SUPPLEMENT TO THE FIDELITY ADVISOR
INTERNATIONAL FUNDS CLASS A, CLASS T,
CLASS B, AND CLASS C FEBRUARY 28, 1998
PROSPECTUS
The following information replaces similar information found in "Who
May Want to Invest" on page 3.
Each fund is composed of multiple classes of shares. All classes of a
fund have a common investment objective and investment portfolio.
Class A and Class T shares have a front-end sales charge and pay a
12b-1 fee. Class A and Class T shares may be subject to a contingent
deferred sales charge (CDSC). Class B and Class C shares do not have a
front-end sales charge, but do have a CDSC, and pay a 12b-1 fee.
Institutional Class shares have no sales charge and do not pay a 12b-1
fee, but are available only to certain types of investors. See "Sales
Charge Reductions and Waivers," page 32, for Institutional Class
eligibility information. You may obtain more information about
Institutional Class shares, which are not offered through this
prospectus, by calling 1-800-522-7297 if you are investing through a
broker-dealer or insurance representative, 1-800-843-3001 if you are
investing through a bank representative, or from your investment
professional.
The following information found in "Expenses" on page 4 is no
longer applicable.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A CLASS T CLASS B CLASS C
ANNUAL ACCOUNT MAINTENANCE FEE $12.00 $12.00 $12.00 $12.00
(FOR ACCOUNTS UNDER $2,500)
</TABLE>
The following information replaces similar information for
INTERNATIONAL CAPITAL APPRECIATION and OVERSEAS found in "Expenses" on
page 5.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
OPERATING EXPENSES CLASS A CLASS T CLASS B CLASS C
INTERNATIONAL CAPITAL MANAGEMENT FEE 0.75%[A] 0.75%[A] 0.75%[A] 0.75%[A]
APPRECIATION
12B-1 FEE (INCLUDING 0.25% SHAREHOLDER SERVICE
FEE FOR CLASS B 0.25% 0.50% 1.00% 1.00%
AND CLASS C SHARES)
OTHER EXPENSES (AFTER REIMBURSEMENT CLASS A,
CLASS T, CLASS B, AND CLASS C) 0.70%[A] 0.70%[A] 0.70%[A] 0.70%[A]
TOTAL OPERATING EXPENSES 1.70% 1.95% 2.45% 2.45%
OVERSEAS MANAGEMENT FEE 0.81% 0.81% 0.81% 0.81%
12B-1 FEE (INCLUDING 0.25% SHAREHOLDER SERVICE
FEE FOR CLASS B AND CLASS C SHARES) 0.25% 0.50% 1.00% 1.00%
OTHER EXPENSES 1.49% 0.35% 0.49% 0.95%[A]
TOTAL OPERATING EXPENSES 2.55% 1.66% 2.30% 2.76%
</TABLE>
[A] BASED ON ESTIMATED EXPENSES FOR THE FIRST YEAR.
The following information replaces similar information found in
"Expenses" on page 5.
A portion of the brokerage commissions that certain of the funds pay
is used to reduce fund expenses. In addition, certain funds have
entered into arrangements with their custodian and transfer agent
whereby credits realized as a result of uninvested cash balances are
used to reduce custodian and transfer agent expenses. Including these
reductions, the total operating expenses presented in the table above
for the applicable class would have been:
CLASS A CLASS T CLASS B
OVERSEAS 2.54% 1.65% 2.29%
EMERGING MARKETS INCOME 1.38% 1.45% 2.13%
The following information replaces similar information for
INTERNATIONAL CAPITAL APPRECIATION and OVERSEAS found in "Expenses" on
page 5.
EXPENSE TABLE EXAMPLE: You would pay the following amount in total
expenses on a $1,000 investment, assuming a 5% annual return and
either (1) full redemption or (2) no redemption at the end of each
time period. Total expenses shown below include your shareholder
transaction expenses, such as the maximum front-end sales charge or
CDSC, as applicable, and a class's annual operating expenses.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
FULL REDEMPTION NO REDEMPTION
CLASS A CLASS T CLASS B CLASS C CLASS B CLASS C
INTERNATIONAL CAPITAL APPRECIATION 1 YEAR $74 $54 $75[A] $35[A] $25 $25
3 YEARS $108 $94 $106[A] $76 $76 $76
OVERSEAS 1 YEAR $82 $51 $73[A] $38[A] $23 $28
3 YEARS $132 $86 $102[A] $86 $72 $86
5 YEARS $185 $122 $143[A] $146 $123 $146
10 YEARS[B] $329 $225 $273 $309 $273 $309
</TABLE>
[A] REFLECTS DEDUCTION OF APPLICABLE CDSC.
[B] REFLECTS CONVERSION OF CLASS B SHARES TO CLASS A SHARES AFTER
SEVEN YEARS.
THESE EXAMPLES ILLUSTRATE THE EFFECT OF EXPENSES, BUT ARE NOT MEANT TO
SUGGEST ACTUAL OR EXPECTED EXPENSES OR RETURNS, ALL OF WHICH MAY VARY.
The following information replaces similar information found in
"Expenses" on page 6.
FMR has voluntarily agreed to reimburse Class A, Class T, Class B, and
Class C of each fund to the extent that total operating expenses, as a
percentage of their respective average net assets, exceed the
following rates:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A EFFECTIVE CLASS T EFFECTIVE CLASS B EFFECTIVE CLASS C EFFECTIVE
DATE DATE DATE DATE
INTERNATIONAL CAPITAL
APPRECIATION 1.70% 12/1/98 1.95% 12/1/98 2.45% 12/1/98 2.45% 12/1/98
EMERGING MARKETS INCOME 1.40% 8/30/96 1.50% 3/10/94 2.15% 1/1/96 2.25% 11/1/97
</TABLE>
If these agreements were not in effect, other expenses and total
operating expenses, as a percentage of average net assets, would have
been the following amounts:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
OTHER EXPENSES TOTAL OPERATING EXPENSES
CLASS A CLASS T CLASS B CLASS C[A] CLASS A CLASS T CLASS B CLASS C[A]
INTERNATIONAL
CAPITAL APPRECIATION[A] 5.47% 2.73% 3.22% 3.68% 6.47% 3.98% 4.97% 5.43%
EMERGING MARKETS INCOME 2.63% (DAGGER) (DAGGER) 1.74% 3.47% (DAGGER) (DAGGER) 3.43%
</TABLE>
[A] BASED ON ESTIMATED EXPENSES FOR THE FIRST YEAR.
