SUPPLEMENT TO THE
FIDELITY ADVISOR FUNDS(registered trademark)
CLASS A, CLASS T, CLASS B, AND CLASS C
FEBRUARY 26, 1999
REVISED APRIL 9,1999 PROSPECTUS
Effective the close of business on December 29, 1999, shares of
Advisor Intermediate Municipal Income Fund will no longer be available
for purchase except through the reinvestment of dividends and other
distributions by shareholders of the fund on December 29, 1999.
PROPOSED REORGANIZATION. The Board of Trustees of Fidelity
Advisor Series II has unanimously approved an Agreement and Plan of
Reorganization ("Agreement") between Advisor Intermediate Municipal
Income Fund and Advisor Municipal Income Fund.
The Agreement provides for the transfer of all of the assets and
the assumption of all of the liabilities of Advisor Intermediate
Municipal Income Fund solely in exchange for Class A, Class T, Class
B, Class C, and Institutional Class shares of Advisor Municipal Income
Fund equal in value to the relative net asset value of the outstanding
shares of Class A, Class T, Class B, Class C, and Institutional Class,
respectively, of Advisor Intermediate Municipal Income Fund. Following
such exchange, Advisor Intermediate Municipal Income Fund will
distribute the Advisor Municipal Income Fund shares to its
shareholders pro rata to the corresponding class, in liquidation of
Advisor Intermediate Municipal Income Fund as provided in the
Agreement (the transactions contemplated by the Agreement referred to
as the "Reorganization").
The Reorganization can be consummated only if, among other things,
it is approved by a "majority of the outstanding voting securities" of
the fund as that term is defined under the Investment Company Act of
1940. A Special Meeting (the "Meeting") of the Shareholders of Advisor
Intermediate Municipal Income Fund will be held on April 19, 2000, and
approval of the Agreement will be voted on at that time. In connection
with the Meeting, Advisor Intermediate Municipal Income Fund will be
filing with the Securities and Exchange Commission and delivering to
its shareholders of record a Proxy Statement describing the
Reorganization and a Prospectus for Advisor Municipal Income Fund.
If the Agreement is approved at the Meeting and certain conditions
required by the Agreement are satisfied, the Reorganization is
expected to become effective on or about May 25, 2000. If shareholder
approval of the Agreement is delayed due to failure to meet a quorum
or otherwise, the Reorganization will become effective, if approved,
as soon as practicable thereafter.
In the event Advisor Intermediate Municipal Income Fund
shareholders fail to approve the Agreement, Advisor Intermediate
Municipal Income Fund will continue to engage in business as a
registered investment company and the Board of Trustees will consider
other proposals for the reorganization or liquidation of Advisor
Intermediate Municipal Income Fund.
FIDELITY ADVISOR STRATEGIC OPPORTUNITIES FUND HAS BEEN RENAMED
FIDELITY ADVISOR VALUE STRATEGIES FUND. ALL REFERENCES TO ADVISOR
STRATEGIC OPPORTUNITIES THROUGHOUT THIS PROSPECTUS SHOULD BE REPLACED
WITH ADVISOR VALUE STRATEGIES.
The following information replaces similar information found in the
"Investment Summary" section beginning on page 3.
INVESTMENT OBJECTIVE
ADVISOR VALUE STRATEGIES FUND seeks capital appreciation.
PRINCIPAL INVESTMENT STRATEGIES
FMR's principal investment strategies include:
(small solid bullet) Investing primarily in common stocks.
(small solid bullet) Investing in securities of companies that FMR
believes are undervalued in the marketplace in relation to factors
such as assets, earnings or growth potential (stocks of these
companies are often called "value" stocks).
(small solid bullet) Focusing investments in medium-sized companies,
but may also invest substantially in larger or smaller companies.
(small solid bullet) Investing in domestic and foreign issuers.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
PRINCIPAL INVESTMENT RISKS
The fund is subject to the following principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets can be more
volatile than the U.S. market due to increased risks of adverse
issuer, political, regulatory, market or economic developments and can
perform differently than the U.S. market.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently than
the value of the market as a whole. The value of securities of smaller
issuers can be more volatile than that of larger issuers.
(small solid bullet) "VALUE" INVESTING. "Value" stocks can perform
differently than the market as a whole and other types of stocks and
can continue to be undervalued by the market for long periods of time.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
The following information replaces similar information found in the
"Performance" section on page 12.
