FIDELITY(REGISTERED TRADEMARK) ADVISOR
GROWTH & INCOME
FUND - CLASS A, CLASS T, CLASS B AND CLASS C
SEMIANNUAL REPORT
MAY 31, 2000
(2_FIDELITY_LOGOS)(registered trademark)
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 25 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 34 Notes to the financial
statements.
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 technology sell-off that began in mid-March continued to hamper
equity markets, driving the tech-heavy NASDAQ index down more than 16%
year to date through the end of May. Broader equity indexes, including
the S&P 500(registered trademark), also were down, but not as much as
more concentrated performance measures. In bond markets, Treasuries
got a boost late in the period as economic reports showed the first
signs of a slowing economy.
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 an investment in a money market fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although money market funds seek to preserve the
value of your investment at $1.00 per share, it is possible to lose
money by investing in these types of funds.
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 PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
FIDELITY ADV GROWTH & INCOME 2.72% 10.79% 93.60%
- CL A
FIDELITY ADV GROWTH & INCOME -3.19% 4.41% 82.46%
- CL A (INCL. 5.75% SALES
CHARGE)
S&P 500 (registered trademark) 2.90% 10.48% 101.71%
Growth & Income Funds Average 3.86% 6.10% n/a
CUMULATIVE TOTAL RETURNS show Class A's performance in percentage
terms over a set period - in this case, six months, 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 500SM 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 and income funds average, which reflects the performance
of mutual funds with similar objectives tracked by Lipper Inc. The
past six month average represents a peer group of 1,008 mutual funds.
These benchmarks include reinvested dividends and capital gains, if
any, and exclude the effect of sales charges. Lipper has created new
comparison categories that group funds according to portfolio
characteristics and capitalization, as well as by capitalization only.
These averages are listed on page 5 of this report.*
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 YEAR LIFE OF FUND
FIDELITY ADV GROWTH & INCOME 10.79% 21.33%
- CL A
FIDELITY ADV GROWTH & INCOME 4.41% 19.25%
- CL A (INCL. 5.75% SALES
CHARGE)
S&P 500 10.48% 22.80%
Growth & Income Funds Average 6.10% 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
1998/12/31 15747.32 17147.40
1999/01/31 16277.37 17864.50
1999/02/28 15968.98 17309.27
1999/03/31 16662.87 18001.82
1999/04/30 17029.08 18699.03
1999/05/31 16470.12 18257.54
1999/06/30 17416.18 19270.84
1999/07/31 16875.55 18669.20
1999/08/31 16653.50 18576.79
1999/09/30 16276.99 18067.60
1999/10/31 17030.01 19210.91
1999/11/30 17763.73 19601.47
1999/12/31 19713.88 20756.00
2000/01/31 18816.04 19713.22
2000/02/29 19472.53 19340.05
2000/03/31 20331.75 21232.08
2000/04/30 19153.94 20593.21
2000/05/31 18246.44 20170.64
IMATRL PRASUN SHR__CHT 20000531 20000621 152336 R00000000000044
$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 May 31, 2000, the value of the
investment would have grown to $18,246 - an 82.46% 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
$20,171 - a 101.71% increase.
(checkmark)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.
* THE LIPPER LARGE-CAP VALUE FUNDS AVERAGE REFLECTS THE PERFORMANCE
(EXCLUDING SALES CHARGES) OF MUTUAL FUNDS WITH SIMILAR PORTFOLIO
CHARACTERISTICS AND CAPITALIZATION. THE LIPPER LARGE-CAP SUPERGROUP
AVERAGE REFLECTS THE PERFORMANCE (EXCLUDING SALES CHARGES) OF MUTUAL
FUNDS WITH SIMILAR CAPITALIZATION. AS OF MAY 31, 2000, THE SIX MONTH
AND ONE YEAR CUMULATIVE TOTAL RETURNS FOR LARGE-CAP VALUE FUNDS
AVERAGE WERE, 2.37% AND 4.15%, RESPECTIVELY. THE ONE YEAR AVERAGE
ANNUAL TOTAL RETURN WAS 4.15%. THE SIX MONTH AND ONE YEAR CUMULATIVE
TOTAL RETURNS FOR THE LARGE-CAP SUPERGROUP AVERAGE WERE, 5.14% AND
15.76%, RESPECTIVELY. THE ONE YEAR AVERAGE ANNUAL TOTAL RETURN WAS
15.76%.
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 PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
FIDELITY ADV GROWTH & INCOME 2.61% 10.55% 92.28%
- CL T
FIDELITY ADV GROWTH & INCOME -0.98% 6.68% 85.55%
- CL T (INCL. 3.50% SALES
CHARGE)
S&P 500 2.90% 10.48% 101.71%
Growth & Income Funds Average 3.86% 6.10% n/a
CUMULATIVE TOTAL RETURNS show Class T's performance in percentage
terms over a set period - in this case, six months, 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
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 Inc. The
past six months average represents a peer group of 1,008 mutual funds.
These benchmarks include reinvested dividends and capital gains, if
any, and exclude the effect of sales charges. Lipper has created new
comparison categories that group funds according to portfolio
characteristics and capitalization, as well as by capitalization only.
These averages are listed on page 7 of this report.*
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 YEAR LIFE OF FUND
FIDELITY ADV GROWTH & INCOME 10.55% 21.09%
- CL T
FIDELITY ADV GROWTH & INCOME 6.68% 19.83%
- CL T (INCL. 3.50% SALES
CHARGE)
S&P 500 10.48% 22.80%
Growth & Income Funds Average 6.10% 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
1998/12/31 16056.48 17147.40
1999/01/31 16587.76 17864.50
1999/02/28 16272.93 17309.27
1999/03/31 16991.14 18001.82
1999/04/30 17355.16 18699.03
1999/05/31 16784.53 18257.54
1999/06/30 17739.41 19270.84
1999/07/31 17188.13 18669.20
1999/08/31 16961.71 18576.79
1999/09/30 16567.94 18067.60
1999/10/31 17335.79 19210.91
1999/11/30 18083.96 19601.47
1999/12/31 20062.66 20756.00
2000/01/31 19137.30 19713.22
2000/02/29 19806.71 19340.05
2000/03/31 20673.01 21232.08
2000/04/30 19472.00 20593.21
2000/05/31 18555.40 20170.64
IMATRL PRASUN SHR__CHT 20000531 20000621 152542 R00000000000044
$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 May 31, 2000, the value of the
investment would have grown to $18,555 - an 85.55% 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
$20,171 - a 101.71% increase.
(checkmark)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.
* THE LIPPER LARGE-CAP VALUE FUNDS AVERAGE REFLECTS THE PERFORMANCE
(EXCLUDING SALES CHARGES) OF MUTUAL FUNDS WITH SIMILAR PORTFOLIO
CHARACTERISTICS AND CAPITALIZATION. THE LIPPER LARGE-CAP SUPERGROUP
AVERAGE REFLECTS THE PERFORMANCE (EXCLUDING SALES CHARGES) OF MUTUAL
FUNDS WITH SIMILAR CAPITALIZATION. AS OF MAY 31, 2000, THE SIX MONTH
AND ONE YEAR CUMULATIVE TOTAL RETURNS
FOR LARGE-CAP VALUE FUNDS AVERAGE WERE, 2.37% AND 4.15%, RESPECTIVELY.
THE ONE YEAR AVERAGE ANNUAL TOTAL RETURN WAS 4.15%. THE SIX MONTH AND
ONE YEAR CUMULATIVE TOTAL RETURNS FOR THE LARGE-CAP SUPERGROUP AVERAGE
WERE, 5.14% AND 15.76%, RESPECTIVELY. THE ONE YEAR AVERAGE ANNUAL
TOTAL RETURN WAS 15.76%.
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 six month, past one year and life of fund total return
figures are 5%, 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 PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
FIDELITY ADV GROWTH & INCOME 2.31% 9.92% 88.88%
- CL B
FIDELITY ADV GROWTH & INCOME -2.69% 4.92% 85.88%
- CL B (INCL. CONTINGENT
DEFERRED SALES CHARGE)
S&P 500 2.90% 10.48% 101.71%
Growth & Income Funds Average 3.86% 6.10% n/a
CUMULATIVE TOTAL RETURNS show Class B's performance in percentage
terms over a set period - in this case, six months, 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
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 Inc. The
past six months average represents a peer group of 1,008 mutual funds.
These benchmarks include reinvested dividends and capital gains, if
any, and exclude the effect of sales charges. Lipper has created new
comparison categories that group funds according to portfolio
characteristics and capitalization, as well as by capitalization only.
These averages are listed on page 9 of this report.*
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 YEAR LIFE OF FUND
FIDELITY ADV GROWTH & INCOME 9.92% 20.46%
- CL B
FIDELITY ADV GROWTH & INCOME 4.92% 19.89%
- CL B (INCL. CONTINGENT
DEFERRED SALES CHARGE)
S&P 500 10.48% 22.80%
Growth & Income Funds Average 6.10% 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 15203.76 16213.19
1998/12/31 16462.28 17147.40
1999/01/31 17010.34 17864.50
1999/02/28 16675.41 17309.27
1999/03/31 17406.17 18001.82
1999/04/30 17771.55 18699.03
1999/05/31 17182.88 18257.54
1999/06/30 18147.07 19270.84
1999/07/31 17578.71 18669.20
1999/08/31 17335.12 18576.79
1999/09/30 16929.15 18067.60
1999/10/31 17710.65 19210.91
1999/11/30 18461.70 19601.47
1999/12/31 20471.28 20756.00
2000/01/31 19527.39 19713.22
2000/02/29 20197.25 19340.05
2000/03/31 21070.09 21232.08
2000/04/30 19842.02 20593.21
2000/05/31 18588.00 20170.64
IMATRL PRASUN SHR__CHT 20000531 20000621 153007 R00000000000044
$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 May
31, 2000, the value of the investment, including the effect of the
applicable contingent deferred sales charge, would have grown to
$18,588 - an 85.88% 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 $20,171 - a 101.71%
increase.
(checkmark)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.
* THE LIPPER LARGE-CAP VALUE FUNDS AVERAGE REFLECTS THE PERFORMANCE
(EXCLUDING SALES CHARGES) OF MUTUAL FUNDS WITH SIMILAR PORTFOLIO
CHARACTERISTICS AND CAPITALIZATION. THE LIPPER LARGE-CAP SUPERGROUP
AVERAGE REFLECTS THE PERFORMANCE (EXCLUDING SALES CHARGES) OF MUTUAL
FUNDS WITH SIMILAR CAPITALIZATION. AS OF MAY 31, 2000, THE SIX MONTH
AND ONE YEAR CUMULATIVE TOTAL RETURNS
FOR LARGE-CAP VALUE FUNDS AVERAGE WERE 2.37% AND 4.15%, RESPECTIVELY.
THE ONE YEAR AVERAGE ANNUAL TOTAL RETURN WAS 4.15%. THE SIX MONTH AND
ONE YEAR CUMULATIVE TOTAL RETURNS FOR THE LARGE-CAP SUPERGROUP AVERAGE
WERE, 5.14% AND 15.76%, RESPECTIVELY. THE ONE YEAR AVERAGE ANNUAL
TOTAL RETURN WAS 15.76%.
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 charges included in the past six
month, past one year and life of fund total return figures are 1%, 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 PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
FIDELITY ADV GROWTH & INCOME 2.36% 9.98% 88.66%
- CL C
FIDELITY ADV GROWTH & INCOME 1.36% 8.98% 88.66%
- CL C (INCL. CONTINGENT
DEFERRED SALES CHARGE)
S&P 500 2.90% 10.48% 101.71%
Growth & Income Funds Average 3.86% 6.10% n/a
CUMULATIVE TOTAL RETURNS show Class C's performance in percentage
terms over a set period - in this case, six months, 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
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 Inc. The
past six months average represents a peer group of 1,008 mutual funds.
These benchmarks include reinvested dividends and capital gains, if
any, and exclude the effect of sales charges. Lipper has created new
comparison categories that group funds according to portfolio
characteristics and capitalization, as well as by capitalization only.
These averages are listed on page 11 of this report.*
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 YEAR LIFE OF FUND
FIDELITY ADV GROWTH & INCOME 9.98% 20.42%
- CL C
FIDELITY ADV GROWTH & INCOME 8.98% 20.42%
- CL C (INCL. CONTINGENT
DEFERRED SALES CHARGE)
S&P 500 10.48% 22.80%
Growth & Income Funds Average 6.10% 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
1998/12/31 16434.55 17147.40
1999/01/31 16981.69 17864.50
1999/02/28 16647.33 17309.27
1999/03/31 17366.72 18001.82
1999/04/30 17741.61 18699.03
1999/05/31 17153.94 18257.54
1999/06/30 18116.51 19270.84
1999/07/31 17549.10 18669.20
1999/08/31 17305.93 18576.79
1999/09/30 16900.63 18067.60
1999/10/31 17680.82 19210.91
1999/11/30 18430.61 19601.47
1999/12/31 20436.80 20756.00
2000/01/31 19494.50 19713.22
2000/02/29 20163.23 19340.05
2000/03/31 21034.60 21232.08
2000/04/30 19808.60 20593.21
2000/05/31 18866.30 20170.64
IMATRL PRASUN SHR__CHT 20000531 20000621 153343 R00000000000044
$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 May
31, 2000, the value of the investment, would have grown to $18,866 -
an 88.66% 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 $20,171 - a 101.71% increase.
(checkmark)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.
* THE LIPPER LARGE-CAP VALUE FUNDS AVERAGE REFLECTS THE PERFORMANCE
(EXCLUDING SALES CHARGES) OF MUTUAL FUNDS WITH SIMILAR PORTFOLIO
CHARACTERISTICS AND CAPITALIZATION. THE LIPPER LARGE-CAP SUPERGROUP
AVERAGE REFLECTS THE PERFORMANCE (EXCLUDING SALES CHARGES) OF MUTUAL
FUNDS WITH SIMILAR CAPITALIZATION. AS OF MAY 31, 2000, THE SIX MONTH
AND ONE YEAR CUMULATIVE TOTAL RETURNS
FOR LARGE-CAP VALUE FUNDS AVERAGE WERE, 2.37% AND 4.15%, RESPECTIVELY.
THE ONE YEAR AVERAGE ANNUAL TOTAL RETURN WAS 4.15%. THE SIX MONTH AND
ONE YEAR CUMULATIVE TOTAL RETURNS FOR THE LARGE-CAP SUPERGROUP AVERAGE
WERE, 5.14% AND 15.76%, RESPECTIVELY. THE ONE YEAR AVERAGE ANNUAL
TOTAL RETURN WAS 15.76%.
FUND TALK: THE MANAGERS' OVERVIEW
MARKET RECAP
U.S. equity investors faced a steadily
declining market during the latter
part of the six-month period that
ended May 31, 2000, after
experiencing continued growth the
prior three months. Two chief
catalysts - a tightening of monetary
policy by the Federal Reserve Board
and the bursting of a speculative
bubble in technology stocks -
sparked a sustained pullback among
the major U.S. equity indexes that
began in March. The tech-heavy
NASDAQ Composite Index reached
a high of 5048 on March 10 before
quickly retreating below the 4000
level. The NASDAQ dropped to
3401 on the final day of the period,
gaining a modest 2.05% return for
the six-month period. The Standard
& Poor's 500SM Index - an index
of 500 widely held stocks - fared
slightly better in returning 2.90%.
Another index of well-established
stocks - the blue chips' Dow Jones
Industrial Average - surged higher
during the NASDAQ's sharp
plummet in April, but the brief rally
wasn't enough to significantly offset
earlier losses, and the Dow returned
-2.55% for the period. The Russell
2000(Registered trademark) Index - a barometer of
small-cap stocks - outperformed the
major indexes of larger companies
with a 5.50% return. As the period
drew to a close, weaker trading
volume suggested investors were
mixed about the direction of U.S.
stocks, and whether the three
interest-rate hikes levied by the
Fed during the period had begun
to cool off the overheated economy.
(photograph of Beth Terrana)(photograph of John Avery)
NOTE TO SHAREHOLDERS:
The following is an interview with Beth Terrana, who managed Fidelity
Advisor Growth & Income Fund during the period covered by this report,
with additional comments from John Avery, who became manager of the
fund on June 1, 2000.
Q. HOW DID THE FUND PERFORM, BETH?
B.T. For the six-month period ending May 31, 2000, the fund's Class A,
Class T, Class B and Class C shares returned 2.72%, 2.61%, 2.31% and
2.36%, respectively. Comparatively, the Standard & Poor's 500 Index
returned 2.90% during the same period, while the growth & income funds
average tracked by Lipper Inc. returned 3.86%. On a 12-month basis,
the fund's Class A, Class T, Class B and Class C shares returned
10.79%, 10.55%, 9.92% and 9.98%, respectively. Meanwhile, the S&P 500
gained 10.48% during the past year, and the growth & income funds
average returned 6.10%.
Q. WHAT FACTORS INFLUENCED THE FUND'S PERFORMANCE DURING THE PERIOD?
B.T. It was an exceptionally volatile period, which at various times
either enhanced the fund's returns or detracted from performance.
Early in the period, I increased the fund's exposure to technology and
telecommunications stocks. That's where I felt the market offered the
best prospects for long-term growth given the rapid penetration of
Internet and wireless technology. Initially, this strategy worked very
well as the fund soundly outperformed its Lipper peers and the S&P 500
in December, January and February. Beginning in March, however, when
the fund's technology weighting was at its peak, new economy stocks
experienced a severe correction that lasted through the remainder of
the period. When all was said and done, the fund's returns were pretty
much in line with the S&P 500's, and just slightly below our growth &
income peers, which on average were not as aggressive in their
technology exposure.
Q. OVERALL, WHAT WERE THE BEST CONTRIBUTORS TO PERFORMANCE?
B.T. Several health care stocks did well. Major pharmaceutical player
Warner-Lambert, whose stock reached record highs as the target of a
takeover battle between American Home Products and Pfizer, was a top
performer, as were Schering-Plough and Eli Lilly. Biotechnology
holding Genentech, which uses human genetic information to discover
and develop pharmaceuticals for various medical needs, also added to
returns. Underweighting the poorly performing nondurables sector was
another significant contributor to performance. Nondurables are
extremely interest-rate sensitive, so by holding a roughly one-third
market weighting in this sector, the fund was able to avoid most of
the damage from the losses incurred by Procter & Gamble and Coca-Cola.
Q. WHAT OTHER STOCKS ADDED TO THE FUND'S POSITIVE RETURNS?
B.T. Nokia was the fund's strongest individual performer, as demand
for all things wireless boosted the company's mobile handset business.
Fund holdings Texas Instruments, Cisco and EMC also reaped the
benefits of the continued wireless communications and Internet
build-out. General Electric, the fund's largest individual position,
was the second-best contributor. Its revenues for the first quarter of
2000 were up 25%, reflecting strong growth across all of its
divisions, and the company continued to deliver steady, 13% to 16%
earnings-per-share growth quarter after quarter.
Q. WHAT STOCKS DETRACTED FROM PERFORMANCE?
B.T. Microsoft and Lucent Technologies were the primary
disappointments. Microsoft saw its stock price fall from a high of
around $120 per share to as low as $60 on the heels of the
government's unfavorable antitrust ruling and subsequent plans to
split up the company. Lucent also struggled as the company
underestimated demand for bandwidth. Bristol-Myers Squibb's share
price fell 23% on April 19 when the company announced its withdrawal
of a new blood pressure drug from FDA approval due to potentially
dangerous side effects.
Q. JOHN, WHAT'S YOUR OUTLOOK?
J.A. I'm bullish overall, as business remains strong in many areas of
the economy, although I temper that enthusiasm with concern about
interest rates rising further. The Fed has made its position quite
clear that if it hasn't slowed the economy yet, it most assuredly will
do so in the coming months. In this environment, I firmly believe that
revenue and earnings will take center stage in the marketplace. As
such, the companies capable of delivering robust top-line growth and,
thus, strong earnings should be the ones to reap the rewards. Given
the extent to which technology and the Internet have transformed the
global landscape, I expect we'll see strong performance from this
sector going forward.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGERS ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER AND DO NOT NECESSARILY REPRESENT THE VIEWS OF FIDELITY OR
ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH VIEWS ARE
SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER CONDITIONS
AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE
VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE
INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS
FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY FIDELITY FUND.
(checkmark)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 May 31, 2000,
more than $2.7 billion
MANAGER: John Avery, since
June 2000; manager, Fidelity
Advisor Balanced Fund, since
1998; joined Fidelity in
1995
JOHN AVERY ON
MANAGING FIDELITY ADVISOR
GROWTH & INCOME FUND:
"This is my third year running funds
in the Advisor channel, having
managed Fidelity Advisor Balanced
Fund since 1998. But before I talk
about my management style, I'd first
like to say that it's an honor to
succeed Beth Terrana as manager
of this fund. She was my first formal
mentor when I joined the firm in
1995, and she's been my biggest
informal mentor over the past
couple of years.
"Stylistically, Beth and I are very
similar. Bottom line, investors
shouldn't expect a lot of big changes.
The top 20 stocks aren't going to
look a lot different. The biggest
thing I plan to do on a near-term
basis is cut back on the fund's
investments in Japan. Other than
that I think it will be pretty
consistent.
"Longer term, I may take down a
few of the fund's NASDAQ
positions. Relative to the fund's
growth & income peers, Beth was
probably a bit more aggressive
than I will be. However, I still plan to
be more aggressive than the average
peer fund, particularly in
technology. On a performance basis,
my technology weighting will likely
differentiate this fund from its
peers. My primary objective,
however, is to beat the S&P 500,
without entailing a tremendous
amount of risk."
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF MAY 31,
2000
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
General Electric Co. 5.7 4.2
Cisco Systems, Inc. 3.3 1.9
Intel Corp. 2.6 0.2
Exxon Mobil Corp. 2.3 1.7
Texas Instruments, Inc. 2.1 1.6
Warner-Lambert Co. 2.1 1.0
American Express Co. 2.0 1.6
Schering-Plough Corp. 1.8 1.7
Citigroup, Inc. 1.8 1.8
Viacom, Inc. Class B (non-vtg.) 1.8 1.0
25.5 16.7
TOP FIVE MARKET SECTORS AS OF
MAY 31, 2000
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Technology 30.8 25.3
Finance 12.8 10.6
Utilities 10.1 10.5
Health 9.3 12.0
Media & Leisure 7.6 10.6
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
ASSET ALLOCATION (% OF FUND'S
NET ASSETS)
AS OF MAY 31, 2000 * AS OF NOVEMBER 30, 1999 **
Stocks 93.5% Stocks 97.7%
Convertible Securities 1.3% Convertible Securities 0.9%
Short-Term Investments and Short-Term Investments and
Net Other Assets 5.2% Net Other Assets 1.4%
* FOREIGN INVESTMENTS 6.8% ** FOREIGN INVESTMENTS 12.75%
Row: 1, Col: 1, Value: 93.5 Row: 1, Col: 1, Value: 97.7
Row: 1, Col: 2, Value: 0.0 Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 0.0 Row: 1, Col: 3, Value: 0.0
Row: 1, Col: 4, Value: 1.3 Row: 1, Col: 4, Value: 0.9
Row: 1, Col: 5, Value: 0.0 Row: 1, Col: 5, Value: 0.0
Row: 1, Col: 6, Value: 0.0 Row: 1, Col: 6, Value: 0.0
Row: 1, Col: 7, Value: 0.0 Row: 1, Col: 7, Value: 0.0
Row: 1, Col: 8, Value: 5.2 Row: 1, Col: 8, Value: 1.4
</TABLE>
INVESTMENTS MAY 31, 2000 (UNAUDITED)
Showing Percentage of Net Assets
<TABLE>
<CAPTION>
<S> <C> <C> <C>
COMMON STOCKS - 93.5%
SHARES VALUE (NOTE 1) (000S)
AEROSPACE & DEFENSE - 0.8%
AEROSPACE & DEFENSE - 0.5%
Boeing Co. 209,900 $ 8,199
Textron, Inc. 68,100 4,273
12,472
SHIP BUILDING & REPAIR - 0.3%
General Dynamics Corp. 149,100 8,806
TOTAL AEROSPACE & DEFENSE 21,278
BASIC INDUSTRIES - 1.0%
CHEMICALS & PLASTICS - 0.8%
E.I. du Pont de Nemours and 200,800 9,839
Co.
Praxair, Inc. 247,300 10,387
20,226
METALS & MINING - 0.2%
Alcoa, Inc. 103,700 6,060
TOTAL BASIC INDUSTRIES 26,286
DURABLES - 1.0%
AUTOS, TIRES, & ACCESSORIES -
0.5%
Danaher Corp. 147,200 7,093
Delphi Automotive Systems 351,400 6,347
Corp.
General Motors Corp. 14,418 1,018
14,458
CONSUMER ELECTRONICS - 0.5%
General Motors Corp. Class H 82,990 8,169
(a)
Sony Corp. 43,600 3,976
12,145
TOTAL DURABLES 26,603
ENERGY - 7.0%
ENERGY SERVICES - 1.5%
Diamond Offshore Drilling, 233,200 9,532
Inc.
Halliburton Co. 198,300 10,113
Nabors Industries, Inc. (a) 244,300 10,505
Schlumberger Ltd. (NY Shares) 130,100 9,570
39,720
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
ENERGY - CONTINUED
OIL & GAS - 5.5%
BP Amoco PLC sponsored ADR 316,754 $ 17,223
Burlington Resources, Inc. 229,900 10,518
Chevron Corp. 142,700 13,191
Conoco, Inc. Class B 697,100 19,867
Exxon Mobil Corp. 758,753 63,214
Royal Dutch Petroleum Co. (NY 400,500 25,006
Shares)
149,019
TOTAL ENERGY 188,739
FINANCE - 12.8%
BANKS - 2.6%
Bank of America Corp. 215,100 11,951
Bank of New York Co., Inc. 593,600 27,862
Chase Manhattan Corp. 400,100 29,882
69,695
CREDIT & OTHER FINANCE - 4.0%
American Express Co. 1,008,300 54,259
Associates First Capital 136,100 3,734
Corp. Class A
Citigroup, Inc. 800,625 49,789
107,782
FEDERAL SPONSORED CREDIT - 1.7%
Fannie Mae 355,900 21,398
Freddie Mac 578,400 25,739
47,137
INSURANCE - 2.0%
AFLAC, Inc. 142,300 7,355
American International Group, 430,387 48,445
Inc.
55,800
SECURITIES INDUSTRY - 2.5%
Charles Schwab Corp. 357,750 10,285
Merrill Lynch & Co., Inc. 241,300 23,798
Morgan Stanley Dean Witter & 453,800 32,645
Co.
66,728
TOTAL FINANCE 347,142
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
HEALTH - 9.3%
DRUGS & PHARMACEUTICALS - 8.8%
American Home Products Corp. 225,900 $ 12,170
Amgen, Inc. (a) 165,100 10,504
Bristol-Myers Squibb Co. 685,628 37,752
Eli Lilly & Co. 615,200 46,832
Genentech, Inc. 105,900 11,371
Merck & Co., Inc. 160,600 11,985
Schering-Plough Corp. 1,029,800 49,817
Warner-Lambert Co. 463,400 56,593
237,024
MEDICAL EQUIPMENT & SUPPLIES
- 0.5%
Johnson & Johnson 73,300 6,560
Medtronic, Inc. 154,000 7,950
14,510
TOTAL HEALTH 251,534
INDUSTRIAL MACHINERY &
EQUIPMENT - 5.8%
ELECTRICAL EQUIPMENT - 5.7%
General Electric Co. 2,934,900 154,454
INDUSTRIAL MACHINERY &
EQUIPMENT - 0.1%
Ingersoll-Rand Co. 91,550 4,171
TOTAL INDUSTRIAL MACHINERY & 158,625
EQUIPMENT
MEDIA & LEISURE - 7.0%
BROADCASTING - 2.7%
AT&T Corp. - Liberty Media 312,700 13,857
Group Class A (a)
Clear Channel Communications, 219,100 16,405
Inc. (a)
Infinity Broadcasting Corp. 421,500 13,330
Class A (a)
Time Warner, Inc. 349,171 27,563
USA Networks, Inc. (a) 139,400 2,640
73,795
ENTERTAINMENT - 2.7%
MGM Grand, Inc. 200,000 6,500
Viacom, Inc. Class B 802,436 49,751
(non-vtg.) (a)
Walt Disney Co. 414,200 17,474
73,725
PUBLISHING - 1.2%
McGraw-Hill Companies, Inc. 611,600 31,459
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
MEDIA & LEISURE - CONTINUED
RESTAURANTS - 0.4%
McDonald's Corp. 297,500 $ 10,654
TOTAL MEDIA & LEISURE 189,633
NONDURABLES - 2.7%
BEVERAGES - 1.2%
Anheuser-Busch Companies, 238,100 18,453
Inc.
The Coca-Cola Co. 275,000 14,678
33,131
HOUSEHOLD PRODUCTS - 1.2%
Avon Products, Inc. 75,700 3,127
Clorox Co. 213,140 8,446
Colgate-Palmolive Co. 185,300 9,751
Procter & Gamble Co. 157,500 10,474
31,798
TOBACCO - 0.3%
Philip Morris Companies, Inc. 344,900 9,011
TOTAL NONDURABLES 73,940
RETAIL & WHOLESALE - 4.8%
APPAREL STORES - 0.4%
The Limited, Inc. 411,400 9,925
GENERAL MERCHANDISE STORES -
2.6%
Kohls Corp. (a) 143,400 7,421
Target Corp. 304,100 19,063
Wal-Mart Stores, Inc. 780,900 44,999
71,483
RETAIL & WHOLESALE,
MISCELLANEOUS - 1.8%
Home Depot, Inc. 761,659 37,178
Lowe's Companies, Inc. 170,200 7,925
Staples, Inc. (a) 190,300 2,807
47,910
TOTAL RETAIL & WHOLESALE 129,318
SERVICES - 1.1%
ADVERTISING - 0.7%
Omnicom Group, Inc. 244,500 20,523
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
SERVICES - CONTINUED
SERVICES - 0.4%
Ecolab, Inc. 257,650 $ 9,855
Gartner Group, Inc. Class B 5,754 64
(a)
9,919
TOTAL SERVICES 30,442
TECHNOLOGY - 30.3%
COMMUNICATIONS EQUIPMENT - 8.1%
Cisco Systems, Inc. (a) 1,578,900 89,899
Comverse Technology, Inc. (a) 115,400 10,545
Corning, Inc. 57,500 11,123
Lucent Technologies, Inc. 429,180 24,624
Nokia AB sponsored ADR 840,600 43,711
Nortel Networks Corp. 754,400 40,203
220,105
COMPUTER SERVICES & SOFTWARE
- 5.2%
America Online, Inc. (a) 431,200 22,854
BEA Systems, Inc. (a) 137,688 4,974
Computer Sciences Corp. (a) 68,800 6,601
Electronic Data Systems Corp. 79,600 5,119
Inktomi Corp. (a) 54,200 6,050
Microsoft Corp. (a) 626,100 39,170
Oracle Corp. (a) 413,100 29,692
Unisys Corp. (a) 594,518 16,126
Yahoo!, Inc. (a) 87,500 9,893
140,479
COMPUTERS & OFFICE EQUIPMENT
- 6.2%
Compaq Computer Corp. 477,400 12,532
Dell Computer Corp. (a) 607,300 26,190
EMC Corp. (a) 356,329 41,446
Hewlett-Packard Co. 118,800 14,271
International Business 219,700 23,577
Machines Corp.
Network Appliance, Inc. (a) 121,000 7,812
Pitney Bowes, Inc. 351,700 15,299
SCI Systems, Inc. (a) 73,600 3,312
Sun Microsystems, Inc. (a) 323,900 24,819
169,258
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
TECHNOLOGY - CONTINUED
ELECTRONIC INSTRUMENTS - 0.6%
Applied Materials, Inc. (a) 147,800 $ 12,341
KLA-Tencor Corp. (a) 89,300 4,426
16,767
ELECTRONICS - 10.2%
Altera Corp. (a) 74,900 6,432
Analog Devices, Inc. (a) 183,600 14,137
Broadcom Corp. Class A (a) 62,900 8,181
Flextronics International 100,131 5,451
Ltd. (a)
Intel Corp. 559,100 69,713
JDS Uniphase Corp. (a) 172,800 15,206
Micron Technology, Inc. (a) 310,700 21,730
Motorola, Inc. 301,100 28,228
Sanmina Corp. (a) 120,900 7,692
Texas Instruments, Inc. 784,000 56,644
Tyco International Ltd. 765,716 36,037
Xilinx, Inc. (a) 76,500 5,824
275,275
TOTAL TECHNOLOGY 821,884
UTILITIES - 9.9%
CELLULAR - 4.1%
China Telecom (Hong Kong) 1,272,700 9,354
Ltd. (a)
Nextel Communications, Inc. 152,400 14,116
Class A (a)
QUALCOMM, Inc. (a) 114,100 7,573
Sprint Corp. - PCS Group 498,800 27,683
Series 1 (a)
Vodafone AirTouch PLC 2,985,151 13,676
Vodafone AirTouch PLC 239,000 10,949
sponsored ADR
VoiceStream Wireless Corp. (a) 238,600 27,320
110,671
ELECTRIC UTILITY - 0.5%
AES Corp. (a) 154,800 13,506
NRG Energy, Inc. 87,900 1,461
14,967
GAS - 0.9%
Dynegy, Inc. Class A 186,235 14,363
Enron Corp. 133,800 9,751
24,114
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
UTILITIES - CONTINUED
TELEPHONE SERVICES - 4.4%
Allegiance Telecom, Inc. (a) 102,300 $ 5,409
AT&T Corp. 254,800 8,838
BellSouth Corp. 573,900 26,794
Level 3 Communications, Inc. 86,300 6,586
(a)
McLeodUSA, Inc. Class A (a) 534,600 10,692
SBC Communications, Inc. 762,100 33,294
Sprint Corp. - FON Group 269,900 16,329
TeraBeam Networks (d) 2,100 32
WorldCom, Inc. (a) 277,100 10,426
118,400
TOTAL UTILITIES 268,152
TOTAL COMMON STOCKS 2,533,576
(Cost $2,131,803)
CONVERTIBLE PREFERRED STOCKS
- 0.3%
MEDIA & LEISURE - 0.3%
BROADCASTING - 0.3%
MediaOne Group, Inc. 72,500 7,141
(Vodafone AirTouch PLC)
$3.63 PIES (Cost $5,695)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CORPORATE BONDS - 1.0%
MOODY'S RATINGS (UNAUDITED) PRINCIPAL AMOUNT (000S)
CONVERTIBLE BONDS - 1.0%
MEDIA & LEISURE - 0.3%
BROADCASTING - 0.3%
Liberty Media Corp. 3.75% Baa3 $ 7,390 7,584
2/15/30 (c)
TECHNOLOGY - 0.5%
COMPUTERS & OFFICE EQUIPMENT
- 0.5%
Juniper Networks, Inc. 4.75% - 17,350 14,064
3/15/07
UTILITIES - 0.2%
CELLULAR - 0.1%
Nextel Communications, Inc. B1 4,940 4,323
5.25% 1/15/10 (c)
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
CONVERTIBLE BONDS - CONTINUED
UTILITIES - CONTINUED
TELEPHONE SERVICES - 0.1%
Level 3 Communications, Inc. Caa1 $ 3,250 $ 2,689
6% 3/15/10
TOTAL UTILITIES 7,012
TOTAL CONVERTIBLE BONDS 28,660
NONCONVERTIBLE BONDS - 0.0%
AEROSPACE & DEFENSE - 0.0%
British Aerospace PLC 7.45% - GBP 36 53
11/30/03
TOTAL CORPORATE BONDS 28,713
(Cost $28,808)
CASH EQUIVALENTS - 8.3%
SHARES
Central Cash Collateral Fund, 8,632,300 8,632
6.54% (b)
Taxable Central Cash Fund, 215,272,588 215,273
6.37% (b)
TOTAL CASH EQUIVALENTS 223,905
(Cost $223,905)
TOTAL INVESTMENT PORTFOLIO - 2,793,335
103.1%
(Cost $2,390,211)
NET OTHER ASSETS - (3.1)% (83,199)
NET ASSETS - 100% $ 2,710,136
</TABLE>
SECURITY TYPE ABBREVIATIONS
PIES - Premium Income Equity
Securities
CURRENCY ABBREVIATIONS
GBP - British pound
LEGEND
(a) Non-income producing
(b) The rate quoted is the annualized seven-day yield of the fund at
period end.
(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 $11,907,000 or 0.4% of net assets.
(d) Restricted securities - Investment in securities not registered
under the Securities Act of 1933.
Additional information on each holding is as follows:
SECURITY ACQUISITION DATE ACQUISITION COST (000S)
TeraBeam Networks 4/7/00 $ 32
INCOME TAX INFORMATION
At May 31, 2000, the aggregate cost of investment securities for
income tax purposes was $2,400,903,000. Net unrealized appreciation
aggregated $392,432,000, of which $481,757,000 related to appreciated
investment securities and $89,325,000 related to depreciated
investment securities.
At May 31, 2000, the fund had a capital loss carryforward of
approximately $25,110,000 of which $13,634,000 and $11,476,000 will
expire on November 30, 2006 and 2007, respectively.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AMOUNTS IN THOUSANDS
MAY 31, 2000 (UNAUDITED)
ASSETS
Investment in securities, at $ 2,793,335
value (cost $2,390,211) -
See accompanying schedule
Cash 25
Receivable for investments 23,388
sold
Receivable for fund shares 6,162
sold
Dividends receivable 1,891
Interest receivable 1,587
Other receivables 23
TOTAL ASSETS 2,826,411
LIABILITIES
Payable for investments $ 98,649
purchased
Payable for fund shares 5,740
redeemed
Accrued management fee 1,079
Distribution fees payable 1,465
Other payables and accrued 710
expenses
Collateral on securities 8,632
loaned, at value
TOTAL LIABILITIES 116,275
NET ASSETS $ 2,710,136
Net Assets consist of:
Paid in capital $ 2,364,144
Accumulated net investment (4,887)
loss
Accumulated undistributed net (52,219)
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 403,098
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS $ 2,710,136
STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
AMOUNTS IN THOUSANDS (EXCEPT
PER-SHARE AMOUNTS)
MAY 31, 2000 (UNAUDITED)
CALCULATION OF MAXIMUM $18.90
OFFERING PRICE CLASS A: NET
ASSET VALUE and redemption
price per share ($181,911
(divided by) 9,623 shares)
Maximum offering price per $20.05
share (100/94.25 of $18.90)
CLASS T: NET ASSET VALUE and $18.85
redemption price per share
($1,361,009 (divided by)
72,220 shares)
Maximum offering price per $19.53
share (100/96.50 of $18.85)
CLASS B: NET ASSET VALUE and $18.61
offering price per share
($662,431 (divided by)
35,591 shares) A
CLASS C: NET ASSET VALUE and $18.62
offering price per share
($371,574 (divided by)
19,955 shares) A
INSTITUTIONAL CLASS: NET $18.97
ASSET VALUE, offering price
and redemption price per
share ($133,211 (divided by)
7,021 shares)
REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS SIX
MONTHS ENDED MAY 31, 2000
(UNAUDITED)
INVESTMENT INCOME $ 8,199
Dividends
Interest 4,041
Security lending 188
TOTAL INCOME 12,428
EXPENSES
Management fee $ 6,021
Transfer agent fees 2,633
Distribution fees 8,147
Accounting and security 271
lending fees
Non-interested trustees' 4
compensation
Custodian fees and expenses 62
Registration fees 292
Audit 16
Legal 7
Miscellaneous 6
Total expenses before 17,459
reductions
Expense reductions (144) 17,315
NET INVESTMENT INCOME (LOSS) (4,887)
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities (16,452)
Foreign currency transactions (128) (16,580)
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 35,948
Assets and liabilities in (28) 35,920
foreign currencies
NET GAIN (LOSS) 19,340
NET INCREASE (DECREASE) IN $ 14,453
NET ASSETS RESULTING FROM
OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
AMOUNTS IN THOUSANDS SIX MONTHS ENDED MAY 31, 2000 YEAR ENDED NOVEMBER 30, 1999
(UNAUDITED)
INCREASE (DECREASE) IN NET
ASSETS
Operations Net investment $ (4,887) $ (1,740)
income (loss)
Net realized gain (loss) (16,580) (15,532)
Change in net unrealized 35,920 250,870
appreciation (depreciation)
NET INCREASE (DECREASE) IN 14,453 233,598
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders - (228)
From net investment income
In excess of net investment - (292)
income
Return of capital - (945)
TOTAL DISTRIBUTIONS - (1,465)
Share transactions - net 684,915 1,028,815
increase (decrease)
TOTAL INCREASE (DECREASE) 699,368 1,260,948
IN NET ASSETS
NET ASSETS
Beginning of period 2,010,768 749,820
End of period (including $ 2,710,136 $ 2,010,768
accumulated net investment
loss of $4,887 and $0,
respectively)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS A
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 18.40 $ 15.09 $ 12.47 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) D (.00) .04 .06 .04
Net realized and unrealized .50 3.32 2.79 2.46
gain (loss)
Total from investment .50 3.36 2.85 2.50
operations
Less Distributions
From net investment income - (.01) (.05) (.03)
In excess of net investment - (.01) - -
income
From net realized gain - - (.18) -
Return of capital - (.03) - -
Total distributions - (.05) (.23) (.03)
Net asset value, end of period $ 18.90 $ 18.40 $ 15.09 $ 12.47
TOTAL RETURN B, C 2.72% 22.31% 23.24% 25.04%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 182 $ 120 $ 35 $ 7
millions)
Ratio of expenses to average 1.01% A 1.04% 1.12% 1.50% A, F
net assets
Ratio of expenses to average 1.00% A, G 1.03% G 1.11% G 1.50% A
net assets after expense
reductions
Ratio of net investment (.01)% A .22% .46% .34% A
income (loss) to average net
assets
Portfolio turnover 104% A 55% 54% 82% 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 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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS T
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 18.37 $ 15.07 $ 12.46 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) D (.02) .00 .04 .03
Net realized and unrealized .50 3.32 2.78 2.45
gain (loss)
Total from investment .48 3.32 2.82 2.48
operations
Less Distributions
From net investment income - (.00) (.03) (.02)
In excess of net investment - (.01) - -
income
From net realized gain - - (.18) -
Return of capital - (.01) - -
Total distributions - (.02) (.21) (.02)
Net asset value, end of period $ 18.85 $ 18.37 $ 15.07 $ 12.46
TOTAL RETURN B, C 2.61% 22.05% 23.00% 24.83%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 1,361 $ 999 $ 400 $ 133
millions)
Ratio of expenses to average 1.24% A 1.27% 1.31% 1.59% A
net assets
Ratio of expenses to average 1.23% A, F 1.25% F 1.30% F 1.59% A
net assets after expense
reductions
Ratio of net investment (.24)% A .00% .27% .24% A
income (loss) to average
net assets
Portfolio turnover 104% A 55% 54% 82% 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 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 OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS B
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 18.19 $ 14.98 $ 12.41 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) D (.07) (.09) (.03) (.04)
Net realized and unrealized .49 3.30 2.77 2.46
gain (loss)
Total from investment .42 3.21 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 $ 18.61 $ 18.19 $ 14.98 $ 12.41
TOTAL RETURN B, C 2.31% 21.43% 22.39% 24.22%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 662 $ 508 $ 158 $ 29
millions)
Ratio of expenses to average 1.76% A 1.78% 1.83% 2.25% A, F
net assets
Ratio of expenses to average 1.75% A, G 1.76% G 1.82% G 2.25% A
net assets after expense
reductions
Ratio of net investment (.76)% A (.51)% (.25)% (.42)% A
income (loss) to average net
assets
Portfolio turnover 104% A 55% 54% 82% 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 (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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS C
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 18.19 $ 14.98 $ 12.45 $ 12.22
period
Income from Investment
Operations
Net investment income (loss) D (.07) (.08) (.04) -
Net realized and unrealized .50 3.29 2.76 .23
gain (loss)
Total from investment .43 3.21 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 $ 18.62 $ 18.19 $ 14.98 $ 12.45
TOTAL RETURN B, C 2.36% 21.43% 22.20% 1.88%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 372 $ 253 $ 60 $ 0.4
millions)
Ratio of expenses to average 1.74% A 1.76% 1.87% 2.24% A, F
net assets
Ratio of expenses to average 1.73% A, G 1.75% G 1.85% G 2.24% A
net assets after expense
reductions
Ratio of net investment (.74)% A (.50)% (.27)% .19% A
income (loss) to average
net assets
Portfolio turnover 104% A 55% 54% 82% 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 (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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 18.44 $ 15.10 $ 12.47 $ 10.00
period
Income from Investment
Operations
Net investment income D .03 .09 .11 .07
Net realized and unrealized .50 3.33 2.79 2.45
gain (loss)
Total from investment .53 3.42 2.90 2.52
operations
Less Distributions
From net investment income - (.01) (.09) (.05)
In excess of net investment - (.02) - -
income
From net realized gain - - (.18) -
Return of capital - (.05) - -
Total distributions - (.08) (.27) (.05)
Net asset value, end of period $ 18.97 $ 18.44 $ 15.10 $ 12.47
TOTAL RETURN B, C 2.87% 22.71% 23.69% 25.26%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 133 $ 131 $ 97 $ 74
millions)
Ratio of expenses to average .71% A .74% .76% 1.19% A
net assets
Ratio of expenses to average .70% A, F .72% F .75% F 1.19% A
net assets after expense
reductions
Ratio of net investment .29% A .53% .82% .64% A
income to average net assets
Portfolio turnover 104% A 55% 54% 82% 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 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
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.
NOTES TO FINANCIAL STATEMENTS
For the period ended May 31, 2000 (Unaudited)
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.
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. Foreign securities are valued based
on quotations from the principal market in which such securities are
normally traded. If trading or events occurring in other markets after
the close of the principal market in which foreign securities are
traded, and before the close of the business of the fund, are expected
to materially affect the value of those securities, then they are
valued at their fair value taking this trading or these events into
account. Fair value is determined in good faith under consistently
applied procedures under the general supervision of the Board of
Trustees. 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. 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.
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,
net operating losses, capital loss carryforwards and losses deferred
due to wash sales and excise tax regulations.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Accumulated net investment loss and accumulated undistributed net
realized gain (loss) on investments and foreign currency transactions
may include temporary book and tax basis differences that will reverse
in a subsequent period. Any taxable income or gain remaining at fiscal
year end is distributed in the following year. For the period ended
November 30, 1999, the fund's distributions exceeded the aggregate
amount of taxable income and net realized gains resulting in a return
of capital. This was due to reductions in taxable income available for
distribution after certain distributions had been made.
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 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, Federal Agency,
or other obligations found to be satisfactory by FMR 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.
CENTRAL CASH FUNDS. Pursuant to an Exemptive Order issued by the SEC,
the fund may invest in the Taxable Central Cash Fund and the Central
Cash Collateral Fund (the Cash Funds) managed by Fidelity Investments
Money Management, Inc., an affiliate of FMR. The Cash Funds are
open-end money market funds available only to investment companies and
other accounts managed by FMR and its affiliates. The Cash Funds seek
preservation of capital, liquidity, and current income. Income
distributions from the Cash Funds are declared daily and paid monthly
from net interest income. Income distributions earned by the fund are
recorded as either interest income or security lending 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, restricted securities (excluding 144A
issues) amounted to $32,000 or 0.0% of net assets.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $1,815,252,000 and $1,246,890,000, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus a
fixed individual fund fee rate applied to the average net assets of
the fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds advised by FMR. The rates ranged from .2167% to .5200% for the
period. The annual individual fund 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 an annualized rate of .48% of average net
assets.
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the
1940 Act, the Board of Trustees have adopted separate Distribution and
Service 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 $ 210,000 $ 1,000
CLASS T 3,168,000 47,000
CLASS B 3,111,000 2,334,000
CLASS C 1,658,000 1,062,000
$ 8,147,000 $ 3,444,000
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 Class C share redemptions occurring within one year of
purchase. Contingent deferred sales charges are based on declining
rates ranging from 5%
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
SALES LOAD - CONTINUED
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 is 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 $ 593,000 $ 214,000
CLASS T 1,017,000 331,000
CLASS B 741,000 741,000*
CLASS C 95,000 95,000*
$ 2,446,000 $ 1,381,000
* 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.
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 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 $ 187,000 .22 *
CLASS T 1,301,000 .21 *
CLASS B 686,000 .22 *
CLASS C 333,000 .20 *
INSTITUTIONAL CLASS 126,000 .18 *
$ 2,633,000
* ANNUALIZED
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
ACCOUNTING AND SECURITY LENDING FEES. Fidelity Service Company, Inc.,
an affiliate of FMR, maintains the fund's accounting records and
administers the security lending program. The security lending fee is
based on the number and duration of lending transactions. The
accounting fee is based on the level of average net assets for the
month plus out-of-pocket expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $54,000 for the
period.
5. SECURITY LENDING.
The fund lends portfolio securities from time to time in order to earn
additional income. The fund receives collateral in the form of U.S.
Treasury obligations, letters of credit, and/or cash against the
loaned securities, and maintains collateral in an amount not less than
100% of the market value of the loaned securities during the period of
the loan. The market value of the loaned securities is determined at
the close of business of the fund and any additional required
collateral is delivered to the fund on the next business day. If the
borrower defaults on its obligation to return the securities loaned
because of insolvency or other reasons, the fund could experience
delays and costs in recovering the securities loaned or in gaining
access to the collateral. At period end, the value of the securities
loaned amounted to $8,487,000. The fund received cash collateral of
$8,632,000 which was invested in cash equivalents.
6. 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 $126,000 under this arrangement.
In addition, through arrangements with the fund's custodian and each
class' transfer agent, 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 $1,000 under the custodian
arrangement, and each applicable class' expenses were reduced as
follows under the transfer agent arrangements:
TRANSFER AGENT CREDITS
CLASS A $ 2,000
CLASS T 15,000
$ 17,000
7. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
AMOUNTS IN THOUSANDS SIX MONTHS ENDED MAY 31, YEAR ENDED NOVEMBER 30,
2000 1999
FROM NET INVESTMENT INCOME
Class A $ - $ 21
Class T - 122
Institutional Class - 85
Total $ - $ 228
IN EXCESS OF NET INVESTMENT
INCOME
Class A $ - $ 28
Class T - 156
Institutional Class - 108
Total $ - $ 292
RETURN OF CAPITAL
Class A $ - $ 151
Class T - 449
Institutional Class - 345
Total $ - $ 945
Total Distributions $ - $ 1,465
8. SHARE TRANSACTIONS.
Transactions for each class of shares for the periods were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SHARES DOLLARS
AMOUNTS IN THOUSANDS SIX MONTHS ENDED MAY 31, YEAR ENDED NOVEMBER 30, SIX MONTHS ENDED MAY 31,
2000 1999 2000
CLASS A Shares sold 5,390 $ 91,500
4,589
Reinvestment of distributions - 11 -
Shares redeemed (1,485) (1,176) (29,699)
Net increase (decrease) 3,104 4,225 $ 61,801
CLASS T Shares sold 27,234 38,799 $ 541,255
Reinvestment of distributions - 41 -
Shares redeemed (9,385) (11,041) (185,856)
Net increase (decrease) 17,849 27,799 $ 355,399
CLASS B Shares sold 10,588 19,885 $ 207,373
Shares redeemed (2,915) (2,529) (57,253)
Net increase (decrease) 7,673 17,356 $ 150,120
CLASS C Shares sold 7,921 11,186 $ 155,815
Shares redeemed (1,899) (1,236) (37,072)
Net increase (decrease) 6,022 9,950 $ 118,743
INSTITUTIONAL CLASS Shares 1,283 2,418 $ 25,669
sold
Reinvestment of distributions - 26 -
Shares redeemed (1,370) (1,763) (26,817)
Net increase (decrease) (87) 681 $ (1,148)
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
DOLLARS
AMOUNTS IN THOUSANDS YEAR ENDED NOVEMBER 30,
1999
CLASS A Shares sold $ 92,591
Reinvestment of distributions 176
Shares redeemed (20,333)
Net increase (decrease) $ 72,434
CLASS T Shares sold $ 667,872
Reinvestment of distributions 684
Shares redeemed (190,532)
Net increase (decrease) $ 478,024
CLASS B Shares sold $ 340,104
Shares redeemed (43,498)
Net increase (decrease) $ 296,606
CLASS C Shares sold $ 191,357
Shares redeemed (21,381)
Net increase (decrease) $ 169,976
INSTITUTIONAL CLASS Shares $ 41,605
sold
Reinvestment of distributions 422
Shares redeemed (30,252)
Net increase (decrease) $ 11,775
</TABLE>
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research
(U.K.) Inc.
Fidelity Management & Research
(Far East) Inc.
Fidelity Investments Japan Ltd.
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
Robert A. Dwight, Treasurer
Maria F. Dwyer, Deputy Treasurer
John H. Costello, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
Donald J. Kirk *
Ned C. Lautenbach *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
* INDEPENDENT TRUSTEES
ADVISORY BOARD
J. Michael Cook
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 Telecommunications & Utilities Growth Fund
GROWTH FUNDS
Fidelity Advisor Latin America Fund
Fidelity Advisor Emerging Asia 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 (registered trademark)
Growth Fund
Fidelity Advisor Small Cap Fund
Fidelity Advisor Value Strategies Fund
Fidelity Advisor Mid Cap Fund
Fidelity Advisor Dynamic Capital Appreciation Fund
Fidelity Advisor Equity Growth Fund
Fidelity Advisor Large Cap Fund
Fidelity Advisor Dividend Growth Fund
Fidelity Advisor Growth
Opportunities Fund
AGAI-SANN-0700 106155
1.704634.102
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 High Income 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
MONEY MARKET FUNDS
Prime Fund
Treasury Fund
Tax-Exempt Fund
(2_FIDELITY_LOGOS)(registered trademark)
FIDELITY(REGISTERED TRADEMARK) ADVISOR
GROWTH & INCOME
FUND - INSTITUTIONAL CLASS
SEMIANNUAL REPORT
MAY 31, 2000
(2_FIDELITY_LOGOS)(registered trademark)
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over
time.
FUND TALK 6 The manager's review of fund
performance, strategy and
outlook.
INVESTMENT CHANGES 9 A summary of major shifts in
the fund's investments over
the past six months.
INVESTMENTS 10 A complete list of the fund's
investments with their
market values.
FINANCIAL STATEMENTS 19 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 28 Notes to the financial
statements.
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 technology sell-off that began in mid-March continued to hamper
equity markets, driving the tech-heavy NASDAQ index down more than 16%
year to date through the end of May. Broader equity indexes, including
the S&P 500(registered trademark), also were down, but not as much as
more concentrated performance measures. In bond markets, Treasuries
got a boost late in the period as economic reports showed the first
signs of a slowing economy.
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 an investment in a money market fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although money market funds seek to preserve the
value of your investment at $1.00 per share, it is possible to lose
money by investing in these types of funds.
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 PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
FIDELITY ADV GROWTH & INCOME 2.87% 11.13% 95.59%
- INST CL
S&P 500 (registered trademark) 2.90% 10.48% 101.71%
Growth & Income Funds Average 3.86% 6.10% n/a
CUMULATIVE TOTAL RETURNS show Institutional Class performance in
percentage terms over a set period - in this case, six months, 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 500SM 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 and income funds
average, which reflects the performance of mutual funds with similar
objectives tracked by Lipper Inc. The past six months average
represents a peer group of 1,008 mutual funds. These benchmarks
include reinvested dividends and capital gains, if any, and exclude
the effect of sales charges. Lipper has created new comparison
categories that group funds according to portfolio characteristics and
capitalization, as well as by capitalization only. These averages are
listed on page 5 of this report.*
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 YEAR LIFE OF FUND
FIDELITY ADV GROWTH & INCOME 11.13% 21.70%
- INST CL
S&P 500 10.48% 22.80%
Growth & Income Funds Average 6.10% 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
1998/12/31 16798.58 17147.40
1999/01/31 17374.30 17864.50
1999/02/28 17045.32 17309.27
1999/03/31 17806.09 18001.82
1999/04/30 18196.75 18699.03
1999/05/31 17600.48 18257.54
1999/06/30 18621.11 19270.84
1999/07/31 18043.71 18669.20
1999/08/31 17806.57 18576.79
1999/09/30 17414.76 18067.60
1999/10/31 18229.31 19210.91
1999/11/30 19012.92 19601.47
1999/12/31 21105.99 20756.00
2000/01/31 20147.10 19713.22
2000/02/29 20858.53 19340.05
2000/03/31 21776.19 21232.08
2000/04/30 20528.59 20593.21
2000/05/31 19559.39 20170.64
IMATRL PRASUN SHR__CHT 20000531 20000621 151706 R00000000000044
$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 May 31, 2000, the value of the investment would have grown to
$19,559 - a 95.59% 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 $20,171 - a 101.71% increase.
(checkmark)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.
* THE LIPPER LARGE-CAP VALUE FUNDS AVERAGE REFLECTS THE PERFORMANCE
(EXCLUDING SALES CHARGES) OF MUTUAL FUNDS WITH SIMILAR PORTFOLIO
CHARACTERISTICS AND CAPITALIZATION. THE LIPPER LARGE-CAP SUPERGROUP
AVERAGE REFLECTS THE PERFORMANCE (EXCLUDING SALES CHARGES) OF MUTUAL
FUNDS WITH SIMILAR CAPITALIZATION. AS OF MAY 31, 2000, THE SIX MONTH
AND ONE YEAR CUMULATIVE TOTAL RETURNS
FOR LARGE-CAP VALUE FUNDS AVERAGE WERE, 2.37% AND 4.15%, RESPECTIVELY.
THE ONE YEAR AVERAGE ANNUAL TOTAL RETURN WAS 4.15%. THE SIX MONTH AND
ONE YEAR CUMULATIVE TOTAL RETURNS FOR THE LARGE-CAP SUPERGROUP AVERAGE
WERE, 5.14% AND 15.76%, RESPECTIVELY. THE ONE YEAR AVERAGE ANNUAL
TOTAL RETURN WAS 15.76%.
FUND TALK: THE MANAGERS' OVERVIEW
MARKET RECAP
U.S. equity investors faced a steadily
declining market during the latter
part of the six-month period that
ended May 31, 2000, after
experiencing continued growth the
prior three months. Two chief
catalysts - a tightening of monetary
policy by the Federal Reserve Board
and the bursting of a speculative
bubble in technology stocks -
sparked a sustained pullback among
the major U.S. equity indexes that
began in March. The tech-heavy
NASDAQ Composite Index reached
a high of 5048 on March 10 before
quickly retreating below the 4000
level. The NASDAQ dropped to
3401 on the final day of the period,
gaining a modest 2.05% return for
the six-month period. The Standard
& Poor's 500SM Index - an index
of 500 widely held stocks - fared
slightly better in returning 2.90%.
Another index of well-established
stocks - the blue chips' Dow Jones
Industrial Average - surged higher
during the NASDAQ's sharp
plummet in April, but the brief rally
wasn't enough to significantly offset
earlier losses, and the Dow returned
-2.55% for the period. The Russell
2000(Registered trademark) Index - a barometer of
small-cap stocks - outperformed the
major indexes of larger companies
with a 5.50% return. As the period
drew to a close, weaker trading
volume suggested investors were
mixed about the direction of U.S.
stocks, and whether the three
interest-rate hikes levied by the
Fed during the period had begun
to cool off the overheated economy.
(photograph of Beth Terrana)(photograph of John Avery)
NOTE TO SHAREHOLDERS:
The following is an interview with Beth Terrana, who managed Fidelity
Advisor Growth & Income Fund during the period covered by this report,
with additional comments from John Avery, who became manager of the
fund on June 1, 2000.
Q. HOW DID THE FUND PERFORM, BETH?
B.T. For the six-month period ending May 31, 2000, the fund's
Institutional Class shares returned 2.87%. Comparatively, the Standard
& Poor's 500 Index returned 2.90% during the same period, while the
growth & income funds average tracked by Lipper Inc. returned 3.86%.
On a 12-month basis, the fund's Institutional Class shares returned
11.13%. Meanwhile, the S&P 500 gained 10.48% during the past year, and
the growth & income funds average returned 6.10%.
Q. WHAT FACTORS INFLUENCED THE FUND'S PERFORMANCE DURING THE PERIOD?
B.T. It was an exceptionally volatile period, which at various times
either enhanced the fund's returns or detracted from performance.
Early in the period, I increased the fund's exposure to technology and
telecommunications stocks. That's where I felt the market offered the
best prospects for long-term growth given the rapid penetration of
Internet and wireless technology. Initially, this strategy worked very
well as the fund soundly outperformed its Lipper peers and the S&P 500
in December, January and February. Beginning in March, however, when
the fund's technology weighting was at its peak, new economy stocks
experienced a severe correction that lasted through the remainder of
the period. When all was said and done, the fund's returns were pretty
much in line with the S&P 500's, and just slightly below our growth &
income peers, which on average were not as aggressive in their
technology exposure.
Q. OVERALL, WHAT WERE THE BEST CONTRIBUTORS TO PERFORMANCE?
B.T. Several health care stocks did well. Major pharmaceutical player
Warner-Lambert, whose stock reached record highs as the target of a
takeover battle between American Home Products and Pfizer, was a top
performer, as were Schering-Plough and Eli Lilly. Biotechnology
holding Genentech, which uses human genetic information to discover
and develop pharmaceuticals for various medical needs, also added to
returns. Underweighting the poorly performing nondurables sector was
another significant contributor to performance. Nondurables are
extremely interest-rate sensitive, so by holding a roughly one-third
market weighting in this sector, the fund was able to avoid most of
the damage from the losses incurred by Procter & Gamble and Coca-Cola.
Q. WHAT OTHER STOCKS ADDED TO THE FUND'S POSITIVE RETURNS?
B.T. Nokia was the fund's strongest individual performer, as demand
for all things wireless boosted the company's mobile handset business.
Fund holdings Texas Instruments, Cisco and EMC also reaped the
benefits of the continued wireless communications and Internet
build-out. General Electric, the fund's largest individual position,
was the second-best contributor. Its revenues for the first quarter of
2000 were up 25%, reflecting strong growth across all of its
divisions, and the company continued to deliver steady, 13% to 16%
earnings-per-share growth quarter after quarter.
Q. WHAT STOCKS DETRACTED FROM PERFORMANCE?
B.T. Microsoft and Lucent Technologies were the primary
disappointments. Microsoft saw its stock price fall from a high of
around $120 per share to as low as $60 on the heels of the
government's unfavorable antitrust ruling and subsequent plans to
split up the company. Lucent also struggled as the company
underestimated demand for bandwidth. Bristol-Myers Squibb's share
price fell 23% on April 19 when the company announced its withdrawal
of a new blood pressure drug from FDA approval due to potentially
dangerous side effects.
Q. JOHN, WHAT'S YOUR OUTLOOK?
J.A. I'm bullish overall, as business remains strong in many areas of
the economy, although I temper that enthusiasm with concern about
interest rates rising further. The Fed has made its position quite
clear that if it hasn't slowed the economy yet, it most assuredly will
do so in the coming months. In this environment, I firmly believe that
revenue and earnings will take center stage in the marketplace. As
such, the companies capable of delivering robust top-line growth and,
thus, strong earnings should be the ones to reap the rewards. Given
the extent to which technology and the Internet have transformed the
global landscape, I expect we'll see strong performance from this
sector going forward.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGERS ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER AND DO NOT NECESSARILY REPRESENT THE VIEWS OF FIDELITY OR
ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH VIEWS ARE
SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER CONDITIONS
AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE
VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE
INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS
FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY FIDELITY FUND.
(checkmark)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 May 31, 2000,
more than $2.7 billion
MANAGER: John Avery, since
June 2000; manager, Fidelity
Advisor Balanced Fund, since
1998; joined Fidelity in
1995
JOHN AVERY ON
MANAGING FIDELITY ADVISOR
GROWTH & INCOME FUND:
"This is my third year running funds
in the Advisor channel, having
managed Fidelity Advisor Balanced
Fund since 1998. But before I talk
about my management style, I'd first
like to say that it's an honor to
succeed Beth Terrana as manager
of this fund. She was my first formal
mentor when I joined the firm in
1995, and she's been my biggest
informal mentor over the past
couple of years.
"Stylistically, Beth and I are very
similar. Bottom line, investors
shouldn't expect a lot of big changes.
The top 20 stocks aren't going to
look a lot different. The biggest
thing I plan to do on a near-term
basis is cut back on the fund's
investments in Japan. Other than
that I think it will be pretty
consistent.
"Longer term, I may take down a
few of the fund's NASDAQ
positions. Relative to the fund's
growth & income peers, Beth was
probably a bit more aggressive
than I will be. However, I still plan to
be more aggressive than the average
peer fund, particularly in
technology. On a performance basis,
my technology weighting will likely
differentiate this fund from its
peers. My primary objective,
however, is to beat the S&P 500,
without entailing a tremendous
amount of risk."
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF MAY 31,
2000
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
General Electric Co. 5.7 4.2
Cisco Systems, Inc. 3.3 1.9
Intel Corp. 2.6 0.2
Exxon Mobil Corp. 2.3 1.7
Texas Instruments, Inc. 2.1 1.6
Warner-Lambert Co. 2.1 1.0
American Express Co. 2.0 1.6
Schering-Plough Corp. 1.8 1.7
Citigroup, Inc. 1.8 1.8
Viacom, Inc. Class B (non-vtg.) 1.8 1.0
25.5 16.7
TOP FIVE MARKET SECTORS AS OF
MAY 31, 2000
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Technology 30.8 25.3
Finance 12.8 10.6
Utilities 10.1 10.5
Health 9.3 12.0
Media & Leisure 7.6 10.6
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
ASSET ALLOCATION (% OF FUND'S
NET ASSETS)
AS OF MAY 31, 2000 * AS OF NOVEMBER 30, 1999 **
Stocks 93.5% Stocks 97.7%
Convertible Securities 1.3% Convertible Securities 0.9%
Short-Term Investments and Short-Term Investments and
Net Other Assets 5.2% Net Other Assets 1.4%
* FOREIGN INVESTMENTS 6.8% ** FOREIGN INVESTMENTS 12.7%
Row: 1, Col: 1, Value: 93.5 Row: 1, Col: 1, Value: 97.7
Row: 1, Col: 2, Value: 0.0 Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 0.0 Row: 1, Col: 3, Value: 0.0
Row: 1, Col: 4, Value: 1.3 Row: 1, Col: 4, Value: 0.9
Row: 1, Col: 5, Value: 0.0 Row: 1, Col: 5, Value: 0.0
Row: 1, Col: 6, Value: 0.0 Row: 1, Col: 6, Value: 0.0
Row: 1, Col: 7, Value: 0.0 Row: 1, Col: 7, Value: 0.0
Row: 1, Col: 8, Value: 5.2 Row: 1, Col: 8, Value: 1.4
</TABLE>
INVESTMENTS MAY 31, 2000 (UNAUDITED)
Showing Percentage of Net Assets
<TABLE>
<CAPTION>
<S> <C> <C> <C>
COMMON STOCKS - 93.5%
SHARES VALUE (NOTE 1) (000S)
AEROSPACE & DEFENSE - 0.8%
AEROSPACE & DEFENSE - 0.5%
Boeing Co. 209,900 $ 8,199
Textron, Inc. 68,100 4,273
12,472
SHIP BUILDING & REPAIR - 0.3%
General Dynamics Corp. 149,100 8,806
TOTAL AEROSPACE & DEFENSE 21,278
BASIC INDUSTRIES - 1.0%
CHEMICALS & PLASTICS - 0.8%
E.I. du Pont de Nemours and 200,800 9,839
Co.
Praxair, Inc. 247,300 10,387
20,226
METALS & MINING - 0.2%
Alcoa, Inc. 103,700 6,060
TOTAL BASIC INDUSTRIES 26,286
DURABLES - 1.0%
AUTOS, TIRES, & ACCESSORIES -
0.5%
Danaher Corp. 147,200 7,093
Delphi Automotive Systems 351,400 6,347
Corp.
General Motors Corp. 14,418 1,018
14,458
CONSUMER ELECTRONICS - 0.5%
General Motors Corp. Class H 82,990 8,169
(a)
Sony Corp. 43,600 3,976
12,145
TOTAL DURABLES 26,603
ENERGY - 7.0%
ENERGY SERVICES - 1.5%
Diamond Offshore Drilling, 233,200 9,532
Inc.
Halliburton Co. 198,300 10,113
Nabors Industries, Inc. (a) 244,300 10,505
Schlumberger Ltd. (NY Shares) 130,100 9,570
39,720
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
ENERGY - CONTINUED
OIL & GAS - 5.5%
BP Amoco PLC sponsored ADR 316,754 $ 17,223
Burlington Resources, Inc. 229,900 10,518
Chevron Corp. 142,700 13,191
Conoco, Inc. Class B 697,100 19,867
Exxon Mobil Corp. 758,753 63,214
Royal Dutch Petroleum Co. (NY 400,500 25,006
Shares)
149,019
TOTAL ENERGY 188,739
FINANCE - 12.8%
BANKS - 2.6%
Bank of America Corp. 215,100 11,951
Bank of New York Co., Inc. 593,600 27,862
Chase Manhattan Corp. 400,100 29,882
69,695
CREDIT & OTHER FINANCE - 4.0%
American Express Co. 1,008,300 54,259
Associates First Capital 136,100 3,734
Corp. Class A
Citigroup, Inc. 800,625 49,789
107,782
FEDERAL SPONSORED CREDIT - 1.7%
Fannie Mae 355,900 21,398
Freddie Mac 578,400 25,739
47,137
INSURANCE - 2.0%
AFLAC, Inc. 142,300 7,355
American International Group, 430,387 48,445
Inc.
55,800
SECURITIES INDUSTRY - 2.5%
Charles Schwab Corp. 357,750 10,285
Merrill Lynch & Co., Inc. 241,300 23,798
Morgan Stanley Dean Witter & 453,800 32,645
Co.
66,728
TOTAL FINANCE 347,142
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
HEALTH - 9.3%
DRUGS & PHARMACEUTICALS - 8.8%
American Home Products Corp. 225,900 $ 12,170
Amgen, Inc. (a) 165,100 10,504
Bristol-Myers Squibb Co. 685,628 37,752
Eli Lilly & Co. 615,200 46,832
Genentech, Inc. 105,900 11,371
Merck & Co., Inc. 160,600 11,985
Schering-Plough Corp. 1,029,800 49,817
Warner-Lambert Co. 463,400 56,593
237,024
MEDICAL EQUIPMENT & SUPPLIES
- 0.5%
Johnson & Johnson 73,300 6,560
Medtronic, Inc. 154,000 7,950
14,510
TOTAL HEALTH 251,534
INDUSTRIAL MACHINERY &
EQUIPMENT - 5.8%
ELECTRICAL EQUIPMENT - 5.7%
General Electric Co. 2,934,900 154,454
INDUSTRIAL MACHINERY &
EQUIPMENT - 0.1%
Ingersoll-Rand Co. 91,550 4,171
TOTAL INDUSTRIAL MACHINERY & 158,625
EQUIPMENT
MEDIA & LEISURE - 7.0%
BROADCASTING - 2.7%
AT&T Corp. - Liberty Media 312,700 13,857
Group Class A (a)
Clear Channel Communications, 219,100 16,405
Inc. (a)
Infinity Broadcasting Corp. 421,500 13,330
Class A (a)
Time Warner, Inc. 349,171 27,563
USA Networks, Inc. (a) 139,400 2,640
73,795
ENTERTAINMENT - 2.7%
MGM Grand, Inc. 200,000 6,500
Viacom, Inc. Class B 802,436 49,751
(non-vtg.) (a)
Walt Disney Co. 414,200 17,474
73,725
PUBLISHING - 1.2%
McGraw-Hill Companies, Inc. 611,600 31,459
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
MEDIA & LEISURE - CONTINUED
RESTAURANTS - 0.4%
McDonald's Corp. 297,500 $ 10,654
TOTAL MEDIA & LEISURE 189,633
NONDURABLES - 2.7%
BEVERAGES - 1.2%
Anheuser-Busch Companies, 238,100 18,453
Inc.
The Coca-Cola Co. 275,000 14,678
33,131
HOUSEHOLD PRODUCTS - 1.2%
Avon Products, Inc. 75,700 3,127
Clorox Co. 213,140 8,446
Colgate-Palmolive Co. 185,300 9,751
Procter & Gamble Co. 157,500 10,474
31,798
TOBACCO - 0.3%
Philip Morris Companies, Inc. 344,900 9,011
TOTAL NONDURABLES 73,940
RETAIL & WHOLESALE - 4.8%
APPAREL STORES - 0.4%
The Limited, Inc. 411,400 9,925
GENERAL MERCHANDISE STORES -
2.6%
Kohls Corp. (a) 143,400 7,421
Target Corp. 304,100 19,063
Wal-Mart Stores, Inc. 780,900 44,999
71,483
RETAIL & WHOLESALE,
MISCELLANEOUS - 1.8%
Home Depot, Inc. 761,659 37,178
Lowe's Companies, Inc. 170,200 7,925
Staples, Inc. (a) 190,300 2,807
47,910
TOTAL RETAIL & WHOLESALE 129,318
SERVICES - 1.1%
ADVERTISING - 0.7%
Omnicom Group, Inc. 244,500 20,523
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
SERVICES - CONTINUED
SERVICES - 0.4%
Ecolab, Inc. 257,650 $ 9,855
Gartner Group, Inc. Class B 5,754 64
(a)
9,919
TOTAL SERVICES 30,442
TECHNOLOGY - 30.3%
COMMUNICATIONS EQUIPMENT - 8.1%
Cisco Systems, Inc. (a) 1,578,900 89,899
Comverse Technology, Inc. (a) 115,400 10,545
Corning, Inc. 57,500 11,123
Lucent Technologies, Inc. 429,180 24,624
Nokia AB sponsored ADR 840,600 43,711
Nortel Networks Corp. 754,400 40,203
220,105
COMPUTER SERVICES & SOFTWARE
- 5.2%
America Online, Inc. (a) 431,200 22,854
BEA Systems, Inc. (a) 137,688 4,974
Computer Sciences Corp. (a) 68,800 6,601
Electronic Data Systems Corp. 79,600 5,119
Inktomi Corp. (a) 54,200 6,050
Microsoft Corp. (a) 626,100 39,170
Oracle Corp. (a) 413,100 29,692
Unisys Corp. (a) 594,518 16,126
Yahoo!, Inc. (a) 87,500 9,893
140,479
COMPUTERS & OFFICE EQUIPMENT
- 6.2%
Compaq Computer Corp. 477,400 12,532
Dell Computer Corp. (a) 607,300 26,190
EMC Corp. (a) 356,329 41,446
Hewlett-Packard Co. 118,800 14,271
International Business 219,700 23,577
Machines Corp.
Network Appliance, Inc. (a) 121,000 7,812
Pitney Bowes, Inc. 351,700 15,299
SCI Systems, Inc. (a) 73,600 3,312
Sun Microsystems, Inc. (a) 323,900 24,819
169,258
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
TECHNOLOGY - CONTINUED
ELECTRONIC INSTRUMENTS - 0.6%
Applied Materials, Inc. (a) 147,800 $ 12,341
KLA-Tencor Corp. (a) 89,300 4,426
16,767
ELECTRONICS - 10.2%
Altera Corp. (a) 74,900 6,432
Analog Devices, Inc. (a) 183,600 14,137
Broadcom Corp. Class A (a) 62,900 8,181
Flextronics International 100,131 5,451
Ltd. (a)
Intel Corp. 559,100 69,713
JDS Uniphase Corp. (a) 172,800 15,206
Micron Technology, Inc. (a) 310,700 21,730
Motorola, Inc. 301,100 28,228
Sanmina Corp. (a) 120,900 7,692
Texas Instruments, Inc. 784,000 56,644
Tyco International Ltd. 765,716 36,037
Xilinx, Inc. (a) 76,500 5,824
275,275
TOTAL TECHNOLOGY 821,884
UTILITIES - 9.9%
CELLULAR - 4.1%
China Telecom (Hong Kong) 1,272,700 9,354
Ltd. (a)
Nextel Communications, Inc. 152,400 14,116
Class A (a)
QUALCOMM, Inc. (a) 114,100 7,573
Sprint Corp. - PCS Group 498,800 27,683
Series 1 (a)
Vodafone AirTouch PLC 2,985,151 13,676
Vodafone AirTouch PLC 239,000 10,949
sponsored ADR
VoiceStream Wireless Corp. (a) 238,600 27,320
110,671
ELECTRIC UTILITY - 0.5%
AES Corp. (a) 154,800 13,506
NRG Energy, Inc. 87,900 1,461
14,967
GAS - 0.9%
Dynegy, Inc. Class A 186,235 14,363
Enron Corp. 133,800 9,751
24,114
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
UTILITIES - CONTINUED
TELEPHONE SERVICES - 4.4%
Allegiance Telecom, Inc. (a) 102,300 $ 5,409
AT&T Corp. 254,800 8,838
BellSouth Corp. 573,900 26,794
Level 3 Communications, Inc. 86,300 6,586
(a)
McLeodUSA, Inc. Class A (a) 534,600 10,692
SBC Communications, Inc. 762,100 33,294
Sprint Corp. - FON Group 269,900 16,329
TeraBeam Networks (d) 2,100 32
WorldCom, Inc. (a) 277,100 10,426
118,400
TOTAL UTILITIES 268,152
TOTAL COMMON STOCKS 2,533,576
(Cost $2,131,803)
CONVERTIBLE PREFERRED STOCKS
- 0.3%
MEDIA & LEISURE - 0.3%
BROADCASTING - 0.3%
MediaOne Group, Inc. 72,500 7,141
(Vodafone AirTouch PLC)
$3.63 PIES (Cost $5,695)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CORPORATE BONDS - 1.0%
MOODY'S RATINGS (UNAUDITED) PRINCIPAL AMOUNT (000S)
CONVERTIBLE BONDS - 1.0%
MEDIA & LEISURE - 0.3%
BROADCASTING - 0.3%
Liberty Media Corp. 3.75% Baa3 $ 7,390 7,584
2/15/30 (c)
TECHNOLOGY - 0.5%
COMPUTERS & OFFICE EQUIPMENT
- 0.5%
Juniper Networks, Inc. 4.75% - 17,350 14,064
3/15/07
UTILITIES - 0.2%
CELLULAR - 0.1%
Nextel Communications, Inc. B1 4,940 4,323
5.25% 1/15/10 (c)
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
CONVERTIBLE BONDS - CONTINUED
UTILITIES - CONTINUED
TELEPHONE SERVICES - 0.1%
Level 3 Communications, Inc. Caa1 $ 3,250 $ 2,689
6% 3/15/10
TOTAL UTILITIES 7,012
TOTAL CONVERTIBLE BONDS 28,660
NONCONVERTIBLE BONDS - 0.0%
AEROSPACE & DEFENSE - 0.0%
British Aerospace PLC 7.45% - GBP 36 53
11/30/03
TOTAL CORPORATE BONDS 28,713
(Cost $28,808)
CASH EQUIVALENTS - 8.3%
SHARES
Central Cash Collateral Fund, 8,632,300 8,632
6.54% (b)
Taxable Central Cash Fund, 215,272,588 215,273
6.37% (b)
TOTAL CASH EQUIVALENTS 223,905
(Cost $223,905)
TOTAL INVESTMENT PORTFOLIO - 2,793,335
103.1%
(Cost $2,390,211)
NET OTHER ASSETS - (3.1)% (83,199)
NET ASSETS - 100% $ 2,710,136
</TABLE>
SECURITY TYPE ABBREVIATIONS
PIES - Premium Income Equity
Securities
CURRENCY ABBREVIATIONS
GBP - British pound
LEGEND
(a) Non-income producing
(b) The rate quoted is the annualized seven-day yield of the fund at
period end.
(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 $11,907,000 or 0.4% of net assets.
(d) Restricted securities - Investment in securities not registered
under the Securities Act of 1933.
Additional information on each holding is as follows:
SECURITY ACQUISITION DATE ACQUISITION COST (000S)
TeraBeam Networks 4/7/00 $ 32
INCOME TAX INFORMATION
At May 31, 2000, the aggregate cost of investment securities for
income tax purposes was $2,400,903,000. Net unrealized appreciation
aggregated $392,432,000, of which $481,757,000 related to appreciated
investment securities and $89,325,000 related to depreciated
investment securities.
At May 31, 2000, the fund had a capital loss carryforward of
approximately $25,110,000 of which $13,634,000 and $11,476,000 will
expire on November 30, 2006 and 2007, respectively.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AMOUNTS IN THOUSANDS
MAY 31, 2000 (UNAUDITED)
ASSETS
Investment in securities, at $ 2,793,335
value (cost $2,390,211) -
See accompanying schedule
Cash 25
Receivable for investments 23,388
sold
Receivable for fund shares 6,162
sold
Dividends receivable 1,891
Interest receivable 1,587
Other receivables 23
TOTAL ASSETS 2,826,411
LIABILITIES
Payable for investments $ 98,649
purchased
Payable for fund shares 5,740
redeemed
Accrued management fee 1,079
Distribution fees payable 1,465
Other payables and accrued 710
expenses
Collateral on securities 8,632
loaned, at value
TOTAL LIABILITIES 116,275
NET ASSETS $ 2,710,136
Net Assets consist of:
Paid in capital $ 2,364,144
Accumulated net investment (4,887)
loss
Accumulated undistributed net (52,219)
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 403,098
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS $ 2,710,136
STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
AMOUNTS IN THOUSANDS (EXCEPT
PER-SHARE AMOUNTS)
MAY 31, 2000 (UNAUDITED)
CALCULATION OF MAXIMUM $18.90
OFFERING PRICE CLASS A: NET
ASSET VALUE and redemption
price per share ($181,911
(divided by) 9,623 shares)
Maximum offering price per $20.05
share (100/94.25 of $18.90)
CLASS T: NET ASSET VALUE and $18.85
redemption price per share
($1,361,009 (divided by)
72,220 shares)
Maximum offering price per $19.53
share (100/96.50 of $18.85)
CLASS B: NET ASSET VALUE and $18.61
offering price per share
($662,431 (divided by)
35,591 shares) A
CLASS C: NET ASSET VALUE and $18.62
offering price per share
($371,574 (divided by)
19,955 shares) A
INSTITUTIONAL CLASS: NET $18.97
ASSET VALUE, offering price
and redemption price per
share ($133,211 (divided by)
7,021 shares)
REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS SIX
MONTHS ENDED MAY 31, 2000
(UNAUDITED)
INVESTMENT INCOME $ 8,199
Dividends
Interest 4,041
Security lending 188
TOTAL INCOME 12,428
EXPENSES
Management fee $ 6,021
Transfer agent fees 2,633
Distribution fees 8,147
Accounting and security 271
lending fees
Non-interested trustees' 4
compensation
Custodian fees and expenses 62
Registration fees 292
Audit 16
Legal 7
Miscellaneous 6
Total expenses before 17,459
reductions
Expense reductions (144) 17,315
NET INVESTMENT INCOME (LOSS) (4,887)
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities (16,452)
Foreign currency transactions (128) (16,580)
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 35,948
Assets and liabilities in (28) 35,920
foreign currencies
NET GAIN (LOSS) 19,340
NET INCREASE (DECREASE) IN $ 14,453
NET ASSETS RESULTING FROM
OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
AMOUNTS IN THOUSANDS SIX MONTHS ENDED MAY 31, 2000 YEAR ENDED NOVEMBER 30, 1999
(UNAUDITED)
INCREASE (DECREASE) IN NET
ASSETS
Operations Net investment $ (4,887) $ (1,740)
income (loss)
Net realized gain (loss) (16,580) (15,532)
Change in net unrealized 35,920 250,870
appreciation (depreciation)
NET INCREASE (DECREASE) IN 14,453 233,598
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders - (228)
From net investment income
In excess of net investment - (292)
income
Return of capital - (945)
TOTAL DISTRIBUTIONS - (1,465)
Share transactions - net 684,915 1,028,815
increase (decrease)
TOTAL INCREASE (DECREASE) 699,368 1,260,948
IN NET ASSETS
NET ASSETS
Beginning of period 2,010,768 749,820
End of period (including $ 2,710,136 $ 2,010,768
accumulated net investment
loss of $4,887 and $0,
respectively)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS A
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 18.40 $ 15.09 $ 12.47 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) D (.00) .04 .06 .04
Net realized and unrealized .50 3.32 2.79 2.46
gain (loss)
Total from investment .50 3.36 2.85 2.50
operations
Less Distributions
From net investment income - (.01) (.05) (.03)
In excess of net investment - (.01) - -
income
From net realized gain - - (.18) -
Return of capital - (.03) - -
Total distributions - (.05) (.23) (.03)
Net asset value, end of period $ 18.90 $ 18.40 $ 15.09 $ 12.47
TOTAL RETURN B, C 2.72% 22.31% 23.24% 25.04%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 182 $ 120 $ 35 $ 7
millions)
Ratio of expenses to average 1.01% A 1.04% 1.12% 1.50% A, F
net assets
Ratio of expenses to average 1.00% A, G 1.03% G 1.11% G 1.50% A
net assets after expense
reductions
Ratio of net investment (.01)% A .22% .46% .34% A
income (loss) to average net
assets
Portfolio turnover 104% A 55% 54% 82% 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 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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS T
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 18.37 $ 15.07 $ 12.46 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) D (.02) .00 .04 .03
Net realized and unrealized .50 3.32 2.78 2.45
gain (loss)
Total from investment .48 3.32 2.82 2.48
operations
Less Distributions
From net investment income - (.00) (.03) (.02)
In excess of net investment - (.01) - -
income
From net realized gain - - (.18) -
Return of capital - (.01) - -
Total distributions - (.02) (.21) (.02)
Net asset value, end of period $ 18.85 $ 18.37 $ 15.07 $ 12.46
TOTAL RETURN B, C 2.61% 22.05% 23.00% 24.83%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 1,361 $ 999 $ 400 $ 133
millions)
Ratio of expenses to average 1.24% A 1.27% 1.31% 1.59% A
net assets
Ratio of expenses to average 1.23% A, F 1.25% F 1.30% F 1.59% A
net assets after expense
reductions
Ratio of net investment (.24)% A .00% .27% .24% A
income (loss) to average
net assets
Portfolio turnover 104% A 55% 54% 82% 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 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 OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS B
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 18.19 $ 14.98 $ 12.41 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) D (.07) (.09) (.03) (.04)
Net realized and unrealized .49 3.30 2.77 2.46
gain (loss)
Total from investment .42 3.21 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 $ 18.61 $ 18.19 $ 14.98 $ 12.41
TOTAL RETURN B, C 2.31% 21.43% 22.39% 24.22%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 662 $ 508 $ 158 $ 29
millions)
Ratio of expenses to average 1.76% A 1.78% 1.83% 2.25% A, F
net assets
Ratio of expenses to average 1.75% A, G 1.76% G 1.82% G 2.25% A
net assets after expense
reductions
Ratio of net investment (.76)% A (.51)% (.25)% (.42)% A
income (loss) to average net
assets
Portfolio turnover 104% A 55% 54% 82% 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 (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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS C
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 18.19 $ 14.98 $ 12.45 $ 12.22
period
Income from Investment
Operations
Net investment income (loss) D (.07) (.08) (.04) -
Net realized and unrealized .50 3.29 2.76 .23
gain (loss)
Total from investment .43 3.21 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 $ 18.62 $ 18.19 $ 14.98 $ 12.45
TOTAL RETURN B, C 2.36% 21.43% 22.20% 1.88%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 372 $ 253 $ 60 $ 0.4
millions)
Ratio of expenses to average 1.74% A 1.76% 1.87% 2.24% A, F
net assets
Ratio of expenses to average 1.73% A, G 1.75% G 1.85% G 2.24% A
net assets after expense
reductions
Ratio of net investment (.74)% A (.50)% (.27)% .19% A
income (loss) to average
net assets
Portfolio turnover 104% A 55% 54% 82% 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 (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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 18.44 $ 15.10 $ 12.47 $ 10.00
period
Income from Investment
Operations
Net investment income D .03 .09 .11 .07
Net realized and unrealized .50 3.33 2.79 2.45
gain (loss)
Total from investment .53 3.42 2.90 2.52
operations
Less Distributions
From net investment income - (.01) (.09) (.05)
In excess of net investment - (.02) - -
income
From net realized gain - - (.18) -
Return of capital - (.05) - -
Total distributions - (.08) (.27) (.05)
Net asset value, end of period $ 18.97 $ 18.44 $ 15.10 $ 12.47
TOTAL RETURN B, C 2.87% 22.71% 23.69% 25.26%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 133 $ 131 $ 97 $ 74
millions)
Ratio of expenses to average .71% A .74% .76% 1.19% A
net assets
Ratio of expenses to average .70% A, F .72% F .75% F 1.19% A
net assets after expense
reductions
Ratio of net investment .29% A .53% .82% .64% A
income to average net assets
Portfolio turnover 104% A 55% 54% 82% 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 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
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.
NOTES TO FINANCIAL STATEMENTS
For the period ended May 31, 2000 (Unaudited)
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.
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. Foreign securities are valued based
on quotations from the principal market in which such securities are
normally traded. If trading or events occurring in other markets after
the close of the principal market in which foreign securities are
traded, and before the close of the business of the fund, are expected
to materially affect the value of those securities, then they are
valued at their fair value taking this trading or these events into
account. Fair value is determined in good faith under consistently
applied procedures under the general supervision of the Board of
Trustees. 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. 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.
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,
net operating losses, capital loss carryforwards and losses deferred
due to wash sales and excise tax regulations.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Accumulated net investment loss and accumulated undistributed net
realized gain (loss) on investments and foreign currency transactions
may include temporary book and tax basis differences that will reverse
in a subsequent period. Any taxable income or gain remaining at fiscal
year end is distributed in the following year. For the period ended
November 30, 1999, the fund's distributions exceeded the aggregate
amount of taxable income and net realized gains resulting in a return
of capital. This was due to reductions in taxable income available for
distribution after certain distributions had been made.
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 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, Federal Agency,
or other obligations found to be satisfactory by FMR 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.
CENTRAL CASH FUNDS. Pursuant to an Exemptive Order issued by the SEC,
the fund may invest in the Taxable Central Cash Fund and the Central
Cash Collateral Fund (the Cash Funds) managed by Fidelity Investments
Money Management, Inc., an affiliate of FMR. The Cash Funds are
open-end money market funds available only to investment companies and
other accounts managed by FMR and its affiliates. The Cash Funds seek
preservation of capital, liquidity, and current income. Income
distributions from the Cash Funds are declared daily and paid monthly
from net interest income. Income distributions earned by the fund are
recorded as either interest income or security lending 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, restricted securities (excluding 144A
issues) amounted to $32,000 or 0.0% of net assets.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $1,815,252,000 and $1,246,890,000, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus a
fixed individual fund fee rate applied to the average net assets of
the fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds advised by FMR. The rates ranged from .2167% to .5200% for the
period. The annual individual fund 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 an annualized rate of .48% of average net
assets.
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the
1940 Act, the Board of Trustees have adopted separate Distribution and
Service 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 $ 210,000 $ 1,000
CLASS T 3,168,000 47,000
CLASS B 3,111,000 2,334,000
CLASS C 1,658,000 1,062,000
$ 8,147,000 $ 3,444,000
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 Class C share redemptions occurring within one year of
purchase. Contingent deferred sales charges are based on declining
rates ranging from 5%
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
SALES LOAD - CONTINUED
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 is 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 $ 593,000 $ 214,000
CLASS T 1,017,000 331,000
CLASS B 741,000 741,000*
CLASS C 95,000 95,000*
$ 2,446,000 $ 1,381,000
* 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.
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 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 $ 187,000 .22 *
CLASS T 1,301,000 .21 *
CLASS B 686,000 .22 *
CLASS C 333,000 .20 *
INSTITUTIONAL CLASS 126,000 .18 *
$ 2,633,000
* ANNUALIZED
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
ACCOUNTING AND SECURITY LENDING FEES. Fidelity Service Company, Inc.,
an affiliate of FMR, maintains the fund's accounting records and
administers the security lending program. The security lending fee is
based on the number and duration of lending transactions. The
accounting fee is based on the level of average net assets for the
month plus out-of-pocket expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $54,000 for the
period.
5. SECURITY LENDING.
The fund lends portfolio securities from time to time in order to earn
additional income. The fund receives collateral in the form of U.S.
Treasury obligations, letters of credit, and/or cash against the
loaned securities, and maintains collateral in an amount not less than
100% of the market value of the loaned securities during the period of
the loan. The market value of the loaned securities is determined at
the close of business of the fund and any additional required
collateral is delivered to the fund on the next business day. If the
borrower defaults on its obligation to return the securities loaned
because of insolvency or other reasons, the fund could experience
delays and costs in recovering the securities loaned or in gaining
access to the collateral. At period end, the value of the securities
loaned amounted to $8,487,000. The fund received cash collateral of
$8,632,000 which was invested in cash equivalents.
6. 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 $126,000 under this arrangement.
In addition, through arrangements with the fund's custodian and each
class' transfer agent, 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 $1,000 under the custodian
arrangement, and each applicable class' expenses were reduced as
follows under the transfer agent arrangements:
TRANSFER AGENT CREDITS
CLASS A $ 2,000
CLASS T 15,000
$ 17,000
7. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
AMOUNTS IN THOUSANDS SIX MONTHS ENDED MAY 31, YEAR ENDED NOVEMBER 30,
2000 1999
FROM NET INVESTMENT INCOME
Class A $ - $ 21
Class T - 122
Institutional Class - 85
Total $ - $ 228
IN EXCESS OF NET INVESTMENT
INCOME
Class A $ - $ 28
Class T - 156
Institutional Class - 108
Total $ - $ 292
RETURN OF CAPITAL
Class A $ - $ 151
Class T - 449
Institutional Class - 345
Total $ - $ 945
Total Distributions $ - $ 1,465
8. SHARE TRANSACTIONS.
Transactions for each class of shares for the periods were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SHARES DOLLARS
AMOUNTS IN THOUSANDS SIX MONTHS ENDED MAY 31, YEAR ENDED NOVEMBER 30, SIX MONTHS ENDED MAY 31,
2000 1999 2000
CLASS A Shares sold 5,390 $ 91,500
4,589
Reinvestment of distributions - 11 -
Shares redeemed (1,485) (1,176) (29,699)
Net increase (decrease) 3,104 4,225 $ 61,801
CLASS T Shares sold 27,234 38,799 $ 541,255
Reinvestment of distributions - 41 -
Shares redeemed (9,385) (11,041) (185,856)
Net increase (decrease) 17,849 27,799 $ 355,399
CLASS B Shares sold 10,588 19,885 $ 207,373
Shares redeemed (2,915) (2,529) (57,253)
Net increase (decrease) 7,673 17,356 $ 150,120
CLASS C Shares sold 7,921 11,186 $ 155,815
Shares redeemed (1,899) (1,236) (37,072)
Net increase (decrease) 6,022 9,950 $ 118,743
INSTITUTIONAL CLASS Shares 1,283 2,418 $ 25,669
sold
Reinvestment of distributions - 26 -
Shares redeemed (1,370) (1,763) (26,817)
Net increase (decrease) (87) 681 $ (1,148)
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
DOLLARS
AMOUNTS IN THOUSANDS YEAR ENDED NOVEMBER 30,
1999
CLASS A Shares sold $ 92,591
Reinvestment of distributions 176
Shares redeemed (20,333)
Net increase (decrease) $ 72,434
CLASS T Shares sold $ 667,872
Reinvestment of distributions 684
Shares redeemed (190,532)
Net increase (decrease) $ 478,024
CLASS B Shares sold $ 340,104
Shares redeemed (43,498)
Net increase (decrease) $ 296,606
CLASS C Shares sold $ 191,357
Shares redeemed (21,381)
Net increase (decrease) $ 169,976
INSTITUTIONAL CLASS Shares $ 41,605
sold
Reinvestment of distributions 422
Shares redeemed (30,252)
Net increase (decrease) $ 11,775
</TABLE>
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research
(U.K.) Inc.
Fidelity Management & Research
(Far East) Inc.
Fidelity Investments Japan Ltd.
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
Robert A. Dwight, Treasurer
Maria F. Dwyer, Deputy Treasurer
John H. Costello, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
Donald J. Kirk *
Ned C. Lautenbach *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
* INDEPENDENT TRUSTEES
ADVISORY BOARD
J. Michael Cook
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 Telecommunications & Utilities Growth Fund
GROWTH FUNDS
Fidelity Advisor Latin America Fund
Fidelity Advisor Emerging Asia 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 (registered trademark)
Growth Fund
Fidelity Advisor Small Cap Fund
Fidelity Advisor Value Strategies Fund
Fidelity Advisor Mid Cap Fund
Fidelity Advisor Dynamic Capital Appreciation Fund
Fidelity Advisor Equity Growth Fund
Fidelity Advisor Large Cap Fund
Fidelity Advisor Dividend Growth Fund
Fidelity Advisor Growth
Opportunities Fund
AGAII-SANN-0700 106156
1.704641.102
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 High Income 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
MONEY MARKET FUNDS
Prime Fund
Treasury Fund
Tax-Exempt Fund
(2_FIDELITY_LOGOS)(registered trademark)
FIDELITY(REGISTERED TRADEMARK) ADVISOR
BALANCED FUND -
CLASS A, CLASS T, CLASS B
AND CLASS C
SEMIANNUAL REPORT
MAY 31, 2000
(2_FIDELITY_LOGOS)(registered trademark)
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over
time.
FUND TALK 12 The managers' 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 46 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 55 Notes to the financial
statements.
INDEPENDENT AUDITORS' REPORT 64 The auditors' opinion.
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 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 technology sell-off that began in mid-March continued to hamper
equity markets, driving the tech-heavy NASDAQ index down more than 16%
year to date through the end of May. Broader equity indexes, including
the S&P 500(registered trademark), also were down, but not as much as
more concentrated performance measures. In bond markets, Treasuries
got a boost late in the period as economic reports showed the first
signs of a slowing economy.
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 an investment in a money market fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although money market funds seek to preserve the
value of your investment at $1.00 per share, it is possible to lose
money by investing in these types of funds.
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 BALANCED 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 past 10 years total returns would
have been lower.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY ADV BALANCED - CL A -1.51% -2.09% 65.27% 187.17%
FIDELITY ADV BALANCED - CL A -7.18% -7.72% 55.76% 170.65%
(INCL. 5.75% SALES CHARGE)
Fidelity Balanced 60/40 2.47% 7.36% 115.86% 260.76%
Composite
S&P 500 (registered trademark) 2.90% 10.48% 190.44% 398.93%
LB Aggregate Bond 1.38% 2.11% 33.62% 111.28%
Balanced Funds Average 2.78% 5.39% 89.23% 205.16%
</TABLE>
CUMULATIVE TOTAL RETURNS show Class A's performance in percentage
terms over a set period - in this case, six months, 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 Fidelity Balanced 60/40 Composite Index, a hypothetical
combination of unmanaged indices. The composite index combines the
total returns of the Standard & Poor's 500SM Index and the Lehman
Brothers Aggregate Bond Index. To measure how Class A's performance
stacked up against its peers, you can compare it to the balanced funds
average, which reflects the performance of mutual funds with similar
objectives tracked by Lipper Inc. The past six months average
represents a peer group of 476 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 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY ADV BALANCED - CL A -2.09% 10.57% 11.13%
FIDELITY ADV BALANCED - CL A -7.72% 9.27% 10.47%
(INCL. 5.75% SALES CHARGE)
Fidelity Balanced 60/40 7.36% 16.64% 13.69%
Composite
AVERAGE ANNUAL TOTAL RETURNS take Class A shares' 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 Balanced -CL A Fid Balanced 60/40 Comp
LB Aggregate Bond S&P 500
00249 F0021
LB001 SP001
1990/05/31 9425.00 10000.00
10000.00 10000.00
1990/06/30 9464.98 10023.60
10161.00 9932.00
1990/07/31 9440.59 10059.68
10301.22 9900.22
1990/08/31 8863.26 9460.13
10163.19 9005.24
1990/09/30 8658.69 9215.11
10247.54 8566.68
1990/10/31 8576.30 9238.15
10377.68 8529.85
1990/11/30 8963.51 9675.67
10600.80 9080.87
1990/12/31 9237.44 9898.01
10766.18 9334.23
1991/01/31 9714.37 10206.04
10899.68 9741.20
1991/02/28 10283.35 10678.58
10992.32 10437.70
1991/03/31 10544.53 10863.11
11068.17 10690.29
1991/04/30 10747.31 10925.68
11187.71 10715.95
1991/05/31 11195.12 11234.22
11252.60 11178.88
1991/06/30 10965.67 10923.25
11246.97 10666.88
1991/07/31 11434.65 11289.40
11403.30 11163.96
1991/08/31 11724.57 11547.48
11649.61 11428.55
1991/09/30 11810.89 11525.54
11886.10 11237.69
1991/10/31 12154.98 11669.38
12018.04 11388.28
1991/11/30 11871.11 11430.15
12128.60 10929.33
1991/12/31 12422.65 12350.51
12488.82 12179.64
1992/01/31 12504.38 12145.49
12318.97 11953.10
1992/02/29 12767.72 12271.81
12399.05 12108.49
1992/03/31 12722.40 12100.74
12329.61 11872.38
1992/04/30 12823.15 12349.04
12418.39 12221.42
1992/05/31 13079.61 12478.71
12653.09 12281.31
1992/06/30 12960.68 12436.03
12827.71 12098.32
1992/07/31 13339.16 12842.69
13089.39 12593.14
1992/08/31 13339.16 12736.61
13221.59 12334.98
1992/09/30 13449.52 12887.41
13378.93 12480.53
1992/10/31 13403.01 12845.91
13200.99 12524.21
1992/11/30 13486.73 13109.77
13203.63 12951.29
1992/12/31 13565.48 13289.90
13413.57 13110.59
1993/01/31 13821.43 13458.94
13671.11 13220.72
1993/02/28 14116.76 13662.98
13910.35 13400.52
1993/03/31 14649.57 13858.91
13968.78 13683.27
1993/04/30 15066.43 13696.48
14066.56 13352.14
1993/05/31 15354.26 13923.84
14084.85 13709.97
1993/06/30 15255.40 14048.88
14339.78 13749.73
1993/07/31 15415.45 14047.19
14421.52 13694.73
1993/08/31 15975.65 14464.96
14673.90 14213.77
1993/09/30 15826.29 14413.75
14713.51 14104.32
1993/10/31 16037.98 14614.10
14767.95 14396.28
1993/11/30 15826.29 14481.11
14642.43 14259.51
1993/12/31 16231.79 14617.53
14721.50 14432.05
1994/01/31 16682.96 14994.66
14920.24 14922.74
1994/02/28 16389.17 14646.48
14660.62 14518.34
1994/03/31 15734.63 14118.62
14298.51 13885.34
1994/04/30 15607.74 14181.87
14184.12 14063.07
1994/05/31 15671.18 14320.86
14182.70 14293.70
1994/06/30 15373.77 14097.74
14151.50 13943.51
1994/07/31 15671.05 14487.40
14433.11 14400.86
1994/08/31 15862.16 14850.74
14450.43 14991.29
1994/09/30 15756.16 14545.11
14238.01 14624.00
1994/10/31 15607.22 14736.24
14225.20 14953.04
1994/11/30 15394.44 14401.25
14193.90 14408.45
1994/12/31 15405.08 14569.14
14291.84 14622.13
1995/01/31 15362.17 14911.20
14574.82 15001.28
1995/02/28 15630.37 15401.81
14921.70 15585.88
1995/03/31 15890.06 15712.09
15012.72 16045.82
1995/04/30 16063.13 16077.71
15222.90 16518.37
1995/05/31 16376.82 16712.17
15812.03 17178.61
1995/06/30 16573.43 16993.90
15927.45 17577.67
1995/07/31 16824.22 17317.06
15892.41 18160.55
1995/08/31 16867.83 17426.95
16084.71 18206.13
1995/09/30 17030.79 17935.82
16240.73 18974.43
1995/10/31 16832.76 17990.67
16451.86 18906.69
1995/11/30 17305.84 18572.49
16698.64 19736.69
1995/12/31 17571.35 18891.12
16932.42 20116.82
1996/01/31 17727.93 19326.82
17044.18 20801.60
1996/02/29 17437.13 19299.80
16747.61 20994.43
1996/03/31 17303.72 19357.28
16630.37 21196.61
1996/04/30 17281.19 19485.11
16537.24 21509.04
1996/05/31 17371.31 19771.04
16504.17 22063.76
1996/06/30 17473.18 19922.21
16725.32 22147.83
1996/07/31 17109.63 19415.62
16770.48 21169.33
1996/08/31 17245.96 19648.11
16741.97 21615.80
1996/09/30 17917.90 20448.34
17033.28 22832.33
1996/10/31 18387.91 20968.30
17411.42 23462.05
1996/11/30 19373.80 22062.71
17709.16 25235.54
1996/12/31 19030.73 21718.40
17544.46 24735.63
1997/01/31 19682.15 22559.51
17598.85 26281.11
1997/02/28 19984.59 22688.19
17642.85 26487.15
1997/03/31 19293.04 22028.10
17447.01 25398.80
1997/04/30 20090.08 22949.32
17708.72 26915.11
1997/05/31 20898.84 23874.82
17876.95 28553.70
1997/06/30 21695.05 24630.22
18089.69 29832.90
1997/07/31 22862.34 26072.12
18578.11 32206.71
1997/08/31 21848.33 25107.14
18420.19 30402.49
1997/09/30 22733.23 26080.84
18692.81 32067.63
1997/10/31 22246.77 25709.45
18963.86 30996.57
1997/11/30 22780.69 26470.81
19051.09 32431.40
1997/12/31 23236.04 26850.46
19243.51 32988.25
1998/01/31 23453.44 27166.11
19489.82 33353.10
1998/02/28 24323.03 28332.95
19474.23 35758.53
1998/03/31 25169.84 29242.04
19540.45 37589.72
1998/04/30 25337.29 29479.37
19642.06 37967.87
1998/05/31 25298.65 29287.34
19828.66 37315.21
1998/06/30 25855.76 30100.51
19996.87 38830.95
1998/07/31 25803.87 29933.72
20039.30 38417.40
1998/08/31 23118.40 27531.92
20365.47 32863.01
1998/09/30 24338.80 28847.96
20842.26 34968.22
1998/10/31 25148.79 30194.98
20732.30 37812.53
1998/11/30 26011.03 31361.45
20849.72 40104.35
1998/12/31 26849.20 32483.40
20912.41 42415.16
1999/01/31 27166.03 33391.28
21061.79 44188.96
1999/02/28 26660.28 32535.40
20694.05 42815.57
1999/03/31 27367.60 33388.65
20808.87 44528.62
1999/04/30 28341.89 34206.87
20874.83 46253.21
1999/05/31 27643.89 33601.89
20691.13 45161.18
1999/06/30 28244.75 34677.91
20625.05 47667.62
1999/07/31 27585.51 33970.06
20538.43 46179.44
1999/08/31 27248.56 33862.27
20527.99 45950.85
1999/09/30 26744.21 33462.55
20766.21 44691.34
1999/10/31 27481.37 34782.44
20842.82 47519.41
1999/11/30 27481.37 35205.75
20841.37 48485.47
1999/12/31 28134.64 36382.02
20740.88 51341.27
2000/01/31 27252.51 35237.71
20673.03 48761.88
2000/02/29 26787.45 35007.92
20923.01 47838.82
2000/03/31 28251.56 37247.17
21198.47 52518.89
2000/04/30 27549.18 36532.20
21137.98 50938.60
2000/05/31 27065.31 36075.70
21128.28 49893.34
IMATRL PRASUN SHR__CHT 20000531 20000622 092305 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Balanced Fund - Class A on May 31, 1990,
and the current 5.75% sales charge was paid. As the chart shows, by
May 31, 2000, the value of the investment would have grown to $27,065
- a 170.65% increase on the initial investment. For comparison, look
at how both the Standard & Poor's 500 Index, a market
capitalization-weighted index of common stocks, and the Lehman
Brothers Aggregate Bond Index, a market value-weighted index of
investment-grade fixed-rate debt issues, including government,
corporate, asset-backed, and mortgage-backed securities, with
maturities of one year or more, did over the same period. With
dividends and capital gains, if any, reinvested, the Standard & Poor's
500 Index would have grown to $49,893 - a 398.93% increase. If $10,000
was invested in the Lehman Brothers Aggregate Bond Index, it would
have grown to $21,128 - a 111.28% increase. You can also look at how
the Fidelity Balanced 60/40 Composite Index did over the same period.