(dagger) TOTAL OPERATING EXPENSES WERE LESS THAN OR EQUAL TO THE
VOLUNTARY EXPENSE CAPS SHOWN IN THE FIRST TABLE ABOVE.
Expenses eligible for reimbursement do not include interest, taxes,
brokerage commissions, and extraordinary expenses.
The following information replaces the last paragraph found under the
heading "FMR and Its Affiliates" in the "Charter" section on page 14.
FMR may allocate brokerage transactions to its broker-dealer
affiliates and in a manner that takes into account the sale of shares
of Fidelity Advisor Funds, provided that the fund receives brokerage
services and commission rates comparable to those of other
broker-dealers.
The following information replaces the eighth, ninth and tenth
paragraphs found under the heading "Other Expenses" in the "Breakdown
of Expenses" section on page 21.
In addition, pursuant to each Class B plan, Class B of each fund pays
FDC a monthly service fee at an annual rate of 0.25% of Class B's
average net assets throughout the month. Up to the full amount of the
Class B service fee may be reallowed to investment professionals for
providing personal service to and/or maintenance of Class B
shareholder accounts.
Class C shares of each fund have adopted a DISTRIBUTION AND SERVICE
PLAN. Under the plans, Class C of each fund is authorized to pay FDC a
monthly distribution fee as compensation for its services and expenses
in connection with the distribution of Class C shares. Class C of each
fund may pay FDC a distribution fee at an annual rate of 0.75% of its
average net assets, or such lesser amount as the Trustees may
determine from time to time. Class C of each fund currently pays FDC a
monthly distribution fee at an annual rate of 0.75% of its average net
assets throughout the month. Normally, after the first year of
investment, up to the full amount of the Class C distribution fee may
be reallowed to investment professionals as compensation for their
services in connection with the distribution of Class C shares.
In addition, pursuant to each Class C plan, Class C of each fund pays
FDC a monthly service fee at an annual rate of 0.25% of Class C's
average net assets throughout the month. Normally, after the first
year of investment, up to the full amount of the Class C service fee
may be reallowed to investment professionals for providing personal
service to and/or maintenance of Class C shareholder accounts.
For purchases of Class C shares made for an employee benefit plan or
through reinvested dividends or capital gain distributions, during the
first year of investment and thereafter, up to the full amount of the
Class C distribution fee and Class C service fee paid by such shares
may be reallowed to investment professionals as compensation for their
services in connection with the distribution of Class C shares and for
providing personal service to and/or maintenance of Class C
shareholder accounts.
The following information replaces similar information found in "How
to Buy Shares" on page 23.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $2,500
For certain Fidelity Advisor retirement accounts(double dagger) $500
Through regular investment plans* $100
TO ADD TO AN ACCOUNT $100
MINIMUM BALANCE $1,000
For certain Fidelity Advisor retirement accounts(double dagger) None
(double dagger) THESE LOWER MINIMUMS APPLY TO FIDELITY TRADITIONAL
IRA, ROTH IRA, ROTH CONVERSION IRA, ROLLOVER IRA, SEP-IRA, AND KEOGH
ACCOUNTS.
* AN ACCOUNT MAY BE OPENED WITH A MINIMUM OF $100, PROVIDED THAT A
REGULAR INVESTMENT PLAN IS ESTABLISHED AT THE TIME THE ACCOUNT IS
OPENED. FOR MORE INFORMATION ABOUT REGULAR INVESTMENT PLANS, PLEASE
REFER TO "INVESTOR SERVICES," PAGE 26.
The following information replaces similar information found in
"Investor Services" on page 27.
REGULAR INVESTMENT PLANS
FIDELITY ADVISOR SYSTEMATIC INVESTMENT PROGRAM
TO MOVE MONEY FROM YOUR BANK ACCOUNT TO A FIDELITY ADVISOR FUND
MINIMUM
INITIAL
$100
The following information replaces the second paragraph found under
the heading "Finder's Fee" in the "Transaction Details" section on
page 30.
Except as provided below, any assets on which a finder's fee has been
paid will bear a CDSC (Class A or Class T CDSC) if they do not remain
in Class A or Class T shares of the Fidelity Advisor funds, or Daily
Money Class shares of Treasury Fund, Prime Fund, or Tax-Exempt Fund,
for a period of at least one uninterrupted year. The Class A or Class
T CDSC will be 0.25% of the lesser of the cost of the Class A or Class
T shares, as applicable, at the initial date of purchase or the value
of the Class A or Class T shares, as applicable, at redemption, not
including any reinvested dividends or capital gains. Class A and Class
T shares acquired through distributions (dividends or capital gains)
will not be subject to a Class A or Class T CDSC. In determining the
applicability and rate of any Class A or Class T CDSC at redemption,
Class A or Class T shares representing reinvested dividends and
capital gains, if any, will be redeemed first, followed by those Class
A or Class T shares that have been held for the longest period of
time.
The following information replaces the last paragraph found under the
heading "Finder's Fee" in the "Transaction Details" section on page
30.
With respect to shares held by an insurance company separate account,
the Class A or Class T CDSC does not apply.
With respect to employee benefit plans, the Class A or Class T CDSC
does not apply to the following types of redemptions: (i) plan loans
or distributions or (ii) exchanges to non-Advisor fund investment
options. With respect to Individual Retirement Accounts, the Class A
or Class T CDSC does not apply to redemptions made for disability,
payment of death benefits, or required partial distributions starting
at age 70. Your investment professional should advise Fidelity at the
time your redemption order is placed if you qualify for a waiver of
the Class A or Class T CDSC.
The following information supplements the information found under the
heading "Finder's Fee" in the "Transaction Details" section on page
30.