The following information illustrates the changes in the funds'
performance, as represented by the performance of Class T, from year
to year and compares the funds' performance to the performance of a
market index and an average of the performance of similar funds over
various periods of time. Each of Advisor Balanced and Advisor
Strategic Income may also compare its performance to the performance
of a combination of market indexes over various periods of time. Each
of Advisor Intermediate Municipal Income, Advisor Equity Income and
Advisor Equity Growth may also compare their performance to the
performance of an additional index over various periods of time. Data
for the additional index for Advisor Intermediate Municipal Income is
available only from June 30, 1993 to the present. Prior to July 1,
1999, Advisor Value Strategies operated under certain different
investment policies. Accordingly, the fund's historical performance
may not represent its current investment policies. Returns are based
on past results and are not an indication of future performance.
The following information replaces similar information found under the
heading "Average Annual Returns" in the "Performance" section on page
18.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
For the periods ended Past 1 year Past 5 years Past 10 years/ Life of class*
December 31, 1998
ADVISOR VALUE STRATEGIES - -5.10% n/a 9.31%A
CLASS A
ADVISOR VALUE STRATEGIES - -2.69% 9.81% 12.64%
CLASS T
ADVISOR VALUE STRATEGIES - -4.67% n/a 14.42%C
CLASS B
S&P 500 28.58% 24.06% 19.21%
Russell MidCap Value Index 5.08% 17.53% 16.18%
Lipper Capital Appreciation 19.96% 14.96% 14.09%
Funds Average
</TABLE>
* BEGINNING JANUARY 1 OF THE FIRST CALENDAR YEAR FOLLOWING THE CLASS'S
COMMENCEMENT OF OPERATIONS.
A FROM JANUARY 1, 1997.
C FROM JANUARY 1, 1995.
The following information replaces similar information found under the
heading "Average Annual Returns" in the "Performance" section
beginning on page 20.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
For the periods ended Past 1 year Past 5 years Past 10 years/ Life of class*
December 31, 1998
ADVISOR HIGH YIELD - CLASS A -5.15% n/a 4.47%A
ADVISOR HIGH YIELD - CLASS T -3.93% 8.03% 12.59%
ADVISOR HIGH YIELD - CLASS B -5.58% n/a 10.20%B
ADVISOR HIGH YIELD - CLASS C -2.07% n/a -2.07%C
Merrill Lynch High Yield 3.66% 9.01% 11.08%
Master Index
Merrill Lynch High Yield 2.95% 9.12% 11.18%
Master II Index
Lipper High Current Yield -0.44% 7.37% 9.34%
Funds Average
ADVISOR STRATEGIC INCOME - -2.48% n/a 3.22%A
CLASS A
ADVISOR STRATEGIC INCOME - -1.31% n/a 10.41%B
CLASS T
ADVISOR STRATEGIC INCOME - -3.07% n/a 10.16%B
CLASS B
ADVISOR STRATEGIC INCOME - 0.46% n/a 0.46%C
CLASS C
Merrill Lynch High Yield 3.66% n/a 11.72%B
Master Index
Merrill Lynch High Yield 2.95% n/a 11.82%B
Master II Index
Lipper Multi-Sector Income 1.30% n/a 9.28%B
Funds Average
Fidelity Strategic Income 5.43% n/a 11.47%B
Composite Index
</TABLE>
* BEGINNING JANUARY 1 OF THE FIRST CALENDAR YEAR FOLLOWING THE CLASS'S
COMMENCEMENT OF OPERATIONS.
A FROM JANUARY 1, 1997.
B FROM JANUARY 1, 1995.
C FROM JANUARY 1, 1998.
Fidelity Strategic Income Composite Index is a hypothetical
representation of the performance of Advisor Strategic Income's four
general investment categories according to their respective weighting
in the fund's neutral mix (40% high yield, 30% U.S. Government and
investment-grade, 15% foreign developed markets and 15% emerging
markets). The following indexes are used to calculate the Composite
Index: high yield - the Merrill Lynch High Yield Master II Index, U.S.
Government and investment-grade - the Lehman Brothers Government Bond
Index, foreign developed markets - the Salomon Brothers Non-U.S.