The composite index combines the total returns of the Standard &
Poor's 500 Index (60%) and the Lehman Brothers Aggregate Bond Index
(40%). With dividends and interest, if any, reinvested, the same
$10,000 would have grown to $36,076 - a 260.76% increase.
(checkmark)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.
FIDELITY ADVISOR BALANCED 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).
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY ADV BALANCED - CL T -1.63% -2.36% 64.91% 186.54%
FIDELITY ADV BALANCED - CL T -5.07% -5.77% 59.14% 176.51%
(INCL. 3.50% SALES CHARGE)
Fidelity Balanced 60/40 2.47% 7.36% 115.86% 260.76%
Composite
S&P 500 2.90% 10.48% 190.44% 398.93%
LB Aggregate Bond 1.38% 2.11% 33.62% 111.28%
Balanced Funds Average 2.78% 5.39% 89.23% 205.16%
</TABLE>
CUMULATIVE TOTAL RETURNS show Class T's performance in percentage
terms over a set period - in this case, six months, 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 Fidelity Balanced 60/40 Composite Index, a hypothetical
combination of unmanaged indices. The composite index combines the
total returns of the Standard & Poor's 500 Index and the Lehman
Brothers Aggregate Bond Index. To measure how Class T's performance
stacked up against its peers, you can compare it to the balanced funds
average, which reflects the performance of mutual funds with similar
objectives tracked by Lipper Inc. The past six months average
represents a peer group of 476 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 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY ADV BALANCED - CL T -2.36% 10.52% 11.10%
FIDELITY ADV BALANCED - CL T -5.77% 9.74% 10.71%
(INCL. 3.50% SALES CHARGE)
Fidelity Balanced 60/40 7.36% 16.64% 13.69%
Composite
AVERAGE ANNUAL TOTAL RETURNS take Class T shares' 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 Balanced -CL T Fid Balanced 60/40 Comp
S&P 500 LB Aggregate Bond
00170 F0021
SP001 LB001
1990/05/31 9650.00 10000.00
10000.00 10000.00
1990/06/30 9690.94 10023.60
9932.00 10161.00
1990/07/31 9665.96 10059.68
9900.22 10301.22
1990/08/31 9074.85 9460.13
9005.24 10163.19
1990/09/30 8865.39 9215.11
8566.68 10247.54
1990/10/31 8781.04 9238.15
8529.85 10377.68
1990/11/30 9177.49 9675.67
9080.87 10600.80
1990/12/31 9457.96 9898.01
9334.23 10766.18
1991/01/31 9946.28 10206.04
9741.20 10899.68
1991/02/28 10528.84 10678.58
10437.70 10992.32
1991/03/31 10796.26 10863.11
10690.29 11068.17
1991/04/30 11003.88 10925.68
10715.95 11187.71
1991/05/31 11462.38 11234.22
11178.88 11252.60
1991/06/30 11227.45 10923.25
10666.88 11246.97
1991/07/31 11707.63 11289.40
11163.96 11403.30
1991/08/31 12004.46 11547.48
11428.55 11649.61
1991/09/30 12092.85 11525.54
11237.69 11886.10
1991/10/31 12445.15 11669.38
11388.28 12018.04
1991/11/30 12154.50 11430.15
10929.33 12128.60
1991/12/31 12719.21 12350.51
12179.64 12488.82
1992/01/31 12802.89 12145.49
11953.10 12318.97
1992/02/29 13072.52 12271.81
12108.49 12399.05
1992/03/31 13026.11 12100.74
11872.38 12329.61
1992/04/30 13129.27 12349.04
12221.42 12418.39
1992/05/31 13391.86 12478.71
12281.31 12653.09
1992/06/30 13270.09 12436.03
12098.32 12827.71
1992/07/31 13657.61 12842.69
12593.14 13089.39
1992/08/31 13657.61 12736.61
12334.98 13221.59
1992/09/30 13770.60 12887.41
12480.53 13378.93
1992/10/31 13722.98 12845.91
12524.21 13200.99
1992/11/30 13808.69 13109.77
12951.29 13203.63
1992/12/31 13889.32 13289.90
13110.59 13413.57
1993/01/31 14151.39 13458.94
13220.72 13671.11
1993/02/28 14453.77 13662.98
13400.52 13910.35
1993/03/31 14999.29 13858.91
13683.27 13968.78
1993/04/30 15426.10 13696.48
13352.14 14066.56
1993/05/31 15720.80 13923.84
13709.97 14084.85
1993/06/30 15619.58 14048.88
13749.73 14339.78
1993/07/31 15783.46 14047.19
13694.73 14421.52
1993/08/31 16357.03 14464.96
14213.77 14673.90
1993/09/30 16204.11 14413.75
14104.32 14713.51
1993/10/31 16420.85 14614.10
14396.28 14767.95
1993/11/30 16204.11 14481.11
14259.51 14642.43
1993/12/31 16619.28 14617.53
14432.05 14721.50
1994/01/31 17081.23 14994.66
14922.74 14920.24
1994/02/28 16780.43 14646.48
14518.34 14660.62
1994/03/31 16110.26 14118.62
13885.34 14298.51
1994/04/30 15980.33 14181.87
14063.07 14184.12
1994/05/31 16045.30 14320.86
14293.70 14182.70
1994/06/30 15740.78 14097.74
13943.51 14151.50
1994/07/31 16045.16 14487.40
14400.86 14433.11
1994/08/31 16240.84 14850.74
14991.29 14450.43
1994/09/30 16132.31 14545.11
14624.00 14238.01
1994/10/31 15979.81 14736.24
14953.04 14225.20
1994/11/30 15761.95 14401.25
14408.45 14193.90
1994/12/31 15772.84 14569.14
14622.13 14291.84
1995/01/31 15728.91 14911.20
15001.28 14574.82
1995/02/28 16003.50 15401.81
15585.88 14921.70
1995/03/31 16269.40 15712.09
16045.82 15012.72
1995/04/30 16446.60 16077.71
16518.37 15222.90
1995/05/31 16767.78 16712.17
17178.61 15812.03
1995/06/30 16969.09 16993.90
17577.67 15927.45
1995/07/31 17225.85 17317.06
18160.55 15892.41
1995/08/31 17270.51 17426.95
18206.13 16084.71
1995/09/30 17437.36 17935.82
18974.43 16240.73
1995/10/31 17234.60 17990.67
18906.69 16451.86
1995/11/30 17718.98 18572.49
19736.69 16698.64
1995/12/31 17990.82 18891.12
20116.82 16932.42
1996/01/31 18151.15 19326.82
20801.60 17044.18
1996/02/29 17853.40 19299.80
20994.43 16747.61
1996/03/31 17716.80 19357.28
21196.61 16630.37
1996/04/30 17693.73 19485.11
21509.04 16537.24
1996/05/31 17786.01 19771.04
22063.76 16504.17
1996/06/30 17890.31 19922.21
22147.83 16725.32
1996/07/31 17518.08 19415.62
21169.33 16770.48
1996/08/31 17657.66 19648.11
21615.80 16741.97
1996/09/30 18345.31 20448.34
22832.33 17033.28
1996/10/31 18837.65 20968.30
23462.05 17411.42
1996/11/30 19845.76 22062.71
25235.54 17709.16
1996/12/31 19506.75 21718.40
24735.63 17544.46
1997/01/31 20173.65 22559.51
26281.11 17598.85
1997/02/28 20483.28 22688.19
26487.15 17642.85
1997/03/31 19774.89 22028.10
25398.80 17447.01
1997/04/30 20603.34 22949.32
26915.11 17708.72
1997/05/31 21431.80 23874.82
28553.70 17876.95
1997/06/30 22259.40 24630.22
29832.90 18089.69
1997/07/31 23467.84 26072.12
32206.71 18578.11
1997/08/31 22428.58 25107.14
30402.49 18420.19
1997/09/30 23347.73 26080.84
32067.63 18692.81
1997/10/31 22861.07 25709.45
30996.57 18963.86
1997/11/30 23396.40 26470.81
32431.40 19051.09
1997/12/31 23863.34 26850.46
32988.25 19243.51
1998/01/31 24086.24 27166.11
33353.10 19489.82
1998/02/28 24964.72 28332.95
35758.53 19474.23
1998/03/31 25845.95 29242.04
37589.72 19540.45
1998/04/30 26017.55 29479.37
37967.87 19642.06
1998/05/31 25977.95 29287.34
37315.21 19828.66
1998/06/30 26535.42 30100.51
38830.95 19996.87
1998/07/31 26482.27 29933.72
38417.40 20039.30
1998/08/31 23731.73 27531.92
32863.01 20365.47
1998/09/30 24981.62 28847.96
34968.22 20842.26
1998/10/31 25810.78 30194.98
37812.53 20732.30
1998/11/30 26693.43 31361.45
40104.35 20849.72
1998/12/31 27550.84 32483.40
42415.16 20912.41
1999/01/31 27874.90 33391.28
44188.96 21061.79
1999/02/28 27342.83 32535.40
42815.57 20694.05
1999/03/31 28036.54 33388.65
44528.62 20808.87
1999/04/30 29017.67 34206.87
46253.21 20874.83
1999/05/31 28318.99 33601.89
45161.18 20691.13
1999/06/30 28932.98 34677.91
47667.62 20625.05
1999/07/31 28244.45 33970.06
46179.44 20538.43
1999/08/31 27900.19 33862.27
45950.85 20527.99
1999/09/30 27370.46 33462.55
44691.34 20766.21
1999/10/31 28123.23 34782.44
47519.41 20842.82
1999/11/30 28108.17 35205.75
48485.47 20841.37
1999/12/31 28790.04 36382.02
51341.27 20740.88
2000/01/31 27858.24 35237.71
48761.88 20673.03
2000/02/29 27383.65 35007.92
47838.82 20923.01
2000/03/31 28877.16 37247.17
52518.89 21198.47
2000/04/30 28144.88 36532.20
50938.60 21137.98
2000/05/31 27651.39 36075.70
49893.34 21128.28
IMATRL PRASUN SHR__CHT 20000531 20000622 092849 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Balanced Fund - Class T on May 31, 1990,
and the current 3.50% sales charge was paid. As the chart shows, by
May 31, 2000, the value of the investment would have grown to $27,651
- a 176.51% increase on the initial investment. For comparison, look
at how both the Standard & Poor's 500 Index, a market
capitalization-weighted index of common stocks, and the Lehman
Brothers Aggregate Bond Index, a market value-weighted index of
investment-grade fixed-rate debt issues, including government,
corporate, asset-backed, and mortgage-backed securities, with
maturities of one year or more, did over the same period. With
dividends and capital gains, if any, reinvested, the Standard & Poor's
500 Index would have grown to $49,893 - a 398.93% increase. If $10,000
was invested in the Lehman Brothers Aggregate Bond Index, it would
have grown to $21,128 - a 111.28% increase. You can also look at how
the Fidelity Balanced 60/40 Composite Index did over the same period.
The composite index combines the total returns of the Standard &
Poor's 500 Index (60%) and the Lehman Brothers Aggregate Bond Index
(40%). With dividends and interest, if any, reinvested, the same
$10,000 would have grown to $36,076 - a 260.76% increase.
(checkmark)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.
FIDELITY ADVISOR BALANCED 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. Returns prior to
December 31, 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). Had Class B shares' 12b-1 fee been reflected,
returns prior to December 31, 1996 would have been lower. Class B
shares' contingent deferred sales charges included in the past six
month, past one year, past five years and past 10 years total return
figures are 5%, 5%, 2% and 0%, respectively.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY ADV BALANCED - CL B -1.86% -2.80% 61.49% 180.60%
FIDELITY ADV BALANCED - CL B -6.51% -7.36% 59.49% 180.60%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
Fidelity Balanced 60/40 2.47% 7.36% 115.86% 260.76%
Composite
S&P 500 2.90% 10.48% 190.44% 398.93%
LB Aggregate Bond 1.38% 2.11% 33.62% 111.28%
Balanced Funds Average 2.78% 5.39% 89.23% 205.16%
</TABLE>
CUMULATIVE TOTAL RETURNS show Class B's performance in percentage
terms over a set period - in this case, six months, 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 Fidelity Balanced 60/40 Composite Index, a hypothetical
combination of unmanaged indices. The composite index combines the
total returns of the Standard & Poor's 500 Index and the Lehman
Brothers Aggregate Bond Index. To measure how Class B's performance
stacked up against its peers, you can compare it to the balanced funds
average, which reflects the performance of mutual funds with similar
objectives tracked by Lipper Inc. The past six months average
represents a peer group of 476 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 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY ADV BALANCED - CL B -2.80% 10.06% 10.87%
FIDELITY ADV BALANCED - CL B -7.36% 9.79% 10.87%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
Fidelity Balanced 60/40 7.36% 16.64% 13.69%
Composite
AVERAGE ANNUAL TOTAL RETURNS take Class B shares' 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 Balanced -CL B Fid Balanced 60/40 Comp
S&P 500 LB Aggregate Bond
00241 F0021
SP001 LB001
1990/05/31 10000.00 10000.00
10000.00 10000.00
1990/06/30 10042.42 10023.60
9932.00 10161.00
1990/07/31 10016.54 10059.68
9900.22 10301.22
1990/08/31 9403.99 9460.13
9005.24 10163.19
1990/09/30 9186.93 9215.11
8566.68 10247.54
1990/10/31 9099.52 9238.15
8529.85 10377.68
1990/11/30 9510.36 9675.67
9080.87 10600.80
1990/12/31 9801.00 9898.01
9334.23 10766.18
1991/01/31 10307.03 10206.04
9741.20 10899.68
1991/02/28 10910.71 10678.58
10437.70 10992.32
1991/03/31 11187.83 10863.11
10690.29 11068.17
1991/04/30 11402.98 10925.68
10715.95 11187.71
1991/05/31 11878.11 11234.22
11178.88 11252.60
1991/06/30 11634.66 10923.25
10666.88 11246.97
1991/07/31 12132.26 11289.40
11163.96 11403.30
1991/08/31 12439.86 11547.48
11428.55 11649.61
1991/09/30 12531.45 11525.54
11237.69 11886.10
1991/10/31 12896.53 11669.38
11388.28 12018.04
1991/11/30 12595.34 11430.15
10929.33 12128.60
1991/12/31 13180.53 12350.51
12179.64 12488.82
1992/01/31 13267.24 12145.49
11953.10 12318.97
1992/02/29 13546.65 12271.81
12108.49 12399.05
1992/03/31 13498.56 12100.74
11872.38 12329.61
1992/04/30 13605.46 12349.04
12221.42 12418.39
1992/05/31 13877.57 12478.71
12281.31 12653.09
1992/06/30 13751.39 12436.03
12098.32 12827.71
1992/07/31 14152.96 12842.69
12593.14 13089.39
1992/08/31 14152.96 12736.61
12334.98 13221.59
1992/09/30 14270.05 12887.41
12480.53 13378.93
1992/10/31 14220.70 12845.91
12524.21 13200.99
1992/11/30 14309.52 13109.77
12951.29 13203.63
1992/12/31 14393.08 13289.90
13110.59 13413.57
1993/01/31 14664.65 13458.94
13220.72 13671.11
1993/02/28 14978.00 13662.98
13400.52 13910.35
1993/03/31 15543.31 13858.91
13683.27 13968.78
1993/04/30 15985.60 13696.48
13352.14 14066.56
1993/05/31 16290.99 13923.84
13709.97 14084.85
1993/06/30 16186.10 14048.88
13749.73 14339.78
1993/07/31 16355.92 14047.19
13694.73 14421.52
1993/08/31 16950.29 14464.96
14213.77 14673.90
1993/09/30 16791.82 14413.75
14104.32 14713.51
1993/10/31 17016.42 14614.10
14396.28 14767.95
1993/11/30 16791.82 14481.11
14259.51 14642.43
1993/12/31 17222.05 14617.53
14432.05 14721.50
1994/01/31 17700.75 14994.66
14922.74 14920.24
1994/02/28 17389.04 14646.48
14518.34 14660.62
1994/03/31 16694.57 14118.62
13885.34 14298.51
1994/04/30 16559.93 14181.87
14063.07 14184.12
1994/05/31 16627.25 14320.86
14293.70 14182.70
1994/06/30 16311.69 14097.74
13943.51 14151.50
1994/07/31 16627.11 14487.40
14400.86 14433.11
1994/08/31 16829.88 14850.74
14991.29 14450.43
1994/09/30 16717.42 14545.11
14624.00 14238.01
1994/10/31 16559.39 14736.24
14953.04 14225.20
1994/11/30 16333.63 14401.25
14408.45 14193.90
1994/12/31 16344.91 14569.14
14622.13 14291.84
1995/01/31 16299.39 14911.20
15001.28 14574.82
1995/02/28 16583.94 15401.81
15585.88 14921.70
1995/03/31 16859.48 15712.09
16045.82 15012.72
1995/04/30 17043.11 16077.71
16518.37 15222.90
1995/05/31 17375.94 16712.17
17178.61 15812.03
1995/06/30 17584.54 16993.90
17577.67 15927.45
1995/07/31 17850.63 17317.06
18160.55 15892.41
1995/08/31 17896.90 17426.95
18206.13 16084.71
1995/09/30 18069.81 17935.82
18974.43 16240.73
1995/10/31 17859.69 17990.67
18906.69 16451.86
1995/11/30 18361.63 18572.49
19736.69 16698.64
1995/12/31 18643.34 18891.12
20116.82 16932.42
1996/01/31 18809.48 19326.82
20801.60 17044.18
1996/02/29 18500.93 19299.80
20994.43 16747.61
1996/03/31 18359.38 19357.28
21196.61 16630.37
1996/04/30 18335.48 19485.11
21509.04 16537.24
1996/05/31 18431.10 19771.04
22063.76 16504.17
1996/06/30 18539.18 19922.21
22147.83 16725.32
1996/07/31 18153.45 19415.62
21169.33 16770.48
1996/08/31 18298.10 19648.11
21615.80 16741.97
1996/09/30 19010.69 20448.34
22832.33 17033.28
1996/10/31 19520.88 20968.30
23462.05 17411.42
1996/11/30 20565.56 22062.71
25235.54 17709.16
1996/12/31 20214.25 21718.40
24735.63 17544.46
1997/01/31 20906.18 22559.51
26281.11 17598.85
1997/02/28 21202.72 22688.19
26487.15 17642.85
1997/03/31 20468.59 22028.10
25398.80 17447.01
1997/04/30 21302.26 22949.32
26915.11 17708.72
1997/05/31 22148.38 23874.82
28553.70 17876.95
1997/06/30 22981.25 24630.22
29832.90 18089.69
1997/07/31 24219.76 26072.12
32206.71 18578.11
1997/08/31 23131.37 25107.14
30402.49 18420.19
1997/09/30 24045.14 26080.84
32067.63 18692.81
1997/10/31 23529.53 25709.45
30996.57 18963.86
1997/11/30 24070.29 26470.81
32431.40 19051.09
1997/12/31 24539.61 26850.46
32988.25 19243.51
1998/01/31 24756.06 27166.11
33353.10 19489.82
1998/02/28 25662.43 28332.95
35758.53 19474.23
1998/03/31 26543.85 29242.04
37589.72 19540.45
1998/04/30 26707.03 29479.37
37967.87 19642.06
1998/05/31 26652.64 29287.34
37315.21 19828.66
1998/06/30 27226.44 30100.51
38830.95 19996.87
1998/07/31 27158.07 29933.72
38417.40 20039.30
1998/08/31 24313.72 27531.92
32863.01 20365.47
1998/09/30 25586.21 28847.96
34968.22 20842.26
1998/10/31 26411.13 30194.98
37812.53 20732.30
1998/11/30 27304.79 31361.45
40104.35 20849.72
1998/12/31 28170.66 32483.40
42415.16 20912.41
1999/01/31 28488.43 33391.28
44188.96 21061.79
1999/02/28 27956.93 32535.40
42815.57 20694.05
1999/03/31 28608.98 33388.65
44528.62 20808.87
1999/04/30 29600.75 34206.87
46253.21 20874.83
1999/05/31 28868.36 33601.89
45161.18 20691.13
1999/06/30 29482.44 34677.91
47667.62 20625.05
1999/07/31 28776.46 33970.06
46179.44 20538.43
1999/08/31 28408.12 33862.27
45950.85 20527.99
1999/09/30 27850.60 33462.55
44691.34 20766.21
1999/10/31 28606.24 34782.44
47519.41 20842.82
1999/11/30 28590.81 35205.75
48485.47 20841.37
1999/12/31 29257.13 36382.02
51341.27 20740.88
2000/01/31 28320.11 35237.71
48761.88 20673.03
2000/02/29 27818.44 35007.92
47838.82 20923.01
2000/03/31 29312.03 37247.17
52518.89 21198.47
2000/04/30 28564.19 36532.20
50938.60 21137.98
2000/05/31 28060.21 36075.70
49893.34 21128.28
IMATRL PRASUN SHR__CHT 20000531 20000622 094554 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Balanced Fund - Class B on May 31, 1990.
As the chart shows, by May 31, 2000, the value of the investment would
have grown to $28,060 - a 180.60% increase on the initial investment.
For comparison, look at how both the Standard & Poor's 500 Index, a
market capitalization-weighted index of common stocks, and the Lehman
Brothers Aggregate Bond Index, a market value-weighted index of
investment grade fixed-rate debt issues, including government,
corporate, asset-backed, and mortgage-backed securities, with
maturities of one year or more, did over the same period. With
dividends and capital gains, if any, reinvested, the Standard & Poor's
500 Index would have grown to $49,893 - a 398.93% increase. If $10,000
was invested in the Lehman Brothers Aggregate Bond Index, it would
have grown to $21,128 - a 111.28% increase. You can also look at how
the Fidelity Balanced 60/40 Composite Index did over the same period.
The composite index combines the total returns of the Standard &
Poor's 500 Index (60%) and the Lehman Brothers Aggregate Bond Index
(40%). With dividends and interest, if any, reinvested, the same
$10,000 would have grown to $36,076 - a 260.76% increase.
(checkmark)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.
FIDELITY ADVISOR BALANCED 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
December 31, 1996 and November 3, 1997 are those of Class B shares and
reflect Class B shares' 1.00% 12b-1 fee. Returns prior to December 31,
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). 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 six month, past one year, past five
years and past 10 years total return figures are 1%, 1%, 0% and 0%,
respectively. If Fidelity had not reimbursed certain class expenses,
the past five year and past 10 year total returns would have been
lower.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY ADV BALANCED - CL C -1.91% -2.86% 61.26% 180.20%
FIDELITY ADV BALANCED - CL C -2.84% -3.77% 61.26% 180.20%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
Fidelity Balanced 60/40 2.47% 7.36% 115.86% 260.76%
Composite
S&P 500 2.90% 10.48% 190.44% 398.93%
LB Aggregate Bond 1.38% 2.11% 33.62% 111.28%
Balanced Funds Average 2.78% 5.39% 89.23% 205.16%
</TABLE>
CUMULATIVE TOTAL RETURNS show Class C's performance in percentage
terms over a set period - in this case, six months, 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 Fidelity Balanced 60/40 Composite Index, a hypothetical
combination of unmanaged indices. The composite index combines the
total returns of the Standard & Poor's 500 Index and the Lehman
Brothers Aggregate Bond Index. To measure how Class C's performance
stacked up against its peers, you can compare it to the balanced funds
average, which reflects the performance of mutual funds with similar
objectives tracked by Lipper Inc. The past six months average
represents a peer group of 476 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 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY ADV BALANCED - CL C -2.86% 10.03% 10.85%
FIDELITY ADV BALANCED - CL C -3.77% 10.03% 10.85%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
Fidelity Balanced 60/40 7.36% 16.64% 13.69%
Composite
AVERAGE ANNUAL TOTAL RETURNS take Class C shares' 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 Balanced -CL C Fid Balanced 60/40 Comp
LB Aggregate Bond S&P 500
00478 F0021
LB001 SP001
1990/05/31 10000.00 10000.00
10000.00 10000.00
1990/06/30 10042.42 10023.60
10161.00 9932.00
1990/07/31 10016.54 10059.68
10301.22 9900.22
1990/08/31 9403.99 9460.13
10163.19 9005.24
1990/09/30 9186.93 9215.11
10247.54 8566.68
1990/10/31 9099.52 9238.15
10377.68 8529.85
1990/11/30 9510.36 9675.67
10600.80 9080.87
1990/12/31 9801.00 9898.01
10766.18 9334.23
1991/01/31 10307.03 10206.04
10899.68 9741.20
1991/02/28 10910.71 10678.58
10992.32 10437.70
1991/03/31 11187.83 10863.11
11068.17 10690.29
1991/04/30 11402.98 10925.68
11187.71 10715.95
1991/05/31 11878.11 11234.22
11252.60 11178.88
1991/06/30 11634.66 10923.25
11246.97 10666.88
1991/07/31 12132.26 11289.40
11403.30 11163.96
1991/08/31 12439.86 11547.48
11649.61 11428.55
1991/09/30 12531.45 11525.54
11886.10 11237.69
1991/10/31 12896.53 11669.38
12018.04 11388.28
1991/11/30 12595.34 11430.15
12128.60 10929.33
1991/12/31 13180.53 12350.51
12488.82 12179.64
1992/01/31 13267.24 12145.49
12318.97 11953.10
1992/02/29 13546.65 12271.81
12399.05 12108.49
1992/03/31 13498.56 12100.74
12329.61 11872.38
1992/04/30 13605.46 12349.04
12418.39 12221.42
1992/05/31 13877.57 12478.71
12653.09 12281.31
1992/06/30 13751.39 12436.03
12827.71 12098.32
1992/07/31 14152.96 12842.69
13089.39 12593.14
1992/08/31 14152.96 12736.61
13221.59 12334.98
1992/09/30 14270.05 12887.41
13378.93 12480.53
1992/10/31 14220.70 12845.91
13200.99 12524.21
1992/11/30 14309.52 13109.77
13203.63 12951.29
1992/12/31 14393.08 13289.90
13413.57 13110.59
1993/01/31 14664.65 13458.94
13671.11 13220.72
1993/02/28 14978.00 13662.98
13910.35 13400.52
1993/03/31 15543.31 13858.91
13968.78 13683.27
1993/04/30 15985.60 13696.48
14066.56 13352.14
1993/05/31 16290.99 13923.84
14084.85 13709.97
1993/06/30 16186.10 14048.88
14339.78 13749.73
1993/07/31 16355.92 14047.19
14421.52 13694.73
1993/08/31 16950.29 14464.96
14673.90 14213.77
1993/09/30 16791.82 14413.75
14713.51 14104.32
1993/10/31 17016.42 14614.10
14767.95 14396.28
1993/11/30 16791.82 14481.11
14642.43 14259.51
1993/12/31 17222.05 14617.53
14721.50 14432.05
1994/01/31 17700.75 14994.66
14920.24 14922.74
1994/02/28 17389.04 14646.48
14660.62 14518.34
1994/03/31 16694.57 14118.62
14298.51 13885.34
1994/04/30 16559.93 14181.87
14184.12 14063.07
1994/05/31 16627.25 14320.86
14182.70 14293.70
1994/06/30 16311.69 14097.74
14151.50 13943.51
1994/07/31 16627.11 14487.40
14433.11 14400.86
1994/08/31 16829.88 14850.74
14450.43 14991.29
1994/09/30 16717.42 14545.11
14238.01 14624.00
1994/10/31 16559.39 14736.24
14225.20 14953.04
1994/11/30 16333.63 14401.25
14193.90 14408.45
1994/12/31 16344.91 14569.14
14291.84 14622.13
1995/01/31 16299.39 14911.20
14574.82 15001.28
1995/02/28 16583.94 15401.81
14921.70 15585.88
1995/03/31 16859.48 15712.09
15012.72 16045.82
1995/04/30 17043.11 16077.71
15222.90 16518.37
1995/05/31 17375.94 16712.17
15812.03 17178.61
1995/06/30 17584.54 16993.90
15927.45 17577.67
1995/07/31 17850.63 17317.06
15892.41 18160.55
1995/08/31 17896.90 17426.95
16084.71 18206.13
1995/09/30 18069.81 17935.82
16240.73 18974.43
1995/10/31 17859.69 17990.67
16451.86 18906.69
1995/11/30 18361.63 18572.49
16698.64 19736.69
1995/12/31 18643.34 18891.12
16932.42 20116.82
1996/01/31 18809.48 19326.82
17044.18 20801.60
1996/02/29 18500.93 19299.80
16747.61 20994.43
1996/03/31 18359.38 19357.28
16630.37 21196.61
1996/04/30 18335.48 19485.11
16537.24 21509.04
1996/05/31 18431.10 19771.04
16504.17 22063.76
1996/06/30 18539.18 19922.21
16725.32 22147.83
1996/07/31 18153.45 19415.62
16770.48 21169.33
1996/08/31 18298.10 19648.11
16741.97 21615.80
1996/09/30 19010.69 20448.34
17033.28 22832.33
1996/10/31 19520.88 20968.30
17411.42 23462.05
1996/11/30 20565.56 22062.71
17709.16 25235.54
1996/12/31 20214.25 21718.40
17544.46 24735.63
1997/01/31 20906.18 22559.51
17598.85 26281.11
1997/02/28 21202.72 22688.19
17642.85 26487.15
1997/03/31 20468.59 22028.10
17447.01 25398.80
1997/04/30 21302.26 22949.32
17708.72 26915.11
1997/05/31 22148.38 23874.82
17876.95 28553.70
1997/06/30 22981.25 24630.22
18089.69 29832.90
1997/07/31 24219.76 26072.12
18578.11 32206.71
1997/08/31 23131.37 25107.14
18420.19 30402.49
1997/09/30 24045.14 26080.84
18692.81 32067.63
1997/10/31 23529.53 25709.45
18963.86 30996.57
1997/11/30 24082.08 26470.81
19051.09 32431.40
1997/12/31 24562.95 26850.46
19243.51 32988.25
1998/01/31 24765.50 27166.11
19489.82 33353.10
1998/02/28 25670.24 28332.95
19474.23 35758.53
1998/03/31 26550.50 29242.04
19540.45 37589.72
1998/04/30 26713.55 29479.37
19642.06 37967.87
1998/05/31 26659.20 29287.34
19828.66 37315.21
1998/06/30 27218.90 30100.51
19996.87 38830.95
1998/07/31 27150.58 29933.72
20039.30 38417.40
1998/08/31 24308.44 27531.92
20365.47 32863.01
1998/09/30 25579.87 28847.96
20842.26 34968.22
1998/10/31 26404.14 30194.98
20732.30 37812.53
1998/11/30 27310.84 31361.45
20849.72 40104.35
1998/12/31 28161.84 32483.40
20912.41 42415.16
1999/01/31 28479.17 33391.28
21061.79 44188.96
1999/02/28 27933.25 32535.40
20694.05 42815.57
1999/03/31 28569.08 33388.65
20808.87 44528.62
1999/04/30 29559.47 34206.87
20874.83 46253.21
1999/05/31 28843.34 33601.89
20691.13 45161.18
1999/06/30 29456.65 34677.91
20625.05 47667.62
1999/07/31 28751.65 33970.06
20538.43 46179.44
1999/08/31 28383.83 33862.27
20527.99 45950.85
1999/09/30 27827.09 33462.55
20766.21 44691.34
1999/10/31 28581.67 34782.44
20842.82 47519.41
1999/11/30 28566.27 35205.75
20841.37 48485.47
1999/12/31 29248.00 36382.02
20740.88 51341.27
2000/01/31 28295.62 35237.71
20673.03 48761.88
2000/02/29 27794.38 35007.92
20923.01 47838.82
2000/03/31 29286.68 37247.17
21198.47 52518.89
2000/04/30 28539.49 36532.20
21137.98 50938.60
2000/05/31 28019.71 36075.70
21128.28 49893.34
IMATRL PRASUN SHR__CHT 20000531 20000622 095228 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Balanced Fund - Class C on May 31, 1990.
As the chart shows, by May 31, 2000, the value of the investment would
have grown to $28,020 - a 180.20% increase on the initial investment.
For comparison, look at how both the Standard & Poor's 500 Index, a
market capitalization-weighted index of common stocks, and the Lehman
Brothers Aggregate Bond Index, a market value-weighted index of
investment grade fixed-rate debt issues, including government,
corporate, asset-backed, and mortgage-backed securities, with
maturities of one year or more, did over the same period. With
dividends and capital gains, if any, reinvested, the Standard & Poor's
500 Index would have grown to $49,893 - a 398.93% increase. If $10,000
was invested in the Lehman Brothers Aggregate Bond Index, it would
have grown to $21,128 - a 111.28% increase. You can also look at how
the Fidelity Balanced 60/40 Composite Index did over the same period.
The composite index combines the total returns of the Standard &
Poor's 500 Index (60%) and the Lehman Brothers Aggregate Bond Index
(40%). With dividends and interest, if any, reinvested, the same
$10,000 would have grown to $36,076 - a 260.76% increase.
(checkmark)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.
FUND TALK: THE MANAGERS' OVERVIEW
MARKET RECAP
It was the best of times, it was the
worst of times. At least that's how
some investors might describe the
six-month period that ended May 31,
2000. Technology stocks led the
market's narrow advances, soaring
during the first half of the period
as bulls snapped up shares of those
companies expected to fuel the new
economy. The performance disparity
between technology and the broader
market reached an inflection point
in early March, as the tech-laden
NASDAQ set record highs and the
Standard & Poor's 500SM Index
dipped to six-month lows. The tech
bubble burst, though, as the threat
of higher interest rates, coupled
with a sudden loss of confidence in
valuation levels, sent nervous
investors fleeing for stability
elsewhere in the market. The S&P
500, a beneficiary of the mass
migration, recovered its earlier losses
and finished 2.90% higher. The
NASDAQ completed its grueling
six-month round trip up 2.05%. Three
rate hikes levied by the Federal
Reserve Board during the period
in an attempt to cool the economy
made life difficult for bonds as well.
Reflecting the struggle, the Lehman
Brothers Aggregate Bond Index
returned 1.38%. Treasuries managed
to stave off the period's bond malaise,
rallying on the U.S. government's
decision to repurchase long-term
debt and curtail future issuance.
Conversely, the spread sectors -
namely corporate bonds, mortgage
securities and government agencies
- were plagued by deteriorating
technical factors and wider yield
spreads relative to Treasuries.
(photograph of Kevin Grant)(photograph of John Avery)
An interview with John Avery (right), Lead Portfolio Manager of
Fidelity Advisor Balanced Fund, and Kevin Grant, manager for
fixed-income investments
Q. HOW DID THE FUND PERFORM, JOHN?
J.A. For the six months that ended May 31, 2000, the fund's Class A,
Class T, Class B and Class C shares returned -1.51%, -1.63%, -1.86%
and -1.91%, respectively. In comparison, the Fidelity Balanced 60/40
Composite Index returned 2.47%, while the balanced funds average
tracked by Lipper Inc. returned 2.78%. For the 12-month period that
ended May 31, 2000, the fund's Class A, Class T, Class B and Class C
shares returned -2.09%, -2.36%, -2.80% and -2.86%, respectively. For
the same period, the Composite index and Lipper average returned 7.36%
and 5.39%, respectively.
Q. WHY DID THE FUND LAG BOTH ITS BENCHMARK AND ITS PEERS DURING THE
SIX-MONTH PERIOD?
J.A. The fund's underexposure to technology during the sector's
impressive run-up early in the period detracted from both relative and
absolute performance. Underweighting tech was double trouble in the
sense that most other areas of the market in which the fund was
invested had a difficult six months. So, even though the technology
group corrected a lot during the second half of the period - as the
market turned elsewhere for growth - it was up so much in the first
half that, for all intents and purposes, our fate was sealed.
Q. HOW DID YOUR ASSET ALLOCATION DECISIONS PLAY OUT FOR THE FUND?
J.A. The fund's equity weighting remained fairly neutral, hovering
around 60% for much of the period. I didn't feel it prudent to make
any significant asset allocation bets, although I did raise the fund's
equity exposure slightly during the market's upturn early in the
period by investing in convertible securities. I used this asset class
as an indirect, less volatile way to participate in some of the names
I liked within the technology sector. This strategy helped provide
some nice yield and afforded us the added benefit of downside
protection, as convertible securities gave back less than their pure
stock equivalents during the correction. In terms of bonds, the fund's
exposure to investment-grade issues paid off, while our small position
in poorly performing high-yield debt detracted from returns.
Q. WHAT WERE SOME OF YOUR OTHER STRATEGIES AND HOW DID THEY INFLUENCE
PERFORMANCE?
J.A. When things started to fall apart for technology in the spring, I
took advantage of the opportunity to increase the fund's exposure to
large, high-quality companies, many of which had dropped sharply from
their highs of the period. However, the fund was hurt by not owning
enough of the period's top performers along the way, particularly
those in technology and telecommunications - namely Oracle, Intel,
Nortel and Sun Microsystems. Looking elsewhere, the fund's healthy
exposure to large drug companies such as Bristol-Myers Squibb and
Merck proved harmful, as the group suffered from the threat of
government regulation and largely unattractive growth rates relative
to tech and biotechnology issues. On a more positive note, our lack of
exposure to a generally weak consumer nondurables sector, and some
good picks in media stocks, such as Time Warner and Viacom, helped
boost returns.
Q. WHAT OTHER STOCKS PERFORMED WELL FOR THE FUND?
J.A. A number of the fund's financial holdings performed well - most
notably Bank of New York, Morgan Stanley Dean Witter, American
International Group and Citigroup - benefiting from strong capital
markets activity. Texas Instruments jumped on higher earnings backed
by strong demand for chips used in a variety of wireless communication
devices.
Q. WHAT STOCKS DISAPPOINTED?
J.A. Motorola was hurt by execution problems and narrowing margins in
its cellular handset business. Traditional telecommunications
providers AT&T, WorldCom and SBC Communications recoiled in response
to increased competition and falling prices. Freddie Mac, a leading
financer of home loans, was plagued by steadily rising interest rates.
Q. TURNING TO YOU, KEVIN, HOW DID THE FUND'S BOND INVESTMENTS FARE?
K.G. The investment-grade portion of the fund performed well during
the six-month period, benefiting from its exposure to a strong rally
in the government market. An announcement by the U.S. Treasury in
January of its intent to repurchase long-term debt and reduce future
issuance sent the price of the long bond higher and its yield lower.
This action, coupled with rising short-term interest rates, induced an
inverted yield curve, which occurs when short-term issues provide a
higher yield than their longer-term counterparts. This inversion hurt
the spread sectors - most notably corporate bonds and mortgage
securities - with yield spreads widening out significantly relative to
comparable duration Treasuries.
Q. HOW DID THIS ENVIRONMENT AFFECT THE FUND?
K.G. The fund was well-positioned for these changes, as we knew about
the Treasury buybacks months in advance and had ample time to prepare
for them. Our strategy to reduce the fund's exposure to long-term
corporates in exchange for more Treasuries worked out beautifully, and
helped the fund's bond subportfolio outperform the Lehman Brothers
Aggregate Bond Index during the period. So, despite the Federal
Reserve Board's efforts to hike interest rates during the period, the
supply/demand imbalance spurred by the Treasury buybacks helped ensure
our success.
Q. JOHN, WHAT'S YOUR OUTLOOK?
J.A. I'm bullish overall, as business remains strong in many areas of
the economy, although I temper that enthusiasm with concern about
interest rates rising further. The Fed has made its position quite
clear that if it hasn't slowed the economy yet, it most assuredly will
do so in the coming months. In this uncertain environment, I believe
the market will begin to focus more on revenues and earnings. As such,
the companies capable of delivering robust top-line growth and strong
bottom-line earnings should be the ones to reap the rewards. Given the
extent to which technology and the Internet have transformed the
global landscape, I expect we'll see strong performance from this
sector going forward. I'll continue to focus my efforts on an
individual company basis, with the hopes of finding the best names in
the tech space and beyond.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGERS ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER AND DO NOT NECESSARILY REPRESENT THE VIEWS OF FIDELITY OR
ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH VIEWS ARE
SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER CONDITIONS
AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE
VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE
INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS
FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY FIDELITY FUND.
(checkmark)FUND FACTS
GOAL: both income and
growth of capital
START DATE: January 6, 1987
SIZE: as of May 31, 2000,
more than $2.5 billion
MANAGER: John Avery, since
1998, and Kevin Grant since
1996; John Avery joined
Fidelity in 1995; Kevin Grant
joined Fidelity in 1993
JOHN AVERY ON THE
IMPORTANCE OF SKILLED,
SEASONED MANAGEMENT IN A
RAPIDLY CHANGING ECONOMY:
"Technology will be a key
differentiating factor for the years
to come in terms of who wins and
who loses in specific industries.
Given the blazing speed at which
things are changing today,
management teams that don't
implement technology and use it to
their advantage are destined for
failure. The only way a company can
stay ahead of the curve is to have
management teams out there,
looking at what the future holds
and reshaping strategy
accordingly.
"The world has become a lot more
complicated due to advances in
technology. Companies today face
a new set of challenges, including
a loss of pricing power, overcapacity,
globalization and rapidly changing
competitor bases. If a firm is
incapable of managing its
business in this sort of environment,
it has little hope of surviving long
term, which doesn't bode well for
its stock price.
"Companies such as General
Electric, which have effectively
harnessed the power of technology
and used it as a competitive
weapon, have enjoyed much success
in recent years. GE - the fund's
top equity holding at the close of
the period - is led by one of the
strongest management teams in the
world, and identified the Internet
as a driving force early on. In doing
so, it was one of the few traditional
companies to stay ahead of the
curve on transitioning into the
new economy."
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C>
TOP FIVE STOCKS AS OF MAY 31,
2000
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
General Electric Co. 3.5 2.5
Cisco Systems, Inc. 2.0 1.2
Intel Corp. 1.5 0.6
Exxon Mobil Corp. 1.3 2.3
Texas Instruments, Inc. 1.3 1.1
9.6 7.7
TOP FIVE BOND ISSUERS AS OF
MAY 31, 2000
(WITH MATURITIES GREATER THAN % OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
ONE YEAR) MONTHS AGO
Fannie Mae 10.9 8.6
U.S. Treasury Obligations 7.5 5.3
Government National Mortgage 1.9 1.8
Association
Freddie Mac 0.7 0.4
Comdisco, Inc. 0.6 0.5
21.6 16.6
TOP FIVE MARKET SECTORS AS OF
MAY 31, 2000
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Technology 20.4 12.6
Finance 11.7 15.0
Utilities 9.7 12.0
Media & Leisure 6.8 6.3
Health 5.9 6.8
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
ASSET ALLOCATION (% OF FUND'S
NET ASSETS)
AS OF MAY 31, 2000 * AS OF NOVEMBER 30, 1999 **
Stocks 57.1% Stocks 61.8%
Bonds 37.5% Bonds 32.2%
Convertible Securities 2.0% Convertible Securities 1.9%
Short-Term Investments and Short-Term Investments and
Net Other Assets 3.4% Net Other Assets 4.1%
* FOREIGN INVESTMENTS 7.0% ** FOREIGN INVESTMENTS 3.9%
Row: 1, Col: 1, Value: 57.1 Row: 1, Col: 1, Value: 61.8
Row: 1, Col: 2, Value: 0.0 Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 37.0 Row: 1, Col: 3, Value: 32.2
Row: 1, Col: 4, Value: 0.0 Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: 2.0 Row: 1, Col: 5, Value: 1.9
Row: 1, Col: 6, Value: 0.0 Row: 1, Col: 6, Value: 0.0
Row: 1, Col: 7, Value: 0.0 Row: 1, Col: 7, Value: 0.0
Row: 1, Col: 8, Value: 3.9 Row: 1, Col: 8, Value: 4.1
</TABLE>
INVESTMENTS MAY 31, 2000
Showing Percentage of Net Assets
<TABLE>
<CAPTION>
<S> <C> <C> <C>
COMMON STOCKS - 56.0%
SHARES VALUE (NOTE 1) (000S)
AEROSPACE & DEFENSE - 0.5%
AEROSPACE & DEFENSE - 0.3%
Boeing Co. 122,400 $ 4,781
Textron, Inc. 39,700 2,491
7,272
SHIP BUILDING & REPAIR - 0.2%
General Dynamics Corp. 86,900 5,133
TOTAL AEROSPACE & DEFENSE 12,405
BASIC INDUSTRIES - 0.6%
CHEMICALS & PLASTICS - 0.5%
E.I. du Pont de Nemours and 117,120 5,739
Co.
Praxair, Inc. 144,200 6,056
11,795
METALS & MINING - 0.1%
Alcoa, Inc. 60,500 3,535
TOTAL BASIC INDUSTRIES 15,330
DURABLES - 0.5%
AUTOS, TIRES, & ACCESSORIES -
0.3%
AutoNation, Inc. (a) 59,900 472
Danaher Corp. 85,800 4,134
Delphi Automotive Systems 204,900 3,701
Corp.
8,307
CONSUMER ELECTRONICS - 0.2%
General Motors Corp. Class H 48,200 4,745
(a)
TOTAL DURABLES 13,052
ENERGY - 4.1%
ENERGY SERVICES - 0.9%
Diamond Offshore Drilling, 136,000 5,559
Inc.
Halliburton Co. 115,600 5,896
Nabors Industries, Inc. (a) 142,500 6,128
Schlumberger Ltd. (NY Shares) 75,900 5,583
23,166
OIL & GAS - 3.2%
BP Amoco PLC 1,100,518 9,973
Burlington Resources, Inc. 134,100 6,135
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
ENERGY - CONTINUED
OIL & GAS - CONTINUED
Chevron Corp. 77,000 $ 7,118
Conoco, Inc. Class B 396,600 11,303
Exxon Mobil Corp. 415,784 34,640
Royal Dutch Petroleum Co. (NY 233,500 14,579
Shares)
83,748
TOTAL ENERGY 106,914
FINANCE - 7.8%
BANKS - 1.6%
Bank of America Corp. 125,400 6,968
Bank of New York Co., Inc. 346,100 16,245
Chase Manhattan Corp. 233,300 17,425
40,638
CREDIT & OTHER FINANCE - 2.4%
American Express Co. 588,000 31,642
Arcadia Financial Ltd. 46 0
warrants 3/15/07 (a)
Associates First Capital 79,400 2,179
Corp. Class A
Citigroup, Inc. 466,850 29,032
62,853
FEDERAL SPONSORED CREDIT - 1.1%
Fannie Mae 207,500 12,476
Freddie Mac 336,200 14,961
27,437
INSURANCE - 1.2%
AFLAC, Inc. 83,000 4,290
American International Group, 250,950 28,248
Inc.
32,538
SECURITIES INDUSTRY - 1.5%
Charles Schwab Corp. 208,650 5,999
Merrill Lynch & Co., Inc. 140,700 13,877
Morgan Stanley Dean Witter & 264,600 19,035
Co.
38,911
TOTAL FINANCE 202,377
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
HEALTH - 5.4%
DRUGS & PHARMACEUTICALS - 5.1%
American Home Products Corp. 131,700 $ 7,095
Amgen, Inc. (a) 96,300 6,127
Bristol-Myers Squibb Co. 399,780 22,013
Eli Lilly & Co. 358,700 27,306
Merck & Co., Inc. 93,700 6,992
Schering-Plough Corp. 600,500 29,049
Warner-Lambert Co. 270,200 32,998
131,580
MEDICAL EQUIPMENT & SUPPLIES
- 0.3%
Johnson & Johnson 42,700 3,822
Medtronic, Inc. 83,100 4,290
8,112
TOTAL HEALTH 139,692
INDUSTRIAL MACHINERY &
EQUIPMENT - 3.6%
ELECTRICAL EQUIPMENT - 3.5%
General Electric Co. 1,711,400 90,062
INDUSTRIAL MACHINERY &
EQUIPMENT - 0.1%
Ingersoll-Rand Co. 53,400 2,433
TOTAL INDUSTRIAL MACHINERY & 92,495
EQUIPMENT
MEDIA & LEISURE - 4.1%
BROADCASTING - 1.6%
AT&T Corp. - Liberty Media 182,300 8,078
Group Class A (a)
Benedek Communications Corp. 10,500 21
warrants 7/1/07 (a)
Clear Channel Communications, 127,800 9,569
Inc. (a)
CS Wireless Systems, Inc. 109 0
(a)(g)
Infinity Broadcasting Corp. 245,800 7,773
Class A (a)
Motient Corp. warrants 4/1/08 245 4
(a)
Time Warner, Inc. 203,601 16,072
UIH Australia/Pacific, Inc. 4,430 89
warrants 5/15/06 (a)
41,606
ENTERTAINMENT - 1.6%
MGM Grand, Inc. 69,200 2,249
Viacom, Inc. Class B 467,909 29,010
(non-vtg.) (a)
Walt Disney Co. 241,500 10,188
41,447
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
MEDIA & LEISURE - CONTINUED
PUBLISHING - 0.7%
McGraw-Hill Companies, Inc. 356,600 $ 18,343
RESTAURANTS - 0.2%
McDonald's Corp. 173,000 6,196
TOTAL MEDIA & LEISURE 107,592
NONDURABLES - 1.6%
BEVERAGES - 0.7%
Anheuser-Busch Companies, 138,800 10,757
Inc.
The Coca-Cola Co. 161,700 8,631
19,388
HOUSEHOLD PRODUCTS - 0.7%
Avon Products, Inc. 44,100 1,822
Clorox Co. 124,300 4,925
Colgate-Palmolive Co. 108,100 5,689
Procter & Gamble Co. 85,100 5,659
18,095
TOBACCO - 0.2%
Philip Morris Companies, Inc. 201,120 5,254
TOTAL NONDURABLES 42,737
RETAIL & WHOLESALE - 2.9%
APPAREL STORES - 0.2%
Mothers Work, Inc. (a)(k) 70 1
The Limited, Inc. 240,000 5,790
5,791
GENERAL MERCHANDISE STORES -
1.6%
Kohls Corp. (a) 83,600 4,326
Target Corp. 177,300 11,114
Wal-Mart Stores, Inc. 455,400 26,242
41,682
RETAIL & WHOLESALE,
MISCELLANEOUS - 1.1%
Home Depot, Inc. 444,100 21,678
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
RETAIL & WHOLESALE - CONTINUED
RETAIL & WHOLESALE,
MISCELLANEOUS - CONTINUED
Lowe's Companies, Inc. 93,300 $ 4,344
Staples, Inc. (a) 102,700 1,515
27,537
TOTAL RETAIL & WHOLESALE 75,010
SERVICES - 0.7%
ADVERTISING - 0.5%
Omnicom Group, Inc. 142,600 11,969
SERVICES - 0.2%
Ecolab, Inc. 150,200 5,745
TOTAL SERVICES 17,714
TECHNOLOGY - 18.3%
COMMUNICATIONS EQUIPMENT - 4.8%
Cisco Systems, Inc. (a) 920,700 52,422
Comverse Technology, Inc. (a) 63,900 5,839
Corning, Inc. 31,500 6,093
Lucent Technologies, Inc. 250,300 14,361
Nokia AB sponsored ADR 490,200 25,490
Nortel Networks Corp. 413,400 22,031
126,236
COMPUTER SERVICES & SOFTWARE
- 3.2%
America Online, Inc. (a) 251,400 13,324
BEA Systems, Inc. (a) 80,300 2,901
Computer Sciences Corp. (a) 40,100 3,847
DecisionOne Corp. 1,447 0
DecisionOne Corp.:
Class A warrants 4/18/07 (a) 849 0
Class B warrants 4/18/07 (a) 1,463 0
Class C warrants 4/18/07 (a) 868 0
Electronic Data Systems Corp. 46,400 2,984
Inktomi Corp. (a) 31,600 3,527
Microsoft Corp. (a) 365,100 22,842
Oracle Corp. (a) 248,700 17,875
Unisys Corp. (a) 346,700 9,404
Yahoo!, Inc. (a) 52,300 5,913
82,617
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
TECHNOLOGY - CONTINUED
COMPUTERS & OFFICE EQUIPMENT
- 3.8%
Compaq Computer Corp. 278,400 $ 7,308
Dell Computer Corp. (a) 354,100 15,271
EMC Corp. (a) 207,800 24,170
Hewlett-Packard Co. 69,300 8,325
International Business 128,122 13,749
Machines Corp.
Network Appliance, Inc. (a) 78,600 5,075
Pitney Bowes, Inc. 205,100 8,922
SCI Systems, Inc. (a) 42,900 1,931
Sun Microsystems, Inc. (a) 191,300 14,658
99,409
ELECTRONIC INSTRUMENTS - 0.4%
Applied Materials, Inc. (a) 86,200 7,198
KLA-Tencor Corp. (a) 52,100 2,582
9,780
ELECTRONICS - 6.1%
Altera Corp. (a) 43,700 3,753
Analog Devices, Inc. (a) 107,100 8,247
Broadcom Corp. Class A (a) 36,700 4,773
Flextronics International 58,400 3,179
Ltd. (a)
Insilco Corp. warrants 600 0
8/15/07 (a)
Intel Corp. 315,400 39,326
JDS Uniphase Corp. (a) 100,800 8,870
Micron Technology, Inc. (a) 180,300 12,610
Motorola, Inc. 175,100 16,416
Sanmina Corp. (a) 70,500 4,486
Texas Instruments, Inc. 457,200 33,033
Tyco International Ltd. 413,290 19,450
Xilinx, Inc. (a) 44,600 3,395
157,538
TOTAL TECHNOLOGY 475,580
UTILITIES - 5.9%
CELLULAR - 2.5%
China Telecom (Hong Kong) 750,000 5,512
Ltd. (a)
Loral Orion Network Systems,
Inc.:
warrants 1/15/07 (CV ratio 6,760 19
.47) (a)
warrants 1/15/07 (CV ratio 1,445 7
.6) (a)
McCaw International Ltd. 6,190 15
warrants 4/16/07 (a)(g)
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
UTILITIES - CONTINUED
CELLULAR - CONTINUED
Nextel Communications, Inc. 88,900 $ 8,234
Class A (a)
QUALCOMM, Inc. (a) 73,400 4,872
Sprint Corp. - PCS Group 290,900 16,145
Series 1 (a)
Vodafone AirTouch PLC 318,400 14,587
sponsored ADR
VoiceStream Wireless Corp. (a) 139,100 15,927
WebLink Wireless, Inc. Class 24,770 158
A (a)
65,476
ELECTRIC UTILITY - 0.3%
AES Corp. (a) 90,300 7,879
NRG Energy, Inc. 47,500 790
8,669
GAS - 0.6%
Dynegy, Inc. Class A 108,600 8,376
Enron Corp. 78,000 5,684
14,060
TELEPHONE SERVICES - 2.5%
AT&T Corp. 148,631 5,156
BellSouth Corp. 334,700 15,626
KMC Telecom Holdings, Inc. 610 2
warrants 4/15/08 (a)(g)
Level 3 Communications, Inc. 50,300 3,839
(a)
McLeodUSA, Inc. Class A (a) 311,700 6,234
Pathnet, Inc. warrants 1,390 14
4/15/08 (a)(g)
SBC Communications, Inc. 417,684 18,248
Sprint Corp. - FON Group 157,400 9,523
WorldCom, Inc. (a) 161,600 6,080
64,722
TOTAL UTILITIES 152,927
TOTAL COMMON STOCKS 1,453,825
(Cost $1,110,672)
PREFERRED STOCKS - 1.6%
CONVERTIBLE PREFERRED STOCKS
- 0.5%
FINANCE - 0.1%
CREDIT & OTHER FINANCE - 0.1%
Host Marriott Financial Trust 70,900 2,349
$3.375 QUIPS (g)
PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
CONVERTIBLE PREFERRED STOCKS
- CONTINUED
INDUSTRIAL MACHINERY &
EQUIPMENT - 0.0%
ELECTRICAL EQUIPMENT - 0.0%
Loral Space & Communications 48,800 $ 1,220
Ltd. Series C, $3.00 (g)
MEDIA & LEISURE - 0.2%
BROADCASTING - 0.2%
MediaOne Group, Inc. 42,300 4,167
(Vodafone AirTouch PLC)
$3.63 PIES
UTILITIES - 0.2%
TELEPHONE SERVICES - 0.2%
Global Crossing Ltd. $16.88 28,000 6,006
TOTAL CONVERTIBLE PREFERRED 13,742
STOCKS
NONCONVERTIBLE PREFERRED
STOCKS - 1.1%
ENERGY - 0.1%
ENERGY SERVICES - 0.1%
R&B Falcon Corp. 13.875% 836 928
FINANCE - 0.0%
INSURANCE - 0.0%
American Annuity Group 1,000 852
Capital Trust II 8.875%
HEALTH - 0.1%
MEDICAL FACILITIES MANAGEMENT
- 0.1%
Fresenius Medical Care 1,331 1,186
Capital Trust II 7.875%
MEDIA & LEISURE - 0.2%
BROADCASTING - 0.2%
Adelphia Communications Corp. 5,170 548
$13.00
Citadel Broadcasting Co. 4,815 515
Series B, 13.25% pay-in-kind
CSC Holdings, Inc.:
11.125% pay-in-kind 24,327 2,566
Series H, 11.75% pay-in-kind 10,140 1,080
Granite Broadcasting Corp. 798 678
12.75% pay-in-kind
5,387
TECHNOLOGY - 0.0%
COMPUTER SERVICES & SOFTWARE
- 0.0%
Concentric Network Corp. 916 886
13.5% pay-in-kind
PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
NONCONVERTIBLE PREFERRED
STOCKS - CONTINUED
UTILITIES - 0.7%
CELLULAR - 0.3%
Nextel Communications, Inc.:
11.125% pay-in-kind 3,723 $ 3,369
Series D, 13% pay-in-kind 3,785 3,823
7,192
TELEPHONE SERVICES - 0.4%
Adelphia Business Solution, 207 188
Inc. 12.875% pay-in-kind
e.spire Communications, Inc.:
12.75% pay-in-kind 1,196 275
14.75% pay-in-kind 323 81
ICG Holdings, Inc.:
14% pay-in-kind 3 2
14.25% pay-in-kind 2,246 1,830
Intermedia Communications, 2,229 2,073
Inc. 13.5% pay-in-kind
NEXTLINK Communications, Inc. 122,798 6,017
14% pay-in-kind
WinStar Communications, Inc. 608 851
14.25% (a)
11,317
TOTAL UTILITIES 18,509
TOTAL NONCONVERTIBLE 27,748
PREFERRED STOCKS
TOTAL PREFERRED STOCKS 41,490
(Cost $46,308)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CORPORATE BONDS - 15.4%
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S)
CONVERTIBLE BONDS - 1.5%
HEALTH - 0.2%
DRUGS & PHARMACEUTICALS - 0.2%
Roche Holdings, Inc. 0% - $ 8,379 6,019
1/19/15 (g)
MEDIA & LEISURE - 0.2%
BROADCASTING - 0.2%
Liberty Media Corp. 3.75% Baa3 4,309 4,422
2/15/30 (g)
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
CONVERTIBLE BONDS - CONTINUED
TECHNOLOGY - 1.0%
COMPUTERS & OFFICE EQUIPMENT
- 0.3%
Juniper Networks, Inc. 4.75% - $ 10,115 $ 8,199
3/15/07
ELECTRONICS - 0.7%
Lattice Semiconductor Corp. B- 4,840 7,647
4.75% 11/1/06
LSI Logic Corp. 4% 2/15/05 B1 4,565 4,696
Vitesse Semiconductor Corp. - 6,190 4,797
4% 3/15/05 (g)
17,140
TOTAL TECHNOLOGY 25,339
UTILITIES - 0.1%
CELLULAR - 0.1%
Nextel Communications, Inc. B1 2,881 2,521
5.25% 1/15/10 (g)
TELEPHONE SERVICES - 0.0%
Level 3 Communications, Inc. Caa1 1,895 1,568
6% 3/15/10
TOTAL UTILITIES 4,089
TOTAL CONVERTIBLE BONDS 39,869
NONCONVERTIBLE BONDS - 13.9%
AEROSPACE & DEFENSE - 0.1%
DEFENSE ELECTRONICS - 0.1%
Raytheon Co. 7.9% 3/1/03 (g) Baa2 2,360 2,338
BASIC INDUSTRIES - 0.6%
CHEMICALS & PLASTICS - 0.3%
Avecia Group PLC 11% 7/1/09 B2 480 473
Huntsman Corp.:
9.5% 7/1/07 (g) B2 600 540
9.5% 7/1/07 (g) B2 2,780 2,502
Huntsman ICI Chemicals LLC B2 910 887
10.125% 7/1/09
Lyondell Chemical Co.:
9.625% 5/1/07 Ba3 680 656
9.875% 5/1/07 Ba3 900 869
10.875% 5/1/09 B2 1,215 1,172
Sterling Chemicals, Inc. Caa3 175 141
11.75% 8/15/06
7,240
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
BASIC INDUSTRIES - CONTINUED
METALS & MINING - 0.0%
Kaiser Aluminum & Chemical
Corp.:
9.875% 2/15/02 B1 $ 195 $ 185
12.75% 2/1/03 B3 537 486
671
PACKAGING & CONTAINERS - 0.1%
Gaylord Container Corp. Caa1 1,505 1,245
9.375% 6/15/07
Packaging Corp. of America B2 1,210 1,186
9.625% 4/1/09
2,431
PAPER & FOREST PRODUCTS - 0.2%
APP China Group Ltd. 14% B3 490 306
3/15/10 unit (g)
APP Finance II Mauritius Ltd. B3 685 322
12% 3/15/04
Container Corp. of America B2 110 109
gtd. 9.75% 4/1/03
Fort James Corp. 6.625% Baa2 390 370
9/15/04
Millar Western Forest B3 1,280 1,216
Products Ltd. 9.875% 5/15/08
Repap New Brunswick, Inc.:
11.5% 6/1/04 B3 90 91
yankee 10.625% 4/15/05 Caa1 760 665
Stone Container Corp.:
10.75% 10/1/02 B1 650 657
12.58% 8/1/16 (h) B2 111 115
3,851
TOTAL BASIC INDUSTRIES 14,193
CONSTRUCTION & REAL ESTATE -
0.9%
CONSTRUCTION - 0.1%
Great Lakes Dredge & Dock B3 730 730
Corp. 11.25% 8/15/08
Lennar Corp. 9.95% 5/1/10 (g) Ba1 225 214
944
ENGINEERING - 0.0%
360networks, Inc. 13% 5/1/08 B3 935 923
(g)
REAL ESTATE - 0.1%
Duke Realty LP 7.3% 6/30/03 Baa1 1,000 975
LNR Property Corp. 9.375% B1 2,870 2,461
3/15/08
3,436
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
CONSTRUCTION & REAL ESTATE -
CONTINUED
REAL ESTATE INVESTMENT TRUSTS
- 0.7%
CenterPoint Properties Trust Baa2 $ 1,190 $ 1,097
6.75% 4/1/05
Equity Office Properties Trust:
6.5% 1/15/04 Baa1 4,000 3,773
6.625% 2/15/05 Baa1 1,250 1,158
ProLogis Trust 6.7% 4/15/04 Baa1 625 587
Spieker Properties LP:
6.8% 5/1/04 Baa2 810 761
6.875% 2/1/05 Baa2 11,225 10,532
17,908
TOTAL CONSTRUCTION & REAL 23,211
ESTATE
DURABLES - 0.0%
TEXTILES & APPAREL - 0.0%
Polymer Group, Inc. 9% 7/1/07 B2 270 221
ENERGY - 0.4%
COAL - 0.0%
P&L Coal Holdings Corp. B2 1,270 1,130
9.625% 5/15/08
OIL & GAS - 0.4%
Anadarko Petroleum Corp. 7.2% Baa1 2,750 2,378
3/15/29
Apache Corp.:
7.625% 7/1/19 Baa1 940 863
7.7% 3/15/26 Baa1 600 549
Apache Finance Property Ltd. Baa1 1,000 898
6.5% 12/15/07
Chesapeake Energy Corp.:
7.875% 3/15/04 B2 140 126
8.5% 3/15/12 B2 165 137
9.125% 4/15/06 B2 120 110
9.625% 5/1/05 B2 630 602
Conoco, Inc. 5.9% 4/15/04 A3 950 893
Great Lakes Carbon Corp. B3 1,090 937
10.25% 5/15/08 pay-in-kind
Occidental Petroleum Corp. Baa3 1,000 995
6.39% 11/9/00
Plains Resources, Inc.:
Series B 10.25% 3/15/06 B2 460 455
Series D 10.25% 3/15/06 B2 230 228
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
ENERGY - CONTINUED
OIL & GAS - CONTINUED
YPF Sociedad Anonima:
7.75% 8/27/07 B1 $ 65 $ 60
8% 2/15/04 B1 450 429
9,660
TOTAL ENERGY 10,790
FINANCE - 3.8%
BANKS - 2.2%
ABN-Amro Bank NV, Chicago A1 5,000 4,931
6.625% 10/31/01
Bank of Tokyo-Mitsubishi Ltd. A3 1,200 1,186
8.4% 4/15/10
BanPonce Financial Corp. A3 3,850 3,824
6.75% 8/9/01
Barclays Bank PLC yankee:
5.875% 7/15/00 A1 2,430 2,430
5.95% 7/15/01 A1 4,550 4,501
Capital One Bank 6.375% Baa2 2,700 2,569
2/15/03
Capital One Financial Corp. Baa3 2,550 2,305
7.125% 8/1/08
Central Fidelity Banks, Inc. A1 9,045 9,094
8.15% 11/15/02
Commonwealth Bank of A1 800 803
Australia 8.5% 6/1/10
First Tennessee National Baa1 720 688
Corp. 6.75% 11/15/05
HSBC Finance Nederland BV A2 250 247
7.4% 4/15/03 (g)
Kansallis-Osake-Pankki (NY A2 710 737
Branch) yankee 10% 5/1/02
Korea Development Bank:
6.625% 11/21/03 Baa2 1,825 1,724
7.375% 9/17/04 Baa2 650 618
yankee 6.5% 11/15/02 Baa2 270 258
MBNA Corp.:
6.34% 6/2/03 Baa2 850 807
6.875% 11/15/02 Baa2 3,700 3,618
Provident Bank 6.125% 12/15/00 A3 3,420 3,397
Sanwa Finance Aruba AEC 8.35% Baa1 5,400 5,250
7/15/09
Sumitomo Bank International Baa1 500 494
Finance NV 8.5% 6/15/09
Summit Bancorp 8.625% 12/10/02 BBB+ 1,250 1,262
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
FINANCE - CONTINUED
BANKS - CONTINUED
Union Planters Corp. 6.75% Baa2 $ 400 $ 377
11/1/05
Wachovia Corp. 6.605% 10/1/25 A1 7,550 7,265
58,385
CREDIT & OTHER FINANCE - 1.5%
Ahmanson Capital Trust I A3 1,700 1,527
8.36% 12/1/26 (g)
AMRESCO, Inc.:
9.875% 3/15/05 Caa3 1,085 543
10% 3/15/04 Caa3 153 80
AT&T Capital Corp. 6.25% A1 4,260 4,192
5/15/01
Bellsouth Capital Funding Aa3 500 489
Corp. 7.75% 2/15/10
CIT Group, Inc.:
5.5% 2/15/04 A1 620 569
7.375% 3/15/03 A1 2,300 2,278
Daimler-Chrysler NA Holding A1 575 564
Corp. 6.59% 6/18/02
ERP Operating LP:
6.55% 11/15/01 A3 850 832
7.1% 6/23/04 A3 1,500 1,433
Finova Capital Corp.:
6.11% 2/18/03 Baa2 800 676
7.25% 11/8/04 Baa2 900 756
First Security Capital I A3 980 864
8.41% 12/15/26
Ford Motor Credit Co. 6.5% A2 3,000 2,933
2/28/02
GS Escrow Corp. 7.125% 8/1/05 Ba1 1,980 1,728
Household Finance Corp. 8% A2 2,700 2,685
5/9/05
Imperial Credit Capital Trust B2 510 408
I 10.25% 6/14/02
Imperial Credit Industries B3 1,500 1,110
9.875% 1/15/07
Macsaver Financial Services,
Inc.:
7.4% 2/15/02 Ba2 250 180
7.875% 8/1/03 Ba2 560 381
Metris Companies, Inc. Ba3 125 119
10.125% 7/15/06
Newcourt Credit Group, Inc. A1 2,575 2,442
6.875% 2/16/05
Popular North America, Inc. A3 4,750 4,710
7.375% 9/15/01
PX Escrow Corp. 0% 2/1/06 (e) B3 230 97
Sprint Capital Corp.:
5.875% 5/1/04 Baa1 3,430 3,201
6.875% 11/15/28 Baa1 1,980 1,646
Trizec Finance Ltd. yankee Baa3 895 877
10.875% 10/15/05
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
FINANCE - CONTINUED
CREDIT & OTHER FINANCE -
CONTINUED
TXU Eastern Funding 6.75% Baa1 $ 810 $ 707
5/15/09
U.S. West Capital Funding, Baa1 435 361
Inc. 6.875% 7/15/28
38,388
SAVINGS & LOANS - 0.1%
Long Island Savings Bank FSB Baa3 1,700 1,677
6.2% 4/2/01
TOTAL FINANCE 98,450
HEALTH - 0.2%
DRUGS & PHARMACEUTICALS - 0.0%
Global Health Sciences, Inc. Caa1 250 83
11% 5/1/08
Warner Chilcott, Inc. 12.625% B2 345 350
2/15/08 (g)
433
MEDICAL FACILITIES MANAGEMENT
- 0.2%
Express Scripts, Inc. 9.625% Ba2 360 345
6/15/09
Fountain View, Inc. 11.25% Caa1 700 322
4/15/08
Harborside Healthcare Corp. B3 585 117
0% 8/1/08 (e)
Mariner Post-Acute Network, B3 920 0
Inc. 9.5% 11/1/07 (d)
Oxford Health Plans, Inc. 11% B2 1,140 1,174
5/15/05
Tenet Healthcare Corp. 8.125% Ba3 1,030 917
12/1/08
Unilab Corp. 12.75% 10/1/09 B3 735 750
3,625
TOTAL HEALTH 4,058
INDUSTRIAL MACHINERY &
EQUIPMENT - 0.3%
ELECTRICAL EQUIPMENT - 0.0%
Loral Space & Communications B1 90 63
Ltd. 9.5% 1/15/06
Motors & Gears, Inc. 10.75% B3 970 926
11/15/06
Telex Communications, Inc. B2 550 369
10.5% 5/1/07
1,358
INDUSTRIAL MACHINERY &
EQUIPMENT - 0.1%
Tenneco Automotive, Inc. B2 900 837
11.625% 10/15/09
Thermadyne Holdings Corp. 0% Caa1 1,080 410
6/1/08 (e)
Thermadyne Manufacturing LLC B3 770 601
9.875% 6/1/08
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
INDUSTRIAL MACHINERY &
EQUIPMENT - CONTINUED
INDUSTRIAL MACHINERY &
EQUIPMENT - CONTINUED
Tokheim Corp. 11.375% 8/1/08 B3 $ 390 $ 39
Tyco International Group SA Baa1 1,000 980
yankee 6.125% 6/15/01
2,867
POLLUTION CONTROL - 0.2%
Allied Waste North America,
Inc.:
7.375% 1/1/04 Ba3 140 125
7.625% 1/1/06 Ba2 90 77
7.875% 1/1/09 Ba2 150 122
10% 8/1/09 B2 4,640 3,666
Envirosource, Inc. 9.75% Caa3 530 239
6/15/03
4,229
TOTAL INDUSTRIAL MACHINERY & 8,454
EQUIPMENT
MEDIA & LEISURE - 2.1%
BROADCASTING - 1.8%
Adelphia Communications Corp.:
7.75% 1/15/09 B1 780 634
9.875% 3/1/05 B1 2,235 2,140
9.875% 3/1/07 B1 720 671
American Mobile Satellite - 245 152
Corp. 12.25% 4/1/08
British Sky Broadcasting Baa3 1,500 1,444
Group PLC 8.2% 7/15/09
Charter Communications
Holdings LLC/Charter
Communications Holdings
Capital Corp.:
8.625% 4/1/09 B2 1,380 1,152
10.25% 1/15/10 (g) B2 215 197
Clear Channel Communications, Baa3 1,200 981
Inc. 7.25% 10/15/27
Continental Cablevision, Inc.:
8.3% 5/15/06 Baa2 1,640 1,652
9% 9/1/08 Baa2 2,510 2,618
Diamond Cable Communications
PLC:
0% 2/15/07 (e) B3 870 657
yankee 0% 12/15/05 (e) B3 320 298
Earthwatch, Inc. 0% 7/15/07 - 1,160 742
unit (e)(g)
EchoStar DBS Corp. 9.375% B2 1,805 1,697
2/1/09
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
MEDIA & LEISURE - CONTINUED
BROADCASTING - CONTINUED
Fox Family Worldwide, Inc. 0% B1 $ 565 $ 331
11/1/07 (e)
Impsat Fiber Networks, Inc. B3 850 727
13.75% 2/15/05 (g)
International Cabletel, Inc. B3 2,510 2,284
0% 2/1/06 (e)
LIN Holdings Corp. 0% 3/1/08 B3 790 470
(e)
Nielsen Media Research, Inc. Baa2 1,375 1,286
7.6% 6/15/09
NorthPoint Communication Caa1 1,005 864
Holdings, Inc. 12.875%
2/15/10 (g)
NTL Communications Corp. B3 980 978
11.5% 10/1/08
Olympus Communications B1 1,690 1,639
LP/Olympus Capital Corp.
10.625% 11/15/06
Satelites Mexicanos SA de CV:
10.03% 6/30/04 (g)(h) B1 663 597
10.125% 11/1/04 B3 1,530 995
Shaw Communications, Inc. Baa2 1,210 1,159
8.25% 4/11/10
Spectrasite Holdings, Inc. 0% B3 625 320
3/15/10 (e)(g)
TCI Communications Financing A3 1,600 1,737
III 9.65% 3/31/27
Telewest PLC 0% 10/1/07 (e) B1 2,205 2,073
Time Warner, Inc. 6.85% Baa3 7,120 6,805
1/15/26
UIH Australia/Pacific, Inc.:
Series B 0% 5/15/06 (e) B2 4,390 3,688
Series D 0% 5/15/06 (e) B2 430 361
United International B3 3,215 1,897
Holdings, Inc. 0% 2/15/08
(e)
United Pan-Europe
Communications NV:
0% 2/1/10 (e)(g) B2 2,015 866
10.875% 11/1/07 (g) B2 110 93
10.875% 8/1/09 B2 1,030 865
11.25% 11/1/09 (g) B2 160 135
11.25% 2/1/10 (g) B2 430 366
45,571
ENTERTAINMENT - 0.1%
AMC Entertainment, Inc. 9.5% Caa1 430 198
3/15/09
Cinemark USA, Inc. 9.625% B2 180 101
8/1/08
Hollywood Entertainment Corp. B3 198 169
10.625% 8/15/04
MGM Grand, Inc. 9.75% 6/1/07 Ba2 440 435
Premier Parks, Inc.:
0% 4/1/08 (e) B3 1,270 835
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
MEDIA & LEISURE - CONTINUED
ENTERTAINMENT - CONTINUED
Premier Parks, Inc.: -
continued
9.25% 4/1/06 B3 $ 355 $ 330
Regal Cinemas, Inc.:
8.875% 12/15/10 Caa2 250 90
9.5% 6/1/08 Caa2 1,560 624
2,782
LEISURE DURABLES & TOYS - 0.0%
Marvel Enterprises, Inc. 12% - 760 498
6/15/09
LODGING & GAMING - 0.1%
HMH Properties, Inc. 7.875% Ba2 220 195
8/1/05
KSL Recreation Group, Inc. B2 730 683
10.25% 5/1/07
Signature Resorts, Inc. 9.25% Caa3 900 279
5/15/06
1,157
PUBLISHING - 0.1%
News America, Inc.:
7.125% 4/8/28 Baa3 700 551
7.3% 4/30/28 Baa3 1,330 1,071
Time Warner Entertainment Co. Baa2 750 729
LP 8.375% 3/15/23
2,351
RESTAURANTS - 0.0%
AFC Enterprises, Inc. 10.25% B3 690 649
5/15/07
NE Restaurant, Inc. 10.75% B3 230 176
7/15/08
825
TOTAL MEDIA & LEISURE 53,184
NONDURABLES - 0.3%
BEVERAGES - 0.1%
Seagram JE & Sons, Inc.:
6.625% 12/15/05 Baa3 795 729
6.8% 12/15/08 Baa3 2,310 2,045
2,774
FOODS - 0.1%
ConAgra, Inc. 7.125% 10/1/26 Baa1 3,600 3,418
HOUSEHOLD PRODUCTS - 0.0%
AKI Holding Corp. 0% 7/1/09 Caa1 180 83
(e)
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
NONDURABLES - CONTINUED
TOBACCO - 0.1%
RJ Reynolds Tobacco Holdings, Baa2 $ 2,000 $ 1,820
Inc. 7.375% 5/15/03
TOTAL NONDURABLES 8,095
RETAIL & WHOLESALE - 0.6%
APPAREL STORES - 0.0%
Mothers Work, Inc. 12.625% B3 500 463
8/1/05
Specialty Retailers, Inc.:
8.5% 7/15/05 Caa3 1,400 56
9% 7/15/07 Ca 760 1
520
DRUG STORES - 0.1%
Rite Aid Corp.:
6.5% 12/15/05 (g) Caa1 2,135 918
7.125% 1/15/07 Caa1 940 414
1,332
GENERAL MERCHANDISE STORES -
0.3%
Federated Department Stores,
Inc.:
6.79% 7/15/27 Baa1 7,000 6,659
8.5% 6/15/03 Baa1 1,700 1,722
8,381
GROCERY STORES - 0.1%
Jitney-Jungle Stores of
America, Inc.:
10.375% 9/15/07 (d) C 360 4
12% 3/1/06 (d) Caa3 230 35
Kroger Co. 6% 7/1/00 Baa3 2,660 2,659
Pathmark Stores, Inc. 9.625% Caa3 280 196
5/1/03 (d)
2,894
RETAIL & WHOLESALE,
MISCELLANEOUS - 0.1%
Lowe's Companies, Inc. 8.25% A2 1,500 1,496
6/1/10
TOTAL RETAIL & WHOLESALE 14,623
SERVICES - 0.1%
LEASING & RENTAL - 0.0%
Rent-A-Center, Inc. 11% B2 470 456
8/15/08
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
SERVICES - CONTINUED
PRINTING - 0.1%
Sullivan Graphics, Inc. Caa1 $ 1,810 $ 1,810
12.75% 8/1/05
World Color Press, Inc. 7.75% Baa3 360 319
2/15/09
2,129
SERVICES - 0.0%
AP Holdings, Inc. 0% 3/15/08 Caa2 130 13
(e)
Apcoa, Inc. 9.25% 3/15/08 Caa1 1,030 340
Medaphis Corp. 9.5% 2/15/05 Caa1 1,110 844
1,197
TOTAL SERVICES 3,782
TECHNOLOGY - 1.1%
COMPUTER SERVICES & SOFTWARE
- 0.3%
Amazon.com, Inc. 0% 5/1/08 (e) Caa1 505 288
Colo.com 13.875% 3/15/10 unit - 690 687
(g)
Concentric Network Corp. B- 480 492
12.75% 12/15/07
Covad Communications Group,
Inc.:
0% 3/15/08 (e) B3 1,552 947
12% 2/15/10 (g) B3 1,125 1,035
12.5% 2/15/09 B3 410 385
Exodus Communications, Inc. B- 2,185 2,152
10.75% 12/15/09
PSINet, Inc.:
10% 2/15/05 B3 560 493
10.5% 12/1/06 B3 440 383
11% 8/1/09 B3 340 296
11.5% 11/1/08 B3 250 221
Verio, Inc. 10.625% 11/15/09 B3 430 473
(g)
7,852
COMPUTERS & OFFICE EQUIPMENT
- 0.6%
Comdisco, Inc.:
5.95% 4/30/02 Baa1 2,500 2,385
6.375% 11/30/01 Baa1 4,500 4,361
7.25% 9/1/02 Baa1 9,000 8,751
Dictaphone Corp. 11.75% 8/1/05 Caa1 495 507
Globix Corp. 12.5% 2/1/10 - 1,070 899
16,903
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
TECHNOLOGY - CONTINUED
ELECTRONIC INSTRUMENTS - 0.1%
Telecommunications Techniques B3 $ 1,570 $ 1,429
Co. LLC 9.75% 5/15/08
ELECTRONICS - 0.1%
ChipPAC International Ltd. B3 240 250
12.75% 8/1/09
Fairchild Semiconductor Corp. B3 440 436
10.375% 10/1/07
Hadco Corp. 9.5% 6/15/08 B2 760 761
Micron Technology, Inc. 6.5% B3 1,000 820
9/30/05 (k)
SCG Holding B2 150 158
Corp./Semiconductor
Components Industries LLC
12% 8/1/09
2,425
TOTAL TECHNOLOGY 28,609
TRANSPORTATION - 0.6%
AIR TRANSPORTATION - 0.1%
Atlas Air, Inc.:
8.77% 1/2/11 Ba2 756 716
10.75% 8/1/05 B2 160 161
Continental Airlines, Inc.
pass thru trust certificates:
7.434% 3/15/06 Baa1 640 609
7.73% 9/15/12 Baa1 260 243
Delta Air Lines, Inc. Baa1 648 610
equipment trust certificate
8.54% 1/2/07
2,339
RAILROADS - 0.5%
Burlington Northern Santa Fe
Corp.:
6.875% 12/1/27 Baa2 5,000 4,182
7.29% 6/1/36 Baa2 4,360 4,048
Norfolk Southern Corp. 7.05% Baa1 5,800 5,576
5/1/37
13,806
TOTAL TRANSPORTATION 16,145
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
UTILITIES - 2.8%
CELLULAR - 0.9%
Cable & Wireless A2 $ 7,370 $ 7,267
Communications PLC 6.375%
3/6/03
Cellnet Data Systems, Inc. 0% - 2,530 202
10/1/07 (e)
McCaw International Ltd. 0% Caa1 4,460 3,144
4/15/07 (e)
Metrocall, Inc.:
10.375% 10/1/07 B3 775 523
11% 9/15/08 B3 250 170
Millicom International Caa1 4,270 3,565
Cellular SA 0% 6/1/06 (e)
Nextel Communications, Inc. B1 1,940 1,819
9.375% 11/15/09
Nextel International, Inc. 0% Caa1 1,480 895
4/15/08 (e)
Orbital Imaging Corp.:
11.625% 3/1/05 CCC+ 170 77
11.625% 3/1/05 CCC+ 250 113
Orion Network Systems, Inc. B2 1,270 508
0% 1/15/07 (e)
PageMart Nationwide, Inc. 15% B3 1,500 1,418
2/1/05
Telesystem International
Wireless, Inc.:
0% 6/30/07 (e) Caa1 1,410 917
0% 11/1/07 (e) Caa1 1,290 722
Vodafone AirTouch PLC 7.75% A2 2,740 2,624
2/15/10 (g)
23,964
ELECTRIC UTILITY - 0.6%
Avon Energy Partners Holdings Baa2 3,500 3,115
6.46% 3/4/08 (g)
DR Investments UK PLC yankee A2 5,000 4,924
7.1% 5/15/02 (g)
Illinois Power Co. 7.5% Baa1 1,260 1,190
6/15/09
Israel Electric Corp. Ltd. A3 5,790 4,901
7.75% 12/15/27 (g)
Niagara Mohawk Power Corp. Baa3 650 659
8.875% 5/15/07
Texas Utilities Co. 6.375% Baa3 1,970 1,717
1/1/08
16,506
GAS - 0.1%
CMS Panhandle Holding Co.:
6.125% 3/15/04 Baa3 1,550 1,443
7% 7/15/29 Baa3 1,150 964
2,407
TELEPHONE SERVICES - 1.2%
Allegiance Telecom, Inc. 0% B3 659 465
2/15/08 (e)
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
UTILITIES - CONTINUED
TELEPHONE SERVICES - CONTINUED
FirstWorld Communications, - $ 1,365 $ 618
Inc. 0% 4/15/08 (e)
Flag Telecom Holdings Ltd. B2 220 202
11.625% 3/30/10 (g)
Hyperion Telecommunications,
Inc.:
0% 4/15/03 (e) B3 135 122
12% 11/1/07 Caa1 260 254
ICG Holdings, Inc.:
0% 9/15/05 (e) B3 1,320 1,247
0% 5/1/06 (e) B3 470 381
ICG Services, Inc.:
0% 2/15/08 (e) B3 2,730 1,365
0% 5/1/08 (e) B3 190 91
Intermedia Communications, B2 555 408
Inc. 0% 7/15/07 (e)
KMC Telecom Holdings, Inc.:
0% 2/15/08 (e) Caa2 1,060 482
13.5% 5/15/09 Caa2 490 421
Logix Communications - 590 189
Enterprises, Inc. 12.25%
6/15/08
Metromedia Fiber Network, B2 920 865
Inc. 10% 11/15/08
NEXTLINK Communications, Inc.:
0% 12/1/09 (e)(g) B2 825 439
10.75% 11/15/08 B3 40 38
10.75% 6/1/09 B2 780 749
Pathnet, Inc. 12.25% 4/15/08 - 1,390 806
Rhythms NetConnections, Inc.:
0% 5/15/08 (e) B3 1,415 637
12.75% 4/15/09 B3 500 395
14% 2/15/10 (g) B3 425 344
RSL Communications Ltd./RSL B2 425 327
Communications PLC 12.25%
11/15/06
RSL Communications PLC 9.875% B2 515 327
11/15/09
Telecomunicaciones de Puerto Baa2 1,985 1,813
Rico, Inc. 6.65% 5/15/06
Teleglobe Canada, Inc.:
7.2% 7/20/09 Baa1 3,863 3,642
7.7% 7/20/29 Baa1 3,233 3,039
Teligent, Inc. 11.5% 12/1/07 Caa1 100 75
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
UTILITIES - CONTINUED
TELEPHONE SERVICES - CONTINUED
WinStar Communications, Inc.:
0% 4/15/10 (e)(g) B3 $ 2,865 $ 1,225
12.5% 4/15/08 (g) B3 1,295 1,208
12.75% 4/15/10 (g) B3 1,981 1,827
WorldCom, Inc. 8.875% 1/15/06 A3 5,667 5,873
Worldwide Fiber, Inc. 12% B3 835 777
8/1/09
30,651
TOTAL UTILITIES 73,528
TOTAL NONCONVERTIBLE BONDS 359,681
TOTAL CORPORATE BONDS 399,550
(Cost $440,183)
U.S. GOVERNMENT AND
GOVERNMENT AGENCY
OBLIGATIONS - 9.7%
U.S. GOVERNMENT AGENCY
OBLIGATIONS - 2.2%
Fannie Mae:
6.5% 4/29/09 Aaa 15,800 14,509
7.125% 2/15/05 Aaa 4,825 4,770
7.25% 5/15/30 Aaa 6,100 6,041
Farm Credit Systems Financial Aaa 3,400 3,576
Assistance Corp. 9.375%
7/21/03
Federal Agricultural Mortgage Aaa 1,720 1,698
Corp. 7.01% 2/10/04
Freddie Mac:
5.75% 3/15/09 Aaa 4,000 3,543
6.25% 7/15/04 Aaa 12,080 11,576
6.875% 1/15/05 Aaa 3,675 3,596
Government Trust Certificates
(assets of Trust guaranteed
by U.S. Government through
Defense Security Assistance
Agency):
Class 1-C, 9.25% 11/15/01 Aaa 705 718
Class 2-E, 9.4% 5/15/02 Aaa 535 542
Guaranteed Export Trust
Certificates (assets of
Trust guaranteed by U.S.
Government through
Export-Import Bank):
Series 1993-C, 5.2% 10/15/04 Aaa 255 243
U.S. GOVERNMENT AND
GOVERNMENT AGENCY
OBLIGATIONS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
U.S. GOVERNMENT AGENCY
OBLIGATIONS - CONTINUED
Guaranteed Export Trust
Certificates (assets of
Trust guaranteed by U.S.
Government through
Export-Import Bank): -
continued
Series 1993-D, 5.23% 5/15/05 Aaa $ 460 $ 434
Series 1994-A, 7.12% 4/15/06 Aaa 502 500
Guaranteed Trade Trust Aaa 412 411
Certificates (assets of
Trust guaranteed by U.S.
Government through
Export-Import Bank) Series
1994-B, 7.5% 1/26/06
Overseas Private Investment
Corp. U.S. Government
guaranteed participation
certificate:
Series 1994-195, 6.08% Aaa 1,290 1,260
8/15/04 (callable)
Series 1996-A1, 6.726% - 4,565 4,470
9/15/10 (callable)
TOTAL U.S. GOVERNMENT AGENCY 57,887
OBLIGATIONS
U.S. TREASURY OBLIGATIONS -
7.5%
U.S. Treasury Bonds:
8% 11/15/21 Aaa 12,090 14,361
8.75% 5/15/17 Aaa 9,200 11,384
8.875% 8/15/17 Aaa 25,170 31,521
9.875% 11/15/15 Aaa 16,585 22,089
14% 11/15/11 Aaa 2,695 3,710
U.S. Treasury Notes:
5.5% 2/15/08 Aaa 12,755 12,016
5.875% 11/15/04 Aaa 23,800 23,138
6.5% 5/31/02 Aaa 14,175 14,109
6.625% 6/30/01 Aaa 8,100 8,087
7% 7/15/06 Aaa 39,170 40,002
U.S. Treasury Notes - coupon Aaa 28,470 13,676
STRIPS 0% 11/15/11
TOTAL U.S. TREASURY 194,093
OBLIGATIONS
TOTAL U.S. GOVERNMENT AND 251,980
GOVERNMENT AGENCY OBLIGATIONS
(Cost $256,078)
U.S. GOVERNMENT AGENCY -
MORTGAGE SECURITIES - 11.8%
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
FANNIE MAE - 9.9%
5.5% 2/1/11 to 4/1/11 Aaa $ 12,464 $ 11,399
6% 6/1/11 to 1/1/29 Aaa 32,242 29,188
6.5% 2/1/24 to 11/1/29 Aaa 125,222 116,195
6.5% 6/1/30 (j) Aaa 14,000 12,959
7% 12/1/23 to 5/1/30 Aaa 14,686 13,953
7.5% 2/1/15 to 3/1/30 Aaa 47,400 46,155
8% 8/1/26 to 4/1/30 Aaa 26,003 25,803
8% 6/1/30 Aaa 1,100 1,091
TOTAL FANNIE MAE 256,743
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION - 1.9%
6.5% 5/15/28 to 3/15/29 Aaa 14,327 13,402
7% 12/15/25 to 7/15/28 Aaa 2,133 2,047
7.5% 2/15/23 to 12/15/28 Aaa 29,200 28,699
8% 11/15/21 to 12/15/26 Aaa 6,717 6,738
TOTAL GOVERNMENT NATIONAL 50,886
MORTGAGE ASSOCIATION
TOTAL U.S. GOVERNMENT AGENCY 307,629
- MORTGAGE SECURITIES
(Cost $319,288)
ASSET-BACKED SECURITIES - 0.6%
Airplanes pass through trust Ba2 642 482
10.875% 3/15/19
American Express Credit A1 1,600 1,519
Account Master Trust 6.1%
12/15/06
Chase Manhattan Grantor Trust:
6.61% 9/15/02 Aaa 0 0
6.76% 9/15/02 A3 182 180
Chevy Chase Auto Receivables Aaa 205 203
Trust 6.6% 12/15/02
Discover Card Master Trust I A2 2,000 1,923
5.85% 11/16/04
Ford Credit Auto Owner Trust:
6.2% 12/15/02 Baa2 1,970 1,932
6.4% 12/15/02 Baa2 1,090 1,068
7.03% 11/15/03 Aaa 611 607
Key Auto Finance Trust:
6.3% 10/15/03 A2 899 893
6.65% 10/15/03 Baa3 264 263
ASSET-BACKED SECURITIES -
CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
Premier Auto Trust 5.59% Aaa $ 5,000 $ 4,802
2/9/04
Sears Credit Account Master Aaa 1,550 1,520
Trust II 7% 7/15/08
TOTAL ASSET-BACKED SECURITIES 15,392
(Cost $15,990)
COMMERCIAL MORTGAGE
SECURITIES - 0.9%
Berkeley Federal Bank & Trust - 1,836 1,252
FSB Series 1994-1 Class B,
7.5003% 8/1/24 (g)(h)
CS First Boston Mortgage
Securities Corp.:
Series 1997-C2 Class D, 7.27% Baa2 3,070 2,777
1/17/35
Series 1998-FL1:
Class D, 6.6325% 12/10/00 A2 2,400 2,390
(g)(h)
Class E, 6.9825% 1/10/13 Baa2 5,360 5,330
(g)(h)
First Chicago/Lennar Trust I
Series 1997-CHL1:
Class D, 8.1256% 4/13/39 (h) - 700 568
Class E, 8.1256% 4/1/39 (h) - 650 468
General Motors Acceptance Ba3 500 395
Corp. Commercial Mortgage
Securities, Inc. Series
1996-C1 Class F, 7.86%
10/15/28 (g)
GS Mortgage Securities Corp. Baa3 2,600 2,230
II Series 1998-GLII Class E,
7.1905% 4/13/31 (g)(h)
Morgan Stanley Capital I, - 725 720
Inc. Series 1996-MBL1 Class
E, 8.3885% 5/25/21 (g)(h)
Penn Mutual Life Insurance - 1,250 795
Co. (The)/Penn Insurance &
Annuity Co. Series 1996-PML
Class K, 7.9% 11/15/26 (g)
Resolution Trust Corp. Series Baa3 200 162
1991-M2 Class A3, 7.4076%
9/25/20 (h)
Structured Asset Securities BB 1,000 914
Corp. Series 1995-C1 Class
E, 7.375% 9/25/24 (g)
Thirteen Affiliates of Aaa 4,500 4,164
General Growth Properties,
Inc. sequential pay Series 1
Class A2, 6.602% 12/15/10 (g)
Wells Fargo Capital Markets Aaa 0 0
Apartment Financing Trust
Series APT Class 1, 6.56%
12/29/05 (g)
TOTAL COMMERCIAL MORTGAGE 22,165
SECURITIES
(Cost $22,941)
FOREIGN GOVERNMENT AND
GOVERNMENT AGENCY
OBLIGATIONS (I) - 0.5%
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
Korean Republic yankee:
8.75% 4/15/03 Baa2 $ 855 $ 864
8.875% 4/15/08 Baa2 1,340 1,361
Quebec Province yankee 6.86% A2 8,000 7,639
4/15/26 (f)
United Mexican States 9.875% Baa3 2,000 1,984
2/1/10
TOTAL FOREIGN GOVERNMENT AND 11,848
GOVERNMENT AGENCY OBLIGATIONS
(Cost $12,156)
SUPRANATIONAL OBLIGATIONS -
0.1%
Inter-American Development Aaa 4,000 3,730
Bank yankee 6.29% 7/16/27
(Cost $3,975)
CASH EQUIVALENTS - 4.4%
SHARES
Central Cash Collateral Fund, 4,780,000 4,780
6.54% (c)
Taxable Central Cash Fund, 110,312,930 110,313
6.37% (c)
TOTAL CASH EQUIVALENTS 115,093
(Cost $115,093)
TOTAL INVESTMENT PORTFOLIO - 2,622,702
101.0%
(Cost $2,342,684)
NET OTHER ASSETS - (1.0)% (25,297)
NET ASSETS - 100% $ 2,597,405
</TABLE>
SECURITY TYPE ABBREVIATIONS
PIES - Premium Income Equity
Securities
QUIPS - Quarterly Income Preferred
Securities
LEGEND
(a) Non-income producing
(b) S&P credit ratings are used in the absence of a rating by Moody's
Investors Service, Inc.
(c) The rate quoted is the annualized seven-day yield of the fund at
period end.
(d) Non-income producing - issuer filed for protection under the
Federal Bankruptcy Code or is in default of interest payment.
(e) Debt obligation initially issued in zero coupon form which
converts to coupon form at a specified rate and date. The rate shown
is the rate at period end.
(f) Debt obligation initially issued at one coupon which converts to a
higher coupon at a specified date. The rate shown is the rate at
period end.
(g) 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 $77,325,000 or 3.0% of net assets.
(h) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(i) For foreign government obligations not individually rated by S&P
or Moody's, the ratings listed have been assigned by FMR, the fund's
investment adviser, based principally on S&P and Moody's ratings of
the sovereign credit of the issuing government.
(j) Security purchased on a delayed delivery or when-issued basis.
(k) Restricted securities - Investment in securities not registered
under the Securities Act of 1933.
Additional information on each holding is as follows:
SECURITY ACQUISITION DATE ACQUISITION COST (000S)
Micron Technology, Inc. 6.5% 3/3/99 $ 774
9/30/05
Mothers Work, Inc. 6/18/98 $ 1
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total
value of investments in securities, is as follows (ratings are
unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 25.9% AAA, AA, A 23.3%
Baa 6.3% BBB 6.3%
Ba 0.3% BB 0.6%
B 3.5% B 4.2%
Caa 0.9% CCC 0.5%
Ca, C 0.0% CC, C 0.0%
D 0.0%
The percentage not rated by Moody's or S&P amounted to 1.2%. FMR has
determined that unrated debt securities that are lower quality account
for 1.1% of the total value of investment in securities.
INCOME TAX INFORMATION
At May 31, 2000, the aggregate cost of investment securities for
income tax purposes was $2,350,981,000. Net unrealized appreciation
aggregated $271,721,000, of which $368,365,000 related to appreciated
investment securities and $96,644,000 related to depreciated
investment securities.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AMOUNTS IN THOUSANDS (EXCEPT
PER-SHARE AMOUNTS)
MAY 31, 2000
ASSETS
Investment in securities, at $ 2,622,702
value (cost $2,342,684) -
See accompanying schedule
Commitment to sell securities $ (13,099)
on a delayed delivery basis
Receivable for securities 13,134 35
sold on a delayed delivery
basis
Receivable for investments 32,362
sold, regular delivery
Cash 104
Receivable for fund shares 1,835
sold
Dividends receivable 1,513
Interest receivable 12,771
Other receivables 401
TOTAL ASSETS 2,671,723
LIABILITIES
Payable for investments $ 46,048
purchased Regular delivery
Delayed delivery 13,079
Payable for fund shares 7,807
redeemed
Accrued management fee 927
Distribution fees payable 1,122
Other payables and accrued 555
expenses
Collateral on securities 4,780
loaned, at value
TOTAL LIABILITIES 74,318
NET ASSETS $ 2,597,405
Net Assets consist of:
Paid in capital $ 2,223,240
Undistributed net investment 16,130
income
Accumulated undistributed net 77,995
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 280,040
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS $ 2,597,405
STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
AMOUNTS IN THOUSANDS (EXCEPT
PER-SHARE AMOUNTS)
MAY 31, 2000
CALCULATION OF MAXIMUM $17.34
OFFERING PRICE CLASS A: NET
ASSET VALUE and redemption
price per share ($61,885
(divided by) 3,568 shares)
Maximum offering price per $18.40
share (100/94.25 of $17.34)
CLASS T: NET ASSET VALUE and $17.37
redemption price per share
($2,309,768 (divided by)
132,942 shares)
Maximum offering price per $18.00
share (100/96.50 of $17.37)
CLASS B: NET ASSET VALUE and $17.26
offering price per share
($114,239 (divided by)
6,620.6 shares) A
CLASS C: NET ASSET VALUE and $17.25
offering price per share
($55,830 (divided by) 3,236
shares) A
INSTITUTIONAL CLASS: NET $17.48
ASSET VALUE, offering price
and redemption price per
share ($55,683 (divided by)
3,186 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
SIX MONTHS ENDED MAY 31, 2000
INVESTMENT INCOME $ 12,777
Dividends
Interest 41,032
Security lending 9
TOTAL INCOME 53,818
EXPENSES
Management fee $ 6,087
Transfer agent fees 2,849
Distribution fees 7,358
Accounting and security 309
lending fees
Non-interested trustees' 9
compensation
Custodian fees and expenses 45
Registration fees 65
Audit 20
Legal 10
Miscellaneous 4
Total expenses before 16,756
reductions
Expense reductions (237) 16,519
NET INVESTMENT INCOME 37,299
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 85,275
Foreign currency transactions (61) 85,214
Change in net unrealized
appreciation (depreciation)
on:
Investment securities (164,682)
Assets and liabilities in (13)
foreign currencies
Delayed delivery commitments 35 (164,660)
NET GAIN (LOSS) (79,446)
NET INCREASE (DECREASE) IN $ (42,147)
NET ASSETS RESULTING FROM
OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
AMOUNTS IN THOUSANDS SIX MONTHS ENDED MAY 31, 2000 YEAR ENDED NOVEMBER 30, 1999
INCREASE (DECREASE) IN NET
ASSETS
Operations Net investment $ 37,299 $ 78,121
income
Net realized gain (loss) 85,214 150,661
Change in net unrealized (164,660) (63,666)
appreciation (depreciation)
NET INCREASE (DECREASE) IN (42,147) 165,116
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (33,707) (79,816)
From net investment income
From net realized gain (133,986) (283,307)
TOTAL DISTRIBUTIONS (167,693) (363,123)
Share transactions - net (297,236) 150,767
increase (decrease)
TOTAL INCREASE (DECREASE) (507,076) (47,240)
IN NET ASSETS
NET ASSETS
Beginning of period 3,104,481 3,151,721
End of period (including $ 2,597,405 $ 3,104,481
undistributed net investment
income of $16,130 and
$12,538, respectively)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS A
SIX MONTHS ENDED MAY 31, YEARS ENDED NOVEMBER 30, YEARS ENDED OCTOBER 31,
2000 1999 1998 H 1998 1997
SELECTED PER-SHARE DATA
Net asset value, beginning $ 18.64 $ 19.91 $ 19.25 $ 18.75 $ 16.04
of period
Income from Investment
Operations
Net investment income D .25 .50 .05 .53 .48
Net realized and unrealized (.51) .53 .61 1.80 2.83
gain (loss)
Total from investment (.26) 1.03 .66 2.33 3.31
operations
Less Distributions
From net investment income (.23) (.52) - (.57) (.49)
From net realized gain (.81) (1.78) - (1.26) (.11)
Total distributions (1.04) (2.30) - (1.83) (.60)
Net asset value, end of period $ 17.34 $ 18.64 $ 19.91 $ 19.25 $ 18.75
TOTAL RETURN B, C (1.51)% 5.65% 3.43% 13.04% 20.99%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 62 $ 59 $ 17 $ 16 $ 8
(in millions)
Ratio of expenses to average .92% A .93% 1.02% A 1.05% 1.41% F
net assets
Ratio of expenses to average .90% A, G .91% G 1.02% A 1.02% G 1.40% G
net assets after expense
reductions
Ratio of net investment 2.89% A 2.68% 3.13% A 2.76% 2.68%
income to average net
assets
Portfolio turnover 134% A 93% 73% A 85% 70%
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
FINANCIAL HIGHLIGHTS - CLASS A
YEARS ENDED OCTOBER 31,
1996 E
SELECTED PER-SHARE DATA
Net asset value, beginning $ 15.22
of period
Income from Invest- ment
Operations
Net investment income D .08
Net realized and unrealized .88
gain (loss)
Total from investment .96
operations
Less Distributions
From net investment income (.14)
From net realized gain -
Total distributions (.14)
Net asset value, end of period $ 16.04
TOTAL RETURN B, C 6.34%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 1
(in millions)
Ratio of expenses to average 1.50% A, F
net assets
Ratio of expenses to average 1.49% A, G
net assets after expense
reductions
Ratio of net investment 3.07% A
income to average net
assets
Portfolio turnover 223%
</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 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.
