(2_FIDELITY_LOGOS)(registered trademark)
FIDELITY ADVISOR
GROWTH & INCOME
FUND - CLASS A, CLASS T, CLASS B AND CLASS C
ANNUAL REPORT
NOVEMBER 30, 1998
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over
time.
FUND TALK 12 The manager's review of fund
performance, strategy and
outlook.
INVESTMENT CHANGES 15 A summary of major shifts in
the fund's investments over
the last six months.
INVESTMENTS 16 A complete list of the fund's
investments with their
market values.
FINANCIAL STATEMENTS 27 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 36 Notes to the financial
statements.
REPORT OF INDEPENDENT 44 The auditors' opinion.
ACCOUNTANTS
DISTRIBUTIONS 45
Standard & Poor's, S&P and S&P 500 are registered service marks of The
McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity
Distributors Corporation.
Other third party marks appearing herein are the property of their
respective owners.
All other marks appearing herein are registered or unregistered
trademarks or service marks of FMR Corp. or an affiliated company.
This report is printed on recycled paper using soy-based inks.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION
OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS
IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT
INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY ADVISOR FUND, INCLUDING CHARGES
AND EXPENSES, CONTACT YOUR
INVESTMENT PROFESSIONAL FOR A FREE PROSPECTUS. READ IT CAREFULLY
BEFORE YOU INVEST OR SEND MONEY.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
The month of November proved to be a strong one for the stock and bond
markets. The Dow Jones Industrial Average reached a record high.
Merger activity, which had lulled during the summer correction, has
increased significantly. Small-cap stocks posted their third
consecutive month of positive returns, as did emerging markets. While
bond returns generally were not at the levels of their equity
counterparts, they were mostly positive nonetheless.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will
greatly reduce your vulnerability to any single decline. We know from
experience, for example, that stock prices have gone up over longer
periods of time, have significantly outperformed other types of
investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through
diversification. A stock mutual fund, for instance, is already
diversified, because it invests in many different companies. You can
increase your diversification further by investing in a number of
different stock funds, or in such other investment categories as
bonds. If you have a short investment time horizon, you might want to
consider moving some of your investment into a money market fund,
which seeks income and a stable share price by investing in
high-quality, short-term investments. Of course, it's important to
remember that there is no assurance that a money market fund will
achieve its goal of maintaining a stable net asset value of $1.00 per
share, and that these types of funds are neither insured nor
guaranteed by any agency of the U.S. government.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases. Of course, you should
consider your financial ability to continue your purchases through
periods of low price levels before undertaking such a strategy.
Remember to contact your investment professional if you need help with
your investments.
Best regards,
Edward C. Johnson 3d
FIDELITY ADVISOR GROWTH & INCOME FUND - CLASS A
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can
look at the total percentage change in value, the average annual
percentage change or the growth of a hypothetical $10,000 investment.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). If Fidelity had not reimbursed certain class expenses, the
life of fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR LIFE OF FUND
1998
FIDELITY ADV GROWTH & INCOME 23.24% 54.10%
- - CL A
FIDELITY ADV GROWTH & INCOME 16.16% 45.24%
- - CL A (INCL. 5.75% SALES
CHARGE)
S&P 500 (registered trademark) 23.66% 62.13%
Growth & Income Funds Average 12.35% n/a
CUMULATIVE TOTAL RETURNS show Class A's performance in percentage
terms over a set period - in this case, one year or since the fund
started on December 31, 1996. For example, if you had invested $1,000
in a fund that had a 5% return over the past year, the value of your
investment would be $1,050. You can compare Class A's returns to the
performance of the Standard & Poor's 500 Index - a widely recognized,
market capitalization-weighted index of common stocks. To measure how
Class A's performance stacked up against its peers, you can compare it
to the growth and income funds average, which reflects the performance
of mutual funds with similar objectives tracked by Lipper Analytical
Services, Inc. The past one year average represents a peer group of
746 mutual funds. These benchmarks include reinvested dividends and
capital gains, if any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR LIFE OF FUND
1998
FIDELITY ADV GROWTH & INCOME 23.24% 25.31%
- - CL A
FIDELITY ADV GROWTH & INCOME 16.16% 21.50%
- - CL A (INCL. 5.75% SALES
CHARGE)
S&P 500 23.66% 28.68%
Growth & Income Funds Average 12.35% n/a
AVERAGE ANNUAL TOTAL RETURNS take Class A's cumulative return and show
you what would have happened if Class A had performed at a constant
rate each year.
$10,000 OVER LIFE OF FUND
FA Growth & Income -CL A S&P 500
00272 SP001
1996/12/31 9425.00 10000.00
1997/01/31 9632.35 10624.80
1997/02/28 9698.33 10708.10
1997/03/31 9264.28 10268.10
1997/04/30 9754.85 10881.11
1997/05/31 10292.59 11543.55
1997/06/30 10792.53 12060.70
1997/07/31 11680.88 13020.37
1997/08/31 11076.05 12290.97
1997/09/30 11643.08 12964.15
1997/10/31 11293.41 12531.14
1997/11/30 11784.84 13111.21
1997/12/31 12063.90 13336.33
1998/01/31 12121.48 13483.83
1998/02/28 12946.86 14456.28
1998/03/31 13609.30 15196.59
1998/04/30 13705.34 15349.47
1998/05/31 13618.90 15085.61
1998/06/30 14263.14 15698.39
1998/07/31 14330.47 15531.20
1998/08/31 12204.94 13285.70
1998/09/30 12753.01 14136.78
1998/10/31 13686.63 15286.67
1998/11/30 14524.00 16213.19
IMATRL PRASUN SHR__CHT 19981130 19981210 101922 R00000000000026
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Growth & Income Fund - Class A on
December 31, 1996, when the fund started, and the current 5.75% sales
charge was paid. As the chart shows, by November 30, 1998, the value
of the investment would have grown to $14,524 - a 45.24% increase on
the initial investment. For comparison, look at how the Standard &
Poor's 500 Index did over the same period. With dividends and capital
gains, if any, reinvested, the same $10,000 investment would have
grown to $16,213- a 62.13% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
long-term growth and
short-term volatility. In turn, the
share price and return of a
fund that invests in stocks or
bonds will vary. That means if
you sell your shares during
a market downturn, you might
lose money. But if you can
ride out the market's ups and
downs, you may have a gain.
(checkmark)
FIDELITY ADVISOR GROWTH & INCOME FUND - CLASS T
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can
look at the total percentage change in value, the average annual
percentage change or the growth of a hypothetical $10,000 investment.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR LIFE OF FUND
1998
FIDELITY ADV GROWTH & INCOME 23.00% 53.55%
- - CL T
FIDELITY ADV GROWTH & INCOME 18.70% 48.17%
- - CL T (INCL. 3.50% SALES
CHARGE)
S&P 500 23.66% 62.13%
Growth & Income Funds Average 12.35% n/a
CUMULATIVE TOTAL RETURNS show Class T's performance in percentage
terms over a set period - in this case, one year or since the fund
started on December 31, 1996. For example, if you had invested $1,000
in a fund that had a 5% return over the past year, the value of your
investment would be $1,050. You can compare Class T's returns to the
performance of the Standard & Poor's 500 Index - a widely recognized,
market capitalization-weighted index of common stocks. To measure how
Class T's performance stacked up against its peers, you can compare it
to the growth and income funds average, which reflects the performance
of mutual funds with similar objectives tracked by Lipper Analytical
Services, Inc. The past one year average represents a peer group of
746 mutual funds. These benchmarks include reinvested dividends and
capital gains, if any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR LIFE OF FUND
1998
FIDELITY ADV GROWTH & INCOME 23.00% 25.07%
- - CL T
FIDELITY ADV GROWTH & INCOME 18.70% 22.77%
- - CL T (INCL. 3.50% SALES
CHARGE)
S&P 500 23.66% 28.68%
Growth & Income Funds Average 12.35% n/a
AVERAGE ANNUAL TOTAL RETURNS take Class T's cumulative return and show
you what would have happened if Class T had performed at a constant
rate each year.
$10,000 OVER LIFE OF FUND
FA Growth & Income -CL T S&P 500
00274 SP001
1996/12/31 9650.00 10000.00
1997/01/31 9852.65 10624.80
1997/02/28 9910.55 10708.10
1997/03/31 9456.48 10268.10
1997/04/30 9968.42 10881.11
1997/05/31 10509.34 11543.55
1997/06/30 11030.92 12060.70
1997/07/31 11930.02 13020.37
1997/08/31 11311.29 12290.97
1997/09/30 11891.35 12964.15
1997/10/31 11533.65 12531.14
1997/11/30 12046.04 13111.21
1997/12/31 12321.85 13336.33
1998/01/31 12380.76 13483.83
1998/02/28 13225.13 14456.28
1998/03/31 13902.81 15196.59
1998/04/30 14001.06 15349.47
1998/05/31 13902.81 15085.61
1998/06/30 14561.49 15698.39
1998/07/31 14630.32 15531.20
1998/08/31 12457.40 13285.70
1998/09/30 13008.00 14136.78
1998/10/31 13961.73 15286.67
1998/11/30 14817.13 16213.19
IMATRL PRASUN SHR__CHT 19981130 19981210 102649 R00000000000026
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Growth & Income Fund - Class T on
December 31, 1996, when the fund started, and the current 3.50% sales
charge was paid. As the chart shows, by November 30, 1998, the value
of the investment would have grown to $14,817 - a 48.17% increase on
the initial investment. For comparison, look at how the Standard &
Poor's 500 Index did over the same period. With dividends and capital
gains, if any, reinvested, the same $10,000 investment would have
grown to $16,213 - a 62.13% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
long-term growth and
short-term volatility. In turn, the
share price and return of a
fund that invests in stocks or
bonds will vary. That means if
you sell your shares during
a market downturn, you might
lose money. But if you can
ride out the market's ups and
downs, you may have a gain.
(checkmark)
FIDELITY ADVISOR GROWTH & INCOME FUND - CLASS B
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can
look at the total percentage change in value, the average annual
percentage change or the growth of a hypothetical $10,000 investment.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). Class B shares' contingent deferred sales charges included in
the past one year and life of fund total return figures are 5% and 4%,
respectively. If Fidelity had not reimbursed certain class expenses,
the life of fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR LIFE OF FUND
1998
FIDELITY ADV GROWTH & INCOME 22.39% 52.04%
- - CL B
FIDELITY ADV GROWTH & INCOME 17.39% 48.04%
- - CL B (INCL. CONTINGENT
DEFERRED SALES CHARGE)
S&P 500 23.66% 62.13%
Growth & Income Funds Average 12.35% n/a
CUMULATIVE TOTAL RETURNS show Class B's performance in percentage
terms over a set period - in this case, one year or since the fund
started on December 31, 1996. For example, if you had invested $1,000
in a fund that had a 5% return over the past year, the value of your
investment would be $1,050. You can compare Class B's returns to the
performance of the Standard & Poor's 500 Index - a widely recognized,
market capitalization-weighted index of common stocks. To measure how
Class B's performance stacked up against its peers, you can compare it
to the growth and income funds average, which reflects the performance
of mutual funds with similar objectives tracked by Lipper Analytical
Services, Inc. The past one year average represents a peer group of
746 mutual funds. These benchmarks include reinvested dividends and
capital gains, if any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR LIFE OF FUND
1998
FIDELITY ADV GROWTH & INCOME 22.39% 24.43%
- - CL B
FIDELITY ADV GROWTH & INCOME 17.39% 22.71%
- - CL B (INCL. CONTINGENT
DEFERRED SALES CHARGE)
S&P 500 23.66% 28.68%
Growth & Income Funds Average 12.35% n/a
AVERAGE ANNUAL TOTAL RETURNS take Class B's cumulative return and show
you what would have happened if Class B had performed at a constant
rate each year.
$10,000 OVER LIFE OF FUND
FA Growth & Income -CL B S&P 500
00244 SP001
1996/12/31 10000.00 10000.00
1997/01/31 10210.00 10624.80
1997/02/28 10270.00 10708.10
1997/03/31 9799.46 10268.10
1997/04/30 10329.97 10881.11
1997/05/31 10880.50 11543.55
1997/06/30 11411.01 12060.70
1997/07/31 12331.90 13020.37
1997/08/31 11691.29 12290.97
1997/09/30 12281.86 12964.15
1997/10/31 11911.50 12531.14
1997/11/30 12421.99 13111.21
1997/12/31 12707.01 13336.33
1998/01/31 12757.76 13483.83
1998/02/28 13630.60 14456.28
1998/03/31 14320.76 15196.59
1998/04/30 14412.11 15349.47
1998/05/31 14310.61 15085.61
1998/06/30 14980.47 15698.39
1998/07/31 15041.37 15531.20
1998/08/31 12808.50 13285.70
1998/09/30 13366.72 14136.78
1998/10/31 14330.91 15286.67
1998/11/30 14804.00 16213.19
IMATRL PRASUN SHR__CHT 19981130 19981210 102025 R00000000000026
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Growth & Income Fund - Class B on
December 31, 1996, when the fund started. As the chart shows, by
November 30, 1998, the value of the investment, including the effect
of the applicable contingent deferred sales charge, would have grown
to $14,804 - a 48.04% increase on the initial investment. For
comparison, look at how the Standard & Poor's 500 Index did over the
same period. With dividends and capital gains, if any, reinvested, the
same $10,000 investment would have grown to $16,213 - a 62.13%
increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
long-term growth and
short-term volatility. In turn, the
share price and return of a
fund that invests in stocks or
bonds will vary. That means if
you sell your shares during
a market downturn, you might
lose money. But if you can
ride out the market's ups and
downs, you may have a gain.
(checkmark)
FIDELITY ADVISOR GROWTH & INCOME FUND - CLASS C
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can
look at the total percentage change in value, the average annual
percentage change or the growth of a hypothetical $10,000 investment.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). The initial offering of Class C shares took place on November
3, 1997. Class C shares bear a 1.00% 12b-1 fee that is reflected in
returns after November 3, 1997. Returns prior to November 3, 1997 are
those of Class B shares and reflect Class B shares 1.00% 12b-1 fee.
Class C's contingent deferred sales charge included in the past one
year and life of fund total return figures are 1% and 0%,
respectively. If Fidelity had not reimbursed certain class expenses,
the life of fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR LIFE OF FUND
1998
FIDELITY ADV GROWTH & INCOME 22.20% 51.78%
- - CL C
FIDELITY ADV GROWTH & INCOME 21.20% 51.78%
- - CL C (INCL. CONTINGENT
DEFERRED SALES CHARGE)
S&P 500 23.66% 62.13%
Growth & Income Funds Average 12.35% n/a
CUMULATIVE TOTAL RETURNS show Class C's performance in percentage
terms over a set period - in this case, one year or since the fund
started on December 31, 1996. For example, if you had invested $1,000
in a fund that had a 5% return over the past year, the value of your
investment would be $1,050. You can compare Class C's returns to the
performance of the Standard & Poor's 500 Index - a widely recognized,
market capitalization-weighted index of common stocks. To measure how
Class C's performance stacked up against its peers, you can compare it
to the growth and income funds average, which reflects the performance
of mutual funds with similar objectives tracked by Lipper Analytical
Services, Inc. The past one year average represents a peer group of
746 mutual funds. These benchmarks include reinvested dividends and
capital gains, if any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR LIFE OF FUND
1998
FIDELITY ADV GROWTH & INCOME 22.20% 24.32%
- - CL C
FIDELITY ADV GROWTH & INCOME 21.20% 24.32%
- - CL C (INCL. CONTINGENT
DEFERRED SALES CHARGE)
S&P 500 23.66% 28.68%
Growth & Income Funds Average 12.35% n/a
AVERAGE ANNUAL TOTAL RETURNS take Class C's cumulative return and show
you what would have happened if Class C had performed at a constant
rate each year.
$10,000 OVER LIFE OF FUND
FA Growth & Income -CL C S&P 500
00481 SP001
1996/12/31 10000.00 10000.00
1997/01/31 10210.00 10624.80
1997/02/28 10270.00 10708.10
1997/03/31 9799.46 10268.10
1997/04/30 10329.97 10881.11
1997/05/31 10880.50 11543.55
1997/06/30 11411.01 12060.70
1997/07/31 12331.90 13020.37
1997/08/31 11691.29 12290.97
1997/09/30 12281.86 12964.15
1997/10/31 11911.50 12531.14
1997/11/30 12421.24 13111.21
1997/12/31 12705.87 13336.33
1998/01/31 12756.53 13483.83
1998/02/28 13607.65 14456.28
1998/03/31 14296.64 15196.59
1998/04/30 14387.83 15349.47
1998/05/31 14276.38 15085.61
1998/06/30 14945.11 15698.39
1998/07/31 15005.90 15531.20
1998/08/31 12776.80 13285.70
1998/09/30 13334.07 14136.78
1998/10/31 14306.77 15286.67
1998/11/30 15178.15 16213.19
IMATRL PRASUN SHR__CHT 19981130 19981210 102223 R00000000000026
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Growth & Income Fund - Class C on
December 31, 1996, when the fund started. As the chart shows, by
November 30, 1998, the value of the investment, would have grown to
$15,178 - a 51.78% increase on the initial investment. For comparison,
look at how the Standard & Poor's 500 Index did over the same period.
With dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $16,213 - a 62.13% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
long-term growth and
short-term volatility. In turn, the
share price and return of a
fund that invests in stocks or
bonds will vary. That means if
you sell your shares during
a market downturn, you might
lose money. But if you can
ride out the market's ups and
downs, you may have a gain.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
When the final bell of the U.S. stock
market sounded on Monday,
November 23, 1998, the Dow
Jones Industrial Average stood at a
record high of 9374.27, serving
notice that the bleak economic
outlook from just a few short months
earlier would not keep positive
investor sentiment down. For the
12-month period ending November
30, 1998, the Dow - an index of
30 blue-chip stocks - returned
18.56%. What caused the
turnaround from the doldrums of
equity performance during the
summer and early fall? A variety of
factors: The economic problems in
Russia, Brazil and other emerging
markets began to dissipate; Asian
markets began to rebound; and,
perhaps most importantly, three
interest-rate cuts late in the period
by the Federal Reserve Board
helped stem the tide of a slowing
U.S. economy. All these factors
culminated in the Dow reaching its
record high late in November, a
peak that outpaced the previous
record set in July by nearly 40 points.
Small-cap stock performance was
still a far cry behind their large-cap
brethren. For the period, the Russell
2000 Index - a popular measure
of small-cap stock performance -
returned -6.62%, significantly
trailing the large-cap weighted
Standard & Poor's 500 Index's
return of 23.66%. Despite the late
rally in the equity market, this kind
of volatility has characterized the
entire year, and when it will level off
is impossible to predict.
An interview with Beth Terrana, Portfolio Manager of Fidelity Advisor
Growth & Income Fund
Q. HOW DID THE FUND PERFORM, BETH?
A. For the 12 months that ended November 30, 1998, the fund's Class A,
Class T, Class B and Class C shares returned 23.24%, 23.00%, 22.39%
and 22.20%, respectively. The growth and income funds average returned
12.35% in that time, according to Lipper Analytical Services, while
the Standard & Poor's 500 Index returned 23.66%.
Q. WHICH MARKET SECTORS HELPED FUND PERFORMANCE DURING THE PERIOD?
A. Good stock selection across several industry groups - including
media and leisure, diversified manufacturing and retail - helped
performance. Media stock Time Warner benefited from a renewed emphasis
on balance-sheet management and an improved return on assets, which
translated into a nice increase in its stock price. Diversified
manufacturing company Tyco International and retail-store chain
Wal-Mart also contributed positively to performance during the period,
as each company experienced better-than-expected earnings growth.
Lastly, the fund's stake in General Electric also helped. GE has a
history of good dividend payments, tremendous product lines with
dominant share in most of their markets and solid earnings growth -
attributes that were particularly appealing to wary investors
concerned with global financial turmoil.
Q. WHICH MARKET SECTORS HURT THE FUND'S PERFORMANCE?
A. An underweighted position in the technology sector was the primary
detractor from fund performance relative to the S&P 500. The fund's
underweighted exposure to the utility sector also hurt, as utility
companies gained favor among risk-averse investors seeking
high-dividend yields and greater protection from foreign market
volatility.
Q. TOGETHER, RETAIL AND FINANCE STOCKS REPRESENTED ABOUT 24% OF THE
FUND'S INVESTMENTS AT THE END OF THE PERIOD. HOW DID THESE TWO SECTORS
FARE?
A. Although retail stocks were solid performers over the past 12
months, finance stocks lagged the S&P 500 during the year, with bank
stocks particularly hard hit over the past few months. The weakness
among finance companies was a result of a number of interrelated
events. Many global banks suffered from trading losses and credit
losses in emerging markets. In addition, lending to hedge funds became
a loss-making proposition and equity market-related revenue sources
dried up. The subsequent tightening of credit markets further
depressed U.S. stock and bond markets and harmed many finance stocks.
The fund's positions in Citicorp - which merged with Travelers during
the period to form Citigroup - and Merrill Lynch performed weakly due
to these negative trends. At the end of the period, the fund no longer
owned a position in Merrill Lynch. Lastly, a rise in consumer spending
growth over the past 12 months helped propel the retail sector to
strong gains, and the fund benefited by overweighting the retail
sector during the year.
Q. ARE THERE ANY OTHER GROUPS OF STOCKS THAT RECENTLY CAUGHT YOUR EYE?
A. I've recently added to several of the fund's health care holdings,
as business profiles for both the pharmaceutical and medical device
industries continued to be healthy. Unit growth has been strong -
driven mainly by favorable demographics and new product development -
and the pricing environment within these areas has been relatively
calm. I've played health care in a couple of ways. First, the fund
held positions in some of the larger drug stocks, including Merck,
American Home Products and Schering-Plough. The fund also had stakes
in two of the largest drug wholesalers - McKesson and Cardinal Health
- - each of which benefited from industry consolidation, a focus on
bringing more value to their customers and the underlying growth in
pharmaceutical usage. Retail drug stores such as CVS also appealed to
me. CVS has also benefited from growing pharmaceutical usage, as well
as from excellent merchandising in its stores and strong management.
Q. WHAT ARE YOUR THOUGHTS GOING FORWARD?
A. The market should continue to focus its attention on the state of
the U.S. economy and whether or not we will enter a recession along
with a large part of the world. Actions by central bankers and
government policy around the world will be scrutinized. Much attention
also will be focused on U.S. consumers who, to some extent, have the
weight of the world resting on their shoulders. While this may sound a
bit drastic, it's not very far from the truth. High employment levels,
high personal income and low interest rates have made the U.S.
consumer one of the last strengths in the global economy, so U.S.
consumer trends could heavily impact the direction of many economies.
As corporate profit growth slows from very high levels, it becomes
even more important to know what you own and understand the risk and
potential reward of any particular stock.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
BETH TERRANA ON HOW
SHE PICKS STOCKS:
"Given the high levels of market
volatility over the past year, I believe
it's increasingly important for you
to understand how I manage Fidelity
Advisor Growth & Income. I've been
picking stocks for a long time, and
while market trends change
constantly, my investment approach
has stayed about the same. I have
an eclectic, company-specific
approach to stock picking that
leads to investments in both growth
and value stocks - with the mix
being a function of market
conditions and overall valuation
levels. When choosing stocks I
emphasize fundamental, bottom-up
analysis and frequent company
contact. Over my years as a
portfolio manager at Fidelity, I have
been most successful at identifying
companies in the midst of change
and assessing whether their
evolving prospects are accurately
reflected in their stock prices. My
preferred investments include
turnarounds/restructurings and
undervalued growth stocks. The
former category includes companies
that are undergoing strategic
restructuring that enhances their
growth prospects. The latter
category includes companies whose
growth prospects are misperceived
by the market. In other words, I
focus on `growth at a price' as
opposed to growth at any price.
Similarly, I won't purchase value
stocks solely because of their value
merits - earnings growth must be
expected. I also keep Advisor Growth
& Income diversified across
industry sectors. I believe the
fund's well-rounded profile, with
investments in both growth and
value stocks, makes it an
excellent choice as a core
holding."
FUND FACTS
GOAL: seeks a high total return
through a combination of
current income and capital
appreciation
START DATE: December 31,
1996
SIZE: as of November 30,
1998, more than $749 million
MANAGER: Beth Terrana, since
inception; joined Fidelity in
1983
(checkmark)
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF NOVEMBER
30, 1998
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE STOCKS 6 MONTHS AGO
Time Warner, Inc. 3.6 3.0
General Electric Co. 3.2 3.0
Microsoft Corp. 2.2 1.5
Philip Morris Companies, Inc. 2.2 0.9
Wal-Mart Stores, Inc. 2.0 2.6
Merck & Co., Inc. 2.0 1.5
Fannie Mae 1.9 1.0
MCI WorldCom, Inc. 1.9 1.3
Tyco International Ltd. 1.8 2.6
Citigroup, Inc. 1.7 3.2
TOP FIVE MARKET SECTORS AS OF
NOVEMBER 30, 1998
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE MARKET SECTORS 6
MONTHS AGO
FINANCE 14.6 17.5
TECHNOLOGY 12.2 9.7
HEALTH 10.3 11.5
RETAIL & WHOLESALE 9.8 11.6
MEDIA & LEISURE 8.7 8.6
</TABLE>
ASSET ALLOCATION (% OF FUND'S
INVESTMENTS)
AS OF NOVEMBER 30, 1998 * AS OF MAY 31, 1998 **
Row: 1, Col: 1, Value: 9.4
Row: 1, Col: 2, Value: 1.7
Row: 1, Col: 3, Value: 1.3
Row: 1, Col: 4, Value: 87.59999999999999
Stocks 90.8%
Bonds 0.0%
Convertible
securities 1.5%
Short-term
investments 7.7%
FOREIGN
INVESTMENTS 5.3%
Stocks 87.6%
Bonds 1.3%
Convertible
securities 1.7%
Short-term
investments 9.4%
FOREIGN
INVESTMENTS 3.0%
Row: 1, Col: 1, Value: 7.7
Row: 1, Col: 2, Value: 1.5
Row: 1, Col: 3, Value: 0.0
Row: 1, Col: 4, Value: 90.8
*
**
INVESTMENTS NOVEMBER 30, 1998
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 87.6%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 1.4%
AEROSPACE & DEFENSE - 0.8%
Gulfstream Aerospace Corp. (a) 21,700 $ 1,114,838
Textron, Inc. 65,400 5,080,762
6,195,600
DEFENSE ELECTRONICS - 0.4%
Raytheon Co.:
Class A 12,600 689,063
Class B 38,400 2,126,400
2,815,463
SHIP BUILDING & REPAIR - 0.2%
General Dynamics Corp. 22,300 1,294,794
TOTAL AEROSPACE & DEFENSE 10,305,857
BASIC INDUSTRIES - 0.6%
CHEMICALS & PLASTICS - 0.4%
du Pont (E.I.) de Nemours & 7,600 446,500
Co.
Monsanto Co. 42,800 1,939,375
Praxair, Inc. 24,200 924,138
3,310,013
METALS & MINING - 0.2%
Aluminum Co. of America 21,800 1,615,925
TOTAL BASIC INDUSTRIES 4,925,938
CONSTRUCTION & REAL ESTATE -
1.7%
BUILDING MATERIALS - 1.3%
Masco Corp. 306,100 8,838,638
Sherwin-Williams Co. 24,700 700,863
9,539,501
REAL ESTATE INVESTMENT TRUSTS
- - 0.4%
Duke Realty Investments, Inc. 47,200 1,070,850
Equity Residential Properties 30,700 1,298,994
Trust (SBI)
Public Storage, Inc. 39,800 1,057,188
3,427,032
TOTAL CONSTRUCTION & REAL 12,966,533
ESTATE
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
DURABLES - 2.0%
AUTOS, TIRES, & ACCESSORIES -
0.8%
Danaher Corp. 33,900 $ 1,546,688
Federal-Mogul Corp. 5,400 306,450
Ford Motor Co. 62,900 3,475,225
General Motors Corp. 5,500 385,000
Pep Boys-Manny, Moe & Jack 15,000 211,875
5,925,238
CONSUMER DURABLES - 0.1%
Minnesota Mining & 11,200 899,500
Manufacturing Co.
CONSUMER ELECTRONICS - 0.9%
Black & Decker Corp. 70,300 3,809,381
Newell Co. 58,700 2,597,475
6,406,856
HOME FURNISHINGS - 0.1%
Leggett & Platt, Inc. 31,600 716,925
TEXTILES & APPAREL - 0.1%
VF Corp. 21,900 1,074,469
TOTAL DURABLES 15,022,988
ENERGY - 3.7%
ENERGY SERVICES - 0.6%
Halliburton Co. 77,900 2,288,313
Schlumberger Ltd. 49,100 2,194,156
4,482,469
OIL & GAS - 3.1%
Atlantic Richfield Co. 700 46,550
British Petroleum Co. PLC ADR 59,599 5,490,558
Chevron Corp. 27,600 2,308,050
Exxon Corp. 47,100 3,535,444
Mobil Corp. 24,400 2,102,975
Royal Dutch Petroleum Co. (NY 65,600 3,083,200
Registry Gilder 1.25)
Texaco, Inc. 58,900 3,390,431
Total SA sponsored ADR 28,100 1,717,613
USX-Marathon Group 67,100 1,903,963
23,578,784
TOTAL ENERGY 28,061,253
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
FINANCE - 14.4%
BANKS - 4.2%
Bank of New York Co., Inc. 225,300 $ 7,716,525
Bank One Corp. 27,900 1,431,619
BankBoston Corp. 82,400 3,429,900
Chase Manhattan Corp. 183,500 11,640,781
Comerica, Inc. 12,750 822,375
National City Corp. 8,400 564,900
U.S. Bancorp 168,600 6,206,588
31,812,688
CREDIT & OTHER FINANCE - 4.0%
American Express Co. 117,300 11,737,331
Associates First Capital 68,500 5,334,438
Corp.
Citigroup, Inc. 259,950 13,046,241
30,118,010
FEDERAL SPONSORED CREDIT - 3.5%
Fannie Mae 203,000 14,768,250
Freddie Mac 196,300 11,876,150
26,644,400
INSURANCE - 2.4%
AFLAC, Inc. 87,600 3,230,250
Allstate Corp. 38,000 1,548,500
American International Group, 93,150 8,756,100
Inc.
Hartford Financial Services 24,300 1,341,056
Group, Inc.
MBIA, Inc. 14,400 932,400
MGIC Investment Corp. 6,400 281,200
Travelers Property Casualty 12,800 440,800
Corp. Class A
UNUM Corp. 24,700 1,330,713
17,861,019
SAVINGS & LOANS - 0.1%
Charter One Financial, Inc. 21,868 649,206
SECURITIES INDUSTRY - 0.2%
Morgan Stanley, Dean Witter & 23,100 1,611,225
Co.
TOTAL FINANCE 108,696,548
HEALTH - 9.9%
DRUGS & PHARMACEUTICALS - 6.3%
Allergan, Inc. 6,700 407,863
American Home Products Corp. 97,100 5,170,575
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
HEALTH - CONTINUED
DRUGS & PHARMACEUTICALS -
CONTINUED
Amgen, Inc. (a) 38,600 $ 2,904,650
Bristol-Myers Squibb Co. 70,400 8,628,400
Cytyc Corp. (a) 19,300 382,381
Elan Corp. PLC ADR (a) 5,800 395,125
Lilly (Eli) & Co. 71,500 6,412,656
Merck & Co., Inc. 96,600 14,960,925
Schering-Plough Corp. 78,900 8,392,988
47,655,563
MEDICAL EQUIPMENT & SUPPLIES
- - 3.6%
Abbott Laboratories 21,300 1,022,400
Allegiance Corp. 17,600 709,500
Baxter International, Inc. 13,200 839,025
Becton, Dickinson & Co. 65,500 2,783,750
Boston Scientific Corp. (a) 6,400 316,800
Cardinal Health, Inc. 103,350 7,092,394
Guidant Corp. 34,600 2,969,113
Johnson & Johnson 66,300 5,386,875
McKesson Corp. 27,200 1,936,300
Medtronic, Inc. 61,200 4,142,475
Stryker Corp. 9,000 380,250
27,578,882
TOTAL HEALTH 75,234,445
INDUSTRIAL MACHINERY &
EQUIPMENT - 6.6%
ELECTRICAL EQUIPMENT - 4.1%
Emerson Electric Co. 56,100 3,646,500
General Electric Co. 270,300 24,462,150
Honeywell, Inc. 35,300 2,821,794
30,930,444
INDUSTRIAL MACHINERY &
EQUIPMENT - 2.5%
Dover Corp. 47,600 1,695,750
Illinois Tool Works, Inc. 5,400 343,238
Ingersoll-Rand Co. 38,150 1,785,897
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
INDUSTRIAL MACHINERY &
EQUIPMENT - CONTINUED
INDUSTRIAL MACHINERY &
EQUIPMENT - CONTINUED
Stanley Works 49,300 $ 1,506,731
Tyco International Ltd. 207,708 13,669,783
19,001,399
TOTAL INDUSTRIAL MACHINERY & 49,931,843
EQUIPMENT
MEDIA & LEISURE - 8.7%
BROADCASTING - 5.6%
CBS Corp. 134,800 4,018,725
Comcast Corp. Class A 78,200 3,792,700
(special)
MediaOne Group, Inc. 59,800 2,421,900
Tele-Communications, Inc. 119,900 5,065,775
(TCI Group) Series A (a)
Time Warner, Inc. 258,500 27,336,359
42,635,459
ENTERTAINMENT - 1.0%
Carnival Corp. 24,500 845,250
Viacom, Inc.:
Class A (a) 500 32,844
Class B (non-vtg.) (a) 94,900 6,316,781
7,194,875
PUBLISHING - 1.6%
Harcourt General, Inc. 30,900 1,599,075
McGraw-Hill Companies, Inc. 90,300 8,081,850
Meredith Corp. 51,500 1,998,844
11,679,769
RESTAURANTS - 0.5%
McDonald's Corp. 56,700 3,972,544
TOTAL MEDIA & LEISURE 65,482,647
NONDURABLES - 7.3%
BEVERAGES - 0.4%
Coca-Cola Co. (The) 41,100 2,879,569
FOODS - 1.2%
Campbell Soup Co. 33,700 1,925,113
Dean Foods Co. 61,300 2,789,150
Heinz (H.J.) Co. 54,700 3,189,694
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
NONDURABLES - CONTINUED
FOODS - CONTINUED
Nabisco Holdings Corp. Class A 11,100 $ 442,613
Sara Lee Corp. 17,300 1,009,888
9,356,458
HOUSEHOLD PRODUCTS - 3.5%
Avon Products, Inc. 212,600 8,636,875
Clorox Co. 24,800 2,754,350
Colgate-Palmolive Co. 21,600 1,849,500
First Brands Corp. 15,100 565,306
Gillette Co. 1,900 87,281
Procter & Gamble Co. 53,200 4,661,650
Rubbermaid, Inc. 38,400 1,269,600
Unilever NV (NY shares) 56,800 4,391,350
Unilever PLC 210,100 2,206,064
26,421,976
TOBACCO - 2.2%
Philip Morris Companies, Inc. 292,600 16,367,313
TOTAL NONDURABLES 55,025,316
RETAIL & WHOLESALE - 9.7%
APPAREL STORES - 1.4%
Abercrombie & Fitch Co. Class 26,300 1,472,800
A (a)
Payless ShoeSource, Inc. (a) 63,400 3,090,750
TJX Companies, Inc. 245,200 6,283,250
10,846,800
DRUG STORES - 1.6%
CVS Corp. 250,750 12,380,781
GENERAL MERCHANDISE STORES -
4.7%
Costco Companies, Inc. (a) 84,000 5,271,000
Dayton Hudson Corp. 144,500 6,502,500
Federated Department Stores, 28,965 1,207,478
Inc. (a)
Nordstrom, Inc. 91,300 3,400,925
Saks Holdings, Inc. (a) 143,575 3,948,313
Wal-Mart Stores, Inc. 200,400 15,092,625
35,422,841
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
RETAIL & WHOLESALE - CONTINUED
GROCERY STORES - 0.7%
Kroger Co. (a) 36,100 $ 1,915,556
Safeway, Inc. (a) 55,600 2,936,375
4,851,931
RETAIL & WHOLESALE,
MISCELLANEOUS - 1.3%
Amazon.com, Inc. (a) 9,400 1,804,800
Home Depot, Inc. 160,400 7,979,900
9,784,700
TOTAL RETAIL & WHOLESALE 73,287,053
SERVICES - 2.3%
ADVERTISING - 1.6%
Interpublic Group of 44,200 3,038,750
Companies, Inc.
Omnicom Group, Inc. 168,200 8,988,188
12,026,938
PRINTING - 0.2%
Donnelley (R.R.) & Sons Co. 46,700 1,981,831
SERVICES - 0.5%
Ecolab, Inc. 82,200 2,543,063
Modis Professional Services, 17,600 210,100
Inc. (a)
ServiceMaster Co. 35,500 763,250
3,516,413
TOTAL SERVICES 17,525,182
TECHNOLOGY - 11.7%
COMMUNICATIONS EQUIPMENT - 2.0%
Ascend Communications, Inc. 62,100 3,489,244
(a)
Cisco Systems, Inc. (a) 69,250 5,219,719
Lucent Technologies, Inc. 45,200 3,890,025
OY Nokia AB sponsored ADR 20,800 2,038,400
14,637,388
COMPUTER SERVICES & SOFTWARE
- - 3.5%
America Online, Inc. 40,400 3,537,525
IMS Health, Inc. 44,100 2,927,138
Intuit, Inc. (a) 22,700 1,313,763
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TECHNOLOGY - CONTINUED
COMPUTER SERVICES & SOFTWARE
- - CONTINUED
Microsoft Corp. (a) 136,000 $ 16,592,000
Oracle Corp. (a) 54,600 1,870,050
26,240,476
COMPUTERS & OFFICE EQUIPMENT
- - 4.4%
Apple Computer, Inc. (a) 65,600 2,095,100
Compaq Computer Corp. 80,100 2,603,250
EMC Corp. (a) 38,200 2,769,500
International Business 49,900 8,233,500
Machines Corp.
Pitney Bowes, Inc. 66,600 3,729,600
SCI Systems, Inc. (a) 11,300 549,463
Unisys Corp. (a) 46,900 1,336,650
Xerox Corp. 113,500 12,201,250
33,518,313
ELECTRONIC INSTRUMENTS - 0.3%
Applied Materials, Inc. (a) 59,700 2,313,375
ELECTRONICS - 1.5%
Intel Corp. 51,900 5,585,738
Motorola, Inc. 66,000 4,092,000
Texas Instruments, Inc. 23,800 1,817,725
11,495,463
TOTAL TECHNOLOGY 88,205,015
TRANSPORTATION - 0.3%
RAILROADS - 0.3%
Burlington Northern Santa Fe 17,400 591,600
Corp.
Union Pacific Corp. 32,700 1,590,038
2,181,638
UTILITIES - 7.3%
ELECTRIC UTILITY - 2.6%
DQE, Inc. 2,100 86,231
Duke Energy Corp. 70,700 4,423,169
Entergy Corp. 55,300 1,620,981
FirstEnergy Corp. 29,800 921,938
FPL Group, Inc. 50,400 3,087,000
Illinova Corp. 40,000 1,082,500
IPALCO Enterprises, Inc. 39,100 1,959,888
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
UTILITIES - CONTINUED
ELECTRIC UTILITY - CONTINUED
PECO Energy Co. 46,300 $ 1,857,788
PG&E Corp. 69,500 2,150,156
Unicom Corp. 62,300 2,347,931
19,537,582
GAS - 0.0%
Sempra Energy 1,700 42,606
TELEPHONE SERVICES - 4.7%
ALLTEL Corp. 42,600 2,257,800
AT&T Corp. 110,400 6,879,300
GTE Corp. 13,800 855,600
MCI WorldCom, Inc. (a) 237,726 14,025,834
Qwest Communications 40,600 1,624,000
International, Inc. (a)
SBC Communications, Inc. 121,000 5,800,438
Sprint Corp.:
(FON Group) 55,400 4,030,350
(PCS Group) (a) 100 1,600
35,474,922
TOTAL UTILITIES 55,055,110
TOTAL COMMON STOCKS 661,907,366
(Cost $547,099,555)
CONVERTIBLE PREFERRED STOCKS
- - 0.5%
FINANCE - 0.2%
CREDIT & OTHER FINANCE - 0.2%
Federal Mogul Financing Trust 27,200 1,740,800
$3.50 (d)
HEALTH - 0.3%
MEDICAL EQUIPMENT & SUPPLIES
- - 0.3%
McKesson Financing Trust:
$2.50 (d) 3,600 353,700
$2.50 14,400 1,414,800
1,768,500
TOTAL CONVERTIBLE PREFERRED 3,509,300
STOCKS
(Cost $3,314,409)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CONVERTIBLE BONDS - 1.2%
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT VALUE (NOTE 1)
HEALTH - 0.1%
MEDICAL FACILITIES MANAGEMENT
- - 0.1%
Total Renal Care Holdings, B1 $ 980,000 $ 1,011,850
Inc. 7% 5/15/09 (d)
INDUSTRIAL MACHINERY &
EQUIPMENT - 0.5%
ELECTRICAL EQUIPMENT - 0.3%
ANTEC Corp. 4.5% 5/15/03 (d) B2 2,013,000 1,982,805
POLLUTION CONTROL - 0.2%
Waste Management, Inc. 4% Ba1 1,393,000 1,622,845
2/1/02
TOTAL INDUSTRIAL MACHINERY & 3,605,650
EQUIPMENT
RETAIL & WHOLESALE - 0.1%
RETAIL & WHOLESALE,
MISCELLANEOUS - 0.1%
Home Depot, Inc. 3.25% 10/1/01 A1 451,000 983,180
TECHNOLOGY - 0.5%
COMPUTERS & OFFICE EQUIPMENT
- - 0.5%
EMC Corp. 3.25% 3/15/02 Ba2 542,000 1,756,080
Unisys Corp. 8.25% 3/15/06 B 425,000 1,761,625
3,517,705
ELECTRONIC INSTRUMENTS - 0.0%
Thermo Electron Corp. 4.25% Ba2 406,000 359,818
1/1/03 (d)
TOTAL TECHNOLOGY 3,877,523
TOTAL CONVERTIBLE BONDS 9,478,203
(Cost $7,987,092)
U.S. TREASURY OBLIGATIONS -
1.3%
U.S. Treasury Bond 6.75% Aaa 5,100,000 6,146,316
8/15/26
U.S. Treasury Notes 7% 7/15/06 Aaa 3,300,000 3,754,773
TOTAL U.S. TREASURY OBLIGATIONS 9,901,089
(Cost $10,088,000)
</TABLE>
CASH EQUIVALENTS - 9.4%
SHARES VALUE (NOTE 1)
Taxable Central Cash Fund (c) 70,858,407 $ 70,858,407
(Cost $70,858,407)
TOTAL INVESTMENT IN $ 755,654,365
SECURITIES - 100%
(Cost $639,347,463)
LEGEND
(a) Non-income producing
(b) Standard & Poor's credit ratings are used in the absence of a
rating by Moody's Investors Service, Inc.
(c) At period end, the seven-day yield on the Taxable Central Cash
Fund was 4.81%. The yield refers to the income earned by investing in
the fund over the seven-day period, expressed as an annual percentage.
(d) Security exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in
transactions exempt from registration, normally to qualified
institutional buyers. At the period end, the value of these securities
amounted to $5,448,973 or 0.7% of net assets.
INCOME TAX INFORMATION
At November 30, 1998, the aggregate cost of investment securities for
income tax purposes was $643,604,137. Net unrealized appreciation
aggregated $112,050,228, of which $121,933,283 related to appreciated
investment securities and $9,883,055 related to depreciated investment
securities.
At November 30, 1998, the fund had a capital loss carryforward of
approximately $13,634,000 all of which will expire on November 30,
2006.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1998
ASSETS
Investment in securities, at $ 755,654,365
value (cost $639,347,463) -
See accompanying schedule
Receivable for investments 333,515
sold
Receivable for fund shares 4,677,317
sold
Dividends receivable 723,198
Interest receivable 496,236
Other receivables 220
TOTAL ASSETS 761,884,851
LIABILITIES
Payable for investments $ 10,462,150
purchased
Payable for fund shares 697,734
redeemed
Accrued management fee 289,081
Distribution fees payable 333,088
Other payables and accrued 282,779
expenses
TOTAL LIABILITIES 12,064,832
NET ASSETS $ 749,820,019
Net Assets consist of:
Paid in capital $ 653,461,921
Undistributed net investment 228,264
income
Accumulated undistributed net (20,177,646)
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 116,307,480
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS $ 749,820,019
STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
NOVEMBER 30, 1998
CALCULATION OF MAXIMUM $15.09
OFFERING PRICE CLASS A: NET
ASSET VALUE and redemption
price per share
($34,614,017 (divided by)
2,293,888 shares)
Maximum offering price per $16.01
share (100/94.25 of $15.09)
CLASS T: NET ASSET VALUE and $15.07
redemption price per share
($400,322,399 (divided by)
26,571,886 shares)
Maximum offering price per $15.62
share (100/96.50 of $15.07)
CLASS B: NET ASSET VALUE and $14.98
offering price per share
($158,179,570 (divided by)
10,562,216 shares) A
CLASS C: NET ASSET VALUE and $14.98
offering price per share
($59,652,077 (divided by)
3,983,264 shares) A
INSTITUTIONAL CLASS: NET $15.10
ASSET VALUE, offering price
and redemption price per
share ($97,051,956 (divided
by) 6,426,882 shares)
A REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1998
INVESTMENT INCOME $ 5,185,506
Dividends
Interest 1,997,215
TOTAL INCOME 7,182,721
EXPENSES
Management fee $ 2,243,407
Transfer agent fees 926,521
Distribution fees 2,319,029
Accounting fees and expenses 264,289
Non-interested trustees' 1,510
compensation
Custodian fees and expenses 26,820
Registration fees 214,353
Audit 28,053
Legal 3,187
Miscellaneous 6,653
Total expenses before 6,033,822
reductions
Expense reductions (52,888) 5,980,934
NET INVESTMENT INCOME 1,201,787
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities (20,103,025)
Foreign currency transactions 2,438 (20,100,587)
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 105,447,211
Assets and liabilities in 603 105,447,814
foreign currencies
NET GAIN (LOSS) 85,347,227
NET INCREASE (DECREASE) IN $ 86,549,014
NET ASSETS RESULTING FROM
OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED NOVEMBER 30, 1998 DECEMBER 31, 1996
(COMMENCEMENT OF OPERATIONS)
TO NOVEMBER 30,
1997
INCREASE (DECREASE) IN NET
ASSETS
Operations Net investment $ 1,201,787 $ 163,096
income
Net realized gain (loss) (20,100,587) 3,673,124
Change in net unrealized 105,447,814 10,859,666
appreciation (depreciation)
NET INCREASE (DECREASE) IN 86,549,014 14,695,886
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (1,050,298) (84,141)
From net investment income
From net realized gain (3,580,995) -
TOTAL DISTRIBUTIONS (4,631,293) (84,141)
Share transactions - net 424,330,795 228,959,758
increase (decrease)
TOTAL INCREASE (DECREASE) 506,248,516 243,571,503
IN NET ASSETS
NET ASSETS
Beginning of period 243,571,503 -
End of period (including $ 749,820,019 $ 243,571,503
undistributed net investment
income of $228,264 and
$78,935, respectively)
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
YEARS ENDED NOVEMBER 30,
1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 12.47 $ 10.00
period
Income from Investment
Operations
Net investment income D .06 .04
Net realized and unrealized 2.79 2.46
gain (loss)
Total from investment 2.85 2.50
operations
Less Distributions
From net investment income (.05) (.03)
From net realized gain (.18) -
Total distributions (.23) (.03)
Net asset value, end of period $ 15.09 $ 12.47
TOTAL RETURN B, C 23.24% 25.04%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 34,614 $ 6,977
(000 omitted)
Ratio of expenses to average 1.12% 1.50% A, F
net assets
Ratio of expenses to average 1.11% G 1.50% A
net assets after expense
reductions
Ratio of net investment .46% .34% A
income to average net assets
Portfolio turnover 54% 82% A
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD DECEMBER 31, 1996 (COMMENCEMENT OF SALE OF CLASS A
SHARES) TO NOVEMBER 30, 1997.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - CLASS T
YEARS ENDED NOVEMBER 30,
1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 12.46 $ 10.00
period
Income from Investment
Operations
Net investment income D .04 .03
Net realized and unrealized 2.78 2.45
gain (loss)
Total from investment 2.82 2.48
operations
Less Distributions
From net investment income (.03) (.02)
From net realized gain (.18) -
Total distributions (.21) (.02)
Net asset value, end of period $ 15.07 $ 12.46
TOTAL RETURN B, C 23.00% 24.83%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 400,322 $ 133,468
(000 omitted)
Ratio of expenses to average 1.31% 1.59% A
net assets
Ratio of expenses to average 1.30% F 1.59% A
net assets after expense
reductions
Ratio of net investment .27% .24% A
income to average net assets
Portfolio turnover 54% 82% A
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD DECEMBER 31, 1996 (COMMENCEMENT OF SALE OF CLASS T
SHARES) TO NOVEMBER 30, 1997.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - CLASS B
YEARS ENDED NOVEMBER 30,
1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 12.41 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) (.03) (.04)
D
Net realized and unrealized 2.77 2.46
gain (loss)
Total from investment 2.74 2.42
operations
Less Distributions
From net investment income - (.01)
From net realized gain (.17) -
Total distributions (.17) (.01)
Net asset value, end of period $ 14.98 $ 12.41
TOTAL RETURN B, C 22.39% 24.22%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 158,180 $ 28,825
(000 omitted)
Ratio of expenses to average 1.83% 2.25% A, F
net assets
Ratio of expenses to average 1.82% G 2.25% A
net assets after expense
reductions
Ratio of net investment (.25)% (.42)% A
income (loss) to average net
assets
Portfolio turnover 54% 82% A
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE
AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD DECEMBER 31, 1996 (COMMENCEMENT OF SALE OF CLASS B
SHARES) TO NOVEMBER 30, 1997.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - CLASS C
YEARS ENDED NOVEMBER 30,
1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 12.45 $ 12.22
period
Income from Investment
Operations
Net investment income (loss) (.04) -
D
Net realized and unrealized 2.76 .23
gain (loss)
Total from investment 2.72 .23
operations
Less Distributions
From net investment income (.01) -
From net realized gain (.18) -
Total distributions (.19) -
Net asset value, end of period $ 14.98 $ 12.45
TOTAL RETURN B, C 22.20% 1.88%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 59,652 $ 391
(000 omitted)
Ratio of expenses to average 1.87% 2.24% A, F
net assets
Ratio of expenses to average 1.85% G 2.24% A
net assets after expense
reductions
Ratio of net investment (.27)% .19% A
income (loss) to average net
assets
Portfolio turnover 54% 82% A
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE
AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD NOVEMBER 3, 1997 (COMMENCEMENT OF SALE OF CLASS C
SHARES) TO NOVEMBER 30, 1997.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
YEARS ENDED NOVEMBER 30,
1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 12.47 $ 10.00
period
Income from Investment
Operations
Net investment income D .11 .07
Net realized and unrealized 2.79 2.45
gain (loss)
Total from investment 2.90 2.52
operations
Less Distributions
From net investment income (.09) (.05)
From net realized gain (.18) -
Total distributions (.27) (.05)
Net asset value, end of period $ 15.10 $ 12.47
TOTAL RETURN B, C 23.69% 25.26%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 97,052 $ 73,911
(000 omitted)
Ratio of expenses to average .76% 1.19% A
net assets
Ratio of expenses to average .75% F 1.19% A
net assets after expense
reductions
Ratio of net investment .82% .64% A
income to average net assets
Portfolio turnover 54% 82% A
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD DECEMBER 31, 1996 (COMMENCEMENT OF SALE OF
INSTITUTIONAL CLASS SHARES) TO NOVEMBER 30, 1997.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1998
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Growth & Income Fund (the fund) is a fund of Fidelity
Advisor Series I (the trust) and is authorized to issue an unlimited
number of shares. The trust is registered under the Investment Company
Act of 1940, as amended (the 1940 Act), as an open-end management
investment company organized as a Massachusetts business trust.
The fund offers Class A, Class T, Class B, Class C, and Institutional
Class shares, each of which has equal rights as to assets and voting
privileges. Each class has exclusive voting rights with respect to
matters that affect that class. Class B shares will automatically
convert to Class A shares after a holding period of seven years from
the initial date of purchase. Investment income, realized and
unrealized capital gains and losses, the common expenses of the fund,
and certain fund-level expense reductions, if any, are allocated on a
pro rata basis to each class based on the relative net assets of each
class to the total net assets of the fund. Each class of shares
differs in its respective distribution, transfer agent, and certain
other class-specific fees, expenses, and expense reductions.
The financial statements have been prepared in conformity with
generally accepted accounting principles which require management to
make certain estimates and assumptions at the date of the financial
statements. The following summarizes the significant accounting
policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Securities (including restricted
securities) for which exchange quotations are not readily available
(and in certain cases debt securities which trade on an exchange) are
valued primarily using dealer-supplied valuations or at their fair
value as determined in good faith under consistently applied
procedures under the general supervision of the Board of Trustees.
Short-term securities with remaining maturities of sixty days or less
for which quotations are not readily available are valued at amortized
cost or original cost plus accrued interest, both of which approximate
current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases
and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
and settlement date on purchases and sales of securities. The effects
of changes in foreign currency exchange rates on investments in
securities are included with the net realized and unrealized gain or
loss on investment securities.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent that it distributes substantially all of
its taxable income for its fiscal year. The schedule of investments
includes information regarding income taxes under the caption "Income
Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend
date, except certain dividends from foreign securities where the
ex-dividend date may have passed, are recorded as soon as the fund is
informed of the ex-dividend date. Non-cash dividends included in
dividend income, if any, are recorded at the fair market value of the
securities received. Interest income is accrued as earned. Investment
income is recorded net of foreign taxes withheld where recovery of
such taxes is uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date. Income dividends and capital gain distributions are
declared separately for each class.
Income and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. These differences, which may result in
distribution reclassifications, are primarily due to differing
treatments for foreign currency transactions, non-taxable dividends,
capital loss carryforwards and losses deferred due to wash sales.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Undistributed net investment income and accumulated undistributed net
realized gain (loss) on investments and foreign currency transactions
may include temporary book and tax basis differences which will
reverse in a subsequent period. Any taxable income or gain remaining
at fiscal year end is distributed in the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the contracts'
terms. The U.S. dollar value of foreign currency contracts is
determined using contractual currency exchange rates established at
the time of each trade.
2. OPERATING POLICIES - CONTINUED
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with
other affiliated entities of Fidelity Management & Research Company
(FMR), may transfer uninvested cash balances into one or more joint
trading accounts. These balances are invested in one or more
repurchase agreements for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are
marked-to-market daily and maintained at a value at least equal to the
principal amount of the repurchase agreement (including accrued
interest). FMR, the fund's investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
TAXABLE CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by
the SEC, the fund may invest in the Taxable Central Cash Fund (the
Cash Fund) managed by Fidelity Investments Money Management, Inc., an
affiliate of FMR. The Cash Fund is an open-end money market fund
available only to investment companies and other accounts managed by
FMR and its affiliates. The Cash Fund seeks preservation of capital,
liquidity, and current income by investing in U.S. Treasury securities
and repurchase agreements for these securities. Income distributions
from the Cash Fund are declared daily and paid monthly from net
interest income. Income distributions earned by the fund are recorded
as interest income in the accompanying financial statements.
RESTRICTED SECURITIES. The fund is permitted to invest in securities
that are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from
registration or to the public if the securities are registered.
Disposal of these securities may involve time-consuming negotiations
and expense, and prompt sale at an acceptable price may be difficult.
At the end of the period, the fund had no investments in restricted
securities (excluding 144A issues).
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $603,507,836 and $231,466,590, respectively, of which U.S.
government and government agency obligations aggregated $10,088,000
and $0, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus a
fixed individual fund fee rate applied to the average net assets of
the fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds advised by FMR. The rates ranged from .2500% to .5200% for the
period. The annual individual fund
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
fee rate is .20%. In the event that these rates were lower than the
contractual rates in effect during the period, FMR voluntarily
implemented the above rates, as they resulted in the same or a lower
management fee. For the period, the management fee was equivalent to
annual rate of .49% of average net assets.
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the
1940 Act, the Trustees have adopted separate distribution plans with
respect to each class of shares (collectively referred to as "the
Plans"). Under certain of the Plans, the class pays Fidelity
Distributors Corporation (FDC), an affiliate of FMR, a distribution
and service fee. A portion of this fee may be reallowed to securities
dealers, banks and other financial institutions for the distribution
of each class of shares and providing shareholder support services.
For the period, this fee was based on the following annual rates of
the average net assets of each applicable class:
CLASS A .25%
CLASS T .50%
CLASS B 1.00%*
CLASS C 1.00%*
* .75% REPRESENTS A DISTRIBUTION FEE AND .25% REPRESENTS A SHAREHOLDER
SERVICE FEE.
For the period, each class paid FDC the following amounts, a portion
of which was retained by FDC:
PAID TO FDC RETAINED BY FDC
CLASS A $ 44,707 $ 448
CLASS T 1,271,397 23,998
CLASS B 785,039 588,873
CLASS C 217,886 217,431
$ 2,319,029 $ 830,750
Under the Plans, FMR may use its resources to pay administrative and
promotional expenses related to the sale of each class' shares. The
Plans also authorize payments to third parties that assist in the sale
of each class' shares or render shareholder support services. For the
period, the following amounts were paid to third parties under the
Plans:
CLASS A $ 4,725
CLASS T 28,163
CLASS B 11,271
CLASS C 10,791
INSTITUTIONAL CLASS 2,341
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
SALES LOAD. FDC receives a front-end sales charge of up to 5.75% for
selling Class A shares, and 3.50% for selling Class T shares of the
fund. FDC receives the proceeds of contingent deferred sales charges
levied on Class B share redemptions occurring within six years of
purchase and Class C share redemptions occurring within one year of
purchase. Contingent deferred sales charges are based on declining
rates ranging from 5% to 1% for Class B and 1% for Class C, of the
lesser of the cost of shares at the initial date of purchase or the
net asset value of the redeemed shares, excluding any reinvested
dividends and capital gains. In addition, purchases of Class A and
Class T shares that were subject to a finder's fee bear a contingent
deferred sales charge on assets that do not remain in the fund for at
least one year. The Class A and Class T contingent deferred sales
charge is based on 0.25% of the lesser of the cost of shares at the
initial date of purchase or the net asset value of the redeemed
shares, excluding any reinvested dividends and capital gains. A
portion of the sales charges paid to FDC are paid to securities
dealers, banks and other financial institutions.
For the period, sales charge amounts paid to and retained by FDC were
as follows:
PAID TO FDC RETAINED BY FDC
CLASS A $ 416,022 $ 154,022
CLASS T 931,112 327,957
CLASS B 146,346 146,346 *
CLASS C 24,046 24,046 *
$ 1,517,526 $ 652,371
* WHEN CLASS B AND CLASS C SHARES ARE INITIALLY SOLD, FDC PAYS
COMMISSIONS FROM ITS OWN RESOURCES TO SECURITIES DEALERS,
BANKS, AND OTHER FINANCIAL INSTITUTIONS THROUGH WHICH THE SALES ARE
MADE.
TRANSFER AGENT FEES. Fidelity Investments Institutional Operations
Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend
disbursing and shareholder servicing agent for each class of the fund
(collectively referred to as the transfer agent) for the fund's Class
A, Class T, Class B, Class C and Institutional Class. FIIOC receives
account fees and asset-based fees that vary according to the account
size and type of account of the shareholders of the respective classes
of the fund. FIIOC pays for typesetting, printing and mailing of all
shareholder reports, except proxy statements. For the period, the
following amounts were paid to FIIOC:
AMOUNT % OF AVERAGE NET ASSETS
CLASS A $ 43,755 .24
CLASS T 524,766 .21
CLASS B 181,021 .23
CLASS C 48,748 .22
INSTITUTIONAL CLASS 128,231 .15
$ 926,521
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
ACCOUNTING FEES. Fidelity Service Company, Inc. maintains the fund's
accounting records. The fee is based on the level of average net
assets for the month plus out-of-pocket expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $73,735 for the
period.
5. EXPENSE REDUCTIONS.
FMR has directed certain portfolio trades to brokers who paid a
portion of the fund's expenses. For the period, the fund's expenses
were reduced by $51,435 under this arrangement.
In addition, the fund has entered into arrangements with its custodian
and each class' transfer agent whereby credits realized as a result of
uninvested cash balances were used to reduce a portion of expenses.
During the period, the fund's custodian fees were reduced by $1,265
under the custodian arrangement, and each applicable class' expenses
were reduced as follows under the transfer agent arrangements:
TRANSFER AGENT CREDITS
CLASS A $ 127
CLASS T 61
$ 188
6. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
YEARS ENDED NOVEMBER 30,
1998 1997 A
FROM NET INVESTMENT INCOME
Class A $ 57,067 $ 4,677
Class T 439,408 67,952
Class B 2,235 5,594
Class C 638 -
Institutional Class 550,950 5,918
Total $ 1,050,298 $ 84,141
FROM NET REALIZED GAIN
Class A $ 105,066 $ -
Class T 1,992,968 -
Class B 411,203 -
Class C 11,485 -
Institutional Class 1,060,273 -
Total $ 3,580,995 $ -
Total $ 4,631,293 $ 84,141
A DISTRIBUTIONS FOR CLASS A, CLASS T, CLASS B AND INSTITUTIONAL CLASS
ARE FOR THE PERIOD DECEMBER 31, 1996 (COMMENCEMENT OF SALE OF SHARES)
TO
NOVEMBER 30, 1997.
7. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SHARES DOLLARS
YEAR ENDED NOVEMBER 30, YEAR ENDED NOVEMBER 30, YEAR ENDED NOVEMBER 30, YEAR ENDED NOVEMBER 30,
1998 1997A,B 1998 1997A,B
CLASS A Shares sold 1,985,904 602,316 $ 27,925,972 $ 6,949,595
Reinvestment of distributions 11,388 371 144,692 4,174
Shares redeemed (262,753) (43,338) (3,667,714) (516,701)
Net increase (decrease) 1,734,539 559,349 $ 24,402,950 $ 6,437,068
CLASS T Shares sold 19,561,067 11,672,407 $ 272,784,641 $ 134,104,051
Reinvestment of distributions 187,426 5,937 2,329,618 65,332
Shares redeemed (3,889,493) (965,458) (53,697,199) (11,488,641)
Net increase (decrease) 15,859,000 10,712,886 $ 221,417,060 $ 122,680,742
CLASS B Shares sold 8,867,178 2,511,450 $ 124,613,889 $ 28,415,273
Reinvestment of distributions 27,640 485 336,757 5,015
Shares redeemed (654,680) (189,857) (8,961,414) (2,180,901)
Net increase (decrease) 8,240,138 2,322,078 $ 115,989,232 $ 26,239,387
CLASS C Shares sold 4,221,057 31,363 $ 59,142,729 $ 386,538
Reinvestment of distributions 802 - 9,788 -
Shares redeemed (269,958) - (3,678,798) -
Net increase (decrease) 3,951,901 31,363 $ 55,473,719 $ 386,538
INSTITUTIONAL CLASS Shares 2,227,092 6,390,332 $ 31,070,505 $ 78,506,275
sold
Reinvestment of distributions 112,570 365 1,420,639 4,097
Shares redeemed (1,838,555) (464,922) (25,443,310) (5,294,349)
Net increase (decrease) 501,107 5,925,775 $ 7,047,834 $ 73,216,023
</TABLE>
A SHARE TRANSACTIONS FOR CLASS A, CLASS T, CLASS B, AND INSTITUTIONAL
CLASS ARE FOR THE PERIOD DECEMBER 31, 1996 (COMMENCEMENT OF SALE OF
SHARES)
TO NOVEMBER 30, 1997.
B SHARE TRANSACTIONS FOR CLASS C ARE FOR THE PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO NOVEMBER 30, 1997.
8. REGISTRATION FEES.
For the period, each class paid the following amounts to register its
shares for sale:
REGISTRATION FEES
CLASS A $ 13,720
CLASS T 108,083
CLASS B 39,972
CLASS C 24,972
INSTITUTIONAL CLASS 27,606
$ 214,353
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Advisor Series I and the Shareholders of
Fidelity Advisor Growth & Income Fund:
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of
Fidelity Advisor Growth & Income Fund (a fund of Fidelity Advisor
Series I) at November 30, 1998, and the results of its operations,
the changes in its net assets and the financial highlights for the
periods indicated, in conformity with generally accepted accounting
principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the
responsibility of the Fidelity Advisor Growth & Income Fund's
management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of
these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which
included confirmation of securities at November 30, 1998 by
correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
January 13, 1999
DISTRIBUTIONS
A total of 2.25% of the dividends distributed during the fiscal year
was derived from interest on U.S. Government securities which is
generally exempt from state income tax.
A total of 31%, 31%, 35% and 32% of dividends distributed by Class A,
Class T, Class B and Class C, respectively, during the fiscal year
qualifies for the dividends-received deduction for corporate
shareholders.
The fund will notify shareholders in January 1999 of the applicable
percentages for use in preparing 1998 income tax returns.
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.)
Inc., London, England
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Richard A. Spillane Jr., Vice President
Beth F. Terrana, Vice President
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
* INDEPENDENT TRUSTEES
ADVISORY BOARD
J. Gary Burkhead
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA
CUSTODIAN
The Chase Manhattan Bank
New York, NY
FOCUS FUNDS
Fidelity Advisor Consumer
Industries Fund
Fidelity Advisor Cyclical
Industries Fund
Fidelity Advisor Financial
Services Fund
Fidelity Advisor Health Care Fund
Fidelity Advisor Natural
Resources Fund
Fidelity Advisor Technology Fund
Fidelity Advisor Utilities Growth Fund
GROWTH FUNDS
Fidelity Advisor Latin America Fund
Fidelity Advisor Japan Fund
Fidelity Advisor Europe Capital Appreciation Fund
Fidelity Advisor International Capital Appreciation Fund
Fidelity Advisor Overseas Fund
Fidelity Advisor Diversified International Fund
Fidelity Advisor Global Equity Fund
Fidelity Advisor TechnoQuant
Growth Fund
SM
Fidelity Advisor Small Cap Fund
Fidelity Advisor Strategic
Opportunities Fund
Fidelity Advisor Mid Cap Fund
Fidelity Advisor Retirement
Growth Fund
Fidelity Advisor Equity Growth Fund
Fidelity Advisor Large Cap Fund
Fidelity Advisor Dividend Growth Fund
Fidelity Advisor Growth
Opportunities Fund
GROWTH AND INCOME FUNDS
Fidelity Advisor Growth & Income Fund
Fidelity Advisor Equity Income Fund
Fidelity Advisor Asset Allocation Fund
Fidelity Advisor Balanced Fund
TAXABLE INCOME FUNDS
Fidelity Advisor Emerging Markets Income Fund
Fidelity Advisor High Yield Fund
Fidelity Advisor Strategic Income Fund
Fidelity Advisor Mortgage
Securities Fund
Fidelity Advisor Government Investment Fund
Fidelity Advisor Intermediate Bond Fund
Fidelity Advisor Short Fixed-Income Fund
MUNICIPAL FUNDS
Fidelity Advisor Municipal Income Fund
Fidelity Advisor Intermediate Municipal Income Fund
MONEY MARKET FUNDS
Prime Fund
Treasury Fund
Tax-Exempt Fund
(registered trademark)
(2_FIDELITY_LOGOS)FIDELITY ADVISOR
(registered trademark)
GROWTH & INCOME
FUND - INSTITUTIONAL CLASS
ANNUAL REPORT
NOVEMBER 30, 1998
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over
time.
FUND TALK 6 The manager's review of fund
performance, strategy and
outlook.
INVESTMENT CHANGES 9 A summary of major shifts in
the fund's investments over
the last six months.
INVESTMENTS 10 A complete list of the fund's
investments with their
market values.
FINANCIAL STATEMENTS 21 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 30 Notes to the financial
statements.
REPORT OF INDEPENDENT 38 The auditors' opinion.
ACCOUNTANTS
DISTRIBUTIONS 39
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION
OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS
IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT
INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY ADVISOR FUND, INCLUDING CHARGES
AND EXPENSES, CONTACT YOUR
INVESTMENT PROFESSIONAL FOR A FREE PROSPECTUS. READ IT CAREFULLY
BEFORE YOU INVEST OR SEND MONEY.
Standard & Poor's, S&P and S&P 500 are registered service marks of The
McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity
Distributors Corporation.
Other third party marks appearing herein are the property of their
respective owners.
All other marks appearing herein are registered or unregistered
trademarks or service marks of FMR Corp. or an affiliated company.
This report is printed on recycled paper using soy-based inks.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
The month of November proved to be a strong one for the stock and bond
markets. The Dow Jones Industrial Average reached a record high.
Merger activity, which had lulled during the summer correction, has
increased significantly. Small-cap stocks posted their third
consecutive month of positive returns, as did emerging markets. While
bond returns generally were not at the levels of their equity
counterparts, they were mostly positive nonetheless.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will
greatly reduce your vulnerability to any single decline. We know from
experience, for example, that stock prices have gone up over longer
periods of time, have significantly outperformed other types of
investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through
diversification. A stock mutual fund, for instance, is already
diversified, because it invests in many different companies. You can
increase your diversification further by investing in a number of
different stock funds, or in such other investment categories as
bonds. If you have a short investment time horizon, you might want to
consider moving some of your investment into a money market fund,
which seeks income and a stable share price by investing in
high-quality, short-term investments. Of course, it's important to
remember that there is no assurance that a money market fund will
achieve its goal of maintaining a stable net asset value of $1.00 per
share, and that these types of funds are neither insured nor
guaranteed by any agency of the U.S. government.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases. Of course, you should
consider your financial ability to continue your purchases through
periods of low price levels before undertaking such a strategy.
Remember to contact your investment professional if you need help with
your investments.
Best regards,
Edward C. Johnson 3d
FIDELITY ADVISOR GROWTH & INCOME FUND - INSTITUTIONAL CLASS
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can
look at the total percentage change in value, the average annual
percentage change or the growth of a hypothetical $10,000 investment.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR LIFE OF FUND
1998
FIDELITY ADV GROWTH & INCOME 23.69% 54.94%
- - INST CL
S&P 500 (registered trademark) 23.66% 62.13%
Growth & Income Funds Average 12.35% n/a
CUMULATIVE TOTAL RETURNS show Institutional Class performance in
percentage terms over a set period - in this case, one year or since
the fund started on December 31, 1996. For example, if you had
invested $1,000 in a fund that had a 5% return over the past year, the
value of your investment would be $1,050. You can compare
Institutional Class' return to the performance of the Standard &
Poor's 500 Index - a widely recognized, market capitalization-weighted
index of common stocks. To measure how Institutional Class'
performance stacked up against its peers, you can compare it to the
growth and income funds average, which reflects the performance of
mutual funds with similar objectives tracked by Lipper Analytical
Services, Inc. The past one year average represents a peer group of
746 mutual funds. These benchmarks include reinvested dividends and
capital gains, if any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR LIFE OF FUND
1998
FIDELITY ADV GROWTH & INCOME 23.69% 25.67%
- - INST CL
S&P 500 23.66% 28.68%
Growth & Income Funds Average 12.35% n/a
AVERAGE ANNUAL TOTAL RETURNS take Institutional Class' cumulative
return and show you what would have happened if Institutional Class
had performed at a constant rate each year.
$10,000 OVER LIFE OF FUND
FA Growth & Income -CL I S&P 500
00276 SP001
1996/12/31 10000.00 10000.00
1997/01/31 10220.00 10624.80
1997/02/28 10290.00 10708.10
1997/03/31 9818.94 10268.10
1997/04/30 10349.96 10881.11
1997/05/31 10911.04 11543.55
1997/06/30 11452.03 12060.70
1997/07/31 12395.50 13020.37
1997/08/31 11753.14 12290.97
1997/09/30 12365.39 12964.15
1997/10/31 11993.72 12531.14
1997/11/30 12526.11 13111.21
1997/12/31 12823.00 13336.33
1998/01/31 12894.47 13483.83
1998/02/28 13772.48 14456.28
1998/03/31 14487.60 15196.59
1998/04/30 14600.07 15349.47
1998/05/31 14508.05 15085.61
1998/06/30 15194.27 15698.39
1998/07/31 15265.99 15531.20
1998/08/31 13011.95 13285.70
1998/09/30 13595.65 14136.78
1998/10/31 14590.95 15286.67
1998/11/30 15493.91 16213.19
IMATRL PRASUN SHR__CHT 19981130 19981210 102535 R00000000000026
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Growth & Income Fund - Institutional
Class on December 31, 1996, when the fund started. As the chart shows,
by November 30, 1998, the value of the investment would have grown to
$15,494 - a 54.94% increase on the initial investment. For comparison,
look at how the Standard & Poor's 500 Index did over the same period.
With dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $16,213 - a 62.13% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
long-term growth and
short-term volatility. In turn, the
share price and return of a
fund that invests in stocks or
bonds will vary. That means if
you sell your shares during
a market downturn, you might
lose money. But if you can
ride out the market's ups and
downs, you may have a gain.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
When the final bell of the U.S. stock
market sounded on Monday,
November 23, 1998, the Dow
Jones Industrial Average stood at a
record high of 9374.27, serving
notice that the bleak economic
outlook from just a few short months
earlier would not keep positive
investor sentiment down. For the
12-month period ending November
30, 1998, the Dow - an index of
30 blue-chip stocks - returned
18.56%. What caused the
turnaround from the doldrums of
equity performance during the
summer and early fall? A variety of
factors: The economic problems in
Russia, Brazil and other emerging
markets began to dissipate; Asian
markets began to rebound; and,
perhaps most importantly, three
interest-rate cuts late in the period
by the Federal Reserve Board
helped stem the tide of a slowing
U.S. economy. All these factors
culminated in the Dow reaching its
record high late in November, a
peak that outpaced the previous
record set in July by nearly 40 points.
Small-cap stock performance was
still a far cry behind their large-cap
brethren. For the period, the Russell
2000 Index - a popular measure
of small-cap stock performance -
returned -6.62%, significantly
trailing the large-cap weighted
Standard & Poor's 500 Index's
return of 23.66%. Despite the late
rally in the equity market, this kind
of volatility has characterized the
entire year, and when it will level off
is impossible to predict.
An interview with Beth Terrana, Portfolio Manager of Fidelity Advisor
Growth & Income Fund
Q. HOW DID THE FUND PERFORM, BETH?
A. For the 12 months that ended November 30, 1998, the fund's
Institutional Class shares returned 23.69%. The growth funds average
returned 12.35% in that time, according to Lipper Analytical Services,
while the Standard & Poor's 500 Index returned 23.66%.
Q. WHICH MARKET SECTORS HELPED FUND PERFORMANCE DURING THE PERIOD?
A. Good stock selection across several industry groups - including
media and leisure, diversified manufacturing and retail - helped
performance. Media stock Time Warner benefited from a renewed emphasis
on balance-sheet management and an improved return on assets, which
translated into a nice increase in its stock price. Diversified
manufacturing company Tyco International and retail-store chain
Wal-Mart also contributed positively to performance during the period,
as each company experienced better-than-expected earnings growth.
Lastly, the fund's stake in General Electric also helped. GE has a
history of good dividend payments, tremendous product lines with
dominant share in most of their markets and solid earnings growth -
attributes that were particularly appealing to wary investors
concerned with global financial turmoil.
Q. WHICH MARKET SECTORS HURT THE FUND'S PERFORMANCE?
A. An underweighted position in the technology sector was the primary
detractor from fund performance relative to the S&P 500. The fund's
underweighted exposure to the utility sector also hurt, as utility
companies gained favor among risk-averse investors seeking
high-dividend yields and greater protection from foreign market
volatility.
Q. TOGETHER, RETAIL AND FINANCE STOCKS REPRESENTED ABOUT 24% OF THE
FUND'S INVESTMENTS AT THE END OF THE PERIOD. HOW DID THESE TWO SECTORS
FARE?
A. Although retail stocks were solid performers over the past 12
months, finance stocks lagged the S&P 500 during the year, with bank
stocks particularly hard hit over the past few months. The weakness
among finance companies was a result of a number of interrelated
events. Many global banks suffered from trading losses and credit
losses in emerging markets. In addition, lending to hedge funds became
a loss-making proposition and equity market-related revenue sources
dried up. The subsequent tightening of credit markets further
depressed U.S. stock and bond markets and harmed many finance stocks.
The fund's positions in Citicorp - which merged with Travelers during
the period to form Citigroup - and Merrill Lynch performed weakly due
to these negative trends. At the end of the period, the fund no longer
owned a position in Merrill Lynch. Lastly, a rise in consumer spending
growth over the past 12 months helped propel the retail sector to
strong gains, and the fund benefited by overweighting the retail
sector during the year.
Q. ARE THERE ANY OTHER GROUPS OF STOCKS THAT RECENTLY CAUGHT YOUR EYE?
A. I've recently added to several of the fund's health care holdings,
as business profiles for both the pharmaceutical and medical device
industries continued to be healthy. Unit growth has been strong -
driven mainly by favorable demographics and new product development -
and the pricing environment within these areas has been relatively
calm. I've played health care in a couple of ways. First, the fund
held positions in some of the larger drug stocks, including Merck,
American Home Products and Schering-Plough. The fund also had stakes
in two of the largest drug wholesalers - McKesson and Cardinal Health
- - each of which benefited from industry consolidation, a focus on
bringing more value to their customers and the underlying growth in
pharmaceutical usage. Retail drug stores such as CVS also appealed to
me. CVS has also benefited from growing pharmaceutical usage, as well
as from excellent merchandising in its stores and strong management.
Q. WHAT ARE YOUR THOUGHTS GOING FORWARD?
A. The market should continue to focus its attention on the state of
the U.S. economy and whether or not we will enter a recession along
with a large part of the world. Actions by central bankers and
government policy around the world will be scrutinized. Much attention
also will be focused on U.S. consumers who, to some extent, have the
weight of the world resting on their shoulders. While this may sound a
bit drastic, it's not very far from the truth. High employment levels,
high personal income and low interest rates have made the U.S.
consumer one of the last strengths in the global economy, so U.S.
consumer trends could heavily impact the direction of many economies.
As corporate profit growth slows from very high levels, it becomes
even more important to know what you own and understand the risk and
potential reward of any particular stock.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
BETH TERRANA ON HOW
SHE PICKS STOCKS:
"Given the high levels of market
volatility over the past year, I believe
it's increasingly important for you
to understand how I manage Fidelity
Advisor Growth & Income. I've been
picking stocks for a long time, and
while market trends change
constantly, my investment approach
has stayed about the same. I have
an eclectic, company-specific
approach to stock picking that
leads to investments in both growth
and value stocks - with the mix
being a function of market
conditions and overall valuation
levels. When choosing stocks I
emphasize fundamental, bottom-up
analysis and frequent company
contact. Over my years as a
portfolio manager at Fidelity, I have
been most successful at identifying
companies in the midst of change
and assessing whether their
evolving prospects are accurately
reflected in their stock prices. My
preferred investments include
turnarounds/restructurings and
undervalued growth stocks. The
former category includes companies
that are undergoing strategic
restructuring that enhances their
growth prospects. The latter
category includes companies whose
growth prospects are misperceived
by the market. In other words, I
focus on `growth at a price' as
opposed to growth at any price.
Similarly, I won't purchase value
stocks solely because of their value
merits - earnings growth must be
expected. I also keep Advisor Growth
& Income diversified across
industry sectors. I believe the
fund's well-rounded profile, with
investments in both growth and
value stocks, makes it an
excellent choice as a core
holding."
FUND FACTS
GOAL: seeks a high total return
through a combination of
current income and capital
appreciation
START DATE: December 31,
1996
SIZE: as of November 30,
1998, more than $749 million
MANAGER: Beth Terrana, since
inception; joined Fidelity in
1983
(checkmark)
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF NOVEMBER
30, 1998
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE STOCKS 6 MONTHS AGO
Time Warner, Inc. 3.6 3.0
General Electric Co. 3.2 3.0
Microsoft Corp. 2.2 1.5
Philip Morris Companies, Inc. 2.2 0.9
Wal-Mart Stores, Inc. 2.0 2.6
Merck & Co., Inc. 2.0 1.5
Fannie Mae 1.9 1.0
MCI WorldCom, Inc. 1.9 1.3
Tyco International Ltd. 1.8 2.6
Citigroup, Inc. 1.7 3.2
TOP FIVE MARKET SECTORS AS OF
NOVEMBER 30, 1998
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE MARKET SECTORS 6
MONTHS AGO
FINANCE 14.6 17.5
TECHNOLOGY 12.2 9.7
HEALTH 10.3 11.5
RETAIL & WHOLESALE 9.8 11.6
MEDIA & LEISURE 8.7 8.6
</TABLE>
ASSET ALLOCATION (% OF FUND'S
INVESTMENTS)
AS OF NOVEMBER 30, 1998 * AS OF MAY 31, 1998 **
Row: 1, Col: 1, Value: 9.4
Row: 1, Col: 2, Value: 1.7
Row: 1, Col: 3, Value: 1.3
Row: 1, Col: 4, Value: 87.59999999999999
Stocks 90.8%
Bonds 0.0%
Convertible
securities 1.5%
Short-term
investments 7.7%
FOREIGN
INVESTMENTS 5.3%
Stocks 87.6%
Bonds 1.3%
Convertible
securities 1.7%
Short-term
investments 9.4%
FOREIGN
INVESTMENTS 3.0%
Row: 1, Col: 1, Value: 7.7
Row: 1, Col: 2, Value: 1.5
Row: 1, Col: 3, Value: 0.0
Row: 1, Col: 4, Value: 90.8
*
**
INVESTMENTS NOVEMBER 30, 1998
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 87.6%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 1.4%
AEROSPACE & DEFENSE - 0.8%
Gulfstream Aerospace Corp. (a) 21,700 $ 1,114,838
Textron, Inc. 65,400 5,080,762
6,195,600
DEFENSE ELECTRONICS - 0.4%
Raytheon Co.:
Class A 12,600 689,063
Class B 38,400 2,126,400
2,815,463
SHIP BUILDING & REPAIR - 0.2%
General Dynamics Corp. 22,300 1,294,794
TOTAL AEROSPACE & DEFENSE 10,305,857
BASIC INDUSTRIES - 0.6%
CHEMICALS & PLASTICS - 0.4%
du Pont (E.I.) de Nemours & 7,600 446,500
Co.
Monsanto Co. 42,800 1,939,375
Praxair, Inc. 24,200 924,138
3,310,013
METALS & MINING - 0.2%
Aluminum Co. of America 21,800 1,615,925
TOTAL BASIC INDUSTRIES 4,925,938
CONSTRUCTION & REAL ESTATE -
1.7%
BUILDING MATERIALS - 1.3%
Masco Corp. 306,100 8,838,638
Sherwin-Williams Co. 24,700 700,863
9,539,501
REAL ESTATE INVESTMENT TRUSTS
- - 0.4%
Duke Realty Investments, Inc. 47,200 1,070,850
Equity Residential Properties 30,700 1,298,994
Trust (SBI)
Public Storage, Inc. 39,800 1,057,188
3,427,032
TOTAL CONSTRUCTION & REAL 12,966,533
ESTATE
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
DURABLES - 2.0%
AUTOS, TIRES, & ACCESSORIES -
0.8%
Danaher Corp. 33,900 $ 1,546,688
Federal-Mogul Corp. 5,400 306,450
Ford Motor Co. 62,900 3,475,225
General Motors Corp. 5,500 385,000
Pep Boys-Manny, Moe & Jack 15,000 211,875
5,925,238
CONSUMER DURABLES - 0.1%
Minnesota Mining & 11,200 899,500
Manufacturing Co.
CONSUMER ELECTRONICS - 0.9%
Black & Decker Corp. 70,300 3,809,381
Newell Co. 58,700 2,597,475
6,406,856
HOME FURNISHINGS - 0.1%
Leggett & Platt, Inc. 31,600 716,925
TEXTILES & APPAREL - 0.1%
VF Corp. 21,900 1,074,469
TOTAL DURABLES 15,022,988
ENERGY - 3.7%
ENERGY SERVICES - 0.6%
Halliburton Co. 77,900 2,288,313
Schlumberger Ltd. 49,100 2,194,156
4,482,469
OIL & GAS - 3.1%
Atlantic Richfield Co. 700 46,550
British Petroleum Co. PLC ADR 59,599 5,490,558
Chevron Corp. 27,600 2,308,050
Exxon Corp. 47,100 3,535,444
Mobil Corp. 24,400 2,102,975
Royal Dutch Petroleum Co. (NY 65,600 3,083,200
Registry Gilder 1.25)
Texaco, Inc. 58,900 3,390,431
Total SA sponsored ADR 28,100 1,717,613
USX-Marathon Group 67,100 1,903,963
23,578,784
TOTAL ENERGY 28,061,253
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
FINANCE - 14.4%
BANKS - 4.2%
Bank of New York Co., Inc. 225,300 $ 7,716,525
Bank One Corp. 27,900 1,431,619
BankBoston Corp. 82,400 3,429,900
Chase Manhattan Corp. 183,500 11,640,781
Comerica, Inc. 12,750 822,375
National City Corp. 8,400 564,900
U.S. Bancorp 168,600 6,206,588
31,812,688
CREDIT & OTHER FINANCE - 4.0%
American Express Co. 117,300 11,737,331
Associates First Capital 68,500 5,334,438
Corp.
Citigroup, Inc. 259,950 13,046,241
30,118,010
FEDERAL SPONSORED CREDIT - 3.5%
Fannie Mae 203,000 14,768,250
Freddie Mac 196,300 11,876,150
26,644,400
INSURANCE - 2.4%
AFLAC, Inc. 87,600 3,230,250
Allstate Corp. 38,000 1,548,500
American International Group, 93,150 8,756,100
Inc.
Hartford Financial Services 24,300 1,341,056
Group, Inc.
MBIA, Inc. 14,400 932,400
MGIC Investment Corp. 6,400 281,200
Travelers Property Casualty 12,800 440,800
Corp. Class A
UNUM Corp. 24,700 1,330,713
17,861,019
SAVINGS & LOANS - 0.1%
Charter One Financial, Inc. 21,868 649,206
SECURITIES INDUSTRY - 0.2%
Morgan Stanley, Dean Witter & 23,100 1,611,225
Co.
TOTAL FINANCE 108,696,548
HEALTH - 9.9%
DRUGS & PHARMACEUTICALS - 6.3%
Allergan, Inc. 6,700 407,863
American Home Products Corp. 97,100 5,170,575
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
HEALTH - CONTINUED
DRUGS & PHARMACEUTICALS -
CONTINUED
Amgen, Inc. (a) 38,600 $ 2,904,650
Bristol-Myers Squibb Co. 70,400 8,628,400
Cytyc Corp. (a) 19,300 382,381
Elan Corp. PLC ADR (a) 5,800 395,125
Lilly (Eli) & Co. 71,500 6,412,656
Merck & Co., Inc. 96,600 14,960,925
Schering-Plough Corp. 78,900 8,392,988
47,655,563
MEDICAL EQUIPMENT & SUPPLIES
- - 3.6%
Abbott Laboratories 21,300 1,022,400
Allegiance Corp. 17,600 709,500
Baxter International, Inc. 13,200 839,025
Becton, Dickinson & Co. 65,500 2,783,750
Boston Scientific Corp. (a) 6,400 316,800
Cardinal Health, Inc. 103,350 7,092,394
Guidant Corp. 34,600 2,969,113
Johnson & Johnson 66,300 5,386,875
McKesson Corp. 27,200 1,936,300
Medtronic, Inc. 61,200 4,142,475
Stryker Corp. 9,000 380,250
27,578,882
TOTAL HEALTH 75,234,445
INDUSTRIAL MACHINERY &
EQUIPMENT - 6.6%
ELECTRICAL EQUIPMENT - 4.1%
Emerson Electric Co. 56,100 3,646,500
General Electric Co. 270,300 24,462,150
Honeywell, Inc. 35,300 2,821,794
30,930,444
INDUSTRIAL MACHINERY &
EQUIPMENT - 2.5%
Dover Corp. 47,600 1,695,750
Illinois Tool Works, Inc. 5,400 343,238
Ingersoll-Rand Co. 38,150 1,785,897
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
INDUSTRIAL MACHINERY &
EQUIPMENT - CONTINUED
INDUSTRIAL MACHINERY &
EQUIPMENT - CONTINUED
Stanley Works 49,300 $ 1,506,731
Tyco International Ltd. 207,708 13,669,783
19,001,399
TOTAL INDUSTRIAL MACHINERY & 49,931,843
EQUIPMENT
MEDIA & LEISURE - 8.7%
BROADCASTING - 5.6%
CBS Corp. 134,800 4,018,725
Comcast Corp. Class A 78,200 3,792,700
(special)
MediaOne Group, Inc. 59,800 2,421,900
Tele-Communications, Inc. 119,900 5,065,775
(TCI Group) Series A (a)
Time Warner, Inc. 258,500 27,336,359
42,635,459
ENTERTAINMENT - 1.0%
Carnival Corp. 24,500 845,250
Viacom, Inc.:
Class A (a) 500 32,844
Class B (non-vtg.) (a) 94,900 6,316,781
7,194,875
PUBLISHING - 1.6%
Harcourt General, Inc. 30,900 1,599,075
McGraw-Hill Companies, Inc. 90,300 8,081,850
Meredith Corp. 51,500 1,998,844
11,679,769
RESTAURANTS - 0.5%
McDonald's Corp. 56,700 3,972,544
TOTAL MEDIA & LEISURE 65,482,647
NONDURABLES - 7.3%
BEVERAGES - 0.4%
Coca-Cola Co. (The) 41,100 2,879,569
FOODS - 1.2%
Campbell Soup Co. 33,700 1,925,113
Dean Foods Co. 61,300 2,789,150
Heinz (H.J.) Co. 54,700 3,189,694
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
NONDURABLES - CONTINUED
FOODS - CONTINUED
Nabisco Holdings Corp. Class A 11,100 $ 442,613
Sara Lee Corp. 17,300 1,009,888
9,356,458
HOUSEHOLD PRODUCTS - 3.5%
Avon Products, Inc. 212,600 8,636,875
Clorox Co. 24,800 2,754,350
Colgate-Palmolive Co. 21,600 1,849,500
First Brands Corp. 15,100 565,306
Gillette Co. 1,900 87,281
Procter & Gamble Co. 53,200 4,661,650
Rubbermaid, Inc. 38,400 1,269,600
Unilever NV (NY shares) 56,800 4,391,350
Unilever PLC 210,100 2,206,064
26,421,976
TOBACCO - 2.2%
Philip Morris Companies, Inc. 292,600 16,367,313
TOTAL NONDURABLES 55,025,316
RETAIL & WHOLESALE - 9.7%
APPAREL STORES - 1.4%
Abercrombie & Fitch Co. Class 26,300 1,472,800
A (a)
Payless ShoeSource, Inc. (a) 63,400 3,090,750
TJX Companies, Inc. 245,200 6,283,250
10,846,800
DRUG STORES - 1.6%
CVS Corp. 250,750 12,380,781
GENERAL MERCHANDISE STORES -
4.7%
Costco Companies, Inc. (a) 84,000 5,271,000
Dayton Hudson Corp. 144,500 6,502,500
Federated Department Stores, 28,965 1,207,478
Inc. (a)
Nordstrom, Inc. 91,300 3,400,925
Saks Holdings, Inc. (a) 143,575 3,948,313
Wal-Mart Stores, Inc. 200,400 15,092,625
35,422,841
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
RETAIL & WHOLESALE - CONTINUED
GROCERY STORES - 0.7%
Kroger Co. (a) 36,100 $ 1,915,556
Safeway, Inc. (a) 55,600 2,936,375
4,851,931
RETAIL & WHOLESALE,
MISCELLANEOUS - 1.3%
Amazon.com, Inc. (a) 9,400 1,804,800
Home Depot, Inc. 160,400 7,979,900
9,784,700
TOTAL RETAIL & WHOLESALE 73,287,053
SERVICES - 2.3%
ADVERTISING - 1.6%
Interpublic Group of 44,200 3,038,750
Companies, Inc.
Omnicom Group, Inc. 168,200 8,988,188
12,026,938
PRINTING - 0.2%
Donnelley (R.R.) & Sons Co. 46,700 1,981,831
SERVICES - 0.5%
Ecolab, Inc. 82,200 2,543,063
Modis Professional Services, 17,600 210,100
Inc. (a)
ServiceMaster Co. 35,500 763,250
3,516,413
TOTAL SERVICES 17,525,182
TECHNOLOGY - 11.7%
COMMUNICATIONS EQUIPMENT - 2.0%
Ascend Communications, Inc. 62,100 3,489,244
(a)
Cisco Systems, Inc. (a) 69,250 5,219,719
Lucent Technologies, Inc. 45,200 3,890,025
OY Nokia AB sponsored ADR 20,800 2,038,400
14,637,388
COMPUTER SERVICES & SOFTWARE
- - 3.5%
America Online, Inc. 40,400 3,537,525
IMS Health, Inc. 44,100 2,927,138
Intuit, Inc. (a) 22,700 1,313,763
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TECHNOLOGY - CONTINUED
COMPUTER SERVICES & SOFTWARE
- - CONTINUED
Microsoft Corp. (a) 136,000 $ 16,592,000
Oracle Corp. (a) 54,600 1,870,050
26,240,476
COMPUTERS & OFFICE EQUIPMENT
- - 4.4%
Apple Computer, Inc. (a) 65,600 2,095,100
Compaq Computer Corp. 80,100 2,603,250
EMC Corp. (a) 38,200 2,769,500
International Business 49,900 8,233,500
Machines Corp.
Pitney Bowes, Inc. 66,600 3,729,600
SCI Systems, Inc. (a) 11,300 549,463
Unisys Corp. (a) 46,900 1,336,650
Xerox Corp. 113,500 12,201,250
33,518,313
ELECTRONIC INSTRUMENTS - 0.3%
Applied Materials, Inc. (a) 59,700 2,313,375
ELECTRONICS - 1.5%
Intel Corp. 51,900 5,585,738
Motorola, Inc. 66,000 4,092,000
Texas Instruments, Inc. 23,800 1,817,725
11,495,463
TOTAL TECHNOLOGY 88,205,015
TRANSPORTATION - 0.3%
RAILROADS - 0.3%
Burlington Northern Santa Fe 17,400 591,600
Corp.
Union Pacific Corp. 32,700 1,590,038
2,181,638
UTILITIES - 7.3%
ELECTRIC UTILITY - 2.6%
DQE, Inc. 2,100 86,231
Duke Energy Corp. 70,700 4,423,169
Entergy Corp. 55,300 1,620,981
FirstEnergy Corp. 29,800 921,938
FPL Group, Inc. 50,400 3,087,000
Illinova Corp. 40,000 1,082,500
IPALCO Enterprises, Inc. 39,100 1,959,888
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
UTILITIES - CONTINUED
ELECTRIC UTILITY - CONTINUED
PECO Energy Co. 46,300 $ 1,857,788
PG&E Corp. 69,500 2,150,156
Unicom Corp. 62,300 2,347,931
19,537,582
GAS - 0.0%
Sempra Energy 1,700 42,606
TELEPHONE SERVICES - 4.7%
ALLTEL Corp. 42,600 2,257,800
AT&T Corp. 110,400 6,879,300
GTE Corp. 13,800 855,600
MCI WorldCom, Inc. (a) 237,726 14,025,834
Qwest Communications 40,600 1,624,000
International, Inc. (a)
SBC Communications, Inc. 121,000 5,800,438
Sprint Corp.:
(FON Group) 55,400 4,030,350
(PCS Group) (a) 100 1,600
35,474,922
TOTAL UTILITIES 55,055,110
TOTAL COMMON STOCKS 661,907,366
(Cost $547,099,555)
CONVERTIBLE PREFERRED STOCKS
- - 0.5%
FINANCE - 0.2%
CREDIT & OTHER FINANCE - 0.2%
Federal Mogul Financing Trust 27,200 1,740,800
$3.50 (d)
HEALTH - 0.3%
MEDICAL EQUIPMENT & SUPPLIES
- - 0.3%
McKesson Financing Trust:
$2.50 (d) 3,600 353,700
$2.50 14,400 1,414,800
1,768,500
TOTAL CONVERTIBLE PREFERRED 3,509,300
STOCKS
(Cost $3,314,409)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CONVERTIBLE BONDS - 1.2%
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT VALUE (NOTE 1)
HEALTH - 0.1%
MEDICAL FACILITIES MANAGEMENT
- - 0.1%
Total Renal Care Holdings, B1 $ 980,000 $ 1,011,850
Inc. 7% 5/15/09 (d)
INDUSTRIAL MACHINERY &
EQUIPMENT - 0.5%
ELECTRICAL EQUIPMENT - 0.3%
ANTEC Corp. 4.5% 5/15/03 (d) B2 2,013,000 1,982,805
POLLUTION CONTROL - 0.2%
Waste Management, Inc. 4% Ba1 1,393,000 1,622,845
2/1/02
TOTAL INDUSTRIAL MACHINERY & 3,605,650
EQUIPMENT
RETAIL & WHOLESALE - 0.1%
RETAIL & WHOLESALE,
MISCELLANEOUS - 0.1%
Home Depot, Inc. 3.25% 10/1/01 A1 451,000 983,180
TECHNOLOGY - 0.5%
COMPUTERS & OFFICE EQUIPMENT
- - 0.5%
EMC Corp. 3.25% 3/15/02 Ba2 542,000 1,756,080
Unisys Corp. 8.25% 3/15/06 B 425,000 1,761,625
3,517,705
ELECTRONIC INSTRUMENTS - 0.0%
Thermo Electron Corp. 4.25% Ba2 406,000 359,818
1/1/03 (d)
TOTAL TECHNOLOGY 3,877,523
TOTAL CONVERTIBLE BONDS 9,478,203
(Cost $7,987,092)
U.S. TREASURY OBLIGATIONS -
1.3%
U.S. Treasury Bond 6.75% Aaa 5,100,000 6,146,316
8/15/26
U.S. Treasury Notes 7% 7/15/06 Aaa 3,300,000 3,754,773
TOTAL U.S. TREASURY OBLIGATIONS 9,901,089
(Cost $10,088,000)
</TABLE>
CASH EQUIVALENTS - 9.4%
SHARES VALUE (NOTE 1)
Taxable Central Cash Fund (c) 70,858,407 $ 70,858,407
(Cost $70,858,407)
TOTAL INVESTMENT IN $ 755,654,365
SECURITIES - 100%
(Cost $639,347,463)
LEGEND
(a) Non-income producing
(b) Standard & Poor's credit ratings are used in the absence of a
rating by Moody's Investors Service, Inc.
(c) At period end, the seven-day yield on the Taxable Central Cash
Fund was 4.81%. The yield refers to the income earned by investing in
the fund over the seven-day period, expressed as an annual percentage.
(d) Security exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in
transactions exempt from registration, normally to qualified
institutional buyers. At the period end, the value of these securities
amounted to $5,448,973 or 0.7% of net assets.
INCOME TAX INFORMATION
At November 30, 1998, the aggregate cost of investment securities for
income tax purposes was $643,604,137. Net unrealized appreciation
aggregated $112,050,228, of which $121,933,283 related to appreciated
investment securities and $9,883,055 related to depreciated investment
securities.
At November 30, 1998, the fund had a capital loss carryforward of
approximately $13,634,000 all of which will expire on November 30,
2006.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1998
ASSETS
Investment in securities, at $ 755,654,365
value (cost $639,347,463) -
See accompanying schedule
Receivable for investments 333,515
sold
Receivable for fund shares 4,677,317
sold
Dividends receivable 723,198
Interest receivable 496,236
Other receivables 220
TOTAL ASSETS 761,884,851
LIABILITIES
Payable for investments $ 10,462,150
purchased
Payable for fund shares 697,734
redeemed
Accrued management fee 289,081
Distribution fees payable 333,088
Other payables and accrued 282,779
expenses
TOTAL LIABILITIES 12,064,832
NET ASSETS $ 749,820,019
Net Assets consist of:
Paid in capital $ 653,461,921
Undistributed net investment 228,264
income
Accumulated undistributed net (20,177,646)
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 116,307,480
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS $ 749,820,019
STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
NOVEMBER 30, 1998
CALCULATION OF MAXIMUM $15.09
OFFERING PRICE CLASS A: NET
ASSET VALUE and redemption
price per share
($34,614,017 (divided by)
2,293,888 shares)
Maximum offering price per $16.01
share (100/94.25 of $15.09)
CLASS T: NET ASSET VALUE and $15.07
redemption price per share
($400,322,399 (divided by)
26,571,886 shares)
Maximum offering price per $15.62
share (100/96.50 of $15.07)
CLASS B: NET ASSET VALUE and $14.98
offering price per share
($158,179,570 (divided by)
10,562,216 shares) A
CLASS C: NET ASSET VALUE and $14.98
offering price per share
($59,652,077 (divided by)
3,983,264 shares) A
INSTITUTIONAL CLASS: NET $15.10
ASSET VALUE, offering price
and redemption price per
share ($97,051,956 (divided
by) 6,426,882 shares)
A REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1998
INVESTMENT INCOME $ 5,185,506
Dividends
Interest 1,997,215
TOTAL INCOME 7,182,721
EXPENSES
Management fee $ 2,243,407
Transfer agent fees 926,521
Distribution fees 2,319,029
Accounting fees and expenses 264,289
Non-interested trustees' 1,510
compensation
Custodian fees and expenses 26,820
Registration fees 214,353
Audit 28,053
Legal 3,187
Miscellaneous 6,653
Total expenses before 6,033,822
reductions
Expense reductions (52,888) 5,980,934
NET INVESTMENT INCOME 1,201,787
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities (20,103,025)
Foreign currency transactions 2,438 (20,100,587)
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 105,447,211
Assets and liabilities in 603 105,447,814
foreign currencies
NET GAIN (LOSS) 85,347,227
NET INCREASE (DECREASE) IN $ 86,549,014
NET ASSETS RESULTING FROM
OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED NOVEMBER 30, 1998 DECEMBER 31, 1996
(COMMENCEMENT OF OPERATIONS)
TO NOVEMBER 30,
1997
INCREASE (DECREASE) IN NET
ASSETS
Operations Net investment $ 1,201,787 $ 163,096
income
Net realized gain (loss) (20,100,587) 3,673,124
Change in net unrealized 105,447,814 10,859,666
appreciation (depreciation)
NET INCREASE (DECREASE) IN 86,549,014 14,695,886
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (1,050,298) (84,141)
From net investment income
From net realized gain (3,580,995) -
TOTAL DISTRIBUTIONS (4,631,293) (84,141)
Share transactions - net 424,330,795 228,959,758
increase (decrease)
TOTAL INCREASE (DECREASE) 506,248,516 243,571,503
IN NET ASSETS
NET ASSETS
Beginning of period 243,571,503 -
End of period (including $ 749,820,019 $ 243,571,503
undistributed net investment
income of $228,264 and
$78,935, respectively)
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
YEARS ENDED NOVEMBER 30,
1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 12.47 $ 10.00
period
Income from Investment
Operations
Net investment income D .06 .04
Net realized and unrealized 2.79 2.46
gain (loss)
Total from investment 2.85 2.50
operations
Less Distributions
From net investment income (.05) (.03)
From net realized gain (.18) -
Total distributions (.23) (.03)
Net asset value, end of period $ 15.09 $ 12.47
TOTAL RETURN B, C 23.24% 25.04%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 34,614 $ 6,977
(000 omitted)
Ratio of expenses to average 1.12% 1.50% A, F
net assets
Ratio of expenses to average 1.11% G 1.50% A
net assets after expense
reductions
Ratio of net investment .46% .34% A
income to average net assets
Portfolio turnover 54% 82% A
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD DECEMBER 31, 1996 (COMMENCEMENT OF SALE OF CLASS A
SHARES) TO NOVEMBER 30, 1997.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - CLASS T
YEARS ENDED NOVEMBER 30,
1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 12.46 $ 10.00
period
Income from Investment
Operations
Net investment income D .04 .03
Net realized and unrealized 2.78 2.45
gain (loss)
Total from investment 2.82 2.48
operations
Less Distributions
From net investment income (.03) (.02)
From net realized gain (.18) -
Total distributions (.21) (.02)
Net asset value, end of period $ 15.07 $ 12.46
TOTAL RETURN B, C 23.00% 24.83%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 400,322 $ 133,468
(000 omitted)
Ratio of expenses to average 1.31% 1.59% A
net assets
Ratio of expenses to average 1.30% F 1.59% A
net assets after expense
reductions
Ratio of net investment .27% .24% A
income to average net assets
Portfolio turnover 54% 82% A
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD DECEMBER 31, 1996 (COMMENCEMENT OF SALE OF CLASS T
SHARES) TO NOVEMBER 30, 1997.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - CLASS B
YEARS ENDED NOVEMBER 30,
1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 12.41 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) (.03) (.04)
D
Net realized and unrealized 2.77 2.46
gain (loss)
Total from investment 2.74 2.42
operations
Less Distributions
From net investment income - (.01)
From net realized gain (.17) -
Total distributions (.17) (.01)
Net asset value, end of period $ 14.98 $ 12.41
TOTAL RETURN B, C 22.39% 24.22%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 158,180 $ 28,825
(000 omitted)
Ratio of expenses to average 1.83% 2.25% A, F
net assets
Ratio of expenses to average 1.82% G 2.25% A
net assets after expense
reductions
Ratio of net investment (.25)% (.42)% A
income (loss) to average net
assets
Portfolio turnover 54% 82% A
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE
AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD DECEMBER 31, 1996 (COMMENCEMENT OF SALE OF CLASS B
SHARES) TO NOVEMBER 30, 1997.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - CLASS C
YEARS ENDED NOVEMBER 30,
1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 12.45 $ 12.22
period
Income from Investment
Operations
Net investment income (loss) (.04) -
D
Net realized and unrealized 2.76 .23
gain (loss)
Total from investment 2.72 .23
operations
Less Distributions
From net investment income (.01) -
From net realized gain (.18) -
Total distributions (.19) -
Net asset value, end of period $ 14.98 $ 12.45
TOTAL RETURN B, C 22.20% 1.88%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 59,652 $ 391
(000 omitted)
Ratio of expenses to average 1.87% 2.24% A, F
net assets
Ratio of expenses to average 1.85% G 2.24% A
net assets after expense
reductions
Ratio of net investment (.27)% .19% A
income (loss) to average net
assets
Portfolio turnover 54% 82% A
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE
AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD NOVEMBER 3, 1997 (COMMENCEMENT OF SALE OF CLASS C
SHARES) TO NOVEMBER 30, 1997.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
YEARS ENDED NOVEMBER 30,
1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 12.47 $ 10.00
period
Income from Investment
Operations
Net investment income D .11 .07
Net realized and unrealized 2.79 2.45
gain (loss)
Total from investment 2.90 2.52
operations
Less Distributions
From net investment income (.09) (.05)
From net realized gain (.18) -
Total distributions (.27) (.05)
Net asset value, end of period $ 15.10 $ 12.47
TOTAL RETURN B, C 23.69% 25.26%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 97,052 $ 73,911
(000 omitted)
Ratio of expenses to average .76% 1.19% A
net assets
Ratio of expenses to average .75% F 1.19% A
net assets after expense
reductions
Ratio of net investment .82% .64% A
income to average net assets
Portfolio turnover 54% 82% A
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD DECEMBER 31, 1996 (COMMENCEMENT OF SALE OF
INSTITUTIONAL CLASS SHARES) TO NOVEMBER 30, 1997.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1998
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Growth & Income Fund (the fund) is a fund of Fidelity
Advisor Series I (the trust) and is authorized to issue an unlimited
number of shares. The trust is registered under the Investment Company
Act of 1940, as amended (the 1940 Act), as an open-end management
investment company organized as a Massachusetts business trust.
The fund offers Class A, Class T, Class B, Class C, and Institutional
Class shares, each of which has equal rights as to assets and voting
privileges. Each class has exclusive voting rights with respect to
matters that affect that class. Class B shares will automatically
convert to Class A shares after a holding period of seven years from
the initial date of purchase. Investment income, realized and
unrealized capital gains and losses, the common expenses of the fund,
and certain fund-level expense reductions, if any, are allocated on a
pro rata basis to each class based on the relative net assets of each
class to the total net assets of the fund. Each class of shares
differs in its respective distribution, transfer agent, and certain
other class-specific fees, expenses, and expense reductions.
The financial statements have been prepared in conformity with
generally accepted accounting principles which require management to
make certain estimates and assumptions at the date of the financial
statements. The following summarizes the significant accounting
policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Securities (including restricted
securities) for which exchange quotations are not readily available
(and in certain cases debt securities which trade on an exchange) are
valued primarily using dealer-supplied valuations or at their fair
value as determined in good faith under consistently applied
procedures under the general supervision of the Board of Trustees.
Short-term securities with remaining maturities of sixty days or less
for which quotations are not readily available are valued at amortized
cost or original cost plus accrued interest, both of which approximate
current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases
and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
and settlement date on purchases and sales of securities. The effects
of changes in foreign currency exchange rates on investments in
securities are included with the net realized and unrealized gain or
loss on investment securities.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent that it distributes substantially all of
its taxable income for its fiscal year. The schedule of investments
includes information regarding income taxes under the caption "Income
Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend
date, except certain dividends from foreign securities where the
ex-dividend date may have passed, are recorded as soon as the fund is
informed of the ex-dividend date. Non-cash dividends included in
dividend income, if any, are recorded at the fair market value of the
securities received. Interest income is accrued as earned. Investment
income is recorded net of foreign taxes withheld where recovery of
such taxes is uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date. Income dividends and capital gain distributions are
declared separately for each class.
Income and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. These differences, which may result in
distribution reclassifications, are primarily due to differing
treatments for foreign currency transactions, non-taxable dividends,
capital loss carryforwards and losses deferred due to wash sales.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Undistributed net investment income and accumulated undistributed net
realized gain (loss) on investments and foreign currency transactions
may include temporary book and tax basis differences which will
reverse in a subsequent period. Any taxable income or gain remaining
at fiscal year end is distributed in the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the contracts'
terms. The U.S. dollar value of foreign currency contracts is
determined using contractual currency exchange rates established at
the time of each trade.
2. OPERATING POLICIES - CONTINUED
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with
other affiliated entities of Fidelity Management & Research Company
(FMR), may transfer uninvested cash balances into one or more joint
trading accounts. These balances are invested in one or more
repurchase agreements for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are
marked-to-market daily and maintained at a value at least equal to the
principal amount of the repurchase agreement (including accrued
interest). FMR, the fund's investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
TAXABLE CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by
the SEC, the fund may invest in the Taxable Central Cash Fund (the
Cash Fund) managed by Fidelity Investments Money Management, Inc., an
affiliate of FMR. The Cash Fund is an open-end money market fund
available only to investment companies and other accounts managed by
FMR and its affiliates. The Cash Fund seeks preservation of capital,
liquidity, and current income by investing in U.S. Treasury securities
and repurchase agreements for these securities. Income distributions
from the Cash Fund are declared daily and paid monthly from net
interest income. Income distributions earned by the fund are recorded
as interest income in the accompanying financial statements.
RESTRICTED SECURITIES. The fund is permitted to invest in securities
that are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from
registration or to the public if the securities are registered.
Disposal of these securities may involve time-consuming negotiations
and expense, and prompt sale at an acceptable price may be difficult.
At the end of the period, the fund had no investments in restricted
securities (excluding 144A issues).
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $603,507,836 and $231,466,590, respectively, of which U.S.
government and government agency obligations aggregated $10,088,000
and $0, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus a
fixed individual fund fee rate applied to the average net assets of
the fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds advised by FMR. The rates ranged from .2500% to .5200% for the
period. The annual individual fund
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
fee rate is .20%. In the event that these rates were lower than the
contractual rates in effect during the period, FMR voluntarily
implemented the above rates, as they resulted in the same or a lower
management fee. For the period, the management fee was equivalent to
annual rate of .49% of average net assets.
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the
1940 Act, the Trustees have adopted separate distribution plans with
respect to each class of shares (collectively referred to as "the
Plans"). Under certain of the Plans, the class pays Fidelity
Distributors Corporation (FDC), an affiliate of FMR, a distribution
and service fee. A portion of this fee may be reallowed to securities
dealers, banks and other financial institutions for the distribution
of each class of shares and providing shareholder support services.
For the period, this fee was based on the following annual rates of
the average net assets of each applicable class:
CLASS A .25%
CLASS T .50%
CLASS B 1.00%*
CLASS C 1.00%*
* .75% REPRESENTS A DISTRIBUTION FEE AND .25% REPRESENTS A SHAREHOLDER
SERVICE FEE.
For the period, each class paid FDC the following amounts, a portion
of which was retained by FDC:
PAID TO FDC RETAINED BY FDC
CLASS A $ 44,707 $ 448
CLASS T 1,271,397 23,998
CLASS B 785,039 588,873
CLASS C 217,886 217,431
$ 2,319,029 $ 830,750
Under the Plans, FMR may use its resources to pay administrative and
promotional expenses related to the sale of each class' shares. The
Plans also authorize payments to third parties that assist in the sale
of each class' shares or render shareholder support services. For the
period, the following amounts were paid to third parties under the
Plans:
CLASS A $ 4,725
CLASS T 28,163
CLASS B 11,271
CLASS C 10,791
INSTITUTIONAL CLASS 2,341
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
SALES LOAD. FDC receives a front-end sales charge of up to 5.75% for
selling Class A shares, and 3.50% for selling Class T shares of the
fund. FDC receives the proceeds of contingent deferred sales charges
levied on Class B share redemptions occurring within six years of
purchase and Class C share redemptions occurring within one year of
purchase. Contingent deferred sales charges are based on declining
rates ranging from 5% to 1% for Class B and 1% for Class C, of the
lesser of the cost of shares at the initial date of purchase or the
net asset value of the redeemed shares, excluding any reinvested
dividends and capital gains. In addition, purchases of Class A and
Class T shares that were subject to a finder's fee bear a contingent
deferred sales charge on assets that do not remain in the fund for at
least one year. The Class A and Class T contingent deferred sales
charge is based on 0.25% of the lesser of the cost of shares at the
initial date of purchase or the net asset value of the redeemed
shares, excluding any reinvested dividends and capital gains. A
portion of the sales charges paid to FDC are paid to securities
dealers, banks and other financial institutions.
For the period, sales charge amounts paid to and retained by FDC were
as follows:
PAID TO FDC RETAINED BY FDC
CLASS A $ 416,022 $ 154,022
CLASS T 931,112 327,957
CLASS B 146,346 146,346 *
CLASS C 24,046 24,046 *
$ 1,517,526 $ 652,371
* WHEN CLASS B AND CLASS C SHARES ARE INITIALLY SOLD, FDC PAYS
COMMISSIONS FROM ITS OWN RESOURCES TO SECURITIES DEALERS,
BANKS, AND OTHER FINANCIAL INSTITUTIONS THROUGH WHICH THE SALES ARE
MADE.
TRANSFER AGENT FEES. Fidelity Investments Institutional Operations
Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend
disbursing and shareholder servicing agent for each class of the fund
(collectively referred to as the transfer agent) for the fund's Class
A, Class T, Class B, Class C and Institutional Class. FIIOC receives
account fees and asset-based fees that vary according to the account
size and type of account of the shareholders of the respective classes
of the fund. FIIOC pays for typesetting, printing and mailing of all
shareholder reports, except proxy statements. For the period, the
following amounts were paid to FIIOC:
AMOUNT % OF AVERAGE NET ASSETS
CLASS A $ 43,755 .24
CLASS T 524,766 .21
CLASS B 181,021 .23
CLASS C 48,748 .22
INSTITUTIONAL CLASS 128,231 .15
$ 926,521
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
ACCOUNTING FEES. Fidelity Service Company, Inc. maintains the fund's
accounting records. The fee is based on the level of average net
assets for the month plus out-of-pocket expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $73,735 for the
period.
5. EXPENSE REDUCTIONS.
FMR has directed certain portfolio trades to brokers who paid a
portion of the fund's expenses. For the period, the fund's expenses
were reduced by $51,435 under this arrangement.
In addition, the fund has entered into arrangements with its custodian
and each class' transfer agent whereby credits realized as a result of
uninvested cash balances were used to reduce a portion of expenses.
During the period, the fund's custodian fees were reduced by $1,265
under the custodian arrangement, and each applicable class' expenses
were reduced as follows under the transfer agent arrangements:
TRANSFER AGENT CREDITS
CLASS A $ 127
CLASS T 61
$ 188
6. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
YEARS ENDED NOVEMBER 30,
1998 1997 A
FROM NET INVESTMENT INCOME
Class A $ 57,067 $ 4,677
Class T 439,408 67,952
Class B 2,235 5,594
Class C 638 -
Institutional Class 550,950 5,918
Total $ 1,050,298 $ 84,141
FROM NET REALIZED GAIN
Class A $ 105,066 $ -
Class T 1,992,968 -
Class B 411,203 -
Class C 11,485 -
Institutional Class 1,060,273 -
Total $ 3,580,995 $ -
Total $ 4,631,293 $ 84,141
A DISTRIBUTIONS FOR CLASS A, CLASS T, CLASS B AND INSTITUTIONAL CLASS
ARE FOR THE PERIOD DECEMBER 31, 1996 (COMMENCEMENT OF SALE OF SHARES)
TO
NOVEMBER 30, 1997.
7. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SHARES DOLLARS
YEAR ENDED NOVEMBER 30, YEAR ENDED NOVEMBER 30, YEAR ENDED NOVEMBER 30, YEAR ENDED NOVEMBER 30,
1998 1997A,B 1998 1997A,B
CLASS A Shares sold 1,985,904 602,316 $ 27,925,972 $ 6,949,595
Reinvestment of distributions 11,388 371 144,692 4,174
Shares redeemed (262,753) (43,338) (3,667,714) (516,701)
Net increase (decrease) 1,734,539 559,349 $ 24,402,950 $ 6,437,068
CLASS T Shares sold 19,561,067 11,672,407 $ 272,784,641 $ 134,104,051
Reinvestment of distributions 187,426 5,937 2,329,618 65,332
Shares redeemed (3,889,493) (965,458) (53,697,199) (11,488,641)
Net increase (decrease) 15,859,000 10,712,886 $ 221,417,060 $ 122,680,742
CLASS B Shares sold 8,867,178 2,511,450 $ 124,613,889 $ 28,415,273
Reinvestment of distributions 27,640 485 336,757 5,015
Shares redeemed (654,680) (189,857) (8,961,414) (2,180,901)
Net increase (decrease) 8,240,138 2,322,078 $ 115,989,232 $ 26,239,387
CLASS C Shares sold 4,221,057 31,363 $ 59,142,729 $ 386,538
Reinvestment of distributions 802 - 9,788 -
Shares redeemed (269,958) - (3,678,798) -
Net increase (decrease) 3,951,901 31,363 $ 55,473,719 $ 386,538
INSTITUTIONAL CLASS Shares 2,227,092 6,390,332 $ 31,070,505 $ 78,506,275
sold
Reinvestment of distributions 112,570 365 1,420,639 4,097
Shares redeemed (1,838,555) (464,922) (25,443,310) (5,294,349)
Net increase (decrease) 501,107 5,925,775 $ 7,047,834 $ 73,216,023
</TABLE>
A SHARE TRANSACTIONS FOR CLASS A, CLASS T, CLASS B, AND INSTITUTIONAL
CLASS ARE FOR THE PERIOD DECEMBER 31, 1996 (COMMENCEMENT OF SALE OF
SHARES)
TO NOVEMBER 30, 1997.
B SHARE TRANSACTIONS FOR CLASS C ARE FOR THE PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO NOVEMBER 30, 1997.
8. REGISTRATION FEES.
For the period, each class paid the following amounts to register its
shares for sale:
REGISTRATION FEES
CLASS A $ 13,720
CLASS T 108,083
CLASS B 39,972
CLASS C 24,972
INSTITUTIONAL CLASS 27,606
$ 214,353
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Advisor Series I and the Shareholders of
Fidelity Advisor Growth & Income Fund:
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of
Fidelity Advisor Growth & Income Fund (a fund of Fidelity Advisor
Series I) at November 30, 1998, and the results of its operations,
the changes in its net assets and the financial highlights for the
periods indicated, in conformity with generally accepted accounting
principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the
responsibility of the Fidelity Advisor Growth & Income Fund's
management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of
these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which
included confirmation of securities at November 30, 1998 by
correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
January 13, 1999
DISTRIBUTIONS
A total of 2.25% of the dividends distributed during the fiscal year
was derived from interest on U.S. Government securities which is
generally exempt from state income tax.
A total of 30% of the dividends distributed during the fiscal year
qualifies for the dividends-received deduction for corporate
shareholders.
The fund will notify shareholders in January 1999 of the applicable
percentages for use in preparing 1998 income tax returns.
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.)
Inc., London, England
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Richard A. Spillane Jr., Vice President
Beth F. Terrana, Vice President
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
* INDEPENDENT TRUSTEES
* INDEPENDENT TRUSTEES
ADVISORY BOARD
J. Gary Burkhead
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA
CUSTODIAN
The Chase Manhattan Bank
New York, NY
(registered trademark)
(2_FIDELITY_LOGOS)FIDELITY ADVISOR
(registered trademark)
SMALL CAP
FUND - CLASS A, CLASS T, CLASS B AND CLASS C
ANNUAL REPORT
NOVEMBER 30, 1998
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over
time.
FUND TALK 8 The managers' review of fund
performance, strategy and
outlook.
INVESTMENT SUMMARY 11 A summary of the fund's
investments.
INVESTMENTS 12 A complete list of the fund's
investments with their
market values.
FINANCIAL STATEMENTS 19 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 28 Notes to the financial
statements.
REPORT OF INDEPENDENT 35 The auditors' opinion.
ACCOUNTANTS
DISTRIBUTIONS 36
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION
OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS
IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT
INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY ADVISOR FUND, INCLUDING CHARGES
AND EXPENSES, CONTACT YOUR
INVESTMENT PROFESSIONAL FOR A FREE PROSPECTUS. READ IT CAREFULLY
BEFORE YOU INVEST OR SEND MONEY.
Standard & Poor's, S&P and S&P 500 are registered service marks of The
McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity
Distributors Corporation.
Other third party marks appearing herein are the property of their
respective owners.
All other marks appearing herein are registered or unregistered
trademarks or service marks of FMR Corp. or an affiliated company.
This report is printed on recycled paper using soy-based inks.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
The month of November proved to be a strong one for the stock and bond
markets. The Dow Jones Industrial Average reached a record high.
Merger activity, which had lulled during the summer correction, has
increased significantly. Small-cap stocks posted their third
consecutive month of positive returns, as did emerging markets. While
bond returns generally were not at the levels of their equity
counterparts, they were mostly positive nonetheless.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will
greatly reduce your vulnerability to any single decline. We know from
experience, for example, that stock prices have gone up over longer
periods of time, have significantly outperformed other types of
investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through
diversification. A stock mutual fund, for instance, is already
diversified, because it invests in many different companies. You can
increase your diversification further by investing in a number of
different stock funds, or in such other investment categories as
bonds. If you have a short investment time horizon, you might want to
consider moving some of your investment into a money market fund,
which seeks income and a stable share price by investing in
high-quality, short-term investments. Of course, it's important to
remember that there is no assurance that a money market fund will
achieve its goal of maintaining a stable net asset value of $1.00 per
share, and that these types of funds are neither insured nor
guaranteed by any agency of the U.S. government.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases. Of course, you should
consider your financial ability to continue your purchases through
periods of low price levels before undertaking such a strategy.
Remember to contact your investment professional if you need help with
your investments.
Best regards,
Edward C. Johnson 3d
FIDELITY ADVISOR SMALL CAP FUND - CLASS A
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the class' dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value). If Fidelity had not reimbursed certain class
expenses, the total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIOD ENDED NOVEMBER 30, 1998 LIFE OF FUND
FIDELITY ADV SMALL CAP - CL A 23.50%
FIDELITY ADV SMALL CAP - CL A 16.40%
(INCL. 5.75% SALES CHARGE)
Russell 2000 (registered 13.15%
trademark)
CUMULATIVE TOTAL RETURNS show Class A's performance in percentage
terms over a set period - in this case, since the fund started on
September 9, 1998. For example, if you had invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment
would be $1,050. You can compare Class A's returns to the performance
of the Russell 2000 Index - a market capitalization-weighted index of
2,000 small capitalization stocks. This benchmark includes reinvested
dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year. These numbers will be reported once the fund
is a year old. In addition, the growth of a hypothetical $10,000
investment in the fund will appear in the fund's next report six
months from now.
FIDELITY ADVISOR SMALL CAP FUND - CLASS T
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the class' dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value). If Fidelity had not reimbursed certain class
expenses, the total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIOD ENDED NOVEMBER 30, 1998 LIFE OF FUND
FIDELITY ADV SMALL CAP - CL T 23.40%
FIDELITY ADV SMALL CAP - CL T 19.08%
(INCL. 3.50% SALES CHARGE)
Russell 2000 13.15%
CUMULATIVE TOTAL RETURNS show Class T's performance in percentage
terms over a set period - in this case, since the fund started on
September 9, 1998. For example, if you had invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment
would be $1,050. You can compare Class T's returns to the performance
of the Russell 2000 Index - a market capitalization-weighted index of
2,000 small capitalization stocks. This benchmark includes reinvested
dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year. These numbers will be reported once the fund
is a year old. In addition, the growth of a hypothetical $10,000
investment in the fund will appear in the fund's next report six
months from now.
FIDELITY ADVISOR SMALL CAP FUND - CLASS B
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the class' dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value). Class B shares' contingent deferred sales charge
included in the life of fund total return figure is 5.00%. If Fidelity
had not reimbursed certain class expenses, the total returns would
have been lower.
CUMULATIVE TOTAL RETURNS
PERIOD ENDED NOVEMBER 30, 1998 LIFE OF FUND
FIDELITY ADV SMALL CAP - CL B 23.10%
FIDELITY ADV SMALL CAP - CL B 18.10%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
Russell 2000 13.15%
CUMULATIVE TOTAL RETURNS show Class B's performance in percentage
terms over a set period - in this case, since the fund started on
September 9, 1998. For example, if you had invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment
would be $1,050. You can compare Class B's returns to the performance
of the Russell 2000 Index - a market capitalization-weighted index of
2,000 small capitalization stocks. This benchmark includes reinvested
dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year. These numbers will be reported once the fund
is a year old. In addition, the growth of a hypothetical $10,000
investment in the fund will appear in the fund's next report six
months from now.
FIDELITY ADVISOR SMALL CAP FUND - CLASS C
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the class' dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value). Class C shares' contingent deferred sales charge
included in the life of fund total return figure is 1.00%. If Fidelity
had not reimbursed certain class expenses, the total returns would
have been lower.
CUMULATIVE TOTAL RETURNS
PERIOD ENDED NOVEMBER 30, 1998 LIFE OF FUND
FIDELITY ADV SMALL CAP - CL C 23.40%
FIDELITY ADV SMALL CAP - CL C 22.40%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
Russell 2000 13.15%
CUMULATIVE TOTAL RETURNS show Class C's performance in percentage
terms over a set period - in this case, since the fund started on
September 9, 1998. For example, if you had invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment
would be $1,050. You can compare Class C's returns to the performance
of the Russell 2000 Index - a market capitalization-weighted index of
2,000 small capitalization stocks. This benchmark includes reinvested
dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year. These numbers will be reported once the fund
is a year old. In addition, the growth of a hypothetical $10,000
investment in the fund will appear in the fund's next report six
months from now.
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
When the final bell of the U.S. stock
market sounded on Monday,
November 23, 1998, the Dow
Jones Industrial Average stood at a
record high of 9374.27, serving
notice that the bleak economic
outlook from just a few short months
earlier would not keep positive
investor sentiment down. For the
12-month period ending November
30, 1998, the Dow - an index of
30 blue-chip stocks - returned
18.56%. What caused the
turnaround from the doldrums of
equity performance during the
summer and early fall? A variety of
factors: The economic problems in
Russia, Brazil and other emerging
markets began to dissipate; Asian
markets began to rebound; and,
perhaps most importantly, three
interest-rate cuts late in the period
by the Federal Reserve Board
helped stem the tide of a slowing
U.S. economy. All these factors
culminated in the Dow reaching its
record high late in November, a
peak that outpaced the previous
record set in July by nearly 40 points.
