FIDELITY ADVISOR SERIES VIII, N-30D, 1997-02-24

FIDELITY ADVISOR SERIES VIII
N-30D, 1997-02-24

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(2_FIDELITY_LOGOS)FIDELITY ADVISOR
(registered trademark)

EMERGING MARKETS INCOME
FUND - INSTITUTIONAL CLASS
ANNUAL REPORT
DECEMBER 31, 1996
CONTENTS

PRESIDENT'S MESSAGE 3 Ned Johnson on investing
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 17 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.

NOTES 24 Notes to financial statements.

REPORT OF INDEPENDENT 32 The auditors' opinion.
ACCOUNTANTS

DISTRIBUTIONS 33

THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR DISTRIBUTION TO
PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN
EFFECTIVE
PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY ADVISOR FUND, INCLUDING CHARGES AND
EXPENSES,
CONTACT YOUR INVESTMENT PROFESSIONAL FOR A FREE PROSPECTUS. READ IT
CAREFULLY BEFORE YOU
INVEST OR SEND MONEY.
PRESIDENT'S MESSAGE

(PHOTO_OF_EDWARD_C_JOHNSON_3D)DEAR SHAREHOLDER:
Although stocks managed to post solid returns throughout 1996, signs of
strength in the economy have led to inflation fears, causing some
uncertainty in bond markets. In 1995, both stock and bond markets posted
strong results, while the year before, stocks posted below-average returns
and bonds had one of the worst years in history.
These market ups and downs are a normal part of investing, and there are
some basic principles that are helpful for investors to remember in
different types of markets.
Keeping in mind that the effects of interest rate changes on your bond
investments will only be "paper" gains or losses unless you sell your
shares, staying in your bond fund may be appropriate if your investment
horizon is at least a year or more. The longer your investing time frame,
the more likely it is that you will retain your principal investment
through both up and down markets. For example, a 10-year time frame, such
as saving for a college education, enables you to weather these ups and
downs in a long-term fund, which has higher potential returns. An
intermediate-length fund could be appropriate if your investment horizon is
two to four years, and a short-term bond fund could be the right choice if
you need your money in one or two years.
If your time horizon is less than a year, you might want to consider moving
some of your bond investment into a money market fund, which seeks income
and a stable share price by investing in high-quality, short-term
investments. 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 or guaranteed by any agency of the U.S. government.
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. 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 EMERGING MARKETS INCOME FUND - INSTITUTIONAL CLASS
PERFORMANCE: THE BOTTOM LINE

Advisor Emerging Markets Income - Institutional Class 40.21% 53.85%

J.P. Morgan Emerging Markets Bond Index Plus 39.30% 58.24%

Emerging Markets Debt Funds Average 40.70% n/a

CUMULATIVE TOTAL RETURNS show Institutional Class' performance in
percentage terms over a set period - in this case, one year, or since the
fund started on March 10, 1994. For example, if you had invested $1,000 in
a fund that had a 5% return over the past year, the value of your
investment would be $1,050. You can compare Institutional Class' returns to
those of the J.P. Morgan Emerging Markets Bond Index Plus - a market
capitalization weighted total return index of U.S. dollar- and other
external currency-denominated Brady bonds, loans, Eurobonds, and local
market debt instruments traded in emerging markets. To measure how
Institutional Class' performance stacked up against its peers, you can
compare it to the emerging markets debt funds average, which reflects the
performance of 16 mutual funds with similar objectives tracked by Lipper
Analytical Services, Inc. over the past one year. These benchmarks reflect
reinvestment of dividends and capital gains, if any, and exclude the
effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1996 PAST 1 LIFE OF
YEAR FUND

Advisor Emerging Markets Income - Institutional Class 40.21% 16.53%

J.P. Morgan Emerging Markets Bond Index Plus 39.30% 17.70%

Emerging Markets Debt Funds Average 40.70% n/a

AVERAGE ANNUAL TOTAL RETURNS take Institutional Class' cumulative return
and show you what would have happened if Institutional Class shares had
performed at a constant rate each year. (Note: Lipper calculates average
annual total returns by annualizing each fund's total return, then taking
an arithmetic average. This may produce a slightly different figure than
that obtained by averaging the cumulative total returns and annualizing the
result.)
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19961231 19970127 183037 S00000000000001
FA Emerg Mkt Inc -CL I JP EMBI Plus
00607 JP004
1994/03/10 10000.00 10000.00
1994/03/31 9583.54 8710.62
1994/04/30 9709.65 8547.86
1994/05/31 10335.54 9179.71
1994/06/30 9835.28 8713.44
1994/07/31 10055.96 8872.50
1994/08/31 11267.52 9606.91
1994/09/30 11589.24 9903.80
1994/10/31 11290.55 9590.79
1994/11/30 11055.90 9580.60
1994/12/31 10246.94 8960.01
1995/01/31 9070.51 8528.44
1995/02/28 8422.24 8131.77
1995/03/31 8175.93 7967.86
1995/04/30 8877.85 8820.45
1995/05/31 9407.49 9588.08
1995/06/30 9460.49 9799.71
1995/07/31 9475.87 9761.06
1995/08/31 9680.80 10028.23
1995/09/30 10067.96 10420.27
1995/10/31 10006.53 10307.15
1995/11/30 10342.00 10606.50
1995/12/31 10973.18 11358.60
1996/01/31 11783.93 12221.80
1996/02/29 11129.68 11547.60
1996/03/31 11236.56 11810.65
1996/04/30 11814.51 12455.00
1996/05/31 12138.03 12670.53
1996/06/30 12405.84 13115.94
1996/07/31 12548.91 13390.04
1996/08/31 13004.74 13881.87
1996/09/30 14072.63 14777.12
1996/10/31 14437.84 14877.70
1996/11/30 15247.88 15635.90
1996/12/31 15385.48 15823.79
IMATRL PRASUN SHR__CHT 19961231 19970127 183038 R00000000000037

$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Emerging Markets Income Fund - Institutional
Class on March 10, 1994, when the fund started. As the chart shows, by
December 31, 1996, the value of the investment would have grown to $15,385
- - a 53.85% increase on the initial investment. For comparison, look at how
the J.P. Morgan Emerging Markets Bond Index Plus did over the same period.
With dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $15,824 - a 58.24% increase.
UNDERSTANDING
PERFORMANCE
Many markets around the globe
offer the potential for significant
growth over time; however,
investing in foreign markets
means assuming greater risks
than investing in the United
States. Factors like changes in a
country's financial markets, its
local political and economic
climate, and the fluctuating value
of its currency create these risks.
For these reasons an
international fund's performance
may be more volatile than a fund
that invests exclusively in the
United States. Past performance
is no guarantee of future results
and you may have a gain or loss
when you sell your shares.
(checkmark)

TOTAL RETURN COMPONENTS
<TABLE>
<CAPTION>
<S> <C> <C>
YEARS ENDED DECEMBER MARCH 10, 1994
31, (COMMENCEMEN
T
OF OPERATIONS)
TO
DECEMBER 31,

1996 1995 1994

Dividend return 9.89% 9.61% 4.80%

Capital appreciation return 30.32% -2.52% -2.33%

Total return 40.21% 7.09% 2.47%
</TABLE>
TOTAL RETURN COMPONENTS include both dividend returns and capital
appreciation returns. A dividend return reflects the actual dividends paid
by the class. A capital appreciation return reflects both the amount paid
by the class to shareholders as capital gain distributions and changes in
the class' share price. Both returns assume the dividends or gains are
reinvested and exclude the effect of the sales charge.
DIVIDENDS AND YIELD
PERIODS ENDED DECEMBER 31, 1996 PAST PAST 6 PAST 1
MONTH MONTHS YEAR

Dividends per share 6.30(cents) 38.52(cents) 78.48(cents)

Annualized dividend rate 6.26% 6.90% 7.57%

30-day annualized yield n/a - -

DIVIDENDS per share show the income paid by the class for a set period. If
you annualize this number, based on an average net asset value of $11.84
over the past month, $11.07 over the past six months, and $10.37 over the
past year, you can compare the class' income distributions over these three
periods. The 30-day annualized YIELD is a standard formula for all bond
funds based on the yields of the bonds in the fund, averaged over the past
30 days. This figure shows you the yield characteristics of the fund's
investments at the end of the period. It also helps you to compare funds
from different companies on an equal basis. Yield information will be
reported once the Institutional Class has a longer, more stable, operating
history.
FUND TALK: THE MANAGER'S OVERVIEW

MARKET RECAP
While low inflation and moderate
growth helped provide a positive
backdrop for most bond markets in
1996, performance in overseas bond
markets was mixed. The Salomon
Brothers World Government Bond
Index - a measure of government
bond market performance in
developed nations - returned
7.11% for the 12 months ended
December 31, 1996. In Europe,
focus centered on the continuing
progress toward the European
Monetary Union (EMU). Attractive
opportunities arose as countries
worked to meet the requirements
for joining the EMU. Many
European nations - especially Italy,
Spain and Sweden - boasted
strong returns. However, Germany
and Japan - two of the larger
components of the Salomon
Brothers World Government Bond
Index - experienced currency
problems that hurt returns. When
Japan's trade surplus diminished
during the year, assets flowed out of
the country, with investors seeking
higher-yielding opportunities
elsewhere. In stark contrast to the
developed world, the often-volatile
emerging debt markets enjoyed a
particularly strong year, helped by
inflows of foreign capital, low
interest rates and the
implementation of country-specific
reforms - especially in Latin
America. The JP Morgan Emerging
Markets Bond Index - of which
Latin America is a large component
- - posted a return of 34.16% during
the period. In the U.S., uncertainty
over the direction of the economy
led to mixed bond market
performance. The Lehman Brothers
Aggregate Bond Index returned
3.63% in 1996.
An interview with John Carlson, Portfolio Manager of Fidelity Advisor
Emerging Markets Income Fund
Q. JOHN, HOW DID THE FUND PERFORM?
A. Very well. For the 12-month period that ended December 31, 1996, the
fund's Institutional Class shares returned 40.21%. To get a sense of how
the fund compared relative to its peer group, the emerging markets debt
funds average returned 40.70% over the same period, according to Lipper
Analytical Services. The J.P. Morgan Emerging Markets Bond Index Plus had a
12-month return of 39.30% as of December 31.
Q. WHAT WERE SOME OF THE IMPORTANT THEMES IN EMERGING MARKET DEBT OVER THE
PAST YEAR?
A. There were really three key themes that helped drive asset prices in
emerging market debt in the past year. First was the return of economic
growth to Latin America, particularly Mexico and Argentina. Our risk models
of different nations' sovereign debt have shown economic growth to be the
most important factor in a country's creditworthiness. The second recurring
theme was sharply rising crude oil prices which improved the financial
position of the oil exporting countries. Of the major oil exporters,
Ecuador, Venezuela and Nigeria all performed well, while only Mexico
lagged. The significance of rising oil prices goes beyond the simple
revenue windfall: Venezuela and Ecuador have used the cash to help them
tackle significant structural economic reforms. The third major theme was
the dramatic outperformance of non-restructured loans versus Brady
securities - U.S. dollar-denominated bonds of developing countries.
Q. DID ANY OTHER SPECIFIC DEVELOPMENTS TAKE PLACE?
A. Three events deserve mention. First, Moody's re-rated all Brady bonds -
which had been rated just below the issuing country's Eurobond external
debt - up to the level of the sovereign issuer. This took place early in
the year. Second, the fund realized excellent performance from its
positions in pre-Brady bonds, most notably those of Russia and Panama. The
market-friendly election of Boris Yeltsin, the perception that economic
reform was progressing and an increased sense of stability combined to make
Russian loans attractive. My overweighting - relative to the J.P. Morgan
index - in Panama worked to the fund's benefit as low inflation and a
balanced budget, among other factors, made for good performance. The fund
also benefited from its exposure to the non-restructured loans of Vietnam
and the Ivory Coast. Lastly, both Mexico and the Philippines initiated debt
buybacks, which was viewed positively by the market.
Q. YOU MENTIONED PRE-BRADY BONDS AS HAVING PLAYED A SIGNIFICANT ROLE IN THE
PORTFOLIO. CAN YOU EXPLAIN HOW THESE INSTRUMENTS WORK?
A. Sure. Pre-Bradys are loans made by multinational banks to sovereign
governments. These loans usually have gone through a default process for
one reason or another, and are traded in the market by banks and investment
banks. Typically, when emerging market countries undergo economic or
political reform and wish to re-enter the international capital markets,
the first step is to agree to terms and conditions on restructuring their
existing defaulted loans with the London Club - the group of issuing banks.
Once the parties come to an agreement, the pre-Brady loans become Brady
bonds.
Q. JOHN, ARE THERE ANY POCKETS OF THE WORLD THAT ARE RELATIVELY UNEXPLORED
FROM AN INVESTMENT STANDPOINT?
A. Africa, the world's poorest continent, has been largely ignored by
investors. Africa has extremely high debt levels, but the World Bank has
floated some debt relief proposals that may result in more opportunities
there.
Q. WHAT'S YOUR OUTLOOK?
A. I'm fairly optimistic. At present, the forces that have driven this
bull market remain in place; economic growth is picking up across our
universe of countries, and most countries enjoy rising levels of liquidity
driven by capital inflows and stronger oil prices. The most important issue
to monitor is continued progress on economic reform. It is crucial for
these countries to keep building on the momentum of the last 18 months. Two
examples of this are labor reform in Argentina and the prospects for a
currency board in Bulgaria. Also important is international liquidity and
the global appetite for risk. Emerging markets could suffer if G7 interest
rates - those in the seven leading industrial nations - went up sharply or
if there is a global recession.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.

FUND FACTS
GOAL: a high level of current
income by investing primarily
in debt securities and other
instruments of issuers in
emerging markets; as a
secondary objective, the
fund may seek capital
appreciation
START DATE: March 10, 1994
SIZE: as of December 31,
1996, more than $99 million
MANAGER: John Carlson,
since 1995; joined Fidelity in
1995
(checkmark)
JOHN CARLSON ON BOND OPTIONS:
"The fund had a large cash
position at the end of the
period, but actually was much
closer to being fully invested
than it appeared. Of the 21%
cash position, approximately
6 percentage points were
being held to cover call options
bought on Argentine bonds,
and 4 percentage points were
held to cover call options
bought on Bulgarian bonds.
Because the cash set aside
covered the entire underlying
face amount at value of the
bonds, no leverage was
employed. These options
gave the fund the right, but
not the obligation, to buy
these bonds at an
agreed-upon price at a
future date. Thus, the fund
was effectively invested in
these markets even though
the money set aside was
listed as part of the fund's
cash component. The
investment in call options had
the added benefit of limiting
the downside risk to the fund
because if the price of the
bonds fell and the fund didn't
exercise the options, the loss
would be limited to the option
premium paid."
INVESTMENT CHANGES

TOP FIVE COUNTRIES AS OF DECEMBER 31, 1996
(EXCLUDING CASH EQUIVALENTS) % OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO

Brazil 13.7 20.4

Argentina 13.0 18.8

Ecuador 12.8 4.5

Venezuela 12.5 9.5

Mexico 5.1 5.9

TOP COUNTRIES ARE BASED ON THE LOCATION OF THE ISSUER OF EACH SECURITY,
INDICATING WHERE THE FUND IS EXPOSED TO POLITICAL AND CREDIT RISKS.
TOP FIVE HOLDINGS AS OF DECEMBER 31, 1996
(BY ISSUER, EXCLUDING CASH EQUIVALENTS) % OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO

Argentinian Republic 12.9 15.9

Ecuador Republic 12.8 4.5

Venezuelan Republic 12.5 9.5

Brazilian Federative Republic 12.1 18.2

United Mexican States 5.1 4.8

AVERAGE YEARS TO MATURITY AS OF DECEMBER 31, 1996
6 MONTHS AGO

Years 14.0 12.5

AVERAGE YEARS TO MATURITY IS BASED ON THE AVERAGE TIME UNTIL PRINCIPAL
PAYMENTS ARE EXPECTED FROM EACH OF THE FUND'S BONDS, WEIGHTED BY DOLLAR
AMOUNT.
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF DECEMBER 31, 1996 AS OF JUNE 30, 1996
37
Row: 1, Col: 1, Value: 20.8
Row: 1, Col: 2, Value: 8.699999999999999
Row: 1, Col: 3, Value: 67.90000000000001
Row: 1, Col: 4, Value: 2.6
Corporate bonds 8.5%
Foreign
government
obligations 62.4%
Other 13.1%
Short-term
investments 16.0%
Corporate bonds 3.2%
Foreign
government
obligations 67.3%
Other 8.7%
Short-term
investments 20.8%
Row: 1, Col: 1, Value: 16.0
Row: 1, Col: 2, Value: 13.1
Row: 1, Col: 3, Value: 62.4
Row: 1, Col: 4, Value: 8.5
INVESTMENTS DECEMBER 31, 1996

Showing Percentage of Total Value of Investment in Securities

NONCONVERTIBLE BONDS - 3.2%
MOODY'S RATINGS (C) PRINCIPAL VALUE
(UNAUDITED) AMOUNT (A) (NOTE 1)
BRAZIL - 1.6%
TV Filme, Inc. yankee 12 7/8%, 12/15/04 (f) B2 $ 750,000 $ 752,813
Tevecap SA 12 5/8%, 11/26/04 (f) B2 900,000 920,250
TOTAL BRAZIL 1,673,063
CHINA (PEOPLES REPUBLIC) - 1.0%
AES China Generating Ltd. yankee
10 1/8%, 12/15/06 Ba3 1,015,000 1,053,063
SOUTH AFRICA - 0.6%
Eskom 0%, 9/1/02 Baa3 ZAR 6,750,000 613,468
TOTAL NONCONVERTIBLE BONDS
(Cost $3,319,112) 3,339,594

FOREIGN GOVERNMENT OBLIGATIONS (D) - 67.3%
ARGENTINA - 12.9%
Argentinian Republic:
BOCON (g):
3.414%, 4/1/01 BBB- ARS 4,004,806 3,491,423
3.414%, 9/1/02 BBB- ARS 1,312,100 1,015,410
3.414%, 4/1/07 BB- ARS 3,765,207 2,672,639
Brady euro par 5 1/4%, 3/31/23 (e) B1 9,665,000 6,094,991
TOTAL ARGENTINA 13,274,463
BRAZIL - 12.1%
Brazilian Federative Republic Brady:
capitalization bond 8%, 4/15/14 B1 6,481,563 4,780,153
exit bond euro 6%, 9/15/13 B1 2,750,000 1,973,125
par 5%, 4/15/24 (e) B1 4,750,000 2,989,531
FLIRB (e):
4 1/2%, 4/15/09 B1 2,250,000 1,608,750
4 1/2%, 4/15/09 (bearer) B1 1,500,000 1,072,500
TOTAL BRAZIL 12,424,059

FOREIGN GOVERNMENT OBLIGATIONS (D) - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE
(UNAUDITED) AMOUNT (A) (NOTE 1)
ECUADOR - 12.8%
Ecuador Republic Brady:
interest equalization bond euro
6 1/2%,12/21/04 (bearer) (g) - $ 1,125,000 $ 978,750
par euro 3 1/4%, 2/28/25 (e) - 9,050,000 4,179,969
past due interest 6 1/2%, 2/28/15 (g) - 793,042 485,738
past due interest euro
6 1/2%, 2/28/15 (bearer) (g) - 12,223,426 7,486,849
TOTAL ECUADOR 13,131,306
KAZAKHSTAN - 1.0%
Kazakhstan Republic 9 1/4%, 12/20/09 (f) - 1,000,000 1,007,500
MEXICO - 5.1%
Mexico Value recovery rights - 3,233,000 -
United Mexican States:
Brady (g):
discount A 6.4531%, 12/31/19 Ba2 1,100,000 946,000
discount B 6 3/8%, 12/31/19 Ba3 250,000 215,000
discount D 6.4531%, 12/31/19 Ba2 750,000 645,000
global bond 11 1/2%, 5/15/26 Ba2 3,196,000 3,375,009
TOTAL MEXICO 5,181,009
PANAMA - 4.8%
Panamanian Republic Brady:
interest reduction bond euro
3 1/2%, 7/17/14 (g) BB 4,085,000 2,831,416
past due interest euro 6 3/4%, 7/17/19 (e) BB 2,705,000 2,109,900
TOTAL PANAMA 4,941,316

FOREIGN GOVERNMENT OBLIGATIONS (D) - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE
(UNAUDITED) AMOUNT (A) (NOTE 1)
PERU - 1.9%
Peruvian Republic:
FLIRB 0%, 10/13/16 (f)(h) - $ 2,250,000 $ 1,230,469
past due interest 0%, 8/22/16 (f)(h) - 1,250,000 735,938
TOTAL PERU 1,966,407
PHILIPPINES - 1.1%
Philippine Government:
15 1/2%, 1/25/03 BBB+ PHP 6,000,000 233,754
8 3/4%, 10/7/16 (f) B1 875,000 903,438
TOTAL PHILIPPINES 1,137,192
RUSSIA - 2.3%
Russian Government:
interest notes 0%, 12/31/16 (f)(h) - 2,675,000 1,852,438
Principal loans 0%, 8/12/21 (h) - 925,000 539,969
TOTAL RUSSIA 2,392,407
SOUTH AFRICA - 0.8%
South African Republic 12%, 2/28/05 Baa1 ZAR 4,500,000 786,637
VENEZUELA - 12.5%
Venezuelan Republic:
Brady:
debt conversion bond 6 1/2%, 12/18/07 (g) Ba3 1,000,000 880,625
discount B 6 3/8%, 3/31/20 (g) Ba3 1,000,000 831,250
FLIRB A 6 5/8%, 3/31/07 (g) Ba3 3,000,000 2,673,750
FLIRB B 6.4375%, 3/31/07 (g) Ba3 1,500,000 1,336,875
par A euro 6 3/4%, 3/31/20 Ba3 6,600,000 5,040,750
par B euro 6 3/4%, 3/31/20 Ba3 2,750,000 2,100,314
oil recovery rights - 53,890 -
TOTAL VENEZUELA 12,863,564
TOTAL GOVERNMENT OBLIGATIONS
(Cost $63,110,763) 69,105,860

PURCHASED BANK DEBT - 0.2%
PRINCIPAL VALUE
AMOUNT (A) (NOTE 1)
VIETNAM - 0.2%
Socialist Republic of Vietnam loans restructured
under 1985 agreement (b)
(Cost $149,286) DEM 250,000 $ 160,558

SOVEREIGN LOAN PARTICIPATIONS - 8.2%
IVORY COAST - 2.3%
Ivory Coast restructured loan:
-Banque Paribas (b) 3,250,000 1,060,313
-The Chase Manhattan Bank (b) 1,250,000 407,813
-Morgan Guaranty Trust Company
of New York (b) 2,750,000 897,188
2,365,314
PERU - 2.7%
Peruvian Republic loan participation under 1983
agreement:
-Citibank N.A. (b) 350,000 399,000
-ING Bank N.V. (b) 400,000 456,000
-Morgan Grenfell & Co. Limited (b) 250,000 285,000
-Morgan Guaranty Trust Company
of New York (b) 1,450,000 1,653,000
2,793,000
RUSSIA - 2.2%
Bank for Foreign Economic Affairs of Russia
(Vnesheconombank) final loan:
-The Chase Manhattan Bank (b) 375,000 297,656
-ING Bank N.V (b). 600,000 476,250
-Morgan Guaranty Trust Company
of New York (b) 1,875,000 1,488,281
2,262,187
VIETNAM - 1.0%
Socialist Republic of Vietnam loan restructured
under 1985 agreement - ING Bank N.V. (b) DEM 1,550,000 995,459
TOTAL SOVEREIGN LOAN PARTICIPATIONS
(Cost $6,396,526) 8,415,960

CASH EQUIVALENTS - 20.8%
MATURITY VALUE
AMOUNT (NOTE 1)
Investments in repurchase agreements
(U.S. Treasury obligations) in a joint
trading account at 6 3/4%, dated
12/31/96 due 1/2/97
(Cost $21,406,000) (See Note 4) $ 21,414,028 $ 21,406,000

PURCHASED OPTIONS - 0.3%
EXPIRATION DATE/ UNDERLYING FACE
STRIKE PRICE AMOUNT AT VALUE
ARGENTINA - 0.1%
Merrill Lynch International Call Option
on $6,860,000 notional amount of
Argentinian Republic Brady floating
rate bonds 6 5/8%, 3/31/05 Jan. 97/86 $ 5,976,775 102,214
BULGARIA - 0.2%
First National Bank of Boston Call
Option on $5,500,000 notional amount
of Bulgarian Republic Brady FLIRB
2 1/4%, 7/28/12 Feb. 97/36 5/8 2,096,875 155,100
The Chase Manhattan Bank Call Option
on $5,500,000 notional amount of
Bulgarian Republic Brady FLIRB
2 1/4%, 7/28/12 Mar. 97/40 7/8 2,096,875 57,750
212,850
TOTAL PURCHASED OPTIONS
(Cost $381,000) 315,064
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $94,762,687) $ 102,743,036
SECURITY TYPE ABBREVIATIONS
FLIRB - Front Loaded Interest Reduction Bonds
CURRENCY ABBREVIATIONS
ARS - Argentine peso
DEM - German deutsche mark
PHP - Philippine peso
ZAR - South African rand
LEGEND
1. Principal amount is stated in United States dollars unless otherwise
noted.
2. Non-income producing.
3. Standard & Poor's credit ratings are used in the absence of a rating by
Moody's Investors Service, Inc.
4. Some 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.
5. Debt obligation initially issued at one coupon which converts to a
higher coupon at a specified date.
6. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $7,402,846 or 7.4% of net
assets.
7. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
8. Security purchased on a delayed delivery basis (see Note 2 of Notes to
Financial Statements).
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 0.0% AAA, AA, A 0.0%
Baa 1.4% BBB 6.0%
Ba 18.6% BB 20.3%
B 20.5% B 25.3%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
For some foreign government obligations, FMR has assigned the ratings of
the sovereign credit of the issuing government. The percentage not rated by
both S&P and Moody's amounted to 26.4%. FMR has determined that unrated
debt securities that are lower quality account for 26.4% of the total value
of investment in securities.
INCOME TAX INFORMATION
At December 31, 1996, the aggregate cost of investment securities for
income tax purposes was $95,365,845. Net unrealized appreciation aggregated
$7,377,191, of which $7,572,662 related to appreciated investment
securities and $195,471 related to depreciated investment securities.
The fund hereby designates approximately $78,000 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>
DECEMBER 31, 1996

ASSETS $ 102,743,036
Investment in securities, at value (including repurchase
agreements of
$21,406,000) (cost $94,762,687) - See accompanying schedule

Cash 521,217

Receivable for investments sold

Regular Delivery 1,950,862

Delayed Delivery 2,537,063

Receivable for fund shares sold 230,152

Interest receivable 1,113,865

Other receivables 7,365

Prepaid expenses 13,415

TOTAL ASSETS 109,116,975

LIABILITIES $ 3,218,301
Payable for investments purchased
Regular delivery

Delayed delivery 5,647,728

Distributions payable 362,981

Accrued management fee 55,306

Distribution fees payable 29,455

Other payables and accrued expenses 79,423

TOTAL LIABILITIES 9,393,194

NET ASSETS $ 99,723,781

Net Assets consist of: $ 86,930,394
Paid in capital

Undistributed net investment income 306,279

Accumulated undistributed net realized gain (loss) on investments 4,506,628
and foreign currency transactions

Net unrealized appreciation (depreciation) on investments 7,980,480
and assets and liabilities in foreign currencies

NET ASSETS $ 99,723,781

CALCULATION OF MAXIMUM OFFERING PRICE $11.72
CLASS A:
NET ASSET VALUE and redemption price per share
($477,985 (divided by) 40,792 shares)

Maximum offering price per share (100/95.75 of $11.72) $12.24

CLASS T: $11.71
NET ASSET VALUE and redemption price per share
($78,860,711 (divided by) 6,732,946 shares)

Maximum offering price per share (100/96.50 of $11.71) $12.13

CLASS B: $11.75
NET ASSET VALUE and offering price per share
($17,745,599 (divided by) 1,510,684 shares) A

INSTITUTIONAL CLASS: NET ASSET VALUE, offering price and $11.65
redemption
price per share ($2,639,486 (divided by) 226,502 shares)

</TABLE>

A 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 DECEMBER 31, 1996

INVESTMENT INCOME 6,127,860
Interest

EXPENSES

Management fee $ 488,344

Transfer agent fees 449
Class A

Class T 149,939

Class B 40,225

Institutional Class 4,496

Distribution fees 147
Class A

Class T 138,085

Class B 117,763

Accounting fees and expenses 62,296

Non-interested trustees' compensation 261

Custodian fees and expenses 38,614

Registration fees 12,692
Class A

Class T 25,615

Class B 13,597

Institutional Class 20,951

Audit 37,663

Legal 706

Miscellaneous 18,846

Total expenses before reductions 1,170,689

Expense reductions (46,458) 1,124,231

NET INVESTMENT INCOME 5,003,629

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

Investment securities 14,787,918

Foreign currency transactions (16,690) 14,771,228

Change in net unrealized appreciation (depreciation) on:

Investment securities 4,852,153

Assets and liabilities in foreign currencies 617 4,852,770

NET GAIN (LOSS) 19,623,998

NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 24,627,627
FROM OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1996 1995

INCREASE (DECREASE) IN NET ASSETS

Operations $ 5,003,629 $ 3,710,621
Net investment income

Net realized gain (loss) 14,771,228 (5,452,277)

Change in net unrealized appreciation (depreciation) 4,852,770 6,396,714

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 24,627,627 4,655,058
FROM OPERATIONS

Distributions to shareholders (5,916) -
From net investment income
Class A

Class T (3,931,995) (3,105,070)

Class B (844,871) (590,979)

Institutional Class (136,492) (4,785)

From net realized gain (15,462) -
Class A

Class T (2,638,864) -

Class B (595,454) -

Institutional Class (87,836) -

TOTAL DISTRIBUTIONS (8,256,890) (3,700,834)

Share transactions - net increase (decrease) 37,461,113 9,874,830

TOTAL INCREASE (DECREASE) IN NET ASSETS 53,831,850 10,829,054

NET ASSETS

Beginning of period 45,891,931 35,062,877

End of period (including under (over) distribution of net $ 99,723,781 $ 45,891,931
investment income of $306,279 and $(276,131),
respectively)

</TABLE>

FINANCIAL HIGHLIGHTS - CLASS A
YEAR ENDED
DECEMBER 31,

1996 D

SELECTED PER-SHARE DATA

Net asset value, beginning of period $ 10.520

Income from Investment Operations

Net interest income .274 F

Net realized and unrealized gain (loss) 1.574

Total from investment operations 1.848

Less Distributions

From net interest income (.238)

From net realized gain (.410)

Total distributions (.648)

Net asset value, end of period $ 11.720

TOTAL RETURN B, C 17.71%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted) $ 478

Ratio of expenses to average net assets 1.40% A,
E

Ratio of net interest income to average net assets 7.31% A

Portfolio turnover rate 410%

1996 1995 1994 D

<TABLE>
<CAPTION>
<S> <C> <C> <C>
SELECTED PER-SHARE DATA

Net asset value, beginning of period $ 9.280 $ 9.520 $ 10.000

Income from Investment Operations

Net interest income .758 G .860 .356

Net realized and unrealized gain (loss) 2.832 (.323) F (.073)

Total from investment operations 3.590 .537 .283

Less Distributions

From net interest income (.750) (.777) (.503)

From net realized gain (.410) - (.260)

Total distributions (1.16) (.777) (.763)

Net asset value, end of period $ 11.710 $ 9.280 $ 9.520

TOTAL RETURN B, C 40.41% 6.99% 2.47%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted) $ 78,861 $ 36,205 $ 30,029

Ratio of expenses to average net assets 1.49% 1.50% 1.50% A,
E E

Ratio of expenses to average net assets after 1.48% 1.50% 1.50% A
expense reductions H

Ratio of net interest income to average net assets 7.23% 9.32% 6.60% A

Portfolio turnover rate 410% 305% 354% A

</TABLE>

A ANNUALIZED
A TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 6 OF NOTES TO FINANCIAL
STATEMENTS).
A FOR THE PERIOD MARCH 10, 1994 (COMMENCEMENT OF SALE OF CLASS T SHARES) TO
DECEMBER 31, 1994.
A FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE
BEEN HIGHER (SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS).
A THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH THE
AGGREGATE NET GAIN (LOSS) ON INVESTMENTS FOR THE PERIOD DUE TO THE TIMING
OF SALES AND REPURCHASES OF CLASS SHARES IN RELATION TO FLUCTUATING MARKET
VALUES OF THE INVESTMENTS OF THE FUND.
A NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
A FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES (SEE NOTE 6 OF
NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - CLASS B
YEARS ENDED DECEMBER 31,

1996 1995 1994 D

<TABLE>
<CAPTION>
<S> <C> <C> <C>
SELECTED PER-SHARE DATA

Net asset value, beginning of period $ 9.300 $ 9.520 $ 9.700

Income from Investment Operations

Net interest income .686 G .835 .167

Net realized and unrealized gain (loss) 2.853 (.342) F .227

Total from investment operations 3.539 .493 .394

Less Distributions

From net interest income (.679) (.713) (.314)

From net realized gain (.410) - (.260)

Total distributions (1.089) (.713) (.574)

Net asset value, end of period $ 11.750 $ 9.300 $ 9.520

TOTAL RETURN B, C 39.61% 6.38% 3.67%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted) $ 17,746 $ 9,486 $ 5,034

Ratio of expenses to average net assets 2.15% 2.25% 2.25% A,
E E E

Ratio of net interest income to average net assets 6.56% 8.48% 5.86% A

Portfolio turnover rate 410% 305% 354% A

</TABLE>

A ANNUALIZED
A TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 6 OF NOTES TO FINANCIAL
STATEMENTS).
A FOR THE PERIOD JUNE 30, 1994 (COMMENCEMENT OF SALE OF CLASS B SHARES) TO
DECEMBER 31, 1994.
A FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE
BEEN HIGHER (SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS).
A THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH THE
AGGREGATE NET GAIN (LOSS) ON INVESTMENTS FOR THE PERIOD DUE TO THE TIMING
OF SALES AND REPURCHASES OF CLASS SHARES IN RELATION TO FLUCTUATING MARKET
VALUES OF THE INVESTMENTS OF THE FUND.
A NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
YEARS ENDED DECEMBER
31,

1996 1995 D

SELECTED PER-SHARE DATA

Net asset value, beginning of period $ 9.280 $ 8.400

Income from Investment Operations

Net interest income .786 G .393

Net realized and unrealized gain (loss) 2.779 .876 F

Total from investment operations 3.565 1.269

Less Distributions

From net interest income (.785) (.389)

From net realized gain (.410) -

Total distributions (1.195) (.389)

Net asset value, end of period $ 11.650 $ 9.280

TOTAL RETURN B, C 40.21% 15.52%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted) $ 2,639 $ 201

Ratio of expenses to average net assets 1.25% 1.25% A,
E E

Ratio of net interest income to average net assets 7.46% 9.09% A

Portfolio turnover rate 410% 305%

A ANNUALIZED
A TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 6 OF NOTES TO FINANCIAL
STATEMENTS).
A FOR THE PERIOD JULY 3, 1995 (COMMENCEMENT OF SALE OF INSTITUTIONAL CLASS
SHARES) TO DECEMBER 31, 1995.
A FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE
BEEN HIGHER (SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS).
A THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH THE
AGGREGATE NET GAIN (LOSS) ON INVESTMENTS FOR THE PERIOD DUE TO THE TIMING
OF SALES AND REPURCHASES OF CLASS SHARES IN RELATION TO FLUCTUATING MARKET
VALUES OF THE INVESTMENTS OF THE FUND.
A NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
NOTES TO FINANCIAL STATEMENTS
For the period ended December 31, 1996