Dollar World Government Bond Index, emerging markets - the J.P. Morgan
Emerging Markets Bond Index Plus. The index weightings of the
Composite Index are rebalanced monthly.
The following information supplements the information found under the
heading "Average Annual Returns" in the "Performance" section on page
21.
Going forward, Advisor Value Strategies' performance will be compared
to the Russell MidCap Value Index rather than the S&P 500. The Russell
MidCap Value Index more closely reflects the fund's investment
strategy.
Russell MidCap Value Index is a market capitalization-weighted index
of medium capitalization value-oriented stocks of U.S. corporations.
Going forward, Advisor High Yield's and Advisor Strategic Income's
performance will be compared to the Merrill Lynch High Yield Master II
Index rather than the Merrill Lynch High Yield Master Index because
the Merrill Lynch High Yield Master II Index contains deferred
interest bonds and payment-in-kind securities and is therefore a
better representation of the high yield bond universe.
Merrill Lynch High Yield Master II Index is a market value-weighted
index of all domestic and yankee high-yield bonds, including deferred
interest bonds and payment-in-kind securities. Issues included in the
index have maturities of one year or more and have a credit rating
lower than BBB-/Baa3, but are not in default.
The following information replaces similar information found in the
"Investment Details" section beginning on page 31.
INVESTMENT OBJECTIVE
ADVISOR VALUE STRATEGIES FUND seeks capital appreciation.
PRINCIPAL INVESTMENT STRATEGIES
FMR normally invests the fund's assets primarily in common stocks.
FMR focuses on securities of companies that it believes are
undervalued in the marketplace in relation to factors such as the
company's assets, earnings or growth potential. The stocks of these
companies are often called "value" stocks.
Although FMR focuses on investing the fund's assets in securities
issued by medium-sized companies, FMR may also make substantial
investments in securities issued by larger or smaller companies.
FMR may invest the fund's assets in securities of foreign issuers in
addition to securities of domestic issuers.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions. Factors considered include growth
potential, earnings estimates and management.
FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.
The following information replaces similar information found under the
heading "Fundamental Investment Policies" in the "Investment Details"
section on page 40.
ADVISOR VALUE STRATEGIES FUND seeks capital appreciation.
The following information replaces similar information found in the
"Fund Management" section on page 50.
Fidelity Management & Research (U.K.) Inc. (FMR U.K.), in London,
England, serves as a sub-adviser for the Equity Funds, the Bond Funds
(except Advisor Government Investment and Advisor Municipal Income),
Advisor Intermediate Bond, and Advisor Short Fixed-Income. FMR U.K.
was organized in 1986 to provide investment research and advice to
FMR. Currently, FMR U.K. provides investment research and advice on
issuers based outside the United States and may also provide
investment advisory services for the Equity Funds, the Bond Funds
(except Advisor Government Investment and Advisor Municipal Income),
Advisor Intermediate Bond, and Advisor Short Fixed-Income.
Fidelity Management & Research Far East Inc. (FMR Far East), in Tokyo,
Japan, serves as a sub-adviser for the Equity Funds, the Bond Funds
(except Advisor Government Investment and Advisor Municipal Income),
Advisor Intermediate Bond, and Advisor Short Fixed-Income. FMR Far
East was organized in 1986 to provide investment research and advice
to FMR. Currently, FMR Far East provides investment research and
advice on issuers based outside the United States and may also provide
investment advisory services for the Equity Funds, the Bond Funds
(except Advisor Government Investment and Advisor Municipal Income),
Advisor Intermediate Bond, and Advisor Short Fixed-Income.
John Carlson is vice president and lead manager of Advisor Strategic
Income, which he has managed since August 1995. Other Fidelity
investment professionals assist Mr. Carlson in selecting investments
for the fund. He also manages other Fidelity funds. Prior to joining
Fidelity in 1995, Mr. Carlson was executive director of emerging
markets at Lehman Brothers International from 1992 through 1995.
Margaret Eagle is vice president and manager of Advisor High Yield,
which she has managed since January 1987. Additionally, she is a
senior vice president of Fidelity Trust Company. Since joining
Fidelity in 1980, Ms. Eagle has been an analyst and portfolio manager.
David Felman is vice president and manager of Advisor Mid Cap, which
he has managed since August 1999. He also manages other Fidelity
funds. Mr. Felman joined Fidelity as an analyst in 1993.