Small-cap stock performance was
still a far cry behind their large-cap
brethren. For the period, the Russell
2000 Index - a popular measure
of small-cap stock performance -
returned -6.62%, significantly
trailing the large-cap weighted
Standard & Poor's 500 Index's
return of 23.66%. Despite the late
rally in the equity market, this kind
of volatility has characterized the
entire year, and when it will level off
is impossible to predict.
An interview with Harry Lange, Portfolio Manager of Fidelity Advisor
Small Cap Fund
Q. HOW DID THE FUND PERFORM, HARRY?
A. It's only been up and running for a short time, but the fund was
able to capitalize on some positive trends within the small-cap stock
universe. From its inception on September 9, 1998 through November 30,
1998, the fund's Class A, Class T, Class B and Class C shares returned
23.50%, 23.40%, 23.10% and 23.40%, respectively. In that time span,
the Russell 2000 Index returned 13.15%. Future reports will show the
fund's comparative performance over six- and 12-month intervals.
Q. WHAT WERE SOME OF THE TRENDS YOU MENTIONED, AND HOW DID YOU
POSITION THE PORTFOLIO?
A. By early October, global market volatility had wreaked havoc with
credit conditions, and banks and other financial institutions had
slowed their lending activity. Since smaller companies rely on loans
to subsidize future growth, many were negatively affected. By the
middle of the month, in fact, some small-cap stock prices had
plummeted to the point where I felt they had no place to go but up. As
a result, I took a more aggressive approach and bought some stocks
that I felt could snap back. This approach paid off, as the Federal
Reserve Board cut rates - thus improving credit conditions - and
investors began to focus more on smaller stocks. As a result,
small-cap stocks performed much more in line with larger stocks during
this brief period.
Q. WHAT ARE SOME OF THE KEY FACTORS YOU CONSIDER WHEN DECIDING WHETHER
TO BUY A STOCK OR NOT?
A. There are obviously many factors, but after some initial probing of
a stock, I like to get a feel for how well a company knows its market
or industry. In addition, I want to know what type of growth strategy
the company plans on following. Is the company planning on expanding?
What kinds of new products can it offer? A third consideration - and
this often determines whether I make the stock a big position in the
portfolio - is whether the company's direction fits into an investing
theme I believe in.
Q. WHERE DID YOU FIND OPPORTUNITIES DURING THE PERIOD?
A. At the end of the period, over 50% of the fund's investments
resided in three growth-oriented market areas: technology, health care
and services. Technology - which continued to be one of the
faster-growing sectors of the market - offered quite a bit of
differentiation in terms of the types of products and services that
companies provided. Two of the fund's top positions at the end of the
period, in fact, were HMT Technology and KLA-Tencor. HMT Technology is
one of the leaders in making the media that goes into disk drives,
while KLA-Tencor is a strong player in the semiconductor field.
Companies involved in the biotechnology area of the health care sector
were also appealing. Several companies were on the verge of making
exciting, new product introductions and I was able to latch on to a
couple that I felt would help the fund's performance. These included
Cytyc Corp. - which has a patent on a new Pap smear test that has
gained favor among doctors - and Sepracor, a company that specializes
in enhancing drug products that have been on the market for some time.
Lastly, services was an area that offered good, steady growth.
Companies such as Nielsen Media Research - which tracks media trends -
and Fair Isaac - a services company that supplies credit scores to
banks - had dominant shares within their respective niche markets and
exhibited steady growth.
Q. THE FUND HAS A FEW POSITIONS IN REAL ESTATE INVESTMENT TRUSTS,
BETTER KNOWN AS REITS. WHAT DID YOU LIKE ABOUT THESE INVESTMENTS?
A. To me, certain REITs provided an element of saneness in the
turbulent market we witnessed during the period. Some of the REITs
that caught my attention were those that had long-term contracts under
which they rented out facilities for government, corporate or research
use. Long-term contracts such as these tend to offer more predictable
rent streams and, in the type of environment we experienced, any
degree of predictability was a welcome sight. REITs also were offering
attractive yields. The fund's positions in Apartment Investment &
Management and Glenborough Realty Trust reflected this strategy.
Q. WHAT'S YOUR OUTLOOK FOR THE COMING MONTHS?
A. Overall, I'd say I'm optimistic. For small-cap stocks to perform
well in 1999, we'll need to see more confidence from a global economic
standpoint. If certain foreign markets can continue to recover and the
U.S. market can display more stability, investors may show a
willingness to buy stocks of smaller companies. In terms of the
technology industry, a pickup in personal computer demand would
certainly be advantageous. Aside from these `ifs,' I'll continue to
scour the small-cap universe in search of solid growth stories.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
HARRY LANGE TALKS ABOUT
SMALL-CAP STOCK RESEARCH:
"One of the many challenges
involved in small-cap investing is
trying to find promising stocks that
may be largely overlooked by
investors. Small-cap stock research
is typically more demanding than
large-cap research. Everyone
knows about Coca-Cola and GE, and
it can be hard to get a research edge
on those types of stocks. As former
Fidelity manager Peter Lynch has
said in the past, a good stock picker
is one who turns over as many rocks
as possible.
"The fund's largest single
investment at the close of the
period - Pegasus Systems -
exemplifies small-cap research.
The company is fairly well-known
for its involvement in making
travel reservations; Pegasus often
serves as the link between the
travel agent and the hotel, for
instance.
"But one aspect of the company
that I felt may have been
overlooked was that it makes
more money per booking when
reservations are transacted over
the Internet. This revenue feature
- - combined with my general
bullishness for the Internet -
made this stock attractive to me,
and it has performed quite well."
FUND FACTS
GOAL: seeks long-term growth
of capital by investing primarily
in equity securities of
companies with small market
capitalizations
START DATE: September 9,
1998
SIZE: as of November
30, 1998, more than $141
million
MANAGER: Harry Lange, since
inception; manager, various
Fidelity equity funds, 1992-
present; research director,
Fidelity Investments Far East,
1988-1992; joined Fidelity
in 1987
(checkmark)
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF NOVEMBER
30, 1998
% OF FUND'S INVESTMENTS
Pegasus Systems, Inc. 3.8
Cytyc Corp. 3.5
Medpartners, Inc. 3.2
HMT Technology Corp. 3.1
Zonagen, Inc. 2.7
VeriSign, Inc. 2.6
Semtech Corp. 2.4
KLA-Tencor Corp. 2.3
Celestial Seasonings, Inc. 2.2
Teradyne, Inc. 2.2
TOP FIVE MARKET SECTORS AS OF
NOVEMBER 30, 1998
% OF FUND'S INVESTMENTS
TECHNOLOGY 31.1
HEALTH 11.4
SERVICES 10.9
CONSTRUCTION & REAL ESTATE 5.9
FINANCE 4.7
ASSET ALLOCATION (% OF FUND'S
INVESTMENTS)
AS OF NOVEMBER 30, 1998 *
Row: 1, Col: 1, Value: 12.8
Row: 1, Col: 2, Value: 87.2
Stocks 87.2%
Short-term
investments 12.8%
FOREIGN
INVESTMENTS 3.1%
*
INVESTMENTS NOVEMBER 30, 1998
Showing Percentage of Total Value of Investment in Securities
<TABLE>
<CAPTION>
<S> <C> <C> <C>
COMMON STOCKS - 87.2%
SHARES VALUE (NOTE 1)
BASIC INDUSTRIES - 0.6%
METALS & MINING - 0.4%
Cable Design Technology Corp. 30,000 $ 553,125
(a)
PAPER & FOREST PRODUCTS - 0.2%
Mercer International, Inc. 33,750 201,445
Pentair, Inc. 3,570 134,544
335,989
TOTAL BASIC INDUSTRIES 889,114
CONSTRUCTION & REAL ESTATE -
5.9%
BUILDING MATERIALS - 2.6%
Elcor Corp. 5,240 161,785
Lone Star Industries, Inc. 5,000 378,438
Owens-Corning 400 14,925
Rock of Ages Corp. Class A (a) 25,000 300,000
Southdown, Inc. 49,300 2,871,725
3,726,873
REAL ESTATE - 0.3%
Boardwalk Equities, Inc. (a) 16,900 190,711
Catellus Development Corp. (a) 13,990 196,734
387,445
REAL ESTATE INVESTMENT TRUSTS
- - 3.0%
Apartment Investment & 20,540 703,495
Management Co. Class A
CenterPoint PropertiesTrust. 11,820 401,880
Colonial Properties Trust 13,800 373,463
Duke Realty Investments, Inc. 29,580 671,096
Glenborough Realty Trust, 35,670 762,446
Inc.
Home Properties of N.Y., Inc. 15,643 385,209
Mack-Cali Realty Corp. 10,000 296,875
Patriot American Hospitality, 19,980 147,353
Inc. unit
Urban Shopping Centers, Inc. 14,930 490,824
4,232,641
TOTAL CONSTRUCTION & REAL 8,346,959
ESTATE
DURABLES - 3.2%
AUTOS, TIRES, & ACCESSORIES -
0.1%
Spartan Motors, Inc. 12,000 76,500
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
DURABLES - CONTINUED
CONSUMER ELECTRONICS - 0.6%
Fossil, Inc. (a) 32,200 $ 891,538
HOME FURNISHINGS - 0.2%
HON Industries, Inc. 9,310 221,113
TEXTILES & APPAREL - 2.3%
Galey & Lord, Inc. (a) 15,350 165,972
Liz Claiborne, Inc. 10,000 338,750
Quaker Fabric Corp. (a) 324,620 2,272,340
Stride Rite Corp. 5,400 47,925
Supreme International Corp. 39,600 425,700
(a)
3,250,687
TOTAL DURABLES 4,439,838
ENERGY - 1.5%
ENERGY SERVICES - 0.3%
Tidewater, Inc. 14,520 334,868
OIL & GAS - 1.2%
Cooper Cameron Corp. (a) 48,970 1,193,644
Oryx Energy Co. (a) 39,300 542,831
1,736,475
TOTAL ENERGY 2,071,343
FINANCE - 4.7%
BANKS - 0.8%
Centura Banks, Inc. 1,360 92,480
Westamerica Bancorp. 27,630 998,134
1,090,614
CREDIT & OTHER FINANCE - 0.3%
Investors Financial Services 300 16,875
Corp.
Long Beach Financial Corp. (a) 53,510 426,408
443,283
INSURANCE - 0.3%
Poe & Brown, Inc. 9,780 342,300
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
FINANCE - CONTINUED
SAVINGS & LOANS - 1.6%
Dime Bancorp, Inc. 55,970 $ 1,486,703
Washington Federal, Inc. 31,080 788,655
2,275,358
SECURITIES INDUSTRY - 1.7%
Everen Capital Corp. 30,000 735,000
Hambrecht & Quist Group (a) 50,000 1,212,500
Knight/Trimark Group, Inc. 30,000 474,375
Class A (a)
2,421,875
TOTAL FINANCE 6,573,430
HEALTH - 11.4%
DRUGS & PHARMACEUTICALS - 9.2%
Cytyc Corp. (a) 250,000 4,953,125
Medco Research, Inc. (a) 83,780 1,696,545
Sepracor, Inc. (a) 29,700 2,465,100
Zonagen, Inc. (a) 196,500 3,782,625
12,897,395
MEDICAL EQUIPMENT & SUPPLIES
- - 2.2%
ESC Medical Systems Ltd. (a) 255,350 2,681,175
Physiometrix, Inc. (a) 169,000 116,188
Respironics, Inc. (a) 20,000 377,500
3,174,863
TOTAL HEALTH 16,072,258
INDUSTRIAL MACHINERY &
EQUIPMENT - 3.5%
ELECTRICAL EQUIPMENT - 2.5%
RayoVac Corp. (a) 111,000 2,566,875
VWR Scientific Products Corp. 29,600 925,000
(a)
3,491,875
INDUSTRIAL MACHINERY &
EQUIPMENT - 1.0%
Compx International, Inc. (a) 17,490 438,343
PRI Automation, Inc. 38,200 916,800
1,355,143
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
INDUSTRIAL MACHINERY &
EQUIPMENT - CONTINUED
POLLUTION CONTROL - 0.0%
Waste Industries, Inc. (a) 5,000 $ 87,188
TOTAL INDUSTRIAL MACHINERY & 4,934,206
EQUIPMENT
MEDIA & LEISURE - 3.9%
BROADCASTING - 2.8%
Heftel Broadcasting Corp. 42,800 1,995,550
Class A (a)
Nielsen Media Research, Inc. 130,000 1,950,000
(a)
3,945,550
PUBLISHING - 0.7%
Harte Hanks Communications, 45,200 1,067,850
Inc.
RESTAURANTS - 0.4%
Brinker International, Inc. 20,000 508,750
(a)
TOTAL MEDIA & LEISURE 5,522,150
NONDURABLES - 2.7%
BEVERAGES - 2.2%
Celestial Seasonings, Inc. (a) 125,920 3,132,260
Mondavi (Robert) Corp. Class 500 18,313
A (a)
3,150,573
FOODS - 0.5%
Corn Products International, 24,090 676,026
Inc.
TOTAL NONDURABLES 3,826,599
PRECIOUS METALS - 0.9%
Getchell Gold Corp. (a) 74,300 1,216,663
RETAIL & WHOLESALE - 4.7%
APPAREL STORES - 1.0%
Chicos Fas, Inc. (a) 65,850 1,440,469
GENERAL MERCHANDISE STORES -
0.9%
Saks Holdings, Inc. (a) 46,692 1,284,030
RETAIL & WHOLESALE,
MISCELLANEOUS - 2.8%
Barbeques Galore Ltd. 50,000 375,000
sponsored ADR
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
RETAIL & WHOLESALE - CONTINUED
RETAIL & WHOLESALE,
MISCELLANEOUS - CONTINUED
Gadzooks, Inc. (a) 145,000 $ 1,069,375
Handleman Co. (a) 200,000 2,400,000
3,844,375
TOTAL RETAIL & WHOLESALE 6,568,874
SERVICES - 10.9%
ADVERTISING - 2.2%
CMG Information Services, 40,110 3,108,525
Inc. (a)
EDUCATIONAL SERVICES - 0.4%
Quest Education Corp. (a) 60,000 600,000
PRINTING - 1.4%
Valassis Communications, Inc. 43,610 1,869,779
(a)
SERVICES - 6.9%
ACNielsen Corp. (a) 60,000 1,653,750
APAC Teleservices, Inc. (a) 130,000 845,000
Day Runner, Inc. (a) 54,140 1,191,080
Medpartners, Inc. (a) 1,009,200 4,541,400
Modis Professional Services, 121,190 1,446,706
Inc. (a)
9,677,936
TOTAL SERVICES 15,256,240
TECHNOLOGY - 31.1%
COMMUNICATIONS EQUIPMENT - 0.3%
Plantronics, Inc. (a) 2,200 144,650
Xircom, Inc. (a) 9,400 283,763
428,413
COMPUTER SERVICES & SOFTWARE
- - 17.3%
Architel Systems Corp. (a) 35,800 420,339
Catalyst International, Inc. 25,000 253,125
(a)
E Trade Group, Inc. (a) 20,000 541,250
Earthlink Network, Inc. (a) 5,000 304,063
Electronics for Imaging, Inc. 9,000 241,313
(a)
FactSet Research Systems, 25,000 1,015,625
Inc. (a)
Fair, Isaac & Co., Inc. 34,460 1,387,015
Fundtech Ltd. 20,000 340,000
i2 Technologies, Inc. (a) 120,000 2,970,000
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TECHNOLOGY - CONTINUED
COMPUTER SERVICES & SOFTWARE
- - CONTINUED
Integrated Measurement 10,000 $ 106,250
Systems, Inc. (a)
Pegasus Systems, Inc. (a) 239,860 5,336,877
Rational Software Corp. (a) 99,600 2,259,675
RealNetworks, Inc. 20,300 771,400
Shared Medical Systems Corp. 20,000 1,047,500
Sportsline USA, Inc. 86,200 1,486,950
Symantec Corp. (a) 50,000 1,000,000
Titan Corp. (a) 122,730 659,674
TSI International Software 10,000 365,000
Ltd. (a)
VeriSign, Inc. (a) 90,000 3,611,250
Wind River Systems, Inc. (a) 5,350 249,444
24,366,750
COMPUTERS & OFFICE EQUIPMENT
- - 3.8%
HMT Technology Corp. (a) 386,180 4,392,798
Tech Data Corp. (a) 22,160 891,940
5,284,738
ELECTRONIC INSTRUMENTS - 5.7%
KLA-Tencor Corp. (a) 96,150 3,275,109
Kulicke & Soffa Industries, 31,230 532,862
Inc. (a)
Teradyne, Inc. (a) 97,380 3,122,246
Varian Associates, Inc. 26,300 1,040,494
7,970,711
ELECTRONICS - 4.0%
Microchip Technology, Inc. (a) 29,540 1,028,361
Microsemi Corp. (a) 14,840 178,080
PMC-Sierra, Inc. (a) 18,490 996,149
Semtech Corp. (a) 113,820 3,371,918
5,574,508
TOTAL TECHNOLOGY 43,625,120
TRANSPORTATION - 0.6%
AIR TRANSPORTATION - 0.0%
Travel Services 2,010 45,476
International, Inc. (a)
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TRANSPORTATION - CONTINUED
TRUCKING & FREIGHT - 0.6%
CNF Transportation, Inc. 6,180 $ 220,549
Swift Transportation Co., 25,470 558,748
Inc. (a)
779,297
TOTAL TRANSPORTATION 824,773
UTILITIES - 1.6%
TELEPHONE SERVICES - 1.6%
Davel Communications Group, 40,000 770,000
Inc. (a)
Global TeleSystems Group, 20,000 868,125
Inc. (a)
WinStar Communications, Inc. 20,000 557,500
(a)
2,195,625
TOTAL COMMON STOCKS 122,363,192
(Cost $106,006,210)
CASH EQUIVALENTS - 12.8%
MATURITY AMOUNT
Investments in repurchase $ 18,019,627 18,017,000
agreements (U.S. Treasury
obligations), in a joint
trading account at 5.25%,
dated 11/30/98 due 12/1/98
TOTAL INVESTMENT IN $ 140,380,192
SECURITIES - 100%
(Cost $124,023,210)
</TABLE>
LEGEND
(a) Non-income producing
INCOME TAX INFORMATION
At November 30, 1998, the aggregate cost of investment securities for
income tax purposes was $124,499,082. Net unrealized appreciation
aggregated $15,881,110, of which $18,293,676 related to appreciated
investment securities and $2,412,566 related to depreciated investment
securities.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1998
ASSETS
Investment in securities, at $ 140,380,192
value (including repurchase
agreements of $18,017,000)
(cost $124,023,210) - See
accompanying schedule
Cash 385,934
Receivable for investments 2,173,977
sold
Receivable for fund shares 5,063,183
sold
Dividends receivable 24,972
Prepaid expenses 57,252
TOTAL ASSETS 148,085,510
LIABILITIES
Payable for investments $ 6,250,639
purchased
Payable for fund shares 267,068
redeemed
Accrued management fee 60,239
Distribution fees payable 53,785
Other payables and accrued 78,905
expenses
TOTAL LIABILITIES 6,710,636
NET ASSETS $ 141,374,874
Net Assets consist of:
Paid in capital $ 124,877,132
Accumulated undistributed net 140,781
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 16,356,961
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS $ 141,374,874
STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
NOVEMBER 30, 1998
CALCULATION OF MAXIMUM $12.35
OFFERING PRICE CLASS A: NET
ASSET VALUE and redemption
price per share
($9,586,638 (divided by)
776,499 shares)
Maximum offering price per $13.10
share (100/94.25 of $12.35)
CLASS T: NET ASSET VALUE and $12.34
redemption price per share
($72,428,479 (divided by)
5,870,987 shares)
Maximum offering price per $12.79
share (100/96.50 of $12.34)
CLASS B: NET ASSET VALUE and $12.31
offering price per share
($24,344,488 (divided by)
1,977,398 shares) A
CLASS C: NET ASSET VALUE, and $12.34
offering price per share
($22,117,331 (divided by)
1,792,309 shares) A
INSTITUTIONAL CLASS: NET $12.35
ASSET VALUE, offering price
and redemption price per
share ($12,897,938 (divided
by) 1,044,581 shares)
A REDEMPTION PRICE PER-SHARE IS EQUAL TO NET ASSET VALUE LESS
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS
SEPTEMBER 9, 1998
(COMMENCEMENT OF OPERATIONS)
TO NOVEMBER 30, 1998
INVESTMENT INCOME $ 84,234
Dividends
Interest 95,431
TOTAL INCOME 179,665
EXPENSES
Management fee $ 104,572
Transfer agent fees 36,581
Distribution fees 80,694
Accounting fees and expenses 13,571
Non-interested trustees' 20
compensation
Custodian fees and expenses 7,805
Registration fees 79,364
Audit 22,011
Miscellaneous 1,003
Total expenses before 345,621
reductions
Expense reductions (67,497) 278,124
NET INVESTMENT INCOME (LOSS) (98,459)
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 239,208
Foreign currency transactions 32 239,240
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 16,356,982
Assets and liabilities in (21) 16,356,961
foreign currencies
NET GAIN (LOSS) 16,596,201
NET INCREASE (DECREASE) IN $ 16,497,742
NET ASSETS RESULTING FROM
OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
SEPTEMBER 9, 1998
(COMMENCEMENT OF OPERATIONS)
TO NOVEMBER 30, 1998
INCREASE (DECREASE) IN NET
ASSETS
Operations Net investment $ (98,459)
income (loss)
Net realized gain (loss) 239,240
Change in net unrealized 16,356,961
appreciation (depreciation)
NET INCREASE (DECREASE) IN 16,497,742
NET ASSETS RESULTING FROM
OPERATIONS
Share transactions - net 124,877,132
increase (decrease)
TOTAL INCREASE (DECREASE) 141,374,874
IN NET ASSETS
NET ASSETS
Beginning of period -
End of period $ 141,374,874
FINANCIAL HIGHLIGHTS - CLASS A
SEPTEMBER 9, 1998
(COMMENCEMENT OF OPERATIONS)
TO NOVEMBER 30,
1998
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 10.00
period
Income from Investment
Operations
Net investment income (loss) (.01)
E
Net realized and unrealized 2.36
gain (loss)
Total from investment 2.35
operations
Net asset value, end of period $ 12.35
TOTAL RETURN B, C, D 23.50%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 9,587
(000 omitted)
Ratio of expenses to average 1.75% A, F
net assets
Ratio of expenses to average 1.68% A, G
net assets after expense
reductions
Ratio of net investment (.40)% A
income (loss) to average net
assets
Portfolio turnover 204% A
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS).
D TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE.
E NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - CLASS T
SEPTEMBER 9, 1998
(COMMENCEMENT OF OPERATIONS)
TO NOVEMBER 30,
1998
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 10.00
period
Income from Investment
Operations
Net investment income (loss) (.02)
E
Net realized and unrealized 2.36
gain (loss)
Total from investment 2.34
operations
Net asset value, end of period $ 12.34
TOTAL RETURN B, C, D 23.40%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 72,428
(000 omitted)
Ratio of expenses to average 2.00% A, F
net assets
Ratio of expenses to average 1.93% A, G
net assets after expense
reductions
Ratio of net investment (.63)% A
income (loss) to average net
assets
Portfolio turnover 204% A
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS).
D TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE.
E NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - CLASS B
SEPTEMBER 9, 1998
(COMMENCEMENT OF OPERATIONS)
TO NOVEMBER 30,
1998
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 10.00
period
Income from Investment
Operations
Net investment income (loss) (.03)
E
Net realized and unrealized 2.34
gain (loss)
Total from investment 2.31
operations
Net asset value, end of period $ 12.31
TOTAL RETURN B, C, D 23.10%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 24,344
(000 omitted)
Ratio of expenses to average 2.50% A, F
net assets
Ratio of expenses to average 2.43% A, G
net assets after expense
reductions
Ratio of net investment (1.15)% A
income (loss) to average net
assets
Portfolio turnover 204% A
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS).
D TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE.
E NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - CLASS C
SEPTEMBER 9, 1998
(COMMENCEMENT OF OPERATIONS)
TO NOVEMBER 30,
1998
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 10.00
period
Income from Investment
Operations
Net investment income (loss) (.03)
E
Net realized and unrealized 2.37
gain (loss)
Total from investment 2.34
operations
Net asset value, end of period $ 12.34
TOTAL RETURN B, C, D 23.40%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 22,117
(000 omitted)
Ratio of expenses to average 2.50% A, F
net assets
Ratio of expenses to average 2.44% A, G
net assets after expense
reductions
Ratio of net investment (1.15)% A
income (loss) to average net
assets
Portfolio turnover 204% A
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS).
D TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE.
E NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
SEPTEMBER 9, 1998
(COMMENCEMENT OF OPERATIONS)
TO NOVEMBER 30,
1998
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 10.00
period
Income from Investment
Operations
Net investment income (loss) -
D
Net realized and unrealized 2.35
gain (loss)
Total from investment 2.35
operations
Net asset value, end of period $ 12.35
TOTAL RETURN B, C 23.50%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 12,898
(000 omitted)
Ratio of expenses to average 1.50% A, E
net assets
Ratio of expenses to average 1.42% A, F
net assets after expense
reductions
Ratio of net investment (.15)% A
income (loss) to average net
assets
Portfolio turnover 204% A
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS).
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1998
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Small Cap Fund(the fund) is a fund of Fidelity
Advisor Series I (the trust) and is authorized to issue an unlimited
number of shares. The trust is registered under the Investment Company
Act of 1940, as amended (the 1940 Act), as an open-end management
investment company organized as a Massachusetts business trust.
The fund offers Class A, Class T, Class B, Class C, and Institutional
Class shares, each of which has equal rights as to assets and voting
privileges. Each class has exclusive voting rights with respect to
matters that affect that class. Class B shares will automatically
convert to Class A shares after a holding period of 7 years from the
initial date of purchase. Investment income, realized and unrealized
capital gains and losses, the common expenses of the fund, and certain
fund-level expense reductions, if any, are allocated on a pro rata
basis to each class based on the relative net assets of each class to
the total net assets of the fund. Each class of shares differs in its
respective distribution, transfer agent, and certain other
class-specific fees, expenses, and expense reductions.
The financial statements have been prepared in conformity with
generally accepted accounting principles which require management to
make certain estimates and assumptions at the date of the financial
statements. The following summarizes the significant accounting
policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Securities for which exchange
quotations are not readily available (and in certain cases debt
securities which trade on an exchange) are valued primarily using
dealer-supplied valuations or at their fair value as determined in
good faith under consistently applied procedures under the general
supervision of the Board of Trustees. Short-term securities with
remaining maturities of sixty days or less for which quotations are
not readily available are valued at amortized cost or original cost
plus accrued interest, both of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases
and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
date and
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
FOREIGN CURRENCY TRANSLATION - CONTINUED
settlement on purchases and sales of securities. The effects of
changes in foreign currency exchange rates on investments in
securities are included with the net realized and unrealized gain or
loss on investment securities.
INCOME TAXES. The fund intends to qualify as a regulated investment
company under Subchapter M of the Internal Revenue Code. By so
qualifying, the fund will not be subject to income taxes to the extent
that it distributes substantially all of its taxable income for its
fiscal year. The schedule of investments includes information
regarding income taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend
date, except certain dividends from foreign securities where the
ex-dividend date may have passed, are recorded as soon as the fund is
informed of the ex-dividend date. Non-cash dividends included in
dividend income, if any, are recorded at the fair market value of the
securities received. Interest income is accrued as earned. Investment
income is recorded net of foreign taxes withheld where recovery of
such taxes is uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
PREPAID EXPENSES. Fidelity Management & Research Company (FMR) bears
all organizational expenses except for registering and qualifying each
class and shares of each class for distribution under federal and
state securities law. These expenses are borne by the fund and
amortized over one year.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date. Income dividends and capital gain distributions are
declared separately for each class.
Income and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. These differences may result in distribution
reclassifications.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Accumulated undistributed net realized gain (loss) on investments and
foreign currency transactions may include temporary book and tax basis
differences which will reverse in a subsequent period. Any taxable
income or gain remaining at fiscal year end is distributed in the
following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the contracts'
terms. The U.S. dollar value of foreign currency contracts is
determined using contractual currency exchange rates established at
the time of each trade.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with
other affiliated entities of FMR, may transfer uninvested cash
balances into one or more joint trading accounts. These balances are
invested in one or more repurchase agreements for U.S. Treasury or
Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are
marked-to-market daily and maintained at a value at least equal to the
principal amount of the repurchase agreement (including accrued
interest). FMR, the fund's investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $131,914,480 and $26,147,478, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus a
fixed individual fund fee rate applied to the average net assets of
the fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds advised by FMR. The rates ranged from .2500% to .5200% for the
period. The annual individual fund fee rate is .45%. In the event that
these rates were lower than the contractual rates in effect during the
period, FMR voluntarily implemented the above rates, as they resulted
in the same or a lower management fee. For the period, the management
fee was equivalent to an annualized rate of .75% of average net
assets.
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the
1940 Act, the Trustees have adopted separate distribution plans with
respect to each class of shares (collectively referred to as "the
Plans"). Under certain of the Plans, the class pays Fidelity
Distributors Corporation (FDC), an affiliate of FMR, a distribution
and service fee. A portion of this fee may be reallowed to securities
dealers, banks and other financial
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
DISTRIBUTION AND SERVICE PLAN - CONTINUED
institutions for the distribution of each class of shares and
providing shareholder support services. For the period, this fee was
based on the following annual rates of the average net assets of each
applicable class:
CLASS A .25%
CLASS T .50%
CLASS B 1.00%*
CLASS C 1.00%*
* .75% REPRESENTS A DISTRIBUTION FEE AND .25% REPRESENTS A SHAREHOLDER
SERVICE FEE.
For the period, each class paid FDC the following amounts, a portion
of which was retained by FDC:
PAID TO FDC RETAINED BY FDC
CLASS A $ 2,413 $ -
CLASS T 34,861 58
CLASS B 21,796 16,347
CLASS C 21,624 21,624
$ 80,694 $ 38,029
Under the Plans, FMR or FDC may use its resources to pay
administrative and promotional expenses related to the sale of each
class' shares. The Plans also authorize payments to third parties that
assist in the sale of each class' shares or render shareholder support
services. For the period, FMR made no payments either directly or
through FDC to third parties for the fiscal year ended 1998.
SALES LOAD. FDC receives a front-end sales charge of up to 5.75% for
selling Class A shares, and 3.50% for selling Class T shares of the
fund. FDC receives the proceeds of contingent deferred sales charges
levied on Class B share redemptions occurring within six years of
purchase and Class C share redemptions occurring within one year of
purchase. Contingent deferred sales charges are based on declining
rates ranging from 5% to 1% for Class B and 1% for Class C, of the
lesser of the cost of shares at the initial date of purchase or the
net asset value of the redeemed shares, excluding any reinvested
dividends and capital gains. In addition, purchases of Class A and
Class T shares that were subject to a finder's fee bear a contingent
deferred sales charge on
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
SALES LOAD - CONTINUED
assets that do not remain in the fund for at least one year. The Class
A and Class T contingent deferred sales charge is based on 0.25% of
the lesser of the cost of shares at the initial date of purchase or
the net asset value of the redeemed shares, excluding any reinvested
dividends and capital gains. A portion of the sales charges paid to
FDC are paid to securities dealers, banks and other financial
institutions.
For the period, sales charge amounts paid to and retained by FDC were
as follows:
PAID TO FDC RETAINED BY FDC
CLASS A $ 59,118 $ 42,784
CLASS T 153,317 75,134
CLASS B 5,341 5,341*
CLASS C 1,436 1,436*
$ 219,212 $ 124,695
* WHEN CLASS B AND CLASS C SHARES ARE INITIALLY SOLD, FDC PAYS
COMMISSIONS FROM ITS OWN RESOURCES TO SECURITIES DEALERS, BANKS, AND
OTHER FINANCIAL INSTITUTIONS THROUGH WHICH THE SALES ARE MADE.
TRANSFER AGENT FEES. Fidelity Investments Institutional Operations
Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend
disbursing and shareholder servicing agent for each class of the fund.
FIIOC receives account fees and asset-based fees that vary according
to the account size and type of account of the shareholders of the
respective classes of the fund. FIIOC pays for typesetting, printing
and mailing of all shareholder reports, except proxy statements. For
the period, the following amounts were paid to FIIOC:
AMOUNT % OF AVERAGE NET ASSETS
CLASS A $ 2,702 .29 *
CLASS T 17,794 .26 *
CLASS B 6,798 .32 *
CLASS C 5,000 .24 *
INSTITUTIONAL CLASS 4,287 .23 *
$ 36,581
* ANNUALIZED
ACCOUNTING FEES. Fidelity Service Company, Inc. (FSC), an affiliate of
FMR, maintains the fund's accounting records. The fee is based on the
level of average net assets for the month plus out-of-pocket expenses.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $41,249 for the
period.
5. EXPENSE REDUCTIONS.
FMR voluntarily agreed to reimburse operating expenses (excluding
interest, taxes, brokerage commissions and extraordinary expenses)
above the following annual rates or range of annual rates of average
net assets for each of the following classes:
FMR EXPENSE LIMITATIONS REIMBURSEMENT
CLASS A 1.75% $ 4,636
CLASS T 2.00% 26,109
CLASS B 2.50% 9,874
CLASS C 2.50% 8,425
INSTITUTIONAL CLASS 1.50% 8,978
$ 58,022
FMR has also directed certain portfolio trades to brokers who paid a
portion of the fund's expenses. For the period, the fund's expenses
were reduced by $9,065 under this arrangement.
In addition, the fund has entered into arrangements with its custodian
and each class' transfer agent whereby credits realized as a result of
uninvested cash balances were used to reduce a portion of expenses.
During the period, the fund's custodian fees were reduced by $196
under the custodian arrangement, and each applicable class' expenses
were reduced as follows under the transfer agent arrangements:
TRANSFER AGENT CREDITS
CLASS T $ 214
6. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
SHARES DOLLARS
SEPTEMBER 9, 1998 SEPTEMBER 9, 1998
(COMMENCEMENT OF OPERATIONS) (COMMENCEMENT OF OPERATIONS)
TO NOVEMBER 30, TO NOVEMBER 30,
1998 1998
CLASS A Shares sold 803,382 $ 8,780,684
Shares redeemed (26,883) (306,364)
Net increase (decrease) 776,499 $ 8,474,320
CLASS T Shares sold 5,958,472 $ 65,079,821
Shares redeemed (87,485) (935,799)
Net increase (decrease) 5,870,987 $ 64,144,022
CLASS B Shares sold 2,004,383 $ 22,156,184
Shares redeemed (26,985) (321,811)
Net increase (decrease) 1,977,398 $ 21,834,373
CLASS C Shares sold 1,833,835 $ 19,957,700
Shares redeemed (41,526) (489,364)
Net increase (decrease) 1,792,309 $ 19,468,336
INSTITUTIONAL CLASS Shares 1,065,454 $ 11,180,375
sold
Shares redeemed (20,873) (224,294)
Net increase (decrease) 1,044,581 $ 10,956,081
</TABLE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Advisor Series I and the Shareholders of
Fidelity Advisor Small Cap Fund:
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of
Fidelity Advisor Small Cap Fund (a fund of Fidelity Advisor Series I)
at November 30, 1998, and the results of its operations, the changes
in its net assets and the financial highlights for the period
indicated, in conformity with generally accepted accounting
principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the
responsibility of the Fidelity Advisor Small Cap Fund's management;
our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit of these
financial statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit, which
included confirmation of securities at November 30, 1998 by
correspondence with the custodian and brokers, provides a reasonable
basis for the opinion expressed above.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
January 13, 1999
DISTRIBUTIONS
The Board of Trustees of Fidelity Advisor Small Cap Fund voted to pay
to shareholders of record at the opening of business on record date,
the following distributions derived from capital gains realized from
sales of portfolio securities:
PAY DATE RECORD DATE CAPITAL GAINS
Class A 1/11/99 1/8/99 $.05
Class T 1/11/99 1/8/99 $.05
Class B 1/11/99 1/8/99 $.05
Class C 1/11/99 1/8/99 $.05
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.)
Inc., London, England
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Abigail P. Johnson, Vice President
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
* INDEPENDENT TRUSTEES
ADVISORY BOARD
J. Gary Burkhead
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA
CUSTODIAN
State Street Bank and Trust Company
Quincy, MA
FOCUS FUNDS
Fidelity Advisor Consumer
Industries Fund
Fidelity Advisor Cyclical
Industries Fund
Fidelity Advisor Financial
Services Fund
Fidelity Advisor Health Care Fund
Fidelity Advisor Natural
Resources Fund
Fidelity Advisor Technology Fund
Fidelity Advisor Utilities Growth Fund
GROWTH FUNDS
Fidelity Advisor Latin America Fund
Fidelity Advisor Japan Fund
Fidelity Advisor Europe Capital Appreciation Fund
Fidelity Advisor International Capital Appreciation Fund
Fidelity Advisor Overseas Fund
Fidelity Advisor Diversified International Fund
Fidelity Advisor Global Equity Fund
Fidelity Advisor TechnoQuant
Growth Fund
SM
Fidelity Advisor Small Cap Fund
Fidelity Advisor Strategic
Opportunities Fund
Fidelity Advisor Mid Cap Fund
Fidelity Advisor Retirement
Growth Fund
Fidelity Advisor Equity Growth Fund
Fidelity Advisor Large Cap Fund
Fidelity Advisor Dividend Growth Fund
Fidelity Advisor Growth
Opportunities Fund
GROWTH AND INCOME FUNDS
Fidelity Advisor Growth & Income Fund
Fidelity Advisor Equity Income Fund
Fidelity Advisor Asset Allocation Fund
Fidelity Advisor Balanced Fund
TAXABLE INCOME FUNDS
Fidelity Advisor Emerging Markets Income Fund
Fidelity Advisor High Yield Fund
Fidelity Advisor Strategic Income Fund
Fidelity Advisor Mortgage
Securities Fund
Fidelity Advisor Government Investment Fund
Fidelity Advisor Intermediate Bond Fund
Fidelity Advisor Short Fixed-Income Fund
MUNICIPAL FUNDS
Fidelity Advisor Municipal Income Fund
Fidelity Advisor Intermediate Municipal Income Fund
MONEY MARKET FUNDS
Prime Fund
Treasury Fund
Tax-Exempt Fund
(registered trademark)
(2_FIDELITY_LOGOS)FIDELITY ADVISOR
(registered trademark)
SMALL CAP
FUND - INSTITUTIONAL CLASS
ANNUAL REPORT
NOVEMBER 30, 1998
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over
time.
FUND TALK 5 The managers' review of fund
performance, strategy and
outlook.
INVESTMENT SUMMARY 8 A summary of the fund's
investments.
INVESTMENTS 9 A complete list of the fund's
investments with their
market values.
FINANCIAL STATEMENTS 16 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 25 Notes to the financial
statements.
REPORT OF INDEPENDENT 32 The auditors' opinion.
ACCOUNTANTS
DISTRIBUTIONS 33
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION
OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS
IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT
INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY ADVISOR FUND, INCLUDING CHARGES
AND EXPENSES, CONTACT YOUR
INVESTMENT PROFESSIONAL FOR A FREE PROSPECTUS. READ IT CAREFULLY
BEFORE YOU INVEST OR SEND MONEY.
Standard & Poor's, S&P and S&P 500 are registered service marks of The
McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity
Distributors Corporation.
Other third party marks appearing herein are the property of their
respective owners.
All other marks appearing herein are registered or unregistered
trademarks or service marks of FMR Corp. or an affiliated company.
This report is printed on recycled paper using soy-based inks.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
The month of November proved to be a strong one for the stock and bond
markets. The Dow Jones Industrial Average reached a record high.
Merger activity, which had lulled during the summer correction, has
increased significantly. Small-cap stocks posted their third
consecutive month of positive returns, as did emerging markets. While
bond returns generally were not at the levels of their equity
counterparts, they were mostly positive nonetheless.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will
greatly reduce your vulnerability to any single decline. We know from
experience, for example, that stock prices have gone up over longer
periods of time, have significantly outperformed other types of
investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through
diversification. A stock mutual fund, for instance, is already
diversified, because it invests in many different companies. You can
increase your diversification further by investing in a number of
different stock funds, or in such other investment categories as
bonds. If you have a short investment time horizon, you might want to
consider moving some of your investment into a money market fund,
which seeks income and a stable share price by investing in
high-quality, short-term investments. Of course, it's important to
remember that there is no assurance that a money market fund will
achieve its goal of maintaining a stable net asset value of $1.00 per
share, and that these types of funds are neither insured nor
guaranteed by any agency of the U.S. government.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases. Of course, you should
consider your financial ability to continue your purchases through
periods of low price levels before undertaking such a strategy.
Remember to contact your investment professional if you need help with
your investments.
Best regards,
Edward C. Johnson 3d
FIDELITY ADVISOR SMALL CAP FUND - INSTITUTIONAL CLASS
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance.
You can look at the total percentage change in value, the average
annual percentage change or the growth of a hypothetical $10,000
investment. Total return reflects the change in the value of an
investment, assuming reinvestment of the class' dividend income and
capital gains (the profits earned upon the sale of securities that
have grown in value). If Fidelity had not reimbursed certain class
expenses, the total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIOD ENDED NOVEMBER 30, 1998 LIFE OF FUND
FIDELITY ADV SMALL CAP - INST 23.50%
CL
Russell 2000(registered 13.15%
trademark)
CUMULATIVE TOTAL RETURNS show Institutional Class' performance in
percentage terms over a set period - in this case, since the fund
started on September 9, 1998. For example, if you had invested $1,000
in a fund that had a 5% return over the past year, the value of your
investment would be $1,050. You can compare Institutional Class'
returns to the performance of the Russell 2000 Index - a market
capitalization-weighted index of 2,000 small capitalization stocks.
This benchmark includes reinvested dividends and capital gains, if
any.
AVERAGE ANNUAL TOTAL RETURNS
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and
show you what would have happened if the fund had performed at a
constant rate each year. These numbers will be reported once the fund
is a year old. In addition, the growth of a hypothetical $10,000
investment in the fund will appear in the fund's next report six
months from now.
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
When the final bell of the U.S. stock
market sounded on Monday,
November 23, 1998, the Dow
Jones Industrial Average stood at a
record high of 9374.27, serving
notice that the bleak economic
outlook from just a few short months
earlier would not keep positive
investor sentiment down. For the
12-month period ending November
30, 1998, the Dow - an index of
30 blue-chip stocks - returned
18.56%. What caused the
turnaround from the doldrums of
equity performance during the
summer and early fall? A variety of
factors: The economic problems in
Russia, Brazil and other emerging
markets began to dissipate; Asian
markets began to rebound; and,
perhaps most importantly, three
interest-rate cuts late in the period
by the Federal Reserve Board
helped stem the tide of a slowing
U.S. economy. All these factors
culminated in the Dow reaching its
record high late in November, a
peak that outpaced the previous
record set in July by nearly 40 points.
Small-cap stock performance was
still a far cry behind their large-cap
brethren. For the period, the Russell
2000 Index - a popular measure
of small-cap stock performance -
returned -6.62%, significantly
trailing the large-cap weighted
Standard & Poor's 500 Index's
return of 23.66%. Despite the late
rally in the equity market, this kind
of volatility has characterized the
entire year, and when it will level off
is impossible to predict.
An interview with Harry Lange, Portfolio Manager of Fidelity Advisor
Small Cap Fund
Q. HOW DID THE FUND PERFORM, HARRY?
A. It's only been up and running for a short time, but the fund was
able to capitalize on some positive trends within the small-cap stock
universe. From its inception on September 9, 1998 through November 30,
1998, the fund's Institutional Class shares returned 23.50%. In that
time span, the Russell 2000 Index returned 13.15%. Future reports will
show the fund's comparative performance over six- and 12-month
intervals.
Q. WHAT WERE SOME OF THE TRENDS YOU MENTIONED, AND HOW DID YOU
POSITION THE PORTFOLIO?
A. By early October, global market volatility had wreaked havoc with
credit conditions, and banks and other financial institutions had
slowed their lending activity. Since smaller companies rely on loans
to subsidize future growth, many were negatively affected. By the
middle of the month, in fact, some small-cap stock prices had
plummeted to the point where I felt they had no place to go but up. As
a result, I took a more aggressive approach and bought some stocks
that I felt could snap back. This approach paid off, as the Federal
Reserve Board cut rates - thus improving credit conditions - and
investors began to focus more on smaller stocks. As a result,
small-cap stocks performed much more in line with larger stocks during
this brief period.
Q. WHAT ARE SOME OF THE KEY FACTORS YOU CONSIDER WHEN DECIDING WHETHER
TO BUY A STOCK OR NOT?
A. There are obviously many factors, but after some initial probing of
a stock, I like to get a feel for how well a company knows its market
or industry. In addition, I want to know what type of growth strategy
the company plans on following. Is the company planning on expanding?
What kinds of new products can it offer? A third consideration - and
this often determines whether I make the stock a big position in the
portfolio - is whether the company's direction fits into an investing
theme I believe in.
Q. WHERE DID YOU FIND OPPORTUNITIES DURING THE PERIOD?
A. At the end of the period, over 50% of the fund's investments
resided in three growth-oriented market areas: technology, health care
and services. Technology - which continued to be one of the
faster-growing sectors of the market - offered quite a bit of
differentiation in terms of the types of products and services that
companies provided. Two of the fund's top positions at the end of the
period, in fact, were HMT Technology and KLA-Tencor. HMT Technology is
one of the leaders in making the media that goes into disk drives,
while KLA-Tencor is a strong player in the semiconductor field.
Companies involved in the biotechnology area of the health care sector
were also appealing. Several companies were on the verge of making
exciting, new product introductions and I was able to latch on to a
couple that I felt would help the fund's performance. These included
Cytyc Corp. - which has a patent on a new Pap smear test that has
gained favor among doctors - and Sepracor, a company that specializes
in enhancing drug products that have been on the market for some time.
Lastly, services was an area that offered good, steady growth.
Companies such as Nielsen Media Research - which tracks media trends -
and Fair Isaac - a services company that supplies credit scores to
banks - had dominant shares within their respective niche markets and
exhibited steady growth.
Q. THE FUND HAS A FEW POSITIONS IN REAL ESTATE INVESTMENT TRUSTS,
BETTER KNOWN AS REITS. WHAT DID YOU LIKE ABOUT THESE INVESTMENTS?
A. To me, certain REITs provided an element of saneness in the
turbulent market we witnessed during the period. Some of the REITs
that caught my attention were those that had long-term contracts under
which they rented out facilities for government, corporate or research
use. Long-term contracts such as these tend to offer more predictable
rent streams and, in the type of environment we experienced, any
degree of predictability was a welcome sight. REITs also were offering
attractive yields. The fund's positions in Apartment Investment &
Management and Glenborough Realty Trust reflected this strategy.
Q. WHAT'S YOUR OUTLOOK FOR THE COMING MONTHS?
A. Overall, I'd say I'm optimistic. For small-cap stocks to perform
well in 1999, we'll need to see more confidence from a global economic
standpoint. If certain foreign markets can continue to recover and the
U.S. market can display more stability, investors may show a
willingness to buy stocks of smaller companies. In terms of the
technology industry, a pickup in personal computer demand would
certainly be advantageous. Aside from these `ifs,' I'll continue to
scour the small-cap universe in search of solid growth stories.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
HARRY LANGE TALKS ABOUT
SMALL-CAP STOCK RESEARCH:
"One of the many challenges
involved in small-cap investing is
trying to find promising stocks that
may be largely overlooked by
investors. Small-cap stock research
is typically more demanding than
large-cap research. Everyone
knows about Coca-Cola and GE, and
it can be hard to get a research edge
on those types of stocks. As former
Fidelity manager Peter Lynch has
said in the past, a good stock picker
is one who turns over as many rocks
as possible.
"The fund's largest single
investment at the close of the
period - Pegasus Systems -
exemplifies small-cap research.
The company is fairly well-known
for its involvement in making
travel reservations; Pegasus often
serves as the link between the
travel agent and the hotel, for
instance.
"But one aspect of the company
that I felt may have been
overlooked was that it makes
more money per booking when
reservations are transacted over
the Internet. This revenue feature
- - combined with my general
bullishness for the Internet -
made this stock attractive to me,
and it has performed quite well."
FUND FACTS
GOAL: seeks long-term growth
of capital by investing primarily
in equity securities of
companies with small market
capitalizations
START DATE: September 9,
1998
SIZE: as of November
30, 1998, more than $141
million
MANAGER: Harry Lange, since
inception; manager, various
Fidelity equity funds, 1992-
present; research director,
Fidelity Investments Far East,
1988-1992; joined Fidelity
in 1987
(checkmark)
INVESTMENT SUMMARY
TOP TEN STOCKS AS OF NOVEMBER
30, 1998
% OF FUND'S INVESTMENTS
Pegasus Systems, Inc. 3.8
Cytyc Corp. 3.5
Medpartners, Inc. 3.2
HMT Technology Corp. 3.1
Zonagen, Inc. 2.7
VeriSign, Inc. 2.6
Semtech Corp. 2.4
KLA-Tencor Corp. 2.3
Celestial Seasonings, Inc. 2.2
Teradyne, Inc. 2.2
TOP FIVE MARKET SECTORS AS OF
NOVEMBER 30, 1998
% OF FUND'S INVESTMENTS
TECHNOLOGY 31.1
HEALTH 11.4
SERVICES 10.9
CONSTRUCTION & REAL ESTATE 5.9
FINANCE 4.7
ASSET ALLOCATION (% OF FUND'S
INVESTMENTS)
AS OF NOVEMBER 30, 1998 *
Row: 1, Col: 1, Value: 12.8
Row: 1, Col: 2, Value: 87.2
Stocks 87.2%
Short-term
investments 12.8%
FOREIGN
INVESTMENTS 3.1%
*
INVESTMENTS NOVEMBER 30, 1998
Showing Percentage of Total Value of Investment in Securities
<TABLE>
<CAPTION>
<S> <C> <C> <C>
COMMON STOCKS - 87.2%
SHARES VALUE (NOTE 1)
BASIC INDUSTRIES - 0.6%
METALS & MINING - 0.4%
Cable Design Technology Corp. 30,000 $ 553,125
(a)
PAPER & FOREST PRODUCTS - 0.2%
Mercer International, Inc. 33,750 201,445
Pentair, Inc. 3,570 134,544
335,989
TOTAL BASIC INDUSTRIES 889,114
CONSTRUCTION & REAL ESTATE -
5.9%
BUILDING MATERIALS - 2.6%
Elcor Corp. 5,240 161,785
Lone Star Industries, Inc. 5,000 378,438
Owens-Corning 400 14,925
Rock of Ages Corp. Class A (a) 25,000 300,000
Southdown, Inc. 49,300 2,871,725
3,726,873
REAL ESTATE - 0.3%
Boardwalk Equities, Inc. (a) 16,900 190,711
Catellus Development Corp. (a) 13,990 196,734
387,445
REAL ESTATE INVESTMENT TRUSTS
- - 3.0%
Apartment Investment & 20,540 703,495
Management Co. Class A
CenterPoint PropertiesTrust. 11,820 401,880
Colonial Properties Trust 13,800 373,463
Duke Realty Investments, Inc. 29,580 671,096
Glenborough Realty Trust, 35,670 762,446
Inc.
Home Properties of N.Y., Inc. 15,643 385,209
Mack-Cali Realty Corp. 10,000 296,875
Patriot American Hospitality, 19,980 147,353
Inc. unit
Urban Shopping Centers, Inc. 14,930 490,824
4,232,641
TOTAL CONSTRUCTION & REAL 8,346,959
ESTATE
DURABLES - 3.2%
AUTOS, TIRES, & ACCESSORIES -
0.1%
Spartan Motors, Inc. 12,000 76,500
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
DURABLES - CONTINUED
CONSUMER ELECTRONICS - 0.6%
Fossil, Inc. (a) 32,200 $ 891,538
HOME FURNISHINGS - 0.2%
HON Industries, Inc. 9,310 221,113
TEXTILES & APPAREL - 2.3%
Galey & Lord, Inc. (a) 15,350 165,972
Liz Claiborne, Inc. 10,000 338,750
Quaker Fabric Corp. (a) 324,620 2,272,340
Stride Rite Corp. 5,400 47,925
Supreme International Corp. 39,600 425,700
(a)
3,250,687
TOTAL DURABLES 4,439,838
ENERGY - 1.5%
ENERGY SERVICES - 0.3%
Tidewater, Inc. 14,520 334,868
OIL & GAS - 1.2%
Cooper Cameron Corp. (a) 48,970 1,193,644
Oryx Energy Co. (a) 39,300 542,831
1,736,475
TOTAL ENERGY 2,071,343
FINANCE - 4.7%
BANKS - 0.8%
Centura Banks, Inc. 1,360 92,480
Westamerica Bancorp. 27,630 998,134
1,090,614
CREDIT & OTHER FINANCE - 0.3%
Investors Financial Services 300 16,875
Corp.
Long Beach Financial Corp. (a) 53,510 426,408
443,283
INSURANCE - 0.3%
Poe & Brown, Inc. 9,780 342,300
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
FINANCE - CONTINUED
SAVINGS & LOANS - 1.6%
Dime Bancorp, Inc. 55,970 $ 1,486,703
Washington Federal, Inc. 31,080 788,655
2,275,358
SECURITIES INDUSTRY - 1.7%
Everen Capital Corp. 30,000 735,000
Hambrecht & Quist Group (a) 50,000 1,212,500
Knight/Trimark Group, Inc. 30,000 474,375
Class A (a)
2,421,875
TOTAL FINANCE 6,573,430
HEALTH - 11.4%
DRUGS & PHARMACEUTICALS - 9.2%
Cytyc Corp. (a) 250,000 4,953,125
Medco Research, Inc. (a) 83,780 1,696,545
Sepracor, Inc. (a) 29,700 2,465,100
Zonagen, Inc. (a) 196,500 3,782,625
12,897,395
MEDICAL EQUIPMENT & SUPPLIES
- - 2.2%
ESC Medical Systems Ltd. (a) 255,350 2,681,175
Physiometrix, Inc. (a) 169,000 116,188
Respironics, Inc. (a) 20,000 377,500
3,174,863
TOTAL HEALTH 16,072,258
INDUSTRIAL MACHINERY &
EQUIPMENT - 3.5%
ELECTRICAL EQUIPMENT - 2.5%
RayoVac Corp. (a) 111,000 2,566,875
VWR Scientific Products Corp. 29,600 925,000
(a)
3,491,875
INDUSTRIAL MACHINERY &
EQUIPMENT - 1.0%
Compx International, Inc. (a) 17,490 438,343
PRI Automation, Inc. 38,200 916,800
1,355,143
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
INDUSTRIAL MACHINERY &
EQUIPMENT - CONTINUED
POLLUTION CONTROL - 0.0%
Waste Industries, Inc. (a) 5,000 $ 87,188
TOTAL INDUSTRIAL MACHINERY & 4,934,206
EQUIPMENT
MEDIA & LEISURE - 3.9%
BROADCASTING - 2.8%
Heftel Broadcasting Corp. 42,800 1,995,550
Class A (a)
Nielsen Media Research, Inc. 130,000 1,950,000
(a)
3,945,550
PUBLISHING - 0.7%
Harte Hanks Communications, 45,200 1,067,850
Inc.
RESTAURANTS - 0.4%
Brinker International, Inc. 20,000 508,750
(a)
TOTAL MEDIA & LEISURE 5,522,150
NONDURABLES - 2.7%
BEVERAGES - 2.2%
Celestial Seasonings, Inc. (a) 125,920 3,132,260
Mondavi (Robert) Corp. Class 500 18,313
A (a)
3,150,573
FOODS - 0.5%
Corn Products International, 24,090 676,026
Inc.
TOTAL NONDURABLES 3,826,599
PRECIOUS METALS - 0.9%
Getchell Gold Corp. (a) 74,300 1,216,663
RETAIL & WHOLESALE - 4.7%
APPAREL STORES - 1.0%
Chicos Fas, Inc. (a) 65,850 1,440,469
GENERAL MERCHANDISE STORES -
0.9%
Saks Holdings, Inc. (a) 46,692 1,284,030
RETAIL & WHOLESALE,
MISCELLANEOUS - 2.8%
Barbeques Galore Ltd. 50,000 375,000
sponsored ADR
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
RETAIL & WHOLESALE - CONTINUED
RETAIL & WHOLESALE,
MISCELLANEOUS - CONTINUED
Gadzooks, Inc. (a) 145,000 $ 1,069,375
Handleman Co. (a) 200,000 2,400,000
3,844,375
TOTAL RETAIL & WHOLESALE 6,568,874
SERVICES - 10.9%
ADVERTISING - 2.2%
CMG Information Services, 40,110 3,108,525
Inc. (a)
EDUCATIONAL SERVICES - 0.4%
Quest Education Corp. (a) 60,000 600,000
PRINTING - 1.4%
Valassis Communications, Inc. 43,610 1,869,779
(a)
SERVICES - 6.9%
ACNielsen Corp. (a) 60,000 1,653,750
APAC Teleservices, Inc. (a) 130,000 845,000
Day Runner, Inc. (a) 54,140 1,191,080
Medpartners, Inc. (a) 1,009,200 4,541,400
Modis Professional Services, 121,190 1,446,706
Inc. (a)
9,677,936
TOTAL SERVICES 15,256,240
TECHNOLOGY - 31.1%
COMMUNICATIONS EQUIPMENT - 0.3%
Plantronics, Inc. (a) 2,200 144,650
Xircom, Inc. (a) 9,400 283,763
428,413
COMPUTER SERVICES & SOFTWARE
- - 17.3%
Architel Systems Corp. (a) 35,800 420,339
Catalyst International, Inc. 25,000 253,125
(a)
E Trade Group, Inc. (a) 20,000 541,250
Earthlink Network, Inc. (a) 5,000 304,063
Electronics for Imaging, Inc. 9,000 241,313
(a)
FactSet Research Systems, 25,000 1,015,625
Inc. (a)
Fair, Isaac & Co., Inc. 34,460 1,387,015
Fundtech Ltd. 20,000 340,000
i2 Technologies, Inc. (a) 120,000 2,970,000
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TECHNOLOGY - CONTINUED
COMPUTER SERVICES & SOFTWARE
- - CONTINUED
Integrated Measurement 10,000 $ 106,250
Systems, Inc. (a)
Pegasus Systems, Inc. (a) 239,860 5,336,877
Rational Software Corp. (a) 99,600 2,259,675
RealNetworks, Inc. 20,300 771,400
Shared Medical Systems Corp. 20,000 1,047,500
Sportsline USA, Inc. 86,200 1,486,950
Symantec Corp. (a) 50,000 1,000,000
Titan Corp. (a) 122,730 659,674
TSI International Software 10,000 365,000
Ltd. (a)
VeriSign, Inc. (a) 90,000 3,611,250
Wind River Systems, Inc. (a) 5,350 249,444
24,366,750
COMPUTERS & OFFICE EQUIPMENT
- - 3.8%
HMT Technology Corp. (a) 386,180 4,392,798
Tech Data Corp. (a) 22,160 891,940
5,284,738
ELECTRONIC INSTRUMENTS - 5.7%
KLA-Tencor Corp. (a) 96,150 3,275,109
Kulicke & Soffa Industries, 31,230 532,862
Inc. (a)
Teradyne, Inc. (a) 97,380 3,122,246
Varian Associates, Inc. 26,300 1,040,494
7,970,711
ELECTRONICS - 4.0%
Microchip Technology, Inc. (a) 29,540 1,028,361
Microsemi Corp. (a) 14,840 178,080
PMC-Sierra, Inc. (a) 18,490 996,149
Semtech Corp. (a) 113,820 3,371,918
5,574,508
TOTAL TECHNOLOGY 43,625,120
TRANSPORTATION - 0.6%
AIR TRANSPORTATION - 0.0%
Travel Services 2,010 45,476
International, Inc. (a)
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TRANSPORTATION - CONTINUED
TRUCKING & FREIGHT - 0.6%
CNF Transportation, Inc. 6,180 $ 220,549
Swift Transportation Co., 25,470 558,748
Inc. (a)
779,297
TOTAL TRANSPORTATION 824,773
UTILITIES - 1.6%
TELEPHONE SERVICES - 1.6%
Davel Communications Group, 40,000 770,000
Inc. (a)
Global TeleSystems Group, 20,000 868,125
Inc. (a)
WinStar Communications, Inc. 20,000 557,500
(a)
2,195,625
TOTAL COMMON STOCKS 122,363,192
(Cost $106,006,210)
CASH EQUIVALENTS - 12.8%
MATURITY AMOUNT
Investments in repurchase $ 18,019,627 18,017,000
agreements (U.S. Treasury
obligations), in a joint
trading account at 5.25%,
dated 11/30/98 due 12/1/98
TOTAL INVESTMENT IN $ 140,380,192
SECURITIES - 100%
(Cost $124,023,210)
</TABLE>
LEGEND
(a) Non-income producing
INCOME TAX INFORMATION
At November 30, 1998, the aggregate cost of investment securities for
income tax purposes was $124,499,082. Net unrealized appreciation
aggregated $15,881,110, of which $18,293,676 related to appreciated
investment securities and $2,412,566 related to depreciated investment
securities.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1998
ASSETS
Investment in securities, at $ 140,380,192
value (including repurchase
agreements of $18,017,000)
(cost $124,023,210) - See
accompanying schedule
Cash 385,934
Receivable for investments 2,173,977
sold
Receivable for fund shares 5,063,183
sold
Dividends receivable 24,972
Prepaid expenses 57,252
TOTAL ASSETS 148,085,510
LIABILITIES
Payable for investments $ 6,250,639
purchased
Payable for fund shares 267,068
redeemed
Accrued management fee 60,239
Distribution fees payable 53,785
Other payables and accrued 78,905
expenses
TOTAL LIABILITIES 6,710,636
NET ASSETS $ 141,374,874
Net Assets consist of:
Paid in capital $ 124,877,132
Accumulated undistributed net 140,781
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 16,356,961
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS $ 141,374,874
STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
NOVEMBER 30, 1998
CALCULATION OF MAXIMUM $12.35
OFFERING PRICE CLASS A: NET
ASSET VALUE and redemption
price per share
($9,586,638 (divided by)
776,499 shares)
Maximum offering price per $13.10
share (100/94.25 of $12.35)
CLASS T: NET ASSET VALUE and $12.34
redemption price per share
($72,428,479 (divided by)
5,870,987 shares)
Maximum offering price per $12.79
share (100/96.50 of $12.34)
CLASS B: NET ASSET VALUE and $12.31
offering price per share
($24,344,488 (divided by)
1,977,398 shares) A
CLASS C: NET ASSET VALUE, and $12.34
offering price per share
($22,117,331 (divided by)
1,792,309 shares) A
INSTITUTIONAL CLASS: NET $12.35
ASSET VALUE, offering price
and redemption price per
share ($12,897,938 (divided
by) 1,044,581 shares)
A REDEMPTION PRICE PER-SHARE IS EQUAL TO NET ASSET VALUE LESS
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS
SEPTEMBER 9, 1998
(COMMENCEMENT OF OPERATIONS)
TO NOVEMBER 30, 1998
INVESTMENT INCOME $ 84,234
Dividends
Interest 95,431
TOTAL INCOME 179,665
EXPENSES
Management fee $ 104,572
Transfer agent fees 36,581
Distribution fees 80,694
Accounting fees and expenses 13,571
Non-interested trustees' 20
compensation
Custodian fees and expenses 7,805
Registration fees 79,364
Audit 22,011
Miscellaneous 1,003
Total expenses before 345,621
reductions
Expense reductions (67,497) 278,124
NET INVESTMENT INCOME (LOSS) (98,459)
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 239,208
Foreign currency transactions 32 239,240
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 16,356,982
Assets and liabilities in (21) 16,356,961
foreign currencies
NET GAIN (LOSS) 16,596,201
NET INCREASE (DECREASE) IN $ 16,497,742
NET ASSETS RESULTING FROM
OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
SEPTEMBER 9, 1998
(COMMENCEMENT OF OPERATIONS)
TO NOVEMBER 30, 1998
INCREASE (DECREASE) IN NET
ASSETS
Operations Net investment $ (98,459)
income (loss)
Net realized gain (loss) 239,240
Change in net unrealized 16,356,961
appreciation (depreciation)
NET INCREASE (DECREASE) IN 16,497,742
NET ASSETS RESULTING FROM
OPERATIONS
Share transactions - net 124,877,132
increase (decrease)
TOTAL INCREASE (DECREASE) 141,374,874
IN NET ASSETS
NET ASSETS
Beginning of period -
End of period $ 141,374,874
FINANCIAL HIGHLIGHTS - CLASS A
SEPTEMBER 9, 1998
(COMMENCEMENT OF OPERATIONS)
TO NOVEMBER 30,
1998
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 10.00
period
Income from Investment
Operations
Net investment income (loss) (.01)
E
Net realized and unrealized 2.36
gain (loss)
Total from investment 2.35
operations
Net asset value, end of period $ 12.35
TOTAL RETURN B, C, D 23.50%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 9,587
(000 omitted)
Ratio of expenses to average 1.75% A, F
net assets
Ratio of expenses to average 1.68% A, G
net assets after expense
reductions
Ratio of net investment (.40)% A
income (loss) to average net
assets
Portfolio turnover 204% A
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS).
D TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE.
E NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - CLASS T
SEPTEMBER 9, 1998
(COMMENCEMENT OF OPERATIONS)
TO NOVEMBER 30,
1998
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 10.00
period
Income from Investment
Operations
Net investment income (loss) (.02)
E
Net realized and unrealized 2.36
gain (loss)
Total from investment 2.34
operations
Net asset value, end of period $ 12.34
TOTAL RETURN B, C, D 23.40%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 72,428
(000 omitted)
Ratio of expenses to average 2.00% A, F
net assets
Ratio of expenses to average 1.93% A, G
net assets after expense
reductions
Ratio of net investment (.63)% A
income (loss) to average net
assets
Portfolio turnover 204% A
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS).
D TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE.
E NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - CLASS B
SEPTEMBER 9, 1998
(COMMENCEMENT OF OPERATIONS)
TO NOVEMBER 30,
1998
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 10.00
period
Income from Investment
Operations
Net investment income (loss) (.03)
E
Net realized and unrealized 2.34
gain (loss)
Total from investment 2.31
operations
Net asset value, end of period $ 12.31
TOTAL RETURN B, C, D 23.10%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 24,344
(000 omitted)
Ratio of expenses to average 2.50% A, F
net assets
Ratio of expenses to average 2.43% A, G
net assets after expense
reductions
Ratio of net investment (1.15)% A
income (loss) to average net
assets
Portfolio turnover 204% A
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS).
D TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE.
E NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - CLASS C
SEPTEMBER 9, 1998
(COMMENCEMENT OF OPERATIONS)
TO NOVEMBER 30,
1998
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 10.00
period
Income from Investment
Operations
Net investment income (loss) (.03)
E
Net realized and unrealized 2.37
gain (loss)
Total from investment 2.34
operations
Net asset value, end of period $ 12.34
TOTAL RETURN B, C, D 23.40%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 22,117
(000 omitted)
Ratio of expenses to average 2.50% A, F
net assets
Ratio of expenses to average 2.44% A, G
net assets after expense
reductions
Ratio of net investment (1.15)% A
income (loss) to average net
assets
Portfolio turnover 204% A
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS).
D TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE.
E NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
SEPTEMBER 9, 1998
(COMMENCEMENT OF OPERATIONS)
TO NOVEMBER 30,
1998
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 10.00
period
Income from Investment
Operations
Net investment income (loss) -
D
Net realized and unrealized 2.35
gain (loss)
Total from investment 2.35
operations
Net asset value, end of period $ 12.35
TOTAL RETURN B, C 23.50%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 12,898
(000 omitted)
Ratio of expenses to average 1.50% A, E
net assets
Ratio of expenses to average 1.42% A, F
net assets after expense
reductions
Ratio of net investment (.15)% A
income (loss) to average net
assets
Portfolio turnover 204% A
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS).
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1998
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Small Cap Fund(the fund) is a fund of Fidelity
Advisor Series I (the trust) and is authorized to issue an unlimited
number of shares. The trust is registered under the Investment Company
Act of 1940, as amended (the 1940 Act), as an open-end management
investment company organized as a Massachusetts business trust.
The fund offers Class A, Class T, Class B, Class C, and Institutional
Class shares, each of which has equal rights as to assets and voting
privileges. Each class has exclusive voting rights with respect to
matters that affect that class. Class B shares will automatically
convert to Class A shares after a holding period of 7 years from the
initial date of purchase. Investment income, realized and unrealized
capital gains and losses, the common expenses of the fund, and certain
fund-level expense reductions, if any, are allocated on a pro rata
basis to each class based on the relative net assets of each class to
the total net assets of the fund. Each class of shares differs in its
respective distribution, transfer agent, and certain other
class-specific fees, expenses, and expense reductions.
The financial statements have been prepared in conformity with
generally accepted accounting principles which require management to
make certain estimates and assumptions at the date of the financial
statements. The following summarizes the significant accounting
policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Securities for which exchange
quotations are not readily available (and in certain cases debt
securities which trade on an exchange) are valued primarily using
dealer-supplied valuations or at their fair value as determined in
good faith under consistently applied procedures under the general
supervision of the Board of Trustees. Short-term securities with
remaining maturities of sixty days or less for which quotations are
not readily available are valued at amortized cost or original cost
plus accrued interest, both of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases
and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
date and
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
FOREIGN CURRENCY TRANSLATION - CONTINUED
settlement on purchases and sales of securities. The effects of
changes in foreign currency exchange rates on investments in
securities are included with the net realized and unrealized gain or
loss on investment securities.
INCOME TAXES. The fund intends to qualify as a regulated investment
company under Subchapter M of the Internal Revenue Code. By so
qualifying, the fund will not be subject to income taxes to the extent
that it distributes substantially all of its taxable income for its
fiscal year. The schedule of investments includes information
regarding income taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend
date, except certain dividends from foreign securities where the
ex-dividend date may have passed, are recorded as soon as the fund is
informed of the ex-dividend date. Non-cash dividends included in
dividend income, if any, are recorded at the fair market value of the
securities received. Interest income is accrued as earned. Investment
income is recorded net of foreign taxes withheld where recovery of
such taxes is uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
PREPAID EXPENSES. Fidelity Management & Research Company (FMR) bears
all organizational expenses except for registering and qualifying each
class and shares of each class for distribution under federal and
state securities law. These expenses are borne by the fund and
amortized over one year.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date. Income dividends and capital gain distributions are
declared separately for each class.
Income and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. These differences may result in distribution
reclassifications.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Accumulated undistributed net realized gain (loss) on investments and
foreign currency transactions may include temporary book and tax basis
differences which will reverse in a subsequent period. Any taxable
income or gain remaining at fiscal year end is distributed in the
following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the contracts'
terms. The U.S. dollar value of foreign currency contracts is
determined using contractual currency exchange rates established at
the time of each trade.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with
other affiliated entities of FMR, may transfer uninvested cash
balances into one or more joint trading accounts. These balances are
invested in one or more repurchase agreements for U.S. Treasury or
Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are
marked-to-market daily and maintained at a value at least equal to the
principal amount of the repurchase agreement (including accrued
interest). FMR, the fund's investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $131,914,480 and $26,147,478, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus a
fixed individual fund fee rate applied to the average net assets of
the fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds advised by FMR. The rates ranged from .2500% to .5200% for the
period. The annual individual fund fee rate is .45%. In the event that
these rates were lower than the contractual rates in effect during the
period, FMR voluntarily implemented the above rates, as they resulted
in the same or a lower management fee. For the period, the management
fee was equivalent to an annualized rate of .75% of average net
assets.
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the
1940 Act, the Trustees have adopted separate distribution plans with
respect to each class of shares (collectively referred to as "the
Plans"). Under certain of the Plans, the class pays Fidelity
Distributors Corporation (FDC), an affiliate of FMR, a distribution
and service fee. A portion of this fee may be reallowed to securities
dealers, banks and other financial
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
DISTRIBUTION AND SERVICE PLAN - CONTINUED
institutions for the distribution of each class of shares and
providing shareholder support services. For the period, this fee was
based on the following annual rates of the average net assets of each
applicable class:
CLASS A .25%
CLASS T .50%
CLASS B 1.00%*
CLASS C 1.00%*
* .75% REPRESENTS A DISTRIBUTION FEE AND .25% REPRESENTS A SHAREHOLDER
SERVICE FEE.
For the period, each class paid FDC the following amounts, a portion
of which was retained by FDC:
PAID TO FDC RETAINED BY FDC
CLASS A $ 2,413 $ -
CLASS T 34,861 58
CLASS B 21,796 16,347
CLASS C 21,624 21,624
$ 80,694 $ 38,029
Under the Plans, FMR or FDC may use its resources to pay
administrative and promotional expenses related to the sale of each
class' shares. The Plans also authorize payments to third parties that
assist in the sale of each class' shares or render shareholder support
services. For the period, FMR made no payments either directly or
through FDC to third parties for the fiscal year ended 1998.
SALES LOAD. FDC receives a front-end sales charge of up to 5.75% for
selling Class A shares, and 3.50% for selling Class T shares of the
fund. FDC receives the proceeds of contingent deferred sales charges
levied on Class B share redemptions occurring within six years of
purchase and Class C share redemptions occurring within one year of
purchase. Contingent deferred sales charges are based on declining
rates ranging from 5% to 1% for Class B and 1% for Class C, of the
lesser of the cost of shares at the initial date of purchase or the
net asset value of the redeemed shares, excluding any reinvested
dividends and capital gains. In addition, purchases of Class A and
Class T shares that were subject to a finder's fee bear a contingent
deferred sales charge on
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
SALES LOAD - CONTINUED
assets that do not remain in the fund for at least one year. The Class
A and Class T contingent deferred sales charge is based on 0.25% of
the lesser of the cost of shares at the initial date of purchase or
the net asset value of the redeemed shares, excluding any reinvested
dividends and capital gains. A portion of the sales charges paid to
FDC are paid to securities dealers, banks and other financial
institutions.
For the period, sales charge amounts paid to and retained by FDC were
as follows:
PAID TO FDC RETAINED BY FDC
CLASS A $ 59,118 $ 42,784
CLASS T 153,317 75,134
CLASS B 5,341 5,341*
CLASS C 1,436 1,436*
$ 219,212 $ 124,695
* WHEN CLASS B AND CLASS C SHARES ARE INITIALLY SOLD, FDC PAYS
COMMISSIONS FROM ITS OWN RESOURCES TO SECURITIES DEALERS, BANKS, AND
OTHER FINANCIAL INSTITUTIONS THROUGH WHICH THE SALES ARE MADE.
TRANSFER AGENT FEES. Fidelity Investments Institutional Operations
Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend
disbursing and shareholder servicing agent for each class of the fund.
FIIOC receives account fees and asset-based fees that vary according
to the account size and type of account of the shareholders of the
respective classes of the fund. FIIOC pays for typesetting, printing
and mailing of all shareholder reports, except proxy statements. For
the period, the following amounts were paid to FIIOC:
AMOUNT % OF AVERAGE NET ASSETS
CLASS A $ 2,702 .29 *
CLASS T 17,794 .26 *
CLASS B 6,798 .32 *
CLASS C 5,000 .24 *
INSTITUTIONAL CLASS 4,287 .23 *
$ 36,581
* ANNUALIZED
ACCOUNTING FEES. Fidelity Service Company, Inc. (FSC), an affiliate of
FMR, maintains the fund's accounting records. The fee is based on the
level of average net assets for the month plus out-of-pocket expenses.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $41,249 for the
period.
5. EXPENSE REDUCTIONS.
FMR voluntarily agreed to reimburse operating expenses (excluding
interest, taxes, brokerage commissions and extraordinary expenses)
above the following annual rates or range of annual rates of average
net assets for each of the following classes:
FMR EXPENSE LIMITATIONS REIMBURSEMENT
CLASS A 1.75% $ 4,636
CLASS T 2.00% 26,109
CLASS B 2.50% 9,874
CLASS C 2.50% 8,425
INSTITUTIONAL CLASS 1.50% 8,978
$ 58,022
FMR has also directed certain portfolio trades to brokers who paid a
portion of the fund's expenses. For the period, the fund's expenses
were reduced by $9,065 under this arrangement.
In addition, the fund has entered into arrangements with its custodian
and each class' transfer agent whereby credits realized as a result of
uninvested cash balances were used to reduce a portion of expenses.
During the period, the fund's custodian fees were reduced by $196
under the custodian arrangement, and each applicable class' expenses
were reduced as follows under the transfer agent arrangements:
TRANSFER AGENT CREDITS
CLASS T $ 214
6. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
SHARES DOLLARS
SEPTEMBER 9, 1998 SEPTEMBER 9, 1998
(COMMENCEMENT OF OPERATIONS) (COMMENCEMENT OF OPERATIONS)
TO NOVEMBER 30, TO NOVEMBER 30,
1998 1998
CLASS A Shares sold 803,382 $ 8,780,684
Shares redeemed (26,883) (306,364)
Net increase (decrease) 776,499 $ 8,474,320
CLASS T Shares sold 5,958,472 $ 65,079,821
Shares redeemed (87,485) (935,799)
Net increase (decrease) 5,870,987 $ 64,144,022
CLASS B Shares sold 2,004,383 $ 22,156,184
Shares redeemed (26,985) (321,811)
Net increase (decrease) 1,977,398 $ 21,834,373
CLASS C Shares sold 1,833,835 $ 19,957,700
Shares redeemed (41,526) (489,364)
Net increase (decrease) 1,792,309 $ 19,468,336
INSTITUTIONAL CLASS Shares 1,065,454 $ 11,180,375
sold
Shares redeemed (20,873) (224,294)
Net increase (decrease) 1,044,581 $ 10,956,081
</TABLE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Advisor Series I and the Shareholders of
Fidelity Advisor Small Cap Fund:
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of
Fidelity Advisor Small Cap Fund (a fund of Fidelity Advisor Series I)
at November 30, 1998, and the results of its operations, the changes
in its net assets and the financial highlights for the period
indicated, in conformity with generally accepted accounting
principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the
responsibility of the Fidelity Advisor Small Cap Fund's management;
our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit of these
financial statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit, which
included confirmation of securities at November 30, 1998 by
correspondence with the custodian and brokers, provides a reasonable
basis for the opinion expressed above.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
January 13, 1999
DISTRIBUTIONS
The Board of Trustees of Fidelity Advisor Small Cap Fund voted to pay
to shareholders of record at the opening of business on record date,
the following distributions derived from capital gains realized from
sales of portfolio securities:
PAY DATE RECORD DATE CAPITAL GAINS
Institutional Class 1/11/99 1/8/99 $.05
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.)
Inc., London, England
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Abigail P. Johnson, Vice President
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
* INDEPENDENT TRUSTEES
ADVISORY BOARD
J. Gary Burkhead
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA
CUSTODIAN
State Street Bank and Trust Company
Quincy, MA
FOCUS FUNDS
Fidelity Advisor Consumer
Industries Fund
Fidelity Advisor Cyclical
Industries Fund
Fidelity Advisor Financial
Services Fund
Fidelity Advisor Health Care Fund
Fidelity Advisor Natural
Resources Fund
Fidelity Advisor Technology Fund
GROWTH FUNDS
Fidelity Advisor Latin America Fund
Fidelity Advisor Japan Fund
Fidelity Advisor Europe Capital Appreciation Fund
Fidelity Advisor International Capital Appreciation Fund
Fidelity Advisor Overseas Fund
Fidelity Advisor Diversified International Fund
Fidelity Advisor Global Equity Fund
Fidelity Advisor TechnoQuant
Growth Fund
SM
Fidelity Advisor Small Cap Fund
Fidelity Advisor Strategic
Opportunities Fund
Fidelity Advisor Mid Cap Fund
Fidelity Advisor Retirement
Growth Fund
Fidelity Advisor Equity Growth Fund
Fidelity Advisor Large Cap Fund
Fidelity Advisor Dividend Growth Fund
Fidelity Advisor Growth
Opportunities Fund
Fidelity Advisor Utilities Growth Fund
GROWTH AND INCOME FUNDS
Fidelity Advisor Growth & Income Fund
Fidelity Advisor Equity Income Fund
Fidelity Advisor Asset Allocation Fund
Fidelity Advisor Balanced Fund
TAXABLE INCOME FUNDS
Fidelity Advisor Emerging Markets Income Fund
Fidelity Advisor High Yield Fund
Fidelity Advisor Strategic Income Fund
Fidelity Advisor Mortgage
Securities Fund
Fidelity Advisor Government Investment Fund
Fidelity Advisor Intermediate Bond Fund
Fidelity Advisor Short Fixed-Income Fund
MUNICIPAL FUNDS
Fidelity Advisor Municipal Income Fund
Fidelity Advisor Intermediate Municipal Income Fund
MONEY MARKET FUNDS
Prime Fund
Treasury Fund
Tax-Exempt Fund
(registered trademark)
(2_FIDELITY_LOGOS)FIDELITY ADVISOR
(registered trademark)
TECHNOQUANTGROWTH
SM
FUND - CLASS A, CLASS T, CLASS B AND CLASS C
ANNUAL REPORT
NOVEMBER 30, 1998
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over
time.
FUND TALK 12 The manager's review of fund
performance, strategy and
outlook.
INVESTMENT CHANGES 15 A summary of major shifts in
the fund's investments over
the past six months.
INVESTMENTS 16 A complete list of the fund's
investments with their
market values.
FINANCIAL STATEMENTS 21 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 30 Notes to the financial
statements.
REPORT OF INDEPENDENT 39 The auditors' opinion.
ACCOUNTANTS
DISTRIBUTIONS 40
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION
OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS
IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT
INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY ADVISOR FUND, INCLUDING CHARGES
AND EXPENSES, CONTACT YOUR
INVESTMENT PROFESSIONAL FOR A FREE PROSPECTUS. READ IT CAREFULLY
BEFORE YOU INVEST OR SEND MONEY.
Standard & Poor's, S&P and S&P 500 are registered service marks of The
McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity
Distributors Corporation.
Other third party marks appearing herein are the property of their
respective owners.
All other marks appearing herein are registered or unregistered
trademarks or service marks of FMR Corp. or an affiliated company.
This report is printed on recycled paper using soy-based inks.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
The month of November proved to be a strong one for the stock and bond
markets. The Dow Jones Industrial Average reached a record high.
Merger activity, which had lulled during the summer correction, has
increased significantly. Small-cap stocks posted their third
consecutive month of positive returns, as did emerging markets. While
bond returns generally were not at the levels of their equity
counterparts, they were mostly positive nonetheless.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will
greatly reduce your vulnerability to any single decline. We know from
experience, for example, that stock prices have gone up over longer
periods of time, have significantly outperformed other types of
investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through
diversification. A stock mutual fund, for instance, is already
diversified, because it invests in many different companies. You can
increase your diversification further by investing in a number of
different stock funds, or in such other investment categories as
bonds. If you have a short investment time horizon, you might want to
consider moving some of your investment into a money market fund,
which seeks income and a stable share price by investing in
high-quality, short-term investments. Of course, it's important to
remember that there is no assurance that a money market fund will
achieve its goal of maintaining a stable net asset value of $1.00 per
share, and that these types of funds are neither insured nor
guaranteed by any agency of the U.S. government.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases. Of course, you should
consider your financial ability to continue your purchases through
periods of low price levels before undertaking such a strategy.
Remember to contact your investment professional if you need help with
your investments.
Best regards,
Edward C. Johnson 3d
FIDELITY ADVISOR TECHNOQUANT GROWTH FUND - CLASS A
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can
look at the total percentage change in value, the average annual
percentage change or the growth of a hypothetical $10,000 investment.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). If Fidelity had not reimbursed certain class expenses, the
life of fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR LIFE OF FUND
1998
FIDELITY ADV TECHNOQUANT 6.53% 21.23%
GROWTH - CL A
FIDELITY ADV TECHNOQUANT 0.40% 14.26%
GROWTH - CL A (INCL. 5.75%
SALES CHARGE)
S&P 500 (registered trademark) 23.66% 62.13%
Capital Appreciation Funds 8.48% n/a
Average
CUMULATIVE TOTAL RETURNS show Class A's performance in percentage
terms over a set period - in this case, one year or since the fund
started on December 31, 1996. For example, if you had invested $1,000
in a fund that had a 5% return over the past year, the value of your
investment would be $1,050. You can compare Class A's returns to those
of the Standard & Poor's 500 Index - a market capitalization-weighted
index of common stocks. To measure how Class A's performance stacked
up against its peers, you can compare it to the capital appreciation
funds average, which reflects the performance of mutual funds with
similar objectives tracked by Lipper Analytical Services, Inc. The
past one year average represents a peer group of 237 mutual funds.
These benchmarks include reinvested dividends and capital gains, if
any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR LIFE OF FUND
1998
FIDELITY ADV TECHNOQUANT 6.53% 10.57%
GROWTH - CL A
FIDELITY ADV TECHNOQUANT 0.40% 7.20%
GROWTH - CL A (INCL. 5.75%
SALES CHARGE)
S&P 500 23.66% 28.68%
Capital Appreciation Funds 8.48% n/a
Average
AVERAGE ANNUAL TOTAL RETURNS take Class A's cumulative return and show
you what would have happened if Class A had performed at a constant
rate each year.
$10,000 OVER LIFE OF FUND
FA TechnoQuant Growth - A S&P 500
00267 SP001
1996/12/31 9425.00 10000.00
1997/01/31 9698.33 10624.80
1997/02/28 9010.30 10708.10
1997/03/31 8557.90 10268.10
1997/04/30 8671.00 10881.11
1997/05/31 9425.00 11543.55
1997/06/30 9839.70 12060.70
1997/07/31 10819.90 13020.37
1997/08/31 10857.60 12290.97
1997/09/30 11526.78 12964.15
1997/10/31 10961.28 12531.14
1997/11/30 10725.65 13111.21
1997/12/31 10567.32 13336.33
1998/01/31 10411.26 13483.83
1998/02/28 11230.89 14456.28
1998/03/31 11777.32 15196.59
1998/04/30 11699.26 15349.47
1998/05/31 11133.32 15085.61
1998/06/30 11299.20 15698.39
1998/07/31 11191.86 15531.20
1998/08/31 9728.24 13285.70
1998/09/30 10362.48 14136.78
1998/10/31 10840.59 15286.67
1998/11/30 11426.05 16213.19
IMATRL PRASUN SHR__CHT 19981130 19981210 103614 R00000000000026
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor TechnoQuant Growth Fund - Class A on
December 31, 1996, when the fund started, and the current 5.75% sales
charge was paid. As the chart shows, by November 30, 1998, the value
of the investment would have grown to $11,426 - a 14.26% increase on
the initial investment. For comparison, look at how the Standard &
Poor's 500 Index did over the same period. With dividends and capital
gains, if any, reinvested, the same $10,000 investment would have
grown to $16,213 - a 62.13% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
long-term growth and
short-term volatility. In turn, the
share price and return of a
fund that invests in stocks will
vary. That means if you sell
your shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
FIDELITY ADVISOR TECHNOQUANT GROWTH FUND - CLASS T
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can
look at the total percentage change in value, the average annual
percentage change or the growth of a hypothetical $10,000 investment.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). If Fidelity had not reimbursed certain class expenses, the
life of fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR LIFE OF FUND
1998
FIDELITY ADV TECHNOQUANT 6.35% 20.82%
GROWTH - CL T
FIDELITY ADV TECHNOQUANT 2.63% 16.59%
GROWTH - CL T (INCL. 3.50%
SALES CHARGE)
S&P 500 23.66% 62.13%
Capital Appreciation Funds 8.48% n/a
Average
CUMULATIVE TOTAL RETURNS show Class T's performance in percentage
terms over a set period - in this case, one year or since the fund
started on December 31, 1996. For example, if you had invested $1,000
in a fund that had a 5% return over the past year, the value of your
investment would be $1,050. You can compare Class T's returns to those
of the Standard & Poor's 500 Index - a market capitalization-weighted
index of common stocks. To measure how Class T's performance stacked
up against its peers, you can compare it to the capital appreciation
funds average, which reflects the performance of mutual funds with
similar objectives tracked by Lipper Analytical Services, Inc. The
past one year average represents a peer group of 237 mutual funds.
These benchmarks include reinvested dividends and capital gains, if
any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR LIFE OF FUND
1998
FIDELITY ADV TECHNOQUANT 6.35% 10.37%
GROWTH - CL T
FIDELITY ADV TECHNOQUANT 2.63% 8.34%
GROWTH - CL T (INCL. 3.50%
SALES CHARGE)
S&P 500 23.66% 28.68%
Capital Appreciation Funds 8.48% n/a
Average
AVERAGE ANNUAL TOTAL RETURNS take Class T's cumulative return and show
you what would have happened if Class T had performed at a constant
rate each year.
$10,000 OVER LIFE OF FUND
FA TechnoQuant Growth - T S&P 500
00269 SP001
1996/12/31 9650.00 10000.00
1997/01/31 9929.85 10624.80
1997/02/28 9215.75 10708.10
1997/03/31 8752.55 10268.10
1997/04/30 8868.35 10881.11
1997/05/31 9640.35 11543.55
1997/06/30 10064.95 12060.70
1997/07/31 11058.90 13020.37
1997/08/31 11097.50 12290.97
1997/09/30 11773.00 12964.15
1997/10/31 11194.00 12531.14
1997/11/30 10962.40 13111.21
1997/12/31 10790.34 13336.33
1998/01/31 10630.69 13483.83
1998/02/28 11469.16 14456.28
1998/03/31 12028.15 15196.59
1998/04/30 11948.29 15349.47
1998/05/31 11369.34 15085.61
1998/06/30 11529.05 15698.39
1998/07/31 11429.24 15531.20
1998/08/31 9931.96 13285.70
1998/09/30 10570.80 14136.78
1998/10/31 11059.91 15286.67
1998/11/30 11658.82 16213.19
IMATRL PRASUN SHR__CHT 19981130 19981217 142243 R00000000000026
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor TechnoQuant Growth Fund - Class T on
December 31, 1996, when the fund started, and the current 3.50% sales
charge was paid. As the chart shows, by November 30, 1998, the value
of the investment would have grown to $11,659 - a 16.59% increase on
the initial investment. For comparison, look at how the Standard &
Poor's 500 Index did over the same period. With dividends and capital
gains, if any, reinvested, the same $10,000 investment would have
grown to $16,213 - a 62.13% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
long-term growth and
short-term volatility. In turn, the
share price and return of a
fund that invests in stocks will
vary. That means if you sell
your shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
FIDELITY ADVISOR TECHNOQUANT GROWTH FUND - CLASS B
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can
look at the total percentage change in value, the average annual
percentage change or the growth of a hypothetical $10,000 investment.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). Class B's contingent deferred sales charge included in the
past one year and life of fund total return figures are 5% and 4%,
respectively. If Fidelity had not reimbursed certain class expenses,
the life of fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR LIFE OF FUND
1998
FIDELITY ADV TECHNOQUANT 5.80% 19.66%
GROWTH - CL B
FIDELITY ADV TECHNOQUANT 0.80% 15.66%
GROWTH - CL B (INCL.
CONTINGENT DEFERRED SALES
CHARGE)
S&P 500 23.66% 62.13%
Capital Appreciation Funds 8.48% n/a
Average
CUMULATIVE TOTAL RETURNS show Class B's performance in percentage
terms over a set period - in this case, one year or since the fund
started on December 31, 1996. For example, if you had invested $1,000
in a fund that had a 5% return over the past year, the value of your
investment would be $1,050. You can compare Class B's returns to those
of the Standard & Poor's 500 Index - a market capitalization-weighted
index of common stocks. To measure how Class B's performance stacked
up against its peers, you can compare it to the capital appreciation
funds average, which reflects the performance of mutual funds with
similar objectives tracked by Lipper Analytical Services, Inc. The
past one year average represents a peer group of 237 mutual funds.
These benchmarks include reinvested dividends and capital gains, if
any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR LIFE OF FUND
1998
FIDELITY ADV TECHNOQUANT 5.80% 9.82%
GROWTH - CL B
FIDELITY ADV TECHNOQUANT 0.80% 7.89%
GROWTH - CL B (INCL.
CONTINGENT DEFERRED SALES
CHARGE)
S&P 500 23.66% 28.68%
Capital Appreciation Funds 8.48% n/a
Average
AVERAGE ANNUAL TOTAL RETURNS take Class B's cumulative return and show
you what would have happened if Class B had performed at a constant
rate each year.
$10,000 OVER LIFE OF FUND
FA TechnoQuant Growth - B S&P 500
00268 SP001
1996/12/31 10000.00 10000.00
1997/01/31 10290.00 10624.80
1997/02/28 9540.00 10708.10
1997/03/31 9060.00 10268.10
1997/04/30 9170.00 10881.11
1997/05/31 9960.00 11543.55
1997/06/30 10400.00 12060.70
1997/07/31 11420.00 13020.37
1997/08/31 11460.00 12290.97
1997/09/30 12160.00 12964.15
1997/10/31 11550.00 12531.14
1997/11/30 11310.00 13111.21
1997/12/31 11130.72 13336.33
1998/01/31 10955.42 13483.83
1998/02/28 11821.95 14456.28
1998/03/31 12389.32 15196.59
1998/04/30 12306.79 15349.47
1998/05/31 11698.16 15085.61
1998/06/30 11863.21 15698.39
1998/07/31 11749.74 15531.20
1998/08/31 10202.36 13285.70
1998/09/30 10862.57 14136.78
1998/10/31 11357.73 15286.67
1998/11/30 11566.00 16213.19
IMATRL PRASUN SHR__CHT 19981130 19981223 155012 R00000000000026
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor TechnoQuant Growth Fund - Class B on
December 31, 1996, when the fund started. As the chart shows, by
November 30, 1998, the value of the investment, including the effect
of the applicable contingent deferred sales charge, would have grown
to $11,566 - a 15.66% increase on the initial investment. For
comparison, look at how the Standard & Poor's 500 Index did over the
same period. With dividends and capital gains, if any, reinvested, the
same $10,000 investment would have grown to $16,213 - a 62.13%
increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
long-term growth and
short-term volatility. In turn, the
share price and return of a
fund that invests in stocks will
vary. That means if you sell
your shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
FIDELITY ADVISOR TECHNOQUANT GROWTH FUND - CLASS C
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can
look at the total percentage change in value, the average annual
percentage change or the growth of a hypothetical $10,000 investment.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). The initial offering of Class C shares took place on November
3, 1997. Class C shares bear a 1.00% 12b-1 fee that is reflected in
returns after November 3, 1997. Returns prior to November 3, 1997 are
those of Class B shares and reflect Class B shares' 1.00% 12b-1 fee.
Class C shares' contingent deferred sales charge included in the past
one year total return figure is 1.00%. If Fidelity had not reimbursed
certain class expenses, the total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR LIFE OF FUND
1998
FIDELITY ADV TECHNOQUANT 5.62% 19.48%
GROWTH - CL C
FIDELITY ADV TECHNOQUANT 4.62% 19.48%
GROWTH - CL C (INCL.
CONTINGENT DEFERRED SALES
CHARGE)
S&P 500 23.66% 62.13%
Capital Appreciation Funds 8.48% n/a
Average
CUMULATIVE TOTAL RETURNS show Class C's performance in percentage
terms over a set period - in this case, one year or since the fund
started on December 31, 1996. For example, if you had invested $1,000
in a fund that had a 5% return over the past year, the value of your
investment would be $1,050. You can compare Class C's returns to those
of the Standard & Poor's 500 Index - a market capitalization-weighted
index of common stocks. To measure how Class C's performance stacked
up against its peers, you can compare it to the capital appreciation
funds average, which reflects the performance of mutual funds with
similar objectives tracked by Lipper Analytical Services, Inc. The
past one year average represents a peer group of 237 mutual funds.
These benchmarks include reinvested dividends and capital gains, if
any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR LIFE OF FUND
1998
FIDELITY ADV TECHNOQUANT 5.62% 9.73%
GROWTH - CL C
FIDELITY ADV TECHNOQUANT 4.62% 9.73%
GROWTH - CL C (INCL.
CONTINGENT DEFERRED SALES
CHARGE)
S&P 500 23.66% 28.68%
Capital Appreciation Funds 8.48% n/a
Average
AVERAGE ANNUAL TOTAL RETURNS take Class C's cumulative return and show
you what would have happened if Class C had performed at a constant
rate each year.
$10,000 OVER LIFE OF FUND
FA TechnoQuant Growth - C S&P 500
00486 SP001
1996/12/31 10000.00 10000.00
1997/01/31 10290.00 10624.80
1997/02/28 9540.00 10708.10
1997/03/31 9060.00 10268.10
1997/04/30 9170.00 10881.11
1997/05/31 9960.00 11543.55
1997/06/30 10400.00 12060.70
1997/07/31 11420.00 13020.37
1997/08/31 11460.00 12290.97
1997/09/30 12160.00 12964.15
1997/10/31 11550.00 12531.14
1997/11/30 11312.07 13111.21
1997/12/31 11134.52 13336.33
1998/01/31 10969.77 13483.83
1998/02/28 11824.69 14456.28
1998/03/31 12391.21 15196.59
1998/04/30 12298.51 15349.47
1998/05/31 11690.79 15085.61
1998/06/30 11855.60 15698.39
1998/07/31 11742.29 15531.20
1998/08/31 10197.25 13285.70
1998/09/30 10846.17 14136.78
1998/10/31 11350.88 15286.67
1998/11/30 11948.30 16213.19
IMATRL PRASUN SHR__CHT 19981130 19981217 142339 R00000000000026
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor TechnoQuant Growth Fund - Class C on
December 31, 1996, when the fund started. As the chart shows, by
November 30, 1998, the value of the investment would have grown to
$11,948 - a 19.48% increase on the initial investment. For comparison,
look at how the Standard & Poor's 500 Index did over the same period.
With dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $16,213 - a 62.13% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
long-term growth and
short-term volatility. In turn, the
share price and return of a
fund that invests in stocks will
vary. That means if you sell
your shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
When the final bell of the U.S. stock
market sounded on Monday,
November 23, 1998, the Dow
Jones Industrial Average stood at a
record high of 9374.27, serving
notice that the bleak economic
outlook from just a few short months
earlier would not keep positive
investor sentiment down. For the
12-month period ending November
30, 1998, the Dow - an index of
30 blue-chip stocks - returned
18.56%. What caused the
turnaround from the doldrums of
equity performance during the
summer and early fall? A variety of
factors: The economic problems in
Russia, Brazil and other emerging
markets began to dissipate; Asian
markets began to rebound; and,
perhaps most importantly, three
interest-rate cuts late in the period
by the Federal Reserve Board
helped stem the tide of a slowing
U.S. economy. All these factors
culminated in the Dow reaching its
record high late in November, a
peak that outpaced the previous
record set in July by nearly 40 points.
Small-cap stock performance was
still a far cry behind their large-cap
brethren. For the period, the Russell
2000 - a popular measure of
small-cap stock performance -
returned -6.62%, significantly
trailing the large-cap weighted
Standard & Poor's 500 Index's
return of 23.66%. Despite the late
rally in the equity market, this kind
of volatility has characterized the
entire year, and when it will level off
is impossible to predict.
An interview with Tim Krochuk, Portfolio Manager of Fidelity Advisor
TechnoQuant Growth Fund
Q. HOW DID THE FUND PERFORM, TIM?
A. For the 12 months that ended November 30, 1998, the fund's Class A,
Class T, Class B, and Class C shares returned 6.53%, 6.35%, 5.80% and
5.62%, respectively. The Standard & Poor's 500 Index returned 23.66%
and the capital appreciation funds average tracked by Lipper
Analytical Services returned 8.48% for the same time period.
Q. WHY DID THE FUND TRAIL ITS PEER GROUP AND THE S&P 500 DURING THE
PERIOD?
A. During the period, collapsing economic and monetary standards in
Asia were followed by similar problems in Russia and other emerging
markets. These events caused a global flight to quality. Investors
flocked to the household names of the biggest large-capitalization
stocks that provided both significant liquidity and an aura of safety.
My quantitative models had the median market cap of the fund much
higher than the peer group for most of 1998. In June, my models
suggested a shift of even more assets into large-cap stocks. Relative
to other capital appreciation funds, performance benefited from moving
the portfolio's focus towards larger stocks. While the fund slightly
underperformed its peer group for the year, its relative performance
improved significantly during the last six months because many of the
funds in the Lipper capital appreciation group maintained their
emphasis on smaller- and mid-cap stocks. Specifically, during the past
six months that ended November 30, 1998, the fund's Class A, Class T,
Class B and Class C shares returned 2.63%, 2.55%, 2.29% and 2.20%,
respectively. This compares favorably to a return of -0.40% for the
capital appreciation funds average. Relative to the S&P 500, however,
the fund underperformed because of poor breadth in the S&P 500
advance. The 30 largest stocks in the S&P 500 accounted for more than
60% of its return during this period. Since most active portfolio
managers tend to focus more on small- and mid-cap stocks, and since
most portfolios consist of more than 30 stocks, it should be clear why
so many managers had a difficult 12-month period.
Q. WHAT FACTORS INFLUENCED PERFORMANCE?
A. Overall, the biggest contributor to the fund's total return was the
strategic shift into larger-cap stocks, particularly relative to the
fund's peer group. Price and trading volume data used in my
quantitative models indicated that the market would continue to reward
larger stocks, particularly those in defensive industry sectors, such
as nondurable consumer products. Because these sectors tend to be less
sensitive to economic uncertainty, the market was willing to pay a
premium to own them, creating demand that typically results in better
performance during volatile periods. The majority of the fund's
underperformance for the year was caused by investments in cyclical
energy and technology stocks, primarily during December of 1997.
Q. WHICH STOCKS HELPED THE FUND'S PERFORMANCE? WHICH ONES
DISAPPOINTED?
A. Eli Lilly, Fannie Mae and Microsoft were among the best-performing
stocks in the portfolio. At first glance it might appear that these
stocks from the pharmaceutical, finance and technology sectors,
respectively, have little in common. However, they all share one
important characteristic - size. Because these companies represent
some of the largest in the market, their performance benefited from
the preference investors demonstrated for large, liquid stocks during
the period. On the negative side, three energy companies, BJ Services,
Tidewater and ENSCO International, reported poor earnings when oil
prices suffered a devastating 35% drop during the period. The fund
sold most of these stocks early in the period.
Q. HOW WOULD YOU CHARACTERIZE TECHNOQUANT AT THE END OF THE PERIOD?
A. At the end of the period, the fund had about 94% of its assets
invested in stocks. The assets were defensively positioned and
diversified among 66 companies in 15 major industry sectors. This
structure reflects what has historically provided the most stable
returns under similar market conditions: a diversified portfolio of
larger stocks. I believe this strategy is appropriate because my
models don't predict any meaningful decrease in volatility or changes
in market leadership over the next few months. However, despite these
defensive characteristics, the fund continues to be invested in stocks
that have attractive technical valuations.
Q. WHAT'S YOUR OUTLOOK FOR THE COMING MONTHS?
A. I expect market volatility to remain relatively high coming into
1999. Technical factors - such as trading volume - suggest that the
market may retest its recent bottom before advancing, with small- and
mid-cap stocks leading the turnaround. However, until there are
conclusive signs that investor confidence and market leadership are
changing direction, I plan to maintain the fund's diversification and
large stock bias.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
TIM KROCHUK ON SMALL-CAP
STOCK PERFORMANCE:
"Small-cap stocks have experienced
unusual market conditions for close
to three years. In the 1960s, 1970s
and 1980s, the equal-weighted S&P
500 - which gives more weight to
the small-and mid-cap stocks -
outperformed the market cap
weighted S&P 500 - which gives
more weight to large stocks -
every decade. This relationship
held true through the first half of
the 1990s. Since then, however,
tremendous investor demand for a
relatively small number of the
nation's largest stocks has led the
market higher, leaving smaller-cap
stocks far behind.
"Small-cap company fundamentals
have been positive, with more
attractive valuations and higher
revenue growth than many larger
companies. Conversely, large
stocks' market leadership has not
been driven entirely by
fundamentals, but also by supply
and demand. In other words, a
small company can have
outstanding earnings or products,
but if there isn't any market
demand for the stock, the price
can't go up. Several events have
contributed to diminished demand
for small stocks, particularly during
the past year as shocks to global
financial systems sent investors
running for cover - again, to the
liquid, household names of the
large caps. When concerns about the
domestic and global economies
subside, investors should be more
willing to invest in the values
offered by small- and mid-cap
stocks. With a better supply and
demand dynamic, this sector of
the market should recover nicely."
FUND FACTS
GOAL: long-term capital
appreciation by investing
primarily in common stocks,
using a quantitative
approach that emphasizes
technical factors
START DATE: December 31,
1996
SIZE: as of November 30,
1998, more than $31 million
MANAGER: Tim Krochuk,
since inception; joined
Fidelity in 1992
(checkmark)
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF NOVEMBER
30, 1998
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE STOCKS 6 MONTHS AGO
Philip Morris Companies, Inc. 4.5 0.0
Microsoft Corp. 4.5 3.1
Amgen, Inc. 3.5 1.5
Fannie Mae 3.4 2.0
Southwest Airlines Co. 3.3 1.5
Albertson's, Inc. 3.2 1.6
Aluminum Co. of America 3.1 0.0
Lilly (Eli) & Co. 2.9 0.0
U.S. WEST, Inc. 2.7 1.1
Quaker Oats Co. 2.6 0.0
TOP FIVE MARKET SECTORS AS OF
NOVEMBER 30, 1998
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE MARKET SECTORS 6
MONTHS AGO
TECHNOLOGY 25.0 10.2
NONDURABLES 14.7 6.7
HEALTH 10.6 4.3
RETAIL & WHOLESALE 8.9 12.8
FINANCE 8.3 9.6
</TABLE>
ASSET ALLOCATION (% OF FUND'S
INVESTMENTS)
AS OF NOVEMBER 30, 1998 * AS OF MAY 31, 1998 **
Row: 1, Col: 1, Value: 94.0
Row: 1, Col: 2, Value: 6.0
Row: 1, Col: 1, Value: 98.5
Row: 1, Col: 2, Value: 1.5
Stocks 94.0%
Short-term
investments 6.0%
FOREIGN
INVESTMENTS 2.7%
Stocks and
equity futures 99.5%
Short-term
investments 0.5%
FOREIGN
INVESTMENTS 1.8%
*
**
INVESTMENTS NOVEMBER 30, 1998
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 94.0%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 0.5%
Advanced Aerodynamics & 58,500 $ 162,703
Structures, Inc. Class A (a)
BASIC INDUSTRIES - 4.5%
METALS & MINING - 3.1%
Aluminum Co. of America 13,300 985,863
PACKAGING & CONTAINERS - 0.7%
Crown Cork & Seal Co., Inc. 6,100 205,875
PAPER & FOREST PRODUCTS - 0.7%
Smurfit-Stone Container Corp. 16,236 228,319
(a)
TOTAL BASIC INDUSTRIES 1,420,057
CONSTRUCTION & REAL ESTATE -
0.0%
REAL ESTATE - 0.0%
ResortQuest International, 200 2,625
Inc. (a)
ENERGY - 5.5%
ENERGY SERVICES - 1.7%
Schlumberger Ltd. 6,100 272,594
Tidewater, Inc. 11,600 267,525
540,119
OIL & GAS - 3.8%
Burlington Resources, Inc. 7,900 281,438
Conoco, Inc. Class A (a) 2,000 47,375
Exxon Corp. 7,900 592,994
Texaco, Inc. 5,000 287,813
1,209,620
TOTAL ENERGY 1,749,739
FINANCE - 8.3%
FEDERAL SPONSORED CREDIT - 4.0%
Fannie Mae 14,900 1,083,975
Freddie Mac 2,900 175,450
1,259,425
INSURANCE - 3.3%
Allstate Corp. 6,800 277,100
MGIC Investment Corp. 9,200 404,225
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
FINANCE - CONTINUED
INSURANCE - CONTINUED
MONY Group, Inc. (a) 100 $ 3,094
SunAmerica, Inc. 4,600 364,550
1,048,969
SAVINGS & LOANS - 1.0%
Dime Bancorp, Inc. 12,600 334,688
TOTAL FINANCE 2,643,082
HEALTH - 10.6%
DRUGS & PHARMACEUTICALS - 7.5%
Amgen, Inc. (a) 15,000 1,128,750
Lilly (Eli) & Co. 10,200 914,813
Merck & Co., Inc. 2,300 356,213
2,399,776
MEDICAL EQUIPMENT & SUPPLIES
- - 3.1%
Abbott Laboratories 13,800 662,400
Johnson & Johnson 3,800 308,750
971,150
TOTAL HEALTH 3,370,926
INDUSTRIAL MACHINERY &
EQUIPMENT - 1.6%
ELECTRICAL EQUIPMENT - 1.6%
General Electric Co. 5,600 506,800
MEDIA & LEISURE - 2.7%
BROADCASTING - 0.8%
Chris-Craft Industries, Inc. 4,900 226,625
Fox Entertainment Group, Inc. 1,000 23,625
(a)
250,250
RESTAURANTS - 1.9%
Tricon Global Restaurants, 13,100 596,869
Inc. (a)
TOTAL MEDIA & LEISURE 847,119
NONDURABLES - 14.7%
BEVERAGES - 2.3%
Coors (Adolph) Co. Class B 14,700 731,325
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
NONDURABLES - CONTINUED
FOODS - 5.6%
ConAgra, Inc. 10,800 $ 339,525
Heinz (H.J.) Co. 10,400 606,450
Horizon Organic Holding Corp. 300 4,838
(a)
Quaker Oats Co. 13,600 834,700
1,785,513
HOUSEHOLD PRODUCTS - 2.3%
Clorox Co. 6,600 733,013
TOBACCO - 4.5%
Philip Morris Companies, Inc. 25,800 1,443,179
TOTAL NONDURABLES 4,693,030
PRECIOUS METALS - 2.2%
Barrick Gold Corp. 29,200 580,933
Battle Mountain Gold Co. 26,900 126,094
707,027
RETAIL & WHOLESALE - 8.9%
DRUG STORES - 2.5%
Walgreen Co. 14,700 789,206
GENERAL MERCHANDISE STORES -
2.0%
Wal-Mart Stores, Inc. 8,600 647,688
GROCERY STORES - 4.4%
Albertson's, Inc. 18,200 1,038,538
Safeway, Inc. (a) 7,100 374,969
1,413,507
RETAIL & WHOLESALE,
MISCELLANEOUS - 0.0%
software.net Corp. (a) 100 2,175
TOTAL RETAIL & WHOLESALE 2,852,576
SERVICES - 0.0%
ADVERTISING - 0.0%
EarthWeb, Inc. (a) 300 12,075
Young & Rubicam, Inc. (a) 100 2,988
15,063
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TECHNOLOGY - 25.0%
COMMUNICATIONS EQUIPMENT - 0.7%
Carrier Access Corp. (a) 100 $ 2,675
Jabil Circuit, Inc. (a) 3,500 203,000
205,675
COMPUTER SERVICES & SOFTWARE
- - 8.7%
America Online, Inc. 7,800 682,988
broadcast.com, Inc. (a) 9,500 627,000
Ebay, Inc. (a) 100 19,763
Inktomi Corp. (a) 100 13,238
International Integration, 200 2,925
Inc. (a)
Microsoft Corp. (a) 11,700 1,427,400
MicroStrategy, Inc. Class A 100 2,250
(a)
2,775,564
COMPUTERS & OFFICE EQUIPMENT
- - 9.2%
Comdisco, Inc. 34,400 627,800
Dell Computer Corp. (a) 7,800 474,338
EMC Corp. (a) 9,600 696,000
Read-Rite Corp. (a) 32,900 442,094
Seagate Technology, Inc. (a) 23,200 684,400
2,924,632
ELECTRONIC INSTRUMENTS - 2.2%
Applied Materials, Inc. (a) 8,100 313,875
Teradyne, Inc. (a) 12,000 384,750
698,625
ELECTRONICS - 3.0%
Intel Corp. 5,600 602,700
Texas Instruments, Inc. 4,600 351,325
954,025
PHOTOGRAPHIC EQUIPMENT - 1.2%
Eastman Kodak Co. 5,400 391,838
TOTAL TECHNOLOGY 7,950,359
TRANSPORTATION - 3.3%
AIR TRANSPORTATION - 3.3%
Southwest Airlines Co. 48,600 1,044,900
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
UTILITIES - 6.2%
TELEPHONE SERVICES - 6.2%
AT&T Corp. 8,100 $ 504,731
MCI WorldCom, Inc. (a) 10,300 607,700
U.S. WEST, Inc. 13,700 852,825
1,965,256
TOTAL COMMON STOCKS 29,931,262
(Cost $25,641,995)
CASH EQUIVALENTS - 6.0%
Taxable Central Cash Fund (b) 1,922,407 1,922,407
(Cost $1,922,407)
TOTAL INVESTMENT IN $ 31,853,669
SECURITIES - 100%
(Cost $27,564,402)
LEGEND
(a) Non-income producing
(b) At period end, the seven-day yield on the Taxable Central Cash
Fund was 4.81%. The yield refers to the income earned by investing in
the fund over the seven-day period, expressed as an annual percentage.
INCOME TAX INFORMATION
At November 30, 1998, the aggregate cost of investment securities for
income tax purposes was $27,609,367. Net unrealized appreciation
aggregated $4,244,302, of which $4,662,860 related to appreciated
investment securities and $418,558 related to depreciated investment
securities.
At November 30, 1998, the fund had a capital loss carryforward of
approximately $333,000, all of which will expire on November 30, 2006.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1998
ASSETS
Investment in securities, at $ 31,853,669
value (cost $27,564,402) -
See accompanying schedule
Receivable for fund shares 65,324
sold
Dividends receivable 27,987
Interest receivable 6,475
Other receivables 4,748
TOTAL ASSETS 31,958,203
LIABILITIES
Payable to custodian bank $ 39,810
Payable for fund shares 64,294
redeemed
Accrued management fee 15,589
Distribution fees payable 16,929
Other payables and accrued 35,195
expenses
TOTAL LIABILITIES 171,817
NET ASSETS $ 31,786,386
Net Assets consist of:
Paid in capital $ 27,870,214
Accumulated undistributed net (373,104)
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 4,289,276
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS $ 31,786,386
STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
NOVEMBER 30, 1998
CALCULATION OF MAXIMUM $11.71
OFFERING PRICE CLASS A: NET
ASSET VALUE and redemption
price per share
($2,884,709 (divided by)
246,274 shares)
Maximum offering price per $12.42
share (100/94.25 of $11.71)
CLASS T: NET ASSET VALUE and $11.68
redemption price per share
($16,368,445 (divided by)
1,401,808 shares)
Maximum offering price per $12.10
share (100/96.50 of $11.68)
CLASS B: NET ASSET VALUE and $11.60
offering price per share
($10,994,205 (divided by)
947,526 shares) A
CLASS C: NET ASSET VALUE and $11.60
offering price per share
($482,208 (divided by)
41,580 shares) A
INSTITUTIONAL CLASS: NET $11.72
ASSET VALUE, offering price
and redemption price per
share ($1,056,819 (divided
by) 90,171 shares)
A REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1998
INVESTMENT INCOME $ 420,530
Dividends
Interest 164,569
TOTAL INCOME 585,099
EXPENSES
Management fee $ 208,740
Transfer agent fees 106,226
Distribution fees 220,230
Accounting fees and expenses 60,636
Non-interested trustees' 131
compensation
Custodian fees and expenses 9,339
Registration fees 58,404
Audit 23,151
Legal 503
Miscellaneous 2,846
Total expenses before 690,206
reductions
Expense reductions (21,762) 668,444
NET INVESTMENT INCOME (LOSS) (83,345)
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities (184,828)
Foreign currency transactions (1,585)
Futures contracts 67,131 (119,282)
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 2,192,093
Assets and liabilities in 12 2,192,105
foreign currencies
NET GAIN (LOSS) 2,072,823
NET INCREASE (DECREASE) IN $ 1,989,478
NET ASSETS RESULTING FROM
OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED NOVEMBER 30, 1998 DECEMBER 31, 1996
(COMMENCEMENT OF OPERATIONS)
TO NOVEMBER 30, 1997
INCREASE (DECREASE) IN NET
ASSETS
Operations Net investment $ (83,345) $ (240,135)
income (loss)
Net realized gain (loss) (119,282) 1,156,290
Change in net unrealized 2,192,105 2,097,171
appreciation (depreciation)
NET INCREASE (DECREASE) IN 1,989,478 3,013,326
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders
From net realized gain (868,298) -
In excess of net realized (347,228) -
gain
TOTAL DISTRIBUTIONS (1,215,526) -
Share transactions - net (7,523,571) 35,522,679
increase (decrease)
TOTAL INCREASE (DECREASE) (6,749,619) 38,536,005
IN NET ASSETS
NET ASSETS
Beginning of period 38,536,005 -
End of period $ 31,786,386 $ 38,536,005
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
YEARS ENDED NOVEMBER 30,
1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 11.38 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) .01 (.07)
D
Net realized and unrealized .69 1.45
gain (loss)
Total from investment .70 1.38
operations
Less Distributions
From net realized gain (.26) -
In excess of net realized (.11) -
gain
Total distributions (.37) -
Net asset value, end of period $ 11.71 $ 11.38
TOTAL RETURN B, C 6.53% 13.80%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 2,885 $ 5,376
(000 omitted)
Ratio of expenses to average 1.61% 1.75% A, F
net assets
Ratio of expenses to average 1.60% G 1.75% A
net assets after expense
reductions
Ratio of net investment .09% (.73)% A
income (loss) to average net
assets
Portfolio turnover 358% 213% A
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD DECEMBER 31, 1996 (COMMENCEMENT OF SALE OF CLASS A
SHARES) TO NOVEMBER 30, 1997.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - CLASS T
YEARS ENDED NOVEMBER 30,
1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 11.36 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) (.02) (.10)
D
Net realized and unrealized .70 1.46
gain (loss)
Total from investment .68 1.36
operations
Less Distributions
From net realized gain (.26) -
In excess of net realized (.10) -
gain
Total distributions (.36) -
Net asset value, end of period $ 11.68 $ 11.36
TOTAL RETURN B, C 6.35% 13.60%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 16,368 $ 20,283
(000 omitted)
Ratio of expenses to average 1.79% 2.00% A, F
net assets
Ratio of expenses to average 1.76% G 2.00% A
net assets after expense
reductions
Ratio of net investment (.11)% (1.00)% A
income (loss) to average net
assets
Portfolio turnover 358% 213% A
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD DECEMBER 31, 1996 (COMMENCEMENT OF SALE OF CLASS T
SHARES) TO NOVEMBER 30, 1997.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - CLASS B
YEARS ENDED NOVEMBER 30,
1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 11.31 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) (.09) (.15)
D
Net realized and unrealized .71 1.46
gain (loss)
Total from investment .62 1.31
operations
Less Distributions
From net realized gain (.24) -
In excess of net realized (.09) -
gain
Total distributions (.33) -
Net asset value, end of period $ 11.60 $ 11.31
TOTAL RETURN B, C 5.80% 13.10%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 10,994 $ 11,370
(000 omitted)
Ratio of expenses to average 2.24% 2.50% A, F
net assets
Ratio of expenses to average 2.22% G 2.50% A
net assets after expense
reductions
Ratio of net investment (.58)% (1.51)% A
income (loss) to average net
assets
Portfolio turnover 358% 213% A
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE
AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD DECEMBER 31, 1996 (COMMENCEMENT OF SALE OF CLASS B
SHARES) TO NOVEMBER 30, 1997.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - CLASS C
YEARS ENDED NOVEMBER 30,
1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 11.36 $ 11.85
period
Income from Investment
Operations
Net investment income (loss) (.14) -
D
Net realized and unrealized .74 (.49)
gain (loss)
Total from investment .60 (.49)
operations
Less Distributions
From net realized gain (.26) -
In excess of net realized (.10) -
gain
Total distributions (.36) -
Net asset value, end of period $ 11.60 $ 11.36
TOTAL RETURN B, C 5.62% (4.14)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 482 $ 48
(000 omitted)
Ratio of expenses to average 2.50% F 2.50% A, F
net assets
Ratio of expenses to average 2.47% G 2.50% A
net assets after expense
reductions
Ratio of net investment (.88)% (.60)% A
income (loss) to average net
assets
Portfolio turnover 358% 213% A
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE
AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD NOVEMBER 3, 1997 (COMMENCEMENT OF SALE OF CLASS C
SHARES) TO NOVEMBER 30, 1997.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
YEARS ENDED NOVEMBER 30,
1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 11.40 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) .03 (.04)
D
Net realized and unrealized .68 1.44
gain (loss)
Total from investment .71 1.40
operations
Less Distributions
From net realized gain (.28) -
In excess of net realized (.11) -
gain
Total distributions (.39) -
Net asset value, end of period $ 11.72 $ 11.40
TOTAL RETURN B, C 6.63% 14.00%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 1,057 $ 1,459
(000 omitted)
Ratio of expenses to average 1.50% F 1.50% A, F
net assets
Ratio of expenses to average 1.48% G 1.50% A
net assets after expense
reductions
Ratio of net investment .17% (.42)% A
income (loss) to average net
assets
Portfolio turnover 358% 213% A
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD DECEMBER 31, 1996 (COMMENCEMENT OF SALE OF
INSTITUTIONAL CLASS SHARES) TO NOVEMBER 30, 1997.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1998
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor TechnoQuant Growth Fund (the fund) is a fund of
Fidelity Advisor Series I (the trust) and is authorized to issue an
unlimited number of shares. The trust is registered under the
Investment Company Act of 1940, as amended (the 1940 Act), as an
open-end management investment company organized as a Massachusetts
business trust.
The fund offers Class A, Class T, Class B, Class C, and Institutional
Class shares, each of which has equal rights as to assets and voting
privileges. Each class has exclusive voting rights with respect to
matters that affect that class. Class B shares will automatically
convert to Class A shares after a holding period of seven years from
the initial date of purchase. Investment income, realized and
unrealized capital gains and losses, the common expenses of the fund,
and certain fund-level expense reductions, if any, are allocated on a
pro rata basis to each class based on the relative net assets of each
class to the total net assets of the fund. Each class of shares
differs in its respective distribution, transfer agent, and certain
other class-specific fees, expenses, and expense reductions.
The financial statements have been prepared in conformity with
generally accepted accounting principles which require management to
make certain estimates and assumptions at the date of the financial
statements. The following summarizes the significant accounting
policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Securities for which exchange
quotations are not readily available (and in certain cases debt
securities which trade on an exchange) are valued primarily using
dealer-supplied valuations or at their fair value as determined in
good faith under consistently applied procedures under the general
supervision of the Board of Trustees. Short-term securities with
remaining maturities of sixty days or less for which quotations are
not readily available are valued at amortized cost or original cost
plus accrued interest, both of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases
and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
and settlement date on purchases and sales of securities. The effects
of changes in foreign currency exchange rates on investments in
securities are included with the net realized and unrealized gain or
loss on investment securities.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent that it distributes substantially all of
its taxable income for its fiscal year. The schedule of investments
includes information regarding income taxes under the caption "Income
Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend
date, except certain dividends from foreign securities where the
ex-dividend date may have passed, are recorded as soon as the fund is
informed of the ex-dividend date. Non-cash dividends included in
dividend income, if any, are recorded at the fair market value of the
securities received. Interest income is accrued as earned. Investment
income is recorded net of foreign taxes withheld where recovery of
such taxes is uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date. Income dividends and capital gain distributions are
declared separately for each class.
Income and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. These differences, which may result in
distribution reclassifications, are primarily due to differing
treatments for foreign currency transactions, capital loss
carryforwards, and losses deferred due to wash sales. The fund also
utilized earnings and profits distributed to shareholders on
redemption of shares as a part of the dividends paid deduction for
income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Accumulated undistributed net realized gain (loss) on investments and
foreign currency transactions may include temporary book and tax basis
differences that will reverse in a subsequent period. Any taxable gain
remaining at fiscal year end is distributed in the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the contracts'
terms. The U.S. dollar value of foreign currency contracts is
determined using contractual currency exchange rates established at
the time of each trade.
2. OPERATING POLICIES - CONTINUED
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with
other affiliated entities of Fidelity Management & Research Company
(FMR), may transfer uninvested cash balances into one or more joint
trading accounts. These balances are invested in one or more
repurchase agreements for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are
marked-to-market daily and maintained at a value at least equal to the
principal amount of the repurchase agreement (including accrued
interest). FMR, the fund's investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
TAXABLE CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by
the SEC, the fund may invest in the Taxable Central Cash Fund (the
Cash Fund) managed by Fidelity Investments Money Management, Inc., an
affiliate of FMR. The Cash Fund is an open-end money market fund
available only to investment companies and other accounts managed by
FMR and its affiliates. The Cash Fund seeks preservation of capital,
liquidity, and current income by investing in U.S. Treasury securities
and repurchase agreements for these securities. Income distributions
from the Cash Fund are declared daily and paid monthly from net
interest income. Income distributions earned by the fund are recorded
as interest income in the accompanying financial statements.
FUTURES CONTRACTS. The fund may use futures contracts to manage its
exposure to the stock markets. Buying futures tends to increase the
fund's exposure to the underlying instrument, while selling futures
tends to decrease the fund's exposure to the underlying instrument or
hedge other fund investments. Losses may arise from changes in the
value of the underlying instruments or if the counterparties do not
perform under the contracts' terms. Gains (losses) are realized upon
the expiration or closing of the futures contracts. Futures contracts
are valued at the settlement price established each day by the board
of trade or exchange on which they are traded.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $115,212,730 and $123,645,583, respectively.
The market value of futures contracts opened and closed during the
period amounted to $17,784,197 and $17,851,328, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus a
fixed individual fund fee rate applied to the average net assets of
the fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds advised by FMR. The rates ranged from .2500% to .5200% for the
period. The annual individual fund fee rate is .30%. In the event that
these rates were lower than the contractual rates in effect during the
period, FMR voluntarily implemented the above rates, as they resulted
in the same or a lower management fee. For the period, the management
fee was equivalent to an annual rate of .59% of average net assets .
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the
1940 Act, the Trustees have adopted separate distribution plans with
respect to each class of shares (collectively referred to as "the
Plans"). Under certain of the Plans, the class pays Fidelity
Distributors Corporation (FDC), an affiliate of FMR, a distribution
and service fee. A portion of this fee may be reallowed to securities
dealers, banks and other financial institutions for the distribution
of each class of shares and providing shareholder support services.
For the period, this fee was based on the following annual rates of
the average net assets of each applicable class:
CLASS A .25%
CLASS T .50%
CLASS B 1.00%*
CLASS C 1.00%*
* .75% REPRESENTS A DISTRIBUTION FEE AND .25% REPRESENTS A SHAREHOLDER
SERVICE FEE.
For the period, each class paid FDC the following amounts, a portion
of which was retained by FDC:
PAID TO FDC RETAINED BY FDC
CLASS A $ 9,638 $ 73
CLASS T 91,619 2,621
CLASS B 116,202 87,319
CLASS C 2,771 2,744
$ 220,230 $ 92,757
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
DISTRIBUTION AND SERVICE PLAN - CONTINUED
Under the Plans, FMR may use its resources to pay administrative and
promotional expenses related to the sale of each class' shares. The
Plans also authorize payments to third parties that assist in the sale
of each class' shares or render shareholder support services. For the
period, the following amounts were paid to third parties under the
Plans:
CLASS A $ 3,231
CLASS T 6,191
CLASS B 5,111
CLASS C 1,185
INSTITUTIONAL CLASS 117
SALES LOAD. FDC receives a front-end sales charge of up to 5.75% for
selling Class A shares, and 3.50% for selling Class T shares of the
fund. FDC receives the proceeds of contingent deferred sales charges
levied on Class B share redemptions occurring within six years of
purchase and Class C share redemptions occurring within one year of
purchase. Contingent deferred sales charges are based on declining
rates ranging from 5% to 1% for Class B and 1% for Class C, of the
lesser of the cost of shares at the initial date of purchase or the
net asset value of the redeemed shares, excluding any reinvested
dividends and capital gains. In addition, purchases of Class A and
Class T shares that were subject to a finder's fee bear a contingent
deferred sales charge on assets that do not remain in the fund for at
least one year. The Class A and Class T contingent deferred sales
charge is based on 0.25% of the lesser of the cost of shares at the
initial date of purchase or the net asset value of the redeemed
shares, excluding any reinvested dividends and capital gains. A
portion of the sales charges paid to FDC are paid to securities
dealers, banks and other financial institutions.