1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Emerging Markets Income 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, Class T, Class B, and Institutional Class shares,
each of which has equal rights as to assets and voting privileges. Each
class has exclusive voting rights with respect to its distribution plan.
The fund commenced sale of a new Class A of shares on September 3, 1996. On
this date, the original Class A was renamed Class T. Investment income,
realized and unrealized capital gains and losses, the common expenses of
the fund, and certain fund-level expense reductions are allocated on a pro
rata basis to each class based on the relative net assets of each class to
the total net assets of the fund. Each class of shares differs in its
respective distribution, transfer agent, registration, and certain other
class-specific fees, expenses, and expense reductions.
The financial statements have been prepared in conformity with generally
accepted accounting principles which permit management to make certain
estimates and assumptions at the date of the financial statements. The
following summarizes the significant accounting policies of the fund:
SECURITY VALUATION. Securities for which quotations are readily available
are valued at the last sale price, or if no sale price, at the closing bid
price in the principal market in which such securities are normally traded.
Securities (including restricted securities) for which quotations are not
readily available are valued primarily using dealer-supplied valuations or
at their fair value as determined in good faith under consistently applied
procedures under the general supervision of the Board of Trustees.
Short-term securities with remaining maturities of sixty days or less for
which quotations are not readily available are valued at amortized cost or
original cost plus accrued interest, both of which approximate current
value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Income receipts
and expense payments are translated into U.S. dollars at the prevailing
exchange rate on the respective dates of the transactions. Purchases and
sales of securities are translated into U.S. dollars at the contractual
currency exchange rates established at the time of each trade.
Net realized gains and losses on foreign currency transactions represent
net gains and losses from sales and maturities of forward currency
contracts and foreign currency options, disposition of foreign currencies,
and the difference between the amount of net investment
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
FOREIGN CURRENCY TRANSLATION -
CONTINUED
income accrued and the U.S. dollar amount actually received. The effects of
changes in foreign currency exchange rates on investments in securities are
included with the net realized and unrealized gain or loss on investment
securities.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to U.S. federal
income taxes to the extent that it distributes substantially all of its
taxable income for its fiscal year. The fund may be subject to foreign
taxes on income, gains on investments or currency repatriation. The fund
accrues such taxes as applicable. The schedule of investments includes
information regarding income taxes under the caption "Income Tax
Information."
INVESTMENT INCOME. Interest income, which includes accretion of original
issue discount, is accrued as earned. Interest income is recorded net of
foreign taxes withheld where recovery of such taxes is uncertain.
PREPAID EXPENSES. Fidelity Management & Research Company (FMR) bears all
organizational expenses except for registering and qualifying each class
and shares of each class for distribution under federal and state
securities law. These expenses are borne by each class and amortized over
one year.
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS.
Distributions are declared daily and paid monthly from net investment
income. Distributions from realized gains, if any, 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 pro rata basis based on the number of shares
outstanding for 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, which may result in distribution
reclassifications, 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 the per-share allocation between net investment income and realized
and unrealized gain (loss). Undistributed net investment income and
accumulated undistributed net realized gain (loss) on investments and
foreign currency transactions may include temporary book and tax basis
differences which will reverse in a subsequent period.
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS -
CONTINUED
Any taxable income or gain remaining at fiscal year end is distributed in
the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated securities.
Losses may arise from changes in the value of the foreign currency or if
the counterparties do not perform under the contracts' terms. The U.S.
dollar value of foreign currency contracts is determined using contractual
currency exchange rates established at the time of each trade. The cost of
the foreign currency contracts is included in the cost basis of the
associated investment.
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 for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
Securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are marked-to-market
daily and maintained at a value at least equal to the principal amount of
the repurchase agreement (including accrued interest). FMR, the fund's
investment adviser, is responsible for determining that the value of the
underlying securities remains in accordance with the market value
requirements stated above.
WHEN-ISSUED SECURITIES. The fund may purchase or sell securities on a
when-issued basis. Payment and delivery may take place a month or more
after the date of the transaction. The price of the underlying securities
is fixed at the time the transaction is negotiated. The market value of the
securities purchased on a when-issued or forward commitment basis are
identified as such in the fund's schedule of investments. The fund may
receive compensation for interest forgone in the purchase of a delayed
delivery security. With respect to purchase commitments, the fund
identifies securities as segregated in its custodial records with a value
at least equal to the amount of the commitment. The payables and
receivables associated with the purchases and sales of when-issued
securities having the same settlement date and broker are offset.
When-issued securities that have been purchased from and sold to different
brokers are reflected as both payables and receivables in the accompanying
balance sheet under the caption "Delayed delivery." Losses may arise due to
changes in the market value of the
2. OPERATING POLICIES -
CONTINUED
WHEN-ISSUED SECURITIES - CONTINUED
underlying securities, or if the counterparty does not perform under the
contract, or if the issuer does not issue the securities due to political,
economic, or other factors.
OPTIONS. The fund may use options to manage its exposure to the bond
markets and to fluctuations in interest rates and currency values. Writing
puts and buying calls tend to increase the fund's exposure to the
underlying instrument. Buying puts and writing calls tend to decrease the
fund's exposure to the underlying instrument, or hedge other fund
investments. The underlying face amount at value of any open options at
period end is shown in the schedule of investments under the captions
"Purchased Options." This amount reflects each contract's exposure to the
underlying instrument at period end. Losses may arise from changes in the
value of the underlying instruments, if there is an illiquid secondary
market for the contracts, or if the counterparties do not perform under the
contracts' terms.
Exchange-traded options are valued using the last sale price or, in the
absence of a sale, the last offering price. Options traded over-the-counter
are valued using dealer-supplied valuations.
RESTRICTED SECURITIES. The fund is permitted to invest in securities that
are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from
registration or to the public if the securities are registered. Disposal of
these securities may involve time-consuming negotiations and expense, and
prompt sale at an acceptable price may be difficult. At the end of the
period, the fund had no investments in restricted securities (excluding
144A issues).
LOANS AND OTHER DIRECT DEBT INSTRUMENTS. The fund is permitted to invest in
loans and loan participations, trade claims or other receivables. These
investments may include standby financing commitments that obligate the
fund to supply additional cash to the borrower on demand. Loan
participations involve a risk of insolvency of the lending bank or other
financial intermediary. At the end of the period, these investments
amounted to $8,415,960 or 8.4% of net assets.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $279,636,280 and $258,996,267, respectively.
4. JOINT TRADING ACCOUNT.
At the end of the period, the fund had 20% or more of its total investments
in repurchase agreements through a joint trading account. These repurchase
agreements were with entities whose creditworthiness has been reviewed and
found satisfactory by FMR. The maturity values of the joint trading account
investments were $21,414,028 at 6.75%.
4. JOINT TRADING ACCOUNT - CONTINUED
The investments in repurchase agreements through the joint trading account
are summarized as follows:
SUMMARY OF JOINT TRADING
(DOLLAR AMOUNTS IN THOUSANDS)
Dated December 31, 1996, due January 2, 1997
Number of dealers or banks 20
Maximum amount with one dealer or bank 17.6%
Aggregate principal amount of agreements $19,054,743
Aggregate maturity amount of agreements $19,061,891
Aggregate market value of transferred assets $19,440,452
Coupon rates of transferred assets 0% to 15.75%
Maturity dates of transferred assets 01/15/97 to 11/15/26
5. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly
fee that is calculated on the basis of a group fee rate plus a fixed
individual fund fee rate applied to the average net assets of the fund. The
group fee rate is the weighted average of a series of rates and is based on
the monthly average net assets of all the mutual funds advised by FMR. The
rates ranged from .1100% to .3700% for the period. In the event that these
rates were lower than the contractual rates in effect during the period,
FMR voluntarily implemented the above rates, as they resulted in the same
or a lower management fee. The annual individual fund fee rate is .55%. For
the period, the management fee was equivalent to an annual rate of .69% of
average net assets.
SUB-ADVISER FEE. FMR, on behalf of the fund, entered into sub-advisory
agreements with Fidelity Management & Research (U.K.) Inc., Fidelity
Management & Research Far East Inc., and Fidelity International Investment
Advisors (FIIA), and Fidelity Investment Japan Ltd. In addition, FIIA
entered into a sub-advisory agreement with its subsidiary, Fidelity
International Investment Advisors (U.K.) Limited (FIIAL U.K.).
Under the sub-advisory arrangements, FMR may receive investment advice and
research services and may grant the sub-advisers investment management
authority to buy and sell securities. FMR pays its sub-advisers either a
portion of its management fee or a fee based on costs incurred for these
services. FIIA pays FIIAL U.K. a fee based on costs incurred for either
service.
5. 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), Class T shares (Class T Plan),
Class B shares (Class B Plan), and Institutional Class shares (collectively
referred to as "the Plans"). Under the Class A, Class T, and Class B Plans
the fund pays Fidelity Distributors Corporation (FDC), an affiliate of FMR,
a distribution and service fee. This fee is based on annual rates of .15%,
.25%. and .90% (of which .65% represents a distribution fee and .25%
represents a shareholder service fee), of the average net assets of the
Class A, Class T, and Class B shares, respectively. For the period, the
fund paid FDC $147, $138,085, and $117,763 under the Class A, Class T, and
Class B Plans, of which $147, $138,085, and $32,712 were paid to securities
dealers, banks and other financial institutions for the distribution of
Class A, Class T, and Class B shares, and providing shareholder support
services.
Under the Plans, FMR or FDC may use its resources to pay administrative and
promotional expenses related to the sale of the fund's Class A, Class T,
Class B, and Institutional Class shares. The Plans also authorize payments
to third parties that assist in the sale of the fund's shares or render
shareholder support services.
SALES LOAD. FDC receives a front-end sales charge of up to 4.25% and 3.50%
for selling Class A and Class T shares of the fund, respectively, and the
proceeds of a contingent deferred sales charge levied on Class B share
redemptions occurring within five years of purchase. The Class B charge is
based on declining rates which range from 4% to 1% of the lesser of the
cost of shares at the initial date of purchase or the net asset value of
the redeemed shares, excluding any reinvested dividends and capital gains.
Effective January 2, 1997, the Board of Trustees approved a revised Class B
contingent deferred sales charge for shares purchased on or after January
2, 1997. Under the revised arrangement, FDC receives the proceeds of a
contingent deferred sales charged levied on Class B share redemptions
occurring within six years of purchase. The Class B charge is based on
declining rates which range from 5% to 1% of the lesser of the cost of
shares at the initial date of purchase or the net asset value of the
redeemed shares, excluding any reinvested dividends and capital gains.
For the period, FDC received sales charges of $9,186 and $270,379 on sales
of Class A and Class T shares of the fund, of which $8,088 and $227,955
were paid to securities dealers, banks, and other financial institutions.
FDC also received contingent deferred sales charges of $46,800 on Class B
share redemptions from the fund. When Class B shares are initially sold,
FDC pays commissions from its own resources to dealers through which the
sales are made.
5. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
TRANSFER AGENT FEES. Fidelity Investments Institutional Operations Company
(FIIOC), an affiliate of FMR, is the transfer, dividend disbursing, and
shareholder servicing agent for the fund's Class A , Class B, and
Institutional Class Shares, while State Street Bank and Trust Company
(State Street) (collectively, with FIIOC, referred to as the Transfer
Agents) acts in that capacity for the fund's Class T shares. The Transfer
Agents receive account fees and asset-based fees that vary according to
account size and type of account of the shareholders of the respective
classes of the fund. With respect to the Class T shares, State Street has
delegated certain transfer, dividend disbursing, and shareholder services
to FIIOC for which FIIOC receives its allocable share of all such fees.
FIIOC pays for typesetting, printing and mailing of all shareholder
reports, except proxy statements. For the period, the transfer agent fees
were equivalent to annual rates of .46%, .27%, .31%, and .24% of the
average net assets of Class A, Class T, Class B, and Institutional Class,
respectively.
Effective January 1, 1997, FIIOC will replace State Street as the transfer
agent for the fund's Class T shares.
ACCOUNTING FEES. Fidelity Service Co. (FSC), an affiliate of FMR, maintains
the fund's accounting records. The fee is based on the level of average net
assets for the month plus out-of-pocket expenses.
6. EXPENSE REDUCTIONS.
FMR voluntarily agreed to reimburse operating expenses (excluding interest,
taxes, brokerage commissions and extraordinary expenses) above the
following annual rates of average net assets for Class A, Class B, and
Institutional Class.
CLASS A. For the period, this expense limitation was 1.40% of average net
assets and the reimbursement reduced expenses by $12,684.
CLASS B. For the period, this expense limitation was 2.15% of average net
assets and the reimbursement reduced expenses by $11,145.
INSTITUTIONAL CLASS . For the period, this expense limitation was 1.25% of
average net assets and the reimbursement reduced expenses by $19,197.
In addition, the fund has entered into an arrangement with its custodian
whereby interest earned on uninvested cash balances was used to offset a
portion of the fund's expenses. During the period, the fund's custodian
fees were reduced by $3,432 under this arrangement.
7. CREDIT RISK.
The fund's relatively large investment in countries with limited or
developing capital markets may involve greater risks than investments in
more developed markets and the prices of such investments may be volatile.
The yields of emerging market debt obligations reflect, among other things,
perceived credit risk. The consequences of political, social or economic
changes in these markets may
have disruptive effects on the market prices of the fund's investments and
the income they generate, as well as the fund's ability to repatriate such
amounts.
8. BENEFICIAL INTEREST.
At the end of the period, FMR was record owner of approximately 8% of the
total outstanding shares.
9. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SHARES DOLLARS

YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,

1996 A 1995 B 1996 A 1995 B

CLASS A 45,480 - $ 518,247 $ -
Shares sold

Reinvestment of distributions 1,560 - 18,190 -

Shares redeemed (6,248) - (75,540) -

Net increase (decrease) 40,792 - $ 460,897 $ -

CLASS T 8,120,736 4,482,343 $ 85,014,110 $ 36,686,496
Shares sold

Reinvestment of distributions 523,792 330,013 5,729,874 2,753,394

Shares redeemed (5,813,045) (4,066,720) (60,826,882) (33,780,229)

Net increase (decrease) 2,831,483 745,636 $ 29,917,102 $ 5,659,661

CLASS B 657,075 632,120 $ 6,890,016 $ 5,203,888
Shares sold

Reinvestment of distributions 116,167 61,187 1,270,300 513,286

Shares redeemed (282,713) (201,754) (2,964,969) (1,691,703)

Net increase (decrease) 490,529 491,553 $ 5,195,347 $ 4,025,471

INSTITUTIONAL CLASS 1,151,436 21,145 $ 12,012,762 $ 185,008
Shares sold

Reinvestment of distributions 19,417 540 214,294 4,690

Shares redeemed (966,036) - (10,339,289) -

Net increase (decrease) 204,817 21,685 $ 1,887,767 $ 189,698

</TABLE>

To the Trustees of Fidelity Advisor Series VIII and the Shareholders of
Fidelity Advisor Emerging Markets Income Fund:
We have audited the accompanying statement of assets and liabilities of
Fidelity Advisor Series VIII: Fidelity Advisor Emerging Markets Income
Fund, including the schedule of portfolio investments, as of December 31,
1996, and the related statement of operations, the statement of changes in
net assets, and the financial highlights of Class A, Class B, Class T and
Institutional Class for each of the periods indicated therein. 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 audit.
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 December 31, 1996 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 Emerging Markets Income
Fund, as of December 31, 1996, the results of its operations, the changes
in its net assets, and the financial highlights of Class A, Class B, Class
T and Institutional Class for each of the periods indicated therein, in
conformity with generally accepted accounting principles.
/s/COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
February 13, 1997
DISTRIBUTIONS

The Board of Trustees of Fidelity Advisor Emerging Markets Income Fund -
Institutional Class voted to pay on February 10, 1997, to shareholders of
record at the opening of business on February 7, 1997, a distribution of
$.19 per share derived from capital gains realized from sales of portfolio
securities.

INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Fred L. Henning, Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
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 *
ADVISORY BOARD
William O. McCoy
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
* INDEPENDENT TRUSTEES
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
Fidelity Investments Institutional Operations Company
Boston, MA
CUSTODIAN
The Chase Manhattan Bank
Brooklyn, NY
FOCUS FUNDS
Fidelity Advisor Consumer
Industries Fund
Fidelity Advisor Cyclical
Industries Fund
Fidelity Advisor Financial
Services Fund
Fidelity Advisor Health Care Fund
Fidelity Advisor Natural
Resources Fund
Fidelity Advisor Technology Fund
Fidelity Advisor Utilities Growth Fund
GROWTH FUNDS
Fidelity Advisor TechnoQuant(trademark)
Growth Fund
Fidelity Advisor Overseas Fund
Fidelity Advisor Mid Cap Fund
Fidelity Advisor Equity Growth Fund
Fidelity Advisor Growth
Opportunities Fund
Fidelity Advisor Strategic
Opportunities Fund
Fidelity Advisor Large Cap Fund
GROWTH AND INCOME FUNDS
Fidelity Advisor Growth & Income Fund
Fidelity Advisor Equity Income Fund
Fidelity Advisor Balanced Fund
TAXABLE INCOME FUNDS
Fidelity Advisor Emerging Markets Income Fund
Fidelity Advisor High Yield Fund
Fidelity Advisor Strategic Income Fund
Fidelity Advisor Government Investment Fund
Fidelity Advisor Intermediate Bond Fund
Fidelity Advisor Short Fixed-Income Fund
MUNICIPAL FUNDS
Fidelity Advisor High Income
Municipal Fund
Fidelity Advisor Municipal Bond Fund
Fidelity Advisor Intermediate Municipal Income Fund
Fidelity Advisor Short-Intermediate Municipal Income Fund
STATE MUNICIPAL FUNDS
Fidelity Advisor California Municipal Income Fund
Fidelity Advisor New York Municipal Income Fund
MONEY MARKET FUNDS
Daily Money Fund: Money Market Portfolio
Daily Money Fund: U.S. Treasury Portfolio
Daily Tax-Exempt Money Fund

(REGISTERED TRADEMARK)

(2_FIDELITY_LOGOS)FIDELITY ADVISOR
(registered trademark)

EMERGING MARKETS INCOME
FUND - CLASS A, CLASS T (FORMERLY
CLASS A), AND CLASS B
ANNUAL REPORT
DECEMBER 31, 1996
CONTENTS

PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.

PERFORMANCE 4 How the fund has done over time.

FUND TALK 15 The manager's review of fund
performance, strategy and outlook.

INVESTMENT CHANGES 18 A summary of major shifts in the
fund's investments over the past six
months.

INVESTMENTS 19 A complete list of the fund's
investments with their market
values.

FINANCIAL STATEMENTS 25 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.

NOTES 32 Notes to financial statements.

REPORT OF INDEPENDENT 40 The auditors' opinion.
ACCOUNTANTS

DISTRIBUTIONS 41

Advisor Emerging Markets Income - Class A 40.43% 53.95%

Advisor Emerging Markets Income - Class A 34.46% 47.41%
(incl. max. 4.25% sales charge)

J.P. Morgan Emerging Markets Bond Index Plus 39.30% 58.24%

Emerging Markets Debt Funds Average 40.70% n/a

CUMULATIVE TOTAL RETURNS show Class A's performance in percentage terms
over a set period - in this case, one year, or since the fund started on
March 10, 1994. For example, if you had invested $1,000 in a fund that had
a 5% return over the past year, the value of your investment would be
$1,050. You can compare Class A's returns to those of the J.P. Morgan
Emerging Markets Bond Index Plus - a market capitalization weighted total
return index of U.S. dollar- and other external currency-denominated Brady
bonds, loans, Eurobonds, and local market debt instruments traded in
emerging markets. To measure how Class A's performance stacked up against
its peers, you can compare it to the emerging markets debt funds average,
which reflects the performance of 16 mutual funds with similar objectives
tracked by Lipper Analytical Services, Inc. over the past one year. These
benchmarks reflect reinvestment of dividends and capital gains, if any, and
exclude the effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1996 PAST 1 LIFE OF
YEAR FUND

Advisor Emerging Markets Income - Class A 40.43% 16.56%

Advisor Emerging Markets Income - Class A 34.46% 14.77%
(incl. max. 4.25% sales charge)

J.P. Morgan Emerging Markets Bond Index Plus 39.30% 17.70%

Emerging Markets Debt Funds Average 40.70% n/a

$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Emerging Markets Income Fund - Class A on
March 10, 1994, when the fund started, and the current maximum 4.25% sales
charge was paid. As the chart shows, by December 31, 1996, the value of the
investment would have grown to $14,741 - a 47.41% increase on the initial
investment. For comparison, look at how the J.P. Morgan Emerging Markets
Bond Index Plus did over the same period. With dividends and capital gains,
if any, reinvested, the same $10,000 investment would have grown to $15,824
- - a 58.24% increase.
UNDERSTANDING
PERFORMANCE
Many markets around the globe
offer the potential for significant
growth over time; however,
investing in foreign markets means
assuming greater risks than
investing in the United States.
Factors like changes in a
country's financial markets, its
local political and economic
climate, and the fluctuating value
of its currency create these risks.
For these reasons an international
fund's performance may be more
volatile than a fund that invests
exclusively in the United States.
Past performance is no guarantee
of future results and you may have
a gain or loss when you sell your
shares.
(checkmark)
<TABLE>
<CAPTION>
<S> <C> <C>
TOTAL RETURN COMPONENTS
YEARS ENDED DECEMBER MARCH 10, 1994
31, (COMMENCEMEN
T
OF OPERATIONS)
TO
DECEMBER 31,

1996 1995 1994

Dividend return 9.38% 9.51% 4.80%

Capital appreciation return 31.05% -2.52% -2.33%

Total return 40.43% 6.99% 2.47%
</TABLE>
TOTAL RETURN COMPONENTS include both dividend returns and capital
appreciation returns. A dividend return reflects the actual dividends paid
by the class. A capital appreciation return reflects both the amount paid
by the class to shareholders as capital gain distributions and changes in
the class' share price. Both returns assume the dividends or gains are
reinvested and exclude the effect of the sales charge.
DIVIDENDS AND YIELD
PERIODS ENDED DECEMBER 31, 1996 PAST LIFE OF
MONTH CLASS

Dividends per share 6.12(cents) 23.82(cents)

Annualized dividend rate 6.05% 6.31%

30-day annualized yield n/a -

DIVIDENDS per share show the income paid by the class for a set period. If
you annualize this number, based on an average net asset value of $11.91
over the past month, and $11.58 over the life of the class , you can
compare the class' income distributions over these two periods. The 30-day
annualized YIELD is a standard formula for all bond funds based on the
yields of the bonds in the fund, averaged over the past 30 days. This
figure shows you the yield characteristics of the fund's investments at the
end of the period. It also helps you to compare funds from different
companies on an equal basis. The offering share price used in the
calculation of the yield includes the effect of Class A's maximum 4.25%
sales charge. Yield information will be reported once Class A has a longer,
more stable operating history.
ADVISOR EMERGING MARKETS INCOME FUND - CLASS T
PERFORMANCE: THE BOTTOM LINE

Advisor Emerging Markets Income - Class T 40.41% 53.93%

Advisor Emerging Markets Income - Class T 35.50% 48.54%
(incl. max. 3.50% sales charge)

J.P. Morgan Emerging Markets Bond Index Plus 39.30% 58.24%

Emerging Markets Debt Funds Average 40.70% n/a

CUMULATIVE TOTAL RETURNS show Class T's performance in percentage terms
over a set period - in this case, one year, or since the fund started on
March 10, 1994. For example, if you had invested $1,000 in a fund that had
a 5% return over the past year, the value of your investment would be
$1,050. You can compare Class T's returns to those of the J.P. Morgan
Emerging Markets Bond Index Plus - a market capitalization weighted total
return index of U.S. dollar- and other external currency-denominated Brady
bonds, loans, Eurobonds, and local market debt instruments traded in
emerging markets. To measure how Class T's performance stacked up against
its peers, you can compare it to the emerging markets debt funds average,
which reflects the performance of 16 mutual funds with similar objectives
tracked by Lipper Analytical Services, Inc. over the past one year. These
benchmarks reflect reinvestment of dividends and capital gains, if any, and
exclude the effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1996 PAST 1 LIFE OF
YEAR FUND

Advisor Emerging Markets Income - Class T 40.41% 16.55%

Advisor Emerging Markets Income - Class T 35.50% 15.09%
(incl. max. 3.50% sales charge)

J.P. Morgan Emerging Markets Bond Index Plus 39.30% 17.70%

Emerging Markets Debt Funds Average 40.70% n/a

$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Emerging Markets Income Fund - Class T on
March 10, 1994, when the fund started, and the current maximum 3.50% sales
charge was paid. As the chart shows, by December 31, 1996, the value of
your investment would have grown to $14,854 - a 48.54% increase on the
initial investment. For comparison, look at how the J.P. Morgan Emerging
Markets Bond Index Plus did over the same period. With dividends and
capital gains, if any, reinvested, the same $10,000 investment would have
grown to $15,824 - a 58.24% increase.
UNDERSTANDING
PERFORMANCE
Many markets around the globe
offer the potential for significant
growth over time; however,
investing in foreign markets means
assuming greater risks than
investing in the United States.
Factors like changes in a
country's financial markets, its
local political and economic
climate, and the fluctuating value
of its currency create these risks.
For these reasons an international
fund's performance may be more
volatile than a fund that invests
exclusively in the United States.
Past performance is no guarantee
of future results and you may have
a gain or loss when you sell your
shares.
(checkmark)
<TABLE>
<CAPTION>
<S> <C> <C>
TOTAL RETURN COMPONENTS
YEARS ENDED DECEMBER MARCH 10, 1994
31, (COMMENCEMEN
T
OF OPERATIONS)
TO
DECEMBER 31,

1996 1995 1994

Dividend return 9.46% 9.51% 4.80%

Capital appreciation return 30.95% -2.52% -2.33%

Total return 40.41% 6.99% 2.47%
</TABLE>
TOTAL RETURN COMPONENTS include both dividend returns and capital
appreciation returns. A dividend return reflects the actual dividends paid
by the class. A capital appreciation return reflects both the amount paid
by the class to shareholders as capital gain distributions and changes in
the class' share price. Both returns assume the dividends or gains are
reinvested and exclude the effect of the sales charge.
DIVIDENDS AND YIELD
PERIODS ENDED DECEMBER 31, 1996 PAST PAST 6 PAST 1
MONTH MONTHS YEAR

Dividends per share 6.18(cents) 37.47(cents) 75.03(cents)

Annualized dividend rate 6.11% 6.68% 7.22%

30-day annualized yield 7.18% - -

DIVIDENDS per share show the income paid by the class for a set period. If
you annualize this number, based on an average net asset value of $11.90
over the past month, $11.12 over the past six months and $10.39 over the
past year, you can compare the class' income distributions over these three
periods. The 30-day annualized YIELD is a standard formula for all bond
funds based on the yields of the bonds in the fund, averaged over the past
30 days. This figure shows you the yield characteristics of the fund's
investments at the end of the period. It also helps you to compare funds
from different companies on an equal basis. The offering share price used
in the calculation of the yield includes the effect of Class T's maximum
3.50% sales charge.
ADVISOR EMERGING MARKETS INCOME FUND - CLASS B
PERFORMANCE: THE BOTTOM LINE

There are several ways to evaluate historical performance. You can look at
the total percentage change in value, the average annual percentage change,
or the growth of a hypothetical $10,000 investment. Total return reflects
the change in the value of an investment, assuming reinvestment of the
fund's dividend income and capital gains (the profits earned upon the sale
of securities that have grown in value). You can also look at income, as
reflected in the fund's yield, to measure performance.
The initial offering of Class B shares took place on June 30, 1994. Class B
shares bear a 0.90% 12b-1/shareholder service fee (1.00% prior to January
1, 1996) that is reflected in the returns after June 30, 1994. Returns
prior to June 30, 1994 are those of Class T, the original class of the
fund, and reflect Class T's 0.25% 12b-1 fee. Had Class B's 12b-1 fee been
reflected, returns prior to June 30, 1994 would have been lower. Effective
January 2, 1997, Class B's contingent deferred sales charge is based on a
declining scale that ranges from 5% to 1% on Class B shares redeemed within
six years of purchase. This scale is revised from the previous scale of 4%
to 1% on shares redeemeed within five years of purchase. Class B's
contingent deferred sales charge included in the past one year and life of
fund total return figures are 5%, and 3%, respectively. If Fidelity had not
reimbursed certain class expenses, the total returns and dividends would
have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1996 PAST 1 LIFE OF
YEAR FUND

Advisor Emerging Markets Income - Class B 39.61% 51.40%

Advisor Emerging Markets Income - Class B 34.61% 48.40%
(incl. contingent deferred sales charge) 1

J.P. Morgan Emerging Markets Bond Index Plus 39.30% 58.24%

Emerging Markets Debt Funds Average 40.70% n/a

CUMULATIVE TOTAL RETURNS show Class B's performance in percentage terms
over a set period - in this case, one year, or since the fund started on
March 10, 1994. For example, if you had invested $1,000 in a fund that had
a 5% return over the past year, the value of your investment would be
$1,050. You can compare Class B's returns to those of the J.P. Morgan
Emerging Markets Bond Index Plus - a market capitalization weighted total
return index of U.S. dollar- and other external currency-denominated Brady
bonds, loans, Eurobonds, and local market debt instruments traded in
emerging markets. To measure how Class B's performance stacked up against
its peers, you can compare it to the emerging markets debt funds average,
which reflects the performance of 16 mutual funds tracked by Lipper
Analytical Services, Inc. over the past one year. These benchmarks reflect
reinvestment of dividends and capital gains, if any, and exclude the
effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1996 PAST 1 LIFE OF
YEAR FUND

Advisor Emerging Markets Income - Class B 39.61% 15.87%

Advisor Emerging Markets Income - Class B 34.61% 15.05%
(incl. contingent deferred sales charge) 1

J.P. Morgan Emerging Markets Bond Index Plus 39.30% 17.70%

Emerging Markets Debt Funds Average 40.70% n/a

AVERAGE ANNUAL TOTAL RETURNS take Class B shares' cumulative return and
show you what would have happened if Class B shares had performed at a
constant rate each year. (Note: Lipper calculates average annual total
returns by annualizing each fund's total return, then taking an arithmetic
average. This may produce a slightly different figure than that obtained by
averaging the cumulative total returns and annualizing the result.)

1 HAD CLASS B'S CONTINGENT DEFERRED SALES CHARGE PRIOR TO JANUARY 2, 1997
BEEN REFLECTED, THE CUMULATIVE AND AVERAGE ANNUAL TOTAL RETURNS FOR THE
PAST ONE YEAR AND LIFE OF FUND WOULD HAVE BEEN 35.61% AND 35.61%, AND
48.40% AND 15.05%, RESPECTIVELY.
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19961231 19970127 182716 S00000000000001
FA Emerg Mkt Inc -CL B JP EMBI Plus
00637 JP004
1994/03/10 10000.00 10000.00
1994/03/31 9583.54 8710.62
1994/04/30 9709.65 8547.86
1994/05/31 10335.54 9179.71
1994/06/30 9833.49 8713.44
1994/07/31 10040.95 8872.50
1994/08/31 11241.32 9606.91
1994/09/30 11564.08 9903.80
1994/10/31 11268.61 9590.79
1994/11/30 11017.23 9580.60
1994/12/31 10193.95 8960.01
1995/01/31 9038.73 8528.44
1995/02/28 8378.26 8131.77
1995/03/31 8128.48 7967.86
1995/04/30 8820.18 8820.45
1995/05/31 9339.33 9588.08
1995/06/30 9396.83 9799.71
1995/07/31 9406.70 9761.06
1995/08/31 9601.70 10028.23
1995/09/30 9965.41 10420.27
1995/10/31 9895.07 10307.15
1995/11/30 10218.26 10606.50
1995/12/31 10844.25 11358.60
1996/01/31 11634.97 12221.80
1996/02/29 10982.00 11547.60
1996/03/31 11079.09 11810.65
1996/04/30 11643.23 12455.00
1996/05/31 11954.38 12670.53
1996/06/30 12236.78 13115.94
1996/07/31 12367.99 13390.04
1996/08/31 12816.56 13881.87
1996/09/30 13838.82 14777.12
1996/10/31 14224.26 14877.70
1996/11/30 15017.11 15635.90
1996/12/31 14840.08 15823.79
IMATRL PRASUN SHR__CHT 19961231 19970127 182718 R00000000000037

$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor Emerging Markets Income Fund - Class B on
March 10, 1994, when the fund started and the applicable contingent
deferred sales charge upon redemption at the end of the period was paid. As
the chart shows, by December 31, 1996, the value of the investment would
have grown to $14,840 - a 48.40% increase on the initial investment. For
comparison, look at how the J.P. Morgan Emerging Markets Bond Index Plus
did over the same period. With dividends and capital gains, if any,
reinvested, the same $10,000 investment would have grown to $15,824 - a
58.24% increase.
UNDERSTANDING
PERFORMANCE
Many markets around the globe
offer the potential for significant
growth over time; however,
investing in foreign markets
means assuming greater risks
than investing in the United
States. Factors like changes in a
country's financial markets, its
local political and economic
climate, and the fluctuating value
of its currency create these risks.
For these reasons an
international fund's performance
may be more volatile than a fund
that invests exclusively in the
United States. Past performance
is no guarantee of future results
and you may have a gain or loss
when you sell your shares.
(checkmark)
<TABLE>
<CAPTION>
<S> <C> <C>
TOTAL RETURN COMPONENTS
YEARS ENDED DECEMBER MARCH 10, 1994
31, (COMMENCEMEN
T
OF OPERATIONS)
TO
DECEMBER 31,

1996 1995 1994

Dividend return 8.54% 8.69% 4.30%

Capital appreciation return 31.07% -2.31% -2.34%

Total return 39.61% 6.38% 1.96%
</TABLE>
TOTAL RETURN COMPONENTS include both dividend returns and capital
appreciation returns. A dividend return reflects the actual dividends paid
by the class. A capital appreciation return reflects both the amount paid
by the class to shareholders as capital gain distributions and changes in
the class' share price. Both returns assume the dividends or gains are
reinvested and exclude the effect of the sales charge.
DIVIDENDS AND YIELD
PERIODS ENDED DECEMBER 31, 1996 PAST PAST 6 PAST 1
MONTH MONTHS YEAR

Dividends per share 5.38(cents) 33.49(cents) 67.93(cents)

Annualized dividend rate 5.30% 5.96% 6.52%

30-day annualized yield 6.62% - -

DIVIDENDS per share show the income paid by the class for a set period. If
you annualize this number, based on an average net asset value of $11.94
over the past month, $11.15 over the past six months, and $10.42 over the
past year, you can compare the class' income distributions over these three
periods. The 30-day annualized YIELD is a standard formula for all bond
funds based on the yields of the bonds in the fund, averaged over the past
30 days. This figure shows you the yield characteristics of the fund's
investments at the end of the period. It also helps you compare funds from
different companies on an equal basis. The offering share price used in the
calculation of the yield excludes the effect of Class B's contingent
deferred sales charge.
FUND TALK: THE MANAGER'S OVERVIEW

MARKET RECAP
While low inflation and moderate
growth helped provide a positive
backdrop for most bond markets in
1996, performance in overseas bond
markets was mixed. The Salomon
Brothers World Government Bond
Index - a measure of government
bond market performance in
developed nations - returned
7.11% for the 12 months ended
December 31, 1996. In Europe,
focus centered on the continuing
progress toward the European
Monetary Union (EMU). Attractive
opportunities arose as countries
worked to meet the requirements
for joining the EMU. Many
European nations - especially Italy,
Spain and Sweden - boasted
strong returns. However, Germany
and Japan - two of the larger
components of the Salomon
Brothers World Government Bond
Index - experienced currency
problems that hurt returns. When
Japan's trade surplus diminished
during the year, assets flowed out of
the country, with investors seeking
higher-yielding opportunities
elsewhere. In stark contrast to the
developed world, the often-volatile
emerging debt markets enjoyed a
particularly strong year, helped by
inflows of foreign capital, low
interest rates and the
implementation of country-specific
reforms - especially in Latin
America. The JP Morgan Emerging
Markets Bond Index - of which
Latin America is a large component
- - posted a return of 34.16% during
the period. In the U.S., uncertainty
over the direction of the economy
led to mixed bond market
performance. The Lehman Brothers
Aggregate Bond Index returned
3.63% in 1996.
An interview with John Carlson, Portfolio Manager of Fidelity Advisor
Emerging Markets Income Fund
Q. JOHN, HOW DID THE FUND PERFORM?
A. Very well. For the 12-month period that ended December 31, 1996, the
fund's Class A shares provided a total return of 40.43%, while its Class T
and Class B shares returned 40.41% and 39.61%, respectively. To get a sense
of how the fund fared relative to its peer group, the emerging markets debt
funds average returned 40.70% over the same period, according to Lipper
Analytical Services. The J.P. Morgan Emerging Markets Bond Index Plus had a
12-month return of 39.30% as of December 31.
Q. WHAT WERE SOME OF THE IMPORTANT THEMES IN EMERGING MARKET DEBT OVER THE
PAST YEAR?
A. There were really three key themes that helped drive asset prices in
emerging market debt in the past year. First was the return of economic
growth to Latin America, particularly Mexico and Argentina. Our risk models
of different nations' sovereign debt have shown economic growth to be the
most important factor in a country's creditworthiness. The second recurring
theme was sharply rising crude oil prices which improved the financial
position of the oil exporting countries. Of the major oil exporters,
Ecuador, Venezuela and Nigeria all performed well, while only Mexico
lagged. The significance of rising oil prices goes beyond the simple
revenue windfall: Venezuela and Ecuador have used the cash to help them
tackle significant structural economic reforms. The third major theme was
the dramatic outperformance of non-restructured loans versus Brady
securities - U.S. dollar-denominated bonds of developing countries.
Q. DID ANY OTHER SPECIFIC DEVELOPMENTS TAKE PLACE?
A. Three events deserve mention. First, Moody's re-rated all Brady bonds -
which had been rated just below the issuing country's Eurobond external
debt - up to the level of the sovereign issuer. This took place early in
the year. Second, the fund realized excellent performance from its
positions in pre-Brady bonds, most notably those of Russia and Panama. The
market-friendly election of Boris Yeltsin, the perception that economic
reform was progressing and an increased sense of stability combined to make
Russian loans attractive. My overweighting - relative to the J.P. Morgan
index - in Panama worked to the fund's benefit as low inflation and a
balanced budget, among other factors, made for good performance. The fund
also benefited from its exposure to the non-restructured loans of Vietnam
and the Ivory Coast. Lastly, both Mexico and the Philippines initiated debt
buybacks, which was viewed positively by the market.
Q. YOU MENTIONED PRE-BRADY BONDS AS HAVING PLAYED A SIGNIFICANT ROLE IN THE
PORTFOLIO. CAN YOU EXPLAIN HOW THESE INSTRUMENTS WORK?
A. Sure. Pre-Bradys are loans made by multinational banks to sovereign
governments. These loans usually have gone through a default process for
one reason or another, and are traded in the market by banks and investment
banks. Typically, when emerging market countries undergo economic or
political reform and wish to re-enter the international capital markets,
the first step is to agree to terms and conditions on restructuring their
existing defaulted loans with the London Club - the group of issuing banks.
Once the parties come to an agreement, the pre-Brady loans become Brady
bonds.
Q. JOHN, ARE THERE ANY POCKETS OF THE WORLD THAT ARE RELATIVELY UNEXPLORED
FROM AN INVESTMENT STANDPOINT?
A. Africa, the world's poorest continent, has been largely ignored by
investors. Africa has extremely high debt levels, but the World Bank has
floated some debt relief proposals that may result in more opportunities
there.
Q. WHAT'S YOUR OUTLOOK?
A. I'm fairly optimistic. At present, the forces that have driven this
bull market remain in place; economic growth is picking up across our
universe of countries, and most countries enjoy rising levels of liquidity
driven by capital inflows and stronger oil prices. The most important issue
to monitor is continued progress on economic reform. It is crucial for
these countries to keep building on the momentum of the last 18 months. Two
examples of this are labor reform in Argentina and the prospects for a
currency board in Bulgaria. Also important is international liquidity and
the global appetite for risk. Emerging markets could suffer if G7 interest
rates - those in the seven leading industrial nations - went up sharply or
if there is a global recession.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.