Investment professionals must notify FDC in advance of a purchase
eligible for a finder's fee, and may be required to enter into an
agreement with FDC in order to receive the finder's fee.
The following information replaces the third paragraph under the
heading "Contingent Deferred Sales Charge" in the "Transaction
Details" section on page 30.
Except as provided below, investment professionals with whom FDC has
agreements receive as compensation from FDC, at the time of the sale,
a concession equal to 4.00% of your purchase of Class B shares. For
purchases of Class B shares through reinvested dividends or capital
gain distributions, investment professionals do not receive a
concession at the time of sale.
The following information replaces the fifth paragraph under the
heading "Contingent Deferred Sales Charge" in the "Transactions
Details" section on page 30.
Except as provided below, investment professionals with whom FDC has
agreements receive as compensation from FDC, at the time of the sale,
a concession equal to 1.00% of your purchase of Class C shares. For
purchases of Class C shares made for an employee benefit plan or
through reinvested dividends and capital gain distributions,
investment professionals do not receive a concession at the time of
sale.
The following information found in "Transaction Details" on page 31
is no longer applicable.
FIDELITY RESERVES THE RIGHT TO DEDUCT AN ANNUAL MAINTENANCE
FEE of $12.00 from accounts with a value of less than $2,500
(including any amount paid as a sales charge), subject to an annual
maximum charge of $60.00 per shareholder. Accounts opened after
September 30 will not be subject to the fee for that year. The fee,
which is payable to the transfer agent, is designed to offset in part
the relatively higher costs of servicing smaller accounts. The fee
will not be deducted from retirement accounts (except non-prototype
retirement accounts), accounts using a systematic investment program,
certain (Network Level I and III) accounts which are maintained
through National Securities Clearing Corporation (NSCC), or if total
assets in Fidelity mutual funds exceed $50,000. Eligibility for the
$50,000 waiver is determined by aggregating Fidelity mutual fund
accounts (excluding contractual plans) maintained (i) by FIIOC and
(ii) through NSCC; provided those accounts are registered under the
same primary social security number.
The following information replaces the first paragraph found in
"Exchange Restrictions" on page 32.
As a shareholder, you have the privilege of exchanging Class A, Class
T, Class B, or Class C shares of a fund for the same class of shares
of other Fidelity Advisor funds at NAV; Class A or Class T shares for
Daily Money Class shares of Treasury Fund, Prime Fund, or Tax-Exempt
Fund; Class B shares for Advisor B Class shares of Treasury Fund; and
Class C shares for Advisor C Class shares of Treasury Fund. If you
purchased your Class T shares through certain investment professionals
that have signed an agreement with FDC, you also have the privilege of
exchanging your Class T shares for shares of Fidelity Capital
Appreciation Fund. However, you should note the following:
The following information replaces the Class A waivers found in "Sales
Charge Reductions and Waivers" beginning on page 32.
A FRONT-END SALES CHARGE WILL NOT APPLY TO THE FOLLOWING CLASS A
SHARES:
1. Purchased for an employee benefit plan with at least $25 million or
more in plan assets;
2. Purchased by an employee benefit plan investing through an
insurance company separate account used to fund annuity contracts;
3. Purchased for an employee benefit plan investing through a trust
institution, bank trust department or insurance company, or any such
institution's broker-dealer affiliate that is not part of an
organization primarily engaged in the brokerage business. Employee
benefit plans that participate in the Advisor Retirement Connection do
not qualify for this waiver;
4. Purchased for an employee benefit plan investing through an
investment professional sponsored program that requires the
participating employee benefit plan to initially invest in Class C or
Class B shares and, upon meeting certain criteria, subsequently
requires the plan to invest in Class A shares;
5. Purchased by a trust institution or bank trust department for a
managed account that is charged an asset-based fee. Employee benefit
plans and accounts managed by third parties do not qualify for this
waiver;
6. Purchased by a broker-dealer for a managed account that is charged
an asset-based fee. Employee benefit plans do not qualify for this
waiver;
7. Purchased by a registered investment advisor that is not part of an
organization primarily engaged in the brokerage business for an
account that is managed on a discretionary basis and is charged an
asset-based fee. Employee benefit plans do not qualify for this
waiver; or
8. Purchased by a bank trust officer, registered representative, or
other employee (or a member of one of their immediate families) of
investment professionals having agreements with FDC.
The following information replaces similar information found in "Sales
Charge Reductions and Waivers" on page 33.
A FRONT-END SALES CHARGE WILL NOT APPLY TO THE FOLLOWING CLASS T
SHARES:
5. Purchased for an employee benefit plan, except certain small
employer retirement plans;
SUPPLEMENT TO THE FIDELITY ADVISOR
INTERNATIONAL FUNDS INSTITUTIONAL CLASS FEBRUARY 28,1998 PROSPECTUS
The following information replaces each reference to 1-800-843-3001.
If you are investing through a broker-dealer or insurance
representative, call 1-800-522-7297. If you are investing through a
bank representative, call 1-800-843-3001.
The following information supplements similar information found in
"Who May Want to Invest" on page 3.
6. Insurance company employee benefit plan programs that (i) charge an
asset-based fee and (ii) will have at least $1 million invested in the
Institutional Class of the Advisor funds. Insurance company employee
benefit plan programs include such programs offered by a broker-dealer
affiliate of an insurance company, provided that the affiliate is not
part of an organization primarily engaged in the brokerage business.
The following information replaces similar information found in "Who
May Want to Invest" on page 3.
For purchases made by managed account programs, insurance company
separate accounts or insurance company employee benefit plan programs,
FDC reserves the right to waive the requirement that $1 million be
invested in the Institutional Class of the Advisor funds. Employee
benefit plan investors must meet additional requirements specified in
the funds' SAI.
The following information found in "Expenses" on page 3 is no
longer applicable.
ANNUAL ACCOUNT MAINTENANCE FEE (FOR ACCOUNTS UNDER $2,500) $12.00
The following information replaces similar information for
INTERNATIONAL CAPITAL APPRECIATION and OVERSEAS found in "Expenses" on
page 4.