For the period, sales charge amounts paid to and retained by FDC were
as follows:
PAID TO FDC RETAINED BY FDC
CLASS A $ 17,545 $ 5,286
CLASS T 45,229 11,046
CLASS B 47,726 47,726*
CLASS C 422 422*
$ 110,922 $ 64,480
* WHEN CLASS B AND CLASS C SHARES ARE INITIALLY SOLD, FDC PAYS
COMMISSIONS FROM ITS OWN RESOURCES TO SECURITIES DEALERS,
BANKS, AND OTHER FINANCIAL INSTITUTIONS THROUGH WHICH THE SALES ARE
MADE.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
TRANSFER AGENT FEES. Fidelity Investments Institutional Operations
Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend
disbursing and shareholder servicing agent for each class of the fund.
FIIOC receives account fees and asset-based fees that vary according
to the account size and type of account of the shareholders of the
respective classes of the fund. FIIOC pays for typesetting, printing
and mailing of all shareholder reports, except proxy statements. For
the period, the following amounts were paid to FIIOC:
AMOUNT % OF AVERAGE NET ASSETS
CLASS A $ 11,073 .29
CLASS T 59,759 .33
CLASS B 31,152 .27
CLASS C 1,709 .62
INSTITUTIONAL CLASS 2,533 .20
$ 106,226
ACCOUNTING FEES. Fidelity Service Company, Inc. (FSC), an affiliate of
FMR, maintains the fund's accounting records. The fee is based on the
level of average net assets for the month plus out-of-pocket expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $22,210 for the
period.
5. EXPENSE REDUCTIONS.
FMR voluntarily agreed to reimburse operating expenses (excluding
interest, taxes, brokerage commissions and extraordinary expenses)
above the following annual rates or range of annual rates of average
net assets for each of the following classes:
FMR EXPENSE LIMITATIONS REIMBURSEMENT
CLASS A 1.75% $ -
CLASS T 2.00% -
CLASS B 2.50% -
CLASS C 2.50% 12,165
INSTITUTIONAL CLASS 1.50% 1,714
$ 13,879
5. EXPENSE REDUCTIONS - CONTINUED
Effective December 1, 1998, Class A, Class T, Class B, Class C, and
the Institutional Class expense limitations were changed to 1.30%,
1.55%, 2.05%, 2.05%, and 1.05% of each class' average net assets,
respectively.
FMR has also directed certain portfolio trades to brokers who paid a
portion of the fund's expenses. For the period, the fund's expenses
were reduced by $7,243 under this arrangement.
In addition, the fund has entered into an arrangements with its
custodian whereby credits realized as a result of uninvested cash
balances were used to reduce a portion of expenses. During the period,
the fund's custodian fees were reduced by $640 under the custodian
arrangement.
6. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
YEARS ENDED NOVEMBER 30,
1998 1997
FROM NET REALIZED GAIN
Class A $ 126,919 $ -
Class T 463,390 -
Class B 240,581 -
Class C 1,353 -
Institutional Class 36,055 -
Total $ 868,298 $ -
IN EXCESS OF NET REALIZED GAIN
Class A $ 50,754 $ -
Class T 185,307 -
Class B 96,208 -
Class C 541 -
Institutional Class 14,418 -
Total $ 347,228 $ -
$ 1,215,526 $ -
7. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SHARES DOLLARS
YEAR ENDED NOVEMBER 30, YEAR ENDED NOVEMBER 30, YEAR ENDED NOVEMBER 30, YEAR ENDED NOVEMBER 30,
1998 1997 A, B 1998 1997 A, B
CLASS A Shares sold 87,524 571,771 $ 966,657 $ 5,930,301
Reinvestment of distributions 9,071 - 95,223 -
Shares redeemed (322,594) (99,498) (3,572,279) (1,090,791)
Net increase (decrease) (225,999) 472,273 $ (2,510,399) $ 4,839,510
CLASS T Shares sold 351,393 2,073,347 $ 3,954,534 $ 21,705,071
Reinvestment of distributions 55,234 - 578,731 -
Shares redeemed (790,294) (287,872) (8,857,682) (3,025,861)
Net increase (decrease) (383,667) 1,785,475 $ (4,324,417) $ 18,679,210
CLASS B Shares sold 201,347 1,069,604 $ 2,255,629 $ 11,365,164
Reinvestment of distributions 19,253 - 201,351 -
Shares redeemed (278,555) (64,123) (3,122,196) (703,523)
Net increase (decrease) (57,955) 1,005,481 $ (665,216) $ 10,661,641
CLASS C Shares sold 48,781 4,268 $ 545,490 $ 49,053
Reinvestment of distributions 105 - 1,104 -
Shares redeemed (11,574) - (132,749) -
Net increase (decrease) 37,312 4,268 $ 413,845 $ 49,053
INSTITUTIONAL CLASS Shares 14,757 139,871 $ 165,746 $ 1,425,408
sold
Reinvestment of distributions 4,196 - 44,046 -
Shares redeemed (56,711) (11,942) (647,176) (132,143)
Net increase (decrease) (37,758) 127,929 $ (437,384) $ 1,293,265
</TABLE>
A SHARE TRANSACTIONS FOR CLASS A, CLASS T, CLASS B AND INSTITUTIONAL
CLASS ARE FOR THE PERIOD DECEMBER 31, 1996 (COMMENCEMENT OF SALE OF
SHARES) TO
NOVEMBER 30, 1997.
B SHARE TRANSACTIONS FOR CLASS C ARE FOR THE PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO NOVEMBER 30, 1997.
8. REGISTRATION FEES.
For the period, each class paid the following amounts to register its
shares for sale:
REGISTRATION FEES
CLASS A $ 8,311
CLASS T 17,716
CLASS B 12,765
CLASS C 12,225
INSTITUTIONAL CLASS 7,387
$ 58,404
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Advisor Series I and the Shareholders of
Fidelity Advisor TechnoQuant Growth Fund:
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of
Fidelity Advisor TechnoQuant Growth Fund (a fund of Fidelity Advisor
Series I) at November 30, 1998, and the results of its operations, the
changes in its net assets and the financial highlights for the periods
indicated, in conformity with generally accepted accounting
principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the
responsibility of the Fidelity Advisor TechnoQuant Growth Fund's
management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of
these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which
included confirmation of securities at November 30, 1998 by
correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
January 13, 1999
DISTRIBUTIONS
A total of 15.77%, 16.25%, 17.74% and 15.74% of Class A's, Class T's,
Class B's and Class C's dividends distributed during the fiscal year
qualifies for the dividends-received deductions for corporate
shareholders.
The fund will notify shareholders in January 1999 of these percentages
for use in preparing 1998 income tax returns.
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.)
Inc., London, England
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Robert A. Lawrence, Vice President
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
* INDEPENDENT TRUSTEES
ADVISORY BOARD
J. Gary Burkhead
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
Fidelity Investments Institutional
Operations Company
Boston, MA
CUSTODIAN
The Chase Manhattan Bank
New York, NY
FOCUS FUNDS
Fidelity Advisor Consumer
Industries Fund
Fidelity Advisor Cyclical
Industries Fund
Fidelity Advisor Financial
Services Fund
Fidelity Advisor Health Care Fund
Fidelity Advisor Natural
Resources Fund
Fidelity Advisor Technology Fund
Fidelity Advisor Utilities Growth Fund
GROWTH FUNDS
Fidelity Advisor Latin America Fund
Fidelity Advisor Japan Fund
Fidelity Advisor Europe Capital Appreciation Fund
Fidelity Advisor International Capital Appreciation Fund
Fidelity Advisor Overseas Fund
Fidelity Advisor Diversified International Fund
Fidelity Advisor Global Equity Fund
Fidelity Advisor TechnoQuant
Growth Fund
SM
Fidelity Advisor Small Cap Fund
Fidelity Advisor Strategic
Opportunities Fund
Fidelity Advisor Mid Cap Fund
Fidelity Advisor Retirement
Growth Fund
Fidelity Advisor Equity Growth Fund
Fidelity Advisor Large Cap Fund
Fidelity Advisor Dividend Growth Fund
Fidelity Advisor Growth
Opportunities Fund
GROWTH AND INCOME FUNDS
Fidelity Advisor Growth & Income Fund
Fidelity Advisor Equity Income Fund
Fidelity Advisor Asset Allocation Fund
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MUNICIPAL FUNDS
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(registered trademark)
(2_FIDELITY_LOGOS)FIDELITY ADVISOR
(registered trademark)
TECHNOQUANTGROWTH
SM
FUND - INSTITUTIONAL CLASS
ANNUAL REPORT
NOVEMBER 30, 1998
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over
time.
FUND TALK 6 The manager's review of fund
performance, strategy and
outlook.
INVESTMENT CHANGES 9 A summary of major shifts in
the fund's investments over
the last six months.
INVESTMENTS 10 A complete list of the fund's
investments with their
market values.
FINANCIAL STATEMENTS 15 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 24 Notes to the financial
statements.
REPORT OF INDEPENDENT 33 The auditors' opinion.
ACCOUNTANTS
DISTRIBUTIONS 34
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION
OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS
IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT
INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY ADVISOR FUND, INCLUDING CHARGES
AND EXPENSES, CONTACT YOUR
INVESTMENT PROFESSIONAL FOR A FREE PROSPECTUS. READ IT CAREFULLY
BEFORE YOU INVEST OR SEND MONEY.
Standard & Poor's, S&P and S&P 500 are registered service marks of The
McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity
Distributors Corporation.
Other third party marks appearing herein are the property of their
respective owners.
All other marks appearing herein are registered or unregistered
trademarks or service marks of FMR Corp. or an affiliated company.
This report is printed on recycled paper using soy-based inks.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
The month of November proved to be a strong one for the stock and bond
markets. The Dow Jones Industrial Average reached a record high.
Merger activity, which had lulled during the summer correction, has
increased significantly. Small-cap stocks posted their third
consecutive month of positive returns, as did emerging markets. While
bond returns generally were not at the levels of their equity
counterparts, they were mostly positive nonetheless.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will
greatly reduce your vulnerability to any single decline. We know from
experience, for example, that stock prices have gone up over longer
periods of time, have significantly outperformed other types of
investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through
diversification. A stock mutual fund, for instance, is already
diversified, because it invests in many different companies. You can
increase your diversification further by investing in a number of
different stock funds, or in such other investment categories as
bonds. If you have a short investment time horizon, you might want to
consider moving some of your investment into a money market fund,
which seeks income and a stable share price by investing in
high-quality, short-term investments. Of course, it's important to
remember that there is no assurance that a money market fund will
achieve its goal of maintaining a stable net asset value of $1.00 per
share, and that these types of funds are neither insured nor
guaranteed by any agency of the U.S. government.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases. Of course, you should
consider your financial ability to continue your purchases through
periods of low price levels before undertaking such a strategy.
Remember to contact your investment professional if you need help with
your investments.
Best regards,
Edward C. Johnson 3d
FIDELITY ADVISOR TECHNOQUANT GROWTH FUND - INSTITUTIONAL CLASS
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can
look at the total percentage change in value, the average annual
percentage change or the growth of a hypothetical $10,000 investment.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). If Fidelity had not reimbursed certain class expenses, the
total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR LIFE OF FUND
1998
FIDELITY ADV TECHNOQUANT 6.63% 21.56%
GROWTH - INST CL
S&P 500 (registered trademark) 23.66% 62.13%
Capital Appreciation Funds 8.48% n/a
Average
CUMULATIVE TOTAL RETURNS show Institutional Class' performance in
percentage terms over a set period - in this case, one year or since
the fund started on December 31, 1996. For example, if you had
invested $1,000 in a fund that had a 5% return over the past year, the
value of your investment would be $1,050. You can compare
Institutional Class' returns to those of the Standard & Poor's 500
Index - a market capitalization-weighted index of common stocks. To
measure how Institutional Class performance stacked up against its
peers, you can compare it to the capital appreciation funds average,
which reflects the performance of mutual funds with similar objectives
tracked by Lipper Analytical Services, Inc. The past average
represents a peer group of 237 mutual funds. These benchmarks include
reinvested dividends and capital gains, if any, and exclude the effect
of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR LIFE OF FUND
1998
FIDELITY ADV TECHNOQUANT 6.63% 10.72%
GROWTH - INST CL
S&P 500 23.66% 28.68%
Capital Appreciation Funds 8.48% n/a
Average
AVERAGE ANNUAL TOTAL RETURNS take Institutional Class' cumulative
return and show you what would have happened if Institutional Class
had performed at a constant rate each year.
$10,000 OVER LIFE OF FUND
FA TechnoQuant Growth - I S&P 500
00243 SP001
1996/12/31 10000.00 10000.00
1997/01/31 10290.00 10624.80
1997/02/28 9550.00 10708.10
1997/03/31 9070.00 10268.10
1997/04/30 9200.00 10881.11
1997/05/31 10000.00 11543.55
1997/06/30 10440.00 12060.70
1997/07/31 11480.00 13020.37
1997/08/31 11530.00 12290.97
1997/09/30 12240.00 12964.15
1997/10/31 11640.00 12531.14
1997/11/30 11400.00 13111.21
1997/12/31 11232.68 13336.33
1998/01/31 11066.79 13483.83
1998/02/28 11948.40 14456.28
1998/03/31 12529.22 15196.59
1998/04/30 12446.25 15349.47
1998/05/31 11844.68 15085.61
1998/06/30 12021.00 15698.39
1998/07/31 11906.91 15531.20
1998/08/31 10351.13 13285.70
1998/09/30 11014.93 14136.78
1998/10/31 11533.52 15286.67
1998/11/30 12155.83 16213.19
IMATRL PRASUN SHR__CHT 19981130 19981210 103925 R00000000000026
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor TechnoQuant Growth Fund - Institutional
Class on December 31, 1996, when the fund started. As the chart shows,
by November 30, 1998, the value of the investment would have grown to
$12,156 - a 21.56% increase on the initial investment. For comparison,
look at how the Standard & Poor's 500 Index did over the same period.
With dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $16,213 - a 62.13% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
long-term growth and
short-term volatility. In turn, the
share price and return of a
fund that invests in stocks will
vary. That means if you sell
your shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
When the final bell of the U.S. stock
market sounded on Monday,
November 23, 1998, the Dow
Jones Industrial Average stood at a
record high of 9374.27, serving
notice that the bleak economic
outlook from just a few short months
earlier would not keep positive
investor sentiment down. For the
12-month period ending November
30, 1998, the Dow - an index of
30 blue-chip stocks - returned
18.56%. What caused the
turnaround from the doldrums of
equity performance during the
summer and early fall? A variety of
factors: The economic problems in
Russia, Brazil and other emerging
markets began to dissipate; Asian
markets began to rebound; and,
perhaps most importantly, three
interest-rate cuts late in the period
by the Federal Reserve Board
helped stem the tide of a slowing
U.S. economy. All these factors
culminated in the Dow reaching its
record high late in November, a
peak that outpaced the previous
record set in July by nearly 40 points.
Small-cap stock performance was
still a far cry behind their large-cap
brethren. For the period, the Russell
2000 - a popular measure of
small-cap stock performance -
returned -6.62%, significantly
trailing the large-cap weighted
Standard & Poor's 500 Index's
return of 23.66%. Despite the late
rally in the equity market, this kind
of volatility has characterized the
entire year, and when it will level off
is impossible to predict.
An interview with Tim Krochuk, Portfolio Manager of Fidelity Advisor
TechnoQuant Growth Fund
Q. HOW DID THE FUND PERFORM, TIM?
A. For the 12 months that ended November 30, 1998, the fund's
Institutional Class shares returned 6.63%. The Standard & Poor's 500
Index returned 23.66% and the capital appreciation funds average
tracked by Lipper Analytical Services returned 8.48% for the same time
period.
Q. WHY DID THE FUND TRAIL ITS PEER GROUP AND THE S&P 500 DURING THE
PERIOD?
A. During the period, collapsing economic and monetary standards in
Asia were followed by similar problems in Russia and other emerging
markets. These events caused a global flight to quality. Investors
flocked to the household names of the biggest large-capitalization
stocks that provided both significant liquidity and an aura of safety.
My quantitative models had the median market cap of the fund much
higher than the peer group for most of 1998. In June, my models
suggested a shift of even more assets into large-cap stocks. Relative
to other capital appreciation funds, performance benefited from moving
the portfolio's focus towards larger stocks. While the fund slightly
underperformed its peer group for the year, its relative performance
improved significantly during the last six months because many of the
funds in the Lipper capital appreciation group maintained their
emphasis on smaller- and mid-cap stocks. Specifically, during the past
six months that ended November 30, 1998, the fund's Institutional
Class shares returned 2.63%. This compares favorably to a return of
- -0.40% for the capital appreciation funds average. Relative to the S&P
500, however, the fund underperformed because of poor breadth in the
S&P 500 advance. The 30 largest stocks in the S&P 500 accounted for
more than 60% of its return during this period. Since most active
portfolio managers tend to focus more on small- and mid-cap stocks,
and since most portfolios consist of more than 30 stocks, it should be
clear why so many managers had a difficult 12-month period.
Q. WHAT FACTORS INFLUENCED PERFORMANCE?
A. Overall, the biggest contributor to the fund's total return was the
strategic shift into larger-cap stocks, particularly relative to the
fund's peer group. Price and trading volume data used in my
quantitative models indicated that the market would continue to reward
larger stocks, particularly those in defensive industry sectors, such
as nondurable consumer products. Because these sectors tend to be less
sensitive to economic uncertainty, the market was willing to pay a
premium to own them, creating demand that typically results in better
performance during volatile periods. The majority of the fund's
underperformance for the year was caused by investments in cyclical
energy and technology stocks, primarily during December of 1997.
Q. WHICH STOCKS HELPED THE FUND'S PERFORMANCE? WHICH ONES
DISAPPOINTED?
A. Eli Lilly, Fannie Mae and Microsoft were among the best-performing
stocks in the portfolio. At first glance it might appear that these
stocks from the pharmaceutical, finance and technology sectors,
respectively, have little in common. However, they all share one
important characteristic - size. Because these companies represent
some of the largest in the market, their performance benefited from
the preference investors demonstrated for large, liquid stocks during
the period. On the negative side, three energy companies, BJ Services,
Tidewater and ENSCO International, reported poor earnings when oil
prices suffered a devastating 35% drop during the period. The fund
sold most of these stocks early in the period.
Q. HOW WOULD YOU CHARACTERIZE TECHNOQUANT AT THE END OF THE PERIOD?
A. At the end of the period, the fund had about 94% of its assets
invested in stocks. The assets were defensively positioned and
diversified among 66 companies in 15 major industry sectors. This
structure reflects what has historically provided the most stable
returns under similar market conditions: a diversified portfolio of
larger stocks. I believe this strategy is appropriate because my
models don't predict any meaningful decrease in volatility or changes
in market leadership over the next few months. However, despite these
defensive characteristics, the fund continues to be invested in stocks
that have attractive technical valuations.
Q. WHAT'S YOUR OUTLOOK FOR THE COMING MONTHS?
A. I expect market volatility to remain relatively high coming into
1999. Technical factors - such as trading volume - suggest that the
market may retest its recent bottom before advancing, with small- and
mid-cap stocks leading the turnaround. However, until there are
conclusive signs that investor confidence and market leadership are
changing direction, I plan to maintain the fund's diversification and
large stock bias.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
TIM KROCHUK ON SMALL-CAP
STOCK PERFORMANCE:
"Small-cap stocks have experienced
unusual market conditions for close
to three years. In the 1960s, 1970s
and 1980s, the equal-weighted S&P
500 - which gives more weight to
the small-and mid-cap stocks -
outperformed the market cap
weighted S&P 500 - which gives
more weight to large stocks -
every decade. This relationship
held true through the first half of
the 1990s. Since then, however,
tremendous investor demand for a
relatively small number of the
nation's largest stocks has led the
market higher, leaving smaller-cap
stocks far behind.
"Small-cap company fundamentals
have been positive, with more
attractive valuations and higher
revenue growth than many larger
companies. Conversely, large
stocks' market leadership has not
been driven entirely by
fundamentals, but also by supply
and demand. In other words, a
small company can have
outstanding earnings or products,
but if there isn't any market
demand for the stock, the price
can't go up. Several events have
contributed to diminished demand
for small stocks, particularly during
the past year as shocks to global
financial systems sent investors
running for cover - again, to the
liquid, household names of the
large caps. When concerns about the
domestic and global economies
subside, investors should be more
willing to invest in the values
offered by small- and mid-cap
stocks. With a better supply and
demand dynamic, this sector of
the market should recover nicely."
FUND FACTS
GOAL: long-term capital
appreciation by investing
primarily in common stocks,
using a quantitative
approach that emphasizes
technical factors
START DATE: December 31,
1996
SIZE: as of November 30,
1998, more than $31 million
MANAGER: Tim Krochuk,
since inception; joined
Fidelity in 1992
(checkmark)
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF NOVEMBER
30, 1998
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE STOCKS 6 MONTHS AGO
Philip Morris Companies, Inc. 4.5 0.0
Microsoft Corp. 4.5 3.1
Amgen, Inc. 3.5 1.5
Fannie Mae 3.4 2.0
Southwest Airlines Co. 3.3 1.5
Albertson's, Inc. 3.2 1.6
Aluminum Co. of America 3.1 0.0
Lilly (Eli) & Co. 2.9 0.0
U.S. WEST, Inc. 2.7 1.1
Quaker Oats Co. 2.6 0.0
TOP FIVE MARKET SECTORS AS OF
NOVEMBER 30, 1998
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE MARKET SECTORS 6
MONTHS AGO
TECHNOLOGY 25.0 10.2
NONDURABLES 14.7 6.7
HEALTH 10.6 4.3
RETAIL & WHOLESALE 8.9 12.8
FINANCE 8.3 9.6
</TABLE>
ASSET ALLOCATION (% OF FUND'S
INVESTMENTS)
AS OF NOVEMBER 30, 1998 * AS OF MAY 31, 1998 **
Row: 1, Col: 1, Value: 94.0
Row: 1, Col: 2, Value: 6.0
Row: 1, Col: 1, Value: 98.5
Row: 1, Col: 2, Value: 1.5
Stocks 94.0%
Short-term
investments 6.0%
FOREIGN
INVESTMENTS 2.7%
Stocks and
equity futures 99.5%
Short-term
investments 0.5%
FOREIGN
INVESTMENTS 1.8%
*
**
INVESTMENTS NOVEMBER 30, 1998
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 94.0%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 0.5%
Advanced Aerodynamics & 58,500 $ 162,703
Structures, Inc. Class A (a)
BASIC INDUSTRIES - 4.5%
METALS & MINING - 3.1%
Aluminum Co. of America 13,300 985,863
PACKAGING & CONTAINERS - 0.7%
Crown Cork & Seal Co., Inc. 6,100 205,875
PAPER & FOREST PRODUCTS - 0.7%
Smurfit-Stone Container Corp. 16,236 228,319
(a)
TOTAL BASIC INDUSTRIES 1,420,057
CONSTRUCTION & REAL ESTATE -
0.0%
REAL ESTATE - 0.0%
ResortQuest International, 200 2,625
Inc. (a)
ENERGY - 5.5%
ENERGY SERVICES - 1.7%
Schlumberger Ltd. 6,100 272,594
Tidewater, Inc. 11,600 267,525
540,119
OIL & GAS - 3.8%
Burlington Resources, Inc. 7,900 281,438
Conoco, Inc. Class A (a) 2,000 47,375
Exxon Corp. 7,900 592,994
Texaco, Inc. 5,000 287,813
1,209,620
TOTAL ENERGY 1,749,739
FINANCE - 8.3%
FEDERAL SPONSORED CREDIT - 4.0%
Fannie Mae 14,900 1,083,975
Freddie Mac 2,900 175,450
1,259,425
INSURANCE - 3.3%
Allstate Corp. 6,800 277,100
MGIC Investment Corp. 9,200 404,225
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
FINANCE - CONTINUED
INSURANCE - CONTINUED
MONY Group, Inc. (a) 100 $ 3,094
SunAmerica, Inc. 4,600 364,550
1,048,969
SAVINGS & LOANS - 1.0%
Dime Bancorp, Inc. 12,600 334,688
TOTAL FINANCE 2,643,082
HEALTH - 10.6%
DRUGS & PHARMACEUTICALS - 7.5%
Amgen, Inc. (a) 15,000 1,128,750
Lilly (Eli) & Co. 10,200 914,813
Merck & Co., Inc. 2,300 356,213
2,399,776
MEDICAL EQUIPMENT & SUPPLIES
- - 3.1%
Abbott Laboratories 13,800 662,400
Johnson & Johnson 3,800 308,750
971,150
TOTAL HEALTH 3,370,926
INDUSTRIAL MACHINERY &
EQUIPMENT - 1.6%
ELECTRICAL EQUIPMENT - 1.6%
General Electric Co. 5,600 506,800
MEDIA & LEISURE - 2.7%
BROADCASTING - 0.8%
Chris-Craft Industries, Inc. 4,900 226,625
Fox Entertainment Group, Inc. 1,000 23,625
(a)
250,250
RESTAURANTS - 1.9%
Tricon Global Restaurants, 13,100 596,869
Inc. (a)
TOTAL MEDIA & LEISURE 847,119
NONDURABLES - 14.7%
BEVERAGES - 2.3%
Coors (Adolph) Co. Class B 14,700 731,325
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
NONDURABLES - CONTINUED
FOODS - 5.6%
ConAgra, Inc. 10,800 $ 339,525
Heinz (H.J.) Co. 10,400 606,450
Horizon Organic Holding Corp. 300 4,838
(a)
Quaker Oats Co. 13,600 834,700
1,785,513
HOUSEHOLD PRODUCTS - 2.3%
Clorox Co. 6,600 733,013
TOBACCO - 4.5%
Philip Morris Companies, Inc. 25,800 1,443,179
TOTAL NONDURABLES 4,693,030
PRECIOUS METALS - 2.2%
Barrick Gold Corp. 29,200 580,933
Battle Mountain Gold Co. 26,900 126,094
707,027
RETAIL & WHOLESALE - 8.9%
DRUG STORES - 2.5%
Walgreen Co. 14,700 789,206
GENERAL MERCHANDISE STORES -
2.0%
Wal-Mart Stores, Inc. 8,600 647,688
GROCERY STORES - 4.4%
Albertson's, Inc. 18,200 1,038,538
Safeway, Inc. (a) 7,100 374,969
1,413,507
RETAIL & WHOLESALE,
MISCELLANEOUS - 0.0%
software.net Corp. (a) 100 2,175
TOTAL RETAIL & WHOLESALE 2,852,576
SERVICES - 0.0%
ADVERTISING - 0.0%
EarthWeb, Inc. (a) 300 12,075
Young & Rubicam, Inc. (a) 100 2,988
15,063
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TECHNOLOGY - 25.0%
COMMUNICATIONS EQUIPMENT - 0.7%
Carrier Access Corp. (a) 100 $ 2,675
Jabil Circuit, Inc. (a) 3,500 203,000
205,675
COMPUTER SERVICES & SOFTWARE
- - 8.7%
America Online, Inc. 7,800 682,988
broadcast.com, Inc. (a) 9,500 627,000
Ebay, Inc. (a) 100 19,763
Inktomi Corp. (a) 100 13,238
International Integration, 200 2,925
Inc. (a)
Microsoft Corp. (a) 11,700 1,427,400
MicroStrategy, Inc. Class A 100 2,250
(a)
2,775,564
COMPUTERS & OFFICE EQUIPMENT
- - 9.2%
Comdisco, Inc. 34,400 627,800
Dell Computer Corp. (a) 7,800 474,338
EMC Corp. (a) 9,600 696,000
Read-Rite Corp. (a) 32,900 442,094
Seagate Technology, Inc. (a) 23,200 684,400
2,924,632
ELECTRONIC INSTRUMENTS - 2.2%
Applied Materials, Inc. (a) 8,100 313,875
Teradyne, Inc. (a) 12,000 384,750
698,625
ELECTRONICS - 3.0%
Intel Corp. 5,600 602,700
Texas Instruments, Inc. 4,600 351,325
954,025
PHOTOGRAPHIC EQUIPMENT - 1.2%
Eastman Kodak Co. 5,400 391,838
TOTAL TECHNOLOGY 7,950,359
TRANSPORTATION - 3.3%
AIR TRANSPORTATION - 3.3%
Southwest Airlines Co. 48,600 1,044,900
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
UTILITIES - 6.2%
TELEPHONE SERVICES - 6.2%
AT&T Corp. 8,100 $ 504,731
MCI WorldCom, Inc. (a) 10,300 607,700
U.S. WEST, Inc. 13,700 852,825
1,965,256
TOTAL COMMON STOCKS 29,931,262
(Cost $25,641,995)
CASH EQUIVALENTS - 6.0%
Taxable Central Cash Fund (b) 1,922,407 1,922,407
(Cost $1,922,407)
TOTAL INVESTMENT IN $ 31,853,669
SECURITIES - 100%
(Cost $27,564,402)
LEGEND
(a) Non-income producing
(b) At period end, the seven-day yield on the Taxable Central Cash
Fund was 4.81%. The yield refers to the income earned by investing in
the fund over the seven-day period, expressed as an annual percentage.
INCOME TAX INFORMATION
At November 30, 1998, the aggregate cost of investment securities for
income tax purposes was $27,609,367. Net unrealized appreciation
aggregated $4,244,302, of which $4,662,860 related to appreciated
investment securities and $418,558 related to depreciated investment
securities.
At November 30, 1998, the fund had a capital loss carryforward of
approximately $333,000, all of which will expire on November 30, 2006.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1998
ASSETS
Investment in securities, at $ 31,853,669
value (cost $27,564,402) -
See accompanying schedule
Receivable for fund shares 65,324
sold
Dividends receivable 27,987
Interest receivable 6,475
Other receivables 4,748
TOTAL ASSETS 31,958,203
LIABILITIES
Payable to custodian bank $ 39,810
Payable for fund shares 64,294
redeemed
Accrued management fee 15,589
Distribution fees payable 16,929
Other payables and accrued 35,195
expenses
TOTAL LIABILITIES 171,817
NET ASSETS $ 31,786,386
Net Assets consist of:
Paid in capital $ 27,870,214
Accumulated undistributed net (373,104)
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 4,289,276
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS $ 31,786,386
STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
NOVEMBER 30, 1998
CALCULATION OF MAXIMUM $11.71
OFFERING PRICE CLASS A: NET
ASSET VALUE and redemption
price per share
($2,884,709 (divided by)
246,274 shares)
Maximum offering price per $12.42
share (100/94.25 of $11.71)
CLASS T: NET ASSET VALUE and $11.68
redemption price per share
($16,368,445 (divided by)
1,401,808 shares)
Maximum offering price per $12.10
share (100/96.50 of $11.68)
CLASS B: NET ASSET VALUE and $11.60
offering price per share
($10,994,205 (divided by)
947,526 shares) A
CLASS C: NET ASSET VALUE and $11.60
offering price per share
($482,208 (divided by)
41,580 shares) A
INSTITUTIONAL CLASS: NET $11.72
ASSET VALUE, offering price
and redemption price per
share ($1,056,819 (divided
by) 90,171 shares)
A REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1998
INVESTMENT INCOME $ 420,530
Dividends
Interest 164,569
TOTAL INCOME 585,099
EXPENSES
Management fee $ 208,740
Transfer agent fees 106,226
Distribution fees 220,230
Accounting fees and expenses 60,636
Non-interested trustees' 131
compensation
Custodian fees and expenses 9,339
Registration fees 58,404
Audit 23,151
Legal 503
Miscellaneous 2,846
Total expenses before 690,206
reductions
Expense reductions (21,762) 668,444
NET INVESTMENT INCOME (LOSS) (83,345)
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities (184,828)
Foreign currency transactions (1,585)
Futures contracts 67,131 (119,282)
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 2,192,093
Assets and liabilities in 12 2,192,105
foreign currencies
NET GAIN (LOSS) 2,072,823
NET INCREASE (DECREASE) IN $ 1,989,478
NET ASSETS RESULTING FROM
OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED NOVEMBER 30, 1998 DECEMBER 31, 1996
(COMMENCEMENT OF OPERATIONS)
TO NOVEMBER 30, 1997
INCREASE (DECREASE) IN NET
ASSETS
Operations Net investment $ (83,345) $ (240,135)
income (loss)
Net realized gain (loss) (119,282) 1,156,290
Change in net unrealized 2,192,105 2,097,171
appreciation (depreciation)
NET INCREASE (DECREASE) IN 1,989,478 3,013,326
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders
From net realized gain (868,298) -
In excess of net realized (347,228) -
gain
TOTAL DISTRIBUTIONS (1,215,526) -
Share transactions - net (7,523,571) 35,522,679
increase (decrease)
TOTAL INCREASE (DECREASE) (6,749,619) 38,536,005
IN NET ASSETS
NET ASSETS
Beginning of period 38,536,005 -
End of period $ 31,786,386 $ 38,536,005
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
YEARS ENDED NOVEMBER 30,
1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 11.38 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) .01 (.07)
D
Net realized and unrealized .69 1.45
gain (loss)
Total from investment .70 1.38
operations
Less Distributions
From net realized gain (.26) -
In excess of net realized (.11) -
gain
Total distributions (.37) -
Net asset value, end of period $ 11.71 $ 11.38
TOTAL RETURN B, C 6.53% 13.80%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 2,885 $ 5,376
(000 omitted)
Ratio of expenses to average 1.61% 1.75% A, F
net assets
Ratio of expenses to average 1.60% G 1.75% A
net assets after expense
reductions
Ratio of net investment .09% (.73)% A
income (loss) to average net
assets
Portfolio turnover 358% 213% A
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD DECEMBER 31, 1996 (COMMENCEMENT OF SALE OF CLASS A
SHARES) TO NOVEMBER 30, 1997.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - CLASS T
YEARS ENDED NOVEMBER 30,
1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 11.36 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) (.02) (.10)
D
Net realized and unrealized .70 1.46
gain (loss)
Total from investment .68 1.36
operations
Less Distributions
From net realized gain (.26) -
In excess of net realized (.10) -
gain
Total distributions (.36) -
Net asset value, end of period $ 11.68 $ 11.36
TOTAL RETURN B, C 6.35% 13.60%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 16,368 $ 20,283
(000 omitted)
Ratio of expenses to average 1.79% 2.00% A, F
net assets
Ratio of expenses to average 1.76% G 2.00% A
net assets after expense
reductions
Ratio of net investment (.11)% (1.00)% A
income (loss) to average net
assets
Portfolio turnover 358% 213% A
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD DECEMBER 31, 1996 (COMMENCEMENT OF SALE OF CLASS T
SHARES) TO NOVEMBER 30, 1997.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - CLASS B
YEARS ENDED NOVEMBER 30,
1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 11.31 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) (.09) (.15)
D
Net realized and unrealized .71 1.46
gain (loss)
Total from investment .62 1.31
operations
Less Distributions
From net realized gain (.24) -
In excess of net realized (.09) -
gain
Total distributions (.33) -
Net asset value, end of period $ 11.60 $ 11.31
TOTAL RETURN B, C 5.80% 13.10%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 10,994 $ 11,370
(000 omitted)
Ratio of expenses to average 2.24% 2.50% A, F
net assets
Ratio of expenses to average 2.22% G 2.50% A
net assets after expense
reductions
Ratio of net investment (.58)% (1.51)% A
income (loss) to average net
assets
Portfolio turnover 358% 213% A
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE
AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD DECEMBER 31, 1996 (COMMENCEMENT OF SALE OF CLASS B
SHARES) TO NOVEMBER 30, 1997.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - CLASS C
YEARS ENDED NOVEMBER 30,
1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 11.36 $ 11.85
period
Income from Investment
Operations
Net investment income (loss) (.14) -
D
Net realized and unrealized .74 (.49)
gain (loss)
Total from investment .60 (.49)
operations
Less Distributions
From net realized gain (.26) -
In excess of net realized (.10) -
gain
Total distributions (.36) -
Net asset value, end of period $ 11.60 $ 11.36
TOTAL RETURN B, C 5.62% (4.14)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 482 $ 48
(000 omitted)
Ratio of expenses to average 2.50% F 2.50% A, F
net assets
Ratio of expenses to average 2.47% G 2.50% A
net assets after expense
reductions
Ratio of net investment (.88)% (.60)% A
income (loss) to average net
assets
Portfolio turnover 358% 213% A
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE
AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD NOVEMBER 3, 1997 (COMMENCEMENT OF SALE OF CLASS C
SHARES) TO NOVEMBER 30, 1997.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
YEARS ENDED NOVEMBER 30,
1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 11.40 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) .03 (.04)
D
Net realized and unrealized .68 1.44
gain (loss)
Total from investment .71 1.40
operations
Less Distributions
From net realized gain (.28) -
In excess of net realized (.11) -
gain
Total distributions (.39) -
Net asset value, end of period $ 11.72 $ 11.40
TOTAL RETURN B, C 6.63% 14.00%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 1,057 $ 1,459
(000 omitted)
Ratio of expenses to average 1.50% F 1.50% A, F
net assets
Ratio of expenses to average 1.48% G 1.50% A
net assets after expense
reductions
Ratio of net investment .17% (.42)% A
income (loss) to average net
assets
Portfolio turnover 358% 213% A
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD DECEMBER 31, 1996 (COMMENCEMENT OF SALE OF
INSTITUTIONAL CLASS SHARES) TO NOVEMBER 30, 1997.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1998
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor TechnoQuant Growth Fund (the fund) is a fund of
Fidelity Advisor Series I (the trust) and is authorized to issue an
unlimited number of shares. The trust is registered under the
Investment Company Act of 1940, as amended (the 1940 Act), as an
open-end management investment company organized as a Massachusetts
business trust.
The fund offers Class A, Class T, Class B, Class C, and Institutional
Class shares, each of which has equal rights as to assets and voting
privileges. Each class has exclusive voting rights with respect to
matters that affect that class. Class B shares will automatically
convert to Class A shares after a holding period of seven years from
the initial date of purchase. Investment income, realized and
unrealized capital gains and losses, the common expenses of the fund,
and certain fund-level expense reductions, if any, are allocated on a
pro rata basis to each class based on the relative net assets of each
class to the total net assets of the fund. Each class of shares
differs in its respective distribution, transfer agent, and certain
other class-specific fees, expenses, and expense reductions.
The financial statements have been prepared in conformity with
generally accepted accounting principles which require management to
make certain estimates and assumptions at the date of the financial
statements. The following summarizes the significant accounting
policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Securities for which exchange
quotations are not readily available (and in certain cases debt
securities which trade on an exchange) are valued primarily using
dealer-supplied valuations or at their fair value as determined in
good faith under consistently applied procedures under the general
supervision of the Board of Trustees. Short-term securities with
remaining maturities of sixty days or less for which quotations are
not readily available are valued at amortized cost or original cost
plus accrued interest, both of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases
and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
and settlement date on purchases and sales of securities. The effects
of changes in foreign currency exchange rates on investments in
securities are included with the net realized and unrealized gain or
loss on investment securities.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent that it distributes substantially all of
its taxable income for its fiscal year. The schedule of investments
includes information regarding income taxes under the caption "Income
Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend
date, except certain dividends from foreign securities where the
ex-dividend date may have passed, are recorded as soon as the fund is
informed of the ex-dividend date. Non-cash dividends included in
dividend income, if any, are recorded at the fair market value of the
securities received. Interest income is accrued as earned. Investment
income is recorded net of foreign taxes withheld where recovery of
such taxes is uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date. Income dividends and capital gain distributions are
declared separately for each class.
Income and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. These differences, which may result in
distribution reclassifications, are primarily due to differing
treatments for foreign currency transactions, capital loss
carryforwards, and losses deferred due to wash sales. The fund also
utilized earnings and profits distributed to shareholders on
redemption of shares as a part of the dividends paid deduction for
income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Accumulated undistributed net realized gain (loss) on investments and
foreign currency transactions may include temporary book and tax basis
differences that will reverse in a subsequent period. Any taxable gain
remaining at fiscal year end is distributed in the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the contracts'
terms. The U.S. dollar value of foreign currency contracts is
determined using contractual currency exchange rates established at
the time of each trade.
2. OPERATING POLICIES - CONTINUED
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with
other affiliated entities of Fidelity Management & Research Company
(FMR), may transfer uninvested cash balances into one or more joint
trading accounts. These balances are invested in one or more
repurchase agreements for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are
marked-to-market daily and maintained at a value at least equal to the
principal amount of the repurchase agreement (including accrued
interest). FMR, the fund's investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
TAXABLE CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by
the SEC, the fund may invest in the Taxable Central Cash Fund (the
Cash Fund) managed by Fidelity Investments Money Management, Inc., an
affiliate of FMR. The Cash Fund is an open-end money market fund
available only to investment companies and other accounts managed by
FMR and its affiliates. The Cash Fund seeks preservation of capital,
liquidity, and current income by investing in U.S. Treasury securities
and repurchase agreements for these securities. Income distributions
from the Cash Fund are declared daily and paid monthly from net
interest income. Income distributions earned by the fund are recorded
as interest income in the accompanying financial statements.
FUTURES CONTRACTS. The fund may use futures contracts to manage its
exposure to the stock markets. Buying futures tends to increase the
fund's exposure to the underlying instrument, while selling futures
tends to decrease the fund's exposure to the underlying instrument or
hedge other fund investments. Losses may arise from changes in the
value of the underlying instruments or if the counterparties do not
perform under the contracts' terms. Gains (losses) are realized upon
the expiration or closing of the futures contracts. Futures contracts
are valued at the settlement price established each day by the board
of trade or exchange on which they are traded.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $115,212,730 and $123,645,583, respectively.
The market value of futures contracts opened and closed during the
period amounted to $17,784,197 and $17,851,328, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus a
fixed individual fund fee rate applied to the average net assets of
the fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds advised by FMR. The rates ranged from .2500% to .5200% for the
period. The annual individual fund fee rate is .30%. In the event that
these rates were lower than the contractual rates in effect during the
period, FMR voluntarily implemented the above rates, as they resulted
in the same or a lower management fee. For the period, the management
fee was equivalent to an annual rate of .59% of average net assets .
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the
1940 Act, the Trustees have adopted separate distribution plans with
respect to each class of shares (collectively referred to as "the
Plans"). Under certain of the Plans, the class pays Fidelity
Distributors Corporation (FDC), an affiliate of FMR, a distribution
and service fee. A portion of this fee may be reallowed to securities
dealers, banks and other financial institutions for the distribution
of each class of shares and providing shareholder support services.
For the period, this fee was based on the following annual rates of
the average net assets of each applicable class:
CLASS A .25%
CLASS T .50%
CLASS B 1.00%*
CLASS C 1.00%*
* .75% REPRESENTS A DISTRIBUTION FEE AND .25% REPRESENTS A SHAREHOLDER
SERVICE FEE.
For the period, each class paid FDC the following amounts, a portion
of which was retained by FDC:
PAID TO FDC RETAINED BY FDC
CLASS A $ 9,638 $ 73
CLASS T 91,619 2,621
CLASS B 116,202 87,319
CLASS C 2,771 2,744
$ 220,230 $ 92,757
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
DISTRIBUTION AND SERVICE PLAN - CONTINUED
Under the Plans, FMR may use its resources to pay administrative and
promotional expenses related to the sale of each class' shares. The
Plans also authorize payments to third parties that assist in the sale
of each class' shares or render shareholder support services. For the
period, the following amounts were paid to third parties under the
Plans:
CLASS A $ 3,231
CLASS T 6,191
CLASS B 5,111
CLASS C 1,185
INSTITUTIONAL CLASS 117
SALES LOAD. FDC receives a front-end sales charge of up to 5.75% for
selling Class A shares, and 3.50% for selling Class T shares of the
fund. FDC receives the proceeds of contingent deferred sales charges
levied on Class B share redemptions occurring within six years of
purchase and Class C share redemptions occurring within one year of
purchase. Contingent deferred sales charges are based on declining
rates ranging from 5% to 1% for Class B and 1% for Class C, of the
lesser of the cost of shares at the initial date of purchase or the
net asset value of the redeemed shares, excluding any reinvested
dividends and capital gains. In addition, purchases of Class A and
Class T shares that were subject to a finder's fee bear a contingent
deferred sales charge on assets that do not remain in the fund for at
least one year. The Class A and Class T contingent deferred sales
charge is based on 0.25% of the lesser of the cost of shares at the
initial date of purchase or the net asset value of the redeemed
shares, excluding any reinvested dividends and capital gains. A
portion of the sales charges paid to FDC are paid to securities
dealers, banks and other financial institutions.
For the period, sales charge amounts paid to and retained by FDC were
as follows:
PAID TO FDC RETAINED BY FDC
CLASS A $ 17,545 $ 5,286
CLASS T 45,229 11,046
CLASS B 47,726 47,726*
CLASS C 422 422*
$ 110,922 $ 64,480
* WHEN CLASS B AND CLASS C SHARES ARE INITIALLY SOLD, FDC PAYS
COMMISSIONS FROM ITS OWN RESOURCES TO SECURITIES DEALERS,
BANKS, AND OTHER FINANCIAL INSTITUTIONS THROUGH WHICH THE SALES ARE
MADE.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
TRANSFER AGENT FEES. Fidelity Investments Institutional Operations
Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend
disbursing and shareholder servicing agent for each class of the fund.
FIIOC receives account fees and asset-based fees that vary according
to the account size and type of account of the shareholders of the
respective classes of the fund. FIIOC pays for typesetting, printing
and mailing of all shareholder reports, except proxy statements. For
the period, the following amounts were paid to FIIOC:
AMOUNT % OF AVERAGE NET ASSETS
CLASS A $ 11,073 .29
CLASS T 59,759 .33
CLASS B 31,152 .27
CLASS C 1,709 .62
INSTITUTIONAL CLASS 2,533 .20
$ 106,226
ACCOUNTING FEES. Fidelity Service Company, Inc. (FSC), an affiliate of
FMR, maintains the fund's accounting records. The fee is based on the
level of average net assets for the month plus out-of-pocket expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $22,210 for the
period.
5. EXPENSE REDUCTIONS.
FMR voluntarily agreed to reimburse operating expenses (excluding
interest, taxes, brokerage commissions and extraordinary expenses)
above the following annual rates or range of annual rates of average
net assets for each of the following classes:
FMR EXPENSE LIMITATIONS REIMBURSEMENT
CLASS A 1.75% $ -
CLASS T 2.00% -
CLASS B 2.50% -
CLASS C 2.50% 12,165
INSTITUTIONAL CLASS 1.50% 1,714
$ 13,879
5. EXPENSE REDUCTIONS - CONTINUED
Effective December 1, 1998, Class A, Class T, Class B, Class C, and
the Institutional Class expense limitations were changed to 1.30%,
1.55%, 2.05%, 2.05%, and 1.05% of each class' average net assets,
respectively.
FMR has also directed certain portfolio trades to brokers who paid a
portion of the fund's expenses. For the period, the fund's expenses
were reduced by $7,243 under this arrangement.
In addition, the fund has entered into an arrangements with its
custodian whereby credits realized as a result of uninvested cash
balances were used to reduce a portion of expenses. During the period,
the fund's custodian fees were reduced by $640 under the custodian
arrangement.
6. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
YEARS ENDED NOVEMBER 30,
1998 1997
FROM NET REALIZED GAIN
Class A $ 126,919 $ -
Class T 463,390 -
Class B 240,581 -
Class C 1,353 -
Institutional Class 36,055 -
Total $ 868,298 $ -
IN EXCESS OF NET REALIZED GAIN
Class A $ 50,754 $ -
Class T 185,307 -
Class B 96,208 -
Class C 541 -
Institutional Class 14,418 -
Total $ 347,228 $ -
$ 1,215,526 $ -
7. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SHARES DOLLARS
YEAR ENDED NOVEMBER 30, YEAR ENDED NOVEMBER 30, YEAR ENDED NOVEMBER 30, YEAR ENDED NOVEMBER 30,
1998 1997 A, B 1998 1997 A, B
CLASS A Shares sold 87,524 571,771 $ 966,657 $ 5,930,301
Reinvestment of distributions 9,071 - 95,223 -
Shares redeemed (322,594) (99,498) (3,572,279) (1,090,791)
Net increase (decrease) (225,999) 472,273 $ (2,510,399) $ 4,839,510
CLASS T Shares sold 351,393 2,073,347 $ 3,954,534 $ 21,705,071
Reinvestment of distributions 55,234 - 578,731 -
Shares redeemed (790,294) (287,872) (8,857,682) (3,025,861)
Net increase (decrease) (383,667) 1,785,475 $ (4,324,417) $ 18,679,210
CLASS B Shares sold 201,347 1,069,604 $ 2,255,629 $ 11,365,164
Reinvestment of distributions 19,253 - 201,351 -
Shares redeemed (278,555) (64,123) (3,122,196) (703,523)
Net increase (decrease) (57,955) 1,005,481 $ (665,216) $ 10,661,641
CLASS C Shares sold 48,781 4,268 $ 545,490 $ 49,053
Reinvestment of distributions 105 - 1,104 -
Shares redeemed (11,574) - (132,749) -
Net increase (decrease) 37,312 4,268 $ 413,845 $ 49,053
INSTITUTIONAL CLASS Shares 14,757 139,871 $ 165,746 $ 1,425,408
sold
Reinvestment of distributions 4,196 - 44,046 -
Shares redeemed (56,711) (11,942) (647,176) (132,143)
Net increase (decrease) (37,758) 127,929 $ (437,384) $ 1,293,265
</TABLE>
A SHARE TRANSACTIONS FOR CLASS A, CLASS T, CLASS B AND INSTITUTIONAL
CLASS ARE FOR THE PERIOD DECEMBER 31, 1996 (COMMENCEMENT OF SALE OF
SHARES) TO
NOVEMBER 30, 1997.
B SHARE TRANSACTIONS FOR CLASS C ARE FOR THE PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO NOVEMBER 30, 1997.
8. REGISTRATION FEES.
For the period, each class paid the following amounts to register its
shares for sale:
REGISTRATION FEES
CLASS A $ 8,311
CLASS T 17,716
CLASS B 12,765
CLASS C 12,225
INSTITUTIONAL CLASS 7,387
$ 58,404
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Advisor Series I and the Shareholders of
Fidelity Advisor TechnoQuant Growth Fund:
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of
Fidelity Advisor TechnoQuant Growth Fund (a fund of Fidelity Advisor
Series I) at November 30, 1998, and the results of its operations, the
changes in its net assets and the financial highlights for the periods
indicated, in conformity with generally accepted accounting
principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the
responsibility of the Fidelity Advisor TechnoQuant Growth Fund's
management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of
these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which
included confirmation of securities at November 30, 1998 by
correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
January 13, 1999
DISTRIBUTIONS
A total of 14.92% Institutional Class' dividends distributed during
the fiscal year qualifies for the dividends-received deductions for
corporate shareholders.
The fund will notify shareholders in January 1999 of these percentages
for use in preparing 1998 income tax returns.
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.)
Inc., London, England
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Robert A. Lawrence, Vice President
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
* INDEPENDENT TRUSTEES
ADVISORY BOARD
J. Gary Burkhead
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Investments Institutional
Operations Company
Boston, MA
CUSTODIAN
The Chase Manhattan Bank
New York, NY
FOCUS FUNDS
Fidelity Advisor Consumer
Industries Fund
Fidelity Advisor Cyclical
Industries Fund
Fidelity Advisor Financial
Services Fund
Fidelity Advisor Health Care Fund
Fidelity Advisor Natural
Resources Fund
Fidelity Advisor Technology Fund
Fidelity Advisor Utilities Growth Fund
GROWTH FUNDS
Fidelity Advisor Latin America Fund
Fidelity Advisor Japan Fund
Fidelity Advisor Europe Capital Appreciation Fund
Fidelity Advisor International Capital Appreciation Fund
Fidelity Advisor Overseas Fund
Fidelity Advisor Diversified International Fund
Fidelity Advisor Global Equity Fund
Fidelity Advisor TechnoQuant
Growth Fund
SM
Fidelity Advisor Small Cap Fund
Fidelity Advisor Strategic
Opportunities Fund
Fidelity Advisor Mid Cap Fund
Fidelity Advisor Retirement
Growth Fund
Fidelity Advisor Equity Growth Fund
Fidelity Advisor Large Cap Fund
Fidelity Advisor Dividend Growth Fund
Fidelity Advisor Growth
Opportunities Fund
GROWTH AND INCOME FUNDS
Fidelity Advisor Growth & Income Fund
Fidelity Advisor Equity Income Fund
Fidelity Advisor Asset Allocation Fund
Fidelity Advisor Balanced Fund
TAXABLE INCOME FUNDS
Fidelity Advisor Emerging Markets Income Fund
Fidelity Advisor High Yield Fund
Fidelity Advisor Strategic Income Fund
Fidelity Advisor Mortgage
Securities Fund
Fidelity Advisor Government Investment Fund
Fidelity Advisor Intermediate Bond Fund
Fidelity Advisor Short Fixed-Income Fund
MUNICIPAL FUNDS
Fidelity Advisor Municipal Income Fund
Fidelity Advisor Intermediate Municipal Income Fund
MONEY MARKET FUNDS
Prime Fund
Treasury Fund
Tax-Exempt Fund
(registered trademark)
(2_FIDELITY_LOGOS)FIDELITY ADVISOR
(registered trademark)
EQUITY GROWTH
FUND - CLASS A, CLASS T, CLASS B AND CLASS C
ANNUAL REPORT
NOVEMBER 30, 1998
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over
time.
FUND TALK 12 The manager's review of fund
performance, strategy and
outlook.
INVESTMENT CHANGES 15 A summary of major shifts in
the fund's investments over
the past six months.
INVESTMENTS 16 A complete list of the fund's
investments with their
market value.
FINANCIAL STATEMENTS 25 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 34 Notes to the financial
statements.
REPORT OF INDEPENDENT 43 The auditors' opinion.
ACCOUNTANTS
DISTRIBUTIONS 44
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION
OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS
IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT
INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY ADVISOR FUND, INCLUDING CHARGES
AND EXPENSES, CONTACT YOUR
INVESTMENT PROFESSIONAL FOR A FREE PROSPECTUS. READ IT CAREFULLY
BEFORE YOU INVEST OR SEND MONEY.
Standard & Poor's, S&P and S&P 500 are registered service marks of The
McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity
Distributors Corporation.
Other third party marks appearing herein are the property of their
respective owners.
All other marks appearing herein are registered or unregistered
trademarks or service marks of FMR Corp. or an affiliated company.
This report is printed on recycled paper using soy-based inks.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
The month of November proved to be a strong one for the stock and bond
markets. The Dow Jones Industrial Average reached a record high.
Merger activity, which had lulled during the summer correction, has
increased significantly. Small-cap stocks posted their third
consecutive month of positive returns, as did emerging markets. While
bond returns generally were not at the levels of their equity
counterparts, they were mostly positive nonetheless.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will
greatly reduce your vulnerability to any single decline. We know from
experience, for example, that stock prices have gone up over longer
periods of time, have significantly outperformed other types of
investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through
diversification. A stock mutual fund, for instance, is already
diversified, because it invests in many different companies. You can
increase your diversification further by investing in a number of
different stock funds, or in such other investment categories as
bonds. If you have a short investment time horizon, you might want to
consider moving some of your investment into a money market fund,
which seeks income and a stable share price by investing in
high-quality, short-term investments. Of course, it's important to
remember that there is no assurance that a money market fund will
achieve its goal of maintaining a stable net asset value of $1.00 per
share, and that these types of funds are neither insured nor
guaranteed by any agency of the U.S. government.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases. Of course, you should
consider your financial ability to continue your purchases through
periods of low price levels before undertaking such a strategy.
Remember to contact your investment professional if you need help with
your investments.
Best regards,
Edward C. Johnson 3d
FIDELITY ADVISOR EQUITY GROWTH FUND - CLASS A
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can
look at the total percentage change in value, the average annual
percentage change or the growth of a hypothetical $10,000 investment.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). The initial offering of Class A shares took place on September
3, 1996. Class A shares bear a 0.25% 12b-1 fee that is reflected in
returns after September 3, 1996. Returns between September 10, 1992
(the date Class T shares were first offered) and September 3, 1996 are
those of Class T and reflect Class T shares' 0.50% 12b-1 fee (0.65%
prior to January 1, 1996). Returns prior to September 10, 1992 are
those of Institutional Class, the original class of the fund, which
does not bear a 12b-1 fee. Had Class A shares' 12b-1 fee been
reflected, returns prior to September 10, 1992 would have been lower.
If Fidelity had not reimbursed certain class expenses, the past five
years and past 10 years total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
1998
FIDELITY ADV EQUITY GROWTH - 28.21% 161.78% 756.23%
CL A
FIDELITY ADV EQUITY GROWTH - 20.84% 146.73% 707.00%
CL A (INCL. 5.75% SALES
CHARGE)
S&P 500(registered trademark) 23.66% 181.25% 457.74%
Growth Funds Average 14.32% 127.55% 363.55%
CUMULATIVE TOTAL RETURNS show Class A's performance in percentage
terms over a set period - in this case, one year, five years or 10
years. For example, if you had invested $1,000 in a fund that had a 5%
return over the past year, the value of your investment would be
$1,050. You can compare Class A's returns to those of the Standard &
Poor's 500 Index - a market capitalization-weighted index of common
stocks. To measure how Class A's performance stacked up against its
peers, you can compare it to the growth funds average, which reflects
the performance of mutual funds with similar objectives tracked by
Lipper Analytical Services, Inc. The past one year average represents
a peer group of 961 mutual funds. These benchmarks include reinvested
dividends and capital gains, if any, and exclude the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
1998
FIDELITY ADV EQUITY GROWTH - 28.21% 21.22% 23.95%
CL A
FIDELITY ADV EQUITY GROWTH - 20.84% 19.80% 23.22%
CL A (INCL. 5.75% SALES
CHARGE)
S&P 500 23.66% 22.98% 18.75%
Growth Funds Average 14.32% 17.48% 16.16%
AVERAGE ANNUAL TOTAL RETURNS take Class A's cumulative return and show
you what would have happened if Class A had performed at a constant
rate each year.
$10,000 OVER 10 YEARS
FA Equity Growth -CL A S&P 500
00245 SP001
1988/11/30 9425.00 10000.00
1988/12/31 9859.46 10175.00
1989/01/31 10636.36 10919.81
1989/02/28 10644.37 10647.91
1989/03/31 10996.78 10896.00
1989/04/30 11725.62 11461.51
1989/05/31 12734.80 11925.70
1989/06/30 12262.25 11857.72
1989/07/31 13103.23 12928.47
1989/08/31 13615.82 13181.87
1989/09/30 13992.26 13127.82
1989/10/31 13816.05 12823.26
1989/11/30 13872.12 13084.85
1989/12/31 14280.57 13398.89
1990/01/31 12969.84 12499.82
1990/02/28 13492.30 12661.07
1990/03/31 14280.57 12996.59
1990/04/30 13996.43 12671.68
1990/05/31 15985.44 13907.16
1990/06/30 16122.93 13812.60
1990/07/31 15664.63 13768.40
1990/08/31 13666.45 12523.73
1990/09/30 12539.04 11913.83
1990/10/31 12694.86 11862.60
1990/11/30 14253.07 12628.92
1990/12/31 15270.50 12981.27
1991/01/31 17488.66 13547.25
1991/02/28 19065.20 14515.88
1991/03/31 20935.06 14867.16
1991/04/30 20861.73 14902.84
1991/05/31 21952.48 15546.65
1991/06/30 20128.46 14834.61
1991/07/31 21760.00 15525.90
1991/08/31 22933.24 15893.87
1991/09/30 22988.24 15628.44
1991/10/31 23052.40 15837.86
1991/11/30 22254.96 15199.60
1991/12/31 25151.67 16938.43
1992/01/31 25855.95 16623.37
1992/02/29 25988.86 16839.48
1992/03/31 24762.00 16511.11
1992/04/30 24250.82 16996.54
1992/05/31 24138.35 17079.82
1992/06/30 23340.90 16825.33
1992/07/31 24158.80 17513.49
1992/08/31 23576.05 17154.46
1992/09/30 24015.67 17356.88
1992/10/31 25273.19 17417.63
1992/11/30 26919.22 18011.57
1992/12/31 27639.74 18233.11
1993/01/31 28413.64 18386.27
1993/02/28 27671.68 18636.33
1993/03/31 28539.04 19029.55
1993/04/30 28058.34 18569.04
1993/05/31 29678.09 19066.69
1993/06/30 29793.04 19121.98
1993/07/31 29280.99 19045.49
1993/08/31 30346.89 19767.32
1993/09/30 31235.15 19615.11
1993/10/31 31611.35 20021.14
1993/11/30 30827.59 19830.94
1993/12/31 31745.37 20070.89
1994/01/31 32853.23 20753.30
1994/02/28 32578.73 20190.89
1994/03/31 31250.10 19310.57
1994/04/30 31579.51 19557.74
1994/05/31 31381.87 19878.49
1994/06/30 30009.32 19391.47
1994/07/31 30646.18 20027.51
1994/08/31 32029.71 20848.63
1994/09/30 31370.89 20337.84
1994/10/31 32392.06 20795.44
1994/11/30 31315.98 20038.07
1994/12/31 31464.33 20335.24
1995/01/31 31186.96 20862.53
1995/02/28 32385.18 21675.54
1995/03/31 33605.59 22315.19
1995/04/30 35058.98 22972.37
1995/05/31 36268.30 23890.58
1995/06/30 39030.85 24445.56
1995/07/31 41937.64 25256.17
1995/08/31 42370.33 25319.56
1995/09/30 43557.46 26388.05
1995/10/31 43335.57 26293.84
1995/11/30 44189.85 27448.14
1995/12/31 43779.21 27976.80
1996/01/31 44803.90 28929.13
1996/02/29 45801.37 29197.30
1996/03/31 46118.21 29478.47
1996/04/30 47491.20 29912.98
1996/05/31 48770.30 30684.44
1996/06/30 48148.35 30801.34
1996/07/31 45226.36 29440.54
1996/08/31 46282.50 30061.44
1996/09/30 49392.25 31753.30
1996/10/31 49626.95 32629.06
1996/11/30 52572.41 35095.49
1996/12/31 50876.97 34400.24
1997/01/31 53921.05 36549.57
1997/02/28 52678.97 36836.12
1997/03/31 49744.24 35322.52
1997/04/30 52264.94 37431.28
1997/05/31 55954.66 39710.10
1997/06/30 58256.17 41489.11
1997/07/31 62652.17 44790.40
1997/08/31 60168.00 42281.24
1997/09/30 63638.53 44596.98
1997/10/31 61166.54 43107.44
1997/11/30 62944.43 45102.89
1997/12/31 63032.29 45877.30
1998/01/31 63821.31 46384.71
1998/02/28 68679.39 49729.97
1998/03/31 71052.91 52276.64
1998/04/30 72413.17 52802.54
1998/05/31 70525.46 51894.87
1998/06/30 74953.26 54002.84
1998/07/31 76466.20 53427.71
1998/08/31 63987.87 45703.13
1998/09/30 70525.46 48630.87
1998/10/31 75452.94 52586.51
1998/11/30 80699.67 55773.78
IMATRL PRASUN SHR__CHT 19981130 19981223 141231 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Equity Growth Fund - Class A on November
30, 1988, and the current 5.75% sales charge was paid. As the chart
shows, by November 30, 1998, the value of the investment would have
grown to $80,700 - a 707.00% increase on the initial investment. For
comparison, look at how the Standard & Poor's 500 Index did over the
same period. With dividends and capital gains, if any, reinvested, the
same $10,000 investment would have grown to $55,774 - a 457.74%
increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
long-term growth and
short-term volatility. In turn, the
share price and return of a
fund that invests in stocks will
vary. That means if you sell
your shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
FIDELITY ADVISOR EQUITY GROWTH FUND - CLASS T
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can
look at the total percentage change in value, the average annual
percentage change or the growth of a hypothetical $10,000 investment.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). The initial offering of Class T shares took place on September
10, 1992. Class T shares bear a 0.50% 12b-1 fee (0.65% prior to
January 1, 1996) that is reflected in returns after September 10,
1992. Returns prior to that date are those of the Institutional Class,
the original class of the fund, which does not bear a 12b-1 fee. Had
Class T shares' 12b-1 fee been reflected, returns prior to September
10, 1992 would have been lower. If Fidelity had not reimbursed certain
class expenses, the past five years and past 10 years total returns
would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
1998
FIDELITY ADV EQUITY GROWTH - 28.00% 161.60% 755.64%
CL T
FIDELITY ADV EQUITY GROWTH - 23.52% 152.44% 725.69%
CL T (INCL. 3.50% SALES
CHARGE)
S&P 500 23.66% 181.25% 457.74%
Growth Funds Average 14.32% 127.55% 363.55%
CUMULATIVE TOTAL RETURNS show Class T's performance in percentage
terms over a set period - in this case, one year, five years or 10
years. For example, if you had invested $1,000 in a fund that had a 5%
return over the past year, the value of your investment would be
$1,050. You can compare Class T's returns to those of the Standard &
Poor's 500 Index - a market capitalization-weighted index of common
stocks. To measure how Class T's performance stacked up against its
peers, you can compare it to the growth funds average, which reflects
the performance of mutual funds with similar objectives tracked by
Lipper Analytical Services, Inc. The past one year average represents
a peer group of 961 mutual funds. These benchmarks include reinvested
dividends and capital gains, if any, and exclude the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
1998
FIDELITY ADV EQUITY GROWTH - 28.00% 21.21% 23.94%
CL T
FIDELITY ADV EQUITY GROWTH - 23.52% 20.35% 23.50%
CL T (INCL. 3.50% SALES
CHARGE)
S&P 500 23.66% 22.98% 18.75%
Growth Funds Average 14.32% 17.48% 16.16%
AVERAGE ANNUAL TOTAL RETURNS take Class T's cumulative return and show
you what would have happened if Class T had performed at a constant
rate each year.
$10,000 OVER 10 YEARS
FA Equity Growth -CL T S&P 500
00286 SP001
1988/11/30 9650.00 10000.00
1988/12/31 10094.83 10175.00
1989/01/31 10890.28 10919.81
1989/02/28 10898.48 10647.91
1989/03/31 11259.30 10896.00
1989/04/30 12005.55 11461.51
1989/05/31 13038.81 11925.70
1989/06/30 12554.98 11857.72
1989/07/31 13416.03 12928.47
1989/08/31 13940.87 13181.87
1989/09/30 14326.29 13127.82
1989/10/31 14145.88 12823.26
1989/11/30 14203.28 13084.85
1989/12/31 14621.49 13398.89
1990/01/31 13279.46 12499.82
1990/02/28 13814.40 12661.07
1990/03/31 14621.49 12996.59
1990/04/30 14330.56 12671.68
1990/05/31 16367.06 13907.16
1990/06/30 16507.83 13812.60
1990/07/31 16038.59 13768.40
1990/08/31 13992.71 12523.73
1990/09/30 12838.38 11913.83
1990/10/31 12997.92 11862.60
1990/11/30 14593.33 12628.92
1990/12/31 15635.04 12981.27
1991/01/31 17906.16 13547.25
1991/02/28 19520.34 14515.88
1991/03/31 21434.84 14867.16
1991/04/30 21359.76 14902.84
1991/05/31 22476.55 15546.65
1991/06/30 20608.98 14834.61
1991/07/31 22279.47 15525.90
1991/08/31 23480.72 15893.87
1991/09/30 23537.03 15628.44
1991/10/31 23602.72 15837.86
1991/11/30 22786.25 15199.60
1991/12/31 25752.11 16938.43
1992/01/31 26473.20 16623.37
1992/02/29 26609.28 16839.48
1992/03/31 25353.14 16511.11
1992/04/30 24829.75 16996.54
1992/05/31 24714.60 17079.82
1992/06/30 23898.11 16825.33
1992/07/31 24735.54 17513.49
1992/08/31 24138.87 17154.46
1992/09/30 24588.99 17356.88
1992/10/31 25876.53 17417.63
1992/11/30 27561.86 18011.57
1992/12/31 28299.58 18233.11
1993/01/31 29091.95 18386.27
1993/02/28 28332.28 18636.33
1993/03/31 29220.34 19029.55
1993/04/30 28728.16 18569.04
1993/05/31 30386.59 19066.69
1993/06/30 30504.28 19121.98
1993/07/31 29980.01 19045.49
1993/08/31 31071.35 19767.32
1993/09/30 31980.81 19615.11
1993/10/31 32365.99 20021.14
1993/11/30 31563.53 19830.94
1993/12/31 32503.22 20070.89
1994/01/31 33637.53 20753.30
1994/02/28 33356.47 20190.89
1994/03/31 31996.13 19310.57
1994/04/30 32333.40 19557.74
1994/05/31 32131.04 19878.49
1994/06/30 30725.72 19391.47
1994/07/31 31377.79 20027.51
1994/08/31 32794.34 20848.63
1994/09/30 32119.79 20337.84
1994/10/31 33165.34 20795.44
1994/11/30 32063.58 20038.07
1994/12/31 32215.47 20335.24
1995/01/31 31931.48 20862.53
1995/02/28 33158.30 21675.54
1995/03/31 34407.84 22315.19
1995/04/30 35895.93 22972.37
1995/05/31 37134.12 23890.58
1995/06/30 39962.63 24445.56
1995/07/31 42938.81 25256.17
1995/08/31 43381.83 25319.56
1995/09/30 44597.29 26388.05
1995/10/31 44370.10 26293.84
1995/11/30 45244.78 27448.14
1995/12/31 44824.34 27976.80
1996/01/31 45873.49 28929.13
1996/02/29 46894.77 29197.30
1996/03/31 47219.18 29478.47
1996/04/30 48624.94 29912.98
1996/05/31 49934.58 30684.44
1996/06/30 49297.78 30801.34
1996/07/31 46306.03 29440.54
1996/08/31 47387.39 30061.44
1996/09/30 50571.38 31753.30
1996/10/31 50823.69 32629.06
1996/11/30 53839.47 35095.49
1996/12/31 52105.41 34400.24
1997/01/31 55232.95 36549.57
1997/02/28 53966.94 36836.12
1997/03/31 50963.26 35322.52
1997/04/30 53557.35 37431.28
1997/05/31 57355.39 39710.10
1997/06/30 59713.65 41489.11
1997/07/31 64243.99 44790.40
1997/08/31 61699.55 42281.24
1997/09/30 65236.95 44596.98
1997/10/31 62680.09 43107.44
1997/11/30 64504.64 45102.89
1997/12/31 64574.69 45877.30
1998/01/31 65389.90 46384.71
1998/02/28 70364.60 49729.97
1998/03/31 72788.54 52276.64
1998/04/30 74155.52 52802.54
1998/05/31 72224.83 51894.87
1998/06/30 76748.57 54002.84
1998/07/31 78284.67 53427.71
1998/08/31 65488.54 45703.13
1998/09/30 72182.55 48630.87
1998/10/31 77213.63 52586.51
1998/11/30 82568.84 55773.78
IMATRL PRASUN SHR__CHT 19981130 19981228 154456 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Equity Growth Fund - Class T on November
30, 1988, and the current 3.50% sales charge was paid. As the chart
shows, by November 30, 1998, the value of the investment would have
grown to $82,569 - a 725.69% increase on the initial investment. For
comparison, look at how the Standard & Poor's 500 Index did over the
same period. With dividends and capital gains, if any, reinvested, the
same $10,000 investment would have grown to $55,774 - a 457.74%
increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
long-term growth and
short-term volatility. In turn, the
share price and return of a
fund that invests in stocks will
vary. That means if you sell
your shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
FIDELITY ADVISOR EQUITY GROWTH FUND - CLASS B
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can
look at the total percentage change in value, the average annual
percentage change or the growth of a hypothetical $10,000 investment.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). The initial offering of Class B shares took place on December
31, 1996. Class B shares bear a 1.00% 12b-1 fee that is reflected in
returns after December 31, 1996. Returns between September 10, 1992
(the date Class T shares were first offered) and December 31, 1996 are
those of Class T and reflect Class T shares' 0.50% 12b-1 fee (0.65%
prior to January 1, 1996). Returns prior to September 10, 1992 are
those of Institutional Class, the original class of the fund, which
does not bear a 12b-1 fee. Had Class B shares' 12b-1 fee been
reflected, returns prior to December 31, 1996 would have been lower.
Class B's contingent deferred sales charge included in the past one
year, past five years, and past 10 years total return figures are 5%,
2% and 0%, respectively. If Fidelity had not reimbursed certain class
expenses, the past five years and past 10 years total returns would
have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
1998
FIDELITY ADV EQUITY GROWTH - 27.27% 158.53% 745.60%
CL B
FIDELITY ADV EQUITY GROWTH - 22.27% 156.53% 745.60%
CL B (INCL. CONTINGENT
DEFERRED SALES CHARGE)
S&P 500 23.66% 181.25% 457.74%
Growth Funds Average 14.32% 127.55% 363.55%
CUMULATIVE TOTAL RETURNS show Class B's performance in percentage
terms over a set period - in this case, one year, five years or 10
years. For example, if you had invested $1,000 in a fund that had a 5%
return over the past year, the value of your investment would be
$1,050. You can compare Class B's returns to those of the Standard &
Poor's 500 Index - a market capitalization-weighted index of common
stocks. To measure how Class B's performance stacked up against its
peers, you can compare it to the growth funds average, which reflects
the performance of mutual funds with similar objectives tracked by
Lipper Analytical Services, Inc. The past one year average represents
a peer group of 961 mutual funds. These benchmarks include reinvested
dividends and capital gains, if any, and exclude the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
1998
FIDELITY ADV EQUITY GROWTH - 27.27% 20.92% 23.80%
CL B
FIDELITY ADV EQUITY GROWTH - 22.27% 20.73% 23.80%
CL B (INCL. CONTINGENT
DEFERRED SALES CHARGE)
S&P 500 23.66% 22.98% 18.75%
Growth Funds Average 14.32% 17.48% 16.16%
AVERAGE ANNUAL TOTAL RETURNS take Class B's cumulative return and show
you what would have happened if Class B had performed at a constant
rate each year.
$10,000 OVER 10 YEARS
FA Equity Growth -CL B S&P 500
00242 SP001
1988/11/30 10000.00 10000.00
1988/12/31 10460.96 10175.00
1989/01/31 11285.26 10919.81
1989/02/28 11293.76 10647.91
1989/03/31 11667.67 10896.00
1989/04/30 12440.98 11461.51
1989/05/31 13511.72 11925.70
1989/06/30 13010.34 11857.72
1989/07/31 13902.63 12928.47
1989/08/31 14446.49 13181.87
1989/09/30 14845.90 13127.82
1989/10/31 14658.94 12823.26
1989/11/30 14718.43 13084.85
1989/12/31 15151.80 13398.89
1990/01/31 13761.10 12499.82
1990/02/28 14315.44 12661.07
1990/03/31 15151.80 12996.59
1990/04/30 14850.32 12671.68
1990/05/31 16960.68 13907.16
1990/06/30 17106.56 13812.60
1990/07/31 16620.30 13768.40
1990/08/31 14500.21 12523.73
1990/09/30 13304.02 11913.83
1990/10/31 13469.35 11862.60
1990/11/30 15122.62 12628.92
1990/12/31 16202.12 12981.27
1991/01/31 18555.61 13547.25
1991/02/28 20228.33 14515.88
1991/03/31 22212.27 14867.16
1991/04/30 22134.47 14902.84
1991/05/31 23291.76 15546.65
1991/06/30 21356.45 14834.61
1991/07/31 23087.53 15525.90
1991/08/31 24332.35 15893.87
1991/09/30 24390.70 15628.44
1991/10/31 24458.78 15837.86
1991/11/30 23612.69 15199.60
1991/12/31 26686.13 16938.43
1992/01/31 27433.37 16623.37
1992/02/29 27574.39 16839.48
1992/03/31 26272.68 16511.11
1992/04/30 25730.31 16996.54
1992/05/31 25610.99 17079.82
1992/06/30 24764.88 16825.33
1992/07/31 25632.68 17513.49
1992/08/31 25014.37 17154.46
1992/09/30 25480.82 17356.88
1992/10/31 26815.06 17417.63
1992/11/30 28561.51 18011.57
1992/12/31 29325.99 18233.11
1993/01/31 30147.10 18386.27
1993/02/28 29359.88 18636.33
1993/03/31 30280.15 19029.55
1993/04/30 29770.12 18569.04
1993/05/31 31488.69 19066.69
1993/06/30 31610.65 19121.98
1993/07/31 31067.36 19045.49
1993/08/31 32198.30 19767.32
1993/09/30 33140.74 19615.11
1993/10/31 33539.89 20021.14
1993/11/30 32708.32 19830.94
1993/12/31 33682.09 20070.89
1994/01/31 34857.54 20753.30
1994/02/28 34566.29 20190.89
1994/03/31 33156.61 19310.57
1994/04/30 33506.11 19557.74
1994/05/31 33296.41 19878.49
1994/06/30 31840.13 19391.47
1994/07/31 32515.84 20027.51
1994/08/31 33983.77 20848.63
1994/09/30 33284.76 20337.84
1994/10/31 34368.23 20795.44
1994/11/30 33226.51 20038.07
1994/12/31 33383.90 20335.24
1995/01/31 33089.61 20862.53
1995/02/28 34360.93 21675.54
1995/03/31 35655.80 22315.19
1995/04/30 37197.86 22972.37
1995/05/31 38480.95 23890.58
1995/06/30 41412.05 24445.56
1995/07/31 44496.17 25256.17
1995/08/31 44955.26 25319.56
1995/09/30 46214.81 26388.05
1995/10/31 45979.38 26293.84
1995/11/30 46885.78 27448.14
1995/12/31 46450.09 27976.80
1996/01/31 47537.30 28929.13
1996/02/29 48595.62 29197.30
1996/03/31 48931.79 29478.47
1996/04/30 50388.54 29912.98
1996/05/31 51745.68 30684.44
1996/06/30 51085.78 30801.34
1996/07/31 47985.53 29440.54
1996/08/31 49106.10 30061.44
1996/09/30 52405.57 31753.30
1996/10/31 52667.04 32629.06
1996/11/30 55792.20 35095.49
1996/12/31 53995.24 34400.24
1997/01/31 57200.04 36549.57
1997/02/28 55843.06 36836.12
1997/03/31 52702.61 35322.52
1997/04/30 55364.88 37431.28
1997/05/31 59241.98 39710.10
1997/06/30 61658.70 41489.11
1997/07/31 66298.28 44790.40
1997/08/31 63623.09 42281.24
1997/09/30 67241.71 44596.98
1997/10/31 64592.36 43107.44
1997/11/30 66440.44 45102.89
1997/12/31 66473.69 45877.30
1998/01/31 67280.23 46384.71
1998/02/28 72368.53 49729.97
1998/03/31 74824.44 52276.64
1998/04/30 76192.11 52802.54
1998/05/31 74162.67 51894.87
1998/06/30 78780.37 54002.84
1998/07/31 80324.51 53427.71
1998/08/31 67147.88 45703.13
1998/09/30 73986.20 48630.87
1998/10/31 79103.91 52586.51
1998/11/30 84559.86 55773.78
IMATRL PRASUN SHR__CHT 19981130 19981228 155404 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Equity Growth Fund - Class B on November
30, 1988. As the chart shows, by November 30, 1998, the value of the
investment would have been $84,560 - a 745.60% increase on the initial
investment. For comparison, look at how the Standard & Poor's 500
Index did over the same period. With dividends and capital gains, if
any, reinvested, the same $10,000 investment would have grown to
$55,774 - a 457.74% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
long-term growth and
short-term volatility. In turn, the
share price and return of a
fund that invests in stocks will
vary. That means if you sell
your shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
FIDELITY ADVISOR EQUITY GROWTH FUND - CLASS C
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can
look at the total percentage change in value, the average annual
percentage change or the growth of a hypothetical $10,000 investment.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). The initial offering of Class C shares took place on November
3, 1997. Class C shares bear a 1.00% 12b-1 fee that is reflected in
returns after November 3, 1997. Returns between December 31, 1996 (the
date Class B shares were first offered) and November 3, 1997 are those
of Class B shares and reflect Class B shares' 1.00% 12b-1 fee. Returns
between September 10, 1992 (the date Class T shares were first
offered) and December 31, 1996 are those of Class T shares, and
reflect Class T shares' 0.50% 12b-1 fee (0.65% prior to January 1,
1996). Returns prior to September 10, 1992 are those of Institutional
Class, the original class of the fund which does not bear a 12b-1 fee.
Had Class C shares' 12b-1 fee been reflected, returns prior to
December 31, 1996 would have been lower. Class C shares' contingent
deferred sales charge included in the past one year, past five years,
and past 10 years total return figures are 1%, 0% and 0%,
respectively. If Fidelity had not reimbursed certain class expenses,
the past five years and past 10 years total returns would have been
lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
1998
FIDELITY ADV EQUITY GROWTH - 27.30% 158.58% 745.79%
CL C
FIDELITY ADV EQUITY GROWTH - 26.30% 158.58% 745.79%
CL C (INCL. CONTINGENT
DEFERRED SALES CHARGE)
S&P 500 23.66% 181.25% 457.74%
Growth Funds Average 14.32% 127.55% 363.55%
CUMULATIVE TOTAL RETURNS show Class C's performance in percentage
terms over a set period - in this case, one year, five years or 10
years. For example, if you had invested $1,000 in a fund that had a 5%
return over the past year, the value of your investment would be
$1,050. You can compare Class C's returns to those of the Standard &
Poor's 500 Index - a market capitalization-weighted index of common
stocks. To measure how Class C's performance stacked up against its
peers, you can compare it to the growth funds average, which reflects
the performance of mutual funds with similar objectives tracked by
Lipper Analytical Services, Inc. The past one year average represents
a peer group of 961 mutual funds. These benchmarks include reinvested
dividends and capital gains, if any, and exclude the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
1998
FIDELITY ADV EQUITY GROWTH - 27.30% 20.93% 23.80%
CL C
FIDELITY ADV EQUITY GROWTH - 26.30% 20.93% 23.80%
CL C (INCL. CONTINGENT
DEFERRED SALES CHARGE)
S&P 500 23.66% 22.98% 18.75%
Growth Funds Average 14.32% 17.48% 16.16%
AVERAGE ANNUAL TOTAL RETURNS take Class C's cumulative return and show
you what would have happened if Class C had performed at a constant
rate each year.
$10,000 OVER 10 YEARS
FA Equity Growth -CL C S&P 500
00479 SP001
1988/11/30 10000.00 10000.00
1988/12/31 10460.96 10175.00
1989/01/31 11285.26 10919.81
1989/02/28 11293.76 10647.91
1989/03/31 11667.67 10896.00
1989/04/30 12440.98 11461.51
1989/05/31 13511.72 11925.70
1989/06/30 13010.34 11857.72
1989/07/31 13902.63 12928.47
1989/08/31 14446.49 13181.87
1989/09/30 14845.90 13127.82
1989/10/31 14658.94 12823.26
1989/11/30 14718.43 13084.85
1989/12/31 15151.80 13398.89
1990/01/31 13761.10 12499.82
1990/02/28 14315.44 12661.07
1990/03/31 15151.80 12996.59
1990/04/30 14850.32 12671.68
1990/05/31 16960.68 13907.16
1990/06/30 17106.56 13812.60
1990/07/31 16620.30 13768.40
1990/08/31 14500.21 12523.73
1990/09/30 13304.02 11913.83
1990/10/31 13469.35 11862.60
1990/11/30 15122.62 12628.92
1990/12/31 16202.12 12981.27
1991/01/31 18555.61 13547.25
1991/02/28 20228.33 14515.88
1991/03/31 22212.27 14867.16
1991/04/30 22134.47 14902.84
1991/05/31 23291.76 15546.65
1991/06/30 21356.45 14834.61
1991/07/31 23087.53 15525.90
1991/08/31 24332.35 15893.87
1991/09/30 24390.70 15628.44
1991/10/31 24458.78 15837.86
1991/11/30 23612.69 15199.60
1991/12/31 26686.13 16938.43
1992/01/31 27433.37 16623.37
1992/02/29 27574.39 16839.48
1992/03/31 26272.68 16511.11
1992/04/30 25730.31 16996.54
1992/05/31 25610.99 17079.82
1992/06/30 24764.88 16825.33
1992/07/31 25632.68 17513.49
1992/08/31 25014.37 17154.46
1992/09/30 25480.82 17356.88
1992/10/31 26815.06 17417.63
1992/11/30 28561.51 18011.57
1992/12/31 29325.99 18233.11
1993/01/31 30147.10 18386.27
1993/02/28 29359.88 18636.33
1993/03/31 30280.15 19029.55
1993/04/30 29770.12 18569.04
1993/05/31 31488.69 19066.69
1993/06/30 31610.65 19121.98
1993/07/31 31067.36 19045.49
1993/08/31 32198.30 19767.32
1993/09/30 33140.74 19615.11
1993/10/31 33539.89 20021.14
1993/11/30 32708.32 19830.94
1993/12/31 33682.09 20070.89
1994/01/31 34857.54 20753.30
1994/02/28 34566.29 20190.89
1994/03/31 33156.61 19310.57
1994/04/30 33506.11 19557.74
1994/05/31 33296.41 19878.49
1994/06/30 31840.13 19391.47
1994/07/31 32515.84 20027.51
1994/08/31 33983.77 20848.63
1994/09/30 33284.76 20337.84
1994/10/31 34368.23 20795.44
1994/11/30 33226.51 20038.07
1994/12/31 33383.90 20335.24
1995/01/31 33089.61 20862.53
1995/02/28 34360.93 21675.54
1995/03/31 35655.80 22315.19
1995/04/30 37197.86 22972.37
1995/05/31 38480.95 23890.58
1995/06/30 41412.05 24445.56
1995/07/31 44496.17 25256.17
1995/08/31 44955.26 25319.56
1995/09/30 46214.81 26388.05
1995/10/31 45979.38 26293.84
1995/11/30 46885.78 27448.14
1995/12/31 46450.09 27976.80
1996/01/31 47537.30 28929.13
1996/02/29 48595.62 29197.30
1996/03/31 48931.79 29478.47
1996/04/30 50388.54 29912.98
1996/05/31 51745.68 30684.44
1996/06/30 51085.78 30801.34
1996/07/31 47985.53 29440.54
1996/08/31 49106.10 30061.44
1996/09/30 52405.57 31753.30
1996/10/31 52667.04 32629.06
1996/11/30 55792.20 35095.49
1996/12/31 53995.24 34400.24
1997/01/31 57200.04 36549.57
1997/02/28 55843.06 36836.12
1997/03/31 52702.61 35322.52
1997/04/30 55364.88 37431.28
1997/05/31 59241.98 39710.10
1997/06/30 61658.70 41489.11
1997/07/31 66298.28 44790.40
1997/08/31 63623.09 42281.24
1997/09/30 67241.71 44596.98
1997/10/31 64592.36 43107.44
1997/11/30 66438.96 45102.89
1997/12/31 66471.36 45877.30
1998/01/31 67325.95 46384.71
1998/02/28 72408.79 49729.97
1998/03/31 74863.08 52276.64
1998/04/30 76228.19 52802.54
1998/05/31 74209.57 51894.87
1998/06/30 78813.18 54002.84
1998/07/31 80352.56 53427.71
1998/08/31 67180.72 45703.13
1998/09/30 74006.26 48630.87
1998/10/31 79132.67 52586.51
1998/11/30 84578.58 55773.78
IMATRL PRASUN SHR__CHT 19981130 19981223 141625 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Equity Growth - Class C on November 30,
1988. As the chart shows, by November 30, 1998, the value of the
investment would have been $84,579 - a 745.79% increase on the initial
investment. For comparison, look at how the Standard & Poor's 500
Index did over the same period. With dividends and capital gains, if
any, reinvested, the same $10,000 investment would have grown to
$55,774 - a 457.74% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
long-term growth and
short-term volatility. In turn, the
share price and return of a
fund that invests in stocks will
vary. That means if you sell
your shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
When the final bell of the U.S. stock
market sounded on Monday,
November 23, 1998, the Dow
Jones Industrial Average stood at a
record high of 9374.27, serving
notice that the bleak economic
outlook from just a few short months
earlier would not keep positive
investor sentiment down. For the
12-month period ending November
30, 1998, the Dow - an index of
30 blue-chip stocks - returned
18.56%. What caused the
turnaround from the doldrums of
equity performance during the
summer and early fall? A variety of
factors: The economic problems in
Russia, Brazil and other emerging
markets began to dissipate; Asian
markets began to rebound; and,
perhaps most importantly, three
interest-rate cuts late in the period
by the Federal Reserve Board
helped stem the tide of a slowing
U.S. economy. All these factors
culminated in the Dow reaching its
record high late in November, a
peak that outpaced the previous
record set in July by nearly 40 points.
Small-cap stock performance was
still a far cry behind their large-cap
brethren. For the period, the Russell
2000 Index - a popular measure
of small-cap stock performance -
returned -6.62%, significantly
trailing the large-cap weighted
Standard & Poor's 500 Index's
return of 23.66%. Despite the late
rally in the equity market, this kind
of volatility has characterized the
entire year, and when it will level off
is impossible to predict.
An interview with Jennifer Uhrig, Portfolio Manager of Fidelity
Advisor Equity Growth Fund
Q. HOW DID THE FUND PERFORM, JENNIFER?
A. The fund did well. For the 12 months that ended November 30, 1998,
the fund's Class A, Class T, Class B and Class C shares returned
28.21%, 28.00%, 27.27% and 27.30%, respectively. The Standard & Poor's
500 Index produced a return of 23.66% during that time. The growth
funds average, as tracked by Lipper Analytical Services, had a
12-month return of 14.32% as of November 30, 1998.
Q. WHAT FACTORS CONTRIBUTED TO THE FUND'S STRONG SHOWING?
A. At the close of the period, over half of the fund's investments
were in three of the market's primary growth areas - technology,
retail and health care. These sectors in general - and specifically
the fund's investments in several of the larger, more well-known
companies within them - turned in impressive performances during the
period. Other factors that helped performance included not owning much
in the way of consumer nondurable stocks, such as Procter & Gamble and
Coca-Cola, as well as the fund's relatively minimal exposure to
finance and cyclical - or economically sensitive -- stocks, which
struggled during the period. The fund's Lipper peers may have had
significant positions in these areas.
Q. CAN YOU ISOLATE SOME OF THE FUND'S LARGE-COMPANY POSITIONS WITHIN
THE TECHNOLOGY, RETAIL AND HEALTH SECTORS THAT PERFORMED WELL?
A. Sure. In the technology area, Microsoft continued to be a stalwart
due to its strong product lineup and its pricing power. Cisco Systems,
a company that specializes in communications networking, also
performed well, and Dell Computers - which has mastered the process of
selling PCs directly without the middle man - was a positive
contributor. Some of the fund's retail-related investments - such as
Home Depot and Wal-Mart - benefited from good management execution and
from solid consumer spending trends. Lastly, several of the fund's
health related investments - particularly in the pharmaceuticals area
- - performed exceptionally well. The fund's stakes in Merck and
Warner-Lambert, to name just two, prospered due to strong product
introductions, more generous medical plans for U.S. employees - and
thus more access to prescription drugs - and the overall aging of the
U.S. population.
Q. DID ANY TRENDS EMERGE AS BYPRODUCTS OF THE INVESTING CLIMATE WE SAW
DURING THE PERIOD?
A. There was a tremendous disparity between the stock price valuations
of smaller companies and those of larger companies. Large-cap stocks
did very well, due mostly to the backdrop of global and domestic
economic uncertainty. When investors are concerned about the economy,
they tend to favor the stocks of larger companies, because larger
companies typically have more resources with which to weather a
potential recession. At the same time, investors stayed away from
small companies and other companies that were viewed as being more
vulnerable to a weaker economy.
Q. ASIDE FROM SOME OF THE NAMES YOU'VE MENTIONED, WHICH OTHER STOCKS
PERFORMED WELL? WHICH HOLDINGS DURING THE PERIOD WERE DISAPPOINTING?
A. WorldCom and Yahoo! were also good stocks for the fund. WorldCom
benefited from its merger with MCI and the potential to grow its
earnings rapidly through cost reductions. Yahoo! was bolstered by the
continued popularity of the Internet. Energy services stocks, on the
other hand, slumped as oil prices fell sharply. Warm weather trends
and the inability of OPEC to cut enough supply to support prices hurt
the fund's positions in both Schlumberger and Halliburton. These
companies make their money by selling equipment for oil drilling, and
the low price of oil discouraged additional drilling projects. I'm
sticking with these types of stocks, though, because oil is at
unusually low price levels and some company profiles look pretty good
over the long term.
Q. WHAT'S YOUR OUTLOOK FOR THE COMING MONTHS?
A. The disparity in performance between large and small stocks as well
as between growth and cyclicals has been extreme. Many cyclicals are
selling at prices that fully discount a recession; in fact, many are
at all-time lows. In contrast, many high-quality growth stocks are at
historically high valuations. The Federal Reserve Board's recent rate
cuts suggest that economic policy is now more concerned about
recession than inflation. This may give some investors the courage to
invest in some of these more economically sensitive areas, especially
given the values they offer. In light of this possibility, the fund
may add to small- and medium- cap stocks where the fundamentals are
favorable. In addition, the fund may add to stocks within the
traditional growth areas that may have cyclical, or economically
sensitive characteristics. An example of this in the technology area
is semiconductor capital equipment, while one in the retail area would
be department stores.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
JENNIFER UHRIG DISCUSSES
POSITIVE TRENDS IN THE
TECHNOLOGY SECTOR:
"Technology stocks were strong
contributors to the fund's
performance over the past 12
months for several major reasons.
First, the economic situation in Asia
- - which was a severe drag on
demand throughout 1998 -
appeared to be stable to improving
towards the end of the period.
Companies such as Microsoft and
Cisco Systems reported that while
business levels in that region
remained depressed, the situation
was modestly improving in places
such as Japan and Korea.
"Second, component prices -
particularly those of dynamic
random access memory chips, or
DRAMs - appeared to be
stabilizing. Prompted by the
uncertain economic outlook, DRAM
manufacturers overseas cut back
on capital expenditures and this
underinvestment led to a decrease
in supply, especially on leading
edge parts.
"A third factor involves the
much-discussed Year 2000 issue, in
which many of the world's
computers may read the `00' in the
year 2000 as being the year 1900.
Some major companies have
suggested that their older PCs may
need to be replaced by those that
are Year 2000-compliant, and
that could be a positive for the
entire technology industry."
FUND FACTS
GOAL: to achieve capital
appreciation by investing
primarily in common stock of
companies with above-average
growth characteristics
START DATE: November 22,
1983
SIZE: as of November 30,
1998, more than $6.7 billion
MANAGER: Jennifer Uhrig,
since 1997; joined Fidelity
in 1987
(checkmark)
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF NOVEMBER
30, 1998
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE STOCKS 6 MONTHS AGO
Microsoft Corp. 4.5 2.9
Philip Morris Companies, Inc. 3.9 1.7
Merck & Co., Inc. 3.6 3.1
Lilly (Eli) & Co. 2.4 1.2
Warner-Lambert Co. 2.2 2.3
MCI WorldCom, Inc. 2.2 2.6
Intel Corp. 2.2 1.9
Pfizer, Inc. 2.0 0.0
Fannie Mae 1.5 2.0
Cisco Systems, Inc. 1.3 1.5
TOP FIVE MARKET SECTORS AS OF
NOVEMBER 30, 1998
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE MARKET SECTORS 6
MONTHS AGO
TECHNOLOGY 30.9 24.5
HEALTH 16.8 18.8
RETAIL & WHOLESALE 8.6 11.6
MEDIA & LEISURE 7.7 10.2
FINANCE 7.5 11.3
</TABLE>
ASSET ALLOCATION (% OF FUND'S
INVESTMENTS)
AS OF NOVEMBER 30, 1998 * AS OF MAY 31, 1998 **
Row: 1, Col: 1, Value: 92.5
Row: 1, Col: 2, Value: 7.5
Row: 1, Col: 1, Value: 98.09999999999999
Row: 1, Col: 2, Value: 1.9
Stocks 92.5%
Short-term
investments 7.5%
FOREIGN
INVESTMENTS 4.2%
Stocks 98.1%
Short-term
investments 1.9%
FOREIGN
INVESTMENTS 2.8%
*
**
INVESTMENTS NOVEMBER 30, 1998
Showing Percentage of Total Value of Investment in Securities
<TABLE>
<CAPTION>
<S> <C> <C> <C>
COMMON STOCKS - 92.5%
SHARES VALUE (NOTE 1) (000S)
AEROSPACE & DEFENSE - 0.4%
AEROSPACE & DEFENSE - 0.2%
Boeing Co. 373,200 $ 15,161
DEFENSE ELECTRONICS - 0.2%
Raytheon Co. Class A 191,241 10,458
TOTAL AEROSPACE & DEFENSE 25,619
BASIC INDUSTRIES - 3.0%
CHEMICALS & PLASTICS - 1.5%
Cytec Industries, Inc. (a) 789,100 17,804
Great Lakes Chemical Corp. 886,200 35,393
Monsanto Co. 794,300 35,992
Solutia, Inc. 611,400 13,680
102,869
METALS & MINING - 0.3%
Aluminum Co. of America 303,600 22,504
PACKAGING & CONTAINERS - 0.3%
Owens-Illinois, Inc. (a) 576,800 18,530
PAPER & FOREST PRODUCTS - 0.9%
Champion International Corp. 535,600 22,261
Georgia-Pacific Corp. 314,700 17,859
Weyerhaeuser Co. 429,100 21,509
61,629
TOTAL BASIC INDUSTRIES 205,532
CONSTRUCTION & REAL ESTATE -
0.0%
ENGINEERING - 0.0%
Stolt Comex Seaway SA 370,400 3,125
Stolt Comex Seaway SA 125,800 896
sponsored ADR Class A
4,021
DURABLES - 0.8%
AUTOS, TIRES, & ACCESSORIES -
0.3%
TRW, Inc. 330,400 18,193
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
DURABLES - CONTINUED
TEXTILES & APPAREL - 0.5%
Fruit of the Loom, Inc. Class 1,067,400 $ 15,744
A (a)
NIKE, Inc. Class B 536,200 21,448
37,192
TOTAL DURABLES 55,385
ENERGY - 3.5%
ENERGY SERVICES - 1.4%
Baker Hughes, Inc. 886,730 16,238
BJ Services Co. (a) 655,900 9,060
Coflexip SA sponsored ADR 502,900 18,356
Halliburton Co. 881,700 25,900
Schlumberger Ltd. 351,700 15,717
Smith International, Inc. 523,600 12,632
97,903
OIL & GAS - 2.1%
Amerada Hess Corp. 284,600 15,795
Exxon Corp. 49,500 3,716
Newfield Exploration Co. (a) 686,600 13,389
Noble Affiliates, Inc. 615,500 15,580
Oryx Energy Co. (a) 357,100 4,932
Tosco Corp. 926,400 24,202
Total SA sponsored ADR 361,600 22,103
USX-Marathon Group 576,200 16,350
Vastar Resources, Inc. 191,300 7,760
Weatherford International, 801,200 14,622
Inc. (a)
138,449
TOTAL ENERGY 236,352
FINANCE - 7.5%
BANKS - 0.6%
Bank of Ireland, Inc. 1,156,780 23,991
U.S. Bancorp 454,400 16,728
40,719
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
FINANCE - CONTINUED
CREDIT & OTHER FINANCE - 1.4%
American Express Co. 592,504 $ 59,287
Household International, Inc. 853,890 33,408
92,695
FEDERAL SPONSORED CREDIT - 2.5%
Fannie Mae 1,433,000 104,251
Freddie Mac 1,025,400 62,037
166,288
INSURANCE - 2.5%
Allmerica Financial Corp. 421,900 23,284
Ambac Financial Group, Inc. 352,300 21,490
American International Group, 404,300 38,004
Inc.
MBIA, Inc. 71,500 4,630
Progressive Corp. 247,300 36,693
UNUM Corp. 884,500 47,652
171,753
SAVINGS & LOANS - 0.3%
Washington Mutual, Inc. 524,500 20,324
SECURITIES INDUSTRY - 0.2%
Bear Stearns Companies, Inc. 289,900 12,176
TOTAL FINANCE 503,955
HEALTH - 16.8%
DRUGS & PHARMACEUTICALS - 14.1%
American Home Products Corp. 712,800 37,957
Amgen, Inc. (a) 573,700 43,171
Bristol-Myers Squibb Co. 393,100 48,179
Elan Corp. PLC ADR (a) 586,500 39,955
Lilly (Eli) & Co. 1,776,100 159,294
Merck & Co., Inc. 1,560,900 241,744
Pfizer, Inc. 1,185,400 132,320
Schering-Plough Corp. 641,100 68,197
Sepracor, Inc. (a) 329,200 27,324
Warner-Lambert Co. 1,977,900 149,331
XOMA Corp. (a) 52 -
947,472
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
HEALTH - CONTINUED
MEDICAL EQUIPMENT & SUPPLIES
- - 2.3%
Guidant Corp. 531,600 $ 45,618
Johnson & Johnson 1,086,100 88,246
Medtronic, Inc. 340,600 23,054
156,918
MEDICAL FACILITIES MANAGEMENT
- - 0.4%
Health Management Associates, 1,197,875 25,979
Inc. Class A (a)
TOTAL HEALTH 1,130,369
INDUSTRIAL MACHINERY &
EQUIPMENT - 1.9%
ELECTRICAL EQUIPMENT - 1.3%
Alcatel Alsthom Compagnie 107,050 13,850
Generale d'Electricite SA
(RFD)
Alcatel Alsthom Compagnie 287,542 7,440
Generale d'Electricite SA
sponsored ADR
General Electric Co. 689,900 62,436
VWR Scientific Products Corp. 95,900 2,997
(a)
86,723
INDUSTRIAL MACHINERY &
EQUIPMENT - 0.4%
ASM Lithography Holdings N V 976,600 27,650
(a)
POLLUTION CONTROL - 0.2%
Waste Management, Inc. 392,300 16,820
TOTAL INDUSTRIAL MACHINERY & 131,193
EQUIPMENT
MEDIA & LEISURE - 7.7%
BROADCASTING - 4.8%
Cablevision Systems Corp. 331,900 13,732
Class A (a)
CBS Corp. 1,391,300 41,478
Comcast Corp. Class A 975,000 47,288
(special)
Cox Communications, Inc. 685,200 36,101
Class A (a)
MediaOne Group, Inc. 950,600 38,499
Metromedia Fiber Network, 284,700 14,769
Inc. Class A (a)
NTL, Inc. (a) 330,300 18,394
Tele-Communications, Inc. 1,563,300 66,049
(TCI Group) Series A (a)
Time Warner, Inc. 426,217 45,072
321,382
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
MEDIA & LEISURE - CONTINUED
ENTERTAINMENT - 0.3%
King World Productions, Inc. 569,200 $ 15,511
(a)
Tele-Communications, Inc. 266,100 5,272
(TCI Ventures Group) Series
A (a)
20,783
LEISURE DURABLES & TOYS - 0.2%
Harley-Davidson, Inc. 265,900 11,118
LODGING & GAMING - 0.0%
Sun International Hotels Ltd. 35,300 1,363
(a)
RESTAURANTS - 2.4%
Brinker International, Inc. 957,100 24,346
(a)
Darden Restaurants, Inc. 1,111,600 17,577
McDonald's Corp. 944,600 66,181
Outback Steakhouse, Inc. (a) 555,900 19,734
Papa John's International, 184,300 7,729
Inc. (a)
Tricon Global Restaurants, 622,280 28,353
Inc. (a)
163,920
TOTAL MEDIA & LEISURE 518,566
NONDURABLES - 5.7%
AGRICULTURE - 0.1%
Delta & Pine Land Co. 136,800 5,181
FOODS - 0.2%
American Italian Pasta Co. 400,800 10,120
Class A (a)
HOUSEHOLD PRODUCTS - 1.5%
Avon Products, Inc. 713,100 28,970
Gillette Co. 1,634,600 75,089
104,059
TOBACCO - 3.9%
Philip Morris Companies, Inc. 4,708,200 263,365
TOTAL NONDURABLES 382,725
RETAIL & WHOLESALE - 8.6%
APPAREL STORES - 1.1%
Abercrombie & Fitch Co. Class 286,300 16,033
A (a)
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
RETAIL & WHOLESALE - CONTINUED
APPAREL STORES - CONTINUED
Payless ShoeSource, Inc. (a) 503,800 $ 24,560
TJX Companies, Inc. 1,326,600 33,994
74,587
DRUG STORES - 1.6%
CVS Corp. 1,062,254 52,449
Walgreen Co. 1,010,500 54,251
106,700
GENERAL MERCHANDISE STORES -
2.4%
Consolidated Stores Corp. (a) 352,800 7,585
Federated Department Stores, 586,700 24,458
Inc. (a)
Nordstrom, Inc. 1,536,100 57,220
Saks Holdings, Inc. (a) 498,800 13,717
Wal-Mart Stores, Inc. 772,900 58,209
161,189
GROCERY STORES - 0.4%
Safeway, Inc. (a) 554,800 29,300
RETAIL & WHOLESALE,
MISCELLANEOUS - 3.1%
Amazon.com, Inc. (a) 99,200 19,046
Barnes & Noble, Inc. (a) 1,027,100 34,023
Best Buy Co., Inc. (a) 892,500 51,430
Home Depot, Inc. 1,054,000 52,437
Lowe's Companies, Inc. 521,400 22,029
Staples, Inc. (a) 234,030 8,176
Tandy Corp. 399,300 17,993
205,134
TOTAL RETAIL & WHOLESALE 576,910
SERVICES - 0.2%
EDUCATIONAL SERVICES - 0.2%
Apollo Group, Inc. Class A (a) 426,900 13,768
TECHNOLOGY - 30.9%
COMMUNICATIONS EQUIPMENT - 4.0%
Ascend Communications, Inc. 250,600 14,081
(a)
Aspect Telecommunications 651,500 12,338
Corp. (a)
Ciena Corp. (a) 266,300 4,527
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
TECHNOLOGY - CONTINUED
COMMUNICATIONS EQUIPMENT -
CONTINUED
Cisco Systems, Inc. (a) 1,188,225 $ 89,562
Lucent Technologies, Inc. 1,009,600 86,889
Northern Telecom Ltd. 172,400 8,063
OY Nokia AB sponsored ADR 545,400 53,449
268,909
COMPUTER SERVICES & SOFTWARE
- - 10.2%
America Online, Inc. 440,000 38,528
At Home Corp. Series A (a) 598,800 34,880
Autodesk, Inc. 388,600 14,135
Cadence Design Systems, Inc. 1,006,700 28,313
(a)
Citrix Systems, Inc. (a) 397,900 33,026
CompUSA, Inc. (a) 1,271,900 18,840
Compuware Corp. (a) 585,800 36,466
CSG Systems International, 291,300 18,279
Inc. (a)
E Trade Group, Inc. (a) 226,700 6,135
Electronic Arts, Inc. (a) 310,800 13,092
Electronics for Imaging, Inc. 656,100 17,592
(a)
Legato Systems, Inc. (a) 114,100 5,455
Microsoft Corp. (a) 2,466,600 300,931
Oracle Corp. (a) 709,000 24,283
Policy Management Systems 87,000 4,448
Corp. (a)
SAP AG (Systeme Anwendungen 626,200 26,496
Produkte) sponsored ADR
Siebel Systems, Inc. (a) 1,254,800 30,429
Veritas Software Corp. (a) 300,800 17,973
Yahoo, Inc. (a) 104,700 20,102
689,403
COMPUTERS & OFFICE EQUIPMENT
- - 7.6%
Apple Computer, Inc. (a) 351,100 11,213
CDW Computer Centers, Inc. (a) 14,300 1,158
Compaq Computer Corp. 1,156,100 37,573
Dell Computer Corp. (a) 528,800 32,158
EMC Corp. (a) 574,500 41,651
Fore Systems, Inc. (a) 285,800 4,323
Gateway 2000, Inc. (a) 635,600 35,673
Ingram Micro, Inc. Class A (a) 904,200 38,429
International Business 447,500 73,838
Machines Corp.
Lexmark International Group, 461,200 35,224
Inc. (a)
Maxtor Corp. (a) 723,500 9,993
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
TECHNOLOGY - CONTINUED
COMPUTERS & OFFICE EQUIPMENT
- - CONTINUED
Micron Electronics, Inc. (a) 654,900 $ 14,899
Pitney Bowes, Inc. 544,700 30,503
Quantum Corp. (a) 1,210,100 26,773
Sun Microsystems, Inc. (a) 349,300 25,870
Tech Data Corp. (a) 676,000 27,209
Xerox Corp. 600,300 64,532
511,019
ELECTRONIC INSTRUMENTS - 2.3%
Applied Materials, Inc. (a) 1,157,500 44,853
KLA-Tencor Corp. (a) 945,100 32,192
Novellus Systems, Inc. (a) 273,300 13,563
Perkin-Elmer Corp. 112,100 10,453
Teradyne, Inc. (a) 1,254,300 40,216
Waters Corp. (a) 169,800 13,096
154,373
ELECTRONICS - 6.8%
Altera Corp. (a) 655,800 32,175
Intel Corp. 1,357,900 146,144
Lattice Semiconductor Corp. 259,600 9,573
(a)
Linear Technology Corp. 576,500 40,391
Micron Technology, Inc. (a) 975,400 40,296
Motorola, Inc. 737,500 45,725
PMC-Sierra, Inc. (a) 61,800 3,329
Taiwan Semiconductor 1,485,200 22,278
Manufacturing Co. Ltd. ADR
(a)
Texas Instruments, Inc. 843,200 64,399
Vitesse Semiconductor Corp. 248,500 8,853
(a)
Xilinx, Inc. (a) 881,400 44,731
457,894
TOTAL TECHNOLOGY 2,081,598
TRANSPORTATION - 0.3%
RAILROADS - 0.3%
Wisconsin Central 999,800 18,121
Transportation Corp. (a)
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
UTILITIES - 5.2%
CELLULAR - 0.6%
Cellular Communications 130,800 $ 8,159
International, Inc. (a)
Nextel Communications, Inc. 1,528,200 32,856
Class A (a)
41,015
TELEPHONE SERVICES - 4.6%
AT&T Corp. 1,298,174 80,892
e.spire Communications, Inc. 151,400 1,221
(a)
Global TeleSystems Group, 636,300 27,619
Inc. (a)
MCI WorldCom, Inc. (a) 2,506,280 147,871
McLeodUSA, Inc. Class A (a) 682,700 21,121
NEXTLINK Communications, Inc. 123,700 3,742
Class A (a)
RCN Corp. (a) 725,100 12,327
WinStar Communications, Inc. 517,600 14,428
(a)
309,221
TOTAL UTILITIES 350,236
TOTAL COMMON STOCKS 6,234,350
(Cost $4,456,532)
CASH EQUIVALENTS - 7.5%
MATURITY AMOUNT (000S)
Investments in repurchase $ 503,133 503,060
agreements (U.S. Treasury
obligations), in a joint
trading account at 5.25%,
dated 11/30/98 due 12/1/98
(Cost $503,060)
TOTAL INVESTMENT IN $ 6,737,410
SECURITIES - 100%
(Cost $4,959,592)
</TABLE>
LEGEND
(a) Non-income producing
INCOME TAX INFORMATION
At November 30, 1998, the aggregate cost of investment securities for
income tax purposes was $5,011,060,000. Net unrealized appreciation
aggregated $1,726,350,000, of which $1,885,941,000 related to
appreciated investment securities and $159,591,000 related to
depreciated investment securities.
The fund hereby designates approximately $505,346,000 as a capital
gain dividend for the purpose of the dividend paid deduction.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AMOUNTS IN THOUSANDS (EXCEPT
PER-SHARE AMOUNTS) NOVEMBER
30, 1998
ASSETS
Investment in securities, at $ 6,737,410
value (including repurchase
agreements of $503,060)
(cost $4,959,592) - See
accompanying schedule
Receivable for investments 55,416
sold
Receivable for fund shares 10,570
sold
Dividends receivable 3,569
Other receivables 1,021
TOTAL ASSETS 6,807,986
LIABILITIES
Payable for investments $ 48,308
purchased
Payable for fund shares 15,218
redeemed
Accrued management fee 3,201
Distribution fees payable 2,406
Other payables and accrued 1,118
expenses
TOTAL LIABILITIES 70,251
NET ASSETS $ 6,737,735
Net Assets consist of:
Paid in capital $ 4,073,157
Accumulated undistributed net 886,744
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 1,777,834
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS $ 6,737,735
STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
AMOUNTS IN THOUSANDS (EXCEPT
PER-SHARE AMOUNTS) NOVEMBER
30, 1998
CALCULATION OF MAXIMUM $58.14
OFFERING PRICE CLASS A: NET
ASSET VALUE and redemption
price per share ($91,557
(divided by) 1,574.7 shares)
Maximum offering price per $61.69
share (100/94.25 of $58.14)
CLASS T: NET ASSET VALUE and $58.59
redemption price per share
($5,187,390 (divided by)
88,538 shares)
Maximum offering price per $60.72
share (100/96.50 of $58.59)
CLASS B: NET ASSET VALUE and $57.50
offering price per share
($306,619 (divided by)
5,332.8 shares) A
CLASS C: NET ASSET VALUE and $58.24
offering price price per
share ($64,262 (divided by)
1,103.4 shares) A
INSTITUTIONAL CLASS: NET $59.71
ASSET VALUE, offering price
and redemption price per
share ($1,087,907 (divided
by) 18,219 shares)
A REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS YEAR
ENDED NOVEMBER 30, 1998
INVESTMENT INCOME $ 41,315
Dividends
Interest 8,381
TOTAL INCOME 49,696
EXPENSES
Management fee $ 34,350
Transfer agent fees 9,908
Distribution fees 24,905
Accounting fees and expenses 816
Non-interested trustees' 23
compensation
Custodian fees and expenses 140
Registration fees 310
Audit 62
Legal 121
Interest 1
Miscellaneous 82
Total expenses before 70,718
reductions
Expense reductions (1,319) 69,399
NET INVESTMENT INCOME (LOSS) (19,703)
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 920,851
Foreign currency transactions 79 920,930
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 544,819
Assets and liabilities in (142) 544,677
foreign currencies
NET GAIN (LOSS) 1,465,607
NET INCREASE (DECREASE) IN $ 1,445,904
NET ASSETS RESULTING FROM
OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED NOVEMBER 30, 1998 YEAR ENDED NOVEMBER 30, 1997
INCREASE (DECREASE) IN NET
ASSETS
Operations Net investment $ (19,703) $ 1,831
income (loss)
Net realized gain (loss) 920,930 736,818
Change in net unrealized 544,677 175,459
appreciation (depreciation)
NET INCREASE (DECREASE) IN 1,445,904 914,108
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (1,050) (24,274)
From net investment income
From net realized gain (622,707) (133,430)
TOTAL DISTRIBUTIONS (623,757) (157,704)
Share transactions - net 576,380 (282,118)
increase (decrease)
TOTAL INCREASE (DECREASE) 1,398,527 474,286
IN NET ASSETS
NET ASSETS
Beginning of period 5,339,208 4,864,922
End of period (including $ 6,737,735 $ 5,339,208
undistributed net investment
income of $0 and $1,198,
respectively)
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C> <C>
YEARS ENDED NOVEMBER 30,
1998 1997 1996 F
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 51.69 $ 44.80 $ 39.47
period
Income from Investment
Operations
Net investment income (loss) (.13) (.06) .04
E
Net realized and unrealized 12.76 8.54 5.29
gain (loss)
Total from investment 12.63 8.48 5.33
operations
Less Distributions
From net investment income (.03) I (.36) -
From net realized gain (6.15) I (1.23) -
Total distributions (6.18) (1.59) -
Net asset value, end of period $ 58.14 $ 51.69 $ 44.80
TOTAL RETURN B, C 28.21% 19.73% 13.50%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 92 $ 29 $ 4
millions)
Ratio of expenses to average 1.12% 1.32% G 1.52% A, D, G
net assets
Ratio of expenses to average 1.10% H 1.30% H 1.50% A, H
net assets after expense
reductions
Ratio of net investment (.26)% (.12)% .38% A
income (loss) to average
net assets
Portfolio turnover 122% 108% 76%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D LIMITED IN ACCORDANCE WITH A STATE EXPENSE LIMITATION.
E NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
F FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A
SHARES) TO NOVEMBER 30, 1996.
G FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
H FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
I THE AMOUNTS SHOWN REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK
TO TAX DIFFERENCES (SEE NOTE 1 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED NOVEMBER 30,
1998 1997 1996 1995 1994
SELECTED PER-SHARE DATA
Net asset value, beginning $ 51.97 $ 44.81 $ 39.83 $ 28.52 $ 29.50
of period
Income from Investment
Operations
Net investment income (loss) (.21) C (.04) C .22 C .06 .08
Net realized and unrealized 12.87 8.60 6.90 11.54 .39
gain (loss)
Total from investment 12.66 8.56 7.12 11.60 .47
operations
Less Distributions
From net investment income - (.17) (.03) (.08) -
From net realized gain (6.04) (1.23) (2.11) (.16) (1.45)
In excess of net realized - - - (.05) -
gain
Total distributions (6.04) (1.40) (2.14) (.29) (1.45)
Net asset value, end of period $ 58.59 $ 51.97 $ 44.81 $ 39.83 $ 28.52
TOTAL RETURN A, B 28.00% 19.81% 19.00% 41.11% 1.58%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 5,187 $ 4,206 $ 3,537 $ 2,051 $ 874
(in millions)
Ratio of expenses to average 1.29% 1.31% D 1.36% 1.55% 1.71%
net assets
Ratio of expenses to average 1.27% E 1.29% E 1.34% E 1.54% E 1.70% E
net assets after expense
reductions
Ratio of net investment (.41)% (.08)% .54% .21% .15%
income (loss) to average net
assets
Portfolio turnover 122% 108% 76% 97% 137%
</TABLE>
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
D FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
E FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - CLASS B
YEARS ENDED NOVEMBER 30,
1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 51.41 $ 41.81
period
Income from Investment
Operations
Net investment income (loss) (.52) (.32)
D
Net realized and unrealized 12.68 9.95
gain (loss)
Total from investment 12.16 9.63
operations
Less Distributions
From net realized gain (6.07) (.03)
Net asset value, end of period $ 57.50 $ 51.41
TOTAL RETURN B, C 27.27% 23.05%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 307 $ 71
millions)
Ratio of expenses to average 1.88% 1.93% A, F
net assets
Ratio of expenses to average 1.85% G 1.90% A, G
net assets after expense
reductions
Ratio of net investment (1.01)% (.73)% A
income (loss) to average net
assets
Portfolio turnover 122% 108%
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE
AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD DECEMBER 31, 1996 (COMMENCEMENT OF SALE OF CLASS B
SHARES) TO NOVEMBER 30, 1997.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - CLASS C
YEARS ENDED NOVEMBER 30,
1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 51.95 $ 51.84
period
Income from Investment
Operations
Net investment income (loss) (.54) (.02)
D
Net realized and unrealized 12.87 .13
gain (loss)
Total from investment 12.33 .11
operations
Less Distributions
From net realized gain (6.04) -
Net asset value, end of period $ 58.24 $ 51.95
TOTAL RETURN B, C 27.30% 0.21%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 64 $ 1
millions)
Ratio of expenses to average 1.89% 1.95% A, F
net assets
Ratio of expenses to average 1.86% G 1.89% A, G
net assets after expense
reductions
Ratio of net investment (1.03)% (.82)% A
income (loss) to average net
assets
Portfolio turnover 122% 108%
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE
AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD NOVEMBER 3, 1997 (COMMENCEMENT OF SALE OF CLASS C
SHARES) TO NOVEMBER 30, 1997.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED NOVEMBER 30,
1998 1997 1996 1995 1994
SELECTED PER-SHARE DATA
Net asset value, beginning $ 52.86 $ 45.52 $ 40.39 $ 28.90 $ 29.74
of period
Income from Investment
Operations
Net investment income .06 B .22 B .45 B .28 .30
Net realized and unrealized 13.08 8.72 7.00 11.69 .42
gain (loss)
Total from investment 13.14 8.94 7.45 11.97 .72
operations
Less Distributions
From net investment income (.05) D (.37) (.21) (.27) (.11)
From net realized gain (6.24) D (1.23) (2.11) (.16) (1.45)
In excess of net realized - - - (.05) -
gain
Total distributions (6.29) (1.60) (2.32) (.48) (1.56)
Net asset value, end of period $ 59.71 $ 52.86 $ 45.52 $ 40.39 $ 28.90
TOTAL RETURN A 28.67% 20.46% 19.68% 42.15% 2.46%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 1,088 $ 1,032 $ 1,324 $ 791 $ 410
(in millions)
Ratio of expenses to average .76% .77% .79% .83% .86%
net assets
Ratio of expenses to average .74% C .75% C .77% C .83% .84% C
net assets after expense
reductions
Ratio of net investment .12% .46% 1.11% .92% 1.00%
income to average net assets
Portfolio turnover 122% 108% 76% 97% 137%
</TABLE>
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
B NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
C FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
D THE AMOUNTS SHOWN REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK
TO TAX DIFFERENCES (SEE NOTE 1 OF NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1998
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Equity Growth Fund (the fund) is a fund of Fidelity
Advisor Series I (the trust) and is authorized to issue an unlimited
number of shares. The trust is registered under the Investment Company
Act of 1940, as amended (the 1940 Act), as an open-end management
investment company organized as a Massachusetts business trust.
The fund offers Class A, Class T, Class B, Class C and Institutional
Class shares, each of which has equal rights as to assets and voting
privileges. Class B shares will automatically convert to Class A
shares after a holding period of seven years from the initial date of
purchase. Each class has exclusive voting rights with respect to
matters that affect that class. Investment income, realized and
unrealized capital gains and losses, the common expenses of the fund,
and certain fund-level expense reductions, if any, are allocated on a
pro rata basis to each class based on the relative net assets of each
class to the total net assets of the fund. Each class of shares
differs in its respective distribution, transfer agent, and certain
other class-specific fees, expenses, and expense reductions.
The financial statements have been prepared in conformity with
generally accepted accounting principles which require management to
make certain estimates and assumptions at the date of the financial
statements. The following summarizes the significant accounting
policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Securities (including restricted
securities) for which exchange quotations are not readily available
(and in certain cases debt securities which trade on an exchange) are
valued primarily using dealer-supplied valuations or at their fair
value as determined in good faith under consistently applied
procedures under the general supervision of the Board of Trustees.
Short-term securities with remaining maturities of sixty days or less
for which quotations are not readily available are valued at amortized
cost or original cost plus accrued interest, both of which approximate
current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases
and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
and settlement date on purchases and sales of securities. The effects
of changes in foreign currency exchange rates on investments in
securities are included with the net realized and unrealized gain or
loss on investment securities.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent that it distributes substantially all of
its taxable income for its fiscal year. The schedule of investments
includes information regarding income taxes under the caption "Income
Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend
date, except certain dividends from foreign securities where the
ex-dividend date may have passed, are recorded as soon as the fund is
informed of the ex-dividend date. Non-cash dividends included in
dividend income, if any, are recorded at the fair market value of the
securities received. Interest income is accrued as earned. Investment
income is recorded net of foreign taxes withheld where recovery of
such taxes is uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
DEFERRED TRUSTEE COMPENSATION. Under a Deferred Compensation Plan (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
compensation. Deferred amounts are treated as though equivalent dollar
amounts had been invested in shares of the fund or are invested in a
cross-section of other Fidelity funds. Deferred amounts remain in the
fund until distributed in accordance with the Plan.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date. Income dividends and capital gain distributions are
declared separately for each class.
Income and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. These differences, which may result in
distribution reclassifications, are primarily due to differing
treatments for litigation proceeds, foreign currency transactions,
passive foreign investment companies (PFIC), net operating losses and
losses deferred due to wash sales. The fund also utilized earnings and
profits distributed to shareholders on redemption of shares as a part
of the dividends paid deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Undistributed net investment income and accumulated undistributed net
realized gain (loss) on investments and foreign currency transactions
may include temporary book and tax basis differences which will
reverse in a subsequent period. Any taxable income or gain remaining
at fiscal year end is distributed in the following year.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the contracts'
terms. The U.S. dollar value of foreign currency contracts is
determined using contractual currency exchange rates established at
the time of each trade.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with
other affiliated entities of FMR, may transfer uninvested cash
balances into one or more joint trading accounts. These balances are
invested in one or more repurchase agreements for U.S. Treasury or
Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are
marked-to-market daily and maintained at a value at least equal to the
principal amount of the repurchase agreement (including accrued
interest). FMR, the fund's investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
RESTRICTED SECURITIES. The fund is permitted to invest in securities
that are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from
registration or to the public if the securities are registered.
Disposal of these securities may involve time-consuming negotiations
and expense, and prompt sale at an acceptable price may be difficult.
At the end of the period, the fund had no investments in restricted
securities.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $6,877,642,000 and $7,315,305,000, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment advisor FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus a
fixed individual fund fee rate applied to the average net assets of
the fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
advised by FMR. The rates ranged from .2500% to .5200% for the period.
The annual individual fund fee rate is .30%. In the event that these
rates were lower than the contractual rates in effect during the
period, FMR voluntarily implemented the above rates, as they resulted
in the same or a lower management fee. For the period, the management
fee was equivalent to an annual rate of .59% of average net assets.
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the
1940 Act, the Trustees have adopted separate distribution plans with
respect to each class of shares (collectively referred to as "the
Plans"). Under certain of the Plans, the class pays Fidelity
Distributors Corporation (FDC), an affiliate of FMR, a distribution
and service fee. A portion of this fee may be reallowed to securities
dealers, banks and other financial institutions for the distribution
of each class of shares and providing shareholder support services.
For the period, this fee was based on the following annual rates of
the average net assets of each applicable class:
CLASS A .25%
CLASS T .50%
CLASS B 1.00% *
CLASS C 1.00% *
* .75% REPRESENTS A DISTRIBUTION FEE AND .25% REPRESENTS A SHAREHOLDER
SERVICE FEE.
For the period, each class paid FDC the following amounts, a portion
of which was retained by FDC:
PAID TO FDC RETAINED BY FDC
CLASS A $ 142,000 $ -
CLASS T 22,838,000 222,000
CLASS B 1,665,000 1,250,000
CLASS C 260,000 258,000
$ 24,905,000 $ 1,730,000
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
DISTRIBUTION AND SERVICE PLAN - CONTINUED
Under the Plans, FMR may use its resources to pay administrative and
promotional expenses related to the sale of each class' shares. The
Plans also authorize payments to third parties that assist in the sale
of each class' shares or render shareholder support services. For the
period, the following amounts were paid to third parties under the
Plans:
CLASS A $ 24,000
CLASS T 601,000
CLASS B 36,000
CLASS C 17,000
INSTITUTIONAL CLASS 49,000
SALES LOAD. FDC receives a front-end sales charge of up to 5.75% for
selling Class A shares, and 3.50% for selling Class T shares of the
fund. FDC receives the proceeds of contingent deferred sales charges
levied on Class B share redemptions occurring within six years of
purchase and on Class C share redemptions occurring within one year of
purchase. Contingent deferred sales charges are based on declining
rates ranging from 5% to 1% for Class B and 1% for Class C, of the
lesser of the cost of shares at the initial date of purchase or the
net asset value of the redeemed shares, excluding any reinvested
dividends and capital gains. In addition, purchases of Class A and
Class T shares that were subject to a finder's fee bear a contingent
deferred sales charge on assets that do not remain in the fund for at
least one year. The Class A and Class T contingent deferred sales
charge is based on 0.25% of the lesser of the cost of shares at the
initial date of purchase or the net asset value of the redeemed
shares, excluding any reinvested dividends and capital gains. A
portion of the sales charges paid to FDC are paid to securities
dealers, banks and other financial institutions.
For the period, sales charge amounts paid to and retained by FDC were
as follows:
PAID TO FDC RETAINED BY FDC
CLASS A $ 838,000 $ 356,000
CLASS T 2,265,000 769,000
CLASS B 488,000 488,000 *
CLASS C 25,000 25,000 *
$ 3,616,000 $ 1,638,000
* WHEN CLASS B AND CLASS C SHARES ARE INITIALLY SOLD, FDC PAYS
COMMISSIONS FROM ITS OWN RESOURCES TO SECURITIES DEALERS,
BANKS, AND OTHER FINANCIAL INSTITUTIONS THROUGH WHICH THE SALES ARE
MADE.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
TRANSFER AGENT FEES. Fidelity Investments Institutional Operations
Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend
disbursing and shareholder servicing agent for each class of the fund.
