FIDELITY ADVISOR SERIES 8, N-30D, 1994-11-22

FIDELITY ADVISOR SERIES 8
N-30D, 1994-11-22

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(2_FIDELITY_LOGOS)FIDELITY ADVISOR
(registered trademark)

STRATEGIC OPPORTUNITIES
FUND - CLASS A & CLASS B
ANNUAL REPORT
SEPTEMBER 30, 1994
CONTENTS

PRESIDENT'S MESSAGE 3 Ned Johnson on stock market
strategies.

PERFORMANCE 4 How the fund has done over time.

FUND TALK 9 The manager's review of fund
performance, strategy and outlook.

INVESTMENT CHANGES 12 A summary of major shifts in the
fund's investments over the past six
months.

INVESTMENTS 13 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 29 Notes to the financial statements.

REPORT OF INDEPENDENT 34 The auditor's opinion.
ACCOUNTANTS

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, THE
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT
RISK,
INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. 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

DEAR SHAREHOLDER:
The unsettling period that began for investors when the Federal Reserve
Board raised short-term interest rates in February has continued through
the third quarter of 1994. The Board raised the federal funds rate - the
rate banks charge each other for overnight loans - five times from February
through August, taking it from 3.00% to 4.75%. The Fed rate hikes were
intended to forestall inflation that could result from an improving U.S.
economy, and they led to below-average returns for many stocks and negative
returns for many bond investments.
The volatility we have witnessed this year follows a period in which there
was a nearly perfect investing environment. Although there was a
late-summer rally in stocks and, to a lesser extent in bond markets, it is
impossible to predict where interest rates might go or what might happen in
the markets in the months ahead. That's why it probably is a good time to
again review your investment portfolio and how well it matches your goals.
If you can leave your money invested over the long term, you can avoid much
of the volatility that generally accompanies the stock market in the short
term, as we have been witnessing this year. You also can help to manage
risk through diversification of investments. A stock fund is already
diversified because it invests in many issues. You can diversify even
further by placing some of your money in several different stock funds or
in other investment categories, such as bonds.
If you have a short investment time horizon, you might want to consider
moving some of your investment into a money market fund, which seeks income
and a stable share price by investing in high-quality, short-term
investments. As with any mutual fund, of course, there is no assurance that
a money market fund will achieve its goal, and it is important to remember
that money market funds are not insured by any agency of the U.S.
government.
Finally, no matter what your investment horizon or portfolio diversity, it
makes good sense to follow a regular investment plan - investing a certain
amount of money at the same time each month or quarter - and to review your
portfolio periodically, as we have discussed here. A periodic investment
plan will not, of course, assure a profit or protect against a loss.
Remember to contact your investment professional if you need help with your
investments.
Best regards,
Edward C. Johnson 3d
ADVISOR STRATEGIC OPPORTUNITIES FUND - CLASS A
PERFORMANCE: THE BOTTOM LINE

There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each
performance figure includes changes in a fund's share price, plus
reinvestment of any dividends (or income) and capital gains (the profits
the fund earns when it sells securities that have grown in value). On
August 20, 1986, the fund began offering Class A shares. All performance
information for Class A prior to August 20, 1986 does not reflect Class A's
12b-1 fee and revised transfer agent fee arrangements, which if included
would lower Class A's performance.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED SEPTEMBER 30, 1994 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

Advisor Strategic Opportunities - Class A -2.24% 55.27% 301.66%

Advisor Strategic Opportunities - Class A
(incl. 4.75% sales charge) -6.88% 47.90% 282.58%

S&P 500(registered trademark) 3.68% 54.92% 290.86%

Average Capital Appreciation Fund 0.31% 55.10% 232.14%

CUMULATIVE TOTAL RETURNS show Class A's performance in percentage terms
over a set period - in this case, one year, five years, or 10 years. For
example, if you invested $1,000 in a fund that then had a 5% return, you
would end up with $1,050. You can compare Class A's returns to the
performance of the Standard & Poor's Composite Index of 500 Stocks - a
common proxy for the U.S. stock market. You can also compare them to the
average capital appreciation fund, which reflects the performance of 154
capital appreciation funds with similar objectives tracked by Lipper
Analytical Services. Both benchmarks include reinvested dividends and
capital gains, if any, and exclude the effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED SEPTEMBER 30, 1994 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

Advisor Strategic Opportunities - Class A -2.24% 9.20% 14.92%

Advisor Strategic Opportunities - Class A
(incl. 4.75% sales charge) -6.88% 8.14% 14.36%

S&P 500 3.68% 9.15% 14.60%

Average Capital Appreciation Fund 0.31% 8.81% 11.98%

AVERAGE ANNUAL TOTAL RETURNS take Class A shares' actual (or cumulative)
return and show you what would have happened if the Class A shares had
performed at a constant rate each year.
$10,000 OVER 10 YEARS
Adv.Spec.Sit.: Adv.Class(1SS) (174)Standard & Poor's
09/30/84 9525.00 10000.00
10/31/84 9818.08 10039.00
11/30/84 9555.22 9926.56
12/31/84 9608.16 10188.62
01/31/85 10658.09 10982.32
02/28/85 10649.26 11117.40
03/31/85 10490.45 11125.18
04/30/85 10446.34 11115.17
05/31/85 11081.59 11757.63
06/30/85 11328.63 11942.22
07/31/85 11531.56 11924.31
08/31/85 11663.90 11822.95
09/30/85 11205.11 11452.89
10/31/85 11831.54 11982.02
11/30/85 12599.02 12803.98
12/31/85 13216.23 13423.70
01/31/86 13804.06 13498.87
02/28/86 14969.91 14508.58
03/31/86 16047.58 15318.16
04/30/86 15773.27 15145.07
05/31/86 16086.77 15950.79
06/30/86 16948.91 16220.35
07/31/86 16410.08 15313.64
08/31/86 17517.14 16449.91
09/30/86 16370.89 15089.50
10/31/86 17007.70 15960.17
11/30/86 17271.27 16348.00
12/31/86 16906.24 15931.12
01/31/87 18293.36 18077.05
02/28/87 18481.09 18791.09
03/31/87 19023.43 19334.15
04/30/87 18460.23 19162.08
05/31/87 18637.53 19328.79
06/30/87 19221.59 20304.89
07/31/87 19993.37 21334.35
08/31/87 20389.69 22130.12
09/30/87 19878.65 21645.47
10/31/87 16228.32 16983.04
11/30/87 15487.82 15583.63
12/31/87 15835.43 16769.55
01/31/88 17076.00 17475.55
02/29/88 17635.47 18289.91
03/31/88 17355.73 17724.75
04/30/88 17465.19 17921.49
05/31/88 17769.25 18077.41
06/30/88 18985.49 18907.16
07/31/88 18876.03 18835.32
08/31/88 18292.23 18194.92
09/30/88 18888.19 18970.02
10/31/88 19216.58 19497.39
11/30/88 19338.20 19218.57
12/31/88 19358.56 19554.90
01/31/89 20455.04 20986.32
02/28/89 20366.82 20463.76
03/31/89 20795.33 20940.56
04/30/89 21589.33 22027.38
05/31/89 22584.99 22919.49
06/30/89 22761.43 22788.85
07/31/89 24324.23 24846.68
08/31/89 24639.31 25333.67
09/30/89 24639.31 25229.81
10/31/89 24236.01 24644.47
11/30/89 24891.38 25147.22
12/31/89 25669.05 25750.75
01/31/90 23971.60 24022.88
02/28/90 24101.17 24332.77
03/31/90 24101.17 24977.59
04/30/90 23116.39 24353.15
05/31/90 23867.94 26727.59
06/30/90 24101.17 26545.84
07/31/90 24165.96 26460.89
08/31/90 22468.51 24068.83
09/30/90 22300.06 22896.67
10/31/90 22287.11 22798.22
11/30/90 23271.89 24270.98
12/31/90 23828.52 24948.14
01/31/91 24598.49 26035.88
02/28/91 26070.88 27897.45
03/31/91 26894.89 28572.57
04/30/91 27259.61 28641.14
05/31/91 28232.20 29878.44
06/30/91 27340.66 28510.01
07/31/91 28164.66 29838.57
08/31/91 28772.53 30545.75
09/30/91 28880.60 30035.63
10/31/91 28299.74 30438.11
11/30/91 27610.82 29211.45
12/31/91 29327.97 32553.24
01/31/92 29375.55 31947.75
02/29/92 29946.57 32363.08
03/31/92 29185.22 31732.00
04/30/92 29740.37 32664.92
05/31/92 30707.92 32824.97
06/30/92 30707.92 32335.88
07/31/92 31659.61 33658.42
08/31/92 31104.46 32968.42
09/30/92 30977.57 33357.45
10/31/92 31231.35 33474.20
11/30/92 32563.72 34615.67
12/31/92 33103.22 35041.44
01/31/93 33728.80 35335.79
02/28/93 34684.53 35816.36
03/31/93 35761.91 36572.08
04/30/93 35049.45 35687.04
05/31/93 35866.17 36643.45
06/30/93 36161.58 36749.72
07/31/93 36926.17 36602.72
08/31/93 39237.31 37989.96
09/30/93 39133.05 37697.44
10/31/93 40366.82 38477.78
11/30/93 38663.87 38112.24
12/31/93 39868.25 38573.40
01/31/94 40213.27 39884.89
02/28/94 38775.71 38804.01
03/31/94 37280.65 37112.16
04/30/94 37587.33 37587.19
05/31/94 37664.00 38203.62
06/30/94 37664.00 37267.63
07/31/94 38564.87 38490.01
08/31/94 38794.88 40068.10
09/30/94 38239.02 39086.43

$10,000 OVER 10 YEARS: Let's say you invested $10,000 in Fidelity Advisor
Strategic Opportunities Fund - Class A on September 30, 1984, and paid a
4.75% sales charge. As the chart shows, by September 30, 1994, the value of
your investment would have grown to $38,258 - a 282.58% increase on your
initial investment. For comparison, look at how the S&P 500 did over the
same period. With dividends reinvested, the same $10,000 investment would
have grown to $39,086 - a 290.86% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
growth in the long run and
volatility in the short run. In
turn, the share price and
return of a fund that invests in
stocks will vary. That means if
you sell your shares during a
market downturn, you might
lose money. But if you can
ride out the market's ups and
downs, you may have a gain.
(checkmark)
ADVISOR STRATEGIC OPPORTUNITIES FUND - CLASS B
PERFORMANCE: THE BOTTOM LINE

There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each
performance figure includes changes in a fund's share price, plus
reinvestment of any dividends (or income) and capital gains (the profits
the fund earns when it sells securities that have grown in value). On June
30, 1994, the fund began offering Class B shares. All performance
information for Class B prior to June 30, 1994 does not reflect Class B's
12b-1 fee and revised transfer agent fee arrangements, which if included
would lower Class B's performance. If Fidelity had not reimbursed certain
Class B expenses during the periods shown, the total returns would have
been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED SEPTEMBER 30, 1994 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

Advisor Strategic Opportunities - Class B -2.14% 55.43% 302.06%

Advisor Strategic Opportunities - Class B
(incl. contingent deferred sales charge) -5.69% 54.43% 302.06%

S&P 500(registered trademark) 3.68% 54.92% 290.86%

Average Capital Appreciation Fund 0.31% 55.10% 232.14%

CUMULATIVE TOTAL RETURNS show Class B's performance in percentage terms
over a set period - in this case, one year, five years, or 10 years. For
example, if you invested $1,000 in a fund that then had a 5% return, you
would end up with $1,050. You can compare Class B's returns to the
performance of the Standard & Poor's Composite Index of 500 Stocks - a
common proxy for the U.S. stock market. You can also compare them to the
average capital appreciation fund, which reflects the performance of 154
capital appreciation funds with similar objectives tracked by Lipper
Analytical Services. Both benchmarks include reinvested dividends and
capital gains, if any, and exclude the effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED SEPTEMBER 30, 1994 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

Advisor Strategic Opportunities - Class B -2.14% 9.22% 14.93%

Advisor Strategic Opportunities - Class B
(incl. contingent deferred sales charge) -5.69% 9.08% 14.93%