EXPENSE TABLE EXAMPLE: You would pay the following amount in total
expenses on a $1,000 investment in Institutional Class shares of a
fund, assuming a 5% annual return and full redemption at the end of
each time period. Total expenses shown below include any shareholder
transaction expenses and Institutional Class's annual operating
expenses.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
INTERNATIONAL CAPITAL APPRECIATION MANAGEMENT FEE 0.75%[A] 1 YEAR $ 15
12B-1 FEE NONE 3 YEARS $ 46
OTHER EXPENSES (AFTER REIMBURSEMENT) 0.70%[A]
TOTAL OPERATING EXPENSES 1.45%
OVERSEAS MANAGEMENT FEE 0.81% 1 YEAR $ 12
12B-1 FEE NONE 3 YEARS $ 37
OTHER EXPENSES 0.36% 5 YEARS $ 64
TOTAL OPERATING EXPENSES 1.17% 10 YEARS $ 142
</TABLE>
[A] BASED ON ESTIMATED EXPENSES FOR THE FIRST YEAR.
THESE EXAMPLES ILLUSTRATE THE EFFECT OF EXPENSES, BUT ARE NOT MEANT TO
SUGGEST ACTUAL OR EXPECTED EXPENSES OR RETURNS, ALL OF WHICH MAY VARY.
The following information replaces similar information found in
"Expenses" on page 4.
FMR has voluntarily agreed to reimburse the Institutional Class of
each fund to the extent that total operating expenses, as a percentage
of their respective average net assets, exceed the following rates:
EFFECTIVE
DATE
INTERNATIONAL CAPITAL APPRECIATION 1.45% 12/1/98
EMERGING MARKETS INCOME 1.25% 7/1/95
If these agreements were not in effect, other expenses and total
operating expenses of the Institutional Class of each fund, as a
percentage of average net assets, would have been the following
amounts (estimated for International Capital Appreciation):
OTHER TOTAL
EXPENSES OPERATING
EXPENSES
INTERNATIONAL CAPITAL APPRECIATION[A] 2.70% 3.45%
EMERGING MARKETS INCOME 0.89% 1.58%
[A] BASED ON ESTIMATED EXPENSES FOR THE FIRST YEAR.
Expenses eligible for reimbursement do not include interest, taxes,
brokerage commissions, and extraordinary expenses.
The following information replaces the last paragraph found under the
heading "FMR and Its Affiliates" in the "Charter" section on page 8.
FMR may allocate brokerage transactions to its broker-dealer
affiliates and in a manner that takes into account the sale of shares
of Fidelity Advisor Funds, provided that the fund receives brokerage
services and commission rates comparable to those of other
broker-dealers.
The following information replaces similar information found in "How
to Buy Shares" on page 16.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $2,500
For certain Fidelity Advisor retirement accounts(double dagger) $500
Through regular investment plans* $100
TO ADD TO AN ACCOUNT $100
MINIMUM BALANCE $1,000
For certain Fidelity Advisor retirement accounts(double dagger) None
(double dagger) THESE LOWER MINIMUMS APPLY TO FIDELITY TRADITIONAL
IRA, ROTH IRA, ROTH CONVERSION IRA, ROLLOVER IRA, SEP-IRA, AND KEOGH
ACCOUNTS.
* AN ACCOUNT MAY BE OPENED WITH A MINIMUM OF $100, PROVIDED THAT A
REGULAR INVESTMENT PLAN IS ESTABLISHED AT THE TIME THE ACCOUNT IS
OPENED. FOR MORE INFORMATION ABOUT REGULAR INVESTMENT PLANS, PLEASE
REFER TO "INVESTOR SERVICES," PAGE 19.
The following information replaces similar information found in
"Investor Services" on page 20.
REGULAR INVESTMENT PLANS
FIDELITY ADVISOR SYSTEMATIC INVESTMENT PROGRAM
TO MOVE MONEY FROM YOUR BANK ACCOUNT TO A FIDELITY ADVISOR FUND
MINIMUM
INITIAL
$100
The following information found in "Transaction Details" on page 23
is no longer applicable.
FIDELITY RESERVES THE RIGHT TO DEDUCT AN ANNUAL MAINTENANCE
FEE of $12.00 from accounts with a value of less than $2,500,
subject to an annual maximum charge of $60.00 per shareholder.
Accounts opened after September 30 will not be subject to the fee for
that year. The fee, which is payable to the transfer agent, is
designed to offset in part the relatively higher costs of servicing
smaller accounts. The fee will not be deducted from retirement
accounts (except non-prototype retirement accounts), accounts using a
systematic investment program, certain (Network Level I and III)
accounts which are maintained through National Securities Clearing
Corporation (NSCC), or if total assets in Fidelity mutual funds exceed
$50,000. Eligibility for the $50,000 waiver is determined by
aggregating Fidelity mutual fund accounts (excluding contractual
plans) maintained (i) by FIIOC and (ii) through NSCC; provided those
accounts are registered under the same primary social security
number.
SUPPLEMENT TO THE FIDELITY ADVISOR FUNDSSM:
CLASS A, CLASS T, CLASS B, CLASS C, INSTITUTIONAL CLASS, AND INITIAL
CLASS
FEBRUARY 28, 1998
STATEMENT OF ADDITIONAL INFORMATION
THE FOLLOWING INFORMATION REPLACES FUNDAMENTAL INVESTMENT LIMITATION
(1) IN EACH OF "INVESTMENT LIMITATIONS OF EQUITY INCOME FUND,"
"INVESTMENT LIMITATIONS OF BALANCED FUND," "INVESTMENT LIMITATIONS OF
HIGH YIELD FUND," "INVESTMENT LIMITATIONS OF MORTGAGE SECURITIES
FUND," "INVESTMENT LIMITATIONS OF GOVERNMENT INVESTMENT FUND," AND
INVESTMENT LIMITATIONS OF SHORT FIXED-INCOME FUND" FOUND ON PAGES 12,
13, 15, 17, 18, AND 20, RESPECTIVELY.
