affairs.
Affiliates assist FMR with foreign investments:
o Fidelity Management & Research (U.K.) Inc. (FMR U.K.), in London, England,
serves as a sub-adviser for each fund.
o Fidelity Management & Research Far East Inc. (FMR Far East), in Tokyo, Japan,
serves as a sub-adviser for each fund.
Beginning January 1, 1999, Fidelity Investments Money Management, Inc. (FIMM),
located in Merrimack, New Hampshire, will select certain types of investments
for Asset Allocation.
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As of August 31, 1998, FMR advised funds having approximately 38 million
shareholder accounts with a total value of more than $546 billion.
Charles Mangum is Vice President and manager of Advisor Dividend Growth, which
he has managed since December 1998. He also manages other Fidelity funds. Since
joining Fidelity in 1990, Mr. Mangum has worked as an analyst and manager.
J. Fergus Shiel is Vice President and manager of Advisor Retirement Growth,
which he has managed since December 1998. He also manages other Fidelity funds.
Since joining Fidelity in 1989, Mr. Shiel has worked as an analyst, portfolio
assistant and manager.
Dick Habermann is Vice President and lead manager of Advisor Asset Allocation,
which he has managed since December 1998. He also manages other Fidelity funds.
Mr. Habermann is a Senior Vice President of FMR Co. Previously, he was Division
Head for International Equities and director of International Research from 1993
to 1996, and Joint Chief Strategist for Portfolio Advisory Services(SERVICEMARK)
from 1996 to 1997. Mr. Habermann joined Fidelity in 1968.
Fidelity investment personnel may invest in securities for their own accounts
pursuant to a code of ethics that establishes procedures for personal investing
and restricts certain transactions.
Fidelity Distributors Corporation (FDC) distributes and markets Fidelity's funds
and services.
Fidelity Investments Institutional Operations Company, Inc. (FIIOC) performs
transfer agent servicing functions for Institutional Class of each fund.
FMR Corp. is the ultimate parent company of FMR, FIMM, FMR U.K., and FMR Far
East. Members of the Edward C. Johnson 3d family are the predominant owners of a
class of shares of common stock representing approximately 49% of the voting
power of FMR Corp. Under the Investment Company Act of 1940 (the 1940 Act),
control of a company is presumed where one individual or group of individuals
owns more than 25% of the voting stock of that company; therefore, the Johnson
family may be deemed under the 1940 Act to form a controlling group with respect
to FMR Corp.
FMR may allocate brokerage transactions to its broker-dealer affiliates and in a
manner that takes into account the sale of shares of Fidelity Advisor
Funds(SERVICEMARK), provided that the fund receives brokerage services and
commission rates comparable to those of other broker-dealers.
6A
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INVESTMENT PRINCIPLES AND RISKS
The value of the funds' investments varies in response to many factors. Stock
values fluctuate in response to the activities of individual companies and
general market and economic conditions. The value of bonds and short-term
instruments fluctuates based on changes in interest rates and in the credit
quality of the issuer. Investments in foreign securities may involve risks in
addition to those of U.S. investments, including increased political and
economic risk, as well as exposure to currency fluctuations.
FMR may use various investment techniques to hedge a portion of a fund's risks,
but there is no guarantee that these strategies will work as FMR intends. As a
mutual fund, each fund seeks to spread investment risk by diversifying its
holdings among many companies and industries. When you sell your shares of a
fund, they may be worth more or less than what you paid for them.
FMR normally invests each fund's assets according to its investment strategy.
Each fund also reserves the right to invest without limitation in preferred
stocks and investment-grade debt instruments for temporary, defensive purposes.
DIVIDEND GROWTH seeks capital appreciation by investing primarily in companies
that FMR believes have the potential for dividend growth by either increasing
their dividends or commencing dividends, if none are currently paid. FMR
normally invests at least 65% of the fund's total assets in equity securities of
these companies.
The fund's strategy is based on the premise that dividends are an indication of
a company's financial health and companies that are commencing or increasing
their dividends have an enhanced potential for capital growth. Although the fund
uses income to evaluate its investments, it is important to recognize that the
fund does not invest for income.
RETIREMENT GROWTH seeks capital appreciation by investing substantially in
common stocks, although it may invest in other types of instruments as well. FMR
considers economic, financial, and security trends when choosing the types of
securities the fund will buy. In pursuit of its goal, the fund has the
flexibility to invest in large or small domestic or foreign companies.
The fund may buy securities that provide income. However, it does not place any
emphasis on the income, except when FMR believes this income will have a
favorable influence on the securities' market value. Because the fund is
designed for those in tax-qualified retirement plans and non-profit
organizations, it may realize capital gains without regard to shareholders'
current tax liability.
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ASSET ALLOCATION seeks to maximize total return over the long term by allocating
its assets among stocks, bonds, short-term and money-market instruments, and
other instruments of U.S. and foreign issuers.
The fund allocates its assets among the following classes, or types, of
investments. The STOCK CLASS includes equity securities of all types. The BOND
CLASS includes all varieties of fixed-income securities maturing in more than
one year. The SHORT-TERM/MONEY MARKET CLASS includes all types of short-term and
money market instruments. FMR may use its judgment to place a security in the
most appropriate class based on its investment characteristics. Fixed-income
securities may be classified in the bond or short-term/money market class
according to interest rate sensitivity as well as maturity. The fund may also
make other investments that do not fall within these classes.
FMR has the ability to allocate the fund's assets within specified ranges. The
fund's NEUTRAL MIX represents the benchmark for its combination of investments
in each asset class over time. FMR may change the neutral mix from time to time.
The range and approximate neutral mix for each asset class are shown below:
RANGE NEUTRAL MIX
STOCK CLASS 50-100% 70%
BOND CLASS 0-50% 25%
SHORT-TERM/MONEY MARKET CLASS 0-50% 5%
The fund's aggressive approach focuses on stocks for high potential returns.
However, because the fund can invest in bonds and short-term and money market
instruments, its return may not be as high as a fund that invests only in
stocks.
In pursuit of the fund's objective, FMR will not try to pinpoint the precise
moment when a major reallocation should be made. Instead, FMR regularly reviews
the fund's allocations and makes changes gradually to favor investments that it
believes will provide the most favorable outlook for achieving the fund's
objective. Under normal circumstances, a single reallocation will not involve
more than 20% of the fund's total assets. Although FMR uses its expertise and
resources in allocating assets, FMR's decisions may not be advantageous to the
fund.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of instruments
in which a fund may invest, strategies FMR may employ in pursuit of a fund's
investment objective, and a summary of related risks. Any restrictions listed
7A
<PAGE>
supplement those discussed earlier in this section. A complete listing of each
fund's limitations and more detailed information about each fund's investments
are contained in the funds' SAI. Policies and limitations are considered at the
time of purchase; the sale of instruments is not required in the event of a
subsequent change in circumstances.
FMR may not buy all of these instruments or use all of these techniques unless
it believes that they are consistent with a fund's investment objective and
policies and that doing so will help the fund achieve its goal. Fund holdings
and recent investment strategies are detailed in each fund's financial reports,
which are sent to shareholders twice a year. For a free SAI or financial report,
call your investment professional.
EQUITY SECURITIES may include common stocks and warrants. Common stocks, the
most familiar type, represent an equity (ownership) interest in a corporation.
Although equity securities have a history of long-term growth in value, their
prices fluctuate based on changes in a company's financial condition and on
overall market and economic conditions. Smaller companies are especially
sensitive to these factors.
RESTRICTIONS: With respect to 75% of its total assets, each fund may not invest
in more than 10% of the outstanding voting securities of a single issuer. This
limitation does not apply to securities of other investment companies.
DEBT SECURITIES. Bonds and other debt instruments are used by issuers to borrow
money from investors. The issuer generally pays the investor a fixed, variable,
or floating rate of interest, and must repay the amount borrowed at maturity.
Some debt securities, such as zero coupon bonds, do not pay current interest,
but are sold at a discount from their face values.
Debt securities have varying levels of sensitivity to changes in interest rates
and varying degrees of credit quality. In general, bond prices rise when
interest rates fall, and fall when interest rates rise. Longer-term bonds and
zero coupon bonds are generally more sensitive to interest rate changes.
Lower-quality debt securities are considered to have speculative
characteristics, and involve greater risk of default or price changes due to
changes in the issuer's creditworthiness, or they may already be in default. The
market prices of these securities may fluctuate more than higher-quality
securities and may decline significantly in periods of general or regional
economic difficulty.
RESTRICTIONS: For Dividend Growth and Retirement Growth, purchase of a debt
security is consistent with a fund's debt quality policy if it is rated at or
above the stated level by Moody's Investors Service (Moody's) or rated in the
equivalent categories by Standard & Poor's (S&P), or is unrated but judged to be
of equivalent quality by FMR. Dividend Growth currently intends to limit its
8
<PAGE>
investments in lower than Baa-quality debt securities (sometimes called "junk
bonds") to less than 35% of its assets. Retirement Growth currently intends to
limit its investments in lower than Baa-quality debt securities to 5% of its
assets.
For Asset Allocation, purchase of a debt security is consistent with the fund's
debt quality policy if it is rated at or above the stated level by Moody's, S&P,
Duff & Phelps Credit Rating Co., or Fitch IBCA, Inc., or is unrated but judged
to be of equivalent quality by FMR. Asset Allocation currently intends to limit
its investments in lower than Baa-quality debt securities to less than 35% of
its assets.
DEBT RATINGS
MOODY'S STANDARD &
INVESTORS POOR'S
SERVICE
Rating Rating
INVESTMENT GRADE
Highest quality Aaa AAA
High quality Aa AA
Upper-medium grade A A
Medium grade Baa BBB
LOWER QUALITY
Moderately speculative Ba BB
Speculative B B
Highly speculative Caa CCC
Poor quality Ca CC
Lowest quality, no interest C C
In default, in arrears -- D
REFER TO THE FUNDS' SAI FOR A MORE COMPLETE DISCUSSION OF THESE RATINGS.
EACH FUND DOES NOT NECESSARILY RELY ON THE RATINGS OF MOODY'S OR S&P TO
DETERMINE COMPLIANCE WITH ITS DEBT QUALITY POLICY.
MONEY MARKET SECURITIES are high-quality, short-term instruments issued by the
U.S. Government, corporations, financial institutions, and other entities. These
securities may carry fixed, variable, or floating interest rates.
EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies, and
securities issued by U.S. entities with substantial foreign operations may
involve additional risks and considerations. These include risks relating to
political, economic, or regulatory conditions in foreign countries; fluctuations
in foreign currencies; withholding or other taxes; trading, settlement,
custodial, and other operational risks; and the potentially less stringent
8A
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investor protection and disclosure standards of foreign markets. Additionally,
governmental issuers of foreign debt securities may be unwilling to pay interest
and repay principal when due and may require that the conditions for payment be
renegotiated. All of these factors can make foreign investments, especially
those in emerging markets, more volatile and potentially less liquid than U.S.
investments.
ASSET-BACKED SECURITIES include interests in pools of debt securities,
commercial or consumer loans, or other receivables. The value of these
securities depends on many factors, including changes in interest rates, the
availability of information concerning the pool and its structure, the credit
quality of the underlying assets, the market's perception of the servicer of the
pool, and any credit enhancement provided. In addition, these securities may be
subject to prepayment risk.
MORTGAGE SECURITIES include interests in pools of commercial or residential
mortgages, and may include complex instruments such as collateralized mortgage
obligations and stripped mortgage-backed securities. Mortgage securities may be
issued by agencies or instrumentalities of the U.S. Government or by private
entities.
The price of a mortgage security may be significantly affected by changes in
interest rates. Some mortgage securities may have a structure that makes their
reaction to interest rates and other factors difficult to predict, making their
price highly volatile. Also, mortgage securities, especially stripped
mortgage-backed securities, are subject to prepayment risk. Securities subject
to prepayment risk generally offer less potential for gains during a declining
interest rate environment, and similar or greater potential for loss in a rising
interest rate environment.
STRIPPED SECURITIES are the separate income or principal components of a debt
security. The risks associated with stripped securities are similar to those of
other debt securities, although stripped securities may be more volatile, and
the value of certain types of stripped securities may move in the same direction
as interest rates. U.S. Treasury securities that have been stripped by a Federal
Reserve Bank are obligations issued by the U.S. Treasury.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund buys a security at one
price and simultaneously agrees to sell it back at a higher price. Delays or
losses could result if the other party to the agreement defaults or becomes
insolvent.
ADJUSTING INVESTMENT EXPOSURE. A fund can use various techniques to increase or
decrease its exposure to changing security prices, interest rates, currency
9
<PAGE>
exchange rates, commodity prices, or other factors that affect security values.
These techniques may involve derivative transactions such as buying and selling
options and futures contracts, entering into currency exchange contracts or swap
agreements, purchasing indexed securities, and selling securities short.
FMR can use these practices to adjust the risk and return characteristics of a
fund's portfolio of investments. If FMR judges market conditions incorrectly or
employs a strategy that does not correlate well with a fund's investments, these
techniques could result in a loss, regardless of whether the intent was to
reduce risk or increase return. These techniques may increase the volatility of
a fund and may involve a small investment of cash relative to the magnitude of
the risk assumed. In addition, these techniques could result in a loss if the
counterparty to the transaction does not perform as promised.
DIRECT DEBT. Loans and other direct debt instruments are interests in amounts
owed to another party by a company, government, or other borrower. They have
additional risks beyond conventional debt securities because they may entail
less legal protection for a fund, or there may be a requirement that the fund
supply additional cash to a borrower on demand.
ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined by FMR,
under the supervision of the Board of Trustees, to be illiquid, which means that
they may be difficult to sell promptly at an acceptable price. The sale of some
illiquid securities, and some other securities, may be subject to legal
restrictions. Difficulty in selling securities may result in a loss or may be
costly to a fund.
RESTRICTIONS: A fund may not invest more than 10% of its assets in illiquid
securities.
WHEN-ISSUED AND FORWARD PURCHASE OR SALE TRANSACTIONS are trading practices in
which payment and delivery for the security take place at a later date than is
customary for that type of security. The market value of the security could
change during this period.
OTHER INSTRUMENTS may include securities of closed-end investment companies,
convertible securities, preferred stocks, and real estate-related instruments.
CASH MANAGEMENT. A fund may invest in money market securities, in repurchase
agreements, and in a money market fund available only to funds and accounts
managed by FMR or its affiliates, whose goal is to seek a high level of current
income while maintaining a stable $1.00 share price. A major change in interest
rates or a default on the money market fund's investments could cause its share
price to change.
9A
<PAGE>
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce the risks
of investing. This may include limiting the amount of money invested in any one
issuer or, on a broader scale, in any one industry. Economic, business, or
political changes can affect all securities of a similar type.
RESTRICTIONS: With respect to 75% of its total assets, each fund may not invest
more than 5% in the securities of any one issuer. This limitation does not apply
to U.S. Government securities or to securities of other investment companies.
Each fund may not invest more than 25% of its total assets in any one industry.
This limitation does not apply to U.S. Government securities.
BORROWING. Each fund may borrow from banks or from other funds advised by FMR or
its affiliates, or through reverse repurchase agreements. If a fund borrows
money, its share price may be subject to greater fluctuation until the borrowing
is paid off. If a fund makes additional investments while borrowings are
outstanding, this may be considered a form of leverage.
RESTRICTIONS: Each fund may borrow only for temporary or emergency purposes, but
not in an amount exceeding 33 1/3% of its total assets.
LENDING securities to broker-dealers and institutions, including Fidelity
Brokerage Services, Inc. (FBSI), an affiliate of FMR, is a means of earning
income. This practice could result in a loss or a delay in recovering a fund's
securities. A fund may also lend money to other funds advised by FMR or its
affiliates.
RESTRICTIONS: Loans, in the aggregate, may not exceed 33 1/3% of a fund's total
assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages are
fundamental, that is, subject to change only by shareholder approval. The
following paragraphs restate all those that are fundamental. All policies stated
throughout this prospectus, other than those identified in the following
paragraphs, can be changed without shareholder approval.
DIVIDEND GROWTH seeks capital appreciation.
RETIREMENT GROWTH seeks capital appreciation.
ASSET ALLOCATION seeks to maximize total return over the long term by allocating
its assets among stocks, bonds, short-term instruments, and other investments.
With respect to 75% of its total assets, each fund may not invest more than 5%
in the securities of any one issuer and may not invest in more than 10% of the
10
<PAGE>
outstanding voting securities of a single issuer. These limitations do not apply
to U.S. Government securities or to securities of other investment companies.
Each fund may not invest more than 25% of its total assets in any one industry.
This limitation does not apply to U.S. Government securities.
Each fund may borrow only for temporary or emergency purposes, but not in an
amount exceeding 33 1/3% of its total assets.
Loans, in the aggregate, may not exceed 33 1/3% of a fund's total assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, each fund pays fees related to its daily operations.
Expenses paid out of Institutional Class's assets are reflected in its share
price or dividends; they are neither billed directly to shareholders nor
deducted from shareholder accounts.
Each fund pays a MANAGEMENT FEE to FMR for managing its investments and business
affairs. FMR in turn pays fees to affiliates who provide assistance with these
services. Each fund also pays OTHER EXPENSES, which are explained on page __.
FMR may, from time to time, agree to reimburse each class for management fees
and other expenses above a specified limit. FMR retains the ability to be repaid
by a class if expenses fall below the specified limit prior to the end of the
fiscal year. Reimbursement arrangements, which may be terminated at any time
without notice, can decrease a class's expenses and boost its performance.
MANAGEMENT FEE
The management fee is calculated and paid to FMR every month. The fee is
calculated by adding a group fee rate to an individual fund fee rate, dividing
by twelve, and multiplying the result by the fund's average net assets
throughout the month.
The group fee rate is based on the average net assets of all the mutual funds
advised by FMR. This rate cannot rise above 0.52%, and it drops as total assets
under management increase.
For August 1998, the group fee rate was 0.2892%. The individual fund fee rate is
0.30% for each fund.
FMR HAS SUB-ADVISORY AGREEMENTS with FMR U.K. and FMR Far East. These
sub-advisers provide FMR with investment research and advice on issuers based
outside the United States. Under the sub-advisory agreements, FMR pays FMR U.K.
10A
<PAGE>
and FMR Far East fees equal to 110% and 105%, respectively, of the costs of
providing these services.
The sub-advisers may also provide investment management services. In return, FMR
pays FMR U.K. and FMR Far East a fee equal to 50% of its management fee rate
with respect to the fund's investments that the sub-adviser manages on a
discretionary basis.
Beginning January 1, 1999, FIMM will select certain investments for Asset
Allocation. FMR will pay FIMM a fee equal to 50% of its management fee (before
expense reimbursements) with respect to the fund's investments that FIMM
manages.
OTHER EXPENSES
While the management fee is a significant component of each fund's annual
operating costs, the funds have other expenses as well.
FIIOC performs transfer agency, dividend disbursing and shareholder servicing
functions for the Institutional Class of each fund. Fidelity Service Company,
Inc. (FSC) calculates the net asset value per share (NAV) and dividends for the
Institutional Class of each fund, maintains the general accounting records for
each fund, and administers the securities lending program for each fund.
Each fund pays other expenses, such as legal, audit, and custodian fees; in some
instances, proxy solicitation costs; and the compensation of trustees who are
not affiliated with Fidelity. A broker-dealer may use a portion of the
commissions paid by a fund to reduce that fund's custodian or transfer agent
fees.
The Institutional Class of each fund has adopted a DISTRIBUTION AND SERVICE
PLAN. Each plan recognizes that FMR may use its management fee revenues, as well
as its past profits or its resources from any other source, to pay FDC for
expenses incurred in connection with the distribution of Institutional Class
shares. FMR, directly or through FDC, may make payments to third parties, such
as banks or broker-dealers, that engage in the sale of, or provide shareholder
support services for, Institutional Class shares. Currently, the Board of
Trustees of each fund has authorized such payments.
The funds' portfolio turnover rates will vary from year to year. High turnover
rates increase transaction costs and may increase taxable capital gains. FMR
considers these effects when evaluating the anticipated benefits of short-term
investing.
11
<PAGE>
YOUR ACCOUNT
TYPES OF ACCOUNTS
When you invest through an investment professional, your investment
professional, including a broker-dealer or financial institution, may charge you
a transaction fee with respect to the purchase and sale of fund shares. Read
your investment professional's program materials in conjunction with this
prospectus for additional service features or fees that may apply. Certain
features of the funds, such as minimum initial or subsequent investment amounts,
may be modified.
The different ways to set up (register) your account with Fidelity are listed at
right.
The account guidelines that follow may not apply to certain retirement accounts.
If you are investing through a retirement account or if your employer offers the
funds through a retirement program, you may be subject to additional fees. For
more information, please refer to your program materials, contact your employer,
or call your retirement benefits number or your investment professional
directly, as appropriate.
12
<PAGE>
WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
Individual accounts are owned by one person. Joint accounts can have two or more
owners (tenants).
- --------------------------------------------------------------------------------
RETIREMENT
FOR TAX-ADVANTAGED RETIREMENT SAVINGS
Retirement plans provide individuals with tax-advantaged ways to save for
retirement, either with tax-deductible contributions or tax-free growth.
Retirement accounts require special applications and typically have lower
minimums.
o TRADITIONAL INDIVIDUAL RETIREMENT ACCOUNTS (IRAS) allow individuals under age
70 1/2 with compensation to contribute up to $2,000 per tax year. Married
couples can contribute up to $4,000 per tax year, provided no more than $2,000
is contributed on behalf of either spouse. (These limits are aggregate for
Traditional and Roth IRAs.) Contributions may be tax-deductible, subject to
certain income limits.
o ROTH IRAS allow individuals to make non-deductible contributions of up to
$2,000 per tax year. Married couples can contribute up to $4,000 per tax year,
provided no more than $2,000 is contributed on behalf of either spouse. (These
limits are aggregate for Traditional and Roth IRAs.) Eligibility is subject to
certain income limits. Qualified distributions are tax-free.
o ROTH CONVERSION IRAS allow individuals with assets held in a Traditional IRA
or Rollover IRA to convert those assets to a Roth Conversion IRA. Eligibility is
subject to certain income limits. Qualified distributions are tax-free.
o ROLLOVER IRAS help retain special tax advantages for certain eligible rollover
distributions from employer-sponsored retirement plans.
o 401(K) PLANS, and certain other 401(a)-qualified plans, are employer-sponsored
retirement plans that allow employer contributions and may allow employee
after-tax contributions. In addition, 401(k) plans allow employee pre-tax
(tax-deferred) contributions. Contributions to these plans may be tax-deductible
to the employer.
o KEOGH PLANS are generally profit sharing or money purchase pension plans that
allow self-employed individuals or small business owners to make tax-deductible
contributions for themselves and any eligible employees.
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o SIMPLE IRAS provide small business owners and those with self-employment
income (and their eligible employees) with many of the advantages of a 401(k)
plan, but with fewer administrative requirements.
o SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS) provide small business owners or
those with self-employment income (and their eligible employees) with many of
the same advantages as a Keogh, but with fewer administrative requirements.
o SALARY REDUCTION SEP-IRAS (SARSEPS) allow employees of businesses with 25 or
fewer employees to contribute a percentage of their wages on a tax-deferred
basis. These plans must have been established by the employer prior to January
1, 1997.
- --------------------------------------------------------------------------------
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
These custodial accounts provide a way to give money to a child and obtain tax
benefits. An individual can give up to $10,000 a year per child without paying
federal gift tax. Depending on state laws, you can set up a custodial account
under the Uniform Gifts to Minors Act (UGMA) or the Uniform Transfers to Minors
Act (UTMA). Contact your investment professional.
- --------------------------------------------------------------------------------
TRUST
FOR MONEY BEING INVESTED BY A TRUST
The trust must be established before an account can be opened.
- --------------------------------------------------------------------------------
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR OTHER
GROUPS
Contact your investment professional.
13
<PAGE>
HOW TO BUY SHARES
THE PRICE TO BUY ONE SHARE of Institutional Class is the class's net asset value
per share (NAV). Institutional Class shares are sold without a sales charge.
Your shares will be purchased at the next NAV calculated after your order is
received in proper form. Institutional Class's NAV is normally calculated each
business day at 4:00 p.m. Eastern time.
Short-term or excessive trading into and out of a fund may harm fund performance
by disrupting portfolio management strategies and by increasing fund expenses.
Accordingly, each fund may reject any purchase orders, including exchanges,
particularly from market timers or investors who, in FMR's opinion, have a
pattern of short-term or excessive trading or whose trading has been or may be
disruptive to the fund. For these purposes, FMR may consider an investor's
trading history in a fund or other Fidelity funds, and accounts under common
ownership or control.
It is the responsibility of your investment professional to transmit your order
to buy shares to the transfer agent before the close of business on the day you
place your order.
Fidelity must receive payment within three business days after an order for
shares is placed; otherwise your purchase order may be canceled and you could be
held liable for resulting fees and/or losses.
Share certificates are not available for Institutional Class shares.
IF YOU ARE NEW TO THE FIDELITY ADVISOR FUNDS, complete and sign an account
application and mail it along with your check. You may also open your account by
wire as described on page __. If there is no account application accompanying
this prospectus, call your investment professional or, if you are investing
through a broker-dealer or insurance representative, call 1-800-522-7297 or, if
you are investing through a bank representative, call 1-800-843-3001.
If you are investing through a tax-advantaged retirement plan, such as an IRA,
for the first time, you will need a special application. Contact your investment
professional for more information and a retirement account application.
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY ADVISOR FUND, you can:
o Mail an account application with a check,
o Place an order and wire money into your account,
o Open your account by exchanging from the same class of another Fidelity
Advisor fund or from another Fidelity fund,
or
o Contact your investment professional.
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<PAGE>
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $ 2,500
For certain Fidelity Advisor retirement accounts++ $ 500
Through regular investment plans* $ 1,000
TO ADD TO AN ACCOUNT $ 250
For certain Fidelity Advisor retirement accounts++ $ 100
Through regular investment plans* $ 100
MINIMUM BALANCE $ 1,000
For certain Fidelity Advisor retirement accounts++ None
++ THESE LOWER MINIMUMS APPLY TO FIDELITY ADVISOR TRADITIONAL IRA, ROTH IRA,
ROTH CONVERSION IRA, ROLLOVER IRA, SEP-IRA, AND KEOGH ACCOUNTS.
*AN ACCOUNT MAY BE OPENED WITH A MINIMUM OF $1,000, PROVIDED THAT A REGULAR
INVESTMENT PLAN IS ESTABLISHED AT THE TIME THE ACCOUNT IS OPENED. FOR MORE
INFORMATION ABOUT REGULAR INVESTMENT PLANS, PLEASE REFER TO "INVESTOR SERVICES,"
PAGE __.
There is no minimum account balance or initial or subsequent investment minimum
for certain Fidelity retirement accounts funded through salary deduction, or
accounts opened with the proceeds of distributions from such retirement
accounts. Refer to the program materials for details. In addition, each fund
reserves the right to waive or lower investment minimums in other circumstances.
For further information on opening an account, please consult your investment
professional or refer to the account application.
14A
<PAGE>
<TABLE>
<CAPTION>
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<S> <C> <C>
TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT
PHONE o Exchange from the same class of another o Exchange from the same class of another
If you are investing through a Fidelity Advisor fund or from another Fidelity Advisor fund or from another
broker-dealer or insurance repre- Fidelity fund account with the same Fidelity fund account with the same
sentative, call 1-800-522-7297; if registration, including name, address, registration, including name, address, and
you are investing through a bank and taxpayer ID number. taxpayer ID number.
representative, call 1-800-843-3001; or
call your investment
professional.
[GRAPHIC-TELEPHONE]
- ------------------------------------------------------------------------------------------------------------------------------------
MAIL o Complete and sign the account o Make your check payable to the complete
[GRAPHIC-ENVELOPE] appli-cation. Make your check payable to name of the fund of your choice and note
the complete name of the fund of your the applicable class. Indicate your fund
choice and note the applicable class. account number on your check and mail to
Mail to the address indicated on the the address printed on your account
application. statement.
o Exchange by mail: if you are investing
through a broker-dealer or insurance
representative, call 1-800-522-7297; if
you are investing through a bank
representative, call 1-800-843-3001; or
call your investment professional for
instructions.
- ------------------------------------------------------------------------------------------------------------------------------------
IN PERSON o Bring your account application and check o Bring your check to your investment
[GRAPHIC-HAND WITH LETTER] to your investment professional. professional.
- ------------------------------------------------------------------------------------------------------------------------------------
WIRE o If you are investing through a o Not available for retirement accounts.
[GRAPHIC-WIRE SYMBOL] broker-dealer or insurance representative,
call 1-800-522-7297 or, if you are o Wire to:
investing through a bank representative, Banker's Trust Co.
call 1-800-843-3001 to set up your Routing # 021001033
account and arrange a wire Fidelity DART Depository
transaction. Not availabe for retirement Account #00159759
accounts. FBO: (account name)
(account number)
o Wire to:
Banker's Trust Co. Specify the complete name of the fund of
Routing #021001033 your choice, note the applicable class and
Fidelity DART Depository include your account number and your
Account #00159759 name.
FBO: (account name)
(account number)
Specify the complete name of the fund of
your choice, note the applicable class and
include your account number and your
name.
- ------------------------------------------------------------------------------------------------------------------------------------
AUTOMATICALLY o Not available. o Use Fidelity Advisor Systematic Investment
[GRAPHIC-CALENDAR] Program. Sign up for this service when
opening your account, or call your
investment professional to begin the
program.
</TABLE>
15
<PAGE>
HOW TO SELL SHARES
You can arrange to take money out of your fund account at any time by selling
(redeeming) some or all of your shares.
THE PRICE TO SELL ONE SHARE of Institutional Class is the class's NAV.
Your shares will be sold at the next NAV calculated after your order is received
in proper form. Institutional Class's NAV is normally calculated each business
day at 4:00 p.m. Eastern time.
It is the responsibility of your investment professional to transmit your order
to sell shares to Fidelity before the close of business on the day you place
your order.
TO SELL SHARES IN A NON-RETIREMENT ACCOUNT, you may use any of the methods
described on these two pages.
TO SELL SHARES IN A FIDELITY ADVISOR RETIREMENT ACCOUNT, your request must be
made in writing, except for exchanges to shares of the same class of another
Fidelity Advisor fund or shares of other Fidelity funds, which can be requested
by phone or in writing.
IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR SHARES, leave at least $1,000 worth
of shares in the account to keep it open (account minimum balances do not apply
to retirement and Fidelity Defined Trust accounts).
TO SELL SHARES BY BANK WIRE, you will need to sign up for this service in
advance.
CERTAIN REQUESTS MUST INCLUDE A SIGNATURE GUARANTEE. It is designed to protect
you and Fidelity from fraud. Your request must be made in writing and include a
signature guarantee if any of the following situations apply:
o You wish to redeem more than $100,000 worth of shares,
o Your account registration has changed within the last 30 days,
o The check is being mailed to a different address than the one on your account
(record address),
o The check is being made payable to someone other than the account owner,
o The redemption proceeds are being transferred to a Fidelity Advisor account
with a different registration,
o You wish to set up the bank wire feature, or
o You wish to have redemption proceeds wired to a non-predesignated bank
account.
You should be able to obtain a signature guarantee from a bank, broker, dealer,
credit union (if authorized under state law), securities exchange or
association, clearing agency, or savings association. A notary public cannot
provide a signature guarantee.
16
<PAGE>
SELLING SHARES IN WRITING
Write a "letter of instruction" with:
o Your name,
o The fund's name,
o The applicable class name,
o Your fund account number,
o The dollar amount or number of shares to be redeemed,
and
o Any other applicable requirements listed in the table on page __.
Deliver your letter to your investment professional, or mail it to the following
address:
Fidelity Investments
P.O. Box 770002
Cincinnati, OH 45277-0081
Unless otherwise instructed, Fidelity will send a check to the record address.
16A
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
ACCOUNT TYPE SPECIAL REQUIREMENTS
PHONE
If you are investing through a broker- All account types except retirement o Maximum check request: $100,000.
dealer or insurance representative, call
1-800-522-7297; if you are investing All account types o You may exchange to the same class of
through a bank representative, call other Fidelity Advisor funds or to other
1-800-843-3001; or call your registered with the same name(s),
investment professional. address, and taxpayer ID number.
[GRAPHIC-TELEPHONE]
- ----------------------------------------------------------------------------------------------------------------------------------
MAIL Individual, Joint Tenant, Sole o The letter of instruction must be
[GRAPHIC-ENVELOPE] Proprietorship, UGMA, UTMA signed by all persons required to sign
for transactions, exactly as their
names appear on the account.
Retirement account o The account owner should complete a
retirement distribution form. If you
are investing through a broker-dealer
or insurance representative, call
1-800-522-7297; if you are investing
through a bank representative, call
1-800-843-3001; or call your
investment professional to request one.
Trust o The trustee must sign the letter
indicating capacity as trustee. If the
trustee's name is not in the account
registration, provide a copy of the
trust document certified within the
last 60 days.
Business or Organization o Atleast one person authorized by
corporate resolution to act on the
account must sign the letter.
Executor, Administrator, o If you are investing through a
Conservator/Guardian broker-dealer or insurance
representative, call 1-800-522-7297;
if you are investing through a
bank representative, call
1-800-843-3001; or call your investment
professional for instructions.
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WIRE All account types except retirement o You must sign up for the wire feature
[GRAPHIC-WIRE SYMBOL] before using it. To verify that it is
in place, if you are investing through
a broker-dealer or insurance
representative, call 1-800-522-7297;
if you are investing through a bank
representative, call 1-800-843-3001;
or call your investment professional.
Minimum wire: $500.
o Your wire redemption request must be
received in proper form by the transfer
agent before 4:00 p.m. Eastern time
for money to be wired on the next
business day.
17
</TABLE>
<PAGE>
INVESTOR SERVICES
Fidelity Advisor funds provide a variety of services to help you manage your
account.
INFORMATION SERVICES
STATEMENTS AND REPORTS that Fidelity sends to you include the following:
o Confirmation statements (after every transaction, except a reinvestment, that
affects your account balance or your account registration)
o Account statements (quarterly)
o Financial reports (every six months)
To reduce expenses, only one copy of most financial reports and prospectuses
will be mailed, even if you have more than one account in a fund. Call your
investment professional if you need additional copies of financial reports and
prospectuses.
TRANSACTION SERVICES
EXCHANGE PRIVILEGE. You may sell your Institutional Class shares and buy
Institutional Class shares of other Fidelity Advisor funds or shares of other
Fidelity funds by telephone or in writing.
Note that exchanges out of a fund are limited to four per calendar year, and
that they may have tax consequences for you. For details on policies and
restrictions governing exchanges, including circumstances under which a
shareholder's exchange privilege may be suspended or revoked, see "Exchange
Restrictions," page __.
FIDELITY ADVISOR SYSTEMATIC WITHDRAWAL PROGRAM lets you set up periodic
redemptions from your account. Accounts with a value of $10,000 or more
Institutional Class shares are eligible for this program.
One easy way to pursue your financial goals is to invest money regularly.
Fidelity Advisor funds offer convenient services that let you transfer money
into your fund account, or between fund accounts, automatically. While regular
investment plans do not guarantee a profit and will not protect you against loss
in a declining market, they can be an excellent way to invest for retirement, a
home, educational expenses, and other long-term financial goals. Certain
restrictions apply for retirement accounts. Call your investment professional
for more information.
18
<PAGE>
<TABLE>
<CAPTION>
REGULAR INVESTMENT PLAN
FIDELITY ADVISOR SYSTEMATIC INVESTMENT PROGRAM
TO MOVE MONEY FROM YOUR BANK ACCOUNT TO A FIDELITY ADVISOR FUND
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<S> <C> <C> <C>
MINIMUM MINIMUM FREQUENCY SETTING UP OR CHANGING
INITIAL ADDITIONAL Monthly, bimonthly, o For a new account, complete the appropriate section on the
$1,000 $100 quarterly, application.
or semi-annually
o For existing accounts, call your investment professional for an
application.
o To change the amount or frequency of your investment, contact your
investment professional directly or, if you purchased your shares
through a broker-dealer or insurance representative, call
1-800-522-7297. If you purchased your shares through a bank
representative, call 1-800-843-3001. Call at least 10 business days
prior to your next scheduled investment date (20 business days if you
purchased your shares through a bank).
18A
</TABLE>
<PAGE>
SHAREHOLDER AND ACCOUNT POLICIES
DIVIDENDS, CAPITAL GAINS, AND TAXES
Each fund distributes substantially all of its net investment income and capital
gains to shareholders each year. Normally, dividends are distributed in December
and January. Capital gains are normally distributed in December and each fund
may pay additional capital gains after the close of its fiscal year.
DISTRIBUTION OPTIONS
When you open an account, specify on your account application how you want to
receive your distributions. The funds offer four options:
1. REINVESTMENT OPTION. Your dividend and capital gain distributions will be
automatically reinvested in additional shares of the same class of the fund. If
you do not indicate a choice on your application, you will be assigned this
option.
2. INCOME-EARNED OPTION. Your capital gain distributions will be automatically
reinvested in additional shares of the same class of the fund, but you will be
sent a check for each dividend distribution.
3. CASH OPTION. You will be sent a check for your dividend and capital gain
distributions.
4. DIRECTED DIVIDENDS(Registered Trademark) PROGRAM. Your dividend distributions
will be automatically invested in the same class of shares of another
identically registered Fidelity Advisor fund. You will be sent a check for your
capital gain distributions or your capital gain distributions will be
automatically reinvested in additional shares of the same class of the fund.
If you select distribution option 2, 3 or 4 and the U.S. Postal Service does not
deliver your checks, your election may be converted to the Reinvestment Option.
You will not receive interest on amounts represented by uncashed distribution
checks. To change your distribution option, call your investment professional
directly or, if you purchased your shares through a broker-dealer or insurance
representative, call 1-800-522-7297. If you purchased your shares through a bank
representative, call 1-800-843-3001.
When Institutional Class deducts a distribution from its NAV, the reinvestment
price is the class's NAV at the close of business that day. Distribution checks
will be mailed within seven days.
TAXES
As with any investment, you should consider how your investment in a fund will
be taxed. If your account is not a tax-advantaged retirement account, you should
be aware of these tax implications.
19
<PAGE>
TAXES ON DISTRIBUTIONS. Distributions are subject to federal income tax, and may
also be subject to state or local taxes. If you live outside the United States,
your distributions could also be taxed by the country in which you reside. Your
distributions are taxable when they are paid, whether you take them in cash or
reinvest them. However, distributions declared in December and paid in January
are taxable as if they were paid on December 31.
For federal tax purposes, each fund's income and short-term capital gains are
distributed as dividends and taxed as ordinary income; capital gain
distributions are taxed as long-term capital gains.
Every January, Fidelity will send you and the IRS a statement showing the tax
characterization of distributions paid to you in the previous year.
TAXES ON TRANSACTIONS. Your redemptions - including exchanges - are subject to
capital gains tax. A capital gain or loss is the difference between the cost of
your shares and the price you receive when you sell them.
Whenever you sell shares of a fund, Fidelity will send you a confirmation
statement showing how many shares you sold and at what price.
You will also receive a consolidated transaction statement at least quarterly.
However, it is up to you or your tax preparer to determine whether this sale
resulted in a capital gain and, if so, the amount of tax to be paid. BE SURE TO
KEEP YOUR REGULAR ACCOUNT STATEMENTS; the information they contain will be
essential in calculating the amount of your capital gains.
"BUYING A DIVIDEND." If you buy shares when a class has realized but not yet
distributed income or capital gains, you will pay the full price for the shares
and then receive a portion of the price back in the form of a taxable
distribution.
CURRENCY CONSIDERATIONS. If a fund's dividends exceed its taxable income in any
year, which is sometimes the result of currency-related losses, all or a portion
of the fund's dividends may be treated as a return of capital to shareholders
for tax purposes. To minimize the risk of a return of capital, a fund may adjust
its dividends to take currency fluctuation into account, which may cause the
dividends to vary. Any return of capital will reduce the cost basis of your
shares, which will result in a higher reported capital gain or a lower report
capital loss when you sell your shares. The statement you receive in January
will specify if any distributions included a return of capital.
EFFECT OF FOREIGN TAXES. Foreign governments may impose taxes on a fund and its
investments, and these taxes generally will reduce a fund's distributions.
However, if you meet certain holding period requirements with respect to your
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<PAGE>
fund shares, an offsetting tax credit may be available to you. If you do not
meet such holding period requirements, you may still be entitled to a deduction
for certain foreign taxes. In either case, your tax statement will show more
taxable income or capital gains than were actually distributed by the fund, but
will also show the amount of the available offsetting credit or deduction.
There are tax requirements that all funds must follow in order to avoid federal
taxation. In its effort to adhere to these requirements, a fund may have to
limit its investment activity in some types of instruments.
TRANSACTION DETAILS
THE FUNDS ARE OPEN FOR BUSINESS each day the New York Stock Exchange (NYSE) is
open. FSC normally calculates Institutional Class's NAV as of the close of
business of the NYSE, normally 4:00 p.m. Eastern time.
A CLASS'S NAV is the value of a single share. The NAV of each class is computed
by adding that class's pro rata share of the value of the applicable fund's
investments, cash, and other assets, subtracting that class's pro rata share of
the value of the applicable fund's liabilities, subtracting the liabilities
allocated to that class, and dividing the result by the number of shares of that
class that are outstanding.
Each fund's assets are valued primarily on the basis of market quotations.
Short-term securities with remaining maturities of sixty days or less for which
quotations are not readily available are valued on the basis of amortized cost.
This method minimizes the effect of changes in a security's market value.
Foreign securities are valued on the basis of quotations from the primary market
in which they are traded, and are translated from the local currency into U.S.
dollars using current exchange rates. In addition, if quotations are not readily
available, or if the values have been materially affected by events occurring
after the closing of a foreign market, assets may be valued by another method
that the Board of Trustees believes accurately reflects fair value.
WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to certify that your
social security or taxpayer identification number is correct and that you are
not subject to 31% backup withholding for failing to report income to the IRS.
If you violate IRS regulations, the IRS can require a fund to withhold 31% of
your taxable distributions and redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE OR ELECTRONICALLY. Fidelity will
not be responsible for any losses resulting from unauthorized transactions if it
follows reasonable security procedures designed to verify the identity of the
investor. Fidelity will request personalized security codes or other
information, and may also record calls. For transactions conducted through the
Internet, Fidelity recommends the use of an Internet browser with 128-bit
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<PAGE>
encryption. You should verify the accuracy of your confirmation statements
immediately after you receive them. If you do not want the ability to redeem and
exchange by telephone, call Fidelity for instructions. Additional documentation
may be required from corporations, associations, and certain fiduciaries.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during periods of
unusual market activity), consider placing your order by mail.
EACH FUND RESERVES THE RIGHT to suspend the offering of shares for a period of
time.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your shares will be purchased at the next
NAV calculated after your order is received in proper form. Note the following:
o All of your purchases must be made in U.S. dollars and checks must be drawn on
U.S. banks.
o Fidelity does not accept cash.
o When making a purchase with more than one check, each check must have a value
of at least $50.
o Each fund reserves the right to limit the number of checks processed at one
time.
o If your check does not clear, your purchase will be canceled and you could be
liable for any losses or fees a fund or Fidelity has incurred.
AUTOMATED PURCHASE ORDERS. Institutional Class shares can be purchased or sold
through investment professionals utilizing an automated order placement and
settlement system that guarantees payment for orders on a specified date.
CONFIRMED PURCHASES. Certain financial institutions that meet FDC's
creditworthiness criteria may enter confirmed purchase orders on behalf of
customers by phone, with payment to follow no later than close of business on
the next business day. If payment is not received by the next business day, the
order will be canceled and the financial institution will be liable for any
losses.
TO AVOID THE COLLECTION PERIOD associated with check purchases, consider buying
shares by bank wire, U.S. Postal money order, U.S. Treasury check, Federal
Reserve check, or automatic investment plans.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the next NAV
calculated after your order is received in proper form. Note the following:
o Normally, redemption proceeds will be mailed to you on the next business day,
but if making immediate payment could adversely affect a fund, it may take up to
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<PAGE>
seven days to pay you.
o Each fund may hold payment on redemptions until it is reasonably satisfied
that investments made by check have been collected, which can take up to seven
business days.
o Redemptions may be suspended or payment dates postponed when the NYSE is
closed (other than weekends or holidays), when trading on the NYSE is
restricted, or as permitted by the SEC.
o You will not receive interest on amounts represented by uncashed redemption
checks.
FIDELITY RESERVES THE RIGHT TO DEDUCT AN ANNUAL MAINTENANCE FEE of $12.00 from
accounts with a value of less than $2,500, subject to an annual maximum charge
of $60.00 per shareholder. Accounts opened after September 30 will not be
subject to the fee for that year. The fee, which is payable to the transfer
agent, is designed to offset in part the relatively higher costs of servicing
smaller accounts. The fee will not be deducted from retirement accounts (except
non-prototype retirement accounts), accounts using a systematic investment
program, certain (Network Level I and III) accounts which are maintained through
National Securities Clearing Corporation (NSCC), or if total assets in Fidelity
mutual funds exceed $50,000. Eligibility for the $50,000 waiver is determined by
aggregating Fidelity mutual fund accounts (excluding contractual plans)
maintained (i) by FIIOC and (ii) through NSCC; provided those accounts are
registered under the same primary social security number.
IF YOUR NON-RETIREMENT ACCOUNT BALANCE FALLS BELOW $1,000, you will be given 30
days' notice to reestablish the minimum balance. If you do not increase your
balance, Fidelity reserves the right to close your account and send the proceeds
to you. Your shares will be redeemed at the NAV on the day your account is
closed.
FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing historical
account documents, that are beyond the normal scope of its services.
FDC will, at its expense, provide promotional incentives such as sales contests
and luxury trips to investment professionals who support the sale of shares of
the funds. In some instances, these incentives will be offered only to certain
types of investment professionals, such as bank-affiliated or non-bank
affiliated broker-dealers, or to investment professionals whose representatives
provide services in connection with the sale or expected sale of significant
amounts of shares.
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<PAGE>
EXCHANGE RESTRICTIONS
As a shareholder, you have the privilege of exchanging your Institutional Class
shares for Institutional Class shares of other Fidelity Advisor funds or for
shares of other Fidelity funds. However, you should note the following:
o The fund or class you are exchanging into must be available for sale in your
state.
o You may only exchange between accounts that are registered in the same name,
address, and taxpayer identification number.
o Before exchanging into a fund or class, read its prospectus.
o If you exchange into a fund with a sales charge, you pay the percentage
difference between that fund's sales charge and any sales charge you may have
previously paid in connection with the shares you are exchanging. For example,
if you had already paid a sales charge of 2% on your shares and you exchange
them into a fund with a 3% sales charge, you would pay an additional 1% sales
charge.
o Exchanges may have tax consequences for you.
o Each fund reserves the right to temporarily or permanently terminate the
exchange privilege of any investor who makes more than four exchanges out of a
fund per calendar year. Accounts under common ownership or control, including
accounts with the same taxpayer identification number, will be counted together
for purposes of the four exchange limit.
o Each fund reserves the right to refuse exchange purchases by any person or
group if, in FMR's judgment, the fund would be unable to invest the money
effectively in accordance with its investment objective and policies, or would
otherwise potentially be adversely affected.
o The exchange limit may be modified for accounts in certain institutional
retirement plans to conform to plan exchange limits and Department of Labor
regulations. See your plan materials for further information.
Although the funds will attempt to give you prior notice whenever they are
reasonably able to do so, they may impose these restrictions at any time. The
funds reserve the right to terminate or modify these exchange privileges in the
future.
OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may impose
administrative fees of up to 1.00% and trading fees of up to 3.00% of the amount
exchanged. Check each fund's prospectus for details.
No dealer, sales representative, or any other person has been authorized to give
any information or to make any representations, other than those contained in
this Prospectus and in the related SAI, in connection with the offer contained
in this Prospectus. If given or made, such other information or representations
must not be relied upon as having been authorized by the funds or FDC. This
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Prospectus and the related SAI do not constitute an offer by the funds or by FDC
to sell or to buy shares of the funds to any person to whom it is unlawful to
make such offer.
Fidelity, Fidelity Investments, Fidelity Investments & (Pyramid) Design, and
Directed Dividends are registered trademarks of FMR Corp. Portfolio Advisory
Services and Fidelity Advisor Funds are servicemarks of FMR Corp.
The third party marks appearing above are the marks of their respective owners.
22
<PAGE>
APPENDIX
CALENDAR YEAR PERFORMANCE FOR RELATED FUNDS
Set forth below are charts presenting the calendar year performance of each
Related Fund for the past 10 years or since its inception. You should not assume
Dividend Growth, Retirement Growth, or Asset Allocation will have the same
future performance as the Related Funds. The Related Funds have different cost
structures than the funds offered through this prospectus. The performance of
each Related Fund does not represent the historical performance of the funds and
should not be interpreted as indicative of the future performance of the funds
or the Related Funds.
FIDELITY DIVIDEND GROWTH FUND
Calendar year total returns 1994 1995 1996 1997
Fidelity Dividend Growth 4.27% 37.53% 30.14% 27.90%
Fund
S&P 500(REGISTEREDTRADEMARK) 1.32% 37.58% 22.96% 33.36%
Lipper Growth Funds -2.17% 30.79% 19.24% 25.30%
Average
Consumer Price Index 2.67% 2.54% 3.32% 1.70%
[GRAPHIC: BAR CHART DESCRIBING FIDELITY DIVIDEND GROWTH FUND CALENDAR YEAR TOTAL
RETURNS FOR THE PERIOD 1994 THROUGH 1997]
1994 4.27%
1995 37.53%
1996 30.14%
1997 27.90%
<PAGE>
<TABLE>
<CAPTION>
FIDELITY RETIREMENT GROWTH FUND
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Calendar year total returns 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
Fidelity Retirement Growth 15.53% 30.41% -10.16% 45.58% 10.60% 22.13% 0.06% 24.28% 8.33% 18.54%
Fund
S&P 500(REGISTEREDTRADEMARK) 16.61% 31.69% -3.10% 30.47% 7.62% 10.08% 1.32% 37.58% 22.96% 33.36%
Lipper Capital Appreciation 14.09% 26.60% -8.24% 39.91% 8.78% 15.68% -3.38% 30.34% 16.32% 20.36%
Funds Average
Consumer Price Index 4.42% 4.65% 6.11% 3.06% 2.90% 2.75% 2.67% 2.54% 3.32% 1.70%
[GRAPHIC: BAR CHART DESCRIBING FIDELITY RETIREMENT GROWTH FUND CALENDAR YEAR
TOTAL RETURNS FOR THE PERIOD 1988 THROUGH 1997]
1988 15.53%
1989 30.41%
1990 -10.16%
1991 45.58%
1992 10.60%
1993 22.13%
1994 0.06%
1995 24.28%
1996 8.33%
1997 18.54%
FIDELITY ASSET MANAGER: GROWTH FUND
Calendar year total returns 1992 1993 1994 1995 1996 1997
Fidelity Asset Manager: 19.08% 26.32% -7.39% 19.95% 17.59% 26.46%
Growth Fund
Fidelity Aggressive Asset 7.34% 9.95% 0.11% 29.89% 15.74% 25.81%
Allocation Composite Index
S&P 500(REGISTEREDTRADEMARK) 7.62% 10.08% 1.32% 37.58% 22.96% 33.36%
Lipper Flexible Portfolio 7.51% 11.94% -2.65% 25.08% 13.39% 18.69%
Funds Average
Consumer Price Index 2.90% 2.75% 2.67% 2.54% 3.32% 1.70%
</TABLE>
[GRAPHIC: BAR CHART DESCRIBING FIDELITY ASSET MANAGER: GROWTH FUND CALENDAR YEAR
TOTAL RETURNS FOR THE PERIOD 1992 THROUGH 1997]
1992 19.08%
1993 26.32%
1994 -7.39%
1995 19.95%
1996 17.59%
1997 26.46%
2
<PAGE>
THE COMPETITIVE FUNDS average is each fund's Lipper Funds Average which reflects
the performance of mutual funds with similar investment objectives. These
averages, published by Lipper Analytical Services, Inc., exclude the effect of
sales loads.
As of June 30, 1998, the Lipper Growth Funds Average reflects the performance of
884 mutual funds with similar investment objectives; the Lipper Capital
Appreciation Funds Average reflects the performance of 231 mutual funds with
similar investment objectives; and the Lipper Flexible Portfolio Funds Average
reflects the performance of 194 mutual funds with similar investment objectives.
FIDELITY AGGRESSIVE ASSET ALLOCATION COMPOSITE INDEX is a hypothetical
representation of the performance of Fidelity Asset Manager: Growth Fund's three
asset classes according to their respective weightings in the fund's neutral mix
(70% stocks, 25% bonds and 5% short term/money market). The following indexes
are used to calculate the Composite Index: stocks--the Standard & Poor's 500
Index (S&P 500(REGISTEREDTRADEMARK)), bonds--the Lehman Brothers Aggregate Bond
Index, and short-term/money market--the Lehman Brothers 3-Month Treasury Bill
Index. Prior to January 1, 1997, the Lehman Brothers Treasury Bond Index was
used for the bond class. The index weightings of the Composite Index are
rebalanced monthly.
STANDARD & POOR'S 500 INDEX (S&P 500) is a widely recognized, unmanaged index of
common stocks.
LEHMAN BROTHERS AGGREGATE BOND INDEX is a market value weighted performance
benchmark for investment-grade fixed-rate debt issues, including government,
corporate, asset-backed, and mortgage-backed securities, with maturities of at
least one year.
LEHMAN BROTHERS 3-MONTH TREASURY BILL INDEX represents the average of Treasury
Bill rates for each of the prior three months, adjusted to a bond equivalent
yield basis (short-term and money market instruments).
Unlike each fund's returns, the total returns of each comparative index do not
include the effect of any brokerage commissions, transaction fees, or other
costs of investing.
THE CONSUMER PRICE INDEX is a widely recognized measure of inflation calculated
by the U.S. Government.
3
<PAGE>
Fidelity Advisor Series I:
Fidelity Advisor Dividend Growth Fund
Fidelity Advisor Retirement Growth Fund
Fidelity Advisor Asset Allocation Fund
Class A, Class T, Class B, Class C, and Institutional Class
Statement of Additional Information
Cross Reference Sheet
Form N-1A Item Number Statement of Additional Information Section
- --------------------- -------------------------------------------
10........................... Cover Page
11........................... Table of Contents
12........................... Description of the Trust
13 a-c....................... Investment Policies and Limitations
d......................... Portfolio Transactions
14 a-c....................... Trustees and Officers
15 a-c....................... Trustees and Officers
16 a i....................... FMR
ii...................... Trustees and Officers
iii..................... Management Contracts
b......................... Management Contracts
c......................... Portfolio Transactions; Management Contracts;
Contracts with FMR Affiliates
d......................... Contracts with FMR Affiliates
e......................... *
f......................... Distribution and Service Plans
g......................... *
h......................... Description of the Trust
i......................... Contracts with FMR Affiliates
17 a......................... Portfolio Transactions
b......................... *
c......................... Portfolio Transactions
d......................... *
e......................... *
18 a......................... Description of the Trust
b......................... *
Additional Purchase, Exchange, and Redemption
19 a......................... Information
Valuation; Additional Purchase, Exchange, and
b......................... Redemption Information
c......................... *
20 .......................... Distributions and Taxes
21 a......................... Contracts with FMR Affiliates;
Distribution and Service Plans
b......................... *
c......................... *
22 a......................... *
b......................... *
23........................... *
- -------------
*Not Applicable
<PAGE>
SUBJECT TO COMPLETION. PRELIMINARY STATEMENT OF ADDITIONAL INFORMATION DATED
SEPTEMBER 30, 1998. INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR
AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD
NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS STATEMENT OF ADDITIONAL INFORMATION DOES NOT CONSTITUTE
A PROSPECTUS.
FIDELITY ADVISOR DIVIDEND GROWTH FUND, FIDELITY ADVISOR RETIREMENT GROWTH FUND,
AND FIDELITY ADVISOR ASSET ALLOCATION FUND
FUNDS OF FIDELITY ADVISOR SERIES I
FIDELITY ADVISOR DIVERSIFIED INTERNATIONAL FUND, FIDELITY ADVISOR EUROPE CAPITAL
APPRECIATION FUND, FIDELITY ADVISOR JAPAN FUND, FIDELITY ADVISOR
LATIN AMERICA FUND, AND FIDELITY ADVISOR GLOBAL EQUITY FUND
FUNDS OF FIDELITY ADVISOR SERIES VIII
CLASS A, CLASS T, CLASS B, CLASS C, AND INSTITUTIONAL CLASS
STATEMENT OF ADDITIONAL INFORMATION
December 14, 1998
This Statement of Additional Information (SAI) is not a prospectus but should be
read in conjunction with the funds' current Prospectuses (dated December 14,
1998) for Class A, Class T, Class B, Class C, and Institutional Class shares.
Please retain this document for future reference. To obtain a free additional
copy of a Prospectus, please call your investment professional.
TABLE OF CONTENTS PAGE
Investment Policies and Limitations
Special Considerations Regarding Africa
Special Considerations Regarding Canada
Special Considerations Regarding Europe
Special Considerations Regarding Japan, the Pacific Basin,
and Southeast Asia
Special Considerations Regarding Latin America
Special Considerations Regarding the Russian Federation
Portfolio Transactions
Valuation
Performance
Prior Performance of Similar Funds
Additional Purchase, Exchange and Redemption Information
Distributions and Taxes
FMR
Trustees and Officers
Management Contracts
Distribution and Service Plans
Contracts with FMR Affiliates
Description of the Trusts
Appendix
INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.) Inc. (FMR U.K.)
Fidelity Management & Research (Far East) Inc. (FMR Far East)
Fidelity International Investment Advisors (FIIA)
Fidelity International Investment Advisors (U.K.) Limited
(FIIA(U.K.)L)
Fidelity Investments Japan Ltd. (FIJ)
<PAGE>
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
TRANSFER AGENT
Fidelity Investments Institutional Operations Company, Inc. (FIIOC)
For more information on any Fidelity fund, including charges and
expenses, call or write for a free prospectus. Read it carefully before
you invest or send money.
ACOMNEW-redb-1098
1.708925.100
2
<PAGE>
INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth in the
Prospectus. Unless otherwise noted, whenever an investment policy or limitation
states a maximum percentage of a fund's assets that may be invested in any
security or other asset, or sets forth a policy regarding quality standards,
such standard or percentage limitation will be determined immediately after and
as a result of the fund's acquisition of such security or other asset.
Accordingly, any subsequent change in values, net assets, or other circumstances
will not be considered when determining whether the investment complies with the
fund's investment policies and limitations.
A fund's fundamental investment policies and limitations cannot be changed
without approval by a "majority of the outstanding voting securities" (as
defined in the Investment Company Act of 1940 (the 1940 Act)) of the fund.
However, except for the fundamental investment limitations listed below, the
investment policies and limitations described in this SAI are not fundamental
and may be changed without shareholder approval.
INVESTMENT LIMITATIONS OF FIDELITY ADVISOR DIVIDEND GROWTH FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH IN
THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the securities
of any issuer (other than securities issued or guaranteed by the U.S. Government
or any of its agencies or instrumentalities, or securities of other investment
companies) if, as a result, (a) more than 5% of the fund's total assets would be
invested in the securities of that issuer, or (b) the fund would hold more than
10% of the outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment Company
Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not exceeding
33 1/3% of its total assets (including the amount borrowed) less liabilities
(other than borrowings). Any borrowings that come to exceed this amount will be
reduced within three days (not including Sundays and holidays) to the extent
necessary to comply with the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities Act
of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. Government or any of its agencies or instrumentalities)
if, as a result, more than 25% of the fund's total assets would be invested in
the securities of companies whose principal business activities are in the same
industry;
(6) purchase or sell real estate unless acquired as a result of ownership of
securities or other instruments (but this shall not prevent the fund from
investing in securities or other instruments backed by real estate or securities
of companies engaged in the real estate business);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent the
fund from purchasing or selling options and futures contracts or from investing
in securities or other instruments backed by physical commodities); or
3
<PAGE>
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this limitation
does not apply to purchases of debt securities or to repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment policy or
limitation, invest all of its assets in the securities of a single open-end
management investment company managed by Fidelity Management & Research Company
or an affiliate or successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short, unless its
owns or has the right to obtain securities equivalent in kind and amount to the
securities sold short, and provided that transactions in futures contracts and
options are not deemed to constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary for the
clearance of transactions, and provided that margin payments in connection with
futures contracts and options on futures contracts shall not constitute
purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with any
party (reverse repurchase agreements are treated as borrowings for purposes of
fundamental investment limitation (3)). The fund will not borrow from other
funds advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total assets.
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<PAGE>
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 10% of its net assets would be invested in securities that are
deemed to be illiquid because they are subject to legal or contractual
restrictions on resale or because they cannot be sold or disposed of in the
ordinary course of business at approximately the prices at which they are
valued.
(v) The fund does not currently intend to lend assets other than securities
to other parties, except by (a) lending money (up to 5% of the fund's net
assets) to a registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) acquiring loans, loan
participations, or other forms of direct debt instruments and, in connection
therewith, assuming any associated unfunded commitments of the sellers. (This
limitation does not apply to purchases of debt securities or to repurchase
agreements.)
(vi) The fund does not currently intend to invest all of its assets in the
securities of a single open-end management investment company managed by
Fidelity Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
With respect to limitation (iv), if through a change in values, net assets,
or other circumstances, the fund were in a position where more than 10% of its
net assets was invested in illiquid securities, it would consider appropriate
steps to protect liquidity.
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions" on page ___.
INVESTMENT LIMITATIONS OF FIDELITY ADVISOR RETIREMENT GROWTH FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH IN
THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the securities
of any issuer (other than securities issued or guaranteed by the U.S. Government
or any of its agencies or instrumentalities, or securities of other investment
companies) if, as a result, (a) more than 5% of the fund's total assets would be
invested in the securities of that issuer, or (b) the fund would hold more than
10% of the outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment Company
Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not exceeding
33 1/3% of its total assets (including the amount borrowed) less liabilities
(other than borrowings). Any borrowings that come to exceed this amount will be
reduced within three days (not including Sundays and holidays) to the extent
necessary to comply with the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities Act
of 1933 in the disposition of restricted securities;
4
<PAGE>
(5) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. Government or any of its agencies or instrumentalities)
if, as a result, more than 25% of the fund's total assets would be invested in
the securities of companies whose principal business activities are in the same
industry;
(6) purchase or sell real estate unless acquired as a result of ownership of
securities or other instruments (but this shall not prevent the fund from
investing in securities or other instruments backed by real estate or securities
of companies engaged in the real estate business);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent the
fund from purchasing or selling options and futures contracts or from investing
in securities or other instruments backed by physical commodities); or
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this limitation
does not apply to purchases of debt securities or to repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment policy or
limitation, invest all of its assets in the securities of a single open-end
management investment company managed by Fidelity Management & Research Company
or an affiliate or successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
4A
<PAGE>
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short, unless its
owns or has the right to obtain securities equivalent in kind and amount to the
securities sold short, and provided that transactions in futures contracts and
options are not deemed to constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary for the
clearance of transactions, and provided that margin payments in connection with
futures contracts and options on futures contracts shall not constitute
purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with any
party (reverse repurchase agreements are treated as borrowings for purposes of
fundamental investment limitation (3)). The fund will not borrow from other
funds advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 10% of its net assets would be invested in securities that are
deemed to be illiquid because they are subject to legal or contractual
restrictions on resale or because they cannot be sold or disposed of in the
ordinary course of business at approximately the prices at which they are
valued.
(v) The fund does not currently intend to lend assets other than securities
to other parties, except by (a) lending money (up to 5% of the fund's net
assets) to a registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) acquiring loans, loan
participations, or other forms of direct debt instruments and, in connection
therewith, assuming any associated unfunded commitments of the sellers. (This
limitation does not apply to purchases of debt securities or to repurchase
agreements.)
(vi) The fund does not currently intend to invest all of its assets in the
securities of a single open-end management investment company managed by
Fidelity Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
With respect to limitation (iv), if through a change in values, net assets,
or other circumstances, the fund were in a position where more than 10% of its
net assets was invested in illiquid securities, it would consider appropriate
steps to protect liquidity.
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions" on page ___.
5
<PAGE>
INVESTMENT LIMITATIONS OF FIDELITY ADVISOR ASSET ALLOCATION FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH IN
THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the securities
of any issuer (other than securities issued or guaranteed by the U.S. Government
or any of its agencies or instrumentalities, or securities of other investment
companies) if, as a result, (a) more than 5% of the fund's total assets would be
invested in the securities of that issuer, or (b) the fund would hold more than
10% of the outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment Company
Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not exceeding
33 1/3% of its total assets (including the amount borrowed) less liabilities
(other than borrowings). Any borrowings that come to exceed this amount will be
reduced within three days (not including Sundays and holidays) to the extent
necessary to comply with the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities Act
of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. Government or any of its agencies or instrumentalities)
if, as a result, more than 25% of the fund's total assets would be invested in
the securities of companies whose principal business activities are in the same
industry;
(6) purchase or sell real estate unless acquired as a result of ownership of
securities or other instruments (but this shall not prevent the fund from
investing in securities or other instruments backed by real estate or securities
of companies engaged in the real estate business);
5A
<PAGE>
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent the
fund from purchasing and selling precious metals, or from purchasing or selling
options and futures contracts or from investing in securities or other
instruments backed by physical commodities); or
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this limitation
does not apply to purchases of debt securities or to repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment policy or
limitation, invest all of its assets in the securities of a single open-end
management investment company managed by Fidelity Management & Research Company
or an affiliate or successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short, unless its
owns or has the right to obtain securities equivalent in kind and amount to the
securities sold short, and provided that transactions in futures contracts and
options are not deemed to constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary for the
clearance of transactions, and provided that margin payments in connection with
futures contracts and options on futures contracts shall not constitute
purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with any
party (reverse repurchase agreements are treated as borrowings for purposes of
fundamental investment limitation (3)). The fund will not borrow from other
funds advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 10% of its net assets would be invested in securities that are
deemed to be illiquid because they are subject to legal or contractual
restrictions on resale or because they cannot be sold or disposed of in the
ordinary course of business at approximately the prices at which they are
valued.
(v) The fund does not currently intend to lend assets other than securities
to other parties, except by (a) lending money (up to 5% of the fund's net
assets) to a registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) acquiring loans, loan
participations, or other forms of direct debt instruments and, in connection
therewith, assuming any associated unfunded commitments of the sellers. (This
limitation does not apply to purchases of debt securities or to repurchase
agreements.)
(vi) The fund does not currently intend to invest more than 5% of its total
assets in precious metals.
6
<PAGE>
(vii) The fund does not currently intend to invest all of its assets in the
securities of a single open-end management investment company managed by
Fidelity Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
With respect to limitation (iv), if through a change in values, net assets,
or other circumstances, the fund were in a position where more than 10% of its
net assets was invested in illiquid securities, it would consider appropriate
steps to protect liquidity.
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions" on page ___.
INVESTMENT LIMITATIONS OF FIDELITY ADVISOR DIVERSIFIED INTERNATIONAL FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH IN
THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the securities
of any issuer (other than securities issued or guaranteed by the U.S. Government
or any of its agencies or instrumentalities, or securities of other investment
companies) if, as a result, (a) more than 5% of the fund's total assets would be
invested in the securities of that issuer, or (b) the fund would hold more than
10% of the outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment Company
Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not exceeding
33 1/3% of its total assets (including the amount borrowed) less liabilities
(other than borrowings). Any borrowings that come to exceed this amount will be
reduced within three days (not including Sundays and holidays) to the extent
necessary to comply with the 33 1/3% limitation;
6A
<PAGE>
(4) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities Act
of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. Government or any of its agencies or instrumentalities)
if, as a result, more than 25% of the fund's total assets would be invested in
the securities of companies whose principal business activities are in the same
industry;
(6) purchase or sell real estate unless acquired as a result of ownership of
securities or other instruments (but this shall not prevent the fund from
investing in securities or other instruments backed by real estate or securities
of companies engaged in the real estate business);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent the
fund from purchasing or selling options and futures contracts or from investing
in securities or other instruments backed by physical commodities); or
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this limitation
does not apply to purchases of debt securities or to repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment policy or
limitation, invest all of its assets in the securities of a single open-end
management investment company managed by Fidelity Management & Research Company
or an affiliate or successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short, unless its
owns or has the right to obtain securities equivalent in kind and amount to the
securities sold short, and provided that transactions in futures contracts and
options are not deemed to constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary for the
clearance of transactions, and provided that margin payments in connection with
futures contracts and options on futures contracts shall not constitute
purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with any
party (reverse repurchase agreements are treated as borrowings for purposes of
fundamental investment limitation (3)). The fund will not borrow from other
funds advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 15% of its net assets would be invested in securities that are
deemed to be illiquid because they are subject to legal or contractual
restrictions on resale or because they cannot be sold or disposed of in the
ordinary course of business at approximately the prices at which they are
valued.
7
<PAGE>
(v) The fund does not currently intend to lend assets other than securities
to other parties, except by (a) lending money (up to 5% of the fund's net
assets) to a registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) acquiring loans, loan
participations, or other forms of direct debt instruments and, in connection
therewith, assuming any associated unfunded commitments of the sellers. (This
limitation does not apply to purchases of debt securities or to repurchase
agreements.)
(vi) The fund does not currently intend to invest all of its assets in the
securities of a single open-end management investment company managed by
Fidelity Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
With respect to limitation (iv), if through a change in values, net assets,
or other circumstances, the fund were in a position where more than 15% of its
net assets was invested in illiquid securities, it would consider appropriate
steps to protect liquidity.
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions" on page ___.
INVESTMENT LIMITATIONS OF FIDELITY ADVISOR EUROPE CAPITAL APPRECIATION FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH IN
THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the securities
of any issuer (other than securities issued or guaranteed by the U.S. Government
or any of its agencies or instrumentalities, or securities of other investment
7A
<PAGE>
companies) if, as a result, (a) more than 5% of the fund's total assets would be
invested in the securities of that issuer, or (b) the fund would hold more than
10% of the outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment Company
Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not exceeding
33 1/3% of its total assets (including the amount borrowed) less liabilities
(other than borrowings). Any borrowings that come to exceed this amount will be
reduced within three days (not including Sundays and holidays) to the extent
necessary to comply with the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities Act
of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. Government or any of its agencies or instrumentalities)
if, as a result, more than 25% of the fund's total assets would be invested in
the securities of companies whose principal business activities are in the same
industry;
(6) purchase or sell real estate unless acquired as a result of ownership of
securities or other instruments (but this shall not prevent the fund from
investing in securities or other instruments backed by real estate or securities
of companies engaged in the real estate business);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent the
fund from purchasing or selling options and futures contracts or from investing
in securities or other instruments backed by physical commodities); or
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this limitation
does not apply to purchases of debt securities or to repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment policy or
limitation, invest all of its assets in the securities of a single open-end
management investment company managed by Fidelity Management & Research Company
or an affiliate or successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short, unless its
owns or has the right to obtain securities equivalent in kind and amount to the
securities sold short, and provided that transactions in futures contracts and
options are not deemed to constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary for the
clearance of transactions, and provided that margin payments in connection with
futures contracts and options on futures contracts shall not constitute
purchasing securities on margin.
8
<PAGE>
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with any
party (reverse repurchase agreements are treated as borrowings for purposes of
fundamental investment limitation (3)). The fund will not borrow from other
funds advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 15% of its net assets would be invested in securities that are
deemed to be illiquid because they are subject to legal or contractual
restrictions on resale or because they cannot be sold or disposed of in the
ordinary course of business at approximately the prices at which they are
valued.
(v) The fund does not currently intend to lend assets other than securities
to other parties, except by (a) lending money (up to 5% of the fund's net
assets) to a registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) acquiring loans, loan
participations, or other forms of direct debt instruments and, in connection
therewith, assuming any associated unfunded commitments of the sellers. (This
limitation does not apply to purchases of debt securities or to repurchase
agreements.)
(vi) The fund does not currently intend to invest all of its assets in the
securities of a single open-end management investment company managed by
Fidelity Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
With respect to limitation (iv), if through a change in values, net assets,
or other circumstances, the fund were in a position where more than 15% of its
net assets was invested in illiquid securities, it would consider appropriate
steps to protect liquidity.
8A
<PAGE>
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions" on page ___.
INVESTMENT LIMITATIONS OF FIDELITY ADVISOR JAPAN FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH IN
THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the securities
of any issuer (other than securities issued or guaranteed by the U.S. Government
or any of its agencies or instrumentalities, or securities of other investment
companies) if, as a result, (a) more than 5% of the fund's total assets would be
invested in the securities of that issuer, or (b) the fund would hold more than
10% of the outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment Company
Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not exceeding
33 1/3% of its total assets (including the amount borrowed) less liabilities
(other than borrowings). Any borrowings that come to exceed this amount will be
reduced within three days (not including Sundays and holidays) to the extent
necessary to comply with the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities Act
of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. Government or any of its agencies or instrumentalities)
if, as a result, more than 25% of the fund's total assets would be invested in
the securities of companies whose principal business activities are in the same
industry;
(6) purchase or sell real estate unless acquired as a result of ownership of
securities or other instruments (but this shall not prevent the fund from
investing in securities or other instruments backed by real estate or securities
of companies engaged in the real estate business);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent the
fund from purchasing or selling options and futures contracts or from investing
in securities or other instruments backed by physical commodities); or
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this limitation
does not apply to purchases of debt securities or to repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment policy or
limitation, invest all of its assets in the securities of a single open-end
management investment company managed by Fidelity Management & Research Company
or an affiliate or successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
9
<PAGE>
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short, unless its
owns or has the right to obtain securities equivalent in kind and amount to the
securities sold short, and provided that transactions in futures contracts and
options are not deemed to constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary for the
clearance of transactions, and provided that margin payments in connection with
futures contracts and options on futures contracts shall not constitute
purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with any
party (reverse repurchase agreements are treated as borrowings for purposes of
fundamental investment limitation (3)). The fund will not borrow from other
funds advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 15% of its net assets would be invested in securities that are
deemed to be illiquid because they are subject to legal or contractual
restrictions on resale or because they cannot be sold or disposed of in the
ordinary course of business at approximately the prices at which they are
valued.
(v) The fund does not currently intend to lend assets other than securities
to other parties, except by (a) lending money (up to 5% of the fund's net
assets) to a registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) acquiring loans, loan
participations, or other forms of direct debt instruments and, in connection
therewith, assuming any associated unfunded commitments of the sellers. (This
limitation does not apply to purchases of debt securities or to repurchase
agreements.)
9A
<PAGE>
(vi) The fund does not currently intend to invest all of its assets in the
securities of a single open-end management investment company managed by
Fidelity Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
With respect to limitation (iv), if through a change in values, net assets,
or other circumstances, the fund were in a position where more than 15% of its
net assets was invested in illiquid securities, it would consider appropriate
steps to protect liquidity.
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions" on page ___.
INVESTMENT LIMITATIONS OF FIDELITY ADVISOR LATIN AMERICA FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH IN
THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the securities
of any issuer (other than securities issued or guaranteed by the U.S. Government
or any of its agencies or instrumentalities, or securities of other investment
companies) if, as a result, (a) more than 5% of the fund's total assets would be
invested in the securities of that issuer, or (b) the fund would hold more than
10% of the outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment Company
Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not exceeding
33 1/3% of its total assets (including the amount borrowed) less liabilities
(other than borrowings). Any borrowings that come to exceed this amount will be
reduced within three days (not including Sundays and holidays) to the extent
necessary to comply with the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities Act
of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. Government or any of its agencies or instrumentalities)
if, as a result, more than 25% of the fund's total assets would be invested in
the securities of companies whose principal business activities are in the same
industry, except that the fund may purchase the securities of any issuer if, as
a result, no more than 35% of the fund's total assets would be invested in any
industry that accounts for more than 20% of the Latin American market as a
whole, as measured by an index determined by FMR to be an appropriate measure of
the Latin American market;
(6) purchase or sell real estate unless acquired as a result of ownership of
securities or other instruments (but this shall not prevent the fund from
investing in securities or other instruments backed by real estate or securities
of companies engaged in the real estate business);
10
<PAGE>
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent the
fund from purchasing or selling options and futures contracts or from investing
in securities or other instruments backed by physical commodities); or
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this limitation
does not apply to purchases of debt securities or to repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment policy or
limitation, invest all of its assets in the securities of a single open-end
management investment company managed by Fidelity Management & Research Company
or an affiliate or successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short, unless its
owns or has the right to obtain securities equivalent in kind and amount to the
securities sold short, and provided that transactions in futures contracts and
options are not deemed to constitute selling securities short.
(ii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary for the
clearance of transactions, and provided that margin payments in connection with
futures contracts and options on futures contracts shall not constitute
purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with any
party (reverse repurchase agreements are treated as borrowings for purposes of
fundamental investment limitation (3)). The fund will not borrow from other
funds advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total assets.
10A
<PAGE>
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 15% of its net assets would be invested in securities that are
deemed to be illiquid because they are subject to legal or contractual
restrictions on resale or because they cannot be sold or disposed of in the
ordinary course of business at approximately the prices at which they are
valued.
(v) The fund does not currently intend to lend assets other than securities
to other parties, except by (a) lending money (up to 5% of the fund's net
assets) to a registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) acquiring loans, loan
participations, or other forms of direct debt instruments and, in connection
therewith, assuming any associated unfunded commitments of the sellers. (This
limitation does not apply to purchases of debt securities or to repurchase
agreements.)
(vi) The fund does not currently intend to invest all of its assets in the
securities of a single open-end management investment company managed by
Fidelity Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
With respect to limitation (iv), if through a change in values, net assets,
or other circumstances, the fund were in a position where more than 15% of its
net assets was invested in illiquid securities, it would consider appropriate
steps to protect liquidity.
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions" on page ___.
INVESTMENT LIMITATIONS OF FIDELITY ADVISOR GLOBAL EQUITY FUND
THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH IN
THEIR ENTIRETY. THE FUND MAY NOT:
(1) with respect to 75% of the fund's total assets, purchase the securities
of any issuer (other than securities issued or guaranteed by the U.S. Government
or any of its agencies or instrumentalities, or securities of other investment
companies) if, as a result, (a) more than 5% of the fund's total assets would be
invested in the securities of that issuer, or (b) the fund would hold more than
10% of the outstanding voting securities of that issuer;
(2) issue senior securities, except as permitted under the Investment Company
Act of 1940;
(3) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not exceeding
33 1/3% of its total assets (including the amount borrowed) less liabilities
(other than borrowings). Any borrowings that come to exceed this amount will be
reduced within three days (not including Sundays and holidays) to the extent
necessary to comply with the 33 1/3% limitation;
(4) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities Act
of 1933 in the disposition of restricted securities;
(5) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. Government or any of its agencies or instrumentalities)
if, as a result, more than 25% of the fund's total assets would be invested in
the securities of companies whose principal business activities are in the same
industry;
11
<PAGE>
(6) purchase or sell real estate unless acquired as a result of ownership of
securities or other instruments (but this shall not prevent the fund from
investing in securities or other instruments backed by real estate or securities
of companies engaged in the real estate business);
(7) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent the
fund from purchasing or selling options and futures contracts or from investing
in securities or other instruments backed by physical commodities); or
(8) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this limitation
does not apply to purchases of debt securities or to repurchase agreements.
(9) The fund may, notwithstanding any other fundamental investment policy or
limitation, invest all of its assets in the securities of a single open-end
management investment company managed by Fidelity Management & Research Company
or an affiliate or successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) The fund does not currently intend to sell securities short, unless its
owns or has the right to obtain securities equivalent in kind and amount to the
securities sold short, and provided that transactions in futures contracts and
options are not deemed to constitute selling securities short.
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(ii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary for the
clearance of transactions, and provided that margin payments in connection with
futures contracts and options on futures contracts shall not constitute
purchasing securities on margin.
(iii) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with any
party (reverse repurchase agreements are treated as borrowings for purposes of
fundamental investment limitation (3)). The fund will not borrow from other
funds advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total assets.
(iv) The fund does not currently intend to purchase any security if, as a
result, more than 15% of its net assets would be invested in securities that are
deemed to be illiquid because they are subject to legal or contractual
restrictions on resale or because they cannot be sold or disposed of in the
ordinary course of business at approximately the prices at which they are
valued.
(v) The fund does not currently intend to lend assets other than securities
to other parties, except by (a) lending money (up to 5% of the fund's net
assets) to a registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) acquiring loans, loan
participations, or other forms of direct debt instruments and, in connection
therewith, assuming any associated unfunded commitments of the sellers. (This
limitation does not apply to purchases of debt securities or to repurchase
agreements.)
(vi) The fund does not currently intend to invest all of its assets in the
securities of a single open-end management investment company managed by
Fidelity Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
With respect to limitation (iv), if through a change in values, net assets,
or other circumstances, the fund were in a position where more than 15% of its
net assets was invested in illiquid securities, it would consider appropriate
steps to protect liquidity.
For the fund's limitations on futures and options transactions, see the
section entitled "Limitations on Futures and Options Transactions" on page ___.
The following pages contain more detailed information about types of
instruments in which a fund may invest, strategies FMR may employ in pursuit of
a fund's investment objective, and a summary of related risks. FMR may not buy
all of these instruments or use all of these techniques unless it believes that
doing so will help a fund achieve its goal.
AFFILIATED BANK TRANSACTIONS. A fund may engage in transactions with
financial institutions that are, or may be considered to be, "affiliated
persons" of the fund under the 1940 Act. These transactions may involve
repurchase agreements with custodian banks; short-term obligations of, and
repurchase agreements with, the 50 largest U.S. banks (measured by deposits);
municipal securities; U.S. Government securities with affiliated financial
institutions that are primary dealers in these securities; short-term currency
transactions; and short-term borrowings. In accordance with exemptive orders
issued by the Securities and Exchange Commission (SEC), the Board of Trustees
has established and periodically reviews procedures applicable to transactions
involving affiliated financial institutions.
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ASSET ALLOCATION (ASSET ALLOCATION FUND). The stock class includes domestic
and foreign equity securities of all types (other than adjustable rate preferred
stocks, which are included in the bond class). FMR seeks to maximize total
return within this asset class by actively allocating assets to industry sectors
expected to benefit from major trends, and to individual stocks that FMR
believes to have superior investment potential. When FMR selects equity
securities, it considers both growth and anticipated dividend income. Securities
in the stock class may include common stocks, fixed-rate preferred stocks
(including convertible preferred stocks), warrants, rights, depositary receipts,
securities of closed-end investment companies, and other equity securities
issued by companies of any size, located anywhere in the world.
The bond class includes all varieties of domestic and foreign fixed-income
securities maturing in more than one year. FMR will seek to maximize total
return within the bond class by adjusting the fund's investments in securities
with different credit qualities, maturities, and coupon or dividend rates, and
by seeking to take advantage of yield differentials between securities.
Securities in this class may include bonds, notes, adjustable-rate preferred
stocks, convertible bonds, mortgage-related and asset-backed securities,
domestic and foreign government and government agency securities, zero coupon
bonds, and other intermediate and long-term securities. These securities may be
denominated in U.S. dollars or foreign currency.
The short-term/money market class includes all types of domestic and foreign
short-term and money market instruments. FMR will seek to maximize total return
within this asset class by taking advantage of yield differentials between
different instruments, issuers, and currencies. Short-term and money market
instruments may include corporate debt securities, such as commercial paper and
notes; government securities issued by U.S. or foreign governments or their
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agencies or instrumentalities; bank deposits and other financial institution
obligations; repurchase agreements involving any type of security; and other
similar short-term instruments. These instruments may be denominated in U.S.
dollars or foreign currency.
FMR may use its judgment to place a security in the most appropriate class
based on its investment characteristics. Fixed-income securities may be
classified in the bond or short-term/money market class according to interest
rate sensitivity as well as maturity. The fund may also make other investments
that do not fall within these classes. In making asset allocation decisions, FMR
will evaluate projections of risk, market conditions, economic conditions,
volatility, yields, and returns. FMR's management will use database systems to
help analyze past situations and trends, research specialists in each of the
asset classes to help in securities selection, portfolio management
professionals to determine asset allocation and to select individual securities,
and its own credit analysis as well as credit analyses provided by rating
services.
ASSET-BACKED SECURITIES represent interests in pools of mortgages, loans,
receivables or other assets. Payment of interest and repayment of principal may
be largely dependent upon the cash flows generated by the assets backing the
securities and, in certain cases, supported by letters of credit, surety bonds,
or other credit enhancements. Asset-backed security values may also be affected
by the creditworthiness of the servicing agent for the pool, the originator of
the loans or receivables, or the entities providing the credit enhancement. In
addition, these securities may be subject to prepayment risk.
CLOSED-END INVESTMENT COMPANIES are investment companies that issue a fixed
number of shares which trade on a stock exchange or over-the-counter. Closed-end
investment companies are professionally managed and may invest in any type of
security. Shares of closed-end investment companies may trade at a premium or a
discount to their net asset value. A fund may purchase shares of closed-end
investment companies to facilitate investment in certain foreign countries.
CONVERTIBLE SECURITIES are bonds, debentures, notes, preferred stocks or
other securities that may be converted or exchanged (by the holder or by the
issuer) into shares of the underlying common stock (or cash or securities of
equivalent value) at a stated exchange ratio. A convertible security may also be
called for redemption or conversion by the issuer after a particular date and
under certain circumstances (including a specified price) established upon
issue. If a convertible security held by a fund is called for redemption or
conversion, the fund could be required to tender it for redemption, convert it
into the underlying common stock, or sell it to a third party.
Convertible securities generally have less potential for gain or loss than
common stocks. Convertible securities generally provide yields higher than the
underlying common stocks, but generally lower than comparable non-convertible
securities. Because of this higher yield, convertible securities generally sell
at prices above their "conversion value," which is the current market value of
the stock to be received upon conversion. The difference between this conversion
value and the price of convertible securities will vary over time depending on
changes in the value of the underlying common stocks and interest rates. When
the underlying common stocks decline in value, convertible securities will tend
not to decline to the same extent because of the interest or dividend payments
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and the repayment of principal at maturity for certain types of convertible
securities. However, securities that are convertible other than at the option of
the holder generally do not limit the potential for loss to the same extent as
securities convertible at the option of the holder. When the underlying common
stocks rise in value, the value of convertible securities may also be expected
to increase. At the same time, however, the difference between the market value
of convertible securities and their conversion value will narrow, which means
that the value of convertible securities will generally not increase to the same
extent as the value of the underlying common stocks. Because convertible
securities may also be interest-rate sensitive, their value may increase as
interest rates fall and decrease as interest rates rise. Convertible securities
are also subject to credit risk, and are often lower-quality securities.