S&P 500 3.68% 9.15% 14.60%

Average Capital Appreciation Fund 0.31% 8.81% 11.98%

AVERAGE ANNUAL TOTAL RETURNS take Class B shares' actual (or cumulative)
return and show you what would have happened if the Class B shares had
performed at a constant rate each year.
$10,000 OVER 10 YEARS
Advisor Strat. Opps.-Class B Standard & Poor's 500 Stock
09/30/84 10000.00 10000.00
10/31/84 10307.69 10039.00
11/30/84 10031.72 9926.56
12/31/84 10087.30 10188.62
01/31/85 11189.58 10982.32
02/28/85 11180.32 11117.40
03/31/85 11013.59 11125.18
04/30/85 10967.27 11115.17
05/31/85 11634.20 11757.63
06/30/85 11893.56 11942.22
07/31/85 12106.61 11924.31
08/31/85 12245.55 11822.95
09/30/85 11763.88 11452.89
10/31/85 12421.55 11982.02
11/30/85 13227.31 12803.98
12/31/85 13875.30 13423.70
01/31/86 14492.44 13498.87
02/28/86 15716.43 14508.58
03/31/86 16847.85 15318.16
04/30/86 16559.85 15145.07
05/31/86 16888.99 15950.79
06/30/86 17794.12 16220.35
07/31/86 17228.41 15313.64
08/31/86 18390.69 16449.91
09/30/86 17187.27 15089.50
10/31/86 17855.84 15960.17
11/30/86 18132.55 16348.00
12/31/86 17749.32 15931.12
01/31/87 19205.62 18077.05
02/28/87 19402.71 18791.09
03/31/87 19972.09 19334.15
04/30/87 19380.81 19162.08
05/31/87 19566.95 19328.79
06/30/87 20180.13 20304.89
07/31/87 20990.40 21334.35
08/31/87 21406.49 22130.12
09/30/87 20869.96 21645.47
10/31/87 17037.59 16983.04
11/30/87 16260.17 15583.63
12/31/87 16625.11 16769.55
01/31/88 17927.54 17475.55
02/29/88 18514.91 18289.91
03/31/88 18221.22 17724.75
04/30/88 18336.14 17921.49
05/31/88 18655.36 18077.41
06/30/88 19932.25 18907.16
07/31/88 19817.33 18835.32
08/31/88 19204.43 18194.92
09/30/88 19830.10 18970.02
10/31/88 20174.86 19497.39
11/30/88 20302.55 19218.57
12/31/88 20323.92 19554.90
01/31/89 21475.08 20986.32
02/28/89 21382.46 20463.76
03/31/89 21832.34 20940.56
04/30/89 22665.94 22027.38
05/31/89 23711.24 22919.49
06/30/89 23896.49 22788.85
07/31/89 25537.22 24846.68
08/31/89 25868.01 25333.67
09/30/89 25868.01 25229.81
10/31/89 25444.60 24644.47
11/30/89 26132.65 25147.22
12/31/89 26949.09 25750.75
01/31/90 25166.99 24022.88
02/28/90 25303.03 24332.77
03/31/90 25303.03 24977.59
04/30/90 24269.14 24353.15
05/31/90 25058.16 26727.59
06/30/90 25303.03 26545.84
07/31/90 25371.05 26460.89
08/31/90 23588.95 24068.83
09/30/90 23412.11 22896.67
10/31/90 23398.50 22798.22
11/30/90 24432.39 24270.98
12/31/90 25016.77 24948.14
01/31/91 25825.13 26035.88
02/28/91 27370.95 27897.45
03/31/91 28236.04 28572.57
04/30/91 28618.95 28641.14
05/31/91 29640.05 29878.44
06/30/91 28704.04 28510.01
07/31/91 29569.14 29838.57
08/31/91 30207.32 30545.75
09/30/91 30320.77 30035.63
10/31/91 29710.95 30438.11
11/30/91 28987.68 29211.45
12/31/91 30790.45 32553.24
01/31/92 30840.41 31947.75
02/29/92 31439.90 32363.08
03/31/92 30640.58 31732.00
04/30/92 31223.42 32664.92
05/31/92 32239.22 32824.97
06/30/92 32239.22 32335.88
07/31/92 33238.37 33658.42
08/31/92 32655.53 32968.42
09/30/92 32522.31 33357.45
10/31/92 32788.75 33474.20
11/30/92 34187.56 34615.67
12/31/92 34753.96 35041.44
01/31/93 35410.73 35335.79
02/28/93 36414.13 35816.36
03/31/93 37545.23 36572.08
04/30/93 36797.24 35687.04
05/31/93 37654.69 36643.45
06/30/93 37964.83 36749.72
07/31/93 38767.54 36602.72
08/31/93 41193.94 37989.96
09/30/93 41084.47 37697.44
10/31/93 42379.77 38477.78
11/30/93 40591.90 38112.24
12/31/93 41856.34 38573.40
01/31/94 42218.56 39884.89
02/28/94 40709.31 38804.01
03/31/94 39139.70 37112.16
04/30/94 39461.67 37587.19
05/31/94 39542.17 38203.62
06/30/94 39542.17 37267.63
07/31/94 40528.21 38490.01
08/31/94 40749.56 40068.10
09/30/94 40206.23 39086.43
$10,000 OVER 10 YEARS: Let's say you invested $10,000 in Fidelity Advisor
Strategic Opportunities Fund - Class B on September 30, 1984. As the chart
shows, by September 30, 1994, the value of your investment would have grown
to $40,206 - a 302.06% increase on your initial investment. For comparison,
look at how the S&P 500 did over the same period. With dividends
reinvested, the same $10,000 investment would have grown to $39,086 - a
290.86% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
growth in the long run and
volatility in the short run. In
turn, the share price and
return of a fund that invests in
stocks will vary. That means if
you sell your shares during a
market downturn, you might
lose money. But if you can
ride out the market's ups and
downs, you may have a gain.
(checkmark)
The fund commenced operations on December 31, 1983 by offering Initial
Shares.
CUMULATIVE TOTAL RETURNS

<TABLE>
<CAPTION>
<S> <C> <C> <C>
PERIODS ENDED SEPTEMBER 30, 1994 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

Advisor Strategic Opportunities Fund - Initial -1.51% 59.70% 318.54%
Shares

</TABLE>

AVERAGE ANNUAL TOTAL RETURNS

<TABLE>
<CAPTION>
<S> <C> <C> <C>
PERIODS ENDED SEPTEMBER 30, 1994 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

Advisor Strategic Opportunities Fund - Initial -1.51% 9.81% 15.39%
Shares

</TABLE>

FUND TALK: THE MANAGER'S OVERVIEW

MARKET RECAP
Rising interest rates contributed
to below average returns in the
U.S. stock market during the 12
months ended September 30,
1994. The Standard & Poor's
Composite Index of 500 stocks
finished the 12-month period with
a total return of 3.68% - below
its historical average of more than
10%. After three months of
steady gains, stocks stumbled
from February through June
1994. During that time, the
Federal Reserve Board raised
short-term interest rates four
times in an effort to curb possible
future inflation triggered by a
strengthening economy. Higher
rates hurt stocks because they
raise the cost of borrowing for
companies and consumers, often
dampening corporate profits. In
addition, higher rates often make
bonds and other fixed-income
investments more attractive
relative to stocks. Despite a fifth
Fed rate hike in August, the
market rallied from July through
mid-September, fueled by
strengthening corporate earnings
and a flurry of merger and
acquisition activity. Overseas,
results were mixed. Japanese
stocks surged in early 1994, only
to stall over the summer. After
suffering corrections early in the
year, several emerging markets
- - most notably Brazil -
bounced back strongly in July
and August. The Morgan Stanley
EAFE (Europe, Australia, Far
East) Index returned 9.83% for
the 12 months ended September
30, while the Morgan Stanley
Emerging Markets Free Index
was up 43.55% during the same
period.
An interview with Daniel R. Frank,
Portfolio Manager of Fidelity
Advisor Strategic Opportunities Fund
Q. DAN, HOW HAS THE FUND PERFORMED OVER THE PAST YEAR?
A. Not as well as I would have liked. For the year ended September 30,
1994, the Class A shares had a total return of -2.24%, and Class B shares
had a total return of -2.14%, lagging the average capital appreciation
fund, which returned 0.31% for the period, according
to Lipper Analytical Services.
Q. WHY DID IT UNDERPERFORM MOST OF ITS PEERS?
A. Mostly because it had a large position in long-duration U.S. Treasury
securities. These securities performed poorly in 1994 due to rising
interest rates and correspondingly reduced bond prices. The fund was also
hurt because it had limited exposure to late-cycle cyclical stocks, which
performed well over the period, especially during 1994. Late-cycle
cyclicals - such as paper, steel, chemicals and aluminum - typically turn
in their strongest performance late in an economic upturn, which is where
we appeared to be at the end of the period.
Q. YOUR TOP 10 STOCKS REMAIN DOMINATED BY REGIONAL BELL OPERATING COMPANIES
(RBOCS), WHICH MADE UP ABOUT 24% OF THE FUND AT THE END OF THE PERIOD. HAS
YOUR STAKE IN THESE COMPANIES PAID OFF?
A. As I've suggested in the past, I see RBOCs as a long-term investment
opportunity. Their outlook is good domestically - with many RBOCs cutting
costs and the industry becoming increasingly deregulated, which should
encourage growth. They also have attractive overseas business
opportunities as many developed, as well as developing, countries are
upgrading their phone systems to improve their communications capabilities.
The U.S. regional Bells are major investors in these global opportunities.
I should also point out that these phone companies aren't as susceptible to
changes in interest rates as other utilities, such as electric companies.
In fact, I think that in the future RBOCs will be viewed less as utilities
and more like normal global businesses.
Q. FUNDAMENTALLY, HOW DID THE RBOCS PERFORM OVER THE PERIOD?
A. Over the past year, BellSouth, Ameritech, Bell Atlantic and NYNEX have
been successfully lobbying to reduce state rate restrictions that could
impair their profitability. In addition, they've cut costs, rolled out new
products and services for both consumer and business markets, expanded
cellular operations and pursued global opportunities. As a result, I
believe they're well positioned for long-term growth.
Q. LET'S DISCUSS SOME OTHER TRENDS IN THE FUND. OVER THE PAST YEAR, THE
FUND'S INVESTMENT IN FINANCIAL STOCKS INCREASED DRAMATICALLY - FROM ABOUT
3% TO AROUND 38%. WHAT'S BEHIND THIS?
A. My strategy was to increase the fund's investment in financial companies
that I thought would emerge as winners in the consolidating banking
industry. Over the past year, the fund has targeted small banks and savings
& loans across the country, focusing on well-capitalized institutions with
strong local market presence that are healthy and possibly ripe for a
takeover. In addition, I've paid special attention to companies with heavy
insider ownership, recent insider purchase activity and ongoing stock
repurchase activity because I think they're working to enhance their stock
value.
Q. HOW ABOUT THE FUND'S DECREASE IN FOREIGN HOLDINGS . . .
A. I significantly reduced its foreign investments - from about 18% to
around 5% of the fund - over the period. This decrease largely reflects my
decision to sell most of the fund's Hong Kong-based stocks, the bulk of its
foreign holdings, this January. While Hong Kong performed well throughout
1992 and 1993, it collapsed at the beginning of 1994. The Southeast Asian
markets in general and Hong Kong in particular were inflated by a real
estate-driven mania that I felt was unsustainable.
Q. DAN, DO YOU REGRET ANY OF YOUR INVESTMENT DECISIONS OVER THE PAST YEAR?
A. Sure. I wish I hadn't owned any bonds and that the fund was 100%
invested in chemicals, aluminum, paper and steel, which were all excellent
performers. I should point out that every year for the past decade that
I've run the fund, I've made some investment decisions I've regretted.
However, I've learned not to adjust my overall philosophy of investing to
accommodate the concept "du jour," but rather to invest the fund's assets
for the long term, seeking real value, avoiding fads, and, hopefully,
providing above average long-term returns with below-
average risk.
Q. WHAT'S YOUR OUTLOOK FOR THE FUND OVER THE NEXT YEAR?
A. It's hard, if not impossible, to make predictions about the markets over
the next year. However, I do plan to continue to seek out individual
companies whose stock prices represent both value and opportunity.

FUND FACTS
GOAL: to increase the value
of the fund's shares over the
long term by investing in
securities believed to be
involved in a special situation
START DATE: December 31,
1983
SIZE: as of September 30,
1994, more than $413 million
MANAGER: Daniel R. Frank,
since inception; joined
Fidelity in 1979
(checkmark)
DAN FRANK ON THE BALANCE OF
STOCKS AND BONDS IN
THE FUND
"Despite the way some of the
numbers may read, the fund
didn't shift out of bonds during
the past year. In fact, its bond
position - with the exception
of some bankruptcy bonds,
such as Macy's, which were
sold or converted to equity -
remained fairly constant.
What changed was the
combination of reduced bond
prices and increasing fund
assets. As a result of this
situation, the percentage
of the fund's assets in bonds
has declined. However, when
the economy begins to show
clear signs of slowing down, I
could envision committing
more assets to the bond
portion of the fund."
(solid bullet) The fund sold a large part
of its energy stocks - which
were mostly oil refineries - at
a profit early in the year. As a
result, the fund's energy
holdings fell from
approximately 11% at the
beginning of the period to
about 3% at the end of it.
(solid bullet) At the end of the period, the
fund had no investments in
derivative instruments.

INVESTMENT CHANGES

TOP TEN STOCKS AS OF SEPTEMBER 30, 1994
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE STOCKS
SIX MONTHS AGO

BellSouth Corp. 4.5 5.1

Ameritech Corp. 4.4 4.1

I-Stat Corporation 4.4 1.2

Bell Atlantic Corp. 4.0 3.8

Southwestern Bell Corp. 3.5 4.2

NYNEX Corp. 3.4 3.0

U.S. West, Inc. 2.6 4.6

Viacom, Inc. (non-vtg.) 2.5 0.4

Regis Corporation 1.3 1.2

Kinder-Care Learning Centers, 1.1 1.1
Inc.