FIIOC receives account fees and asset-based fees that vary according
to the account size and type of account of the shareholders of the
respective classes of the fund. FIIOC pays for typesetting, printing
and mailing of all shareholder reports, except proxy statements. For
the period, the following amounts were paid to FIIOC :
AMOUNT % OF AVERAGE NET ASSETS
CLASS A $ 138,000 .24
CLASS T 7,863,000 .17
CLASS B 418,000 .25
CLASS C 57,000 .22
INSTITUTIONAL CLASS 1,432,000 .14
$ 9,908,000
ACCOUNTING FEES. Fidelity Service Company, Inc., an affiliate of FMR,
maintains the fund's accounting records. The fee is based on the level
of average net assets for the month plus out-of-pocket expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $1,419,000 for the
period.
5. EXPENSE REDUCTIONS.
FMR has directed certain portfolio trades to brokers who paid a
portion of the fund's expenses. For the period, the fund's expenses
were reduced by $1,314,000 under this arrangement.
In addition, the fund has entered into arrangements with its custodian
and each class' transfer agent whereby credits realized as a result of
uninvested cash balances were used to reduce a portion of expenses.
During the period, the fund's custodian fees were reduced by $5,000
under the custodian arrangement.
6. BANK BORROWINGS.
The fund is permitted to have bank borrowings for temporary or
emergency purposes to fund shareholder redemptions. The fund has
established borrowing arrangements with certain banks. Under the most
restrictive arrangement, the fund must pledge to the bank securities
having a market value in excess of 220% of the total bank borrowings.
The
6. BANK BORROWINGS - CONTINUED
interest rate on the borrowings is the bank's base rate, as revised
from time to time. The maximum loan and the average daily loan balance
during the period for which the loan was outstanding amounted to
$2,787,000. The weighted average interest rate was 5.75%.
7. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
Amounts in thousands
YEAR ENDED NOVEMBER 30,
1998 1997 A
FROM NET INVESTMENT INCOME
Class A $ 15 $ 44
Class T - 13,448
Class B - -
Class C - -
Institutional Class 1,035 10,782
Total $ 1,050 $ 24,274
FROM NET REALIZED GAIN
Class A $ 3,543 $ 155
Class T 488,378 97,420
Class B 9,146 0 B
Class C 223 -
Institutional Class 121,417 35,855
Total $ 622,707 $ 133,430
A DISTRIBUTIONS FOR CLASS B ARE FOR THE PERIOD DECEMBER 31, 1996
(COMMENCEMENT OF SALE OF SHARES) TO NOVEMBER 30, 1997.
B REPRESENTS AN AMOUNT LESS THAN ONE THOUSAND DOLLARS.
8. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:
Amounts in thousands
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SHARES DOLLARS
YEAR ENDED NOVEMBER 30, YEAR ENDED NOVEMBER 30, YEAR ENDED NOVEMBER 30, YEAR ENDED NOVEMBER 30,
1998 1997 A, B 1998 1997 A, B
CLASS A Shares sold 1,200 527 $ 61,899 $ 25,137
Reinvestment of distributions 77 5 3,416 193
Shares redeemed (254) (79) (13,114) (3,746)
Net increase (decrease) 1,023 453 $ 52,201 $ 21,584
CLASS T Shares sold 26,408 24,794 $ 1,365,162 $ 1,148,466
Reinvestment of distributions 10,178 2,444 457,907 103,689
Shares redeemed (28,971) (25,241) (1,483,407) (1,172,658)
Net increase (decrease) 7,615 1,997 $ 339,662 $ 79,497
CLASS B Shares sold 4,256 1,494 $ 218,844 $ 71,102
Reinvestment of distributions 193 - 8,586 -
Shares redeemed (507) (103) (25,743) (4,871)
Net increase (decrease) 3,942 1,391 $ 201,687 $ 66,231
CLASS C Shares sold 1,458 19 $ 75,711 $ 959
Reinvestment of distributions 4 - 187 -
Shares redeemed (377) - (19,681) -
Net increase (decrease) 1,085 19 $ 56,217 $ 959
INSTITUTIONAL CLASS Shares 6,340 8,066 $ 327,822 $ 377,761
sold
Reinvestment of distributions 1,960 748 89,402 32,100
Shares redeemed (9,614) (18,359) (490,611) (860,250)
Net increase (decrease) (1,314) (9,545) $ (73,387) $ (450,389)
</TABLE>
A SHARE TRANSACTIONS FOR CLASS B ARE FOR THE PERIOD DECEMBER 31, 1996
(COMMENCEMENT OF SALE OF SHARES) TO NOVEMBER 30, 1997.
B SHARE TRANSACTIONS FOR CLASS C ARE FOR THE PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO NOVEMBER 30, 1997.
9. REGISTRATION FEES.
For the period, each class paid the following amounts to register its
shares for sale:
REGISTRATION FEES
CLASS A $ 10,000
CLASS T 214,000
CLASS B 22,000
CLASS C 14,000
INSTITUTIONAL CLASS 50,000
$ 310,000
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Advisor Series I and the Shareholders of
Fidelity Advisor Equity Growth Fund:
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of
Fidelity Advisor Equity Growth Fund (a fund of the Fidelity Advisor
Series I trust) at November 30, 1998, and the results of its
operations, the changes in its net assets and the financial highlights
for the periods indicated, in conformity with generally accepted
accounting principles. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Fidelity Advisor Equity Growth Fund's
management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of
these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which
included
confirmation of securities at November 30, 1998 by correspondence with
the custodian and brokers, provide a reasonable basis for the opinion
expressed above.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
January 13, 1999
DISTRIBUTIONS
The Board of Trustees of Fidelity Advisor Equity Growth Fund voted to
pay to shareholders of record at the opening of business on record
date, the following distributions derived from capital gains realized
from sales of portfolio securities, and dividends derived from net
investment income:
CLASS A
PAY DATE 12/22/97 1/5/98 12/21/98 1/11/99
RECORD DATE 12/19/97 1/2/98 12/18/98 1/08/99
DIVIDENDS $0.11 - - -
SHORT-TERM
CAPITAL GAINS $1.85 $0.24 $1.62 $.38
LONG-TERM
CAPITAL GAINS $3.80 $0.18 $4.73 $.29
LONG-TERM
CAPITAL GAIN PERCENTAGE:
28% rate 55.42% - - -
20% rate 44.58% 100% 100% 100%
CLASS T
PAY DATE 12/22/97 1/5/98 12/21/98 1/11/99
RECORD DATE 12/19/97 1/2/98 12/18/98 1/08/99
DIVIDENDS - - - -
SHORT-TERM
CAPITAL GAINS $1.82 $0.24 $1.46 $.38
LONG-TERM
CAPITAL GAINS $3.80 $0.18 $4.73 $.29
LONG-TERM
CAPITAL GAIN PERCENTAGE:
28% rate 55.42% - - -
20% rate 44.58% 100% 100% 100%
CLASS B
PAY DATE 12/22/97 1/5/98 12/21/98 1/11/99
RECORD DATE 12/19/97 1/2/98 12/18/98 1/08/99
DIVIDENDS - - - -
SHORT-TERM
CAPITAL GAINS $1.85 $0.24 $1.39 $.38
LONG-TERM
CAPITAL GAINS $3.80 $0.18 $4.73 $.29
LONG-TERM
CAPITAL GAIN PERCENTAGE:
28% rate 55.42% - - -
20% rate 44.58% 100% 100% 100%
CLASS C
PAY DATE 12/22/97 1/5/98 12/21/98 1/11/99
RECORD DATE 12/19/97 1/2/98 12/18/98 1/08/99
DIVIDENDS - - - -
SHORT-TERM
CAPITAL GAINS $1.82 $0.24 $1.49 $.38
LONG-TERM
CAPITAL GAINS $3.80 $0.18 $4.73 $.29
LONG-TERM
CAPITAL GAIN PERCENTAGE:
28% rate 55.42% - - -
20% rate 44.58% 100% 100% 100%
A total of 21.19%, 23.09%, 22.14% and 20.95% of the dividends
distributed by Class A, Class T, Class B and Class C, respectively
during the fiscal year qualifies for the dividends-received deduction
for corporate shareholders.
The fund will notify shareholders in January 1999 of the applicable
percentages for use in preparing 1998 income tax returns.
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.)
Inc., London, England
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Abigail P. Johnson, Vice President
Jennifer Uhrig, Vice President
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
* INDEPENDENT TRUSTEES
ADVISORY BOARD
J. Gary Burkhead
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Investments Institutional Operations Company, Inc.
Boston, MA
CUSTODIAN
The Chase Manhattan Bank
New York, NY
FOCUS FUNDS
Fidelity Advisor Consumer
Industries Fund
Fidelity Advisor Cyclical
Industries Fund
Fidelity Advisor Financial
Services Fund
Fidelity Advisor Health Care Fund
Fidelity Advisor Natural
Resources Fund
Fidelity Advisor Technology Fund
Fidelity Advisor Utilities Growth Fund
GROWTH FUNDS
Fidelity Advisor Latin America Fund
Fidelity Advisor Japan Fund
Fidelity Advisor Europe Capital Appreciation Fund
Fidelity Advisor International Capital Appreciation Fund
Fidelity Advisor Overseas Fund
Fidelity Advisor Diversified International Fund
Fidelity Advisor Global Equity Fund
Fidelity Advisor TechnoQuant
Growth Fund
SM
Fidelity Advisor Small Cap Fund
Fidelity Advisor Strategic
Opportunities Fund
Fidelity Advisor Mid Cap Fund
Fidelity Advisor Retirement
Growth Fund
Fidelity Advisor Equity Growth Fund
Fidelity Advisor Large Cap Fund
Fidelity Advisor Dividend Growth Fund
Fidelity Advisor Growth
Opportunities Fund
GROWTH AND INCOME FUNDS
Fidelity Advisor Growth & Income Fund
Fidelity Advisor Equity Income Fund
Fidelity Advisor Asset Allocation Fund
Fidelity Advisor Balanced Fund
TAXABLE INCOME FUNDS
Fidelity Advisor Emerging Markets Income Fund
Fidelity Advisor High Yield Fund
Fidelity Advisor Strategic Income Fund
Fidelity Advisor Mortgage
Securities Fund
Fidelity Advisor Government Investment Fund
Fidelity Advisor Intermediate Bond Fund
Fidelity Advisor Short Fixed-Income Fund
MUNICIPAL FUNDS
Fidelity Advisor Municipal Income Fund
Fidelity Advisor Intermediate Municipal Income Fund
MONEY MARKET FUNDS
Prime Fund
Treasury Fund
Tax-Exempt Fund
(registered trademark)
(2_FIDELITY_LOGOS)FIDELITY ADVISOR
(REGISTERED TRADEMARK)
EQUITY GROWTH
FUND - INSTITUTIONAL CLASS
ANNUAL REPORT
NOVEMBER 30, 1998
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over
time.
FUND TALK 6 The manager's review of fund
performance, strategy and
outlook.
INVESTMENT CHANGES 9 A summary of major shifts in
the fund's investments over
the past six months.
INVESTMENTS 10 A complete list of the fund's
investments with their
market value.
FINANCIAL STATEMENTS 19 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 28 Notes to the financial
statements.
REPORT OF INDEPENDENT 37 The auditors' opinion.
ACCOUNTANTS
DISTRIBUTIONS 38
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION
OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS
IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT
INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY ADVISOR FUND, INCLUDING CHARGES
AND EXPENSES, CONTACT YOUR
INVESTMENT PROFESSIONAL FOR A FREE PROSPECTUS. READ IT CAREFULLY
BEFORE YOU INVEST OR SEND MONEY.
Standard & Poor's, S&P and S&P 500 are registered service marks of The
McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity
Distributors Corporation.
Other third party marks appearing herein are the property of their
respective owners.
All other marks appearing herein are registered or unregistered
trademarks or service marks of FMR Corp. or an affiliated company.
This report is printed on recycled paper using soy-based inks.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
The month of November proved to be a strong one for the stock and bond
markets. The Dow Jones Industrial Average reached a record high.
Merger activity, which had lulled during the summer correction, has
increased significantly. Small-cap stocks posted their third
consecutive month of positive returns, as did emerging markets. While
bond returns generally were not at the levels of their equity
counterparts, they were mostly positive nonetheless.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will
greatly reduce your vulnerability to any single decline. We know from
experience, for example, that stock prices have gone up over longer
periods of time, have significantly outperformed other types of
investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through
diversification. A stock mutual fund, for instance, is already
diversified, because it invests in many different companies. You can
increase your diversification further by investing in a number of
different stock funds, or in such other investment categories as
bonds. If you have a short investment time horizon, you might want to
consider moving some of your investment into a money market fund,
which seeks income and a stable share price by investing in
high-quality, short-term investments. Of course, it's important to
remember that there is no assurance that a money market fund will
achieve its goal of maintaining a stable net asset value of $1.00 per
share, and that these types of funds are neither insured nor
guaranteed by any agency of the U.S. government.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases. Of course, you should
consider your financial ability to continue your purchases through
periods of low price levels before undertaking such a strategy.
Remember to contact your investment professional if you need help with
your investments.
Best regards,
Edward C. Johnson 3d
FIDELITY ADVISOR EQUITY GROWTH FUND - INSTITUTIONAL CLASS
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can
look at the total percentage change in value, the average annual
percentage change or the growth of a hypothetical $10,000 investment.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
1998
FIDELITY ADV EQUITY GROWTH - 28.67% 170.15% 791.46%
INST CL
S&P 500 (registered trademark) 23.66% 181.25% 457.74%
Growth Funds Average 14.32% 127.55% 363.55%
CUMULATIVE TOTAL RETURNS show Institutional Class' performance in
percentage terms over a set period - in this case, one year, five
years or 10 years. For example, if you had invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment
would be $1,050. You can compare Institutional Class' returns to the
performance of the Standard & Poor's 500 Index - a market
capitalization-weighted index of common stocks. To measure how
Institutional Class' performance stacked up against its peers, you can
compare it to the growth funds average, which reflects the performance
of mutual funds with similar objectives tracked by Lipper Analytical
Services, Inc. The past one year average represents a peer group of
961 mutual funds. These benchmarks include reinvested dividends and
capital gains, if any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
1998
FIDELITY ADV EQUITY GROWTH - 28.67% 21.99% 24.45%
INST CL
S&P 500 23.66% 22.98% 18.75%
Growth Funds Average 14.32% 17.48% 16.16%
AVERAGE ANNUAL TOTAL RETURNS take Institutional Class' cumulative
return and show you what would have happened if Institutional Class
had performed at a constant rate each year.
$10,000 OVER 10 YEARS
FA Equity Growth -CL I S&P 500
00086 SP001
1988/11/30 10000.00 10000.00
1988/12/31 10460.96 10175.00
1989/01/31 11285.26 10919.81
1989/02/28 11293.76 10647.91
1989/03/31 11667.67 10896.00
1989/04/30 12440.98 11461.51
1989/05/31 13511.72 11925.70
1989/06/30 13010.34 11857.72
1989/07/31 13902.63 12928.47
1989/08/31 14446.49 13181.87
1989/09/30 14845.90 13127.82
1989/10/31 14658.94 12823.26
1989/11/30 14718.43 13084.85
1989/12/31 15151.80 13398.89
1990/01/31 13761.10 12499.82
1990/02/28 14315.44 12661.07
1990/03/31 15151.80 12996.59
1990/04/30 14850.32 12671.68
1990/05/31 16960.68 13907.16
1990/06/30 17106.56 13812.60
1990/07/31 16620.30 13768.40
1990/08/31 14500.21 12523.73
1990/09/30 13304.02 11913.83
1990/10/31 13469.35 11862.60
1990/11/30 15122.62 12628.92
1990/12/31 16202.12 12981.27
1991/01/31 18555.61 13547.25
1991/02/28 20228.33 14515.88
1991/03/31 22212.27 14867.16
1991/04/30 22134.47 14902.84
1991/05/31 23291.76 15546.65
1991/06/30 21356.45 14834.61
1991/07/31 23087.53 15525.90
1991/08/31 24332.35 15893.87
1991/09/30 24390.70 15628.44
1991/10/31 24458.78 15837.86
1991/11/30 23612.69 15199.60
1991/12/31 26686.13 16938.43
1992/01/31 27433.37 16623.37
1992/02/29 27574.39 16839.48
1992/03/31 26272.68 16511.11
1992/04/30 25730.31 16996.54
1992/05/31 25610.99 17079.82
1992/06/30 24764.88 16825.33
1992/07/31 25632.68 17513.49
1992/08/31 25014.37 17154.46
1992/09/30 25480.82 17356.88
1992/10/31 26825.91 17417.63
1992/11/30 28604.90 18011.57
1992/12/31 29391.48 18233.11
1993/01/31 30213.19 18386.27
1993/02/28 29447.59 18636.33
1993/03/31 30379.62 19029.55
1993/04/30 29891.41 18569.04
1993/05/31 31644.51 19066.69
1993/06/30 31777.66 19121.98
1993/07/31 31245.07 19045.49
1993/08/31 32410.10 19767.32
1993/09/30 33386.51 19615.11
1993/10/31 33808.14 20021.14
1993/11/30 32998.17 19830.94
1993/12/31 34008.60 20070.89
1994/01/31 35235.71 20753.30
1994/02/28 34954.95 20190.89
1994/03/31 33539.44 19310.57
1994/04/30 33925.49 19557.74
1994/05/31 33738.31 19878.49
1994/06/30 32276.01 19391.47
1994/07/31 32989.61 20027.51
1994/08/31 34498.71 20848.63
1994/09/30 33808.50 20337.84
1994/10/31 34931.55 20795.44
1994/11/30 33808.50 20038.07
1994/12/31 33993.98 20335.24
1995/01/31 33708.42 20862.53
1995/02/28 35029.15 21675.54
1995/03/31 36373.68 22315.19
1995/04/30 37956.18 22972.37
1995/05/31 39300.71 23890.58
1995/06/30 42311.03 24445.56
1995/07/31 45487.92 25256.17
1995/08/31 45975.76 25319.56
1995/09/30 47296.49 26388.05
1995/10/31 47082.32 26293.84
1995/11/30 48058.00 27448.14
1995/12/31 47631.13 27976.80
1996/01/31 48772.38 28929.13
1996/02/29 49884.29 29197.30
1996/03/31 50250.71 29478.47
1996/04/30 51779.59 29912.98
1996/05/31 53194.74 30684.44
1996/06/30 52537.71 30801.34
1996/07/31 49366.24 29440.54
1996/08/31 50541.32 30061.44
1996/09/30 53965.50 31753.30
1996/10/31 54256.11 32629.06
1996/11/30 57516.03 35095.49
1996/12/31 55677.59 34400.24
1997/01/31 59045.75 36549.57
1997/02/28 57721.97 36836.12
1997/03/31 54537.04 35322.52
1997/04/30 57341.88 37431.28
1997/05/31 61431.17 39710.10
1997/06/30 63973.87 41489.11
1997/07/31 68862.68 44790.40
1997/08/31 66175.80 42281.24
1997/09/30 69989.86 44596.98
1997/10/31 67289.87 43107.44
1997/11/30 69282.09 45102.89
1997/12/31 69380.84 45877.30
1998/01/31 70289.29 46384.71
1998/02/28 75664.00 49729.97
1998/03/31 78306.57 52276.64
1998/04/30 79814.47 52802.54
1998/05/31 77769.10 51894.87
1998/06/30 82680.99 54002.84
1998/07/31 84368.05 53427.71
1998/08/31 70602.81 45703.13
1998/09/30 77858.67 48630.87
1998/10/31 83322.96 52586.51
1998/11/30 89145.57 55773.78
IMATRL PRASUN SHR__CHT 19981130 19981223 141752 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Equity Growth Fund - Institutional Class
on November 30, 1988. As the chart shows, by November 30, 1998, the
value of the investment would have grown to $89,146 - a 791.46%
increase on the initial investment. For comparison, look at how the
Standard & Poor's 500 Index did over the same period. With dividends
and capital gains, if any, reinvested, the same $10,000 investment
would have grown to $55,774 - a 457.74% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
long-term growth and
short-term volatility. In turn, the
share price and return of a
fund that invests in stocks will
vary. That means if you sell
your shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
When the final bell of the U.S. stock
market sounded on Monday,
November 23, 1998, the Dow
Jones Industrial Average stood at a
record high of 9374.27, serving
notice that the bleak economic
outlook from just a few short months
earlier would not keep positive
investor sentiment down. For the
12-month period ending November
30, 1998, the Dow - an index of
30 blue-chip stocks - returned
18.56%. What caused the
turnaround from the doldrums of
equity performance during the
summer and early fall? A variety of
factors: The economic problems in
Russia, Brazil and other emerging
markets began to dissipate; Asian
markets began to rebound; and,
perhaps most importantly, three
interest-rate cuts late in the period
by the Federal Reserve Board
helped stem the tide of a slowing
U.S. economy. All these factors
culminated in the Dow reaching its
record high late in November, a
peak that outpaced the previous
record set in July by nearly 40 points.
Small-cap stock performance was
still a far cry behind their large-cap
brethren. For the period, the Russell
2000 Index - a popular measure
of small-cap stock performance -
returned -6.62%, significantly
trailing the large-cap weighted
Standard & Poor's 500 Index's
return of 23.66%. Despite the late
rally in the equity market, this kind
of volatility has characterized the
entire year, and when it will level off
is impossible to predict.
An interview with Jennifer Uhrig, Portfolio Manager of Fidelity
Advisor Equity Growth Fund
Q. HOW DID THE FUND PERFORM, JENNIFER?
A. The fund did well. For the 12 months that ended November 30, 1998,
the fund's Institutional Class shares returned 28.67%. That beat the
Standard & Poor's 500 Index, which produced a return of 23.66% during
that time. The growth funds average, as tracked by Lipper Analytical
Services, had a 12-month return of 14.32% as of November 30, 1998.
Q. WHAT FACTORS CONTRIBUTED TO THE FUND'S STRONG SHOWING?
A. At the close of the period, over half of the fund's investments
were in three of the market's primary growth areas - technology,
retail and health care. These sectors in general - and specifically
the fund's investments in several of the larger, more well-known
companies within them - turned in impressive performances during the
period. Other factors that helped performance included not owning much
in the way of consumer nondurable stocks, such as Procter & Gamble and
Coca-Cola, as well as the fund's relatively minimal exposure to
finance and cyclical - or economically sensitive -- stocks, which
struggled during the period. The fund's Lipper peers may have had
significant positions in these areas.
Q. CAN YOU ISOLATE SOME OF THE FUND'S LARGE-COMPANY POSITIONS WITHIN
THE TECHNOLOGY, RETAIL AND HEALTH SECTORS THAT PERFORMED WELL?
A. Sure. In the technology area, Microsoft continued to be a stalwart
due to its strong product lineup and its pricing power. Cisco Systems,
a company that specializes in communications networking, also
performed well, and Dell Computers - which has mastered the process of
selling PCs directly without the middle man - was a positive
contributor. Some of the fund's retail-related investments - such as
Home Depot and Wal-Mart - benefited from good management execution and
from solid consumer spending trends. Lastly, several of the fund's
health related investments - particularly in the pharmaceuticals area
- - performed exceptionally well. The fund's stakes in Merck and
Warner-Lambert, to name just two, prospered due to strong product
introductions, more generous medical plans for U.S. employees - and
thus more access to prescription drugs - and the overall aging of the
U.S. population.
Q. DID ANY TRENDS EMERGE AS BYPRODUCTS OF THE INVESTING CLIMATE WE SAW
DURING THE PERIOD?
A. There was a tremendous disparity between the stock price valuations
of smaller companies and those of larger companies. Large-cap stocks
did very well, due mostly to the backdrop of global and domestic
economic uncertainty. When investors are concerned about the economy,
they tend to favor the stocks of larger companies, because larger
companies typically have more resources with which to weather a
potential recession. At the same time, investors stayed away from
small companies and other companies that were viewed as being more
vulnerable to a weaker economy.
Q. ASIDE FROM SOME OF THE NAMES YOU'VE MENTIONED, WHICH OTHER STOCKS
PERFORMED WELL? WHICH HOLDINGS DURING THE PERIOD WERE DISAPPOINTING?
A. WorldCom and Yahoo! were also good stocks for the fund. WorldCom
benefited from its merger with MCI and the potential to grow its
earnings rapidly through cost reductions. Yahoo! was bolstered by the
continued popularity of the Internet. Energy services stocks, on the
other hand, slumped as oil prices fell sharply. Warm weather trends
and the inability of OPEC to cut enough supply to support prices hurt
the fund's positions in both Schlumberger and Halliburton. These
companies make their money by selling equipment for oil drilling, and
the low price of oil discouraged additional drilling projects. I'm
sticking with these types of stocks, though, because oil is at
unusually low price levels and some company profiles look pretty good
over the long term.
Q. WHAT'S YOUR OUTLOOK FOR THE COMING MONTHS?
A. The disparity in performance between large and small stocks as well
as between growth and cyclicals has been extreme. Many cyclicals are
selling at prices that fully discount a recession; in fact, many are
at all-time lows. In contrast, many high-quality growth stocks are at
historically high valuations. The Federal Reserve Board's recent rate
cuts suggest that economic policy is now more concerned about
recession than inflation. This may give some investors the courage to
invest in some of these more economically sensitive areas, especially
given the values they offer. In light of this possibility, the fund
may add to small- and medium- cap stocks where the fundamentals are
favorable. In addition, the fund may add to stocks within the
traditional growth areas that may have cyclical, or economically
sensitive characteristics. An example of this in the technology area
is semiconductor capital equipment, while one in the retail area would
be department stores.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
JENNIFER UHRIG DISCUSSES
POSITIVE TRENDS IN THE
TECHNOLOGY SECTOR:
"Technology stocks were strong
contributors to the fund's
performance over the past 12
months for several major reasons.
First, the economic situation in Asia
- - which was a severe drag on
demand throughout 1998 -
appeared to be stable to improving
towards the end of the period.
Companies such as Microsoft and
Cisco Systems reported that while
business levels in that region
remained depressed, the situation
was modestly improving in places
such as Japan and Korea.
"Second, component prices -
particularly those of dynamic
random access memory chips, or
DRAMs - appeared to be
stabilizing. Prompted by the
uncertain economic outlook, DRAM
manufacturers overseas cut back
on capital expenditures and this
underinvestment led to a decrease
in supply, especially on leading
edge parts.
"A third factor involves the
much-discussed Year 2000 issue, in
which many of the world's
computers may read the `00' in the
year 2000 as being the year 1900.
Some major companies have
suggested that their older PCs may
need to be replaced by those that
are Year 2000-compliant, and
that could be a positive for the
entire technology industry."
FUND FACTS
GOAL: to achieve capital
appreciation by investing
primarily in common stock of
companies with above-average
growth characteristics
START DATE: November 22,
1983
SIZE: as of November 30,
1998, more than $6.7 billion
MANAGER: Jennifer Uhrig,
since 1997; joined Fidelity
in 1987
(checkmark)
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF NOVEMBER
30, 1998
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE STOCKS 6 MONTHS AGO
Microsoft Corp. 4.5 2.9
Philip Morris Companies, Inc. 3.9 1.7
Merck & Co., Inc. 3.6 3.1
Lilly (Eli) & Co. 2.4 1.2
Warner-Lambert Co. 2.2 2.3
MCI WorldCom, Inc. 2.2 2.6
Intel Corp. 2.2 1.9
Pfizer, Inc. 2.0 0.0
Fannie Mae 1.5 2.0
Cisco Systems, Inc. 1.3 1.5
TOP FIVE MARKET SECTORS AS OF
NOVEMBER 30, 1998
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE MARKET SECTORS 6
MONTHS AGO
TECHNOLOGY 30.9 24.5
HEALTH 16.8 18.8
RETAIL & WHOLESALE 8.6 11.6
MEDIA & LEISURE 7.7 10.2
FINANCE 7.5 11.3
</TABLE>
ASSET ALLOCATION (% OF FUND'S
INVESTMENTS)
AS OF NOVEMBER 30, 1998 * AS OF MAY 31, 1998 **
Row: 1, Col: 1, Value: 92.5
Row: 1, Col: 2, Value: 7.5
Row: 1, Col: 1, Value: 98.09999999999999
Row: 1, Col: 2, Value: 1.9
Stocks 92.5%
Short-term
investments 7.5%
FOREIGN
INVESTMENTS 4.2%
Stocks 98.1%
Short-term
investments 1.9%
FOREIGN
INVESTMENTS 2.8%
*
**
INVESTMENTS NOVEMBER 30, 1998
Showing Percentage of Total Value of Investment in Securities
<TABLE>
<CAPTION>
<S> <C> <C> <C>
COMMON STOCKS - 92.5%
SHARES VALUE (NOTE 1) (000S)
AEROSPACE & DEFENSE - 0.4%
AEROSPACE & DEFENSE - 0.2%
Boeing Co. 373,200 $ 15,161
DEFENSE ELECTRONICS - 0.2%
Raytheon Co. Class A 191,241 10,458
TOTAL AEROSPACE & DEFENSE 25,619
BASIC INDUSTRIES - 3.0%
CHEMICALS & PLASTICS - 1.5%
Cytec Industries, Inc. (a) 789,100 17,804
Great Lakes Chemical Corp. 886,200 35,393
Monsanto Co. 794,300 35,992
Solutia, Inc. 611,400 13,680
102,869
METALS & MINING - 0.3%
Aluminum Co. of America 303,600 22,504
PACKAGING & CONTAINERS - 0.3%
Owens-Illinois, Inc. (a) 576,800 18,530
PAPER & FOREST PRODUCTS - 0.9%
Champion International Corp. 535,600 22,261
Georgia-Pacific Corp. 314,700 17,859
Weyerhaeuser Co. 429,100 21,509
61,629
TOTAL BASIC INDUSTRIES 205,532
CONSTRUCTION & REAL ESTATE -
0.0%
ENGINEERING - 0.0%
Stolt Comex Seaway SA 370,400 3,125
Stolt Comex Seaway SA 125,800 896
sponsored ADR Class A
4,021
DURABLES - 0.8%
AUTOS, TIRES, & ACCESSORIES -
0.3%
TRW, Inc. 330,400 18,193
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
DURABLES - CONTINUED
TEXTILES & APPAREL - 0.5%
Fruit of the Loom, Inc. Class 1,067,400 $ 15,744
A (a)
NIKE, Inc. Class B 536,200 21,448
37,192
TOTAL DURABLES 55,385
ENERGY - 3.5%
ENERGY SERVICES - 1.4%
Baker Hughes, Inc. 886,730 16,238
BJ Services Co. (a) 655,900 9,060
Coflexip SA sponsored ADR 502,900 18,356
Halliburton Co. 881,700 25,900
Schlumberger Ltd. 351,700 15,717
Smith International, Inc. 523,600 12,632
97,903
OIL & GAS - 2.1%
Amerada Hess Corp. 284,600 15,795
Exxon Corp. 49,500 3,716
Newfield Exploration Co. (a) 686,600 13,389
Noble Affiliates, Inc. 615,500 15,580
Oryx Energy Co. (a) 357,100 4,932
Tosco Corp. 926,400 24,202
Total SA sponsored ADR 361,600 22,103
USX-Marathon Group 576,200 16,350
Vastar Resources, Inc. 191,300 7,760
Weatherford International, 801,200 14,622
Inc. (a)
138,449
TOTAL ENERGY 236,352
FINANCE - 7.5%
BANKS - 0.6%
Bank of Ireland, Inc. 1,156,780 23,991
U.S. Bancorp 454,400 16,728
40,719
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
FINANCE - CONTINUED
CREDIT & OTHER FINANCE - 1.4%
American Express Co. 592,504 $ 59,287
Household International, Inc. 853,890 33,408
92,695
FEDERAL SPONSORED CREDIT - 2.5%
Fannie Mae 1,433,000 104,251
Freddie Mac 1,025,400 62,037
166,288
INSURANCE - 2.5%
Allmerica Financial Corp. 421,900 23,284
Ambac Financial Group, Inc. 352,300 21,490
American International Group, 404,300 38,004
Inc.
MBIA, Inc. 71,500 4,630
Progressive Corp. 247,300 36,693
UNUM Corp. 884,500 47,652
171,753
SAVINGS & LOANS - 0.3%
Washington Mutual, Inc. 524,500 20,324
SECURITIES INDUSTRY - 0.2%
Bear Stearns Companies, Inc. 289,900 12,176
TOTAL FINANCE 503,955
HEALTH - 16.8%
DRUGS & PHARMACEUTICALS - 14.1%
American Home Products Corp. 712,800 37,957
Amgen, Inc. (a) 573,700 43,171
Bristol-Myers Squibb Co. 393,100 48,179
Elan Corp. PLC ADR (a) 586,500 39,955
Lilly (Eli) & Co. 1,776,100 159,294
Merck & Co., Inc. 1,560,900 241,744
Pfizer, Inc. 1,185,400 132,320
Schering-Plough Corp. 641,100 68,197
Sepracor, Inc. (a) 329,200 27,324
Warner-Lambert Co. 1,977,900 149,331
XOMA Corp. (a) 52 -
947,472
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
HEALTH - CONTINUED
MEDICAL EQUIPMENT & SUPPLIES
- - 2.3%
Guidant Corp. 531,600 $ 45,618
Johnson & Johnson 1,086,100 88,246
Medtronic, Inc. 340,600 23,054
156,918
MEDICAL FACILITIES MANAGEMENT
- - 0.4%
Health Management Associates, 1,197,875 25,979
Inc. Class A (a)
TOTAL HEALTH 1,130,369
INDUSTRIAL MACHINERY &
EQUIPMENT - 1.9%
ELECTRICAL EQUIPMENT - 1.3%
Alcatel Alsthom Compagnie 107,050 13,850
Generale d'Electricite SA
(RFD)
Alcatel Alsthom Compagnie 287,542 7,440
Generale d'Electricite SA
sponsored ADR
General Electric Co. 689,900 62,436
VWR Scientific Products Corp. 95,900 2,997
(a)
86,723
INDUSTRIAL MACHINERY &
EQUIPMENT - 0.4%
ASM Lithography Holdings N V 976,600 27,650
(a)
POLLUTION CONTROL - 0.2%
Waste Management, Inc. 392,300 16,820
TOTAL INDUSTRIAL MACHINERY & 131,193
EQUIPMENT
MEDIA & LEISURE - 7.7%
BROADCASTING - 4.8%
Cablevision Systems Corp. 331,900 13,732
Class A (a)
CBS Corp. 1,391,300 41,478
Comcast Corp. Class A 975,000 47,288
(special)
Cox Communications, Inc. 685,200 36,101
Class A (a)
MediaOne Group, Inc. 950,600 38,499
Metromedia Fiber Network, 284,700 14,769
Inc. Class A (a)
NTL, Inc. (a) 330,300 18,394
Tele-Communications, Inc. 1,563,300 66,049
(TCI Group) Series A (a)
Time Warner, Inc. 426,217 45,072
321,382
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
MEDIA & LEISURE - CONTINUED
ENTERTAINMENT - 0.3%
King World Productions, Inc. 569,200 $ 15,511
(a)
Tele-Communications, Inc. 266,100 5,272
(TCI Ventures Group) Series
A (a)
20,783
LEISURE DURABLES & TOYS - 0.2%
Harley-Davidson, Inc. 265,900 11,118
LODGING & GAMING - 0.0%
Sun International Hotels Ltd. 35,300 1,363
(a)
RESTAURANTS - 2.4%
Brinker International, Inc. 957,100 24,346
(a)
Darden Restaurants, Inc. 1,111,600 17,577
McDonald's Corp. 944,600 66,181
Outback Steakhouse, Inc. (a) 555,900 19,734
Papa John's International, 184,300 7,729
Inc. (a)
Tricon Global Restaurants, 622,280 28,353
Inc. (a)
163,920
TOTAL MEDIA & LEISURE 518,566
NONDURABLES - 5.7%
AGRICULTURE - 0.1%
Delta & Pine Land Co. 136,800 5,181
FOODS - 0.2%
American Italian Pasta Co. 400,800 10,120
Class A (a)
HOUSEHOLD PRODUCTS - 1.5%
Avon Products, Inc. 713,100 28,970
Gillette Co. 1,634,600 75,089
104,059
TOBACCO - 3.9%
Philip Morris Companies, Inc. 4,708,200 263,365
TOTAL NONDURABLES 382,725
RETAIL & WHOLESALE - 8.6%
APPAREL STORES - 1.1%
Abercrombie & Fitch Co. Class 286,300 16,033
A (a)
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
RETAIL & WHOLESALE - CONTINUED
APPAREL STORES - CONTINUED
Payless ShoeSource, Inc. (a) 503,800 $ 24,560
TJX Companies, Inc. 1,326,600 33,994
74,587
DRUG STORES - 1.6%
CVS Corp. 1,062,254 52,449
Walgreen Co. 1,010,500 54,251
106,700
GENERAL MERCHANDISE STORES -
2.4%
Consolidated Stores Corp. (a) 352,800 7,585
Federated Department Stores, 586,700 24,458
Inc. (a)
Nordstrom, Inc. 1,536,100 57,220
Saks Holdings, Inc. (a) 498,800 13,717
Wal-Mart Stores, Inc. 772,900 58,209
161,189
GROCERY STORES - 0.4%
Safeway, Inc. (a) 554,800 29,300
RETAIL & WHOLESALE,
MISCELLANEOUS - 3.1%
Amazon.com, Inc. (a) 99,200 19,046
Barnes & Noble, Inc. (a) 1,027,100 34,023
Best Buy Co., Inc. (a) 892,500 51,430
Home Depot, Inc. 1,054,000 52,437
Lowe's Companies, Inc. 521,400 22,029
Staples, Inc. (a) 234,030 8,176
Tandy Corp. 399,300 17,993
205,134
TOTAL RETAIL & WHOLESALE 576,910
SERVICES - 0.2%
EDUCATIONAL SERVICES - 0.2%
Apollo Group, Inc. Class A (a) 426,900 13,768
TECHNOLOGY - 30.9%
COMMUNICATIONS EQUIPMENT - 4.0%
Ascend Communications, Inc. 250,600 14,081
(a)
Aspect Telecommunications 651,500 12,338
Corp. (a)
Ciena Corp. (a) 266,300 4,527
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
TECHNOLOGY - CONTINUED
COMMUNICATIONS EQUIPMENT -
CONTINUED
Cisco Systems, Inc. (a) 1,188,225 $ 89,562
Lucent Technologies, Inc. 1,009,600 86,889
Northern Telecom Ltd. 172,400 8,063
OY Nokia AB sponsored ADR 545,400 53,449
268,909
COMPUTER SERVICES & SOFTWARE
- - 10.2%
America Online, Inc. 440,000 38,528
At Home Corp. Series A (a) 598,800 34,880
Autodesk, Inc. 388,600 14,135
Cadence Design Systems, Inc. 1,006,700 28,313
(a)
Citrix Systems, Inc. (a) 397,900 33,026
CompUSA, Inc. (a) 1,271,900 18,840
Compuware Corp. (a) 585,800 36,466
CSG Systems International, 291,300 18,279
Inc. (a)
E Trade Group, Inc. (a) 226,700 6,135
Electronic Arts, Inc. (a) 310,800 13,092
Electronics for Imaging, Inc. 656,100 17,592
(a)
Legato Systems, Inc. (a) 114,100 5,455
Microsoft Corp. (a) 2,466,600 300,931
Oracle Corp. (a) 709,000 24,283
Policy Management Systems 87,000 4,448
Corp. (a)
SAP AG (Systeme Anwendungen 626,200 26,496
Produkte) sponsored ADR
Siebel Systems, Inc. (a) 1,254,800 30,429
Veritas Software Corp. (a) 300,800 17,973
Yahoo, Inc. (a) 104,700 20,102
689,403
COMPUTERS & OFFICE EQUIPMENT
- - 7.6%
Apple Computer, Inc. (a) 351,100 11,213
CDW Computer Centers, Inc. (a) 14,300 1,158
Compaq Computer Corp. 1,156,100 37,573
Dell Computer Corp. (a) 528,800 32,158
EMC Corp. (a) 574,500 41,651
Fore Systems, Inc. (a) 285,800 4,323
Gateway 2000, Inc. (a) 635,600 35,673
Ingram Micro, Inc. Class A (a) 904,200 38,429
International Business 447,500 73,838
Machines Corp.
Lexmark International Group, 461,200 35,224
Inc. (a)
Maxtor Corp. (a) 723,500 9,993
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
TECHNOLOGY - CONTINUED
COMPUTERS & OFFICE EQUIPMENT
- - CONTINUED
Micron Electronics, Inc. (a) 654,900 $ 14,899
Pitney Bowes, Inc. 544,700 30,503
Quantum Corp. (a) 1,210,100 26,773
Sun Microsystems, Inc. (a) 349,300 25,870
Tech Data Corp. (a) 676,000 27,209
Xerox Corp. 600,300 64,532
511,019
ELECTRONIC INSTRUMENTS - 2.3%
Applied Materials, Inc. (a) 1,157,500 44,853
KLA-Tencor Corp. (a) 945,100 32,192
Novellus Systems, Inc. (a) 273,300 13,563
Perkin-Elmer Corp. 112,100 10,453
Teradyne, Inc. (a) 1,254,300 40,216
Waters Corp. (a) 169,800 13,096
154,373
ELECTRONICS - 6.8%
Altera Corp. (a) 655,800 32,175
Intel Corp. 1,357,900 146,144
Lattice Semiconductor Corp. 259,600 9,573
(a)
Linear Technology Corp. 576,500 40,391
Micron Technology, Inc. (a) 975,400 40,296
Motorola, Inc. 737,500 45,725
PMC-Sierra, Inc. (a) 61,800 3,329
Taiwan Semiconductor 1,485,200 22,278
Manufacturing Co. Ltd. ADR
(a)
Texas Instruments, Inc. 843,200 64,399
Vitesse Semiconductor Corp. 248,500 8,853
(a)
Xilinx, Inc. (a) 881,400 44,731
457,894
TOTAL TECHNOLOGY 2,081,598
TRANSPORTATION - 0.3%
RAILROADS - 0.3%
Wisconsin Central 999,800 18,121
Transportation Corp. (a)
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
UTILITIES - 5.2%
CELLULAR - 0.6%
Cellular Communications 130,800 $ 8,159
International, Inc. (a)
Nextel Communications, Inc. 1,528,200 32,856
Class A (a)
41,015
TELEPHONE SERVICES - 4.6%
AT&T Corp. 1,298,174 80,892
e.spire Communications, Inc. 151,400 1,221
(a)
Global TeleSystems Group, 636,300 27,619
Inc. (a)
MCI WorldCom, Inc. (a) 2,506,280 147,871
McLeodUSA, Inc. Class A (a) 682,700 21,121
NEXTLINK Communications, Inc. 123,700 3,742
Class A (a)
RCN Corp. (a) 725,100 12,327
WinStar Communications, Inc. 517,600 14,428
(a)
309,221
TOTAL UTILITIES 350,236
TOTAL COMMON STOCKS 6,234,350
(Cost $4,456,532)
CASH EQUIVALENTS - 7.5%
MATURITY AMOUNT (000S)
Investments in repurchase $ 503,133 503,060
agreements (U.S. Treasury
obligations), in a joint
trading account at 5.25%,
dated 11/30/98 due 12/1/98
(Cost $503,060)
TOTAL INVESTMENT IN $ 6,737,410
SECURITIES - 100%
(Cost $4,959,592)
</TABLE>
LEGEND
(a) Non-income producing
INCOME TAX INFORMATION
At November 30, 1998, the aggregate cost of investment securities for
income tax purposes was $5,011,060,000. Net unrealized appreciation
aggregated $1,726,350,000, of which $1,885,941,000 related to
appreciated investment securities and $159,591,000 related to
depreciated investment securities.
The fund hereby designates approximately $505,346,000 as a capital
gain dividend for the purpose of the dividend paid deduction.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AMOUNTS IN THOUSANDS (EXCEPT
PER-SHARE AMOUNTS) NOVEMBER
30, 1998
ASSETS
Investment in securities, at $ 6,737,410
value (including repurchase
agreements of $503,060)
(cost $4,959,592) - See
accompanying schedule
Receivable for investments 55,416
sold
Receivable for fund shares 10,570
sold
Dividends receivable 3,569
Other receivables 1,021
TOTAL ASSETS 6,807,986
LIABILITIES
Payable for investments $ 48,308
purchased
Payable for fund shares 15,218
redeemed
Accrued management fee 3,201
Distribution fees payable 2,406
Other payables and accrued 1,118
expenses
TOTAL LIABILITIES 70,251
NET ASSETS $ 6,737,735
Net Assets consist of:
Paid in capital $ 4,073,157
Accumulated undistributed net 886,744
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 1,777,834
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS $ 6,737,735
STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
AMOUNTS IN THOUSANDS (EXCEPT
PER-SHARE AMOUNTS) NOVEMBER
30, 1998
CALCULATION OF MAXIMUM $58.14
OFFERING PRICE CLASS A: NET
ASSET VALUE and redemption
price per share ($91,557
(divided by) 1,574.7 shares)
Maximum offering price per $61.69
share (100/94.25 of $58.14)
CLASS T: NET ASSET VALUE and $58.59
redemption price per share
($5,187,390 (divided by)
88,538 shares)
Maximum offering price per $60.72
share (100/96.50 of $58.59)
CLASS B: NET ASSET VALUE and $57.50
offering price per share
($306,619 (divided by)
5,332.8 shares) A
CLASS C: NET ASSET VALUE and $58.24
offering price price per
share ($64,262 (divided by)
1,103.4 shares) A
INSTITUTIONAL CLASS: NET $59.71
ASSET VALUE, offering price
and redemption price per
share ($1,087,907 (divided
by) 18,219 shares)
A REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS YEAR
ENDED NOVEMBER 30, 1998
INVESTMENT INCOME $ 41,315
Dividends
Interest 8,381
TOTAL INCOME 49,696
EXPENSES
Management fee $ 34,350
Transfer agent fees 9,908
Distribution fees 24,905
Accounting fees and expenses 816
Non-interested trustees' 23
compensation
Custodian fees and expenses 140
Registration fees 310
Audit 62
Legal 121
Interest 1
Miscellaneous 82
Total expenses before 70,718
reductions
Expense reductions (1,319) 69,399
NET INVESTMENT INCOME (LOSS) (19,703)
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 920,851
Foreign currency transactions 79 920,930
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 544,819
Assets and liabilities in (142) 544,677
foreign currencies
NET GAIN (LOSS) 1,465,607
NET INCREASE (DECREASE) IN $ 1,445,904
NET ASSETS RESULTING FROM
OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED NOVEMBER 30, 1998 YEAR ENDED NOVEMBER 30, 1997
INCREASE (DECREASE) IN NET
ASSETS
Operations Net investment $ (19,703) $ 1,831
income (loss)
Net realized gain (loss) 920,930 736,818
Change in net unrealized 544,677 175,459
appreciation (depreciation)
NET INCREASE (DECREASE) IN 1,445,904 914,108
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (1,050) (24,274)
From net investment income
From net realized gain (622,707) (133,430)
TOTAL DISTRIBUTIONS (623,757) (157,704)
Share transactions - net 576,380 (282,118)
increase (decrease)
TOTAL INCREASE (DECREASE) 1,398,527 474,286
IN NET ASSETS
NET ASSETS
Beginning of period 5,339,208 4,864,922
End of period (including $ 6,737,735 $ 5,339,208
undistributed net investment
income of $0 and $1,198,
respectively)
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C> <C>
YEARS ENDED NOVEMBER 30,
1998 1997 1996 F
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 51.69 $ 44.80 $ 39.47
period
Income from Investment
Operations
Net investment income (loss) (.13) (.06) .04
E
Net realized and unrealized 12.76 8.54 5.29
gain (loss)
Total from investment 12.63 8.48 5.33
operations
Less Distributions
From net investment income (.03) I (.36) -
From net realized gain (6.15) I (1.23) -
Total distributions (6.18) (1.59) -
Net asset value, end of period $ 58.14 $ 51.69 $ 44.80
TOTAL RETURN B, C 28.21% 19.73% 13.50%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 92 $ 29 $ 4
millions)
Ratio of expenses to average 1.12% 1.32% G 1.52% A, D, G
net assets
Ratio of expenses to average 1.10% H 1.30% H 1.50% A, H
net assets after expense
reductions
Ratio of net investment (.26)% (.12)% .38% A
income (loss) to average
net assets
Portfolio turnover 122% 108% 76%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D LIMITED IN ACCORDANCE WITH A STATE EXPENSE LIMITATION.
E NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
F FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A
SHARES) TO NOVEMBER 30, 1996.
G FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
H FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
I THE AMOUNTS SHOWN REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK
TO TAX DIFFERENCES (SEE NOTE 1 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED NOVEMBER 30,
1998 1997 1996 1995 1994
SELECTED PER-SHARE DATA
Net asset value, beginning $ 51.97 $ 44.81 $ 39.83 $ 28.52 $ 29.50
of period
Income from Investment
Operations
Net investment income (loss) (.21) C (.04) C .22 C .06 .08
Net realized and unrealized 12.87 8.60 6.90 11.54 .39
gain (loss)
Total from investment 12.66 8.56 7.12 11.60 .47
operations
Less Distributions
From net investment income - (.17) (.03) (.08) -
From net realized gain (6.04) (1.23) (2.11) (.16) (1.45)
In excess of net realized - - - (.05) -
gain
Total distributions (6.04) (1.40) (2.14) (.29) (1.45)
Net asset value, end of period $ 58.59 $ 51.97 $ 44.81 $ 39.83 $ 28.52
TOTAL RETURN A, B 28.00% 19.81% 19.00% 41.11% 1.58%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 5,187 $ 4,206 $ 3,537 $ 2,051 $ 874
(in millions)
Ratio of expenses to average 1.29% 1.31% D 1.36% 1.55% 1.71%
net assets
Ratio of expenses to average 1.27% E 1.29% E 1.34% E 1.54% E 1.70% E
net assets after expense
reductions
Ratio of net investment (.41)% (.08)% .54% .21% .15%
income (loss) to average net
assets
Portfolio turnover 122% 108% 76% 97% 137%
</TABLE>
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
D FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
E FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - CLASS B
YEARS ENDED NOVEMBER 30,
1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 51.41 $ 41.81
period
Income from Investment
Operations
Net investment income (loss) (.52) (.32)
D
Net realized and unrealized 12.68 9.95
gain (loss)
Total from investment 12.16 9.63
operations
Less Distributions
From net realized gain (6.07) (.03)
Net asset value, end of period $ 57.50 $ 51.41
TOTAL RETURN B, C 27.27% 23.05%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 307 $ 71
millions)
Ratio of expenses to average 1.88% 1.93% A, F
net assets
Ratio of expenses to average 1.85% G 1.90% A, G
net assets after expense
reductions
Ratio of net investment (1.01)% (.73)% A
income (loss) to average net
assets
Portfolio turnover 122% 108%
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE
AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD DECEMBER 31, 1996 (COMMENCEMENT OF SALE OF CLASS B
SHARES) TO NOVEMBER 30, 1997.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - CLASS C
YEARS ENDED NOVEMBER 30,
1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 51.95 $ 51.84
period
Income from Investment
Operations
Net investment income (loss) (.54) (.02)
D
Net realized and unrealized 12.87 .13
gain (loss)
Total from investment 12.33 .11
operations
Less Distributions
From net realized gain (6.04) -
Net asset value, end of period $ 58.24 $ 51.95
TOTAL RETURN B, C 27.30% 0.21%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 64 $ 1
millions)
Ratio of expenses to average 1.89% 1.95% A, F
net assets
Ratio of expenses to average 1.86% G 1.89% A, G
net assets after expense
reductions
Ratio of net investment (1.03)% (.82)% A
income (loss) to average net
assets
Portfolio turnover 122% 108%
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE
AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD NOVEMBER 3, 1997 (COMMENCEMENT OF SALE OF CLASS C
SHARES) TO NOVEMBER 30, 1997.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED NOVEMBER 30,
1998 1997 1996 1995 1994
SELECTED PER-SHARE DATA
Net asset value, beginning $ 52.86 $ 45.52 $ 40.39 $ 28.90 $ 29.74
of period
Income from Investment
Operations
Net investment income .06 B .22 B .45 B .28 .30
Net realized and unrealized 13.08 8.72 7.00 11.69 .42
gain (loss)
Total from investment 13.14 8.94 7.45 11.97 .72
operations
Less Distributions
From net investment income (.05) D (.37) (.21) (.27) (.11)
From net realized gain (6.24) D (1.23) (2.11) (.16) (1.45)
In excess of net realized - - - (.05) -
gain
Total distributions (6.29) (1.60) (2.32) (.48) (1.56)
Net asset value, end of period $ 59.71 $ 52.86 $ 45.52 $ 40.39 $ 28.90
TOTAL RETURN A 28.67% 20.46% 19.68% 42.15% 2.46%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 1,088 $ 1,032 $ 1,324 $ 791 $ 410
(in millions)
Ratio of expenses to average .76% .77% .79% .83% .86%
net assets
Ratio of expenses to average .74% C .75% C .77% C .83% .84% C
net assets after expense
reductions
Ratio of net investment .12% .46% 1.11% .92% 1.00%
income to average net assets
Portfolio turnover 122% 108% 76% 97% 137%
</TABLE>
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
B NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
C FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
D THE AMOUNTS SHOWN REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK
TO TAX DIFFERENCES (SEE NOTE 1 OF NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1998
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Equity Growth Fund (the fund) is a fund of Fidelity
Advisor Series I (the trust) and is authorized to issue an unlimited
number of shares. The trust is registered under the Investment Company
Act of 1940, as amended (the 1940 Act), as an open-end management
investment company organized as a Massachusetts business trust.
The fund offers Class A, Class T, Class B, Class C and Institutional
Class shares, each of which has equal rights as to assets and voting
privileges. Class B shares will automatically convert to Class A
shares after a holding period of seven years from the initial date of
purchase. Each class has exclusive voting rights with respect to
matters that affect that class. Investment income, realized and
unrealized capital gains and losses, the common expenses of the fund,
and certain fund-level expense reductions, if any, are allocated on a
pro rata basis to each class based on the relative net assets of each
class to the total net assets of the fund. Each class of shares
differs in its respective distribution, transfer agent, and certain
other class-specific fees, expenses, and expense reductions.
The financial statements have been prepared in conformity with
generally accepted accounting principles which require management to
make certain estimates and assumptions at the date of the financial
statements. The following summarizes the significant accounting
policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Securities (including restricted
securities) for which exchange quotations are not readily available
(and in certain cases debt securities which trade on an exchange) are
valued primarily using dealer-supplied valuations or at their fair
value as determined in good faith under consistently applied
procedures under the general supervision of the Board of Trustees.
Short-term securities with remaining maturities of sixty days or less
for which quotations are not readily available are valued at amortized
cost or original cost plus accrued interest, both of which approximate
current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases
and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
and settlement date on purchases and sales of securities. The effects
of changes in foreign currency exchange rates on investments in
securities are included with the net realized and unrealized gain or
loss on investment securities.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent that it distributes substantially all of
its taxable income for its fiscal year. The schedule of investments
includes information regarding income taxes under the caption "Income
Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend
date, except certain dividends from foreign securities where the
ex-dividend date may have passed, are recorded as soon as the fund is
informed of the ex-dividend date. Non-cash dividends included in
dividend income, if any, are recorded at the fair market value of the
securities received. Interest income is accrued as earned. Investment
income is recorded net of foreign taxes withheld where recovery of
such taxes is uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
DEFERRED TRUSTEE COMPENSATION. Under a Deferred Compensation Plan (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
compensation. Deferred amounts are treated as though equivalent dollar
amounts had been invested in shares of the fund or are invested in a
cross-section of other Fidelity funds. Deferred amounts remain in the
fund until distributed in accordance with the Plan.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date. Income dividends and capital gain distributions are
declared separately for each class.
Income and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. These differences, which may result in
distribution reclassifications, are primarily due to differing
treatments for litigation proceeds, foreign currency transactions,
passive foreign investment companies (PFIC), net operating losses and
losses deferred due to wash sales. The fund also utilized earnings and
profits distributed to shareholders on redemption of shares as a part
of the dividends paid deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Undistributed net investment income and accumulated undistributed net
realized gain (loss) on investments and foreign currency transactions
may include temporary book and tax basis differences which will
reverse in a subsequent period. Any taxable income or gain remaining
at fiscal year end is distributed in the following year.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the contracts'
terms. The U.S. dollar value of foreign currency contracts is
determined using contractual currency exchange rates established at
the time of each trade.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with
other affiliated entities of FMR, may transfer uninvested cash
balances into one or more joint trading accounts. These balances are
invested in one or more repurchase agreements for U.S. Treasury or
Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are
marked-to-market daily and maintained at a value at least equal to the
principal amount of the repurchase agreement (including accrued
interest). FMR, the fund's investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
RESTRICTED SECURITIES. The fund is permitted to invest in securities
that are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from
registration or to the public if the securities are registered.
Disposal of these securities may involve time-consuming negotiations
and expense, and prompt sale at an acceptable price may be difficult.
At the end of the period, the fund had no investments in restricted
securities.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $6,877,642,000 and $7,315,305,000, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment advisor FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus a
fixed individual fund fee rate applied to the average net assets of
the fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
advised by FMR. The rates ranged from .2500% to .5200% for the period.
The annual individual fund fee rate is .30%. In the event that these
rates were lower than the contractual rates in effect during the
period, FMR voluntarily implemented the above rates, as they resulted
in the same or a lower management fee. For the period, the management
fee was equivalent to an annual rate of .59% of average net assets.
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the
1940 Act, the Trustees have adopted separate distribution plans with
respect to each class of shares (collectively referred to as "the
Plans"). Under certain of the Plans, the class pays Fidelity
Distributors Corporation (FDC), an affiliate of FMR, a distribution
and service fee. A portion of this fee may be reallowed to securities
dealers, banks and other financial institutions for the distribution
of each class of shares and providing shareholder support services.
For the period, this fee was based on the following annual rates of
the average net assets of each applicable class:
CLASS A .25%
CLASS T .50%
CLASS B 1.00% *
CLASS C 1.00% *
* .75% REPRESENTS A DISTRIBUTION FEE AND .25% REPRESENTS A SHAREHOLDER
SERVICE FEE.
For the period, each class paid FDC the following amounts, a portion
of which was retained by FDC:
PAID TO FDC RETAINED BY FDC
CLASS A $ 142,000 $ -
CLASS T 22,838,000 222,000
CLASS B 1,665,000 1,250,000
CLASS C 260,000 258,000
$ 24,905,000 $ 1,730,000
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
DISTRIBUTION AND SERVICE PLAN - CONTINUED
Under the Plans, FMR may use its resources to pay administrative and
promotional expenses related to the sale of each class' shares. The
Plans also authorize payments to third parties that assist in the sale
of each class' shares or render shareholder support services. For the
period, the following amounts were paid to third parties under the
Plans:
CLASS A $ 24,000
CLASS T 601,000
CLASS B 36,000
CLASS C 17,000
INSTITUTIONAL CLASS 49,000
SALES LOAD. FDC receives a front-end sales charge of up to 5.75% for
selling Class A shares, and 3.50% for selling Class T shares of the
fund. FDC receives the proceeds of contingent deferred sales charges
levied on Class B share redemptions occurring within six years of
purchase and on Class C share redemptions occurring within one year of
purchase. Contingent deferred sales charges are based on declining
rates ranging from 5% to 1% for Class B and 1% for Class C, of the
lesser of the cost of shares at the initial date of purchase or the
net asset value of the redeemed shares, excluding any reinvested
dividends and capital gains. In addition, purchases of Class A and
Class T shares that were subject to a finder's fee bear a contingent
deferred sales charge on assets that do not remain in the fund for at
least one year. The Class A and Class T contingent deferred sales
charge is based on 0.25% of the lesser of the cost of shares at the
initial date of purchase or the net asset value of the redeemed
shares, excluding any reinvested dividends and capital gains. A
portion of the sales charges paid to FDC are paid to securities
dealers, banks and other financial institutions.
For the period, sales charge amounts paid to and retained by FDC were
as follows:
PAID TO FDC RETAINED BY FDC
CLASS A $ 838,000 $ 356,000
CLASS T 2,265,000 769,000
CLASS B 488,000 488,000 *
CLASS C 25,000 25,000 *
$ 3,616,000 $ 1,638,000
* WHEN CLASS B AND CLASS C SHARES ARE INITIALLY SOLD, FDC PAYS
COMMISSIONS FROM ITS OWN RESOURCES TO SECURITIES DEALERS,
BANKS, AND OTHER FINANCIAL INSTITUTIONS THROUGH WHICH THE SALES ARE
MADE.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
TRANSFER AGENT FEES. Fidelity Investments Institutional Operations
Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend
disbursing and shareholder servicing agent for each class of the fund.
FIIOC receives account fees and asset-based fees that vary according
to the account size and type of account of the shareholders of the
respective classes of the fund. FIIOC pays for typesetting, printing
and mailing of all shareholder reports, except proxy statements. For
the period, the following amounts were paid to FIIOC :
AMOUNT % OF AVERAGE NET ASSETS
CLASS A $ 138,000 .24
CLASS T 7,863,000 .17
CLASS B 418,000 .25
CLASS C 57,000 .22
INSTITUTIONAL CLASS 1,432,000 .14
$ 9,908,000
ACCOUNTING FEES. Fidelity Service Company, Inc., an affiliate of FMR,
maintains the fund's accounting records. The fee is based on the level
of average net assets for the month plus out-of-pocket expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $1,419,000 for the
period.
5. EXPENSE REDUCTIONS.
FMR has directed certain portfolio trades to brokers who paid a
portion of the fund's expenses. For the period, the fund's expenses
were reduced by $1,314,000 under this arrangement.
In addition, the fund has entered into arrangements with its custodian
and each class' transfer agent whereby credits realized as a result of
uninvested cash balances were used to reduce a portion of expenses.
During the period, the fund's custodian fees were reduced by $5,000
under the custodian arrangement.
6. BANK BORROWINGS.
The fund is permitted to have bank borrowings for temporary or
emergency purposes to fund shareholder redemptions. The fund has
established borrowing arrangements with certain banks. Under the most
restrictive arrangement, the fund must pledge to the bank securities
having a market value in excess of 220% of the total bank borrowings.
The
6. BANK BORROWINGS - CONTINUED
interest rate on the borrowings is the bank's base rate, as revised
from time to time. The maximum loan and the average daily loan balance
during the period for which the loan was outstanding amounted to
$2,787,000. The weighted average interest rate was 5.75%.
7. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
Amounts in thousands
YEAR ENDED NOVEMBER 30,
1998 1997 A
FROM NET INVESTMENT INCOME
Class A $ 15 $ 44
Class T - 13,448
Class B - -
Class C - -
Institutional Class 1,035 10,782
Total $ 1,050 $ 24,274
FROM NET REALIZED GAIN
Class A $ 3,543 $ 155
Class T 488,378 97,420
Class B 9,146 0 B
Class C 223 -
Institutional Class 121,417 35,855
Total $ 622,707 $ 133,430
A DISTRIBUTIONS FOR CLASS B ARE FOR THE PERIOD DECEMBER 31, 1996
(COMMENCEMENT OF SALE OF SHARES) TO NOVEMBER 30, 1997.
B REPRESENTS AN AMOUNT LESS THAN ONE THOUSAND DOLLARS.
8. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:
Amounts in thousands
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SHARES DOLLARS
YEAR ENDED NOVEMBER 30, YEAR ENDED NOVEMBER 30, YEAR ENDED NOVEMBER 30, YEAR ENDED NOVEMBER 30,
1998 1997 A, B 1998 1997 A, B
CLASS A Shares sold 1,200 527 $ 61,899 $ 25,137
Reinvestment of distributions 77 5 3,416 193
Shares redeemed (254) (79) (13,114) (3,746)
Net increase (decrease) 1,023 453 $ 52,201 $ 21,584
CLASS T Shares sold 26,408 24,794 $ 1,365,162 $ 1,148,466
Reinvestment of distributions 10,178 2,444 457,907 103,689
Shares redeemed (28,971) (25,241) (1,483,407) (1,172,658)
Net increase (decrease) 7,615 1,997 $ 339,662 $ 79,497
CLASS B Shares sold 4,256 1,494 $ 218,844 $ 71,102
Reinvestment of distributions 193 - 8,586 -
Shares redeemed (507) (103) (25,743) (4,871)
Net increase (decrease) 3,942 1,391 $ 201,687 $ 66,231
CLASS C Shares sold 1,458 19 $ 75,711 $ 959
Reinvestment of distributions 4 - 187 -
Shares redeemed (377) - (19,681) -
Net increase (decrease) 1,085 19 $ 56,217 $ 959
INSTITUTIONAL CLASS Shares 6,340 8,066 $ 327,822 $ 377,761
sold
Reinvestment of distributions 1,960 748 89,402 32,100
Shares redeemed (9,614) (18,359) (490,611) (860,250)
Net increase (decrease) (1,314) (9,545) $ (73,387) $ (450,389)
</TABLE>
A SHARE TRANSACTIONS FOR CLASS B ARE FOR THE PERIOD DECEMBER 31, 1996
(COMMENCEMENT OF SALE OF SHARES) TO NOVEMBER 30, 1997.
B SHARE TRANSACTIONS FOR CLASS C ARE FOR THE PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO NOVEMBER 30, 1997.
9. REGISTRATION FEES.
For the period, each class paid the following amounts to register its
shares for sale:
REGISTRATION FEES
CLASS A $ 10,000
CLASS T 214,000
CLASS B 22,000
CLASS C 14,000
INSTITUTIONAL CLASS 50,000
$ 310,000
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Advisor Series I and the Shareholders of
Fidelity Advisor Equity Growth Fund:
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of
Fidelity Advisor Equity Growth Fund (a fund of the Fidelity Advisor
Series I trust) at November 30, 1998, and the results of its
operations, the changes in its net assets and the financial highlights
for the periods indicated, in conformity with generally accepted
accounting principles. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Fidelity Advisor Equity Growth Fund's
management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of
these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which
included
confirmation of securities at November 30, 1998 by correspondence with
the custodian and brokers, provide a reasonable basis for the opinion
expressed above.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
January 13, 1999
DISTRIBUTIONS
The Board of Trustees of Fidelity Advisor Equity Growth Fund voted to
pay to shareholders of record at the opening of business on record
date, the following distributions derived from capital gains realized
from sales of portfolio securities, and dividends derived from net
investment income:
INSTITUTIONAL CLASS
PAY DATE 12/22/97 1/5/98 12/21/98 1/11/99
RECORD DATE 12/19/97 1/2/98 12/18/98 1/08/99
DIVIDENDS $0.22 - $0.06 -
SHORT-TERM
CAPITAL GAINS $1.85 $0.24 $1.67 $.38
LONG-TERM
CAPITAL GAINS $3.80 $0.18 $4.73 $.29
LONG-TERM
CAPITAL GAIN PERCENTAGE:
28% rate 55.42% - - -
20% rate 44.58% 100% 100% 100%
A total of 20.44% of the dividends distributed by the Institutional
Class during the fiscal year qualifies for the dividends-received
deduction for corporate shareholders.
The fund will notify shareholders in January 1999 of the applicable
percentage for use in preparing 1998 income tax returns.
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.) Inc., London, England
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Abigail P. Johnson, Vice President
Jennifer Uhrig, Vice President
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
* INDEPENDENT TRUSTEES
ADVISORY BOARD
J. Gary Burkhead
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Investments Institutional Operations Company, Inc.
Boston, MA
CUSTODIAN
The Chase Manhattan Bank
New York, NY
FOCUS FUNDS
Fidelity Advisor Consumer
Industries Fund
Fidelity Advisor Cyclical
Industries Fund
Fidelity Advisor Financial
Services Fund
Fidelity Advisor Health Care Fund
Fidelity Advisor Natural
Resources Fund
Fidelity Advisor Technology Fund
Fidelity Advisor Utilities Growth Fund
GROWTH FUNDS
Fidelity Advisor Latin America Fund
Fidelity Advisor Japan Fund
Fidelity Advisor Europe Capital Appreciation Fund
Fidelity Advisor International Capital Appreciation Fund
Fidelity Advisor Overseas Fund
Fidelity Advisor Diversified International Fund
Fidelity Advisor Global Equity Fund
Fidelity Advisor Latin America Fund
Fidelity Advisor TechnoQuant
Growth Fund
SM
Fidelity Advisor Small Cap Fund
Fidelity Advisor Strategic
Opportunities Fund
Fidelity Advisor Mid Cap Fund
Fidelity Advisor Retirement
Growth Fund
Fidelity Advisor Equity Growth Fund
Fidelity Advisor Large Cap Fund
Fidelity Advisor Dividend Growth Fund
Fidelity Advisor Growth
Opportunities Fund
GROWTH AND INCOME FUNDS
Fidelity Advisor Growth & Income Fund
Fidelity Advisor Equity Income Fund
Fidelity Advisor Asset Allocation Fund
Fidelity Advisor Balanced Fund
TAXABLE INCOME FUNDS
Fidelity Advisor Emerging Markets Income Fund
Fidelity Advisor High Yield Fund
Fidelity Advisor Strategic Income Fund
Fidelity Advisor Mortgage
Securities Fund
Fidelity Advisor Government Investment Fund
Fidelity Advisor Intermediate Bond Fund
Fidelity Advisor Short Fixed-Income Fund
MUNICIPAL FUNDS
Fidelity Advisor Municipal Income Fund
Fidelity Advisor Intermediate Municipal Income Fund
MONEY MARKET FUNDS
Prime Fund
Treasury Fund
Tax-Exempt Fund
(registered trademark)
(2_FIDELITY_LOGOS)FIDELITY ADVISOR
(registered trademark)
GROWTH OPPORTUNITIES
FUND - CLASS A, CLASS T, CLASS B AND CLASS C
ANNUAL REPORT
NOVEMBER 30, 1998
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over
time.
FUND TALK 12 The manager's review of fund
performance, strategy and
outlook.
INVESTMENT CHANGES 16 A summary of major shifts in
the fund's investments over
the past six months.
INVESTMENTS 17 A complete list of the fund's
investments with their
market values.
FINANCIAL STATEMENTS 28 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 37 Footnotes to the financial
statements.
REPORT OF INDEPENDENT 46 The auditors' opinion.
ACCOUNTANTS
DISTRIBUTIONS 47
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION
OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS
IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT
INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY ADVISOR FUND, INCLUDING CHARGES
AND EXPENSES, CONTACT YOUR
INVESTMENT PROFESSIONAL FOR A FREE PROSPECTUS. READ IT CAREFULLY
BEFORE YOU INVEST OR SEND MONEY.
Standard & Poor's, S&P and S&P 500 are registered service marks of The
McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity
Distributors Corporation.
Other third party marks appearing herein are the property of their
respective owners.
All other marks appearing herein are registered or unregistered
trademarks or service marks of FMR Corp. or an affiliated company.
This report is printed on recycled paper using soy-based inks.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
The month of November proved to be a strong one for the stock and bond
markets. The Dow Jones Industrial Average reached a record high.
Merger activity, which had lulled during the summer correction, has
increased significantly. Small-cap stocks posted their third
consecutive month of positive returns, as did emerging markets. While
bond returns generally were not at the levels of their equity
counterparts, they were mostly positive nonetheless.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will
greatly reduce your vulnerability to any single decline. We know from
experience, for example, that stock prices have gone up over longer
periods of time, have significantly outperformed other types of
investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through
diversification. A stock mutual fund, for instance, is already
diversified, because it invests in many different companies. You can
increase your diversification further by investing in a number of
different stock funds, or in such other investment categories as
bonds. If you have a short investment time horizon, you might want to
consider moving some of your investment into a money market fund,
which seeks income and a stable share price by investing in
high-quality, short-term investments. Of course, it's important to
remember that there is no assurance that a money market fund will
achieve its goal of maintaining a stable net asset value of $1.00 per
share, and that these types of funds are neither insured nor
guaranteed by any agency of the U.S. government.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases. Of course, you should
consider your financial ability to continue your purchases through
periods of low price levels before undertaking such a strategy.
Remember to contact your investment professional if you need help with
your investments.
Best regards,
Edward C. Johnson 3d
FIDELITY ADVISOR GROWTH OPPORTUNITIES FUND - CLASS A
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can
look at the total percentage change in value, the average annual
percentage change or the growth of a hypothetical $10,000 investment.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). The initial offering of Class A shares took place on September
3, 1996. Class A shares bear a 0.25% 12b-1 fee. Returns prior to
September 3, 1996 are those of Class T, the original class of the
fund, and reflect Class T shares' 0.50% 12b-1 fee (0.65% prior to
January 1, 1996). If Fidelity had not reimbursed certain class
expenses, the past five years and 10 years total returns would have
been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
1998
FIDELITY ADV GROWTH 20.82% 151.45% 520.19%
OPPORTUNITIES - CL A
FIDELITY ADV GROWTH 13.87% 137.00% 484.53%
OPPORTUNITIES - CL A (INCL.
5.75% SALES CHARGE)
S&P 500 (registered trademark) 23.66% 181.25% 457.74%
Growth Funds Average 14.32% 127.55% 363.55%
CUMULATIVE TOTAL RETURNS show Class A's performance in percentage
terms over a set period - in this case, one year, five years or 10
years. For example, if you had invested $1,000 in a fund that had a 5%
return over the past year, the value of your investment would be
$1,050. You can compare Class A's returns to the performance of the
Standard & Poor's 500 Index - a market capitalization-weighted index
of common stocks. To measure how Class A's performance stacked up
against its peers, you can compare it to the growth funds average,
which reflects the performance of mutual funds with similar objectives
tracked by Lipper Analytical Services, Inc. The past one year average
represents a peer group of 961 mutual funds. These benchmarks include
reinvested dividends and capital gains, if any, and exclude the effect
of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
1998
FIDELITY ADV GROWTH 20.82% 20.25% 20.02%
OPPORTUNITIES - CL A
FIDELITY ADV GROWTH 13.87% 18.84% 19.31%
OPPORTUNITIES - CL A (INCL.
5.75% SALES CHARGE)
S&P 500 23.66% 22.98% 18.75%
Growth Funds Average 14.32% 17.48% 16.16%
AVERAGE ANNUAL TOTAL RETURNS take Class A's cumulative return and show
you what would have happened if Class A shares had performed at a
constant rate each year.
$10,000 OVER 10 YEARS
FA Growth Opp -CL A S&P 500
00248 SP001
1988/11/30 9425.00 10000.00
1988/12/31 9787.15 10175.00
1989/01/31 10625.64 10919.81
1989/02/28 10423.24 10647.91
1989/03/31 10524.44 10896.00
1989/04/30 11203.90 11461.51
1989/05/31 11955.65 11925.70
1989/06/30 11442.44 11857.72
1989/07/31 12085.76 12928.47
1989/08/31 12533.92 13181.87
1989/09/30 12411.03 13127.82
1989/10/31 11948.42 12823.26
1989/11/30 12027.93 13084.85
1989/12/31 12149.99 13398.89
1990/01/31 11274.88 12499.82
1990/02/28 11548.35 12661.07
1990/03/31 11845.26 12996.59
1990/04/30 11454.59 12671.68
1990/05/31 12821.95 13907.16
1990/06/30 12892.27 13812.60
1990/07/31 12423.46 13768.40
1990/08/31 11056.10 12523.73
1990/09/30 10196.61 11913.83
1990/10/31 10149.73 11862.60
1990/11/30 11228.00 12628.92
1990/12/31 11949.89 12981.27
1991/01/31 13380.40 13547.25
1991/02/28 14581.72 14515.88
1991/03/31 14984.79 14867.16
1991/04/30 15293.02 14902.84
1991/05/31 16130.78 15546.65
1991/06/30 14992.69 14834.61
1991/07/31 16043.84 15525.90
1991/08/31 16668.20 15893.87
1991/09/30 16288.84 15628.44
1991/10/31 16265.13 15837.86
1991/11/30 15300.92 15199.60
1991/12/31 17050.21 16938.43
1992/01/31 17541.79 16623.37
1992/02/29 18335.23 16839.48
1992/03/31 17722.90 16511.11
1992/04/30 18205.86 16996.54
1992/05/31 18464.59 17079.82
1992/06/30 18042.00 16825.33
1992/07/31 18662.95 17513.49
1992/08/31 18145.49 17154.46
1992/09/30 18197.24 17356.88
1992/10/31 18231.74 17417.63
1992/11/30 19111.41 18011.57
1992/12/31 19612.18 18233.11
1993/01/31 20210.12 18386.27
1993/02/28 20265.31 18636.33
1993/03/31 21019.63 19029.55
1993/04/30 21056.42 18569.04
1993/05/31 21645.16 19066.69
1993/06/30 21727.95 19121.98
1993/07/31 21875.13 19045.49
1993/08/31 22546.65 19767.32
1993/09/30 22629.44 19615.11
1993/10/31 23356.16 20021.14
1993/11/30 23245.77 19830.94
1993/12/31 23960.86 20070.89
1994/01/31 25286.72 20753.30
1994/02/28 24905.17 20190.89
1994/03/31 23846.39 19310.57
1994/04/30 24475.94 19557.74
1994/05/31 24609.48 19878.49
1994/06/30 23941.78 19391.47
1994/07/31 24619.02 20027.51
1994/08/31 25658.72 20848.63
1994/09/30 24886.10 20337.84
1994/10/31 25391.64 20795.44
1994/11/30 24580.86 20038.07
1994/12/31 24645.40 20335.24
1995/01/31 24837.31 20862.53
1995/02/28 25594.85 21675.54
1995/03/31 26251.39 22315.19
1995/04/30 27140.24 22972.37
1995/05/31 28271.51 23890.58
1995/06/30 29231.06 24445.56
1995/07/31 30200.72 25256.17
1995/08/31 30412.83 25319.56
1995/09/30 30988.56 26388.05
1995/10/31 31200.67 26293.84
1995/11/30 31958.22 27448.14
1995/12/31 32787.63 27976.80
1996/01/31 33305.77 28929.13
1996/02/29 33212.51 29197.30
1996/03/31 33160.69 29478.47
1996/04/30 33709.92 29912.98
1996/05/31 34393.86 30684.44
1996/06/30 34580.38 30801.34
1996/07/31 33606.29 29440.54
1996/08/31 33875.72 30061.44
1996/09/30 35471.58 31753.30
1996/10/31 36673.65 32629.06
1996/11/30 39554.49 35095.49
1996/12/31 38588.56 34400.24
1997/01/31 40500.95 36549.57
1997/02/28 40841.66 36836.12
1997/03/31 38819.36 35322.52
1997/04/30 40577.88 37431.28
1997/05/31 43083.78 39710.10
1997/06/30 44435.64 41489.11
1997/07/31 47721.88 44790.40
1997/08/31 45974.35 42281.24
1997/09/30 47798.81 44596.98
1997/10/31 46787.66 43107.44
1997/11/30 48381.32 45102.89
1997/12/31 49673.48 45877.30
1998/01/31 49778.89 46384.71
1998/02/28 53061.15 49729.97
1998/03/31 54708.20 52276.64
1998/04/30 54708.20 52802.54
1998/05/31 54198.68 51894.87
1998/06/30 55407.31 54002.84
1998/07/31 55454.71 53427.71
1998/08/31 48333.28 45703.13
1998/09/30 51188.96 48630.87
1998/10/31 54874.09 52586.51
1998/11/30 58452.58 55773.78
IMATRL PRASUN SHR__CHT 19981130 19981224 122008 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Growth Opportunities Fund - Class A on
November 30, 1988, and the current 5.75% sales charge was paid. As the
chart shows, by November 30, 1998, the value of the investment would
have grown to $58,453 - a 484.53% increase on the initial investment.
For comparison, look at how the Standard & Poor's 500 Index did over
the same period. With dividends and capital gains, if any, reinvested,
the same $10,000 would have grown to $55,774 - a 457.74% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
long-term growth and
short-term volatility. In turn, the
share price and return of a fund
that invests in stocks will vary.
That means if you sell your
shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
FIDELITY ADVISOR GROWTH OPPORTUNITIES FUND - CLASS T
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can
look at the total percentage change in value, the average annual
percentage change or the growth of a hypothetical $10,000 investment.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
1998
FIDELITY ADV GROWTH 20.63% 150.83% 518.64%
OPPORTUNITIES - CL T
FIDELITY ADV GROWTH 16.41% 142.05% 496.99%
OPPORTUNITIES - CL T (INCL.
3.50% SALES CHARGE)
S&P 500 23.66% 181.25% 457.74%
Growth Funds Average 14.32% 127.55% 363.55%
CUMULATIVE TOTAL RETURNS show Class T's performance in percentage
terms over a set period - in this case, one year, five years or 10
years. For example, if you had invested $1,000 in a fund that had a 5%
return over the past year, the value of your investment would be
$1,050. You can compare Class T's returns to the performance of the
Standard & Poor's 500 Index - a market capitalization-weighted index
of common stocks. To measure how Class T's performance stacked up
against its peers, you can compare it to the growth funds average,
which reflects the performance of mutual funds with similar objectives
tracked by Lipper Analytical Services, Inc. The past one year average
represents a peer group of 961 mutual funds. These benchmarks include
reinvested dividends and capital gains, if any, and exclude the effect
of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
1998
FIDELITY ADV GROWTH 20.63% 20.19% 19.99%
OPPORTUNITIES - CL T
FIDELITY ADV GROWTH 16.41% 19.34% 19.56%
OPPORTUNITIES - CL T (INCL.
3.50% SALES CHARGE)
S&P 500 23.66% 22.98% 18.75%
Growth Funds Average 14.32% 17.48% 16.16%
AVERAGE ANNUAL TOTAL RETURNS take Class T's cumulative return and show
you what would have happened if Class T shares had performed at a
constant rate each year.
$10,000 OVER 10 YEARS
FA Growth Opp -CL T S&P 500
00168 SP001
1988/11/30 9650.00 10000.00
1988/12/31 10020.80 10175.00
1989/01/31 10879.30 10919.81
1989/02/28 10672.08 10647.91
1989/03/31 10775.69 10896.00
1989/04/30 11471.37 11461.51
1989/05/31 12241.06 11925.70
1989/06/30 11715.60 11857.72
1989/07/31 12374.28 12928.47
1989/08/31 12833.13 13181.87
1989/09/30 12707.32 13127.82
1989/10/31 12233.66 12823.26
1989/11/30 12315.07 13084.85
1989/12/31 12440.04 13398.89
1990/01/31 11544.04 12499.82
1990/02/28 11824.04 12661.07
1990/03/31 12128.04 12996.59
1990/04/30 11728.04 12671.68
1990/05/31 13128.04 13907.16
1990/06/30 13200.04 13812.60
1990/07/31 12720.04 13768.40
1990/08/31 11320.04 12523.73
1990/09/30 10440.04 11913.83
1990/10/31 10392.03 11862.60
1990/11/30 11496.04 12628.92
1990/12/31 12235.17 12981.27
1991/01/31 13699.83 13547.25
1991/02/28 14929.82 14515.88
1991/03/31 15342.51 14867.16
1991/04/30 15658.10 14902.84
1991/05/31 16515.86 15546.65
1991/06/30 15350.61 14834.61
1991/07/31 16426.85 15525.90
1991/08/31 17066.12 15893.87
1991/09/30 16677.70 15628.44
1991/10/31 16653.43 15837.86
1991/11/30 15666.20 15199.60
1991/12/31 17457.24 16938.43
1992/01/31 17960.56 16623.37
1992/02/29 18772.94 16839.48
1992/03/31 18146.00 16511.11
1992/04/30 18640.49 16996.54
1992/05/31 18905.39 17079.82
1992/06/30 18472.71 16825.33
1992/07/31 19108.49 17513.49
1992/08/31 18578.68 17154.46
1992/09/30 18631.66 17356.88
1992/10/31 18666.98 17417.63
1992/11/30 19567.65 18011.57
1992/12/31 20080.38 18233.11
1993/01/31 20692.59 18386.27
1993/02/28 20749.10 18636.33
1993/03/31 21521.42 19029.55
1993/04/30 21559.09 18569.04
1993/05/31 22161.88 19066.69
1993/06/30 22246.65 19121.98
1993/07/31 22397.35 19045.49
1993/08/31 23084.90 19767.32
1993/09/30 23169.67 19615.11
1993/10/31 23913.74 20021.14
1993/11/30 23800.71 19830.94
1993/12/31 24532.87 20070.89
1994/01/31 25890.38 20753.30
1994/02/28 25499.73 20190.89
1994/03/31 24415.67 19310.57
1994/04/30 25060.24 19557.74
1994/05/31 25196.97 19878.49
1994/06/30 24513.33 19391.47
1994/07/31 25206.74 20027.51
1994/08/31 26271.26 20848.63
1994/09/30 25480.19 20337.84
1994/10/31 25997.81 20795.44
1994/11/30 25167.67 20038.07
1994/12/31 25233.75 20335.24
1995/01/31 25430.24 20862.53
1995/02/28 26205.87 21675.54
1995/03/31 26878.08 22315.19
1995/04/30 27788.15 22972.37
1995/05/31 28946.42 23890.58
1995/06/30 29928.88 24445.56
1995/07/31 30921.69 25256.17
1995/08/31 31138.86 25319.56
1995/09/30 31728.34 26388.05
1995/10/31 31945.52 26293.84
1995/11/30 32721.14 27448.14
1995/12/31 33570.36 27976.80
1996/01/31 34100.87 28929.13
1996/02/29 34005.38 29197.30
1996/03/31 33952.33 29478.47
1996/04/30 34514.66 29912.98
1996/05/31 35214.93 30684.44
1996/06/30 35405.91 30801.34
1996/07/31 34408.56 29440.54
1996/08/31 34684.42 30061.44
1996/09/30 36318.38 31753.30
1996/10/31 37570.37 32629.06
1996/11/30 40519.98 35095.49
1996/12/31 39522.81 34400.24
1997/01/31 41470.96 36549.57
1997/02/28 41818.04 36836.12
1997/03/31 39746.73 35322.52
1997/04/30 41538.14 37431.28
1997/05/31 44102.08 39710.10
1997/06/30 45479.22 41489.11
1997/07/31 48849.29 44790.40
1997/08/31 47057.89 42281.24
1997/09/30 48916.47 44596.98
1997/10/31 47875.22 43107.44
1997/11/30 49487.48 45102.89
1997/12/31 50810.69 45877.30
1998/01/31 50905.61 46384.71
1998/02/28 54261.63 49729.97
1998/03/31 55945.66 52276.64
1998/04/30 55933.63 52802.54
1998/05/31 55404.36 51894.87
1998/06/30 56631.29 54002.84
1998/07/31 56667.38 53427.71
1998/08/31 49377.97 45703.13
1998/09/30 52288.92 48630.87
1998/10/31 56053.91 52586.51
1998/11/30 59698.62 55773.78
IMATRL PRASUN SHR__CHT 19981130 19981208 104729 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Growth Opportunities Fund - Class T on
November 30, 1988, and the current 3.50% sales charge was paid. As the
chart shows, by November 30, 1998, the value of the investment would
have grown to $59,699 - a 496.99% increase on the initial investment.
For comparison, look at how the Standard & Poor's 500 Index did over
the same period. With dividends and capital gains, if any, reinvested,
the same $10,000 investment would have grown to $55,774 - a 457.74%
increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market, for
example, has a history of
long-term growth and short-term
volatility. In turn, the share price
and return of a fund that invests
in stocks will vary. That means if
you sell your shares during a
market downturn, you might
lose money. But if you can ride
out the market's ups and downs,
you may have a gain.
(checkmark)
FIDELITY ADVISOR GROWTH OPPORTUNITIES FUND - CLASS B
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can
look at the total percentage change in value, the average annual
percentage change or the growth of a hypothetical $10,000 investment.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). The initial offering of Class B shares took place on March 3,
1997. Class B shares bear a 1.00% 12b-1 fee. Returns prior to March 3,
1997 are those of Class T, the original class of the fund, and reflect
Class T shares' 0.50% 12b-1 fee (0.65% prior to January 1, 1996). Had
Class B shares' 12b-1 fee been reflected, returns prior to March 3,
1997 would have been lower. Class B shares' contingent deferred sales
charges included in the past one year, past five years and 10 years
total return figures are 5%, 2% and 0%, respectively. If Fidelity had
not reimbursed certain class expenses, the past five years and 10
years total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
1998
FIDELITY ADV GROWTH 19.95% 148.39% 512.63%
OPPORTUNITIES - CL B
FIDELITY ADV GROWTH 14.95% 146.39% 512.63%
OPPORTUNITIES - CL B (INCL.
CONTINGENT DEFERRED SALES
CHARGE)
S&P 500 23.66% 181.25% 457.74%
Growth Funds Average 14.32% 127.55% 363.55%
CUMULATIVE TOTAL RETURNS show Class B's performance in percentage
terms over a set period - in this case, one year, five years or 10
years. For example, if you had invested $1,000 in a fund that had a 5%
return over the past year, the value of your investment would be
$1,050. You can compare Class B's returns to the performance of the
Standard & Poor's 500 Index - a market capitalization-weighted index
of common stocks. To measure how Class B's performance stacked up
against its peers, you can compare it to the growth funds average,
which reflects the performance of mutual funds with similar objectives
tracked by Lipper Analytical Services, Inc. The past one year average
represents a peer group of 961 mutual funds. These benchmarks include
reinvested dividends and capital gains, if any, and exclude the effect
of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
1998
FIDELITY ADV GROWTH 19.95% 19.96% 19.87%
OPPORTUNITIES - CL B
FIDELITY ADV GROWTH 14.95% 19.76% 19.87%
OPPORTUNITIES - CL B (INCL.
CONTINGENT DEFERRED SALES
CHARGE)
S&P 500 23.66% 22.98% 18.75%
Growth Funds Average 14.32% 17.48% 16.16%
AVERAGE ANNUAL TOTAL RETURNS take Class B's cumulative return and show
you what would have happened if Class B shares had performed at a
constant rate each year.
$10,000 OVER 10 YEARS
FA Growth Opp -CL B S&P 500
00278 SP001
1988/11/30 10000.00 10000.00
1988/12/31 10384.25 10175.00
1989/01/31 11273.89 10919.81
1989/02/28 11059.15 10647.91
1989/03/31 11166.52 10896.00
1989/04/30 11887.43 11461.51
1989/05/31 12685.04 11925.70
1989/06/30 12140.52 11857.72
1989/07/31 12823.09 12928.47
1989/08/31 13298.58 13181.87
1989/09/30 13168.21 13127.82
1989/10/31 12677.37 12823.26
1989/11/30 12761.73 13084.85
1989/12/31 12891.24 13398.89
1990/01/31 11962.73 12499.82
1990/02/28 12252.89 12661.07
1990/03/31 12567.92 12996.59
1990/04/30 12153.41 12671.68
1990/05/31 13604.19 13907.16
1990/06/30 13678.80 13812.60
1990/07/31 13181.39 13768.40
1990/08/31 11730.61 12523.73
1990/09/30 10818.69 11913.83
1990/10/31 10768.95 11862.60
1990/11/30 11912.99 12628.92
1990/12/31 12678.93 12981.27
1991/01/31 14196.71 13547.25
1991/02/28 15471.32 14515.88
1991/03/31 15898.98 14867.16
1991/04/30 16226.01 14902.84
1991/05/31 17114.88 15546.65
1991/06/30 15907.36 14834.61
1991/07/31 17022.64 15525.90
1991/08/31 17685.10 15893.87
1991/09/30 17282.59 15628.44
1991/10/31 17257.44 15837.86
1991/11/30 16234.40 15199.60
1991/12/31 18090.41 16938.43
1992/01/31 18611.98 16623.37
1992/02/29 19453.82 16839.48
1992/03/31 18804.14 16511.11
1992/04/30 19316.57 16996.54
1992/05/31 19591.08 17079.82
1992/06/30 19142.71 16825.33
1992/07/31 19801.54 17513.49
1992/08/31 19252.51 17154.46
1992/09/30 19307.42 17356.88
1992/10/31 19344.02 17417.63
1992/11/30 20277.36 18011.57
1992/12/31 20808.68 18233.11
1993/01/31 21443.10 18386.27
1993/02/28 21501.66 18636.33
1993/03/31 22301.99 19029.55
1993/04/30 22341.03 18569.04
1993/05/31 22965.68 19066.69
1993/06/30 23053.52 19121.98
1993/07/31 23209.69 19045.49
1993/08/31 23922.18 19767.32
1993/09/30 24010.02 19615.11
1993/10/31 24781.07 20021.14
1993/11/30 24663.95 19830.94
1993/12/31 25422.66 20070.89
1994/01/31 26829.41 20753.30
1994/02/28 26424.59 20190.89
1994/03/31 25301.21 19310.57
1994/04/30 25969.17 19557.74
1994/05/31 26110.85 19878.49
1994/06/30 25402.42 19391.47
1994/07/31 26120.97 20027.51
1994/08/31 27224.11 20848.63
1994/09/30 26404.35 20337.84
1994/10/31 26940.73 20795.44
1994/11/30 26080.49 20038.07
1994/12/31 26148.97 20335.24
1995/01/31 26352.58 20862.53
1995/02/28 27156.34 21675.54
1995/03/31 27852.94 22315.19
1995/04/30 28796.01 22972.37
1995/05/31 29996.29 23890.58
1995/06/30 31014.39 24445.56
1995/07/31 32043.20 25256.17
1995/08/31 32268.25 25319.56
1995/09/30 32879.11 26388.05
1995/10/31 33104.16 26293.84
1995/11/30 33907.92 27448.14
1995/12/31 34787.94 27976.80
1996/01/31 35337.69 28929.13
1996/02/29 35238.73 29197.30
1996/03/31 35183.76 29478.47
1996/04/30 35766.49 29912.98
1996/05/31 36492.15 30684.44
1996/06/30 36690.06 30801.34
1996/07/31 35656.54 29440.54
1996/08/31 35942.41 30061.44
1996/09/30 37635.63 31753.30
1996/10/31 38933.03 32629.06
1996/11/30 41989.62 35095.49
1996/12/31 40956.28 34400.24
1997/01/31 42975.09 36549.57
1997/02/28 43334.76 36836.12
1997/03/31 41188.32 35322.52
1997/04/30 43021.49 37431.28
1997/05/31 45655.23 39710.10
1997/06/30 47047.51 41489.11
1997/07/31 50516.61 44790.40
1997/08/31 48637.03 42281.24
1997/09/30 50528.21 44596.98
1997/10/31 49425.99 43107.44
1997/11/30 51073.52 45102.89
1997/12/31 52408.99 45877.30
1998/01/31 52482.47 46384.71
1998/02/28 55912.29 49729.97
1998/03/31 57620.96 52276.64
1998/04/30 57583.55 52802.54
1998/05/31 57022.30 51894.87
1998/06/30 58257.04 54002.84
1998/07/31 58269.51 53427.71
1998/08/31 50748.85 45703.13
1998/09/30 53704.73 48630.87
1998/10/31 57546.13 52586.51
1998/11/30 61262.81 55773.78
IMATRL PRASUN SHR__CHT 19981130 19981208 104331 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Growth Opportunities Fund - Class B on
November 30, 1988. As the chart shows, by November 30, 1998, the value
of the investment would have been $61,263 - a 512.63% increase on the
initial investment. For comparison, look at how the Standard & Poor's
500 Index did over the same period. With dividends and capital gains,
if any, reinvested, the same $10,000 investment would have grown to
$55,774 - a 457.74% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
long-term growth and
short-term volatility. In turn, the
share price and return of a fund
that invests in stocks will vary.
That means if you sell your
shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
FIDELITY ADVISOR GROWTH OPPORTUNITIES FUND - CLASS C
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can
look at the total percentage change in value, the average annual
percentage change or the growth of a hypothetical $10,000 investment.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). The initial offering of Class C shares took place on November
3, 1997. Class C shares bear a 1.00% 12b-1 fee. Returns between March
3, 1997 and November 3, 1997 are those of Class B and reflect Class B
shares' 1.00% 12b-1 fee. Returns prior to March 3, 1997 are those of
Class T, the original class of the fund, and reflect Class T shares'
0.50% 12b-1 fee (0.65% prior to January 1, 1996). Had Class C shares'
12b-1 fee been reflected, returns prior to March 3, 1997 would have
been lower. Class C shares contingent deferred sales charge included
in the past one year total return figures is 1.00%. If Fidelity had
not reimbursed certain class expenses, the past five years and 10
years total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
1998
FIDELITY ADV GROWTH 19.91% 148.41% 512.67%
OPPORTUNITIES - CL C
FIDELITY ADV GROWTH 18.91% 148.41% 512.67%
OPPORTUNITIES - CL C (INCL.
CONTINGENT DEFERRED SALES
CHARGE)
S&P 500 23.66% 181.25% 457.74%
Growth Funds Average 14.32% 127.55% 363.55%
CUMULATIVE TOTAL RETURNS show Class C's performance in percentage
terms over a set period - in this case, one year, five years or 10
years. For example, if you had invested $1,000 in a fund that had a 5%
return over the past year, the value of your investment would be
$1,050. You can compare Class C's returns to the performance of the
Standard & Poor's 500 Index - a market capitalization-weighted index
of common stocks. To measure how Class C's performance stacked up
against its peers, you can compare it to the growth funds average,
which reflects the performance of mutual funds with similar objectives
tracked by Lipper Analytical Services, Inc. The past one year average
represents a peer group of 961 mutual funds. These benchmarks include
reinvested dividends and capital gains, if any, and exclude the effect
of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
1998
FIDELITY ADV GROWTH 19.91% 19.96% 19.87%
OPPORTUNITIES - CL C
FIDELITY ADV GROWTH 18.91% 19.96% 19.87%
OPPORTUNITIES - CL C (INCL.
CONTINGENT DEFERRED SALES
CHARGE)
S&P 500 23.66% 22.98% 18.75%
Growth Funds Average 14.32% 17.48% 16.16%
AVERAGE ANNUAL TOTAL RETURNS take Class C's cumulative return and show
you what would have happened if Class C shares had performed at a
constant rate each year.
$10,000 OVER 10 YEARS
FA Growth Opp -CL C S&P 500
00482 SP001
1988/11/30 10000.00 10000.00
1988/12/31 10384.25 10175.00
1989/01/31 11273.89 10919.81
1989/02/28 11059.15 10647.91
1989/03/31 11166.52 10896.00
1989/04/30 11887.43 11461.51
1989/05/31 12685.04 11925.70
1989/06/30 12140.52 11857.72
1989/07/31 12823.09 12928.47
1989/08/31 13298.58 13181.87
1989/09/30 13168.21 13127.82
1989/10/31 12677.37 12823.26
1989/11/30 12761.73 13084.85
1989/12/31 12891.24 13398.89
1990/01/31 11962.73 12499.82
1990/02/28 12252.89 12661.07
1990/03/31 12567.92 12996.59
1990/04/30 12153.41 12671.68
1990/05/31 13604.19 13907.16
1990/06/30 13678.80 13812.60
1990/07/31 13181.39 13768.40
1990/08/31 11730.61 12523.73
1990/09/30 10818.69 11913.83
1990/10/31 10768.95 11862.60
1990/11/30 11912.99 12628.92
1990/12/31 12678.93 12981.27
1991/01/31 14196.71 13547.25
1991/02/28 15471.32 14515.88
1991/03/31 15898.98 14867.16
1991/04/30 16226.01 14902.84
1991/05/31 17114.88 15546.65
1991/06/30 15907.36 14834.61
1991/07/31 17022.64 15525.90
1991/08/31 17685.10 15893.87
1991/09/30 17282.59 15628.44
1991/10/31 17257.44 15837.86
1991/11/30 16234.40 15199.60
1991/12/31 18090.41 16938.43
1992/01/31 18611.98 16623.37
1992/02/29 19453.82 16839.48
1992/03/31 18804.14 16511.11
1992/04/30 19316.57 16996.54
1992/05/31 19591.08 17079.82
1992/06/30 19142.71 16825.33
1992/07/31 19801.54 17513.49
1992/08/31 19252.51 17154.46
1992/09/30 19307.42 17356.88
1992/10/31 19344.02 17417.63
1992/11/30 20277.36 18011.57
1992/12/31 20808.68 18233.11
1993/01/31 21443.10 18386.27
1993/02/28 21501.66 18636.33
1993/03/31 22301.99 19029.55
1993/04/30 22341.03 18569.04
1993/05/31 22965.68 19066.69
1993/06/30 23053.52 19121.98
1993/07/31 23209.69 19045.49
1993/08/31 23922.18 19767.32
1993/09/30 24010.02 19615.11
1993/10/31 24781.07 20021.14
1993/11/30 24663.95 19830.94
1993/12/31 25422.66 20070.89
1994/01/31 26829.41 20753.30
1994/02/28 26424.59 20190.89
1994/03/31 25301.21 19310.57
1994/04/30 25969.17 19557.74
1994/05/31 26110.85 19878.49
1994/06/30 25402.42 19391.47
1994/07/31 26120.97 20027.51
1994/08/31 27224.11 20848.63
1994/09/30 26404.35 20337.84
1994/10/31 26940.73 20795.44
1994/11/30 26080.49 20038.07
1994/12/31 26148.97 20335.24
1995/01/31 26352.58 20862.53
1995/02/28 27156.34 21675.54
1995/03/31 27852.94 22315.19
1995/04/30 28796.01 22972.37
1995/05/31 29996.29 23890.58
1995/06/30 31014.39 24445.56
1995/07/31 32043.20 25256.17
1995/08/31 32268.25 25319.56
1995/09/30 32879.11 26388.05
1995/10/31 33104.16 26293.84
1995/11/30 33907.92 27448.14
1995/12/31 34787.94 27976.80
1996/01/31 35337.69 28929.13
1996/02/29 35238.73 29197.30
1996/03/31 35183.76 29478.47
1996/04/30 35766.49 29912.98
1996/05/31 36492.15 30684.44
1996/06/30 36690.06 30801.34
1996/07/31 35656.54 29440.54
1996/08/31 35942.41 30061.44
1996/09/30 37635.63 31753.30
1996/10/31 38933.03 32629.06
1996/11/30 41989.62 35095.49
1996/12/31 40956.28 34400.24
1997/01/31 42975.09 36549.57
1997/02/28 43334.76 36836.12
1997/03/31 41188.32 35322.52
1997/04/30 43021.49 37431.28
1997/05/31 45655.23 39710.10
1997/06/30 47047.51 41489.11
1997/07/31 50516.61 44790.40
1997/08/31 48637.03 42281.24
1997/09/30 50528.21 44596.98
1997/10/31 49425.99 43107.44
1997/11/30 51094.26 45102.89
1997/12/31 52424.99 45877.30
1998/01/31 52498.22 46384.71
1998/02/28 55926.07 49729.97
1998/03/31 57627.57 52276.64
1998/04/30 57590.31 52802.54
1998/05/31 57019.01 51894.87
1998/06/30 58260.98 54002.84
1998/07/31 58260.98 53427.71
1998/08/31 50747.04 45703.13
1998/09/30 53715.36 48630.87
1998/10/31 57553.05 52586.51
1998/11/30 61266.56 55773.78
IMATRL PRASUN SHR__CHT 19981130 19981224 122020 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Growth Opportunities Fund - Class C on
November 30, 1988. As the chart shows, by November 30, 1998, the value
of the investment would have been $61,267 - a 512.67% increase on the
initial investment. For comparison, look at how the Standard & Poor's
500 Index did over the same period. With dividends and capital gains,
if any, reinvested, the same $10,000 investment would have grown to
$55,774 - a 457.74% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
long-term growth and
short-term volatility. In turn, the
share price and return of a fund
that invests in stocks will vary.
That means if you sell your
shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
When the final bell of the U.S. stock
market sounded on Monday,
November 23, 1998, the Dow
Jones Industrial Average stood at a
record high of 9374.27, serving
notice that the bleak economic
outlook from just a few short months
earlier would not keep positive
investor sentiment down. For the
12-month period ending November
30, 1998, the Dow - an index of
30 blue-chip stocks - returned
18.56%. What caused the
turnaround from the doldrums of
equity performance during the
summer and early fall? A variety of
factors: The economic problems in
Russia, Brazil and other emerging
markets began to dissipate; Asian
markets began to rebound; and,
perhaps most importantly, three
interest-rate cuts late in the period
by the Federal Reserve Board
helped stem the tide of a slowing
U.S. economy. All these factors
culminated in the Dow reaching its
record high late in November, a
peak that outpaced the previous
record set in July by nearly 40 points.
Small-cap stock performance was
still a far cry behind their large-cap
brethren. For the period, the Russell
2000 Index - a popular measure
of small-cap stock performance -
returned -6.62%, significantly
trailing the large-cap weighted
Standard & Poor's 500 Index's
return of 23.66%. Despite the late
rally in the equity market, this kind
of volatility has characterized the
entire year, and when it will level off
is impossible to predict.
An interview with George Vanderheiden, Portfolio Manager of Fidelity
Advisor Growth Opportunities Fund
Q. HOW DID THE FUND PERFORM, GEORGE?
A. For the 12-month period that ended November 30, 1998, the fund's
Class A, Class T, Class B and Class C shares returned 20.82%, 20.63%,
19.95% and 19.91%, respectively. The growth funds average returned
14.32% in that timeframe according to Lipper Analytical Services,
while the Standard & Poor's 500 Index returned 23.66%.
Q. WHAT MARKET SECTORS HELPED FUND PERFORMANCE?
A. Over the past year, the fund's holdings in the finance, utilities
and retail sectors helped performance relative to the S&P 500. Stock
selection was particularly strong in the finance sector. Declining
interest rates and an increase in home financing activity fueled a
strong price increase in fund holdings Fannie Mae and Freddie Mac,
both top contributors to performance over the period. Utilities
holding Vodafone Group, a telecommunications company based in the
United Kingdom, benefited from robust earnings growth. A rise in
consumer spending growth helped propel the retail sector to strong
gains and the fund benefited by its overweighting in the retail sector
during the year. Other notable contributors to performance included
nondurables holding Philip Morris. The company was the largest
position in the fund at the end of the period and, despite ongoing
concerns over government litigation against the tobacco industry, it
comfortably outperformed the S&P 500 during the past year. Fund
performance was also helped by underexposure to economically sensitive
market areas, such as basic industries, energy and aerospace and
defense.
Q. WHAT MARKET SECTORS HURT FUND PERFORMANCE?
A. Disappointing returns among holdings in the health, technology and
durables sectors hurt performance. Throughout much of the past year, I
believed the ongoing economic problems in Asia posed formidable
investment risks - particularly in the technology sector - although
the immediate concerns faced by U.S. investors seemed, at times, to
have diminished. Consequently, Advisor Growth Opportunities remained
underweighted in the technology sector, a stance that hurt performance
as technology outperformed the S&P 500 during the period.
Disappointing returns from technology stocks such as Compaq Computer,
which declined due to concerns with earnings growth, also detracted
from fund performance. The weak returns from health holdings were
primarily due to Columbia HCA/Healthcare's stock-price decline. Market
sentiment turned against the company due to the uncertainty
surrounding resolution of the government's investigation of Columbia's
billing practices and due to its weaker-than-expected operating
results.
Q. HOW DID THE FUND'S BOND HOLDINGS - REPRESENTING SLIGHTLY MORE THAN
9% OF THE FUND'S INVESTMENTS AT THE END OF THE PERIOD - AFFECT
PERFORMANCE?
A. The fund's bond holdings detracted from performance relative to the
S&P 500. Through September, the bond position helped fund performance
as the decline in interest rates and concerns with deceleration in
corporate earnings growth propelled bonds to strong gains. However,
aggressive easing of monetary policy by the Federal Reserve Board in
October and November - as seen by three separate interest rate cuts -
pushed the equity market to new highs and the fund's bond holdings
became a drag on performance.
Q. HOW DID THE FUND WEATHER THE MARKET VOLATILITY OVER THE PAST YEAR?
A. Over much of the past year I positioned Advisor Growth
Opportunities for an environment of economic weakness. In doing so, I
focused the fund's stock selection on companies I believed were less
sensitive to downturns in the domestic economy and to disruption in
foreign markets. Fannie Mae, Freddie Mac, Wal-Mart Stores and Home
Depot are all examples of fund holdings that, despite the emergence of
a global financial crisis and increased market volatility, met or
exceeded earnings growth expectations over the past year. Fannie Mae,
a federally chartered company that helps provide low- and
moderate-income family housing by purchasing mortgage loans from
lenders, was the top individual contributor during the year. The
company has proven capable of performing well in both economic booms
and busts, and the market has consistently rewarded it for doing so.
Q. THE FUND'S BOND INVESTMENTS CAME INTO PLAY HERE, AS WELL, DIDN'T
THEY?
A. That's right. I also maintained an allocation in bonds to hedge
against (1) a deceleration in corporate earnings growth, (2) a
downturn in the stock market, and (3) a financial crisis outside of
the U.S. This defensive strategy worked well during the market
correction that began in earnest over the summer. From July 16th, the
day before the summer's market peak, to October 8th, the bottom of the
correction, the S&P 500 declined 18.7% and the average fund in the
Lipper growth group declined 24.9%. Advisor Growth Opportunities
(Class T), however, only declined 17.4%, outperforming over 90% of its
Lipper growth funds peers during this period.
Q. WHAT FACTORS CONTRIBUTED TO THE RECENT VOLATILITY OF THE STOCK
MARKET?
A. The ongoing economic weakness in Asia and other overseas countries,
a lack of pricing power - meaning companies' inability to raise prices
- - across almost all industry groups, and rising labor costs all began
to overwhelm the "Goldilocks" economic scenario, which was a widely
held view earlier in the year. In this scenario, real GDP was forecast
to grow between 2.5%-3% per year, inflation stayed restrained, profits
grew at their long-term growth rate of 7%-8%, and the stock market
rose in line with corporate earnings. During the past few months,
however, speculation began to intensify that economic turmoil in Asia
and other emerging countries would further slow the already softening
domestic economy, leading to a reduction in corporate profits, and
push the U.S. into a recession. These fears contributed to the
market's decline in August. The Fed then eased monetary policy in
October and November in an attempt to add liquidity back to the
financial system. This strategy worked temporarily and pushed the
market to new highs. However, over the next year it is doubtful that
lower rates will continue to be enough to support already stretched
stock market values.
Q. WHAT'S YOUR OUTLOOK?
A. The fund's positioning reflects an environment of anemic pricing
power, flat-to-declining corporate earnings and decreasing inflation.
Over the past year, consumer spending was robust, retail sales were
strong, GDP growth was healthy and many companies reported strong
top-line revenue growth. Nevertheless, U.S. corporate earnings growth
has decelerated and, in many cases, turned negative. A lack of pricing
power across a broad number of industries, wage inflation and a
decrease in exports has contributed to this weakness in earnings
growth. Based upon their underlying fundamentals the values of many
stocks remain overextended, many economic forecasts are downcast, and
turmoil rolls on in Asia and in other economies around the world. I
believe we are already in an earnings recession. The question remains
if this will evolve into an economic recession as well.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
GEORGE VANDERHEIDEN ON
POSITIONING THE FUND IN AN
UNCERTAIN ENVIRONMENT:
"I believe it is imperative to stay
out of the way of sectors and
companies that are going through
downward earnings revisions. Just
as was the case during the past
year, I believe the market will
continue to reward those
companies with solid earnings
growth, and will mercilessly punish
those companies with earnings
disappointments. On a sector basis, I
believe regional banks, mortgage
companies, homebuilders and
building supply companies will
benefit from the Fed's efforts to
bolster the economy by lowering
interest rates. Another attractive
sector is the innovators and unit
growers - the technology,
telecommunications and health
care sectors. They grow by
developing new products and
expanding the number of units they
sell. The mid/smaller cap sector also
looks good. Relative to the
price/earnings (P/E) ratio of the
S&P 500, the P/E of small-cap stocks
is the lowest it has been in decades.
In periods when small-cap stocks
have been this attractively priced,
they have subsequently
outperformed large caps by a huge
margin. Whatever the market
environment, I keep the fund
diversified across industry sectors
and may invest a portion of the
funds in bonds when I feel bonds
are attractively priced."
FUND FACTS
GOAL: to provide capital
growth by investing primarily
in common stocks and
securities convertible into
common stocks
START DATE: November 18,
1987
SIZE: as of November
30, 1998, more than $27.5
billion
MANAGER: George
Vanderheiden, since 1987;
joined Fidelity in 1971
(checkmark)
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF NOVEMBER
30, 1998
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE STOCKS 6 MONTHS AGO
Philip Morris Companies, Inc. 6.0 4.3
Fannie Mae 5.4 4.9
Freddie Mac 3.2 2.6
Fleet Financial Group, Inc. 2.9 2.9
Home Depot, Inc. 2.4 2.2
Wal-Mart Stores, Inc. 2.3 2.0
Columbia/HCA Healthcare Corp. 2.3 2.9
Solectron Corp. 2.1 1.4
Vodafone Group PLC sponsored 2.1 1.8
ADR
MCI WorldCom, Inc. 2.0 1.9
TOP FIVE MARKET SECTORS AS OF
NOVEMBER 30, 1998
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE HOLDINGS 6 MONTHS AGO
FINANCE 19.4 18.6
TECHNOLOGY 12.2 9.6
RETAIL & WHOLESALE 9.1 9.1
HEALTH 9.1 9.3
UTILITIES 9.1 8.9
</TABLE>
ASSET ALLOCATION (% OF FUND'S
INVESTMENTS)
AS OF NOVEMBER 30, 1998 * AS OF MAY 31, 1998 **
Row: 1, Col: 1, Value: 85.09999999999999
Row: 1, Col: 2, Value: 9.4
Row: 1, Col: 3, Value: 5.5
Stocks 84.2%
Bonds 10.7%
Short-term
investments 5.1%
FOREIGN
INVESTMENTS 10.6%
Stocks 85.1%
Bonds 9.4%
Short-term
investments 5.5%
FOREIGN
INVESTMENTS 8.3%
Row: 1, Col: 1, Value: 84.2
Row: 1, Col: 2, Value: 10.7
Row: 1, Col: 3, Value: 5.1
*
**
INVESTMENTS NOVEMBER 30, 1998
Showing Percentage of Total Value of Investment in Securities
<TABLE>
<CAPTION>
<S> <C> <C> <C>
COMMON STOCKS - 85.1%
SHARES VALUE (NOTE 1) (000S)
BASIC INDUSTRIES - 1.6%
CHEMICALS & PLASTICS - 1.0%
Cabot Corp. 1,267,500 $ 38,183
du Pont (E.I.) de Nemours & 2,284,300 134,203
Co.
Raychem Corp. 2,112,100 71,943
Union Carbide Corp. 836,400 37,429
281,758
IRON & STEEL - 0.1%
Aeroquip-Vickers, Inc. 459,000 16,696
PACKAGING & CONTAINERS - 0.4%
Owens-Illinois, Inc. (a) 3,780,800 121,458
PAPER & FOREST PRODUCTS - 0.1%
Willamette Industries, Inc. 382,500 13,364
TOTAL BASIC INDUSTRIES 433,276
CONSTRUCTION & REAL ESTATE -
1.7%
BUILDING MATERIALS - 0.6%
Armstrong World Industries, 493,000 32,846
Inc.
Owens-Corning 2,276,500 84,942
Sherwin-Williams Co. 1,066,300 30,256
148,044
CONSTRUCTION - 0.7%
Centex Corp. 1,062,900 37,932
D.R. Horton, Inc. 2,330,680 43,992
Fleetwood Enterprises, Inc. 1,265,652 42,637
Kaufman & Broad Home Corp. (c) 3,014,700 75,933
200,494
ENGINEERING - 0.4%
Fluor Corp. 2,754,100 117,910
TOTAL CONSTRUCTION & REAL 466,448
ESTATE
DURABLES - 4.1%
AUTOS, TIRES, & ACCESSORIES -
2.6%
AutoZone, Inc. (a) 1,132,700 34,123
Cummins Engine Co., Inc. (c) 2,160,900 80,223
Discount Auto Parts, Inc. 1,273,500 31,758
(a)(c)
General Motors Corp. 5,818,339 407,284
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
DURABLES - CONTINUED
AUTOS, TIRES, & ACCESSORIES -
CONTINUED
Goodyear Tire & Rubber Co. 1,089,000 $ 61,801
Magna International, Inc. 1,374,400 91,265
Class A
Republic Industries, Inc. (a) 878,800 14,940
721,394
CONSUMER DURABLES - 0.3%
Minnesota Mining & 901,500 72,402
Manufacturing Co.
CONSUMER ELECTRONICS - 0.1%
Newell Co. 178,400 7,894
Whirlpool Corp. 409,800 22,949
30,843
TEXTILES & APPAREL - 1.1%
Burlington Industries, Inc. 5,494,400 57,348
(a)(c)
Jones Apparel Group, Inc. (a) 1,221,700 28,328
Liz Claiborne, Inc. (c) 4,375,400 148,217
NIKE, Inc. Class B 592,800 23,712
Polo Ralph Lauren Corp. Class 393,900 7,312
A (a)
Shaw Industries, Inc. 483,300 9,787
Warnaco Group, Inc. Class A 1,445,000 35,764
310,468
TOTAL DURABLES 1,135,107
ENERGY - 5.4%
ENERGY SERVICES - 0.2%
McDermott International, Inc. 1,189,200 31,885
Schlumberger Ltd. 297,100 13,277
45,162
OIL & GAS - 5.2%
Amerada Hess Corp. 3,939,500 218,642
Apache Corp. 408,800 9,402
Atlantic Richfield Co. 353,000 23,475
British Petroleum Co. PLC ADR 3,562,598 328,204
Burlington Resources, Inc. 2,208,165 78,666
Chevron Corp. 1,060,000 88,643
Cooper Cameron Corp. (a) 1,552,700 37,847
Elf Aquitaine SA sponsored ADR 287,447 17,894
Occidental Petroleum Corp. 7,342,700 148,690
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
ENERGY - CONTINUED
OIL & GAS - CONTINUED
Royal Dutch Petroleum Co. (NY 5,176,200 $ 243,281
Registry Gilder 1.25)
Tosco Corp. 5,759,800 150,475
Total SA:
Class B 197,574 24,153
sponsored ADR 507,852 31,042
Unocal Corp. 279,249 9,460
USX-Marathon Group 530,800 15,061
1,424,935
TOTAL ENERGY 1,470,097
FINANCE - 19.4%
BANKS - 0.8%
Bank of Tokyo-Mitsubishi Ltd. 1,467,000 15,966
Bank One Corp. 2,125,200 109,049
Wells Fargo & Co. 2,660,000 95,760
220,775
CREDIT & OTHER FINANCE - 3.7%
Associates First Capital 75,900 5,911
Corp.
Citigroup, Inc. 216,900 10,886
Fleet Financial Group, Inc. 19,041,220 793,781
Providian Financial Corp. 2,199,900 201,978
1,012,556
FEDERAL SPONSORED CREDIT - 8.5%
Fannie Mae 20,256,620 1,473,669
Freddie Mac 14,420,100 872,416
2,346,085
INSURANCE - 5.2%
AFLAC, Inc. 1,654,600 61,013
Allmerica Financial Corp. 1,082,700 59,752
Allstate Corp. 5,701,364 232,331
American International Group, 3,479,212 327,046
Inc.
CIGNA Corp. 3,187,700 248,043
Loews Corp. 840,300 84,030
MBIA, Inc. 221,500 14,342
MGIC Investment Corp. (c) 5,607,300 246,371
MONY Group, Inc. (a) 26,900 832
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
FINANCE - CONTINUED
INSURANCE - CONTINUED
PMI Group, Inc. 750,400 $ 41,038
Reliastar Financial Corp. 137,297 6,453
Torchmark Corp. 1,462,600 55,579
Travelers Property Casualty 1,170,900 40,323
Corp. Class A
1,417,153
SAVINGS & LOANS - 0.1%
Golden West Financial Corp. 287,340 27,208
SECURITIES INDUSTRY - 1.1%
Merrill Lynch & Co., Inc. 1,666,000 124,950
Morgan Stanley, Dean Witter & 1,514,500 105,636
Co.
Nomura Securities Co. Ltd. 3,983,000 38,722
PaineWebber Group, Inc. 302,800 12,377
United Asset Management Corp. 608,800 15,410
Waddell & Reed Financial, 358,190 8,373
Inc. Class B
Waddell & Reed Financial, 83,221 1,987
Inc. Class A
307,455
TOTAL FINANCE 5,331,232
HEALTH - 9.1%
DRUGS & PHARMACEUTICALS - 3.5%
American Home Products Corp. 5,009,100 266,735
Amgen, Inc. (a) 1,966,000 147,942
Astra AB Class A 5,569,266 103,031
Merck & Co., Inc. 931,600 144,282
Novartis AG (Reg.) 14,632 27,498
Schering-Plough Corp. 2,644,400 281,298
970,786
MEDICAL EQUIPMENT & SUPPLIES
- - 1.8%
AmeriSource Health Corp. 1,314,900 84,154
Class A (a)(c)
Baxter International, Inc. 267,000 16,971
Biomet, Inc. 722,000 27,617
Boston Scientific Corp. (a) 378,600 18,741
Johnson & Johnson 3,582,100 291,046
St. Jude Medical, Inc. (a) 2,181,300 63,394
501,923
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
HEALTH - CONTINUED
MEDICAL FACILITIES MANAGEMENT
- - 3.8%
Columbia/HCA Healthcare Corp. 25,309,663 $ 623,250
HEALTHSOUTH Corp. (a) 500,000 6,719
Humana, Inc. (a) 6,094,400 120,745
Tenet Healthcare Corp. (a) 6,080,700 179,761
United HealthCare Corp. 2,257,700 101,879
1,032,354
TOTAL HEALTH 2,505,063
HOLDING COMPANIES - 0.0%
U.S. Industries, Inc. 351,150 6,145
INDUSTRIAL MACHINERY &
EQUIPMENT - 3.5%
ELECTRICAL EQUIPMENT - 2.6%
Alcatel Alsthom Compagnie 811,300 104,962
Generale d'Electricite SA
(RFD)
Alcatel Alsthom Compagnie 90,500 2,342
Generale d'Electricite SA
sponsored ADR
Cherry Corp.:
Class A (Non Vtg.) 537,300 7,657
Class B (a) 368,300 5,386
Emerson Electric Co. 1,979,900 128,694
General Electric Co. 1,688,600 152,818
Grainger (W.W.), Inc. 1,091,200 46,103
Philips Electronics NV:
(Bearer) 1,875,000 118,711
(NY shares) 2,585,700 163,707
730,380
INDUSTRIAL MACHINERY &
EQUIPMENT - 0.9%
Caterpillar, Inc. 1,833,500 90,644
Tyco International Ltd. 1,747,000 114,974
Ultratech Stepper, Inc. (a)(c) 1,696,000 31,588
United States Filter Corp. (a) 279,000 6,173
243,379
TOTAL INDUSTRIAL MACHINERY & 973,759
EQUIPMENT
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
MEDIA & LEISURE - 3.0%
BROADCASTING - 0.8%
Comcast Corp. Class A 285,900 $ 13,866
(special)
Cox Communications, Inc. 414,400 21,834
Class A (a)
Fox Entertainment Group, Inc. 609,700 14,404
(a)
MediaOne Group, Inc. 2,068,700 83,782
TCA Cable TV, Inc. 1,000,000 28,500
Tele-Communications, Inc. 986,827 41,693
(TCI Group) Series A (a)
Time Warner, Inc. 149,900 15,852
219,931
ENTERTAINMENT - 0.8%
Cedar Fair LP (depository 1,362,000 34,050
unit)
King World Productions, Inc. 473,500 12,903
(a)
Royal Carribean Cruises Ltd. 367,400 11,160
Tele-Communications, Inc. 8,050,646 159,503
(TCI Ventures Group) Series
A (a)
217,616
LODGING & GAMING - 0.7%
Circus Circus Enterprises, 1,085,100 12,546
Inc. (a)
Mirage Resorts, Inc. (a) 2,136,300 31,777
Promus Hotel Corp. (a) 3,118,000 104,063
Sun International Hotels Ltd. 1,124,000 43,415
(a)
191,801
RESTAURANTS - 0.7%
McDonald's Corp. 1,063,500 74,511
Papa John's International, 489,200 20,516
Inc. (a)
Wendy's International, Inc. 4,326,300 86,526
181,553
TOTAL MEDIA & LEISURE 810,901
NONDURABLES - 6.2%
BEVERAGES - 0.1%
PepsiCo, Inc. 447,300 17,305
HOUSEHOLD PRODUCTS - 0.1%
Revlon, Inc. Class A (a)(c) 1,294,250 26,694
TOBACCO - 6.0%
Philip Morris Companies, Inc. 29,412,700 1,645,268
TOTAL NONDURABLES 1,689,267
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
PRECIOUS METALS - 0.0%
Newmont Mining Corp. 385,881 $ 7,669
RETAIL & WHOLESALE - 9.1%
APPAREL STORES - 0.6%
Gap, Inc. 1,001,400 73,665
TJX Companies, Inc. 3,255,100 83,412
157,077
GENERAL MERCHANDISE STORES -
2.9%
Federated Department Stores, 1,942,813 80,991
Inc. (a)
Saks Holdings, Inc. (a) 3,691,440 101,515
Wal-Mart Stores, Inc. 8,396,000 632,324
814,830
GROCERY STORES - 0.5%
Safeway, Inc. (a) 2,776,600 146,639
RETAIL & WHOLESALE,
MISCELLANEOUS - 5.1%
Circuit City Stores, Inc. - 4,237,300 153,337
Circuit City Group
Home Depot, Inc. 13,004,400 646,969
Lowe's Companies, Inc. 10,298,000 435,091
Office Depot, Inc. (a) 1,678,700 54,558
Officemax, Inc. (a) 2,598,625 27,610
Staples, Inc. (a) 2,216,200 77,428
1,394,993
TOTAL RETAIL & WHOLESALE 2,513,539
SERVICES - 0.5%
ADVERTISING - 0.1%
Interpublic Group of 381,150 26,204
Companies, Inc.
Omnicom Group, Inc. 227,300 12,146
38,350
SERVICES - 0.4%
Modis Professional Services, 180,000 2,149
Inc. (a)
Service Corp. International 2,827,200 105,667
107,816
TOTAL SERVICES 146,166
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
TECHNOLOGY - 12.2%
COMMUNICATIONS EQUIPMENT - 0.0%
Cisco Systems, Inc. (a) 57,000 $ 4,296
COMPUTER SERVICES & SOFTWARE
- - 2.7%
Automatic Data Processing, 842,300 64,857
Inc.
Black Box Corp. (a) 724,600 25,452
Ceridian Corp. (a) 942,900 61,347
CompUSA, Inc. (a) 1,374,800 20,364
E Trade Group, Inc. (a) 1,947,400 52,702
Electronics for Imaging, Inc. 1,896,400 50,847
(a)
First Data Corp. 2,092,100 55,833
IMS Health, Inc. 517,200 34,329
Microsoft Corp. (a) 1,908,100 232,788
Oracle Corp. (a) 1,828,225 62,617
Policy Management Systems 1,512,900 77,347
Corp. (a)
738,483
COMPUTERS & OFFICE EQUIPMENT
- - 2.7%
Compaq Computer Corp. 4,648,500 151,076
Hewlett-Packard Co. 1,297,200 81,399
Ingram Micro, Inc. Class A (a) 353,300 15,015
International Business 1,401,200 231,198
Machines Corp.