(1) The fund may not with respect to 75% of the fund's total assets,
purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. Government or any of its agencies or
instrumentalities, or securities of other investment companies) if, as
a result, (a) more than 5% of the fund's total assets would be
invested in the securities of that issuer, or (b) the fund would hold
more than 10% of the outstanding voting securities of that issuer.
THE FOLLOWING INFORMATION SUPPLEMENTS THE FUNDAMENTAL INVESTMENT
LIMITATIONS IN "INVESTMENT LIMITATIONS OF EQUITY INCOME FUND" FOUND ON
PAGE 12.
(9) The fund may, notwithstanding any other fundamental investment
policy or limitation, invest all of its assets in the securities of a
single open-end management investment company managed by Fidelity
Management & Research Company or an affiliate or successor with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
THE FOLLOWING INFORMATION SUPPLEMENTS THE NON-FUNDAMENTAL INVESTMENT
LIMITATIONS IN "INVESTMENT LIMITATIONS OF EQUITY INCOME FUND" FOUND ON
PAGE 13.
(vi) The fund does not currently intend to invest all of its assets in
the securities of a single open-end management investment company
managed by Fidelity Management & Research Company or an affiliate or
successor with substantially the same fundamental investment
objective, policies, and limitations as the fund.
THE FOLLOWING INFORMATION REPLACES FUNDAMENTAL INVESTMENT LIMITATION
(5) IN "INVESTMENT LIMITATIONS OF GOVERNMENT INVESTMENT FUND" FOUND ON
PAGE 18.
(5) The fund may not purchase the securities of any issuer (other than
securities issued or guaranteed by the U.S. Government or any of its
agencies or instrumentalities) if, as a result, more than 25% of the
fund's total assets would be invested in the securities of companies
whose principal business activities are in the same industry.
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION FOUND IN THE
"INVESTMENT POLICIES AND LIMITATIONS" SECTION FOUND ON PAGE 36.
SOURCES OF CREDIT OR LIQUIDITY SUPPORT. FMR may rely on its evaluation
of the credit of a bank or other entity in determining whether to
purchase a security supported by a letter of credit guarantee, put or
demand feature, insurance or other source of credit or liquidity. In
evaluating the credit of a foreign bank or other foreign entities, FMR
will consider whether adequate public information about the entity is
available and whether the entity may be subject to unfavorable
political or economic developments, currency controls, or other
government restrictions that might affect its ability to honor its
commitment.
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION FOUND IN THE
SAI.
SPECIAL CONSIDERATIONS REGARDING THE RUSSIAN FEDERATION
The Russian Federation is the largest republic of the Commonwealth of
Independent States with a 1995 population of 147,500,000. It is about
one and four fifths of the land area of the United States and occupies
most of eastern Europe and north Asia.
Russia has had a long history of political and economic turbulence.
The U.S.S.R. lasted 69 years and for more than half that time it
ranked as a nuclear superpower. In the 1930's tens of millions of its
citizens were collectivized under state agricultural and industrial
enterprises and millions died in political purges and the vast penal
and labor system or in state-created famines. During World War II, as
many as 20 million Soviet citizens died. After decades of communist
rule the Soviet Union was dissolved on December 8, 1991 following a
failed coup attempt against the government of Mikhail Gorbachev. On
the day that the leaders declared that the Soviet Union ceased to
exist, the Soviet republics were invited to join with Russia in the
Commonwealth of Independent states (CIS). At one time or another those
that have agreed to join have included the Ukraine, Belarus, Moldova,
Georgia, Armenia, Azerbaijan, Uzbekistan, Turkmenistan, Tajikistan,
Kazakhstan and Kyrgyzstan, but a number have dropped out since or have
only observer status. Each of the republics is a sovereign state that
controls its own economy and natural resources and collects its own
taxes, providing only minimal support to the CIS.
Boris Yeltsin, President of Russia, inherited the mantle of economic
and political chaos. With the freeing of most prices he staked his
political life on the rapid creation of a free market economy. Since
1991 Yeltsin and his Russian reformers have been faced with the
daunting task of stabilizing the Russian economy while transforming it
into a modern and efficient structure able to compete in international
markets and respond to the needs of the Russian people. To date, their
efforts have yielded widely mixed results. On the one hand, they have
made some impressive progress. Since 1992, they have abolished central
planning, decontrolled prices, unified the foreign exchange market,
made the ruble convertible, and privatized two thirds of the economy.
They have accomplished this in spite of the crushing burdens inherited
from the communist system: huge industrial enterprises that are
unprofitable; an obsolete capital stock; a crumbling energy sector,
huge external debt; and armies that had to be repatriated and
resettled at home.
Russia remains a paradox among the major economies of the world in
that it is a country marked by stagnation in production levels, but
has few constraints on growth. Labor supply is adequate and savings
are high. In addition, there is almost unlimited scope for increasing
productivity through the introduction of improved technologies,
production process and market-oriented managerial development. There
are 147 million consumers who are slowly increasing their buying power
and education standards are high. Russia is also rich in natural
resources. It has 40% of the world's natural gas reserves, 6% of its
oil, 25% of coal, diamonds, gold and nickel, and 30% of timber and
bauxite. Approximately ten million people are engaged in agriculture
and they produce half of the region's grain, meat, milk, and other
dairy products.
The main reason for the continued poor performance of the Russian
economy is the country's failure to mobilize the resources that are
available. While the official unemployment rate was at 10.6% in 1996,
up to half of the working population is, in effect, unemployed or, to
a significant degree, underemployed in inefficient and unproductive
industries. Much of the country's savings have been siphoned off
through capital flight. Russia's technological potential for
assimilating both domestic and foreign technologies is not being
exploited. Industry privatization and restructuring initiatives have
generally failed to mobilize the available factors of production as
the country's privatization program virtually ensures the predominance
of the old management teams that are largely non market-oriented in
their management approach. Approximately 80% of Russian privatized
companies continue to be majority-owned by insiders and only 10% are
owned by investors with large enough stakes to influence the running
of the company.