TOP FIVE INDUSTRIES AS OF SEPTEMBER 30, 1994
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE INDUSTRIES
SIX MONTHS AGO

Finance 38.4 12.2

Utilities 24.7 27.3

Media & Leisure 5.0 3.2

Health 4.4 1.7

Services 3.3 6.2

ASSET ALLOCATION
AS OF SEPTEMBER 30, 1994* AS OF MARCH 31, 1994**
Row: 1, Col: 1, Value: 1.3
Row: 1, Col: 2, Value: 16.5
Row: 1, Col: 3, Value: 42.2
Row: 1, Col: 4, Value: 40.0
Row: 1, Col: 1, Value: 16.2
Row: 1, Col: 2, Value: 20.4
Row: 1, Col: 3, Value: 30.0
Row: 1, Col: 4, Value: 33.4
Stocks 82.2%
Bonds 16.5%
Short-term
investments 1.3%
FOREIGN
INVESTMENTS 4.8%
Stocks 63.4%
Bonds 20.4%
Short-term
investments 16.2%
FOREIGN
INVESTMENTS 9.3%
*
**
INVESTMENTS SEPTEMBER 30, 1994

Showing Percentage of Total Value of Investment in Securities

COMMON STOCKS - 82.2%
SHARES VALUE (NOTE 1)
BASIC INDUSTRIES - 0.4%
PACKAGING & CONTAINERS - 0.4%
M.C. Packaging 4,000,000 $ 1,863,644
CONSTRUCTION & REAL ESTATE - 0.5%
CONSTRUCTION - 0.5%
Centex Corp. 32,000 740,000
Kaufman & Broad Home Corp. 50,000 681,250
Pulte Corp. 25,000 543,750
TOTAL CONSTRUCTION & REAL ESTATE 1,965,000
DURABLES - 0.4%
TEXTILES & APPAREL - 0.4%
Springs Industries, Inc. Class A 30,000 1,080,000
Warnaco Group, Inc. Class A (a) 18,000 627,750
TOTAL DURABLES 1,707,750
ENERGY - 2.6%
COAL - 0.9%
MAPCO, Inc. 65,000 3,640,000
ENERGY SERVICES - 0.6%
Baker Hughes, Inc. 30,000 558,750
Halliburton Co. 20,000 630,000
Schlumberger Ltd. 20,000 1,087,500
2,276,250
OIL & GAS - 1.1%
Box Energy Corp. Class B (a) 96,700 870,300
Imperial Oil Ltd. 60,000 1,914,704
Shell Canada Ltd. Class A 50,000 1,646,757
4,431,761
TOTAL ENERGY 10,348,011
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
FINANCE - 37.9%
BANKS - 22.3%
Amcore Financial, Inc. 47,000 $ 998,750
Ameriana Bancorp 10,000 155,000
Arrow Financial Corp. 18,000 294,750
Associated Bancorporation 20,000 705,000
BB & T Financial Corp. 66,637 1,932,473
BMJ Financial Corp. (a) 55,000 646,250
Banc One Corp. 40,000 1,195,000
BancFirst Corp. 14,500 221,125
Bancorpsouth, Inc. 27,000 924,750
BanPonce Corp. 5,000 165,625
CCB Financial Corp. 61,000 2,653,500
Cape Cod Bank & Trust Co. 13,000 357,500
Carolina First Corp. 35,000 533,750
Central Fidelity Banks, Inc. 70,000 2,170,000
Central Jersey Bancorp 32,000 1,028,000
Centura Banks, Inc. 40,000 970,000
Citizens Bancorp of Maryland 30,000 907,500
City National Corp. (a) 185,000 2,035,000
Colonial BancGroup, Inc. Class A 21,300 505,875
Comerica, Inc. 37,900 1,051,725
Commerce Bancorp, Inc. 22,000 462,000
Commerce Bancshares, Inc. 10,000 297,500
Community First Bankshares, Inc. 20,000 315,000
Compass Bancshares, Inc. 62,000 1,464,750
CoreStates Financial Corp. 60,000 1,597,500
Crestar Financial Corp. 52,384 2,390,020
Cullen Frost Bankers, Inc. 20,000 762,500
Dauphin Deposit Corp. 62,000 1,550,000
Deposit Guaranty Corp. 62,000 1,999,500
Evergreen Bancorp, Inc. 37,000 647,500
F & M Bancorporation, Inc. 20,000 455,000
F & M National Corp. 56,000 966,000
FNB Rochester Corp. (a) 100,000 662,500
Fifth Third Bancorp 18,000 940,500
First Bancorporation of Ohio, Inc. 22,000 594,000
First American Corp. 70,432 2,324,256
First of America Bank Corp. 32,000 1,128,000
First Citizens Bancshares, Inc. 30,000 1,365,000
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
FINANCE - CONTINUED
BANKS - CONTINUED
First Commerce Corp. 105,000 $ 2,808,750
First Commercial Corp. 50,000 1,181,250
First Commonwealth Financial Corp. 10,000 151,250
First Merchants Corp. 8,500 276,250
First National Bancorp 15,000 311,250
First Security Corp. 36,000 1,044,000
First Southern Bancorp, Inc. 6,000 165,000
First Tennessee National Corp. 21,000 945,000
First Virginia Banks, Inc. 26,000 997,750
First Western Bancorp 10,000 275,000
Firstbank of Illinois Co. 31,000 1,189,625
Firstier, Inc. 15,000 495,000
Fort Wayne National Corp. 36,000 1,111,500
Fourth Financial Corp. 45,000 1,361,250
Integra Financial Corp. 36,000 1,624,500
Jefferson Bankshares, Inc. 46,000 960,250
Keystone Financial, Inc. 56,000 1,624,000
Liberty Bancorporation, Inc. 20,000 670,000
MLF Bancorp, Inc. (a) 35,000 555,625
Magna Group, Inc. 15,000 307,500
Mercantile Bankshares Corp. 81,000 1,792,125
Michigan National Corp. 27,000 2,058,750
Mid Am, Inc. 22,000 354,750
NBD Bancorp, Inc. 60,000 1,717,500
Norwalk Savings Society (a) 15,000 223,125
Old Kent Financial Corp. 21,000 672,000
ONBANCorp, Inc. 66,000 1,798,500
One Valley Bancorp of West Virginia, Inc. 52,000 1,511,250
Peoples Heritage Financial Group, Inc. 15,000 221,250
Premier Bankshares Corp. (a) 15,000 262,500
Premier Bancorp, Inc. 68,000 1,139,000
RS Financial Corp. 15,000 345,000
Republic Bancorp 20,000 272,500
Riggs National Corp. (a) 290,000 2,954,375
River Forest Bancorp 29,000 1,007,750
St. Francis Capital Corp. (a) 80,000 1,440,000
Southern National Corp. 65,000 1,340,625
T R Financial Corp. (a) 40,000 610,000
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
FINANCE - CONTINUED
BANKS - CONTINUED
Trans Financial Bancorp, Inc. 25,000 $ 400,000
Trustco Bank Corp. 11,000 233,750
Trustmark Corp. 14,000 273,000
UAB Financial Corp. 47,000 1,527,500
Union Bank of San Francisco 20,000 615,000
United Carolina Bancshares Corp. 103,000 2,678,000
United Bankshares, Inc. 25,000 612,500
United Financial Corp. of South Carolina 50,000 737,500
U.S. Bancorp 53,000 1,351,500
U.S. Trust Corp. 33,000 1,732,500
Victoria Bankshares, Inc. 33,000 891,000
Wachovia Corp. 61,000 1,967,250
Wilmington Trust Corp. 58,000 1,508,000
91,676,349
CLOSED END INVESTMENT COMPANY - 0.1%
Shanghai International Growth Investors (a) 48,000 280,800
CREDIT & OTHER FINANCE - 0.2%
Rochester Community Savings Bank (a) 36,000 697,500
SAVINGS & LOANS - 15.2%
Advantage Bancorp (a) 30,000 945,000
Albank Financial Corp. 30,000 727,500
American Federal Bank FSB 165,000 2,021,250
American Savings of Florida FSB (a) 220,000 4,042,500
Anchor Bancorp, Inc. (a) 205,000 3,305,625
Anchor Bancorp of Wisconsin, Inc. 25,000 756,250
Bankunited Financial Corp. Class A 25,000 156,250
Bedford Bancshares, Inc. (a) 40,000 480,000
Bell Bancorp, Inc. 39,000 989,625
Boston Bancorp 61,000 2,119,750
Braintree Savings Bank 37,000 481,000
CSF Holdings, Inc. Class B (a) 13,000 338,000
California Federal Bank Class A (a) 145,001 1,957,514
Central Indiana Bancorp 9,000 247,500
Charter One Financial Corp. 51,200 1,049,600
Charter FSB Bancorp, Inc. 10,000 315,000
Charter Federal Savings Bank 5,000 58,750
Coast Savings Financial, Inc. (a) 50,000 887,500
Coastal Bancorp, Inc. 120,000 2,265,000
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
FINANCE - CONTINUED
SAVINGS & LOANS - CONTINUED
Coastal Financial Corp. 5,000 $ 100,000
Collective Bancorp, Inc. 45,000 883,125
Columbia First Federal Savings & Loan Association (a) 28,000 1,109,500
Commercial Federal Corp. (a) 98,000 2,425,500
Coral Gables Fedcorp, Inc. (a) 180,000 3,442,500
Dime Bancorp, Inc. (a) 93,000 895,125
Dime Financial Corp. (a) 37,000 407,000
FCB Financial Corp. 17,000 259,250
FSB Financial Corp. (a) 10,000 133,750
Fidelity Bancorp, Inc. (a) 26,000 318,500
Fidelity Federal Savings Bank 30,000 333,750
First Citizens Financial Corp. (a) 10,000 175,000
First Federal Savings & Loan Association 15,000 240,000
First Federal Savings Bank of Colorado 20,000 505,000
First Federal Capital Corp. 18,000 324,000
First Essex Bancorp, Inc. 50,000 456,250
First Financial Corp. of Wisconsin 44,000 759,000
First Financial Holdings, Inc. 115,000 1,897,500
First Palm Beach Bancorp, Inc. (a) 70,000 1,225,000
First Republic Bancorp, Inc. 47,000 628,625
First Southeast Financial Corp. 67,000 1,038,500
Glendale Federal Bank Federal Savings Bank (a) 140,000 1,645,000
Golden West Financial Corp. 30,000 1,188,750
Great Lakes Bancorp A Federal Savings Bank 55,000 1,416,250
Great Western Financial Corp. 40,404 777,777
HMN Financial, Inc. (a) 100,000 1,212,500
Haven Bancorp, Inc. (a) 20,000 300,000
Home Federal Bancorp 43,000 1,161,000
Home Federal Financial 5,500 83,875
Horizon Bank 10,000 135,000
Interwest Savings Bank 15,000 217,500
JSB Financial Corp. 25,000 646,875
Kankakee Bancorp, Inc. (a) 12,000 231,000
Loyola Capital Corp. 55,000 1,216,875
NS Bancorp, Inc. 36,000 1,089,000
Palfed, Inc. (a) 65,000 585,000
Pennfed Financial Services, Inc. (a) 40,000 475,000
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
FINANCE - CONTINUED
SAVINGS & LOANS - CONTINUED
Peoples Savings Financial Corp. 8,500 $ 150,875
Provident Bancshares Corp. 10,000 242,500
Reliance Bancorp, Inc. (a) 35,000 417,813
Roosevelt Financial Group, Inc. 120,000 2,002,500
SFFed Corp. 20,000 405,000
St. Paul Bancorp, Inc. 40,000 830,000
Security Capital Bancorp 70,000 1,102,500
Security Capital Corp. (a) 17,000 784,125
Sho-Me Financial Corp. (a) 40,000 470,000
Standard Financial, Inc. (a) 25,000 256,250
Virginia First Financial Corp. 17,500 297,500
Washington Federal Savings & Loan Association 70,000 1,426,250
Webster Financial Corp. 40,000 930,000
62,397,204
SECURITIES INDUSTRY - 0.1%
Piedmont Bankgroup, Inc. 13,500 324,000
TOTAL FINANCE 155,375,853
HEALTH - 4.4%
DRUGS & PHARMACEUTICALS - 0.0%
T Cell Sciences, Inc. (a) 40,000 120,000
MEDICAL EQUIPMENT & SUPPLIES - 4.4%
I-Stat Corporation (a) 1,093,100 17,899,513
TOTAL HEALTH 18,019,513
HOLDING COMPANIES - 0.2%
Lam Soon (Hong Kong) Ltd. 2,200,000 891,154
INDUSTRIAL MACHINERY & EQUIPMENT - 1.3%
ELECTRICAL EQUIPMENT - 0.1%
Mei Ah International 5,000,000 517,650
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED
INDUSTRIAL MACHINERY & EQUIPMENT - 1.2%
Cooper Industries, Inc. 34,700 $ 1,396,675
Joy Technologies, Inc. Class A (a) 210,000 3,045,000
Sweetwater, Inc. (a) 51,000 318,750
4,760,425
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 5,278,075
MEDIA & LEISURE - 5.0%
BROADCASTING - 4.6%
Bell Cablemedia PLC ADR (a) 60,000 1,545,000
Comcast UK Cable Partners Ltd. Class A 50,000 956,250
International Cabletel, Inc. (a) 75,000 2,400,000
Viacom, Inc.:
(warrants) Class C (a) 1,200,000 3,675,000
(non-vtg.) (a) 260,000 10,335,000
18,911,250
RESTAURANTS - 0.4%
Back Bay Restaurant Group, Inc. (a) 79,981 799,810
Foodmaker, Inc. (a) 120,000 690,000
1,489,810
TOTAL MEDIA & LEISURE 20,401,060
NONDURABLES - 1.8%
FOODS - 0.4%
Lam Soon Food Industries Ltd. 3,400,000 796,416
Yaohan Food Process & Trading Co. 4,600,000 770,914
1,567,330
HOUSEHOLD PRODUCTS - 0.4%
Avon Products, Inc. 25,000 1,493,750
TOBACCO - 1.0%
BAT Industries PLC sponsored ADR 40,000 555,000
Philip Morris Companies, Inc. 20,000 1,221,220
RJR Nabisco Holdings Corp. (a) 310,000 2,131,250
3,907,470
TOTAL NONDURABLES 6,968,550
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
RETAIL & WHOLESALE - 0.5%
GROCERY STORES - 0.5%
Four Seas Mercantile Holdings Ltd. 5,000,000 $ 1,701,850
Harry's Farmers' Market, Inc. Class A (a) 50,000 481,250
2,183,100
RETAIL & WHOLESALE, MISCELLANEOUS - 0.0%
Right Start, Inc. (a) 40,000 135,000
TOTAL RETAIL & WHOLESALE 2,318,100
SERVICES - 2.7%
PRINTING - 0.2%
Starlite Holdings Ltd. 7,000,000 942,130
SERVICES - 2.5%
Kinder-Care Learning Centers, Inc. (a) 330,000 4,702,500
Regis Corporation (a) 375,000 5,531,250
10,233,750
TOTAL SERVICES 11,175,880
TECHNOLOGY - 0.7%
PHOTOGRAPHIC EQUIPMENT - 0.7%
Showscan Corp. (a) 360,000 3,060,000
UTILITIES - 23.8%
CELLULAR - 0.3%
Millicom International Cellular SA (a) 52,000 1,163,500
TELEPHONE SERVICES - 23.5%
Ameritech Corp. 450,000 18,112,500
Bell Atlantic Corp. 310,000 16,430,000
BellSouth Corp. 330,000 18,397,500
NYNEX Corp. 360,000 13,860,000
Pacific Telesis Group 55,000 1,691,250
Southern New England Telecommunications Corp. 80,000 2,690,000
Southwestern Bell Corp. 340,000 14,450,000
U.S. West, Inc. 280,000 10,850,000
96,481,250
TOTAL UTILITIES 97,644,750
TOTAL COMMON STOCKS
(Cost $327,940,577) 337,017,340
CORPORATE BONDS - 2.4%
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (D)
CONVERTIBLE BONDS - 0.5%
FINANCE - 0.5%
BANKS - 0.5%
Southeast Banking Corp. 6 1/2%, 3/15/99 C $ 3,000,000 $ 2,070,000
NONCONVERTIBLE BONDS - 1.9%
DURABLES - 0.3%
HOME FURNISHINGS - 0.3%
Interco, Inc. 10%, 6/1/01 Ba3 1,368,000 1,369,710
RETAIL & WHOLESALE - 0.1%
GENERAL MERCHANDISE STORES - 0.1%
Macy (R.H.) & Co., Inc. sr. sub. deb.
14 1/2%, 10/15/98 (b) Ca 421,000 299,963
SERVICES - 0.6%
EDUCATIONAL SERVICES - 0.5%
Kinder-Care Learning Centers, Inc.
10 3/8%, 6/1/01 Ba3 2,000,000 2,025,000
SERVICES - 0.1%
JWP, Inc. 12%, 4/1/96 (b) - 4,000,000 200,000
TOTAL SERVICES 2,225,000
UTILITIES - 0.9%
GAS - 0.9%
Columbia Gas Systems, Inc. (b):
9.30%, 9/1/01 - 100,000 119,750
10 1/4%, 8/1/11 Caa 1,000,000 1,270,000
9.24%, 12/30/14 - 1,000,000 1,195,000
9.30%, 12/18/19 Caa 1,000,000 1,187,500
TOTAL UTILITIES 3,772,250
TOTAL NONCONVERTIBLE BONDS 7,666,923
TOTAL CORPORATE BONDS
(Cost $9,104,822) 9,736,923
U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - 13.2%
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (D)
U.S. TREASURY OBLIGATIONS - 13.2%
9 1/8%, 5/15/18 (e) Aaa $ 20,000 $ 22,318,750
Stripped Interest Payment
0%, 2/15/12 (e) Aaa 130,000 31,956,600
TOTAL U.S. GOVERNMENT AND
GOVERNMENT AGENCY OBLIGATIONS
(Cost $57,084,376) 54,275,350
FOREIGN GOVERNMENT OBLIGATIONS (F) - 0.8%
French Government (e):
OAT Strip, 4/25/23 Aaa FRF 100,000 1,630,930
Principal Strip, 4/25/23 Aaa FRF 90,000 1,487,205
TOTAL FOREIGN GOVERNMENT OBLIGATIONS
(Cost $4,475,170) 3,118,135
OTHER SECURITIES - 0.1%
PURCHASED BANK DEBT - 0.1%
Macy (R.H.) & Co., Inc. (b):
LBO Swap Claim 135,932 157,680
10 Store loan 312,586 309,069
10 Store Swap Claim 107,092 105,887
TOTAL OTHER SECURITIES
(Cost $449,531) 572,636
COMMERCIAL PAPER - 0.5%
Columbia Gas Systems 6.05%, 7/19/91 (b)
(Cost $2,050,000) 2,000,000 2,040,000
REPURCHASE AGREEMENTS - 0.8%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a
joint trading account at 4.91%
dated 9/30/94 due 10/3/94 $ 3,314,356 3,313,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $404,417,476) $ 410,073,384
LEGEND
(a) Non-income producing
(b) Non-income producing - issuer filed for protection under the Federal
Bankruptcy Code or is in default of interest payment.
(c) Standard & Poor's Corporation credit ratings are used in the absence of
a rating by Moody's Investors Service, Inc.
(d) Principal amount is stated in United States dollars unless otherwise
noted.
FRF - French franc
(e) Principal amount in thousands.
(f) Most foreign government obligations have not been individually rated by
S&P or Moody's. The ratings listed are assigned to securities by FMR, the
fund's investment adviser, based principally on S&P and Moody's ratings
of the sovereign credit of the issuing government.
OTHER INFORMATION
The composition of long-term debt holdings
as a percentage of total value of investment in securities, is as follows
(ratings are unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 14.0% AAA, AA, A 14.0%
Baa 0.0% BBB 0.0%
Ba 0.8% BB 0.5%
B 0.0% B 0.3%
Caa 0.6% CCC 0.0%
Ca, C 0.6% CC, C 0.0%
D 1.2%
For some foreign government obligations, FMR has assigned the ratings of
the sovereign credit of the issuing government. The percentage not rated by
either S&P or Moody's amounted to 0.5% including long-term debt categorized
as other securities.
INCOME TAX INFORMATION
At September 30, 1994, the aggregate cost of investment securities for
income tax purposes was $405,254,225. Net unrealized appreciation
aggregated $4,819,159, of which $22,852,182 related to appreciated
investment securities and $18,033,023 related to depreciated investment
securities.
The fund hereby designates $1,573,000 as a capital gain dividend for the
purpose of the dividend paid deduction.
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS SEPTEMBER 30, 1994