SCI Systems, Inc. (a)(c) 3,887,100 189,010
Tech Data Corp. (a) 2,137,000 86,014
753,712
ELECTRONIC INSTRUMENTS - 1.1%
Applied Materials, Inc. (a) 1,509,600 58,497
Cognex Corp. (a) 480,900 7,965
KLA-Tencor Corp. (a) 1,824,600 62,150
LAM Research Corp. (a)(c) 2,110,500 37,725
Novellus Systems, Inc. (a) 451,700 22,416
Teradyne, Inc. (a) 200,700 6,435
Thermo Electron Corp. (a) 3,552,400 59,947
Varian Associates, Inc. 998,700 39,511
294,646
ELECTRONICS - 5.7%
Altera Corp. (a) 447,100 21,936
AMP, Inc. 1,482,563 71,719
Etec Systems, Inc. (a) 378,800 12,453
Intel Corp. 1,417,700 152,580
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
TECHNOLOGY - CONTINUED
ELECTRONICS - CONTINUED
International Rectifier Corp. 972,000 $ 9,113
(a)
Methode Electronics, Inc. 635,500 8,659
Class A
Micrel, Inc. (a) 664,700 26,962
Microchip Technology, Inc. (a) 1,933,800 67,320
Micron Technology, Inc. (a) 5,671,400 234,300
Molex, Inc. Class A 2,221,852 71,655
Motorola, Inc. 3,106,800 192,622
Solectron Corp. (a)(c) 8,810,100 583,118
Speedfam International, Inc. 378,700 5,752
(a)
Thomas & Betts Corp. 2,190,800 94,889
Vishay Intertechnology, Inc. 467,865 6,638
1,559,716
TOTAL TECHNOLOGY 3,350,853
TRANSPORTATION - 0.2%
RAILROADS - 0.2%
CSX Corp. 1,300,600 54,219
TRUCKING & FREIGHT - 0.0%
Airborne Freight Corp. 189,400 5,055
TOTAL TRANSPORTATION 59,274
UTILITIES - 9.1%
CELLULAR - 2.7%
AirTouch Communications, Inc. 1,415,800 80,966
(a)
Tele Celular Sul 301,780 6,865
Participacoes SA ADR
Tele Centro Oeste Celular 1,005,935 4,778
Participacoes SA ADR
Tele Leste Celular 60,356 2,524
Participacoes SA ADR
Tele Nordeste Celular 150,890 3,951
Participacoes SA ADR
Tele Norte Celular 60,356 2,471
Participacoes SA ADR
Tele Sudeste Celular 603,560 16,296
Participacoes SA ADR
Teleglobe, Inc. 522,150 14,220
Telemig Celular Participacoes 150,890 4,659
SA ADR
Telesp Celular Participacoes 1,207,120 31,687
SA ADR
Vodafone Group PLC sponsored 3,857,700 569,734
ADR
738,151
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
UTILITIES - CONTINUED
ELECTRIC UTILITY - 0.5%
American Electric Power Co., 1,130,600 $ 52,432
Inc.
Consolidated Edison, Inc. 181,300 9,212
Duke Energy Corp. 352,600 22,060
Houston Industries, Inc. 502,000 15,876
Niagara Mohawk Power Corp. (a) 483,900 7,440
PG&E Corp. 622,419 19,256
126,276
TELEPHONE SERVICES - 5.9%
Ameritech Corp. 894,600 48,420
AT&T Corp. 2,351,700 146,540
Bell Atlantic Corp. 1,793,392 99,757
BellSouth Corp. 977,800 85,313
Embratel Participacoes SA ADR 3,017,800 48,285
MCI WorldCom, Inc. (a) 9,133,904 538,900
Qwest Communications 2,082,793 83,312
International, Inc. (a)
SBC Communications, Inc. 2,466,700 118,247
Sprint Corp.:
(FON Group) 3,602,500 262,082
(PCS Group) (a) 1,801,250 28,820
Tele Centro Sul Participacoes 603,560 34,441
SA ADR
Tele Norte Leste 3,017,800 51,303
Participacoes SA ADR
Telebras sponsored ADR 3,017,800 519
Telesp Participacoes SA ADR 3,017,800 80,726
1,626,665
TOTAL UTILITIES 2,491,092
TOTAL COMMON STOCKS 23,389,888
(Cost $14,803,889)
U.S. TREASURY OBLIGATIONS -
9.4%
PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
U.S. Treasury Bonds:
stripped principal:
0% 2/15/19 $ 533,000 $ 177,718
0% 8/15/19 45,000 14,587
0% 8/15/20 941,300 288,367
6.25% 8/15/23 330,750 372,610
7.625% 11/15/22 128,000 167,260
8.125% 8/15/19 1,156,000 1,555,178
TOTAL U.S. TREASURY OBLIGATIONS 2,575,720
(Cost $2,085,624)
CASH EQUIVALENTS - 5.5%
SHARES
Taxable Central Cash Fund (b) 1,526,262,202 1,526,262
(Cost $1,526,262)
TOTAL INVESTMENT IN $ 27,491,870
SECURITIES - 100%
(Cost $18,415,775)
</TABLE>
LEGEND
(a) Non-income producing
(b) At period end, the seven-day yield on the Taxable Central Cash
Fund was 4.81%. The yield refers to the income earned by investing in
the fund over the seven-day period, expressed as an annual percentage.
(c) Affiliated company (see Note 10 of Notes to Financial Statements).
INCOME TAX INFORMATION
At November 30, 1998, the aggregate cost of investment securities for
income tax purposes was $18,445,908,000. Net unrealized appreciation
aggregated $9,045,962,000, of which $9,919,499,000 related to
appreciated investment securities and $873,537,000 related to
depreciated investment securities.
The fund hereby designates approximately $996,365,000 as a capital
gain dividend for the purpose of the dividend paid deduction.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AMOUNTS IN THOUSANDS (EXCEPT
PER-SHARE AMOUNTS) NOVEMBER
30, 1998
ASSETS
Investment in securities, at $ 27,491,870
value (cost $18,415,775) -
See accompanying schedule
Receivable for investments 2,002
sold
Receivable for fund shares 28,527
sold
Dividends receivable 21,750
Interest receivable 39,659
Other receivables 396
TOTAL ASSETS 27,584,204
LIABILITIES
Payable for fund shares $ 45,529
redeemed
Accrued management fee 10,029
Distribution fees payable 11,526
Other payables and accrued 4,839
expenses
TOTAL LIABILITIES 71,923
NET ASSETS $ 27,512,281
Net Assets consist of:
Paid in capital $ 17,215,003
Undistributed net investment 204,660
income
Accumulated undistributed net 1,016,420
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 9,076,198
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS $ 27,512,281
STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
AMOUNTS IN THOUSANDS (EXCEPT
PER-SHARE AMOUNTS) NOVEMBER
30, 1998
CALCULATION OF MAXIMUM $49.33
OFFERING PRICE CLASS A: NET
ASSET VALUE and redemption
price per share ($359,107
(divided by) 7,279 shares)
Maximum offering price per $52.34
share (100/94.25 of $49.33)
CLASS T: NET ASSET VALUE and $49.63
redemption price per share
($24,802,061 (divided by)
499,706 shares)
Maximum offering price per $51.43
share (100/96.50 of $49.63)
CLASS B: NET ASSET VALUE and $49.12
offering price per share
($1,431,602 (divided by)
29,145 shares) A
CLASS C: NET ASSET VALUE and $49.33
offering price per share
($301,078 (divided by) 6,103
shares) A
INSTITUTIONAL CLASS: NET $49.78
ASSET VALUE, offering price
and redemption price per
share ($618,433 (divided by)
12,424 shares)
A REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS YEAR
ENDED NOVEMBER 30, 1998
INVESTMENT INCOME $ 261,564
Dividends (including $2,856
received from affiliated
issuers)
Interest 242,172
TOTAL INCOME 503,736
EXPENSES
Management fee Basic fee $ 144,943
Performance adjustment (31,888)
Transfer agent fees 40,833
Distribution fees 125,058
Accounting fees and expenses 906
Non-interested trustees' 98
compensation
Custodian fees and expenses 737
Registration fees 1,332
Audit 134
Legal 212
Reports to shareholders 694
Miscellaneous 65
Total expenses before 283,124
reductions
Expense reductions (1,801) 281,323
NET INVESTMENT INCOME 222,413
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 1,043,788
(including realized gain
(loss) of $3,634 on sales
of investments in affiliated
issuers)
Foreign currency transactions (646) 1,043,142
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 3,286,480
Assets and liabilities in 93 3,286,573
foreign currencies
NET GAIN (LOSS) 4,329,715
NET INCREASE (DECREASE) IN $ 4,552,128
NET ASSETS RESULTING FROM
OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED NOVEMBER 30, 1998 ONE MONTH ENDED NOVEMBER 30, YEAR ENDED OCTOBER 31, 1997
1997
INCREASE (DECREASE) IN NET
ASSETS
Operations Net investment $ 222,413 $ 16,383 $ 248,319
income
Net realized gain (loss) 1,043,142 92,122 1,262,890
Change in net unrealized 3,286,573 584,763 2,623,684
appreciation (depreciation)
NET INCREASE (DECREASE) IN 4,552,128 693,268 4,134,893
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (230,393) - (225,025)
From net investment income
From net realized gain (1,268,193) - (596,509)
TOTAL DISTRIBUTIONS (1,498,586) - (821,534)
Share transactions - net 3,085,219 153,444 2,638,031
increase (decrease)
TOTAL INCREASE (DECREASE) 6,138,761 846,712 5,951,390
IN NET ASSETS
NET ASSETS
Beginning of period 21,373,520 20,526,808 14,575,418
End of period (including $ 27,512,281 $ 21,373,520 $ 20,526,808
undistributed net investment
income of $204,660, $201,723
and $199,910, respectively)
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
YEAR ENDED NOVEMBER 30, ONE MONTH ENDED NOVEMBER 30, YEARS ENDED OCTOBER 31,
1998 1997 1997 1996 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 44.02 $ 42.57 $ 35.39 $ 32.86
period
Income from Investment
Operations
Net investment income D .48 .04 .54 .09
Net realized and unrealized 8.03 1.41 8.80 2.44
gain (loss)
Total from investment 8.51 1.45 9.34 2.53
operations
Less Distributions
From net investment income (.60) - (.72) -
From net realized gain (2.60) - (1.44) -
Total distributions (3.20) - (2.16) -
Net asset value, end of period $ 49.33 $ 44.02 $ 42.57 $ 35.39
TOTAL RETURN B, C 20.82% 3.41% 27.58% 7.70%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 359 $ 143 $ 130 $ 10
millions)
Ratio of expenses to average .97% 1.10% A, F 1.05% 1.48% A, F
net assets
Ratio of expenses to average .96% G 1.09% A, G 1.04% G 1.47% A, G
net assets after expense
reductions
Ratio of net investment 1.06% 1.22% A 1.36% 1.74% A
income to average net assets
Portfolio turnover 25% 33% A 35% 33%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A
SHARES) TO OCTOBER 31, 1996.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
YEAR ENDED NOVEMBER 30, ONE MONTH ENDED NOVEMBER 30, YEARS ENDED OCTOBER 31,
1998 1997 1997 1996
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 44.20 $ 42.76 $ 35.41 $ 30.89
period
Income from Investment
Operations
Net investment income .42 D .03 D .55 D .61 D
Net realized and 8.08 1.41 8.78 4.72
unrealized gain (loss)
Total from investment 8.50 1.44 9.33 5.33
operations
Less Distributions
From net investment income (.47) - (.54) (.41)
From net realized gain (2.60) - (1.44) (.40)
Total distributions (3.07) - (1.98) (.81)
Net asset value, end of period $ 49.63 $ 44.20 $ 42.76 $ 35.41
TOTAL RETURN B, C 20.63% 3.37% 27.43% 17.61%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 24,802 $ 20,411 $ 19,652 $ 14,315
millions)
Ratio of expenses to average 1.14% 1.28% A 1.18% 1.34%
net assets
Ratio of expenses to average 1.13% E 1.27% A, E 1.17% E 1.34%
net assets after expense
reductions
Ratio of net investment .92% 1.03% A 1.39% 1.88%
income to average net assets
Portfolio turnover 25% 33% A 35% 33%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
1995 1994
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 26.62 $ 25.39
period
Income from Investment
Operations
Net investment income .39 .22
Net realized and 5.31 1.92
unrealized gain (loss)
Total from investment 5.70 2.14
operations
Less Distributions
From net investment income (.27) (.07)
From net realized gain (1.16) (.84)
Total distributions (1.43) (.91)
Net asset value, end of period $ 30.89 $ 26.62
TOTAL RETURN B, C 22.88% 8.71%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 9,691 $ 4,599
millions)
Ratio of expenses to average 1.59% 1.63%
net assets
Ratio of expenses to average 1.58% E 1.62% E
net assets after expense
reductions
Ratio of net investment 1.56% 1.12%
income to average net assets
Portfolio turnover 39% 43%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C>
YEAR ENDED NOVEMBER 30, ONE MONTH ENDED NOVEMBER 30, YEAR ENDED OCTOBER 31,
1998 1997 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 44.02 $ 42.60 $ 37.62
period
Income from Investment
Operations
Net investment income D .14 .02 .13
Net realized and unrealized 8.04 1.40 4.85
gain (loss)
Total from investment 8.18 1.42 4.98
operations
Less Distributions
From net investment income (.48) - -
From net realized gain (2.60) - -
Total distributions (3.08) - -
Net asset value, end of period $ 49.12 $ 44.02 $ 42.60
TOTAL RETURN B, C 19.95% 3.33% 13.24%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 1,432 $ 423 $ 371
millions)
Ratio of expenses to average 1.71% 1.85% A, F 1.75% A
net assets
Ratio of expenses to average 1.70% G 1.84% A, G 1.74% A, G
net assets after expense
reductions
Ratio of net investment .31% .47% A .48% A
income to average net assets
Portfolio turnover 25% 33% A 35%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE
AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD MARCH 3, 1997 (COMMENCEMENT OF SALE OF CLASS B
SHARES) TO OCTOBER 31, 1997.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - CLASS C
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED NOVEMBER 30, ONE MONTH ENDED NOVEMBER 30,
1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 44.20 $ 43.62
period
Income from Investment
Operations
Net investment income D .12 .02
Net realized and unrealized 8.08 .56
gain (loss)
Total from investment 8.20 .58
operations
Less Distributions
From net investment income (.47) -
From net realized gain (2.60) -
Total distributions (3.07) -
Net asset value, end of period $ 49.33 $ 44.20
TOTAL RETURN B, C 19.91% 1.33%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 301 $ 6
millions)
Ratio of expenses to average 1.70% 1.85% A, F
net assets
Ratio of expenses to average 1.70% 1.84% A, G
net assets after expense
reductions
Ratio of net investment .27% .74% A
income to average net assets
Portfolio turnover 25% 33% A
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE
AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD NOVEMBER 3, 1997 (COMMENCEMENT OF SALE OF CLASS C
SHARES) TO NOVEMBER 30, 1997.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
YEAR ENDED NOVEMBER 30, ONE MONTH ENDED NOVEMBER 30, YEARS ENDED OCTOBER 31,
1998 1997 1997 1996
SELECTED PER-SHARE DATA
Net asset value, beginning $ 44.31 $ 42.85 $ 35.47 $ 30.97
of period
Income from Investment
Operations
Net investment income .65 D .05 D .75 D .77 D
Net realized and unrealized 8.10 1.41 8.78 4.74
gain (loss)
Total from investment 8.75 1.46 9.53 5.51
operations
Less Distributions
From net investment income (.68) - (.71) (.61)
From net realized gain (2.60) - (1.44) (.40)
Total distributions (3.28) - (2.15) (1.01)
Net asset value, end of period $ 49.78 $ 44.31 $ 42.85 $ 35.47
TOTAL RETURN B, C 21.29% 3.41% 28.07% 18.25%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 618 $ 392 $ 375 $ 250
(in millions)
Ratio of expenses to average .62% .71% A .66% .85%
net assets
Ratio of expenses to average .61% F .70% A, F .65% F .84% F
net assets after expense
reductions
Ratio of net investment 1.43% 1.60% A 1.91% 2.38%
income to average net assets
Portfolio turnover 25% 33% A 35% 33%
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
1995 E
SELECTED PER-SHARE DATA
Net asset value, beginning $ 29.04
of period
Income from Investment
Operations
Net investment income .12
Net realized and unrealized 1.81
gain (loss)
Total from investment 1.93
operations
Less Distributions
From net investment income -
From net realized gain -
Total distributions -
Net asset value, end of period $ 30.97
TOTAL RETURN B, C 6.65%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 72
(in millions)
Ratio of expenses to average .82% A
net assets
Ratio of expenses to average .81% A, F
net assets after expense
reductions
Ratio of net investment 2.33% A
income to average net assets
Portfolio turnover 39%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD JULY 3, 1995 (COMMENCEMENT OF SALE OF INSTITUTIONAL
CLASS SHARES) TO OCTOBER 31, 1995.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1998
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Growth Opportunities Fund (the fund) is a fund of
Fidelity Advisor Series I(the trust) and is authorized to issue an
unlimited number of shares. The trust is registered under the
Investment Company Act of 1940, as amended (the 1940 Act), as an
open-end management investment company organized as a Massachusetts
business trust.
The fund offers Class A, Class T, Class B, Class C and Institutional
Class shares, each of which has equal rights as to assets and voting
privileges. Class B shares will automatically convert to Class A
shares after a holding period of seven years from the initial date of
purchase. Each class has exclusive voting rights with respect to
matters that affect that class. Investment income, realized and
unrealized capital gains and losses, the common expenses of the fund,
and certain fund-level expense reductions, if any, are allocated on a
pro rata basis to each class based on the relative net assets of each
class to the total net assets of the fund. Each class of shares
differs in its respective distribution, transfer agent, and certain
other class-specific fees, expenses, and expense reductions.
The financial statements have been prepared in conformity with
generally accepted accounting principles which require management to
make certain estimates and assumptions at the date of the financial
statements. The following summarizes the significant accounting
policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Securities for which exchange
quotations are not readily available (and in certain cases debt
securities which trade on an exchange) are valued primarily using
dealer-supplied valuations or at their fair value as determined in
good faith under consistently applied procedures under the general
supervision of the Board of Trustees. Short-term securities with
remaining maturities of sixty days or less for which quotations are
not readily available are valued at amortized cost or original cost
plus accrued interest, both of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases
and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
and settlement date on purchases and sales of securities. The effects
of changes in foreign currency exchange rates on investments in
securities are included with the net realized and unrealized gain or
loss on investment securities.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent that it distributes substantially all of
its taxable income for its fiscal year. The schedule of investments
includes information regarding income taxes under the caption "Income
Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend
date, except certain dividends from foreign securities where the
ex-dividend date may have passed, are recorded as soon as the fund is
informed of the ex-dividend date. Non-cash dividends included in
dividend income, if any, are recorded at the fair market value of the
securities received. Interest income, which includes accretion of
original issue discount, is accrued as earned. Investment income is
recorded net of foreign taxes withheld where recovery of such taxes is
uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
DEFERRED TRUSTEE COMPENSATION. Under a Deferred Compensation Plan (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
compensation. Deferred amounts are treated as though equivalent dollar
amounts had been invested in shares of the fund or are invested in a
cross-section of other Fidelity funds. Deferred amounts remain in the
fund until distributed in accordance with the Plan.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date. Income dividends and capital gain distributions are
declared separately for each class.
Income and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. These differences, which may result in
distribution reclassifications, are primarily due to differing
treatments for litigation proceeds, foreign currency transactions,
passive foreign investment companies (PFIC), partnerships and losses
deferred due to wash sales. The fund also utilized earnings and
profits distributed to shareholders on redemption of shares as a part
of the dividends paid deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Undistributed net investment income and accumulated undistributed net
realized gain (loss) on investments and foreign currency transactions
may include temporary book and tax basis differences which will
reverse in a subsequent period. Any taxable income or gain remaining
at fiscal year end is distributed in the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the contracts'
terms. The U.S. dollar value of foreign currency contracts is
determined using contractual currency exchange rates established at
the time of each trade.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with
other affiliated entities of FMR, may transfer uninvested cash
balances into one or more joint trading accounts. These balances are
invested in one or more repurchase agreements for U.S. Treasury or
Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are
marked-to-market daily and maintained at a value at least equal to the
principal amount of the repurchase agreement (including accrued
interest). FMR, the fund's investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
TAXABLE CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by
the SEC, the fund may invest in the Taxable Central Cash Fund (the
Cash Fund) managed by Fidelity Investments Money Management, Inc., an
affiliate of FMR. The Cash Fund is an open-end money market fund
available only to investment companies and other accounts managed by
FMR and its affiliates. The Cash Fund seeks preservation of capital,
liquidity, and current income by investing in U.S. Treasury securities
and repurchase agreements for these securities. Income distributions
from the Cash Fund are declared daily and paid monthly from net
interest income. Income distributions earned by the fund are recorded
as interest income in the accompanying financial statements.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $7,644,473,000 and $5,839,458,000, respectively, of which
U.S. government and government agency obligations aggregated
$166,298,000 and $490,060,000, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment advisor FMR receives a
monthly basic fee that is calculated on the basis of a group fee rate
plus a fixed individual fund fee rate applied to the average net
assets of the fund. The group fee rate is the weighted average of a
series of rates and is based on the monthly average net assets of all
the mutual funds advised by FMR. The rates ranged from .2500% to
.5200% for the period. The annual individual fund fee rate is .30%. In
the event that these rates were lower than the contractual rates in
effect during the period, FMR voluntarily implemented the above rates,
as they resulted in the same or a lower management fee. The basic fee
is subject to a performance adjustment (up to a maximum of
(plus/minus).20% of the fund's average net assets over the performance
period) based on the fund's investment performance of the
asset-weighted average return of all classes as compared to the
appropriate index over a specified period of time. For the period, the
management fee was equivalent to an annual rate of .46% of average net
assets after the performance adjustment.
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the
1940 Act, the Trustees have adopted separate distribution plans with
respect to each class of shares (collectively referred to as "the
Plans"). Under certain of the Plans, the class pays Fidelity
Distributors Corporation (FDC), an affiliate of FMR, a distribution
and service fee. A portion of this fee may be reallowed to securities
dealers, banks and other financial institutions for the distribution
of each class of shares and providing shareholder support services.
For the period, this fee was based on the following annual rates of
the average net assets of each applicable class:
CLASS A .25%
CLASS T .50%
CLASS B 1.00% *
CLASS C 1.00% *
* .75% REPRESENTS A DISTRIBUTION FEE AND .25% REPRESENTS A SHAREHOLDER
SERVICE FEE.
For the period, each class paid FDC the following amounts, a portion
of which was retained by FDC:
PAID TO FDC RETAINED BY FDC
CLASS A $ 637,000 $ 2,000
CLASS T 113,729,000 1,187,000
CLASS B 9,236,000 6,929,000
CLASS C 1,456,000 1,450,000
$ 125,058,000 $ 9,568,000
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
DISTRIBUTION AND SERVICE PLAN - CONTINUED
Under the Plans, FMR may use its resources to pay administrative and
promotional expenses related to the sale of each class' shares. The
Plans also authorize payments to third parties that assist in the sale
of each class' shares or render shareholder support services. For the
period, the following amounts were paid to third parties under the
Plans:
CLASS A $ 103,000
CLASS T 1,832,000
CLASS B 178,000
CLASS C 124,000
INSTITUTIONAL CLASS 35,000
$ 2,272,000
SALES LOAD. FDC receives a front-end sales charge of up to 5.75% for
selling Class A shares, and 3.50% for selling Class T shares of the
fund. FDC receives the proceeds of contingent deferred sales charges
levied on Class B share redemptions occurring within six years of
purchase and on Class C share redemptions occurring within one year of
purchase. Contingent deferred sales charges are based on declining
rates ranging from 5% to 1% for Class B and 1% for Class C, of the
lesser of the cost of shares at the initial date of purchase or the
net asset value of the redeemed shares, excluding any reinvested
dividends and capital gains. In addition, purchases of Class A and
Class T shares that were subject to a finder's fee bear a contingent
deferred sales charge on assets that do not remain in the fund for at
least one year. The Class A and Class T contingent deferred sales
charge is based on 0.25% of the lesser of the cost of shares at the
initial date of purchase or the net asset value of the redeemed
shares, excluding any reinvested dividends and capital gains. A
portion of the sales charges paid to FDC are paid to securities
dealers, banks and other financial institutions.
For the period, sales charge amounts paid to and retained by FDC were
as follows:
PAID TO FDC RETAINED BY FDC
CLASS A $ 3,082,000 $ 1,252,000
CLASS T 11,634,000 4,534,000
CLASS B 1,990,000 1,990,000 *
CLASS C 98,000 98,000 *
$ 16,804,000 $ 7,874,000
* WHEN CLASS B AND CLASS C SHARES ARE INITIALLY SOLD, FDC PAYS
COMMISSIONS FROM ITS OWN RESOURCES TO SECURITIES DEALERS,
BANKS, AND OTHER FINANCIAL INSTITUTIONS THROUGH WHICH THE SALES ARE
MADE.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
TRANSFER AGENT FEES. Fidelity Investments Institutional Operations
Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend
disbursing and shareholder servicing agent for each class of the fund.
FIIOC receives account fees and asset-based fees that vary according
to the account size and type of account of the shareholders of the
respective classes of the fund. FIIOC pays for typesetting, printing
and mailing of all shareholder reports, except proxy statements. For
the period, the following amounts were paid to FIIOC :
AMOUNT % OF AVERAGE NET ASSETS
CLASS A $ 606,000 .24
CLASS T 37,011,000 .16
CLASS B 2,192,000 .24
CLASS C 320,000 .22
INSTITUTIONAL CLASS 704,000 .14
$ 40,833,000
ACCOUNTING FEES. Fidelity Service Company, Inc., an affiliate of FMR,
maintains the fund's accounting records. The fee is based on the level
of average net assets for the month plus out-of-pocket expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $1,573,000 for the
period.
5. EXPENSE REDUCTIONS.
FMR has directed certain portfolio trades to brokers who paid a
portion of the fund's expenses. For the period, the fund's expenses
were reduced by $1,683,000 under this arrangement.
In addition, the fund has entered into arrangements with its custodian
and each class' transfer agent whereby credits realized as a result of
uninvested cash balances were used to reduce a portion of expenses.
During the period, the fund's custodian fees were reduced by $6,000
under the custodian arrangement, and each applicable class' expenses
were reduced as follows under the transfer agent arrangements:
TRANSFER AGENT CREDITS
CLASS T $ 112,000
6. BENEFICIAL INTEREST.
At the end of the period, one shareholder was record owner of
approximately 14% of the total outstanding shares of the fund.
7. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
YEAR ENDED NOVEMBER 30, MONTH ENDED NOVEMBER 30, YEAR ENDED OCTOBER 31,
1998 1997 1997
FROM NET INVESTMENT INCOME
Class A $ 1,998,000 $ - $ 340,000
Class T 217,401,000 - 219,398,000
Class B 4,810,000 - -
Class C 114,000 - -
Institutional Class 6,070,000 - 5,287,000
Total $ 230,393,000 $ - $ 225,025,000
FROM NET REALIZED GAIN
Class A $ 8,735,000 $ - $ 680,000
Class T 1,209,164,000 - 585,105,000
Class B 26,330,000 - -
Class C 675,000 - -
Institutional Class 23,289,000 - 10,724,000
Total $ 1,268,193,000 $ - $ 596,509,000
$ 1,498,586,000 $ - $ 821,534,000
</TABLE>
8. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
AMOUNTS IN THOUSANDS SHARES
YEAR ENDED NOVEMBER 30, ONE MONTH ENDED NOVEMBER 30, YEAR ENDED OCTOBER 31,
1998 1997 B 1997 A
CLASS A Shares sold 5,006 225 2,974
Reinvestment of distributions 245 - 27
Shares redeemed (1,215) (27) (244)
Net increase (decrease) 4,036 198 2,757
CLASS T Shares sold 100,805 6,519 116,907
Reinvestment of distributions 32,321 - 21,028
Shares redeemed (95,176) (4,329) (82,660)
Net increase (decrease) 37,950 2,190 55,275
CLASS B Shares sold 21,067 938 8,871
Reinvestment of distributions 667 - -
Shares redeemed (2,187) (40) (171)
Net increase (decrease) 19,547 898 8,700
CLASS C Shares sold 6,462 132
Reinvestment of distributions 15 -
Shares redeemed (506) -
Net increase (decrease) 5,971 132
INSTITUTIONAL CLASS Shares 6,993 219 6,006
sold
Reinvestment of distributions 595 - 346
Shares redeemed (4,004) (130) (4,658)
Net increase (decrease) 3,584 89 1,694
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
AMOUNTS IN THOUSANDS SHARES DOLLARS
YEAR ENDED NOVEMBER 30, ONE MONTH ENDED NOVEMBER 30, YEAR ENDED OCTOBER 31,
1998 1997 B 1997 A
CLASS A Shares sold $ 225,955 $ 9,817 $ 117,909
Reinvestment of distributions 10,085 - 980
Shares redeemed (55,006) (1,181) (9,793)
Net increase (decrease) $ 181,034 $ 8,636 $ 109,096
CLASS T Shares sold $ 4,546,813 $ 284,968 $ 4,556,363
Reinvestment of distributions 1,340,827 - 753,684
Shares redeemed (4,297,357) (188,917) (3,203,810)
Net increase (decrease) $ 1,590,283 $ 96,051 $ 2,106,237
CLASS B Shares sold $ 950,442 $ 40,834 $ 361,076
Reinvestment of distributions 27,524 - -
Shares redeemed (97,688) (1,738) (7,098)
Net increase (decrease) $ 880,278 $ 39,096 $ 353,978
CLASS C Shares sold $ 292,437 $ 5,792
Reinvestment of distributions 602 -
Shares redeemed (22,628) (12)
Net increase (decrease) $ 270,411 $ 5,780
INSTITUTIONAL CLASS Shares $ 319,599 $ 9,609 $ 232,509
sold
Reinvestment of distributions 24,612 - 12,382
Shares redeemed (180,998) (5,728) (176,171)
Net increase (decrease) $ 163,213 $ 3,881 $ 68,720
</TABLE>
A SHARE TRANSACTIONS FOR CLASS B ARE FOR THE PERIOD MARCH 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO OCTOBER 31, 1997.
B SHARE TRANSACTIONS FOR CLASS C ARE FOR THE PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO NOVEMBER 30, 1997.
9. REGISTRATION FEES.
For the period, each class paid the following amounts to register its
shares for sale:
REGISTRATION FEES
CLASS A $ 38,000
CLASS T 1,145,000
CLASS B 73,000
CLASS C 37,000
INSTITUTIONAL CLASS 39,000
$ 1,332,000
10. TRANSACTIONS WITH AFFILIATED COMPANIES.
An affiliated company is a company in which the fund has ownership of
at least 5% of the voting securities. Transactions during the period
with companies which are or were affiliates are as follows:
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES
PERIOD ENDED NOVEMBER 30, 1998
AMOUNTS IN THOUSANDS
PURCHASE SALES DIVIDEND VALUE
AFFILIATE COST COST INCOME
AmeriSource Health Corp. Class A $ 14,974 $ - $ - $ 84,154
Burlington Industries, Inc. 25,617 - - 57,348
Cherry Corp. Class B - - - -
Cummins Engine Co., Inc. - - 594 80,223
Discount Auto Parts, Inc. 7,952 - - 31,758
Fleetwood Enterprises, Inc. - 6,227 - -
Kaufman & Broad Home Corp. 9,845 - 842 75,933
LAM Research Corp. - - - 37,725
Liz Claiborne, Inc. 35,090 - 1,280 148,217
MGIC Investment Corp. 3,496 - 140 246,371
Policy Management Systems Corp. - 1,712 - -
Revlon, Inc. Class A 4,609 - - 26,694
SCI Systems, Inc. 24,371 - - 189,010
Solectron Corp. 61,636 - - 583,118
Ultratech Stepper, Inc. 8,590 - - 31,588
TOTALS $ 196,180 $ 7,939 $ 2,856 $ 1,592,139
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Advisor Series I and the Shareholders of
Fidelity Advisor Growth Opportunities Fund:
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of
Fidelity Advisor Growth Opportunities Fund (a fund of Fidelity Advisor
Series I) at November 30, 1998, and the results of its operations, the
changes in its net assets and the financial highlights for the periods
indicated, in conformity with generally accepted accounting
principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the
responsibility of the Fidelity Advisor Growth Opportunities Fund's
management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of
these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which
included confirmation of securities at November 30, 1998 by
correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
January 13, 1999
DISTRIBUTIONS
The Board of Trustees of Fidelity Advisor Growth Opportunities Fund
voted to pay to shareholders of record at the opening of business on
record date, the following distributions derived from capital gains
realized from sales of portfolio securities, and dividends derived
from net investment income:
CLASS A
PAY DATE 12/15/97 1/5/98 12/14/98 1/11/99
RECORD DATE 12/12/97 1/2/98 12/11/98 1/8/99
DIVIDENDS $0.60 - $0.47 -
SHORT-TERM
CAPITAL GAINS $0.79 - - -
LONG-TERM
CAPITAL GAINS $1.60 $0.21 $1.66 $0.03
LONG-TERM
CAPITAL GAIN PERCENTAGE:
28% rate 57.08% - - -
20% rate 42.92% 100% 100% 100%
CLASS T
PAY DATE 12/15/97 1/5/98 12/14/98 1/11/99
RECORD DATE 12/12/97 1/2/98 12/11/98 1/8/99
DIVIDENDS $0.47 - $0.35 -
SHORT-TERM
CAPITAL GAINS $0.79 - - -
LONG-TERM
CAPITAL GAINS $1.60 $0.21 $1.66 $0.03
LONG-TERM
CAPITAL GAIN PERCENTAGE:
28% rate 57.08% - - -
20% rate 42.92% 100% 100% 100%
CLASS B
PAY DATE 12/15/97 1/5/98 12/14/98 1/11/99
RECORD DATE 12/12/97 1/2/98 12/11/98 1/8/99
DIVIDENDS $0.48 - $0.24 -
SHORT-TERM
CAPITAL GAINS $0.79 - - -
LONG-TERM
CAPITAL GAINS $1.60 $0.21 $1.66 $0.03
LONG-TERM
CAPITAL GAIN PERCENTAGE:
28% rate 57.08% - -
20% rate 42.92% 100% 100% 100%
CLASS C
PAY DATE 12/15/97 1/5/98 12/14/98 1/11/99
RECORD DATE 12/12/97 1/2/98 12/11/98 1/8/99
DIVIDENDS $0.47 - $0.32 -
SHORT-TERM
CAPITAL GAINS $0.79 - - -
LONG-TERM
CAPITAL GAINS $1.60 $0.21 $1.66 $0.03
LONG-TERM
CAPITAL GAIN PERCENTAGE:
28% rate 57.08% - - -
20% rate 42.92% 100% 100% 100%
A total of 14.66% of the dividends distributed during the fiscal year
was derived from interest on U.S. Government securities which is
generally exempt from state income tax.
A total of 7%, 7%, 7% and 6% of the dividends distributed during the
fiscal year for Class A, Class T, Class B and Class C, respectively,
qualifies for the dividends-received deduction for corporate
shareholders.
The fund will notify shareholders in January 1999 of the applicable
percentages for use in preparing 1998 income tax returns.
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.)
Inc., London, England
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Abigail P. Johnson, Vice President
George A. Vanderheiden, Vice President
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
* INDEPENDENT TRUSTEES
ADVISORY BOARD
J. Gary Burkhead
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA
CUSTODIAN
Brown Brothers Harriman & Co.
Boston, MA
FOCUS FUNDS
Fidelity Advisor Consumer
Industries Fund
Fidelity Advisor Cyclical
Industries Fund
Fidelity Advisor Financial
Services Fund
Fidelity Advisor Health Care Fund
Fidelity Advisor Natural
Resources Fund
Fidelity Advisor Technology Fund
Fidelity Advisor Utilities Growth Fund
GROWTH FUNDS
Fidelity Advisor Latin America Fund
Fidelity Advisor Japan Fund
Fidelity Advisor Europe Capital Appreciation Fund
Fidelity Advisor International Capital Appreciation Fund
Fidelity Advisor Overseas Fund
Fidelity Advisor Diversified International Fund
Fidelity Advisor Global Equity Fund
Fidelity Advisor TechnoQuant
Growth Fund
SM
Fidelity Advisor Small Cap Fund
Fidelity Advisor Strategic
Opportunities Fund
Fidelity Advisor Mid Cap Fund
Fidelity Advisor Retirement
Growth Fund
Fidelity Advisor Equity Growth Fund
Fidelity Advisor Large Cap Fund
Fidelity Advisor Dividend Growth Fund
Fidelity Advisor Growth
Opportunities Fund
GROWTH AND INCOME FUNDS
Fidelity Advisor Growth & Income Fund
Fidelity Advisor Equity Income Fund
Fidelity Advisor Asset Allocation Fund
Fidelity Advisor Balanced Fund
TAXABLE INCOME FUNDS
Fidelity Advisor Emerging Markets Income Fund
Fidelity Advisor High Yield Fund
Fidelity Advisor Strategic Income Fund
Fidelity Advisor Mortgage
Securities Fund
Fidelity Advisor Government Investment Fund
Fidelity Advisor Intermediate Bond Fund
Fidelity Advisor Short Fixed-Income Fund
MUNICIPAL FUNDS
Fidelity Advisor Municipal Income Fund
Fidelity Advisor Intermediate Municipal Income Fund
MONEY MARKET FUNDS
Prime Fund
Treasury Fund
Tax-Exempt Fund
(registered trademark)
(2_FIDELITY_LOGOS)FIDELITY ADVISOR
(REGISTERED TRADEMARK)
GROWTH OPPORTUNITIES
FUND - INSTITUTIONAL CLASS
ANNUAL REPORT
NOVEMBER 30, 1998
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over
time.
FUND TALK 6 The manager's review of fund
performance, strategy and
outlook.
INVESTMENT CHANGES 10 A summary of major shifts in
the fund's investments over
the past six months.
INVESTMENTS 11 A complete list of the fund's
investments with their
market values.
FINANCIAL STATEMENTS 22 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 31 Footnotes to the financial
statements.
REPORT OF INDEPENDENT 40 The auditors' opinion.
ACCOUNTANTS
DISTRIBUTIONS 41
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION
OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS
IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT
INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY ADVISOR FUND, INCLUDING CHARGES
AND EXPENSES, CONTACT YOUR
INVESTMENT PROFESSIONAL FOR A FREE PROSPECTUS. READ IT CAREFULLY
BEFORE YOU INVEST OR SEND MONEY.
Standard & Poor's, S&P and S&P 500 are registered service marks of The
McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity
Distributors Corporation.
Other third party marks appearing herein are the property of their
respective owners.
All other marks appearing herein are registered or unregistered
trademarks or service marks of FMR Corp. or an affiliated company.
This report is printed on recycled paper using soy-based inks.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
The month of November proved to be a strong one for the stock and bond
markets. The Dow Jones Industrial Average reached a record high.
Merger activity, which had lulled during the summer correction, has
increased significantly. Small-cap stocks posted their third
consecutive month of positive returns, as did emerging markets. While
bond returns generally were not at the levels of their equity
counterparts, they were mostly positive nonetheless.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will
greatly reduce your vulnerability to any single decline. We know from
experience, for example, that stock prices have gone up over longer
periods of time, have significantly outperformed other types of
investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through
diversification. A stock mutual fund, for instance, is already
diversified, because it invests in many different companies. You can
increase your diversification further by investing in a number of
different stock funds, or in such other investment categories as
bonds. If you have a short investment time horizon, you might want to
consider moving some of your investment into a money market fund,
which seeks income and a stable share price by investing in
high-quality, short-term investments. Of course, it's important to
remember that there is no assurance that a money market fund will
achieve its goal of maintaining a stable net asset value of $1.00 per
share, and that these types of funds are neither insured nor
guaranteed by any agency of the U.S. government.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases. Of course, you should
consider your financial ability to continue your purchases through
periods of low price levels before undertaking such a strategy.
Remember to contact your investment professional if you need help with
your investments.
Best regards,
Edward C. Johnson 3d
FIDELITY ADVISOR GROWTH OPPORTUNITIES FUND - INSTITUTIONAL CLASS
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can
look at the total percentage change in value, the average annual
percentage change or the growth of a hypothetical $10,000 investment.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). The initial offering of Institutional Class shares took place
on July 3, 1995. Institutional Class shares are sold to eligible
investors without a sales load or 12b-1 fee. Returns prior to July 3,
1995 are those of Class T, the original class of the fund, and reflect
Class T shares' prior 0.65% 12b-1 fee.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
1998
FIDELITY ADV GROWTH 21.29% 155.60% 530.41%
OPPORTUNITIES - INST CL
S&P 500 (registered trademark) 23.66% 181.25% 457.74%
Growth Funds Average 14.32% 127.55% 363.55%
CUMULATIVE TOTAL RETURNS show Institutional Class' performance in
percentage terms over a set period - in this case, one year, five
years or 10 years. For example, if you had invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment
would be $1,050. You can compare Institutional Class' returns to the
performance of the Standard & Poor's 500 Index - a market
capitalization-weighted index of common stocks. To measure how
Institutional Class' performance stacked up against its peers, you can
compare it to the growth funds average, which reflects the performance
of mutual funds with similar objectives tracked by Lipper Analytical
Services, Inc. The past one year average represents a peer group of
961 mutual funds. These benchmarks include reinvested dividends and
capital gains, if any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
1998
FIDELITY ADV GROWTH 21.29% 20.65% 20.22%
OPPORTUNITIES - INST CL
S&P 500 23.66% 22.98% 18.75%
Growth Funds Average 14.32% 17.48% 16.16%
AVERAGE ANNUAL TOTAL RETURNS take Institutional Class shares'
cumulative return and show you what would have happened if
Institutional Class shares had performed at a constant rate each year.
$10,000 OVER 10 YEARS
FA Growth Opp -CL I S&P 500
00688 SP001
1988/11/30 10000.00 10000.00
1988/12/31 10384.25 10175.00
1989/01/31 11273.89 10919.81
1989/02/28 11059.15 10647.91
1989/03/31 11166.52 10896.00
1989/04/30 11887.43 11461.51
1989/05/31 12685.04 11925.70
1989/06/30 12140.52 11857.72
1989/07/31 12823.09 12928.47
1989/08/31 13298.58 13181.87
1989/09/30 13168.21 13127.82
1989/10/31 12677.37 12823.26
1989/11/30 12761.73 13084.85
1989/12/31 12891.24 13398.89
1990/01/31 11962.73 12499.82
1990/02/28 12252.89 12661.07
1990/03/31 12567.92 12996.59
1990/04/30 12153.41 12671.68
1990/05/31 13604.19 13907.16
1990/06/30 13678.80 13812.60
1990/07/31 13181.39 13768.40
1990/08/31 11730.61 12523.73
1990/09/30 10818.69 11913.83
1990/10/31 10768.95 11862.60
1990/11/30 11912.99 12628.92
1990/12/31 12678.93 12981.27
1991/01/31 14196.71 13547.25
1991/02/28 15471.32 14515.88
1991/03/31 15898.98 14867.16
1991/04/30 16226.01 14902.84
1991/05/31 17114.88 15546.65
1991/06/30 15907.36 14834.61
1991/07/31 17022.64 15525.90
1991/08/31 17685.10 15893.87
1991/09/30 17282.59 15628.44
1991/10/31 17257.44 15837.86
1991/11/30 16234.40 15199.60
1991/12/31 18090.41 16938.43
1992/01/31 18611.98 16623.37
1992/02/29 19453.82 16839.48
1992/03/31 18804.14 16511.11
1992/04/30 19316.57 16996.54
1992/05/31 19591.08 17079.82
1992/06/30 19142.71 16825.33
1992/07/31 19801.54 17513.49
1992/08/31 19252.51 17154.46
1992/09/30 19307.42 17356.88
1992/10/31 19344.02 17417.63
1992/11/30 20277.36 18011.57
1992/12/31 20808.68 18233.11
1993/01/31 21443.10 18386.27
1993/02/28 21501.66 18636.33
1993/03/31 22301.99 19029.55
1993/04/30 22341.03 18569.04
1993/05/31 22965.68 19066.69
1993/06/30 23053.52 19121.98
1993/07/31 23209.69 19045.49
1993/08/31 23922.18 19767.32
1993/09/30 24010.02 19615.11
1993/10/31 24781.07 20021.14
1993/11/30 24663.95 19830.94
1993/12/31 25422.66 20070.89
1994/01/31 26829.41 20753.30
1994/02/28 26424.59 20190.89
1994/03/31 25301.21 19310.57
1994/04/30 25969.17 19557.74
1994/05/31 26110.85 19878.49
1994/06/30 25402.42 19391.47
1994/07/31 26120.97 20027.51
1994/08/31 27224.11 20848.63
1994/09/30 26404.35 20337.84
1994/10/31 26940.73 20795.44
1994/11/30 26080.49 20038.07
1994/12/31 26148.97 20335.24
1995/01/31 26352.58 20862.53
1995/02/28 27156.34 21675.54
1995/03/31 27852.94 22315.19
1995/04/30 28796.01 22972.37
1995/05/31 29996.29 23890.58
1995/06/30 31014.39 24445.56
1995/07/31 32075.35 25256.17
1995/08/31 32311.12 25319.56
1995/09/30 32943.41 26388.05
1995/10/31 33189.90 26293.84
1995/11/30 34025.81 27448.14
1995/12/31 34930.60 27976.80
1996/01/31 35494.89 28929.13
1996/02/29 35406.37 29197.30
1996/03/31 35362.11 29478.47
1996/04/30 35970.66 29912.98
1996/05/31 36723.05 30684.44
1996/06/30 36911.14 30801.34
1996/07/31 35893.21 29440.54
1996/08/31 36191.95 30061.44
1996/09/30 37918.01 31753.30
1996/10/31 39245.75 32629.06
1996/11/30 42343.81 35095.49
1996/12/31 41324.47 34400.24
1997/01/31 43377.20 36549.57
1997/02/28 43752.56 36836.12
1997/03/31 41605.98 35322.52
1997/04/30 43506.23 37431.28
1997/05/31 46215.84 39710.10
1997/06/30 47670.35 41489.11
1997/07/31 51224.51 44790.40
1997/08/31 49359.45 42281.24
1997/09/30 51330.08 44596.98
1997/10/31 50262.66 43107.44
1997/11/30 51975.22 45102.89
1997/12/31 53392.21 45877.30
1998/01/31 53517.48 46384.71
1998/02/28 57063.36 49729.97
1998/03/31 58861.62 52276.64
1998/04/30 58874.29 52802.54
1998/05/31 58342.41 51894.87
1998/06/30 59659.45 54002.84
1998/07/31 59722.77 53427.71
1998/08/31 52073.80 45703.13
1998/09/30 55163.78 48630.87
1998/10/31 59152.89 52586.51
1998/11/30 63040.70 55773.78
IMATRL PRASUN SHR__CHT 19981130 19981208 104616 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Growth Opportunities Fund - Institutional
Class on November 30, 1988. As the chart shows, by November 30, 1998,
the value of the investment would have grown to $63,041 - a 530.41%
increase on the initial investment. For comparison, look at how the
Standard & Poor's 500 Index did over the same period. With dividends
and capital gains, if any, reinvested, the same $10,000 would have
grown to $55,774 - a 457.74% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
long-term growth and short-term
volatility. In turn, the share
price and return of a fund that
invests in stocks will vary. That
means if you sell your shares
during a market downturn, you
might lose money. But if you
can ride out the market's ups
and downs, you may have a
gain.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
When the final bell of the U.S. stock
market sounded on Monday,
November 23, 1998, the Dow
Jones Industrial Average stood at a
record high of 9374.27, serving
notice that the bleak economic
outlook from just a few short months
earlier would not keep positive
investor sentiment down. For the
12-month period ending November
30, 1998, the Dow - an index of
30 blue-chip stocks - returned
18.56%. What caused the
turnaround from the doldrums of
equity performance during the
summer and early fall? A variety of
factors: The economic problems in
Russia, Brazil and other emerging
markets began to dissipate; Asian
markets began to rebound; and,
perhaps most importantly, three
interest-rate cuts late in the period
by the Federal Reserve Board
helped stem the tide of a slowing
U.S. economy. All these factors
culminated in the Dow reaching its
record high late in November, a
peak that outpaced the previous
record set in July by nearly 40 points.
Small-cap stock performance was
still a far cry behind their large-cap
brethren. For the period, the Russell
2000 Index - a popular measure
of small-cap stock performance -
returned -6.62%, significantly
trailing the large-cap weighted
Standard & Poor's 500 Index's
return of 23.66%. Despite the late
rally in the equity market, this kind
of volatility has characterized the
entire year, and when it will level off
is impossible to predict.
An interview with George Vanderheiden, Portfolio Manager of Fidelity
Advisor Growth Opportunities Fund
Q. HOW DID THE FUND PERFORM, GEORGE?
A. For the 12-month period that ended November 30, 1998, the fund's
Institutional Class shares returned 21.29%. The growth funds average
returned 14.32% in that timeframe according to Lipper Analytical
Services, while the Standard & Poor's 500 Index returned 23.66%.
Q. WHAT MARKET SECTORS HELPED FUND PERFORMANCE?
A. Over the past year, the fund's holdings in the finance, utilities
and retail sectors helped performance relative to the S&P 500. Stock
selection was particularly strong in the finance sector. Declining
interest rates and an increase in home financing activity fueled a
strong price increase in fund holdings Fannie Mae and Freddie Mac,
both top contributors to performance over the period. Utilities
holding Vodafone Group, a telecommunications company based in the
United Kingdom, benefited from robust earnings growth. A rise in
consumer spending growth helped propel the retail sector to strong
gains and the fund benefited by its overweighting in the retail sector
during the year. Other notable contributors to performance included
nondurables holding Philip Morris. The company was the largest
position in the fund at the end of the period and, despite ongoing
concerns over government litigation against the tobacco industry, it
comfortably outperformed the S&P 500 during the past year. Fund
performance was also helped by underexposure to economically sensitive
market areas, such as basic industries, energy and aerospace and
defense.
Q. WHAT MARKET SECTORS HURT FUND PERFORMANCE?
A. Disappointing returns among holdings in the health, technology and
durables sectors hurt performance. Throughout much of the past year, I
believed the ongoing economic problems in Asia posed formidable
investment risks - particularly in the technology sector - although
the immediate concerns faced by U.S. investors seemed, at times, to
have diminished. Consequently, Advisor Growth Opportunities remained
underweighted in the technology sector, a stance that hurt performance
as technology outperformed the S&P 500 during the period.
Disappointing returns from technology stocks such as Compaq Computer,
which declined due to concerns with earnings growth, also detracted
from fund performance. The weak returns from health holdings were
primarily due to Columbia HCA/Healthcare's stock-price decline. Market
sentiment turned against the company due to the uncertainty
surrounding resolution of the government's investigation of Columbia's
billing practices and due to its weaker-than-expected operating
results.
Q. HOW DID THE FUND'S BOND HOLDINGS - REPRESENTING SLIGHTLY MORE THAN
9% OF THE FUND'S INVESTMENTS AT THE END OF THE PERIOD - AFFECT
PERFORMANCE?
A. The fund's bond holdings detracted from performance relative to the
S&P 500. Through September, the bond position helped fund performance
as the decline in interest rates and concerns with deceleration in
corporate earnings growth propelled bonds to strong gains. However,
aggressive easing of monetary policy by the Federal Reserve Board in
October and November - as seen by three separate interest rate cuts -
pushed the equity market to new highs and the fund's bond holdings
became a drag on performance.
Q. HOW DID THE FUND WEATHER THE MARKET VOLATILITY OVER THE PAST YEAR?
A. Over much of the past year I positioned Advisor Growth
Opportunities for an environment of economic weakness. In doing so, I
focused the fund's stock selection on companies I believed were less
sensitive to downturns in the domestic economy and to disruption in
foreign markets. Fannie Mae, Freddie Mac, Wal-Mart Stores and Home
Depot are all examples of fund holdings that, despite the emergence of
a global financial crisis and increased market volatility, met or
exceeded earnings growth expectations over the past year. Fannie Mae,
a federally chartered company that helps provide low- and
moderate-income family housing by purchasing mortgage loans from
lenders, was the top individual contributor during the year. The
company has proven capable of performing well in both economic booms
and busts, and the market has consistently rewarded it for doing so.
Q. THE FUND'S BOND INVESTMENTS CAME INTO PLAY HERE, AS WELL, DIDN'T
THEY?
A. That's right. I also maintained an allocation in bonds to hedge
against (1) a deceleration in corporate earnings growth, (2) a
downturn in the stock market, and (3) a financial crisis outside of
the U.S. This defensive strategy worked well during the market
correction that began in earnest over the summer. From July 16th, the
day before the summer's market peak, to October 8th, the bottom of the
correction, the S&P 500 declined 18.7% and the average fund in the
Lipper growth group declined 24.9%. Advisor Growth Opportunities
Institutional Class, however, only declined 17.3%, outperforming over
90% of its Lipper growth funds peers during this period.
Q. WHAT FACTORS CONTRIBUTED TO THE RECENT VOLATILITY OF THE STOCK
MARKET?
A. The ongoing economic weakness in Asia and other overseas countries,
a lack of pricing power - meaning companies' inability to raise prices
- - across almost all industry groups, and rising labor costs all began
to overwhelm the "Goldilocks" economic scenario, which was a widely
held view earlier in the year. In this scenario, real GDP was forecast
to grow between 2.5%-3% per year, inflation stayed restrained, profits
grew at their long-term growth rate of 7%-8%, and the stock market
rose in line with corporate earnings. During the past few months,
however, speculation began to intensify that economic turmoil in Asia
and other emerging countries would further slow the already softening
domestic economy, leading to a reduction in corporate profits, and
push the U.S. into a recession. These fears contributed to the
market's decline in August. The Fed then eased monetary policy in
October and November in an attempt to add liquidity back to the
financial system. This strategy worked temporarily and pushed the
market to new highs. However, over the next year it is doubtful that
lower rates will continue to be enough to support already stretched
stock market values.
Q. WHAT'S YOUR OUTLOOK?
A. The fund's positioning reflects an environment of anemic pricing
power, flat-to-declining corporate earnings and decreasing inflation.
Over the past year, consumer spending was robust, retail sales were
strong, GDP growth was healthy and many companies reported strong
top-line revenue growth. Nevertheless, U.S. corporate earnings growth
has decelerated and, in many cases, turned negative. A lack of pricing
power across a broad number of industries, wage inflation and a
decrease in exports has contributed to this weakness in earnings
growth. Based upon their underlying fundamentals the values of many
stocks remain overextended, many economic forecasts are downcast, and
turmoil rolls on in Asia and in other economies around the world. I
believe we are already in an earnings recession. The question remains
if this will evolve into an economic recession as well.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
GEORGE VANDERHEIDEN ON
POSITIONING THE FUND IN AN
UNCERTAIN ENVIRONMENT:
"I believe it is imperative to stay
out of the way of sectors and
companies that are going through
downward earnings revisions. Just
as was the case during the past
year, I believe the market will
continue to reward those
companies with solid earnings
growth, and will mercilessly punish
those companies with earnings
disappointments. On a sector basis, I
believe regional banks, mortgage
companies, homebuilders and
building supply companies will
benefit from the Fed's efforts to
bolster the economy by lowering
interest rates. Another attractive
sector is the innovators and unit
growers - the technology,
telecommunications and health
care sectors. They grow by
developing new products and
expanding the number of units they
sell. The mid/smaller cap sector also
looks good. Relative to the
price/earnings (P/E) ratio of the
S&P 500, the P/E of small-cap stocks
is the lowest it has been in decades.
In periods when small-cap stocks
have been this attractively priced,
they have subsequently
outperformed large caps by a huge
margin. Whatever the market
environment, I keep the fund
diversified across industry sectors
and may invest a portion of the
funds in bonds when I feel bonds
are attractively priced."
FUND FACTS
GOAL: to provide capital
growth by investing primarily
in common stocks and
securities convertible into
common stocks
START DATE: November 18,
1987
SIZE: as of November
30, 1998, more than $27.5
billion
MANAGER: George
Vanderheiden, since 1987;
joined Fidelity in 1971
(checkmark)
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF NOVEMBER
30, 1998
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE STOCKS 6 MONTHS AGO
Philip Morris Companies, Inc. 6.0 4.3
Fannie Mae 5.4 4.9
Freddie Mac 3.2 2.6
Fleet Financial Group, Inc. 2.9 2.9
Home Depot, Inc. 2.4 2.2
Wal-Mart Stores, Inc. 2.3 2.0
Columbia/HCA Healthcare Corp. 2.3 2.9
Solectron Corp. 2.1 1.4
Vodafone Group PLC sponsored 2.1 1.8
ADR
MCI WorldCom, Inc. 2.0 1.9
TOP FIVE MARKET SECTORS AS OF
NOVEMBER 30, 1998
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE HOLDINGS 6 MONTHS AGO
FINANCE 19.4 18.6
TECHNOLOGY 12.2 9.6
RETAIL & WHOLESALE 9.1 9.1
HEALTH 9.1 9.3
UTILITIES 9.1 8.9
</TABLE>
ASSET ALLOCATION (% OF FUND'S
INVESTMENTS)
AS OF NOVEMBER 30, 1998 * AS OF MAY 31, 1998 **
Row: 1, Col: 1, Value: 85.09999999999999
Row: 1, Col: 2, Value: 9.4
Row: 1, Col: 3, Value: 5.5
Stocks 84.2%
Bonds 10.7%
Short-term
investments 5.1%
FOREIGN
INVESTMENTS 10.6%
Stocks 85.1%
Bonds 9.4%
Short-term
investments 5.5%
FOREIGN
INVESTMENTS 8.3%
Row: 1, Col: 1, Value: 84.2
Row: 1, Col: 2, Value: 10.7
Row: 1, Col: 3, Value: 5.1
*
**
INVESTMENTS NOVEMBER 30, 1998
Showing Percentage of Total Value of Investment in Securities
<TABLE>
<CAPTION>
<S> <C> <C> <C>
COMMON STOCKS - 85.1%
SHARES VALUE (NOTE 1) (000S)
BASIC INDUSTRIES - 1.6%
CHEMICALS & PLASTICS - 1.0%
Cabot Corp. 1,267,500 $ 38,183
du Pont (E.I.) de Nemours & 2,284,300 134,203
Co.
Raychem Corp. 2,112,100 71,943
Union Carbide Corp. 836,400 37,429
281,758
IRON & STEEL - 0.1%
Aeroquip-Vickers, Inc. 459,000 16,696
PACKAGING & CONTAINERS - 0.4%
Owens-Illinois, Inc. (a) 3,780,800 121,458
PAPER & FOREST PRODUCTS - 0.1%
Willamette Industries, Inc. 382,500 13,364
TOTAL BASIC INDUSTRIES 433,276
CONSTRUCTION & REAL ESTATE -
1.7%
BUILDING MATERIALS - 0.6%
Armstrong World Industries, 493,000 32,846
Inc.
Owens-Corning 2,276,500 84,942
Sherwin-Williams Co. 1,066,300 30,256
148,044
CONSTRUCTION - 0.7%
Centex Corp. 1,062,900 37,932
D.R. Horton, Inc. 2,330,680 43,992
Fleetwood Enterprises, Inc. 1,265,652 42,637
Kaufman & Broad Home Corp. (c) 3,014,700 75,933
200,494
ENGINEERING - 0.4%
Fluor Corp. 2,754,100 117,910
TOTAL CONSTRUCTION & REAL 466,448
ESTATE
DURABLES - 4.1%
AUTOS, TIRES, & ACCESSORIES -
2.6%
AutoZone, Inc. (a) 1,132,700 34,123
Cummins Engine Co., Inc. (c) 2,160,900 80,223
Discount Auto Parts, Inc. 1,273,500 31,758
(a)(c)
General Motors Corp. 5,818,339 407,284
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
DURABLES - CONTINUED
AUTOS, TIRES, & ACCESSORIES -
CONTINUED
Goodyear Tire & Rubber Co. 1,089,000 $ 61,801
Magna International, Inc. 1,374,400 91,265
Class A
Republic Industries, Inc. (a) 878,800 14,940
721,394
CONSUMER DURABLES - 0.3%
Minnesota Mining & 901,500 72,402
Manufacturing Co.
CONSUMER ELECTRONICS - 0.1%
Newell Co. 178,400 7,894
Whirlpool Corp. 409,800 22,949
30,843
TEXTILES & APPAREL - 1.1%
Burlington Industries, Inc. 5,494,400 57,348
(a)(c)
Jones Apparel Group, Inc. (a) 1,221,700 28,328
Liz Claiborne, Inc. (c) 4,375,400 148,217
NIKE, Inc. Class B 592,800 23,712
Polo Ralph Lauren Corp. Class 393,900 7,312
A (a)
Shaw Industries, Inc. 483,300 9,787
Warnaco Group, Inc. Class A 1,445,000 35,764
310,468
TOTAL DURABLES 1,135,107
ENERGY - 5.4%
ENERGY SERVICES - 0.2%
McDermott International, Inc. 1,189,200 31,885
Schlumberger Ltd. 297,100 13,277
45,162
OIL & GAS - 5.2%
Amerada Hess Corp. 3,939,500 218,642
Apache Corp. 408,800 9,402
Atlantic Richfield Co. 353,000 23,475
British Petroleum Co. PLC ADR 3,562,598 328,204
Burlington Resources, Inc. 2,208,165 78,666
Chevron Corp. 1,060,000 88,643
Cooper Cameron Corp. (a) 1,552,700 37,847
Elf Aquitaine SA sponsored ADR 287,447 17,894
Occidental Petroleum Corp. 7,342,700 148,690
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
ENERGY - CONTINUED
OIL & GAS - CONTINUED
Royal Dutch Petroleum Co. (NY 5,176,200 $ 243,281
Registry Gilder 1.25)
Tosco Corp. 5,759,800 150,475
Total SA:
Class B 197,574 24,153
sponsored ADR 507,852 31,042
Unocal Corp. 279,249 9,460
USX-Marathon Group 530,800 15,061
1,424,935
TOTAL ENERGY 1,470,097
FINANCE - 19.4%
BANKS - 0.8%
Bank of Tokyo-Mitsubishi Ltd. 1,467,000 15,966
Bank One Corp. 2,125,200 109,049
Wells Fargo & Co. 2,660,000 95,760
220,775
CREDIT & OTHER FINANCE - 3.7%
Associates First Capital 75,900 5,911
Corp.
Citigroup, Inc. 216,900 10,886
Fleet Financial Group, Inc. 19,041,220 793,781
Providian Financial Corp. 2,199,900 201,978
1,012,556
FEDERAL SPONSORED CREDIT - 8.5%
Fannie Mae 20,256,620 1,473,669
Freddie Mac 14,420,100 872,416
2,346,085
INSURANCE - 5.2%
AFLAC, Inc. 1,654,600 61,013
Allmerica Financial Corp. 1,082,700 59,752
Allstate Corp. 5,701,364 232,331
American International Group, 3,479,212 327,046
Inc.
CIGNA Corp. 3,187,700 248,043
Loews Corp. 840,300 84,030
MBIA, Inc. 221,500 14,342
MGIC Investment Corp. (c) 5,607,300 246,371
MONY Group, Inc. (a) 26,900 832
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
FINANCE - CONTINUED
INSURANCE - CONTINUED
PMI Group, Inc. 750,400 $ 41,038
Reliastar Financial Corp. 137,297 6,453
Torchmark Corp. 1,462,600 55,579
Travelers Property Casualty 1,170,900 40,323
Corp. Class A
1,417,153
SAVINGS & LOANS - 0.1%
Golden West Financial Corp. 287,340 27,208
SECURITIES INDUSTRY - 1.1%
Merrill Lynch & Co., Inc. 1,666,000 124,950
Morgan Stanley, Dean Witter & 1,514,500 105,636
Co.
Nomura Securities Co. Ltd. 3,983,000 38,722
PaineWebber Group, Inc. 302,800 12,377
United Asset Management Corp. 608,800 15,410
Waddell & Reed Financial, 358,190 8,373
Inc. Class B
Waddell & Reed Financial, 83,221 1,987
Inc. Class A
307,455
TOTAL FINANCE 5,331,232
HEALTH - 9.1%
DRUGS & PHARMACEUTICALS - 3.5%
American Home Products Corp. 5,009,100 266,735
Amgen, Inc. (a) 1,966,000 147,942
Astra AB Class A 5,569,266 103,031
Merck & Co., Inc. 931,600 144,282
Novartis AG (Reg.) 14,632 27,498
Schering-Plough Corp. 2,644,400 281,298
970,786
MEDICAL EQUIPMENT & SUPPLIES
- - 1.8%
AmeriSource Health Corp. 1,314,900 84,154
Class A (a)(c)
Baxter International, Inc. 267,000 16,971
Biomet, Inc. 722,000 27,617
Boston Scientific Corp. (a) 378,600 18,741
Johnson & Johnson 3,582,100 291,046
St. Jude Medical, Inc. (a) 2,181,300 63,394
501,923
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
HEALTH - CONTINUED
MEDICAL FACILITIES MANAGEMENT
- - 3.8%
Columbia/HCA Healthcare Corp. 25,309,663 $ 623,250
HEALTHSOUTH Corp. (a) 500,000 6,719
Humana, Inc. (a) 6,094,400 120,745
Tenet Healthcare Corp. (a) 6,080,700 179,761
United HealthCare Corp. 2,257,700 101,879
1,032,354
TOTAL HEALTH 2,505,063
HOLDING COMPANIES - 0.0%
U.S. Industries, Inc. 351,150 6,145
INDUSTRIAL MACHINERY &
EQUIPMENT - 3.5%
ELECTRICAL EQUIPMENT - 2.6%
Alcatel Alsthom Compagnie 811,300 104,962
Generale d'Electricite SA
(RFD)
Alcatel Alsthom Compagnie 90,500 2,342
Generale d'Electricite SA
sponsored ADR
Cherry Corp.:
Class A (Non Vtg.) 537,300 7,657
Class B (a) 368,300 5,386
Emerson Electric Co. 1,979,900 128,694
General Electric Co. 1,688,600 152,818
Grainger (W.W.), Inc. 1,091,200 46,103
Philips Electronics NV:
(Bearer) 1,875,000 118,711
(NY shares) 2,585,700 163,707
730,380
INDUSTRIAL MACHINERY &
EQUIPMENT - 0.9%
Caterpillar, Inc. 1,833,500 90,644
Tyco International Ltd. 1,747,000 114,974
Ultratech Stepper, Inc. (a)(c) 1,696,000 31,588
United States Filter Corp. (a) 279,000 6,173
243,379
TOTAL INDUSTRIAL MACHINERY & 973,759
EQUIPMENT
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
MEDIA & LEISURE - 3.0%
BROADCASTING - 0.8%
Comcast Corp. Class A 285,900 $ 13,866
(special)
Cox Communications, Inc. 414,400 21,834
Class A (a)
Fox Entertainment Group, Inc. 609,700 14,404
(a)
MediaOne Group, Inc. 2,068,700 83,782
TCA Cable TV, Inc. 1,000,000 28,500
Tele-Communications, Inc. 986,827 41,693
(TCI Group) Series A (a)
Time Warner, Inc. 149,900 15,852
219,931
ENTERTAINMENT - 0.8%
Cedar Fair LP (depository 1,362,000 34,050
unit)
King World Productions, Inc. 473,500 12,903
(a)
Royal Carribean Cruises Ltd. 367,400 11,160
Tele-Communications, Inc. 8,050,646 159,503
(TCI Ventures Group) Series
A (a)
217,616
LODGING & GAMING - 0.7%
Circus Circus Enterprises, 1,085,100 12,546
Inc. (a)
Mirage Resorts, Inc. (a) 2,136,300 31,777
Promus Hotel Corp. (a) 3,118,000 104,063
Sun International Hotels Ltd. 1,124,000 43,415
(a)
191,801
RESTAURANTS - 0.7%
McDonald's Corp. 1,063,500 74,511
Papa John's International, 489,200 20,516
Inc. (a)
Wendy's International, Inc. 4,326,300 86,526
181,553
TOTAL MEDIA & LEISURE 810,901
NONDURABLES - 6.2%
BEVERAGES - 0.1%
PepsiCo, Inc. 447,300 17,305
HOUSEHOLD PRODUCTS - 0.1%
Revlon, Inc. Class A (a)(c) 1,294,250 26,694
TOBACCO - 6.0%
Philip Morris Companies, Inc. 29,412,700 1,645,268
TOTAL NONDURABLES 1,689,267
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
PRECIOUS METALS - 0.0%
Newmont Mining Corp. 385,881 $ 7,669
RETAIL & WHOLESALE - 9.1%
APPAREL STORES - 0.6%
Gap, Inc. 1,001,400 73,665
TJX Companies, Inc. 3,255,100 83,412
157,077
GENERAL MERCHANDISE STORES -
2.9%
Federated Department Stores, 1,942,813 80,991
Inc. (a)
Saks Holdings, Inc. (a) 3,691,440 101,515
Wal-Mart Stores, Inc. 8,396,000 632,324
814,830
GROCERY STORES - 0.5%
Safeway, Inc. (a) 2,776,600 146,639
RETAIL & WHOLESALE,
MISCELLANEOUS - 5.1%
Circuit City Stores, Inc. - 4,237,300 153,337
Circuit City Group
Home Depot, Inc. 13,004,400 646,969
Lowe's Companies, Inc. 10,298,000 435,091
Office Depot, Inc. (a) 1,678,700 54,558
Officemax, Inc. (a) 2,598,625 27,610
Staples, Inc. (a) 2,216,200 77,428
1,394,993
TOTAL RETAIL & WHOLESALE 2,513,539
SERVICES - 0.5%
ADVERTISING - 0.1%
Interpublic Group of 381,150 26,204
Companies, Inc.
Omnicom Group, Inc. 227,300 12,146
38,350
SERVICES - 0.4%
Modis Professional Services, 180,000 2,149
Inc. (a)
Service Corp. International 2,827,200 105,667
107,816
TOTAL SERVICES 146,166
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
TECHNOLOGY - 12.2%
COMMUNICATIONS EQUIPMENT - 0.0%
Cisco Systems, Inc. (a) 57,000 $ 4,296
COMPUTER SERVICES & SOFTWARE
- - 2.7%
Automatic Data Processing, 842,300 64,857
Inc.
Black Box Corp. (a) 724,600 25,452
Ceridian Corp. (a) 942,900 61,347
CompUSA, Inc. (a) 1,374,800 20,364
E Trade Group, Inc. (a) 1,947,400 52,702
Electronics for Imaging, Inc. 1,896,400 50,847
(a)
First Data Corp. 2,092,100 55,833
IMS Health, Inc. 517,200 34,329
Microsoft Corp. (a) 1,908,100 232,788
Oracle Corp. (a) 1,828,225 62,617
Policy Management Systems 1,512,900 77,347
Corp. (a)
738,483
COMPUTERS & OFFICE EQUIPMENT
- - 2.7%
Compaq Computer Corp. 4,648,500 151,076
Hewlett-Packard Co. 1,297,200 81,399
Ingram Micro, Inc. Class A (a) 353,300 15,015
International Business 1,401,200 231,198
Machines Corp.
SCI Systems, Inc. (a)(c) 3,887,100 189,010
Tech Data Corp. (a) 2,137,000 86,014
753,712
ELECTRONIC INSTRUMENTS - 1.1%
Applied Materials, Inc. (a) 1,509,600 58,497
Cognex Corp. (a) 480,900 7,965
KLA-Tencor Corp. (a) 1,824,600 62,150
LAM Research Corp. (a)(c) 2,110,500 37,725
Novellus Systems, Inc. (a) 451,700 22,416
Teradyne, Inc. (a) 200,700 6,435
Thermo Electron Corp. (a) 3,552,400 59,947
Varian Associates, Inc. 998,700 39,511
294,646
ELECTRONICS - 5.7%
Altera Corp. (a) 447,100 21,936
AMP, Inc. 1,482,563 71,719
Etec Systems, Inc. (a) 378,800 12,453
Intel Corp. 1,417,700 152,580
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
TECHNOLOGY - CONTINUED
ELECTRONICS - CONTINUED
International Rectifier Corp. 972,000 $ 9,113
(a)
Methode Electronics, Inc. 635,500 8,659
Class A
Micrel, Inc. (a) 664,700 26,962
Microchip Technology, Inc. (a) 1,933,800 67,320
Micron Technology, Inc. (a) 5,671,400 234,300
Molex, Inc. Class A 2,221,852 71,655
Motorola, Inc. 3,106,800 192,622
Solectron Corp. (a)(c) 8,810,100 583,118
Speedfam International, Inc. 378,700 5,752
(a)
Thomas & Betts Corp. 2,190,800 94,889
Vishay Intertechnology, Inc. 467,865 6,638
1,559,716
TOTAL TECHNOLOGY 3,350,853
TRANSPORTATION - 0.2%
RAILROADS - 0.2%
CSX Corp. 1,300,600 54,219
TRUCKING & FREIGHT - 0.0%
Airborne Freight Corp. 189,400 5,055
TOTAL TRANSPORTATION 59,274
UTILITIES - 9.1%
CELLULAR - 2.7%
AirTouch Communications, Inc. 1,415,800 80,966
(a)
Tele Celular Sul 301,780 6,865
Participacoes SA ADR
Tele Centro Oeste Celular 1,005,935 4,778
Participacoes SA ADR
Tele Leste Celular 60,356 2,524
Participacoes SA ADR
Tele Nordeste Celular 150,890 3,951
Participacoes SA ADR
Tele Norte Celular 60,356 2,471
Participacoes SA ADR
Tele Sudeste Celular 603,560 16,296
Participacoes SA ADR
Teleglobe, Inc. 522,150 14,220
Telemig Celular Participacoes 150,890 4,659
SA ADR
Telesp Celular Participacoes 1,207,120 31,687
SA ADR
Vodafone Group PLC sponsored 3,857,700 569,734
ADR
738,151
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
UTILITIES - CONTINUED
ELECTRIC UTILITY - 0.5%
American Electric Power Co., 1,130,600 $ 52,432
Inc.
Consolidated Edison, Inc. 181,300 9,212
Duke Energy Corp. 352,600 22,060
Houston Industries, Inc. 502,000 15,876
Niagara Mohawk Power Corp. (a) 483,900 7,440
PG&E Corp. 622,419 19,256
126,276
TELEPHONE SERVICES - 5.9%
Ameritech Corp. 894,600 48,420
AT&T Corp. 2,351,700 146,540
Bell Atlantic Corp. 1,793,392 99,757
BellSouth Corp. 977,800 85,313
Embratel Participacoes SA ADR 3,017,800 48,285
MCI WorldCom, Inc. (a) 9,133,904 538,900
Qwest Communications 2,082,793 83,312
International, Inc. (a)
SBC Communications, Inc. 2,466,700 118,247
Sprint Corp.:
(FON Group) 3,602,500 262,082
(PCS Group) (a) 1,801,250 28,820
Tele Centro Sul Participacoes 603,560 34,441
SA ADR
Tele Norte Leste 3,017,800 51,303
Participacoes SA ADR
Telebras sponsored ADR 3,017,800 519
Telesp Participacoes SA ADR 3,017,800 80,726
1,626,665
TOTAL UTILITIES 2,491,092
TOTAL COMMON STOCKS 23,389,888
(Cost $14,803,889)
U.S. TREASURY OBLIGATIONS -
9.4%
PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
U.S. Treasury Bonds:
stripped principal:
0% 2/15/19 $ 533,000 $ 177,718
0% 8/15/19 45,000 14,587
0% 8/15/20 941,300 288,367
6.25% 8/15/23 330,750 372,610
7.625% 11/15/22 128,000 167,260
8.125% 8/15/19 1,156,000 1,555,178
TOTAL U.S. TREASURY OBLIGATIONS 2,575,720
(Cost $2,085,624)
CASH EQUIVALENTS - 5.5%
SHARES
Taxable Central Cash Fund (b) 1,526,262,202 1,526,262
(Cost $1,526,262)
TOTAL INVESTMENT IN $ 27,491,870
SECURITIES - 100%
(Cost $18,415,775)
</TABLE>
LEGEND
(a) Non-income producing
(b) At period end, the seven-day yield on the Taxable Central Cash
Fund was 4.81%. The yield refers to the income earned by investing in
the fund over the seven-day period, expressed as an annual percentage.
(c) Affiliated company (see Note 10 of Notes to Financial Statements).
INCOME TAX INFORMATION
At November 30, 1998, the aggregate cost of investment securities for
income tax purposes was $18,445,908,000. Net unrealized appreciation
aggregated $9,045,962,000, of which $9,919,499,000 related to
appreciated investment securities and $873,537,000 related to
depreciated investment securities.
The fund hereby designates approximately $996,365,000 as a capital
gain dividend for the purpose of the dividend paid deduction.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AMOUNTS IN THOUSANDS (EXCEPT
PER-SHARE AMOUNTS) NOVEMBER
30, 1998
ASSETS
Investment in securities, at $ 27,491,870
value (cost $18,415,775) -
See accompanying schedule
Receivable for investments 2,002
sold
Receivable for fund shares 28,527
sold
Dividends receivable 21,750
Interest receivable 39,659
Other receivables 396
TOTAL ASSETS 27,584,204
LIABILITIES
Payable for fund shares $ 45,529
redeemed
Accrued management fee 10,029
Distribution fees payable 11,526
Other payables and accrued 4,839
expenses
TOTAL LIABILITIES 71,923
NET ASSETS $ 27,512,281
Net Assets consist of:
Paid in capital $ 17,215,003
Undistributed net investment 204,660
income
Accumulated undistributed net 1,016,420
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 9,076,198
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS $ 27,512,281
STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
AMOUNTS IN THOUSANDS (EXCEPT
PER-SHARE AMOUNTS) NOVEMBER
30, 1998
CALCULATION OF MAXIMUM $49.33
OFFERING PRICE CLASS A: NET
ASSET VALUE and redemption
price per share ($359,107
(divided by) 7,279 shares)
Maximum offering price per $52.34
share (100/94.25 of $49.33)
CLASS T: NET ASSET VALUE and $49.63
redemption price per share
($24,802,061 (divided by)
499,706 shares)
Maximum offering price per $51.43
share (100/96.50 of $49.63)
CLASS B: NET ASSET VALUE and $49.12
offering price per share
($1,431,602 (divided by)
29,145 shares) A
CLASS C: NET ASSET VALUE and $49.33
offering price per share
($301,078 (divided by) 6,103
shares) A
INSTITUTIONAL CLASS: NET $49.78
ASSET VALUE, offering price
and redemption price per
share ($618,433 (divided by)
12,424 shares)
A REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS YEAR
ENDED NOVEMBER 30, 1998
INVESTMENT INCOME $ 261,564
Dividends (including $2,856
received from affiliated
issuers)
Interest 242,172
TOTAL INCOME 503,736
EXPENSES
Management fee Basic fee $ 144,943
Performance adjustment (31,888)
Transfer agent fees 40,833
Distribution fees 125,058
Accounting fees and expenses 906
Non-interested trustees' 98
compensation
Custodian fees and expenses 737
Registration fees 1,332
Audit 134
Legal 212
Reports to shareholders 694
Miscellaneous 65
Total expenses before 283,124
reductions
Expense reductions (1,801) 281,323
NET INVESTMENT INCOME 222,413
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 1,043,788
(including realized gain
(loss) of $3,634 on sales
of investments in affiliated
issuers)
Foreign currency transactions (646) 1,043,142
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 3,286,480
Assets and liabilities in 93 3,286,573
foreign currencies
NET GAIN (LOSS) 4,329,715
NET INCREASE (DECREASE) IN $ 4,552,128
NET ASSETS RESULTING FROM
OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
AMOUNTS IN THOUSANDS YEAR ENDED NOVEMBER 30, 1998 ONE MONTH ENDED NOVEMBER 30, YEAR ENDED OCTOBER 31, 1997
1997
INCREASE (DECREASE) IN NET
ASSETS
Operations Net investment $ 222,413 $ 16,383 $ 248,319
income
Net realized gain (loss) 1,043,142 92,122 1,262,890
Change in net unrealized 3,286,573 584,763 2,623,684
appreciation (depreciation)
NET INCREASE (DECREASE) IN 4,552,128 693,268 4,134,893
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (230,393) - (225,025)
From net investment income
From net realized gain (1,268,193) - (596,509)
TOTAL DISTRIBUTIONS (1,498,586) - (821,534)
Share transactions - net 3,085,219 153,444 2,638,031
increase (decrease)
TOTAL INCREASE (DECREASE) 6,138,761 846,712 5,951,390
IN NET ASSETS
NET ASSETS
Beginning of period 21,373,520 20,526,808 14,575,418
End of period (including $ 27,512,281 $ 21,373,520 $ 20,526,808
undistributed net investment
income of $204,660, $201,723
and $199,910, respectively)
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
YEAR ENDED NOVEMBER 30, ONE MONTH ENDED NOVEMBER 30, YEARS ENDED OCTOBER 31,
1998 1997 1997 1996 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 44.02 $ 42.57 $ 35.39 $ 32.86
period
Income from Investment
Operations
Net investment income D .48 .04 .54 .09
Net realized and unrealized 8.03 1.41 8.80 2.44
gain (loss)
Total from investment 8.51 1.45 9.34 2.53
operations
Less Distributions
From net investment income (.60) - (.72) -
From net realized gain (2.60) - (1.44) -
Total distributions (3.20) - (2.16) -
Net asset value, end of period $ 49.33 $ 44.02 $ 42.57 $ 35.39
TOTAL RETURN B, C 20.82% 3.41% 27.58% 7.70%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 359 $ 143 $ 130 $ 10
millions)
Ratio of expenses to average .97% 1.10% A, F 1.05% 1.48% A, F
net assets
Ratio of expenses to average .96% G 1.09% A, G 1.04% G 1.47% A, G
net assets after expense
reductions
Ratio of net investment 1.06% 1.22% A 1.36% 1.74% A
income to average net assets
Portfolio turnover 25% 33% A 35% 33%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A
SHARES) TO OCTOBER 31, 1996.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
YEAR ENDED NOVEMBER 30, ONE MONTH ENDED NOVEMBER 30, YEARS ENDED OCTOBER 31,
1998 1997 1997 1996
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 44.20 $ 42.76 $ 35.41 $ 30.89
period
Income from Investment
Operations
Net investment income .42 D .03 D .55 D .61 D
Net realized and 8.08 1.41 8.78 4.72
unrealized gain (loss)
Total from investment 8.50 1.44 9.33 5.33
operations
Less Distributions
From net investment income (.47) - (.54) (.41)
From net realized gain (2.60) - (1.44) (.40)
Total distributions (3.07) - (1.98) (.81)
Net asset value, end of period $ 49.63 $ 44.20 $ 42.76 $ 35.41
TOTAL RETURN B, C 20.63% 3.37% 27.43% 17.61%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 24,802 $ 20,411 $ 19,652 $ 14,315
millions)
Ratio of expenses to average 1.14% 1.28% A 1.18% 1.34%
net assets
Ratio of expenses to average 1.13% E 1.27% A, E 1.17% E 1.34%
net assets after expense
reductions
Ratio of net investment .92% 1.03% A 1.39% 1.88%
income to average net assets
Portfolio turnover 25% 33% A 35% 33%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
1995 1994
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 26.62 $ 25.39
period
Income from Investment
Operations
Net investment income .39 .22
Net realized and 5.31 1.92
unrealized gain (loss)
Total from investment 5.70 2.14
operations
Less Distributions
From net investment income (.27) (.07)
From net realized gain (1.16) (.84)
Total distributions (1.43) (.91)
Net asset value, end of period $ 30.89 $ 26.62
TOTAL RETURN B, C 22.88% 8.71%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 9,691 $ 4,599
millions)
Ratio of expenses to average 1.59% 1.63%
net assets
Ratio of expenses to average 1.58% E 1.62% E
net assets after expense
reductions
Ratio of net investment 1.56% 1.12%
income to average net assets
Portfolio turnover 39% 43%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C>
YEAR ENDED NOVEMBER 30, ONE MONTH ENDED NOVEMBER 30, YEAR ENDED OCTOBER 31,
1998 1997 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 44.02 $ 42.60 $ 37.62
period
Income from Investment
Operations
Net investment income D .14 .02 .13
Net realized and unrealized 8.04 1.40 4.85
gain (loss)
Total from investment 8.18 1.42 4.98
operations
Less Distributions
From net investment income (.48) - -
From net realized gain (2.60) - -
Total distributions (3.08) - -
Net asset value, end of period $ 49.12 $ 44.02 $ 42.60
TOTAL RETURN B, C 19.95% 3.33% 13.24%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 1,432 $ 423 $ 371
millions)
Ratio of expenses to average 1.71% 1.85% A, F 1.75% A
net assets
Ratio of expenses to average 1.70% G 1.84% A, G 1.74% A, G
net assets after expense
reductions
Ratio of net investment .31% .47% A .48% A
income to average net assets
Portfolio turnover 25% 33% A 35%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE
AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD MARCH 3, 1997 (COMMENCEMENT OF SALE OF CLASS B
SHARES) TO OCTOBER 31, 1997.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - CLASS C
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED NOVEMBER 30, ONE MONTH ENDED NOVEMBER 30,
1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 44.20 $ 43.62
period
Income from Investment
Operations
Net investment income D .12 .02
Net realized and unrealized 8.08 .56
gain (loss)
Total from investment 8.20 .58
operations
Less Distributions
From net investment income (.47) -
From net realized gain (2.60) -
Total distributions (3.07) -
Net asset value, end of period $ 49.33 $ 44.20
TOTAL RETURN B, C 19.91% 1.33%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 301 $ 6
millions)
Ratio of expenses to average 1.70% 1.85% A, F
net assets
Ratio of expenses to average 1.70% 1.84% A, G
net assets after expense
reductions
Ratio of net investment .27% .74% A
income to average net assets
Portfolio turnover 25% 33% A
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE
AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD NOVEMBER 3, 1997 (COMMENCEMENT OF SALE OF CLASS C
SHARES) TO NOVEMBER 30, 1997.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
YEAR ENDED NOVEMBER 30, ONE MONTH ENDED NOVEMBER 30, YEARS ENDED OCTOBER 31,
1998 1997 1997 1996
SELECTED PER-SHARE DATA
Net asset value, beginning $ 44.31 $ 42.85 $ 35.47 $ 30.97
of period
Income from Investment
Operations
Net investment income .65 D .05 D .75 D .77 D
Net realized and unrealized 8.10 1.41 8.78 4.74
gain (loss)
Total from investment 8.75 1.46 9.53 5.51
operations
Less Distributions
From net investment income (.68) - (.71) (.61)
From net realized gain (2.60) - (1.44) (.40)
Total distributions (3.28) - (2.15) (1.01)
Net asset value, end of period $ 49.78 $ 44.31 $ 42.85 $ 35.47
TOTAL RETURN B, C 21.29% 3.41% 28.07% 18.25%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 618 $ 392 $ 375 $ 250
(in millions)
Ratio of expenses to average .62% .71% A .66% .85%
net assets
Ratio of expenses to average .61% F .70% A, F .65% F .84% F
net assets after expense
reductions
Ratio of net investment 1.43% 1.60% A 1.91% 2.38%
income to average net assets
Portfolio turnover 25% 33% A 35% 33%
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
1995 E
SELECTED PER-SHARE DATA
Net asset value, beginning $ 29.04
of period
Income from Investment
Operations
Net investment income .12
Net realized and unrealized 1.81
gain (loss)
Total from investment 1.93
operations
Less Distributions
From net investment income -
From net realized gain -
Total distributions -
Net asset value, end of period $ 30.97
TOTAL RETURN B, C 6.65%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 72
(in millions)
Ratio of expenses to average .82% A
net assets
Ratio of expenses to average .81% A, F
net assets after expense
reductions
Ratio of net investment 2.33% A
income to average net assets
Portfolio turnover 39%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD JULY 3, 1995 (COMMENCEMENT OF SALE OF INSTITUTIONAL
CLASS SHARES) TO OCTOBER 31, 1995.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1998
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Growth Opportunities Fund (the fund) is a fund of
Fidelity Advisor Series I(the trust) and is authorized to issue an
unlimited number of shares. The trust is registered under the
Investment Company Act of 1940, as amended (the 1940 Act), as an
open-end management investment company organized as a Massachusetts
business trust.
The fund offers Class A, Class T, Class B, Class C and Institutional
Class shares, each of which has equal rights as to assets and voting
privileges. Class B shares will automatically convert to Class A
shares after a holding period of seven years from the initial date of
purchase. Each class has exclusive voting rights with respect to
matters that affect that class. Investment income, realized and
unrealized capital gains and losses, the common expenses of the fund,
and certain fund-level expense reductions, if any, are allocated on a
pro rata basis to each class based on the relative net assets of each
class to the total net assets of the fund. Each class of shares
differs in its respective distribution, transfer agent, and certain
other class-specific fees, expenses, and expense reductions.
The financial statements have been prepared in conformity with
generally accepted accounting principles which require management to
make certain estimates and assumptions at the date of the financial
statements. The following summarizes the significant accounting
policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Securities for which exchange
quotations are not readily available (and in certain cases debt
securities which trade on an exchange) are valued primarily using
dealer-supplied valuations or at their fair value as determined in
good faith under consistently applied procedures under the general
supervision of the Board of Trustees. Short-term securities with
remaining maturities of sixty days or less for which quotations are
not readily available are valued at amortized cost or original cost
plus accrued interest, both of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases
and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
and settlement date on purchases and sales of securities. The effects
of changes in foreign currency exchange rates on investments in
securities are included with the net realized and unrealized gain or
loss on investment securities.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent that it distributes substantially all of
its taxable income for its fiscal year. The schedule of investments
includes information regarding income taxes under the caption "Income
Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend
date, except certain dividends from foreign securities where the
ex-dividend date may have passed, are recorded as soon as the fund is
informed of the ex-dividend date. Non-cash dividends included in
dividend income, if any, are recorded at the fair market value of the
securities received. Interest income, which includes accretion of
original issue discount, is accrued as earned. Investment income is
recorded net of foreign taxes withheld where recovery of such taxes is
uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
DEFERRED TRUSTEE COMPENSATION. Under a Deferred Compensation Plan (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
compensation. Deferred amounts are treated as though equivalent dollar
amounts had been invested in shares of the fund or are invested in a
cross-section of other Fidelity funds. Deferred amounts remain in the
fund until distributed in accordance with the Plan.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date. Income dividends and capital gain distributions are
declared separately for each class.
Income and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. These differences, which may result in
distribution reclassifications, are primarily due to differing
treatments for litigation proceeds, foreign currency transactions,
passive foreign investment companies (PFIC), partnerships and losses
deferred due to wash sales. The fund also utilized earnings and
profits distributed to shareholders on redemption of shares as a part
of the dividends paid deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Undistributed net investment income and accumulated undistributed net
realized gain (loss) on investments and foreign currency transactions
may include temporary book and tax basis differences which will
reverse in a subsequent period. Any taxable income or gain remaining
at fiscal year end is distributed in the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the contracts'
terms. The U.S. dollar value of foreign currency contracts is
determined using contractual currency exchange rates established at
the time of each trade.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with
other affiliated entities of FMR, may transfer uninvested cash
balances into one or more joint trading accounts. These balances are
invested in one or more repurchase agreements for U.S. Treasury or
Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are
marked-to-market daily and maintained at a value at least equal to the
principal amount of the repurchase agreement (including accrued
interest). FMR, the fund's investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
TAXABLE CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by
the SEC, the fund may invest in the Taxable Central Cash Fund (the
Cash Fund) managed by Fidelity Investments Money Management, Inc., an
affiliate of FMR. The Cash Fund is an open-end money market fund
available only to investment companies and other accounts managed by
FMR and its affiliates. The Cash Fund seeks preservation of capital,
liquidity, and current income by investing in U.S. Treasury securities
and repurchase agreements for these securities. Income distributions
from the Cash Fund are declared daily and paid monthly from net
interest income. Income distributions earned by the fund are recorded
as interest income in the accompanying financial statements.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $7,644,473,000 and $5,839,458,000, respectively, of which
U.S. government and government agency obligations aggregated
$166,298,000 and $490,060,000, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment advisor FMR receives a
monthly basic fee that is calculated on the basis of a group fee rate
plus a fixed individual fund fee rate applied to the average net
assets of the fund. The group fee rate is the weighted average of a
series of rates and is based on the monthly average net assets of all
the mutual funds advised by FMR. The rates ranged from .2500% to
.5200% for the period. The annual individual fund fee rate is .30%. In
the event that these rates were lower than the contractual rates in
effect during the period, FMR voluntarily implemented the above rates,
as they resulted in the same or a lower management fee. The basic fee
is subject to a performance adjustment (up to a maximum of
(plus/minus).20% of the fund's average net assets over the performance
period) based on the fund's investment performance of the
asset-weighted average return of all classes as compared to the
appropriate index over a specified period of time. For the period, the
management fee was equivalent to an annual rate of .46% of average net
assets after the performance adjustment.
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the
1940 Act, the Trustees have adopted separate distribution plans with
respect to each class of shares (collectively referred to as "the
Plans"). Under certain of the Plans, the class pays Fidelity
Distributors Corporation (FDC), an affiliate of FMR, a distribution
and service fee. A portion of this fee may be reallowed to securities
dealers, banks and other financial institutions for the distribution
of each class of shares and providing shareholder support services.
For the period, this fee was based on the following annual rates of
the average net assets of each applicable class:
CLASS A .25%
CLASS T .50%
CLASS B 1.00% *
CLASS C 1.00% *
* .75% REPRESENTS A DISTRIBUTION FEE AND .25% REPRESENTS A SHAREHOLDER
SERVICE FEE.
For the period, each class paid FDC the following amounts, a portion
of which was retained by FDC:
PAID TO FDC RETAINED BY FDC
CLASS A $ 637,000 $ 2,000
CLASS T 113,729,000 1,187,000
CLASS B 9,236,000 6,929,000
CLASS C 1,456,000 1,450,000
$ 125,058,000 $ 9,568,000
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
DISTRIBUTION AND SERVICE PLAN - CONTINUED
Under the Plans, FMR may use its resources to pay administrative and
promotional expenses related to the sale of each class' shares. The
Plans also authorize payments to third parties that assist in the sale
of each class' shares or render shareholder support services. For the
period, the following amounts were paid to third parties under the
Plans:
CLASS A $ 103,000
CLASS T 1,832,000
CLASS B 178,000
CLASS C 124,000
INSTITUTIONAL CLASS 35,000
$ 2,272,000
SALES LOAD. FDC receives a front-end sales charge of up to 5.75% for
selling Class A shares, and 3.50% for selling Class T shares of the
fund. FDC receives the proceeds of contingent deferred sales charges
levied on Class B share redemptions occurring within six years of
purchase and on Class C share redemptions occurring within one year of
purchase. Contingent deferred sales charges are based on declining
rates ranging from 5% to 1% for Class B and 1% for Class C, of the
lesser of the cost of shares at the initial date of purchase or the
net asset value of the redeemed shares, excluding any reinvested
dividends and capital gains. In addition, purchases of Class A and
Class T shares that were subject to a finder's fee bear a contingent
deferred sales charge on assets that do not remain in the fund for at
least one year. The Class A and Class T contingent deferred sales
charge is based on 0.25% of the lesser of the cost of shares at the
initial date of purchase or the net asset value of the redeemed
shares, excluding any reinvested dividends and capital gains. A
portion of the sales charges paid to FDC are paid to securities
dealers, banks and other financial institutions.
For the period, sales charge amounts paid to and retained by FDC were
as follows:
PAID TO FDC RETAINED BY FDC
CLASS A $ 3,082,000 $ 1,252,000
CLASS T 11,634,000 4,534,000
CLASS B 1,990,000 1,990,000 *
CLASS C 98,000 98,000 *
$ 16,804,000 $ 7,874,000
* WHEN CLASS B AND CLASS C SHARES ARE INITIALLY SOLD, FDC PAYS
COMMISSIONS FROM ITS OWN RESOURCES TO SECURITIES DEALERS,
BANKS, AND OTHER FINANCIAL INSTITUTIONS THROUGH WHICH THE SALES ARE
MADE.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
TRANSFER AGENT FEES. Fidelity Investments Institutional Operations
Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend
disbursing and shareholder servicing agent for each class of the fund.
FIIOC receives account fees and asset-based fees that vary according
to the account size and type of account of the shareholders of the
respective classes of the fund. FIIOC pays for typesetting, printing
and mailing of all shareholder reports, except proxy statements. For
the period, the following amounts were paid to FIIOC :
AMOUNT % OF AVERAGE NET ASSETS
CLASS A $ 606,000 .24
CLASS T 37,011,000 .16
CLASS B 2,192,000 .24
CLASS C 320,000 .22
INSTITUTIONAL CLASS 704,000 .14
$ 40,833,000
ACCOUNTING FEES. Fidelity Service Company, Inc., an affiliate of FMR,
maintains the fund's accounting records. The fee is based on the level
of average net assets for the month plus out-of-pocket expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $1,573,000 for the
period.
5. EXPENSE REDUCTIONS.
FMR has directed certain portfolio trades to brokers who paid a
portion of the fund's expenses. For the period, the fund's expenses
were reduced by $1,683,000 under this arrangement.
In addition, the fund has entered into arrangements with its custodian
and each class' transfer agent whereby credits realized as a result of
uninvested cash balances were used to reduce a portion of expenses.
During the period, the fund's custodian fees were reduced by $6,000
under the custodian arrangement, and each applicable class' expenses
were reduced as follows under the transfer agent arrangements:
TRANSFER AGENT CREDITS
CLASS T $ 112,000
6. BENEFICIAL INTEREST.
At the end of the period, one shareholder was record owner of
approximately 14% of the total outstanding shares of the fund.
7. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
YEAR ENDED NOVEMBER 30, MONTH ENDED NOVEMBER 30, YEAR ENDED OCTOBER 31,
1998 1997 1997
FROM NET INVESTMENT INCOME
Class A $ 1,998,000 $ - $ 340,000
Class T 217,401,000 - 219,398,000
Class B 4,810,000 - -
Class C 114,000 - -
Institutional Class 6,070,000 - 5,287,000
Total $ 230,393,000 $ - $ 225,025,000
FROM NET REALIZED GAIN
Class A $ 8,735,000 $ - $ 680,000
Class T 1,209,164,000 - 585,105,000
Class B 26,330,000 - -
Class C 675,000 - -
Institutional Class 23,289,000 - 10,724,000
Total $ 1,268,193,000 $ - $ 596,509,000
$ 1,498,586,000 $ - $ 821,534,000
</TABLE>
8. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
AMOUNTS IN THOUSANDS SHARES
YEAR ENDED NOVEMBER 30, ONE MONTH ENDED NOVEMBER 30, YEAR ENDED OCTOBER 31,
1998 1997 B 1997 A
CLASS A Shares sold 5,006 225 2,974
Reinvestment of distributions 245 - 27
Shares redeemed (1,215) (27) (244)
Net increase (decrease) 4,036 198 2,757
CLASS T Shares sold 100,805 6,519 116,907
Reinvestment of distributions 32,321 - 21,028
Shares redeemed (95,176) (4,329) (82,660)
Net increase (decrease) 37,950 2,190 55,275
CLASS B Shares sold 21,067 938 8,871
Reinvestment of distributions 667 - -
Shares redeemed (2,187) (40) (171)
Net increase (decrease) 19,547 898 8,700
CLASS C Shares sold 6,462 132
Reinvestment of distributions 15 -
Shares redeemed (506) -
Net increase (decrease) 5,971 132
INSTITUTIONAL CLASS Shares 6,993 219 6,006
sold
Reinvestment of distributions 595 - 346
Shares redeemed (4,004) (130) (4,658)
Net increase (decrease) 3,584 89 1,694
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
AMOUNTS IN THOUSANDS SHARES DOLLARS
YEAR ENDED NOVEMBER 30, ONE MONTH ENDED NOVEMBER 30, YEAR ENDED OCTOBER 31,
1998 1997 B 1997 A
CLASS A Shares sold $ 225,955 $ 9,817 $ 117,909
Reinvestment of distributions 10,085 - 980
Shares redeemed (55,006) (1,181) (9,793)
Net increase (decrease) $ 181,034 $ 8,636 $ 109,096
CLASS T Shares sold $ 4,546,813 $ 284,968 $ 4,556,363
Reinvestment of distributions 1,340,827 - 753,684
Shares redeemed (4,297,357) (188,917) (3,203,810)
Net increase (decrease) $ 1,590,283 $ 96,051 $ 2,106,237
CLASS B Shares sold $ 950,442 $ 40,834 $ 361,076
Reinvestment of distributions 27,524 - -
Shares redeemed (97,688) (1,738) (7,098)
Net increase (decrease) $ 880,278 $ 39,096 $ 353,978
CLASS C Shares sold $ 292,437 $ 5,792
Reinvestment of distributions 602 -
Shares redeemed (22,628) (12)
Net increase (decrease) $ 270,411 $ 5,780
INSTITUTIONAL CLASS Shares $ 319,599 $ 9,609 $ 232,509
sold
Reinvestment of distributions 24,612 - 12,382
Shares redeemed (180,998) (5,728) (176,171)
Net increase (decrease) $ 163,213 $ 3,881 $ 68,720
</TABLE>
A SHARE TRANSACTIONS FOR CLASS B ARE FOR THE PERIOD MARCH 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO OCTOBER 31, 1997.
B SHARE TRANSACTIONS FOR CLASS C ARE FOR THE PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO NOVEMBER 30, 1997.
9. REGISTRATION FEES.
For the period, each class paid the following amounts to register its
shares for sale:
REGISTRATION FEES
CLASS A $ 38,000
CLASS T 1,145,000
CLASS B 73,000
CLASS C 37,000
INSTITUTIONAL CLASS 39,000
$ 1,332,000
10. TRANSACTIONS WITH AFFILIATED COMPANIES.
An affiliated company is a company in which the fund has ownership of
at least 5% of the voting securities. Transactions during the period
with companies which are or were affiliates are as follows:
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES
PERIOD ENDED NOVEMBER 30, 1998
AMOUNTS IN THOUSANDS
PURCHASE SALES DIVIDEND VALUE
AFFILIATE COST COST INCOME
AmeriSource Health Corp. Class A $ 14,974 $ - $ - $ 84,154
Burlington Industries, Inc. 25,617 - - 57,348
Cherry Corp. Class B - - - -
Cummins Engine Co., Inc. - - 594 80,223
Discount Auto Parts, Inc. 7,952 - - 31,758
Fleetwood Enterprises, Inc. - 6,227 - -
Kaufman & Broad Home Corp. 9,845 - 842 75,933
LAM Research Corp. - - - 37,725
Liz Claiborne, Inc. 35,090 - 1,280 148,217
MGIC Investment Corp. 3,496 - 140 246,371
Policy Management Systems Corp. - 1,712 - -
Revlon, Inc. Class A 4,609 - - 26,694
SCI Systems, Inc. 24,371 - - 189,010
Solectron Corp. 61,636 - - 583,118
Ultratech Stepper, Inc. 8,590 - - 31,588
TOTALS $ 196,180 $ 7,939 $ 2,856 $ 1,592,139
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Advisor Series I and the Shareholders of
Fidelity Advisor Growth Opportunities Fund:
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of
Fidelity Advisor Growth Opportunities Fund (a fund of Fidelity Advisor
Series I) at November 30, 1998, and the results of its operations, the
changes in its net assets and the financial highlights for the periods
indicated, in conformity with generally accepted accounting
principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the
responsibility of the Fidelity Advisor Growth Opportunities Fund's
management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of
these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which
included confirmation of securities at November 30, 1998 by
correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
January 13, 1999
DISTRIBUTIONS
The Board of Trustees of Fidelity Advisor Growth Opportunities Fund
voted to pay to shareholders of record at the opening of business on
record date, the following distributions derived from capital gains
realized from sales of portfolio securities, and dividends derived
from net investment income:
INSTITUTIONAL CLASS
PAY DATE 12/15/97 1/5/98 12/14/98 1/11/99
RECORD DATE 12/12/97 1/2/98 12/11/98 1/8/99
DIVIDENDS $0.68 - $0.60 -
SHORT-TERM
CAPITAL GAINS $0.79 - - -
LONG-TERM
CAPITAL GAINS $1.60 $0.21 $1.66 $0.03
LONG-TERM
CAPITAL GAIN PERCENTAGE:
28% rate 57.08% - - -
20% rate 42.92% 100% 100% 100%
A total of 14.66% of the dividends distributed during the fiscal year
was derived from interest on U.S. Government securities which is
generally exempt from state income tax.
A total of 6% of the dividends distributed during the fiscal year
for the Institutional Class qualifies for the dividends-received
deduction for corporate shareholders.
The fund will notify shareholders in January 1999 of the applicable
percentages for use in preparing 1998 income tax returns.
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.)
Inc., London, England
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Abigail P. Johnson, Vice President
George A. Vanderheiden, Vice President
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
* INDEPENDENT TRUSTEES
ADVISORY BOARD
J. Gary Burkhead
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA
CUSTODIAN
Brown Brothers Harriman & Co.
Boston, MA
FOCUS FUNDS
Fidelity Advisor Consumer
Industries Fund
Fidelity Advisor Cyclical
Industries Fund
Fidelity Advisor Financial
Services Fund
Fidelity Advisor Health Care Fund
Fidelity Advisor Natural
Resources Fund
Fidelity Advisor Technology Fund
Fidelity Advisor Utilities Growth Fund
GROWTH FUNDS
Fidelity Advisor Latin America Fund
Fidelity Advisor Japan Fund
Fidelity Advisor Europe Capital Appreciation Fund
Fidelity Advisor International Capital Appreciation Fund
Fidelity Advisor Overseas Fund
Fidelity Advisor Diversified International Fund
Fidelity Advisor Global Equity Fund
Fidelity Advisor TechnoQuant
Growth Fund
SM
Fidelity Advisor Small Cap Fund
Fidelity Advisor Strategic
Opportunities Fund
Fidelity Advisor Mid Cap Fund
Fidelity Advisor Retirement
Growth Fund
Fidelity Advisor Equity Growth Fund
Fidelity Advisor Large Cap Fund
Fidelity Advisor Dividend Growth Fund
Fidelity Advisor Growth
Opportunities Fund
GROWTH AND INCOME FUNDS
Fidelity Advisor Growth & Income Fund
Fidelity Advisor Equity Income Fund
Fidelity Advisor Asset Allocation Fund
Fidelity Advisor Balanced Fund
TAXABLE INCOME FUNDS
Fidelity Advisor Emerging Markets Income Fund
Fidelity Advisor High Yield Fund
Fidelity Advisor Strategic Income Fund
Fidelity Advisor Mortgage
Securities Fund
Fidelity Advisor Government Investment Fund
Fidelity Advisor Intermediate Bond Fund
Fidelity Advisor Short Fixed-Income Fund
MUNICIPAL FUNDS
Fidelity Advisor Municipal Income Fund
Fidelity Advisor Intermediate Municipal Income Fund
MONEY MARKET FUNDS
Prime Fund
Treasury Fund
Tax-Exempt Fund
(registered trademark)
(2_FIDELITY_LOGOS)FIDELITY ADVISOR
(REGISTERED TRADEMARK)
LARGE CAP
FUND - CLASS A, CLASS T, CLASS B AND CLASS C
ANNUAL REPORT
NOVEMBER 30, 1998
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over
time.
FUND TALK 12 The manager's review of fund
performance, strategy and
outlook.
INVESTMENT CHANGES 15 A summary of major shifts in
the fund's investments over
the past six months.
INVESTMENTS 16 A complete list of the fund's
investments with their
market values.
FINANCIAL STATEMENTS 24 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 33 Notes to the financial
statements.
REPORT OF INDEPENDENT 42 The auditors' opinion.
ACCOUNTANTS
DISTRIBUTIONS 43
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION
OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS
IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT
INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY ADVISOR FUND, INCLUDING CHARGES
AND EXPENSES, CONTACT YOUR
INVESTMENT PROFESSIONAL FOR A FREE PROSPECTUS. READ IT CAREFULLY
BEFORE YOU INVEST OR SEND MONEY.
Standard & Poor's, S&P and S&P 500 are registered service marks of The
McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity
Distributors Corporation.
Other third party marks appearing herein are the property of their
respective owners.
All other marks appearing herein are registered or unregistered
trademarks or service marks of FMR Corp. or an affiliated company.
This report is printed on recycled paper using soy-based inks.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
The month of November proved to be a strong one for the stock and bond
markets. The Dow Jones Industrial Average reached a record high.
Merger activity, which had lulled during the summer correction, has
increased significantly. Small-cap stocks posted their third
consecutive month of positive returns, as did emerging markets. While
bond returns generally were not at the levels of their equity
counterparts, they were mostly positive nonetheless.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will
greatly reduce your vulnerability to any single decline. We know from
experience, for example, that stock prices have gone up over longer
periods of time, have significantly outperformed other types of
investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through
diversification. A stock mutual fund, for instance, is already
diversified, because it invests in many different companies. You can
increase your diversification further by investing in a number of
different stock funds, or in such other investment categories as
bonds. If you have a short investment time horizon, you might want to
consider moving some of your investment into a money market fund,
which seeks income and a stable share price by investing in
high-quality, short-term investments. Of course, it's important to
remember that there is no assurance that a money market fund will
achieve its goal of maintaining a stable net asset value of $1.00 per
share, and that these types of funds are neither insured nor
guaranteed by any agency of the U.S. government.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases. Of course, you should
consider your financial ability to continue your purchases through
periods of low price levels before undertaking such a strategy.
Remember to contact your investment professional if you need help with
your investments.
Best regards,
Edward C. Johnson 3d
FIDELITY ADVISOR LARGE CAP FUND - CLASS A
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can
look at the total percentage change in value, the average annual
percentage change or the growth of a hypothetical $10,000 investment.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). The initial offering of Class A shares took place on September
3, 1996. Class A shares bear a 0.25% 12b-1 fee that is reflected in
returns after September 3, 1996. Returns prior to September 3, 1996
are those of Class T and reflect Class T shares' 0.50% 12b-1 fee. If
Fidelity had not reimbursed certain class expenses, the total returns
would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR LIFE OF FUND
1998
FIDELITY ADV LARGE CAP - CL A 26.69% 78.09%
FIDELITY ADV LARGE CAP - CL A 19.41% 67.85%
(INCL. 5.75% SALES CHARGE)
S&P 500 (registered trademark) 23.66% 91.10%
Growth Funds Average 14.32% n/a
CUMULATIVE TOTAL RETURNS show Class A's performance in percentage
terms over a set period - in this case, one year or since the fund
started on February 20, 1996. For example, if you had invested $1,000
in a fund that had a 5% return over the past year, the value of your
investment would be $1,050. You can compare Class A's returns to the
performance of the Standard & Poor's 500 Index - a widely recognized,
market capitalization-weighted index of common stocks. To measure how
Class A's performance stacked up against its peers, you can compare it
to the growth funds average, which reflects the performance of mutual
funds with similar objectives tracked by Lipper Analytical Services,
Inc. The past one year average represents a peer group of 961 mutual
funds. These benchmarks include reinvested dividends and capital
gains, if any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR LIFE OF FUND
1998
FIDELITY ADV LARGE CAP - CL A 26.69% 23.09%
FIDELITY ADV LARGE CAP - CL A 19.41% 20.49%
(INCL. 5.75% SALES CHARGE)
S&P 500 23.66% 26.25%
Growth Funds Average 14.32% n/a
AVERAGE ANNUAL RETURNS take Class A's cumulative return and show you
what
would have happened if Class A had performed at a constant rate each
year.
$10,000 OVER LIFE OF FUND
FA Large Cap -CL A S&P 500
00250 SP001
1996/02/20 9425.00 10000.00
1996/02/29 9453.28 10003.76
1996/03/31 9481.55 10100.10
1996/04/30 9547.53 10248.98
1996/05/31 9745.45 10513.30
1996/06/30 9792.58 10553.35
1996/07/31 9321.33 10087.11
1996/08/31 9622.93 10299.84
1996/09/30 10273.25 10879.52
1996/10/31 10386.35 11179.57
1996/11/30 11149.78 12024.64
1996/12/31 10885.74 11786.43
1997/01/31 11435.96 12522.85
1997/02/28 11236.66 12621.03
1997/03/31 10648.25 12102.43
1997/04/30 11132.27 12824.94
1997/05/31 11863.03 13605.73
1997/06/30 12280.61 14215.26
1997/07/31 13210.67 15346.37
1997/08/31 12736.15 14486.67
1997/09/30 13409.97 15280.10
1997/10/31 12906.98 14769.75
1997/11/30 13248.63 15453.44
1997/12/31 13472.27 15718.77
1998/01/31 13553.08 15892.62
1998/02/28 14593.29 17038.80
1998/03/31 15269.93 17911.36
1998/04/30 15370.92 18091.54
1998/05/31 15078.05 17780.55
1998/06/30 15997.07 18502.80
1998/07/31 16027.37 18305.74
1998/08/31 13643.97 15659.10
1998/09/30 14764.97 16662.22
1998/10/31 15744.59 18017.52
1998/11/30 16784.81 19109.57
IMATRL PRASUN SHR__CHT 19981130 19981214 162157 R00000000000037
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Large Cap Fund - Class A on February 20,
1996, when the fund started, and the current 5.75% sales charge was
paid. As the chart shows, by November 30, 1998, the value of the
investment would have grown to $16,785 - a 67.85% increase on the
initial investment. For comparison, look at how the Standard & Poor's
500 Index did over the same period. With dividends and capital gains,
if any, reinvested, the same $10,000 investment would have grown to
$19,110 - a 91.10% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
long-term growth and
short-term volatility. In turn, the
share price and return of a
fund that invests in stocks will
vary. That means if you sell
your shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
FIDELITY ADVISOR LARGE CAP FUND - CLASS T
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can
look at the total percentage change in value, the average annual
percentage change or the growth of a hypothetical $10,000 investment.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). If Fidelity had not reimbursed certain class expenses, the
life of fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR LIFE OF FUND
1998
FIDELITY ADV LARGE CAP - CL T 26.77% 78.15%
FIDELITY ADV LARGE CAP - CL T 22.34% 71.92%
(INCL. 3.50% SALES CHARGE)
S&P 500 23.66% 91.10%
Growth Funds Average 14.32% n/a
CUMULATIVE TOTAL RETURNS show Class T's performance in percentage
terms over a set period - in this case, one year or since the fund
started on February 20, 1996. For example, if you had invested $1,000
in a fund that had a 5% return over the past year, the value of your
investment would be $1,050. You can compare Class T's returns to the
performance of the Standard & Poor's 500 Index - a widely recognized,
market capitalization-weighted index of common stocks. To measure how
Class T's performance stacked up against its peers, you can compare it
to the growth funds average, which reflects the performance of mutual
funds with similar objectives tracked by Lipper Analytical Services,
Inc. The past one year average represents a peer group of 961 mutual
funds. These benchmarks include reinvested dividends and capital
gains, if any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR LIFE OF FUND
1998
FIDELITY ADV LARGE CAP - CL T 26.77% 23.11%
FIDELITY ADV LARGE CAP - CL T 22.34% 21.54%
(INCL. 3.50% SALES CHARGE)
S&P 500 23.66% 26.25%
Growth Funds Average 14.32% n/a
AVERAGE ANNUAL RETURNS take Class T's cumulative return and show you
what would have happened if Class T
had performed at a constant rate each year.
$10,000 OVER LIFE OF FUND
FA Large Cap -CL T S&P 500
00534 SP001
1996/02/20 9650.00 10000.00
1996/02/29 9678.95 10003.76
1996/03/31 9707.90 10100.10
1996/04/30 9775.45 10248.98
1996/05/31 9978.10 10513.30
1996/06/30 10026.35 10553.35
1996/07/31 9543.85 10087.11
1996/08/31 9852.65 10299.84
1996/09/30 10518.50 10879.52
1996/10/31 10634.30 11179.57
1996/11/30 11406.30 12024.64
1996/12/31 11135.97 11786.43
1997/01/31 11698.46 12522.85
1997/02/28 11494.76 12621.03
1997/03/31 10893.34 12102.43
1997/04/30 11388.05 12824.94
1997/05/31 12144.67 13605.73
1997/06/30 12561.78 14215.26
1997/07/31 13522.10 15346.37
1997/08/31 13046.79 14486.67
1997/09/30 13735.51 15280.10
1997/10/31 13221.40 14769.75
1997/11/30 13560.90 15453.44
1997/12/31 13788.50 15718.77
1998/01/31 13871.01 15892.62
1998/02/28 14953.87 17038.80
1998/03/31 15655.16 17911.36
1998/04/30 15747.98 18091.54
1998/05/31 15459.21 17780.55
1998/06/30 16397.70 18502.80
1998/07/31 16428.64 18305.74
1998/08/31 13984.45 15659.10
1998/09/30 15129.20 16662.22
1998/10/31 16129.56 18017.52
1998/11/30 17191.80 19109.57
IMATRL PRASUN SHR__CHT 19981130 19981214 163024 R00000000000037
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Large Cap Fund - Class T on February 20,
1996, when the fund started, and the current 3.50% sales charge was
paid. As the chart shows, by November 30, 1998, the value of the
investment would have grown to $17,192 - a 71.92% increase on the
initial investment. For comparison, look at how the Standard & Poor's
500 Index did over the same period. With dividends and capital gains,
if any, reinvested, the same $10,000 investment would have grown to
$19,110 - a 91.10% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
long-term growth and
short-term volatility. In turn, the
share price and return of a
fund that invests in stocks will
vary. That means if you sell
your shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
FIDELITY ADVISOR LARGE CAP FUND - CLASS B
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can
look at the total percentage change in value, the average annual
percentage change or the growth of a hypothetical $10,000 investment.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). Class B shares' contingent deferred sales charge included in
the past one year and the life of fund total return figures are 5% and
3%, respectively. If Fidelity had not reimbursed certain class
expenses, the life of fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR LIFE OF FUND
1998
FIDELITY ADV LARGE CAP - CL B 26.15% 75.48%
FIDELITY ADV LARGE CAP - CL B 21.15% 72.48%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 23.66% 91.10%
Growth Funds Average 14.32% n/a
CUMULATIVE TOTAL RETURNS show Class B's performance in percentage
terms over a set period - in this case, one year or since the fund
started on February 20, 1996. For example, if you had invested $1,000
in a fund that had a 5% return over the past year, the value of your
investment would be $1,050. You can compare Class B's returns to the
performance of the Standard & Poor's 500 Index - a widely recognized,
market capitalization-weighted index of common stocks. To measure how
Class B's performance stacked up against its peers, you can compare it
to the growth funds average, which reflects the performance of mutual
funds with similar objectives tracked by Lipper Analytical Services,
Inc. The past one year average represents a peer group of 961 mutual
funds. These benchmarks include reinvested dividends and capital
gains, if any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR LIFE OF FUND
1998
FIDELITY ADV LARGE CAP - CL B 26.15% 22.44%
FIDELITY ADV LARGE CAP - CL B 21.15% 21.68%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 23.66% 26.25%
Growth Funds Average 14.32% n/a
AVERAGE ANNUAL RETURNS take Class B's cumulative return and show you
what
would have happened if Class B had performed at a constant rate each
year.
$10,000 OVER LIFE OF FUND
FA Large Cap -CL B S&P 500
00535 SP001
1996/02/20 10000.00 10000.00
1996/02/29 10020.00 10003.76
1996/03/31 10060.00 10100.10
1996/04/30 10120.00 10248.98
1996/05/31 10330.00 10513.30
1996/06/30 10370.00 10553.35
1996/07/31 9860.00 10087.11
1996/08/31 10180.00 10299.84
1996/09/30 10860.00 10879.52
1996/10/31 10970.00 11179.57
1996/11/30 11770.00 12024.64
1996/12/31 11479.86 11786.43
1997/01/31 12052.28 12522.85
1997/02/28 11831.32 12621.03
1997/03/31 11218.67 12102.43
1997/04/30 11720.85 12824.94
1997/05/31 12484.16 13605.73
1997/06/30 12916.03 14215.26
1997/07/31 13890.26 15346.37
1997/08/31 13398.12 14486.67
1997/09/30 14101.17 15280.10
1997/10/31 13568.86 14769.75
1997/11/30 13910.34 15453.44
1997/12/31 14144.86 15718.77
1998/01/31 14219.32 15892.62
1998/02/28 15325.39 17038.80
1998/03/31 16037.95 17911.36
1998/04/30 16123.03 18091.54
1998/05/31 15825.25 17780.55
1998/06/30 16771.78 18502.80
1998/07/31 16793.05 18305.74
1998/08/31 14283.14 15659.10
1998/09/30 15453.01 16662.22
1998/10/31 16463.36 18017.52
1998/11/30 17248.00 19109.57
IMATRL PRASUN SHR__CHT 19981130 19981223 114742 R00000000000037
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Large Cap Fund - Class B on February 20,
1996, when the fund started. As the chart shows, by November 30, 1998,
the value of the investment, including the effect of the applicable
contingent deferred sales charge, would have been $17,248 - a 72.48%
increase on the initial investment. For comparison, look at how the
Standard & Poor's 500 Index did over the same period. With dividends
and capital gains, if any, reinvested, the same $10,000 investment
would have grown to $19,110 - a 91.10% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
long-term growth and
short-term volatility. In turn, the
share price and return of a
fund that invests in stocks will
vary. That means if you sell
your shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
FIDELITY ADVISOR LARGE CAP FUND - CLASS C
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can
look at the total percentage change in value, the average annual
percentage change or the growth of a hypothetical $10,000 investment.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). The initial offering of Class C shares took place on November
3, 1997. Class C shares bear a 1.00% 12b-1 fee. Returns between
February 20, 1996 and November 3, 1997 are those of Class B, and
reflect Class B shares' 1.00% 12b-1 fee. Class C shares' contingent
deferred sales charge included in the past one year and the life of
fund total return figure is 1% and 0%, respectively. If Fidelity had
not reimbursed certain class expenses, the total returns would have
been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR LIFE OF FUND
1998
FIDELITY ADV LARGE CAP - CL C 25.79% 74.98%
FIDELITY ADV LARGE CAP - CL C 24.79% 74.98%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 23.66% 91.10%
Growth Funds Average 14.32% n/a
CUMULATIVE TOTAL RETURNS show Class C's performance in percentage
terms over a set period - in this case, one year or since the fund
started on February 20, 1996. For example, if you had invested $1,000
in a fund that had a 5% return over the past year, the value of your
investment would be $1,050. You can compare Class C's returns to the
performance of the Standard & Poor's 500 Index - a widely recognized,
market capitaliztion-weighted index of common stocks. To measure how
Class C's performance stacked up against its peers, you can compare it
to the growth funds average, which reflects the performance of mutual
funds with similar objectives tracked by Lipper Analytical Services,
Inc. The past one year average represents a peer group of 961 mutual
funds. These benchmarks include reinvested dividends and capital
gains, if any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR LIFE OF FUND
1998
FIDELITY ADV LARGE CAP - CL C 25.79% 22.31%
FIDELITY ADV LARGE CAP - CL C 24.79% 22.31%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P 500 23.66% 26.25%
Growth Funds Average 14.32% n/a
AVERAGE ANNUAL RETURNS take Class C's cumulative return and show you
what
would have happened if Class C had performed at a constant rate each
year.
$10,000 OVER LIFE OF FUND
FA Large Cap -CL C S&P 500
00483 SP001
1996/02/20 10000.00 10000.00
1996/02/29 10020.00 10003.76
1996/03/31 10060.00 10100.10
1996/04/30 10120.00 10248.98
1996/05/31 10330.00 10513.30
1996/06/30 10370.00 10553.35
1996/07/31 9860.00 10087.11
1996/08/31 10180.00 10299.84
1996/09/30 10860.00 10879.52
1996/10/31 10970.00 11179.57
1996/11/30 11770.00 12024.64
1996/12/31 11479.86 11786.43
1997/01/31 12052.28 12522.85
1997/02/28 11831.32 12621.03
1997/03/31 11218.67 12102.43
1997/04/30 11720.85 12824.94
1997/05/31 12484.16 13605.73
1997/06/30 12916.03 14215.26
1997/07/31 13890.26 15346.37
1997/08/31 13398.12 14486.67
1997/09/30 14101.17 15280.10
1997/10/31 13568.86 14769.75
1997/11/30 13910.25 15453.44
1997/12/31 14133.78 15718.77
1998/01/31 14218.42 15892.62
1998/02/28 15329.23 17038.80
1998/03/31 16027.46 17911.36
1998/04/30 16112.09 18091.54
1998/05/31 15815.87 17780.55
1998/06/30 16746.84 18502.80
1998/07/31 16768.00 18305.74
1998/08/31 14260.73 15659.10
1998/09/30 15413.86 16662.22
1998/10/31 16418.88 18017.52
1998/11/30 17497.96 19109.57
IMATRL PRASUN SHR__CHT 19981130 19981214 162912 R00000000000037
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Large Cap Fund - Class C on February 20,
1996, when the fund started. As the chart shows, by November 30, 1998,
the value of the investment, would have been $17,498 - a 74.98%
increase on the initial investment. For comparison, look at how the
Standard & Poor's 500 Index did over the same period. With dividends
and capital gains, if any, reinvested, the same $10,000 investment
would have grown to $19,110 - a 91.10% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
long-term growth and
short-term volatility. In turn, the
share price and return of a
fund that invests in stocks will
vary. That means if you sell
your shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
When the final bell of the U.S. stock
market sounded on Monday,
November 23, 1998, the Dow
Jones Industrial Average stood at a
record high of 9374.27, serving
notice that the bleak economic
outlook from just a few short months
earlier would not keep positive
investor sentiment down. For the
12-month period ending November
30, 1998, the Dow - an index of
30 blue-chip stocks - returned
18.56%. What caused the
turnaround from the doldrums of
equity performance during the
summer and early fall? A variety of
factors: The economic problems in
Russia, Brazil and other emerging
markets began to dissipate; Asian
markets began to rebound; and,
perhaps most importantly, three
interest-rate cuts late in the period
by the Federal Reserve Board
helped stem the tide of a slowing
U.S. economy. All these factors
culminated in the Dow reaching its
record high late in November, a
peak that outpaced the previous
record set in July by nearly 40 points.
Small-cap stock performance was
still a far cry behind their large-cap
brethren. For the period, the Russell
2000 Index - a popular measure
of small-cap stock performance -
returned -6.62%, significantly
trailing the large-cap weighted
Standard & Poor's 500 Index's
return of 23.66%. Despite the late
rally in the equity market, this kind
of volatility has characterized the
entire year, and when it will level off
is impossible to predict.
An interview with Karen Firestone, Portfolio Manager of Fidelity
Advisor Large Cap Fund
Q. HOW DID THE FUND PERFORM, KAREN?
A. For the 12 months that ended November 30, 1998, the fund's Class A,
Class T, Class B and Class C shares returned 26.69%, 26.77%, 26.15%
and 25.79%, respectively. The growth funds average, as tracked by
Lipper Analytical Services, was up 14.32% for the same period, while
the Standard & Poor's 500 Index returned 23.66% over the past year.
Q. THE FUND'S STRONG RETURNS OVER THE PAST YEAR ARE NOT NECESSARILY
SURPRISING GIVEN THAT LARGE-CAPITALIZATION STOCKS GENERALLY
OUTPERFORMED THE REST OF THE MARKET OVER THAT PERIOD. THAT SAID, WHY
DID THE FUND PERFORM BETTER THAN THE S&P 500 INDEX AND SIGNIFICANTLY
BETTER THAN ITS PEERS?
A. Mostly for two reasons. First, I believe the fund had a larger
weighting in a number of the period's top-performing, large-cap stocks
than did its competitors and even, to some extent, than the S&P 500.
That's largely because when the market stumbled in July and August of
1998, many of my competitors became leery of large growth stocks with
high price-to-earnings ratios. As a result, I believe they sold out of
many of these stocks or reduced their weightings in them. I took the
opposite approach and continued to hold these stocks. In the very
short term, my peers made the right decision - these stocks were hit
the hardest as the market dropped. However, when the market picked up
in the following months, these stocks became the market leaders.
Because I held on to such rebounding stocks as pharmaceutical giant
Merck and Intel, the dominant name in the microprocessor business, the
fund got a boost relative to similar funds and the S&P 500.
Q. WHAT WAS THE SECOND REASON THE FUND DID SO WELL?
A. Good stock selection. In addition to my holdings in
very-large-capitalization stocks, I also owned a handful of
strong-performing smaller names that, as far as I know, most of my
competitors did not. For example, the fund benefited from its
investment in Dominick's Supermarket, a grocery store chain that was
acquired by Safeway during the period, and Internet and cable stocks.
Q. IN TERMS OF THE FUND'S VERY-LARGE-CAPITALIZATION STOCKS, WHAT
SPECIFIC HOLDINGS HELPED THE FUND THE MOST?
A. In general, the fund benefited the most from its top-10 holdings in
the health care, communications and technology sectors. As I just
noted, pharmaceutical company Merck saw strong revenue growth in the
third quarter. Another top-10 holding in the health care sector,
Pfizer, also helped the fund. After Pfizer introduced Viagra and the
company recovered from initial profit estimates that were too high, I
significantly increased the fund's holdings in this company. In terms
of communication stocks, the recently merged company MCI WorldCom -
the biggest player in the new age of communications - enjoyed a strong
year of outperformance. In technology, Intel generated a huge amount
of cash flow, and Microsoft saw strong growth and excellent profit
margins over the period. Outside of these sectors, top-10 holding
General Electric benefited from excellent management, continued strong
market share, margin improvements and a solid performance by its
financial services division. It is well positioned in all segments of
its business - from finance to appliances.