DELAYED-DELIVERY TRANSACTIONS. Securities may be bought and sold on a
delayed-delivery or when-issued basis. These transactions involve a commitment
to purchase or sell specific securities at a predetermined price or yield, with
payment and delivery taking place after the customary settlement period for that
type of security. Typically, no interest accrues to the purchaser until the
security is delivered. The funds may receive fees or price concessions for
entering into delayed-delivery transactions.
When purchasing securities on a delayed-delivery basis, the purchaser assumes
the rights and risks of ownership, including the risks of price and yield
fluctuations and the risk that the security will not be issued as anticipated.
Because payment for the securities is not required until the delivery date,
these risks are in addition to the risks associated with a fund's investments.
If a fund remains substantially fully invested at a time when delayed-delivery
purchases are outstanding, the delayed-delivery purchases may result in a form
of leverage. When delayed-delivery purchases are outstanding, a fund will set
aside appropriate liquid assets in a segregated custodial account to cover the
purchase obligations. When a fund has sold a security on a delayed-delivery
basis, the fund does not participate in further gains or losses with respect to
the security. If the other party to a delayed-delivery transaction fails to
deliver or pay for the securities, a fund could miss a favorable price or yield
opportunity or suffer a loss.
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A fund may renegotiate a delayed-delivery transaction and may sell the
underlying securities before delivery, which may result in capital gains or
losses for the fund.
EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies, and
securities issued by U.S. entities with substantial foreign operations may
involve significant risks in addition to the risks inherent in U.S. investments.
Foreign investments involve risks relating to local political, economic,
regulatory, or social instability, military action or unrest, or adverse
diplomatic developments, and may be affected by actions of foreign governments
adverse to the interests of U.S. investors. Such actions may include
expropriation or nationalization of assets, confiscatory taxation, restrictions
on U.S. investment or on the ability to repatriate assets or convert currency
into U.S. dollars, or other government intervention. There is no assurance that
FMR will be able to anticipate these potential events or counter their effects.
In addition, the value of securities denominated in foreign currencies and of
dividends and interest paid with respect to such securities will fluctuate based
on the relative strength of the U.S. dollar.
It is anticipated that in most cases the best available market for foreign
securities will be on an exchange or in over-the-counter (OTC) markets located
outside of the United States. Foreign stock markets, while growing in volume and
sophistication, are generally not as developed as those in the United States,
and securities of some foreign issuers may be less liquid and more volatile than
securities of comparable U.S. issuers. Foreign security trading, settlement and
custodial practices (including those involving securities settlement where fund
assets may be released prior to receipt of payment) are often less developed
than those in U.S. markets, and may result in increased risk or substantial
delays in the event of a failed trade or the insolvency of, or breach of duty
by, a foreign broker-dealer, securities depository or foreign subcustodian. In
addition, the costs associated with foreign investments, including withholding
taxes, brokerage commissions and custodial costs, are generally higher than with
U.S. investments.
Foreign markets may offer less protection to investors than U.S. markets.
Foreign issuers are generally not bound by uniform accounting, auditing, and
financial reporting requirements and standards of practice comparable to those
applicable to U.S. issuers. Adequate public information on foreign issuers may
not be available, and it may be difficult to secure dividends and information
regarding corporate actions on a timely basis. In general, there is less overall
governmental supervision and regulation of securities exchanges, brokers, and
listed companies than in the United States. OTC markets tend to be less
regulated than stock exchange markets and, in certain countries, may be totally
unregulated. Regulatory enforcement may be influenced by economic or political
concerns, and investors may have difficulty enforcing their legal rights in
foreign countries.
Some foreign securities impose restrictions on transfer within the United
States or to U.S. persons. Although securities subject to such transfer
restrictions may be marketable abroad, they may be less liquid than foreign
securities of the same class that are not subject to such restrictions.
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American Depositary Receipts (ADRs) as well as other "hybrid" forms of ADRs,
including European Depositary Receipts (EDRs) and Global Depositary Receipts
(GDRs), are certificates evidencing ownership of shares of a foreign issuer.
These certificates are issued by depository banks and generally trade on an
established market in the United States or elsewhere. The underlying shares are
held in trust by a custodian bank or similar financial institution in the
issuer's home country. The depository bank may not have physical custody of the
underlying securities at all times and may charge fees for various services,
including forwarding dividends and interest and corporate actions. ADRs are
alternatives to directly purchasing the underlying foreign securities in their
national markets and currencies. However, ADRs continue to be subject to many of
the risks associated with investing directly in foreign securities. These risks
include foreign exchange risk as well as the political and economic risks of the
underlying issuer's country.
The risks of foreign investing may be magnified for investments in emerging
markets. Security prices in emerging markets can be significantly more volatile
than those in more developed markets, reflecting the greater uncertainties of
investing in less established markets and economies. In particular, countries
with emerging markets may have relatively unstable governments, may present the
risks of nationalization of businesses, restrictions on foreign ownership and
prohibitions on the repatriation of assets, and may have less protection of
property rights than more developed countries. The economies of countries with
emerging markets may be based on only a few industries, may be highly vulnerable
to changes in local or global trade conditions, and may suffer from extreme and
volatile debt burdens or inflation rates. Local securities markets may trade a
small number of securities and may be unable to respond effectively to increases
in trading volume, potentially making prompt liquidation of holdings difficult
or impossible at times.
FOREIGN CURRENCY TRANSACTIONS. A fund may conduct foreign currency
transactions on a spot (i.e., cash) or forward basis (i.e., by entering into
forward contracts to purchase or sell foreign currencies). Although foreign
exchange dealers generally do not charge a fee for such conversions, they do
realize a profit based on the difference between the prices at which they are
buying and selling various currencies. Thus, a dealer may offer to sell a
foreign currency at one rate, while offering a lesser rate of exchange should
the counterparty desire to resell that currency to the dealer. Forward contracts
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are customized transactions that require a specific amount of a currency to be
delivered at a specific exchange rate on a specific date or range of dates in
the future. Forward contracts are generally traded in an interbank market
directly between currency traders (usually large commercial banks) and their
customers. The parties to a forward contract may agree to offset or terminate
the contract before its maturity, or may hold the contract to maturity and
complete the contemplated currency exchange.
The following discussion summarizes the principal currency management
strategies involving forward contracts that could be used by a fund. A fund may
also use swap agreements, indexed securities, and options and futures contracts
relating to foreign currencies for the same purposes.
A "settlement hedge" or "transaction hedge" is designed to protect a fund
against an adverse change in foreign currency values between the date a security
is purchased or sold and the date on which payment is made or received. Entering
into a forward contract for the purchase or sale of the amount of foreign
currency involved in an underlying security transaction for a fixed amount of
U.S. dollars "locks in" the U.S. dollar price of the security. Forward contracts
to purchase or sell a foreign currency may also be used by a fund in
anticipation of future purchases or sales of securities denominated in foreign
currency, even if the specific investments have not yet been selected by FMR.
A fund may also use forward contracts to hedge against a decline in the value
of existing investments denominated in foreign currency. For example, if a fund
owned securities denominated in pounds sterling, it could enter into a forward
contract to sell pounds sterling in return for U.S. dollars to hedge against
possible declines in the pound's value. Such a hedge, sometimes referred to as a
"position hedge," would tend to offset both positive and negative currency
fluctuations, but would not offset changes in security values caused by other
factors. A fund could also hedge the position by selling another currency
expected to perform similarly to the pound sterling. This type of hedge,
sometimes referred to as a "proxy hedge," could offer advantages in terms of
cost, yield, or efficiency, but generally would not hedge currency exposure as
effectively as a direct hedge into U.S. dollars. Proxy hedges may result in
losses if the currency used to hedge does not perform similarly to the currency
in which the hedged securities are denominated.
A fund may enter into forward contracts to shift its investment exposure from
one currency into another. This may include shifting exposure from U.S. dollars
to a foreign currency, or from one foreign currency to another foreign currency.
This type of strategy, sometimes known as a "cross-hedge," will tend to reduce
or eliminate exposure to the currency that is sold, and increase exposure to the
currency that is purchased, much as if a fund had sold a security denominated in
one currency and purchased an equivalent security denominated in another.
Cross-hedges protect against losses resulting from a decline in the hedged
currency, but will cause a fund to assume the risk of fluctuations in the value
of the currency it purchases.
Under certain conditions, SEC guidelines require mutual funds to set aside
appropriate liquid assets in a segregated custodial account to cover currency
forward contracts. As required by SEC guidelines, a fund will segregate assets
to cover currency forward contracts, if any, whose purpose is essentially
speculative. A fund will not segregate assets to cover forward contracts entered
into for hedging purposes, including settlement hedges, position hedges, and
proxy hedges.
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Successful use of currency management strategies will depend on FMR's skill
in analyzing currency values. Currency management strategies may substantially
change a fund's investment exposure to changes in currency exchange rates and
could result in losses to a fund if currencies do not perform as FMR
anticipates. For example, if a currency's value rose at a time when FMR had
hedged a fund by selling that currency in exchange for dollars, a fund would not
participate in the currency's appreciation. If FMR hedges currency exposure
through proxy hedges, a fund could realize currency losses from both the hedge
and the security position if the two currencies do not move in tandem.
Similarly, if FMR increases a fund's exposure to a foreign currency and that
currency's value declines, a fund will realize a loss. There is no assurance
that FMR's use of currency management strategies will be advantageous to a fund
or that it will hedge at appropriate times.
FOREIGN REPURCHASE AGREEMENTS. Foreign repurchase agreements may include
agreements to purchase and sell foreign securities in exchange for fixed U.S.
dollar amounts, or in exchange for specified amounts of foreign currency. Unlike
typical U.S. repurchase agreements, foreign repurchase agreements may not be
fully collateralized at all times. The value of a security purchased by a fund
may be more or less than the price at which the counterparty has agreed to
repurchase the security. In the event of default by the counterparty, the fund
may suffer a loss if the value of the security purchased is less than the
agreed-upon repurchase price, or if the fund is unable to successfully assert a
claim to the collateral under foreign laws. As a result, foreign repurchase
agreements may involve higher credit risks than repurchase agreements in U.S.
markets, as well as risks associated with currency fluctuations. In addition, as
with other emerging market investments, repurchase agreements with
counterparties located in emerging markets or relating to emerging markets may
involve issuers or counterparties with lower credit ratings than typical U.S.
repurchase agreements.
FUNDS' RIGHTS AS SHAREHOLDERS. The funds do not intend to direct or
administer the day-to-day operations of any company. A fund, however, may
exercise its rights as a shareholder and may communicate its views on important
matters of policy to management, the Board of Directors, and shareholders of a
company when FMR determines that such matters could have a significant effect on
the value of the fund's investment in the company. The activities in which a
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fund may engage, either individually or in conjunction with others, may include,
among others, supporting or opposing proposed changes in a company's corporate
structure or business activities; seeking changes in a company's directors or
management; seeking changes in a company's direction or policies; seeking the
sale or reorganization of the company or a portion of its assets; or supporting
or opposing third-party takeover efforts. This area of corporate activity is
increasingly prone to litigation and it is possible that a fund could be
involved in lawsuits related to such activities. FMR will monitor such
activities with a view to mitigating, to the extent possible, the risk of
litigation against a fund and the risk of actual liability if a fund is involved
in litigation. No guarantee can be made, however, that litigation against a fund
will not be undertaken or liabilities incurred.
FUTURES AND OPTIONS. The following paragraphs pertain to futures and options:
Asset Coverage for Futures and Options Positions, Combined Positions,
Correlation of Price Changes, Futures Contracts, Futures Margin Payments,
Limitations on Futures and Options Transactions, Liquidity of Options and
Futures Contracts, Options and Futures Relating to Foreign Currencies, OTC
Options, Precious Metals, Purchasing Put and Call Options, and Writing Put and
Call Options.
ASSET COVERAGE FOR FUTURES AND OPTIONS POSITIONS. The funds will comply with
guidelines established by the SEC with respect to coverage of options and
futures strategies by mutual funds and, if the guidelines so require, will set
aside appropriate liquid assets in a segregated custodial account in the amount
prescribed. Securities held in a segregated account cannot be sold while the
futures or option strategy is outstanding, unless they are replaced with other
suitable assets. As a result, there is a possibility that segregation of a large
percentage of a fund's assets could impede portfolio management or the fund's
ability to meet redemption requests or other current obligations.
COMBINED POSITIONS involve purchasing and writing options in combination with
each other, or in combination with futures or forward contracts, to adjust the
risk and return characteristics of the overall position. For example, purchasing
a put option and writing a call option on the same underlying instrument would
construct a combined position whose risk and return characteristics are similar
to selling a futures contract. Another possible combined position would involve
writing a call option at one strike price and buying a call option at a lower
price, to reduce the risk of the written call option in the event of a
substantial price increase. Because combined options positions involve multiple
trades, they result in higher transaction costs and may be more difficult to
open and close out.
CORRELATION OF PRICE CHANGES. Because there are a limited number of types of
exchange-traded options and futures contracts, it is likely that the
standardized contracts available will not match a fund's current or anticipated
investments exactly. A fund may invest in options and futures contracts based on
securities with different issuers, maturities, or other characteristics from the
securities in which the fund typically invests, which involves a risk that the
options or futures position will not track the performance of the fund's other
investments.
Options and futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments match a fund's
investments well. Options and futures prices are affected by such factors as
current and anticipated short-term interest rates, changes in volatility of the
underlying instrument, and the time remaining until expiration of the contract,
which may not affect security prices the same way. Imperfect correlation may
also result from differing levels of demand in the options and futures markets
and the securities markets, from structural differences in how options and
futures and securities are traded, or from imposition of daily price fluctuation
limits or trading halts. A fund may purchase or sell options and futures
contracts with a greater or lesser value than the securities it wishes to hedge
or intends to purchase in order to attempt to compensate for differences in
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volatility between the contract and the securities, although this may not be
successful in all cases. If price changes in a fund's options or futures
positions are poorly correlated with its other investments, the positions may
fail to produce anticipated gains or result in losses that are not offset by
gains in other investments.
FUTURES CONTRACTS. In purchasing a futures contract, the buyer agrees to
purchase a specified underlying instrument at a specified future date. In
selling a futures contract, the seller agrees to sell a specified underlying
instrument at a specified future date. The price at which the purchase and sale
will take place is fixed when the buyer and seller enter into the contract. Some
currently available futures contracts are based on specific securities, such as
U.S. Treasury bonds or notes, and some are based on indices of securities
prices, such as the Standard & Poor's 500 Index (S&P 500). Futures can be held
until their delivery dates, or can be closed out before then if a liquid
secondary market is available.
Futures may be based on foreign indexes such as the CAC 40 (France), DAX 30
(Germany), EuroTop 100 (Europe), IBEX (Spain), FTSE 100 (United Kingdom), All
Ordinary (Australia), Hang Seng (Hong Kong), and Nikkei 225, Nikkei 300 and
TOPIX (Japan).
The value of a futures contract tends to increase and decrease in tandem with
the value of its underlying instrument. Therefore, purchasing futures contracts
will tend to increase a fund's exposure to positive and negative price
fluctuations in the underlying instrument, much as if it had purchased the
underlying instrument directly. When a fund sells a futures contract, by
contrast, the value of its futures position will tend to move in a direction
contrary to the market. Selling futures contracts, therefore, will tend to
offset both positive and negative market price changes, much as if the
underlying instrument had been sold.
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FUTURES MARGIN PAYMENTS. The purchaser or seller of a futures contract is not
required to deliver or pay for the underlying instrument unless the contract is
held until the delivery date. However, both the purchaser and seller are
required to deposit "initial margin" with a futures broker, known as a futures
commission merchant (FCM), when the contract is entered into. Initial margin
deposits are typically equal to a percentage of the contract's value. If the
value of either party's position declines, that party will be required to make
additional "variation margin" payments to settle the change in value on a daily
basis. The party that has a gain may be entitled to receive all or a portion of
this amount. Initial and variation margin payments do not constitute purchasing
securities on margin for purposes of a fund's investment limitations. In the
event of the bankruptcy of an FCM that holds margin on behalf of a fund, the
fund may be entitled to return of margin owed to it only in proportion to the
amount received by the FCM's other customers, potentially resulting in losses to
the fund.
Although futures exchanges generally operate similarly in the United States
and abroad, foreign futures exchanges may follow trading, settlement and margin
procedures that are different from those for U.S. exchanges. Futures contracts
traded outside the United States may involve greater risk of loss than
U.S.-traded contracts, including potentially greater risk of losses due to
insolvency of a futures broker, exchange member or other party that may owe
initial or variation margin to a fund. Because initial and variation margin
payments may be measured in foreign currency, a futures contract traded outside
the United States may also involve the risk of foreign currency fluctuation.
LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. Each fund intends to file a
notice of eligibility for exclusion from the definition of the term "commodity
pool operator" with the Commodity Futures Trading Commission (CFTC) and the
National Futures Association, which regulate trading in the futures markets,
before engaging in any purchases or sales of futures contracts or options on
futures contracts. The funds intend to comply with Rule 4.5 under the Commodity
Exchange Act, which limits the extent to which the funds can commit assets to
initial margin deposits and option premiums.
In addition, each fund will not: (a) sell futures contracts, purchase put
options, or write call options if, as a result, more than 25% of the fund's
total assets would be hedged with futures and options under normal conditions;
(b) purchase futures contracts or write put options if, as a result, the fund's
total obligations upon settlement or exercise of purchased futures contracts and
written put options would exceed 25% of its total assets under normal
conditions; or (c) purchase call options if, as a result, the current value of
option premiums for call options purchased by the fund would exceed 5% of the
fund's total assets. These limitations do not apply to options attached to or
acquired or traded together with their underlying securities, and do not apply
to securities that incorporate features similar to options.
The above limitations on the funds' investments in futures contracts and
options, and the funds' policies regarding futures contracts and options
discussed elsewhere in this SAI, may be changed as regulatory agencies permit.
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LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There is no assurance a liquid
secondary market will exist for any particular options or futures contract at
any particular time. Options may have relatively low trading volume and
liquidity if their strike prices are not close to the underlying instrument's
current price. In addition, exchanges may establish daily price fluctuation
limits for options and futures contracts, and may halt trading if a contract's
price moves upward or downward more than the limit in a given day. On volatile
trading days when the price fluctuation limit is reached or a trading halt is
imposed, it may be impossible to enter into new positions or close out existing
positions. If the secondary market for a contract is not liquid because of price
fluctuation limits or otherwise, it could prevent prompt liquidation of
unfavorable positions, and potentially could require a fund to continue to hold
a position until delivery or expiration regardless of changes in its value. As a
result, a fund's access to other assets held to cover its options or futures
positions could also be impaired.
OPTIONS AND FUTURES RELATING TO FOREIGN CURRENCIES. Currency futures
contracts are similar to forward currency exchange contracts, except that they
are traded on exchanges (and have margin requirements) and are standardized as
to contract size and delivery date. Most currency futures contracts call for
payment or delivery in U.S. dollars. The underlying instrument of a currency
option may be a foreign currency, which generally is purchased or delivered in
exchange for U.S. dollars, or may be a futures contract. The purchaser of a
currency call obtains the right to purchase the underlying currency, and the
purchaser of a currency put obtains the right to sell the underlying currency.
The uses and risks of currency options and futures are similar to options and
futures relating to securities or indices, as discussed above. A fund may
purchase and sell currency futures and may purchase and write currency options
to increase or decrease its exposure to different foreign currencies. Currency
options may also be purchased or written in conjunction with each other or with
currency futures or forward contracts. Currency futures and options values can
be expected to correlate with exchange rates, but may not reflect other factors
that affect the value of a fund's investments. A currency hedge, for example,
should protect a Yen-denominated security from a decline in the Yen, but will
not protect a fund against a price decline resulting from deterioration in the
issuer's creditworthiness. Because the value of a fund's foreign-denominated
investments changes in response to many factors other than exchange rates, it
may not be possible to match the amount of currency options and futures to the
value of the fund's investments exactly over time.
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OTC OPTIONS. Unlike exchange-traded options, which are standardized with
respect to the underlying instrument, expiration date, contract size, and strike
price, the terms of over-the-counter (OTC) options (options not traded on
exchanges) generally are established through negotiation with the other party to
the option contract. While this type of arrangement allows the purchaser or
writer greater flexibility to tailor an option to its needs, OTC options
generally involve greater credit risk than exchange-traded options, which are
guaranteed by the clearing organization of the exchanges where they are traded.
PRECIOUS METALS. The prices of gold and other commodities can change rapidly
and generally do not move in tandem with the prices of equity and debt
securities.
PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, the purchaser
obtains the right (but not the obligation) to sell the option's underlying
instrument at a fixed strike price. In return for this right, the purchaser pays
the current market price for the option (known as the option premium). Options
have various types of underlying instruments, including specific securities,
indices of securities prices, and futures contracts. The purchaser may terminate
its position in a put option by allowing it to expire or by exercising the
option. If the option is allowed to expire, the purchaser will lose the entire
premium. If the option is exercised, the purchaser completes the sale of the
underlying instrument at the strike price. A purchaser may also terminate a put
option position by closing it out in the secondary market at its current price,
if a liquid secondary market exists.
The buyer of a typical put option can expect to realize a gain if security
prices fall substantially. However, if the underlying instrument's price does
not fall enough to offset the cost of purchasing the option, a put buyer can
expect to suffer a loss (limited to the amount of the premium, plus related
transaction costs).
The features of call options are essentially the same as those of put
options, except that the purchaser of a call option obtains the right to
purchase, rather than sell, the underlying instrument at the option's strike
price. A call buyer typically attempts to participate in potential price
increases of the underlying instrument with risk limited to the cost of the
option if security prices fall. At the same time, the buyer can expect to suffer
a loss if security prices do not rise sufficiently to offset the cost of the
option.
WRITING PUT AND CALL OPTIONS. The writer of a put or call option takes the
opposite side of the transaction from the option's purchaser. In return for
receipt of the premium, the writer assumes the obligation to pay the strike
price for the option's underlying instrument if the other party to the option
chooses to exercise it. The writer may seek to terminate a position in a put
option before exercise by closing out the option in the secondary market at its
current price. If the secondary market is not liquid for a put option, however,
the writer must continue to be prepared to pay the strike price while the option
is outstanding, regardless of price changes, and must continue to set aside
assets to cover its position. When writing an option on a futures contract, a
fund will be required to make margin payments to an FCM as described above for
futures contracts.
If security prices rise, a put writer would generally expect to profit,
although its gain would be limited to the amount of the premium it received. If
security prices remain the same over time, it is likely that the writer will
also profit, because it should be able to close out the option at a lower price.
If security prices fall, the put writer would expect to suffer a loss. This loss
should be less than the loss from purchasing the underlying instrument directly,
however, because the premium received for writing the option should mitigate the
effects of the decline.
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Writing a call option obligates the writer to sell or deliver the option's
underlying instrument, in return for the strike price, upon exercise of the
option. The characteristics of writing call options are similar to those of
writing put options, except that writing calls generally is a profitable
strategy if prices remain the same or fall. Through receipt of the option
premium, a call writer mitigates the effects of a price decline. At the same
time, because a call writer must be prepared to deliver the underlying
instrument in return for the strike price, even if its current value is greater,
a call writer gives up some ability to participate in security price increases.
ILLIQUID INVESTMENTS are investments that cannot be sold or disposed of in
the ordinary course of business at approximately the prices at which they are
valued. Under the supervision of the Board of Trustees, FMR determines the
liquidity of a fund's investments and, through reports from FMR, the Board
monitors investments in illiquid instruments. In determining the liquidity of a
fund's investments, FMR may consider various factors, including (1) the
frequency of trades and quotations, (2) the number of dealers and prospective
purchasers in the marketplace, (3) dealer undertakings to make a market, (4) the
nature of the security (including any demand or tender features), and (5) the
nature of the marketplace for trades (including the ability to assign or offset
the fund's rights and obligations relating to the investment).
Investments currently considered by FMR to be illiquid include repurchase
agreements not entitling the holder to repayment of principal and payment of
interest within seven days, over-the-counter options, and non-government
stripped fixed-rate mortgage-backed securities. Also, FMR may determine some
restricted securities, government-stripped fixed-rate mortgage-backed
securities, loans and other direct debt instruments, emerging market securities,
and swap agreements to be illiquid. However, with respect to over-the-counter
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options a fund writes, all or a portion of the value of the underlying
instrument may be illiquid depending on the assets held to cover the option and
the nature and terms of any agreement the fund may have to close out the option
before expiration.
In the absence of market quotations, illiquid investments are priced at fair
value as determined in good faith by a committee appointed by the Board of
Trustees.
INDEXED SECURITIES are instruments whose prices are indexed to the prices of
other securities, securities indices, currencies, precious metals or other
commodities, or other financial indicators. Indexed securities typically, but
not always, are debt securities or deposits whose value at maturity or coupon
rate is determined by reference to a specific instrument or statistic.
Gold-indexed securities typically provide for a maturity value that depends
on the price of gold, resulting in a security whose price tends to rise and fall
together with gold prices. Currency-indexed securities typically are short-term
to intermediate-term debt securities whose maturity values or interest rates are
determined by reference to the values of one or more specified foreign
currencies, and may offer higher yields than U.S. dollar-denominated securities.
Currency-indexed securities may be positively or negatively indexed; that is,
their maturity value may increase when the specified currency value increases,
resulting in a security that performs similarly to a foreign-denominated
instrument, or their maturity value may decline when foreign currencies
increase, resulting in a security whose price characteristics are similar to a
put on the underlying currency. Currency-indexed securities may also have prices
that depend on the values of a number of different foreign currencies relative
to each other.
The performance of indexed securities depends to a great extent on the
performance of the security, currency, or other instrument to which they are
indexed, and may also be influenced by interest rate changes in the United
States and abroad. Indexed securities may be more volatile than the underlying
instruments. Indexed securities are also subject to the credit risks associated
with the issuer of the security, and their values may decline substantially if
the issuer's creditworthiness deteriorates. Recent issuers of indexed securities
have included banks, corporations, and certain U.S. Government agencies.
INTERFUND BORROWING AND LENDING PROGRAM. Pursuant to an exemptive order
issued by the SEC, a fund may lend money to, and borrow money from, other funds
advised by FMR or its affiliates. A fund will lend through the program only when
the returns are higher than those available from an investment in repurchase
agreements, and will borrow through the program only when the costs are equal to
or lower than the cost of bank loans. Interfund loans and borrowings normally
extend overnight, but can have a maximum duration of seven days. Loans may be
called on one day's notice. A fund may have to borrow from a bank at a higher
interest rate if an interfund loan is called or not renewed. Any delay in
repayment to a lending fund could result in a lost investment opportunity or
additional borrowing costs.
ISSUER LOCATION. FMR determines where an issuer or its principal activities
are located by looking at such factors as the issuer's country of organization,
the primary trading market for the issuer's securities, and the location of the
issuer's assets, personnel, sales, and earnings. The issuer of a security is
considered to be located in a particular country if (1) the security is issued
or guaranteed by the government of the country or any of its agencies, political
subdivisions, or instrumentalities; (2) the security has its primary trading
market in that country; or (3) the issuer is organized under the laws of that
country, derives at least 50% of its revenues or profits from goods sold,
investments made, or services performed in the country, or has at least 50% of
its assets located in the country.
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LOANS AND OTHER DIRECT DEBT INSTRUMENTS. Direct debt instruments are
interests in amounts owed by a corporate, governmental, or other borrower to
lenders or lending syndicates (loans and loan participations), to suppliers of
goods or services (trade claims or other receivables), or to other parties.
Direct debt instruments are subject to a fund's policies regarding the quality
of debt securities.
Purchasers of loans and other forms of direct indebtedness depend primarily
upon the creditworthiness of the borrower for payment of interest and repayment
of principal. Direct debt instruments may not be rated by any nationally
recognized statistical rating service. If scheduled interest or principal
payments are not made, the value of the instrument may be adversely affected.
Loans that are fully secured provide more protections than an unsecured loan in
the event of failure to make scheduled interest or principal payments. However,
there is no assurance that the liquidation of collateral from a secured loan
would satisfy the borrower's obligation, or that the collateral could be
liquidated. Indebtedness of borrowers whose creditworthiness is poor involves
substantially greater risks and may be highly speculative. Borrowers that are in
bankruptcy or restructuring may never pay off their indebtedness, or may pay
only a small fraction of the amount owed. Direct indebtedness of developing
countries also involves a risk that the governmental entities responsible for
the repayment of the debt may be unable, or unwilling, to pay interest and repay
principal when due.
Investments in loans through direct assignment of a financial institution's
interests with respect to a loan may involve additional risks. For example, if a
loan is foreclosed, the purchaser could become part owner of any collateral, and
would bear the costs and liabilities associated with owning and disposing of the
collateral. In addition, it is conceivable that under emerging legal theories of
lender liability, a purchaser could be held liable as a co-lender. Direct debt
instruments may also involve a risk of insolvency of the lending bank or other
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intermediary. Direct debt instruments that are not in the form of securities may
offer less legal protection to the purchaser in the event of fraud or
misrepresentation. In the absence of definitive regulatory guidance, FMR uses
its research to attempt to avoid situations where fraud or misrepresentation
could adversely affect a fund.
A loan is often administered by a bank or other financial institution that
acts as agent for all holders. The agent administers the terms of the loan, as
specified in the loan agreement. Unless, under the terms of the loan or other
indebtedness, the purchaser has direct recourse against the borrower, the
purchaser may have to rely on the agent to apply appropriate credit remedies
against a borrower. If assets held by the agent for the benefit of a purchaser
were determined to be subject to the claims of the agent's general creditors,
the purchaser might incur certain costs and delays in realizing payment on the
loan or loan participation and could suffer a loss of principal or interest.
Direct indebtedness may include letters of credit, revolving credit
facilities, or other standby financing commitments that obligate purchasers to
make additional cash payments on demand. These commitments may have the effect
of requiring a purchaser to increase its investment in a borrower at a time when
it would not otherwise have done so, even if the borrower's condition makes it
unlikely that the amount will ever be repaid. A fund will set aside appropriate
liquid assets in a segregated custodial account to cover its potential
obligations under standby financing commitments.
Each fund limits the amount of total assets that it will invest in any one
issuer or in issuers within the same industry (see each fund's investment
limitations). For purposes of these limitations, a fund generally will treat the
borrower as the "issuer" of indebtedness held by the fund. In the case of loan
participations where a bank or other lending institution serves as financial
intermediary between a fund and the borrower, if the participation does not
shift to the fund the direct debtor-creditor relationship with the borrower, SEC
interpretations require a fund, in appropriate circumstances, to treat both the
lending bank or other lending institution and the borrower as "issuers" for
these purposes. Treating a financial intermediary as an issuer of indebtedness
may restrict a fund's ability to invest in indebtedness related to a single
financial intermediary, or a group of intermediaries engaged in the same
industry, even if the underlying borrowers represent many different companies
and industries.
LOWER-QUALITY DEBT SECURITIES. Lower-quality debt securities have poor
protection with respect to the payment of interest and repayment of principal,
or may be in default. These securities are often considered to be speculative
and involve greater risk of loss or price changes due to changes in the issuer's
capacity to pay. The market prices of lower-quality debt securities may
fluctuate more than those of higher-quality debt securities and may decline
significantly in periods of general economic difficulty, which may follow
periods of rising interest rates.
While the market for high-yield corporate debt securities has been in
existence for many years and has weathered previous economic downturns, the
1980s brought a dramatic increase in the use of such securities to fund highly
leveraged corporate acquisitions and restructurings. Past experience may not
provide an accurate indication of the future performance of the high-yield bond
market, especially during periods of economic recession.
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The market for lower-quality debt securities may be thinner and less active
than that for higher-quality debt securities, which can adversely affect the
prices at which the former are sold. If market quotations are not available,
lower-quality debt securities will be valued in accordance with procedures
established by the Board of Trustees, including the use of outside pricing
services. Judgment plays a greater role in valuing high-yield debt securities
than is the case for securities for which more external sources for quotations
and last-sale information are available. Adverse publicity and changing investor
perceptions may affect the liquidity of lower-quality debt securities and the
ability of outside pricing services to value lower-quality debt securities.
Since the risk of default is higher for lower-quality debt securities, FMR's
research and credit analysis are an especially important part of managing
securities of this type. FMR will attempt to identify those issuers of
high-yielding securities whose financial condition is adequate to meet future
obligations, has improved, or is expected to improve in the future. FMR's
analysis focuses on relative values based on such factors as interest or
dividend coverage, asset coverage, earnings prospects, and the experience and
managerial strength of the issuer.
A fund may choose, at its expense or in conjunction with others, to pursue
litigation or otherwise to exercise its rights as a security holder to seek to
protect the interests of security holders if it determines this to be in the
best interest of the fund's shareholders.
MORTGAGE-BACKED SECURITIES are issued by government and non-government
entities such as banks, mortgage lenders, or other institutions. A
mortgage-backed security is an obligation of the issuer backed by a mortgage or
pool of mortgages or a direct interest in an underlying pool of mortgages. Some
mortgage-backed securities, such as collateralized mortgage obligations (or
"CMOs"), make payments of both principal and interest at a range of specified
intervals; others make semiannual interest payments at a predetermined rate and
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repay principal at maturity (like a typical bond). Mortgage-backed securities
are based on different types of mortgages, including those on commercial real
estate or residential properties. Stripped mortgage-backed securities are
created when the interest and principal components of a mortgage-backed security
are separated and sold as individual securities. In the case of a stripped
mortgage-backed security, the holder of the "principal-only" security (PO)
receives the principal payments made by the underlying mortgage, while the
holder of the "interest-only" security (IO) receives interest payments from the
same underlying mortgage.
The value of mortgage-backed securities may change due to shifts in the
market's perception of issuers and changes in interest rates. In addition,
regulatory or tax changes may adversely affect the mortgage-backed securities
market as a whole. Non-government mortgage-backed securities may offer higher
yields than those issued by government entities, but also may be subject to
greater price changes than government issues. Mortgage-backed securities are
subject to prepayment risk, which is the risk that early principal payments made
on the underlying mortgages, usually in response to a reduction in interest
rates, will result in the return of principal to the investor, causing it to be
invested subsequently at a lower current interest rate. Alternatively, in a
rising interest rate environment, mortgage-backed security values may be
adversely affected when prepayments on underlying mortgages do not occur as
anticipated, resulting in the extension of the security's effective maturity and
the related increase in interest rate sensitivity of a longer-term instrument.
The prices of stripped mortgage-backed securities tend to be more volatile in
response to changes in interest rates than those of non-stripped mortgage-backed
securities.
REAL ESTATE INVESTMENT TRUSTS. Equity real estate investment trusts own real
estate properties, while mortgage real estate investment trusts make
construction, development, and long-term mortgage loans. Their value may be
affected by changes in the value of the underlying property of the trusts, the
creditworthiness of the issuer, property taxes, interest rates, and tax and
regulatory requirements, such as those relating to the environment. Both types
of trusts are dependent upon management skill, are not diversified, and are
subject to heavy cash flow dependency, defaults by borrowers, self-liquidation,
and the possibility of failing to qualify for tax-free status of income under
the Internal Revenue Code and failing to maintain exemption from the 1940 Act.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund purchases a security
and simultaneously commits to sell that security back to the original seller at
an agreed-upon price. The resale price reflects the purchase price plus an
agreed-upon incremental amount which is unrelated to the coupon rate or maturity
of the purchased security. As protection against the risk that the original
seller will not fulfill its obligation, the securities are held in a separate
account at a bank, marked-to-market daily, and maintained at a value at least
equal to the sale price plus the accrued incremental amount. While it does not
presently appear possible to eliminate all risks from these transactions
(particularly the possibility that the value of the underlying security will be
less than the resale price, as well as delays and costs to a fund in connection
with bankruptcy proceedings), the funds will engage in repurchase agreement
transactions with parties whose creditworthiness has been reviewed and found
satisfactory by FMR.
RESTRICTED SECURITIES generally can be sold in privately negotiated
transactions, pursuant to an exemption from registration under the Securities
Act of 1933, or in a registered public offering. Where registration is required,
a fund may be obligated to pay all or part of the registration expense and a
considerable period may elapse between the time it decides to seek registration
and the time it may be permitted to sell a security under an effective
registration statement. If, during such a period, adverse market conditions were
to develop, a fund might obtain a less favorable price than prevailed when it
decided to seek registration of the security.
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REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a fund
sells a security to another party, such as a bank or broker-dealer, in return
for cash and agrees to repurchase that security at an agreed-upon price and
time. While a reverse repurchase agreement is outstanding, a fund will maintain
appropriate liquid assets in a segregated custodial account to cover its
obligation under the agreement. The funds will enter into reverse repurchase
agreements with parties whose creditworthiness has been reviewed and found
satisfactory by FMR. Such transactions may increase fluctuations in the market
value of fund assets and may be viewed as a form of leverage.
SECURITIES LENDING. A fund may lend securities to parties such as
broker-dealers or institutional investors, including Fidelity Brokerage
Services, Inc. (FBSI). FBSI is a member of the New York Stock Exchange and a
subsidiary of FMR Corp.
Securities lending allows a fund to retain ownership of the securities loaned
and, at the same time, to earn additional income. Since there may be delays in
the recovery of loaned securities, or even a loss of rights in collateral
supplied should the borrower fail financially, loans will be made only to
parties deemed by FMR to be of good standing. Furthermore, they will only be
made if, in FMR's judgment, the consideration to be earned from such loans would
justify the risk.
FMR understands that it is the current view of the SEC Staff that a fund may
engage in loan transactions only under the following conditions: (1) the fund
must receive 100% collateral in the form of cash or cash equivalents (e.g., U.S.
Treasury bills or notes) from the borrower; (2) the borrower must increase the
collateral whenever the market value of the securities loaned (determined on a
daily basis) rises above the value of the collateral; (3) after giving notice,
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the fund must be able to terminate the loan at any time; (4) the fund must
receive reasonable interest on the loan or a flat fee from the borrower, as well
as amounts equivalent to any dividends, interest, or other distributions on the
securities loaned and to any increase in market value; (5) the fund may pay only
reasonable custodian fees in connection with the loan; and (6) the Board of
Trustees must be able to vote proxies on the securities loaned, either by
terminating the loan or by entering into an alternative arrangement with the
borrower.
Cash received through loan transactions may be invested in other eligible
securities. Investing this cash subjects that investment, as well as the
security loaned, to market forces (i.e., capital appreciation or depreciation).
SHORT SALES. A fund may enter into short sales with respect to stocks
underlying its convertible security holdings. For example, if FMR anticipates a
decline in the price of the stock underlying a convertible security a fund
holds, it may sell the stock short. If the stock price subsequently declines,
the proceeds of the short sale could be expected to offset all or a portion of
the effect of the stock's decline on the value of the convertible security. A
fund currently intends to hedge no more than 15% of its total assets with short
sales on equity securities underlying its convertible security holdings under
normal circumstances.
When a fund enters into a short sale, it will be required to set aside
securities equivalent in kind and amount to those sold short (or securities
convertible or exchangeable into such securities) and will be required to hold
them aside while the short sale is outstanding. A fund will incur transaction
costs, including interest expenses, in connection with opening, maintaining, and
closing short sales.
SHORT SALES "AGAINST THE BOX." A fund may sell securities short when it owns
or has the right to obtain securities equivalent in kind or amount to the
securities sold short. Such short sales are known as short sales "against the
box." If a fund enters into a short sale against the box, it will be required to
set aside securities equivalent in kind and amount to the securities sold short
(or securities convertible or exchangeable into such securities) and will be
required to hold such securities while the short sale is outstanding. The fund
will incur transaction costs, including interest expenses, in connection with
opening, maintaining, and closing short sales against the box.
SOVEREIGN DEBT OBLIGATIONS are issued or guaranteed by foreign governments or
their agencies, including debt of Latin American nations or other developing
countries. Sovereign debt may be in the form of conventional securities or other
types of debt instruments such as loans or loan participations. Sovereign debt
of developing countries may involve a high degree of risk, and may be in default
or present the risk of default. Governmental entities responsible for repayment
of the debt may be unable or unwilling to repay principal and pay interest when
due, and may require renegotiation or rescheduling of debt payments. In
addition, prospects for repayment of principal and payment of interest may
depend on political as well as economic factors. Although some sovereign debt,
such as Brady Bonds, is collateralized by U.S. Government securities, repayment
of principal and payment of interest is not guaranteed by the U.S. Government.
SWAP AGREEMENTS can be individually negotiated and structured to include
exposure to a variety of different types of investments or market factors.
Depending on their structure, swap agreements may increase or decrease a fund's
exposure to long- or short-term interest rates (in the United States or abroad),
foreign currency values, mortgage securities, corporate borrowing rates, or
other factors such as security prices or inflation rates. Swap agreements can
take many different forms and are known by a variety of names.
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In a typical cap or floor agreement, one party agrees to make payments only
under specified circumstances, usually in return for payment of a fee by the
other party. For example, the buyer of an interest rate cap obtains the right to
receive payments to the extent that a specified interest rate exceeds an
agreed-upon level, while the seller of an interest rate floor is obligated to
make payments to the extent that a specified interest rate falls below an
agreed-upon level. An interest rate collar combines elements of buying a cap and
selling a floor.
Swap agreements will tend to shift a fund's investment exposure from one type
of investment to another. For example, if the fund agreed to exchange payments
in dollars for payments in foreign currency, the swap agreement would tend to
decrease the fund's exposure to U.S. interest rates and increase its exposure to
foreign currency and interest rates. Caps and floors have an effect similar to
buying or writing options. Depending on how they are used, swap agreements may
increase or decrease the overall volatility of a fund's investments and its
share price.
The most significant factor in the performance of swap agreements is the
change in the specific interest rate, currency, or other factors that determine
the amounts of payments due to and from a fund. If a swap agreement calls for
payments by the fund, the fund must be prepared to make such payments when due.
In addition, if the counterparty's creditworthiness declined, the value of a
swap agreement would be likely to decline, potentially resulting in losses. A
fund may be able to eliminate its exposure under a swap agreement either by
assignment or other disposition, or by entering into an offsetting swap
agreement with the same party or a similarly creditworthy party.
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A fund will maintain appropriate liquid assets in a segregated custodial
account to cover its current obligations under swap agreements. If a fund enters
into a swap agreement on a net basis, it will segregate assets with a daily
value at least equal to the excess, if any, of the fund's accrued obligations
under the swap agreement over the accrued amount the fund is entitled to receive
under the agreement. If a fund enters into a swap agreement on other than a net
basis, it will segregate assets with a value equal to the full amount of the
fund's accrued obligations under the agreement.
VARIABLE AND FLOATING RATE SECURITIES provide for periodic adjustments in the
interest rate paid on the security. Variable rate securities provide for a
specified periodic adjustment in the interest rate, while floating rate
securities have interest rates that change whenever there is a change in a
designated benchmark rate. Some variable or floating rate securities are
structured with put features that permit holders to demand payment of the unpaid
principal balance plus accrued interest from the issuers or certain financial
intermediaries.
WARRANTS. Warrants are instruments which entitle the holder to buy an equity
security at a specific price for a specific period of time. Changes in the value
of a warrant do not necessarily correspond to changes in the value of its
underlying security. The price of a warrant may be more volatile than the price
of its underlying security, and a warrant may offer greater potential for
capital appreciation as well as capital loss.
Warrants do not entitle a holder to dividends or voting rights with respect
to the underlying security and do not represent any rights in the assets of the
issuing company. A warrant ceases to have value if it is not exercised prior to
its expiration date. These factors can make warrants more speculative than other
types of investments.
ZERO COUPON BONDS do not make interest payments; instead, they are sold at a
discount from their face value and are redeemed at face value when they mature.
Because zero coupon bonds do not pay current income, their prices can be more
volatile than other types of fixed-income securities when interest rates change.
In calculating a fund's dividend, a portion of the difference between a zero
coupon bond's purchase price and its face value is considered income.
SPECIAL CONSIDERATIONS REGARDING AFRICA
Africa is a highly diverse and politically unstable continent of over 50
countries and 720 million people. Civil wars, coups and even genocidal warfare
have beset much of this region in recent years. Nevertheless, it is home to an
abundance of natural resources, including natural gas, aluminum, crude oil,
copper, iron, bauxite, cotton, diamonds and timber. Wealthier countries
generally have strong connections to European partners, and evidence of these
relationships is seen in the growing market capitalization and foreign
investment of these countries. Economic performance is closely tied to world
commodity markets, particularly oil, and also to weather conditions, such as
drought.
Five African countries are among the 20 fastest growing in the world (Uganda,
Ivory Coast, Botswana, Angola and Zimbabwe, confirm EIU 1995), with GDP growth
rates ranging from 5.5% to 6.0%. Two countries, Yemen and Bahrain, are
experiencing growth at or below 2.0%, and one country, Libya, is experiencing
(-4.0%) negative growth.
African economic growth is projected to remain higher than in any recent year
other than 1996. The relatively small effects of the Asian crisis are
attributable to the comparatively low levels of private capital flows to most
countries in the regions. Africa can be negatively impacted from the slowdown in
global growth, and its effects on commodity prices.
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Several African countries in the north have substantial oil reserves and
accordingly their economies react strongly to world oil prices. They share a
regional and sometimes religious identification with the oil producing nations
of the Middle East and can be strongly affected by political and economic
developments in those countries. As in the south, weather conditions also have a
strong impact on many of their natural resources, and, as was the case in 1995,
severe drought can adversely effect economic growth.
Twelve African countries have active equity markets (Bahrain, Botswana,
Egypt, Ghana, Kenya, Morocco, Nigeria, Oman, South Africa, Tunisia, Zambia, and
Zimbabwe). The oldest market, in Egypt, was established in 1883, while the
youngest, in Zambia, was established in 1994. Four additional markets have been
established since 1989, and the mean age for all equity markets is 40 years old.
A total of 1,830 firms are listed on the respective exchanges. Total market
capitalization for these countries in 1996 was $290 billion, an average increase
of 54% over 1995 levels.
The South African market is the largest in Africa and has a capitalization of
more than ten times that of all the other African markets combined. In 1997, the
country's Johannesburg Stock Exchange fell by 6.8%, due largely to weakening
commodity prices and a slowdown in the South African economy. The market decline
extended into 1998 as the South African rand declined versus the world's major
currencies.
SPECIAL CONSIDERATIONS REGARDING CANADA
Canada is a confederation of ten provinces with a parliamentary system of
government. Canada is the world's second largest nation by landmass and is
inhabited by 30.2 million people, most of whom are descendants of France, the
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United Kingdom and indigenous peoples. The country has a workforce of over 15
million people in various industries such as trade, manufacturing, mining,
finance, construction and government. While the country has many institutions
which closely parallel the United States, such as a transparent stock market and
similar accounting practices, it differs from the United States in that it has
an extensive social welfare system, much more akin to European welfare states.
The confederated structures combined with recent financial pressure on the
federal government have pushed provinces, Quebec in particular, to call for a
revaluation of the legal and financial relationships between the federal
government in Ottawa and the provinces. Recent referendums on Quebec sovereignty
have been narrowly defeated and the issue appears far from resolved. However, in
August of 1998, the country's Supreme Court decided that Quebec does not have
the right to secede unilaterally, removing any immediate threat that Canada will
break up. Nevertheless, the Canadian markets could continue to react to any
periodic escalations of separatist calls.
Canada is one of the richest nations in the world in terms of natural
resources. The country is a major producer of such commodities as forest
products, mining, metals, and agricultural products. Additionally, energy
related products such as oil, gas, and hydroelectricity are important components
of their economy. Accordingly, the Canadian stock market is strongly represented
by basic material stocks, and movements in the supply and demand of industrial
materials, agriculture, and energy, both domestically and internationally, can
have a strong effect on market performance.
The United States is Canada's largest trading partner and approximately 80%
of Canadian merchandise traded in 1997 was with the United States. Automobiles
and auto parts accounted for the largest export items followed by energy, mining
and forest products. Canada is the largest energy supplier to the United States,
while the United States is Canada's largest foreign investor. United States
investment has been largely focused on financial, energy, metals and mining
businesses. The expanding economic and financial integration of the United
States and Canada will likely make the Canadian economy and securities markets
increasingly sensitive to U.S. economic and market events.
For United States investors in Canadian markets, currency has become an
important determinant of investment return. Since Canada let its dollar float in
1970, its value has been in a steady decline against its United States
counterpart. While the decline has enabled Canada to stay competitive with its
more efficient southern neighbor, which buys four-fifths of its exports, United
States investors have seen their investment returns eroded by the impact of
currency conversion.
SPECIAL CONSIDERATIONS REGARDING EUROPE
Europe can be divided into two distinct categories of market development: the
developed economies of Western Europe and the transition economies of Eastern
Europe.
Any discussion of European national economies and securities markets must be
made with an eye to the impact that the European Union (EU) and European and
Economic Monetary Union (EMU) -will have upon the future of these countries as
well as the rest of the world. The scope and magnitude of these economic and
political initiatives dwarfs anything attempted to date. If successful, the EU
will change or erase many political, economic, cultural and market distinctions
that define and differentiate each of the Continent's countries today.
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The third and final stage of the European Economic and Monetary Union is
scheduled to be implemented on January 1, 1999. The European Union (EU) consists
of 15 countries of western Europe: Austria, Belgium, Denmark, Finland, France,
Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain,
Sweden and the United Kingdom. The six founding countries first formed an
economic community in the 1950s to bring down trade barriers such as taxes and
quotas, to eliminate technical restrictions such as special standards and
regulations for foreigners, and to coordinate various industrial policies, such
as those pertaining to agriculture. Since that time the group has admitted new
members and, in time, may expand its membership to other nations such as those
of Eastern Europe. The EU has as its goal, the creation of a single, unified
market that would be, at over 370 million people, the largest in the developed
world and through which goods, people and capital could move freely.
A second component of the EU is the establishment of a single currency - the
Euro, to replace each member country's domestic currencies. In preparation for
the creation of the Euro, the Exchange Rate Mechanism (ERM) was established to
keep the various national currencies at a pre-specified value relative to each
other. The year 1997 is significant for membership in the EU as it is the
initial reference year for evaluating debt levels and deficits within the
criteria set forth by the Maastricht treaty. Specifically, the Maastricht
criteria include, among other indicators, an inflation rate below 3.3%, a public
debt below 60% of GDP, and a deficit of 3% or less of GDP. Failure to meet the
Maastricht levels would disqualify any country from membership.
On May 3, 1998 the European Council of Ministers formally announced the
"first wave" of EMU participants. They are: Austria, Belgium, Finland, France,
Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain. On
January 1, 1999, the Euro becomes a currency, while the bank notes used by EMU's
eleven members remain legal tender. After a three year transition period, the
Euro will begin circulating on January 1, 2002. Six months later, today's
currencies will cease to exist.
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Many foreign and domestic businesses are establishing or increasing their
presence in Europe in anticipation of the new unified single market. Clear,
confident visions of a diverse, multi-industrial, unified market under a single
currency have been the impetus for much of the recent corporate restructuring
initiatives as well as for the increased mergers and acquisitions activity in
the region. A successful EMU could prove to be an engine for sustained growth
throughout Europe.
While the securities markets view the introduction of the euro as inevitable,
the success of the union is not wholly assured. Europe must grapple with a
number of challenges, any one of which could threaten the survival of this
monumental undertaking. For example, eleven disparate economies must adjust to a
unified monetary system, the absence of exchange rate flexibility and the loss
of economic sovereignty. The Continent's economies are diverse, its governments
decentralized and its cultures differ widely. Unemployment is historically high
and could pose a political risk that one or more countries might exit the union
placing the currency and banking system in jeopardy.
For those countries in Western and Eastern Europe that will not be included
in the first round of the EU implementation, the prospects for eventual
membership serves as a strong political impetus for many governments to employ
tight fiscal and monetary policies. Particularly for the Eastern European
countries, aspirations to join the EU are likely to push governments to act
decisively. At the same time, there could become an increasingly widening gap
between rich and poor both within the aspiring countries and also those
countries who are close to meeting membership criteria and those who are not.
Realigning traditional alliances could result in altering trading relationships
and potentially provoking divisive socio-economic splits.
The economies of Eastern Europe are embarking on the transition from
communism at different paces with appropriately different characteristics. The
transition countries also display sharp contrasts in performance. Those that are
most advanced in the transformation process are now reaping the rewards of
comprehensive reform and stabilization policies pursued with determination over
recent years. These include Poland, the Baltic countries, Croatia, the Czech
Republic, Hungary, the Slovak Republic and Slovenia. Conversely, those that are
less advanced in the transition are struggling with a number of policy
challenges to strengthen their economies. Several countries have made good
progress, and in Armenia, Azerbaijan, Georgia, Kazakhstan, and the Kyrgyz
Republic, inflation has fallen considerably in recent years. Nevertheless, the
East European markets are particularly vulnerable to weakness in the world's
other emerging countries and are particularly sensitive to events in Russia. For
example, in mid-1998 when economic and political turmoil forced the Russian
government to devalue its currency and restructure its debt payments, the other
markets in Eastern Europe suffered significant destabilization of which the
extent and duration is still unknown.
FRANCE. France is a republic of over 58 million people in the historic if not
the geographic center of Western Europe. The Fifth French Republic, established
in the early postwar period under Charles de Gaulle, provides for a strong
Presidency which can appoint its own cabinet but must win approval of a
parliamentary majority. The government was founded upon the French cultural
values of liberty, brotherhood and egalitarianism. In France, this latter value
often translates into a government burden of providing job security. The result
is a large, vast bureaucracy in the public sector and strict employment and
labor laws in the private sector. In addition, a significant portion of
government economic policy revolves around regulating and protecting domestic
industries, particularly farming and manufacturing. Finally, the French
government frequently owns high majority or minority interests in large
companies, particularly utility, transport and communications concerns. While
privatization has been a popular movement in many other European countries, it
has encountered a stalled stop-and -go cycle in France.
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The French economy is the world's fourth-largest Western industrialized
economy, with a GDP of $1538 billion in 1996. The nation has substantial
agricultural resources, a diversified modern industrial system, and a highly
skilled labor force. France's economy boasts a sophisticated industrial
manufacturing base, which includes not only high technology (information
technology and telecommunications, vehicles, aircraft, computer equipment, etc.)
but also a number of very large companies producing consumer goods. The
country's industrial structure is unusual for an industrialized economy because
the state still controls a large proportion of the heavy strategic goods
industries as well as institutions such as banks and communications companies.
The agricultural sector continues to be important; however, most farms are small
by European standards and require massive government support. Exports are an
economic strong point and the nation has enjoyed trade surpluses in recent
years. Leading exports include chemicals, electronics and automotive and
aircraft machinery, while imports are dominated by petroleum, industrial
machinery and electronics. Their main trading partners are the United States,
Japan, and other EU countries.
The country is one of the largest consumers of nuclear energy, obtaining
nearly 75% of its total electricity needs from reactors. While it has some small
deposits of oil and gas, it remains heavily dependent on imports for most of its
needs.
In recent years, the country's economic growth has been hindered by a series
of general strikes. The government's efforts to reduce spending to meet the
Maastricht criteria have prompted strikes and unrest from France's powerful
trade unions. In addition, striking workers have pushed their demands for a
lower retirement age and a reduction in the workweek. With an unemployment rate
above 12%, the country's labor markets are not functioning efficiently. France's
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pay-as-you-go pension program is an additional deterrent to economic growth as
spending on pensions account for a tenth of GDP. While all parties agree that
the system must be replaced, no agreement has been reached on an alternative.
France went to the polls in May 1997 after a surprise decision to hold early
elections by conservative President Jacques Chirac. Chirac's calculation was to
capitalize on popular support before he was forced to undertake austere fiscal
measures to meet the Maastricht criteria. Voters responded that they were more
concerned about the country's high level of unemployment and Chirac's party lost
enough seats in the parliament that the president must now share power for the
remaining five years in office with a socialist-led government. This change
could set back the previous government's pledges to continue its privatization
initiatives, restrain spending, support the franc, and endure fiscal austerity.
It also calls into question whether the French people have the will to adhere to
the EMU convergence criteria over the next few years.
The stock market in France has undergone both gradual and dramatic changes in
recent years, keeping pace with global trends toward deregulation,
privatization, and cross border activities, allowing Paris to maintain its
position as the world's fourth-largest financial center. Until 1996, the Paris
Bourse was the country's sole stock exchange, providing access to all listed
French securities. Since then, foreign interest has been stimulated by the
creation of new markets, such as the Nouveau Marche, for riskier, growth
oriented, small corporations. While the listings of these combined markets are
fairly diverse financial companies that account for approximately one-third of
the total. The system underwent many regulatory changes in the late 1980s,
taking steps toward combating insider trading and ensuring market transparency.
GERMANY. Germany is the largest economy in all of Europe and is the third
largest economy in the world behind the United States and Japan. The country
occupies a central position in Western Europe with strong cultural and economic
ties with the countries of Eastern Europe and borders on no less than six other
Western European countries. The country's size, location and proven industrial
ability have historically thrust it to the center of European economic life, a
position it was able to re-attain in the wake of the post- war period. More
recently, Germany has used this position as a platform to champion the cause of
the European Union, and also to absorb and transform the devastated economy of
its former communist eastern half.
The German economy is heavily industrialized, with a strong emphasis on
manufacturing. The manufacturing sector is driven by small and medium-sized
companies, most of which are very efficient and dynamic. Germany, nevertheless,
has many large industries and manufacturing is dominated by the production of
motor vehicles, precision engineering, brewing, chemicals, pharmaceuticals and
heavy metal products.
The economy has benefited from a strong export performance throughout the
decade. Exports, weighted heavily in the industrial machinery, autos and
chemicals sectors, have provided the economy with positive trade balances.
Exports are the main engine of GDP growth, highlighting Germany's dependence on
the prosperity of its trading partners. Five out of its top six trading partners
are fellow EU members (the sixth is the United States), while very low levels of
trade are conducted with Asian and Latin American countries. Germany stands very
well poised to supply the emerging markets of central Europe. It is already the
largest European foreign investor in the Czech Republic and the largest trading
partner for Poland and Hungary. Accordingly, any weakness in the emerging market
economies might likely dampen demand for German goods, to the detriment of the
German economy. As most of these emerging markets aspire to join the EU, it is
possible that a larger EU could alter Germany's trading relationships due to new
quotas, tax rates, exchange rates and other factors which will come with EU
membership.
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The recent performance of the German economy must be evaluated within the
context of the 1990 reunification of the eastern and western states. GDP growth
dropped markedly during the early years of reunification. Industry in Eastern
Germany is still catching up. Workers in Eastern Germany earn two-thirds of
western wages but produce only half as much. In addition, one of the byproducts
of assimilating East Germany into the state has been the need to restructure
many of the government services to accommodate the new and substantially less
affluent citizens. Significant tax and welfare reforms have yet to be
undertaken, and pressure is mounting on the government to address these issues.
Unemployment rates have begun to cause some discontent among German citizens
whose culture generally places strong emphasis on a social compact. Any
dissatisfaction could be expressed at the polls during the 1998 elections.
Germany is faced with other significant economic challenges. Unemployment is
currently above 12% as the country experiences its longest period of slow growth
since the Second World War. The government's ability to deal with the problem is
limited by its efforts to meet the stringent Maastricht criteria for
convergence. There are also growing concerns about the exodus of German
companies relocating abroad in order to avoid the country's high labor costs. In
the longer run, Germany's government must alter the peculiar mix of capitalism,
welfarism and consensus that sets the country apart. Those decisions will be
politically sensitive - especially if they antagonize the powerful trade unions
or the country's many family-run firms.
Germany's stock market has enjoyed dramatic growth in volume as the main DAX
index has soared over the past two years. Much of the market's strength has been
attributed to the dollar's recovery and rising corporate earnings. In addition,
a number of changes have occurred recently to support the share-buying explosion
and to establish a German equity culture. A number of initial public offerings
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were launched as the government sought to divest itself of ownership in such
businesses as the nation's telephone utility and post office businesses to ease
budgetary pressures. The government also created a supervisory authority which
has outlawed insider trading and established stiffer company reporting standards
intended to further increase the appeal of Germany's stock market. Nevertheless,
while there has been progress in broadening the investor base, shares remain
overwhelmingly in the hands of institutions and companies.
The German central bank is one of the world's strongest and most independent.
Their high interest rates have contributed to a controlled growth of the stock
market and a steadily decreasing inflation rate. Keeping the Deutsche Mark
strong in leading up to EMU has been a priority for the bank. Nevertheless,
exports have thrived despite the currency's strong position.
A founding member of the EU and the most ardent proponent of EMU, Germany is
seen as the primary player in Union economics and politics. Seeking to
consolidate this position, recent government policy has put a strong emphasis on
the maintenance of a strong currency and the achievement of the Maastricht
criteria.
NORDIC COUNTRIES. Increasing economic globalization and the expansion of the
EU have forced the Nordic Countries to scale back their historically liberal
welfare spending policies. While public spending has dropped from average
levels, the cutbacks in social programs have sparked drops in domestic demand
and increases in unemployment. Nevertheless, the Nordic economies are
experiencing positive growth fueled largely by strong exports and low interest
rates. The approaching EMU deadline is putting pressure on each nation to
maintain their economies in line with requirements of the Maastricht treaty
criteria and the fiscal and political issues remain central in political
debates.
Of the Nordic countries, Finland, Denmark and Sweden are all members of the
EU. Only Norway has elected not to join. However, the decision likely will not
isolate the Norwegian economy from those of its Nordic neighbors. The country
maintains a "shadow membership" in the EU, by which it seeks to stay as closely
informed as possible and to make its voice heard on the issues. This may ensure
that it will become more closely aligned with the rest of Europe as time passes.
One significant aspect of opting out of the EU is that the central bank is free
to pursue its own agenda, such as setting inflation targets as opposed to
exchange rate targets. Inflation patterns and currency stability could prove to
be issues that may separate the policy decisions of Norway from the other Nordic
countries.
Politically, the countries of this region are historically known for their
approach to policy making that emphasizes consensus. The most common type of
government among the Nordic countries is dominated by long-standing,
left-of-center parties which often align themselves with smaller centrist
parties for majority support. The landscape, however, is so fractured that
governing from a minority position is common. The absence of a clear majority
party slows and sometimes arrests policy making. The strongest opposition comes
from traditional European conservative parties, which have gained support in
recent years with the decline of the welfare state and the need for the
libertarian policies necessary to compete and integrate with free markets. None
of the Nordic countries face any serious risk of any anti-democratic political
change. However, in Sweden, the prospects of the present government will depend
on its ability to create more jobs and to prepare the economy for EMU. A large
minority of voters are also disappointed about the benefits which membership in
the EU was expected to bring and have been increasingly voicing anti-EU
sentiments. However, in May 1998, Sweden and its fellow applicants, Finland and
Denmark, were formally admitted in the "first wave" of the EMU.
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Industry in the region is heavily resource-oriented. Denmark's agricultural
sector remains the backbone of the economy although other industries have been
developing rapidly in recent years, with engineering, food processing,
pharmaceuticals, brewing and shipbuilding gaining in importance. Finland's major
industry is forestry which supplies a large paper and timber products sector. It
also produces household goods and telecommunications equipment and has an
extremely important heavy goods sector producing ships, cement, steel and
machine tools. In Sweden, the manufacturing sector dominates the economy and
includes major industries which range from motor vehicles to aerospace,
chemicals, pharmaceuticals, timber, pulp and paper. Several of the country's
export-oriented industries (in particular forestry, mining and steel) are
suffering as the country's high wages squeeze them out of foreign markets.
Norway's oil- driven economy has provided its citizens with one of the highest
standards of living in the world. However, they must prepare for the time, due
to arrive early in the next century, when their vast reserves run out. Reliance
on exports concentrated in a few sectors tie these countries closely to one
another.
Economically, the Nordic countries are strong export economies that take
advantage of their abundant natural resources. They are also very closely tied
both to each other and to the rest of Europe. Most countries have witnessed low
levels of positive growth in the last six years. Finland is the exception. As a
significant portion of its trade is with Russia, Finland suffered in the early
years of the collapse of the Soviet Union. However, in the past two years its
economy has recorded some of the highest growth rates in Western Europe while
having the lowest rate of inflation. Similarly, after five years of recession,
the overall outlook for the Swedish economy is also vastly improved. A stringent
package of spending cuts and tax increases has brought down the budget deficit
to a level that is well within the EMU target. Exports are recovering as other
parts of Europe are coming out of recession and its inflation is among the
lowest in Western Europe. However, the one weak spot in both country's economies
is a persistently high unemployment rate. Finland's unemployment, at 17%, is the
second highest in Europe after Spain, and Finland's rate represents only a
marginal improvement over the previous year. Norway's oil driven economy is the
envy of many and unemployment is just a little over five percent.
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A portion of the region's unemployment woes can be attributed to the cultural
ethic which was advanced during the years of the welfare state. Subsequent cuts
in public spending, particularly in those sectors that traditionally rely on
large government spending, exacerbated the problem. Labor market reform will be
a critical issue in these countries as public spending is cut back. Pensions and
structural issues such as union regulations all need to be reformed, a task,
which brings both challenges and unpopularity to the government that accepts it.
Not only will labor market reforms give governments a daunting challenge; they
could also cause the public to regret their participation in the EMU. One
positive point is that the countries boast very high standards of living, which
create healthy and highly educated workforces.
The stock markets in Scandinavia are of medium size, and frequently are
strongly influenced by a small number of large multinational firms. For example,
in Sweden thirty firms constituted 75% of the market's total capitalization and
market turnover in 1997. Weighing heavily in the equity markets are the
electronics, forest products, mining and manufacturing sectors. Market
capitalization is highest in Sweden at $273 billion, while the others are
between $74 and $94 billion. Sweden also leads in numbers of firms (261) listed.
Other country's listings range from 126 (Finland) to 249 (Denmark). Performance
of Nordic country indexes tend to be skewed owing to the dominant weightings
that a few large companies have in the index. For example, the market
capitalization of Finnish telecommunications equipment manufacturer Nokia
comprises about one-third of the total market capitalization of the Finnish
exchange and has a substantial impact upon the performance of the countries in
the HEX Index.
UNITED KINGDOM. The United Kingdom is the world's sixth largest economy and
is home to one of the oldest, most established, and most active stock markets.
An island nation, it built an empire of strategically located trading posts such
as Hong Kong and India. While today the empire is largely dissolved, trade
remains a very key component of the U.K. economy. Strong domestic sectors are
services, natural energy resources, and heavy industry, including steel, autos,
and machinery. Imports generally emphasize food and manufacturing components.
The United Kingdom's trading partners are predominately established market
economies, such as the United States, Japan, and other member countries of the
European Union. The United Kingdom, via the North Sea, also has substantial
petroleum resources.
The London Stock Exchange is comprised of six offices scattered throughout
Great Britain and Northern Ireland. It lists over 2900 firms, and trades both
foreign and domestic securities as well as securities issued by the British
Government. A vast majority of the firms listed (80%) are from the United
Kingdom. Total market capitalization in 1997 was over $5,440 billion. Such size
prevents the stock market from being overly sensitive to the performance of
individual firms.
In 1997 the U.K. posted its sixth year of recovery with GDP growth of 3.5%,
the third highest in the EU. The labor market also appears to have improved as
pay settlements and wages remain under control despite the employment rate
falling from 6.5% to 5% over the year. The strengthening economy prompted a
sharp acceleration in consumer spending and, in response, the nation's Monetary
Policy Committee was forced to raise base rates. The interest rate rise added
fuel to an already robust sterling which rose 8.6% in 1997 after appreciating by
15.6% in 1996. This proved particularly damaging to the manufacturing sector
and, although exports held up well during the year, there were early indications
that a decline was underway. Inflation is low, making the country attractive for
foreign investment. Investment is especially attractive to the United States,
with which the United Kingdom shares many market similarities. Each country is
the other's largest foreign investment partner.
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Under Conservative Party leadership in the early 1980s, the United Kingdom
privatized many state-run utilities, such as British Gas and British Telecom.
The success of these efforts is evidence both of the strong entrepreneurial
spirit of British society and also a fundamental rejection of the welfare state
policies that dominated the scene in the early post-war period. Even today, the
Labour Party has shed much of its socialist economic platform, reflecting a
strong break away from policies that continue to be popular in other European
countries. Eager to attract foreign investment the new administration is not
expected to undo any of the major reforms put in place by the Conservatives
during their last 18 years in power. Some changes could include an increase in
spending on social programs, a slowing of privatization, and an increase in
corporate taxes. Tight monetary policy and interest rate hikes could be used to
keep inflation below the government's self-imposed 2.5% ceiling. In addition,
the government will probably wish to rebuild ties with the rest of the EU and
has already taken steps to get the pound back into the European system by
increasing the independence of the country's central bank.
Nevertheless, there appears to be some nervousness among many investors who
see the U.K. market lagging behind the continental European stock markets where
they see more compelling prospects for economic growth. In addition, the
manufacturing industry is suffering from the pound's lofty valuation and many
fear that an economic slowdown could spread to the services sector.
The political scene in London is largely shaped by positions regarding EMU.
Pro Europe MPs in the Tory opposition leadership were marginalized after the
1997 election, further polarizing the positions of the two parties. Despite this
expression of support, the United Kingdom continues to be overtly less
enthusiastic about EMU than other countries in Europe and has not committed
itself to immediately joining the new currency once it is established. While the
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new government has stated that it hopes to meet the Maastricht criteria, it is
less a self-imposed pressure on the U.K. government than it is for other
countries in the Union. Signing on to the EU Social Charter would neutralize the
policies which have set the United Kingdom above other countries in attracting
investment, such as wages and employment conditions.
SPECIAL CONSIDERATIONS REGARDING JAPAN, THE PACIFIC BASIN, AND SOUTHEAST ASIA
Asia has undergone an impressive economic transformation in the past decade.
Many developing economies, utilizing substantial foreign investments,
established themselves as inexpensive producers of manufactured and
re-manufactured consumer goods for export. As household incomes rose, middle
classes increased, stimulating domestic consumption. In recent years, large
projects in infrastructure and energy resource development have been undertaken,
and have benefited from cheap labor, foreign investment, and a business friendly
regulatory environment. During the course of development, democratic governments
fought to maintain the stability and control necessary to attract investment and
provide labor. Subsequently, Asian countries today are coming under increasing,
if inconsistent, pressure from western governments regarding human rights
practices.
Manufacturing exports declined significantly in 1997, due to drops in demand,
increased competition, and strong performance of the U.S. dollar. This
significant decline is particularly true of electronics, a critical industry for
several Asian economies. Declines in exports reveal how much of the recent
growth in these countries is dependent on their trading partners. Many Asian
exports are priced in U.S. dollars, while the majority of its imports are paid
for in local currencies. A stable exchange rate between the U.S. dollar and
Asian currencies is important to Asian trade balances.
Despite the impressive economic growth experienced by Asia's emerging
economies, currency and economic concerns have recently roiled these markets.
Over the summer of 1997, a plunge in Thailand's currency set off a wave of
currency depreciations throughout South and Southeast Asia. The Thai crisis was
brought on by the country's failure to take steps to curb its current-account
deficit, reduce short-term foreign borrowing and strengthen its troubled banking
industry, which was burdened by speculative property loans. Most of Southeast
Asia's stock markets tumbled in reaction to these events. Investors were heavy
sellers as they became increasingly concerned that other countries in the
region, faced with similar problems, would have to allow their currencies to
weaken further or take steps that would choke off economic growth and erode
company profits. For U.S. investors, the impact of the market declines were
further exacerbated by the effect of the decline in the value of local
currencies versus the U.S. dollar.
The same kind of concerns that effected Thailand and other Southeast Asian
countries subsequently spread to North Asia. To widely varying degrees, Taiwan,
South Korea and Hong Kong all faced related currency and/or equity market
declines. Due to continued weakness in the Japanese economy combined with the
reliance of Asian economies on intra-Asian trade and capital flows, most of the
region was mired in their worst recessions since World War II.
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Investors continue to face considerable risk in Asian markets as political,
economic and currency turmoil has continued to undermine market valuations
throughout the first half of 1998. Rising unemployment, food shortages and
declining purchasing power could lead to social unrest and threaten the orderly
functioning of government. Currency devaluations also increase pressure on both
the consumers who must pay more for imported goods and on many businesses that
must deal with the rising costs of raw materials. For U.S. investors, weakening
local currencies erode their returns in these markets upon currency translation.
Certainly, the resolve of the region's governments to adhere to International
Monetary Fund-mandated benchmarks will be sorely tested, as their implementation
could further exacerbate these pressures on the nation's populace and
businesses. In addition, Japan's paralysis is fast becoming a problem for Asia.
Worsening Japanese banking problems could lead to a contraction of credit for
all of Asia and slow rehabilitation in the region. Similarly, a significant
portion of both domestic and foreign investors have fled these markets in favor
of safer havens outside of the region and will not likely return until they see
more evidence that these problems are being effectively addressed. The scope and
magnitude of the tasks that these countries face in resolving their problems
could mean that investors will see a continuation of high market volatility over
an extended period.
JAPAN. A country of 126 million with a labor force of 64 million people,
Japan is renowned as the preeminent economic miracle of the post-war era. Fueled
by public investment, protectionist trade policies, and innovative management
styles, the Japanese economy has transformed itself since the World War II into
the world's second largest economy. An island nation with limited natural
resources, Japan has developed a strong heavy industrial sector and is highly
dependent on international trade. Strong domestic industries are automotive,
electronics, and metals. Needed imports revolve around raw materials such as
oil, forest products, and iron ore. Subsequently, Japan is sensitive to
fluctuations in commodity prices. With only 19% of its land suitable for
cultivation, the agricultural industry is small and largely protected. While the
United States is Japan's largest single trading partner, close to half of
Japan's trade is conducted with developing nations, almost all of which are in
southeast Asia. Investment patterns generally mirror these trade relationships.
Japan has over $100 billion of direct investment in the United States.
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The Tokyo Stock Exchange (TSE) is the largest of eight exchanges in Japan.
The exchanges divide the market for domestic stocks into two sections, with
larger companies assigned to the first section and newly listed or smaller
companies assigned to the second. In 1997, 1,805 firms were listed on the TSE,
96% of which were domestic. Some believe that the TSE has a tendency to be
strongly influenced by the performance of a small circle of large cap firms that
dominate the market. The two key indexes are the Tokyo Stock Price Index (TOPIX)
and the Nikkei. In 1997, TSE performance was disappointing, with the TOPIX down
28% for the year .
Since Japan's bubble economy collapsed seven years ago, the nation has
drifted between modest growth and recession. By mid-year 1998 the world's second
largest economic power had slipped into its deepest recession since World War
II. Much of the blame can be placed on government inaction in implementing
long-neglected structural reforms despite strong and persistent proddings from
the International Monetary Fund and the G-7 nations. Steps have been taken to
institute deregulation and liberalization of protected areas of the economy, but
the pace of change has been disappointedly slow.
Unemployment levels, already at record rates when measured by the broader
criteria used in many other countries, have been an area of increasing concern
and a major cause of recent voter dissatisfaction with recent governments.
However, the most pressing need for action is the daunting task of overhauling
the nation's financial institutions and securing public support for
taxpayer-funded bailouts. Banks, in particular, must dispose of their huge
overhang of bad loans and trim their balance sheets in preparation for greater
competition from foreign financial institutions as more areas of the financial
sector are opened. Successful financial sector reform would allow Japan's
financial institutions to act as a catalyst for economic recovery at home and
across the troubled Asian region. Further steps toward complete financial
liberalization are in the initial stages of implementation. Proposals under
consideration could lower many barriers allowing foreign firms greater and
cheaper access to funds, and the recent relaxation of restrictions on the
insurance market also promise greater access to foreign companies. A large
factor in determining the pace and scope of recovery is the government's
handling of deregulation programs, a delicate task given the recent changes in
Japanese politics.
Recent political initiatives in Japan have fundamentally transformed Japanese
political life, ushering in a new attitude which is strongly reverberating in
the economy. The Japanese Parliament (the Diet) had been consistently dominated
by the Liberal Democratic Party (LDP) since 1955. The LDP dynasty, recently
fraught with scandal, corruption, accusations of maintaining a virtual monopoly,
effectively ended in 1994 as a result of electoral reform measures that brought
Diet seats to previously underrepresented areas. The first election under this
new system was held in October 1996. While the LDP remained as the ruling party,
it did so from a minority position. A key result of the electoral reforms has
been a strengthening of ideas of opposition parties. Indeed, many of the LDP's
recent reforms originated with the leaders of the opposition New Frontier Party.
The LDP's ability to consistently produce bold innovations in a politically
competitive environment is untested. The opposition parties suffer from
structural and organizational weaknesses. Infighting and defections are common.
This inexperience with a true multi-party system has caused the rise and fall of
four coalition governments in recent years. Between the adjusting of the
monolithic LDP to a more demanding and competitive system and the settling of
the opposition parties, Japan's political environment remains unstable. The
desire for electoral reform arose out of what many see as a basic change in
Japanese public opinion in recent years. Faced with recurring scandal and
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corruption, Japanese society has come to demand more accountability from their
leaders, more transparency in their institutions, and less interference from
their intensely bureaucratic government. This attitude was reflected in the
results of the recent election where candidates of the LDP party were heavily
defeated in an election for the upper house of parliament and prime minister
Hashimoto was forced to resign. The election results were considered to be a
repudiation of the government's failure to come to grips with the countries
economic decline, widening corruption scandals and a lack of any discernable
progress in addressing the nation's banking problems.
Nevertheless, sustaining reforms and recovery are not guaranteed. Drops in
consumption, increased budget deficits, or halting deregulation could exacerbate
the nation's economic woes. Furthermore, as a trade-dependent nation long used
to high levels of government protection, it is unclear how the Japanese economy
will react to the potential adoption of the trade liberalization measures which
are constantly promoted by their trading partners. In addition, as the largest
economy in a rapidly changing and often volatile region of the world, external
events such as the Korean conflict could effect Japan. As many of the
governments of Southeast Asia frequently face domestic discontent, and as many
of these countries are Japanese trading partners and investment recipients,
their internal stability and its impact on regional security are of tremendous
importance to Japan.
Also of concern are Japan's trade and current-account surpluses. If they
continue to grow, they could lead to an increase in trade friction between Japan
and the United States. Additionally, with inflationary pressures largely absent
and wholesale prices falling, Japan may be entering a period of deflation. A
deflationary environment would both hit corporate profits and increase the debt
burden of Japan's most highly leveraged companies.
CHINA AND HONG KONG. China is one of the world's last remaining communist
systems, and the only one that appears poised to endure due to its measured
embrace of capitalist institutions. It is the world's most populous nation, with
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1.22 billion people creating a workforce of 699 million people. Today's Chinese
economy, roughly separated between the largely agricultural interior provinces
and the more industrialized coastal and southern provinces, has its roots in the
reforms of the recently deceased communist leader Deng Xiaoping. Originally an
orthodox communist system, China undertook economic reforms in 1978 by providing
broad autonomy to certain industries and establishing special economic zones
(SEZs) to attract foreign investment (FDI). Attracted to low labor costs and
favorable government policies, investment flowed from many sources, with Hong
Kong, Taiwan, and the United States leading the way. Most of this investment,
has been concentrated in the southern provinces, establishing manufacturing
facilities to process goods for re-export.
The result has been a steadily high level of real GDP growth, averaging
11.35% per year so far this decade. With this growth has come a doubling of
total consumption, a tripling of real incomes for many workers, and a reduction
in the number of people living in absolute poverty from 270 to 100 million
people. Today there is a market of more than 80 million people who are now able
to afford middle class western goods.
Such success has not come without negatives. As a communist system in
transition, there still exist high levels of subsidies to state-owned
enterprises (SOE) which are not productive. At the end of 1997, it was reported
that close to half of the SOEs ran losses. In addition, the inefficiencies
endemic to communist systems, with their parallel (thus redundant) political,
economic and governmental policy bodies, contribute to high levels of inflation.
Fighting inflation and attempting to cool runaway growth has forced the
government to repeatedly implement periods of fiscal and monetary austerity.
Periodic intervention seems to be their chosen method of guarding against
overheating.
Performance in 1997 reflects this dynamic between growth, inflation, and the
government's attempts to control them. Growth slowed to 9.1%, largely as a
result of a tightening of credits to SOEs. Policy was a mix between a loose
monetary stance and some relatively austere fiscal positions. While growth was a
priority, it came at the cost of double-digit inflation.
China has two stock exchanges that are set up to accommodate foreign
investment, in Shenzhen and in Shanghai. In both cases, foreign trading is
limited to a special class of shares (Class B) which was created for that
purpose. Only foreign investors may own Class B shares, but the government must
approve sales of Class B shares among foreign investors. As of December 1997,
there were 51 companies with Class B shares on the two exchanges, for a total
Class B market capitalization of $2.1 billion U.S. dollars. In 1997, all of
China's stock market indices finished the year below the level at which they
began it. These markets were buoyed by strong speculative buying in the year's
second quarter. Market valuations peaked in September and were subsequently hit
by a heavy sell off from October onwards.
In Shanghai, all "B" shares are denominated in Chinese renminbi but all
transactions in "B" shares must be settled in U.S. dollars. All distributions
made on "B" shares are also payable in U.S. dollars, the exchange rate being the
weighted average exchange rate for the U.S. dollar as published by the Shanghai
Foreign Exchange Adjustment Center. In Shenzhen, the purchase and sale prices
for "B" shares are quoted in Hong Kong dollars. Dividends and other lawful
revenue derived from "B" shares are calculated in renminbi but payable in Hong
Kong dollars, the rate of exchange being the average rate published by the
Shenzhen Foreign Exchange Adjustment Center. There are no foreign exchange
restrictions on the repatriation of gains made on or income derived from "B"
shares, subject to the repayment of taxes imposed by China thereon.
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China's proven ability to nurture domestic consumption and expand export
markets leads many to believe that the bulk of its growth has yet to be seen.
Most sources, notably the World Bank, predict future growth levels through the
year 2000 of over 7%. This auspicious indicator notwithstanding, there are a few
special considerations regarding China's future. While this list is not
all-inclusive, it does highlight some internal and external forces that have a
strong influence on the country's future.
To begin with the internal issues, one matter is that infrastructure
bottlenecks could prove to be a problem, as most FDI has been concentrated in
manufacturing and industry at the expense of badly needed transportation and
power improvements. Secondly, as with all transition economies, the ability to
develop and sustain a credible legal, regulatory, and tax system could influence
the course of investments. Third, environmentalists warn of the current and
looming problems regarding pollution and resource destruction, a common result
of such industrial growth in developing economies which can't afford effective
environmental protection. This is a particularly noteworthy issue, given the
size of the country's agricultural sector. Lastly, given China's unique method
of transition there exists the possibility that further economic liberalization
could give rise to new social issues which have heretofore been effectively
mitigated. One such issue is the possible dismantling of inefficient state-owned
enterprises, something which is potentially socially explosive given the
communist policy of providing social welfare through the firm. Exposing what
many economists feel is a high level of open unemployment and widening the gap
between the newly empowered business class and the disenfranchised could
pressure the government to retreat on the road to reform and continue with
massive state spending.
Regarding external issues, China's position in the world economy and its
relationship with the United States also have a strong influence on it's
economic performance. The country has recently enjoyed an almost uninterrupted
positive trade balance. As the largest country amidst the fastest growing region
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in the world, China and its multi-million person ethnic diaspora have a
significant role to play in Asian growth. Should China ascend to become a member
of the World Trade Organization (WTO), as it desires, such movements of capital
and goods will become easier.
Export growth in China has recently been subject to fluctuations caused by
external political events, such as the U.S. elections and debates over human
rights issues. U.S. policy (specifically most favored nation status) is
frequently reconsidered by various elements of the U.S. government in reaction
to a variety of issues, from nuclear proliferation to Tibetan rights.
Significant changes in U.S. policy could impact China's growth, as close to 9%
of their GDP is trade with the U.S. and the U.S. represents the third biggest
investor in China.
Perhaps the strongest influence on the Chinese economy is the policy that is
set by the political leaders in Beijing and this is somewhat of an open question
as the death of Deng has created a slight vacuum in Chinese political society. A
large part of Deng's strength derived from a newly empowered business class
endeared to him and it is unclear if any of his successors can harness this
loyalty as effectively as he did. Sustained growth is one possible way to win
over this constituency, leading many to believe that the future Chinese
leadership will respect market forces at least as much as Deng did. Choosing
between double digit growth and reduced inflation could continue to be a central
economic question, with 1997 (Deng influenced) decisions pointing to an
acceptance of lower, albeit still high, GDP growth.
Another key political player is the Chinese army. With provocative situations
occurring in Taiwan and the Korean peninsula, and with ever present pressure
from internal democrats, the military is in a position of leverage regarding the
shaping of the future political scene. Finally, there is the communist party,
long seen as a loser amongst the beneficiaries of Deng's reforms. Many view the
battle between the party and the middle class as a zero sum game and as the
leadership settles, respective alliances and constituencies could determine how
much the government pursues its growth strategy.
As with almost all foreign investments, U.S. investors face the significant
risk of currency devaluation by the Chinese government. Despite assurances from
officials reemphasizing China's policy commitment to maintain the current
exchange rate of the renminbi against the U.S. dollar, many observers believe
that this policy will be soon tested as China monitors the effect of regional
devaluations on exports. Government authorities feel that China has boosted its
international reputation by refraining from devaluing the renminbi at a time
when such a move could further destabilize the currencies of its neighbors.
Nevertheless, Chinese authorities have recently hinted that a continued slide in
the Japanese yen would make it very difficult for them to maintain their promise
not to devalue. If efforts to prevent the slide in the yen fail, then China may
be pushed into devaluing their currency. For U.S. investors, a devaluation would
erode the investment returns on their investments.
The last significant force in the Chinese economy is the acquisition on July
1, 1997 of Hong Kong as a Special Autonomous Region (SAR). For the past 99 years
as a British Colony, Hong Kong has established itself as the world's freest
market and more recently as an economic gateway between China and the west.
A tiny, 814 square mile area adjacent to the coast of southern China with a
population of 6.3 million, Hong Kong has a long established history as a global
trading center. Originally a manufacturing-based economy; most of these
businesses have migrated to southern China. In their place has emerged a
developed, mature service economy which currently accounts for approximately 80%
of its Gross Domestic Product. Hong Kong trades over $400 billion in goods and
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services each year with countries throughout the world, notably China, Japan,
and the U.S. Its leading exports are textiles and electronics while imports tend
to revolve around foodstuffs and raw materials. Hong Kong's currency, the HK
dollar, was pegged to the US dollar at HK7.7=$1 in 1983 and investors consider
it to be a stable mechanism in enduring confidence lapses and speculator
attacks. The operation of a currency board and accumulation of U.S. dollars in
its monetary fund is partly responsible for this stability.