H ONE MONTH ENDED NOVEMBER 30
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS T
SIX MONTHS ENDED MAY 31, YEARS ENDED NOVEMBER 30, YEARS ENDED OCTOBER 31,
2000 1999 1998 F 1998 1997
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 18.67 $ 19.96 $ 19.30 $ 18.79 $ 16.07
period
Income from Investment
Operations
Net investment income .23 D .46 D .05 D .51 D .53 D
Net realized and unrealized (.51) .51 .61 1.80 2.84
gain (loss)
Total from investment (.28) .97 .66 2.31 3.37
operations
Less Distributions
From net investment income (.21) (.48) - (.54) (.54)
From net realized gain (.81) (1.78) - (1.26) (.11)
Total distributions (1.02) (2.26) - (1.80) (.65)
Net asset value, end of period $ 17.37 $ 18.67 $ 19.96 $ 19.30 $ 18.79
TOTAL RETURN B, C (1.63)% 5.30% 3.42% 12.90% 21.36%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 2,310 $ 2,802 $ 2,993 $ 2,903 $ 2,901
millions)
Ratio of expenses to average 1.16% A 1.16% 1.22% A 1.16% 1.17%
net assets
Ratio of expenses to average 1.15% A, E 1.14% E 1.22% A 1.15% E 1.17%
net assets after expense
reductions
Ratio of net investment 2.64% A 2.45% 2.92% A 2.68% 2.98%
income to average net assets
Portfolio turnover 134% A 93% 73% A 85% 70%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS T
YEARS ENDED OCTOBER 31,
1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 15.30 $ 14.67
period
Income from Investment
Operations
Net investment income .51 D .59
Net realized and unrealized .88 .54
gain (loss)
Total from investment 1.39 1.13
operations
Less Distributions
From net investment income (.59) (.50)
From net realized gain (.03) -
Total distributions (.62) (.50)
Net asset value, end of period $ 16.07 $ 15.30
TOTAL RETURN B, C 9.30% 7.85%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 2,993 $ 3,441
millions)
Ratio of expenses to average 1.26% 1.47%
net assets
Ratio of expenses to average 1.25% E 1.46% E
net assets after expense
reductions
Ratio of net investment 3.32% 3.99%
income to average net assets
Portfolio turnover 223% 297%
</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 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.
F ONE MONTH ENDED NOVEMBER 30
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL
STATEMENTS.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS B
SIX MONTHS ENDED MAY 31, YEARS ENDED NOVEMBER 30, YEARS ENDED OCTOBER 31,
2000 1999 1998 G 1998
SELECTED PER-SHARE DATA
Net asset value, beginning $ 18.54 $ 19.86 $ 19.21 $ 18.71
of period
Income from Investment
Operations
Net investment income D .18 .36 .04 .38
Net realized and unrealized (.50) .50 .61 1.81
gain (loss)
Total from investment (.32) .86 .65 2.19
operations
Less Distributions
From net investment income (.15) (.40) - (.43)
From net realized gain (.81) (1.78) - (1.26)
Total distributions (.96) (2.18) - (1.69)
Net asset value, end of $ 17.26 $ 18.54 $ 19.86 $ 19.21
period
TOTAL RETURN B, C (1.86)% 4.71% 3.38% 12.25%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 114 $ 124 $ 57 $ 51
millions)
Ratio of expenses to average 1.71% A 1.69% 1.80% A 1.74%
net assets
Ratio of expenses to average 1.70% A, F 1.68% F 1.80% A 1.73% F
net assets after expense
reductions
Ratio of net investment 2.10% A 1.91% 2.35% A 2.02%
income to average net assets
Portfolio turnover 134% A 93% 73% A 85%
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
FINANCIAL HIGHLIGHTS - CLASS B
YEARS ENDED OCTOBER 31,
1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning $ 16.36
of period
Income from Investment
Operations
Net investment income D .29
Net realized and unrealized 2.38
gain (loss)
Total from investment 2.67
operations
Less Distributions
From net investment income (.32)
From net realized gain -
Total distributions (.32)
Net asset value, end of $ 18.71
period
TOTAL RETURN B, C 16.40%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 16
millions)
Ratio of expenses to average 2.12% A
net assets
Ratio of expenses to average 2.11% A, F
net assets after expense
reductions
Ratio of net investment 1.88% A
income to average net assets
Portfolio turnover 70%
</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 DECEMBER 31, 1996 (COMMENCEMENT OF SALE OF CLASS B
SHARES) TO OCTOBER 31, 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.
G ONE MONTH ENDED NOVEMBER 30
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS C
SIX MONTHS ENDED MAY 31, YEARS ENDED NOVEMBER 30, YEAR ENDED OCTOBER 31,
2000 1999 1998 H 1998 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 18.55 $ 19.88 $ 19.22 $ 19.05
period
Income from Investment
Operations
Net investment income D .18 .36 .04 .36
Net realized and unrealized (.51) .48 .62 1.56
gain (loss)
Total from investment (.33) .84 .66 1.92
operations
Less Distributions
From net investment income (.16) (.39) - (.49)
From net realized gain (.81) (1.78) - (1.26)
Total distributions (.97) (2.17) - (1.75)
Net asset value, end of period $ 17.25 $ 18.55 $ 19.88 $ 19.22
TOTAL RETURN B, C (1.91)% 4.60% 3.43% 10.62%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 56 $ 53 $ 21 $ 20
(in millions)
Ratio of expenses to average 1.68% A 1.66% 1.77% A 1.80% A, F
net assets
Ratio of expenses to average 1.66% A, G 1.65% G 1.76% A, G 1.79% A, G
net assets after expense
reductions
Ratio of net investment 2.13% A 1.95% 2.37% A 1.89% A
income to average net assets
Portfolio turnover 134% A 93% 73% A 85%
</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 OCTOBER 31, 1998.
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.
H ONE MONTH ENDED NOVEMBER 30
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
SIX MONTHS ENDED MAY 31, YEARS ENDED NOVEMBER 30, YEARS ENDED OCTOBER 31,
2000 1999 1998 H 1998 1997
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 18.77 $ 20.03 $ 19.35 $ 18.85 $ 16.11
period
Income from Investment
Operations
Net investment income .28 D .56 D .05 D .60 D .61 D
Net realized and unrealized (.51) .53 .63 1.81 2.86
gain (loss)
Total from investment (.23) 1.09 .68 2.41 3.47
operations
Less Distributions
From net investment income (.25) (.57) - (.65) (.62)
From net realized gain (.81) (1.78) - (1.26) (.11)
Total distributions (1.06) (2.35) - (1.91) (.73)
Net asset value, end of period $ 17.48 $ 18.77 $ 20.03 $ 19.35 $ 18.85
TOTAL RETURN B, C (1.34)% 5.95% 3.51% 13.45% 21.97%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 56 $ 67 $ 63 $ 61 $ 39
millions)
Ratio of expenses to average .63% A .64% .66% A .65% .69%
net assets
Ratio of expenses to average .62% A, G .63% G .66% A .63% G .69%
net assets after expense
reductions
Ratio of net investment 3.18% A 2.96% 3.48% A 3.15% 3.42%
income to average net assets
Portfolio turnover 134% A 93% 73% A 85% 70%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
YEARS ENDED OCTOBER 31,
1996 1995 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 15.40 $ 15.23
period
Income from Investment
Operations
Net investment income .54 D .25
Net realized and unrealized .87 .09
gain (loss)
Total from investment 1.41 .34
operations
Less Distributions
From net investment income (.67) (.17)
From net realized gain (.03) -
Total distributions (.70) (.17)
Net asset value, end of period $ 16.11 $ 15.40
TOTAL RETURN B, C 9.41% 2.22%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 22 $ 1
millions)
Ratio of expenses to average 1.06% .92% A, F
net assets
Ratio of expenses to average 1.03% G .91% A, G
net assets after expense
reductions
Ratio of net investment 3.54% 4.54% A
income to average net assets
Portfolio turnover 223% 297%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
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 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.
H ONE MONTH ENDED NOVEMBER 30
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL
STATEMENTS.
NOTES TO FINANCIAL STATEMENTS
For the period ended May 31, 2000
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Balanced 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. Equity securities for which quotations are readily
available are valued at the last sale price, or if no sale price, at
the closing bid price. Foreign equity securities are valued based on
quotations from the principal market in which such securities are
normally traded. If trading or events occurring in other markets after
the close of the principal market in which foreign securities are
traded, and before the close of the business of the fund, are expected
to materially affect the value of those securities, then they are
valued at their fair value taking this trading or these events into
account. Fair value is determined in good faith under consistently
applied procedures under the general supervision of the Board of
Trustees. Debt securities for which quotations are readily available
are valued by a pricing service at their market values as determined
by their most recent bid prices in the principal market (sales prices
if the principal market is an exchange) in which such securities are
normally traded. Securities (including restricted securities) for
which market quotations are not readily available are valued at their
fair value. 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.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
FOREIGN CURRENCY TRANSLATION - CONTINUED
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.
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, paydown gains/losses on certain
securities, foreign currency transactions, market discount,
non-taxable dividends 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.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
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 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, Federal Agency,
or other obligations found to be satisfactory by FMR 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.
CENTRAL CASH FUNDS. Pursuant to an Exemptive Order issued by the SEC,
the fund may invest in the Taxable Central Cash Fund and the Central
Cash Collateral Fund (the Cash Funds) managed by Fidelity Investments
Money Management, Inc. (FIMM), an affiliate of FMR. The Cash Funds are
open-end money market funds available only to investment companies and
other accounts managed by FMR and its affiliates. The Cash Funds seek
preservation of capital, liquidity, and current income. Income
distributions from the Cash Funds are declared daily and paid monthly
from net interest income. Income distributions earned by the fund are
recorded as either interest income or security lending income in the
accompanying financial statements.
2. OPERATING POLICIES - CONTINUED
DELAYED DELIVERY TRANSACTIONS. The fund may purchase or sell
securities on a delayed delivery basis. Payment and delivery may take
place after the customary settlement period for that security. The
price of the underlying securities and the date when the securities
will be delivered and paid for are fixed at the time the transaction
is negotiated. The market values of the securities purchased on a
delayed delivery basis are identified as such in the fund's schedule
of investments. The fund may receive compensation for interest forgone
in the purchase of a delayed delivery security. With respect to
purchase commitments, the fund identifies securities as segregated in
its records with a value at least equal to the amount of the
commitment. Losses may arise due to changes in the market value of the
underlying securities or if the counterparty does not perform under
the contract.
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, restricted securities (excluding 144A
issues) amounted to $821,000 or 0.0% of net assets.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $1,855,292,000 and $2,261,414,000, respectively, of which
U.S. government and government agency obligations aggregated
$443,014,000 and $411,240,000, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus a
fixed individual fund fee rate applied to the average net assets of
the fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds advised by FMR. The rates ranged from .2167% to .5200% for the
period. The annual individual fund fee rate is .15%. 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 .43% of average net
assets.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the
1940 Act, the Board of Trustees have adopted separate Distribution and
Service 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 $ 75,000 $ 0
CLASS T 6,418,000 46,000
CLASS B 595,000 447,000
CLASS C 270,000 136,000
$ 7,358,000 $ 629,000
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 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 is paid to securities
dealers, banks and other financial institutions.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
SALES LOAD - CONTINUED
For the period, sales charge amounts paid to and retained by FDC were
as follows:
PAID TO FDC RETAINED BY FDC
CLASS A $ 93,000 $ 32,000
CLASS T 277,000 73,000
CLASS B 233,000 233,000*
CLASS C 19,000 19,000*
$ 622,000 $ 357,000
* 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.
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 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 $ 61,000 .21*
CLASS T 2,537,000 .20*
CLASS B 144,000 .24*
CLASS C 56,000 .21*
INSTITUTIONAL CLASS 51,000 .17*
$ 2,849,000
* ANNUALIZED
ACCOUNTING AND SECURITY LENDING FEES. Fidelity Service Company, Inc.,
an affiliate of FMR, maintains the fund's accounting records and
administers the security lending program. The security lending fee is
based on the number and duration of lending transactions. The
accounting fee is based on the level of average net assets for the
month plus out-of-pocket expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $73,000 for the
period.
5. SECURITY LENDING.
The fund lends portfolio securities from time to time in order to earn
additional income. The fund receives collateral in the form of U.S.
Treasury obligations, letters of credit, and/or cash against the
loaned securities, and maintains collateral in an amount not less than
100% of the market value of the loaned securities during the period of
the loan. The market value of the loaned securities is determined at
the close of business of the fund and any additional required
collateral is delivered to the fund on the next business day. If the
borrower defaults on its obligation to return the securities loaned
because of insolvency or other reasons, the fund could experience
delays and costs in recovering the securities loaned or in gaining
access to the collateral. At period end, the value of the securities
loaned amounted to $4,705,000. The fund received cash collateral of
$4,780,000 which was invested in cash equivalents.
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. The interest
rate on the borrowings is the bank's base rate, as revised from time
to time. The average daily loan balance during the period for which
the loan was outstanding amounted to $2,157,000. The weighted average
interest rate was 6.60%. At period end there were no bank borrowing
outstanding.
7. EXPENSE REDUCTIONS.
FMR has directed certain portfolio trades to brokers who paid a
portion of the fund's expenses. For the period, the fund's expenses
were reduced by $229,000 under this arrangement.
In addition, through arrangements with the fund's custodian and each
class' transfer agent, 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 $7,000 under the custodian
arrangement, and each applicable class' expenses were reduced as
follows under the transfer agent arrangements:
TRANSFER AGENT CREDITS
CLASS A $ 1,000
8. BENEFICIAL INTEREST.
At the end of the period, one shareholder was record owner of
approximately 12% of the total outstanding shares of the fund.
9. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS SIX MONTHS ENDED MAY 31, 2000 YEAR ENDED NOVEMBER 30, 1999
FROM NET INVESTMENT INCOME
Class A $ 730 $ 939
Class T 30,650 74,262
Class B 1,001 1,847
Class C 467 731
Institutional Class 859 2,037
Total $ 33,707 $ 79,816
FROM NET REALIZED GAIN
Class A $ 2,577 $ 1,512
Class T 120,792 269,024
Class B 5,431 5,204
Class C 2,339 1,905
Institutional Class 2,847 5,662
Total $ 133,986 $ 283,307
$ 167,693 $ 363,123
</TABLE>
10. SHARE TRANSACTIONS.
Transactions for each class of shares for the periods were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
AMOUNTS IN THOUSANDS SHARES DOLLARS
SIX MONTHS ENDED MAY 31, YEAR ENDED NOVEMBER 30, SIX MONTHS ENDED MAY 31,
2000 1999 2000
CLASS A Shares sold 1,194 2,611 $ 21,331
Reinvestment of distributions 175 128 3,126
Shares redeemed (988) (399) (17,410)
Net increase (decrease) 381 2,340 $ 7,047
CLASS T Shares sold 12,088 28,944 $ 215,375
Reinvestment of distributions 7,974 17,793 142,917
Shares redeemed (37,161) (46,676) (661,809)
Net increase (decrease) (17,099) 61 $ (303,517)
CLASS B Shares sold 1,045 4,784 $ 18,478
Reinvestment of distributions 326 349 5,798
Shares redeemed (1,434) (1,332) (25,306)
Net increase (decrease) (63) 3,801 $ (1,030)
CLASS C Shares sold 1,096 2,102 $ 19,513
Reinvestment of distributions 123 109 2,184
Shares redeemed (815) (441) (14,345)
Net increase (decrease) 404 1,770 $ 7,352
INSTITUTIONAL CLASS Shares 359 1,124 $ 6,405
sold
Reinvestment of distributions 202 406 3,634
Shares redeemed (950) (1,107) (17,127)
Net increase (decrease) (389) 423 $ (7,088)
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
DOLLARS
AMOUNTS IN THOUSANDS
YEAR ENDED NOVEMBER 30,
1999
CLASS A Shares sold $ 49,162
Reinvestment of distributions 2,356
Shares redeemed (7,485)
Net increase (decrease) $ 44,033
CLASS T Shares sold $ 546,131
Reinvestment of distributions 325,900
Shares redeemed (877,940)
Net increase (decrease) $ (5,909)
CLASS B Shares sold $ 89,864
Reinvestment of distributions 6,381
Shares redeemed (24,790)
Net increase (decrease) $ 71,455
CLASS C Shares sold $ 39,467
Reinvestment of distributions 2,008
Shares redeemed (8,264)
Net increase (decrease) $ 33,211
INSTITUTIONAL CLASS Shares $ 21,324
sold
Reinvestment of distributions 7,458
Shares redeemed (20,805)
Net increase (decrease) $ 7,977
</TABLE>
INDEPENDENT AUDITORS' REPORT
To the Trustees of Fidelity Advisor
Series I and Shareholders of
Fidelity Advisor Balanced Fund:
We have audited the accompanying statement of assets and liabilities
of Fidelity Advisor Balanced Fund, (the fund), a series of Fidelity
Advisor Series I (the Trust), including the portfolio of investments,
as of May 31, 2000, and the related statement of operations for the
six months then ended, the statement of changes in net assets for the
six months then ended and the year ended November 30, 1999, and the
financial highlights for the six months ended May 31, 2000, the year
ended November 30, 1999, the one month ended November 30, 1998, and
for each of the years in the four-year period ended October 31, 1998.
These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and financial
highlights based on our audits.
We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that
we plan and perform the audit to obtain reasonable assurance about
whether the financial statements and financial highlights are free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned
as of May 31, 2000, by correspondence with the custodian and brokers;
where replies were not received from brokers, we performed other
auditing procedures. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of Fidelity Advisor Balanced Fund as of May 31,
2000, the results of its operations for the six months then ended, the
changes in its net assets for the six months then ended and the year
ended November 30, 1999, and its financial highlights for the six
months ended May 31, 2000, the year ended November 30, 1999, the one
month ended November 30, 1998, and for each of the years in the
four-year period ended October 31, 1998, in conformity with accounting
principles generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
July 6, 2000
INVESTMENT ADVISER
Fidelity Management &
Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research
(U.K.) Inc.
Fidelity Management & Research
(Far East) Inc.
Fidelity Investments Japan Ltd.
Fidelity Investments
Money Management, Inc.
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Richard A. Spillane, Jr., Vice President
Kevin Grant, Vice President
John Avery, Vice President
Eric D. Roiter, Secretary
Robert A Dwight, Treasurer
Maria F. Dwyer, Deputy Treasurer
John H. Costello, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
Donald J. Kirk *
Ned C. Lautenbach *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
* INDEPENDENT TRUSTEES
ADVISORY BOARD
J. Michael Cook
GENERAL DISTRIBUTOR
Fidelity Distributions 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 Telecommunications & Utilities Growth Fund
GROWTH FUNDS
Fidelity Advisor Latin America Fund
Fidelity Advisor Emerging Asia 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(registered trademark)
Growth Fund
Fidelity Advisor Small Cap Fund
Fidelity Advisor Value Strategies Fund
Fidelity Advisor Mid Cap Fund
Fidelity Advisor Dynamic Capital Appreciation Fund
Fidelity Advisor Equity Growth Fund
Fidelity Advisor Large Cap Fund
Fidelity Advisor Dividend Growth Fund
Fidelity Advisor Growth
Opportunities Fund
AIG-SANN-0700 106023
1.703549.102
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 High Income 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
MONEY MARKET FUNDS
Prime Fund
Treasury Fund
Tax-Exempt Fund
(2_FIDELITY_LOGOS)(registered trademark)
FIDELITY(REGISTERED TRADEMARK) ADVISOR
BALANCED FUND -
INSTITUTIONAL CLASS
SEMIANNUAL REPORT
MAY 31, 2000
(2_FIDELITY_LOGOS)(registered trademark)
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over
time.
FUND TALK 6 The managers' 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 40 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 49 Notes to the financial
statements.
INDEPENDENT AUDITORS' REPORT 58 The auditors' opinion.
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 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 technology sell-off that began in mid-March continued to hamper
equity markets, driving the tech-heavy NASDAQ index down more than 16%
year to date through the end of May. Broader equity indexes, including
the S&P 500(registered trademark), also were down, but not as much as
more concentrated performance measures. In bond markets, Treasuries
got a boost late in the period as economic reports showed the first
signs of a slowing economy.
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 an investment in a money market fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although money market funds seek to preserve the
value of your investment at $1.00 per share, it is possible to lose
money by investing in these types of funds.
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 BALANCED 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). 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. If Fidelity had not reimbursed
certain class expenses, the past five year and past 10 year total
returns would have been lower.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CUMULATIVE TOTAL RETURNS
PERIODS ENDED MAY 31, 2000 PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY ADV BALANCED - INST CL -1.34% -1.81% 69.80% 195.04%
Fidelity Balanced 60/40 2.47% 7.36% 115.86% 260.76%
Composite
S&P 500 (registered trademark) 2.90% 10.48% 190.44% 398.93%
LB Aggregate Bond 1.38% 2.11% 33.62% 111.28%
Balanced Funds Average 2.78% 5.39% 89.23% 205.16%
</TABLE>
CUMULATIVE TOTAL RETURNS show Institutional Class' performance in
percentage terms over a set period - in this case, six months, 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 Fidelity Balanced 60/40 Composite
Index, a hypothetical combination of unmanaged indices. The composite
index combines the total returns of the Standard & Poor's 500 Index
and the Lehman Brothers Aggregate Bond Index. To measure how
Institutional Class' performance stacked up against its peers, you can
compare it to the balanced funds average, which reflects the
performance of mutual funds with similar objectives tracked by Lipper
Inc. The past six months average represents a peer group of 476 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 MAY 31, 2000 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY ADV BALANCED - INST CL -1.81% 11.17% 11.43%
Fidelity Balanced 60/40 7.36% 16.64% 13.69%
Composite
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 Balanced -CL I Fid Balanced 60/40 Comp
LB Aggregate Bond S&P 500
00642 F0021
LB001 SP001
1990/05/31 10000.00 10000.00
10000.00 10000.00
1990/06/30 10042.42 10023.60
10161.00 9932.00
1990/07/31 10016.54 10059.68
10301.22 9900.22
1990/08/31 9403.99 9460.13
10163.19 9005.24
1990/09/30 9186.93 9215.11
10247.54 8566.68
1990/10/31 9099.52 9238.15
10377.68 8529.85
1990/11/30 9510.36 9675.67
10600.80 9080.87
1990/12/31 9801.00 9898.01
10766.18 9334.23
1991/01/31 10307.03 10206.04
10899.68 9741.20
1991/02/28 10910.71 10678.58
10992.32 10437.70
1991/03/31 11187.83 10863.11
11068.17 10690.29
1991/04/30 11402.98 10925.68
11187.71 10715.95
1991/05/31 11878.11 11234.22
11252.60 11178.88
1991/06/30 11634.66 10923.25
11246.97 10666.88
1991/07/31 12132.26 11289.40
11403.30 11163.96
1991/08/31 12439.86 11547.48
11649.61 11428.55
1991/09/30 12531.45 11525.54
11886.10 11237.69
1991/10/31 12896.53 11669.38
12018.04 11388.28
1991/11/30 12595.34 11430.15
12128.60 10929.33
1991/12/31 13180.53 12350.51
12488.82 12179.64
1992/01/31 13267.24 12145.49
12318.97 11953.10
1992/02/29 13546.65 12271.81
12399.05 12108.49
1992/03/31 13498.56 12100.74
12329.61 11872.38
1992/04/30 13605.46 12349.04
12418.39 12221.42
1992/05/31 13877.57 12478.71
12653.09 12281.31
1992/06/30 13751.39 12436.03
12827.71 12098.32
1992/07/31 14152.96 12842.69
13089.39 12593.14
1992/08/31 14152.96 12736.61
13221.59 12334.98
1992/09/30 14270.05 12887.41
13378.93 12480.53
1992/10/31 14220.70 12845.91
13200.99 12524.21
1992/11/30 14309.52 13109.77
13203.63 12951.29
1992/12/31 14393.08 13289.90
13413.57 13110.59
1993/01/31 14664.65 13458.94
13671.11 13220.72
1993/02/28 14978.00 13662.98
13910.35 13400.52
1993/03/31 15543.31 13858.91
13968.78 13683.27
1993/04/30 15985.60 13696.48
14066.56 13352.14
1993/05/31 16290.99 13923.84
14084.85 13709.97
1993/06/30 16186.10 14048.88
14339.78 13749.73
1993/07/31 16355.92 14047.19
14421.52 13694.73
1993/08/31 16950.29 14464.96
14673.90 14213.77
1993/09/30 16791.82 14413.75
14713.51 14104.32
1993/10/31 17016.42 14614.10
14767.95 14396.28
1993/11/30 16791.82 14481.11
14642.43 14259.51
1993/12/31 17222.05 14617.53
14721.50 14432.05
1994/01/31 17700.75 14994.66
14920.24 14922.74
1994/02/28 17389.04 14646.48
14660.62 14518.34
1994/03/31 16694.57 14118.62
14298.51 13885.34
1994/04/30 16559.93 14181.87
14184.12 14063.07
1994/05/31 16627.25 14320.86
14182.70 14293.70
1994/06/30 16311.69 14097.74
14151.50 13943.51
1994/07/31 16627.11 14487.40
14433.11 14400.86
1994/08/31 16829.88 14850.74
14450.43 14991.29
1994/09/30 16717.42 14545.11
14238.01 14624.00
1994/10/31 16559.39 14736.24
14225.20 14953.04
1994/11/30 16333.63 14401.25
14193.90 14408.45
1994/12/31 16344.91 14569.14
14291.84 14622.13
1995/01/31 16299.39 14911.20
14574.82 15001.28
1995/02/28 16583.94 15401.81
14921.70 15585.88
1995/03/31 16859.48 15712.09
15012.72 16045.82
1995/04/30 17043.11 16077.71
15222.90 16518.37
1995/05/31 17375.94 16712.17
15812.03 17178.61
1995/06/30 17584.54 16993.90
15927.45 17577.67
1995/07/31 17850.63 17317.06
15892.41 18160.55
1995/08/31 17908.47 17426.95
16084.71 18206.13
1995/09/30 18092.94 17935.82
16240.73 18974.43
1995/10/31 18011.07 17990.67
16451.86 18906.69
1995/11/30 18502.28 18572.49
16698.64 19736.69
1995/12/31 18796.54 18891.12
16932.42 20116.82
1996/01/31 18951.30 19326.82
17044.18 20801.60
1996/02/29 18653.70 19299.80
16747.61 20994.43
1996/03/31 18511.86 19357.28
16630.37 21196.61
1996/04/30 18499.85 19485.11
16537.24 21509.04
1996/05/31 18595.89 19771.04
16504.17 22063.76
1996/06/30 18704.69 19922.21
16725.32 22147.83
1996/07/31 18316.52 19415.62
16770.48 21169.33
1996/08/31 18449.96 19648.11
16741.97 21615.80
1996/09/30 19191.52 20448.34
17033.28 22832.33
1996/10/31 19705.25 20968.30
17411.42 23462.05
1996/11/30 20769.41 22062.71
17709.16 25235.54
1996/12/31 20428.13 21718.40
17544.46 24735.63
1997/01/31 21136.84 22559.51
17598.85 26281.11
1997/02/28 21472.54 22688.19
17642.85 26487.15
1997/03/31 20744.66 22028.10
17447.01 25398.80
1997/04/30 21610.58 22949.32
17708.72 26915.11
1997/05/31 22489.06 23874.82
17876.95 28553.70
1997/06/30 23353.95 24630.22
18089.69 29832.90
1997/07/31 24643.67 26072.12
18578.11 32206.71
1997/08/31 23568.91 25107.14
18420.19 30402.49
1997/09/30 24530.82 26080.84
18692.81 32067.63
1997/10/31 24033.57 25709.45
18963.86 30996.57
1997/11/30 24607.32 26470.81
19051.09 32431.40
1997/12/31 25110.30 26850.46
19243.51 32988.25
1998/01/31 25357.83 27166.11
19489.82 33353.10
1998/02/28 26292.94 28332.95
19474.23 35758.53
1998/03/31 27231.69 29242.04
19540.45 37589.72
1998/04/30 27425.80 29479.37
19642.06 37967.87
1998/05/31 27384.21 29287.34
19828.66 37315.21
1998/06/30 27998.34 30100.51
19996.87 38830.95
1998/07/31 27956.41 29933.72
20039.30 38417.40
1998/08/31 25048.94 27531.92
20365.47 32863.01
1998/09/30 26378.00 28847.96
20842.26 34968.22
1998/10/31 27265.72 30194.98
20732.30 37812.53
1998/11/30 28223.89 31361.45
20849.72 40104.35
1998/12/31 29143.85 32483.40
20912.41 42415.16
1999/01/31 29501.33 33391.28
21061.79 44188.96
1999/02/28 28955.59 32535.40
20694.05 42815.57
1999/03/31 29718.67 33388.65
20808.87 44528.62
1999/04/30 30786.22 34206.87
20874.83 46253.21
1999/05/31 30048.35 33601.89
20691.13 45161.18
1999/06/30 30713.18 34677.91
20625.05 47667.62
1999/07/31 30001.13 33970.06
20538.43 46179.44
1999/08/31 29637.19 33862.27
20527.99 45950.85
1999/09/30 29091.92 33462.55
20766.21 44691.34
1999/10/31 29888.52 34782.44
20842.82 47519.41
1999/11/30 29904.45 35205.75
20841.37 48485.47
1999/12/31 30643.13 36382.02
20740.88 51341.27
2000/01/31 29672.98 35237.71
20673.03 48761.88
2000/02/29 29170.33 35007.92
20923.01 47838.82
2000/03/31 30770.23 37247.17
21198.47 52518.89
2000/04/30 30010.68 36532.20
21137.98 50938.60
2000/05/31 29504.31 36075.70
21128.28 49893.34
IMATRL PRASUN SHR__CHT 20000531 20000622 091040 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Balanced Fund - Institutional Class on
May 31, 1990. As the chart shows, by May 31, 2000, the value of the
investment would have grown to $29,504 - a 195.04% increase on the
initial investment. For comparison, look at how both the Standard &
Poor's 500 Index, a market capitalization-weighted index of common
stocks, and the Lehman Brothers Aggregate Bond Index, a market
value-weighted index of investment-grade fixed-rate debt issues,
including government, corporate, asset-backed, and mortgage-backed
securities, with maturities of one year or more, did over the same
period. With dividends and capital gains, if any, reinvested, the
Standard & Poor's 500 Index would have grown to $49,893 - a 398.93%
increase. If $10,000 was invested in the Lehman Brothers Aggregate
Bond Index, it would have grown to $21,128 - a 111.28% increase. You
can also look at how the Fidelity Balanced 60/40 Composite Index did
over the same period. The composite index combines the total returns
of the Standard & Poor's 500 Index (60%) and the Lehman Brothers
Aggregate Bond Index (40%). With dividends and interest, if any,
reinvested, the same $10,000 would have grown to $36,076 - a 260.76%
increase.
(checkmark)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.
FUND TALK: THE MANAGERS' OVERVIEW
MARKET RECAP
It was the best of times, it was the
worst of times. At least that's how
some investors might describe the
six-month period that ended May 31,
2000. Technology stocks led the
market's narrow advances, soaring
during the first half of the period
as bulls snapped up shares of those
companies expected to fuel the new
economy. The performance disparity
between technology and the broader
market reached an inflection point
in early March, as the tech-laden
NASDAQ set record highs and the
Standard & Poor's 500SM Index
dipped to six-month lows. The tech
bubble burst, though, as the threat
of higher interest rates, coupled
with a sudden loss of confidence in
valuation levels, sent nervous
investors fleeing for stability
elsewhere in the market. The S&P
500, a beneficiary of the mass
migration, recovered its earlier losses
and finished 2.90% higher. The
NASDAQ completed its grueling
six-month round trip up 2.05%. Three
rate hikes levied by the Federal
Reserve Board during the period
in an attempt to cool the economy
made life difficult for bonds as well.
Reflecting the struggle, the Lehman
Brothers Aggregate Bond Index
returned 1.38%. Treasuries managed
to stave off the period's bond malaise,
rallying on the U.S. government's
decision to repurchase long-term
debt and curtail future issuance.
Conversely, the spread sectors -
namely corporate bonds, mortgage
securities and government agencies
- were plagued by deteriorating
technical factors and wider yield
spreads relative to Treasuries.
(photograph of Kevin Grant)(photograph of John Avery)
An interview with John Avery (right), Lead Portfolio Manager of
Fidelity Advisor Balanced Fund, and Kevin Grant, manager for
fixed-income investments
Q. HOW DID THE FUND PERFORM, JOHN?
J.A. For the six months that ended May 31, 2000, the fund's
Institutional Class shares returned -1.34%. In comparison, the
Fidelity Balanced 60/40 Composite Index returned 2.47%, while the
balanced funds average tracked by Lipper Inc. returned 2.78%. For the
12-month period that ended May 31, 2000, the fund's Institutional
Class shares returned -1.81%. For the same period, the Composite index
and Lipper average returned 7.36% and 5.39%, respectively.
Q. WHY DID THE FUND LAG BOTH ITS BENCHMARK AND ITS PEERS DURING THE
SIX-MONTH PERIOD?
J.A. The fund's underexposure to technology during the sector's
impressive run-up early in the period detracted from both relative and
absolute performance. Underweighting tech was double trouble in the
sense that most other areas of the market in which the fund was
invested had a difficult six months. So, even though the technology
group corrected a lot during the second half of the period - as the
market turned elsewhere for growth - it was up so much in the first
half that, for all intents and purposes, our fate was sealed.
Q. HOW DID YOUR ASSET ALLOCATION DECISIONS PLAY OUT FOR THE FUND?
J.A. The fund's equity weighting remained fairly neutral, hovering
around 60% for much of the period. I didn't feel it prudent to make
any significant asset allocation bets, although I did raise the fund's
equity exposure slightly during the market's upturn early in the
period by investing in convertible securities. I used this asset class
as an indirect, less volatile way to participate in some of the names
I liked within the technology sector. This strategy helped provide
some nice yield and afforded us the added benefit of downside
protection, as convertible securities gave back less than their pure
stock equivalents during the correction. In terms of bonds, the fund's
exposure to investment-grade issues paid off, while our small position
in poorly performing high-yield debt detracted from returns.
Q. WHAT WERE SOME OF YOUR OTHER STRATEGIES AND HOW DID THEY INFLUENCE
PERFORMANCE?
J.A. When things started to fall apart for technology in the spring, I
took advantage of the opportunity to increase the fund's exposure to
large, high-quality companies, many of which had dropped sharply from
their highs of the period. However, the fund was hurt by not owning
enough of the period's top performers along the way, particularly
those in technology and telecommunications - namely Oracle, Intel,
Nortel and Sun Microsystems. Looking elsewhere, the fund's healthy
exposure to large drug companies such as Bristol-Myers Squibb and
Merck proved harmful, as the group suffered from the threat of
government regulation and largely unattractive growth rates relative
to tech and biotechnology issues. On a more positive note, our lack of
exposure to a generally weak consumer nondurables sector, and some
good picks in media stocks, such as Time Warner and Viacom, helped
boost returns.
Q. WHAT OTHER STOCKS PERFORMED WELL FOR THE FUND?
J.A. A number of the fund's financial holdings performed well - most
notably Bank of New York, Morgan Stanley Dean Witter, American
International Group and Citigroup - benefiting from strong capital
markets activity. Texas Instruments jumped on higher earnings backed
by strong demand for chips used in a variety of wireless communication
devices.
Q. WHAT STOCKS DISAPPOINTED?
J.A. Motorola was hurt by execution problems and narrowing margins in
its cellular handset business. Traditional telecommunications
providers AT&T, WorldCom and SBC Communications recoiled in response
to increased competition and falling prices. Freddie Mac, a leading
financer of home loans, was plagued by steadily rising interest rates.
Q. TURNING TO YOU, KEVIN, HOW DID THE FUND'S BOND INVESTMENTS FARE?
K.G. The investment-grade portion of the fund performed well during
the six-month period, benefiting from its exposure to a strong rally
in the government market. An announcement by the U.S. Treasury in
January of its intent to repurchase long-term debt and reduce future
issuance sent the price of the long bond higher and its yield lower.
This action, coupled with rising short-term interest rates, induced an
inverted yield curve, which occurs when short-term issues provide a
higher yield than their longer-term counterparts. This inversion hurt
the spread sectors - most notably corporate bonds and mortgage
securities - with yield spreads widening out significantly relative to
comparable duration Treasuries.
Q. HOW DID THIS ENVIRONMENT AFFECT THE FUND?
K.G. The fund was well-positioned for these changes, as we knew about
the Treasury buybacks months in advance and had ample time to prepare
for them. Our strategy to reduce the fund's exposure to long-term
corporates in exchange for more Treasuries worked out beautifully, and
helped the fund's bond subportfolio outperform the Lehman Brothers
Aggregate Bond Index during the period. So, despite the Federal
Reserve Board's efforts to hike interest rates during the period, the
supply/demand imbalance spurred by the Treasury buybacks helped ensure
our success.
Q. JOHN, WHAT'S YOUR OUTLOOK?
J.A. I'm bullish overall, as business remains strong in many areas of
the economy, although I temper that enthusiasm with concern about
interest rates rising further. The Fed has made its position quite
clear that if it hasn't slowed the economy yet, it most assuredly will
do so in the coming months. In this uncertain environment, I believe
the market will begin to focus more on revenues and earnings. As such,
the companies capable of delivering robust top-line growth and strong
bottom-line earnings should be the ones to reap the rewards. Given the
extent to which technology and the Internet have transformed the
global landscape, I expect we'll see strong performance from this
sector going forward. I'll continue to focus my efforts on an
individual company basis, with the hopes of finding the best names in
the tech space and beyond.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGERS ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER AND DO NOT NECESSARILY REPRESENT THE VIEWS OF FIDELITY OR
ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH VIEWS ARE
SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER CONDITIONS
AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE
VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE
INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS
FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY FIDELITY FUND.
(checkmark)FUND FACTS
GOAL: both income and
growth of capital
START DATE: January 6, 1987
SIZE: as of May 31, 2000,
more than $2.5 billion
MANAGER: John Avery, since
1998, and Kevin Grant since
1996; John Avery joined
Fidelity in 1995; Kevin Grant
joined Fidelity in 1993
JOHN AVERY ON THE
IMPORTANCE OF SKILLED,
SEASONED MANAGEMENT IN A
RAPIDLY CHANGING ECONOMY:
"Technology will be a key
differentiating factor for the years
to come in terms of who wins and
who loses in specific industries.
Given the blazing speed at which
things are changing today,
management teams that don't
implement technology and use it to
their advantage are destined for
failure. The only way a company can
stay ahead of the curve is to have
management teams out there,
looking at what the future holds
and reshaping strategy
accordingly.
"The world has become a lot more
complicated due to advances in
technology. Companies today face
a new set of challenges, including
a loss of pricing power, overcapacity,
globalization and rapidly changing
competitor bases. If a firm is
incapable of managing its
business in this sort of environment,
it has little hope of surviving long
term, which doesn't bode well for
its stock price.
"Companies such as General
Electric, which have effectively
harnessed the power of technology
and used it as a competitive
weapon, have enjoyed much success
in recent years. GE - the fund's
top equity holding at the close of
the period - is led by one of the
strongest management teams in the
world, and identified the Internet
as a driving force early on. In doing
so, it was one of the few traditional
companies to stay ahead of the
curve on transitioning into the
new economy."
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C>
TOP FIVE STOCKS AS OF MAY 31,
2000
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
General Electric Co. 3.5 2.5
Cisco Systems, Inc. 2.0 1.2
Intel Corp. 1.5 0.6
Exxon Mobil Corp. 1.3 2.3
Texas Instruments, Inc. 1.3 1.1
9.6 7.7
TOP FIVE BOND ISSUERS AS OF
MAY 31, 2000
(WITH MATURITIES GREATER THAN % OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
ONE YEAR) MONTHS AGO
Fannie Mae 10.9 8.6
U.S. Treasury Obligations 7.5 5.3
Government National Mortgage 1.9 1.8
Association
Freddie Mac 0.7 0.4
Comdisco, Inc. 0.6 0.5
21.6 16.6
TOP FIVE MARKET SECTORS AS OF
MAY 31, 2000
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Technology 20.4 12.6
Finance 11.7 15.0
Utilities 9.7 12.0
Media & Leisure 6.8 6.3
Health 5.9 6.8
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
ASSET ALLOCATION (% OF FUND'S
NET ASSETS)
AS OF MAY 31, 2000 * AS OF NOVEMBER 30, 1999 **
Stocks 57.1% Stocks 61.8%
Bonds 37.5% Bonds 32.2%
Convertible Securities 2.0% Convertible Securities 1.9%
Short-Term Investments and Short-Term Investments and
Net Other Assets 3.4% Net Other Assets 4.1%
* FOREIGN INVESTMENTS 7.0% ** FOREIGN INVESTMENTS 3.9%
Row: 1, Col: 1, Value: 57.1 Row: 1, Col: 1, Value: 61.8
Row: 1, Col: 2, Value: 0.0 Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 37.0 Row: 1, Col: 3, Value: 32.2
Row: 1, Col: 4, Value: 0.0 Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: 2.0 Row: 1, Col: 5, Value: 1.9
Row: 1, Col: 6, Value: 0.0 Row: 1, Col: 6, Value: 0.0
Row: 1, Col: 7, Value: 0.0 Row: 1, Col: 7, Value: 0.0
Row: 1, Col: 8, Value: 3.9 Row: 1, Col: 8, Value: 4.1
</TABLE>
INVESTMENTS MAY 31, 2000
Showing Percentage of Net Assets
<TABLE>
<CAPTION>
<S> <C> <C> <C>
COMMON STOCKS - 56.0%
SHARES VALUE (NOTE 1) (000S)
AEROSPACE & DEFENSE - 0.5%
AEROSPACE & DEFENSE - 0.3%
Boeing Co. 122,400 $ 4,781
Textron, Inc. 39,700 2,491
7,272
SHIP BUILDING & REPAIR - 0.2%
General Dynamics Corp. 86,900 5,133
TOTAL AEROSPACE & DEFENSE 12,405
BASIC INDUSTRIES - 0.6%
CHEMICALS & PLASTICS - 0.5%
E.I. du Pont de Nemours and 117,120 5,739
Co.
Praxair, Inc. 144,200 6,056
11,795
METALS & MINING - 0.1%
Alcoa, Inc. 60,500 3,535
TOTAL BASIC INDUSTRIES 15,330
DURABLES - 0.5%
AUTOS, TIRES, & ACCESSORIES -
0.3%
AutoNation, Inc. (a) 59,900 472
Danaher Corp. 85,800 4,134
Delphi Automotive Systems 204,900 3,701
Corp.
8,307
CONSUMER ELECTRONICS - 0.2%
General Motors Corp. Class H 48,200 4,745
(a)
TOTAL DURABLES 13,052
ENERGY - 4.1%
ENERGY SERVICES - 0.9%
Diamond Offshore Drilling, 136,000 5,559
Inc.
Halliburton Co. 115,600 5,896
Nabors Industries, Inc. (a) 142,500 6,128
Schlumberger Ltd. (NY Shares) 75,900 5,583
23,166
OIL & GAS - 3.2%
BP Amoco PLC 1,100,518 9,973
Burlington Resources, Inc. 134,100 6,135
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
ENERGY - CONTINUED
OIL & GAS - CONTINUED
Chevron Corp. 77,000 $ 7,118
Conoco, Inc. Class B 396,600 11,303
Exxon Mobil Corp. 415,784 34,640
Royal Dutch Petroleum Co. (NY 233,500 14,579
Shares)
83,748
TOTAL ENERGY 106,914
FINANCE - 7.8%
BANKS - 1.6%
Bank of America Corp. 125,400 6,968
Bank of New York Co., Inc. 346,100 16,245
Chase Manhattan Corp. 233,300 17,425
40,638
CREDIT & OTHER FINANCE - 2.4%
American Express Co. 588,000 31,642
Arcadia Financial Ltd. 46 0
warrants 3/15/07 (a)
Associates First Capital 79,400 2,179
Corp. Class A
Citigroup, Inc. 466,850 29,032
62,853
FEDERAL SPONSORED CREDIT - 1.1%
Fannie Mae 207,500 12,476
Freddie Mac 336,200 14,961
27,437
INSURANCE - 1.2%
AFLAC, Inc. 83,000 4,290
American International Group, 250,950 28,248
Inc.
32,538
SECURITIES INDUSTRY - 1.5%
Charles Schwab Corp. 208,650 5,999
Merrill Lynch & Co., Inc. 140,700 13,877
Morgan Stanley Dean Witter & 264,600 19,035
Co.
38,911
TOTAL FINANCE 202,377
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
HEALTH - 5.4%
DRUGS & PHARMACEUTICALS - 5.1%
American Home Products Corp. 131,700 $ 7,095
Amgen, Inc. (a) 96,300 6,127
Bristol-Myers Squibb Co. 399,780 22,013
Eli Lilly & Co. 358,700 27,306
Merck & Co., Inc. 93,700 6,992
Schering-Plough Corp. 600,500 29,049
Warner-Lambert Co. 270,200 32,998
131,580
MEDICAL EQUIPMENT & SUPPLIES
- 0.3%
Johnson & Johnson 42,700 3,822
Medtronic, Inc. 83,100 4,290
8,112
TOTAL HEALTH 139,692
INDUSTRIAL MACHINERY &
EQUIPMENT - 3.6%
ELECTRICAL EQUIPMENT - 3.5%
General Electric Co. 1,711,400 90,062
INDUSTRIAL MACHINERY &
EQUIPMENT - 0.1%
Ingersoll-Rand Co. 53,400 2,433
TOTAL INDUSTRIAL MACHINERY & 92,495
EQUIPMENT
MEDIA & LEISURE - 4.1%
BROADCASTING - 1.6%
AT&T Corp. - Liberty Media 182,300 8,078
Group Class A (a)
Benedek Communications Corp. 10,500 21
warrants 7/1/07 (a)
Clear Channel Communications, 127,800 9,569
Inc. (a)
CS Wireless Systems, Inc. 109 0
(a)(g)
Infinity Broadcasting Corp. 245,800 7,773
Class A (a)
Motient Corp. warrants 4/1/08 245 4
(a)
Time Warner, Inc. 203,601 16,072
UIH Australia/Pacific, Inc. 4,430 89
warrants 5/15/06 (a)
41,606
ENTERTAINMENT - 1.6%
MGM Grand, Inc. 69,200 2,249
Viacom, Inc. Class B 467,909 29,010
(non-vtg.) (a)
Walt Disney Co. 241,500 10,188
41,447
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
MEDIA & LEISURE - CONTINUED
PUBLISHING - 0.7%
McGraw-Hill Companies, Inc. 356,600 $ 18,343
RESTAURANTS - 0.2%
McDonald's Corp. 173,000 6,196
TOTAL MEDIA & LEISURE 107,592
NONDURABLES - 1.6%
BEVERAGES - 0.7%
Anheuser-Busch Companies, 138,800 10,757
Inc.
The Coca-Cola Co. 161,700 8,631
19,388
HOUSEHOLD PRODUCTS - 0.7%
Avon Products, Inc. 44,100 1,822
Clorox Co. 124,300 4,925
Colgate-Palmolive Co. 108,100 5,689
Procter & Gamble Co. 85,100 5,659
18,095
TOBACCO - 0.2%
Philip Morris Companies, Inc. 201,120 5,254
TOTAL NONDURABLES 42,737
RETAIL & WHOLESALE - 2.9%
APPAREL STORES - 0.2%
Mothers Work, Inc. (a)(k) 70 1
The Limited, Inc. 240,000 5,790
5,791
GENERAL MERCHANDISE STORES -
1.6%
Kohls Corp. (a) 83,600 4,326
Target Corp. 177,300 11,114
Wal-Mart Stores, Inc. 455,400 26,242
41,682
RETAIL & WHOLESALE,
MISCELLANEOUS - 1.1%
Home Depot, Inc. 444,100 21,678
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
RETAIL & WHOLESALE - CONTINUED
RETAIL & WHOLESALE,
MISCELLANEOUS - CONTINUED
Lowe's Companies, Inc. 93,300 $ 4,344
Staples, Inc. (a) 102,700 1,515
27,537
TOTAL RETAIL & WHOLESALE 75,010
SERVICES - 0.7%
ADVERTISING - 0.5%
Omnicom Group, Inc. 142,600 11,969
SERVICES - 0.2%
Ecolab, Inc. 150,200 5,745
TOTAL SERVICES 17,714
TECHNOLOGY - 18.3%
COMMUNICATIONS EQUIPMENT - 4.8%
Cisco Systems, Inc. (a) 920,700 52,422
Comverse Technology, Inc. (a) 63,900 5,839
Corning, Inc. 31,500 6,093
Lucent Technologies, Inc. 250,300 14,361
Nokia AB sponsored ADR 490,200 25,490
Nortel Networks Corp. 413,400 22,031
126,236
COMPUTER SERVICES & SOFTWARE
- 3.2%
America Online, Inc. (a) 251,400 13,324
BEA Systems, Inc. (a) 80,300 2,901
Computer Sciences Corp. (a) 40,100 3,847
DecisionOne Corp. 1,447 0
DecisionOne Corp.:
Class A warrants 4/18/07 (a) 849 0
Class B warrants 4/18/07 (a) 1,463 0
Class C warrants 4/18/07 (a) 868 0
Electronic Data Systems Corp. 46,400 2,984
Inktomi Corp. (a) 31,600 3,527
Microsoft Corp. (a) 365,100 22,842
Oracle Corp. (a) 248,700 17,875
Unisys Corp. (a) 346,700 9,404
Yahoo!, Inc. (a) 52,300 5,913
82,617
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
TECHNOLOGY - CONTINUED
COMPUTERS & OFFICE EQUIPMENT
- 3.8%
Compaq Computer Corp. 278,400 $ 7,308
Dell Computer Corp. (a) 354,100 15,271
EMC Corp. (a) 207,800 24,170
Hewlett-Packard Co. 69,300 8,325
International Business 128,122 13,749
Machines Corp.
Network Appliance, Inc. (a) 78,600 5,075
Pitney Bowes, Inc. 205,100 8,922
SCI Systems, Inc. (a) 42,900 1,931
Sun Microsystems, Inc. (a) 191,300 14,658
99,409
ELECTRONIC INSTRUMENTS - 0.4%
Applied Materials, Inc. (a) 86,200 7,198
KLA-Tencor Corp. (a) 52,100 2,582
9,780
ELECTRONICS - 6.1%
Altera Corp. (a) 43,700 3,753
Analog Devices, Inc. (a) 107,100 8,247
Broadcom Corp. Class A (a) 36,700 4,773
Flextronics International 58,400 3,179
Ltd. (a)
Insilco Corp. warrants 600 0
8/15/07 (a)
Intel Corp. 315,400 39,326
JDS Uniphase Corp. (a) 100,800 8,870
Micron Technology, Inc. (a) 180,300 12,610
Motorola, Inc. 175,100 16,416
Sanmina Corp. (a) 70,500 4,486
Texas Instruments, Inc. 457,200 33,033
Tyco International Ltd. 413,290 19,450
Xilinx, Inc. (a) 44,600 3,395
157,538
TOTAL TECHNOLOGY 475,580
UTILITIES - 5.9%
CELLULAR - 2.5%
China Telecom (Hong Kong) 750,000 5,512
Ltd. (a)
Loral Orion Network Systems,
Inc.:
warrants 1/15/07 (CV ratio 6,760 19
.47) (a)
warrants 1/15/07 (CV ratio 1,445 7
.6) (a)
McCaw International Ltd. 6,190 15
warrants 4/16/07 (a)(g)
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
UTILITIES - CONTINUED
CELLULAR - CONTINUED
Nextel Communications, Inc. 88,900 $ 8,234
Class A (a)
QUALCOMM, Inc. (a) 73,400 4,872
Sprint Corp. - PCS Group 290,900 16,145
Series 1 (a)
Vodafone AirTouch PLC 318,400 14,587
sponsored ADR
VoiceStream Wireless Corp. (a) 139,100 15,927
WebLink Wireless, Inc. Class 24,770 158
A (a)
65,476
ELECTRIC UTILITY - 0.3%
AES Corp. (a) 90,300 7,879
NRG Energy, Inc. 47,500 790
8,669
GAS - 0.6%
Dynegy, Inc. Class A 108,600 8,376
Enron Corp. 78,000 5,684
14,060
TELEPHONE SERVICES - 2.5%
AT&T Corp. 148,631 5,156
BellSouth Corp. 334,700 15,626
KMC Telecom Holdings, Inc. 610 2
warrants 4/15/08 (a)(g)
Level 3 Communications, Inc. 50,300 3,839
(a)
McLeodUSA, Inc. Class A (a) 311,700 6,234
Pathnet, Inc. warrants 1,390 14
4/15/08 (a)(g)
SBC Communications, Inc. 417,684 18,248
Sprint Corp. - FON Group 157,400 9,523
WorldCom, Inc. (a) 161,600 6,080
64,722
TOTAL UTILITIES 152,927
TOTAL COMMON STOCKS 1,453,825
(Cost $1,110,672)
PREFERRED STOCKS - 1.6%
CONVERTIBLE PREFERRED STOCKS
- 0.5%
FINANCE - 0.1%
CREDIT & OTHER FINANCE - 0.1%
Host Marriott Financial Trust 70,900 2,349
$3.375 QUIPS (g)
PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
CONVERTIBLE PREFERRED STOCKS
- CONTINUED
INDUSTRIAL MACHINERY &
EQUIPMENT - 0.0%
ELECTRICAL EQUIPMENT - 0.0%
Loral Space & Communications 48,800 $ 1,220
Ltd. Series C, $3.00 (g)
MEDIA & LEISURE - 0.2%
BROADCASTING - 0.2%
MediaOne Group, Inc. 42,300 4,167
(Vodafone AirTouch PLC)
$3.63 PIES
UTILITIES - 0.2%
TELEPHONE SERVICES - 0.2%
Global Crossing Ltd. $16.88 28,000 6,006
TOTAL CONVERTIBLE PREFERRED 13,742
STOCKS
NONCONVERTIBLE PREFERRED
STOCKS - 1.1%
ENERGY - 0.1%
ENERGY SERVICES - 0.1%
R&B Falcon Corp. 13.875% 836 928
FINANCE - 0.0%
INSURANCE - 0.0%
American Annuity Group 1,000 852
Capital Trust II 8.875%
HEALTH - 0.1%
MEDICAL FACILITIES MANAGEMENT
- 0.1%
Fresenius Medical Care 1,331 1,186
Capital Trust II 7.875%
MEDIA & LEISURE - 0.2%
BROADCASTING - 0.2%
Adelphia Communications Corp. 5,170 548
$13.00
Citadel Broadcasting Co. 4,815 515
Series B, 13.25% pay-in-kind
CSC Holdings, Inc.:
11.125% pay-in-kind 24,327 2,566
Series H, 11.75% pay-in-kind 10,140 1,080
Granite Broadcasting Corp. 798 678
12.75% pay-in-kind
5,387
TECHNOLOGY - 0.0%
COMPUTER SERVICES & SOFTWARE
- 0.0%
Concentric Network Corp. 916 886
13.5% pay-in-kind
PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
NONCONVERTIBLE PREFERRED
STOCKS - CONTINUED
UTILITIES - 0.7%
CELLULAR - 0.3%
Nextel Communications, Inc.:
11.125% pay-in-kind 3,723 $ 3,369
Series D, 13% pay-in-kind 3,785 3,823
7,192
TELEPHONE SERVICES - 0.4%
Adelphia Business Solution, 207 188
Inc. 12.875% pay-in-kind
e.spire Communications, Inc.:
12.75% pay-in-kind 1,196 275
14.75% pay-in-kind 323 81
ICG Holdings, Inc.:
14% pay-in-kind 3 2
14.25% pay-in-kind 2,246 1,830
Intermedia Communications, 2,229 2,073
Inc. 13.5% pay-in-kind
NEXTLINK Communications, Inc. 122,798 6,017
14% pay-in-kind
WinStar Communications, Inc. 608 851
14.25% (a)
11,317
TOTAL UTILITIES 18,509
TOTAL NONCONVERTIBLE 27,748
PREFERRED STOCKS
TOTAL PREFERRED STOCKS 41,490
(Cost $46,308)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CORPORATE BONDS - 15.4%
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S)
CONVERTIBLE BONDS - 1.5%
HEALTH - 0.2%
DRUGS & PHARMACEUTICALS - 0.2%
Roche Holdings, Inc. 0% - $ 8,379 6,019
1/19/15 (g)
MEDIA & LEISURE - 0.2%
BROADCASTING - 0.2%
Liberty Media Corp. 3.75% Baa3 4,309 4,422
2/15/30 (g)
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
CONVERTIBLE BONDS - CONTINUED
TECHNOLOGY - 1.0%
COMPUTERS & OFFICE EQUIPMENT
- 0.3%
Juniper Networks, Inc. 4.75% - $ 10,115 $ 8,199
3/15/07
ELECTRONICS - 0.7%
Lattice Semiconductor Corp. B- 4,840 7,647
4.75% 11/1/06
LSI Logic Corp. 4% 2/15/05 B1 4,565 4,696
Vitesse Semiconductor Corp. - 6,190 4,797
4% 3/15/05 (g)
17,140
TOTAL TECHNOLOGY 25,339
UTILITIES - 0.1%
CELLULAR - 0.1%
Nextel Communications, Inc. B1 2,881 2,521
5.25% 1/15/10 (g)
TELEPHONE SERVICES - 0.0%
Level 3 Communications, Inc. Caa1 1,895 1,568
6% 3/15/10
TOTAL UTILITIES 4,089
TOTAL CONVERTIBLE BONDS 39,869
NONCONVERTIBLE BONDS - 13.9%
AEROSPACE & DEFENSE - 0.1%
DEFENSE ELECTRONICS - 0.1%
Raytheon Co. 7.9% 3/1/03 (g) Baa2 2,360 2,338
BASIC INDUSTRIES - 0.6%
CHEMICALS & PLASTICS - 0.3%
Avecia Group PLC 11% 7/1/09 B2 480 473
Huntsman Corp.:
9.5% 7/1/07 (g) B2 600 540
9.5% 7/1/07 (g) B2 2,780 2,502
Huntsman ICI Chemicals LLC B2 910 887
10.125% 7/1/09
Lyondell Chemical Co.:
9.625% 5/1/07 Ba3 680 656
9.875% 5/1/07 Ba3 900 869
10.875% 5/1/09 B2 1,215 1,172
Sterling Chemicals, Inc. Caa3 175 141
11.75% 8/15/06
7,240
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
BASIC INDUSTRIES - CONTINUED
METALS & MINING - 0.0%
Kaiser Aluminum & Chemical
Corp.:
9.875% 2/15/02 B1 $ 195 $ 185
12.75% 2/1/03 B3 537 486
671
PACKAGING & CONTAINERS - 0.1%
Gaylord Container Corp. Caa1 1,505 1,245
9.375% 6/15/07
Packaging Corp. of America B2 1,210 1,186
9.625% 4/1/09
2,431
PAPER & FOREST PRODUCTS - 0.2%
APP China Group Ltd. 14% B3 490 306
3/15/10 unit (g)
APP Finance II Mauritius Ltd. B3 685 322
12% 3/15/04
Container Corp. of America B2 110 109
gtd. 9.75% 4/1/03
Fort James Corp. 6.625% Baa2 390 370
9/15/04
Millar Western Forest B3 1,280 1,216
Products Ltd. 9.875% 5/15/08
Repap New Brunswick, Inc.:
11.5% 6/1/04 B3 90 91
yankee 10.625% 4/15/05 Caa1 760 665
Stone Container Corp.:
10.75% 10/1/02 B1 650 657
12.58% 8/1/16 (h) B2 111 115
3,851
TOTAL BASIC INDUSTRIES 14,193
CONSTRUCTION & REAL ESTATE -
0.9%
CONSTRUCTION - 0.1%
Great Lakes Dredge & Dock B3 730 730
Corp. 11.25% 8/15/08
Lennar Corp. 9.95% 5/1/10 (g) Ba1 225 214
944
ENGINEERING - 0.0%
360networks, Inc. 13% 5/1/08 B3 935 923
(g)
REAL ESTATE - 0.1%
Duke Realty LP 7.3% 6/30/03 Baa1 1,000 975
LNR Property Corp. 9.375% B1 2,870 2,461
3/15/08
3,436
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
CONSTRUCTION & REAL ESTATE -
CONTINUED
REAL ESTATE INVESTMENT TRUSTS
- 0.7%
CenterPoint Properties Trust Baa2 $ 1,190 $ 1,097
6.75% 4/1/05
Equity Office Properties Trust:
6.5% 1/15/04 Baa1 4,000 3,773
6.625% 2/15/05 Baa1 1,250 1,158
ProLogis Trust 6.7% 4/15/04 Baa1 625 587
Spieker Properties LP:
6.8% 5/1/04 Baa2 810 761
6.875% 2/1/05 Baa2 11,225 10,532
17,908
TOTAL CONSTRUCTION & REAL 23,211
ESTATE
DURABLES - 0.0%
TEXTILES & APPAREL - 0.0%
Polymer Group, Inc. 9% 7/1/07 B2 270 221
ENERGY - 0.4%
COAL - 0.0%
P&L Coal Holdings Corp. B2 1,270 1,130
9.625% 5/15/08
OIL & GAS - 0.4%
Anadarko Petroleum Corp. 7.2% Baa1 2,750 2,378
3/15/29
Apache Corp.:
7.625% 7/1/19 Baa1 940 863
7.7% 3/15/26 Baa1 600 549
Apache Finance Property Ltd. Baa1 1,000 898
6.5% 12/15/07
Chesapeake Energy Corp.:
7.875% 3/15/04 B2 140 126
8.5% 3/15/12 B2 165 137
9.125% 4/15/06 B2 120 110
9.625% 5/1/05 B2 630 602
Conoco, Inc. 5.9% 4/15/04 A3 950 893
Great Lakes Carbon Corp. B3 1,090 937
10.25% 5/15/08 pay-in-kind
Occidental Petroleum Corp. Baa3 1,000 995
6.39% 11/9/00
Plains Resources, Inc.:
Series B 10.25% 3/15/06 B2 460 455
Series D 10.25% 3/15/06 B2 230 228
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
ENERGY - CONTINUED
OIL & GAS - CONTINUED
YPF Sociedad Anonima:
7.75% 8/27/07 B1 $ 65 $ 60
8% 2/15/04 B1 450 429
9,660
TOTAL ENERGY 10,790
FINANCE - 3.8%
BANKS - 2.2%
ABN-Amro Bank NV, Chicago A1 5,000 4,931
6.625% 10/31/01
Bank of Tokyo-Mitsubishi Ltd. A3 1,200 1,186
8.4% 4/15/10
BanPonce Financial Corp. A3 3,850 3,824
6.75% 8/9/01
Barclays Bank PLC yankee:
5.875% 7/15/00 A1 2,430 2,430
5.95% 7/15/01 A1 4,550 4,501
Capital One Bank 6.375% Baa2 2,700 2,569
2/15/03
Capital One Financial Corp. Baa3 2,550 2,305
7.125% 8/1/08
Central Fidelity Banks, Inc. A1 9,045 9,094
8.15% 11/15/02
Commonwealth Bank of A1 800 803
Australia 8.5% 6/1/10
First Tennessee National Baa1 720 688
Corp. 6.75% 11/15/05
HSBC Finance Nederland BV A2 250 247
7.4% 4/15/03 (g)
Kansallis-Osake-Pankki (NY A2 710 737
Branch) yankee 10% 5/1/02
Korea Development Bank:
6.625% 11/21/03 Baa2 1,825 1,724
7.375% 9/17/04 Baa2 650 618
yankee 6.5% 11/15/02 Baa2 270 258
MBNA Corp.:
6.34% 6/2/03 Baa2 850 807
6.875% 11/15/02 Baa2 3,700 3,618
Provident Bank 6.125% 12/15/00 A3 3,420 3,397
Sanwa Finance Aruba AEC 8.35% Baa1 5,400 5,250
7/15/09
Sumitomo Bank International Baa1 500 494
Finance NV 8.5% 6/15/09
Summit Bancorp 8.625% 12/10/02 BBB+ 1,250 1,262
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
FINANCE - CONTINUED
BANKS - CONTINUED
Union Planters Corp. 6.75% Baa2 $ 400 $ 377
11/1/05
Wachovia Corp. 6.605% 10/1/25 A1 7,550 7,265
58,385
CREDIT & OTHER FINANCE - 1.5%
Ahmanson Capital Trust I A3 1,700 1,527
8.36% 12/1/26 (g)
AMRESCO, Inc.:
9.875% 3/15/05 Caa3 1,085 543
10% 3/15/04 Caa3 153 80
AT&T Capital Corp. 6.25% A1 4,260 4,192
5/15/01
Bellsouth Capital Funding Aa3 500 489
Corp. 7.75% 2/15/10
CIT Group, Inc.:
5.5% 2/15/04 A1 620 569
7.375% 3/15/03 A1 2,300 2,278
Daimler-Chrysler NA Holding A1 575 564
Corp. 6.59% 6/18/02
ERP Operating LP:
6.55% 11/15/01 A3 850 832
7.1% 6/23/04 A3 1,500 1,433
Finova Capital Corp.:
6.11% 2/18/03 Baa2 800 676
7.25% 11/8/04 Baa2 900 756
First Security Capital I A3 980 864
8.41% 12/15/26
Ford Motor Credit Co. 6.5% A2 3,000 2,933
2/28/02
GS Escrow Corp. 7.125% 8/1/05 Ba1 1,980 1,728
Household Finance Corp. 8% A2 2,700 2,685
5/9/05
Imperial Credit Capital Trust B2 510 408
I 10.25% 6/14/02
Imperial Credit Industries B3 1,500 1,110
9.875% 1/15/07
Macsaver Financial Services,
Inc.:
7.4% 2/15/02 Ba2 250 180
7.875% 8/1/03 Ba2 560 381
Metris Companies, Inc. Ba3 125 119
10.125% 7/15/06
Newcourt Credit Group, Inc. A1 2,575 2,442
6.875% 2/16/05
Popular North America, Inc. A3 4,750 4,710
7.375% 9/15/01
PX Escrow Corp. 0% 2/1/06 (e) B3 230 97
Sprint Capital Corp.:
5.875% 5/1/04 Baa1 3,430 3,201
6.875% 11/15/28 Baa1 1,980 1,646
Trizec Finance Ltd. yankee Baa3 895 877
10.875% 10/15/05
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
FINANCE - CONTINUED
CREDIT & OTHER FINANCE -
CONTINUED
TXU Eastern Funding 6.75% Baa1 $ 810 $ 707
5/15/09
U.S. West Capital Funding, Baa1 435 361
Inc. 6.875% 7/15/28
38,388
SAVINGS & LOANS - 0.1%
Long Island Savings Bank FSB Baa3 1,700 1,677
6.2% 4/2/01
TOTAL FINANCE 98,450
HEALTH - 0.2%
DRUGS & PHARMACEUTICALS - 0.0%
Global Health Sciences, Inc. Caa1 250 83
11% 5/1/08
Warner Chilcott, Inc. 12.625% B2 345 350
2/15/08 (g)
433
MEDICAL FACILITIES MANAGEMENT
- 0.2%
Express Scripts, Inc. 9.625% Ba2 360 345
6/15/09
Fountain View, Inc. 11.25% Caa1 700 322
4/15/08
Harborside Healthcare Corp. B3 585 117
0% 8/1/08 (e)
Mariner Post-Acute Network, B3 920 0
Inc. 9.5% 11/1/07 (d)
Oxford Health Plans, Inc. 11% B2 1,140 1,174
5/15/05
Tenet Healthcare Corp. 8.125% Ba3 1,030 917
12/1/08
Unilab Corp. 12.75% 10/1/09 B3 735 750
3,625
TOTAL HEALTH 4,058
INDUSTRIAL MACHINERY &
EQUIPMENT - 0.3%
ELECTRICAL EQUIPMENT - 0.0%
Loral Space & Communications B1 90 63
Ltd. 9.5% 1/15/06
Motors & Gears, Inc. 10.75% B3 970 926
11/15/06
Telex Communications, Inc. B2 550 369
10.5% 5/1/07
1,358
INDUSTRIAL MACHINERY &
EQUIPMENT - 0.1%
Tenneco Automotive, Inc. B2 900 837
11.625% 10/15/09
Thermadyne Holdings Corp. 0% Caa1 1,080 410
6/1/08 (e)
Thermadyne Manufacturing LLC B3 770 601
9.875% 6/1/08
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
INDUSTRIAL MACHINERY &
EQUIPMENT - CONTINUED
INDUSTRIAL MACHINERY &
EQUIPMENT - CONTINUED
Tokheim Corp. 11.375% 8/1/08 B3 $ 390 $ 39
Tyco International Group SA Baa1 1,000 980
yankee 6.125% 6/15/01
2,867
POLLUTION CONTROL - 0.2%
Allied Waste North America,
Inc.:
7.375% 1/1/04 Ba3 140 125
7.625% 1/1/06 Ba2 90 77
7.875% 1/1/09 Ba2 150 122
10% 8/1/09 B2 4,640 3,666
Envirosource, Inc. 9.75% Caa3 530 239
6/15/03
4,229
TOTAL INDUSTRIAL MACHINERY & 8,454
EQUIPMENT
MEDIA & LEISURE - 2.1%
BROADCASTING - 1.8%
Adelphia Communications Corp.:
7.75% 1/15/09 B1 780 634
9.875% 3/1/05 B1 2,235 2,140
9.875% 3/1/07 B1 720 671
American Mobile Satellite - 245 152
Corp. 12.25% 4/1/08
British Sky Broadcasting Baa3 1,500 1,444
Group PLC 8.2% 7/15/09
Charter Communications
Holdings LLC/Charter
Communications Holdings
Capital Corp.:
8.625% 4/1/09 B2 1,380 1,152
10.25% 1/15/10 (g) B2 215 197
Clear Channel Communications, Baa3 1,200 981
Inc. 7.25% 10/15/27
Continental Cablevision, Inc.:
8.3% 5/15/06 Baa2 1,640 1,652
9% 9/1/08 Baa2 2,510 2,618
Diamond Cable Communications
PLC:
0% 2/15/07 (e) B3 870 657
yankee 0% 12/15/05 (e) B3 320 298
Earthwatch, Inc. 0% 7/15/07 - 1,160 742
unit (e)(g)
EchoStar DBS Corp. 9.375% B2 1,805 1,697
2/1/09
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
MEDIA & LEISURE - CONTINUED
BROADCASTING - CONTINUED
Fox Family Worldwide, Inc. 0% B1 $ 565 $ 331
11/1/07 (e)
Impsat Fiber Networks, Inc. B3 850 727
13.75% 2/15/05 (g)
International Cabletel, Inc. B3 2,510 2,284
0% 2/1/06 (e)
LIN Holdings Corp. 0% 3/1/08 B3 790 470
(e)
Nielsen Media Research, Inc. Baa2 1,375 1,286
7.6% 6/15/09
NorthPoint Communication Caa1 1,005 864
Holdings, Inc. 12.875%
2/15/10 (g)
NTL Communications Corp. B3 980 978
11.5% 10/1/08
Olympus Communications B1 1,690 1,639
LP/Olympus Capital Corp.
10.625% 11/15/06
Satelites Mexicanos SA de CV:
10.03% 6/30/04 (g)(h) B1 663 597
10.125% 11/1/04 B3 1,530 995
Shaw Communications, Inc. Baa2 1,210 1,159
8.25% 4/11/10
Spectrasite Holdings, Inc. 0% B3 625 320
3/15/10 (e)(g)
TCI Communications Financing A3 1,600 1,737
III 9.65% 3/31/27
Telewest PLC 0% 10/1/07 (e) B1 2,205 2,073
Time Warner, Inc. 6.85% Baa3 7,120 6,805
1/15/26
UIH Australia/Pacific, Inc.:
Series B 0% 5/15/06 (e) B2 4,390 3,688
Series D 0% 5/15/06 (e) B2 430 361
United International B3 3,215 1,897
Holdings, Inc. 0% 2/15/08
(e)
United Pan-Europe
Communications NV:
0% 2/1/10 (e)(g) B2 2,015 866
10.875% 11/1/07 (g) B2 110 93
10.875% 8/1/09 B2 1,030 865
11.25% 11/1/09 (g) B2 160 135
11.25% 2/1/10 (g) B2 430 366
45,571
ENTERTAINMENT - 0.1%
AMC Entertainment, Inc. 9.5% Caa1 430 198
3/15/09
Cinemark USA, Inc. 9.625% B2 180 101
8/1/08
Hollywood Entertainment Corp. B3 198 169
10.625% 8/15/04
MGM Grand, Inc. 9.75% 6/1/07 Ba2 440 435
Premier Parks, Inc.:
0% 4/1/08 (e) B3 1,270 835
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
MEDIA & LEISURE - CONTINUED
ENTERTAINMENT - CONTINUED
Premier Parks, Inc.: -
continued
9.25% 4/1/06 B3 $ 355 $ 330
Regal Cinemas, Inc.:
8.875% 12/15/10 Caa2 250 90
9.5% 6/1/08 Caa2 1,560 624
2,782
LEISURE DURABLES & TOYS - 0.0%
Marvel Enterprises, Inc. 12% - 760 498
6/15/09
LODGING & GAMING - 0.1%
HMH Properties, Inc. 7.875% Ba2 220 195
8/1/05
KSL Recreation Group, Inc. B2 730 683
10.25% 5/1/07
Signature Resorts, Inc. 9.25% Caa3 900 279
5/15/06
1,157
PUBLISHING - 0.1%
News America, Inc.:
7.125% 4/8/28 Baa3 700 551
7.3% 4/30/28 Baa3 1,330 1,071
Time Warner Entertainment Co. Baa2 750 729
LP 8.375% 3/15/23
2,351
RESTAURANTS - 0.0%
AFC Enterprises, Inc. 10.25% B3 690 649
5/15/07
NE Restaurant, Inc. 10.75% B3 230 176
7/15/08
825
TOTAL MEDIA & LEISURE 53,184
NONDURABLES - 0.3%
BEVERAGES - 0.1%
Seagram JE & Sons, Inc.:
6.625% 12/15/05 Baa3 795 729
6.8% 12/15/08 Baa3 2,310 2,045
2,774
FOODS - 0.1%
ConAgra, Inc. 7.125% 10/1/26 Baa1 3,600 3,418
HOUSEHOLD PRODUCTS - 0.0%
AKI Holding Corp. 0% 7/1/09 Caa1 180 83
(e)
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
NONDURABLES - CONTINUED
TOBACCO - 0.1%
RJ Reynolds Tobacco Holdings, Baa2 $ 2,000 $ 1,820
Inc. 7.375% 5/15/03
TOTAL NONDURABLES 8,095
RETAIL & WHOLESALE - 0.6%
APPAREL STORES - 0.0%
Mothers Work, Inc. 12.625% B3 500 463
8/1/05
Specialty Retailers, Inc.:
8.5% 7/15/05 Caa3 1,400 56
9% 7/15/07 Ca 760 1
520
DRUG STORES - 0.1%
Rite Aid Corp.:
6.5% 12/15/05 (g) Caa1 2,135 918
7.125% 1/15/07 Caa1 940 414
1,332
GENERAL MERCHANDISE STORES -
0.3%
Federated Department Stores,
Inc.:
6.79% 7/15/27 Baa1 7,000 6,659
8.5% 6/15/03 Baa1 1,700 1,722
8,381
GROCERY STORES - 0.1%
Jitney-Jungle Stores of
America, Inc.:
10.375% 9/15/07 (d) C 360 4
12% 3/1/06 (d) Caa3 230 35
Kroger Co. 6% 7/1/00 Baa3 2,660 2,659
Pathmark Stores, Inc. 9.625% Caa3 280 196
5/1/03 (d)
2,894
RETAIL & WHOLESALE,
MISCELLANEOUS - 0.1%
Lowe's Companies, Inc. 8.25% A2 1,500 1,496
6/1/10
TOTAL RETAIL & WHOLESALE 14,623
SERVICES - 0.1%
LEASING & RENTAL - 0.0%
Rent-A-Center, Inc. 11% B2 470 456
8/15/08
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
SERVICES - CONTINUED
PRINTING - 0.1%
Sullivan Graphics, Inc. Caa1 $ 1,810 $ 1,810
12.75% 8/1/05
World Color Press, Inc. 7.75% Baa3 360 319
2/15/09
2,129
SERVICES - 0.0%
AP Holdings, Inc. 0% 3/15/08 Caa2 130 13
(e)
Apcoa, Inc. 9.25% 3/15/08 Caa1 1,030 340
Medaphis Corp. 9.5% 2/15/05 Caa1 1,110 844
1,197
TOTAL SERVICES 3,782
TECHNOLOGY - 1.1%
COMPUTER SERVICES & SOFTWARE
- 0.3%
Amazon.com, Inc. 0% 5/1/08 (e) Caa1 505 288
Colo.com 13.875% 3/15/10 unit - 690 687
(g)
Concentric Network Corp. B- 480 492
12.75% 12/15/07
Covad Communications Group,
Inc.:
0% 3/15/08 (e) B3 1,552 947
12% 2/15/10 (g) B3 1,125 1,035
12.5% 2/15/09 B3 410 385
Exodus Communications, Inc. B- 2,185 2,152
10.75% 12/15/09
PSINet, Inc.:
10% 2/15/05 B3 560 493
10.5% 12/1/06 B3 440 383
11% 8/1/09 B3 340 296
11.5% 11/1/08 B3 250 221
Verio, Inc. 10.625% 11/15/09 B3 430 473
(g)
7,852
COMPUTERS & OFFICE EQUIPMENT
- 0.6%
Comdisco, Inc.:
5.95% 4/30/02 Baa1 2,500 2,385
6.375% 11/30/01 Baa1 4,500 4,361
7.25% 9/1/02 Baa1 9,000 8,751
Dictaphone Corp. 11.75% 8/1/05 Caa1 495 507
Globix Corp. 12.5% 2/1/10 - 1,070 899
16,903
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
TECHNOLOGY - CONTINUED
ELECTRONIC INSTRUMENTS - 0.1%
Telecommunications Techniques B3 $ 1,570 $ 1,429
Co. LLC 9.75% 5/15/08
ELECTRONICS - 0.1%
ChipPAC International Ltd. B3 240 250
12.75% 8/1/09
Fairchild Semiconductor Corp. B3 440 436
10.375% 10/1/07
Hadco Corp. 9.5% 6/15/08 B2 760 761
Micron Technology, Inc. 6.5% B3 1,000 820
9/30/05 (k)
SCG Holding B2 150 158
Corp./Semiconductor
Components Industries LLC
12% 8/1/09
2,425
TOTAL TECHNOLOGY 28,609
TRANSPORTATION - 0.6%
AIR TRANSPORTATION - 0.1%
Atlas Air, Inc.:
8.77% 1/2/11 Ba2 756 716
10.75% 8/1/05 B2 160 161
Continental Airlines, Inc.
pass thru trust certificates:
7.434% 3/15/06 Baa1 640 609
7.73% 9/15/12 Baa1 260 243
Delta Air Lines, Inc. Baa1 648 610
equipment trust certificate
8.54% 1/2/07
2,339
RAILROADS - 0.5%
Burlington Northern Santa Fe
Corp.:
6.875% 12/1/27 Baa2 5,000 4,182
7.29% 6/1/36 Baa2 4,360 4,048
Norfolk Southern Corp. 7.05% Baa1 5,800 5,576
5/1/37
13,806
TOTAL TRANSPORTATION 16,145
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
UTILITIES - 2.8%
CELLULAR - 0.9%
Cable & Wireless A2 $ 7,370 $ 7,267
Communications PLC 6.375%
3/6/03
Cellnet Data Systems, Inc. 0% - 2,530 202
10/1/07 (e)
McCaw International Ltd. 0% Caa1 4,460 3,144
4/15/07 (e)
Metrocall, Inc.:
10.375% 10/1/07 B3 775 523
11% 9/15/08 B3 250 170
Millicom International Caa1 4,270 3,565
Cellular SA 0% 6/1/06 (e)
Nextel Communications, Inc. B1 1,940 1,819
9.375% 11/15/09
Nextel International, Inc. 0% Caa1 1,480 895
4/15/08 (e)
Orbital Imaging Corp.:
11.625% 3/1/05 CCC+ 170 77
11.625% 3/1/05 CCC+ 250 113
Orion Network Systems, Inc. B2 1,270 508
0% 1/15/07 (e)
PageMart Nationwide, Inc. 15% B3 1,500 1,418
2/1/05
Telesystem International
Wireless, Inc.:
0% 6/30/07 (e) Caa1 1,410 917
0% 11/1/07 (e) Caa1 1,290 722
Vodafone AirTouch PLC 7.75% A2 2,740 2,624
2/15/10 (g)
23,964
ELECTRIC UTILITY - 0.6%
Avon Energy Partners Holdings Baa2 3,500 3,115
6.46% 3/4/08 (g)
DR Investments UK PLC yankee A2 5,000 4,924
7.1% 5/15/02 (g)
Illinois Power Co. 7.5% Baa1 1,260 1,190
6/15/09
Israel Electric Corp. Ltd. A3 5,790 4,901
7.75% 12/15/27 (g)
Niagara Mohawk Power Corp. Baa3 650 659
8.875% 5/15/07
Texas Utilities Co. 6.375% Baa3 1,970 1,717
1/1/08
16,506
GAS - 0.1%
CMS Panhandle Holding Co.:
6.125% 3/15/04 Baa3 1,550 1,443
7% 7/15/29 Baa3 1,150 964
2,407
TELEPHONE SERVICES - 1.2%
Allegiance Telecom, Inc. 0% B3 659 465
2/15/08 (e)
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
UTILITIES - CONTINUED
TELEPHONE SERVICES - CONTINUED
FirstWorld Communications, - $ 1,365 $ 618
Inc. 0% 4/15/08 (e)
Flag Telecom Holdings Ltd. B2 220 202
11.625% 3/30/10 (g)
Hyperion Telecommunications,
Inc.:
0% 4/15/03 (e) B3 135 122
12% 11/1/07 Caa1 260 254
ICG Holdings, Inc.:
0% 9/15/05 (e) B3 1,320 1,247
0% 5/1/06 (e) B3 470 381
ICG Services, Inc.:
0% 2/15/08 (e) B3 2,730 1,365
0% 5/1/08 (e) B3 190 91
Intermedia Communications, B2 555 408
Inc. 0% 7/15/07 (e)
KMC Telecom Holdings, Inc.:
0% 2/15/08 (e) Caa2 1,060 482
13.5% 5/15/09 Caa2 490 421
Logix Communications - 590 189
Enterprises, Inc. 12.25%
6/15/08
Metromedia Fiber Network, B2 920 865
Inc. 10% 11/15/08
NEXTLINK Communications, Inc.:
0% 12/1/09 (e)(g) B2 825 439
10.75% 11/15/08 B3 40 38
10.75% 6/1/09 B2 780 749
Pathnet, Inc. 12.25% 4/15/08 - 1,390 806
Rhythms NetConnections, Inc.:
0% 5/15/08 (e) B3 1,415 637
12.75% 4/15/09 B3 500 395
14% 2/15/10 (g) B3 425 344
RSL Communications Ltd./RSL B2 425 327
Communications PLC 12.25%
11/15/06
RSL Communications PLC 9.875% B2 515 327
11/15/09
Telecomunicaciones de Puerto Baa2 1,985 1,813
Rico, Inc. 6.65% 5/15/06
Teleglobe Canada, Inc.:
7.2% 7/20/09 Baa1 3,863 3,642
7.7% 7/20/29 Baa1 3,233 3,039
Teligent, Inc. 11.5% 12/1/07 Caa1 100 75
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
NONCONVERTIBLE BONDS -
CONTINUED
UTILITIES - CONTINUED
TELEPHONE SERVICES - CONTINUED
WinStar Communications, Inc.:
0% 4/15/10 (e)(g) B3 $ 2,865 $ 1,225
12.5% 4/15/08 (g) B3 1,295 1,208
12.75% 4/15/10 (g) B3 1,981 1,827
WorldCom, Inc. 8.875% 1/15/06 A3 5,667 5,873
Worldwide Fiber, Inc. 12% B3 835 777
8/1/09
30,651
TOTAL UTILITIES 73,528
TOTAL NONCONVERTIBLE BONDS 359,681
TOTAL CORPORATE BONDS 399,550
(Cost $440,183)
U.S. GOVERNMENT AND
GOVERNMENT AGENCY
OBLIGATIONS - 9.7%
U.S. GOVERNMENT AGENCY
OBLIGATIONS - 2.2%
Fannie Mae:
6.5% 4/29/09 Aaa 15,800 14,509
7.125% 2/15/05 Aaa 4,825 4,770
7.25% 5/15/30 Aaa 6,100 6,041
Farm Credit Systems Financial Aaa 3,400 3,576
Assistance Corp. 9.375%
7/21/03
Federal Agricultural Mortgage Aaa 1,720 1,698
Corp. 7.01% 2/10/04
Freddie Mac:
5.75% 3/15/09 Aaa 4,000 3,543
6.25% 7/15/04 Aaa 12,080 11,576
6.875% 1/15/05 Aaa 3,675 3,596
Government Trust Certificates
(assets of Trust guaranteed
by U.S. Government through
Defense Security Assistance
Agency):
Class 1-C, 9.25% 11/15/01 Aaa 705 718
Class 2-E, 9.4% 5/15/02 Aaa 535 542
Guaranteed Export Trust
Certificates (assets of
Trust guaranteed by U.S.
Government through
Export-Import Bank):
Series 1993-C, 5.2% 10/15/04 Aaa 255 243
U.S. GOVERNMENT AND
GOVERNMENT AGENCY
OBLIGATIONS - CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
U.S. GOVERNMENT AGENCY
OBLIGATIONS - CONTINUED
Guaranteed Export Trust
Certificates (assets of
Trust guaranteed by U.S.
Government through
Export-Import Bank): -
continued
Series 1993-D, 5.23% 5/15/05 Aaa $ 460 $ 434
Series 1994-A, 7.12% 4/15/06 Aaa 502 500
Guaranteed Trade Trust Aaa 412 411
Certificates (assets of
Trust guaranteed by U.S.
Government through
Export-Import Bank) Series
1994-B, 7.5% 1/26/06
Overseas Private Investment
Corp. U.S. Government
guaranteed participation
certificate:
Series 1994-195, 6.08% Aaa 1,290 1,260
8/15/04 (callable)
Series 1996-A1, 6.726% - 4,565 4,470
9/15/10 (callable)
TOTAL U.S. GOVERNMENT AGENCY 57,887
OBLIGATIONS
U.S. TREASURY OBLIGATIONS -
7.5%
U.S. Treasury Bonds:
8% 11/15/21 Aaa 12,090 14,361
8.75% 5/15/17 Aaa 9,200 11,384
8.875% 8/15/17 Aaa 25,170 31,521
9.875% 11/15/15 Aaa 16,585 22,089
14% 11/15/11 Aaa 2,695 3,710
U.S. Treasury Notes:
5.5% 2/15/08 Aaa 12,755 12,016
5.875% 11/15/04 Aaa 23,800 23,138
6.5% 5/31/02 Aaa 14,175 14,109
6.625% 6/30/01 Aaa 8,100 8,087
7% 7/15/06 Aaa 39,170 40,002
U.S. Treasury Notes - coupon Aaa 28,470 13,676
STRIPS 0% 11/15/11
TOTAL U.S. TREASURY 194,093
OBLIGATIONS
TOTAL U.S. GOVERNMENT AND 251,980
GOVERNMENT AGENCY OBLIGATIONS
(Cost $256,078)
U.S. GOVERNMENT AGENCY -
MORTGAGE SECURITIES - 11.8%
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
FANNIE MAE - 9.9%
5.5% 2/1/11 to 4/1/11 Aaa $ 12,464 $ 11,399
6% 6/1/11 to 1/1/29 Aaa 32,242 29,188
6.5% 2/1/24 to 11/1/29 Aaa 125,222 116,195
6.5% 6/1/30 (j) Aaa 14,000 12,959
7% 12/1/23 to 5/1/30 Aaa 14,686 13,953
7.5% 2/1/15 to 3/1/30 Aaa 47,400 46,155
8% 8/1/26 to 4/1/30 Aaa 26,003 25,803
8% 6/1/30 Aaa 1,100 1,091
TOTAL FANNIE MAE 256,743
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION - 1.9%
6.5% 5/15/28 to 3/15/29 Aaa 14,327 13,402
7% 12/15/25 to 7/15/28 Aaa 2,133 2,047
7.5% 2/15/23 to 12/15/28 Aaa 29,200 28,699
8% 11/15/21 to 12/15/26 Aaa 6,717 6,738
TOTAL GOVERNMENT NATIONAL 50,886
MORTGAGE ASSOCIATION
TOTAL U.S. GOVERNMENT AGENCY 307,629
- MORTGAGE SECURITIES
(Cost $319,288)
ASSET-BACKED SECURITIES - 0.6%
Airplanes pass through trust Ba2 642 482
10.875% 3/15/19
American Express Credit A1 1,600 1,519
Account Master Trust 6.1%
12/15/06
Chase Manhattan Grantor Trust:
6.61% 9/15/02 Aaa 0 0
6.76% 9/15/02 A3 182 180
Chevy Chase Auto Receivables Aaa 205 203
Trust 6.6% 12/15/02
Discover Card Master Trust I A2 2,000 1,923
5.85% 11/16/04
Ford Credit Auto Owner Trust:
6.2% 12/15/02 Baa2 1,970 1,932
6.4% 12/15/02 Baa2 1,090 1,068
7.03% 11/15/03 Aaa 611 607
Key Auto Finance Trust:
6.3% 10/15/03 A2 899 893
6.65% 10/15/03 Baa3 264 263
ASSET-BACKED SECURITIES -
CONTINUED
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
Premier Auto Trust 5.59% Aaa $ 5,000 $ 4,802
2/9/04
Sears Credit Account Master Aaa 1,550 1,520
Trust II 7% 7/15/08
TOTAL ASSET-BACKED SECURITIES 15,392
(Cost $15,990)
COMMERCIAL MORTGAGE
SECURITIES - 0.9%
Berkeley Federal Bank & Trust - 1,836 1,252
FSB Series 1994-1 Class B,
7.5003% 8/1/24 (g)(h)
CS First Boston Mortgage
Securities Corp.:
Series 1997-C2 Class D, 7.27% Baa2 3,070 2,777
1/17/35
Series 1998-FL1:
Class D, 6.6325% 12/10/00 A2 2,400 2,390
(g)(h)
Class E, 6.9825% 1/10/13 Baa2 5,360 5,330
(g)(h)
First Chicago/Lennar Trust I
Series 1997-CHL1:
Class D, 8.1256% 4/13/39 (h) - 700 568
Class E, 8.1256% 4/1/39 (h) - 650 468
General Motors Acceptance Ba3 500 395
Corp. Commercial Mortgage
Securities, Inc. Series
1996-C1 Class F, 7.86%
10/15/28 (g)
GS Mortgage Securities Corp. Baa3 2,600 2,230
II Series 1998-GLII Class E,
7.1905% 4/13/31 (g)(h)
Morgan Stanley Capital I, - 725 720
Inc. Series 1996-MBL1 Class
E, 8.3885% 5/25/21 (g)(h)
Penn Mutual Life Insurance - 1,250 795
Co. (The)/Penn Insurance &
Annuity Co. Series 1996-PML
Class K, 7.9% 11/15/26 (g)
Resolution Trust Corp. Series Baa3 200 162
1991-M2 Class A3, 7.4076%
9/25/20 (h)
Structured Asset Securities BB 1,000 914
Corp. Series 1995-C1 Class
E, 7.375% 9/25/24 (g)
Thirteen Affiliates of Aaa 4,500 4,164
General Growth Properties,
Inc. sequential pay Series 1
Class A2, 6.602% 12/15/10 (g)
Wells Fargo Capital Markets Aaa 0 0
Apartment Financing Trust
Series APT Class 1, 6.56%
12/29/05 (g)
TOTAL COMMERCIAL MORTGAGE 22,165
SECURITIES
(Cost $22,941)
FOREIGN GOVERNMENT AND
GOVERNMENT AGENCY
OBLIGATIONS (I) - 0.5%
MOODY'S RATINGS (UNAUDITED) (B) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S)
Korean Republic yankee:
8.75% 4/15/03 Baa2 $ 855 $ 864
8.875% 4/15/08 Baa2 1,340 1,361
Quebec Province yankee 6.86% A2 8,000 7,639
4/15/26 (f)
United Mexican States 9.875% Baa3 2,000 1,984
2/1/10
TOTAL FOREIGN GOVERNMENT AND 11,848
GOVERNMENT AGENCY OBLIGATIONS
(Cost $12,156)
SUPRANATIONAL OBLIGATIONS -
0.1%
Inter-American Development Aaa 4,000 3,730
Bank yankee 6.29% 7/16/27
(Cost $3,975)
CASH EQUIVALENTS - 4.4%
SHARES
Central Cash Collateral Fund, 4,780,000 4,780
6.54% (c)
Taxable Central Cash Fund, 110,312,930 110,313
6.37% (c)
TOTAL CASH EQUIVALENTS 115,093
(Cost $115,093)
TOTAL INVESTMENT PORTFOLIO - 2,622,702
101.0%
(Cost $2,342,684)
NET OTHER ASSETS - (1.0)% (25,297)
NET ASSETS - 100% $ 2,597,405
</TABLE>
SECURITY TYPE ABBREVIATIONS
PIES - Premium Income Equity
Securities
QUIPS - Quarterly Income Preferred
Securities
LEGEND
(a) Non-income producing
(b) S&P credit ratings are used in the absence of a rating by Moody's
Investors Service, Inc.
(c) The rate quoted is the annualized seven-day yield of the fund at
period end.
(d) Non-income producing - issuer filed for protection under the
Federal Bankruptcy Code or is in default of interest payment.
(e) Debt obligation initially issued in zero coupon form which
converts to coupon form at a specified rate and date. The rate shown
is the rate at period end.
(f) Debt obligation initially issued at one coupon which converts to a
higher coupon at a specified date. The rate shown is the rate at
period end.
(g) 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 $77,325,000 or 3.0% of net assets.
(h) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(i) For foreign government obligations not individually rated by S&P
or Moody's, the ratings listed have been assigned by FMR, the fund's
investment adviser, based principally on S&P and Moody's ratings of
the sovereign credit of the issuing government.
(j) Security purchased on a delayed delivery or when-issued basis.
(k) Restricted securities - Investment in securities not registered
under the Securities Act of 1933.
Additional information on each holding is as follows:
SECURITY ACQUISITION DATE ACQUISITION COST (000S)
Micron Technology, Inc. 6.5% 3/3/99 $ 774
9/30/05
Mothers Work, Inc. 6/18/98 $ 1
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total
value of investments in securities, is as follows (ratings are
unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 25.9% AAA, AA, A 23.3%
Baa 6.3% BBB 6.3%
Ba 0.3% BB 0.6%
B 3.5% B 4.2%
Caa 0.9% CCC 0.5%
Ca, C 0.0% CC, C 0.0%
D 0.0%
The percentage not rated by Moody's or S&P amounted to 1.2%. FMR has
determined that unrated debt securities that are lower quality account
for 1.1% of the total value of investment in securities.
INCOME TAX INFORMATION
At May 31, 2000, the aggregate cost of investment securities for
income tax purposes was $2,350,981,000. Net unrealized appreciation
aggregated $271,721,000, of which $368,365,000 related to appreciated
investment securities and $96,644,000 related to depreciated
investment securities.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AMOUNTS IN THOUSANDS (EXCEPT
PER-SHARE AMOUNTS)
MAY 31, 2000
ASSETS
Investment in securities, at $ 2,622,702
value (cost $2,342,684) -
See accompanying schedule
Commitment to sell securities $ (13,099)
on a delayed delivery basis
Receivable for securities 13,134 35
sold on a delayed delivery
basis
Receivable for investments 32,362
sold, regular delivery
Cash 104
Receivable for fund shares 1,835
sold
Dividends receivable 1,513
Interest receivable 12,771
Other receivables 401
TOTAL ASSETS 2,671,723
LIABILITIES
Payable for investments $ 46,048
purchased Regular delivery
Delayed delivery 13,079
Payable for fund shares 7,807
redeemed
Accrued management fee 927
Distribution fees payable 1,122
Other payables and accrued 555
expenses
Collateral on securities 4,780
loaned, at value
TOTAL LIABILITIES 74,318
NET ASSETS $ 2,597,405
Net Assets consist of:
Paid in capital $ 2,223,240
Undistributed net investment 16,130
income
Accumulated undistributed net 77,995
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 280,040
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS $ 2,597,405
STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
AMOUNTS IN THOUSANDS (EXCEPT
PER-SHARE AMOUNTS)
MAY 31, 2000
CALCULATION OF MAXIMUM $17.34
OFFERING PRICE CLASS A: NET
ASSET VALUE and redemption
price per share ($61,885
(divided by) 3,568 shares)
Maximum offering price per $18.40
share (100/94.25 of $17.34)
CLASS T: NET ASSET VALUE and $17.37
redemption price per share
($2,309,768 (divided by)
132,942 shares)
Maximum offering price per $18.00
share (100/96.50 of $17.37)
CLASS B: NET ASSET VALUE and $17.26
offering price per share
($114,239 (divided by)
6,620.6 shares) A
CLASS C: NET ASSET VALUE and $17.25
offering price per share
($55,830 (divided by) 3,236
shares) A
INSTITUTIONAL CLASS: NET $17.48
ASSET VALUE, offering price
and redemption price per
share ($55,683 (divided by)
3,186 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
SIX MONTHS ENDED MAY 31, 2000
INVESTMENT INCOME $ 12,777
Dividends
Interest 41,032
Security lending 9
TOTAL INCOME 53,818
EXPENSES
Management fee $ 6,087
Transfer agent fees 2,849
Distribution fees 7,358
Accounting and security 309
lending fees
Non-interested trustees' 9
compensation
Custodian fees and expenses 45
Registration fees 65
Audit 20
Legal 10
Miscellaneous 4
Total expenses before 16,756
reductions
Expense reductions (237) 16,519
NET INVESTMENT INCOME 37,299
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 85,275
Foreign currency transactions (61) 85,214
Change in net unrealized
appreciation (depreciation)
on:
Investment securities (164,682)
Assets and liabilities in (13)
foreign currencies
Delayed delivery commitments 35 (164,660)
NET GAIN (LOSS) (79,446)
NET INCREASE (DECREASE) IN $ (42,147)
NET ASSETS RESULTING FROM
OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
AMOUNTS IN THOUSANDS SIX MONTHS ENDED MAY 31, 2000 YEAR ENDED NOVEMBER 30, 1999
INCREASE (DECREASE) IN NET
ASSETS
Operations Net investment $ 37,299 $ 78,121
income
Net realized gain (loss) 85,214 150,661
Change in net unrealized (164,660) (63,666)
appreciation (depreciation)
NET INCREASE (DECREASE) IN (42,147) 165,116
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (33,707) (79,816)
From net investment income
From net realized gain (133,986) (283,307)
TOTAL DISTRIBUTIONS (167,693) (363,123)
Share transactions - net (297,236) 150,767
increase (decrease)
TOTAL INCREASE (DECREASE) (507,076) (47,240)
IN NET ASSETS
NET ASSETS
Beginning of period 3,104,481 3,151,721
End of period (including $ 2,597,405 $ 3,104,481
undistributed net investment
income of $16,130 and
$12,538, respectively)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS A
SIX MONTHS ENDED MAY 31, YEARS ENDED NOVEMBER 30, YEARS ENDED OCTOBER 31,
2000 1999 1998 H 1998 1997
SELECTED PER-SHARE DATA
Net asset value, beginning $ 18.64 $ 19.91 $ 19.25 $ 18.75 $ 16.04
of period
Income from Investment
Operations
Net investment income D .25 .50 .05 .53 .48
Net realized and unrealized (.51) .53 .61 1.80 2.83
gain (loss)
Total from investment (.26) 1.03 .66 2.33 3.31
operations
Less Distributions
From net investment income (.23) (.52) - (.57) (.49)
From net realized gain (.81) (1.78) - (1.26) (.11)
Total distributions (1.04) (2.30) - (1.83) (.60)
Net asset value, end of period $ 17.34 $ 18.64 $ 19.91 $ 19.25 $ 18.75
TOTAL RETURN B, C (1.51)% 5.65% 3.43% 13.04% 20.99%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 62 $ 59 $ 17 $ 16 $ 8
(in millions)
Ratio of expenses to average .92% A .93% 1.02% A 1.05% 1.41% F
net assets
Ratio of expenses to average .90% A, G .91% G 1.02% A 1.02% G 1.40% G
net assets after expense
reductions
Ratio of net investment 2.89% A 2.68% 3.13% A 2.76% 2.68%
income to average net
assets
Portfolio turnover 134% A 93% 73% A 85% 70%
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
FINANCIAL HIGHLIGHTS - CLASS A
YEARS ENDED OCTOBER 31,
1996 E
SELECTED PER-SHARE DATA
Net asset value, beginning $ 15.22
of period
Income from Investment
Operations
Net investment income D .08
Net realized and unrealized .88
gain (loss)
Total from investment .96
operations
Less Distributions
From net investment income (.14)
From net realized gain -
Total distributions (.14)
Net asset value, end of period $ 16.04
TOTAL RETURN B, C 6.34%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 1
(in millions)
Ratio of expenses to average 1.50% A, F
net assets
Ratio of expenses to average 1.49% A, G
net assets after expense
reductions
Ratio of net invest- ment 3.07% A
income to average net
assets
Portfolio turnover 223%
</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 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.
H ONE MONTH ENDED NOVEMBER 30
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS T
SIX MONTHS ENDED MAY 31, YEARS ENDED NOVEMBER 30, YEARS ENDED OCTOBER 31,
2000 1999 1998 F 1998 1997
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 18.67 $ 19.96 $ 19.30 $ 18.79 $ 16.07
period
Income from Investment
Operations
Net investment income .23 D .46 D .05 D .51 D .53 D
Net realized and unrealized (.51) .51 .61 1.80 2.84
gain (loss)
Total from investment (.28) .97 .66 2.31 3.37
operations
Less Distributions
From net investment income (.21) (.48) - (.54) (.54)
From net realized gain (.81) (1.78) - (1.26) (.11)
Total distributions (1.02) (2.26) - (1.80) (.65)
Net asset value, end of period $ 17.37 $ 18.67 $ 19.96 $ 19.30 $ 18.79
TOTAL RETURN B, C (1.63)% 5.30% 3.42% 12.90% 21.36%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 2,310 $ 2,802 $ 2,993 $ 2,903 $ 2,901
millions)
Ratio of expenses to average 1.16% A 1.16% 1.22% A 1.16% 1.17%
net assets
Ratio of expenses to average 1.15% A, E 1.14% E 1.22% A 1.15% E 1.17%
net assets after expense
reductions
Ratio of net investment 2.64% A 2.45% 2.92% A 2.68% 2.98%
income to average net assets
Portfolio turnover 134% A 93% 73% A 85% 70%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS T
YEARS ENDED OCTOBER 31,
1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 15.30 $ 14.67
period
Income from Investment
Operations
Net investment income .51 D .59
Net realized and unrealized .88 .54
gain (loss)
Total from investment 1.39 1.13
operations
Less Distributions
From net investment income (.59) (.50)
From net realized gain (.03) -
Total distributions (.62) (.50)
Net asset value, end of period $ 16.07 $ 15.30
TOTAL RETURN B, C 9.30% 7.85%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 2,993 $ 3,441
millions)
Ratio of expenses to average 1.26% 1.47%
net assets
Ratio of expenses to average 1.25% E 1.46% E
net assets after expense
reductions
Ratio of net investment 3.32% 3.99%
income to average net assets
Portfolio turnover 223% 297%
</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 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.
F ONE MONTH ENDED NOVEMBER 30
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL
STATEMENTS.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS B
SIX MONTHS ENDED MAY 31, YEARS ENDED NOVEMBER 30, YEARS ENDED OCTOBER 31,
2000 1999 1998 G 1998
SELECTED PER-SHARE DATA
Net asset value, beginning $ 18.54 $ 19.86 $ 19.21 $ 18.71
of period
Income from Investment
Operations
Net investment income D .18 .36 .04 .38
Net realized and unrealized (.50) .50 .61 1.81
gain (loss)
Total from investment (.32) .86 .65 2.19
operations
Less Distributions
From net investment income (.15) (.40) - (.43)
From net realized gain (.81) (1.78) - (1.26)
Total distributions (.96) (2.18) - (1.69)
Net asset value, end of $ 17.26 $ 18.54 $ 19.86 $ 19.21
period
TOTAL RETURN B, C (1.86)% 4.71% 3.38% 12.25%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 114 $ 124 $ 57 $ 51
millions)
Ratio of expenses to average 1.71% A 1.69% 1.80% A 1.74%
net assets
Ratio of expenses to average 1.70% A, F 1.68% F 1.80% A 1.73% F
net assets after expense
reductions
Ratio of net investment 2.10% A 1.91% 2.35% A 2.02%
income to average net assets
Portfolio turnover 134% A 93% 73% A 85%
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
FINANCIAL HIGHLIGHTS - CLASS B
YEARS ENDED OCTOBER 31,
1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning $ 16.36
of period
Income from Investment
Operations
Net investment income D .29
Net realized and unrealized 2.38
gain (loss)
Total from investment 2.67
operations
Less Distributions
From net investment income (.32)
From net realized gain -
Total distributions (.32)
Net asset value, end of $ 18.71
period
TOTAL RETURN B, C 16.40%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 16
millions)
Ratio of expenses to average 2.12% A
net assets
Ratio of expenses to average 2.11% A, F
net assets after expense
reductions
Ratio of net investment 1.88% A
income to average net assets
Portfolio turnover 70%
</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 DECEMBER 31, 1996 (COMMENCEMENT OF SALE OF CLASS B
SHARES) TO OCTOBER 31, 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.
G ONE MONTH ENDED NOVEMBER 30
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS C
SIX MONTHS ENDED MAY 31, YEARS ENDED NOVEMBER 30, YEAR ENDED OCTOBER 31,
2000 1999 1998 H 1998 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 18.55 $ 19.88 $ 19.22 $ 19.05
period
Income from Investment
Operations
Net investment income D .18 .36 .04 .36
Net realized and unrealized (.51) .48 .62 1.56
gain (loss)
Total from investment (.33) .84 .66 1.92
operations
Less Distributions
From net investment income (.16) (.39) - (.49)
From net realized gain (.81) (1.78) - (1.26)
Total distributions (.97) (2.17) - (1.75)
Net asset value, end of period $ 17.25 $ 18.55 $ 19.88 $ 19.22
TOTAL RETURN B, C (1.91)% 4.60% 3.43% 10.62%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 56 $ 53 $ 21 $ 20
(in millions)
Ratio of expenses to average 1.68% A 1.66% 1.77% A 1.80% A, F
net assets
Ratio of expenses to average 1.66% A, G 1.65% G 1.76% A, G 1.79% A, G
net assets after expense
reductions
Ratio of net investment 2.13% A 1.95% 2.37% A 1.89% A
income to average net assets
Portfolio turnover 134% A 93% 73% A 85%
</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 OCTOBER 31, 1998.
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.