TOP FIVE COUNTRIES AS OF DECEMBER 31, 1996
(EXCLUDING CASH EQUIVALENTS) % OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO

Brazil 13.7 20.4

Argentina 13.0 18.8

Ecuador 12.8 4.5

Venezuela 12.5 9.5

Mexico 5.1 5.9

Argentinian Republic 12.9 15.9

Ecuador Republic 12.8 4.5

Venezuelan Republic 12.5 9.5

Brazilian Federative Republic 12.1 18.2

United Mexican States 5.1 4.8

AVERAGE YEARS TO MATURITY AS OF DECEMBER 31, 1996
6 MONTHS AGO

Years 14.0 12.5

Showing Percentage of Total Value of Investment in Securities

PURCHASED BANK DEBT - 0.2%
PRINCIPAL VALUE
AMOUNT (A) (NOTE 1)
VIETNAM - 0.2%
Socialist Republic of Vietnam loans restructured
under 1985 agreement (b)
(Cost $149,286) DEM 250,000 $ 160,558

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
DECEMBER 31, 1996

ASSETS $ 102,743,036
Investment in securities, at value (including repurchase
agreements of
$21,406,000) (cost $94,762,687) - See accompanying schedule

Cash 521,217

Receivable for investments sold

Regular Delivery 1,950,862

Delayed Delivery 2,537,063

Receivable for fund shares sold 230,152

Interest receivable 1,113,865

Other receivables 7,365

Prepaid expenses 13,415

TOTAL ASSETS 109,116,975

LIABILITIES $ 3,218,301
Payable for investments purchased
Regular delivery

Delayed delivery 5,647,728

Distributions payable 362,981

Accrued management fee 55,306

Distribution fees payable 29,455

Other payables and accrued expenses 79,423

TOTAL LIABILITIES 9,393,194

NET ASSETS $ 99,723,781

Net Assets consist of: $ 86,930,394
Paid in capital

Undistributed net investment income 306,279

Accumulated undistributed net realized gain (loss) on investments 4,506,628
and foreign currency transactions

Net unrealized appreciation (depreciation) on investments 7,980,480
and assets and liabilities in foreign currencies

NET ASSETS $ 99,723,781

CALCULATION OF MAXIMUM OFFERING PRICE $11.72
CLASS A:
NET ASSET VALUE and redemption price per share
($477,985 (divided by) 40,792 shares)

Maximum offering price per share (100/95.75 of $11.72) $12.24

CLASS T: $11.71
NET ASSET VALUE and redemption price per share
($78,860,711 (divided by) 6,732,946 shares)

Maximum offering price per share (100/96.50 of $11.71) $12.13

CLASS B: $11.75
NET ASSET VALUE and offering price per share
($17,745,599 (divided by) 1,510,684 shares) A

INSTITUTIONAL CLASS: NET ASSET VALUE, offering price and $11.65
redemption
price per share ($2,639,486 (divided by) 226,502 shares)

</TABLE>

A 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 DECEMBER 31, 1996

INVESTMENT INCOME 6,127,860
Interest

EXPENSES

Management fee $ 488,344

Transfer agent fees 449
Class A

Class T 149,939

Class B 40,225

Institutional Class 4,496

Distribution fees 147
Class A

Class T 138,085

Class B 117,763

Accounting fees and expenses 62,296

Non-interested trustees' compensation 261

Custodian fees and expenses 38,614

Registration fees 12,692
Class A

Class T 25,615

Class B 13,597

Institutional Class 20,951

Audit 37,663

Legal 706

Miscellaneous 18,846

Total expenses before reductions 1,170,689

Expense reductions (46,458) 1,124,231

NET INVESTMENT INCOME 5,003,629

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

Investment securities 14,787,918

Foreign currency transactions (16,690) 14,771,228

Change in net unrealized appreciation (depreciation) on:

Investment securities 4,852,153

Assets and liabilities in foreign currencies 617 4,852,770

NET GAIN (LOSS) 19,623,998

NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 24,627,627
FROM OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1996 1995

INCREASE (DECREASE) IN NET ASSETS

Operations $ 5,003,629 $ 3,710,621
Net investment income

Net realized gain (loss) 14,771,228 (5,452,277)

Change in net unrealized appreciation (depreciation) 4,852,770 6,396,714

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 24,627,627 4,655,058
FROM OPERATIONS

Distributions to shareholders (5,916) -
From net investment income
Class A

Class T (3,931,995) (3,105,070)

Class B (844,871) (590,979)

Institutional Class (136,492) (4,785)

From net realized gain (15,462) -
Class A

Class T (2,638,864) -

Class B (595,454) -

Institutional Class (87,836) -

TOTAL DISTRIBUTIONS (8,256,890) (3,700,834)

Share transactions - net increase (decrease) 37,461,113 9,874,830

TOTAL INCREASE (DECREASE) IN NET ASSETS 53,831,850 10,829,054

NET ASSETS

Beginning of period 45,891,931 35,062,877

End of period (including under (over) distribution of net $ 99,723,781 $ 45,891,931
investment income of $306,279 and $(276,131),
respectively)

</TABLE>

FINANCIAL HIGHLIGHTS - CLASS A
YEAR ENDED
DECEMBER 31,

1996 D

SELECTED PER-SHARE DATA

Net asset value, beginning of period $ 10.520

Income from Investment Operations

Net interest income .274 F

Net realized and unrealized gain (loss) 1.574

Total from investment operations 1.848

Less Distributions

From net interest income (.238)

From net realized gain (.410)

Total distributions (.648)

Net asset value, end of period $ 11.720

TOTAL RETURN B, C 17.71%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted) $ 478

Ratio of expenses to average net assets 1.40% A,
E

Ratio of net interest income to average net assets 7.31% A

Portfolio turnover rate 410%

1996 1995 1994 D

<TABLE>
<CAPTION>
<S> <C> <C> <C>
SELECTED PER-SHARE DATA

Net asset value, beginning of period $ 9.280 $ 9.520 $ 10.000

Income from Investment Operations

Net interest income .758 G .860 .356

Net realized and unrealized gain (loss) 2.832 (.323) F (.073)

Total from investment operations 3.590 .537 .283

Less Distributions

From net interest income (.750) (.777) (.503)

From net realized gain (.410) - (.260)

Total distributions (1.16) (.777) (.763)

Net asset value, end of period $ 11.710 $ 9.280 $ 9.520

TOTAL RETURN B, C 40.41% 6.99% 2.47%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted) $ 78,861 $ 36,205 $ 30,029

Ratio of expenses to average net assets 1.49% 1.50% 1.50% A,
E E

Ratio of expenses to average net assets after 1.48% 1.50% 1.50% A
expense reductions H

Ratio of net interest income to average net assets 7.23% 9.32% 6.60% A

Portfolio turnover rate 410% 305% 354% A

</TABLE>

1996 1995 1994 D

<TABLE>
<CAPTION>
<S> <C> <C> <C>
SELECTED PER-SHARE DATA

Net asset value, beginning of period $ 9.300 $ 9.520 $ 9.700

Income from Investment Operations

Net interest income .686 G .835 .167

Net realized and unrealized gain (loss) 2.853 (.342) F .227

Total from investment operations 3.539 .493 .394

Less Distributions

From net interest income (.679) (.713) (.314)

From net realized gain (.410) - (.260)

Total distributions (1.089) (.713) (.574)

Net asset value, end of period $ 11.750 $ 9.300 $ 9.520

TOTAL RETURN B, C 39.61% 6.38% 3.67%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted) $ 17,746 $ 9,486 $ 5,034

Ratio of expenses to average net assets 2.15% 2.25% 2.25% A,
E E E

Ratio of net interest income to average net assets 6.56% 8.48% 5.86% A

Portfolio turnover rate 410% 305% 354% A

</TABLE>

1996 1995 D

SELECTED PER-SHARE DATA

Net asset value, beginning of period $ 9.280 $ 8.400

Income from Investment Operations

Net interest income .786 G .393

Net realized and unrealized gain (loss) 2.779 .876 F

Total from investment operations 3.565 1.269

Less Distributions

From net interest income (.785) (.389)

From net realized gain (.410) -

Total distributions (1.195) (.389)

Net asset value, end of period $ 11.650 $ 9.280

TOTAL RETURN B, C 40.21% 15.52%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted) $ 2,639 $ 201

Ratio of expenses to average net assets 1.25% 1.25% A,
E E

Ratio of net interest income to average net assets 7.46% 9.09% A

Portfolio turnover rate 410% 305%

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SHARES DOLLARS

YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,

1996 A 1995 B 1996 A 1995 B

CLASS A 45,480 - $ 518,247 $ -
Shares sold

Reinvestment of distributions 1,560 - 18,190 -

Shares redeemed (6,248) - (75,540) -

Net increase (decrease) 40,792 - $ 460,897 $ -

CLASS T 8,120,736 4,482,343 $ 85,014,110 $ 36,686,496
Shares sold

Reinvestment of distributions 523,792 330,013 5,729,874 2,753,394

Shares redeemed (5,813,045) (4,066,720) (60,826,882) (33,780,229)

Net increase (decrease) 2,831,483 745,636 $ 29,917,102 $ 5,659,661

CLASS B 657,075 632,120 $ 6,890,016 $ 5,203,888
Shares sold

Reinvestment of distributions 116,167 61,187 1,270,300 513,286

Shares redeemed (282,713) (201,754) (2,964,969) (1,691,703)

Net increase (decrease) 490,529 491,553 $ 5,195,347 $ 4,025,471

INSTITUTIONAL CLASS 1,151,436 21,145 $ 12,012,762 $ 185,008
Shares sold

Reinvestment of distributions 19,417 540 214,294 4,690

Shares redeemed (966,036) - (10,339,289) -

Net increase (decrease) 204,817 21,685 $ 1,887,767 $ 189,698

</TABLE>

The Board of Trustees of Fidelity Advisor Emerging Markets Income Fund
voted to pay to shareholders of record at the opening of business on record
date, the following distributions derived from capital gains realized from
sales of portfolio securities:
PAY DATE RECORD DATE CAPITAL GAINS
Class A 2/10/97 2/7/97 $0.19
Class B 2/10/97 2/7/97 $0.19
Class T 2/10/97 2/7/97 $0.19

INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Fred L. Henning, Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
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 *
ADVISORY BOARD
William O. McCoy
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
* INDEPENDENT TRUSTEES
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
State Street Bank and Trust Company
Boston, MA - Class T
Fidelity Investments Institutional Operations Company
Boston, MA - Class A & Class B
CUSTODIAN
The Chase Manhattan Bank
Brooklyn, NY
FOCUS FUNDS
Fidelity Advisor Consumer
Industries Fund
Fidelity Advisor Cyclical
Industries Fund
Fidelity Advisor Financial
Services Fund
Fidelity Advisor Health Care Fund
Fidelity Advisor Natural
Resources Fund
Fidelity Advisor Technology Fund
Fidelity Advisor Utilities Growth Fund
GROWTH FUNDS
Fidelity Advisor TechnoQuant(trademark)
Growth Fund
Fidelity Advisor Overseas Fund
Fidelity Advisor Mid Cap Fund
Fidelity Advisor Equity Growth Fund
Fidelity Advisor Growth
Opportunities Fund
Fidelity Advisor Strategic
Opportunities Fund
Fidelity Advisor Large Cap Fund
GROWTH AND INCOME FUNDS
Fidelity Advisor Growth & Income Fund
Fidelity Advisor Equity Income Fund
Fidelity Advisor Balanced Fund
TAXABLE INCOME FUNDS
Fidelity Advisor Emerging Markets Income Fund
Fidelity Advisor High Yield Fund
Fidelity Advisor Strategic Income Fund
Fidelity Advisor Government Investment Fund
Fidelity Advisor Intermediate Bond Fund
Fidelity Advisor Short Fixed-Income Fund
MUNICIPAL FUNDS
Fidelity Advisor High Income
Municipal Fund
Fidelity Advisor Municipal Bond Fund
Fidelity Advisor Intermediate Municipal Income Fund
Fidelity Advisor Short-Intermediate Municipal Income Fund
STATE MUNICIPAL FUNDS
Fidelity Advisor California Municipal Income Fund
Fidelity Advisor New York Municipal Income Fund
MONEY MARKET FUNDS
Daily Money Fund: Money Market Portfolio
Daily Money Fund: U.S. Treasury Portfolio
Daily Tax-Exempt Money Fund

(REGISTERED TRADEMARK)

(2_FIDELITY_LOGOS)FIDELITY ADVISOR
(registered trademark)

STRATEGIC INCOME
FUND - INSTITUTIONAL CLASS
ANNUAL REPORT
DECEMBER 31, 1996
CONTENTS

PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.

PERFORMANCE 4 How the fund has done over time.

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

INVESTMENT CHANGES 11 A summary of major shifts in the
fund's investments over the past six
months.

INVESTMENTS 12 A complete list of the fund's
investments with their market
values.

FINANCIAL STATEMENTS 31 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.

NOTES 38 Notes to the financial statements.

REPORT OF INDEPENDENT 45 The auditors' opinion.
ACCOUNTANTS

DISTRIBUTIONS 46

(PHOTO_OF_EDWARD_C_JOHNSON_3D)DEAR SHAREHOLDER:
Although stocks managed to post solid returns throughout 1996, signs of
strength in the economy have led to inflation fears, causing some
uncertainty in both the stock and bond markets. In 1995, both stock and
bond markets posted strong results, while the year before, stocks posted
below-average returns and bonds had one of the worst years in history.
These market ups and downs are a normal part of investing, and there are
some basic principles that are helpful for investors to remember in
different types of markets.
Keeping in mind that the effects of interest rate changes on your bond
investments will only be "paper" gains or losses unless you sell your
shares, staying in your bond fund may be appropriate if your investment
horizon is at least a year or more. The longer your investing time frame,
the more likely it is that you will retain your principal investment
through both up and down markets. For example, a 10-year time frame, such
as saving for a college education, enables you to weather these ups and
downs in a long-term fund, which has higher potential returns.
An intermediate-length fund could be appropriate if your investment horizon
is two to four years, and a short-term bond fund could be the right choice
if you need your money in one or two years.
If your time horizon is less than a year, you might want to consider moving
some of your bond investment into a money market fund, which seeks income
and a stable share price by investing in high-quality, short-term
investments. 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 or guaranteed by any agency of the U.S. government.
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. A periodic investment plan will not, of course,
assure a profit or protect against a loss.
If you have any questions, please call us at 1-800-544-8888. We stand ready
to provide the information you need to make the investments that are right
for you.
Best regards,
Edward C. Johnson 3d
ADVISOR STRATEGIC INCOME FUND - INSTITUTIONAL CLASS
PERFORMANCE: THE BOTTOM LINE(dagger)

Advisor Strategic Income - Institutional Class 13.04% 38.58%

Merrill Lynch High Yield Master Index 11.06% 33.67%

Fidelity Strategic Income Composite 11.94% n/a
Benchmark

Multi-Sector Income Funds Average 11.74% n/a

CUMULATIVE TOTAL RETURNS show Institutional Class' performance in
percentage terms over a set period - in this case, one year or since the
fund started on October 31, 1994. For example, if you had invested $1,000
in a fund that had a 5% return over the past year, the value of your
investment would be $1,050. You can compare Institutional Class' returns to
those of the Merrill Lynch High Yield Master Index - a market
capitalization weighted index of all domestic and yankee high-yield bonds.
Issues included in the index have maturities of at least one year and have
a credit rating lower than BBB-/Baa3, but are not in default. You can also
compare Institutional Class' returns to those of the Fidelity Strategic
Income Composite Benchmark - a broad measure of the world fixed income
markets. To measure how Institutional Class' performance stacked up against
its peers, you can compare it to the multi-sector income funds average,
which reflects the performance of 51 mutual funds with similar objectives
tracked by Lipper Analytical Services, Inc. over the past one year. These
benchmarks reflect reinvestments of dividends and capital gains, if any,
and exclude the effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1996 PAST 1 LIFE OF
YEAR FUND

Advisor Strategic Income - Institutional Class 13.04% 16.20%

Merrill Lynch High Yield Master Index 11.06% 14.29%

Fidelity Strategic Income Composite 11.94% n/a
Benchmark

Multi-Sector Income Funds Average 11.74% n/a

AVERAGE ANNUAL TOTAL RETURNS take Institutional Class' cumulative return
and show you what would have happened if Institutional Class shares had
performed at a constant rate each year. (Note: Lipper calculates average
annual total returns by annualizing each fund's total return, then taking
an arithmetic average. This may produce a slightly different figure than
that obtained by averaging the cumulative total returns and annualizing the
result.)
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19960731 19960814 160549 S00000000000001
FA Strat Inc CL I ML High Yield Master FI
Strategic Comp Index
00260 ML002 F0086
1994/10/31 10000.00 10000.00
10000.00
1994/11/30 10050.16 9914.94
9921.26
1994/12/31 10017.44 10025.22
9887.56
1995/01/31 10129.20 10166.88
9962.57
1995/02/28 10368.45 10484.10
10125.61
1995/03/31 10518.89 10630.00
10301.07
1995/04/30 10913.50 10878.89
10634.09
1995/05/31 11324.23 11218.77
11037.19
1995/06/30 11382.14 11304.46
11135.32
1995/07/31 11493.76 11433.70
11192.91
1995/08/31 11513.63 11503.09
11198.60
1995/09/30 11719.90 11634.70
11390.44
1995/10/31 11856.52 11717.17
11444.44
1995/11/30 11989.37 11831.55
11595.55
1995/12/31 12259.67 12021.46
11847.24
1996/01/31 12533.28 12211.32
12046.81
1996/02/29 12432.43 12229.71
11927.06
1996/03/31 12404.15 12196.49
11944.14
1996/04/30 12520.67 12202.02
12025.48
1996/05/31 12605.37 12290.02
12090.46
1996/06/30 12711.84 12363.84
12234.53
1996/07/31 12788.72 12447.78
12369.42
1996/08/31 12935.81 12576.33
12504.03
1996/09/30 13339.06 12846.16
12784.11
1996/10/31 13512.61 12986.95
12956.74
1996/11/30 13776.79 13249.51
13230.23
1996/12/31 13857.85 13351.46
13261.40
IMATRL PRASUN SHR__CHT 19960731 19960814 160556 R00000000000123

$10,000 OVER LIFE OF FUND(dagger): Let's say hypothetically that $10,000
was invested in Fidelity Advisor Strategic Income Fund - Institutional
Class on October 31, 1994, when the fund started. As the chart shows, by
December 31, 1996, the value of the investment would have grown to $13,858
- - a 38.58% increase on the initial investment. For comparison, look at how
the Merrill Lynch High Yield Master Index did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $13,351 - a 33.51% increase. You also can
look at how the Fidelity Strategic Income Composite Benchmark, a
hypothetical combination of unmanaged indices that is more representative
of the fund's investable universe, did over the same period. This index
combines returns from the J.P. Morgan Emerging Markets Bond Index Plus
(15%), Merrill Lynch High Yield Master Index (40%), Salomon Brothers
Mortgage Index (15%), Salomon Brothers Treasury 1-10 Year Index (15%), and
Salomon Brothers Non-U.S. Dollar World Government Bond Index (15%). With
distributions, if any, reinvested, a $10,000 investment in the index would
have grown to $13,261 - an 32.61% increase.

UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. Bond prices, for
example, generally move in the
opposite direction of interest
rates. In turn, the share price,
return, and yield of a fund that
invests in bonds will vary. That
means if you sell your shares
during a market downturn, you
might lose money. But if you
can ride out the market's ups
and downs, you may have a
gain. Investing in foreign
markets means assuming
greater risks than investing in
the United States.
(checkmark)
<TABLE>
<CAPTION>
<S> <C> <C>
TOTAL RETURN COMPONENTS
YEARS ENDED DECEMBER OCTOBER 31,
31, 1994
(COMMENCEMEN
T
OF OPERATIONS)
TO
DECEMBER 31,

1996 1995 1994

Dividend return 7.70% 8.74% 0.97%

Capital appreciation return 5.34% 13.67% -0.80%

Total return 13.04% 22.41% 0.17%
</TABLE>
TOTAL RETURN COMPONENTS include both dividend returns and capital
appreciation returns. A dividend return reflects the actual dividends paid
by the class. A capital appreciation return reflects both the amount paid
by the class to shareholders as capital gain distributions and changes in
the class' share price. Both returns assume the dividends or gains are
reinvested and exclude the effects of sales charges.
DIVIDENDS AND YIELD
PERIOD ENDED DECEMBER 31, 1996 PAST PAST 6 PAST 1
MONTH MONTHS YEAR

Dividends per share 9.60(cents) 42.38(cents) 80.44(cents)

Annualized dividend rate 9.86% 7.46% 7.22%

30-day annualized yield n/a - -

DIVIDENDS per share show the income paid by the class for a set period. If
you annualize this number based on an average share price of $11.46 over
the past month, $11.27 over the past six months, and $11.14 over the past
year, you can compare the class' income over these three periods. The
30-day annualized YIELD is a standard formula for all bond funds based on
the yields of the bonds in the fund, averaged over the past 30 days. This
figure shows you the yield characteristics of the fund's investments at the
end of the period. It also helps you to compare funds from different
companies on an equal basis. Yield information will be reported once the
class has a longer, more stable operating history.
(dagger) THE DATA USED TO CREATE THE MERRILL LYNCH HIGH YIELD MASTER INDEX
AND THE FIDELITY STRATEGIC INCOME COMPOSITE BENCHMARK ON THE LINE GRAPH, ON
PAGE 5, IS FROM THE CLOSE OF BUSINESS ON OCTOBER 31, 1994. THE TOTAL RETURN
OF THE MERRILL LYNCH HIGH YIELD MASTER INDEX FOR THE LIFE OF FUND
CALCULATIONS ON PAGE 4 IS FROM THE OPENING OF BUSINESS ON OCTOBER 31, 1994,
COMMENCEMENT OF OPERATIONS OF THE FUND. DATA FOR THE FIDELITY STRATEGIC
INCOME COMPOSITE BENCHMARK IS ONLY AVAILABLE AT THE CLOSE OF BUSINESS EACH
MONTH.
FUND TALK: THE MANAGERS' OVERVIEW

MARKET RECAP
While low inflation and moderate
growth helped provide a positive
backdrop for most bond markets in
1996, performance in overseas bond
markets was mixed. The Salomon
Brothers World Government Bond
Index - a measure of government
bond market performance in
developed nations - returned
7.11% for the 12 months ended
December 31, 1996. In Europe,
focus centered on the continuing
progress toward the European
Monetary Union (EMU). Attractive
opportunities arose as countries
worked to meet the requirements
for joining the EMU. Many
European nations - especially Italy,
Spain and Sweden - boasted
strong returns. However, Germany
and Japan - two of the larger
components of the Salomon
Brothers World Government Bond
Index - experienced currency
problems that hurt returns. When
Japan's trade surplus diminished
during the year, assets flowed out of
the country, with investors seeking
higher-yielding opportunities
elsewhere. In stark contrast to the
developed world, the often-volatile
emerging debt markets enjoyed a
particularly strong year, helped by
inflows of foreign capital, low
interest rates and the
implementation of country-specific
reforms - especially in Latin
America. The J.P. Morgan
Emerging Markets Bond Index - of
which Latin America is a large
component - posted a return of
34.16% during the period. In the
U.S., uncertainty over the direction
of the economy led to mixed bond
market performance. The Lehman
Brothers Aggregate Bond Index
returned 3.63% in 1996.
The following is an interview with John Carlson (top left), lead Portfolio
Manager of Fidelity Advisor Strategic Income Fund and manager of the fund's
investments in emerging markets, with additional comments from co-managers
Kevin Grant (bottom left) on U.S. government securities, Margaret Eagle
(top right) on high-yield securities and Jonathan Kelly (bottom right) on
foreign developed-market securities.
Q. JOHN, HOW DID THE FUND PERFORM?
J.C. For the 12-month period that ended December 31, 1996, the fund's
Institutional Class shares returned 13.04%. This compared favorably to the
multi-sector income funds average, which returned 11.74% over the same
period, according to Lipper Analytical Services. The Merrill Lynch High
Yield Master Index had a 12-month return of 11.06% as of December 31.
Q. WHAT WERE SOME OF THE IMPORTANT THEMES IN EMERGING MARKET DEBT OVER THE
PAST YEAR?
J.C. There were really three key themes that helped drive asset prices in
emerging market debt in the last year. First was the return of economic
growth to Latin America, particularly Mexico and Argentina. Our sovereign
risk models have found economic growth to be the most important factor in a
country's creditworthiness. The second recurring theme was sharply rising
crude oil prices which improved the financial position of the oil exporting
countries. Of the major oil exporters, Ecuador, Venezuela and Nigeria all
outperformed, while only Mexico lagged. The significance of rising oil
prices goes beyond the simple revenue windfall: Venezuela and Ecuador are
using the cash to help them tackle significant structural economic reforms.
The third major theme was the dramatic outperformance of non-restructured
loans versus Brady securities.
Q. KEVIN, HOW WOULD YOU CHARACTERIZE THE INVESTING CLIMATE IN THE U.S. OVER
THE PAST YEAR?
K.G. The direction of the market shifted quite a bit over the past 12
months. Sentiment in the first half of the period centered around the
stronger-than-expected economy, a development reflected in the release of
strong employment statistics. The market slacked off some, but as it became
apparent that fears of an overheated economy were unwarranted, the markets
rallied. In addition, the announcement by the Federal Reserve Board in the
fall that it deemed it unnecessary to raise rates was encouraging. In
December, however, Fed chairman Alan Greenspan cautioned against the
general feeling of euphoria that had enveloped the financial markets and
bonds gave back some of their gains. Mortgage-backed securities generated
healthy returns during the period, as higher rates meant diminished
prepayment risk.
Q. TURNING TO YOU MARGARET, CAN YOU PAINT THE PICTURE FOR THE HIGH-YIELD
MARKET?
M.E. Relative to the overall bond market, 1996 was a good year for the
high-yield market. This strong performance can be attributed to two primary
factors: strong demand and low default rates. We saw high amounts of new
issuance in this sector, but the insatiable demand for these securities
kept pace. The sources for this demand included insurance companies,
pension funds and mutual funds, to name a few. Investors began to realize
that over the longer term, high-yield debt has been an attractive place to
be. The reason for low default rates is a bit harder to pinpoint. One
thought is that issuers, particularly in the early 1990s, had to come to
market with higher-quality issues, so they have not been as vulnerable to
business risk as time has progressed. I think the benign economic
conditions we've seen have also helped default rates. In terms of what may
happen going forward, I think we may see default rates pick up to more
average levels of about 3%. I believe the economy will continue to grow at
a moderate speed, but I don't believe we'll see the same level of economic
strength we saw in the fourth quarter of 1996. Slow growth and low
inflation are generally favorable to high-yield bonds.
Q. WHAT WAS THE STORY WITH THE GLOBAL FIXED-INCOME MARKETS, JONATHAN?
J.K. While interest rates rose in the U.S. during the past 12 months, they
were generally falling throughout the developed world. The principal
drivers behind the declining rates were initially tight monetary policy and
sluggish economies in much of the G7 - the seven largest industrialized
countries in the world - notably Japan and Germany. This led to
appreciating bond prices around the world. However, while U.S. interest
rates were rising, the U.S. dollar was also rising against the major
international currencies, and this reduced the returns of foreign bonds to
dollar-based investors. In Japan, the largest country in the benchmark, the
yen was particularly weak against the dollar and the single largest
detractor from performance. On the other hand, the high-yielding countries
in Europe - Italy, Spain, and Sweden - all delivered excellent returns in
U.S. dollars. The fund also benefited from exposure to U.K. and Australian
bonds.
Q. TURNING BACK TO YOU, JOHN, DID ANY OTHER SPECIFIC DEVELOPMENTS TAKE
PLACE IN THE EMERGING DEBT MARKETS?
J.C. Three events deserve mention. First, Moody's re-rated all Brady bonds
- - which had been rated just below the issuing country's Eurobond external
debt - up to the level of the sovereign issuer. This took place early in
the year. Second, the fund realized excellent performance from its
positions in pre-Brady bonds, most notably those of Russia and Panama. The
market-friendly election of Boris Yeltsin, the perception that economic
reform was progressing and an increased sense of stability combined to make
Russian loans attractive. My overweighting - relative to the benchmark - in
Panama worked to the fund's benefit as low inflation and a balanced budget,
among other factors, made for good performance. The fund also benefited
from its exposure to the non-restructured loans of Vietnam and the Ivory
Coast. Lastly, both Mexico and the Philippines initiated debt buybacks,
which was viewed positively by the market.
Q. WHAT'S YOUR OUTLOOK, JOHN?
J.C. I'm fairly optimistic. At present, the forces which have driven this
bull market remain in place; economic growth is picking up across our
universe of countries, and most countries enjoy rising levels of liquidity
driven by capital inflows and stronger oil prices. The most important issue
to monitor is continued progress on economic reform. It is crucial for
these countries to keep building on the momentum of the last 18 months. Two
examples of this are labor reform in Argentina and the prospects for a
currency board in Bulgaria. Also important is international liquidity and
the global appetite for risk. Emerging markets could suffer if G7 interest
rates went up sharply or in the event of a global recession.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGERS' VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.

FUND FACTS
GOAL: seeks a high level of
current income by investing
primarily in debt securities;
as a secondary objective,
the fund may also seek
capital appreciation
START DATE: October 31,
1994
SIZE: as of December 31,
1996, more than $143 million
MANAGERS: co-managed since
January 1996: John Carlson,
lead manager and manager
of the fund's investments in
emerging markets, since
January 1996; Kevin Grant,
manager of the fund's U.S.
government investments, since
January 1996; Margaret
Eagle, manager of the fund's
high-yield investments, since
January 1996 and Jonathan
Kelly, manager of the fund's
investments in developed
foreign markets, since January
1996
(checkmark)
JOHN CARLSON ON KEEPING
ABREAST OF THE INTERNATIONAL
SCENE:
"With an emerging market
debt fund that invests all over
the world, it's imperative that
I have a comprehensive
understanding of what's going
on in the many different
countries. As a result, timely
and insightful research is vital.
In addition to Boston-based
Latin sovereign and corporate
credit analysts, we have
analysts in the field in Hong
Kong and London with
specific responsibilities for
Asia and
Europe/Africa/Middle East,
respectively. This research is
supplemented by
experienced traders who
constantly monitor the market
to identify and exploit
opportunities in the local
currency, corporate and
sovereign debt markets."

NOTE TO SHAREHOLDERS:
Curt Hollingsworth became
manager of the fund's U.S.
government investments on
February 3, 1997, after the
period ended. Mr.
Hollingsworth manages
various taxable bond funds.
He joined Fidelity in 1983.
INVESTMENT CHANGES

TOP FIVE HOLDINGS AS OF DECEMBER 31, 1996
(BY ISSUER, EXCLUDING CASH EQUIVALENTS) % OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO

U.S. Government 28.4 28.3

Argentinian Republic 2.3 2.2

Brazilian Federative Republic 2.1 3.1

Time Warner, Inc., Series M, 2.1 0.0
10 1/4% pay-in-kind

Ecuador Republic 2.1 1.2

TOP FIVE MARKET SECTORS AS OF DECEMBER 31, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE MARKET
SECTORS
6 MONTHS AGO

Media & Leisure 9.9 11.0

Finance 5.5 3.2

Utilities 4.6 6.0

Retail & Wholesale 3.6 3.6

Nondurables 3.4 3.3

QUALITY DIVERSIFICATION AS OF DECEMBER 31, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO

Aaa, Aa, A 42.5 41.7

Baa 0.7 1.0

Ba 8.9 6.0

B 27.8 28.7

Caa, Ca, C 3.3 3.0

Nonrated 6.8 10.4

TABLE EXCLUDES SHORT-TERM INVESTMENTS. WHERE MOODY'S RATINGS ARE NOT
AVAILABLE, WE HAVE USED S&P RATINGS.UNRATED DEBT SECURITIES THAT ARE
EQUIVALENT TO BA AND BELOW AT DECEMBER 31,1996 AND JUNE 30, 1996, ACCOUNT
FOR 6.8% AND 10.4%, RESPECTIVELY, OF THE FUND'S INVESTMENTS.
ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF DECEMBER 31, 1996 * AS OF JUNE 30, 1996 **
Row: 1, Col: 1, Value: 4.0
Row: 1, Col: 2, Value: 3.5
Row: 1, Col: 3, Value: 6.1
Row: 1, Col: 4, Value: 21.5
Row: 1, Col: 5, Value: 28.4
Row: 1, Col: 6, Value: 36.5
Corporate bonds 37.6%
U.S. government
and agency
obligations 28.3%
Foreign government
obligations 20.1%
Stocks 5.0%
Other investments 4.9%
Cash equivalents 4.1%
TOTAL FOREIGN
INVESTMENTS 30.7%
Corporate bonds 36.5%
U.S. government
and agency
obligations 28.4%
Foreign government
obligations 21.5%
Stocks 6.1%
Other investments 3.5%
Cash equivalents 4.0%
TOTAL FOREIGN
INVESTMENTS 28.7%
Row: 1, Col: 1, Value: 4.1
Row: 1, Col: 2, Value: 4.9
Row: 1, Col: 3, Value: 5.0
Row: 1, Col: 4, Value: 20.1
Row: 1, Col: 5, Value: 28.3
Row: 1, Col: 6, Value: 37.6
*
**
INVESTMENTS DECEMBER 31, 1996