In July 1996, Boris Yeltsin was re-elected for a second term and it
was hoped that the election would mark the start of a more stable
period of economic growth. However, macroeconomic indicators in 1996
proved contradictory. On the one hand, the Russian government
continued its strict credit policies, and the annual inflation rate
for 1996 dropped to 23%, down from 131% in 1995. Inflation has since
remained below 3% a month through the first half of 1997. In addition,
expenditure cuts trimmed the budget deficit to 7% of GDP for the first
nine months of 1996. On the other hand, however, GDP fell by 6%
following 1995's 4% fall, while industrial production was down by 5%
and real investment dropped by approximately 19%. Non-payment
continues to represent a serious problem for the economy, particularly
in the energy sector.
While Russia is widely believed to be one of the most risky markets in
eastern Europe, it is also recognized for its potential for positive
returns. In 1996 the Russian market delivered the world's best stock
market performance and was among the top performing markets in the
first half of 1997. However, the market has been essentially liquidity
driven and concentrated in a very few of the country's largest
companies. At just $65 billion, the total capitalization of the stock
market accounts for just 12 percent of GDP. The majority of investors
in Russian equities are small and medium-sized US hedge funds. In
addition, several country specific funds have been established to make
direct and portfolio investments in Russian companies. To facilitate
foreign investment, a number of the larger Russian companies have
issued equity in the form of American depositary receipts while six
big firms have issued securities in the form of Russian depositary
certificates. These certificates are issued and marketed by the Bank
of New York. Any investment in Russia is risky and deciding which
companies will perform well at this stage of the country's
transformation is far from easy. A combination of poor accounting
standards, inept management, limited shareholder rights and the
criminalization of large sectors of the economy pose a significant
risk, particularly to foreign investors.
THE FOLLOWING INFORMATION REPLACES THE FIFTH PARAGRAPH FOUND IN THE
"PORTFOLIO TRANSACTIONS" SECTION ON PAGE 48.
To the extent permitted by applicable law, FMR is authorized to
allocate portfolio transactions in a manner that takes into account
assistance received in the distribution of shares of the funds or
other Fidelity funds and to use research services of the brokerage and
other firms that have provided such assistance. FMR may use research
services provided by and place agency transactions with National
Financial Services Corporation (NFSC) and Fidelity Brokerage Services
(Japan) LLC (FBSJ), indirect subsidiaries of FMR Corp., if the
commissions are fair, reasonable, and comparable to commissions
charged by non-affiliated, qualified brokerage firms for similar
services. Prior to December 9, 1997, FMR used research services
provided by and placed agency transactions with Fidelity Brokerage
Services (FBS), an indirect subsidiary of FMR Corp.
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION FOUND IN THE
"PERFORMANCE" SECTION ON PAGE 108.
Balanced may compare its performance to that of the Fidelity Balanced
Composite Benchmark which is a hypothetical representation of the
performance of the fund's general investment categories using a
weighting of 60% equity and 40% bond. The following indices are used
to calculate the Fidelity Balanced Composite Benchmark: equity - the
Standard & Poor's 500 Index, a widely recognized, unmanaged index of
common stocks; and bond - the Lehman Brothers Aggregate Bond Index, a
benchmark of investment-grade bonds. The index weightings of the
Fidelity Balanced Composite Benchmark are rebalanced monthly.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND UNDER
"ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION" BEGINNING
ON PAGE 110.
CLASS A SHARES ONLY
Pursuant to Rule 22d-1 under the 1940 Act, FDC exercises its right to
waive Class A's front-end sales charge on shares acquired through
reinvestment of dividends and capital gains or in connection with a
fund's merger with or acquisition of any investment company or trust.
In addition, FDC has chosen to waive Class A's front-end sales charge
in certain instances because of efficiencies involved in those sales
of shares. The sales charge will not apply:
1. to shares purchased for an employee benefit plan (including 403(b)
programs, but otherwise as defined in ERISA) with at least $25 million
or more in plan assets;
2. to shares purchased for an employee benefit plan (including 403(b)
programs, but otherwise as defined in ERISA) investing through an
insurance company separate account used to fund annuity contracts;
3. to shares purchased for an employee benefit plan (including403(b)
programs, but otherwise as defined in ERISA) investing through a trust
institution, bank trust department or insurance company, or any such
institution's broker-dealer affiliate that is not part of an
organization primarily engaged in brokerage business. Employee benefit
plans that participate in the Advisor Retirement Connection do not
qualify for this waiver;
4. to shares purchased for an employee benefit plan (including 403(b)
programs, but otherwise as defined in ERISA) investing through an
investment professional sponsored program that requires the
participating employee benefit plan to initially invest in Class C or
Class B shares and, upon meeting certain criteria, subsequently
requires the plan to invest in Class A shares;
5. to shares purchased by a trust institution or bank trust department
for a managed account that is charged an asset-based fee. Employee
benefit plans (including 403(b) programs, but otherwise as defined in
ERISA) and accounts managed by third parties do not qualify for this
waiver;
6. to shares purchased by a broker-dealer for a managed account that
is charged an asset-based fee. Employee benefit plans (including
403(b) programs, but otherwise as defined in ERISA) do not qualify for
this waiver;
7. to shares purchased by a registered investment advisor that is not
part of an organization primarily engaged in the brokerage business
for an account that is managed on a discretionary basis and is charged
an asset-based fee. Employee benefit plans (including 403(b) programs,
but otherwise defined in ERISA) do not qualify for this waiver;
or
8. to shares purchased by a bank trust officer, registered
representative, or other employee (or a member of one of their
immediate families) of investment professionals having agreements with
FDC.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND UNDER
"ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION" BEGINNING
ON PAGE 111.