Investment in securities, at value (including repurchase $ 410,073,384
agreements of $3,313,000) (cost $404,417,476) -
See accompanying schedule

Receivable for investments sold 13,522,193

Receivable for fund shares sold 1,831,919

Dividends, interest and other receivables 2,503,699

Receivable from investment adviser for expense 1,806
reductions

TOTAL ASSETS 427,933,001

LIABILITIES

Payable for investments purchased $ 13,542,480

Payable for fund shares redeemed 701,570

Accrued management fee 221,319

Distribution fees payable 212,856

Other payables and accrued expenses 231,262

TOTAL LIABILITIES 14,909,487

NET ASSETS $ 413,023,514

Net Assets consist of:

Paid in capital $ 395,471,765

Undistributed net investment income 5,875,182

Accumulated undistributed net realized gain (loss) on 6,031,020
investments and foreign currency transactions

Net unrealized appreciation (depreciation) on 5,645,547
investments and assets and liabilities in foreign
currencies

NET ASSETS $ 413,023,514

CALCULATION OF MAXIMUM OFFERING PRICE $19.96
CLASS A:

NET ASSET VALUE and redemption price per share
($385,349,011 (divided by) 19,310,436 shares)

Maximum offering price per share (100/95.25 of $19.96) $20.96

CLASS B: $19.98
NET ASSET VALUE and offering price per share

($8,824,213 (divided by) 441,755 shares) (dagger)

INITIAL SHARES: $20.23
NET ASSET VALUE and redemption price per share
($18,850,290 (divided by) 931,931 shares)

Maximum offering price per share (100/95.25 of $20.23) $21.24

</TABLE>

(dagger) REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED SEPTEMBER 30, 1994

INVESTMENT INCOME $ 7,634,312
Dividends

Interest 5,728,849

TOTAL INCOME 13,363,161

EXPENSES

Management fee $ 2,222,910
Basic fee

Performance adjustment 359,674

Transfer agent fees 1,103,957
Class A

Class B 7,993

Initial Shares 37,897

Distribution fees 2,172,076
Class A

Class B 8,429

Accounting fees and expenses 215,648

Non-interested trustees' compensation 2,084

Custodian fees and expenses 46,885

Registration fees 141,321
Class A

Class B 854

Initial Shares 23,159

Audit 51,746

Legal 24,875

Miscellaneous 64,814

Total expenses before reductions 6,484,322

Expense reductions (24,630) 6,459,692

NET INVESTMENT INCOME 6,903,469

REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:

Investment securities 8,313,205

Foreign currency transactions (33,012) 8,280,193

Change in net unrealized appreciation (depreciation) on:

Investment securities (23,315,297)

Assets and liabilities in foreign currencies (10,361) (23,325,658)

NET GAIN (LOSS) (15,045,465)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ (8,141,996)
FROM OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30,
1994 1993

INCREASE (DECREASE) IN NET ASSETS

Operations $ 6,903,469 $ 5,033,318
Net investment income

Net realized gain (loss) 8,280,193 25,283,326

Change in net unrealized appreciation (depreciation) (23,325,658) 25,715,063

NET INCREASE (DECREASE) IN NET ASSETS RESULTING (8,141,996) 56,031,707
FROM OPERATIONS

Distributions to shareholders from:
Net investment income

Class A (5,752,632) (5,678,505)

Initial Shares (458,027) (627,961)

Net realized gain

Class A (22,876,692) (12,054,370)

Initial Shares (1,535,740) (1,085,476)

TOTAL DISTRIBUTIONS (30,623,091) (19,446,312)

Share transactions - net increase (decrease) 161,198,427 41,361,732

TOTAL INCREASE (DECREASE) IN NET ASSETS 122,433,340 77,947,127

NET ASSETS

Beginning of period 290,590,174 212,643,047

End of period (including undistributed net investment $ 413,023,514 $ 290,590,174
income of $5,875,182 and $8,916,803, respectively)

</TABLE>

FINANCIAL HIGHLIGHTS - CLASS A & CLASS B
CLASS B
CLASS A PERIOD ENDED
YEARS ENDED SEPTEMBER 30, SEPTEMBER 30,

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
1994 1993 1992 E 1991 1990 1994 F

SELECTED PER-SHARE DATA

Net asset value, $ 22.52 $ 19.53 $ 21.38 $ 17.21 $ 19.55 $ 19.65
beginning of period

Income from Investment
Operations

Net investment .39H .33 .61 .66 .70 .05H
income

Net realized and (.81) 4.44 .58 4.26 (2.49) .28
unrealized gain
(loss) on
investments

Total from investment (.42) 4.77 1.19 4.92 (1.79) .33
operations

Less Distributions

From net investment (.43) (.57) (.62) (.75) (.55) -
income

From net realized (1.71) (1.21) (2.42) - - -
gain

Total distributions (2.14) (1.78) (3.04) (.75) (.55) -

Net asset value, end of $ 19.96 $ 22.52 $ 19.53 $ 21.38 $ 17.21 $ 19.98
period

TOTAL RETURN A, B (2.24) 26.33% 7.26% 29.51% (9.49)% 1.68%
%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of $ 385 $ 270 $ 195 $ 200 $ 172 $ 9
period (in millions)

Ratio of expenses to 1.84% 1.57% 1.46% 1.56% 1.59% 2.63%G
average net assets C D

Ratio of expenses to 1.85% 1.57% 1.46% 1.56% 1.59% 2.84%G
average net assets D
before expense
reductions C

Ratio of net investment 1.89% 2.06% 3.22% 3.61% 3.70% 1.11%G
income to average
net assets

Portfolio turnover 159% 183% 211% 223% 114% 159%

</TABLE>

A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS.
D INCLUDES REIMBURSEMENT OF $.03 PER SHARE FROM FIDELITY MANAGEMENT &
RESEARCH COMPANY FOR ADJUSTMENTS TO PRIOR PERIOD'S FEES. IF THIS
REIMBURSEMENT HAD NOT EXISTED, THE RATIO OF EXPENSES TO AVERAGE NET ASSETS
WOULD HAVE BEEN 1.73%.
E AS OF OCTOBER 1, 1991, THE FUND DISCONTINUED THE USE OF EQUALIZATION
ACCOUNTING.
F FOR THE PERIOD JUNE 30, 1994 (COMMENCEMENT OF SALE OF CLASS B SHARES) TO
SEPTERMBER 30, 1994.
G ANNUALIZED
H NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
FINANCIAL HIGHLIGHTS - INITIAL SHARES

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED SEPTEMBER 30,

1994 1993 1992 E 1991 1990

SELECTED PER-SHARE DATA

Net asset value, beginning $ 22.72 $ 19.72 $ 21.55 $ 17.37 $ 19.77
of period

Income from Investment
Operations

Net investment income .54F .45 .73 .77 .80

Net realized and unrealized (.81) 4.46 .58 4.26 (2.49)
gain (loss) on investments

Total from investment (.27) 4.91 1.31 5.03 (1.69)
operations

Less Distributions

From net investment income (.51) (.70) (.72) (.85) (.71)

From net realized gain (1.71) (1.21) (2.42) - -

Total distributions (2.22) (1.91) (3.14) (.85) (.71)

Net asset value, end of period $ 20.23 $ 22.72 $ 19.72 $ 21.55 $ 17.37

TOTAL RETURN A, B (1.51)% 26.98% 7.89% 30.01% (8.96)%

RATIOS AND SUPPLEMENTAL
DATA

Net assets, end of period $ 19 $ 21 $ 18 $ 19 $ 16
(in millions)

Ratio of expenses to average 1.14% .89%D .87% 1.00% 1.03%
net assets C

Ratio of expenses to average 1.15% .89%D .87% 1.00% 1.03%
net assets before expense
reductions C

Ratio of net investment income 2.60% 2.74% 3.78% 4.12% 4.21%
to average net assets

Portfolio turnover 159% 183% 211% 223% 114%

</TABLE>

A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN.
B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE.
C SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS.
D INCLUDES REIMBURSEMENT OF $.03 PER SHARE FROM FIDELITY MANAGEMENT &
RESEARCH COMPANY FOR ADJUSTMENTS TO PRIOR PERIOD'S FEES. IF THIS
REIMBURSEMENT HAD NOT EXISTED, THE RATIO OF EXPENSES TO AVERAGE NET ASSETS
WOULD HAVE BEEN 1.05%.
E AS OF OCTOBER 1, 1991, THE FUND DISCONTINUED THE USE OF EQUALIZATION
ACCOUNTIING.
F NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
NOTES TO FINANCIAL STATEMENTS
For the period ended September 30, 1994