Showing Percentage of Total Value of Investment in Securities

CORPORATE BONDS - 36.5%
MOODY'S RATINGS (C) PRINCIPAL VALUE
(UNAUDITED) AMOUNT (B) (NOTE 1)
CONVERTIBLE BONDS - 0.5%
ENERGY - 0.5%
OIL & GAS - 0.5%
Kelley Oil & Gas Partners Ltd. 7 7/8%,
12/15/99 B3 $ 750,000 $ 712,486
UTILITIES - 0.0%
TELEPHONE SERVICES - 0.0%
GST Telecommunications, Inc. 0%,
12/15/05 (d)(f) - 10,000 7,700
TOTAL CONVERTIBLE BONDS 720,186
NONCONVERTIBLE BONDS - 36.0%
AEROSPACE & DEFENSE - 1.7%
AEROSPACE & DEFENSE - 1.6%
Alliant Techsystems, Inc. 11 3/4%, 3/1/03 B2 530,000 588,300
RHI Holdings, Inc. 11 7/8%, 3/1/99 B2 1,000,000 1,000,000
Rohr, Inc. 11 5/8%, 5/15/03 Ba3 130,000 145,600
Wyman-Gordon Co. 10 3/4%, 3/15/03 Ba3 490,000 525,525
2,259,425
SHIP BUILDING & REPAIR - 0.1%
Newport News Shipbuilding, Inc. 9 1/4%,
12/1/06 (f) B1 160,000 165,200
TOTAL AEROSPACE & DEFENSE 2,424,625
BASIC INDUSTRIES - 2.4%
CHEMICALS & PLASTICS - 1.1%
Astor Corp. 10 1/2%, 10/15/16 (f) B3 260,000 266,500
Foamex-JPS Automotive LP/Foamex-JPS Capital
Corp. 0%, 7/1/04 (d) Caa 280,000 232,400
Freedom Chemical Co. 10 5/8%,
10/15/06 (f) B3 140,000 147,000
NL Industries, Inc.:
11 3/4%, 10/15/03 B1 20,000 21,200
0%, 10/15/05 (d) B2 50,000 42,625
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE
(UNAUDITED) AMOUNT (B) (NOTE 1)
NONCONVERTIBLE BONDS - CONTINUED
BASIC INDUSTRIES - CONTINUED
CHEMICALS & PLASTICS - CONTINUED
Pioneer Americas Acquisition Corp. 1st Mtg.
13 3/8%, 4/1/05 B2 $ 500,000 $ 563,750
Plastic Containers, Inc. 10%, 12/15/06 (f) B1 50,000 51,500
Plastic Specialties & Technologies, Inc. 11 1/4%,
12/1/03 B3 40,000 42,000
Sterling Chemicals Holdings, Inc. 0%,
8/15/08 (d) Caa 530,000 308,725
1,675,700
METALS & MINING - 0.6%
Kaiser Aluminum & Chemical Corp. 12 3/4%,
2/1/03 B2 420,000 448,350
Renco Metals, Inc. 11 1/2%, 7/1/03 B2 360,000 378,000
826,350
PAPER & FOREST PRODUCTS - 0.7%
Container Corp. of America:
10 3/4%, 5/1/02 B1 20,000 21,600
gtd. 9 3/4%, 4/1/03 B1 240,000 252,000
gtd. 11 1/4%, 5/1/04 B1 100,000 108,000
Florida Coast Paper Co. LLC/Florida Coast
Paper Finance Corp., 12 3/4%, 6/1/03 B3 80,000 86,800
Repap New Brunswick, Inc. yankee:
8 7/8%, 7/15/00 (h) B1 40,000 39,800
9 7/8%, 7/15/00 B1 40,000 41,500
10 5/8%, 4/15/05 B3 90,000 94,950
Repap Wisconsin, Inc. 9 7/8%, 5/1/06 Caa 30,000 30,450
Riverwood International 10 7/8%, 4/1/08 Caa 230,000 212,750
SD Warren Co., 12%, 12/15/04 B1 70,000 75,600
Stone Container Corp. 11 7/8%, 8/1/16 B1 40,000 42,400
1,005,850
TOTAL BASIC INDUSTRIES 3,507,900
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE
(UNAUDITED) AMOUNT (B) (NOTE 1)
NONCONVERTIBLE BONDS - CONTINUED
DURABLES - 1.2%
AUTOS, TIRES, & ACCESSORIES - 0.8%
Aetna Industries, Inc. 11 7/8%, 10/1/06 B3 $ 700,000 $ 752,500
Blue Bird Body Co. 10 3/4%, 11/15/06 (f) B2 50,000 52,250
Delco Remy International, Inc. 10 5/8%,
8/1/06 (f) B2 100,000 106,000
Safelite Glass Corp. 9 7/8%, 12/15/06 (f) B3 150,000 154,500
1,065,250
HOME FURNISHINGS - 0.0%
Interlake Corp. 12 1/8%, 3/1/02 B3 30,000 31,050
TEXTILES & APPAREL - 0.4%
Consoltex Group, Inc./Consoltex USA, Inc. gtd.
11%, 10/1/03 B3 500,000 500,000
Dan River, Inc. 10 1/8%, 12/15/03 B3 40,000 40,400
Pillowtex Corp. 10%, 11/15/06 (f) B2 70,000 72,975
613,375
TOTAL DURABLES 1,709,675
ENERGY - 2.3%
ENERGY SERVICES - 0.5%
Empire Gas Corp. 7%, 7/15/04 (e) Caa 770,000 660,275
OIL & GAS - 1.8%
Chesapeake Energy Corp. 10 1/2%, 6/1/02 Ba3 850,000 922,250
Flores & Rucks, Inc.:
13 1/2%, 12/1/04 B1 100,000 119,500
9 3/4%, 10/1/06 B3 340,000 360,400
Forcenergy, Inc. 9 1/2%, 11/1/06 B2 60,000 62,550
KCS Energy, Inc. 11%, 1/15/03 B1 300,000 325,500
Mesa Operating Co. 10 5/8%, 7/1/06 B2 420,000 456,750
United Meridian Corp. 10 3/8%, 10/15/05 B2 300,000 327,750
2,574,700
TOTAL ENERGY 3,234,975
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE
(UNAUDITED) AMOUNT (B) (NOTE 1)
NONCONVERTIBLE BONDS - CONTINUED
FINANCE - 4.2%
ASSET-BACKED SECURITIES - 1.1%
Airplanes Pass Through Trust Class D 10 7/8%,
3/15/19 Ba2 $ 1,170,000 $ 1,301,625
Premier Auto Trust 4.90%, 12/15/98 Aaa 64,096 63,785
Sears Credit Account Master Trust II 7%,
1/15/04 Aaa 200,000 203,750
Standard Credit Card Master Trust I 7.65%,
2/15/00 A2 30,000 30,488
1,599,648
BANKS - 1.6%
Deutsche Bank Finance NV 4 1/8%,
11/15/99 (i) Aa1 JPY 100,000 934,196
Export-Import Bank of Japan euro 4 3/8%,
10/1/03 (i) Aaa JPY 130,000 1,266,925
Lloyds Bank PLC 7 3/8%, 3/11/04 Aa3 GBP 75,000 123,529
2,324,650
CREDIT & OTHER FINANCE - 0.2%
General Electric Capital Corp.:
6 1/2%, 2/8/99 Aaa SEK 500,000 72,777
7 3/8%, 2/8/99 (i) Aaa ITL 140,000 94,117
Homeside, Inc. 11 1/8%, 5/15/03 Ba1 125,000 139,375
306,269
SAVINGS & LOANS - 1.3%
First Nationwide Escrow Corp. 10 5/8%,
10/1/03 (f) Ba3 1,480,000 1,598,400
First Nationwide Holdings, Inc. 12 1/4%,
5/15/01 Ba2 100,000 113,500
First Nationwide Parent Holdings Ltd. 12 1/2%,
4/15/03 B2 70,000 77,525
1,789,425
TOTAL FINANCE 6,019,992
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE
(UNAUDITED) AMOUNT (B) (NOTE 1)
NONCONVERTIBLE BONDS - CONTINUED
HEALTH - 0.6%
DRUGS & PHARMACEUTICALS - 0.0%
Glaxo Wellcome PLC euro 8 3/4%, 12/1/05 A1 GBP 25,000 $ 44,795
MEDICAL EQUIPMENT & SUPPLIES - 0.5%
Dade International, Inc. 11 1/8%, 5/1/06 B3 500,000 541,250
IMED Corp. 9 3/4%, 12/1/06 (f) B3 150,000 152,625
693,875
MEDICAL FACILITIES MANAGEMENT - 0.1%
Quest Diagnostics, Inc. 10 3/4%, 12/15/06 B2 70,000 73,675
TOTAL HEALTH 812,345
HOLDING COMPANIES - 0.1%
BPC Holdings Corp. 12 1/2%, 6/15/06 Caa 140,000 148,400
Gray Communications Systems, Inc. 10 5/8%,
10/1/06 B3 40,000 42,400
190,800
INDUSTRIAL MACHINERY & EQUIPMENT - 2.0%
ELECTRICAL EQUIPMENT - 1.3%
Motors & Gears, Inc. 10 3/4%, 11/15/06 (f) B3 150,000 154,500
Omnipoint Corp.:
11 5/8%, 8/15/06 B2 370,000 383,875
Series A, 11 5/8%, 8/15/06 (f) B2 1,200,000 1,245,000
1,783,375
INDUSTRIAL MACHINERY & EQUIPMENT - 0.5%
International Knife & Saw, Inc. 11 3/8%,
11/15/06 (f) B3 70,000 72,275
MVE, Inc. 12 1/2%, 2/15/02 B3 120,000 127,200
Specialty Equipment Companies, Inc. 11 3/8%,
12/1/03 B3 500,000 546,250
745,725
POLLUTION CONTROL - 0.2%
Allied Waste of North America, Inc. 10 1/4%,
12/1/06 (f) B3 280,000 294,000
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 2,823,100
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE
(UNAUDITED) AMOUNT (B) (NOTE 1)
NONCONVERTIBLE BONDS - CONTINUED
MEDIA & LEISURE - 6.6%
BROADCASTING - 3.9%
American Telecasting, Inc. 0%, 8/15/05 (d) Caa $ 40,000 $ 14,800
Bell Cablemedia PLC (d):
0%, 7/15/04 B2 180,000 156,600
yankee 0%, 9/15/05 B2 200,000 162,000
CS Wireless Systems, Inc. 0%, 3/1/06 (d) Caa 540,000 188,643
Diamond Cable Communications PLC yankee (d):
0%, 9/30/04 B3 980,000 803,600
0%, 12/15/05 B3 230,000 163,588
Granite Broadcasting Corp. 10 3/8%, 5/15/05 B3 250,000 256,250
International Cabletel, Inc. 0%, 2/1/06 (d) B3 130,000 88,075
Jacor Communications Co. 9 3/4%, 12/15/06 B2 130,000 132,600
NWCG Holdings Corp. 0%, 6/15/99 Caa 190,000 157,700
Peoples Choice TV Corp. unit 0%, 6/1/04 (d) Caa 1,210,000 508,200
SFX Broadcasting, Inc. 10 3/4%, 5/15/06 B3 1,470,000 1,543,500
Spanish Broadcasting System, Inc. 7 1/2%,
6/15/02 B3 800,000 842,000
TV Filme, Inc. yankee 12 7/8%,
12/15/04 (f) B2 250,000 250,938
Tevecap SA 12 5/8%, 11/26/04 (f) B2 200,000 204,500
Videotron Holdings PLC yankee (d):
0%, 7/1/04 B3 60,000 51,900
0%, 8/15/05 B3 90,000 72,450
5,597,344
ENTERTAINMENT - 0.8%
AMF Group, Inc., 10 7/8%, 3/15/06 B2 260,000 274,300
Cobblestone Golf Group, Inc. 11 1/2%, 6/1/03 B2 500,000 520,000
Viacom, Inc. 8%, 7/7/06 B1 400,000 388,000
1,182,300
LEISURE DURABLES & TOYS - 0.5%
ICON Fitness Corp. 0%, 11/15/06 (f) - 350,000 183,750
ICON Health and Fitness, Inc. 13%, 7/15/02 B3 500,000 562,500
746,250
LODGING & GAMING - 0.4%
Grand Casinos, Inc. 10 1/8%, 12/1/03 Ba3 260,000 261,300
Horseshoe Gaming LLC 12 3/4%, 9/30/00 B1 290,000 313,200
574,500
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE
(UNAUDITED) AMOUNT (B) (NOTE 1)
NONCONVERTIBLE BONDS - CONTINUED
MEDIA & LEISURE - CONTINUED
RESTAURANTS - 1.0%
SC International Services, Inc. 13%, 10/1/05 B3 $ 1,190,000 $ 1,344,700
TOTAL MEDIA & LEISURE 9,445,094
NONDURABLES - 3.4%
FOODS - 2.1%
Fresh Del Monte Produce NV 10%, 5/1/03 Caa 260,000 249,600
Gorges/Quik-to-Fix Foods, Inc. 11 1/2%,
12/1/06 (f) B3 1,300,000 1,347,125
International Home Foods, Inc.
10 3/8%, 11/1/06 (f) B2 770,000 802,725
Specialty Foods Corp. 10 1/4%, 8/15/01 B3 650,000 607,750
3,007,200
HOUSEHOLD PRODUCTS - 1.3%
Revlon Consumer Products Corp. 10 1/2%,
2/15/03 B3 100,000 104,875
Revlon Worldwide Corp. secured 0%, 3/15/98 B3 2,060,000 1,784,475
1,889,350
TOTAL NONDURABLES 4,896,550
RETAIL & WHOLESALE - 3.3%
APPAREL STORES - 0.2%
Mothers Work, Inc. 12 5/8%, 8/1/05 B3 260,000 270,400
GENERAL MERCHANDISE STORES - 0.7%
K mart Corp.:
8.71%, 4/7/97 Ba2 30,000 30,113
8.70%, 8/1/97 Ba2 250,000 250,625
9.55%, 6/30/98 Ba2 250,000 252,813
7.24%, 7/6/99 Ba3 500,000 480,000
1,013,551
GROCERY STORES - 2.2%
Pathmark Stores, Inc.:
11 5/8%, 6/15/02 Caa 750,000 766,875
12 5/8%, 6/15/02 Caa 30,000 30,750
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE
(UNAUDITED) AMOUNT (B) (NOTE 1)
NONCONVERTIBLE BONDS - CONTINUED
RETAIL & WHOLESALE - CONTINUED
GROCERY STORES - CONTINUED
Ralph's Grocery Co.:
10.45%, 6/15/04 B1 $ 40,000 $ 42,100
11%, 6/15/05 B3 610,000 634,400
Smith's Food & Drug Centers, Inc. 11 1/4%,
5/15/07 B3 1,280,000 1,408,000
Star Markets, Inc. 13%, 11/1/04 B3 320,000 360,800
3,242,925
RETAIL & WHOLESALE, MISCELLANEOUS - 0.2%
Cole National Group, Inc. 9 7/8%,
12/31/06 (f) B2 190,000 195,700
Guitar Center Management Co., Inc.
11%, 7/1/06 B2 80,000 84,800
280,500
TOTAL RETAIL & WHOLESALE 4,807,376
SERVICES - 1.0%
ADVERTISING - 0.1%
Lamar Advertising Co. 9 5/8%, 12/1/06 B1 200,000 206,000
GOVERNMENT SERVICES - 0.3%
Queensland Treasury Corp.:
8%, 8/14/01 Aaa AUD 250,000 206,082
8%, 5/14/03 Aaa AUD 200,000 164,459
370,541
PRINTING - 0.5%
Sullivan Graphics, Inc. 12 3/4%, 8/1/05 Caa 710,000 685,150
SERVICES - 0.1%
Iron Mountain, Inc. 10 1/8%, 10/1/06 B3 20,000 21,100
Outsourcing Solutions, Inc. 11%, 11/1/06 (f) B3 40,000 41,900
Pierce Leahy Corp. 11 1/8%, 7/15/06 B3 60,000 65,700
128,700
TOTAL SERVICES 1,390,391
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE
(UNAUDITED) AMOUNT (B) (NOTE 1)
NONCONVERTIBLE BONDS - CONTINUED
TECHNOLOGY - 2.8%
COMMUNICATIONS EQUIPMENT - 0.8%
Echostar Communications Corp. 0%,
6/1/04 (d) B2 $ 840,000 $ 690,900
Echostar Satellite Broadcasting Corp. 0%,
3/15/04 (d) Caa 690,000 522,675
1,213,575
COMPUTER SERVICES & SOFTWARE - 0.7%
Anacomp, Inc. pay-in-kind 13%, 6/4/02 - 816,534 839,805
ICG Holdings, Inc. 0%, 9/15/05 (d) - 200,000 141,000
980,805
COMPUTERS & OFFICE EQUIPMENT - 1.1%
Dictaphone Corp. 11 3/4%, 8/1/05 B3 40,000 35,800
Exide Electronics Group, Inc. 11 1/2%, 5/15/06 B3 270,000 287,550
Unisys Corp.:
12%, 4/15/03 B1 950,000 1,016,500
11 3/4%, 10/15/04 B1 190,000 202,588
1,542,438
ELECTRONICS - 0.2%
Advanced Micro Devices, Inc. 11%, 8/1/03 Ba1 270,000 292,275
TOTAL TECHNOLOGY 4,029,093
TRANSPORTATION - 0.1%
AIR TRANSPORTATION - 0.1%
US Air, Inc. 9 5/8%, 2/1/01 B3 150,000 149,250
UTILITIES - 4.3%
CELLULAR - 2.4%
Fonorola, Inc. 12 1/2%, 8/15/02 B2 1,020,000 1,116,900
Microcell Telecommunications, Inc. 0%,
6/1/06 (d) B3 630,000 351,225
Mobile Telecommunications Technologies Corp.
13 1/2%, 12/15/02 B3 310,000 310,000
Nextel Communications, Inc. (d):
0%, 9/1/03 B3 800,000 624,000
0%, 8/15/04 B3 290,000 196,838
Pagemart Nationwide, Inc. 0%, 2/1/05 (d) - 130,000 89,375
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE
(UNAUDITED) AMOUNT (B) (NOTE 1)
NONCONVERTIBLE BONDS - CONTINUED
UTILITIES - CONTINUED
CELLULAR - CONTINUED
RSL Communications Ltd./RSL Communications
PLC unit 12 1/4%, 11/15/06 (f) - $ 600,000 $ 606,000
Sprint Spectrum LP/Sprint Spectrum Finance Corp.
11%, 8/15/06 B2 120,000 129,000
3,423,338
ELECTRIC UTILITY - 0.1%
Eskom 0%, 9/1/02 Baa3 ZAR 1,350,000 122,694
TELEPHONE SERVICES - 1.8%
Brooks Fiber Properties, Inc. 0%,
11/1/06 (d)(f) - 310,000 197,625
Call-Net Enterprises, Inc. yankee 0%, 12/1/04 (d) B2 630,000 516,600
GST USA, Inc. 0%, 12/15/05 (d) - 190,000 116,375
MFS Communications, Inc. 0%, 1/15/06 (d) B1 70,000 51,100
Nextlink Communications, Inc. 12 1/2%,
4/15/06 - 1,210,000 1,300,750
Teleport Communications Group, Inc.:
8%, 8/1/05 B1 500,000 341,875
9 7/8%, 7/1/06 B1 110,000 116,600
2,640,925
TOTAL UTILITIES 6,186,957
TOTAL NONCONVERTIBLE BONDS 51,628,123
TOTAL CORPORATE BONDS
(Cost $50,638,278) 52,348,309
U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - 14.3%
U.S. TREASURY OBLIGATIONS - 12.9%
6 1/8%, 3/31/98 Aaa 75,000 75,363
9%, 5/15/98 Aaa 620,000 646,158
8 7/8%, 11/15/98 Aaa 224,000 235,691
8 7/8%, 2/15/99 Aaa 2,530,000 2,676,664
9 1/8%, 5/15/99 Aaa 5,647,000 6,034,328
U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE
(UNAUDITED) AMOUNT (B) (NOTE 1)
U.S. TREASURY OBLIGATIONS - CONTINUED
8%, 8/15/99 Aaa $ 5,600,000 $ 5,866,000
6 7/8%, 3/31/00 Aaa 2,112,000 2,159,520
7 7/8%, 11/15/04 Aaa 700,000 763,875
18,457,599
U.S. GOVERNMENT AGENCY OBLIGATIONS - 1.4%
Farm Credit System Financial Assistance Corp.
9 3/8%, 7/21/03 Aaa 98,000 112,792
Government Trust Certificates (assets of Trust
guaranteed by U.S. Government through
Defense Security Assistance Agency):
Class 1-C 9 1/4%, 11/15/01 Aaa 53,932 57,728
Class 2-E 9.40%, 5/15/02 Aaa 227,315 243,775
Class T-2 9 5/8%, 5/15/02 Ba3 110,000 117,858
Private Export Funding Corp. secured
6.86%, 4/30/04 Aaa 855,000 867,492
State of Israel (guaranteed by U.S. Government
through Agency for International Development):
7 3/4%, 4/1/98 Aaa 4,701 4,769
4 7/8%, 9/15/98 Aaa 40,000 39,292
7 1/8%, 8/15/99 Aaa 151,000 154,548
7 3/4%, 11/15/99 Aaa 33,000 34,321
8 1/2%, 4/1/06 Aaa 200,000 218,400
U.S. Housing & Urban Development
8.27%, 8/1/03 Aaa 210,000 229,406
2,080,381
TOTAL U.S. GOVERNMENT AND
GOVERNMENT AGENCY OBLIGATIONS
(Cost $20,752,461) 20,537,980
U.S. GOVERNMENT AGENCY - MORTGAGE-BACKED SECURITIES - 14.1%
FEDERAL HOME LOAN MORTGAGE CORPORATION - 0.5%
6%, 12/1/07 Aaa 137,325 134,105
8 1/2%, 3/1/20 Aaa 568,939 596,066
730,171
U.S. GOVERNMENT AGENCY - MORTGAGE-BACKED SECURITIES - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE
(UNAUDITED) AMOUNT (B) (NOTE 1)
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 5.8%
5 1/2%, 5/1/11 Aaa $ 987,073 $ 929,082
6%, 4/1/01 to 1/1/26 Aaa 4,025,288 3,822,780
6 1/2%, 5/1/08 to 2/1/26 Aaa 2,609,883 2,504,518
7 1/2%, 6/1/26 Aaa 989,236 988,613
8,244,993
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 7.8%
6%, 1/15/09 to 5/15/09 Aaa 1,366,937 1,327,479
6 1/2%, 4/15/26 to 5/15/26 Aaa 982,937 937,476
7%, 9/15/25 to 12/15/26 Aaa 1,999,514 1,955,816
7 1/2%, 2/15/22 to 12/15/26 Aaa 4,855,574 4,863,948
8 1/2%, 4/15/26 to 9/15/26 Aaa 1,910,153 1,979,396
11 1/2%, 3/15/10 Aaa 119,656 136,019
11,200,134
TOTAL U.S. GOVERNMENT AGENCY -
MORTGAGE-BACKED SECURITIES
(Cost $20,232,532) 20,175,298
COMMERCIAL MORTGAGE SECURITIES - 0.0%
Meritor Mortgage Security Corp.
Series 1987-1 Class A3, 9.40%, 6/1/99
(Cost $15,134) Baa3 15,021 15,003
FOREIGN GOVERNMENT OBLIGATIONS (J) - 21.5%
Argentinian Republic:
BOCON (h):
3.414%, 4/1/01 BBB- ARS 682,643 595,133
3.414%, 4/1/07 BB- ARS 955,699 678,380
Bote 2.218%, 4/3/00 (h) B1 2,145 1,052
Brady euro floating rate bond 6 5/8%,
3/31/05 (bearer) (h) B1 588,000 511,193
Brady par euro 5 1/4%, 3/31/23 (e) B1 2,350,000 1,481,969
Austrian Republic euro 4 1/2%, 9/28/05 (i) Aaa JPY 70,000 690,341
Belgian Kingdom (i):
8 3/4%, 6/25/02 AAA BEF 12,000 446,028
5.10%, 11/21/04 (h) AAA BEF 8,000 266,402
7 1/2%, 7/29/08 AAA BEF 3,000 104,589
Brazilian Federative Republic Brady:
capitalization bond 8%, 4/15/14 B1 1,404,245 1,035,631
6.8125%, 4/15/24 (e) B1 560,000 431,200
exit bond euro 6%, 9/15/13 B1 1,250,000 896,875
FLIRB 4 1/2%, 4/15/09 (bearer) (e) B1 1,000,000 715,000
FOREIGN GOVERNMENT OBLIGATIONS (J) - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE
(UNAUDITED) AMOUNT (B) (NOTE 1)
Canadian Government:
8 1/2%, 4/1/02 Aa1 CAD 200,000 $ 164,890
7 1/2%, 12/1/03 Aa1 CAD 1,050,000 829,292
Danish Kingdom:
9%, 11/15/98 Aaa DKK 200,000 36,895
Bullet:
9%, 11/15/00 Aaa DKK 400,000 77,279
8%, 5/15/03 Aaa DKK 2,200,000 414,135
Dutch Government:
8 3/4%, 5/1/00 AAA NLG 300,000 197,605
5 3/4%, 1/15/04 AAA NLG 1,100,000 650,211
7%, 6/15/05 AAA NLG 260,000 163,976
Ecuador Republic Brady:
interest equalization bond
euro 6 1/2%, 12/21/04 (bearer) (h) - 450,000 391,500
par euro 3 1/4%, 2/28/25 (e) - 2,100,000 969,938
past due interest euro 6 1/2%,
2/28/15 (bearer) (h) - 2,595,892 1,589,984
French Government:
OAT 9 1/2%, 1/25/01 Aaa FRF 5,500,000 1,255,356
8 1/2%, 12/26/12 Aaa FRF 3,600,000 846,867
German Federal Republic:
7 3/4%, 2/21/00 Aaa DEM 125,000 89,539
8 3/8%, 5/21/01 Aaa DEM 1,500,000 1,113,883
Italian Republic (i):
12%, 1/17/99 Aa3 ITL 900,000 652,589
10 1/2%, 9/1/05 Aa3 ITL 1,600,000 1,258,710
Kazakhstan Republic 9 1/4%, 12/20/09 (f) - 250,000 251,875
Mexico Value recovery rights - 1,690,000 -
Panamanian Republic Brady:
interest reduction bond euro
3 1/2%, 7/17/14 (h) BB 950,000 658,469
past due interest euro 6 3/4%, 7/17/19 (e) BB 705,000 549,900
Peruvian Republic (f):
past due interest 0%, 8/22/16 - 250,000 147,188
FLIRB 0%, 10/13/16 - 500,000 273,438
Philippine Government:
15 1/2%, 1/25/03 BBB+ PHP 1,000,000 38,959
8 3/4%, 10/7/16 (f) B1 250,000 258,125
Russian Government (g):
interest notes 0%, 12/31/16 (f) - 250,000 173,125
principal loans 0%, 8/12/21 - 625,000 364,844
FOREIGN GOVERNMENT OBLIGATIONS (J) - CONTINUED
MOODY'S RATINGS (C) PRINCIPAL VALUE
(UNAUDITED) AMOUNT (B) (NOTE 1)
South African Republic 12%, 2/28/05 Baa1 ZAR 1,000,000 $ 174,808
Spanish Kingdom:
11.45%, 8/30/98 AAA ESP 15,000,000 124,721
10 1/4%, 11/30/98 AAA ESP 5,000,000 41,566
10.90%, 8/30/03 AAA ESP 75,000,000 712,411
Swedish Kingdom 10 1/4%, 5/5/03 Aa1 SEK 3,200,000 567,714
Treuhandstalt 7 3/8%, 12/2/02 Aaa DEM 2,400,000 1,727,408
United Kingdom, Great Britain & Northern Ireland:
10%, 2/26/01 Aaa GBP 180,000 337,921
9 3/4%, 8/27/02 Aaa GBP 50,000 94,857
9%, 10/13/08 Aaa GBP 650,000 1,234,538
United Mexican States Brady discount (h):
B 6 3/8%, 12/31/19 Ba3 350,000 301,017
D 6.4531%, 12/31/19 Ba2 750,000 645,000
United Mexican States global bond 11 1/2%,
5/15/26 Ba2 615,000 649,440
Venezuelan Republic:
Brady:
debt conversion bond 6 1/2%, 12/18/07 (h) Ba3 500,000 440,313
discount A 6.4375%, 3/31/20 (h) Ba3 500,000 415,625
FLIRB B 6.4375%, 3/31/07 (h) Ba3 750,000 668,438
par A euro 6 3/4%, 3/31/20 Ba3 1,750,000 1,336,563
oil recovery rights - 12,320 -
TOTAL FOREIGN GOVERNMENT OBLIGATIONS
(Cost $28,779,703) 30,744,705
SUPRANATIONAL OBLIGATIONS - 2.0%
Asian Development Bank 3 1/8%, 6/29/05 (i) Aaa JPY 10,000 89,306
European Investment Bank euro 6 3/4%,
5/10/01 (i) Aaa JPY 35,000 366,149
InterAmerica Development Bank
euro 6%, 10/30/01(i) Aaa JPY 235,000 2,438,163
TOTAL SUPRANATIONAL OBLIGATIONS
(cost $3,099,381) 2,893,618
COMMON STOCKS - 0.2%
SHARES VALUE
(NOTE 1)
BASIC INDUSTRIES - 0.0%
CHEMICALS & PLASTICS - 0.0%
Foamex-JPS Automotive LP/Foamex-JPS Capital Corp.
(warrants) (a) 260 $ 6,240
Sterling Chemicals Holdings, Inc. (warrants) (a) 120 4,200
10,440
HOLDING COMPANIES - 0.1%
SDW Holdings Corp. (a):
(warrants) 16,500 84,975
Series B (warrants) 1,300 22,100
107,075
MEDIA & LEISURE - 0.0%
BROADCASTING - 0.0%
CS Wireless Systems, Inc. (a)(f) 148 -
LEISURE DURABLES & TOYS - 0.0%
IHF Capital, Inc., Series I (warrants) (a)(f) 270 9,450
TOTAL MEDIA & LEISURE 9,450
TECHNOLOGY - 0.0%
COMPUTERS & OFFICE EQUIPMENT - 0.0%
Exide Electronics Group, Inc. (warrants) (a)(f) 200 6,000
UTILITIES - 0.1%
CELLULAR - 0.1%
Intercel, Inc. (warrants) (a) 3,328 23,296
Microcell Telecommunications, Inc. (a):
(warrants) 2,520 31,500
(conditional warrants) 2,520 1,575
Pagemart Nationwide, Inc. (non-vtg.) (a) 2,100 14,700
71,071
TOTAL COMMON STOCKS
(Cost $119,241) 204,036
PREFERRED STOCKS - 5.9%
SHARES VALUE
(NOTE 1)
CONVERTIBLE PREFERRED STOCKS - 0.3%
RETAIL & WHOLESALE - 0.3%
GROCERY STORES - 0.3%
Supermarkets General Holdings Corp.
$3.52 pay-in-kind (a) 12,725 $ 343,575
NONCONVERTIBLE PREFERRED STOCKS - 5.6%
FINANCE - 1.3%
SAVINGS & LOANS - 1.3%
Chevy Chase Capital Corp., Series A, $5.1875 20,000 1,035,000
First Nationwide Bank 11 1/2% 1,730 197,869
Greater New York Savings Bank, Series B, 12% 18,787 610,578
1,843,447
HOLDING COMPANIES - 0.3%
SDW Holdings Corp. 15% (f) 13,000 474,500
MEDIA & LEISURE - 3.3%
BROADCASTING - 2.8%
Cablevision Systems Corp., Series H, $11.75
pay-in-kind 6,585 615,698
PanAmSat Corp. 12 3/4% pay-in-kind 391 478,975
Time Warner, Inc., Series M, 10 1/4% pay-in-kind 2,741 2,973,985
4,068,658
PUBLISHING - 0.5%
K-III Communications Corp.:
Series B, $11.625 pay-in-kind (a) 2,146 217,283
Series D, $200 5,400 526,500
743,783
TOTAL MEDIA & LEISURE 4,812,441
TECHNOLOGY - 0.4%
COMPUTER SERVICES & SOFTWARE - 0.4%
ICG Holdings, Inc. 14 1/4% pay-in-kind 517 571,285
PREFERRED STOCKS - CONTINUED
SHARES VALUE
(NOTE 1)
NONCONVERTIBLE PREFERRED STOCKS - CONTINUED
UTILITIES - 0.3%
ELECTRIC UTILITY - 0.3%
El Paso Electric Co., Series A, 11.40% pay-in-kind 3,469 $ 385,059
TOTAL NONCONVERTIBLE PREFERRED STOCKS 8,086,732
TOTAL PREFERRED STOCKS
(Cost $7,816,977) 8,430,307
PURCHASED BANK DEBT - 0.0%
PRINCIPAL
AMOUNT (B)
Socialist Republic of Vietnam loans restructured under
1985 agreement (a) (Cost $25,680) DEM 50,000 32,112
SOVEREIGN LOAN PARTICIPATIONS - 1.5%
Bank for Foreign Economic Affairs of Russia
(Vnesheconombank) final loan:
- ING Bank N.V. 750,000 595,313
- Morgan Guaranty Trust Company
of New York 250,000 198,438
Ivory Coast restructured loan (a):
- The Chase Manhattan Bank 300,000 97,875
- Morgan Guaranty Trust Company
of New York 500,000 163,125
- Banque Paribas 700,000 228,375
Peruvian Republic loan participation under
1983 agreement (a):
- Citibank N.A. 100,000 114,000
- ING Bank N.V. 150,000 171,000
- Morgan Guaranty Trust Company
of New York 250,000 285,000
Socialist Republic of Vietnam loan restructured
under 1985 agreement
- - ING Bank N.V. (a) DEM 400,000 256,893
TOTAL SOVEREIGN LOAN PARTICIPATIONS
(Cost $1,486,481) $ 2,110,019
CASH EQUIVALENTS - 4.0%
MATURITY VALUE
AMOUNT (NOTE 1)
Investments in repurchase agreements
(U.S. Treasury obligations) in a joint
trading account at 6 3/4%, dated
12/31/96 due 1/2/97 $ 5,743,153 $ 5,741,000
PURCHASED OPTIONS - 0.0%
EXPIRATION DATE/ UNDERLYING FACE
STRIKE PRICE AMOUNT AT VALUE
First National Bank of Boston Call Option
on $1,250,000 notional amount Bulgarian Feb. 97/
Republic Brady FLIRB 2 1/4%, 7/28/12 36 5/8 $ 476,563 35,250
The Chase Manhattan Bank Call Option
on $1,250,000 notional amount Bulgarian Mar. 97/
Republic Brady FLIRB 2 1/4%, 7/28/12 40 7/8 476,563 13,125
TOTAL PURCHASED OPTIONS
(Cost $71,000) 48,375
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $138,777,868) $ 143,280,762
SECURITY TYPE ABBREVIATIONS
FLIRB - Front Loaded Interest Reduction Bonds
CURRENCY ABBREVIATIONS
ARS - Argentine peso
AUD - Australian dollar
BEF - Belgian franc
CAD - Canadian dollar
DEM - German deutsche mark
DKK - Danish krone
ESP - Spanish peseta
FRF - French franc
GBP - British pound
ITL - Italian lira
JPY - Japanese yen
NLG - Dutch guilder
PHP - Philippine peso
SEK - Swedish krona
ZAR - South African rand
LEGEND
1. Non-income producing
2. Principal amount is stated in United States dollars unless otherwise
noted.
3. Standard & Poor's credit ratings are used in the absence of a rating by
Moody's Investors Service, Inc.
4. Debt obligation initially issued in zero coupon form which converts to
coupon form at a specified rate and date.
5. Debt obligation initially issued at one coupon which converts to a
higher coupon at a specified date.
6. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $9,964,389 or 6.9% of net
assets.
7. Security purchased on a delayed delivery or when-issued basis (see Note
2 of Notes to Financial Statements).
8. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
9. Principal amount in thousands.
10. Some 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 40.6% AAA, AA, A 42.3%
Baa 0.2% BBB 0.7%
Ba 7.6% BB 6.3%
B 27.8% B 30.0%
Caa 3.3% CCC 2.8%
Ca, C 0.0% CC, C 0.0%
D 0.0%
For some foreign government obligations, FMR has assigned the ratings of
the sovereign credit of the issuing government. The percentage not rated by
both S&P and Moody's amounted to 6.8%. FMR has determined that unrated debt
securities that are lower quality account for 6.8% of the total value of
investment in securities.
Distribution of investments by country of issue, as a percentage of total
value of investment in securities, is as follows:
United States 71.3%
Germany 2.7
Brazil 2.5
Argentina 2.3
United Kingdom 2.3
Ecuador 2.1
Supranational 2.0
Venezuela 2.0
France 1.5
Italy 1.3
Canada 1.2
Mexico 1.1
Others (individually less than 1%) 7.7
TOTAL 100.0%
INCOME TAX INFORMATION
At December 31, 1996, the aggregate cost of investment securities for
income tax purposes was $138,833,743. Net unrealized appreciation
aggregated $4,447,019, of which $6,032,603 related to appreciated
investment securities and $1,585,584 related to depreciated investment
securities.
The fund hereby designates approximately $369,000 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>
DECEMBER 31, 1996

ASSETS $ 143,280,762
Investment in securities, at value (including repurchase agreements of
$5,741,000) (cost $138,777,868) - See accompanying schedule

Cash 570,105

Receivable for investments sold 278,249
Regular Delivery

Delayed Delivery 1,264,219

Dividends receivable 69,755

Interest receivable 2,234,908

Other receivables 2,304

Prepaid expenses 13,415

TOTAL ASSETS 147,713,717

LIABILITIES $ 1,662,671
Payable for investments purchased
Regular delivery

Delayed delivery 1,936,256

Distributions payable 489,369

Accrued management fee 68,091

Distribution fees payable 47,909

Other payables and accrued expenses 85,899

TOTAL LIABILITIES 4,290,195

NET ASSETS $ 143,423,522

Net Assets consist of: $ 137,538,381
Paid in capital

Undistributed net investment income 39,713

Accumulated undistributed net realized gain (loss) on investments and 1,345,817
foreign currency transactions

Net unrealized appreciation (depreciation) on investments and assets 4,499,611
and liabilities in foreign currencies

NET ASSETS $ 143,423,522

CALCULATION OF MAXIMUM OFFERING PRICE $11.25
CLASS A:
NET ASSET VALUE and redemption price per share ($587,211 (divided by) 52,191
shares)

Maximum offering price per share (100/95.75 of $11.25) $11.75

CLASS T: $11.25
NET ASSET VALUE and redemption price per share
($99,327,105 (divided by) 8,830,996 shares)

Maximum offering price per share (100/96.50 of $11.25) $11.66

CLASS B: $11.26
NET ASSET VALUE and offering price per share
($37,402,546 (divided by) 3,321,267 shares) A

INSTITUTIONAL CLASS: $11.30
NET ASSET VALUE, offering price and redemption price
per share ($6,106,660 (divided by) 540,504 shares)

</TABLE>

A 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 DECEMBER 31, 1996

INVESTMENT INCOME $ 425,445
Dividends

Interest 8,820,172

TOTAL INCOME 9,245,617

EXPENSES

Management fee $ 641,715

Transfer agent fees 604
Class A

Class T 161,684

Class B 60,867

Institutional Class 5,321

Distribution fees 152
Class A

Class T 185,607

Class B 273,748

Accounting fees and expenses 60,655

Non-interested trustees' compensation 591

Custodian fees and expenses 33,669

Registration fees 11,794
Class A

Class T 29,656

Class B 16,575

Institutional Class 21,834

Audit 35,434

Legal 1,217

Miscellaneous 4,354

Total expenses before reductions 1,545,477

Expense reductions (31,010) 1,514,467

NET INVESTMENT INCOME 7,731,150

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

Investment securities 4,370,186

Foreign currency transactions (21,188) 4,348,998

Change in net unrealized appreciation (depreciation) on:

Investment securities 1,501,143

Assets and liabilities in foreign currencies (3,172) 1,497,971

NET GAIN (LOSS) 5,846,969

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM $ 13,578,119
OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1996 1995

INCREASE (DECREASE) IN NET ASSETS

Operations $ 7,731,150 $ 3,238,777
Net investment income

Net realized gain (loss) 4,348,998 2,521,810

Change in net unrealized appreciation (depreciation) 1,497,971 3,002,460

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM 13,578,119 8,763,047
OPERATIONS

Distributions to shareholders (8,336) -
From net investment income
Class A

Class T (5,439,021) (2,143,447)

Class B (2,018,483) (1,275,191)

Institutional Class (235,161) (3,950)

From net realized gain (11,477) -
Class A

Class T (2,365,241) (1,060,007)

Class B (918,814) (539,517)

Institutional Class (126,985) (2,175)

TOTAL DISTRIBUTIONS (11,123,518) (5,024,287)

Share transactions - net increase (decrease) 61,581,370 55,582,973

TOTAL INCREASE (DECREASE) IN NET ASSETS 64,035,971 59,321,733

NET ASSETS

Beginning of period 79,387,551 20,065,818

End of period (including undistributed net investment income $ 143,423,522 $ 79,387,551
of $39,713 and $33,845, respectively)

</TABLE>

FINANCIAL HIGHLIGHTS - CLASS A
YEAR ENDED
DECEMBER 31,

1996 E

SELECTED PER-SHARE DATA

Net asset value, beginning of period $ 11.010

Income from Investment Operations

Net investment income .267 D

Net realized and unrealized gain (loss) .493

Total from investment operations .760

Less Distributions

From net investment income (.280)

From net realized gain (.240)

Total distributions (.520)

Net asset value, end of period $ 11.250

TOTAL RETURN B, C 6.95%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted) $ 587

Ratio of expenses to average net assets 1.25% A
, F

Ratio of net investment income to average net assets 7.32% A

Portfolio turnover rate 119%

A ANNUALIZED
A THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS).
A TOTAL RETURN DOES NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS
OF LESS THAN ONE YEAR IS NOT ANNUALIZED.
A NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
A FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A SHARES)
TO DECEMBER 31, 1996.
A FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE
BEEN HIGHER.
FINANCIAL HIGHLIGHTS - CLASS T
YEARS ENDED DECEMBER 31,

1996 1995 1994 E

<TABLE>
<CAPTION>
<S> <C> <C> <C>
SELECTED PER-SHARE DATA

Net asset value, beginning of period $ 11.000 $ 9.920 $ 10.000

Income from Investment Operations

Net investment income .813 D .885 .064 D

Net realized and unrealized gain (loss) .542 1.231 (.046)

Total from investment operations 1.355 2.116 .018

Less Distributions

From net investment income (.805) (.806) (.098)

From net realized gain (.300) (.230) -

Total distributions (1.105) (1.036) (.098)

Net asset value, end of period $ 11.250 $ 11.000 $ 9.920

TOTAL RETURN B, C 12.89% 22.02% .17%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted) $ 99,327 $ 52,626 $ 10,687

Ratio of expenses to average net assets 1.23% 1.35% F 1.35% A,
F

Ratio of expenses to average net assets after 1.22% 1.35% 1.35% A
expense reductions G

Ratio of net investment income to average net assets 7.34% 7.28% 5.80% A

Portfolio turnover rate 119% 193% 104% A

</TABLE>

A ANNUALIZED
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS).
A TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
A NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
A FOR THE PERIOD OCTOBER 31, 1994 (COMMENCEMENT OF SALE OF CLASS T SHARES)
TO DECEMBER 31, 1994.
A FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE
BEEN HIGHER.
A FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES (SEE NOTE 5 OF
NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - CLASS B
YEARS ENDED DECEMBER 31,

1996 1995 1994 E

<TABLE>
<CAPTION>
<S> <C> <C> <C>
SELECTED PER-SHARE DATA

Net asset value, beginning of period $ 11.010 $ 9.910 $ 10.000

Income from Investment Operations

Net investment income .743 D .820 .072 D

Net realized and unrealized gain (loss) .538 1.237 (.078)

Total from investment operations 1.281 2.057 (.006)

Less Distributions

From net investment income (.731) (.727) (.084)

From net realized gain (.300) (.230) -

Total distributions (1.031) (.957) (.084)

Net asset value, end of period $ 11.260 $ 11.010 $ 9.910

TOTAL RETURN B, C 12.14% 21.35% (.06)%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted) $ 37,403 $ 26,654 $ 9,379

Ratio of expenses to average net assets 1.88% 2.10% F 2.10% A,
F

Ratio of expenses to average net assets after 1.87% 2.10% 2.10% A
expense reductions G

Ratio of net investment income to average net assets 6.69% 6.53% 5.06% A

Portfolio turnover rate 119% 193% 104% A

</TABLE>

A ANNUALIZED
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS).
A TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
A NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
A FOR THE PERIOD OCTOBER 31, 1994 (COMMENCEMENT OF SALE OF CLASS B SHARES)
TO DECEMBER 31, 1994.
A FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE
BEEN HIGHER.
A FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES (SEE NOTE 5 OF
NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
YEARS ENDED DECEMBER
31,

1996 1995 E

SELECTED PER-SHARE DATA

Net asset value, beginning of period $ 11.030 $ 10.890

Income from Investment Operations

Net investment income .826 D .456

Net realized and unrealized gain (loss) .548 .340

Total from investment operations 1.374 .796

Less Distributions

From net investment income (.804) (.426)

From net realized gain (.300) (.230)

Total distributions (1.104) (.656)

Net asset value, end of period $ 11.300 $ 11.030

TOTAL RETURN B, C 13.04% 7.47%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted) $ 6,107 $ 107

Ratio of expenses to average net assets 1.10% F 1.10% A,
F

Ratio of net investment income to average net assets 7.47% 7.53% A

Portfolio turnover rate 119% 193%

A ANNUALIZED
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE5 OF NOTES TO FINANCIAL
STATEMENTS).
A TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
A NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
A FOR THE PERIOD JULY 3, 1995 (COMMENCEMENT OF SALE OF INSTITUTIONAL CLASS
SHARES) TO DECEMBER 31, 1995.
A FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE
BEEN HIGHER.
NOTES TO FINANCIAL STATEMENTS
For the period ended December 31, 1996