The stock market (SEHK) listed 658 publicly traded companies by the end of
1997, with total capitalization at $413 billion U.S. dollars. A significant
portion of SEHK firms are in real estate, and are sensitive to fluctuations in
the property markets. 1997 was a tumultuous year for the Hong Kong stock market
as a speculative attack on the Hong Kong dollar in October provoked a global
sell-off in equities. Investors were shocked as the Hong Kong market, long
regarded as a safe-haven, plunged 40% in October. The stock market's decline and
the attack on the local currency sent interest rates soaring, precipitating an
erosion in local property values. This in turn put additional pressure on the
banking sector which is heavily geared to real estate. The Hong Kong market's
dramatic downturn illustrates how vulnerable it is to the Asian region's
economic problems. The structural problems besetting Hong Kong's neighbors in
Southeast and Northeast Asia may not be quickly resolved. Exports to the Asian
region may remain depressed as the process of economic reform in countries such
as Thailand, Malaysia, Indonesia, Japan and South Korea will likely hold back
economic growth in the area. Accordingly, Hong Kong and China will likely be
more dependent upon demand from the U.S. and Europe for some time to come.
As a trade center, Hong Kong's economy is very closely tied to that of its
trading partners, particularly China and the United States. In the wake of
Deng's reforms, Hong Kong and China have become increasingly interdependent
economically. Currently, China is Hong Kong's largest trading partner. After
Taiwan, Hong Kong is the largest foreign investor in China, accounting for about
60 percent of overall foreign direct investment. Hong Kong plays a particularly
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significant role as an intermediary in U.S.-China trade. In 1996, it handled 56%
of China's exports to the U.S. and 49% of Chinese imports from the U.S.
The critical question regarding the future of Hong Kong is how the Chinese
leadership will exert its influence now that it has become a Special Autonomous
Region (SAR). This new status is in accordance with pledges made at the Joint
Declaration on the Question of Hong Kong made by the Chinese and British
governments in 1984. Leading up to the hand over of the colony, the Chinese
government has pledged to uphold the Basic Law of 1990 which states that Hong
Kong's status as an unfettered financial center will remain intact for at least
50 years after 1997. Part of this status includes retaining the legal, financial
and monetary systems (specifically the HK$/US$ peg) which guarantee economic
freedom and foster market expansion.
Many investors and citizens are closely monitoring Chinese actions in order
to assess their actual commitment to these principles. Already there is evidence
of a clear, if slow, current of political change coming from Beijing. Certain
actions, such as the curbing of media freedoms, indicate that there is the
possibility of significant interference from communist authorities. More
significant was the clash between the U.K. and Chinese governments over China's
abolition of the elected legislature and subsequent installation of governmental
leaders in both the executive and the legislature who are directly appointed by
Beijing. Mr. Tung Chee-hwa, appointed as the first Chief Executive of the SAR,
has surrounded himself with like-minded Machiavellian figures who have strong
ties to both market successes and Beijing leaders. They are portrayed as
believing in the powers of capitalism and central authority, if not democracy,
leading some to speculate that the SAR could develop into a South Korean style
of corporatism which preserves the economic status quo without incorporating
further political freedoms.
In assessing the prospects for Hong Kong's future, it must be noted that
China has a very strong interest in a prosperous SAR. Particularly if Beijing
pursues a growth strategy as it has in the past, Hong Kong can be a key agent in
China's economic policy. Desire for investment and new technologies necessary
for modernization is a strong incentive to send positive signals through the
treatment of Hong Kong. This is reinforced by the respect Hong Kong is due given
its role in China's recent dynamic performance.
To be sure, there are more adamant concerns over the effect of the
acquisition. Many are skeptical of Beijing's ability to leave the currency
alone. Some note the continuous drop in GDP as evidence that Hong Kong has yet
to mature as a service economy and that the workforce hasn't fully adjusted to
the switch out of manufacturing. Additionally, by tying Hong Kong so closely
with China, it now must weather the ups and downs of Beijing's relationship with
the U.S. Most Favored Nation Status now means just as much, if not more, to the
SAR than it does to Beijing, with some asserting that revoking MFN could result
in substantial losses in trade, income, and jobs.
Hong Kong's competitive advantage has traditionally been a mix of geography,
market freedoms and entrepreneurial spirit. The preservation of these advantages
is now a function of the island's independence from Beijing. Today's investors
will be vigilant in measuring how much of that independence is retained after
July 1, 1997.
AUSTRALIA. Australia is a 3 million square mile continent (about the size of
the 48 continental United States) with a predominantly European ethnic
population of 18.2 million people. A member of the British Commonwealth, its
government is a democratic, federal-state system.
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The country has a western style capitalist economy with a workforce of 9.2
million people that is concentrated in services, mining, and agriculture.
Australia's large agricultural sector specializes in wheat and sheep rearing and
together, these two activities account for more than half of the country's
export revenues. Australia also possesses abundant natural resources such as
bauxite, coal, iron ore, copper, tin, silver, uranium, nickel, tungsten, mineral
sands, lead, zinc, diamonds, natural gas, and oil. The health of the country's
domestic economy is particularly sensitive to movements in the world prices of
these commodities. Primary trading partners are the United States, Japan, South
Korea, New Zealand, the United Kingdom and Germany. Imports revolve around
machinery and high technology equipment.
Historically, Australia's strong points were its agricultural and mining
sectors. While this is still true to a large extent, the government managed to
boost its manufacturing sector by undertaking protective measures in the 1970's
and early 1980's. These have subsequently been liberalized in an effort to spur
growth in the industrial sector. Today's economy is more diverse, as
manufactures' share of total exports is increasing. Part of the government's
effort to make manufacturing more competitive was a floating of the Australian
dollar in 1984, precipitating an initial depreciation, and a campaign to reduce
taxes. Such reforms have attracted foreign investment, particularly in the
transport and manufacturing sectors. Restrictions do exist on investment in
certain areas as media, mining and some real estate.
With inflation well under control but unemployment stubbornly high and signs
of cyclical slack in the economy, Australia's monetary policy is focused on
preserving the low inflation environment while keeping monetary conditions
conducive to stronger economic growth. The government has set a goal of
achieving a government budget surplus in fiscal year 1998/1999.
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Australia is fully integrated into the world economy, participating in GATT
and also more regional trade associations such as the Asia and the Pacific
Economic Cooperation (APEC) forum. Future growth could result from their
movement towards regional economic liberalization, but a countervailing force is
the reality that some export markets in Europe could be lost to continued
European economic integration.
After suffering a significant recession in 1990-91, the Australian economy
has enjoyed six years of expansion. The medium-term outlook appears favorable,
with domestic spending supported by low interest rates, improving consumer
confidence and a strengthening labor market. GDP growth has increased steadily
throughout 1997. However, weakness in commodity prices, particularly metal
prices, coupled with an increase in the nation's current account deficit have
placed significant pressure on the Australian dollar.
Investors should be aware that, while Australia's prospects for strong
economic growth appear favorable over the long-term, many sectors currently face
significant risks arising from the recent turbulence in Asian countries, which
account altogether for almost 60 percent of Australia's exports. While
projections already embody a more subdued outlook for growth in these countries,
there is a risk of this outlook deteriorating further, especially in Japan and
Korea.
Due to the large position that the agriculture and natural resource sectors
have in the nation's export driven economy, any weakness in commodity prices may
negatively impact both the economy and stock prices. In addition, United States
investors face the risk that their investment returns from investments in
Australia could be eroded if the Australian currency declines relative to the
United States dollar.
INDONESIA. Indonesia is a country that encompasses over 17,000 islands on
which live 195 million people. It is a mixed economy that balances free
enterprise with significant government intervention. Deregulation policies,
diversification of strong domestic sectors, and investment in infrastructure
projects have all contributed to high levels of growth since the late 1980's.
Indonesia's economy grew at 7.1% in 1996, the exact average of its performance
for the current decade. Growth in the 1990's had been fairly steady, hovering
between 6.5-7.5% for the most part, peaking at 8.1% in 1995. Moderate growth in
investment, including public investment, and also in import growth, helped to
slowdown GDP growth. Growth has been accompanied by moderately high levels of
inflation.
In recent years, Indonesia had been undergoing a diversification of the core
of its economy. No longer strictly revolving around oil and textiles, it is now
gaining strength in high technology manufactures, such as electronics. Indonesia
consistently runs a positive trade balance. Strong export performers are oil,
gas, and textiles and apparel. Oil, once responsible for 80% of export revenues,
now accounts for only 25%, an indication of how far other (mostly manufacturing
and apparel) sectors have developed. Main imports are raw materials and capital
goods.
However, as with many of its Asian neighbors, Indonesia's bright prospects
came to a sudden halt in August of 1997 when the plunging Thai baht began to
destabilize the rupiah. By mid-year 1998 the local currency had fallen more than
80% against the dollar, and hugely increased the cost of servicing foreign
debts; a collapse of the real economy, and a growing number of bad loans.
Various central bank initiatives, including a doubling of interest rates, failed
to halt the currency's depreciation. The nation's banks, unable to service their
extensive short term borrowings, were suddenly in danger of collapse. Of more
than 200 local banks, a mere handful were estimated to be solvent at mid-year
1998.
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The social effects of this decline have been devastating. By the end of 1998
the government expects 47% of the population to be living below the poverty line
and unemployment is expected to surpass 20% of the workforce. This has led to an
increase in social tensions and food riots and large-scale strikes have broken
out sporadically. Rioting and attacks upon the countries business oriented
ethnic Chinese population have prompted as many as 80,000 to flee the country.
Rising popular opposition forced President Suharto to resign less than three
months after being appointed to his seventh consecutive five-year term and was
replaced by his vice-president, B. J. Habibie. The political upheaval and
resulting uncertainty has resulted in the further erosion in public confidence
at home and abroad.
The breakdown in public confidence in the Indonesian economy will likely be
difficult to reverse, and will prolong the period of recovery. Resumption of
lending by multilateral institutions under a rescue package drawn up by the
International Monetary Fund (IMF) may speed up the process of restoring the
faith in the government's efforts to shore up the banking system. Nevertheless,
even if the two critical outstanding issues of restructuring the corporate
sector's external debt and shoring up the banking sector can be resolved this
year, the economy will remain weak in 1999 and recover only slowly in the
following years.
The Indonesian stock market plunged to record lows in 1997 under the combined
impact of the country's economic implosion, political uncertainty and social
unrest. The market's retreat continued into mid-1998 as domestic and foreign
investors fled the market for safer havens overseas. While many investors
believe that the market's steep decline has brought valuations of a number of
Indonesian companies to very attractive levels, there remains considerable risk
particularly for foreign investors. As with most foreign investments, United
States investors could see their investment returns eroded if the Indonesian
currency declines in value relative to the U.S. dollar. Secondly, any escalation
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of rioting and other forms of social unrest could be a major obstacle in the
path of economic recovery. Thirdly, many question the will of the Indonesian
government and its people to accept the conditions of economic reform as
mandated by the IMF. Fourth, the Indonesian economy, currency and securities
markets are extremely sensitive to events that take place within the Asian
region and their fortunes are somewhat dependent upon how well other Asian
nations resolve their own economic and currency problems.
MALAYSIA. 1997 saw Malaysia's GDP growth slow to 7.4%, down from over 8.2% in
1996 and 9.5% in 1995. Inflation has been kept relatively low at 3.8%.
Performance in 1996 avoided the economy's potential overheating as export
growth, investment, and consumption all slowed. A large part of Malaysia's
recent growth is due to its manufacturing industries, particularly electronics
and semiconductors. This has led to an increased reliance on imports; thus the
economy is sensitive to shifts in foreign production and demand. This is
particularly true regarding its main trading partners: the United States, Japan,
and Singapore. Such shifts were partly responsible for the slowdown in 1997. In
addition, monetary policies to stem the threat of overheating were evident, but
the country still needs massive public and private investment to finance several
large infrastructure projects. Government industrial policy seeks investment to
create more value added high technology manufacturing and service sectors in
order to decrease the emphasis on low skilled manufacturing. Already U.S.
investors have invested over $9 billion, and most of this is in electronics and
energy projects.
However, like its Asian neighbors, Malaysia has stumbled in its dash to
become a developed nation by 2020. The grandiose ambitions of Malaysian Prime
Minister Mahathir Mohamad have been set back by its worst-ever currency crisis,
which also brought a sharp fall in the country's stock market. An overheated
property market, a growing current-account deficit and a highly leveraged
economy, precipitated much of the country's problems. Following the sharp
decline of Thailand's currency, the Malaysian ringgit came under severe
pressure. The Malaysian central bank attempted to defend the currency and the
resulting spikes in interbank rates marked the start of a period of escalating
interest rates. Once the central bank ceased using foreign exchange reserves to
slow the ringgit's depreciation in the region-wide currency slide, the Malaysian
currency quickly weakened versus the United States dollar and by year end had
declined by 35%.
By mid-year 1998, the outlook for the Malaysian economy remained bleak as
economists predicted that the economy would shrink by at least 5 percent this
year, the first contraction in 13 years. The likelihood that Malaysia will be
forced to seek IMF assistance is increasing. Although Malaysia does not have the
high level of foreign debt that has overwhelmed its Asian neighbors, domestic
lending, at 170 percent of GDP, was the highest in Southeast Asia when the
currency crisis struck. The nation's banks are now faced with a growing number
of unpaid loans as more businesses are struggling to stay afloat in the sagging
economic environment.
Adding to the bleak outlook is the government's seemingly confused and
erratic response to the nation's serious economic and currency crisis. The Prime
Minister is increasingly at odds with the finance minister on what policies the
country has to institute to remedy the country's serious problems. Prime
Minister Mahathir has abandoned the tight money, financially conservative
recovery policy endorsed by the IMF and has placed the blame for the nation's
troubles on foreign currency and stock market speculators. The move risks
triggering another round of currency devaluations, inflation and, in the long
run, economic collapse.
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Investors should be aware that investing in Malaysia currently entails a
number of potential risks, not the least of which is the increasingly erratic
economic policies of the Malaysian government that are counter to the advice of
the IMF and many of the developed nations. In addition, the government appears
to be escalating its hostile attitude toward foreign investors. In September of
1998 Malaysian authorities imposed new restrictions on the foreign exchange and
securities markets. Included were limitations in repatriating the investment
proceeds of foreign investors.
While the Malaysian population has been relatively passive during the first
year of the economic meltdown, there could be mounting social unrest if the
crisis is prolonged. Should the country finally adopt IMF remedies the Malaysian
people may be reluctant to accept the additional sacrifices that they will be
called upon to endure. This could seriously undermine the recovery of Malaysia's
economy as well as its currency and stock market. An increasingly hostile
government towards foreign investors could also lead to additional curbs on the
free access to their funds. As with other Asian markets, currency risk remains
substantial.
SINGAPORE. Since achieving independence from the British in 1965, Singapore
has repeatedly elected the People's Action Party (PAP) as their government. It
is a party that is so consistent it has only offered up two prime ministers in
this 32-year period. Elections in January 1997 returned the PAP to power,
signaling satisfaction with their policy of close coordination with the private
sector to stimulate investment. Typical policies include selective tax
incentives, subsidies for R&D, and joint ventures with private firms. While the
combination of consistent leadership and interventionist policies is sometimes
seen as impeding civil liberties and laissez-faire economics, it has produced an
attractive investment environment.
The Singapore economy is almost devoid of agriculture and natural resources,
not surprising given the island nation's geographic size. Its strongest sector
is manufacturing, particularly of electronics, machinery and petroleum and
chemical products. They produce 45% of the world's computer disk drives. Major
trading partners are Japan, Malaysia and the United States.
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The economic situation in Singapore registered a passable year in 1996 but
weakened in early 1997, dragged down by the downturn in the global electronics
industry. However, it ended the year on a firmer footing as real GDP growth rose
from 4.1% in the first quarter to 7% by the fourth quarter. Inflation remained
low and the current account balance maintained its large surplus. Property
values have declined recently, impacted by continuing oversupply.
Although Singapore boasts one of the strongest economies in Asia, investors
in that market face a number of possible risks. Chief among these is that the
country is not immune to the region's economic troubles, as Singapore's
neighbors account for nearly one-quarter of its trade. Any prolonged regional
economic downturn could slow its growth. In addition, Analysts believe that
there is considerable downside risk in the current Singapore dollar exchange
rate and any decline in the Singapore currency versus the U.S. dollar could
erode the investment return of United States investors in that market. Lastly,
manufacturing, a major pillar of Singapore's economy, is unlikely to sustain
growth into 1998 as recent indications point to continued excess capacity in the
computer electronics industry.
SOUTH KOREA. South Korea has been one of the more spectacular economic
stories of the post-war period. Coming out of a civil war in the mid-1950's, the
country found itself with a destroyed economy and boundaries that excluded most
of the peninsula's mineral and industrial resources. It proceeded over the next
40 years to create a society that includes a highly skilled and educated labor
force and an economy that exploited the large amounts of foreign aid given to it
by the United States and other countries. Exports of labor intensive products
such as textiles initially drove the economy and were eventually replaced by
heavy industries such as automobiles.
Hostile relations with North Korea dictate large expenditures on the military
and political uncertainty and potential famine in the north has put the south on
high alert. Any kind of significant military effort could have multiple effects,
both positive and negative, on the economy. South Korea's lack of natural
resources put a premium on imported energy products, making the economy very
sensitive to oil prices.
Since 1991, GDP growth has fluctuated widely between 5% and 9%, settling down
at 5.6% last year. Currently the labor market is in need of restructuring, and
its rigidity has hurt performance. Relations between labor and the large
conglomerates, or Chaebols, could prove to be a significant influence on future
growth. Inflation in the same period has been consistently dropping, save a
brief rise in 1994 and finished the year at 4.5%. The country consistently runs
trade deficits, and the current account deficit widened sharply in 1996, more
than doubling to $19.3 billion. South Korea's strong domestic sectors are
electronics, textiles and industrial machinery. Exports revolve around
electronics, textiles, automobiles, steel and footwear, while imports focus on
oil, food, chemicals and metals.
The stock market (Korea Stock Exchange) is currently undergoing
liberalization to include more foreign participation, which was only first
allowed in 1992, but the bond market remains off limits until 1999. Foreign
ownership has since been increased to 55% for all listed stocks except three.
The foreign ownership liberalization is in response to the KSE 1996 performance,
which was down 18%. The number of listed companies totaled 726 in 1997, a
decline of 34 from the previous year, while the market's capitalization
plummeted 70 percent from its 1996 level.
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Over the calendar year 1997, the Korean stock market extended its two-year
decline plunging by 42% to its lowest year-end level since 1986. The collapse
came as a direct result of the Asian region's currency crisis and the failure of
several Korean conglomerates. In the summer of 1997 the South Korean won hit
record lows against the U.S. dollar as a series of nationwide labor strikes
aggravated the already escalating trade deficit. Despite aggressive official
intervention to support the local currency, the won had fallen from 860 to 914
to the U.S. dollar by year-end.
The Korean market poses risks for current and prospective investors. The
Korean government will need to maintain public support to implement the radical
and difficult restructuring of the economy demanded by the IMF under a $58
million loan package. This opposition could come from the country's major
conglomerates that have yet to institute necessary restructuring initiatives,
and from workers protesting against rising unemployment.
In addition, relations with its long-standing enemy, North Korea have been
worsening as widespread famine could prompt another attack on its southern
neighbor to divert the attention of its people from their suffering. More
importantly, South Korea's heavy reliance on exporting to the Asian region holds
its economy hostage to the economic fortunes of its neighbors.
THAILAND. The Thai economy has witnessed a fundamental transition in recent
years. Traditionally it was a strong producer of textiles, minerals and
agricultural products, but more recently it has tried to build high technology
export industries. This proved particularly fortuitous in the mid 1990s when
flooding wiped out much of their traditional exports, but the newer industries
remained strong, keeping the growth rate above 8%. (This level had been achieved
through the 1990s, giving the economy a name as one of the fastest growing in
the region.) Successive governments have also taken steps toward reducing the
influence of central planning, opening its market to foreigners and abandoning
five-year plans. This restructuring is still underway, and the change can cause
difficulty at times.
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The political situation in Thailand is tenuous. Democracy has a short history
in the country, and power is alternatively obtained by the military, a
non-elected bureaucratic elite, and democratically elected officials. The
frequent transfers of power have generally gone without divisive, bloody
conflicts, but there are bitter differences between the military and the
political parties. Free elections in 1992 and again in 1995 have produced
non-military democratic leaders from different parties, a healthy sign of party
competition. More recently, the dramatic downturn in the economy generated
demands from all sectors of society for the resignation of Prime Minister
Chavalit. The worsening economic situation threatened social stability of the
nation and the Prime Minister resigned after barely one year in power.
In 1997 GDP contracted by approximately 0.3%, compared with 7.2% growth in
1996 and 8.6% in 1995. The 1997 current account deficit was 1.9% of GDP as
against 7.9% in 1996. Inflation was 5.6%, however, the government has projected
a 16.2% rate for 1998. One cause for Thailand's economic downturn was a decline
in export growth as its manufacturing industry faces stiff competition from low
priced competitors and its agriculture has suffered a severe drop in production.
In 1996, Thailand's currency, the baht, was linked to a U.S. dollar dominated
basket, and monetary policy had remained tight to keep that link strong and
avoid inflationary pressures.
The situation changed in early 1997, however, with the revelation of many bad
bank loans and a bubbling of property prices due to over-investment. Many
companies, faced with slowing exports, stopped servicing their debts. Many other
firms have stayed alive only with infusions of public cash, and the government
has been slow to let many property laden financial firms fail. The stock market
has reacted strongly, dropping to new lows for the decade. Reluctant to float
the baht, indeed promising that it wouldn't, the government relented in early
July hoping to revive export and stock market growth. The subsequent devaluation
(approximately 20% against the dollar in the first month) led to the need for a
$16 billion loan coordinated by the IMF to shore up foreign reserves. Most of
the loan came from neighboring countries led by Japan, indicating their desire
to both protect their own investments in Thailand, and also mitigate the effect
of the devaluation on their home currencies.
The total impact of the entire situation is negative, particularly on
inflation, unemployment and foreign debt. Significant turnover and a major
gamble on the currency has put the government in a precarious position,
especially given the fact that it is a six party coalition. Dissatisfaction
amongst the military, always a political factor, is high.
The new Thai government has produced mixed results in their efforts to remedy
the country's serious economic woes. Crucial to Thailand's recovery are both the
outcome of newly instituted economic and banking reforms and the outlook for
both China's and Malaysia's economies. Looking forward, currency risk remains
high and the baht will likely be highly vulnerable to regional contagion.
SPECIAL CONSIDERATIONS REGARDING LATIN AMERICA
Latin America represents one of the world's more advanced emerging markets.
With a total population of 427 million people and its abundant natural
resources, the area is a prime trading partner for the United States and Canada.
In Latin America exports represent, on average, 16.6% of GDP. Strong export
sectors are petroleum, manufactured goods, agricultural commodities such as
coffee and beef, and metals and mining products. GDP growth in Latin America as
a region was 3.4% in 1996, up from 0.1% in 1995. Recognizing the important role
of international trade as a component of GDP, the countries of Latin America
have formed strong regional trade organizations, notably MERCOSUR. Talk of
extending NAFTA down through Latin America indicates some desire to tie the
economies even closer to those of the north.
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Politically, Latin American countries generally have strong presidential
systems closely modeled after the United States. Their transition to democracy,
largely complete in most countries, nevertheless allows for a considerable
military influence, reflecting the strong authoritarian leanings of a large
portion of the population. The countries all enjoy good relations with the
United States, with whom they cooperate on a range of non-economic matters, such
as preservation of the environment and drug control. Monetarist-minded
governments were responsible for the successful staving off of contagion from
the recent currency crisis in Mexico, increasing their stature in the eyes of
most capital market participants.
ARGENTINA. Prior to 1989, Argentine politics were characterized by populist
leaders, sometimes democratically elected and sometimes not, who ruled with the
overt support of the military. Coups and outright military rule were not
uncommon. Economic polices were highly protectionist, with significant barriers
and restrictions on foreign trade and investment. Markets were highly regulated
and the state was heavily involved in many industries. Inflation was routinely
high and growth stagnant.
President Carlos Menem was first elected to office in 1989 and undertook a
program of deregulation, liberalization and macroeconomic reform. The results
have been positive. GDP growth in 1997 was 8.0%, up from 4.4% in 1996 and -4.4%
in 1995. Argentina's growth, averaging over 6% from 1991 to 1997, had been
driven primarily by domestic consumption. In the wake of the Mexican currency
crisis, however, banking liquidity has been restrained. While deposits have
increased in reaction to peso stabilization, lending has not, putting downward
pressure on consumer spending. The positive effect is that inflation, well over
150% at the beginning of the decade, was 0.4% in 1996. Still troublesome for
Argentina is unemployment, quite high at 17%. Menem's economic liberalization
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policies have succeeded in attracting foreign investment. From the United States
alone, approximately $10 billion was invested by 1996. Investors have been most
attracted to the telecommunications, finance, and energy sectors.
Argentina enjoys a positive trade balance. The export economy is heavily
weighted toward agriculture, which represents 60% of the total value of all
Argentine exports. Primary products are livestock, oilseeds, and grain.
Argentina's single biggest trading partner is Brazil, and the United States is
the second. Primary imports are machinery, vehicles and chemicals.
The resignation of Economy Minister Domingo Cavallo in July 1996 was
initially greeted with skepticism from the markets. Cavallo was widely
recognized as the man responsible for ensuring the convertibility of the peso by
pegging it to the dollar, a move which saved Argentina from the hyperinflation
and continuous drops in output which could have followed from the Mexican crisis
in 1994. Confidence was quickly restored, however, with the appointment of Roque
Fernandez, who promptly reaffirmed commitment to Cavallo's plan and introduced
further measures for fiscal stability.
The central bank's main priority is maintaining convertibility against the
dollar. It is very active in the foreign exchange market and even assists local
firms with liquidity problems.
Legislative elections could prove to be critical for Menem, who still has an
extensive economic reform agenda which includes further privatizations, labor
market reforms and a revamped tax policy. Failure to retain a friendly majority
in the Lower House of Congress could deprive Menem of the support he needs to
pass such reforms.
The next presidential election is due in 1999. In accordance with the
constitution, Menem, a member of the Peronist party, can not seek a third
consecutive term. The next election is likely to present a third candidate to
the voters beyond the traditional contestants from the Peronist and Radical
parties. Frepaso, a center-left alliance, first emerged in the 1995 elections
and by 1999 could build itself up enough to promote a viable alternative to the
older parties. It is uncertain how policies would be effected by the systemic
change from a predominantly two-party system to a three-way game.
The Argentine stock market reached an all-time high in October of 1997 in
response to rising corporate earnings and strong economic growth. However, the
market underwent a significant correction due largely to the "contagion effect"
of the Asian economic and currency crisis and the popular Mervel index ended the
year only 5.9% ahead. While there was little direct impact from the Asian crisis
on Argentina's economy, foreign investors fled the market, as they feared that
Asia's currency problems would spread to Latin America.
The Argentine market may pose special risks for investors. As an emerging
nation, Argentina's stock market may be particularly vulnerable to widespread
economic, currency and market turmoil such as we have seen recently in Asia.
These crises may prompt investors to become increasingly averse to emerging
market exposure on concerns that the impact of these events will spread to other
countries. In addition, mutual funds that invest in emerging markets may be
forced to sell holdings in countries that have little similarity with the
markets in trouble, merely to raise cash to meet redemptions. Similarly, the
Asian crisis has accelerated a growing imbalance between supply and demand for
basic commodities such as oil, metals, pulp, grains and others. This could
impact the Argentinean stock market where energy stocks (oil, gas and
electricity) comprise approximately 40% of the market's total value. A currency
devaluation by one or more of its Latin American neighbors could precipitate a
recession and political pressure for competitive devaluation to protect the
country's trade competitiveness.
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While Argentina's political situation is relatively stable; there is a high
degree of dissatisfaction with the government's inability to lower the country's
high unemployment rate. This could eventually lead to social unrest and a new
government less favorable to investors.
BRAZIL. Brazil is the largest country in South America and is home to vast
amounts of natural resources. Its 155 million people are descendants from
indigenous tribes and European immigrants. They live in diverse socio-economic
conditions, from the urban cities of Sao Paolo to the undeveloped trading posts
of the distant regions. Industrial development has been concentrated in specific
areas. The disenfranchised population is quite large and is a source of many of
Brazil's social problems.
The Brazilian economy is currently undergoing extensive reforms, stemming
from a 1994 effort to stabilize the currency called the Real Plan. With the aim
of curbing inflation, a new currency, the Real, was introduced and supported via
a floating exchange bond. The plan has stabilized the exchange rate and
controlled inflation, which was reeling out of control in 1994 at 2,700%.
Inflation in 1995 dropped to 81%, and fell even further in 1996, settling at
18.7%. Perhaps the most remarkable achievement for the Brazilian economy in 1997
was the lowest rate of inflation in the past 40 years, as the National Consumer
Price Index increased just 7.48%. At the same time, however, the Real Plan has
sent the trade and current account balances into a deficit. The current account
deficit is expected to reach $30 billion in 1998, equivalent to 3.6% of GDP.
Other objectives of the administration of the current President, Fernando
Henrique Cardoso, are trade liberalization and privatization, but these efforts
are sporadic and often stalled by special interests in the legislature. Some
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privatization efforts are performing well, particularly in the utilities sector.
Utilities and telecommunications have been key draws for foreign investment, and
foreign direct investment (FDI) is coming in at record levels. In 1996 the
country received over $9.5 billion, with $2.4 billion coming from the United
States. Still, there are restrictions against investments in certain industries,
such as metals and mining.
Traditionally an agricultural economy, a strong industrial sector has
developed which produces metals, chemical, and manufactured consumer goods.
Agriculture still plays a significant role, however, representing 11% of the
GDP, 40% of exports and employing over 35% of the workforce. Primary
agricultural products are grains, coffee, and cattle. Regarding energy and
utilities, the country is a leading producer of hydroelectric power, but it is
dependent on imports for oil.
Presidential elections will be held in 1998. President Cardoso hopes to stand
for re-election but currently is unable to, given a constitutional provision on
term limits. Efforts to gather congressional support for constitutional reform,
allowing Cardoso to stand, could result in a great deal of special interest
concessions, translating into more public spending and horse-trading over fiscal
reforms.
In 1997 the Brazilian stock market rose to an all-time high in the first
quarter. Over the summer, the speculative attack on the Thai currency triggered
a sharp reversal in the Brazilian market, as investors feared a raid on the
Brazilian Real. However, the market ended the year with a gain of 4.34%. By
mid-year 1998 the Brazilian market plummeted amid growing concern that Brazil,
Latin America's largest economy, might suffer the confidence crisis that had
caused large currency devaluations in Russia and Asia.
Investing in Brazil could entail special risks: High unemployment is the
chief challenge facing Brazil's president Cardoso, as he seeks reelection in
October. Joblessness is at a record high and social unrest could lead to his
defeat. Cardoso's main challenger is considered to be strongly left of center on
the political spectrum and has proposed policies that could be detrimental to
the progress made in subduing inflation and denationalizing government ownership
of many of its businesses. He is considered by many to be unfriendly to the
interests of shareholders.
Brazil could be a likely target for a renewed attack on its currency. The
economy is in a more precarious state: interest rates remain high and, despite
austerity measures, little progress has been made in reducing the current
account deficit. This poses particular risk for United States investors who
would see their investment returns eroded if the Brazilian Real were to be
devalued.
Overall, Brazil remains vulnerable to both external shocks and changing
sentiment due to worsening domestic indicators or political risk.
CHILE. Chile is a transition economy which has recently made great strides
toward putting its authoritarian, statist, past behind itself. In all of Latin
America, it is the country with the highest rates of growth. Averaging 7.3% so
far this decade, GDP grew at 6.0% in 1996, down from 6.6% the previous year.
Inflation has been steadily declining and is down over 15% in the last five
years. Inflation in 1997 was 6.0%, a 0.6% drop over 1996. Unemployment in 1996
was 6.2%, particularly low for the Latin American region. Chile is still
considered to have one of the best performing stock markets in the region.
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Chile has a strong, interventionist central bank, which focuses more on the
investment community than it does on the government. Active steps are taken to
control demand and inflation. One example is the practice of restricting
short-term flows of foreign capital through the country.
Performance of the Chilean stock market was lackluster in 1997 as weak copper
prices and rising interest rates led to a contraction in the domestic economy.
Also contributing to the market's weakness was the contagion effect of the Asian
economic and currency crises, a decline in pulp and steel prices; and
uncertainty about the growth prospects of its Latin American neighbors. These
factors combined to produce a 15% decline in the stock market for the 1997
calendar year. The market weakness carried through into the first half of the
next year.
Eduardo Frei is President and is due for reelection in 1999. President Frei
has been trying to decentralize the government but encounters stiff opposition
from the powerful trade unions. Also high on Frei's agenda is tax reform.
There is a considerable military component to political life in Chile. In the
legislature there is strong representation by parties with authoritarian views.
As part of the negotiated settlement with coup leader General Augusto Pinochet
in 1990, the army chain of command ends with General Pinochet, not an elected
official. Furthermore, certain seats are reserved in the Senate for appointed
officials from the military. Pinochet must resign in 1998, and shortly
thereafter the reserved Senate seats will fall open to election. There are
constitutional reforms currently in progress further diminishing the role and
influence of the military, and thus the political transition is still underway.
A successful outcome requires that the military acquiesce as it is stripped of
its political powers.
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Investors in the Chilean market face special risks. The Chilean market is
particularly sensitive to the fluctuation in the international price of copper
and pulp on the international markets and they have a significant impact on the
nation's economy and stock market.
As is typical of most emerging markets, much of the Chilean equity market is
firmly held by controlling families and their associates. Accordingly, these
owners may not always act in the interests of outside shareholders.
Chile is particularly vulnerable to outside shocks such as the current
economic and currency woes of other emerging markets worldwide and it is
particularly sensitive to events that impact its Latin American neighbors. Any
weakness in the Chilean currency versus the dollar could erode the investment
returns to United States investors upon currency conversion.
MEXICO. The Mexican economy has recovered fairly well since the currency
crisis of December 1994 thanks in large part to growth in exports, peso
stabilization, and massive financial assistance from the United States. GDP
growth rose to 7.3%, with consumer spending and investment leading the way. A
major positive factor supporting growth during 1997 was the strength of the
peso, which closed the year little changed from its 1996 year-end level. In
addition, the nation's inflation rate declined to 15.7% from the 27.7% rate of
1996. This marked the second straight year of improvement. Inflation is the
chief concern of the central bank, which takes active measures such as the
setting of wage ceilings and manipulation of interest rates to control it.
Domestic consumption, while improved, has yet to return to pre-1994 levels, and
has also contributed to the containment of inflation.
The Mexican economy is very strong in manufacturing and natural resources,
specifically oil. Manufacturing alone counts for 22% of the Mexican GDP and 21%
of all urban employment. The economy is also very closely tied to the United
States, which is responsible for 60% of all foreign investment and with whom it
conducts over 75% of all trade. Trade pacts such as the North American Free
Trade Agreement (NAFTA) further integrate the economies, giving the United
States strong incentives to provide assistance in times of crisis. NAFTA also
aided the recent recovery, given the ease with which it allows increases in
exports and investment. The Mexican stock market listed 194 companies with total
capitalization of $156 billion in 1997, a 12% rise over 1996.
Internally, the various people of the Mexican states have recently
experienced a great deal of dissatisfaction with their relationship to the
federal government. Most notably, in Chiapas there have been armed uprisings by
indigenous groups demanding further autonomy. While the rebellions have not
strongly shaken financial markets, they serve as a reminder of the diversity of
Mexico, of the vast socio-economic gaps between various peoples, and of the
potential for such groups to demand the attention of both their government and
the world.
Politically, the landscape changed fundamentally in July 1997. The defeat of
candidates from the Institutional Revolutionary Party (PRI) in legislative
elections signaled the end of decades of one party rule. Citizens now have the
confidence that their votes count and that the PRI is no longer invincible.
Winning every presidential election since its founding in 1929, the PRI was the
country's monolithic political machine, maintaining power through rigged
elections and ruling in an environment rife with intrigue and corruption.
Internal pressures including armed rebellion from domestic interest groups,
extensive crises and scandals caused by intra-party rivalries and corruption,
and deteriorating relationships with foreign countries over financial
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mismanagement and mutual social problems all contributed to the establishment of
fully free and unfettered elections. The response from the Mexican people was
clear. Though they took the most votes (39%) for the 500-member Lower House of
Congress, the PRI has lost their majority, and the President is now forced to
accommodate the interests of the opposition parties. Market reaction to the new
Mexican political world was positive. The IPC index, consisting of 35 of the
most representative stocks on the Mexican Stock Exchange, rose 3.25% the day
after the election. Further financial implications of the new landscape are as
yet uncertain. Relevant considerations are the effect of the new configurations
on government consensus and policy making, the demands of newly empowered groups
on economic and other resources, the balance of power between the executive and
the legislature, and the ability of the government to maintain law and order.
Following three straight years of strong gains, Mexico's stock market fell
sharply in late 1997 and continued its descent through mid-1998 as the worsening
Asian economic and currency crises threatened to cause problems for Mexico's
trade balance and raised questions concerning the sustainability of its economic
growth. Foreign investors fled the Mexican market, as they feared that Asia's
currency problems would spread to Latin America.
Investors in Mexico face a number of potential risks. As an emerging nation,
Mexico's stock market may be particularly vulnerable to widespread economic,
currency and stock market turmoil such as recently experienced in Asia and
Russia. These crises may prompt investors to become increasingly averse to
emerging market exposure on concern that the impact of these events will spread
to other countries. In addition, mutual funds that invest in emerging markets
may be forced to sell holdings in countries that have little similarity with the
troubled markets, merely to raise cash to meet redemptions. Similarly, because
the United States is Mexico's largest trading partner, any economic downturn in
the U.S. economy can have a strongly adverse impact upon Mexico's economy and
stock market.
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While Mexico's political situation is relatively stable, there is a high
degree of dissatisfaction with the government's inability to effectively address
the nation's growing social problems, particularly in the countries less
developed regions. Occasional flair-ups of strikes and armed rebellions could
pose a threat to Mexico's political and economic stability.
SPECIAL CONSIDERATIONS REGARDING THE RUSSIAN FEDERATION
The Russian Federation is the largest republic of the Commonwealth of
Independent States with a 1995 population of 147,500,000. It is about one and
four fifths of the land area of the United States and occupies most of Eastern
Europe and north Asia.
Russia has had a long history of political and economic turbulence. The USSR
lasted 69 years and for more than half that time it ranked as a nuclear
superpower. In the 1930's tens of millions of its citizens were collectivized
under state agricultural and industrial enterprises and millions died in
political purges and the vast penal and labor system or in state-created
famines. During World War II, as many as 20 million Soviet citizens died. After
decades of communist rule, the Soviet Union was dissolved on December 8, 1991
following a failed coup attempt against the government of Mikhail Gorbachev. On
the day that the leaders declared that the Soviet Union ceased to exist, the
Soviet republics were invited to join with Russia in the Commonwealth of
Independent states (CIS). At one time or another those that have agreed to join
have included the Ukraine, Belarus, Moldova, Georgia, Armenia, Azerbaijan,
Uzbekistan, Turkmenistan, Tajikistan, Kazakhstan and Kyrgyzstan, but a number
have dropped out since or have only observer status. Each of the republics is a
sovereign state that controls its own economy and natural resources and collects
its own taxes, providing only minimal support to the CIS.
Boris Yeltsin, President of Russia, inherited the mantle of economic and
political chaos. With the freeing of most prices he staked his political life on
the rapid creation of a free market economy. Since 1991 Yeltsin and his Russian
reformers have been faced with the daunting task of stabilizing the Russian
economy while transforming it into a modern and efficient structure able to
compete in international markets and respond to the needs of the Russian people.
To date, their efforts have yielded widely mixed results. On the one hand, they
have made some impressive progress. Since 1992, they have abolished central
planning, decontrolled prices, unified the foreign exchange market, made the
ruble convertible, and privatized two thirds of the economy. They have
accomplished this in spite of the crushing burdens inherited from the communist
system: huge industrial enterprises that are unprofitable; an obsolete capital
stock; a crumbling energy sector, huge external debt; and armies that had to be
repatriated and resettled at home.
Russia remains a paradox among the major economies of the world in that it is
a country marked by stagnation in production levels, but has few constraints on
growth. Labor supply is adequate and savings are high. In addition, there is
almost unlimited scope for increasing productivity through the introduction of
improved technologies, production process and market-oriented managerial
development. There are 147 million consumers who are slowly increasing their
buying power and education standards are high. Russia is also rich in natural
resources. It has 40% of the world's natural gas reserves, 6% of its oil, 25% of
coal, diamonds, gold and nickel, and 30% of timber and bauxite. Approximately
ten million people are engaged in agriculture and they produce half of the
region's grain, meat, milk, and other dairy products.
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The main reason for the continued poor performance of the Russian economy is
the country's failure to mobilize the resources that are available. While the
official unemployment rate was at 10.6% in 1996, up to half of the working
population is, in effect, unemployed or, to a significant degree, underemployed
in inefficient and unproductive industries. Much of the country's savings have
been siphoned off through capital flight. Russia's technological potential for
assimilating both domestic and foreign technologies is not being exploited.
Industry privatization and restructuring initiatives have generally failed to
mobilize the available factors of production as the country's privatization
program virtually ensures the predominance of the old management teams that are
largely non market-oriented in their management approach. Approximately 80% of
Russian privatized companies continue to be majority-owned by insiders and only
10% are owned by investors with large enough stakes to influence the running of
the company.
In July 1996, Boris Yeltsin was re-elected for a second term and it was hoped
that the election would mark the start of a more stable period of economic
growth. However, macroeconomic indicators in 1996 proved contradictory. On the
one hand, the Russian government continued its strict credit policies, and the
annual inflation rate for 1997 dropped to 11%, down from 22% in 1996. Inflation
has since remained below 3% a month through the first half of 1997. In addition,
expenditure cuts trimmed the budget deficit to 7% of GDP for the first nine
months of 1996.
By the end of 1997, GDP was up 0.4% following 1996's 6% fall, and industrial
production was up by 1.9%. Non-payment continues to represent a serious problem
for the economy, particularly in the energy sector.
While Russia is widely believed to be one of the most risky markets in
Eastern Europe, it is also recognized for its potential for positive returns.
However, the market has been essentially liquidity driven and concentrated in
very few of the country's largest companies. At just $129 billion, the total
capitalization of the stock market accounts for just 28.7 percent of GDP. The
majority of investors in Russian equities are small and medium-sized United
States hedge funds. In addition, several country specific funds have been
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established to make direct and portfolio investments in Russian companies. To
facilitate foreign investment, a number of the larger Russian companies have
issued equity in the form of American depository receipts while six big firms
have issued securities in the form of Russian depository certificates. These
certificates are issued and marketed by the Bank of New York. Any investment in
Russia is risky and deciding which companies will perform well at this stage of
the country's transformation is far from easy. A combination of poor accounting
standards, inept management, limited shareholder rights and the criminalization
of large sectors of the economy pose a significant risk, particularly to foreign
investors.
In 1996 the Russian market delivered the world's best stock market
performance and was among the top performing markets in the first half of 1997.
However, the markets strength masked a rapidly deteriorating political and
economic picture. Many of the country's economic reform initiatives have
floundered as the proceeds of IMF and other assistance have been squandered or
stolen. Taxes were not being collected and Russian banks, suffering from a
collapsed ruble, could not meet the demands of either domestic depositors or
foreign creditors. In July of 1998 the Yeltsin government effectively devalued
the Russian ruble by approximately 34% to strengthen the ailing banking system
and stimulate demand for Russian exports. In addition the government announced a
restructuring of their foreign debt that would allow a 90-day moratorium on
banks' foreign loans and a rescheduling of $40 billion in domestic debt. These
actions were viewed by investors as being tantamount to default and they fled
the Russian stock market. President Yeltsin's relations with the communist
dominated Duma worsened and there was talk among the body of beginning
impeachment proceedings against the president. By August of 1998 the ruble had
fallen by 70 percent and food prices soared, heightening fears of social unrest.
By early September the Russian economy appeared to be slipping out of control
and the government in a state of paralysis as the President and the Duma feuded
over remedial initiatives. Many observers fear that country's communist party
could regain control of the government and end free market reforms, which could
further negatively impact stock prices.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of each fund by FMR pursuant to authority contained in the management
contract. FMR is also responsible for the placement of transaction orders for
other investment companies and accounts for which it or its affiliates act as
investment adviser. In selecting broker-dealers, subject to applicable
limitations of the federal securities laws, FMR considers various relevant
factors, including, but not limited to: the size and type of the transaction;
the nature and character of the markets for the security to be purchased or
sold; the execution efficiency, settlement capability, and financial condition
of the broker-dealer firm; the broker-dealer's execution services rendered on a
continuing basis; the reasonableness of any commissions; and, if applicable,
arrangements for payment of fund expenses.
If FMR grants investment management authority to a sub-adviser (see the
section entitled "Management Contracts"), that sub-adviser is authorized to
place orders for the purchase and sale of portfolio securities, and will do so
in accordance with the policies described above.
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Generally, commissions for investments traded on foreign exchanges will be
higher than for investments traded on U.S. exchanges and may not be subject to
negotiation.
Each fund may execute portfolio transactions with broker-dealers who provide
research and execution services to the fund or other accounts over which FMR or
its affiliates exercise investment discretion. Such services may include advice
concerning the value of securities; the advisability of investing in,
purchasing, or selling securities; and the availability of securities or the
purchasers or sellers of securities. In addition, such broker-dealers may
furnish analyses and reports concerning issuers, industries, securities,
economic factors and trends, portfolio strategy, and performance of accounts;
and effect securities transactions and perform functions incidental thereto
(such as clearance and settlement).
The selection of such broker-dealers for transactions in equity securities is
generally made by FMR (to the extent possible consistent with execution
considerations) in accordance with a ranking of broker-dealers determined
periodically by FMR's investment staff based upon the quality of research and
execution services provided.
For transactions in fixed-income securities, FMR's selection of
broker-dealers is generally based on the availability of a security and its
price and, to a lesser extent, on the overall quality of execution and other
services, including research, provided by the broker-dealer.
The receipt of research from broker-dealers that execute transactions on
behalf of a fund may be useful to FMR in rendering investment management
services to that fund or its other clients, and conversely, such research
provided by broker-dealers who have executed transaction orders on behalf of
other FMR clients may be useful to FMR in carrying out its obligations to a
fund. The receipt of such research has not reduced FMR's normal independent
research activities; however, it enables FMR to avoid the additional expenses
that could be incurred if FMR tried to develop comparable information through
its own efforts.
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Fixed-income securities are generally purchased from an issuer or underwriter
acting as principal for the securities, on a net basis with no brokerage
commission paid. However, the dealer is compensated by a difference between the
security's original purchase price and the selling price, the so-called
"bid-asked spread." Securities may also be purchased from underwriters at prices
that include underwriting fees.
Subject to applicable limitations of the federal securities laws, a fund may
pay a broker-dealer commissions for agency transactions that are in excess of
the amount of commissions charged by other broker-dealers in recognition of
their research and execution services. In order to cause a fund to pay such
higher commissions, FMR must determine in good faith that such commissions are
reasonable in relation to the value of the brokerage and research services
provided by such executing broker-dealers, viewed in terms of a particular
transaction or FMR's overall responsibilities to that fund or its other clients.
In reaching this determination, FMR will not attempt to place a specific dollar
value on the brokerage and research services provided, or to determine what
portion of the compensation should be related to those services.
To the extent permitted by applicable law, FMR is authorized to allocate
portfolio transactions in a manner that takes into account assistance received
in the distribution of shares of the funds or other Fidelity funds and to use
research services of the brokerage and other firms that have provided such
assistance. FMR may use research services provided by and place agency
transactions with National Financial Services Corporation (NFSC) and Fidelity
Brokerage Services Japan LLC (FBSJ), indirect subsidiaries of FMR Corp., if the
commissions are fair, reasonable, and comparable to commissions charged by
non-affiliated, qualified brokerage firms for similar services. Prior to
December 9, 1997, FMR used research services provided by and placed agency
transactions with Fidelity Brokerage Services (FBS), an indirect subsidiary of
FMR Corp.
FMR may allocate brokerage transactions to broker-dealers (including
affiliates of FMR) who have entered into arrangements with FMR under which the
broker-dealer allocates a portion of the commissions paid by a fund toward the
reduction of that fund's expenses. The transaction quality must, however, be
comparable to those of other qualified broker-dealers.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members of
national securities exchanges from executing exchange transactions for accounts
which they or their affiliates manage, unless certain requirements are
satisfied. Pursuant to such requirements, the Board of Trustees has authorized
NFSC to execute portfolio transactions on national securities exchanges in
accordance with approved procedures and applicable SEC rules.
The Trustees of each fund periodically review FMR's performance of its
responsibilities in connection with the placement of portfolio transactions on
behalf of the fund and review the commissions paid by the fund over
representative periods of time to determine if they are reasonable in relation
to the benefits to the fund.
The funds' annualized turnover rates for the first fiscal period are not
expected to exceed 100% (Asset Allocation, Diversified International, Japan,
Latin America, and Global Equity Funds), 200% (Dividend Growth and Europe
Capital Appreciation Funds), and 300% (Retirement Growth Fund). Because a high
turnover rate increases transaction costs and may increase taxable gains, FMR
carefully weighs the anticipated benefits of short-term investing against these
consequences.
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The Trustees of each fund have approved procedures in conformity with Rule
10f-3 under the 1940 Act whereby a fund may purchase securities that are offered
in underwritings in which an affiliate of FMR participates. These procedures
prohibit the funds from directly or indirectly benefiting an FMR affiliate in
connection with such underwritings. In addition, for underwritings where an FMR
affiliate participates as a principal underwriter, certain restrictions may
apply that could, among other things, limit the amount of securities that the
funds could purchase in the underwriting.
From time to time the Trustees will review whether the recapture for the
benefit of the funds of some portion of the brokerage commissions or similar
fees paid by the funds on portfolio transactions is legally permissible and
advisable. Each fund seeks to recapture soliciting broker-dealer fees on the
tender of portfolio securities, but at present no other recapture arrangements
are in effect. The Trustees intend to continue to review whether recapture
opportunities are available and are legally permissible and, if so, to determine
in the exercise of their business judgment whether it would be advisable for
each fund to seek such recapture.
Although the Trustees and officers of each fund are substantially the same as
those of other funds managed by FMR or its affiliates, investment decisions for
each fund are made independently from those of other funds managed by FMR or
accounts managed by FMR affiliates. It sometimes happens that the same security
is held in the portfolio of more than one of these funds or accounts.
Simultaneous transactions are inevitable when several funds and accounts are
managed by the same investment adviser, particularly when the same security is
suitable for the investment objective of more than one fund or account.
When two or more funds are simultaneously engaged in the purchase or sale of
the same security, the prices and amounts are allocated in accordance with
procedures believed to be appropriate and equitable for each fund. In some cases
this system could have a detrimental effect on the price or value of the
security as far as each fund is concerned. In other cases, however, the ability
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of the funds to participate in volume transactions will produce better
executions and prices for the funds. It is the current opinion of the Trustees
that the desirability of retaining FMR as investment adviser to each fund
outweighs any disadvantages that may be said to exist from exposure to
simultaneous transactions.
VALUATION
Fidelity Service Company, Inc. (FSC) normally determines each class's net
asset value per share (NAV) as of the close of the New York Stock Exchange
(NYSE) (normally 4:00 p.m. Eastern time). The valuation of portfolio securities
is determined as of this time for the purpose of computing each class's NAV.
Portfolio securities are valued by various methods depending on the primary
market or exchange on which they trade. Most equity securities for which the
primary market is the United States are valued at last sale price or, if no sale
has occurred, at the closing bid price. Most equity securities for which the
primary market is outside the United States are valued using the official
closing price or the last sale price in the principal market in which they are
traded. If the last sale price (on the local exchange) is unavailable, the last
evaluated quote or last bid price normally is used. Securities of other open-end
investment companies are valued at their respective NAVs.
Fixed-income securities and other assets for which market quotations are
readily available may be valued at market values determined by such securities'
most recent bid prices (sales prices if the principal market is an exchange) in
the principal market in which they normally are traded, as furnished by
recognized dealers in such securities or assets. Or, fixed-income securities and
convertible securities may be valued on the basis of information furnished by a
pricing service that uses a valuation matrix which incorporates both
dealer-supplied valuations and electronic data processing techniques. Use of
pricing services has been approved by the Board of Trustees. A number of pricing
services are available, and the funds may use various pricing services or
discontinue the use of any pricing service.
Futures contracts and options are valued on the basis of market quotations,
if available.
Foreign securities are valued based on prices furnished by independent
brokers or quotation services which express the value of securities in their
local currency. FSC gathers all exchange rates daily at the close of the NYSE
using the last quoted price on the local currency and then translates the value
of foreign securities from their local currencies into U.S. dollars. Any changes
in the value of forward contracts due to exchange rate fluctuations and days to
maturity are included in the calculation of NAV. If an extraordinary event that
is expected to materially affect the value of a portfolio security occurs after
the close of an exchange on which that security is traded, then that security
will be valued as determined in good faith by a committee appointed by the Board
of Trustees.
Short-term securities with remaining maturities of sixty days or less for
which market quotations and information furnished by a pricing service are not
readily available are valued either at amortized cost or at original cost plus
accrued interest, both of which approximate current value. In addition,
securities and other assets for which there is no readily available market value
may be valued in good faith by a committee appointed by the Board of Trustees.
The procedures set forth above need not be used to determine the value of the
securities owned by a fund if, in the opinion of a committee appointed by the
Board of Trustees, some other method would more accurately reflect the fair
market value of such securities.
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PERFORMANCE
A class may quote performance in various ways. All performance information
supplied by the funds in advertising is historical and is not intended to
indicate future returns. Each class's share price and total return fluctuate in
response to market conditions and other factors, and the value of fund shares
when redeemed may be more or less than their original cost.
YIELD CALCULATIONS (ASSET ALLOCATION FUND). Yields for a class are computed
by dividing the class's pro rata share of the fund's interest and dividend
income for a given 30-day or one-month period, net of expenses, by the average
number of shares of that class entitled to receive distributions during the
period, dividing this figure by the class's NAV or offering price, as
applicable, at the end of the period, and annualizing the result (assuming
compounding of income) in order to arrive at an annual percentage rate. Income
is calculated for purposes of yield quotations in accordance with standardized
methods applicable to all stock and bond funds. Dividends from equity
investments are treated as if they were accrued on a daily basis, solely for the
purposes of yield calculations. In general, interest income is reduced with
respect to bonds trading at a premium over their par value by subtracting a
portion of the premium from income on a daily basis, and is increased with
respect to bonds trading at a discount by adding a portion of the discount to
daily income. For the fund's investments denominated in foreign currencies,
income and expenses are calculated first in their respective currencies, and
then are converted to U.S. dollars, either when they are actually converted or
at the end of the 30-day or one month period, whichever is earlier. Capital
gains and losses generally are excluded from the calculation, as are gains and
losses from currency exchange rate fluctuations.
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Income calculated for the purposes of calculating a class's yield differs
from income as determined for other accounting purposes. Because of the
different accounting methods used, and because of the compounding of income
assumed in yield calculations, a class's yield may not equal its distribution
rate, the income paid to your account, or the income reported in the fund's
financial statements.
In calculating a class's yield, the fund may from time to time use a
portfolio security's coupon rate instead of its yield to maturity in order to
reflect the risk premium on that security. This practice will have the effect of
reducing a class's yield.
Yield information may be useful in reviewing a class's performance and in
providing a basis for comparison with other investment alternatives. However, a
class's yield fluctuates, unlike investments that pay a fixed interest rate over
a stated period of time. When comparing investment alternatives, investors
should also note the quality and maturity of the portfolio securities of
respective investment companies they have chosen to consider.
Investors should recognize that in periods of declining interest rates a
class's yield will tend to be somewhat higher than prevailing market rates, and
in periods of rising interest rates a class's yield will tend to be somewhat
lower. Also, when interest rates are falling, the inflow of net new money to the
fund from the continuous sale of its shares will likely be invested in
instruments producing lower yields than the balance of the fund's holdings,
thereby reducing a class's current yield. In periods of rising interest rates,
the opposite can be expected to occur.
TOTAL RETURN CALCULATIONS. Total returns quoted in advertising reflect all
aspects of a class's return, including the effect of reinvesting dividends and
capital gain distributions, and any change in a class's NAV over a stated
period. A class's total return may be calculated by using the performance data
of a previously existing class prior to the date that the new class commenced
operations, adjusted to reflect differences in sales charges but not 12b-1 fees.
Average annual total returns are calculated by determining the growth or decline
in value of a hypothetical historical investment in a class over a stated
period, and then calculating the annually compounded percentage rate that would
have produced the same result if the rate of growth or decline in value had been
constant over the period. For example, a cumulative total return of 100% over
ten years would produce an average annual total return of 7.18%, which is the
steady annual rate of return that would equal 100% growth on a compounded basis
in ten years. Average annual total returns covering periods of less than one
year are calculated by determining a class's total return for the period,
extending that return for a full year (assuming that return remains constant
over the year), and quoting the result as an annual return. While average annual
total returns are a convenient means of comparing investment alternatives,
investors should realize that a class's performance is not constant over time,
but changes from year to year, and that average annual total returns represent
averaged figures as opposed to the actual year-to-year performance of a class.
In addition to average annual total returns, a class may quote unaveraged or
cumulative total returns reflecting the simple change in value of an investment
over a stated period. Average annual and cumulative total returns may be quoted
as a percentage or as a dollar amount, and may be calculated for a single
investment, a series of investments, or a series of redemptions, over any time
period. Total returns may be broken down into their components of income and
capital (including capital gains and changes in share price) in order to
illustrate the relationship of these factors and their contributions to total
return. Total returns may be quoted on a before-tax or after-tax basis and may
be quoted with or without taking a class's maximum sales charge into account.
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Excluding a class's sales charge from a total return calculation produces a
higher total return figure. Total returns, yields, and other performance
information may be quoted numerically or in a table, graph, or similar
illustration.
NET ASSET VALUE. Charts and graphs using a class's net asset values, adjusted
net asset values, and benchmark indices may be used to exhibit performance. An
adjusted NAV includes any distributions paid by a fund and reflects all elements
of a class's return. Unless otherwise indicated, a class's adjusted NAVs are not
adjusted for sales charges, if any.
MOVING AVERAGES. A fund may illustrate performance using moving averages. A
long-term moving average is the average of each week's adjusted closing NAV for
a specified period. A short-term moving average is the average of each day's
adjusted closing NAV for a specified period. Moving Average Activity Indicators
combine adjusted closing NAVs from the last business day of each week with
moving averages for a specified period to produce indicators showing when an NAV
has crossed, stayed above, or stayed below its moving average.
Each class may compare its total return to the record of the S&P 500, the Dow
Jones Industrial Average (DJIA), and the cost of living, as measured by the
Consumer Price Index (CPI), over the same period. The S&P 500 and DJIA
comparisons would show how each class's total return compared to the record of a
broad unmanaged index of common stocks and a narrower set of stocks of major
industrial companies, respectively. Each fund has the ability to invest in
securities not included in either index, and its investment portfolio may or may
not be similar in composition to the indexes. The S&P 500 and DJIA returns are
based on the prices of unmanaged groups of stocks and, unlike each class's
returns, do not include the effect of brokerage commissions or other costs of
investing.
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INTERNATIONAL INDICES, MARKET CAPITALIZATION, AND NATIONAL STOCK MARKET RETURN
The following tables show the total market capitalization of certain
countries according to the Morgan Stanley Capital International Indices
database, the total market capitalization of Latin American countries according
to the International Finance Corporation Emerging Markets database, and the
performance of national stock markets as measured in U.S. dollars by the Morgan
Stanley Capital International stock market indices for the twelve months ended
December 31, 1997. Of course, these results are not indicative of future stock
market performance or the funds' performance. Market conditions during the
periods measured fluctuated widely. Brokerage commissions and other fees are not
factored into the values of the indices.
MARKET CAPITALIZATION. Companies outside the United States now make up nearly
two-thirds of the world's stock market capitalization.According to Morgan
Stanley Capital International, the size of the markets as measured in U.S.
dollars grew from $5,749.5 billion in 1996 to $6,207.8 billion in 1997.
The following table measures the total market capitalization of certain
countries according to the Morgan Stanley Capital International Indices
database. The value of the markets are measured in billions of U.S. dollars as
of December 31, 1997.
TOTAL MARKET CAPITALIZATION
Australia $ 164.1 Japan $ 1,498.6
Austria 23.0 Netherlands 337.9
Belgium 75.5 Norway 31.5
Canada 305.9 Singapore/Malaysia 54.5/49.0
Denmark 67.7 Spain 158.3
France 474.5 Sweden 154.5
Germany 584.7 Switzerland 465.6
Hong Kong 167.0 United Kingdom 1,284.8
Italy 238.9 United States 6,209.9
The following table measures the total market capitalization of Latin
American countries according to the International Finance Corporation Emerging
Markets database. The value of the markets is measured in billions of U.S.
dollars as of December 31, 1997.
TOTAL MARKET CAPITALIZATION - LATIN AMERICA
Argentina $ 38.1
Brazil 136.7
Chile 33.0
Colombia 8.2
Mexico 112.5
Venezuela 13.1
10.3
Total Latin America $ 351.9
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NATIONAL STOCK MARKET PERFORMANCE. Certain national stock markets have
outperformed the U.S. stock market. The first table below represents the
performance of national stock markets as measured in U.S. dollars by the Morgan
Stanley Capital International stock market indices for the twelve months ended
December 31, 1997. The second table shows the same performance as measured in
local currency. Each table measures total return based on the period's change in
price, dividends paid on stocks in the index, and the effect of reinvesting
dividends net of any applicable foreign taxes. These are unmanaged indices
composed of a sampling of selected companies representing an approximation of
the market structure of the designated country.
STOCK MARKET PERFORMANCE
MEASURED IN U.S. DOLLARS
Australia -10.4% Japan -23.7%
Austria 1.6 Netherlands 23.8
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Belgium 13.6 Norway 6.2
Canada 12.8 Singapore/Malaysia -30.0/-68.3
Denmark 34.5 Spain 25.4
France 11.9 Sweden 12.9
Germany 24.6 Switzerland 44.2
Hong Kong -23.3 United Kingdom 22.6
Italy 35.5 United States 33.4
STOCK MARKET PERFORMANCE
MEASURED IN LOCAL CURRENCY
Australia 9.2% Japan -14.5%
Austria 18.5 Netherlands 45.1
Belgium 32.4 Norway 22.7
Canada 17.8 Singapore/Malaysia -15.7/-51.1
Denmark 56.1 Spain 46.9
France 29.5 Sweden 31.2
Germany 45.3 Switzerland 56.7
Hong Kong -23.2 United Kingdom 27.5
Italy 57.5 United States 33.4
The following table shows the average annualized stock market returns
measured in U.S. dollars as of December 31, 1997.
STOCK MARKET PERFORMANCE
Five Years Ended Ten Years Ended
December 31, 1997 December 31, 1997
Germany 15.32% 14.34%
Hong Kong 0.86 19.18
Japan -4.11 -2.76
Spain 26.67 11.65
United Kingdom 17.42 13.95
United States 24.58 18.42
PERFORMANCE COMPARISONS. A class's performance may be compared to the
performance of other mutual funds in general, or to the performance of
particular types of mutual funds. These comparisons may be expressed as mutual
fund rankings prepared by Lipper Analytical Services, Inc. (Lipper), an
independent service located in Summit, New Jersey that monitors the performance
of mutual funds. Generally, Lipper rankings are based on total return, assume
reinvestment of distributions, do not take sales charges or trading fees into
consideration, and are prepared without regard to tax consequences. In addition
to the mutual fund rankings, a class's performance may be compared to stock,
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bond, and money market mutual fund performance indices prepared by Lipper or
other organizations. When comparing these indices, it is important to remember
the risk and return characteristics of each type of investment. For example,
while stock mutual funds may offer higher potential returns, they also carry the
highest degree of share price volatility. Likewise, money market funds may offer
greater stability of principal, but generally do not offer the higher potential
returns available from stock mutual funds.
From time to time, a class's performance may also be compared to other mutual
funds tracked by financial or business publications and periodicals. For
example, a fund may quote Morningstar, Inc. in its advertising materials.
Morningstar, Inc. is a mutual fund rating service that rates mutual funds on the
basis of risk-adjusted performance. Rankings that compare the performance of
Fidelity funds to one another in appropriate categories over specific periods of
time may also be quoted in advertising.
A class's performance may also be compared to that of a benchmark index
representing the universe of securities in which the fund may invest. The total
return of a benchmark index reflects reinvestment of all dividends and capital
gains paid by securities included in the index. Unlike a class's returns,
however, the index returns do not reflect brokerage commissions, transaction
fees, or other costs of investing directly in the securities included in the
index.
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The Aggressive Asset Allocation Composite Index is a hypothetical
representation of the performance of Asset Allocation's three asset classes
according to their respective weighting in the fund's neutral mix (5%
short-term/money market; 25% bonds; and 70% stocks). The weightings are
rebalanced monthly. The following indices are used to calculate the asset
allocation composite index: The Lehman Brothers 3-month Treasury Bill Index,
representing the average of T-Bill rates for each of the prior three months,
adjusted to a bond equivalent yield basis (short-term and money market
instruments); the Lehman Brothers Aggregate Bond Index, a market value weighted
performance benchmark for investment-grade fixed-rate debt issues, including
government, corporate, asset-backed, and mortgage-backed securities with
maturities of at least one year; and the S&P 500, a widely recognized unmanaged
index of common stocks.
Asset Allocation has the ability to invest in securities that are not
included in any of the indices, and the fund's actual investment portfolio may
not reflect the composition or the weighting of the indices used. The S&P 500
and the asset allocation composite index include reinvestment of income or
dividends and are based on the prices of unmanaged groups of stocks or U.S.
Treasury obligations. Unlike the fund's returns, the indices do not include the
effect of paying brokerage commissions, spreads, or other costs of investing.
Historical results are used for illustrative purposes only and do not reflect
the past or future performance of the fund.
The following table represents the comparative indices' calendar year-to-year
performance.
Aggressive Lehman Brothers Lehman Brothers S&P 500
Asset 3-Month Treasury Aggregate Bond
Allocation Bill Index Index
Composite Index
1997 25.81% 5.52% 9.65% 33.36%
1996 15.74% 5.38% 3.63% 22.96%
1995 29.89% 6.09% 18.47% 37.58%
1994 0.11% 4.26% -2.92% 1.32%
1993 9.95% 3.20% 9.75% 10.08%
1992 7.34% 2.92% 7.40% 7.62%
Each of Dividend Growth, Retirement Growth, and Asset Allocation may compare
its performance to that of the Standard & Poor's 500 Index, a widely recognized,
unmanaged index of common stocks.
Diversified International Fund may compare its performance to that of the
Morgan Stanley Capital International GDP-Weighted Europe, Australasia, Far East
Index, an unmanaged, gross domestic product weighted index that is designed to
represent the performance of developed stock markets outside of the United
States and Canada. The index returns for periods after January 1, 1997 are
adjusted for tax withholding rates applicable to U.S.-based mutual funds
organized as Massachusetts business trusts.
Europe Capital Appreciation Fund may compare its performance to that of the
Morgan Stanley Capital International Europe Index, an unmanaged, market
capitalization weighted index that is designed to represent the performance of
developed stock markets in Europe. The index returns for periods after January
1, 1997 are adjusted for tax withholding rates applicable to U.S.-based mutual
funds organized as Massachusetts business trusts.
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Japan Fund may compare its performance to that of the Tokyo Stock Price Index
(TOPIX), a market capitalization weighted index of over 1100 stocks traded in
the Japanese market.
Latin America Fund may compare its performance to that of the Morgan Stanley
Capital International Emerging Markets Free-Latin America Index, a market
capitalization weighted index of approximately 170 stocks traded in seven Latin
American markets.
Global Equity Fund may compare its performance to that of the Morgan Stanley
Capital International World Index, an unmanaged, market capitalization weighted
index that is designed to represent the performance of developed stock markets
throughout the world.
Stocks are selected for the Morgan Stanley Capital International (MSCI)
indexes on the basis of industry representation, liquidity, sufficient float,
and avoidance of cross-ownership. The MSCI Free index excludes those stocks that
cannot be purchased by foreign investors in otherwise free markets.
A class may be compared in advertising to Certificates of Deposit (CDs) or
other investments issued by banks or other depository institutions. Mutual funds
differ from bank investments in several respects. For example, a fund may offer
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greater liquidity or higher potential returns than CDs, a fund does not
guarantee your principal or your return, and fund shares are not FDIC insured.
Fidelity may provide information designed to help individuals understand
their investment goals and explore various financial strategies. Such
information may include information about current economic, market, and
political conditions; materials that describe general principles of investing,
such as asset allocation, diversification, risk tolerance, and goal setting;
questionnaires designed to help create a personal financial profile; worksheets
used to project savings needs based on assumed rates of inflation and
hypothetical rates of return; and action plans offering investment alternatives.
Materials may also include discussions of Fidelity's asset allocation funds and
other Fidelity funds, products, and services.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical
returns of the capital markets in the United States, including common stocks,
small capitalization stocks, long-term corporate bonds, intermediate-term
government bonds, long-term government bonds, Treasury bills, the U.S. rate of
inflation (based on the CPI), and combinations of various capital markets. The
performance of these capital markets is based on the returns of different
indices.
Fidelity funds may use the performance of these capital markets in order to
demonstrate general risk-versus-reward investment scenarios. Performance
comparisons may also include the value of a hypothetical investment in any of
these capital markets. The risks associated with the security types in any
capital market may or may not correspond directly to those of the funds.
Ibbotson calculates total returns in the same method as the funds. The funds may
also compare performance to that of other compilations or indices that may be
developed and made available in the future.
In advertising materials, Fidelity may reference or discuss its products and
services, which may include other Fidelity funds; retirement investing; model
portfolios or allocations; and saving for college or other goals. In addition,
Fidelity may quote or reprint financial or business publications and
periodicals, as they relate to current economic and political conditions, fund
management, portfolio composition, investment philosophy, investment techniques,
the desirability of owning a particular mutual fund, and Fidelity services and
products.
Each fund may be advertised as part of certain asset allocation programs
involving other Fidelity or non-Fidelity mutual funds. These asset allocation
programs may advertise a model portfolio and its performance results.
Each fund may be advertised as part of a no transaction fee (NTF) program in
which Fidelity and non-Fidelity mutual funds are offered. An NTF program may
advertise performance results.
A class may present its fund number, Quotron(TM) number, and CUSIP number,
and discuss or quote the fund's current portfolio manager.
VOLATILITY. A class may quote various measures of volatility and benchmark
correlation in advertising. In addition, the fund may compare these measures to
those of other funds. Measures of volatility seek to compare a class's
historical share price fluctuations or total returns to those of a benchmark.
Measures of benchmark correlation indicate how valid a comparative benchmark may
be. All measures of volatility and correlation are calculated using averages of
historical data. In advertising, Asset Allocation may also discuss or illustrate
examples of interest rate sensitivity.
49
<PAGE>
MOMENTUM INDICATORS indicate a class's price movements over specific periods
of time. Each point on the momentum indicator represents a class's percentage
change in price movements over that period.
A fund may advertise examples of the effects of periodic investment plans,
including the principle of dollar cost averaging. In such a program, an investor
invests a fixed dollar amount in a fund at periodic intervals, thereby
purchasing fewer shares when prices are high and more shares when prices are
low. While such a strategy does not assure a profit or guard against loss in a
declining market, the investor's average cost per share can be lower than if
fixed numbers of shares are purchased at the same intervals. In evaluating such
a plan, investors should consider their ability to continue purchasing shares
during periods of low price levels.
A fund may be available for purchase through retirement plans or other
programs offering deferral of, or exemption from, income taxes, which may
produce superior after-tax returns over time. For example, a $1,000 investment
earning a taxable return of 10% annually would have an after-tax value of $1,949
after ten years, assuming tax was deducted from the return each year at a 31%
rate. An equivalent tax-deferred investment would have an after-tax value of
$2,100 after ten years, assuming tax was deducted at a 31% rate from the
tax-deferred earnings at the end of the ten-year period.
As of August 31, 1998, FMR advised over $32 billion in municipal fund assets,
$113 billion in money market fund assets, $389 billion in equity fund assets,
$61 billion in international fund assets, and $27 billion in Spartan fund
assets. The funds may reference the growth and variety of money market mutual
funds and the adviser's innovation and participation in the industry. The equity
funds under management figure represents the largest amount of equity fund
assets under management by a mutual fund investment adviser in the United
States, making FMR America's leading equity (stock) fund manager. FMR, its
subsidiaries, and affiliates maintain a worldwide information and communications
network for the purpose of researching and managing investments abroad.
49A
<PAGE>
Fidelity may provide prior performance information similar to that described
above for funds or accounts with substantially similar investment objectives,
policies, and strategies as the funds described in this SAI.
PRIOR PERFORMANCE OF SIMILAR FUNDS
Because the funds were new when this SAI was printed, they have no previous
operating history. However, Dividend Growth, Retirement Growth, Asset
Allocation, Diversified International, Europe Capital Appreciation, Japan, and
Latin America are modeled after the following existing registered funds,
respectively: Fidelity Dividend Growth Fund, Fidelity Retirement Growth Fund,
Fidelity Asset Manager: Growth Fund, Fidelity Diversified International Fund,
Fidelity Europe Capital Appreciation Fund, Fidelity Japan Fund, and Fidelity
Latin America Fund (Related Funds).
The Related Funds are managed by FMR, and have investment objectives,
policies, and strategies that are substantially similar to the corresponding
funds described in this SAI. The Related Funds, however, have different expenses
and are sold through different distribution channels.
Below you will find information about the prior performance of the
Related Funds, not the performance of the funds described in this SAI. The
performance data of the Related Funds is net of advisory fees and other
expenses.
Although the funds have substantially similar investment objectives,
policies and strategies as the corresponding Related Funds, you should not
assume that the funds described in this SAI will have the same performance as
the Related Funds. For example, a fund's future performance may be greater or
less than the performance of the corresponding Related Fund due to, among other
things, differences in sales charges, expenses, asset sizes and cash flows
between the fund and the corresponding Related Fund. In addition, Latin America
may, under certain circumstances, concentrate its investments in certain
industries, while its Related Fund, Fidelity Latin America Fund, currently has a
policy not to concentrate its investments in any industry.
MOVING AVERAGES. Like the funds, a Related Fund may illustrate
performance using moving averages. On June 30, 1998, the 13-week and 39-week
long-term moving averages for each Related Fund are outlined in the chart below.
<TABLE>
<CAPTION>
13 Week Long-Term 39 Week Long-Term
Fund Name Moving Average Moving Average
- --------- ----------------- -----------------
<S> <C> <C>
Fidelity Dividend Growth Fund $ 27.58 $ 25.12
Fidelity Retirement Growth Fund 20.13 18.46
Fidelity Asset Manager: Growth Fund 20.12 19.11
Fidelity Diversified International Fund 18.82 17.35
Fidelity Europe Capital Appreciation Fund 18.74 16.44
Fidelity Japan Fund 10.02 10.37
Fidelity Latin America Fund 15.86 16.32
</TABLE>
50
<PAGE>
CALCULATING HISTORICAL FUND RESULTS. The following tables show
performance for each Related Fund calculated including certain Related Fund
expenses for the period ended June 30, 1998. Fidelity Europe Capital
Appreciation Fund, Fidelity Japan Fund, and Fidelity Latin America Fund have a
maximum front-end sales charge of 3%, which is included in the average annual
and cumulative total returns. Total return figures do not include the effect of
paying Fidelity Europe Capital Appreciation Fund's, Fidelity Japan Fund's, or
Fidelity Latin America Fund's $25 exchange fee, which was in effect from
December 1, 1987 through October 23, 1989, or other charges for special
transactions or services, such as Fidelity Europe Capital Appreciation Fund's
1.00% short-term trading fee for shares held less than 90 days, or Japan Fund's
or Latin America Fund's 1.5% short-term trading fee for shares held less than 90
days.
<TABLE>
<CAPTION>
Average Annual Total Returns Cumulative Total Returns
10 Years/ 10 Years/
One Five Life of One Five Life of
Year Years Fund Year Years Fund
---- ----- ---- ---- ----- ----
<S> <C> <C> <C> <C> <C> <C>
Fidelity Dividend Growth Fund 34.59% 26.88% 27.50% 34.59% 228.81% 251.83%
(4/27/93)*
Fidelity Retirement Growth Fund 29.29% 17.36% 16.12%+ 29.29% 122.66% 345.69%+
Fidelity Asset Manager: Growth 23.00% 15.84% 17.00% 23.00% 108.57% 177.57%
Fund (12/30/91)*
Fidelity Diversified International 14.88% 16.39% 13.17% 14.88% 113.57% 123.87%
Fund (12/27/91)*
Fidelity Europe Capital 32.43% N/A 21.46% 32.43% N/A 141.03%
Appreciation Fund (12/21/93)*
Fidelity Japan Fund (9/15/92)* -25.24% -4.25% 0.78% -25.24% -19.52% 4.63%
Fidelity Latin America Fund -24.62% 5.91% 7.06% -24.62% 33.28% 42.61%
(4/19/93)*
</TABLE>
* Commencement of Operations
+ 10 year return
Note: If FMR had not reimbursed certain fund expenses during these periods,
Fidelity Asset Manager: Growth Fund's, Fidelity Diversified International
Fund's, and Fidelity Japan Fund's total returns would have been lower.
The following tables show the income and capital elements of each
Related Fund's cumulative total return. The tables compare each Related Fund's
return to the record of the Standard & Poor's 500 Index (S&P 500), the Dow Jones
Industrial Average (DJIA), and the cost of living, as measured by the Consumer
Price Index (CPI), over the same period. The CPI information is as of the
month-end closest to the initial investment date for each Related Fund. The S&P
500 and DJIA comparisons are provided to show how each Related Fund's total
return compared to the record of a broad unmanaged index of common stocks and a
narrower set of stocks of major industrial companies, respectively, over the
same period. Each Related Fund has the ability to invest in securities not
included in either index, and its investment portfolio may or may not be similar
in composition to the indexes. The S&P 500 and DJIA returns are based on the
prices of unmanaged groups of stocks and, unlike each Related Fund's returns, do
not include the effect of brokerage commissions or other costs of investing.
50A
<PAGE>
The following tables show the growth in value of a hypothetical $10,000
investment in each Related Fund during the past 10 fiscal years ended on the
most recent fiscal year of each Related Fund or life of each fund, as
applicable, assuming all distributions were reinvested. Total returns are based
on past results and are not an indication of future performance. Tax
consequences of different investments (with the exception of foreign tax
withholdings) have not been factored into the figures below.
FIDELITY DIVIDEND GROWTH FUND: During the period from April 27, 1993
(commencement of operations) to July 31, 1998, a hypothetical $10,000 investment
in Fidelity Dividend Growth Fund would have grown to $35,096 assuming all
distributions were reinvested.
<TABLE>
<CAPTION>
FIDELITY DIVIDEND GROWTH FUND INDICES
Value of Value of Value of
Period Initial Reinvested Reinvested
Ended $10,000 Dividend Capital Gain Total Cost of
July 31 Investment Distributions Distributions Value S&P 500 DJIA Living**
- ------- ---------- ------------- ------------- ----- ------- ---- ------
<S> <C> <C> <C> <C> <C> <C> <C>
1998 $28,110 $576 $6,410 $35,096 $28,919 $29,820 $11,333
1997 $25,070 $325 $2,951 $28,346 $24,244 $26,664 $11,146
1996 $17,240 $130 $1,627 $18,997 $15,936 $17,582 $10,903
1995 $16,040 $27 $389 $16,456 $13,671 $14,646 $10,590
1994 $11,680 $10 $137 $11,827 $10,840 $11,410 $10,306
1993* $10,800 $0 $0 $10,800 $10,309 $10,438 $10,028
</TABLE>
* From April 27, 1993 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Fidelity
Dividend Growth Fund on April 27, 1993, the net amount invested in fund shares
was $10,000. The cost of the initial investment ($10,000), together with the
aggregate cost of reinvested dividends and capital gain distributions for the
period covered (their cash value at the time they were reinvested), amounted to
$14,737. If distributions had not been reinvested, the amount of distributions
earned from the fund over time would have been smaller, and cash payments for
the period would have amounted to $350 for dividends and $3,920 for capital
gains distributions.
FIDELITY RETIREMENT GROWTH FUND: During the ten-year period ended
November 30, 1997, a hypothetical $10,000 investment in Fidelity Retirement
Growth Fund would have grown to $46,549, assuming all distributions were
reinvested.
<TABLE>
<CAPTION>
FIDELITY RETIREMENT GROWTH FUND INDICES
Value of Value of Value of
Year Initial Reinvested Reinvested
Ended $10,000 Dividend Capital Gain Total Cost of
November 30 Investment Distributions Distributions Value S&P 500 DJIA Living
- ----------- ---------- ------------- ------------- ----- ------- ---- ------
<S> <C> <C> <C> <C> <C> <C> <C>
1997 $15,819 $3,939 $26,791 $46,549 $55,623 $57,303 $13,995
1996 $15,487 $3,252 $21,464 $40,203 $43,282 $46,910 $13,744
1995 $15,070 $2,474 $17,892 $35,436 $33,851 $35,730 $13,310
1994 $13,918 $1,888 $13,377 $29,183 $24,712 $25,688 $12,990
1993 $14,884 $1,798 $11,314 $27,996 $24,457 $24,627 $12,634
1992 $15,278 $1,615 $6,539 $23,432 $22,213 $21,471 $12,305
1991 $13,300 $1,178 $4,512 $18,990 $18,745 $18,258 $11,941
1990 $10,147 $781 $3,442 $14,370 $15,575 $15,610 $11,594
1989 $12,071 $525 $3,477 $16,073 $16,137 $15,875 $10,910
1988 $9,699 $201 $2,794 $12,694 $12,333 $11,953 $10,425
</TABLE>
50B
<PAGE>
Explanatory Notes: With an initial investment of $10,000 in Retirement
Growth Fund on December 1, 1987, the net amount invested in fund shares was
$10,000. The cost of the initial investment ($10,000), together with the
aggregate cost of reinvested dividends and capital gain distributions for the
period covered (their cash value at the time they were reinvested), amounted to
$33,864. If distributions had not been reinvested, the amount of distributions
earned from the fund over time would have been smaller, and cash payments for
the period would have amounted to $1,747 for dividends and $11,963 for capital
gains distributions.
FIDELITY ASSET MANAGER: GROWTH FUND: During the period from December
30, 1991 (commencement of operations) to September 30, 1997, a hypothetical
$10,000 investment in Fidelity Asset Manager: Growth Fund would have grown to
$24,191, assuming all distributions were reinvested.
<TABLE>
<CAPTION>
FIDELITY ASSET MANAGER: GROWTH FUND INDICES
Value of Value of Value of
Period Initial Reinvested Reinvested
Ended $10,000 Dividend Capital Gain Total Cost of
September 30 Investment Distributions Distributions Value S&P 500 DJIA Living**
- ------------ ---------- ------------- ------------- ----- ------- ---- ------
<S> <C> <C> <C> <C> <C> <C> <C>
1997 $19,970 $1,615 $2,606 $24,191 $27,022 $29,597 $11,690
1996 $16,560 $859 $967 $18,386 $19,240 $21,504 $11,443
1995 $14,880 $524 $869 $16,273 $15,989 $17,132 $11,109
1994 $13,910 $272 $618 $14,800 $12,323 $13,404 $10,834
1993 $13,770 $178 $95 $14,043 $11,885 $12,067 $10,522
1992* $11,160 $0 $0 $11,160 $10,517 $10,784 $10,247
</TABLE>
* From December 30, 1991 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Asset
Manager: Growth Fund made on December 30, 1991, the net amount invested in fund
shares was $10,000. The cost of the initial investment ($10,000), together with
the aggregate cost of reinvested dividends and capital gain distributions for
the period covered (their cash value at the time they were reinvested), amounted
to $13,142. If distributions had not been reinvested, the amount of
distributions earned from the fund over time would have been smaller, and cash
payments for the period would have amounted to $1,090 for dividends and $1,830
for capital gains distributions. Tax consequences of different investments have
not been factored into the above figures.
FIDELITY DIVERSIFIED INTERNATIONAL FUND: During the period from
December 27, 1991 (commencement of operations) to October 31, 1997, a
hypothetical $10,000 investment in Fidelity Diversified International Fund would
have grown to $19,106, assuming all distributions were reinvested.
<TABLE>
<CAPTION>
FIDELITY DIVERSIFIED INTERNATIONAL FUND INDICES
Value of Value of Value of
Year Initial Reinvested Reinvested
Ended $10,000 Dividend Capital Gain Total Cost of
October 31 Investment Distributions Distributions Value S&P 500 DJIA Living**
- ---------- ---------- ------------- ------------- ----- ------- ---- ------
<S> <C> <C> <C> <C> <C> <C> <C>
1997 $16,570 $757 $1,779 $19,106 $26,124 $27,766 $11,719
1996 $14,380 $491 $1,144 $16,015 $19,774 $22,084 $11,479
1995 $12,730 $197 $569 $13,496 $15,934 $17,047 $11,146
1994 $12,460 $158 $111 $12,729 $12,602 $13,663 $10,841
1993 $11,320 $133 $0 $11,453 $12,133 $12,523 $10,566
1992* $8,460 $0 $0 $8,460 $10,555 $10,663 $10,283
</TABLE>
* From December 27, 1991 (commencement of operations).
** From month-end closest to initial investment date.
50C
<PAGE>
Explanatory Notes: With an initial investment of $10,000 in Fidelity
Diversified International Fund on December 27, 1991, the net amount invested in
fund shares was $10,000. The cost of the initial investment ($10,000) together
with the aggregate cost of reinvested dividends and capital gain distributions
for the period covered (their case value at the time they were reinvested)
amounted to $11,876. If distributions had not been reinvested, the amount of
distributions earned from the fund over time would have been smaller, and cash
payments for the period would have amounted to $510 for dividends and $1,260 for
capital gain distributions.
FIDELITY EUROPE CAPITAL APPRECIATION FUND: During the period from
December 21, 1993 (commencement of operations) to October 31, 1997, a
hypothetical $10,000 investment in Fidelity Europe Capital Appreciation Fund
would have grown to $18,306, including the effect of the fund's 3% sales charge.
<TABLE>
<CAPTION>
FIDELITY EUROPE CAPITAL APPRECIATION FUND INDICES
Value of Value of Value of
Year Initial Reinvested Reinvested
Ended $10,000 Dividend Capital Gain Total Cost of
October 31 Investment Distributions Distributions Value S&P 500 DJIA Living**
- ---------- ---------- ------------- ------------- ----- ------- ---- ------
<S> <C> <C> <C> <C> <C> <C> <C>
1997 $16,073 $603 $1,630 $18,306 $21,544 $21,710 $11,084
1996 $13,648 $266 $0 $13,914 $16,308 $17,267 $10,857
1995 $11,718 $0 $0 $11,718 $13,141 $13,329 $10,542
1994* $11,010 $0 $0 $11,010 $10,393 $10,683 $10,254
</TABLE>
* From December 21, 1993 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Fidelity
Europe Capital Appreciation Fund on December 21, 1993, assuming the 3% sales
charge had been in effect, the net amount invested in fund shares was $9,700.