4. SIGNIFICANT ACCOUNTING
POLICIES.
Fidelity Advisor Strategic Opportunities Fund (the fund) is a fund of
Fidelity Advisor Series VIII (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 shares, Class B shares, and Initial Shares, each of
which has equal rights as to assets and voting privileges. Each class has
exclusive voting rights with respect to its distribution plans. The fund
commenced sale of Class B shares on June 30, 1994. Investment income,
realized and unrealized capital gains and losses, and the common expenses
of the fund are allocated on a prorata basis to each class based on the
ratio of relative net assets of each class to the total net assets of the
fund. Each class of shares differs in its respective distribution, transfer
agent, registration, and certain other class-specific fees and expenses.
The following summarizes the significant accounting policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are readily
available are valued at the last sale price, or if no sale price, at the
closing bid price. Securities for which exchange quotations are not readily
available (and in certain cases debt securities which trade on an
exchange), are valued primarily using dealer-supplied valuations or at
their fair value as determined in good faith under consistently applied
procedures under the general supervision of the Board of Trustees.
Short-term securities maturing within sixty days of their purchase date 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.
Reported net realized gains and losses on foreign currency transactions
represent currency gains and losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amount of net investment income accrued and the U.S. dollar amount actually
received. The effects of changes in foreign currency exchange rates on
investments in securities are not segregated in the Statement of Operations
from the effects of changes in market prices of those securities, but are
included with the net realized and unrealized gain or loss on investment in
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 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. Interest income is accrued as earned. Investment income
is recorded net of foreign taxes withheld where recovery of such taxes is
uncertain.
DISTRIBUTIONS TO SHAREHOLDERS.
Distributions are recorded on the ex-dividend date. Income dividends are
declared separately for each class, while capital gain distributions are
declared at the fund level and allocated to each class on a prorata basis
based on the number of shares held by each class on the ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
foreign currency transactions, market discount 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 and may
affect net investment income per share. Undistributed net investment income
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.
CHANGE IN ACCOUNTING FOR DISTRIBUTIONS TO SHAREHOLDERS. Effective October
1, 1993, the fund adopted Statement of Position 93-2: Determination,
Disclosure, and Financial Statement Presentation of Income, Capital Gain,
and Return of Capital Distributions by Investment Companies. As a result,
the fund changed the classification of distributions to shareholders to
better disclose the differences between financial statement amounts and
distributions determined in accordance with income tax regulations.
Accordingly, amounts as of the beginning of the fiscal year have been
reclassified to reflect an increase in paid in capital of $7,207,379, a
decrease in undistributed net investment income of $4,663,810 and a
decrease in accumulated net realized gain on investments of $2,543,569.
5. OPERATING POLICIES.
FORWARD FOREIGN CURRENCY
CONTRACTS. The fund may enter into forward foreign currency contracts. The
U.S. dollar value of forward foreign currency contracts is determined using
forward currency exchange rates supplied by a quotation service. Losses may
arise due to changes in the value of the foreign currency or if the
counterparty does not perform under the contract.
Purchases and sales of forward foreign currency contracts having the same
settlement date and broker are offset and any realized gain (loss) is
recognized on the date of offset, otherwise gain (loss) is recognized on
settlement date.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying securities, whose market value is required to be at least
102% of the resale price at the time of purchase. The fund's investment
adviser, Fidelity Management & Research Company (FMR), is responsible for
determining that the value of these underlying securities remains at least
equal to the resale price.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other affiliated
entities of FMR, may transfer uninvested cash balances into one or more
joint trading accounts. These balances are invested in one or more
repurchase agreements that mature in 60 days or less from the date of
purchase, and are collateralized by U.S. Treasury or Federal Agency
obligations.
6. PURCHASES AND SALES
OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $663,159,755 and $508,890,112, respectively, of which U.S.
government and government agency obligations aggregated $18,294,594 and $0,
respectively.
7. 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 .3000% to .5200% for the period October 1, 1993 to
October 31, 1993; .2850% to .5200% for the period November 1, 1993 to July
31, 1994; and .2700% to .5200% for the period August 1, 1994 to September
30, 1994. In the event that these rates were lower than the contractual
rates in effect during those periods, FMR voluntarily implemented the above
rates, as they resulted in the same or a lower management fee. The annual
individual fund fee rate is .30%. The basic fee is subject to a performance
adjustment (up to a maximum of (plus/minus) .20%) based on the fund's
investment performance as compared to the appropriate index over a
specified period of time. For the period, the management fee was equivalent
to an annual rate of .72% of average net assets after the performance
adjustment.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the 1940
Act, the Trustees have adopted separate distribution plans with respect to
the fund's Class A shares ("Class A Plan") and Class B shares ("Class B
Plan"), pursuant to which the fund pays Fidelity Distributors Corporation
(FDC), an affiliate of FMR, a distribution and service fee. This fee is
based on annual rates of .65% and 1.00% (of which .75% represents a
distribution fee and .25% represents a shareholder service fee) of the
average net assets of the Class A and Class B shares, respectively. For the
period, the fund paid FDC $2,172,076 and $8,429 under the Class A Plan and
Class B Plan, respectively, of which $1,780,905 and $2,107 were paid to
securities dealers, banks and other financial institutions for selling
Class A and Class B shares, respectively, and providing shareholder support
services.
In addition, FMR or FDC may use its resources to pay administrative and
promotional expenses related to the sale of the fund's shares. Subject to
the approval of the Board of Trustees, the Plans also authorize payments to
third parties that assist in the sale of the fund's shares or render
shareholder support services. FMR or FDC has informed the fund that there
were no payments made to third parties.
SALES LOAD. FDC receives a front-end sales charge of up to 4.75% for
selling Class A shares and Initial Shares of the fund. For the period, FDC
received sales charges of $447,011 on sales of Class A shares and Initial
Shares of the fund. FDC also receives the proceeds of a contingent deferred
sales charge levied on Class B share redemptions occurring within five
years of purchase. The charge is based on declining rates which range from
4% to 1% of the lesser of the cost of shares at the initital date of
purchase or the net asset value of the redeemed shares, excluding any
reinvested dividends or capital gains. For the period, FDC received
contingent deferred sales charges of $409 on Class B share redemptions from
the fund.
TRANSFER AGENT FEES. State Street Bank and Trust Company (State Street),
Fidelity Investments Institutional Operations Company (FIIOC), an affiliate
of FMR, and Fidelity Service Co. (FSC), also an affiliate of FMR,
(collectively referred to as the Transfer Agents) are the transfer,
dividend disbursing, and shareholder servicing agents for the fund's Class
A shares, Class B shares, and Initial Shares, respectively. The Transfer
Agents receive fees based on the type, size, number of accounts, and the
number of transactions made by shareholders of the respective classes of
the fund. With respect to the Class A shares, State Street has delegated
certain transfer, dividend paying, and shareholder services to FIIOC for
which FIIOC receives its allocable share of all such fees. The Transfer
Agents pay for typesetting, printing and mailing of all shareholder
reports, except proxy statements.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
ACCOUNTING FEES. FSC maintains the fund's accounting records. The fee is
based on the level of average net assets for the month plus out-of-pocket
expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $151,233 for the period.
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
$22,824 under this arrangement.
FMR voluntarily agreed to reimburse certain transfer agent, distribution
and registration expenses for Class B. For the period, the reimbursement
reduced these expenses by $1,806.
9. SHARE TRANSACTIONS.
Share transactions for the three classes were as follows:
SHARES DOLLARS
YEARS ENDED SEPTEMBER 30, YEARS ENDED SEPTEMBER 30,
1994 A 1993 1994 A 1993
CLASS A
Shares sold 9,950,363 3,301,716 $ 204,646,521 $ 68,310,190
Reinvestment of distributions 946,630 578,982 19,661,509 10,786,432
Shares redeemed (3,569,676) (1,866,302) (72,396,373) (37,662,274)
Net increase (decrease) 7,327,317 2,014,396 $ 151,911,657 $ 41,434,348
CLASS B
Shares sold 444,178 - $ 8,900,939 $ -
Reinvestment of distributions - - - -
Shares redeemed (2,423) - (48,808) -
Net increase (decrease) 441,755 - $ 8,852,131 $ -
INITIAL SHARES
Shares sold 10,959 13,084 $ 228,789 $ 304,306
Reinvestment of distributions 86,923 82,900 1,818,425 1,550,218
Shares redeemed (77,300) (94,063) (1,612,575) (1,927,140)
Net increase (decrease) 20,582 1,921 $ 434,639 $ (72,616)
A SHARE TRANSACTIONS FOR CLASS B ARE FOR THE PERIOD JUNE 30, 1994
(COMMENCEMENT OF SALE OF SHARES) TO SEPTEMBER 30, 1994.
REPORT OF INDEPENDENT ACCOUNTANTS

To the Trustees of Fidelity Advisor
Series VIII and the Shareholders
of Fidelity Advisor Strategic
Opportunities Fund:
We have audited the accompanying statement of assets and liabilities of
Fidelity Advisor Series VIII: Fidelity Advisor Strategic Opportunities
Fund, including the schedule of portfolio investments, as of September 30,
1994, and the related statement of operations for the year then ended, the
statement of changes in net assets for each of the two years in the period
then ended and the financial highlights for each of the five years in the
period then ended (Class A and Initial Shares) and for the period June 30,
1994 (commencement of sale of Class B shares) to September 30, 1994 (Class
B). These financial statements and financial highlights are the
responsibility of the fund's management. Our responsibility is to express
an opinion on these financial statements and financial highlights based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of September 30, 1994 by correspondence with the
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Advisor Series VIII: Fidelity Advisor Strategic Opportunities
Fund as of September 30, 1994, the results of its operations for the year
then ended, the changes in its net assets for each of the two years in the
period then ended, and the financial highlights for each of the five years
in the period then ended (Class A and Initial Shares) and for the period
June 30, 1994 (commencement of sale of Class B shares) to September 30,
1994 (Class B), in conformity with generally accepted accounting
principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
November 7, 1994
DISTRIBUTIONS

A total of 14.2% of the dividends distributed during the fiscal year was
derived from interest on U.S. Government securities which is generally
exempt from state income tax.
A total of 22% of the dividends distributed during the fiscal year
qualifies for the dividends-received deductions for corporate shareholders.
The fund will notify shareholders in January 1995 of these percentages
for use in preparing 1994 income tax returns.
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Daniel R. Frank, Vice President
Gary L. French, Treasurer
John H. Costello, Assistant Treasurer
Arthur S. Loring, Secretary
Robert H. Morrison, Manager,
Security Transactions
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox
Phyllis Burke Davis
Richard J. Flynn
Edward C. Johnson 3d
E. Bradley Jones
Donald J. Kirk
Peter S. Lynch
Edward H. Malone
Marvin L. Mann
Gerald C. McDonough
Thomas R. Williams
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
State Street Bank and Trust Company
Boston, MA - Class A
Fidelity Investments Institutional
Operations Company
Boston, MA - Class B
CUSTODIAN
Brown Brothers Harriman & Co.
Boston, MA
EQUITY FUNDS
Fidelity Advisor Overseas Fund
Fidelity Advisor Equity Portfolio Growth
Fidelity Advisor Growth
Opportunities Fund
Fidelity Advisor Global Resources Fund
Fidelity Advisor Strategic
Opportunities Fund
GROWTH AND INCOME FUNDS
Fidelity Advisor Equity Portfolio Income
Fidelity Advisor Income & Growth Fund
FIXED-INCOME FUNDS
Fidelity Advisor Emerging Markets Income Fund
Fidelity Advisor High Yield Fund
Fidelity Advisor Government Investment Fund
Fidelity Advisor Limited Term Bond Fund
Fidelity Advisor Short Fixed-Income Fund
Fidelity Advisor Strategic Income Fund
TAX-EXEMPT FUNDS
Fidelity Advisor High Income
Municipal Fund
Fidelity Advisor Limited Term Tax-Exempt Fund
Fidelity Advisor Short-Intermediate Tax-Exempt Fund
MONEY MARKET FUNDS
Daily Money Fund: Money Market Portfolio
Daily Money Fund: U.S. Treasury Portfolio
Daily Tax-Exempt Money Fund
(REGISTERED TRADEMARK)
(registered trademark)

(2_FIDELITY_LOGOS)FIDELITY ADVISOR

STRATEGIC OPPORTUNITIES
FUND - INITIAL SHARES
ANNUAL REPORT
SEPTEMBER 30, 1994
CONTENTS

PRESIDENT'S MESSAGE 3 Ned Johnson on stock market
strategies.

PERFORMANCE 4 How the fund has done over time.

FUND TALK 7 The manager's review of fund
performance, strategy and outlook.

INVESTMENT CHANGES 10 A summary of major shifts in the
fund's investments over the past six
months.

INVESTMENTS 11 A complete list of the fund's
investments with their market
values.

FINANCIAL STATEMENTS 22 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.

NOTES 27 Notes to the financial statements.

REPORT OF INDEPENDENT 32 The auditor's opinion.
ACCOUNTANTS

Advisor Strategic Opportunities - Initial -1.51% 59.70% 318.54%
Shares

Advisor Strategic Opportunities - Initial
Shares -6.19% 52.11% 298.66%
(incl. 4.75% sales charge)

S&P 500(registered trademark) 3.68% 54.92% 290.86%

Average Capital Appreciation Fund 0.31% 55.10% 232.14%

CUMULATIVE TOTAL RETURNS show the Initial Shares' performance in percentage
terms over a set period - in this case, one year, five years, or 10 years.
For example, if you invested $1,000 in a fund that then had a 5% return,
you would end up with $1,050. You can compare the Initial Shares' returns
to the performance of the Standard & Poor's Composite Index of 500 Stocks -
a common proxy for the U.S. stock market. You can also compare them to the
average capital appreciation fund, which reflects the performance of 154
capital appreciation funds with similar objectives tracked by Lipper
Analytical Services. Both benchmarks include reinvested dividends and
capital gains, if any, and exclude the effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED SEPTEMBER 30, 1994 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

Advisor Strategic Opportunities - Initial -1.51% 9.81% 15.39%
Shares

Advisor Strategic Opportunities - Initial
Shares -6.19% 8.75% 14.83%
(incl. 4.75% sales charge)