Kevin Grant is vice president and manager of Advisor Balanced and
Advisor Intermediate Bond, which he has managed since March 1996 and
October 1995, respectively. Mr. Grant manages the fixed-income
investments for Advisor Balanced. He also manages several other
Fidelity funds. Prior to joining Fidelity in 1993, Mr. Grant was vice
president and chief mortgage strategist at Morgan Stanley for three
years.
The following information found in the "Fund Management" section on
page 51 is no longer applicable.
Ian Spreadbury is manager of Advisor Strategic Income's foreign bond
investments, which he has managed since May 1998. He also manages
another Fidelity fund. Additionally, Mr. Spreadbury is a director of
fixed income and a portfolio manager for Fidelity International
Limited (FIL). Prior to joining Fidelity in 1995, Mr. Spreadbury was a
senior fund manager with Legal & General, Limited, from 1981 to 1995.
The following information replaces the last paragraph found in the
"Fund Management" section on page 51.
For Advisor Value Strategies, the fee is determined by calculating a
basic fee and then applying a performance adjustment. The performance
adjustment decreases the management fee if the fund has performed
worse than the S&P 500. After December 31, 2000, no performance
adjustment will be applied to the basic fee.
For Advisor Growth Opportunities, the fee is determined by calculating
a basic fee and then applying a performance adjustment. The
performance adjustment either increases or decreases the management
fee, depending on how well the fund has performed relative to the S&P
500.
The following information replaces the seventh paragraph found in the
"Fund Management" section on page 52.
For Advisor Value Strategies, the performance adjustment rate is
divided by twelve and multiplied by the fund's average net assets
throughout the month, and the resulting dollar amount is subtracted
from the basic fee if the fund's performance over the performance
period is worse than that of the S&P 500. The maximum annualized
performance adjustment rate is -0.20% of the fund's average net assets
over the performance period.
For Advisor Growth Opportunities, the performance adjustment rate is
divided by twelve and multiplied by the fund's average net assets
throughout the month, and the resulting dollar amount is then added to
or subtracted from the basic fee. The maximum annualized performance
adjustment rate is (plus/minus)0.20% of the fund's average net assets
over the performance period.
The following information replaces similar information found in the
"Fund Distribution" section on page 53.
SALES CHARGES AND CONCESSIONS - CLASS A
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SHORT FIXED-INCOME FUND: Sales Charge Investment professional
concession as % of offering
price
As a % of offering price As an approximate % of net Investment professional
amount invested concession as % of offering
price
Up to $499,999 1.50% 1.52% 1.25%
$500,000 to $999,999 1.00% 1.01% 0.75%
$1,000,000 to $24,999,999 None* None* *
$25,000,000 or more None* None* *
</TABLE>
* SEE "FINDER'S FEE" SECTION ON PAGE 56.
The following information supplements similar information found in the
"Fund Distribution" section on page 55.
A front-end sales charge will not apply to the following Class A
shares:
10. Purchased by the Fidelity Investments Charitable Gift Fund.
The following information replaces similar information found in the
"Fund Distribution" section on page 56.
A front-end sales charge will not apply to the following Class T
shares:
10. Purchased by a charitable organization (as defined for purposes of
Section 501(c)(3) of the Internal Revenue Code, but excluding the
Fidelity Investments Charitable Gift Fund) investing $100,000 or more;
The following information supplements similar information found in the
"Fund Distribution" section on page 56.
A front-end sales charge will not apply to the following Class T
shares:
14. Purchased by the Fidelity Investments Charitable Gift Fund.
The following information replaces similar information found in the
"Financial Highlights" section on page 95.