The cost of the initial investment ($10,000), together with the aggregate cost
of reinvested dividends and capital gain distributions for the period covered
(their cash value at the time they were reinvested), amounted to $11,726. If
distributions had not been reinvested, the amount of distributions earned from
the fund over time would have been smaller, and cash payments for the period
would have amounted to $446 for dividends and $1,251 for capital gains
distributions. The figures in the table do not include the effect of the fund's
1.0% short-term trading fee applicable to shares held less than 90 days.
FIDELITY JAPAN FUND: During the period from September 15, 1992
(commencement of operations) to October 31, 1997, a hypothetical $10,000
investment in Fidelity Japan Fund would have grown to $11,449, including the
effect of the fund's 3% sales charge.
<TABLE>
<CAPTION>
FIDELITY JAPAN FUND INDICES
Value of Value of Value of
Year Initial Reinvested Reinvested
Ended $10,000 Dividend Capital Gain Total Cost of
October 31 Investment Distributions Distributions Value S&P 500 DJIA Living**
- ---------- ---------- ------------- ------------- ----- ------- ---- ------
<S> <C> <C> <C> <C> <C> <C> <C>
1997 $10,767 $9 $673 $11,449 $24,752 $25,344 $11,437
1996 $11,330 $0 $708 $12,039 $18,736 $20,158 $11,203
1995 $11,718 $0 $732 $12,450 $15,098 $15,560 $10,878
1994 $13,842 $0 $461 $14,303 $11,941 $12,472 $10,580
1993 $12,950 $0 $0 $12,950 $11,496 $11,431 $10,311
1992* $9,545 $0 $0 $9,545 $10,001 $9,733 $10,035
</TABLE>
* From September 15, 1992 (commencement of operations).
** From month-end closest to initial investment date.
50D
<PAGE>
Explanatory Notes: With an initial investment of $10,000 in Fidelity
Japan Fund on September 15, 1992, assuming the 3% sales charge had been in
effect, the net amount investment in fund shares was $9,700. The cost of initial
investment ($10,000), together with the aggregate cost of reinvested dividends
and capital gain distributions for the period covered (their cash value at the
time they were reinvested), amounted to $10,749. If distributions had not been
reinvested, the amount of distributions earned from the fund over time would
have been smaller, and cash payments for the period would have amounted to $10
for dividends and $728 for capital gains distributions. The figures in the table
do not include the effect of the fund's 1.5% short-term trading fee applicable
to shares held less than 90 days.
FIDELITY LATIN AMERICA FUND: During the period from April 19, 1993
(commencement of operations) to October 31, 1997, a hypothetical $10,000
investment in Fidelity Latin America Fund would have grown to $15,606, including
the effect of the fund's 3% sales charge.
<TABLE>
<CAPTION>
FIDELITY LATIN AMERICA FUND INDICES
Value of Value of Value of
Year Initial Reinvested Reinvested
Ended $10,000 Dividend Capital Gain Total Cost of
October 31 Investment Distributions Distributions Value S&P 500 DJIA Living**
- ---------- ---------- ------------- ------------- ----- ------- ---- ------
<S> <C> <C> <C> <C> <C> <C>
1997 $15,045 $511 $50 $15,606 $22,848 $23,893 $11,222
1996 $12,212 $190 $41 $12,443 $17,295 $19,004 $10,993
1995 $9,458 $31 $32 $9,521 $13,937 $14,670 $10,674
1994 $15,724 $53 $53 $15,830 $11,022 $11,758 $10,382
1993* $12,882 $0 $0 $12,882 $10,612 $10,776 $10,118
</TABLE>
* From April 19, 1993 (commencement of operations).
** From month-end closest to initial investment date.
Explanatory Notes: With an initial investment of $10,000 in Fidelity
Latin America Fund on April 19, 1993, assuming the 3% sales charge had been in
effect, the net amount invested in fund shares was $9,700. The cost of the
initial investment ($10,000), together with the aggregate cost of reinvested
dividends and capital gain distributions for the period covered (their cash
value at the time the were reinvested), amounted to $10,442. If distributions
had not bee reinvested, the amount of distributions earned from the fund over
time would have been smaller, and cash payments for the period would have
amounted to $388 for dividends and $49 for capital gains distributions. The
figures in the table do not include the effect of the fund's 1.5% short-term
trading fee applicable to shares held less than 90 days.
50E
<PAGE>
ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION
Pursuant to Rule 22d-1 under the 1940 Act, FDC exercises its right to waive
Class A's and Class T's front-end sales charge on shares acquired through
reinvestment of dividends and capital gain distributions or in connection with a
fund's merger with or acquisition of any investment company or trust. In
addition, FDC has chosen to waive Class A's and Class T's front-end sales charge
in certain instances due to sales efficiencies and competitive considerations.
The sales charge will not apply:
CLASS A SHARES ONLY
1. to shares purchased for an insurance company separate account used to fund
annuity contracts for employee benefit plans (including 403(b) programs, but
otherwise as defined in ERISA);
2. to shares purchased by a trust institution or bank trust department for a
managed account that is charged an asset-based fee. Employee benefit plans
(including 403(b) programs, but otherwise as defined in ERISA) and accounts
managed by third parties do not qualify for this waiver;
3. to shares purchased by a broker-dealer for a managed account that is
charged an asset-based fee. Employee benefit plans (including 403(b) programs,
but otherwise as defined in ERISA) do not qualify for this waiver;
4. to shares purchased by a registered investment adviser that is not part of
an organization primarily engaged in the brokerage business for an account that
is managed on a discretionary basis and is charged an asset-based fee. Employee
benefit plans (including 403(b) programs, but otherwise as defined in ERISA) do
not qualify for this waiver;
5. to shares purchased for (i) an employee benefit plan (including 403(b)
programs, but otherwise as defined in ERISA) having $25 million or more in plan
assets or (ii) an employee benefit plan (including 403(b) programs, but
otherwise as defined in ERISA) that is part of an investment professional
sponsored program that requires the participating employee benefit plan to
initially invest in Class C or Class B shares and, upon meeting certain
criteria, subsequently requires the plan to invest in Class A shares; or
6. to shares purchased prior to December 31, 1998 by shareholders who have
closed their Class A Fidelity Advisor Municipal Bond Fund, Class A Fidelity
Advisor California Municipal Income Fund, or Class A Fidelity Advisor New York
Municipal Income Fund accounts prior to December 31, 1997. This waiver is
limited to purchases of up to $10,000; shareholders are entitled to this waiver
after the original load waiver certificate is received by FIIOC.
CLASS T SHARES ONLY
1. to shares purchased for an insurance company separate account used to fund
annuity contracts for employee benefit plans (including 403(b) programs, but
otherwise as defined in ERISA);
50F
<PAGE>
2. to shares purchased by a trust institution or bank trust department for a
managed account that is charged an asset-based fee. Accounts managed by third
parties do not qualify for this waiver;
3. to shares purchased by a broker-dealer for a managed account that is
charged an asset-based fee;
4. to shares purchased by a registered investment adviser that is not part of
an organization primarily engaged in the brokerage business for an account that
is managed on a discretionary basis and is charged an asset-based fee;
5. to shares purchased for an employee benefit plan (as defined by ERISA
(except SIMPLE IRA, SEP, and SARSEP plans and plans covering self-employed
individuals and their employees (formerly, Keough/H.R. 10 plans), but including
403(b) programs));
6. to shares purchased for a Fidelity or Fidelity Advisor account (including
purchases by exchange) with the proceeds of a distribution from (i) an insurance
company separate account used to fund annuity contracts for employee benefit
plans (including 403(b) programs, but otherwise as defined in ERISA) that are
invested in Fidelity Advisor or Fidelity funds or (ii) an employee benefit plan
(including 403(b) programs, but otherwise as defined in ERISA) that is invested
in Fidelity Advisor or Fidelity funds. (Distributions other than those
transferred to an IRA account must be transferred directly into a Fidelity
account.);
7. to shares purchased for any state, county, or city, or any governmental
instrumentality, department, authority or agency;
8. to shares purchased with redemption proceeds from other mutual fund
complexes on which the investor has paid a front-end or contingent deferred
sales charge;
50G
<PAGE>
9. to shares purchased by a current or former Trustee or officer of a
Fidelity fund or a current or retired officer, director, or regular employee of
FMR Corp. or FIL or their direct or indirect subsidiaries (a Fidelity Trustee or
employee), the spouse of a Fidelity Trustee or employee, a Fidelity Trustee or
employee acting as custodian for a minor child, or a person acting as trustee of
a trust for the sole benefit of the minor child of a Fidelity Trustee or
employee;
10. to shares purchased by a charitable organization (as defined for purposes
of Section 501(c)(3) of the Internal Revenue Code) investing $100,000 or more;
11. to shares purchased by a bank trust officer, registered representative,
or other employee (or a member of one of their immediate families) of investment
professionals having agreements with FDC;
12. to shares purchased for a charitable remainder trust or life income pool
established for the benefit of a charitable organization (as defined for
purposes of Section 501(c)(3) of the Internal Revenue Code);
13. to shares purchased with distributions of income, principal, and capital
gains from Fidelity Defined Trusts; or
14. to shares purchased prior to December 31, 1998 by shareholders who have
closed their Class T Fidelity Advisor Municipal Bond Fund, Class T Fidelity
Advisor California Municipal Income Fund, or Class T Fidelity Advisor New York
Municipal Income Fund accounts prior to December 31, 1997. This waiver is
limited to purchases of up to $10,000; shareholders are entitled to this waiver
after the original load waiver certificate is received by FIIOC.
CLASS B AND CLASS C SHARES ONLY
The contingent deferred sales charge (CDSC) on Class B and Class C shares may
be waived (1) in the case of disability or death, provided that the shares are
redeemed within one year following the death or the initial determination of
disability; (2) in connection with a total or partial redemption related to
certain distributions from retirement plans or accounts at age 70 1/2 which are
permitted without penalty pursuant to the Internal Revenue Code; (3) in
connection with redemptions through the Fidelity Advisor Systematic Withdrawal
Program; or (4) (APPLICABLE TO CLASS C ONLY) in connection with any redemptions
from an employee benefit plan (including 403(b) programs, but otherwise as
defined by ERISA).
A sales load waiver form must accompany each transaction available for each
class.
INSTITUTIONAL CLASS SHARES ONLY
Institutional Class shares are offered to:
1. Broker-dealer managed account programs that (i) charge an asset-based fee
and (ii) will have at least $1 million invested in the Institutional Class of
the Advisor funds. In addition, employee benefit plans (including 403(b)
programs, but otherwise as defined by ERISA) must have at least $50 million in
plan assets;
2. Registered investment advisor managed account programs, provided the
registered investment advisor is not part of an organization primarily engaged
in the brokerage business and the program (i) charges an asset-based fee, and
(ii) will have at least $1 million invested in the Institutional Class of the
Advisor funds. In addition, non-employee benefit plan accounts in the program
must be managed on a discretionary basis;
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3. Trust institution and bank trust department managed account programs that
(i) charge an asset-based fee and (ii) will have at least $1 million invested in
the Institutional Class of the Advisor funds. Accounts managed by third parties
are not eligible to purchase Institutional Class shares;
4. Insurance company separate accounts that will have at least $1 million
invested in the Institutional Class of the Advisor funds; and
5. Current or former Trustees or officers of a Fidelity fund or current or
retired officers, directors, or regular employees of FMR Corp. or Fidelity
International Limited or their direct or indirect subsidiaries (Fidelity Trustee
or employee), spouses of Fidelity Trustees or employees, Fidelity Trustees or
employees acting as a custodian for a minor child, or persons acting as trustee
of a trust for the sole benefit of the minor child of a Fidelity Trustee or
employee.
For purchases made by managed account programs or insurance company separate
accounts, FDC reserves the right to waive the requirement that $1 million be
invested in the Institutional Class of the Advisor funds.
FOR CLASS A AND CLASS T SHARES ONLY
FINDER'S FEE. On eligible purchases of (i) Class A shares in amounts of $1
million or more that qualify for a Class A load waiver, (ii) Class A shares in
amounts of $25 million or more, or (iii) Class T shares in amounts of $1 million
or more, investment professionals will be compensated with a fee at the rate of
0.25% of the purchase amount. Except as provided below, Class A eligible
purchases are the following purchases made through broker-dealers and banks: an
individual trade of $25 million or more; an individual trade of $1 million or
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more that is load waived; a trade which brings the value of the accumulated
account(s) of an investor (including an employee benefit plan (including 403(b)
programs, but otherwise as defined in ERISA)) past $25 million; a load waived
trade that brings the value of the accumulated account(s) of an investor
(including an employee benefit plan (including 403(b) programs, but otherwise as
defined in ERISA)) past $1 million; a trade for an investor with an accumulated
account value of $25 million or more; a load waived trade for an investor with
an accumulated account value of $1 million or more; an incremental trade toward
an investor's $25 million "Letter of Intent"; and an incremental load waived
trade toward an investor's $1 million "Letter of Intent." Except as provided
below, Class T eligible purchases are the following purchases made through
broker-dealers and banks: an individual trade of $1 million or more; a trade
which brings the value of the accumulated account(s) of an investor (including
an employee benefit plan (including 403(b) programs, but otherwise as defined in
ERISA)) past $1 million; a trade for an investor with an accumulated account
value of $1 million or more; and an incremental trade toward an investor's $1
million "Letter of Intent."
For the purpose of determining the availability of Class A or Class T
finder's fees, purchases of Class A or Class T shares made with the proceeds
from the redemption of shares of any Fidelity fund will not be considered
"eligible purchases."
Any assets on which a finder's fee has been paid will bear a contingent
deferred sales charge (Class A or Class T CDSC) if they do not remain in Class A
or Class T shares of the Fidelity Advisor FundsSM, or Daily Money Class shares
of Treasury Fund, Prime Fund or Tax-Exempt Fund, for a period of at least one
uninterrupted year. The Class A or Class T CDSC will be 0.25% of the lesser of
the cost of the Class A or Class T shares, as applicable, at the initial date of
purchase or the value of the Class A or Class T shares, as applicable, at
redemption, not including any reinvested dividends or capital gains. Class A and
Class T shares acquired through distributions (dividends or capital gains) will
not be subject to a Class A or Class T CDSC. In determining the applicability
and rate of any Class A or Class T CDSC at redemption, Class A or Class T shares
representing reinvested dividends and capital gains, if any, will be redeemed
first, followed by those Class A or Class T shares, as applicable, that have
been held for the longest period of time.
With respect to employee benefit plans (including 403(b) programs, but
otherwise as defined in ERISA), the Class A or Class T CDSC does not apply to
the following types of redemptions: (i) plan loans or distributions or (ii)
exchanges to non-Advisor fund investment options. With respect to Individual
Retirement Accounts, the Class A or Class T CDSC does not apply to redemptions
made for disability, payment of death benefits, or required partial
distributions starting at age 70 1/2.
Investment professionals must notify FDC in advance of a purchase eligible
for a finder's fee, and may be required to enter into an agreement with FDC in
order to receive the finder's fee.
CLASS A, CLASS T, CLASS B, AND CLASS C SHARES ONLY
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QUANTITY DISCOUNTS. To obtain a reduction of the front-end sales charge on
Class A or Class T shares, you or your investment professional must notify
Fidelity at the time of purchase whenever a quantity discount is applicable to
your purchase. Upon such notification, you will receive the lowest applicable
front-end sales charge.
For purposes of qualifying for a reduction in front-end sales charges under
the Combined Purchase, Rights of Accumulation or Letter of Intent programs, the
following may qualify as an individual or a "company" as defined in Section
2(a)(8) of the 1940 Act: an individual, spouse, and their children under age 21
purchasing for his, her, or their own account; a trustee, administrator or other
fiduciary purchasing for a single trust estate or a single fiduciary account or
for a single or a parent-subsidiary group of "employee benefits plans" (as
defined in Section 3(3) of ERISA); and tax-exempt organizations as defined under
Section 501(c)(3) of the Internal Revenue Code.
RIGHTS OF ACCUMULATION permit reduced front-end sales charges on any future
purchases of Class A or Class T shares after you have reached a new breakpoint
in a fund's sales charge schedule. The value of currently held (i) Fidelity
Advisor fund Class A, Class T, Class B and Class C shares, (ii) Advisor B Class
and C Class shares of Treasury Fund and (iii) Daily Money Class shares of
Treasury Fund, Prime Fund, and Tax-Exempt Fund acquired by exchange from any
Fidelity Advisor fund, is determined at the current day's NAV at the close of
business, and is added to the amount of your new purchase valued at the current
offering price to determine your reduced front-end sales charge.
LETTER OF INTENT. You may obtain Class A or Class T shares at the same
reduced front-end sales charge by filing a non-binding Letter of Intent (Letter)
within 90 days of the start of Class A or Class T purchases. Each Class A or
Class T investment you make after signing the Letter will be entitled to the
front-end sales charge applicable to the total investment indicated in the
Letter. For example, a $2,500 purchase of Class A or Class T shares toward a
$50,000 Letter would receive the same reduced sales charge as if the $50,000 had
been invested at one time. Purchases of Class B and Class C shares during the
13-month period also will count toward the completion of the Letter. To ensure
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that you receive a reduced front-end sales charge on future purchases, you or
your investment professional must inform Fidelity that the Letter is in effect
each time Class A or Class T shares are purchased. Reinvested income and capital
gain distributions do not count toward the completion of the Letter.
Your initial investment must be at least 5% of the total amount you plan to
invest. Out of the initial purchase Class A or Class T shares equal to 5% of the
dollar amount specified in the Letter will be registered in your name and held
in escrow. The Class A or Class T shares held in escrow cannot be redeemed or
exchanged until the Letter is satisfied or the additional sales charges have
been paid. You will earn income dividends and capital gain distributions on
escrowed Class A or Class T shares. The escrow will be released when your
purchase of the total amount has been completed. You are not obligated to
complete the Letter.
If you purchase more than the amount specified in the Letter and qualify for
a future front-end sales charge reduction, the front-end sales charge will be
adjusted to reflect your total purchase at the end of 13 months. Surplus funds
will be applied to the purchase of additional Class A or Class T shares at the
then-current offering price applicable to the total purchase.
If you do not complete your purchase under the Letter within the 13-month
period, 30 days' written notice will be provided for you to pay the increased
front-end sales charges due. Otherwise, sufficient escrowed Class A or Class T
shares will be redeemed to pay such charges.
FIDELITY ADVISOR SYSTEMATIC INVESTMENT PROGRAM You can make regular
investments in Class A, Class T, Class B, Class C or Institutional Class shares
of the funds monthly, bimonthly, quarterly, or semi-annually with the Systematic
Investment Program by completing the appropriate section of the account
application and attaching a voided personal check with your bank's magnetic ink
coding number across the front. If your bank account is jointly owned, be sure
that all owners sign.
You may cancel your participation in the Systematic Investment Program at any
time without payment of a cancellation fee. You will receive a confirmation from
the transfer agent for every transaction, and a debit entry will appear on your
bank statement.
FIDELITY ADVISOR SYSTEMATIC WITHDRAWAL PROGRAM. If you own Class A, Class T,
or Institutional Class shares worth $10,000 or more, you can have monthly,
quarterly or semi-annual checks sent from your account to you, to a person named
by you, or to your bank checking account. If you own Class B or Class B shares
worth $10,000 or more you can have monthly or quarterly checks sent from your
account to you, to a person named by you, or to your bank checking account.
Aggregate redemptions per 12-month period from your Class B or Class C account
may not exceed 10% of the value of the account and are not subject to a CDSC;
and you may set your withdrawal amount as a percentage of the value of your
account or a fixed dollar amount. Your Systematic Withdrawal Program payments
are drawn from Class A, Class T, Class B, Class C, or Institutional Class share
redemptions, as applicable. If Systematic Withdrawal Plan redemptions exceed
income dividends earned on your shares, your account eventually may be
exhausted.
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ALL CLASSES
Each fund is open for business and each class's net asset value per share
(NAV) is calculated each day the New York Stock Exchange (NYSE) is open for
trading. The NYSE has designated the following holiday closings for 1998: New
Year's Day, Martin Luther King's Birthday, Presidents' Day, Good Friday,
Memorial Day, Independence Day (observed), Labor Day, Thanksgiving Day, and
Christmas Day. Although FMR expects the same holiday schedule to be observed in
the future, the NYSE may modify its holiday schedule at any time. In addition,
on days when the Federal Reserve Wire System is closed, federal funds wires
cannot be sent.
FSC normally determines each class's NAV as of the close of the NYSE
(normally 4:00 p.m. Eastern time). However, NAV may be calculated earlier if
trading on the NYSE is restricted or as permitted by the SEC. To the extent that
portfolio securities are traded in other markets on days when the NYSE is
closed, a class's NAV may be affected on days when investors do not have access
to the fund to purchase or redeem shares. In addition, trading in some of a
fund's portfolio securities may not occur on days when the fund is open for
business.
If the Trustees determine that existing conditions make cash payments
undesirable, redemption payments may be made in whole or in part in securities
or other property, valued for this purpose as they are valued in computing each
class's NAV. Shareholders receiving securities or other property on redemption
may realize a gain or loss for tax purposes, and will incur any costs of sale,
as well as the associated inconveniences.
Pursuant to Rule 11a-3 under the 1940 Act, each fund is required to give
shareholders at least 60 days' notice prior to terminating or modifying its
exchange privilege. Under the Rule, the 60-day notification requirement may be
waived if (i) the only effect of a modification would be to reduce or eliminate
an administrative fee, redemption fee, or deferred sales charge ordinarily
payable at the time of an exchange, or (ii) the fund suspends the redemption of
the shares to be exchanged as permitted under the 1940 Act or the rules and
regulations thereunder, or the fund to be acquired suspends the sale of its
shares because it is unable to invest amounts effectively in accordance with its
investment objective and policies.
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In the Prospectus, each fund has notified shareholders that it reserves the
right at any time, without prior notice, to refuse exchange purchases by any
person or group if, in FMR's judgment, the fund would be unable to invest
effectively in accordance with its investment objective and policies, or would
otherwise potentially be adversely affected.
DISTRIBUTIONS AND TAXES
DIVIDENDS. A portion of each of Dividend Growth, Retirement Growth and Asset
Allocation's income may qualify for the dividends-received deduction available
to corporate shareholders to the extent that the fund's income is derived from
qualifying dividends. Because Diversified International, Europe Capital
Appreciation, Japan, Latin America, and Global Equity invest significantly in
foreign securities, corporate shareholders should not expect fund dividends to
qualify for the dividends-received deduction. Each fund will notify corporate
shareholders annually of the percentage of fund dividends that qualifies for the
dividends-received deduction. Because each fund may earn other types of income,
such as interest, income from securities loans, non-qualifying dividends, and
short-term capital gains, the percentage of dividends from the fund that
qualifies for the deduction generally will be less than 100%. A portion of each
fund's dividends derived from certain U.S. Government securities may be exempt
from state and local taxation. Gains (losses) attributable to foreign currency
fluctuations are generally taxable as ordinary income, and therefore will
increase (decrease) dividend distributions. If a fund's distributions exceed its
net investment company taxable income during a taxable year, all or a portion of
the distributions made in the same taxable year would be recharacterized as a
return of capital to shareholders, thereby reducing each shareholder's cost
basis in the fund. Short-term capital gains are distributed as dividend income.
Each fund will send each shareholder a notice in January describing the tax
status of dividends and capital gain distributions for the prior year.
CAPITAL GAIN DISTRIBUTIONS. Long-term capital gains earned by each fund on
the sale of securities and distributed to shareholders are federally taxable as
long-term capital gains, regardless of the length of time shareholders have held
their shares. If a shareholder receives a capital gain distribution on shares of
a fund, and such shares are held six months or less and are sold at a loss, the
portion of the loss equal to the amount of the capital gain distribution will be
considered a long-term loss for tax purposes. Short-term capital gains
distributed by each fund are taxable to shareholders as dividends, not as
capital gains.
FOREIGN TAXES. Foreign governments may withhold taxes on dividends and
interest paid with respect to foreign securities. Foreign governments may also
impose taxes on other payments or gains with respect to foreign securities. If,
at the close of its fiscal year, more than 50% of a fund's total assets are
invested in securities of foreign issuers, the fund may elect to pass through
foreign taxes paid and thereby allow shareholders to take a credit or deduction
on their individual tax returns.
TAX STATUS OF THE FUNDS. Each fund intends to qualify each year as a
"regulated investment company" for tax purposes so that it will not be liable
for federal tax on income and capital gains distributed to shareholders. In
order to qualify as a regulated investment company and avoid being subject to
federal income or excise taxes at the fund level, each fund intends to
distribute substantially all of its net investment income and net realized
capital gains within each calendar year as well as on a fiscal year basis, and
intends to comply with other tax rules applicable to regulated investment
companies.
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Each fund is treated as a separate entity from the other funds, if any, of
its trust for tax purposes.
If a fund purchases shares in certain foreign investment entities, defined as
passive foreign investment companies (PFICs) in the Internal Revenue Code, it
may be subject to U.S. federal income tax on a portion of any excess
distribution or gain from the disposition of such shares. Interest charges may
also be imposed on a fund with respect to deferred taxes arising from such
distributions or gains. Generally, a fund will elect to mark-to-market any PFIC
shares. Unrealized gains will be recognized as income for tax purposes and must
be distributed to shareholders as dividends.
OTHER TAX INFORMATION. The information above is only a summary of some of the
tax consequences generally affecting each fund and its shareholders, and no
attempt has been made to discuss individual tax consequences. In addition to
federal income taxes, shareholders may be subject to state and local taxes on
fund distributions, and shares may be subject to state and local personal
property taxes. Investors should consult their tax advisers to determine whether
a fund is suitable to their particular tax situation.
FMR
All of the stock of FMR is owned by FMR Corp., its parent organized in 1972.
The voting common stock of FMR Corp. is divided into two classes. Class B is
held predominantly by members of the Edward C. Johnson 3d family and is entitled
to 49% of the vote on any matter acted upon by the voting common stock. Class A
is held predominantly by non-Johnson family member employees of FMR Corp. and
its affiliates and is entitled to 51% of the vote on any such matter. The
Johnson family group and all other Class B shareholders have entered into a
shareholders' voting agreement under which all Class B shares will be voted in
accordance with the majority vote of Class B shares. Under the 1940 Act, control
of a company is presumed where one individual or group of individuals owns more
than 25% of the voting stock of that company.
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Therefore, through their ownership of voting common stock and the execution of
the shareholders' voting agreement, members of the Johnson family may be deemed,
under the 1940 Act, to form a controlling group with respect to FMR Corp.
At present, the principal operating activities of FMR Corp. are those
conducted by its division, Fidelity Investments Retail Marketing Company, which
provides marketing services to various companies within the Fidelity
organization.
Fidelity investment personnel may invest in securities for their own accounts
pursuant to a code of ethics that sets forth all employees' fiduciary
responsibilities regarding the funds, establishes procedures for personal
investing and restricts certain transactions. For example, all personal trades
in most securities require pre-clearance, and participation in initial public
offerings is prohibited. In addition, restrictions on the timing of personal
investing in relation to trades by Fidelity funds and on short-term trading have
been adopted.
TRUSTEES AND OFFICERS
The Trustees, Members of the Advisory Board, and executive officers of the
trust are listed below. Except as indicated, each individual has held the office
shown or other offices in the same company for the last five years. All persons
named as Trustees and Members of the Advisory Board also serve in similar
capacities for other funds advised by FMR. The business address of each Trustee,
Member of the Advisory Board, and officer who is an "interested person" (as
defined in the Investment Company Act of 1940) is 82 Devonshire Street, Boston,
Massachusetts 02109, which is also the address of FMR. The business address of
all the other Trustees is Fidelity Investments, P.O. Box 9235, Boston,
Massachusetts 02205-9235. Those Trustees who are "interested persons" by virtue
of their affiliation with either the trust or FMR are indicated by an asterisk
(*).
*EDWARD C. JOHNSON 3d (68), Trustee and President, is Chairman, Chief
Executive Officer and a Director of FMR Corp.; a Director and Chairman of the
Board and of the Executive Committee of FMR; Chairman and a Director of Fidelity
Investments Money Management, Inc. (1998), Fidelity Management & Research (U.K.)
Inc., and Fidelity Management & Research (Far East) Inc. Abigail Johnson, Vice
President of certain Equity Funds, is Mr. Johnson's daughter.
J. GARY BURKHEAD (57), Member of the Advisory Board (1997), is Vice Chairman
and a Member of the Board of Directors of FMR Corp. (1997) and President of
Fidelity Personal Investments and Brokerage Group (1997). Previously, Mr.
Burkhead served as President of Fidelity Management & Research Company.
RALPH F. COX (66), Trustee, is President of RABAR Enterprises (management
consulting-engineering industry, 1994). Prior to February 1994, he was President
of Greenhill Petroleum Corporation (petroleum exploration and production). Until
March 1990, Mr. Cox was President and Chief Operating Officer of Union Pacific
Resources Company (exploration and production). He is a Director of USA Waste
Services, Inc. (non-hazardous waste, 1993), CH2M Hill Companies (engineering),
Rio Grande, Inc. (oil and gas production), and Daniel Industries (petroleum
measurement equipment manufacturer). In addition, he is a member of advisory
boards of Texas A&M University and the University of Texas at Austin.
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PHYLLIS BURKE DAVIS (66), Trustee. Prior to her retirement in September 1991,
Mrs. Davis was the Senior Vice President of Corporate Affairs of Avon Products,
Inc. She is currently a Director of BellSouth Corporation (telecommunications),
Eaton Corporation (manufacturing, 1991), and the TJX Companies, Inc. (retail
stores), and previously served as a Director of Hallmark Cards, Inc. (1985-1991)
and Nabisco Brands, Inc. In addition, she is a member of the President's
Advisory Council of The University of Vermont School of Business Administration.
ROBERT M. GATES (55), Trustee (1997), is a consultant, author, and lecturer
(1993). Mr. Gates was Director of the Central Intelligence Agency (CIA) from
1991-1993. From 1989 to 1991, Mr. Gates served as Assistant to the President of
the United States and Deputy National Security Advisor. Mr. Gates is a Director
of LucasVarity PLC (automotive components and diesel engines), Charles Stark
Draper Laboratory (non-profit), NACCO Industries, Inc. (mining and
manufacturing), and TRW Inc. (original equipment and replacement products). Mr.
Gates also is a Trustee of the Forum for International Policy and of the
Endowment Association of the College of William and Mary. In addition, he is a
member of the National Executive Board of the Boy Scouts of America.
E. BRADLEY JONES (70), Trustee. Prior to his retirement in 1984, Mr. Jones
was Chairman and Chief Executive Officer of LTV Steel Company. He is a Director
of TRW Inc. (original equipment and replacement products), Consolidated Rail
Corporation, Birmingham Steel Corporation, and RPM, Inc. (manufacturer of
chemical products), and he previously served as a Director of NACCO Industries,
Inc. (mining and manufacturing, 1985-1995), Hyster-Yale Materials Handling, Inc.
(1985-1995), and Cleveland-Cliffs Inc (mining), and as a Trustee of First Union
Real Estate Investments. In addition, he serves as a Trustee of the Cleveland
Clinic Foundation, where he has also been a member of the Executive Committee as
well as Chairman of the Board and President, a Trustee and member of the
Executive Committee of University School (Cleveland), and a Trustee of Cleveland
Clinic Florida.
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DONALD J. KIRK (66), Trustee, is Executive-in-Residence (1995) at Columbia
University Graduate School of Business and a financial consultant. From 1987 to
January 1995, Mr. Kirk was a Professor at Columbia University Graduate School of
Business. Prior to 1987, he was Chairman of the Financial Accounting Standards
Board. Mr. Kirk is a Director of General Re Corporation (reinsurance), and he
previously served as a Director of Valuation Research Corp. (appraisals and
valuations, 1993-1995). In addition, he serves as Chairman of the Board of
Directors of National Arts Stabilization Inc., Chairman of the Board of Trustees
of the Greenwich Hospital Association, Director of the Yale-New Haven Health
Services Corp. (1998), a Member of the Public Oversight Board of the American
Institute of Certified Public Accountants' SEC Practice Section (1995), and as a
Public Governor of the National Association of Securities Dealers, Inc. (1996).
*PETER S. LYNCH (55), Trustee, is Vice Chairman and Director of FMR. Prior to
May 31, 1990, he was a Director of FMR and Executive Vice President of FMR (a
position he held until March 31, 1991); Vice President of Fidelity Magellan Fund
and FMR Growth Group Leader; and Managing Director of FMR Corp. Mr. Lynch was
also Vice President of Fidelity Investments Corporate Services (1991-1992). In
addition, he serves as a Trustee of Boston College, Massachusetts Eye & Ear
Infirmary, Historic Deerfield (1989) and Society for the Preservation of New
England Antiquities, and as an Overseer of the Museum of Fine Arts of Boston.
WILLIAM O. McCOY (65), Trustee (1997), is the Vice President of Finance for
the University of North Carolina (16-school system, 1995). Prior to his
retirement in December 1994, Mr. McCoy was Vice Chairman of the Board of
BellSouth Corporation (telecommunications, 1984) and President of BellSouth
Enterprises (1986). He is currently a Director of Liberty Corporation (holding
company, 1984), Weeks Corporation of Atlanta (real estate, 1994), Carolina Power
and Light Company (electric utility, 1996), and the Kenan Transport Co. (1996).
Previously, he was a Director of First American Corporation (bank holding
company, 1979-1996). In addition, Mr. McCoy serves as a member of the Board of
Visitors for the University of North Carolina at Chapel Hill (1994) and for the
Kenan-Flager Business School (University of North Carolina at Chapel Hill,
1988).
GERALD C. McDONOUGH (69), Trustee and Chairman of the non-interested
Trustees, is Chairman of G.M. Management Group (strategic advisory services).
Mr. McDonough is a Director of York International Corp. (air conditioning and
refrigeration), Commercial Intertech Corp. (hydraulic systems, building systems,
and metal products, 1992), CUNO, Inc. (liquid and gas filtration products,
1996), and Associated Estates Realty Corporation (a real estate investment
trust, 1993). Mr. McDonough served as a Director of ACME-Cleveland Corp. (metal
working, telecommunications, and electronic products) from 1987-1996 and
Brush-Wellman Inc. (metal refining) from 1983-1997.
MARVIN L. MANN (65), Trustee (1993), is Chairman of the Board of Lexmark
International, Inc. (office machines, 1991). Prior to 1991, he held the
positions of Vice President of International Business Machines Corporation
("IBM") and President and General Manager of various IBM divisions and
subsidiaries. Mr. Mann is a Director of M.A. Hanna Company (chemicals, 1993) and
Imation Corp. (imaging and information storage, 1997).
*ROBERT C. POZEN (51), Trustee (1997) and Senior Vice President, is also
President and a Director of FMR (1997); and President and a Director of Fidelity
Investments Money Management, Inc. (1998), Fidelity Management & Research (U.K.)
Inc. (1997), and Fidelity Management & Research (Far East) Inc. (1997).
Previously, Mr. Pozen served as General Counsel, Managing Director, and Senior
Vice President of FMR Corp.
THOMAS R. WILLIAMS (70), Trustee, is President of The Wales Group, Inc.
(management and financial advisory services). Prior to retiring in 1987, Mr.
Williams served as Chairman of the Board of First Wachovia Corporation (bank
holding company), and Chairman and Chief Executive Officer of The First National
Bank of Atlanta and First Atlanta Corporation (bank holding company). He is
currently a Director of ConAgra, Inc. (agricultural products), Georgia Power
Company (electric utility), National Life Insurance Company of Vermont, American
Software, Inc., and AppleSouth, Inc. (restaurants, 1992).
ABIGAIL P. JOHNSON (36), is Vice President of certain Equity Funds (1997),
and is a Director of FMR Corp. (1994). Before assuming her current
responsibilities, Ms. Johnson managed a number of Fidelity funds. Edward C.
Johnson 3d, Trustee and President of the Funds, is Ms. Johnson's father.
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ROBERT A. LAWRENCE (46), is Vice President of certain Equity Funds (1997),
Vice President of Fidelity Real Estate High Income Fund (1995) and Fidelity Real
Estate High Income Fund II (1996), and Senior Vice President of FMR (1993).
RICHARD A. SPILLANE, JR. (47), is Vice President of certain Equity Funds and
Senior Vice President of FMR (1997). Since joining Fidelity, Mr. Spillane is
Chief Investment Officer for Fidelity International, Limited. Prior to that
position, Mr. Spillane served as Director of Research.
CHARLES MANGUM (34), is Vice President of Advisor Dividend Growth Fund
(1998). Prior to his current responsibilities, Mr. Mangum managed a number of
Fidelity funds.
J. FERGUS SHIEL (41), is Vice President of Advisor Retirement Growth Fund
(1998). Prior to his current responsibilities, Mr. Shiel managed a number of
Fidelity funds.
RICHARD C. HABERMANN (58), is Vice President of Advisor Asset Allocation Fund
(1998) and Advisor Global Equity Fund (1998). Prior to his current
responsibilities, Mr. Habermann managed a number of Fidelity funds.
GREGORY FRASER (38), is Vice President of Advisor Diversified International
Fund (1998). Prior to his current responsibilities, Mr. Fraser managed a number
of Fidelity funds.
KEVIN McCAREY (38), is Vice President of Advisor Europe Capital Appreciation
Fund (1998). Prior to his current responsibilities, Mr. McCarey managed a number
of Fidelity funds.
PATRICIA SATTERTHWAITE (39), is Vice President of Advisor Latin America Fund
(1998). Prior to her current responsibilities, Ms. Satterthwaite managed a
number of Fidelity funds.
ERIC D. ROITER (49), Secretary (1998), is Vice President (1998) and General
Counsel of FMR (1998). Mr. Roiter was an Adjunct Member, Faculty of Law, at
Columbia University Law School (1996-1997). Prior to joining Fidelity, Mr.
Roiter was a partner at Debevoise & Plimpton (1981-1997) and served as an
Assistant General Counsel of the U.S. Securities and Exchange Commission
(1979-1981).
RICHARD A. SILVER (51), Treasurer (1997), is Treasurer of the Fidelity funds
and is an employee of FMR (1997). Before joining FMR, Mr. Silver served as
Executive Vice President, Fund Accounting & Administration at First Data
Investor Services Group, Inc. (1996-1997). Prior to 1996, Mr. Silver was Senior
Vice President and Chief Financial Officer at The Colonial Group, Inc. Mr.
Silver also served as Chairman of the Accounting/Treasurer's Committee of the
Investment Company Institute (1987-1993).
JOHN H. COSTELLO (51), Assistant Treasurer, is an employee of FMR.
56A
<PAGE>
LEONARD M. RUSH (52), Assistant Treasurer (1994), is an employee of FMR
(1994). Prior to becoming Assistant Treasurer of the Fidelity funds, Mr. Rush
was Chief Compliance Officer of FMR Corp. (1993-1994) and Chief Financial
Officer of Fidelity Brokerage Services, Inc. (1990-1993).
The following table sets forth information describing the compensation of
each Trustee and Member of the Advisory Board of each fund for his or her
services for the fiscal year ending in 1999, or calendar year ended December 31,
1997, as applicable.
<TABLE>
<CAPTION>
COMPENSATION TABLE
AGGREGATE J. Gary Ralph F. Phyllis Burke Robert M. Edward C. E. Bradley
COMPENSATION FROM A BURKHEAD** COX DAVIS GATES*** JOHNSON 3D** JONES
FUND
<S> <C> <C> <C> <C> <C> <C>
Dividend Growth B,+ $ 0 $ 46 $ 45 $ 45 $ 0 $ 46
Retirement Growth B,+ $ 0 $ 17 $ 17 $ 16 $ 0 $ 17
Asset Allocation B,+ $ 0 $ 8 $ 8 $ 8 $ 0 $ 8
Diversified $ 0 $ 8 $ 8 $ 8 $ 0 $ 8
International B,++
Europe Capital $ 0 $ 4 $ 4 $ 4 $ 0 $ 4
Appreciation B,++
Japan B,++ $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Latin America B,++ $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Global Equity B, ++ $ 0 $ 8 $ 8 $ 8 $ 0 $ 8
TOTAL COMPENSATION $ 0 $ 214,500 $ 210,000 $ 176,000 $ 0 $ 211,500
FROM THE FUND
COMPLEX*, A
AGGREGATE Donald J. Peter S. William O. Gerald C. Marvin L. Robert C. Thomas R.
COMPENSATION FROM A KIRK LYNCH ** MCCOY **** MCDONOUGH MANN POZEN ** WILLIAMS
FUND ---- ------ ------ --------- ---- ------ --------
Dividend Growth B,+ $ 46 $ 0 $ 46 $ 57 $ 46 $ 0 $ 46
Retirement Growth B,+ $ 17 $ 0 $ 17 $ 21 $ 17 $ 0 $ 17
Asset Allocation B,+ $ 8 $ 0 $ 8 $ 10 $ 8 $ 0 $ 8
Diversified $ 8 $ 0 $ 8 $ 10 $ 8 $ 0 $ 8
International B,++
Europe Capital $ 4 $ 0 $ 4 $ 5 $ 4 $ 0 $ 4
Appreciation B,++
Japan B,++ $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Latin America B,++ $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Global Equity B, ++ $ 8 $ 0 $ 8 $ 10 $ 8 $ 0 $ 8
TOTAL COMPENSATION $ 211,500 $ 0 $ 214,500 $ 264,500 $ 214,500 $ 0 $ 214,500
FROM THE FUND
COMPLEX*, A
</TABLE>
57
<PAGE>
* Information is for the calendar year ended December 31, 1997 for 230 funds
in the complex.
** Interested Trustees of the funds and Mr. Burkhead are compensated by FMR.
*** Mr. Gates was elected to the Board of Trustees of Advisor Series I and
Advisor Series VIII on July 16, 1997 and June 18, 1997, respectively.
**** Mr. McCoy was elected to the Board of Trustees of Advisor Series I and
Advisor Series VIII on July 16, 1997 and June 18, 1997, respectively.
+ Figures presented are estimated for the fund's first fiscal year ending
October 31, 1999.
++ Figures presented are estimated for the fund's first fiscal year ending
November 30, 1999.
57A
<PAGE>
A Compensation figures include cash, amounts required to be deferred, and may
include amounts deferred at the election of Trustees. For the calendar year
ended December 31, 1997, the Trustees accrued required deferred
compensation from the funds as follows: Ralph F. Cox, $75,000; Phyllis
Burke Davis, $75,000; Robert M. Gates, $62,500; E. Bradley Jones, $75,000;
Donald J. Kirk, $75,000; William O. McCoy, $75,000; Gerald C. McDonough,
$87,500; Marvin L. Mann, $75,000; and Thomas R. Williams, $75,000. Certain
of the non-interested Trustees elected voluntarily to defer a portion of
their compensation as follows: Ralph F. Cox, $53,699; Marvin L. Mann,
$53,699; and Thomas R. Williams, $62,462.
B Compensation figures include cash.
Under a deferred compensation plan adopted in September 1995 and amended in
November 1996 (the Plan), non-interested Trustees must defer receipt of a
portion of, and may elect to defer receipt of an additional portion of, their
annual fees. Amounts deferred under the Plan are subject to vesting and are
treated as though equivalent dollar amounts had been invested in shares of a
cross-section of Fidelity funds including funds in each major investment
discipline and representing a majority of Fidelity's assets under management
(the Reference Funds). The amounts ultimately received by the Trustees under the
Plan will be directly linked to the investment performance of the Reference
Funds. Deferral of fees in accordance with the Plan will have a negligible
effect on a fund's assets, liabilities, and net income per share, and will not
obligate a fund to retain the services of any Trustee or to pay any particular
level of compensation to the Trustee. A fund may invest in the Reference Funds
under the Plan without shareholder approval.
As of the public offering of shares of each fund, 100% of each class's total
outstanding shares was held by FMR. FMR Corp. is the ultimate parent company of
FMR. By virtue of his ownership interest in FMR Corp., as described in the "FMR"
section on page ___, Mr. Edward C. Johnson 3d, President and Trustee of the
fund, may be deemed to be a beneficial owner of these shares.
MANAGEMENT CONTRACTS
Each fund has entered into a management contract with FMR, pursuant to which
FMR furnishes investment advisory and other services.
MANAGEMENT SERVICES. Under the terms of its management contract with each
fund, FMR acts as investment adviser and, subject to the supervision of the
Board of Trustees, directs the investments of the fund in accordance with its
investment objective, policies, and limitations. FMR also provides each fund
with all necessary office facilities and personnel for servicing the fund's
investments, compensates all officers of each fund and all Trustees who are
"interested persons" of the trusts or of FMR, and all personnel of each fund or
FMR performing services relating to research, statistical, and investment
activities.
58
<PAGE>
In addition, FMR or its affiliates, subject to the supervision of the Board
of Trustees, provide the management and administrative services necessary for
the operation of each fund. These services include providing facilities for
maintaining each fund's organization; supervising relations with custodians,
transfer and pricing agents, accountants, underwriters, and other persons
dealing with each fund; preparing all general shareholder communications and
conducting shareholder relations; maintaining each fund's records and the
registration of each fund's shares under federal securities laws and making
necessary filings under state securities laws; developing management and
shareholder services for each fund; and furnishing reports, evaluations, and
analyses on a variety of subjects to the Trustees.
MANAGEMENT-RELATED EXPENSES. In addition to the management fee payable to FMR
and the fees payable to the transfer, dividend disbursing, and shareholder
servicing agent, pricing and bookkeeping agent, and securities lending agent,
each fund or each class thereof, as applicable, pays all of its expenses that
are not assumed by those parties. Each fund pays for the typesetting, printing,
and mailing of its proxy materials to shareholders, legal expenses, and the fees
of the custodian, auditor and non-interested Trustees. Each fund's management
contract further provides that the fund will pay for typesetting, printing, and
mailing prospectuses, statements of additional information, notices, and reports
to shareholders; however, under the terms of each fund's transfer agent
agreement, the transfer agent bears the costs of providing these services to
existing shareholders of the applicable classes. Other expenses paid by each
fund include interest, taxes, brokerage commissions, the fund's proportionate
share of insurance premiums and Investment Company Institute dues, and the costs
of registering shares under federal securities laws and making necessary filings
under state securities laws. Each fund is also liable for such non-recurring
expenses as may arise, including costs of any litigation to which the fund may
be a party, and any obligation it may have to indemnify its officers and
Trustees with respect to litigation.
MANAGEMENT FEES. For the services of FMR under the management contract, each
fund pays FMR a monthly management fee which has two components: a group fee
rate and an individual fund fee rate.
The group fee rate is based on the monthly average net assets of all of the
registered investment companies with which FMR has management contracts.
58A
<PAGE>
<TABLE>
<CAPTION>
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
AVERAGE GROUP ANNUALIZED GROUP NET EFFECTIVE ANNUAL FEE
ASSETS RATE ASSETS RATE
------ ---- ------ ----
<S> <C> <C> <C>
0 - $3 billion .5200% $ 0.5 billion .5200%
3 - 6 .4900 25 .4238
6 - 9 .4600 50 .3823
9 - 12 .4300 75 .3626
12 - 15 .4000 100 .3512
15 - 18 .3850 125 .3430
18 - 21 .3700 150 .3371
21 - 24 .3600 175 .3325
24 - 30 .3500 200 .3284
30 - 36 .3450 225 .3249
36 - 42 .3400 250 .3219
42 - 48 .3350 275 .3190
48 - 66 .3250 300 .3163
66 - 84 .3200 325 .3137
84 - 102 .3150 350 .3113
102 - 138 .3100 375 .3090
138 - 174 .3050 400 .3067
174 - 210 .3000 425 .3046
210 - 246 .2950 450 .3024
246 - 282 .2900 475 .3003
282 - 318 .2850 500 .2982
318 - 354 .2800 525 .2962
354 - 390 .2750 550 .2942
390 - 426 .2700
426 - 462 .2650
462 - 498 .2600
498 - 534 .2550
Over 534 .2500
</TABLE>
The group fee rate is calculated on a cumulative basis pursuant to the
graduated fee rate schedule shown above on the left. The schedule above on the
right shows the effective annual group fee rate at various asset levels, which
is the result of cumulatively applying the annualized rates on the left. For
example, the effective annual fee rate at $618 billion of group net assets - the
approximate level for August 1998 - was 0.2892%, which is the weighted average
of the respective fee rates for each level of group net assets up to $618
billion.
59
<PAGE>
Each fund's individual fund fee rate is set forth in the following chart.
Based on the average group net assets of the funds advised by FMR for August
1998, each fund's annual management fee rate would be calculated as follows:
<TABLE>
<CAPTION>
GROUP FEE RATE INDIVIDUAL FUND FEE RATE MANAGEMENT FEE RATE
<S> <C> <C> <C> <C> <C>
Dividend Growth 0.2892% + 0.30% = 0.5892%
Retirement Growth 0.2892% + 0.30% = 0.5892%
Asset Allocation 0.2892% + 0.30% = 0.5892%
Diversified International 0.2892% + 0.45% = 0.7392%
Europe Capital Appreciation 0.2892% + 0.45% = 0.7392%
Japan 0.2892% + 0.45% = 0.7392%
Latin America 0.2892% + 0.45% = 0.7392%
Global Equity 0.2892% + 0.45% = 0.7392%
</TABLE>
59A
<PAGE>
One-twelfth of this annual management fee rate is applied to each fund's net
assets averaged for the most recent month, giving a dollar amount, which is the
fee for that month.
FMR may, from time to time, voluntarily reimburse all or a portion of a
class's operating expenses (exclusive of interest, taxes, brokerage commissions,
and extraordinary expenses). FMR retains the ability to be repaid for these
expense reimbursements in the amount that expenses fall below the limit prior to
the end of the fiscal year.
Expense reimbursements by FMR will increase a class's total returns, and
repayment of the reimbursement by a class will lower its total returns.
Effective December 14, 1998, FMR voluntarily agreed to reimburse Class A,
Class T, Class B, Class C, and Institutional Class of Dividend Growth,
Retirement Growth, and Asset Allocation if and to the extent that their
aggregate operating expenses, including management fees, were in excess of an
annual rate of 1.75%, 2.00%, 2.50%, 2.50%, and 1.50%, respectively, of their
average net assets. Effective December 14, 1998, FMR voluntarily agreed to
reimburse Class A, Class T, Class B, Class C, and Institutional Class of
Diversified International, Europe Capital Appreciation, Japan, Latin America,
and Global Equity if and to the extent that their aggregate operating expenses,
including management fees, were in excess of an annual rate of 2.00%, 2.25%,
2.75%, 2.75%, and 1.75%, respectively, of their average net assets.
SUB-ADVISERS. On behalf of each fund, FMR has entered into sub-advisory
agreements with FMR U.K. and FMR Far East. On behalf of Diversified
International, Europe Capital Appreciation, Japan, Latin America, and Global
Equity, FMR also has entered into a sub-advisory agreement with FIIA. FIIA, in
turn, has entered into a sub-advisory agreement with FIIA(U.K.)L. On behalf of
Diversified International, Japan, and Global Equity, FMR also has entered into a
sub-advisory agreement with FIJ. Pursuant to the sub-advisory agreements, FMR
may receive investment advice and research services outside the United States
from the sub-advisers.
On behalf of each fund, FMR may also grant the sub-advisers investment
management authority as well as the authority to buy and sell securities if FMR
believes it would be beneficial to the funds.
Currently, FMR U.K., FMR Far East, FIJ, FIIA, and FIIA(U.K.)L each focus on
issuers in countries other than the United States such as those in Europe, Asia,
and the Pacific Basin.
FMR U.K. and FMR Far East, which were organized in 1986, are wholly owned
subsidiaries of FMR. FIJ and FIIA are wholly owned subsidiaries of Fidelity
International Limited (FIL), a Bermuda company formed in 1968 which primarily
provides investment advisory services to non-U.S. investment companies and
institutional investors investing in securities throughout the world. Edward C.
Johnson 3d, Johnson family members, and various trusts for the benefit of the
Johnson family own, directly or indirectly, more than 25% of the voting common
stock of FIL. FIJ was organized in Japan in 1986. FIIA was organized in Bermuda
in 1983. FIIA(U.K.)L was organized in the United Kingdom in 1984, and is a
direct subsidiary of Fidelity Investments Management Limited and an indirect
subsidiary of FIL.
Under the sub-advisory agreements FMR pays the fees of FMR U.K., FMR Far
East, FIJ, and FIIA. FIIA, in turn, pays the fees of FIIA(U.K.)L. For providing
non-discretionary investment advice and research services, the sub-advisers are
compensated as follows:
60
<PAGE>
o FMR pays FMR U.K. and FMR Far East fees equal to 110% and 105%,
respectively, of FMR U.K.'s and FMR Far East's costs incurred in
connection with providing investment advice and research services.
o FMR pays FIIA and FIJ fees equal to 30% of FMR's monthly management
fee with respect to the average net assets held by the fund for
which the sub-adviser has provided FMR with investment advice and
research services.
o FIIA pays FIIA(U.K.)L a fee equal to 110% of FIIA(U.K.)L's costs
incurred in connection with providing investment advice and
research services.
For providing discretionary investment management and executing portfolio
transactions, the sub-advisers are compensated as follows:
o FMR pays FMR U.K., FMR Far East, FIJ, and FIIA a fee equal to 50%
of its monthly management fee with respect to the fund's average
net assets managed by the sub-adviser on a discretionary basis.
o FIIA pays FIIA(U.K.)L a fee equal to 110% of FIIA(U.K.)L's costs
incurred in connection with providing discretionary investment
management services.
Currently, FIJ is primarily responsible for choosing investments for Japan
Fund.
60A
<PAGE>
DISTRIBUTION AND SERVICE PLANS
The Trustees have approved Distribution and Service Plans on behalf of Class
A, Class T, Class B, Class C and Institutional Class shares of each fund (the
Plans) pursuant to Rule 12b-1 under the 1940 Act (the Rule). The Rule provides
in substance that a mutual fund may not engage directly or indirectly in
financing any activity that is primarily intended to result in the sale of
shares of the fund except pursuant to a plan approved on behalf of the fund
under the Rule. The Plans, as approved by the Trustees, allow Class A, Class T,
Class B, Class C and Institutional Class shares of each fund and FMR to incur
certain expenses that might be considered to constitute direct or indirect
payment by the funds of distribution expenses.
Pursuant to each Class A, Class T, Class B, and Class C Plan, FDC is paid a
monthly distribution fee at an annual rate of up to 0.75% of the class's average
net assets for each fund. For the purpose of calculating the distribution fees,
average net assets are determined at the close of business on each day
throughout the month. Currently, the Trustees have approved a distribution fee
for Class A of each fund at an annual rate of 0.25% of its average net assets; a
distribution fee for Class T of each fund at an annual rate of 0.50% of its
average net assets; a distribution fee for Class B of each fund at an annual
rate of 0.75% of its average net assets; and a distribution fee for Class C of
each fund at an annual rate of 0.75% of its average net assets. The fee rates
for Class A and Class T may be increased only when, in the opinion of the
Trustees, it is in the best interests of the shareholders of the applicable
class to do so. Class B and Class C of each fund also pay investment
professionals a service fee at an annual rate of 0.25% of Class B's or Class C's
average daily net assets determined at the close of business on each day
throughout the month for personal service and/or the maintenance of shareholder
accounts.
Currently, up to the full amount of distribution fees paid by Class A and
Class T may be reallowed to investment professionals as compensation for their
services in connection with the distribution of Class A or Class T shares, as
applicable, and for providing support services to Class A or Class T
shareholders, as applicable, based upon the level of services provided.
Currently, the full amount of distribution fees paid by Class B is retained
by FDC as compensation for its services and expenses in connection with the
distribution of Class B shares, and up to the full amount of service fees paid
by Class B may be reallowed to investment professionals for providing personal
service to and/or maintenance of Class B shareholder accounts.
Currently, and except as provided below, for the first year of investment,
the full amount of distribution fees paid by Class C is retained by FDC as
compensation for its services and expenses in connection with the distribution
of Class C shares, and the full amount of service fees paid by Class C is
retained by FDC for providing personal service to and/or maintenance of Class C
shareholder accounts. Normally, after the first year of investment, up to the
full amount of distribution fees paid by Class C may be reallowed to investment
professionals as compensation for their services in connection with the
distribution of Class C shares, and up to the full amount of service fees paid
by Class C may be reallowed to investment professionals for providing personal
service to and/or maintenance of Class C shareholder accounts. For purchases of
Class C shares made for an employee benefit plan (including 403(b) programs, but
otherwise as defined in ERISA) or through reinvested dividends or capital gain
distributions, during the first year of investment and thereafter, up to the
full amount of distribution fees and service fees paid by such Class C shares
may be reallowed to investment professionals as compensation for their services
in connection with the distribution of Class C shares and for providing personal
service to and/or maintenance of Class C shareholder accounts.
61
<PAGE>
Under each Institutional Class Plan, if the payment of management fees by the
fund to FMR is deemed to be indirect financing by the fund of the distribution
of its shares, such payment is authorized by the Plan. Each Institutional Class
Plan specifically recognizes that FMR may use its management fee revenue, as
well as its past profits or its other resources, to pay FDC for expenses
incurred in connection with the distribution of Institutional Class shares. In
addition, each Institutional Class Plan provides that FMR, directly or through
FDC, may make payments to third parties, such as banks or broker-dealers, that
engage in the sale of Institutional Class shares, or provide shareholder support
services. Currently, the Board of Trustees has authorized such payments for
Institutional Class shares.
Under each Class A, Class T, Class B, and Class C Plan, if the payment of
management fees by the fund to FMR is deemed to be indirect financing by the
fund of the distribution of its shares, such payment is authorized by the Plan.
Each Class A, Class T, Class B, and Class C Plan specifically recognizes that
FMR may use its management fee revenue, as well as its past profits, or its
other resources, to pay FDC for expenses incurred in connection with the
distribution of the applicable class's shares, including payments made to third
parties that engage in the sale of the applicable class's shares or to third
parties, including banks, that provide shareholder support services. Currently,
the Board of Trustees has authorized such payments for Class A, Class T, Class
B, and Class C shares.
Prior to approving each Plan, the Trustees carefully considered all pertinent
factors relating to the implementation of the Plan, and determined that there is
a reasonable likelihood that the Plan will benefit the applicable class of each
61A
<PAGE>
fund and its shareholders. In particular, the Trustees noted that each
Institutional Class Plan does not authorize payments by Institutional Class of a
fund other than those made to FMR under its management contract with the fund.
To the extent that each Plan gives FMR and FDC greater flexibility in connection
with the distribution of shares of the applicable class, additional sales of
fund shares may result. Furthermore, certain shareholder support services may be
provided more effectively under the Plans by local entities with whom
shareholders have other relationships.
Each Class A, Class T, Class B, and Class C Plan does not provide for
specific payments by the applicable class of any of the expenses of FDC, or
obligate FDC or FMR to perform any specific type or level of distribution
activities or incur any specific level of expense in connection with
distribution activities.
The Glass-Steagall Act generally prohibits federally and state chartered or
supervised banks from engaging in the business of underwriting, selling, or
distributing securities. Although the scope of this prohibition under the
Glass-Steagall Act has not been clearly defined by the courts or appropriate
regulatory agencies, FDC believes that the Glass-Steagall Act should not
preclude a bank from performing shareholder support services, or servicing and
recordkeeping functions. FDC intends to engage banks only to perform such
functions. However, changes in federal or state statutes and regulations
pertaining to the permissible activities of banks and their affiliates or
subsidiaries, as well as further judicial or administrative decisions or
interpretations, could prevent a bank from continuing to perform all or a part
of the contemplated services. If a bank were prohibited from so acting, the
Trustees would consider what actions, if any, would be necessary to continue to
provide efficient and effective shareholder services. In such event, changes in
the operation of the funds might occur, including possible termination of any
automatic investment or redemption or other services then provided by the bank.
It is not expected that shareholders would suffer any adverse financial
consequences as a result of any of these occurrences. In addition, state
securities laws on this issue may differ from the interpretations of federal law
expressed herein, and banks and other financial institutions may be required to
register as dealers pursuant to state law.
Each fund may execute portfolio transactions with, and purchase securities
issued by, depository institutions that receive payments under the Plans. No
preference for the instruments of such depository institutions will be shown in
the selection of investments.
CONTRACTS WITH FMR AFFILIATES
Each class of each fund has entered into a transfer agent agreement with
FIIOC, an affiliate of FMR. Under the terms of the agreements, FIIOC performs
transfer agency, dividend disbursing, and shareholder services for each class of
each fund.
For providing transfer agency services, FIIOC receives an account fee and an
asset-based fee each paid monthly with respect to each account in a fund. For
retail accounts and certain institutional accounts, these fees are based on
account size and fund type. For certain institutional retirement accounts, these
fees are based on fund type. For certain other institutional retirement
accounts, these fees are based on account type (i.e., omnibus or non-omnibus)
and, for non-omnibus accounts, fund type. The account fees are subject to
increase based on postage rate changes.
The asset-based fees are subject to adjustment if the year-to-date total
return of the S&P 500 exceeds a positive or negative 15%.
62
<PAGE>
FIIOC also collects small account fees from certain accounts with balances of
less than $2,500.
FIIOC pays out-of-pocket expenses associated with providing transfer agent
services. In addition, FIIOC bears the expense of typesetting, printing, and
mailing prospectuses, statements of additional information, and all other
reports, notices, and statements to existing shareholders, with the exception of
proxy statements.
Each fund has entered into a service agent agreement with FSC, an affiliate
of FMR. Under the terms of the agreements, FSC calculates the NAV and dividends
for each class of each fund, maintains each fund's portfolio and general
accounting records, and administers each fund's securities lending program.
For providing pricing and bookkeeping services, FSC receives a monthly fee
based on each fund's average daily net assets throughout the month. The annual
fee rates for pricing and bookkeeping services are 0.0600% (for equity funds) or
0.0750% (for international funds) of the first $500 million of average net
assets and 0.0300% (for equity funds) or 0.0375% (for international funds) of
average net assets in excess of $500 million. The fee, not including
reimbursement for out-of-pocket expenses, is limited to a minimum of $60,000 and
a maximum of $800,000 per year.
For administering each fund's securities lending program, FSC receives fees
based on the number and duration of individual securities loans.
Each fund has entered into a distribution agreement with FDC, an affiliate of
FMR organized as a Massachusetts corporation on July 18, 1960. FDC is a
broker-dealer registered under the Securities Exchange Act of 1934 and a member
of the National Association of Securities Dealers, Inc. The distribution
62A
<PAGE>
agreements call for FDC to use all reasonable efforts, consistent with its other
business, to secure purchasers for shares of the fund, which are continuously
offered. Promotional and administrative expenses in connection with the offer
and sale of shares are paid by FMR.
DESCRIPTION OF THE TRUSTS
TRUSTS' ORGANIZATION. Fidelity Advisor Dividend Growth Fund, Fidelity Advisor
Retirement Growth Fund, and Fidelity Advisor Asset Allocation Fund are funds of
Fidelity Advisor Series I, an open-end management investment company organized
as a Massachusetts business trust by a Declaration of Trust dated June 24, 1983,
as amended and restated October 26, 1984. On January 29, 1992, the name of the
trust was changed from Equity Portfolio Growth to Fidelity Broad Street Trust by
an amendment to the Declaration of Trust. On April 15, 1993, the name of the
trust was changed again from Fidelity Broad Street Trust to Fidelity Advisor
Series I by an amendment to the Declaration of Trust. Currently there are 11
funds of the trust: Fidelity Advisor Dividend Growth Fund, Fidelity Advisor
Retirement Growth Fund, Fidelity Advisor Asset Allocation Fund, Fidelity Advisor
Small Cap Fund, Fidelity Advisor Equity Growth Fund, Fidelity Advisor Growth &
Income Fund, Fidelity Advisor Growth Opportunities Fund, Fidelity Advisor Large
Cap Fund, Fidelity Advisor Mid Cap Fund, Fidelity Advisor Strategic
Opportunities Fund, and Fidelity Advisor TechnoQuant Growth Fund.
Fidelity Advisor Diversified International Fund, Fidelity Advisor Europe
Capital Appreciation Fund, Fidelity Advisor Japan Fund, Fidelity Advisor Latin
America Fund, and Fidelity Advisor Global Equity Fund are funds of Fidelity
Advisor Series VIII, an open-end management investment company organized as a
Massachusetts business trust by a Declaration of Trust dated September 23, 1983,
as amended and restated October 1, 1986. On April 15, 1993, the name of the
trust was changed from Fidelity Special Situations Fund to Fidelity Advisor
Series VIII. Currently there are eight funds of the trust: Fidelity Advisor
Diversified International Fund, Fidelity Advisor Europe Capital Appreciation
Fund, Fidelity Advisor Japan Fund, Fidelity Advisor Latin America Fund, Fidelity
Advisor Global Equity Fund, Fidelity Advisor Emerging Markets Income Fund,
Fidelity Advisor International Capital Appreciation Fund, and Fidelity Advisor
Overseas Fund.
The Declarations of Trust permit the Trustees to create additional funds.
In the event that FMR ceases to be the investment adviser to a trust or a
fund, the right of the trust or fund to use the identifying name "Fidelity" may
be withdrawn. There is a remote possibility that one fund might become liable
for any misstatement in its prospectus or statement of additional information
about another fund.
The assets of each trust received for the issue or sale of shares of each of
its funds and all income, earnings, profits, and proceeds thereof, subject only
to the rights of creditors, are especially allocated to such fund, and
constitute the underlying assets of such fund. The underlying assets of each
fund are segregated on the books of account, and are to be charged with the
liabilities with respect to such fund and with a share of the general
liabilities of their respective trusts. Expenses with respect to each trust are
to be allocated in proportion to the asset value of their respective funds,
except where allocations of direct expense can otherwise be fairly made. The
officers of each trust, subject to the general supervision of the Boards of
Trustees, have the power to determine which expenses are allocable to a given
fund, or which are general or allocable to all of the funds of a certain trust.
In the event of the dissolution or liquidation of a trust, shareholders of each
fund of that trust are entitled to receive as a class the underlying assets of
such fund available for distribution.
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SHAREHOLDER AND TRUSTEE LIABILITY. Each trust is an entity of the type
commonly known as "Massachusetts business trust." Under Massachusetts law,
shareholders of such a trust may, under certain circumstances, be held
personally liable for the obligations of the trust. Each Declaration of Trust
provides that the trust shall not have any claim against shareholders except for
the payment of the purchase price of shares and requires that each agreement,
obligation, or instrument entered into or executed by the trust or its Trustees
shall include a provision limiting the obligations created thereby to the trust
and its assets. Each Declaration of Trust provides for indemnification out of
each fund's property of any shareholder held personally liable for the
obligations of the fund. Each Declaration of Trust also provides that its funds
shall, upon request, assume the defense of any claim made against any
shareholder for any act or obligation of the fund and satisfy any judgment
thereon. Thus, the risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which the fund itself would
be unable to meet its obligations. FMR believes that, in view of the above, the
risk of personal liability to shareholders is remote.
Each Declaration of Trust further provides that the Trustees, if they have
exercised reasonable care, will not be liable for any neglect or wrongdoing, but
nothing in the Declarations of Trust protects Trustees against any liability to
which they would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence, or reckless disregard of the duties involved in the
conduct of their office. Claims asserted against one class of shares may subject
holders of another class of shares to certain liabilities.
VOTING RIGHTS. Each fund's capital consists of shares of beneficial interest.
As a shareholder, you receive one vote for each dollar value of net asset value
you own. The shares have no preemptive rights, and Class A, Class T, Class C,
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and Institutional Class shares have no conversion rights; the voting and
dividend rights, the conversion rights of Class B shares, the right of
redemption, and the privilege of exchange are described in the Prospectus.
Shares are fully paid and nonassessable, except as set forth under the heading
"Shareholder and Trustee Liability" above. Shareholders representing 10% or more
of a trust, a fund, or a class of a fund may, as set forth in the Declarations
of Trust, call meetings of a trust, fund, or class, as applicable, for any
purpose related to the trust, fund, or class, as the case may be, including, in
the case of a meeting of an entire trust, the purpose of voting on removal of
one or more Trustees. Each trust or fund may be terminated upon the sale of its
assets to another open-end management investment company, or upon liquidation
and distribution of its assets, if approved by vote of the holders of a majority
of the trust or the fund, as determined by the current value of each
shareholder's investment in the fund or trust. If not so terminated, each trust
and fund will continue indefinitely. Each fund may invest all of its assets in
another investment company.
CUSTODIAN. _______ is custodian of the assets of the funds. The custodian is
responsible for the safekeeping of a fund's assets and the appointment of any
subcustodian banks and clearing agencies. The custodian takes no part in
determining the investment policies of a fund or in deciding which securities
are purchased or sold by a fund. However, a fund may invest in obligations of
its custodian and may purchase securities from or sell securities to the
custodian.
FMR, its officers and directors, its affiliated companies, and the Board of
Trustees may, from time to time, conduct transactions with various banks,
including banks serving as custodians for certain funds advised by FMR.
Transactions that have occurred to date include mortgages and personal and
general business loans. In the judgment of FMR, the terms and conditions of
those transactions were not influenced by existing or potential custodial or
other fund relationships.
AUDITOR. _______ serves as the funds' independent accountant. The auditor
examines financial statements for the funds and provides other audit, tax, and
related services.
APPENDIX
The descriptions that follow are examples of eligible ratings for the funds.
A fund may, however, consider the ratings for other types of investments and the
ratings assigned by other rating organizations when determining the eligibility
of a particular investment.
DESCRIPTION OF MOODY'S INVESTORS SERVICE RATINGS OF CORPORATE BONDS
Moody's ratings for obligations with an original remaining maturity in excess
of one year fall within nine categories. They range from Aaa (highest quality)
to C (lowest quality). Moody's applies numerical modifiers of 1, 2, or 3 to each
generic rating classification from Aa through B. The modifier 1 indicates that
the security ranks in the higher end of its generic rating category; the
modifier 2 indicates a mid-range ranking; and the modifier 3 indicates that the
issue ranks on the lower end of its generic rating category.
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AAA - Bonds that are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edged." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
AA - Bonds that are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than the Aaa securities.
A - Bonds that are rated A possess many favorable investment attributes and
are to be considered as upper-medium-grade obligations. Factors giving security
to principal and interest are considered adequate but elements may be present
which suggest a susceptibility to impairment sometime in the future.
BAA - Bonds that are rated Baa are considered as medium-grade obligations,
(i.e., they are neither highly protected nor poorly secured). Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
BA - Bonds that are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.
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B - Bonds that are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
CAA - Bonds that are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
CA - Bonds that are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked
short-comings.
C - Bonds that are rated C are the lowest-rated class of bonds and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
DESCRIPTION OF STANDARD & POOR'S RATINGS OF CORPORATE BONDS
Debt issues may be designated by Standard & Poor's as either investment grade
("AAA" through "BBB") or speculative grade ("BB" through "D"). While speculative
grade debt will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major exposures to adverse conditions.
Ratings from AA to CCC may be modified by the addition of a plus sign (+) or
minus sign (-) to show relative standing within the major rating categories.
AAA - Debt rated AAA has the highest rating assigned by Standard & Poor's to
a debt obligation. Capacity to pay interest and repay principal is extremely
strong.
AA - Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher-rated issues only in small degree.
A - Debt rated A has a strong capacity to pay interest and repay principal,
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.
BBB - Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher-rated categories.
BB - Debt rated BB has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial, or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments. The BB
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied BBB- rating.
B - Debt rated B has a greater vulnerability to default but currently has the
capacity to meet interest payments and principal repayments. Adverse business,
financial, or economic conditions will likely impair capacity or willingness to
pay interest and repay principal. The B rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied BB or BB-
rating.
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<PAGE>
CCC - Debt rated CCC has a currently identifiable vulnerability to default,
and is dependent upon favorable business, financial, and economic conditions to
meet timely payment of interest and repayment of principal. In the event of
adverse business, financial, or economic conditions, it is not likely to have
the capacity to pay interest and repay principal. The CCC rating category is
also used for debt subordinated to senior debt that is assigned an actual or
implied B or B- rating.
CC - The rating CC is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC debt rating.
C - The rating C is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC- debt rating. The C rating may be
used to cover a situation where a bankruptcy petition has been filed but debt
service payments are continued.
CI - The rating CI is reserved for income bonds on which no interest is being
paid.
D - Debt rated D is in payment default. The D rating category is used when
interest payments or principal payments are not made on the date due even if the
applicable grace period has not expired, unless S&P believes that such payments
will be made during such grace period. The D rating will also be used upon the
filing of a bankruptcy petition if debt service payments are jeopardized.
Fidelity is a registered trademark of FMR Corp. Fidelity Advisor Funds is a
servicemark of FMR Corp.
The third party marks appearing above are the marks of their respective
owners.
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FIDELITY ADVISOR SERIES I
PART C. OTHER INFORMATION
Item 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Not applicable.
(b) Exhibits:
(1) (a) Amended and Restated Declaration of Trust, dated October
26, 1984, is incorporated herein by reference to Exhibit 1(a)
of Post-Effective Amendment No. 31.
(b) Supplement to the Declaration of Trust, dated February 10,
1987, is incorporated herein by reference to Exhibit 1(b) of
Post-Effective Amendment No. 31.
(c) Supplement to the Declaration of Trust, dated November 26,
1990, is incorporated herein by reference to Exhibit 1(c) of
Post-Effective Amendment No. 31.
(d) Supplement to the Declaration of Trust, dated December 20,
1991, is incorporated herein by reference to Exhibit 1(e) of
Post-Effective Amendment No. 31.
(e) Amendment to the Declaration of Trust, dated May 3, 1993, is
incorporated herein by reference to Exhibit 1(f) of
Post-Effective Amendment No. 31.
(f) Supplement to the Declaration of Trust, dated August 25, 1997,
is incorporated herein by reference to Exhibit 1(f) of
Post-Effective Amendment No. 41.
(2) By-Laws of the Trust are incorporated herein by reference to
Exhibit 2 of Post-Effective Amendment No. 41.
(3) Not applicable.
(4) Not applicable.
(5) (a) Management Contract between Fidelity Advisor Equity Growth
Fund and Fidelity Management & Research Company, dated
September 1, 1997, is incorporated herein by reference to
Exhibit 5(a) of Post-Effective Amendment No. 41.
(b) Management Contract between Fidelity Advisor Mid Cap Fund and
Fidelity Management & Research Company, dated January 18,
1996, is incorporated herein by reference to Exhibit 5(b) of
Post-Effective Amendment No. 32.
(c) Management Contract between Fidelity Advisor Large Cap Fund
and Fidelity Management & Research Company, dated January 18,
1996, is incorporated herein by reference to Exhibit 5(c) of
Post-Effective Amendment No. 32.
(d) Sub-Advisory Agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor Equity Growth Fund, and
Fidelity Management & Research (U.K.) Inc., dated September 1,
1997, is incorporated herein by reference to Exhibit 5(d) of
Post-Effective Amendment No. 41.
(e) Sub-Advisory Agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor Equity Growth Fund, and
Fidelity Management & Research (Far East) Inc., dated
September 1, 1997, is incorporated herein by reference to
Exhibit 5(e) of Post-Effective Amendment No. 41.
<PAGE>
FIDELITY ADVISOR SERIES I
(f) Sub-Advisory Agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor Mid Cap Fund, and
Fidelity Management & Research (U.K.) Inc., dated January 18,
1996, is incorporated herein by reference to Exhibit 5(f) of
Post-Effective Amendment No. 32.
(g) Sub-Advisory Agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor Mid Cap Fund, and
Fidelity Management & Research (Far East) Inc., dated January
18, 1996, is incorporated herein by reference to Exhibit 5(g)
of Post-Effective Amendment No. 32.
(h) Sub-Advisory Agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor Large Cap Fund, and
Fidelity Management & Research (U.K.) Inc., dated January 18,
1996, is incorporated herein by reference to Exhibit 5(h) of
Post-Effective Amendment No. 32.
(i) Sub-Advisory Agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor Large Cap Fund, and
Fidelity Management & Research (Far East) Inc., dated January
18, 1996, is incorporated herein by reference to Exhibit 5(i)
of Post-Effective Amendment No. 32.
(j) Management Contract between Fidelity Advisor Growth & Income
Fund and Fidelity Management & Research Company, dated
December 1, 1996, is incorporated herein by reference to
Exhibit 5(j) of Post-Effective Amendment No. 38.
(k) Management Contract between Fidelity Advisor TechnoQuant
Growth Fund and Fidelity Management & Research Company, dated
December 1, 1996, is incorporated herein by reference to
Exhibit 5(k) of Post-Effective Amendment No. 38.
(l) Sub-Advisory Agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor Growth & Income Fund,
and Fidelity Management & Research (U.K.) Inc., dated December
1, 1996, is incorporated herein by reference to Exhibit 5(l)
of Post-Effective Amendment No. 38.
(m) Sub-Advisory Agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor Growth & Income Fund,
and Fidelity Management & Research (Far East) Inc., dated
December 1, 1996, is incorporated herein by reference to
Exhibit 5(m) of Post-Effective Amendment No. 38.
(n) Sub-Advisory Agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor TechnoQuant Growth
Fund, and Fidelity Management & Research (U.K.) Inc., dated
December 1, 1996, is incorporated herein by reference to
Exhibit 5(n) of Post-Effective Amendment No. 38.
(o) Sub-Advisory Agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor TechnoQuant Growth
Fund, and Fidelity Management & Research (Far East) Inc.,
dated December 1, 1996, is incorporated herein by reference to
Exhibit 5(o) of Post-Effective Amendment No. 38.
(p) Management Contract between Fidelity Advisor Growth
Opportunities Fund and Fidelity Management & Research Company,
dated February 28, 1998, is incorporated herein by reference
to Exhibit 5(p) of Post-Effective Amendment No. 43.
(q) Management Contract between Fidelity Advisor Strategic
Opportunities Fund and Fidelity Management & Research Company,
dated February 28, 1998, is incorporated herein by reference
to Exhibit 5(q) of Post-Effective Amendment No. 43.
(r) Sub-Advisory Agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor Growth Opportunities
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<PAGE>
FIDELITY ADVISOR SERIES I
Fund, and Fidelity Management & Research (U.K.) Inc., dated
February 28, 1998, is incorporated herein by reference to
Exhibit 5(r) of Post-Effective Amendment No. 43.
(s) Sub-Advisory Agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor Strategic Opportunities
Fund, and Fidelity Management & Research (U.K.) Inc., dated
February 28, 1998, is incorporated herein by reference to
Exhibit 5(s) of Post-Effective Amendment No. 43.
(t) Sub-Advisory Agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor Growth Opportunities
Fund, and Fidelity Management & Research (Far East) Inc.,
dated February 28, 1998, is incorporated herein by reference
to Exhibit 5(t) of Post-Effective Amendment No. 43.
(u) Sub-Advisory Agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor Strategic Opportunities
Fund, and Fidelity Management & Research (Far East) Inc.,
dated February 28, 1998, is incorporated herein by reference
to Exhibit 5(u) of Post-Effective Amendment No. 43.
(v) Management Contract between Fidelity Advisor Small Cap Fund
and Fidelity Management & Research Company, dated July 16,
1998, is incorporated herein by reference to Exhibit 5(v) of
Post-Effective Amendment No. 45.
(w) Sub-Advisory Agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor Small Cap Fund, and
Fidelity Management & Research (U.K.) Inc., dated July 16,
1998, is incorporated herein by reference to Exhibit 5(w) of
Post-Effective Amendment No. 45.
(x) Sub-Advisory Agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor Small Cap Fund, and
Fidelity Management & Research (Far East) Inc., dated July 16,
1998, is incorporated herein by reference to Exhibit 5(x) of
Post-Effective Amendment No. 45.
(y) Form of Management Contract between Fidelity Advisor Dividend
Growth Fund and Fidelity Management & Research Company is
filed herein as Exhibit 5(y).
(z) Form of Sub-Advisory Agreement between Fidelity Management &
Research Company, on behalf of Fidelity Advisor Dividend
Growth Fund, and Fidelity Management & Research (U.K.) Inc.
is filed herein as Exhibit 5(z).
(aa) Form of Sub-Advisory Agreement between Fidelity Management &
Research Company, on behalf of Fidelity Advisor Dividend
Growth Fund, and Fidelity Management & Research (Far East)
Inc. is filed herein as Exhibit 5(aa).
(bb) Form of Management Contract between Fidelity Advisor
Retirement Growth Fund and Fidelity Management & Research
Company is filed herein as Exhibit 5(bb).
(cc) Form of Sub-Advisory Agreement between Fidelity Management
& Research Company, on behalf of Fidelity Advisor
Retirement Growth Fund, and Fidelity Management & Research
(U.K.) Inc. is filed herein as Exhibit 5(cc).
(dd) Form of Sub-Advisory Agreement between Fidelity Management &
Research Company, on behalf of Fidelity Advisor Retirement
Growth Fund, and Fidelity Management & Research (Far East)
Inc. is filed herein as Exhibit 5(dd).
(ee) Form of Management Contract between Fidelity Advisor Asset
Allocation Fund and Fidelity Management & Research Company
is filed herein as Exhibit 5(ee).
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<PAGE>
FIDELITY ADVISOR SERIES I
(ff) Form of Sub-Advisory Agreement between Fidelity Management
& Research Company, on behalf of Fidelity Advisor Asset
Allocation Fund, and Fidelity Management & Research (U.K.)
Inc. is filed herein as Exhibit 5(ff).
(gg) Form of Sub-Advisory Agreement between Fidelity Management &
Research Company, on behalf of Fidelity Advisor Asset
Allocation Fund, and Fidelity Management & Research (Far East)
Inc. is filed herein as Exhibit 5(gg).
(6) (a) General Distribution Agreement between Fidelity Advisor Equity
Portfolio Growth (currently known as Fidelity Advisor Equity
Growth Fund) and Fidelity Distributors Corporation, dated
April 1, 1987, is incorporated herein by reference to Exhibit
6(a) of Post-Effective Amendment No. 29.
(b) Amendment to the General Distribution Agreement for Fidelity
Equity Portfolio Growth (currently known as Fidelity Advisor
Equity Growth Fund), dated January 1, 1988, is incorporated
herein by reference to Exhibit 6(b) of Post-Effective
Amendment No. 29.
(c) General Distribution Agreement between Fidelity Advisor Mid
Cap Fund and Fidelity Distributors Corporation, dated January
18, 1996, is incorporated herein by reference to Exhibit 6(c)
of Post-Effective Amendment No. 32.
(d) General Distribution Agreement between Fidelity Advisor Large
Cap Fund and Fidelity Distributors Corporation, dated January
18, 1996, is incorporated herein by reference to Exhibit 6(d)
of Post-Effective Amendment No. 32.
(e) Amendments to the General Distribution Agreement between
Fidelity Advisor Series I on behalf of Fidelity Advisor Equity
Growth Fund, Fidelity Advisor Mid Cap Fund, and Fidelity
Advisor Large Cap Fund and Fidelity Distributors Corporation,
dated March 14, 1996 and July 15, 1996, are incorporated
herein by reference to Exhibit 6(a) of Fidelity Court Street
Trust's Post-Effective Amendment No. 61 (File No. 2-58774).
(f) General Distribution Agreement between Fidelity Advisor Growth
& Income Fund and Fidelity Distributors Corporation, dated
December 1, 1996, is incorporated herein by reference to
Exhibit 6(h) of Post-Effective Amendment No. 38.
(g) General Distribution Agreement between Fidelity Advisor
TechnoQuant Growth Fund and Fidelity Distributors Corporation,
dated December 1, 1996, is incorporated herein by reference to
Exhibit 6(i) of Post-Effective Amendment No. 38.
(h) General Distribution Agreement between Fidelity Advisor Growth
Opportunities Fund and Fidelity Distributors Corporation,
dated February 28, 1998, is incorporated herein by reference
to Exhibit 6(h) of Post-Effective Amendment No. 43.
(i) General Distribution Agreement between Fidelity Advisor
Strategic Opportunities Fund and Fidelity Distributors
Corporation, dated February 28, 1998, is incorporated herein
by reference to Exhibit 6(i) of Post-Effective Amendment No.
43.
(j) General Distribution Agreement between Fidelity Advisor Small
Cap Fund and Fidelity Distributors Corporation, dated July 16,
1998, is incorporated herein by reference to Exhibit 6(j) of
Post-Effective Amendment No. 45.
(k) Form of General Distribution Agreement between Fidelity
Advisor Dividend Growth Fund and Fidelity Distributors
Corporation is filed herein as Exhibit 6(k).
(l) Form of General Distribution Agreement between Fidelity
Advisor Retirement Growth Fund and Fidelity Distributors
Corporation is filed herein as Exhibit 6(l).
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<PAGE>
FIDELITY ADVISOR SERIES I
(m) Form of General Distribution Agreement between Fidelity
Advisor Asset Allocation Fund and Fidelity Distributors
Corporation is filed herein as Exhibit 6(m).
(n) Form of Bank Agency Agreement (most recently revised January,
1997) is incorporated herein by reference to Exhibit 6(j) of
Post-Effective Amendment No. 43.
(o) Form of Selling Dealer Agreement (most recently revised
January, 1997) is incorporated herein by reference to Exhibit
6(k) of Post-Effective Amendment No. 43.
(p) Form of Selling Dealer Agreement for Bank-Related Transactions
(most recently revised January, 1997) is incorporated herein
by reference to Exhibit 6(l) of Post-Effective Amendment No.
43.
(7) (a) Retirement Plan for Non-Interested Person Trustees, Directors
or General Partners, as amended on November 16, 1995, is
incorporated herein by reference to Exhibit 7(a) of Fidelity
Select Portfolio's (File No. 2-69972) Post-Effective Amendment
No. 54.
(b) The Fee Deferral plan for Non-Interested Person Directors and
Trustees of the Fidelity Funds, effective as of September 14,
1995 and amended through November 14, 1996, is incorporated
herein by reference to Exhibit 7(b) of Fidelity Aberdeen
Street Trust's (File No. 33-43529) Post-Effective Amendment
No. 19.
(8) (a) Custodian Agreement and Appendix C, dated August 1, 1994,
between The Chase Manhattan Bank, N.A. and Fidelity Advisor
Series I on behalf of Fidelity Advisor Equity Growth Fund is
incorporated herein by reference to Exhibit 8(a) of Fidelity
Investment Trust's Post-Effective Amendment No. 59 (File No.
2-90649).