Q. DID YOU REGRET ANY OF THE INVESTMENT DECISIONS YOU MADE OVER THE
PERIOD?
A. Sure. For instance, I wish I had bought more technology stocks -
especially PC manufacturer Dell and computer networking company Cisco
- - in the third quarter when prices were low.
Q. KAREN, WHAT'S YOUR OUTLOOK FOR THE FUND?
A. My goal is to remain positioned in sectors and specific stocks that
achieve higher growth in sales and earnings than the S&P 500 index.
Short term, I need to and expect to focus on a market that is showing
rapid group rotation. By this I mean that in the current market,
investors love pharmaceutical stocks one week, then three weeks later
these stocks are out of favor and retail stocks, for instance, are
strong. The swings in prices can be extreme, so I have to be nimble
and anticipate these changes in market direction. Going forward, I
plan to modify the fund's holdings for the short term based on market
conditions, without losing site of its long-term goals.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
KAREN FIRESTONE ON THE
FUND'S FOREIGN EXPOSURE:
"In general, I tend to invest
approximately five to seven
percent of the fund in foreign
companies. Of course, it's
important to keep in mind that many
large-capitalization companies have
broad international interests.
Therefore, the fund has some
additional foreign exposure
related to these holdings.
"The foreign stocks that were the
standouts over this period were
mostly located in Europe.
SmithKline Beecham, a British
pharmaceutical company, and
Castorama, a French superstore
similar to Home Depot, both
turned in strong results.
"The fund has never had any large,
direct exposure to Asian
companies, although some of the
fund's large technology stocks
were hurt - at least in the short
term - by slowing demand in
that part of the world. Currently, I
am seeking what I consider to be
an appropriate level of risk on
several investments in Asia. In
some cases, I think lower stock
prices justify a higher risk level."
FUND FACTS
GOAL: to seek long-term
growth of capital by investing
primarily in companies with
market capitalization greater
than $1 billion at the time
of investment
START DATE: February 20,
1996
SIZE: as of November 30,
1998, more than $136
million
MANAGER: Karen Firestone,
since April 1998; joined
Fidelity in 1983
(checkmark)
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF NOVEMBER
30, 1998
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE STOCKS 6 MONTHS AGO
General Electric Co. 3.4 4.3
Microsoft Corp. 3.4 2.7
Intel Corp. 2.9 1.7
Pfizer, Inc. 2.5 0.8
Philip Morris Companies, Inc. 2.5 1.4
Merck & Co., Inc. 2.4 2.7
Coca-Cola Co. (The) 2.0 3.0
Lilly (Eli) & Co. 1.9 0.4
Bristol-Myers Squibb Co. 1.9 2.7
MCI WorldCom, Inc. 1.8 2.1
TOP FIVE MARKET SECTORS AS OF
NOVEMBER 30, 1998
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE MARKET SECTORS 6
MONTHS AGO
TECHNOLOGY 22.4 18.4
HEALTH 21.9 17.7
NONDURABLES 12.8 10.8
FINANCE 9.7 11.8
RETAIL & WHOLESALE 7.1 8.0
</TABLE>
ASSET ALLOCATION (% OF FUND'S
INVESTMENTS)
AS OF NOVEMBER 30, 1998 * AS OF MAY 31, 1998 **
Row: 1, Col: 1, Value: 95.8
Row: 1, Col: 2, Value: 4.2
Stocks 96.9%
Short-term
investments 3.1%
FOREIGN
INVESTMENTS 7.9%
Stocks 95.8%
Short-term
investments 4.2%
FOREIGN
INVESTMENTS 5.8%
Row: 1, Col: 1, Value: 96.90000000000001
Row: 1, Col: 2, Value: 3.1
*
**
INVESTMENTS NOVEMBER 30, 1998
Showing Percentage of Total Value of Investment in Securities
<TABLE>
<CAPTION>
<S> <C> <C> <C>
COMMON STOCKS - 95.8%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 0.3%
Boeing Co. 9,800 $ 398,125
BASIC INDUSTRIES - 0.9%
CHEMICALS & PLASTICS - 0.5%
Monsanto Co. 15,100 684,219
PACKAGING & CONTAINERS - 0.4%
Owens-Illinois, Inc. (a) 17,140 550,623
TOTAL BASIC INDUSTRIES 1,234,842
DURABLES - 1.4%
AUTOS, TIRES, & ACCESSORIES -
0.2%
Honda Motor Co. Ltd. 4,100 297,250
sponsored ADR
CONSUMER ELECTRONICS - 0.3%
Black & Decker Corp. 7,900 428,081
HOME FURNISHINGS - 0.4%
Leggett & Platt, Inc. 22,000 499,125
TEXTILES & APPAREL - 0.5%
Boss (Hugo) AG 151 249,587
NIKE, Inc. Class B 11,500 460,000
709,587
TOTAL DURABLES 1,934,043
ENERGY - 3.0%
ENERGY SERVICES - 0.9%
Baker Hughes, Inc. 20,700 379,069
Halliburton Co. 12,800 376,000
Schlumberger Ltd. 9,800 437,938
1,193,007
OIL & GAS - 2.1%
British Petroleum Co. PLC ADR 4,900 451,413
Exxon Corp. 900 67,556
Royal Dutch Petroleum Co. (NY 6,700 314,900
Registry Gilder 1.25)
Texaco, Inc. 10,500 604,406
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
ENERGY - CONTINUED
OIL & GAS - CONTINUED
Total SA sponsored ADR 15,500 $ 947,438
USX-Marathon Group 14,800 419,950
2,805,663
TOTAL ENERGY 3,998,670
FINANCE - 9.7%
BANKS - 1.2%
AmSouth Bancorp 9,600 405,600
Bank of Ireland, Inc. 13,600 282,052
Bank of New York Co., Inc. 19,060 652,805
Bank One Corp. 6,800 348,925
1,689,382
CREDIT & OTHER FINANCE - 2.4%
American Express Co. 11,230 1,123,702
Associates First Capital 8,500 661,938
Corp.
Fleet Financial Group, Inc. 25,800 1,075,538
Household International, Inc. 8,890 347,821
3,208,999
FEDERAL SPONSORED CREDIT - 2.5%
Fannie Mae 27,570 2,005,718
Freddie Mac 22,900 1,385,450
3,391,168
INSURANCE - 2.7%
Ambac Financial Group, Inc. 9,100 555,100
American International Group, 9,600 902,400
Inc.
Hartford Financial Services 12,300 678,806
Group, Inc.
MGIC Investment Corp. 7,100 311,956
Progressive Corp. 4,700 697,363
UNUM Corp. 8,480 456,860
3,602,485
SAVINGS & LOANS - 0.9%
Charter One Financial, Inc. 19,005 564,211
Dime Bancorp, Inc. 22,400 595,000
1,159,211
TOTAL FINANCE 13,051,245
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
HEALTH - 21.9%
DRUGS & PHARMACEUTICALS - 17.2%
American Home Products Corp. 25,640 $ 1,365,330
Amgen, Inc. (a) 18,500 1,392,125
Bristol-Myers Squibb Co. 20,580 2,522,336
Elan Corp. PLC ADR (a) 12,000 817,500
Genentech, Inc. (special) (a) 7,700 539,481
Glaxo Wellcome PLC sponsored 12,100 768,350
ADR
Lilly (Eli) & Co. 28,800 2,583,000
Merck & Co., Inc. 21,070 3,263,216
Millennium Pharmaceuticals, 12,300 250,613
Inc. (a)
Pfizer, Inc. 30,500 3,404,563
Pharmacia & Upjohn, Inc. 22,100 1,150,581
Protein Design Labs, Inc. (a) 15,900 349,800
Schering-Plough Corp. 20,160 2,144,520
SmithKline Beecham PLC ADR 12,700 773,906
Warner-Lambert Co. 24,000 1,812,000
23,137,321
MEDICAL EQUIPMENT & SUPPLIES
- - 4.0%
Abbott Laboratories 23,700 1,137,600
Becton, Dickinson & Co. 8,000 340,000
Guidant Corp. 10,200 875,288
Johnson & Johnson 21,240 1,725,750
Medtronic, Inc. 17,700 1,198,069
5,276,707
MEDICAL FACILITIES MANAGEMENT
- - 0.7%
Health Management Associates, 28,288 613,496
Inc. Class A (a)
Humana, Inc. (a) 17,400 344,738
958,234
TOTAL HEALTH 29,372,262
INDUSTRIAL MACHINERY &
EQUIPMENT - 4.0%
ELECTRICAL EQUIPMENT - 3.7%
General Electric Co. 50,400 4,561,189
Honeywell, Inc. 4,800 383,700
4,944,889
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
INDUSTRIAL MACHINERY &
EQUIPMENT - CONTINUED
INDUSTRIAL MACHINERY &
EQUIPMENT - 0.3%
ASM Lithography Holdings N V 12,800 $ 362,400
(a)
TOTAL INDUSTRIAL MACHINERY & 5,307,289
EQUIPMENT
MEDIA & LEISURE - 6.6%
BROADCASTING - 3.6%
Cablevision Systems Corp. 13,000 537,875
Class A (a)
CBS Corp. 41,600 1,240,200
Comcast Corp. Class A 32,300 1,566,550
(special)
MediaOne Group, Inc. 14,700 595,350
Time Warner, Inc. 9,200 972,900
4,912,875
ENTERTAINMENT - 1.5%
Disney (Walt) Co. 44,200 1,422,688
Tele-Communications, Inc. 30,700 608,244
(TCI Ventures Group) Series
A (a)
2,030,932
PUBLISHING - 0.6%
Tribune Co. 11,400 731,025
RESTAURANTS - 0.9%
McDonald's Corp. 17,700 1,240,106
TOTAL MEDIA & LEISURE 8,914,938
NONDURABLES - 12.8%
BEVERAGES - 4.2%
Anheuser-Busch Companies, 18,400 1,115,500
Inc.
Cadbury Schweppes PLC ADR 10,100 609,788
Coca-Cola Co. (The) 37,600 2,634,350
PepsiCo, Inc. 31,680 1,225,620
5,585,258
FOODS - 2.7%
Heinz (H.J.) Co. 13,900 810,544
Hershey Foods Corp. 8,400 564,900
Nestle SA (Reg.) 335 696,840
Quaker Oats Co. 13,100 804,013
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
NONDURABLES - CONTINUED
FOODS - CONTINUED
Raisio Group PLC 15,100 $ 195,864
Sara Lee Corp. 8,900 519,538
3,591,699
HOUSEHOLD PRODUCTS - 3.4%
Clorox Co. 5,800 644,163
Colgate-Palmolive Co. 3,400 291,125
Gillette Co. 26,800 1,231,125
Procter & Gamble Co. 24,300 2,129,288
Revlon, Inc. Class A (a) 14,700 303,188
4,598,889
TOBACCO - 2.5%
Philip Morris Companies, Inc. 60,380 3,377,506
TOTAL NONDURABLES 17,153,352
RETAIL & WHOLESALE - 7.1%
APPAREL STORES - 0.9%
Abercrombie & Fitch Co. Class 11,504 644,224
A (a)
Gap, Inc. 7,600 559,075
1,203,299
DRUG STORES - 0.9%
CVS Corp. 9,700 478,938
Walgreen Co. 14,500 778,469
1,257,407
GENERAL MERCHANDISE STORES -
2.7%
Dayton Hudson Corp. 7,500 337,500
Federated Department Stores, 25,700 1,071,369
Inc. (a)
Wal-Mart Stores, Inc. 28,800 2,169,000
3,577,869
GROCERY STORES - 0.8%
Safeway, Inc. (a) 19,900 1,050,969
RETAIL & WHOLESALE,
MISCELLANEOUS - 1.8%
Amazon.com, Inc. (a) 1,500 288,000
Best Buy Co., Inc. (a) 6,800 391,850
Castorama Dubois 1,500 303,617
Investissements SA
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
RETAIL & WHOLESALE - CONTINUED
RETAIL & WHOLESALE,
MISCELLANEOUS - CONTINUED
Home Depot, Inc. 19,800 $ 985,050
Staples, Inc. (a) 14,800 517,075
2,485,592
TOTAL RETAIL & WHOLESALE 9,575,136
SERVICES - 1.1%
ADVERTISING - 1.1%
Omnicom Group, Inc. 14,040 750,263
Outdoor Systems, Inc. (a) 15,100 407,700
WPP Group PLC sponsored ADR 6,100 338,550
1,496,513
TECHNOLOGY - 22.4%
COMMUNICATIONS EQUIPMENT - 3.9%
3Com Corp. (a) 12,400 479,725
Ascend Communications, Inc. 17,600 988,900
(a)
Cisco Systems, Inc. (a) 28,362 2,137,786
Lucent Technologies, Inc. 19,300 1,661,006
5,267,417
COMPUTER SERVICES & SOFTWARE
- - 7.6%
America Online, Inc. 12,600 1,103,288
At Home Corp. Series A (a) 5,900 343,675
Ceridian Corp. (a) 100 6,506
CNET, Inc. (a) 6,500 344,906
Computer Associates 14,500 641,625
International, Inc.
Compuware Corp. (a) 6,000 373,500
Electronic Data Systems Corp. 15,900 620,100
Equifax, Inc. 10,390 431,185
First Data Corp. 21,400 571,113
Microsoft Corp. (a) 37,200 4,538,400
Oracle Corp. (a) 17,500 599,375
Siebel Systems, Inc. (a) 12,500 303,125
Yahoo!, Inc. (a) 1,700 326,400
10,203,198
COMPUTERS & OFFICE EQUIPMENT
- - 5.2%
Compaq Computer Corp. 32,500 1,056,250
Dell Computer Corp. (a) 26,800 1,629,775
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TECHNOLOGY - CONTINUED
COMPUTERS & OFFICE EQUIPMENT
- - CONTINUED
EMC Corp. (a) 14,300 $ 1,036,750
Gateway 2000, Inc. (a) 5,400 303,075
Hewlett-Packard Co. 14,100 884,775
International Business 6,600 1,089,000
Machines Corp.
Pitney Bowes, Inc. 11,820 661,920
Tech Data Corp. (a) 8,700 350,175
7,011,720
ELECTRONIC INSTRUMENTS - 0.9%
Applied Materials, Inc. (a) 17,300 670,375
Perkin-Elmer Corp. 6,000 559,500
1,229,875
ELECTRONICS - 4.8%
Altera Corp. (a) 14,100 691,781
Intel Corp. 35,800 3,852,975
Micron Technology, Inc. (a) 13,300 549,456
Texas Instruments, Inc. 12,900 985,238
Vitesse Semiconductor Corp. 9,100 324,188
(a)
6,403,638
TOTAL TECHNOLOGY 30,115,848
UTILITIES - 4.6%
CELLULAR - 0.4%
AirTouch Communications, Inc. 9,100 520,406
(a)
ELECTRIC UTILITY - 0.3%
CMS Energy Corp. 7,500 365,625
TELEPHONE SERVICES - 3.9%
ALLTEL Corp. 9,500 503,500
AT&T Corp. 13,800 859,913
Bell Atlantic Corp. 7,900 439,438
BellSouth Corp. 4,600 401,350
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
UTILITIES - CONTINUED
TELEPHONE SERVICES - CONTINUED
Global TeleSystems Group, 8,000 $ 347,250
Inc. (a)
MCI WorldCom, Inc. (a) 42,233 2,491,747
RCN Corp. (a) 13,900 236,300
5,279,498
TOTAL UTILITIES 6,165,529
TOTAL COMMON STOCKS 128,717,792
(Cost $104,760,993)
CASH EQUIVALENTS - 4.2%
MATURITY AMOUNT
Investments in repurchase $ 5,619,819 5,619,000
agreements (U.S. Treasury
obligations), in a joint
trading account at 5.25%,
dated 11/30/98 due 12/1/98
(Cost $5,619,000)
TOTAL INVESTMENT IN $ 134,336,792
SECURITIES - 100%
(Cost $110,379,993)
</TABLE>
LEGEND
(a) Non-income producing
INCOME TAX INFORMATION
At November 30, 1998, the aggregate cost of investment securities for
income tax purposes was $111,563,667. Net unrealized appreciation
aggregated $22,773,125, of which $25,382,736 related to appreciated
investment securities and $2,609,611 related to depreciated investment
securities.
The fund hereby designates approximately $3,477,000 as a capital gain
dividend for the purpose of the dividend paid deduction.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1998
ASSETS
Investment in securities, at $ 134,336,792
value (including repurchase
agreements of $5,619,000)
(cost $110,379,993) - See
accompanying schedule
Cash 399
Receivable for investments 2,438,923
sold
Receivable for fund shares 1,901,708
sold
Dividends receivable 108,193
TOTAL ASSETS 138,786,015
LIABILITIES
Payable for investments $ 2,215,787
purchased
Payable for fund shares 302,264
redeemed
Accrued management fee 64,256
Distribution fees payable 65,789
Other payables and accrued 65,448
expenses
TOTAL LIABILITIES 2,713,544
NET ASSETS $ 136,072,471
Net Assets consist of:
Paid in capital $ 102,330,671
Accumulated undistributed net 9,784,785
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 23,957,015
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS $ 136,072,471
STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
NOVEMBER 30, 1998
CALCULATION OF MAXIMUM $16.62
OFFERING PRICE CLASS A: NET
ASSET VALUE and redemption
price per share
($4,253,562 (divided by)
255,901 shares)
Maximum offering price per $17.63
share (100/94.25 of $16.62)
CLASS T: NET ASSET VALUE and $16.67
redemption price per share
($81,454,733 (divided by)
4,884,844 shares)
Maximum offering price per $17.27
share (100/96.50 of $16.67)
CLASS B: NET ASSET VALUE and $16.50
offering price per share
($37,229,368 (divided by)
2,256,257 shares) A
CLASS C: NET ASSET VALUE and $16.54
offering price per share
($4,392,897 (divided by)
265,605 shares) A
INSTITUTIONAL CLASS: NET $16.77
ASSET VALUE, offering price
and redemption price per
share ($8,741,911 (divided
by) 521,146 shares)
A REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1998
INVESTMENT INCOME $ 893,491
Dividends
Interest 232,302
TOTAL INCOME 1,125,793
EXPENSES
Management fee $ 585,604
Transfer agent fees 215,301
Distribution fees 594,869
Accounting fees and expenses 65,096
Non-interested trustees' 343
compensation
Custodian fees and expenses 20,453
Registration fees 70,138
Audit 29,554
Legal 757
Miscellaneous 2,631
Total expenses before 1,584,746
reductions
Expense reductions (24,441) 1,560,305
NET INVESTMENT INCOME (LOSS) (434,512)
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 10,377,898
Foreign currency transactions (5,724) 10,372,174
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 13,461,436
Assets and liabilities in 216 13,461,652
foreign currencies
NET GAIN (LOSS) 23,833,826
NET INCREASE (DECREASE) IN $ 23,399,314
NET ASSETS RESULTING FROM
OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED NOVEMBER 30, 1998 YEAR ENDED NOVEMBER 30, 1997
INCREASE (DECREASE) IN NET
ASSETS
Operations Net investment $ (434,512) $ (164,296)
income (loss)
Net realized gain (loss) 10,372,174 5,078,595
Change in net unrealized 13,461,652 5,508,711
appreciation (depreciation)
NET INCREASE (DECREASE) IN 23,399,314 10,423,010
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (4,313,011) (257,587)
from net realized gain
Share transactions - net 44,376,848 16,942,203
increase (decrease)
TOTAL INCREASE (DECREASE) 63,463,151 27,107,626
IN NET ASSETS
NET ASSETS
Beginning of period 72,609,320 45,501,694
End of period $ 136,072,471 $ 72,609,320
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C> <C>
YEARS ENDED NOVEMBER 30,
1998 1997 1996 G
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 13.96 $ 11.83 $ 10.21
period
Income from Investment
Operations
Net investment income (loss) (.05) (.04) -
D
Net realized and unrealized 3.54 2.25 1.62
gain (loss)
Total from investment 3.49 2.21 1.62
operations
Less Distributions
From net realized gain (.83) (.08) -
Net asset value, end of period $ 16.62 $ 13.96 $ 11.83
TOTAL RETURN B, C 26.69% 18.82% 15.87%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 4,254 $ 2,330 $ 503
(000 omitted)
Ratio of expenses to average 1.46% E 1.75% E 1.75% A, E
net assets
Ratio of expenses to average 1.44% F 1.72% F 1.75% A
net assets after expense
reductions
Ratio of net investment (.31)% (.34)% .11% A
income (loss) to average
net assets
Portfolio turnover 141% 93% 59% A
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
G FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A
SHARES) TO NOVEMBER 30, 1996.
FINANCIAL HIGHLIGHTS - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C>
YEARS ENDED NOVEMBER 30,
1998 1997 1996 G
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 13.98 $ 11.82 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) (.05) (.02) (.01)
D
Net realized and unrealized 3.56 2.24 1.83
gain (loss)
Total from investment 3.51 2.22 1.82
operations
Less Distributions
From net realized gain (.82) (.06) -
Net asset value, end of period $ 16.67 $ 13.98 $ 11.82
TOTAL RETURN B, C 26.77% 18.89% 18.20%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 81,455 $ 42,753 $ 26,133
(000 omitted)
Ratio of expenses to average 1.46% 1.62% 2.00% A, E
net assets
Ratio of expenses to average 1.44% F 1.60% F 2.00% A
net assets after expense
reductions
Ratio of net investment (.31)% (.18)% (.14)% A
income (loss) to average
net assets
Portfolio turnover 141% 93% 59% A
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE
BEEN HIGHER.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
G FOR THE PERIOD FEBRUARY 20, 1996 (COMMENCEMENT OF SALE OF CLASS T
SHARES) TO NOVEMBER 30, 1996.
FINANCIAL HIGHLIGHTS - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C>
YEARS ENDED NOVEMBER 30,
1998 1997 1996 G
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 13.85 $ 11.77 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) (.13) (.09) (.05)
D
Net realized and unrealized 3.54 2.22 1.82
gain (loss)
Total from investment 3.41 2.13 1.77
operations
Less Distributions
From net realized gain (.76) (.05) -
Net asset value, end of period $ 16.50 $ 13.85 $ 11.77
TOTAL RETURN B, C 26.15% 18.18% 17.70%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 37,229 $ 20,926 $ 9,721
(000 omitted)
Ratio of expenses to average 2.00% 2.16% 2.50% A, E
net assets
Ratio of expenses to average 1.98% F 2.14% F 2.50% A
net assets after expense
reductions
Ratio of net investment (.85)% (.73)% (.64)% A
income (loss) to average
net assets
Portfolio turnover 141% 93% 59% A
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE
AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE
BEEN HIGHER.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
G FOR THE PERIOD FEBRUARY 20, 1996 (COMMENCEMENT OF SALE OF CLASS B
SHARES) TO NOVEMBER 30, 1996.
FINANCIAL HIGHLIGHTS - CLASS C
YEARS ENDED NOVEMBER 30,
1998 1997 G
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 13.98 $ 13.97
period
Income from Investment
Operations
Net investment income (loss) (.21) (.01)
D
Net realized and unrealized 3.59 .02
gain (loss)
Total from investment 3.38 .01
operations
Less Distributions
From net realized gain (.82) -
Net asset value, end of period $ 16.54 $ 13.98
TOTAL RETURN B, C 25.79% .07%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 4,393 $ 41
(000 omitted)
Ratio of expenses to average 2.50% E 2.50% A, E
net assets
Ratio of expenses to average 2.48% F 2.35% A, F
net assets after expense
reductions
Ratio of net investment (1.40)% (.62)% A
income (loss) to average net
assets
Portfolio turnover 141% 93%
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE
AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
G FOR THE PERIOD NOVEMBER 3, 1997 (COMMENCEMENT OF SALE OF CLASS C
SHARES) TO NOVEMBER 30, 1997.
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
YEARS ENDED NOVEMBER 30,
1998 1997 1996 H
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 14.05 $ 11.86 $ 10.00
period
Income from Investment
Operations
Net investment income D .03 .04 G .03
Net realized and unrealized 3.56 2.24 1.83
gain (loss)
Total from investment 3.59 2.28 1.86
operations
Less Distributions
From net realized gain (.87) I (.09) -
Net asset value, end of period $ 16.77 $ 14.05 $ 11.86
TOTAL RETURN B, C 27.35% 19.39% 18.60%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 8,742 $ 6,560 $ 9,144
(000 omitted)
Ratio of expenses to average .99% 1.15% 1.50% A, E
net assets
Ratio of expenses to average .97% F 1.12% F 1.48% A, F
net assets after expense
reductions
Ratio of net investment .18% .32% .38% A
income to average net assets
Portfolio turnover 141% 93% 59% A
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE
BEEN HIGHER.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
G DURING THE PERIOD, A SIGNIFICANT SHAREHOLDER REDEMPTION CAUSED AN
UNUSUALLY HIGH LEVEL OF INVESTMENT INCOME PER SHARE.
H FOR THE PERIOD FEBRUARY 20, 1996 (COMMENCEMENT OF SALE OF
INSTITUTIONAL CLASS SHARES) TO NOVEMBER 30, 1996.
I THE AMOUNT SHOWN REFLECTS CERTAIN RECLASSIFICATIONS RELATED TO BOOK
TO TAX DIFFERENCES (SEE NOTE 1 OF NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1998
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Large Cap Fund (the fund) is a fund of Fidelity
Advisor Series I (the trust) and is authorized to issue an unlimited
number of shares. The trust is registered under the Investment Company
Act of 1940, as amended (the 1940 Act), as an open-end management
investment company organized as a Massachusetts business trust.
The fund offers Class A, Class T, Class B, Class C, and Institutional
Class shares, each of which has equal rights as to assets and voting
privileges. Each class has exclusive voting rights with respect to
matters that affect that class. Class B shares will automatically
convert to Class A shares after a holding period of seven years from
the initial date of purchase. Investment income, realized and
unrealized capital gains and losses, the common expenses of the fund,
and certain fund-level expense reductions, if any, are allocated on a
pro rata basis to each class based on the relative net assets of each
class to the total net assets of the fund. Each class of shares
differs in its respective distribution, transfer agent, and certain
other class-specific fees, expenses, and expense reductions.
The financial statements have been prepared in conformity with
generally accepted accounting principles which require management to
make certain estimates and assumptions at the date of the financial
statements. The following summarizes the significant accounting
policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Securities for which exchange
quotations are not readily available (and in certain cases debt
securities which trade on an exchange) are valued primarily using
dealer-supplied valuations or at their fair value as determined in
good faith under consistently applied procedures under the general
supervision of the Board of Trustees. Short-term securities with
remaining maturities of sixty days or less for which quotations are
not readily available are valued at amortized cost or original cost
plus accrued interest, both of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases
and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
and
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
FOREIGN CURRENCY TRANSLATION - CONTINUED
settlement date on purchases and sales of securities. The effects of
changes in foreign currency exchange rates on investments in
securities are included with the net realized and unrealized gain or
loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent that it distributes substantially all of
its taxable income for its fiscal year. The schedule of investments
includes information regarding income taxes under the caption "Income
Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend
date, except certain dividends from foreign securities where the
ex-dividend date may have passed, are recorded as soon as the fund is
informed of the ex-dividend date. Non-cash dividends included in
dividend income, if any, are recorded at the fair market value of the
securities received. Interest income is accrued as earned. Investment
income is recorded net of foreign taxes withheld where recovery of
such taxes is uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date. Income dividends and capital gain distributions are
declared separately for each class.
Income and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. These differences, which may result in
distribution reclassifications, are primarily due to differing
treatments for net operating losses and losses deferred due to wash
sales. The fund also utilized earnings and profits distributed to
shareholders on redemption of shares as a part of the dividends paid
deduction for income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Accumulated undistributed net realized gain (loss) on investments and
foreign currency transactions may include temporary book and tax basis
differences that will reverse in a subsequent period. Any taxable
income or gain remaining at fiscal year end is distributed in the
following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the contracts'
terms. The U.S. dollar value of foreign currency contracts is
determined using contractual currency exchange rates established at
the time of each trade.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other
affiliated entities of Fidelity Management & Research Company (FMR),
may transfer uninvested cash balances into one or more joint trading
accounts. These balances are invested in one or more repurchase
agreements for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are
marked-to-market daily and maintained at a value at least equal to the
principal amount of the repurchase agreement (including accrued
interest). FMR, the fund's investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $170,364,317 and $134,303,675, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus a
fixed individual fund fee rate applied to the average net assets of
the fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds advised by FMR. The rates ranged from .2500% to .5200% for the
period. The annual individual fund fee rate is .30%. In the event that
these rates were lower than the contractual rates in effect during the
period, FMR voluntarily implemented the above rates, as they resulted
in the same or a lower management fee. For the period, the management
fee was equivalent to an annual rate of .59% of average net assets.
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the
1940 Act, the Trustees have adopted separate distribution plans with
respect to each class of shares (collectively referred to as "the
Plans"). Under certain of the Plans, the class pays Fidelity
Distributors Corporation (FDC), an affiliate of FMR, a distribution
and service fee. A portion of this fee may be reallowed to securities
dealers, banks and other financial
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
DISTRIBUTION AND SERVICE PLAN - CONTINUED
institutions for the distribution of each class of shares and
providing shareholder support services. For the period, this fee was
based on the following annual rates of the average net assets of each
applicable class:
CLASS A .25%
CLASS T .50%
CLASS B 1.00% *
CLASS C 1.00% *
* .75% REPRESENTS A DISTRIBUTION FEE AND .25% REPRESENTS A SHAREHOLDER
SERVICE FEE.
For the period, each class paid FDC the following amounts, a portion
of which was retained by FDC:
PAID TO FDC RETAINED BY FDC
CLASS A $ 7,709 $ 453
CLASS T 297,440 2,387
CLASS B 274,568 206,128
CLASS C 15,152 15,127
$ 594,869 $ 224,095
Under the Plans, FMR may use its resources to pay administrative and
promotional expenses related to the sale of each class' shares. The
Plans also authorize payments to third parties that assist in the sale
of each class' shares or render shareholder support services. For the
period, the following amounts were paid to third parties under the
Plans:
CLASS A $ 2,189
CLASS T 22,166
CLASS B 10,674
CLASS C 1,885
INSTITUTIONAL CLASS 1,579
SALES LOAD. FDC receives a front-end sales charge of up to 5.75% for
selling Class A shares, and 3.50% for selling Class T shares of the
fund. FDC receives the proceeds of contingent deferred sales charges
levied on Class B share redemptions occurring within six years of
purchase and Class C share redemptions occurring within one year of
purchase. Contingent deferred sales charges are based on declining
rates ranging from 5% to 1% for Class B and 1% for Class C, of the
lesser of the cost of shares at the initial date of purchase or the
net asset value of the redeemed shares, excluding any reinvested
dividends and capital gains. In addition, purchases of Class A and
Class T shares that were subject to a finder's fee bear a contingent
deferred sales charge on
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
SALES LOAD - CONTINUED
assets that do not remain in the fund for at least one year. The Class
A and Class T contingent deferred sales charge is based on 0.25% of
the lesser of the cost of shares at the initial date of purchase or
the net asset value of the redeemed shares, excluding any reinvested
dividends and capital gains. A portion of the sales charges paid to
FDC are paid to securities dealers, banks and other financial
institutions.
For the period, sales charge amounts paid to and retained by FDC were
as follows:
PAID TO FDC RETAINED BY FDC
CLASS A $ 48,225 $ 13,628
CLASS T 85,387 27,254
CLASS B 50,675 50,675*
CLASS C 4,117 4,117*
$ 188,404 $ 95,674
* WHEN CLASS B AND CLASS C SHARES ARE INITIALLY SOLD, FDC PAYS
COMMISSIONS FROM ITS OWN RESOURCES TO SECURITIES DEALERS,
BANKS, AND OTHER FINANCIAL INSTITUTIONS THROUGH WHICH THE SALES ARE
MADE.
TRANSFER AGENT FEES. Fidelity Investments Institutional Operations
Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend
disbursing and shareholder servicing agent for each class of the fund.
FIIOC receives account fees and asset-based fees that vary according
to the account size and type of account of the shareholders of the
respective classes of the fund. FIIOC pays for typesetting, printing
and mailing of all shareholder reports, except proxy statements. For
the period, the following amounts were paid to FIIOC:
AMOUNT % OF AVERAGE NET ASSETS
CLASS A $ 8,963 .29
CLASS T 123,887 .21
CLASS B 65,661 .24
CLASS C 4,533 .30
INSTITUTIONAL CLASS 12,257 .16
$ 215,301
ACCOUNTING FEES. Fidelity Service Company, Inc., an affiliate of FMR,
maintains each fund's accounting records. The fee is based on the
level of average net assets for the month plus out-of-pocket expenses.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $26,726 for the
period.
5. EXPENSE REDUCTIONS.
FMR voluntarily agreed to reimburse operating expenses (excluding
interest, taxes, brokerage commissions and extraordinary expenses)
above the following annual rates or range of annual rates of average
net assets for each of the following classes:
FMR EXPENSE LIMITATIONS REIMBURSEMENT
CLASS A 1.75% $ -
CLASS T 2.00% -
CLASS B 2.50% -
CLASS C 2.50% 4,593
INSTITUTIONAL CLASS 1.50% -
$ 4,593
Effective December 1, 1998, Class A, Class T, Class B, Class C and the
Institutional Class expense limitations were changed to 1.30%, 1.55%,
2.05%, 2.05% and 1.05% of each class' average net assets,
respectively.
FMR also agreed to reimburse certain transfer agent, registration and
other class specific expenses for Class A. For the period, the
reimbursement reduced these expenses by $93.
FMR has also directed certain portfolio trades to brokers who paid a
portion of the fund's expenses. For the period, the fund's expenses
were reduced by $19,668 under this arrangement.
In addition, the fund has entered into an arrangement with its
custodian whereby credits realized as a result of uninvested cash
balances were used to reduce a portion of expenses. During the period,
the fund's custodian fees were reduced by $87 under the custodian
arrangement.
6. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
YEAR ENDED NOVEMBER 30,
1998 1997
FROM NET REALIZED GAIN
Class A $ 144,680 $ 4,398
Class T 2,603,039 136,999
Class B 1,174,205 44,789
Class C 4,554 -
Institutional Class 386,533 71,401
Total $ 4,313,011 $ 257,587
7. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SHARES DOLLARS
YEAR ENDED NOVEMBER 30, YEAR ENDED NOVEMBER 30, YEAR ENDED NOVEMBER 30, YEAR ENDED NOVEMBER 30,
1998 1997 A 1998 1997 A
CLASS A Shares sold 149,566 144,247 $ 2,255,465 $ 1,813,901
Reinvestment of distributions 10,836 376 140,431 4,335
Shares redeemed (71,452) (20,146) (1,071,670) (270,682)
Net increase (decrease) 88,950 124,477 $ 1,324,226 $ 1,547,554
CLASS T Shares sold 3,016,885 2,250,430 $ 45,639,086 $ 28,156,275
Reinvestment of distributions 194,189 10,908 2,524,317 125,919
Shares redeemed (1,383,470) (1,414,476) (20,914,015) (17,788,491)
Net increase (decrease) 1,827,604 846,862 $ 27,249,388 $ 10,493,703
CLASS B Shares sold 1,003,260 866,616 $ 15,065,539 $ 10,723,501
Reinvestment of distributions 85,310 3,711 1,102,243 42,621
Shares redeemed (342,947) (185,536) (5,096,726) (2,357,800)
Net increase (decrease) 745,623 684,791 $ 11,071,056 $ 8,408,322
CLASS C Shares sold 296,148 2,908 $ 4,585,462 $ 40,619
Reinvestment of distributions 323 - 4,193 -
Shares redeemed (33,774) - (479,818) -
Net increase (decrease) 262,697 2,908 $ 4,109,837 $ 40,619
INSTITUTIONAL CLASS Shares 436,413 333,043 $ 6,728,785 $ 4,361,777
sold
Reinvestment of distributions 28,359 5,997 368,930 69,380
Shares redeemed (410,609) (643,222) (6,475,374) (7,979,152)
Net increase (decrease) 54,163 (304,182) $ 622,341 $ (3,547,995)
</TABLE>
A SHARE TRANSACTIONS FOR CLASS C ARE FOR THE PERIOD NOVEMBER 3, 1997
(COMMENCEMENT OF SALE OF SHARES) TO NOVEMBER 30, 1997.
8. REGISTRATION FEES.
For the period, each class paid the following amounts to register its
shares for sale:
REGISTRATION FEES
CLASS A $ 6,656
CLASS T 26,142
CLASS B 15,690
CLASS C 12,420
INSTITUTIONAL CLASS 9,230
$ 70,138
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Advisor Series I and the Shareholders of
Fidelity Advisor Large Cap Fund:
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of
Fidelity Advisor Large Cap Fund (a fund of Fidelity Advisor Series I)
at November 30, 1998, and the results of its operations, the changes
in its net assets and the financial highlights for the periods
indicated, in conformity with generally accepted accounting
principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the
responsibility of the Fidelity Advisor Large Cap Fund's management;
our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which
included confirmation of securities at November 30, 1998 by
correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
January 13, 1999
DISTRIBUTIONS
The Board of Trustees of Fidelity Advisor Large Cap Fund voted to pay
to shareholders of record at the opening of business on record date,
the following distributions derived from capital gains realized from
sales of portfolio securities, and dividends derived from net
investment income:
CLASS A
PAY DATE 12/22/97 1/5/98 12/21/98 1/11/99
RECORD DATE 12/19/97 1/2/98 12/18/98 1/8/99
DIVIDENDS - - - -
SHORT-TERM
CAPITAL GAINS $0.45 - $0.35 $0.08
LONG-TERM
CAPITAL GAINS $0.36 $0.02 $0.62 -
LONG-TERM
CAPITAL GAIN PERCENTAGES:
28% rate 73.80% - - -
20% rate 26.20% 100% 100% 100%
CLASS T
PAY DATE 12/22/97 1/5/98 12/21/98 1/11/99
RECORD DATE 12/19/97 1/2/98 12/18/98 1/8/99
DIVIDENDS - - - -
SHORT-TERM
CAPITAL GAINS $0.44 - $0.35 $0.08
LONG-TERM
CAPITAL GAINS $0.36 $0.02 $0.62 -
LONG-TERM
CAPITAL GAIN PERCENTAGES:
28% rate 73.80% - - -
20% rate 26.20% 100% 100% 100%
CLASS B
PAY DATE 12/22/97 1/5/98 12/21/98 1/11/99
RECORD DATE 12/19/97 1/2/98 12/18/98 1/8/99
DIVIDENDS - - - -
SHORT-TERM
CAPITAL GAINS $0.38 - $0.28 $0.08
LONG-TERM
CAPITAL GAINS $0.36 $0.02 $0.62 -
LONG-TERM
CAPITAL GAIN PERCENTAGES:
28% rate 73.80% - - -
20% rate 26.20% 100% 100% 100%
CLASS C
PAY DATE 12/22/97 1/5/98 12/21/98 1/11/99
RECORD DATE 12/19/97 1/2/98 12/18/98 1/8/99
DIVIDENDS - - - -
SHORT-TERM
CAPITAL GAINS $0.44 - $0.33 $0.08
LONG-TERM
CAPITAL GAINS $0.36 $0.02 $0.62 -
LONG-TERM
CAPITAL GAIN PERCENTAGES:
28% rate 73.80% - - -
20% rate 26.20% 100% 100% 100%
A total of 26%, 26%, 31%, and 27% of Class A, Class T, Class B, and
Class C's dividends distributed during the fiscal year qualifies for
the dividends-received deduction for corporate shareholders.
The fund will notify shareholders in January 1999 of the applicable
percentages for use in preparing 1998 income tax returns.
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.)
Inc., London, England
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Abigail P. Johnson, Vice President
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
* INDEPENDENT TRUSTEES
ADVISORY BOARD
J. Gary Burkhead
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA
CUSTODIAN
Brown Brothers Harriman & Co.
Boston, MA
FOCUS FUNDS
Fidelity Advisor Consumer
Industries Fund
Fidelity Advisor Cyclical
Industries Fund
Fidelity Advisor Financial
Services Fund
Fidelity Advisor Health Care Fund
Fidelity Advisor Natural
Resources Fund
Fidelity Advisor Technology Fund
Fidelity Advisor Utilities Growth Fund
GROWTH FUNDS
Fidelity Advisor Latin America Fund
Fidelity Advisor Japan Fund
Fidelity Advisor Europe Capital Appreciation Fund
Fidelity Advisor International Capital Appreciation Fund
Fidelity Advisor Overseas Fund
Fidelity Advisor Diversified International Fund
Fidelity Advisor Global Equity Fund
Fidelity Advisor TechnoQuant
Growth Fund
SM
Fidelity Advisor Small Cap Fund
Fidelity Advisor Strategic
Opportunities Fund
Fidelity Advisor Mid Cap Fund
Fidelity Advisor Retirement
Growth Fund
Fidelity Advisor Equity Growth Fund
Fidelity Advisor Large Cap Fund
Fidelity Advisor Dividend Growth Fund
Fidelity Advisor Growth
Opportunities Fund
GROWTH AND INCOME FUNDS
Fidelity Advisor Growth & Income Fund
Fidelity Advisor Equity Income Fund
Fidelity Advisor Asset Allocation Fund
Fidelity Advisor Balanced Fund
TAXABLE INCOME FUNDS
Fidelity Advisor Emerging Markets Income Fund
Fidelity Advisor High Yield Fund
Fidelity Advisor Strategic Income Fund
Fidelity Advisor Mortgage
Securities Fund
Fidelity Advisor Government Investment Fund
Fidelity Advisor Intermediate Bond Fund
Fidelity Advisor Short Fixed-Income Fund
MUNICIPAL FUNDS
Fidelity Advisor Municipal Income Fund
Fidelity Advisor Intermediate Municipal Income Fund
MONEY MARKET FUNDS
Prime Fund
Treasury Fund
Tax-Exempt Fund
(registered trademark)
(2_FIDELITY_LOGOS)FIDELITY ADVISOR
(registered trademark)
MID CAP
FUND - CLASS A, CLASS T, CLASS B AND CLASS C
ANNUAL REPORT
NOVEMBER 30, 1998
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over
time.
FUND TALK 12 The manager's review of fund
performance, strategy and
outlook.
INVESTMENT CHANGES 15 A summary of major shifts in
the fund's investments over
the last six months.
INVESTMENTS 16 A complete list of the fund's
investments with their
market values.
FINANCIAL STATEMENTS 27 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 36 Notes to the financial
statements.
REPORT OF INDEPENDENT 43 The auditors' opinion.
ACCOUNTANTS
DISTRIBUTIONS 44
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION
OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS
IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT
INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY ADVISOR FUND, INCLUDING CHARGES
AND EXPENSES, CONTACT YOUR
INVESTMENT PROFESSIONAL FOR A FREE PROSPECTUS. READ IT CAREFULLY
BEFORE YOU INVEST OR SEND MONEY.
Standard & Poor's, S&P and S&P 500 are registered service marks of The
McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity
Distributors Corporation.
Other third party marks appearing herein are the property of their
respective owners.
All other marks appearing herein are registered or unregistered
trademarks or service marks of FMR Corp. or an affiliated company.
This report is printed on recycled paper using soy-based inks.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
The month of November proved to be a strong one for the stock and bond
markets. The Dow Jones Industrial Average reached a record high.
Merger activity, which had lulled during the summer correction, has
increased significantly. Small-cap stocks posted their third
consecutive month of positive returns, as did emerging markets. While
bond returns generally were not at the levels of their equity
counterparts, they were mostly positive nonetheless.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will
greatly reduce your vulnerability to any single decline. We know from
experience, for example, that stock prices have gone up over longer
periods of time, have significantly outperformed other types of
investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through
diversification. A stock mutual fund, for instance, is already
diversified, because it invests in many different companies. You can
increase your diversification further by investing in a number of
different stock funds, or in such other investment categories as
bonds. If you have a short investment time horizon, you might want to
consider moving some of your investment into a money market fund,
which seeks income and a stable share price by investing in
high-quality, short-term investments. Of course, it's important to
remember that there is no assurance that a money market fund will
achieve its goal of maintaining a stable net asset value of $1.00 per
share, and that these types of funds are neither insured nor
guaranteed by any agency of the U.S. government.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases. Of course, you should
consider your financial ability to continue your purchases through
periods of low price levels before undertaking such a strategy.
Remember to contact your investment professional if you need help with
your investments.
Best regards,
Edward C. Johnson 3d
FIDELITY ADVISOR MID CAP FUND - CLASS A
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can
look at the total percentage change in value, the average annual
percentage change or the growth of a hypothetical $10,000 investment.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). The initial offering of Class A shares took place on September
3, 1996. Class A shares bear a 0.25% 12b-1 fee that is reflected in
returns after September 3, 1996. Returns prior to September 3, 1996
are those of Class T and reflect Class T shares' 0.50% 12b-1 fee. If
Fidelity had not reimbursed certain class expenses, the past one year
and life of fund total returns would have been lower. If Fidelity had
not reimbursed certain class expenses, the life of fund total returns
would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR LIFE OF FUND
1998
FIDELITY ADV MID CAP - CL A 9.07% 56.00%
FIDELITY ADV MID CAP - CL A 2.80% 47.03%
(INCL. 5.75% SALES CHARGE)
S&P MidCap 400 10.40% 61.67%
Mid-Cap Funds Average 3.34% n/a
CUMULATIVE TOTAL RETURNS show Class A's performance in percentage
terms over a set period - in this case, one year or since the fund
started on February 20, 1996. For example, if you had invested $1,000
in a fund that had a 5% return over the past year, the value of your
investment would be $1,050. You can compare Class A's returns to the
performance of the Standard & Poor's MidCap 400 Index - a widely
recognized, market capitalization-weighted index of 400
medium-capitalization stocks. To measure how Class A's performance
stacked up against its peers, you can compare it to the mid-cap funds
average, which reflects the performance of mutual funds with similar
objectives tracked by Lipper Analytical Services, Inc. The past one
year average represents a peer group of 309 mutual funds. These
benchmarks include reinvested dividends and capital gains, if any, and
exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR LIFE OF FUND
1998
FIDELITY ADV MID CAP - CL A 9.07% 17.36%
FIDELITY ADV MID CAP - CL A 2.80% 14.88%
(INCL. 5.75% SALES CHARGE)
S&P MidCap 400 10.40% 18.88%
Mid-Cap Funds Average 3.34% n/a
AVERAGE ANNUAL RETURNS take Class A's cumulative return and show you
what
would have happened if Class A had performed at a constant rate each
year.
$10,000 OVER LIFE OF FUND
FA Mid Cap -CL A S&P MidCap 400
00251 SP004
1996/02/20 9425.00 10000.00
1996/02/29 9594.65 10122.33
1996/03/31 9670.05 10243.60
1996/04/30 10141.30 10556.44
1996/05/31 10621.98 10699.16
1996/06/30 10150.73 10538.56
1996/07/31 9509.83 9825.63
1996/08/31 10160.15 10392.28
1996/09/30 10829.33 10845.38
1996/10/31 10537.15 10876.94
1996/11/30 11027.25 11489.64
1996/12/31 10887.64 11502.39
1997/01/31 11262.08 11934.19
1997/02/28 11060.46 11836.09
1997/03/31 10465.19 11331.52
1997/04/30 10762.82 11625.34
1997/05/31 11674.93 12641.86
1997/06/30 12299.00 12996.97
1997/07/31 13259.11 14283.80
1997/08/31 13230.30 14266.52
1997/09/30 13902.38 15086.56
1997/10/31 13268.71 14430.14
1997/11/30 13479.93 14644.00
1997/12/31 13866.58 15212.33
1998/01/31 13737.97 14922.69
1998/02/28 14874.75 16159.03
1998/03/31 15657.63 16887.81
1998/04/30 15593.29 17196.01
1998/05/31 15099.97 16422.36
1998/06/30 15550.39 16525.99
1998/07/31 15121.41 15885.27
1998/08/31 12354.52 12928.39
1998/09/30 12869.29 14135.25
1998/10/31 13834.49 15398.52
1998/11/30 14703.16 16166.91
IMATRL PRASUN SHR__CHT 19981130 19981215 163756 R00000000000037
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Mid Cap Fund - Class A on February 20,
1996, when the fund started, and the current 5.75% sales charge was
paid. As the chart shows, by November 30, 1998, the value of the
investment would have grown to $14,703 - a 47.03% increase on the
initial investment. For comparison, look at how the Standard & Poor's
MidCap 400 Index did over the same period. With dividends and capital
gains, if any, reinvested, the same $10,000 investment would have
grown to $16,167 - a 61.67% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
long-term growth and
short-term volatility. In turn, the
share price and return of a
fund that invests in stocks will
vary. That means if you sell
your shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
FIDELITY ADVISOR MID CAP FUND - CLASS T
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can
look at the total percentage change in value, the average annual
percentage change or the growth of a hypothetical $10,000 investment.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value).
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR LIFE OF FUND
1998
FIDELITY ADV MID CAP - CL T 8.87% 55.85%
FIDELITY ADV MID CAP - CL T 5.06% 50.39%
(INCL. 3.50% SALES CHARGE)
S&P MidCap 400 10.40% 61.67%
Mid-Cap Funds Average 3.34% n/a
CUMULATIVE TOTAL RETURNS show Class T's performance in percentage
terms over a set period - in this case, one year or since the fund
started on February 20, 1996. For example, if you had invested $1,000
in a fund that had a 5% return over the past year, the value of your
investment would be $1,050. You can compare Class T's returns to the
performance of the Standard & Poor's MidCap 400 Index - a widely
recognized, market capitalization-weighted index of 400
medium-capitalization stocks. To measure how Class T's performance
stacked up against its peers, you can compare it to the mid-cap funds
average, which reflects the performance of mutual funds with similar
objectives tracked by Lipper Analytical Services, Inc. The past one
year average represents a peer group of 309 mutual funds. These
benchmarks include reinvested dividends and capital gains, if any, and
exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR LIFE OF FUND
1998
FIDELITY ADV MID CAP - CL T 8.87% 17.32%
FIDELITY ADV MID CAP - CL T 5.06% 15.82%
(INCL. 3.50% SALES CHARGE)
S&P MidCap 400 10.40% 18.88%
Mid-Cap Funds Average 3.34% n/a
AVERAGE ANNUAL RETURNS take Class T's cumulative return and show you
what would have happened if Class T had performed at a constant rate
each year.
$10,000 OVER LIFE OF FUND
FA Mid Cap -CL T S&P MidCap 400
00531 SP004
1996/02/20 9650.00 10000.00
1996/02/29 9823.70 10122.33
1996/03/31 9900.90 10243.60
1996/04/30 10383.40 10556.44
1996/05/31 10875.55 10699.16
1996/06/30 10393.05 10538.56
1996/07/31 9736.85 9825.63
1996/08/31 10402.70 10392.28
1996/09/30 11078.20 10845.38
1996/10/31 10788.70 10876.94
1996/11/30 11290.50 11489.64
1996/12/31 11156.94 11502.39
1997/01/31 11529.49 11934.19
1997/02/28 11323.61 11836.09
1997/03/31 10715.76 11331.52
1997/04/30 11019.68 11625.34
1997/05/31 11960.87 12641.86
1997/06/30 12598.13 12996.97
1997/07/31 13578.53 14283.80
1997/08/31 13558.92 14266.52
1997/09/30 14235.39 15086.56
1997/10/31 13598.13 14430.14
1997/11/30 13813.82 14644.00
1997/12/31 14196.99 15212.33
1998/01/31 14076.76 14922.69
1998/02/28 15247.09 16159.03
1998/03/31 16045.54 16887.81
1998/04/30 15979.91 17196.01
1998/05/31 15465.84 16422.36
1998/06/30 15925.22 16525.99
1998/07/31 15476.78 15885.27
1998/08/31 12643.93 12928.39
1998/09/30 13168.93 14135.25
1998/10/31 14153.32 15398.52
1998/11/30 15039.27 16166.91
IMATRL PRASUN SHR__CHT 19981130 19981214 163355 R00000000000037
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Mid Cap Fund - Class T on February 20,
1996, when the fund started, and the current 3.50% sales charge was
paid. As the chart shows, by November 30, 1998, the value of the
investment would have grown to $15,039 - a 50.39% increase on the
initial investment. For comparison, look at how the Standard & Poor's
MidCap 400 Index did over the same period. With dividends and capital
gains, if any, reinvested, the same $10,000 investment would have
grown to $16,167 - a 61.67% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
long-term growth and
short-term volatility. In turn, the
share price and return of a
fund that invests in stocks will
vary. That means if you sell
your shares during a market
downturn, you might lose
money. But if you can ride
out the market's ups and
downs, you may have a gain.
(checkmark)
FIDELITY ADVISOR MID CAP FUND - CLASS B
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can
look at the total percentage change in value, the average annual
percentage change or the growth of a hypothetical $10,000 investment.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). Class B shares' contingent deferred sales charge included in
the past one year and life of fund total return figures are 5% and 3%,
respectively.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR LIFE OF FUND
1998
FIDELITY ADV MID CAP - CL B 8.38% 53.10%
FIDELITY ADV MID CAP - CL B 3.51% 50.10%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P MidCap 400 10.40% 61.67%
Mid-Cap Funds Average 3.34% n/a
CUMULATIVE TOTAL RETURNS show Class B's performance in percentage
terms over a set period - in this case, one year or since the fund
started on February 20, 1996. For example, if you had invested $1,000
in a fund that had a 5% return over the past year, the value of your
investment would be $1,050. You can compare Class B's returns to the
performance of the Standard & Poor's MidCap 400 Index - a widely
recognized, market capitalization-weighted index of 400
medium-capitalization stocks. To measure how Class B's performance
stacked up against its peers, you can compare it to the mid-cap funds
average, which reflects the performance of mutual funds with similar
objectives tracked by Lipper Analytical Services, Inc. The past one
year average represents a peer group of 309 mutual funds. These
benchmarks include reinvested dividends and capital gains, if any, and
exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR LIFE OF FUND
1998
FIDELITY ADV MID CAP - CL B 8.38% 16.57%
FIDELITY ADV MID CAP - CL B 3.51% 15.74%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P MidCap 400 10.40% 18.88%
Mid-Cap Funds Average 3.34% n/a
AVERAGE ANNUAL RETURNS take Class B's cumulative return and show you
what
would have happened if Class B had performed at a constant rate each
year.
$10,000 OVER LIFE OF FUND
FA Mid Cap -CL B S&P MidCap 400
00532 SP004
1996/02/20 10000.00 10000.00
1996/02/29 10170.00 10122.33
1996/03/31 10240.00 10243.60
1996/04/30 10730.00 10556.44
1996/05/31 11240.00 10699.16
1996/06/30 10730.00 10538.56
1996/07/31 10050.00 9825.63
1996/08/31 10720.00 10392.28
1996/09/30 11410.00 10845.38
1996/10/31 11110.00 10876.94
1996/11/30 11610.00 11489.64
1996/12/31 11471.34 11502.39
1997/01/31 11856.42 11934.19
1997/02/28 11633.48 11836.09
1997/03/31 11005.19 11331.52
1997/04/30 11309.20 11625.34
1997/05/31 12261.76 12641.86
1997/06/30 12920.45 12996.97
1997/07/31 13913.56 14283.80
1997/08/31 13883.16 14266.52
1997/09/30 14582.38 15086.56
1997/10/31 13913.56 14430.14
1997/11/30 14126.36 14644.00
1997/12/31 14532.01 15212.33
1998/01/31 14396.81 14922.69
1998/02/28 15580.57 16159.03
1998/03/31 16381.02 16887.81
1998/04/30 16313.38 17196.01
1998/05/31 15783.50 16422.36
1998/06/30 16245.73 16525.99
1998/07/31 15783.50 15885.27
1998/08/31 12886.10 12928.39
1998/09/30 13415.98 14135.25
1998/10/31 14419.36 15398.52
1998/11/30 15010.00 16166.91
IMATRL PRASUN SHR__CHT 19981130 19981223 124210 R00000000000037
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Mid Cap Fund - Class B on February 20,
1996, when the fund started. As the chart shows, by November 30, 1998,
the value of the investment, including the effect of the applicable
contingent deferred sales charge, would have been $15,010 - a 50.10%
increase on the initial investment. For comparison, look at how the
Standard & Poor's MidCap 400 Index did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $16,167 - a 61.67% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
long-term growth and
short-term volatility. In turn, the
share price and return of a
fund that invests in stocks will
vary. That means if you sell
your shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
FIDELITY ADVISOR MID CAP FUND - CLASS C
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can
look at the total percentage change in value, the average annual
percentage change or the growth of a hypothetical $10,000 investment.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). The initial offering of Class C shares took place on November
3, 1997. Class C shares bear a 1.00% 12b-1 fee. Returns prior to
November 3, 1997 are those of Class B and reflect Class B shares'
1.00% 12b-1 fee. Class C shares' contingent deferred sales charge
included in the past one year and life of fund total return figures
are 1% and 0%, respectively. If Fidelity had not reimbursed certain
class expenses, the past one year and life of fund total returns would
have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR LIFE OF FUND
1998
FIDELITY ADV MID CAP - CL C 8.09% 52.69%
FIDELITY ADV MID CAP - CL C 7.12% 52.69%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P MidCap 400 10.40% 61.67%
Mid-Cap Funds Average 3.34% n/a
CUMULATIVE TOTAL RETURNS show Class C's performance in percentage
terms over a set period - in this case, one year or since the fund
started on February 20, 1996. For example, if you had invested $1,000
in a fund that had a 5% return over the past year, the value of your
investment would be $1,050. You can compare Class C's returns to the
performance of the Standard & Poor's MidCap 400 Index - a widely
recognized, market capitalization-weighted index of 400
medium-capitalization stocks. To measure how Class C's performance
stacked up against its peers, you can compare it to the mid-cap funds
average, which reflects the performance of mutual funds with similar
objectives tracked by Lipper Analytical Services, Inc. The past one
year average represents a peer group of 309 mutual funds. These
benchmarks include reinvested dividends and capital gains, if any, and
exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR LIFE OF FUND
1998
FIDELITY ADV MID CAP - CL C 8.09% 16.46%
FIDELITY ADV MID CAP - CL C 7.12% 16.46%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P MidCap 400 10.40% 18.88%
Mid-Cap Funds Average 3.34% n/a
AVERAGE ANNUAL RETURNS take Class C's cumulative return and show you
what would have happened if Class C had performed at a constant rate
each year.
$10,000 OVER LIFE OF FUND
FA Mid Cap -CL C S&P MidCap 400
00484 SP004
1996/02/20 10000.00 10000.00
1996/02/29 10170.00 10122.33
1996/03/31 10240.00 10243.60
1996/04/30 10730.00 10556.44
1996/05/31 11240.00 10699.16
1996/06/30 10730.00 10538.56
1996/07/31 10050.00 9825.63
1996/08/31 10720.00 10392.28
1996/09/30 11410.00 10845.38
1996/10/31 11110.00 10876.94
1996/11/30 11610.00 11489.64
1996/12/31 11471.34 11502.39
1997/01/31 11856.42 11934.19
1997/02/28 11633.48 11836.09
1997/03/31 11005.19 11331.52
1997/04/30 11309.20 11625.34
1997/05/31 12261.76 12641.86
1997/06/30 12920.45 12996.97
1997/07/31 13913.56 14283.80
1997/08/31 13883.16 14266.52
1997/09/30 14582.38 15086.56
1997/10/31 13913.56 14430.14
1997/11/30 14127.17 14644.00
1997/12/31 14530.54 15212.33
1998/01/31 14385.10 14922.69
1998/02/28 15571.73 16159.03
1998/03/31 16366.55 16887.81
1998/04/30 16288.19 17196.01
1998/05/31 15739.65 16422.36
1998/06/30 16198.63 16525.99
1998/07/31 15739.65 15885.27
1998/08/31 12851.44 12928.39
1998/09/30 13377.58 14135.25
1998/10/31 14373.91 15398.52
1998/11/30 15269.48 16166.91
IMATRL PRASUN SHR__CHT 19981130 19981214 163304 R00000000000037
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Mid Cap Fund - Class C on February 20,
1996, when the fund started. As the chart shows, by November 30, 1998,
the value of the investment would have been $15,269 - a 52.69%
increase on the initial investment. For comparison, look at how the
Standard & Poor's MidCap 400 Index did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $16,167 - a 61.67% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
long-term growth and
short-term volatility. In turn, the
share price and return of a
fund that invests in stocks will
vary. That means if you sell
your shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
When the final bell of the U.S. stock
market sounded on Monday,
November 23, 1998, the Dow
Jones Industrial Average stood at a
record high of 9374.27, serving
notice that the bleak economic
outlook from just a few short months
earlier would not keep positive
investor sentiment down. For the
12-month period ending November
30, 1998, the Dow - an index of
30 blue-chip stocks - returned
18.56%. What caused the
turnaround from the doldrums of
equity performance during the
summer and early fall? A variety of
factors: The economic problems in
Russia, Brazil and other emerging
markets began to dissipate; Asian
markets began to rebound; and,
perhaps most importantly, three
interest-rate cuts late in the period
by the Federal Reserve Board
helped stem the tide of a slowing
U.S. economy. All these factors
culminated in the Dow reaching its
record high late in November, a
peak that outpaced the previous
record set in July by nearly 40 points.
Small-cap stock performance was
still a far cry behind their large-cap
brethren. For the period, the Russell
2000 Index - a popular measure
of small-cap stock performance -
returned -6.62%, significantly
trailing the large-cap weighted
Standard & Poor's 500 Index's
return of 23.66%. Despite the late
rally in the equity market, this kind
of volatility has characterized the
entire year, and when it will level off
is impossible to predict.
An interview with Katherine Collins, Portfolio Manager of Fidelity
Advisor Mid Cap Fund
Q. HOW DID THE FUND PERFORM, KATHERINE?
A. For the 12 months that ended on November 30, 1998, the fund's Class
A, Class T, Class B and Class C shares had returns of 9.07%, 8.87%,
8.38% and 8.09%, respectively. During the same period, the Standard &
Poor's MidCap 400 Index returned 10.40% and the mid-cap funds average
monitored by Lipper Analytical Services returned 3.34%.
Q. WHAT FACTORS AFFECTED PERFORMANCE?
A. The fund's relative performance was helped by my emphasis on media
and leisure companies and my de-emphasis of energy and basic industry
companies, whose stocks generally performed poorly. The fund's
de-emphasis of utility stocks relative to the S&P MidCap index helped
relative performance, although these stocks tend to do better in
uncertain times. I manage the fund to be somewhat more aggressive than
the S&P MidCap index, but it is less aggressive than many of the funds
in the Lipper catgory. It makes sense that in a volatile, uncertain
market, the fund would do better than the Lipper average, but
underperform the S&P MidCap index.
Q. ONE OF YOUR LARGEST SECTOR WEIGHTINGS WAS IN MEDIA AND LEISURE, AT
ABOUT 13% OF INVESTMENTS. WHAT WAS YOUR STRATEGY HERE?
A. This very diverse group encompasses a number of categories,
including broadcasters and cable television companies. Two
broadcasters that were performance leaders were Clear Channel
Communications and Jacor, both of which the fund owned before they
announced merger plans in early October. USA Networks, which owns
cable television networks, and theme-park operator Premier Parks were
two other strong contributors. Another investment that helped in this
group was Harley-Davidson, the motorcycle manufacturer.
Q. YOU ALSO HAVE CONCENTRATIONS IN TECHNOLOGY, FINANCE AND HEALTH.
WHAT HAS BEEN YOUR STRATEGY IN THESE SECTORS?
A. While technology and finance were about 14% and 9% of investments
at the end of the period, respectively, both were under-represented
when compared to the benchmark S&P MidCap index. In technology, I
looked for companies that either had attractive valuations or had
records of strong, recurring revenues. This was a challenge, as many
fast-growing companies had very expensive stock prices. I did find
opportunities in the semiconductor equipment area though this industry
was one of the first hit by the Asian economic crisis and many stocks
lost more than half their value. Companies in which I invested
included KLA-Tencor, Teradyne and Applied Materials. In financial
services, I was concerned about it being late in the economic cycle
and high stock valuations. As a result, I underweighted this sector,
which turned out to be good for the fund when these stocks corrected
sharply in the summer. The health industry stood at about 9% of
investments as of November 30. I tended to emphasize health care
products rather than services.
Q. WERE THERE ANY PARTICULAR DISAPPOINTMENTS?
A. I didn't own enough of two technology companies that had very
strong performance: America Online and BMC Software. Both were
under-represented in the fund, when compared to their weightings in
the S&P MidCap index. Therefore, although owning these stocks was
positive, I should have owned more. Two retailers also held back
performance: Consolidated Stores and Stage Stores. Each ran into
weather problems and problems related to the integration of other
companies they had acquired. Another disappointment was HEALTHSOUTH,
which operates physical therapy centers. It was under pressure from
HMOs, which reimburse it for services, to hold down the fees it
charged them. I sold the fund's HEALTHSOUTH position during the
period.
Q. WHAT IS YOUR OUTLOOK?
A. I think there are still some great investment opportunities within
the mid-cap market, although I am a little less bullish about the
overall domestic economy than I was six months ago. However, I do
think there are companies that will be able to weather the economic
conditions and do well. Mid-cap stock values, in relation to large-cap
values, are cheap on an historical basis. That is a good general
backdrop for investing in mid-caps.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
KATHERINE COLLINS ON THE
CONTINUED GAP BETWEEN THE
PERFORMANCE OF LARGE-CAP
AND MID-CAP STOCKS:
"In recent years, we have seen a
large divergence in the
performance of large-, mid- and
small-cap stocks. In general,
large-cap stocks have done
significantly better.
"The continuing gap has pushed
mid-cap companies to their lowest
valuation levels relative to
large-cap companies in 20 years.
The disparity is even more
remarkable because small- and
mid-cap companies have shown
better earnings performance than
large caps. According to Prudential
Securities, the third quarter of 1998
was the sixth consecutive quarter
in which small- and mid-cap
companies grew earnings faster
than large companies. It has been
shown consistently that stock
prices follow company earnings, yet
this has not been the case for
mid-caps recently.
"I am encouraged by the
continuation of the strong earnings
trends at many mid-cap companies.
Generally, these companies have
more domestic business than large
multi-national corporations, so they
have been somewhat insulated from
international market turmoil. I also
am heartened that the mid-cap
stocks are at low valuations relative
to large stocks. Finally, I continue to
find exciting individual companies
generating superior earnings growth
at decent valuations, which should
translate into good opportunities,
no matter what the mid-cap market
does overall."
FUND FACTS
GOAL: long-term growth of
capital by investing primarily
in common stocks of
companies with
medium-sized market
capitalizations.
START DATE: February 20, 1996
SIZE: as of November 30,
1998, more than $507 million
MANAGER: Katherine Collins,
since January 1997; joined
Fidelity in 1990
(checkmark)
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF NOVEMBER
30, 1998
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE STOCKS 6 MONTHS AGO
Medtronic, Inc. 1.9 1.3
Leggett & Platt, Inc. 1.7 1.5
Harley-Davidson, Inc. 1.4 1.0
USA Networks, Inc. 1.3 0.7
Westwood One, Inc. 1.3 0.6
Cardinal Health, Inc. 1.3 0.6
Linear Technology Corp. 1.2 0.6
Armstrong World Industries, 1.2 0.8
Inc.
Service Corp. International 1.2 0.5
Safeway, Inc. 1.1 1.3
TOP FIVE MARKET SECTORS AS OF
NOVEMBER 30, 1998
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE MARKET SECTORS 6
MONTHS AGO
TECHNOLOGY 14.1 10.4
MEDIA & LEISURE 13.0 12.6
HEALTH 9.3 9.7
FINANCE 9.0 14.1
DURABLES 8.9 6.5
</TABLE>
ASSET ALLOCATION (% OF FUND'S
INVESTMENTS)
AS OF NOVEMBER 30, 1998 * AS OF MAY 31, 1998 **
Row: 1, Col: 1, Value: 92.3
Row: 1, Col: 2, Value: 7.7
Stocks 97.5%
Short-term
investments 2.5%
FOREIGN
INVESTMENTS 1.5%
Stocks 92.3%
Short-term
investments 7.7%
FOREIGN
INVESTMENTS 0.7%
Row: 1, Col: 1, Value: 97.5
Row: 1, Col: 2, Value: 2.5
*
**
INVESTMENTS NOVEMBER 30, 1998
Showing Percentage of Total Value of Investment in Securities
<TABLE>
<CAPTION>
<S> <C> <C> <C>
COMMON STOCKS - 92.3%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 1.2%
AEROSPACE & DEFENSE - 0.4%
Gulfstream Aerospace Corp. (a) 18,700 $ 960,713
Harsco Corp. 31,200 1,010,100
1,970,813
SHIP BUILDING & REPAIR - 0.8%
Avondale Industries, Inc. 54,907 1,516,806
General Dynamics Corp. 45,400 2,636,038
4,152,844
TOTAL AEROSPACE & DEFENSE 6,123,657
BASIC INDUSTRIES - 2.4%
CHEMICALS & PLASTICS - 1.4%
Cytec Industries, Inc. (a) 96,300 2,172,769
IMC Global, Inc. 108,000 2,470,500
Ivex Packaging Corp. (a) 126,900 2,474,550
7,117,819
IRON & STEEL - 0.5%
Nucor Corp. 47,000 1,974,000
Steel Dynamics, Inc. (a) 56,100 764,363
2,738,363
PACKAGING & CONTAINERS - 0.5%
Owens-Illinois, Inc. (a) 35,600 1,143,650
Silgan Holdings, Inc. (a) 39,900 1,097,250
2,240,900
TOTAL BASIC INDUSTRIES 12,097,082
CONSTRUCTION & REAL ESTATE -
5.3%
BUILDING MATERIALS - 4.6%
Armstrong World Industries, 93,300 6,216,113
Inc.
Carlisle Companies, Inc. 84,100 3,726,681
Dayton Superior Corp. Class A 59,000 1,150,500
(a)
Elcor Corp. 129,000 3,982,875
Lone Star Industries, Inc. 41,400 3,133,463
Sherwin-Williams Co. 105,300 2,987,888
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
CONSTRUCTION & REAL ESTATE -
CONTINUED
BUILDING MATERIALS - CONTINUED
Southdown, Inc. 15,048 $ 876,546
York International Corp. 31,400 1,318,800
23,392,866
CONSTRUCTION - 0.5%
Jacobs Engineering Group, 64,200 2,419,538
Inc. (a)
REAL ESTATE INVESTMENT TRUSTS
- - 0.2%
Alexandria Real Estate 13,800 426,075
Equities, Inc.
Duke Realty Investments, Inc. 29,700 673,819
1,099,894
TOTAL CONSTRUCTION & REAL 26,912,298
ESTATE
DURABLES - 8.9%
AUTOS, TIRES, & ACCESSORIES -
2.1%
Casey's General Stores, Inc. 120,500 1,671,938
Danaher Corp. 119,300 5,443,063
Pep Boys-Manny, Moe & Jack 83,100 1,173,788
SPX Corp. 38,155 2,212,970
10,501,759
CONSUMER ELECTRONICS - 1.4%
Black & Decker Corp. 84,100 4,557,169
Newell Co. 63,100 2,792,175
7,349,344
HOME FURNISHINGS - 3.2%
Bassett Furniture Industries, 36,100 911,525
Inc.
Knoll, Inc. (a) 81,000 2,187,000
Leggett & Platt, Inc. 382,500 8,677,969
Maxim Group, Inc. (a) 8,100 158,456
Miller (Herman), Inc. 125,200 2,660,500
OSF, Inc. (a) 86,300 633,296
Restoration Hardware, Inc. 43,200 1,206,900
16,435,646
TEXTILES & APPAREL - 2.2%
Kellwood Co. 25,800 696,600
Liz Claiborne, Inc. 45,700 1,548,088
Mohawk Industries, Inc. (a) 76,150 2,841,347
Shaw Industries, Inc. 27,100 548,775
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
DURABLES - CONTINUED
TEXTILES & APPAREL - CONTINUED
Stride Rite Corp. 52,200 $ 463,275
Unifi, Inc. 100,100 1,926,925
WestPoint Stevens, Inc. Class 107,300 3,219,000
A (a)
11,244,010
TOTAL DURABLES 45,530,759
ENERGY - 2.8%
ENERGY SERVICES - 0.3%
ENSCO International, Inc. 29,400 281,138
Halliburton Co. 22,500 660,938
Transocean Offshore, Inc. 26,000 641,875
1,583,951
OIL & GAS - 2.5%
Apache Corp. 54,000 1,242,000
Coastal Corp. (The) 17,400 606,825
Conoco, Inc. Class A (a) 17,600 416,900
Enron Oil & Gas Co. 45,200 678,000
Nuevo Energy Co. (a) 75,200 1,113,900
Oryx Energy Co. (a) 58,800 812,175
Seagull Energy Corp. (a) 114,400 936,650
Tosco Corp. 136,400 3,563,450
Ultramar Diamond Shamrock 69,800 1,797,350
Corp.
USX-Marathon Group 29,600 839,900
Valero Energy Corp. 42,400 890,400
12,897,550
TOTAL ENERGY 14,481,501
FINANCE - 9.0%
BANKS - 3.3%
Amcore Financial, Inc. 13,200 311,025
AmSouth Bancorp 89,950 3,800,388
Banco Santander Puerto Rico 4,800 110,400
(a)
Centura Banks, Inc. 10,900 741,200
Comerica, Inc. 42,350 2,731,575
Marshall & Ilsley Corp. 43,100 2,195,406
North Fork Bancorp, Inc. 66,440 1,399,392
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
FINANCE - CONTINUED
BANKS - CONTINUED
U.S. Bancorp 62,330 $ 2,294,523
Westamerica Bancorp 51,500 1,860,438
Zions Bancorp 28,000 1,414,000
16,858,347
CREDIT & OTHER FINANCE - 1.8%
Associates First Capital 56,300 4,384,363
Corp.
Household International, Inc. 32,800 1,283,300
Providian Financial Corp. 40,100 3,681,681
9,349,344
INSURANCE - 3.6%
AFLAC, Inc. 75,700 2,791,438
Allmerica Financial Corp. 57,800 3,189,838
Ambac Financial Group, Inc. 32,100 1,958,100
American Bankers Insurance 40,800 1,851,300
Group, Inc.
Hartford Life, Inc. Class A 9,500 520,719
HCC Insurance Holdings, Inc. 26,800 497,475
MBIA, Inc. 12,600 815,850
PAULA Financial 40,100 390,975
Progressive Corp. 8,900 1,320,538
Protective Life Corp. 57,200 2,227,225
Reliastar Financial Corp. 44,995 2,114,765
UNUM Corp. 16,250 875,469
18,553,692
SAVINGS & LOANS - 0.3%
Richmond County Financial 28,000 460,250
Corp.
Webster Financial Corp. 33,400 926,850
1,387,100
TOTAL FINANCE 46,148,483
HEALTH - 9.3%
MEDICAL EQUIPMENT & SUPPLIES
- - 8.5%
Arterial Vascular 75,600 3,694,950
Engineering, Inc. (a)
Becton, Dickinson & Co. 95,300 4,050,250
Biomet, Inc. 31,100 1,189,575
Cardinal Health, Inc. 96,600 6,629,175
Cyberonics, Inc. (a) 57,500 625,313
Guidant Corp. 46,000 3,947,375
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
HEALTH - CONTINUED
MEDICAL EQUIPMENT & SUPPLIES
- - CONTINUED
McKesson Corp. 20,200 $ 1,437,988
Medtronic, Inc. 144,200 9,760,512
Millipore Corp. 95,100 2,674,688
Pall Corp. 126,600 2,943,450
Sofamor/Danek Group, Inc. (a) 17,400 1,945,538
Sybron International, Inc. (a) 188,000 4,676,500
43,575,314
MEDICAL FACILITIES MANAGEMENT
- - 0.8%
Health Management Associates, 171,075 3,710,189
Inc. Class A (a)
TOTAL HEALTH 47,285,503
INDUSTRIAL MACHINERY &
EQUIPMENT - 5.1%
ELECTRICAL EQUIPMENT - 2.1%
American Power Conversion 60,100 2,486,638
Corp. (a)
Emerson Electric Co. 37,900 2,463,500
General Electric Co. 19,100 1,728,550
VWR Scientific Products Corp. 130,200 4,068,750
(a)
10,747,438
INDUSTRIAL MACHINERY &
EQUIPMENT - 2.3%
ASM Lithography Holdings N V 60,700 1,718,569
(a)
Gorman-Rupp Co. 43,000 701,438
Illinois Tool Works, Inc. 19,100 1,214,044
Kaydon Corp. 32,900 1,161,781
Kuhlman Corp. 66,600 1,856,475
Mark IV Industries, Inc. 42,900 723,938
PRI Automation, Inc. 122,900 2,949,600
Stanley Works 46,300 1,415,044
11,740,889
POLLUTION CONTROL - 0.7%
Allied Waste Industries, Inc. 33,635 685,313
(a)
Eastern Environmental 70,700 1,537,725
Services, Inc. (a)
Waste Management, Inc. 29,685 1,272,744
3,495,782
TOTAL INDUSTRIAL MACHINERY & 25,984,109
EQUIPMENT
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
MEDIA & LEISURE - 13.0%
BROADCASTING - 7.0%
CBS Corp. 96,300 $ 2,870,944
Chum Ltd. Class B 1,600 37,050
Clear Channel Communications, 60,700 2,837,725
Inc. (a)
Cox Communications, Inc. 17,400 916,763
Class A (a)
Fox Entertainment Group, Inc. 45,900 1,084,388
(a)
Heftel Broadcasting Corp. 82,700 3,855,888
Class A (a)
Jacor Communications, Inc. 94,300 5,487,081
Class A (a)
MediaOne Group, Inc. 29,700 1,202,850
Nielsen Media Research, Inc. 67,000 1,005,000
(a)
RCN Corp. (a) 29,400 499,800
Univision Communications, 83,400 2,335,200
Inc. Class A (a)
USA Networks, Inc. (a) 214,000 6,754,375
Westwood One, Inc. (a) 251,100 6,654,150
35,541,214
ENTERTAINMENT - 1.9%
Cinar Films, Inc. Class B 77,800 1,725,449
(sub. vtg.) (a)
Pixar (a) 61,500 3,051,938
Premier Parks, Inc. (a) 158,500 4,299,313
Tele-Communications, Inc. 38,100 754,856
(TCI Ventures Group) Series
A (a)
9,831,556
LEISURE DURABLES & TOYS - 2.3%
Harley-Davidson, Inc. 172,600 7,216,838
Mattel, Inc. 133,900 4,627,919
11,844,757
PUBLISHING - 0.1%
Times Mirror Co. Class A 13,100 767,988
RESTAURANTS - 1.7%
CKE Restaurants, Inc. 114,710 2,803,226
Cracker Barrel Old Country 51,500 1,197,375
Store, Inc.
Papa John's International, 38,700 1,622,981
Inc. (a)
Starbucks Corp. (a) 66,200 3,053,475
8,677,057
TOTAL MEDIA & LEISURE 66,662,572
NONDURABLES - 5.2%
AGRICULTURE - 0.3%
Michael Foods, Inc. 54,200 1,361,775
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
NONDURABLES - CONTINUED
BEVERAGES - 0.7%
Coca-Cola Bottling Co. 10,300 $ 598,044
Consolidated
Whitman Corp. 117,300 2,653,913
3,251,957
FOODS - 3.3%
American Italian Pasta Co. 31,300 790,325
Class A (a)
Dean Foods Co. 95,300 4,336,150
Earthgrains Co. 50,500 1,622,313
Flowers Industries, Inc. 60,600 1,382,438
Interstate Bakeries Corp. 77,400 2,031,750
Keebler Foods Co. (a) 13,000 437,938
Suiza Foods Corp. (a) 48,300 2,288,213
Tootsie Roll Industries, Inc. 35,300 1,345,813
Wrigley (Wm.) Jr. Co. 30,500 2,687,813
16,922,753
HOUSEHOLD PRODUCTS - 0.6%
Clorox Co. 20,100 2,232,356
First Brands Corp. 26,100 977,119
3,209,475
TOBACCO - 0.3%
RJR Nabisco Holdings Corp. 55,200 1,590,450
TOTAL NONDURABLES 26,336,410
RETAIL & WHOLESALE - 8.5%
APPAREL STORES - 1.5%
Abercrombie & Fitch Co. Class 29,900 1,674,400
A (a)
Bon-Ton Stores, Inc. (a) 156,300 1,191,788
Stage Stores, Inc. (a) 69,000 793,500
TJX Companies, Inc. 161,200 4,130,750
7,790,438
DRUG STORES - 1.0%
CVS Corp. 58,338 2,880,439
Walgreen Co. 38,400 2,061,600
4,942,039
GENERAL MERCHANDISE STORES -
2.1%
Consolidated Stores Corp. (a) 40,726 875,609
Dollar Tree Stores, Inc. (a) 79,075 3,588,028
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
RETAIL & WHOLESALE - CONTINUED
GENERAL MERCHANDISE STORES -
CONTINUED
Nordstrom, Inc. 58,800 $ 2,190,300
Saks Holdings, Inc. (a) 154,498 4,248,695
10,902,632
GROCERY STORES - 2.6%
Meyer (Fred), Inc. (a) 63,300 3,220,388
Safeway, Inc. (a) 105,300 5,561,156
U.S. Foodservice (a) 94,660 4,348,444
13,129,988
RETAIL & WHOLESALE,
MISCELLANEOUS - 1.3%
Action Performance Companies, 72,400 2,642,600
Inc. (a)
Bed Bath & Beyond, Inc. (a) 53,200 1,659,175
Staples, Inc. (a) 44,900 1,568,694
Zale Corp. (a) 25,000 715,625
6,586,094
TOTAL RETAIL & WHOLESALE 43,351,191
SERVICES - 4.2%
ADVERTISING - 1.8%
ADVO, Inc. (a) 58,600 1,516,275
Interpublic Group of 20,700 1,423,125
Companies, Inc.
Lamar Advertising Co. Class A 27,500 941,875
(a)
Omnicom Group, Inc. 77,500 4,141,406
Outdoor Systems, Inc. (a) 47,800 1,290,600
9,313,281
PRINTING - 0.1%
Schawk, Inc. Class A 49,400 710,125
SERVICES - 2.3%
Administaff, Inc. (a) 38,100 1,031,081
Borg-Warner Security Corp. 196,100 3,591,081
Pittston Co. (Brinks Group) 31,200 936,000
Service Corp. International 163,700 6,118,288
11,676,450
TOTAL SERVICES 21,699,856
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TECHNOLOGY - 14.1%
COMMUNICATIONS EQUIPMENT - 1.1%
Andrew Corp. (a) 51,700 $ 827,200
Ascend Communications, Inc. 58,400 3,281,350
(a)
Aspect Telecommunications 38,500 729,094
Corp. (a)
Dialogic Corp. (a) 14,600 328,500
Intermedia Communications, 32,400 558,900
Inc. (a)
5,725,044
COMPUTER SERVICES & SOFTWARE
- - 5.5%
America Online, Inc. 46,000 4,027,875
Autodesk, Inc. 27,500 1,000,313
BMC Software, Inc. 20,000 1,021,250
Cadence Design Systems, Inc. 69,300 1,949,063
(a)
CNET, Inc. (a) 24,200 1,284,113
Compuware Corp. (a) 19,700 1,226,325
Electronics for Imaging, Inc. 62,400 1,673,100
(a)
International Telecom Data 35,200 866,800
Systems, Inc.
Intuit, Inc. (a) 19,100 1,105,413
Keane, Inc. (a) 118,800 3,415,500
Legato Systems, Inc. (a) 48,100 2,299,781
Netscape Communications Corp. 21,000 777,000
(a)
Sabre Group Holdings, Inc. 20,700 821,531
Class A (a)
Shared Medical Systems Corp. 11,700 612,788
Siebel Systems, Inc. (a) 56,378 1,367,167
Sportsline USA, Inc. 43,600 752,100
Technology Solutions, Inc. (a) 35,150 327,334
Veritas Software Corp. (a) 32,700 1,953,825
Wang Laboratories, Inc. (a) 41,500 1,058,250
Wind River Systems, Inc. (a) 9,500 442,938
27,982,466
COMPUTERS & OFFICE EQUIPMENT
- - 2.3%
Apple Computer, Inc. (a) 35,500 1,133,781
Comverse Technology, Inc. (a) 37,090 2,132,675
Ingram Micro, Inc. Class A (a) 45,000 1,912,500
Lexmark International Group, 45,300 3,459,788
Inc. (a)
Quantum Corp. (a) 136,800 3,026,700
11,665,444
ELECTRONIC INSTRUMENTS - 3.9%
Applied Materials, Inc. (a) 111,100 4,305,125
KLA-Tencor Corp. (a) 91,000 3,099,688
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TECHNOLOGY - CONTINUED
ELECTRONIC INSTRUMENTS -
CONTINUED
Novellus Systems, Inc. (a) 43,300 $ 2,148,763
Teradyne, Inc. (a) 161,500 5,178,094
Thermoquest Corp. (a) 90,500 921,969
Varian Associates, Inc. 70,800 2,801,025
Waters Corp. (a) 20,700 1,596,488
20,051,152
ELECTRONICS - 1.3%
International Rectifier Corp. 62,100 582,188
(a)
Linear Technology Corp. 90,100 6,312,631
6,894,819
TOTAL TECHNOLOGY 72,318,925
UTILITIES - 3.3%
CELLULAR - 0.4%
Nextel Communications, Inc. 25,600 550,400
Class A (a)
SkyTel Communications, Inc. 63,400 1,323,475
(a)
1,873,875
ELECTRIC UTILITY - 1.8%
AES Corp. (a) 40,300 1,843,725
CMS Energy Corp. 22,800 1,111,500
Duke Energy Corp. 30,100 1,883,131
Entergy Corp. 37,900 1,110,944
IPALCO Enterprises, Inc. 32,200 1,614,025
PG&E Corp. 54,500 1,686,094
9,249,419
GAS - 0.4%
Enron Corp. 40,700 2,139,294
TELEPHONE SERVICES - 0.7%
COMSAT Corp. Series 1 15,000 534,375
e.spire Communications, Inc. 26,900 216,881
(a)
MCI WorldCom, Inc. (a) 27,600 1,628,400
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
UTILITIES - CONTINUED
TELEPHONE SERVICES - CONTINUED
U.S. LEC Corp. Class A 10,000 $ 113,750
WinStar Communications, Inc. 40,600 1,131,725
(a)
3,625,131
TOTAL UTILITIES 16,887,719
TOTAL COMMON STOCKS 471,820,065
(Cost $417,398,128)
CASH EQUIVALENTS - 7.7%
MATURITY AMOUNT
Investments in repurchase $ 39,302,731 39,297,000
agreements (U.S. Treasury
obligations), in a joint
trading account at 5.25%,
dated 11/30/98 due 12/1/98
(Cost $39,297,000)
TOTAL INVESTMENT IN $ 511,117,065
SECURITIES - 100%
(Cost $456,695,128)
</TABLE>
LEGEND
(a) Non-income producing
INCOME TAX INFORMATION
At November 30, 1998, the aggregate cost of investment securities for
income tax purposes was $459,794,629. Net unrealized appreciation
aggregated $51,322,436, of which $79,201,487 related to appreciated
investment securities and $27,879,051 related to depreciated
investment securities.
The fund hereby designates approximately $8,534,000 as a capital gain
dividend for the purpose of the dividend paid deduction.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1998
ASSETS
Investment in securities, at $ 511,117,065
value (including repurchase
agreements of $39,297,000)
(cost $456,695,128) - See
accompanying schedule
Receivable for investments 3,077,868
sold
Receivable for fund shares 613,356
sold
Dividends receivable 299,107
TOTAL ASSETS 515,107,396
LIABILITIES
Payable to custodian bank $ 73,563
Payable for investments 5,579,491
purchased
Payable for fund shares 953,894
redeemed
Accrued management fee 244,421
Distribution fees payable 229,416
Other payables and accrued 190,251
expenses
TOTAL LIABILITIES 7,271,036
NET ASSETS $ 507,836,360
Net Assets consist of:
Paid in capital $ 435,463,105
Accumulated undistributed net 17,951,591
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 54,421,664
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS $ 507,836,360
STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
NOVEMBER 30, 1998
CALCULATION OF MAXIMUM $13.71
OFFERING PRICE CLASS A: NET
ASSET VALUE and redemption
price per share
($11,339,903 (divided by)
827,153 shares)
Maximum offering price per $14.55
share (100/94.25 of $13.71)
CLASS T: NET ASSET VALUE and $13.75
redemption price per share
($367,035,311 (divided by)
26,690,831 shares)
Maximum offering price per $14.25
share (100/96.50 of $13.75)
CLASS B: NET ASSET VALUE and $13.58
offering price per share
($82,316,683 (divided by)
6,059,999 shares) A
CLASS C: NET ASSET VALUE, $13.64
offering price and
redemption price per share
($12,593,155 (divided by)
923,506 shares) A
INSTITUTIONAL CLASS: NET $13.82
ASSET VALUE, offering price
and redemption price per
share ($34,551,308 (divided
by) 2,500,499 shares)
A REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1998
INVESTMENT INCOME $ 2,998,487
Dividends
Interest 1,251,485
TOTAL INCOME 4,249,972
EXPENSES
Management fee $ 2,834,821
Transfer agent fees 1,093,744
Distribution fees 2,602,908
Accounting fees and expenses 288,852
Non-interested trustees' 1,725
compensation
Custodian fees and expenses 37,703
Registration fees 105,730
Audit 39,923
Legal 29,250
Miscellaneous 20,598
Total expenses before 7,055,254
reductions
Expense reductions (154,837) 6,900,417
NET INVESTMENT INCOME (LOSS) (2,650,445)
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 21,448,905
Foreign currency transactions (1,073) 21,447,832
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 16,594,363
Assets and liabilities in (273) 16,594,090
foreign currencies
NET GAIN (LOSS) 38,041,922
NET INCREASE (DECREASE) IN $ 35,391,477
NET ASSETS RESULTING FROM
OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED NOVEMBER 30, 1998 YEAR ENDED NOVEMBER 30, 1997
INCREASE (DECREASE) IN NET
ASSETS
Operations Net investment $ (2,650,445) $ (1,867,851)
income (loss)
Net realized gain (loss) 21,447,832 55,118,706
Change in net unrealized 16,594,090 22,620,104
appreciation (depreciation)
NET INCREASE (DECREASE) IN 35,391,477 75,870,959
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (43,421,664) (3,481,786)
from net realized gains
Share transactions - net 94,908,223 123,963,444
increase (decrease)
TOTAL INCREASE (DECREASE) 86,878,036 196,352,617
IN NET ASSETS
NET ASSETS
Beginning of period 420,958,324 224,605,707
End of period $ 507,836,360 $ 420,958,324
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C> <C>
YEARS ENDED NOVEMBER 30,
1998 1997 1996 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 14.04 $ 11.70 $ 10.74
period
Income from Investment
Operations
Net investment income (loss) (.05) (.09) (.01)
D
Net realized and unrealized 1.17 2.64 .97
gain (loss)
Total from investment 1.12 2.55 .96
operations
Less Distributions
From net realized gain (1.45) (.21) -
Net asset value, end of period $ 13.71 $ 14.04 $ 11.70
TOTAL RETURN B, C 9.07% 22.24% 8.94%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 11,340 $ 4,670 $ 1,239
(000 omitted)
Ratio of expenses to average 1.30% 1.62% F 1.56% A, F
net assets
Ratio of expenses to average 1.27% G 1.58% G 1.56% A
net assets after expense
reductions
Ratio of net investment (.36)% (.71)% (.33)% A
income to average net assets
Portfolio turnover 139% 208% 101% A
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A
SHARES) TO NOVEMBER 30, 1996.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C>
YEARS ENDED NOVEMBER 30,
1998 1997 1996 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 14.09 $ 11.70 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) (.07) (.07) (.03)
D
Net realized and unrealized 1.17 2.64 1.73
gain (loss)
Total from investment 1.10 2.57 1.70
operations
Less Distributions
From net realized gain (1.44) (.18) -
Net asset value, end of period $ 13.75 $ 14.09 $ 11.70
TOTAL RETURN B, C 8.87% 22.35% 17.00%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 367,035 $ 326,642 $ 187,040
(000 omitted)
Ratio of expenses to average 1.42% 1.48% 1.60% A
net assets
Ratio of expenses to average 1.39% F 1.44% F 1.60% A
net assets after expense
reductions
Ratio of net investment (.51)% (.53)% (.37)% A
income to average net assets
Portfolio turnover 139% 208% 101% A
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD FEBRUARY 20, 1996 (COMMENCEMENT OF SALE OF CLASS T
SHARES) TO NOVEMBER 30, 1996.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C>
YEARS ENDED NOVEMBER 30,
1998 1997 1996 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 13.94 $ 11.61 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) (.14) (.14) (.10)
D
Net realized and unrealized 1.17 2.62 1.71
gain (loss)
Total from investment 1.03 2.48 1.61
operations
Less Distributions
From net realized gain (1.39) (.15) -
Net asset value, end of period $ 13.58 $ 13.94 $ 11.61
TOTAL RETURN B, C 8.38% 21.67% 16.10%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 82,317 $ 58,758 $ 32,727
(000 omitted)
Ratio of expenses to average 1.94% 2.03% 2.38% A
net assets
Ratio of expenses to average 1.91% F 1.98% F 2.37% A, F
net assets after expense
reductions
Ratio of net investment (1.02)% (1.08)% (1.14)% A
income to average net assets
Portfolio turnover 139% 208% 101% A
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE
AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD FEBRUARY 20, 1996 (COMMENCEMENT OF SALE OF CLASS B
SHARES) TO NOVEMBER 30, 1996.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - CLASS C
YEARS ENDED NOVEMBER 30,
1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 14.08 $ 14.16
period
Income from Investment
Operations
Net investment income (loss) (.15) (.01)
D
Net realized and unrealized 1.15 (.07) H
gain (loss)
Total from investment 1.00 (.08)
operations
Less Distributions
From net realized gain (1.44) -
Net asset value, end of period $ 13.64 $ 14.08
TOTAL RETURN B, C 8.09% (.56)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 12,593 $ 345
(000 omitted)
Ratio of expenses to average 2.15% F 2.50% A, F
net assets
Ratio of expenses to average 2.11% G 2.40% A, G
net assets after expense
reductions
Ratio of net investment (1.16)% (1.07)% A
income to average net assets
Portfolio turnover 139% 208%
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE
AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD NOVEMBER 3, 1997 (COMMENCEMENT OF SALE OF CLASS C
SHARES) TO NOVEMBER 30, 1997.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
H THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH
THE AGGREGATE NET GAIN ON INVESTMENTS FOR THE PERIOD DUE TO THE TIMING
OF SALES AND REPURCHASES OF CLASS SHARES IN RELATION TO FLUCTUATING
MARKET VALUES OF THE INVESTMENTS OF THE FUND.
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
YEARS ENDED NOVEMBER 30,
1998 1997 1996 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 14.12 $ 11.70 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) .01 .01 (.02)
D
Net realized and unrealized 1.18 2.63 1.72
gain (loss)
Total from investment 1.19 2.64 1.70
operations
Less Distributions
From net realized gain (1.49) (.22) -
Net asset value, end of period $ 13.82 $ 14.12 $ 11.70
TOTAL RETURN B, C 9.60% 23.04% 17.00%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 34,551 $ 30,542 $ 3,600
(000 omitted)
Ratio of expenses to average .87% .91% 1.50% A, F
net assets
Ratio of expenses to average .84% G .84% G 1.50% A
net assets after expense
reductions
Ratio of net investment .04% .08% (.27)% A
income to average net assets
Portfolio turnover 139% 208% 101% A
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD FEBRUARY 20, 1996 (COMMENCEMENT OF SALE OF
INSTITUTIONAL CLASS SHARES) TO NOVEMBER 30, 1996.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1998
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Mid Cap Fund (the fund) is a fund of Fidelity Advisor
Series I(the trust) and is authorized to issue an unlimited number of
shares. The trust is registered under the Investment Company Act of
1940, as amended (the 1940 Act), as an open-end management investment
company organized as a Massachusetts business trust.
The fund offers Class A, Class T, Class B, Class C, and Institutional
Class shares, each of which has equal rights as to assets and voting
privileges. Class B shares will automatically convert to Class A
shares after a holding period of seven years from the initial date of
purchase. Each class has exclusive voting rights with respect to
matters that affect that class. Investment income, realized and
unrealized capital gains and losses, the common expenses of the fund,
and certain fund-level expense reductions, if any, are allocated on a
pro rata basis to each class based on the relative net assets of each
class to the total net assets of the fund. Each class of shares
differs in its respective distribution, transfer agent, and certain
other class-specific fees, expenses, and expense reductions.
The financial statements have been prepared in conformity with
generally accepted accounting principles which require management to
make certain estimates and assumptions at the date of the financial
statements. The following summarizes the significant accounting
policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Securities for which exchange
quotations are not readily available (and in certain cases debt
securities which trade on an exchange) are valued primarily using
dealer-supplied valuations or at their fair value as determined in
good faith under consistently applied procedures under the general
supervision of the Board of Trustees. Short-term securities with
remaining maturities of sixty days or less for which quotations are
not readily available are valued at amortized cost or original cost
plus accrued interest, both of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchase
and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
date and settlement on purchases and sales of securities. The effects
of changes in foreign currency exchange rates on investments in
securities are included with the net realized and unrealized gain or
loss on investment securities.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent that it distributes substantially all of
its taxable income for the fiscal year. The schedules of investments
include information regarding income taxes under the caption "Income
Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend
date, except certain dividends from foreign securities where the
ex-dividend date may have passed, are recorded as soon as the fund is
informed of the ex-dividend date. Non-cash dividends included in
dividend income, if any, are recorded at the fair market value of the
securities received. Interest income is accrued as earned. Investment
income is recorded net of foreign taxes withheld where recovery of
such taxes is uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date. Income dividends and capital gain distributions are
declared separately for each class.
Income and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. These differences, which may result in
distribution reclassifications, are primarily due to differing
treatments for litigation proceeds, passive foreign investment
companies (PFIC), non-taxable dividends, net operating losses and
losses deferred due to wash sales and excise tax regulations. The fund
also utilized earnings and profits distributed to shareholders on
redemption of shares as a part of the dividends paid deduction for
income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Accumulated undistributed net realized gain (loss) on investments and
foreign currency transactions may include temporary book and tax basis
differences that will reverse in a subsequent period. Any taxable gain
remaining at fiscal year end is distributed in the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the
2. OPERATING POLICIES - CONTINUED
FOREIGN CURRENCY CONTRACTS - CONTINUED
contracts' terms. The U.S. dollar value of foreign currency contracts
is determined using contractual currency exchange rates established at
the time of each trade.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other
affiliated entities of Fidelity Management & Research Company (FMR),
may transfer uninvested cash balances into one or more joint trading
accounts. These balances are invested in one or more repurchase
agreements for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are
marked-to-market daily and maintained at a value at least equal to the
principal amount of the repurchase agreement (including accrued
interest). FMR, the fund's investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $662,586,365 and $631,446,849, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus a
fixed individual fund fee rate applied to the average net assets of
the fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds advised by FMR. The rates ranged from .2500% to .5200% for the
period. The annual individual fund fee rate is .30%. In the event that
these rates were lower than the contractual rates in effect during the
period, FMR voluntarily implemented the above rates, as they resulted
in the same or a lower management fee. For the period, the management
fee was equivalent to an annual rate of .59% of average net assets .
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the
1940 Act, the Trustees have adopted separate distribution plans with
respect to each class of shares (collectively referred to as "the
Plans"). Under certain of the Plans, the class pays Fidelity
Distributors Corporation (FDC), an affiliate of FMR, a distribution
and service fee. A portion of this fee may be reallowed to securities
dealers, banks, and other financial institutions for the distribution
of each class of shares and providing shareholder support services.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
DISTRIBUTION AND SERVICE PLAN - CONTINUED
For the period, this fee was based on the following annual rates of
the average net assets of each applicable class:
CLASS A .25%
CLASS T .50%
CLASS B 1.00% *
CLASS C 1.00% *
* .75% REPRESENTS A DISTRIBUTION FEE AND .25% REPRESENTS A SHAREHOLDER
SERVICE FEE.
For the period, each class paid FDC the following amounts, a portion
of which was retained by FDC.
PAID TO FDC RETAINED BY FDC
CLASS A $ 20,451 $ 27
CLASS T 1,786,000 94,121
CLASS B 731,591 549,020
CLASS C 64,866 64,456
$ 2,602,908 $ 707,624
Under the Plans, FMR may use its resources to pay administrative and
promotional expenses related to the sale of each class' shares. The
Plans also authorize payments to third parties that assist in the sale
of each class' shares or render shareholder support services. For the
period, the following amounts were paid to third parties under the
Plans:
CLASS A $ 5,461
CLASS T 101,845
CLASS B 31,287
CLASS C 11,743
INSTITUTIONAL CLASS 5,883
SALES LOAD. FDC receives a front-end sales charge of up to 5.75% for
selling Class A shares, and 3.50% for selling Class T shares of the
fund. FDC receives the proceeds of contingent deferred sales charges
levied on Class B share redemptions occurring within six years of
purchase and Class C share redemptions occurring within one year of
purchase. Contingent deferred sales charges are based on declining
rates ranging from 5% to 1% for Class B and 1% for Class C, of the
lesser of the cost of shares at the initial date of purchase or the
net asset value of the redeemed shares, excluding any reinvested
dividends and capital gains. In addition, purchases of Class A and
Class T shares that were subject to a finder's fee bear a contingent
deferred sales charge on assets that do not remain in the fund for at
least one year. The Class A and Class T contingent deferred
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
SALES LOAD - CONTINUED
sales charge is based on 0.25% of the lesser of the cost of shares at
the initial date of purchase or the net asset value of the redeemed
shares, excluding any reinvested dividends and capital gains. A
portion of the sales charges paid to FDC are paid to securities
dealers, banks and other financial institutions.
For the period, sales charge amounts paid to and retained by FDC were
as follows:
PAID TO FDC RETAINED BY FDC
CLASS A $ 119,088 $ 33,806
CLASS T 459,186 163,750
CLASS B 138,632 138,632 *
CLASS C 2,300 2,300 *
* WHEN CLASS B AND CLASS C SHARES ARE INITIALLY SOLD, FDC PAYS
COMMISSION FROM ITS OWN RESOURCES TO
DEALERS, BANKS AND OTHER FINANCIAL INSTITUTIONS THROUGH WHICH THE
SALES ARE MADE.
TRANSFER AGENT FEES. Fidelity Investments Institutional Operations
Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend
disbursing and shareholder servicing agent for each class of the fund.
FIIOC receives account fees and asset-based fees that vary according
to the account size and type of account of the shareholders of the
respective classes of the fund. FIIOC pays for typesetting, printing
and mailing of all shareholder reports, except proxy statements. For
the period, the following amounts were paid to FIIOC:
AMOUNT % OF AVERAGE NET ASSETS
CLASS A $ 23,608 .29
CLASS T 814,424 .23
CLASS B 178,766 .24
CLASS C 17,801 .27
INSTITUTIONAL CLASS 59,145 .17
$ 1,093,744
ACCOUNTING FEES. Fidelity Service Company, Inc., an affiliate of FMR,
maintains the fund's accounting records. The fee is based on the level
of average net assets for the month plus out-of-pocket expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $121,140 for the
period.
5. EXPENSE REDUCTIONS.
FMR agreed to reimburse certain transfer agent, registration and other
class specific expenses for Class C. For the period, the reimbursement
reduced these expenses by $362.
FMR has also directed certain portfolio trades to brokers who paid a
portion of the fund's expenses. For the period, the fund's expenses
were reduced by $151,928 under this arrangement.
In addition, the fund has entered into an arrangement with its
custodian whereby credits realized as a result of uninvested cash
balances were used to reduce a portion of expenses. During the period,
the fund's custodian fees were reduced by $2,547 under this
arrangement.
6. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
YEARS ENDED NOVEMBER 30,
1998 1997
FROM NET REALIZED GAIN
CLASS A $ 509,696 $ 23,887
CLASS T 33,726,237 2,939,982
CLASS B 5,942,258 441,965
CLASS C 66,029 -
INSTITUTIONAL CLASS 3,177,444 75,952
$ 43,421,664 $ 3,481,786
7. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SHARES DOLLARS
YEAR ENDED NOVEMBER 30, YEAR ENDED NOVEMBER 30, YEAR ENDED NOVEMBER 30, YEAR ENDED NOVEMBER 30,
1998 1997 A 1998 1997 A
CLASS A Shares sold 605,274 303,139 $ 8,283,209 $ 3,978,873
Reinvestment of distributions 38,750 2,096 480,632 23,555
Shares redeemed (149,559) (78,508) (2,024,735) (1,033,803)
Net increase (decrease) 494,465 226,727 $ 6,739,106 $ 2,968,625
CLASS T Shares sold 11,223,902 18,242,441 $ 153,194,207 $ 227,562,753
Reinvestment of distributions 2,565,624 246,910 31,975,856 2,785,068
Shares redeemed (10,288,334) (11,288,106) (139,358,688) (142,250,679)
Net increase (decrease) 3,501,192 7,201,245 $ 45,811,375 $ 88,097,142
CLASS B Shares sold 2,302,521 1,907,677 $ 31,321,307 $ 24,432,331
Reinvestment of distributions 425,511 37,955 5,260,655 425,863
Shares redeemed (882,420) (549,081) (11,531,684) (6,719,610)
Net increase (decrease) 1,845,612 1,396,551 $ 25,050,278 $ 18,138,584
CLASS C Shares sold 981,412 24,521 $ 13,382,594 $ 343,450
Reinvestment of distributions 4,909 - 61,138 -
Shares redeemed (87,336) - (1,098,482) -
Net increase (decrease) 898,985 24,521 $ 12,345,250 $ 343,450
INSTITUTIONAL CLASS Shares 1,778,897 7,539,683 $ 24,392,821 $ 88,091,401
sold
Reinvestment of distributions 239,320 5,512 2,980,284 62,017
Shares redeemed (1,680,567) (5,689,999) (22,410,891) (73,737,775)
Net increase (decrease) 337,650 1,855,196 $ 4,962,214 $ 14,415,643
</TABLE>
A SHARE TRANSACTIONS FOR CLASS C ARE FOR THE PERIOD NOVEMBER 3,
1997(COMMENCEMENT OF SALE OF SHARES) TO NOVEMBER 30, 1997.
8. REGISTRATION FEES.
For the period, each class paid the following amounts to register its
shares for sale:
REGISTRATION FEES
CLASS A $ 7,581
CLASS T 57,358
CLASS B 15,658
CLASS C 14,216
INSTITUTIONAL CLASS 10,917
$ 105,730
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Advisor Series I and the Shareholders of
Fidelity Advisor Mid Cap Fund:
In our opinion, the accompanying statements of assets and liabilities,
including the schedule of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of
Fidelity Advisor Mid Cap Fund (a fund of Fidelity Advisor Series I) at
November 30, 1998, and the results of its operations, the changes in
its net assets and the financial highlights for the periods indicated,
in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to
as "financial statements") are the responsibility of the Fidelity
Advisor Mid Cap Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with
generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We
believe that our audits, which included confirmation of securities at
November 30, 1998 by correspondence with the custodian and brokers,
provide a reasonable basis for the opinion expressed above.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
January 13, 1999
DISTRIBUTIONS
The Board of Trustees of Fidelity Advisor Mid Cap Fund voted to pay to
shareholders of record at the opening of business on record date, the
following distributions derived from capital gains realized from sales
of portfolio securities, and dividends derived from net investment
income:
CLASS A
PAY DATE 12/22/97 1/5/98 12/21/98
RECORD DATE 12/19/97 1/2/98 12/18/98
DIVIDENDS - - -
SHORT-TERM
CAPITAL GAINS $1.33 $0.01 $0.07
LONG-TERM
CAPITAL GAINS $0.11 - $0.39
LONG-TERM
CAPITAL GAIN PERCENTAGES:
28% rate 73.80% - -
20% rate 26.20% 100% 100%
CLASS T
PAY DATE 12/22/97 1/5/98 12/21/98
RECORD DATE 12/19/97 1/2/98 12/18/98
DIVIDENDS - - -
SHORT-TERM
CAPITAL GAINS $1.32 $0.01 $0.03
LONG-TERM
CAPITAL GAINS $0.11 - $0.39
LONG-TERM
CAPITAL GAIN PERCENTAGES:
28% rate 73.80% - -
20% rate 26.20% 100% 100%
CLASS B
PAY DATE 12/22/97 1/5/98 12/21/98
RECORD DATE 12/19/97 1/2/98 12/18/98
DIVIDENDS - - -
SHORT-TERM
CAPITAL GAINS $1.27 $0.01 -
LONG-TERM
CAPITAL GAINS $0.11 - $0.39
LONG-TERM
CAPITAL GAIN PERCENTAGES:
28% rate 73.80% - -
20% rate 26.20% 100% 100%
CLASS C
PAY DATE 12/22/97 1/5/98 12/21/98
RECORD DATE 12/19/97 1/2/98 12/18/98
DIVIDENDS - - -
SHORT-TERM
CAPITAL GAINS $1.32 $0.01 $0.02
LONG-TERM
CAPITAL GAINS $0.11 - $0.39
LONG-TERM
CAPITAL GAIN PERCENTAGES:
28% rate 73.80% - -
20% rate 26.20% 100% 100%
A total of 5% of the dividends distributed during the fiscal year
qualifies for the dividends-received deduction for corporate
shareholders.
The fund will notify shareholders in January 1999 of the applicable
percentage for use in preparing 1998 income tax returns.
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.)
Inc., London, England
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Abigail P. Johnson, Vice President
Katherine Collins, Vice President
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
* INDEPENDENT TRUSTEES
ADVISORY BOARD
J. Gary Burkhead
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA
CUSTODIAN
Brown Brothers Harriman & Co.
Boston, MA
FOCUS FUNDS
Fidelity Advisor Consumer
Industries Fund
Fidelity Advisor Cyclical
Industries Fund
Fidelity Advisor Financial
Services Fund
Fidelity Advisor Health Care Fund
Fidelity Advisor Natural
Resources Fund
Fidelity Advisor Technology Fund
Fidelity Advisor Utilities Growth Fund
GROWTH FUNDS
Fidelity Advisor Latin America Fund
Fidelity Advisor Japan Fund
Fidelity Advisor Europe Capital Appreciation Fund
Fidelity Advisor International Capital Appreciation Fund
Fidelity Advisor Overseas Fund
Fidelity Advisor Diversified International Fund
Fidelity Advisor Global Equity Fund
Fidelity Advisor TechnoQuant
Growth Fund
SM
Fidelity Advisor Small Cap Fund
Fidelity Advisor Strategic
Opportunities Fund
Fidelity Advisor Mid Cap Fund
Fidelity Advisor Retirement
Growth Fund
Fidelity Advisor Equity Growth Fund
Fidelity Advisor Large Cap Fund
Fidelity Advisor Dividend Growth Fund
Fidelity Advisor Growth
Opportunities Fund
GROWTH AND INCOME FUNDS
Fidelity Advisor Growth & Income Fund
Fidelity Advisor Equity Income Fund
Fidelity Advisor Asset Allocation Fund
Fidelity Advisor Balanced Fund
TAXABLE INCOME FUNDS
Fidelity Advisor Emerging Markets Income Fund
Fidelity Advisor High Yield Fund
Fidelity Advisor Strategic Income Fund
Fidelity Advisor Mortgage
Securities Fund
Fidelity Advisor Government Investment Fund
Fidelity Advisor Intermediate Bond Fund
Fidelity Advisor Short Fixed-Income Fund
MUNICIPAL FUNDS
Fidelity Advisor Municipal Income Fund
Fidelity Advisor Intermediate Municipal Income Fund
MONEY MARKET FUNDS
Prime Fund
Treasury Fund
Tax-Exempt Fund
(registered trademark)
(2_FIDELITY_LOGOS)FIDELITY ADVISOR
(registered trademark)
MID CAP
FUND - INSTITUTIONAL CLASS
ANNUAL REPORT
NOVEMBER 30, 1998
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over
time.
FUND TALK 6 The manager's review of fund
performance, strategy and
outlook.
INVESTMENT CHANGES 9 A summary of major shifts in
the fund's investments over
the last six months.
INVESTMENTS 10 A complete list of the fund's
investments with their
market values.
FINANCIAL STATEMENTS 21 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 30 Notes to the financial
statements.
REPORT OF INDEPENDENT 37 The auditors' opinion.
ACCOUNTANTS
DISTRIBUTIONS 38
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION
OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS
IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT
INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY ADVISOR FUND, INCLUDING CHARGES
AND EXPENSES, CONTACT YOUR
INVESTMENT PROFESSIONAL FOR A FREE PROSPECTUS. READ IT CAREFULLY
BEFORE YOU INVEST OR SEND MONEY.
Standard & Poor's, S&P and S&P 500 are registered service marks of The
McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity
Distributors Corporation.
Other third party marks appearing herein are the property of their
respective owners.
All other marks appearing herein are registered or unregistered
trademarks or service marks of FMR Corp. or an affiliated company.
This report is printed on recycled paper using soy-based inks.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
The month of November proved to be a strong one for the stock and bond
markets. The Dow Jones Industrial Average reached a record high.
Merger activity, which had lulled during the summer correction, has
increased significantly. Small-cap stocks posted their third
consecutive month of positive returns, as did emerging markets. While
bond returns generally were not at the levels of their equity
counterparts, they were mostly positive nonetheless.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will
greatly reduce your vulnerability to any single decline. We know from
experience, for example, that stock prices have gone up over longer
periods of time, have significantly outperformed other types of
investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through
diversification. A stock mutual fund, for instance, is already
diversified, because it invests in many different companies. You can
increase your diversification further by investing in a number of
different stock funds, or in such other investment categories as
bonds. If you have a short investment time horizon, you might want to
consider moving some of your investment into a money market fund,
which seeks income and a stable share price by investing in
high-quality, short-term investments. Of course, it's important to
remember that there is no assurance that a money market fund will
achieve its goal of maintaining a stable net asset value of $1.00 per
share, and that these types of funds are neither insured nor
guaranteed by any agency of the U.S. government.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases. Of course, you should
consider your financial ability to continue your purchases through
periods of low price levels before undertaking such a strategy.
Remember to contact your investment professional if you need help with
your investments.
Best regards,
Edward C. Johnson 3d
FIDELITY ADVISOR MID CAP FUND - INSTITUTIONAL CLASS
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can
look at the total percentage change in value, the average annual
percentage change or the growth of a hypothetical $10,000 investment.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). If Fidelity had not reimbursed certain class expenses, the
life of fund total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR LIFE OF FUND
1998
FIDELITY ADV MID CAP - INST CL 9.60% 57.77%
S&P MidCap 400 10.40% 61.67%
Mid-Cap Funds Average 3.34% n/a
CUMULATIVE TOTAL RETURNS show Institutional Class' performance in
percentage terms over a set period - in this case, one year or since
the fund started on February 20, 1996. For example, if you had
invested $1,000 in a fund that had a 5% return over the past year, the
value of your investment would be $1,050. You can compare
Institutional Class' returns to the performance of the Standard &
Poor's MidCap 400 Index - a widely recognized, market
capitalization-weighted index of 400 medium capitalization stocks. To
measure how Institutional Class' performance stacked up against its
peers, you can compare it to the mid-cap funds average, which reflects
the performance of mutual funds with similar objectives tracked by
Lipper Analytical Services, Inc. The past one year average represents
a peer group of 309 mutual funds. These benchmarks include reinvested
dividends and capital gains, if any, and exclude the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR LIFE OF FUND
1998
FIDELITY ADV MID CAP - INST CL 9.60% 17.84%
S&P MidCap 400 10.40% 18.88%
Mid-Cap Funds Average 3.34% n/a
AVERAGE ANNUAL RETURNS take Institutional Class' cumulative return and
show you what would have happened
if Institutional Class had performed at a constant rate each year.
$10,000 OVER LIFE OF FUND
FA Mid Cap -CL I S&P MidCap 400
00533 SP004
1996/02/20 10000.00 10000.00
1996/02/29 10180.00 10122.33
1996/03/31 10250.00 10243.60
1996/04/30 10750.00 10556.44
1996/05/31 11260.00 10699.16
1996/06/30 10770.00 10538.56
1996/07/31 10100.00 9825.63
1996/08/31 10780.00 10392.28
1996/09/30 11480.00 10845.38
1996/10/31 11180.00 10876.94
1996/11/30 11700.00 11489.64
1996/12/31 11571.96 11502.39
1997/01/31 11969.58 11934.19
1997/02/28 11755.48 11836.09
1997/03/31 11133.55 11331.52
1997/04/30 11449.61 11625.34
1997/05/31 12428.38 12641.86
1997/06/30 13101.29 12996.97
1997/07/31 14131.04 14283.80
1997/08/31 14110.65 14266.52
1997/09/30 14834.53 15086.56
1997/10/31 14161.63 14430.14
1997/11/30 14396.12 14644.00
1997/12/31 14818.42 15212.33
1998/01/31 14692.93 14922.69
1998/02/28 15925.91 16159.03
1998/03/31 16759.31 16887.81
1998/04/30 16702.22 17196.01
1998/05/31 16165.65 16422.36
1998/06/30 16656.56 16525.99
1998/07/31 16199.90 15885.27
1998/08/31 13243.05 12928.39
1998/09/30 13802.45 14135.25
1998/10/31 14829.93 15398.52
1998/11/30 15777.49 16166.91
IMATRL PRASUN SHR__CHT 19981130 19981216 140052 R00000000000037
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Mid Cap Fund - Institutional Class on
February 20, 1996, when the fund started. As the chart shows, by
November 30, 1998, the value of the investment would have grown to
$15,777 - a 57.77% increase on the initial investment. For comparison,
look at how the Standard & Poor's MidCap 400 Index did over the same
period. With dividends and capital gains, if any, reinvested, the same
$10,000 investment would have grown to $16,167 - a 61.67% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
long-term growth and
short-term volatility. In turn, the
share price and return of a
fund that invests in stocks will
vary. That means if you sell
your shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
When the final bell of the U.S. stock
market sounded on Monday,
November 23, 1998, the Dow
Jones Industrial Average stood at a
record high of 9374.27, serving
notice that the bleak economic
outlook from just a few short months
earlier would not keep positive
investor sentiment down. For the
12-month period ending November
30, 1998, the Dow - an index of
30 blue-chip stocks - returned
18.56%. What caused the
turnaround from the doldrums of
equity performance during the
summer and early fall? A variety of
factors: The economic problems in
Russia, Brazil and other emerging
markets began to dissipate; Asian
markets began to rebound; and,
perhaps most importantly, three
interest-rate cuts late in the period
by the Federal Reserve Board
helped stem the tide of a slowing
U.S. economy. All these factors
culminated in the Dow reaching its
record high late in November, a
peak that outpaced the previous
record set in July by nearly 40 points.
Small-cap stock performance was
still a far cry behind their large-cap
brethren. For the period, the Russell
2000 Index - a popular measure
of small-cap stock performance -
returned -6.62%, significantly
trailing the large-cap weighted
Standard & Poor's 500 Index's
return of 23.66%. Despite the late
rally in the equity market, this kind
of volatility has characterized the
entire year, and when it will level off
is impossible to predict.
An interview with Katherine Collins, Portfolio Manager of Fidelity
Advisor Mid Cap Fund
Q. HOW DID THE FUND PERFORM, KATHERINE?
A. For the 12 months that ended on November 30, 1998, the fund's
Institutional Class shares returned 9.60%. During the same period, the
Standard & Poor's MidCap 400 Index returned 10.40% and the mid-cap
funds average monitored by Lipper Analytical Services returned 3.34%.
Q. WHAT FACTORS AFFECTED PERFORMANCE?
A. The fund's relative performance was helped by my emphasis on media
and leisure companies and my de-emphasis of energy and basic industry
companies, whose stocks generally performed poorly. The fund's
de-emphasis of utility stocks relative to the S&P MidCap index helped
relative performance, although these stocks tend to do better in
uncertain times. I manage the fund to be somewhat more aggressive than
the S&P MidCap index, but it is less aggressive than many of the funds
in the Lipper catgory. It makes sense that in a volatile, uncertain
market, the fund would do better than the Lipper average, but
underperform the S&P MidCap index.
Q. ONE OF YOUR LARGEST SECTOR WEIGHTINGS WAS IN MEDIA AND LEISURE, AT
ABOUT 13% OF INVESTMENTS. WHAT WAS YOUR STRATEGY HERE?
A. This very diverse group encompasses a number of categories,
including broadcasters and cable television companies. Two
broadcasters that were performance leaders were Clear Channel
Communications and Jacor, both of which the fund owned before they
announced merger plans in early October. USA Networks, which owns
cable television networks, and theme-park operator Premier Parks were
two other strong contributors. Another investment that helped in this
group was Harley-Davidson, the motorcycle manufacturer.
Q. YOU ALSO HAVE CONCENTRATIONS IN TECHNOLOGY, FINANCE AND HEALTH.
WHAT HAS BEEN YOUR STRATEGY IN THESE SECTORS?
A. While technology and finance were about 14% and 9% of investments
at the end of the period, respectively, both were under-represented
when compared to the benchmark S&P MidCap index. In technology, I
looked for companies that either had attractive valuations or had
records of strong, recurring revenues. This was a challenge, as many
fast-growing companies had very expensive stock prices. I did find
opportunities in the semiconductor equipment area though this industry
was one of the first hit by the Asian economic crisis and many stocks
lost more than half their value. Companies in which I invested
included KLA-Tencor, Teradyne and Applied Materials. In financial
services, I was concerned about it being late in the economic cycle
and high stock valuations. As a result, I underweighted this sector,
which turned out to be good for the fund when these stocks corrected
sharply in the summer. The health industry stood at about 9% of
investments as of November 30. I tended to emphasize health care
products rather than services.
Q. WERE THERE ANY PARTICULAR DISAPPOINTMENTS?
A. I didn't own enough of two technology companies that had very
strong performance: America Online and BMC Software. Both were
under-represented in the fund, when compared to their weightings in
the S&P MidCap index. Therefore, although owning these stocks was
positive, I should have owned more. Two retailers also held back
performance: Consolidated Stores and Stage Stores. Each ran into
weather problems and problems related to the integration of other
companies they had acquired. Another disappointment was HEALTHSOUTH,
which operates physical therapy centers. It was under pressure from
HMOs, which reimburse it for services, to hold down the fees it
charged them. I sold the fund's HEALTHSOUTH position during the
period.
Q. WHAT IS YOUR OUTLOOK?
A. I think there are still some great investment opportunities within
the mid-cap market, although I am a little less bullish about the
overall domestic economy than I was six months ago. However, I do
think there are companies that will be able to weather the economic
conditions and do well. Mid-cap stock values, in relation to large-cap
values, are cheap on an historical basis. That is a good general
backdrop for investing in mid-caps.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
KATHERINE COLLINS ON THE
CONTINUED GAP BETWEEN THE
PERFORMANCE OF LARGE-CAP
AND MID-CAP STOCKS:
"In recent years, we have seen a
large divergence in the
performance of large-, mid- and
small-cap stocks. In general,
large-cap stocks have done
significantly better.
"The continuing gap has pushed
mid-cap companies to their lowest
valuation levels relative to
large-cap companies in 20 years.
The disparity is even more
remarkable because small- and
mid-cap companies have shown
better earnings performance than
large caps. According to Prudential
Securities, the third quarter of 1998
was the sixth consecutive quarter
in which small- and mid-cap
companies grew earnings faster
than large companies. It has been
shown consistently that stock
prices follow company earnings, yet
this has not been the case for
mid-caps recently.
"I am encouraged by the
continuation of the strong earnings
trends at many mid-cap companies.
Generally, these companies have
more domestic business than large
multi-national corporations, so they
have been somewhat insulated from
international market turmoil. I also
am heartened that the mid-cap
stocks are at low valuations relative
to large stocks. Finally, I continue to
find exciting individual companies
generating superior earnings growth
at decent valuations, which should
translate into good opportunities,
no matter what the mid-cap market
does overall."
FUND FACTS
GOAL: long-term growth of
capital by investing primarily
in common stocks of
companies with
medium-sized market
capitalizations.
START DATE: February 20, 1996
SIZE: as of November 30,
1998, more than $507 million
MANAGER: Katherine Collins,
since January 1997; joined
Fidelity in 1990
(checkmark)
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF NOVEMBER
30, 1998
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE STOCKS 6 MONTHS AGO
Medtronic, Inc. 1.9 1.3
Leggett & Platt, Inc. 1.7 1.5
Harley-Davidson, Inc. 1.4 1.0
USA Networks, Inc. 1.3 0.7
Westwood One, Inc. 1.3 0.6
Cardinal Health, Inc. 1.3 0.6
Linear Technology Corp. 1.2 0.6
Armstrong World Industries, 1.2 0.8
Inc.
Service Corp. International 1.2 0.5
Safeway, Inc. 1.1 1.3
TOP FIVE MARKET SECTORS AS OF
NOVEMBER 30, 1998
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE MARKET SECTORS 6
MONTHS AGO
TECHNOLOGY 14.1 10.4
MEDIA & LEISURE 13.0 12.6
HEALTH 9.3 9.7
FINANCE 9.0 14.1
DURABLES 8.9 6.5
</TABLE>
ASSET ALLOCATION (% OF FUND'S
INVESTMENTS)
AS OF NOVEMBER 30, 1998 * AS OF MAY 31, 1998 **
Row: 1, Col: 1, Value: 92.3
Row: 1, Col: 2, Value: 7.7
Stocks 97.5%
Short-term
investments 2.5%
FOREIGN
INVESTMENTS 1.5%
Stocks 92.3%
Short-term
investments 7.7%
FOREIGN
INVESTMENTS 0.7%
Row: 1, Col: 1, Value: 97.5
Row: 1, Col: 2, Value: 2.5
*
**
INVESTMENTS NOVEMBER 30, 1998
Showing Percentage of Total Value of Investment in Securities
<TABLE>
<CAPTION>
<S> <C> <C> <C>
COMMON STOCKS - 92.3%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 1.2%
AEROSPACE & DEFENSE - 0.4%
Gulfstream Aerospace Corp. (a) 18,700 $ 960,713
Harsco Corp. 31,200 1,010,100
1,970,813
SHIP BUILDING & REPAIR - 0.8%
Avondale Industries, Inc. 54,907 1,516,806
General Dynamics Corp. 45,400 2,636,038
4,152,844
TOTAL AEROSPACE & DEFENSE 6,123,657
BASIC INDUSTRIES - 2.4%
CHEMICALS & PLASTICS - 1.4%
Cytec Industries, Inc. (a) 96,300 2,172,769
IMC Global, Inc. 108,000 2,470,500
Ivex Packaging Corp. (a) 126,900 2,474,550
7,117,819
IRON & STEEL - 0.5%
Nucor Corp. 47,000 1,974,000
Steel Dynamics, Inc. (a) 56,100 764,363
2,738,363
PACKAGING & CONTAINERS - 0.5%
Owens-Illinois, Inc. (a) 35,600 1,143,650
Silgan Holdings, Inc. (a) 39,900 1,097,250
2,240,900
TOTAL BASIC INDUSTRIES 12,097,082
CONSTRUCTION & REAL ESTATE -
5.3%
BUILDING MATERIALS - 4.6%
Armstrong World Industries, 93,300 6,216,113
Inc.
Carlisle Companies, Inc. 84,100 3,726,681
Dayton Superior Corp. Class A 59,000 1,150,500
(a)
Elcor Corp. 129,000 3,982,875
Lone Star Industries, Inc. 41,400 3,133,463
Sherwin-Williams Co. 105,300 2,987,888
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
CONSTRUCTION & REAL ESTATE -
CONTINUED
BUILDING MATERIALS - CONTINUED
Southdown, Inc. 15,048 $ 876,546
York International Corp. 31,400 1,318,800
23,392,866
CONSTRUCTION - 0.5%
Jacobs Engineering Group, 64,200 2,419,538
Inc. (a)
REAL ESTATE INVESTMENT TRUSTS
- - 0.2%
Alexandria Real Estate 13,800 426,075
Equities, Inc.
Duke Realty Investments, Inc. 29,700 673,819
1,099,894
TOTAL CONSTRUCTION & REAL 26,912,298
ESTATE
DURABLES - 8.9%
AUTOS, TIRES, & ACCESSORIES -
2.1%
Casey's General Stores, Inc. 120,500 1,671,938
Danaher Corp. 119,300 5,443,063
Pep Boys-Manny, Moe & Jack 83,100 1,173,788
SPX Corp. 38,155 2,212,970
10,501,759
CONSUMER ELECTRONICS - 1.4%
Black & Decker Corp. 84,100 4,557,169
Newell Co. 63,100 2,792,175
7,349,344
HOME FURNISHINGS - 3.2%
Bassett Furniture Industries, 36,100 911,525
Inc.