ADVISOR INTERMEDIATE MUNICIPAL INCOME - CLASS B
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Selected Per-Share Data and
Ratios
Years ended November 30 1998G 1997 1996 1995 1994D
Net asset value, beginning $ 10.590 $ 10.410 $ 10.380 $ 9.400 $ 9.890
of period
Income from Investment
Operations
Net interest income .339 .382 .394 .373 .155
Net realized and .200 .181 .030 .980 (.490)
unrealized gain (loss)
Total from investment .539 .563 .424 1.353 (.335)
operations
Less Distributions
From net interest income (.339) (.382) (.394) (.373) (.155)
From net realized gain (.030) (.001) -- -- --
Total distributions (.369) (.383) (.394) (.373) (.155)
Net asset value, end of $ 10.760 $ 10.590 $ 10.410 $ 10.380 $ 9.400
period
Total returnB,C 5.17% 5.54% 4.21% 14.60% (3.44)%
Net assets, end of period $ 11,134 $ 7,917 $ 7,445 $ 6,226 $ 1,682
(000 omitted)
Ratio of expenses to 1.65%A,E 1.65%E 1.66%E 1.68%E 1.65%A,E
average net assets
Ratio of net interest 3.45%A 3.67% 3.76% 3.71% 3.74%A
income to average net assets
Portfolio turnover 26%A,F 18% 35% 53% 53%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE
AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D FOR THE PERIOD JUNE 30, 1994 (COMMENCEMENT OF SALE OF CLASS B
SHARES) TO NOVEMBER 30, 1994.
E FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
F THE PORTFOLIO TURNOVER RATE DOES NOT INCLUDE THE ASSETS ACQUIRED IN
THE MERGER.
G ELEVEN MONTHS ENDED OCTOBER 31
SUPPLEMENT TO THE
FIDELITY ADVISOR FUNDS(registered trademark)
INSTITUTIONAL CLASS
FEBRUARY 26,1999 PROSPECTUS
Effective the close of business on December 29, 1999, shares of
Advisor Intermediate Municipal Income Fund will no longer be available
for purchase except through the reinvestment of dividends and other
distributions by shareholders of the fund on December 29, 1999.
PROPOSED REORGANIZATION. The Board of Trustees of Fidelity
Advisor Series II has unanimously approved an Agreement and Plan of
Reorganization ("Agreement") between Advisor Intermediate Municipal
Income Fund and Advisor Municipal Income Fund.
The Agreement provides for the transfer of all of the assets and
the assumption of all of the liabilities of Advisor Intermediate
Municipal Income Fund solely in exchange for Class A, Class T, Class
B, Class C, and Institutional Class shares of Advisor Municipal Income
Fund equal in value to the relative net asset value of the outstanding
shares of Class A, Class T, Class B, Class C, and Institutional Class,
respectively, of Advisor Intermediate Municipal Income Fund. Following
such exchange, Advisor Intermediate Municipal Income Fund will
distribute the Advisor Municipal Income Fund shares to its
shareholders pro rata to the corresponding class, in liquidation of
Advisor Intermediate Municipal Income Fund as provided in the
Agreement (the transactions contemplated by the Agreement referred to
as the "Reorganization").
The Reorganization can be consummated only if, among other things,
it is approved by a "majority of the outstanding voting securities" of
the fund as that term is defined under the Investment Company Act of
1940. A Special Meeting (the "Meeting") of the Shareholders of Advisor
Intermediate Municipal Income Fund will be held on April 19, 2000, and
approval of the Agreement will be voted on at that time. In connection
with the Meeting, Advisor Intermediate Municipal Income Fund will be
filing with the Securities and Exchange Commission and delivering to
its shareholders of record a Proxy Statement describing the
Reorganization and a Prospectus for Advisor Municipal Income Fund.
If the Agreement is approved at the Meeting and certain conditions
required by the Agreement are satisfied, the Reorganization is
expected to become effective on or about May 25, 2000. If shareholder
approval of the Agreement is delayed due to failure to meet a quorum
or otherwise, the Reorganization will become effective, if approved,
as soon as practicable thereafter.
In the event Advisor Intermediate Municipal Income Fund
shareholders fail to approve the Agreement, Advisor Intermediate
Municipal Income Fund will continue to engage in business as a
registered investment company and the Board of Trustees will consider
other proposals for the reorganization or liquidation of Advisor
Intermediate Municipal Income Fund.
FIDELITY ADVISOR STRATEGIC OPPORTUNITIES FUND HAS BEEN RENAMED
FIDELITY ADVISOR VALUE STRATEGIES FUND. ALL REFERENCES TO ADVISOR
STRATEGIC OPPORTUNITIES THROUGHOUT THIS PROSPECTUS SHOULD BE REPLACED
WITH ADVISOR VALUE STRATEGIES.
The following information replaces similar information found in the
"Investment Summary" section beginning on page 3.
INVESTMENT OBJECTIVE
ADVISOR VALUE STRATEGIES FUND seeks capital appreciation.