CLASS T SHARES ONLY
5. to shares purchased for an employee benefit plan (as defined by
ERISA (except SIMPLE IRA, SEP, and SARSEP plans and plans covering
self-employed individuals and their employees (formerly, Keogh/H.R. 10
plans), but including 403(b) programs));
6. to shares purchased for a Fidelity or Fidelity Advisor account
(including purchases by exchange) with the proceeds of a distribution
from (i) an insurance company separate account used to fund annuity
contracts for employee benefit plans (including 403(b) programs, but
otherwise as defined in ERISA) that are invested in Fidelity Advisor
or Fidelity funds, or (ii) an employee benefit plan (including 403(b)
programs, but otherwise as defined in ERISA) that is invested in
Fidelity Advisor or Fidelity funds. (Distributions other than those
transferred to an IRA account must be transferred directly into a
Fidelity account.);
STRATEGIC OPPORTUNITIES: INITIAL CLASS ONLY
3. to shares in a Fidelity account purchased (including purchases by
exchange) with the proceeds of a distribution from an employee benefit
plan (including 403(b) programs, but otherwise as defined in ERISA)
provided that: (i) at the time of the distribution, the employer, or
an affiliate (as described in exemption 1 above) of such employer,
maintained at least one employee benefit plan (including 403(b)
programs, but otherwise as defined in ERISA) that qualified for
exemption (1) and that had at least some portion of its assets
invested in one or more mutual funds advised by FMR, or in one or more
accounts or pools advised by Fidelity Management Trust Company; and
(ii) either (a) the distribution is transferred from the plan to a
Fidelity IRA account within 60 days from the date of the distribution
or (b) the distribution is transferred directly from the plan into
another Fidelity account;
THE FOLLOWING INFORMATION REPLACES THE LAST PARAGRAPH FOUND UNDER THE
HEADING "INSTITUTIONAL CLASS SHARES ONLY" IN THE "ADDITIONAL PURCHASE,
EXCHANGE AND REDEMPTION" SECTION ON PAGE 113.
INSTITUTIONAL CLASS SHARES ONLY
6. Insurance company employee benefit plan programs (including 403 (b)
programs, but otherwise as defined in ERISA) that (i) charge an
asset-based fee and (ii) will have at least$1 million invested in the
Institutional Class of the Advisor funds. Insurance company employee
benefit plan programs include such programs offered by a broker-dealer
affiliate of an insurance company, provided that the affiliate is not
part of an organization primarily engaged in the brokerage business.
For purchases made by managed account programs, insurance company
separate accounts or insurance company employee benefit plan programs,
FDC reserves the right to waive the requirement that $1 million be
invested in the Institutional Class of the Advisor funds.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION UNDER THE
HEADING "FINDER'S FEE" IN THE "ADDITIONAL PURCHASE, EXCHANGE AND
REDEMPTION INFORMATION" SECTION BEGINNING ON PAGE 113.
FOR CLASS A AND CLASS T SHARES ONLY
FINDER'S FEE. For all funds except the Short-Term Bond Funds, on
eligible purchases of (i) Class A shares in amounts of $1 million or
more that qualify for a Class A load waiver, (ii) Class A shares in
amounts of $25 million or more, or (iii) Class T shares in amounts of
$1 million or more, investment professionals will be compensated with
a fee at the rate of 0.25% of the purchase amount. Except as provided
below, Class A eligible purchases are the following purchases made
through broker-dealers and banks: an individual trade of $25 million
or more; an individual trade of $1 million or more that is load
waived; a trade which brings the value of the accumulated account(s)
of an investor (including an employee benefit plan (including 403(b)
programs, but otherwise as defined in ERISA)) past $25 million; a load
waived trade that brings the value of the accumulated account(s) of an
investor (including an employee benefit plan (including 403(b)
programs, but otherwise as defined in ERISA)) past $1 million; a trade
for an investor with an accumulated account value of $25 million or
more; a load waived trade for an investor with an accumulated account
value of $1 million or more; an incremental trade toward an investor's
$25 million "Letter of Intent"; and an incremental load waived trade
toward an investor's $1 million "Letter of Intent". Except as provided
below, Class T eligible purchases are the following purchases made
through broker-dealers and banks: an individual trade of $1 million or
more; a trade which brings the value of the accumulated account(s) of
an investor (including an employee benefit plan (including 403(b)
programs, but otherwise as defined in ERISA)) past $1 million; a trade
for an investor with an accumulated account value of $1 million or
more; and an incremental trade toward an investor's $1 million "Letter
of Intent."
For the Short-Term Bond Funds, on eligible purchases of (i) Class A
shares in amounts of $1 million or more, or (ii) Class T shares in
amounts of $1 million or more, investment professionals will be
compensated with a fee at the rate of 0.25% of the purchase amount.
Except as provided below, Class A eligible purchases are the following
purchases made through broker-dealers and banks: an individual trade
of $1 million or more; a trade which brings the value of the
accumulated account(s) of an investor (including an employee benefit
plan (including 403(b) programs, but otherwise as defined in ERISA))
past $1 million; a trade for an investor with an accumulated account
value of $1 million or more; and an incremental trade toward an
investor's $1 million "Letter of Intent." Except as provided below,
Class T eligible purchases are the following purchases made through
broker-dealers and banks: an individual trade of $1 million or more; a
trade which brings the value of the accumulated account(s) of an
investor (including an employee benefit plan (including 403(b)
programs, but otherwise as defined in ERISA)) past $1 million; a trade
for an investor with an accumulated account value of $1 million or
more; and an incremental trade toward an investor's $1 million "Letter
of Intent."
For the purpose of determining the availability of Class A or Class T
finder's fees, purchases of Class A or Class T shares made with the
proceeds from the redemption of shares of any Fidelity fund will not
be considered "eligible purchases."
Except as provided below, any assets on which a finder's fee has been
paid will bear a contingent deferred sales charge (Class A or Class T
CDSC) if they do not remain in Class A or Class T shares of the
Fidelity Advisor Funds, or Daily Money Class shares of Treasury Fund,
Prime Fund or Tax-Exempt Fund, for a period of at least one
uninterrupted year. The Class A or Class T CDSC will be 0.25% of the
lesser of the cost of the Class A or Class T shares, as applicable, at
the initial date of purchase or the value of the Class A or Class T
shares, as applicable, at redemption, not including any reinvested
dividends or capital gains. Class A and Class T shares acquired
through distributions (dividends or capital gains) will not be subject
to a Class A or Class T CDSC. In determining the applicability and
rate of any Class A or Class T CDSC at redemption, Class A or Class T
shares representing reinvested dividends and capital gains, if any,
will be redeemed first, followed by those Class A or Class T shares,
as applicable that have been held for the longest period of time.