(b) Appendix A, dated October 17, 1996, to the Custodian
Agreement, dated August 1, 1994, between The Chase Manhattan
Bank, N.A. and Fidelity Advisor Series I on behalf of Fidelity
Advisor Equity Growth Fund is incorporated herein by reference
to Exhibit 8(c) of Fidelity Charles Street Trust's
Post-Effective Amendment No. 57 (File No. 2-73133).
(c) Appendix B, dated September 18, 1997, to the Custodian
Agreement, dated August 1, 1994, between The Chase Manhattan
Bank, N.A. and Fidelity Advisor Series I on behalf of Fidelity
Advisor Equity Growth Fund is incorporated herein by reference
to Exhibit 8(b) of Fidelity Charles Street Trust's
Post-Effective Amendment No. 62 (File No. 2-73133).
(d) Custodian Agreement and Appendix C, dated September 1, 1994,
between Brown Brothers Harriman & Company and Fidelity Advisor
Series I on behalf of Fidelity Advisor Mid Cap Fund and
Fidelity Advisor Large Cap Fund is incorporated herein by
reference to Exhibit 8(a) of Fidelity Commonwealth Trust's
Post-Effective Amendment No. 56 (File No. 2-52322).
(e) Appendix A, dated October 16, 1997, to the Custodian
Agreement, dated September 1, 1994, between Brown Brothers
Harriman & Company and Fidelity Advisor Series I on behalf of
Fidelity Advisor Mid Cap Fund and Fidelity Advisor Large Cap
Fund is incorporated herein by reference to Exhibit 8(b) of
Fidelity Contrafund's Post-Effective Amendment No. 50 (File
No. 2-25235).
(f) Appendix B, dated September 18, 1997, to the Custodian
Agreement, dated September 1, 1994, between Brown Brothers
Harriman & Company and Fidelity Advisor Series I on behalf of
Fidelity Advisor Mid Cap Fund and Fidelity Advisor Large Cap
Fund is incorporated herein by reference to Exhibit 8(c) of
Fidelity Contrafund's Post-Effective Amendment No. 50 (File
No. 2-25235).
(g) Fidelity Group Repo Custodian Agreement among The Bank of
New York, J. P. Morgan Securities, Inc., and Fidelity Advisor
Series I on behalf of Fidelity Equity Portfolio Growth
(currently known as Fidelity Advisor Equity Growth Fund),
Fidelity Advisor Mid Cap Fund, and Fidelity Advisor Large Cap
Fund, dated February 12, 1996, is incorporated herein by
reference to Exhibit 8(d) of Fidelity Institutional Cash
Portfolio's (File No. 2-74808) Post-Effective Amendment No.
31.
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FIDELITY ADVISOR SERIES I
(h) Schedule 1 to the Fidelity Group Repo Custodian Agreement
between The Bank of New York and Fidelity Advisor Series I on
behalf of Fidelity Equity Portfolio Growth (currently known as
Fidelity Advisor Equity Growth Fund), Fidelity Advisor Mid Cap
Fund, and Fidelity Advisor Large Cap Fund, dated February 12,
1996, is incorporated herein by reference to Exhibit 8(e) of
Fidelity Institutional Cash Portfolios' (File No. 2-74808)
Post-Effective Amendment No. 31.
(i) Fidelity Group Repo Custodian Agreement among Chemical
Bank, Greenwich Capital Markets, Inc., and Fidelity Advisor
Series I on behalf of Fidelity Equity Portfolio Growth
(currently known as Fidelity Advisor Equity Growth Fund),
Fidelity Advisor Mid Cap Fund, and Fidelity Advisor Large Cap
Fund, dated November 13, 1995, is incorporated herein by
reference to Exhibit 8(f) of Fidelity Institutional Cash
Portfolios' (File No. 2-74808) Post-Effective Amendment No.
31.
(j) Schedule 1 to the Fidelity Group Repo Custodian Agreement
between Chemical Bank and Fidelity Advisor Series I on behalf
of Fidelity Equity Portfolio Growth (currently known as
Fidelity Advisor Equity Growth Fund), Fidelity Advisor Mid Cap
Fund, and Fidelity Advisor Large Cap Fund, dated November 13,
1995, is incorporated herein by reference to Exhibit 8(g) of
Fidelity Institutional Cash Portfolios'(File No. 2-74808)
Post-Effective Amendment No. 31.
(k) Joint Trading Account Custody Agreement between The Bank of
New York and Fidelity Advisor Series I on behalf of Fidelity
Advisor Equity Growth Fund, dated May 11, 1995, is
incorporated herein by reference to Exhibit 8(h) of Fidelity
Institutional Cash Portfolios' (File No. 2-74808)
Post-Effective Amendment No. 31.
(l) First Amendment to Joint Trading Account Custody Agreement
between The Bank of New York and Fidelity Advisor Series I on
behalf of Fidelity Advisor Equity Growth Fund, dated July 14,
1995, is incorporated herein by reference to Exhibit 8(i) of
Fidelity Institutional Cash Portfolios' (File No. 2-74808)
Post-Effective Amendment No. 31.
(m) Forms of Custodian Agreement, Appendix B, and Appendix C
between The Chase Manhattan Bank, N.A. and Fidelity Advisor
Series I on behalf of Fidelity Advisor TechnoQuant Growth Fund
and Fidelity Advisor Growth & Income Fund are incorporated
herein by reference to Exhibit 8(m) of Post-Effective
Amendment No. 43.
(n) Forms of Custodian Agreement, Appendix B, and Appendix C
between Brown Brothers Harriman & Company and Fidelity Advisor
Series I on behalf of Fidelity Advisor Strategic Opportunities
Fund and Fidelity Advisor Growth Opportunities Fund are
incorporated herein by reference to Exhibit 8(n) of
Post-Effective Amendment No. 43.
(o) Forms of Fidelity Group Repo Custodian Agreement and
Schedule 1 among The Bank of New York, J.P. Morgan Securities,
Inc., and Fidelity Advisor Series I on behalf of Fidelity
Advisor TechnoQuant Growth Fund, Fidelity Advisor Growth &
Income Fund, Fidelity Advisor Strategic Opportunities Fund,
and Fidelity Advisor Growth Opportunities Fund are
incorporated herein by reference to Exhibit 8(o) of
Post-Effective Amendment No. 43.
(p) Forms of Fidelity Group Repo Custodian Agreement and
Schedule 1 among Chemical Bank, Greenwich Capital Markets,
Inc., and Fidelity Advisor Series I on behalf of Fidelity
Advisor TechnoQuant Growth Fund, Fidelity Advisor Growth &
Income Fund, Fidelity Advisor Strategic Opportunities Fund,
and Fidelity Advisor Growth Opportunities Fund are
incorporated herein by reference to Exhibit 8(p) of
Post-Effective Amendment No. 43.
6
<PAGE>
FIDELITY ADVISOR SERIES I
(q) Forms of Joint Trading Account Custody Agreement and First
Amendment to Joint Trading Account Custody Agreement between
The Bank of New York and Fidelity Advisor Series I on behalf
of Fidelity Advisor TechnoQuant Growth Fund, Fidelity Advisor
Growth & Income Fund, Fidelity Advisor Strategic Opportunities
Fund, and Fidelity Advisor Growth Opportunities Fund are
incorporated herein by reference to Exhibit 8(q) of
Post-Effective Amendment No. 43.
(r) Forms of Custodian Agreement, Appendix B, and Appendix C
between State Street Bank and Trust Company and Fidelity
Advisor Series I on behalf of Fidelity Advisor Small Cap Fund
are incorporated herein by reference to Exhibit 8(r) of
Post-Effective Amendment No. 45.
(9) Not applicable.
(10) Opinion and Consent of Counsel to be filed by subsequent
amendment.
(11) Not applicable.
(12) Not applicable.
(13) Not applicable.
(14) (a) Fidelity Individual Retirement Account Custodial Agreement
and Disclosure Statement, as currently in effect, is
incorporated herein by reference to Exhibit 14(a) of Fidelity
Union Street Trust's (File No. 2-50318) Post-Effective
Amendment No. 87.
(b) Fidelity Institutional Individual Retirement Account Custodial
Agreement and Disclosure Statement, as currently in effect, is
incorporated herein by reference to Exhibit 14(d) of Fidelity
Union Street Trust's (File No. 2-50318) Post-Effective
Amendment No. 87.
(c) National Financial Services Corporation Individual Retirement
Account Custodial Agreement and Disclosure Statement, as
currently in effect, is incorporated herein by reference to
Exhibit 14(h) of Fidelity Union Street Trust's (File No.
2-50318) Post-Effective Amendment No. 87.
(d) Fidelity Portfolio Advisory Services Individual Retirement
Account Custodial Agreement and Disclosure Statement, as
currently in effect, is incorporated herein by reference to
Exhibit 14(i) of Fidelity Union Street Trust's (File No.
2-50318) Post-Effective Amendment No. 87.
(e) Fidelity 403(b)(7) Custodial Account Agreement, as currently
in effect, is incorporated herein by reference to Exhibit
14(e) of Fidelity Union Street Trust's (File No. 2-50318)
Post-Effective Amendment No. 87.
(f) National Financial Services Corporation Defined Contribution
Retirement Plan and Trust Agreement, as currently in effect,
is incorporated herein by reference to Exhibit 14(k) of
Fidelity Union Street Trust's (File No. 2-50318)
Post-Effective Amendment No. 87.
(g) The CORPORATEplan for Retirement Profit Sharing/401K Plan, as
currently in effect, is incorporated herein by reference to
Exhibit 14(l) of Fidelity Union Street Trust's (File No.
2-50318) Post-Effective Amendment No. 87.
(h) The CORPORATEplan for Retirement Money Purchase Pension Plan,
as currently in effect, is incorporated herein by reference to
Exhibit 14(m) of Fidelity Union Street Trust's (File No.
2-50318) Post-Effective Amendment No. 87.
7
<PAGE>
FIDELITY ADVISOR SERIES I
(i) Fidelity Investments Section 403(b)(7) Individual Custodial
Account Agreement and Disclosure Statement, as currently in
effect, is incorporated herein by reference to Exhibit 14(f)
of Fidelity Commonwealth Trust's (File No. 2-52322)
Post-Effective Amendment No. 57.
(j) Plymouth Investments Defined Contribution Retirement Plan and
Trust Agreement, as currently in effect, is incorporated
herein by reference to Exhibit 14(o) of Fidelity Commonwealth
Trust's (File No. 2-52322) Post-Effective Amendment No. 57.
(k) The Fidelity Prototype Defined Benefit Pension Plan and Trust
Basic Plan Document and Adoption Agreement, as currently in
effect, is incorporated herein by reference to Exhibit 14(d)
of Fidelity Securities Fund's (File No. 2-93601)
Post-Effective Amendment No. 33.
(l) The Institutional Prototype Plan Basic Plan Document,
Standardized Adoption Agreement, and Non-Standardized Adoption
Agreement, as currently in effect, is incorporated herein by
reference to Exhibit 14(o) of Fidelity Securities Fund's (File
No. 2-93601) Post-Effective Amendment No. 33.
(m) The CORPORATE plan for Retirement 100(SERVICEMARK) Profit
Sharing/401(k) Basic Plan Document, Standardized Adoption
Agreement, and Non-Standardized Adoption Agreement, as
currently in effect, is incorporated herein by reference to
Exhibit 14(f) of Fidelity Securities Fund's (File No. 2-93601)
Post-Effective Amendment No. 33.
(n) The Fidelity Investments 401(a) Prototype Plan for Tax-Exempt
Employers Basic Plan Document, Standardized Profit Sharing
Plan Adoption Agreement, Non-Standardized Discretionary
Contribution Plan No. 002 Adoption Agreement, and
Non-Standardized Discretionary Contribution Plan No. 003
Adoption Agreement, as currently in effect, is incorporated
herein by reference to Exhibit 14(g) of Fidelity Securities
Fund's (File No. 2-93601) Post-Effective Amendment No. 33.
(o) Fidelity Investments 403(b) Sample Plan Basic Plan Document
and Adoption Agreement, as currently in effect, is
incorporated herein by reference to Exhibit 14(p) of Fidelity
Securities Fund's (File No. 2-93601) Post-Effective Amendment
No. 33.
(p) Fidelity Defined Contribution Retirement Plan and Trust
Agreement, as currently in effect, is incorporated herein by
reference to Exhibit 14(c) of Fidelity Securities Fund's (File
No. 2-93601) Post-Effective Amendment No. 33.
(q) Fidelity SIMPLE-IRA Plan Adoption Agreement, Company Profile
Form, and Plan Document, as currently in effect, is
incorporated herein by reference to Exhibit 14(q) of Fidelity
Aberdeen Street Trust's (File No. 33-43529) Post-Effective
Amendment No. 19.
(15) (a) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Equity Growth Fund: Class T is incorporated
herein by reference to Exhibit 15(a) of Post-Effective
Amendment No. 41.
(b) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Equity Growth Fund (formerly known as
Fidelity Advisor Equity Portfolio Growth): Institutional Class
is incorporated herein by reference to Exhibit 15(b) of
Post-Effective Amendment No. 38.
(c) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Mid Cap Fund: Class T (formerly known as
Class A) is incorporated herein by reference to Exhibit 15(c)
of Post-Effective Amendment No. 38.
(d) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Mid Cap Fund: Class B is incorporated herein
by reference to Exhibit 15(d) of Post-Effective Amendment No.
38.
8
<PAGE>
FIDELITY ADVISOR SERIES I
(e) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Mid Cap Fund: Institutional Class is
incorporated herein by reference to Exhibit 15(e) of
Post-Effective Amendment No. 38.
(f) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Large Cap Fund: Class T (formerly known as
Class A) is incorporated herein by reference to Exhibit 15(f)
of Post-Effective Amendment No. 38.
(g) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Large Cap Fund: Class B is incorporated
herein by reference to Exhibit 15(g) of Post-Effective
Amendment No. 38.
(h) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Large Cap Fund: Institutional Class is
incorporated herein by reference to Exhibit 15(h) of
Post-Effective Amendment No. 38.
(i) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Equity Growth Fund: Class A is incorporated
herein by reference to Exhibit 15(i) of Post-Effective
Amendment No. 34.
(j) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Mid Cap Fund: Class A is incorporated herein
by reference to Exhibit 15(j) of Post-Effective Amendment No.
34.
(k) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Large Cap Fund: Class A is incorporated
herein by reference to Exhibit 15(k) of Post-Effective
Amendment No. 34.
(l) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Equity Growth Fund: Class B is incorporated
herein by reference to Exhibit 15(l) of Post-Effective
Amendment No. 36.
(m) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Growth & Income Fund: Class A is incorporated
herein by reference to Exhibit 15(m) of Post-Effective
Amendment No. 36.
(n) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Growth & Income Fund: Class T is incorporated
herein by reference to Exhibit 15(n) of Post-Effective
Amendment No. 36.
(o) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Growth & Income Fund: Class B is incorporated
herein by reference to Exhibit 15(o) of Post-Effective
Amendment No. 36.
(p) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Growth & Income Fund: Institutional Class is
incorporated herein by reference to Exhibit 15(p) of
Post-Effective Amendment No. 38.
(q) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor TechnoQuant Growth Fund: Class A is
incorporated herein by reference to Exhibit 15(q) of
Post-Effective Amendment No. 36.
(r) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor TechnoQuant Growth Fund: Class T is
incorporated herein by reference to Exhibit 15(r) of
Post-Effective Amendment No. 36.
9
<PAGE>
FIDELITY ADVISOR SERIES I
(s) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor TechnoQuant Growth Fund: Class B is
incorporated herein by reference to Exhibit 15(s) of
Post-Effective Amendment No. 36.
(t) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor TechnoQuant Growth Fund: Institutional Class
is incorporated herein by reference to Exhibit 15(t) of
Post-Effective Amendment No. 38.
(u) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Equity Growth Fund: Class C is incorporated
herein by reference to Exhibit 15(u) of Post-Effective
Amendment No. 41.
(v) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Mid Cap Fund: Class C is incorporated herein
by reference to Exhibit 15(v) of Post-Effective Amendment No.
41.
(w) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Large Cap Fund: Class C is incorporated
herein by reference to Exhibit 15(w) of Post-Effective
Amendment No. 41.
(x) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor TechnoQuant Growth Fund: Class C is
incorporated herein by reference to Exhibit 15(x) of
Post-Effective Amendment No. 41.
(y) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Growth & Income Fund: Class C is incorporated
herein by reference to Exhibit 15(y) of Post-Effective
Amendment No. 41.
(z) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Growth Opportunities Fund: Class A is
incorporated herein by reference to Exhibit 15(z) of
Post-Effective Amendment No. 43.
(aa) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Growth Opportunities Fund: Class T is
incorporated herein by reference to Exhibit 15(aa) of
Post-Effective Amendment No. 43.
(bb) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Growth Opportunities Fund: Class B is
incorporated herein by reference to Exhibit 15(bb) of
Post-Effective Amendment No. 43.
(cc) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Growth Opportunities Fund: Class C is
incorporated herein by reference to Exhibit 15(cc) of
Post-Effective Amendment No. 43.
(dd) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Growth Opportunities Fund: Institutional
Class is incorporated herein by reference to Exhibit 15(dd) of
Post-Effective Amendment No. 43.
(ee) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Strategic Opportunities Fund: Class A is
incorporated herein by reference to Exhibit 15(ee) of
Post-Effective Amendment No. 43.
(ff) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Strategic Opportunities Fund: Class T is
incorporated herein by reference to Exhibit 15(ff) of
Post-Effective Amendment No. 43.
10
<PAGE>
FIDELITY ADVISOR SERIES I
(gg) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Strategic Opportunities Fund: Class B is
incorporated herein by reference to Exhibit 15(gg) of
Post-Effective Amendment No. 43.
(hh) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Strategic Opportunities Fund: Institutional
Class is incorporated herein by reference to Exhibit 15(hh) of
Post-Effective Amendment No. 43.
(ii) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Small Cap Fund: Class A is incorporated
herein by reference to Exhibit 15(ii) of Post-Effective
Amendment No. 45.
(jj) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Small Cap Fund: Class T is incorporated
herein by reference to Exhibit 15(jj) of Post-Effective
Amendment No. 45.
(kk) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Small Cap Fund: Class B is incorporated
herein by reference to Exhibit 15(kk) of Post-Effective
Amendment No. 45.
(ll) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Small Cap Fund: Class C is incorporated
herein by reference to Exhibit 15(ll) of Post-Effective
Amendment No. 45.
(mm) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Small Cap Fund: Institutional Class is
incorporated herein by reference to Exhibit 15(mm) of
Post-Effective Amendment No. 45.
(nn) Form of Distribution and Service Plan pursuant to Rule
12b-1 for Fidelity Advisor Dividend Growth Fund: Class A is
filed herein as Exhibit 15(nn).
(oo) Form of Distribution and Service Plan pursuant to Rule
12b-1 for Fidelity Advisor Dividend Growth Fund: Class T is
filed herein as Exhibit 15(oo).
(pp) Form of Distribution and Service Plan pursuant to Rule
12b-1 for Fidelity Advisor Dividend Growth Fund: Class B is
filed herein as Exhibit 15(pp).
(qq) Form of Distribution and Service Plan pursuant to Rule
12b-1 for Fidelity Advisor Dividend Growth Fund: Class C is
filed herein as Exhibit 15(qq).
(rr) Form of Distribution and Service Plan pursuant to Rule
12b-1 for Fidelity Advisor Dividend Growth Fund: Institutional
Class is filed herein as Exhibit 15(rr).
(ss) Form of Distribution and Service Plan pursuant to Rule
12b-1 for Fidelity Advisor Retirement Growth Fund: Class A is
filed herein as Exhibit 15(ss).
(tt) Form of Distribution and Service Plan pursuant to Rule
12b-1 for Fidelity Advisor Retirement Growth Fund: Class T is
filed herein as Exhibit 15(tt).
(uu) Form of Distribution and Service Plan pursuant to Rule
12b-1 for Fidelity Advisor Retirement Growth Fund: Class B is
filed herein as Exhibit 15(uu).
(vv) Form of Distribution and Service Plan pursuant to Rule
12b-1 for Fidelity Advisor Retirement Growth Fund: Class C is
filed herein as Exhibit 15(vv).
(ww) Form of Distribution and Service Plan pursuant to Rule
12b-1 for Fidelity Advisor Retirement Growth Fund:
Institutional Class is filed herein as Exhibit 15(ww).
11
<PAGE>
FIDELITY ADVISOR SERIES I
(xx) Form of Distribution and Service Plan pursuant to Rule 12b-1
for Fidelity Advisor Asset Allocation Fund: Class A is filed
herein as Exhibit 15(xx).
(yy) Form of Distribution and Service Plan pursuant to Rule
12b-1 for Fidelity Advisor Asset Allocation Fund: Class T is
filed herein as Exhibit 15(yy).
(zz) Form of Distribution and Service Plan pursuant to Rule
12b-1 for Fidelity Advisor Asset Allocation Fund: Class
B is filed herein as Exhibit 15(zz).
(aaa) Form of Distribution and Service Plan pursuant to Rule
12b-1 for Fidelity Advisor Asset Allocation Fund: Class C is
filed herein as Exhibit 15(aaa).
(bbb) Form of Distribution and Service Plan pursuant to Rule
12b-1 for Fidelity Advisor Asset Allocation Fund:
Institutional Class is filed herein as Exhibit 15(bbb).
(16) (a) Schedule for computation of cumulative total returns and
average annual returns is incorporated herein by reference to
16(a) of Post-Effective Amendment No. 29.
(b) Schedule for computation of adjusted net asset value and
moving averages calculations incorporated herein by reference
to Exhibit 16(b) of Post-Effective Amendment No. 29.
(17) Not applicable.
(18) (a) Multiple Class of Shares Plan pursuant to Rule 18f-3,
dated March 19, 1998, is incorporated herein by reference to
Exhibit 18(a) of Post-Effective Amendment No. 45.
(b) Schedule I, dated July 16, 1998, to Multiple Class of
Shares Plan pursuant to Rule 18f-3 on behalf of Fidelity
Advisor Equity Growth Fund, Fidelity Advisor Mid Cap Fund,
Fidelity Advisor Large Cap Fund, Fidelity Advisor Growth &
Income Fund, Fidelity Advisor TechnoQuant Growth Fund,
Fidelity Advisor Strategic Opportunities Fund, Fidelity
Advisor Growth Opportunities Fund, and Fidelity Advisor Small
Cap Fund is filed herein as Exhibit 18(b).
(c) Form of Schedule I to Multiple Class of Shares Plan pursuant
to Rule 18f-3 on behalf of Fidelity Advisor Dividend Growth
Fund, Fidelity Advisor Retirement Growth Fund, and Fidelity
Advisor Asset Allocation Fund is filed herein as Exhibit
18(c).
Item 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
The Board of Trustees of the Registrant is the same as the board of
other funds advised by FMR, each of which has Fidelity Management & Research
Company as its investment adviser. In addition, the officers of these funds are
substantially identical. Nonetheless, the Registrant takes the position that it
is not under common control with these other funds since the power residing in
the respective boards and officers arises as the result of an official position
with the respective funds.
Item 26. NUMBER OF HOLDERS OF SECURITIES
Title of Class: Shares of Beneficial Interest as of August 31,
1998
NAME OF SERIES NUMBER OF
RECORD HOLDERS
Fidelity Advisor Equity Growth Fund: Class A 5,124
Fidelity Advisor Equity Growth Fund: Class T 124,357
12
<PAGE>
FIDELITY ADVISOR SERIES I
Fidelity Advisor Equity Growth Fund: Class B 17,188
Fidelity Advisor Equity Growth Fund: Class C 2,113
Fidelity Advisor Equity Growth Fund: 3,893
Institutional Class
Fidelity Advisor Mid Cap Fund: Class A 929
Fidelity Advisor Mid Cap Fund: Class T 22,757
Fidelity Advisor Mid Cap Fund: Class B 6,153
Fidelity Advisor Mid Cap Fund: Class C 884
Fidelity Advisor Mid Cap Fund: Institutional Class 538
Fidelity Advisor Large Cap Fund: Class A 360
Fidelity Advisor Large Cap Fund: Class T 3,036
Fidelity Advisor Large Cap Fund: Class B 2,192
Fidelity Advisor Large Cap Fund: Class C 201
Fidelity Advisor Large Cap Fund: Institutional Class 33
Fidelity Advisor Growth & Income Fund: Class A 1,725
Fidelity Advisor Growth & Income Fund: Class T 15,439
Fidelity Advisor Growth & Income Fund: Class B 7,199
Fidelity Advisor Growth & Income Fund: Class C 2,037
Fidelity Advisor Growth & Income Fund:
Institutional Class 701
Fidelity Advisor TechnoQuant Growth Fund: Class A 323
Fidelity Advisor TechnoQuant Growth Fund: Class T 1,832
Fidelity Advisor TechnoQuant Growth Fund: Class B 947
Fidelity Advisor TechnoQuant Growth Fund: Class C 63
Fidelity Advisor TechnoQuant Growth Fund:
Institutional Class 13
Fidelity Advisor Strategic Opportunities
Fund: Initial Class 928
Fidelity Advisor Strategic Opportunities
Fund Class A 597
Fidelity Advisor Strategic Opportunities
Fund: Class T 22,211
Fidelity Advisor Strategic Opportunities
Fund: Class B 8,367
Fidelity Advisor Strategic Opportunities
Fund: Institutional Class 86
Fidelity Advisor Growth Opportunities Fund:
Class A 22,110
Fidelity Advisor Growth Opportunities Fund:
Class T 533,581
Fidelity Advisor Growth Opportunities Fund:
Class B 83,902
Fidelity Advisor Growth Opportunities Fund:
Class C 12,738
Fidelity Advisor Growth Opportunities Fund:
Institutional Class 3,680
Fidelity Advisor Small Cap Fund: Class A 0
Fidelity Advisor Small Cap Fund: Class T 0
Fidelity Advisor Small Cap Fund: Class B 0
Fidelity Advisor Small Cap Fund: Class C 0
Fidelity Advisor Small Cap Fund: Institutional Class 0
Fidelity Advisor Dividend Growth Fund: Class A 0
Fidelity Advisor Dividend Growth Fund: Class T 0
Fidelity Advisor Dividend Growth Fund: Class B 0
Fidelity Advisor Dividend Growth Fund: Class C 0
Fidelity Advisor Dividend Growth Fund:
Institutional Class 0
Fidelity Advisor Retirement Growth Fund: Class A 0
Fidelity Advisor Retirement Growth Fund: Class T 0
Fidelity Advisor Retirement Growth Fund: Class B 0
Fidelity Advisor Retirement Growth Fund: Class C 0
Fidelity Advisor Retirement Growth Fund: Institutional Class 0
13
<PAGE>
FIDELITY ADVISOR SERIES I
Fidelity Advisor Asset Allocation Fund: Class A 0
Fidelity Advisor Asset Allocation Fund: Class T 0
Fidelity Advisor Asset Allocation Fund: Class B 0
Fidelity Advisor Asset Allocation Fund: Class C 0
Fidelity Advisor Asset Allocation Fund: Institutional Class 0
Item 27.INDEMNIFICATION
Article XI, Section 2 of the Declaration of Trust sets forth the
reasonable and fair means for determining whether indemnification shall be
provided to any past or present Trustee or officer. It states that the
Registrant shall indemnify any present or past Trustee or officer to the
fullest extent permitted by law against liability and all expenses
reasonably incurred by him in connection with any claim, action, suit, or
proceeding in which he is involved by virtue of his service as a Trustee, an
officer, or both. Additionally, amounts paid or incurred in settlement of
such matters are covered by this indemnification. Indemnification will not
be provided in certain circumstances, however. These include instances of
willful misfeasance, bad faith, gross negligence, and reckless disregard of
the duties involved in the conduct of the particular office involved.
Pursuant to Section 11 of the Distribution Agreement, the Registrant
agrees to indemnify and hold harmless the Distributor and each of its
directors and officers and each person, if any, who controls the Distributor
within the meaning of Section 15 of the 1933 Act against any loss,
liability, claim, damages or expense arising by reason of any person
acquiring any shares, based upon the ground that the registration statement,
Prospectus, Statement of Additional Information, shareholder reports or
other information filed or made public by the Registrant included a
materially misleading statement or omission. However, the Registrant does
not agree to indemnify the Distributor or hold it harmless to the extent
that the statement or omission was made in reliance upon, and in conformity
with, information furnished to the Registrant by or on behalf of the
Distributor. The Registrant does not agree to indemnify the parties against
any liability to which they would be subject by reason of willful
misfeasance, bad faith, gross negligence, and reckless disregard of the
obligations and duties under the Distribution Agreement.
Pursuant to the agreement by which Fidelity Service Company, Inc.
("Service") is appointed transfer agent, the Registrant agrees to indemnify
and hold Service harmless against any losses, claims, damages, liabilities
or expenses (including reasonable counsel fees and expenses) resulting from:
(1) any claim, demand, action or suit brought by any person other than
the Registrant, including by a shareholder, which names the Service and/or
the Registrant as a party and is not based on and does not result from
Service's willful misfeasance, bad faith or negligence or reckless disregard
of duties, and arises out of or in connection with Service's performance
under the Transfer Agency Agreement; or
(2) any claim, demand, action or suit (except to the extent
contributed to by Service's willful misfeasance, bad faith or negligence or
reckless disregard of duties) which results from the negligence of the
Registrant, or from Service's acting upon any instruction(s) reasonably
believed by it to have been executed or communicated by any person duly
authorized by the Registrant, or as a result of Service's acting in reliance
upon advice reasonably believed by Service to have been given by counsel for
the Registrant, or as a result of Service's acting in reliance upon any
instrument or stock certificate reasonably believed by it to have been
genuine and signed, countersigned or executed by the proper person.
Pursuant to the agreement by which Fidelity Investments Institutional
Operations Company, Inc. ("FIIOC") is appointed transfer agent, the
Registrant agrees to indemnify and hold FIIOC harmless against any losses,
claims, damages, liabilities or expenses (including reasonable counsel fees
and expenses) resulting from:
14
<PAGE>
FIDELITY ADVISOR SERIES I
(1) any claim, demand, action or suit brought by any person other than
the Registrant, including by a shareholder, which names FIIOC and/or the
Registrant as a party and is not based on and does not result from FIIOC's
willful misfeasance, bad faith or negligence or reckless disregard of
duties, and arises out of or in connection with FIIOC's performance under
the Transfer Agency Agreement; or
(2) any claim, demand, action or suit (except to the extent
contributed to by FIIOC's willful misfeasance, bad faith or negligence or
reckless disregard of duties) which results from the negligence of the
Registrant, or from FIIOC's acting upon any instruction(s) reasonably
believed by it to have been executed or communicated by any person duly
authorized by the Registrant, or as a result of FIIOC's acting in reliance
upon advice reasonably believed by FIIOC to have been given by counsel for
the Registrant, or as a result of FIIOC's acting in reliance upon any
instrument or stock certificate reasonably believed by it to have been
genuine and signed, countersigned or executed by the proper person.
Item 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
(1) FIDELITY MANAGEMENT & RESEARCH COMPANY (FMR)
82 Devonshire Street, Boston, MA 02109
FMR serves as investment adviser to a number of other investment companies.
The directors and officers of the Adviser have held, during the past two fiscal
years, the following positions of a substantial nature.
Edward C. Johnson 3d Chairman of the Board and Director of FMR;
President and Chief Executive Officer of FMR
Corp.; Chairman of the Board and Director of
FMR Corp., Fidelity Investments Money
Management, Inc. (FIMM), Fidelity Management
& Research (U.K.) Inc. (FMR U.K.), and
Fidelity Management & Research (Far East)
Inc. (FMR Far East); Chairman of the
Executive Committee of FMR; Director of
Fidelity Investments Japan Limited (FIJ);
President and Trustee of funds advised by
FMR.
Robert C. Pozen President and Director of FMR; Senior Vice
President and Trustee of funds advised by
FMR; President and Director of FIMM, FMR
U.K., and FMR Far East; Previously, General
Counsel, Managing Director, and Senior Vice
President of FMR Corp.
Peter S. Lynch Vice Chairman of the Board and Director of
FMR.
John H. Carlson Vice President of FMR and of funds advised by
FMR.
Dwight D. Churchill Senior Vice President of FMR and Vice
President of Bond Funds advised by FMR; Vice
President of FIMM.
Brian Clancy Vice President of FMR and Treasurer of FMR,
FIMM, FMR U.K., and FMR Far East.
Barry Coffman Vice President of FMR.
Arieh Coll Vice President of FMR.
Frederic G. Corneel Tax Counsel of FMR.
15
<PAGE>
FIDELITY ADVISOR SERIES I
Stephen G. Manning Assistant Treasurer of FMR, FIMM, FMR U.K.,
FMR Far East; Vice President and Treasurer of
FMR Corp.; Treasurer of Strategic Advisers,
Inc.
William Danoff Senior Vice President of FMR and Vice
President of a fund advised by FMR.
Scott E. DeSano Vice President of FMR.
Penelope Dobkin Vice President of FMR and of a fund advised
by FMR.
Walter C. Donovan Vice President of FMR.
Bettina Doulton Vice President of FMR and of funds advised
by FMR.
Margaret L. Eagle Vice President of FMR and of funds advised by
FMR.
William R. Ebsworth Vice President of FMR.
Richard B. Fentin Senior Vice President of FMR and Vice
President of a fund advised by FMR.
Gregory Fraser Vice President of FMR and of a fund advised
by FMR.
Jay Freedman Assistant Clerk of FMR; Clerk of FMR Corp.,
FMR U.K., FMR Far East, and Strategic
Advisers, Inc.; Secretary of FIMM; Associate
General Counsel FMR Corp.
David L. Glancy Vice President of FMR and of a fund advised
by FMR.
Barry A. Greenfield Vice President of FMR and of a fund advised
by FMR.
Boyce I. Greer Senior Vice President of FMR and Vice
President of Money Market Funds advised by
FMR; Vice President of FIMM.
Bart A. Grenier Senior Vice President of FMR; Vice President
of High-Income Funds advised by FMR.
Robert Haber Vice President of FMR.
Richard C. Habermann Senior Vice President of FMR; Vice President
of funds advised by FMR.
Fred L. Henning Jr. Senior Vice President of FMR and Vice
President of Fixed-Income Funds advised by
FMR.
Bruce T. Herring Vice President of FMR.
Robert F. Hill Vice President of FMR; Director of Technical
Research.
Abigail P. Johnson Senior Vice President of FMR and Vice
President of funds advised by FMR; Director
of FMR Corp.; Associate Director and Senior
Vice President of Equity Funds advised by
FMR.
16
<PAGE>
FIDELITY ADVISOR SERIES I
David B. Jones Vice President of FMR.
Steven Kaye Vice President of FMR and of a fund advised
by FMR.
Francis V. Knox Vice President of FMR; Compliance Officer of
FMR U.K.
Harris Leviton Vice President of FMR and of a fund advised
by FMR.
Bradford E. Lewis Vice President of FMR and of funds advised by
FMR.
Richard R. Mace Jr. Vice President of FMR and of funds advised by
FMR.
Charles A. Mangum Vice President of FMR and of a fund advised
by FMR.
Kevin McCarey Vice President of FMR and of a fund advised
by FMR.
Neal P. Miller Vice President of FMR.
Jacques Perold Vice President of FMR.
Alan Radlo Vice President of FMR.
Eric D. Roiter Senior Vice President and General Counsel of
FMR and Secretary of funds advised by FMR.
Lee H. Sandwen Vice President of FMR.
Patricia A. Satterthwaite Vice President of FMR and of a fund advised
by FMR.
Fergus Shiel Vice President of FMR.
Richard A. Silver Vice President of FMR.
Carol A. Smith-Fachetti Vice President of FMR.
Steven J. Snider Vice President of FMR and of funds advised by
FMR.
Thomas T. Soviero Vice President of FMR and of a fund advised
by FMR.
Richard Spillane Senior Vice President of FMR; Associate
Director and Senior Vice President of Equity
Funds advised by FMR; Previously, Senior Vice
President and Director of Operations and
Compliance of FMR U.K.
Thomas M. Sprague Vice President of FMR and of funds advised
by FMR.
Robert E. Stansky Senior Vice President of FMR and Vice
President of a fund advised by FMR.
Scott D. Stewart Vice President of FMR.
Thomas Sweeney Vice President of FMR.
17
<PAGE>
FIDELITY ADVISOR SERIES I
Beth F. Terrana Senior Vice President of FMR and Vice
President of a fund advised by FMR.
Yoko Tilley Vice President of FMR.
Joel C. Tillinghast Vice President of FMR and of a fund advised
by FMR.
Robert Tuckett Vice President of FMR.
Jennifer Uhrig Vice President of FMR and of funds advised
by FMR.
George A. Vanderheiden Senior Vice President of FMR and Vice
President of funds advised by FMR; Director
of FMR Corp.
Steven S. Wymer Vice President of FMR and of a fund advised
by FMR.
(2) FIDELITY MANAGEMENT & RESEARCH (U.K.) INC. (FMR U.K.)
25 Lovat Lane, London, EC3R 8LL, England
FMR U.K. provides investment advisory services to Fidelity Management &
Research Company and Fidelity Management Trust Company. The directors and
officers of the Sub-Adviser have held the following positions of a
substantial nature during the past two fiscal years.
Edward C. Johnson 3d Chairman of the Board and Director of FMR U.K.,
FMR, FMR Corp., FIMM, and FMR Far East;
President and Chief Executive Officer of FMR
Corp.; Chairman of the Executive Committee of
FMR; Director of Fidelity Investments Japan
Limited (FIJ); President and Trustee of funds
advised by FMR.
Robert C. Pozen President and Director of FMR; Senior Vice
President and Trustee of funds advised by FMR;
President and Director of FIMM, FMR U.K., and
FMR Far East; Previously, General Counsel,
Managing Director, and Senior Vice President of
FMR Corp.
Brian Clancy Treasurer of FMR U.K., FMR Far East, FMR, and
FIMM and Vice President of FMR.
Stephen G. Manning Assistant Treasurer of FMR U.K., FMR, FMR Far
East, and FIMM; Vice President and Treasurer of
FMR Corp.; Treasurer of Strategic Advisers, Inc.
Francis V. Knox Compliance Officer of FMR U.K.; Vice President
of FMR.
Jay Freedman Clerk of FMR U.K., FMR Far East, FMR Corp. and
Strategic Advisers, Inc.; Assistant Clerk of
FMR; Secretary of FIMM; Associate General
Counsel FMR Corp.
18
<PAGE>
FIDELITY ADVISOR SERIES I
Sarah H. Zenoble Senior Vice President and Director of Operations
and Compliance.
(3) FIDELITY MANAGEMENT & RESEARCH (Far East) INC. (FMR Far East)
Shiroyama JT Mori Bldg., 4-3-1 Toranomon Minato-ku, Tokyo 105, Japan
FMR Far East provides investment advisory services to Fidelity Management &
Research Company and Fidelity Management Trust Company. The directors and
officers of the Sub-Adviser have held the following positions of a substantial
nature during the past two fiscal years.
Edward C. Johnson 3d Chairman of the Board and Director of FMR Far
East, FMR, FMR Corp., FIMM, and FMR U.K.;
Chairman of the Executive Committee of FMR;
President and Chief Executive Officer of FMR
Corp.; Director of Fidelity Investments Japan
Limited (FIJ); President and Trustee of funds
advised by FMR.
Robert C. Pozen President and Director of FMR; Senior Vice
President and Trustee of funds advised by FMR;
President and Director of FIMM, FMR U.K., and
FMR Far East; Previously, General Counsel,
Managing Director, and Senior Vice President of
FMR Corp.
Robert H. Auld Senior Vice President of FMR Far East.
Brian Clancy Treasurer of FMR Far East, FMR U.K., FMR, and
FIMM and Vice President of FMR.
Jay Freedman Clerk of FMR Far East, FMR U.K., FMR Corp. and
Strategic Advisers, Inc.; Assistant Clerk of
FMR; Secretary of FIMM; Associate General
Counsel FMR Corp.
Stephen G. Manning Assistant Treasurer of FMR Far East, FMR, FMR
U.K., and FIMM; Vice President and Treasurer of
FMR Corp.; Treasurer of Strategic Advisers, Inc.
Billy Wilder Vice President of FMR Far East; President and
Representative Director of Fidelity Investments
Japan Limited.
Item 29. PRINCIPAL UNDERWRITERS
(a) Fidelity Distributors Corporation (FDC) acts as distributor for most
funds advised by FMR or an affiliate.
(b)
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES
BUSINESS ADDRESS* WITH UNDERWRITER WITH REGISTRANT
Edward C. Johnson 3d Director Trustee and President
19
<PAGE>
FIDELITY ADVISOR SERIES I
Michael Mlinac Director None
James Curvey Director None
Martha B. Willis President None
Eric D. Roiter Senior Vice President Secretary
Caron Ketchum Treasurer and Controller None
Gary Greenstein Assistant Treasurer None
Jay Freedman Assistant Clerk None
Linda Holland Compliance Officer None
* 82 Devonshire Street, Boston, MA
(c) Not applicable.
Item 30. LOCATION OF ACCOUNTS AND RECORDS
All accounts, books, and other documents required to be maintained by
Section 31a of the 1940 Act and the Rules promulgated thereunder are maintained
by Fidelity Management & Research Company or Fidelity Service Company, Inc., 82
Devonshire Street, Boston, MA 02109, or the funds' respective custodians: The
Chase Manhattan Bank, 1 Chase Manhattan Plaza, New York, NY, Brown Brothers
Harriman & Co., 40 Water Street, Boston, MA, or State Street Bank and Trust
Company, 1776 Heritage Drive, North Quincy, MA.
Item 31. MANAGEMENT SERVICES
Not applicable.
Item 32. UNDERTAKINGS
(a) The Registrant undertakes for Fidelity Advisor Dividend Growth Fund,
Fidelity Advisor Retirement Growth Fund, and Fidelity Advisor Asset
Allocation Fund: (1) to call a meeting of shareholders for the purpose of
voting upon the questions of removal of a trustee or trustees, when
requested to do so by record holders of not less than 10% of its outstanding
shares; and (2) to assist in communications with other shareholders pursuant
to Section 16(c)(1) and (2), whenever shareholders meeting the
qualifications set forth in Section 16(c) seek the opportunity to
communicate with other shareholders with a view toward requesting a meeting.
(b) The Registrant, on behalf of Fidelity Advisor Dividend Growth Fund,
Fidelity Advisor Retirement Growth Fund, and Fidelity Advisor Asset
Allocation Fund, provided the information required by Item 5A is contained
in the annual report, undertakes to furnish to each person to whom a
prospectus has been delivered, upon their request and without charge, a copy
of the Registrant's latest annual report to shareholders.
20
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment No. 46 to the Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of Boston,
and Commonwealth of Massachusetts, on the 28th day of September, 1998.
Fidelity Advisor Series I
By:/s/Edward C. Johnson 3d, President +
-------------------------------------
Edward C. Johnson 3d, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
(Signature) (Title) (Date)
- ---------- ----- ----
/s/Edward C. Johnson 3d + President and Trustee September 28, 1998
- ---------------------------- (Principal Executive Officer)
Edward C. Johnson 3d
/s/Richard A. Silver * Treasurer September 28, 1998
- ----------------------------
Richard A. Silver
/s/Robert C. Pozen Trustee September 28, 1998
- ----------------------------
Robert C. Pozen
/s/Ralph F. Cox ** Trustee September 28, 1998
- ----------------------------
Ralph F. Cox
/s/Phyllis Burke Davis ** Trustee September 28, 1998
- ----------------------------
Phyllis Burke Davis
/s/Robert M. Gates *** Trustee September 28, 1998
- ----------------------------
Robert M. Gates
/s/E. Bradley Jones ** Trustee September 28, 1998
- ----------------------------
E. Bradley Jones
/s/Donald J. Kirk ** Trustee September 28, 1998
- ----------------------------
Donald J. Kirk
/s/Peter S. Lynch ** Trustee September 28, 1998
- ----------------------------
Peter S. Lynch
/s/Marvin L. Mann ** Trustee September 28, 1998
- ----------------------------
Marvin L. Mann
/s/William O. McCoy ** Trustee September 28, 1998
- ----------------------------
William O. McCoy
<PAGE>
/s/Gerald C. McDonough ** Trustee September 28, 1998
- ----------------------------
Gerald C. McDonough
/s/Thomas R. Williams ** Trustee September 28, 1998
- ----------------------------
Thomas R. Williams
+ Signature affixed by Robert C. Pozen pursuant to a power of attorney dated
July 17, 1997 and filed herewith.
* Signature affixed by John H. Costello pursuant to a power of attorney dated
June 30,1997 and filed herewith.
** Signature affixed by Robert C. Hacker pursuant to a power of attorney dated
December 19, 1996 and filed herewith.
*** Signature affixed by Robert C. Hacker pursuant to a power of attorney dated
March 6, 1997 and filed herewith.
2
<PAGE>
POWER OF ATTORNEY
I, the undersigned President and Director, Trustee, or General Partner,
as the case may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Hereford Street Trust
Fidelity Aberdeen Street Trust Fidelity Income Fund
Fidelity Advisor Series I Fidelity Institutional Cash Portfolios
Fidelity Advisor Series II Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Advisor Series III Fidelity Investment Trust
Fidelity Advisor Series IV Fidelity Magellan Fund
Fidelity Advisor Series V Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series VI Fidelity Money Market Trust
Fidelity Advisor Series VII Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series VIII Fidelity Municipal Trust
Fidelity Beacon Street Trust Fidelity Municipal Trust II
Fidelity Boston Street Trust Fidelity New York Municipal Trust
Fidelity California Municipal Trust Fidelity New York Municipal Trust II
Fidelity California Municipal Trust II Fidelity Phillips Street Trust
Fidelity Capital Trust Fidelity Puritan Trust
Fidelity Charles Street Trust Fidelity Revere Street Trust
Fidelity Commonwealth Trust Fidelity School Street Trust
Fidelity Concord Street Trust Fidelity Securities Fund
Fidelity Congress Street Fund Fidelity Select Portfolios
Fidelity Contrafund Fidelity Sterling Performance Portfolio, L.P.
Fidelity Corporate Trust Fidelity Summer Street Trust
Fidelity Court Street Trust Fidelity Trend Fund
Fidelity Court Street Trust II Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Covington Trust Fidelity U.S. Investments-Government Securities
Fidelity Daily Money Fund Fund, L.P.
Fidelity Destiny Portfolios Fidelity Union Street Trust
Fidelity Deutsche Mark Performance Fidelity Union Street Trust II
Portfolio, L.P. Fidelity Yen Performance Portfolio, L.P.
Fidelity Devonshire Trust Newbury Street Trust
Fidelity Exchange Fund Variable Insurance Products Fund
Fidelity Financial Trust Variable Insurance Products Fund II
Fidelity Fixed-Income Trust Variable Insurance Products Fund III
Fidelity Government Securities Fund
Fidelity Hastings Street Trust
in addition to any other investment company for which Fidelity Management &
Research Company or an affiliate acts as investment adviser and for which the
undersigned individual serves as President and Director, Trustee, or General
Partner (collectively, the "Funds"), hereby constitute and appoint Robert C.
Pozen my true and lawful attorney-in-fact, with full power of substitution, and
with full power to him to sign for me and in my name in the appropriate
capacity, all Registration Statements of the Funds on Form N-1A, Form N-8A, or
any successor thereto, any and all subsequent Amendments, Pre-Effective
Amendments, or Post-Effective Amendments to said Registration Statements on Form
N-1A, Form N-8A, or any successor thereto, any Registration Statements on Form
N-14, and any supplements or other instruments in connection therewith, and
generally to do all such things in my name and on my behalf in connection
therewith as said attorney-in-fact deems necessary or appropriate, to comply
with the provisions of the Securities Act of 1933 and the Investment Company Act
of 1940, and all related requirements of the Securities and Exchange Commission.
I hereby ratify and confirm all that said attorney-in-fact or his substitutes
may do or cause to be done by virtue hereof. This power of attorney is effective
for all documents filed on or after August 1, 1997.
</TABLE>
WITNESS my hand on the date set forth below.
/s/Edward C. Johnson 3d July 17, 1997
- -----------------------
Edward C. Johnson 3d
<PAGE>
POWER OF ATTORNEY
I, the undersigned Treasurer and principal financial and accounting
officer of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Aberdeen Street Trust Fidelity Hereford Street Trust
Fidelity Advisor Series I Fidelity Income Fund
Fidelity Advisor Series II Fidelity Institutional Cash Portfolios
Fidelity Advisor Series III Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Advisor Series IV Fidelity Investment Trust
Fidelity Advisor Series V Fidelity Magellan Fund
Fidelity Advisor Series VI Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series VII Fidelity Money Market Trust
Fidelity Advisor Series VIII Fidelity Mt. Vernon Street Trust
Fidelity Beacon Street Trust Fidelity Municipal Trust
Fidelity Boston Street Trust Fidelity Municipal Trust II
Fidelity California Municipal Trust Fidelity New York Municipal Trust
Fidelity California Municipal Trust II Fidelity New York Municipal Trust II
Fidelity Capital Trust Fidelity Phillips Street Trust
Fidelity Charles Street Trust Fidelity Puritan Trust
Fidelity Commonwealth Trust Fidelity Revere Street Trust
Fidelity Concord Street Trust Fidelity School Street Trust
Fidelity Congress Street Fund Fidelity Securities Fund
Fidelity Contrafund Fidelity Select Portfolios
Fidelity Corporate Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Court Street Trust Fidelity Summer Street Trust
Fidelity Court Street Trust II Fidelity Trend Fund
Fidelity Covington Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Daily Money Fund Fidelity U.S. Investments-Government Securities
Fidelity Destiny Portfolios Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity Union Street Trust
Portfolio, L.P. Fidelity Union Street Trust II
Fidelity Devonshire Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Exchange Fund Newbury Street Trust
Fidelity Financial Trust Variable Insurance Products Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund II
Fidelity Government Securities Fund Variable Insurance Products Fund III
Fidelity Hastings Street Trust
plus any other investment company for which Fidelity Management & Research
Company or an affiliate acts as investment adviser and for which the undersigned
individual serves as President and Director, Trustee, or General Partner
(collectively, the "Funds"), hereby constitute and appoint John H. Costello my
true and lawful attorney-in-fact, with full power of substitution, and with full
power to sign for me and in my name in the appropriate capacity, all
Registration Statements of the Funds on Form N-1A, Form N-8A or any successor
thereto, any and all subsequent Amendments, Pre-Effective Amendments, or
Post-Effective Amendments to said Registration Statements on Form N-1A or any
successor thereto, any Registration Statements on Form N-14, and any supplements
or other instruments in connection therewith, and generally to do all such
things in my name and behalf in connection therewith as said attorneys-in-fact
deems necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and the Investment Company Act of 1940, and all related requirements
of the Securities and Exchange Commission. I hereby ratify and confirm all that
said attorney-in-fact or their substitutes may do or cause to be done by virtue
hereof. This power of attorney is effective for all documents filed on or after
July 1, 1997.
</TABLE>
WITNESS my hand on the date set forth below.
/s/Richard A. Silver June 30, 1997
- --------------------------
Richard A. Silver
<PAGE>
POWER OF ATTORNEY
We, the undersigned Directors, Trustees, or General Partners, as the
case may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Aberdeen Street Trust Fidelity Government Securities Fund
Fidelity Advisor Annuity Fund Fidelity Hastings Street Trust
Fidelity Advisor Series I Fidelity Hereford Street Trust
Fidelity Advisor Series II Fidelity Income Fund
Fidelity Advisor Series III Fidelity Institutional Cash Portfolios
Fidelity Advisor Series IV Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Advisor Series V Fidelity Institutional Trust
Fidelity Advisor Series VI Fidelity Investment Trust
Fidelity Advisor Series VII Fidelity Magellan Fund
Fidelity Advisor Series VIII Fidelity Massachusetts Municipal Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust
Fidelity Boston Street Trust Fidelity Mt. Vernon Street Trust
Fidelity California Municipal Trust Fidelity Municipal Trust
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Capital Trust Fidelity New York Municipal Trust
Fidelity Charles Street Trust Fidelity New York Municipal Trust II
Fidelity Commonwealth Trust Fidelity Phillips Street Trust
Fidelity Congress Street Fund Fidelity Puritan Trust
Fidelity Contrafund Fidelity Revere Street Trust
Fidelity Corporate Trust Fidelity School Street Trust
Fidelity Court Street Trust Fidelity Securities Fund
Fidelity Court Street Trust II Fidelity Select Portfolios
Fidelity Covington Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Daily Money Fund Fidelity Summer Street Trust
Fidelity Daily Tax-Exempt Fund Fidelity Trend Fund
Fidelity Destiny Portfolios Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity U.S. Investments-Government Securities
Portfolio, L.P. Fund, L.P.
Fidelity Devonshire Trust Fidelity Union Street Trust
Fidelity Exchange Fund Fidelity Union Street Trust II
Fidelity Financial Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Variable Insurance Products Fund II
</TABLE>
plus any other investment company for which Fidelity Management & Research
Company or an affiliate acts as investment adviser and for which the undersigned
individual serves as Directors, Trustees, or General Partners (collectively, the
"Funds"), hereby constitute and appoint Arthur J. Brown, Arthur C. Delibert,
Stephanie A. Djinis, Robert C. Hacker, Thomas M. Leahey, Richard M. Phillips,
and Dana L. Platt, each of them singly, our true and lawful attorneys-in-fact,
with full power of substitution, and with full power to each of them, to sign
for us and in our names in the appropriate capacities, all Registration
Statements of the Funds on Form N-1A, Form N-8A or any successor thereto, any
and all subsequent Amendments, Pre-Effective Amendments, or Post-Effective
Amendments to said Registration Statements on Form N-1A or any successor
thereto, any Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in our
names and behalf in connection therewith as said attorneys-in-fact deems
necessary or appropriate, to comply with the provisions of the Securities Act of
1933 and the Investment Company Act of 1940, and all related requirements of the
Securities and Exchange Commission. I hereby ratify and confirm all that said
attorneys-in-fact or their substitutes may do or cause to be done by virtue
hereof. This power of attorney is effective for all documents filed on or after
January 1, 1997.
<PAGE>
WITNESS our hands on this nineteenth day of December, 1996.
/s/Edward C. Johnson 3d /s/Peter S. Lynch
- ------------------------------ ------------------------------
Edward C. Johnson 3d Peter S. Lynch
/s/J. Gary Burkhead /s/William O. McCoy
- ------------------------------ -------------------------------
J. Gary Burkhead William O. McCoy
/s/Ralph F. Cox /s/Gerald C. McDonough
- ------------------------------ -------------------------------
Ralph F. Cox Gerald C. McDonough
/s/Phyllis Burke Davis /s/Marvin L. Mann
- ------------------------------ --------------------------------
Phyllis Burke Davis Marvin L. Mann
/s/E. Bradley Jones /s/Thomas R. Williams
- ------------------------------ --------------------------------
E. Bradley Jones Thomas R. Williams
/s/Donald J. Kirk
- ------------------------------
Donald J. Kirk
2
<PAGE>
POWER OF ATTORNEY
I, the undersigned Director, Trustee, or General Partner, as the case
may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Aberdeen Street Trust Fidelity Government Securities Fund
Fidelity Advisor Annuity Fund Fidelity Hastings Street Trust
Fidelity Advisor Series I Fidelity Hereford Street Trust
Fidelity Advisor Series II Fidelity Income Fund
Fidelity Advisor Series III Fidelity Institutional Cash Portfolios
Fidelity Advisor Series IV Fidelity Institutional Tax-Exempt Cash Portfolios
Fidelity Advisor Series V Fidelity Institutional Trust
Fidelity Advisor Series VI Fidelity Investment Trust
Fidelity Advisor Series VII Fidelity Magellan Fund
Fidelity Advisor Series VIII Fidelity Massachusetts Municipal Trust
Fidelity Beacon Street Trust Fidelity Money Market Trust
Fidelity Boston Street Trust Fidelity Mt. Vernon Street Trust
Fidelity California Municipal Trust Fidelity Municipal Trust
Fidelity California Municipal Trust II Fidelity Municipal Trust II
Fidelity Capital Trust Fidelity New York Municipal Trust
Fidelity Charles Street Trust Fidelity New York Municipal Trust II
Fidelity Commonwealth Trust Fidelity Phillips Street Trust
Fidelity Congress Street Fund Fidelity Puritan Trust
Fidelity Contrafund Fidelity Revere Street Trust
Fidelity Corporate Trust Fidelity School Street Trust
Fidelity Court Street Trust Fidelity Securities Fund
Fidelity Court Street Trust II Fidelity Select Portfolios
Fidelity Covington Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Daily Money Fund Fidelity Summer Street Trust
Fidelity Daily Tax-Exempt Fund Fidelity Trend Fund
Fidelity Destiny Portfolios Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Deutsche Mark Performance Fidelity U.S. Investments-Government Securities
Portfolio, L.P. Fund, L.P.
Fidelity Devonshire Trust Fidelity Union Street Trust
Fidelity Exchange Fund Fidelity Union Street Trust II
Fidelity Financial Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Variable Insurance Products Fund II
</TABLE>
plus any other investment company for which Fidelity Management & Research
Company or an affiliate acts as investment adviser and for which the undersigned
individual serves as Director, Trustee, or General Partner (collectively, the
"Funds"), hereby constitute and appoint Arthur J. Brown, Arthur C. Delibert,
Stephanie A. Djinis, Robert C. Hacker, Thomas M. Leahey, Richard M. Phillips,
and Dana L. Platt, each of them singly, my true and lawful attorneys-in-fact,
with full power of substitution, and with full power to each of them, to sign
for me and in my name in the appropriate capacities, all Registration Statements
of the Funds on Form N-1A, Form N-8A or any successor thereto, any and all
subsequent Amendments, Pre-Effective Amendments, or Post-Effective Amendments to
said Registration Statements on Form N-1A or any successor thereto, any
Registration Statements on Form N-14, and any supplements or other instruments
in connection therewith, and generally to do all such things in my name and
behalf in connection therewith as said attorneys-in-fact deem necessary or
appropriate, to comply with the provisions of the Securities Act of 1933 and the
Investment Company Act of 1940, and all related requirements of the Securities
and Exchange Commission. I hereby ratify and confirm all that said
attorneys-in-fact or their substitutes may do or cause to be done by virtue
hereof. This power of attorney is effective for all documents filed on or after
March 1, 1997.
WITNESS my hand on the date set forth below.
/s/Robert M. Gates March 6, 1997
- --------------------------
Robert M. Gates
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
(1) (a) Amended and Restated Declaration of Trust, dated October
26, 1984, is incorporated herein by reference to Exhibit 1(a)
of Post-Effective Amendment No. 31.
(b) Supplement to the Declaration of Trust, dated February 10,
1987, is incorporated herein by reference to Exhibit 1(b) of
Post-Effective Amendment No. 31.
(c) Supplement to the Declaration of Trust, dated November 26,
1990, is incorporated herein by reference to Exhibit 1(c) of
Post-Effective Amendment No. 31.
(d) Supplement to the Declaration of Trust, dated December 20,
1991, is incorporated herein by reference to Exhibit 1(e) of
Post-Effective Amendment No. 31.
(e) Amendment to the Declaration of Trust, dated May 3, 1993, is
incorporated herein by reference to Exhibit 1(f) of
Post-Effective Amendment No. 31.
(f) Supplement to the Declaration of Trust, dated August 25, 1997,
is incorporated herein by reference to Exhibit 1(f) of
Post-Effective Amendment No. 41.
(2) By-Laws of the Trust are incorporated herein by reference to
Exhibit 2 of Post-Effective Amendment No. 41.
(3) Not applicable.
(4) Not applicable.
(5) (a) Management Contract between Fidelity Advisor Equity Growth
Fund and Fidelity Management & Research Company, dated
September 1, 1997, is incorporated herein by reference to
Exhibit 5(a) of Post-Effective Amendment No. 41.
(b) Management Contract between Fidelity Advisor Mid Cap Fund and
Fidelity Management & Research Company, dated January 18,
1996, is incorporated herein by reference to Exhibit 5(b) of
Post-Effective Amendment No. 32.
(c) Management Contract between Fidelity Advisor Large Cap Fund
and Fidelity Management & Research Company, dated January 18,
1996, is incorporated herein by reference to Exhibit 5(c) of
Post-Effective Amendment No. 32.
(d) Sub-Advisory Agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor Equity Growth Fund, and
Fidelity Management & Research (U.K.) Inc., dated September 1,
1997, is incorporated herein by reference to Exhibit 5(d) of
Post-Effective Amendment No. 41.
(e) Sub-Advisory Agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor Equity Growth Fund, and
Fidelity Management & Research (Far East) Inc., dated
September 1, 1997, is incorporated herein by reference to
Exhibit 5(e) of Post-Effective Amendment No. 41.
<PAGE>
Exhibit No. Description
----------- -----------
(f) Sub-Advisory Agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor Mid Cap Fund, and
Fidelity Management & Research (U.K.) Inc., dated January 18,
1996, is incorporated herein by reference to Exhibit 5(f) of
Post-Effective Amendment No. 32.
(g) Sub-Advisory Agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor Mid Cap Fund, and
Fidelity Management & Research (Far East) Inc., dated January
18, 1996, is incorporated herein by reference to Exhibit 5(g)
of Post-Effective Amendment No. 32.
(h) Sub-Advisory Agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor Large Cap Fund, and
Fidelity Management & Research (U.K.) Inc., dated January 18,
1996, is incorporated herein by reference to Exhibit 5(h) of
Post-Effective Amendment No. 32.
(i) Sub-Advisory Agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor Large Cap Fund, and
Fidelity Management & Research (Far East) Inc., dated January
18, 1996, is incorporated herein by reference to Exhibit 5(i)
of Post-Effective Amendment No. 32.
(j) Management Contract between Fidelity Advisor Growth & Income
Fund and Fidelity Management & Research Company, dated
December 1, 1996, is incorporated herein by reference to
Exhibit 5(j) of Post-Effective Amendment No. 38.
(k) Management Contract between Fidelity Advisor TechnoQuant
Growth Fund and Fidelity Management & Research Company, dated
December 1, 1996, is incorporated herein by reference to
Exhibit 5(k) of Post-Effective Amendment No. 38.
(l) Sub-Advisory Agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor Growth & Income Fund,
and Fidelity Management & Research (U.K.) Inc., dated December
1, 1996, is incorporated herein by reference to Exhibit 5(l)
of Post-Effective Amendment No. 38.
(m) Sub-Advisory Agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor Growth & Income Fund,
and Fidelity Management & Research (Far East) Inc., dated
December 1, 1996, is incorporated herein by reference to
Exhibit 5(m) of Post-Effective Amendment No. 38.
(n) Sub-Advisory Agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor TechnoQuant Growth
Fund, and Fidelity Management & Research (U.K.) Inc., dated
December 1, 1996, is incorporated herein by reference to
Exhibit 5(n) of Post-Effective Amendment No. 38.
(o) Sub-Advisory Agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor TechnoQuant Growth
Fund, and Fidelity Management & Research (Far East) Inc.,
dated December 1, 1996, is incorporated herein by reference to
Exhibit 5(o) of Post-Effective Amendment No. 38.
(p) Management Contract between Fidelity Advisor Growth
Opportunities Fund and Fidelity Management & Research Company,
dated February 28, 1998, is incorporated herein by reference
to Exhibit 5(p) of Post-Effective Amendment No. 43.
(q) Management Contract between Fidelity Advisor Strategic
Opportunities Fund and Fidelity Management & Research Company,
dated February 28, 1998, is incorporated herein by reference
to Exhibit 5(q) of Post-Effective Amendment No. 43.
(r) Sub-Advisory Agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor Growth Opportunities
<PAGE>
Exhibit No. Description
----------- -----------
Fund, and Fidelity Management & Research (U.K.) Inc., dated
February 28, 1998, is incorporated herein by reference to
Exhibit 5(r) of Post-Effective Amendment No. 43.
(s) Sub-Advisory Agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor Strategic Opportunities
Fund, and Fidelity Management & Research (U.K.) Inc., dated
February 28, 1998, is incorporated herein by reference to
Exhibit 5(s) of Post-Effective Amendment No. 43.
(t) Sub-Advisory Agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor Growth Opportunities
Fund, and Fidelity Management & Research (Far East) Inc.,
dated February 28, 1998, is incorporated herein by reference
to Exhibit 5(t) of Post-Effective Amendment No. 43.
(u) Sub-Advisory Agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor Strategic Opportunities
Fund, and Fidelity Management & Research (Far East) Inc.,
dated February 28, 1998, is incorporated herein by reference
to Exhibit 5(u) of Post-Effective Amendment No. 43.
(v) Management Contract between Fidelity Advisor Small Cap Fund
and Fidelity Management & Research Company, dated July 16,
1998, is incorporated herein by reference to Exhibit 5(v) of
Post-Effective Amendment No. 45.
(w) Sub-Advisory Agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor Small Cap Fund, and
Fidelity Management & Research (U.K.) Inc., dated July 16,
1998, is incorporated herein by reference to Exhibit 5(w) of
Post-Effective Amendment No. 45.
(x) Sub-Advisory Agreement between Fidelity Management & Research
Company, on behalf of Fidelity Advisor Small Cap Fund, and
Fidelity Management & Research (Far East) Inc., dated July 16,
1998, is incorporated herein by reference to Exhibit 5(x) of
Post-Effective Amendment No. 45.
(y) Form of Management Contract between Fidelity Advisor Dividend
Growth Fund and Fidelity Management & Research Company is
filed herein as Exhibit 5(y).
(z) Form of Sub-Advisory Agreement between Fidelity Management &
Research Company, on behalf of Fidelity Advisor Dividend
Growth Fund, and Fidelity Management & Research (U.K.) Inc.
is filed herein as Exhibit 5(z).
(aa) Form of Sub-Advisory Agreement between Fidelity Management &
Research Company, on behalf of Fidelity Advisor Dividend
Growth Fund, and Fidelity Management & Research (Far East)
Inc. is filed herein as Exhibit 5(aa).
(bb) Form of Management Contract between Fidelity Advisor
Retirement Growth Fund and Fidelity Management & Research
Company is filed herein as Exhibit 5(bb).
(cc) Form of Sub-Advisory Agreement between Fidelity Management
& Research Company, on behalf of Fidelity Advisor
Retirement Growth Fund, and Fidelity Management & Research
(U.K.) Inc. is filed herein as Exhibit 5(cc).
(dd) Form of Sub-Advisory Agreement between Fidelity Management &
Research Company, on behalf of Fidelity Advisor Retirement
Growth Fund, and Fidelity Management & Research (Far East)
Inc. is filed herein as Exhibit 5(dd).
(ee) Form of Management Contract between Fidelity Advisor Asset
Allocation Fund and Fidelity Management & Research Company
is filed herein as Exhibit 5(ee).
<PAGE>
Exhibit No. Description
----------- -----------
(ff) Form of Sub-Advisory Agreement between Fidelity Management
& Research Company, on behalf of Fidelity Advisor Asset
Allocation Fund, and Fidelity Management & Research (U.K.)
Inc. is filed herein as Exhibit 5(ff).
(gg) Form of Sub-Advisory Agreement between Fidelity Management &
Research Company, on behalf of Fidelity Advisor Asset
Allocation Fund, and Fidelity Management & Research (Far East)
Inc. is filed herein as Exhibit 5(gg).
(6) (a) General Distribution Agreement between Fidelity Advisor Equity
Portfolio Growth (currently known as Fidelity Advisor Equity
Growth Fund) and Fidelity Distributors Corporation, dated
April 1, 1987, is incorporated herein by reference to Exhibit
6(a) of Post-Effective Amendment No. 29.
(b) Amendment to the General Distribution Agreement for Fidelity
Equity Portfolio Growth (currently known as Fidelity Advisor
Equity Growth Fund), dated January 1, 1988, is incorporated
herein by reference to Exhibit 6(b) of Post-Effective
Amendment No. 29.
(c) General Distribution Agreement between Fidelity Advisor Mid
Cap Fund and Fidelity Distributors Corporation, dated January
18, 1996, is incorporated herein by reference to Exhibit 6(c)
of Post-Effective Amendment No. 32.
(d) General Distribution Agreement between Fidelity Advisor Large
Cap Fund and Fidelity Distributors Corporation, dated January
18, 1996, is incorporated herein by reference to Exhibit 6(d)
of Post-Effective Amendment No. 32.
(e) Amendments to the General Distribution Agreement between
Fidelity Advisor Series I on behalf of Fidelity Advisor Equity
Growth Fund, Fidelity Advisor Mid Cap Fund, and Fidelity
Advisor Large Cap Fund and Fidelity Distributors Corporation,
dated March 14, 1996 and July 15, 1996, are incorporated
herein by reference to Exhibit 6(a) of Fidelity Court Street
Trust's Post-Effective Amendment No. 61 (File No. 2-58774).
(f) General Distribution Agreement between Fidelity Advisor Growth
& Income Fund and Fidelity Distributors Corporation, dated
December 1, 1996, is incorporated herein by reference to
Exhibit 6(h) of Post-Effective Amendment No. 38.
(g) General Distribution Agreement between Fidelity Advisor
TechnoQuant Growth Fund and Fidelity Distributors Corporation,
dated December 1, 1996, is incorporated herein by reference to
Exhibit 6(i) of Post-Effective Amendment No. 38.
(h) General Distribution Agreement between Fidelity Advisor Growth
Opportunities Fund and Fidelity Distributors Corporation,
dated February 28, 1998, is incorporated herein by reference
to Exhibit 6(h) of Post-Effective Amendment No. 43.
(i) General Distribution Agreement between Fidelity Advisor
Strategic Opportunities Fund and Fidelity Distributors
Corporation, dated February 28, 1998, is incorporated herein
by reference to Exhibit 6(i) of Post-Effective Amendment No.
43.
(j) General Distribution Agreement between Fidelity Advisor Small
Cap Fund and Fidelity Distributors Corporation, dated July 16,
1998, is incorporated herein by reference to Exhibit 6(j) of
Post-Effective Amendment No. 45.
(k) Form of General Distribution Agreement between Fidelity
Advisor Dividend Growth Fund and Fidelity Distributors
Corporation is filed herein as Exhibit 6(k).
(l) Form of General Distribution Agreement between Fidelity
Advisor Retirement Growth Fund and Fidelity Distributors
Corporation is filed herein as Exhibit 6(l).
<PAGE>
Exhibit No. Description
----------- -----------
(m) Form of General Distribution Agreement between Fidelity
Advisor Asset Allocation Fund and Fidelity Distributors
Corporation is filed herein as Exhibit 6(m).
(n) Form of Bank Agency Agreement (most recently revised January,
1997) is incorporated herein by reference to Exhibit 6(j) of
Post-Effective Amendment No. 43.
(o) Form of Selling Dealer Agreement (most recently revised
January, 1997) is incorporated herein by reference to Exhibit
6(k) of Post-Effective Amendment No. 43.
(p) Form of Selling Dealer Agreement for Bank-Related Transactions
(most recently revised January, 1997) is incorporated herein
by reference to Exhibit 6(l) of Post-Effective Amendment No.
43.
(7) (a) Retirement Plan for Non-Interested Person Trustees, Directors
or General Partners, as amended on November 16, 1995, is
incorporated herein by reference to Exhibit 7(a) of Fidelity
Select Portfolio's (File No. 2-69972) Post-Effective Amendment
No. 54.
(b) The Fee Deferral plan for Non-Interested Person Directors and
Trustees of the Fidelity Funds, effective as of September 14,
1995 and amended through November 14, 1996, is incorporated
herein by reference to Exhibit 7(b) of Fidelity Aberdeen
Street Trust's (File No. 33-43529) Post-Effective Amendment
No. 19.
(8) (a) Custodian Agreement and Appendix C, dated August 1, 1994,
between The Chase Manhattan Bank, N.A. and Fidelity Advisor
Series I on behalf of Fidelity Advisor Equity Growth Fund is
incorporated herein by reference to Exhibit 8(a) of Fidelity
Investment Trust's Post-Effective Amendment No. 59 (File No.
2-90649).
(b) Appendix A, dated October 17, 1996, to the Custodian
Agreement, dated August 1, 1994, between The Chase Manhattan
Bank, N.A. and Fidelity Advisor Series I on behalf of Fidelity
Advisor Equity Growth Fund is incorporated herein by reference
to Exhibit 8(c) of Fidelity Charles Street Trust's
Post-Effective Amendment No. 57 (File No. 2-73133).
(c) Appendix B, dated September 18, 1997, to the Custodian
Agreement, dated August 1, 1994, between The Chase Manhattan
Bank, N.A. and Fidelity Advisor Series I on behalf of Fidelity
Advisor Equity Growth Fund is incorporated herein by reference
to Exhibit 8(b) of Fidelity Charles Street Trust's
Post-Effective Amendment No. 62 (File No. 2-73133).
(d) Custodian Agreement and Appendix C, dated September 1, 1994,
between Brown Brothers Harriman & Company and Fidelity Advisor
Series I on behalf of Fidelity Advisor Mid Cap Fund and
Fidelity Advisor Large Cap Fund is incorporated herein by
reference to Exhibit 8(a) of Fidelity Commonwealth Trust's
Post-Effective Amendment No. 56 (File No. 2-52322).
(e) Appendix A, dated October 16, 1997, to the Custodian
Agreement, dated September 1, 1994, between Brown Brothers
Harriman & Company and Fidelity Advisor Series I on behalf of
Fidelity Advisor Mid Cap Fund and Fidelity Advisor Large Cap
Fund is incorporated herein by reference to Exhibit 8(b) of
Fidelity Contrafund's Post-Effective Amendment No. 50 (File
No. 2-25235).
(f) Appendix B, dated September 18, 1997, to the Custodian
Agreement, dated September 1, 1994, between Brown Brothers
Harriman & Company and Fidelity Advisor Series I on behalf of
Fidelity Advisor Mid Cap Fund and Fidelity Advisor Large Cap
Fund is incorporated herein by reference to Exhibit 8(c) of
Fidelity Contrafund's Post-Effective Amendment No. 50 (File
No. 2-25235).
(g) Fidelity Group Repo Custodian Agreement among The Bank of
New York, J. P. Morgan Securities, Inc., and Fidelity Advisor
Series I on behalf of Fidelity Equity Portfolio Growth
(currently known as Fidelity Advisor Equity Growth Fund),
Fidelity Advisor Mid Cap Fund, and Fidelity Advisor Large Cap
Fund, dated February 12, 1996, is incorporated herein by
reference to Exhibit 8(d) of Fidelity Institutional Cash
Portfolio's (File No. 2-74808) Post-Effective Amendment No.
31.
<PAGE>
Exhibit No. Description
----------- -----------
(h) Schedule 1 to the Fidelity Group Repo Custodian Agreement
between The Bank of New York and Fidelity Advisor Series I on
behalf of Fidelity Equity Portfolio Growth (currently known as
Fidelity Advisor Equity Growth Fund), Fidelity Advisor Mid Cap
Fund, and Fidelity Advisor Large Cap Fund, dated February 12,
1996, is incorporated herein by reference to Exhibit 8(e) of
Fidelity Institutional Cash Portfolios' (File No. 2-74808)
Post-Effective Amendment No. 31.
(i) Fidelity Group Repo Custodian Agreement among Chemical
Bank, Greenwich Capital Markets, Inc., and Fidelity Advisor
Series I on behalf of Fidelity Equity Portfolio Growth
(currently known as Fidelity Advisor Equity Growth Fund),
Fidelity Advisor Mid Cap Fund, and Fidelity Advisor Large Cap
Fund, dated November 13, 1995, is incorporated herein by
reference to Exhibit 8(f) of Fidelity Institutional Cash
Portfolios' (File No. 2-74808) Post-Effective Amendment No.
31.
(j) Schedule 1 to the Fidelity Group Repo Custodian Agreement
between Chemical Bank and Fidelity Advisor Series I on behalf
of Fidelity Equity Portfolio Growth (currently known as
Fidelity Advisor Equity Growth Fund), Fidelity Advisor Mid Cap
Fund, and Fidelity Advisor Large Cap Fund, dated November 13,
1995, is incorporated herein by reference to Exhibit 8(g) of
Fidelity Institutional Cash Portfolios'(File No. 2-74808)
Post-Effective Amendment No. 31.
(k) Joint Trading Account Custody Agreement between The Bank of
New York and Fidelity Advisor Series I on behalf of Fidelity
Advisor Equity Growth Fund, dated May 11, 1995, is
incorporated herein by reference to Exhibit 8(h) of Fidelity
Institutional Cash Portfolios' (File No. 2-74808)
Post-Effective Amendment No. 31.
(l) First Amendment to Joint Trading Account Custody Agreement
between The Bank of New York and Fidelity Advisor Series I on
behalf of Fidelity Advisor Equity Growth Fund, dated July 14,
1995, is incorporated herein by reference to Exhibit 8(i) of
Fidelity Institutional Cash Portfolios' (File No. 2-74808)
Post-Effective Amendment No. 31.
(m) Forms of Custodian Agreement, Appendix B, and Appendix C
between The Chase Manhattan Bank, N.A. and Fidelity Advisor
Series I on behalf of Fidelity Advisor TechnoQuant Growth Fund
and Fidelity Advisor Growth & Income Fund are incorporated
herein by reference to Exhibit 8(m) of Post-Effective
Amendment No. 43.
(n) Forms of Custodian Agreement, Appendix B, and Appendix C
between Brown Brothers Harriman & Company and Fidelity Advisor
Series I on behalf of Fidelity Advisor Strategic Opportunities
Fund and Fidelity Advisor Growth Opportunities Fund are
incorporated herein by reference to Exhibit 8(n) of
Post-Effective Amendment No. 43.
(o) Forms of Fidelity Group Repo Custodian Agreement and
Schedule 1 among The Bank of New York, J.P. Morgan Securities,
Inc., and Fidelity Advisor Series I on behalf of Fidelity
Advisor TechnoQuant Growth Fund, Fidelity Advisor Growth &
Income Fund, Fidelity Advisor Strategic Opportunities Fund,
and Fidelity Advisor Growth Opportunities Fund are
incorporated herein by reference to Exhibit 8(o) of
Post-Effective Amendment No. 43.
(p) Forms of Fidelity Group Repo Custodian Agreement and
Schedule 1 among Chemical Bank, Greenwich Capital Markets,
Inc., and Fidelity Advisor Series I on behalf of Fidelity
Advisor TechnoQuant Growth Fund, Fidelity Advisor Growth &
Income Fund, Fidelity Advisor Strategic Opportunities Fund,
and Fidelity Advisor Growth Opportunities Fund are
incorporated herein by reference to Exhibit 8(p) of
Post-Effective Amendment No. 43.
<PAGE>
Exhibit No. Description
----------- -----------
(q) Forms of Joint Trading Account Custody Agreement and First
Amendment to Joint Trading Account Custody Agreement between
The Bank of New York and Fidelity Advisor Series I on behalf
of Fidelity Advisor TechnoQuant Growth Fund, Fidelity Advisor
Growth & Income Fund, Fidelity Advisor Strategic Opportunities
Fund, and Fidelity Advisor Growth Opportunities Fund are
incorporated herein by reference to Exhibit 8(q) of
Post-Effective Amendment No. 43.
(r) Forms of Custodian Agreement, Appendix B, and Appendix C
between State Street Bank and Trust Company and Fidelity
Advisor Series I on behalf of Fidelity Advisor Small Cap Fund
are incorporated herein by reference to Exhibit 8(r) of
Post-Effective Amendment No. 45.
(9) Not applicable.
(10) Opinion and Consent of Counsel to be filed by subsequent
amendment.
(11) Not applicable.
(12) Not applicable.
(13) Not applicable.
(14) (a) Fidelity Individual Retirement Account Custodial Agreement
and Disclosure Statement, as currently in effect, is
incorporated herein by reference to Exhibit 14(a) of Fidelity
Union Street Trust's (File No. 2-50318) Post-Effective
Amendment No. 87.
(b) Fidelity Institutional Individual Retirement Account Custodial
Agreement and Disclosure Statement, as currently in effect, is
incorporated herein by reference to Exhibit 14(d) of Fidelity
Union Street Trust's (File No. 2-50318) Post-Effective
Amendment No. 87.
(c) National Financial Services Corporation Individual Retirement
Account Custodial Agreement and Disclosure Statement, as
currently in effect, is incorporated herein by reference to
Exhibit 14(h) of Fidelity Union Street Trust's (File No.
2-50318) Post-Effective Amendment No. 87.
(d) Fidelity Portfolio Advisory Services Individual Retirement
Account Custodial Agreement and Disclosure Statement, as
currently in effect, is incorporated herein by reference to
Exhibit 14(i) of Fidelity Union Street Trust's (File No.
2-50318) Post-Effective Amendment No. 87.
(e) Fidelity 403(b)(7) Custodial Account Agreement, as currently
in effect, is incorporated herein by reference to Exhibit
14(e) of Fidelity Union Street Trust's (File No. 2-50318)
Post-Effective Amendment No. 87.
(f) National Financial Services Corporation Defined Contribution
Retirement Plan and Trust Agreement, as currently in effect,
is incorporated herein by reference to Exhibit 14(k) of
Fidelity Union Street Trust's (File No. 2-50318)
Post-Effective Amendment No. 87.
(g) The CORPORATEplan for Retirement Profit Sharing/401K Plan, as
currently in effect, is incorporated herein by reference to
Exhibit 14(l) of Fidelity Union Street Trust's (File No.
2-50318) Post-Effective Amendment No. 87.
(h) The CORPORATEplan for Retirement Money Purchase Pension Plan,
as currently in effect, is incorporated herein by reference to
Exhibit 14(m) of Fidelity Union Street Trust's (File No.
2-50318) Post-Effective Amendment No. 87.
<PAGE>
Exhibit No. Description
----------- -----------
(i) Fidelity Investments Section 403(b)(7) Individual Custodial
Account Agreement and Disclosure Statement, as currently in
effect, is incorporated herein by reference to Exhibit 14(f)
of Fidelity Commonwealth Trust's (File No. 2-52322)
Post-Effective Amendment No. 57.
(j) Plymouth Investments Defined Contribution Retirement Plan and
Trust Agreement, as currently in effect, is incorporated
herein by reference to Exhibit 14(o) of Fidelity Commonwealth
Trust's (File No. 2-52322) Post-Effective Amendment No. 57.
(k) The Fidelity Prototype Defined Benefit Pension Plan and Trust
Basic Plan Document and Adoption Agreement, as currently in
effect, is incorporated herein by reference to Exhibit 14(d)
of Fidelity Securities Fund's (File No. 2-93601)
Post-Effective Amendment No. 33.
(l) The Institutional Prototype Plan Basic Plan Document,
Standardized Adoption Agreement, and Non-Standardized Adoption
Agreement, as currently in effect, is incorporated herein by
reference to Exhibit 14(o) of Fidelity Securities Fund's (File
No. 2-93601) Post-Effective Amendment No. 33.
(m) The CORPORATE plan for Retirement 100(SERVICEMARK) Profit
Sharing/401(k) Basic Plan Document, Standardized Adoption
Agreement, and Non-Standardized Adoption Agreement, as
currently in effect, is incorporated herein by reference to
Exhibit 14(f) of Fidelity Securities Fund's (File No. 2-93601)
Post-Effective Amendment No. 33.
(n) The Fidelity Investments 401(a) Prototype Plan for Tax-Exempt
Employers Basic Plan Document, Standardized Profit Sharing
Plan Adoption Agreement, Non-Standardized Discretionary
Contribution Plan No. 002 Adoption Agreement, and
Non-Standardized Discretionary Contribution Plan No. 003
Adoption Agreement, as currently in effect, is incorporated
herein by reference to Exhibit 14(g) of Fidelity Securities
Fund's (File No. 2-93601) Post-Effective Amendment No. 33.
(o) Fidelity Investments 403(b) Sample Plan Basic Plan Document
and Adoption Agreement, as currently in effect, is
incorporated herein by reference to Exhibit 14(p) of Fidelity
Securities Fund's (File No. 2-93601) Post-Effective Amendment
No. 33.
(p) Fidelity Defined Contribution Retirement Plan and Trust
Agreement, as currently in effect, is incorporated herein by
reference to Exhibit 14(c) of Fidelity Securities Fund's (File
No. 2-93601) Post-Effective Amendment No. 33.
(q) Fidelity SIMPLE-IRA Plan Adoption Agreement, Company Profile
Form, and Plan Document, as currently in effect, is
incorporated herein by reference to Exhibit 14(q) of Fidelity
Aberdeen Street Trust's (File No. 33-43529) Post-Effective
Amendment No. 19.
(15) (a) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Equity Growth Fund: Class T is incorporated
herein by reference to Exhibit 15(a) of Post-Effective
Amendment No. 41.
(b) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Equity Growth Fund (formerly known as
Fidelity Advisor Equity Portfolio Growth): Institutional Class
is incorporated herein by reference to Exhibit 15(b) of
Post-Effective Amendment No. 38.
(c) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Mid Cap Fund: Class T (formerly known as
Class A) is incorporated herein by reference to Exhibit 15(c)
of Post-Effective Amendment No. 38.
(d) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Mid Cap Fund: Class B is incorporated herein
by reference to Exhibit 15(d) of Post-Effective Amendment No.
38.
<PAGE>
Exhibit No. Description
----------- -----------
(e) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Mid Cap Fund: Institutional Class is
incorporated herein by reference to Exhibit 15(e) of
Post-Effective Amendment No. 38.
(f) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Large Cap Fund: Class T (formerly known as
Class A) is incorporated herein by reference to Exhibit 15(f)
of Post-Effective Amendment No. 38.
(g) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Large Cap Fund: Class B is incorporated
herein by reference to Exhibit 15(g) of Post-Effective
Amendment No. 38.
(h) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Large Cap Fund: Institutional Class is
incorporated herein by reference to Exhibit 15(h) of
Post-Effective Amendment No. 38.
(i) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Equity Growth Fund: Class A is incorporated
herein by reference to Exhibit 15(i) of Post-Effective
Amendment No. 34.
(j) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Mid Cap Fund: Class A is incorporated herein
by reference to Exhibit 15(j) of Post-Effective Amendment No.
34.
(k) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Large Cap Fund: Class A is incorporated
herein by reference to Exhibit 15(k) of Post-Effective
Amendment No. 34.
(l) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Equity Growth Fund: Class B is incorporated
herein by reference to Exhibit 15(l) of Post-Effective
Amendment No. 36.
(m) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Growth & Income Fund: Class A is incorporated
herein by reference to Exhibit 15(m) of Post-Effective
Amendment No. 36.
(n) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Growth & Income Fund: Class T is incorporated
herein by reference to Exhibit 15(n) of Post-Effective
Amendment No. 36.
(o) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Growth & Income Fund: Class B is incorporated
herein by reference to Exhibit 15(o) of Post-Effective
Amendment No. 36.
(p) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Growth & Income Fund: Institutional Class is
incorporated herein by reference to Exhibit 15(p) of
Post-Effective Amendment No. 38.