H ONE MONTH ENDED NOVEMBER 30
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
SIX MONTHS ENDED MAY 31, YEARS ENDED NOVEMBER 30, YEARS ENDED OCTOBER 31,
2000 1999 1998 H 1998 1997
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 18.77 $ 20.03 $ 19.35 $ 18.85 $ 16.11
period
Income from Investment
Operations
Net investment income .28 D .56 D .05 D .60 D .61 D
Net realized and unrealized (.51) .53 .63 1.81 2.86
gain (loss)
Total from investment (.23) 1.09 .68 2.41 3.47
operations
Less Distributions
From net investment income (.25) (.57) - (.65) (.62)
From net realized gain (.81) (1.78) - (1.26) (.11)
Total distributions (1.06) (2.35) - (1.91) (.73)
Net asset value, end of period $ 17.48 $ 18.77 $ 20.03 $ 19.35 $ 18.85
TOTAL RETURN B, C (1.34)% 5.95% 3.51% 13.45% 21.97%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 56 $ 67 $ 63 $ 61 $ 39
millions)
Ratio of expenses to average .63% A .64% .66% A .65% .69%
net assets
Ratio of expenses to average .62% A, G .63% G .66% A .63% G .69%
net assets after expense
reductions
Ratio of net investment 3.18% A 2.96% 3.48% A 3.15% 3.42%
income to average net assets
Portfolio turnover 134% A 93% 73% A 85% 70%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
YEARS ENDED OCTOBER 31,
1996 1995 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 15.40 $ 15.23
period
Income from Investment
Operations
Net investment income .54 D .25
Net realized and unrealized .87 .09
gain (loss)
Total from investment 1.41 .34
operations
Less Distributions
From net investment income (.67) (.17)
From net realized gain (.03) -
Total distributions (.70) (.17)
Net asset value, end of period $ 16.11 $ 15.40
TOTAL RETURN B, C 9.41% 2.22%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 22 $ 1
millions)
Ratio of expenses to average 1.06% .92% A, F
net assets
Ratio of expenses to average 1.03% G .91% A, G
net assets after expense
reductions
Ratio of net investment 3.54% 4.54% A
income to average net assets
Portfolio turnover 223% 297%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
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 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.
H ONE MONTH ENDED NOVEMBER 30
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL
STATEMENTS.
NOTES TO FINANCIAL STATEMENTS
For the period ended May 31, 2000
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Balanced 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. Equity securities for which quotations are readily
available are valued at the last sale price, or if no sale price, at
the closing bid price. Foreign equity securities are valued based on
quotations from the principal market in which such securities are
normally traded. If trading or events occurring in other markets after
the close of the principal market in which foreign securities are
traded, and before the close of the business of the fund, are expected
to materially affect the value of those securities, then they are
valued at their fair value taking this trading or these events into
account. Fair value is determined in good faith under consistently
applied procedures under the general supervision of the Board of
Trustees. Debt securities for which quotations are readily available
are valued by a pricing service at their market values as determined
by their most recent bid prices in the principal market (sales prices
if the principal market is an exchange) in which such securities are
normally traded. Securities (including restricted securities) for
which market quotations are not readily available are valued at their
fair value. 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.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
FOREIGN CURRENCY TRANSLATION - CONTINUED
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.
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, paydown gains/losses on certain
securities, foreign currency transactions, market discount,
non-taxable dividends 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.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
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 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, Federal Agency,
or other obligations found to be satisfactory by FMR 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.
CENTRAL CASH FUNDS. Pursuant to an Exemptive Order issued by the SEC,
the fund may invest in the Taxable Central Cash Fund and the Central
Cash Collateral Fund (the Cash Funds) managed by Fidelity Investments
Money Management, Inc. (FIMM), an affiliate of FMR. The Cash Funds are
open-end money market funds available only to investment companies and
other accounts managed by FMR and its affiliates. The Cash Funds seek
preservation of capital, liquidity, and current income. Income
distributions from the Cash Funds are declared daily and paid monthly
from net interest income. Income distributions earned by the fund are
recorded as either interest income or security lending income in the
accompanying financial statements.
2. OPERATING POLICIES - CONTINUED
DELAYED DELIVERY TRANSACTIONS. The fund may purchase or sell
securities on a delayed delivery basis. Payment and delivery may take
place after the customary settlement period for that security. The
price of the underlying securities and the date when the securities
will be delivered and paid for are fixed at the time the transaction
is negotiated. The market values of the securities purchased on a
delayed delivery basis are identified as such in the fund's schedule
of investments. The fund may receive compensation for interest forgone
in the purchase of a delayed delivery security. With respect to
purchase commitments, the fund identifies securities as segregated in
its records with a value at least equal to the amount of the
commitment. Losses may arise due to changes in the market value of the
underlying securities or if the counterparty does not perform under
the contract.
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, restricted securities (excluding 144A
issues) amounted to $821,000 or 0.0% of net assets.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $1,855,292,000 and $2,261,414,000, respectively, of which
U.S. government and government agency obligations aggregated
$443,014,000 and $411,240,000, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus a
fixed individual fund fee rate applied to the average net assets of
the fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds advised by FMR. The rates ranged from .2167% to .5200% for the
period. The annual individual fund fee rate is .15%. 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 .43% of average net
assets.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the
1940 Act, the Board of Trustees have adopted separate Distribution and
Service 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 $ 75,000 $ 0
CLASS T 6,418,000 46,000
CLASS B 595,000 447,000
CLASS C 270,000 136,000
$ 7,358,000 $ 629,000
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 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 is paid to securities
dealers, banks and other financial institutions.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
SALES LOAD - CONTINUED
For the period, sales charge amounts paid to and retained by FDC were
as follows:
PAID TO FDC RETAINED BY FDC
CLASS A $ 93,000 $ 32,000
CLASS T 277,000 73,000
CLASS B 233,000 233,000*
CLASS C 19,000 19,000*
$ 622,000 $ 357,000
* 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.
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 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 $ 61,000 .21*
CLASS T 2,537,000 .20*
CLASS B 144,000 .24*
CLASS C 56,000 .21*
INSTITUTIONAL CLASS 51,000 .17*
$ 2,849,000
* ANNUALIZED
ACCOUNTING AND SECURITY LENDING FEES. Fidelity Service Company, Inc.,
an affiliate of FMR, maintains the fund's accounting records and
administers the security lending program. The security lending fee is
based on the number and duration of lending transactions. The
accounting fee is based on the level of average net assets for the
month plus out-of-pocket expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $73,000 for the
period.
5. SECURITY LENDING.
The fund lends portfolio securities from time to time in order to earn
additional income. The fund receives collateral in the form of U.S.
Treasury obligations, letters of credit, and/or cash against the
loaned securities, and maintains collateral in an amount not less than
100% of the market value of the loaned securities during the period of
the loan. The market value of the loaned securities is determined at
the close of business of the fund and any additional required
collateral is delivered to the fund on the next business day. If the
borrower defaults on its obligation to return the securities loaned
because of insolvency or other reasons, the fund could experience
delays and costs in recovering the securities loaned or in gaining
access to the collateral. At period end, the value of the securities
loaned amounted to $4,705,000. The fund received cash collateral of
$4,780,000 which was invested in cash equivalents.
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. The interest
rate on the borrowings is the bank's base rate, as revised from time
to time. The average daily loan balance during the period for which
the loan was outstanding amounted to $2,157,000. The weighted average
interest rate was 6.60%. At period end there were no bank borrowing
outstanding.
7. EXPENSE REDUCTIONS.
FMR has directed certain portfolio trades to brokers who paid a
portion of the fund's expenses. For the period, the fund's expenses
were reduced by $229,000 under this arrangement.
In addition, through arrangements with the fund's custodian and each
class' transfer agent, 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 $7,000 under the custodian
arrangement, and each applicable class' expenses were reduced as
follows under the transfer agent arrangements:
TRANSFER AGENT CREDITS
CLASS A $ 1,000
8. BENEFICIAL INTEREST.
At the end of the period, one shareholder was record owner of
approximately 12% of the total outstanding shares of the fund.
9. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS SIX MONTHS ENDED MAY 31, 2000 YEAR ENDED NOVEMBER 30, 1999
FROM NET INVESTMENT INCOME
Class A $ 730 $ 939
Class T 30,650 74,262
Class B 1,001 1,847
Class C 467 731
Institutional Class 859 2,037
Total $ 33,707 $ 79,816
FROM NET REALIZED GAIN
Class A $ 2,577 $ 1,512
Class T 120,792 269,024
Class B 5,431 5,204
Class C 2,339 1,905
Institutional Class 2,847 5,662
Total $ 133,986 $ 283,307
$ 167,693 $ 363,123
</TABLE>
10. SHARE TRANSACTIONS.
Transactions for each class of shares for the periods were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
AMOUNTS IN THOUSANDS SHARES DOLLARS
SIX MONTHS ENDED MAY 31, YEAR ENDED NOVEMBER 30, SIX MONTHS ENDED MAY 31,
2000 1999 2000
CLASS A Shares sold 1,194 2,611 $ 21,331
Reinvestment of distributions 175 128 3,126
Shares redeemed (988) (399) (17,410)
Net increase (decrease) 381 2,340 $ 7,047
CLASS T Shares sold 12,088 28,944 $ 215,375
Reinvestment of distributions 7,974 17,793 142,917
Shares redeemed (37,161) (46,676) (661,809)
Net increase (decrease) (17,099) 61 $ (303,517)
CLASS B Shares sold 1,045 4,784 $ 18,478
Reinvestment of distributions 326 349 5,798
Shares redeemed (1,434) (1,332) (25,306)
Net increase (decrease) (63) 3,801 $ (1,030)
CLASS C Shares sold 1,096 2,102 $ 19,513
Reinvestment of distributions 123 109 2,184
Shares redeemed (815) (441) (14,345)
Net increase (decrease) 404 1,770 $ 7,352
INSTITUTIONAL CLASS Shares 359 1,124 $ 6,405
sold
Reinvestment of distributions 202 406 3,634
Shares redeemed (950) (1,107) (17,127)
Net increase (decrease) (389) 423 $ (7,088)
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
DOLLARS
AMOUNTS IN THOUSANDS
YEAR ENDED NOVEMBER 30,
1999
CLASS A Shares sold $ 49,162
Reinvestment of distributions 2,356
Shares redeemed (7,485)
Net increase (decrease) $ 44,033
CLASS T Shares sold $ 546,131
Reinvestment of distributions 325,900
Shares redeemed (877,940)
Net increase (decrease) $ (5,909)
CLASS B Shares sold $ 89,864
Reinvestment of distributions 6,381
Shares redeemed (24,790)
Net increase (decrease) $ 71,455
CLASS C Shares sold $ 39,467
Reinvestment of distributions 2,008
Shares redeemed (8,264)
Net increase (decrease) $ 33,211
INSTITUTIONAL CLASS Shares $ 21,324
sold
Reinvestment of distributions 7,458
Shares redeemed (20,805)
Net increase (decrease) $ 7,977
</TABLE>
INDEPENDENT AUDITORS' REPORT
To the Trustees of Fidelity Advisor
Series I and Shareholders of
Fidelity Advisor Balanced Fund:
We have audited the accompanying statement of assets and liabilities
of Fidelity Advisor Balanced Fund, (the fund), a series of Fidelity
Advisor Series I (the Trust), including the portfolio of investments,
as of May 31, 2000, and the related statement of operations for the
six months then ended, the statement of changes in net assets for the
six months then ended and the year ended November 30, 1999, and the
financial highlights for the six months ended May 31, 2000, the year
ended November 30, 1999, the one month ended November 30, 1998, and
for each of the years in the four-year period ended October 31, 1998.
These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and financial
highlights based on our audits.
We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that
we plan and perform the audit to obtain reasonable assurance about
whether the financial statements and financial highlights are free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned
as of May 31, 2000, by correspondence with the custodian and brokers;
where replies were not received from brokers, we performed other
auditing procedures. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of Fidelity Advisor Balanced Fund as of May 31,
2000, the results of its operations for the six months then ended, the
changes in its net assets for the six months then ended and the year
ended November 30, 1999, and its financial highlights for the six
months ended May 31, 2000, the year ended November 30, 1999, the one
month ended November 30, 1998, and for each of the years in the
four-year period ended October 31, 1998, in conformity with accounting
principles generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
July 6, 2000
INVESTMENT ADVISER
Fidelity Management &
Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research
(U.K.) Inc.
Fidelity Management & Research
(Far East) Inc.
Fidelity Investments Japan Ltd.
Fidelity Investments
Money Management, Inc.
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Richard A. Spillane, Jr., Vice President
Kevin Grant, Vice President
John Avery, Vice President
Eric D. Roiter, Secretary
Robert A. Dwight, Treasurer
Maria F. Dwyer, Deputy Treasurer
John H. Costello, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
Donald J. Kirk *
Ned C. Lautenbach *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
* INDEPENDENT TRUSTEES
ADVISORY BOARD
J. Michael Cook
GENERAL DISTRIBUTOR
Fidelity Distributions 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 Telecommunications & Utilities Growth Fund
GROWTH FUNDS
Fidelity Advisor Latin America Fund
Fidelity Advisor Emerging Asia 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(registered trademark)
Growth Fund
Fidelity Advisor Small Cap Fund
Fidelity Advisor Value Strategies Fund
Fidelity Advisor Mid Cap Fund
Fidelity Advisor Dynamic Capital Appreciation Fund
Fidelity Advisor Equity Growth Fund
Fidelity Advisor Large Cap Fund
Fidelity Advisor Dividend Growth Fund
Fidelity Advisor Growth
Opportunities Fund
AIGI-SANN-0700 106024
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 High Income 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
MONEY MARKET FUNDS
Prime Fund
Treasury Fund
Tax-Exempt Fund
(2_FIDELITY_LOGOS)(registered trademark)
FIDELITY(REGISTERED TRADEMARK) ADVISOR
EQUITY GROWTH
FUND - CLASS A, CLASS T, CLASS B AND CLASS C
SEMIANNUAL REPORT
MAY 31, 2000
(2_FIDELITY_LOGOS)(registered trademark)
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 27 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 36 Notes to the financial
statements.
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 technology sell-off that began in mid-March continued to hamper
equity markets, driving the tech-heavy NASDAQ index down more than 16%
year to date through the end of May. Broader equity indexes, including
the S&P 500(registered trademark), also were down, but not as much as
more concentrated performance measures. In bond markets, Treasuries
got a boost late in the period as economic reports showed the first
signs of a slowing economy.
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 an investment in a money market fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although money market funds seek to preserve the
value of your investment at $1.00 per share, it is possible to lose
money by investing in these types of funds.
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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY(REGISTERED 6.35% 23.21% 218.68% 623.03%
TRADEMARK) ADV EQUITY GROWTH
- CL A
FIDELITY ADV EQUITY GROWTH - 0.23% 16.13% 200.35% 581.45%
CL A (INCL. 5.75% SALES
CHARGE)
Russell 3000 (registered 6.89% 24.62% 224.30% 455.28%
trademark) Growth
Growth Funds Average 7.32% 20.08% 172.00% 349.50%
</TABLE>
CUMULATIVE TOTAL RETURNS show Class A's performance in percentage
terms over a set period - in this case, six months, 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
Russell 3000 Growth Index - a market capitalization-weighted index of
growth-oriented stocks of U.S. domiciled corporations. 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 Inc. The past six
months average represents a peer group of 1,387 mutual funds. These
benchmarks include reinvested dividends and capital gains, if any, and
exclude the effect of sales charges. Lipper has created new comparison
categories that group funds according to portfolio characteristics and
capitalization, as well as by capitalization only. These averages are
listed on page 5 of this report.*
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY ADV EQUITY GROWTH - 23.21% 26.09% 21.88%
CL A
FIDELITY ADV EQUITY GROWTH - 16.13% 24.60% 21.16%
CL A (INCL. 5.75% SALES
CHARGE)
Russell 3000 Growth 24.62% 26.53% 18.70%
Growth Funds Average 20.08% 21.60% 15.77%
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 Russell 3000 Growth
00245 RS007
1990/05/31 9425.00 10000.00
1990/06/30 9506.06 10104.62
1990/07/31 9235.85 9991.10
1990/08/31 8057.73 9005.86
1990/09/30 7393.00 8500.74
1990/10/31 7484.88 8508.27
1990/11/30 8403.60 9091.64
1990/12/31 9003.47 9418.68
1991/01/31 10311.30 9921.24
1991/02/28 11240.83 10727.54
1991/03/31 12343.29 11168.45
1991/04/30 12300.06 11111.61
1991/05/31 12943.16 11609.36
1991/06/30 11867.72 11045.00
1991/07/31 12829.67 11632.48
1991/08/31 13521.42 12027.50
1991/09/30 13553.84 11839.83
1991/10/31 13591.67 12042.40
1991/11/30 13121.50 11716.55
1991/12/31 14829.40 13342.01
1992/01/31 15244.64 13095.61
1992/02/29 15323.00 13123.01
1992/03/31 14599.65 12739.97
1992/04/30 14298.26 12781.58
1992/05/31 14231.95 12868.57
1992/06/30 13761.77 12516.69
1992/07/31 14244.00 13066.85
1992/08/31 13900.41 12885.35
1992/09/30 14159.61 13047.84
1992/10/31 14901.05 13264.96
1992/11/30 15871.55 13884.28
1992/12/31 16296.36 14038.73
1993/01/31 16752.65 13900.72
1993/02/28 16315.20 13643.20
1993/03/31 16826.59 13912.02
1993/04/30 16543.17 13363.41
1993/05/31 17498.17 13854.66
1993/06/30 17565.95 13739.08
1993/07/31 17264.04 13524.54
1993/08/31 17892.50 14086.68
1993/09/30 18416.21 14029.66
1993/10/31 18638.02 14421.25
1993/11/30 18175.92 14282.56
1993/12/31 18717.04 14557.21
1994/01/31 19370.23 14898.12
1994/02/28 19208.38 14645.22
1994/03/31 18425.03 13919.90
1994/04/30 18619.25 13982.06
1994/05/31 18502.72 14146.26
1994/06/30 17693.47 13712.20
1994/07/31 18068.96 14154.31
1994/08/31 18884.68 14967.47
1994/09/30 18496.24 14789.22
1994/10/31 19098.33 15119.00
1994/11/30 18463.87 14622.96
1994/12/31 18551.34 14877.92
1995/01/31 18387.80 15132.87
1995/02/28 19094.27 15773.43
1995/03/31 19813.82 16234.89
1995/04/30 20670.74 16579.06
1995/05/31 21383.75 17122.70
1995/06/30 23012.55 17833.12
1995/07/31 24726.39 18639.77
1995/08/31 24981.51 18682.07
1995/09/30 25681.43 19492.83
1995/10/31 25550.61 19405.50
1995/11/30 26054.29 20169.86
1995/12/31 25812.18 20318.48
1996/01/31 26416.34 20912.47
1996/02/29 27004.44 21350.64
1996/03/31 27191.25 21417.07
1996/04/30 28000.76 22090.17
1996/05/31 28754.92 22900.41
1996/06/30 28388.22 22767.37
1996/07/31 26665.42 21283.69
1996/08/31 27288.12 21933.50
1996/09/30 29121.62 23482.76
1996/10/31 29260.00 23508.10
1996/11/30 30996.64 25165.23
1996/12/31 29997.01 24764.73
1997/01/31 31791.80 26392.76
1997/02/28 31059.47 26081.64
1997/03/31 29329.16 24632.02
1997/04/30 30815.36 26100.02
1997/05/31 32990.81 28148.94
1997/06/30 34347.78 29260.51
1997/07/31 36939.66 31744.24
1997/08/31 35475.00 30147.51
1997/09/30 37521.22 31725.59
1997/10/31 36063.73 30475.70
1997/11/30 37111.97 31561.60
1997/12/31 37163.78 31882.20
1998/01/31 37628.98 32702.48
1998/02/28 40493.30 35201.51
1998/03/31 41892.72 36611.58
1998/04/30 42694.73 37091.73
1998/05/31 41581.74 35886.32
1998/06/30 44192.36 37919.97
1998/07/31 45084.40 37410.41
1998/08/31 37727.19 31548.12
1998/09/30 41581.74 34030.30
1998/10/31 44486.98 36690.05
1998/11/30 47580.45 39484.99
1998/12/31 51613.58 43046.14
1999/01/31 55761.20 45529.86
1999/02/28 53013.39 43296.54
1999/03/31 55909.23 45524.73
1999/04/30 56075.77 45856.63
1999/05/31 55307.86 44557.17
1999/06/30 58869.84 47619.45
1999/07/31 58055.67 46108.20
1999/08/31 58370.24 46681.56
1999/09/30 57195.25 45827.88
1999/10/31 60507.43 49128.87
1999/11/30 64078.66 51948.39
1999/12/31 70471.04 57606.83
2000/01/31 68396.35 55060.78
2000/02/29 73284.67 58500.59
2000/03/31 76466.59 61809.09
2000/04/30 72080.15 58629.57
2000/05/31 68145.40 55528.30
IMATRL PRASUN SHR__CHT 20000531 20000622 122510 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Equity Growth Fund - Class A on May 31,
1990, and the current 5.75% sales charge was paid. As the chart shows,
by May 31, 2000, the value of the investment would have grown to
$68,145 - a 581.45% increase on the initial investment. For
comparison, look at how the Russell 3000 Growth Index did over the
same period. With dividends and capital gains, if any, reinvested, the
same $10,000 investment would have grown to $55,528 - a 455.28%
increase.
(checkmark)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.
* THE LIPPER MULTI-CAP GROWTH FUNDS AVERAGE REFLECTS THE PERFORMANCE
(EXCLUDING SALES CHARGES) OF MUTUAL FUNDS WITH SIMILAR PORTFOLIO
CHARACTERISTICS AND CAPITALIZATION. AS OF MAY 31, 2000, THE SIX MONTH,
ONE YEAR, FIVE YEAR AND 10 YEAR CUMULATIVE TOTAL RETURNS FOR THE
MULTI-CAP GROWTH FUNDS AVERAGE WERE, 13.01%, 40.45%, 214.24% AND
426.94%, RESPECTIVELY. THE ONE YEAR, FIVE YEAR AND 10 YEAR AVERAGE
ANNUAL TOTAL RETURNS FOR THE MULTI-CAP GROWTH FUNDS AVERAGE WERE,
40.45%, 25.26% AND 17.71%, RESPECTIVELY.
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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY ADV EQUITY GROWTH - 6.24% 22.96% 217.59% 620.55%
CL T
FIDELITY ADV EQUITY GROWTH - 2.52% 18.66% 206.47% 595.33%
CL T (INCL. 3.50% SALES
CHARGE)
Russell 3000 Growth 6.89% 24.62% 224.30% 455.28%
Growth Funds Average 7.32% 20.08% 172.00% 349.50%
</TABLE>
CUMULATIVE TOTAL RETURNS show Class T's performance in percentage
terms over a set period - in this case, six months, 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
Russell 3000 Growth Index - a market capitalization-weighted index of
growth-oriented stocks of U.S. domiciled corporations. 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 Inc. The past six
months average represents a peer group of 1,387 mutual funds. These
benchmarks include reinvested dividends and capital gains, if any, and
exclude the effect of sales charges. Lipper has created new comparison
categories that group funds according to portfolio characteristics and
capitalization, as well as by capitalization only. These averages are
listed on page 7 of this report.*
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY ADV EQUITY GROWTH - 22.96% 26.00% 21.83%
CL T
FIDELITY ADV EQUITY GROWTH - 18.66% 25.11% 21.40%
CL T (INCL. 3.50% SALES
CHARGE)
Russell 3000 Growth 24.62% 26.53% 18.70%
Growth Funds Average 20.08% 21.60% 15.77%
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 Russell 3000 Growth
00286 RS007
1990/05/31 9650.00 10000.00
1990/06/30 9733.00 10104.62
1990/07/31 9456.34 9991.10
1990/08/31 8250.09 9005.86
1990/09/30 7569.50 8500.74
1990/10/31 7663.56 8508.27
1990/11/30 8604.21 9091.64
1990/12/31 9218.41 9418.68
1991/01/31 10557.45 9921.24
1991/02/28 11509.17 10727.54
1991/03/31 12637.96 11168.45
1991/04/30 12593.69 11111.61
1991/05/31 13252.15 11609.36
1991/06/30 12151.03 11045.00
1991/07/31 13135.95 11632.48
1991/08/31 13844.21 12027.50
1991/09/30 13877.41 11839.83
1991/10/31 13916.14 12042.40
1991/11/30 13434.75 11716.55
1991/12/31 15183.42 13342.01
1992/01/31 15608.57 13095.61
1992/02/29 15688.81 13123.01
1992/03/31 14948.19 12739.97
1992/04/30 14639.59 12781.58
1992/05/31 14571.70 12868.57
1992/06/30 14090.30 12516.69
1992/07/31 14584.05 13066.85
1992/08/31 14232.25 12885.35
1992/09/30 14497.64 13047.84
1992/10/31 15256.78 13264.96
1992/11/30 16250.44 13884.28
1992/12/31 16685.40 14038.73
1993/01/31 17152.58 13900.72
1993/02/28 16704.69 13643.20
1993/03/31 17228.28 13912.02
1993/04/30 16938.10 13363.41
1993/05/31 17915.90 13854.66
1993/06/30 17985.29 13739.08
1993/07/31 17676.18 13524.54
1993/08/31 18319.64 14086.68
1993/09/30 18855.85 14029.66
1993/10/31 19082.96 14421.25
1993/11/30 18609.83 14282.56
1993/12/31 19163.87 14557.21
1994/01/31 19832.65 14898.12
1994/02/28 19666.94 14645.22
1994/03/31 18864.88 13919.90
1994/04/30 19063.74 13982.06
1994/05/31 18944.43 14146.26
1994/06/30 18115.86 13712.20
1994/07/31 18500.31 14154.31
1994/08/31 19335.51 14967.47
1994/09/30 18937.80 14789.22
1994/10/31 19554.25 15119.00
1994/11/30 18904.65 14622.96
1994/12/31 18994.21 14877.92
1995/01/31 18826.77 15132.87
1995/02/28 19550.10 15773.43
1995/03/31 20286.83 16234.89
1995/04/30 21164.21 16579.06
1995/05/31 21894.24 17122.70
1995/06/30 23561.92 17833.12
1995/07/31 25316.68 18639.77
1995/08/31 25577.88 18682.07
1995/09/30 26294.52 19492.83
1995/10/31 26160.57 19405.50
1995/11/30 26676.28 20169.86
1995/12/31 26428.39 20318.48
1996/01/31 27046.96 20912.47
1996/02/29 27649.11 21350.64
1996/03/31 27840.38 21417.07
1996/04/30 28669.21 22090.17
1996/05/31 29441.38 22900.41
1996/06/30 29065.92 22767.37
1996/07/31 27301.99 21283.69
1996/08/31 27939.56 21933.50
1996/09/30 29816.83 23482.76
1996/10/31 29965.60 23508.10
1996/11/30 31743.70 25165.23
1996/12/31 30721.30 24764.73
1997/01/31 32565.29 26392.76
1997/02/28 31818.85 26081.64
1997/03/31 30047.89 24632.02
1997/04/30 31577.36 26100.02
1997/05/31 33816.68 28148.94
1997/06/30 35207.11 29260.51
1997/07/31 37878.19 31744.24
1997/08/31 36377.99 30147.51
1997/09/30 38463.64 31725.59
1997/10/31 36956.12 30475.70
1997/11/30 38031.87 31561.60
1997/12/31 38073.17 31882.20
1998/01/31 38553.82 32702.48
1998/02/28 41486.90 35201.51
1998/03/31 42916.05 36611.58
1998/04/30 43722.02 37091.73
1998/05/31 42583.69 35886.32
1998/06/30 45250.88 37919.97
1998/07/31 46156.56 37410.41
1998/08/31 38611.98 31548.12
1998/09/30 42558.76 34030.30
1998/10/31 45525.08 36690.05
1998/11/30 48682.50 39484.99
1998/12/31 52813.99 43046.14
1999/01/31 57064.56 45529.86
1999/02/28 54238.93 43296.54
1999/03/31 57186.19 45524.73
1999/04/30 57354.61 45856.63
1999/05/31 56549.96 44557.17
1999/06/30 60180.24 47619.45
1999/07/31 59338.16 46108.20
1999/08/31 59637.57 46681.56
1999/09/30 58439.95 45827.88
1999/10/31 61808.25 49128.87
1999/11/30 65447.88 51948.39
1999/12/31 71967.37 57606.83
2000/01/31 69846.58 55060.78
2000/02/29 74812.51 58500.59
2000/03/31 78059.07 61809.09
2000/04/30 73568.50 58629.57
2000/05/31 69533.05 55528.30
IMATRL PRASUN SHR__CHT 20000531 20000622 140015 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Equity Growth Fund - Class T on May 31,
1990, and the current 3.50% sales charge was paid. As the chart shows,
by May 31, 2000, the value of the investment would have grown to
$69,533 - a 595.33% increase on the initial investment. For
comparison, look at how the Russell 3000 Growth Index did over the
same period. With dividends and capital gains, if any, reinvested, the
same $10,000 investment would have grown to $55,528 - a 455.28%
increase.
(checkmark)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.
* THE LIPPER MULTI-CAP GROWTH FUNDS AVERAGE REFLECTS THE PERFORMANCE
(EXCLUDING SALES CHARGES) OF MUTUAL FUNDS WITH SIMILAR PORTFOLIO
CHARACTERISTICS AND CAPITALIZATION. AS OF MAY 31, 2000, THE SIX MONTH,
ONE YEAR, FIVE YEAR AND 10 YEAR CUMULATIVE TOTAL RETURNS FOR THE
MULTI-CAP GROWTH FUNDS AVERAGE WERE, 13.01%, 40.45%, 214.24% AND
426.94%, RESPECTIVELY. THE ONE YEAR, FIVE YEAR AND 10 YEAR AVERAGE
ANNUAL TOTAL RETURNS FOR THE MULTI-CAP GROWTH FUNDS AVERAGE WERE,
40.45%, 25.26% AND 17.71%, RESPECTIVELY.
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 six
month, past one year, past five years, and past 10 years total return
figures are 5%, 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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY ADV EQUITY GROWTH - 5.94% 22.28% 211.23% 606.12%
CL B
FIDELITY ADV EQUITY GROWTH - 1.04% 17.28% 209.23% 606.12%
CL B (INCL. CONTINGENT
DEFERRED SALES CHARGE)
Russell 3000 Growth 6.89% 24.62% 224.30% 455.28%
Growth Funds Average 7.32% 20.08% 172.00% 349.50%
</TABLE>
CUMULATIVE TOTAL RETURNS show Class B's performance in percentage
terms over a set period - in this case, six months, 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
Russell 3000 Growth Index - a market capitalization-weighted index of
growth-oriented stocks of U.S. domiciled corporations. 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 Inc. The past six
months average represents a peer group of 1,387 mutual funds. These
benchmarks include reinvested dividends and capital gains, if any, and
exclude the effect of sales charges. Lipper has created new comparison
categories that group funds according to portfolio characteristics and
capitalization, as well as by capitalization only. These averages are
listed on page 9 of this report.*
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY ADV EQUITY GROWTH - 22.28% 25.49% 21.59%
CL B
FIDELITY ADV EQUITY GROWTH - 17.28% 25.33% 21.59%
CL B (INCL. CONTINGENT
DEFERRED SALES CHARGE)
Russell 3000 Growth 24.62% 26.53% 18.70%
Growth Funds Average 20.08% 21.60% 15.77%
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 Russell 3000 Growth
00242 RS007
1990/05/31 10000.00 10000.00
1990/06/30 10086.01 10104.62
1990/07/31 9799.31 9991.10
1990/08/31 8549.31 9005.86
1990/09/30 7844.04 8500.74
1990/10/31 7941.51 8508.27
1990/11/30 8916.28 9091.64
1990/12/31 9552.75 9418.68
1991/01/31 10940.37 9921.24
1991/02/28 11926.61 10727.54
1991/03/31 13096.33 11168.45
1991/04/30 13050.46 11111.61
1991/05/31 13732.80 11609.36
1991/06/30 12591.74 11045.00
1991/07/31 13612.39 11632.48
1991/08/31 14346.33 12027.50
1991/09/30 14380.73 11839.83
1991/10/31 14420.87 12042.40
1991/11/30 13922.02 11716.55
1991/12/31 15734.11 13342.01
1992/01/31 16174.69 13095.61
1992/02/29 16257.83 13123.01
1992/03/31 15490.35 12739.97
1992/04/30 15170.56 12781.58
1992/05/31 15100.21 12868.57
1992/06/30 14601.35 12516.69
1992/07/31 15113.00 13066.85
1992/08/31 14748.45 12885.35
1992/09/30 15023.46 13047.84
1992/10/31 15810.13 13264.96
1992/11/30 16839.84 13884.28
1992/12/31 17290.57 14038.73
1993/01/31 17774.70 13900.72
1993/02/28 17310.55 13643.20
1993/03/31 17853.14 13912.02
1993/04/30 17552.43 13363.41
1993/05/31 18565.70 13854.66
1993/06/30 18637.61 13739.08
1993/07/31 18317.29 13524.54
1993/08/31 18984.08 14086.68
1993/09/30 19539.75 14029.66
1993/10/31 19775.09 14421.25
1993/11/30 19284.79 14282.56
1993/12/31 19858.93 14557.21
1994/01/31 20551.97 14898.12
1994/02/28 20380.25 14645.22
1994/03/31 19549.10 13919.90
1994/04/30 19755.17 13982.06
1994/05/31 19631.53 14146.26
1994/06/30 18772.91 13712.20
1994/07/31 19171.31 14154.31
1994/08/31 20036.80 14967.47
1994/09/30 19624.66 14789.22
1994/10/31 20263.48 15119.00
1994/11/30 19590.32 14622.96
1994/12/31 19683.11 14877.92
1995/01/31 19509.60 15132.87
1995/02/28 20259.17 15773.43
1995/03/31 21022.62 16234.89
1995/04/30 21931.82 16579.06
1995/05/31 22688.33 17122.70
1995/06/30 24416.50 17833.12
1995/07/31 26234.90 18639.77
1995/08/31 26505.58 18682.07
1995/09/30 27248.20 19492.83
1995/10/31 27109.40 19405.50
1995/11/30 27643.81 20169.86
1995/12/31 27386.93 20318.48
1996/01/31 28027.94 20912.47
1996/02/29 28651.93 21350.64
1996/03/31 28850.13 21417.07
1996/04/30 29709.03 22090.17
1996/05/31 30509.20 22900.41
1996/06/30 30120.13 22767.37
1996/07/31 28292.22 21283.69
1996/08/31 28952.91 21933.50
1996/09/30 30898.27 23482.76
1996/10/31 31052.43 23508.10
1996/11/30 32895.03 25165.23
1996/12/31 31835.54 24764.73
1997/01/31 33725.09 26392.76
1997/02/28 32925.01 26081.64
1997/03/31 31073.41 24632.02
1997/04/30 32643.08 26100.02
1997/05/31 34929.01 28148.94
1997/06/30 36353.91 29260.51
1997/07/31 39089.40 31744.24
1997/08/31 37512.11 30147.51
1997/09/30 39645.64 31725.59
1997/10/31 38083.59 30475.70
1997/11/30 39173.22 31561.60
1997/12/31 39192.82 31882.20
1998/01/31 39668.36 32702.48
1998/02/28 42668.41 35201.51
1998/03/31 44116.42 36611.58
1998/04/30 44922.79 37091.73
1998/05/31 43726.24 35886.32
1998/06/30 46448.83 37919.97
1998/07/31 47359.25 37410.41
1998/08/31 39590.32 31548.12
1998/09/30 43622.19 34030.30
1998/10/31 46639.58 36690.05
1998/11/30 49856.41 39484.99
1998/12/31 54069.50 43046.14
1999/01/31 58383.21 45529.86
1999/02/28 55470.40 43296.54
1999/03/31 58461.41 45524.73
1999/04/30 58598.25 45856.63
1999/05/31 57747.87 44557.17
1999/06/30 61432.86 47619.45
1999/07/31 60543.38 46108.20
1999/08/31 60817.07 46681.56
1999/09/30 59565.93 45827.88
1999/10/31 62977.23 49128.87
1999/11/30 66652.45 51948.39
1999/12/31 73251.13 57606.83
2000/01/31 71055.74 55060.78
2000/02/29 76087.36 58500.59
2000/03/31 79353.68 61809.09
2000/04/30 74744.89 58629.57
2000/05/31 70611.77 55528.30
IMATRL PRASUN SHR__CHT 20000531 20000622 143127 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Equity Growth Fund - Class B on May 31,
1990. As the chart shows, by May 31, 2000, the value of the investment
would have grown to $70,612 - a 606.12% increase on the initial
investment. For comparison, look at how the Russell 3000 Growth Index
did over the same period. With dividends and capital gains, if any,
reinvested, the same $10,000 investment would have grown to $55,528 -
a 455.28% increase.
(checkmark)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.
* THE LIPPER MULTI-CAP GROWTH FUNDS AVERAGE REFLECTS THE PERFORMANCE
(EXCLUDING SALES CHARGES) OF MUTUAL FUNDS WITH SIMILAR PORTFOLIO
CHARACTERISTICS AND CAPITALIZATION. AS OF MAY 31, 2000, THE SIX MONTH,
ONE YEAR, FIVE YEAR AND 10 YEAR CUMULATIVE TOTAL RETURNS FOR THE
MULTI-CAP GROWTH FUNDS AVERAGE WERE, 13.01%, 40.45%, 214.24% AND
426.94%, RESPECTIVELY. THE ONE YEAR, FIVE YEAR AND 10 YEAR AVERAGE
ANNUAL TOTAL RETURNS FOR THE MULTI-CAP GROWTH FUNDS AVERAGE WERE,
40.45%, 25.26% AND 17.71%, RESPECTIVELY.
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 six month, past one year,
past five years, and past 10 years total return figures are 1%, 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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY ADV EQUITY GROWTH - 5.95% 22.30% 211.41% 606.54%
CL C
FIDELITY ADV EQUITY GROWTH - 4.97% 21.30% 211.41% 606.54%
CL C (INCL. CONTINGENT
DEFERRED SALES CHARGE)
Russell 3000 Growth 6.89% 24.62% 224.30% 455.28%
Growth Funds Average 7.32% 20.08% 172.00% 349.50%
</TABLE>
CUMULATIVE TOTAL RETURNS show Class C's performance in percentage
terms over a set period - in this case, six months, 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
Russell 3000 Growth Index - a market capitalization-weighted index of
growth-oriented stocks of U.S. domiciled corporations. 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 Inc. The past six
months average represents a peer group of 1,387 mutual funds. These
benchmarks include reinvested dividends and capital gains, if any, and
exclude the effect of sales charges. Lipper has created new comparison
categories that group funds according to portfolio characteristics and
capitalization, as well as by capitalization only. These averages are
listed on page 11 of this report.*
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY ADV EQUITY GROWTH - 22.30% 25.51% 21.59%
CL C
FIDELITY ADV EQUITY GROWTH - 21.30% 25.51% 21.59%
CL C (INCL. CONTINGENT
DEFERRED SALES CHARGE)
Russell 3000 Growth 24.62% 26.53% 18.70%
Growth Funds Average 20.08% 21.60% 15.77%
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 Russell 3000 Growth
00479 RS007
1990/05/31 10000.00 10000.00
1990/06/30 10086.01 10104.62
1990/07/31 9799.31 9991.10
1990/08/31 8549.31 9005.86
1990/09/30 7844.04 8500.74
1990/10/31 7941.51 8508.27
1990/11/30 8916.28 9091.64
1990/12/31 9552.75 9418.68
1991/01/31 10940.37 9921.24
1991/02/28 11926.61 10727.54
1991/03/31 13096.33 11168.45
1991/04/30 13050.46 11111.61
1991/05/31 13732.80 11609.36
1991/06/30 12591.74 11045.00
1991/07/31 13612.39 11632.48
1991/08/31 14346.33 12027.50
1991/09/30 14380.73 11839.83
1991/10/31 14420.87 12042.40
1991/11/30 13922.02 11716.55
1991/12/31 15734.11 13342.01
1992/01/31 16174.69 13095.61
1992/02/29 16257.83 13123.01
1992/03/31 15490.35 12739.97
1992/04/30 15170.56 12781.58
1992/05/31 15100.21 12868.57
1992/06/30 14601.35 12516.69
1992/07/31 15113.00 13066.85
1992/08/31 14748.45 12885.35
1992/09/30 15023.46 13047.84
1992/10/31 15810.13 13264.96
1992/11/30 16839.84 13884.28
1992/12/31 17290.57 14038.73
1993/01/31 17774.70 13900.72
1993/02/28 17310.55 13643.20
1993/03/31 17853.14 13912.02
1993/04/30 17552.43 13363.41
1993/05/31 18565.70 13854.66
1993/06/30 18637.61 13739.08
1993/07/31 18317.29 13524.54
1993/08/31 18984.08 14086.68
1993/09/30 19539.75 14029.66
1993/10/31 19775.09 14421.25
1993/11/30 19284.79 14282.56
1993/12/31 19858.93 14557.21
1994/01/31 20551.97 14898.12
1994/02/28 20380.25 14645.22
1994/03/31 19549.10 13919.90
1994/04/30 19755.17 13982.06
1994/05/31 19631.53 14146.26
1994/06/30 18772.91 13712.20
1994/07/31 19171.31 14154.31
1994/08/31 20036.80 14967.47
1994/09/30 19624.66 14789.22
1994/10/31 20263.48 15119.00
1994/11/30 19590.32 14622.96
1994/12/31 19683.11 14877.92
1995/01/31 19509.60 15132.87
1995/02/28 20259.17 15773.43
1995/03/31 21022.62 16234.89
1995/04/30 21931.82 16579.06
1995/05/31 22688.33 17122.70
1995/06/30 24416.50 17833.12
1995/07/31 26234.90 18639.77
1995/08/31 26505.58 18682.07
1995/09/30 27248.20 19492.83
1995/10/31 27109.40 19405.50
1995/11/30 27643.81 20169.86
1995/12/31 27386.93 20318.48
1996/01/31 28027.94 20912.47
1996/02/29 28651.93 21350.64
1996/03/31 28850.13 21417.07
1996/04/30 29709.03 22090.17
1996/05/31 30509.20 22900.41
1996/06/30 30120.13 22767.37
1996/07/31 28292.22 21283.69
1996/08/31 28952.91 21933.50
1996/09/30 30898.27 23482.76
1996/10/31 31052.43 23508.10
1996/11/30 32895.03 25165.23
1996/12/31 31835.54 24764.73
1997/01/31 33725.09 26392.76
1997/02/28 32925.01 26081.64
1997/03/31 31073.41 24632.02
1997/04/30 32643.08 26100.02
1997/05/31 34929.01 28148.94
1997/06/30 36353.91 29260.51
1997/07/31 39089.40 31744.24
1997/08/31 37512.11 30147.51
1997/09/30 39645.64 31725.59
1997/10/31 38083.59 30475.70
1997/11/30 39172.35 31561.60
1997/12/31 39191.45 31882.20
1998/01/31 39695.31 32702.48
1998/02/28 42692.15 35201.51
1998/03/31 44139.20 36611.58
1998/04/30 44944.06 37091.73
1998/05/31 43753.89 35886.32
1998/06/30 46468.17 37919.97
1998/07/31 47375.79 37410.41
1998/08/31 39609.69 31548.12
1998/09/30 43634.02 34030.30
1998/10/31 46656.55 36690.05
1998/11/30 49867.45 39484.99
1998/12/31 54082.13 43046.14
1999/01/31 58410.27 45529.86
1999/02/28 55494.59 43296.54
1999/03/31 58487.51 45524.73
1999/04/30 58622.67 45856.63
1999/05/31 57773.07 44557.17
1999/06/30 61461.12 47619.45
1999/07/31 60572.90 46108.20
1999/08/31 60852.88 46681.56
1999/09/30 59597.79 45827.88
1999/10/31 63015.51 49128.87
1999/11/30 66684.26 51948.39
1999/12/31 73302.04 57606.83
2000/01/31 71092.62 55060.78
2000/02/29 76123.69 58500.59
2000/03/31 79380.32 61809.09
2000/04/30 74787.64 58629.57
2000/05/31 70654.23 55528.30
IMATRL PRASUN SHR__CHT 20000531 20000622 152252 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Equity Growth - Class C on May 31, 1990.
As the chart shows, by May 31, 2000, the value of the investment would
have grown to $70,654 - a 606.54% increase on the initial investment.
For comparison, look at how the Russell 3000 Growth Index did over the
same period. With dividends and capital gains, if any, reinvested, the
same $10,000 investment would have grown to $55,528 - a 455.28%
increase.
(checkmark)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.
* THE LIPPER MULTI-CAP GROWTH FUNDS AVERAGE REFLECTS THE PERFORMANCE
(EXCLUDING SALES CHARGES) OF MUTUAL FUNDS WITH SIMILAR PORTFOLIO
CHARACTERISTICS AND CAPITALIZATION. AS OF MAY 31, 2000, THE SIX MONTH,
ONE YEAR, FIVE YEAR AND 10 YEAR CUMULATIVE TOTAL RETURNS FOR THE
MULTI-CAP GROWTH FUNDS AVERAGE WERE, 13.01%, 40.45%, 214.24% AND
426.94%, RESPECTIVELY. THE ONE YEAR, FIVE YEAR AND 10 YEAR AVERAGE
ANNUAL TOTAL RETURNS FOR THE MULTI-CAP GROWTH FUNDS AVERAGE WERE,
40.45%, 25.26% AND 17.71%, RESPECTIVELY.
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
U.S. equity investors faced a steadily
declining market during the latter
part of the six-month period that
ended May 31, 2000, after
experiencing continued growth the
prior three months. Two chief
catalysts - a tightening of monetary
policy by the Federal Reserve Board
and the bursting of a speculative
bubble in technology stocks -
sparked a sustained pullback among
the major U.S. equity indexes that
began in March. The tech-heavy
NASDAQ Composite Index reached
a high of 5048 on March 10 before
quickly retreating below the 4000
level. The NASDAQ dropped to
3401 on the final day of the period,
gaining a modest 2.05% return for
the six-month period. The Standard
& Poor's 500SM Index - an index
of 500 widely held stocks - fared
slightly better in returning 2.90%.
Another index of well-established
stocks - the blue chips' Dow Jones
Industrial Average - surged higher
during the NASDAQ's sharp
plummet in April, but the brief rally
wasn't enough to significantly offset
earlier losses, and the Dow returned
-2.55% for the period. The Russell
2000(Registered trademark) Index - a barometer of
small-cap stocks - outperformed the
major indexes of larger companies
with a 5.50% return. As the period
drew to a close, weaker trading
volume suggested investors were
mixed about the direction of U.S.
stocks, and whether the three
interest-rate hikes levied by the
Fed during the period had begun
to cool off the overheated economy.
(photograph of Jennifer Uhrig)
An interview with Jennifer Uhrig, Portfolio Manager of Fidelity
Advisor Equity Growth Fund
Q. HOW DID THE FUND PERFORM, JENNIFER?
A. For the six months that ended May 31, 2000, the fund's Class A,
Class T, Class B and Class C shares returned 6.35%, 6.24%, 5.94% and
5.95%, respectively. The Russell 3000 Growth Index returned 6.89%
during this time, while the growth funds average - as tracked by
Lipper Inc. - returned 7.32%. For the 12 months that ended May 31,
2000, the fund's Class A, Class T, Class B and Class C shares returned
23.21%, 22.96%, 22.28%, and 22.30%, respectively. The Russell index
and Lipper average returned 24.62% and 20.08%, respectively.
Q. THE BIG STORY DURING THE PERIOD WAS THE VOLATILITY WE WITNESSED
WITHIN THE TECHNOLOGY SECTOR. HOW DID THIS CHOPPINESS AFFECT THE FUND?
A. Technology stocks performed well during the first half of the
period, but succumbed to investor fears during the second as high
valuations felt the effects of higher interest rates and the group
suffered a significant downturn. The fund was underweighted in
technology relative to the Russell index, but nonetheless had
approximately 43% of its net assets in the sector with an emphasis on
smaller-cap tech names. Unfortunately, these types of stocks were hit
particularly hard. On the plus side, the fund's investments in
communications equipment providers such as Nokia and Ericsson helped.
These stocks tend to trade in line with technology, so their solid
performance during the period was a pleasant surprise.
Q. DESPITE THE VOLATILITY, SOME OF THE FUND'S BIGGER-CAP TECHNOLOGY
NAMES CONTRIBUTED POSITIVELY TO PERFORMANCE . . .
A. The fund's stakes in market leaders such as Cisco Systems, EMC
Corp. and Intel generated good results. Cisco - the main player in the
Internet infrastructure area - experienced accelerating earnings and
revenue growth in spite of Y2K concerns. EMC - which specializes in
data storage - also enjoyed accelerating growth, and Intel benefited
from a shortage of high-end microprocessors. Microsoft, on the other
hand, was a notable laggard among the big-caps during the period,
partly due to the ongoing federal government case, but also because
the company's applications business slowed. Microsoft also was in the
process of implementing a new Internet strategy, and its success is
yet to be proven.
Q. WHAT OTHER TYPES OF STOCKS CONTRIBUTED POSITIVELY?
A. The fund's holdings in the oil services sector, such as Baker
Hughes, Halliburton and Smith International, did well. Oil prices were
at high levels, which made the return on exploration quite attractive.
In addition, we've seen lower levels of exploration in recent years,
meaning that activity will need to pick up in order to meet production
estimates. These companies - which sell the equipment used to drill
for oil - were in a solid position to benefit from this environment.
Also, the fund's underweighting in consumer nondurables positions -
relative to the index - worked out well.
Q. AT JUST OVER 14%, HEALTH STOCKS OCCUPIED THE SECOND-LARGEST SLOT -
AFTER TECHNOLOGY - IN THE PORTFOLIO. HOW DID THE FUND'S HEALTH-RELATED
INVESTMENTS PERFORM?
A. It was a mixed bag. The fund's drug stocks performed well as the
economy began to slow, but its biotechnology investments -
particularly those involved in genomics - fell in sympathy with
technology stocks. Drug stocks Eli Lilly - which had eight drugs in
late-stage development - and Warner-Lambert were among the fund's top
performers. Bristol-Myers Squibb, though, was a notable detractor as
the company suffered when its promising blood pressure drug Vanlev was
unexpectedly recalled for further study just 10 days before it was
expected to hit the market. In terms of biotech, the fund's stakes in
Millennium Pharmaceuticals and Genentech hurt performance.
Q. WHAT'S YOUR OUTLOOK?
A. Technology has been the key market driver, and the sector has been
very volatile. Performance has bounced around depending on whether
tech stocks have had a good week or a bad week. Earnings growth
continues to be strong for technology, so the sector could do well if
the economy slows and interest rates stabilize. Outside of technology,
the key economic question is whether we're in for a soft landing - in
which the economy slows, but in a gradual fashion - or a hard landing
- which could translate into a recession. Obviously, a soft landing
would be better. More stocks outside of technology could participate,
and economically sensitive stocks would stand a chance. If we see a
hard landing, I may look to add to the fund's consumer nondurables
positions or the drug stocks, both of which tend to perform well
going into a recession.
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 AND DO NOT NECESSARILY REPRESENT THE VIEWS OF FIDELITY OR
ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH VIEWS ARE
SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER CONDITIONS
AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE
VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE
INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS
FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY FIDELITY FUND.
(checkmark)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 May 31, 2000,
more than $14.7 billion
MANAGER: Jennifer Uhrig,
since 1997; joined Fidelity
in 1987
JENNIFER UHRIG ON
WIRELESS TECHNOLOGY:
"Cell phone usage has been a key
driver of wireless technology. So far,
cell phones have been used almost
exclusively for voice calls. Soon,
though, they'll be able to do much
more than that. You'll be able to
use your phone to get e-mail, your
calendar, account balances, sports
scores, the local weather, etc. And
we're just scratching the surface. In
some parts of Europe, you can point
your phone at a soda machine and
order a Coke. This greater utility
will stimulate new users and also
encourage existing users to replace
their phones.
"I've played the wireless trend a few
ways. First, I've been attracted to
companies such as Lucent
Technologies, Ericsson and
Motorola that make the
equipment to support wireless
networks. The fund also has stakes
in companies that supply
components that go into wireless
devices. A good example is Texas
Instruments, which makes digital
signal processors that go into cell
phones. Texas Instruments was one
of the fund's better performers
during the period. Finally, the fund
owns a number of service providers
that actually sign the customers up
and provide service. Names in this
area would include Vodafone
AirTouch, China Telecom, and
VoiceStream.
"Over the past year, subscriber
growth rates have risen
dramatically, which is a plus for
all three areas of investment. As the
capabilities increase, cell phones
may well become hand-held PCs. I'll
try to make sure the fund is
well-positioned as wireless
expands."
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF MAY 31,
2000
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Intel Corp. 4.5 1.8
Cisco Systems, Inc. 4.4 3.5
General Electric Co. 2.9 1.9
Warner-Lambert Co. 2.8 2.2
Texas Instruments, Inc. 2.2 1.3
Eli Lilly & Co. 2.0 2.0
Bristol-Myers Squibb Co. 1.6 1.7
International Business 1.6 0.9
Machines Corp.
EMC Corp. 1.5 1.3
Dell Computer Corp. 1.5 0.5
25.0 17.1
TOP FIVE MARKET SECTORS AS OF
MAY 31, 2000
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Technology 43.1 32.7
Health 14.2 14.8
Finance 9.2 9.7
Media & Leisure 7.6 10.0
Utilities 6.6 7.8
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
ASSET ALLOCATION (% OF FUND'S
NET ASSETS)
AS OF MAY 31, 2000 * AS OF NOVEMBER 30, 1999 **
Stocks 99.7% Stocks 98.1%
Short-Term Investments and Short-Term Investments and
Net Other Assets 0.3% Net Other Assets 1.9%
* FOREIGN INVESTMENTS 12.0% ** FOREIGN INVESTMENTS 10.7%
Row: 1, Col: 1, Value: 99.7 Row: 1, Col: 1, Value: 98.09999999999999
Row: 1, Col: 2, Value: 0.0 Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 0.0 Row: 1, Col: 3, Value: 0.0
Row: 1, Col: 4, Value: 0.0 Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: 0.0 Row: 1, Col: 5, Value: 0.0
Row: 1, Col: 6, Value: 0.0 Row: 1, Col: 6, Value: 0.0
Row: 1, Col: 7, Value: 0.0 Row: 1, Col: 7, Value: 0.0
Row: 1, Col: 8, Value: 0.3 Row: 1, Col: 8, Value: 1.9
</TABLE>
INVESTMENTS MAY 31, 2000 (UNAUDITED)
Showing Percentage of Net Assets
<TABLE>
<CAPTION>
<S> <C> <C> <C>
COMMON STOCKS - 99.7%
SHARES VALUE (NOTE 1) (000S)
AEROSPACE & DEFENSE - 0.7%
BFGoodrich Co. 253,600 $ 9,003
Boeing Co. 1,458,320 56,966
United Technologies Corp. 656,000 39,647
105,616
BASIC INDUSTRIES - 0.9%
CHEMICALS & PLASTICS - 0.2%
Cytec Industries, Inc. (a) 708,700 19,223
Lyondell Chemical Co. 1,103,790 18,419
37,642
METALS & MINING - 0.5%
CommScope, Inc. (a) 1,010,200 39,019
Falconbridge Ltd. 640,300 9,199
Inco Ltd. (a) 1,118,600 17,939
Martin Marietta Materials, 114,800 5,618
Inc.
71,775
PACKAGING & CONTAINERS - 0.2%
Owens-Illinois, Inc. (a) 2,621,600 29,493
TOTAL BASIC INDUSTRIES 138,910
CONSTRUCTION & REAL ESTATE -
0.2%
BUILDING MATERIALS - 0.1%
Vulcan Materials Co. 279,400 13,062
ENGINEERING - 0.1%
Fluor Corp. 25,000 813
Stolt Offshore SA (a) 886,000 13,069
Stolt Offshore SA Class A 159,000 2,067
sponsored ADR (a)
15,949
TOTAL CONSTRUCTION & REAL 29,011
ESTATE
DURABLES - 0.7%
CONSUMER ELECTRONICS - 0.6%
Gemstar International Group 518,800 22,017
Ltd. (a)
Pioneer Corp. 152,000 4,640
Sanyo Electric Co. Ltd. 656,000 4,845
Sony Corp. 668,100 60,922
92,424
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
DURABLES - CONTINUED
TEXTILES & APPAREL - 0.1%
Shaw Industries, Inc. 834,100 $ 11,625
TOTAL DURABLES 104,049
ENERGY - 3.8%
ENERGY SERVICES - 2.6%
Baker Hughes, Inc. 2,419,730 87,715
BJ Services Co. (a) 682,400 48,877
Coflexip SA sponsored ADR 740,800 43,152
Halliburton Co. 1,970,800 100,511
Smith International, Inc. (a) 688,100 54,403
Weatherford International, 1,052,200 45,310
Inc.
379,968
OIL & GAS - 1.2%
Apache Corp. 541,900 32,988
Burlington Resources, Inc. 539,700 24,691
Grant Prideco, Inc. (a) 1,060,300 24,652
Newfield Exploration Co. (a) 1,114,100 46,653
Noble Affiliates, Inc. 1,145,000 45,013
Vastar Resources, Inc. 93,300 7,598
181,595
TOTAL ENERGY 561,563
FINANCE - 9.2%
BANKS - 1.1%
Bank One Corp. 4,209,200 139,167
Chuo Mitsui Trust & Banking 2,779,000 11,164
Co. Ltd.
Sumitomo Trust & Banking Ltd. 1,980,000 14,311
164,642
CREDIT & OTHER FINANCE - 1.3%
American Express Co. 1,836,412 98,822
Associates First Capital 2,544,300 69,809
Corp. Class A
Citigroup, Inc. 399,600 24,850
193,481
FEDERAL SPONSORED CREDIT - 1.6%
Fannie Mae 2,853,500 171,567
Freddie Mac 1,571,400 69,927
241,494
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
FINANCE - CONTINUED
INSURANCE - 3.6%
Ace Ltd. 1,689,100 $ 45,289
AFLAC, Inc. 703,400 36,357
Allmerica Financial Corp. 515,700 29,749
AMBAC Financial Group, Inc. 347,400 17,500
American International Group, 1,344,412 151,330
Inc.
Everest Re Group Ltd. 951,900 32,365
Marsh & McLennan Companies, 566,400 62,339
Inc.
The Chubb Corp. 838,700 58,709
XL Capital Ltd. Class A 1,533,800 91,261
524,899
SECURITIES INDUSTRY - 1.6%
Charles Schwab Corp. 2,548,200 73,261
Daiwa Securities Group, Inc. 4,256,000 51,729
Nikko Securities Co. Ltd. 4,489,000 41,566
Nomura Securities Co. Ltd. 3,061,000 70,149
236,705
TOTAL FINANCE 1,361,221
HEALTH - 14.2%
DRUGS & PHARMACEUTICALS - 12.5%
Abgenix, Inc. (a) 581,300 45,923
Alkermes, Inc. (a) 995,100 36,446
American Home Products Corp. 1,074,600 57,894
Bristol-Myers Squibb Co. 4,371,800 240,722
Cambridge Antibody Technology 260,255 9,003
Group PLC (a)
Elan Corp. PLC sponsored ADR 2,234,380 88,956
(a)
Eli Lilly & Co. 3,800,400 289,305
Exelixis, Inc. 548,300 13,296
Genentech, Inc. 678,900 72,897
Human Genome Sciences, Inc. 541,000 47,473
(a)
Medarex, Inc. (a) 669,200 30,449
Merck & Co., Inc. 1,914,100 142,840
Millennium Pharmaceuticals, 1,104,200 92,339
Inc. (a)
Pfizer, Inc. 2,824,400 125,862
Protein Design Labs, Inc. (a) 112,200 11,963
Schering-Plough Corp. 2,843,300 137,545
Warner-Lambert Co. 3,339,500 407,836
1,850,749
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
HEALTH - CONTINUED
MEDICAL EQUIPMENT & SUPPLIES
- 1.3%
Cardinal Health, Inc. 1,387,800 $ 90,034
Guidant Corp. (a) 511,400 25,890
Johnson & Johnson 468,000 41,886
Medtronic, Inc. 685,100 35,368
193,178
MEDICAL FACILITIES MANAGEMENT
- 0.4%
HCA- The Healthcare Co. 1,483,900 40,065
Health Management Associates, 392,875 4,641
Inc. Class A (a)
HEALTHSOUTH Corp. (a) 1,813,800 11,676
56,382
TOTAL HEALTH 2,100,309
HOLDING COMPANIES - 0.2%
PartnerRe Ltd. 933,900 34,671
INDUSTRIAL MACHINERY &
EQUIPMENT - 3.1%
ELECTRICAL EQUIPMENT - 2.9%
General Electric Co. 8,146,700 428,720
INDUSTRIAL MACHINERY &
EQUIPMENT - 0.2%
ASM Lithography Holding NV (a) 1,002,900 35,666
TOTAL INDUSTRIAL MACHINERY & 464,386
EQUIPMENT
MEDIA & LEISURE - 7.6%
BROADCASTING - 4.6%
AT&T Corp. - Liberty Media 951,760 42,175
Group Class A (a)
Cablevision Systems Corp. 139,200 8,717
Class A (a)
Clear Channel Communications, 950,500 71,169
Inc. (a)
Comcast Corp. Class A 1,619,100 61,323
(special) (a)
Cox Communications, Inc. 1,181,000 52,112
Class A (a)
EchoStar Communications Corp. 1,082,000 43,212
Class A (a)
Mediacom Communications Corp. 918,500 7,362
Class A
MediaOne Group, Inc. (a) 1,932,100 129,088
NTL, Inc. (a) 516,750 30,521
Time Warner, Inc. 2,054,098 162,145
UnitedGlobalCom, Inc. Class A 740,600 35,549
(a)
USA Networks, Inc. (a) 2,016,000 38,178
681,551
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
MEDIA & LEISURE - CONTINUED
ENTERTAINMENT - 0.7%
Viacom, Inc. Class B 1,396,290 $ 86,570
(non-vtg.) (a)
Walt Disney Co. 222,100 9,370
95,940
LEISURE DURABLES & TOYS - 0.3%
Harley-Davidson, Inc. 1,120,200 41,727
RESTAURANTS - 2.0%
Brinker International, Inc. 1,575,700 44,612
(a)
Darden Restaurants, Inc. 2,343,900 40,286
McDonald's Corp. 3,109,900 111,373
Outback Steakhouse, Inc. (a) 1,620,700 49,127
Tricon Global Restaurants, 1,249,080 36,614
Inc. (a)
Wendy's International, Inc. 713,100 13,950
295,962
TOTAL MEDIA & LEISURE 1,115,180
NONDURABLES - 3.4%
BEVERAGES - 1.3%
Coca-Cola Enterprises, Inc. 1,731,600 29,654
Pepsi Bottling Group, Inc. 1,736,600 45,369
The Coca-Cola Co. 2,143,900 114,431
189,454
FOODS - 0.4%
American Italian Pasta Co. 512,200 12,581
Class A (a)
Keebler Foods Co. 1,206,400 43,732
56,313
HOUSEHOLD PRODUCTS - 0.4%
Clorox Co. 1,426,800 56,537
TOBACCO - 1.3%
Philip Morris Companies, Inc. 7,353,600 192,113
TOTAL NONDURABLES 494,417
PRECIOUS METALS - 0.5%
Barrick Gold Corp. 1,144,200 20,950
Homestake Mining Co. 1,794,700 12,114
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
PRECIOUS METALS - CONTINUED
Newmont Mining Corp. 1,165,600 $ 26,882
Placer Dome, Inc. 1,137,900 9,353
69,299
RETAIL & WHOLESALE - 4.4%
DRUG STORES - 0.4%
Walgreen Co. 1,858,700 52,741
GENERAL MERCHANDISE STORES -
1.5%
Kohls Corp. (a) 966,300 50,006
Wal-Mart Stores, Inc. 2,997,200 172,714
222,720
GROCERY STORES - 0.4%
Safeway, Inc. (a) 1,368,500 63,122
RETAIL & WHOLESALE,
MISCELLANEOUS - 2.1%
Best Buy Co., Inc. (a) 1,319,900 84,474
Home Depot, Inc. 3,868,400 188,826
Tiffany & Co., Inc. 699,500 42,626
315,926
TOTAL RETAIL & WHOLESALE 654,509
SERVICES - 0.3%
ADVERTISING - 0.2%
TMP Worldwide, Inc. (a) 420,500 23,233
SERVICES - 0.1%
Media Metrix, Inc. 273,000 7,610
Register.com, Inc. 240,900 9,395
17,005
TOTAL SERVICES 40,238
TECHNOLOGY - 43.1%
COMMUNICATIONS EQUIPMENT -
10.8%
ADC Telecommunications, Inc. 1,258,800 84,576
(a)
Advanced Fibre 450,000 20,700
Communications, Inc. (a)
Aspect Communications Corp. 533,700 21,415
(a)
Ciena Corp. (a) 449,400 53,788
Cisco Systems, Inc. (a) 11,432,700 650,949
Comverse Technology, Inc. (a) 559,200 51,097
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
TECHNOLOGY - CONTINUED
COMMUNICATIONS EQUIPMENT -
CONTINUED
Corning, Inc. 567,200 $ 109,718
Ditech Communications Corp. 302,600 24,813
Lucent Technologies, Inc. 3,730,792 214,054
Nokia AB sponsored ADR 2,731,700 142,048
Nortel Networks Corp. 2,768,800 147,552
Oni Systems Corp. 8,000 200
Telefonaktiebolaget LM 3,537,400 72,517
Ericsson sponsored ADR
1,593,427
COMPUTER SERVICES & SOFTWARE
- 8.7%
Adobe Systems, Inc. 456,200 51,351
Affymetrix, Inc. (a) 259,400 30,804
Art Technology Group, Inc. 453,000 26,585
Automatic Data Processing, 1,107,500 60,843
Inc.
BEA Systems, Inc. (a) 1,191,200 43,032
BroadVision, Inc. (a) 1,157,600 41,457
Citrix Systems, Inc. (a) 1,404,800 73,928
Concentric Network Corp. (a) 593,400 26,555
Digex, Inc. Class A 982,200 41,498
Electronic Arts, Inc. (a) 783,300 50,033
Electronic Data Systems Corp. 1,191,000 76,596
Electronics for Imaging, Inc. 1,004,200 36,967
(a)
Healtheon/Web Maryland Corp. 829,400 12,130
(a)
Inktomi Corp. (a) 413,154 46,118
Intertrust Technologies Corp. 801,100 14,220
Intuit, Inc. (a) 2,223,200 80,591
Mercury Interactive Corp. (a) 405,100 34,332
Microsoft Corp. (a) 2,834,400 177,327
Network Solutions, Inc. Class 57,500 8,499
A (a)
Nuance Communications, Inc. 175,100 6,916
Oracle Corp. (a) 1,711,500 123,014
PeopleSoft, Inc. (a) 675,500 9,330
Priceline.com, Inc. (a) 587,400 22,395
Razorfish, Inc. Class A 418,200 6,534
Software.com, Inc. 205,300 17,297
Trans Cosmos, Inc. 122,700 17,873
Usinternetworking, Inc. (a) 457,800 8,212
VeriSign, Inc. (a) 325,900 44,119
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
TECHNOLOGY - CONTINUED
COMPUTER SERVICES & SOFTWARE
- CONTINUED
VERITAS Software Corp. (a) 744,100 $ 86,688
Vignette Corp. (a) 235,800 6,499
1,281,743
COMPUTERS & OFFICE EQUIPMENT
- 9.6%
Brocade Communications 422,100 49,781
Systems, Inc.
CDW Computer Centers, Inc. (a) 675,300 79,000
Compaq Computer Corp. 1,887,900 49,557
Dell Computer Corp. (a) 4,975,900 214,586
EMC Corp. (a) 1,928,682 224,330
Gateway, Inc. (a) 806,700 39,932
Hewlett-Packard Co. 1,370,400 164,619
International Business 2,119,700 227,470
Machines Corp.
Lexmark International Group, 460,300 32,106
Inc. Class A (a)
MRV Communications, Inc. (a) 1,762,000 46,913
Pitney Bowes, Inc. 755,000 32,843
SCI Systems, Inc. (a) 1,224,300 55,094
Softbank Corp. 117,600 18,003
Softbank Corp. New 225,400 33,774
Sun Microsystems, Inc. (a) 1,906,000 146,047
1,414,055
ELECTRONIC INSTRUMENTS - 0.8%
Agilent Technologies, Inc. 835,100 61,484
Applied Materials, Inc. (a) 675,900 56,438
Varian, Inc. (a) 277,400 9,796
127,718
ELECTRONICS - 13.2%
Advanced Micro Devices, Inc. 1,023,400 83,343
(a)
Bookham Technology PLC 98,800 4,810
sponsored ADR
Broadcom Corp. Class A (a) 316,000 41,100
Celestica, Inc. (sub. vtg.) 537,100 25,052
(a)
Chartered Semiconductor 897,400 72,016
Manufacturing Ltd. ADR
Intel Corp. 5,366,400 669,118
JDS Uniphase Corp. (a) 1,070,100 94,169
Kyocera Corp. 280,500 46,020
Linear Technology Corp. 314,000 18,546
LSI Logic Corp. (a) 1,121,700 59,100
Micron Technology, Inc. (a) 1,632,600 114,180
Mitsubishi Electric Corp. 7,536,000 73,976
Motorola, Inc. 1,117,900 104,803
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
TECHNOLOGY - CONTINUED
ELECTRONICS - CONTINUED
PMC-Sierra, Inc. (a) 232,200 $ 35,585
Samsung Electronics Co. Ltd. 135,690 37,001
Sanmina Corp. (a) 807,800 51,396
Taiwan Semiconductor 1,435,670 50,697
Manufacturing Co. Ltd.
sponsored ADR (a)
Texas Instruments, Inc. 4,515,300 326,230
Xilinx, Inc. (a) 684,400 52,100
1,959,242
TOTAL TECHNOLOGY 6,376,185
TRANSPORTATION - 0.8%
AIR TRANSPORTATION - 0.3%
Southwest Airlines Co. 1,764,200 33,851
Travelocity.com, Inc. (a) 349,500 6,182
40,033
RAILROADS - 0.5%
Burlington Northern Santa Fe 964,900 22,796
Corp.
Canadian National Railway Co. 1,164,100 31,699
Union Pacific Corp. 545,700 23,090
77,585
TOTAL TRANSPORTATION 117,618
UTILITIES - 6.6%
CELLULAR - 3.6%
Aerial Communications, Inc. 411,700 21,449
(a)
AT&T Corp. - Wireless Group 935,200 26,712
China Telecom (Hong Kong) 576,950 84,812
Ltd. sponsored ADR (a)
Nextel Communications, Inc. 794,800 73,618
Class A (a)
Sprint Corp. - PCS Group 1,425,900 79,137
Series 1 (a)
Vodafone AirTouch PLC 25,779,144 118,101
Vodafone AirTouch PLC 1,328,050 60,841
sponsored ADR
VoiceStream Wireless Corp. (a) 590,328 67,593
532,263
ELECTRIC UTILITY - 0.8%
AES Corp. (a) 800,300 69,826
Calpine Corp. (a) 429,800 45,532
115,358
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
UTILITIES - CONTINUED
TELEPHONE SERVICES - 2.2%
AT&T Corp. 1,840,311 $ 63,836
DDI Corp. 4,660 47,560
iBasis, Inc. 373,500 5,252
McLeodUSA, Inc. Class A (a) 2,736,000 54,720
Metromedia Fiber Network, 2,038,800 63,075
Inc. Class A (a)
Net2Phone, Inc. 132,200 3,900
NEXTLINK Communications, Inc. 293,100 20,535
Class A (a)
Sprint Corp. - FON Group 603,200 36,494
TeraBeam Networks (c) 11,900 179
Time Warner Telecom, Inc. 621,000 34,776
Class A
WinStar Communications, Inc. 14,000 397
(a)
330,724
TOTAL UTILITIES 978,345
TOTAL COMMON STOCKS 14,745,527
(Cost $11,632,621)
CASH EQUIVALENTS - 1.4%
Central Cash Collateral Fund, 109,126,881 109,127
6.54% (b)
Taxable Central Cash Fund, 93,866,101 93,866
6.37% (b)
TOTAL CASH EQUIVALENTS 202,993
(Cost $202,993)
TOTAL INVESTMENT PORTFOLIO - 14,948,520
101.1%
(Cost $11,835,614)
NET OTHER ASSETS - (1.1)% (166,624)
NET ASSETS - 100% $ 14,781,896
</TABLE>
LEGEND
(a) Non-income producing
(b) The rate quoted is the annualized seven-day yield of the fund at
period end.
(c) Restricted securities - Investment in securities not registered
under the Securities Act of 1933.
Additional information on each holding is as follows:
SECURITY ACQUISITION DATE ACQUISITION COST (000S)
TeraBeam Networks 4/7/00 $ 179
Distribution of investments by country of issue, as a percentage of
total net assets, is as follows:
United States of America 88.0%
Japan 3.2
Canada 1.8
United Kingdom 1.3
Finland 1.0
Others (individually less 4.7
than 1%)
100.0%
INCOME TAX INFORMATION
At May 31, 2000, the aggregate cost of investment securities for
income tax purposes was $11,925,283,000. Net unrealized appreciation
aggregated $3,023,237,000, of which $4,043,208,000 related to
appreciated investment securities and $1,019,971,000 related to
depreciated investment securities.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AMOUNTS IN THOUSANDS
MAY 31, 2000 (UNAUDITED)
ASSETS
Investment in securities, at $ 14,948,520
value (cost $11,835,614) -
See accompanying schedule
Receivable for investments 81,993
sold
Receivable for fund shares 30,300
sold
Dividends receivable 7,377
Interest receivable 951
Other receivables 144
TOTAL ASSETS 15,069,285
LIABILITIES
Payable for investments $ 128,169
purchased
Payable for fund shares 33,043
redeemed
Accrued management fee 7,123
Distribution fees payable 6,613
Other payables and accrued 3,314
expenses
Collateral on securities 109,127
loaned, at value
TOTAL LIABILITIES 287,389
NET ASSETS $ 14,781,896
Net Assets consist of:
Paid in capital $ 10,935,191
Distributions in excess of (49,107)
net investment income
Accumulated undistributed net 782,921
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 3,112,891
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS $ 14,781,896
STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
AMOUNTS IN THOUSANDS (EXCEPT
PER-SHARE AMOUNTS)
MAY 31, 2000 (UNAUDITED)
CALCULATION OF MAXIMUM $67.89
OFFERING PRICE CLASS A: NET
ASSET VALUE and redemption
price per share ($606,595
(divided by) 8,935.5 shares)
Maximum offering price per $72.03
share (100/94.25 of $67.89)
CLASS T: NET ASSET VALUE and $68.75
redemption price per share
($9,652,015 (divided by)
140,388 shares)
Maximum offering price per $71.24
share (100/96.50 of $68.75)
CLASS B: NET ASSET VALUE and $66.80
offering price per share
($2,162,313 (divided by)
32,368 shares) A
CLASS C: NET ASSET VALUE and $67.69
offering price per share
($796,654 (divided by)
11,769 shares) A
INSTITUTIONAL CLASS: NET $70.26
ASSET VALUE, offering price
and redemption price per
share ($1,564,319 (divided
by) 22,265 shares)
REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGES.
STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS SIX
MONTHS ENDED MAY 31, 2000
(UNAUDITED)
INVESTMENT INCOME $ 37,848
Dividends
Interest 6,177
Security lending 557
TOTAL INCOME 44,582
EXPENSES
Management fee $ 41,080
Transfer agent fees 13,446
Distribution fees 37,419
Accounting and security 533
lending fees
Non-interested trustees' 36
compensation
Custodian fees and expenses 267
Registration fees 1,341
Audit 38
Legal 37
Miscellaneous 18
Total expenses before 94,215
reductions
Expense reductions (1,137) 93,078
NET INVESTMENT INCOME (LOSS) (48,496)
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 827,960
Foreign currency transactions 59 828,019
Change in net unrealized
appreciation (depreciation)
on:
Investment securities (141,009)
Assets and liabilities in (13) (141,022)
foreign currencies
NET GAIN (LOSS) 686,997
NET INCREASE (DECREASE) IN $ 638,501
NET ASSETS RESULTING FROM
OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
AMOUNTS IN THOUSANDS SIX MONTHS ENDED MAY 31, 2000 YEAR ENDED NOVEMBER 30, 1999
(UNAUDITED)
INCREASE (DECREASE) IN NET
ASSETS
Operations Net investment $ (48,496) $ (37,705)
income (loss)
Net realized gain (loss) 828,019 1,147,901
Change in net unrealized (141,022) 1,476,079
appreciation (depreciation)
NET INCREASE (DECREASE) IN 638,501 2,586,275
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (611) -
In excess of net investment
income
From net realized gain (945,723) (801,608)
TOTAL DISTRIBUTIONS (946,334) (801,608)
Share transactions - net 3,358,659 3,208,668
increase (decrease)
TOTAL INCREASE (DECREASE) 3,050,826 4,993,335
IN NET ASSETS
NET ASSETS
Beginning of period 11,731,070 6,737,735
End of period (including $ 14,781,896 $ 11,731,070
distributions in excess of
net investment income of
$49,107 and $0, respectively)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS A
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 1996 F
SELECTED PER-SHARE DATA
Net asset value, beginning $ 69.26 $ 58.14 $ 51.69 $ 44.80 $ 39.47
of period
Income from Investment
Operations
Net investment income (loss) (.16) (.14) (.13) (.06) .04
E
Net realized and unrealized 4.45 18.28 12.76 8.54 5.29
gain (loss)
Total from investment 4.29 18.14 12.63 8.48 5.33
operations
Less Distributions
From net investment income - - (.03) (.36) -
From net realized gain (5.66) (7.02) (6.15) (1.23) -
Total distributions (5.66) (7.02) (6.18) (1.59) -
Net asset value, end of $ 67.89 $ 69.26 $ 58.14 $ 51.69 $ 44.80
period
TOTAL RETURN B, C 6.35% 34.67% 28.21% 19.73% 13.50%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 607 $ 403 $ 92 $ 29 $ 4
(in millions)
Ratio of expenses to average 1.09% A 1.09% 1.12% 1.32% G 1.52% A, D, G
net assets
Ratio of expenses to average 1.08% A, H 1.08% H 1.10% H 1.30% H 1.50% A, H
net assets after expense
reductions
Ratio of net investment (.45)% A (.23)% (.26)% (.12)% .38% A
income (loss) to average
net assets
Portfolio turnover 103% A 82% 122% 108% 76%
</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 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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS T
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning $ 69.95 $ 58.59 $ 51.97 $ 44.81 $ 39.83 $ 28.52
of period
Income from Investment
Operations
Net investment income (loss) (.23) D (.27) D (.21) D (.04) D .22 D .06
Net realized and unrealized 4.50 18.49 12.87 8.60 6.90 11.54
gain (loss)
Total from investment 4.27 18.22 12.66 8.56 7.12 11.60
operations
Less Distributions
From net investment income - - - (.17) (.03) (.08)
From net realized gain (5.47) (6.86) (6.04) (1.23) (2.11) (.16)
In excess of net realized gain - - - - - (.05)
Total distributions (5.47) (6.86) (6.04) (1.40) (2.14) (.29)
Net asset value, end of period $ 68.75 $ 69.95 $ 58.59 $ 51.97 $ 44.81 $ 39.83
TOTAL RETURN B, C 6.24% 34.44% 28.00% 19.81% 19.00% 41.11%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 9,652 $ 8,047 $ 5,187 $ 4,206 $ 3,537 $ 2,051
(in millions)
Ratio of expenses to average 1.30% A 1.29% 1.29% 1.31% E 1.36% 1.55%
net assets
Ratio of expenses to average 1.28% A, F 1.28% F 1.27% F 1.29% F 1.34% F 1.54% F
net assets after expense
reductions
Ratio of net investment (.65)% A (.43)% (.41)% (.08)% .54% .21%
income (loss) to average net
assets
Portfolio turnover 103% A 82% 122% 108% 76% 97%
</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 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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS B
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 68.19 $ 57.50 $ 51.41 $ 41.81
period
Income from Investment
Operations
Net investment income (loss) D (.42) (.60) (.52) (.32)
Net realized and unrealized 4.39 18.08 12.68 9.95
gain (loss)
Total from investment 3.97 17.48 12.16 9.63
operations
Less Distributions
From net realized gain (5.36) (6.79) (6.07) (.03)
Net asset value, end of period $ 66.80 $ 68.19 $ 57.50 $ 51.41
TOTAL RETURN B, C 5.94% 33.69% 27.27% 23.05%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 2,162 $ 1,396 $ 307 $ 71
millions)
Ratio of expenses to average 1.86% A 1.85% 1.88% 1.93% A, F
net assets
Ratio of expenses to average 1.84% A, G 1.84% G 1.85% G 1.90% A, G
net assets after expense
reductions
Ratio of net investment (1.21)% A (.98)% (1.01)% (.73)% A
income (loss) to average net
assets
Portfolio turnover 103% A 82% 122% 108%
</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 (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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS C
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 69.07 $ 58.24 $ 51.95 $ 51.84
period
Income from Investment
Operations
Net investment income (loss) D (.41) (.60) (.54) (.02)
Net realized and unrealized 4.44 18.32 12.87 .13
gain (loss)
Total from investment 4.03 17.72 12.33 .11
operations
Less Distributions
From net realized gain (5.41) (6.89) (6.04) -
Net asset value, end of period $ 67.69 $ 69.07 $ 58.24 $ 51.95
TOTAL RETURN B, C 5.95% 33.72% 27.30% .21%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 797 $ 436 $ 64 $ 1
millions)
Ratio of expenses to average 1.83% A 1.82% 1.89% 1.95% A, F
net assets
Ratio of expenses to average 1.82% A, G 1.81% G 1.86% G 1.89% A, G
net assets after expense
reductions
Ratio of net investment (1.19)% A (.96)% (1.03)% (.82)% A
income (loss) to average net
assets
Portfolio turnover 103% A 82% 122% 108%
</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 (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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning $ 71.49 $ 59.71 $ 52.86 $ 45.52 $ 40.39 $ 28.90
of period
Income from Investment
Operations
Net investment income (loss) (.05) D .05 D .06 D .22 D .45 D .28
Net realized and unrealized 4.59 18.86 13.08 8.72 7.00 11.69
gain (loss)
Total from investment 4.54 18.91 13.14 8.94 7.45 11.97
operations
Less Distributions
From net investment income - - (.05) (.37) (.21) (.27)
In excess of net investment (.03) - - - - -
income
From net realized gain (5.74) (7.13) (6.24) (1.23) (2.11) (.16)
In excess of net realized gain - - - - - (.05)
Total distributions (5.77) (7.13) (6.29) (1.60) (2.32) (.48)
Net asset value, end of period $ 70.26 $ 71.49 $ 59.71 $ 52.86 $ 45.52 $ 40.39
TOTAL RETURN B, C 6.51% 35.16% 28.67% 20.46% 19.68% 42.15%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 1,564 $ 1,448 $ 1,088 $ 1,032 $ 1,324 $ 791
millions)
Ratio of expenses to average .78% A .78% .76% .77% .79% .83%
net assets
Ratio of expenses to average .76% A, E .77% E .74% E .75% E .77% E .83%
net assets after expense
reductions
Ratio of net investment (.13)% A .08% .12% .46% 1.11% .92%
income (loss) to average
net assets
Portfolio turnover 103% A 82% 122% 108% 76% 97%
</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 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.
NOTES TO FINANCIAL STATEMENTS
For the period ended May 31, 2000 (Unaudited)
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. 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. Foreign securities are valued based
on quotations from the principal market in which such securities are
normally traded. If trading or events occurring in other markets after
the close of the principal market in which foreign securities are
traded, and before the close of the business of the fund, are expected
to materially affect the value of those securities, then they are
valued at their fair value taking this trading or these events into
account. Fair value is determined in good faith under consistently
applied procedures under the general supervision of the Board of
Trustees. 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. 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.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
FOREIGN CURRENCY TRANSLATION - CONTINUED
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.
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, 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.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Distributions in excess of net investment income and accumulated
undistributed net realized gain (loss) on investments and foreign
currency transactions may include temporary book and tax basis
differences that will reverse in a subsequent period. Any taxable
income or gain remaining at fiscal year end is distributed in the
following year.
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 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, Federal Agency,
or other obligations found to be satisfactory by FMR 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.
CENTRAL CASH FUNDS. Pursuant to an Exemptive Order issued by the SEC,
the fund may invest in the Taxable Central Cash Fund and the Central
Cash Collateral Fund (the Cash Funds) managed by Fidelity Investments
Money Management, Inc., an affiliate of FMR. The Cash Funds are
open-end money market funds available only to investment companies and
other accounts managed by FMR and its affiliates. The Cash Funds seek
preservation of capital, liquidity, and current income. Income
distributions from the Cash Funds are declared daily and paid monthly
from net interest income. Income distributions earned by the fund are
recorded as either interest income or security lending income in the
accompanying financial statements.
2. OPERATING POLICIES - CONTINUED
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, restricted securities (excluding 144A
issues) amounted to $179,000 or 0% of net assets.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $9,722,507,000 and $7,171,693,000, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus a
fixed individual fund fee rate applied to the average net assets of
the fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds advised by FMR. The rates ranged from .2167% 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 annualized rate of .58% of average net
assets.
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the
1940 Act, the Board of Trustees have adopted separate Distribution and
Service 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.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
DISTRIBUTION AND SERVICE PLAN - CONTINUED
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 $ 677,000 $ 0
CLASS T 23,861,000 172,000
CLASS B 9,550,000 7,164,000
CLASS C 3,331,000 2,317,000
$ 37,419,000 $ 9,653,000
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 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 is 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 $ 2,127,000 $ 1,044,000
CLASS T 3,222,000 1,143,000
CLASS B 2,026,000 2,026,000 *
CLASS C 142,000 142,000 *
$ 7,517,000 $ 4,355,000
* 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 (collectively referred to
as the transfer 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 $ 615,000 .23 *
CLASS T 8,521,000 .18 *
CLASS B 2,254,000 .24 *
CLASS C 709,000 .21 *
INSTITUTIONAL CLASS 1,347,000 .17 *
$ 13,446,000
* ANNUALIZED
ACCOUNTING AND SECURITY LENDING FEES. Fidelity Service Company, Inc.,
an affiliate of FMR, maintains the fund's accounting records and
administers the security lending program. The security lending fee is
based on the number and duration of lending transactions. The
accounting fee is based on the level of average net assets for the
month plus out-of-pocket expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $310,000 for the
period.
5. SECURITY LENDING.
The fund lends portfolio securities from time to time in order to earn
additional income. The fund receives collateral in the form of U.S.
Treasury obligations, letters of credit, and/or cash against the
loaned securities, and maintains collateral in an amount not less than
100% of the market value of the loaned securities during the period of
the loan. The market value of the loaned securities is determined at
the close of business of the fund and any additional required
collateral is delivered to the fund on the next business day. If the
borrower defaults on its obligation to return the securities loaned
because of insolvency or other reasons, the fund could experience
delays and costs in recovering the securities
5. SECURITY LENDING - CONTINUED
loaned or in gaining access to the collateral. At period end, the
value of the securities loaned amounted to $98,423,000. The fund
received cash collateral of $109,127,000 which was invested in cash
equivalents, and U.S. Treasury obligations valued at $2,719,000. Cash
collateral includes $4,541,000 received for unsettled security loans.
6. 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 $1,081,000 under this arrangement.
In addition, through arrangements with the fund's custodian and each
class' transfer agent, 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 $49,000 under the custodian
arrangement, and each applicable class' expenses were reduced as
follows under the transfer agent arrangements:
TRANSFER AGENT CREDITS
CLASS A $ 5,000
INSTITUTIONAL CLASS 2,000
$ 7,000
7. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS SIX MONTHS ENDED MAY 31, 2000 YEAR ENDED NOVEMBER 30, 1999
IN EXCESS OF NET INVESTMENT
INCOME
Institutional Class $ 611 $ -
FROM NET REALIZED GAIN
Class A $ 34,484 $ 11,749
Class T 642,705 611,659
Class B 114,513 38,743
Class C 36,735 8,557
Institutional Class 117,286 130,900
Total $ 945,723 $ 801,608
$ 946,334 $ 801,608
</TABLE>
8. SHARE TRANSACTIONS.
Transactions for each class of shares for the periods were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
AMOUNTS IN THOUSANDS SHARES DOLLARS
SIX MONTHS ENDED MAY 31, YEAR ENDED NOVEMBER 30, SIX MONTHS ENDED MAY 31,
2000 1999 2000
CLASS A Shares sold 5,209 $ 274,509
3,862
Reinvestment of distributions 478 208 32,058
Shares redeemed (1,226) (1,170) (87,383)
Net increase (decrease) 3,114 4,247 $ 219,184
CLASS T Shares sold 36,022 46,663 $ 2,594,319
Reinvestment of distributions 8,956 10,473 608,732
Shares redeemed (19,639) (30,625) (1,414,630)
Net increase (decrease) 25,339 26,511 $ 1,788,421
CLASS B Shares sold 12,257 16,064 $ 857,298
Reinvestment of distributions 1,553 665 102,841
Shares redeemed (1,919) (1,585) (135,077)
Net increase (decrease) 11,891 15,144 $ 825,062
CLASS C Shares sold 6,013 7,096 $ 426,614
Reinvestment of distributions 454 141 30,440
Shares redeemed (1,017) (2,021) (72,116)
Net increase (decrease) 5,450 5,216 $ 384,938
INSTITUTIONAL CLASS Shares 4,594 6,381 $ 335,816
sold
Reinvestment of distributions 1,366 1,855 94,633
Shares redeemed (3,946) (6,204) (289,395)
Net increase (decrease) 2,014 2,032 $ 141,054
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
DOLLARS
YEAR ENDED NOVEMBER 30,
1999
CLASS A Shares sold $ 322,503
Reinvestment of distributions 11,343
Shares redeemed (74,185)
Net increase (decrease) $ 259,661
CLASS T Shares sold $ 2,907,843
Reinvestment of distributions 576,282
Shares redeemed (1,896,299)
Net increase (decrease) $ 1,587,826
CLASS B Shares sold $ 981,876
Reinvestment of distributions 35,866
Shares redeemed (97,048)
Net increase (decrease) $ 920,694
CLASS C Shares sold $ 441,106
Reinvestment of distributions 7,730
Shares redeemed (125,985)
Net increase (decrease) $ 322,851
INSTITUTIONAL CLASS Shares $ 402,507
sold
Reinvestment of distributions 103,777
Shares redeemed (388,648)
Net increase (decrease) $ 117,636
</TABLE>
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research
(U.K.) Inc.
Fidelity Management & Research
(Far East) Inc.
Fidelity Investments Japan Ltd.
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
Robert A. Dwight, Treasurer
Maria F. Dwyer, Deputy Treasurer
John H. Costello, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
Donald J. Kirk *
Ned C. Lautenbach *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
* INDEPENDENT TRUSTEES
ADVISORY BOARD
J. Michael Cook
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 Telecommunications & Utilities Growth Fund
GROWTH FUNDS
Fidelity Advisor Latin America Fund
Fidelity Advisor Emerging Asia 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 (registered trademark)
Growth Fund
Fidelity Advisor Small Cap Fund
Fidelity Advisor Value Strategies Fund
Fidelity Advisor Mid Cap Fund
Fidelity Advisor Dynamic Capital Appreciation Fund
Fidelity Advisor Equity Growth Fund
Fidelity Advisor Large Cap Fund
Fidelity Advisor Dividend Growth Fund
Fidelity Advisor Growth
Opportunities Fund
EPG-SANN-0700 106220
1.704747.102
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 High Income 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
MONEY MARKET FUNDS
Prime Fund
Treasury Fund
Tax-Exempt Fund
(2_FIDELITY_LOGOS)(registered trademark)
FIDELITY(REGISTERED TRADEMARK) ADVISOR
EQUITY GROWTH
FUND - INSTITUTIONAL CLASS
SEMIANNUAL REPORT
MAY 31, 2000
(2_FIDELITY_LOGOS)(registered trademark)
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 21 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 30 Notes to the financial
statements.
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 technology sell-off that began in mid-March continued to hamper
equity markets, driving the tech-heavy NASDAQ index down more than 16%
year to date through the end of May. Broader equity indexes, including
the S&P 500(registered trademark), also were down, but not as much as
more concentrated performance measures. In bond markets, Treasuries
got a boost late in the period as economic reports showed the first
signs of a slowing economy.
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 an investment in a money market fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although money market funds seek to preserve the
value of your investment at $1.00 per share, it is possible to lose
money by investing in these types of funds.
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).
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY (REGISTERED 6.51% 23.57% 226.54% 656.64%
TRADEMARK) ADV EQUITY GROWTH
- INST CL
Russell 3000 (registered 6.89% 24.62% 224.30% 455.28%
trademark) Growth
Growth Funds Average 7.32% 20.08% 172.00% 349.50%
</TABLE>
CUMULATIVE TOTAL RETURNS show Institutional Class' performance in
percentage terms over a set period - in this case, six months, 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 Russell 3000 Growth Index - a market
capitalization-weighted index of U.S. domiciled growth-oriented
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 Inc. The past six months average represents a peer
group of 1,387 mutual funds. These benchmarks include reinvested
dividends and capital gains, if any, and exclude the effect of sales
charges. Lipper has created new comparison categories that group funds
according to portfolio characteristics and capitalization, as well as
by capitalization only. These averages are listed on page 5 of this
report.*
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY ADV EQUITY GROWTH - 23.57% 26.70% 22.43%
INST CL
Russell 3000 Growth 24.62% 26.53% 18.70%
Growth Funds Average 20.08% 21.60% 15.77%
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 Russell 3000 Growth
00086 RS007
1990/05/31 10000.00 10000.00
1990/06/30 10086.01 10104.62
1990/07/31 9799.31 9991.10
1990/08/31 8549.31 9005.86
1990/09/30 7844.04 8500.74
1990/10/31 7941.51 8508.27
1990/11/30 8916.28 9091.64
1990/12/31 9552.75 9418.68
1991/01/31 10940.37 9921.24
1991/02/28 11926.61 10727.54
1991/03/31 13096.33 11168.45
1991/04/30 13050.46 11111.61
1991/05/31 13732.80 11609.36
1991/06/30 12591.74 11045.00
1991/07/31 13612.39 11632.48
1991/08/31 14346.33 12027.50
1991/09/30 14380.73 11839.83
1991/10/31 14420.87 12042.40
1991/11/30 13922.02 11716.55
1991/12/31 15734.11 13342.01
1992/01/31 16174.69 13095.61
1992/02/29 16257.83 13123.01
1992/03/31 15490.35 12739.97
1992/04/30 15170.56 12781.58
1992/05/31 15100.21 12868.57
1992/06/30 14601.35 12516.69
1992/07/31 15113.00 13066.85
1992/08/31 14748.45 12885.35
1992/09/30 15023.46 13047.84
1992/10/31 15816.53 13264.96
1992/11/30 16865.42 13884.28
1992/12/31 17329.19 14038.73
1993/01/31 17813.66 13900.72
1993/02/28 17362.27 13643.20
1993/03/31 17911.79 13912.02
1993/04/30 17623.95 13363.41
1993/05/31 18657.57 13854.66
1993/06/30 18736.08 13739.08
1993/07/31 18422.06 13524.54
1993/08/31 19108.96 14086.68
1993/09/30 19684.65 14029.66
1993/10/31 19933.25 14421.25
1993/11/30 19455.69 14282.56
1993/12/31 20051.44 14557.21
1994/01/31 20774.94 14898.12
1994/02/28 20609.40 14645.22
1994/03/31 19774.82 13919.90
1994/04/30 20002.43 13982.06
1994/05/31 19892.08 14146.26
1994/06/30 19029.90 13712.20
1994/07/31 19450.64 14154.31
1994/08/31 20340.41 14967.47
1994/09/30 19933.46 14789.22
1994/10/31 20595.61 15119.00
1994/11/30 19933.46 14622.96
1994/12/31 20042.82 14877.92
1995/01/31 19874.45 15132.87
1995/02/28 20653.15 15773.43
1995/03/31 21445.89 16234.89
1995/04/30 22378.93 16579.06
1995/05/31 23171.66 17122.70
1995/06/30 24946.54 17833.12
1995/07/31 26819.63 18639.77
1995/08/31 27107.26 18682.07
1995/09/30 27885.96 19492.83
1995/10/31 27759.69 19405.50
1995/11/30 28334.95 20169.86
1995/12/31 28083.27 20318.48
1996/01/31 28756.15 20912.47
1996/02/29 29411.73 21350.64
1996/03/31 29627.77 21417.07
1996/04/30 30529.19 22090.17
1996/05/31 31363.57 22900.41
1996/06/30 30976.18 22767.37
1996/07/31 29106.29 21283.69
1996/08/31 29799.11 21933.50
1996/09/30 31818.00 23482.76
1996/10/31 31989.35 23508.10
1996/11/30 33911.39 25165.23
1996/12/31 32827.45 24764.73
1997/01/31 34813.31 26392.76
1997/02/28 34032.82 26081.64
1997/03/31 32154.98 24632.02
1997/04/30 33808.71 26100.02
1997/05/31 36219.76 28148.94
1997/06/30 37718.93 29260.51
1997/07/31 40601.37 31744.24
1997/08/31 39017.19 30147.51
1997/09/30 41265.95 31725.59
1997/10/31 39674.04 30475.70
1997/11/30 40848.65 31561.60
1997/12/31 40906.87 31882.20
1998/01/31 41442.49 32702.48
1998/02/28 44611.42 35201.51
1998/03/31 46169.47 36611.58
1998/04/30 47058.53 37091.73
1998/05/31 45852.58 35886.32
1998/06/30 48748.63 37919.97
1998/07/31 49743.32 37410.41
1998/08/31 41627.35 31548.12
1998/09/30 45905.40 34030.30
1998/10/31 49127.14 36690.05
1998/11/30 52560.14 39484.99
1998/12/31 57054.33 43046.14
1999/01/31 61687.51 45529.86
1999/02/28 58656.79 43296.54
1999/03/31 61876.30 45524.73
1999/04/30 62084.98 45856.63
1999/05/31 61230.41 44557.17
1999/06/30 65185.25 47619.45
1999/07/31 64300.88 46108.20
1999/08/31 64658.60 46681.56
1999/09/30 63376.76 45827.88
1999/10/31 67063.30 49128.87
1999/11/30 71038.01 51948.39
1999/12/31 78148.62 57606.83
2000/01/31 75868.89 55060.78
2000/02/29 81307.33 58500.59
2000/03/31 84871.92 61809.09
2000/04/30 80015.02 58629.57
2000/05/31 75664.27 55528.30
IMATRL PRASUN SHR__CHT 20000531 20000622 120747 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Equity Growth Fund - Institutional Class
on May 31, 1990. As the chart shows, by May 31, 2000, the value of the
investment would have grown to $75,664 - a 656.64% increase on the
initial investment. For comparison, look at how the Russell 3000
Growth Index did over the same period. With dividends and capital
gains, if any, reinvested, the same $10,000 investment would have
grown to $55,528 - a 455.28% increase.
(checkmark)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.
* THE LIPPER MULTI-CAP GROWTH FUNDS AVERAGE REFLECTS THE PERFORMANCE
(EXCLUDING SALES CHARGES) OF MUTUAL FUNDS WITH SIMILAR PORTFOLIO
CHARACTERISTICS AND CAPITALIZATION. AS OF MAY 31, 2000, THE SIX MONTH,
ONE YEAR, FIVE YEAR AND 10 YEAR CUMULATIVE TOTAL RETURNS FOR THE
MULTI-CAP GROWTH FUNDS AVERAGE WERE, 13.01%, 40.45%, 214.24% AND
426.94%, RESPECTIVELY. THE ONE YEAR, FIVE YEAR AND 10 YEAR AVERAGE
ANNUAL TOTAL RETURNS FOR THE MULTI-CAP GROWTH FUNDS AVERAGE WERE,
40.45%, 25.26% AND 17.71%, RESPECTIVELY.
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
U.S. equity investors faced a steadily
declining market during the latter
part of the six-month period that
ended May 31, 2000, after
experiencing continued growth the
prior three months. Two chief
catalysts - a tightening of monetary
policy by the Federal Reserve Board
and the bursting of a speculative
bubble in technology stocks -
sparked a sustained pullback among
the major U.S. equity indexes that
began in March. The tech-heavy
NASDAQ Composite Index reached
a high of 5048 on March 10 before
quickly retreating below the 4000
level. The NASDAQ dropped to
3401 on the final day of the period,
gaining a modest 2.05% return for
the six-month period. The Standard
& Poor's 500SM Index - an index
of 500 widely held stocks - fared
slightly better in returning 2.90%.
Another index of well-established
stocks - the blue chips' Dow Jones
Industrial Average - surged higher
during the NASDAQ's sharp
plummet in April, but the brief rally
wasn't enough to significantly offset
earlier losses, and the Dow returned
-2.55% for the period. The Russell
2000(Registered trademark) Index - a barometer of
small-cap stocks - outperformed the
major indexes of larger companies
with a 5.50% return. As the period
drew to a close, weaker trading
volume suggested investors were
mixed about the direction of U.S.
stocks, and whether the three
interest-rate hikes levied by the
Fed during the period had begun
to cool off the overheated economy.
(photograph of Jennifer Uhrig)
An interview with Jennifer Uhrig, Portfolio Manager of Fidelity
Advisor Equity Growth Fund
Q. HOW DID THE FUND PERFORM, JENNIFER?
A. For the six months that ended May 31, 2000, the fund's
Institutional Class shares returned 6.51%. The Russell 3000 Growth
Index returned 6.89% during this time, while the growth funds average
- as tracked by Lipper Inc. - returned 7.32%. For the 12 months that
ended May 31, 2000, the fund's Institutional Class shares returned
23.57%. The Russell index and Lipper average returned 24.62% and
20.08%, respectively.
Q. THE BIG STORY DURING THE PERIOD WAS THE VOLATILITY WE WITNESSED
WITHIN THE TECHNOLOGY SECTOR. HOW DID THIS CHOPPINESS AFFECT THE FUND?
A. Technology stocks performed well during the first half of the
period, but succumbed to investor fears during the second as high
valuations felt the effects of higher interest rates and the group
suffered a significant downturn. The fund was underweighted in
technology relative to the Russell index, but nonetheless had
approximately 43% of its net assets in the sector with an emphasis on
smaller-cap tech names. Unfortunately, these types of stocks were hit
particularly hard. On the plus side, the fund's investments in
communications equipment providers such as Nokia and Ericsson helped.
These stocks tend to trade in line with technology, so their solid
performance during the period was a pleasant surprise.
Q. DESPITE THE VOLATILITY, SOME OF THE FUND'S BIGGER-CAP TECHNOLOGY
NAMES CONTRIBUTED POSITIVELY TO PERFORMANCE . . .
A. The fund's stakes in market leaders such as Cisco Systems, EMC
Corp. and Intel generated good results. Cisco - the main player in the
Internet infrastructure area - experienced accelerating earnings and
revenue growth in spite of Y2K concerns. EMC - which specializes in
data storage - also enjoyed accelerating growth, and Intel benefited
from a shortage of high-end microprocessors. Microsoft, on the other
hand, was a notable laggard among the big-caps during the period,
partly due to the ongoing federal government case, but also because
the company's applications business slowed. Microsoft also was in the
process of implementing a new Internet strategy, and its success is
yet to be proven.
Q. WHAT OTHER TYPES OF STOCKS CONTRIBUTED POSITIVELY?
A. The fund's holdings in the oil services sector, such as Baker
Hughes, Halliburton and Smith International, did well. Oil prices were
at high levels, which made the return on exploration quite attractive.
In addition, we've seen lower levels of exploration in recent years,
meaning that activity will need to pick up in order to meet production
estimates. These companies - which sell the equipment used to drill
for oil - were in a solid position to benefit from this environment.
Also, the fund's underweighting in consumer nondurables positions -
relative to the index - worked out well.
Q. AT JUST OVER 14%, HEALTH STOCKS OCCUPIED THE SECOND-LARGEST SLOT -
AFTER TECHNOLOGY - IN THE PORTFOLIO. HOW DID THE FUND'S HEALTH-RELATED
INVESTMENTS PERFORM?
A. It was a mixed bag. The fund's drug stocks performed well as the
economy began to slow, but its biotechnology investments -
particularly those involved in genomics - fell in sympathy with
technology stocks. Drug stocks Eli Lilly - which had eight drugs in
late-stage development - and Warner-Lambert were among the fund's top
performers. Bristol-Myers Squibb, though, was a notable detractor as
the company suffered when its promising blood pressure drug Vanlev was
unexpectedly recalled for further study just 10 days before it was
expected to hit the market. In terms of biotech, the fund's stakes in
Millennium Pharmaceuticals and Genentech hurt performance.
Q. WHAT'S YOUR OUTLOOK?
A. Technology has been the key market driver, and the sector has been
very volatile. Performance has bounced around depending on whether
tech stocks have had a good week or a bad week. Earnings growth
continues to be strong for technology, so the sector could do well if
the economy slows and interest rates stabilize. Outside of technology,
the key economic question is whether we're in for a soft landing - in
which the economy slows, but in a gradual fashion - or a hard landing
- which could translate into a recession. Obviously, a soft landing
would be better. More stocks outside of technology could participate,
and economically sensitive stocks would stand a chance. If we see a
hard landing, I may look to add to the fund's consumer nondurables
positions or the drug stocks, both of which tend to perform well
going into a recession.
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 AND DO NOT NECESSARILY REPRESENT THE VIEWS OF FIDELITY OR
ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH VIEWS ARE
SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER CONDITIONS
AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE
VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE
INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS
FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY FIDELITY FUND.
(checkmark)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 May 31, 2000,
more than $14.7 billion
MANAGER: Jennifer Uhrig,
since 1997; joined Fidelity
in 1987
JENNIFER UHRIG ON
WIRELESS TECHNOLOGY:
"Cell phone usage has been a key
driver of wireless technology. So far,
cell phones have been used almost
exclusively for voice calls. Soon,
though, they'll be able to do much
more than that. You'll be able to
use your phone to get e-mail, your
calendar, account balances, sports
scores, the local weather, etc. And
we're just scratching the surface. In
some parts of Europe, you can point
your phone at a soda machine and
order a Coke. This greater utility
will stimulate new users and also
encourage existing users to replace
their phones.
"I've played the wireless trend a few
ways. First, I've been attracted to
companies such as Lucent
Technologies, Ericsson and
Motorola that make the
equipment to support wireless
networks. The fund also has stakes
in companies that supply
components that go into wireless
devices. A good example is Texas
Instruments, which makes digital
signal processors that go into cell
phones. Texas Instruments was one
of the fund's better performers
during the period. Finally, the fund
owns a number of service providers
that actually sign the customers up
and provide service. Names in this
area would include Vodafone
AirTouch, China Telecom, and
VoiceStream.