Knoll, Inc. (a) 81,000 2,187,000
Leggett & Platt, Inc. 382,500 8,677,969
Maxim Group, Inc. (a) 8,100 158,456
Miller (Herman), Inc. 125,200 2,660,500
OSF, Inc. (a) 86,300 633,296
Restoration Hardware, Inc. 43,200 1,206,900
16,435,646
TEXTILES & APPAREL - 2.2%
Kellwood Co. 25,800 696,600
Liz Claiborne, Inc. 45,700 1,548,088
Mohawk Industries, Inc. (a) 76,150 2,841,347
Shaw Industries, Inc. 27,100 548,775
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
DURABLES - CONTINUED
TEXTILES & APPAREL - CONTINUED
Stride Rite Corp. 52,200 $ 463,275
Unifi, Inc. 100,100 1,926,925
WestPoint Stevens, Inc. Class 107,300 3,219,000
A (a)
11,244,010
TOTAL DURABLES 45,530,759
ENERGY - 2.8%
ENERGY SERVICES - 0.3%
ENSCO International, Inc. 29,400 281,138
Halliburton Co. 22,500 660,938
Transocean Offshore, Inc. 26,000 641,875
1,583,951
OIL & GAS - 2.5%
Apache Corp. 54,000 1,242,000
Coastal Corp. (The) 17,400 606,825
Conoco, Inc. Class A (a) 17,600 416,900
Enron Oil & Gas Co. 45,200 678,000
Nuevo Energy Co. (a) 75,200 1,113,900
Oryx Energy Co. (a) 58,800 812,175
Seagull Energy Corp. (a) 114,400 936,650
Tosco Corp. 136,400 3,563,450
Ultramar Diamond Shamrock 69,800 1,797,350
Corp.
USX-Marathon Group 29,600 839,900
Valero Energy Corp. 42,400 890,400
12,897,550
TOTAL ENERGY 14,481,501
FINANCE - 9.0%
BANKS - 3.3%
Amcore Financial, Inc. 13,200 311,025
AmSouth Bancorp 89,950 3,800,388
Banco Santander Puerto Rico 4,800 110,400
(a)
Centura Banks, Inc. 10,900 741,200
Comerica, Inc. 42,350 2,731,575
Marshall & Ilsley Corp. 43,100 2,195,406
North Fork Bancorp, Inc. 66,440 1,399,392
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
FINANCE - CONTINUED
BANKS - CONTINUED
U.S. Bancorp 62,330 $ 2,294,523
Westamerica Bancorp 51,500 1,860,438
Zions Bancorp 28,000 1,414,000
16,858,347
CREDIT & OTHER FINANCE - 1.8%
Associates First Capital 56,300 4,384,363
Corp.
Household International, Inc. 32,800 1,283,300
Providian Financial Corp. 40,100 3,681,681
9,349,344
INSURANCE - 3.6%
AFLAC, Inc. 75,700 2,791,438
Allmerica Financial Corp. 57,800 3,189,838
Ambac Financial Group, Inc. 32,100 1,958,100
American Bankers Insurance 40,800 1,851,300
Group, Inc.
Hartford Life, Inc. Class A 9,500 520,719
HCC Insurance Holdings, Inc. 26,800 497,475
MBIA, Inc. 12,600 815,850
PAULA Financial 40,100 390,975
Progressive Corp. 8,900 1,320,538
Protective Life Corp. 57,200 2,227,225
Reliastar Financial Corp. 44,995 2,114,765
UNUM Corp. 16,250 875,469
18,553,692
SAVINGS & LOANS - 0.3%
Richmond County Financial 28,000 460,250
Corp.
Webster Financial Corp. 33,400 926,850
1,387,100
TOTAL FINANCE 46,148,483
HEALTH - 9.3%
MEDICAL EQUIPMENT & SUPPLIES
- - 8.5%
Arterial Vascular 75,600 3,694,950
Engineering, Inc. (a)
Becton, Dickinson & Co. 95,300 4,050,250
Biomet, Inc. 31,100 1,189,575
Cardinal Health, Inc. 96,600 6,629,175
Cyberonics, Inc. (a) 57,500 625,313
Guidant Corp. 46,000 3,947,375
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
HEALTH - CONTINUED
MEDICAL EQUIPMENT & SUPPLIES
- - CONTINUED
McKesson Corp. 20,200 $ 1,437,988
Medtronic, Inc. 144,200 9,760,512
Millipore Corp. 95,100 2,674,688
Pall Corp. 126,600 2,943,450
Sofamor/Danek Group, Inc. (a) 17,400 1,945,538
Sybron International, Inc. (a) 188,000 4,676,500
43,575,314
MEDICAL FACILITIES MANAGEMENT
- - 0.8%
Health Management Associates, 171,075 3,710,189
Inc. Class A (a)
TOTAL HEALTH 47,285,503
INDUSTRIAL MACHINERY &
EQUIPMENT - 5.1%
ELECTRICAL EQUIPMENT - 2.1%
American Power Conversion 60,100 2,486,638
Corp. (a)
Emerson Electric Co. 37,900 2,463,500
General Electric Co. 19,100 1,728,550
VWR Scientific Products Corp. 130,200 4,068,750
(a)
10,747,438
INDUSTRIAL MACHINERY &
EQUIPMENT - 2.3%
ASM Lithography Holdings N V 60,700 1,718,569
(a)
Gorman-Rupp Co. 43,000 701,438
Illinois Tool Works, Inc. 19,100 1,214,044
Kaydon Corp. 32,900 1,161,781
Kuhlman Corp. 66,600 1,856,475
Mark IV Industries, Inc. 42,900 723,938
PRI Automation, Inc. 122,900 2,949,600
Stanley Works 46,300 1,415,044
11,740,889
POLLUTION CONTROL - 0.7%
Allied Waste Industries, Inc. 33,635 685,313
(a)
Eastern Environmental 70,700 1,537,725
Services, Inc. (a)
Waste Management, Inc. 29,685 1,272,744
3,495,782
TOTAL INDUSTRIAL MACHINERY & 25,984,109
EQUIPMENT
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
MEDIA & LEISURE - 13.0%
BROADCASTING - 7.0%
CBS Corp. 96,300 $ 2,870,944
Chum Ltd. Class B 1,600 37,050
Clear Channel Communications, 60,700 2,837,725
Inc. (a)
Cox Communications, Inc. 17,400 916,763
Class A (a)
Fox Entertainment Group, Inc. 45,900 1,084,388
(a)
Heftel Broadcasting Corp. 82,700 3,855,888
Class A (a)
Jacor Communications, Inc. 94,300 5,487,081
Class A (a)
MediaOne Group, Inc. 29,700 1,202,850
Nielsen Media Research, Inc. 67,000 1,005,000
(a)
RCN Corp. (a) 29,400 499,800
Univision Communications, 83,400 2,335,200
Inc. Class A (a)
USA Networks, Inc. (a) 214,000 6,754,375
Westwood One, Inc. (a) 251,100 6,654,150
35,541,214
ENTERTAINMENT - 1.9%
Cinar Films, Inc. Class B 77,800 1,725,449
(sub. vtg.) (a)
Pixar (a) 61,500 3,051,938
Premier Parks, Inc. (a) 158,500 4,299,313
Tele-Communications, Inc. 38,100 754,856
(TCI Ventures Group) Series
A (a)
9,831,556
LEISURE DURABLES & TOYS - 2.3%
Harley-Davidson, Inc. 172,600 7,216,838
Mattel, Inc. 133,900 4,627,919
11,844,757
PUBLISHING - 0.1%
Times Mirror Co. Class A 13,100 767,988
RESTAURANTS - 1.7%
CKE Restaurants, Inc. 114,710 2,803,226
Cracker Barrel Old Country 51,500 1,197,375
Store, Inc.
Papa John's International, 38,700 1,622,981
Inc. (a)
Starbucks Corp. (a) 66,200 3,053,475
8,677,057
TOTAL MEDIA & LEISURE 66,662,572
NONDURABLES - 5.2%
AGRICULTURE - 0.3%
Michael Foods, Inc. 54,200 1,361,775
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
NONDURABLES - CONTINUED
BEVERAGES - 0.7%
Coca-Cola Bottling Co. 10,300 $ 598,044
Consolidated
Whitman Corp. 117,300 2,653,913
3,251,957
FOODS - 3.3%
American Italian Pasta Co. 31,300 790,325
Class A (a)
Dean Foods Co. 95,300 4,336,150
Earthgrains Co. 50,500 1,622,313
Flowers Industries, Inc. 60,600 1,382,438
Interstate Bakeries Corp. 77,400 2,031,750
Keebler Foods Co. (a) 13,000 437,938
Suiza Foods Corp. (a) 48,300 2,288,213
Tootsie Roll Industries, Inc. 35,300 1,345,813
Wrigley (Wm.) Jr. Co. 30,500 2,687,813
16,922,753
HOUSEHOLD PRODUCTS - 0.6%
Clorox Co. 20,100 2,232,356
First Brands Corp. 26,100 977,119
3,209,475
TOBACCO - 0.3%
RJR Nabisco Holdings Corp. 55,200 1,590,450
TOTAL NONDURABLES 26,336,410
RETAIL & WHOLESALE - 8.5%
APPAREL STORES - 1.5%
Abercrombie & Fitch Co. Class 29,900 1,674,400
A (a)
Bon-Ton Stores, Inc. (a) 156,300 1,191,788
Stage Stores, Inc. (a) 69,000 793,500
TJX Companies, Inc. 161,200 4,130,750
7,790,438
DRUG STORES - 1.0%
CVS Corp. 58,338 2,880,439
Walgreen Co. 38,400 2,061,600
4,942,039
GENERAL MERCHANDISE STORES -
2.1%
Consolidated Stores Corp. (a) 40,726 875,609
Dollar Tree Stores, Inc. (a) 79,075 3,588,028
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
RETAIL & WHOLESALE - CONTINUED
GENERAL MERCHANDISE STORES -
CONTINUED
Nordstrom, Inc. 58,800 $ 2,190,300
Saks Holdings, Inc. (a) 154,498 4,248,695
10,902,632
GROCERY STORES - 2.6%
Meyer (Fred), Inc. (a) 63,300 3,220,388
Safeway, Inc. (a) 105,300 5,561,156
U.S. Foodservice (a) 94,660 4,348,444
13,129,988
RETAIL & WHOLESALE,
MISCELLANEOUS - 1.3%
Action Performance Companies, 72,400 2,642,600
Inc. (a)
Bed Bath & Beyond, Inc. (a) 53,200 1,659,175
Staples, Inc. (a) 44,900 1,568,694
Zale Corp. (a) 25,000 715,625
6,586,094
TOTAL RETAIL & WHOLESALE 43,351,191
SERVICES - 4.2%
ADVERTISING - 1.8%
ADVO, Inc. (a) 58,600 1,516,275
Interpublic Group of 20,700 1,423,125
Companies, Inc.
Lamar Advertising Co. Class A 27,500 941,875
(a)
Omnicom Group, Inc. 77,500 4,141,406
Outdoor Systems, Inc. (a) 47,800 1,290,600
9,313,281
PRINTING - 0.1%
Schawk, Inc. Class A 49,400 710,125
SERVICES - 2.3%
Administaff, Inc. (a) 38,100 1,031,081
Borg-Warner Security Corp. 196,100 3,591,081
Pittston Co. (Brinks Group) 31,200 936,000
Service Corp. International 163,700 6,118,288
11,676,450
TOTAL SERVICES 21,699,856
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TECHNOLOGY - 14.1%
COMMUNICATIONS EQUIPMENT - 1.1%
Andrew Corp. (a) 51,700 $ 827,200
Ascend Communications, Inc. 58,400 3,281,350
(a)
Aspect Telecommunications 38,500 729,094
Corp. (a)
Dialogic Corp. (a) 14,600 328,500
Intermedia Communications, 32,400 558,900
Inc. (a)
5,725,044
COMPUTER SERVICES & SOFTWARE
- - 5.5%
America Online, Inc. 46,000 4,027,875
Autodesk, Inc. 27,500 1,000,313
BMC Software, Inc. 20,000 1,021,250
Cadence Design Systems, Inc. 69,300 1,949,063
(a)
CNET, Inc. (a) 24,200 1,284,113
Compuware Corp. (a) 19,700 1,226,325
Electronics for Imaging, Inc. 62,400 1,673,100
(a)
International Telecom Data 35,200 866,800
Systems, Inc.
Intuit, Inc. (a) 19,100 1,105,413
Keane, Inc. (a) 118,800 3,415,500
Legato Systems, Inc. (a) 48,100 2,299,781
Netscape Communications Corp. 21,000 777,000
(a)
Sabre Group Holdings, Inc. 20,700 821,531
Class A (a)
Shared Medical Systems Corp. 11,700 612,788
Siebel Systems, Inc. (a) 56,378 1,367,167
Sportsline USA, Inc. 43,600 752,100
Technology Solutions, Inc. (a) 35,150 327,334
Veritas Software Corp. (a) 32,700 1,953,825
Wang Laboratories, Inc. (a) 41,500 1,058,250
Wind River Systems, Inc. (a) 9,500 442,938
27,982,466
COMPUTERS & OFFICE EQUIPMENT
- - 2.3%
Apple Computer, Inc. (a) 35,500 1,133,781
Comverse Technology, Inc. (a) 37,090 2,132,675
Ingram Micro, Inc. Class A (a) 45,000 1,912,500
Lexmark International Group, 45,300 3,459,788
Inc. (a)
Quantum Corp. (a) 136,800 3,026,700
11,665,444
ELECTRONIC INSTRUMENTS - 3.9%
Applied Materials, Inc. (a) 111,100 4,305,125
KLA-Tencor Corp. (a) 91,000 3,099,688
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TECHNOLOGY - CONTINUED
ELECTRONIC INSTRUMENTS -
CONTINUED
Novellus Systems, Inc. (a) 43,300 $ 2,148,763
Teradyne, Inc. (a) 161,500 5,178,094
Thermoquest Corp. (a) 90,500 921,969
Varian Associates, Inc. 70,800 2,801,025
Waters Corp. (a) 20,700 1,596,488
20,051,152
ELECTRONICS - 1.3%
International Rectifier Corp. 62,100 582,188
(a)
Linear Technology Corp. 90,100 6,312,631
6,894,819
TOTAL TECHNOLOGY 72,318,925
UTILITIES - 3.3%
CELLULAR - 0.4%
Nextel Communications, Inc. 25,600 550,400
Class A (a)
SkyTel Communications, Inc. 63,400 1,323,475
(a)
1,873,875
ELECTRIC UTILITY - 1.8%
AES Corp. (a) 40,300 1,843,725
CMS Energy Corp. 22,800 1,111,500
Duke Energy Corp. 30,100 1,883,131
Entergy Corp. 37,900 1,110,944
IPALCO Enterprises, Inc. 32,200 1,614,025
PG&E Corp. 54,500 1,686,094
9,249,419
GAS - 0.4%
Enron Corp. 40,700 2,139,294
TELEPHONE SERVICES - 0.7%
COMSAT Corp. Series 1 15,000 534,375
e.spire Communications, Inc. 26,900 216,881
(a)
MCI WorldCom, Inc. (a) 27,600 1,628,400
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
UTILITIES - CONTINUED
TELEPHONE SERVICES - CONTINUED
U.S. LEC Corp. Class A 10,000 $ 113,750
WinStar Communications, Inc. 40,600 1,131,725
(a)
3,625,131
TOTAL UTILITIES 16,887,719
TOTAL COMMON STOCKS 471,820,065
(Cost $417,398,128)
CASH EQUIVALENTS - 7.7%
MATURITY AMOUNT
Investments in repurchase $ 39,302,731 39,297,000
agreements (U.S. Treasury
obligations), in a joint
trading account at 5.25%,
dated 11/30/98 due 12/1/98
(Cost $39,297,000)
TOTAL INVESTMENT IN $ 511,117,065
SECURITIES - 100%
(Cost $456,695,128)
</TABLE>
LEGEND
(a) Non-income producing
INCOME TAX INFORMATION
At November 30, 1998, the aggregate cost of investment securities for
income tax purposes was $459,794,629. Net unrealized appreciation
aggregated $51,322,436, of which $79,201,487 related to appreciated
investment securities and $27,879,051 related to depreciated
investment securities.
The fund hereby designates approximately $8,534,000 as a capital gain
dividend for the purpose of the dividend paid deduction.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1998
ASSETS
Investment in securities, at $ 511,117,065
value (including repurchase
agreements of $39,297,000)
(cost $456,695,128) - See
accompanying schedule
Receivable for investments 3,077,868
sold
Receivable for fund shares 613,356
sold
Dividends receivable 299,107
TOTAL ASSETS 515,107,396
LIABILITIES
Payable to custodian bank $ 73,563
Payable for investments 5,579,491
purchased
Payable for fund shares 953,894
redeemed
Accrued management fee 244,421
Distribution fees payable 229,416
Other payables and accrued 190,251
expenses
TOTAL LIABILITIES 7,271,036
NET ASSETS $ 507,836,360
Net Assets consist of:
Paid in capital $ 435,463,105
Accumulated undistributed net 17,951,591
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 54,421,664
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS $ 507,836,360
STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
NOVEMBER 30, 1998
CALCULATION OF MAXIMUM $13.71
OFFERING PRICE CLASS A: NET
ASSET VALUE and redemption
price per share
($11,339,903 (divided by)
827,153 shares)
Maximum offering price per $14.55
share (100/94.25 of $13.71)
CLASS T: NET ASSET VALUE and $13.75
redemption price per share
($367,035,311 (divided by)
26,690,831 shares)
Maximum offering price per $14.25
share (100/96.50 of $13.75)
CLASS B: NET ASSET VALUE and $13.58
offering price per share
($82,316,683 (divided by)
6,059,999 shares) A
CLASS C: NET ASSET VALUE, $13.64
offering price and
redemption price per share
($12,593,155 (divided by)
923,506 shares) A
INSTITUTIONAL CLASS: NET $13.82
ASSET VALUE, offering price
and redemption price per
share ($34,551,308 (divided
by) 2,500,499 shares)
A REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1998
INVESTMENT INCOME $ 2,998,487
Dividends
Interest 1,251,485
TOTAL INCOME 4,249,972
EXPENSES
Management fee $ 2,834,821
Transfer agent fees 1,093,744
Distribution fees 2,602,908
Accounting fees and expenses 288,852
Non-interested trustees' 1,725
compensation
Custodian fees and expenses 37,703
Registration fees 105,730
Audit 39,923
Legal 29,250
Miscellaneous 20,598
Total expenses before 7,055,254
reductions
Expense reductions (154,837) 6,900,417
NET INVESTMENT INCOME (LOSS) (2,650,445)
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 21,448,905
Foreign currency transactions (1,073) 21,447,832
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 16,594,363
Assets and liabilities in (273) 16,594,090
foreign currencies
NET GAIN (LOSS) 38,041,922
NET INCREASE (DECREASE) IN $ 35,391,477
NET ASSETS RESULTING FROM
OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED NOVEMBER 30, 1998 YEAR ENDED NOVEMBER 30, 1997
INCREASE (DECREASE) IN NET
ASSETS
Operations Net investment $ (2,650,445) $ (1,867,851)
income (loss)
Net realized gain (loss) 21,447,832 55,118,706
Change in net unrealized 16,594,090 22,620,104
appreciation (depreciation)
NET INCREASE (DECREASE) IN 35,391,477 75,870,959
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (43,421,664) (3,481,786)
from net realized gains
Share transactions - net 94,908,223 123,963,444
increase (decrease)
TOTAL INCREASE (DECREASE) 86,878,036 196,352,617
IN NET ASSETS
NET ASSETS
Beginning of period 420,958,324 224,605,707
End of period $ 507,836,360 $ 420,958,324
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C> <C>
YEARS ENDED NOVEMBER 30,
1998 1997 1996 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 14.04 $ 11.70 $ 10.74
period
Income from Investment
Operations
Net investment income (loss) (.05) (.09) (.01)
D
Net realized and unrealized 1.17 2.64 .97
gain (loss)
Total from investment 1.12 2.55 .96
operations
Less Distributions
From net realized gain (1.45) (.21) -
Net asset value, end of period $ 13.71 $ 14.04 $ 11.70
TOTAL RETURN B, C 9.07% 22.24% 8.94%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 11,340 $ 4,670 $ 1,239
(000 omitted)
Ratio of expenses to average 1.30% 1.62% F 1.56% A, F
net assets
Ratio of expenses to average 1.27% G 1.58% G 1.56% A
net assets after expense
reductions
Ratio of net investment (.36)% (.71)% (.33)% A
income to average net assets
Portfolio turnover 139% 208% 101% A
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A
SHARES) TO NOVEMBER 30, 1996.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - CLASS T
<TABLE>
<CAPTION>
<S> <C> <C> <C>
YEARS ENDED NOVEMBER 30,
1998 1997 1996 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 14.09 $ 11.70 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) (.07) (.07) (.03)
D
Net realized and unrealized 1.17 2.64 1.73
gain (loss)
Total from investment 1.10 2.57 1.70
operations
Less Distributions
From net realized gain (1.44) (.18) -
Net asset value, end of period $ 13.75 $ 14.09 $ 11.70
TOTAL RETURN B, C 8.87% 22.35% 17.00%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 367,035 $ 326,642 $ 187,040
(000 omitted)
Ratio of expenses to average 1.42% 1.48% 1.60% A
net assets
Ratio of expenses to average 1.39% F 1.44% F 1.60% A
net assets after expense
reductions
Ratio of net investment (.51)% (.53)% (.37)% A
income to average net assets
Portfolio turnover 139% 208% 101% A
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD FEBRUARY 20, 1996 (COMMENCEMENT OF SALE OF CLASS T
SHARES) TO NOVEMBER 30, 1996.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C>
YEARS ENDED NOVEMBER 30,
1998 1997 1996 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 13.94 $ 11.61 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) (.14) (.14) (.10)
D
Net realized and unrealized 1.17 2.62 1.71
gain (loss)
Total from investment 1.03 2.48 1.61
operations
Less Distributions
From net realized gain (1.39) (.15) -
Net asset value, end of period $ 13.58 $ 13.94 $ 11.61
TOTAL RETURN B, C 8.38% 21.67% 16.10%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 82,317 $ 58,758 $ 32,727
(000 omitted)
Ratio of expenses to average 1.94% 2.03% 2.38% A
net assets
Ratio of expenses to average 1.91% F 1.98% F 2.37% A, F
net assets after expense
reductions
Ratio of net investment (1.02)% (1.08)% (1.14)% A
income to average net assets
Portfolio turnover 139% 208% 101% A
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE
AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD FEBRUARY 20, 1996 (COMMENCEMENT OF SALE OF CLASS B
SHARES) TO NOVEMBER 30, 1996.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - CLASS C
YEARS ENDED NOVEMBER 30,
1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 14.08 $ 14.16
period
Income from Investment
Operations
Net investment income (loss) (.15) (.01)
D
Net realized and unrealized 1.15 (.07) H
gain (loss)
Total from investment 1.00 (.08)
operations
Less Distributions
From net realized gain (1.44) -
Net asset value, end of period $ 13.64 $ 14.08
TOTAL RETURN B, C 8.09% (.56)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 12,593 $ 345
(000 omitted)
Ratio of expenses to average 2.15% F 2.50% A, F
net assets
Ratio of expenses to average 2.11% G 2.40% A, G
net assets after expense
reductions
Ratio of net investment (1.16)% (1.07)% A
income to average net assets
Portfolio turnover 139% 208%
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE
AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD NOVEMBER 3, 1997 (COMMENCEMENT OF SALE OF CLASS C
SHARES) TO NOVEMBER 30, 1997.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
H THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH
THE AGGREGATE NET GAIN ON INVESTMENTS FOR THE PERIOD DUE TO THE TIMING
OF SALES AND REPURCHASES OF CLASS SHARES IN RELATION TO FLUCTUATING
MARKET VALUES OF THE INVESTMENTS OF THE FUND.
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
YEARS ENDED NOVEMBER 30,
1998 1997 1996 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 14.12 $ 11.70 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) .01 .01 (.02)
D
Net realized and unrealized 1.18 2.63 1.72
gain (loss)
Total from investment 1.19 2.64 1.70
operations
Less Distributions
From net realized gain (1.49) (.22) -
Net asset value, end of period $ 13.82 $ 14.12 $ 11.70
TOTAL RETURN B, C 9.60% 23.04% 17.00%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 34,551 $ 30,542 $ 3,600
(000 omitted)
Ratio of expenses to average .87% .91% 1.50% A, F
net assets
Ratio of expenses to average .84% G .84% G 1.50% A
net assets after expense
reductions
Ratio of net investment .04% .08% (.27)% A
income to average net assets
Portfolio turnover 139% 208% 101% A
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD FEBRUARY 20, 1996 (COMMENCEMENT OF SALE OF
INSTITUTIONAL CLASS SHARES) TO NOVEMBER 30, 1996.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1998
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Mid Cap Fund (the fund) is a fund of Fidelity Advisor
Series I(the trust) and is authorized to issue an unlimited number of
shares. The trust is registered under the Investment Company Act of
1940, as amended (the 1940 Act), as an open-end management investment
company organized as a Massachusetts business trust.
The fund offers Class A, Class T, Class B, Class C, and Institutional
Class shares, each of which has equal rights as to assets and voting
privileges. Class B shares will automatically convert to Class A
shares after a holding period of seven years from the initial date of
purchase. Each class has exclusive voting rights with respect to
matters that affect that class. Investment income, realized and
unrealized capital gains and losses, the common expenses of the fund,
and certain fund-level expense reductions, if any, are allocated on a
pro rata basis to each class based on the relative net assets of each
class to the total net assets of the fund. Each class of shares
differs in its respective distribution, transfer agent, and certain
other class-specific fees, expenses, and expense reductions.
The financial statements have been prepared in conformity with
generally accepted accounting principles which require management to
make certain estimates and assumptions at the date of the financial
statements. The following summarizes the significant accounting
policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Securities for which exchange
quotations are not readily available (and in certain cases debt
securities which trade on an exchange) are valued primarily using
dealer-supplied valuations or at their fair value as determined in
good faith under consistently applied procedures under the general
supervision of the Board of Trustees. Short-term securities with
remaining maturities of sixty days or less for which quotations are
not readily available are valued at amortized cost or original cost
plus accrued interest, both of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchase
and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
date and settlement on purchases and sales of securities. The effects
of changes in foreign currency exchange rates on investments in
securities are included with the net realized and unrealized gain or
loss on investment securities.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent that it distributes substantially all of
its taxable income for the fiscal year. The schedules of investments
include information regarding income taxes under the caption "Income
Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend
date, except certain dividends from foreign securities where the
ex-dividend date may have passed, are recorded as soon as the fund is
informed of the ex-dividend date. Non-cash dividends included in
dividend income, if any, are recorded at the fair market value of the
securities received. Interest income is accrued as earned. Investment
income is recorded net of foreign taxes withheld where recovery of
such taxes is uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date. Income dividends and capital gain distributions are
declared separately for each class.
Income and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. These differences, which may result in
distribution reclassifications, are primarily due to differing
treatments for litigation proceeds, passive foreign investment
companies (PFIC), non-taxable dividends, net operating losses and
losses deferred due to wash sales and excise tax regulations. The fund
also utilized earnings and profits distributed to shareholders on
redemption of shares as a part of the dividends paid deduction for
income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Accumulated undistributed net realized gain (loss) on investments and
foreign currency transactions may include temporary book and tax basis
differences that will reverse in a subsequent period. Any taxable gain
remaining at fiscal year end is distributed in the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the
2. OPERATING POLICIES - CONTINUED
FOREIGN CURRENCY CONTRACTS - CONTINUED
contracts' terms. The U.S. dollar value of foreign currency contracts
is determined using contractual currency exchange rates established at
the time of each trade.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other
affiliated entities of Fidelity Management & Research Company (FMR),
may transfer uninvested cash balances into one or more joint trading
accounts. These balances are invested in one or more repurchase
agreements for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are
marked-to-market daily and maintained at a value at least equal to the
principal amount of the repurchase agreement (including accrued
interest). FMR, the fund's investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $662,586,365 and $631,446,849, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus a
fixed individual fund fee rate applied to the average net assets of
the fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds advised by FMR. The rates ranged from .2500% to .5200% for the
period. The annual individual fund fee rate is .30%. In the event that
these rates were lower than the contractual rates in effect during the
period, FMR voluntarily implemented the above rates, as they resulted
in the same or a lower management fee. For the period, the management
fee was equivalent to an annual rate of .59% of average net assets .
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the
1940 Act, the Trustees have adopted separate distribution plans with
respect to each class of shares (collectively referred to as "the
Plans"). Under certain of the Plans, the class pays Fidelity
Distributors Corporation (FDC), an affiliate of FMR, a distribution
and service fee. A portion of this fee may be reallowed to securities
dealers, banks, and other financial institutions for the distribution
of each class of shares and providing shareholder support services.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
DISTRIBUTION AND SERVICE PLAN - CONTINUED
For the period, this fee was based on the following annual rates of
the average net assets of each applicable class:
CLASS A .25%
CLASS T .50%
CLASS B 1.00% *
CLASS C 1.00% *
* .75% REPRESENTS A DISTRIBUTION FEE AND .25% REPRESENTS A SHAREHOLDER
SERVICE FEE.
For the period, each class paid FDC the following amounts, a portion
of which was retained by FDC.
PAID TO FDC RETAINED BY FDC
CLASS A $ 20,451 $ 27
CLASS T 1,786,000 94,121
CLASS B 731,591 549,020
CLASS C 64,866 64,456
$ 2,602,908 $ 707,624
Under the Plans, FMR may use its resources to pay administrative and
promotional expenses related to the sale of each class' shares. The
Plans also authorize payments to third parties that assist in the sale
of each class' shares or render shareholder support services. For the
period, the following amounts were paid to third parties under the
Plans:
CLASS A $ 5,461
CLASS T 101,845
CLASS B 31,287
CLASS C 11,743
INSTITUTIONAL CLASS 5,883
SALES LOAD. FDC receives a front-end sales charge of up to 5.75% for
selling Class A shares, and 3.50% for selling Class T shares of the
fund. FDC receives the proceeds of contingent deferred sales charges
levied on Class B share redemptions occurring within six years of
purchase and Class C share redemptions occurring within one year of
purchase. Contingent deferred sales charges are based on declining
rates ranging from 5% to 1% for Class B and 1% for Class C, of the
lesser of the cost of shares at the initial date of purchase or the
net asset value of the redeemed shares, excluding any reinvested
dividends and capital gains. In addition, purchases of Class A and
Class T shares that were subject to a finder's fee bear a contingent
deferred sales charge on assets that do not remain in the fund for at
least one year. The Class A and Class T contingent deferred
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
SALES LOAD - CONTINUED
sales charge is based on 0.25% of the lesser of the cost of shares at
the initial date of purchase or the net asset value of the redeemed
shares, excluding any reinvested dividends and capital gains. A
portion of the sales charges paid to FDC are paid to securities
dealers, banks and other financial institutions.
For the period, sales charge amounts paid to and retained by FDC were
as follows:
PAID TO FDC RETAINED BY FDC
CLASS A $ 119,088 $ 33,806
CLASS T 459,186 163,750
CLASS B 138,632 138,632 *
CLASS C 2,300 2,300 *
* WHEN CLASS B AND CLASS C SHARES ARE INITIALLY SOLD, FDC PAYS
COMMISSION FROM ITS OWN RESOURCES TO
DEALERS, BANKS AND OTHER FINANCIAL INSTITUTIONS THROUGH WHICH THE
SALES ARE MADE.
TRANSFER AGENT FEES. Fidelity Investments Institutional Operations
Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend
disbursing and shareholder servicing agent for each class of the fund.
FIIOC receives account fees and asset-based fees that vary according
to the account size and type of account of the shareholders of the
respective classes of the fund. FIIOC pays for typesetting, printing
and mailing of all shareholder reports, except proxy statements. For
the period, the following amounts were paid to FIIOC:
AMOUNT % OF AVERAGE NET ASSETS
CLASS A $ 23,608 .29
CLASS T 814,424 .23
CLASS B 178,766 .24
CLASS C 17,801 .27
INSTITUTIONAL CLASS 59,145 .17
$ 1,093,744
ACCOUNTING FEES. Fidelity Service Company, Inc., an affiliate of FMR,
maintains the fund's accounting records. The fee is based on the level
of average net assets for the month plus out-of-pocket expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $121,140 for the
period.
5. EXPENSE REDUCTIONS.
FMR agreed to reimburse certain transfer agent, registration and other
class specific expenses for Class C. For the period, the reimbursement
reduced these expenses by $362.
FMR has also directed certain portfolio trades to brokers who paid a
portion of the fund's expenses. For the period, the fund's expenses
were reduced by $151,928 under this arrangement.
In addition, the fund has entered into an arrangement with its
custodian whereby credits realized as a result of uninvested cash
balances were used to reduce a portion of expenses. During the period,
the fund's custodian fees were reduced by $2,547 under this
arrangement.
6. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
YEARS ENDED NOVEMBER 30,
1998 1997
FROM NET REALIZED GAIN
CLASS A $ 509,696 $ 23,887
CLASS T 33,726,237 2,939,982
CLASS B 5,942,258 441,965
CLASS C 66,029 -
INSTITUTIONAL CLASS 3,177,444 75,952
$ 43,421,664 $ 3,481,786
7. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SHARES DOLLARS
YEAR ENDED NOVEMBER 30, YEAR ENDED NOVEMBER 30, YEAR ENDED NOVEMBER 30, YEAR ENDED NOVEMBER 30,
1998 1997 A 1998 1997 A
CLASS A Shares sold 605,274 303,139 $ 8,283,209 $ 3,978,873
Reinvestment of distributions 38,750 2,096 480,632 23,555
Shares redeemed (149,559) (78,508) (2,024,735) (1,033,803)
Net increase (decrease) 494,465 226,727 $ 6,739,106 $ 2,968,625
CLASS T Shares sold 11,223,902 18,242,441 $ 153,194,207 $ 227,562,753
Reinvestment of distributions 2,565,624 246,910 31,975,856 2,785,068
Shares redeemed (10,288,334) (11,288,106) (139,358,688) (142,250,679)
Net increase (decrease) 3,501,192 7,201,245 $ 45,811,375 $ 88,097,142
CLASS B Shares sold 2,302,521 1,907,677 $ 31,321,307 $ 24,432,331
Reinvestment of distributions 425,511 37,955 5,260,655 425,863
Shares redeemed (882,420) (549,081) (11,531,684) (6,719,610)
Net increase (decrease) 1,845,612 1,396,551 $ 25,050,278 $ 18,138,584
CLASS C Shares sold 981,412 24,521 $ 13,382,594 $ 343,450
Reinvestment of distributions 4,909 - 61,138 -
Shares redeemed (87,336) - (1,098,482) -
Net increase (decrease) 898,985 24,521 $ 12,345,250 $ 343,450
INSTITUTIONAL CLASS Shares 1,778,897 7,539,683 $ 24,392,821 $ 88,091,401
sold
Reinvestment of distributions 239,320 5,512 2,980,284 62,017
Shares redeemed (1,680,567) (5,689,999) (22,410,891) (73,737,775)
Net increase (decrease) 337,650 1,855,196 $ 4,962,214 $ 14,415,643
</TABLE>
A SHARE TRANSACTIONS FOR CLASS C ARE FOR THE PERIOD NOVEMBER 3,
1997(COMMENCEMENT OF SALE OF SHARES) TO NOVEMBER 30, 1997.
8. REGISTRATION FEES.
For the period, each class paid the following amounts to register its
shares for sale:
REGISTRATION FEES
CLASS A $ 7,581
CLASS T 57,358
CLASS B 15,658
CLASS C 14,216
INSTITUTIONAL CLASS 10,917
$ 105,730
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Advisor Series I and the Shareholders of
Fidelity Advisor Mid Cap Fund:
In our opinion, the accompanying statements of assets and liabilities,
including the schedule of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of
Fidelity Advisor Mid Cap Fund (a fund of Fidelity Advisor Series I) at
November 30, 1998, and the results of its operations, the changes in
its net assets and the financial highlights for the periods indicated,
in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to
as "financial statements") are the responsibility of the Fidelity
Advisor Mid Cap Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with
generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We
believe that our audits, which included confirmation of securities at
November 30, 1998 by correspondence with the custodian and brokers,
provide a reasonable basis for the opinion expressed above.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
January 13, 1999
DISTRIBUTIONS
The Board of Trustees of Fidelity Advisor Mid Cap Fund voted to pay to
shareholders of record at the opening of business on record date, the
following distributions derived from capital gains realized from sales
of portfolio securities, and dividends derived from net investment
income:
INSTITUTIONAL CLASS
PAY DATE 12/22/97 1/5/98 12/21/98
RECORD DATE 12/19/97 1/2/98 12/18/98
DIVIDENDS - - -
SHORT-TERM
CAPITAL GAINS $1.37 $.01 $0.10
LONG-TERM
CAPITAL GAINS $0.11 - $0.39
LONG-TERM
CAPITAL GAIN PERCENTAGES:
28% rate 73.80% - -
20% rate 26.20% 100% 100%
A total of 5% of the dividends distributed during the fiscal year
qualifies for the dividends-received deduction for corporate
shareholders.
The fund will notify shareholders in January 1999 of the applicable
percentage for use in preparing 1998 income tax returns.
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.)
Inc., London, England
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Abigail P. Johnson, Vice President
Katherine Collins, Vice President
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
* INDEPENDENT TRUSTEES
ADVISORY BOARD
J. Gary Burkhead
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA
CUSTODIAN
Brown Brothers Harriman & Co.
Boston, MA
FOCUS FUNDS
Fidelity Advisor Consumer
Industries Fund
Fidelity Advisor Cyclical
Industries Fund
Fidelity Advisor Financial
Services Fund
Fidelity Advisor Health Care Fund
Fidelity Advisor Natural
Resources Fund
Fidelity Advisor Technology Fund
Fidelity Advisor Utilities Growth Fund
GROWTH FUNDS
Fidelity Advisor Latin America Fund
Fidelity Advisor Japan Fund
Fidelity Advisor Europe Capital Appreciation Fund
Fidelity Advisor International Capital Appreciation Fund
Fidelity Advisor Overseas Fund
Fidelity Advisor Diversified International Fund
Fidelity Advisor Global Equity Fund
Fidelity Advisor TechnoQuant
Growth Fund
SM
Fidelity Advisor Small Cap Fund
Fidelity Advisor Strategic
Opportunities Fund
Fidelity Advisor Mid Cap Fund
Fidelity Advisor Retirement
Growth Fund
Fidelity Advisor Equity Growth Fund
Fidelity Advisor Large Cap Fund
Fidelity Advisor Dividend Growth Fund
Fidelity Advisor Growth
Opportunities Fund
GROWTH AND INCOME FUNDS
Fidelity Advisor Growth & Income Fund
Fidelity Advisor Equity Income Fund
Fidelity Advisor Asset Allocation Fund
Fidelity Advisor Balanced Fund
TAXABLE INCOME FUNDS
Fidelity Advisor Emerging Markets Income Fund
Fidelity Advisor High Yield Fund
Fidelity Advisor Strategic Income Fund
Fidelity Advisor Mortgage
Securities Fund
Fidelity Advisor Government Investment Fund
Fidelity Advisor Intermediate Bond Fund
Fidelity Advisor Short Fixed-Income Fund
MUNICIPAL FUNDS
Fidelity Advisor Municipal Income Fund
Fidelity Advisor Intermediate Municipal Income Fund
MONEY MARKET FUNDS
Prime Fund
Treasury Fund
Tax-Exempt Fund
(registered trademark)
(2_FIDELITY_LOGOS)FIDELITY ADVISOR
(registered trademark)
STRATEGIC OPPORTUNITIES
FUND - CLASS A, CLASS T AND CLASS B
ANNUAL REPORT
NOVEMBER 30, 1998
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on stock market
strategies.
PERFORMANCE 4 How the fund has done over
time.
FUND TALK 12 The manager's review of fund
performance, strategy and
outlook.
INVESTMENT CHANGES 15 A summary of major shifts in
the fund's investments over
the past six months.
INVESTMENTS 16 A complete list of the fund's
investments with their
market values.
FINANCIAL STATEMENTS 25 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 34 Notes to the financial
statements.
REPORT OF INDEPENDENT 43 The auditors' opinion.
ACCOUNTANTS
DISTRIBUTIONS 44
Standard & Poor's, S&P and S&P 500 are registered service marks of The
McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity
Distributors Corporation.
Other third party marks appearing herein are the property of their
respective owners.
All other marks appearing herein are registered or unregistered
trademarks or service marks of FMR Corp. or an affiliated company.
This report is printed on recycled paper using soy-based inks.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION
OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS
IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT
INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY ADVISOR FUND, INCLUDING CHARGES
AND EXPENSES, CONTACT YOUR
INVESTMENT PROFESSIONAL FOR A FREE PROSPECTUS. READ IT CAREFULLY
BEFORE YOU INVEST OR SEND MONEY.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
The month of November proved to be a strong one for the stock and bond
markets. The Dow Jones Industrial Average reached a record high.
Merger activity, which had lulled during the summer correction, has
increased significantly. Small-cap stocks posted their third
consecutive month of positive returns, as did emerging markets. While
bond returns generally were not at the levels of their equity
counterparts, they were mostly positive nonetheless.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will
greatly reduce your vulnerability to any single decline. We know from
experience, for example, that stock prices have gone up over longer
periods of time, have significantly outperformed other types of
investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through
diversification. A stock mutual fund, for instance, is already
diversified, because it invests in many different companies. You can
increase your diversification further by investing in a number of
different stock funds, or in such other investment categories as
bonds. If you have a short investment time horizon, you might want to
consider moving some of your investment into a money market fund,
which seeks income and a stable share price by investing in
high-quality, short-term investments. Of course, it's important to
remember that there is no assurance that a money market fund will
achieve its goal of maintaining a stable net asset value of $1.00 per
share, and that these types of funds are neither insured nor
guaranteed by any agency of the U.S. government.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases. Of course, you should
consider your financial ability to continue your purchases through
periods of low price levels before undertaking such a strategy.
Remember to contact your investment professional if you need help with
your investments.
Best regards,
Edward C. Johnson 3d
FIDELITY ADVISOR STRATEGIC OPPORTUNITIES FUND - CLASS A
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can
look at the total percentage change in value, the average annual
percentage change or the growth of a hypothetical $10,000 investment.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). The initial offering of Class A shares took place on September
3, 1996. Class A shares bear a 0.25% 12b-1 fee that is reflected in
returns after September 3, 1996. Returns prior to September 3, 1996
are those of Class T and reflect Class T shares' 0.50% 12b-1 fee
(0.65% prior to January 1, 1996). If Fidelity had not reimbursed
certain class expenses, the total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
1998
FIDELITY ADV STRATEGIC -4.45% 62.89% 225.66%
OPPORTUNITIES - CL A
FIDELITY ADV STRATEGIC -9.95% 53.52% 206.94%
OPPORTUNITIES - CL A
(INCL. 5.75% SALES CHARGE)
S&P 500 (registered trademark) 23.66% 181.25% 457.74%
Capital Appreciation Funds 8.48% 100.86% 296.44%
Average
CUMULATIVE TOTAL RETURNS show Class A's performance in percentage
terms over a set period - in this case, one year, five years or 10
years. For example, if you had invested $1,000 in a fund that had a 5%
return over the past year, the value of your investment would be
$1,050. You can compare Class A's returns to those of the Standard &
Poor's 500 Index - a market capitalization-weighted index of common
stocks. To measure how Class A's performance stacked up against its
peers, you can compare it to the capital appreciation funds average,
which reflects the performance of mutual funds with similar objectives
tracked by Lipper Analytical Services, Inc. The past one year average
represents a peer group of 237 mutual funds. These benchmarks reflect
reinvestment of dividends and capital gains, if any, and exclude the
effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
1998
FIDELITY ADV STRATEGIC -4.45% 10.25% 12.53%
OPPORTUNITIES - CL A
FIDELITY ADV STRATEGIC -9.95% 8.95% 11.87%
OPPORTUNITIES - CL A (INCL.
5.75% SALES CHARGE)
S&P 500 23.66% 22.98% 18.75%
Capital Appreciation Funds 8.48% 13.91% 13.51%
Average
AVERAGE ANNUAL TOTAL RETURNS take Class A's cumulative return and show
you what would have happened if Class A had performed at a constant
rate each year.
$10,000 OVER 10 YEARS
FA Strategic Opp -CL A S&P 500
00266 SP001
1988/11/30 9425.00 10000.00
1988/12/31 9434.92 10175.00
1989/01/31 9969.32 10919.81
1989/02/28 9926.32 10647.91
1989/03/31 10135.17 10896.00
1989/04/30 10522.15 11461.51
1989/05/31 11007.41 11925.70
1989/06/30 11093.40 11857.72
1989/07/31 11855.08 12928.47
1989/08/31 12008.64 13181.87
1989/09/30 12008.64 13127.82
1989/10/31 11812.08 12823.26
1989/11/30 12131.49 13084.85
1989/12/31 12510.50 13398.89
1990/01/31 11683.21 12499.82
1990/02/28 11746.36 12661.07
1990/03/31 11746.36 12996.59
1990/04/30 11266.40 12671.68
1990/05/31 11632.68 13907.16
1990/06/30 11746.36 13812.60
1990/07/31 11777.93 13768.40
1990/08/31 10950.64 12523.73
1990/09/30 10868.54 11913.83
1990/10/31 10862.22 11862.60
1990/11/30 11342.18 12628.92
1990/12/31 11613.47 12981.27
1991/01/31 11988.74 13547.25
1991/02/28 12706.35 14515.88
1991/03/31 13107.95 14867.16
1991/04/30 13285.70 14902.84
1991/05/31 13759.72 15546.65
1991/06/30 13325.21 14834.61
1991/07/31 13726.81 15525.90
1991/08/31 14023.07 15893.87
1991/09/30 14075.74 15628.44
1991/10/31 13792.64 15837.86
1991/11/30 13456.88 15199.60
1991/12/31 14293.77 16938.43
1992/01/31 14316.96 16623.37
1992/02/29 14595.26 16839.48
1992/03/31 14224.20 16511.11
1992/04/30 14494.77 16996.54
1992/05/31 14966.33 17079.82
1992/06/30 14966.33 16825.33
1992/07/31 15430.16 17513.49
1992/08/31 15159.59 17154.46
1992/09/30 15097.75 17356.88
1992/10/31 15221.44 17417.63
1992/11/30 15870.80 18011.57
1992/12/31 16133.74 18233.11
1993/01/31 16438.63 18386.27
1993/02/28 16904.43 18636.33
1993/03/31 17429.52 19029.55
1993/04/30 17082.29 18569.04
1993/05/31 17480.34 19066.69
1993/06/30 17624.31 19121.98
1993/07/31 17996.95 19045.49
1993/08/31 19123.35 19767.32
1993/09/30 19072.54 19615.11
1993/10/31 19673.85 20021.14
1993/11/30 18843.87 19830.94
1993/12/31 19430.86 20070.89
1994/01/31 19599.01 20753.30
1994/02/28 18898.38 20190.89
1994/03/31 18169.72 19310.57
1994/04/30 18319.19 19557.74
1994/05/31 18356.56 19878.49
1994/06/30 18356.56 19391.47
1994/07/31 18795.62 20027.51
1994/08/31 18907.72 20848.63
1994/09/30 18646.15 20337.84
1994/10/31 18449.98 20795.44
1994/11/30 17880.13 20038.07
1994/12/31 18037.72 20335.24
1995/01/31 18838.33 20862.53
1995/02/28 19320.62 21675.54
1995/03/31 19503.89 22315.19
1995/04/30 19928.31 22972.37
1995/05/31 20449.18 23890.58
1995/06/30 21519.87 24445.56
1995/07/31 22243.31 25256.17
1995/08/31 22879.93 25319.56
1995/09/30 23661.25 26388.05
1995/10/31 23574.43 26293.84
1995/11/30 24201.41 27448.14
1995/12/31 24920.75 27976.80
1996/01/31 24930.77 28929.13
1996/02/29 24434.56 29197.30
1996/03/31 23619.73 29478.47
1996/04/30 24241.04 29912.98
1996/05/31 24954.01 30684.44
1996/06/30 24923.45 30801.34
1996/07/31 23212.32 29440.54
1996/08/31 24088.26 30061.44
1996/09/30 24923.45 31753.30
1996/10/31 24465.12 32629.06
1996/11/30 25320.68 35095.49
1996/12/31 25303.16 34400.24
1997/01/31 26258.64 36549.57
1997/02/28 25900.56 36836.12
1997/03/31 24242.37 35322.52
1997/04/30 24370.82 37431.28
1997/05/31 27547.08 39710.10
1997/06/30 28563.02 41489.11
1997/07/31 29847.54 44790.40
1997/08/31 30326.31 42281.24
1997/09/30 33701.09 44596.98
1997/10/31 32136.32 43107.44
1997/11/30 32124.64 45102.89
1997/12/31 31862.46 45877.30
1998/01/31 32132.88 46384.71
1998/02/28 35152.17 49729.97
1998/03/31 36154.31 52276.64
1998/04/30 35075.08 52802.54
1998/05/31 32942.31 51894.87
1998/06/30 33147.88 54002.84
1998/07/31 32042.95 53427.71
1998/08/31 25426.22 45703.13
1998/09/30 27199.25 48630.87
1998/10/31 28458.35 52586.51
1998/11/30 30681.06 55773.78
IMATRL PRASUN SHR__CHT 19981130 19981210 102802 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Strategic Opportunities Fund - Class A on
November 30, 1988, and the current 5.75% sales charge was paid. As the
chart shows, by November 30, 1998, the value of the investment would
have grown to $30,694 - a 206.94% increase on the initial investment.
For comparison, look at how the Standard & Poor's 500 Index did over
the same period. With dividends and capital gains, if any, reinvested,
the same $10,000 investment would have grown to $55,774 - a 457.74%
increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
long-term growth and
short-term volatility. In turn, the
share price and return of a
fund that invests in stocks will
vary. That means if you sell
your shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
FIDELITY ADVISOR STRATEGIC OPPORTUNITIES FUND - CLASS T
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can
look at the total percentage change in value, the average annual
percentage change or the growth of a hypothetical $10,000 investment.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). Class T shares bear a 0.50% 12b-1 fee (0.65% prior to January
1, 1996). If Fidelity had not reimbursed certain class expenses, the
past five and 10 year total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
1998
FIDELITY ADV STRATEGIC -4.40% 63.20% 226.30%
OPPORTUNITIES - CL T
FIDELITY ADV STRATEGIC -7.75% 57.49% 214.88%
OPPORTUNITIES - CL T
(INCL. 3.50% SALES CHARGE)
S&P 500 23.66% 181.25% 457.74%
Capital Appreciation Funds 8.48% 100.86% 296.44%
Average
CUMULATIVE TOTAL RETURNS show Class T's performance in percentage
terms over a set period - in this case, one year, five years or 10
years. For example, if you had invested $1,000 in a fund that had a 5%
return over the past year, the value of your investment would be
$1,050. You can compare Class T's returns to those of the Standard &
Poor's 500 Index - a market capitalization-weighted index of common
stocks. To measure how Class T's performance stacked up against its
peers, you can compare it to the capital appreciation funds average,
which reflects the performance of mutual funds with similar objectives
tracked by Lipper Analytical Services, Inc. The past one year average
represents a peer group of 237 mutual funds. These benchmarks reflect
reinvestment of dividends and capital gains, if any, and exclude the
effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
1998
FIDELITY ADV STRATEGIC -4.40% 10.29% 12.55%
OPPORTUNITIES - CL T
FIDELITY ADV STRATEGIC -7.75% 9.51% 12.15%
OPPORTUNITIES - CL T (INCL.
3.50% SALES CHARGE)
S&P 500 23.66% 22.98% 18.75%
Capital Appreciation Funds 8.48% 13.91% 13.51%
Average
AVERAGE ANNUAL TOTAL RETURNS take Class T's cumulative return and show
you what would have happened if Class T had performed at a constant
rate each year.
$10,000 OVER 10 YEARS
FA Strategic Opp -CL T S&P 500
00174 SP001
1988/11/30 9650.00 10000.00
1988/12/31 9660.16 10175.00
1989/01/31 10207.32 10919.81
1989/02/28 10163.29 10647.91
1989/03/31 10377.12 10896.00
1989/04/30 10773.34 11461.51
1989/05/31 11270.18 11925.70
1989/06/30 11358.23 11857.72
1989/07/31 12138.09 12928.47
1989/08/31 12295.32 13181.87
1989/09/30 12295.32 13127.82
1989/10/31 12094.07 12823.26
1989/11/30 12421.10 13084.85
1989/12/31 12809.16 13398.89
1990/01/31 11962.12 12499.82
1990/02/28 12026.78 12661.07
1990/03/31 12026.78 12996.59
1990/04/30 11535.36 12671.68
1990/05/31 11910.39 13907.16
1990/06/30 12026.78 13812.60
1990/07/31 12059.11 13768.40
1990/08/31 11212.06 12523.73
1990/09/30 11128.00 11913.83
1990/10/31 11121.53 11862.60
1990/11/30 11612.95 12628.92
1990/12/31 11890.71 12981.27
1991/01/31 12274.94 13547.25
1991/02/28 13009.68 14515.88
1991/03/31 13420.87 14867.16
1991/04/30 13602.87 14902.84
1991/05/31 14088.20 15546.65
1991/06/30 13643.31 14834.61
1991/07/31 14054.50 15525.90
1991/08/31 14357.84 15893.87
1991/09/30 14411.76 15628.44
1991/10/31 14121.91 15837.86
1991/11/30 13778.13 15199.60
1991/12/31 14635.00 16938.43
1992/01/31 14658.75 16623.37
1992/02/29 14943.69 16839.48
1992/03/31 14563.77 16511.11
1992/04/30 14840.80 16996.54
1992/05/31 15323.62 17079.82
1992/06/30 15323.62 16825.33
1992/07/31 15798.52 17513.49
1992/08/31 15521.49 17154.46
1992/09/30 15458.17 17356.88
1992/10/31 15584.81 17417.63
1992/11/30 16249.68 18011.57
1992/12/31 16518.90 18233.11
1993/01/31 16831.06 18386.27
1993/02/28 17307.99 18636.33
1993/03/31 17845.61 19029.55
1993/04/30 17490.09 18569.04
1993/05/31 17897.64 19066.69
1993/06/30 18045.05 19121.98
1993/07/31 18426.59 19045.49
1993/08/31 19579.88 19767.32
1993/09/30 19527.85 19615.11
1993/10/31 20143.52 20021.14
1993/11/30 19293.72 19830.94
1993/12/31 19894.73 20070.89
1994/01/31 20066.89 20753.30
1994/02/28 19349.53 20190.89
1994/03/31 18603.48 19310.57
1994/04/30 18756.52 19557.74
1994/05/31 18794.78 19878.49
1994/06/30 18794.78 19391.47
1994/07/31 19244.32 20027.51
1994/08/31 19359.10 20848.63
1994/09/30 19091.29 20337.84
1994/10/31 18890.43 20795.44
1994/11/30 18306.97 20038.07
1994/12/31 18468.33 20335.24
1995/01/31 19288.05 20862.53
1995/02/28 19781.85 21675.54
1995/03/31 19969.50 22315.19
1995/04/30 20404.05 22972.37
1995/05/31 20937.36 23890.58
1995/06/30 22033.61 24445.56
1995/07/31 22774.32 25256.17
1995/08/31 23426.14 25319.56
1995/09/30 24226.10 26388.05
1995/10/31 24137.22 26293.84
1995/11/30 24779.17 27448.14
1995/12/31 25515.68 27976.80
1996/01/31 25525.93 28929.13
1996/02/29 25017.88 29197.30
1996/03/31 24183.60 29478.47
1996/04/30 24819.74 29912.98
1996/05/31 25549.73 30684.44
1996/06/30 25518.44 30801.34
1996/07/31 23766.46 29440.54
1996/08/31 24663.31 30061.44
1996/09/30 25508.02 31753.30
1996/10/31 25049.16 32629.06
1996/11/30 25935.58 35095.49
1996/12/31 25905.19 34400.24
1997/01/31 26875.63 36549.57
1997/02/28 26523.89 36836.12
1997/03/31 24828.35 35322.52
1997/04/30 24958.78 37431.28
1997/05/31 28207.57 39710.10
1997/06/30 29262.83 41489.11
1997/07/31 30590.80 44790.40
1997/08/31 31076.94 42281.24
1997/09/30 34551.01 44596.98
1997/10/31 32950.33 43107.44
1997/11/30 32938.47 45102.89
1997/12/31 32643.56 45877.30
1998/01/31 32930.07 46384.71
1998/02/28 36048.94 49729.97
1998/03/31 37088.57 52276.64
1998/04/30 35996.96 52802.54
1998/05/31 33813.75 51894.87
1998/06/30 34021.68 54002.84
1998/07/31 32891.09 53427.71
1998/08/31 26081.55 45703.13
1998/09/30 27900.89 48630.87
1998/10/31 29213.42 52586.51
1998/11/30 31487.60 55773.78
IMATRL PRASUN SHR__CHT 19981130 19981210 103404 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Strategic Opportunities Fund - Class T on
November 30, 1988, and the current 3.50% sales charge was paid. As the
chart shows, by November 30, 1998, the value of the investment would
have grown to $31,488 - a 214.88% increase on the initial investment.
For comparison, look at how the Standard & Poor's 500 Index did over
the same period. With dividends and capital gains, if any, reinvested,
the same $10,000 investment would have grown to $55,774 - a 457.74%
increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
long-term growth and
short-term volatility. In turn, the
share price and return of a
fund that invests in stocks will
vary. That means if you sell
your shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
FIDELITY ADVISOR STRATEGIC OPPORTUNITIES FUND - CLASS B
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can
look at the total percentage change in value, the average annual
percentage change or the growth of a hypothetical $10,000 investment.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). The initial offering of Class B shares took place on June 30,
1994. Class B shares bear a 1.00% 12b-1 fee that is reflected in
returns after June 30, 1994. Returns prior to June 30, 1994 are those
of Class T, and reflect Class T shares' 0.50% 12b-1 fee (0.65% prior
to January 1, 1996). Had Class B shares' 12b-1 fee been reflected,
returns prior to June 30, 1994 would have been lower. Class B shares'
contingent deferred sales charges included in the past one year, past
five years and past 10 years total return figures are 5%, 2% and 0%,
respectively. If Fidelity had not reimbursed certain class expenses,
the past five years and 10 years total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
1998
FIDELITY ADV STRATEGIC -4.94% 59.65% 219.20%
OPPORTUNITIES - CL B
FIDELITY ADV STRATEGIC -9.29% 57.65% 219.20%
OPPORTUNITIES - CL B (INCL.
CONTINGENT DEFERRED SALES
CHARGE)
S&P 500 23.66% 181.25% 457.74%
Capital Appreciation Funds 8.48% 100.86% 296.44%
Average
CUMULATIVE TOTAL RETURNS show Class B's performance in percentage
terms over a set period - in this case, one year, five years or 10
years. For example, if you had invested $1,000 in a fund that had a 5%
return over the past year, the value of your investment would be
$1,050. You can compare Class B's returns to those of the Standard &
Poor's 500 Index - a market capitalization-weighted index of common
stocks. To measure how Class B's performance stacked up against its
peers, you can compare it to the capital appreciation funds average,
which reflects the performance of mutual funds with similar objectives
tracked by Lipper Analytical Services, Inc. The past one year average
represents a peer group of 237 mutual funds. These benchmarks reflect
reinvestment of dividends and capital gains, if any, and exclude the
effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
1998
FIDELITY ADV STRATEGIC -4.94% 9.81% 12.31%
OPPORTUNITIES - CL B
FIDELITY ADV STRATEGIC -9.29% 9.53% 12.31%
OPPORTUNITIES - CL B (INCL.
CONTINGENT DEFERRED SALES
CHARGE)
S&P 500 23.66% 22.98% 18.75%
Capital Appreciation Funds 8.48% 13.91% 13.51%
Average
AVERAGE ANNUAL TOTAL RETURNS take Class B's cumulative return and show
you what would have happened if Class B had performed at a constant
rate each year.
$10,000 OVER 10 YEARS
FA Strategic Opp -CL B S&P 500
00608 SP001
1988/11/30 10000.00 10000.00
1988/12/31 10010.53 10175.00
1989/01/31 10577.53 10919.81
1989/02/28 10531.91 10647.91
1989/03/31 10753.50 10896.00
1989/04/30 11164.08 11461.51
1989/05/31 11678.95 11925.70
1989/06/30 11770.19 11857.72
1989/07/31 12578.33 12928.47
1989/08/31 12741.26 13181.87
1989/09/30 12741.26 13127.82
1989/10/31 12532.71 12823.26
1989/11/30 12871.61 13084.85
1989/12/31 13273.74 13398.89
1990/01/31 12395.97 12499.82
1990/02/28 12462.98 12661.07
1990/03/31 12462.98 12996.59
1990/04/30 11953.74 12671.68
1990/05/31 12342.37 13907.16
1990/06/30 12462.98 13812.60
1990/07/31 12496.48 13768.40
1990/08/31 11618.71 12523.73
1990/09/30 11531.61 11913.83
1990/10/31 11524.91 11862.60
1990/11/30 12034.15 12628.92
1990/12/31 12321.98 12981.27
1991/01/31 12720.14 13547.25
1991/02/28 13481.54 14515.88
1991/03/31 13907.64 14867.16
1991/04/30 14096.24 14902.84
1991/05/31 14599.18 15546.65
1991/06/30 14138.15 14834.61
1991/07/31 14564.25 15525.90
1991/08/31 14878.59 15893.87
1991/09/30 14934.47 15628.44
1991/10/31 14634.10 15837.86
1991/11/30 14277.85 15199.60
1991/12/31 15165.81 16938.43
1992/01/31 15190.41 16623.37
1992/02/29 15485.69 16839.48
1992/03/31 15091.99 16511.11
1992/04/30 15379.06 16996.54
1992/05/31 15879.39 17079.82
1992/06/30 15879.39 16825.33
1992/07/31 16371.52 17513.49
1992/08/31 16084.45 17154.46
1992/09/30 16018.83 17356.88
1992/10/31 16150.07 17417.63
1992/11/30 16839.05 18011.57
1992/12/31 17118.03 18233.11
1993/01/31 17441.52 18386.27
1993/02/28 17935.74 18636.33
1993/03/31 18492.86 19029.55
1993/04/30 18124.44 18569.04
1993/05/31 18546.78 19066.69
1993/06/30 18699.54 19121.98
1993/07/31 19094.91 19045.49
1993/08/31 20290.03 19767.32
1993/09/30 20236.11 19615.11
1993/10/31 20874.11 20021.14
1993/11/30 19993.50 19830.94
1993/12/31 20616.30 20070.89
1994/01/31 20794.71 20753.30
1994/02/28 20051.33 20190.89
1994/03/31 19278.22 19310.57
1994/04/30 19436.81 19557.74
1994/05/31 19476.45 19878.49
1994/06/30 19476.45 19391.47
1994/07/31 19962.13 20027.51
1994/08/31 20071.15 20848.63
1994/09/30 19803.54 20337.84
1994/10/31 19575.57 20795.44
1994/11/30 18951.13 20038.07
1994/12/31 19128.77 20335.24
1995/01/31 19942.54 20862.53
1995/02/28 20447.28 21675.54
1995/03/31 20632.70 22315.19
1995/04/30 21075.64 22972.37
1995/05/31 21621.58 23890.58
1995/06/30 22754.68 24445.56
1995/07/31 23506.65 25256.17
1995/08/31 24155.60 25319.56
1995/09/30 24969.38 26388.05
1995/10/31 24876.67 26293.84
1995/11/30 25525.62 27448.14
1995/12/31 26272.85 27976.80
1996/01/31 26272.85 28929.13
1996/02/29 25742.82 29197.30
1996/03/31 24861.52 29478.47
1996/04/30 25514.34 29912.98
1996/05/31 26254.20 30684.44
1996/06/30 26199.80 30801.34
1996/07/31 24393.66 29440.54
1996/08/31 25307.61 30061.44
1996/09/30 26167.15 31753.30
1996/10/31 25688.42 32629.06
1996/11/30 26580.61 35095.49
1996/12/31 26536.06 34400.24
1997/01/31 27521.07 36549.57
1997/02/28 27142.96 36836.12
1997/03/31 25391.80 35322.52
1997/04/30 25515.12 37431.28
1997/05/31 28832.46 39710.10
1997/06/30 29893.02 41489.11
1997/07/31 31237.22 44790.40
1997/08/31 31718.17 42281.24
1997/09/30 35245.15 44596.98
1997/10/31 33592.65 43107.44
1997/11/30 33580.32 45102.89
1997/12/31 33293.85 45877.30
1998/01/31 33550.51 46384.71
1998/02/28 36716.93 49729.97
1998/03/31 37754.43 52276.64
1998/04/30 36622.61 52802.54
1998/05/31 34385.91 51894.87
1998/06/30 34574.54 54002.84
1998/07/31 33415.77 53427.71
1998/08/31 26490.08 45703.13
1998/09/30 28322.56 48630.87
1998/10/31 29629.55 52586.51
1998/11/30 31920.15 55773.78
IMATRL PRASUN SHR__CHT 19981130 19981210 102937 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Strategic Opportunities Fund - Class B on
November 30, 1988. As the chart shows, by November 30, 1998, the value
of the investment would have grown to $31,920 - a 219.20% increase on
the initial investment. For comparison, look at how the Standard &
Poor's 500 Index did over the same period. With dividends and capital
gains, if any, reinvested, the same $10,000 investment would have
grown to $55,774 - a 457.74% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
long-term growth and
short-term volatility. In turn, the
share price and return of a
fund that invests in stocks will
vary. That means if you sell
your shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
When the final bell of the U.S. stock
market sounded on Monday,
November 23, 1998, the Dow
Jones Industrial Average stood at a
record high of 9374.27, serving
notice that the bleak economic
outlook from just a few short months
earlier would not keep positive
investor sentiment down. For the
12-month period ended November
30, 1998, the Dow - an index of
30 blue-chip stocks - returned
18.56%. What caused the
turnaround from the doldrums of
equity performance during the
summer and early fall? A variety of
factors: The economic problems in
Russia, Brazil and other emerging
markets began to dissipate; Asian
markets began to rebound; and,
perhaps most importantly, three
interest-rate cuts late in the period
by the Federal Reserve Board
helped stem the tide of a slowing
U.S. economy. All these factors
culminated in the Dow reaching its
record high late in November, a
peak that outpaced the previous
record set in July by nearly 40 points.
Small-cap stock performance was
still a far cry behind their large-cap
brethren. For the period, the Russell
2000 - a popular measure of
small-cap stock performance -
returned -6.62%, significantly
trailing the large-cap weighted
Standard & Poor's 500 Index's
return of 23.66%. Despite the late
rally in the equity market, this kind
of volatility has characterized the
entire year, and when it will level off
is impossible to predict.
An interview with Harris Leviton, Portfolio Manager of Fidelity
Advisor Strategic Opportunities Fund
Q. HOW DID THE FUND PERFORM, HARRIS?
A. For the 12 months that ended November 30, 1998, the fund's Class A,
Class T and Class B shares posted total returns of -4.45%, -4.40% and
- -4.94%, respectively. During the same period, the Standard & Poor's
500 Index returned 23.66% while the capital appreciation funds average
tracked by Lipper Analytical Services returned 8.48%.
Q. WHY DID THE FUND'S PERFORMANCE TRAIL THE INDEX AND THE AVERAGE BY
SUCH A WIDE MARGIN?
A. The fund's primary investment objective is to seek out special
situations - such as undervalued investment opportunities or companies
with new products and improved growth prospects. I tend to find these
special situations in the smaller-cap stock arena, which significantly
underperformed large-cap stocks and the broader market indexes during
the period. Compared to the small-cap universe, however, the fund
fared relatively well. In fact, the fund outpaced the performance of
the Russell 2000 Index - a popular measure of stock performance of
smaller companies, which returned -6.62% during the 12-month period.
Q. IN LIGHT OF THIS NEGATIVE ENVIRONMENT FOR SMALL-CAP STOCKS, DID YOU
MAKE ANY CHANGES TO THE FUND'S ASSET ALLOCATION?
A. Not really. Interestingly, I don't believe the underperformance of
many small-cap stocks was based on any fundamental business outlook.
Specifically, select small-caps continued to deliver solid sales gains
and earnings growth. As a result, many small-cap stocks went from
being slightly undervalued to significantly cheaper than the broader
market. I used this opportunity to increase certain fund holdings and
I am quite comfortable with the fund's asset allocation. On a more
positive note, toward the end of the period, investors became less
concerned with problems in overseas markets and more focused on the
positive state of the U.S. economy. Small-cap stocks started to
rebound in response to improved investor sentiment.
Q. HEALTH CARE, CONSTRUCTION & REAL ESTATE AND DURABLES REMAINED
OVERWEIGHTED SECTORS RELATIVE TO THE S&P 500 INDEX. WHAT DID YOU LIKE
ABOUT THESE INDUSTRIES?
A. The health care weighting, like most of the fund, was focused on
small- and mid-cap stocks. Although they didn't do as well as the
larger-cap health care stocks, I think many small-cap health care
stocks are poised to benefit from a number of new products with the
potential to boost profits. I overweighted fund assets in housing
construction and consumer durables because I think these areas will
continue to benefit from a strong housing market. While concerns of a
potential recession hurt this sector at times during the period, many
builders and home furnishing companies experienced robust consumer
demand. And the stocks rebounded significantly during the period.
Q. WHAT STOCKS PERFORMED WELL FOR THE FUND?
A. Sepracor, a biotechnology and pharmaceutical company, performed
extremely well during the period. It was the fund's largest holding as
of November 30, and was a huge success as the company's strategy of
producing improved versions of existing drugs paid off handsomely.
During the period, the company signed significant deals with Eli Lilly
to produce an improved version of Prozac and Schering Plough to
produce an improved version of Claritin. American Bankers, a specialty
property-casualty insurance company, was a solid performer for the
fund as well. It produced strong results in its credit-based accident,
health and life insurance operations, and received a buy-out offer
during the period.
Q. WHAT STOCKS WERE DISAPPOINTMENTS?
A. Unfortunately, a majority of the fund's holdings declined in market
value during the period. Again, this was primarily a factor of the
fund's focus on small-cap value stocks, which were dramatically sold
off during the market's decline in September and October. The biggest
disappointment, however, was Cygnus, a biotechnology and drug delivery
manufacturer. The launch of its major new product was delayed and a
partnership with Becton Dickinson fell apart.
Q. WHAT'S YOUR OUTLOOK OVER THE NEXT SIX MONTHS, HARRIS?
A. We've had a tremendous bounce-back from the market's retreat in
October. Yet, with the exception of three interest-rate cuts by the
Federal Reserve Board, it doesn't seem much has changed in the global
financial environment. We've seen a lot of speculation in the market,
and this is usually a bad sign for short-term progress. However, the
economic consensus in the U.S. seems to be positive, which can help
support the markets, and the basic outlook for small-cap stocks
continues to be strong. Many small- and mid-cap stocks are
substantially cheaper than the market and, in many cases, they are
growing sales and earnings faster than larger-cap stocks. With certain
companies, the disparities between large- and small-cap stock
valuations are enormous. If the market starts to recognize these
opportunities, fund performance should rally.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
HARRIS LEVITON ON
SMALL-CAP VALUE INVESTING:
"As the fund's performance
indicates, it was a difficult period
for the fund's investment style.
Small-cap stocks and those that I
viewed as undervalued relative to
similar situations were out of
favor during the period. In some
cases, there did not seem to be any
fundamental investment reason for
the punishment that certain
small-cap companies experienced
during the market's downturn from
August through October. For
example, companies like Morton's
Restaurant Group saw its stock
price slashed from 20 to 13 in one
day in October even though the
company's business outlook was as
strong as ever and the stock
performed well in previous
recessions.
"While it's impossible to tell when
this trend will reverse, we've seen
huge amounts of money pour into
big stocks, creating a tremendous
valuation disparity between small-
and large-cap stocks. I believe this
trend has unleashed a lot of
opportunities because many solid
companies with bright outlooks
have been overlooked as the
market chose to focus on a small
number of extremely large
companies in the S&P 500 index.
"While it has been a painful period
to stick to my guns, at some point it
seems this trend should change and
reward the small companies that are
selling at 10 times earnings - a low
price-to-earnings ratio in today's
market - but with projected annual
earnings growth at 20%. There's a
number of them out there."
FUND FACTS
GOAL: seeks capital
appreciation by investing
primarily in securities of
companies believed by
Fidelity to involve a "special
situation"
START DATE: December 31,
1983
SIZE: as of November 30,
1998, more than $572 million
MANAGER: Harris Leviton,
since 1996; joined Fidelity in
1986
(checkmark)
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF NOVEMBER
30, 1998
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE STOCKS 6 MONTHS AGO
Sepracor, Inc. 8.8 7.1
Cable Design Technology Corp. 4.3 3.0
AFC Cable Systems, Inc. 4.1 4.0
Whole Foods Market, Inc. 4.0 7.7
Harveys Casino Resorts 3.9 3.4
Foodmaker, Inc. 3.8 1.6
Maxim Group, Inc. 3.4 2.2
USG Corp. 3.0 2.8
WMS Industries, Inc. 2.4 1.1
Midway Games, Inc. 2.3 1.9
TOP FIVE MARKET SECTORS AS OF
NOVEMBER 30, 1998
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE MARKET SECTORS 6
MONTHS AGO
HEALTH 15.9 15.4
MEDIA & LEISURE 13.3 12.8
DURABLES 13.0 11.6
BASIC INDUSTRIES 11.6 12.8
TECHNOLOGY 9.1 9.7
</TABLE>
ASSET ALLOCATION (% OF FUND'S
INVESTMENTS)
AS OF NOVEMBER 30, 1998 * AS OF MAY 31, 1998 **
Row: 1, Col: 1, Value: 95.8
Row: 1, Col: 2, Value: 1.3
Row: 1, Col: 3, Value: 2.5
Stocks 98.0%
Bonds 0.8%
Short-term
investments 1.2%
FOREIGN
INVESTMENTS 5.0%
Stocks 96.8%
Bonds 0.7%
Short-term
investments 2.5%
FOREIGN
INVESTMENTS 1.4%
Row: 1, Col: 1, Value: 97.0
Row: 1, Col: 2, Value: 1.3
Row: 1, Col: 3, Value: 2.0
*
**
INVESTMENTS NOVEMBER 30, 1998
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 95.7%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 0.4%
DEFENSE ELECTRONICS - 0.4%
Herley Industries, Inc. (a) 208,666 $ 2,269,243
BASIC INDUSTRIES - 11.6%
CHEMICALS & PLASTICS - 1.2%
Associated Materials, Inc. 5,000 55,000
Hanna (M.A.) Co. 43,300 608,906
IMC Global, Inc. 163,600 3,742,350
Ivex Packaging Corp. (a) 122,500 2,388,750
6,795,006
IRON & STEEL - 0.2%
Cold Metal Products, Inc. (a) 128,600 361,688
Steel Dynamics, Inc. (a) 49,900 679,888
1,041,576
METALS & MINING - 9.4%
AFC Cable Systems, Inc. (a)(b) 794,125 23,525,953
Belden, Inc. 216,500 3,653,438
Brush Wellman, Inc. 137,500 2,217,188
Cable Design Technology Corp. 1,324,850 24,426,922
(a)
53,823,501
PACKAGING & CONTAINERS - 0.0%
Silgan Holdings, Inc. (a) 2,400 66,000
PAPER & FOREST PRODUCTS - 0.8%
ABT Building Products Corp. 147,000 1,470,000
(a)
Chesapeake Corp. 21,300 738,844
Mercer International, Inc. 407,900 2,434,653
4,643,497
TOTAL BASIC INDUSTRIES 66,369,580
CONSTRUCTION & REAL ESTATE -
7.9%
BUILDING MATERIALS - 4.6%
American Standard Companies, 140,000 4,795,000
Inc. (a)
Rock of Ages Corp. Class A (a) 172,800 2,073,600
USG Corp. 347,700 17,189,419
York International Corp. 60,000 2,520,000
26,578,019
CONSTRUCTION - 3.1%
American Buildings Co. (a) 20,200 492,375
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
CONSTRUCTION & REAL ESTATE -
CONTINUED
CONSTRUCTION - CONTINUED
Beazer Homes USA, Inc. (a) 173,500 $ 4,142,313
Butler Manufacturing Co. 47,000 1,092,750
Engle Homes, Inc. 202,200 2,780,250
Lennar Corp. 97,400 2,167,150
M/I Schottenstein Homes, Inc. 215,500 4,700,594
NCI Building Systems, Inc. (a) 58,400 1,430,800
U.S. Home Corp. (a) 20,100 640,688
17,446,920
REAL ESTATE INVESTMENT TRUSTS
- - 0.2%
Brandywine Realty Trust 60,000 1,080,000
TOTAL CONSTRUCTION & REAL 45,104,939
ESTATE
DURABLES - 13.0%
AUTOS, TIRES, & ACCESSORIES -
0.8%
Cummins Engine Co., Inc. 53,900 2,001,038
Navistar International Corp. 110,000 2,846,250
(a)
4,847,288
CONSUMER DURABLES - 0.7%
Mikasa, Inc. 51,800 563,325
Simpson Manufacturing Co. 89,800 3,367,500
Ltd. (a)
3,930,825
CONSUMER ELECTRONICS - 1.7%
Fossil, Inc. (a) 266,800 7,387,025
Movado Group, Inc. 102,500 2,075,625
9,462,650
HOME FURNISHINGS - 5.6%
Bassett Furniture Industries, 186,800 4,716,700
Inc.
Furniture Brands 10,000 254,375
International, Inc. (a)
Haverty Furniture Companies, 18,100 352,950
Inc.
Heilig-Meyers Co. 135,600 949,200
Ladd Furniture, Inc. (a) 372,400 6,517,000
Maxim Group, Inc. (a)(b) 999,400 19,550,763
32,340,988
TEXTILES & APPAREL - 4.2%
Deckers Outdoor Corp. (a) 361,900 769,038
Galey & Lord, Inc. (a) 115,800 1,252,088
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
DURABLES - CONTINUED
TEXTILES & APPAREL - CONTINUED
Maxwell Shoe, Inc. Class A 796,300 $ 9,456,063
(a)(b)
Mohawk Industries, Inc. (a) 150,000 5,596,875
Quaker Fabric Corp. (a) 95,000 665,000
Shaw Industries, Inc. 300,000 6,075,000
Synthetic Industries, Inc. (a) 15,000 247,500
24,061,564
TOTAL DURABLES 74,643,315
ENERGY - 2.4%
ENERGY SERVICES - 2.3%
Baker Hughes, Inc. 200,000 3,662,500
BJ Services Co. (a) 356,800 4,928,300
Santa Fe International Corp. 300,000 3,731,250
Smith International, Inc. 40,900 986,713
13,308,763
OIL & GAS - 0.1%
Conoco, Inc. Class A (a) 30,000 710,625
TOTAL ENERGY 14,019,388
FINANCE - 1.1%
CREDIT & OTHER FINANCE - 0.1%
Regent Pacific Group Ltd. 5,000,000 536,003
INSURANCE - 1.0%
American Bankers Insurance 129,800 5,889,675
Group, Inc.
TOTAL FINANCE 6,425,678
HEALTH - 15.9%
DRUGS & PHARMACEUTICALS - 12.9%
Alliance Pharmaceutical Corp. 2,780,100 10,772,888
(a)(b)
Aviron (a) 301,600 6,484,400
Cytyc Corp. (a) 265,300 5,256,256
Natrol, Inc. (a) 80,000 810,000
Sepracor, Inc. (a) 608,700 50,522,090
73,845,634
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
HEALTH - CONTINUED
MEDICAL EQUIPMENT & SUPPLIES
- - 3.0%
Cygnus, Inc. (a) 856,950 $ 4,124,072
I-Stat Corp. (a)(b) 834,700 5,634,225
Oakley, Inc. (a) 445,700 4,345,575
Resound Corp. (a) 567,000 2,976,750
17,080,622
TOTAL HEALTH 90,926,256
INDUSTRIAL MACHINERY &
EQUIPMENT - 3.1%
Case Corp. 173,500 4,207,375
Columbus McKinnon Corp. 221,900 4,035,806
Compx International, Inc. (a) 133,600 3,348,350
Gradall Industries, Inc. (a) 200,000 2,687,500
Hardinge, Inc. 17,500 333,594
T B Wood's Corp. 246,700 3,392,125
18,004,750
MEDIA & LEISURE - 13.1%
BROADCASTING - 0.1%
Nielsen Media Research, Inc. 49,500 742,500
(a)
ENTERTAINMENT - 3.9%
Film Roman, Inc. (a) 55,000 39,531
Harveys Casino Resorts (b) 829,600 22,191,800
22,231,331
LEISURE DURABLES & TOYS - 0.7%
Marvel Enterprises, Inc. (a) 359,300 2,200,713
Silicon Gaming, Inc. (a)(b) 913,500 1,769,906
3,970,619
LODGING & GAMING - 2.4%
WMS Industries, Inc. (b) 1,815,100 13,499,806
PUBLISHING - 0.6%
Reader's Digest Association, 152,800 3,676,750
Inc. Class A (non-vtg.)
RESTAURANTS - 5.4%
Foodmaker, Inc. (a) 1,117,700 21,655,438
Il Fornaio America Corp. (a) 77,700 592,463
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
MEDIA & LEISURE - CONTINUED
RESTAURANTS - CONTINUED
Morton's Restaurant Group, 424,800 $ 8,442,900
Inc. (a)(b)
NPC International, Inc. (a) 12,600 143,325
30,834,126
TOTAL MEDIA & LEISURE 74,955,132
NONDURABLES - 6.8%
AGRICULTURE - 0.8%
Saskatchewan Wheat Pool:
Class B (non-vtg.) 478,300 3,322,719
Class B (non-vtg.) (c) 158,000 1,097,616
4,420,335
FOODS - 2.4%
Corn Products International, 453,300 12,720,731
Inc.
Tomkins PLC 3,457 16,009
Vlasic Foods International, 62,200 1,345,075
Inc. (a)
14,081,815
HOUSEHOLD PRODUCTS - 2.1%
Church & Dwight Co., Inc. 348,500 12,045,031
TOBACCO - 1.5%
Philip Morris Companies, Inc. 150,000 8,390,625
TOTAL NONDURABLES 38,937,806
RETAIL & WHOLESALE - 8.7%
APPAREL STORES - 1.1%
Big Dog Holdings, Inc. (a)(b) 1,011,600 3,161,250
Stage Stores, Inc. (a) 290,000 3,335,000
6,496,250
GENERAL MERCHANDISE STORES -
3.1%
Consolidated Stores Corp. (a) 270,000 5,805,000
Freds, Inc. Class A (b) 607,375 8,541,211
Stein Mart, Inc. (a) 362,300 3,113,516
17,459,727
GROCERY STORES - 4.0%
Whole Foods Market, Inc. (a) 488,600 22,719,900
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
RETAIL & WHOLESALE - CONTINUED
RETAIL & WHOLESALE,
MISCELLANEOUS - 0.5%
Brylane, Inc. (a) 80,000 $ 1,270,000
Cameron Ashley Building 90,000 1,147,500
Products, Inc. (a)
Electronics Boutique Holding 35,000 658,438
Corp. (a)
3,075,938
TOTAL RETAIL & WHOLESALE 49,751,815
SERVICES - 0.7%
PRINTING - 0.5%
Schawk, Inc. Class A 194,000 2,788,750
SERVICES - 0.2%
Compass International 17,000 163,625
Services Corp.
Manpower, Inc. 60,000 1,335,000
1,498,625
TOTAL SERVICES 4,287,375
TECHNOLOGY - 8.7%
COMMUNICATIONS EQUIPMENT - 0.4%
Premisys Communications, Inc. 162,000 2,409,750
(a)
COMPUTER SERVICES & SOFTWARE
- - 3.8%
Activision, Inc. (a) 125,000 1,671,875
CompUSA, Inc. (a) 7,200 106,650
Cotelligent, Inc. (a) 10,000 183,125
Eidos PLC sponsored ADR (a) 21,500 309,063
Electronic Arts, Inc. (a) 30,000 1,263,750
GT Interactive Software Corp. 513,200 3,079,200
(a)
Interplay Entertainment Corp. 590,000 1,198,438
(a)
JDA Software Group, Inc. (a) 66,800 534,400
Midway Games, Inc. (a) 1,275,359 12,992,720
Project Software & 2,500 75,313
Development, Inc. (a)
Titan Corp. (a) 74,000 397,750
21,812,284
COMPUTERS & OFFICE EQUIPMENT
- - 1.6%
Performance Technologies, 730,300 8,946,175
Inc. (a)(b)
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TECHNOLOGY - CONTINUED
ELECTRONIC INSTRUMENTS - 0.7%
Optical Coating Laboratories, 6,000 $ 112,500
Inc.
Varian Associates, Inc. 100,100 3,960,206
4,072,706
ELECTRONICS - 2.2%
AVX Corp. 550,500 10,700,344
Richardson Electronics Ltd. 238,000 2,023,000
12,723,344
TOTAL TECHNOLOGY 49,964,259
TRANSPORTATION - 2.1%
AIR TRANSPORTATION - 1.0%
Reno Air, Inc. (a)(b) 784,800 5,640,750
RAILROADS - 0.5%
Burlington Northern Santa Fe 39,700 1,349,800
Corp.
Genesee & Wyoming, Inc. Class 118,000 1,755,250
A (a)
3,105,050
TRUCKING & FREIGHT - 0.6%
Airborne Freight Corp. 90,000 2,401,875
SPACEHAB, Inc. (a) 90,000 776,250
3,178,125
TOTAL TRANSPORTATION 11,923,925
UTILITIES - 0.2%
CELLULAR - 0.2%
Nextel Communications, Inc. 50,000 1,075,000
Class A (a)
TOTAL COMMON STOCKS 548,658,461
(Cost $512,197,097)
CONVERTIBLE PREFERRED STOCKS
- - 1.1%
FINANCE - 0.1%
CLOSED END INVESTMENT COMPANY
- - 0.1%
Readers Digest Automatic 30,000 725,625
Common Exchange Trust $1.93
TRACES
CONVERTIBLE PREFERRED STOCKS
- - CONTINUED
SHARES VALUE (NOTE 1)
MEDIA & LEISURE - 0.2%
BROADCASTING - 0.2%
Triathlon Broadcasting Co. 104,080 $ 1,027,790
$0.945 depository shares DECS
TRANSPORTATION - 0.8%
AIR TRANSPORTATION - 0.8%
Reno Air, Inc. Series A, 170,000 4,632,500
$7.281 (c)
TOTAL CONVERTIBLE PREFERRED 6,385,915
STOCKS
(Cost $6,071,985)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CONVERTIBLE BONDS - 0.7%
MOODY'S RATINGS (UNAUDITED) PRINCIPAL AMOUNT
TECHNOLOGY - 0.4%
ELECTRONICS - 0.4%
Richardson Electronics Ltd.:
7.25% 12/15/06 B3 $ 404,000 323,200
8.25% 6/15/06 B3 1,978,000 1,740,640
2,063,840
TRANSPORTATION - 0.3%
TRUCKING & FREIGHT - 0.3%
SPACEHAB, Inc. 8% 10/15/07 (c) - 2,500,000 2,025,000
TOTAL CONVERTIBLE BONDS 4,088,840
(Cost $4,560,430)
</TABLE>
CASH EQUIVALENTS - 2.5%
MATURITY AMOUNT
Investments in repurchase $ 14,122,059 14,120,000
agreements (U.S. Treasury
obligations), in a joint
trading account at 5.25%,
dated 11/30/98 due 12/1/98
TOTAL INVESTMENT IN $ 573,253,216
SECURITIES - 100%
(Cost $536,949,512)
SECURITY TYPE ABBREVIATIONS
DECS - Dividend Enhanced Convertible
Stock/Debt Exchangeable for Common Stock
TRACES - Trust Automatic Common Exchange Securities
LEGEND
(a) Non-income producing
(b) Affiliated company (see Note 10 of Notes to Financial Statements).
(c) Security exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in
transactions exempt from registration, normally to qualified
institutional buyers. At the period end, the value of these securities
amounted to $7,755,116 or 1.4% of net assets.
INCOME TAX INFORMATION
At November 30, 1998, the aggregate cost of investment securities for
income tax purposes was $536,978,516. Net unrealized appreciation
aggregated $36,274,700, of which $135,390,300 related to appreciated
investment securities and $99,115,600 related to depreciated
investment securities.
The fund hereby designates approximately $41,876,000 as a capital gain
dividend for the purpose of the dividend paid deduction.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1998
ASSETS
Investment in securities, at $ 573,253,216
value (including repurchase
agreements of $14,120,000)
(cost $536,949,512) - See
accompanying schedule
Cash 795
Receivable for investments 5,439,887
sold
Receivable for fund shares 566,889
sold
Dividends receivable 261,665
Interest receivable 113,218
Other receivables 126,862
TOTAL ASSETS 579,762,532
LIABILITIES
Payable for investments $ 4,469,194
purchased
Payable for fund shares 1,981,356
redeemed
Accrued management fee 165,741
Distribution fees payable 267,534
Other payables and accrued 174,173
expenses
TOTAL LIABILITIES 7,057,998
NET ASSETS $ 572,704,534
Net Assets consist of:
Paid in capital $ 497,745,143
Accumulated undistributed net 38,653,611
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 36,305,780
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS $ 572,704,534
STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
NOVEMBER 30, 1998
CALCULATION OF MAXIMUM $23.89
OFFERING PRICE CLASS A: NET
ASSET VALUE and redemption
price per share
($4,612,687 (divided by)
193,117 shares)
Maximum offering price per $25.35
share (100/94.25 of $23.89)
CLASS T: NET ASSET VALUE and $24.23
redemption price per share
($443,578,413 (divided by)
18,307,645 shares)
Maximum offering price per $25.11
share (100/96.50 of $24.23)
CLASS B: NET ASSET VALUE and $23.69
offering price per share
($101,233,548 (divided by)
4,272,898 shares) A
INITIAL CLASS: NET ASSET $24.61
VALUE, offering price and
redemption price per share
($18,471,412 (divided by)
750,438 shares)
INSTITUTIONAL CLASS: NET $24.17
ASSET VALUE, offering price
and redemption price per
share ($4,808,474 (divided
by) 198,908 shares)
A REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1998
INVESTMENT INCOME $ 2,960,946
Dividends (including $289,645
received from affiliated
issuers)
Interest 988,931
TOTAL INCOME 3,949,877
EXPENSES
Management fee Basic fee $ 3,718,524
Performance adjustment (1,343,174)
Transfer agent fees 1,316,481
Distribution fees 3,564,769
Accounting fees and expenses 341,818
Non-interested trustees' 1,792
compensation
Custodian fees and expenses 35,154
Registration fees 86,513
Audit 36,021
Legal 6,876
Interest 1,220
Miscellaneous 54,237
Total expenses before 7,820,231
reductions
Expense reductions (56,980) 7,763,251
NET INVESTMENT INCOME (LOSS) (3,813,374)
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 39,751,777
(including realized gain of
$324,211 on sales of
investments in affiliated
issuers)
Foreign currency transactions 107,822 39,859,599
Change in net unrealized
appreciation (depreciation)
on:
Investment securities (66,258,377)
Assets and liabilities in 8,545 (66,249,832)
foreign currencies
NET GAIN (LOSS) (26,390,233)
NET INCREASE (DECREASE) IN $ (30,203,607)
NET ASSETS RESULTING FROM
OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
YEAR ENDED NOVEMBER 30, 1998 ELEVEN MONTHS ENDED NOVEMBER YEAR ENDED DECEMBER 31, 1996
30, 1997
INCREASE (DECREASE) IN NET
ASSETS
Operations Net investment $ (3,813,374) $ (2,081,517) $ 5,065,025
income (loss)
Net realized gain (loss) 39,859,599 73,741,589 101,103,020
Change in net unrealized (66,249,832) 70,136,543 (96,084,415)
appreciation (depreciation)
NET INCREASE (DECREASE) IN (30,203,607) 141,796,615 10,083,630
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders
From net investment income - - (5,501,432)
From net realized gain (55,555,575) (23,306,698) (70,113,368)
TOTAL DISTRIBUTIONS (55,555,575) (23,306,698) (75,614,800)
Share transactions - net (9,889,615) (172,192,655) 36,171,237
increase (decrease)
TOTAL INCREASE (DECREASE) (95,648,797) (53,702,738) (29,359,933)
IN NET ASSETS
NET ASSETS
Beginning of period 668,353,331 722,056,069 751,416,002
End of period (including $ 572,704,534 $ 668,353,331 $ 722,056,069
undistributed net
investment income of $0, $0
and $1,667,423,
respectively)
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C> <C>
YEAR ENDED NOVEMBER 30, ELEVEN MONTHS ENDED NOVEMBER YEAR ENDED DECEMBER 31,
30,
1998 1997 1996 F
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 27.51 $ 22.51 $ 23.48
period
Income from Investment
Operations
Net investment income (loss) (.14) (.13) .08
E
Net realized and unrealized (1.09) 6.00 1.26
gain (loss)
Total from investment (1.23) 5.87 1.34
operations
Less Distributions
From net investment income - - (.37)
From net realized gain (2.39) (.87) (1.94)
Total distributions (2.39) (.87) (2.31)
Net asset value, end of period $ 23.89 $ 27.51 $ 22.51
TOTAL RETURN B, C (4.45)% 26.96% 5.80%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 4,613 $ 2,309 $ 638
(000 omitted)
Ratio of expenses to average 1.24% G 1.49% A, G .99% A, D
net assets
Ratio of expenses to average 1.23% H 1.47% A, H .97% A, H
net assets after expense
reductions
Ratio of net investment (.59)% (.59)% A 1.00% A
income (loss) to average net
assets
Portfolio turnover 64% 61% A 151%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 6 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D LIMITED IN ACCORDANCE WITH A STATE EXPENSE LIMITATION.
E NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
F FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A
SHARES) TO DECEMBER 31, 1996.
G FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER (SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS).
H FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS).
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
YEAR ENDED NOVEMBER 30, ELEVEN MONTHS ENDED NOVEMBER YEARS ENDED DECEMBER 31,
30,
1998 1997 1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 27.78 $ 22.69 $ 24.88 $ 18.70
period
Income from Investment
Operations
Net investment income (loss) (.13) D (.07) D .17 D .39
Net realized and unrealized (1.10) 6.03 .18 6.73
gain (loss)
Total from investment (1.23) 5.96 .35 7.12
operations
Less Distributions
From net investment income - - (.19) (.39)
From net realized gain (2.32) (.87) (2.35) (.55)
Total distributions (2.32) (.87) (2.54) (.94)
Net asset value, end of period $ 24.23 $ 27.78 $ 22.69 $ 24.88
TOTAL RETURN B, C (4.40)% 27.15% 1.53% 38.16%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 443,578 $ 529,043 $ 560,645 $ 619,993
(000 omitted)
Ratio of expenses to average 1.16% 1.24% A 1.28% 1.61%
net assets
Ratio of expenses to average 1.15% F 1.23% A, F 1.27% F 1.61%
net assets after expense
reductions
Ratio of net investment (.53)% (.29)% A .70% 1.90%
income (loss) to average
net assets
Portfolio turnover 64% 61% A 151% 142%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
THREE MONTHS ENDED DECEMBER 31, YEARS ENDED SEPTEMBER 30,
1994 1994 1993
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 19.96 $ 22.52 $ 19.53
period
Income from Investment
Operations
Net investment income (loss) .10 D .39 D .33
Net realized and unrealized (.75) (.81) 4.44
gain (loss)
Total from investment (.65) (.42) 4.77
operations
Less Distributions
From net investment income (.35) (.43) (.57)
From net realized gain (.26) (1.71) (1.21)
Total distributions (.61) (2.14) (1.78)
Net asset value, end of period $ 18.70 $ 19.96 $ 22.52
TOTAL RETURN B, C (3.26)% (2.24)% 26.33%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 375,691 $ 385,349 $ 269,833
(000 omitted)
Ratio of expenses to average 1.73% A, E 1.85% 1.57% G
net assets
Ratio of expenses to average 1.73% A 1.84% F 1.57%
net assets after expense
reductions
Ratio of net investment 2.03% A 1.89% 2.06%
income (loss) to average
net assets
Portfolio turnover 228% A 159% 183%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 6 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS).
G INCLUDES REIMBURSEMENT OF $.03 PER SHARE FOR ADJUSTMENTS TO PRIOR
PERIOD'S FEES.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
YEAR ENDED NOVEMBER 30, ELEVEN MONTHS ENDED NOVEMBER YEARS ENDED DECEMBER 31,
30,
1998 1997 1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 27.23 $ 22.36 $ 24.56 $ 18.57
period
Income from Investment
Operations
Net investment income (loss) (.27) D (.18) D .04 D .38
Net realized and unrealized (1.07) 5.92 .18 6.54
gain (loss)
Total from investment (1.34) 5.74 .22 6.92
operations
Less Distributions
From net investment income - - (.07) (.38)
From net realized gain (2.20) (.87) (2.35) (.55)
Total distributions (2.20) (.87) (2.42) (.93)
Net asset value, end of period $ 23.69 $ 27.23 $ 22.36 $ 24.56
TOTAL RETURN B, C (4.94)% 26.55% 1.00% 37.35%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 101,234 $ 109,646 $ 98,535 $ 87,566
(000 omitted)
Ratio of expenses to average 1.71% 1.78% A 1.80% 2.11%
net assets
Ratio of expenses to average 1.70% F 1.77% A, F 1.79% F 2.10% F
net assets after expense
reductions
Ratio of net investment (1.07)% (.84)% A .18% 1.40%
income (loss) to average net
assets
Portfolio turnover 64% 61% A 151% 142%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
THREE MONTHS ENDED DECEMBER 31, YEAR ENDED SEPTEMBER 30,
1994 1994 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 19.98 $ 19.65
period
Income from Investment
Operations
Net investment income (loss) .06 D .05 D
Net realized and unrealized (.74) .28
gain (loss)
Total from investment (.68) .33
operations
Less Distributions
From net investment income (.47) -
From net realized gain (.26) -
Total distributions (.73) -
Net asset value, end of period $ 18.57 $ 19.98
TOTAL RETURN B, C (3.41)% 1.68%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 17,090 $ 8,824
(000 omitted)
Ratio of expenses to average 2.58% A 2.63% A, G
net assets
Ratio of expenses to average 2.53% A, F 2.63% A
net assets after expense
reductions
Ratio of net investment 1.22% A 1.11% A
income (loss) to average net
assets
Portfolio turnover 228% A 159%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 6 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME CONTINGENT DEFERRED SALES
CHARGE AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD JUNE 30, 1994 (COMMENCEMENT OF SALE OF CLASS B
SHARES) TO SEPTEMBER 30, 1994.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS).
G FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
YEAR ENDED NOVEMBER 30, ELEVEN MONTHS ENDED NOVEMBER YEARS ENDED DECEMBER 31,
30,
1998 1997 1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 28.19 $ 22.90 $ 25.10 $ 18.86
period
Income from Investment
Operations
Net investment income (loss) (.02) D .04 D .28 D .50
Net realized and unrealized (1.12) 6.12 .19 6.79
gain (loss)
Total from investment (1.14) 6.16 .47 7.29
operations
Less Distributions
From net investment income - F - (.32) (.50)
From net realized gain (2.44) F (.87) (2.35) (.55)
Total distributions (2.44) (.87) (2.67) (1.05)
Net asset value, end of period $ 24.61 $ 28.19 $ 22.90 $ 25.10
TOTAL RETURN B, C (3.98)% 27.79% 2.00% 38.75%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 18,471 $ 21,792 $ 20,406 $ 23,428
(000 omitted)
Ratio of expenses to average .70% .77% A .82% 1.04%
net assets
Ratio of expenses to average .69% E .76% A, E .81% E 1.03% E
net assets after expense
reductions
Ratio of net investment (.06)% .18% A 1.16% 2.47%
income (loss) to average
net assets
Portfolio turnover 64% 61% A 151% 142%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
THREE MONTHS ENDED DECEMBER 31, YEARS ENDED SEPTEMBER 30,
1994 1994 1993
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 20.23 $ 22.72 $ 19.72
period
Income from Investment
Operations
Net investment income (loss) .13 D .54 D .45
Net realized and unrealized (.74) (.81) 4.46
gain (loss)
Total from investment (.61) (.27) 4.91
operations
Less Distributions
From net investment income (.50) (.51) (.70)
From net realized gain (.26) (1.71) (1.21)
Total distributions (.76) (2.22) (1.91)
Net asset value, end of period $ 18.86 $ 20.23 $ 22.72
TOTAL RETURN B, C (3.02)% (1.51)% 26.98%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 17,583 $ 18,850 $ 20,707
(000 omitted)
Ratio of expenses to average 1.14% A 1.15% .89% G
net assets
Ratio of expenses to average 1.11% A, E 1.14% E .89%
net assets after expense
reductions
Ratio of net investment 2.65% A 2.60% 2.74%
income (loss) to average
net assets
Portfolio turnover 228% A 159% 183%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 6 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE FORMER ONE TIME SALES CHARGE AND
FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS).
F THE AMOUNTS SHOWN REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK
TO TAX DIFFERENCES (SEE NOTE 1 OF NOTES TO FINANCIAL STATEMENTS).
G INCLUDES REIMBURSEMENT OF $.03 PER SHARE FOR ADJUSTMENTS TO PRIOR
PERIOD'S FEES.
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
YEAR ENDED NOVEMBER 30, ELEVEN MONTHS ENDED NOVEMBER YEARS ENDED DECEMBER 31,
30,
1998 1997 1996 1995 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 27.63 $ 22.57 $ 24.80 $ 22.35
period
Income from Investment
Operations
Net investment income (loss) (.05) D (.05) D .29 D .55
Net realized and unrealized (1.10) 5.98 .17 3.00
gain (loss)
Total from investment (1.15) 5.93 .46 3.55
operations
Less Distributions
From net investment income - - (.34) (.55)
From net realized gain (2.31) (.87) (2.35) (.55)
Total distributions (2.31) (.87) (2.69) (1.10)
Net asset value, end of period $ 24.17 $ 27.63 $ 22.57 $ 24.80
TOTAL RETURN B, C (4.12)% 27.16% 1.99% 15.96%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 4,808 $ 5,564 $ 41,832 $ 20,429
(000 omitted)
Ratio of expenses to average .85% 1.06% A .78% .97% A
net assets
Ratio of expenses to average .84% F 1.05% A, F .76% F .96% A, F
net assets after expense
reductions
Ratio of net investment (.20)% (.21)% A 1.21% 2.55% A
income (loss) to average net
assets
Portfolio turnover 64% 61% A 151% 142%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 6 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD JULY 3, 1995 (COMMENCEMENT OF SALE OF INSTITUTIONAL
CLASS SHARES) TO DECEMBER 31, 1995.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1998
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Strategic Opportunities Fund (the fund) is a fund of
Fidelity Advisor Series I (the trust) and is authorized to issue an
unlimited number of shares. The trust is registered under the
Investment Company Act of 1940, as amended (the 1940 Act), as an
open-end management investment company organized as a Massachusetts
business trust.
The fund offers Class A, Class T, Class B, Initial Class, and
Institutional Class shares, each of which has equal rights as to
assets and voting privileges. Each class has exclusive voting rights
with respect to matters that affect that class. Class B shares will
automatically convert to Class A shares after a holding period of
seven years from the initial date of purchase. Investment income,
realized and unrealized capital gains and losses, the common expenses
of the fund, and certain fund-level expense reductions, if any, are
allocated on a pro rata basis to each class based on the relative net
assets of each class to the total net assets of the fund. Each class
of shares differs in its respective distribution, transfer agent, and
certain other class-specific fees, expenses, and expense reductions.
The financial statements have been prepared in conformity with
generally accepted accounting principles which require management to
make certain estimates and assumptions at the date of the financial
statements. The following summarizes the significant accounting
policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Securities (including restricted
securities) for which exchange quotations are not readily available
(and in certain cases debt securities which trade on an exchange) are
valued primarily using dealer-supplied valuations or at their fair
value as determined in good faith under consistently applied
procedures under the general supervision of the Board of Trustees.
Short-term securities with remaining maturities of sixty days or less
for which quotations are not readily available are valued at amortized
cost or original cost plus accrued interest, both of which approximate
current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases
and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
FOREIGN CURRENCY TRANSLATION - CONTINUED
the U.S. dollar amount actually received, and gains and losses between
trade and settlement date on purchases and sales of securities. The
effects of changes in foreign currency exchange rates on investments
in securities are included with the net realized and unrealized gain
or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent that it distributes substantially all of
its taxable income for its fiscal year. The schedule of investments
includes information regarding income taxes under the caption "Income
Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend
date, except certain dividends from foreign securities where the
ex-dividend date may have passed, are recorded as soon as the fund is
informed of the ex-dividend date. Non-cash dividends included in
dividend income, if any, are recorded at the fair market value of the
securities received. Interest income is accrued as earned. Investment
income is recorded net of foreign taxes withheld where recovery of
such taxes is uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date. Income dividends and capital gain distributions are
declared separately for each class.
Income and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. These differences, which may result in
distribution reclassifications, are primarily due to differing
treatments for litigation proceeds, foreign currency transactions,
passive foreign investment companies (PFIC), non-taxable dividends,
net operating losses and losses deferred due to wash sales. The fund
also utilized earnings and profits distributed to shareholders on
redemption of shares as a part of the dividends paid deduction for
income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Accumulated undistributed net realized gain (loss) on investments and
foreign currency transactions may include temporary book and tax basis
differences that will reverse in a subsequent period. Any taxable
income or gain remaining at fiscal year end is distributed in the
following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the contracts'
terms. The U.S. dollar value of foreign currency contracts is
determined using contractual currency exchange rates established at
the time of each trade.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other
affiliated entities of Fidelity Management & Research Company (FMR),
may transfer uninvested cash balances into one or more joint trading
accounts. These balances are invested in one or more repurchase
agreements for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are
marked-to-market daily and maintained at a value at least equal to the
principal amount of the repurchase agreement (including accrued
interest). FMR, the fund's investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
RESTRICTED SECURITIES. The fund is permitted to invest in securities
that are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from
registration or to the public if the securities are registered.
Disposal of these securities may involve time-consuming negotiations
and expense, and prompt sale at an acceptable price may be difficult.
At the end of the period, the fund had no investments in restricted
securities (excluding 144A issues).
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $398,205,340 and $472,562,122, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly basic fee that is calculated on the basis of a group fee rate
plus a fixed individual fund fee rate applied to the average net
assets of the fund. The group fee rate is the weighted average of a
series of rates and is based on the monthly average net assets of all
the mutual funds advised by FMR. The rates ranged from .2500% to
.5200% for the period. The annual individual fund fee rate is .30%. In
the event that these rates were lower than the contractual rates in
effect during the period, FMR voluntarily implemented the above rates,
as they resulted in the same or a lower management fee. The basic fee
is subject to a performance adjustment (up to a maximum of
(plus/minus).20% of the fund's average net assets over the
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
performance period) based on the investment performance of the
asset-weighted average return of all classes as compared to the
appropriate index over a specified period of time. For the period, the
management fee was equivalent to an annual rate of .38% of average net
assets after the performance adjustment.
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the
1940 Act, the Trustees have adopted separate distribution plans with
respect to each class of shares, except for the Initial Class
(collectively referred to as "the Plans"). Under certain of the Plans,
the class pays Fidelity Distributors Corporation (FDC), an affiliate
of FMR, a distribution and service fee. A portion of this fee may be
reallowed to securities dealers, banks and other financial
institutions for the distribution of each class of shares and
providing shareholder support services. For the period, this fee was
based on the following annual rates of the average net assets of each
applicable class:
CLASS A .25%
CLASS T .50%
CLASS B 1.00%*
* .75% REPRESENTS A DISTRIBUTION FEE AND .25% REPRESENTS A SHAREHOLDER
SERVICE FEE.
For the period, each class paid FDC the following amounts, a portion
of which was retained by FDC:
PAID TO FDC RETAINED BY FDC
CLASS A $ 8,709 $ 293
CLASS T 2,460,259 36,762
CLASS B 1,095,801 822,641
$ 3,564,769 $ 859,696
Under the Plans, FMR may use its resources to pay administrative and
promotional expenses related to the sale of each class' shares. The
Plans also authorize payments to third parties that assist in the sale
of each class' shares or render shareholder support services. For the
period, the following amounts were paid to third parties under the
Plans:
CLASS A $ 2,539
CLASS T 124,790
CLASS B 66,981
INSTITUTIONAL CLASS 5,422
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
SALES LOAD. FDC receives a front-end sales charge of up to 5.75% for
selling Class A shares, and 3.50% for selling Class T shares of the
fund. The 3.50% front-end sales charge on the sale of shares of the
Initial Class was eliminated effective September 30, 1998. FDC
receives the proceeds of contingent deferred sales charges levied on
Class B share redemptions occurring within six years of purchase.
Contingent deferred sales charges are based on declining rates ranging
from 5% to 1% for Class B of the lesser of the cost of shares at the
initial date of purchase or the net asset value of the redeemed
shares, excluding any reinvested dividends and capital gains. In
addition, purchases of Class A and Class T shares that were subject to
a finder's fee bear a contingent deferred sales charge on assets that
do not remain in the fund for at least one year. The Class A and Class
T contingent deferred sales charge is based on 0.25% of the lesser of
the cost of shares at the initial date of purchase or the net asset
value of the redeemed shares, excluding any reinvested dividends and
capital gains. A portion of the sales charges paid to FDC are paid to
securities dealers, banks and other financial institutions.
For the period, sales charge amounts paid to and retained by FDC were
as follows:
PAID TO FDC RETAINED BY FDC
CLASS A $ 70,878 $ 17,322
CLASS T 243,044 72,427
CLASS B 232,999 232,999*
INITIAL CLASS 11 0
$ 546,932 $ 322,748
* WHEN CLASS B SHARES ARE INITIALLY SOLD, FDC PAYS COMMISSIONS FROM
ITS OWN RESOURCES TO SECURITIES DEALERS,
BANKS, AND OTHER FINANCIAL INSTITUTIONS THROUGH WHICH THE SALES ARE
MADE.
TRANSFER AGENT FEES. Fidelity Investments Institutional Operations
Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend
disbursing and shareholder servicing agent (collectively referred to
as the transfer agent) for the fund's Class A, Class T, Class B and
Institutional Class. Fidelity Service Company, Inc. (FSC), an
affiliate of FMR, is the transfer agent for the Initial Class. FIIOC
and FSC receive account fees and asset-based fees that vary according
to the account size and type of account of the
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
TRANSFER AGENT FEES - CONTINUED
shareholders of the respective classes of the fund. FIIOC and FSC pay
for typesetting, printing and mailing of all shareholder reports,
except proxy statements. For the period, the following amounts were
paid to FIIOC or FSC:
AMOUNT % OF AVERAGE NET ASSETS
CLASS A $ 12,836 .37
CLASS T 990,228 .20
CLASS B 267,239 .24
INITIAL CLASS 36,157 .18
INSTITUTIONAL CLASS 10,021 .21
$ 1,316,481
ACCOUNTING FEES. FSC maintains the fund's accounting records. The fee
is based on the level of average net assets for the month plus
out-of-pocket expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $189,248 for the
period.
5. BANK BORROWINGS.
The fund is permitted to have bank borrowings for temporary or
emergency purposes to fund shareholder redemptions. The fund has
established borrowing arrangements with certain banks. Under the most
restrictive arrangement, the fund must pledge to the bank securities
having a market value in excess of 220% of the total bank borrowings.
The interest rate on the borrowings is the bank's base rate, as
revised from time to time. The maximum loan and the average daily loan
balances during the period for which loans were outstanding amounted
to $3,434,000 and $2,447,000, respectively. The weighted average
interest rate was 5.98%.
6. EXPENSE REDUCTIONS.
FMR agreed to reimburse certain transfer agent, registration and other
class specific expenses for Class A. For the period, the reimbursement
reduced these expenses by $639.
FMR has also directed certain portfolio trades to brokers who paid a
portion of the fund's expenses. For the period, the fund's expenses
were reduced by $44,575 under this arrangement.
6. EXPENSE REDUCTIONS - CONTINUED
In addition, the fund has entered into an arrangement with its
custodian whereby credits realized as a result of uninvested cash
balances were used to reduce a portion of expenses. During the period,
the fund's custodian fees were reduced by $11,766 under the custodian
arrangement.
7. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
YEAR ENDED NOVEMBER 30, 1998 ELEVEN MONTHS ENDED NOVEMBER YEAR ENDED DECEMBER 31, 1996A
30, 1997
FROM NET INVESTMENT INCOME
Class A $ - $ - $ 9,050
Class T - - 4,356,302
Class B - - 291,486
Initial Class - - 263,298
Institutional Class - - 581,296
Total $ - $ - $ 5,501,432
FROM NET REALIZED GAIN
Class A $ 203,594 $ 23,625 $ 47,453
Class T 44,119,122 18,646,131 54,934,732
Class B 8,992,409 3,715,981 9,460,141
Initial Class 1,877,364 742,870 1,978,165
Institutional Class 363,086 178,091 3,692,877
Total $ 55,555,575 $ 23,306,698 $ 70,113,368
$ 55,555,575 $ 23,306,698 $ 75,614,800
</TABLE>
A DISTRIBUTIONS FOR CLASS A ARE FOR THE PERIOD SEPTEMBER 3, 1996
(COMMENCEMENT OF SALE OF SHARES) TO DECEMBER 31, 1996.
8. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SHARES DOLLARS
YEAR ENDED ELEVEN MONTHS YEAR ENDED YEAR ENDED ELEVEN MONTHS YEAR ENDED
NOVEMBER 30, ENDED DECEMBER 31, NOVEMBER 30, ENDED DECEMBER 31,
NOVEMBER 30, NOVEMBER 30,
1998 1997 1996A 1998 1997 1996A
CLASS A Shares sold 149,962 76,361 26,335 $ 3,743,916 $ 2,031,528 $ 633,035
Reinvestment of distributions 8,353 1,056 2,536 200,346 23,641 56,498
Shares redeemed (49,135) (21,820) (531) (1,208,504) (573,832) (12,990)
Net increase (decrease) 109,180 55,597 28,340 $ 2,735,758 $ 1,481,337 $ 676,543
CLASS T Shares sold 4,972,644 4,958,455 7,239,477 $ 126,364,372 $ 130,988,939 $ 173,637,131
Reinvestment of distributions 1,556,391 703,010 2,215,089 37,826,161 15,866,760 50,421,264
Shares redeemed (7,262,586) (11,331,592) (9,664,112) (182,732,848) (272,275,129) (231,598,779)
Net increase (decrease) (733,551) (5,670,127) (209,546) $ (18,542,315) $ (125,419,430) $ (7,540,384)
CLASS B Shares sold 933,371 688,069 1,826,263 $ 23,549,084 $ 17,176,282 $ 43,251,259
Reinvestment of distributions 346,309 155,073 422,830 8,275,545 3,443,078 9,473,517
Shares redeemed (1,032,851) (1,224,149) (1,407,472) (25,089,860) (28,636,853) (33,157,193)
Net increase (decrease) 246,829 (381,007) 841,621 $ 6,734,769 $ (8,017,493) $ 19,567,583
INITIAL CLASS Shares sold 2,933 11,023 7,958 $ 75,101 $ 294,010 $ 193,575
Reinvestment of distributions 68,311 29,056 86,899 1,679,237 663,041 1,996,834
Shares redeemed (93,899) (157,998) (137,073) (2,355,583) (3,820,330) (3,325,386)
Net increase (decrease) (22,655) (117,919) (42,216) $ (601,245) $ (2,863,279) $ (1,134,977)
INSTITUTIONAL CLASS Shares 220,720 875,537 1,132,115 $ 5,783,275 $ 23,872,028 $ 27,291,041
sold
Reinvestment of distributions 11,710 6,165 182,073 283,206 138,401 4,097,341
Shares redeemed (234,866) (2,533,710) (284,588) (6,283,063) (61,384,219) (6,785,910)
Net increase (decrease) (2,436) (1,652,008) 1,029,600 $ (216,582) $ (37,373,790) $ 24,602,472
</TABLE>
A SHARE TRANSACTIONS FOR CLASS A ARE FOR THE PERIOD SEPTEMBER 3, 1996
(COMMENCEMENT OF SALE OF SHARES) TO DECEMBER 31, 1996.
9. REGISTRATION FEES.
For the period, each class paid the following amounts to register its
shares for sale:
REGISTRATION FEES
CLASS A $ 7,239
CLASS T 42,699
CLASS B 14,360
INITIAL CLASS 13,418
INSTITUTIONAL CLASS 8,797
$ 86,513
10. TRANSACTIONS WITH AFFILIATED COMPANIES.
An affiliated company is a company in which the fund has ownership of
at least 5% of the voting securities. Transactions during the period
with companies which are or were affiliates are as follows:
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES
PURCHASE SALES DIVIDEND VALUE
AFFILIATE COST COST INCOME
AFC Cable Systems, Inc. $ 255,000 $ - $ - $ 23,525,953
Alliance Pharmaceutical Corp. 4,676,301 - - 10,772,888
Big Dog Holdings, Inc. 1,935,650 - - 3,161,250
Deckers Outdoor Corp. - 1,269,282 - -
Freds, Inc. Class A 132,500 539,500 123,725 8,541,211
Harveys Casino Resorts - - 165,920 22,191,800
Herley Industries, Inc. - - - -
I-Stat Corp. 1,372,488 - - 5,634,225
Just Toys, Inc. - 60,000 - -
Maxim Group, Inc. 853,105 - - 19,550,763
Maxwell Shoe Co., Inc. Class A 1,072,500 223,125 - 9,456,063
MicroProse, Inc. 104,650 6,425,590 - -
Morton's Restaurant Group, Inc. 260,875 - - 8,442,900
People's Choice TV Corp. - 690,000 - -
Performance Technologies, Inc. 3,376,351 130,313 - 8,946,175
Reno Air, Inc. - 1,838,749 - 5,640,750
Rock of Ages Corp. Class A - - - -
Silicon Gaming, Inc. 3,771,150 3,959,529 - 1,769,906
WMS Industries, Inc. 1,954,181 111,801 - 13,499,806
Whole Foods Market, Inc . - 5,665,957 - -
TOTALS $ 19,764,751 $ 20,913,846 $ 289,645 $ 141,133,690
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Advisor Series I and the Shareholders of
Fidelity Advisor Strategic Opportunities Fund:
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of
Fidelity Advisor Strategic Opportunities (a fund of Fidelity Advisor
Series I) at November 30, 1998, the results of its operations, the
changes in its net assets and the financial highlights for the periods
indicated, in conformity with generally accepted accounting
principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the
responsibility of the Fidelity Advisor Strategic Opportunities Fund's
management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of
these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which
included confirmation of securities at November 30, 1998 by
correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
January 13, 1999
DISTRIBUTIONS
The Board of Trustees of Fidelity Advisor Strategic Opportunities Fund
voted to pay to shareholders of record at the opening of business on
record date, the
following distributions derived from capital gains realized from sales
of portfolio securities, and dividends derived from net investment
income:
CLASS A
PAY DATE 12/22/97 1/5/98 12/21/98 1/11/99
RECORD DATE 12/19/97 1/2/98 12/18/98 1/8/99
SHORT-TERM
CAPITAL GAINS $1.09 $.03 - -
LONG-TERM
CAPITAL GAINS $1.15 $.12 $.50 $.68
LONG-TERM
CAPITAL GAIN PERCENTAGES:
28% rate 53.70% - - -
20% rate 46.30% 100% 100% 100%
CLASS T
PAY DATE 12/22/97 1/5/98 12/21/98 1/11/99
RECORD DATE 12/19/97 1/2/98 12/18/98 1/8/99
SHORT-TERM
CAPITAL GAINS $1.02 $.03 - -
LONG-TERM
CAPITAL GAINS $1.15 $.12 $.50 $.68
LONG-TERM
CAPITAL GAIN PERCENTAGES:
28% rate 53.70% - - -
20% rate 46.30% 100% 100% 100%
CLASS B
PAY DATE 12/22/97 1/5/98 12/21/98 1/11/99
RECORD DATE 12/19/97 1/2/98 12/18/98 1/8/99
SHORT-TERM
CAPITAL GAINS $.90 $.03 - -
LONG-TERM
CAPITAL GAINS $1.15 $.12 $.50 $.68
LONG-TERM
CAPITAL GAIN PERCENTAGES:
28% rate 53.70% - - -
20% rate 46.30% 100% 100% 100%
A total of 9%, 7%, and 8% of the dividends distributed by Class A,
Class T and Class B, respectively during the fiscal year qualifies for
the dividends-received deduction for corporate shareholders.
The fund will notify shareholders in January 1999 of the applicable
percentages for use in preparing 1998 income tax returns.
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.) Inc., London, England
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Abigail P. Johnson, Vice President
Harris Leviton, Vice President
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
* INDEPENDENT TRUSTEES
ADVISORY BOARD
J. Gary Burkhead
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Investments Institutional Operations Company, Inc.
Boston, MA
CUSTODIAN
Brown Brothers Harriman & Co.
Boston, MA
FOCUS FUNDS
Fidelity Advisor Consumer
Industries Fund
Fidelity Advisor Cyclical
Industries Fund
Fidelity Advisor Financial
Services Fund
Fidelity Advisor Health Care Fund
Fidelity Advisor Natural
Resources Fund
Fidelity Advisor Technology Fund
Fidelity Advisor Utilities Growth Fund
GROWTH FUNDS
Fidelity Advisor Latin America Fund
Fidelity Advisor Japan Fund
Fidelity Advisor Europe Capital Appreciation Fund
Fidelity Advisor International
Capital Appreciation Fund
Fidelity Advisor Overseas Fund
Fidelity Advisor Diversified
International Fund
Fidelity Advisor Global Equity Fund
Fidelity Advisor TechnoQuant
Growth Fund
SM
Fidelity Advisor Small Cap Fund
Fidelity Advisor Strategic
Opportunities Fund
Fidelity Advisor Mid Cap Fund
Fidelity Advisor Retirement
Growth Fund
Fidelity Advisor Equity Growth Fund
Fidelity Advisor Large Cap Fund
Fidelity Advisor Dividend Growth Fund
Fidelity Advisor Growth
Opportunities Fund
GROWTH AND INCOME FUNDS
Fidelity Advisor Growth & Income Fund
Fidelity Advisor Equity Income Fund
Fidelity Advisor Asset Allocation Fund
Fidelity Advisor Balanced Fund
TAXABLE INCOME FUNDS
Fidelity Advisor Emerging Markets Income Fund
Fidelity Advisor High Yield Fund
Fidelity Advisor Strategic Income Fund
Fidelity Advisor Mortgage
Securities Fund
Fidelity Advisor Government Investment Fund
Fidelity Advisor Intermediate Bond Fund
Fidelity Advisor Short Fixed-Income Fund
MUNICIPAL FUNDS
Fidelity Advisor Municipal Income Fund
Fidelity Advisor Intermediate Municipal Income Fund
MONEY MARKET FUNDS
Prime Fund
Treasury Fund
Tax-Exempt Funds
(registered trademark)
(2_FIDELITY_LOGOS)FIDELITY
(registered trademark)
STRATEGIC OPPORTUNITIES FUND
(INITIAL CLASS OF FIDELITY ADVISOR STRATEGIC
OPPORTUNITIES FUND)
ANNUAL REPORT
NOVEMBER 30, 1998
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on stock market
strategies.
PERFORMANCE 4 How the fund has done over
time.
FUND TALK 6 The manager's review of fund
performance, strategy and
outlook.
INVESTMENT CHANGES 9 A summary of major shifts in
the fund's investments over
the past six months.
INVESTMENTS 10 A complete list of the fund's
investments with their
market values.
FINANCIAL STATEMENTS 19 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 28 Notes to the financial
statements.
REPORT OF INDEPENDENT 37 The auditors' opinion.
ACCOUNTANTS
DISTRIBUTIONS 38
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Distributors Corporation.
Other third party marks appearing herein are the property of their
respective owners.
All other marks appearing herein are registered or unregistered
trademarks or service marks of FMR Corp. or an affiliated company.
This report is printed on recycled paper using soy-based inks.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION
OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS
IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT
INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND
EXPENSES, CALL 1-800-544-8888 FOR A
FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
The month of November proved to be a strong one for the stock and bond
markets. The Dow Jones Industrial Average reached a record high.
Merger activity, which had lulled during the summer correction, has
increased significantly. Small-cap stocks posted their third
consecutive month of positive returns, as did emerging markets. While
bond returns generally were not at the levels of their equity
counterparts, they were mostly positive nonetheless.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will
greatly reduce your vulnerability to any single decline. We know from
experience, for example, that stock prices have gone up over longer
periods of time, have significantly outperformed other types of
investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through
diversification. A stock mutual fund, for instance, is already
diversified, because it invests in many different companies. You can
increase your diversification further by investing in a number of
different stock funds, or in such other investment categories as
bonds. If you have a short investment time horizon, you might want to
consider moving some of your investment into a money market fund,
which seeks income and a stable share price by investing in
high-quality, short-term investments. Of course, it's important to
remember that there is no assurance that a money market fund will
achieve its goal of maintaining a stable net asset value of $1.00 per
share, and that these types of funds are neither insured nor
guaranteed by any agency of the U.S. government.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases. Of course, you should
consider your financial ability to continue your purchases through
periods of low price levels before undertaking such a strategy.
Remember to contact your investment professional if you need help with
your investments.
Best regards,
Edward C. Johnson 3d
FIDELITY STRATEGIC OPPORTUNITIES FUND
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can
look at the total percentage change in value, the average annual
percentage change or the growth of a hypothetical $10,000 investment.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). If Fidelity had not reimbursed certain class expenses, the
past 10 year total returns would have been lower. Total returns do not
include the effect of the 3.50% sales load which was eliminated as of
September 30, 1998.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
1998
FIDELITY STRATEGIC -3.98% 67.71% 244.69%
OPPORTUNITIES - INITIAL CL
S&P 500 (registered trademark) 23.66% 181.25% 457.74%
Capital Appreciation Funds 8.48% 100.86% 296.44%
Average
CUMULATIVE TOTAL RETURNS show Initial Class' performance in percentage
terms over a set period - in this case, one year, five years or 10
years. For example, if you had invested $1,000 in a fund that had a 5%
return over the past year, the value of your investment would be
$1,050. You can compare Initial Class' returns to those of the
Standard & Poor's 500 Index - a market capitalization-weighted index
of common stocks. To measure how Initial Class' performance stacked up
against its peers, you can compare it to the capital appreciation
funds average, which reflects the performance of mutual funds with
similar objectives tracked by Lipper Analytical Services, Inc. The
past one year average represents a peer group of 237 mutual funds.
These benchmarks reflect reinvestment of dividends and capital gains,
if any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
1998
FIDELITY STRATEGIC -3.98% 10.90% 13.17%
OPPORTUNITIES - INITIAL CL
S&P 500 23.66% 22.98% 18.75%
Capital Appreciation Funds 8.48% 13.91% 13.51%
Average
AVERAGE ANNUAL TOTAL RETURNS take Initial Class' cumulative return and
show you what would have happened if Initial Class had performed at a
constant rate each year. (Note: Lipper calculates average annual total
returns by annualizing each fund's total return, then taking an
arithmetic average. This may produce a different figure than that
obtained by averaging the cumulative total returns and annualizing the
result.)