PRINCIPAL INVESTMENT STRATEGIES
FMR's principal investment strategies include:
(small solid bullet) Investing primarily in common stocks.
(small solid bullet) Investing in securities of companies that FMR
believes are undervalued in the marketplace in relation to factors
such as assets, earnings or growth potential (stocks of these
companies are often called "value" stocks).
(small solid bullet) Focusing investments in medium-sized companies,
but may also invest substantially in larger or smaller companies.
(small solid bullet) Investing in domestic and foreign issuers.
(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.
PRINCIPAL INVESTMENT RISKS
The fund is subject to the following principal investment risks:
(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.
(small solid bullet) FOREIGN EXPOSURE. Foreign markets can be more
volatile than the U.S. market due to increased risks of adverse
issuer, political, regulatory, market or economic developments and can
perform differently than the U.S. market.
(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently than
the value of the market as a whole. The value of securities of smaller
issuers can be more volatile than that of larger issuers.
(small solid bullet) "VALUE" INVESTING. "Value" stocks can perform
differently than the market as a whole and other types of stocks and
can continue to be undervalued by the market for long periods of time.
An investment in the fund is not a deposit of a bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency.
When you sell your shares of the fund, they could be worth more or
less than what you paid for them.
The following information replaces similar information found in the
"Performance" section on page 11.
The following information illustrates the changes in the funds'
performance from year to year and compares the funds' performance to
the performance of a market index and an average of the performance of
similar funds over various periods of time. Each of Advisor Balanced
and Advisor Strategic Income may also compare its performance to the
performance of a combination of market indexes over various periods of
time. Each of Advisor Intermediate Municipal Income, Advisor Equity
Income and Advisor Equity Growth may also compare their performance to
the performance of an additional index over various periods of time.
Data for the additional index for Advisor Intermediate Municipal
Income is available only from June 30, 1993 to the present. Prior to
July 1, 1999, Advisor Value Strategies operated under certain
different investment policies. Accordingly, the fund's historical
performance may not represent its current investment policies. Returns
are based on past results and are not an indication of future
performance.
The following information replaces similar information found under the
heading "Average Annual Returns" in the "Performance" section on page
18.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
For the periods ended Past 1 year Past 5 years Past 10 years/ Life of class*
December 31, 1998
ADVISOR VALUE STRATEGIES 1.12% n/a 9.16%B
S&P 500 28.58% n/a 28.23%B
Russell MidCap Value Index 5.08% n/a 19.30%B
Lipper Capital Appreciation 19.96% n/a 16.12%B
Funds Average
</TABLE>
* BEGINNING JANUARY 1 OF THE FIRST CALENDAR YEAR FOLLOWING THE CLASS'S
COMMENCEMENT OF OPERATIONS.
B FROM JANUARY 1, 1996.
The following information replaces similar information found under the
heading "Average Annual Returns" in the "Performance" section on page
19.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
For the periods ended Past 1 year Past 5 years Past 10 years/ Life of class*
December 31, 1998
ADVISOR HIGH YIELD -0.18% n/a 9.23%A
Merrill Lynch High Yield 3.66% n/a 9.11%A
Master Index
Merrill Lynch High Yield 2.95% n/a 9.07%A
Master II Index
Lipper High Current Yield -0.44% n/a 8.21%A
Funds Average
ADVISOR STRATEGIC INCOME 2.49% n/a 8.21%A
Merrill Lynch High Yield 3.66% n/a 9.11%A
Master Index
Merrill Lynch High Yield 2.95% n/a 9.10%A
Master II Index
Lipper Multi-Sector Income 1.30% n/a 6.92%A
Funds Average
Fidelity Strategic Income 5.43% n/a 8.75%A
Composite Index
</TABLE>
* BEGINNING JANUARY 1 OF THE FIRST CALENDAR YEAR FOLLOWING THE CLASS'S
COMMENCEMENT OF OPERATIONS.
A FROM JANUARY 1, 1996.
Fidelity Strategic Income Composite Index is a hypothetical
representation of the performance of Advisor Strategic Income's four
general investment categories according to their respective weighting
in the fund's neutral mix (40% high yield, 30% U.S. Government and
investment-grade, 15% foreign developed markets and 15% emerging
markets). The following indexes are used to calculate the Composite
Index: high yield - the Merrill Lynch High Yield Master II Index, U.S.