S&P 500 3.68% 9.15% 14.60%

Average Capital Appreciation Fund 0.31% 8.81% 11.98%

AVERAGE ANNUAL TOTAL RETURNS take the Initial Shares' actual (or
cumulative) return and show you what would have happened if the Initial
Shares had performed at a constant rate each year.
$10,000 OVER 10 YEARS
Adv. Spec.Sit.:Init.Class(014) Standard & Poor'
09/30/84 9525.00 10000.00
10/31/84 9818.08 10039.00
11/30/84 9555.22 9926.56
12/31/84 9608.16 10188.62
01/31/85 10658.09 10982.32
02/28/85 10649.26 11117.40
03/31/85 10490.45 11125.18
04/30/85 10446.34 11115.17
05/31/85 11081.59 11757.63
06/30/85 11328.63 11942.22
07/31/85 11531.56 11924.31
08/31/85 11663.90 11822.95
09/30/85 11205.11 11452.89
10/31/85 11831.54 11982.02
11/30/85 12599.02 12803.98
12/31/85 13216.23 13423.70
01/31/86 13804.06 13498.87
02/28/86 14969.91 14508.58
03/31/86 16047.58 15318.16
04/30/86 15773.27 15145.07
05/31/86 16086.77 15950.79
06/30/86 16948.91 16220.35
07/31/86 16410.08 15313.64
08/31/86 17517.14 16449.91
09/30/86 16370.89 15089.50
10/31/86 17007.70 15960.17
11/30/86 17271.27 16348.00
12/31/86 16906.24 15931.12
01/31/87 18303.79 18077.05
02/28/87 18491.52 18791.09
03/31/87 19054.71 19334.15
04/30/87 18501.95 19162.08
05/31/87 18689.68 19328.79
06/30/87 19284.16 20304.89
07/31/87 20076.81 21334.35
08/31/87 20473.13 22130.12
09/30/87 19951.65 21645.47
10/31/87 16322.18 16983.04
11/30/87 15581.69 15583.63
12/31/87 15939.69 16769.55
01/31/88 17204.16 17475.55
02/29/88 17775.61 18289.91
03/31/88 17459.49 17724.75
04/30/88 17568.92 17921.49
05/31/88 17872.88 18077.41
06/30/88 19100.88 18907.16
07/31/88 18991.45 18835.32
08/31/88 18420.01 18194.92
09/30/88 19027.93 18970.02
10/31/88 19368.36 19497.39
11/30/88 19477.79 19218.57
12/31/88 19559.15 19554.90
01/31/89 20733.45 20986.32
02/28/89 20645.06 20463.76
03/31/89 21074.38 20940.56
04/30/89 21869.88 22027.38
05/31/89 22867.41 22919.49
06/30/89 23056.81 22788.85
07/31/89 24635.18 24846.68
08/31/89 24938.23 25333.67
09/30/89 24963.48 25229.81
10/31/89 24559.42 24644.47
11/30/89 25241.27 25147.22
12/31/89 26009.84 25750.75
01/31/90 24322.08 24022.88
02/28/90 24466.00 24332.77
03/31/90 24492.16 24977.59
04/30/90 23497.82 24353.15
05/31/90 24269.74 26727.59
06/30/90 24505.25 26545.84
07/31/90 24596.83 26460.89
08/31/90 22895.99 24068.83
09/30/90 22725.90 22896.67
10/31/90 22725.90 22798.22
11/30/90 23733.32 24270.98
12/31/90 24294.65 24948.14
01/31/91 25103.56 26035.88
02/28/91 26597.98 27897.45
03/31/91 27448.02 28572.57
04/30/91 27831.91 28641.14
05/31/91 28832.76 29878.44
06/30/91 27941.59 28510.01
07/31/91 28791.63 29838.57
08/31/91 29422.30 30545.75
09/30/91 29545.70 30035.63
10/31/91 28969.86 30438.11
11/30/91 28284.35 29211.45
12/31/91 30050.20 32553.24
01/31/92 30114.85 31947.75
02/29/92 30712.95 32363.08
03/31/92 29953.21 31732.00
04/30/92 30535.14 32664.92
05/31/92 31537.35 32824.97
06/30/92 31553.51 32335.88
07/31/92 32523.40 33658.42
08/31/92 31989.96 32968.42
09/30/92 31876.81 33357.45
10/31/92 32135.44 33474.20
11/30/92 33509.44 34615.67
12/31/92 34099.36 35041.44
01/31/93 34740.73 35335.79
02/28/93 35738.41 35816.36
03/31/93 36878.62 36572.08
04/30/93 36165.99 35687.04
05/31/93 37038.97 36643.45
06/30/93 37377.46 36749.72
07/31/93 38196.99 36602.72
08/31/93 40602.12 37989.96
09/30/93 40477.41 37697.44
10/31/93 41777.96 38477.78
11/30/93 40032.01 38112.24
12/31/93 41284.78 38573.40
01/31/94 41678.91 39884.89
02/28/94 40240.35 38804.01
03/31/94 38722.96 37112.16
04/30/94 39038.26 37587.19
05/31/94 39156.50 38203.62
06/30/94 39156.50 37267.63
07/31/94 40141.81 38490.01
08/31/94 40398.00 40068.10
09/30/94 39846.22 39086.43

$10,000 OVER 10 YEARS: Let's say you invested $10,000 in Fidelity Advisor
Strategic Opportunities Fund - Initial Shares on September 30, 1984, and
paid a 4.75% sales charge. As the chart shows, by September 30, 1994, the
value of your investment would have grown to $39,866 - a 298.66% increase
on your initial investment. For comparison, look at how the S&P 500 did
over the same period. With dividends reinvested, the same $10,000
investment would have grown to $39,086 - a 290.86% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market,
for example, has a history of
growth in the long run and
volatility in the short run. In
turn, the share price and
return of a fund that invests in
stocks will vary. That means if
you sell your shares during a
market downturn, you might
lose money. But if you can
ride out the market's ups and
downs, you may have a gain.
(checkmark)
On August 20, 1986, the fund began offering Class A shares, and on June 30,
1994, the fund began offering Class B shares. All performance information
for Class A prior to August 20, 1986 does not reflect Class A's 12b-1 fee
and revised transfer agent fee arrangements, which if included, would lower
Class A's performance. All performance information for Class B prior to
June 30, 1994 does not reflect Class B's contingent deferred sales charge,
12b-1 fee and revised transfer agent fee arrangements,
which if included, would lower Class B's performance. If Fidelity had not
reimbursed certain Class B expenses during the periods shown, the total
returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED SEPTEMBER 30, 1994 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

Advisor Strategic Opportunities Fund - Class A -2.24% 55.27% 301.66%

Advisor Strategic Opportunities Fund - Class B -2.14% 55.43% 302.06%

AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED SEPTEMBER 30, 1994 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

Advisor Strategic Opportunities Fund - Class A -2.24% 9.20% 14.92%

Advisor Strategic Opportunities Fund - Class B -2.14% 9.22% 14.93%

INVESTMENT CHANGES

TOP TEN STOCKS AS OF SEPTEMBER 30, 1994
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE STOCKS
SIX MONTHS AGO

BellSouth Corp. 4.5 5.1

Ameritech Corp. 4.4 4.1

I-Stat Corporation 4.4 1.2

Bell Atlantic Corp. 4.0 3.8

Southwestern Bell Corp. 3.5 4.2

NYNEX Corp. 3.4 3.0

U.S. West, Inc. 2.6 4.6

Viacom, Inc. (non-vtg.) 2.5 0.4

Regis Corporation 1.3 1.2

Kinder-Care Learning Centers, 1.1 1.1
Inc.

TOP FIVE INDUSTRIES AS OF SEPTEMBER 30, 1994
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE INDUSTRIES
SIX MONTHS AGO