(q) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor TechnoQuant Growth Fund: Class A is
incorporated herein by reference to Exhibit 15(q) of
Post-Effective Amendment No. 36.
(r) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor TechnoQuant Growth Fund: Class T is
incorporated herein by reference to Exhibit 15(r) of
Post-Effective Amendment No. 36.
<PAGE>
Exhibit No. Description
----------- -----------
(s) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor TechnoQuant Growth Fund: Class B is
incorporated herein by reference to Exhibit 15(s) of
Post-Effective Amendment No. 36.
(t) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor TechnoQuant Growth Fund: Institutional Class
is incorporated herein by reference to Exhibit 15(t) of
Post-Effective Amendment No. 38.
(u) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Equity Growth Fund: Class C is incorporated
herein by reference to Exhibit 15(u) of Post-Effective
Amendment No. 41.
(v) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Mid Cap Fund: Class C is incorporated herein
by reference to Exhibit 15(v) of Post-Effective Amendment No.
41.
(w) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Large Cap Fund: Class C is incorporated
herein by reference to Exhibit 15(w) of Post-Effective
Amendment No. 41.
(x) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor TechnoQuant Growth Fund: Class C is
incorporated herein by reference to Exhibit 15(x) of
Post-Effective Amendment No. 41.
(y) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Growth & Income Fund: Class C is incorporated
herein by reference to Exhibit 15(y) of Post-Effective
Amendment No. 41.
(z) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Growth Opportunities Fund: Class A is
incorporated herein by reference to Exhibit 15(z) of
Post-Effective Amendment No. 43.
(aa) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Growth Opportunities Fund: Class T is
incorporated herein by reference to Exhibit 15(aa) of
Post-Effective Amendment No. 43.
(bb) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Growth Opportunities Fund: Class B is
incorporated herein by reference to Exhibit 15(bb) of
Post-Effective Amendment No. 43.
(cc) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Growth Opportunities Fund: Class C is
incorporated herein by reference to Exhibit 15(cc) of
Post-Effective Amendment No. 43.
(dd) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Growth Opportunities Fund: Institutional
Class is incorporated herein by reference to Exhibit 15(dd) of
Post-Effective Amendment No. 43.
(ee) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Strategic Opportunities Fund: Class A is
incorporated herein by reference to Exhibit 15(ee) of
Post-Effective Amendment No. 43.
(ff) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Strategic Opportunities Fund: Class T is
incorporated herein by reference to Exhibit 15(ff) of
Post-Effective Amendment No. 43.
<PAGE>
Exhibit No. Description
----------- -----------
(gg) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Strategic Opportunities Fund: Class B is
incorporated herein by reference to Exhibit 15(gg) of
Post-Effective Amendment No. 43.
(hh) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Strategic Opportunities Fund: Institutional
Class is incorporated herein by reference to Exhibit 15(hh) of
Post-Effective Amendment No. 43.
(ii) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Small Cap Fund: Class A is incorporated
herein by reference to Exhibit 15(ii) of Post-Effective
Amendment No. 45.
(jj) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Small Cap Fund: Class T is incorporated
herein by reference to Exhibit 15(jj) of Post-Effective
Amendment No. 45.
(kk) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Small Cap Fund: Class B is incorporated
herein by reference to Exhibit 15(kk) of Post-Effective
Amendment No. 45.
(ll) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Small Cap Fund: Class C is incorporated
herein by reference to Exhibit 15(ll) of Post-Effective
Amendment No. 45.
(mm) Distribution and Service Plan pursuant to Rule 12b-1 for
Fidelity Advisor Small Cap Fund: Institutional Class is
incorporated herein by reference to Exhibit 15(mm) of
Post-Effective Amendment No. 45.
(nn) Form of Distribution and Service Plan pursuant to Rule
12b-1 for Fidelity Advisor Dividend Growth Fund: Class A is
filed herein as Exhibit 15(nn).
(oo) Form of Distribution and Service Plan pursuant to Rule
12b-1 for Fidelity Advisor Dividend Growth Fund: Class T is
filed herein as Exhibit 15(oo).
(pp) Form of Distribution and Service Plan pursuant to Rule
12b-1 for Fidelity Advisor Dividend Growth Fund: Class B is
filed herein as Exhibit 15(pp).
(qq) Form of Distribution and Service Plan pursuant to Rule
12b-1 for Fidelity Advisor Dividend Growth Fund: Class C is
filed herein as Exhibit 15(qq).
(rr) Form of Distribution and Service Plan pursuant to Rule
12b-1 for Fidelity Advisor Dividend Growth Fund: Institutional
Class is filed herein as Exhibit 15(rr).
(ss) Form of Distribution and Service Plan pursuant to Rule
12b-1 for Fidelity Advisor Retirement Growth Fund: Class A is
filed herein as Exhibit 15(ss).
(tt) Form of Distribution and Service Plan pursuant to Rule
12b-1 for Fidelity Advisor Retirement Growth Fund: Class T is
filed herein as Exhibit 15(tt).
(uu) Form of Distribution and Service Plan pursuant to Rule
12b-1 for Fidelity Advisor Retirement Growth Fund: Class B is
filed herein as Exhibit 15(uu).
(vv) Form of Distribution and Service Plan pursuant to Rule
12b-1 for Fidelity Advisor Retirement Growth Fund: Class C is
filed herein as Exhibit 15(vv).
(ww) Form of Distribution and Service Plan pursuant to Rule
12b-1 for Fidelity Advisor Retirement Growth Fund:
Institutional Class is filed herein as Exhibit 15(ww).
<PAGE>
Exhibit No. Description
----------- -----------
(xx) Form of Distribution and Service Plan pursuant to Rule 12b-1
for Fidelity Advisor Asset Allocation Fund: Class A is filed
herein as Exhibit 15(xx).
(yy) Form of Distribution and Service Plan pursuant to Rule
12b-1 for Fidelity Advisor Asset Allocation Fund: Class T is
filed herein as Exhibit 15(yy).
(zz) Form of Distribution and Service Plan pursuant to Rule
12b-1 for Fidelity Advisor Asset Allocation Fund: Class
B is filed herein as Exhibit 15(zz).
(aaa) Form of Distribution and Service Plan pursuant to Rule
12b-1 for Fidelity Advisor Asset Allocation Fund: Class C is
filed herein as Exhibit 15(aaa).
(bbb) Form of Distribution and Service Plan pursuant to Rule
12b-1 for Fidelity Advisor Asset Allocation Fund:
Institutional Class is filed herein as Exhibit 15(bbb).
(16) (a) Schedule for computation of cumulative total returns and
average annual returns is incorporated herein by reference to
16(a) of Post-Effective Amendment No. 29.
(b) Schedule for computation of adjusted net asset value and
moving averages calculations incorporated herein by reference
to Exhibit 16(b) of Post-Effective Amendment No. 29.
(17) Not applicable.
(18) (a) Multiple Class of Shares Plan pursuant to Rule 18f-3,
dated March 19, 1998, is incorporated herein by reference to
Exhibit 18(a) of Post-Effective Amendment No. 45.
(b) Schedule I, dated July 16, 1998, to Multiple Class of
Shares Plan pursuant to Rule 18f-3 on behalf of Fidelity
Advisor Equity Growth Fund, Fidelity Advisor Mid Cap Fund,
Fidelity Advisor Large Cap Fund, Fidelity Advisor Growth &
Income Fund, Fidelity Advisor TechnoQuant Growth Fund,
Fidelity Advisor Strategic Opportunities Fund, Fidelity
Advisor Growth Opportunities Fund, and Fidelity Advisor Small
Cap Fund is filed herein as Exhibit 18(b).
(c) Form of Schedule I to Multiple Class of Shares Plan pursuant
to Rule 18f-3 on behalf of Fidelity Advisor Dividend Growth
Fund, Fidelity Advisor Retirement Growth Fund, and Fidelity
Advisor Asset Allocation Fund is filed herein as Exhibit
18(c).
Exhibit 5(y)
FORM OF
MANAGEMENT CONTRACT
between
FIDELITY ADVISOR SERIES I:
FIDELITY ADVISOR DIVIDEND GROWTH FUND
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
AGREEMENT made this __ day of _____ 1998, by and between Fidelity
Advisor Series I, a Massachusetts business trust which may issue one or more
series of shares of beneficial interest (hereinafter called the "Fund"), on
behalf of Fidelity Advisor Dividend Growth Fund (hereinafter called the
"Portfolio"), and Fidelity Management & Research Company, a Massachusetts
corporation (hereinafter called the "Adviser") as set forth in its entirety
below.
1. (a) Investment Advisory Services. The Adviser undertakes to act as
investment adviser of the Portfolio and shall, subject to the supervision of the
Fund's Board of Trustees, direct the investments of the Portfolio in accordance
with the investment objective, policies and limitations as provided in the
Portfolio's Prospectus or other governing instruments, as amended from time to
time, the Investment Company Act of 1940 and rules thereunder, as amended from
time to time (the "1940 Act"), and such other limitations as the Portfolio may
impose by notice in writing to the Adviser. The Adviser shall also furnish for
the use of the Portfolio office space and all necessary office facilities,
equipment and personnel for servicing the investments of the Portfolio; and
shall pay the salaries and fees of all officers of the Fund, of all Trustees of
the Fund who are "interested persons" of the Fund or of the Adviser and of all
personnel of the Fund or the Adviser performing services relating to research,
statistical and investment activities. The Adviser is authorized, in its
discretion and without prior consultation with the Portfolio, to buy, sell, lend
and otherwise trade in any stocks, bonds and other securities and investment
instruments on behalf of the Portfolio. The investment policies and all other
actions of the Portfolio are and shall at all times be subject to the control
and direction of the Fund's Board of Trustees.
(b) Management Services. The Adviser shall perform (or arrange for
the performance by its affiliates of) the management and administrative services
necessary for the operation of the Fund. The Adviser shall, subject to the
supervision of the Board of Trustees, perform various services for the
Portfolio, including but not limited to: (i) providing the Portfolio with office
space, equipment and facilities (which may be its own) for maintaining its
organization; (ii) on behalf of the Portfolio, supervising relations with, and
monitoring the performance of, custodians, depositories, transfer and pricing
agents, accountants, attorneys, underwriters, brokers and dealers, insurers and
other persons in any capacity deemed to be necessary or desirable; (iii)
preparing all general shareholder communications, including shareholder reports;
(iv) conducting shareholder relations; (v) maintaining the Fund's existence and
its records; (vi) during such times as shares are publicly offered, maintaining
the registration and qualification of the Portfolio's shares under federal and
state law; and (vii) investigating the development of and developing and
implementing, if appropriate, management and shareholder services designed to
enhance the value or convenience of the Portfolio as an investment vehicle.
The Adviser shall also furnish such reports, evaluations, information or
analyses to the Fund as the Fund's Board of Trustees may request from time to
time or as the Adviser may deem to be desirable. The Adviser shall make
recommendations to the Fund's Board of Trustees with respect to Fund policies,
and shall carry out such policies as are adopted by the Trustees. The Adviser
shall, subject to review by the Board of Trustees, furnish such other services
as the Adviser shall from time to time determine to be necessary or useful to
perform its obligations under this Contract.
(c) The Adviser shall place all orders for the purchase and sale
of portfolio securities for the Portfolio's account with brokers or dealers
selected by the Adviser, which may include brokers or dealers affiliated with
the Adviser. The Adviser shall use its best efforts to seek to execute portfolio
transactions at prices which are advantageous to the Portfolio and at commission
rates which are reasonable in relation to the benefits received. In selecting
brokers or dealers qualified to execute a particular transaction, brokers or
dealers may be selected who also provide brokerage and research services (as
those terms are defined in Section 28(e) of the Securities Exchange Act of 1934)
to the Portfolio and/or the other accounts over which the Adviser or its
affiliates exercise investment discretion. The Adviser is authorized to pay a
<PAGE>
broker or dealer who provides such brokerage and research services a commission
for executing a portfolio transaction for the Portfolio which is in excess of
the amount of commission another broker or dealer would have charged for
effecting that transaction if the Adviser determines in good faith that such
amount of commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer. This determination may be
viewed in terms of either that particular transaction or the overall
responsibilities which the Adviser and its affiliates have with respect to
accounts over which they exercise investment discretion. The Trustees of the
Fund shall periodically review the commissions paid by the Portfolio to
determine if the commissions paid over representative periods of time were
reasonable in relation to the benefits to the Portfolio.
The Adviser shall, in acting hereunder, be an independent contractor.
The Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of the
Fund are or may be or become interested in the Adviser as directors, officers or
otherwise and that directors, officers and stockholders of the Adviser are or
may be or become similarly interested in the Fund, and that the Adviser may be
or become interested in the Fund as a shareholder or otherwise.
3. The Adviser will be compensated on the following basis for the
services and facilities to be furnished hereunder. The Adviser shall receive a
monthly management fee, payable monthly as soon as practicable after the last
day of each month, composed of a Group Fee and an Individual Fund Fee.
(a) Group Fee Rate. The Group Fee Rate shall be based upon the monthly
average of the net assets of the registered investment companies having Advisory
and Service or Management Contracts with the Adviser (computed in the manner set
forth in the fund's Declaration of Trust or other organizational document)
determined as of the close of business on each business day throughout the
month. The Group Fee Rate shall be determined on a cumulative basis pursuant to
the following schedule:
AVERAGE NET ASSETS ANNUALIZED FEE RATE (FOR EACH LEVEL)
------------------ ------------------------------------
0 - $ 3 billion .5200%
3 - 6 .4900
6 - 9 .4600
9 - 12 .4300
12 - 15 .4000
15 - 18 .3850
18 - 21 .3700
21 - 24 .3600
24 - 30 .3500
30 - 36 .3450
36 - 42 .3400
42 - 48 .3350
48 - 66 .3250
66 - 84 .3200
84 - 102 .3150
2
<PAGE>
102 - 138 .3100
138 - 174 .3050
174 - 210 .3000
210 - 246 .2950
246 - 282 .2900
282 - 318 .2850
318 - 354 .2800
354 - 390 .2750
390 - 426 .2700
426 - 462 .2650
462 - 498 .2600
498 - 534 .2550
Over - 534 .2500
(b) Individual Fund Fee Rate. The Individual Fund Fee Rate shall be .30%.
The sum of the Group Fee Rate, calculated as described above to the
nearest millionth, and the Individual Fund Fee Rate shall constitute the Annual
Management Fee Rate. One-twelfth of the Annual Management Fee Rate shall be
applied to the average of the net assets of the Portfolio (computed in the
manner set forth in the Fund's Declaration of Trust or other organizational
document) determined as of the close of business on each business day throughout
the month.
(c) In case of termination of this Contract during any month, the fee for
that month shall be reduced proportionately on the basis of the number of
business days during which it is in effect, and the fee computed upon the
average net assets for the business days it is so in effect for that month.
4. It is understood that the Portfolio will pay all its expenses, which
expenses payable by the Portfolio shall include, without limitation, (i)
interest and taxes; (ii) brokerage commissions and other costs in connection
with the purchase or sale of securities and other investment instruments; (iii)
fees and expenses of the Fund's Trustees other than those who are "interested
persons" of the Fund or the Adviser; (iv) legal and audit expenses; (v)
custodian, registrar and transfer agent fees and expenses; (vi) fees and
expenses related to the registration and qualification of the Fund and the
Portfolio's shares for distribution under state and federal securities laws;
(vii) expenses of printing and mailing reports and notices and proxy material to
shareholders of the Portfolio; (viii) all other expenses incidental to holding
meetings of the Portfolio's shareholders, including proxy solicitations
therefor; (ix) a pro rata share, based on relative net assets of the Portfolio
and other registered investment companies having Advisory and Service or
Management Contracts with the Adviser, of 50% of insurance premiums for fidelity
and other coverage; (x) its proportionate share of association membership dues;
(xi) expenses of typesetting for printing Prospectuses and Statements of
Additional Information and supplements thereto; (xii) expenses of printing and
mailing Prospectuses and Statements of Additional Information and supplements
thereto sent to existing shareholders; and (xiii) such non-recurring or
extraordinary expenses as may arise, including those relating to actions, suits
or proceedings to which the Portfolio is a party and the legal obligation which
the Portfolio may have to indemnify the Fund's Trustees and officers with
respect thereto.
5. The services of the Adviser to the Portfolio are not to be deemed
exclusive, the Adviser being free to render services to others and engage in
other activities, provided, however, that such other services and activities do
not, during the term of this Contract, interfere, in a material manner, with the
Adviser's ability to meet all of its obligations with respect to rendering
services to the Portfolio hereunder. In the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of obligations or duties hereunder
on the part of the Adviser, the Adviser shall not be subject to liability to the
Portfolio or to any shareholder of the Portfolio for any act or omission in the
3
<PAGE>
course of, or connected with, rendering services hereunder or for any losses
that may be sustained in the purchase, holding or sale of any security or other
investment instrument.
6. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 6, this Contract shall continue in force until July 31, 1999 and
indefinitely thereafter, but only so long as the continuance after such date
shall be specifically approved at least annually by vote of the Trustees of the
Fund or by vote of a majority of the outstanding voting securities of the
Portfolio.
(b) This Contract may be modified by mutual consent subject to the
provisions of Section 15 of the 1940 Act, as modified by or interpreted by any
applicable order or orders of the Securities and Exchange Commission (the
"Commission") or any rules or regulations adopted by, or interpretative releases
of, the Commission.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of
this paragraph 6, the terms of any continuance or modification of this Contract
must have been approved by the vote of a majority of those Trustees of the Fund
who are not parties to the Contract or interested persons of any such party,
cast in person at a meeting called for the purpose of voting on such approval.
(d) Either party hereto may, at any time on sixty (60) days' prior
written notice to the other, terminate this Contract, without payment of any
penalty, by action of its Trustees or Board of Directors, as the case may be, or
with respect to the Portfolio by vote of a majority of the outstanding voting
securities of the Portfolio. This Contract shall terminate automatically in the
event of its assignment.
7. The Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Fund's Declaration of Trust or other
organizational document and agrees that the obligations assumed by the Fund
pursuant to this Contract shall be limited in all cases to the Portfolio and its
assets, and the Adviser shall not seek satisfaction of any such obligation from
the shareholders or any shareholder of the Portfolio or any other Portfolios of
the Fund. In addition, the Adviser shall not seek satisfaction of any such
obligations from the Trustees or any individual Trustee. The Adviser understands
that the rights and obligations of any Portfolio under the Declaration of Trust
or other organizational document are separate and distinct from those of any and
all other Portfolios.
8. This Agreement shall be governed by, and construed in accordance
with, the laws of the Commonwealth of Massachusetts, without giving effect to
the choice of laws provisions thereof.
The terms "vote of a majority of the outstanding voting securities,"
"assignment," and "interested persons," when used herein, shall have the
respective meanings specified in the 1940 Act, as now in effect or as hereafter
amended, and subject to such orders as may be granted by the Commission.
IN WITNESS WHEREOF the parties have caused this instrument to be signed
in their behalf by their respective officers thereunto duly authorized, and
their respective seals to be hereunto affixed, all as of the date written above.
FIDELITY ADVISOR SERIES I
on behalf of Fidelity Advisor Dividend Growth Fund
By _________________________________________
Senior Vice President
FIDELITY MANAGEMENT & RESEARCH COMPANY
By _________________________________________
President
Exhibit 5(z)
FORM OF
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY MANAGEMENT & RESEARCH COMPANY
AND
FIDELITY MANAGEMENT & RESEARCH (U.K.) INC.
AND
FIDELITY ADVISOR SERIES I ON BEHALF OF
FIDELITY ADVISOR DIVIDEND GROWTH FUND
AGREEMENT made this ___ day of _____, 1998, by and between Fidelity
Management & Research Company, a Massachusetts corporation with principal
offices at 82 Devonshire Street, Boston, Massachusetts (hereinafter called the
"Advisor"); Fidelity Management & Research (U.K.) Inc. (hereinafter called the
"Sub-Advisor"); and Fidelity Advisor Series I, a Massachusetts business trust
which may issue one or more series of shares of beneficial interest (hereinafter
called the "Trust") on behalf of Fidelity Advisor Dividend Growth Fund
(hereinafter called the "Portfolio").
WHEREAS the Trust and the Advisor have entered into a Management
Contract on behalf of the Portfolio, pursuant to which the Advisor is to act as
investment manager of the Portfolio; and
WHEREAS the Sub-Advisor and its subsidiaries and other affiliated
persons have personnel in various locations throughout the world and have been
formed in part for the purpose of researching and compiling information and
recommendations with respect to the economies of various countries, and
securities of issuers located in such countries, and providing investment
advisory services in connection therewith;
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the Trust, the Advisor and the Sub-Advisor agree as
follows:
1. DUTIES: The Advisor may, in its discretion, appoint the Sub-Advisor
to perform one or more of the following services with respect to all or a
portion of the investments of the Portfolio. The services and the portion of the
investments of the Portfolio to be advised or managed by the Sub-Advisor shall
be as agreed upon from time to time by the Advisor and the Sub-Advisor. The
Sub-Advisor shall pay the salaries and fees of all personnel of the Sub-Advisor
performing services for the Portfolio relating to research, statistical and
investment activities.
(a) INVESTMENT ADVICE: If and to the extent requested by the Advisor,
the Sub-Advisor shall provide investment advice to the Portfolio and the
Advisor with respect to all or a portion of the investments of the
Portfolio, and in connection with such advice shall furnish the
Portfolio and the Advisor such factual information, research reports and
investment recommendations as the Advisor may reasonably require. Such
information may include written and oral reports and analyses.
(b) INVESTMENT MANAGEMENT: If and to the extent requested by the
Advisor, the Sub-Advisor shall, subject to the supervision of the
Advisor, manage all or a portion of the investments of the Portfolio in
accordance with the investment objective, policies and limitations
provided in the Portfolio's Prospectus or other governing instruments,
as amended from time to time, the Investment Company Act of 1940 (the
"1940 Act") and rules thereunder, as amended from time to time, and such
other limitations as the Trust or Advisor may impose with respect to the
Portfolio by notice to the Sub-Advisor. With respect to the portion of
the investments of the Portfolio under its management, the Sub-Advisor
is authorized to make investment decisions on behalf of the Portfolio
with regard to any stock, bond, other security or investment instrument,
and to place orders for the purchase and sale of such securities through
such broker-dealers as the Sub-Advisor may select. The Sub-Advisor may
also be authorized, but only to the extent such duties are delegated in
writing by the Advisor, to provide additional investment management
services to the Portfolio, including but not limited to services such as
managing foreign currency investments, purchasing and selling or writing
futures and options contracts, borrowing money or lending securities on
behalf of the Portfolio. All investment management and any other
activities of the Sub-Advisor shall at all times be subject to the
control and direction of the Advisor and the Trust's Board of Trustees.
<PAGE>
(c) SUBSIDIARIES AND AFFILIATES: The Sub-Advisor may perform any or all
of the services contemplated by this Agreement directly or through such
of its subsidiaries or other affiliated persons as the Sub-Advisor shall
determine; provided, however, that performance of such services through
such subsidiaries or other affiliated persons shall have been approved
by the Trust to the extent required pursuant to the 1940 Act and rules
thereunder.
2. INFORMATION TO BE PROVIDED TO THE TRUST AND THE ADVISOR: The
Sub-Advisor shall furnish such reports, evaluations, information or analyses to
the Trust and the Advisor as the Trust's Board of Trustees or the Advisor may
reasonably request from time to time, or as the Sub-Advisor may deem to be
desirable.
3. BROKERAGE: In connection with the services provided under
subparagraph (b) of paragraph 1 of this Agreement, the Sub-Advisor shall place
all orders for the purchase and sale of portfolio securities for the Portfolio's
account with brokers or dealers selected by the Sub-Advisor, which may include
brokers or dealers affiliated with the Advisor or Sub-Advisor. The Sub-Advisor
shall use its best efforts to seek to execute portfolio transactions at prices
which are advantageous to the Portfolio and at commission rates which are
reasonable in relation to the benefits received. In selecting brokers or dealers
qualified to execute a particular transaction, brokers or dealers may be
selected who also provide brokerage and research services (as those terms are
defined in Section 28(e) of the Securities Exchange Act of l934) to the
Portfolio and/or to the other accounts over which the Sub-Advisor or Advisor
exercise investment discretion. The Sub-Advisor is authorized to pay a broker or
dealer who provides such brokerage and research services a commission for
executing a portfolio transaction for the Portfolio which is in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction if the Sub-Advisor determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer. This determination may be viewed in
terms of either that particular transaction or the overall responsibilities
which the Sub-Advisor has with respect to accounts over which it exercises
investment discretion. The Trustees of the Trust shall periodically review the
commissions paid by the Portfolio to determine if the commissions paid over
representative periods of time were reasonable in relation to the benefits to
the Portfolio.
4. COMPENSATION: The Advisor shall compensate the Sub-Advisor on the
following basis for the services to be furnished hereunder.
(a) INVESTMENT ADVISORY FEE: For services provided under subparagraph
(a) of paragraph 1 of this Agreement, the Advisor agrees to pay the
Sub-Advisor a monthly Sub-Advisory Fee. The Sub-Advisory Fee shall be
equal to 110% of the Sub-Advisor's costs incurred in connection with
rendering the services referred to in subparagraph (a) of paragraph 1 of
this Agreement. The Sub-Advisory Fee shall not be reduced to reflect
expense reimbursements or fee waivers by the Advisor, if any, in effect
from time to time.
(b) INVESTMENT MANAGEMENT FEE: For services provided under subparagraph
(b) of paragraph 1 of this Agreement, the Advisor agrees to pay the
Sub-Advisor a monthly Investment Management Fee. The Investment
Management Fee shall be equal to: (i) 50% of the monthly management fee
rate (including performance adjustments, if any) that the Portfolio is
obligated to pay the Advisor under its Management Contract with the
Advisor, multiplied by: (ii) the fraction equal to the net assets of the
Portfolio as to which the Sub-Advisor shall have provided investment
management services divided by the net assets of the Portfolio for that
month. If in any fiscal year the aggregate expenses of the Portfolio
exceed any applicable expense limitation imposed by any state or federal
securities laws or regulations, and the Advisor waives all or a portion
of its management fee or reimburses the Portfolio for expenses to the
extent required to satisfy such limitation, the Investment Management
Fee paid to the Sub-Advisor will be reduced by 50% of the amount of such
waivers or reimbursements multiplied by the fraction determined in (ii).
If the Sub-Advisor reduces its fees to reflect such waivers or
reimbursements and the Advisor subsequently recovers all or any portion
of such waivers or reimbursements, then the Sub-Advisor shall be
entitled to receive from the Advisor a proportionate share of the amount
recovered. To the extent that waivers and reimbursements by the Advisor
required by such limitations are in excess of the Advisor's management
fee, the Investment Management Fee paid to the Sub-Advisor will be
reduced to zero for that month, but in no event shall the Sub-Advisor be
required to reimburse the Advisor for all or a portion of such excess
reimbursements.
2
<PAGE>
(c) PROVISION OF MULTIPLE SERVICES: If the Sub-Advisor shall have
provided both investment advisory services under subparagraph (a) and
investment management services under subparagraph (b) of paragraph (1)
for the same portion of the investments of the Portfolio for the same
period, the fees paid to the Sub-Advisor with respect to such
investments shall be calculated exclusively under subparagraph (b) of
this paragraph 4.
5. EXPENSES: It is understood that the Portfolio will pay all of its
expenses other than those expressly stated to be payable by the Sub-Advisor
hereunder or by the Advisor under the Management Contract with the Portfolio,
which expenses payable by the Portfolio shall include, without limitation, (i)
interest and taxes; (ii) brokerage commissions and other costs in connection
with the purchase or sale of securities and other investment instruments; (iii)
fees and expenses of the Trust's Trustees other than those who are "interested
persons" of the Trust, the Sub-Advisor or the Advisor; (iv) legal and audit
expenses; (v) custodian, registrar and transfer agent fees and expenses; (vi)
fees and expenses related to the registration and qualification of the Trust and
the Portfolio's shares for distribution under state and federal securities laws;
(vii) expenses of printing and mailing reports and notices and proxy material to
shareholders of the Portfolio; (viii) all other expenses incidental to holding
meetings of the Portfolio's shareholders, including proxy solicitations
therefore; (ix) a pro rata share, based on relative net assets of the Portfolio
and other registered investment companies having Advisory and Service or
Management Contracts with the Advisor, of 50% of insurance premiums for fidelity
and other coverage; (x) its proportionate share of association membership dues;
(xi) expenses of typesetting for printing Prospectuses and Statements of
Additional Information and supplements thereto; (xii) expenses of printing and
mailing Prospectuses and Statements of Additional Information and supplements
thereto sent to existing shareholders; and (xiii) such non-recurring or
extraordinary expenses as may arise, including those relating to actions, suits
or proceedings to which the Portfolio is a party and the legal obligation which
the Portfolio may have to indemnify the Trust's Trustees and officers with
respect thereto.
6. INTERESTED PERSONS: It is understood that Trustees, officers, and
shareholders of the Trust are or may be or become interested in the Advisor or
the Sub-Advisor as directors, officers or otherwise and that directors, officers
and stockholders of the Advisor or the Sub-Advisor are or may be or become
similarly interested in the Trust, and that the Advisor or the Sub-Advisor may
be or become interested in the Trust as a shareholder or otherwise.
7. SERVICES TO OTHER COMPANIES OR ACCOUNTS: The services of the
Sub-Advisor to the Advisor are not to be deemed to be exclusive, the Sub-Advisor
being free to render services to others and engage in other activities,
provided, however, that such other services and activities do not, during the
term of this Agreement, interfere, in a material manner, with the Sub-Advisor's
ability to meet all of its obligations hereunder. The Sub-Advisor shall for all
purposes be an independent contractor and not an agent or employee of the
Advisor or the Trust.
8. STANDARD OF CARE: In the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of obligations or duties hereunder on the
part of the Sub-Advisor, the Sub-Advisor shall not be subject to liability to
the Advisor, the Trust or to any shareholder of the Portfolio for any act or
omission in the course of, or connected with, rendering services hereunder or
for any losses that may be sustained in the purchase, holding or sale of any
security.
9. DURATION AND TERMINATION OF AGREEMENT; AMENDMENTS:
(a) Subject to prior termination as provided in subparagraph (d) of
this paragraph 9, this Agreement shall continue in force until
July 31, 1999 and indefinitely thereafter, but only so long as
the continuance after such period shall be specifically approved
at least annually by vote of the Trust's Board of Trustees or by
vote of a majority of the outstanding voting securities of the
Portfolio.
(b) This Agreement may be modified by mutual consent of the Advisor,
the Sub-Advisor and the Portfolio subject to the provisions of
Section 15 of the 1940 Act, as modified by or interpreted by any
applicable order or orders of the Securities and Exchange
Commission (the "Commission") or any rules or regulations
adopted by, or interpretative releases of, the Commission.
(c) In addition to the requirements of subparagraphs (a) and (b) of
this paragraph 9, the terms of any continuance or modification
of this Agreement must have been approved by the vote of a
3
<PAGE>
majority of those Trustees of the Trust who are not parties to
this Agreement or interested persons of any such party, cast in
person at a meeting called for the purpose of voting on such
approval.
(d) Either the Advisor, the Sub-Advisor or the Portfolio may, at any
time on sixty (60) days' prior written notice to the other
parties, terminate this Agreement, without payment of any
penalty, by action of its Board of Trustees or Directors, or
with respect to the Portfolio by vote of a majority of its
outstanding voting securities. This Agreement shall terminate
automatically in the event of its assignment.
10. LIMITATION OF LIABILITY: The Sub-Advisor is hereby expressly put on
notice of the limitation of shareholder liability as set forth in the
Declaration of Trust or other organizational document of the Trust and agrees
that any obligations of the Trust or the Portfolio arising in connection with
this Agreement shall be limited in all cases to the Portfolio and its assets,
and the Sub-Advisor shall not seek satisfaction of any such obligation from the
shareholders or any shareholder of the Portfolio. Nor shall the Sub-Advisor seek
satisfaction of any such obligation from the Trustees or any individual Trustee.
11. GOVERNING LAW: This Agreement shall be governed by, and construed in
accordance with, the laws of the Commonwealth of Massachusetts, without giving
effect to the choice of laws provisions thereof.
The terms "registered investment company," "vote of a majority of the
outstanding voting securities," "assignment," and "interested persons," when
used herein, shall have the respective meanings specified in the 1940 Act as now
in effect or as hereafter amended.
IN WITNESS WHEREOF the parties hereto have caused this instrument to be
signed in their behalf by their respective officers thereunto duly authorized,
and their respective seals to be hereunto affixed, all as of the date written
above.
FIDELITY MANAGEMENT & RESEARCH (U.K.) INC.
BY:_____________________________________________________
Title
FIDELITY MANAGEMENT & RESEARCH COMPANY
BY: ___________________________________________
Title
FIDELITY ADVISOR SERIES I ON BEHALF OF
FIDELITY ADVISOR DIVIDEND GROWTH FUND
BY: ____________________________________________
Title
Exhibit 5(aa)
FORM OF
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY MANAGEMENT & RESEARCH COMPANY
AND
FIDELITY MANAGEMENT & RESEARCH (FAR EAST) INC.
AND
FIDELITY ADVISOR SERIES I ON BEHALF OF
FIDELITY ADVISOR DIVIDEND GROWTH FUND
AGREEMENT made this ___ day of ____, 1998, by and between Fidelity
Management & Research Company, a Massachusetts corporation with principal
offices at 82 Devonshire Street, Boston, Massachusetts (hereinafter called the
"Advisor"); Fidelity Management & Research (Far East) Inc. (hereinafter called
the "Sub-Advisor"); and Fidelity Advisor Series I, a Massachusetts business
trust which may issue one or more series of shares of beneficial interest
(hereinafter called the "Trust") on behalf of Fidelity Advisor Dividend Growth
Fund (hereinafter called the "Portfolio").
WHEREAS the Trust and the Advisor have entered into a Management
Contract on behalf of the Portfolio, pursuant to which the Advisor is to act as
investment manager of the Portfolio; and
WHEREAS the Sub-Advisor and its subsidiaries and other affiliated
persons have personnel in various locations throughout the world and have been
formed in part for the purpose of researching and compiling information and
recommendations with respect to the economies of various countries, and
securities of issuers located in such countries, and providing investment
advisory services in connection therewith;
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the Trust, the Advisor and the Sub-Advisor agree as
follows:
1. DUTIES: The Advisor may, in its discretion, appoint the Sub-Advisor
to perform one or more of the following services with respect to all or a
portion of the investments of the Portfolio. The services and the portion of the
investments of the Portfolio to be advised or managed by the Sub-Advisor shall
be as agreed upon from time to time by the Advisor and the Sub-Advisor. The
Sub-Advisor shall pay the salaries and fees of all personnel of the Sub-Advisor
performing services for the Portfolio relating to research, statistical and
investment activities.
(a) INVESTMENT ADVICE: If and to the extent requested by the Advisor,
the Sub-Advisor shall provide investment advice to the Portfolio and the
Advisor with respect to all or a portion of the investments of the
Portfolio, and in connection with such advice shall furnish the
Portfolio and the Advisor such factual information, research reports and
investment recommendations as the Advisor may reasonably require. Such
information may include written and oral reports and analyses.
(b) INVESTMENT MANAGEMENT: If and to the extent requested by the
Advisor, the Sub-Advisor shall, subject to the supervision of the
Advisor, manage all or a portion of the investments of the Portfolio in
accordance with the investment objective, policies and limitations
provided in the Portfolio's Prospectus or other governing instruments,
as amended from time to time, the Investment Company Act of 1940 (the
"1940 Act") and rules thereunder, as amended from time to time, and such
other limitations as the Trust or Advisor may impose with respect to the
Portfolio by notice to the Sub-Advisor. With respect to the portion of
the investments of the Portfolio under its management, the Sub-Advisor
is authorized to make investment decisions on behalf of the Portfolio
with regard to any stock, bond, other security or investment instrument,
and to place orders for the purchase and sale of such securities through
such broker-dealers as the Sub-Advisor may select. The Sub-Advisor may
also be authorized, but only to the extent such duties are delegated in
writing by the Advisor, to provide additional investment management
services to the Portfolio, including but not limited to services such as
managing foreign currency investments, purchasing and selling or writing
futures and options contracts, borrowing money, or lending securities on
behalf of the Portfolio. All investment management and any other
activities of the Sub-Advisor shall at all times be subject to the
control and direction of the Advisor and the Trust's Board of Trustees.
<PAGE>
(c) SUBSIDIARIES AND AFFILIATES: The Sub-Advisor may perform any or all
of the services contemplated by this Agreement directly or through such
of its subsidiaries or other affiliated persons as the Sub-Advisor shall
determine; provided, however, that performance of such services through
such subsidiaries or other affiliated persons shall have been approved
by the Trust to the extent required pursuant to the 1940 Act and rules
thereunder.
2. INFORMATION TO BE PROVIDED TO THE TRUST AND THE ADVISOR: The
Sub-Advisor shall furnish such reports, evaluations, information or analyses to
the Trust and the Advisor as the Trust's Board of Trustees or the Advisor may
reasonably request from time to time, or as the Sub-Advisor may deem to be
desirable.
3. BROKERAGE: In connection with the services provided under
subparagraph (b) of paragraph 1 of this Agreement, the Sub-Advisor shall place
all orders for the purchase and sale of portfolio securities for the Portfolio's
account with brokers or dealers selected by the Sub-Advisor, which may include
brokers or dealers affiliated with the Advisor or Sub-Advisor. The Sub-Advisor
shall use its best efforts to seek to execute portfolio transactions at prices
which are advantageous to the Portfolio and at commission rates which are
reasonable in relation to the benefits received. In selecting brokers or dealers
qualified to execute a particular transaction, brokers or dealers may be
selected who also provide brokerage and research services (as those terms are
defined in Section 28(e) of the Securities Exchange Act of l934) to the
Portfolio and/or to the other accounts over which the Sub-Advisor or Advisor
exercise investment discretion. The Sub-Advisor is authorized to pay a broker or
dealer who provides such brokerage and research services a commission for
executing a portfolio transaction for the Portfolio which is in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction if the Sub-Advisor determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer. This determination may be viewed in
terms of either that particular transaction or the overall responsibilities
which the Sub-Advisor has with respect to accounts over which it exercises
investment discretion. The Trustees of the Trust shall periodically review the
commissions paid by the Portfolio to determine if the commissions paid over
representative periods of time were reasonable in relation to the benefits to
the Portfolio.
4. COMPENSATION: The Advisor shall compensate the Sub-Advisor on the
following basis for the services to be furnished hereunder.
(a) INVESTMENT ADVISORY FEE: For services provided under subparagraph
(a) of paragraph 1 of this Agreement, the Advisor agrees to pay the
Sub-Advisor a monthly Sub-Advisory Fee. The Sub-Advisory Fee shall be
equal to 105% of the Sub-Advisor's costs incurred in connection with
rendering the services referred to in subparagraph (a) of paragraph 1 of
this Agreement. The Sub-Advisory Fee shall not be reduced to reflect
expense reimbursements or fee waivers by the Advisor, if any, in effect
from time to time.
(b) INVESTMENT MANAGEMENT FEE: For services provided under subparagraph
(b) of paragraph 1 of this Agreement, the Advisor agrees to pay the
Sub-Advisor a monthly Investment Management Fee. The Investment
Management Fee shall be equal to: (i) 50% of the monthly management fee
rate (including performance adjustments, if any) that the Portfolio is
obligated to pay the Advisor under its Management Contract with the
Advisor, multiplied by: (ii) the fraction equal to the net assets of the
Portfolio as to which the Sub-Advisor shall have provided investment
management services divided by the net assets of the Portfolio for that
month. If in any fiscal year the aggregate expenses of the Portfolio
exceed any applicable expense limitation imposed by any state or federal
securities laws or regulations, and the Advisor waives all or a portion
of its management fee or reimburses the Portfolio for expenses to the
extent required to satisfy such limitation, the Investment Management
Fee paid to the Sub-Advisor will be reduced by 50% of the amount of such
waivers or reimbursements multiplied by the fraction determined in (ii).
If the Sub-Advisor reduces its fees to reflect such waivers or
reimbursements and the Advisor subsequently recovers all or any portion
of such waivers and reimbursements, then the Sub-Advisor shall be
entitled to receive from the Advisor a proportionate share of the amount
recovered. To the extent that waivers and reimbursements by the Advisor
required by such limitations are in excess of the Advisor's management
fee, the Investment Management Fee paid to the Sub-Advisor will be
reduced to zero for that month, but in no event shall the Sub-Advisor be
required to reimburse the Advisor for all or a portion of such excess
reimbursements.
2
<PAGE>
(c) PROVISION OF MULTIPLE SERVICES: If the Sub-Advisor shall have
provided both investment advisory services under subparagraph (a) and
investment management services under subparagraph (b) of paragraph 1 for
the same portion of the investments of the Portfolio for the same
period, the fees paid to the Sub-Advisor with respect to such
investments shall be calculated exclusively under subparagraph (b) of
this paragraph 4.
5. EXPENSES: It is understood that the Portfolio will pay all of its
expenses other than those expressly stated to be payable by the Sub-Advisor
hereunder or by the Advisor under the Management Contract with the Portfolio,
which expenses payable by the Portfolio shall include, without limitation, (i)
interest and taxes; (ii) brokerage commissions and other costs in connection
with the purchase or sale of securities and other investment instruments; (iii)
fees and expenses of the Trust's Trustees other than those who are "interested
persons" of the Trust, the Sub-Advisor or the Advisor; (iv) legal and audit
expenses; (v) custodian, registrar and transfer agent fees and expenses; (vi)
fees and expenses related to the registration and qualification of the Trust and
the Portfolio's shares for distribution under state and federal securities laws;
(vii) expenses of printing and mailing reports and notices and proxy material to
shareholders of the Portfolio; (viii) all other expenses incidental to holding
meetings of the Portfolio's shareholders, including proxy solicitations
therefore; (ix) a pro rata share, based on relative net assets of the Portfolio
and other registered investment companies having Advisory and Service or
Management Contracts with the Advisor, of 50% of insurance premiums for fidelity
and other coverage; (x) its proportionate share of association membership dues;
(xi) expenses of typesetting for printing Prospectuses and Statements of
Additional Information and supplements thereto; (xii) expenses of printing and
mailing Prospectuses and Statements of Additional Information and supplements
thereto sent to existing shareholders; and (xiii) such non-recurring or
extraordinary expenses as may arise, including those relating to actions, suits
or proceedings to which the Portfolio is a party and the legal obligation which
the Portfolio may have to indemnify the Trust's Trustees and officers with
respect thereto.
6. INTERESTED PERSONS: It is understood that Trustees, officers, and
shareholders of the Trust are or may be or become interested in the Advisor or
the Sub-Advisor as directors, officers or otherwise and that directors, officers
and stockholders of the Advisor or the Sub-Advisor are or may be or become
similarly interested in the Trust, and that the Advisor or the Sub-Advisor may
be or become interested in the Trust as a shareholder or otherwise.
7. SERVICES TO OTHER COMPANIES OR ACCOUNTS: The services of the
Sub-Advisor to the Advisor are not to be deemed to be exclusive, the Sub-Advisor
being free to render services to others and engage in other activities,
provided, however, that such other services and activities do not, during the
term of this Agreement, interfere, in a material manner, with the Sub-Advisor's
ability to meet all of its obligations hereunder. The Sub-Advisor shall for all
purposes be an independent contractor and not an agent or employee of the
Advisor or the Trust.
8. STANDARD OF CARE: In the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of obligations or duties hereunder on the
part of the Sub-Advisor, the Sub-Advisor shall not be subject to liability to
the Advisor, the Trust or to any shareholder of the Portfolio for any act or
omission in the course of, or connected with, rendering services hereunder or
for any losses that may be sustained in the purchase, holding or sale of any
security.
9. DURATION AND TERMINATION OF AGREEMENT; AMENDMENTS:
(a) Subject to prior termination as provided in subparagraph (d) of
this paragraph 9, this Agreement shall continue in force until
July 31, 1999 and indefinitely thereafter, but only so long as
the continuance after such period shall be specifically approved
at least annually by vote of the Trust's Board of Trustees or by
vote of a majority of the outstanding voting securities of the
Portfolio.
(b) This Agreement may be modified by mutual consent of the Advisor,
the Sub-Advisor and the Portfolio subject to the provisions of
Section 15 of the 1940 Act, as modified by or interpreted by any
applicable order or orders of the Securities and Exchange
Commission (the "Commission") or any rules or regulations
adopted by, or interpretative releases of, the Commission.
(c) In addition to the requirements of subparagraphs (a) and (b) of
this paragraph 9, the terms of any continuance or modification
of this Agreement must have been approved by the vote of a
majority of those Trustees of the Trust who are not parties to
this Agreement or interested persons of any such party, cast in
person at a meeting called for the purpose of voting on such
approval.
3
<PAGE>
(d) Either the Advisor, the Sub-Advisor or the Portfolio may, at any
time on sixty (60) days' prior written notice to the other
parties, terminate this Agreement, without payment of any
penalty, by action of its Board of Trustees or Directors, or
with respect to the Portfolio by vote of a majority of its
outstanding voting securities. This Agreement shall terminate
automatically in the event of its assignment.
10. LIMITATION OF LIABILITY: The Sub-Advisor is hereby expressly put on
notice of the limitation of shareholder liability as set forth in the
Declaration of Trust or other organizational document of the Trust and agrees
that any obligations of the Trust or the Portfolio arising in connection with
this Agreement shall be limited in all cases to the Portfolio and its assets,
and the Sub-Advisor shall not seek satisfaction of any such obligation from the
shareholders or any shareholder of the Portfolio. Nor shall the Sub-Advisor seek
satisfaction of any such obligation from the Trustees or any individual Trustee.
11. GOVERNING LAW: This Agreement shall be governed by, and construed in
accordance with, the laws of the Commonwealth of Massachusetts, without giving
effect to the choice of laws provisions thereof.
The terms "registered investment company," "vote of a majority of the
outstanding voting securities," "assignment," and "interested persons," when
used herein, shall have the respective meanings specified in the 1940 Act as now
in effect or as hereafter amended.
IN WITNESS WHEREOF the parties hereto have caused this instrument to be
signed in their behalf by their respective officers thereunto duly authorized,
and their respective seals to be hereunto affixed, all as of the date written
above.
FIDELITY MANAGEMENT & RESEARCH (FAR EAST) INC.
BY:_____________________________________________________
Title
FIDELITY MANAGEMENT & RESEARCH COMPANY
BY: ___________________________________________
Title
FIDELITY ADVISOR SERIES I ON BEHALF OF
FIDELITY ADVISOR DIVIDEND GROWTH FUND
BY: ____________________________________________
Title
4
Exhibit 5(bb)
FORM OF
MANAGEMENT CONTRACT
between
FIDELITY ADVISOR SERIES I:
FIDELITY ADVISOR RETIREMENT GROWTH FUND
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
AGREEMENT made this __ day of _____ 1998, by and between Fidelity
Advisor Series I, a Massachusetts business trust which may issue one or more
series of shares of beneficial interest (hereinafter called the "Fund"), on
behalf of Fidelity Advisor Retirement Growth Fund (hereinafter called the
"Portfolio"), and Fidelity Management & Research Company, a Massachusetts
corporation (hereinafter called the "Adviser") as set forth in its entirety
below.
1. (a) Investment Advisory Services. The Adviser undertakes to act as
investment adviser of the Portfolio and shall, subject to the supervision of the
Fund's Board of Trustees, direct the investments of the Portfolio in accordance
with the investment objective, policies and limitations as provided in the
Portfolio's Prospectus or other governing instruments, as amended from time to
time, the Investment Company Act of 1940 and rules thereunder, as amended from
time to time (the "1940 Act"), and such other limitations as the Portfolio may
impose by notice in writing to the Adviser. The Adviser shall also furnish for
the use of the Portfolio office space and all necessary office facilities,
equipment and personnel for servicing the investments of the Portfolio; and
shall pay the salaries and fees of all officers of the Fund, of all Trustees of
the Fund who are "interested persons" of the Fund or of the Adviser and of all
personnel of the Fund or the Adviser performing services relating to research,
statistical and investment activities. The Adviser is authorized, in its
discretion and without prior consultation with the Portfolio, to buy, sell, lend
and otherwise trade in any stocks, bonds and other securities and investment
instruments on behalf of the Portfolio. The investment policies and all other
actions of the Portfolio are and shall at all times be subject to the control
and direction of the Fund's Board of Trustees.
(b) Management Services. The Adviser shall perform (or arrange for
the performance by its affiliates of) the management and administrative services
necessary for the operation of the Fund. The Adviser shall, subject to the
supervision of the Board of Trustees, perform various services for the
Portfolio, including but not limited to: (i) providing the Portfolio with office
space, equipment and facilities (which may be its own) for maintaining its
organization; (ii) on behalf of the Portfolio, supervising relations with, and
monitoring the performance of, custodians, depositories, transfer and pricing
agents, accountants, attorneys, underwriters, brokers and dealers, insurers and
other persons in any capacity deemed to be necessary or desirable; (iii)
preparing all general shareholder communications, including shareholder reports;
(iv) conducting shareholder relations; (v) maintaining the Fund's existence and
its records; (vi) during such times as shares are publicly offered, maintaining
the registration and qualification of the Portfolio's shares under federal and
state law; and (vii) investigating the development of and developing and
implementing, if appropriate, management and shareholder services designed to
enhance the value or convenience of the Portfolio as an investment vehicle.
The Adviser shall also furnish such reports, evaluations, information or
analyses to the Fund as the Fund's Board of Trustees may request from time to
time or as the Adviser may deem to be desirable. The Adviser shall make
recommendations to the Fund's Board of Trustees with respect to Fund policies,
and shall carry out such policies as are adopted by the Trustees. The Adviser
shall, subject to review by the Board of Trustees, furnish such other services
as the Adviser shall from time to time determine to be necessary or useful to
perform its obligations under this Contract.
(c) The Adviser shall place all orders for the purchase and sale of
portfolio securities for the Portfolio's account with brokers or dealers
selected by the Adviser, which may include brokers or dealers affiliated with
the Adviser. The Adviser shall use its best efforts to seek to execute portfolio
transactions at prices which are advantageous to the Portfolio and at commission
rates which are reasonable in relation to the benefits received. In selecting
brokers or dealers qualified to execute a particular transaction, brokers or
dealers may be selected who also provide brokerage and research services (as
those terms are defined in Section 28(e) of the Securities Exchange Act of 1934)
to the Portfolio and/or the other accounts over which the Adviser or its
affiliates exercise investment discretion. The Adviser is authorized to pay a
broker or dealer who provides such brokerage and research services a commission
<PAGE>
for executing a portfolio transaction for the Portfolio which is in excess of
the amount of commission another broker or dealer would have charged for
effecting that transaction if the Adviser determines in good faith that such
amount of commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer. This determination may be
viewed in terms of either that particular transaction or the overall
responsibilities which the Adviser and its affiliates have with respect to
accounts over which they exercise investment discretion. The Trustees of the
Fund shall periodically review the commissions paid by the Portfolio to
determine if the commissions paid over representative periods of time were
reasonable in relation to the benefits to the Portfolio.
The Adviser shall, in acting hereunder, be an independent contractor.
The Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of the
Fund are or may be or become interested in the Adviser as directors, officers or
otherwise and that directors, officers and stockholders of the Adviser are or
may be or become similarly interested in the Fund, and that the Adviser may be
or become interested in the Fund as a shareholder or otherwise.
3. The Adviser will be compensated on the following basis for the
services and facilities to be furnished hereunder. The Adviser shall receive a
monthly management fee, payable monthly as soon as practicable after the last
day of each month, composed of a Group Fee and an Individual Fund Fee.
(a) Group Fee Rate. The Group Fee Rate shall be based upon the monthly
average of the net assets of the registered investment companies having Advisory
and Service or Management Contracts with the Adviser (computed in the manner set
forth in the fund's Declaration of Trust or other organizational document)
determined as of the close of business on each business day throughout the
month. The Group Fee Rate shall be determined on a cumulative basis pursuant to
the following schedule:
AVERAGE NET ASSETS ANNUALIZED FEE RATE (FOR EACH LEVEL)
0 - $ 3 billion .5200%
3 - 6 .4900
6 - 9 .4600
9 - 12 .4300
12 - 15 .4000
15 - 18 .3850
18 - 21 .3700
21 - 24 .3600
24 - 30 .3500
30 - 36 .3450
36 - 42 .3400
42 - 48 .3350
48 - 66 .3250
66 - 84 .3200
84 - 102 .3150
102 - 138 .3100
2
<PAGE>
138 - 174 .3050
174 - 210 .3000
210 - 246 .2950
246 - 282 .2900
282 - 318 .2850
318 - 354 .2800
354 - 390 .2750
390 - 426 .2700
426 - 462 .2650
462 - 498 .2600
498 - 534 .2550
Over - 534 .2500
(b) Individual Fund Fee Rate. The Individual Fund Fee Rate shall be .30%.
The sum of the Group Fee Rate, calculated as described above to the
nearest millionth, and the Individual Fund Fee Rate shall constitute the Annual
Management Fee Rate. One-twelfth of the Annual Management Fee Rate shall be
applied to the average of the net assets of the Portfolio (computed in the
manner set forth in the Fund's Declaration of Trust or other organizational
document) determined as of the close of business on each business day throughout
the month.
(c) In case of termination of this Contract during any month, the fee for
that month shall be reduced proportionately on the basis of the number of
business days during which it is in effect, and the fee computed upon the
average net assets for the business days it is so in effect for that month.
4. It is understood that the Portfolio will pay all its expenses, which
expenses payable by the Portfolio shall include, without limitation, (i)
interest and taxes; (ii) brokerage commissions and other costs in connection
with the purchase or sale of securities and other investment instruments; (iii)
fees and expenses of the Fund's Trustees other than those who are "interested
persons" of the Fund or the Adviser; (iv) legal and audit expenses; (v)
custodian, registrar and transfer agent fees and expenses; (vi) fees and
expenses related to the registration and qualification of the Fund and the
Portfolio's shares for distribution under state and federal securities laws;
(vii) expenses of printing and mailing reports and notices and proxy material to
shareholders of the Portfolio; (viii) all other expenses incidental to holding
meetings of the Portfolio's shareholders, including proxy solicitations
therefor; (ix) a pro rata share, based on relative net assets of the Portfolio
and other registered investment companies having Advisory and Service or
Management Contracts with the Adviser, of 50% of insurance premiums for fidelity
and other coverage; (x) its proportionate share of association membership dues;
(xi) expenses of typesetting for printing Prospectuses and Statements of
Additional Information and supplements thereto; (xii) expenses of printing and
mailing Prospectuses and Statements of Additional Information and supplements
thereto sent to existing shareholders; and (xiii) such non-recurring or
extraordinary expenses as may arise, including those relating to actions, suits
or proceedings to which the Portfolio is a party and the legal obligation which
the Portfolio may have to indemnify the Fund's Trustees and officers with
respect thereto.
5. The services of the Adviser to the Portfolio are not to be deemed
exclusive, the Adviser being free to render services to others and engage in
other activities, provided, however, that such other services and activities do
not, during the term of this Contract, interfere, in a material manner, with the
Adviser's ability to meet all of its obligations with respect to rendering
services to the Portfolio hereunder. In the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of obligations or duties hereunder
on the part of the Adviser, the Adviser shall not be subject to liability to the
Portfolio or to any shareholder of the Portfolio for any act or omission in the
course of, or connected with, rendering services hereunder or for any losses
3
<PAGE>
that may be sustained in the purchase, holding or sale of any security or other
investment instrument.
6. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 6, this Contract shall continue in force until July 31, 1999 and
indefinitely thereafter, but only so long as the continuance after such date
shall be specifically approved at least annually by vote of the Trustees of the
Fund or by vote of a majority of the outstanding voting securities of the
Portfolio.
(b) This Contract may be modified by mutual consent subject to the
provisions of Section 15 of the 1940 Act, as modified by or interpreted by any
applicable order or orders of the Securities and Exchange Commission (the
"Commission") or any rules or regulations adopted by, or interpretative releases
of, the Commission.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of this
paragraph 6, the terms of any continuance or modification of this Contract must
have been approved by the vote of a majority of those Trustees of the Fund who
are not parties to the Contract or interested persons of any such party, cast in
person at a meeting called for the purpose of voting on such approval.
(d) Either party hereto may, at any time on sixty (60) days' prior
written notice to the other, terminate this Contract, without payment of any
penalty, by action of its Trustees or Board of Directors, as the case may be, or
with respect to the Portfolio by vote of a majority of the outstanding voting
securities of the Portfolio. This Contract shall terminate automatically in the
event of its assignment.
7. The Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Fund's Declaration of Trust or other
organizational document and agrees that the obligations assumed by the Fund
pursuant to this Contract shall be limited in all cases to the Portfolio and its
assets, and the Adviser shall not seek satisfaction of any such obligation from
the shareholders or any shareholder of the Portfolio or any other Portfolios of
the Fund. In addition, the Adviser shall not seek satisfaction of any such
obligations from the Trustees or any individual Trustee. The Adviser understands
that the rights and obligations of any Portfolio under the Declaration of Trust
or other organizational document are separate and distinct from those of any and
all other Portfolios.
8. This Agreement shall be governed by, and construed in accordance
with, the laws of the Commonwealth of Massachusetts, without giving effect to
the choice of laws provisions thereof.
The terms "vote of a majority of the outstanding voting securities,"
"assignment," and "interested persons," when used herein, shall have the
respective meanings specified in the 1940 Act, as now in effect or as hereafter
amended, and subject to such orders as may be granted by the Commission.
IN WITNESS WHEREOF the parties have caused this instrument to be signed
in their behalf by their respective officers thereunto duly authorized, and
their respective seals to be hereunto affixed, all as of the date written above.
FIDELITY ADVISOR SERIES I
on behalf of Fidelity Advisor Retirement Growth Fund
By _________________________________________
Senior Vice President
FIDELITY MANAGEMENT & RESEARCH COMPANY
By _________________________________________
President
4
Exhibit 5(cc)
FORM OF
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY MANAGEMENT & RESEARCH COMPANY
AND
FIDELITY MANAGEMENT & RESEARCH (U.K.) INC.
AND
FIDELITY ADVISOR SERIES I ON BEHALF OF
FIDELITY ADVISOR RETIREMENT GROWTH FUND
AGREEMENT made this ___ day of ________, 1998, by and between Fidelity
Management & Research Company, a Massachusetts corporation with principal
offices at 82 Devonshire Street, Boston, Massachusetts (hereinafter called the
"Advisor"); Fidelity Management & Research (U.K.) Inc. (hereinafter called the
"Sub-Advisor"); and Fidelity Advisor Series I, a Massachusetts business trust
which may issue one or more series of shares of beneficial interest (hereinafter
called the "Trust") on behalf of Fidelity Advisor Retirement Growth Fund
(hereinafter called the "Portfolio").
WHEREAS the Trust and the Advisor have entered into a Management
Contract on behalf of the Portfolio, pursuant to which the Advisor is to act as
investment manager of the Portfolio; and
WHEREAS the Sub-Advisor and its subsidiaries and other affiliated
persons have personnel in various locations throughout the world and have been
formed in part for the purpose of researching and compiling information and
recommendations with respect to the economies of various countries, and
securities of issuers located in such countries, and providing investment
advisory services in connection therewith;
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the Trust, the Advisor and the Sub-Advisor agree as
follows:
1. DUTIES: The Advisor may, in its discretion, appoint the Sub-Advisor
to perform one or more of the following services with respect to all or a
portion of the investments of the Portfolio. The services and the portion of the
investments of the Portfolio to be advised or managed by the Sub-Advisor shall
be as agreed upon from time to time by the Advisor and the Sub-Advisor. The
Sub-Advisor shall pay the salaries and fees of all personnel of the Sub-Advisor
performing services for the Portfolio relating to research, statistical and
investment activities.
(a) INVESTMENT ADVICE: If and to the extent requested by the Advisor,
the Sub-Advisor shall provide investment advice to the Portfolio and the
Advisor with respect to all or a portion of the investments of the
Portfolio, and in connection with such advice shall furnish the
Portfolio and the Advisor such factual information, research reports and
investment recommendations as the Advisor may reasonably require. Such
information may include written and oral reports and analyses.
(b) INVESTMENT MANAGEMENT: If and to the extent requested by the
Advisor, the Sub-Advisor shall, subject to the supervision of the
Advisor, manage all or a portion of the investments of the Portfolio in
accordance with the investment objective, policies and limitations
provided in the Portfolio's Prospectus or other governing instruments,
as amended from time to time, the Investment Company Act of 1940 (the
"1940 Act") and rules thereunder, as amended from time to time, and such
other limitations as the Trust or Advisor may impose with respect to the
Portfolio by notice to the Sub-Advisor. With respect to the portion of
the investments of the Portfolio under its management, the Sub-Advisor
is authorized to make investment decisions on behalf of the Portfolio
with regard to any stock, bond, other security or investment instrument,
and to place orders for the purchase and sale of such securities through
such broker-dealers as the Sub-Advisor may select. The Sub-Advisor may
also be authorized, but only to the extent such duties are delegated in
writing by the Advisor, to provide additional investment management
services to the Portfolio, including but not limited to services such as
managing foreign currency investments, purchasing and selling or writing
futures and options contracts, borrowing money or lending securities on
behalf of the Portfolio. All investment management and any other
activities of the Sub-Advisor shall at all times be subject to the
control and direction of the Advisor and the Trust's Board of Trustees.
<PAGE>
(c) SUBSIDIARIES AND AFFILIATES: The Sub-Advisor may perform any or all
of the services contemplated by this Agreement directly or through such
of its subsidiaries or other affiliated persons as the Sub-Advisor shall
determine; provided, however, that performance of such services through
such subsidiaries or other affiliated persons shall have been approved
by the Trust to the extent required pursuant to the 1940 Act and rules
thereunder.
2. INFORMATION TO BE PROVIDED TO THE TRUST AND THE ADVISOR: The
Sub-Advisor shall furnish such reports, evaluations, information or analyses to
the Trust and the Advisor as the Trust's Board of Trustees or the Advisor may
reasonably request from time to time, or as the Sub-Advisor may deem to be
desirable.
3. BROKERAGE: In connection with the services provided under
subparagraph (b) of paragraph 1 of this Agreement, the Sub-Advisor shall place
all orders for the purchase and sale of portfolio securities for the Portfolio's
account with brokers or dealers selected by the Sub-Advisor, which may include
brokers or dealers affiliated with the Advisor or Sub-Advisor. The Sub-Advisor
shall use its best efforts to seek to execute portfolio transactions at prices
which are advantageous to the Portfolio and at commission rates which are
reasonable in relation to the benefits received. In selecting brokers or dealers
qualified to execute a particular transaction, brokers or dealers may be
selected who also provide brokerage and research services (as those terms are
defined in Section 28(e) of the Securities Exchange Act of l934) to the
Portfolio and/or to the other accounts over which the Sub-Advisor or Advisor
exercise investment discretion. The Sub-Advisor is authorized to pay a broker or
dealer who provides such brokerage and research services a commission for
executing a portfolio transaction for the Portfolio which is in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction if the Sub-Advisor determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer. This determination may be viewed in
terms of either that particular transaction or the overall responsibilities
which the Sub-Advisor has with respect to accounts over which it exercises
investment discretion. The Trustees of the Trust shall periodically review the
commissions paid by the Portfolio to determine if the commissions paid over
representative periods of time were reasonable in relation to the benefits to
the Portfolio.
4. COMPENSATION: The Advisor shall compensate the Sub-Advisor on the
following basis for the services to be furnished hereunder.
(a) INVESTMENT ADVISORY FEE: For services provided under subparagraph
(a) of paragraph 1 of this Agreement, the Advisor agrees to pay the
Sub-Advisor a monthly Sub-Advisory Fee. The Sub-Advisory Fee shall be
equal to 110% of the Sub-Advisor's costs incurred in connection with
rendering the services referred to in subparagraph (a) of paragraph 1 of
this Agreement. The Sub-Advisory Fee shall not be reduced to reflect
expense reimbursements or fee waivers by the Advisor, if any, in effect
from time to time.
(b) INVESTMENT MANAGEMENT FEE: For services provided under subparagraph
(b) of paragraph 1 of this Agreement, the Advisor agrees to pay the
Sub-Advisor a monthly Investment Management Fee. The Investment
Management Fee shall be equal to: (i) 50% of the monthly management fee
rate (including performance adjustments, if any) that the Portfolio is
obligated to pay the Advisor under its Management Contract with the
Advisor, multiplied by: (ii) the fraction equal to the net assets of the
Portfolio as to which the Sub-Advisor shall have provided investment
management services divided by the net assets of the Portfolio for that
month. If in any fiscal year the aggregate expenses of the Portfolio
exceed any applicable expense limitation imposed by any state or federal
securities laws or regulations, and the Advisor waives all or a portion
of its management fee or reimburses the Portfolio for expenses to the
extent required to satisfy such limitation, the Investment Management
Fee paid to the Sub-Advisor will be reduced by 50% of the amount of such
waivers or reimbursements multiplied by the fraction determined in (ii).
If the Sub-Advisor reduces its fees to reflect such waivers or
reimbursements and the Advisor subsequently recovers all or any portion
of such waivers or reimbursements, then the Sub-Advisor shall be
entitled to receive from the Advisor a proportionate share of the amount
recovered. To the extent that waivers and reimbursements by the Advisor
required by such limitations are in excess of the Advisor's management
fee, the Investment Management Fee paid to the Sub-Advisor will be
reduced to zero for that month, but in no event shall the Sub-Advisor be
required to reimburse the Advisor for all or a portion of such excess
reimbursements.
2
<PAGE>
(c) PROVISION OF MULTIPLE SERVICES: If the Sub-Advisor shall have
provided both investment advisory services under subparagraph (a) and
investment management services under subparagraph (b) of paragraph (1)
for the same portion of the investments of the Portfolio for the same
period, the fees paid to the Sub-Advisor with respect to such
investments shall be calculated exclusively under subparagraph (b) of
this paragraph 4.
5. EXPENSES: It is understood that the Portfolio will pay all of its
expenses other than those expressly stated to be payable by the Sub-Advisor
hereunder or by the Advisor under the Management Contract with the Portfolio,
which expenses payable by the Portfolio shall include, without limitation, (i)
interest and taxes; (ii) brokerage commissions and other costs in connection
with the purchase or sale of securities and other investment instruments; (iii)
fees and expenses of the Trust's Trustees other than those who are "interested
persons" of the Trust, the Sub-Advisor or the Advisor; (iv) legal and audit
expenses; (v) custodian, registrar and transfer agent fees and expenses; (vi)
fees and expenses related to the registration and qualification of the Trust and
the Portfolio's shares for distribution under state and federal securities laws;
(vii) expenses of printing and mailing reports and notices and proxy material to
shareholders of the Portfolio; (viii) all other expenses incidental to holding
meetings of the Portfolio's shareholders, including proxy solicitations
therefore; (ix) a pro rata share, based on relative net assets of the Portfolio
and other registered investment companies having Advisory and Service or
Management Contracts with the Advisor, of 50% of insurance premiums for fidelity
and other coverage; (x) its proportionate share of association membership dues;
(xi) expenses of typesetting for printing Prospectuses and Statements of
Additional Information and supplements thereto; (xii) expenses of printing and
mailing Prospectuses and Statements of Additional Information and supplements
thereto sent to existing shareholders; and (xiii) such non-recurring or
extraordinary expenses as may arise, including those relating to actions, suits
or proceedings to which the Portfolio is a party and the legal obligation which
the Portfolio may have to indemnify the Trust's Trustees and officers with
respect thereto.
6. INTERESTED PERSONS: It is understood that Trustees, officers, and
shareholders of the Trust are or may be or become interested in the Advisor or
the Sub-Advisor as directors, officers or otherwise and that directors, officers
and stockholders of the Advisor or the Sub-Advisor are or may be or become
similarly interested in the Trust, and that the Advisor or the Sub-Advisor may
be or become interested in the Trust as a shareholder or otherwise.
7. SERVICES TO OTHER COMPANIES OR ACCOUNTS: The services of the
Sub-Advisor to the Advisor are not to be deemed to be exclusive, the Sub-Advisor
being free to render services to others and engage in other activities,
provided, however, that such other services and activities do not, during the
term of this Agreement, interfere, in a material manner, with the Sub-Advisor's
ability to meet all of its obligations hereunder. The Sub-Advisor shall for all
purposes be an independent contractor and not an agent or employee of the
Advisor or the Trust.
8. STANDARD OF CARE: In the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of obligations or duties hereunder on the
part of the Sub-Advisor, the Sub-Advisor shall not be subject to liability to
the Advisor, the Trust or to any shareholder of the Portfolio for any act or
omission in the course of, or connected with, rendering services hereunder or
for any losses that may be sustained in the purchase, holding or sale of any
security.
9. DURATION AND TERMINATION OF AGREEMENT; AMENDMENTS:
(a) Subject to prior termination as provided in subparagraph (d) of
this paragraph 9, this Agreement shall continue in force until
July 31, 1999 and indefinitely thereafter, but only so long as
the continuance after such period shall be specifically approved
at least annually by vote of the Trust's Board of Trustees or by
vote of a majority of the outstanding voting securities of the
Portfolio.
(b) This Agreement may be modified by mutual consent of the Advisor,
the Sub-Advisor and the Portfolio subject to the provisions of
Section 15 of the 1940 Act, as modified by or interpreted by any
applicable order or orders of the Securities and Exchange
Commission (the "Commission") or any rules or regulations
adopted by, or interpretative releases of, the Commission.
3
<PAGE>
(c) In addition to the requirements of subparagraphs (a) and (b) of
this paragraph 9, the terms of any continuance or modification
of this Agreement must have been approved by the vote of a
majority of those Trustees of the Trust who are not parties to
this Agreement or interested persons of any such party, cast in
person at a meeting called for the purpose of voting on such
approval.
(d) Either the Advisor, the Sub-Advisor or the Portfolio may, at any
time on sixty (60) days' prior written notice to the other
parties, terminate this Agreement, without payment of any
penalty, by action of its Board of Trustees or Directors, or
with respect to the Portfolio by vote of a majority of its
outstanding voting securities. This Agreement shall terminate
automatically in the event of its assignment.
10. LIMITATION OF LIABILITY: The Sub-Advisor is hereby expressly put on
notice of the limitation of shareholder liability as set forth in the
Declaration of Trust or other organizational document of the Trust and agrees
that any obligations of the Trust or the Portfolio arising in connection with
this Agreement shall be limited in all cases to the Portfolio and its assets,
and the Sub-Advisor shall not seek satisfaction of any such obligation from the
shareholders or any shareholder of the Portfolio. Nor shall the Sub-Advisor seek
satisfaction of any such obligation from the Trustees or any individual Trustee.
11. GOVERNING LAW: This Agreement shall be governed by, and construed in
accordance with, the laws of the Commonwealth of Massachusetts, without giving
effect to the choice of laws provisions thereof.
The terms "registered investment company," "vote of a majority of the
outstanding voting securities," "assignment," and "interested persons," when
used herein, shall have the respective meanings specified in the 1940 Act as now
in effect or as hereafter amended.
IN WITNESS WHEREOF the parties hereto have caused this instrument to be
signed in their behalf by their respective officers thereunto duly authorized,
and their respective seals to be hereunto affixed, all as of the date written
above.
FIDELITY MANAGEMENT & RESEARCH (U.K.) INC.
BY:_____________________________________________________
Title
FIDELITY MANAGEMENT & RESEARCH COMPANY
BY: ____________________________________________________
Title
FIDELITY ADVISOR SERIES I ON BEHALF OF
FIDELITY ADVISOR RETIREMENT GROWTH FUND
BY: ___________________________________________________
Title
4
Exhibit 5(dd)
FORM OF
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY MANAGEMENT & RESEARCH COMPANY
AND
FIDELITY MANAGEMENT & RESEARCH (FAR EAST) INC.
AND
FIDELITY ADVISOR SERIES I ON BEHALF OF
FIDELITY ADVISOR RETIREMENT GROWTH FUND
AGREEMENT made this ___ day of ____, 1998, by and between Fidelity
Management & Research Company, a Massachusetts corporation with principal
offices at 82 Devonshire Street, Boston, Massachusetts (hereinafter called the
"Advisor"); Fidelity Management & Research (Far East) Inc. (hereinafter called
the "Sub-Advisor"); and Fidelity Advisor Series I, a Massachusetts business
trust which may issue one or more series of shares of beneficial interest
(hereinafter called the "Trust") on behalf of Fidelity Advisor Retirement Growth
Fund (hereinafter called the "Portfolio").
WHEREAS the Trust and the Advisor have entered into a Management
Contract on behalf of the Portfolio, pursuant to which the Advisor is to act as
investment manager of the Portfolio; and
WHEREAS the Sub-Advisor and its subsidiaries and other affiliated
persons have personnel in various locations throughout the world and have been
formed in part for the purpose of researching and compiling information and
recommendations with respect to the economies of various countries, and
securities of issuers located in such countries, and providing investment
advisory services in connection therewith;
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the Trust, the Advisor and the Sub-Advisor agree as
follows:
1. DUTIES: The Advisor may, in its discretion, appoint the Sub-Advisor
to perform one or more of the following services with respect to all or a
portion of the investments of the Portfolio. The services and the portion of the
investments of the Portfolio to be advised or managed by the Sub-Advisor shall
be as agreed upon from time to time by the Advisor and the Sub-Advisor. The
Sub-Advisor shall pay the salaries and fees of all personnel of the Sub-Advisor
performing services for the Portfolio relating to research, statistical and
investment activities.
(a) INVESTMENT ADVICE: If and to the extent requested by the Advisor,
the Sub-Advisor shall provide investment advice to the Portfolio and the
Advisor with respect to all or a portion of the investments of the
Portfolio, and in connection with such advice shall furnish the
Portfolio and the Advisor such factual information, research reports and
investment recommendations as the Advisor may reasonably require. Such
information may include written and oral reports and analyses.
(b) INVESTMENT MANAGEMENT: If and to the extent requested by the
Advisor, the Sub-Advisor shall, subject to the supervision of the
Advisor, manage all or a portion of the investments of the Portfolio in
accordance with the investment objective, policies and limitations
provided in the Portfolio's Prospectus or other governing instruments,
as amended from time to time, the Investment Company Act of 1940 (the
"1940 Act") and rules thereunder, as amended from time to time, and such
other limitations as the Trust or Advisor may impose with respect to the
Portfolio by notice to the Sub-Advisor. With respect to the portion of
the investments of the Portfolio under its management, the Sub-Advisor
is authorized to make investment decisions on behalf of the Portfolio
with regard to any stock, bond, other security or investment instrument,
and to place orders for the purchase and sale of such securities through
such broker-dealers as the Sub-Advisor may select. The Sub-Advisor may
also be authorized, but only to the extent such duties are delegated in
writing by the Advisor, to provide additional investment management
services to the Portfolio, including but not limited to services such as
managing foreign currency investments, purchasing and selling or writing
futures and options contracts, borrowing money, or lending securities on
behalf of the Portfolio. All investment management and any other
activities of the Sub-Advisor shall at all times be subject to the
control and direction of the Advisor and the Trust's Board of Trustees.
<PAGE>
(c) SUBSIDIARIES AND AFFILIATES: The Sub-Advisor may perform any or all
of the services contemplated by this Agreement directly or through such
of its subsidiaries or other affiliated persons as the Sub-Advisor shall
determine; provided, however, that performance of such services through
such subsidiaries or other affiliated persons shall have been approved
by the Trust to the extent required pursuant to the 1940 Act and rules
thereunder.
2. INFORMATION TO BE PROVIDED TO THE TRUST AND THE ADVISOR: The
Sub-Advisor shall furnish such reports, evaluations, information or analyses to
the Trust and the Advisor as the Trust's Board of Trustees or the Advisor may
reasonably request from time to time, or as the Sub-Advisor may deem to be
desirable.
3. BROKERAGE: In connection with the services provided under
subparagraph (b) of paragraph 1 of this Agreement, the Sub-Advisor shall place
all orders for the purchase and sale of portfolio securities for the Portfolio's
account with brokers or dealers selected by the Sub-Advisor, which may include
brokers or dealers affiliated with the Advisor or Sub-Advisor. The Sub-Advisor
shall use its best efforts to seek to execute portfolio transactions at prices
which are advantageous to the Portfolio and at commission rates which are
reasonable in relation to the benefits received. In selecting brokers or dealers
qualified to execute a particular transaction, brokers or dealers may be
selected who also provide brokerage and research services (as those terms are
defined in Section 28(e) of the Securities Exchange Act of l934) to the
Portfolio and/or to the other accounts over which the Sub-Advisor or Advisor
exercise investment discretion. The Sub-Advisor is authorized to pay a broker or
dealer who provides such brokerage and research services a commission for
executing a portfolio transaction for the Portfolio which is in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction if the Sub-Advisor determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer. This determination may be viewed in
terms of either that particular transaction or the overall responsibilities
which the Sub-Advisor has with respect to accounts over which it exercises
investment discretion. The Trustees of the Trust shall periodically review the
commissions paid by the Portfolio to determine if the commissions paid over
representative periods of time were reasonable in relation to the benefits to
the Portfolio.
4. COMPENSATION: The Advisor shall compensate the Sub-Advisor on the
following basis for the services to be furnished hereunder.
(a) INVESTMENT ADVISORY FEE: For services provided under subparagraph
(a) of paragraph 1 of this Agreement, the Advisor agrees to pay the
Sub-Advisor a monthly Sub-Advisory Fee. The Sub-Advisory Fee shall be
equal to 105% of the Sub-Advisor's costs incurred in connection with
rendering the services referred to in subparagraph (a) of paragraph 1 of
this Agreement. The Sub-Advisory Fee shall not be reduced to reflect
expense reimbursements or fee waivers by the Advisor, if any, in effect
from time to time.
(b) INVESTMENT MANAGEMENT FEE: For services provided under subparagraph
(b) of paragraph 1 of this Agreement, the Advisor agrees to pay the
Sub-Advisor a monthly Investment Management Fee. The Investment
Management Fee shall be equal to: (i) 50% of the monthly management fee
rate (including performance adjustments, if any) that the Portfolio is
obligated to pay the Advisor under its Management Contract with the
Advisor, multiplied by: (ii) the fraction equal to the net assets of the
Portfolio as to which the Sub-Advisor shall have provided investment
management services divided by the net assets of the Portfolio for that
month. If in any fiscal year the aggregate expenses of the Portfolio
exceed any applicable expense limitation imposed by any state or federal
securities laws or regulations, and the Advisor waives all or a portion
of its management fee or reimburses the Portfolio for expenses to the
extent required to satisfy such limitation, the Investment Management
Fee paid to the Sub-Advisor will be reduced by 50% of the amount of such
waivers or reimbursements multiplied by the fraction determined in (ii).
If the Sub-Advisor reduces its fees to reflect such waivers or
reimbursements and the Advisor subsequently recovers all or any portion
of such waivers and reimbursements, then the Sub-Advisor shall be
entitled to receive from the Advisor a proportionate share of the amount
recovered. To the extent that waivers and reimbursements by the Advisor
required by such limitations are in excess of the Advisor's management
fee, the Investment Management Fee paid to the Sub-Advisor will be
reduced to zero for that month, but in no event shall the Sub-Advisor be
required to reimburse the Advisor for all or a portion of such excess
reimbursements.
2
<PAGE>
(c) PROVISION OF MULTIPLE SERVICES: If the Sub-Advisor shall have
provided both investment advisory services under subparagraph (a) and
investment management services under subparagraph (b) of paragraph 1 for
the same portion of the investments of the Portfolio for the same
period, the fees paid to the Sub-Advisor with respect to such
investments shall be calculated exclusively under subparagraph (b) of
this paragraph 4.
5. EXPENSES: It is understood that the Portfolio will pay all of its
expenses other than those expressly stated to be payable by the Sub-Advisor
hereunder or by the Advisor under the Management Contract with the Portfolio,
which expenses payable by the Portfolio shall include, without limitation, (i)
interest and taxes; (ii) brokerage commissions and other costs in connection
with the purchase or sale of securities and other investment instruments; (iii)
fees and expenses of the Trust's Trustees other than those who are "interested
persons" of the Trust, the Sub-Advisor or the Advisor; (iv) legal and audit
expenses; (v) custodian, registrar and transfer agent fees and expenses; (vi)
fees and expenses related to the registration and qualification of the Trust and
the Portfolio's shares for distribution under state and federal securities laws;
(vii) expenses of printing and mailing reports and notices and proxy material to
shareholders of the Portfolio; (viii) all other expenses incidental to holding
meetings of the Portfolio's shareholders, including proxy solicitations
therefore; (ix) a pro rata share, based on relative net assets of the Portfolio
and other registered investment companies having Advisory and Service or
Management Contracts with the Advisor, of 50% of insurance premiums for fidelity
and other coverage; (x) its proportionate share of association membership dues;
(xi) expenses of typesetting for printing Prospectuses and Statements of
Additional Information and supplements thereto; (xii) expenses of printing and
mailing Prospectuses and Statements of Additional Information and supplements
thereto sent to existing shareholders; and (xiii) such non-recurring or
extraordinary expenses as may arise, including those relating to actions, suits
or proceedings to which the Portfolio is a party and the legal obligation which
the Portfolio may have to indemnify the Trust's Trustees and officers with
respect thereto.
6. INTERESTED PERSONS: It is understood that Trustees, officers, and
shareholders of the Trust are or may be or become interested in the Advisor or
the Sub-Advisor as directors, officers or otherwise and that directors, officers
and stockholders of the Advisor or the Sub-Advisor are or may be or become
similarly interested in the Trust, and that the Advisor or the Sub-Advisor may
be or become interested in the Trust as a shareholder or otherwise.
7. SERVICES TO OTHER COMPANIES OR ACCOUNTS: The services of the
Sub-Advisor to the Advisor are not to be deemed to be exclusive, the Sub-Advisor
being free to render services to others and engage in other activities,
provided, however, that such other services and activities do not, during the
term of this Agreement, interfere, in a material manner, with the Sub-Advisor's
ability to meet all of its obligations hereunder. The Sub-Advisor shall for all
purposes be an independent contractor and not an agent or employee of the
Advisor or the Trust.
8. STANDARD OF CARE: In the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of obligations or duties hereunder on the
part of the Sub-Advisor, the Sub-Advisor shall not be subject to liability to
the Advisor, the Trust or to any shareholder of the Portfolio for any act or
omission in the course of, or connected with, rendering services hereunder or
for any losses that may be sustained in the purchase, holding or sale of any
security.
9. DURATION AND TERMINATION OF AGREEMENT; AMENDMENTS:
(a) Subject to prior termination as provided in subparagraph (d) of
this paragraph 9, this Agreement shall continue in force until
July 31, 1999 and indefinitely thereafter, but only so long as
the continuance after such period shall be specifically approved
at least annually by vote of the Trust's Board of Trustees or by
vote of a majority of the outstanding voting securities of the
Portfolio.
(b) This Agreement may be modified by mutual consent of the Advisor,
the Sub-Advisor and the Portfolio subject to the provisions of
Section 15 of the 1940 Act, as modified by or interpreted by any
applicable order or orders of the Securities and Exchange
Commission (the "Commission") or any rules or regulations
adopted by, or interpretative releases of, the Commission.
(c) In addition to the requirements of subparagraphs (a) and (b) of
this paragraph 9, the terms of any continuance or modification
of this Agreement must have been approved by the vote of a
majority of those Trustees of the Trust who are not parties to
this Agreement or interested persons of any such party, cast in
person at a meeting called for the purpose of voting on such
approval.
3
<PAGE>
(d) Either the Advisor, the Sub-Advisor or the Portfolio may, at any
time on sixty (60) days' prior written notice to the other
parties, terminate this Agreement, without payment of any
penalty, by action of its Board of Trustees or Directors, or
with respect to the Portfolio by vote of a majority of its
outstanding voting securities. This Agreement shall terminate
automatically in the event of its assignment.
10. LIMITATION OF LIABILITY: The Sub-Advisor is hereby expressly put on
notice of the limitation of shareholder liability as set forth in the
Declaration of Trust or other organizational document of the Trust and agrees
that any obligations of the Trust or the Portfolio arising in connection with
this Agreement shall be limited in all cases to the Portfolio and its assets,
and the Sub-Advisor shall not seek satisfaction of any such obligation from the
shareholders or any shareholder of the Portfolio. Nor shall the Sub-Advisor seek
satisfaction of any such obligation from the Trustees or any individual Trustee.
11. GOVERNING LAW: This Agreement shall be governed by, and construed in
accordance with, the laws of the Commonwealth of Massachusetts, without giving
effect to the choice of laws provisions thereof.
The terms "registered investment company," "vote of a majority of the
outstanding voting securities," "assignment," and "interested persons," when
used herein, shall have the respective meanings specified in the 1940 Act as now
in effect or as hereafter amended.
IN WITNESS WHEREOF the parties hereto have caused this instrument to be
signed in their behalf by their respective officers thereunto duly authorized,
and their respective seals to be hereunto affixed, all as of the date written
above.
FIDELITY MANAGEMENT & RESEARCH (FAR EAST) INC.
BY:_____________________________________________________
Title
FIDELITY MANAGEMENT & RESEARCH COMPANY
BY: ___________________________________________
Title
FIDELITY ADVISOR SERIES I ON BEHALF OF
FIDELITY ADVISOR RETIREMENT GROWTH FUND
BY: ____________________________________________
Title
4
Exhibit 5 (ee)
FORM OF
MANAGEMENT CONTRACT
between
FIDELITY ADVISOR SERIES I:
FIDELITY ADVISOR ASSET ALLOCATION FUND
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
AGREEMENT made this __ day of ________ 1998, by and between Fidelity
Advisor Series I, a Massachusetts business trust which may issue one or more
series of shares of beneficial interest (hereinafter called the "Fund"), on
behalf of Fidelity Advisor Asset Allocation Fund (hereinafter called the
"Portfolio"), and Fidelity Management & Research Company, a Massachusetts
corporation (hereinafter called the "Adviser") as set forth in its entirety
below.
1. (a) Investment Advisory Services. The Adviser undertakes to act as
investment adviser of the Portfolio and shall, subject to the supervision of the
Fund's Board of Trustees, direct the investments of the Portfolio in accordance
with the investment objective, policies and limitations as provided in the
Portfolio's Prospectus or other governing instruments, as amended from time to
time, the Investment Company Act of 1940 and rules thereunder, as amended from
time to time (the "1940 Act"), and such other limitations as the Portfolio may
impose by notice in writing to the Adviser. The Adviser shall also furnish for
the use of the Portfolio office space and all necessary office facilities,
equipment and personnel for servicing the investments of the Portfolio; and
shall pay the salaries and fees of all officers of the Fund, of all Trustees of
the Fund who are "interested persons" of the Fund or of the Adviser and of all
personnel of the Fund or the Adviser performing services relating to research,
statistical and investment activities. The Adviser is authorized, in its
discretion and without prior consultation with the Portfolio, to buy, sell, lend
and otherwise trade in any stocks, bonds and other securities and investment
instruments on behalf of the Portfolio. The investment policies and all other
actions of the Portfolio are and shall at all times be subject to the control
and direction of the Fund's Board of Trustees.