1. SIGNIFICANT ACCOUNTING
POLICIES.
Fidelity Advisor Strategic Income 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, Class T, Class B, and Institutional Class shares,
each of which has equal rights as to assets and voting privileges. Each
class has exclusive voting rights with respect to its distribution plan.
The fund commenced sale of a new Class A of shares on September 3, 1996. On
this date, the original Class A was renamed Class T. Investment income,
realized and unrealized capital gains and losses, the common expenses of
the fund, and certain fund-level expense reductions are allocated on a pro
rata basis to each class based on the relative net assets of each class to
the total net assets of the fund. Each class of shares differs in its
respective distribution, transfer agent, registration, and certain other
class-specific fees, expenses, and expense reductions.
The financial statements have been prepared in conformity with generally
accepted accounting principles which permit management to make certain
estimates and assumptions at the date of the financial statements. The
following summarizes the significant accounting policies of the fund:
SECURITY VALUATION. Securities for which quotations are readily available
are valued by a pricing service at their market values as determined by
their most recent bid prices (sales prices if the principal market is an
exchange) in the principal market in which such securities are normally
traded. Securities for which market quotations are not readily available
(and in certain cases debt securities which trade on an exchange) are
valued primarily using dealer-supplied valuations or at their fair value as
determined in good faith under consistently applied procedures under the
general supervision of the Board of Trustees. Short-term securities with
remaining maturities of sixty days or less for which quotations are not
readily available are valued at amortized cost or original cost plus
accrued interest, both of which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Income receipts
and expense payments are translated into U.S. dollars at the prevailing
exchange rate on the respective dates of the transactions. Purchases and
sales of securities are translated into U.S. dollars at the contractual
currency exchange rates established at the time of each trade.
Net realized gains and losses on foreign currency transactions represent
net gains and losses from sales and maturities of
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
FOREIGN CURRENCY TRANSLATION - CONTINUED
forward currency contracts, disposition of foreign currencies, 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 included with the net
realized and unrealized gain or loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to U.S. federal
income taxes to the extent that it distributes substantially all of its
taxable income for its fiscal year. The fund may be subject to foreign
taxes on income, gains on investments or currency repatriation. The fund
accrues such taxes as applicable. The schedule of investments includes
information regarding income taxes under the caption "Income Tax
Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date,
except certain dividends from foreign securities where the ex-dividend date
may have passed, are recorded as soon as the fund is informed of the
ex-dividend date. Non-cash dividends included in dividend income, if any,
are recorded at the fair market value of the securities received. Interest
income, which includes accretion of original issue discount, is accrued as
earned. Investment income is recorded net of foreign taxes withheld where
recovery of such taxes is uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
PREPAID EXPENSES. Fidelity Management & Research Company (FMR) bears all
organizational expenses except for registering and qualifying each class
and shares of each class for distribution under federal and state
securities law. These expenses are borne by each class and amortized over
one year.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are declared daily and paid
monthly from net investment income. Distributions from realized gains, if
any, 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 pro rata basis based on the
number of shares outstanding for 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, which may result in distribution
reclassifications, are primarily due to differing treatments for the
recognition of gains/losses on certain securities, 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
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS -
CONTINUED
and may affect the per-share allocation between net investment income and
realized and unrealized gain (loss). Undistributed net investment income
and accumulated undistributed net realized gain (loss) on investments and
foreign currency transactions may include temporary book and tax basis
differences which will reverse in a subsequent period. Any taxable income
or gain remaining at fiscal year end is distributed in the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated securities.
Losses may arise from changes in the value of the foreign currency or if
the counterparties do not perform under the contracts' terms. The U.S.
dollar value of foreign currency contracts is determined using contractual
currency exchange rates established at the time of each trade. The cost of
the foreign currency contracts is included in the cost basis of the
associated investment.
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 for U.S. Treasury or Federal Agency
obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
Securities are transferred to an account of the fund, or to the Joint
Trading Account, at a bank custodian. The securities are marked-to-market
daily and maintained at a value at least equal to the principal amount of
the repurchase agreement (including accrued interest). FMR, the fund's
investment adviser, is responsible for determining that the value of the
underlying securities remains in accordance with the market value
requirements stated above.
WHEN-ISSUED SECURITIES. The fund may purchase or sell securities on a
when-issued basis. Payment or delivery may take place a month or more after
the date of the transaction. The price of the underlying securities is
fixed at the time the transaction is negotiated. The market values of the
securities purchased on a when-issued or forward commitment basis are
identified as such in the fund's schedule of investments. The fund may
receive compensation for interest forgone in the purchase of a when-issued
security. With respect to purchase commitments, the fund identifies
securities as segregated in its custodial records with a value at least
equal to the amount of the commitment. The payables and receivables
associated with the purchases and sales of when-issued securities having
the same settlement date and broker are offset.
2. OPERATING POLICIES -
CONTINUED
WHEN-ISSUED SECURITIES - CONTINUED
When-issued securities that have been purchased from and sold to different
brokers are reflected as both payables and receivables in the accompanying
Statement of Assets and Liabilities under the caption "Delayed delivery."
Losses may arise due to changes in the market value of the underlying
securities, if the counterparty does not perform under the contract, or if
the issuer does not issue the securities due to political, economic, or
other factors.
OPTIONS. The fund may use options to manage its exposure to the bond market
and to fluctuations in interest rates and currency values. Writing puts and
buying calls tend to increase the fund's exposure to the underlying
instrument. Buying puts and writing calls tend to decrease the fund's
exposure to the underlying instrument, or hedge other fund investments.
Written options involve, to varying degrees, risk of loss in excess of the
option value reflected in the Statement of Assets and Liabilities. The
underlying face amount at value of any open options at period end is shown
in the schedule of investments under the caption "Purchased Options." This
amount reflects each contract's exposure to the underlying instrument at
period end. Losses may arise from changes in the value of the underlying
instruments, if there is an illiquid secondary market for the contracts, or
if the counterparties do not perform under the contracts' terms.
Exchange-traded options are valued using the last sale price or, in the
absence of a sale, the last offering price. Options traded over-the-counter
are valued using dealer-supplied valuations.
LOANS AND OTHER DIRECT DEBT INSTRUMENTS. The fund is permitted to invest in
loans and loan participations, trade claims or other receivables. These
investments may include standby financing commitments that obligate the
fund to supply additional cash to the borrower on demand. Loan
participations involve a risk of insolvency of the lending bank or other
financial intermediary. At the end of the period, these investments
amounted to $2,142,131 or 1.5% of net assets.
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $178,045,301 and $122,980,641, respectively, of which U.S.
government and government agency obligations aggregated $49,419,737 and
$32,995,402, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly
fee that is calculated on the basis of a group fee rate plus a fixed
individual fund fee rate applied to the average net assets of the fund. The
group fee rate is the weighted average of a series of rates and is based on
the monthly average net
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
assets of all the mutual funds advised by FMR. The rates ranged from .1100%
to .3700% for the period. In the event that these rates were lower than the
contractual rates in effect during the period, FMR voluntarily implemented
the above rates, as they resulted in the same or a lower management fee.
The annual individual fund fee rate is .45%. For the period, the management
fee was equivalent to an annual rate of .59% of average net assets.
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the 1940
Act, the Trustees have adopted separate distribution plans with respect to
the fund's Class A shares (Class A Plan), Class T shares (Class T Plan),
Class B shares (Class B Plan), and Institutional Class shares (collectively
referred to as "the Plans"). Under the Class A, Class T, and Class B Plans
the fund pays Fidelity Distributors Corporation (FDC), an affiliate of FMR,
a distribution and service fee. This fee is based on annual rates of .15%,
.25% and .90% (of which .65% represents a distribution fee and .25%
represents a shareholder service fee), of the average net assets of the
Class A, Class T, and Class B shares, respectively. For the period, the
fund paid FDC $152, $185,607, and $273,748 under the Class A, Class T, and
Class B Plans, of which $152, $185,607, and $76,042 were paid to securities
dealers, banks and other financial institutions for the distribution of
Class A, Class T, and Class B shares, and providing shareholder support
services.
Under the Plans, FMR or FDC may use its resources to pay administrative and
promotional expenses related to the sale of the fund's Class A, Class T,
Class B, and Institutional Class shares. The Plans also authorize payments
to third parties that assist in the sale of the fund's shares or render
shareholder support services.
SALES LOAD. FDC receives a front-end sales charge of up to 4.25% and 3.50%
for selling Class A and Class T shares of the fund, respectively, and the
proceeds of a contingent deferred sales charge levied on Class B share
redemptions occurring within five years of purchase. The Class B charge is
based on declining rates which range from 4% to 1% of the lesser of the
cost of shares at the initial date of purchase or the net asset value of
the redeemed shares, excluding any reinvested dividends and capital gains.
Effective January 2, 1997, the Board of Trustees approved a revised Class B
contingent deferred sales charge for shares purchased on or after January
2, 1997. Under the revised arrangement, FDC receives the proceeds of a
contingent deferred sales charged levied on Class B share redemptions
occurring within six years of purchase. The Class B charge is based on
declining rates which range from 5% to 1% of the lesser of the cost of
shares at the initial date of purchase or the net asset value of the
redeemed shares, excluding any reinvested dividends and capital gains.
For the period, FDC received sales charges of $13,287 and $558,381 on sales
of Class A and Class T shares of the fund, of which $11,659 and $463,775
was paid to securities dealers, banks, and other financial
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
SALES LOAD - CONTINUED
institutions. FDC also received contingent deferred sales charges of
$56,783 on Class B share redemptions from the fund. When Class B shares are
initially sold, FDC pays commissions from its own resources to dealers
through which the sales are made.
TRANSFER AGENT FEES. Fidelity Investments Institutional Operations Company
(FIIOC), an affiliate of FMR, is the transfer, dividend disbursing, and
shareholder servicing agent for the fund's Class A, Class B, and
Institutional Class Shares, while State Street Bank and Trust Company
(State Street) (collectively, with FIIOC, referred to as the Transfer
Agents) acts in that capacity for the fund's Class T shares. The Transfer
Agents receive account fees and asset-based fees that vary according to
account size and type of account of the shareholders of the respective
classes of the fund. With respect to the Class T shares, State Street has
delegated certain transfer, dividend disbursing, and shareholder services
to FIIOC for which FIIOC receives its allocable share of all such fees.
FIIOC pays for typesetting, printing and mailing of all shareholder
reports, except proxy statements. For the period, the transfer agent fees
were equivalent to annual rates of .60% (annualized), .22%, .20%, and .17%
of the average net assets of Class A, Class T, Class B, and Institutional
Class, respectively.
Effective January 1, 1997, FIIOC will replace State Street as the transfer
agent for the fund's Class T shares.
ACCOUNTING FEES. Fidelity Service Co. (FSC), an affiliate of FMR, maintains
the fund's accounting records. The fee is based on the level of average net
assets for the month plus out-of-pocket expenses.
5. EXPENSE REDUCTIONS.
FMR voluntarily agreed to reimburse operating expenses (excluding interest,
taxes, brokerage commissions and extraordinary expenses) above annual rates
of 1.25%, 1.35%, 2.00%, and 1.10% of average net assets for Class A, Class
T, Class B, and Institutional Class, respectively. For the period, the
reimbursement reduced expenses by $11,960 and $14,003 for Class A and
Institutional Class, respectively.
In addition, the fund has entered into an arrangement with its custodian
whereby interest earned on uninvested cash balances was used to offset a
portion of expenses. During the period, the fund's custodian fees were
reduced by $5,047 under this arrangement.
6. BENEFICIAL INTEREST.
At the end of the period, one shareholder was record owner of approximately
10% of the total outstanding shares of the fund.
7. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SHARES DOLLARS

YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,

1996 A 1995 B 1996 A 1995 B

CLASS A 50,970 - $ 576,976 $ -
Shares sold

Reinvestment of distributions 1,518 - 17,135 -

Shares redeemed (297) - (3,402) -

Net increase (decrease) 52,191 - $ 590,709 $ -

CLASS T 5,716,371 4,244,040 $ 63,555,043 $ 45,511,133
Shares sold

Reinvestment of distributions 576,193 252,211 6,422,573 2,745,208

Shares redeemed (2,244,243) (791,295) (24,923,904) (8,398,421)

Net increase (decrease) 4,048,321 3,704,956 $ 45,053,712 $ 39,857,920

CLASS B 1,224,871 1,562,341 $ 13,679,656 $ 16,458,839
Shares sold

Reinvestment of distributions 224,151 147,710 2,516,519 1,605,499

Shares redeemed (548,526) (235,345) (6,111,458) (2,445,410)

Net increase (decrease) 900,496 1,474,706 $ 10,084,717 $ 15,618,928

INSTITUTIONAL CLASS 525,446 9,183 $ 5,792,940 $ 100,000
Shares sold

Reinvestment of distributions 31,439 557 353,974 6,125

Shares redeemed (26,121) - (294,682) -

Net increase (decrease) 530,764 9,740 $ 5,852,232 $ 106,125

</TABLE>

To the Trustees of Fidelity Advisor Series VIII and the Shareholders of
Fidelity Advisor Stategic Income Fund:
We have audited the accompanying statement of assets and liabilities of
Fidelity Advisor Series VIII: Fidelity Advisor Strategic Income Fund,
including the schedule of portfolio investments, as of December 31, 1996,
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 of Class A, Class T, Class B and
Institutional Class for each of the periods indicated therein. 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 December 31, 1996 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 Income Fund as
of December 31, 1996, 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 of Class A, Class T, Class
B and Institutional Class for each of the periods indicated therein, in
conformity with generally accepted accounting principles.
/s/COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
February 13, 1997
DISTRIBUTIONS

A total of 8.58% 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.
The fund notified shareholders in January 1997 of the applicable percentage
for use in preparing 1996 income tax returns.
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Fred L. Henning, Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
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 *
ADVISORY BOARD
William O. McCoy
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
* INDEPENDENT TRUSTEES
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
Fidelity Investments Institutional Operations Company
Boston, MA
CUSTODIAN
Bank of New York
New York, NY
FOCUS FUNDS
Fidelity Advisor Consumer
Industries Fund
Fidelity Advisor Cyclical
Industries Fund
Fidelity Advisor Financial
Services Fund
Fidelity Advisor Health Care Fund
Fidelity Advisor Natural
Resources Fund
Fidelity Advisor Technology Fund
Fidelity Advisor Utilities Growth Fund
GROWTH FUNDS
Fidelity Advisor TechnoQuant(trademark)
Growth Fund
Fidelity Advisor Overseas Fund
Fidelity Advisor Mid Cap Fund
Fidelity Advisor Equity Growth Fund
Fidelity Advisor Growth
Opportunities Fund
Fidelity Advisor Strategic
Opportunities Fund
Fidelity Advisor Large Cap Fund
GROWTH AND INCOME FUNDS
Fidelity Advisor Growth & Income Fund
Fidelity Advisor Equity Income Fund
Fidelity Advisor Balanced Fund
TAXABLE INCOME FUNDS
Fidelity Advisor Emerging Markets Income Fund
Fidelity Advisor High Yield Fund
Fidelity Advisor Strategic Income Fund
Fidelity Advisor Government Investment Fund
Fidelity Advisor Intermediate Bond Fund
Fidelity Advisor Short Fixed-Income Fund
MUNICIPAL FUNDS
Fidelity Advisor High Income
Municipal Fund
Fidelity Advisor Municipal Bond Fund
Fidelity Advisor Intermediate Municipal Income Fund
Fidelity Advisor Short-Intermediate Municipal Income Fund
STATE MUNICIPAL FUNDS
Fidelity Advisor California Municipal Income Fund
Fidelity Advisor New York Municipal Income Fund
MONEY MARKET FUNDS
Daily Money Fund: Money Market Portfolio
Daily Money Fund: U.S. Treasury Portfolio
Daily Tax-Exempt Money Fund

(REGISTERED TRADEMARK)

(2_FIDELITY_LOGOS)FIDELITY ADVISOR
(registered trademark)

STRATEGIC INCOME
FUND - CLASS A, CLASS T (FORMERLY
CLASS A), AND CLASS B
ANNUAL REPORT
DECEMBER 31, 1996
CONTENTS

PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.

PERFORMANCE 4 How the fund has done over time.

FUND TALK 15 The managers' review of fund
performance, strategy and outlook.

INVESTMENT CHANGES 19 A summary of major shifts in the
fund's investments over the past six
months.

INVESTMENTS 20 A complete list of the fund's
investments with their market
values.

FINANCIAL STATEMENTS 39 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.

NOTES 46 Notes to the financial statements.

REPORT OF INDEPENDENT 53 The auditors' opinion.
ACCOUNTANTS

DISTRIBUTIONS 54

(PHOTO_OF_EDWARD_C_JOHNSON_3D)DEAR SHAREHOLDER:
Although stocks managed to post solid returns throughout 1996, signs of
strength in the economy have led to inflation fears, causing some
uncertainty in both the stock and bond markets. In 1995, both stock and
bond markets posted strong results, while the year before, stocks posted
below-average returns and bonds had one of the worst years in history.
These market ups and downs are a normal part of investing, and there are
some basic principles that are helpful for investors to remember in
different types of markets.
Keeping in mind that the effects of interest rate changes on your bond
investments will only be "paper" gains or losses unless you sell your
shares, staying in your bond fund may be appropriate if your investment
horizon is at least a year or more. The longer your investing time frame,
the more likely it is that you will retain your principal investment
through both up and down markets. For example, a 10-year time frame, such
as saving for a college education, enables you to weather these ups and
downs in a long-term fund, which has higher potential returns.
An intermediate-length fund could be appropriate if your investment horizon
is two to four years, and a short-term bond fund could be the right choice
if you need your money in one or two years.
If your time horizon is less than a year, you might want to consider moving
some of your bond investment into a money market fund, which seeks income
and a stable share price by investing in high-quality, short-term
investments. 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 or guaranteed by any agency of the U.S. government.
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. A periodic investment plan will not, of course,
assure a profit or protect against a loss.
If you have any questions, please call us at 1-800-544-8888. We stand ready
to provide the information you need to make the investments that are right
for you.
Best regards,
Edward C. Johnson 3d
ADVISOR STRATEGIC INCOME FUND - CLASS A
PERFORMANCE: THE BOTTOM LINE(dagger)

Advisor Strategic Income - Class A 12.81% 37.89%

Advisor Strategic Income - Class A 8.01% 32.03%
(incl. max. 4.25% sales charge)

Merrill Lynch High Yield Master Index 11.06% 33.67%

Fidelity Strategic Income Composite 11.94% n/a
Benchmark

Multi-Sector Income Funds Average 11.74% n/a

CUMULATIVE TOTAL RETURNS show Class A's performance in percentage terms
over a set period - in this case, one year or since the fund started on
October 31, 1994. For example, if you had invested $1,000 in a fund that
had a 5% return over the past year, the value of your investment would be
$1,050. You can compare Class A's returns to those of the Merrill Lynch
High Yield Master Index - a market capitalization weighted index of all
domestic and yankee high-yield bonds. Issues included in the index have
maturities of at least one year and have a credit rating lower than
BBB-/Baa3, but are not in default. You can also compare Class A's returns
to those of the Fidelity Strategic Income Composite Benchmark - a broad
measure of the world fixed income markets. To measure how Class A's
performance stacked up against its peers, you can compare it to the
multi-sector income funds average, which reflects the performance of 51
mutual funds with similar objectives tracked by Lipper Analytical Services,
Inc. over the past one year. These benchmarks reflect reinvestment of
dividends and capital gains, if any, and exclude the effects of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1996 PAST 1 LIFE OF
YEAR FUND

Advisor Strategic Income - Class A 12.81% 15.93%

Advisor Strategic Income - Class A 8.01% 13.64%
(incl. max. 4.25% sales charge)

Merrill Lynch High Yield Master Index 11.06% 14.29%

Fidelity Strategic Income Composite 11.94% n/a
Benchmark

Multi-Sector Income Funds Average 11.74% n/a

$10,000 OVER LIFE OF FUND(dagger): Let's say hypothetically that $10,000
was invested in Fidelity Advisor Strategic Income Fund - Class A on October
31, 1994, when the fund started, and the current maximum 4.25% sales charge
was paid. As the chart shows, by December 31, 1996, the value of the
investment would have grown to $13,203 - a 32.03% increase on the initial
investment. For comparison, look at how the Merrill Lynch High Yield Master
Index did over the same period. With dividends and capital gains, if any,
reinvested, the same $10,000 investment would have grown to $13,351 - a
33.51% increase. You also can look at how the Fidelity Strategic Income
Composite Benchmark, a hypothetical combination of unmanaged indices that
is more representative of the fund's investable universe, did over the same
period. This index combines returns from the J.P. Morgan Emerging Markets
Bond Index Plus (15%), Merrill Lynch High Yield Master Index (40%), Salomon
Brothers Mortgage Index (15%), Salomon Brothers Treasury 1-10 Year Index
(15%), and Salomon Brothers Non-U.S. Dollar World Government Bond Index
(15%). With distributions, if any, reinvested, a $10,000 investment in the
index would have grown to $13,261 - a 32.61% increase.

1996 1995 1994

Dividend return 7.65% 8.65% 0.97%

Capital appreciation return 5.16% 13.37% -0.80%

Total return 12.81% 22.02% 0.17%
</TABLE>
TOTAL RETURN COMPONENTS include both dividend returns and capital
appreciation returns. A dividend return reflects the actual dividends paid
by the class. A capital appreciation return reflects both the amount paid
by the class to shareholders as capital gain distributions and changes in
the class' share price. Both returns assume the dividends or gains are
reinvested and exclude the effect of the sales charge.
DIVIDENDS AND YIELD
PERIODS ENDED DECEMBER 31, 1996 PAST LIFE OF
MONTH CLASS

Dividends per share 9.47(cents) 27.97(cents)

Annualized dividend rate 9.76% 7.55%

30-day annualized yield n/a -

DIVIDENDS per share show the income paid by the class for a set period. If
you annualize this number, based on an average share price of $11.42 over
the past month, and $11.36 over the life of the class, you can compare the
class' income over these two periods. The 30-day annualized YIELD is a
standard formula for all bond funds based on the yields of the bonds in the
fund, averaged over the past 30 days. This figure shows you the yield
characteristics of the fund's investments at the end of the period. It also
helps you to compare funds from different companies on an equal basis. The
offering share price used in the calculation of the yield includes the
effect of Class A's maximum 4.25% sales charge. Yield information will be
reported once the class has a longer, more stable operating history.
(dagger) THE DATA USED TO CREATE THE MERRILL LYNCH HIGH YIELD MASTER INDEX
AND THE FIDELITY STRATEGIC INCOME COMPOSITE BENCHMARK ON THE LINE GRAPH, ON
PAGE 5, IS FROM THE CLOSE OF BUSINESS ON OCTOBER 31, 1994. THE TOTAL RETURN
OF THE MERRILL LYNCH HIGH YIELD MASTER INDEX FOR THE LIFE OF FUND
CALCULATIONS ON PAGE 4 IS FROM THE OPENING OF BUSINESS ON OCTOBER 31, 1994,
COMMENCEMENT OF OPERATIONS OF THE FUND. DATA FOR THE FIDELITY STRATEGIC
INCOME COMPOSITE BENCHMARK IS ONLY AVAILABLE AT THE CLOSE OF BUSINESS EACH
MONTH.
ADVISOR STRATEGIC INCOME FUND - CLASS T
PERFORMANCE: THE BOTTOM LINE(dagger)

Advisor Strategic Income - Class T 12.89% 37.99%

Advisor Strategic Income - Class T 8.93% 33.16%
(incl. max. 3.50% sales charge)

Merrill Lynch High Yield Master Index 11.06% 33.67%

Fidelity Strategic Income Composite 11.94% n/a
Benchmark

Multi-Sector Income Funds Average 11.74% n/a

CUMULATIVE TOTAL RETURNS show Class T's performance in percentage terms
over a set period - in this case, one year or since the fund started on
October 31, 1994. For example, if you had invested $1,000 in a fund that
had a 5% return over the past year, the value of your investment would be
$1,050. You can compare Class T's returns to those of the Merrill Lynch
High Yield Master Index - a market capitalization weighted index of all
domestic and yankee high-yield bonds. Issues included in the index have
maturities of at least one year and have a credit rating lower than
BBB-/Baa3, but are not in default. You can also compare Class T's returns
to those of the Fidelity Strategic Income Composite Benchmark - a broad
measure of the world fixed income markets. To measure how Class T's
performance stacked up against its peers, you can compare it to the
multi-sector income funds average, which reflects the performance of 51
mutual funds with similar objectives tracked by Lipper Analytical Services,
Inc. over the past one year. These benchmarks reflect reinvestment of
dividends and capital gains, if any, and exclude the effects of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1996 PAST 1 LIFE OF
YEAR FUND

Advisor Strategic Income - Class T 12.89% 15.97%

Advisor Strategic Income - Class T 8.93% 14.09%
(incl. max. 3.50% sales charge)

Merrill Lynch High Yield Master Index 11.06% 14.29%

Fidelity Strategic Income Composite 11.94% n/a
Benchmark

Multi-Sector Income Funds Average 11.74% n/a

1994/10/31 9650.00 10000.00
10000.00
1994/11/30 9698.40 9914.94
9921.26
1994/12/31 9666.83 10025.22
9887.56
1995/01/31 9774.68 10166.88
9962.57
1995/02/28 10005.55 10484.10
10125.61
1995/03/31 10150.73 10630.00
10301.07
1995/04/30 10531.53 10878.89
10634.09
1995/05/31 10927.88 11218.77
11037.19
1995/06/30 10983.77 11304.46
11135.32
1995/07/31 11072.01 11433.70
11192.91
1995/08/31 11089.52 11503.09
11198.60
1995/09/30 11286.98 11634.70
11390.44
1995/10/31 11418.00 11717.17
11444.44
1995/11/30 11545.52 11831.55
11595.55
1995/12/31 11795.90 12021.46
11847.24
1996/01/31 12059.74 12211.32
12046.81
1996/02/29 11962.09 12229.71
11927.06
1996/03/31 11923.53 12196.49
11944.14
1996/04/30 12038.38 12202.02
12025.48
1996/05/31 12122.02 12290.02
12090.46
1996/06/30 12224.89 12363.84
12234.53
1996/07/31 12298.60 12447.78
12369.42
1996/08/31 12441.38 12576.33
12504.03
1996/09/30 12830.13 12846.16
12784.11
1996/10/31 12997.13 12986.95
12956.74
1996/11/30 13251.26 13249.51
13230.23
1996/12/31 13315.91 13351.46
13261.40
IMATRL PRASUN SHR__CHT 19960731 19960814 160556 R00000000000123

$10,000 OVER LIFE OF FUND(dagger): Let's say hypothetically that $10,000
was invested in Fidelity Advisor Strategic Income Fund - Class T on October
31, 1994, when the fund started, and the current maximum 3.50% sales charge
was paid. As the chart shows, by December 31, 1996, the value of the
investment would have grown to $13,316 - a 33.16% increase on the initial
investment. For comparison, look at how the Merrill Lynch High Yield Master
Index did over the same period. With dividends and capital gains, if any,
reinvested, the same $10,000 investment would have grown to $13,351 - a
33.51% increase. You also can look at how the Fidelity Strategic Income
Composite Benchmark, a hypothetical combination of unmanaged indices that
is more representative of the fund's investable universe, did over the same
period. This index combines returns from the J.P. Morgan Emerging Markets
Bond Index Plus (15%), Merrill Lynch High Yield Master Index (40%), Salomon
Brothers Mortgage Index (15%), Salomon Brothers Treasury 1-10 Year Index
(15%), and Salomon Brothers Non-U.S. Dollar World Government Bond Index
(15%). With distributions, if any, reinvested, a $10,000 investment in the
index would have grown to $13,261 - a 32.61% increase.

1996 1995 1994

Dividend return 7.73% 8.65% 0.97%

Capital appreciation return 5.16% 13.37% -0.80%

Total return 12.89% 22.02% 0.17%
</TABLE>
TOTAL RETURN COMPONENTS include both dividend returns and capital
appreciation returns. A dividend return reflects the actual dividends paid
by the class. A capital appreciation return reflects both the amount paid
by the class to shareholders as capital gain distributions and changes in
the class' share price. Both returns assume the dividends or gains are
reinvested and exclude the effect of the sales charge.
DIVIDENDS AND YIELD
PERIODS ENDED DECEMBER 31, 1996 PAST PAST 6 PAST 1
MONTH MONTHS YEAR

Dividends per share 9.45(cents) 42.09(cents) 80.48(cents)

Annualized dividend rate 9.74% 7.43% 7.25%

30-day annualized yield 6.43% - -

DIVIDENDS per share show the income paid by the class for a set period. If
you annualize this number, based on an average share price of $11.42 over
the past month, $11.23 over the past six months, and $11.10 over the past
year, you can compare the class' income over these three periods. The
30-day annualized YIELD is a standard formula for all bond funds based on
the yields of the bonds in the fund, averaged over the past 30 days. This
figure shows you the yield characteristics of the fund's investments at the
end of the period. It also helps you to compare funds from different
companies on an equal basis. The offering share price used in the
calculation of the yield includes the effect of Class T's maximum 3.50%
sales charge.
(dagger) THE DATA USED TO CREATE THE MERRILL LYNCH HIGH YIELD MASTER INDEX
AND THE FIDELITY STRATEGIC INCOME COMPOSITE BENCHMARK ON THE LINE GRAPH, ON
PAGE 9, IS FROM THE CLOSE OF BUSINESS ON OCTOBER 31, 1994. THE TOTAL RETURN
OF THE MERRILL LYNCH HIGH YIELD MASTER INDEX FOR THE LIFE OF FUND
CALCULATIONS ON PAGES 7 AND 8 IS FROM THE OPENING OF BUSINESS ON OCTOBER
31, 1994, COMMENCEMENT OF OPERATIONS OF THE FUND. DATA FOR THE FIDELITY
STRATEGIC INCOME COMPOSITE BENCHMARK IS ONLY AVAILABLE AT THE CLOSE OF
BUSINESS EACH MONTH.
ADVISOR STRATEGIC INCOME FUND - CLASS B
PERFORMANCE: THE BOTTOM LINE(dagger)

Advisor Strategic Income - Class B 12.14% 36.00%

Advisor Strategic Income - Class B 7.14% 33.00%
(incl. contingent deferred sales charge) 1

Merrill Lynch High Yield Master Index 11.06% 33.67%

Fidelity Strategic Income Composite 11.94% n/a
Benchmark

Multi-Sector Income Funds Average 11.74% n/a

CUMULATIVE TOTAL RETURNS show Class B's performance in percentage terms
over a set period - in this case, one year or since the fund started on
October 31, 1994. For example, if you had invested $1,000 in a fund that
had a 5% return over the past year, the value of your investment would be
$1,050. You can compare Class B's returns to those of the Merrill Lynch
High Yield Master Index - a market capitalization weighted index of all
domestic and yankee high-yield bonds. Issues included in the index have
maturities of at least one year and have a credit rating lower than
BBB-/Baa3, but are not in default. You can also compare Class B's returns
to those of the Fidelity Strategic Income Composite Benchmark - a broad
measure of the world fixed income markets. To measure how Class B's
performance stacked up against its peers, you can compare it to the
multi-sector income funds average, which reflects the performance of 51
mutual funds with similar objectives tracked by Lipper Analytical Services,
Inc. over the past one year. These benchmarks reflect reinvestment of
dividends and capital gains, if any, and exclude the effects of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1996 PAST 1 LIFE OF
YEAR FUND

Advisor Strategic Income - Class B 12.14% 15.20%

Advisor Strategic Income - Class B 7.14% 14.02%
(incl. contingent deferred sales charge) 1

Merrill Lynch High Yield Master Index 11.06% 14.29%

Fidelity Strategic Income Composite 11.94% n/a
Benchmark

Multi-Sector Income Funds Average 11.74% n/a

1 HAD CLASS B'S CONTINGENT DEFERRED SALES CHARGE SCALE PRIOR TO JANUARY 2,
1997 BEEN REFLECTED, THE CUMULATIVE AND AVERAGE ANNUAL TOTAL RETURNS FOR
THE PAST ONE YEAR AND LIFE OF FUND WOULD HAVE BEEN 8.14% AND 8.14%, AND
33.00% AND 14.05%, RESPECTIVELY.
$10,000 OVER LIFE OF FUND
IMAHDR PRASUN SHR__CHT 19960731 19960814 160549 S00000000000001
FA Strat Inc CL B ML High Yield Master FI
Strategic Comp Index
00260 ML002 F0086

1994/10/31 10000.00 10000.00
10000.00
1994/11/30 10045.19 9914.94
9921.26
1994/12/31 9993.77 10025.22
9887.56
1995/01/31 10109.93 10166.88
9962.57
1995/02/28 10342.97 10484.10
10125.61
1995/03/31 10496.27 10630.00
10301.07
1995/04/30 10883.14 10878.89
10634.09
1995/05/31 11285.68 11218.77
11037.19
1995/06/30 11326.35 11304.46
11135.32
1995/07/31 11420.96 11433.70
11192.91
1995/08/31 11431.98 11503.09
11198.60
1995/09/30 11617.60 11634.70
11390.44
1995/10/31 11755.36 11717.17
11444.44
1995/11/30 11878.64 11831.55
11595.55
1995/12/31 12127.76 12021.46
11847.24
1996/01/31 12391.44 12211.32
12046.81
1996/02/29 12283.74 12229.71
11927.06
1996/03/31 12237.32 12196.49
11944.14
1996/04/30 12347.83 12202.02
12025.48
1996/05/31 12426.63 12290.02
12090.46
1996/06/30 12525.39 12363.84
12234.53
1996/07/31 12594.31 12447.78
12369.42
1996/08/31 12733.18 12576.33
12504.03
1996/09/30 13123.27 12846.16
12784.11
1996/10/31 13286.86 12986.95
12956.74
1996/11/30 13539.79 13249.51
13230.23
1996/12/31 13299.52 13351.46
13261.40
IMATRL PRASUN SHR__CHT 19960731 19960814 160556 R00000000000123

$10,000 OVER LIFE OF FUND(dagger): Let's say hypothetically that $10,000
was invested in Fidelity Advisor Strategic Income Fund - Class B on October
31, 1994, when the fund started, and paid the applicable contingent
deferred sales charge upon redemption at the end of the period. As the
chart shows, by December 31, 1996, the value of the investment would have
grown to $13,300 - an 33.00% increase on the initial investment. For
comparison, look at how the Merrill Lynch High Yield Master Index did over
the same period. With dividends reinvested, the same $10,000 investment
would have grown to $13,351 - a 33.51% increase. You also can look at how
the Fidelity Strategic Income Composite Benchmark, a hypothetical
combination of unmanaged indices that is more representative of the fund's
investable universe, did over the same period. This index combines returns
from the J.P. Morgan Emerging Markets Bond Index Plus (15%), Merrill Lynch
High Yield Master Index (40%), Salomon Brothers Mortgage Index (15%),
Salomon Brothers Treasury 1-10 Year Index (15%), and Salomon Brothers
Non-U.S. Dollar World Government Bond Index (15%). With distributions, if
any, reinvested, a $10,000 investment in the index would have grown to
$13,261 - a 32.61% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. Bond prices, for
example, generally move in the
opposite direction of interest
rates. In turn, the share price,
return, and yield of a fund that
invests in bonds will vary. That
means if you sell your shares
during a market downturn, you
might lose money. But if you
can ride out the market's ups
and downs, you may have a
gain. Investing in foreign
markets means assuming
greater risks than investing in
the United States.
(checkmark)
<TABLE>
<CAPTION>
<S> <C> <C>
TOTAL RETURN COMPONENTS
YEARS ENDED DECEMBER OCTOBER 31,
31, 1994
(COMMENCEMEN
T
OF OPERATIONS)
TO
DECEMBER 31,

1996 1995 1994

Dividend return 7.00% 7.78% 0.84%

Capital appreciation return 5.14% 13.57% -0.90%

Total return 12.14% 21.35% -0.06%
</TABLE>
TOTAL RETURN COMPONENTS dividend includes both returns and capital
appreciation returns are both part of a class' total return. A dividend
return reflects the actual dividends paid by the class. A capital
appreciation return reflects both the amount paid by the class to
shareholders as capital gain distributions and changes in the class' share
price. Both returns assume the dividends or gains are reinvested and
exclude the effect of sales charge.
DIVIDENDS AND YIELD
PERIODS ENDED DECEMBER 31, 1996 PAST PAST 6 PAST 1
MONTH MONTHS YEAR

Dividends per share 8.92(cents) 38.54(cents) 73.14(cents)

Annualized dividend rate 9.19% 6.80% 6.58%

30-day annualized yield 6.06% - -

DIVIDENDS per share show the income paid by the class for a set period. If
you annualize this number based on an average share price of $11.43 over
the past month, $11.24 over the past six months, and $11.11 over the past
year, you can compare the class' income over these three periods. The
30-day annualized YIELD is a standard formula for all bond funds based on
the yields of the bonds in the fund, averaged over the past 30 days. This
figure shows you the yield characteristics of the fund's investments at the
end of the period. It also helps you to compare funds from different
companies on an equal basis. The offering share price used in the
calculation of the yield excludes the effect of Class B's contingent
deferred sales charge.
(dagger) THE DATA USED TO CREATE THE MERRILL LYNCH HIGH YIELD MASTER INDEX
AND THE FIDELITY STRATEGIC INCOME COMPOSITE BENCHMARK ON THE LINE GRAPH, ON
PAGE 13, IS FROM THE CLOSE OF BUSINESS ON OCTOBER 31, 1994. THE TOTAL
RETURN OF THE MERRILL LYNCH HIGH YIELD MASTER INDEX FOR THE LIFE OF FUND
CALCULATIONS ON PAGE 12 IS FROM THE OPENING OF BUSINESS ON OCTOBER 31,
1994, COMMENCEMENT OF OPERATIONS OF THE FUND. DATA FOR THE FIDELITY
STRATEGIC INCOME COMPOSITE BENCHMARK IS ONLY AVAILABLE AT THE CLOSE OF
BUSINESS EACH MONTH.
FUND TALK: THE MANAGERS' OVERVIEW