Finance 38.4 12.2

Utilities 24.7 27.3

Media & Leisure 5.0 3.2

Health 4.4 1.7

Services 3.3 6.2

Showing Percentage of Total Value of Investment in Securities

COMMON STOCKS - 82.2%
SHARES VALUE (NOTE 1)
BASIC INDUSTRIES - 0.4%
PACKAGING & CONTAINERS - 0.4%
M.C. Packaging 4,000,000 $ 1,863,644
CONSTRUCTION & REAL ESTATE - 0.5%
CONSTRUCTION - 0.5%
Centex Corp. 32,000 740,000
Kaufman & Broad Home Corp. 50,000 681,250
Pulte Corp. 25,000 543,750
TOTAL CONSTRUCTION & REAL ESTATE 1,965,000
DURABLES - 0.4%
TEXTILES & APPAREL - 0.4%
Springs Industries, Inc. Class A 30,000 1,080,000
Warnaco Group, Inc. Class A (a) 18,000 627,750
TOTAL DURABLES 1,707,750
ENERGY - 2.6%
COAL - 0.9%
MAPCO, Inc. 65,000 3,640,000
ENERGY SERVICES - 0.6%
Baker Hughes, Inc. 30,000 558,750
Halliburton Co. 20,000 630,000
Schlumberger Ltd. 20,000 1,087,500
2,276,250
OIL & GAS - 1.1%
Box Energy Corp. Class B (a) 96,700 870,300
Imperial Oil Ltd. 60,000 1,914,704
Shell Canada Ltd. Class A 50,000 1,646,757
4,431,761
TOTAL ENERGY 10,348,011
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
FINANCE - 37.9%
BANKS - 22.3%
Amcore Financial, Inc. 47,000 $ 998,750
Ameriana Bancorp 10,000 155,000
Arrow Financial Corp. 18,000 294,750
Associated Bancorporation 20,000 705,000
BB & T Financial Corp. 66,637 1,932,473
BMJ Financial Corp. (a) 55,000 646,250
Banc One Corp. 40,000 1,195,000
BancFirst Corp. 14,500 221,125
Bancorpsouth, Inc. 27,000 924,750
BanPonce Corp. 5,000 165,625
CCB Financial Corp. 61,000 2,653,500
Cape Cod Bank & Trust Co. 13,000 357,500
Carolina First Corp. 35,000 533,750
Central Fidelity Banks, Inc. 70,000 2,170,000
Central Jersey Bancorp 32,000 1,028,000
Centura Banks, Inc. 40,000 970,000
Citizens Bancorp of Maryland 30,000 907,500
City National Corp. (a) 185,000 2,035,000
Colonial BancGroup, Inc. Class A 21,300 505,875
Comerica, Inc. 37,900 1,051,725
Commerce Bancorp, Inc. 22,000 462,000
Commerce Bancshares, Inc. 10,000 297,500
Community First Bankshares, Inc. 20,000 315,000
Compass Bancshares, Inc. 62,000 1,464,750
CoreStates Financial Corp. 60,000 1,597,500
Crestar Financial Corp. 52,384 2,390,020
Cullen Frost Bankers, Inc. 20,000 762,500
Dauphin Deposit Corp. 62,000 1,550,000
Deposit Guaranty Corp. 62,000 1,999,500
Evergreen Bancorp, Inc. 37,000 647,500
F & M Bancorporation, Inc. 20,000 455,000
F & M National Corp. 56,000 966,000
FNB Rochester Corp. (a) 100,000 662,500
Fifth Third Bancorp 18,000 940,500
First Bancorporation of Ohio, Inc. 22,000 594,000
First American Corp. 70,432 2,324,256
First of America Bank Corp. 32,000 1,128,000
First Citizens Bancshares, Inc. 30,000 1,365,000
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
FINANCE - CONTINUED
BANKS - CONTINUED
First Commerce Corp. 105,000 $ 2,808,750
First Commercial Corp. 50,000 1,181,250
First Commonwealth Financial Corp. 10,000 151,250
First Merchants Corp. 8,500 276,250
First National Bancorp 15,000 311,250
First Security Corp. 36,000 1,044,000
First Southern Bancorp, Inc. 6,000 165,000
First Tennessee National Corp. 21,000 945,000
First Virginia Banks, Inc. 26,000 997,750
First Western Bancorp 10,000 275,000
Firstbank of Illinois Co. 31,000 1,189,625
Firstier, Inc. 15,000 495,000
Fort Wayne National Corp. 36,000 1,111,500
Fourth Financial Corp. 45,000 1,361,250
Integra Financial Corp. 36,000 1,624,500
Jefferson Bankshares, Inc. 46,000 960,250
Keystone Financial, Inc. 56,000 1,624,000
Liberty Bancorporation, Inc. 20,000 670,000
MLF Bancorp, Inc. (a) 35,000 555,625
Magna Group, Inc. 15,000 307,500
Mercantile Bankshares Corp. 81,000 1,792,125
Michigan National Corp. 27,000 2,058,750
Mid Am, Inc. 22,000 354,750
NBD Bancorp, Inc. 60,000 1,717,500
Norwalk Savings Society (a) 15,000 223,125
Old Kent Financial Corp. 21,000 672,000
ONBANCorp, Inc. 66,000 1,798,500
One Valley Bancorp of West Virginia, Inc. 52,000 1,511,250
Peoples Heritage Financial Group, Inc. 15,000 221,250
Premier Bankshares Corp. (a) 15,000 262,500
Premier Bancorp, Inc. 68,000 1,139,000
RS Financial Corp. 15,000 345,000
Republic Bancorp 20,000 272,500
Riggs National Corp. (a) 290,000 2,954,375
River Forest Bancorp 29,000 1,007,750
St. Francis Capital Corp. (a) 80,000 1,440,000
Southern National Corp. 65,000 1,340,625
T R Financial Corp. (a) 40,000 610,000
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
FINANCE - CONTINUED
BANKS - CONTINUED
Trans Financial Bancorp, Inc. 25,000 $ 400,000
Trustco Bank Corp. 11,000 233,750
Trustmark Corp. 14,000 273,000
UAB Financial Corp. 47,000 1,527,500
Union Bank of San Francisco 20,000 615,000
United Carolina Bancshares Corp. 103,000 2,678,000
United Bankshares, Inc. 25,000 612,500
United Financial Corp. of South Carolina 50,000 737,500
U.S. Bancorp 53,000 1,351,500
U.S. Trust Corp. 33,000 1,732,500
Victoria Bankshares, Inc. 33,000 891,000
Wachovia Corp. 61,000 1,967,250
Wilmington Trust Corp. 58,000 1,508,000
91,676,349
CLOSED END INVESTMENT COMPANY - 0.1%
Shanghai International Growth Investors (a) 48,000 280,800
CREDIT & OTHER FINANCE - 0.2%
Rochester Community Savings Bank (a) 36,000 697,500
SAVINGS & LOANS - 15.2%
Advantage Bancorp (a) 30,000 945,000
Albank Financial Corp. 30,000 727,500
American Federal Bank FSB 165,000 2,021,250
American Savings of Florida FSB (a) 220,000 4,042,500
Anchor Bancorp, Inc. (a) 205,000 3,305,625
Anchor Bancorp of Wisconsin, Inc. 25,000 756,250
Bankunited Financial Corp. Class A 25,000 156,250
Bedford Bancshares, Inc. (a) 40,000 480,000
Bell Bancorp, Inc. 39,000 989,625
Boston Bancorp 61,000 2,119,750
Braintree Savings Bank 37,000 481,000
CSF Holdings, Inc. Class B (a) 13,000 338,000
California Federal Bank Class A (a) 145,001 1,957,514
Central Indiana Bancorp 9,000 247,500
Charter One Financial Corp. 51,200 1,049,600
Charter FSB Bancorp, Inc. 10,000 315,000
Charter Federal Savings Bank 5,000 58,750
Coast Savings Financial, Inc. (a) 50,000 887,500
Coastal Bancorp, Inc. 120,000 2,265,000
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
FINANCE - CONTINUED
SAVINGS & LOANS - CONTINUED
Coastal Financial Corp. 5,000 $ 100,000
Collective Bancorp, Inc. 45,000 883,125
Columbia First Federal Savings & Loan Association (a) 28,000 1,109,500
Commercial Federal Corp. (a) 98,000 2,425,500
Coral Gables Fedcorp, Inc. (a) 180,000 3,442,500
Dime Bancorp, Inc. (a) 93,000 895,125
Dime Financial Corp. (a) 37,000 407,000
FCB Financial Corp. 17,000 259,250
FSB Financial Corp. (a) 10,000 133,750
Fidelity Bancorp, Inc. (a) 26,000 318,500
Fidelity Federal Savings Bank 30,000 333,750
First Citizens Financial Corp. (a) 10,000 175,000
First Federal Savings & Loan Association 15,000 240,000
First Federal Savings Bank of Colorado 20,000 505,000
First Federal Capital Corp. 18,000 324,000
First Essex Bancorp, Inc. 50,000 456,250
First Financial Corp. of Wisconsin 44,000 759,000
First Financial Holdings, Inc. 115,000 1,897,500
First Palm Beach Bancorp, Inc. (a) 70,000 1,225,000
First Republic Bancorp, Inc. 47,000 628,625
First Southeast Financial Corp. 67,000 1,038,500
Glendale Federal Bank Federal Savings Bank (a) 140,000 1,645,000
Golden West Financial Corp. 30,000 1,188,750
Great Lakes Bancorp A Federal Savings Bank 55,000 1,416,250
Great Western Financial Corp. 40,404 777,777
HMN Financial, Inc. (a) 100,000 1,212,500
Haven Bancorp, Inc. (a) 20,000 300,000
Home Federal Bancorp 43,000 1,161,000
Home Federal Financial 5,500 83,875
Horizon Bank 10,000 135,000
Interwest Savings Bank 15,000 217,500
JSB Financial Corp. 25,000 646,875
Kankakee Bancorp, Inc. (a) 12,000 231,000
Loyola Capital Corp. 55,000 1,216,875
NS Bancorp, Inc. 36,000 1,089,000
Palfed, Inc. (a) 65,000 585,000
Pennfed Financial Services, Inc. (a) 40,000 475,000
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
FINANCE - CONTINUED
SAVINGS & LOANS - CONTINUED
Peoples Savings Financial Corp. 8,500 $ 150,875
Provident Bancshares Corp. 10,000 242,500
Reliance Bancorp, Inc. (a) 35,000 417,813
Roosevelt Financial Group, Inc. 120,000 2,002,500
SFFed Corp. 20,000 405,000
St. Paul Bancorp, Inc. 40,000 830,000
Security Capital Bancorp 70,000 1,102,500
Security Capital Corp. (a) 17,000 784,125
Sho-Me Financial Corp. (a) 40,000 470,000
Standard Financial, Inc. (a) 25,000 256,250
Virginia First Financial Corp. 17,500 297,500
Washington Federal Savings & Loan Association 70,000 1,426,250
Webster Financial Corp. 40,000 930,000
62,397,204
SECURITIES INDUSTRY - 0.1%
Piedmont Bankgroup, Inc. 13,500 324,000
TOTAL FINANCE 155,375,853
HEALTH - 4.4%
DRUGS & PHARMACEUTICALS - 0.0%
T Cell Sciences, Inc. (a) 40,000 120,000
MEDICAL EQUIPMENT & SUPPLIES - 4.4%
I-Stat Corporation (a) 1,093,100 17,899,513
TOTAL HEALTH 18,019,513
HOLDING COMPANIES - 0.2%
Lam Soon (Hong Kong) Ltd. 2,200,000 891,154
INDUSTRIAL MACHINERY & EQUIPMENT - 1.3%
ELECTRICAL EQUIPMENT - 0.1%
Mei Ah International 5,000,000 517,650
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED
INDUSTRIAL MACHINERY & EQUIPMENT - 1.2%
Cooper Industries, Inc. 34,700 $ 1,396,675
Joy Technologies, Inc. Class A (a) 210,000 3,045,000
Sweetwater, Inc. (a) 51,000 318,750
4,760,425
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 5,278,075
MEDIA & LEISURE - 5.0%
BROADCASTING - 4.6%
Bell Cablemedia PLC ADR (a) 60,000 1,545,000
Comcast UK Cable Partners Ltd. Class A 50,000 956,250
International Cabletel, Inc. (a) 75,000 2,400,000
Viacom, Inc.:
(warrants) Class C (a) 1,200,000 3,675,000
(non-vtg.) (a) 260,000 10,335,000
18,911,250
RESTAURANTS - 0.4%
Back Bay Restaurant Group, Inc. (a) 79,981 799,810
Foodmaker, Inc. (a) 120,000 690,000
1,489,810
TOTAL MEDIA & LEISURE 20,401,060
NONDURABLES - 1.8%
FOODS - 0.4%
Lam Soon Food Industries Ltd. 3,400,000 796,416
Yaohan Food Process & Trading Co. 4,600,000 770,914
1,567,330
HOUSEHOLD PRODUCTS - 0.4%
Avon Products, Inc. 25,000 1,493,750
TOBACCO - 1.0%
BAT Industries PLC sponsored ADR 40,000 555,000
Philip Morris Companies, Inc. 20,000 1,221,220
RJR Nabisco Holdings Corp. (a) 310,000 2,131,250
3,907,470
TOTAL NONDURABLES 6,968,550
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
RETAIL & WHOLESALE - 0.5%
GROCERY STORES - 0.5%
Four Seas Mercantile Holdings Ltd. 5,000,000 $ 1,701,850
Harry's Farmers' Market, Inc. Class A (a) 50,000 481,250
2,183,100
RETAIL & WHOLESALE, MISCELLANEOUS - 0.0%
Right Start, Inc. (a) 40,000 135,000
TOTAL RETAIL & WHOLESALE 2,318,100
SERVICES - 2.7%
PRINTING - 0.2%
Starlite Holdings Ltd. 7,000,000 942,130
SERVICES - 2.5%
Kinder-Care Learning Centers, Inc. (a) 330,000 4,702,500
Regis Corporation (a) 375,000 5,531,250
10,233,750
TOTAL SERVICES 11,175,880
TECHNOLOGY - 0.7%
PHOTOGRAPHIC EQUIPMENT - 0.7%
Showscan Corp. (a) 360,000 3,060,000
UTILITIES - 23.8%
CELLULAR - 0.3%
Millicom International Cellular SA (a) 52,000 1,163,500
TELEPHONE SERVICES - 23.5%
Ameritech Corp. 450,000 18,112,500
Bell Atlantic Corp. 310,000 16,430,000
BellSouth Corp. 330,000 18,397,500
NYNEX Corp. 360,000 13,860,000
Pacific Telesis Group 55,000 1,691,250
Southern New England Telecommunications Corp. 80,000 2,690,000
Southwestern Bell Corp. 340,000 14,450,000
U.S. West, Inc. 280,000 10,850,000
96,481,250
TOTAL UTILITIES 97,644,750
TOTAL COMMON STOCKS
(Cost $327,940,577) 337,017,340
CORPORATE BONDS - 2.4%
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (D)
CONVERTIBLE BONDS - 0.5%
FINANCE - 0.5%
BANKS - 0.5%
Southeast Banking Corp. 6 1/2%, 3/15/99 C $ 3,000,000 $ 2,070,000
NONCONVERTIBLE BONDS - 1.9%
DURABLES - 0.3%
HOME FURNISHINGS - 0.3%
Interco, Inc. 10%, 6/1/01 Ba3 1,368,000 1,369,710
RETAIL & WHOLESALE - 0.1%
GENERAL MERCHANDISE STORES - 0.1%
Macy (R.H.) & Co., Inc. sr. sub. deb.
14 1/2%, 10/15/98 (b) Ca 421,000 299,963
SERVICES - 0.6%
EDUCATIONAL SERVICES - 0.5%
Kinder-Care Learning Centers, Inc.
10 3/8%, 6/1/01 Ba3 2,000,000 2,025,000
SERVICES - 0.1%
JWP, Inc. 12%, 4/1/96 (b) - 4,000,000 200,000
TOTAL SERVICES 2,225,000
UTILITIES - 0.9%
GAS - 0.9%
Columbia Gas Systems, Inc. (b):
9.30%, 9/1/01 - 100,000 119,750
10 1/4%, 8/1/11 Caa 1,000,000 1,270,000
9.24%, 12/30/14 - 1,000,000 1,195,000
9.30%, 12/18/19 Caa 1,000,000 1,187,500
TOTAL UTILITIES 3,772,250
TOTAL NONCONVERTIBLE BONDS 7,666,923
TOTAL CORPORATE BONDS
(Cost $9,104,822) 9,736,923
U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - 13.2%
MOODY'S RATINGS (C) PRINCIPAL VALUE (NOTE 1)
(UNAUDITED) AMOUNT (D)
U.S. TREASURY OBLIGATIONS - 13.2%
9 1/8%, 5/15/18 (e) Aaa $ 20,000 $ 22,318,750
Stripped Interest Payment
0%, 2/15/12 (e) Aaa 130,000 31,956,600
TOTAL U.S. GOVERNMENT AND
GOVERNMENT AGENCY OBLIGATIONS
(Cost $57,084,376) 54,275,350
FOREIGN GOVERNMENT OBLIGATIONS (F) - 0.8%
French Government (e):
OAT Strip, 4/25/23 Aaa FRF 100,000 1,630,930
Principal Strip, 4/25/23 Aaa FRF 90,000 1,487,205
TOTAL FOREIGN GOVERNMENT OBLIGATIONS
(Cost $4,475,170) 3,118,135
OTHER SECURITIES - 0.1%
PURCHASED BANK DEBT - 0.1%
Macy (R.H.) & Co., Inc. (b):
LBO Swap Claim 135,932 157,680
10 Store loan 312,586 309,069
10 Store Swap Claim 107,092 105,887
TOTAL OTHER SECURITIES
(Cost $449,531) 572,636
COMMERCIAL PAPER - 0.5%
Columbia Gas Systems 6.05%, 7/19/91 (b)
(Cost $2,050,000) 2,000,000 2,040,000
REPURCHASE AGREEMENTS - 0.8%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a
joint trading account at 4.91%
dated 9/30/94 due 10/3/94 $ 3,314,356 3,313,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $404,417,476) $ 410,073,384
LEGEND
(g) Non-income producing
(h) Non-income producing - issuer filed for protection under the Federal
Bankruptcy Code or is in default of interest payment.
(i) Standard & Poor's Corporation credit ratings are used in the absence of
a rating by Moody's Investors Service, Inc.
(j) Principal amount is stated in United States dollars unless otherwise
noted.
FRF - French franc
(k) Principal amount in thousands.
(l) Most foreign government obligations have not been individually rated by
S&P or Moody's. The ratings listed are assigned to securities by FMR, the
fund's investment adviser, based principally on S&P and Moody's ratings
of the sovereign credit of the issuing government.
OTHER INFORMATION
The composition of long-term debt holdings
as a percentage of total value of investment in securities, is as follows
(ratings are unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 14.0% AAA, AA, A 14.0%
Baa 0.0% BBB 0.0%
Ba 0.8% BB 0.5%
B 0.0% B 0.3%
Caa 0.6% CCC 0.0%
Ca, C 0.6% CC, C 0.0%
D 1.2%
For some foreign government obligations, FMR has assigned the ratings of
the sovereign credit of the issuing government. The percentage not rated by
either S&P or Moody's amounted to 0.5% including long-term debt categorized
as other securities.
INCOME TAX INFORMATION
At September 30, 1994, the aggregate cost of investment securities for
income tax purposes was $405,254,225. Net unrealized appreciation
aggregated $4,819,159, of which $22,852,182 related to appreciated
investment securities and $18,033,023 related to depreciated investment
securities.
The fund hereby designates $1,573,000 as a capital gain dividend for the
purpose of the dividend paid deduction.
FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS SEPTEMBER 30, 1994

Investment in securities, at value (including repurchase $ 410,073,384
agreements of $3,313,000) (cost $404,417,476) -
See accompanying schedule

Receivable for investments sold 13,522,193

Receivable for fund shares sold 1,831,919

Dividends, interest and other receivables 2,503,699

Receivable from investment adviser for expense 1,806
reductions

TOTAL ASSETS 427,933,001

LIABILITIES

Payable for investments purchased $ 13,542,480

Payable for fund shares redeemed 701,570

Accrued management fee 221,319

Distribution fees payable 212,856

Other payables and accrued expenses 231,262

TOTAL LIABILITIES 14,909,487

NET ASSETS $ 413,023,514

Net Assets consist of:

Paid in capital $ 395,471,765

Undistributed net investment income 5,875,182

Accumulated undistributed net realized gain (loss) on 6,031,020
investments and foreign currency transactions

Net unrealized appreciation (depreciation) on 5,645,547
investments and assets and liabilities in foreign
currencies

NET ASSETS $ 413,023,514

CALCULATION OF MAXIMUM OFFERING PRICE $19.96
CLASS A:
NET ASSET VALUE and redemption price per share
($385,349,011 (divided by) 19,310,436 shares)

Maximum offering price per share (100/95.25 of $19.96) $20.96

CLASS B: $19.98
NET ASSET VALUE and offering price per share
($8,824,213 (divided by) 441,755 shares) (dagger)

INITIAL SHARES: $20.23
NET ASSET VALUE and redemption price per share
($18,850,290 (divided by) 931,931 shares)

Maximum offering price per share (100/95.25 of $20.23) $21.24

</TABLE>

(dagger) REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED SEPTEMBER 30, 1994