Government and investment-grade - the Lehman Brothers Government Bond
Index, foreign developed markets - the Salomon Brothers Non-U.S.
Dollar World Government Bond Index, emerging markets - the J.P. Morgan
Emerging Markets Bond Index Plus. The index weightings of the
Composite Index are rebalanced monthly.
The following information supplements the information found under the
heading "Average Annual Returns" in the "Performance" section on page
20.
Going forward, Advisor Value Strategies' performance will be compared
to the Russell MidCap Value Index rather than the S&P 500. The Russell
MidCap Value Index more closely reflects the fund's investment
strategy.
Russell MidCap Value Index is a market capitalization-weighted index
of medium capitalization value-oriented stocks of U.S. corporations.
Going forward, Advisor High Yield's and Advisor Strategic Income's
performance will be compared to the Merrill Lynch High Yield Master II
Index rather than the Merrill Lynch High Yield Master Index because
the Merrill Lynch High Yield Master II Index contains deferred
interest bonds and payment-in-kind securities and is therefore a
better representation of the high yield bond universe.
Merrill Lynch High Yield Master II Index is a market value-weighted
index of all domestic and yankee high-yield bonds, including deferred
interest bonds and payment-in-kind securities. Issues included in the
index have maturities of one year or more and have a credit rating
lower than BBB-/Baa3, but are not in default.
The following information replaces similar information found in the
"Investment Details" section beginning on page 28.
INVESTMENT OBJECTIVE
ADVISOR VALUE STRATEGIES FUND seeks capital appreciation.
PRINCIPAL INVESTMENT STRATEGIES
FMR normally invests the fund's assets primarily in common stocks.
FMR focuses on securities of companies that it believes are
undervalued in the marketplace in relation to factors such as the
company's assets, earnings or growth potential. The stocks of these
companies are often called "value" stocks.
Although FMR focuses on investing the fund's assets in securities
issued by medium-sized companies, FMR may also make substantial
investments in securities issued by larger or smaller companies.
FMR may invest the fund's assets in securities of foreign issuers in
addition to securities of domestic issuers.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions. Factors considered include growth
potential, earnings estimates and management.
FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.
The following information replaces similar information found under the
heading "Principal Investment Risks" in the "Investment Details"
section on page 37.
FOREIGN EXPOSURE. Foreign securities, foreign currencies, and
securities issued by U.S. entities with substantial foreign operations
can involve additional risks relating to political, economic or
regulatory conditions in foreign countries. These risks include
fluctuations in foreign currencies; withholding or other taxes;
trading, settlement, custodial and other operational risks; and the
less stringent investor protection and disclosure standards of some
foreign markets. For example, many foreign countries are less prepared
than the United States to properly process and calculate information
related to dates from and after January 1, 2000, which could result in
difficulty pricing foreign investments and failure by foreign issuers
to pay timely dividends, interest or principal. All of these factors
can make foreign investments, especially those in emerging markets,
more volatile and potentially less liquid than U.S. investments. In
addition, foreign markets can perform differently than the U.S.
market.
The following information replaces similar information found under the
heading "Fundamental Investment Policies" in the "Investment Details"
section on page 37.
ADVISOR VALUE STRATEGIES FUND seeks capital appreciation.
The following information replaces similar information found in the
"Fund Management" section beginning on page 46.
John Carlson is vice president and lead manager of Advisor Strategic
Income, which he has managed since August 1995. Other Fidelity
investment professionals assist Mr. Carlson in selecting investments
for the fund. He also manages other Fidelity funds. Prior to joining
Fidelity in 1995, Mr. Carlson was executive director of emerging
markets at Lehman Brothers International from 1992 through 1995.
Margaret Eagle is vice president and manager of Advisor High Yield,
which she has managed since January 1987. Additionally, she is a
senior vice president of Fidelity Trust Company. Since joining
Fidelity in 1980, Ms. Eagle has been an analyst and portfolio manager.
David Felman is vice president and manager of Advisor Mid Cap, which
he has managed since August 1999. He also manages other Fidelity
funds. Mr. Felman joined Fidelity as an analyst in 1993.