(b) Management Services. The Adviser shall perform (or arrange for
the performance by its affiliates of) the management and administrative services
necessary for the operation of the Fund. The Adviser shall, subject to the
supervision of the Board of Trustees, perform various services for the
Portfolio, including but not limited to: (i) providing the Portfolio with office
space, equipment and facilities (which may be its own) for maintaining its
organization; (ii) on behalf of the Portfolio, supervising relations with, and
monitoring the performance of, custodians, depositories, transfer and pricing
agents, accountants, attorneys, underwriters, brokers and dealers, insurers and
other persons in any capacity deemed to be necessary or desirable; (iii)
preparing all general shareholder communications, including shareholder reports;
(iv) conducting shareholder relations; (v) maintaining the Fund's existence and
its records; (vi) during such times as shares are publicly offered, maintaining
the registration and qualification of the Portfolio's shares under federal and
state law; and (vii) investigating the development of and developing and
implementing, if appropriate, management and shareholder services designed to
enhance the value or convenience of the Portfolio as an investment vehicle.
The Adviser shall also furnish such reports, evaluations, information or
analyses to the Fund as the Fund's Board of Trustees may request from time to
time or as the Adviser may deem to be desirable. The Adviser shall make
recommendations to the Fund's Board of Trustees with respect to Fund policies,
and shall carry out such policies as are adopted by the Trustees. The Adviser
shall, subject to review by the Board of Trustees, furnish such other services
as the Adviser shall from time to time determine to be necessary or useful to
perform its obligations under this Contract.
(c) The Adviser shall place all orders for the purchase and sale of
portfolio securities for the Portfolio's account with brokers or dealers
selected by the Adviser, which may include brokers or dealers affiliated with
the Adviser. The Adviser shall use its best efforts to seek to execute portfolio
transactions at prices which are advantageous to the Portfolio and at commission
rates which are reasonable in relation to the benefits received. In selecting
brokers or dealers qualified to execute a particular transaction, brokers or
dealers may be selected who also provide brokerage and research services (as
those terms are defined in Section 28(e) of the Securities Exchange Act of 1934)
<PAGE>
to the Portfolio and/or the other accounts over which the Adviser or its
affiliates exercise investment discretion. The Adviser is authorized to pay a
broker or dealer who provides such brokerage and research services a commission
for executing a portfolio transaction for the Portfolio which is in excess of
the amount of commission another broker or dealer would have charged for
effecting that transaction if the Adviser determines in good faith that such
amount of commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer. This determination may be
viewed in terms of either that particular transaction or the overall
responsibilities which the Adviser and its affiliates have with respect to
accounts over which they exercise investment discretion. The Trustees of the
Fund shall periodically review the commissions paid by the Portfolio to
determine if the commissions paid over representative periods of time were
reasonable in relation to the benefits to the Portfolio.
The Adviser shall, in acting hereunder, be an independent contractor.
The Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of the
Fund are or may be or become interested in the Adviser as directors, officers or
otherwise and that directors, officers and stockholders of the Adviser are or
may be or become similarly interested in the Fund, and that the Adviser may be
or become interested in the Fund as a shareholder or otherwise.
3. The Adviser will be compensated on the following basis for the
services and facilities to be furnished hereunder. The Adviser shall receive a
monthly management fee, payable monthly as soon as practicable after the last
day of each month, composed of a Group Fee and an Individual Fund Fee.
(a) Group Fee Rate. The Group Fee Rate shall be based upon the monthly
average of the net assets of the registered investment companies having Advisory
and Service or Management Contracts with the Adviser (computed in the manner set
forth in the fund's Declaration of Trust or other organizational document)
determined as of the close of business on each business day throughout the
month. The Group Fee Rate shall be determined on a cumulative basis pursuant to
the following schedule:
AVERAGE NET ASSETS ANNUALIZED FEE RATE (FOR EACH LEVEL)
0 - $ 3 billion .5200%
3 - 6 .4900
6 - 9 .4600
9 - 12 .4300
12 - 15 .4000
15 - 18 .3850
18 - 21 .3700
21 - 24 .3600
24 - 30 .3500
30 - 36 .3450
36 - 42 .3400
42 - 48 .3350
48 - 66 .3250
66 - 84 .3200
84 - 102 .3150
2
<PAGE>
102 - 138 .3100
138 - 174 .3050
174 - 210 .3000
210 - 246 .2950
246 - 282 .2900
282 - 318 .2850
318 - 354 .2800
354 - 390 .2750
390 - 426 .2700
426 - 462 .2650
462 - 498 .2600
498 - 534 .2550
Over - 534 .2500
(b) Individual Fund Fee Rate. The Individual Fund Fee Rate shall be .30%.
The sum of the Group Fee Rate, calculated as described above to the
nearest millionth, and the Individual Fund Fee Rate shall constitute the Annual
Management Fee Rate. One-twelfth of the Annual Management Fee Rate shall be
applied to the average of the net assets of the Portfolio (computed in the
manner set forth in the Fund's Declaration of Trust or other organizational
document) determined as of the close of business on each business day throughout
the month.
(c) In case of termination of this Contract during any month, the fee for
that month shall be reduced proportionately on the basis of the number of
business days during which it is in effect, and the fee computed upon the
average net assets for the business days it is so in effect for that month.
4. It is understood that the Portfolio will pay all its expenses, which
expenses payable by the Portfolio shall include, without limitation, (i)
interest and taxes; (ii) brokerage commissions and other costs in connection
with the purchase or sale of securities and other investment instruments; (iii)
fees and expenses of the Fund's Trustees other than those who are "interested
persons" of the Fund or the Adviser; (iv) legal and audit expenses; (v)
custodian, registrar and transfer agent fees and expenses; (vi) fees and
expenses related to the registration and qualification of the Fund and the
Portfolio's shares for distribution under state and federal securities laws;
(vii) expenses of printing and mailing reports and notices and proxy material to
shareholders of the Portfolio; (viii) all other expenses incidental to holding
meetings of the Portfolio's shareholders, including proxy solicitations
therefor; (ix) a pro rata share, based on relative net assets of the Portfolio
and other registered investment companies having Advisory and Service or
Management Contracts with the Adviser, of 50% of insurance premiums for fidelity
and other coverage; (x) its proportionate share of association membership dues;
(xi) expenses of typesetting for printing Prospectuses and Statements of
Additional Information and supplements thereto; (xii) expenses of printing and
mailing Prospectuses and Statements of Additional Information and supplements
thereto sent to existing shareholders; and (xiii) such non-recurring or
extraordinary expenses as may arise, including those relating to actions, suits
or proceedings to which the Portfolio is a party and the legal obligation which
the Portfolio may have to indemnify the Fund's Trustees and officers with
respect thereto.
5. The services of the Adviser to the Portfolio are not to be deemed
exclusive, the Adviser being free to render services to others and engage in
other activities, provided, however, that such other services and activities do
not, during the term of this Contract, interfere, in a material manner, with the
Adviser's ability to meet all of its obligations with respect to rendering
services to the Portfolio hereunder. In the absence of willful misfeasance, bad
3
<PAGE>
faith, gross negligence or reckless disregard of obligations or duties hereunder
on the part of the Adviser, the Adviser shall not be subject to liability to the
Portfolio or to any shareholder of the Portfolio for any act or omission in the
course of, or connected with, rendering services hereunder or for any losses
that may be sustained in the purchase, holding or sale of any security or other
investment instrument.
6. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 6, this Contract shall continue in force until July 31, 1999 and
indefinitely thereafter, but only so long as the continuance after such date
shall be specifically approved at least annually by vote of the Trustees of the
Fund or by vote of a majority of the outstanding voting securities of the
Portfolio.
(b) This Contract may be modified by mutual consent subject to the
provisions of Section 15 of the 1940 Act, as modified by or interpreted by any
applicable order or orders of the Securities and Exchange Commission (the
"Commission") or any rules or regulations adopted by, or interpretative releases
of, the Commission.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of
this paragraph 6, the terms of any continuance or modification of this Contract
must have been approved by the vote of a majority of those Trustees of the Fund
who are not parties to the Contract or interested persons of any such party,
cast in person at a meeting called for the purpose of voting on such approval.
(d) Either party hereto may, at any time on sixty (60) days' prior
written notice to the other, terminate this Contract, without payment of any
penalty, by action of its Trustees or Board of Directors, as the case may be, or
with respect to the Portfolio by vote of a majority of the outstanding voting
securities of the Portfolio. This Contract shall terminate automatically in the
event of its assignment.
7. The Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Fund's Declaration of Trust or other
organizational document and agrees that the obligations assumed by the Fund
pursuant to this Contract shall be limited in all cases to the Portfolio and its
assets, and the Adviser shall not seek satisfaction of any such obligation from
the shareholders or any shareholder of the Portfolio or any other Portfolios of
the Fund. In addition, the Adviser shall not seek satisfaction of any such
obligations from the Trustees or any individual Trustee. The Adviser understands
that the rights and obligations of any Portfolio under the Declaration of Trust
or other organizational document are separate and distinct from those of any and
all other Portfolios.
8. This Agreement shall be governed by, and construed in accordance
with, the laws of the Commonwealth of Massachusetts, without giving effect to
the choice of laws provisions thereof.
The terms "vote of a majority of the outstanding voting securities,"
"assignment," and "interested persons," when used herein, shall have the
respective meanings specified in the 1940 Act, as now in effect or as hereafter
amended, and subject to such orders as may be granted by the Commission.
IN WITNESS WHEREOF the parties have caused this instrument to be signed
in their behalf by their respective officers thereunto duly authorized, and
their respective seals to be hereunto affixed, all as of the date written above.
FIDELITY ADVISOR SERIES I
on behalf of Fidelity Advisor Asset Allocation Fund
By _________________________________________
Senior Vice President
FIDELITY MANAGEMENT & RESEARCH COMPANY
By _________________________________________
President
4
Exhibit 5 (ff)
FORM OF
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY MANAGEMENT & RESEARCH COMPANY
AND
FIDELITY MANAGEMENT & RESEARCH (U.K.) INC.
AND
FIDELITY ADVISOR SERIES I ON BEHALF OF
FIDELITY ADVISOR ASSET ALLOCATION FUND
AGREEMENT made this ___ day of ________, 1998, by and between Fidelity
Management & Research Company, a Massachusetts corporation with principal
offices at 82 Devonshire Street, Boston, Massachusetts (hereinafter called the
"Advisor"); Fidelity Management & Research (U.K.) Inc. (hereinafter called the
"Sub-Advisor"); and Fidelity Advisor Series I, a Massachusetts business trust
which may issue one or more series of shares of beneficial interest (hereinafter
called the "Trust") on behalf of Fidelity Advisor Asset Allocation Fund
(hereinafter called the "Portfolio").
WHEREAS the Trust and the Advisor have entered into a Management
Contract on behalf of the Portfolio, pursuant to which the Advisor is to act as
investment manager of the Portfolio; and
WHEREAS the Sub-Advisor and its subsidiaries and other affiliated
persons have personnel in various locations throughout the world and have been
formed in part for the purpose of researching and compiling information and
recommendations with respect to the economies of various countries, and
securities of issuers located in such countries, and providing investment
advisory services in connection therewith;
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the Trust, the Advisor and the Sub-Advisor agree as
follows:
1. DUTIES: The Advisor may, in its discretion, appoint the Sub-Advisor
to perform one or more of the following services with respect to all or a
portion of the investments of the Portfolio. The services and the portion of the
investments of the Portfolio to be advised or managed by the Sub-Advisor shall
be as agreed upon from time to time by the Advisor and the Sub-Advisor. The
Sub-Advisor shall pay the salaries and fees of all personnel of the Sub-Advisor
performing services for the Portfolio relating to research, statistical and
investment activities.
(a) INVESTMENT ADVICE: If and to the extent requested by the Advisor,
the Sub-Advisor shall provide investment advice to the Portfolio and the
Advisor with respect to all or a portion of the investments of the
Portfolio, and in connection with such advice shall furnish the
Portfolio and the Advisor such factual information, research reports and
investment recommendations as the Advisor may reasonably require. Such
information may include written and oral reports and analyses.
(b) INVESTMENT MANAGEMENT: If and to the extent requested by the
Advisor, the Sub-Advisor shall, subject to the supervision of the
Advisor, manage all or a portion of the investments of the Portfolio in
accordance with the investment objective, policies and limitations
provided in the Portfolio's Prospectus or other governing instruments,
as amended from time to time, the Investment Company Act of 1940 (the
"1940 Act") and rules thereunder, as amended from time to time, and such
other limitations as the Trust or Advisor may impose with respect to the
Portfolio by notice to the Sub-Advisor. With respect to the portion of
the investments of the Portfolio under its management, the Sub-Advisor
is authorized to make investment decisions on behalf of the Portfolio
with regard to any stock, bond, other security or investment instrument,
and to place orders for the purchase and sale of such securities through
such broker-dealers as the Sub-Advisor may select. The Sub-Advisor may
also be authorized, but only to the extent such duties are delegated in
writing by the Advisor, to provide additional investment management
services to the Portfolio, including but not limited to services such as
managing foreign currency investments, purchasing and selling or writing
futures and options contracts, borrowing money or lending securities on
behalf of the Portfolio. All investment management and any other
activities of the Sub-Advisor shall at all times be subject to the
control and direction of the Advisor and the Trust's Board of Trustees.
<PAGE>
(c) SUBSIDIARIES AND AFFILIATES: The Sub-Advisor may perform any or all
of the services contemplated by this Agreement directly or through such
of its subsidiaries or other affiliated persons as the Sub-Advisor shall
determine; provided, however, that performance of such services through
such subsidiaries or other affiliated persons shall have been approved
by the Trust to the extent required pursuant to the 1940 Act and rules
thereunder.
2. INFORMATION TO BE PROVIDED TO THE TRUST AND THE ADVISOR: The
Sub-Advisor shall furnish such reports, evaluations, information or analyses to
the Trust and the Advisor as the Trust's Board of Trustees or the Advisor may
reasonably request from time to time, or as the Sub-Advisor may deem to be
desirable.
3. BROKERAGE: In connection with the services provided under
subparagraph (b) of paragraph 1 of this Agreement, the Sub-Advisor shall place
all orders for the purchase and sale of portfolio securities for the Portfolio's
account with brokers or dealers selected by the Sub-Advisor, which may include
brokers or dealers affiliated with the Advisor or Sub-Advisor. The Sub-Advisor
shall use its best efforts to seek to execute portfolio transactions at prices
which are advantageous to the Portfolio and at commission rates which are
reasonable in relation to the benefits received. In selecting brokers or dealers
qualified to execute a particular transaction, brokers or dealers may be
selected who also provide brokerage and research services (as those terms are
defined in Section 28(e) of the Securities Exchange Act of l934) to the
Portfolio and/or to the other accounts over which the Sub-Advisor or Advisor
exercise investment discretion. The Sub-Advisor is authorized to pay a broker or
dealer who provides such brokerage and research services a commission for
executing a portfolio transaction for the Portfolio which is in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction if the Sub-Advisor determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer. This determination may be viewed in
terms of either that particular transaction or the overall responsibilities
which the Sub-Advisor has with respect to accounts over which it exercises
investment discretion. The Trustees of the Trust shall periodically review the
commissions paid by the Portfolio to determine if the commissions paid over
representative periods of time were reasonable in relation to the benefits to
the Portfolio.
4. COMPENSATION: The Advisor shall compensate the Sub-Advisor on the
following basis for the services to be furnished hereunder.
(a) INVESTMENT ADVISORY FEE: For services provided under subparagraph
(a) of paragraph 1 of this Agreement, the Advisor agrees to pay the
Sub-Advisor a monthly Sub-Advisory Fee. The Sub-Advisory Fee shall be
equal to 110% of the Sub-Advisor's costs incurred in connection with
rendering the services referred to in subparagraph (a) of paragraph 1 of
this Agreement. The Sub-Advisory Fee shall not be reduced to reflect
expense reimbursements or fee waivers by the Advisor, if any, in effect
from time to time.
(b) INVESTMENT MANAGEMENT FEE: For services provided under subparagraph
(b) of paragraph 1 of this Agreement, the Advisor agrees to pay the
Sub-Advisor a monthly Investment Management Fee. The Investment
Management Fee shall be equal to: (i) 50% of the monthly management fee
rate (including performance adjustments, if any) that the Portfolio is
obligated to pay the Advisor under its Management Contract with the
Advisor, multiplied by: (ii) the fraction equal to the net assets of the
Portfolio as to which the Sub-Advisor shall have provided investment
management services divided by the net assets of the Portfolio for that
month. If in any fiscal year the aggregate expenses of the Portfolio
exceed any applicable expense limitation imposed by any state or federal
securities laws or regulations, and the Advisor waives all or a portion
of its management fee or reimburses the Portfolio for expenses to the
extent required to satisfy such limitation, the Investment Management
Fee paid to the Sub-Advisor will be reduced by 50% of the amount of such
waivers or reimbursements multiplied by the fraction determined in (ii).
If the Sub-Advisor reduces its fees to reflect such waivers or
reimbursements and the Advisor subsequently recovers all or any portion
of such waivers or reimbursements, then the Sub-Advisor shall be
entitled to receive from the Advisor a proportionate share of the amount
recovered. To the extent that waivers and reimbursements by the Advisor
required by such limitations are in excess of the Advisor's management
fee, the Investment Management Fee paid to the Sub-Advisor will be
reduced to zero for that month, but in no event shall the Sub-Advisor be
required to reimburse the Advisor for all or a portion of such excess
reimbursements.
2
<PAGE>
(c) PROVISION OF MULTIPLE SERVICES: If the Sub-Advisor shall have
provided both investment advisory services under subparagraph (a) and
investment management services under subparagraph (b) of paragraph (1)
for the same portion of the investments of the Portfolio for the same
period, the fees paid to the Sub-Advisor with respect to such
investments shall be calculated exclusively under subparagraph (b) of
this paragraph 4.
5. EXPENSES: It is understood that the Portfolio will pay all of its
expenses other than those expressly stated to be payable by the Sub-Advisor
hereunder or by the Advisor under the Management Contract with the Portfolio,
which expenses payable by the Portfolio shall include, without limitation, (i)
interest and taxes; (ii) brokerage commissions and other costs in connection
with the purchase or sale of securities and other investment instruments; (iii)
fees and expenses of the Trust's Trustees other than those who are "interested
persons" of the Trust, the Sub-Advisor or the Advisor; (iv) legal and audit
expenses; (v) custodian, registrar and transfer agent fees and expenses; (vi)
fees and expenses related to the registration and qualification of the Trust and
the Portfolio's shares for distribution under state and federal securities laws;
(vii) expenses of printing and mailing reports and notices and proxy material to
shareholders of the Portfolio; (viii) all other expenses incidental to holding
meetings of the Portfolio's shareholders, including proxy solicitations
therefore; (ix) a pro rata share, based on relative net assets of the Portfolio
and other registered investment companies having Advisory and Service or
Management Contracts with the Advisor, of 50% of insurance premiums for fidelity
and other coverage; (x) its proportionate share of association membership dues;
(xi) expenses of typesetting for printing Prospectuses and Statements of
Additional Information and supplements thereto; (xii) expenses of printing and
mailing Prospectuses and Statements of Additional Information and supplements
thereto sent to existing shareholders; and (xiii) such non-recurring or
extraordinary expenses as may arise, including those relating to actions, suits
or proceedings to which the Portfolio is a party and the legal obligation which
the Portfolio may have to indemnify the Trust's Trustees and officers with
respect thereto.
6. INTERESTED PERSONS: It is understood that Trustees, officers, and
shareholders of the Trust are or may be or become interested in the Advisor or
the Sub-Advisor as directors, officers or otherwise and that directors, officers
and stockholders of the Advisor or the Sub-Advisor are or may be or become
similarly interested in the Trust, and that the Advisor or the Sub-Advisor may
be or become interested in the Trust as a shareholder or otherwise.
7. SERVICES TO OTHER COMPANIES OR ACCOUNTS: The services of the
Sub-Advisor to the Advisor are not to be deemed to be exclusive, the Sub-Advisor
being free to render services to others and engage in other activities,
provided, however, that such other services and activities do not, during the
term of this Agreement, interfere, in a material manner, with the Sub-Advisor's
ability to meet all of its obligations hereunder. The Sub-Advisor shall for all
purposes be an independent contractor and not an agent or employee of the
Advisor or the Trust.
8. STANDARD OF CARE: In the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of obligations or duties hereunder on the
part of the Sub-Advisor, the Sub-Advisor shall not be subject to liability to
the Advisor, the Trust or to any shareholder of the Portfolio for any act or
omission in the course of, or connected with, rendering services hereunder or
for any losses that may be sustained in the purchase, holding or sale of any
security.
9. DURATION AND TERMINATION OF AGREEMENT; AMENDMENTS:
(a) Subject to prior termination as provided in subparagraph (d) of
this paragraph 9, this Agreement shall continue in force until
July 31, 1999 and indefinitely thereafter, but only so long as
the continuance after such period shall be specifically approved
at least annually by vote of the Trust's Board of Trustees or by
vote of a majority of the outstanding voting securities of the
Portfolio.
(b) This Agreement may be modified by mutual consent of the Advisor,
the Sub-Advisor and the Portfolio subject to the provisions of
Section 15 of the 1940 Act, as modified by or interpreted by any
applicable order or orders of the Securities and Exchange
Commission (the "Commission") or any rules or regulations
adopted by, or interpretative releases of, the Commission.
3
<PAGE>
(c) In addition to the requirements of subparagraphs (a) and (b) of
this paragraph 9, the terms of any continuance or modification
of this Agreement must have been approved by the vote of a
majority of those Trustees of the Trust who are not parties to
this Agreement or interested persons of any such party, cast in
person at a meeting called for the purpose of voting on such
approval.
(d) Either the Advisor, the Sub-Advisor or the Portfolio may, at any
time on sixty (60) days' prior written notice to the other
parties, terminate this Agreement, without payment of any
penalty, by action of its Board of Trustees or Directors, or
with respect to the Portfolio by vote of a majority of its
outstanding voting securities. This Agreement shall terminate
automatically in the event of its assignment.
10. LIMITATION OF LIABILITY: The Sub-Advisor is hereby expressly put on
notice of the limitation of shareholder liability as set forth in the
Declaration of Trust or other organizational document of the Trust and agrees
that any obligations of the Trust or the Portfolio arising in connection with
this Agreement shall be limited in all cases to the Portfolio and its assets,
and the Sub-Advisor shall not seek satisfaction of any such obligation from the
shareholders or any shareholder of the Portfolio. Nor shall the Sub-Advisor seek
satisfaction of any such obligation from the Trustees or any individual Trustee.
11. GOVERNING LAW: This Agreement shall be governed by, and construed in
accordance with, the laws of the Commonwealth of Massachusetts, without giving
effect to the choice of laws provisions thereof.
The terms "registered investment company," "vote of a majority of the
outstanding voting securities," "assignment," and "interested persons," when
used herein, shall have the respective meanings specified in the 1940 Act as now
in effect or as hereafter amended.
IN WITNESS WHEREOF the parties hereto have caused this instrument to be
signed in their behalf by their respective officers thereunto duly authorized,
and their respective seals to be hereunto affixed, all as of the date written
above.
FIDELITY MANAGEMENT & RESEARCH (U.K.) INC.
BY:___________________________________________
Title
FIDELITY MANAGEMENT & RESEARCH COMPANY
BY: ___________________________________________
Title
FIDELITY ADVISOR SERIES I ON BEHALF OF
FIDELITY ADVISOR ASSET ALLOCATION FUND
BY: ____________________________________________
Title
4
Exhibit 5 (gg)
FORM OF
SUB-ADVISORY AGREEMENT
BETWEEN
FIDELITY MANAGEMENT & RESEARCH COMPANY
AND
FIDELITY MANAGEMENT & RESEARCH (FAR EAST) INC.
AND
FIDELITY ADVISOR SERIES I ON BEHALF OF
FIDELITY ADVISOR ASSET ALLOCATION FUND
AGREEMENT made this ___ day of ________, 1998, by and between Fidelity
Management & Research Company, a Massachusetts corporation with principal
offices at 82 Devonshire Street, Boston, Massachusetts (hereinafter called the
"Advisor"); Fidelity Management & Research (Far East) Inc. (hereinafter called
the "Sub-Advisor"); and Fidelity Advisor Series I, a Massachusetts business
trust which may issue one or more series of shares of beneficial interest
(hereinafter called the "Trust") on behalf of Fidelity Advisor Asset Allocation
Fund (hereinafter called the "Portfolio").
WHEREAS the Trust and the Advisor have entered into a Management
Contract on behalf of the Portfolio, pursuant to which the Advisor is to act as
investment manager of the Portfolio; and
WHEREAS the Sub-Advisor and its subsidiaries and other affiliated
persons have personnel in various locations throughout the world and have been
formed in part for the purpose of researching and compiling information and
recommendations with respect to the economies of various countries, and
securities of issuers located in such countries, and providing investment
advisory services in connection therewith;
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the Trust, the Advisor and the Sub-Advisor agree as
follows:
1. DUTIES: The Advisor may, in its discretion, appoint the Sub-Advisor
to perform one or more of the following services with respect to all or a
portion of the investments of the Portfolio. The services and the portion of the
investments of the Portfolio to be advised or managed by the Sub-Advisor shall
be as agreed upon from time to time by the Advisor and the Sub-Advisor. The
Sub-Advisor shall pay the salaries and fees of all personnel of the Sub-Advisor
performing services for the Portfolio relating to research, statistical and
investment activities.
(a) INVESTMENT ADVICE: If and to the extent requested by the Advisor,
the Sub-Advisor shall provide investment advice to the Portfolio and the
Advisor with respect to all or a portion of the investments of the
Portfolio, and in connection with such advice shall furnish the
Portfolio and the Advisor such factual information, research reports and
investment recommendations as the Advisor may reasonably require. Such
information may include written and oral reports and analyses.
(b) INVESTMENT MANAGEMENT: If and to the extent requested by the
Advisor, the Sub-Advisor shall, subject to the supervision of the
Advisor, manage all or a portion of the investments of the Portfolio in
accordance with the investment objective, policies and limitations
provided in the Portfolio's Prospectus or other governing instruments,
as amended from time to time, the Investment Company Act of 1940 (the
"1940 Act") and rules thereunder, as amended from time to time, and such
other limitations as the Trust or Advisor may impose with respect to the
Portfolio by notice to the Sub-Advisor. With respect to the portion of
the investments of the Portfolio under its management, the Sub-Advisor
is authorized to make investment decisions on behalf of the Portfolio
with regard to any stock, bond, other security or investment instrument,
and to place orders for the purchase and sale of such securities through
such broker-dealers as the Sub-Advisor may select. The Sub-Advisor may
also be authorized, but only to the extent such duties are delegated in
writing by the Advisor, to provide additional investment management
services to the Portfolio, including but not limited to services such as
managing foreign currency investments, purchasing and selling or writing
futures and options contracts, borrowing money, or lending securities on
behalf of the Portfolio. All investment management and any other
activities of the Sub-Advisor shall at all times be subject to the
control and direction of the Advisor and the Trust's Board of Trustees.
<PAGE>
(c) SUBSIDIARIES AND AFFILIATES: The Sub-Advisor may perform any or all
of the services contemplated by this Agreement directly or through such
of its subsidiaries or other affiliated persons as the Sub-Advisor shall
determine; provided, however, that performance of such services through
such subsidiaries or other affiliated persons shall have been approved
by the Trust to the extent required pursuant to the 1940 Act and rules
thereunder.
2. INFORMATION TO BE PROVIDED TO THE TRUST AND THE ADVISOR: The
Sub-Advisor shall furnish such reports, evaluations, information or analyses to
the Trust and the Advisor as the Trust's Board of Trustees or the Advisor may
reasonably request from time to time, or as the Sub-Advisor may deem to be
desirable.
3. BROKERAGE: In connection with the services provided under
subparagraph (b) of paragraph 1 of this Agreement, the Sub-Advisor shall place
all orders for the purchase and sale of portfolio securities for the Portfolio's
account with brokers or dealers selected by the Sub-Advisor, which may include
brokers or dealers affiliated with the Advisor or Sub-Advisor. The Sub-Advisor
shall use its best efforts to seek to execute portfolio transactions at prices
which are advantageous to the Portfolio and at commission rates which are
reasonable in relation to the benefits received. In selecting brokers or dealers
qualified to execute a particular transaction, brokers or dealers may be
selected who also provide brokerage and research services (as those terms are
defined in Section 28(e) of the Securities Exchange Act of l934) to the
Portfolio and/or to the other accounts over which the Sub-Advisor or Advisor
exercise investment discretion. The Sub-Advisor is authorized to pay a broker or
dealer who provides such brokerage and research services a commission for
executing a portfolio transaction for the Portfolio which is in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction if the Sub-Advisor determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer. This determination may be viewed in
terms of either that particular transaction or the overall responsibilities
which the Sub-Advisor has with respect to accounts over which it exercises
investment discretion. The Trustees of the Trust shall periodically review the
commissions paid by the Portfolio to determine if the commissions paid over
representative periods of time were reasonable in relation to the benefits to
the Portfolio.
4. COMPENSATION: The Advisor shall compensate the Sub-Advisor on the
following basis for the services to be furnished hereunder.
(a) INVESTMENT ADVISORY FEE: For services provided under subparagraph
(a) of paragraph 1 of this Agreement, the Advisor agrees to pay the
Sub-Advisor a monthly Sub-Advisory Fee. The Sub-Advisory Fee shall be
equal to 105% of the Sub-Advisor's costs incurred in connection with
rendering the services referred to in subparagraph (a) of paragraph 1 of
this Agreement. The Sub-Advisory Fee shall not be reduced to reflect
expense reimbursements or fee waivers by the Advisor, if any, in effect
from time to time.
(b) INVESTMENT MANAGEMENT FEE: For services provided under subparagraph
(b) of paragraph 1 of this Agreement, the Advisor agrees to pay the
Sub-Advisor a monthly Investment Management Fee. The Investment
Management Fee shall be equal to: (i) 50% of the monthly management fee
rate (including performance adjustments, if any) that the Portfolio is
obligated to pay the Advisor under its Management Contract with the
Advisor, multiplied by: (ii) the fraction equal to the net assets of the
Portfolio as to which the Sub-Advisor shall have provided investment
management services divided by the net assets of the Portfolio for that
month. If in any fiscal year the aggregate expenses of the Portfolio
exceed any applicable expense limitation imposed by any state or federal
securities laws or regulations, and the Advisor waives all or a portion
of its management fee or reimburses the Portfolio for expenses to the
extent required to satisfy such limitation, the Investment Management
Fee paid to the Sub-Advisor will be reduced by 50% of the amount of such
waivers or reimbursements multiplied by the fraction determined in (ii).
If the Sub-Advisor reduces its fees to reflect such waivers or
reimbursements and the Advisor subsequently recovers all or any portion
of such waivers and reimbursements, then the Sub-Advisor shall be
entitled to receive from the Advisor a proportionate share of the amount
recovered. To the extent that waivers and reimbursements by the Advisor
required by such limitations are in excess of the Advisor's management
fee, the Investment Management Fee paid to the Sub-Advisor will be
reduced to zero for that month, but in no event shall the Sub-Advisor be
2
<PAGE>
required to reimburse the Advisor for all or a portion of such excess
reimbursements.
(c) PROVISION OF MULTIPLE SERVICES: If the Sub-Advisor shall have
provided both investment advisory services under subparagraph (a) and
investment management services under subparagraph (b) of paragraph 1 for
the same portion of the investments of the Portfolio for the same
period, the fees paid to the Sub-Advisor with respect to such
investments shall be calculated exclusively under subparagraph (b) of
this paragraph 4.
5. EXPENSES: It is understood that the Portfolio will pay all of its
expenses other than those expressly stated to be payable by the Sub-Advisor
hereunder or by the Advisor under the Management Contract with the Portfolio,
which expenses payable by the Portfolio shall include, without limitation, (i)
interest and taxes; (ii) brokerage commissions and other costs in connection
with the purchase or sale of securities and other investment instruments; (iii)
fees and expenses of the Trust's Trustees other than those who are "interested
persons" of the Trust, the Sub-Advisor or the Advisor; (iv) legal and audit
expenses; (v) custodian, registrar and transfer agent fees and expenses; (vi)
fees and expenses related to the registration and qualification of the Trust and
the Portfolio's shares for distribution under state and federal securities laws;
(vii) expenses of printing and mailing reports and notices and proxy material to
shareholders of the Portfolio; (viii) all other expenses incidental to holding
meetings of the Portfolio's shareholders, including proxy solicitations
therefore; (ix) a pro rata share, based on relative net assets of the Portfolio
and other registered investment companies having Advisory and Service or
Management Contracts with the Advisor, of 50% of insurance premiums for fidelity
and other coverage; (x) its proportionate share of association membership dues;
(xi) expenses of typesetting for printing Prospectuses and Statements of
Additional Information and supplements thereto; (xii) expenses of printing and
mailing Prospectuses and Statements of Additional Information and supplements
thereto sent to existing shareholders; and (xiii) such non-recurring or
extraordinary expenses as may arise, including those relating to actions, suits
or proceedings to which the Portfolio is a party and the legal obligation which
the Portfolio may have to indemnify the Trust's Trustees and officers with
respect thereto.
6. INTERESTED PERSONS: It is understood that Trustees, officers, and
shareholders of the Trust are or may be or become interested in the Advisor or
the Sub-Advisor as directors, officers or otherwise and that directors, officers
and stockholders of the Advisor or the Sub-Advisor are or may be or become
similarly interested in the Trust, and that the Advisor or the Sub-Advisor may
be or become interested in the Trust as a shareholder or otherwise.
7. SERVICES TO OTHER COMPANIES OR ACCOUNTS: The services of the
Sub-Advisor to the Advisor are not to be deemed to be exclusive, the Sub-Advisor
being free to render services to others and engage in other activities,
provided, however, that such other services and activities do not, during the
term of this Agreement, interfere, in a material manner, with the Sub-Advisor's
ability to meet all of its obligations hereunder. The Sub-Advisor shall for all
purposes be an independent contractor and not an agent or employee of the
Advisor or the Trust.
8. STANDARD OF CARE: In the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of obligations or duties hereunder on the
part of the Sub-Advisor, the Sub-Advisor shall not be subject to liability to
the Advisor, the Trust or to any shareholder of the Portfolio for any act or
omission in the course of, or connected with, rendering services hereunder or
for any losses that may be sustained in the purchase, holding or sale of any
security.
9. DURATION AND TERMINATION OF AGREEMENT; AMENDMENTS:
(a) Subject to prior termination as provided in subparagraph (d) of
this paragraph 9, this Agreement shall continue in force until
July 31, 1999 and indefinitely thereafter, but only so long as
the continuance after such period shall be specifically approved
at least annually by vote of the Trust's Board of Trustees or by
vote of a majority of the outstanding voting securities of the
Portfolio.
(b) This Agreement may be modified by mutual consent of the Advisor,
the Sub-Advisor and the Portfolio subject to the provisions of
Section 15 of the 1940 Act, as modified by or interpreted by any
applicable order or orders of the Securities and Exchange
3
<PAGE>
Commission (the "Commission") or any rules or regulations
adopted by, or interpretative releases of, the Commission.
(c) In addition to the requirements of subparagraphs (a) and (b) of
this paragraph 9, the terms of any continuance or modification
of this Agreement must have been approved by the vote of a
majority of those Trustees of the Trust who are not parties to
this Agreement or interested persons of any such party, cast in
person at a meeting called for the purpose of voting on such
approval.
(d) Either the Advisor, the Sub-Advisor or the Portfolio may, at any
time on sixty (60) days' prior written notice to the other
parties, terminate this Agreement, without payment of any
penalty, by action of its Board of Trustees or Directors, or
with respect to the Portfolio by vote of a majority of its
outstanding voting securities. This Agreement shall terminate
automatically in the event of its assignment.
10. LIMITATION OF LIABILITY: The Sub-Advisor is hereby expressly put on
notice of the limitation of shareholder liability as set forth in the
Declaration of Trust or other organizational document of the Trust and agrees
that any obligations of the Trust or the Portfolio arising in connection with
this Agreement shall be limited in all cases to the Portfolio and its assets,
and the Sub-Advisor shall not seek satisfaction of any such obligation from the
shareholders or any shareholder of the Portfolio. Nor shall the Sub-Advisor seek
satisfaction of any such obligation from the Trustees or any individual Trustee.
11. GOVERNING LAW: This Agreement shall be governed by, and construed in
accordance with, the laws of the Commonwealth of Massachusetts, without giving
effect to the choice of laws provisions thereof.
The terms "registered investment company," "vote of a majority of the
outstanding voting securities," "assignment," and "interested persons," when
used herein, shall have the respective meanings specified in the 1940 Act as now
in effect or as hereafter amended.
IN WITNESS WHEREOF the parties hereto have caused this instrument to be
signed in their behalf by their respective officers thereunto duly authorized,
and their respective seals to be hereunto affixed, all as of the date written
above.
FIDELITY MANAGEMENT & RESEARCH (FAR EAST) INC.
BY:_____________________________________________________
Title
FIDELITY MANAGEMENT & RESEARCH COMPANY
BY: ___________________________________________
Title
FIDELITY ADVISOR SERIES I ON BEHALF OF
FIDELITY ADVISOR ASSET ALLOCATION FUND
BY: ____________________________________________
Title
4
Exhibit 6(k)
FORM OF
GENERAL DISTRIBUTION AGREEMENT
between
FIDELITY ADVISOR SERIES I
and
FIDELITY DISTRIBUTORS CORPORATION
Agreement made this ___ day of , 1998, between Fidelity Advisor Series
I, a Massachusetts business trust having its principal place of business in
Boston, Massachusetts and which may issue one or more series of beneficial
interest ("Issuer"), with respect to shares of Fidelity Advisor Dividend Growth
Fund, a series of the Issuer, and Fidelity Distributors Corporation, a
Massachusetts corporation having its principal place of business in Boston,
Massachusetts ("Distributors").
In consideration of the mutual promises and undertakings herein
contained, the parties agree as follows:
1. SALE OF SHARES - The Issuer grants to Distributors the right to sell shares
on behalf of the Issuer during the term of this Agreement and subject to the
registration requirements of the Securities Act of 1933, as amended ("1933
Act"), and of the laws governing the sale of securities in the various states
("Blue Sky Laws") under the following terms and conditions: Distributors (i)
shall have the right to sell, as agent on behalf of the Issuer, shares
authorized for issue and registered under the 1933 Act, and (ii) may sell shares
under offers of exchange, if available, between and among the funds advised by
Fidelity Management & Research Company ("FMR") or any of its affiliates.
2. SALE OF SHARES BY THE ISSUER - The rights granted to Distributors shall be
nonexclusive in that the Issuer reserves the right to sell its shares to
investors on applications received and accepted by the Issuer. Further, the
Issuer reserves the right to issue shares in connection with the merger or
consolidation, or acquisition by the Issuer through purchase or otherwise, with
any other investment company, trust, or personal holding company.
3. SHARES COVERED BY THIS AGREEMENT - This Agreement shall apply to unissued
shares of the Issuer, shares of the Issuer held in its treasury in the event
that in the discretion of the Issuer treasury shares shall be sold, and shares
of the Issuer repurchased for resale.
4. PUBLIC OFFERING PRICE - Except as otherwise noted in the Issuer's current
Prospectus and/or Statement of Additional Information, all shares sold to
investors by Distributors or the Issuer will be sold at the public offering
price. The public offering price for all accepted subscriptions will be the net
asset value per share, as determined in the manner described in the Issuer's
current Prospectus and/or Statement of Additional Information, plus a sales
charge (if any) described in the Issuer's current Prospectus and/or Statement of
Additional Information. The Issuer shall in all cases receive the net asset
value per share on all sales. If a sales charge is in effect, Distributors shall
have the right subject to such rules or regulations of the Securities and
Exchange Commission as may then be in effect pursuant to Section 22 of the
Investment Company Act of 1940 to pay a portion of the sales charge to dealers
who have sold shares of the Issuer. If a fee in connection with shareholder
redemptions is in effect, the Issuer shall collect the fee on behalf of
Distributors and, unless otherwise agreed upon by the Issuer and Distributors,
Distributors shall be entitled to receive all of such fees.
5. SUSPENSION OF SALES - If and whenever the determination of net asset value is
suspended and until such suspension is terminated, no further orders for shares
shall be processed by Distributors except such unconditional orders as may have
been placed with Distributors before it had knowledge of the suspension. In
addition, the Issuer reserves the right to suspend sales and Distributors'
authority to process orders for shares on behalf of the Issuer if, in the
judgment of the Issuer, it is in the best interests of the Issuer to do so.
Suspension will continue for such period as may be determined by the Issuer.
6. SOLICITATION OF SALES - In consideration of these rights granted to
Distributors, Distributors agrees to use all reasonable efforts, consistent with
its other business, to secure purchasers for shares of the Issuer. This shall
not prevent Distributors from entering into like arrangements (including
arrangements involving the payment of underwriting commissions) with other
issuers. This does not obligate Distributors to register as a broker or dealer
under the Blue Sky Laws of any jurisdiction in which it is not now registered or
to maintain its registration in any jurisdiction in which it is now registered.
If a sales charge is in effect, Distributors shall have the right to enter into
sales agreements with dealers of its choice for the sale of shares of the Issuer
to the public at the public offering price only and fix in such agreements the
<PAGE>
portion of the sales charge which may be retained by dealers, provided that the
Issuer shall approve the form of the dealer agreement and the dealer discounts
set forth therein and shall evidence such approval by filing said form of dealer
agreement and amendments thereto as an exhibit to its currently effective
Registration Statement under the 1933 Act.
7. AUTHORIZED REPRESENTATIONS - Distributors is not authorized by the Issuer to
give any information or to make any representations other than those contained
in the appropriate registration statements or Prospectuses and Statements of
Additional Information filed with the Securities and Exchange Commission under
the 1933 Act (as these registration statements, Prospectuses and Statements of
Additional Information may be amended from time to time), or contained in
shareholder reports or other material that may be prepared by or on behalf of
the Issuer for Distributors' use. This shall not be construed to prevent
Distributors from preparing and distributing sales literature or other material
as it may deem appropriate.
8. PORTFOLIO SECURITIES - Portfolio securities of the Issuer may be bought or
sold by or through Distributors, and Distributors may participate directly or
indirectly in brokerage commissions or "spreads" for transactions in portfolio
securities of the Issuer.
9. REGISTRATION OF SHARES - The Issuer agrees that it will take all action
necessary to register shares under the 1933 Act (subject to the necessary
approval of its shareholders) so that there will be available for sale the
number of shares Distributors may reasonably be expected to sell. The Issuer
shall make available to Distributors such number of copies of its currently
effective Prospectus and Statement of Additional Information as Distributors may
reasonably request. The Issuer shall furnish to Distributors copies of all
information, financial statements and other papers which Distributors may
reasonably request for use in connection with the distribution of shares of the
Issuer.
10. EXPENSES - The Issuer shall pay all fees and expenses (a) in connection with
the preparation, setting in type and filing of any registration statement,
Prospectus and Statement of Additional Information under the 1933 Act and
amendments for the issue of its shares, (b) in connection with the registration
and qualification of shares for sale in the various states in which the Board of
Trustees of the Issuer shall determine it advisable to qualify such shares for
sale (including registering the Issuer as a broker or dealer or any officer of
the Issuer as agent or salesman in any state), (c) of preparing, setting in
type, printing and mailing any report or other communication to shareholders of
the Issuer in their capacity as such, and (d) of preparing, setting in type,
printing and mailing Prospectuses, Statements of Additional Information and any
supplements thereto sent to existing shareholders.
As provided in the Distribution and Service Plan adopted by the Issuer,
it is recognized by the Issuer that FMR may make payment to Distributors with
respect to any expenses incurred in the distribution of shares of the Issuer,
such payments payable from the past profits or other resources of FMR including
management fees paid to it by the Issuer.
11. INDEMNIFICATION - The Issuer agrees to indemnify and hold harmless
Distributors and each of its directors and officers and each person, if any, who
controls Distributors within the meaning of Section 15 of the 1933 Act against
any loss, liability, claim, damages or expense (including the reasonable cost of
investigating or defending any alleged loss, liability, claim, damages, or
expense and reasonable counsel fees incurred in connection therewith) arising by
reason of any person acquiring any shares, based upon the ground that the
registration statement, Prospectus, Statement of Additional Information,
shareholder reports or other information filed or made public by the Issuer (as
from time to time amended) included an untrue statement of a material fact or
omitted to state a material fact required to be stated or necessary in order to
make the statements not misleading under the 1933 Act, or any other statute or
the common law. However, the Issuer does not agree to indemnify Distributors or
hold it harmless to the extent that the statement or omission was made in
reliance upon, and in conformity with, information furnished to the Issuer by or
on behalf of Distributors. In no case (i) is the indemnity of the Issuer in
favor of Distributors or any person indemnified to be deemed to protect
Distributors or any person against any liability to the Issuer or its security
holders to which Distributors or such person would otherwise be subject by
reason of wilful misfeasance, bad faith or gross negligence in the performance
of its duties or by reason of its reckless disregard of its obligations and
duties under this Agreement, or (ii) is the Issuer to be liable under its
indemnity agreement contained in this paragraph with respect to any claim made
against Distributors or any person indemnified unless Distributors or person, as
the case may be, shall have notified the Issuer in writing of the claim within a
reasonable time after the summons or other first written notification giving
information of the nature of the claim shall have been served upon Distributors
or any such person (or after Distributors or such person shall have received
notice of service on any designated agent). However, failure to notify the
Issuer of any claim shall not relieve the Issuer from any liability which it may
have to Distributors or any person against whom such action is brought otherwise
than on account of its indemnity agreement contained in this paragraph. The
2
<PAGE>
Issuer shall be entitled to participate at its own expense in the defense, or,
if it so elects, to assume the defense of any suit brought to enforce any
claims, but if the Issuer elects to assume the defense, the defense shall be
conducted by counsel chosen by it and satisfactory to Distributors or person or
persons, defendant or defendants in the suit. In the event the Issuer elects to
assume the defense of any suit and retain counsel, Distributors, officers or
directors or controlling person or persons, defendant or defendants in the suit,
shall bear the fees and expenses of any additional counsel retained by them. If
the Issuer does not elect to assume the defense of any suit, it will reimburse
Distributors, officers or directors or controlling person or persons, defendant
or defendants in the suit, for the reasonable fees and expenses of any counsel
retained by them. The Issuer agrees to notify Distributors promptly of the
commencement of any litigation or proceedings against it or any of its officers
or trustees in connection with the issuance or sale of any of the shares.
Distributors also covenants and agrees that it will indemnify and hold
harmless the Issuer and each of its Board members and officers and each person,
if any, who controls the Issuer within the meaning of Section 15 of the 1933
Act, against any loss, liability, damages, claim or expense (including the
reasonable cost of investigating or defending any alleged loss, liability,
damages, claim or expense and reasonable counsel fees incurred in connection
therewith) arising by reason of any person acquiring any shares, based upon the
1933 Act or any other statute or common law, alleging any wrongful act of
Distributors or any of its employees or alleging that the registration
statement, Prospectus, Statement of Additional Information, shareholder reports
or other information filed or made public by the Issuer (as from time to time
amended) included an untrue statement of a material fact or omitted to state a
material fact required to be stated or necessary in order to make the statements
not misleading, insofar as the statement or omission was made in reliance upon,
and in conformity with information furnished to the Issuer by or on behalf of
Distributors. In no case (i) is the indemnity of Distributors in favor of the
Issuer or any person indemnified to be deemed to protect the Issuer or any
person against any liability to which the Issuer or such person would otherwise
be subject by reason of willful misfeasance, bad faith or gross negligence in
the performance of its duties or by reason of its reckless disregard of its
obligations and duties under this Agreement, or (ii) is Distributors to be
liable under its indemnity agreement contained in this paragraph with respect to
any claim made against the Issuer or any person indemnified unless the Issuer or
person, as the case may be, shall have notified Distributors in writing of the
claim within a reasonable time after the summons or other first written
notification giving information of the nature of the claim shall have been
served upon the Issuer or any such person (or after the Issuer or such person
shall have received notice of service on any designated agent). However, failure
to notify Distributors of any claim shall not relieve Distributors from any
liability which it may have to the Issuer or any person against whom the action
is brought otherwise than on account of its indemnity agreement contained in
this paragraph. In the case of any notice to Distributors, it shall be entitled
to participate, at its own expense, in the defense or, if it so elects, to
assume the defense of any suit brought to enforce the claim, but if Distributors
elects to assume the defense, the defense shall be conducted by counsel chosen
by it and satisfactory to the Issuer, to its officers and Board and to any
controlling person or persons, defendant or defendants in the suit. In the event
that Distributors elects to assume the defense of any suit and retain counsel,
the Issuer or controlling persons, defendant or defendants in the suit, shall
bear the fees and expense of any additional counsel retained by them. If
Distributors does not elect to assume the defense of any suit, it will reimburse
the Issuer, officers and Board or controlling person or persons, defendant or
defendants in the suit, for the reasonable fees and expenses of any counsel
retained by them. Distributors agrees to notify the Issuer promptly of the
commencement of any litigation or proceedings against it in connection with the
issue and sale of any of the shares.
12. EFFECTIVE DATE - This agreement shall be effective upon its execution, and
unless terminated as provided, shall continue in force until March 31, 1999 and
thereafter from year to year, provided continuance is approved annually by the
vote of a majority of the Board members of the Issuer, and by the vote of those
Board members of the Issuer who are not "interested persons" of the Issuer and,
if a plan under Rule 12b-1 under the Investment Company Act of 1940 is in
effect, by the vote of those Board members of the Issuer who are not "interested
persons" of the Issuer and who are not parties to the Distribution and Service
Plan or this Agreement and have no financial interest in the operation of the
Distribution and Service Plan or in any agreements related to the Distribution
and Service Plan, cast in person at a meeting called for the purpose of voting
on the approval. This Agreement shall automatically terminate in the event of
its assignment. As used in this paragraph, the terms "assignment" and
"interested persons" shall have the respective meanings specified in the
Investment Company Act of 1940 as now in effect or as hereafter amended. In
addition to termination by failure to approve continuance or by assignment, this
Agreement may at any time be terminated by either party upon not less than sixty
days' prior written notice to the other party.
<PAGE>
13. NOTICE - Any notice required or permitted to be given by either party to the
other shall be deemed sufficient if sent by registered or certified mail,
postage prepaid, addressed by the party giving notice to the other party at the
last address furnished by the other party to the party giving notice: if to the
Issuer, at 82 Devonshire Street, Boston, Massachusetts, and if to Distributors,
at 82 Devonshire Street, Boston, Massachusetts.
14. LIMITATION OF LIABILITY - Distributors is expressly put on notice of the
limitation of shareholder liability as set forth in the Declaration of Trust or
other organizational document of the Issuer and agrees that the obligations
assumed by the Issuer under this contract shall be limited in all cases to the
Issuer and its assets. Distributors shall not seek satisfaction of any such
obligation from the shareholders or any shareholder of the Issuer. Nor shall
Distributors seek satisfaction of any such obligation from the Trustees or any
individual Trustee of the Issuer. Distributors understands that the rights and
obligations of each series of shares of the Issuer under the Issuer's
Declaration of Trust or other organizational document are separate and distinct
from those of any and all other series.
15. This agreement shall be governed by, and construed in accordance with, the
laws of the Commonwealth of Massachusetts, without giving effect to the choice
of laws provisions thereof.
IN WITNESS WHEREOF, the Issuer has executed this instrument in its name
and behalf, and its seal affixed, by one of its officers duly authorized, and
Distributors has executed this instrument in its name and behalf by one of its
officers duly authorized, as of the day and year first above written.
FIDELITY ADVISOR SERIES I
By _____________________________
FIDELITY DISTRIBUTORS CORPORATION
By _____________________________
Exhibit 6(l)
FORM OF
GENERAL DISTRIBUTION AGREEMENT
between
FIDELITY ADVISOR SERIES I
and
FIDELITY DISTRIBUTORS CORPORATION
Agreement made this ___ day of , 1998, between Fidelity Advisor Series
I, a Massachusetts business trust having its principal place of business in
Boston, Massachusetts and which may issue one or more series of beneficial
interest ("Issuer"), with respect to shares of Fidelity Advisor Retirement
Growth Fund, a series of the Issuer, and Fidelity Distributors Corporation, a
Massachusetts corporation having its principal place of business in Boston,
Massachusetts ("Distributors").
In consideration of the mutual promises and undertakings herein
contained, the parties agree as follows:
1. SALE OF SHARES - The Issuer grants to Distributors the right to sell shares
on behalf of the Issuer during the term of this Agreement and subject to the
registration requirements of the Securities Act of 1933, as amended ("1933
Act"), and of the laws governing the sale of securities in the various states
("Blue Sky Laws") under the following terms and conditions: Distributors (i)
shall have the right to sell, as agent on behalf of the Issuer, shares
authorized for issue and registered under the 1933 Act, and (ii) may sell shares
under offers of exchange, if available, between and among the funds advised by
Fidelity Management & Research Company ("FMR") or any of its affiliates.
2. SALE OF SHARES BY THE ISSUER - The rights granted to Distributors shall be
nonexclusive in that the Issuer reserves the right to sell its shares to
investors on applications received and accepted by the Issuer. Further, the
Issuer reserves the right to issue shares in connection with the merger or
consolidation, or acquisition by the Issuer through purchase or otherwise, with
any other investment company, trust, or personal holding company.
3. SHARES COVERED BY THIS AGREEMENT - This Agreement shall apply to unissued
shares of the Issuer, shares of the Issuer held in its treasury in the event
that in the discretion of the Issuer treasury shares shall be sold, and shares
of the Issuer repurchased for resale.
4. PUBLIC OFFERING PRICE - Except as otherwise noted in the Issuer's current
Prospectus and/or Statement of Additional Information, all shares sold to
investors by Distributors or the Issuer will be sold at the public offering
price. The public offering price for all accepted subscriptions will be the net
asset value per share, as determined in the manner described in the Issuer's
current Prospectus and/or Statement of Additional Information, plus a sales
charge (if any) described in the Issuer's current Prospectus and/or Statement of
Additional Information. The Issuer shall in all cases receive the net asset
value per share on all sales. If a sales charge is in effect, Distributors shall
have the right subject to such rules or regulations of the Securities and
Exchange Commission as may then be in effect pursuant to Section 22 of the
Investment Company Act of 1940 to pay a portion of the sales charge to dealers
who have sold shares of the Issuer. If a fee in connection with shareholder
redemptions is in effect, the Issuer shall collect the fee on behalf of
Distributors and, unless otherwise agreed upon by the Issuer and Distributors,
Distributors shall be entitled to receive all of such fees.
5. SUSPENSION OF SALES - If and whenever the determination of net asset value is
suspended and until such suspension is terminated, no further orders for shares
shall be processed by Distributors except such unconditional orders as may have
been placed with Distributors before it had knowledge of the suspension. In
addition, the Issuer reserves the right to suspend sales and Distributors'
authority to process orders for shares on behalf of the Issuer if, in the
judgment of the Issuer, it is in the best interests of the Issuer to do so.
Suspension will continue for such period as may be determined by the Issuer.
6. SOLICITATION OF SALES - In consideration of these rights granted to
Distributors, Distributors agrees to use all reasonable efforts, consistent with
its other business, to secure purchasers for shares of the Issuer. This shall
not prevent Distributors from entering into like arrangements (including
arrangements involving the payment of underwriting commissions) with other
issuers. This does not obligate Distributors to register as a broker or dealer
under the Blue Sky Laws of any jurisdiction in which it is not now registered or
to maintain its registration in any jurisdiction in which it is now registered.
If a sales charge is in effect, Distributors shall have the right to enter into
sales agreements with dealers of its choice for the sale of shares of the Issuer
to the public at the public offering price only and fix in such agreements the
<PAGE>
portion of the sales charge which may be retained by dealers, provided that the
Issuer shall approve the form of the dealer agreement and the dealer discounts
set forth therein and shall evidence such approval by filing said form of dealer
agreement and amendments thereto as an exhibit to its currently effective
Registration Statement under the 1933 Act.
7. AUTHORIZED REPRESENTATIONS - Distributors is not authorized by the Issuer to
give any information or to make any representations other than those contained
in the appropriate registration statements or Prospectuses and Statements of
Additional Information filed with the Securities and Exchange Commission under
the 1933 Act (as these registration statements, Prospectuses and Statements of
Additional Information may be amended from time to time), or contained in
shareholder reports or other material that may be prepared by or on behalf of
the Issuer for Distributors' use. This shall not be construed to prevent
Distributors from preparing and distributing sales literature or other material
as it may deem appropriate.
8. PORTFOLIO SECURITIES - Portfolio securities of the Issuer may be bought or
sold by or through Distributors, and Distributors may participate directly or
indirectly in brokerage commissions or "spreads" for transactions in portfolio
securities of the Issuer.
9. REGISTRATION OF SHARES - The Issuer agrees that it will take all action
necessary to register shares under the 1933 Act (subject to the necessary
approval of its shareholders) so that there will be available for sale the
number of shares Distributors may reasonably be expected to sell. The Issuer
shall make available to Distributors such number of copies of its currently
effective Prospectus and Statement of Additional Information as Distributors may
reasonably request. The Issuer shall furnish to Distributors copies of all
information, financial statements and other papers which Distributors may
reasonably request for use in connection with the distribution of shares of the
Issuer.
10. EXPENSES - The Issuer shall pay all fees and expenses (a) in connection with
the preparation, setting in type and filing of any registration statement,
Prospectus and Statement of Additional Information under the 1933 Act and
amendments for the issue of its shares, (b) in connection with the registration
and qualification of shares for sale in the various states in which the Board of
Trustees of the Issuer shall determine it advisable to qualify such shares for
sale (including registering the Issuer as a broker or dealer or any officer of
the Issuer as agent or salesman in any state), (c) of preparing, setting in
type, printing and mailing any report or other communication to shareholders of
the Issuer in their capacity as such, and (d) of preparing, setting in type,
printing and mailing Prospectuses, Statements of Additional Information and any
supplements thereto sent to existing shareholders.
As provided in the Distribution and Service Plan adopted by the Issuer,
it is recognized by the Issuer that FMR may make payment to Distributors with
respect to any expenses incurred in the distribution of shares of the Issuer,
such payments payable from the past profits or other resources of FMR including
management fees paid to it by the Issuer.
11. INDEMNIFICATION - The Issuer agrees to indemnify and hold harmless
Distributors and each of its directors and officers and each person, if any, who
controls Distributors within the meaning of Section 15 of the 1933 Act against
any loss, liability, claim, damages or expense (including the reasonable cost of
investigating or defending any alleged loss, liability, claim, damages, or
expense and reasonable counsel fees incurred in connection therewith) arising by
reason of any person acquiring any shares, based upon the ground that the
registration statement, Prospectus, Statement of Additional Information,
shareholder reports or other information filed or made public by the Issuer (as
from time to time amended) included an untrue statement of a material fact or
omitted to state a material fact required to be stated or necessary in order to
make the statements not misleading under the 1933 Act, or any other statute or
the common law. However, the Issuer does not agree to indemnify Distributors or
hold it harmless to the extent that the statement or omission was made in
reliance upon, and in conformity with, information furnished to the Issuer by or
on behalf of Distributors. In no case (i) is the indemnity of the Issuer in
favor of Distributors or any person indemnified to be deemed to protect
Distributors or any person against any liability to the Issuer or its security
holders to which Distributors or such person would otherwise be subject by
reason of wilful misfeasance, bad faith or gross negligence in the performance
of its duties or by reason of its reckless disregard of its obligations and
duties under this Agreement, or (ii) is the Issuer to be liable under its
indemnity agreement contained in this paragraph with respect to any claim made
against Distributors or any person indemnified unless Distributors or person, as
the case may be, shall have notified the Issuer in writing of the claim within a
reasonable time after the summons or other first written notification giving
information of the nature of the claim shall have been served upon Distributors
or any such person (or after Distributors or such person shall have received
notice of service on any designated agent). However, failure to notify the
Issuer of any claim shall not relieve the Issuer from any liability which it may
have to Distributors or any person against whom such action is brought otherwise
2
<PAGE>
than on account of its indemnity agreement contained in this paragraph. The
Issuer shall be entitled to participate at its own expense in the defense, or,
if it so elects, to assume the defense of any suit brought to enforce any
claims, but if the Issuer elects to assume the defense, the defense shall be
conducted by counsel chosen by it and satisfactory to Distributors or person or
persons, defendant or defendants in the suit. In the event the Issuer elects to
assume the defense of any suit and retain counsel, Distributors, officers or
directors or controlling person or persons, defendant or defendants in the suit,
shall bear the fees and expenses of any additional counsel retained by them. If
the Issuer does not elect to assume the defense of any suit, it will reimburse
Distributors, officers or directors or controlling person or persons, defendant
or defendants in the suit, for the reasonable fees and expenses of any counsel
retained by them. The Issuer agrees to notify Distributors promptly of the
commencement of any litigation or proceedings against it or any of its officers
or trustees in connection with the issuance or sale of any of the shares.
Distributors also covenants and agrees that it will indemnify and hold
harmless the Issuer and each of its Board members and officers and each person,
if any, who controls the Issuer within the meaning of Section 15 of the 1933
Act, against any loss, liability, damages, claim or expense (including the
reasonable cost of investigating or defending any alleged loss, liability,
damages, claim or expense and reasonable counsel fees incurred in connection
therewith) arising by reason of any person acquiring any shares, based upon the
1933 Act or any other statute or common law, alleging any wrongful act of
Distributors or any of its employees or alleging that the registration
statement, Prospectus, Statement of Additional Information, shareholder reports
or other information filed or made public by the Issuer (as from time to time
amended) included an untrue statement of a material fact or omitted to state a
material fact required to be stated or necessary in order to make the statements
not misleading, insofar as the statement or omission was made in reliance upon,
and in conformity with information furnished to the Issuer by or on behalf of
Distributors. In no case (i) is the indemnity of Distributors in favor of the
Issuer or any person indemnified to be deemed to protect the Issuer or any
person against any liability to which the Issuer or such person would otherwise
be subject by reason of willful misfeasance, bad faith or gross negligence in
the performance of its duties or by reason of its reckless disregard of its
obligations and duties under this Agreement, or (ii) is Distributors to be
liable under its indemnity agreement contained in this paragraph with respect to
any claim made against the Issuer or any person indemnified unless the Issuer or
person, as the case may be, shall have notified Distributors in writing of the
claim within a reasonable time after the summons or other first written
notification giving information of the nature of the claim shall have been
served upon the Issuer or any such person (or after the Issuer or such person
shall have received notice of service on any designated agent). However, failure
to notify Distributors of any claim shall not relieve Distributors from any
liability which it may have to the Issuer or any person against whom the action
is brought otherwise than on account of its indemnity agreement contained in
this paragraph. In the case of any notice to Distributors, it shall be entitled
to participate, at its own expense, in the defense or, if it so elects, to
assume the defense of any suit brought to enforce the claim, but if Distributors
elects to assume the defense, the defense shall be conducted by counsel chosen
by it and satisfactory to the Issuer, to its officers and Board and to any
controlling person or persons, defendant or defendants in the suit. In the event
that Distributors elects to assume the defense of any suit and retain counsel,
the Issuer or controlling persons, defendant or defendants in the suit, shall
bear the fees and expense of any additional counsel retained by them. If
Distributors does not elect to assume the defense of any suit, it will reimburse
the Issuer, officers and Board or controlling person or persons, defendant or
defendants in the suit, for the reasonable fees and expenses of any counsel
retained by them. Distributors agrees to notify the Issuer promptly of the
commencement of any litigation or proceedings against it in connection with the
issue and sale of any of the shares.
12. EFFECTIVE DATE - This agreement shall be effective upon its execution, and
unless terminated as provided, shall continue in force until March 31, 1999 and
thereafter from year to year, provided continuance is approved annually by the
vote of a majority of the Board members of the Issuer, and by the vote of those
Board members of the Issuer who are not "interested persons" of the Issuer and,
if a plan under Rule 12b-1 under the Investment Company Act of 1940 is in
effect, by the vote of those Board members of the Issuer who are not "interested
persons" of the Issuer and who are not parties to the Distribution and Service
Plan or this Agreement and have no financial interest in the operation of the
Distribution and Service Plan or in any agreements related to the Distribution
and Service Plan, cast in person at a meeting called for the purpose of voting
on the approval. This Agreement shall automatically terminate in the event of
its assignment. As used in this paragraph, the terms "assignment" and
"interested persons" shall have the respective meanings specified in the
Investment Company Act of 1940 as now in effect or as hereafter amended. In
addition to termination by failure to approve continuance or by assignment, this
Agreement may at any time be terminated by either party upon not less than sixty
days' prior written notice to the other party.
3
<PAGE>
13. NOTICE - Any notice required or permitted to be given by either party to the
other shall be deemed sufficient if sent by registered or certified mail,
postage prepaid, addressed by the party giving notice to the other party at the
last address furnished by the other party to the party giving notice: if to the
Issuer, at 82 Devonshire Street, Boston, Massachusetts, and if to Distributors,
at 82 Devonshire Street, Boston, Massachusetts.
14. LIMITATION OF LIABILITY - Distributors is expressly put on notice of the
limitation of shareholder liability as set forth in the Declaration of Trust or
other organizational document of the Issuer and agrees that the obligations
assumed by the Issuer under this contract shall be limited in all cases to the
Issuer and its assets. Distributors shall not seek satisfaction of any such
obligation from the shareholders or any shareholder of the Issuer. Nor shall
Distributors seek satisfaction of any such obligation from the Trustees or any
individual Trustee of the Issuer. Distributors understands that the rights and
obligations of each series of shares of the Issuer under the Issuer's
Declaration of Trust or other organizational document are separate and distinct
from those of any and all other series.
15. This agreement shall be governed by, and construed in accordance with, the
laws of the Commonwealth of Massachusetts, without giving effect to the choice
of laws provisions thereof.
IN WITNESS WHEREOF, the Issuer has executed this instrument in its name
and behalf, and its seal affixed, by one of its officers duly authorized, and
Distributors has executed this instrument in its name and behalf by one of its
officers duly authorized, as of the day and year first above written.
FIDELITY ADVISOR SERIES I
By _____________________________
FIDELITY DISTRIBUTORS CORPORATION
By _____________________________
4
Exhibit 6 (m)
FORM OF
GENERAL DISTRIBUTION AGREEMENT
between
FIDELITY ADVISOR SERIES I
and
FIDELITY DISTRIBUTORS CORPORATION
Agreement made this ___ day of ________, 1998, between Fidelity Advisor
Series I, a Massachusetts business trust having its principal place of business
in Boston, Massachusetts and which may issue one or more series of beneficial
interest ("Issuer"), with respect to shares of Fidelity Advisor Asset Allocation
Fund, a series of the Issuer, and Fidelity Distributors Corporation, a
Massachusetts corporation having its principal place of business in Boston,
Massachusetts ("Distributors").
In consideration of the mutual promises and undertakings herein
contained, the parties agree as follows:
1. SALE OF SHARES - The Issuer grants to Distributors the right to sell shares
on behalf of the Issuer during the term of this Agreement and subject to the
registration requirements of the Securities Act of 1933, as amended ("1933
Act"), and of the laws governing the sale of securities in the various states
("Blue Sky Laws") under the following terms and conditions: Distributors (i)
shall have the right to sell, as agent on behalf of the Issuer, shares
authorized for issue and registered under the 1933 Act, and (ii) may sell shares
under offers of exchange, if available, between and among the funds advised by
Fidelity Management & Research Company ("FMR") or any of its affiliates.
2. SALE OF SHARES BY THE ISSUER - The rights granted to Distributors shall be
nonexclusive in that the Issuer reserves the right to sell its shares to
investors on applications received and accepted by the Issuer. Further, the
Issuer reserves the right to issue shares in connection with the merger or
consolidation, or acquisition by the Issuer through purchase or otherwise, with
any other investment company, trust, or personal holding company.
3. SHARES COVERED BY THIS AGREEMENT - This Agreement shall apply to unissued
shares of the Issuer, shares of the Issuer held in its treasury in the event
that in the discretion of the Issuer treasury shares shall be sold, and shares
of the Issuer repurchased for resale.
4. PUBLIC OFFERING PRICE - Except as otherwise noted in the Issuer's current
Prospectus and/or Statement of Additional Information, all shares sold to
investors by Distributors or the Issuer will be sold at the public offering
price. The public offering price for all accepted subscriptions will be the net
asset value per share, as determined in the manner described in the Issuer's
current Prospectus and/or Statement of Additional Information, plus a sales
charge (if any) described in the Issuer's current Prospectus and/or Statement of
Additional Information. The Issuer shall in all cases receive the net asset
value per share on all sales. If a sales charge is in effect, Distributors shall
have the right subject to such rules or regulations of the Securities and
Exchange Commission as may then be in effect pursuant to Section 22 of the
Investment Company Act of 1940 to pay a portion of the sales charge to dealers
who have sold shares of the Issuer. If a fee in connection with shareholder
redemptions is in effect, the Issuer shall collect the fee on behalf of
Distributors and, unless otherwise agreed upon by the Issuer and Distributors,
Distributors shall be entitled to receive all of such fees.
5. SUSPENSION OF SALES - If and whenever the determination of net asset value is
suspended and until such suspension is terminated, no further orders for shares
shall be processed by Distributors except such unconditional orders as may have
been placed with Distributors before it had knowledge of the suspension. In
addition, the Issuer reserves the right to suspend sales and Distributors'
authority to process orders for shares on behalf of the Issuer if, in the
judgment of the Issuer, it is in the best interests of the Issuer to do so.
Suspension will continue for such period as may be determined by the Issuer.
6. SOLICITATION OF SALES - In consideration of these rights granted to
Distributors, Distributors agrees to use all reasonable efforts, consistent with
its other business, to secure purchasers for shares of the Issuer. This shall
not prevent Distributors from entering into like arrangements (including
arrangements involving the payment of underwriting commissions) with other
issuers. This does not obligate Distributors to register as a broker or dealer
under the Blue Sky Laws of any jurisdiction in which it is not now registered or
to maintain its registration in any jurisdiction in which it is now registered.
<PAGE>
If a sales charge is in effect, Distributors shall have the right to enter into
sales agreements with dealers of its choice for the sale of shares of the Issuer
to the public at the public offering price only and fix in such agreements the
portion of the sales charge which may be retained by dealers, provided that the
Issuer shall approve the form of the dealer agreement and the dealer discounts
set forth therein and shall evidence such approval by filing said form of dealer
agreement and amendments thereto as an exhibit to its currently effective
Registration Statement under the 1933 Act.
7. AUTHORIZED REPRESENTATIONS - Distributors is not authorized by the Issuer to
give any information or to make any representations other than those contained
in the appropriate registration statements or Prospectuses and Statements of
Additional Information filed with the Securities and Exchange Commission under
the 1933 Act (as these registration statements, Prospectuses and Statements of
Additional Information may be amended from time to time), or contained in
shareholder reports or other material that may be prepared by or on behalf of
the Issuer for Distributors' use. This shall not be construed to prevent
Distributors from preparing and distributing sales literature or other material
as it may deem appropriate.
8. PORTFOLIO SECURITIES - Portfolio securities of the Issuer may be bought or
sold by or through Distributors, and Distributors may participate directly or
indirectly in brokerage commissions or "spreads" for transactions in portfolio
securities of the Issuer.
9. REGISTRATION OF SHARES - The Issuer agrees that it will take all action
necessary to register shares under the 1933 Act (subject to the necessary
approval of its shareholders) so that there will be available for sale the
number of shares Distributors may reasonably be expected to sell. The Issuer
shall make available to Distributors such number of copies of its currently
effective Prospectus and Statement of Additional Information as Distributors may
reasonably request. The Issuer shall furnish to Distributors copies of all
information, financial statements and other papers which Distributors may
reasonably request for use in connection with the distribution of shares of the
Issuer.
10. EXPENSES - The Issuer shall pay all fees and expenses (a) in connection with
the preparation, setting in type and filing of any registration statement,
Prospectus and Statement of Additional Information under the 1933 Act and
amendments for the issue of its shares, (b) in connection with the registration
and qualification of shares for sale in the various states in which the Board of
Trustees of the Issuer shall determine it advisable to qualify such shares for
sale (including registering the Issuer as a broker or dealer or any officer of
the Issuer as agent or salesman in any state), (c) of preparing, setting in
type, printing and mailing any report or other communication to shareholders of
the Issuer in their capacity as such, and (d) of preparing, setting in type,
printing and mailing Prospectuses, Statements of Additional Information and any
supplements thereto sent to existing shareholders.
As provided in the Distribution and Service Plan adopted by the Issuer,
it is recognized by the Issuer that FMR may make payment to Distributors with
respect to any expenses incurred in the distribution of shares of the Issuer,
such payments payable from the past profits or other resources of FMR including
management fees paid to it by the Issuer.
11. INDEMNIFICATION - The Issuer agrees to indemnify and hold harmless
Distributors and each of its directors and officers and each person, if any, who
controls Distributors within the meaning of Section 15 of the 1933 Act against
any loss, liability, claim, damages or expense (including the reasonable cost of
investigating or defending any alleged loss, liability, claim, damages, or
expense and reasonable counsel fees incurred in connection therewith) arising by
reason of any person acquiring any shares, based upon the ground that the
registration statement, Prospectus, Statement of Additional Information,
shareholder reports or other information filed or made public by the Issuer (as
from time to time amended) included an untrue statement of a material fact or
omitted to state a material fact required to be stated or necessary in order to
make the statements not misleading under the 1933 Act, or any other statute or
the common law. However, the Issuer does not agree to indemnify Distributors or
hold it harmless to the extent that the statement or omission was made in
reliance upon, and in conformity with, information furnished to the Issuer by or
on behalf of Distributors. In no case (i) is the indemnity of the Issuer in
favor of Distributors or any person indemnified to be deemed to protect
Distributors or any person against any liability to the Issuer or its security
holders to which Distributors or such person would otherwise be subject by
reason of wilful misfeasance, bad faith or gross negligence in the performance
of its duties or by reason of its reckless disregard of its obligations and
duties under this Agreement, or (ii) is the Issuer to be liable under its
indemnity agreement contained in this paragraph with respect to any claim made
against Distributors or any person indemnified unless Distributors or person, as
the case may be, shall have notified the Issuer in writing of the claim within a
reasonable time after the summons or other first written notification giving
2
<PAGE>
information of the nature of the claim shall have been served upon Distributors
or any such person (or after Distributors or such person shall have received
notice of service on any designated agent). However, failure to notify the
Issuer of any claim shall not relieve the Issuer from any liability which it may
have to Distributors or any person against whom such action is brought otherwise
than on account of its indemnity agreement contained in this paragraph. The
Issuer shall be entitled to participate at its own expense in the defense, or,
if it so elects, to assume the defense of any suit brought to enforce any
claims, but if the Issuer elects to assume the defense, the defense shall be
conducted by counsel chosen by it and satisfactory to Distributors or person or
persons, defendant or defendants in the suit. In the event the Issuer elects to
assume the defense of any suit and retain counsel, Distributors, officers or
directors or controlling person or persons, defendant or defendants in the suit,
shall bear the fees and expenses of any additional counsel retained by them. If
the Issuer does not elect to assume the defense of any suit, it will reimburse
Distributors, officers or directors or controlling person or persons, defendant
or defendants in the suit, for the reasonable fees and expenses of any counsel
retained by them. The Issuer agrees to notify Distributors promptly of the
commencement of any litigation or proceedings against it or any of its officers
or trustees in connection with the issuance or sale of any of the shares.
Distributors also covenants and agrees that it will indemnify and hold
harmless the Issuer and each of its Board members and officers and each person,
if any, who controls the Issuer within the meaning of Section 15 of the 1933
Act, against any loss, liability, damages, claim or expense (including the
reasonable cost of investigating or defending any alleged loss, liability,
damages, claim or expense and reasonable counsel fees incurred in connection
therewith) arising by reason of any person acquiring any shares, based upon the
1933 Act or any other statute or common law, alleging any wrongful act of
Distributors or any of its employees or alleging that the registration
statement, Prospectus, Statement of Additional Information, shareholder reports
or other information filed or made public by the Issuer (as from time to time
amended) included an untrue statement of a material fact or omitted to state a
material fact required to be stated or necessary in order to make the statements
not misleading, insofar as the statement or omission was made in reliance upon,
and in conformity with information furnished to the Issuer by or on behalf of
Distributors. In no case (i) is the indemnity of Distributors in favor of the
Issuer or any person indemnified to be deemed to protect the Issuer or any
person against any liability to which the Issuer or such person would otherwise
be subject by reason of willful misfeasance, bad faith or gross negligence in
the performance of its duties or by reason of its reckless disregard of its
obligations and duties under this Agreement, or (ii) is Distributors to be
liable under its indemnity agreement contained in this paragraph with respect to
any claim made against the Issuer or any person indemnified unless the Issuer or
person, as the case may be, shall have notified Distributors in writing of the
claim within a reasonable time after the summons or other first written
notification giving information of the nature of the claim shall have been
served upon the Issuer or any such person (or after the Issuer or such person
shall have received notice of service on any designated agent). However, failure
to notify Distributors of any claim shall not relieve Distributors from any
liability which it may have to the Issuer or any person against whom the action
is brought otherwise than on account of its indemnity agreement contained in
this paragraph. In the case of any notice to Distributors, it shall be entitled
to participate, at its own expense, in the defense or, if it so elects, to
assume the defense of any suit brought to enforce the claim, but if Distributors
elects to assume the defense, the defense shall be conducted by counsel chosen
by it and satisfactory to the Issuer, to its officers and Board and to any
controlling person or persons, defendant or defendants in the suit. In the event
that Distributors elects to assume the defense of any suit and retain counsel,
the Issuer or controlling persons, defendant or defendants in the suit, shall
bear the fees and expense of any additional counsel retained by them. If
Distributors does not elect to assume the defense of any suit, it will reimburse
the Issuer, officers and Board or controlling person or persons, defendant or
defendants in the suit, for the reasonable fees and expenses of any counsel
retained by them. Distributors agrees to notify the Issuer promptly of the
commencement of any litigation or proceedings against it in connection with the
issue and sale of any of the shares.
12. EFFECTIVE DATE - This agreement shall be effective upon its execution, and
unless terminated as provided, shall continue in force until March 31, 1999 and
thereafter from year to year, provided continuance is approved annually by the
vote of a majority of the Board members of the Issuer, and by the vote of those
Board members of the Issuer who are not "interested persons" of the Issuer and,
if a plan under Rule 12b-1 under the Investment Company Act of 1940 is in
effect, by the vote of those Board members of the Issuer who are not "interested
persons" of the Issuer and who are not parties to the Distribution and Service
Plan or this Agreement and have no financial interest in the operation of the
Distribution and Service Plan or in any agreements related to the Distribution
and Service Plan, cast in person at a meeting called for the purpose of voting
on the approval. This Agreement shall automatically terminate in the event of
its assignment. As used in this paragraph, the terms "assignment" and
"interested persons" shall have the respective meanings specified in the
Investment Company Act of 1940 as now in effect or as hereafter amended. In
3
<PAGE>
addition to termination by failure to approve continuance or by assignment, this
Agreement may at any time be terminated by either party upon not less than sixty
days' prior written notice to the other party.
13. NOTICE - Any notice required or permitted to be given by either party to the
other shall be deemed sufficient if sent by registered or certified mail,
postage prepaid, addressed by the party giving notice to the other party at the
last address furnished by the other party to the party giving notice: if to the
Issuer, at 82 Devonshire Street, Boston, Massachusetts, and if to Distributors,
at 82 Devonshire Street, Boston, Massachusetts.
14. LIMITATION OF LIABILITY - Distributors is expressly put on notice of the
limitation of shareholder liability as set forth in the Declaration of Trust or
other organizational document of the Issuer and agrees that the obligations
assumed by the Issuer under this contract shall be limited in all cases to the
Issuer and its assets. Distributors shall not seek satisfaction of any such
obligation from the shareholders or any shareholder of the Issuer. Nor shall
Distributors seek satisfaction of any such obligation from the Trustees or any
individual Trustee of the Issuer. Distributors understands that the rights and
obligations of each series of shares of the Issuer under the Issuer's
Declaration of Trust or other organizational document are separate and distinct
from those of any and all other series.
15. This agreement shall be governed by, and construed in accordance with, the
laws of the Commonwealth of Massachusetts, without giving effect to the choice
of laws provisions thereof.
IN WITNESS WHEREOF, the Issuer has executed this instrument in its name
and behalf, and its seal affixed, by one of its officers duly authorized, and
Distributors has executed this instrument in its name and behalf by one of its
officers duly authorized, as of the day and year first above written.
FIDELITY ADVISOR SERIES I
By _____________________________
FIDELITY DISTRIBUTORS CORPORATION
By _____________________________
4
Exhibit 15(nn)
FORM OF
DISTRIBUTION AND SERVICE PLAN
FIDELITY ADVISOR DIVIDEND GROWTH FUND
Class A Shares
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by Rule 12b-1
under the Investment Company Act of 1940, as amended (the "Act") for the Class A
shares of Fidelity Advisor Dividend Growth Fund ("Class A"), a class of shares
of Fidelity Advisor Dividend Growth Fund (the "Fund"), a portfolio of Fidelity
Advisor Series I (the "Trust").
2. The Trust has entered into a General Distribution Agreement on behalf
of the Fund with Fidelity Distributors Corporation (the "Distributor"), under
which the Distributor uses all reasonable efforts, consistent with its other
business, to secure purchasers of the Fund's shares of beneficial interest (the
"Shares"). Such efforts may include, but neither are required to include nor are
limited to, the following: (1) formulation and implementation of marketing and
promotional activities, such as mail promotions and television, radio,
newspaper, magazine and other mass media advertising; (2) preparation, printing
and distribution of sales literature; (3) preparation, printing and distribution
of prospectuses of the Fund and reports to recipients other than the existing
shareholders of the Fund; (4) obtaining such information, analyses and reports
with respect to marketing and promotional activities as the Distributor may,
from time to time, deem advisable; (5) making payments to securities dealers and
others engaged in the sale of Shares or who engage in shareholder support
services; and (6) providing training, marketing and support to such dealers with
respect to the sale of Shares.
3. In consideration for the services provided and the expenses incurred
by the Distributor pursuant to the General Distribution Agreement and paragraph
2 hereof, all with respect to Class A Shares, Class A shall pay to the
Distributor a fee at the annual rate of 0.75% (or such lesser amount as the
Trustees may, from time to time, determine) of the average daily net assets of
Class A throughout the month. The determination of daily net assets shall be
made at the close of business each day throughout the month and computed in the
manner specified in the Fund's then current Prospectus for the determination of
the net asset value of the Fund's Class A Shares. The Distributor may use all or
any portion of the fee received pursuant to this Plan to compensate securities
dealers or other persons who have engaged in the sale of Class A Shares or in
shareholder support services pursuant to agreements with the Distributor, or to
pay any of the expenses associated with other activities authorized under
paragraph 2 hereof.
4. The Fund presently pays, and will continue to pay, a management fee
to Fidelity Management & Research Company (the "Adviser") pursuant to a
management agreement between the Fund and the Adviser (the "Management
Contract"). It is recognized that the Adviser may use its management fee
revenue, as well as its past profits or its resources from any other source, to
make payment to the Distributor with respect to any expenses incurred in
connection with the distribution of Class A Shares, including the activities
referred to in paragraph 2 hereof. To the extent that the payment of management
fees by the Fund to the Adviser should be deemed to be indirect financing of any
activity primarily intended to result in the sale of Class A Shares within the
meaning of Rule 12b-1, then such payment shall be deemed to be authorized by
this Plan.
<PAGE>
5. This Plan shall become effective upon the approval by a vote of a
majority of the Trustees of the Trust, including a majority of Trustees who are
not "interested persons" of the Trust (as defined in the Act) and who have no
direct or indirect financial interest in the operation of this Plan or in any
agreement related to the Plan (the "Independent Trustees"), cast in person at a
meeting called for the purpose of voting on this Plan.
6. This Plan shall, unless terminated as hereinafter provided, remain in
effect until April 30, 1999, and from year to year thereafter; provided,
however, that such continuance is subject to approval annually by a vote of a
majority of the Trustees of the Trust, including a majority of the Independent
Trustees, cast in person at a meeting called for the purpose of voting on this
Plan. This Plan may be amended at any time by the Board of Trustees, provided
that (a) any amendment to increase materially the fee provided for in paragraph
3 hereof or any amendment of the Management Contract to increase the amount to
be paid by the Fund thereunder shall be effective only upon approval by a vote
of a majority of the outstanding voting securities of Class A, in the case of
this Plan, or upon approval by a vote of a majority of the outstanding voting
securities of the Fund, in the case of the Management Contract, and (b) any
material amendment of this Plan shall be effective only upon approval in the
manner provided in the first sentence of this paragraph 6.
7. This Plan may be terminated at any time, without the payment of any
penalty, by vote of a majority of the Independent Trustees or by a vote of a
majority of the outstanding voting securities of Class A.
8. During the existence of this Plan, the Trust shall require the
Adviser and/or the Distributor to provide the Trust, for review by the Trustees,
and the Trustees shall review, at least quarterly, a written report of the
amounts expended in connection with financing any activity primarily intended to
result in the sale of shares of Class A (making estimates of such costs where
necessary or desirable) and the purposes for which such expenditures were made.
9. This Plan does not require the Adviser or Distributor to perform any
specific type or level of distribution activities or to incur any specific level
of expenses for activities primarily intended to result in the sale of Class A
Shares.
10. Consistent with the limitation of shareholder liability as set forth
in the Trust's Declaration of Trust, obligation assumed by Class A pursuant to
this Plan and any agreement related to this Plan shall be limited in all cases
to Class A and its assets and shall not constitute an obligation of any
shareholder of the Trust or of any other class of the Fund, series of the Trust
or class of such series.
11. If any provision of the Plan shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Plan shall not
be affected thereby.
2
Exhibit 15(oo)
FORM OF
DISTRIBUTION AND SERVICE PLAN
FIDELITY ADVISOR DIVIDEND GROWTH FUND
Class T Shares
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by Rule 12b-1
under the Investment Company Act of 1940, as amended (the "Act") for the Class T
shares of Fidelity Advisor Dividend Growth Fund ("Class T"), a class of shares
of Fidelity Advisor Dividend Growth Fund (the "Fund"), a portfolio of Fidelity
Advisor Series I (the "Trust").