MARKET RECAP
While low inflation and moderate
growth helped provide a positive
backdrop for most bond markets in
1996, performance in overseas bond
markets was mixed. The Salomon
Brothers World Government Bond
Index - a measure of government
bond market performance in
developed nations - returned
7.11% for the 12 months ended
December 31, 1996. In Europe,
focus centered on the continuing
progress toward the European
Monetary Union (EMU). Attractive
opportunities arose as countries
worked to meet the requirements
for joining the EMU. Many
European nations - especially Italy,
Spain and Sweden - boasted
strong returns. However, Germany
and Japan - two of the larger
components of the Salomon
Brothers World Government Bond
Index - experienced currency
problems that hurt returns. When
Japan's trade surplus diminished
during the year, assets flowed out of
the country, with investors seeking
higher-yielding opportunities
elsewhere. In stark contrast to the
developed world, the often-volatile
emerging debt markets enjoyed a
particularly strong year, helped by
inflows of foreign capital, low
interest rates and the
implementation of country-specific
reforms - especially in Latin
America. The J.P. Morgan
Emerging Markets Bond Index - of
which Latin America is a large
component - posted a return of
34.16% during the period. In the
U.S., uncertainty over the direction
of the economy led to mixed bond
market performance. The Lehman
Brothers Aggregate Bond Index
returned 3.63% in 1996.
The following is an interview with John Carlson (top left), lead Portfolio
Manager of Fidelity Advisor Strategic Income Fund and manager of the fund's
investments in emerging markets, with additional comments from co-managers
Kevin Grant (bottom left) on U.S. government securities, Margaret Eagle
(top right) on high-yield securities and Jonathan Kelly (bottom right) on
foreign developed-market securities.
Q. JOHN, HOW DID THE FUND PERFORM?
J.C. For the 12-month period that ended December 31, 1996, the fund's Class
A shares returned 12.81%, while its Class T and Class B shares provided
returns of 12.89% and 12.14%, respectively. This compared favorably to the
multi-sector income funds average, which returned 11.74% over the same
period, according to Lipper Analytical Services. The Merrill Lynch High
Yield Master Index had a 12-month return of 11.06% as of December 31.
Q. WHAT WERE SOME OF THE IMPORTANT THEMES IN EMERGING MARKET DEBT OVER THE
PAST YEAR?
J.C. There were really three key themes that helped drive asset prices in
emerging market debt in the last year. First was the return of economic
growth to Latin America, particularly Mexico and Argentina. Our sovereign
risk models have found economic growth to be the most important factor in a
country's creditworthiness. The second recurring theme was sharply rising
crude oil prices which improved the financial position of the oil exporting
countries. Of the major oil exporters, Ecuador, Venezuela and Nigeria all
outperformed, while only Mexico lagged. The significance of rising oil
prices goes beyond the simple revenue windfall: Venezuela and Ecuador are
using the cash to help them tackle significant structural economic reforms.
The third major theme was the dramatic outperformance of non-restructured
loans versus Brady securities.
Q. KEVIN, HOW WOULD YOU CHARACTERIZE THE INVESTING CLIMATE IN THE U.S. OVER
THE PAST YEAR?
K.G. The direction of the market shifted quite a bit over the past 12
months. Sentiment in the first half of the period centered around the
stronger-than-expected economy, a development reflected in the release of
strong employment statistics. The market slacked off some, but as it became
apparent that fears of an overheated economy were unwarranted, the markets
rallied. In addition, the announcement by the Federal Reserve Board in the
fall that it deemed it unnecessary to raise rates was encouraging. In
December, however, Fed chairman Alan Greenspan cautioned against the
general feeling of euphoria that had enveloped the financial markets and
bonds gave back some of their gains. Mortgage-backed securities generated
healthy returns during the period, as higher rates meant diminished
prepayment risk.
Q. TURNING TO YOU MARGARET, CAN YOU PAINT THE PICTURE FOR THE HIGH-YIELD
MARKET?
M.E. Relative to the overall bond market, 1996 was a good year for the
high-yield market. This strong performance can be attributed to two primary
factors: strong demand and low default rates. We saw high amounts of new
issuance in this sector, but the insatiable demand for these securities
kept pace. The sources for this demand included insurance companies,
pension funds and mutual funds, to name a few. Investors began to realize
that over the longer term, high-yield debt has been an attractive place to
be. The reason for low default rates is a bit harder to pinpoint. One
thought is that issuers, particularly in the early 1990s, had to come to
market with higher-quality issues, so they have not been as vulnerable to
business risk as time has progressed. I think the benign economic
conditions we've seen have also helped default rates. In terms of what may
happen going forward, I think we may see default rates pick up to more
average levels of about 3%. I believe the economy will continue to grow at
a moderate speed, but I don't believe we'll see the same level of economic
strength we saw in the fourth quarter of 1996. Slow growth and low
inflation are generally favorable to high-yield bonds.
Q. WHAT WAS THE STORY WITH THE GLOBAL FIXED-INCOME MARKETS, JONATHAN?
J.K. While interest rates rose in the U.S. during the past 12 months, they
were generally falling throughout the developed world. The principal
drivers behind the declining rates were initially tight monetary policy and
sluggish economies in much of the G7 - the seven largest industrialized
countries in the world - notably Japan and Germany. This led to
appreciating bond prices around the world. However, while U.S. interest
rates were rising, the U.S. dollar was also rising against the major
international currencies, and this reduced the returns of foreign bonds to
dollar-based investors. In Japan, the largest country in the benchmark, the
yen was particularly weak against the dollar and the single largest
detractor from performance. On the other hand, the high-yielding countries
in Europe - Italy, Spain, and Sweden - all delivered excellent returns in
U.S. dollars. The fund also benefited from exposure to U.K. and Australian
bonds.
Q. TURNING BACK TO YOU, JOHN, DID ANY OTHER SPECIFIC DEVELOPMENTS TAKE
PLACE IN THE EMERGING DEBT MARKETS?
J.C. Three events deserve mention. First, Moody's re-rated all Brady bonds
- - which had been rated just below the issuing country's Eurobond external
debt - up to the level of the sovereign issuer. This took place early in
the year. Second, the fund realized excellent performance from its
positions in pre-Brady bonds, most notably those of Russia and Panama. The
market-friendly election of Boris Yeltsin, the perception that economic
reform was progressing and an increased sense of stability combined to make
Russian loans attractive. My overweighting - relative to the benchmark - in
Panama worked to the fund's benefit as low inflation and a balanced budget,
among other factors, made for good performance. The fund also benefited
from its exposure to the non-restructured loans of Vietnam and the Ivory
Coast. Lastly, both Mexico and the Philippines initiated debt buybacks,
which was viewed positively by the market.
Q. WHAT'S YOUR OUTLOOK, JOHN?
J.C. I'm fairly optimistic. At present, the forces which have driven this
bull market remain in place; economic growth is picking up across our
universe of countries, and most countries enjoy rising levels of liquidity
driven by capital inflows and stronger oil prices. The most important issue
to monitor is continued progress on economic reform. It is crucial for
these countries to keep building on the momentum of the last 18 months. Two
examples of this are labor reform in Argentina and the prospects for a
currency board in Bulgaria. Also important is international liquidity and
the global appetite for risk. Emerging markets could suffer if G7 interest
rates went up sharply or in the event of a global recession.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGERS' VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.

TOP FIVE HOLDINGS AS OF DECEMBER 31, 1996
(BY ISSUER, EXCLUDING CASH EQUIVALENTS) % OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO

U.S. Government 28.4 28.3

Argentinian Republic 2.3 2.2

Brazilian Federative Republic 2.1 3.1

Time Warner, Inc., Series M, 2.1 0.0
10 1/4% pay-in-kind

Ecuador Republic 2.1 1.2

TOP FIVE MARKET SECTORS AS OF DECEMBER 31, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE MARKET
SECTORS
6 MONTHS AGO

Media & Leisure 9.9 11.0

Finance 5.5 3.2

Utilities 4.6 6.0

Retail & Wholesale 3.6 3.6

Nondurables 3.4 3.3

QUALITY DIVERSIFICATION AS OF DECEMBER 31, 1996
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO

Aaa, Aa, A 42.5 41.7

Baa 0.7 1.0

Ba 8.9 6.0

B 27.8 28.7

Caa, Ca, C 3.3 3.0

Nonrated 6.8 10.4

Showing Percentage of Total Value of Investment in Securities

STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
<S> <C> <C>
DECEMBER 31, 1996

ASSETS $ 143,280,762
Investment in securities, at value (including repurchase agreements of
$5,741,000) (cost $138,777,868) - See accompanying schedule

Cash 570,105

Receivable for investments sold 278,249
Regular Delivery

Delayed Delivery 1,264,219

Dividends receivable 69,755

Interest receivable 2,234,908

Other receivables 2,304

Prepaid expenses 13,415

TOTAL ASSETS 147,713,717

LIABILITIES $ 1,662,671
Payable for investments purchased
Regular delivery

Delayed delivery 1,936,256

Distributions payable 489,369

Accrued management fee 68,091

Distribution fees payable 47,909

Other payables and accrued expenses 85,899

TOTAL LIABILITIES 4,290,195

NET ASSETS $ 143,423,522

Net Assets consist of: $ 137,538,381
Paid in capital

Undistributed net investment income 39,713

Accumulated undistributed net realized gain (loss) on investments and 1,345,817
foreign currency transactions

Net unrealized appreciation (depreciation) on investments and assets 4,499,611
and liabilities in foreign currencies

NET ASSETS $ 143,423,522

CALCULATION OF MAXIMUM OFFERING PRICE $11.25
CLASS A:
NET ASSET VALUE and redemption price per share ($587,211 (divided by) 52,191
shares)

Maximum offering price per share (100/95.75 of $11.25) $11.75

CLASS T: $11.25
NET ASSET VALUE and redemption price per share
($99,327,105 (divided by) 8,830,996 shares)

Maximum offering price per share (100/96.50 of $11.25) $11.66

CLASS B: $11.26
NET ASSET VALUE and offering price per share
($37,402,546 (divided by) 3,321,267 shares) A

INSTITUTIONAL CLASS: $11.30
NET ASSET VALUE, offering price and redemption price
per share ($6,106,660 (divided by) 540,504 shares)

</TABLE>

A 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 DECEMBER 31, 1996

INVESTMENT INCOME $ 425,445
Dividends

Interest 8,820,172

TOTAL INCOME 9,245,617

EXPENSES

Management fee $ 641,715

Transfer agent fees 604
Class A

Class T 161,684

Class B 60,867

Institutional Class 5,321

Distribution fees 152
Class A

Class T 185,607

Class B 273,748

Accounting fees and expenses 60,655

Non-interested trustees' compensation 591

Custodian fees and expenses 33,669

Registration fees 11,794
Class A

Class T 29,656

Class B 16,575

Institutional Class 21,834

Audit 35,434

Legal 1,217

Miscellaneous 4,354

Total expenses before reductions 1,545,477

Expense reductions (31,010) 1,514,467

NET INVESTMENT INCOME 7,731,150

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

Investment securities 4,370,186

Foreign currency transactions (21,188) 4,348,998

Change in net unrealized appreciation (depreciation) on:

Investment securities 1,501,143

Assets and liabilities in foreign currencies (3,172) 1,497,971

NET GAIN (LOSS) 5,846,969

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM $ 13,578,119
OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1996 1995

INCREASE (DECREASE) IN NET ASSETS

Operations $ 7,731,150 $ 3,238,777
Net investment income

Net realized gain (loss) 4,348,998 2,521,810

Change in net unrealized appreciation (depreciation) 1,497,971 3,002,460

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM 13,578,119 8,763,047
OPERATIONS

Distributions to shareholders (8,336) -
From net investment income
Class A

Class T (5,439,021) (2,143,447)

Class B (2,018,483) (1,275,191)

Institutional Class (235,161) (3,950)

From net realized gain (11,477) -
Class A

Class T (2,365,241) (1,060,007)

Class B (918,814) (539,517)

Institutional Class (126,985) (2,175)

TOTAL DISTRIBUTIONS (11,123,518) (5,024,287)

Share transactions - net increase (decrease) 61,581,370 55,582,973

TOTAL INCREASE (DECREASE) IN NET ASSETS 64,035,971 59,321,733

NET ASSETS

Beginning of period 79,387,551 20,065,818

End of period (including undistributed net investment income $ 143,423,522 $ 79,387,551
of $39,713 and $33,845, respectively)

</TABLE>

FINANCIAL HIGHLIGHTS - CLASS A
YEAR ENDED
DECEMBER 31,

1996 E

SELECTED PER-SHARE DATA

Net asset value, beginning of period $ 11.010

Income from Investment Operations

Net investment income .267 D

Net realized and unrealized gain (loss) .493

Total from investment operations .760

Less Distributions

From net investment income (.280)

From net realized gain (.240)

Total distributions (.520)

Net asset value, end of period $ 11.250

TOTAL RETURN B, C 6.95%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted) $ 587

Ratio of expenses to average net assets 1.25% A
, F

Ratio of net investment income to average net assets 7.32% A

Portfolio turnover rate 119%

1996 1995 1994 E

<TABLE>
<CAPTION>
<S> <C> <C> <C>
SELECTED PER-SHARE DATA

Net asset value, beginning of period $ 11.000 $ 9.920 $ 10.000

Income from Investment Operations

Net investment income .813 D .885 .064 D

Net realized and unrealized gain (loss) .542 1.231 (.046)

Total from investment operations 1.355 2.116 .018

Less Distributions

From net investment income (.805) (.806) (.098)

From net realized gain (.300) (.230) -

Total distributions (1.105) (1.036) (.098)

Net asset value, end of period $ 11.250 $ 11.000 $ 9.920

TOTAL RETURN B, C 12.89% 22.02% .17%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted) $ 99,327 $ 52,626 $ 10,687

Ratio of expenses to average net assets 1.23% 1.35% F 1.35% A,
F

Ratio of expenses to average net assets after 1.22% 1.35% 1.35% A
expense reductions G

Ratio of net investment income to average net assets 7.34% 7.28% 5.80% A

Portfolio turnover rate 119% 193% 104% A

</TABLE>

1996 1995 1994 E

<TABLE>
<CAPTION>
<S> <C> <C> <C>
SELECTED PER-SHARE DATA

Net asset value, beginning of period $ 11.010 $ 9.910 $ 10.000

Income from Investment Operations

Net investment income .743 D .820 .072 D

Net realized and unrealized gain (loss) .538 1.237 (.078)

Total from investment operations 1.281 2.057 (.006)

Less Distributions

From net investment income (.731) (.727) (.084)

From net realized gain (.300) (.230) -

Total distributions (1.031) (.957) (.084)

Net asset value, end of period $ 11.260 $ 11.010 $ 9.910

TOTAL RETURN B, C 12.14% 21.35% (.06)%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted) $ 37,403 $ 26,654 $ 9,379

Ratio of expenses to average net assets 1.88% 2.10% F 2.10% A,
F

Ratio of expenses to average net assets after 1.87% 2.10% 2.10% A
expense reductions G

Ratio of net investment income to average net assets 6.69% 6.53% 5.06% A

Portfolio turnover rate 119% 193% 104% A

</TABLE>

A ANNUALIZED
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS).
A TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
A NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
A FOR THE PERIOD OCTOBER 31, 1994 (COMMENCEMENT OF SALE OF CLASS B SHARES)
TO DECEMBER 31, 1994.
A FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE
BEEN HIGHER.
A FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES (SEE NOTE 5 OF
NOTES TO FINANCIAL STATEMENTS).
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
YEARS ENDED DECEMBER
31,

1996 1995 E

SELECTED PER-SHARE DATA

Net asset value, beginning of period $ 11.030 $ 10.890

Income from Investment Operations

Net investment income .826 D .456

Net realized and unrealized gain (loss) .548 .340

Total from investment operations 1.374 .796

Less Distributions

From net investment income (.804) (.426)

From net realized gain (.300) (.230)

Total distributions (1.104) (.656)

Net asset value, end of period $ 11.300 $ 11.030

TOTAL RETURN B, C 13.04% 7.47%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted) $ 6,107 $ 107

Ratio of expenses to average net assets 1.10% F 1.10% A,
F

Ratio of net investment income to average net assets 7.47% 7.53% A

Portfolio turnover rate 119% 193%

A ANNUALIZED
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE5 OF NOTES TO FINANCIAL
STATEMENTS).
A TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
A NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
A FOR THE PERIOD JULY 3, 1995 (COMMENCEMENT OF SALE OF INSTITUTIONAL CLASS
SHARES) TO DECEMBER 31, 1995.
A FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE
BEEN HIGHER.
NOTES TO FINANCIAL STATEMENTS
For the period ended December 31, 1996

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SHARES DOLLARS

YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,

1996 A 1995 B 1996 A 1995 B

CLASS A 50,970 - $ 576,976 $ -
Shares sold

Reinvestment of distributions 1,518 - 17,135 -

Shares redeemed (297) - (3,402) -

Net increase (decrease) 52,191 - $ 590,709 $ -

CLASS T 5,716,371 4,244,040 $ 63,555,043 $ 45,511,133
Shares sold

Reinvestment of distributions 576,193 252,211 6,422,573 2,745,208

Shares redeemed (2,244,243) (791,295) (24,923,904) (8,398,421)

Net increase (decrease) 4,048,321 3,704,956 $ 45,053,712 $ 39,857,920

CLASS B 1,224,871 1,562,341 $ 13,679,656 $ 16,458,839
Shares sold

Reinvestment of distributions 224,151 147,710 2,516,519 1,605,499

Shares redeemed (548,526) (235,345) (6,111,458) (2,445,410)

Net increase (decrease) 900,496 1,474,706 $ 10,084,717 $ 15,618,928

INSTITUTIONAL CLASS 525,446 9,183 $ 5,792,940 $ 100,000
Shares sold

Reinvestment of distributions 31,439 557 353,974 6,125

Shares redeemed (26,121) - (294,682) -

Net increase (decrease) 530,764 9,740 $ 5,852,232 $ 106,125

</TABLE>

The Board of Trustees of Fidelity Advisor Strategic Income Fund voted to
pay to shareholders of record at the opening of business on record date,
the following distributions derived from capital gains realized from sales
of portfolio securities:
PAY DATE RECORD DATE CAPITAL GAINS
Class A 2/10/97 2/7/97 $.06
Class T 2/10/97 2/7/97 $.06
Class B 2/10/97 2/7/97 $.06
A total of 8.58% 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.
The fund notified shareholders in January 1997 of the applicable percentage
for use in preparing 1996 income tax returns.
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Fred L. Henning, Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
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 *
ADVISORY BOARD
William O. McCoy
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
* INDEPENDENT TRUSTEES
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
Fidelity Investments Institutional Operations Company
Boston, MA - Class A & Class B
State Street Bank and Trust Company
Boston, MA - Class T
CUSTODIAN
Bank of New York
New York, NY
FOCUS FUNDS
Fidelity Advisor Consumer
Industries Fund
Fidelity Advisor Cyclical
Industries Fund
Fidelity Advisor Financial
Services Fund
Fidelity Advisor Health Care Fund
Fidelity Advisor Natural
Resources Fund
Fidelity Advisor Technology Fund
Fidelity Advisor Utilities Growth Fund
GROWTH FUNDS
Fidelity Advisor TechnoQuant(trademark)
Growth Fund
Fidelity Advisor Overseas Fund
Fidelity Advisor Mid Cap Fund
Fidelity Advisor Equity Growth Fund
Fidelity Advisor Growth
Opportunities Fund
Fidelity Advisor Strategic
Opportunities Fund
Fidelity Advisor Large Cap Fund
GROWTH AND INCOME FUNDS
Fidelity Advisor Growth & Income Fund
Fidelity Advisor Equity Income Fund
Fidelity Advisor Balanced Fund
TAXABLE INCOME FUNDS
Fidelity Advisor Emerging Markets Income Fund
Fidelity Advisor High Yield Fund
Fidelity Advisor Strategic Income Fund
Fidelity Advisor Government Investment Fund
Fidelity Advisor Intermediate Bond Fund
Fidelity Advisor Short Fixed-Income Fund
MUNICIPAL FUNDS
Fidelity Advisor High Income
Municipal Fund
Fidelity Advisor Municipal Bond Fund
Fidelity Advisor Intermediate Municipal Income Fund
Fidelity Advisor Short-Intermediate Municipal Income Fund
STATE MUNICIPAL FUNDS
Fidelity Advisor California Municipal Income Fund
Fidelity Advisor New York Municipal Income Fund
MONEY MARKET FUNDS
Daily Money Fund: Money Market Portfolio
Daily Money Fund: U.S. Treasury Portfolio
Daily Tax-Exempt Money Fund

(REGISTERED TRADEMARK)

(2_FIDELITY_LOGOS)FIDELITY ADVISOR

STRATEGIC OPPORTUNITIES
FUND - INSTITUTIONAL CLASS
ANNUAL REPORT
DECEMBER 31, 1996
CONTENTS

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

PERFORMANCE 4 How the fund has done over time.

FUND TALK 6 The manager's review of fund
performance, strategy and outlook.

INVESTMENT CHANGES 9 A summary of major shifts in the
fund's investments over the past six
months.

INVESTMENTS 10 A complete list of the fund's
investments with their market
values.

FINANCIAL STATEMENTS 18 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 36 The auditors' opinion.
ACCOUNTANTS

DISTRIBUTIONS 37

(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
Although stocks managed to post solid returns throughout 1996, signs of
strength in the economy have led to inflation fears, causing some
uncertainty in both the stock and bond markets. In 1995, both stock and
bond markets posted strong results, while the year before, stocks posted
below-average returns and bonds had one of the worst years in history.
These market ups and downs are a normal part of investing, and there are
some basic principles that are helpful for investors to remember in
different types of markets.
If you can leave your money invested over the long term, you can avoid the
results of the volatility that generally accompanies the stock market in
the short term. You also can help to manage some of the risks of investing
through diversification. 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 types of 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. 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 or guaranteed 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. A periodic investment plan will not, of course,
assure a profit or protect against a loss.
If you have any questions, please call us at 1-800-544-8888. We stand ready
to provide the information you need to make the investments that are right
for you.
Best regards,
Edward C. Johnson 3d
ADVISOR STRATEGIC OPPORTUNITIES FUND - INSTITUTIONAL CLASS
PERFORMANCE: THE BOTTOM LINE

Advisor Strategic Opportunities - 1.99% 78.38% 209.44%
Institutional Class

S&P 500(registered trademark) 22.96% 103.09% 314.99%

Capital Appreciation Funds Average 16.31% 88.71% 248.21%

CUMULATIVE TOTAL RETURNS show Institutional Class' performance in
percentage terms over a set period - in this case, one year, five years, or
10 years. For example, if you invested $1,000 in a fund that had a 5%
return over the past year, the value of your investment would be $1,050.
You can compare Institutional Class' returns to those of the Standard &
Poor's 500 Index - a widely recognized, unmanaged index of common stocks.
To measure how Institutional Class' performance stacked up against its
peers, you can compare it to the capital appreciation funds average, which
reflects the performance of 189 mutual funds with similar objectives
tracked by Lipper Analytical Services, Inc. over the past one year. These
benchmarks reflect the reinvestment of dividends and capital gains, if any,
and exclude the effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1996 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

Advisor Strategic Opportunities - 1.99% 12.27% 11.96%
Institutional Class

S&P 500 22.96% 15.22% 15.27%

Capital Appreciation Funds Average 16.31% 13.02% 12.48%

AVERAGE ANNUAL TOTAL RETURNS take the Institutional Class shares'
cumulative return and show you what would have happened if Institutional
Class shares had performed at a constant rate each year. (Note: Lipper
calculates average annual total returns by annualizing each fund's total
return, then taking an arithmetic average. This may produce a slightly
different figure than that obtained by averaging the cumulative total
returns and annualizing the result.)
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19961231 19970115 134115 S00000000000001
FA Strategic Opp -CL I SP Standard & Poor 500
00694 SP001
1986/12/31 10000.00 10000.00
1987/01/31 10820.48 11347.00
1987/02/28 10931.52 11795.21
1987/03/31 11252.31 12136.09
1987/04/30 10919.19 12028.08
1987/05/31 11024.06 12132.72
1987/06/30 11369.52 12745.42
1987/07/31 11826.03 13391.62
1987/08/31 12060.46 13891.12
1987/09/30 11758.17 13586.91
1987/10/31 9599.01 10660.29
1987/11/30 9161.01 9781.88
1987/12/31 9366.62 10526.28
1988/01/31 10100.41 10969.44
1988/02/29 10431.34 11480.61
1988/03/31 10265.87 11125.86
1988/04/30 10330.62 11249.36
1988/05/31 10510.47 11347.23
1988/06/30 11229.87 11868.07
1988/07/31 11165.13 11822.97
1988/08/31 10819.81 11420.99
1988/09/30 11172.32 11907.52
1988/10/31 11366.56 12238.55
1988/11/30 11438.50 12063.54
1988/12/31 11450.54 12274.65
1989/01/31 12099.11 13173.16
1989/02/28 12046.92 12845.14
1989/03/31 12300.39 13144.44
1989/04/30 12770.04 13826.63
1989/05/31 13358.96 14386.61
1989/06/30 13463.33 14304.61
1989/07/31 14387.72 15596.31
1989/08/31 14574.09 15902.00
1989/09/30 14574.09 15836.80
1989/10/31 14335.54 15469.39
1989/11/30 14723.19 15784.96
1989/12/31 15183.17 16163.80
1990/01/31 14179.14 15079.21
1990/02/28 14255.78 15273.73
1990/03/31 14255.78 15678.49
1990/04/30 13673.29 15286.53
1990/05/31 14117.82 16776.96
1990/06/30 14255.78 16662.88
1990/07/31 14294.10 16609.56
1990/08/31 13290.07 15108.05
1990/09/30 13190.43 14372.29
1990/10/31 13182.76 14310.49
1990/11/30 13765.26 15234.95
1990/12/31 14094.50 15660.00
1991/01/31 14549.94 16342.78
1991/02/28 15420.85 17511.29
1991/03/31 15908.25 17935.06
1991/04/30 16123.98 17978.11
1991/05/31 16699.27 18754.76
1991/06/30 16171.92 17895.79
1991/07/31 16659.32 18729.74
1991/08/31 17018.87 19173.63
1991/09/30 17082.79 18853.43
1991/10/31 16739.22 19106.07
1991/11/30 16331.72 18336.09
1991/12/31 17347.41 20433.74
1992/01/31 17375.55 20053.67
1992/02/29 17713.31 20314.37
1992/03/31 17262.97 19918.24
1992/04/30 17591.34 20503.84
1992/05/31 18163.65 20604.31
1992/06/30 18163.65 20297.30
1992/07/31 18726.57 21127.46
1992/08/31 18398.20 20694.35
1992/09/30 18323.14 20938.54
1992/10/31 18473.25 21011.83
1992/11/30 19261.34 21728.33
1992/12/31 19580.46 21995.59
1993/01/31 19950.48 22180.35
1993/02/28 20515.79 22482.00
1993/03/31 21153.06 22956.37
1993/04/30 20731.64 22400.83
1993/05/31 21214.73 23001.17
1993/06/30 21389.46 23067.88
1993/07/31 21841.72 22975.60
1993/08/31 23208.75 23846.38
1993/09/30 23147.08 23662.76
1993/10/31 23876.85 24152.58
1993/11/30 22869.56 23923.13
1993/12/31 23581.95 24212.60
1994/01/31 23786.03 25035.83
1994/02/28 22935.71 24357.36
1994/03/31 22051.39 23295.38
1994/04/30 22232.79 23593.56
1994/05/31 22278.14 23980.49
1994/06/30 22278.14 23392.97
1994/07/31 22811.00 24160.26
1994/08/31 22947.05 25150.83
1994/09/30 22629.60 24534.64
1994/10/31 22391.52 25086.67
1994/11/30 21699.93 24173.01
1994/12/31 21891.19 24531.50
1995/01/31 22862.83 25167.60
1995/02/28 23448.16 26148.38
1995/03/31 23670.58 26920.02
1995/04/30 24185.67 27712.81
1995/05/31 24817.82 28820.49
1995/06/30 26117.24 29489.99
1995/07/31 27018.65 30467.88
1995/08/31 27802.98 30544.36
1995/09/30 28774.62 31833.33
1995/10/31 28669.27 31719.68
1995/11/30 29453.60 33112.18
1995/12/31 30340.99 33749.92
1996/01/31 30365.46 34898.76
1996/02/29 29771.80 35222.28
1996/03/31 28776.51 35561.47
1996/04/30 29547.86 36085.64
1996/05/31 30418.75 37016.29
1996/06/30 30393.86 37157.32
1996/07/31 28316.18 35515.71
1996/08/31 29411.01 36264.74
1996/09/30 30431.19 38305.72
1996/10/31 29896.22 39362.19
1996/11/30 30966.16 42337.58
1996/12/31 30944.32 41498.87
IMATRL PRASUN SHR__CHT 19961231 19970115 134122 R00000000000123

$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was invested
in Fidelity Advisor Strategic Opportunities Fund - Institutional Class on
December 31, 1986. As the chart shows, by December 31, 1996, the value of
the investment would have grown to $30,944 - a 209.44% increase on the
initial investment. For comparison, look at how the S&P 500 did over the
same period. With dividends and capital gains, if any, reinvested, the same
$10,000 investment would have grown to $41,499 - a 314.99% 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)
FUND TALK: THE MANAGER'S OVERVIEW

MARKET RECAP
Paced by the robust performance
of blue chip stocks, the U.S. stock
market posted strong gains for the
year that ended December 31,
1996. The Standard & Poor's 500
Index returned 22.96% during the
period - well above its long-term
average of about 12%. The stock
market spent much of the past
year breaking price and trading
volume records. Solid corporate
earnings reports, large cash
inflows into mutual funds,
widespread optimism and a
generally favorable interest rate
environment propelled share
prices higher. Large capitalization
stocks thrived as investors sought
their lower volatility and higher
degree of liquidity over smaller
cap stocks in an environment
where it was sometimes difficult to
discern the health of the economy.
While short-term confusion over
the direction of interest rates
created a volatile backdrop in the
summer months, stocks rallied
again when the Federal Reserve
Board left short-term interest rates
unchanged and it appeared
inflation would not be an issue for
the remainder of 1996. The Dow
Jones Industrial Average closed
above 6500 for the first time in
November. Stock markets ended
the year on an up note after
experiencing some volatility
sparked by comments by Fed
Chairman Alan Greenspan in
December about the market's
exuberance.
An interview with Harris Leviton, Portfolio Manager of Fidelity Strategic
Opportunities Fund
Q. HOW DID THE FUND DO IN 1996, HARRIS?
A. For the 12 months that ended December 31, 1996, Institutional Class had
a total return of 1.99%. During the same period, the capital appreciation
funds average posted a return of 16.31%, according to Lipper Analytical
Services.
Q. WHAT LED TO THE FUND'S UNDERPERFORMANCE?
A. Before I took over the fund in March, it posted a significant negative
return at a time when, by contrast, overall stock market performance was
quite strong. During that period, the investments that helped the fund post
strong returns in 1995 - bonds and Baby Bells, or regional Bell operating
companies - detracted from the fund's performance. Rising interest rates at
that time hurt both types of investments. During the rest of 1996, I
continued the fund's focus on stocks of companies involved in special
situations. However, I also started to look for those securities I felt
were selling inexpensively. As a result, the fund emphasized more small-
and mid-capitalization stocks. Unfortunately, during the second half of the
year, the market favored a narrow range of stocks, mainly those of large
companies that make up an index such as the Standard & Poor's 500. I didn't
invest in those kinds of stocks because I found them to be too expensive
given the companies' business prospects. I found many small- and mid-cap
stocks to have much more compelling stories given their valuations and
projected growth rates, and have faith that this stock picking method will
work over time.
A. Before I took over the fund in March, the investments that helped the
fund post strong returns in 1995 - bonds and Baby Bells, or regional Bell
operating companies - detracted from its performance. Rising interest rates
at that time hurt both types of investments. During the remainder of 1996,
I continued to focus on stocks of companies involved in special situations.
However, I also started to look for those securities I felt were selling
inexpensively. As a result , the fund emphasized more small- and
mid-capitalization stocks. Unfortunately, during the second half of the
year the market favored a narrow range of stocks, mainly those of large
companies that make up such indexes as the Standard & Poor's 500. I didn't
invest in those kinds of stocks because I found them to be too expensive
given the companies' business prospects. I found many small- and mid-cap
stocks to have much more compelling stories given their valuations and
projected growth rates, and have faith that this stock picking method will
work over time.
A. Before I took over the fund in March, the investments that helped the
fund post strong returns in 1995 - bonds and Baby Bells, or regional Bell
operating companies - detracted from its performance. Rising interest rates
at that time hurt both types of investments. During the remainder of 1996,
I continued to focus on stocks of companies involved in special situations.
However, I also started to look for those securities I felt were selling
inexpensively. As a result, the fund emphasized more small- and
mid-capitalization stocks. Unfortunately, during the second half of the
year the market favored a narrow range of stocks, mainly those of large
companies that make up such indexes as the Standard & Poor's 500. I didn't
invest in those kinds of stocks because I found them to be too expensive
given the companies' business prospects. I found many small- and mid-cap
stocks to have much more compelling stories given their valuations and
projected growth rates, and have faith that this stock picking method will
work over time.
Q. YOU'VE DOUBLED THE FUND'S INVESTMENTS IN TECHNOLOGY FROM 5.9% SIX MONTHS
AGO TO 11.8% AT THE END OF THE PERIOD. WHAT MADE THIS SECTOR ATTRACTIVE?
A. In 1995, the technology sector soared to peak levels and was one of the
strongest performing sectors in the market. As a result of that euphoria,
many technology stocks became overvalued. They then declined through 1996
until they reached a point where I felt they were generally undervalued, so
I started to add some positions in the sector. Over the past two or three
months, investors overcame fears that business prospects in the sector were
fading, so valuations have rebounded to higher levels again. As a result,
I've actually pared back the fund's technology stake over the past few
months.
Q. WAS THERE A PARTICULAR TYPE OF TECHNOLOGY OR TECHNOLOGY-RELATED STOCK
THAT APPEALED TO YOU?
A. I've been very interested in the strategic opportunity offered by
companies involved in entertainment software, where there have been two
positive developments. First, a new video game product cycle based on a
higher-quality visual presentation is in its early stages. Manufacturers
have created formats that use more "bits" to improve the resolution of the
images on the screen. Up to now, investors have focused on the inevitable
decline of the 16-bit video game cycle. Over the past 12 to 18 months,
sales of games in this format have dropped off dramatically. At the same
time, sales of the next generation 32- and 64-bit systems have really taken
off. However, many of the companies are still reporting poor results that
sprang from the decline of the 16-bit systems. I believe some time in the
next six to 12 months video cartridge sales may spike upward as people
start to buy software in the new format. Nintendo and WMS Industries -
classified as media and leisure stocks - along with Eidos and Midway Games
are among the fund's investments in the entertainment software area. The
second factor driving entertainment software is that personal computers are
used increasingly as game machines. With semiconductor price declines and
rapidly changing technology, PCs have become a lot more powerful and
functional. And, with the market for PC-based gaming expanding, companies
such as Spectrum Holobyte, Maxis and Broderbund Software appeared to be
well-positioned for improvements in earnings.
Q. WHAT'S YOUR OUTLOOK AS WE ENTER 1997?
A. Common sense dictates that the market will slow down at some point.
While we've seen double-digit percentage increases in the prices of many
stocks, historic measures of a stock's value such as earnings, cash flow
and book value haven't kept pace overall. Stock market prices usually
reflect these measures of value much more efficiently. As a result, it
seems to me there has to be some sort of reconciliation or consolidation,
where stock prices fall to become more in line with those measures of
value. At the same time, I wouldn't be surprised to see some of the more
neglected parts of the market, such as undervalued small- and mid-caps with
strong cash flows, play catch up and outperform other areas.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.

FUND FACTS
GOAL: seeks capital
appreciation by investing
primarily in securities of
companies believed by
Fidelity to involve a "Special
Situation"
START DATE: December 31,
1983
SIZE: as of
December 31, 1996, more
than $722 million
MANAGER: Harris Leviton,
since March 1996; joined
Fidelity in 1986
(checkmark)
HARRIS LEVITON ON
OPPORTUNITIES IN THE INITIAL
PUBLIC OFFERING (IPO) MARKET:
"In the bull market we've
seen over the past few years,
the large number of IPOs has
made it more difficult to find
quality companies. I see a lot
of what I call `me too'
companies going public. That
is, one company is successful
as the first to go public in its
industry because of scarcity
or value, and then the next
thing you know, many of its
competitors go public. That
kind of dilution makes it
harder for companies in the
industry to raise capital, and
has made me more skeptical
toward companies newly
arrived in the IPO market.
"However, I'm finding many
opportunities in stocks of
small companies that went
public two or three years ago,
because they're not receiving
much coverage by analysts. A
company that goes public
gets at least a little bit of
coverage because its
underwriters write a report on
the company. But many of
these small- and mid-cap
stocks two or three years out
have few people calling or
covering them. On the other
hand, I have spent time
researching opportunities
among these companies and
have been able to find several
undervalued stocks with
attractive growth prospects.
This is just one way to play a
market that has been flooded
with a number of initial public
offerings."
INVESTMENT CHANGES

TOP TEN STOCKS AS OF DECEMBER 31, 1996
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE STOCKS
6 MONTHS AGO

American Bankers Insurance Group, 5.4 4.3
Inc.