Kevin Grant is vice president and manager of Advisor Balanced and
Advisor Intermediate Bond, which he has managed since March 1996 and
October 1995, respectively. Mr. Grant manages the fixed-income
investments for Advisor Balanced. He also manages several other
Fidelity funds. Prior to joining Fidelity in 1993, Mr. Grant was vice
president and chief mortgage strategist at Morgan Stanley for three
years.
The following information found in the "Fund Management" section on
page 47 is no longer applicable.
Ian Spreadbury is manager of Advisor Strategic Income's foreign bond
investments, which he has managed since May 1998. He also manages
another Fidelity fund. Additionally, Mr. Spreadbury is a director of
fixed income and a portfolio manager for Fidelity International
Limited (FIL). Prior to joining Fidelity in 1995, Mr. Spreadbury was a
senior fund manager with Legal & General, Limited, from 1981 to 1995.
The following information replaces the fourth paragraph found in the
"Fund Management" section on page 48.
For Advisor Value Strategies, the fee is determined by calculating a
basic fee and then applying a performance adjustment. The performance
adjustment decreases the management fee if the fund has performed
worse than the S&P 500. After December 31, 2000, no performance
adjustment will be applied to the basic fee.
For Advisor Growth Opportunities, the fee is determined by calculating
a basic fee and then applying a performance adjustment. The
performance adjustment either increases or decreases the management
fee, depending on how well the fund has performed relative to the S&P
500.
The following information replaces the twelfth paragraph found in the
"Fund Management" section on page 48.
For Advisor Value Strategies, the performance adjustment rate is
divided by twelve and multiplied by the fund's average net assets
throughout the month, and the resulting dollar amount is subtracted
from the basic fee if the fund's performance over the performance
period is worse than that of the S&P 500. The maximum annualized
performance adjustment rate is - 0.20% of the fund's average net
assets over the performance period.
For Advisor Growth Opportunities, the performance adjustment rate is
divided by twelve and multiplied by the fund's average net assets
throughout the month, and the resulting dollar amount is then added to
or subtracted from the basic fee. The maximum annualized performance
adjustment rate is (plus/minus)0.20% of the fund's average net assets
over the performance period.
The following information replaces similar information found in the
"Financial Highlights" section on page 59.
ADVISOR INTERMEDIATE MUNICIPAL INCOME
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Selected Per-Share Data
and Ratios
Years ended November 30 1998G 1997 1996 1995 1994 1993
Net asset value, beginning $ 10.590 $ 10.410 $ 10.360 $ 9.410 $ 10.460 $ 11.080
of period
Income from Investment
Operations
Net interest income .427 .475 .487 .477 .481 .536
Net realized and .210 .181 .050 .950 (1.030) .260
unrealized gain (loss)
Total from investment .637 .656 .537 1.427 (.549) .796
operations
Less Distributions
From net interest income (.427) (.475) (.487) (.477) (.481) (.536)
From net realized gain (.030) (.001) -- -- -- (.880)
In excess of net realized -- -- -- -- (.020) --
gain
Total distributions (.457) (.476) (.487) (.477) (.501) (1.416)
Net asset value, end of $ 10.770 $ 10.590 $ 10.410 $ 10.360 $ 9.410 $ 10.460
period
Total returnB,C 6.14% 6.48% 5.36% 15.44% (5.43)% 8.01%
Net assets, end of period $ 6,328 $ 6,098 $ 6,455 $ 11,085 $ 11,702 $ 15,076
(000 omitted)
Ratio of expenses to .75%A,D .75%D .75%D .70%D .65%D .65%D
average net assets
Ratio of expenses to .75%A .75% .74%E .70% .65% .65%
average net assets after
expense reductions
Ratio of net interest 4.36%A 4.57% 4.68% 4.96% 4.75% 5.01%
income to average net assets
Portfolio turnover 26%A,F 18% 35% 53% 53% 46%
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
D FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
E FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
F THE PORTFOLIO TURNOVER RATE DOES NOT INCLUDE THE ASSETS ACQUIRED IN
THE MERGER.
G ELEVEN MONTHS ENDED OCTOBER 31
The following information replaces similar information found on the
back cover.
Fidelity Advisor Funds, Fidelity Investments & (Pyramid) Design,
Fidelity, Fidelity Investments, and Directed Dividends are registered
trademarks of FMR Corp.
TechnoQuant and Portfolio Advisory Services are service marks of FMR
Corp.