"Over the past year, subscriber
growth rates have risen
dramatically, which is a plus for
all three areas of investment. As the
capabilities increase, cell phones
may well become hand-held PCs. I'll
try to make sure the fund is
well-positioned as wireless
expands."
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF MAY 31,
2000
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Intel Corp. 4.5 1.8
Cisco Systems, Inc. 4.4 3.5
General Electric Co. 2.9 1.9
Warner-Lambert Co. 2.8 2.2
Texas Instruments, Inc. 2.2 1.3
Eli Lilly & Co. 2.0 2.0
Bristol-Myers Squibb Co. 1.6 1.7
International Business 1.6 0.9
Machines Corp.
EMC Corp. 1.5 1.3
Dell Computer Corp. 1.5 0.5
25.0 17.1
TOP FIVE MARKET SECTORS AS OF
MAY 31, 2000
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Technology 43.1 32.7
Health 14.2 14.8
Finance 9.2 9.7
Media & Leisure 7.6 10.0
Utilities 6.6 7.8
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
ASSET ALLOCATION (% OF FUND'S
NET ASSETS)
AS OF MAY 31, 2000 * AS OF NOVEMBER 30, 1999 **
Stocks 99.7% Stocks 98.1%
Short-Term Investments and Short-Term Investments and
Net Other Assets 0.3% Net Other Assets 1.9%
* FOREIGN INVESTMENTS 12.0% ** FOREIGN INVESTMENTS 10.7%
Row: 1, Col: 1, Value: 99.7 Row: 1, Col: 1, Value: 98.09999999999999
Row: 1, Col: 2, Value: 0.0 Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 0.0 Row: 1, Col: 3, Value: 0.0
Row: 1, Col: 4, Value: 0.0 Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: 0.0 Row: 1, Col: 5, Value: 0.0
Row: 1, Col: 6, Value: 0.0 Row: 1, Col: 6, Value: 0.0
Row: 1, Col: 7, Value: 0.0 Row: 1, Col: 7, Value: 0.0
Row: 1, Col: 8, Value: 0.3 Row: 1, Col: 8, Value: 1.9
</TABLE>
INVESTMENTS MAY 31, 2000 (UNAUDITED)
Showing Percentage of Net Assets
<TABLE>
<CAPTION>
<S> <C> <C> <C>
COMMON STOCKS - 99.7%
SHARES VALUE (NOTE 1) (000S)
AEROSPACE & DEFENSE - 0.7%
BFGoodrich Co. 253,600 $ 9,003
Boeing Co. 1,458,320 56,966
United Technologies Corp. 656,000 39,647
105,616
BASIC INDUSTRIES - 0.9%
CHEMICALS & PLASTICS - 0.2%
Cytec Industries, Inc. (a) 708,700 19,223
Lyondell Chemical Co. 1,103,790 18,419
37,642
METALS & MINING - 0.5%
CommScope, Inc. (a) 1,010,200 39,019
Falconbridge Ltd. 640,300 9,199
Inco Ltd. (a) 1,118,600 17,939
Martin Marietta Materials, 114,800 5,618
Inc.
71,775
PACKAGING & CONTAINERS - 0.2%
Owens-Illinois, Inc. (a) 2,621,600 29,493
TOTAL BASIC INDUSTRIES 138,910
CONSTRUCTION & REAL ESTATE -
0.2%
BUILDING MATERIALS - 0.1%
Vulcan Materials Co. 279,400 13,062
ENGINEERING - 0.1%
Fluor Corp. 25,000 813
Stolt Offshore SA (a) 886,000 13,069
Stolt Offshore SA Class A 159,000 2,067
sponsored ADR (a)
15,949
TOTAL CONSTRUCTION & REAL 29,011
ESTATE
DURABLES - 0.7%
CONSUMER ELECTRONICS - 0.6%
Gemstar International Group 518,800 22,017
Ltd. (a)
Pioneer Corp. 152,000 4,640
Sanyo Electric Co. Ltd. 656,000 4,845
Sony Corp. 668,100 60,922
92,424
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
DURABLES - CONTINUED
TEXTILES & APPAREL - 0.1%
Shaw Industries, Inc. 834,100 $ 11,625
TOTAL DURABLES 104,049
ENERGY - 3.8%
ENERGY SERVICES - 2.6%
Baker Hughes, Inc. 2,419,730 87,715
BJ Services Co. (a) 682,400 48,877
Coflexip SA sponsored ADR 740,800 43,152
Halliburton Co. 1,970,800 100,511
Smith International, Inc. (a) 688,100 54,403
Weatherford International, 1,052,200 45,310
Inc.
379,968
OIL & GAS - 1.2%
Apache Corp. 541,900 32,988
Burlington Resources, Inc. 539,700 24,691
Grant Prideco, Inc. (a) 1,060,300 24,652
Newfield Exploration Co. (a) 1,114,100 46,653
Noble Affiliates, Inc. 1,145,000 45,013
Vastar Resources, Inc. 93,300 7,598
181,595
TOTAL ENERGY 561,563
FINANCE - 9.2%
BANKS - 1.1%
Bank One Corp. 4,209,200 139,167
Chuo Mitsui Trust & Banking 2,779,000 11,164
Co. Ltd.
Sumitomo Trust & Banking Ltd. 1,980,000 14,311
164,642
CREDIT & OTHER FINANCE - 1.3%
American Express Co. 1,836,412 98,822
Associates First Capital 2,544,300 69,809
Corp. Class A
Citigroup, Inc. 399,600 24,850
193,481
FEDERAL SPONSORED CREDIT - 1.6%
Fannie Mae 2,853,500 171,567
Freddie Mac 1,571,400 69,927
241,494
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
FINANCE - CONTINUED
INSURANCE - 3.6%
Ace Ltd. 1,689,100 $ 45,289
AFLAC, Inc. 703,400 36,357
Allmerica Financial Corp. 515,700 29,749
AMBAC Financial Group, Inc. 347,400 17,500
American International Group, 1,344,412 151,330
Inc.
Everest Re Group Ltd. 951,900 32,365
Marsh & McLennan Companies, 566,400 62,339
Inc.
The Chubb Corp. 838,700 58,709
XL Capital Ltd. Class A 1,533,800 91,261
524,899
SECURITIES INDUSTRY - 1.6%
Charles Schwab Corp. 2,548,200 73,261
Daiwa Securities Group, Inc. 4,256,000 51,729
Nikko Securities Co. Ltd. 4,489,000 41,566
Nomura Securities Co. Ltd. 3,061,000 70,149
236,705
TOTAL FINANCE 1,361,221
HEALTH - 14.2%
DRUGS & PHARMACEUTICALS - 12.5%
Abgenix, Inc. (a) 581,300 45,923
Alkermes, Inc. (a) 995,100 36,446
American Home Products Corp. 1,074,600 57,894
Bristol-Myers Squibb Co. 4,371,800 240,722
Cambridge Antibody Technology 260,255 9,003
Group PLC (a)
Elan Corp. PLC sponsored ADR 2,234,380 88,956
(a)
Eli Lilly & Co. 3,800,400 289,305
Exelixis, Inc. 548,300 13,296
Genentech, Inc. 678,900 72,897
Human Genome Sciences, Inc. 541,000 47,473
(a)
Medarex, Inc. (a) 669,200 30,449
Merck & Co., Inc. 1,914,100 142,840
Millennium Pharmaceuticals, 1,104,200 92,339
Inc. (a)
Pfizer, Inc. 2,824,400 125,862
Protein Design Labs, Inc. (a) 112,200 11,963
Schering-Plough Corp. 2,843,300 137,545
Warner-Lambert Co. 3,339,500 407,836
1,850,749
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
HEALTH - CONTINUED
MEDICAL EQUIPMENT & SUPPLIES
- 1.3%
Cardinal Health, Inc. 1,387,800 $ 90,034
Guidant Corp. (a) 511,400 25,890
Johnson & Johnson 468,000 41,886
Medtronic, Inc. 685,100 35,368
193,178
MEDICAL FACILITIES MANAGEMENT
- 0.4%
HCA- The Healthcare Co. 1,483,900 40,065
Health Management Associates, 392,875 4,641
Inc. Class A (a)
HEALTHSOUTH Corp. (a) 1,813,800 11,676
56,382
TOTAL HEALTH 2,100,309
HOLDING COMPANIES - 0.2%
PartnerRe Ltd. 933,900 34,671
INDUSTRIAL MACHINERY &
EQUIPMENT - 3.1%
ELECTRICAL EQUIPMENT - 2.9%
General Electric Co. 8,146,700 428,720
INDUSTRIAL MACHINERY &
EQUIPMENT - 0.2%
ASM Lithography Holding NV (a) 1,002,900 35,666
TOTAL INDUSTRIAL MACHINERY & 464,386
EQUIPMENT
MEDIA & LEISURE - 7.6%
BROADCASTING - 4.6%
AT&T Corp. - Liberty Media 951,760 42,175
Group Class A (a)
Cablevision Systems Corp. 139,200 8,717
Class A (a)
Clear Channel Communications, 950,500 71,169
Inc. (a)
Comcast Corp. Class A 1,619,100 61,323
(special) (a)
Cox Communications, Inc. 1,181,000 52,112
Class A (a)
EchoStar Communications Corp. 1,082,000 43,212
Class A (a)
Mediacom Communications Corp. 918,500 7,362
Class A
MediaOne Group, Inc. (a) 1,932,100 129,088
NTL, Inc. (a) 516,750 30,521
Time Warner, Inc. 2,054,098 162,145
UnitedGlobalCom, Inc. Class A 740,600 35,549
(a)
USA Networks, Inc. (a) 2,016,000 38,178
681,551
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
MEDIA & LEISURE - CONTINUED
ENTERTAINMENT - 0.7%
Viacom, Inc. Class B 1,396,290 $ 86,570
(non-vtg.) (a)
Walt Disney Co. 222,100 9,370
95,940
LEISURE DURABLES & TOYS - 0.3%
Harley-Davidson, Inc. 1,120,200 41,727
RESTAURANTS - 2.0%
Brinker International, Inc. 1,575,700 44,612
(a)
Darden Restaurants, Inc. 2,343,900 40,286
McDonald's Corp. 3,109,900 111,373
Outback Steakhouse, Inc. (a) 1,620,700 49,127
Tricon Global Restaurants, 1,249,080 36,614
Inc. (a)
Wendy's International, Inc. 713,100 13,950
295,962
TOTAL MEDIA & LEISURE 1,115,180
NONDURABLES - 3.4%
BEVERAGES - 1.3%
Coca-Cola Enterprises, Inc. 1,731,600 29,654
Pepsi Bottling Group, Inc. 1,736,600 45,369
The Coca-Cola Co. 2,143,900 114,431
189,454
FOODS - 0.4%
American Italian Pasta Co. 512,200 12,581
Class A (a)
Keebler Foods Co. 1,206,400 43,732
56,313
HOUSEHOLD PRODUCTS - 0.4%
Clorox Co. 1,426,800 56,537
TOBACCO - 1.3%
Philip Morris Companies, Inc. 7,353,600 192,113
TOTAL NONDURABLES 494,417
PRECIOUS METALS - 0.5%
Barrick Gold Corp. 1,144,200 20,950
Homestake Mining Co. 1,794,700 12,114
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
PRECIOUS METALS - CONTINUED
Newmont Mining Corp. 1,165,600 $ 26,882
Placer Dome, Inc. 1,137,900 9,353
69,299
RETAIL & WHOLESALE - 4.4%
DRUG STORES - 0.4%
Walgreen Co. 1,858,700 52,741
GENERAL MERCHANDISE STORES -
1.5%
Kohls Corp. (a) 966,300 50,006
Wal-Mart Stores, Inc. 2,997,200 172,714
222,720
GROCERY STORES - 0.4%
Safeway, Inc. (a) 1,368,500 63,122
RETAIL & WHOLESALE,
MISCELLANEOUS - 2.1%
Best Buy Co., Inc. (a) 1,319,900 84,474
Home Depot, Inc. 3,868,400 188,826
Tiffany & Co., Inc. 699,500 42,626
315,926
TOTAL RETAIL & WHOLESALE 654,509
SERVICES - 0.3%
ADVERTISING - 0.2%
TMP Worldwide, Inc. (a) 420,500 23,233
SERVICES - 0.1%
Media Metrix, Inc. 273,000 7,610
Register.com, Inc. 240,900 9,395
17,005
TOTAL SERVICES 40,238
TECHNOLOGY - 43.1%
COMMUNICATIONS EQUIPMENT -
10.8%
ADC Telecommunications, Inc. 1,258,800 84,576
(a)
Advanced Fibre 450,000 20,700
Communications, Inc. (a)
Aspect Communications Corp. 533,700 21,415
(a)
Ciena Corp. (a) 449,400 53,788
Cisco Systems, Inc. (a) 11,432,700 650,949
Comverse Technology, Inc. (a) 559,200 51,097
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
TECHNOLOGY - CONTINUED
COMMUNICATIONS EQUIPMENT -
CONTINUED
Corning, Inc. 567,200 $ 109,718
Ditech Communications Corp. 302,600 24,813
Lucent Technologies, Inc. 3,730,792 214,054
Nokia AB sponsored ADR 2,731,700 142,048
Nortel Networks Corp. 2,768,800 147,552
Oni Systems Corp. 8,000 200
Telefonaktiebolaget LM 3,537,400 72,517
Ericsson sponsored ADR
1,593,427
COMPUTER SERVICES & SOFTWARE
- 8.7%
Adobe Systems, Inc. 456,200 51,351
Affymetrix, Inc. (a) 259,400 30,804
Art Technology Group, Inc. 453,000 26,585
Automatic Data Processing, 1,107,500 60,843
Inc.
BEA Systems, Inc. (a) 1,191,200 43,032
BroadVision, Inc. (a) 1,157,600 41,457
Citrix Systems, Inc. (a) 1,404,800 73,928
Concentric Network Corp. (a) 593,400 26,555
Digex, Inc. Class A 982,200 41,498
Electronic Arts, Inc. (a) 783,300 50,033
Electronic Data Systems Corp. 1,191,000 76,596
Electronics for Imaging, Inc. 1,004,200 36,967
(a)
Healtheon/Web Maryland Corp. 829,400 12,130
(a)
Inktomi Corp. (a) 413,154 46,118
Intertrust Technologies Corp. 801,100 14,220
Intuit, Inc. (a) 2,223,200 80,591
Mercury Interactive Corp. (a) 405,100 34,332
Microsoft Corp. (a) 2,834,400 177,327
Network Solutions, Inc. Class 57,500 8,499
A (a)
Nuance Communications, Inc. 175,100 6,916
Oracle Corp. (a) 1,711,500 123,014
PeopleSoft, Inc. (a) 675,500 9,330
Priceline.com, Inc. (a) 587,400 22,395
Razorfish, Inc. Class A 418,200 6,534
Software.com, Inc. 205,300 17,297
Trans Cosmos, Inc. 122,700 17,873
Usinternetworking, Inc. (a) 457,800 8,212
VeriSign, Inc. (a) 325,900 44,119
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
TECHNOLOGY - CONTINUED
COMPUTER SERVICES & SOFTWARE
- CONTINUED
VERITAS Software Corp. (a) 744,100 $ 86,688
Vignette Corp. (a) 235,800 6,499
1,281,743
COMPUTERS & OFFICE EQUIPMENT
- 9.6%
Brocade Communications 422,100 49,781
Systems, Inc.
CDW Computer Centers, Inc. (a) 675,300 79,000
Compaq Computer Corp. 1,887,900 49,557
Dell Computer Corp. (a) 4,975,900 214,586
EMC Corp. (a) 1,928,682 224,330
Gateway, Inc. (a) 806,700 39,932
Hewlett-Packard Co. 1,370,400 164,619
International Business 2,119,700 227,470
Machines Corp.
Lexmark International Group, 460,300 32,106
Inc. Class A (a)
MRV Communications, Inc. (a) 1,762,000 46,913
Pitney Bowes, Inc. 755,000 32,843
SCI Systems, Inc. (a) 1,224,300 55,094
Softbank Corp. 117,600 18,003
Softbank Corp. New 225,400 33,774
Sun Microsystems, Inc. (a) 1,906,000 146,047
1,414,055
ELECTRONIC INSTRUMENTS - 0.8%
Agilent Technologies, Inc. 835,100 61,484
Applied Materials, Inc. (a) 675,900 56,438
Varian, Inc. (a) 277,400 9,796
127,718
ELECTRONICS - 13.2%
Advanced Micro Devices, Inc. 1,023,400 83,343
(a)
Bookham Technology PLC 98,800 4,810
sponsored ADR
Broadcom Corp. Class A (a) 316,000 41,100
Celestica, Inc. (sub. vtg.) 537,100 25,052
(a)
Chartered Semiconductor 897,400 72,016
Manufacturing Ltd. ADR
Intel Corp. 5,366,400 669,118
JDS Uniphase Corp. (a) 1,070,100 94,169
Kyocera Corp. 280,500 46,020
Linear Technology Corp. 314,000 18,546
LSI Logic Corp. (a) 1,121,700 59,100
Micron Technology, Inc. (a) 1,632,600 114,180
Mitsubishi Electric Corp. 7,536,000 73,976
Motorola, Inc. 1,117,900 104,803
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
TECHNOLOGY - CONTINUED
ELECTRONICS - CONTINUED
PMC-Sierra, Inc. (a) 232,200 $ 35,585
Samsung Electronics Co. Ltd. 135,690 37,001
Sanmina Corp. (a) 807,800 51,396
Taiwan Semiconductor 1,435,670 50,697
Manufacturing Co. Ltd.
sponsored ADR (a)
Texas Instruments, Inc. 4,515,300 326,230
Xilinx, Inc. (a) 684,400 52,100
1,959,242
TOTAL TECHNOLOGY 6,376,185
TRANSPORTATION - 0.8%
AIR TRANSPORTATION - 0.3%
Southwest Airlines Co. 1,764,200 33,851
Travelocity.com, Inc. (a) 349,500 6,182
40,033
RAILROADS - 0.5%
Burlington Northern Santa Fe 964,900 22,796
Corp.
Canadian National Railway Co. 1,164,100 31,699
Union Pacific Corp. 545,700 23,090
77,585
TOTAL TRANSPORTATION 117,618
UTILITIES - 6.6%
CELLULAR - 3.6%
Aerial Communications, Inc. 411,700 21,449
(a)
AT&T Corp. - Wireless Group 935,200 26,712
China Telecom (Hong Kong) 576,950 84,812
Ltd. sponsored ADR (a)
Nextel Communications, Inc. 794,800 73,618
Class A (a)
Sprint Corp. - PCS Group 1,425,900 79,137
Series 1 (a)
Vodafone AirTouch PLC 25,779,144 118,101
Vodafone AirTouch PLC 1,328,050 60,841
sponsored ADR
VoiceStream Wireless Corp. (a) 590,328 67,593
532,263
ELECTRIC UTILITY - 0.8%
AES Corp. (a) 800,300 69,826
Calpine Corp. (a) 429,800 45,532
115,358
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
UTILITIES - CONTINUED
TELEPHONE SERVICES - 2.2%
AT&T Corp. 1,840,311 $ 63,836
DDI Corp. 4,660 47,560
iBasis, Inc. 373,500 5,252
McLeodUSA, Inc. Class A (a) 2,736,000 54,720
Metromedia Fiber Network, 2,038,800 63,075
Inc. Class A (a)
Net2Phone, Inc. 132,200 3,900
NEXTLINK Communications, Inc. 293,100 20,535
Class A (a)
Sprint Corp. - FON Group 603,200 36,494
TeraBeam Networks (c) 11,900 179
Time Warner Telecom, Inc. 621,000 34,776
Class A
WinStar Communications, Inc. 14,000 397
(a)
330,724
TOTAL UTILITIES 978,345
TOTAL COMMON STOCKS 14,745,527
(Cost $11,632,621)
CASH EQUIVALENTS - 1.4%
Central Cash Collateral Fund, 109,126,881 109,127
6.54% (b)
Taxable Central Cash Fund, 93,866,101 93,866
6.37% (b)
TOTAL CASH EQUIVALENTS 202,993
(Cost $202,993)
TOTAL INVESTMENT PORTFOLIO - 14,948,520
101.1%
(Cost $11,835,614)
NET OTHER ASSETS - (1.1)% (166,624)
NET ASSETS - 100% $ 14,781,896
</TABLE>
LEGEND
(a) Non-income producing
(b) The rate quoted is the annualized seven-day yield of the fund at
period end.
(c) Restricted securities - Investment in securities not registered
under the Securities Act of 1933.
Additional information on each holding is as follows:
SECURITY ACQUISITION DATE ACQUISITION COST (000S)
TeraBeam Networks 4/7/00 $ 179
Distribution of investments by country of issue, as a percentage of
total net assets, is as follows:
United States of America 88.0%
Japan 3.2
Canada 1.8
United Kingdom 1.3
Finland 1.0
Others (individually less 4.7
than 1%)
100.0%
INCOME TAX INFORMATION
At May 31, 2000, the aggregate cost of investment securities for
income tax purposes was $11,925,283,000. Net unrealized appreciation
aggregated $3,023,237,000, of which $4,043,208,000 related to
appreciated investment securities and $1,019,971,000 related to
depreciated investment securities.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AMOUNTS IN THOUSANDS
MAY 31, 2000 (UNAUDITED)
ASSETS
Investment in securities, at $ 14,948,520
value (cost $11,835,614) -
See accompanying schedule
Receivable for investments 81,993
sold
Receivable for fund shares 30,300
sold
Dividends receivable 7,377
Interest receivable 951
Other receivables 144
TOTAL ASSETS 15,069,285
LIABILITIES
Payable for investments $ 128,169
purchased
Payable for fund shares 33,043
redeemed
Accrued management fee 7,123
Distribution fees payable 6,613
Other payables and accrued 3,314
expenses
Collateral on securities 109,127
loaned, at value
TOTAL LIABILITIES 287,389
NET ASSETS $ 14,781,896
Net Assets consist of:
Paid in capital $ 10,935,191
Distributions in excess of (49,107)
net investment income
Accumulated undistributed net 782,921
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 3,112,891
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS $ 14,781,896
STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
AMOUNTS IN THOUSANDS (EXCEPT
PER-SHARE AMOUNTS)
MAY 31, 2000 (UNAUDITED)
CALCULATION OF MAXIMUM $67.89
OFFERING PRICE CLASS A: NET
ASSET VALUE and redemption
price per share ($606,595
(divided by) 8,935.5 shares)
Maximum offering price per $72.03
share (100/94.25 of $67.89)
CLASS T: NET ASSET VALUE and $68.75
redemption price per share
($9,652,015 (divided by)
140,388 shares)
Maximum offering price per $71.24
share (100/96.50 of $68.75)
CLASS B: NET ASSET VALUE and $66.80
offering price per share
($2,162,313 (divided by)
32,368 shares) A
CLASS C: NET ASSET VALUE and $67.69
offering price per share
($796,654 (divided by)
11,769 shares) A
INSTITUTIONAL CLASS: NET $70.26
ASSET VALUE, offering price
and redemption price per
share ($1,564,319 (divided
by) 22,265 shares)
REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGES.
STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS SIX
MONTHS ENDED MAY 31, 2000
(UNAUDITED)
INVESTMENT INCOME $ 37,848
Dividends
Interest 6,177
Security lending 557
TOTAL INCOME 44,582
EXPENSES
Management fee $ 41,080
Transfer agent fees 13,446
Distribution fees 37,419
Accounting and security 533
lending fees
Non-interested trustees' 36
compensation
Custodian fees and expenses 267
Registration fees 1,341
Audit 38
Legal 37
Miscellaneous 18
Total expenses before 94,215
reductions
Expense reductions (1,137) 93,078
NET INVESTMENT INCOME (LOSS) (48,496)
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 827,960
Foreign currency transactions 59 828,019
Change in net unrealized
appreciation (depreciation)
on:
Investment securities (141,009)
Assets and liabilities in (13) (141,022)
foreign currencies
NET GAIN (LOSS) 686,997
NET INCREASE (DECREASE) IN $ 638,501
NET ASSETS RESULTING FROM
OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
AMOUNTS IN THOUSANDS SIX MONTHS ENDED MAY 31, 2000 YEAR ENDED NOVEMBER 30, 1999
(UNAUDITED)
INCREASE (DECREASE) IN NET
ASSETS
Operations Net investment $ (48,496) $ (37,705)
income (loss)
Net realized gain (loss) 828,019 1,147,901
Change in net unrealized (141,022) 1,476,079
appreciation (depreciation)
NET INCREASE (DECREASE) IN 638,501 2,586,275
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (611) -
In excess of net investment
income
From net realized gain (945,723) (801,608)
TOTAL DISTRIBUTIONS (946,334) (801,608)
Share transactions - net 3,358,659 3,208,668
increase (decrease)
TOTAL INCREASE (DECREASE) 3,050,826 4,993,335
IN NET ASSETS
NET ASSETS
Beginning of period 11,731,070 6,737,735
End of period (including $ 14,781,896 $ 11,731,070
distributions in excess of
net investment income of
$49,107 and $0, respectively)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS A
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 1996 F
SELECTED PER-SHARE DATA
Net asset value, beginning $ 69.26 $ 58.14 $ 51.69 $ 44.80 $ 39.47
of period
Income from Investment
Operations
Net investment income (loss) (.16) (.14) (.13) (.06) .04
E
Net realized and unrealized 4.45 18.28 12.76 8.54 5.29
gain (loss)
Total from investment 4.29 18.14 12.63 8.48 5.33
operations
Less Distributions
From net investment income - - (.03) (.36) -
From net realized gain (5.66) (7.02) (6.15) (1.23) -
Total distributions (5.66) (7.02) (6.18) (1.59) -
Net asset value, end of $ 67.89 $ 69.26 $ 58.14 $ 51.69 $ 44.80
period
TOTAL RETURN B, C 6.35% 34.67% 28.21% 19.73% 13.50%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 607 $ 403 $ 92 $ 29 $ 4
(in millions)
Ratio of expenses to average 1.09% A 1.09% 1.12% 1.32% G 1.52% A, D, G
net assets
Ratio of expenses to average 1.08% A, H 1.08% H 1.10% H 1.30% H 1.50% A, H
net assets after expense
reductions
Ratio of net investment (.45)% A (.23)% (.26)% (.12)% .38% A
income (loss) to average
net assets
Portfolio turnover 103% A 82% 122% 108% 76%
</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 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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS T
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning $ 69.95 $ 58.59 $ 51.97 $ 44.81 $ 39.83 $ 28.52
of period
Income from Investment
Operations
Net investment income (loss) (.23) D (.27) D (.21) D (.04) D .22 D .06
Net realized and unrealized 4.50 18.49 12.87 8.60 6.90 11.54
gain (loss)
Total from investment 4.27 18.22 12.66 8.56 7.12 11.60
operations
Less Distributions
From net investment income - - - (.17) (.03) (.08)
From net realized gain (5.47) (6.86) (6.04) (1.23) (2.11) (.16)
In excess of net realized gain - - - - - (.05)
Total distributions (5.47) (6.86) (6.04) (1.40) (2.14) (.29)
Net asset value, end of period $ 68.75 $ 69.95 $ 58.59 $ 51.97 $ 44.81 $ 39.83
TOTAL RETURN B, C 6.24% 34.44% 28.00% 19.81% 19.00% 41.11%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 9,652 $ 8,047 $ 5,187 $ 4,206 $ 3,537 $ 2,051
(in millions)
Ratio of expenses to average 1.30% A 1.29% 1.29% 1.31% E 1.36% 1.55%
net assets
Ratio of expenses to average 1.28% A, F 1.28% F 1.27% F 1.29% F 1.34% F 1.54% F
net assets after expense
reductions
Ratio of net investment (.65)% A (.43)% (.41)% (.08)% .54% .21%
income (loss) to average net
assets
Portfolio turnover 103% A 82% 122% 108% 76% 97%
</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 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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS B
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 68.19 $ 57.50 $ 51.41 $ 41.81
period
Income from Investment
Operations
Net investment income (loss) D (.42) (.60) (.52) (.32)
Net realized and unrealized 4.39 18.08 12.68 9.95
gain (loss)
Total from investment 3.97 17.48 12.16 9.63
operations
Less Distributions
From net realized gain (5.36) (6.79) (6.07) (.03)
Net asset value, end of period $ 66.80 $ 68.19 $ 57.50 $ 51.41
TOTAL RETURN B, C 5.94% 33.69% 27.27% 23.05%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 2,162 $ 1,396 $ 307 $ 71
millions)
Ratio of expenses to average 1.86% A 1.85% 1.88% 1.93% A, F
net assets
Ratio of expenses to average 1.84% A, G 1.84% G 1.85% G 1.90% A, G
net assets after expense
reductions
Ratio of net investment (1.21)% A (.98)% (1.01)% (.73)% A
income (loss) to average net
assets
Portfolio turnover 103% A 82% 122% 108%
</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 (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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS C
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 69.07 $ 58.24 $ 51.95 $ 51.84
period
Income from Investment
Operations
Net investment income (loss) D (.41) (.60) (.54) (.02)
Net realized and unrealized 4.44 18.32 12.87 .13
gain (loss)
Total from investment 4.03 17.72 12.33 .11
operations
Less Distributions
From net realized gain (5.41) (6.89) (6.04) -
Net asset value, end of period $ 67.69 $ 69.07 $ 58.24 $ 51.95
TOTAL RETURN B, C 5.95% 33.72% 27.30% .21%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 797 $ 436 $ 64 $ 1
millions)
Ratio of expenses to average 1.83% A 1.82% 1.89% 1.95% A, F
net assets
Ratio of expenses to average 1.82% A, G 1.81% G 1.86% G 1.89% A, G
net assets after expense
reductions
Ratio of net investment (1.19)% A (.96)% (1.03)% (.82)% A
income (loss) to average net
assets
Portfolio turnover 103% A 82% 122% 108%
</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 (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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning $ 71.49 $ 59.71 $ 52.86 $ 45.52 $ 40.39 $ 28.90
of period
Income from Investment
Operations
Net investment income (loss) (.05) D .05 D .06 D .22 D .45 D .28
Net realized and unrealized 4.59 18.86 13.08 8.72 7.00 11.69
gain (loss)
Total from investment 4.54 18.91 13.14 8.94 7.45 11.97
operations
Less Distributions
From net investment income - - (.05) (.37) (.21) (.27)
In excess of net investment (.03) - - - - -
income
From net realized gain (5.74) (7.13) (6.24) (1.23) (2.11) (.16)
In excess of net realized gain - - - - - (.05)
Total distributions (5.77) (7.13) (6.29) (1.60) (2.32) (.48)
Net asset value, end of period $ 70.26 $ 71.49 $ 59.71 $ 52.86 $ 45.52 $ 40.39
TOTAL RETURN B, C 6.51% 35.16% 28.67% 20.46% 19.68% 42.15%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 1,564 $ 1,448 $ 1,088 $ 1,032 $ 1,324 $ 791
millions)
Ratio of expenses to average .78% A .78% .76% .77% .79% .83%
net assets
Ratio of expenses to average .76% A, E .77% E .74% E .75% E .77% E .83%
net assets after expense
reductions
Ratio of net investment (.13)% A .08% .12% .46% 1.11% .92%
income (loss) to average
net assets
Portfolio turnover 103% A 82% 122% 108% 76% 97%
</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 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.
NOTES TO FINANCIAL STATEMENTS
For the period ended May 31, 2000 (Unaudited)
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. 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. Foreign securities are valued based
on quotations from the principal market in which such securities are
normally traded. If trading or events occurring in other markets after
the close of the principal market in which foreign securities are
traded, and before the close of the business of the fund, are expected
to materially affect the value of those securities, then they are
valued at their fair value taking this trading or these events into
account. Fair value is determined in good faith under consistently
applied procedures under the general supervision of the Board of
Trustees. 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. 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.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
FOREIGN CURRENCY TRANSLATION - CONTINUED
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.
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, 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.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Distributions in excess of net investment income and accumulated
undistributed net realized gain (loss) on investments and foreign
currency transactions may include temporary book and tax basis
differences that will reverse in a subsequent period. Any taxable
income or gain remaining at fiscal year end is distributed in the
following year.
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 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, Federal Agency,
or other obligations found to be satisfactory by FMR 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.
CENTRAL CASH FUNDS. Pursuant to an Exemptive Order issued by the SEC,
the fund may invest in the Taxable Central Cash Fund and the Central
Cash Collateral Fund (the Cash Funds) managed by Fidelity Investments
Money Management, Inc., an affiliate of FMR. The Cash Funds are
open-end money market funds available only to investment companies and
other accounts managed by FMR and its affiliates. The Cash Funds seek
preservation of capital, liquidity, and current income. Income
distributions from the Cash Funds are declared daily and paid monthly
from net interest income. Income distributions earned by the fund are
recorded as either interest income or security lending income in the
accompanying financial statements.
2. OPERATING POLICIES - CONTINUED
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, restricted securities (excluding 144A
issues) amounted to $179,000 or 0% of net assets.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $9,722,507,000 and $7,171,693,000, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus a
fixed individual fund fee rate applied to the average net assets of
the fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds advised by FMR. The rates ranged from .2167% 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 annualized rate of .58% of average net
assets.
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the
1940 Act, the Board of Trustees have adopted separate Distribution and
Service 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.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
DISTRIBUTION AND SERVICE PLAN - CONTINUED
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 $ 677,000 $ 0
CLASS T 23,861,000 172,000
CLASS B 9,550,000 7,164,000
CLASS C 3,331,000 2,317,000
$ 37,419,000 $ 9,653,000
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 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 is 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 $ 2,127,000 $ 1,044,000
CLASS T 3,222,000 1,143,000
CLASS B 2,026,000 2,026,000 *
CLASS C 142,000 142,000 *
$ 7,517,000 $ 4,355,000
* 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 (collectively referred to
as the transfer 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 $ 615,000 .23 *
CLASS T 8,521,000 .18 *
CLASS B 2,254,000 .24 *
CLASS C 709,000 .21 *
INSTITUTIONAL CLASS 1,347,000 .17 *
$ 13,446,000
* ANNUALIZED
ACCOUNTING AND SECURITY LENDING FEES. Fidelity Service Company, Inc.,
an affiliate of FMR, maintains the fund's accounting records and
administers the security lending program. The security lending fee is
based on the number and duration of lending transactions. The
accounting fee is based on the level of average net assets for the
month plus out-of-pocket expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $310,000 for the
period.
5. SECURITY LENDING.
The fund lends portfolio securities from time to time in order to earn
additional income. The fund receives collateral in the form of U.S.
Treasury obligations, letters of credit, and/or cash against the
loaned securities, and maintains collateral in an amount not less than
100% of the market value of the loaned securities during the period of
the loan. The market value of the loaned securities is determined at
the close of business of the fund and any additional required
collateral is delivered to the fund on the next business day. If the
borrower defaults on its obligation to return the securities loaned
because of insolvency or other reasons, the fund could experience
delays and costs in recovering the securities
5. SECURITY LENDING - CONTINUED
loaned or in gaining access to the collateral. At period end, the
value of the securities loaned amounted to $98,423,000. The fund
received cash collateral of $109,127,000 which was invested in cash
equivalents, and U.S. Treasury obligations valued at $2,719,000. Cash
collateral includes $4,541,000 received for unsettled security loans.
6. 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 $1,081,000 under this arrangement.
In addition, through arrangements with the fund's custodian and each
class' transfer agent, 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 $49,000 under the custodian
arrangement, and each applicable class' expenses were reduced as
follows under the transfer agent arrangements:
TRANSFER AGENT CREDITS
CLASS A $ 5,000
INSTITUTIONAL CLASS 2,000
$ 7,000
7. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS SIX MONTHS ENDED MAY 31, 2000 YEAR ENDED NOVEMBER 30, 1999
IN EXCESS OF NET INVESTMENT
INCOME
Institutional Class $ 611 $ -
FROM NET REALIZED GAIN
Class A $ 34,484 $ 11,749
Class T 642,705 611,659
Class B 114,513 38,743
Class C 36,735 8,557
Institutional Class 117,286 130,900
Total $ 945,723 $ 801,608
$ 946,334 $ 801,608
</TABLE>
8. SHARE TRANSACTIONS.
Transactions for each class of shares for the periods were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
AMOUNTS IN THOUSANDS SHARES DOLLARS
SIX MONTHS ENDED MAY 31, YEAR ENDED NOVEMBER 30, SIX MONTHS ENDED MAY 31,
2000 1999 2000
CLASS A Shares sold 5,209 $ 274,509
3,862
Reinvestment of distributions 478 208 32,058
Shares redeemed (1,226) (1,170) (87,383)
Net increase (decrease) 3,114 4,247 $ 219,184
CLASS T Shares sold 36,022 46,663 $ 2,594,319
Reinvestment of distributions 8,956 10,473 608,732
Shares redeemed (19,639) (30,625) (1,414,630)
Net increase (decrease) 25,339 26,511 $ 1,788,421
CLASS B Shares sold 12,257 16,064 $ 857,298
Reinvestment of distributions 1,553 665 102,841
Shares redeemed (1,919) (1,585) (135,077)
Net increase (decrease) 11,891 15,144 $ 825,062
CLASS C Shares sold 6,013 7,096 $ 426,614
Reinvestment of distributions 454 141 30,440
Shares redeemed (1,017) (2,021) (72,116)
Net increase (decrease) 5,450 5,216 $ 384,938
INSTITUTIONAL CLASS Shares 4,594 6,381 $ 335,816
sold
Reinvestment of distributions 1,366 1,855 94,633
Shares redeemed (3,946) (6,204) (289,395)
Net increase (decrease) 2,014 2,032 $ 141,054
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
DOLLARS
YEAR ENDED NOVEMBER 30,
1999
CLASS A Shares sold $ 322,503
Reinvestment of distributions 11,343
Shares redeemed (74,185)
Net increase (decrease) $ 259,661
CLASS T Shares sold $ 2,907,843
Reinvestment of distributions 576,282
Shares redeemed (1,896,299)
Net increase (decrease) $ 1,587,826
CLASS B Shares sold $ 981,876
Reinvestment of distributions 35,866
Shares redeemed (97,048)
Net increase (decrease) $ 920,694
CLASS C Shares sold $ 441,106
Reinvestment of distributions 7,730
Shares redeemed (125,985)
Net increase (decrease) $ 322,851
INSTITUTIONAL CLASS Shares $ 402,507
sold
Reinvestment of distributions 103,777
Shares redeemed (388,648)
Net increase (decrease) $ 117,636
</TABLE>
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research
(U.K.) Inc.
Fidelity Management & Research
(Far East) Inc.
Fidelity Investments Japan Ltd.
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
Robert A. Dwight, Treasurer
Maria F. Dwyer, Deputy Treasurer
John H. Costello, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
Donald J. Kirk *
Ned C. Lautenbach *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
* INDEPENDENT TRUSTEES
ADVISORY BOARD
J. Michael Cook
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 Telecommunications & Utilities Growth Fund
GROWTH FUNDS
Fidelity Advisor Latin America Fund
Fidelity Advisor Emerging Asia 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 (registered trademark)
Growth Fund
Fidelity Advisor Small Cap Fund
Fidelity Advisor Value Strategies Fund
Fidelity Advisor Mid Cap Fund
Fidelity Advisor Dynamic Capital Appreciation Fund
Fidelity Advisor Equity Growth Fund
Fidelity Advisor Large Cap Fund
Fidelity Advisor Dividend Growth Fund
Fidelity Advisor Growth
Opportunities Fund
EPGI-SANN-0700 106221
1.704748.102
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 High Income 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
MONEY MARKET FUNDS
Prime Fund
Treasury Fund
Tax-Exempt Fund
(2_FIDELITY_LOGOS)(registered trademark)
FIDELITY(REGISTERED TRADEMARK) ADVISOR
EQUITY INCOME
FUND - CLASS A, CLASS T, CLASS B AND CLASS C
SEMIANNUAL REPORT
MAY 31, 2000
(2_FIDELITY_LOGOS)(registered trademark)
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.
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 technology sell-off that began in mid-March continued to hamper
equity markets, driving the tech-heavy NASDAQ index down more than 16%
year to date through the end of May. Broader equity indexes, including
the S&P 500(registered trademark), also were down, but not as much as
more concentrated performance measures. In bond markets, Treasuries
got a boost late in the period as economic reports showed the first
signs of a slowing economy.
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 an investment in a money market fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although money market funds seek to preserve the
value of your investment at $1.00 per share, it is possible to lose
money by investing in these types of funds.
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 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). 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 the 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
year and past 10 year total returns would have been lower.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY ADV EQUITY INCOME - 1.62% -2.63% 96.86% 275.84%
CL A
FIDELITY ADV EQUITY INCOME - -4.22% -8.22% 85.54% 254.23%
CL A (INCL. 5.75% SALES
CHARGE)
Russell 3000 Value 1.19% -1.68% 134.03% 313.71%
Equity Income Funds Average 2.05% -0.62% 102.18% 233.63%
</TABLE>
CUMULATIVE TOTAL RETURNS show Class A's performance in percentage
terms over a set period - in this case, six months, 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 Russell 3000 Value Index - a market capitalization-weighted
index of value-oriented stocks of U.S. domiciled corporations. To
measure how Class A's performance stacked up against its peers, you
can compare it to the equity income funds average, which reflects the
performance of mutual funds with similar objectives tracked by Lipper
Inc. The past six months average represents a peer group of 246 mutual
funds. These benchmarks include reinvested dividends and capital
gains, if any, and exclude the effect of sales charges. Lipper has
created new comparison categories that group funds according to
portfolio characteristics and capitalization, as well as by
capitalization only. These averages are listed on page 5 of this
report.*
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY ADV EQUITY INCOME - -2.63% 14.51% 14.16%
CL A
FIDELITY ADV EQUITY INCOME - -8.22% 13.16% 13.48%
CL A (INCL. 5.75% SALES
CHARGE)
Russell 3000 Value -1.68% 18.54% 15.26%
Equity Income Funds Average -0.62% 14.99% 12.67%
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 Income -CL A Russell 3000 Value
00246 RS008
1990/05/31 9425.00 10000.00
1990/06/30 9383.22 9786.98
1990/07/31 9232.02 9683.03
1990/08/31 8530.96 8813.27
1990/09/30 7885.83 8370.60
1990/10/31 7706.61 8233.78
1990/11/30 8221.52 8801.24
1990/12/31 8402.52 9027.17
1991/01/31 8830.07 9451.27
1991/02/28 9461.41 10099.70
1991/03/31 9612.41 10277.55
1991/04/30 9612.18 10353.74
1991/05/31 10138.59 10745.31
1991/06/30 9673.25 10290.10
1991/07/31 10202.64 10710.13
1991/08/31 10418.72 10913.43
1991/09/30 10364.74 10839.36
1991/10/31 10537.43 11015.08
1991/11/30 10110.12 10457.51
1991/12/31 10907.30 11320.91
1992/01/31 11017.10 11399.05
1992/02/29 11357.48 11696.75
1992/03/31 11172.96 11530.22
1992/04/30 11571.18 11979.78
1992/05/31 11673.33 12057.56
1992/06/30 11543.36 11960.51
1992/07/31 11843.18 12421.55
1992/08/31 11562.02 12052.26
1992/09/30 11637.58 12223.91
1992/10/31 11788.77 12256.62
1992/11/30 12204.92 12687.26
1992/12/31 12508.86 13007.76
1993/01/31 12898.97 13411.35
1993/02/28 13232.95 13848.36
1993/03/31 13662.73 14265.91
1993/04/30 13595.75 14070.04
1993/05/31 13806.88 14365.80
1993/06/30 13941.81 14667.56
1993/07/31 14134.86 14839.39
1993/08/31 14628.14 15379.11
1993/09/30 14531.20 15434.79
1993/10/31 14705.69 15457.60
1993/11/30 14405.18 15131.61
1993/12/31 14763.86 15433.91
1994/01/31 15442.43 16014.64
1994/02/28 15035.29 15514.52
1994/03/31 14391.46 14926.02
1994/04/30 14888.38 15198.44
1994/05/31 14985.82 15354.36
1994/06/30 14887.02 14983.65
1994/07/31 15395.98 15429.84
1994/08/31 16188.78 15890.18
1994/09/30 15913.94 15400.14
1994/10/31 16228.29 15561.72
1994/11/30 15678.18 14933.09
1994/12/31 15717.47 15133.74
1995/01/31 15958.51 15542.63
1995/02/28 16520.92 16153.23
1995/03/31 17054.47 16479.75
1995/04/30 17509.12 16997.37
1995/05/31 17994.08 17678.15
1995/06/30 18247.14 17953.22
1995/07/31 18906.43 18581.15
1995/08/31 19129.58 18872.66
1995/09/30 19717.62 19514.56
1995/10/31 19493.78 19262.47
1995/11/30 20297.55 20217.62
1995/12/31 20833.05 20737.18
1996/01/31 21450.60 21334.35
1996/02/29 21523.85 21511.84
1996/03/31 21681.21 21885.37
1996/04/30 21828.27 22017.43
1996/05/31 21996.35 22319.73
1996/06/30 21870.47 22310.89
1996/07/31 21048.75 21431.22
1996/08/31 21449.08 22077.36
1996/09/30 22207.84 22925.56
1996/10/31 22652.42 23746.71
1996/11/30 24113.19 25422.95
1996/12/31 23846.86 25215.23
1997/01/31 24644.31 26350.35
1997/02/28 24840.94 26723.53
1997/03/31 23853.34 25787.24
1997/04/30 24862.31 26799.28
1997/05/31 26288.03 28359.43
1997/06/30 27581.44 29598.10
1997/07/31 29584.56 31727.34
1997/08/31 28395.89 30753.64
1997/09/30 29881.87 32630.93
1997/10/31 28591.76 31721.39
1997/11/30 29429.78 33018.19
1997/12/31 30011.73 33997.33
1998/01/31 29940.51 33503.05
1998/02/28 32067.30 35736.02
1998/03/31 33521.78 37850.26
1998/04/30 33675.71 38097.15
1998/05/31 33379.69 37457.33
1998/06/30 33771.89 37872.20
1998/07/31 33261.45 36998.77
1998/08/31 28275.80 31468.43
1998/09/30 29652.22 33272.04
1998/10/31 32079.61 35716.62
1998/11/30 33495.59 37324.56
1998/12/31 34932.00 38587.16
1999/01/31 34251.46 38802.07
1999/02/28 33564.43 38093.90
1999/03/31 34237.94 38802.05
1999/04/30 37053.56 42420.39
1999/05/31 36377.81 42077.83
1999/06/30 37858.37 43321.37
1999/07/31 36427.86 42069.65
1999/08/31 35398.90 40511.86
1999/09/30 34027.00 39140.15
1999/10/31 35083.27 41172.70
1999/11/30 34856.93 40886.41
1999/12/31 36113.75 41153.55
2000/01/31 34351.54 39829.15
2000/02/29 31973.79 37233.00
2000/03/31 35170.36 41445.52
2000/04/30 35030.13 41012.18
2000/05/31 35422.78 41371.48
IMATRL PRASUN SHR__CHT 20000531 20000620 152754 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Equity Income Fund - Class A on May 31,
1990, and the current 5.75% sales charge was paid. As the chart shows,
by May 31, 2000, the value of the investment would have grown to
$35,423 - a 254.23% increase on the initial investment. For
comparison, look at how the Russell 3000 Value Index did over the same
period. With dividends and capital gains, if any, reinvested, the same
$10,000 investment would have grown to $41,371 - a 313.71% 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)
* THE LIPPER EQUITY INCOME FUNDS AVERAGE REFLECTS THE PERFORMANCE
(EXCLUDING SALES CHARGES) OF MUTUAL FUNDS WITH SIMILAR PORTFOLIO
CHARACTERISTICS AND CAPITALIZATIONS. AS OF MAY 31, 2000, THE SIX
MONTH, ONE YEAR, FIVE YEAR, AND 10 YEAR CUMULATIVE TOTAL RETURNS FOR
THE EQUITY INCOME FUNDS AVERAGE WERE, 1.33%, -1.91%, 96.17%, AND
228.96%, RESPECTIVELY. THE ONE YEAR, FIVE YEAR, AND 10 YEAR AVERAGE
ANNUAL TOTAL RETURNS FOR THE EQUITY INCOME FUNDS AVERAGE WERE, -1.91%,
14.34%, AND 12.54%, RESPECTIVELY.
FIDELITY ADVISOR EQUITY 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). 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 10 year total returns would have been lower.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY ADV EQUITY INCOME - 1.48% -2.83% 96.20% 274.58%
CL T
FIDELITY ADV EQUITY INCOME - -2.07% -6.23% 89.33% 261.47%
CL T (INCL. 3.50% SALES
CHARGE)
Russell 3000 Value 1.19% -1.68% 134.03% 313.71%
Equity Income Funds Average 2.05% -0.62% 102.18% 233.63%
</TABLE>
CUMULATIVE TOTAL RETURNS show Class T's performance in percentage
terms over a set period - in this case, six months, 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 Russell 3000 Value Index - a market capitalization-weighted
index of value-oriented stocks of U.S. domiciled corporations. To
measure how Class T's performance stacked up against its peers, you
can compare it to the equity income funds average, which reflects the
performance of mutual funds with similar objectives tracked by Lipper
Inc. The past six months average represents a peer group of 246 mutual
funds. These benchmarks include reinvested dividends and capital
gains, if any, and exclude the effect of sales charges. Lipper has
created new comparison categories that group funds according to
portfolio characteristics and capitalization, as well as by
capitalization only. These averages are listed on page 7 of this
report.*
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY ADV EQUITY INCOME - -2.83% 14.43% 14.12%
CL T
FIDELITY ADV EQUITY INCOME - -6.23% 13.62% 13.71%
CL T (INCL. 3.50% SALES
CHARGE)
Russell 3000 Value -1.68% 18.54% 15.26%
Equity Income Funds Average -0.62% 14.99% 12.67%
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 Income -CL T Russell 3000 Value
00280 RS008
1990/05/31 9650.00 10000.00
1990/06/30 9607.23 9786.98
1990/07/31 9452.41 9683.03
1990/08/31 8734.61 8813.27
1990/09/30 8074.09 8370.60
1990/10/31 7890.58 8233.78
1990/11/30 8417.79 8801.24
1990/12/31 8603.12 9027.17
1991/01/31 9040.86 9451.27
1991/02/28 9687.28 10099.70
1991/03/31 9841.88 10277.55
1991/04/30 9841.65 10353.74
1991/05/31 10380.63 10745.31
1991/06/30 9904.18 10290.10
1991/07/31 10446.20 10710.13
1991/08/31 10667.44 10913.43
1991/09/30 10612.18 10839.36
1991/10/31 10788.99 11015.08
1991/11/30 10351.47 10457.51
1991/12/31 11167.68 11320.91
1992/01/31 11280.11 11399.05
1992/02/29 11628.62 11696.75
1992/03/31 11439.69 11530.22
1992/04/30 11847.42 11979.78
1992/05/31 11952.00 12057.56
1992/06/30 11818.93 11960.51
1992/07/31 12125.91 12421.55
1992/08/31 11838.04 12052.26
1992/09/30 11915.40 12223.91
1992/10/31 12070.20 12256.62
1992/11/30 12496.28 12687.26
1992/12/31 12807.48 13007.76
1993/01/31 13206.90 13411.35
1993/02/28 13548.85 13848.36
1993/03/31 13988.89 14265.91
1993/04/30 13920.32 14070.04
1993/05/31 14136.49 14365.80
1993/06/30 14274.64 14667.56
1993/07/31 14472.30 14839.39
1993/08/31 14977.35 15379.11
1993/09/30 14878.10 15434.79
1993/10/31 15056.76 15457.60
1993/11/30 14749.07 15131.61
1993/12/31 15116.31 15433.91
1994/01/31 15811.08 16014.64
1994/02/28 15394.22 15514.52
1994/03/31 14735.02 14926.02
1994/04/30 15243.81 15198.44
1994/05/31 15343.57 15354.36
1994/06/30 15242.42 14983.65
1994/07/31 15763.52 15429.84
1994/08/31 16575.25 15890.18
1994/09/30 16293.85 15400.14
1994/10/31 16615.70 15561.72
1994/11/30 16052.46 14933.09
1994/12/31 16092.69 15133.74
1995/01/31 16339.48 15542.63
1995/02/28 16915.32 16153.23
1995/03/31 17461.61 16479.75
1995/04/30 17927.11 16997.37
1995/05/31 18423.65 17678.15
1995/06/30 18682.75 17953.22
1995/07/31 19357.78 18581.15
1995/08/31 19586.25 18872.66
1995/09/30 20188.33 19514.56
1995/10/31 19959.15 19262.47
1995/11/30 20782.10 20217.62
1995/12/31 21330.40 20737.18
1996/01/31 21962.69 21334.35
1996/02/29 22037.68 21511.84
1996/03/31 22198.80 21885.37
1996/04/30 22349.37 22017.43
1996/05/31 22521.46 22319.73
1996/06/30 22392.58 22310.89
1996/07/31 21551.24 21431.22
1996/08/31 21961.13 22077.36
1996/09/30 22748.71 22925.56
1996/10/31 23214.08 23746.71
1996/11/30 24707.57 25422.95
1996/12/31 24446.18 25215.23
1997/01/31 25260.31 26350.35
1997/02/28 25461.06 26723.53
1997/03/31 24443.17 25787.24
1997/04/30 25483.07 26799.28
1997/05/31 26959.05 28359.43
1997/06/30 28289.12 29598.10
1997/07/31 30329.79 31727.34
1997/08/31 29118.84 30753.64
1997/09/30 30643.91 32630.93
1997/10/31 29317.92 31721.39
1997/11/30 30171.95 33018.19
1997/12/31 30776.42 33997.33
1998/01/31 30703.98 33503.05
1998/02/28 32869.62 35736.02
1998/03/31 34362.49 37850.26
1998/04/30 34507.13 38097.15
1998/05/31 34205.81 37457.33
1998/06/30 34604.62 37872.20
1998/07/31 34073.36 36998.77
1998/08/31 28953.90 31468.43
1998/09/30 30354.11 33272.04
1998/10/31 32845.32 35716.62
1998/11/30 34284.42 37324.56
1998/12/31 35743.36 38587.16
1999/01/31 35052.17 38802.07
1999/02/28 34354.42 38093.90
1999/03/31 35025.94 38802.05
1999/04/30 37897.13 42420.39
1999/05/31 37198.39 42077.83
1999/06/30 38712.68 43321.37
1999/07/31 37249.19 42069.65
1999/08/31 36192.92 40511.86
1999/09/30 34777.53 39140.15
1999/10/31 35860.74 41172.70
1999/11/30 35618.61 40886.41
1999/12/31 36890.40 41153.55
2000/01/31 35093.40 39829.15
2000/02/29 32659.50 37233.00
2000/03/31 35906.35 41445.52
2000/04/30 35764.54 41012.18
2000/05/31 36147.42 41371.48
IMATRL PRASUN SHR__CHT 20000531 20000620 163930 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Equity Income Fund - Class T on May 31,
1990, and the current 3.50% sales charge was paid. As the chart shows,
by May 31, 2000, the value of the investment would have grown to
$36,147 - a 261.47% increase on the initial investment. For
comparison, look at how the Russell 3000 Value Index did over the same
period. With dividends and capital gains, if any, reinvested, the same
$10,000 investment would have grown to $41,371 - a 313.71% increase.
(checkmark)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.
* THE LIPPER EQUITY INCOME FUNDS AVERAGE REFLECTS THE PERFORMANCE
(EXCLUDING SALES CHARGES) OF MUTUAL FUNDS WITH SIMILAR PORTFOLIO
CHARACTERISTICS AND CAPITALIZATIONS. AS OF MAY 31, 2000, THE SIX
MONTH, ONE YEAR, FIVE YEAR, AND 10 YEAR CUMULATIVE TOTAL RETURNS FOR
THE EQUITY INCOME FUNDS AVERAGE WERE, 1.33%, -1.91%, 96.17%, AND
228.96%, RESPECTIVELY. THE ONE YEAR, FIVE YEAR, AND 10 YEAR AVERAGE
ANNUAL TOTAL RETURNS FOR THE EQUITY INCOME FUNDS AVERAGE WERE, -1.91%,
14.34%, AND 12.54%, RESPECTIVELY.
FIDELITY ADVISOR EQUITY 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). 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 between September 10, 1992 (the
date Class T shares were first offered) and June 30, 1994 are those of
Class T, and reflect Class T shares' prior 0.65% 12b-1 fee. Returns
prior to September 10, 1992 are those of the 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 June 30, 1994
would have been lower. Class B shares' contingent deferred sales
charge included in the past six months, past one year, past five
years, and past 10 years total return figures are 5%, 5%, 2% and 0%,
respectively. If Fidelity had not reimbursed certain class expenses,
the past five year and past 10 year total returns would have been
lower.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY ADV EQUITY INCOME - 1.25% -3.31% 91.32% 264.23%
CL B
FIDELITY ADV EQUITY INCOME - -3.31% -7.66% 89.32% 264.23%
CL B (INCL. CONTINGENT
DEFERRED SALES CHARGE)
Russell 3000 Value 1.19% -1.68% 134.03% 313.71%
Equity Income Funds Average 2.05% -0.62% 102.18% 233.63%
</TABLE>
CUMULATIVE TOTAL RETURNS show Class B's performance in percentage
terms over a set period - in this case, six months, 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 Russell 3000 Value Index - a market capitalization-weighted
index of value-oriented stocks of U.S. domiciled corporations. To
measure how Class B's performance stacked up against its peers, you
can compare it to the equity income funds average, which reflects the
performance of mutual funds with similar objectives tracked by Lipper
Inc. The past six months average represents a peer group of 246 mutual
funds. These benchmarks include reinvested dividends and capital
gains, if any, and exclude the effect of sales charges. Lipper has
created new comparison categories that group funds according to
portfolio characteristics and capitalization, as well as by
capitalization only. These averages are listed on page 9 of this
report.*
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY ADV EQUITY INCOME - -3.31% 13.85% 13.80%
CL B
FIDELITY ADV EQUITY INCOME - -7.66% 13.62% 13.80%
CL B (INCL. CONTINGENT
DEFERRED SALES CHARGE)
Russell 3000 Value -1.68% 18.54% 15.26%
Equity Income Funds Average -0.62% 14.99% 12.67%
AVERAGE ANNUAL TOTAL RETURNS take Class B's cumulative return and
shows you what would have happened if Class B had performed at a
constant rate each year.
$10,000 OVER 10 YEARS
FA Equity Income -CL B Russell 3000 Value
00180 RS008
1990/05/31 10000.00 10000.00
1990/06/30 9955.67 9786.98
1990/07/31 9795.24 9683.03
1990/08/31 9051.41 8813.27
1990/09/30 8366.93 8370.60
1990/10/31 8176.77 8233.78
1990/11/30 8723.10 8801.24
1990/12/31 8915.15 9027.17
1991/01/31 9368.77 9451.27
1991/02/28 10038.63 10099.70
1991/03/31 10198.84 10277.55
1991/04/30 10198.60 10353.74
1991/05/31 10757.13 10745.31
1991/06/30 10263.40 10290.10
1991/07/31 10825.08 10710.13
1991/08/31 11054.35 10913.43
1991/09/30 10997.07 10839.36
1991/10/31 11180.30 11015.08
1991/11/30 10726.92 10457.51
1991/12/31 11572.73 11320.91
1992/01/31 11689.23 11399.05
1992/02/29 12050.38 11696.75
1992/03/31 11854.60 11530.22
1992/04/30 12277.12 11979.78
1992/05/31 12385.49 12057.56
1992/06/30 12247.59 11960.51
1992/07/31 12565.71 12421.55
1992/08/31 12267.40 12052.26
1992/09/30 12347.57 12223.91
1992/10/31 12507.98 12256.62
1992/11/30 12949.52 12687.26
1992/12/31 13272.00 13007.76
1993/01/31 13685.91 13411.35
1993/02/28 14040.26 13848.36
1993/03/31 14496.26 14265.91
1993/04/30 14425.20 14070.04
1993/05/31 14649.21 14365.80
1993/06/30 14792.38 14667.56
1993/07/31 14997.20 14839.39
1993/08/31 15520.58 15379.11
1993/09/30 15417.72 15434.79
1993/10/31 15602.86 15457.60
1993/11/30 15284.01 15131.61
1993/12/31 15664.57 15433.91
1994/01/31 16384.54 16014.64
1994/02/28 15952.56 15514.52
1994/03/31 15269.45 14926.02
1994/04/30 15796.69 15198.44
1994/05/31 15900.08 15354.36
1994/06/30 15795.25 14983.65
1994/07/31 16335.26 15429.84
1994/08/31 17186.81 15890.18
1994/09/30 16895.11 15400.14
1994/10/31 17207.98 15561.72
1994/11/30 16623.95 14933.09
1994/12/31 16665.89 15133.74
1995/01/31 16900.32 15542.63
1995/02/28 17486.40 16153.23
1995/03/31 18063.09 16479.75
1995/04/30 18534.49 16997.37
1995/05/31 19038.02 17678.15
1995/06/30 19295.55 17953.22
1995/07/31 19994.27 18581.15
1995/08/31 20220.01 18872.66
1995/09/30 20832.56 19514.56
1995/10/31 20584.81 19262.47
1995/11/30 21435.78 20217.62
1995/12/31 21991.71 20737.18
1996/01/31 22622.78 21334.35
1996/02/29 22700.25 21511.84
1996/03/31 22855.50 21885.37
1996/04/30 22999.80 22017.43
1996/05/31 23166.30 22319.73
1996/06/30 23022.11 22310.89
1996/07/31 22143.49 21431.22
1996/08/31 22566.12 22077.36
1996/09/30 23355.90 22925.56
1996/10/31 23824.13 23746.71
1996/11/30 25340.31 25422.95
1996/12/31 25071.12 25215.23
1997/01/31 25897.26 26350.35
1997/02/28 26080.85 26723.53
1997/03/31 25035.14 25787.24
1997/04/30 26080.67 26799.28
1997/05/31 27597.25 28359.43
1997/06/30 28929.58 29598.10
1997/07/31 31013.25 31727.34
1997/08/31 29758.44 30753.64
1997/09/30 31312.62 32630.93
1997/10/31 29930.16 31721.39
1997/11/30 30794.20 33018.19
1997/12/31 31401.73 33997.33
1998/01/31 31302.88 33503.05
1998/02/28 33496.54 35736.02
1998/03/31 35000.45 37850.26
1998/04/30 35148.45 38097.15
1998/05/31 34815.46 37457.33
1998/06/30 35210.54 37872.20
1998/07/31 34655.17 36998.77
1998/08/31 29434.68 31468.43
1998/09/30 30841.52 33272.04
1998/10/31 33360.20 35716.62
1998/11/30 34817.09 37324.56
1998/12/31 36280.15 38587.16
1999/01/31 35562.45 38802.07
1999/02/28 34838.00 38093.90
1999/03/31 35497.77 38802.05
1999/04/30 38395.54 42420.39
1999/05/31 37671.10 42077.83
1999/06/30 39185.17 43321.37
1999/07/31 37684.02 42069.65
1999/08/31 36596.98 40511.86
1999/09/30 35159.83 39140.15
1999/10/31 36234.30 41172.70
1999/11/30 35975.39 40886.41
1999/12/31 37253.77 41153.55
2000/01/31 35414.91 39829.15
2000/02/29 32943.76 37233.00
2000/03/31 36207.68 41445.52
2000/04/30 36035.13 41012.18
2000/05/31 36423.38 41371.48
IMATRL PRASUN SHR__CHT 20000531 20000620 164352 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Equity Income Fund - Class B on May 31,
1990. As the chart shows, by May 31, 2000, the value of the
investment, would have grown to $36,423 - a 264.23% increase on the
initial investment. For comparison, look at how the Russell 3000 Value
Index did over the same period. With dividends, and capital gains, if
any, reinvested, the same $10,000 investment would have grown to
$41,371 - a 313.71% increase.
(checkmark)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.
* THE LIPPER EQUITY INCOME FUNDS AVERAGE REFLECTS THE PERFORMANCE
(EXCLUDING SALES CHARGES) OF MUTUAL FUNDS WITH SIMILAR PORTFOLIO
CHARACTERISTICS AND CAPITALIZATIONS. AS OF MAY 31, 2000, THE SIX
MONTH, ONE YEAR, FIVE YEAR, AND 10 YEAR CUMULATIVE TOTAL RETURNS FOR
THE EQUITY INCOME FUNDS AVERAGE WERE, 1.33%, -1.91%, 96.17%, AND
228.96%, RESPECTIVELY. THE ONE YEAR, FIVE YEAR, AND 10 YEAR AVERAGE
ANNUAL TOTAL RETURNS FOR THE EQUITY INCOME FUNDS AVERAGE WERE, -1.91%,
14.34%, AND 12.54%, RESPECTIVELY.
FIDELITY ADVISOR EQUITY 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 between June 30, 1994 (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 June 30, 1994 are those of Class T shares, and reflect
Class T shares' prior 0.65% 12b-1 fee. Returns prior to September 10,
1992 are those of the 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 June 30, 1994 would have been lower.
Class C shares' contingent deferred sales charges included in the past
six months, past one year, past five years and past 10 years total
return figures are, 1%, 1%, 0% and 0%, respectively. If Fidelity had
not reimbursed certain class expenses, the past five year and past 10
year total returns would have been lower.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY ADV EQUITY INCOME - 1.24% -3.34% 91.09% 263.81%
CL C
FIDELITY ADV EQUITY INCOME - 0.33% -4.21% 91.09% 263.81%
CL C (INCL. CONTINGENT
DEFERRED SALES CHARGE)
Russell 3000 Value 1.19% -1.68% 134.03% 313.71%
Equity Income Funds Average 2.05% -0.62% 102.18% 233.63%
</TABLE>
CUMULATIVE TOTAL RETURNS show Class C's performance in percentage
terms over a set period - in this case, six months, 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 Russell 3000 Value Index - a market capitalization-weighted
index of value-oriented stocks of U.S. domiciled corporations. To
measure how Class C's performance stacked up against its peers, you
can compare it to the equity income funds average, which reflects the
performance of mutual funds with similar objectives tracked by Lipper
Inc. The past six months average represents a peer group of 264 mutual
funds. These benchmarks include reinvested dividends and capital
gains, if any, and exclude the effect of sales charges. Lipper has
created new comparison categories that group funds according to
portfolio characteristics and capitalization, as well as by
capitalization only. These averages are listed on page 11 of this
report.*
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY ADV EQUITY INCOME - -3.34% 13.83% 13.79%
CL C
FIDELITY ADV EQUITY INCOME - -4.21% 13.83% 13.79%
CL C (INCL. CONTINGENT
DEFERRED SALES CHARGE)
Russell 3000 Value -1.68% 18.54% 15.26%
Equity Income Funds Average -0.62% 14.99% 12.67%
AVERAGE ANNUAL TOTAL RETURNS take Class C's cumulative return and
shows you what would have happened if Class C had performed at a
constant rate each year.
$10,000 OVER 10 YEARS
FA Equity Income -CL C Russell 3000 Value
00480 RS008
1990/05/31 10000.00 10000.00
1990/06/30 9955.67 9786.98
1990/07/31 9795.24 9683.03
1990/08/31 9051.41 8813.27
1990/09/30 8366.93 8370.60
1990/10/31 8176.77 8233.78
1990/11/30 8723.10 8801.24
1990/12/31 8915.15 9027.17
1991/01/31 9368.77 9451.27
1991/02/28 10038.63 10099.70
1991/03/31 10198.84 10277.55
1991/04/30 10198.60 10353.74
1991/05/31 10757.13 10745.31
1991/06/30 10263.40 10290.10
1991/07/31 10825.08 10710.13
1991/08/31 11054.35 10913.43
1991/09/30 10997.07 10839.36
1991/10/31 11180.30 11015.08
1991/11/30 10726.92 10457.51
1991/12/31 11572.73 11320.91
1992/01/31 11689.23 11399.05
1992/02/29 12050.38 11696.75
1992/03/31 11854.60 11530.22
1992/04/30 12277.12 11979.78
1992/05/31 12385.49 12057.56
1992/06/30 12247.59 11960.51
1992/07/31 12565.71 12421.55
1992/08/31 12267.40 12052.26
1992/09/30 12347.57 12223.91
1992/10/31 12507.98 12256.62
1992/11/30 12949.52 12687.26
1992/12/31 13272.00 13007.76
1993/01/31 13685.91 13411.35
1993/02/28 14040.26 13848.36
1993/03/31 14496.26 14265.91
1993/04/30 14425.20 14070.04
1993/05/31 14649.21 14365.80
1993/06/30 14792.38 14667.56
1993/07/31 14997.20 14839.39
1993/08/31 15520.58 15379.11
1993/09/30 15417.72 15434.79
1993/10/31 15602.86 15457.60
1993/11/30 15284.01 15131.61
1993/12/31 15664.57 15433.91
1994/01/31 16384.54 16014.64
1994/02/28 15952.56 15514.52
1994/03/31 15269.45 14926.02
1994/04/30 15796.69 15198.44
1994/05/31 15900.08 15354.36
1994/06/30 15795.25 14983.65
1994/07/31 16335.26 15429.84
1994/08/31 17186.81 15890.18
1994/09/30 16895.11 15400.14
1994/10/31 17207.98 15561.72
1994/11/30 16623.95 14933.09
1994/12/31 16665.89 15133.74
1995/01/31 16900.32 15542.63
1995/02/28 17486.40 16153.23
1995/03/31 18063.09 16479.75
1995/04/30 18534.49 16997.37
1995/05/31 19038.02 17678.15
1995/06/30 19295.55 17953.22
1995/07/31 19994.27 18581.15
1995/08/31 20220.01 18872.66
1995/09/30 20832.56 19514.56
1995/10/31 20584.81 19262.47
1995/11/30 21435.78 20217.62
1995/12/31 21991.71 20737.18
1996/01/31 22622.78 21334.35
1996/02/29 22700.25 21511.84
1996/03/31 22855.50 21885.37
1996/04/30 22999.80 22017.43
1996/05/31 23166.30 22319.73
1996/06/30 23022.11 22310.89
1996/07/31 22143.49 21431.22
1996/08/31 22566.12 22077.36
1996/09/30 23355.90 22925.56
1996/10/31 23824.13 23746.71
1996/11/30 25340.31 25422.95
1996/12/31 25071.12 25215.23
1997/01/31 25897.26 26350.35
1997/02/28 26080.85 26723.53
1997/03/31 25035.14 25787.24
1997/04/30 26080.67 26799.28
1997/05/31 27597.25 28359.43
1997/06/30 28929.58 29598.10
1997/07/31 31013.25 31727.34
1997/08/31 29758.44 30753.64
1997/09/30 31312.62 32630.93
1997/10/31 29930.16 31721.39
1997/11/30 30804.89 33018.19
1997/12/31 31410.83 33997.33
1998/01/31 31312.26 33503.05
1998/02/28 33499.70 35736.02
1998/03/31 34999.74 37850.26
1998/04/30 35135.11 38097.15
1998/05/31 34802.84 37457.33
1998/06/30 35184.97 37872.20
1998/07/31 34630.58 36998.77
1998/08/31 29407.05 31468.43
1998/09/30 30811.49 33272.04
1998/10/31 33324.70 35716.62
1998/11/30 34778.42 37324.56
1998/12/31 36250.55 38587.16
1999/01/31 35534.46 38802.07
1999/02/28 34798.73 38093.90
1999/03/31 35469.70 38802.05
1999/04/30 38362.02 42420.39
1999/05/31 37638.94 42077.83
1999/06/30 39150.16 43321.37
1999/07/31 37651.84 42069.65
1999/08/31 36566.85 40511.86
1999/09/30 35119.48 39140.15
1999/10/31 36191.92 41172.70
1999/11/30 35933.50 40886.41
1999/12/31 37223.72 41153.55
2000/01/31 35388.46 39829.15
2000/02/29 32907.83 37233.00
2000/03/31 36179.68 41445.52
2000/04/30 36007.46 41012.18
2000/05/31 36380.60 41371.48
IMATRL PRASUN SHR__CHT 20000531 20000627 115354 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Equity Income Fund - Class C on May 31,
1990. As the chart shows, by May 31, 2000, the value of the
investment, would have grown to $36,381 - a 263.81% increase on the
initial investment. For comparison, look at how the Russell 3000 Value
Index did over the same period. With dividends and capital gains, if
any, reinvested, the same $10,000 investment would have grown to
$41,371 - a 313.71% increase.
(checkmark)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.
* THE LIPPER EQUITY INCOME FUNDS AVERAGE REFLECTS THE PERFORMANCE
(EXCLUDING SALES CHARGES) OF MUTUAL FUNDS WITH SIMILAR PORTFOLIO
CHARACTERISTICS AND CAPITALIZATIONS. AS OF MAY 31, 2000, THE SIX
MONTH, ONE YEAR, FIVE YEAR, AND 10 YEAR CUMULATIVE TOTAL RETURNS FOR
THE EQUITY INCOME FUNDS AVERAGE WERE, 1.33%, -1.91%, 96.17%, AND
228.96%, RESPECTIVELY. THE ONE YEAR, FIVE YEAR, AND 10 YEAR AVERAGE
ANNUAL TOTAL RETURNS FOR THE EQUITY INCOME FUNDS AVERAGE WERE, -1.91%,
14.34%, AND 12.54%, RESPECTIVELY.
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
U.S. equity investors faced a steadily
declining market during the latter
part of the six-month period that
ended May 31, 2000, after
experiencing continued growth the
prior three months. Two chief
catalysts - a tightening of monetary
policy by the Federal Reserve Board
and the bursting of a speculative
bubble in technology stocks -
sparked a sustained pullback among
the major U.S. equity indexes that
began in March. The tech-heavy
NASDAQ Composite Index reached
a high of 5048 on March 10 before
quickly retreating below the 4000
level. The NASDAQ dropped to
3401 on the final day of the period,
gaining a modest 2.05% return for
the six-month period. The Standard
& Poor's 500SM Index - an index
of 500 widely held stocks - fared
slightly better in returning 2.90%.
Another index of well-established
stocks - the blue chips' Dow Jones
Industrial Average - surged higher
during the NASDAQ's sharp
plummet in April, but the brief rally
wasn't enough to significantly offset
earlier losses, and the Dow returned
-2.55% for the period. The Russell
2000(Registered trademark) Index - a barometer of
small-cap stocks - outperformed the
major indexes of larger companies
with a 5.50% return. As the period
drew to a close, weaker trading
volume suggested investors were
mixed about the direction of U.S.
stocks, and whether the three
interest-rate hikes levied by the
Fed during the period had begun
to cool off the overheated economy.
(photograph of Bob Chow)
An interview with Bob Chow, Portfolio Manager of Fidelity
Advisor Equity Income Fund
Q. HOW DID THE FUND PERFORM, BOB?
A. For the six months that ended May 31, 2000, the fund's Class A,
Class T, Class B and Class C shares returned 1.62%, 1.48%, 1.25% and
1.24%, respectively. In comparison, the equity income funds average
tracked by Lipper Inc. returned 2.05% and the Russell 3000 Value Index
returned 1.19% during the same period. For the 12 months that ended
May 31, 2000, the fund's Class A, Class T, Class B and Class C shares
returned -2.63%, -2.83%, -3.31% and -3.34%, respectively. During the
same period, the Lipper peer group returned -0.62% and the Russell
3000 Value Index returned -1.68%.
Q. WHAT CAUSED THE FUND TO OUTPERFORM THE INDEX, YET UNDERPERFORM ITS
PEERS DURING THE SIX-MONTH PERIOD?
A. The fund's overweighted positions in the industrial machinery
sector - such as General Electric, which rallied when technology
stocks corrected during the latter half of the period - helped it
outperform the index's holdings in this sector by 22.5%. Additionally,
strong stock selection within the fund's underweighted stake in
financials and slightly overweighted positions in the energy sector
fueled better returns than the benchmark. Compared to its peers, the
fund held a substantially lower position in top-performing technology
stocks than other equity-income funds, many of which maintained
weightings at levels 20 to 35 percentage points greater than the fund.
Q. WHAT STRATEGIES DID YOU PURSUE?
A. I continued to manage the fund within its goals of being
conservative and generating above-average returns. As the period
progressed, I positioned the fund along three emerging trends in the
market. First, I thought the extraordinary price appreciation
experienced in technology during the past year was unsustainable. The
prices of many of these companies rose primarily on speculation,
rather than fundamental evaluations - such as analysis of
price-to-earnings ratios. As a result, I reduced the fund's technology
weighting to 4.2% of the fund's net assets at the period's end, from
7.0% six months earlier, eliminating some names entirely, such as EMC.
Second, I positioned the fund to benefit from a slowdown in the
economy, adding to its weightings in selected financial, nondurable
and energy stocks where valuations were attractive, while reducing its
holdings in the retail sector. The Federal Reserve Board made it clear
- through the implementation of six interest-rate hikes during the
past year - of its intention to slow down the U.S. economy. Toward the
end of the period, we saw some signs that the Fed's actions had begun
to take hold as several companies, such as retailers Circuit City and
Costco, reported slower growth.
Q. WHAT WAS THE THIRD TREND?
A. I expected a recovery in the European currency - the euro - which
declined to new lows during the period. Fund holdings with global
reach such as McDonald's, Colgate-Palmolive and Procter & Gamble,
whose earnings were negatively affected by the euro's weakening, could
benefit from its future strengthening.
Q. ONE OF THE FUND'S POSITIONS IN THE PAPER INDUSTRY - CHAMPION
INTERNATIONAL - SOARED AFTER IT AGREED TO BE ACQUIRED BY INTERNATIONAL
PAPER IN MAY . . .
A. Yes, it did. International Paper, a stock not held by the fund,
recognized that the fundamentals in the paper industry had bottomed
out. However, it has been forecast that there will be very little
paper capacity coming into the marketplace over the next two years. I
think International Paper recognized this, and despite having to
outbid another company - UPM-Kymmene - to acquire Champion, expected
the paper cycle to turn positive and, Champion offered good value. The
acquisition allowed the fund to realize profits in Champion, which was
no longer held at the end of the period. The fund's large position in
Bowater, a blue-chip paper company that was a positive contributor, is
another example of my attempt to exploit the undervalued securities in
the sector.
Q. WHAT STOCKS WERE TOP PERFORMERS? WHICH DISAPPOINTED?
A. Weatherford International, a premier oil services company, was the
fund's top contributor, rallying on the surge in the price of oil.
Varian Semiconductor, a small-cap holding overlooked by Wall Street,
performed well as the demand for semiconductors increased. On the
other hand, AT&T performed below expectations due to increased loss of
market share in its traditional wire-line business. Drug and
pharmaceutical firm Bristol-Myers Squibb underperformed after it
pulled its application to the U.S. Food and Drug Administration for
its promising hypertension drug, Vanlev.
Q. WHAT'S YOUR OUTLOOK, BOB?
A. I'll continue to look for companies that should outperform in a
slowing economic environment, such as financials, nondurables and
selected health care stocks, while shying away from the retail and
technology sectors. When the Fed's tightening has been fully realized
in slowing the economy, I believe the fund will be well-positioned to
take advantage of a return to value-oriented stocks.
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 AND DO NOT NECESSARILY REPRESENT THE VIEWS OF FIDELITY OR
ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH VIEWS ARE
SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER CONDITIONS
AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE
VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE
INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS
FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY FIDELITY FUND.
(checkmark)FUND FACTS
GOAL: seeks to maintain a
yield that exceeds the
composite dividend yield of
the S&P 500; also considers
the potential for achieving
capital appreciation
START DATE: April 25, 1983
SIZE: as of May 31, 2000,
more than $3.5 billion
MANAGER: Bob Chow, since
1996; joined Fidelity in
1989
BOB CHOW ON
TECHNOLOGY STOCKS:
"At the end of the period, I felt we
had seen the peak in the rise of
technology stocks. Looking back at
the euphoria surrounding the
sector in the fourth quarter of 1999
and early 2000, investor
speculation and demand for many
unprofitable companies had
reached illogical valuations. The
bubble burst beginning in March,
and investors in the market began
to use more discretion about which
companies to own. The companies
with earnings drew tepid interest,
while many of the unprofitable ones
- such as Toysmart.com and
DrKoop.com - started to feel the
market's pinch. Suddenly, the well
of operating cash many of these
companies previously had relied on
through public offerings began to dry
up.
"These unprofitable companies
accelerated the growth of the
technology sector as they quickly
spent their cash on equipment
and services. When this
incremental spending dries up,
the sector's growth rate will slow.
This phenomenon of stocks
leading the fundamentals, rather
than the reverse, is a classic sign
of a secular peak. As these
weakened fundamentals begin to
show up in reported earnings
results, I think we will see the
downtrend in technology stocks
resume; it is in this environment
that equity-income funds should
excel as an investment vehicle."
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF MAY 31,
2000
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Exxon Mobil Corp. 4.3 3.3
Citigroup, Inc. 3.5 2.0
General Electric Co. 3.1 4.2
Bowater, Inc. 2.5 2.1
SBC Communications, Inc. 2.4 2.3
American Express Co. 2.3 2.1
Fannie Mae 2.2 2.0
American International Group, 2.2 1.8
Inc.
Freddie Mac 2.2 1.9
Minnesota Mining & 2.1 2.1
Manufacturing Co.
26.8 23.8
TOP FIVE MARKET SECTORS AS OF
MAY 31, 2000
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Finance 26.0 22.5
Utilities 11.1 10.5
Energy 11.1 9.8
Basic Industries 7.7 11.0
Health 7.2 7.9
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
ASSET ALLOCATION (% OF FUND'S
NET ASSETS)
AS OF MAY 31, 2000 * AS OF NOVEMBER 30, 1999 **
Stocks and Equity Futures 93.9% Stocks 95.3%
Convertible Securities 0.4% Convertible Securities 0.3%
Short-Term Investments and Short-Term Investments and
Net Other Assets 5.7% Net Other Assets 4.4%
* FOREIGN INVESTMENTS 4.1% ** FOREIGN INVESTMENTS 4.2%
Row: 1, Col: 1, Value: 93.90000000000001 Row: 1, Col: 1, Value: 95.3
Row: 1, Col: 2, Value: 0.0 Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 0.0 Row: 1, Col: 3, Value: 0.0
Row: 1, Col: 4, Value: 0.4 Row: 1, Col: 4, Value: 0.3
Row: 1, Col: 5, Value: 0.0 Row: 1, Col: 5, Value: 0.0
Row: 1, Col: 6, Value: 0.0 Row: 1, Col: 6, Value: 0.0
Row: 1, Col: 7, Value: 0.0 Row: 1, Col: 7, Value: 0.0
Row: 1, Col: 8, Value: 5.7 Row: 1, Col: 8, Value: 4.4
</TABLE>
INVESTMENTS MAY 31, 2000 (UNAUDITED)
Showing Percentage of Net Assets
<TABLE>
<CAPTION>
<S> <C> <C> <C>
COMMON STOCKS - 92.4%
SHARES VALUE (NOTE 1) (000S)
AEROSPACE & DEFENSE - 1.5%
Boeing Co. 857,800 $ 33,508
Textron, Inc. 300,000 18,825
52,333
BASIC INDUSTRIES - 7.7%
CHEMICALS & PLASTICS - 1.6%
Dow Chemical Co. 300,000 32,119
Olin Corp. 1,600,000 25,000
57,119
IRON & STEEL - 0.4%
Nucor Corp. 400,000 15,550
METALS & MINING - 1.7%
Alcoa, Inc. 500,000 29,219
Phelps Dodge Corp. 660,000 29,618
58,837
PACKAGING & CONTAINERS - 1.3%
Ball Corp. 1,205,717 35,795
Tupperware Corp. 375,000 8,273
44,068
PAPER & FOREST PRODUCTS - 2.7%
Bowater, Inc. 1,685,000 87,093
Georgia-Pacific Corp. 240,000 7,860
94,953
TOTAL BASIC INDUSTRIES 270,527
CONSTRUCTION & REAL ESTATE -
2.5%
BUILDING MATERIALS - 0.5%
American Standard Companies, 400,000 18,475
Inc. (a)
ENGINEERING - 0.7%
Fluor Corp. 770,500 25,041
REAL ESTATE INVESTMENT TRUSTS
- 1.3%
Apartment Investment & 500,000 20,031
Management Co. Class A
Duke-Weeks Realty Corp. 300,000 6,469
Equity Office Properties Trust 640,000 17,000
43,500
TOTAL CONSTRUCTION & REAL 87,016
ESTATE
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
DURABLES - 3.1%
AUTOS, TIRES, & ACCESSORIES -
0.4%
Ford Motor Co. 320,000 $ 15,540
CONSUMER DURABLES - 2.1%
Minnesota Mining & 840,000 72,030
Manufacturing Co.
HOME FURNISHINGS - 0.6%
Leggett & Platt, Inc. 1,100,000 22,069
TOTAL DURABLES 109,639
ENERGY - 11.1%
ENERGY SERVICES - 1.8%
Schlumberger Ltd. (NY Shares) 460,000 33,839
Weatherford International, 640,000 27,560
Inc.
61,399
OIL & GAS - 9.3%
Amerada Hess Corp. 700,000 46,463
Apache Corp. 320,000 19,480
BP Amoco PLC sponsored ADR 1,300,000 70,688
EOG Resources, Inc. 500,000 16,250
Exxon Mobil Corp. 1,800,000 149,949
Grant Prideco, Inc. (a) 700,000 16,275
Tesoro Petroleum Corp. (a) 794,500 8,144
327,249
TOTAL ENERGY 388,648
FINANCE - 26.0%
BANKS - 7.4%
Bank of America Corp. 700,000 38,894
Bank of New York Co., Inc. 800,000 37,550
Bank One Corp. 500,000 16,531
Chase Manhattan Corp. 460,000 34,356
Comerica, Inc. 550,000 27,844
FleetBoston Financial Corp. 720,000 27,225
Mellon Financial Corp. 1,200,000 46,275
Northern Trust Corp. 120,000 7,898
Wells Fargo & Co. 500,000 22,625
259,198
CREDIT & OTHER FINANCE - 7.1%
American Express Co. 1,500,000 80,719
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
FINANCE - CONTINUED
CREDIT & OTHER FINANCE -
CONTINUED
Citigroup, Inc. 2,000,000 $ 124,375
Household International, Inc. 950,000 44,650
249,744
FEDERAL SPONSORED CREDIT - 4.4%
Fannie Mae 1,300,000 78,163
Freddie Mac 1,700,000 75,650
153,813
INSURANCE - 5.6%
American General Corp. 160,000 10,250
American International Group, 680,000 76,543
Inc.
MBIA, Inc. 780,000 45,094
PMI Group, Inc. 520,000 26,390
The Chubb Corp. 560,000 39,200
197,477
SECURITIES INDUSTRY - 1.5%
Lehman Brothers Holdings, 440,000 33,963
Inc.
Morgan Stanley Dean Witter & 258,100 18,567
Co.
52,530
TOTAL FINANCE 912,762
HEALTH - 7.2%
DRUGS & PHARMACEUTICALS - 5.5%
Bristol-Myers Squibb Co. 1,200,000 66,075
Eli Lilly & Co. 740,000 56,333
Merck & Co., Inc. 260,000 19,403
Schering-Plough Corp. 1,100,000 53,213
195,024
MEDICAL EQUIPMENT & SUPPLIES
- 1.7%
Abbott Laboratories 620,000 25,226
Johnson & Johnson 160,000 14,320
St. Jude Medical, Inc. (a) 520,000 18,688
58,234
TOTAL HEALTH 253,258
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
INDUSTRIAL MACHINERY &
EQUIPMENT - 6.5%
ELECTRICAL EQUIPMENT - 3.1%
General Electric Co. 2,100,000 $ 110,513
INDUSTRIAL MACHINERY &
EQUIPMENT - 2.7%
Ingersoll-Rand Co. 780,000 35,539
Kennametal, Inc. 1,304,363 34,403
Parker-Hannifin Corp. 360,000 15,008
Varian Semiconductor 180,000 8,584
Equipment Associates, Inc.
(a)
93,534
POLLUTION CONTROL - 0.7%
Waste Management, Inc. 1,200,000 24,450
TOTAL INDUSTRIAL MACHINERY & 228,497
EQUIPMENT
MEDIA & LEISURE - 3.4%
BROADCASTING - 0.5%
Comcast Corp. Class A 460,000 17,423
(special) (a)
ENTERTAINMENT - 0.5%
Walt Disney Co. 420,000 17,719
LEISURE DURABLES & TOYS - 0.2%
Callaway Golf Co. 500,000 9,063
PUBLISHING - 1.4%
Houghton Mifflin Co. 720,000 28,800
McGraw-Hill Companies, Inc. 380,000 19,546
48,346
RESTAURANTS - 0.8%
McDonald's Corp. 760,000 27,218
TOTAL MEDIA & LEISURE 119,769
NONDURABLES - 5.2%
FOODS - 1.5%
Bestfoods 280,000 18,060
Hershey Foods Corp. 385,000 19,972
Wm. Wrigley Jr. Co. 163,800 13,114
51,146
HOUSEHOLD PRODUCTS - 3.0%
Avon Products, Inc. 420,000 17,351
Colgate-Palmolive Co. 600,000 31,575
Gillette Co. 340,000 11,348
International Flavors & 17,500 595
Fragrances, Inc.
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
NONDURABLES - CONTINUED
HOUSEHOLD PRODUCTS - CONTINUED
Procter & Gamble Co. 400,000 $ 26,600
Unilever NV (NY Shares) 320,000 16,260
103,729
TOBACCO - 0.7%
Philip Morris Companies, Inc. 1,000,000 26,125
TOTAL NONDURABLES 181,000
RETAIL & WHOLESALE - 1.6%
GENERAL MERCHANDISE STORES -
1.1%
Federated Department Stores, 440,000 16,940
Inc. (a)
Jo-Ann Stores, Inc. Class B 720,000 5,805
(non-vtg.) (a)
Wal-Mart Stores, Inc. 300,000 17,288
40,033
RETAIL & WHOLESALE,
MISCELLANEOUS - 0.5%
Home Depot, Inc. 360,000 17,573
TOTAL RETAIL & WHOLESALE 57,606
TECHNOLOGY - 4.2%
COMMUNICATIONS EQUIPMENT - 0.5%
Nokia AB sponsored ADR 160,000 8,320
Nortel Networks Corp. 160,000 8,527
Oni Systems Corp. 1,900 48
16,895
COMPUTER SERVICES & SOFTWARE
- 0.6%
Microsoft Corp. (a) 200,000 12,513
Oracle Corp. (a) 120,000 8,625
21,138
COMPUTERS & OFFICE EQUIPMENT
- 1.8%
Pitney Bowes, Inc. 440,000 19,140
UNOVA, Inc. (a)(c) 3,200,000 44,200
63,340
ELECTRONIC INSTRUMENTS - 0.3%
Novellus Systems, Inc. (a) 200,000 9,638
ELECTRONICS - 1.0%
Motorola, Inc. 80,000 7,500
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
TECHNOLOGY - CONTINUED
ELECTRONICS - CONTINUED
Texas Instruments, Inc. 120,000 $ 8,670
Tyco International Ltd. 400,000 18,825
34,995
TOTAL TECHNOLOGY 146,006
TRANSPORTATION - 1.3%
AIR TRANSPORTATION - 0.5%
Alaska Air Group, Inc. (a) 600,000 18,675
RAILROADS - 0.3%
Burlington Northern Santa Fe 400,000 9,450
Corp.
TRUCKING & FREIGHT - 0.5%
CNF Transportation, Inc. 645,000 16,972
TOTAL TRANSPORTATION 45,097
UTILITIES - 11.1%
CELLULAR - 0.2%
Nextel Communications, Inc. 80,000 7,410
Class A (a)
ELECTRIC UTILITY - 1.7%
DPL, Inc. 1,300,000 30,469
IPALCO Enterprises, Inc. 1,400,000 27,825
58,294
GAS - 1.8%
Dynegy, Inc. Class A 138,158 10,655
El Paso Energy Corp. 700,000 36,050
Enron Corp. 240,000 17,490
64,195
TELEPHONE SERVICES - 7.4%
AT&T Corp. 1,500,000 52,031
BCE, Inc. 200,000 4,678
Bell Atlantic Corp. 700,000 37,013
BellSouth Corp. 1,100,000 51,356
CenturyTel, Inc. 220,000 5,940
SBC Communications, Inc. 1,900,000 83,006
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
UTILITIES - CONTINUED
TELEPHONE SERVICES - CONTINUED
U.S. WEST, Inc. 160,000 $ 11,520
WorldCom, Inc. (a) 380,000 14,298
259,842
TOTAL UTILITIES 389,741
TOTAL COMMON STOCKS 3,241,899
(Cost $2,766,237)
CONVERTIBLE PREFERRED STOCKS
- 0.4%
MEDIA & LEISURE - 0.4%
BROADCASTING - 0.4%
MediaOne Group, Inc. 140,000 13,790
(Vodafone AirTouch PLC)
$3.63 PIES
PUBLISHING - 0.0%
Taylor (J.N.) Holdings Ltd. 50,000 0
9.5% (a)
TOTAL CONVERTIBLE PREFERRED 13,790
STOCKS
(Cost $15,118)
</TABLE>
U.S. TREASURY OBLIGATIONS -
0.1%
MOODY'S RATINGS (UNAUDITED) PRINCIPAL AMOUNT (000S)
U.S. Treasury Bills, yield at - $ 3,000 2,969
date of purchase 6.03%
8/10/00 (d) (Cost $2,965)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
CASH EQUIVALENTS - 7.2%
SHARES VALUE (NOTE 1) (000S)
Central Cash Collateral Fund, 210,400 $ 210
6.54% (b)
Taxable Central Cash Fund, 252,748,241 252,748
6.37% (b)
TOTAL CASH EQUIVALENTS 252,958
(Cost $252,958)
TOTAL INVESTMENT PORTFOLIO - 3,511,616
100.1%
(Cost $3,037,278)
NET OTHER ASSETS - (0.1)% (2,777)
NET ASSETS - 100% $ 3,508,839
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FUTURES CONTRACTS
EXPIRATION DATE UNDERLYING FACE AMOUNT AT UNREALIZED GAIN/(LOSS) (000S)
VALUE (000S)
PURCHASED
145 S&P 500 Stock Index June 2000 $ 51,555 $ (410)
Contracts
THE FACE VALUE OF FUTURES PURCHASED AS A PERCENTAGE OF NET ASSETS - 1.5%
</TABLE>
SECURITY TYPE ABBREVIATIONS
PIES - Premium Income Equity
Securities
LEGEND
(a) Non-income producing
(b) The rate quoted is the annualized seven-day yield of the fund at
period end.
(c) Affiliated company
(d) Security or a portion of the security was pledged to cover margin
requirements for futures contracts. At the period end, the value of
securities pledged amounted to $2,969,000.
INCOME TAX INFORMATION
At May 31, 2000, the aggregate cost of investment securities for
income tax purposes was $3,046,642,000. Net unrealized appreciation
aggregated $464,974,000, of which $653,666,000 related to appreciated
investment securities and $188,692,000 related to depreciated
investment securities.
The fund intends to elect to defer to its fiscal year ending November
30, 2000 approximately $6,428,000 of losses recognized during the
period November 1, 1999 to November 30, 1999.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AMOUNTS IN THOUSANDS (EXCEPT
PER-SHARE AMOUNTS)
MAY 31, 2000 (UNAUDITED)
ASSETS
Investment in securities, at $ 3,511,616
value (cost $3,037,278) -
See accompanying schedule
Receivable for investments 42,364
sold
Receivable for fund shares 2,460
sold
Dividends receivable 5,580
Interest receivable 1,024
Other receivables 11
TOTAL ASSETS 3,563,055
LIABILITIES
Payable for investments $ 31,309
purchased
Payable for fund shares 18,990
redeemed
Accrued management fee 1,396
Distribution fees payable 1,577
Payable for daily variation 181
on futures contracts
Other payables and accrued 553
expenses
Collateral on securities 210
loaned, at value
TOTAL LIABILITIES 54,216
NET ASSETS $ 3,508,839
Net Assets consist of:
Paid in capital $ 2,842,312
Undistributed net investment 22,957
income
Accumulated undistributed net 169,639
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 473,931
(depreciation) on investments
NET ASSETS $ 3,508,839
STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
AMOUNTS IN THOUSANDS (EXCEPT
PER-SHARE AMOUNTS)
MAY 31, 2000 (UNAUDITED)
CALCULATION OF MAXIMUM $25.26
OFFERING PRICE CLASS A: NET
ASSET VALUE and redemption
price per share ($121,020
(divided by) 4,791 shares)
Maximum offering price per $26.80
share (100/94.25 of $25.26)
CLASS T: NET ASSET VALUE and $25.49
redemption price per share
($2,090,219 (divided by)
81,998 shares)
Maximum offering price per $26.41
share (100/96.50 of $25.49)
CLASS B: NET ASSET VALUE and $25.33
offering price per share
($744,385 (divided by)
29,393 shares) A
CLASS C: NET ASSET VALUE and $25.35
offering price per share
($69,553 (divided by)
2,743.3 shares) A
INSTITUTIONAL CLASS: NET $25.73
ASSET VALUE, offering price
and redemption price per
share ($483,662 (divided by)
18,794 shares)
REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS SIX
MONTHS ENDED MAY 31, 2000
(UNAUDITED)
INVESTMENT INCOME $ 47,917
Dividends
Interest 6,063
Security lending 1
TOTAL INCOME 53,981
EXPENSES
Management fee $ 8,701
Transfer agent fees 3,697
Distribution fees 9,997
Accounting and security 326
lending fees
Non-interested trustees' 7
compensation
Custodian fees and expenses 31
Registration fees 102
Audit 24
Legal 27
Miscellaneous 15
Total expenses before 22,927
reductions
Expense reductions (669) 22,258
NET INVESTMENT INCOME 31,723
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 172,470
Foreign currency transactions 64
Futures contracts 7,954 180,488
Change in net unrealized
appreciation (depreciation)
on:
Investment securities (170,824)
Futures contracts (410) (171,234)
NET GAIN (LOSS) 9,254
NET INCREASE (DECREASE) IN $ 40,977
NET ASSETS RESULTING FROM
OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
AMOUNTS IN THOUSANDS SIX MONTHS ENDED MAY 31, 2000 YEAR ENDED NOVEMBER 30, 1999
(UNAUDITED)
INCREASE (DECREASE) IN NET
ASSETS
Operations Net investment $ 31,723 $ 23,696
income
Net realized gain (loss) 180,488 456,249
Change in net unrealized (171,234) (327,761)
appreciation (depreciation)
NET INCREASE (DECREASE) IN 40,977 152,184
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (12,231) (24,375)
From net investment income
From net realized gain (392,123) (187,706)
TOTAL DISTRIBUTIONS (404,354) (212,081)
Share transactions - net (157,978) (18,482)
increase (decrease)
TOTAL INCREASE (DECREASE) (521,355) (78,379)
IN NET ASSETS
NET ASSETS
Beginning of period 4,030,194 4,108,573
End of period (including $ 3,508,839 $ 4,030,194
undistributed net investment
income of $22,957 and
$3,465, respectively)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS A
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 1996 F
SELECTED PER-SHARE DATA
Net asset value, beginning $ 27.72 $ 28.15 $ 26.69 $ 22.78 $ 20.38
of period
Income from Investment
Operations
Net investment income E .25 .23 .24 .23 .06
Net realized and unrealized .16 .88 3.19 4.61 2.44
gain (loss)
Total from investment .41 1.11 3.43 4.84 2.50
operations
Less Distributions
From net investment income (.12) (.25) (.25) (.34) (.10)
From net realized gain (2.75) (1.29) (1.72) (.59) -
Total distributions (2.87) (1.54) (1.97) (.93) (.10)
Net asset value, end of $ 25.26 $ 27.72 $ 28.15 $ 26.69 $ 22.78
period
TOTAL RETURN B, C 1.62% 4.06% 13.82% 22.05% 12.31%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 121 $ 120 $ 65 $ 26 $ 3
millions)
Ratio of expenses to average 1.00% A .99% 1.03% 1.26% G 1.46% A, D, G
net assets
Ratio of expenses to average .96% A, H .96% H 1.02% H 1.25% H 1.44% A, H
net assets after expense
reductions
Ratio of net investment 2.02% A .83% .89% .93% 1.27% A
income to average net assets
Portfolio turnover 89% A 113% 59% 55% 78%
</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 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 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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS T
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning $ 27.95 $ 28.35 $ 26.85 $ 22.83 $ 19.95 $ 15.96
of period
Income from Investment
Operations
Net investment income .22 D .17 D .19 D .26 D .30 D .31
Net realized and unrealized .16 .90 3.22 4.62 3.35 4.26
gain (loss)
Total from investment .38 1.07 3.41 4.88 3.65 4.57
operations
Less Distributions
From net investment income (.09) (.18) (.19) (.27) (.31) (.30)
From net realized gain (2.75) (1.29) (1.72) (.59) (.46) (.28)
Total distributions (2.84) (1.47) (1.91) (.86) (.77) (.58)
Net asset value, end of period $ 25.49 $ 27.95 $ 28.35 $ 26.85 $ 22.83 $ 19.95
TOTAL RETURN B, C 1.48% 3.89% 13.63% 22.12% 18.89% 29.46%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 2,090 $ 2,494 $ 2,635 $ 2,190 $ 1,673 $ 880
(in millions)
Ratio of expenses to average 1.21% A 1.21% 1.21% 1.23% 1.27% 1.48%
net assets
Ratio of expenses to average 1.17% A, E 1.18% E 1.20% E 1.21% E 1.26% E 1.47% E
net assets after expense
reductions
Ratio of net investment 1.80% A .61% .72% 1.05% 1.45% 1.78%
income to average net
assets
Portfolio turnover 89% A 113% 59% 55% 78% 80%
</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 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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS B
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning $ 27.79 $ 28.20 $ 26.73 $ 22.73 $ 19.90 $ 15.94
of period
Income from Investment
Operations
Net investment income .15 D .03 D .05 D .13 D .19 D .26
Net realized and unrealized .17 .88 3.21 4.61 3.33 4.23
gain (loss)
Total from investment .32 .91 3.26 4.74 3.52 4.49
operations
Less Distributions
From net investment income (.03) (.03) (.07) (.15) (.23) (.25)
From net realized gain (2.75) (1.29) (1.72) (.59) (.46) (.28)
Total distributions (2.78) (1.32) (1.79) (.74) (.69) (.53)
Net asset value, end of period $ 25.33 $ 27.79 $ 28.20 $ 26.73 $ 22.73 $ 19.90
TOTAL RETURN B, C 1.25% 3.33% 13.06% 21.52% 18.22% 28.95%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 744 $ 893 $ 878 $ 682 $ 500 $ 270
(in millions)
Ratio of expenses to average 1.75% A 1.72% 1.74% 1.74% E 1.81% 1.85%
net assets
Ratio of expenses to average 1.71% A, F 1.69% F 1.72% F 1.73% F 1.79% F 1.84% F
net assets after expense
reductions
Ratio of net investment 1.27% A .10% .19% .53% .92% 1.41%
income to average net
assets
Portfolio turnover 89% A 113% 59% 55% 78% 80%
</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 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 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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS C
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 27.81 $ 28.23 $ 26.84 $ 26.65
period
Income from Investment
Operations
Net investment income D .15 .02 .02 .02
Net realized and unrealized .17 .89 3.21 .17
gain (loss)
Total from investment .32 .91 3.23 .19
operations
Less Distributions
From net investment income (.03) (.04) (.12) -
From net realized gain (2.75) (1.29) (1.72) -
Total distributions (2.78) (1.33) (1.84) -
Net asset value, end of period $ 25.35 $ 27.81 $ 28.23 $ 26.84
TOTAL RETURN B, C 1.24% 3.32% 12.90% 0.71%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 70 $ 65 $ 37 $ 1
millions)
Ratio of expenses to average 1.74% A 1.73% 1.84% 1.85% A, F
net assets
Ratio of expenses to average 1.71% A, G 1.70% G 1.82% G 1.81% A, G
net assets after expense
reductions
Ratio of net investment 1.27% A .09% .07% 1.24% A
income to average net assets
Portfolio turnover 89% A 113% 59% 55%
</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 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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning $ 28.19 $ 28.59 $ 27.07 $ 23.00 $ 20.09 $ 16.07
of period
Income from Investment
Operations
Net investment income .29 D .32 D .34 D .39 D .42 D .45
Net realized and unrealized .16 .90 3.24 4.68 3.37 4.28
gain (loss)
Total from investment .45 1.22 3.58 5.07 3.79 4.73
operations
Less Distributions
From net investment income (.16) (.33) (.34) (.41) (.42) (.43)
From net realized gain (2.75) (1.29) (1.72) (.59) (.46) (.28)
Total distributions (2.91) (1.62) (2.06) (1.00) (.88) (.71)
Net asset value, end of period $ 25.73 $ 28.19 $ 28.59 $ 27.07 $ 23.00 $ 20.09
TOTAL RETURN B, C 1.76% 4.40% 14.23% 22.87% 19.54% 30.43%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 484 $ 458 $ 493 $ 464 $ 344 $ 297
(in millions)
Ratio of expenses to average .68% A .69% .68% .69% .71% .74%
net assets
Ratio of expenses to average .65% A, E .66% E .67% E .67% E .70% E .73% E
net assets after expense
reductions
Ratio of net investment 2.33% A 1.13% 1.25% 1.60% 2.02% 2.52%
income to average net
assets
Portfolio turnover 89% A 113% 59% 55% 78% 80%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
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 FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
NOTES TO FINANCIAL STATEMENTS
For the period ended May 31, 2000 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Equity 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. Foreign securities are valued based
on quotations from the principal market in which such securities are
normally traded. If trading or events occurring in other markets after
the close of the principal market in which foreign securities are
traded, and before the close of the business of the fund, are expected
to materially affect the value of those securities, then they are
valued at their fair value taking this trading or these events into
account. Fair value is determined in good faith under consistently
applied procedures under the general supervision of the Board of
Trustees. 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. 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.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
FOREIGN CURRENCY TRANSLATION - CONTINUED
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.
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,
non-taxable dividends 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.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
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 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, Federal Agency,
or other obligations found to be satisfactory by FMR 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.
CENTRAL CASH FUNDS. Pursuant to an Exemptive Order issued by the SEC,
the fund may invest in the Taxable Central Cash Fund and the Central
Cash Collateral Fund (the Cash Funds) managed by Fidelity Investments
Money Management, Inc., an affiliate of FMR. The Cash Funds are
open-end money market funds available only to investment companies and
other accounts managed by FMR and its affiliates. The Cash Funds seek
preservation of capital, liquidity, and current income. Income
distributions from the Cash Funds are declared daily and paid monthly
from net interest income. Income distributions earned by the fund are
recorded as either interest income or security lending income in the
accompanying financial statements.