Whole Foods Market, Inc. 4.7 4.8

Nintendo Co. Ltd. Ord. 4.3 4.3

Allstate Corp. 2.9 2.5

Intel Corp. 2.4 0.0

AFC Cable Systems, Inc. 2.3 1.5

Sepracor, Inc. 2.3 1.5

Libbey, Inc. 2.1 2.1

Spectrum Holobyte, Inc. 1.9 1.3

Alumax, Inc. 1.8 1.6

TOP FIVE MARKET SECTORS AS OF DECEMBER 31, 1996
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE MARKET SECTORS
6 MONTHS AGO

Media & Leisure 15.7 16.6

Finance 11.9 13.3

Technology 11.8 5.9

Retail & Wholesale 8.2 7.5

Health 7.7 6.9

ASSET ALLOCATION (% OF FUND'S INVESTMENTS)
AS OF DECEMBER 31, 1996 * AS OF JUNE 30, 1996 **
Row: 1, Col: 1, Value: 5.4
Row: 1, Col: 2, Value: 1.4
Row: 1, Col: 3, Value: 43.2
Row: 1, Col: 4, Value: 50.0
Row: 1, Col: 1, Value: 2.1
Row: 1, Col: 2, Value: 1.6
Row: 1, Col: 3, Value: 46.3
Row: 1, Col: 4, Value: 50.0
Stocks 93.2%
Bonds 1.4%
Short-term
investments 5.4%
FOREIGN
INVESTMENTS 10.1%
Stocks 96.3%
Bonds 1.6%
Short-term
investments 2.1%
FOREIGN
INVESTMENTS 11.8%
*
**
INVESTMENTS DECEMBER 31, 1996

Showing Percentage of Total Value of Investment in Securities

COMMON STOCKS - 93.0%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 0.4%
AEROSPACE & DEFENSE - 0.1%
Boeing Co. 9,100 $ 968,003
DEFENSE ELECTRONICS - 0.3%
Herley Industries, Inc. (a)(c) 200,000 2,050,000
TOTAL AEROSPACE & DEFENSE 3,018,003
BASIC INDUSTRIES - 7.2%
IRON & STEEL - 0.4%
Cold Metal Products, Inc. (a) 179,900 1,101,888
Steel Dynamics, Inc. (a) 86,000 1,644,750
2,746,638
METALS & MINING - 6.2%
AFC Cable Systems, Inc. (a)(c) 695,300 16,600,288
Alumax, Inc. (a) 400,000 13,350,000
Cable Design Technology Corp. (a) 281,400 8,758,575
Inco Ltd. 200,000 6,382,901
45,091,764
PAPER & FOREST PRODUCTS - 0.6%
Mercer International, Inc. (SBI) 407,900 4,180,975
TOTAL BASIC INDUSTRIES 52,019,377
CONGLOMERATES - 0.2%
Tomkins PLC Ord. 308,333 1,426,071
CONSTRUCTION & REAL ESTATE - 3.8%
CONSTRUCTION - 2.6%
Beazer Homes USA, Inc. (a) 152,200 2,815,700
Lennar Corp. 459,200 12,513,200
Pulte Corp. 129,300 3,975,975
19,304,875
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
CONSTRUCTION & REAL ESTATE - CONTINUED
REAL ESTATE INVESTMENT TRUSTS - 1.2%
Arden Realty Group, Inc. 5,000 $ 138,750
Jameson Co. 250,000 3,312,500
Liberty Property Trust (SBI) 113,000 2,909,750
Sovran Self Storage, Inc. 72,000 2,250,000
8,611,000
TOTAL CONSTRUCTION & REAL ESTATE 27,915,875
DURABLES - 7.3%
AUTOS, TIRES, & ACCESSORIES - 1.4%
Chrysler Corp. 45,400 1,498,200
Cummins Engine Co., Inc. 124,000 5,704,000
Modine Manufacturing Co. 56,800 1,519,400
Scania AB:
Class A 12,000 297,825
Class B 12,000 298,701
Walbro Corp. 55,000 1,003,750
10,321,876
CONSUMER DURABLES - 2.1%
Libbey, Inc. 541,700 15,099,888
CONSUMER ELECTRONICS - 1.1%
Fossil, Inc. (a) 140,600 1,898,100
Movado Group, Inc. (c) 220,000 5,995,000
Tag-Heuer International SA sponsored ADR (a) 11,000 177,375
8,070,475
HOME FURNISHINGS - 1.2%
Maxim Group, Inc. (a) 480,000 8,400,000
TEXTILES & APPAREL - 1.5%
Deckers Outdoor Corp. (a)(c) 595,500 4,094,063
Galey & Lord, Inc. (a) 135,800 2,020,025
Maxwell Shoe Co., Inc. Class A (a)(c) 758,800 5,027,050
11,141,138
TOTAL DURABLES 53,033,377
ENERGY - 4.5%
ENERGY SERVICES - 0.8%
Baker Hughes, Inc. 157,300 5,426,850
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
ENERGY - CONTINUED
OIL & GAS - 3.7%
Atlantic Richfield Co. 100,000 $ 13,250,000
Occidental Petroleum Corp. 318,000 7,433,250
Royal Dutch Petroleum Co. ADR 36,100 6,164,075
Tosco Corp. 2,300 181,988
27,029,313
TOTAL ENERGY 32,456,163
FINANCE - 11.9%
INSURANCE - 11.9%
Allmerica Financial Corp. 8,000 268,000
Allstate Corp. 370,200 21,425,325
American Bankers Insurance Group, Inc. 762,300 38,972,588
Old Republic International Corp. 486,500 13,013,875
Penncorp. Financial Group, Inc. 301,600 10,857,600
Riscorp, Inc. (a) 92,600 335,675
Terra Nova Holdings Ltd. 35,000 752,500
US Facilities Corp. 52,700 1,034,238
86,659,801
HEALTH - 6.6%
DRUGS & PHARMACEUTICALS - 2.5%
Myriad Genetics (a) 75,000 1,893,750
Sepracor, Inc. (a) 984,700 16,370,638
18,264,388
MEDICAL EQUIPMENT & SUPPLIES - 3.7%
Cygnus, Inc. (a) 179,800 2,607,100
Heartport, Inc. (a) 111,100 2,541,413
Hemasure, Inc. (a) 359,000 2,243,750
I-Stat Corp. (a) 507,700 12,057,875
McKesson Corp. 121,500 6,804,000
Physiometrix, Inc. (a) 165,000 577,500
26,831,638
MEDICAL FACILITIES MANAGEMENT - 0.4%
ARV Assisted Living, Inc. (a) 148,800 1,729,800
Emeritus Corp. (a) 76,800 1,036,800
2,766,600
TOTAL HEALTH 47,862,626
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
INDUSTRIAL MACHINERY & EQUIPMENT - 2.3%
ELECTRICAL EQUIPMENT - 0.0%
Ortel Corp. (a) 7,400 $ 177,600
INDUSTRIAL MACHINERY & EQUIPMENT - 2.3%
Columbus McKinnon Corp. 247,600 3,868,750
Gardner Denver Machinery, Inc. (a) 12,300 421,275
Regal-Beloit Corp. 134,400 2,637,600
Sulzer Gebrueder PC 10,500 5,604,174
T B Wood's Corp. 164,000 1,763,000
Tokheim Corp. (a) 80,500 654,063
TRINOVA Corp. 44,700 1,625,963
16,574,825
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 16,752,425
MEDIA & LEISURE - 15.5%
BROADCASTING - 2.2%
American Telecasting, Inc. (a) 510,000 2,932,500
Ascent Entertainment Group, Inc. (a) 64,500 1,040,063
CAI Wireless Systems, Inc. (a) 1,125,615 1,125,615
Heartland Wireless Communications, Inc. (a) 371,667 4,878,129
People's Choice TV Corp. (a)(c) 679,675 4,163,009
Starsight Telecast, Inc. (a) 30,800 288,750
Wireless One, Inc. (a) 227,600 1,507,850
15,935,916
ENTERTAINMENT - 3.9%
Alliance Communications Corp. Class B (non-vtg.) (a) 1,500 13,240
Film Roman, Inc. (a) 155,000 1,181,875
Harveys Casino Resorts (c) 745,500 12,580,313
MGM Grand, Inc. (a) 169,200 5,900,850
Silicon Gaming, Inc. (a) 10,000 161,250
Viacom, Inc. Class B (non-vtg.) (a) 245,000 8,544,375
28,381,903
LEISURE DURABLES & TOYS - 4.9%
Hasbro, Inc. 97,600 3,794,200
Just Toys, Inc. (a)(c) 253,900 333,244
Nintendo Co. Ltd. Ord. 438,900 31,379,741
35,507,185
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
MEDIA & LEISURE - CONTINUED
LODGING & GAMING - 3.3%
Circus Circus Enterprises, Inc. (a) 364,300 $ 12,522,813
Mirage Resorts, Inc. (a) 180,000 3,892,500
Station Casinos, Inc. (a) 115,000 1,164,375
WMS Industries, Inc. (a) 325,900 6,518,000
24,097,688
PUBLISHING - 0.2%
Hollinger International, Inc. Class A 145,500 1,673,250
RESTAURANTS - 1.0%
Morton's Restaurant Group, Inc. (a)(c) 414,800 6,999,750
TOTAL MEDIA & LEISURE 112,595,692
NONDURABLES - 4.1%
AGRICULTURE - 1.2%
Saskatchewan Wheat Pool:
Class B (non-vtg.) (a) 478,300 6,699,026
Class B (a)(b) 158,000 2,212,934
8,911,960
FOODS - 0.9%
Earthgrains Co. 118,000 6,165,500
HOUSEHOLD PRODUCTS - 0.8%
Church & Dwight Co., Inc. 251,800 5,759,925
TOBACCO - 1.2%
Philip Morris Companies, Inc. 80,000 9,010,000
TOTAL NONDURABLES 29,847,385
PRECIOUS METALS - 1.8%
Bre-X Minerals Ltd. (a) 200,000 3,165,919
Getchell Gold Corp. (a) 32,200 1,235,675
Newmont Mining Corp. 200,000 8,950,000
13,351,594
RETAIL & WHOLESALE - 8.2%
APPAREL STORES - 0.5%
Baby Superstore, Inc. (a) 29,600 710,400
Charming Shoppes, Inc. (a) 211,400 1,070,213
Footstar, Inc. (a) 63,722 1,585,085
3,365,698
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
RETAIL & WHOLESALE - CONTINUED
DRUG STORES - 1.2%
CVS Corp. 219,600 $ 9,085,950
GENERAL MERCHANDISE STORES - 1.0%
Freds, Inc. Class A (c) 590,300 5,091,338
Wal-Mart Stores, Inc. 81,100 1,855,163
6,946,501
GROCERY STORES - 4.7%
Whole Foods Market, Inc. (a)(c) 1,530,300 34,431,750
RETAIL & WHOLESALE, MISCELLANEOUS - 0.8%
Staples, Inc. (a) 113,000 2,041,063
Toys "R" Us, Inc. (a) 121,600 3,648,000
5,689,063
TOTAL RETAIL & WHOLESALE 59,518,962
SERVICES - 0.8%
Regis Corp. 372,700 6,056,375
TECHNOLOGY - 11.5%
COMPUTER SERVICES & SOFTWARE - 7.7%
BancTec, Inc. (a) 270,000 5,568,750
Broadway & Seymour, Inc. (a) 174,400 1,831,200
Broderbund Software, Inc. (a) 140,000 4,165,000
CACI International, Inc. Class A (a) 116,100 2,438,100
CompUSA, Inc. (a) 257,200 5,304,750
Eidos PLC sponsored ADR (a) 400,000 4,800,000
GT Interactive Software, Inc. (a) 80,000 570,000
Maxis, Inc. (a) 260,900 3,196,025
Midway Games, Inc. (a) 167,100 3,383,775
Restrac, Inc. (a) 90,000 438,750
Spectrum Holobyte, Inc. (a)(c) 1,860,000 13,950,000
Sybase, Inc. (a) 281,700 4,700,869
USCS International, Inc. (a) 235,200 3,969,000
Viewlogic Systems, Inc. (a) 198,300 2,255,663
56,571,882
COMPUTERS & OFFICE EQUIPMENT - 1.4%
Ingram Micro, Inc. Class A (a) 2,000 46,000
International Business Machines Corp. 60,000 9,060,000
Performance Technologies, Inc. (a) 110,000 1,062,188
10,168,188
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TECHNOLOGY - CONTINUED
ELECTRONICS - 2.4%
Intel Corp. 130,900 $ 17,139,719
TOTAL TECHNOLOGY 83,879,789
TRANSPORTATION - 5.5%
AIR TRANSPORTATION - 1.8%
AMR Corp. (a) 68,100 6,001,313
Reno Air, Inc. (a)(c) 934,800 6,835,725
12,837,038
TRUCKING & FREIGHT - 3.7%
Airborne Freight Corp. 243,600 5,694,150
Consolidated Freightways Corp. (a) 172,650 1,532,269
Consolidated Freightways, Inc. 345,300 7,682,925
Hunt (J.B.) Transport Services, Inc. 435,600 6,098,400
M.S. Carriers, Inc. (a) 110,300 1,764,800
USFreightways Corp. 150,000 4,115,625
26,888,169
TOTAL TRANSPORTATION 39,725,207
UTILITIES - 1.4%
NYNEX Corp. 213,600 10,279,500
TOTAL COMMON STOCKS
(Cost $641,589,688) 676,398,222
CONVERTIBLE PREFERRED STOCKS - 0.2%
ENERGY - 0.0%
OIL & GAS - 0.0%
Tosco Financing Trust $2.875 (b) 4,000 205,500
MEDIA & LEISURE - 0.2%
BROADCASTING - 0.2%
Triathalon Broadcasting Co. $0.945
depositary share representing 1/10 pfd. 114,080 969,680
TOTAL CONVERTIBLE PREFERRED STOCKS
(Cost $1,426,360) 1,175,180
CONVERTIBLE BONDS - 1.4%
MOODY'S RATINGS PRINCIPAL VALUE
(UNAUDITED) AMOUNT (NOTE 1)
HEALTH - 1.1%
MEDICAL FACILITIES MANAGEMENT - 1.1%
ARV Assisted Living, Inc.
6 3/4%, 4/1/06 (b) - $ 5,000,000 $ 4,250,000
Emeritus Corp. 6 1/4%, 1/1/06 (b) - 5,000,000 4,050,000
8,300,000
TECHNOLOGY - 0.3%
ELECTRONICS - 0.3%
Richardson Electronics, Ltd.
7 1/4%, 12/15/06 B3 2,382,000 2,048,520
TOTAL CONVERTIBLE BONDS
(Cost $12,485,430) 10,348,520
CASH EQUIVALENTS - 5.4%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations) in a joint
trading account at 6 3/4%, dated
12/31/96 due 1/2/97 $ 39,037,634 39,023,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $694,524,478) $ 726,944,922
LEGEND
1. Non-income producing
2. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $10,718,434 or 1.5% of net
assets.
3. Affiliated company (see Note 10 of Notes to Financial Statements).
Distribution of investments by country of issue, as a percentage of total
value of investment in securities, is as follows:
United States 89.9%
Japan 4.3
Canada 3.1
Others (individually less than 1%) 2.7
TOTAL 100.0%
INCOME TAX INFORMATION
At December 31, 1996, the aggregate cost of investment securities for
income tax purposes was $694,677,420. Net unrealized appreciation
aggregated $32,267,502, of which $93,872,443 related to appreciated
investment securities and $61,604,941 related to depreciated investment
securities.
The fund hereby designates approximately $19,489,000 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>
DECEMBER 31, 1996

ASSETS

Investment in securities, at value (including repurchase $ 726,944,922
agreements of $39,023,000) (cost $694,524,478) -
See accompanying schedule

Cash 614

Receivable for investments sold 8,778,722

Receivable for fund shares sold 322,679

Dividends receivable 380,197

Interest receivable 246,015

Other receivables 14,273

Prepaid expenses 13,415

TOTAL ASSETS 736,700,837

</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
LIABILITIES

Payable for investments purchased $ 2,285,788

Payable for fund shares redeemed 3,782,617

Distributions payable 7,756,293

Accrued management fee 271,824

Distribution fees payable 318,896

Other payables and accrued expenses 229,350

TOTAL LIABILITIES 14,644,768

NET ASSETS $ 722,056,069

Net Assets consist of:

Paid in capital $ 647,199,666

Undistributed net investment income 1,667,423

Accumulated undistributed net realized gain (loss) on 40,769,911
investments and foreign currency transactions

Net unrealized appreciation (depreciation) on 32,419,069
investments and assets and liabilities in foreign
currencies

NET ASSETS $ 722,056,069

</TABLE>

STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
DECEMBER 31, 1996

CALCULATION OF MAXIMUM OFFERING PRICE $22.51
CLASS A:
NET ASSET VALUE and redemption price per share
($638,053 (divided by) 28,340 shares)

Maximum offering price per share (100/94.75 of $22.51) $23.76

CLASS T: $22.69
NET ASSET VALUE and redemption price per share
($560,645,014 (divided by) 24,711,323 shares)

Maximum offering price per share (100/96.50 of $22.69) $23.51

CLASS B: $22.36
NET ASSET VALUE and offering price per share
($98,535,214 (divided by) 4,407,076 shares) A

INITIAL CLASS: $22.90
NET ASSET VALUE and redemption price per share
($20,405,659 (divided by) 891,012 shares)

Maximum offering price per share (100/96.50 of $22.90) $23.73

INSTITUTIONAL CLASS: $22.57
NET ASSET VALUE, offering price and redemption price per

share ($41,832,129 (divided by) 1,853,352 shares)

A 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 DECEMBER 31, 1996

INVESTMENT INCOME $ 10,374,783
Dividends (including $178,561 received from
affiliated issuers)

Interest 4,530,101

TOTAL INCOME 14,904,884

EXPENSES

Management fee $ 4,583,688
Basic fee

Performance adjustment (962,281)

Transfer agent fees 1,693,586

Distribution fees 3,997,788

Accounting fees and expenses 380,339

Non-interested trustees' compensation 2,962

Custodian fees and expenses 61,462

Registration fees 102,354

Audit 47,031

Legal 10,965

Miscellaneous 43,781

Total expenses before reductions 9,961,675

Expense reductions (121,816) 9,839,859

NET INVESTMENT INCOME 5,065,025

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

Investment securities (including realized gain of 101,103,389
$7,219,738 on sales of investments in affiliated
issuers)

Foreign currency transactions (369) 101,103,020

Change in net unrealized appreciation (depreciation) on:

Investment securities (96,083,040)

Assets and liabilities in foreign currencies (1,375) (96,084,415)

NET GAIN (LOSS) 5,018,605

NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 10,083,630
FROM OPERATIONS

</TABLE>

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1996 1995

INCREASE (DECREASE) IN NET ASSETS

Operations $ 5,065,025 $ 10,587,747
Net investment income

Net realized gain (loss) 101,103,020 36,064,014

Change in net unrealized appreciation (depreciation) (96,084,415) 132,499,323

NET INCREASE (DECREASE) IN NET ASSETS RESULTING 10,083,630 179,151,084
FROM OPERATIONS

Distributions to shareholders (5,501,432) (11,454,997)
From net investment income

From net realized gain (70,113,368) (15,884,736)

TOTAL DISTRIBUTIONS (75,614,800) (27,339,733)

Share transactions - net increase (decrease) 36,171,237 189,241,269

TOTAL INCREASE (DECREASE) IN NET ASSETS (29,359,933) 341,052,620

NET ASSETS

Beginning of period 751,416,002 410,363,382

End of period (including undistributed net investment $ 722,056,069 $ 751,416,002
income of $1,667,423, and $0, respectively)

</TABLE>

FINANCIAL HIGHLIGHTS - CLASS A
YEAR ENDED
DECEMBER 31,

1996 F
<TABLE>
<CAPTION>
<S> <C> <C>
SELECTED PER-SHARE DATA

Net asset value, beginning of period $ 23.48

Income from Investment Operations

Net investment income .08 E

Net realized and unrealized gain (loss) 1.26

Total from investment operations 1.34

Less Distributions

From net investment income (.37)

From net realized gain (1.94)

Total distributions (2.31)

Net asset value, end of period $ 22.51

TOTAL RETURN B, C 5.80%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted) $ 638

Ratio of expenses to average net assets .99% A, D

Ratio of expenses to average net assets after expense reductions .97% A, G

Ratio of net investment income to average net assets 1.00% A

Portfolio turnover 151%

Average commission rate H $ .0409
</TABLE>
A ANNUALIZED
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 6 OF NOTES TO FINANCIAL
STATEMENTS).
A TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF
LESS THAN ONE YEAR ARE NOT ANNUALIZED.
A LIMITED IN ACCORDANCE WITH A STATE EXPENSE LIMITATION. WITHOUT THIS
REIMBURSEMENT, THE CLASS' RATIO OF EXPENSES TO AVERAGE NET ASSETS WOULD
HAVE BEEN HIGHER (SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS).
A NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
A FOR THE PERIOD SEPTEMBER 3, 1996 (COMMENCEMENT OF SALE OF CLASS A SHARES)
TO DECEMBER 31, 1996.
A FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES (SEE NOTE 6 OF
NOTES TO FINANCIAL STATEMENTS).
A FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR SECURITY
TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM PERIOD
TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED IN
VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES MAY
DIFFER.
FINANCIAL HIGHLIGHTS - CLASS T

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
YEARS ENDED THREE YEARS ENDED SEPTEMBER 30,
DECEMBER 31, MONTHS
ENDED
DECEMBER 31,

1996 1995 1994 1994 F 1993 1992

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA

Net asset value, $ 24.88 $ 18.70 $ 19.96 $ 22.52 $ 19.53 $ 21.38
beginning of period

Income from
Investment
Operations

Net investment .17 E .39 .10 E .39 E .33 .61
income

Net realized .18 6.73 (.75) (.81) 4.44 .58
and unrealized
gain (loss)

Total from .35 7.12 (.65) (.42) 4.77 1.19
investment
operations

Less Distributions

From net (.19) (.39) (.35) (.43) (.57) (.62)
investment
income

From net (2.35) (.55) (.26) (1.71) (1.21) (2.42)
realized gain

Total distributions (2.54) (.94) (.61) (2.14) (1.78) (3.04)

Net asset value, $ 22.69 $ 24.88 $ 18.70 $ 19.96 $ 22.52 $ 19.53
end of period

TOTAL RETURN B, C 1.53% 38.16% (3.26)% (2.24)% 26.33% 7.26%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of $ 560,645 $ 619,993 $ 375,691 $ 385,349 $ 269,883 $ 194,710
period (000 omitted)

Ratio of expenses to 1.28% 1.61% 1.73% A, 1.85% 1.57% 1.46%
average net assets G D

Ratio of expenses to 1.27% 1.61% 1.73% A 1.84% 1.57% 1.46%
average net assets H H
after expense
reductions

Ratio of net .70% 1.90% 2.03% A 1.89% 2.06% 3.22%
investment income
to average net
assets

Portfolio turnover 151% 142% 228% A 159% 183% 211%

Average commission $ .0409
rate I

</TABLE>

A ANNUALIZED B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES
NOT BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 6 OF NOTES TO FINANCIAL
STATEMENTS). C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND
FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. D INCLUDES
REIMBURSEMENT OF $.03 PER SHARE FROM FMR FOR ADJUSTMENTS TO PRIOR PERIOD'S
FEES. E NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD. F 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, NET INVESTMENT
INCOME PER SHARE MAY REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO
TAX DIFFERENCES. G FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES
DURING THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO
WOULD HAVE BEEN HIGHER. H FMR OR THE FUND HAS ENTERED INTO VARYING
ARRANGEMENTS WITH THIRD PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE
CLASS' EXPENSES (SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS). I FOR FISCAL
YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS REQUIRED TO
DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR SECURITY TRADES ON WHICH
COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM PERIOD TO PERIOD AND
FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED IN VARIOUS MARKETS
WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES MAY DIFFER.
FINANCIAL HIGHLIGHTS - CLASS B
YEARS ENDED THREE YEAR ENDED
DECEMBER 31, MONTHS SEPTEMBER
ENDED 30,
DECEMBER
31,

1996 1995 1994 1994 E

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SELECTED PER-SHARE DATA

Net asset value, beginning of period $ 24.56 $ 18.57 $ 19.98 $ 19.65

Income from Investment Operations

Net investment income .04 D .38 .06 D .05 D

Net realized and unrealized gain (loss) .18 6.54 (.74) .28

Total from investment operations .22 6.92 (.68) .33

Less Distributions

From net investment income (.07) (.38) (.47) -

From net realized gain (2.35) (.55) (.26) -

Total distributions (2.42) (.93) (.73) -

Net asset value, end of period $ 22.36 $ 24.56 $ 18.57 $ 19.98

TOTAL RETURN B, C 1.00% 37.35% (3.41)% 1.68%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted) $ 98,535 $ 87,566 $ 17,090 $ 8,824

Ratio of expenses to average net assets 1.80% 2.11% 2.58% A 2.63% A,
F

Ratio of expenses to average net assets 1.79% 2.10% 2.53% A, 2.63% A
after expense reductions G G G

Ratio of net investment income to .18% 1.40% 1.22% A 1.11% A
average net assets

Portfolio turnover 151% 142% 228% A 159%

Average commission rate H $ .0409

</TABLE>

A ANNUALIZED
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 6 OF NOTES TO FINANCIAL
STATEMENTS).
A TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
A NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
A FOR THE PERIOD JUNE 30, 1994 (COMMENCEMENT OF SALE OF CLASS B SHARES) TO
SEPTEMBER 30, 1994.
A FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD HAVE
BEEN HIGHER.
A FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES (SEE NOTE 6 OF
NOTES TO FINANCIAL STATEMENTS).
A FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR SECURITY
TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM PERIOD
TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED IN
VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES MAY
DIFFER.
FINANCIAL HIGHLIGHTS - INITIAL CLASS

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
YEARS ENDED THREE YEARS ENDED SEPTEMBER 30,
DECEMBER 31, MONTHS
ENDED
DECEMBER 31,

1996 1995 1994 1994 F 1993 1992

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA

Net asset value, $ 25.10 $ 18.86 $ 20.23 $ 22.72 $ 19.72 $ 21.55
beginning of period

Income from
Investment
Operations

Net investment .28 E .50 .13 E .54 E .45 .73
income

Net realized .19 6.79 (.74) (.81) 4.46 .58
and unrealized
gain (loss)

Total from .47 7.29 (.61) (.27) 4.91 1.31
investment
operations

Less Distributions

From net (.32) (.50) (.50) (.51) (.70) (.72)
investment
income

From net (2.35) (.55) (.26) (1.71) (1.21) (2.42)
realized gain

Total distributions (2.67) (1.05) (.76) (2.22) (1.91) (3.14)

Net asset value, end $ 22.90 $ 25.10 $ 18.86 $ 20.23 $ 22.72 $ 19.72
of period

TOTAL RETURN B, C 2.00% 38.75% (3.02)% (1.51)% 26.98% 7.89%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of $ 20,406 $ 23,428 $ 17,583 $ 18,850 $ 20,707 $ 17,933
period (000 omitted)

Ratio of expenses to .82% 1.04% 1.14% A 1.15% .89% .87%
average net assets D

Ratio of expenses to .81% 1.03% 1.11% A, 1.14% .89% .87%
average net assets G G G G
after expense
reductions

Ratio of net 1.16% 2.47% 2.65% A 2.60% 2.74% 3.78%
investment income
to average net
assets

Portfolio turnover 151% 142% 228% A 159% 183% 211%

Average commission $ .0409
rate H

</TABLE>

A ANNUALIZED B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES
NOT BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 6 OF NOTES TO FINANCIAL
STATEMENTS). C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND
FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. D INCLUDES
REIMBURSEMENT OF $.03 PER SHARE FROM FMR FOR ADJUSTMENTS TO PRIOR PERIOD'S
FEES. E NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD. F 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, NET INVESTMENT
INCOME PER SHARE MAY REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO
TAX DIFFERENCES. G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS'
EXPENSES (SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS). H FOR FISCAL YEARS
BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS REQUIRED TO DISCLOSE ITS
AVERAGE COMMISSION RATE PER SHARE FOR SECURITY TRADES ON WHICH COMMISSIONS
ARE CHARGED. THIS AMOUNT MAY VARY FROM PERIOD TO PERIOD AND FUND TO FUND
DEPENDING ON THE MIX OF TRADES EXECUTED IN VARIOUS MARKETS WHERE TRADING
PRACTICES AND COMMISSION RATE STRUCTURES MAY DIFFER.
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
YEARS ENDED DECEMBER
31,

1996 1995 E

<TABLE>
<CAPTION>
<S> <C> <C>
SELECTED PER-SHARE DATA

Net asset value, beginning of period $ 24.80 $ 22.35

Income from Investment Operations

Net investment income .29 D .55

Net realized and unrealized gain (loss) .17 3.00

Total from investment operations .46 3.55

Less Distributions

From net investment income (.34) (.55)

From net realized gain (2.35) (.55)

Total distributions (2.69) (1.10)

Net asset value, end of period $ 22.57 $ 24.80

TOTAL RETURN B, C 1.99% 15.96%

RATIOS AND SUPPLEMENTAL DATA

Net assets, end of period (000 omitted) $ 41,832 $ 20,429

Ratio of expenses to average net assets .78% .97% A

Ratio of expenses to average net assets after expense reductions .76% F .96% A,
F

Ratio of net investment income to average net assets 1.21% 2.55% A

Portfolio turnover 151% 142%

Average commission rate G $ .0409

</TABLE>

A ANNUALIZED
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIODS SHOWN (SEE NOTE 6 OF NOTES TO FINANCIAL
STATEMENTS).
A TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
A NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
A FOR THE PERIOD JULY 3, 1995 (COMMENCEMENT OF SALE OF INSTITUTIONAL CLASS
SHARES) TO DECEMBER 31, 1995.
A FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES
WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES (SEE NOTE 6 OF
NOTES TO FINANCIAL STATEMENTS).
A FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR SECURITY
TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM PERIOD
TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED IN
VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES MAY
DIFFER.
NOTES TO FINANCIAL STATEMENTS
For the period ended December 31, 1996

1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor Strategic Opportunities (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, Class T, Class B, Initial Class, and Institutional
Class shares, each of which has equal rights as to assets and voting
privileges. Each class has exclusive voting rights with respect to its
distribution plan. The fund commenced sale of a new Class A of shares on
September 3, 1996. On this date, the original Class A was renamed Class T.
Investment income, realized and unrealized capital gains and losses, the
common expenses of the fund, and certain fund-level expense reductions are
allocated on a pro rata basis to each class based on the relative net
assets of each class to the total net assets of the fund. Each class of
shares differs in its respective distribution, transfer agent,
registration, and certain other class-specific fees, expenses, and expense
reductions.
The financial statements have been prepared in conformity with generally
accepted accounting principles which permit management to make certain
estimates and assumptions at the date of the financial statements. The
following summarizes the significant accounting policies of the fund:
SECURITY VALUATION. Securities for which exchange quotations are readily
available are valued at the last sale price, or if no sale price, at the
closing bid price. Securities (including restricted securities) for which
exchange quotations are not readily available (and in certain cases debt
securities which trade on an exchange) are valued primarily using
dealer-supplied valuations or at their fair value as determined in good
faith under consistently applied procedures under the general supervision
of the Board of Trustees. Short-term securities with remaining maturities
of sixty days or less for which quotations are not readily available are
valued at amortized cost or original cost plus accrued interest, both of
which approximate current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Income receipts
and expense payments are translated into U.S. dollars at the prevailing
exchange rate on the respective dates of the transactions. Purchases and
sales of securities are translated into U.S. dollars at the contractual
currency exchange rates established at the time of each trade.
Net realized gains and losses on foreign currency transactions represent
net gains and losses from sales and maturities of forward currency
contracts, disposition of foreign currencies, and the difference between
the amount of net
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
FOREIGN CURRENCY TRANSLATION -
CONTINUED
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 included with the net realized and unrealized gain or loss
on investment securities.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes substantially all of its taxable income for
its fiscal year. The schedule of investments includes information regarding
income taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date,
except certain dividends from foreign securities where the ex-dividend date
may have passed, are recorded as soon as the funds are informed of the
ex-dividend date. Non-cash dividends included in dividend income, if any,
are recorded at the fair market value of the securities received. Interest
income, which includes accretion of original issue discount, is accrued as
earned. Investment income is recorded net of foreign taxes withheld where
recovery of such taxes is uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
PREPAID EXPENSES. Fidelity Management & Research Company (FMR) bears all
organizational expenses except for registering and qualifying each class
and shares of each class for distribution under federal and state
securities law. These expenses are borne by each class and amortized over
one year.
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 pro rata basis based on the number of shares
outstanding for 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, which may result in distribution
reclassifications, are primarily due to differing treatments for passive
foreign investment companies (PFIC), 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 the per-share allocation between net investment income and realized
and unrealized gain (loss). Undistributed net investment income and
accumulated undistributed
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
net realized gain (loss) on investments and foreign currency transactions
may include temporary book and tax basis differences which will reverse in
a subsequent period. Any taxable income or gain remaining at fiscal year
end is distributed in the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated securities.
Losses may arise from changes in the value of the foreign currency or if
the counterparties do not perform under the contracts' terms. The U.S.
dollar value of foreign currency contracts is determined using contractual
currency exchange rates established at the time of each trade. The cost of
the foreign currency contracts is included in the cost basis of the
associated investment.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (SEC), the fund, along with other
affiliated entities of FMR, may transfer uninvested cash balances into one
or more joint trading accounts. These balances are invested in one or more
repurchase agreements that mature in 60 days or less from the date of
purchase, and are collateralized by U.S. Treasury or Federal Agency
obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
Securities are transferred to an account of the funds, or to the Joint
Trading Account, at a bank custodian. The securities are marked-to-market
daily and maintained at a value at least equal to the principal amount of
the repurchase agreement (including accrued interest). FMR, the funds'
investment adviser, is responsible for determining that the value of the
underlying securities remains in accordance with the market value
requirements stated above.
INTERFUND LENDING PROGRAM. Pursuant to an Exemptive Order issued by the
SEC, the fund, along with other registered investment companies having
management contracts with FMR, may participate in an interfund lending
program. This program provides an alternative credit facility allowing the
fund to borrow from, or lend money to, other participating funds.
RESTRICTED SECURITIES. The fund is permitted to invest in securities that
are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from registration
or to the public if the securities are registered. Disposal of these
securities may involve time-consuming negotiations and expense, and prompt
sale at an acceptable price may be difficult. At the end of the period, the
fund had no investments in restricted securities (excluding 144A issues).
3. PURCHASES AND SALES OF INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $1,088,221,573 and $1,119,905,206, respectively, of which U.S.
government and government agency obligations aggregated $4,397,300 and
$178,149,415, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly
basic fee that is calculated on the basis of a group fee rate plus a fixed
individual fund fee rate applied to the average net assets of the fund. The
group fee rate is the weighted average of a series of rates and is based on
the monthly average net assets of all the mutual funds advised by FMR. The
rates ranged from .2500% to .5200% for the period. In the event that these
rates were lower than the contractual rates in effect during the period,
FMR voluntarily implemented the above rates, as they resulted in the same
or a lower management fee. The annual individual fund fee rate is .30%. The
basic fee is subject to a performance adjustment (up to a maximum of .20%
of the fund's average net assets over the performance period) based on the
investment performance of the lowest performing class 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 .48% of average net
assets after the performance adjustment.
DISTRIBUTION AND SERVICE PLAN. In accordance with Rule 12b-1 of the 1940
Act, the Trustees have adopted separate distribution plans with respect to
each class of shares, except for the Initial Class (collectively referred
to as "the Plans"). Under certain of the Plans, the class pays Fidelity
Distributors Corporation (FDC), an affiliate of FMR, a distribution and
service fee. This fee is based on the following annual rates of the average
net assets of each applicable class:
CLASS A .25%

CLASS T .50%

CLASS B 1.00%*

* .75% REPRESENTS A DISTRIBUTION FEE AND .25% REPRESENTS A SHAREHOLDER
SERVICE FEE.
For the period, each class paid FDC the following amounts, a portion of
which was paid to securities dealers, banks and other financial
institutions for the distribution of each class' applicable shares, and
providing shareholder support services:
PAID TO DEALERS'
FDC PORTION

CLASS A $ 317 $ 317

CLASS T 3,004,411 3,004,411

CLASS B 993,060 248,724

$ 3,997,788 $ 3,253,452

Under the Plans, FMR or FDC may use its resources to pay administrative and
promotional expenses related to the sale of each class' shares. The Plans
also authorize payments to third parties that assist in the sale of each
class' shares or render shareholder support services.
SALES LOAD. FDC receives a front-end sales charge of up to 5.25% for
selling Class A shares and 3.50% for selling
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
SALES LOAD - CONTINUED
Class T and Initial Class shares of the fund, respectively, and the
proceeds of a contingent deferred sales charge levied on Class B share
redemptions occurring within five years of purchase. The Class B charge is
based on declining rates which range from 4% to 1% of the lesser of the
cost of shares at the initial date of purchase or the net asset value of
the redeemed shares, excluding any reinvested dividends and capital gains.
Effective January 2, 1997, the Board of Trustees approved a revised Class B
contingent deferred sales charge for shares purchased on or after January
2, 1997. Under the revised arrangement, FDC receives the proceeds of a
contingent deferred sales charged levied on Class B share redemptions
occurring within six years of purchase. The Class B charge is based on
declining rates which range from 5% to 1% of the lesser of the cost of
shares at the initial date of purchase
or the net asset value of the redeemed shares, excluding any reinvested
dividends and capital gains.
For the period, FDC received the following sales charge amounts related to
each class, a portion of which is paid to securities, dealers, banks, and
other financial institutions:
PAID TO DEALERS'
FDC PORTION

CLASS A $ 15,662 $ 12,704

CLASS T 909,434 763,508

CLASS B 243,510 -*

INITIAL CLASS 725 -

$ 1,169,331 $ 776,212

* WHEN CLASS B SHARES ARE INITIALLY SOLD, FDC PAYS COMMISSIONS FROM ITS
OWN RESOURCES TO DEALERS THROUGH WHICH THE SALES ARE MADE.
TRANSFER AGENT FEES. Each class of the fund has entered into a separate
transfer, dividend disbursing, and shareholder servicing agent
(collectively referred to as the Transfer Agents) contract with respect to
its shares. The Transfer Agents receive account fees and asset-based fees
that vary according to the account size and type of account of the
shareholders of the respective classes of the fund. For the period, the
following amounts were paid to each transfer agent:
TRANSFER AMOUNT % OF
AGENT AVERAGE
NET ASSETS

CLASS A FIIOC* $ 446 .35%

CLASS T State Street** 1,345,676 .22%

CLASS B FIIOC* 253,070 .25%

INITIAL CLASS FSC* 43,627 .20%

INSTITUTIONAL CLASS FIIOC* 50,767 .16%

$ 1,693,586

* FIDELITY INVESTMENTS INSTITUTIONAL OPERATIONS COMPANY (FIIOC) AND
FIDELITY SERVICE CO. (FSC), AFFILIATES OF FMR.
** STATE STREET BANK AND TRUST COMPANY (STATE STREET).
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
TRANSFER AGENT FEES - CONTINUED
With respect to the Class T shares, State Street has delegated certain
transfer, dividend disbursing, and shareholder services to FIIOC for which
FIIOC receives its allocable share of all such fees. FIIOC and FSC pay for
typesetting, printing and mailing of all shareholder reports, except proxy
statements.
Effective January 1, 1997, FIIOC will replace State Street as the transfer
agent for the fund's Class T shares.
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 $257,886 for the period.
5. INTERFUND LENDING PROGRAM.
The fund participated in the interfund lending program as a lender. The
maximum loan and the average daily loan balance during the period for which
the loan was outstanding amounted to $4,468,000. The weighted average
interest rate was 5.74%. Interest earned from
the interfund lending program amounted to $713 and is included in interest
income on the Statement of Operations.
6. EXPENSE REDUCTIONS.
FMR agreed to reimburse expenses in accordance with a state expense
limitation. FMR retains the ability to be repaid by the fund, or any class
for these expense reductions in the event that expenses fall below the
state limitation prior to the end of the fiscal year. For the period, the
reimbursement reduced the expenses of Class A by $11,605.
FMR has also directed certain portfolio trades to brokers who paid a
portion of the fund's expenses. For the period, the fund's expenses were
reduced by $98,580 under this arrangement.
In addition, the fund has entered into arrangements with its custodian and
each class' transfer agent whereby interest earned on uninvested cash
balances was used to offset a portion of expenses. During the period, the
fund's custodian fees were reduced by $10,212 under the custodian
arrangement and Institutional Class expenses were reduced by $1,419 under
the transfer agent arrangement.
7. DISTRIBUTIONS TO SHAREHOLDERS.
Distributions to shareholders of each class were as follows:
YEARS ENDED
DECEMBER 31,

1996 A 1995 B

CLASS A

From net investment income $ 9,050 $ -

From net realized gain 47,453 -

CLASS T

From net investment income 4,356,302 9,290,408

From net realized gain 54,934,732 13,102,251

CLASS B

From net investment income 291,486 1,281,036

From net realized gain 9,460,141 1,854,130

INITIAL CLASS

From net investment income 263,298 449,705

From net realized gain 1,978,165 494,507

INSTITUTIONAL CLASS

From net investment income 581,296 433,848

From net realized gain 3,692,877 433,848

$ 75,614,800 $ 27,339,733

A DISTRIBUTIONS FOR CLASS A ARE FOR THE PERIOD SEPTEMBER 3, 1996
(COMMENCEMENT OF SALE OF SHARES) TO DECEMBER 31, 1996.
B DISTRIBUTIONS FOR INSTITUTIONAL CLASS ARE FOR THE PERIOD JULY 3, 1995
(COMMENCEMENT OF SALE OF SHARES) TO DECEMBER 31, 1995.
8. REGISTRATION FEES.
For the period, each class paid the following amounts to register its
shares for sale:
REGISTRATION
FEES

CLASS A $ 11,444

CLASS T 42,093

CLASS B 19,305

INITIAL CLASS 8,766

INSTITUTIONAL CLASS 20,746

$ 102,354

9. SHARE TRANSACTIONS.
Share transactions for each class of shares were as follows:

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SHARES DOLLARS

YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,

1996 A 1995 B 1996 A 1995 B

CLASS A 26,335 - $ 633,035 $ -
Shares sold

Reinvestment of distributions 2,536 - 56,498 -

Shares redeemed (531) - (12,990) -

Net increase (decrease) 28,340 - $ 676,543 $ -

CLASS T 7,239,477 9,172,492 $ 173,637,131 $ 204,159,266
Shares sold

Reinvestment of distributions 2,215,089 758,477 50,421,264 18,559,827

Shares redeemed (9,664,112) (5,097,863) (231,598,779) (111,903,939)

Net increase (decrease) (209,546) 4,833,106 $ (7,540,384) $ 110,815,154

CLASS B 1,826,263 2,741,552 $ 43,251,259 $ 61,331,975
Shares sold

Reinvestment of distributions 422,830 119,876 9,473,517 2,896,199

Shares redeemed (1,407,472) (216,251) (33,157,193) (4,921,449)

Net increase (decrease) 841,621 2,645,177 $ 19,567,583 $ 59,306,725

INITIAL CLASS 7,958 13,543 $ 193,575 $ 326,042
Shares sold

Reinvestment of distributions 86,899 33,960 1,996,834 838,428

Shares redeemed (137,073) (46,783) (3,325,386) (1,049,626)

Net increase (decrease) (42,216) 720 $ (1,134,977) $ 114,844

INSTITUTIONAL CLASS 1,132,115 804,353 $ 27,291,041 $ 18,524,159
Shares sold

Reinvestment of distributions 182,073 33,876 4,097,341 826,550

Shares redeemed (284,588) (14,477) (6,785,910) (346,163)

Net increase (decrease) 1,029,600 823,752 $ 24,602,472 $ 19,004,546

</TABLE>

A SHARE TRANSACTIONS FOR CLASS A ARE FOR THE PERIOD SEPTEMBER 3, 1996
(COMMENCEMENT OF SALE OF SHARES) TO DECEMBER 31, 1996.
B SHARE TRANSACTIONS FOR INSTITUTIONAL CLASS ARE FOR THE PERIOD JULY 3,
1995 (COMMENCEMENT OF SALE OF SHARES) TO DECEMBER 31, 1995.
10. TRANSACTIONS WITH
AFFILIATED COMPANIES.
An affiliated company is a company in which the fund has ownership of at
least 5% of the voting securities. Transactions
during the period with companies which are or were affiliates are as
follows:
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES
PURCHASE SALES DIVIDEND VALUE
AFFILIATE COST COST INCOME
AFC Cable Systems, Inc. $ 8,992,575 $ 127,500 $ - $ 16,600,288
Deckers Outdoor Corp. 933,495 - - 4,094,063
Freds, Inc. Class A 4,796,188 - 88,545 5,091,338
Harveys Casino Resorts 4,464,977 - 70,216 12,580,313
Herley Industries, Inc. 1,750,000 - - 2,050,000
I-Stat Corp. - 6,879,750 - -
Image Industries, Inc. 576,000 - - -
Just Toys, Inc. 478,350 97,500 - 333,244
Maxwell Shoe Co., Inc. Class A 3,983,700 - - 5,027,050
Morton's Restaurant Group, Inc. 6,325,700 - - 6,999,750
Movado Group, Inc. 3,987,500 - 19,800 5,995,000
People's Choice TV Corp. 11,724,394 - - 4,163,009
Reno Air, Inc. 3,503,316 - - 6,835,725
Spectrum Holobyte, Inc. 4,570,022 - - 13,950,000
Whole Foods Market, Inc. 27,641,106 - - 34,431,750
TOTALS $ 83,727,323 $ 7,104,750 $ 178,561 $ 118,151,530
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 December 31,
1996, 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 of Class A, Class T, Class B,
Initial Class, and Institutional Class for each of the periods indicated
therein. 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 December 31, 1996 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 December 31, 1996, 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 of Class A, Class T, Class
B, Initial Class, and Institutional Class for each of the periods indicated
therein, in conformity with generally accepted accounting principles.
/s/COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
February 13, 1997
DISTRIBUTIONS

The Board of Trustees of Fidelity Advisor Strategic Opportunities -
Institutional Class voted to pay on February 10, 1997, to shareholders of
record at the opening of business on February 7, 1997, a distribution of
$.87 per share derived from capital gains realized from sales of portfolio
securities.
A total of 8.54% 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.
The fund notified shareholders in January 1997 of the applicable percentage
for use in preparing 1996 income tax returns.

INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.) Inc., London, England
Fidelity Management & Research
(Far East) Inc., Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
William J. Hayes, Vice President
Harris Leviton, Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
Robert H. Morrison, Manager,
Security Transactions
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
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 *
* INDEPENDENT TRUSTEES
ADVISORY BOARD
William O. McCoy
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Investments Institutional Operations Company
Boston, MA
CUSTODIAN
Brown Brothers Harriman & Co.
Boston, MA
FOCUS FUNDS
Fidelity Advisor Consumer
Industries Fund
Fidelity Advisor Cyclical
Industries Fund
Fidelity Advisor Financial
Services Fund
Fidelity Advisor Health Care Fund
Fidelity Advisor Natural
Resources Fund
Fidelity Advisor Technology Fund
Fidelity Advisor Utilities Growth Fund
GROWTH FUNDS
Fidelity Advisor TechnoQuant(trademark)
Growth Fund
Fidelity Advisor Overseas Fund
Fidelity Advisor Mid Cap Fund
Fidelity Advisor Equity Growth Fund
Fidelity Advisor Growth
Opportunities Fund
Fidelity Advisor Strategic
Opportunities Fund
Fidelity Advisor Large Cap Fund
GROWTH AND INCOME FUNDS
Fidelity Advisor Growth & Income Fund
Fidelity Advisor Equity Income Fund
Fidelity Advisor Balanced Fund
TAXABLE INCOME FUNDS
Fidelity Advisor Emerging Markets Income Fund
Fidelity Advisor High Yield Fund
Fidelity Advisor Strategic Income Fund
Fidelity Advisor Government Investment Fund
Fidelity Advisor Intermediate Bond Fund
Fidelity Advisor Short Fixed-Income Fund
MUNICIPAL FUNDS
Fidelity Advisor High Income
Municipal Fund
Fidelity Advisor Municipal Bond Fund
Fidelity Advisor Intermediate Municipal Income Fund
Fidelity Advisor Short-Intermediate Municipal Income Fund
STATE MUNICIPAL FUNDS
Fidelity Advisor California Municipal Income Fund
Fidelity Advisor New York Municipal Income Fund
MONEY MARKET FUNDS
Daily Money Fund: Money Market Portfolio
Daily Money Fund: U.S. Treasury Portfolio
Daily Tax-Exempt Money Fund

(REGISTERED TRADEMARK)

(2_FIDELITY_LOGOS)FIDELITY ADVISOR

STRATEGIC OPPORTUNITIES
FUND - CLASS A, CLASS T (FORMERLY CLASS A), AND CLASS B
ANNUAL REPORT
DECEMBER 31, 1996
CONTENTS

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

PERFORMANCE 4 How the fund has done over time.

FUND TALK 12 The manager's review of fund
performance, strategy and outlook.

INVESTMENT CHANGES 15 A summary of major shifts in the
fund's investments over the past six
months.

INVESTMENTS 16 A complete list of the fund's
investments with their market
values.

FINANCIAL STATEMENTS 24 Statements of assets and liabilities,
operations, and changes in net
assets,
as well as financial highlights.

NOTES 33 Notes to the financial statements.

REPORT OF INDEPENDENT 42 The auditors' opinion.
ACCOUNTANTS

DISTRIBUTIONS 43

Advisor Strategic Opportunities - Class A 1.53% 77.02% 207.09%

Advisor Strategic Opportunities - Class A -3.80% 67.73% 190.97%
(incl. max. 5.25% sales charge)

S&P 500(registered trademark) 22.96% 103.09% 314.99%

Capital Appreciation Funds Average 16.31% 88.71% 248.21%

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 had a 5% return over the
past year, the value of your investment would be $1,050. You can compare
Class A's returns to those of the Standard & Poor's 500 Index - a widely
recognized, unmanaged index of common stocks. To measure how Class A's
performance stacked up against its peers, you can compare it to the capital
appreciation funds average, which reflects the performance of 189 mutual
funds with similar objectives tracked by Lipper Analytical Services, Inc.
over the past one year. These benchmarks reflect reinvestment of dividends
and capital gains, if any, and exclude the effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1996 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

Advisor Strategic Opportunities - Class A 1.53% 12.10% 11.87%

Advisor Strategic Opportunities - Class A -3.80% 10.90% 11.27%
(incl. max. 5.25% sales charge)

S&P 500 22.96% 15.22% 15.27%

Capital Appreciation Funds Average 16.31% 13.02% 12.48%

AVERAGE ANNUAL TOTAL RETURNS take Class A shares' cumulative return and
show you what would have happened if Class A shares had performed at a
constant rate each year. (Note: Lipper calculates average annual total
returns by annualizing each fund's total return, then taking an arithmetic
average. This may produce a slightly different figure than that obtained by
averaging the cumulative total returns and annualizing the result.)
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19961231 19970115 133902 S00000000000001
FA Strategic Opp -CL A SP Standard & Poor 500
00266 SP001
1986/12/31 9475.00 10000.00
1987/01/31 10252.41 11347.00
1987/02/28 10357.62 11795.21
1987/03/31 10661.57 12136.09
1987/04/30 10345.93 12028.08
1987/05/31 10445.30 12132.72
1987/06/30 10772.62 12745.42
1987/07/31 11205.17 13391.62
1987/08/31 11427.28 13891.12
1987/09/30 11140.87 13586.91
1987/10/31 9095.06 10660.29
1987/11/30 8680.06 9781.88
1987/12/31 8874.87 10526.28
1988/01/31 9570.14 10969.44
1988/02/29 9883.69 11480.61
1988/03/31 9726.92 11125.86
1988/04/30 9788.26 11249.36
1988/05/31 9958.67 11347.23
1988/06/30 10640.30 11868.07
1988/07/31 10578.96 11822.97
1988/08/31 10251.77 11420.99
1988/09/30 10585.77 11907.52
1988/10/31 10769.82 12238.55
1988/11/30 10837.98 12063.54
1988/12/31 10849.39 12274.65
1989/01/31 11463.90 13173.16
1989/02/28 11414.46 12845.14
1989/03/31 11654.62 13144.44
1989/04/30 12099.61 13826.63
1989/05/31 12657.62 14386.61
1989/06/30 12756.51 14304.61
1989/07/31 13632.37 15596.31
1989/08/31 13808.95 15902.00
1989/09/30 13808.95 15836.80
1989/10/31 13582.92 15469.39
1989/11/30 13950.22 15784.96
1989/12/31 14386.05 16163.80
1990/01/31 13434.73 15079.21
1990/02/28 13507.35 15273.73
1990/03/31 13507.35 15678.49
1990/04/30 12955.44 15286.53
1990/05/31 13376.63 16776.96
1990/06/30 13507.35 16662.88
1990/07/31 13543.66 16609.56
1990/08/31 12592.34 15108.05
1990/09/30 12497.93 14372.29
1990/10/31 12490.67 14310.49
1990/11/30 13042.58 15234.95
1990/12/31 13354.54 15660.00
1991/01/31 13786.06 16342.78
1991/02/28 14611.26 17511.29
1991/03/31 15073.07 17935.06
1991/04/30 15277.47 17978.11
1991/05/31 15822.56 18754.76
1991/06/30 15322.90 17895.79
1991/07/31 15784.70 18729.74
1991/08/31 16125.38 19173.63
1991/09/30 16185.94 18853.43
1991/10/31 15860.41 19106.07
1991/11/30 15474.31 18336.09
1991/12/31 16436.67 20433.74
1992/01/31 16463.34 20053.67
1992/02/29 16783.36 20314.37
1992/03/31 16356.66 19918.24
1992/04/30 16667.79 20503.84
1992/05/31 17210.05 20604.31
1992/06/30 17210.05 20297.30
1992/07/31 17743.42 21127.46
1992/08/31 17432.29 20694.35
1992/09/30 17361.18 20938.54
1992/10/31 17503.41 21011.83
1992/11/30 18250.12 21728.33
1992/12/31 18552.48 21995.59
1993/01/31 18903.08 22180.35
1993/02/28 19438.72 22482.00
1993/03/31 20042.52 22956.37
1993/04/30 19643.23 22400.83
1993/05/31 20100.96 23001.17
1993/06/30 20266.52 23067.88
1993/07/31 20695.03 22975.60
1993/08/31 21990.29 23846.38
1993/09/30 21931.86 23662.76
1993/10/31 22623.31 24152.58
1993/11/30 21668.91 23923.13
1993/12/31 22343.90 24212.60
1994/01/31 22537.26 25035.83
1994/02/28 21731.59 24357.36
1994/03/31 20893.69 23295.38
1994/04/30 21065.57 23593.56
1994/05/31 21108.54 23980.49
1994/06/30 21108.54 23392.97
1994/07/31 21613.43 24160.26
1994/08/31 21742.33 25150.83
1994/09/30 21441.55 24534.64
1994/10/31 21215.96 25086.67
1994/11/30 20560.68 24173.01
1994/12/31 20741.90 24531.50
1995/01/31 21662.53 25167.60
1995/02/28 22217.13 26148.38
1995/03/31 22427.88 26920.02
1995/04/30 22915.92 27712.81
1995/05/31 23514.89 28820.49
1995/06/30 24746.09 29489.99
1995/07/31 25577.98 30467.88
1995/08/31 26310.05 30544.36
1995/09/30 27208.50 31833.33
1995/10/31 27108.67 31719.68
1995/11/30 27829.64 33112.18
1995/12/31 28656.83 33749.92
1996/01/31 28668.34 34898.76
1996/02/29 28097.74 35222.28
1996/03/31 27160.76 35561.47
1996/04/30 27875.21 36085.64
1996/05/31 28695.07 37016.29
1996/06/30 28659.93 37157.32
1996/07/31 26692.27 35515.71
1996/08/31 27699.53 36264.74
1996/09/30 28659.93 38305.72
1996/10/31 28132.88 39362.19
1996/11/30 29116.71 42337.58
1996/12/31 29096.57 41498.87
IMATRL PRASUN SHR__CHT 19961231 19970115 133907 R00000000000123

$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was invested
in Fidelity Advisor Strategic Opportunities Fund - Class A on December 31,
1986, and the current maximum 5.25% sales charge was paid. As the chart
shows, by December 31, 1996, the value of the investment would have grown
to $29,097 - a 190.97% increase on the initial investment. For comparison,
look at how the S&P 500 did over the same period. With dividends and
capital gains, if any, reinvested, the same $10,000 investment would have
grown to $41,499 - a 314.99% 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 T
PERFORMANCE: THE BOTTOM LINE

Advisor Strategic Opportunities - Class T 1.53% 77.01% 207.06%

Advisor Strategic Opportunities - Class T -2.03% 70.81% 196.32%
(incl. max. 3.50% sales charge)

S&P 500(registered trademark) 22.96% 103.09% 314.99%

Capital Appreciation Funds Average 16.31% 88.71% 248.21%

CUMULATIVE TOTAL RETURNS show Class T's performance in percentage terms
over a set period - in this case, one year, five years, or 10 years. For
example, if you invested $1,000 in a fund that had a 5% return over the
past year, the value of your investment would be $1,050. You can compare
Class T's returns to those of the Standard & Poor's 500 Index - a widely
recognized, unmanaged index of common stocks. To measure how Class T's
performance stacked up against its peers, you can compare it to the capital
appreciation funds average, which reflects the performance of 189 mutual
funds with similar objectives tracked by Lipper Analytical Services, Inc.
over the past one year. These benchmarks reflect reinvestment of dividends
and capital gains, if any, and exclude the effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1996 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

Advisor Strategic Opportunities - Class T 1.53% 12.10% 11.87%

Advisor Strategic Opportunities - Class T -2.03% 11.30% 11.47%
(incl. max. 3.50% sales charge)

S&P 500 22.96% 15.22% 15.27%

Capital Appreciation Funds Average 16.31% 13.02% 12.48%

AVERAGE ANNUAL TOTAL RETURNS take Class T shares' cumulative return and
show you what would have happened if Class T shares had performed at a
constant rate each year. (Note: Lipper calculates average annual total
returns by annualizing each fund's total return, then taking an arithmetic
average. This may produce a slightly different figure than that obtained by
averaging the cumulative total returns and annualizing the result.)
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19961231 19970115 134143 S00000000000001
FA Strategic Opp -CL T SP Standard & Poor 500
00174 SP001
1986/12/31 9650.00 10000.00
1987/01/31 10441.76 11347.00
1987/02/28 10548.92 11795.21
1987/03/31 10858.48 12136.09
1987/04/30 10537.01 12028.08
1987/05/31 10638.22 12132.72
1987/06/30 10971.59 12745.42
1987/07/31 11412.12 13391.62
1987/08/31 11638.34 13891.12
1987/09/30 11346.64 13586.91
1987/10/31 9263.05 10660.29
1987/11/30 8840.38 9781.88
1987/12/31 9038.79 10526.28
1988/01/31 9746.90 10969.44
1988/02/29 10066.24 11480.61
1988/03/31 9906.57 11125.86
1988/04/30 9969.05 11249.36
1988/05/31 10142.60 11347.23
1988/06/30 10836.83 11868.07
1988/07/31 10774.35 11822.97
1988/08/31 10441.12 11420.99
1988/09/30 10781.29 11907.52
1988/10/31 10968.73 12238.55
1988/11/30 11038.15 12063.54
1988/12/31 11049.77 12274.65
1989/01/31 11675.64 13173.16
1989/02/28 11625.28 12845.14
1989/03/31 11869.87 13144.44
1989/04/30 12323.09 13826.63
1989/05/31 12891.40 14386.61
1989/06/30 12992.11 14304.61
1989/07/31 13884.15 15596.31
1989/08/31 14064.00 15902.00
1989/09/30 14064.00 15836.80
1989/10/31 13833.80 15469.39
1989/11/30 14207.88 15784.96
1989/12/31 14651.76 16163.80
1990/01/31 13682.87 15079.21
1990/02/28 13756.83 15273.73
1990/03/31 13756.83 15678.49
1990/04/30 13194.72 15286.53
1990/05/31 13623.70 16776.96
1990/06/30 13756.83 16662.88
1990/07/31 13793.81 16609.56
1990/08/31 12824.91 15108.05
1990/09/30 12728.76 14372.29
1990/10/31 12721.37 14310.49
1990/11/30 13283.47 15234.95
1990/12/31 13601.19 15660.00
1991/01/31 14040.69 16342.78
1991/02/28 14881.12 17511.29
1991/03/31 15351.46 17935.06
1991/04/30 15559.64 17978.11
1991/05/31 16114.79 18754.76
1991/06/30 15605.90 17895.79
1991/07/31 16076.24 18729.74
1991/08/31 16423.21 19173.63
1991/09/30 16484.89 18853.43
1991/10/31 16153.35 19106.07
1991/11/30 15760.11 18336.09
1991/12/31 16740.25 20433.74
1992/01/31 16767.41 20053.67
1992/02/29 17093.34 20314.37
1992/03/31 16658.76 19918.24
1992/04/30 16975.64 20503.84
1992/05/31 17527.92 20604.31
1992/06/30 17527.92 20297.30
1992/07/31 18071.14 21127.46
1992/08/31 17754.26 20694.35
1992/09/30 17681.83 20938.54
1992/10/31 17826.69 21011.83
1992/11/30 18587.20 21728.33
1992/12/31 18895.14 21995.59
1993/01/31 19252.21 22180.35
1993/02/28 19797.74 22482.00
1993/03/31 20412.70 22956.37
1993/04/30 20006.03 22400.83
1993/05/31 20472.21 23001.17
1993/06/30 20640.83 23067.88
1993/07/31 21077.26 22975.60
1993/08/31 22396.44 23846.38
1993/09/30 22336.93 23662.76
1993/10/31 23041.16 24152.58
1993/11/30 22069.13 23923.13
1993/12/31 22756.58 24212.60
1994/01/31 22953.51 25035.83
1994/02/28 22132.96 24357.36
1994/03/31 21279.59 23295.38
1994/04/30 21454.64 23593.56
1994/05/31 21498.41 23980.49
1994/06/30 21498.41 23392.97
1994/07/31 22012.62 24160.26
1994/08/31 22143.91 25150.83
1994/09/30 21837.57 24534.64
1994/10/31 21607.81 25086.67
1994/11/30 20940.43 24173.01
1994/12/31 21125.00 24531.50
1995/01/31 22062.63 25167.60
1995/02/28 22627.47 26148.38
1995/03/31 22842.11 26920.02
1995/04/30 23339.17 27712.81
1995/05/31 23949.20 28820.49
1995/06/30 25203.14 29489.99
1995/07/31 26050.40 30467.88
1995/08/31 26795.99 30544.36
1995/09/30 27711.03 31833.33
1995/10/31 27609.36 31719.68
1995/11/30 28343.65 33112.18
1995/12/31 29186.11 33749.92
1996/01/31 29197.84 34898.76
1996/02/29 28616.70 35222.28
1996/03/31 27662.41 35561.47
1996/04/30 28390.06 36085.64
1996/05/31 29225.06 37016.29
1996/06/30 29189.27 37157.32
1996/07/31 27185.27 35515.71
1996/08/31 28211.13 36264.74
1996/09/30 29177.34 38305.72
1996/10/31 28652.49 39362.19
1996/11/30 29666.42 42337.58
1996/12/31 29631.65 41498.87
IMATRL PRASUN SHR__CHT 19961231 19970115 134147 R00000000000123

$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was invested
in Fidelity Advisor Strategic Opportunities Fund - Class T on December 31,
1986, and the current maximum 3.50% sales charge was paid. As the chart
shows, by December 31, 1996, the value of the investment would have grown
to $29,632 - a 196.32% increase on the initial investment. For comparison,
look at how the S&P 500 did over the same period. With dividends and
capital gains, if any, reinvested, the same $10,000 investment would have
grown to $41,499 - a 314.99% 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 historical performance. You can look at
the total percentage change in value, the average annual percentage change,
or the growth of a hypothetical $10,000 investment. Total return reflects
the change in the value of an investment, assuming reinvestment of the
fund's dividend income and capital gains (the profits earned upon the sale
of securities that have grown in value). Initial offering of Class B shares
took place on June 30, 1994. Class B shares bear a 1.00% 12b-1/shareholder
service fee that is reflected in returns after June 30, 1994. Returns
between August 20, 1986 (the date Class T shares were first offered) and
June 30, 1994 are those of Class T, and reflect Class T's prior 0.65% 12b-1
fee. Had Class B's 12b-1 fee been reflected, returns prior to June 30, 1994
would have been lower. Effective January 2, 1997, Class B's contingent
deferred sales charge is based on a declining scale that ranges from 5% to
1% on Class B shares redeemed within six years of purchase. This scale is
revised from the previous scale of 4% to 1% on shares redeemed within five
years of purchase. Class B's contingent deferred sales charges included in
the past one year, past five years and past 10 years total return figures
are 5%, 2% and 0%, respectively. If Fidelity had not reimbursed certain
class expenses, the past five year and 10 year total returns would have
been lower.
CUMULATIVE TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
PERIODS ENDED DECEMBER 31, 1996 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

Advisor Strategic Opportunities - Class B 1.00% 74.97% 203.53%

Advisor Strategic Opportunities - Class B -3.55% 72.97% 203.53%
(incl. contingent deferred sales charge) 1

S&P 500(registered trademark) 22.96% 103.09% 314.99%

Capital Appreciation Funds Average 16.31% 88.71% 248.21%
</TABLE>
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 had a 5% return over the
past year, the value of your investment would be $1,050. You can compare
Class B's returns to those of the Standard & Poor's 500 Index - a widely
recognized, unmanaged index of common stocks. To measure how Class B's
performance stacked up against its peers, you can compare it to the capital
appreciation funds average, which reflects the performance of 189 mutual
funds with similar objectives tracked by Lipper Analytical Services, Inc.
over the past one year. These benchmarks reflect reinvestment of dividends
and capital gains, if any, and exclude the effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1996 PAST 1 PAST 5 PAST 10
YEAR YEARS YEARS

Advisor Strategic Opportunities - Class B 1.00% 11.84% 11.74%

Advisor Strategic Opportunities - Class B -3.55% 11.58% 11.74%
(incl. contingent deferred sales charge) 1

S&P 500 (registered trademark) 22.96% 15.22% 15.27%

Capital Appreciation Funds Average 16.31% 13.02% 12.48%

1 HAD CLASS B'S CONTINGENT DEFERRED SALES CHARGE SCALE PRIOR TO JANUARY 2,
1997 BEEN REFLECTED, THE CUMULATIVE AND AVERAGE ANNUAL TOTAL RETURNS FOR
THE PAST ONE, FIVE AND 10 YEARS WOULD HAVE BEEN -2.64% AND -2.64%, 73.97%
AND 11.71%, AND 203.53% AND 11.74%, RESPECTIVELY.
$10,000 OVER 10 YEARS
IMAHDR PRASUN SHR__CHT 19961231 19970115 133921 S00000000000001
FA Strategic Opp -CL B SP Standard & Poor 500
00608 SP001
1986/12/31 10000.00 10000.00
1987/01/31 10820.48 11347.00
1987/02/28 10931.52 11795.21
1987/03/31 11252.31 12136.09
1987/04/30 10919.19 12028.08
1987/05/31 11024.06 12132.72
1987/06/30 11369.52 12745.42
1987/07/31 11826.03 13391.62
1987/08/31 12060.46 13891.12
1987/09/30 11758.17 13586.91
1987/10/31 9599.01 10660.29
1987/11/30 9161.01 9781.88
1987/12/31 9366.62 10526.28
1988/01/31 10100.41 10969.44
1988/02/29 10431.34 11480.61
1988/03/31 10265.87 11125.86
1988/04/30 10330.62 11249.36
1988/05/31 10510.47 11347.23
1988/06/30 11229.87 11868.07
1988/07/31 11165.13 11822.97
1988/08/31 10819.81 11420.99
1988/09/30 11172.32 11907.52
1988/10/31 11366.56 12238.55
1988/11/30 11438.50 12063.54
1988/12/31 11450.54 12274.65
1989/01/31 12099.11 13173.16
1989/02/28 12046.92 12845.14
1989/03/31 12300.39 13144.44
1989/04/30 12770.04 13826.63
1989/05/31 13358.96 14386.61
1989/06/30 13463.33 14304.61
1989/07/31 14387.72 15596.31
1989/08/31 14574.09 15902.00
1989/09/30 14574.09 15836.80
1989/10/31 14335.54 15469.39
1989/11/30 14723.19 15784.96
1989/12/31 15183.17 16163.80
1990/01/31 14179.14 15079.21
1990/02/28 14255.78 15273.73
1990/03/31 14255.78 15678.49
1990/04/30 13673.29 15286.53
1990/05/31 14117.82 16776.96
1990/06/30 14255.78 16662.88
1990/07/31 14294.10 16609.56
1990/08/31 13290.07 15108.05
1990/09/30 13190.43 14372.29
1990/10/31 13182.76 14310.49
1990/11/30 13765.26 15234.95
1990/12/31 14094.50 15660.00
1991/01/31 14549.94 16342.78
1991/02/28 15420.85 17511.29
1991/03/31 15908.25 17935.06
1991/04/30 16123.98 17978.11
1991/05/31 16699.27 18754.76
1991/06/30 16171.92 17895.79
1991/07/31 16659.32 18729.74
1991/08/31 17018.87 19173.63
1991/09/30 17082.79 18853.43
1991/10/31 16739.22 19106.07
1991/11/30 16331.72 18336.09
1991/12/31 17347.41 20433.74
1992/01/31 17375.55 20053.67
1992/02/29 17713.31 20314.37
1992/03/31 17262.97 19918.24
1992/04/30 17591.34 20503.84
1992/05/31 18163.65 20604.31
1992/06/30 18163.65 20297.30
1992/07/31 18726.57 21127.46
1992/08/31 18398.20 20694.35
1992/09/30 18323.14 20938.54
1992/10/31 18473.25 21011.83
1992/11/30 19261.34 21728.33
1992/12/31 19580.46 21995.59
1993/01/31 19950.48 22180.35
1993/02/28 20515.79 22482.00
1993/03/31 21153.06 22956.37
1993/04/30 20731.64 22400.83
1993/05/31 21214.73 23001.17
1993/06/30 21389.46 23067.88
1993/07/31 21841.72 22975.60
1993/08/31 23208.75 23846.38
1993/09/30 23147.08 23662.76
1993/10/31 23876.85 24152.58
1993/11/30 22869.56 23923.13
1993/12/31 23581.95 24212.60
1994/01/31 23786.03 25035.83
1994/02/28 22935.71 24357.36
1994/03/31 22051.39 23295.38
1994/04/30 22232.79 23593.56
1994/05/31 22278.14 23980.49
1994/06/30 22278.14 23392.97
1994/07/31 22833.68 24160.26
1994/08/31 22958.39 25150.83
1994/09/30 22652.28 24534.64
1994/10/31 22391.52 25086.67
1994/11/30 21677.26 24173.01
1994/12/31 21880.44 24531.50
1995/01/31 22811.27 25167.60
1995/02/28 23388.62 26148.38
1995/03/31 23600.71 26920.02
1995/04/30 24107.37 27712.81
1995/05/31 24731.85 28820.49
1995/06/30 26027.94 29489.99
1995/07/31 26888.08 30467.88
1995/08/31 27630.39 30544.36
1995/09/30 28561.22 31833.33
1995/10/31 28455.18 31719.68
1995/11/30 29197.48 33112.18
1995/12/31 30052.20 33749.92
1996/01/31 30052.20 34898.76
1996/02/29 29445.93 35222.28
1996/03/31 28437.85 35561.47
1996/04/30 29184.57 36085.64
1996/05/31 30030.86 37016.29
1996/06/30 29968.64 37157.32
1996/07/31 27902.69 35515.71
1996/08/31 28948.11 36264.74
1996/09/30 29931.30 38305.72
1996/10/31 29383.70 39362.19
1996/11/30 30404.23 42337.58
1996/12/31 30353.27 41498.87
IMATRL PRASUN SHR__CHT 19961231 19970115 133925 R00000000000123

$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was invested
in Fidelity Advisor Strategic Opportunities Fund - Class B on December 31,
1986. As the chart shows, by December 31, 1996, the value of the investment
would have grown to $30,353 - a 203.53% increase on the initial investment.
For comparison, look at how the S&P 500 did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $41,499 - a 314.99% 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)
FUND TALK: THE MANAGER'S OVERVIEW

MARKET RECAP
Paced by the robust performance
of blue chip stocks, the U.S. stock
market posted strong gains for the
year that ended December 31,
1996. The Standard & Poor's 500
Index returned 22.96% during the
period - well above its long-term
average of about 12%. The stock
market spent much of the past
year breaking price and trading
volume records. Solid corporate
earnings reports, large cash
inflows into mutual funds,
widespread optimism and a
generally favorable interest rate
environment propelled share
prices higher. Large capitalization
stocks thrived as investors sought
their lower volatility and higher
degree of liquidity over smaller
cap stocks in an environment
where it was sometimes difficult to
discern the health of the economy.
While short-term confusion over
the direction of interest rates
created a volatile backdrop in the
summer months, stocks rallied
again when the Federal Reserve
Board left short-term interest rates
unchanged and it appeared
inflation would not be an issue for
the remainder of 1996. The Dow
Jones Industrial Average closed
above 6500 for the first time in
November. Stock markets ended
the year on an up note after
experiencing some volatility
sparked by comments by Fed
Chairman Alan Greenspan in
December about the market's
exuberance.
An interview with Harris Leviton, Portfolio Manager of Fidelity Strategic
Opportunities Fund
Q. HOW DID THE FUND DO IN 1996, HARRIS?
A. For the 12 months that ended December 31, 1996, the fund's Class A,
Class T and Class B shares had total returns of 1.53%, 1.53% and 1.00%,
respectively. During the same period, the capital appreciation funds
average posted a return of 16.31%, according to Lipper Analytical Services.
Q. WHAT LED TO THE FUND'S UNDERPERFORMANCE?
A. Before I took over the fund in March, it posted a significant negative
return at a time when, by contrast, overall stock market performance was
quite strong. During that period, the investments that helped the fund post
strong returns in 1995 - bonds and Baby Bells, or regional Bell operating
companies - detracted from the fund's performance. Rising interest rates at
that time hurt both types of investments. During the rest of 1996, I
continued the fund's focus on stocks of companies involved in special
situations. However, I also started to look for those securities I felt
were selling inexpensively. As a result, the fund emphasized more small-
and mid-capitalization stocks. Unfortunately, during the second half of the
year, the market favored a narrow range of stocks, mainly those of large
companies that make up an index such as the Standard & Poor's 500. I didn't
invest in those kinds of stocks because I found them to be too expensive
given the companies' business prospects. I found many small- and mid-cap
stocks to have much more compelling stories given their valuations and
projected growth rates, and have faith that this stock picking method will
work over time.
A. Before I took over the fund in March, the investments that helped the
fund post strong returns in 1995 - bonds and Baby Bells, or regional Bell
operating companies - detracted from its performance. Rising interest rates
at that time hurt both types of investments. During the remainder of 1996,
I continued to focus on stocks of companies involved in special situations.
However, I also started to look for those securities I felt were selling
inexpensively. As a result , the fund emphasized more small- and
mid-capitalization stocks. Unfortunately, during the second half of the
year the market favored a narrow range of stocks, mainly those of large
companies that make up such indexes as the Standard & Poor's 500. I didn't
invest in those kinds of stocks because I found them to be too expensive
given the companies' business prospects. I found many small- and mid-cap
stocks to have much more compelling stories given their valuations and
projected growth rates, and have faith that this stock picking method will
work over time.
A. Before I took over the fund in March, the investments that helped the
fund post strong returns in 1995 - bonds and Baby Bells, or regional Bell
operating companies - detracted from its performance. Rising interest rates
at that time hurt both types of investments. During the remainder of 1996,
I continued to focus on stocks of companies involved in special situations.
However, I also started to look for those securities I felt were selling
inexpensively. As a result, the fund emphasized more small- and
mid-capitalization stocks. Unfortunately, during the second half of the
year the market favored a narrow range of stocks, mainly those of large
companies that make up such indexes as the Standard & Poor's 500. I didn't
invest in those kinds of stocks because I found them to be too expensive
given the companies' business prospects. I found many small- and mid-cap
stocks to have much more compelling stories given their valuations and
projected growth rates, and have faith that this stock picking method will
work over time.
Q. YOU'VE DOUBLED THE FUND'S INVESTMENTS IN TECHNOLOGY FROM 5.9% SIX MONTHS
AGO TO 11.8% AT THE END OF THE PERIOD. WHAT MADE THIS SECTOR ATTRACTIVE?
A. In 1995, the technology sector soared to peak levels and was one of the
strongest performing sectors in the market. As a result of that euphoria,
many technology stocks became overvalued. They then declined through 1996
until they reached a point where I felt they were generally undervalued, so
I started to add some positions in the sector. Over the past two or three
months, investors overcame fears that business prospects in the sector were
fading, so valuations have rebounded to higher levels again. As a result,
I've actually pared back the fund's technology stake over the past few
months.
Q. WAS THERE A PARTICULAR TYPE OF TECHNOLOGY OR TECHNOLOGY-RELATED STOCK
THAT APPEALED TO YOU?
A. I've been very interested in the strategic opportunity offered by
companies involved in entertainment software, where there have been two
positive developments. First, a new video game product cycle based on a
higher-quality visual presentation is in its early stages. Manufacturers
have created formats that use more "bits" to improve the resolution of the
images on the screen. Up to now, investors have focused on the inevitable
decline of the 16-bit video game cycle. Over the past 12 to 18 months,
sales of games in this format have dropped off dramatically. At the same
time, sales of the next generation 32- and 64-bit systems have really taken
off. However, many of the companies are still reporting poor results that
sprang from the decline of the 16-bit systems. I believe some time in the
next six to 12 months video cartridge sales may spike upward as people
start to buy software in the new format. Nintendo and WMS Industries -
classified as media and leisure stocks - along with Eidos and Midway Games
are among the fund's investments in the entertainment software area. The
second factor driving entertainment software is that personal computers are
used increasingly as game machines. With semiconductor price declines and
rapidly changing technology, PCs have become a lot more powerful and
functional. And, with the market for PC-based gaming expanding, companies
such as Spectrum Holobyte, Maxis and Broderbund Software appeared to be
well-positioned for improvements in earnings.
Q. WHAT'S YOUR OUTLOOK AS WE ENTER 1997?
A. Common sense dictates that the market will slow down at some point.
While we've seen double-digit percentage increases in the prices of many
stocks, historic measures of a stock's value such as earnings, cash flow
and book value haven't kept pace overall. Stock market prices usually
reflect these measures of value much more efficiently. As a result, it
seems to me there has to be some sort of reconciliation or consolidation,
where stock prices fall to become more in line with those measures of
value. At the same time, I wouldn't be surprised to see some of the more
neglected parts of the market, such as undervalued small- and mid-caps with
strong cash flows, play catch up and outperform other areas.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.

TOP TEN STOCKS AS OF DECEMBER 31, 1996
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE STOCKS
6 MONTHS AGO

American Bankers Insurance Group, 5.4 4.3
Inc.

Whole Foods Market, Inc. 4.7 4.8

Nintendo Co. Ltd. Ord. 4.3 4.3

Allstate Corp. 2.9 2.5

Intel Corp. 2.4 0.0

AFC Cable Systems, Inc. 2.3 1.5

Sepracor, Inc. 2.3 1.5

Libbey, Inc. 2.1 2.1

Spectrum Holobyte, Inc. 1.9 1.3

Alumax, Inc. 1.8 1.6

TOP FIVE MARKET SECTORS AS OF DECEMBER 31, 1996
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE MARKET SECTORS
6 MONTHS AGO

Media & Leisure 15.7 16.6

Finance 11.9 13.3

Technology 11.8 5.9

Retail & Wholesale 8.2 7.5

Health 7.7 6.9

Showing Percentage of Total Value of Investment in Securities

<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1996