$10,000 OVER 10 YEARS
FA Strategic Opp -Initial S&P 500
00014 SP001
1988/11/30 10000.00 10000.00
1988/12/31 10041.77 10175.00
1989/01/31 10644.67 10919.81
1989/02/28 10599.29 10647.91
1989/03/31 10819.70 10896.00
1989/04/30 11228.11 11461.51
1989/05/31 11740.25 11925.70
1989/06/30 11837.49 11857.72
1989/07/31 12647.83 12928.47
1989/08/31 12803.42 13181.87
1989/09/30 12816.39 13127.82
1989/10/31 12608.94 12823.26
1989/11/30 12959.01 13084.85
1989/12/31 13353.60 13398.89
1990/01/31 12487.09 12499.82
1990/02/28 12560.98 12661.07
1990/03/31 12574.41 12996.59
1990/04/30 12063.91 12671.68
1990/05/31 12460.22 13907.16
1990/06/30 12581.13 13812.60
1990/07/31 12628.15 13768.40
1990/08/31 11754.93 12523.73
1990/09/30 11667.60 11913.83
1990/10/31 11667.60 11862.60
1990/11/30 12184.82 12628.92
1990/12/31 12473.01 12981.27
1991/01/31 12888.31 13547.25
1991/02/28 13655.55 14515.88
1991/03/31 14091.97 14867.16
1991/04/30 14289.06 14902.84
1991/05/31 14802.90 15546.65
1991/06/30 14345.37 14834.61
1991/07/31 14781.79 15525.90
1991/08/31 15105.58 15893.87
1991/09/30 15168.93 15628.44
1991/10/31 14873.29 15837.86
1991/11/30 14521.34 15199.60
1991/12/31 15427.94 16938.43
1992/01/31 15461.14 16623.37
1992/02/29 15768.20 16839.48
1992/03/31 15378.15 16511.11
1992/04/30 15676.91 16996.54
1992/05/31 16191.45 17079.82
1992/06/30 16199.75 16825.33
1992/07/31 16697.69 17513.49
1992/08/31 16423.83 17154.46
1992/09/30 16365.73 17356.88
1992/10/31 16498.52 17417.63
1992/11/30 17203.94 18011.57
1992/12/31 17506.80 18233.11
1993/01/31 17836.09 18386.27
1993/02/28 18348.30 18636.33
1993/03/31 18933.69 19029.55
1993/04/30 18567.82 18569.04
1993/05/31 19016.01 19066.69
1993/06/30 19189.80 19121.98
1993/07/31 19610.55 19045.49
1993/08/31 20845.35 19767.32
1993/09/30 20781.33 19615.11
1993/10/31 21449.04 20021.14
1993/11/30 20552.66 19830.94
1993/12/31 21195.84 20070.89
1994/01/31 21398.19 20753.30
1994/02/28 20659.62 20190.89
1994/03/31 19880.59 19310.57
1994/04/30 20042.46 19557.74
1994/05/31 20103.17 19878.49
1994/06/30 20103.17 19391.47
1994/07/31 20609.03 20027.51
1994/08/31 20740.56 20848.63
1994/09/30 20467.39 20337.84
1994/10/31 20265.04 20795.44
1994/11/30 19647.89 20038.07
1994/12/31 19849.42 20335.24
1995/01/31 20712.44 20862.53
1995/02/28 21259.72 21675.54
1995/03/31 21459.68 22315.19
1995/04/30 21933.29 22972.37
1995/05/31 22522.67 23890.58
1995/06/30 23711.95 24445.56
1995/07/31 24532.87 25256.17
1995/08/31 25238.02 25319.56
1995/09/30 26122.09 26388.05
1995/10/31 26027.37 26293.84
1995/11/30 26743.04 27448.14
1995/12/31 27540.21 27976.80
1996/01/31 27573.13 28929.13
1996/02/29 27029.81 29197.30
1996/03/31 26137.37 29478.47
1996/04/30 26829.01 29912.98
1996/05/31 27632.21 30684.44
1996/06/30 27609.89 30801.34
1996/07/31 25724.61 29440.54
1996/08/31 26706.30 30061.44
1996/09/30 27632.21 31753.30
1996/10/31 27152.52 32629.06
1996/11/30 28123.05 35095.49
1996/12/31 28091.73 34400.24
1997/01/31 29171.23 36549.57
1997/02/28 28793.40 36836.12
1997/03/31 26959.59 35322.52
1997/04/30 27112.40 37431.28
1997/05/31 30652.68 39710.10
1997/06/30 31811.55 41489.11
1997/07/31 33276.05 44790.40
1997/08/31 33823.65 42281.24
1997/09/30 37605.88 44596.98
1997/10/31 35886.69 43107.44
1997/11/30 35899.42 45102.89
1997/12/31 35616.74 45877.30
1998/01/31 35911.61 46384.71
1998/02/28 39329.09 49729.97
1998/03/31 40477.59 52276.64
1998/04/30 39287.07 52802.54
1998/05/31 36934.05 51894.87
1998/06/30 37172.15 54002.84
1998/07/31 35953.62 53427.71
1998/08/31 28530.40 45703.13
1998/09/30 30519.26 48630.87
1998/10/31 31975.90 52586.51
1998/11/30 34468.98 55773.78
IMATRL PRASUN SHR__CHT 19981130 19981210 103518 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Strategic Opportunities Fund - Initial Class on
November 30, 1988. As the chart shows, by November 30, 1998, the value
of the investment would have grown to $34,469 - a 244.69% increase on
the initial investment. For comparison, look at how the Standard &
Poor's 500 Index did over the same period. With dividends and capital
gains, if any, reinvested, the same $10,000 investment would have
grown to $55,774 - a 457.74% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
long-term growth and
short-term volatility. In turn, the
share price and return of a
fund that invests in stocks will
vary. That means if you sell
your shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
When the final bell of the U.S. stock
market sounded on Monday,
November 23, 1998, the Dow
Jones Industrial Average stood at a
record high of 9374.27, serving
notice that the bleak economic
outlook from just a few short months
earlier would not keep positive
investor sentiment down. For the
12-month period ended November
30, 1998, the Dow - an index of
30 blue-chip stocks - returned
18.56%. What caused the
turnaround from the doldrums of
equity performance during the
summer and early fall? A variety of
factors: The economic problems in
Russia, Brazil and other emerging
markets began to dissipate; Asian
markets began to rebound; and,
perhaps most importantly, three
interest-rate cuts late in the period
by the Federal Reserve Board
helped stem the tide of a slowing
U.S. economy. All these factors
culminated in the Dow reaching its
record high late in November, a
peak that outpaced the previous
record set in July by nearly 40 points.
Small-cap stock performance was
still a far cry behind their large-cap
brethren. For the period, the Russell
2000 - a popular measure of
small-cap stock performance -
returned -6.62%, significantly
trailing the large-cap weighted
Standard & Poor's 500 Index's
return of 23.66%. Despite the late
rally in the equity market, this kind
of volatility has characterized the
entire year, and when it will level off
is impossible to predict.
An interview with Harris Leviton, Portfolio Manager of Fidelity
Advisor Strategic Opportunities Fund
Q. HOW DID THE FUND PERFORM, HARRIS?
A. For the 12 months that ended November 30, 1998, the fund's Initial
Class shares posted a total return of -3.98%. In comparison, the
Standard & Poor's 500 Index returned 23.66% while the capital
appreciation funds average tracked by Lipper Analytical Services
returned 8.48%, during the same period.
Q. WHY DID THE FUND'S PERFORMANCE TRAIL THE INDEX AND THE AVERAGE BY
SUCH A WIDE MARGIN?
A. The fund's primary investment objective is to seek out special
situations - such as undervalued investment opportunities or companies
with new products and improved growth prospects. I tend to find these
special situations in the smaller-cap stock arena, which significantly
underperformed large-cap stocks and the broader market indexes during
the period. Compared to the small-cap universe, however, the fund
fared relatively well. In fact, the fund outpaced the performance of
the Russell 2000 Index - a popular measure of stock performance of
smaller companies, which returned -6.62% during the 12-month period.
Q. IN LIGHT OF THIS NEGATIVE ENVIRONMENT FOR SMALL-CAP STOCKS, DID YOU
MAKE ANY CHANGES TO THE FUND'S ASSET ALLOCATION?
A. Not really. Interestingly, I don't believe the underperformance of
many small-cap stocks was based on any fundamental business outlook.
Specifically, select small-caps continued to deliver solid sales gains
and earnings growth. As a result, many small-cap stocks went from
being slightly undervalued to significantly cheaper than the broader
market. I used this opportunity to increase certain fund holdings and
I am quite comfortable with the fund's asset allocation. On a more
positive note, toward the end of the period, investors became less
concerned with problems in overseas markets and more focused on the
positive state of the U.S. economy. Small-cap stocks started to
rebound in response to improved investor sentiment.
Q. HEALTH CARE, CONSTRUCTION & REAL ESTATE AND DURABLES REMAINED
OVERWEIGHTED SECTORS RELATIVE TO THE S&P 500 INDEX. WHAT DID YOU LIKE
ABOUT THESE INDUSTRIES?
A. The health care weighting, like most of the fund, was focused on
small- and mid-cap stocks. Although they didn't do as well as the
larger-cap health care stocks, I think many small-cap health care
stocks are poised to benefit from a number of new products with the
potential to boost profits. I overweighted fund assets in housing
construction and consumer durables because I think these areas will
continue to benefit from a strong housing market. While concerns of a
potential recession hurt this sector at times during the period, many
builders and home furnishing companies experienced robust consumer
demand. And the stocks rebounded significantly during the period.
Q. WHAT STOCKS PERFORMED WELL FOR THE FUND?
A. Sepracor, a biotechnology and pharmaceutical company, performed
extremely well during the period. It was the fund's largest holding as
of November 30, and was a huge success as the company's strategy of
producing improved versions of existing drugs paid off handsomely.
During the period, the company signed significant deals with Eli Lilly
to produce an improved version of Prozac and Schering Plough to
produce an improved version of Claritin. American Bankers, a specialty
property-casualty insurance company, was a solid performer for the
fund as well. It produced strong results in its credit-based accident,
health and life insurance operations, and received a buy-out offer
during the period.
Q. WHAT STOCKS WERE DISAPPOINTMENTS?
A. Unfortunately, a majority of the fund's holdings declined in market
value during the period. Again, this was primarily a factor of the
fund's focus on small-cap value stocks, which were dramatically sold
off during the market's decline in September and October. The biggest
disappointment, however, was Cygnus, a biotechnology and drug delivery
manufacturer. The launch of its major new product was delayed and a
partnership with Becton Dickinson fell apart.
Q. WHAT'S YOUR OUTLOOK OVER THE NEXT SIX MONTHS, HARRIS?
A. We've had a tremendous bounce-back from the market's retreat in
October. Yet, with the exception of three interest-rate cuts by the
Federal Reserve Board, it doesn't seem much has changed in the global
financial environment. We've seen a lot of speculation in the market,
and this is usually a bad sign for short-term progress. However, the
economic consensus in the U.S. seems to be positive, which can help
support the markets, and the basic outlook for small-cap stocks
continues to be strong. Many small- and mid-cap stocks are
substantially cheaper than the market and, in many cases, they are
growing sales and earnings faster than larger-cap stocks. With certain
companies, the disparities between large- and small-cap stock
valuations are enormous. If the market starts to recognize these
opportunities, fund performance should rally.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
HARRIS LEVITON ON
SMALL-CAP VALUE INVESTING:
"As the fund's performance
indicates, it was a difficult period
for the fund's investment style.
Small-cap stocks and those that I
viewed as undervalued relative to
similar situations were out of
favor during the period. In some
cases, there did not seem to be any
fundamental investment reason for
the punishment that certain
small-cap companies experienced
during the market's downturn from
August through October. For
example, companies like Morton's
Restaurant Group saw its stock
price slashed from 20 to 13 in one
day in October even though the
company's business outlook was as
strong as ever and the stock
performed well in previous
recessions.
"While it's impossible to tell when
this trend will reverse, we've seen
huge amounts of money pour into
big stocks, creating a tremendous
valuation disparity between small-
and large-cap stocks. I believe this
trend has unleashed a lot of
opportunities because many solid
companies with bright outlooks
have been overlooked as the
market chose to focus on a small
number of extremely large
companies in the S&P 500 index.
"While it has been a painful period
to stick to my guns, at some point it
seems this trend should change and
reward the small companies that are
selling at 10 times earnings - a low
price-to-earnings ratio in today's
market - but with projected annual
earnings growth at 20%. There's a
number of them out there."
FUND FACTS
GOAL: seeks capital
appreciation by investing
primarily in securities of
companies believed by
Fidelity to involve a "special
situation"
START DATE: December 31,
1983
SIZE: as of November 30,
1998, more than $572 million
MANAGER: Harris Leviton,
since 1996; joined Fidelity in
1986
(checkmark)
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF NOVEMBER
30, 1998
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE STOCKS 6 MONTHS AGO
Sepracor, Inc. 8.8 7.1
Cable Design Technology Corp. 4.3 3.0
AFC Cable Systems, Inc. 4.1 4.0
Whole Foods Market, Inc. 4.0 7.7
Harveys Casino Resorts 3.9 3.4
Foodmaker, Inc. 3.8 1.6
Maxim Group, Inc. 3.4 2.2
USG Corp. 3.0 2.8
WMS Industries, Inc. 2.4 1.1
Midway Games, Inc. 2.3 1.9
TOP FIVE MARKET SECTORS AS OF
NOVEMBER 30, 1998
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE MARKET SECTORS 6
MONTHS AGO
HEALTH 15.9 15.4
MEDIA & LEISURE 13.3 12.8
DURABLES 13.0 11.6
BASIC INDUSTRIES 11.6 12.8
TECHNOLOGY 9.1 9.7
</TABLE>
ASSET ALLOCATION (% OF FUND'S
INVESTMENTS)
AS OF NOVEMBER 30, 1998 * AS OF MAY 31, 1998 **
Row: 1, Col: 1, Value: 95.8
Row: 1, Col: 2, Value: 1.3
Row: 1, Col: 3, Value: 2.5
Stocks 98.0%
Bonds 0.8%
Short-term
investments 1.2%
FOREIGN
INVESTMENTS 5.0%
Stocks 96.8%
Bonds 0.7%
Short-term
investments 2.5%
FOREIGN
INVESTMENTS 1.4%
Row: 1, Col: 1, Value: 97.0
Row: 1, Col: 2, Value: 1.3
Row: 1, Col: 3, Value: 2.0
*
**
INVESTMENTS NOVEMBER 30, 1998
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 95.7%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 0.4%
DEFENSE ELECTRONICS - 0.4%
Herley Industries, Inc. (a) 208,666 $ 2,269,243
BASIC INDUSTRIES - 11.6%
CHEMICALS & PLASTICS - 1.2%
Associated Materials, Inc. 5,000 55,000
Hanna (M.A.) Co. 43,300 608,906
IMC Global, Inc. 163,600 3,742,350
Ivex Packaging Corp. (a) 122,500 2,388,750
6,795,006
IRON & STEEL - 0.2%
Cold Metal Products, Inc. (a) 128,600 361,688
Steel Dynamics, Inc. (a) 49,900 679,888
1,041,576
METALS & MINING - 9.4%
AFC Cable Systems, Inc. (a)(b) 794,125 23,525,953
Belden, Inc. 216,500 3,653,438
Brush Wellman, Inc. 137,500 2,217,188
Cable Design Technology Corp. 1,324,850 24,426,922
(a)
53,823,501
PACKAGING & CONTAINERS - 0.0%
Silgan Holdings, Inc. (a) 2,400 66,000
PAPER & FOREST PRODUCTS - 0.8%
ABT Building Products Corp. 147,000 1,470,000
(a)
Chesapeake Corp. 21,300 738,844
Mercer International, Inc. 407,900 2,434,653
4,643,497
TOTAL BASIC INDUSTRIES 66,369,580
CONSTRUCTION & REAL ESTATE -
7.9%
BUILDING MATERIALS - 4.6%
American Standard Companies, 140,000 4,795,000
Inc. (a)
Rock of Ages Corp. Class A (a) 172,800 2,073,600
USG Corp. 347,700 17,189,419
York International Corp. 60,000 2,520,000
26,578,019
CONSTRUCTION - 3.1%
American Buildings Co. (a) 20,200 492,375
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
CONSTRUCTION & REAL ESTATE -
CONTINUED
CONSTRUCTION - CONTINUED
Beazer Homes USA, Inc. (a) 173,500 $ 4,142,313
Butler Manufacturing Co. 47,000 1,092,750
Engle Homes, Inc. 202,200 2,780,250
Lennar Corp. 97,400 2,167,150
M/I Schottenstein Homes, Inc. 215,500 4,700,594
NCI Building Systems, Inc. (a) 58,400 1,430,800
U.S. Home Corp. (a) 20,100 640,688
17,446,920
REAL ESTATE INVESTMENT TRUSTS
- - 0.2%
Brandywine Realty Trust 60,000 1,080,000
TOTAL CONSTRUCTION & REAL 45,104,939
ESTATE
DURABLES - 13.0%
AUTOS, TIRES, & ACCESSORIES -
0.8%
Cummins Engine Co., Inc. 53,900 2,001,038
Navistar International Corp. 110,000 2,846,250
(a)
4,847,288
CONSUMER DURABLES - 0.7%
Mikasa, Inc. 51,800 563,325
Simpson Manufacturing Co. 89,800 3,367,500
Ltd. (a)
3,930,825
CONSUMER ELECTRONICS - 1.7%
Fossil, Inc. (a) 266,800 7,387,025
Movado Group, Inc. 102,500 2,075,625
9,462,650
HOME FURNISHINGS - 5.6%
Bassett Furniture Industries, 186,800 4,716,700
Inc.
Furniture Brands 10,000 254,375
International, Inc. (a)
Haverty Furniture Companies, 18,100 352,950
Inc.
Heilig-Meyers Co. 135,600 949,200
Ladd Furniture, Inc. (a) 372,400 6,517,000
Maxim Group, Inc. (a)(b) 999,400 19,550,763
32,340,988
TEXTILES & APPAREL - 4.2%
Deckers Outdoor Corp. (a) 361,900 769,038
Galey & Lord, Inc. (a) 115,800 1,252,088
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
DURABLES - CONTINUED
TEXTILES & APPAREL - CONTINUED
Maxwell Shoe, Inc. Class A 796,300 $ 9,456,063
(a)(b)
Mohawk Industries, Inc. (a) 150,000 5,596,875
Quaker Fabric Corp. (a) 95,000 665,000
Shaw Industries, Inc. 300,000 6,075,000
Synthetic Industries, Inc. (a) 15,000 247,500
24,061,564
TOTAL DURABLES 74,643,315
ENERGY - 2.4%
ENERGY SERVICES - 2.3%
Baker Hughes, Inc. 200,000 3,662,500
BJ Services Co. (a) 356,800 4,928,300
Santa Fe International Corp. 300,000 3,731,250
Smith International, Inc. 40,900 986,713
13,308,763
OIL & GAS - 0.1%
Conoco, Inc. Class A (a) 30,000 710,625
TOTAL ENERGY 14,019,388
FINANCE - 1.1%
CREDIT & OTHER FINANCE - 0.1%
Regent Pacific Group Ltd. 5,000,000 536,003
INSURANCE - 1.0%
American Bankers Insurance 129,800 5,889,675
Group, Inc.
TOTAL FINANCE 6,425,678
HEALTH - 15.9%
DRUGS & PHARMACEUTICALS - 12.9%
Alliance Pharmaceutical Corp. 2,780,100 10,772,888
(a)(b)
Aviron (a) 301,600 6,484,400
Cytyc Corp. (a) 265,300 5,256,256
Natrol, Inc. (a) 80,000 810,000
Sepracor, Inc. (a) 608,700 50,522,090
73,845,634
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
HEALTH - CONTINUED
MEDICAL EQUIPMENT & SUPPLIES
- - 3.0%
Cygnus, Inc. (a) 856,950 $ 4,124,072
I-Stat Corp. (a)(b) 834,700 5,634,225
Oakley, Inc. (a) 445,700 4,345,575
Resound Corp. (a) 567,000 2,976,750
17,080,622
TOTAL HEALTH 90,926,256
INDUSTRIAL MACHINERY &
EQUIPMENT - 3.1%
Case Corp. 173,500 4,207,375
Columbus McKinnon Corp. 221,900 4,035,806
Compx International, Inc. (a) 133,600 3,348,350
Gradall Industries, Inc. (a) 200,000 2,687,500
Hardinge, Inc. 17,500 333,594
T B Wood's Corp. 246,700 3,392,125
18,004,750
MEDIA & LEISURE - 13.1%
BROADCASTING - 0.1%
Nielsen Media Research, Inc. 49,500 742,500
(a)
ENTERTAINMENT - 3.9%
Film Roman, Inc. (a) 55,000 39,531
Harveys Casino Resorts (b) 829,600 22,191,800
22,231,331
LEISURE DURABLES & TOYS - 0.7%
Marvel Enterprises, Inc. (a) 359,300 2,200,713
Silicon Gaming, Inc. (a)(b) 913,500 1,769,906
3,970,619
LODGING & GAMING - 2.4%
WMS Industries, Inc. (b) 1,815,100 13,499,806
PUBLISHING - 0.6%
Reader's Digest Association, 152,800 3,676,750
Inc. Class A (non-vtg.)
RESTAURANTS - 5.4%
Foodmaker, Inc. (a) 1,117,700 21,655,438
Il Fornaio America Corp. (a) 77,700 592,463
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
MEDIA & LEISURE - CONTINUED
RESTAURANTS - CONTINUED
Morton's Restaurant Group, 424,800 $ 8,442,900
Inc. (a)(b)
NPC International, Inc. (a) 12,600 143,325
30,834,126
TOTAL MEDIA & LEISURE 74,955,132
NONDURABLES - 6.8%
AGRICULTURE - 0.8%
Saskatchewan Wheat Pool:
Class B (non-vtg.) 478,300 3,322,719
Class B (non-vtg.) (c) 158,000 1,097,616
4,420,335
FOODS - 2.4%
Corn Products International, 453,300 12,720,731
Inc.
Tomkins PLC 3,457 16,009
Vlasic Foods International, 62,200 1,345,075
Inc. (a)
14,081,815
HOUSEHOLD PRODUCTS - 2.1%
Church & Dwight Co., Inc. 348,500 12,045,031
TOBACCO - 1.5%
Philip Morris Companies, Inc. 150,000 8,390,625
TOTAL NONDURABLES 38,937,806
RETAIL & WHOLESALE - 8.7%
APPAREL STORES - 1.1%
Big Dog Holdings, Inc. (a)(b) 1,011,600 3,161,250
Stage Stores, Inc. (a) 290,000 3,335,000
6,496,250
GENERAL MERCHANDISE STORES -
3.1%
Consolidated Stores Corp. (a) 270,000 5,805,000
Freds, Inc. Class A (b) 607,375 8,541,211
Stein Mart, Inc. (a) 362,300 3,113,516
17,459,727
GROCERY STORES - 4.0%
Whole Foods Market, Inc. (a) 488,600 22,719,900
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
RETAIL & WHOLESALE - CONTINUED
RETAIL & WHOLESALE,
MISCELLANEOUS - 0.5%
Brylane, Inc. (a) 80,000 $ 1,270,000
Cameron Ashley Building 90,000 1,147,500
Products, Inc. (a)
Electronics Boutique Holding 35,000 658,438
Corp. (a)
3,075,938
TOTAL RETAIL & WHOLESALE 49,751,815
SERVICES - 0.7%
PRINTING - 0.5%
Schawk, Inc. Class A 194,000 2,788,750
SERVICES - 0.2%
Compass International 17,000 163,625
Services Corp.
Manpower, Inc. 60,000 1,335,000
1,498,625
TOTAL SERVICES 4,287,375
TECHNOLOGY - 8.7%
COMMUNICATIONS EQUIPMENT - 0.4%
Premisys Communications, Inc. 162,000 2,409,750
(a)
COMPUTER SERVICES & SOFTWARE
- - 3.8%
Activision, Inc. (a) 125,000 1,671,875
CompUSA, Inc. (a) 7,200 106,650
Cotelligent, Inc. (a) 10,000 183,125
Eidos PLC sponsored ADR (a) 21,500 309,063
Electronic Arts, Inc. (a) 30,000 1,263,750
GT Interactive Software Corp. 513,200 3,079,200
(a)
Interplay Entertainment Corp. 590,000 1,198,438
(a)
JDA Software Group, Inc. (a) 66,800 534,400
Midway Games, Inc. (a) 1,275,359 12,992,720
Project Software & 2,500 75,313
Development, Inc. (a)
Titan Corp. (a) 74,000 397,750
21,812,284
COMPUTERS & OFFICE EQUIPMENT
- - 1.6%
Performance Technologies, 730,300 8,946,175
Inc. (a)(b)
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TECHNOLOGY - CONTINUED
ELECTRONIC INSTRUMENTS - 0.7%
Optical Coating Laboratories, 6,000 $ 112,500
Inc.
Varian Associates, Inc. 100,100 3,960,206
4,072,706
ELECTRONICS - 2.2%
AVX Corp. 550,500 10,700,344
Richardson Electronics Ltd. 238,000 2,023,000
12,723,344
TOTAL TECHNOLOGY 49,964,259
TRANSPORTATION - 2.1%
AIR TRANSPORTATION - 1.0%
Reno Air, Inc. (a)(b) 784,800 5,640,750
RAILROADS - 0.5%
Burlington Northern Santa Fe 39,700 1,349,800
Corp.
Genesee & Wyoming, Inc. Class 118,000 1,755,250
A (a)
3,105,050
TRUCKING & FREIGHT - 0.6%
Airborne Freight Corp. 90,000 2,401,875
SPACEHAB, Inc. (a) 90,000 776,250
3,178,125
TOTAL TRANSPORTATION 11,923,925
UTILITIES - 0.2%
CELLULAR - 0.2%
Nextel Communications, Inc. 50,000 1,075,000
Class A (a)
TOTAL COMMON STOCKS 548,658,461
(Cost $512,197,097)
CONVERTIBLE PREFERRED STOCKS
- - 1.1%
FINANCE - 0.1%
CLOSED END INVESTMENT COMPANY
- - 0.1%
Readers Digest Automatic 30,000 725,625
Common Exchange Trust $1.93
TRACES
CONVERTIBLE PREFERRED STOCKS
- - CONTINUED
SHARES VALUE (NOTE 1)
MEDIA & LEISURE - 0.2%
BROADCASTING - 0.2%
Triathlon Broadcasting Co. 104,080 $ 1,027,790
$0.945 depository shares DECS
TRANSPORTATION - 0.8%
AIR TRANSPORTATION - 0.8%
Reno Air, Inc. Series A, 170,000 4,632,500
$7.281 (c)
TOTAL CONVERTIBLE PREFERRED 6,385,915
STOCKS
(Cost $6,071,985)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CONVERTIBLE BONDS - 0.7%
MOODY'S RATINGS (UNAUDITED) PRINCIPAL AMOUNT
TECHNOLOGY - 0.4%
ELECTRONICS - 0.4%
Richardson Electronics Ltd.:
7.25% 12/15/06 B3 $ 404,000 323,200
8.25% 6/15/06 B3 1,978,000 1,740,640
2,063,840
TRANSPORTATION - 0.3%
TRUCKING & FREIGHT - 0.3%
SPACEHAB, Inc. 8% 10/15/07 (c) - 2,500,000 2,025,000
TOTAL CONVERTIBLE BONDS 4,088,840
(Cost $4,560,430)
</TABLE>
CASH EQUIVALENTS - 2.5%
MATURITY AMOUNT
Investments in repurchase $ 14,122,059 14,120,000
agreements (U.S. Treasury
obligations), in a joint
trading account at 5.25%,
dated 11/30/98 due 12/1/98
TOTAL INVESTMENT IN $ 573,253,216
SECURITIES - 100%
(Cost $536,949,512)
SECURITY TYPE ABBREVIATIONS
DECS - Dividend Enhanced Convertible
Stock/Debt Exchangeable for Common Stock
TRACES - Trust Automatic Common Exchange Securities
LEGEND
(a) Non-income producing
(b) Affiliated company (see Note 10 of Notes to Financial Statements).
(c) Security exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in
transactions exempt from registration, normally to qualified
institutional buyers. At the period end, the value of these securities
amounted to $7,755,116 or 1.4% of net assets.
INCOME TAX INFORMATION
At November 30, 1998, the aggregate cost of investment securities for
income tax purposes was $536,978,516. Net unrealized appreciation
aggregated $36,274,700, of which $135,390,300 related to appreciated
investment securities and $99,115,600 related to depreciated
investment securities.
The fund hereby designates approximately $41,876,000 as a capital gain
dividend for the purpose of the dividend paid deduction.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1998
ASSETS
Investment in securities, at $ 573,253,216
value (including repurchase
agreements of $14,120,000)
(cost $536,949,512) - See
accompanying schedule
Cash 795
Receivable for investments 5,439,887
sold
Receivable for fund shares 566,889
sold
Dividends receivable 261,665
Interest receivable 113,218
Other receivables 126,862
TOTAL ASSETS 579,762,532
LIABILITIES
Payable for investments $ 4,469,194
purchased
Payable for fund shares 1,981,356
redeemed
Accrued management fee 165,741
Distribution fees payable 267,534
Other payables and accrued 174,173
expenses
TOTAL LIABILITIES 7,057,998
NET ASSETS $ 572,704,534
Net Assets consist of:
Paid in capital $ 497,745,143
Accumulated undistributed net 38,653,611
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 36,305,780
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS $ 572,704,534
STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
NOVEMBER 30, 1998
CALCULATION OF MAXIMUM $23.89
OFFERING PRICE CLASS A: NET
ASSET VALUE and redemption
price per share
($4,612,687 (divided by)
193,117 shares)
Maximum offering price per $25.35
share (100/94.25 of $23.89)
CLASS T: NET ASSET VALUE and $24.23
redemption price per share
($443,578,413 (divided by)
18,307,645 shares)
Maximum offering price per $25.11
share (100/96.50 of $24.23)
CLASS B: NET ASSET VALUE and $23.69
offering price per share
($101,233,548 (divided by)
4,272,898 shares) A
INITIAL CLASS: NET ASSET $24.61
VALUE, offering price and
redemption price per share
($18,471,412 (divided by)
750,438 shares)
INSTITUTIONAL CLASS: NET $24.17
ASSET VALUE, offering price
and redemption price per
share ($4,808,474 (divided
by) 198,908 shares)
A REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1998
INVESTMENT INCOME $ 2,960,946
Dividends (including $289,645
received from affiliated
issuers)
Interest 988,931
TOTAL INCOME 3,949,877
EXPENSES
Management fee Basic fee $ 3,718,524
Performance adjustment (1,343,174)
Transfer agent fees 1,316,481
Distribution fees 3,564,769
Accounting fees and expenses 341,818
Non-interested trustees' 1,792
compensation
Custodian fees and expenses 35,154
Registration fees 86,513
Audit 36,021
Legal 6,876
Interest 1,220
Miscellaneous 54,237
Total expenses before 7,820,231
reductions
Expense reductions (56,980) 7,763,251
NET INVESTMENT INCOME (LOSS) (3,813,374)
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 39,751,777
(including realized gain of
$324,211 on sales of
investments in affiliated
issuers)
Foreign currency transactions 107,822 39,859,599
Change in net unrealized
appreciation (depreciation)
on:
Investment securities (66,258,377)
Assets and liabilities in 8,545 (66,249,832)
foreign currencies
NET GAIN (LOSS) (26,390,233)
NET INCREASE (DECREASE) IN $ (30,203,607)
NET ASSETS RESULTING FROM
OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
YEAR ENDED NOVEMBER 30, 1998 ELEVEN MONTHS ENDED NOVEMBER YEAR ENDED DECEMBER 31, 1996
30, 1997
INCREASE (DECREASE) IN NET
ASSETS
Operations Net investment $ (3,813,374) $ (2,081,517) $ 5,065,025
income (loss)
Net realized gain (loss) 39,859,599 73,741,589 101,103,020
Change in net unrealized (66,249,832) 70,136,543 (96,084,415)
appreciation (depreciation)
NET INCREASE (DECREASE) IN (30,203,607) 141,796,615 10,083,630
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders
From net investment income - - (5,501,432)
From net realized gain (55,555,575) (23,306,698) (70,113,368)
TOTAL DISTRIBUTIONS (55,555,575) (23,306,698) (75,614,800)
Share transactions - net (9,889,615) (172,192,655) 36,171,237
increase (decrease)
TOTAL INCREASE (DECREASE) (95,648,797) (53,702,738) (29,359,933)
IN NET ASSETS
NET ASSETS
Beginning of period 668,353,331 722,056,069 751,416,002
End of period (including $ 572,704,534 $ 668,353,331 $ 722,056,069
undistributed net
investment income of $0, $0
and $1,667,423,
respectively)
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C> <C>
YEAR ENDED NOVEMBER 30, ELEVEN MONTHS ENDED NOVEMBER YEAR ENDED DECEMBER 31,
30,
1998 1997 1996 F
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 27.51 $ 22.51 $ 23.48
period
Income from Investment
Operations
Net investment income (loss) (.14) (.13) .08
E
Net realized and unrealized (1.09) 6.00 1.26
gain (loss)
Total from investment (1.23) 5.87 1.34
operations
Less Distributions
From net investment income - - (.37)
From net realized gain (2.39) (.87) (1.94)
Total distributions (2.39) (.87) (2.31)
Net asset value, end of period $ 23.89 $ 27.51 $ 22.51
TOTAL RETURN B, C (4.45)% 26.96% 5.80%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 4,613 $ 2,309 $ 638
(000 omitted)
Ratio of expenses to average 1.24% G 1.49% A, G .99% A, D
net assets
Ratio of expenses to average 1.23% H 1.47% A, H .97% A, H
net assets after expense
reductions
Ratio of net investment (.59)% (.59)% A 1.00% A
income (loss) to average net
assets
Portfolio turnover 64% 61% A 151%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 6 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D LIMITED IN ACCORDANCE WITH A STATE EXPENSE LIMITATION.
E NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
F FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A
SHARES) TO DECEMBER 31, 1996.
G FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER (SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS).
H FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS).
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
YEAR ENDED NOVEMBER 30, ELEVEN MONTHS ENDED NOVEMBER YEARS ENDED DECEMBER 31,
30,
1998 1997 1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 27.78 $ 22.69 $ 24.88 $ 18.70
period
Income from Investment
Operations
Net investment income (loss) (.13) D (.07) D .17 D .39
Net realized and unrealized (1.10) 6.03 .18 6.73
gain (loss)
Total from investment (1.23) 5.96 .35 7.12
operations
Less Distributions
From net investment income - - (.19) (.39)
From net realized gain (2.32) (.87) (2.35) (.55)
Total distributions (2.32) (.87) (2.54) (.94)
Net asset value, end of period $ 24.23 $ 27.78 $ 22.69 $ 24.88
TOTAL RETURN B, C (4.40)% 27.15% 1.53% 38.16%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 443,578 $ 529,043 $ 560,645 $ 619,993
(000 omitted)
Ratio of expenses to average 1.16% 1.24% A 1.28% 1.61%
net assets
Ratio of expenses to average 1.15% F 1.23% A, F 1.27% F 1.61%
net assets after expense
reductions
Ratio of net investment (.53)% (.29)% A .70% 1.90%
income (loss) to average
net assets
Portfolio turnover 64% 61% A 151% 142%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
THREE MONTHS ENDED DECEMBER 31, YEARS ENDED SEPTEMBER 30,
1994 1994 1993
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 19.96 $ 22.52 $ 19.53
period
Income from Investment
Operations
Net investment income (loss) .10 D .39 D .33
Net realized and unrealized (.75) (.81) 4.44
gain (loss)
Total from investment (.65) (.42) 4.77
operations
Less Distributions
From net investment income (.35) (.43) (.57)
From net realized gain (.26) (1.71) (1.21)
Total distributions (.61) (2.14) (1.78)
Net asset value, end of period $ 18.70 $ 19.96 $ 22.52
TOTAL RETURN B, C (3.26)% (2.24)% 26.33%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 375,691 $ 385,349 $ 269,833
(000 omitted)
Ratio of expenses to average 1.73% A, E 1.85% 1.57% G
net assets
Ratio of expenses to average 1.73% A 1.84% F 1.57%
net assets after expense
reductions
Ratio of net investment 2.03% A 1.89% 2.06%
income (loss) to average
net assets
Portfolio turnover 228% A 159% 183%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 6 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS).
G INCLUDES REIMBURSEMENT OF $.03 PER SHARE FOR ADJUSTMENTS TO PRIOR
PERIOD'S FEES.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
YEAR ENDED NOVEMBER 30, ELEVEN MONTHS ENDED NOVEMBER YEARS ENDED DECEMBER 31,
30,
1998 1997 1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 27.23 $ 22.36 $ 24.56 $ 18.57
period
Income from Investment
Operations
Net investment income (loss) (.27) D (.18) D .04 D .38
Net realized and unrealized (1.07) 5.92 .18 6.54
gain (loss)
Total from investment (1.34) 5.74 .22 6.92
operations
Less Distributions
From net investment income - - (.07) (.38)
From net realized gain (2.20) (.87) (2.35) (.55)
Total distributions (2.20) (.87) (2.42) (.93)
Net asset value, end of period $ 23.69 $ 27.23 $ 22.36 $ 24.56
TOTAL RETURN B, C (4.94)% 26.55% 1.00% 37.35%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 101,234 $ 109,646 $ 98,535 $ 87,566
(000 omitted)
Ratio of expenses to average 1.71% 1.78% A 1.80% 2.11%
net assets
Ratio of expenses to average 1.70% F 1.77% A, F 1.79% F 2.10% F
net assets after expense
reductions
Ratio of net investment (1.07)% (.84)% A .18% 1.40%
income (loss) to average net
assets
Portfolio turnover 64% 61% A 151% 142%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
THREE MONTHS ENDED DECEMBER 31, YEAR ENDED SEPTEMBER 30,
1994 1994 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 19.98 $ 19.65
period
Income from Investment
Operations
Net investment income (loss) .06 D .05 D
Net realized and unrealized (.74) .28
gain (loss)
Total from investment (.68) .33
operations
Less Distributions
From net investment income (.47) -
From net realized gain (.26) -
Total distributions (.73) -
Net asset value, end of period $ 18.57 $ 19.98
TOTAL RETURN B, C (3.41)% 1.68%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 17,090 $ 8,824
(000 omitted)
Ratio of expenses to average 2.58% A 2.63% A, G
net assets
Ratio of expenses to average 2.53% A, F 2.63% A
net assets after expense
reductions
Ratio of net investment 1.22% A 1.11% A
income (loss) to average net
assets
Portfolio turnover 228% A 159%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 6 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME CONTINGENT DEFERRED SALES
CHARGE AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD JUNE 30, 1994 (COMMENCEMENT OF SALE OF CLASS B
SHARES) TO SEPTEMBER 30, 1994.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS).
G FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
YEAR ENDED NOVEMBER 30, ELEVEN MONTHS ENDED NOVEMBER YEARS ENDED DECEMBER 31,
30,
1998 1997 1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 28.19 $ 22.90 $ 25.10 $ 18.86
period
Income from Investment
Operations
Net investment income (loss) (.02) D .04 D .28 D .50
Net realized and unrealized (1.12) 6.12 .19 6.79
gain (loss)
Total from investment (1.14) 6.16 .47 7.29
operations
Less Distributions
From net investment income - F - (.32) (.50)
From net realized gain (2.44) F (.87) (2.35) (.55)
Total distributions (2.44) (.87) (2.67) (1.05)
Net asset value, end of period $ 24.61 $ 28.19 $ 22.90 $ 25.10
TOTAL RETURN B, C (3.98)% 27.79% 2.00% 38.75%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 18,471 $ 21,792 $ 20,406 $ 23,428
(000 omitted)
Ratio of expenses to average .70% .77% A .82% 1.04%
net assets
Ratio of expenses to average .69% E .76% A, E .81% E 1.03% E
net assets after expense
reductions
Ratio of net investment (.06)% .18% A 1.16% 2.47%
income (loss) to average
net assets
Portfolio turnover 64% 61% A 151% 142%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
THREE MONTHS ENDED DECEMBER 31, YEARS ENDED SEPTEMBER 30,
1994 1994 1993
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 20.23 $ 22.72 $ 19.72
period
Income from Investment
Operations
Net investment income (loss) .13 D .54 D .45
Net realized and unrealized (.74) (.81) 4.46
gain (loss)
Total from investment (.61) (.27) 4.91
operations
Less Distributions
From net investment income (.50) (.51) (.70)
From net realized gain (.26) (1.71) (1.21)
Total distributions (.76) (2.22) (1.91)
Net asset value, end of period $ 18.86 $ 20.23 $ 22.72
TOTAL RETURN B, C (3.02)% (1.51)% 26.98%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 17,583 $ 18,850 $ 20,707
(000 omitted)
Ratio of expenses to average 1.14% A 1.15% .89% G
net assets
Ratio of expenses to average 1.11% A, E 1.14% E .89%
net assets after expense
reductions
Ratio of net investment 2.65% A 2.60% 2.74%
income (loss) to average
net assets
Portfolio turnover 228% A 159% 183%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 6 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE FORMER ONE TIME SALES CHARGE AND
FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS).
F THE AMOUNTS SHOWN REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK
TO TAX DIFFERENCES (SEE NOTE 1 OF NOTES TO FINANCIAL STATEMENTS).
G INCLUDES REIMBURSEMENT OF $.03 PER SHARE FOR ADJUSTMENTS TO PRIOR
PERIOD'S FEES.
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
YEAR ENDED NOVEMBER 30, ELEVEN MONTHS ENDED NOVEMBER YEARS ENDED DECEMBER 31,
30,
1998 1997 1996 1995 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 27.63 $ 22.57 $ 24.80 $ 22.35
period
Income from Investment
Operations
Net investment income (loss) (.05) D (.05) D .29 D .55
Net realized and unrealized (1.10) 5.98 .17 3.00
gain (loss)
Total from investment (1.15) 5.93 .46 3.55
operations
Less Distributions
From net investment income - - (.34) (.55)
From net realized gain (2.31) (.87) (2.35) (.55)
Total distributions (2.31) (.87) (2.69) (1.10)
Net asset value, end of period $ 24.17 $ 27.63 $ 22.57 $ 24.80
TOTAL RETURN B, C (4.12)% 27.16% 1.99% 15.96%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 4,808 $ 5,564 $ 41,832 $ 20,429
(000 omitted)
Ratio of expenses to average .85% 1.06% A .78% .97% A
net assets
Ratio of expenses to average .84% F 1.05% A, F .76% F .96% A, F
net assets after expense
reductions
Ratio of net investment (.20)% (.21)% A 1.21% 2.55% A
income (loss) to average net
assets
Portfolio turnover 64% 61% A 151% 142%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 6 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD JULY 3, 1995 (COMMENCEMENT OF SALE OF INSTITUTIONAL
CLASS SHARES) TO DECEMBER 31, 1995.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1998
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Strategic Opportunities Fund (the fund) is a fund of
Fidelity Advisor Series I (the trust) and is authorized to issue an
unlimited number of shares. The trust is registered under the
Investment Company Act of 1940, as amended (the 1940 Act), as an
open-end management investment company organized as a Massachusetts
business trust.
The fund offers Class A, Class T, Class B, Initial Class, and
Institutional Class shares, each of which has equal rights as to
assets and voting privileges. Each class has exclusive voting rights
with respect to matters that affect that class. Class B shares will
automatically convert to Class A shares after a holding period of
seven years from the initial date of purchase. Investment income,
realized and unrealized capital gains and losses, the common expenses
of the fund, and certain fund-level expense reductions, if any, are
allocated on a pro rata basis to each class based on the relative net
assets of each class to the total net assets of the fund. Each class
of shares differs in its respective distribution, transfer agent, and
certain other class-specific fees, expenses, and expense reductions.
The financial statements have been prepared in conformity with
generally accepted accounting principles which require management to
make certain estimates and assumptions at the date of the financial
statements. The following summarizes the significant accounting
policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Securities (including restricted
securities) for which exchange quotations are not readily available
(and in certain cases debt securities which trade on an exchange) are
valued primarily using dealer-supplied valuations or at their fair
value as determined in good faith under consistently applied
procedures under the general supervision of the Board of Trustees.
Short-term securities with remaining maturities of sixty days or less
for which quotations are not readily available are valued at amortized
cost or original cost plus accrued interest, both of which approximate
current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases
and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
FOREIGN CURRENCY TRANSLATION - CONTINUED
the U.S. dollar amount actually received, and gains and losses between
trade and settlement date on purchases and sales of securities. The
effects of changes in foreign currency exchange rates on investments
in securities are included with the net realized and unrealized gain
or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent that it distributes substantially all of
its taxable income for its fiscal year. The schedule of investments
includes information regarding income taxes under the caption "Income
Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend
date, except certain dividends from foreign securities where the
ex-dividend date may have passed, are recorded as soon as the fund is
informed of the ex-dividend date. Non-cash dividends included in
dividend income, if any, are recorded at the fair market value of the
securities received. Interest income is accrued as earned. Investment
income is recorded net of foreign taxes withheld where recovery of
such taxes is uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date. Income dividends and capital gain distributions are
declared separately for each class.
Income and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. These differences, which may result in
distribution reclassifications, are primarily due to differing
treatments for litigation proceeds, foreign currency transactions,
passive foreign investment companies (PFIC), non-taxable dividends,
net operating losses and losses deferred due to wash sales. The fund
also utilized earnings and profits distributed to shareholders on
redemption of shares as a part of the dividends paid deduction for
income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Accumulated undistributed net realized gain (loss) on investments and
foreign currency transactions may include temporary book and tax basis
differences that will reverse in a subsequent period. Any taxable
income or gain remaining at fiscal year end is distributed in the
following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the contracts'
terms. The U.S. dollar value of foreign currency contracts is
determined using contractual currency exchange rates established at
the time of each trade.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other
affiliated entities of Fidelity Management & Research Company (FMR),
may transfer uninvested cash balances into one or more joint trading
accounts. These balances are invested in one or more repurchase
agreements for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are
marked-to-market daily and maintained at a value at least equal to the
principal amount of the repurchase agreement (including accrued
interest). FMR, the fund's investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
RESTRICTED SECURITIES. The fund is permitted to invest in securities
that are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from
registration or to the public if the securities are registered.
Disposal of these securities may involve time-consuming negotiations
and expense, and prompt sale at an acceptable price may be difficult.
At the end of the period, the fund had no investments in restricted
securities (excluding 144A issues).
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $398,205,340 and $472,562,122, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly basic fee that is calculated on the basis of a group fee rate
plus a fixed individual fund fee rate applied to the average net
assets of the fund. The group fee rate is the weighted average of a
series of rates and is based on the monthly average net assets of all
the mutual funds advised by FMR. The rates ranged from .2500% to
.5200% for the period. The annual individual fund fee rate is .30%. In
the event that these rates were lower than the contractual rates in
effect during the period, FMR voluntarily implemented the above rates,
as they resulted in the same or a lower management fee. The basic fee
is subject to a performance adjustment (up to a maximum of
(plus/minus).20% of the fund's average net assets over the
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
performance period) based on the investment performance of the
asset-weighted average return of all classes as compared to the
appropriate index over a specified period of time. For the period, the
management fee was equivalent to an annual rate of .38% of average net
assets after the performance adjustment.
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the
1940 Act, the Trustees have adopted separate distribution plans with
respect to each class of shares, except for the Initial Class
(collectively referred to as "the Plans"). Under certain of the Plans,
the class pays Fidelity Distributors Corporation (FDC), an affiliate
of FMR, a distribution and service fee. A portion of this fee may be
reallowed to securities dealers, banks and other financial
institutions for the distribution of each class of shares and
providing shareholder support services. For the period, this fee was
based on the following annual rates of the average net assets of each
applicable class:
CLASS A .25%
CLASS T .50%
CLASS B 1.00%*
* .75% REPRESENTS A DISTRIBUTION FEE AND .25% REPRESENTS A SHAREHOLDER
SERVICE FEE.
For the period, each class paid FDC the following amounts, a portion
of which was retained by FDC:
PAID TO FDC RETAINED BY FDC
CLASS A $ 8,709 $ 293
CLASS T 2,460,259 36,762
CLASS B 1,095,801 822,641
$ 3,564,769 $ 859,696
Under the Plans, FMR may use its resources to pay administrative and
promotional expenses related to the sale of each class' shares. The
Plans also authorize payments to third parties that assist in the sale
of each class' shares or render shareholder support services. For the
period, the following amounts were paid to third parties under the
Plans:
CLASS A $ 2,539
CLASS T 124,790
CLASS B 66,981
INSTITUTIONAL CLASS 5,422
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
SALES LOAD. FDC receives a front-end sales charge of up to 5.75% for
selling Class A shares, and 3.50% for selling Class T shares of the
fund. The 3.50% front-end sales charge on the sale of shares of the
Initial Class was eliminated effective September 30, 1998. FDC
receives the proceeds of contingent deferred sales charges levied on
Class B share redemptions occurring within six years of purchase.
Contingent deferred sales charges are based on declining rates ranging
from 5% to 1% for Class B of the lesser of the cost of shares at the
initial date of purchase or the net asset value of the redeemed
shares, excluding any reinvested dividends and capital gains. In
addition, purchases of Class A and Class T shares that were subject to
a finder's fee bear a contingent deferred sales charge on assets that
do not remain in the fund for at least one year. The Class A and Class
T contingent deferred sales charge is based on 0.25% of the lesser of
the cost of shares at the initial date of purchase or the net asset
value of the redeemed shares, excluding any reinvested dividends and
capital gains. A portion of the sales charges paid to FDC are paid to
securities dealers, banks and other financial institutions.
For the period, sales charge amounts paid to and retained by FDC were
as follows:
PAID TO FDC RETAINED BY FDC
CLASS A $ 70,878 $ 17,322
CLASS T 243,044 72,427
CLASS B 232,999 232,999*
INITIAL CLASS 11 0
$ 546,932 $ 322,748
* WHEN CLASS B SHARES ARE INITIALLY SOLD, FDC PAYS COMMISSIONS FROM
ITS OWN RESOURCES TO SECURITIES DEALERS,
BANKS, AND OTHER FINANCIAL INSTITUTIONS THROUGH WHICH THE SALES ARE
MADE.
TRANSFER AGENT FEES. Fidelity Investments Institutional Operations
Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend
disbursing and shareholder servicing agent (collectively referred to
as the transfer agent) for the fund's Class A, Class T, Class B and
Institutional Class. Fidelity Service Company, Inc. (FSC), an
affiliate of FMR, is the transfer agent for the Initial Class. FIIOC
and FSC receive account fees and asset-based fees that vary according
to the account size and type of account of the
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
TRANSFER AGENT FEES - CONTINUED
shareholders of the respective classes of the fund. FIIOC and FSC pay
for typesetting, printing and mailing of all shareholder reports,
except proxy statements. For the period, the following amounts were
paid to FIIOC or FSC:
AMOUNT % OF AVERAGE NET ASSETS
CLASS A $ 12,836 .37
CLASS T 990,228 .20
CLASS B 267,239 .24
INITIAL CLASS 36,157 .18
INSTITUTIONAL CLASS 10,021 .21
$ 1,316,481
ACCOUNTING FEES. FSC maintains the fund's accounting records. The fee
is based on the level of average net assets for the month plus
out-of-pocket expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $189,248 for the
period.
5. BANK BORROWINGS.
The fund is permitted to have bank borrowings for temporary or
emergency purposes to fund shareholder redemptions. The fund has
established borrowing arrangements with certain banks. Under the most
restrictive arrangement, the fund must pledge to the bank securities
having a market value in excess of 220% of the total bank borrowings.
The interest rate on the borrowings is the bank's base rate, as
revised from time to time. The maximum loan and the average daily loan
balances during the period for which loans were outstanding amounted
to $3,434,000 and $2,447,000, respectively. The weighted average
interest rate was 5.98%.
6. EXPENSE REDUCTIONS.
FMR agreed to reimburse certain transfer agent, registration and other
class specific expenses for Class A. For the period, the reimbursement
reduced these expenses by $639.
FMR has also directed certain portfolio trades to brokers who paid a
portion of the fund's expenses. For the period, the fund's expenses
were reduced by $44,575 under this arrangement.
6. EXPENSE REDUCTIONS - CONTINUED
In addition, the fund has entered into an arrangement with its
custodian whereby credits realized as a result of uninvested cash
balances were used to reduce a portion of expenses. During the period,
the fund's custodian fees were reduced by $11,766 under the custodian
arrangement.
7. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
YEAR ENDED NOVEMBER 30, 1998 ELEVEN MONTHS ENDED NOVEMBER YEAR ENDED DECEMBER 31, 1996A
30, 1997
FROM NET INVESTMENT INCOME
Class A $ - $ - $ 9,050
Class T - - 4,356,302
Class B - - 291,486
Initial Class - - 263,298
Institutional Class - - 581,296
Total $ - $ - $ 5,501,432
FROM NET REALIZED GAIN
Class A $ 203,594 $ 23,625 $ 47,453
Class T 44,119,122 18,646,131 54,934,732
Class B 8,992,409 3,715,981 9,460,141
Initial Class 1,877,364 742,870 1,978,165
Institutional Class 363,086 178,091 3,692,877
Total $ 55,555,575 $ 23,306,698 $ 70,113,368
$ 55,555,575 $ 23,306,698 $ 75,614,800
</TABLE>
A DISTRIBUTIONS FOR CLASS A ARE FOR THE PERIOD SEPTEMBER 3, 1996
(COMMENCEMENT OF SALE OF SHARES) TO DECEMBER 31, 1996.
8. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SHARES DOLLARS
YEAR ENDED ELEVEN MONTHS YEAR ENDED YEAR ENDED ELEVEN MONTHS YEAR ENDED
NOVEMBER 30, ENDED DECEMBER 31, NOVEMBER 30, ENDED DECEMBER 31,
NOVEMBER 30, NOVEMBER 30,
1998 1997 1996A 1998 1997 1996A
CLASS A Shares sold 149,962 76,361 26,335 $ 3,743,916 $ 2,031,528 $ 633,035
Reinvestment of distributions 8,353 1,056 2,536 200,346 23,641 56,498
Shares redeemed (49,135) (21,820) (531) (1,208,504) (573,832) (12,990)
Net increase (decrease) 109,180 55,597 28,340 $ 2,735,758 $ 1,481,337 $ 676,543
CLASS T Shares sold 4,972,644 4,958,455 7,239,477 $ 126,364,372 $ 130,988,939 $ 173,637,131
Reinvestment of distributions 1,556,391 703,010 2,215,089 37,826,161 15,866,760 50,421,264
Shares redeemed (7,262,586) (11,331,592) (9,664,112) (182,732,848) (272,275,129) (231,598,779)
Net increase (decrease) (733,551) (5,670,127) (209,546) $ (18,542,315) $ (125,419,430) $ (7,540,384)
CLASS B Shares sold 933,371 688,069 1,826,263 $ 23,549,084 $ 17,176,282 $ 43,251,259
Reinvestment of distributions 346,309 155,073 422,830 8,275,545 3,443,078 9,473,517
Shares redeemed (1,032,851) (1,224,149) (1,407,472) (25,089,860) (28,636,853) (33,157,193)
Net increase (decrease) 246,829 (381,007) 841,621 $ 6,734,769 $ (8,017,493) $ 19,567,583
INITIAL CLASS Shares sold 2,933 11,023 7,958 $ 75,101 $ 294,010 $ 193,575
Reinvestment of distributions 68,311 29,056 86,899 1,679,237 663,041 1,996,834
Shares redeemed (93,899) (157,998) (137,073) (2,355,583) (3,820,330) (3,325,386)
Net increase (decrease) (22,655) (117,919) (42,216) $ (601,245) $ (2,863,279) $ (1,134,977)
INSTITUTIONAL CLASS Shares 220,720 875,537 1,132,115 $ 5,783,275 $ 23,872,028 $ 27,291,041
sold
Reinvestment of distributions 11,710 6,165 182,073 283,206 138,401 4,097,341
Shares redeemed (234,866) (2,533,710) (284,588) (6,283,063) (61,384,219) (6,785,910)
Net increase (decrease) (2,436) (1,652,008) 1,029,600 $ (216,582) $ (37,373,790) $ 24,602,472
</TABLE>
A SHARE TRANSACTIONS FOR CLASS A ARE FOR THE PERIOD SEPTEMBER 3, 1996
(COMMENCEMENT OF SALE OF SHARES) TO DECEMBER 31, 1996.
9. REGISTRATION FEES.
For the period, each class paid the following amounts to register its
shares for sale:
REGISTRATION FEES
CLASS A $ 7,239
CLASS T 42,699
CLASS B 14,360
INITIAL CLASS 13,418
INSTITUTIONAL CLASS 8,797
$ 86,513
10. TRANSACTIONS WITH AFFILIATED COMPANIES.
An affiliated company is a company in which the fund has ownership of
at least 5% of the voting securities. Transactions during the period
with companies which are or were affiliates are as follows:
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES
PURCHASE SALES DIVIDEND VALUE
AFFILIATE COST COST INCOME
AFC Cable Systems, Inc. $ 255,000 $ - $ - $ 23,525,953
Alliance Pharmaceutical Corp. 4,676,301 - - 10,772,888
Big Dog Holdings, Inc. 1,935,650 - - 3,161,250
Deckers Outdoor Corp. - 1,269,282 - -
Freds, Inc. Class A 132,500 539,500 123,725 8,541,211
Harveys Casino Resorts - - 165,920 22,191,800
Herley Industries, Inc. - - - -
I-Stat Corp. 1,372,488 - - 5,634,225
Just Toys, Inc. - 60,000 - -
Maxim Group, Inc. 853,105 - - 19,550,763
Maxwell Shoe Co., Inc. Class A 1,072,500 223,125 - 9,456,063
MicroProse, Inc. 104,650 6,425,590 - -
Morton's Restaurant Group, Inc. 260,875 - - 8,442,900
People's Choice TV Corp. - 690,000 - -
Performance Technologies, Inc. 3,376,351 130,313 - 8,946,175
Reno Air, Inc. - 1,838,749 - 5,640,750
Rock of Ages Corp. Class A - - - -
Silicon Gaming, Inc. 3,771,150 3,959,529 - 1,769,906
WMS Industries, Inc. 1,954,181 111,801 - 13,499,806
Whole Foods Market, Inc . - 5,665,957 - -
TOTALS $ 19,764,751 $ 20,913,846 $ 289,645 $ 141,133,690
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Advisor Series I and the Shareholders of
Fidelity Advisor Strategic Opportunities Fund:
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of
Fidelity Advisor Strategic Opportunities (a fund of Fidelity Advisor
Series I) at November 30, 1998, the results of its operations, the
changes in its net assets and the financial highlights for the periods
indicated, in conformity with generally accepted accounting
principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the
responsibility of the Fidelity Advisor Strategic Opportunities Fund's
management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of
these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which
included confirmation of securities at November 30, 1998 by
correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
January 13, 1999
DISTRIBUTIONS
The Board of Trustees of Fidelity Advisor Strategic Opportunities Fund
voted to pay to shareholders of record at the opening of business on
record date, the following distributions derived from capital gains
realized from sales of portfolio securities, and dividends derived
from net investment income:
INITIAL CLASS
PAY DATE 12/22/97 1/5/98 12/21/98 1/11/99
RECORD DATE 12/19/97 1/2/98 12/18/98 1/8/99
DIVIDENDS $.03 - - -
SHORT-TERM
CAPITAL GAINS $1.11 $.03 - -
LONG-TERM
CAPITAL GAINS $1.15 $.12 $.50 $.68
LONG-TERM
CAPITAL GAIN PERCENTAGES:
28% rate 53.70% - - -
20% rate 46.30% 100% 100% 100%
A total of 7% of the dividends distributed by the Initial Class during
the fiscal year qualifies for the dividends-received deduction for
corporate shareholders.
The fund will notify shareholders in January 1999 of the applicable
percentage for use in preparing 1998 income tax returns.
MANAGING YOUR INVESTMENTS
Fidelity offers several ways to conveniently manage your personal
investments via your telephone or PC. You can access your account
information, conduct trades and research your investments 24 hours a
day.
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Fidelity TouchTone Xpress(registered trademark) provides a single
toll-free number to access account balances, positions, quotes and
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the system will help you create a personal identification number (PIN)
for security.
(PHONE_GRAPHIC)TOUCHTONE XPRESS
1-800-544-5555
PRESS
For mutual fund and brokerage trading.
1
For quotes.*
2
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3
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fund activity.
4
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5
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0
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WWW.FIDELITY.COM
If you are not currently on the Internet, call EarthLink Sprint at
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access provider.
(PHONE_GRAPHIC)
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research and analysis tools . . . all on your desktop. Call Fidelity
at 1-800-544-7272 or visit our Web site for more information on how to
manage your investments via your PC.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD
AND RETURN WILL VARY AND,
EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS MEANS
THAT YOU MAY HAVE A
GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO ASSURANCE THAT
MONEY MARKET FUNDS WILL BE
ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN INVESTMENT IN A MONEY
MARKET FUND IS NOT INSURED
OR GUARANTEED BY THE U.S. GOVERNMENT. TOTAL RETURNS ARE HISTORICAL AND
INCLUDE CHANGES IN SHARE
PRICE, REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS, AND THE EFFECTS OF
ANY SALES CHARGES.
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.)
Inc., London, England
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Abigail P. Johnson, Vice President
Harris Leviton, Vice President
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
* INDEPENDENT TRUSTEES
ADVISORY BOARD
J. Gary Burkhead
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Company, Inc.
Boston, MA
* INDEPENDENT TRUSTEES
CUSTODIAN
Brown Brothers Harriman & Co.
Boston, MA
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AUTOMATED LINE FOR QUICKEST SERVICE
(2_FIDELITY_LOGOS)FIDELITY ADVISOR
(registered trademark)
STRATEGIC OPPORTUNITIES
FUND - INSTITUTIONAL CLASS
ANNUAL REPORT
NOVEMBER 30, 1998
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on stock market
strategies.
PERFORMANCE 4 How the fund has done over
time.
FUND TALK 6 The manager's review of fund
performance, strategy and
outlook.
INVESTMENT CHANGES 9 A summary of major shifts in
the fund's investments over
the past six months.
INVESTMENTS 10 A complete list of the fund's
investments with their
market values.
FINANCIAL STATEMENTS 19 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 28 Notes to the financial
statements.
REPORT OF INDEPENDENT 37 The auditors' opinion.
ACCOUNTANTS
DISTRIBUTIONS 38
Standard & Poor's, S&P and S&P 500 are registered service marks of The
McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity
Distributors Corporation.
Other third party marks appearing herein are the property of their
respective owners.
All other marks appearing herein are registered or unregistered
trademarks or service marks of FMR Corp. or an affiliated company.
This report is printed on recycled paper using soy-based inks.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION
OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS
IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT
INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY ADVISOR FUND, INCLUDING CHARGES
AND EXPENSES, CONTACT YOUR
INVESTMENT PROFESSIONAL FOR A FREE PROSPECTUS. READ IT CAREFULLY
BEFORE YOU INVEST OR SEND MONEY.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
The month of November proved to be a strong one for the stock and bond
markets. The Dow Jones Industrial Average reached a record high.
Merger activity, which had lulled during the summer correction, has
increased significantly. Small-cap stocks posted their third
consecutive month of positive returns, as did emerging markets. While
bond returns generally were not at the levels of their equity
counterparts, they were mostly positive nonetheless.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will
greatly reduce your vulnerability to any single decline. We know from
experience, for example, that stock prices have gone up over longer
periods of time, have significantly outperformed other types of
investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through
diversification. A stock mutual fund, for instance, is already
diversified, because it invests in many different companies. You can
increase your diversification further by investing in a number of
different stock funds, or in such other investment categories as
bonds. If you have a short investment time horizon, you might want to
consider moving some of your investment into a money market fund,
which seeks income and a stable share price by investing in
high-quality, short-term investments. Of course, it's important to
remember that there is no assurance that a money market fund will
achieve its goal of maintaining a stable net asset value of $1.00 per
share, and that these types of funds are neither insured nor
guaranteed by any agency of the U.S. government.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases. Of course, you should
consider your financial ability to continue your purchases through
periods of low price levels before undertaking such a strategy.
Remember to contact your investment professional if you need help with
your investments.
Best regards,
Edward C. Johnson 3d
FIDELITY ADVISOR STRATEGIC OPPORTUNITIES FUND - INSTITUTIONAL CLASS
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can
look at the total percentage change in value, the average annual
percentage change or the growth of a hypothetical $10,000 investment.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). The initial offering of Institutional Class shares took place
on July 3, 1995. Institutional Class shares are sold to eligible
investors without a sales load or 12b-1 fee. Returns prior to July 3,
1995 are those of Initial Class. If Fidelity had not reimbursed
certain class expenses, the past 10 year total returns would have been
lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
1998
FIDELITY ADV STRATEGIC -4.12% 66.67% 242.55%
OPPORTUNITIES - INST CL
S&P 500(registered trademark) 23.66% 181.25% 457.74%
Capital Appreciation Funds 8.48% 100.86% 296.44%
Average
CUMULATIVE TOTAL RETURNS show Institutional Class' performance in
percentage terms over a set period - in this case, one year, five
years or 10 years. For example, if you had invested $1,000 in a fund
that had a 5% return over the past year, the value of your investment
would be $1,050. You can compare Institutional Class' returns to those
of the Standard & Poor's 500 Index - a market capitalization-weighted
index of common stocks. To measure how Institutional Class'
performance stacked up against its peers, you can compare it to the
capital appreciation funds average, which reflects the performance of
mutual funds with similar objectives tracked by Lipper Analytical
Services, Inc. The past one year average represents a peer group of
237 mutual funds. These benchmarks reflect the reinvestment of
dividends and capital gains, if any, and exclude the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
1998
FIDELITY ADV STRATEGIC -4.12% 10.76% 13.10%
OPPORTUNITIES - INST CL
S&P 500 23.66% 22.98% 18.75%
Capital Appreciation Funds 8.48% 13.91% 13.51%
Average
AVERAGE ANNUAL TOTAL RETURNS take the Institutional Class' cumulative
return and show you what would have happened if Institutional Class
had performed at a constant rate each year. (Note: Lipper calculates
average annual total returns by annualizing each fund's total return,
then taking an arithmetic average. This may produce a different figure
than that obtained by averaging the cumulative total returns and
annualizing the result.)
$10,000 OVER 10 YEARS
FA Strategic Opp -CL I S&P 500
00694 SP001
1988/11/30 10000.00 10000.00
1988/12/31 10041.77 10175.00
1989/01/31 10644.67 10919.81
1989/02/28 10599.29 10647.91
1989/03/31 10819.70 10896.00
1989/04/30 11228.11 11461.51
1989/05/31 11740.25 11925.70
1989/06/30 11837.49 11857.72
1989/07/31 12647.83 12928.47
1989/08/31 12803.42 13181.87
1989/09/30 12816.39 13127.82
1989/10/31 12608.94 12823.26
1989/11/30 12959.01 13084.85
1989/12/31 13353.60 13398.89
1990/01/31 12487.09 12499.82
1990/02/28 12560.98 12661.07
1990/03/31 12574.41 12996.59
1990/04/30 12063.91 12671.68
1990/05/31 12460.22 13907.16
1990/06/30 12581.13 13812.60
1990/07/31 12628.15 13768.40
1990/08/31 11754.93 12523.73
1990/09/30 11667.60 11913.83
1990/10/31 11667.60 11862.60
1990/11/30 12184.82 12628.92
1990/12/31 12473.01 12981.27
1991/01/31 12888.31 13547.25
1991/02/28 13655.55 14515.88
1991/03/31 14091.97 14867.16
1991/04/30 14289.06 14902.84
1991/05/31 14802.90 15546.65
1991/06/30 14345.37 14834.61
1991/07/31 14781.79 15525.90
1991/08/31 15105.58 15893.87
1991/09/30 15168.93 15628.44
1991/10/31 14873.29 15837.86
1991/11/30 14521.34 15199.60
1991/12/31 15427.94 16938.43
1992/01/31 15461.14 16623.37
1992/02/29 15768.20 16839.48
1992/03/31 15378.15 16511.11
1992/04/30 15676.91 16996.54
1992/05/31 16191.45 17079.82
1992/06/30 16199.75 16825.33
1992/07/31 16697.69 17513.49
1992/08/31 16423.83 17154.46
1992/09/30 16365.73 17356.88
1992/10/31 16498.52 17417.63
1992/11/30 17203.94 18011.57
1992/12/31 17506.80 18233.11
1993/01/31 17836.09 18386.27
1993/02/28 18348.30 18636.33
1993/03/31 18933.69 19029.55
1993/04/30 18567.82 18569.04
1993/05/31 19016.01 19066.69
1993/06/30 19189.80 19121.98
1993/07/31 19610.55 19045.49
1993/08/31 20845.35 19767.32
1993/09/30 20781.33 19615.11
1993/10/31 21449.04 20021.14
1993/11/30 20552.66 19830.94
1993/12/31 21195.84 20070.89
1994/01/31 21398.19 20753.30
1994/02/28 20659.62 20190.89
1994/03/31 19880.59 19310.57
1994/04/30 20042.46 19557.74
1994/05/31 20103.17 19878.49
1994/06/30 20103.17 19391.47
1994/07/31 20609.03 20027.51
1994/08/31 20740.56 20848.63
1994/09/30 20467.39 20337.84
1994/10/31 20265.04 20795.44
1994/11/30 19647.89 20038.07
1994/12/31 19849.42 20335.24
1995/01/31 20712.44 20862.53
1995/02/28 21259.72 21675.54
1995/03/31 21459.68 22315.19
1995/04/30 21933.29 22972.37
1995/05/31 22522.67 23890.58
1995/06/30 23711.95 24445.56
1995/07/31 24529.91 25256.17
1995/08/31 25242.00 25319.56
1995/09/30 26124.14 26388.05
1995/10/31 26028.49 26293.84
1995/11/30 26740.58 27448.14
1995/12/31 27546.23 27976.80
1996/01/31 27568.44 28929.13
1996/02/29 27029.47 29197.30
1996/03/31 26125.85 29478.47
1996/04/30 26826.15 29912.98
1996/05/31 27616.82 30684.44
1996/06/30 27594.23 30801.34
1996/07/31 25707.93 29440.54
1996/08/31 26701.91 30061.44
1996/09/30 27628.11 31753.30
1996/10/31 27142.42 32629.06
1996/11/30 28113.81 35095.49
1996/12/31 28093.98 34400.24
1997/01/31 29139.57 36549.57
1997/02/28 28717.22 36836.12
1997/03/31 26894.11 35322.52
1997/04/30 27036.34 37431.28
1997/05/31 30553.26 39710.10
1997/06/30 31704.02 41489.11
1997/07/31 33139.24 44790.40
1997/08/31 33669.36 42281.24
1997/09/30 37444.88 44596.98
1997/10/31 35725.21 43107.44
1997/11/30 35725.21 45102.89
1997/12/31 35430.72 45877.30
1998/01/31 35743.19 46384.71
1998/02/28 39130.43 49729.97
1998/03/31 40264.24 52276.64
1998/04/30 39073.74 52802.54
1998/05/31 36706.92 51894.87
1998/06/30 36933.69 54002.84
1998/07/31 35729.02 53427.71
1998/08/31 28345.12 45703.13
1998/09/30 30343.45 48630.87
1998/10/31 31774.87 52586.51
1998/11/30 34255.07 55773.78
IMATRL PRASUN SHR__CHT 19981130 19981210 103044 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Strategic Opportunities Fund -
Institutional Class on November 30, 1988. As the chart shows, by
November 30, 1998, the value of the investment would have grown to
$34,255 - a 242.55% increase on the initial investment. For
comparison, look at how the Standard & Poor's 500 Index did over the
same period. With dividends and capital gains, if any, reinvested, the
same $10,000 investment would have grown to $55,774 - a 457.74%
increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
long-term growth and
short-term volatility. In turn, the
share price and return of a
fund that invests in stocks will
vary. That means if you sell
your shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
When the final bell of the U.S. stock
market sounded on Monday,
November 23, 1998, the Dow
Jones Industrial Average stood at a
record high of 9374.27, serving
notice that the bleak economic
outlook from just a few short months
earlier would not keep positive
investor sentiment down. For the
12-month period ended November
30, 1998, the Dow - an index of
30 blue-chip stocks - returned
18.56%. What caused the
turnaround from the doldrums of
equity performance during the
summer and early fall? A variety of
factors: The economic problems in
Russia, Brazil and other emerging
markets began to dissipate; Asian
markets began to rebound; and,
perhaps most importantly, three
interest-rate cuts late in the period
by the Federal Reserve Board
helped stem the tide of a slowing
U.S. economy. All these factors
culminated in the Dow reaching its
record high late in November, a
peak that outpaced the previous
record set in July by nearly 40 points.
Small-cap stock performance was
still a far cry behind their large-cap
brethren. For the period, the Russell
2000 - a popular measure of
small-cap stock performance -
returned -6.62%, significantly
trailing the large-cap weighted
Standard & Poor's 500 Index's
return of 23.66%. Despite the late
rally in the equity market, this kind
of volatility has characterized the
entire year, and when it will level off
is impossible to predict.
An interview with Harris Leviton, Portfolio Manager of Fidelity
Advisor Strategic Opportunities Fund
Q. HOW DID THE FUND PERFORM, HARRIS?
A. For the 12 months that ended November 30, 1998, the fund's
Institutional Class shares posted a total return of -4.12%. In
comparison, the Standard & Poor's 500 Index returned 23.66% while the
capital appreciation funds average tracked by Lipper Analytical
Services returned 8.48%, during the same period.
Q. WHY DID THE FUND'S PERFORMANCE TRAIL THE INDEX AND THE AVERAGE BY
SUCH A WIDE MARGIN?
A. The fund's primary investment objective is to seek out special
situations - such as undervalued investment opportunities or companies
with new products and improved growth prospects. I tend to find these
special situations in the smaller-cap stock arena, which significantly
underperformed large-cap stocks and the broader market indexes during
the period. Compared to the small-cap universe, however, the fund
fared relatively well. In fact, the fund outpaced the performance of
the Russell 2000 Index - a popular measure of stock performance of
smaller companies, which returned -6.62% during the 12-month period.
Q. IN LIGHT OF THIS NEGATIVE ENVIRONMENT FOR SMALL-CAP STOCKS, DID YOU
MAKE ANY CHANGES TO THE FUND'S ASSET ALLOCATION?
A. Not really. Interestingly, I don't believe the underperformance of
many small-cap stocks was based on any fundamental business outlook.
Specifically, select small-caps continued to deliver solid sales gains
and earnings growth. As a result, many small-cap stocks went from
being slightly undervalued to significantly cheaper than the broader
market. I used this opportunity to increase certain fund holdings and
I am quite comfortable with the fund's asset allocation. On a more
positive note, toward the end of the period, investors became less
concerned with problems in overseas markets and more focused on the
positive state of the U.S. economy. Small-cap stocks started to
rebound in response to improved investor sentiment.
Q. HEALTH CARE, CONSTRUCTION & REAL ESTATE AND DURABLES REMAINED
OVERWEIGHTED SECTORS RELATIVE TO THE S&P 500 INDEX. WHAT DID YOU LIKE
ABOUT THESE INDUSTRIES?
A. The health care weighting, like most of the fund, was focused on
small- and mid-cap stocks. Although they didn't do as well as the
larger-cap health care stocks, I think many small-cap health care
stocks are poised to benefit from a number of new products with the
potential to boost profits. I overweighted fund assets in housing
construction and consumer durables because I think these areas will
continue to benefit from a strong housing market. While concerns of a
potential recession hurt this sector at times during the period, many
builders and home furnishing companies experienced robust consumer
demand. And the stocks rebounded significantly during the period.
Q. WHAT STOCKS PERFORMED WELL FOR THE FUND?
A. Sepracor, a biotechnology and pharmaceutical company, performed
extremely well during the period. It was the fund's largest holding as
of November 30, and was a huge success as the company's strategy of
producing improved versions of existing drugs paid off handsomely.
During the period, the company signed significant deals with Eli Lilly
to produce an improved version of Prozac and Schering Plough to
produce an improved version of Claritin. American Bankers, a specialty
property-casualty insurance company, was a solid performer for the
fund as well. It produced strong results in its credit-based accident,
health and life insurance operations, and received a buy-out offer
during the period.
Q. WHAT STOCKS WERE DISAPPOINTMENTS?
A. Unfortunately, a majority of the fund's holdings declined in market
value during the period. Again, this was primarily a factor of the
fund's focus on small-cap value stocks, which were dramatically sold
off during the market's decline in September and October. The biggest
disappointment, however, was Cygnus, a biotechnology and drug delivery
manufacturer. The launch of its major new product was delayed and a
partnership with Becton Dickinson fell apart.
Q. WHAT'S YOUR OUTLOOK OVER THE NEXT SIX MONTHS, HARRIS?
A. We've had a tremendous bounce-back from the market's retreat in
October. Yet, with the exception of three interest-rate cuts by the
Federal Reserve Board, it doesn't seem much has changed in the global
financial environment. We've seen a lot of speculation in the market,
and this is usually a bad sign for short-term progress. However, the
economic consensus in the U.S. seems to be positive, which can help
support the markets, and the basic outlook for small-cap stocks
continues to be strong. Many small- and mid-cap stocks are
substantially cheaper than the market and, in many cases, they are
growing sales and earnings faster than larger-cap stocks. With certain
companies, the disparities between large- and small-cap stock
valuations are enormous. If the market starts to recognize these
opportunities, fund performance should rally.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED
ON MARKET AND OTHER CONDITIONS.
HARRIS LEVITON ON
SMALL-CAP VALUE INVESTING:
"As the fund's performance
indicates, it was a difficult period
for the fund's investment style.
Small-cap stocks and those that I
viewed as undervalued relative to
similar situations were out of
favor during the period. In some
cases, there did not seem to be any
fundamental investment reason for
the punishment that certain
small-cap companies experienced
during the market's downturn from
August through October. For
example, companies like Morton's
Restaurant Group saw its stock
price slashed from 20 to 13 in one
day in October even though the
company's business outlook was as
strong as ever and the stock
performed well in previous
recessions.
"While it's impossible to tell when
this trend will reverse, we've seen
huge amounts of money pour into
big stocks, creating a tremendous
valuation disparity between small-
and large-cap stocks. I believe this
trend has unleashed a lot of
opportunities because many solid
companies with bright outlooks
have been overlooked as the
market chose to focus on a small
number of extremely large
companies in the S&P 500 index.
"While it has been a painful period
to stick to my guns, at some point it
seems this trend should change and
reward the small companies that are
selling at 10 times earnings - a low
price-to-earnings ratio in today's
market - but with projected annual
earnings growth at 20%. There's a
number of them out there."
FUND FACTS
GOAL: seeks capital
appreciation by investing
primarily in securities of
companies believed by
Fidelity to involve a "special
situation"
START DATE: December 31,
1983
SIZE: as of November 30,
1998, more than $572 million
MANAGER: Harris Leviton,
since 1996; joined Fidelity in
1986
(checkmark)
INVESTMENT CHANGES
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TOP TEN STOCKS AS OF NOVEMBER
30, 1998
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE STOCKS 6 MONTHS AGO
Sepracor, Inc. 8.8 7.1
Cable Design Technology Corp. 4.3 3.0
AFC Cable Systems, Inc. 4.1 4.0
Whole Foods Market, Inc. 4.0 7.7
Harveys Casino Resorts 3.9 3.4
Foodmaker, Inc. 3.8 1.6
Maxim Group, Inc. 3.4 2.2
USG Corp. 3.0 2.8
WMS Industries, Inc. 2.4 1.1
Midway Games, Inc. 2.3 1.9
TOP FIVE MARKET SECTORS AS OF
NOVEMBER 30, 1998
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE MARKET SECTORS 6
MONTHS AGO
HEALTH 15.9 15.4
MEDIA & LEISURE 13.3 12.8
DURABLES 13.0 11.6
BASIC INDUSTRIES 11.6 12.8
TECHNOLOGY 9.1 9.7
</TABLE>
ASSET ALLOCATION (% OF FUND'S
INVESTMENTS)
AS OF NOVEMBER 30, 1998 * AS OF MAY 31, 1998 **
Row: 1, Col: 1, Value: 95.8
Row: 1, Col: 2, Value: 1.3
Row: 1, Col: 3, Value: 2.5
Stocks 98.0%
Bonds 0.8%
Short-term
investments 1.2%
FOREIGN
INVESTMENTS 5.0%
Stocks 96.8%
Bonds 0.7%
Short-term
investments 2.5%
FOREIGN
INVESTMENTS 1.4%
Row: 1, Col: 1, Value: 97.0
Row: 1, Col: 2, Value: 1.3
Row: 1, Col: 3, Value: 2.0
*
**
INVESTMENTS NOVEMBER 30, 1998
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 95.7%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 0.4%
DEFENSE ELECTRONICS - 0.4%
Herley Industries, Inc. (a) 208,666 $ 2,269,243
BASIC INDUSTRIES - 11.6%
CHEMICALS & PLASTICS - 1.2%
Associated Materials, Inc. 5,000 55,000
Hanna (M.A.) Co. 43,300 608,906
IMC Global, Inc. 163,600 3,742,350
Ivex Packaging Corp. (a) 122,500 2,388,750
6,795,006
IRON & STEEL - 0.2%
Cold Metal Products, Inc. (a) 128,600 361,688
Steel Dynamics, Inc. (a) 49,900 679,888
1,041,576
METALS & MINING - 9.4%
AFC Cable Systems, Inc. (a)(b) 794,125 23,525,953
Belden, Inc. 216,500 3,653,438
Brush Wellman, Inc. 137,500 2,217,188
Cable Design Technology Corp. 1,324,850 24,426,922
(a)
53,823,501
PACKAGING & CONTAINERS - 0.0%
Silgan Holdings, Inc. (a) 2,400 66,000
PAPER & FOREST PRODUCTS - 0.8%
ABT Building Products Corp. 147,000 1,470,000
(a)
Chesapeake Corp. 21,300 738,844
Mercer International, Inc. 407,900 2,434,653
4,643,497
TOTAL BASIC INDUSTRIES 66,369,580
CONSTRUCTION & REAL ESTATE -
7.9%
BUILDING MATERIALS - 4.6%
American Standard Companies, 140,000 4,795,000
Inc. (a)
Rock of Ages Corp. Class A (a) 172,800 2,073,600
USG Corp. 347,700 17,189,419
York International Corp. 60,000 2,520,000
26,578,019
CONSTRUCTION - 3.1%
American Buildings Co. (a) 20,200 492,375
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
CONSTRUCTION & REAL ESTATE -
CONTINUED
CONSTRUCTION - CONTINUED
Beazer Homes USA, Inc. (a) 173,500 $ 4,142,313
Butler Manufacturing Co. 47,000 1,092,750
Engle Homes, Inc. 202,200 2,780,250
Lennar Corp. 97,400 2,167,150
M/I Schottenstein Homes, Inc. 215,500 4,700,594
NCI Building Systems, Inc. (a) 58,400 1,430,800
U.S. Home Corp. (a) 20,100 640,688
17,446,920
REAL ESTATE INVESTMENT TRUSTS
- - 0.2%
Brandywine Realty Trust 60,000 1,080,000
TOTAL CONSTRUCTION & REAL 45,104,939
ESTATE
DURABLES - 13.0%
AUTOS, TIRES, & ACCESSORIES -
0.8%
Cummins Engine Co., Inc. 53,900 2,001,038
Navistar International Corp. 110,000 2,846,250
(a)
4,847,288
CONSUMER DURABLES - 0.7%
Mikasa, Inc. 51,800 563,325
Simpson Manufacturing Co. 89,800 3,367,500
Ltd. (a)
3,930,825
CONSUMER ELECTRONICS - 1.7%
Fossil, Inc. (a) 266,800 7,387,025
Movado Group, Inc. 102,500 2,075,625
9,462,650
HOME FURNISHINGS - 5.6%
Bassett Furniture Industries, 186,800 4,716,700
Inc.
Furniture Brands 10,000 254,375
International, Inc. (a)
Haverty Furniture Companies, 18,100 352,950
Inc.
Heilig-Meyers Co. 135,600 949,200
Ladd Furniture, Inc. (a) 372,400 6,517,000
Maxim Group, Inc. (a)(b) 999,400 19,550,763
32,340,988
TEXTILES & APPAREL - 4.2%
Deckers Outdoor Corp. (a) 361,900 769,038
Galey & Lord, Inc. (a) 115,800 1,252,088
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
DURABLES - CONTINUED
TEXTILES & APPAREL - CONTINUED
Maxwell Shoe, Inc. Class A 796,300 $ 9,456,063
(a)(b)
Mohawk Industries, Inc. (a) 150,000 5,596,875
Quaker Fabric Corp. (a) 95,000 665,000
Shaw Industries, Inc. 300,000 6,075,000
Synthetic Industries, Inc. (a) 15,000 247,500
24,061,564
TOTAL DURABLES 74,643,315
ENERGY - 2.4%
ENERGY SERVICES - 2.3%
Baker Hughes, Inc. 200,000 3,662,500
BJ Services Co. (a) 356,800 4,928,300
Santa Fe International Corp. 300,000 3,731,250
Smith International, Inc. 40,900 986,713
13,308,763
OIL & GAS - 0.1%
Conoco, Inc. Class A (a) 30,000 710,625
TOTAL ENERGY 14,019,388
FINANCE - 1.1%
CREDIT & OTHER FINANCE - 0.1%
Regent Pacific Group Ltd. 5,000,000 536,003
INSURANCE - 1.0%
American Bankers Insurance 129,800 5,889,675
Group, Inc.
TOTAL FINANCE 6,425,678
HEALTH - 15.9%
DRUGS & PHARMACEUTICALS - 12.9%
Alliance Pharmaceutical Corp. 2,780,100 10,772,888
(a)(b)
Aviron (a) 301,600 6,484,400
Cytyc Corp. (a) 265,300 5,256,256
Natrol, Inc. (a) 80,000 810,000
Sepracor, Inc. (a) 608,700 50,522,090
73,845,634
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
HEALTH - CONTINUED
MEDICAL EQUIPMENT & SUPPLIES
- - 3.0%
Cygnus, Inc. (a) 856,950 $ 4,124,072
I-Stat Corp. (a)(b) 834,700 5,634,225
Oakley, Inc. (a) 445,700 4,345,575
Resound Corp. (a) 567,000 2,976,750
17,080,622
TOTAL HEALTH 90,926,256
INDUSTRIAL MACHINERY &
EQUIPMENT - 3.1%
Case Corp. 173,500 4,207,375
Columbus McKinnon Corp. 221,900 4,035,806
Compx International, Inc. (a) 133,600 3,348,350
Gradall Industries, Inc. (a) 200,000 2,687,500
Hardinge, Inc. 17,500 333,594
T B Wood's Corp. 246,700 3,392,125
18,004,750
MEDIA & LEISURE - 13.1%
BROADCASTING - 0.1%
Nielsen Media Research, Inc. 49,500 742,500
(a)
ENTERTAINMENT - 3.9%
Film Roman, Inc. (a) 55,000 39,531
Harveys Casino Resorts (b) 829,600 22,191,800
22,231,331
LEISURE DURABLES & TOYS - 0.7%
Marvel Enterprises, Inc. (a) 359,300 2,200,713
Silicon Gaming, Inc. (a)(b) 913,500 1,769,906
3,970,619
LODGING & GAMING - 2.4%
WMS Industries, Inc. (b) 1,815,100 13,499,806
PUBLISHING - 0.6%
Reader's Digest Association, 152,800 3,676,750
Inc. Class A (non-vtg.)
RESTAURANTS - 5.4%
Foodmaker, Inc. (a) 1,117,700 21,655,438
Il Fornaio America Corp. (a) 77,700 592,463
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
MEDIA & LEISURE - CONTINUED
RESTAURANTS - CONTINUED
Morton's Restaurant Group, 424,800 $ 8,442,900
Inc. (a)(b)
NPC International, Inc. (a) 12,600 143,325
30,834,126
TOTAL MEDIA & LEISURE 74,955,132
NONDURABLES - 6.8%
AGRICULTURE - 0.8%
Saskatchewan Wheat Pool:
Class B (non-vtg.) 478,300 3,322,719
Class B (non-vtg.) (c) 158,000 1,097,616
4,420,335
FOODS - 2.4%
Corn Products International, 453,300 12,720,731
Inc.
Tomkins PLC 3,457 16,009
Vlasic Foods International, 62,200 1,345,075
Inc. (a)
14,081,815
HOUSEHOLD PRODUCTS - 2.1%
Church & Dwight Co., Inc. 348,500 12,045,031
TOBACCO - 1.5%
Philip Morris Companies, Inc. 150,000 8,390,625
TOTAL NONDURABLES 38,937,806
RETAIL & WHOLESALE - 8.7%
APPAREL STORES - 1.1%
Big Dog Holdings, Inc. (a)(b) 1,011,600 3,161,250
Stage Stores, Inc. (a) 290,000 3,335,000
6,496,250
GENERAL MERCHANDISE STORES -
3.1%
Consolidated Stores Corp. (a) 270,000 5,805,000
Freds, Inc. Class A (b) 607,375 8,541,211
Stein Mart, Inc. (a) 362,300 3,113,516
17,459,727
GROCERY STORES - 4.0%
Whole Foods Market, Inc. (a) 488,600 22,719,900
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
RETAIL & WHOLESALE - CONTINUED
RETAIL & WHOLESALE,
MISCELLANEOUS - 0.5%
Brylane, Inc. (a) 80,000 $ 1,270,000
Cameron Ashley Building 90,000 1,147,500
Products, Inc. (a)
Electronics Boutique Holding 35,000 658,438
Corp. (a)
3,075,938
TOTAL RETAIL & WHOLESALE 49,751,815
SERVICES - 0.7%
PRINTING - 0.5%
Schawk, Inc. Class A 194,000 2,788,750
SERVICES - 0.2%
Compass International 17,000 163,625
Services Corp.
Manpower, Inc. 60,000 1,335,000
1,498,625
TOTAL SERVICES 4,287,375
TECHNOLOGY - 8.7%
COMMUNICATIONS EQUIPMENT - 0.4%
Premisys Communications, Inc. 162,000 2,409,750
(a)
COMPUTER SERVICES & SOFTWARE
- - 3.8%
Activision, Inc. (a) 125,000 1,671,875
CompUSA, Inc. (a) 7,200 106,650
Cotelligent, Inc. (a) 10,000 183,125
Eidos PLC sponsored ADR (a) 21,500 309,063
Electronic Arts, Inc. (a) 30,000 1,263,750
GT Interactive Software Corp. 513,200 3,079,200
(a)
Interplay Entertainment Corp. 590,000 1,198,438
(a)
JDA Software Group, Inc. (a) 66,800 534,400
Midway Games, Inc. (a) 1,275,359 12,992,720
Project Software & 2,500 75,313
Development, Inc. (a)
Titan Corp. (a) 74,000 397,750
21,812,284
COMPUTERS & OFFICE EQUIPMENT
- - 1.6%
Performance Technologies, 730,300 8,946,175
Inc. (a)(b)
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TECHNOLOGY - CONTINUED
ELECTRONIC INSTRUMENTS - 0.7%
Optical Coating Laboratories, 6,000 $ 112,500
Inc.
Varian Associates, Inc. 100,100 3,960,206
4,072,706
ELECTRONICS - 2.2%
AVX Corp. 550,500 10,700,344
Richardson Electronics Ltd. 238,000 2,023,000
12,723,344
TOTAL TECHNOLOGY 49,964,259
TRANSPORTATION - 2.1%
AIR TRANSPORTATION - 1.0%
Reno Air, Inc. (a)(b) 784,800 5,640,750
RAILROADS - 0.5%
Burlington Northern Santa Fe 39,700 1,349,800
Corp.
Genesee & Wyoming, Inc. Class 118,000 1,755,250
A (a)
3,105,050
TRUCKING & FREIGHT - 0.6%
Airborne Freight Corp. 90,000 2,401,875
SPACEHAB, Inc. (a) 90,000 776,250
3,178,125
TOTAL TRANSPORTATION 11,923,925
UTILITIES - 0.2%
CELLULAR - 0.2%
Nextel Communications, Inc. 50,000 1,075,000
Class A (a)
TOTAL COMMON STOCKS 548,658,461
(Cost $512,197,097)
CONVERTIBLE PREFERRED STOCKS
- - 1.1%
FINANCE - 0.1%
CLOSED END INVESTMENT COMPANY
- - 0.1%
Readers Digest Automatic 30,000 725,625
Common Exchange Trust $1.93
TRACES
CONVERTIBLE PREFERRED STOCKS
- - CONTINUED
SHARES VALUE (NOTE 1)
MEDIA & LEISURE - 0.2%
BROADCASTING - 0.2%
Triathlon Broadcasting Co. 104,080 $ 1,027,790
$0.945 depository shares DECS
TRANSPORTATION - 0.8%
AIR TRANSPORTATION - 0.8%
Reno Air, Inc. Series A, 170,000 4,632,500
$7.281 (c)
TOTAL CONVERTIBLE PREFERRED 6,385,915
STOCKS
(Cost $6,071,985)
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CONVERTIBLE BONDS - 0.7%
MOODY'S RATINGS (UNAUDITED) PRINCIPAL AMOUNT
TECHNOLOGY - 0.4%
ELECTRONICS - 0.4%
Richardson Electronics Ltd.:
7.25% 12/15/06 B3 $ 404,000 323,200
8.25% 6/15/06 B3 1,978,000 1,740,640
2,063,840
TRANSPORTATION - 0.3%
TRUCKING & FREIGHT - 0.3%
SPACEHAB, Inc. 8% 10/15/07 (c) - 2,500,000 2,025,000
TOTAL CONVERTIBLE BONDS 4,088,840
(Cost $4,560,430)
</TABLE>
CASH EQUIVALENTS - 2.5%
MATURITY AMOUNT
Investments in repurchase $ 14,122,059 14,120,000
agreements (U.S. Treasury
obligations), in a joint
trading account at 5.25%,
dated 11/30/98 due 12/1/98
TOTAL INVESTMENT IN $ 573,253,216
SECURITIES - 100%
(Cost $536,949,512)
SECURITY TYPE ABBREVIATIONS
DECS - Dividend Enhanced Convertible
Stock/Debt Exchangeable for Common Stock
TRACES - Trust Automatic Common Exchange Securities
LEGEND
(a) Non-income producing
(b) Affiliated company (see Note 10 of Notes to Financial Statements).
(c) Security exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in
transactions exempt from registration, normally to qualified
institutional buyers. At the period end, the value of these securities
amounted to $7,755,116 or 1.4% of net assets.
INCOME TAX INFORMATION
At November 30, 1998, the aggregate cost of investment securities for
income tax purposes was $536,978,516. Net unrealized appreciation
aggregated $36,274,700, of which $135,390,300 related to appreciated
investment securities and $99,115,600 related to depreciated
investment securities.
The fund hereby designates approximately $41,876,000 as a capital gain
dividend for the purpose of the dividend paid deduction.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1998
ASSETS
Investment in securities, at $ 573,253,216
value (including repurchase
agreements of $14,120,000)
(cost $536,949,512) - See
accompanying schedule
Cash 795
Receivable for investments 5,439,887
sold
Receivable for fund shares 566,889
sold
Dividends receivable 261,665
Interest receivable 113,218
Other receivables 126,862
TOTAL ASSETS 579,762,532
LIABILITIES
Payable for investments $ 4,469,194
purchased
Payable for fund shares 1,981,356
redeemed
Accrued management fee 165,741
Distribution fees payable 267,534
Other payables and accrued 174,173
expenses
TOTAL LIABILITIES 7,057,998
NET ASSETS $ 572,704,534
Net Assets consist of:
Paid in capital $ 497,745,143
Accumulated undistributed net 38,653,611
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 36,305,780
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS $ 572,704,534
STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
NOVEMBER 30, 1998
CALCULATION OF MAXIMUM $23.89
OFFERING PRICE CLASS A: NET
ASSET VALUE and redemption
price per share
($4,612,687 (divided by)
193,117 shares)
Maximum offering price per $25.35
share (100/94.25 of $23.89)
CLASS T: NET ASSET VALUE and $24.23
redemption price per share
($443,578,413 (divided by)
18,307,645 shares)
Maximum offering price per $25.11
share (100/96.50 of $24.23)
CLASS B: NET ASSET VALUE and $23.69
offering price per share
($101,233,548 (divided by)
4,272,898 shares) A
INITIAL CLASS: NET ASSET $24.61
VALUE, offering price and
redemption price per share
($18,471,412 (divided by)
750,438 shares)
INSTITUTIONAL CLASS: NET $24.17
ASSET VALUE, offering price
and redemption price per
share ($4,808,474 (divided
by) 198,908 shares)
A REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1998
INVESTMENT INCOME $ 2,960,946
Dividends (including $289,645
received from affiliated
issuers)
Interest 988,931
TOTAL INCOME 3,949,877
EXPENSES
Management fee Basic fee $ 3,718,524
Performance adjustment (1,343,174)
Transfer agent fees 1,316,481
Distribution fees 3,564,769
Accounting fees and expenses 341,818
Non-interested trustees' 1,792
compensation
Custodian fees and expenses 35,154
Registration fees 86,513
Audit 36,021
Legal 6,876
Interest 1,220
Miscellaneous 54,237
Total expenses before 7,820,231
reductions
Expense reductions (56,980) 7,763,251
NET INVESTMENT INCOME (LOSS) (3,813,374)
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 39,751,777
(including realized gain of
$324,211 on sales of
investments in affiliated
issuers)
Foreign currency transactions 107,822 39,859,599
Change in net unrealized
appreciation (depreciation)
on:
Investment securities (66,258,377)
Assets and liabilities in 8,545 (66,249,832)
foreign currencies
NET GAIN (LOSS) (26,390,233)
NET INCREASE (DECREASE) IN $ (30,203,607)
NET ASSETS RESULTING FROM
OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
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YEAR ENDED NOVEMBER 30, 1998 ELEVEN MONTHS ENDED NOVEMBER YEAR ENDED DECEMBER 31, 1996
30, 1997
INCREASE (DECREASE) IN NET
ASSETS
Operations Net investment $ (3,813,374) $ (2,081,517) $ 5,065,025
income (loss)
Net realized gain (loss) 39,859,599 73,741,589 101,103,020
Change in net unrealized (66,249,832) 70,136,543 (96,084,415)
appreciation (depreciation)
NET INCREASE (DECREASE) IN (30,203,607) 141,796,615 10,083,630
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders
From net investment income - - (5,501,432)
From net realized gain (55,555,575) (23,306,698) (70,113,368)
TOTAL DISTRIBUTIONS (55,555,575) (23,306,698) (75,614,800)
Share transactions - net (9,889,615) (172,192,655) 36,171,237
increase (decrease)
TOTAL INCREASE (DECREASE) (95,648,797) (53,702,738) (29,359,933)
IN NET ASSETS
NET ASSETS
Beginning of period 668,353,331 722,056,069 751,416,002
End of period (including $ 572,704,534 $ 668,353,331 $ 722,056,069
undistributed net
investment income of $0, $0
and $1,667,423,
respectively)
</TABLE>
FINANCIAL HIGHLIGHTS - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C> <C>
YEAR ENDED NOVEMBER 30, ELEVEN MONTHS ENDED NOVEMBER YEAR ENDED DECEMBER 31,
30,
1998 1997 1996 F
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 27.51 $ 22.51 $ 23.48
period
Income from Investment
Operations
Net investment income (loss) (.14) (.13) .08
E
Net realized and unrealized (1.09) 6.00 1.26
gain (loss)
Total from investment (1.23) 5.87 1.34
operations
Less Distributions
From net investment income - - (.37)
From net realized gain (2.39) (.87) (1.94)
Total distributions (2.39) (.87) (2.31)
Net asset value, end of period $ 23.89 $ 27.51 $ 22.51
TOTAL RETURN B, C (4.45)% 26.96% 5.80%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 4,613 $ 2,309 $ 638
(000 omitted)
Ratio of expenses to average 1.24% G 1.49% A, G .99% A, D
net assets
Ratio of expenses to average 1.23% H 1.47% A, H .97% A, H
net assets after expense
reductions
Ratio of net investment (.59)% (.59)% A 1.00% A
income (loss) to average net
assets
Portfolio turnover 64% 61% A 151%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 6 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D LIMITED IN ACCORDANCE WITH A STATE EXPENSE LIMITATION.
E NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
F FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A
SHARES) TO DECEMBER 31, 1996.
G FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER (SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS).
H FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS).
<TABLE>
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<S> <C> <C> <C> <C>
YEAR ENDED NOVEMBER 30, ELEVEN MONTHS ENDED NOVEMBER YEARS ENDED DECEMBER 31,
30,
1998 1997 1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 27.78 $ 22.69 $ 24.88 $ 18.70
period
Income from Investment
Operations
Net investment income (loss) (.13) D (.07) D .17 D .39
Net realized and unrealized (1.10) 6.03 .18 6.73
gain (loss)
Total from investment (1.23) 5.96 .35 7.12
operations
Less Distributions
From net investment income - - (.19) (.39)
From net realized gain (2.32) (.87) (2.35) (.55)
Total distributions (2.32) (.87) (2.54) (.94)
Net asset value, end of period $ 24.23 $ 27.78 $ 22.69 $ 24.88
TOTAL RETURN B, C (4.40)% 27.15% 1.53% 38.16%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 443,578 $ 529,043 $ 560,645 $ 619,993
(000 omitted)
Ratio of expenses to average 1.16% 1.24% A 1.28% 1.61%
net assets
Ratio of expenses to average 1.15% F 1.23% A, F 1.27% F 1.61%
net assets after expense
reductions
Ratio of net investment (.53)% (.29)% A .70% 1.90%
income (loss) to average
net assets
Portfolio turnover 64% 61% A 151% 142%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
THREE MONTHS ENDED DECEMBER 31, YEARS ENDED SEPTEMBER 30,
1994 1994 1993
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 19.96 $ 22.52 $ 19.53
period
Income from Investment
Operations
Net investment income (loss) .10 D .39 D .33
Net realized and unrealized (.75) (.81) 4.44
gain (loss)
Total from investment (.65) (.42) 4.77
operations
Less Distributions
From net investment income (.35) (.43) (.57)
From net realized gain (.26) (1.71) (1.21)
Total distributions (.61) (2.14) (1.78)
Net asset value, end of period $ 18.70 $ 19.96 $ 22.52
TOTAL RETURN B, C (3.26)% (2.24)% 26.33%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 375,691 $ 385,349 $ 269,833
(000 omitted)
Ratio of expenses to average 1.73% A, E 1.85% 1.57% G
net assets
Ratio of expenses to average 1.73% A 1.84% F 1.57%
net assets after expense
reductions
Ratio of net investment 2.03% A 1.89% 2.06%
income (loss) to average
net assets
Portfolio turnover 228% A 159% 183%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 6 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS).
G INCLUDES REIMBURSEMENT OF $.03 PER SHARE FOR ADJUSTMENTS TO PRIOR
PERIOD'S FEES.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
YEAR ENDED NOVEMBER 30, ELEVEN MONTHS ENDED NOVEMBER YEARS ENDED DECEMBER 31,
30,
1998 1997 1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 27.23 $ 22.36 $ 24.56 $ 18.57
period
Income from Investment
Operations
Net investment income (loss) (.27) D (.18) D .04 D .38
Net realized and unrealized (1.07) 5.92 .18 6.54
gain (loss)
Total from investment (1.34) 5.74 .22 6.92
operations
Less Distributions
From net investment income - - (.07) (.38)
From net realized gain (2.20) (.87) (2.35) (.55)
Total distributions (2.20) (.87) (2.42) (.93)
Net asset value, end of period $ 23.69 $ 27.23 $ 22.36 $ 24.56
TOTAL RETURN B, C (4.94)% 26.55% 1.00% 37.35%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 101,234 $ 109,646 $ 98,535 $ 87,566
(000 omitted)
Ratio of expenses to average 1.71% 1.78% A 1.80% 2.11%
net assets
Ratio of expenses to average 1.70% F 1.77% A, F 1.79% F 2.10% F
net assets after expense
reductions
Ratio of net investment (1.07)% (.84)% A .18% 1.40%
income (loss) to average net
assets
Portfolio turnover 64% 61% A 151% 142%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
THREE MONTHS ENDED DECEMBER 31, YEAR ENDED SEPTEMBER 30,
1994 1994 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 19.98 $ 19.65
period
Income from Investment
Operations
Net investment income (loss) .06 D .05 D
Net realized and unrealized (.74) .28
gain (loss)
Total from investment (.68) .33
operations
Less Distributions
From net investment income (.47) -
From net realized gain (.26) -
Total distributions (.73) -
Net asset value, end of period $ 18.57 $ 19.98
TOTAL RETURN B, C (3.41)% 1.68%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 17,090 $ 8,824
(000 omitted)
Ratio of expenses to average 2.58% A 2.63% A, G
net assets
Ratio of expenses to average 2.53% A, F 2.63% A
net assets after expense
reductions
Ratio of net investment 1.22% A 1.11% A
income (loss) to average net
assets
Portfolio turnover 228% A 159%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 6 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME CONTINGENT DEFERRED SALES
CHARGE AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD JUNE 30, 1994 (COMMENCEMENT OF SALE OF CLASS B
SHARES) TO SEPTEMBER 30, 1994.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS).
G FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
YEAR ENDED NOVEMBER 30, ELEVEN MONTHS ENDED NOVEMBER YEARS ENDED DECEMBER 31,
30,
1998 1997 1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 28.19 $ 22.90 $ 25.10 $ 18.86
period
Income from Investment
Operations
Net investment income (loss) (.02) D .04 D .28 D .50
Net realized and unrealized (1.12) 6.12 .19 6.79
gain (loss)
Total from investment (1.14) 6.16 .47 7.29
operations
Less Distributions
From net investment income - F - (.32) (.50)
From net realized gain (2.44) F (.87) (2.35) (.55)
Total distributions (2.44) (.87) (2.67) (1.05)
Net asset value, end of period $ 24.61 $ 28.19 $ 22.90 $ 25.10
TOTAL RETURN B, C (3.98)% 27.79% 2.00% 38.75%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 18,471 $ 21,792 $ 20,406 $ 23,428
(000 omitted)
Ratio of expenses to average .70% .77% A .82% 1.04%
net assets
Ratio of expenses to average .69% E .76% A, E .81% E 1.03% E
net assets after expense
reductions
Ratio of net investment (.06)% .18% A 1.16% 2.47%
income (loss) to average
net assets
Portfolio turnover 64% 61% A 151% 142%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
THREE MONTHS ENDED DECEMBER 31, YEARS ENDED SEPTEMBER 30,
1994 1994 1993
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 20.23 $ 22.72 $ 19.72
period
Income from Investment
Operations
Net investment income (loss) .13 D .54 D .45
Net realized and unrealized (.74) (.81) 4.46
gain (loss)
Total from investment (.61) (.27) 4.91
operations
Less Distributions
From net investment income (.50) (.51) (.70)
From net realized gain (.26) (1.71) (1.21)
Total distributions (.76) (2.22) (1.91)
Net asset value, end of period $ 18.86 $ 20.23 $ 22.72
TOTAL RETURN B, C (3.02)% (1.51)% 26.98%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 17,583 $ 18,850 $ 20,707
(000 omitted)
Ratio of expenses to average 1.14% A 1.15% .89% G
net assets
Ratio of expenses to average 1.11% A, E 1.14% E .89%
net assets after expense
reductions
Ratio of net investment 2.65% A 2.60% 2.74%
income (loss) to average
net assets
Portfolio turnover 228% A 159% 183%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 6 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS DO NOT INCLUDE THE FORMER ONE TIME SALES CHARGE AND
FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS).
F THE AMOUNTS SHOWN REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK
TO TAX DIFFERENCES (SEE NOTE 1 OF NOTES TO FINANCIAL STATEMENTS).
G INCLUDES REIMBURSEMENT OF $.03 PER SHARE FOR ADJUSTMENTS TO PRIOR
PERIOD'S FEES.
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
YEAR ENDED NOVEMBER 30, ELEVEN MONTHS ENDED NOVEMBER YEARS ENDED DECEMBER 31,
30,
1998 1997 1996 1995 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 27.63 $ 22.57 $ 24.80 $ 22.35
period
Income from Investment
Operations
Net investment income (loss) (.05) D (.05) D .29 D .55
Net realized and unrealized (1.10) 5.98 .17 3.00
gain (loss)
Total from investment (1.15) 5.93 .46 3.55
operations
Less Distributions
From net investment income - - (.34) (.55)
From net realized gain (2.31) (.87) (2.35) (.55)
Total distributions (2.31) (.87) (2.69) (1.10)
Net asset value, end of period $ 24.17 $ 27.63 $ 22.57 $ 24.80
TOTAL RETURN B, C (4.12)% 27.16% 1.99% 15.96%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 4,808 $ 5,564 $ 41,832 $ 20,429
(000 omitted)
Ratio of expenses to average .85% 1.06% A .78% .97% A
net assets
Ratio of expenses to average .84% F 1.05% A, F .76% F .96% A, F
net assets after expense
reductions
Ratio of net investment (.20)% (.21)% A 1.21% 2.55% A
income (loss) to average net
assets
Portfolio turnover 64% 61% A 151% 142%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 6 OF NOTES TO
FINANCIAL STATEMENTS).
C TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD JULY 3, 1995 (COMMENCEMENT OF SALE OF INSTITUTIONAL
CLASS SHARES) TO DECEMBER 31, 1995.
F FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES
(SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
For the period ended November 30, 1998
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Strategic Opportunities Fund (the fund) is a fund of
Fidelity Advisor Series I (the trust) and is authorized to issue an
unlimited number of shares. The trust is registered under the
Investment Company Act of 1940, as amended (the 1940 Act), as an
open-end management investment company organized as a Massachusetts
business trust.
The fund offers Class A, Class T, Class B, Initial Class, and
Institutional Class shares, each of which has equal rights as to
assets and voting privileges. Each class has exclusive voting rights
with respect to matters that affect that class. Class B shares will
automatically convert to Class A shares after a holding period of
seven years from the initial date of purchase. Investment income,
realized and unrealized capital gains and losses, the common expenses
of the fund, and certain fund-level expense reductions, if any, are
allocated on a pro rata basis to each class based on the relative net
assets of each class to the total net assets of the fund. Each class
of shares differs in its respective distribution, transfer agent, and
certain other class-specific fees, expenses, and expense reductions.
The financial statements have been prepared in conformity with
generally accepted accounting principles which require management to
make certain estimates and assumptions at the date of the financial
statements. The following summarizes the significant accounting
policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are
readily available are valued at the last sale price, or if no sale
price, at the closing bid price. Securities (including restricted
securities) for which exchange quotations are not readily available
(and in certain cases debt securities which trade on an exchange) are
valued primarily using dealer-supplied valuations or at their fair
value as determined in good faith under consistently applied
procedures under the general supervision of the Board of Trustees.
Short-term securities with remaining maturities of sixty days or less
for which quotations are not readily available are valued at amortized
cost or original cost plus accrued interest, both of which approximate
current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases
and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
FOREIGN CURRENCY TRANSLATION - CONTINUED
the U.S. dollar amount actually received, and gains and losses between
trade and settlement date on purchases and sales of securities. The
effects of changes in foreign currency exchange rates on investments
in securities are included with the net realized and unrealized gain
or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
income taxes to the extent that it distributes substantially all of
its taxable income for its fiscal year. The schedule of investments
includes information regarding income taxes under the caption "Income
Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend
date, except certain dividends from foreign securities where the
ex-dividend date may have passed, are recorded as soon as the fund is
informed of the ex-dividend date. Non-cash dividends included in
dividend income, if any, are recorded at the fair market value of the
securities received. Interest income is accrued as earned. Investment
income is recorded net of foreign taxes withheld where recovery of
such taxes is uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date. Income dividends and capital gain distributions are
declared separately for each class.
Income and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. These differences, which may result in
distribution reclassifications, are primarily due to differing
treatments for litigation proceeds, foreign currency transactions,
passive foreign investment companies (PFIC), non-taxable dividends,
net operating losses and losses deferred due to wash sales. The fund
also utilized earnings and profits distributed to shareholders on
redemption of shares as a part of the dividends paid deduction for
income tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Accumulated undistributed net realized gain (loss) on investments and
foreign currency transactions may include temporary book and tax basis
differences that will reverse in a subsequent period. Any taxable
income or gain remaining at fiscal year end is distributed in the
following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the contracts'
terms. The U.S. dollar value of foreign currency contracts is
determined using contractual currency exchange rates established at
the time of each trade.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other
affiliated entities of Fidelity Management & Research Company (FMR),
may transfer uninvested cash balances into one or more joint trading
accounts. These balances are invested in one or more repurchase
agreements for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are
marked-to-market daily and maintained at a value at least equal to the
principal amount of the repurchase agreement (including accrued
interest). FMR, the fund's investment adviser, is responsible for
determining that the value of the underlying securities remains in
accordance with the market value requirements stated above.
RESTRICTED SECURITIES. The fund is permitted to invest in securities
that are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from
registration or to the public if the securities are registered.
Disposal of these securities may involve time-consuming negotiations
and expense, and prompt sale at an acceptable price may be difficult.
At the end of the period, the fund had no investments in restricted
securities (excluding 144A issues).
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $398,205,340 and $472,562,122, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly basic fee that is calculated on the basis of a group fee rate
plus a fixed individual fund fee rate applied to the average net
assets of the fund. The group fee rate is the weighted average of a
series of rates and is based on the monthly average net assets of all
the mutual funds advised by FMR. The rates ranged from .2500% to
.5200% for the period. The annual individual fund fee rate is .30%. In
the event that these rates were lower than the contractual rates in
effect during the period, FMR voluntarily implemented the above rates,
as they resulted in the same or a lower management fee. The basic fee
is subject to a performance adjustment (up to a maximum of
(plus/minus).20% of the fund's average net assets over the
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
performance period) based on the investment performance of the
asset-weighted average return of all classes as compared to the
appropriate index over a specified period of time. For the period, the
management fee was equivalent to an annual rate of .38% of average net
assets after the performance adjustment.
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the
1940 Act, the Trustees have adopted separate distribution plans with
respect to each class of shares, except for the Initial Class
(collectively referred to as "the Plans"). Under certain of the Plans,
the class pays Fidelity Distributors Corporation (FDC), an affiliate
of FMR, a distribution and service fee. A portion of this fee may be
reallowed to securities dealers, banks and other financial
institutions for the distribution of each class of shares and
providing shareholder support services. For the period, this fee was
based on the following annual rates of the average net assets of each
applicable class:
CLASS A .25%
CLASS T .50%
CLASS B 1.00%*
* .75% REPRESENTS A DISTRIBUTION FEE AND .25% REPRESENTS A SHAREHOLDER
SERVICE FEE.
For the period, each class paid FDC the following amounts, a portion
of which was retained by FDC:
PAID TO FDC RETAINED BY FDC
CLASS A $ 8,709 $ 293
CLASS T 2,460,259 36,762
CLASS B 1,095,801 822,641
$ 3,564,769 $ 859,696
Under the Plans, FMR may use its resources to pay administrative and
promotional expenses related to the sale of each class' shares. The
Plans also authorize payments to third parties that assist in the sale
of each class' shares or render shareholder support services. For the
period, the following amounts were paid to third parties under the
Plans:
CLASS A $ 2,539
CLASS T 124,790
CLASS B 66,981
INSTITUTIONAL CLASS 5,422
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
SALES LOAD. FDC receives a front-end sales charge of up to 5.75% for
selling Class A shares, and 3.50% for selling Class T shares of the
fund. The 3.50% front-end sales charge on the sale of shares of the
Initial Class was eliminated effective September 30, 1998. FDC
receives the proceeds of contingent deferred sales charges levied on
Class B share redemptions occurring within six years of purchase.
Contingent deferred sales charges are based on declining rates ranging
from 5% to 1% for Class B of the lesser of the cost of shares at the
initial date of purchase or the net asset value of the redeemed
shares, excluding any reinvested dividends and capital gains. In
addition, purchases of Class A and Class T shares that were subject to
a finder's fee bear a contingent deferred sales charge on assets that
do not remain in the fund for at least one year. The Class A and Class
T contingent deferred sales charge is based on 0.25% of the lesser of
the cost of shares at the initial date of purchase or the net asset
value of the redeemed shares, excluding any reinvested dividends and
capital gains. A portion of the sales charges paid to FDC are paid to
securities dealers, banks and other financial institutions.
For the period, sales charge amounts paid to and retained by FDC were
as follows:
PAID TO FDC RETAINED BY FDC
CLASS A $ 70,878 $ 17,322
CLASS T 243,044 72,427
CLASS B 232,999 232,999*
INITIAL CLASS 11 0
$ 546,932 $ 322,748
* WHEN CLASS B SHARES ARE INITIALLY SOLD, FDC PAYS COMMISSIONS FROM
ITS OWN RESOURCES TO SECURITIES DEALERS,
BANKS, AND OTHER FINANCIAL INSTITUTIONS THROUGH WHICH THE SALES ARE
MADE.
TRANSFER AGENT FEES. Fidelity Investments Institutional Operations
Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend
disbursing and shareholder servicing agent (collectively referred to
as the transfer agent) for the fund's Class A, Class T, Class B and
Institutional Class. Fidelity Service Company, Inc. (FSC), an
affiliate of FMR, is the transfer agent for the Initial Class. FIIOC
and FSC receive account fees and asset-based fees that vary according
to the account size and type of account of the
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
TRANSFER AGENT FEES - CONTINUED
shareholders of the respective classes of the fund. FIIOC and FSC pay
for typesetting, printing and mailing of all shareholder reports,
except proxy statements. For the period, the following amounts were
paid to FIIOC or FSC:
AMOUNT % OF AVERAGE NET ASSETS
CLASS A $ 12,836 .37
CLASS T 990,228 .20
CLASS B 267,239 .24
INITIAL CLASS 36,157 .18
INSTITUTIONAL CLASS 10,021 .21
$ 1,316,481
ACCOUNTING FEES. FSC maintains the fund's accounting records. The fee
is based on the level of average net assets for the month plus
out-of-pocket expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $189,248 for the
period.
5. BANK BORROWINGS.
The fund is permitted to have bank borrowings for temporary or
emergency purposes to fund shareholder redemptions. The fund has
established borrowing arrangements with certain banks. Under the most
restrictive arrangement, the fund must pledge to the bank securities
having a market value in excess of 220% of the total bank borrowings.
The interest rate on the borrowings is the bank's base rate, as
revised from time to time. The maximum loan and the average daily loan
balances during the period for which loans were outstanding amounted
to $3,434,000 and $2,447,000, respectively. The weighted average
interest rate was 5.98%.
6. EXPENSE REDUCTIONS.
FMR agreed to reimburse certain transfer agent, registration and other
class specific expenses for Class A. For the period, the reimbursement
reduced these expenses by $639.
FMR has also directed certain portfolio trades to brokers who paid a
portion of the fund's expenses. For the period, the fund's expenses
were reduced by $44,575 under this arrangement.
6. EXPENSE REDUCTIONS - CONTINUED
In addition, the fund has entered into an arrangement with its
custodian whereby credits realized as a result of uninvested cash
balances were used to reduce a portion of expenses. During the period,
the fund's custodian fees were reduced by $11,766 under the custodian
arrangement.
7. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
YEAR ENDED NOVEMBER 30, 1998 ELEVEN MONTHS ENDED NOVEMBER YEAR ENDED DECEMBER 31, 1996A
30, 1997
FROM NET INVESTMENT INCOME
Class A $ - $ - $ 9,050
Class T - - 4,356,302
Class B - - 291,486
Initial Class - - 263,298
Institutional Class - - 581,296
Total $ - $ - $ 5,501,432
FROM NET REALIZED GAIN
Class A $ 203,594 $ 23,625 $ 47,453
Class T 44,119,122 18,646,131 54,934,732
Class B 8,992,409 3,715,981 9,460,141
Initial Class 1,877,364 742,870 1,978,165
Institutional Class 363,086 178,091 3,692,877
Total $ 55,555,575 $ 23,306,698 $ 70,113,368
$ 55,555,575 $ 23,306,698 $ 75,614,800
</TABLE>
A DISTRIBUTIONS FOR CLASS A ARE FOR THE PERIOD SEPTEMBER 3, 1996
(COMMENCEMENT OF SALE OF SHARES) TO DECEMBER 31, 1996.
8. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SHARES DOLLARS
YEAR ENDED ELEVEN MONTHS YEAR ENDED YEAR ENDED ELEVEN MONTHS YEAR ENDED
NOVEMBER 30, ENDED DECEMBER 31, NOVEMBER 30, ENDED DECEMBER 31,
NOVEMBER 30, NOVEMBER 30,
1998 1997 1996A 1998 1997 1996A
CLASS A Shares sold 149,962 76,361 26,335 $ 3,743,916 $ 2,031,528 $ 633,035
Reinvestment of distributions 8,353 1,056 2,536 200,346 23,641 56,498
Shares redeemed (49,135) (21,820) (531) (1,208,504) (573,832) (12,990)
Net increase (decrease) 109,180 55,597 28,340 $ 2,735,758 $ 1,481,337 $ 676,543
CLASS T Shares sold 4,972,644 4,958,455 7,239,477 $ 126,364,372 $ 130,988,939 $ 173,637,131
Reinvestment of distributions 1,556,391 703,010 2,215,089 37,826,161 15,866,760 50,421,264
Shares redeemed (7,262,586) (11,331,592) (9,664,112) (182,732,848) (272,275,129) (231,598,779)
Net increase (decrease) (733,551) (5,670,127) (209,546) $ (18,542,315) $ (125,419,430) $ (7,540,384)
CLASS B Shares sold 933,371 688,069 1,826,263 $ 23,549,084 $ 17,176,282 $ 43,251,259
Reinvestment of distributions 346,309 155,073 422,830 8,275,545 3,443,078 9,473,517
Shares redeemed (1,032,851) (1,224,149) (1,407,472) (25,089,860) (28,636,853) (33,157,193)
Net increase (decrease) 246,829 (381,007) 841,621 $ 6,734,769 $ (8,017,493) $ 19,567,583
INITIAL CLASS Shares sold 2,933 11,023 7,958 $ 75,101 $ 294,010 $ 193,575
Reinvestment of distributions 68,311 29,056 86,899 1,679,237 663,041 1,996,834
Shares redeemed (93,899) (157,998) (137,073) (2,355,583) (3,820,330) (3,325,386)
Net increase (decrease) (22,655) (117,919) (42,216) $ (601,245) $ (2,863,279) $ (1,134,977)
INSTITUTIONAL CLASS Shares 220,720 875,537 1,132,115 $ 5,783,275 $ 23,872,028 $ 27,291,041
sold
Reinvestment of distributions 11,710 6,165 182,073 283,206 138,401 4,097,341
Shares redeemed (234,866) (2,533,710) (284,588) (6,283,063) (61,384,219) (6,785,910)
Net increase (decrease) (2,436) (1,652,008) 1,029,600 $ (216,582) $ (37,373,790) $ 24,602,472
</TABLE>
A SHARE TRANSACTIONS FOR CLASS A ARE FOR THE PERIOD SEPTEMBER 3, 1996
(COMMENCEMENT OF SALE OF SHARES) TO DECEMBER 31, 1996.
9. REGISTRATION FEES.
For the period, each class paid the following amounts to register its
shares for sale:
REGISTRATION FEES
CLASS A $ 7,239
CLASS T 42,699
CLASS B 14,360
INITIAL CLASS 13,418
INSTITUTIONAL CLASS 8,797
$ 86,513
10. TRANSACTIONS WITH AFFILIATED COMPANIES.
An affiliated company is a company in which the fund has ownership of
at least 5% of the voting securities. Transactions during the period
with companies which are or were affiliates are as follows:
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES
PURCHASE SALES DIVIDEND VALUE
AFFILIATE COST COST INCOME
AFC Cable Systems, Inc. $ 255,000 $ - $ - $ 23,525,953
Alliance Pharmaceutical Corp. 4,676,301 - - 10,772,888
Big Dog Holdings, Inc. 1,935,650 - - 3,161,250
Deckers Outdoor Corp. - 1,269,282 - -
Freds, Inc. Class A 132,500 539,500 123,725 8,541,211
Harveys Casino Resorts - - 165,920 22,191,800
Herley Industries, Inc. - - - -
I-Stat Corp. 1,372,488 - - 5,634,225
Just Toys, Inc. - 60,000 - -
Maxim Group, Inc. 853,105 - - 19,550,763
Maxwell Shoe Co., Inc. Class A 1,072,500 223,125 - 9,456,063
MicroProse, Inc. 104,650 6,425,590 - -
Morton's Restaurant Group, Inc. 260,875 - - 8,442,900
People's Choice TV Corp. - 690,000 - -
Performance Technologies, Inc. 3,376,351 130,313 - 8,946,175
Reno Air, Inc. - 1,838,749 - 5,640,750
Rock of Ages Corp. Class A - - - -
Silicon Gaming, Inc. 3,771,150 3,959,529 - 1,769,906
WMS Industries, Inc. 1,954,181 111,801 - 13,499,806
Whole Foods Market, Inc . - 5,665,957 - -
TOTALS $ 19,764,751 $ 20,913,846 $ 289,645 $ 141,133,690
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Advisor Series I and the Shareholders of
Fidelity Advisor Strategic Opportunities Fund:
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, and the related statements of
operations and of changes in net assets and the financial highlights
present fairly, in all material respects, the financial position of
Fidelity Advisor Strategic Opportunities (a fund of Fidelity Advisor
Series I) at November 30, 1998, the results of its operations, the
changes in its net assets and the financial highlights for the periods
indicated, in conformity with generally accepted accounting
principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the
responsibility of the Fidelity Advisor Strategic Opportunities Fund's
management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of
these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which
included confirmation of securities at November 30, 1998 by
correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
January 13, 1999
DISTRIBUTIONS
The Board of Trustees of Fidelity Advisor Strategic Opportunities Fund
voted to pay to shareholders of record at the opening of business on
record date, the following distributions derived from capital gains
realized from sales of portfolio securities, and dividends derived
from net investment income:
INSTITUTIONAL CLASS
CLASS A
PAY DATE 12/22/97 1/5/98 12/21/98 1/11/99
RECORD DATE 12/19/97 1/2/98 12/18/98 1/8/99
SHORT-TERM
CAPITAL GAINS $1.01 $.03 - -
LONG-TERM
CAPITAL GAINS $1.15 $.12 $.50 $.68
LONG-TERM
CAPITAL GAIN PERCENTAGES:
28% rate 53.70% - - -
20% rate 46.30% 100% 100% 100%
A total of 7% of the dividends distributed by the Institutional Class
during the fiscal year qualifies for the dividends-received deduction
for corporate shareholders.
The fund will notify shareholders in January 1999 of the applicable
percentage for use in preparing 1998 income tax returns.
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.) Inc., London, England
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Abigail P. Johnson, Vice President
Harris Leviton, Vice President
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
* INDEPENDENT TRUSTEES
ADVISORY BOARD
J. Gary Burkhead
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Investments Institutional Operations Company, Inc.
Boston, MA
CUSTODIAN
Brown Brothers Harriman & Co.
Boston, MA
FOCUS FUNDS
Fidelity Advisor Consumer
Industries Fund
Fidelity Advisor Cyclical
Industries Fund
Fidelity Advisor Financial
Services Fund
Fidelity Advisor Health Care Fund
Fidelity Advisor Natural
Resources Fund
Fidelity Advisor Technology Fund
Fidelity Advisor Utilities Growth Fund
GROWTH FUNDS
Fidelity Advisor Latin America Fund
Fidelity Advisor Japan Fund
Fidelity Advisor Europe Capital Appreciation Fund
Fidelity Advisor International
Capital Appreciation Fund
Fidelity Advisor Overseas Fund
Fidelity Advisor Diversified
International Fund
Fidelity Advisor Global Equity Fund
Fidelity Advisor TechnoQuant
Growth Fund
SM
Fidelity Advisor Small Cap Fund
Fidelity Advisor Strategic
Opportunities Fund
Fidelity Advisor Mid Cap Fund
Fidelity Advisor Retirement
Growth Fund
Fidelity Advisor Equity Growth Fund
Fidelity Advisor Large Cap Fund
Fidelity Advisor Dividend Growth Fund
Fidelity Advisor Growth
Opportunities Fund
GROWTH AND INCOME FUNDS
Fidelity Advisor Growth & Income Fund
Fidelity Advisor Equity Income Fund
Fidelity Advisor Asset Allocation Fund
Fidelity Advisor Balanced Fund
TAXABLE INCOME FUNDS
Fidelity Advisor Emerging Markets Income Fund
Fidelity Advisor High Yield Fund
Fidelity Advisor Strategic Income Fund
Fidelity Advisor Mortgage
Securities Fund
Fidelity Advisor Government Investment Fund
Fidelity Advisor Intermediate Bond Fund
Fidelity Advisor Short Fixed-Income Fund
MUNICIPAL FUNDS
Fidelity Advisor Municipal Income Fund
Fidelity Advisor Intermediate Municipal Income Fund
MONEY MARKET FUNDS
Prime Fund
Treasury Fund
Tax-Exempt Funds
(registered trademark)