2. OPERATING POLICIES - CONTINUED
FUTURES CONTRACTS. The fund may use futures contracts to manage its
exposure to the stock market. 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. Futures contracts involve, to varying
degrees, risk of loss in excess of the futures variation margin
reflected in the Statement of Assets and Liabilities. The underlying
face amount at value of any open futures contracts at period end is
shown in the schedule of investments under the caption "Futures
Contracts." This amount reflects each contract's exposure to the
underlying instrument at period end. 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 $1,532,076,000 and $2,125,039,000, respectively, of which
U.S. government and government agency obligations aggregated
$8,388,000 and $5,500,000, respectively.
The market value of futures contracts opened and closed during the
period amounted to $224,991,000 and $180,980,000, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus a
fixed individual fund fee rate applied to the average net assets of
the fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds advised by FMR. The rates ranged from .2167% to .5200% for the
period. The annual individual fund 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 an annualized rate of .48% of average net
assets.
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the
1940 Act, the Board of Trustees have adopted separate Distribution and
Service 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
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
DISTRIBUTION AND SERVICE PLAN - CONTINUED
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 $ 146,000 $ 0
CLASS T 5,559,000 45,000
CLASS B 3,971,000 2,983,000
CLASS C 321,000 150,000
$ 9,997,000 $ 3,178,000
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 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 is paid to securities
dealers, banks and other financial institutions.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
SALES LOAD - CONTINUED
For the period, sales charge amounts paid to and retained by FDC were
as follows:
PAID TO FDC RETAINED BY FDC
CLASS A $ 244,000 $ 95,000
CLASS T 282,000 81,000
CLASS B 1,188,000 1,188,000 *
CLASS C 19,000 19,000 *
$ 1,733,000 $ 1,383,000
* 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.
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 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 $ 136,000 .23 *
CLASS T 2,185,000 .20 *
CLASS B 905,000 .23 *
CLASS C 72,000 .23 *
INSTITUTIONAL CLASS 399,000 .17 *
$ 3,697,000
* ANNUALIZED
ACCOUNTING AND SECURITY LENDING FEES. Fidelity Service Company, Inc.
maintains the fund's accounting records and administers the security
lending program. The security lending fee is based on the number and
duration of lending transactions. The accounting fee is based on the
level of average net assets for the month plus out-of-pocket expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $115,000 for the
period.
5. SECURITY LENDING.
The fund lends portfolio securities from time to time in order to earn
additional income. The fund receives collateral in the form of U.S.
Treasury obligations, letters of credit, and/or cash against the
loaned securities, and maintains collateral in an amount not less than
100% of the market value of the loaned securities during the period of
the loan. The market value of the loaned securities is determined at
the close of business of the fund and any additional required
collateral is delivered to the fund on the next business day. If the
borrower defaults on its obligation to return the securities loaned
because of insolvency or other reasons, the fund could experience
delays and costs in recovering the securities loaned or in gaining
access to the collateral. At period end, the value of the securities
loaned amounted to $207,000. The fund received cash collateral of
$210,000 which was invested in cash equivalents.
6. 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 $664,000 under this arrangement.
In addition, through arrangements with the fund's custodian and each
class' transfer agent, 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 $1,000 under the custodian
arrangement, and each applicable class' expenses were reduced as
follows under the transfer agent arrangements:
TRANSFER AGENT CREDITS
CLASS A $ 2,000
CLASS B 2,000
$ 4,000
7. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
SIX MONTHS ENDED MAY 31, YEAR ENDED NOVEMBER 30,
2000 1999
FROM NET INVESTMENT INCOME
Class A $ 544,000 $ 811,000
Class T 7,853,000 16,902,000
Class B 943,000 963,000
Class C 72,000 72,000
Institutional Class 2,819,000 5,627,000
Total $ 12,231,000 $ 24,375,000
FROM NET REALIZED GAIN
Class A $ 11,859,000 $ 3,101,000
Class T 242,070,000 120,155,000
Class B 87,366,000 40,402,000
Class C 6,416,000 1,765,000
Institutional Class 44,412,000 22,283,000
Total $ 392,123,000 $ 187,706,000
$ 404,354,000 $ 212,081,000
8. SHARE TRANSACTIONS.
Transactions for each class of shares for the periods were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SHARES DOLLARS
AMOUNTS IN THOUSANDS SIX MONTHS ENDED MAY 31, YEAR ENDED NOVEMBER 30, SIX MONTHS ENDED MAY 31,
2000 1999 2000
CLASS A Shares sold 1,618 2,776 $ 40,403
Reinvestment of distributions 480 137 11,984
Shares redeemed (1,646) (898) (41,098)
Net increase (decrease) 452 2,015 $ 11,289
CLASS T Shares sold 10,885 21,844 $ 272,873
Reinvestment of distributions 9,444 4,734 238,388
Shares redeemed (27,547) (30,306) (685,772)
Net increase (decrease) (7,218) (3,728) $ (174,511)
CLASS B Shares sold 2,046 6,290 $ 51,186
Reinvestment of distributions 3,127 1,326 78,578
Shares redeemed (7,931) (6,588) (195,519)
Net increase (decrease) (2,758) 1,028 $ (65,755)
CLASS C Shares sold 996 1,541 $ 25,005
Reinvestment of distributions 217 59 5,449
Shares redeemed (805) (576) (19,704)
Net increase (decrease) 408 1,024 $ 10,750
INSTITUTIONAL CLASS Shares 5,148 3,228 $ 125,096
sold
Reinvestment of distributions 1,599 887 40,671
Shares redeemed (4,196) (5,122) (105,518)
Net increase (decrease) 2,551 (1,007) $ 60,249
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
DOLLARS
AMOUNTS IN THOUSANDS YEAR ENDED NOVEMBER 30,
1999
CLASS A Shares sold $ 79,105
Reinvestment of distributions 3,752
Shares redeemed (25,235)
Net increase (decrease) $ 57,622
CLASS T Shares sold $ 622,299
Reinvestment of distributions 130,656
Shares redeemed (860,850)
Net increase (decrease) $ (107,895)
CLASS B Shares sold $ 178,412
Reinvestment of distributions 36,300
Shares redeemed (185,915)
Net increase (decrease) $ 28,797
CLASS C Shares sold $ 43,796
Reinvestment of distributions 1,620
Shares redeemed (16,333)
Net increase (decrease) $ 29,083
INSTITUTIONAL CLASS Shares $ 94,842
sold
Reinvestment of distributions 24,727
Shares redeemed (145,658)
Net increase (decrease) $ (26,089)
</TABLE>
9. 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:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SUMMARY OF TRANSACTIONS WITH
AFFILIATED COMPANIES
AMOUNTS IN THOUSANDS PURCHASE COST SALES COST DIVIDEND INCOME VALUE
AFFILIATE
UNOVA, Inc. $ - $ - $ - $ 44,200
</TABLE>
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research
(U.K.) Inc.
Fidelity Management & Research
(Far East) Inc.
Fidelity Investments Japan Ltd.
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Richard A. Spillane Jr., Vice President
C. Robert Chow, Vice President
Eric D. Roiter, Secretary
Robert A. Dwight, Treasurer
Maria F. Dwyer, Deputy Treasurer
John H. Costello, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
Donald J. Kirk *
Ned C. Lautenbach *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
* INDEPENDENT TRUSTEES
ADVISORY BOARD
J. Michael Cook
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 Telecommunications & Utilities Growth Fund
GROWTH FUNDS
Fidelity Advisor Latin America Fund
Fidelity Advisor Emerging Asia 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 (registered trademark)
Growth Fund
Fidelity Advisor Small Cap Fund
Fidelity Advisor Value Strategies Fund
Fidelity Advisor Mid Cap Fund
Fidelity Advisor Dynamic Capital Appreciation Fund
Fidelity Advisor Equity Growth Fund
Fidelity Advisor Large Cap Fund
Fidelity Advisor Dividend Growth Fund
Fidelity Advisor Growth
Opportunities Fund
EPI-SANN-0700 106126
1.704674.102
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 High Income 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
MONEY MARKET FUNDS
Prime Fund
Treasury Fund
Tax-Exempt Fund
(2_FIDELITY_LOGOS)(registered trademark)
FIDELITY(REGISTERED TRADEMARK) ADVISOR
EQUITY INCOME
FUND - INSTITUTIONAL CLASS
SEMIANNUAL REPORT
MAY 31, 2000
(2_FIDELITY_LOGOS)(registered trademark)
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over
time.
FUND TALK 6 The manager's review of fund
performance, strategy and
outlook.
INVESTMENT CHANGES 9 A summary of major shifts in
the fund's investments over
the past six months.
INVESTMENTS 10 A complete list of the fund's
investments with their
market values.
FINANCIAL STATEMENTS 18 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 27 Notes to the financial
statements.
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 technology sell-off that began in mid-March continued to hamper
equity markets, driving the tech-heavy NASDAQ index down more than 16%
year to date through the end of May. Broader equity indexes, including
the S&P 500(registered trademark), also were down, but not as much as
more concentrated performance measures. In bond markets, Treasuries
got a boost late in the period as economic reports showed the first
signs of a slowing economy.
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 an investment in a money market fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although money market funds seek to preserve the
value of your investment at $1.00 per share, it is possible to lose
money by investing in these types of funds.
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 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). If Fidelity had not reimbursed certain class expenses, the
past 10 year total returns would have been lower.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY ADV EQUITY INCOME - 1.76% -2.33% 101.75% 293.71%
INST CL
Russell 3000 Value 1.19% -1.68% 134.03% 313.71%
Equity Income Funds Average 2.05% -0.62% 102.18% 233.63%
</TABLE>
CUMULATIVE TOTAL RETURNS show Institutional Class' performance in
percentage terms over a set period - in this case, six months, 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 the Institutional Class'
returns to the performance of the Russell 3000 Value Index - a market
capitalization-weighted index of value-oriented stocks of U.S.
domiciled corporations. To measure how Institutional Class'
performance stacked up against its peers, you can compare it to the
equity income funds average, which reflects the performance of mutual
funds with similar objectives tracked by Lipper Inc. The past six
months average represents a peer group of 246 mutual funds. These
benchmarks include reinvested dividends and capital gains, if any, and
exclude the effect of sales charges. Lipper has created new comparison
categories that group funds according to portfolio characteristics and
capitalization, as well as by capitalization only. These averages are
listed on page 5 of this report.*
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY ADV EQUITY INCOME - -2.33% 15.07% 14.69%
INST CL
Russell 3000 Value -1.68% 18.54% 15.26%
Equity Income Funds Average -0.62% 14.99% 12.67%
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 Income -CL I Russell 3000 Value
00080 RS008
1990/05/31 10000.00 10000.00
1990/06/30 9955.67 9786.98
1990/07/31 9795.24 9683.03
1990/08/31 9051.41 8813.27
1990/09/30 8366.93 8370.60
1990/10/31 8176.77 8233.78
1990/11/30 8723.10 8801.24
1990/12/31 8915.15 9027.17
1991/01/31 9368.77 9451.27
1991/02/28 10038.63 10099.70
1991/03/31 10198.84 10277.55
1991/04/30 10198.60 10353.74
1991/05/31 10757.13 10745.31
1991/06/30 10263.40 10290.10
1991/07/31 10825.08 10710.13
1991/08/31 11054.35 10913.43
1991/09/30 10997.07 10839.36
1991/10/31 11180.30 11015.08
1991/11/30 10726.92 10457.51
1991/12/31 11572.73 11320.91
1992/01/31 11689.23 11399.05
1992/02/29 12050.38 11696.75
1992/03/31 11854.60 11530.22
1992/04/30 12277.12 11979.78
1992/05/31 12385.49 12057.56
1992/06/30 12247.59 11960.51
1992/07/31 12565.71 12421.55
1992/08/31 12267.40 12052.26
1992/09/30 12367.55 12223.91
1992/10/31 12517.99 12256.62
1992/11/30 12969.59 12687.26
1992/12/31 13302.26 13007.76
1993/01/31 13706.38 13411.35
1993/02/28 14061.16 13848.36
1993/03/31 14527.97 14265.91
1993/04/30 14477.16 14070.04
1993/05/31 14712.00 14365.80
1993/06/30 14865.92 14667.56
1993/07/31 15071.48 14839.39
1993/08/31 15617.41 15379.11
1993/09/30 15524.45 15434.79
1993/10/31 15710.37 15457.60
1993/11/30 15421.16 15131.61
1993/12/31 15803.33 15433.91
1994/01/31 16547.02 16014.64
1994/02/28 16133.86 15514.52
1994/03/31 15446.27 14926.02
1994/04/30 15987.15 15198.44
1994/05/31 16111.97 15354.36
1994/06/30 16016.08 14983.65
1994/07/31 16571.25 15429.84
1994/08/31 17451.13 15890.18
1994/09/30 17166.98 15400.14
1994/10/31 17504.21 15561.72
1994/11/30 16935.14 14933.09
1994/12/31 16988.09 15133.74
1995/01/31 17258.08 15542.63
1995/02/28 17873.67 16153.23
1995/03/31 18469.51 16479.75
1995/04/30 18970.15 16997.37
1995/05/31 19514.33 17678.15
1995/06/30 19787.09 17953.22
1995/07/31 20520.35 18581.15
1995/08/31 20772.07 18872.66
1995/09/30 21428.37 19514.56
1995/10/31 21197.48 19262.47
1995/11/30 22088.04 20217.62
1995/12/31 22678.09 20737.18
1996/01/31 23357.59 21334.35
1996/02/29 23459.49 21511.84
1996/03/31 23641.19 21885.37
1996/04/30 23811.85 22017.43
1996/05/31 24005.25 22319.73
1996/06/30 23880.40 22310.89
1996/07/31 22989.17 21431.22
1996/08/31 23446.21 22077.36
1996/09/30 24292.01 22925.56
1996/10/31 24797.14 23746.71
1996/11/30 26404.36 25422.95
1996/12/31 26138.50 25215.23
1997/01/31 27038.60 26350.35
1997/02/28 27251.78 26723.53
1997/03/31 26192.47 25787.24
1997/04/30 27310.59 26799.28
1997/05/31 28904.50 28359.43
1997/06/30 30342.99 29598.10
1997/07/31 32540.20 31727.34
1997/08/31 31262.47 30753.64
1997/09/30 32922.67 32630.93
1997/10/31 31496.46 31721.39
1997/11/30 32443.27 33018.19
1997/12/31 33101.53 33997.33
1998/01/31 33037.04 33503.05
1998/02/28 35387.65 35736.02
1998/03/31 37007.82 37850.26
1998/04/30 37188.15 38097.15
1998/05/31 36866.12 37457.33
1998/06/30 37319.05 37872.20
1998/07/31 36763.40 36998.77
1998/08/31 31258.58 31468.43
1998/09/30 32782.58 33272.04
1998/10/31 35478.81 35716.62
1998/11/30 37060.26 37324.56
1998/12/31 38652.22 38587.16
1999/01/31 37924.40 38802.07
1999/02/28 37175.99 38093.90
1999/03/31 37922.82 38802.05
1999/04/30 41046.68 42420.39
1999/05/31 40310.05 42077.83
1999/06/30 41952.32 43321.37
1999/07/31 40391.94 42069.65
1999/08/31 39269.56 40511.86
1999/09/30 37744.26 39140.15
1999/10/31 38924.63 41172.70
1999/11/30 38691.30 40886.41
1999/12/31 40105.98 41153.55
2000/01/31 38154.18 39829.15
2000/02/29 35516.02 37233.00
2000/03/31 39080.19 41445.52
2000/04/30 38942.47 41012.18
2000/05/31 39370.92 41371.48
IMATRL PRASUN SHR__CHT 20000531 20000620 151314 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Equity Income Fund - Institutional Class
on May 31, 1990. As the chart shows, by May 31, 2000, the value of the
investment would have grown to $39,371 - a 293.71% increase on the
initial investment. For comparison, look at how the Russell 3000 Value
Index did over the same period. With dividends and capital gains, if
any, reinvested, the same $10,000 investment would have grown to
$41,371 - a 313.71% increase.
(checkmark)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.
* THE LIPPER EQUITY INCOME FUNDS AVERAGE REFLECTS THE PERFORMANCE
(EXCLUDING SALES CHARGES) OF MUTUAL FUNDS WITH SIMILAR PORTFOLIO
CHARACTERISTICS AND CAPITALIZATIONS. AS OF MAY 31, 2000, THE SIX
MONTH, ONE YEAR, FIVE YEAR, AND 10 YEAR CUMULATIVE TOTAL RETURNS FOR
THE EQUITY INCOME FUNDS AVERAGE WERE, 1.33%, -1.91%, 96.17%, AND
228.96%, RESPECTIVELY. THE ONE YEAR, FIVE YEAR, AND 10 YEAR AVERAGE
ANNUAL TOTAL RETURNS FOR THE EQUITY INCOME FUNDS AVERAGE WERE, -1.91%,
14.34%, AND 12.54%, RESPECTIVELY.
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
U.S. equity investors faced a steadily
declining market during the latter
part of the six-month period that
ended May 31, 2000, after
experiencing continued growth the
prior three months. Two chief
catalysts - a tightening of monetary
policy by the Federal Reserve Board
and the bursting of a speculative
bubble in technology stocks -
sparked a sustained pullback among
the major U.S. equity indexes that
began in March. The tech-heavy
NASDAQ Composite Index reached
a high of 5048 on March 10 before
quickly retreating below the 4000
level. The NASDAQ dropped to
3401 on the final day of the period,
gaining a modest 2.05% return for
the six-month period. The Standard
& Poor's 500SM Index - an index
of 500 widely held stocks - fared
slightly better in returning 2.90%.
Another index of well-established
stocks - the blue chips' Dow Jones
Industrial Average - surged higher
during the NASDAQ's sharp
plummet in April, but the brief rally
wasn't enough to significantly offset
earlier losses, and the Dow returned
-2.55% for the period. The Russell
2000(Registered trademark) Index - a barometer of
small-cap stocks - outperformed the
major indexes of larger companies
with a 5.50% return. As the period
drew to a close, weaker trading
volume suggested investors were
mixed about the direction of U.S.
stocks, and whether the three
interest-rate hikes levied by the
Fed during the period had begun
to cool off the overheated economy.
(photograph of Bob Chow)
An interview with Bob Chow, Portfolio Manager of Fidelity
Advisor Equity Income Fund
Q. HOW DID THE FUND PERFORM, BOB?
A. For the six months that ended May 31, 2000, the fund's
Institutional Class shares returned 1.76%. In comparison, the equity
income funds average tracked by Lipper Inc. returned 2.05% and the
Russell 3000 Value Index returned 1.19% during the same period. For
the 12 months that ended May 31, 2000, the fund's Institutional Class
shares returned -2.33%. During the same period, the Lipper peer group
returned -0.62% and the Russell 3000 Value Index returned -1.68%.
Q. WHAT CAUSED THE FUND TO OUTPERFORM THE INDEX, YET UNDERPERFORM ITS
PEERS DURING THE SIX-MONTH PERIOD?
A. The fund's overweighted positions in the industrial machinery
sector - such as General Electric, which rallied when technology
stocks corrected during the latter half of the period - helped it
outperform the index's holdings in this sector by 22.5%. Additionally,
strong stock selection within the fund's underweighted stake in
financials and slightly overweighted positions in the energy sector
fueled better returns than the benchmark. Compared to its peers, the
fund held a substantially lower position in top-performing technology
stocks than other equity-income funds, many of which maintained
weightings at levels 20 to 35 percentage points greater than the fund.
Q. WHAT STRATEGIES DID YOU PURSUE?
A. I continued to manage the fund within its goals of being
conservative and generating above-average returns. As the period
progressed, I positioned the fund along three emerging trends in the
market. First, I thought the extraordinary price appreciation
experienced in technology during the past year was unsustainable. The
prices of many of these companies rose primarily on speculation,
rather than fundamental evaluations - such as analysis of
price-to-earnings ratios. As a result, I reduced the fund's technology
weighting to 4.2% of the fund's net assets at the period's end, from
7.0% six months earlier, eliminating some names entirely, such as EMC.
Second, I positioned the fund to benefit from a slowdown in the
economy, adding to its weightings in selected financial, nondurable
and energy stocks where valuations were attractive, while reducing its
holdings in the retail sector. The Federal Reserve Board made it clear
- through the implementation of six interest-rate hikes during the
past year - of its intention to slow down the U.S. economy. Toward the
end of the period, we saw some signs that the Fed's actions had begun
to take hold as several companies, such as retailers Circuit City and
Costco, reported slower growth.
Q. WHAT WAS THE THIRD TREND?
A. I expected a recovery in the European currency - the euro - which
declined to new lows during the period. Fund holdings with global
reach such as McDonald's, Colgate-Palmolive and Procter & Gamble,
whose earnings were negatively affected by the euro's weakening, could
benefit from its future strengthening.
Q. ONE OF THE FUND'S POSITIONS IN THE PAPER INDUSTRY - CHAMPION
INTERNATIONAL - SOARED AFTER IT AGREED TO BE ACQUIRED BY INTERNATIONAL
PAPER IN MAY . . .
A. Yes, it did. International Paper, a stock not held by the fund,
recognized that the fundamentals in the paper industry had bottomed
out. However, it has been forecast that there will be very little
paper capacity coming into the marketplace over the next two years. I
think International Paper recognized this, and despite having to
outbid another company - UPM-Kymmene - to acquire Champion, expected
the paper cycle to turn positive and, Champion offered good value. The
acquisition allowed the fund to realize profits in Champion, which was
no longer held at the end of the period. The fund's large position in
Bowater, a blue-chip paper company that was a positive contributor, is
another example of my attempt to exploit the undervalued securities in
the sector.
Q. WHAT STOCKS WERE TOP PERFORMERS? WHICH DISAPPOINTED?
A. Weatherford International, a premier oil services company, was the
fund's top contributor, rallying on the surge in the price of oil.
Varian Semiconductor, a small-cap holding overlooked by Wall Street,
performed well as the demand for semiconductors increased. On the
other hand, AT&T performed below expectations due to increased loss of
market share in its traditional wire-line business. Drug and
pharmaceutical firm Bristol-Myers Squibb underperformed after it
pulled its application to the U.S. Food and Drug Administration for
its promising hypertension drug, Vanlev.
Q. WHAT'S YOUR OUTLOOK, BOB?
A. I'll continue to look for companies that should outperform in a
slowing economic environment, such as financials, nondurables and
selected health care stocks, while shying away from the retail and
technology sectors. When the Fed's tightening has been fully realized
in slowing the economy, I believe the fund will be well-positioned to
take advantage of a return to value-oriented stocks.
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 AND DO NOT NECESSARILY REPRESENT THE VIEWS OF FIDELITY OR
ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH VIEWS ARE
SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER CONDITIONS
AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE
VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE
INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS
FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY FIDELITY FUND.
(checkmark)FUND FACTS
GOAL: seeks to maintain a
yield that exceeds the
composite dividend yield of
the S&P 500; also considers
the potential for achieving
capital appreciation
START DATE: April 25, 1983
SIZE: as of May 31, 2000,
more than $3.5 billion
MANAGER: Bob Chow, since
1996; joined Fidelity in
1989
BOB CHOW ON
TECHNOLOGY STOCKS:
"At the end of the period, I felt we
had seen the peak in the rise of
technology stocks. Looking back at
the euphoria surrounding the
sector in the fourth quarter of 1999
and early 2000, investor
speculation and demand for many
unprofitable companies had
reached illogical valuations. The
bubble burst beginning in March,
and investors in the market began
to use more discretion about which
companies to own. The companies
with earnings drew tepid interest,
while many of the unprofitable ones
- such as Toysmart.com and
DrKoop.com - started to feel the
market's pinch. Suddenly, the well
of operating cash many of these
companies previously had relied on
through public offerings began to dry
up.
"These unprofitable companies
accelerated the growth of the
technology sector as they quickly
spent their cash on equipment
and services. When this
incremental spending dries up,
the sector's growth rate will slow.
This phenomenon of stocks
leading the fundamentals, rather
than the reverse, is a classic sign
of a secular peak. As these
weakened fundamentals begin to
show up in reported earnings
results, I think we will see the
downtrend in technology stocks
resume; it is in this environment
that equity-income funds should
excel as an investment vehicle."
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF MAY 31,
2000
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Exxon Mobil Corp. 4.3 3.3
Citigroup, Inc. 3.5 2.0
General Electric Co. 3.1 4.2
Bowater, Inc. 2.5 2.1
SBC Communications, Inc. 2.4 2.3
American Express Co. 2.3 2.1
Fannie Mae 2.2 2.0
American International Group, 2.2 1.8
Inc.
Freddie Mac 2.2 1.9
Minnesota Mining & 2.1 2.1
Manufacturing Co.
26.8 23.8
TOP FIVE MARKET SECTORS AS OF
MAY 31, 2000
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Finance 26.0 22.5
Utilities 11.1 10.5
Energy 11.1 9.8
Basic Industries 7.7 11.0
Health 7.2 7.9
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
ASSET ALLOCATION (% OF FUND'S
NET ASSETS)
AS OF MAY 31, 2000 * AS OF NOVEMBER 30, 1999 **
Stocks and Equity Futures 93.9% Stocks 95.3%
Convertible Securities 0.4% Convertible Securities 0.3%
Short-Term Investments and Short-Term Investments and
Net Other Assets 5.7% Net Other Assets 4.4%
* FOREIGN INVESTMENTS 4.1% ** FOREIGN INVESTMENTS 4.2%
Row: 1, Col: 1, Value: 93.90000000000001 Row: 1, Col: 1, Value: 95.3
Row: 1, Col: 2, Value: 0.0 Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 0.0 Row: 1, Col: 3, Value: 0.0
Row: 1, Col: 4, Value: 0.4 Row: 1, Col: 4, Value: 0.3
Row: 1, Col: 5, Value: 0.0 Row: 1, Col: 5, Value: 0.0
Row: 1, Col: 6, Value: 0.0 Row: 1, Col: 6, Value: 0.0
Row: 1, Col: 7, Value: 0.0 Row: 1, Col: 7, Value: 0.0
Row: 1, Col: 8, Value: 5.7 Row: 1, Col: 8, Value: 4.4
</TABLE>
INVESTMENTS MAY 31, 2000 (UNAUDITED)
Showing Percentage of Net Assets
<TABLE>
<CAPTION>
<S> <C> <C> <C>
COMMON STOCKS - 92.4%
SHARES VALUE (NOTE 1) (000S)
AEROSPACE & DEFENSE - 1.5%
Boeing Co. 857,800 $ 33,508
Textron, Inc. 300,000 18,825
52,333
BASIC INDUSTRIES - 7.7%
CHEMICALS & PLASTICS - 1.6%
Dow Chemical Co. 300,000 32,119
Olin Corp. 1,600,000 25,000
57,119
IRON & STEEL - 0.4%
Nucor Corp. 400,000 15,550
METALS & MINING - 1.7%
Alcoa, Inc. 500,000 29,219
Phelps Dodge Corp. 660,000 29,618
58,837
PACKAGING & CONTAINERS - 1.3%
Ball Corp. 1,205,717 35,795
Tupperware Corp. 375,000 8,273
44,068
PAPER & FOREST PRODUCTS - 2.7%
Bowater, Inc. 1,685,000 87,093
Georgia-Pacific Corp. 240,000 7,860
94,953
TOTAL BASIC INDUSTRIES 270,527
CONSTRUCTION & REAL ESTATE -
2.5%
BUILDING MATERIALS - 0.5%
American Standard Companies, 400,000 18,475
Inc. (a)
ENGINEERING - 0.7%
Fluor Corp. 770,500 25,041
REAL ESTATE INVESTMENT TRUSTS
- 1.3%
Apartment Investment & 500,000 20,031
Management Co. Class A
Duke-Weeks Realty Corp. 300,000 6,469
Equity Office Properties Trust 640,000 17,000
43,500
TOTAL CONSTRUCTION & REAL 87,016
ESTATE
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
DURABLES - 3.1%
AUTOS, TIRES, & ACCESSORIES -
0.4%
Ford Motor Co. 320,000 $ 15,540
CONSUMER DURABLES - 2.1%
Minnesota Mining & 840,000 72,030
Manufacturing Co.
HOME FURNISHINGS - 0.6%
Leggett & Platt, Inc. 1,100,000 22,069
TOTAL DURABLES 109,639
ENERGY - 11.1%
ENERGY SERVICES - 1.8%
Schlumberger Ltd. (NY Shares) 460,000 33,839
Weatherford International, 640,000 27,560
Inc.
61,399
OIL & GAS - 9.3%
Amerada Hess Corp. 700,000 46,463
Apache Corp. 320,000 19,480
BP Amoco PLC sponsored ADR 1,300,000 70,688
EOG Resources, Inc. 500,000 16,250
Exxon Mobil Corp. 1,800,000 149,949
Grant Prideco, Inc. (a) 700,000 16,275
Tesoro Petroleum Corp. (a) 794,500 8,144
327,249
TOTAL ENERGY 388,648
FINANCE - 26.0%
BANKS - 7.4%
Bank of America Corp. 700,000 38,894
Bank of New York Co., Inc. 800,000 37,550
Bank One Corp. 500,000 16,531
Chase Manhattan Corp. 460,000 34,356
Comerica, Inc. 550,000 27,844
FleetBoston Financial Corp. 720,000 27,225
Mellon Financial Corp. 1,200,000 46,275
Northern Trust Corp. 120,000 7,898
Wells Fargo & Co. 500,000 22,625
259,198
CREDIT & OTHER FINANCE - 7.1%
American Express Co. 1,500,000 80,719
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
FINANCE - CONTINUED
CREDIT & OTHER FINANCE -
CONTINUED
Citigroup, Inc. 2,000,000 $ 124,375
Household International, Inc. 950,000 44,650
249,744
FEDERAL SPONSORED CREDIT - 4.4%
Fannie Mae 1,300,000 78,163
Freddie Mac 1,700,000 75,650
153,813
INSURANCE - 5.6%
American General Corp. 160,000 10,250
American International Group, 680,000 76,543
Inc.
MBIA, Inc. 780,000 45,094
PMI Group, Inc. 520,000 26,390
The Chubb Corp. 560,000 39,200
197,477
SECURITIES INDUSTRY - 1.5%
Lehman Brothers Holdings, 440,000 33,963
Inc.
Morgan Stanley Dean Witter & 258,100 18,567
Co.
52,530
TOTAL FINANCE 912,762
HEALTH - 7.2%
DRUGS & PHARMACEUTICALS - 5.5%
Bristol-Myers Squibb Co. 1,200,000 66,075
Eli Lilly & Co. 740,000 56,333
Merck & Co., Inc. 260,000 19,403
Schering-Plough Corp. 1,100,000 53,213
195,024
MEDICAL EQUIPMENT & SUPPLIES
- 1.7%
Abbott Laboratories 620,000 25,226
Johnson & Johnson 160,000 14,320
St. Jude Medical, Inc. (a) 520,000 18,688
58,234
TOTAL HEALTH 253,258
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
INDUSTRIAL MACHINERY &
EQUIPMENT - 6.5%
ELECTRICAL EQUIPMENT - 3.1%
General Electric Co. 2,100,000 $ 110,513
INDUSTRIAL MACHINERY &
EQUIPMENT - 2.7%
Ingersoll-Rand Co. 780,000 35,539
Kennametal, Inc. 1,304,363 34,403
Parker-Hannifin Corp. 360,000 15,008
Varian Semiconductor 180,000 8,584
Equipment Associates, Inc.
(a)
93,534
POLLUTION CONTROL - 0.7%
Waste Management, Inc. 1,200,000 24,450
TOTAL INDUSTRIAL MACHINERY & 228,497
EQUIPMENT
MEDIA & LEISURE - 3.4%
BROADCASTING - 0.5%
Comcast Corp. Class A 460,000 17,423
(special) (a)
ENTERTAINMENT - 0.5%
Walt Disney Co. 420,000 17,719
LEISURE DURABLES & TOYS - 0.2%
Callaway Golf Co. 500,000 9,063
PUBLISHING - 1.4%
Houghton Mifflin Co. 720,000 28,800
McGraw-Hill Companies, Inc. 380,000 19,546
48,346
RESTAURANTS - 0.8%
McDonald's Corp. 760,000 27,218
TOTAL MEDIA & LEISURE 119,769
NONDURABLES - 5.2%
FOODS - 1.5%
Bestfoods 280,000 18,060
Hershey Foods Corp. 385,000 19,972
Wm. Wrigley Jr. Co. 163,800 13,114
51,146
HOUSEHOLD PRODUCTS - 3.0%
Avon Products, Inc. 420,000 17,351
Colgate-Palmolive Co. 600,000 31,575
Gillette Co. 340,000 11,348
International Flavors & 17,500 595
Fragrances, Inc.
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
NONDURABLES - CONTINUED
HOUSEHOLD PRODUCTS - CONTINUED
Procter & Gamble Co. 400,000 $ 26,600
Unilever NV (NY Shares) 320,000 16,260
103,729
TOBACCO - 0.7%
Philip Morris Companies, Inc. 1,000,000 26,125
TOTAL NONDURABLES 181,000
RETAIL & WHOLESALE - 1.6%
GENERAL MERCHANDISE STORES -
1.1%
Federated Department Stores, 440,000 16,940
Inc. (a)
Jo-Ann Stores, Inc. Class B 720,000 5,805
(non-vtg.) (a)
Wal-Mart Stores, Inc. 300,000 17,288
40,033
RETAIL & WHOLESALE,
MISCELLANEOUS - 0.5%
Home Depot, Inc. 360,000 17,573
TOTAL RETAIL & WHOLESALE 57,606
TECHNOLOGY - 4.2%
COMMUNICATIONS EQUIPMENT - 0.5%
Nokia AB sponsored ADR 160,000 8,320
Nortel Networks Corp. 160,000 8,527
Oni Systems Corp. 1,900 48
16,895
COMPUTER SERVICES & SOFTWARE
- 0.6%
Microsoft Corp. (a) 200,000 12,513
Oracle Corp. (a) 120,000 8,625
21,138
COMPUTERS & OFFICE EQUIPMENT
- 1.8%
Pitney Bowes, Inc. 440,000 19,140
UNOVA, Inc. (a)(c) 3,200,000 44,200
63,340
ELECTRONIC INSTRUMENTS - 0.3%
Novellus Systems, Inc. (a) 200,000 9,638
ELECTRONICS - 1.0%
Motorola, Inc. 80,000 7,500
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
TECHNOLOGY - CONTINUED
ELECTRONICS - CONTINUED
Texas Instruments, Inc. 120,000 $ 8,670
Tyco International Ltd. 400,000 18,825
34,995
TOTAL TECHNOLOGY 146,006
TRANSPORTATION - 1.3%
AIR TRANSPORTATION - 0.5%
Alaska Air Group, Inc. (a) 600,000 18,675
RAILROADS - 0.3%
Burlington Northern Santa Fe 400,000 9,450
Corp.
TRUCKING & FREIGHT - 0.5%
CNF Transportation, Inc. 645,000 16,972
TOTAL TRANSPORTATION 45,097
UTILITIES - 11.1%
CELLULAR - 0.2%
Nextel Communications, Inc. 80,000 7,410
Class A (a)
ELECTRIC UTILITY - 1.7%
DPL, Inc. 1,300,000 30,469
IPALCO Enterprises, Inc. 1,400,000 27,825
58,294
GAS - 1.8%
Dynegy, Inc. Class A 138,158 10,655
El Paso Energy Corp. 700,000 36,050
Enron Corp. 240,000 17,490
64,195
TELEPHONE SERVICES - 7.4%
AT&T Corp. 1,500,000 52,031
BCE, Inc. 200,000 4,678
Bell Atlantic Corp. 700,000 37,013
BellSouth Corp. 1,100,000 51,356
CenturyTel, Inc. 220,000 5,940
SBC Communications, Inc. 1,900,000 83,006
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
UTILITIES - CONTINUED
TELEPHONE SERVICES - CONTINUED
U.S. WEST, Inc. 160,000 $ 11,520
WorldCom, Inc. (a) 380,000 14,298
259,842
TOTAL UTILITIES 389,741
TOTAL COMMON STOCKS 3,241,899
(Cost $2,766,237)
CONVERTIBLE PREFERRED STOCKS
- 0.4%
MEDIA & LEISURE - 0.4%
BROADCASTING - 0.4%
MediaOne Group, Inc. 140,000 13,790
(Vodafone AirTouch PLC)
$3.63 PIES
PUBLISHING - 0.0%
Taylor (J.N.) Holdings Ltd. 50,000 0
9.5% (a)
TOTAL CONVERTIBLE PREFERRED 13,790
STOCKS
(Cost $15,118)
</TABLE>
U.S. TREASURY OBLIGATIONS -
0.1%
MOODY'S RATINGS (UNAUDITED) PRINCIPAL AMOUNT (000S)
U.S. Treasury Bills, yield at - $ 3,000 2,969
date of purchase 6.03%
8/10/00 (d) (Cost $2,965)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
CASH EQUIVALENTS - 7.2%
SHARES VALUE (NOTE 1) (000S)
Central Cash Collateral Fund, 210,400 $ 210
6.54% (b)
Taxable Central Cash Fund, 252,748,241 252,748
6.37% (b)
TOTAL CASH EQUIVALENTS 252,958
(Cost $252,958)
TOTAL INVESTMENT PORTFOLIO - 3,511,616
100.1%
(Cost $3,037,278)
NET OTHER ASSETS - (0.1)% (2,777)
NET ASSETS - 100% $ 3,508,839
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FUTURES CONTRACTS
EXPIRATION DATE UNDERLYING FACE AMOUNT AT UNREALIZED GAIN/(LOSS) (000S)
VALUE (000S)
PURCHASED
145 S&P 500 Stock Index June 2000 $ 51,555 $ (410)
Contracts
THE FACE VALUE OF FUTURES PURCHASED AS A PERCENTAGE OF NET ASSETS - 1.5%
</TABLE>
SECURITY TYPE ABBREVIATIONS
PIES - Premium Income Equity
Securities
LEGEND
(a) Non-income producing
(b) The rate quoted is the annualized seven-day yield of the fund at
period end.
(c) Affiliated company
(d) Security or a portion of the security was pledged to cover margin
requirements for futures contracts. At the period end, the value of
securities pledged amounted to $2,969,000.
INCOME TAX INFORMATION
At May 31, 2000, the aggregate cost of investment securities for
income tax purposes was $3,046,642,000. Net unrealized appreciation
aggregated $464,974,000, of which $653,666,000 related to appreciated
investment securities and $188,692,000 related to depreciated
investment securities.
The fund intends to elect to defer to its fiscal year ending November
30, 2000 approximately $6,428,000 of losses recognized during the
period November 1, 1999 to November 30, 1999.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AMOUNTS IN THOUSANDS (EXCEPT
PER-SHARE AMOUNTS)
MAY 31, 2000 (UNAUDITED)
ASSETS
Investment in securities, at $ 3,511,616
value (cost $3,037,278) -
See accompanying schedule
Receivable for investments 42,364
sold
Receivable for fund shares 2,460
sold
Dividends receivable 5,580
Interest receivable 1,024
Other receivables 11
TOTAL ASSETS 3,563,055
LIABILITIES
Payable for investments $ 31,309
purchased
Payable for fund shares 18,990
redeemed
Accrued management fee 1,396
Distribution fees payable 1,577
Payable for daily variation 181
on futures contracts
Other payables and accrued 553
expenses
Collateral on securities 210
loaned, at value
TOTAL LIABILITIES 54,216
NET ASSETS $ 3,508,839
Net Assets consist of:
Paid in capital $ 2,842,312
Undistributed net investment 22,957
income
Accumulated undistributed net 169,639
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 473,931
(depreciation) on investments
NET ASSETS $ 3,508,839
STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
AMOUNTS IN THOUSANDS (EXCEPT
PER-SHARE AMOUNTS)
MAY 31, 2000 (UNAUDITED)
CALCULATION OF MAXIMUM $25.26
OFFERING PRICE CLASS A: NET
ASSET VALUE and redemption
price per share ($121,020
(divided by) 4,791 shares)
Maximum offering price per $26.80
share (100/94.25 of $25.26)
CLASS T: NET ASSET VALUE and $25.49
redemption price per share
($2,090,219 (divided by)
81,998 shares)
Maximum offering price per $26.41
share (100/96.50 of $25.49)
CLASS B: NET ASSET VALUE and $25.33
offering price per share
($744,385 (divided by)
29,393 shares) A
CLASS C: NET ASSET VALUE and $25.35
offering price per share
($69,553 (divided by)
2,743.3 shares) A
INSTITUTIONAL CLASS: NET $25.73
ASSET VALUE, offering price
and redemption price per
share ($483,662 (divided by)
18,794 shares)
REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS SIX
MONTHS ENDED MAY 31, 2000
(UNAUDITED)
INVESTMENT INCOME $ 47,917
Dividends
Interest 6,063
Security lending 1
TOTAL INCOME 53,981
EXPENSES
Management fee $ 8,701
Transfer agent fees 3,697
Distribution fees 9,997
Accounting and security 326
lending fees
Non-interested trustees' 7
compensation
Custodian fees and expenses 31
Registration fees 102
Audit 24
Legal 27
Miscellaneous 15
Total expenses before 22,927
reductions
Expense reductions (669) 22,258
NET INVESTMENT INCOME 31,723
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 172,470
Foreign currency transactions 64
Futures contracts 7,954 180,488
Change in net unrealized
appreciation (depreciation)
on:
Investment securities (170,824)
Futures contracts (410) (171,234)
NET GAIN (LOSS) 9,254
NET INCREASE (DECREASE) IN $ 40,977
NET ASSETS RESULTING FROM
OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
AMOUNTS IN THOUSANDS SIX MONTHS ENDED MAY 31, 2000 YEAR ENDED NOVEMBER 30, 1999
(UNAUDITED)
INCREASE (DECREASE) IN NET
ASSETS
Operations Net investment $ 31,723 $ 23,696
income
Net realized gain (loss) 180,488 456,249
Change in net unrealized (171,234) (327,761)
appreciation (depreciation)
NET INCREASE (DECREASE) IN 40,977 152,184
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (12,231) (24,375)
From net investment income
From net realized gain (392,123) (187,706)
TOTAL DISTRIBUTIONS (404,354) (212,081)
Share transactions - net (157,978) (18,482)
increase (decrease)
TOTAL INCREASE (DECREASE) (521,355) (78,379)
IN NET ASSETS
NET ASSETS
Beginning of period 4,030,194 4,108,573
End of period (including $ 3,508,839 $ 4,030,194
undistributed net investment
income of $22,957 and
$3,465, respectively)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS A
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 1996 F
SELECTED PER-SHARE DATA
Net asset value, beginning $ 27.72 $ 28.15 $ 26.69 $ 22.78 $ 20.38
of period
Income from Investment
Operations
Net investment income E .25 .23 .24 .23 .06
Net realized and unrealized .16 .88 3.19 4.61 2.44
gain (loss)
Total from investment .41 1.11 3.43 4.84 2.50
operations
Less Distributions
From net investment income (.12) (.25) (.25) (.34) (.10)
From net realized gain (2.75) (1.29) (1.72) (.59) -
Total distributions (2.87) (1.54) (1.97) (.93) (.10)
Net asset value, end of $ 25.26 $ 27.72 $ 28.15 $ 26.69 $ 22.78
period
TOTAL RETURN B, C 1.62% 4.06% 13.82% 22.05% 12.31%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 121 $ 120 $ 65 $ 26 $ 3
millions)
Ratio of expenses to average 1.00% A .99% 1.03% 1.26% G 1.46% A, D, G
net assets
Ratio of expenses to average .96% A, H .96% H 1.02% H 1.25% H 1.44% A, H
net assets after expense
reductions
Ratio of net investment 2.02% A .83% .89% .93% 1.27% A
income to average net assets
Portfolio turnover 89% A 113% 59% 55% 78%
</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 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 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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS T
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning $ 27.95 $ 28.35 $ 26.85 $ 22.83 $ 19.95 $ 15.96
of period
Income from Investment
Operations
Net investment income .22 D .17 D .19 D .26 D .30 D .31
Net realized and unrealized .16 .90 3.22 4.62 3.35 4.26
gain (loss)
Total from investment .38 1.07 3.41 4.88 3.65 4.57
operations
Less Distributions
From net investment income (.09) (.18) (.19) (.27) (.31) (.30)
From net realized gain (2.75) (1.29) (1.72) (.59) (.46) (.28)
Total distributions (2.84) (1.47) (1.91) (.86) (.77) (.58)
Net asset value, end of period $ 25.49 $ 27.95 $ 28.35 $ 26.85 $ 22.83 $ 19.95
TOTAL RETURN B, C 1.48% 3.89% 13.63% 22.12% 18.89% 29.46%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 2,090 $ 2,494 $ 2,635 $ 2,190 $ 1,673 $ 880
(in millions)
Ratio of expenses to average 1.21% A 1.21% 1.21% 1.23% 1.27% 1.48%
net assets
Ratio of expenses to average 1.17% A, E 1.18% E 1.20% E 1.21% E 1.26% E 1.47% E
net assets after expense
reductions
Ratio of net investment 1.80% A .61% .72% 1.05% 1.45% 1.78%
income to average net
assets
Portfolio turnover 89% A 113% 59% 55% 78% 80%
</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 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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS B
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning $ 27.79 $ 28.20 $ 26.73 $ 22.73 $ 19.90 $ 15.94
of period
Income from Investment
Operations
Net investment income .15 D .03 D .05 D .13 D .19 D .26
Net realized and unrealized .17 .88 3.21 4.61 3.33 4.23
gain (loss)
Total from investment .32 .91 3.26 4.74 3.52 4.49
operations
Less Distributions
From net investment income (.03) (.03) (.07) (.15) (.23) (.25)
From net realized gain (2.75) (1.29) (1.72) (.59) (.46) (.28)
Total distributions (2.78) (1.32) (1.79) (.74) (.69) (.53)
Net asset value, end of period $ 25.33 $ 27.79 $ 28.20 $ 26.73 $ 22.73 $ 19.90
TOTAL RETURN B, C 1.25% 3.33% 13.06% 21.52% 18.22% 28.95%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 744 $ 893 $ 878 $ 682 $ 500 $ 270
(in millions)
Ratio of expenses to average 1.75% A 1.72% 1.74% 1.74% E 1.81% 1.85%
net assets
Ratio of expenses to average 1.71% A, F 1.69% F 1.72% F 1.73% F 1.79% F 1.84% F
net assets after expense
reductions
Ratio of net investment 1.27% A .10% .19% .53% .92% 1.41%
income to average net
assets
Portfolio turnover 89% A 113% 59% 55% 78% 80%
</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 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 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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS C
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 27.81 $ 28.23 $ 26.84 $ 26.65
period
Income from Investment
Operations
Net investment income D .15 .02 .02 .02
Net realized and unrealized .17 .89 3.21 .17
gain (loss)
Total from investment .32 .91 3.23 .19
operations
Less Distributions
From net investment income (.03) (.04) (.12) -
From net realized gain (2.75) (1.29) (1.72) -
Total distributions (2.78) (1.33) (1.84) -
Net asset value, end of period $ 25.35 $ 27.81 $ 28.23 $ 26.84
TOTAL RETURN B, C 1.24% 3.32% 12.90% 0.71%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 70 $ 65 $ 37 $ 1
millions)
Ratio of expenses to average 1.74% A 1.73% 1.84% 1.85% A, F
net assets
Ratio of expenses to average 1.71% A, G 1.70% G 1.82% G 1.81% A, G
net assets after expense
reductions
Ratio of net investment 1.27% A .09% .07% 1.24% A
income to average net assets
Portfolio turnover 89% A 113% 59% 55%
</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 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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 1996 1995
SELECTED PER-SHARE DATA
Net asset value, beginning $ 28.19 $ 28.59 $ 27.07 $ 23.00 $ 20.09 $ 16.07
of period
Income from Investment
Operations
Net investment income .29 D .32 D .34 D .39 D .42 D .45
Net realized and unrealized .16 .90 3.24 4.68 3.37 4.28
gain (loss)
Total from investment .45 1.22 3.58 5.07 3.79 4.73
operations
Less Distributions
From net investment income (.16) (.33) (.34) (.41) (.42) (.43)
From net realized gain (2.75) (1.29) (1.72) (.59) (.46) (.28)
Total distributions (2.91) (1.62) (2.06) (1.00) (.88) (.71)
Net asset value, end of period $ 25.73 $ 28.19 $ 28.59 $ 27.07 $ 23.00 $ 20.09
TOTAL RETURN B, C 1.76% 4.40% 14.23% 22.87% 19.54% 30.43%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 484 $ 458 $ 493 $ 464 $ 344 $ 297
(in millions)
Ratio of expenses to average .68% A .69% .68% .69% .71% .74%
net assets
Ratio of expenses to average .65% A, E .66% E .67% E .67% E .70% E .73% E
net assets after expense
reductions
Ratio of net investment 2.33% A 1.13% 1.25% 1.60% 2.02% 2.52%
income to average net
assets
Portfolio turnover 89% A 113% 59% 55% 78% 80%
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
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 FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
NOTES TO FINANCIAL STATEMENTS
For the period ended May 31, 2000 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Equity 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. Foreign securities are valued based
on quotations from the principal market in which such securities are
normally traded. If trading or events occurring in other markets after
the close of the principal market in which foreign securities are
traded, and before the close of the business of the fund, are expected
to materially affect the value of those securities, then they are
valued at their fair value taking this trading or these events into
account. Fair value is determined in good faith under consistently
applied procedures under the general supervision of the Board of
Trustees. 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. 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.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
FOREIGN CURRENCY TRANSLATION - CONTINUED
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.
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,
non-taxable dividends 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.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
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 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, Federal Agency,
or other obligations found to be satisfactory by FMR 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.
CENTRAL CASH FUNDS. Pursuant to an Exemptive Order issued by the SEC,
the fund may invest in the Taxable Central Cash Fund and the Central
Cash Collateral Fund (the Cash Funds) managed by Fidelity Investments
Money Management, Inc., an affiliate of FMR. The Cash Funds are
open-end money market funds available only to investment companies and
other accounts managed by FMR and its affiliates. The Cash Funds seek
preservation of capital, liquidity, and current income. Income
distributions from the Cash Funds are declared daily and paid monthly
from net interest income. Income distributions earned by the fund are
recorded as either interest income or security lending income in the
accompanying financial statements.
2. OPERATING POLICIES - CONTINUED
FUTURES CONTRACTS. The fund may use futures contracts to manage its
exposure to the stock market. 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. Futures contracts involve, to varying
degrees, risk of loss in excess of the futures variation margin
reflected in the Statement of Assets and Liabilities. The underlying
face amount at value of any open futures contracts at period end is
shown in the schedule of investments under the caption "Futures
Contracts." This amount reflects each contract's exposure to the
underlying instrument at period end. 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 $1,532,076,000 and $2,125,039,000, respectively, of which
U.S. government and government agency obligations aggregated
$8,388,000 and $5,500,000, respectively.
The market value of futures contracts opened and closed during the
period amounted to $224,991,000 and $180,980,000, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus a
fixed individual fund fee rate applied to the average net assets of
the fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds advised by FMR. The rates ranged from .2167% to .5200% for the
period. The annual individual fund 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 an annualized rate of .48% of average net
assets.
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the
1940 Act, the Board of Trustees have adopted separate Distribution and
Service 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
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
DISTRIBUTION AND SERVICE PLAN - CONTINUED
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 $ 146,000 $ 0
CLASS T 5,559,000 45,000
CLASS B 3,971,000 2,983,000
CLASS C 321,000 150,000
$ 9,997,000 $ 3,178,000
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 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 is paid to securities
dealers, banks and other financial institutions.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
SALES LOAD - CONTINUED
For the period, sales charge amounts paid to and retained by FDC were
as follows:
PAID TO FDC RETAINED BY FDC
CLASS A $ 244,000 $ 95,000
CLASS T 282,000 81,000
CLASS B 1,188,000 1,188,000 *
CLASS C 19,000 19,000 *
$ 1,733,000 $ 1,383,000
* 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.
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 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 $ 136,000 .23 *
CLASS T 2,185,000 .20 *
CLASS B 905,000 .23 *
CLASS C 72,000 .23 *
INSTITUTIONAL CLASS 399,000 .17 *
$ 3,697,000
* ANNUALIZED
ACCOUNTING AND SECURITY LENDING FEES. Fidelity Service Company, Inc.
maintains the fund's accounting records and administers the security
lending program. The security lending fee is based on the number and
duration of lending transactions. The accounting fee is based on the
level of average net assets for the month plus out-of-pocket expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $115,000 for the
period.
5. SECURITY LENDING.
The fund lends portfolio securities from time to time in order to earn
additional income. The fund receives collateral in the form of U.S.
Treasury obligations, letters of credit, and/or cash against the
loaned securities, and maintains collateral in an amount not less than
100% of the market value of the loaned securities during the period of
the loan. The market value of the loaned securities is determined at
the close of business of the fund and any additional required
collateral is delivered to the fund on the next business day. If the
borrower defaults on its obligation to return the securities loaned
because of insolvency or other reasons, the fund could experience
delays and costs in recovering the securities loaned or in gaining
access to the collateral. At period end, the value of the securities
loaned amounted to $207,000. The fund received cash collateral of
$210,000 which was invested in cash equivalents.
6. 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 $664,000 under this arrangement.
In addition, through arrangements with the fund's custodian and each
class' transfer agent, 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 $1,000 under the custodian
arrangement, and each applicable class' expenses were reduced as
follows under the transfer agent arrangements:
TRANSFER AGENT CREDITS
CLASS A $ 2,000
CLASS B 2,000
$ 4,000
7. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
SIX MONTHS ENDED MAY 31, YEAR ENDED NOVEMBER 30,
2000 1999
FROM NET INVESTMENT INCOME
Class A $ 544,000 $ 811,000
Class T 7,853,000 16,902,000
Class B 943,000 963,000
Class C 72,000 72,000
Institutional Class 2,819,000 5,627,000
Total $ 12,231,000 $ 24,375,000
FROM NET REALIZED GAIN
Class A $ 11,859,000 $ 3,101,000
Class T 242,070,000 120,155,000
Class B 87,366,000 40,402,000
Class C 6,416,000 1,765,000
Institutional Class 44,412,000 22,283,000
Total $ 392,123,000 $ 187,706,000
$ 404,354,000 $ 212,081,000
8. SHARE TRANSACTIONS.
Transactions for each class of shares for the periods were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SHARES DOLLARS
AMOUNTS IN THOUSANDS SIX MONTHS ENDED MAY 31, YEAR ENDED NOVEMBER 30, SIX MONTHS ENDED MAY 31,
2000 1999 2000
CLASS A Shares sold 1,618 2,776 $ 40,403
Reinvestment of distributions 480 137 11,984
Shares redeemed (1,646) (898) (41,098)
Net increase (decrease) 452 2,015 $ 11,289
CLASS T Shares sold 10,885 21,844 $ 272,873
Reinvestment of distributions 9,444 4,734 238,388
Shares redeemed (27,547) (30,306) (685,772)
Net increase (decrease) (7,218) (3,728) $ (174,511)
CLASS B Shares sold 2,046 6,290 $ 51,186
Reinvestment of distributions 3,127 1,326 78,578
Shares redeemed (7,931) (6,588) (195,519)
Net increase (decrease) (2,758) 1,028 $ (65,755)
CLASS C Shares sold 996 1,541 $ 25,005
Reinvestment of distributions 217 59 5,449
Shares redeemed (805) (576) (19,704)
Net increase (decrease) 408 1,024 $ 10,750
INSTITUTIONAL CLASS Shares 5,148 3,228 $ 125,096
sold
Reinvestment of distributions 1,599 887 40,671
Shares redeemed (4,196) (5,122) (105,518)
Net increase (decrease) 2,551 (1,007) $ 60,249
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
DOLLARS
AMOUNTS IN THOUSANDS YEAR ENDED NOVEMBER 30,
1999
CLASS A Shares sold $ 79,105
Reinvestment of distributions 3,752
Shares redeemed (25,235)
Net increase (decrease) $ 57,622
CLASS T Shares sold $ 622,299
Reinvestment of distributions 130,656
Shares redeemed (860,850)
Net increase (decrease) $ (107,895)
CLASS B Shares sold $ 178,412
Reinvestment of distributions 36,300
Shares redeemed (185,915)
Net increase (decrease) $ 28,797
CLASS C Shares sold $ 43,796
Reinvestment of distributions 1,620
Shares redeemed (16,333)
Net increase (decrease) $ 29,083
INSTITUTIONAL CLASS Shares $ 94,842
sold
Reinvestment of distributions 24,727
Shares redeemed (145,658)
Net increase (decrease) $ (26,089)
</TABLE>
9. 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:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SUMMARY OF TRANSACTIONS WITH
AFFILIATED COMPANIES
AMOUNTS IN THOUSANDS PURCHASE COST SALES COST DIVIDEND INCOME VALUE
AFFILIATE
UNOVA, Inc. $ - $ - $ - $ 44,200
</TABLE>
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research
(U.K.) Inc.
Fidelity Management & Research
(Far East) Inc.
Fidelity Investments Japan Ltd.
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Richard A. Spillane Jr., Vice President
C. Robert Chow, Vice President
Eric D. Roiter, Secretary
Robert A. Dwight, Treasurer
Maria F. Dwyer, Deputy Treasurer
John H. Costello, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
Donald J. Kirk *
Ned C. Lautenbach *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
* INDEPENDENT TRUSTEES
ADVISORY BOARD
J. Michael Cook
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 Telecommunications & Utilities Growth Fund
GROWTH FUNDS
Fidelity Advisor Latin America Fund
Fidelity Advisor Emerging Asia 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 (registered trademark)
Growth Fund
Fidelity Advisor Small Cap Fund
Fidelity Advisor Value Strategies Fund
Fidelity Advisor Mid Cap Fund
Fidelity Advisor Dynamic Capital Appreciation Fund
Fidelity Advisor Equity Growth Fund
Fidelity Advisor Large Cap Fund
Fidelity Advisor Dividend Growth Fund
Fidelity Advisor Growth
Opportunities Fund
EPII-SANN-0700 106129
1.704676.102
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 High Income 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
MONEY MARKET FUNDS
Prime Fund
Treasury Fund
Tax-Exempt Fund
(2_FIDELITY_LOGOS)(registered trademark)
FIDELITY(REGISTERED TRADEMARK) ADVISOR
GROWTH OPPORTUNITIES
FUND - CLASS A, CLASS T, CLASS B AND CLASS C
SEMIANNUAL REPORT
MAY 31, 2000
(2_FIDELITY_LOGOS)(registered trademark)
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over
time.
FUND TALK 12 The managers' 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 24 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 33 Notes to the financial
statements.
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 technology sell-off that began in mid-March continued to hamper
equity markets, driving the tech-heavy NASDAQ index down more than 16%
year to date through the end of May. Broader equity indexes, including
the S&P 500(registered trademark), also were down, but not as much as
more concentrated performance measures. In bond markets, Treasuries
got a boost late in the period as economic reports showed the first
signs of a slowing economy.
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 an investment in a money market fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although money market funds seek to preserve the
value of your investment at $1.00 per share, it is possible to lose
money by investing in these types of funds.
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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY ADV GROWTH -7.69% -8.34% 104.82% 351.60%
OPPORTUNITIES - CL A
FIDELITY ADV GROWTH -12.99% -13.61% 93.04% 325.64%
OPPORTUNITIES - CL A (INCL.
5.75% SALES CHARGE)
S&P 500 2.90% 10.48% 190.44% 398.93%
Growth Funds Average 7.32% 20.08% 172.00% 349.50%
</TABLE>
CUMULATIVE TOTAL RETURNS show Class A's performance in percentage
terms over a set period - in this case, six months, 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 500SM 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 Inc. The past six
months average represents a peer group of 1,387 mutual funds. These
benchmarks include reinvested dividends and capital gains, if any, and
exclude the effect of sales charges. Lipper has created new comparison
categories that group funds according to portfolio characteristics and
capitalization, as well as by capitalization only. These averages are
listed on page 5 of this report.*
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY ADV GROWTH -8.34% 15.42% 16.27%
OPPORTUNITIES - CL A
FIDELITY ADV GROWTH -13.61% 14.06% 15.59%
OPPORTUNITIES - CL A (INCL.
5.75% SALES CHARGE)
S&P 500 10.48% 23.77% 17.43%
Growth Funds Average 20.08% 21.60% 15.77%
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
1990/05/31 9425.00 10000.00
1990/06/30 9476.69 9932.00
1990/07/31 9132.08 9900.22
1990/08/31 8126.98 9005.24
1990/09/30 7495.20 8566.68
1990/10/31 7460.74 8529.85
1990/11/30 8253.34 9080.87
1990/12/31 8783.98 9334.23
1991/01/31 9835.50 9741.20
1991/02/28 10718.55 10437.70
1991/03/31 11014.83 10690.29
1991/04/30 11241.40 10715.95
1991/05/31 11857.21 11178.88
1991/06/30 11020.64 10666.88
1991/07/31 11793.31 11163.96
1991/08/31 12252.26 11428.55
1991/09/30 11973.40 11237.69
1991/10/31 11955.97 11388.28
1991/11/30 11247.21 10929.33
1991/12/31 12533.06 12179.64
1992/01/31 12894.40 11953.10
1992/02/29 13477.63 12108.49
1992/03/31 13027.53 11872.38
1992/04/30 13382.54 12221.42
1992/05/31 13572.72 12281.31
1992/06/30 13262.09 12098.32
1992/07/31 13718.53 12593.14
1992/08/31 13338.16 12334.98
1992/09/30 13376.20 12480.53
1992/10/31 13401.56 12524.21
1992/11/30 14048.18 12951.29
1992/12/31 14416.28 13110.59
1993/01/31 14855.80 13220.72
1993/02/28 14896.37 13400.52
1993/03/31 15450.85 13683.27
1993/04/30 15477.89 13352.14
1993/05/31 15910.65 13709.97
1993/06/30 15971.51 13749.73
1993/07/31 16079.70 13694.73
1993/08/31 16573.31 14213.77
1993/09/30 16634.17 14104.32
1993/10/31 17168.36 14396.28
1993/11/30 17087.22 14259.51
1993/12/31 17612.85 14432.05
1994/01/31 18587.45 14922.74
1994/02/28 18306.99 14518.34
1994/03/31 17528.71 13885.34
1994/04/30 17991.47 14063.07
1994/05/31 18089.63 14293.70
1994/06/30 17598.83 13943.51
1994/07/31 18096.64 14400.86
1994/08/31 18860.89 14991.29
1994/09/30 18292.96 14624.00
1994/10/31 18664.57 14953.04
1994/11/30 18068.60 14408.45
1994/12/31 18116.04 14622.13
1995/01/31 18257.10 15001.28
1995/02/28 18813.95 15585.88
1995/03/31 19296.55 16045.82
1995/04/30 19949.91 16518.37
1995/05/31 20781.47 17178.61
1995/06/30 21486.81 17577.67
1995/07/31 22199.57 18160.55
1995/08/31 22355.48 18206.13
1995/09/30 22778.69 18974.43
1995/10/31 22934.60 18906.69
1995/11/30 23491.45 19736.69
1995/12/31 24101.13 20116.82
1996/01/31 24481.99 20801.60
1996/02/29 24413.44 20994.43
1996/03/31 24375.35 21196.61
1996/04/30 24779.07 21509.04
1996/05/31 25281.81 22063.76
1996/06/30 25418.92 22147.83
1996/07/31 24702.89 21169.33
1996/08/31 24900.94 21615.80
1996/09/30 26074.01 22832.33
1996/10/31 26957.61 23462.05
1996/11/30 29075.22 25235.54
1996/12/31 28365.20 24735.63
1997/01/31 29770.94 26281.11
1997/02/28 30021.38 26487.15
1997/03/31 28534.86 25398.80
1997/04/30 29827.49 26915.11
1997/05/31 31669.49 28553.70
1997/06/30 32663.20 29832.90
1997/07/31 35078.81 32206.71
1997/08/31 33794.25 30402.49
1997/09/30 35135.36 32067.63
1997/10/31 34392.10 30996.57
1997/11/30 35563.54 32431.40
1997/12/31 36513.37 32988.25
1998/01/31 36590.85 33353.10
1998/02/28 39003.53 35758.53
1998/03/31 40214.23 37589.72
1998/04/30 40214.23 37967.87
1998/05/31 39839.69 37315.21
1998/06/30 40728.12 38830.95
1998/07/31 40762.96 38417.40
1998/08/31 35528.23 32863.01
1998/09/30 37627.35 34968.22
1998/10/31 40336.17 37812.53
1998/11/30 42966.60 40104.35
1998/12/31 45352.09 42415.16
1999/01/31 45797.89 44188.96
1999/02/28 43766.27 42815.57
1999/03/31 44850.41 44528.62
1999/04/30 46681.59 46253.21
1999/05/31 46435.61 45161.18
1999/06/30 48394.35 47667.62
1999/07/31 47237.33 46179.44
1999/08/31 46062.09 45950.85
1999/09/30 44449.55 44691.34
1999/10/31 46098.53 47519.41
1999/11/30 46107.64 48485.47
1999/12/31 47204.45 51341.27
2000/01/31 44100.63 48761.88
2000/02/29 44336.30 47838.82
2000/03/31 46949.14 52518.89
2000/04/30 45033.05 50938.60
2000/05/31 42563.66 49893.34
IMATRL PRASUN SHR__CHT 20000531 20000620 131926 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Growth Opportunities Fund - Class A on
May 31, 1990, and the current 5.75% sales charge was paid. As the
chart shows, by May 31, 2000, the value of the investment would have
grown to $42,564 - a 325.64% 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 $49,893 - a 398.93% increase.
(checkmark)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.
* THE LIPPER LARGE-CAP VALUE FUNDS AVERAGE REFLECTS THE PERFORMANCE
(EXCLUDING SALES CHARGES) OF MUTUAL FUNDS WITH SIMILAR PORTFOLIO
CHARACTERISTICS AND CAPITALIZATION. THE LIPPER LARGE-CAP SUPERGROUP
AVERAGE REFLECTS THE PERFORMANCE (EXCLUDING SALES CHARGES) OF MUTUAL
FUNDS WITH SIMILAR CAPITALIZATION. AS OF MAY 31, 2000, THE SIX MONTH,
ONE YEAR, FIVE YEAR, AND 10 YEAR CUMULATIVE TOTAL RETURNS FOR THE
LARGE-CAP VALUE FUNDS AVERAGE WERE, 2.37%, 4.15%, 137.49%, AND
300.94%, RESPECTIVELY; THE ONE YEAR, FIVE YEAR, AND 10 YEAR AVERAGE
ANNUAL TOTAL RETURNS WERE, 4.15%, 18.74%, AND 14.77%, RESPECTIVELY.
THE SIX MONTH, ONE YEAR, FIVE YEAR, AND 10 YEAR CUMULATIVE TOTAL
RETURNS FOR LARGE-CAP SUPERGROUP AVERAGE WERE, 5.14%, 15.76%, 175.88%
AND 358.00%, RESPECTIVELY. THE ONE YEAR, FIVE YEAR AND 10 YEAR AVERAGE
ANNUAL TOTAL RETURNS WERE, 15.76%, 22.14%, AND 16.19%, RESPECTIVELY.
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).
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY ADV GROWTH -7.78% -8.51% 103.70% 349.14%
OPPORTUNITIES - CL T
FIDELITY ADV GROWTH -11.00% -11.71% 96.57% 333.42%
OPPORTUNITIES - CL T (INCL.
3.50% SALES CHARGE)
S&P 500 2.90% 10.48% 190.44% 398.93%
Growth Funds Average 7.32% 20.08% 172.00% 349.50%
</TABLE>
CUMULATIVE TOTAL RETURNS show Class T's performance in percentage
terms over a set period - in this case, six months, 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 Inc. The past six months average represents a peer
group of 1,387 mutual funds. These benchmarks include reinvested
dividends and capital gains, if any, and exclude the effect of sales
charges. Lipper has created new comparison categories that group funds
according to portfolio characteristics and capitalization, as well as
by capitalization only. These averages are listed on page 7 of this
report.*
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY ADV GROWTH -8.51% 15.29% 16.21%
OPPORTUNITIES - CL T
FIDELITY ADV GROWTH -11.71% 14.47% 15.80%
OPPORTUNITIES - CL T (INCL.
3.50% SALES CHARGE)
S&P 500 10.48% 23.77% 17.43%
Growth Funds Average 20.08% 21.60% 15.77%
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
1990/05/31 9650.00 10000.00
1990/06/30 9702.93 9932.00
1990/07/31 9350.09 9900.22
1990/08/31 8320.99 9005.24
1990/09/30 7674.13 8566.68
1990/10/31 7638.85 8529.85
1990/11/30 8450.37 9080.87
1990/12/31 8993.68 9334.23
1991/01/31 10070.30 9741.20
1991/02/28 10974.43 10437.70
1991/03/31 11277.79 10690.29
1991/04/30 11509.77 10715.95
1991/05/31 12140.27 11178.88
1991/06/30 11283.73 10666.88
1991/07/31 12074.84 11163.96
1991/08/31 12544.75 11428.55
1991/09/30 12259.24 11237.69
1991/10/31 12241.39 11388.28
1991/11/30 11515.71 10929.33
1991/12/31 12832.25 12179.64
1992/01/31 13202.23 11953.10
1992/02/29 13799.38 12108.49
1992/03/31 13338.53 11872.38
1992/04/30 13702.02 12221.42
1992/05/31 13896.74 12281.31
1992/06/30 13578.69 12098.32
1992/07/31 14046.03 12593.14
1992/08/31 13656.58 12334.98
1992/09/30 13695.53 12480.53
1992/10/31 13721.49 12524.21
1992/11/30 14383.55 12951.29
1992/12/31 14760.44 13110.59
1993/01/31 15210.45 13220.72
1993/02/28 15251.99 13400.52
1993/03/31 15819.70 13683.27
1993/04/30 15847.39 13352.14
1993/05/31 16290.48 13709.97
1993/06/30 16352.79 13749.73
1993/07/31 16463.56 13694.73
1993/08/31 16968.96 14213.77
1993/09/30 17031.27 14104.32
1993/10/31 17578.21 14396.28
1993/11/30 17495.13 14259.51
1993/12/31 18033.32 14432.05
1994/01/31 19031.18 14922.74
1994/02/28 18744.02 14518.34
1994/03/31 17947.17 13885.34
1994/04/30 18420.97 14063.07
1994/05/31 18521.48 14293.70
1994/06/30 18018.96 13943.51
1994/07/31 18528.66 14400.86
1994/08/31 19311.15 14991.29
1994/09/30 18729.67 14624.00
1994/10/31 19110.15 14953.04
1994/11/30 18499.94 14408.45
1994/12/31 18548.51 14622.13
1995/01/31 18692.95 15001.28
1995/02/28 19263.09 15585.88
1995/03/31 19757.21 16045.82
1995/04/30 20426.17 16518.37
1995/05/31 21277.58 17178.61
1995/06/30 21999.75 17577.67
1995/07/31 22729.53 18160.55
1995/08/31 22889.17 18206.13
1995/09/30 23322.48 18974.43
1995/10/31 23482.11 18906.69
1995/11/30 24052.25 19736.69
1995/12/31 24676.49 20116.82
1996/01/31 25066.44 20801.60
1996/02/29 24996.25 20994.43
1996/03/31 24957.26 21196.61
1996/04/30 25370.61 21509.04
1996/05/31 25885.35 22063.76
1996/06/30 26025.74 22147.83
1996/07/31 25292.62 21169.33
1996/08/31 25495.40 21615.80
1996/09/30 26696.46 22832.33
1996/10/31 27616.76 23462.05
1996/11/30 29784.92 25235.54
1996/12/31 29051.94 24735.63
1997/01/31 30483.96 26281.11
1997/02/28 30739.09 26487.15
1997/03/31 29216.54 25398.80
1997/04/30 30533.34 26915.11
1997/05/31 32418.01 28553.70
1997/06/30 33430.30 29832.90
1997/07/31 35907.53 32206.71
1997/08/31 34590.73 30402.49
1997/09/30 35956.91 32067.63
1997/10/31 35191.52 30996.57
1997/11/30 36376.64 32431.40
1997/12/31 37349.29 32988.25
1998/01/31 37419.07 33353.10
1998/02/28 39885.97 35758.53
1998/03/31 41123.84 37589.72
1998/04/30 41115.00 37967.87
1998/05/31 40725.95 37315.21
1998/06/30 41627.83 38830.95
1998/07/31 41654.36 38417.40
1998/08/31 36296.14 32863.01
1998/09/30 38435.89 34968.22
1998/10/31 41203.42 37812.53
1998/11/30 43882.52 40104.35
1998/12/31 46305.99 42415.16
1999/01/31 46766.49 44188.96
1999/02/28 44673.02 42815.57
1999/03/31 45770.48 44528.62
1999/04/30 47642.61 46253.21
1999/05/31 47375.16 45161.18
1999/06/30 49367.19 47667.62
1999/07/31 48177.51 46179.44
1999/08/31 46969.38 45950.85
1999/09/30 45318.58 44691.34
1999/10/31 46997.05 47519.41
1999/11/30 46997.05 48485.47
1999/12/31 48103.37 51341.27
2000/01/31 44943.41 48761.88
2000/02/29 45170.66 47838.82
2000/03/31 47825.32 52518.89
2000/04/30 45862.73 50938.60
2000/05/31 43342.34 49893.34
IMATRL PRASUN SHR__CHT 20000531 20000620 135754 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Growth Opportunities Fund - Class T on
May 31, 1990, and the current 3.50% sales charge was paid. As the
chart shows, by May 31, 2000, the value of the investment would have
grown to $43,342 - a 333.42% 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 $49,893 - a 398.93%
increase.
(checkmark)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.
* THE LIPPER LARGE-CAP VALUE FUNDS AVERAGE REFLECTS THE PERFORMANCE
(EXCLUDING SALES CHARGES) OF MUTUAL FUNDS WITH SIMILAR PORTFOLIO
CHARACTERISTICS AND CAPITALIZATION. THE LIPPER LARGE-CAP SUPERGROUP
AVERAGE REFLECTS THE PERFORMANCE (EXCLUDING SALES CHARGES) OF MUTUAL
FUNDS WITH SIMILAR CAPITALIZATION. AS OF MAY 31, 2000, THE SIX MONTH,
ONE YEAR, FIVE YEAR, AND 10 YEAR CUMULATIVE TOTAL RETURNS FOR THE
LARGE-CAP VALUE FUNDS AVERAGE WERE, 2.37%, 4.15%, 137.49%, AND
300.94%, RESPECTIVELY; THE ONE YEAR, FIVE YEAR, AND 10 YEAR AVERAGE
ANNUAL TOTAL RETURNS WERE, 4.15%, 18.74%, AND 14.77%, RESPECTIVELY.
THE SIX MONTH, ONE YEAR, FIVE YEAR, AND 10 YEAR CUMULATIVE TOTAL
RETURNS FOR LARGE-CAP SUPERGROUP AVERAGE WERE, 5.14%, 15.76%, 175.88%
AND 358.00%, RESPECTIVELY. THE ONE YEAR, FIVE YEAR AND 10 YEAR AVERAGE
ANNUAL TOTAL RETURNS WERE, 15.76%, 22.14%, AND 16.19%, RESPECTIVELY.
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 six months, past one year, past five
years and past 10 years total return figures are 5%, 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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY ADV GROWTH -8.02% -9.02% 100.06% 341.13%
OPPORTUNITIES - CL B
FIDELITY ADV GROWTH -12.14% -13.09% 98.06% 341.13%
OPPORTUNITIES - CL B (INCL.
CONTINGENT DEFERRED SALES
CHARGE)
S&P 500 2.90% 10.48% 190.44% 398.93%
Growth Funds Average 7.32% 20.08% 172.00% 349.50%
</TABLE>
CUMULATIVE TOTAL RETURNS show Class B's performance in percentage
terms over a set period - in this case, six months, 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 Inc. The past six months average represents a peer
group of 1,387 mutual funds. These benchmarks include reinvested
dividends and capital gains, if any, and exclude the effect of sales
charges. Lipper has created new comparison categories that group funds
according to portfolio characteristics and capitalization, as well as
by capitalization only. These averages are listed on page 9 of this
report.*
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY ADV GROWTH -9.02% 14.88% 16.00%
OPPORTUNITIES - CL B
FIDELITY ADV GROWTH -13.09% 14.65% 16.00%
OPPORTUNITIES - CL B (INCL.
CONTINGENT DEFERRED SALES
CHARGE)
S&P 500 10.48% 23.77% 17.43%
Growth Funds Average 20.08% 21.60% 15.77%
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
1990/05/31 10000.00 10000.00
1990/06/30 10054.84 9932.00
1990/07/31 9689.21 9900.22
1990/08/31 8622.79 9005.24
1990/09/30 7952.47 8566.68
1990/10/31 7915.90 8529.85
1990/11/30 8756.86 9080.87
1990/12/31 9319.87 9334.23
1991/01/31 10435.55 9741.20
1991/02/28 11372.46 10437.70
1991/03/31 11686.82 10690.29
1991/04/30 11927.22 10715.95
1991/05/31 12580.60 11178.88
1991/06/30 11692.99 10666.88
1991/07/31 12512.79 11163.96
1991/08/31 12999.74 11428.55
1991/09/30 12703.87 11237.69
1991/10/31 12685.38 11388.28
1991/11/30 11933.38 10929.33
1991/12/31 13297.67 12179.64
1992/01/31 13681.07 11953.10
1992/02/29 14299.88 12108.49
1992/03/31 13822.32 11872.38
1992/04/30 14198.98 12221.42
1992/05/31 14400.77 12281.31
1992/06/30 14071.18 12098.32
1992/07/31 14555.47 12593.14
1992/08/31 14151.90 12334.98
1992/09/30 14192.26 12480.53
1992/10/31 14219.16 12524.21
1992/11/30 14905.23 12951.29
1992/12/31 15295.79 13110.59
1993/01/31 15762.12 13220.72
1993/02/28 15805.17 13400.52
1993/03/31 16393.47 13683.27
1993/04/30 16422.17 13352.14
1993/05/31 16881.33 13709.97
1993/06/30 16945.90 13749.73
1993/07/31 17060.69 13694.73
1993/08/31 17584.42 14213.77
1993/09/30 17648.99 14104.32
1993/10/31 18215.76 14396.28
1993/11/30 18129.67 14259.51
1993/12/31 18687.37 14432.05
1994/01/31 19721.43 14922.74
1994/02/28 19423.86 14518.34
1994/03/31 18598.10 13885.34
1994/04/30 19089.09 14063.07
1994/05/31 19193.24 14293.70
1994/06/30 18672.49 13943.51
1994/07/31 19200.68 14400.86
1994/08/31 20011.56 14991.29
1994/09/30 19408.98 14624.00
1994/10/31 19803.26 14953.04
1994/11/30 19170.92 14408.45
1994/12/31 19221.26 14622.13
1995/01/31 19370.93 15001.28
1995/02/28 19961.75 15585.88
1995/03/31 20473.79 16045.82
1995/04/30 21167.02 16518.37
1995/05/31 22049.30 17178.61
1995/06/30 22797.67 17577.67
1995/07/31 23553.92 18160.55
1995/08/31 23719.35 18206.13
1995/09/30 24168.37 18974.43
1995/10/31 24333.80 18906.69
1995/11/30 24924.61 19736.69
1995/12/31 25571.49 20116.82
1996/01/31 25975.59 20801.60
1996/02/29 25902.85 20994.43
1996/03/31 25862.44 21196.61
1996/04/30 26290.79 21509.04
1996/05/31 26824.20 22063.76
1996/06/30 26969.68 22147.83
1996/07/31 26209.97 21169.33
1996/08/31 26420.10 21615.80
1996/09/30 27664.73 22832.33
1996/10/31 28618.41 23462.05
1996/11/30 30865.21 25235.54
1996/12/31 30105.63 24735.63
1997/01/31 31589.59 26281.11
1997/02/28 31853.98 26487.15
1997/03/31 30276.20 25398.80
1997/04/30 31623.71 26915.11
1997/05/31 33559.68 28553.70
1997/06/30 34583.10 29832.90
1997/07/31 37133.12 32206.71
1997/08/31 35751.51 30402.49
1997/09/30 37141.65 32067.63
1997/10/31 36331.44 30996.57
1997/11/30 37542.49 32431.40
1997/12/31 38524.15 32988.25
1998/01/31 38578.16 33353.10
1998/02/28 41099.31 35758.53
1998/03/31 42355.30 37589.72
1998/04/30 42327.80 37967.87
1998/05/31 41915.25 37315.21
1998/06/30 42822.86 38830.95
1998/07/31 42832.03 38417.40
1998/08/31 37303.84 32863.01
1998/09/30 39476.61 34968.22
1998/10/31 42300.30 37812.53
1998/11/30 45032.30 40104.35
1998/12/31 47502.16 42415.16
1999/01/31 47940.56 44188.96
1999/02/28 45783.57 42815.57
1999/03/31 46881.15 44528.62
1999/04/30 48780.45 46253.21
1999/05/31 48484.58 45161.18
1999/06/30 50498.40 47667.62
1999/07/31 49257.66 46179.44
1999/08/31 47997.82 45950.85
1999/09/30 46289.41 44691.34
1999/10/31 47978.73 47519.41
1999/11/30 47959.64 48485.47
1999/12/31 49070.13 51341.27
2000/01/31 45818.80 48761.88
2000/02/29 46032.06 47838.82
2000/03/31 48708.47 52518.89
2000/04/30 46693.17 50938.60
2000/05/31 44112.73 49893.34
IMATRL PRASUN SHR__CHT 20000531 20000620 140122 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Growth Opportunities Fund - Class B on
May 31, 1990. As the chart shows, by May 31, 2000, the value of the
investment would have grown to $44,113 - a 341.13% 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
$49,893 - a 398.93% increase.
(checkmark)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.
* THE LIPPER LARGE-CAP VALUE FUNDS AVERAGE REFLECTS THE PERFORMANCE
(EXCLUDING SALES CHARGES) OF MUTUAL FUNDS WITH SIMILAR PORTFOLIO
CHARACTERISTICS AND CAPITALIZATION. THE LIPPER LARGE-CAP SUPERGROUP
AVERAGE REFLECTS THE PERFORMANCE (EXCLUDING SALES CHARGES) OF MUTUAL
FUNDS WITH SIMILAR CAPITALIZATION. AS OF MAY 31, 2000, THE SIX MONTH,
ONE YEAR, FIVE YEAR, AND 10 YEAR CUMULATIVE TOTAL RETURNS FOR THE
LARGE-CAP VALUE FUNDS AVERAGE WERE, 2.37%, 4.15%, 137.49%, AND
300.94%, RESPECTIVELY; THE ONE YEAR, FIVE YEAR, AND 10 YEAR AVERAGE
ANNUAL TOTAL RETURNS WERE, 4.15%, 18.74%, AND 14.77%, RESPECTIVELY.
THE SIX MONTH, ONE YEAR, FIVE YEAR, AND 10 YEAR CUMULATIVE TOTAL
RETURNS FOR LARGE-CAP SUPERGROUP AVERAGE WERE, 5.14%, 15.76%, 175.88%
AND 358.00%, RESPECTIVELY. THE ONE YEAR, FIVE YEAR AND 10 YEAR AVERAGE
ANNUAL TOTAL RETURNS WERE, 15.76%, 22.14%, AND 16.19%, RESPECTIVELY.
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 six months, past one year, past five years and past 10
years total return figures are 1% 1%, 0%, and 0%, respectively. If
Fidelity had not reimbursed certain class expenses, the past five
years and 10 years total returns would have been lower.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY ADV GROWTH -8.03% -9.00% 100.07% 341.15%
OPPORTUNITIES - CL C
FIDELITY ADV GROWTH -8.85% -9.81% 100.07% 341.15%
OPPORTUNITIES - CL C (INCL.
CONTINGENT DEFERRED SALES
CHARGE)
S&P 500 2.90% 10.48% 190.44% 398.93%
Growth Funds Average 7.32% 20.08% 172.00% 349.50%
</TABLE>
CUMULATIVE TOTAL RETURNS show Class C's performance in percentage
terms over a set period - in this case, six months, 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 Inc. The past six months average represents a peer
group of 1,387 mutual funds. These benchmarks include reinvested
dividends and capital gains, if any, and exclude the effect of sales
charges. Lipper has created new comparison categories that group funds
according to portfolio characteristics and capitalization, as well as
by capitalization only. These averages are listed on page 11 of this
report.*
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY ADV GROWTH -9.00% 14.88% 16.00%
OPPORTUNITIES - CL C
FIDELITY ADV GROWTH -9.81% 14.88% 16.00%
OPPORTUNITIES - CL C (INCL.
CONTINGENT DEFERRED SALES
CHARGE)
S&P 500 10.48% 23.77% 17.43%
Growth Funds Average 20.08% 21.60% 15.77%
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
1990/05/31 10000.00 10000.00
1990/06/30 10054.84 9932.00
1990/07/31 9689.21 9900.22
1990/08/31 8622.79 9005.24
1990/09/30 7952.47 8566.68
1990/10/31 7915.90 8529.85
1990/11/30 8756.86 9080.87
1990/12/31 9319.87 9334.23
1991/01/31 10435.55 9741.20
1991/02/28 11372.46 10437.70
1991/03/31 11686.82 10690.29
1991/04/30 11927.22 10715.95
1991/05/31 12580.60 11178.88
1991/06/30 11692.99 10666.88
1991/07/31 12512.79 11163.96
1991/08/31 12999.74 11428.55
1991/09/30 12703.87 11237.69
1991/10/31 12685.38 11388.28
1991/11/30 11933.38 10929.33
1991/12/31 13297.67 12179.64
1992/01/31 13681.07 11953.10
1992/02/29 14299.88 12108.49
1992/03/31 13822.32 11872.38
1992/04/30 14198.98 12221.42
1992/05/31 14400.77 12281.31
1992/06/30 14071.18 12098.32
1992/07/31 14555.47 12593.14
1992/08/31 14151.90 12334.98
1992/09/30 14192.26 12480.53
1992/10/31 14219.16 12524.21
1992/11/30 14905.23 12951.29
1992/12/31 15295.79 13110.59
1993/01/31 15762.12 13220.72
1993/02/28 15805.17 13400.52
1993/03/31 16393.47 13683.27
1993/04/30 16422.17 13352.14
1993/05/31 16881.33 13709.97
1993/06/30 16945.90 13749.73
1993/07/31 17060.69 13694.73
1993/08/31 17584.42 14213.77
1993/09/30 17648.99 14104.32
1993/10/31 18215.76 14396.28
1993/11/30 18129.67 14259.51
1993/12/31 18687.37 14432.05
1994/01/31 19721.43 14922.74
1994/02/28 19423.86 14518.34
1994/03/31 18598.10 13885.34
1994/04/30 19089.09 14063.07
1994/05/31 19193.24 14293.70
1994/06/30 18672.49 13943.51
1994/07/31 19200.68 14400.86
1994/08/31 20011.56 14991.29
1994/09/30 19408.98 14624.00
1994/10/31 19803.26 14953.04
1994/11/30 19170.92 14408.45
1994/12/31 19221.26 14622.13
1995/01/31 19370.93 15001.28
1995/02/28 19961.75 15585.88
1995/03/31 20473.79 16045.82
1995/04/30 21167.02 16518.37
1995/05/31 22049.30 17178.61
1995/06/30 22797.67 17577.67
1995/07/31 23553.92 18160.55
1995/08/31 23719.35 18206.13
1995/09/30 24168.37 18974.43
1995/10/31 24333.80 18906.69
1995/11/30 24924.61 19736.69
1995/12/31 25571.49 20116.82
1996/01/31 25975.59 20801.60
1996/02/29 25902.85 20994.43
1996/03/31 25862.44 21196.61
1996/04/30 26290.79 21509.04
1996/05/31 26824.20 22063.76
1996/06/30 26969.68 22147.83
1996/07/31 26209.97 21169.33
1996/08/31 26420.10 21615.80
1996/09/30 27664.73 22832.33
1996/10/31 28618.41 23462.05
1996/11/30 30865.21 25235.54
1996/12/31 30105.63 24735.63
1997/01/31 31589.59 26281.11
1997/02/28 31853.98 26487.15
1997/03/31 30276.20 25398.80
1997/04/30 31623.71 26915.11
1997/05/31 33559.68 28553.70
1997/06/30 34583.10 29832.90
1997/07/31 37133.12 32206.71
1997/08/31 35751.51 30402.49
1997/09/30 37141.65 32067.63
1997/10/31 36331.44 30996.57
1997/11/30 37557.73 32431.40
1997/12/31 38535.91 32988.25
1998/01/31 38589.74 33353.10
1998/02/28 41109.44 35758.53
1998/03/31 42360.16 37589.72
1998/04/30 42332.77 37967.87
1998/05/31 41912.82 37315.21
1998/06/30 42825.76 38830.95
1998/07/31 42825.76 38417.40
1998/08/31 37302.50 32863.01
1998/09/30 39484.42 34968.22
1998/10/31 42305.39 37812.53
1998/11/30 45035.06 40104.35
1998/12/31 47498.63 42415.16
1999/01/31 47935.86 44188.96
1999/02/28 45775.13 42815.57
1999/03/31 46879.29 44528.62
1999/04/30 48773.50 46253.21
1999/05/31 48478.42 45161.18
1999/06/30 50496.37 47667.62
1999/07/31 49258.95 46179.44
1999/08/31 48002.49 45950.85
1999/09/30 46289.14 44691.34
1999/10/31 47983.45 47519.41
1999/11/30 47964.42 48485.47
1999/12/31 49073.80 51341.27
2000/01/31 45828.58 48761.88
2000/02/29 46041.44 47838.82
2000/03/31 48712.82 52518.89
2000/04/30 46701.30 50938.60
2000/05/31 44115.06 49893.34
IMATRL PRASUN SHR__CHT 20000531 20000620 141340 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Growth Opportunities Fund - Class C on
May 31, 1990. As the chart shows, by May 31, 2000, the value of the
investment would have grown to $44,115 - a 341.15% 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
$49,893 - a 398.93% increase.
(checkmark)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.
* THE LIPPER LARGE-CAP VALUE FUNDS AVERAGE REFLECTS THE PERFORMANCE
(EXCLUDING SALES CHARGES) OF MUTUAL FUNDS WITH SIMILAR PORTFOLIO
CHARACTERISTICS AND CAPITALIZATION. THE LIPPER LARGE-CAP SUPERGROUP
AVERAGE REFLECTS THE PERFORMANCE (EXCLUDING SALES CHARGES) OF MUTUAL
FUNDS WITH SIMILAR CAPITALIZATION. AS OF MAY 31, 2000, THE SIX MONTH,
ONE YEAR, FIVE YEAR, AND 10 YEAR CUMULATIVE TOTAL RETURNS FOR THE
LARGE-CAP VALUE FUNDS AVERAGE WERE, 2.37%, 4.15%, 137.49%, AND
300.94%, RESPECTIVELY; THE ONE YEAR, FIVE YEAR, AND 10 YEAR AVERAGE
ANNUAL TOTAL RETURNS WERE, 4.15%, 18.74%, AND 14.77%, RESPECTIVELY.
THE SIX MONTH, ONE YEAR, FIVE YEAR, AND 10 YEAR CUMULATIVE TOTAL
RETURNS FOR LARGE-CAP SUPERGROUP AVERAGE WERE, 5.14%, 15.76%, 175.88%
AND 358.00%, RESPECTIVELY. THE ONE YEAR, FIVE YEAR AND 10 YEAR AVERAGE
ANNUAL TOTAL RETURNS WERE, 15.76%, 22.14%, AND 16.19%, RESPECTIVELY.
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
U.S. equity investors faced a steadily
declining market during the latter
part of the six-month period that
ended May 31, 2000, after
experiencing continued growth the
prior three months. Two chief
catalysts - a tightening of monetary
policy by the Federal Reserve Board
and the bursting of a speculative
bubble in technology stocks -
sparked a sustained pullback among
the major U.S. equity indexes that
began in March. The tech-heavy
NASDAQ Composite Index reached
a high of 5048 on March 10 before
quickly retreating below the 4000
level. The NASDAQ dropped to
3401 on the final day of the period,
gaining a modest 2.05% return for
the six-month period. The Standard
& Poor's 500SM Index - an index
of 500 widely held stocks - fared
slightly better in returning 2.90%.
Another index of well-established
stocks - the blue chips' Dow Jones
Industrial Average - surged higher
during the NASDAQ's sharp
plummet in April, but the brief rally
wasn't enough to significantly offset
earlier losses, and the Dow returned
-2.55% for the period. The Russell
2000(Registered trademark) Index - a barometer of
small-cap stocks - outperformed the
major indexes of larger companies
with a 5.50% return. As the period
drew to a close, weaker trading
volume suggested investors were
mixed about the direction of U.S.
stocks, and whether the three
interest-rate hikes levied by the
Fed during the period had begun
to cool off the overheated economy.
(photograph of Bettina Doulton)
NOTE TO SHAREHOLDERS: Bettina Doulton became Portfolio Manager of
Fidelity Advisor Growth Opportunities Fund on February 1, 2000.
Q. HOW DID THE FUND PERFORM OVER THE PAST SIX MONTHS, BETTINA?
A. During the six-month period ending May 31, 2000, the fund's Class
A, Class T, Class B and Class C shares returned -7.69%, -7.78%, -8.02%
and -8.03%, respectively. During the same period, the Standard &
Poor's 500 Index returned 2.90%, while the growth funds average
tracked by Lipper Inc. was up 7.32%. For the 12-month period ending
May 31, 2000, the fund's Class A, Class T, Class B and Class C shares
returned -8.34%, -8.51%, -9.02% and -9.00%, respectively. Meanwhile,
the S&P 500 index gained 10.48%, while the growth funds average
returned 20.08%.
Q. WHAT ACCOUNTED FOR THE FUND'S SUBPAR PERFORMANCE RELATIVE TO ITS
PEERS AND THE STANDARD & POOR'S 500 INDEX DURING THE PAST SIX MONTHS?
A. In the first half of the period, the fund was considerably
underweighted in the technology and telecommunication stocks that
drove equity markets to record-setting performance. The fund's lack of
exposure to these sectors relative to the index and peer group was a
big detractor from performance. After taking over the fund in
February, I repositioned it to be more in line with expectations -
with more of a growth emphasis than a value proposition - and
increased the tech position to approximately 42% of net assets at the
end of the period, compared to about 13% six months ago.
Q. HOW DID THAT STRATEGY PLAY OUT?
A. Unfortunately, on a short-term basis, the repositioning seemed
poorly timed. Fund performance was negatively affected by the massive
rotation away from technology that began in the middle of March and
persisted through the end of the period. To illustrate how far the
sector fell, the NASDAQ Composite Index, which is seen by many as the
benchmark for technology and telecommunications stocks, fell from 5048
on March 10 to 3401 on the final day of the period. That's a 33%
decline over a 10-week period. Several factors contributed to the tech
sell-off, including negative investor sentiment about high valuations,
fears of a slowdown in earnings growth given the Federal Reserve
Board's actions to slow the economy, as well as liquidity.
Q. IN ADDITION TO BOOSTING ITS TECHNOLOGY WEIGHTING, WHAT OTHER
CHANGES DID YOU MAKE TO THE FUND SINCE TAKING OVER IN FEBRUARY?
A. In light of margin pressures and credit concerns in the finance
sector, I reduced the aggregate financial services weighting to 13.8%
of net assets compared to 21.1% six months ago. In addition, I shifted
the asset allocation within the sector, reducing the fund's positions
in regional banks and mortgage insurance companies, and adding more
capital markets exposure, which was a plus. Two other moves also
helped. I reduced the fund's holdings in consumer nondurables, largely
due to the elimination of the Philip Morris position. I was less
enamored with the fundamental prospects of the company than my
predecessor. The fund's bond position also was eliminated during the
period as I expect to focus largely on equity investments.
Q. FOREIGN INVESTMENTS ACCOUNTED FOR APPROXIMATELY 12% OF THE FUND'S
NET ASSETS AT THE END OF THE PERIOD, NEARLY TWICE AS MUCH AS WAS HELD
SIX MONTHS AGO . . .
A. The fund's international exposure is a combination of holdings in
companies that are owned as interests in and trade with their
respective global industry group regardless of where they are
domiciled, and companies that are owned as plays on their respective
fundamental prospects and trade with their local markets. The bulk of
the fund's international weighting is in the former group. I would
include Nokia, Ericsson, Schlumberger and British Petroleum in this
group. The latter group - a much smaller portion of aggregate fund
assets - includes China Telecom, Nomura and Telefonica. In each case,
fundamental research is the cornerstone for these investments.
Q. WHICH STOCKS WERE AMONG THE STRONGEST CONTRIBUTORS TO ABSOLUTE
PERFORMANCE DURING THE SIX-MONTH PERIOD?
A. Despite the travails that the technology sector recently endured,
six of the fund's 10 best-performing stocks came from that area. Some
of these are very familiar names: Micron Technology, Intel, SCI
Systems, Analog Devices, Nokia and Adobe Systems. All benefited from
the growth prospects surrounding the rapid acceleration and
penetration of Internet- and wireless-related communications. General
Electric, the fund's largest holding at the end of the period, also
was one of its largest contributors. GE experienced an acceleration in
revenue and profit growth due to market share gains, acquisitions and
strong global economies. Profitability continued to improve, driven by
multiple initiatives including 6-sigma (reducing the costs related to
defects in operating processes), globalization and "e-enabling" of
operating processes. Eli Lilly was a top performer as well, benefiting
from investor appreciation of its strong product pipeline and
increased confidence in the company's earnings growth potential.
Q. WHICH STOCKS DID NOT PERFORM AS WELL AS YOU EXPECTED?
A. Although I reduced these positions dramatically since taking over
the fund, Fannie Mae and Freddie Mac significantly detracted from
performance during the period. Several factors caused the
underperformance of these two stocks, including the Fed's recent
string of interest-rate hikes and increased political bantering about
capital ratios and funding requirements. Two other disappointments
were retailers Home Depot and Wal-Mart. Despite continuing to deliver
strong results, these stocks came under pressure as investors grew
increasingly concerned that results would come under pressure due to
slowing consumer spending caused by interest-rate increases.
Q. WHAT IS YOUR OUTLOOK FOR THE NEXT FEW MONTHS, BETTINA?
A. It comes down to a question of whether you believe the technology
sector's recent struggle is a short-term rotation or a permanent
change in leadership. I believe that what we've seen is just a violent
short-term rotation similar to what we experienced at this time last
year. On a medium-term basis, I expect the companies that are the
enablers of our networked, communications economy - i.e., the
companies that provide servers, data storage, fiber optics, etc. - are
going to lead, because we still appear to be in the early stages of
the "e-economy" build-out. As the economy slows at the hands of
interest-rate hikes, companies with good unit growth stories -
technology being a good example - are expected to be relatively good
performers versus companies more dependent on price increases for
earnings growth. Longer term, the question that intrigues me is which
non-technology companies will position themselves to be the
beneficiaries of the e-economy. The defining characteristic between
the winners and the losers here will be the ability to use the
Internet as a productivity enhancement and to gain market share by
serving their customers better.
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 AND DO NOT NECESSARILY REPRESENT THE VIEWS OF FIDELITY OR
ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH VIEWS ARE
SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER CONDITIONS
AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE
VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE
INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS
FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY FIDELITY FUND.
(checkmark)FUND FACTS
GOAL: to provide capital
growth by investing primarily
in common stocks
START DATE: November 18,
1987
SIZE: as of May 31, 2000,
more than $20.9 billion
MANAGER: Bettina Doulton,
since February 2000; joined
Fidelity in 1986
BETTINA DOULTON ON
INTRADAY MARKET VOLATILITY:
"Market volatility has risen
dramatically over the past five
years. Here's an illustration: On a
closing price basis for the S&P 500
in 1995, only 5% of that year's
trading days had greater than 1%
volatility at the close, meaning the
S&P closed at least 1% higher or
lower than the previous day.
Through May 22 of this year, 47% of
the trading days closed up or down
greater than 1%. Intraday
fluctuations - price swings within
a given trading day - have risen
even more dramatically. In 1995,
only 17% of the trading days
experienced intraday fluctuation of
greater than 1%. So far in 2000,
intraday moves of greater than 1%
occurred in 94% of the trading
days.
"I believe there are several trends
contributing to this volatility. First
and foremost is uncertainty;
investors are uncertain about the
severity of the economic and
earnings slowdown, how long it will
persist and how much the market
has already discounted. Second,
there's been a dramatic change in
market participation over the past
few years, with more individuals
and more hedge funds, and a
decline in the average holding
periods for stocks and mutual
funds. Third, the speed of market
information dissemination via
sources such as the Internet and
CNBC has risen tremendously,
making the markets much more
reactionary. Given all of the
uncertainty, I believe volatility
of this nature will continue for
some time to come."
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF MAY 31,
2000
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
General Electric Co. 4.0 0.7
Cisco Systems, Inc. 3.8 0.0
Fannie Mae 2.9 6.3
Intel Corp. 2.7 0.5
Texas Instruments, Inc. 2.5 0.0
Eli Lilly & Co. 2.4 1.1
Nokia AB sponsored ADR 2.1 0.0
Schering-Plough Corp. 2.1 1.1
Exxon Mobil Corp. 2.1 1.5
Wal-Mart Stores, Inc. 2.1 1.5
26.7 12.7
TOP FIVE MARKET SECTORS AS OF
MAY 31, 2000
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Technology 42.4 12.9
Finance 13.8 21.1
Health 9.5 11.1
Energy 7.2 7.6
Utilities 6.9 5.3
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
ASSET ALLOCATION (% OF FUND'S
NET ASSETS)
AS OF MAY 31, 2000 * AS OF NOVEMBER 30, 1999 **
Stocks 96.6% Stocks 88.2%
Short-Term Investments and Bonds 7.3%
Net Other Assets 3.4%
Short-Term Investments and
Net Other Assets 4.5%
* FOREIGN INVESTMENTS 11.5% ** FOREIGN INVESTMENTS 6.1%
Row: 1, Col: 1, Value: 96.59999999999999 Row: 1, Col: 1, Value: 88.2
Row: 1, Col: 2, Value: 0.0 Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 0.0 Row: 1, Col: 3, Value: 0.0
Row: 1, Col: 4, Value: 0.0 Row: 1, Col: 4, Value: 7.3
Row: 1, Col: 5, Value: 0.0 Row: 1, Col: 5, Value: 0.0
Row: 1, Col: 6, Value: 0.0 Row: 1, Col: 6, Value: 0.0
Row: 1, Col: 7, Value: 0.0 Row: 1, Col: 7, Value: 0.0
Row: 1, Col: 8, Value: 3.4 Row: 1, Col: 8, Value: 4.5
</TABLE>
INVESTMENTS MAY 31, 2000 (UNAUDITED)
Showing Percentage of Net Assets
<TABLE>
<CAPTION>
<S> <C> <C> <C>
COMMON STOCKS - 96.6%
SHARES VALUE (NOTE 1) (000S)
AEROSPACE & DEFENSE - 1.0%
Boeing Co. 5,374,800 $ 209,953
BASIC INDUSTRIES - 0.3%
CHEMICALS & PLASTICS - 0.3%
Praxair, Inc. 1,534,200 64,436
DURABLES - 0.2%
CONSUMER DURABLES - 0.2%
Minnesota Mining & 561,700 48,166
Manufacturing Co.
ENERGY - 7.2%
ENERGY SERVICES - 1.6%
Baker Hughes, Inc. 564,400 20,460
Halliburton Co. 4,058,300 206,973
Schlumberger Ltd. (NY Shares) 1,557,100 114,544
341,977
OIL & GAS - 5.6%
BP Amoco PLC sponsored ADR 3,211,756 174,639
Chevron Corp. 464,000 42,891
Conoco, Inc. Class B 1,388,628 39,576
Cooper Cameron Corp. (a) 1,552,700 108,301
Exxon Mobil Corp. 5,254,600 437,774
Royal Dutch Petroleum Co. (NY 2,591,500 161,807
Shares)
Tosco Corp. 3,681,400 112,743
TotalFinaElf SA:
Class B 197,574 31,192
sponsored ADR 812,761 64,157
1,173,080
TOTAL ENERGY 1,515,057
FINANCE - 13.8%
BANKS - 1.4%
Bank of America Corp. 938,000 52,118
Bank of Tokyo-Mitsubishi Ltd. 3,741,000 46,858
Bank of Tokyo-Mitsubishi Ltd. 1,493,200 18,852
ADR
Chase Manhattan Corp. 2,433,500 181,752
299,580
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
FINANCE - CONTINUED
CREDIT & OTHER FINANCE - 3.3%
American Express Co. 7,681,700 $ 413,371
Citigroup, Inc. 4,232,600 263,215
676,586
FEDERAL SPONSORED CREDIT - 4.9%
Fannie Mae 9,999,942 601,247
Freddie Mac 9,641,700 429,056
1,030,303
INSURANCE - 2.5%
Allmerica Financial Corp. 600,900 34,664
American International Group, 3,001,352 337,840
Inc.
CIGNA Corp. 1,346,012 119,543
The Chubb Corp. 373,700 26,159
518,206
SECURITIES INDUSTRY - 1.7%
Daiwa Securities Group, Inc. 1,087,000 13,212
Morgan Stanley Dean Witter & 2,194,100 157,838
Co.