INVESTMENT INCOME $ 7,634,312
Dividends

Interest 5,728,849

TOTAL INCOME 13,363,161

EXPENSES

Management fee $ 2,222,910
Basic fee

Performance adjustment 359,674

Transfer agent fees 1,103,957
Class A

Class B 7,993

Initial Shares 37,897

Distribution fees 2,172,076
Class A

Class B 8,429

Accounting fees and expenses 215,648

Non-interested trustees' compensation 2,084

Custodian fees and expenses 46,885

Registration fees 141,321
Class A

Class B 854

Initial Shares 23,159

Audit 51,746

Legal 24,875

Miscellaneous 64,814

Total expenses before reductions 6,484,322

Expense reductions (24,630) 6,459,692

NET INVESTMENT INCOME 6,903,469

REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:

Investment securities 8,313,205

Foreign currency transactions (33,012) 8,280,193

Change in net unrealized appreciation (depreciation) on:

Investment securities (23,315,297)

Assets and liabilities in foreign currencies (10,361) (23,325,658)

NET GAIN (LOSS) (15,045,465)

NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ (8,141,996)
FROM OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30,
1994 1993

INCREASE (DECREASE) IN NET ASSETS

Operations $ 6,903,469 $ 5,033,318
Net investment income

Net realized gain (loss) 8,280,193 25,283,326

Change in net unrealized appreciation (depreciation) (23,325,658) 25,715,063

NET INCREASE (DECREASE) IN NET ASSETS RESULTING (8,141,996) 56,031,707
FROM OPERATIONS

Distributions to shareholders from:
Net investment income

Class A (5,752,632) (5,678,505)

Initial Shares (458,027) (627,961)

Net realized gain

Class A (22,876,692) (12,054,370)

Initial Shares (1,535,740) (1,085,476)

TOTAL DISTRIBUTIONS (30,623,091) (19,446,312)

Share transactions - net increase (decrease) 161,198,427 41,361,732

TOTAL INCREASE (DECREASE) IN NET ASSETS 122,433,340 77,947,127

NET ASSETS

Beginning of period 290,590,174 212,643,047

End of period (including undistributed net investment $ 413,023,514 $ 290,590,174
income of $5,875,182 and $8,916,803, respectively)

</TABLE>

FINANCIAL HIGHLIGHTS - CLASS A & CLASS B
CLASS B
CLASS A PERIOD ENDED
YEARS ENDED SEPTEMBER 30, SEPTEMBER 30,

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
1994 1993 1992 E 1991 1990 1994 F

SELECTED PER-SHARE DATA

Net asset value, $ 22.52 $ 19.53 $ 21.38 $ 17.21 $ 19.55 $ 19.65
beginning of period

Income from Investment
Operations

Net investment .39H .33 .61 .66 .70 .05H
income

Net realized and (.81) 4.44 .58 4.26 (2.49) .28
unrealized gain
(loss) on
investments

Total from investment (.42) 4.77 1.19 4.92 (1.79) .33
operations

Less Distributions

From net investment (.43) (.57) (.62) (.75) (.55) -
income

From net realized (1.71) (1.21) (2.42) - - -
gain

Total distributions (2.14) (1.78) (3.04) (.75) (.55) -

Net asset value, end of $ 19.96 $ 22.52 $ 19.53 $ 21.38 $ 17.21 $ 19.98
period

TOTAL RETURN A, B (2.24) 26.33% 7.26% 29.51% (9.49)% 1.68%
%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of $ 385 $ 270 $ 195 $ 200 $ 172 $ 9
period (in millions)

Ratio of expenses to 1.84% 1.57% 1.46% 1.56% 1.59% 2.63%G
average net assets C D

Ratio of expenses to 1.85% 1.57% 1.46% 1.56% 1.59% 2.84%G
average net assets D
before expense
reductions C

Ratio of net investment 1.89% 2.06% 3.22% 3.61% 3.70% 1.11%G
income to average
net assets

Portfolio turnover 159% 183% 211% 223% 114% 159%

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
YEARS ENDED SEPTEMBER 30,

1994 1993 1992 E 1991 1990

SELECTED PER-SHARE DATA

Net asset value, beginning $ 22.72 $ 19.72 $ 21.55 $ 17.37 $ 19.77
of period

Income from Investment
Operations

Net investment income .54F .45 .73 .77 .80

Net realized and unrealized (.81) 4.46 .58 4.26 (2.49)
gain (loss) on investments

Total from investment (.27) 4.91 1.31 5.03 (1.69)
operations

Less Distributions

From net investment income (.51) (.70) (.72) (.85) (.71)

From net realized gain (1.71) (1.21) (2.42) - -

Total distributions (2.22) (1.91) (3.14) (.85) (.71)

Net asset value, end of period $ 20.23 $ 22.72 $ 19.72 $ 21.55 $ 17.37

TOTAL RETURN A, B (1.51)% 26.98% 7.89% 30.01% (8.96)%

RATIOS AND SUPPLEMENTAL
DATA

Net assets, end of period $ 19 $ 21 $ 18 $ 19 $ 16
(in millions)

Ratio of expenses to average 1.14% .89%D .87% 1.00% 1.03%
net assets C

Ratio of expenses to average 1.15% .89%D .87% 1.00% 1.03%
net assets before expense
reductions C

Ratio of net investment income 2.60% 2.74% 3.78% 4.12% 4.21%
to average net assets

Portfolio turnover 159% 183% 211% 223% 114%

</TABLE>

10. SIGNIFICANT ACCOUNTING
POLICIES.
Fidelity Advisor Strategic Opportunities Fund (the fund) is a fund of
Fidelity Advisor Series VIII (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 shares, Class B shares, and Initial Shares, each of
which has equal rights as to assets and voting privileges. Each class has
exclusive voting rights with respect to its distribution plans. The fund
commenced sale of Class B shares on June 30, 1994. Investment income,
realized and unrealized capital gains and losses, and the common expenses
of the fund are allocated on a prorata basis to each class based on the
ratio of relative net assets of each class to the total net assets of the
fund. Each class of shares differs in its respective distribution, transfer
agent, registration, and certain other class-specific fees and expenses.
The following summarizes the significant accounting policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are readily
available are valued at the last sale price, or if no sale price, at the
closing bid price. Securities for which exchange quotations are not readily
available (and in certain cases debt securities which trade on an
exchange), are valued primarily using dealer-supplied valuations or at
their fair value as determined in good faith under consistently applied
procedures under the general supervision of the Board of Trustees.
Short-term securities maturing within sixty days of their purchase date 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.
Reported net realized gains and losses on foreign currency transactions
represent currency gains and losses realized between the trade and
settlement dates on securities transactions, and the difference between the
amount of net investment income accrued and the U.S. dollar amount actually
received. The effects of changes in foreign currency exchange rates on
investments in securities are not segregated in the Statement of Operations
from the effects of changes in market prices of those securities, but are
included with the net realized and unrealized gain or loss on investment in
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 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. Interest income is accrued as earned. Investment income
is recorded net of foreign taxes withheld where recovery of such taxes is
uncertain.
DISTRIBUTIONS TO SHAREHOLDERS.
Distributions are recorded on the ex-dividend date. Income dividends are
declared separately for each class, while capital gain distributions are
declared at the fund level and allocated to each class on a prorata basis
based on the number of shares held by each class on the ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
foreign currency transactions, market discount 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 and may
affect net investment income per share. Undistributed net investment income
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.
CHANGE IN ACCOUNTING FOR DISTRIBUTIONS TO SHAREHOLDERS. Effective October
1, 1993, the fund adopted Statement of Position 93-2: Determination,
Disclosure, and Financial Statement Presentation of Income, Capital Gain,
and Return of Capital Distributions by Investment Companies. As a result,
the fund changed the classification of distributions to shareholders to
better disclose the differences between financial statement amounts and
distributions determined in accordance with income tax regulations.
Accordingly, amounts as of the beginning of the fiscal year have been
reclassified to reflect an increase in paid in capital of $7,207,379, a
decrease in undistributed net investment income of $4,663,810 and a
decrease in accumulated net realized gain on investments of $2,543,569.
11. OPERATING POLICIES.
FORWARD FOREIGN CURRENCY
CONTRACTS. The fund may enter into forward foreign currency contracts. The
U.S. dollar value of forward foreign currency contracts is determined using
forward currency exchange rates supplied by a quotation service. Losses may
arise due to changes in the value of the foreign currency or if the
counterparty does not perform under the contract.
Purchases and sales of forward foreign currency contracts having the same
settlement date and broker are offset and any realized gain (loss) is
recognized on the date of offset, otherwise gain (loss) is recognized on
settlement date.
REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery
of the underlying securities, whose market value is required to be at least
102% of the resale price at the time of purchase. The fund's investment
adviser, Fidelity Management & Research Company (FMR), is responsible for
determining that the value of these underlying securities remains at least
equal to the resale price.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the fund, along with other affiliated
entities of FMR, may transfer uninvested cash balances into one or more
joint trading accounts. These balances are invested in one or more
repurchase agreements that mature in 60 days or less from the date of
purchase, and are collateralized by U.S. Treasury or Federal Agency
obligations.
12. PURCHASES AND SALES
OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $663,159,755 and $508,890,112, respectively, of which U.S.
government and government agency obligations aggregated $18,294,594 and $0,
respectively.
13. 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 .3000% to .5200% for the period October 1, 1993 to
October 31, 1993; .2850% to .5200% for the period November 1, 1993 to July
31, 1994; and .2700% to .5200% for the period August 1, 1994 to September
30, 1994. In the event that these rates were lower than the contractual
rates in effect during those periods, FMR voluntarily implemented the above
rates, as they resulted in the same or a lower management fee. The annual
individual fund fee rate is .30%. The basic fee is subject to a performance
adjustment (up to a maximum of (plus/minus) .20%) based on the fund's
investment performance as compared to the appropriate index over a
specified period of time. For the period, the management fee was equivalent
to an annual rate of .72% of average net assets after the performance
adjustment.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the 1940
Act, the Trustees have adopted separate distribution plans with respect to
the fund's Class A shares ("Class A Plan") and Class B shares ("Class B
Plan"), pursuant to which the fund pays Fidelity Distributors Corporation
(FDC), an affiliate of FMR, a distribution and service fee. This fee is
based on annual rates of .65% and 1.00% (of which .75% represents a
distribution fee and .25% represents a shareholder service fee) of the
average net assets of the Class A and Class B shares, respectively. For the
period, the fund paid FDC $2,172,076 and $8,429 under the Class A Plan and
Class B Plan, respectively, of which $1,780,905 and $2,107 were paid to
securities dealers, banks and other financial institutions for selling
Class A and Class B shares, respectively, and providing shareholder support
services.
In addition, FMR or FDC may use its resources to pay administrative and
promotional expenses related to the sale of the fund's shares. Subject to
the approval of the Board of Trustees, the Plans also authorize payments to
third parties that assist in the sale of the fund's shares or render
shareholder support services. FMR or FDC has informed the fund that there
were no payments made to third parties.
SALES LOAD. FDC receives a front-end sales charge of up to 4.75% for
selling Class A shares and Initial Shares of the fund. For the period, FDC
received sales charges of $447,011 on sales of Class A shares and Initial
Shares of the fund. FDC also receives the proceeds of a contingent deferred
sales charge levied on Class B share redemptions occurring within five
years of purchase. The charge is based on declining rates which range from
4% to 1% of the lesser of the cost of shares at the initital date of
purchase or the net asset value of the redeemed shares, excluding any
reinvested dividends or capital gains. For the period, FDC received
contingent deferred sales charges of $409 on Class B share redemptions from
the fund.
TRANSFER AGENT FEES. State Street Bank and Trust Company (State Street),
Fidelity Investments Institutional Operations Company (FIIOC), an affiliate
of FMR, and Fidelity Service Co. (FSC), also an affiliate of FMR,
(collectively referred to as the Transfer Agents) are the transfer,
dividend disbursing, and shareholder servicing agents for the fund's Class
A shares, Class B shares, and Initial Shares, respectively. The Transfer
Agents receive fees based on the type, size, number of accounts, and the
number of transactions made by shareholders of the respective classes of
the fund. With respect to the Class A shares, State Street has delegated
certain transfer, dividend paying, and shareholder services to FIIOC for
which FIIOC receives its allocable share of all such fees. The Transfer
Agents pay for typesetting, printing and mailing of all shareholder
reports, except proxy statements.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
ACCOUNTING FEES. FSC maintains the fund's accounting records. The fee is
based on the level of average net assets for the month plus out-of-pocket
expenses.
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms were $151,233 for the period.
14. 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
$22,824 under this arrangement.
FMR voluntarily agreed to reimburse certain transfer agent, distribution
and registration expenses for Class B. For the period, the reimbursement
reduced these expenses by $1,806.
15. SHARE TRANSACTIONS.
Share transactions for the three classes were as follows:
SHARES DOLLARS
YEARS ENDED SEPTEMBER 30, YEARS ENDED SEPTEMBER 30,
1994 A 1993 1994 A 1993
CLASS A
Shares sold 9,950,363 3,301,716 $ 204,646,521 $ 68,310,190
Reinvestment of distributions 946,630 578,982 19,661,509 10,786,432
Shares redeemed (3,569,676) (1,866,302) (72,396,373) (37,662,274)
Net increase (decrease) 7,327,317 2,014,396 $ 151,911,657 $ 41,434,348
CLASS B
Shares sold 444,178 - $ 8,900,939 $ -
Reinvestment of distributions - - - -
Shares redeemed (2,423) - (48,808) -
Net increase (decrease) 441,755 - $ 8,852,131 $ -
INITIAL SHARES
Shares sold 10,959 13,084 $ 228,789 $ 304,306
Reinvestment of distributions 86,923 82,900 1,818,425 1,550,218
Shares redeemed (77,300) (94,063) (1,612,575) (1,927,140)
Net increase (decrease) 20,582 1,921 $ 434,639 $ (72,616)
A SHARE TRANSACTIONS FOR CLASS B ARE FOR THE PERIOD JUNE 30, 1994
(COMMENCEMENT OF SALE OF SHARES) TO SEPTEMBER 30, 1994.
REPORT OF INDEPENDENT ACCOUNTANTS