2. The Trust has entered into a General Distribution Agreement on behalf
of the Fund with Fidelity Distributors Corporation (the "Distributor"), under
which the Distributor uses all reasonable efforts, consistent with its other
business, to secure purchasers of the Fund's shares of beneficial interest (the
"Shares"). Such efforts may include, but neither are required to include nor are
limited to, the following: (1) formulation and implementation of marketing and
promotional activities, such as mail promotions and television, radio,
newspaper, magazine and other mass media advertising; (2) preparation, printing
and distribution of sales literature; (3) preparation, printing and distribution
of prospectuses of the Fund and reports to recipients other than the existing
shareholders of the Fund; (4) obtaining such information, analyses and reports
with respect to marketing and promotional activities as the Distributor may,
from time to time, deem advisable; (5) making payments to securities dealers and
others engaged in the sale of Shares or who engage in shareholder support
services; and (6) providing training, marketing and support to such dealers with
respect to the sale of Shares.
3. In consideration for the services provided and the expenses incurred
by the Distributor pursuant to the General Distribution Agreement and paragraph
2 hereof, all with respect to Class T Shares, Class T shall pay to the
Distributor a fee at the annual rate of 0.75% (or such lesser amount as the
Trustees may, from time to time, determine) of the average daily net assets of
Class T throughout the month. The determination of daily net assets shall be
made at the close of business each day throughout the month and computed in the
manner specified in the Fund's then current Prospectus for the determination of
the net asset value of the Fund's Class T Shares. The Distributor may use all or
any portion of the fee received pursuant to this Plan to compensate securities
dealers or other persons who have engaged in the sale of Class T Shares or in
shareholder support services pursuant to agreements with the Distributor, or to
pay any of the expenses associated with other activities authorized under
paragraph 2 hereof.
4. The Fund presently pays, and will continue to pay, a management fee
to Fidelity Management & Research Company (the "Adviser") pursuant to a
management agreement between the Fund and the Adviser (the "Management
Contract"). It is recognized that the Adviser may use its management fee
revenue, as well as its past profits or its resources from any other source, to
make payment to the Distributor with respect to any expenses incurred in
connection with the distribution of Class T Shares, including the activities
referred to in paragraph 2 hereof. To the extent that the payment of management
fees by the Fund to the Adviser should be deemed to be indirect financing of any
activity primarily intended to result in the sale of Class T Shares within the
meaning of Rule 12b-1, then such payment shall be deemed to be authorized by
this Plan.
<PAGE>
5. This Plan shall become effective upon the approval by a vote of a
majority of the Trustees of the Trust, including a majority of Trustees who are
not "interested persons" of the Trust (as defined in the Act) and who have no
direct or indirect financial interest in the operation of this Plan or in any
agreement related to the Plan (the "Independent Trustees"), cast in person at a
meeting called for the purpose of voting on this Plan.
6. This Plan shall, unless terminated as hereinafter provided, remain in
effect until April 30, 1999, and from year to year thereafter; provided,
however, that such continuance is subject to approval annually by a vote of a
majority of the Trustees of the Trust, including a majority of the Independent
Trustees, cast in person at a meeting called for the purpose of voting on this
Plan. This Plan may be amended at any time by the Board of Trustees, provided
that (a) any amendment to increase materially the fee provided for in paragraph
3 hereof or any amendment of the Management Contract to increase the amount to
be paid by the Fund thereunder shall be effective only upon approval by a vote
of a majority of the outstanding voting securities of Class T, in the case of
this Plan, or upon approval by a vote of a majority of the outstanding voting
securities of the Fund, in the case of the Management Contract, and (b) any
material amendment of this Plan shall be effective only upon approval in the
manner provided in the first sentence of this paragraph 6.
7. This Plan may be terminated at any time, without the payment of any
penalty, by vote of a majority of the Independent Trustees or by a vote of a
majority of the outstanding voting securities of Class T.
8. During the existence of this Plan, the Trust shall require the
Adviser and/or the Distributor to provide the Trust, for review by the Trustees,
and the Trustees shall review, at least quarterly, a written report of the
amounts expended in connection with financing any activity primarily intended to
result in the sale of shares of Class T (making estimates of such costs where
necessary or desirable) and the purposes for which such expenditures were made.
9. This Plan does not require the Adviser or Distributor to perform any
specific type or level of distribution activities or to incur any specific level
of expenses for activities primarily intended to result in the sale of Class T
Shares.
10. Consistent with the limitation of shareholder liability as set forth
in the Trust's Declaration of Trust, obligation assumed by Class T pursuant to
this Plan and any agreement related to this Plan shall be limited in all cases
to Class T and its assets and shall not constitute an obligation of any
shareholder of the Trust or of any other class of the Fund, series of the Trust
or class of such series.
11. If any provision of the Plan shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Plan shall not
be affected thereby.
2
Exhibit 15(pp)
FORM OF
DISTRIBUTION AND SERVICE PLAN
FIDELITY ADVISOR DIVIDEND GROWTH FUND
Class B Shares
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by Rule 12b-1
under the Investment Company Act of 1940, as amended (the "Act") for Class B
shares of Fidelity Advisor Dividend Growth Fund ("Class B"), a class of shares
of Fidelity Advisor Dividend Growth Fund (the "Fund"), a series of Fidelity
Advisor Series I (the "Trust").
2. The Trust has entered into a General Distribution Agreement on
behalf of the Fund with Fidelity Distributors Corporation (the "Distributor")
under which the Distributor uses all reasonable efforts, consistent with its
other business, to secure purchasers of the Fund's shares of beneficial interest
(the "Shares"). Such efforts may include, but neither are required to include
nor are limited to, the following: (1) formulation and implementation of
marketing and promotional activities, such as mail promotions and television,
radio, newspaper, magazine and other mass media advertising; (2) preparation,
printing and distribution of sales literature; (3) preparation, printing and
distribution of prospectuses of the Fund and reports to recipients other than
existing shareholders of the Fund; (4) obtaining such information, analyses and
reports with respect to marketing and promotional activities as the Distributor
may, from time to time, deem advisable; (5) making payments to securities
dealers and others engaged in the sale of Shares or in shareholder support
services ("Investment Professionals"); and (6) providing training, marketing and
support to Investment Professionals with respect to the sale of Shares.
3. In accordance with such terms as the Trustees may, from time to time
establish, and in conjunction with its services under the General Distribution
Agreement with respect to Class B Shares, the Distributor is hereby expressly
authorized to make payments to Investment Professionals in connection with the
sale of Class B Shares. Such payments may be paid as a percentage of the dollar
amount of purchases of Class B Shares attributable to a particular Investment
Professional, or may take such other form as may be approved by the Trustees.
4. In consideration of the services provided and the expenses incurred
by the Distributor pursuant to the General Distribution Agreement and paragraphs
2 and 3 hereof, all with respect to Class B Shares:
(a) Class B shall pay to the Distributor a monthly distribution fee at
the annual rate of 0.75% (or such lesser amount as the Trustees may, from time
to time, determine) of the average daily net assets of Class B throughout the
month. The determination of daily net assets shall be made at the close of
business each day throughout the month and computed in the manner specified in
the Fund's then current Prospectus for the determination of the net asset value
of Class B Shares, but shall exclude assets attributable to any other class of
Shares of the Fund. The Distributor may, but shall not be required to, use all
or any portion of the distribution fee received pursuant to the Plan to
compensate Investment Professionals who have engaged in the sale of Class B
Shares or in shareholder support services with respect to Class B Shares
<PAGE>
pursuant to agreements with the Distributor, or to pay any of the expenses
associated with other activities authorized under paragraphs 2 and 3 hereof; and
(b) In addition, the Plan recognizes that the Distributor may, in
accordance with such terms as the Trustees may from time to time establish,
receive all or a portion of any sales charges, including contingent deferred
sales charges, which may be imposed upon the sale or redemption of Class B
Shares.
5. Separate from any payments made as described in paragraph 4 hereof,
Class B shall also pay to the Distributor a service fee at the annual rate of
0.25% (or such lesser amount as the Trustees may, from time to time, determine)
of the average daily net assets of Class B throughout the month. The
determination of daily net assets shall be made at the close of business each
day throughout the month and computed in the manner specified in the Fund's then
current Prospectus for the determination of the net asset value of Class B
Shares, but shall exclude assets attributable to any other class of Shares of
the Fund. In accordance with such terms as the Trustees may from time to time
establish, the Distributor may use all or a portion of such service fees to
compensate Investment Professionals for personal service and/or the maintenance
of shareholder accounts, or for other services for which "service fees" lawfully
may be paid in accordance with applicable rules and regulations.
6. The Fund presently pays, and will continue to pay, a management fee
to Fidelity Management & Research Company (the "Adviser") pursuant to a
management agreement between the Fund and the Adviser (the "Management
Contract"). It is recognized that the Adviser may use its management fee
revenue, as well as its past profits or its resources from any other source, to
make payment to the Distributor with respect to any expenses incurred in
connection with the distribution of Class B Shares, including the activities
referred to in paragraphs 2 and 3 hereof. To the extent that the payment of
management fees by the Fund to the Adviser should be deemed to be indirect
financing of any activity primarily intended to result in the sale of Class B
Shares within the meaning of Rule 12b-1, then such payment shall be deemed to be
authorized by this Plan.
7. This Plan shall become effective upon the approval by a vote of a
majority of the Trustees of the Trust, including a majority of Trustees who are
not "interested persons" of the Trust (as defined in the Act) and who have no
direct or indirect financial interest in the operation of the Plan or in any
agreement related to the Plan (the "Independent Trustees"), cast in person at a
meeting called for the purpose of voting on this Plan.
8. This Plan shall, unless terminated as hereinafter provided, remain
in effect until April 30, 1999, and from year to year thereafter; provided,
however, that such continuance is subject to approval annually by a vote of a
majority of the Trustees of the Trust, including a majority of the Independent
Trustees, cast in person at a meeting called for the purpose of voting on this
Plan. This Plan may be amended at any time by the Board of Trustees, provided
that (a) any amendment to increase materially the fees provided for in
paragraphs 4 and 5 hereof or any amendment of the Management Contract to
increase the amount to be paid by the Fund thereunder shall be effective only
upon approval by a vote of a majority of the outstanding voting securities of
Class B, in the case of this Plan, or upon approval by a vote of the majority of
2
<PAGE>
the outstanding voting securities of the Fund, in the case of the Management
Contract, and (b) any material amendment of this Plan shall be effective only
upon approval in the manner provided in the first sentence of this paragraph 8.
9. This Plan may be terminated at any time, without the payment of any
penalty, by vote of a majority of the Independent Trustees or by a vote of a
majority of the outstanding voting securities of Class B.
10. During the existence of this Plan, the Trust shall require the
Adviser and/or the Distributor to provide the Trust, for review by the Trustees,
and the Trustees shall review, at least quarterly, a written report of the
amounts expended in connection with financing any activity primarily intended to
result in the sale of Class B Shares (making estimates of such costs where
necessary or desirable) and the purposes for which such expenditures were made.
11. This Plan does not require the Adviser or Distributor to perform
any specific type or level of distribution activities or to incur any specific
level of expenses for activities primarily intended to result in the sale of
Class B Shares.
12. Consistent with the limitation of shareholder liability as set
forth in the Trust's Declaration of Trust, any obligation assumed by Class B
pursuant to this Plan and any agreement related to this Plan shall be limited in
all cases to Class B and its assets and shall not constitute an obligation of
any shareholder of the Trust or of any other class of the Fund, series of the
Trust or class of such series.
13. If any provision of this Plan shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Plan shall not
be affected thereby.
3
Exhibit 15(qq)
FORM OF
DISTRIBUTION AND SERVICE PLAN
FIDELITY ADVISOR DIVIDEND GROWTH FUND
Class C Shares
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by Rule 12b-1
under the Investment Company Act of 1940, as amended (the "Act"), for Class C
Shares of Fidelity Advisor Dividend Growth Fund ("Class C"), a class of shares
of Fidelity Advisor Dividend Growth Fund (the "Fund"), a series of Fidelity
Advisor Series I (the "Trust").
2. The Trust has entered into a General Distribution Agreement on
behalf of the Fund with Fidelity Distributors Corporation (the "Distributor")
under which the Distributor uses all reasonable efforts, consistent with its
other business, to secure purchasers of the Fund's shares of beneficial interest
(the "Shares"). Such efforts may include, but neither are required to include
nor are limited to, the following: (1) formulation and implementation of
marketing and promotional activities, such as mail promotions and television,
radio, newspaper, magazine and other mass media advertising; (2) preparation,
printing and distribution of sales literature; (3) preparation, printing and
distribution of prospectuses of the Fund and reports to recipients other than
existing shareholders of the Fund; (4) obtaining such information, analyses and
reports with respect to marketing and promotional activities as the Distributor
may, from time to time, deem advisable; (5) making payments to securities
dealers and others engaged in the sale of Shares or in shareholder support
services ("Investment Professionals"); and (6) providing training, marketing and
support to Investment Professionals with respect to the sale of Shares.
3. In accordance with such terms as the Trustees may, from time to time
establish, and in conjunction with its services under the General Distribution
Agreement with respect to Class C Shares, the Distributor is hereby expressly
authorized to make payments to Investment Professionals in connection with the
sale of Class C Shares. Such payments may be paid as a percentage of the dollar
amount of purchases of Class C Shares attributable to a particular Investment
Professional, or may take such other form as may be approved by the Trustees.
4. In consideration of the services provided and the expenses incurred
by the Distributor pursuant to the General Distribution Agreement and paragraphs
2 and 3 hereof, all with respect to Class C Shares:
(a) Class C shall pay to the Distributor a monthly distribution fee at
the annual rate of 0.75% (or such lesser amount as the Trustees may, from time
to time, determine) of the average daily net assets of Class C throughout the
month. The determination of daily net assets shall be made at the close of
business each day throughout the month and computed in the manner specified in
the Fund's then current Prospectus for the determination of the net asset value
of Class C Shares, but shall exclude assets attributable to any other class of
Shares of the Fund. The Distributor may, but shall not be required to, use all
or any portion of the distribution fee received pursuant to the Plan to
compensate Investment Professionals who have engaged in the sale of Class C
Shares or in shareholder support services with respect to Class C Shares
<PAGE>
pursuant to agreements with the Distributor, or to pay any of the expenses
associated with other activities authorized under paragraphs 2 and 3 hereof; and
(b) In addition, the Plan recognizes that the Distributor may, in
accordance with such terms as the Trustees may from time to time establish,
receive all or a portion of any sales charges, including contingent deferred
sales charges, which may be imposed upon the sale or redemption of Class C
Shares.
5. Separate from any payments made as described in paragraph 4 hereof,
Class C shall also pay to the Distributor a service fee at the annual rate of
0.25% (or such lesser amount as the Trustees may, from time to time, determine)
of the average daily net assets of Class C throughout the month. The
determination of daily net assets shall be made at the close of business each
day throughout the month and computed in the manner specified in the Fund's then
current Prospectus for the determination of the net asset value of Class C
Shares, but shall exclude assets attributable to any other class of Shares of
the Fund. In accordance with such terms as the Trustees may from time to time
establish, the Distributor may use all or a portion of such service fees to
compensate Investment Professionals for personal service and/or the maintenance
of shareholder accounts, or for other services for which "service fees" lawfully
may be paid in accordance with applicable rules and regulations.
6. The Fund presently pays, and will continue to pay, a management fee
to Fidelity Management & Research Company (the "Adviser") pursuant to a
management agreement between the Fund and the Adviser (the "Management
Contract"). It is recognized that the Adviser may use its management fee
revenue, as well as its past profits or its resources from any other source, to
make payment to the Distributor with respect to any expenses incurred in
connection with the distribution of Class C Shares, including the activities
referred to in paragraphs 2 and 3 hereof. To the extent that the payment of
management fees by the Fund to the Adviser should be deemed to be indirect
financing of any activity primarily intended to result in the sale of Class C
Shares within the meaning of Rule 12b-1, then such payment shall be deemed to be
authorized by this Plan.
7. This Plan shall become effective upon approval by a vote of a
majority of the Trustees of the Trust, including a majority of Trustees who are
not "interested persons" of the Trust (as defined in the Act) and who have no
direct or indirect financial interest in the operation of the Plan or in any
agreement related to the Plan (the "Independent Trustees"), cast in person at a
meeting called for the purpose of voting on this Plan.
8. This Plan shall, unless terminated as hereinafter provided, remain
in effect until April 30, 1999, and from year to year thereafter; provided,
however, that such continuance is subject to approval annually by a vote of a
majority of the Trustees of the Trust, including a majority of the Independent
Trustees, cast in person at a meeting called for the purpose of voting on this
Plan. This Plan may be amended at any time by the Board of Trustees, provided
that (a) any amendment to increase materially the fees provided for in
paragraphs 4 and 5 hereof or any amendment of the Management Contract to
increase the amount to be paid by the Fund thereunder shall be effective only
upon approval by a vote of a majority of the outstanding voting securities of
Class C, in the case of this Plan, or upon approval by a vote of the majority of
the outstanding voting securities of the Fund, in the case of the Management
2
<PAGE>
Contract, and (b) any material amendment of this Plan shall be effective only
upon approval in the manner provided in the first sentence of this paragraph 8.
9. This Plan may be terminated at any time, without the payment of any
penalty, by vote of a majority of the Independent Trustees or by a vote of a
majority of the outstanding voting securities of Class C.
10. During the existence of this Plan, the Trust shall require the
Adviser and/or the Distributor to provide the Trust, for review by the Trustees,
and the Trustees shall review, at least quarterly, a written report of the
amounts expended in connection with financing any activity primarily intended to
result in the sale of Class C Shares (making estimates of such costs where
necessary or desirable) and the purposes for which such expenditures were made.
11. This Plan does not require the Adviser or Distributor to perform
any specific type or level of distribution activities or to incur any specific
level of expenses for activities primarily intended to result in the sale of
Class C Shares.
12. Consistent with the limitation of shareholder liability as set
forth in the Trust's Declaration of Trust, any obligation assumed by Class C
pursuant to this Plan and any agreement related to this Plan shall be limited in
all cases to Class C and its assets and shall not constitute an obligation of
any shareholder of the Trust or of any other class of the Fund, series of the
Trust or class of such series.
13. If any provision of this Plan shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Plan shall not
be affected thereby.
3
Exhibit 15(rr)
FORM OF
DISTRIBUTION AND SERVICE PLAN
FIDELITY ADVISOR DIVIDEND GROWTH FUND
Institutional Class Shares
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by Rule 12b-1
under the Investment Company Act of 1940, as amended (the "Act") for
Institutional Class Shares of Fidelity Advisor Dividend Growth Fund
("Institutional Class"), a class of shares of Fidelity Advisor Dividend Growth
Fund (the "Fund"), a series of Fidelity Advisor Series I (the "Trust").
2. The Trust has entered into a General Distribution Agreement on behalf
of the Fund with Fidelity Distributors Corporation (the "Distributor") under
which the Distributor uses all reasonable efforts, consistent with its other
business, to secure purchasers for the Fund's shares of beneficial interest
("Shares"). Under the agreement, the Distributor pays the expenses of printing
and distributing any prospectuses, reports and other literature used by the
Distributor, advertising, and other promotional activities in connection with
the offering of Shares of the Fund for sale to the public. It is recognized that
Fidelity Management & Research Company (the "Adviser") may use its management
fee revenues as well as past profits or its resources from any other source, to
make payment to the Distributor with respect to any expenses incurred in
connection with the distribution of Institutional Class Shares, including the
activities referred to above.
3. The Adviser directly, or through the Distributor, may, subject to the
approval of the Trustees, make payments to securities dealers and other third
parties who engage in the sale of Institutional Class Shares or who render
shareholder support services, including but not limited to providing office
space, equipment and telephone facilities, answering routine inquiries regarding
the Fund, processing shareholder transactions and providing such other
shareholder services as the Trust may reasonably request.
4. The Institutional Class will not make separate payments as a result
of this Plan to the Adviser, Distributor or any other party, it being recognized
that the Fund presently pays, and will continue to pay, a management fee to the
Adviser. To the extent that any payments made by the Fund to the Adviser,
including payment of management fees, should be deemed to be indirect financing
of any activity primarily intended to result in the sale of Institutional Class
Shares within the meaning of Rule 12b-1, then such payments shall be deemed to
be authorized by this Plan.
5. This Plan shall become effective upon the approval by a vote of a
majority of the Trustees of the Trust, including a majority of Trustees who are
not "interested persons" of the Trust (as defined in the Act) and who have no
direct or indirect financial interest in the operation of this Plan or in any
agreement related to the Plan (the "Independent Trustees"), cast in person at a
meeting called for the purpose of voting on this Plan.
6. This Plan shall, unless terminated as hereinafter provided, remain in
effect until April 30, 1999, and from year to year thereafter, provided,
however, that such continuance is subject to approval annually by a vote of a
majority of the Trustees of the Trust, including a majority of the Independent
Trustees, cast in person at a meeting called for the purpose of voting on this
<PAGE>
Plan. This Plan may be amended at any time by the Board of Trustees, provided
that (a) any amendment to authorize direct payments by the Institutional Class
to finance any activity primarily intended to result in the sale of
Institutional Class Shares, to increase materially the amount spent by the
Institutional Class for distribution, or any amendment of the Management
Contract to increase the amount to be paid by the Fund thereunder shall be
effective only upon approval by a vote of a majority of the outstanding voting
securities of the Institutional Class, in the case of this Plan, or upon
approval by a vote of a majority of the outstanding voting securities of the
Fund, in the case of the Management Contract, and (b) any material amendments of
this Plan shall be effective only upon approval in the manner provided in the
first sentence in this paragraph 6.
7. This Plan may be terminated at any time, without the payment of any
penalty, by vote of a majority of the Independent Trustees or by a vote of a
majority of the outstanding voting securities of the Institutional Class.
8. During the existence of this Plan, the Trust shall require the
Adviser and/or Distributor to provide the Trust, for review by the Trustees, and
the Trustees shall review, at least quarterly, a written report of the amounts
expended in connection with financing any activity primarily intended to result
in the sale of Institutional Class Shares (making estimates of such costs where
necessary or desirable) and the purposes for which such expenditures were made.
9. This Plan does not require the Adviser or Distributor to perform any
specific type or level of distribution activities or to incur any specific level
of expenses for activities primarily intended to result in the sale of
Institutional Class Shares.
10. Consistent with the limitation of shareholder liability as set forth
in the Trust's Declaration of Trust, any obligation assumed by Institutional
Class pursuant to this Plan and any agreement related to this Plan shall be
limited in all cases to Institutional Class and its assets and shall not
constitute an obligation of any shareholder of the Trust or of any other class
of the Fund, series of the Trust or class of such series.
11. If any provision of this Plan shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Plan shall not
be affected thereby.
2
Exhibit 15(ss)
FORM OF
DISTRIBUTION AND SERVICE PLAN
FIDELITY ADVISOR RETIREMENT GROWTH FUND
Class A Shares
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by Rule 12b-1
under the Investment Company Act of 1940, as amended (the "Act") for the Class A
shares of Fidelity Advisor Retirement Growth Fund ("Class A"), a class of shares
of Fidelity Advisor Retirement Growth Fund (the "Fund"), a portfolio of Fidelity
Advisor Series I (the "Trust").
2. The Trust has entered into a General Distribution Agreement on behalf
of the Fund with Fidelity Distributors Corporation (the "Distributor"), under
which the Distributor uses all reasonable efforts, consistent with its other
business, to secure purchasers of the Fund's shares of beneficial interest (the
"Shares"). Such efforts may include, but neither are required to include nor are
limited to, the following: (1) formulation and implementation of marketing and
promotional activities, such as mail promotions and television, radio,
newspaper, magazine and other mass media advertising; (2) preparation, printing
and distribution of sales literature; (3) preparation, printing and distribution
of prospectuses of the Fund and reports to recipients other than the existing
shareholders of the Fund; (4) obtaining such information, analyses and reports
with respect to marketing and promotional activities as the Distributor may,
from time to time, deem advisable; (5) making payments to securities dealers and
others engaged in the sale of Shares or who engage in shareholder support
services; and (6) providing training, marketing and support to such dealers with
respect to the sale of Shares.
3. In consideration for the services provided and the expenses incurred
by the Distributor pursuant to the General Distribution Agreement and paragraph
2 hereof, all with respect to Class A Shares, Class A shall pay to the
Distributor a fee at the annual rate of 0.75% (or such lesser amount as the
Trustees may, from time to time, determine) of the average daily net assets of
Class A throughout the month. The determination of daily net assets shall be
made at the close of business each day throughout the month and computed in the
manner specified in the Fund's then current Prospectus for the determination of
the net asset value of the Fund's Class A Shares. The Distributor may use all or
any portion of the fee received pursuant to this Plan to compensate securities
dealers or other persons who have engaged in the sale of Class A Shares or in
shareholder support services pursuant to agreements with the Distributor, or to
pay any of the expenses associated with other activities authorized under
paragraph 2 hereof.
4. The Fund presently pays, and will continue to pay, a management fee
to Fidelity Management & Research Company (the "Adviser") pursuant to a
management agreement between the Fund and the Adviser (the "Management
Contract"). It is recognized that the Adviser may use its management fee
revenue, as well as its past profits or its resources from any other source, to
make payment to the Distributor with respect to any expenses incurred in
connection with the distribution of Class A Shares, including the activities
referred to in paragraph 2 hereof. To the extent that the payment of management
fees by the Fund to the Adviser should be deemed to be indirect financing of any
activity primarily intended to result in the sale of Class A Shares within the
meaning of Rule 12b-1, then such payment shall be deemed to be authorized by
this Plan.
5. This Plan shall become effective upon the approval by a vote of a
majority of the Trustees of the Trust, including a majority of Trustees who are
not "interested persons" of the Trust (as defined in the Act) and who have no
direct or indirect financial interest in the operation of this Plan or in any
agreement related to the Plan (the "Independent Trustees"), cast in person at a
meeting called for the purpose of voting on this Plan.
<PAGE>
6. This Plan shall, unless terminated as hereinafter provided, remain in
effect until April 30, 1999, and from year to year thereafter; provided,
however, that such continuance is subject to approval annually by a vote of a
majority of the Trustees of the Trust, including a majority of the Independent
Trustees, cast in person at a meeting called for the purpose of voting on this
Plan. This Plan may be amended at any time by the Board of Trustees, provided
that (a) any amendment to increase materially the fee provided for in paragraph
3 hereof or any amendment of the Management Contract to increase the amount to
be paid by the Fund thereunder shall be effective only upon approval by a vote
of a majority of the outstanding voting securities of Class A, in the case of
this Plan, or upon approval by a vote of a majority of the outstanding voting
securities of the Fund, in the case of the Management Contract, and (b) any
material amendment of this Plan shall be effective only upon approval in the
manner provided in the first sentence of this paragraph 6.
7. This Plan may be terminated at any time, without the payment of any
penalty, by vote of a majority of the Independent Trustees or by a vote of a
majority of the outstanding voting securities of Class A.
8. During the existence of this Plan, the Trust shall require the
Adviser and/or the Distributor to provide the Trust, for review by the Trustees,
and the Trustees shall review, at least quarterly, a written report of the
amounts expended in connection with financing any activity primarily intended to
result in the sale of shares of Class A (making estimates of such costs where
necessary or desirable) and the purposes for which such expenditures were made.
9. This Plan does not require the Adviser or Distributor to perform any
specific type or level of distribution activities or to incur any specific level
of expenses for activities primarily intended to result in the sale of Class A
Shares.
10. Consistent with the limitation of shareholder liability as set forth
in the Trust's Declaration of Trust, obligation assumed by Class A pursuant to
this Plan and any agreement related to this Plan shall be limited in all cases
to Class A and its assets and shall not constitute an obligation of any
shareholder of the Trust or of any other class of the Fund, series of the Trust
or class of such series.
11. If any provision of the Plan shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Plan shall not
be affected thereby.
2
Exhibit 15(tt)
FORM OF
DISTRIBUTION AND SERVICE PLAN
FIDELITY ADVISOR RETIREMENT GROWTH FUND
Class T Shares
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by Rule 12b-1
under the Investment Company Act of 1940, as amended (the "Act") for the Class T
shares of Fidelity Advisor Retirement Growth Fund ("Class T"), a class of shares
of Fidelity Advisor Retirement Growth Fund (the "Fund"), a portfolio of Fidelity
Advisor Series I (the "Trust").
2. The Trust has entered into a General Distribution Agreement on behalf
of the Fund with Fidelity Distributors Corporation (the "Distributor"), under
which the Distributor uses all reasonable efforts, consistent with its other
business, to secure purchasers of the Fund's shares of beneficial interest (the
"Shares"). Such efforts may include, but neither are required to include nor are
limited to, the following: (1) formulation and implementation of marketing and
promotional activities, such as mail promotions and television, radio,
newspaper, magazine and other mass media advertising; (2) preparation, printing
and distribution of sales literature; (3) preparation, printing and distribution
of prospectuses of the Fund and reports to recipients other than the existing
shareholders of the Fund; (4) obtaining such information, analyses and reports
with respect to marketing and promotional activities as the Distributor may,
from time to time, deem advisable; (5) making payments to securities dealers and
others engaged in the sale of Shares or who engage in shareholder support
services; and (6) providing training, marketing and support to such dealers with
respect to the sale of Shares.
3. In consideration for the services provided and the expenses incurred
by the Distributor pursuant to the General Distribution Agreement and paragraph
2 hereof, all with respect to Class T Shares, Class T shall pay to the
Distributor a fee at the annual rate of 0.75% (or such lesser amount as the
Trustees may, from time to time, determine) of the average daily net assets of
Class T throughout the month. The determination of daily net assets shall be
made at the close of business each day throughout the month and computed in the
manner specified in the Fund's then current Prospectus for the determination of
the net asset value of the Fund's Class T Shares. The Distributor may use all or
any portion of the fee received pursuant to this Plan to compensate securities
dealers or other persons who have engaged in the sale of Class T Shares or in
shareholder support services pursuant to agreements with the Distributor, or to
pay any of the expenses associated with other activities authorized under
paragraph 2 hereof.
4. The Fund presently pays, and will continue to pay, a management fee
to Fidelity Management & Research Company (the "Adviser") pursuant to a
management agreement between the Fund and the Adviser (the "Management
Contract"). It is recognized that the Adviser may use its management fee
revenue, as well as its past profits or its resources from any other source, to
make payment to the Distributor with respect to any expenses incurred in
connection with the distribution of Class T Shares, including the activities
referred to in paragraph 2 hereof. To the extent that the payment of management
fees by the Fund to the Adviser should be deemed to be indirect financing of any
activity primarily intended to result in the sale of Class T Shares within the
meaning of Rule 12b-1, then such payment shall be deemed to be authorized by
this Plan.
<PAGE>
5. This Plan shall become effective upon the approval by a vote of a
majority of the Trustees of the Trust, including a majority of Trustees who are
not "interested persons" of the Trust (as defined in the Act) and who have no
direct or indirect financial interest in the operation of this Plan or in any
agreement related to the Plan (the "Independent Trustees"), cast in person at a
meeting called for the purpose of voting on this Plan.
6. This Plan shall, unless terminated as hereinafter provided, remain in
effect until April 30, 1999, and from year to year thereafter; provided,
however, that such continuance is subject to approval annually by a vote of a
majority of the Trustees of the Trust, including a majority of the Independent
Trustees, cast in person at a meeting called for the purpose of voting on this
Plan. This Plan may be amended at any time by the Board of Trustees, provided
that (a) any amendment to increase materially the fee provided for in paragraph
3 hereof or any amendment of the Management Contract to increase the amount to
be paid by the Fund thereunder shall be effective only upon approval by a vote
of a majority of the outstanding voting securities of Class T, in the case of
this Plan, or upon approval by a vote of a majority of the outstanding voting
securities of the Fund, in the case of the Management Contract, and (b) any
material amendment of this Plan shall be effective only upon approval in the
manner provided in the first sentence of this paragraph 6.
7. This Plan may be terminated at any time, without the payment of any
penalty, by vote of a majority of the Independent Trustees or by a vote of a
majority of the outstanding voting securities of Class T.
8. During the existence of this Plan, the Trust shall require the
Adviser and/or the Distributor to provide the Trust, for review by the Trustees,
and the Trustees shall review, at least quarterly, a written report of the
amounts expended in connection with financing any activity primarily intended to
result in the sale of shares of Class T (making estimates of such costs where
necessary or desirable) and the purposes for which such expenditures were made.
9. This Plan does not require the Adviser or Distributor to perform any
specific type or level of distribution activities or to incur any specific level
of expenses for activities primarily intended to result in the sale of Class T
Shares.
10. Consistent with the limitation of shareholder liability as set forth
in the Trust's Declaration of Trust, obligation assumed by Class T pursuant to
this Plan and any agreement related to this Plan shall be limited in all cases
to Class T and its assets and shall not constitute an obligation of any
shareholder of the Trust or of any other class of the Fund, series of the Trust
or class of such series.
11. If any provision of the Plan shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Plan shall not
be affected thereby.
2
Exhibit 15(uu)
FORM OF
DISTRIBUTION AND SERVICE PLAN
FIDELITY ADVISOR RETIREMENT GROWTH FUND
Class B Shares
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by Rule 12b-1
under the Investment Company Act of 1940, as amended (the "Act") for Class B
shares of Fidelity Advisor Retirement Growth Fund ("Class B"), a class of shares
of Fidelity Advisor Retirement Growth Fund (the "Fund"), a series of Fidelity
Advisor Series I (the "Trust").
2. The Trust has entered into a General Distribution Agreement on
behalf of the Fund with Fidelity Distributors Corporation (the "Distributor")
under which the Distributor uses all reasonable efforts, consistent with its
other business, to secure purchasers of the Fund's shares of beneficial interest
(the "Shares"). Such efforts may include, but neither are required to include
nor are limited to, the following: (1) formulation and implementation of
marketing and promotional activities, such as mail promotions and television,
radio, newspaper, magazine and other mass media advertising; (2) preparation,
printing and distribution of sales literature; (3) preparation, printing and
distribution of prospectuses of the Fund and reports to recipients other than
existing shareholders of the Fund; (4) obtaining such information, analyses and
reports with respect to marketing and promotional activities as the Distributor
may, from time to time, deem advisable; (5) making payments to securities
dealers and others engaged in the sale of Shares or in shareholder support
services ("Investment Professionals"); and (6) providing training, marketing and
support to Investment Professionals with respect to the sale of Shares.
3. In accordance with such terms as the Trustees may, from time to time
establish, and in conjunction with its services under the General Distribution
Agreement with respect to Class B Shares, the Distributor is hereby expressly
authorized to make payments to Investment Professionals in connection with the
sale of Class B Shares. Such payments may be paid as a percentage of the dollar
amount of purchases of Class B Shares attributable to a particular Investment
Professional, or may take such other form as may be approved by the Trustees.
4. In consideration of the services provided and the expenses incurred
by the Distributor pursuant to the General Distribution Agreement and paragraphs
2 and 3 hereof, all with respect to Class B Shares:
(a) Class B shall pay to the Distributor a monthly distribution fee at
the annual rate of 0.75% (or such lesser amount as the Trustees may, from time
to time, determine) of the average daily net assets of Class B throughout the
month. The determination of daily net assets shall be made at the close of
business each day throughout the month and computed in the manner specified in
the Fund's then current Prospectus for the determination of the net asset value
of Class B Shares, but shall exclude assets attributable to any other class of
Shares of the Fund. The Distributor may, but shall not be required to, use all
or any portion of the distribution fee received pursuant to the Plan to
compensate Investment Professionals who have engaged in the sale of Class B
Shares or in shareholder support services with respect to Class B Shares
<PAGE>
pursuant to agreements with the Distributor, or to pay any of the expenses
associated with other activities authorized under paragraphs 2 and 3 hereof; and
(b) In addition, the Plan recognizes that the Distributor may, in
accordance with such terms as the Trustees may from time to time establish,
receive all or a portion of any sales charges, including contingent deferred
sales charges, which may be imposed upon the sale or redemption of Class B
Shares.
5. Separate from any payments made as described in paragraph 4 hereof,
Class B shall also pay to the Distributor a service fee at the annual rate of
0.25% (or such lesser amount as the Trustees may, from time to time, determine)
of the average daily net assets of Class B throughout the month. The
determination of daily net assets shall be made at the close of business each
day throughout the month and computed in the manner specified in the Fund's then
current Prospectus for the determination of the net asset value of Class B
Shares, but shall exclude assets attributable to any other class of Shares of
the Fund. In accordance with such terms as the Trustees may from time to time
establish, the Distributor may use all or a portion of such service fees to
compensate Investment Professionals for personal service and/or the maintenance
of shareholder accounts, or for other services for which "service fees" lawfully
may be paid in accordance with applicable rules and regulations.
6. The Fund presently pays, and will continue to pay, a management fee
to Fidelity Management & Research Company (the "Adviser") pursuant to a
management agreement between the Fund and the Adviser (the "Management
Contract"). It is recognized that the Adviser may use its management fee
revenue, as well as its past profits or its resources from any other source, to
make payment to the Distributor with respect to any expenses incurred in
connection with the distribution of Class B Shares, including the activities
referred to in paragraphs 2 and 3 hereof. To the extent that the payment of
management fees by the Fund to the Adviser should be deemed to be indirect
financing of any activity primarily intended to result in the sale of Class B
Shares within the meaning of Rule 12b-1, then such payment shall be deemed to be
authorized by this Plan.
7. This Plan shall become effective upon the approval by a vote of a
majority of the Trustees of the Trust, including a majority of Trustees who are
not "interested persons" of the Trust (as defined in the Act) and who have no
direct or indirect financial interest in the operation of the Plan or in any
agreement related to the Plan (the "Independent Trustees"), cast in person at a
meeting called for the purpose of voting on this Plan.
8. This Plan shall, unless terminated as hereinafter provided, remain
in effect until April 30, 1999, and from year to year thereafter; provided,
however, that such continuance is subject to approval annually by a vote of a
majority of the Trustees of the Trust, including a majority of the Independent
Trustees, cast in person at a meeting called for the purpose of voting on this
Plan. This Plan may be amended at any time by the Board of Trustees, provided
that (a) any amendment to increase materially the fees provided for in
paragraphs 4 and 5 hereof or any amendment of the Management Contract to
increase the amount to be paid by the Fund thereunder shall be effective only
upon approval by a vote of a majority of the outstanding voting securities of
Class B, in the case of this Plan, or upon approval by a vote of the majority of
2
<PAGE>
the outstanding voting securities of the Fund, in the case of the Management
Contract, and (b) any material amendment of this Plan shall be effective only
upon approval in the manner provided in the first sentence of this paragraph 8.
9. This Plan may be terminated at any time, without the payment of any
penalty, by vote of a majority of the Independent Trustees or by a vote of a
majority of the outstanding voting securities of Class B.
10. During the existence of this Plan, the Trust shall require the
Adviser and/or the Distributor to provide the Trust, for review by the Trustees,
and the Trustees shall review, at least quarterly, a written report of the
amounts expended in connection with financing any activity primarily intended to
result in the sale of Class B Shares (making estimates of such costs where
necessary or desirable) and the purposes for which such expenditures were made.
11. This Plan does not require the Adviser or Distributor to perform
any specific type or level of distribution activities or to incur any specific
level of expenses for activities primarily intended to result in the sale of
Class B Shares.
12. Consistent with the limitation of shareholder liability as set
forth in the Trust's Declaration of Trust, any obligation assumed by Class B
pursuant to this Plan and any agreement related to this Plan shall be limited in
all cases to Class B and its assets and shall not constitute an obligation of
any shareholder of the Trust or of any other class of the Fund, series of the
Trust or class of such series.
13. If any provision of this Plan shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Plan shall not
be affected thereby.
3
Exhibit 15(vv)
FORM OF
DISTRIBUTION AND SERVICE PLAN
FIDELITY ADVISOR RETIREMENT GROWTH FUND
Class C Shares
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by Rule 12b-1
under the Investment Company Act of 1940, as amended (the "Act"), for Class C
Shares of Fidelity Advisor Retirement Growth Fund ("Class C"), a class of shares
of Fidelity Advisor Retirement Growth Fund (the "Fund"), a series of Fidelity
Advisor Series I (the "Trust").
2. The Trust has entered into a General Distribution Agreement on
behalf of the Fund with Fidelity Distributors Corporation (the "Distributor")
under which the Distributor uses all reasonable efforts, consistent with its
other business, to secure purchasers of the Fund's shares of beneficial interest
(the "Shares"). Such efforts may include, but neither are required to include
nor are limited to, the following: (1) formulation and implementation of
marketing and promotional activities, such as mail promotions and television,
radio, newspaper, magazine and other mass media advertising; (2) preparation,
printing and distribution of sales literature; (3) preparation, printing and
distribution of prospectuses of the Fund and reports to recipients other than
existing shareholders of the Fund; (4) obtaining such information, analyses and
reports with respect to marketing and promotional activities as the Distributor
may, from time to time, deem advisable; (5) making payments to securities
dealers and others engaged in the sale of Shares or in shareholder support
services ("Investment Professionals"); and (6) providing training, marketing and
support to Investment Professionals with respect to the sale of Shares.
3. In accordance with such terms as the Trustees may, from time to time
establish, and in conjunction with its services under the General Distribution
Agreement with respect to Class C Shares, the Distributor is hereby expressly
authorized to make payments to Investment Professionals in connection with the
sale of Class C Shares. Such payments may be paid as a percentage of the dollar
amount of purchases of Class C Shares attributable to a particular Investment
Professional, or may take such other form as may be approved by the Trustees.
4. In consideration of the services provided and the expenses incurred
by the Distributor pursuant to the General Distribution Agreement and paragraphs
2 and 3 hereof, all with respect to Class C Shares:
(a) Class C shall pay to the Distributor a monthly distribution fee at
the annual rate of 0.75% (or such lesser amount as the Trustees may, from time
to time, determine) of the average daily net assets of Class C throughout the
month. The determination of daily net assets shall be made at the close of
business each day throughout the month and computed in the manner specified in
the Fund's then current Prospectus for the determination of the net asset value
of Class C Shares, but shall exclude assets attributable to any other class of
Shares of the Fund. The Distributor may, but shall not be required to, use all
or any portion of the distribution fee received pursuant to the Plan to
compensate Investment Professionals who have engaged in the sale of Class C
Shares or in shareholder support services with respect to Class C Shares
<PAGE>
pursuant to agreements with the Distributor, or to pay any of the expenses
associated with other activities authorized under paragraphs 2 and 3 hereof; and
(b) In addition, the Plan recognizes that the Distributor may, in
accordance with such terms as the Trustees may from time to time establish,
receive all or a portion of any sales charges, including contingent deferred
sales charges, which may be imposed upon the sale or redemption of Class C
Shares.
5. Separate from any payments made as described in paragraph 4 hereof,
Class C shall also pay to the Distributor a service fee at the annual rate of
0.25% (or such lesser amount as the Trustees may, from time to time, determine)
of the average daily net assets of Class C throughout the month. The
determination of daily net assets shall be made at the close of business each
day throughout the month and computed in the manner specified in the Fund's then
current Prospectus for the determination of the net asset value of Class C
Shares, but shall exclude assets attributable to any other class of Shares of
the Fund. In accordance with such terms as the Trustees may from time to time
establish, the Distributor may use all or a portion of such service fees to
compensate Investment Professionals for personal service and/or the maintenance
of shareholder accounts, or for other services for which "service fees" lawfully
may be paid in accordance with applicable rules and regulations.
6. The Fund presently pays, and will continue to pay, a management fee
to Fidelity Management & Research Company (the "Adviser") pursuant to a
management agreement between the Fund and the Adviser (the "Management
Contract"). It is recognized that the Adviser may use its management fee
revenue, as well as its past profits or its resources from any other source, to
make payment to the Distributor with respect to any expenses incurred in
connection with the distribution of Class C Shares, including the activities
referred to in paragraphs 2 and 3 hereof. To the extent that the payment of
management fees by the Fund to the Adviser should be deemed to be indirect
financing of any activity primarily intended to result in the sale of Class C
Shares within the meaning of Rule 12b-1, then such payment shall be deemed to be
authorized by this Plan.
7. This Plan shall become effective upon approval by a vote of a
majority of the Trustees of the Trust, including a majority of Trustees who are
not "interested persons" of the Trust (as defined in the Act) and who have no
direct or indirect financial interest in the operation of the Plan or in any
agreement related to the Plan (the "Independent Trustees"), cast in person at a
meeting called for the purpose of voting on this Plan.
8. This Plan shall, unless terminated as hereinafter provided, remain
in effect until April 30, 1999, and from year to year thereafter; provided,
however, that such continuance is subject to approval annually by a vote of a
majority of the Trustees of the Trust, including a majority of the Independent
Trustees, cast in person at a meeting called for the purpose of voting on this
Plan. This Plan may be amended at any time by the Board of Trustees, provided
that (a) any amendment to increase materially the fees provided for in
paragraphs 4 and 5 hereof or any amendment of the Management Contract to
increase the amount to be paid by the Fund thereunder shall be effective only
upon approval by a vote of a majority of the outstanding voting securities of
Class C, in the case of this Plan, or upon approval by a vote of the majority of
the outstanding voting securities of the Fund, in the case of the Management
2
<PAGE>
Contract, and (b) any material amendment of this Plan shall be effective only
upon approval in the manner provided in the first sentence of this paragraph 8.
9. This Plan may be terminated at any time, without the payment of any
penalty, by vote of a majority of the Independent Trustees or by a vote of a
majority of the outstanding voting securities of Class C.
10. During the existence of this Plan, the Trust shall require the
Adviser and/or the Distributor to provide the Trust, for review by the Trustees,
and the Trustees shall review, at least quarterly, a written report of the
amounts expended in connection with financing any activity primarily intended to
result in the sale of Class C Shares (making estimates of such costs where
necessary or desirable) and the purposes for which such expenditures were made.
11. This Plan does not require the Adviser or Distributor to perform
any specific type or level of distribution activities or to incur any specific
level of expenses for activities primarily intended to result in the sale of
Class C Shares.
12. Consistent with the limitation of shareholder liability as set
forth in the Trust's Declaration of Trust, any obligation assumed by Class C
pursuant to this Plan and any agreement related to this Plan shall be limited in
all cases to Class C and its assets and shall not constitute an obligation of
any shareholder of the Trust or of any other class of the Fund, series of the
Trust or class of such series.
13. If any provision of this Plan shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Plan shall not
be affected thereby.
2
Exhibit 15(ww)
FORM OF
DISTRIBUTION AND SERVICE PLAN
FIDELITY ADVISOR RETIREMENT GROWTH FUND
Institutional Class Shares
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by Rule 12b-1
under the Investment Company Act of 1940, as amended (the "Act") for
Institutional Class Shares of Fidelity Advisor Retirement Growth Fund
("Institutional Class"), a class of shares of Fidelity Advisor Retirement Growth
Fund (the "Fund"), a series of Fidelity Advisor Series I (the "Trust").
2. The Trust has entered into a General Distribution Agreement on behalf
of the Fund with Fidelity Distributors Corporation (the "Distributor") under
which the Distributor uses all reasonable efforts, consistent with its other
business, to secure purchasers for the Fund's shares of beneficial interest
("Shares"). Under the agreement, the Distributor pays the expenses of printing
and distributing any prospectuses, reports and other literature used by the
Distributor, advertising, and other promotional activities in connection with
the offering of Shares of the Fund for sale to the public. It is recognized that
Fidelity Management & Research Company (the "Adviser") may use its management
fee revenues as well as past profits or its resources from any other source, to
make payment to the Distributor with respect to any expenses incurred in
connection with the distribution of Institutional Class Shares, including the
activities referred to above.
3. The Adviser directly, or through the Distributor, may, subject to the
approval of the Trustees, make payments to securities dealers and other third
parties who engage in the sale of Institutional Class Shares or who render
shareholder support services, including but not limited to providing office
space, equipment and telephone facilities, answering routine inquiries regarding
the Fund, processing shareholder transactions and providing such other
shareholder services as the Trust may reasonably request.
4. The Institutional Class will not make separate payments as a result
of this Plan to the Adviser, Distributor or any other party, it being recognized
that the Fund presently pays, and will continue to pay, a management fee to the
Adviser. To the extent that any payments made by the Fund to the Adviser,
including payment of management fees, should be deemed to be indirect financing
of any activity primarily intended to result in the sale of Institutional Class
Shares within the meaning of Rule 12b-1, then such payments shall be deemed to
be authorized by this Plan.
5. This Plan shall become effective upon the approval by a vote of a
majority of the Trustees of the Trust, including a majority of Trustees who are
not "interested persons" of the Trust (as defined in the Act) and who have no
direct or indirect financial interest in the operation of this Plan or in any
agreement related to the Plan (the "Independent Trustees"), cast in person at a
meeting called for the purpose of voting on this Plan.
6. This Plan shall, unless terminated as hereinafter provided, remain in
effect until April 30, 1990, and from year to year thereafter, provided,
however, that such continuance is subject to approval annually by a vote of a
majority of the Trustees of the Trust, including a majority of the Independent
Trustees, cast in person at a meeting called for the purpose of voting on this
<PAGE>
Plan. This Plan may be amended at any time by the Board of Trustees, provided
that (a) any amendment to authorize direct payments by the Institutional Class
to finance any activity primarily intended to result in the sale of
Institutional Class Shares, to increase materially the amount spent by the
Institutional Class for distribution, or any amendment of the Management
Contract to increase the amount to be paid by the Fund thereunder shall be
effective only upon approval by a vote of a majority of the outstanding voting
securities of the Institutional Class, in the case of this Plan, or upon
approval by a vote of a majority of the outstanding voting securities of the
Fund, in the case of the Management Contract, and (b) any material amendments of
this Plan shall be effective only upon approval in the manner provided in the
first sentence in this paragraph 6.
7. This Plan may be terminated at any time, without the payment of any
penalty, by vote of a majority of the Independent Trustees or by a vote of a
majority of the outstanding voting securities of the Institutional Class.
8. During the existence of this Plan, the Trust shall require the
Adviser and/or Distributor to provide the Trust, for review by the Trustees, and
the Trustees shall review, at least quarterly, a written report of the amounts
expended in connection with financing any activity primarily intended to result
in the sale of Institutional Class Shares (making estimates of such costs where
necessary or desirable) and the purposes for which such expenditures were made.
9. This Plan does not require the Adviser or Distributor to perform any
specific type or level of distribution activities or to incur any specific level
of expenses for activities primarily intended to result in the sale of
Institutional Class Shares.
10. Consistent with the limitation of shareholder liability as set forth
in the Trust's Declaration of Trust, any obligation assumed by Institutional
Class pursuant to this Plan and any agreement related to this Plan shall be
limited in all cases to Institutional Class and its assets and shall not
constitute an obligation of any shareholder of the Trust or of any other class
of the Fund, series of the Trust or class of such series.
11. If any provision of this Plan shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Plan shall not
be affected thereby.
2
Exhibit 15 (xx)
FORM OF
DISTRIBUTION AND SERVICE PLAN
FIDELITY ADVISOR ASSET ALLOCATION FUND
Class A Shares
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by Rule 12b-1
under the Investment Company Act of 1940, as amended (the "Act") for the Class A
shares of Fidelity Advisor Asset Allocation Fund ("Class A"), a class of shares
of Fidelity Advisor Asset Allocation Fund (the "Fund"), a portfolio of Fidelity
Advisor Series I (the "Trust").
2. The Trust has entered into a General Distribution Agreement on behalf
of the Fund with Fidelity Distributors Corporation (the "Distributor"), under
which the Distributor uses all reasonable efforts, consistent with its other
business, to secure purchasers of the Fund's shares of beneficial interest (the
"Shares"). Such efforts may include, but neither are required to include nor are
limited to, the following: (1) formulation and implementation of marketing and
promotional activities, such as mail promotions and television, radio,
newspaper, magazine and other mass media advertising; (2) preparation, printing
and distribution of sales literature; (3) preparation, printing and distribution
of prospectuses of the Fund and reports to recipients other than the existing
shareholders of the Fund; (4) obtaining such information, analyses and reports
with respect to marketing and promotional activities as the Distributor may,
from time to time, deem advisable; (5) making payments to securities dealers and
others engaged in the sale of Shares or who engage in shareholder support
services; and (6) providing training, marketing and support to such dealers with
respect to the sale of Shares.
3. In consideration for the services provided and the expenses incurred
by the Distributor pursuant to the General Distribution Agreement and paragraph
2 hereof, all with respect to Class A Shares, Class A shall pay to the
Distributor a fee at the annual rate of 0.75% (or such lesser amount as the
Trustees may, from time to time, determine) of the average daily net assets of
Class A throughout the month. The determination of daily net assets shall be
made at the close of business each day throughout the month and computed in the
manner specified in the Fund's then current Prospectus for the determination of
the net asset value of the Fund's Class A Shares. The Distributor may use all or
any portion of the fee received pursuant to this Plan to compensate securities
dealers or other persons who have engaged in the sale of Class A Shares or in
shareholder support services pursuant to agreements with the Distributor, or to
pay any of the expenses associated with other activities authorized under
paragraph 2 hereof.
4. The Fund presently pays, and will continue to pay, a management fee
to Fidelity Management & Research Company (the "Adviser") pursuant to a
management agreement between the Fund and the Adviser (the "Management
Contract"). It is recognized that the Adviser may use its management fee
revenue, as well as its past profits or its resources from any other source, to
make payment to the Distributor with respect to any expenses incurred in
connection with the distribution of Class A Shares, including the activities
referred to in paragraph 2 hereof. To the extent that the payment of management
fees by the Fund to the Adviser should be deemed to be indirect financing of any
activity primarily intended to result in the sale of Class A Shares within the
<PAGE>
meaning of Rule 12b-1, then such payment shall be deemed to be authorized by
this Plan.
5. This Plan shall become effective upon the approval by a vote of a
majority of the Trustees of the Trust, including a majority of Trustees who are
not "interested persons" of the Trust (as defined in the Act) and who have no
direct or indirect financial interest in the operation of this Plan or in any
agreement related to the Plan (the "Independent Trustees"), cast in person at a
meeting called for the purpose of voting on this Plan.
6. This Plan shall, unless terminated as hereinafter provided, remain in
effect until April 30, 1999, and from year to year thereafter; provided,
however, that such continuance is subject to approval annually by a vote of a
majority of the Trustees of the Trust, including a majority of the Independent
Trustees, cast in person at a meeting called for the purpose of voting on this
Plan. This Plan may be amended at any time by the Board of Trustees, provided
that (a) any amendment to increase materially the fee provided for in paragraph
3 hereof or any amendment of the Management Contract to increase the amount to
be paid by the Fund thereunder shall be effective only upon approval by a vote
of a majority of the outstanding voting securities of Class A, in the case of
this Plan, or upon approval by a vote of a majority of the outstanding voting
securities of the Fund, in the case of the Management Contract, and (b) any
material amendment of this Plan shall be effective only upon approval in the
manner provided in the first sentence of this paragraph 6.
7. This Plan may be terminated at any time, without the payment of any
penalty, by vote of a majority of the Independent Trustees or by a vote of a
majority of the outstanding voting securities of Class A.
8. During the existence of this Plan, the Trust shall require the
Adviser and/or the Distributor to provide the Trust, for review by the Trustees,
and the Trustees shall review, at least quarterly, a written report of the
amounts expended in connection with financing any activity primarily intended to
result in the sale of shares of Class A (making estimates of such costs where
necessary or desirable) and the purposes for which such expenditures were made.
9. This Plan does not require the Adviser or Distributor to perform any
specific type or level of distribution activities or to incur any specific level
of expenses for activities primarily intended to result in the sale of Class A
Shares.
10. Consistent with the limitation of shareholder liability as set forth
in the Trust's Declaration of Trust, obligation assumed by Class A pursuant to
this Plan and any agreement related to this Plan shall be limited in all cases
to Class A and its assets and shall not constitute an obligation of any
shareholder of the Trust or of any other class of the Fund, series of the Trust
or class of such series.
11. If any provision of the Plan shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Plan shall not
be affected thereby.
2
Exhibit 15 (yy)
FORM OF
DISTRIBUTION AND SERVICE PLAN
FIDELITY ADVISOR ASSET ALLOCATION FUND
Class T Shares
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by Rule 12b-1
under the Investment Company Act of 1940, as amended (the "Act") for the Class T
shares of Fidelity Advisor Asset Allocation Fund ("Class T"), a class of shares
of Fidelity Advisor Asset Allocation Fund (the "Fund"), a portfolio of Fidelity
Advisor Series I (the "Trust").
2. The Trust has entered into a General Distribution Agreement on behalf
of the Fund with Fidelity Distributors Corporation (the "Distributor"), under
which the Distributor uses all reasonable efforts, consistent with its other
business, to secure purchasers of the Fund's shares of beneficial interest (the
"Shares"). Such efforts may include, but neither are required to include nor are
limited to, the following: (1) formulation and implementation of marketing and
promotional activities, such as mail promotions and television, radio,
newspaper, magazine and other mass media advertising; (2) preparation, printing
and distribution of sales literature; (3) preparation, printing and distribution
of prospectuses of the Fund and reports to recipients other than the existing
shareholders of the Fund; (4) obtaining such information, analyses and reports
with respect to marketing and promotional activities as the Distributor may,
from time to time, deem advisable; (5) making payments to securities dealers and
others engaged in the sale of Shares or who engage in shareholder support
services; and (6) providing training, marketing and support to such dealers with
respect to the sale of Shares.
3. In consideration for the services provided and the expenses incurred
by the Distributor pursuant to the General Distribution Agreement and paragraph
2 hereof, all with respect to Class T Shares, Class T shall pay to the
Distributor a fee at the annual rate of 0.75% (or such lesser amount as the
Trustees may, from time to time, determine) of the average daily net assets of
Class T throughout the month. The determination of daily net assets shall be
made at the close of business each day throughout the month and computed in the
manner specified in the Fund's then current Prospectus for the determination of
the net asset value of the Fund's Class T Shares. The Distributor may use all or
any portion of the fee received pursuant to this Plan to compensate securities
dealers or other persons who have engaged in the sale of Class T Shares or in
shareholder support services pursuant to agreements with the Distributor, or to
pay any of the expenses associated with other activities authorized under
paragraph 2 hereof.
4. The Fund presently pays, and will continue to pay, a management fee
to Fidelity Management & Research Company (the "Adviser") pursuant to a
management agreement between the Fund and the Adviser (the "Management
Contract"). It is recognized that the Adviser may use its management fee
revenue, as well as its past profits or its resources from any other source, to
make payment to the Distributor with respect to any expenses incurred in
connection with the distribution of Class T Shares, including the activities
referred to in paragraph 2 hereof. To the extent that the payment of management
fees by the Fund to the Adviser should be deemed to be indirect financing of any
activity primarily intended to result in the sale of Class T Shares within the
<PAGE>
meaning of Rule 12b-1, then such payment shall be deemed to be authorized by
this Plan.
5. This Plan shall become effective upon the approval by a vote of a
majority of the Trustees of the Trust, including a majority of Trustees who are
not "interested persons" of the Trust (as defined in the Act) and who have no
direct or indirect financial interest in the operation of this Plan or in any
agreement related to the Plan (the "Independent Trustees"), cast in person at a
meeting called for the purpose of voting on this Plan.
6. This Plan shall, unless terminated as hereinafter provided, remain in
effect until April 30, 1999, and from year to year thereafter; provided,
however, that such continuance is subject to approval annually by a vote of a
majority of the Trustees of the Trust, including a majority of the Independent
Trustees, cast in person at a meeting called for the purpose of voting on this
Plan. This Plan may be amended at any time by the Board of Trustees, provided
that (a) any amendment to increase materially the fee provided for in paragraph
3 hereof or any amendment of the Management Contract to increase the amount to
be paid by the Fund thereunder shall be effective only upon approval by a vote
of a majority of the outstanding voting securities of Class T, in the case of
this Plan, or upon approval by a vote of a majority of the outstanding voting
securities of the Fund, in the case of the Management Contract, and (b) any
material amendment of this Plan shall be effective only upon approval in the
manner provided in the first sentence of this paragraph 6.
7. This Plan may be terminated at any time, without the payment of any
penalty, by vote of a majority of the Independent Trustees or by a vote of a
majority of the outstanding voting securities of Class T.
8. During the existence of this Plan, the Trust shall require the
Adviser and/or the Distributor to provide the Trust, for review by the Trustees,
and the Trustees shall review, at least quarterly, a written report of the
amounts expended in connection with financing any activity primarily intended to
result in the sale of shares of Class T (making estimates of such costs where
necessary or desirable) and the purposes for which such expenditures were made.
9. This Plan does not require the Adviser or Distributor to perform any
specific type or level of distribution activities or to incur any specific level
of expenses for activities primarily intended to result in the sale of Class T
Shares.
10. Consistent with the limitation of shareholder liability as set forth
in the Trust's Declaration of Trust, obligation assumed by Class T pursuant to
this Plan and any agreement related to this Plan shall be limited in all cases
to Class T and its assets and shall not constitute an obligation of any
shareholder of the Trust or of any other class of the Fund, series of the Trust
or class of such series.
11. If any provision of the Plan shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Plan shall not
be affected thereby.
2
Exhibit 15 (zz)
FORM OF
DISTRIBUTION AND SERVICE PLAN
FIDELITY ADVISOR ASSET ALLOCATION FUND
Class B Shares
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by Rule 12b-1
under the Investment Company Act of 1940, as amended (the "Act") for Class B
shares of Fidelity Advisor Asset Allocation Fund ("Class B"), a class of shares
of Fidelity Advisor Asset Allocation Fund (the "Fund"), a series of Fidelity
Advisor Series I (the "Trust").
2. The Trust has entered into a General Distribution Agreement on
behalf of the Fund with Fidelity Distributors Corporation (the "Distributor")
under which the Distributor uses all reasonable efforts, consistent with its
other business, to secure purchasers of the Fund's shares of beneficial interest
(the "Shares"). Such efforts may include, but neither are required to include
nor are limited to, the following: (1) formulation and implementation of
marketing and promotional activities, such as mail promotions and television,
radio, newspaper, magazine and other mass media advertising; (2) preparation,
printing and distribution of sales literature; (3) preparation, printing and
distribution of prospectuses of the Fund and reports to recipients other than
existing shareholders of the Fund; (4) obtaining such information, analyses and
reports with respect to marketing and promotional activities as the Distributor
may, from time to time, deem advisable; (5) making payments to securities
dealers and others engaged in the sale of Shares or in shareholder support
services ("Investment Professionals"); and (6) providing training, marketing and
support to Investment Professionals with respect to the sale of Shares.
3. In accordance with such terms as the Trustees may, from time to time
establish, and in conjunction with its services under the General Distribution
Agreement with respect to Class B Shares, the Distributor is hereby expressly
authorized to make payments to Investment Professionals in connection with the
sale of Class B Shares. Such payments may be paid as a percentage of the dollar
amount of purchases of Class B Shares attributable to a particular Investment
Professional, or may take such other form as may be approved by the Trustees.
4. In consideration of the services provided and the expenses incurred
by the Distributor pursuant to the General Distribution Agreement and paragraphs
2 and 3 hereof, all with respect to Class B Shares:
(a) Class B shall pay to the Distributor a monthly distribution fee at
the annual rate of 0.75% (or such lesser amount as the Trustees may, from time
to time, determine) of the average daily net assets of Class B throughout the
month. The determination of daily net assets shall be made at the close of
business each day throughout the month and computed in the manner specified in
the Fund's then current Prospectus for the determination of the net asset value
of Class B Shares, but shall exclude assets attributable to any other class of
Shares of the Fund. The Distributor may, but shall not be required to, use all
or any portion of the distribution fee received pursuant to the Plan to
compensate Investment Professionals who have engaged in the sale of Class B
<PAGE>
Shares or in shareholder support services with respect to Class B Shares
pursuant to agreements with the Distributor, or to pay any of the expenses
associated with other activities authorized under paragraphs 2 and 3 hereof; and
(b) In addition, the Plan recognizes that the Distributor may, in
accordance with such terms as the Trustees may from time to time establish,
receive all or a portion of any sales charges, including contingent deferred
sales charges, which may be imposed upon the sale or redemption of Class B
Shares.
5. Separate from any payments made as described in paragraph 4 hereof,
Class B shall also pay to the Distributor a service fee at the annual rate of
0.25% (or such lesser amount as the Trustees may, from time to time, determine)
of the average daily net assets of Class B throughout the month. The
determination of daily net assets shall be made at the close of business each
day throughout the month and computed in the manner specified in the Fund's then
current Prospectus for the determination of the net asset value of Class B
Shares, but shall exclude assets attributable to any other class of Shares of
the Fund. In accordance with such terms as the Trustees may from time to time
establish, the Distributor may use all or a portion of such service fees to
compensate Investment Professionals for personal service and/or the maintenance
of shareholder accounts, or for other services for which "service fees" lawfully
may be paid in accordance with applicable rules and regulations.
6. The Fund presently pays, and will continue to pay, a management fee
to Fidelity Management & Research Company (the "Adviser") pursuant to a
management agreement between the Fund and the Adviser (the "Management
Contract"). It is recognized that the Adviser may use its management fee
revenue, as well as its past profits or its resources from any other source, to
make payment to the Distributor with respect to any expenses incurred in
connection with the distribution of Class B Shares, including the activities
referred to in paragraphs 2 and 3 hereof. To the extent that the payment of
management fees by the Fund to the Adviser should be deemed to be indirect
financing of any activity primarily intended to result in the sale of Class B
Shares within the meaning of Rule 12b-1, then such payment shall be deemed to be
authorized by this Plan.
7. This Plan shall become effective upon the approval by a vote of a
majority of the Trustees of the Trust, including a majority of Trustees who are
not "interested persons" of the Trust (as defined in the Act) and who have no
direct or indirect financial interest in the operation of the Plan or in any
agreement related to the Plan (the "Independent Trustees"), cast in person at a
meeting called for the purpose of voting on this Plan.
8. This Plan shall, unless terminated as hereinafter provided, remain
in effect until April 30, 1999, and from year to year thereafter; provided,
however, that such continuance is subject to approval annually by a vote of a
majority of the Trustees of the Trust, including a majority of the Independent
Trustees, cast in person at a meeting called for the purpose of voting on this
Plan. This Plan may be amended at any time by the Board of Trustees, provided
that (a) any amendment to increase materially the fees provided for in
paragraphs 4 and 5 hereof or any amendment of the Management Contract to
increase the amount to be paid by the Fund thereunder shall be effective only
2
<PAGE>
upon approval by a vote of a majority of the outstanding voting securities of
Class B, in the case of this Plan, or upon approval by a vote of the majority of
the outstanding voting securities of the Fund, in the case of the Management
Contract, and (b) any material amendment of this Plan shall be effective only
upon approval in the manner provided in the first sentence of this paragraph 8.
9. This Plan may be terminated at any time, without the payment of any
penalty, by vote of a majority of the Independent Trustees or by a vote of a
majority of the outstanding voting securities of Class B.
10. During the existence of this Plan, the Trust shall require the
Adviser and/or the Distributor to provide the Trust, for review by the Trustees,
and the Trustees shall review, at least quarterly, a written report of the
amounts expended in connection with financing any activity primarily intended to
result in the sale of Class B Shares (making estimates of such costs where
necessary or desirable) and the purposes for which such expenditures were made.
11. This Plan does not require the Adviser or Distributor to perform
any specific type or level of distribution activities or to incur any specific
level of expenses for activities primarily intended to result in the sale of
Class B Shares.
12. Consistent with the limitation of shareholder liability as set
forth in the Trust's Declaration of Trust, any obligation assumed by Class B
pursuant to this Plan and any agreement related to this Plan shall be limited in
all cases to Class B and its assets and shall not constitute an obligation of
any shareholder of the Trust or of any other class of the Fund, series of the
Trust or class of such series.
13. If any provision of this Plan shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Plan shall not
be affected thereby.
3
Exhibit 15 (aaa)
FORM OF
DISTRIBUTION AND SERVICE PLAN
FIDELITY ADVISOR ASSET ALLOCATION FUND
Class C Shares
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by Rule 12b-1
under the Investment Company Act of 1940, as amended (the "Act"), for Class C
Shares of Fidelity Advisor Asset Allocation Fund ("Class C"), a class of shares
of Fidelity Advisor Asset Allocation Fund (the "Fund"), a series of Fidelity
Advisor Series I (the "Trust").
2. The Trust has entered into a General Distribution Agreement on
behalf of the Fund with Fidelity Distributors Corporation (the "Distributor")
under which the Distributor uses all reasonable efforts, consistent with its
other business, to secure purchasers of the Fund's shares of beneficial interest
(the "Shares"). Such efforts may include, but neither are required to include
nor are limited to, the following: (1) formulation and implementation of
marketing and promotional activities, such as mail promotions and television,
radio, newspaper, magazine and other mass media advertising; (2) preparation,
printing and distribution of sales literature; (3) preparation, printing and
distribution of prospectuses of the Fund and reports to recipients other than
existing shareholders of the Fund; (4) obtaining such information, analyses and
reports with respect to marketing and promotional activities as the Distributor
may, from time to time, deem advisable; (5) making payments to securities
dealers and others engaged in the sale of Shares or in shareholder support
services ("Investment Professionals"); and (6) providing training, marketing and
support to Investment Professionals with respect to the sale of Shares.
3. In accordance with such terms as the Trustees may, from time to time
establish, and in conjunction with its services under the General Distribution
Agreement with respect to Class C Shares, the Distributor is hereby expressly
authorized to make payments to Investment Professionals in connection with the
sale of Class C Shares. Such payments may be paid as a percentage of the dollar
amount of purchases of Class C Shares attributable to a particular Investment
Professional, or may take such other form as may be approved by the Trustees.
4. In consideration of the services provided and the expenses incurred
by the Distributor pursuant to the General Distribution Agreement and paragraphs
2 and 3 hereof, all with respect to Class C Shares:
(a) Class C shall pay to the Distributor a monthly distribution fee at
the annual rate of 0.75% (or such lesser amount as the Trustees may, from time
to time, determine) of the average daily net assets of Class C throughout the
month. The determination of daily net assets shall be made at the close of
business each day throughout the month and computed in the manner specified in
the Fund's then current Prospectus for the determination of the net asset value
of Class C Shares, but shall exclude assets attributable to any other class of
Shares of the Fund. The Distributor may, but shall not be required to, use all
or any portion of the distribution fee received pursuant to the Plan to
compensate Investment Professionals who have engaged in the sale of Class C
<PAGE>
Shares or in shareholder support services with respect to Class C Shares
pursuant to agreements with the Distributor, or to pay any of the expenses
associated with other activities authorized under paragraphs 2 and 3 hereof; and
(b) In addition, the Plan recognizes that the Distributor may, in
accordance with such terms as the Trustees may from time to time establish,
receive all or a portion of any sales charges, including contingent deferred
sales charges, which may be imposed upon the sale or redemption of Class C
Shares.
5. Separate from any payments made as described in paragraph 4 hereof,
Class C shall also pay to the Distributor a service fee at the annual rate of
0.25% (or such lesser amount as the Trustees may, from time to time, determine)
of the average daily net assets of Class C throughout the month. The
determination of daily net assets shall be made at the close of business each
day throughout the month and computed in the manner specified in the Fund's then
current Prospectus for the determination of the net asset value of Class C
Shares, but shall exclude assets attributable to any other class of Shares of
the Fund. In accordance with such terms as the Trustees may from time to time
establish, the Distributor may use all or a portion of such service fees to
compensate Investment Professionals for personal service and/or the maintenance
of shareholder accounts, or for other services for which "service fees" lawfully
may be paid in accordance with applicable rules and regulations.
6. The Fund presently pays, and will continue to pay, a management fee
to Fidelity Management & Research Company (the "Adviser") pursuant to a
management agreement between the Fund and the Adviser (the "Management
Contract"). It is recognized that the Adviser may use its management fee
revenue, as well as its past profits or its resources from any other source, to
make payment to the Distributor with respect to any expenses incurred in
connection with the distribution of Class C Shares, including the activities
referred to in paragraphs 2 and 3 hereof. To the extent that the payment of
management fees by the Fund to the Adviser should be deemed to be indirect
financing of any activity primarily intended to result in the sale of Class C
Shares within the meaning of Rule 12b-1, then such payment shall be deemed to be
authorized by this Plan.
7. This Plan shall become effective upon approval by a vote of a
majority of the Trustees of the Trust, including a majority of Trustees who are
not "interested persons" of the Trust (as defined in the Act) and who have no
direct or indirect financial interest in the operation of the Plan or in any
agreement related to the Plan (the "Independent Trustees"), cast in person at a
meeting called for the purpose of voting on this Plan.
8. This Plan shall, unless terminated as hereinafter provided, remain
in effect until April 30, 1999, and from year to year thereafter; provided,
however, that such continuance is subject to approval annually by a vote of a
majority of the Trustees of the Trust, including a majority of the Independent
Trustees, cast in person at a meeting called for the purpose of voting on this
Plan. This Plan may be amended at any time by the Board of Trustees, provided
that (a) any amendment to increase materially the fees provided for in
paragraphs 4 and 5 hereof or any amendment of the Management Contract to
increase the amount to be paid by the Fund thereunder shall be effective only
upon approval by a vote of a majority of the outstanding voting securities of
2
<PAGE>
Class C, in the case of this Plan, or upon approval by a vote of the majority of
the outstanding voting securities of the Fund, in the case of the Management
Contract, and (b) any material amendment of this Plan shall be effective only
upon approval in the manner provided in the first sentence of this paragraph 8.
9. This Plan may be terminated at any time, without the payment of any
penalty, by vote of a majority of the Independent Trustees or by a vote of a
majority of the outstanding voting securities of Class C.
10. During the existence of this Plan, the Trust shall require the
Adviser and/or the Distributor to provide the Trust, for review by the Trustees,
and the Trustees shall review, at least quarterly, a written report of the
amounts expended in connection with financing any activity primarily intended to
result in the sale of Class C Shares (making estimates of such costs where
necessary or desirable) and the purposes for which such expenditures were made.
11. This Plan does not require the Adviser or Distributor to perform
any specific type or level of distribution activities or to incur any specific
level of expenses for activities primarily intended to result in the sale of
Class C Shares.
12. Consistent with the limitation of shareholder liability as set
forth in the Trust's Declaration of Trust, any obligation assumed by Class C
pursuant to this Plan and any agreement related to this Plan shall be limited in
all cases to Class C and its assets and shall not constitute an obligation of
any shareholder of the Trust or of any other class of the Fund, series of the
Trust or class of such series.
13. If any provision of this Plan shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Plan shall not
be affected thereby.
3
Exhibit 15 (bbb)
FORM OF
DISTRIBUTION AND SERVICE PLAN
FIDELITY ADVISOR ASSET ALLOCATION FUND
Institutional Class Shares
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by Rule 12b-1
under the Investment Company Act of 1940, as amended (the "Act") for
Institutional Class Shares of Fidelity Advisor Asset Allocation Fund
("Institutional Class"), a class of shares of Fidelity Advisor Asset Allocation
Fund (the "Fund"), a series of Fidelity Advisor Series I (the "Trust").
2. The Trust has entered into a General Distribution Agreement on behalf
of the Fund with Fidelity Distributors Corporation (the "Distributor") under
which the Distributor uses all reasonable efforts, consistent with its other
business, to secure purchasers for the Fund's shares of beneficial interest
("Shares"). Under the agreement, the Distributor pays the expenses of printing
and distributing any prospectuses, reports and other literature used by the
Distributor, advertising, and other promotional activities in connection with
the offering of Shares of the Fund for sale to the public. It is recognized that
Fidelity Management & Research Company (the "Adviser") may use its management
fee revenues as well as past profits or its resources from any other source, to
make payment to the Distributor with respect to any expenses incurred in
connection with the distribution of Institutional Class Shares, including the
activities referred to above.
3. The Adviser directly, or through the Distributor, may, subject to the
approval of the Trustees, make payments to securities dealers and other third
parties who engage in the sale of Institutional Class Shares or who render
shareholder support services, including but not limited to providing office
space, equipment and telephone facilities, answering routine inquiries regarding
the Fund, processing shareholder transactions and providing such other
shareholder services as the Trust may reasonably request.
4. The Institutional Class will not make separate payments as a result
of this Plan to the Adviser, Distributor or any other party, it being recognized
that the Fund presently pays, and will continue to pay, a management fee to the
Adviser. To the extent that any payments made by the Fund to the Adviser,
including payment of management fees, should be deemed to be indirect financing
of any activity primarily intended to result in the sale of Institutional Class
Shares within the meaning of Rule 12b-1, then such payments shall be deemed to
be authorized by this Plan.
5. This Plan shall become effective upon the approval by a vote of a
majority of the Trustees of the Trust, including a majority of Trustees who are
not "interested persons" of the Trust (as defined in the Act) and who have no
direct or indirect financial interest in the operation of this Plan or in any
agreement related to the Plan (the "Independent Trustees"), cast in person at a
meeting called for the purpose of voting on this Plan.
6. This Plan shall, unless terminated as hereinafter provided, remain in
effect until April 30, 1999, and from year to year thereafter, provided,
however, that such continuance is subject to approval annually by a vote of a
majority of the Trustees of the Trust, including a majority of the Independent
<PAGE>
Trustees, cast in person at a meeting called for the purpose of voting on this
Plan. This Plan may be amended at any time by the Board of Trustees, provided
that (a) any amendment to authorize direct payments by the Institutional Class
to finance any activity primarily intended to result in the sale of
Institutional Class Shares, to increase materially the amount spent by the
Institutional Class for distribution, or any amendment of the Management
Contract to increase the amount to be paid by the Fund thereunder shall be
effective only upon approval by a vote of a majority of the outstanding voting
securities of the Institutional Class, in the case of this Plan, or upon
approval by a vote of a majority of the outstanding voting securities of the
Fund, in the case of the Management Contract, and (b) any material amendments of
this Plan shall be effective only upon approval in the manner provided in the
first sentence in this paragraph 6.
7. This Plan may be terminated at any time, without the payment of any
penalty, by vote of a majority of the Independent Trustees or by a vote of a
majority of the outstanding voting securities of the Institutional Class.
8. During the existence of this Plan, the Trust shall require the
Adviser and/or Distributor to provide the Trust, for review by the Trustees, and
the Trustees shall review, at least quarterly, a written report of the amounts
expended in connection with financing any activity primarily intended to result
in the sale of Institutional Class Shares (making estimates of such costs where
necessary or desirable) and the purposes for which such expenditures were made.
9. This Plan does not require the Adviser or Distributor to perform any
specific type or level of distribution activities or to incur any specific level
of expenses for activities primarily intended to result in the sale of
Institutional Class Shares.
10. Consistent with the limitation of shareholder liability as set forth
in the Trust's Declaration of Trust, any obligation assumed by Institutional
Class pursuant to this Plan and any agreement related to this Plan shall be
limited in all cases to Institutional Class and its assets and shall not
constitute an obligation of any shareholder of the Trust or of any other class
of the Fund, series of the Trust or class of such series.
11. If any provision of this Plan shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the Plan shall not
be affected thereby.
2
Exhibit 18(b)
SCHEDULE I DATED JULY 16, 1998 TO MULTIPLE CLASS OF SHARES PLAN FOR FIDELITY
ADVISOR FUNDS DATED MARCH 19, 1998
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
TRUST/FUND/CLASS SALES CHARGE DISTRIBUTION FEE (AS A SHAREHOLDER
PERCENTAGE OF AVERAGE NET SERVICE FEE
ASSETS) (AS A PERCENTAGE OF
AVERAGE NET ASSETS)
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series VIII
Overseas Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series I
Equity Growth Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series VII
Natural Resources Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series I
Growth Opportunities Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series III
Equity Income Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series II
Balanced Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
<PAGE>
- -----------------------------------------------------------------------------------------------------------------------------
TRUST/FUND/CLASS SALES CHARGE DISTRIBUTION FEE (AS A SHAREHOLDER
PERCENTAGE OF AVERAGE NET SERVICE FEE
ASSETS) (AS A PERCENTAGE OF
AVERAGE NET ASSETS)
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series I
Large Cap Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series I
Mid Cap Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series I
Small Cap Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series I
Strategic Opportunities Fund:
Initial Class front-end none none
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series VII
Consumer Industries Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series VII
Cyclical Industries Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series VII
Financial Services Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
2
<PAGE>
- -----------------------------------------------------------------------------------------------------------------------------
TRUST/FUND/CLASS SALES CHARGE DISTRIBUTION FEE (AS A SHAREHOLDER
PERCENTAGE OF AVERAGE NET SERVICE FEE
ASSETS) (AS A PERCENTAGE OF
AVERAGE NET ASSETS)
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series VII
Health Care Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series VII
Technology Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series VII
Utilities Growth Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series I
TechnoQuant Growth Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series I
Growth & Income Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series VIII
International Capital Appreciation Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series IV
Intermediate Bond Fund:
Class A* front-end 0.15 none
Class T* front-end 0.25 none
Class B contingent deferred 0.65 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
10
<PAGE>
- -----------------------------------------------------------------------------------------------------------------------------
TRUST/FUND/CLASS SALES CHARGE DISTRIBUTION FEE (AS A SHAREHOLDER
PERCENTAGE OF AVERAGE NET SERVICE FEE
ASSETS) (AS A PERCENTAGE OF
AVERAGE NET ASSETS)
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series VI
Intermediate Municipal Income Fund:
Class A* front-end 0.15 none
Class T* front-end 0.25 none
Class B contingent deferred 0.65 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series II
Short Fixed-Income Fund:
Class A* front-end 0.15 none
Class T* front-end 0.15 none
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series VIII
Emerging Markets Income Fund:
Class A* front-end 0.15 none
Class T* front-end 0.25 none
Class B contingent deferred 0.65 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series II
High Yield Fund:
Class A* front-end 0.15 none
Class T* front-end 0.25 none
Class B contingent deferred 0.65 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series II
Strategic Income Fund:
Class A* front-end 0.15 none
Class T* front-end 0.25 none
Class B contingent deferred 0.65 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series II
Government Investment Fund:
Class A* front-end 0.15 none
Class T* front-end 0.25 none
Class B contingent deferred 0.65 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series V
Municipal Income Fund:
Class A* front-end 0.15 none
Class T* front-end 0.25 none
Class B contingent deferred 0.65 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------
4
<PAGE>
* A contingent deferred sales charge of 0.25% is accessed on certain
redemptions of Class A and Class T shares on which a finder's fee was
paid.
</TABLE>
<TABLE>
<CAPTION>
Exhibit 18(c)
FORM OF SCHEDULE I DATED ___________, 1998 TO MULTIPLE CLASS OF SHARES PLAN FOR FIDELITY ADVISOR FUNDS DATED
MARCH 19, 1998
- -----------------------------------------------------------------------------------------------------------------------------
TRUST/FUND/CLASS SALES CHARGE DISTRIBUTION FEE (AS A SHAREHOLDER
PERCENTAGE OF AVERAGE NET SERVICE FEE
ASSETS) (AS A PERCENTAGE OF
AVERAGE NET ASSETS)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Advisor Series VIII
Overseas Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series I
Equity Growth Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series VII
Natural Resources Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series I
Growth Opportunities Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series III
Equity Income Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series II
Balanced Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
<PAGE>
- -----------------------------------------------------------------------------------------------------------------------------
TRUST/FUND/CLASS SALES CHARGE DISTRIBUTION FEE (AS A SHAREHOLDER
PERCENTAGE OF AVERAGE NET SERVICE FEE
ASSETS) (AS A PERCENTAGE OF
AVERAGE NET ASSETS)
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series I
Large Cap Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series I
Mid Cap Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series I
Small Cap Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series I
Strategic Opportunities Fund:
Initial Class front-end none none
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series VII
Consumer Industries Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series VII
Cyclical Industries Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series VII
Financial Services Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
2
<PAGE>
- -----------------------------------------------------------------------------------------------------------------------------
TRUST/FUND/CLASS SALES CHARGE DISTRIBUTION FEE (AS A SHAREHOLDER
PERCENTAGE OF AVERAGE NET SERVICE FEE
ASSETS) (AS A PERCENTAGE OF
AVERAGE NET ASSETS)
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series VII
Health Care Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series VII
Technology Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series VII
Utilities Growth Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series I
TechnoQuant Growth Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series I
Growth & Income Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series VIII
International Capital Appreciation Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series I
Dividend Growth Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
3
<PAGE>
- -----------------------------------------------------------------------------------------------------------------------------
TRUST/FUND/CLASS SALES CHARGE DISTRIBUTION FEE (AS A SHAREHOLDER
PERCENTAGE OF AVERAGE NET SERVICE FEE
ASSETS) (AS A PERCENTAGE OF
AVERAGE NET ASSETS)
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series I
Retirement Growth Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series I
Asset Allocation Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series VIII
Diversified International Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series VIII
Europe Capital Appreciation Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series VIII
Japan Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series VIII
Latin America Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series VIII
Global Equity Fund:
Class A* front-end 0.25 none
Class T* front-end 0.50 none
Class B contingent deferred 0.75 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
4
<PAGE>
- -----------------------------------------------------------------------------------------------------------------------------
TRUST/FUND/CLASS SALES CHARGE DISTRIBUTION FEE (AS A SHAREHOLDER
PERCENTAGE OF AVERAGE NET SERVICE FEE
ASSETS) (AS A PERCENTAGE OF
AVERAGE NET ASSETS)
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series IV
Intermediate Bond Fund:
Class A* front-end 0.15 none
Class T* front-end 0.25 none
Class B contingent deferred 0.65 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series VI
Intermediate Municipal Income Fund:
Class A* front-end 0.15 none
Class T* front-end 0.25 none
Class B contingent deferred 0.65 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series II
Short Fixed-Income Fund:
Class A* front-end 0.15 none
Class T* front-end 0.15 none
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series VIII
Emerging Markets Income Fund:
Class A* front-end 0.15 none
Class T* front-end 0.25 none
Class B contingent deferred 0.65 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series II
High Yield Fund:
Class A* front-end 0.15 none
Class T* front-end 0.25 none
Class B contingent deferred 0.65 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series II
Strategic Income Fund:
Class A* front-end 0.15 none
Class T* front-end 0.25 none
Class B contingent deferred 0.65 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series II
Government Investment Fund:
Class A* front-end 0.15 none
Class T* front-end 0.25 none
Class B contingent deferred 0.65 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
5
<PAGE>
- -----------------------------------------------------------------------------------------------------------------------------
TRUST/FUND/CLASS SALES CHARGE DISTRIBUTION FEE (AS A SHAREHOLDER
PERCENTAGE OF AVERAGE NET SERVICE FEE
ASSETS) (AS A PERCENTAGE OF
AVERAGE NET ASSETS)
- -----------------------------------------------------------------------------------------------------------------------------
Advisor Series V
Municipal Income Fund:
Class A* front-end 0.15 none
Class T* front-end 0.25 none
Class B contingent deferred 0.65 0.25
Class C contingent deferred 0.75 0.25
Institutional Class none none none
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------
* A contingent deferred sales charge of 0.25% is accessed on certain
redemptions of Class A and Class T shares on which a finder's fee was
paid.
6