Nomura Securities Co. Ltd. 8,022,000 183,841
354,891
TOTAL FINANCE 2,879,566
HEALTH - 9.5%
DRUGS & PHARMACEUTICALS - 8.7%
American Home Products Corp. 1,349,900 72,726
Amgen, Inc. (a) 1,539,600 97,957
Bristol-Myers Squibb Co. 5,307,500 292,244
Eli Lilly & Co. 6,690,100 509,284
Merck & Co., Inc. 2,141,300 159,795
Schering-Plough Corp. 9,098,300 440,130
Warner-Lambert Co. 1,939,134 236,817
1,808,953
MEDICAL EQUIPMENT & SUPPLIES
- 0.8%
Abbott Laboratories 1,432,000 58,265
Johnson & Johnson 1,303,100 116,627
174,892
TOTAL HEALTH 1,983,845
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
INDUSTRIAL MACHINERY &
EQUIPMENT - 4.7%
ELECTRICAL EQUIPMENT - 4.0%
General Electric Co. 15,819,900 $ 832,516
INDUSTRIAL MACHINERY &
EQUIPMENT - 0.7%
Deere & Co. 2,491,800 103,565
Ingersoll-Rand Co. 848,600 38,664
142,229
TOTAL INDUSTRIAL MACHINERY & 974,745
EQUIPMENT
MEDIA & LEISURE - 4.6%
BROADCASTING - 1.9%
AT&T Corp. - Liberty Media 3,509,010 155,493
Group Class A (a)
Charter Communications, Inc. 2,432,300 29,644
Comcast Corp. Class A 1,213,800 45,973
(special) (a)
Cox Communications, Inc. 1,105,485 48,780
Class A (a)
Infinity Broadcasting Corp. 339,500 10,737
Class A (a)
Time Warner, Inc. 1,260,500 99,501
390,128
ENTERTAINMENT - 2.0%
Fox Entertainment Group, Inc. 3,115,700 81,398
Class A (a)
Viacom, Inc. Class B 4,305,171 266,921
(non-vtg.) (a)
Walt Disney Co. 1,895,000 79,945
428,264
PUBLISHING - 0.1%
McGraw-Hill Companies, Inc. 234,100 12,042
RESTAURANTS - 0.6%
McDonald's Corp. 3,833,900 137,302
TOTAL MEDIA & LEISURE 967,736
NONDURABLES - 0.5%
BEVERAGES - 0.1%
Seagram Co. Ltd. 374,200 17,504
HOUSEHOLD PRODUCTS - 0.4%
Clorox Co. 574,700 22,772
Procter & Gamble Co. 942,700 62,690
85,462
TOTAL NONDURABLES 102,966
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
RETAIL & WHOLESALE - 5.4%
GENERAL MERCHANDISE STORES -
2.8%
Kohls Corp. (a) 793,600 $ 41,069
Target Corp. 1,774,700 111,252
Wal-Mart Stores, Inc. 7,540,500 434,521
586,842
RETAIL & WHOLESALE,
MISCELLANEOUS - 2.6%
Best Buy Co., Inc. (a) 452,300 28,947
Circuit City Stores, Inc. - 545,300 27,163
Circuit City Group
Home Depot, Inc. 5,583,250 272,532
Lowe's Companies, Inc. 4,589,300 213,689
542,331
TOTAL RETAIL & WHOLESALE 1,129,173
SERVICES - 0.1%
ADVERTISING - 0.1%
Interpublic Group of 239,500 10,284
Companies, Inc.
SERVICES - 0.0%
Gartner Group, Inc. Class B 4,282 47
(a)
TOTAL SERVICES 10,331
TECHNOLOGY - 42.4%
COMMUNICATIONS EQUIPMENT - 9.8%
Ciena Corp. (a) 865,600 103,602
Cisco Systems, Inc. (a) 14,091,600 802,340
Corning, Inc. 561,800 108,673
Lucent Technologies, Inc. 1,633,200 93,705
Nokia AB sponsored ADR 8,558,700 445,052
Nortel Networks Corp. 5,322,000 283,615
Oni Systems Corp. 11,300 283
Telefonaktiebolaget LM 9,892,400 202,794
Ericsson sponsored ADR
2,040,064
COMPUTER SERVICES & SOFTWARE
- 9.6%
Adobe Systems, Inc. 1,894,300 213,227
America Online, Inc. (a) 3,783,400 200,520
Automatic Data Processing, 3,333,000 183,107
Inc.
BEA Systems, Inc. (a) 1,057,300 38,195
BroadVision, Inc. (a) 1,623,100 58,127
Citrix Systems, Inc. (a) 1,688,100 88,836
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
TECHNOLOGY - CONTINUED
COMPUTER SERVICES & SOFTWARE
- CONTINUED
Computer Associates 517,700 $ 26,662
International, Inc.
Computer Sciences Corp. (a) 866,000 83,082
E.piphany, Inc. 187,000 14,609
First Data Corp. 878,900 49,273
i2 Technologies, Inc. (a) 374,200 39,806
InfoSpace.com, Inc. (a) 686,400 29,773
Microsoft Corp. (a) 3,729,200 233,308
Network Solutions, Inc. Class 570,100 84,268
A (a)
Oracle Corp. (a) 5,631,500 404,764
Phone.com, Inc. 342,400 23,947
Redback Networks, Inc. 225,700 18,931
Siebel Systems, Inc. (a) 873,100 102,153
VeriSign, Inc. (a) 549,100 74,334
Yahoo!, Inc. (a) 327,000 36,971
2,003,893
COMPUTERS & OFFICE EQUIPMENT
- 7.2%
Compaq Computer Corp. 4,518,200 118,603
Dell Computer Corp. (a) 3,082,800 132,946
EMC Corp. (a) 1,960,100 227,984
Hewlett-Packard Co. 1,088,600 130,768
International Business 608,000 65,246
Machines Corp.
Network Appliance, Inc. (a) 2,004,400 129,409
SCI Systems, Inc. (a)(c) 7,501,800 337,581
Sun Microsystems, Inc. (a) 4,869,600 373,133
1,515,670
ELECTRONIC INSTRUMENTS - 2.7%
Agilent Technologies, Inc. 972,100 71,571
Applied Materials, Inc. (a) 2,613,800 218,252
KLA-Tencor Corp. (a) 1,668,500 82,695
LAM Research Corp. (a) 5,865,200 188,420
560,938
ELECTRONICS - 13.1%
Analog Devices, Inc. (a) 3,356,000 258,412
Broadcom Corp. Class A (a) 704,500 91,629
Flextronics International 3,075,541 167,425
Ltd. (a)
Intel Corp. 4,461,400 556,281
JDS Uniphase Corp. (a) 1,633,800 143,774
Methode Electronics, Inc. 564,000 20,234
Class A
Micron Technology, Inc. (a) 4,778,000 334,161
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
TECHNOLOGY - CONTINUED
ELECTRONICS - CONTINUED
Molex, Inc. Class A 2,420,565 $ 89,258
Motorola, Inc. 958,300 89,841
National Semiconductor Corp. 3,253,600 174,881
(a)
PMC-Sierra, Inc. (a) 210,100 32,198
Sanmina Corp. (a) 1,007,200 64,083
Texas Instruments, Inc. 7,311,000 528,220
Tyco International Ltd. 2,006,500 94,431
Xilinx, Inc. (a) 1,334,100 101,558
2,746,386
TOTAL TECHNOLOGY 8,866,951
UTILITIES - 6.9%
CELLULAR - 5.0%
AT&T Corp. - Wireless Group 850,000 24,278
China Telecom Ltd. sponsored 935,400 137,504
ADR (a)
Nextel Communications, Inc. 2,049,500 189,835
Class A (a)
Nextel Partners, Inc. Class A 36,500 621
QUALCOMM, Inc. (a) 757,000 50,246
Sprint Corp. - PCS Group 4,625,900 256,737
Series 1 (a)
Vodafone AirTouch PLC 5,898,600 270,230
sponsored ADR
VoiceStream Wireless Corp. (a) 959,200 109,828
1,039,279
ELECTRIC UTILITY - 0.3%
AES Corp. (a) 793,500 69,233
TELEPHONE SERVICES - 1.6%
Bell Atlantic Corp. 920,292 48,660
Level 3 Communications, Inc. 1,545,100 117,910
(a)
NEXTLINK Communications, Inc. 1,065,600 74,659
Class A (a)
Telefonica SA sponsored ADR 843,000 51,318
U.S. WEST, Inc. 233,700 16,826
WorldCom, Inc. (a) 568,206 21,379
330,752
TOTAL UTILITIES 1,439,264
TOTAL COMMON STOCKS 20,192,189
(Cost $15,686,433)
CASH EQUIVALENTS - 4.6%
SHARES VALUE (NOTE 1) (000S)
Central Cash Collateral Fund, 153,018,100 $ 153,018
6.54% (b)
Taxable Central Cash Fund, 814,363,328 814,363
6.37% (b)
TOTAL CASH EQUIVALENTS 967,381
(Cost $967,381)
TOTAL INVESTMENT PORTFOLIO - 21,159,570
101.2%
(Cost $16,653,814)
NET OTHER ASSETS - (1.2)% (246,329)
NET ASSETS - 100% $ 20,913,241
</TABLE>
LEGEND
(a) Non-income producing
(b) The rate quoted is the annualized seven-day yield of the fund at
period end.
(c) Affiliated company
Distribution of investments by country of issue, as a percentage of
total net assets, is as follows:
United States of America 88.5%
Finland 2.1
United Kingdom 2.1
Canada 1.5
Japan 1.3
Sweden 1.0
Others (individually less 3.5
than 1%)
100.0%
INCOME TAX INFORMATION
At May 31, 2000, the aggregate cost of investment securities for
income tax purposes was $16,652,335,000. Net unrealized appreciation
aggregated $4,507,235,000, of which $5,703,406,000 related to
appreciated investment securities and $1,196,171,000 related to
depreciated investment securities.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AMOUNTS IN THOUSANDS
MAY 31, 2000 (UNAUDITED)
ASSETS
Investment in securities, at $ 21,159,570
value (cost $16,653,814) -
See accompanying schedule
Receivable for investments 49,569
sold
Receivable for fund shares 11,424
sold
Dividends receivable 11,639
Interest receivable 3,519
Other receivables 448
TOTAL ASSETS 21,236,169
LIABILITIES
Payable for investments $ 58,857
purchased
Payable for fund shares 92,528
redeemed
Accrued management fee 5,923
Distribution fees payable 9,512
Other payables and accrued 3,090
expenses
Collateral on securities 153,018
loaned, at value
TOTAL LIABILITIES 322,928
NET ASSETS $ 20,913,241
Net Assets consist of:
Paid in capital $ 15,364,774
Distributions in excess of (25,388)
net investment income
Accumulated undistributed net 1,068,200
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 4,505,655
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS $ 20,913,241
STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
AMOUNTS IN THOUSANDS (EXCEPT
PER-SHARE AMOUNTS)
MAY 31, 2000 (UNAUDITED)
CALCULATION OF MAXIMUM $41.54
OFFERING PRICE CLASS A: NET
ASSET VALUE and redemption
price per share ($536,351
(divided by) 12,911 shares)
Maximum offering price per $44.07
share (100/94.25 of $41.54)
CLASS T: NET ASSET VALUE and $41.96
redemption price per share
($17,712,449 (divided by)
422,083 shares)
Maximum offering price per $43.48
share (100/96.50 of $41.96)
CLASS B: NET ASSET VALUE and $41.37
offering price per share
($1,783,952 (divided by)
43,124 shares) A
CLASS C: NET ASSET VALUE and $41.45
offering price per share
($519,289 (divided by)
12,527 shares) A
INSTITUTIONAL CLASS: NET $41.96
ASSET VALUE, offering price
and redemption price per
share ($361,200 (divided by)
8,609 shares)
REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS SIX
MONTHS ENDED MAY 31, 2000
(UNAUDITED)
INVESTMENT INCOME $ 107,682
Dividends (including $1,445
received from affiliated
issuers)
Interest 33,610
Security lending 711
TOTAL INCOME 142,003
EXPENSES
Management fee Basic fee $ 70,842
Performance adjustment (24,964)
Transfer agent fees 23,279
Distribution fees 66,210
Accounting and security 708
lending fees
Non-interested trustees' 48
compensation
Custodian fees and expenses 313
Registration fees 468
Audit 69
Legal 75
Interest 111
Miscellaneous 49
Total expenses before 137,208
reductions
Expense reductions (5,269) 131,939
NET INVESTMENT INCOME 10,064
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 1,139,527
(including realized loss of
$131,018 on sales of
investments in affiliated
issuers)
Foreign currency transactions (290) 1,139,237
Change in net unrealized
appreciation (depreciation)
on:
Investment securities (3,040,491)
Assets and liabilities in (55) (3,040,546)
foreign currencies
NET GAIN (LOSS) (1,901,309)
NET INCREASE (DECREASE) IN $ (1,891,245)
NET ASSETS RESULTING FROM
OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
AMOUNTS IN THOUSANDS SIX MONTHS ENDED MAY 31, 2000 YEAR ENDED NOVEMBER 30, 1999
(UNAUDITED)
INCREASE (DECREASE) IN NET
ASSETS
Operations Net investment $ 10,064 $ 205,720
income
Net realized gain (loss) 1,139,237 3,285,007
Change in net unrealized (3,040,546) (1,529,997)
appreciation (depreciation)
NET INCREASE (DECREASE) IN (1,891,245) 1,960,730
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (174,951) (195,067)
From net investment income
In excess of net investment (25,388) -
income
From net realized gain (2,846,861) (939,863)
TOTAL DISTRIBUTIONS (3,047,200) (1,134,930)
Share transactions - net (2,681,296) 194,901
increase (decrease)
TOTAL INCREASE (DECREASE) (7,619,741) 1,020,701
IN NET ASSETS
NET ASSETS
Beginning of period 28,532,982 27,512,281
End of period (including $ 20,913,241 $ 28,532,982
under (over) distribution of
net investment income of
$(25,388) and $191,572,
respectively)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS A
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 I 1997 H
Net asset value, beginning of $ 50.61 $ 49.33 $ 44.02 $ 42.57 $ 35.39
period
Income from Investment
Operations
Net investment income D .07 .47 .48 .04 .54
Net realized and unrealized (3.51) 2.97 8.03 1.41 8.80
gain (loss)
Total from investment (3.44) 3.44 8.51 1.45 9.34
operations
Less Distributions
From net investment income (.45) (.47) (.60) - (.72)
In excess of net investment (.07) - - - -
income
From net realized gain (5.11) (1.69) (2.60) - (1.44)
Total distributions (5.63) (2.16) (3.20) - (2.16)
Net asset value, end of period $ 41.54 $ 50.61 $ 49.33 $ 44.02 $ 42.57
TOTAL RETURN B, C (7.69)% 7.31% 20.82% 3.41% 27.58%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 536 $ 640 $ 359 $ 143 $ 130
millions)
Ratio of expenses to average .89% A .92% .97% 1.10% A, F 1.05%
net assets
Ratio of expenses to average .84% A, G .91% G .96% G 1.09% A, G 1.04% G
net assets after expense
reductions
Ratio of net investment .32% A .93% 1.06% 1.22% A 1.36%
income to average net assets
Portfolio turnover 131% A 43% 25% 33% A 35%
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
FINANCIAL HIGHLIGHTS - CLASS A
YEARS ENDED NOVEMBER 30,
SELECTED PER-SHARE DATA 1996 E
Net asset value, beginning of $ 32.86
period
Income from Investment
Operations
Net investment income D .09
Net realized and unrealized 2.44
gain (loss)
Total from investment 2.53
operations
Less Distributions
From net investment income -
In excess of net investment -
income
From net realized gain -
Total distributions -
Net asset value, end of period $ 35.39
TOTAL RETURN B, C 7.70%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 10
millions)
Ratio of expenses to average 1.48% A, F
net assets
Ratio of expenses to average 1.47% A, G
net assets after expense
reductions
Ratio of net investment 1.74% A
income to average net assets
Portfolio turnover 33%
</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 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.
H YEAR ENDED OCTOBER 31
I ONE MONTH ENDED NOVEMBER 30, 1997
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL
STATEMENTS.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS T
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 G 1997 F
Net asset value, beginning of $ 50.96 $ 49.63 $ 44.20 $ 42.76 $ 35.41
period
Income from Investment
Operations
Net investment income .03 D .37 D .42 D .03 D .55 D
Net realized and unrealized (3.55) 3.00 8.08 1.41 8.78
gain (loss)
Total from investment (3.52) 3.37 8.50 1.44 9.33
operations
Less Distributions
From net investment income (.32) (.35) (.47) - (.54)
In excess of net investment (.05) - - - -
income
From net realized gain (5.11) (1.69) (2.60) - (1.44)
Total distributions (5.48) (2.04) (3.07) - (1.98)
Net asset value, end of period $ 41.96 $ 50.96 $ 49.63 $ 44.20 $ 42.76
TOTAL RETURN B, C (7.78)% 7.10% 20.63% 3.37% 27.43%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 17,712 $ 24,357 $ 24,802 $ 20,411 $ 19,652
millions)
Ratio of expenses to average 1.08% A 1.12% 1.14% 1.28% A 1.18%
net assets
Ratio of expenses to average 1.03% A, E 1.11% E 1.13% E 1.27% A, E 1.17% E
net assets after expense
reductions
Ratio of net investment .13% A .73% .92% 1.03% A 1.39%
income to average net assets
Portfolio turnover 131% A 43% 25% 33% A 35%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS T
YEARS ENDED NOVEMBER 30,
SELECTED PER-SHARE DATA 1996 F 1995 F
Net asset value, beginning of $ 30.89 $ 26.62
period
Income from Investment
Operations
Net investment income .61 D .39
Net realized and unrealized 4.72 5.31
gain (loss)
Total from investment 5.33 5.70
operations
Less Distributions
From net investment income (.41) (.27)
In excess of net investment - -
income
From net realized gain (.40) (1.16)
Total distributions (.81) (1.43)
Net asset value, end of period $ 35.41 $ 30.89
TOTAL RETURN B, C 17.61% 22.88%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 14,315 $ 9,691
millions)
Ratio of expenses to average 1.34% 1.59%
net assets
Ratio of expenses to average 1.34% 1.58% E
net assets after expense
reductions
Ratio of net investment 1.88% 1.56%
income to average net assets
Portfolio turnover 33% 39%
</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 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.
F YEAR ENDED OCTOBER 31
G ONE MONTH ENDED NOVEMBER 30, 1997
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL
STATEMENTS.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS B
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 H 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 50.25 $ 49.12 $ 44.02 $ 42.60 $ 37.62
period
Income from Investment
Operations
Net investment income (loss) D (.10) .09 .14 .02 .13
Net realized and unrealized (3.49) 2.97 8.04 1.40 4.85
gain (loss)
Total from investment (3.59) 3.06 8.18 1.42 4.98
operations
Less Distributions
From net investment income (.16) (.24) (.48) - -
In excess of net investment (.02) - - - -
income
From net realized gain (5.11) (1.69) (2.60) - -
Total distributions (5.29) (1.93) (3.08) - -
Net asset value, end of $ 41.37 $ 50.25 $ 49.12 $ 44.02 $ 42.60
period
TOTAL RETURN B, C (8.02)% 6.50% 19.95% 3.33% 13.24%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 1,784 $ 2,264 $ 1,432 $ 423 $ 371
millions)
Ratio of expenses to average 1.66% A 1.67% 1.71% 1.85% A, F 1.75% A
net assets
Ratio of expenses to average 1.61% A, G 1.66% G 1.70% G 1.84% A, G 1.74% A, G
net assets after expense
reductions
Ratio of net investment (.45)% A .19% .31% .47% A .48% A
income (loss) to average
net assets
Portfolio turnover 131% A 43% 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.
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 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.
H ONE MONTH ENDED NOVEMBER 30, 1997
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS C
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 50.39 $ 49.33 $ 44.20 $ 43.62
period
Income from Investment
Operations
Net investment income (loss) D (.09) .10 .12 .02
Net realized and unrealized (3.51) 2.97 8.08 .56
gain (loss)
Total from investment (3.60) 3.07 8.20 .58
operations
Less Distributions
From net investment income (.20) (.32) (.47) -
In excess of net investment (.03) - - -
income
From net realized gain (5.11) (1.69) (2.60) -
Total distributions (5.34) (2.01) (3.07) -
Net asset value, end of period $ 41.45 $ 50.39 $ 49.33 $ 44.20
TOTAL RETURN B, C (8.03)% 6.50% 19.91% 1.33%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 519 $ 688 $ 301 $ 6
millions)
Ratio of expenses to average 1.63% A 1.65% 1.70% 1.85% A, F
net assets
Ratio of expenses to average 1.59% A, G 1.64% G 1.70% 1.84% A, G
net assets after expense
reductions
Ratio of net investment (.42)% A .20% .27% .74% A
income (loss) to average net
assets
Portfolio turnover 131% A 43% 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 (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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 H 1997 G 1996 G
Net asset value, beginning of $ 51.10 $ 49.78 $ 44.31 $ 42.85 $ 35.47 $ 30.97
period
Income from Investment
Operations
Net investment income .14 D .63 D .65 D .05 D .75 D .77 D
Net realized and unrealized (3.53) 2.98 8.10 1.41 8.78 4.74
gain (loss)
Total from investment (3.39) 3.61 8.75 1.46 9.53 5.51
operations
Less Distributions
From net investment income (.56) (.60) (.68) - (.71) (.61)
In excess of net investment (.08) - - - - -
income
From net realized gain (5.11) (1.69) (2.60) - (1.44) (.40)
Total distributions (5.75) (2.29) (3.28) - (2.15) (1.01)
Net asset value, end of period $ 41.96 $ 51.10 $ 49.78 $ 44.31 $ 42.85 $ 35.47
TOTAL RETURN B, C (7.52)% 7.62% 21.29% 3.41% 28.07% 18.25%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 361 $ 584 $ 618 $ 392 $ 375 $ 250
millions)
Ratio of expenses to average .56% A .62% .62% .71% A .66% .85%
net assets
Ratio of expenses to average .52% A, F .61% F .61% F .70% A, F .65% F .84% F
net assets after expense
reductions
Ratio of net investment .65% A 1.24% 1.43% 1.60% A 1.91% 2.38%
income to average net assets
Portfolio turnover 131% A 43% 25% 33% A 35% 33%
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
YEARS ENDED NOVEMBER 30,
SELECTED PER-SHARE DATA 1995 E
Net asset value, beginning of $ 29.04
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 -
In excess of 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 (in $ 72
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.
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.
G YEAR ENDED OCTOBER 31
H ONE MONTH ENDED NOVEMBER 30, 1997
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL
STATEMENTS.
NOTES TO FINANCIAL STATEMENTS
For the period ended May 31, 2000 (Unaudited)
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. 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. Foreign securities are valued based
on quotations from the principal market in which such securities are
normally traded. If trading or events occurring in other markets after
the close of the principal market in which foreign securities are
traded, and before the close of the business of the fund, are expected
to materially affect the value of those securities, then they are
valued at their fair value taking this trading or these events into
account. Fair value is determined in good faith under consistently
applied procedures under the general supervision of the Board of
Trustees. 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. 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.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
FOREIGN CURRENCY TRANSLATION - CONTINUED
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.
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 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,
market discount, 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.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Distributions in excess of net investment income and accumulated
undistributed net realized gain (loss) on investments and foreign
currency transactions may include temporary book and tax basis
differences that will reverse in a subsequent period. Any taxable
income or short-term 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 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, Federal Agency,
or other obligations found to be satisfactory by FMR 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.
CENTRAL CASH FUNDS. Pursuant to an Exemptive Order issued by the SEC,
the fund may invest in the Taxable Central Cash Fund and the Central
Cash Collateral Fund (the Cash Funds) managed by Fidelity Investments
Money Management, Inc., an affiliate of FMR. The Cash Funds are
open-end money market funds available only to investment companies and
other accounts managed by FMR and its affiliates. The Cash Funds seek
preservation of capital, liquidity, and current income. Income
distributions from the Cash Funds are declared daily and paid monthly
from net interest income. Income distributions earned by the fund are
recorded as either interest income or security lending income in the
accompanying financial statements.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $15,840,307,000 and $21,013,650,000, respectively, of which
U.S. government and government agency obligations aggregated $0 and
$2,036,577,000, 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 .2167% 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 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 annualized rate of .38% of average net assets
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the
1940 Act, the Board of Trustees have adopted separate Distribution and
Service 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.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
DISTRIBUTION AND SERVICE PLAN - CONTINUED
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 $ 738,000 $ 2,000
CLASS T 52,313,000 562,000
CLASS B 10,131,000 7,606,000
CLASS C 3,028,000 1,444,000
$ 66,210,000 $ 9,614,000
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 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 is 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 $ 897,000 $ 355,000
CLASS T 2,359,000 721,000
CLASS B 4,642,000 4,642,000 *
CLASS C 279,000 279,000 *
$ 8,177,000 $ 5,997,000
* 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 (collectively referred to
as the transfer 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 $ 716,000 .24 *
CLASS T 18,904,000 .18 *
CLASS B 2,579,000 .26 *
CLASS C 693,000 .23 *
INSTITUTIONAL CLASS 387,000 .17 *
$ 23,279,000
* ANNUALIZED
ACCOUNTING AND SECURITY LENDING FEES. Fidelity Service Company, Inc.,
an affiliate of FMR, maintains the fund's accounting records and
administers the security lending program. The security lending fee is
based on the number and duration of lending transactions. The
accounting fee is based on the level of average net assets for the
month plus out-of-pocket expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $610,000 for the
period.
5. INTERFUND LENDING PROGRAM.
The fund participated in the interfund lending program as a borrower.
The average daily loan balance during the period for which loans were
outstanding amounted to $51,086,000. The weighted average interest
rate was 5.87%. Interest expense includes $16,000 paid under the
interfund lending program.
6. SECURITY LENDING.
The fund lends portfolio securities from time to time in order to earn
additional income. The fund receives collateral in the form of U.S.
Treasury obligations, letters of credit, and/or cash against the
loaned securities, and maintains collateral in an amount not less than
100% of the market value of the loaned securities during the period of
the loan. The market value of the loaned securities is determined at
the close of business of the fund
6. SECURITY LENDING - CONTINUED
and any additional required collateral is delivered to the fund on the
next business day. If the borrower defaults on its obligation to
return the securities loaned because of insolvency or other reasons,
the fund could experience delays and costs in recovering the
securities loaned or in gaining access to the collateral. At period
end, the value of the securities loaned amounted to $147,778,000. The
fund received cash collateral of $153,018,000 which was invested in
cash equivalents.
7. 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. The interest
rate on the borrowings is the bank's base rate, as revised from time
to time. The average daily loan balance during the period for which
loans were outstanding amounted to $149,130,000. The weighted average
interest rate was 5.71%. Interest expense includes $95,000 paid under
the bank borrowing program.
8. 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 $5,105,000 under this arrangement.
In addition, through arrangements with the fund's custodian and each
class' transfer agent, 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 $90,000 under the custodian
arrangement, and each applicable class' expenses were reduced as
follows under the transfer agent arrangements:
TRANSFER AGENT CREDITS
CLASS A $ 8,000
CLASS T 64,000
CLASS B 1,000
CLASS C 1,000
$ 74,000
9. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS SIX MONTHS ENDED MAY 31, 2000 YEAR ENDED NOVEMBER 30, 1999
FROM NET INVESTMENT INCOME
Class A $ 5,702 $ 3,446
Class T 153,146 175,050
Class B 7,046 7,090
Class C 2,733 2,000
Institutional Class 6,324 7,481
Total $ 174,951 $ 195,067
IN EXCESS OF NET INVESTMENT
INCOME
Class A $ 828 $ -
Class T 22,223 -
Class B 1,022 -
Class C 397 -
Institutional Class 918 -
Total $ 25,388 $ -
FROM NET REALIZED GAIN
Class A $ 64,315 $ 12,417
Class T 2,425,572 845,704
Class B 229,452 50,007
Class C 69,641 10,642
Institutional Class 57,881 21,093
Total $ 2,846,861 $ 939,863
$ 3,047,200 $ 1,134,930
</TABLE>
10. SHARE TRANSACTIONS.
Transactions for each class of shares for the periods were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SHARES DOLLARS
AMOUNTS IN THOUSANDS SIX MONTHS ENDED MAY 31, YEAR ENDED NOVEMBER 30, SIX MONTHS ENDED MAY 31,
2000 1999 2000
CLASS A Shares sold 7,706 $ 120,481
2,718
Reinvestment of distributions 1,487 317 67,254
Shares redeemed (3,931) (2,665) (173,748)
Net increase (decrease) 274 5,358 $ 13,987
CLASS T Shares sold 33,542 84,989 $ 1,494,123
Reinvestment of distributions 53,007 20,264 2,424,402
Shares redeemed (142,447) (126,979) (6,364,961)
Net increase (decrease) (55,898) (21,726) $ (2,446,436)
CLASS B Shares sold 4,952 20,524 $ 219,510
Reinvestment of distributions 4,562 1,064 206,305
Shares redeemed (11,446) (5,677) (504,387)
Net increase (decrease) (1,932) 15,911 $ (78,572)
CLASS C Shares sold 2,728 9,384 $ 121,650
Reinvestment of distributions 1,259 217 57,030
Shares redeemed (5,116) (2,048) (225,846)
Net increase (decrease) (1,129) 7,553 $ (47,166)
INSTITUTIONAL CLASS Shares 1,727 4,369 $ 77,397
sold
Reinvestment of distributions 1,159 505 52,861
Shares redeemed (5,704) (5,872) (253,367)
Net increase (decrease) (2,818) (998) $ (123,109)
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
DOLLARS
AMOUNTS IN THOUSANDS YEAR ENDED NOVEMBER 30,
1999
CLASS A Shares sold $ 388,943
Reinvestment of distributions 14,915
Shares redeemed (134,575)
Net increase (decrease) $ 269,283
CLASS T Shares sold $ 4,305,403
Reinvestment of distributions 961,462
Shares redeemed (6,461,873)
Net increase (decrease) $ (1,195,008)
CLASS B Shares sold $ 1,029,947
Reinvestment of distributions 50,034
Shares redeemed (285,427)
Net increase (decrease) $ 794,554
CLASS C Shares sold $ 472,443
Reinvestment of distributions 10,228
Shares redeemed (103,255)
Net increase (decrease) $ 379,416
INSTITUTIONAL CLASS Shares $ 220,446
sold
Reinvestment of distributions 23,925
Shares redeemed (297,715)
Net increase (decrease) $ (53,344)
</TABLE>
11. 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:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SUMMARY OF TRANSACTIONS WITH
AFFILIATED COMPANIES
AMOUNTS IN THOUSANDS PURCHASE COST SALES COST DIVIDEND INCOME VALUE
AFFILIATE
AmeriSource Health Corp. $ 5,102 $ 71,814 $ - $ -
Class A
Burlington Industries, Inc. - 1,984 - -
Centex Corp. - 61,580 181 -
Cummins Engine Co., Inc. - 5,401 - -
D.R. Horton, Inc. 549 22,671 137 -
Discount Auto Parts, Inc. - 4,825 - -
Kaufman & Broad Home Corp. - 50,146 254 -
LAM Research Corp. - 5,433 - -
Lennar Corp. 714 28,639 31 -
Liz Claiborne, Inc. - 52,597 - -
MGIC Investment Corp. - 135,172 - -
Policy Management Systems 6,665 28,992 - -
Corp.
SCI Systems, Inc. - 16,408 - 337,581
Tech Data Corp. 5,158 96,008 - -
Tosco Corp. - 11,597 525 -
Warnaco Group, Inc. Class A - 17,457 317 -
TOTALS $ 18,188 $ 610,724 $ 1,445 $ 337,581
</TABLE>
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research
(U.K.) Inc.
Fidelity Management & Research
(Far East) Inc.
Fidelity Investments Japan Ltd.
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Abigail P. Johnson, Vice President
Bettina Doulton, Vice President
Eric D. Roiter, Secretary
Robert A. Dwight, Treasurer
Maria F. Dwyer, Deputy Treasurer
John H. Costello, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
Donald J. Kirk *
Ned C. Lautenbach *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
* INDEPENDENT TRUSTEES
ADVISORY BOARD
J. Michael Cook
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 Telecommunications & Utilities Growth Fund
GROWTH FUNDS
Fidelity Advisor Latin America Fund
Fidelity Advisor Emerging Asia 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(registered trademark)
Growth Fund
Fidelity Advisor Small Cap Fund
Fidelity Advisor Value Strategies Fund
Fidelity Advisor Mid Cap Fund
Fidelity Advisor Dynamic Capital Appreciation Fund
Fidelity Advisor Equity Growth Fund
Fidelity Advisor Large Cap Fund
Fidelity Advisor Dividend Growth Fund
Fidelity Advisor Growth
Opportunities Fund
GO-SANN-0700 106146
1.704615.102
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 High Income 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
MONEY MARKET FUNDS
Prime Fund
Treasury Fund
Tax-Exempt Fund
(2_FIDELITY_LOGOS)(registered trademark)
FIDELITY(REGISTERED TRADEMARK) ADVISOR
GROWTH OPPORTUNITIES
FUND - INSTITUTIONAL CLASS
SEMIANNUAL REPORT
MAY 31, 2000
(2_FIDELITY_LOGOS)(registered trademark)
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over
time.
FUND TALK 6 The managers' 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 18 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 27 Notes to the financial
statements.
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 technology sell-off that began in mid-March continued to hamper
equity markets, driving the tech-heavy NASDAQ index down more than 16%
year to date through the end of May. Broader equity indexes, including
the S&P 500(registered trademark), also were down, but not as much as
more concentrated performance measures. In bond markets, Treasuries
got a boost late in the period as economic reports showed the first
signs of a slowing economy.
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 an investment in a money market fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although money market funds seek to preserve the
value of your investment at $1.00 per share, it is possible to lose
money by investing in these types of funds.
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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
CUMULATIVE TOTAL RETURNS
PERIODS ENDED MAY 31, 2000 PAST 6 MONTHS PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY ADV GROWTH -7.52% -8.02% 109.18% 361.22%
OPPORTUNITIES - INST CL
S&P 500 2.90% 10.48% 190.44% 398.93%
Growth Funds Average 7.32% 20.08% 172.00% 349.50%
</TABLE>
CUMULATIVE TOTAL RETURNS show Institutional Class' performance in
percentage terms over a set period - in this case, six months, 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 500SM 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 Inc. The
past six months average represents a peer group of 1,387 mutual funds.
These benchmarks include reinvested dividends and capital gains, if
any, and exclude the effect of sales charges. Lipper has created new
comparison categories that group funds according to portfolio
characteristics and capitalization, as well as by capitalization only.
These averages are listed on page 5 of this report.*
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED MAY 31, 2000 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
FIDELITY ADV GROWTH -8.02% 15.91% 16.52%
OPPORTUNITIES - INST CL
S&P 500 10.48% 23.77% 17.43%
Growth Funds Average 20.08% 21.60% 15.77%
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
1990/05/31 10000.00 10000.00
1990/06/30 10054.84 9932.00
1990/07/31 9689.21 9900.22
1990/08/31 8622.79 9005.24
1990/09/30 7952.47 8566.68
1990/10/31 7915.90 8529.85
1990/11/30 8756.86 9080.87
1990/12/31 9319.87 9334.23
1991/01/31 10435.55 9741.20
1991/02/28 11372.46 10437.70
1991/03/31 11686.82 10690.29
1991/04/30 11927.22 10715.95
1991/05/31 12580.60 11178.88
1991/06/30 11692.99 10666.88
1991/07/31 12512.79 11163.96
1991/08/31 12999.74 11428.55
1991/09/30 12703.87 11237.69
1991/10/31 12685.38 11388.28
1991/11/30 11933.38 10929.33
1991/12/31 13297.67 12179.64
1992/01/31 13681.07 11953.10
1992/02/29 14299.88 12108.49
1992/03/31 13822.32 11872.38
1992/04/30 14198.98 12221.42
1992/05/31 14400.77 12281.31
1992/06/30 14071.18 12098.32
1992/07/31 14555.47 12593.14
1992/08/31 14151.90 12334.98
1992/09/30 14192.26 12480.53
1992/10/31 14219.16 12524.21
1992/11/30 14905.23 12951.29
1992/12/31 15295.79 13110.59
1993/01/31 15762.12 13220.72
1993/02/28 15805.17 13400.52
1993/03/31 16393.47 13683.27
1993/04/30 16422.17 13352.14
1993/05/31 16881.33 13709.97
1993/06/30 16945.90 13749.73
1993/07/31 17060.69 13694.73
1993/08/31 17584.42 14213.77
1993/09/30 17648.99 14104.32
1993/10/31 18215.76 14396.28
1993/11/30 18129.67 14259.51
1993/12/31 18687.37 14432.05
1994/01/31 19721.43 14922.74
1994/02/28 19423.86 14518.34
1994/03/31 18598.10 13885.34
1994/04/30 19089.09 14063.07
1994/05/31 19193.24 14293.70
1994/06/30 18672.49 13943.51
1994/07/31 19200.68 14400.86
1994/08/31 20011.56 14991.29
1994/09/30 19408.98 14624.00
1994/10/31 19803.26 14953.04
1994/11/30 19170.92 14408.45
1994/12/31 19221.26 14622.13
1995/01/31 19370.93 15001.28
1995/02/28 19961.75 15585.88
1995/03/31 20473.79 16045.82
1995/04/30 21167.02 16518.37
1995/05/31 22049.30 17178.61
1995/06/30 22797.67 17577.67
1995/07/31 23577.55 18160.55
1995/08/31 23750.86 18206.13
1995/09/30 24215.63 18974.43
1995/10/31 24396.82 18906.69
1995/11/30 25011.27 19736.69
1995/12/31 25676.35 20116.82
1996/01/31 26091.14 20801.60
1996/02/29 26026.08 20994.43
1996/03/31 25993.54 21196.61
1996/04/30 26440.87 21509.04
1996/05/31 26993.92 22063.76
1996/06/30 27132.18 22147.83
1996/07/31 26383.94 21169.33
1996/08/31 26603.53 21615.80
1996/09/30 27872.30 22832.33
1996/10/31 28848.28 23462.05
1996/11/30 31125.56 25235.54
1996/12/31 30376.28 24735.63
1997/01/31 31885.17 26281.11
1997/02/28 32161.09 26487.15
1997/03/31 30583.21 25398.80
1997/04/30 31980.02 26915.11
1997/05/31 33971.76 28553.70
1997/06/30 35040.93 29832.90
1997/07/31 37653.48 32206.71
1997/08/31 36282.53 30402.49
1997/09/30 37731.08 32067.63
1997/10/31 36946.45 30996.57
1997/11/30 38205.30 32431.40
1997/12/31 39246.88 32988.25
1998/01/31 39338.96 33353.10
1998/02/28 41945.42 35758.53
1998/03/31 43267.27 37589.72
1998/04/30 43276.58 37967.87
1998/05/31 42885.61 37315.21
1998/06/30 43853.73 38830.95
1998/07/31 43900.27 38417.40
1998/08/31 38277.76 32863.01
1998/09/30 40549.11 34968.22
1998/10/31 43481.38 37812.53
1998/11/30 46339.18 40104.35
1998/12/31 48914.62 42415.16
1999/01/31 49421.45 44188.96
1999/02/28 47225.59 42815.57
1999/03/31 48406.48 44528.62
1999/04/30 50407.15 46253.21
1999/05/31 50143.65 45161.18
1999/06/30 52280.95 47667.62
1999/07/31 51041.51 46179.44
1999/08/31 49782.55 45950.85
1999/09/30 48045.38 44691.34
1999/10/31 49841.10 47519.41
1999/11/30 49870.38 48485.47
1999/12/31 51067.52 51341.27
2000/01/31 47737.85 48761.88
2000/02/29 48001.65 47838.82
2000/03/31 50837.56 52518.89
2000/04/30 48782.08 50938.60
2000/05/31 46122.04 49893.34
IMATRL PRASUN SHR__CHT 20000531 20000620 131712 R00000000000123
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Growth Opportunities Fund - Institutional
Class on May 31, 1990. As the chart shows, by May 31, 2000, the value
of the investment would have grown to $46,122 - a 361.22% 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
$49,893 - a 398.93% increase.
(checkmark)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.
* THE LIPPER LARGE-CAP VALUE FUNDS AVERAGE REFLECTS THE PERFORMANCE
(EXCLUDING SALES CHARGES) OF MUTUAL FUNDS WITH SIMILAR PORTFOLIO
CHARACTERISTICS AND CAPITALIZATION. THE LIPPER LARGE-CAP SUPERGROUP
AVERAGE REFLECTS THE PERFORMANCE (EXCLUDING SALES CHARGES) OF MUTUAL
FUNDS WITH SIMILAR CAPITALIZATION. AS OF MAY 31, 2000, THE SIX MONTH,
ONE YEAR, FIVE YEAR, AND 10 YEAR CUMULATIVE TOTAL RETURNS FOR THE
LARGE-CAP VALUE FUNDS AVERAGE WERE, 2.37%, 4.15%, 137.49%, AND
300.94%, RESPECTIVELY; THE ONE YEAR, FIVE YEAR, AND 10 YEAR AVERAGE
ANNUAL TOTAL RETURNS WERE, 4.15%, 18.74%, AND 14.77%, RESPECTIVELY.
THE SIX MONTH, ONE YEAR, FIVE YEAR, AND 10 YEAR CUMULATIVE TOTAL
RETURNS FOR LARGE-CAP SUPERGROUP AVERAGE WERE, 5.14%, 15.76%, 175.88%
AND 358.00%, RESPECTIVELY. THE ONE YEAR, FIVE YEAR AND 10 YEAR AVERAGE
ANNUAL TOTAL RETURNS WERE, 15.76%, 22.14%, AND 16.19%, RESPECTIVELY.
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
U.S. equity investors faced a steadily
declining market during the latter
part of the six-month period that
ended May 31, 2000, after
experiencing continued growth the
prior three months. Two chief
catalysts - a tightening of monetary
policy by the Federal Reserve Board
and the bursting of a speculative
bubble in technology stocks -
sparked a sustained pullback among
the major U.S. equity indexes that
began in March. The tech-heavy
NASDAQ Composite Index reached
a high of 5048 on March 10 before
quickly retreating below the 4000
level. The NASDAQ dropped to
3401 on the final day of the period,
gaining a modest 2.05% return for
the six-month period. The Standard
& Poor's 500SM Index - an index
of 500 widely held stocks - fared
slightly better in returning 2.90%.
Another index of well-established
stocks - the blue chips' Dow Jones
Industrial Average - surged higher
during the NASDAQ's sharp
plummet in April, but the brief rally
wasn't enough to significantly offset
earlier losses, and the Dow returned
-2.55% for the period. The Russell
2000(Registered trademark) Index - a barometer of
small-cap stocks - outperformed the
major indexes of larger companies
with a 5.50% return. As the period
drew to a close, weaker trading
volume suggested investors were
mixed about the direction of U.S.
stocks, and whether the three
interest-rate hikes levied by the
Fed during the period had begun
to cool off the overheated economy.
(photograph of Bettina Doulton)
NOTE TO SHAREHOLDERS: Bettina Doulton became Portfolio Manager of
Fidelity Advisor Growth Opportunities Fund on February 1, 2000.
Q. HOW DID THE FUND PERFORM OVER THE PAST SIX MONTHS, BETTINA?
A. During the six-month period ending May 31, 2000, the fund's
Institutional Class shares returned -7.52%. During the same period,
the Standard & Poor's 500 Index returned 2.90%, while the growth funds
average tracked by Lipper Inc. was up 7.32%. For the 12-month period
ending May 31, 2000, the fund's Institutional Class shares returned
-8.02%. Meanwhile, the S&P 500 index gained 10.48%, while the growth
funds average returned 20.08%.
Q. WHAT ACCOUNTED FOR THE FUND'S SUBPAR PERFORMANCE RELATIVE TO ITS
PEERS AND THE STANDARD & POOR'S 500 INDEX DURING THE PAST SIX MONTHS?
A. In the first half of the period, the fund was considerably
underweighted in the technology and telecommunication stocks that
drove equity markets to record-setting performance. The fund's lack of
exposure to these sectors relative to the index and peer group was a
big detractor from performance. After taking over the fund in
February, I repositioned it to be more in line with expectations -
with more of a growth emphasis than a value proposition - and
increased the tech position to approximately 42% of net assets at the
end of the period, compared to about 13% six months ago.
Q. HOW DID THAT STRATEGY PLAY OUT?
A. Unfortunately, on a short-term basis, the repositioning seemed
poorly timed. Fund performance was negatively affected by the massive
rotation away from technology that began in the middle of March and
persisted through the end of the period. To illustrate how far the
sector fell, the NASDAQ Composite Index, which is seen by many as the
benchmark for technology and telecommunications stocks, fell from 5048
on March 10 to 3401 on the final day of the period. That's a 33%
decline over a 10-week period. Several factors contributed to the tech
sell-off, including negative investor sentiment about high valuations,
fears of a slowdown in earnings growth given the Federal Reserve
Board's actions to slow the economy, as well as liquidity.
Q. IN ADDITION TO BOOSTING ITS TECHNOLOGY WEIGHTING, WHAT OTHER
CHANGES DID YOU MAKE TO THE FUND SINCE TAKING OVER IN FEBRUARY?
A. In light of margin pressures and credit concerns in the finance
sector, I reduced the aggregate financial services weighting to 13.8%
of net assets compared to 21.1% six months ago. In addition, I shifted
the asset allocation within the sector, reducing the fund's positions
in regional banks and mortgage insurance companies, and adding more
capital markets exposure, which was a plus. Two other moves also
helped. I reduced the fund's holdings in consumer nondurables, largely
due to the elimination of the Philip Morris position. I was less
enamored with the fundamental prospects of the company than my
predecessor. The fund's bond position also was eliminated during the
period as I expect to focus largely on equity investments.
Q. FOREIGN INVESTMENTS ACCOUNTED FOR APPROXIMATELY 12% OF THE FUND'S
NET ASSETS AT THE END OF THE PERIOD, NEARLY TWICE AS MUCH AS WAS HELD
SIX MONTHS AGO . . .
A. The fund's international exposure is a combination of holdings in
companies that are owned as interests in and trade with their
respective global industry group regardless of where they are
domiciled, and companies that are owned as plays on their respective
fundamental prospects and trade with their local markets. The bulk of
the fund's international weighting is in the former group. I would
include Nokia, Ericsson, Schlumberger and British Petroleum in this
group. The latter group - a much smaller portion of aggregate fund
assets - includes China Telecom, Nomura and Telefonica. In each case,
fundamental research is the cornerstone for these investments.
Q. WHICH STOCKS WERE AMONG THE STRONGEST CONTRIBUTORS TO ABSOLUTE
PERFORMANCE DURING THE SIX-MONTH PERIOD?
A. Despite the travails that the technology sector recently endured,
six of the fund's 10 best-performing stocks came from that area. Some
of these are very familiar names: Micron Technology, Intel, SCI
Systems, Analog Devices, Nokia and Adobe Systems. All benefited from
the growth prospects surrounding the rapid acceleration and
penetration of Internet- and wireless-related communications. General
Electric, the fund's largest holding at the end of the period, also
was one of its largest contributors. GE experienced an acceleration in
revenue and profit growth due to market share gains, acquisitions and
strong global economies. Profitability continued to improve, driven by
multiple initiatives including 6-sigma (reducing the costs related to
defects in operating processes), globalization and "e-enabling" of
operating processes. Eli Lilly was a top performer as well, benefiting
from investor appreciation of its strong product pipeline and
increased confidence in the company's earnings growth potential.
Q. WHICH STOCKS DID NOT PERFORM AS WELL AS YOU EXPECTED?
A. Although I reduced these positions dramatically since taking over
the fund, Fannie Mae and Freddie Mac significantly detracted from
performance during the period. Several factors caused the
underperformance of these two stocks, including the Fed's recent
string of interest-rate hikes and increased political bantering about
capital ratios and funding requirements. Two other disappointments
were retailers Home Depot and Wal-Mart. Despite continuing to deliver
strong results, these stocks came under pressure as investors grew
increasingly concerned that results would come under pressure due to
slowing consumer spending caused by interest-rate increases.
Q. WHAT IS YOUR OUTLOOK FOR THE NEXT FEW MONTHS, BETTINA?
A. It comes down to a question of whether you believe the technology
sector's recent struggle is a short-term rotation or a permanent
change in leadership. I believe that what we've seen is just a violent
short-term rotation similar to what we experienced at this time last
year. On a medium-term basis, I expect the companies that are the
enablers of our networked, communications economy - i.e., the
companies that provide servers, data storage, fiber optics, etc. - are
going to lead, because we still appear to be in the early stages of
the "e-economy" build-out. As the economy slows at the hands of
interest-rate hikes, companies with good unit growth stories -
technology being a good example - are expected to be relatively good
performers versus companies more dependent on price increases for
earnings growth. Longer term, the question that intrigues me is which
non-technology companies will position themselves to be the
beneficiaries of the e-economy. The defining characteristic between
the winners and the losers here will be the ability to use the
Internet as a productivity enhancement and to gain market share by
serving their customers better.
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 AND DO NOT NECESSARILY REPRESENT THE VIEWS OF FIDELITY OR
ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH VIEWS ARE
SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER CONDITIONS
AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE
VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE
INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS
FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY FIDELITY FUND.
(checkmark)FUND FACTS
GOAL: to provide capital
growth by investing primarily
in common stocks
START DATE: November 18,
1987
SIZE: as of May 31, 2000,
more than $20.9 billion
MANAGER: Bettina Doulton,
since February 2000; joined
Fidelity in 1986
BETTINA DOULTON ON
INTRADAY MARKET VOLATILITY:
"Market volatility has risen
dramatically over the past five
years. Here's an illustration: On a
closing price basis for the S&P 500
in 1995, only 5% of that year's
trading days had greater than 1%
volatility at the close, meaning the
S&P closed at least 1% higher or
lower than the previous day.
Through May 22 of this year, 47% of
the trading days closed up or down
greater than 1%. Intraday
fluctuations - price swings within
a given trading day - have risen
even more dramatically. In 1995,
only 17% of the trading days
experienced intraday fluctuation of
greater than 1%. So far in 2000,
intraday moves of greater than 1%
occurred in 94% of the trading
days.
"I believe there are several trends
contributing to this volatility. First
and foremost is uncertainty;
investors are uncertain about the
severity of the economic and
earnings slowdown, how long it will
persist and how much the market
has already discounted. Second,
there's been a dramatic change in
market participation over the past
few years, with more individuals
and more hedge funds, and a
decline in the average holding
periods for stocks and mutual
funds. Third, the speed of market
information dissemination via
sources such as the Internet and
CNBC has risen tremendously,
making the markets much more
reactionary. Given all of the
uncertainty, I believe volatility
of this nature will continue for
some time to come."
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF MAY 31,
2000
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
General Electric Co. 4.0 0.7
Cisco Systems, Inc. 3.8 0.0
Fannie Mae 2.9 6.3
Intel Corp. 2.7 0.5
Texas Instruments, Inc. 2.5 0.0
Eli Lilly & Co. 2.4 1.1
Nokia AB sponsored ADR 2.1 0.0
Schering-Plough Corp. 2.1 1.1
Exxon Mobil Corp. 2.1 1.5
Wal-Mart Stores, Inc. 2.1 1.5
26.7 12.7
TOP FIVE MARKET SECTORS AS OF
MAY 31, 2000
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Technology 42.4 12.9
Finance 13.8 21.1
Health 9.5 11.1
Energy 7.2 7.6
Utilities 6.9 5.3
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
ASSET ALLOCATION (% OF FUND'S
NET ASSETS)
AS OF MAY 31, 2000 * AS OF NOVEMBER 30, 1999 **
Stocks 96.6% Stocks 88.2%
Short-Term Investments and Bonds 7.3%
Net Other Assets 3.4%
Short-Term Investments and
Net Other Assets 4.5%
* FOREIGN INVESTMENTS 11.5% ** FOREIGN INVESTMENTS 6.1%
Row: 1, Col: 1, Value: 96.59999999999999 Row: 1, Col: 1, Value: 88.2
Row: 1, Col: 2, Value: 0.0 Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 0.0 Row: 1, Col: 3, Value: 0.0
Row: 1, Col: 4, Value: 0.0 Row: 1, Col: 4, Value: 7.3
Row: 1, Col: 5, Value: 0.0 Row: 1, Col: 5, Value: 0.0
Row: 1, Col: 6, Value: 0.0 Row: 1, Col: 6, Value: 0.0
Row: 1, Col: 7, Value: 0.0 Row: 1, Col: 7, Value: 0.0
Row: 1, Col: 8, Value: 3.4 Row: 1, Col: 8, Value: 4.5
</TABLE>
INVESTMENTS MAY 31, 2000 (UNAUDITED)
Showing Percentage of Net Assets
<TABLE>
<CAPTION>
<S> <C> <C> <C>
COMMON STOCKS - 96.6%
SHARES VALUE (NOTE 1) (000S)
AEROSPACE & DEFENSE - 1.0%
Boeing Co. 5,374,800 $ 209,953
BASIC INDUSTRIES - 0.3%
CHEMICALS & PLASTICS - 0.3%
Praxair, Inc. 1,534,200 64,436
DURABLES - 0.2%
CONSUMER DURABLES - 0.2%
Minnesota Mining & 561,700 48,166
Manufacturing Co.
ENERGY - 7.2%
ENERGY SERVICES - 1.6%
Baker Hughes, Inc. 564,400 20,460
Halliburton Co. 4,058,300 206,973
Schlumberger Ltd. (NY Shares) 1,557,100 114,544
341,977
OIL & GAS - 5.6%
BP Amoco PLC sponsored ADR 3,211,756 174,639
Chevron Corp. 464,000 42,891
Conoco, Inc. Class B 1,388,628 39,576
Cooper Cameron Corp. (a) 1,552,700 108,301
Exxon Mobil Corp. 5,254,600 437,774
Royal Dutch Petroleum Co. (NY 2,591,500 161,807
Shares)
Tosco Corp. 3,681,400 112,743
TotalFinaElf SA:
Class B 197,574 31,192
sponsored ADR 812,761 64,157
1,173,080
TOTAL ENERGY 1,515,057
FINANCE - 13.8%
BANKS - 1.4%
Bank of America Corp. 938,000 52,118
Bank of Tokyo-Mitsubishi Ltd. 3,741,000 46,858
Bank of Tokyo-Mitsubishi Ltd. 1,493,200 18,852
ADR
Chase Manhattan Corp. 2,433,500 181,752
299,580
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
FINANCE - CONTINUED
CREDIT & OTHER FINANCE - 3.3%
American Express Co. 7,681,700 $ 413,371
Citigroup, Inc. 4,232,600 263,215
676,586
FEDERAL SPONSORED CREDIT - 4.9%
Fannie Mae 9,999,942 601,247
Freddie Mac 9,641,700 429,056
1,030,303
INSURANCE - 2.5%
Allmerica Financial Corp. 600,900 34,664
American International Group, 3,001,352 337,840
Inc.
CIGNA Corp. 1,346,012 119,543
The Chubb Corp. 373,700 26,159
518,206
SECURITIES INDUSTRY - 1.7%
Daiwa Securities Group, Inc. 1,087,000 13,212
Morgan Stanley Dean Witter & 2,194,100 157,838
Co.
Nomura Securities Co. Ltd. 8,022,000 183,841
354,891
TOTAL FINANCE 2,879,566
HEALTH - 9.5%
DRUGS & PHARMACEUTICALS - 8.7%
American Home Products Corp. 1,349,900 72,726
Amgen, Inc. (a) 1,539,600 97,957
Bristol-Myers Squibb Co. 5,307,500 292,244
Eli Lilly & Co. 6,690,100 509,284
Merck & Co., Inc. 2,141,300 159,795
Schering-Plough Corp. 9,098,300 440,130
Warner-Lambert Co. 1,939,134 236,817
1,808,953
MEDICAL EQUIPMENT & SUPPLIES
- 0.8%
Abbott Laboratories 1,432,000 58,265
Johnson & Johnson 1,303,100 116,627
174,892
TOTAL HEALTH 1,983,845
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
INDUSTRIAL MACHINERY &
EQUIPMENT - 4.7%
ELECTRICAL EQUIPMENT - 4.0%
General Electric Co. 15,819,900 $ 832,516
INDUSTRIAL MACHINERY &
EQUIPMENT - 0.7%
Deere & Co. 2,491,800 103,565
Ingersoll-Rand Co. 848,600 38,664
142,229
TOTAL INDUSTRIAL MACHINERY & 974,745
EQUIPMENT
MEDIA & LEISURE - 4.6%
BROADCASTING - 1.9%
AT&T Corp. - Liberty Media 3,509,010 155,493
Group Class A (a)
Charter Communications, Inc. 2,432,300 29,644
Comcast Corp. Class A 1,213,800 45,973
(special) (a)
Cox Communications, Inc. 1,105,485 48,780
Class A (a)
Infinity Broadcasting Corp. 339,500 10,737
Class A (a)
Time Warner, Inc. 1,260,500 99,501
390,128
ENTERTAINMENT - 2.0%
Fox Entertainment Group, Inc. 3,115,700 81,398
Class A (a)
Viacom, Inc. Class B 4,305,171 266,921
(non-vtg.) (a)
Walt Disney Co. 1,895,000 79,945
428,264
PUBLISHING - 0.1%
McGraw-Hill Companies, Inc. 234,100 12,042
RESTAURANTS - 0.6%
McDonald's Corp. 3,833,900 137,302
TOTAL MEDIA & LEISURE 967,736
NONDURABLES - 0.5%
BEVERAGES - 0.1%
Seagram Co. Ltd. 374,200 17,504
HOUSEHOLD PRODUCTS - 0.4%
Clorox Co. 574,700 22,772
Procter & Gamble Co. 942,700 62,690
85,462
TOTAL NONDURABLES 102,966
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
RETAIL & WHOLESALE - 5.4%
GENERAL MERCHANDISE STORES -
2.8%
Kohls Corp. (a) 793,600 $ 41,069
Target Corp. 1,774,700 111,252
Wal-Mart Stores, Inc. 7,540,500 434,521
586,842
RETAIL & WHOLESALE,
MISCELLANEOUS - 2.6%
Best Buy Co., Inc. (a) 452,300 28,947
Circuit City Stores, Inc. - 545,300 27,163
Circuit City Group
Home Depot, Inc. 5,583,250 272,532
Lowe's Companies, Inc. 4,589,300 213,689
542,331
TOTAL RETAIL & WHOLESALE 1,129,173
SERVICES - 0.1%
ADVERTISING - 0.1%
Interpublic Group of 239,500 10,284
Companies, Inc.
SERVICES - 0.0%
Gartner Group, Inc. Class B 4,282 47
(a)
TOTAL SERVICES 10,331
TECHNOLOGY - 42.4%
COMMUNICATIONS EQUIPMENT - 9.8%
Ciena Corp. (a) 865,600 103,602
Cisco Systems, Inc. (a) 14,091,600 802,340
Corning, Inc. 561,800 108,673
Lucent Technologies, Inc. 1,633,200 93,705
Nokia AB sponsored ADR 8,558,700 445,052
Nortel Networks Corp. 5,322,000 283,615
Oni Systems Corp. 11,300 283
Telefonaktiebolaget LM 9,892,400 202,794
Ericsson sponsored ADR
2,040,064
COMPUTER SERVICES & SOFTWARE
- 9.6%
Adobe Systems, Inc. 1,894,300 213,227
America Online, Inc. (a) 3,783,400 200,520
Automatic Data Processing, 3,333,000 183,107
Inc.
BEA Systems, Inc. (a) 1,057,300 38,195
BroadVision, Inc. (a) 1,623,100 58,127
Citrix Systems, Inc. (a) 1,688,100 88,836
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
TECHNOLOGY - CONTINUED
COMPUTER SERVICES & SOFTWARE
- CONTINUED
Computer Associates 517,700 $ 26,662
International, Inc.
Computer Sciences Corp. (a) 866,000 83,082
E.piphany, Inc. 187,000 14,609
First Data Corp. 878,900 49,273
i2 Technologies, Inc. (a) 374,200 39,806
InfoSpace.com, Inc. (a) 686,400 29,773
Microsoft Corp. (a) 3,729,200 233,308
Network Solutions, Inc. Class 570,100 84,268
A (a)
Oracle Corp. (a) 5,631,500 404,764
Phone.com, Inc. 342,400 23,947
Redback Networks, Inc. 225,700 18,931
Siebel Systems, Inc. (a) 873,100 102,153
VeriSign, Inc. (a) 549,100 74,334
Yahoo!, Inc. (a) 327,000 36,971
2,003,893
COMPUTERS & OFFICE EQUIPMENT
- 7.2%
Compaq Computer Corp. 4,518,200 118,603
Dell Computer Corp. (a) 3,082,800 132,946
EMC Corp. (a) 1,960,100 227,984
Hewlett-Packard Co. 1,088,600 130,768
International Business 608,000 65,246
Machines Corp.
Network Appliance, Inc. (a) 2,004,400 129,409
SCI Systems, Inc. (a)(c) 7,501,800 337,581
Sun Microsystems, Inc. (a) 4,869,600 373,133
1,515,670
ELECTRONIC INSTRUMENTS - 2.7%
Agilent Technologies, Inc. 972,100 71,571
Applied Materials, Inc. (a) 2,613,800 218,252
KLA-Tencor Corp. (a) 1,668,500 82,695
LAM Research Corp. (a) 5,865,200 188,420
560,938
ELECTRONICS - 13.1%
Analog Devices, Inc. (a) 3,356,000 258,412
Broadcom Corp. Class A (a) 704,500 91,629
Flextronics International 3,075,541 167,425
Ltd. (a)
Intel Corp. 4,461,400 556,281
JDS Uniphase Corp. (a) 1,633,800 143,774
Methode Electronics, Inc. 564,000 20,234
Class A
Micron Technology, Inc. (a) 4,778,000 334,161
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1) (000S)
TECHNOLOGY - CONTINUED
ELECTRONICS - CONTINUED
Molex, Inc. Class A 2,420,565 $ 89,258
Motorola, Inc. 958,300 89,841
National Semiconductor Corp. 3,253,600 174,881
(a)
PMC-Sierra, Inc. (a) 210,100 32,198
Sanmina Corp. (a) 1,007,200 64,083
Texas Instruments, Inc. 7,311,000 528,220
Tyco International Ltd. 2,006,500 94,431
Xilinx, Inc. (a) 1,334,100 101,558
2,746,386
TOTAL TECHNOLOGY 8,866,951
UTILITIES - 6.9%
CELLULAR - 5.0%
AT&T Corp. - Wireless Group 850,000 24,278
China Telecom Ltd. sponsored 935,400 137,504
ADR (a)
Nextel Communications, Inc. 2,049,500 189,835
Class A (a)
Nextel Partners, Inc. Class A 36,500 621
QUALCOMM, Inc. (a) 757,000 50,246
Sprint Corp. - PCS Group 4,625,900 256,737
Series 1 (a)
Vodafone AirTouch PLC 5,898,600 270,230
sponsored ADR
VoiceStream Wireless Corp. (a) 959,200 109,828
1,039,279
ELECTRIC UTILITY - 0.3%
AES Corp. (a) 793,500 69,233
TELEPHONE SERVICES - 1.6%
Bell Atlantic Corp. 920,292 48,660
Level 3 Communications, Inc. 1,545,100 117,910
(a)
NEXTLINK Communications, Inc. 1,065,600 74,659
Class A (a)
Telefonica SA sponsored ADR 843,000 51,318
U.S. WEST, Inc. 233,700 16,826
WorldCom, Inc. (a) 568,206 21,379
330,752
TOTAL UTILITIES 1,439,264
TOTAL COMMON STOCKS 20,192,189
(Cost $15,686,433)
CASH EQUIVALENTS - 4.6%
SHARES VALUE (NOTE 1) (000S)
Central Cash Collateral Fund, 153,018,100 $ 153,018
6.54% (b)
Taxable Central Cash Fund, 814,363,328 814,363
6.37% (b)
TOTAL CASH EQUIVALENTS 967,381
(Cost $967,381)
TOTAL INVESTMENT PORTFOLIO - 21,159,570
101.2%
(Cost $16,653,814)
NET OTHER ASSETS - (1.2)% (246,329)
NET ASSETS - 100% $ 20,913,241
</TABLE>
LEGEND
(a) Non-income producing
(b) The rate quoted is the annualized seven-day yield of the fund at
period end.
(c) Affiliated company
Distribution of investments by country of issue, as a percentage of
total net assets, is as follows:
United States of America 88.5%
Finland 2.1
United Kingdom 2.1
Canada 1.5
Japan 1.3
Sweden 1.0
Others (individually less 3.5
than 1%)
100.0%
INCOME TAX INFORMATION
At May 31, 2000, the aggregate cost of investment securities for
income tax purposes was $16,652,335,000. Net unrealized appreciation
aggregated $4,507,235,000, of which $5,703,406,000 related to
appreciated investment securities and $1,196,171,000 related to
depreciated investment securities.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
AMOUNTS IN THOUSANDS
MAY 31, 2000 (UNAUDITED)
ASSETS
Investment in securities, at $ 21,159,570
value (cost $16,653,814) -
See accompanying schedule
Receivable for investments 49,569
sold
Receivable for fund shares 11,424
sold
Dividends receivable 11,639
Interest receivable 3,519
Other receivables 448
TOTAL ASSETS 21,236,169
LIABILITIES
Payable for investments $ 58,857
purchased
Payable for fund shares 92,528
redeemed
Accrued management fee 5,923
Distribution fees payable 9,512
Other payables and accrued 3,090
expenses
Collateral on securities 153,018
loaned, at value
TOTAL LIABILITIES 322,928
NET ASSETS $ 20,913,241
Net Assets consist of:
Paid in capital $ 15,364,774
Distributions in excess of (25,388)
net investment income
Accumulated undistributed net 1,068,200
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 4,505,655
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS $ 20,913,241
STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
AMOUNTS IN THOUSANDS (EXCEPT
PER-SHARE AMOUNTS)
MAY 31, 2000 (UNAUDITED)
CALCULATION OF MAXIMUM $41.54
OFFERING PRICE CLASS A: NET
ASSET VALUE and redemption
price per share ($536,351
(divided by) 12,911 shares)
Maximum offering price per $44.07
share (100/94.25 of $41.54)
CLASS T: NET ASSET VALUE and $41.96
redemption price per share
($17,712,449 (divided by)
422,083 shares)
Maximum offering price per $43.48
share (100/96.50 of $41.96)
CLASS B: NET ASSET VALUE and $41.37
offering price per share
($1,783,952 (divided by)
43,124 shares) A
CLASS C: NET ASSET VALUE and $41.45
offering price per share
($519,289 (divided by)
12,527 shares) A
INSTITUTIONAL CLASS: NET $41.96
ASSET VALUE, offering price
and redemption price per
share ($361,200 (divided by)
8,609 shares)
REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS SIX
MONTHS ENDED MAY 31, 2000
(UNAUDITED)
INVESTMENT INCOME $ 107,682
Dividends (including $1,445
received from affiliated
issuers)
Interest 33,610
Security lending 711
TOTAL INCOME 142,003
EXPENSES
Management fee Basic fee $ 70,842
Performance adjustment (24,964)
Transfer agent fees 23,279
Distribution fees 66,210
Accounting and security 708
lending fees
Non-interested trustees' 48
compensation
Custodian fees and expenses 313
Registration fees 468
Audit 69
Legal 75
Interest 111
Miscellaneous 49
Total expenses before 137,208
reductions
Expense reductions (5,269) 131,939
NET INVESTMENT INCOME 10,064
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 1,139,527
(including realized loss of
$131,018 on sales of
investments in affiliated
issuers)
Foreign currency transactions (290) 1,139,237
Change in net unrealized
appreciation (depreciation)
on:
Investment securities (3,040,491)
Assets and liabilities in (55) (3,040,546)
foreign currencies
NET GAIN (LOSS) (1,901,309)
NET INCREASE (DECREASE) IN $ (1,891,245)
NET ASSETS RESULTING FROM
OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
AMOUNTS IN THOUSANDS SIX MONTHS ENDED MAY 31, 2000 YEAR ENDED NOVEMBER 30, 1999
(UNAUDITED)
INCREASE (DECREASE) IN NET
ASSETS
Operations Net investment $ 10,064 $ 205,720
income
Net realized gain (loss) 1,139,237 3,285,007
Change in net unrealized (3,040,546) (1,529,997)
appreciation (depreciation)
NET INCREASE (DECREASE) IN (1,891,245) 1,960,730
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (174,951) (195,067)
From net investment income
In excess of net investment (25,388) -
income
From net realized gain (2,846,861) (939,863)
TOTAL DISTRIBUTIONS (3,047,200) (1,134,930)
Share transactions - net (2,681,296) 194,901
increase (decrease)
TOTAL INCREASE (DECREASE) (7,619,741) 1,020,701
IN NET ASSETS
NET ASSETS
Beginning of period 28,532,982 27,512,281
End of period (including $ 20,913,241 $ 28,532,982
under (over) distribution of
net investment income of
$(25,388) and $191,572,
respectively)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS A
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 I 1997 H
Net asset value, beginning of $ 50.61 $ 49.33 $ 44.02 $ 42.57 $ 35.39
period
Income from Investment
Operations
Net investment income D .07 .47 .48 .04 .54
Net realized and unrealized (3.51) 2.97 8.03 1.41 8.80
gain (loss)
Total from investment (3.44) 3.44 8.51 1.45 9.34
operations
Less Distributions
From net investment income (.45) (.47) (.60) - (.72)
In excess of net investment (.07) - - - -
income
From net realized gain (5.11) (1.69) (2.60) - (1.44)
Total distributions (5.63) (2.16) (3.20) - (2.16)
Net asset value, end of period $ 41.54 $ 50.61 $ 49.33 $ 44.02 $ 42.57
TOTAL RETURN B, C (7.69)% 7.31% 20.82% 3.41% 27.58%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 536 $ 640 $ 359 $ 143 $ 130
millions)
Ratio of expenses to average .89% A .92% .97% 1.10% A, F 1.05%
net assets
Ratio of expenses to average .84% A, G .91% G .96% G 1.09% A, G 1.04% G
net assets after expense
reductions
Ratio of net investment .32% A .93% 1.06% 1.22% A 1.36%
income to average net assets
Portfolio turnover 131% A 43% 25% 33% A 35%
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
FINANCIAL HIGHLIGHTS - CLASS A
YEARS ENDED NOVEMBER 30,
SELECTED PER-SHARE DATA 1996 E
Net asset value, beginning of $ 32.86
period
Income from Investment
Operations
Net investment income D .09
Net realized and unrealized 2.44
gain (loss)
Total from investment 2.53
operations
Less Distributions
From net investment income -
In excess of net investment -
income
From net realized gain -
Total distributions -
Net asset value, end of period $ 35.39
TOTAL RETURN B, C 7.70%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 10
millions)
Ratio of expenses to average 1.48% A, F
net assets
Ratio of expenses to average 1.47% A, G
net assets after expense
reductions
Ratio of net investment 1.74% A
income to average net assets
Portfolio turnover 33%
</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 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.
H YEAR ENDED OCTOBER 31
I ONE MONTH ENDED NOVEMBER 30, 1997
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL
STATEMENTS.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS T
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 G 1997 F
Net asset value, beginning of $ 50.96 $ 49.63 $ 44.20 $ 42.76 $ 35.41
period
Income from Investment
Operations
Net investment income .03 D .37 D .42 D .03 D .55 D
Net realized and unrealized (3.55) 3.00 8.08 1.41 8.78
gain (loss)
Total from investment (3.52) 3.37 8.50 1.44 9.33
operations
Less Distributions
From net investment income (.32) (.35) (.47) - (.54)
In excess of net investment (.05) - - - -
income
From net realized gain (5.11) (1.69) (2.60) - (1.44)
Total distributions (5.48) (2.04) (3.07) - (1.98)
Net asset value, end of period $ 41.96 $ 50.96 $ 49.63 $ 44.20 $ 42.76
TOTAL RETURN B, C (7.78)% 7.10% 20.63% 3.37% 27.43%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 17,712 $ 24,357 $ 24,802 $ 20,411 $ 19,652
millions)
Ratio of expenses to average 1.08% A 1.12% 1.14% 1.28% A 1.18%
net assets
Ratio of expenses to average 1.03% A, E 1.11% E 1.13% E 1.27% A, E 1.17% E
net assets after expense
reductions
Ratio of net investment .13% A .73% .92% 1.03% A 1.39%
income to average net assets
Portfolio turnover 131% A 43% 25% 33% A 35%
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS T
YEARS ENDED NOVEMBER 30,
SELECTED PER-SHARE DATA 1996 F 1995 F
Net asset value, beginning of $ 30.89 $ 26.62
period
Income from Investment
Operations
Net investment income .61 D .39
Net realized and unrealized 4.72 5.31
gain (loss)
Total from investment 5.33 5.70
operations
Less Distributions
From net investment income (.41) (.27)
In excess of net investment - -
income
From net realized gain (.40) (1.16)
Total distributions (.81) (1.43)
Net asset value, end of period $ 35.41 $ 30.89
TOTAL RETURN B, C 17.61% 22.88%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 14,315 $ 9,691
millions)
Ratio of expenses to average 1.34% 1.59%
net assets
Ratio of expenses to average 1.34% 1.58% E
net assets after expense
reductions
Ratio of net investment 1.88% 1.56%
income to average net assets
Portfolio turnover 33% 39%
</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 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.
F YEAR ENDED OCTOBER 31
G ONE MONTH ENDED NOVEMBER 30, 1997
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL
STATEMENTS.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS B
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 H 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 50.25 $ 49.12 $ 44.02 $ 42.60 $ 37.62
period
Income from Investment
Operations
Net investment income (loss) D (.10) .09 .14 .02 .13
Net realized and unrealized (3.49) 2.97 8.04 1.40 4.85
gain (loss)
Total from investment (3.59) 3.06 8.18 1.42 4.98
operations
Less Distributions
From net investment income (.16) (.24) (.48) - -
In excess of net investment (.02) - - - -
income
From net realized gain (5.11) (1.69) (2.60) - -
Total distributions (5.29) (1.93) (3.08) - -
Net asset value, end of $ 41.37 $ 50.25 $ 49.12 $ 44.02 $ 42.60
period
TOTAL RETURN B, C (8.02)% 6.50% 19.95% 3.33% 13.24%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 1,784 $ 2,264 $ 1,432 $ 423 $ 371
millions)
Ratio of expenses to average 1.66% A 1.67% 1.71% 1.85% A, F 1.75% A
net assets
Ratio of expenses to average 1.61% A, G 1.66% G 1.70% G 1.84% A, G 1.74% A, G
net assets after expense
reductions
Ratio of net investment (.45)% A .19% .31% .47% A .48% A
income (loss) to average
net assets
Portfolio turnover 131% A 43% 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.
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 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.
H ONE MONTH ENDED NOVEMBER 30, 1997
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS C
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 50.39 $ 49.33 $ 44.20 $ 43.62
period
Income from Investment
Operations
Net investment income (loss) D (.09) .10 .12 .02
Net realized and unrealized (3.51) 2.97 8.08 .56
gain (loss)
Total from investment (3.60) 3.07 8.20 .58
operations
Less Distributions
From net investment income (.20) (.32) (.47) -
In excess of net investment (.03) - - -
income
From net realized gain (5.11) (1.69) (2.60) -
Total distributions (5.34) (2.01) (3.07) -
Net asset value, end of period $ 41.45 $ 50.39 $ 49.33 $ 44.20
TOTAL RETURN B, C (8.03)% 6.50% 19.91% 1.33%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 519 $ 688 $ 301 $ 6
millions)
Ratio of expenses to average 1.63% A 1.65% 1.70% 1.85% A, F
net assets
Ratio of expenses to average 1.59% A, G 1.64% G 1.70% 1.84% A, G
net assets after expense
reductions
Ratio of net investment (.42)% A .20% .27% .74% A
income (loss) to average net
assets
Portfolio turnover 131% A 43% 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 (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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
SELECTED PER-SHARE DATA (UNAUDITED) 1999 1998 1997 H 1997 G 1996 G
Net asset value, beginning of $ 51.10 $ 49.78 $ 44.31 $ 42.85 $ 35.47 $ 30.97
period
Income from Investment
Operations
Net investment income .14 D .63 D .65 D .05 D .75 D .77 D
Net realized and unrealized (3.53) 2.98 8.10 1.41 8.78 4.74
gain (loss)
Total from investment (3.39) 3.61 8.75 1.46 9.53 5.51
operations
Less Distributions
From net investment income (.56) (.60) (.68) - (.71) (.61)
In excess of net investment (.08) - - - - -
income
From net realized gain (5.11) (1.69) (2.60) - (1.44) (.40)
Total distributions (5.75) (2.29) (3.28) - (2.15) (1.01)
Net asset value, end of period $ 41.96 $ 51.10 $ 49.78 $ 44.31 $ 42.85 $ 35.47
TOTAL RETURN B, C (7.52)% 7.62% 21.29% 3.41% 28.07% 18.25%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in $ 361 $ 584 $ 618 $ 392 $ 375 $ 250
millions)
Ratio of expenses to average .56% A .62% .62% .71% A .66% .85%
net assets
Ratio of expenses to average .52% A, F .61% F .61% F .70% A, F .65% F .84% F
net assets after expense
reductions
Ratio of net investment .65% A 1.24% 1.43% 1.60% A 1.91% 2.38%
income to average net assets
Portfolio turnover 131% A 43% 25% 33% A 35% 33%
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
YEARS ENDED NOVEMBER 30,
SELECTED PER-SHARE DATA 1995 E
Net asset value, beginning of $ 29.04
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 -
In excess of 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 (in $ 72
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.
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.
H YEAR ENDED OCTOBER 31
I ONE MONTH ENDED NOVEMBER 30, 1997
SEE ACCOMPANYING NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL
STATEMENTS.
NOTES TO FINANCIAL STATEMENTS
For the period ended May 31, 2000 (Unaudited)
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. 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. Foreign securities are valued based
on quotations from the principal market in which such securities are
normally traded. If trading or events occurring in other markets after
the close of the principal market in which foreign securities are
traded, and before the close of the business of the fund, are expected
to materially affect the value of those securities, then they are
valued at their fair value taking this trading or these events into
account. Fair value is determined in good faith under consistently
applied procedures under the general supervision of the Board of
Trustees. 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. 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.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
FOREIGN CURRENCY TRANSLATION - CONTINUED
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.
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 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,
market discount, 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.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Distributions in excess of net investment income and accumulated
undistributed net realized gain (loss) on investments and foreign
currency transactions may include temporary book and tax basis
differences that will reverse in a subsequent period. Any taxable
income or short-term 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 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, Federal Agency,
or other obligations found to be satisfactory by FMR 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.
CENTRAL CASH FUNDS. Pursuant to an Exemptive Order issued by the SEC,
the fund may invest in the Taxable Central Cash Fund and the Central
Cash Collateral Fund (the Cash Funds) managed by Fidelity Investments
Money Management, Inc., an affiliate of FMR. The Cash Funds are
open-end money market funds available only to investment companies and
other accounts managed by FMR and its affiliates. The Cash Funds seek
preservation of capital, liquidity, and current income. Income
distributions from the Cash Funds are declared daily and paid monthly
from net interest income. Income distributions earned by the fund are
recorded as either interest income or security lending income in the
accompanying financial statements.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $15,840,307,000 and $21,013,650,000, respectively, of which
U.S. government and government agency obligations aggregated $0 and
$2,036,577,000, 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 .2167% 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 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 annualized rate of .38% of average net assets
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the
1940 Act, the Board of Trustees have adopted separate Distribution and
Service 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.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
DISTRIBUTION AND SERVICE PLAN - CONTINUED
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 $ 738,000 $ 2,000
CLASS T 52,313,000 562,000
CLASS B 10,131,000 7,606,000
CLASS C 3,028,000 1,444,000
$ 66,210,000 $ 9,614,000
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 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 is 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 $ 897,000 $ 355,000
CLASS T 2,359,000 721,000
CLASS B 4,642,000 4,642,000 *
CLASS C 279,000 279,000 *
$ 8,177,000 $ 5,997,000
* 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 (collectively referred to
as the transfer 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 $ 716,000 .24 *
CLASS T 18,904,000 .18 *
CLASS B 2,579,000 .26 *
CLASS C 693,000 .23 *
INSTITUTIONAL CLASS 387,000 .17 *
$ 23,279,000
* ANNUALIZED
ACCOUNTING AND SECURITY LENDING FEES. Fidelity Service Company, Inc.,
an affiliate of FMR, maintains the fund's accounting records and
administers the security lending program. The security lending fee is
based on the number and duration of lending transactions. The
accounting fee is based on the level of average net assets for the
month plus out-of-pocket expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $610,000 for the
period.
5. INTERFUND LENDING PROGRAM.
The fund participated in the interfund lending program as a borrower.
The average daily loan balance during the period for which loans were
outstanding amounted to $51,086,000. The weighted average interest
rate was 5.87%. Interest expense includes $16,000 paid under the
interfund lending program.
6. SECURITY LENDING.
The fund lends portfolio securities from time to time in order to earn
additional income. The fund receives collateral in the form of U.S.
Treasury obligations, letters of credit, and/or cash against the
loaned securities, and maintains collateral in an amount not less than
100% of the market value of the loaned securities during the period of
the loan. The market value of the loaned securities is determined at
the close of business of the fund
6. SECURITY LENDING - CONTINUED
and any additional required collateral is delivered to the fund on the
next business day. If the borrower defaults on its obligation to
return the securities loaned because of insolvency or other reasons,
the fund could experience delays and costs in recovering the
securities loaned or in gaining access to the collateral. At period
end, the value of the securities loaned amounted to $147,778,000. The
fund received cash collateral of $153,018,000 which was invested in
cash equivalents.
7. 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. The interest
rate on the borrowings is the bank's base rate, as revised from time
to time. The average daily loan balance during the period for which
loans were outstanding amounted to $149,130,000. The weighted average
interest rate was 5.71%. Interest expense includes $95,000 paid under
the bank borrowing program.
8. 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 $5,105,000 under this arrangement.
In addition, through arrangements with the fund's custodian and each
class' transfer agent, 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 $90,000 under the custodian
arrangement, and each applicable class' expenses were reduced as
follows under the transfer agent arrangements:
TRANSFER AGENT CREDITS
CLASS A $ 8,000
CLASS T 64,000
CLASS B 1,000
CLASS C 1,000
$ 74,000
9. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
AMOUNTS IN THOUSANDS SIX MONTHS ENDED MAY 31, 2000 YEAR ENDED NOVEMBER 30, 1999
FROM NET INVESTMENT INCOME
Class A $ 5,702 $ 3,446
Class T 153,146 175,050
Class B 7,046 7,090
Class C 2,733 2,000
Institutional Class 6,324 7,481
Total $ 174,951 $ 195,067
IN EXCESS OF NET INVESTMENT
INCOME
Class A $ 828 $ -
Class T 22,223 -
Class B 1,022 -
Class C 397 -
Institutional Class 918 -
Total $ 25,388 $ -
FROM NET REALIZED GAIN
Class A $ 64,315 $ 12,417
Class T 2,425,572 845,704
Class B 229,452 50,007
Class C 69,641 10,642
Institutional Class 57,881 21,093
Total $ 2,846,861 $ 939,863
$ 3,047,200 $ 1,134,930
</TABLE>
10. SHARE TRANSACTIONS.
Transactions for each class of shares for the periods were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SHARES DOLLARS
AMOUNTS IN THOUSANDS SIX MONTHS ENDED MAY 31, YEAR ENDED NOVEMBER 30, SIX MONTHS ENDED MAY 31,
2000 1999 2000
CLASS A Shares sold 7,706 $ 120,481
2,718
Reinvestment of distributions 1,487 317 67,254
Shares redeemed (3,931) (2,665) (173,748)
Net increase (decrease) 274 5,358 $ 13,987
CLASS T Shares sold 33,542 84,989 $ 1,494,123
Reinvestment of distributions 53,007 20,264 2,424,402
Shares redeemed (142,447) (126,979) (6,364,961)
Net increase (decrease) (55,898) (21,726) $ (2,446,436)
CLASS B Shares sold 4,952 20,524 $ 219,510
Reinvestment of distributions 4,562 1,064 206,305
Shares redeemed (11,446) (5,677) (504,387)
Net increase (decrease) (1,932) 15,911 $ (78,572)
CLASS C Shares sold 2,728 9,384 $ 121,650
Reinvestment of distributions 1,259 217 57,030
Shares redeemed (5,116) (2,048) (225,846)
Net increase (decrease) (1,129) 7,553 $ (47,166)
INSTITUTIONAL CLASS Shares 1,727 4,369 $ 77,397
sold
Reinvestment of distributions 1,159 505 52,861
Shares redeemed (5,704) (5,872) (253,367)
Net increase (decrease) (2,818) (998) $ (123,109)
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
DOLLARS
AMOUNTS IN THOUSANDS YEAR ENDED NOVEMBER 30,
1999
CLASS A Shares sold $ 388,943
Reinvestment of distributions 14,915
Shares redeemed (134,575)
Net increase (decrease) $ 269,283
CLASS T Shares sold $ 4,305,403
Reinvestment of distributions 961,462
Shares redeemed (6,461,873)
Net increase (decrease) $ (1,195,008)
CLASS B Shares sold $ 1,029,947
Reinvestment of distributions 50,034
Shares redeemed (285,427)
Net increase (decrease) $ 794,554
CLASS C Shares sold $ 472,443
Reinvestment of distributions 10,228
Shares redeemed (103,255)
Net increase (decrease) $ 379,416
INSTITUTIONAL CLASS Shares $ 220,446
sold
Reinvestment of distributions 23,925
Shares redeemed (297,715)
Net increase (decrease) $ (53,344)
</TABLE>
11. 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:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SUMMARY OF TRANSACTIONS WITH
AFFILIATED COMPANIES
AMOUNTS IN THOUSANDS PURCHASE COST SALES COST DIVIDEND INCOME VALUE
AFFILIATE
AmeriSource Health Corp. $ 5,102 $ 71,814 $ - $ -
Class A
Burlington Industries, Inc. - 1,984 - -
Centex Corp. - 61,580 181 -
Cummins Engine Co., Inc. - 5,401 - -
D.R. Horton, Inc. 549 22,671 137 -
Discount Auto Parts, Inc. - 4,825 - -
Kaufman & Broad Home Corp. - 50,146 254 -
LAM Research Corp. - 5,433 - -
Lennar Corp. 714 28,639 31 -
Liz Claiborne, Inc. - 52,597 - -
MGIC Investment Corp. - 135,172 - -
Policy Management Systems 6,665 28,992 - -
Corp.
SCI Systems, Inc. - 16,408 - 337,581
Tech Data Corp. 5,158 96,008 - -
Tosco Corp. - 11,597 525 -
Warnaco Group, Inc. Class A - 17,457 317 -
TOTALS $ 18,188 $ 610,724 $ 1,445 $ 337,581
</TABLE>
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research
(U.K.) Inc.
Fidelity Management & Research
(Far East) Inc.
Fidelity Investments Japan Ltd.
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Abigail P. Johnson, Vice President
Bettina Doulton, Vice President
Eric D. Roiter, Secretary
Robert A. Dwight, Treasurer
Maria F. Dwyer, Deputy Treasurer
John H. Costello, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
Donald J. Kirk *
Ned C. Lautenbach *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
* INDEPENDENT TRUSTEES
ADVISORY BOARD
J. Michael Cook
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 Telecommunications & Utilities Growth Fund
GROWTH FUNDS
Fidelity Advisor Latin America Fund
Fidelity Advisor Emerging Asia 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(registered trademark)
Growth Fund
Fidelity Advisor Small Cap Fund
Fidelity Advisor Value Strategies Fund
Fidelity Advisor Mid Cap Fund
Fidelity Advisor Dynamic Capital Appreciation Fund
Fidelity Advisor Equity Growth Fund
Fidelity Advisor Large Cap Fund
Fidelity Advisor Dividend Growth Fund
Fidelity Advisor Growth
Opportunities Fund
GOI-SANN-0700 106148
1.704619.102
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 High Income 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
MONEY MARKET FUNDS
Prime Fund
Treasury Fund
Tax-Exempt Fund
(2_FIDELITY_LOGOS)(registered trademark)
FIDELITY(REGISTERED TRADEMARK) ADVISOR
MID CAP
FUND - CLASS A, CLASS T, CLASS B AND CLASS C
SEMIANNUAL REPORT
MAY 31, 2000
(2_FIDELITY_LOGOS)(registered trademark)
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 29 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 38 Notes to the financial
statements.
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 technology sell-off that began in mid-March continued to hamper
equity markets, driving the tech-heavy NASDAQ index down more than 16%
year to date through the end of May. Broader equity indexes, including
the S&P 500(registered trademark), also were down, but not as much as
more concentrated performance measures. In bond markets, Treasuries
got a boost late in the period as economic reports showed the first
signs of a slowing economy.
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 an investment in a money market fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although money market funds seek to preserve the
value of your investment at $1.00 per share, it is possible to lose
money by investing in these types of funds.
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 life of fund
total return would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
FIDELITY ADV MID CAP - CL A 26.88% 42.34% 155.67%
FIDELITY ADV MID CAP - CL A 19.58% 34.16% 140.97%
(INCL. 5.75% SALES CHARGE)
S&P MidCap 400 (registered 13.78% 21.46% 123.25%
trademark)
Mid-Cap Funds Average 14.74% 33.79% n/a
CUMULATIVE TOTAL RETURNS show Class A's performance in percentage
terms over a set period - in this case, six months, 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(registered trademark) Index - a 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 Inc. The past six months
average represents a peer group of 473 mutual funds. These benchmarks
include reinvested dividends and capital gains, if any, and exclude
the effect of sales charges. Lipper has created new comparison
categories that group funds according to portfolio characteristics and
capitalization, as well as by capitalization only. These averages are
listed on page 5 of this report.*
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 YEAR LIFE OF FUND
FIDELITY ADV MID CAP - CL A 42.34% 24.53%
FIDELITY ADV MID CAP - CL A 34.16% 22.82%
(INCL. 5.75% SALES CHARGE)
S&P MidCap 400 21.46% 20.65%
Mid-Cap Funds Average 33.79% 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
1998/12/31 15886.12 18120.19
1999/01/31 16085.81 17414.77
1999/02/28 15220.50 16502.94
1999/03/31 15919.40 16964.03
1999/04/30 17006.58 18302.15
1999/05/31 16928.93 18381.40
1999/06/30 17993.92 19365.72
1999/07/31 17616.73 18954.20
1999/08/31 17627.83 18304.45
1999/09/30 17139.71 17739.39
1999/10/31 17927.36 18643.39
1999/11/30 18992.35 19621.99
1999/12/31 21997.62 20788.12
2000/01/31 22294.26 20202.73
2000/02/29 28688.08 21616.51
2000/03/31 27113.66 23425.60
2000/04/30 25214.75 22607.58
2000/05/31 24097.03 22325.43
IMATRL PRASUN SHR__CHT 20000531 20000621 094515 R00000000000055
$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 May 31, 2000, the value of the investment
would have grown to $24,097 - a 140.97% 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
$22,325 - a 123.25% increase.
(checkmark)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.
* THE LIPPER MID-CAP CORE FUNDS AVERAGE REFLECTS THE PERFORMANCE
(EXCLUDING SALES CHARGES) OF MUTUAL FUNDS WITH SIMILAR PORTFOLIO
CHARACTERISTICS AND CAPITALIZATION. THE MID-CAP SUPERGROUP AVERAGE
REFLECTS THE PERFORMANCE (EXCLUDING SALES CHARGES) OF MUTUAL FUNDS
WITH SIMILAR CAPITALIZATION. AS OF MAY 31, 2000, THE SIX MONTH AND ONE
YEAR CUMULATIVE TOTAL RETURNS FOR THE MID-CAP CORE FUNDS AVERAGE WERE,
15.53% AND 34.08%, RESPECTIVELY. THE ONE YEAR AVERAGE ANNUAL TOTAL
RETURN WAS 34.08%. THE SIX MONTH AND ONE YEAR CUMULATIVE TOTAL RETURNS
FOR THE MID-CAP SUPERGROUP AVERAGE WERE, 13.11% AND 33.61%,
RESPECTIVELY. THE ONE YEAR AVERAGE ANNUAL TOTAL RETURN WAS 33.61%.
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 PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
FIDELITY ADV MID CAP - CL T 26.82% 42.11% 154.81%
FIDELITY ADV MID CAP - CL T 22.38% 37.14% 145.89%
(INCL. 3.50% SALES CHARGE)
S&P MidCap 400 13.78% 21.46% 123.25%
Mid-Cap Funds Average 14.74% 33.79% n/a
CUMULATIVE TOTAL RETURNS show Class T's performance in percentage
terms over a set period - in this case, six months, 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 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 Inc. The past six months average represents a peer group of 473
mutual funds. These benchmarks include reinvested dividends and
capital gains, if any, and exclude the effect of sales charges. Lipper
has created new comparison categories that group funds according to
portfolio characteristics and capitalization, as well as by
capitalization only. These averages are listed on page 7 of this
report.*
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 YEAR LIFE OF FUND
FIDELITY ADV MID CAP - CL T 42.11% 24.43%
FIDELITY ADV MID CAP - CL T 37.14% 23.40%
(INCL. 3.50% SALES CHARGE)
S&P MidCap 400 21.46% 20.65%
Mid-Cap Funds Average 33.79% 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
1998/12/31 16242.41 18120.19
1999/01/31 16456.72 17414.77
1999/02/28 15565.65 16502.94
1999/03/31 16276.25 16964.03
1999/04/30 17392.92 18302.15
1999/05/31 17302.68 18381.40
1999/06/30 18385.51 19365.72
1999/07/31 17990.73 18954.20
1999/08/31 18002.01 18304.45
1999/09/30 17505.71 17739.39
1999/10/31 18317.83 18643.39
1999/11/30 19389.38 19621.99
1999/12/31 22461.73 20788.12
2000/01/31 22762.40 20202.73
2000/02/29 29302.48 21616.51
2000/03/31 27694.86 23425.60
2000/04/30 25746.24 22607.58
2000/05/31 24589.24 22325.43
IMATRL PRASUN SHR__CHT 20000531 20000621 094859 R00000000000055
$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 May 31, 2000, the value of the investment
would have grown to $24,589 - a 145.89% 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
$22,325 - a 123.25% increase.
(checkmark)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.
* THE LIPPER MID-CAP CORE FUNDS AVERAGE REFLECTS THE PERFORMANCE
(EXCLUDING SALES CHARGES) OF MUTUAL FUNDS WITH SIMILAR PORTFOLIO
CHARACTERISTICS AND CAPITALIZATION. THE MID-CAP SUPERGROUP AVERAGE
REFLECTS THE PERFORMANCE (EXCLUDING SALES CHARGES) OF MUTUAL FUNDS
WITH SIMILAR CAPITALIZATION. AS OF MAY 31, 2000, THE SIX MONTH AND ONE
YEAR CUMULATIVE TOTAL RETURNS FOR THE MID-CAP CORE FUNDS AVERAGE WERE,
15.53% AND 34.08%, RESPECTIVELY. THE ONE YEAR AVERAGE ANNUAL TOTAL
RETURN WAS 34.08%. THE SIX MONTH AND ONE YEAR CUMULATIVE TOTAL RETURNS
FOR THE MID-CAP SUPERGROUP AVERAGE WERE, 13.11% AND 33.61%,
RESPECTIVELY. THE ONE YEAR AVERAGE ANNUAL TOTAL RETURN WAS 33.61%.
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 charges included in
the past six months, past one year and life of fund total return
figures are 5%, 5% and 2%, respectively.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
FIDELITY ADV MID CAP - CL B 26.44% 41.39% 148.41%
FIDELITY ADV MID CAP - CL B 21.44% 36.39% 146.41%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P MidCap 400 13.78% 21.46% 123.25%
Mid-Cap Funds Average 14.74% 33.79% n/a
CUMULATIVE TOTAL RETURNS show Class B's performance in percentage
terms over a set period - in this case, six months, 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 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 Inc. The past six months average represents a peer group of 473
mutual funds. These benchmarks include reinvested dividends and
capital gains, if any, and exclude the effect of sales charges. Lipper
has created new comparison categories that group funds according to
portfolio characteristics and capitalization, as well as by
capitalization only. These averages are listed on page 9 of this
report.*
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 YEAR LIFE OF FUND
FIDELITY ADV MID CAP - CL B 41.39% 23.69%
FIDELITY ADV MID CAP - CL B 36.39% 23.46%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P MidCap 400 21.46% 20.65%
Mid-Cap Funds Average 33.79% 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 15310.00 16166.91
1998/12/31 16536.44 18120.19
1999/01/31 16733.71 17414.77
1999/02/28 15828.56 16502.94
1999/03/31 16548.04 16964.03
1999/04/30 17662.08 18302.15
1999/05/31 17569.24 18381.40
1999/06/30 18671.67 19365.72
1999/07/31 18253.91 18954.20
1999/08/31 18265.51 18304.45
1999/09/30 17754.91 17739.39
1999/10/31 18555.62 18643.39
1999/11/30 19646.45 19621.99
1999/12/31 22743.86 20788.12
2000/01/31 23040.13 20202.73
2000/02/29 29631.96 21616.51
2000/03/31 27993.39 23425.60
2000/04/30 26004.58 22607.58
2000/05/31 24641.00 22325.43
IMATRL PRASUN SHR__CHT 20000531 20000621 095123 R00000000000055
$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 May 31, 2000, the
value of the investment, including the effect of the applicable
contingent deferred sales charge, would have been $24,641 - a 146.41%
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 $22,325 - a 123.25% increase.
(checkmark)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.
* THE LIPPER MID-CAP CORE FUNDS AVERAGE REFLECTS THE PERFORMANCE
(EXCLUDING SALES CHARGES) OF MUTUAL FUNDS WITH SIMILAR PORTFOLIO
CHARACTERISTICS AND CAPITALIZATION. THE MID-CAP SUPERGROUP AVERAGE
REFLECTS THE PERFORMANCE (EXCLUDING SALES CHARGES) OF MUTUAL FUNDS
WITH SIMILAR CAPITALIZATION. AS OF MAY 31, 2000, THE SIX MONTH AND ONE
YEAR CUMULATIVE TOTAL RETURNS FOR THE MID-CAP CORE FUNDS AVERAGE WERE,
15.53% AND 34.08%, RESPECTIVELY. THE ONE YEAR AVERAGE ANNUAL TOTAL
RETURN WAS 34.08%. THE SIX MONTH AND ONE YEAR CUMULATIVE TOTAL RETURNS
FOR THE MID-CAP SUPERGROUP AVERAGE WERE, 13.11% AND 33.61%,
RESPECTIVELY. THE ONE YEAR AVERAGE ANNUAL TOTAL RETURN WAS 33.61%.
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 six months, past one year and life of fund total
return figures are 1%, 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 PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
FIDELITY ADV MID CAP - CL C 26.41% 41.32% 147.53%
FIDELITY ADV MID CAP - CL C 25.41% 40.32% 147.53%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P MidCap 400 13.78% 21.46% 123.25%
Mid-Cap Funds Average 14.74% 33.79% n/a
CUMULATIVE TOTAL RETURNS show Class C's performance in percentage
terms over a set period - in this case, six months, 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 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 Inc. The past six months average represents a peer group of 473
mutual funds. These benchmarks include reinvested dividends and
capital gains, if any, and exclude the effect of sales charges. Lipper
has created new comparison categories that group funds according to
portfolio characteristics and capitalization, as well as by
capitalization only. These averages are listed on page 11 of this
report.*
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 YEAR LIFE OF FUND
FIDELITY ADV MID CAP - CL C 41.32% 23.59%
FIDELITY ADV MID CAP - CL C 40.32% 23.59%
(INCL. CONTINGENT DEFERRED
SALES CHARGE)
S&P MidCap 400 21.46% 20.65%
Mid-Cap Funds Average 33.79% 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
1998/12/31 16477.62 18120.19
1999/01/31 16685.33 17414.77
1999/02/28 15773.75 16502.94
1999/03/31 16489.16 16964.03
1999/04/30 17608.44 18302.15
1999/05/31 17516.13 18381.40
1999/06/30 18612.33 19365.72
1999/07/31 18196.93 18954.20
1999/08/31 18208.47 18304.45
1999/09/30 17689.21 17739.39
1999/10/31 18496.94 18643.39
1999/11/30 19581.60 19621.99
1999/12/31 22676.34 20788.12
2000/01/31 22959.08 20202.73
2000/02/29 29536.62 21616.51
2000/03/31 27904.69 23425.60
2000/04/30 25923.96 22607.58
2000/05/31 24752.96 22325.43
IMATRL PRASUN SHR__CHT 20000531 20000621 100022 R00000000000055
$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 May 31, 2000, the
value of the investment would have been $24,753 - a 147.53% 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 $22,325 - a 123.25% increase.
(checkmark)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.
* THE LIPPER MID-CAP CORE FUNDS AVERAGE REFLECTS THE PERFORMANCE
(EXCLUDING SALES CHARGES) OF MUTUAL FUNDS WITH SIMILAR PORTFOLIO
CHARACTERISTICS AND CAPITALIZATION. THE MID-CAP SUPERGROUP AVERAGE
REFLECTS THE PERFORMANCE (EXCLUDING SALES CHARGES) OF MUTUAL FUNDS
WITH SIMILAR CAPITALIZATION. AS OF MAY 31, 2000, THE SIX MONTH AND ONE
YEAR CUMULATIVE TOTAL RETURNS FOR THE MID-CAP CORE FUNDS AVERAGE WERE,
15.53% AND 34.08%, RESPECTIVELY. THE ONE YEAR AVERAGE ANNUAL TOTAL
RETURN WAS 34.08%. THE SIX MONTH AND ONE YEAR CUMULATIVE TOTAL RETURNS
FOR THE MID-CAP SUPERGROUP AVERAGE WERE, 13.11% AND 33.61%,
RESPECTIVELY. THE ONE YEAR AVERAGE ANNUAL TOTAL RETURN WAS 33.61%.
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
U.S. equity investors faced a steadily
declining market during the latter
part of the six-month period that
ended May 31, 2000, after
experiencing continued growth the
prior three months. Two chief
catalysts - a tightening of monetary
policy by the Federal Reserve Board
and the bursting of a speculative
bubble in technology stocks -
sparked a sustained pullback among
the major U.S. equity indexes that
began in March. The tech-heavy
NASDAQ Composite Index reached
a high of 5048 on March 10 before
quickly retreating below the 4000
level. The NASDAQ dropped to
3401 on the final day of the period,
gaining a modest 2.05% return for
the six-month period. The Standard
& Poor's 500SM Index - an index
of 500 widely held stocks - fared
slightly better in returning 2.90%.
Another index of well-established
stocks - the blue chips' Dow Jones
Industrial Average - surged higher
during the NASDAQ's sharp
plummet in April, but the brief rally
wasn't enough to significantly offset
earlier losses, and the Dow returned
-2.55% for the period. The Russell
2000(Registered trademark) Index - a barometer of
small-cap stocks - outperformed the
major indexes of larger companies
with a 5.50% return. As the period
drew to a close, weaker trading
volume suggested investors were
mixed about the direction of U.S.
stocks, and whether the three
interest-rate hikes levied by the
Fed during the period had begun
to cool off the overheated economy.
(photograph of David Felman)
An interview with David Felman, Portfolio Manager of Fidelity Advisor
Mid Cap Fund
Q. HOW DID THE FUND PERFORM, DAVID?
A. For the six-month period that ended on May 31, 2000, the fund's
Class A, Class T, Class B and Class C shares had total returns of
26.88%, 26.82%, 26.44% and 26.41%, respectively. During the same
period, the Standard & Poor's MidCap 400 Index returned 13.78% and the
mid-cap funds average monitored by Lipper Inc. was up 14.74%. For the
12-month period that ended on May 31, 2000, the fund's Class A, Class
T, Class B and Class C shares had total returns of 42.34%, 42.11%,
41.39% and 41.32%, respectively. The S&P MidCap index returned 21.46%
for the 12 months, while the mid-cap funds average was 33.79%.
Q. WHAT FACTORS AFFECTED PERFORMANCE?
A. Especially in the first four months of the period, the fund's heavy
weightings in technology and health care - notably biotechnology -
supported overall performance, as did my decision to reduce weightings
in media, advertising and financial services stocks. On the other
hand, I increased the fund's energy investments, and this helped late
in the period as energy prices rose and the industry rallied. The
strong performance of the fund's energy positions helped offset some
of the losses in our technology and biotechnology holdings, which
suffered a steep correction in April and May 2000. I believe the
correction was caused more by a general concern about high valuations
of technology and biotechnology stocks than any deterioration in the
business fundamentals of the fund's holdings.
Q. WHAT WERE YOUR PRINCIPAL STRATEGIES?
A. I had a heavy emphasis on technology throughout the period. Even
though I trimmed technology holdings late in the period, they still
accounted for 33% of net assets as of May 31. Within technology,
wireless communications and the Internet were my two principal
investment themes. Wireless market penetration and usage increased,
benefiting service providers such as Nextel and equipment companies
such as Kopin. The fund held good positions in both companies. Demand
for the Internet also grew. Internet-related investments that
performed particularly well included Exodus Communications,
DoubleClick and Veritas Software Corp.
Q. OUTSIDE OF TECHNOLOGY, YOUR LARGEST WEIGHTINGS WERE IN ENERGY AND
HEALTH CARE, AT 13.8% AND 11.9% OF NET ASSETS, RESPECTIVELY. WHAT WERE
YOUR STRATEGIES?
A. I was enthusiastic about the prospects for energy stocks. As OPEC
showed discipline in restraining oil production, prices rose.
Meanwhile, inventories were down. After several years of relatively
light spending on equipment, the industry started to increase its
capital investments. All these factors indicated improving prospects.
My better-performing energy investments included Apache, an
exploration and production company, and BJ Services, which provides
services for exploration companies. In health care, I invested in
biotechnology companies, which did well as developing drugs either
approached or reached the consumer market. Among the holdings that
benefited were COR Therapeutics and Cephalon. I also invested in
companies that could take advantage of developments in genomics, or
gene-mapping. Two examples that did well early in the period were
Incyte Pharmaceuticals and Gene Logic.
Q. WERE THERE ANY DISAPPOINTMENTS?
A. Idec Pharmaceuticals, a biotechnology company, had disappointing
performance after one of its principal drugs had slower-than-expected
sales growth. In general, the fund's relative performance suffered in
the final two months of the period when technology and biotechnology
stocks fell. My underweighting in financial stocks helped performance
for the first four months of the six-month period, but not in the
final two months. I avoided them because I thought they were at the
top of their cycle, merger-and-acquisition activity was slowing and
interest rates were rising. However, investors rotated into financial
services stocks as technology stocks fell. The same general trend
benefited cyclical stocks, which I had underweighted with the
exception of energy.
Q. WHAT IS YOUR OUTLOOK FOR THE MID-CAP STOCK MARKET?
A. The rapid growth of wireless communications and increased Internet
usage are major long-term trends. However, the stocks that benefited
from this growth reached very high valuations and then suffered sharp
corrections in April and May. The question is: Where do we go from
here? I believe that technology will continue to be a driving force of
global change. Stock picking and fundamental analysis will be crucial
and valuations probably will be important.
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 AND DO NOT NECESSARILY REPRESENT THE VIEWS OF FIDELITY OR
ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH VIEWS ARE
SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER CONDITIONS
AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE
VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE
INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS
FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY FIDELITY FUND.
(checkmark)FUND FACTS
GOAL: long-term growth of
capital by investing mainly in
equity securities of
companies with
medium-sized market
capitalizations
START DATE: February 20,
1996
SIZE: as of May 31, 2000,
more than $1.3 billion
MANAGER: David Felman, since
1999; joined Fidelity in
1993
DAVID FELMAN ON THE GROWTH
OF WIRELESS COMMUNICATIONS:
" In some parts of Europe, the
penetration of wireless
communications has reached 60% of
the population, exceeding even the
penetration of wire-based
communications. In the United
States, we still are only slightly
above 30% penetration. There is no
reason why wireless
communications will not exceed
60% penetration in the U.S., helping
both the service-providing
companies and the equipment
manufacturers. The main question
is the pace of the growth.
" I see two reasons why growth
may happen faster in the United
States than it did in Europe. First,
the second wave of growth tends
to be faster than the first wave,
and the U.S. is still in the first
wave. Secondly, the expansion of
data services over wireless phones
should accelerate growth in both
market penetration and usage.
Not only can we use wireless phones
to make telephone calls, but we
can use them to check stock
prices, buy books, check the
weather report, or get directions on
where to go. The risks are that
penetration will slow for some
unknown reasons or that the
economy will slow and consumers
will begin to see wireless phones
as luxuries. If the economy
weakens, and people don't have as
much money, they may not see the
need to spend more on wireless
phones."
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF MAY 31,
2000
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Nextel Communications, Inc. 2.9 2.4
Class A
Kopin Corp. 2.5 1.3
VERITAS Software Corp. 1.8 2.2
Altera Corp. 1.6 1.0
Sepracor, Inc. 1.1 0.9
Calpine Corp. 1.1 0.9
Apache Corp. 1.0 0.9
General Motors Corp. Class H 1.0 0.0
Dynegy, Inc. Class A 0.9 0.0
Pegasus Communications Corp. 0.9 0.0
14.8 9.6
TOP FIVE MARKET SECTORS AS OF
MAY 31, 2000
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Technology 33.0 33.4
Energy 13.8 9.9
Health 11.9 11.9
Utilities 9.5 10.8
Finance 6.9 9.7
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
ASSET ALLOCATION (% OF FUND'S
NET ASSETS)
AS OF MAY 31, 2000 * AS OF NOVEMBER 30, 1999 **
Stocks and Equity Futures 94.0% Stocks 97.9%
Short-Term Investments and Short-Term Investments and
Net Other Assets 6.0% Net Other Assets 2.1%
* FOREIGN INVESTMENTS 5.5% ** FOREIGN INVESTMENTS 6.0%
Row: 1, Col: 1, Value: 94.0 Row: 1, Col: 1, Value: 97.90000000000001
Row: 1, Col: 2, Value: 0.0 Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 0.0 Row: 1, Col: 3, Value: 0.0
Row: 1, Col: 4, Value: 0.0 Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: 0.0 Row: 1, Col: 5, Value: 0.0
Row: 1, Col: 6, Value: 0.0 Row: 1, Col: 6, Value: 0.0
Row: 1, Col: 7, Value: 0.0 Row: 1, Col: 7, Value: 0.0
Row: 1, Col: 8, Value: 6.0 Row: 1, Col: 8, Value: 2.1
</TABLE>
INVESTMENTS MAY 31, 2000 (UNAUDITED)
Showing Percentage of Net Assets
COMMON STOCKS - 91.0%
SHARES VALUE (NOTE 1)
BASIC INDUSTRIES - 1.6%
CHEMICALS & PLASTICS - 1.3%
Avery Dennison Corp. 73,900 $ 4,526,375
Dow Chemical Co. 14,300 1,530,994
Ivex Packaging Corp. (a) 94,600 851,400
Lyondell Chemical Co. 280,200 4,675,838
M.A. Hanna Co. 235,200 2,748,900
Sealed Air Corp. (a) 47,500 2,660,000
Union Carbide Corp. 24,700 1,350,781
18,344,288
PACKAGING & CONTAINERS - 0.2%
Bemis Co., Inc. 73,600 2,530,000
PAPER & FOREST PRODUCTS - 0.1%
Trex Co., Inc. 15,800 703,100
TOTAL BASIC INDUSTRIES 21,577,388
CONSTRUCTION & REAL ESTATE -
0.4%
ENGINEERING - 0.4%
Bouygues SA 2,900 1,804,769
Dycom Industries, Inc. (a) 33,300 1,612,969
Quanta Services, Inc. (a) 49,800 2,440,200
5,857,938
DURABLES - 2.0%
AUTOS, TIRES, & ACCESSORIES -
0.6%
Barrett Resources Corp. 94,400 3,734,700
SPX Corp. (a) 46,055 4,850,167
8,584,867
CONSUMER ELECTRONICS - 1.0%
General Motors Corp. Class H 138,700 13,653,281
(a)
TEXTILES & APPAREL - 0.4%
Jones Apparel Group, Inc. (a) 66,100 1,772,306
Liz Claiborne, Inc. 91,420 3,593,949
5,366,255
TOTAL DURABLES 27,604,403
ENERGY - 13.8%
ENERGY SERVICES - 7.8%
BJ Services Co. (a) 120,600 8,637,975
Cal Dive International, Inc. 64,200 2,957,213
(a)
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
ENERGY - CONTINUED
ENERGY SERVICES - CONTINUED
Coflexip SA sponsored ADR 41,400 $ 2,411,550
Diamond Offshore Drilling, 122,100 4,990,838
Inc.
ENSCO International, Inc. 272,300 9,513,481
Global Marine, Inc. 308,900 8,745,731
Grey Wolf, Inc. (a) 1,060,200 5,301,000
Halliburton Co. 138,800 7,078,800
Hanover Compressor Co. (a) 59,900 3,515,381
Helmerich & Payne, Inc. 130,100 4,846,225
Nabors Industries, Inc. (a) 199,300 8,569,900
Noble Drilling Corp. (a) 232,700 10,093,363
Pride International, Inc. (a) 89,600 2,279,200
R&B Falcon Corp. (a) 257,200 6,028,125
Smith International, Inc. (a) 55,800 4,411,688
Tidewater, Inc. 156,900 6,099,488
Transocean Sedco Forex, Inc. 90,300 4,441,631
Varco International, Inc. (a) 166,796 3,627,818
Weatherford International, 100,900 4,345,006
Inc.
107,894,413
OIL & GAS - 6.0%
Anadarko Petroleum Corp. 110,300 5,852,794
Apache Corp. 225,000 13,696,875
Burlington Resources, Inc. 118,200 5,407,650
Cooper Cameron Corp. (a) 88,500 6,172,875
Devon Energy Corp. 97,700 5,843,681
EOG Resources, Inc. 73,400 2,385,500
Grant Prideco, Inc. (a) 91,000 2,115,750
Kerr-McGee Corp. 46,627 2,783,049
Murphy Oil Corp. 14,200 921,225
Noble Affiliates, Inc. 72,500 2,850,156
Nuevo Energy Co. (a) 58,820 1,135,961
Ocean Energy, Inc. (a) 259,400 3,891,000
Santa Fe Snyder Corp. (a) 721,535 9,109,379
Tosco Corp. 114,600 3,509,625
USX - Marathon Group 48,900 1,329,469
Valero Energy Corp. 99,300 2,904,525
Vastar Resources, Inc. 127,000 10,342,563
Veritas DGC, Inc. (a) 122,600 3,386,825
83,638,902
TOTAL ENERGY 191,533,315
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
FINANCE - 6.9%
BANKS - 1.0%
Bank of New York Co., Inc. 76,600 $ 3,595,413
Bank One Corp. 309,100 10,219,619
PNC Financial Services Group, 4,600 231,725
Inc.
14,046,757
CREDIT & OTHER FINANCE - 0.6%
Concord EFS, Inc. (a) 93,800 2,274,650
Household International, Inc. 123,100 5,785,700
8,060,350
FEDERAL SPONSORED CREDIT - 0.9%
Freddie Mac 263,800 11,739,100
INSURANCE - 4.2%
Ace Ltd. 121,100 3,246,994
AFLAC, Inc. 48,400 2,501,675
Allmerica Financial Corp. 72,300 4,170,806
AMBAC Financial Group, Inc. 120,600 6,075,225
American General Corp. 27,500 1,761,719
CIGNA Corp. 128,750 11,434,609
Hartford Financial Services 33,700 1,992,513
Group, Inc.
Hartford Life, Inc. Class A 33,700 1,691,319
Jefferson-Pilot Corp. 21,100 1,447,988
MBIA, Inc. 32,100 1,855,781
MetLife, Inc. 357,100 7,320,550
Protective Life Corp. 130,100 3,577,750
Reliastar Financial Corp. 116,575 6,003,613
The Chubb Corp. 27,800 1,946,000
XL Capital Ltd. Class A 55,700 3,314,150
58,340,692
SAVINGS & LOANS - 0.2%
Golden West Financial Corp. 70,500 2,943,375
TOTAL FINANCE 95,130,274
HEALTH - 11.9%
DRUGS & PHARMACEUTICALS - 9.6%
Abgenix, Inc. (a) 32,200 2,543,800
Alkermes, Inc. (a) 26,200 959,575
Allergan, Inc. 41,400 2,843,663
Aviron (a) 176,300 4,264,256
Bristol-Myers Squibb Co. 106,400 5,858,650
Celgene Corp. (a) 182,400 6,703,200
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
HEALTH - CONTINUED
DRUGS & PHARMACEUTICALS -
CONTINUED
Cephalon, Inc. (a) 227,600 $ 11,778,300
Chiron Corp. (a) 4,400 166,925
COR Therapeutics, Inc. (a) 136,700 8,663,363
Corixa Corp. (a) 50,500 1,609,688
CV Therapeutics, Inc. (a) 37,825 1,569,738
Elan Corp. PLC sponsored ADR 100,100 3,985,231
(a)
Eli Lilly & Co. 38,913 2,962,252
Forest Laboratories, Inc. (a) 51,000 4,513,500
Gene Logic, Inc. (a) 135,800 2,868,775
Genentech, Inc. 17,000 1,825,375
Gilead Sciences, Inc. (a) 35,390 1,935,391
Human Genome Sciences, Inc. 3,500 307,125
(a)
ImClone Systems, Inc. (a) 68,200 4,816,625
Immunex Corp. (a) 46,500 1,203,188
Medimmune, Inc. (a) 12,990 2,018,321
Millennium Pharmaceuticals, 67,932 5,680,814
Inc. (a)
Mylan Laboratories, Inc. 62,900 1,686,506
Myriad Genetics, Inc. (a) 54,850 4,326,294
PE Corp. - Celera Genomics 70,500 3,921,563
Group (a)
Protein Design Labs, Inc. (a) 71,000 7,570,375
QLT, Inc. (a) 180,130 8,847,013
Schering-Plough Corp. 49,400 2,389,725
Sepracor, Inc. (a) 156,500 14,965,313
SuperGen, Inc. (a) 53,900 1,273,388
Teva Pharmaceutical 97,800 5,268,975
Industries Ltd. ADR
Titan Pharmaceuticals, Inc. 56,800 1,441,300
(a)
United Therapeutics Corp. 53,200 3,404,800
134,173,007
MEDICAL EQUIPMENT & SUPPLIES
- 0.7%
Millipore Corp. 43,600 3,155,550
MiniMed, Inc. (a) 14,800 1,768,600
Novoste Corp. (a) 48,500 1,833,906
Sybron International, Inc. (a) 79,600 2,522,325
9,280,381
MEDICAL FACILITIES MANAGEMENT
- 1.6%
Laboratory Corp. of America 18,800 1,351,250
Holdings
Quest Diagnostics, Inc. (a) 121,500 8,125,313
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
HEALTH - CONTINUED
MEDICAL FACILITIES MANAGEMENT
- CONTINUED
Trigon Healthcare, Inc. (a) 213,820 $ 10,691,000
Wellpoint Health Networks, 25,500 1,851,938
Inc. (a)
22,019,501
TOTAL HEALTH 165,472,889
INDUSTRIAL MACHINERY &
EQUIPMENT - 2.3%
ELECTRICAL EQUIPMENT - 1.6%
Adaptive Broadband Corp. (a) 142,840 3,785,260
American Power Conversion 39,300 1,392,694
Corp. (a)
ANTEC Corp. (a) 28,200 1,417,050
California Amplifier, Inc. (a) 9,300 210,413
Emerson Electric Co. 26,300 1,551,700
Harris Corp. 34,100 1,042,181
Pace Micro Technology PLC 436,366 5,972,273
Powerwave Technologies, Inc. 35,700 1,934,494
(a)
Scientific-Atlanta, Inc. 25,400 1,431,925
Vyyo, Inc. 203,600 3,003,100
21,741,090
INDUSTRIAL MACHINERY &
EQUIPMENT - 0.7%
Asyst Technologies, Inc. (a) 137,300 5,543,488
Ingersoll-Rand Co. 56,000 2,551,500
Varian Semiconductor 46,700 2,227,006
Equipment Associates, Inc.
(a)
10,321,994
TOTAL INDUSTRIAL MACHINERY & 32,063,084
EQUIPMENT
MEDIA & LEISURE - 2.9%
BROADCASTING - 2.2%
EchoStar Communications Corp. 149,000 5,950,688
Class A (a)
Pegasus Communications Corp. 307,200 12,595,200
(a)
Radio One, Inc. Class A 38,800 2,774,200
UnitedGlobalCom, Inc. Class A 28,300 1,358,400
(a)
Univision Communications, 42,500 4,377,500
Inc. Class A (a)
Westwood One, Inc. (a) 116,160 3,855,060
30,911,048
ENTERTAINMENT - 0.6%
Mandalay Resort Group (a) 101,000 2,139,938
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
MEDIA & LEISURE - CONTINUED
ENTERTAINMENT - CONTINUED
MGM Grand, Inc. 164,800 $ 5,356,000
Park Place Entertainment 46,200 583,275
Corp. (a)
8,079,213
PUBLISHING - 0.0%
Reader's Digest Association, 9,700 328,588
Inc. Class A (non-vtg.)
RESTAURANTS - 0.1%
Jack in the Box, Inc. (a) 25,900 642,644
TOTAL MEDIA & LEISURE 39,961,493
NONDURABLES - 1.6%
AGRICULTURE - 0.2%
Nutreco Holding NV 64,932 2,534,716
BEVERAGES - 0.2%
Seagram Co. Ltd. 75,700 3,540,929
FOODS - 0.8%
Keebler Foods Co. 113,900 4,128,875
Nabisco Group Holdings Corp. 227,600 4,964,525
Quaker Oats Co. 35,900 2,640,894
11,734,294
HOUSEHOLD PRODUCTS - 0.4%
Avon Products, Inc. 121,900 5,035,994
TOTAL NONDURABLES 22,845,933
PRECIOUS METALS - 0.4%
Agnico-Eagle Mines Ltd. 94,200 497,280
Newmont Mining Corp. 13,400 309,038
Stillwater Mining Co. (a) 178,200 5,000,738
5,807,056
RETAIL & WHOLESALE - 0.9%
APPAREL STORES - 0.3%
AnnTaylor Stores Corp. (a) 144,100 3,746,600
GENERAL MERCHANDISE STORES -
0.3%
Consolidated Stores Corp. (a) 25,200 327,600
Costco Wholesale Corp. (a) 74,900 2,392,119
Dollar Tree Stores, Inc. (a) 26,700 1,588,650
4,308,369
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
RETAIL & WHOLESALE - CONTINUED
RETAIL & WHOLESALE,
MISCELLANEOUS - 0.3%
Best Buy Co., Inc. (a) 20,600 $ 1,318,400
Circuit City Stores, Inc. - 30,600 1,524,263
Circuit City Group
Tiffany & Co., Inc. 14,500 883,594
Ventro Corp. 39,100 703,800
4,430,057
TOTAL RETAIL & WHOLESALE 12,485,026
SERVICES - 2.4%
ADVERTISING - 0.6%
DoubleClick, Inc. (a) 103,460 4,371,185
TMP Worldwide, Inc. (a) 82,000 4,530,500
8,901,685
PRINTING - 0.0%
Valassis Communications, Inc. 13,200 435,600
(a)
SERVICES - 1.8%
ACNielsen Corp. (a) 193,800 4,299,938
Cintas Corp. 96,100 4,228,400
Convergys Corp. (a) 50,000 2,246,875
Ecolab, Inc. 143,600 5,492,700
Per-Se Technologies, Inc. (a) 958 6,227
Per-Se Technologies, Inc. 1,287 0
warrants 7/8/03 (a)
Profit Recovery Group 106,700 1,933,938
International, Inc. (a)
Robert Half International, 58,400 3,467,500
Inc. (a)
True North Communications 60,900 2,660,569
24,336,147
TOTAL SERVICES 33,673,432
TECHNOLOGY - 33.0%
COMMUNICATIONS EQUIPMENT - 3.6%
ADC Telecommunications, Inc. 23,000 1,545,313
(a)
Advanced Fibre 17,300 795,800
Communications, Inc. (a)
Andrew Corp. (a) 121,000 4,250,125
Ciena Corp. (a) 23,400 2,800,688
Cisco Systems, Inc. (a) 63,700 3,626,919
Comverse Technology, Inc. (a) 72,710 6,643,876
Corning, Inc. 29,910 5,785,716
Ditech Communications Corp. 9,100 746,200
Efficient Networks, Inc. 52,100 2,526,850
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TECHNOLOGY - CONTINUED
COMMUNICATIONS EQUIPMENT -
CONTINUED
InterVoice-Brite, Inc. (a) 34,300 $ 488,775
Jabil Circuit, Inc. (a) 144,100 5,259,650
Metricom, Inc. (a) 73,500 1,635,375
Natural MicroSystems Corp. (a) 123,900 7,976,063
Nokia AB sponsored ADR 13,600 707,200
Oni Systems Corp. 700 17,500
Tekelec (a) 43,800 1,445,400
Terayon Communication 8,400 466,200
Systems, Inc. (a)
Turnstone Systems, Inc. 12,300 1,081,823
Tut Systems, Inc. (a) 4,400 227,700
Westell Technologies, Inc. 58,400 959,950
Class A (a)
Xircom, Inc. (a) 17,300 713,625
49,700,748
COMPUTER SERVICES & SOFTWARE
- 8.7%
Active Software, Inc. 36,100 1,295,088
Adobe Systems, Inc. 71,300 8,025,706
Affiliated Computer Services, 36,000 1,226,250
Inc. Class A (a)
Affymetrix, Inc. (a) 21,500 2,553,125
Amazon.com, Inc. (a) 14,000 676,375
Amdocs Ltd. (a) 65,900 4,081,681
Ariba, Inc. 33,000 1,720,125
Art Technology Group, Inc. 83,800 4,918,013
Autodesk, Inc. 65,700 2,443,219
Be Free, Inc. 83,700 774,225
BEA Systems, Inc. (a) 154,900 5,595,763
BroadVision, Inc. (a) 28,100 1,006,331
Business Objects SA sponsored 7,600 608,000
ADR (a)
CACI International, Inc. 75,000 1,481,250
Class A (a)
Cadence Design Systems, Inc. 71,900 1,150,400
(a)
Check Point Software 12,100 2,273,288
Technologies Ltd. (a)
Citrix Systems, Inc. (a) 23,500 1,236,688
Clarent Corp. 16,500 699,188
CNET Networks, Inc. (a) 99,000 3,409,313
Computer Sciences Corp. (a) 16,500 1,582,969
Covad Communications Group, 171,100 4,042,238
Inc. (a)
Digital Insight Corp. 21,800 836,575
Electronic Arts, Inc. (a) 16,500 1,053,938
Exchange Applications, Inc. 130,040 1,788,050
(a)
Foundry Networks, Inc. 37,000 2,333,313
Interact Commerce Corp. 59,660 894,900
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TECHNOLOGY - CONTINUED
COMPUTER SERVICES & SOFTWARE
- CONTINUED
Internap Network Services 17,100 $ 489,488
Corp.
Intuit, Inc. (a) 43,580 1,579,775
Keynote Systems, Inc. 41,200 1,434,275
Macromedia, Inc. (a) 4,700 373,283
Marketwatch.com, Inc. (a) 2,600 54,600
Mercury Interactive Corp. (a) 58,200 4,932,450
Metasolv Software, Inc. 56,200 2,219,900
Micromuse, Inc. (a) 14,600 1,453,613
National Computer Systems, 40,500 1,840,219
Inc.
New Era of Networks, Inc. (a) 14,400 307,800
Opus360 Corp. 745 3,678
Orbotech Ltd. 24,400 2,061,800
Pharmacopeia, Inc. (a) 21,500 467,625
Phone.com, Inc. 9,000 629,438
Polycom, Inc. (a) 57,900 4,867,219
Priceline.com, Inc. (a) 8,000 305,000
Puma Technology, Inc. (a) 22,000 484,000
Rational Software Corp. (a) 70,700 5,183,194
Redback Networks, Inc. 31,700 2,658,838
Software.com, Inc. 11,800 994,150
VERITAS Software Corp. (a) 216,700 25,245,550
Vignette Corp. (a) 85,300 2,351,081
Vitria Technology, Inc. 38,200 1,337,000
webMethods, Inc. 26,100 2,182,613
121,162,600
COMPUTERS & OFFICE EQUIPMENT
- 3.2%
Apple Computer, Inc. (a) 60 5,040
Brocade Communications 28,600 3,373,013
Systems, Inc.
CDW Computer Centers, Inc. (a) 65,400 7,650,778
Comdisco, Inc. 30,400 779,000
Copper Mountain Networks, 19,600 1,637,825
Inc.
Fujitsu Support & Service, 3,100 290,212
Inc. (FSAS)
Ingram Micro, Inc. Class A (a) 68,100 1,149,188
Juniper Networks, Inc. 39,800 6,972,463
MMC Networks, Inc. (a) 44,800 1,461,600
MRV Communications, Inc. (a) 31,600 841,350
Network Appliance, Inc. (a) 137,700 8,890,256
SanDisk Corp. (a) 16,600 964,875
ScanSource, Inc. (a) 41,400 1,138,500
SCI Systems, Inc. (a) 73,800 3,321,000
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TECHNOLOGY - CONTINUED
COMPUTERS & OFFICE EQUIPMENT
- CONTINUED
SCM Microsystems, Inc. (a) 14,500 $ 998,688
Symbol Technologies, Inc. 50,550 2,227,359
Tech Data Corp. (a) 66,900 2,512,931
44,214,078
ELECTRONIC INSTRUMENTS - 3.5%
Aclara Biosciences, Inc. 32,100 846,638
Agilent Technologies, Inc. 15,300 1,126,463
Aurora Biosciences Corp. (a) 103,100 4,890,806
FEI Co. (a) 147,400 2,653,200
KLA-Tencor Corp. (a) 64,180 3,180,921
Kulicke & Soffa Industries, 60,400 3,038,875
Inc. (a)
Novellus Systems, Inc. (a) 101,600 4,895,850
PE Corp. - Biosystems Group 75,500 4,190,250
PerkinElmer, Inc. 179,200 9,408,000
Photon Dynamics, Inc. (a) 79,500 4,794,844
Tektronix, Inc. 57,400 3,070,900
Waters Corp. (a) 74,300 7,021,350
49,118,097
ELECTRONICS - 14.0%
Advanced Micro Devices, Inc. 98,800 8,046,025
(a)
Altera Corp. (a) 251,000 21,554,625
Analog Devices, Inc. (a) 77,600 5,975,200
Arrow Electronics, Inc. (a) 50,800 1,781,175
Atmel Corp. (a) 120,600 4,605,413
Broadcom Corp. Class A (a) 6,700 871,419
Burr-Brown Corp. (a) 14,400 819,900
Celestica, Inc. (sub. vtg.) 41,300 1,926,321
(a)
Chartered Semiconductor 21,600 1,733,400
Manufacturing Ltd. ADR
Cree, Inc. (a) 12,700 1,542,852
Cypress Semiconductor Corp. 156,300 6,574,369
(a)
E Tek Dynamics, Inc. (a) 15,600 2,867,475
Flextronics International 52,500 2,857,969
Ltd. (a)
GlobeSpan, Inc. 53,800 4,754,575
Hadco Corp. (a) 26,600 2,347,450
Infineon Technologies AG (a) 38,900 2,506,558
KEMET Corp. (a) 72,500 4,871,094
Kopin Corp. (a) 482,300 34,213,156
Lattice Semiconductor Corp. 69,600 4,128,150
(a)
LSI Logic Corp. (a) 52,600 2,771,363
Methode Electronics, Inc. 42,300 1,517,513
Class A
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TECHNOLOGY - CONTINUED
ELECTRONICS - CONTINUED
Microchip Technology, Inc. (a) 87,500 $ 4,966,992
Micron Technology, Inc. (a) 124,300 8,693,231
National Semiconductor Corp. 205,100 11,024,125
(a)
NVIDIA Corp. (a) 22,900 2,613,463
PMC-Sierra, Inc. (a) 30,800 4,720,100
Power-One, Inc. (a) 18,400 1,612,300
QLogic Corp. (a) 53,320 2,619,345
RF Micro Devices, Inc. (a) 12,300 1,291,500
S3, Inc. (a) 546,000 8,736,000
Sanmina Corp. (a) 85,100 5,414,488
SDL, Inc. (a) 29,900 6,774,219
Three-Five Systems, Inc. (a) 59,300 3,721,075
Vishay Intertechnology, Inc. 86,500 6,119,875
(a)
Vitesse Semiconductor Corp. 140,400 7,107,750
(a)
Xilinx, Inc. (a) 18,200 1,385,475
195,065,940
TOTAL TECHNOLOGY 459,261,463
TRANSPORTATION - 1.4%
AIR TRANSPORTATION - 0.5%
Alaska Air Group, Inc. (a) 12,830 399,334
Continental Airlines, Inc. 63,900 2,799,619
Class B (a)
Northwest Airlines Corp. 9,400 267,313
Class A (a)
SkyWest, Inc. 32,000 1,220,000
Southwest Airlines Co. 80,500 1,544,594
6,230,860
SHIPPING - 0.6%
Teekay Shipping Corp. 246,400 8,223,600
TRUCKING & FREIGHT - 0.3%
Forward Air Corp. (a) 64,950 2,070,281
Landstar System, Inc. (a) 49,400 2,630,550
4,700,831
TOTAL TRANSPORTATION 19,155,291
UTILITIES - 9.5%
CELLULAR - 4.5%
China Telecom (Hong Kong) 7,600 1,117,200
Ltd. sponsored ADR (a)
Clearnet Communications, Inc. 77,900 2,238,356
Class A (non-vtg.) (a)
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
UTILITIES - CONTINUED
CELLULAR - CONTINUED
Microcell Telecommunications, 149,700 $ 5,496,836
Inc. Class B (non-vtg.) (a)
Millicom International 12,600 535,500
Cellular SA (a)
Nextel Communications, Inc. 437,900 40,560,456
Class A (a)
Nextel Partners, Inc. Class A 41,700 708,900
Sprint Corp. - PCS Group 184,500 10,239,750
Series 1 (a)
VoiceStream Wireless Corp. (a) 15,200 1,740,400
62,637,398
ELECTRIC UTILITY - 2.6%
AES Corp. (a) 76,100 6,639,725
Calpine Corp. (a) 140,960 14,932,950
Constellation Energy Corp. 47,200 1,619,550
Independent Energy Holdings 55,000 1,230,625
PLC sponsored ADR (a)
IPALCO Enterprises, Inc. 89,400 1,776,825
Montana Power Co. 64,600 2,442,688
NiSource, Inc. 208,700 3,769,644
Northern States Power Co. 89,200 1,973,550
NRG Energy, Inc. 35,100 583,538
PECO Energy Co. 36,300 1,594,931
36,564,026
GAS - 1.8%
Columbia Energy Group 3,100 200,531
Dynegy, Inc. Class A 167,947 12,952,912
Enron Corp. 64,900 4,729,588
Kinder Morgan, Inc. 225,300 7,350,413
25,233,444
TELEPHONE SERVICES - 0.6%
Allegiance Telecom, Inc. (a) 13,050 690,019
CenturyTel, Inc. 125,800 3,396,600
Intermedia Communications, 15,600 390,000
Inc. (a)
ITXC Corp. 97,200 3,256,200
TeraBeam Networks (c) 1,100 16,500
WinStar Communications, Inc. 1 14
(a)
7,749,333
TOTAL UTILITIES 132,184,201
TOTAL COMMON STOCKS 1,264,613,186
(Cost $1,087,654,234)
U.S. TREASURY OBLIGATIONS -
0.2%
MOODY'S RATINGS (UNAUDITED) PRINCIPAL AMOUNT VALUE (NOTE 1)
U.S. Treasury Bills, yield at - $ 3,750,000 $ 3,719,861
date of purchase 5.62% to
6.03% 7/13/00 to 8/10/00
(Cost $3,716,026) (d)
CASH EQUIVALENTS - 12.0%
SHARES
Central Cash Collateral Fund, 29,880,950 29,880,950
6.54% (b)
Taxable Central Cash Fund, 136,703,934 136,703,934
6.37% (b)
TOTAL CASH EQUIVALENTS 166,584,884
(Cost $166,584,884)
TOTAL INVESTMENT PORTFOLIO - 1,434,917,931
103.2%
(Cost $1,257,955,144)
NET OTHER ASSETS - (3.2)% (44,783,785)
NET ASSETS - 100% $ 1,390,134,146
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FUTURES CONTRACTS
EXPIRATION DATE UNDERLYING FACE AMOUNT AT VALUE UNREALIZED GAIN/LOSS
PURCHASED
172 S&P 400 Midcap Index June 2000 $ 41,090,800 $ (612,651)
Contracts
THE FACE VALUE OF FUTURES PURCHASED AS A PERCENTAGE OF NET ASSETS - 3.0%
</TABLE>
LEGEND
(a) Non-income producing
(b) The rate quoted is the annualized seven-day yield of the fund at
period end.
(c) Restricted securities - Investment in securities not registered
under the Securities Act of 1933.
Additional information on each holding is as follows:
SECURITY ACQUISITION DATE ACQUISITION COST
TeraBeam Networks 4/7/00 $ 16,500
(d) Security or a portion of the security was pledged to cover margin
requirements for futures contracts. At the period end, the value of
securities pledged amounted to $3,670,150.
INCOME TAX INFORMATION
At May 31, 2000, the aggregate cost of investment securities for
income tax purposes was $1,274,576,682. Net unrealized appreciation
aggregated $160,341,249, of which $277,359,631 related to appreciated
investment securities and $117,018,382 related to depreciated
investment securities.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 2000 (UNAUDITED)
ASSETS
Investment in securities, at $ 1,434,917,931
value (cost $1,257,955,144)
- See accompanying schedule
Receivable for investments 7,398,874
sold
Receivable for fund shares 4,764,847
sold
Dividends receivable 474,708
Interest receivable 655,669
Receivable for daily 77,400
variation on futures
contracts
Other receivables 135,706
TOTAL ASSETS 1,448,425,135
LIABILITIES
Payable for investments $ 21,854,945
purchased
Payable for fund shares 4,855,491
redeemed
Accrued management fee 660,743
Distribution fees payable 675,024
Other payables and accrued 363,836
expenses
Collateral on securities 29,880,950
loaned, at value
TOTAL LIABILITIES 58,290,989
NET ASSETS $ 1,390,134,146
Net Assets consist of:
Paid in capital $ 1,113,946,820
Accumulated net investment (4,588,853)
(loss)
Accumulated undistributed net 104,425,980
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 176,350,199
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS $ 1,390,134,146
STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
MAY 31, 2000 (UNAUDITED)
CALCULATION OF MAXIMUM $20.05
OFFERING PRICE CLASS A: NET
ASSET VALUE, offering price
and redemption price per
share ($73,867,647 (divided
by) 3,684,480 shares)
Maximum offering price per $21.27
share (100/94.25 of $20.05)
CLASS T: NET ASSET VALUE and $20.19
redemption price per share
($900,042,641 (divided by)
44,571,993 shares)
Maximum offering price per $20.92
share (100/96.50 of $20.19)
CLASS B: NET ASSET VALUE and $19.86
offering price per share
($255,013,489 (divided by)
12,843,160 shares) A
CLASS C: NET ASSET VALUE and $19.87
redemption price per share
($97,125,408 (divided by)
4,887,314 shares) A
INSTITUTIONAL CLASS: NET $20.26
ASSET VALUE, offering price
and redemption price per
share ($64,084,961 (divided
by) 3,163,418 shares)
REDEMPTION PRICE PER SHARE IS EQUAL TO THE NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31,
2000 (UNAUDITED)
INVESTMENT INCOME $ 1,569,052
Dividends
Interest 1,966,136
Security lending 135,515
TOTAL INCOME 3,670,703
EXPENSES
Management fee $ 3,364,392
Transfer agent fees 1,297,134
Distribution fees 3,384,043
Accounting and security 151,301
lending fees
Non-interested trustees' 1,616
compensation
Custodian fees and expenses 50,725
Registration fees 286,862
Audit 19,926
Legal 5,853
Miscellaneous 4,630
Total expenses before 8,566,482
reductions
Expense reductions (306,926) 8,259,556
NET INVESTMENT INCOME (LOSS) (4,588,853)
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 107,108,271
Foreign currency transactions (8,917)
Futures contracts 112,394 107,211,748
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 55,319,904
Assets and liabilities in 21,625
foreign currencies
Futures contracts (612,651) 54,728,878
NET GAIN (LOSS) 161,940,626
NET INCREASE (DECREASE) IN $ 157,351,773
NET ASSETS RESULTING FROM
OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED MAY 31, 2000 YEAR ENDED NOVEMBER 30, 1999
(UNAUDITED)
INCREASE (DECREASE) IN NET
ASSETS
Operations Net investment $ (4,588,853) $ (3,635,978)
income (loss)
Net realized gain (loss) 107,211,748 86,552,330
Change in net unrealized 54,728,878 67,199,657
appreciation (depreciation)
NET INCREASE (DECREASE) IN 157,351,773 150,116,009
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (59,325,494) (15,537,241)
from net realized gains
Share transactions - net 558,861,518 90,831,221
increase (decrease)
TOTAL INCREASE (DECREASE) 656,887,797 225,409,989
IN NET ASSETS
NET ASSETS
Beginning of period 733,246,349 507,836,360
End of period (including $ 1,390,134,146 $ 733,246,349
accumulated net investment
loss of $4,588,853 and $0,
respectively)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS A
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 1996 E
SELECTED PER-SHARE DATA
Net asset value, beginning $ 17.12 $ 13.71 $ 14.04 $ 11.70 $ 10.74
of period
Income from Investment
Operations
Net investment income (loss) (.05) (.05) (.05) (.09) (.01)
D
Net realized and unrealized 4.38 3.92 1.17 2.64 .97
gain (loss)
Total from investment 4.33 3.87 1.12 2.55 .96
operations
Less Distributions
From net realized gain (1.40) (.46) (1.45) (.21) -
Net asset value, end of $ 20.05 $ 17.12 $ 13.71 $ 14.04 $ 11.70
period
TOTAL RETURN B, C 26.88% 29.17% 9.07% 22.24% 8.94%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 73,868 $ 25,834 $ 11,340 $ 4,670 $ 1,239
(000 omitted)
Ratio of expenses to average 1.18% A 1.17% 1.30% 1.62% F 1.56% A, F
net assets
Ratio of expenses to average 1.13% A, G 1.16% G 1.27% G 1.58% G 1.56% A
net assets after expense
reductions
Ratio of net investment (.50)% A (.33)% (.36)% (.71)% (.33)% A
income (loss) to average
net assets
Portfolio turnover rate 242% A 163% 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.
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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS T
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 1996 E
SELECTED PER-SHARE DATA
Net asset value, beginning $ 17.19 $ 13.75 $ 14.09 $ 11.70 $ 10.00
of period
Income from Investment
Operations
Net investment income (loss) (.07) (.08) (.07) (.07) (.03)
D
Net realized and unrealized 4.42 3.94 1.17 2.64 1.73
gain (loss)
Total from investment 4.35 3.86 1.10 2.57 1.70
operations
Less Distributions
From net realized gain (1.35) (.42) (1.44) (.18) -
Net asset value, end of $ 20.19 $ 17.19 $ 13.75 $ 14.09 $ 11.70
period
TOTAL RETURN B, C 26.82% 28.93% 8.87% 22.35% 17.00%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 900,043 $ 504,586 $ 367,035 $ 326,642 $ 187,040
(000 omitted)
Ratio of expenses to average 1.38% A 1.39% 1.42% 1.48% 1.60% A
net assets
Ratio of expenses to average 1.33% A, F 1.37% F 1.39% F 1.44% F 1.60% A
net assets after expense
reductions
Ratio of net investment (.70)% A (.55)% (.51)% (.53)% (.37)% A
income (loss) to average
net assets
Portfolio turnover rate 242% A 163% 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.
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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS B
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 1996 E
SELECTED PER-SHARE DATA
Net asset value, beginning $ 16.93 $ 13.58 $ 13.94 $ 11.61 $ 10.00
of period
Income from Investment
Operations
Net investment income (loss) (.12) (.16) (.14) (.14) (.10)
D
Net realized and unrealized 4.35 3.90 1.17 2.62 1.71
gain (loss)
Total from investment 4.23 3.74 1.03 2.48 1.61
operations
Less Distributions
From net realized gain (1.30) (.39) (1.39) (.15) -
Net asset value, end of $ 19.86 $ 16.93 $ 13.58 $ 13.94 $ 11.61
period
TOTAL RETURN B, C 26.44% 28.32% 8.38% 21.67% 16.10%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 255,013 $ 117,224 $ 82,317 $ 58,758 $ 32,727
(000 omitted)
Ratio of expenses to average 1.92% A 1.91% 1.94% 2.03% 2.38% A
net assets
Ratio of expenses to average 1.87% A, F 1.89% F 1.91% F 1.98% F 2.37% A, F
net assets after expense
reductions
Ratio of net investment (1.24)% A (1.07)% (1.02)% (1.08)% (1.14)% A
income (loss) to average
net assets
Portfolio turnover rate 242% A 163% 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.
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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS C
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 16.97 $ 13.64 $ 14.08 $ 14.16
period
Income from Investment
Operations
Net investment income (loss) D (.12) (.16) (.15) (.01)
Net realized and unrealized 4.35 3.90 1.15 (.07)
gain (loss)
Total from investment 4.23 3.74 1.00 (.08)
operations
Less Distributions
From net realized gain (1.33) (.41) (1.44) -
Net asset value, end of period $ 19.87 $ 16.97 $ 13.64 $ 14.08
TOTAL RETURN B, C 26.41% 28.24% 8.09% (.56)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 97,125 $ 36,592 $ 12,593 $ 345
(000 omitted)
Ratio of expenses to average 1.91% A 1.91% 2.15% F 2.50% A, F
net assets
Ratio of expenses to average 1.86% A, G 1.90% G 2.11% G 2.40% A, G
net assets after expense
reductions
Ratio of net investment (1.23)% A (1.07)% (1.16)% (1.07)% A
income (loss) to average net
assets
Portfolio turnover rate 242% A 163% 139% 208%
</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 (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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 1996 E
SELECTED PER-SHARE DATA
Net asset value, beginning $ 17.28 $ 13.82 $ 14.12 $ 11.70 $ 10.00
of period
Income from Investment
Operations
Net investment income (loss) (.02) (.00) .01 .01 (.02)
D
Net realized and unrealized 4.43 3.95 1.18 2.63 1.72
gain (loss)
Total from investment 4.41 3.95 1.19 2.64 1.70
operations
Less Distributions
From net realized gain (1.43) (.49) (1.49) (.22) -
Net asset value, end of $ 20.26 $ 17.28 $ 13.82 $ 14.12 $ 11.70
period
TOTAL RETURN B, C 27.14% 29.59% 9.60% 23.04% 17.00%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 64,085 $ 49,010 $ 34,551 $ 30,542 $ 3,600
(000 omitted)
Ratio of expenses to average .86% A .86% .87% .91% 1.50% A, F
net assets
Ratio of expenses to average .80% A, G .84% G .84% G .84% G 1.50% A
net assets after expense
reductions
Ratio of net investment (.17)% A (.02)% .04% .08% (.27)% A
income (loss) to average
net assets
Portfolio turnover rate 242% A 163% 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.
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.
NOTES TO FINANCIAL STATEMENTS
For the period ended May 31, 2000 (Unaudited)
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. 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. Foreign securities are valued based
on quotations from the principal market in which such securities are
normally traded. If trading or events occurring in other markets after
the close of the principal market in which foreign securities are
traded, and before the close of the business of the fund, are expected
to materially affect the value of those securities, then they are
valued at their fair value taking this trading or these events into
account. Fair value is determined in good faith under consistently
applied procedures under the general supervision of the Board of
Trustees. 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. 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.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
FOREIGN CURRENCY TRANSLATION - CONTINUED
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.
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,
non-taxable dividends, net operating loss 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 net investment loss and accumulated undistributed net
realized gain (loss) on investments and foreign currency transactions
may include temporary book and tax basis differences that will reverse
in a subsequent period. Any taxable income or gain remaining at fiscal
year end is distributed in the following year.
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 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, Federal Agency,
or other obligations found to be satisfactory by FMR 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.
CENTRAL CASH FUNDS. Pursuant to an Exemptive Order issued by the SEC,
the fund may invest in the Taxable Central Cash Fund and the Central
Cash Collateral Fund (the Cash Funds) managed by Fidelity Investments
Money Management, Inc., an affiliate of FMR. The Cash Funds are
open-end money market funds available only to investment companies and
other accounts managed by FMR and its affiliates. The Cash Funds seek
preservation of capital, liquidity, and current income. Income
distributions from the Cash Funds are declared daily and paid monthly
from net interest income. Income distributions earned by the fund are
recorded as either interest income or security lending income in the
accompanying financial statements.
FUTURES CONTRACTS. The fund may use futures contracts to manage its
exposure to the stock market. 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. Futures contracts involve, to varying
degrees, risk of loss in excess of the futures variation margin
reflected in the Statement of Assets and Liabilities. The underlying
face amount at value of any open futures contracts at period end is
shown in the schedule of investments under the caption "Futures
Contracts." This amount reflects each contract's exposure to the
underlying instrument at period end. 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.
2. OPERATING POLICIES - CONTINUED
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, restricted securities (excluding 144A
issues) amounted to $16,500 or 0.0% of net assets.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $1,712,225,723 and $1,327,869,137, respectively.
The market value of futures contracts opened and closed during the
period amounted to $58,241,646 and $16,650,589, 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 .2167% 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 annualized rate of .58% of average net
assets.
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the
1940 Act, the Board of Trustees have adopted separate Distribution and
Service 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.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
DISTRIBUTION AND SERVICE PLAN - CONTINUED
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 $ 66,375 $ 45
CLASS T 1,947,030 7,685
CLASS B 996,744 747,708
CLASS C 373,894 217,012
$ 3,384,043 $ 972,450
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 is 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 $ 289,200 $ 123,103
CLASS T 540,194 189,203
CLASS B 140,636 140,636 *
CLASS C 16,999 16,999 *
$ 987,029 $ 469,941
* 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 (collectively referred to
as the transfer 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 $ 69,629 .26
CLASS T 830,526 .21
CLASS B 249,351 .25
CLASS C 88,667 .24
INSTITUTIONAL CLASS 58,961 .19
$ 1,297,134
* ANNUALIZED
ACCOUNTING AND SECURITY LENDING FEES. Fidelity Service Company, Inc.
maintains the fund's accounting records and administers the security
lending program. The security lending fee is based on the number and
duration of lending transactions. The accounting fee is based on the
level of average net assets for the month plus out-of-pocket expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $32,131 for the
period.
5. SECURITY LENDING.
The fund lends portfolio securities from time to time in order to earn
additional income. The fund receives collateral in the form of U.S.
Treasury obligations, letters of credit, and/or cash against the
loaned securities, and maintains collateral in an amount not less than
100% of the market value of the loaned securities during the period of
the loan. The market value of the loaned securities is determined at
the close of business of the fund and any additional required
collateral is delivered to the fund on the next business day. If the
borrower defaults on its obligation to return the securities loaned
because of insolvency or other reasons, the fund could experience
delays and costs in recovering the securities loaned or in gaining
access to the collateral. At period end, the value of the securities
loaned amounted to $29,432,029. The fund received cash collateral of
$29,880,950 which was invested in cash equivalents.
6. 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 $280,455 under this arrangement.
In addition, through arrangements with the fund's custodian and each
class' transfer agent, 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 $23,314 under the custodian
arrangement, and each applicable class' expenses were reduced as
follows under the transfer agent arrangements:
TRANSFER AGENT CREDITS
CLASS A $ 292
CLASS T 2,731
INSTITUTIONAL CLASS 134
$ 3,157
7. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED MAY 31, 2000 YEAR ENDED NOVEMBER 30, 1999
FROM NET REALIZED GAIN
Class A $ 2,232,639 $ 380,123
Class T 40,670,247 11,172,328
Class B 9,272,175 2,365,092
Class C 3,037,725 389,625
Institutional Class 4,112,708 1,230,073
Total $ 59,325,494 $ 15,537,241
</TABLE>
8. SHARE TRANSACTIONS.
Transactions for each class of shares for the periods were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SHARES DOLLARS
SIX MONTHS ENDED MAY 31, YEAR ENDED NOVEMBER 30, SIX MONTHS ENDED MAY 31,
2000 1999 2000
CLASS A Shares sold 2,962,111 $ 50,362,941
2,384,749
Reinvestment of distributions 127,621 27,137 2,167,045
Shares redeemed (337,162) (2,307,129) (6,909,898)
Net increase (decrease) 2,175,208 682,119 $ 45,620,088
CLASS T Shares sold 25,688,541 22,494,339 $ 549,333,544
Reinvestment of distributions 2,246,986 782,801 38,423,840
Shares redeemed (12,712,766) (20,618,739) (263,703,584)
Net increase (decrease) 15,222,761 2,658,401 $ 324,053,800
CLASS B Shares sold 6,324,509 2,568,690 $ 135,185,784
Reinvestment of distributions 487,214 148,162 8,217,058
Shares redeemed (893,240) (1,852,174) (18,542,889)
Net increase (decrease) 5,918,483 864,678 $ 124,859,953
CLASS C Shares sold 3,814,664 2,450,666 $ 80,705,663
Reinvestment of distributions 163,130 26,885 2,753,930
Shares redeemed (1,246,726) (1,244,811) (25,352,522)
Net increase (decrease) 2,731,068 1,232,740 $ 58,107,071
INSTITUTIONAL CLASS Shares 1,222,242 1,472,039 $ 26,576,604
sold
Reinvestment of distributions 220,576 85,211 3,774,948
Shares redeemed (1,116,295) (1,220,854) (24,130,946)
Net increase (decrease) 326,523 336,396 $ 6,220,606
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
DOLLARS
YEAR ENDED NOVEMBER 30,
1999
CLASS A Shares sold $ 48,121,357
Reinvestment of distributions 362,550
Shares redeemed (37,764,534)
Net increase (decrease) $ 10,719,373
CLASS T Shares sold $ 352,225,906
Reinvestment of distributions 10,519,637
Shares redeemed (320,406,442)
Net increase (decrease) $ 42,339,101
CLASS B Shares sold $ 39,269,276
Reinvestment of distributions 1,970,339
Shares redeemed (27,126,558)
Net increase (decrease) $ 14,113,057
CLASS C Shares sold $ 37,791,832
Reinvestment of distributions 358,373
Shares redeemed (19,208,310)
Net increase (decrease) $ 18,941,895
INSTITUTIONAL CLASS Shares $ 22,609,330
sold
Reinvestment of distributions 1,145,239
Shares redeemed (19,036,774)
Net increase (decrease) $ 4,717,795
</TABLE>
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research
(U.K.) Inc.
Fidelity Management & Research
(Far East) Inc.
Fidelity Investments Japan Ltd.
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Abigail P. Johnson, Vice President
David Felman, Vice President
Eric D. Roiter, Secretary
Robert A. Dwight, Treasurer
Maria F. Dwyer, Deputy Treasurer
John H. Costello, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
Donald J. Kirk *
Ned C. Lautenbach *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
* INDEPENDENT TRUSTEES
ADVISORY BOARD
J. Michael Cook
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 Telecommunications & Utilities Growth Fund
GROWTH FUNDS
Fidelity Advisor Latin America Fund
Fidelity Advisor Emerging Asia 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 (registered trademark)
Growth Fund
Fidelity Advisor Small Cap Fund
Fidelity Advisor Value Strategies Fund
Fidelity Advisor Mid Cap Fund
Fidelity Advisor Dynamic Capital Appreciation Fund
Fidelity Advisor Equity Growth Fund
Fidelity Advisor Large Cap Fund
Fidelity Advisor Dividend Growth Fund
Fidelity Advisor Growth
Opportunities Fund
MC-SANN-0700 106138
1.704677.102
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 High Income 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
(2_FIDELITY_LOGOS)(registered trademark)
FIDELITY(REGISTERED TRADEMARK) ADVISOR
MID CAP
FUND - INSTITUTIONAL CLASS
SEMIANNUAL REPORT
MAY 31, 2000
(2_FIDELITY_LOGOS)(registered trademark)
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 23 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 32 Notes to the financial
statements.
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 technology sell-off that began in mid-March continued to hamper
equity markets, driving the tech-heavy NASDAQ index down more than 16%
year to date through the end of May. Broader equity indexes, including
the S&P 500(registered trademark), also were down, but not as much as
more concentrated performance measures. In bond markets, Treasuries
got a boost late in the period as economic reports showed the first
signs of a slowing economy.
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 an investment in a money market fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although money market funds seek to preserve the
value of your investment at $1.00 per share, it is possible to lose
money by investing in these types of funds.
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 PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
FIDELITY ADV MID CAP - INST CL 27.14% 42.94% 159.96%
S&P MidCap 400 (registered 13.78% 21.46% 123.25%
trademark)
Mid-Cap Funds Average 14.74% 33.79% n/a
CUMULATIVE TOTAL RETURNS show Institutional Class' performance in
percentage terms over a set period - in this case, six months, 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(registered trademark) Index - a 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 Inc. The past six months average represents a peer group of 473
mutual funds. These benchmarks include reinvested dividends and
capital gains, if any, and exclude the effect of sales charges. Lipper
has created new comparison categories that group funds according to
portfolio characteristics and capitalization, as well as by
capitalization only. These averages are listed on page 5 of this
report.*
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 YEAR LIFE OF FUND
FIDELITY ADV MID CAP - INST CL 42.94% 25.02%
S&P MidCap 400 21.46% 20.65%
Mid-Cap Funds Average 33.79% 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
1998/12/31 17050.84 18120.19
1999/01/31 17275.66 17414.77
1999/02/28 16340.88 16502.94
1999/03/31 17098.17 16964.03
1999/04/30 18281.44 18302.15
1999/05/31 18186.77 18381.40
1999/06/30 19334.54 19365.72
1999/07/31 18932.23 18954.20
1999/08/31 18955.90 18304.45
1999/09/30 18435.26 17739.39
1999/10/31 19299.04 18643.39
1999/11/30 20446.81 19621.99
1999/12/31 23703.57 20788.12
2000/01/31 24020.33 20202.73
2000/02/29 30923.61 21616.51
2000/03/31 29242.70 23425.60
2000/04/30 27189.68 22607.58
2000/05/31 25996.36 22325.43
IMATRL PRASUN SHR__CHT 20000531 20000621 093512 R00000000000055
$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 May
31, 2000, the value of the investment would have grown to $25,996 - a
159.96% 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 $22,325 - a 123.25% increase.
(checkmark)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.
* THE LIPPER MID-CAP CORE FUNDS AVERAGE REFLECTS THE PERFORMANCE
(EXCLUDING SALES CHARGES) OF MUTUAL FUNDS WITH SIMILAR PORTFOLIO
CHARACTERISTICS AND CAPITALIZATION. THE MID-CAP SUPERGROUP AVERAGE
REFLECTS THE PERFORMANCE (EXCLUDING SALES CHARGES) OF MUTUAL FUNDS
WITH SIMILAR CAPITALIZATION. AS OF MAY 31, 2000, THE SIX MONTH AND ONE
YEAR CUMULATIVE TOTAL RETURNS FOR THE MID-CAP CORE FUNDS AVERAGE WERE,
15.53% AND 34.08%, RESPECTIVELY. THE ONE YEAR AVERAGE ANNUAL TOTAL
RETURN WAS 34.08%. THE SIX MONTH AND ONE YEAR CUMULATIVE TOTAL RETURNS
FOR THE MID-CAP SUPERGROUP AVERAGE WERE, 13.11% AND 33.61%,
RESPECTIVELY. THE ONE YEAR AVERAGE ANNUAL TOTAL RETURN WAS 33.61%.
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
U.S. equity investors faced a steadily
declining market during the latter
part of the six-month period that
ended May 31, 2000, after
experiencing continued growth the
prior three months. Two chief
catalysts - a tightening of monetary
policy by the Federal Reserve Board
and the bursting of a speculative
bubble in technology stocks -
sparked a sustained pullback among
the major U.S. equity indexes that
began in March. The tech-heavy
NASDAQ Composite Index reached
a high of 5048 on March 10 before
quickly retreating below the 4000
level. The NASDAQ dropped to
3401 on the final day of the period,
gaining a modest 2.05% return for
the six-month period. The Standard
& Poor's 500SM Index - an index
of 500 widely held stocks - fared
slightly better in returning 2.90%.
Another index of well-established
stocks - the blue chips' Dow Jones
Industrial Average - surged higher
during the NASDAQ's sharp
plummet in April, but the brief rally
wasn't enough to significantly offset
earlier losses, and the Dow returned
-2.55% for the period. The Russell
2000(Registered trademark) Index - a barometer of
small-cap stocks - outperformed the
major indexes of larger companies
with a 5.50% return. As the period
drew to a close, weaker trading
volume suggested investors were
mixed about the direction of U.S.
stocks, and whether the three
interest-rate hikes levied by the
Fed during the period had begun
to cool off the overheated economy.
(photograph of David Felman)
An interview with David Felman, Portfolio Manager of Fidelity Advisor
Mid Cap Fund
Q. HOW DID THE FUND PERFORM, DAVID?
A. For the six-month period that ended on May 31, 2000, the fund's
Institutional Class shares had a total return of 27.14%, while the
Standard & Poor's MidCap 400 Index returned 13.78% and the mid-cap
funds average monitored by Lipper Inc. was up 14.74%. For the 12-month
period that ended on May 31, 2000, the fund's Institutional Class
shares returned 42.94%. During the same 12 months, the S&P MidCap
index returned 21.46% while the mid-cap funds average was 33.79%.
Q. WHAT FACTORS AFFECTED PERFORMANCE?
A. Especially in the first four months of the period, the fund's heavy
weightings in technology and health care - notably biotechnology -
supported overall performance, as did my decision to reduce weightings
in media, advertising and financial services stocks. On the other
hand, I increased the fund's energy investments, and this helped late
in the period as energy prices rose and the industry rallied. The
strong performance of the fund's energy positions helped offset some
of the losses in our technology and biotechnology holdings, which
suffered a steep correction in April and May 2000. I believe the
correction was caused more by a general concern about high valuations
of technology and biotechnology stocks than any deterioration in the
business fundamentals of the fund's holdings.
Q. WHAT WERE YOUR PRINCIPAL STRATEGIES?
A. I had a heavy emphasis on technology throughout the period. Even
though I trimmed technology holdings late in the period, they still
accounted for 33% of net assets as of May 31. Within technology,
wireless communications and the Internet were my two principal
investment themes. Wireless market penetration and usage increased,
benefiting service providers such as Nextel and equipment companies
such as Kopin. The fund held good positions in both companies. Demand
for the Internet also grew. Internet-related investments that
performed particularly well included Exodus Communications,
DoubleClick and Veritas Software Corp.
Q. OUTSIDE OF TECHNOLOGY, YOUR LARGEST WEIGHTINGS WERE IN ENERGY AND
HEALTH CARE, AT 13.8% AND 11.9% OF NET ASSETS, RESPECTIVELY. WHAT WERE
YOUR STRATEGIES?
A. I was enthusiastic about the prospects for energy stocks. As OPEC
showed discipline in restraining oil production, prices rose.
Meanwhile, inventories were down. After several years of relatively
light spending on equipment, the industry started to increase its
capital investments. All these factors indicated improving prospects.
My better-performing energy investments included Apache, an
exploration and production company, and BJ Services, which provides
services for exploration companies. In health care, I invested in
biotechnology companies, which did well as developing drugs either
approached or reached the consumer market. Among the holdings that
benefited were COR Therapeutics and Cephalon. I also invested in
companies that could take advantage of developments in genomics, or
gene-mapping. Two examples that did well early in the period were
Incyte Pharmaceuticals and Gene Logic.
Q. WERE THERE ANY DISAPPOINTMENTS?
A. Idec Pharmaceuticals, a biotechnology company, had disappointing
performance after one of its principal drugs had slower-than-expected
sales growth. In general, the fund's relative performance suffered in
the final two months of the period when technology and biotechnology
stocks fell. My underweighting in financial stocks helped performance
for the first four months of the six-month period, but not in the
final two months. I avoided them because I thought they were at the
top of their cycle, merger-and-acquisition activity was slowing and
interest rates were rising. However, investors rotated into financial
services stocks as technology stocks fell. The same general trend
benefited cyclical stocks, which I had underweighted with the
exception of energy.
Q. WHAT IS YOUR OUTLOOK FOR THE MID-CAP STOCK MARKET?
A. The rapid growth of wireless communications and increased Internet
usage are major long-term trends. However, the stocks that benefited
from this growth reached very high valuations and then suffered sharp
corrections in April and May. The question is: Where do we go from
here? I believe that technology will continue to be a driving force of
global change. Stock picking and fundamental analysis will be crucial
and valuations probably will be important.
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 AND DO NOT NECESSARILY REPRESENT THE VIEWS OF FIDELITY OR
ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH VIEWS ARE
SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER CONDITIONS
AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE
VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE
INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS
FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY FIDELITY FUND.
(checkmark)FUND FACTS
GOAL: long-term growth of
capital by investing mainly in
equity securities of
companies with
medium-sized market
capitalizations
START DATE: February 20,
1996
SIZE: as of May 31, 2000,
more than $1.3 billion
MANAGER: David Felman, since
1999; joined Fidelity in
1993
DAVID FELMAN ON THE GROWTH
OF WIRELESS COMMUNICATIONS:
" In some parts of Europe, the
penetration of wireless
communications has reached 60% of
the population, exceeding even the
penetration of wire-based
communications. In the United
States, we still are only slightly
above 30% penetration. There is no
reason why wireless
communications will not exceed
60% penetration in the U.S., helping
both the service-providing
companies and the equipment
manufacturers. The main question
is the pace of the growth.
" I see two reasons why growth
may happen faster in the United
States than it did in Europe. First,
the second wave of growth tends
to be faster than the first wave,
and the U.S. is still in the first
wave. Secondly, the expansion of
data services over wireless phones
should accelerate growth in both
market penetration and usage.
Not only can we use wireless phones
to make telephone calls, but we
can use them to check stock
prices, buy books, check the
weather report, or get directions on
where to go. The risks are that
penetration will slow for some
unknown reasons or that the
economy will slow and consumers
will begin to see wireless phones
as luxuries. If the economy
weakens, and people don't have as
much money, they may not see the
need to spend more on wireless
phones."
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C>
TOP TEN STOCKS AS OF MAY 31,
2000
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Nextel Communications, Inc. 2.9 2.4
Class A
Kopin Corp. 2.5 1.3
VERITAS Software Corp. 1.8 2.2
Altera Corp. 1.6 1.0
Sepracor, Inc. 1.1 0.9
Calpine Corp. 1.1 0.9
Apache Corp. 1.0 0.9
General Motors Corp. Class H 1.0 0.0
Dynegy, Inc. Class A 0.9 0.0
Pegasus Communications Corp. 0.9 0.0
14.8 9.6
TOP FIVE MARKET SECTORS AS OF
MAY 31, 2000
% OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6
MONTHS AGO
Technology 33.0 33.4
Energy 13.8 9.9
Health 11.9 11.9
Utilities 9.5 10.8
Finance 6.9 9.7
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
ASSET ALLOCATION (% OF FUND'S
NET ASSETS)
AS OF MAY 31, 2000 * AS OF NOVEMBER 30, 1999 **
Stocks and Equity Futures 94.0% Stocks 97.9%
Short-Term Investments and Short-Term Investments and
Net Other Assets 6.0% Net Other Assets 2.1%
* FOREIGN INVESTMENTS 5.5% ** FOREIGN INVESTMENTS 6.0%
Row: 1, Col: 1, Value: 94.0 Row: 1, Col: 1, Value: 97.90000000000001
Row: 1, Col: 2, Value: 0.0 Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 0.0 Row: 1, Col: 3, Value: 0.0
Row: 1, Col: 4, Value: 0.0 Row: 1, Col: 4, Value: 0.0
Row: 1, Col: 5, Value: 0.0 Row: 1, Col: 5, Value: 0.0
Row: 1, Col: 6, Value: 0.0 Row: 1, Col: 6, Value: 0.0
Row: 1, Col: 7, Value: 0.0 Row: 1, Col: 7, Value: 0.0
Row: 1, Col: 8, Value: 6.0 Row: 1, Col: 8, Value: 2.1
</TABLE>
INVESTMENTS MAY 31, 2000 (UNAUDITED)
Showing Percentage of Net Assets
COMMON STOCKS - 91.0%
SHARES VALUE (NOTE 1)
BASIC INDUSTRIES - 1.6%
CHEMICALS & PLASTICS - 1.3%
Avery Dennison Corp. 73,900 $ 4,526,375
Dow Chemical Co. 14,300 1,530,994
Ivex Packaging Corp. (a) 94,600 851,400
Lyondell Chemical Co. 280,200 4,675,838
M.A. Hanna Co. 235,200 2,748,900
Sealed Air Corp. (a) 47,500 2,660,000
Union Carbide Corp. 24,700 1,350,781
18,344,288
PACKAGING & CONTAINERS - 0.2%
Bemis Co., Inc. 73,600 2,530,000
PAPER & FOREST PRODUCTS - 0.1%
Trex Co., Inc. 15,800 703,100
TOTAL BASIC INDUSTRIES 21,577,388
CONSTRUCTION & REAL ESTATE -
0.4%
ENGINEERING - 0.4%
Bouygues SA 2,900 1,804,769
Dycom Industries, Inc. (a) 33,300 1,612,969
Quanta Services, Inc. (a) 49,800 2,440,200
5,857,938
DURABLES - 2.0%
AUTOS, TIRES, & ACCESSORIES -
0.6%
Barrett Resources Corp. 94,400 3,734,700
SPX Corp. (a) 46,055 4,850,167
8,584,867
CONSUMER ELECTRONICS - 1.0%
General Motors Corp. Class H 138,700 13,653,281
(a)
TEXTILES & APPAREL - 0.4%
Jones Apparel Group, Inc. (a) 66,100 1,772,306
Liz Claiborne, Inc. 91,420 3,593,949
5,366,255
TOTAL DURABLES 27,604,403
ENERGY - 13.8%
ENERGY SERVICES - 7.8%
BJ Services Co. (a) 120,600 8,637,975
Cal Dive International, Inc. 64,200 2,957,213
(a)
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
ENERGY - CONTINUED
ENERGY SERVICES - CONTINUED
Coflexip SA sponsored ADR 41,400 $ 2,411,550
Diamond Offshore Drilling, 122,100 4,990,838
Inc.
ENSCO International, Inc. 272,300 9,513,481
Global Marine, Inc. 308,900 8,745,731
Grey Wolf, Inc. (a) 1,060,200 5,301,000
Halliburton Co. 138,800 7,078,800
Hanover Compressor Co. (a) 59,900 3,515,381
Helmerich & Payne, Inc. 130,100 4,846,225
Nabors Industries, Inc. (a) 199,300 8,569,900
Noble Drilling Corp. (a) 232,700 10,093,363
Pride International, Inc. (a) 89,600 2,279,200
R&B Falcon Corp. (a) 257,200 6,028,125
Smith International, Inc. (a) 55,800 4,411,688
Tidewater, Inc. 156,900 6,099,488
Transocean Sedco Forex, Inc. 90,300 4,441,631
Varco International, Inc. (a) 166,796 3,627,818
Weatherford International, 100,900 4,345,006
Inc.
107,894,413
OIL & GAS - 6.0%
Anadarko Petroleum Corp. 110,300 5,852,794
Apache Corp. 225,000 13,696,875
Burlington Resources, Inc. 118,200 5,407,650
Cooper Cameron Corp. (a) 88,500 6,172,875
Devon Energy Corp. 97,700 5,843,681
EOG Resources, Inc. 73,400 2,385,500
Grant Prideco, Inc. (a) 91,000 2,115,750
Kerr-McGee Corp. 46,627 2,783,049
Murphy Oil Corp. 14,200 921,225
Noble Affiliates, Inc. 72,500 2,850,156
Nuevo Energy Co. (a) 58,820 1,135,961
Ocean Energy, Inc. (a) 259,400 3,891,000
Santa Fe Snyder Corp. (a) 721,535 9,109,379
Tosco Corp. 114,600 3,509,625
USX - Marathon Group 48,900 1,329,469
Valero Energy Corp. 99,300 2,904,525
Vastar Resources, Inc. 127,000 10,342,563
Veritas DGC, Inc. (a) 122,600 3,386,825
83,638,902
TOTAL ENERGY 191,533,315
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
FINANCE - 6.9%
BANKS - 1.0%
Bank of New York Co., Inc. 76,600 $ 3,595,413
Bank One Corp. 309,100 10,219,619
PNC Financial Services Group, 4,600 231,725
Inc.
14,046,757
CREDIT & OTHER FINANCE - 0.6%
Concord EFS, Inc. (a) 93,800 2,274,650
Household International, Inc. 123,100 5,785,700
8,060,350
FEDERAL SPONSORED CREDIT - 0.9%
Freddie Mac 263,800 11,739,100
INSURANCE - 4.2%
Ace Ltd. 121,100 3,246,994
AFLAC, Inc. 48,400 2,501,675
Allmerica Financial Corp. 72,300 4,170,806
AMBAC Financial Group, Inc. 120,600 6,075,225
American General Corp. 27,500 1,761,719
CIGNA Corp. 128,750 11,434,609
Hartford Financial Services 33,700 1,992,513
Group, Inc.
Hartford Life, Inc. Class A 33,700 1,691,319
Jefferson-Pilot Corp. 21,100 1,447,988
MBIA, Inc. 32,100 1,855,781
MetLife, Inc. 357,100 7,320,550
Protective Life Corp. 130,100 3,577,750
Reliastar Financial Corp. 116,575 6,003,613
The Chubb Corp. 27,800 1,946,000
XL Capital Ltd. Class A 55,700 3,314,150
58,340,692
SAVINGS & LOANS - 0.2%
Golden West Financial Corp. 70,500 2,943,375
TOTAL FINANCE 95,130,274
HEALTH - 11.9%
DRUGS & PHARMACEUTICALS - 9.6%
Abgenix, Inc. (a) 32,200 2,543,800
Alkermes, Inc. (a) 26,200 959,575
Allergan, Inc. 41,400 2,843,663
Aviron (a) 176,300 4,264,256
Bristol-Myers Squibb Co. 106,400 5,858,650
Celgene Corp. (a) 182,400 6,703,200
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
HEALTH - CONTINUED
DRUGS & PHARMACEUTICALS -
CONTINUED
Cephalon, Inc. (a) 227,600 $ 11,778,300
Chiron Corp. (a) 4,400 166,925
COR Therapeutics, Inc. (a) 136,700 8,663,363
Corixa Corp. (a) 50,500 1,609,688
CV Therapeutics, Inc. (a) 37,825 1,569,738
Elan Corp. PLC sponsored ADR 100,100 3,985,231
(a)
Eli Lilly & Co. 38,913 2,962,252
Forest Laboratories, Inc. (a) 51,000 4,513,500
Gene Logic, Inc. (a) 135,800 2,868,775
Genentech, Inc. 17,000 1,825,375
Gilead Sciences, Inc. (a) 35,390 1,935,391
Human Genome Sciences, Inc. 3,500 307,125
(a)
ImClone Systems, Inc. (a) 68,200 4,816,625
Immunex Corp. (a) 46,500 1,203,188
Medimmune, Inc. (a) 12,990 2,018,321
Millennium Pharmaceuticals, 67,932 5,680,814
Inc. (a)
Mylan Laboratories, Inc. 62,900 1,686,506
Myriad Genetics, Inc. (a) 54,850 4,326,294
PE Corp. - Celera Genomics 70,500 3,921,563
Group (a)
Protein Design Labs, Inc. (a) 71,000 7,570,375
QLT, Inc. (a) 180,130 8,847,013
Schering-Plough Corp. 49,400 2,389,725
Sepracor, Inc. (a) 156,500 14,965,313
SuperGen, Inc. (a) 53,900 1,273,388
Teva Pharmaceutical 97,800 5,268,975
Industries Ltd. ADR
Titan Pharmaceuticals, Inc. 56,800 1,441,300
(a)
United Therapeutics Corp. 53,200 3,404,800
134,173,007
MEDICAL EQUIPMENT & SUPPLIES
- 0.7%
Millipore Corp. 43,600 3,155,550
MiniMed, Inc. (a) 14,800 1,768,600
Novoste Corp. (a) 48,500 1,833,906
Sybron International, Inc. (a) 79,600 2,522,325
9,280,381
MEDICAL FACILITIES MANAGEMENT
- 1.6%
Laboratory Corp. of America 18,800 1,351,250
Holdings
Quest Diagnostics, Inc. (a) 121,500 8,125,313
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
HEALTH - CONTINUED
MEDICAL FACILITIES MANAGEMENT
- CONTINUED
Trigon Healthcare, Inc. (a) 213,820 $ 10,691,000
Wellpoint Health Networks, 25,500 1,851,938
Inc. (a)
22,019,501
TOTAL HEALTH 165,472,889
INDUSTRIAL MACHINERY &
EQUIPMENT - 2.3%
ELECTRICAL EQUIPMENT - 1.6%
Adaptive Broadband Corp. (a) 142,840 3,785,260
American Power Conversion 39,300 1,392,694
Corp. (a)
ANTEC Corp. (a) 28,200 1,417,050
California Amplifier, Inc. (a) 9,300 210,413
Emerson Electric Co. 26,300 1,551,700
Harris Corp. 34,100 1,042,181
Pace Micro Technology PLC 436,366 5,972,273
Powerwave Technologies, Inc. 35,700 1,934,494
(a)
Scientific-Atlanta, Inc. 25,400 1,431,925
Vyyo, Inc. 203,600 3,003,100
21,741,090
INDUSTRIAL MACHINERY &
EQUIPMENT - 0.7%
Asyst Technologies, Inc. (a) 137,300 5,543,488
Ingersoll-Rand Co. 56,000 2,551,500
Varian Semiconductor 46,700 2,227,006
Equipment Associates, Inc.
(a)
10,321,994
TOTAL INDUSTRIAL MACHINERY & 32,063,084
EQUIPMENT
MEDIA & LEISURE - 2.9%
BROADCASTING - 2.2%
EchoStar Communications Corp. 149,000 5,950,688
Class A (a)
Pegasus Communications Corp. 307,200 12,595,200
(a)
Radio One, Inc. Class A 38,800 2,774,200
UnitedGlobalCom, Inc. Class A 28,300 1,358,400
(a)
Univision Communications, 42,500 4,377,500
Inc. Class A (a)
Westwood One, Inc. (a) 116,160 3,855,060
30,911,048
ENTERTAINMENT - 0.6%
Mandalay Resort Group (a) 101,000 2,139,938
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
MEDIA & LEISURE - CONTINUED
ENTERTAINMENT - CONTINUED
MGM Grand, Inc. 164,800 $ 5,356,000
Park Place Entertainment 46,200 583,275
Corp. (a)
8,079,213
PUBLISHING - 0.0%
Reader's Digest Association, 9,700 328,588
Inc. Class A (non-vtg.)
RESTAURANTS - 0.1%
Jack in the Box, Inc. (a) 25,900 642,644
TOTAL MEDIA & LEISURE 39,961,493
NONDURABLES - 1.6%
AGRICULTURE - 0.2%
Nutreco Holding NV 64,932 2,534,716
BEVERAGES - 0.2%
Seagram Co. Ltd. 75,700 3,540,929
FOODS - 0.8%
Keebler Foods Co. 113,900 4,128,875
Nabisco Group Holdings Corp. 227,600 4,964,525
Quaker Oats Co. 35,900 2,640,894
11,734,294
HOUSEHOLD PRODUCTS - 0.4%
Avon Products, Inc. 121,900 5,035,994
TOTAL NONDURABLES 22,845,933
PRECIOUS METALS - 0.4%
Agnico-Eagle Mines Ltd. 94,200 497,280
Newmont Mining Corp. 13,400 309,038
Stillwater Mining Co. (a) 178,200 5,000,738
5,807,056
RETAIL & WHOLESALE - 0.9%
APPAREL STORES - 0.3%
AnnTaylor Stores Corp. (a) 144,100 3,746,600
GENERAL MERCHANDISE STORES -
0.3%
Consolidated Stores Corp. (a) 25,200 327,600
Costco Wholesale Corp. (a) 74,900 2,392,119
Dollar Tree Stores, Inc. (a) 26,700 1,588,650
4,308,369
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
RETAIL & WHOLESALE - CONTINUED
RETAIL & WHOLESALE,
MISCELLANEOUS - 0.3%
Best Buy Co., Inc. (a) 20,600 $ 1,318,400
Circuit City Stores, Inc. - 30,600 1,524,263
Circuit City Group
Tiffany & Co., Inc. 14,500 883,594
Ventro Corp. 39,100 703,800
4,430,057
TOTAL RETAIL & WHOLESALE 12,485,026
SERVICES - 2.4%
ADVERTISING - 0.6%
DoubleClick, Inc. (a) 103,460 4,371,185
TMP Worldwide, Inc. (a) 82,000 4,530,500
8,901,685
PRINTING - 0.0%
Valassis Communications, Inc. 13,200 435,600
(a)
SERVICES - 1.8%
ACNielsen Corp. (a) 193,800 4,299,938
Cintas Corp. 96,100 4,228,400
Convergys Corp. (a) 50,000 2,246,875
Ecolab, Inc. 143,600 5,492,700
Per-Se Technologies, Inc. (a) 958 6,227
Per-Se Technologies, Inc. 1,287 0
warrants 7/8/03 (a)
Profit Recovery Group 106,700 1,933,938
International, Inc. (a)
Robert Half International, 58,400 3,467,500
Inc. (a)
True North Communications 60,900 2,660,569
24,336,147
TOTAL SERVICES 33,673,432
TECHNOLOGY - 33.0%
COMMUNICATIONS EQUIPMENT - 3.6%
ADC Telecommunications, Inc. 23,000 1,545,313
(a)
Advanced Fibre 17,300 795,800
Communications, Inc. (a)
Andrew Corp. (a) 121,000 4,250,125
Ciena Corp. (a) 23,400 2,800,688
Cisco Systems, Inc. (a) 63,700 3,626,919
Comverse Technology, Inc. (a) 72,710 6,643,876
Corning, Inc. 29,910 5,785,716
Ditech Communications Corp. 9,100 746,200
Efficient Networks, Inc. 52,100 2,526,850
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TECHNOLOGY - CONTINUED
COMMUNICATIONS EQUIPMENT -
CONTINUED
InterVoice-Brite, Inc. (a) 34,300 $ 488,775
Jabil Circuit, Inc. (a) 144,100 5,259,650
Metricom, Inc. (a) 73,500 1,635,375
Natural MicroSystems Corp. (a) 123,900 7,976,063
Nokia AB sponsored ADR 13,600 707,200
Oni Systems Corp. 700 17,500
Tekelec (a) 43,800 1,445,400
Terayon Communication 8,400 466,200
Systems, Inc. (a)
Turnstone Systems, Inc. 12,300 1,081,823
Tut Systems, Inc. (a) 4,400 227,700
Westell Technologies, Inc. 58,400 959,950
Class A (a)
Xircom, Inc. (a) 17,300 713,625
49,700,748
COMPUTER SERVICES & SOFTWARE
- 8.7%
Active Software, Inc. 36,100 1,295,088
Adobe Systems, Inc. 71,300 8,025,706
Affiliated Computer Services, 36,000 1,226,250
Inc. Class A (a)
Affymetrix, Inc. (a) 21,500 2,553,125
Amazon.com, Inc. (a) 14,000 676,375
Amdocs Ltd. (a) 65,900 4,081,681
Ariba, Inc. 33,000 1,720,125
Art Technology Group, Inc. 83,800 4,918,013
Autodesk, Inc. 65,700 2,443,219
Be Free, Inc. 83,700 774,225
BEA Systems, Inc. (a) 154,900 5,595,763
BroadVision, Inc. (a) 28,100 1,006,331
Business Objects SA sponsored 7,600 608,000
ADR (a)
CACI International, Inc. 75,000 1,481,250
Class A (a)
Cadence Design Systems, Inc. 71,900 1,150,400
(a)
Check Point Software 12,100 2,273,288
Technologies Ltd. (a)
Citrix Systems, Inc. (a) 23,500 1,236,688
Clarent Corp. 16,500 699,188
CNET Networks, Inc. (a) 99,000 3,409,313
Computer Sciences Corp. (a) 16,500 1,582,969
Covad Communications Group, 171,100 4,042,238
Inc. (a)
Digital Insight Corp. 21,800 836,575
Electronic Arts, Inc. (a) 16,500 1,053,938
Exchange Applications, Inc. 130,040 1,788,050
(a)
Foundry Networks, Inc. 37,000 2,333,313
Interact Commerce Corp. 59,660 894,900
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TECHNOLOGY - CONTINUED
COMPUTER SERVICES & SOFTWARE
- CONTINUED
Internap Network Services 17,100 $ 489,488
Corp.
Intuit, Inc. (a) 43,580 1,579,775
Keynote Systems, Inc. 41,200 1,434,275
Macromedia, Inc. (a) 4,700 373,283
Marketwatch.com, Inc. (a) 2,600 54,600
Mercury Interactive Corp. (a) 58,200 4,932,450
Metasolv Software, Inc. 56,200 2,219,900
Micromuse, Inc. (a) 14,600 1,453,613
National Computer Systems, 40,500 1,840,219
Inc.
New Era of Networks, Inc. (a) 14,400 307,800
Opus360 Corp. 745 3,678
Orbotech Ltd. 24,400 2,061,800
Pharmacopeia, Inc. (a) 21,500 467,625
Phone.com, Inc. 9,000 629,438
Polycom, Inc. (a) 57,900 4,867,219
Priceline.com, Inc. (a) 8,000 305,000
Puma Technology, Inc. (a) 22,000 484,000
Rational Software Corp. (a) 70,700 5,183,194
Redback Networks, Inc. 31,700 2,658,838
Software.com, Inc. 11,800 994,150
VERITAS Software Corp. (a) 216,700 25,245,550
Vignette Corp. (a) 85,300 2,351,081
Vitria Technology, Inc. 38,200 1,337,000
webMethods, Inc. 26,100 2,182,613
121,162,600
COMPUTERS & OFFICE EQUIPMENT
- 3.2%
Apple Computer, Inc. (a) 60 5,040
Brocade Communications 28,600 3,373,013
Systems, Inc.
CDW Computer Centers, Inc. (a) 65,400 7,650,778
Comdisco, Inc. 30,400 779,000
Copper Mountain Networks, 19,600 1,637,825
Inc.
Fujitsu Support & Service, 3,100 290,212
Inc. (FSAS)
Ingram Micro, Inc. Class A (a) 68,100 1,149,188
Juniper Networks, Inc. 39,800 6,972,463
MMC Networks, Inc. (a) 44,800 1,461,600
MRV Communications, Inc. (a) 31,600 841,350
Network Appliance, Inc. (a) 137,700 8,890,256
SanDisk Corp. (a) 16,600 964,875
ScanSource, Inc. (a) 41,400 1,138,500
SCI Systems, Inc. (a) 73,800 3,321,000
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TECHNOLOGY - CONTINUED
COMPUTERS & OFFICE EQUIPMENT
- CONTINUED
SCM Microsystems, Inc. (a) 14,500 $ 998,688
Symbol Technologies, Inc. 50,550 2,227,359
Tech Data Corp. (a) 66,900 2,512,931
44,214,078
ELECTRONIC INSTRUMENTS - 3.5%
Aclara Biosciences, Inc. 32,100 846,638
Agilent Technologies, Inc. 15,300 1,126,463
Aurora Biosciences Corp. (a) 103,100 4,890,806
FEI Co. (a) 147,400 2,653,200
KLA-Tencor Corp. (a) 64,180 3,180,921
Kulicke & Soffa Industries, 60,400 3,038,875
Inc. (a)
Novellus Systems, Inc. (a) 101,600 4,895,850
PE Corp. - Biosystems Group 75,500 4,190,250
PerkinElmer, Inc. 179,200 9,408,000
Photon Dynamics, Inc. (a) 79,500 4,794,844
Tektronix, Inc. 57,400 3,070,900
Waters Corp. (a) 74,300 7,021,350
49,118,097
ELECTRONICS - 14.0%
Advanced Micro Devices, Inc. 98,800 8,046,025
(a)
Altera Corp. (a) 251,000 21,554,625
Analog Devices, Inc. (a) 77,600 5,975,200
Arrow Electronics, Inc. (a) 50,800 1,781,175
Atmel Corp. (a) 120,600 4,605,413
Broadcom Corp. Class A (a) 6,700 871,419
Burr-Brown Corp. (a) 14,400 819,900
Celestica, Inc. (sub. vtg.) 41,300 1,926,321
(a)
Chartered Semiconductor 21,600 1,733,400
Manufacturing Ltd. ADR
Cree, Inc. (a) 12,700 1,542,852
Cypress Semiconductor Corp. 156,300 6,574,369
(a)
E Tek Dynamics, Inc. (a) 15,600 2,867,475
Flextronics International 52,500 2,857,969
Ltd. (a)
GlobeSpan, Inc. 53,800 4,754,575
Hadco Corp. (a) 26,600 2,347,450
Infineon Technologies AG (a) 38,900 2,506,558
KEMET Corp. (a) 72,500 4,871,094
Kopin Corp. (a) 482,300 34,213,156
Lattice Semiconductor Corp. 69,600 4,128,150
(a)
LSI Logic Corp. (a) 52,600 2,771,363
Methode Electronics, Inc. 42,300 1,517,513
Class A
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TECHNOLOGY - CONTINUED
ELECTRONICS - CONTINUED
Microchip Technology, Inc. (a) 87,500 $ 4,966,992
Micron Technology, Inc. (a) 124,300 8,693,231
National Semiconductor Corp. 205,100 11,024,125
(a)
NVIDIA Corp. (a) 22,900 2,613,463
PMC-Sierra, Inc. (a) 30,800 4,720,100
Power-One, Inc. (a) 18,400 1,612,300
QLogic Corp. (a) 53,320 2,619,345
RF Micro Devices, Inc. (a) 12,300 1,291,500
S3, Inc. (a) 546,000 8,736,000
Sanmina Corp. (a) 85,100 5,414,488
SDL, Inc. (a) 29,900 6,774,219
Three-Five Systems, Inc. (a) 59,300 3,721,075
Vishay Intertechnology, Inc. 86,500 6,119,875
(a)
Vitesse Semiconductor Corp. 140,400 7,107,750
(a)
Xilinx, Inc. (a) 18,200 1,385,475
195,065,940
TOTAL TECHNOLOGY 459,261,463
TRANSPORTATION - 1.4%
AIR TRANSPORTATION - 0.5%
Alaska Air Group, Inc. (a) 12,830 399,334
Continental Airlines, Inc. 63,900 2,799,619
Class B (a)
Northwest Airlines Corp. 9,400 267,313
Class A (a)
SkyWest, Inc. 32,000 1,220,000
Southwest Airlines Co. 80,500 1,544,594
6,230,860
SHIPPING - 0.6%
Teekay Shipping Corp. 246,400 8,223,600
TRUCKING & FREIGHT - 0.3%
Forward Air Corp. (a) 64,950 2,070,281
Landstar System, Inc. (a) 49,400 2,630,550
4,700,831
TOTAL TRANSPORTATION 19,155,291
UTILITIES - 9.5%
CELLULAR - 4.5%
China Telecom (Hong Kong) 7,600 1,117,200
Ltd. sponsored ADR (a)
Clearnet Communications, Inc. 77,900 2,238,356
Class A (non-vtg.) (a)
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
UTILITIES - CONTINUED
CELLULAR - CONTINUED
Microcell Telecommunications, 149,700 $ 5,496,836
Inc. Class B (non-vtg.) (a)
Millicom International 12,600 535,500
Cellular SA (a)
Nextel Communications, Inc. 437,900 40,560,456
Class A (a)
Nextel Partners, Inc. Class A 41,700 708,900
Sprint Corp. - PCS Group 184,500 10,239,750
Series 1 (a)
VoiceStream Wireless Corp. (a) 15,200 1,740,400
62,637,398
ELECTRIC UTILITY - 2.6%
AES Corp. (a) 76,100 6,639,725
Calpine Corp. (a) 140,960 14,932,950
Constellation Energy Corp. 47,200 1,619,550
Independent Energy Holdings 55,000 1,230,625
PLC sponsored ADR (a)
IPALCO Enterprises, Inc. 89,400 1,776,825
Montana Power Co. 64,600 2,442,688
NiSource, Inc. 208,700 3,769,644
Northern States Power Co. 89,200 1,973,550
NRG Energy, Inc. 35,100 583,538
PECO Energy Co. 36,300 1,594,931
36,564,026
GAS - 1.8%
Columbia Energy Group 3,100 200,531
Dynegy, Inc. Class A 167,947 12,952,912
Enron Corp. 64,900 4,729,588
Kinder Morgan, Inc. 225,300 7,350,413
25,233,444
TELEPHONE SERVICES - 0.6%
Allegiance Telecom, Inc. (a) 13,050 690,019
CenturyTel, Inc. 125,800 3,396,600
Intermedia Communications, 15,600 390,000
Inc. (a)
ITXC Corp. 97,200 3,256,200
TeraBeam Networks (c) 1,100 16,500
WinStar Communications, Inc. 1 14
(a)
7,749,333
TOTAL UTILITIES 132,184,201
TOTAL COMMON STOCKS 1,264,613,186
(Cost $1,087,654,234)
U.S. TREASURY OBLIGATIONS -
0.2%
MOODY'S RATINGS (UNAUDITED) PRINCIPAL AMOUNT VALUE (NOTE 1)
U.S. Treasury Bills, yield at - $ 3,750,000 $ 3,719,861
date of purchase 5.62% to
6.03% 7/13/00 to 8/10/00
(Cost $3,716,026) (d)
CASH EQUIVALENTS - 12.0%
SHARES
Central Cash Collateral Fund, 29,880,950 29,880,950
6.54% (b)
Taxable Central Cash Fund, 136,703,934 136,703,934
6.37% (b)
TOTAL CASH EQUIVALENTS 166,584,884
(Cost $166,584,884)
TOTAL INVESTMENT PORTFOLIO - 1,434,917,931
103.2%
(Cost $1,257,955,144)
NET OTHER ASSETS - (3.2)% (44,783,785)
NET ASSETS - 100% $ 1,390,134,146
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FUTURES CONTRACTS
EXPIRATION DATE UNDERLYING FACE AMOUNT AT VALUE UNREALIZED GAIN/LOSS
PURCHASED
172 S&P 400 Midcap Index June 2000 $ 41,090,800 $ (612,651)
Contracts
THE FACE VALUE OF FUTURES PURCHASED AS A PERCENTAGE OF NET ASSETS - 3.0%
</TABLE>
LEGEND
(a) Non-income producing
(b) The rate quoted is the annualized seven-day yield of the fund at
period end.
(c) Restricted securities - Investment in securities not registered
under the Securities Act of 1933.
Additional information on each holding is as follows:
SECURITY ACQUISITION DATE ACQUISITION COST
TeraBeam Networks 4/7/00 $ 16,500
(d) Security or a portion of the security was pledged to cover margin
requirements for futures contracts. At the period end, the value of
securities pledged amounted to $3,670,150.
INCOME TAX INFORMATION
At May 31, 2000, the aggregate cost of investment securities for
income tax purposes was $1,274,576,682. Net unrealized appreciation
aggregated $160,341,249, of which $277,359,631 related to appreciated
investment securities and $117,018,382 related to depreciated
investment securities.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 2000 (UNAUDITED)
ASSETS
Investment in securities, at $ 1,434,917,931
value (cost $1,257,955,144)
- See accompanying schedule
Receivable for investments 7,398,874
sold
Receivable for fund shares 4,764,847
sold
Dividends receivable 474,708
Interest receivable 655,669
Receivable for daily 77,400
variation on futures
contracts
Other receivables 135,706
TOTAL ASSETS 1,448,425,135
LIABILITIES
Payable for investments $ 21,854,945
purchased
Payable for fund shares 4,855,491
redeemed
Accrued management fee 660,743
Distribution fees payable 675,024
Other payables and accrued 363,836
expenses
Collateral on securities 29,880,950
loaned, at value
TOTAL LIABILITIES 58,290,989
NET ASSETS $ 1,390,134,146
Net Assets consist of:
Paid in capital $ 1,113,946,820
Accumulated net investment (4,588,853)
(loss)
Accumulated undistributed net 104,425,980
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 176,350,199
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS $ 1,390,134,146
STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
MAY 31, 2000 (UNAUDITED)
CALCULATION OF MAXIMUM $20.05
OFFERING PRICE CLASS A: NET
ASSET VALUE, offering price
and redemption price per
share ($73,867,647 (divided
by) 3,684,480 shares)
Maximum offering price per $21.27
share (100/94.25 of $20.05)
CLASS T: NET ASSET VALUE and $20.19
redemption price per share
($900,042,641 (divided by)
44,571,993 shares)
Maximum offering price per $20.92
share (100/96.50 of $20.19)
CLASS B: NET ASSET VALUE and $19.86
offering price per share
($255,013,489 (divided by)
12,843,160 shares) A
CLASS C: NET ASSET VALUE and $19.87
redemption price per share
($97,125,408 (divided by)
4,887,314 shares) A
INSTITUTIONAL CLASS: NET $20.26
ASSET VALUE, offering price
and redemption price per
share ($64,084,961 (divided
by) 3,163,418 shares)
REDEMPTION PRICE PER SHARE IS EQUAL TO THE NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31,
2000 (UNAUDITED)
INVESTMENT INCOME $ 1,569,052
Dividends
Interest 1,966,136
Security lending 135,515
TOTAL INCOME 3,670,703
EXPENSES
Management fee $ 3,364,392
Transfer agent fees 1,297,134
Distribution fees 3,384,043
Accounting and security 151,301
lending fees
Non-interested trustees' 1,616
compensation
Custodian fees and expenses 50,725
Registration fees 286,862
Audit 19,926
Legal 5,853
Miscellaneous 4,630
Total expenses before 8,566,482
reductions
Expense reductions (306,926) 8,259,556
NET INVESTMENT INCOME (LOSS) (4,588,853)
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 107,108,271
Foreign currency transactions (8,917)
Futures contracts 112,394 107,211,748
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 55,319,904
Assets and liabilities in 21,625
foreign currencies
Futures contracts (612,651) 54,728,878
NET GAIN (LOSS) 161,940,626
NET INCREASE (DECREASE) IN $ 157,351,773
NET ASSETS RESULTING FROM
OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED MAY 31, 2000 YEAR ENDED NOVEMBER 30, 1999
(UNAUDITED)
INCREASE (DECREASE) IN NET
ASSETS
Operations Net investment $ (4,588,853) $ (3,635,978)
income (loss)
Net realized gain (loss) 107,211,748 86,552,330
Change in net unrealized 54,728,878 67,199,657
appreciation (depreciation)
NET INCREASE (DECREASE) IN 157,351,773 150,116,009
NET ASSETS RESULTING FROM
OPERATIONS
Distributions to shareholders (59,325,494) (15,537,241)
from net realized gains
Share transactions - net 558,861,518 90,831,221
increase (decrease)
TOTAL INCREASE (DECREASE) 656,887,797 225,409,989
IN NET ASSETS
NET ASSETS
Beginning of period 733,246,349 507,836,360
End of period (including $ 1,390,134,146 $ 733,246,349
accumulated net investment
loss of $4,588,853 and $0,
respectively)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS A
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 1996 E
SELECTED PER-SHARE DATA
Net asset value, beginning $ 17.12 $ 13.71 $ 14.04 $ 11.70 $ 10.74
of period
Income from Investment
Operations
Net investment income (loss) (.05) (.05) (.05) (.09) (.01)
D
Net realized and unrealized 4.38 3.92 1.17 2.64 .97
gain (loss)
Total from investment 4.33 3.87 1.12 2.55 .96
operations
Less Distributions
From net realized gain (1.40) (.46) (1.45) (.21) -
Net asset value, end of $ 20.05 $ 17.12 $ 13.71 $ 14.04 $ 11.70
period
TOTAL RETURN B, C 26.88% 29.17% 9.07% 22.24% 8.94%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 73,868 $ 25,834 $ 11,340 $ 4,670 $ 1,239
(000 omitted)
Ratio of expenses to average 1.18% A 1.17% 1.30% 1.62% F 1.56% A, F
net assets
Ratio of expenses to average 1.13% A, G 1.16% G 1.27% G 1.58% G 1.56% A
net assets after expense
reductions
Ratio of net investment (.50)% A (.33)% (.36)% (.71)% (.33)% A
income (loss) to average
net assets
Portfolio turnover rate 242% A 163% 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.
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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS T
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 1996 E
SELECTED PER-SHARE DATA
Net asset value, beginning $ 17.19 $ 13.75 $ 14.09 $ 11.70 $ 10.00
of period
Income from Investment
Operations
Net investment income (loss) (.07) (.08) (.07) (.07) (.03)
D
Net realized and unrealized 4.42 3.94 1.17 2.64 1.73
gain (loss)
Total from investment 4.35 3.86 1.10 2.57 1.70
operations
Less Distributions
From net realized gain (1.35) (.42) (1.44) (.18) -
Net asset value, end of $ 20.19 $ 17.19 $ 13.75 $ 14.09 $ 11.70
period
TOTAL RETURN B, C 26.82% 28.93% 8.87% 22.35% 17.00%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 900,043 $ 504,586 $ 367,035 $ 326,642 $ 187,040
(000 omitted)
Ratio of expenses to average 1.38% A 1.39% 1.42% 1.48% 1.60% A
net assets
Ratio of expenses to average 1.33% A, F 1.37% F 1.39% F 1.44% F 1.60% A
net assets after expense
reductions
Ratio of net investment (.70)% A (.55)% (.51)% (.53)% (.37)% A
income (loss) to average
net assets
Portfolio turnover rate 242% A 163% 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.
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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS B
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 1996 E
SELECTED PER-SHARE DATA
Net asset value, beginning $ 16.93 $ 13.58 $ 13.94 $ 11.61 $ 10.00
of period
Income from Investment
Operations
Net investment income (loss) (.12) (.16) (.14) (.14) (.10)
D
Net realized and unrealized 4.35 3.90 1.17 2.62 1.71
gain (loss)
Total from investment 4.23 3.74 1.03 2.48 1.61
operations
Less Distributions
From net realized gain (1.30) (.39) (1.39) (.15) -
Net asset value, end of $ 19.86 $ 16.93 $ 13.58 $ 13.94 $ 11.61
period
TOTAL RETURN B, C 26.44% 28.32% 8.38% 21.67% 16.10%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 255,013 $ 117,224 $ 82,317 $ 58,758 $ 32,727
(000 omitted)
Ratio of expenses to average 1.92% A 1.91% 1.94% 2.03% 2.38% A
net assets
Ratio of expenses to average 1.87% A, F 1.89% F 1.91% F 1.98% F 2.37% A, F
net assets after expense
reductions
Ratio of net investment (1.24)% A (1.07)% (1.02)% (1.08)% (1.14)% A
income (loss) to average
net assets
Portfolio turnover rate 242% A 163% 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.
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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS C
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 16.97 $ 13.64 $ 14.08 $ 14.16
period
Income from Investment
Operations
Net investment income (loss) D (.12) (.16) (.15) (.01)
Net realized and unrealized 4.35 3.90 1.15 (.07)
gain (loss)
Total from investment 4.23 3.74 1.00 (.08)
operations
Less Distributions
From net realized gain (1.33) (.41) (1.44) -
Net asset value, end of period $ 19.87 $ 16.97 $ 13.64 $ 14.08
TOTAL RETURN B, C 26.41% 28.24% 8.09% (.56)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 97,125 $ 36,592 $ 12,593 $ 345
(000 omitted)
Ratio of expenses to average 1.91% A 1.91% 2.15% F 2.50% A, F
net assets
Ratio of expenses to average 1.86% A, G 1.90% G 2.11% G 2.40% A, G
net assets after expense
reductions
Ratio of net investment (1.23)% A (1.07)% (1.16)% (1.07)% A
income (loss) to average net
assets
Portfolio turnover rate 242% A 163% 139% 208%
</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 (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.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
SIX MONTHS ENDED MAY 31, 2000 YEARS ENDED NOVEMBER 30,
(UNAUDITED) 1999 1998 1997 1996 E
SELECTED PER-SHARE DATA
Net asset value, beginning $ 17.28 $ 13.82 $ 14.12 $ 11.70 $ 10.00
of period
Income from Investment
Operations
Net investment income (loss) (.02) (.00) .01 .01 (.02)
D
Net realized and unrealized 4.43 3.95 1.18 2.63 1.72
gain (loss)
Total from investment 4.41 3.95 1.19 2.64 1.70
operations
Less Distributions
From net realized gain (1.43) (.49) (1.49) (.22) -
Net asset value, end of $ 20.26 $ 17.28 $ 13.82 $ 14.12 $ 11.70
period
TOTAL RETURN B, C 27.14% 29.59% 9.60% 23.04% 17.00%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 64,085 $ 49,010 $ 34,551 $ 30,542 $ 3,600
(000 omitted)
Ratio of expenses to average .86% A .86% .87% .91% 1.50% A, F
net assets
Ratio of expenses to average .80% A, G .84% G .84% G .84% G 1.50% A
net assets after expense
reductions
Ratio of net investment (.17)% A (.02)% .04% .08% (.27)% A
income (loss) to average
net assets
Portfolio turnover rate 242% A 163% 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.
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.
NOTES TO FINANCIAL STATEMENTS
For the period ended May 31, 2000 (Unaudited)
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. 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. Foreign securities are valued based
on quotations from the principal market in which such securities are
normally traded. If trading or events occurring in other markets after
the close of the principal market in which foreign securities are
traded, and before the close of the business of the fund, are expected
to materially affect the value of those securities, then they are
valued at their fair value taking this trading or these events into
account. Fair value is determined in good faith under consistently
applied procedures under the general supervision of the Board of
Trustees. 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. 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.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
FOREIGN CURRENCY TRANSLATION - CONTINUED
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.
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,
non-taxable dividends, net operating loss 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 net investment loss and accumulated undistributed net
realized gain (loss) on investments and foreign currency transactions
may include temporary book and tax basis differences that will reverse
in a subsequent period. Any taxable income or gain remaining at fiscal
year end is distributed in the following year.
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 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, Federal Agency,
or other obligations found to be satisfactory by FMR 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.
CENTRAL CASH FUNDS. Pursuant to an Exemptive Order issued by the SEC,
the fund may invest in the Taxable Central Cash Fund and the Central
Cash Collateral Fund (the Cash Funds) managed by Fidelity Investments
Money Management, Inc., an affiliate of FMR. The Cash Funds are
open-end money market funds available only to investment companies and
other accounts managed by FMR and its affiliates. The Cash Funds seek
preservation of capital, liquidity, and current income. Income
distributions from the Cash Funds are declared daily and paid monthly
from net interest income. Income distributions earned by the fund are
recorded as either interest income or security lending income in the
accompanying financial statements.
FUTURES CONTRACTS. The fund may use futures contracts to manage its
exposure to the stock market. 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. Futures contracts involve, to varying
degrees, risk of loss in excess of the futures variation margin
reflected in the Statement of Assets and Liabilities. The underlying
face amount at value of any open futures contracts at period end is
shown in the schedule of investments under the caption "Futures
Contracts." This amount reflects each contract's exposure to the
underlying instrument at period end. 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.
2. OPERATING POLICIES - CONTINUED
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, restricted securities (excluding 144A
issues) amounted to $16,500 or 0.0% of net assets.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $1,712,225,723 and $1,327,869,137, respectively.
The market value of futures contracts opened and closed during the
period amounted to $58,241,646 and $16,650,589, 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 .2167% 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 annualized rate of .58% of average net
assets.
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the
1940 Act, the Board of Trustees have adopted separate Distribution and
Service 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.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
DISTRIBUTION AND SERVICE PLAN - CONTINUED
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 $ 66,375 $ 45
CLASS T 1,947,030 7,685
CLASS B 996,744 747,708
CLASS C 373,894 217,012
$ 3,384,043 $ 972,450
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 is 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 $ 289,200 $ 123,103
CLASS T 540,194 189,203
CLASS B 140,636 140,636 *
CLASS C 16,999 16,999 *
$ 987,029 $ 469,941
* 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 (collectively referred to
as the transfer 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 $ 69,629 .26
CLASS T 830,526 .21
CLASS B 249,351 .25
CLASS C 88,667 .24
INSTITUTIONAL CLASS 58,961 .19
$ 1,297,134
* ANNUALIZED
ACCOUNTING AND SECURITY LENDING FEES. Fidelity Service Company, Inc.
maintains the fund's accounting records and administers the security
lending program. The security lending fee is based on the number and
duration of lending transactions. The accounting fee is based on the
level of average net assets for the month plus out-of-pocket expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $32,131 for the
period.
5. SECURITY LENDING.
The fund lends portfolio securities from time to time in order to earn
additional income. The fund receives collateral in the form of U.S.
Treasury obligations, letters of credit, and/or cash against the
loaned securities, and maintains collateral in an amount not less than
100% of the market value of the loaned securities during the period of
the loan. The market value of the loaned securities is determined at
the close of business of the fund and any additional required
collateral is delivered to the fund on the next business day. If the
borrower defaults on its obligation to return the securities loaned
because of insolvency or other reasons, the fund could experience
delays and costs in recovering the securities loaned or in gaining
access to the collateral. At period end, the value of the securities
loaned amounted to $29,432,029. The fund received cash collateral of
$29,880,950 which was invested in cash equivalents.
6. 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 $280,455 under this arrangement.
In addition, through arrangements with the fund's custodian and each
class' transfer agent, 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 $23,314 under the custodian
arrangement, and each applicable class' expenses were reduced as
follows under the transfer agent arrangements:
TRANSFER AGENT CREDITS
CLASS A $ 292
CLASS T 2,731
INSTITUTIONAL CLASS 134
$ 3,157
7. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED MAY 31, 2000 YEAR ENDED NOVEMBER 30, 1999
FROM NET REALIZED GAIN
Class A $ 2,232,639 $ 380,123
Class T 40,670,247 11,172,328
Class B 9,272,175 2,365,092
Class C 3,037,725 389,625
Institutional Class 4,112,708 1,230,073
Total $ 59,325,494 $ 15,537,241
</TABLE>
8. SHARE TRANSACTIONS.
Transactions for each class of shares for the periods were as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SHARES DOLLARS
SIX MONTHS ENDED MAY 31, YEAR ENDED NOVEMBER 30, SIX MONTHS ENDED MAY 31,
2000 1999 2000
CLASS A Shares sold 2,962,111 $ 50,362,941
2,384,749
Reinvestment of distributions 127,621 27,137 2,167,045
Shares redeemed (337,162) (2,307,129) (6,909,898)
Net increase (decrease) 2,175,208 682,119 $ 45,620,088
CLASS T Shares sold 25,688,541 22,494,339 $ 549,333,544
Reinvestment of distributions 2,246,986 782,801 38,423,840
Shares redeemed (12,712,766) (20,618,739) (263,703,584)
Net increase (decrease) 15,222,761 2,658,401 $ 324,053,800
CLASS B Shares sold 6,324,509 2,568,690 $ 135,185,784
Reinvestment of distributions 487,214 148,162 8,217,058
Shares redeemed (893,240) (1,852,174) (18,542,889)
Net increase (decrease) 5,918,483 864,678 $ 124,859,953
CLASS C Shares sold 3,814,664 2,450,666 $ 80,705,663
Reinvestment of distributions 163,130 26,885 2,753,930
Shares redeemed (1,246,726) (1,244,811) (25,352,522)
Net increase (decrease) 2,731,068 1,232,740 $ 58,107,071
INSTITUTIONAL CLASS Shares 1,222,242 1,472,039 $ 26,576,604
sold
Reinvestment of distributions 220,576 85,211 3,774,948
Shares redeemed (1,116,295) (1,220,854) (24,130,946)
Net increase (decrease) 326,523 336,396 $ 6,220,606
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
DOLLARS
YEAR ENDED NOVEMBER 30,
1999
CLASS A Shares sold $ 48,121,357
Reinvestment of distributions 362,550
Shares redeemed (37,764,534)
Net increase (decrease) $ 10,719,373
CLASS T Shares sold $ 352,225,906
Reinvestment of distributions 10,519,637
Shares redeemed (320,406,442)
Net increase (decrease) $ 42,339,101
CLASS B Shares sold $ 39,269,276
Reinvestment of distributions 1,970,339
Shares redeemed (27,126,558)
Net increase (decrease) $ 14,113,057
CLASS C Shares sold $ 37,791,832
Reinvestment of distributions 358,373
Shares redeemed (19,208,310)
Net increase (decrease) $ 18,941,895
INSTITUTIONAL CLASS Shares $ 22,609,330
sold
Reinvestment of distributions 1,145,239
Shares redeemed (19,036,774)
Net increase (decrease) $ 4,717,795
</TABLE>
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.)
Inc.
Fidelity Management & Research
(Far East) Inc.
Fidelity Investments Japan Ltd.
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Abigail P. Johnson, Vice President
David Felman, Vice President
Eric D. Roiter, Secretary
Robert A. Dwight, Treasurer
Maria F. Dwyer, Deputy Treasurer
John H. Costello, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
Donald J. Kirk *
Ned C. Lautenbach *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
* INDEPENDENT TRUSTEES
ADVISORY BOARD
J. Michael Cook
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 Telecommunications & Utilities Growth Fund
GROWTH FUNDS
Fidelity Advisor Latin America Fund
Fidelity Advisor Emerging Asia 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 (registered trademark)
Growth Fund
Fidelity Advisor Small Cap Fund
Fidelity Advisor Value Strategies Fund
Fidelity Advisor Mid Cap Fund
Fidelity Advisor Dynamic Capital Appreciation Fund
Fidelity Advisor Equity Growth Fund
Fidelity Advisor Large Cap Fund
Fidelity Advisor Dividend Growth Fund
Fidelity Advisor Growth
Opportunities Fund
MCI-SANN-0700 106139
1.704678.102
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 High Income 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
(2_FIDELITY_LOGOS)(registered trademark)