Shares held by an insurance company separate account will be
aggregated at the client (e.g., the contract holder or plan sponsor)
level, not at the separate account level. Upon request, anyone
claiming eligibility for the 0.25% fee with respect to shares held by
an insurance company separate account must provide FDC access to
records detailing purchases at the client level.
With respect to shares held by an insurance company separate account,
the Class A or Class T CDSC does not apply.
With respect to employee benefit plans (including 403(b) programs, but
otherwise as defined in ERISA), the Class A or Class T CDSC does not
apply to the following types of redemptions: (i) plan loans or
distributions or (ii) exchanges to non-Advisor fund investment
options. With respect to Individual Retirement Accounts, the Class A
or Class T CDSC does not apply to redemptions made for disability,
payment of death benefits, or required partial distributions starting
at age 70 1/2.
Investment professionals must notify FDC in advance of a purchase
eligible for a finder's fee, and may be required to enter into an
agreement with FDC in order to receive the finder's fee.
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION FOUND IN THE
"DISTRIBUTIONS AND TAXES" SECTION ON PAGE 117.
If a fund purchases shares in certain foreign investment entities,
defined as passive foreign investment companies (PFICs) in the
Internal Revenue Code, it may be subject to U.S. federal income tax on
a portion of any excess distribution or gain from the disposition of
such shares. Interest charges may also be imposed on a fund with
respect to deferred taxes arising from such distributions or gains.
Generally, a fund will elect to mark-to-market any PFIC shares.
Unrealized gains will be recognized as income for tax purposes and
must be distributed to shareholders as dividends.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"TRUSTEES AND OFFICERS" SECTION ON PAGE 121.
The following table sets forth information describing the compensation
of each Trustee and Member of the Advisory Board of each fund for his
or her services for the fiscal year ended in 1997, or calendar year
ended December 31, 1997, as applicable.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
COMPENSATION TABLE
AGGREGATE COMPENSATION FROM A FUNDA J. GARY RALPH PHYLLIS RICHARD ROBERT
BURKHE F. BURKE J. FLYNN M.
AD(DOUBLE DAGGER) COX DAVIS (DOUBLE DAGGER)(DOUBLE DAGGER) GATES
TECHNOQUANT GROWTH**,B $ 0 $ 8 $ 8 $ 0 $ 5
INTERNATIONAL 0 20 20 0 17
CAPITAL
APPRECIATIONB,++
OVERSEAS*,B,C 0 481 471 64 121
MIDCAP**,B 0 144 141 6 66
EQUITY GROWTH**,B,D,N 0 2,067 2,022 127 783
GROWTH 0 7,159 7,008 860 5,170
OPPORTUNITIES **,B,E,N,O
STRATEGIC OPPORTUNITIES**,B 0 265 259 0 170
LARGE CAP**,B 0 24 24 1 11
GROWTH & 0 23 23 0 16
INCOME**,B
EQUITY 0 1,202 1,177 66 965
INCOME**,B,F,N
BALANCED*,B,G,N 0 1,236 1,209 178 839
EMERGING 0 49 48 0 33
MARKETS
INCOME***,B
HIGH YIELD*,B,H,N 0 1,013 991 123 729
STRATEGIC 0 67 66 0 45
INCOME***,B
MORTGAGE 0 204 199 82 98
SECURITIES*,B,I,P
GOVERNMENT INVESTMENT*,B,J 0 92 90 15 57
INTERMEDIATE BOND**,B,K 0 197 193 13 151
SHORT FIXED- 0 166 161 25 109
INCOME*,B,L
MUNICIPAL 0 200 195 30 131
INCOME*,B,M
MUNICIPAL BOND***,B 0 395 386 0 326
INTERMEDIATE 0 27 27 2 21
MUNICIPAL
INCOME**,B
SHORT- 0 11 11 1 8
INTERMEDIATE MUNICIPAL INCOME**,B
TOTAL 0 214,500 210,000 0 176,000
COMPENSATION FROM THE FUND
COMPLEX+,A
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
COMPENSATION TABLE
AGGREGATE COMPENSATION
FROM A FUNDA EDWARD C. E. DONALD PETER WILLIAM
JOHNSON BRADLEY J. S. O. MCCOY
3D(DOUBLE DAGGER) JONES KIRK LYNCH(DOUBLE DAGGER) (DOUBLE DAGGER)
(DOUBLE DAGGER)
(DOUBLE DAGGER)
TECHNOQUANT
GROWTH**,B $ 0 $ 8 $ 8 $ 0 $ 5
INTERNATIONAL 0 20 20 0 20
CAPITAL
APPRECIATIONB,++
OVERSEAS*,B,C 0 474 474 0 260
MIDCAP**,B 0 142 142 0 94
EQUITY GROWTH**,B,D,N 0 2,038 2,038 0 1,110
GROWTH 0 7,060 7,060 0 7,213
OPPORTUNITIES **,B,E,N,O
STRATEGIC
OPPORTUNITIES**,B 0 261 261 0 227
LARGE CAP**,B 0 24 24 0 16
GROWTH & 0 23 23 0 16
INCOME**,B
EQUITY 0 1,186 1,186 0 1,237
INCOME**,B,F,N
BALANCED*,B,G,N 0 1,219 1,219 0 1,232
EMERGING 0 49 49 0 42
MARKETS
INCOME***,B
HIGH YIELD*,B,H,N 0 998 998 0 1,021
STRATEGIC 0 66 66 0 57
INCOME***,B
MORTGAGE 0 200 200 0 202
SECURITIES*,B,I,P
GOVERNMENT
INVESTMENT*,B,J 0 91 91 0 90
INTERMEDIATE
BOND**,B,K 0 194 194 0 202
SHORT FIXED- 0 164 164 0 164
INCOME*,B,L
MUNICIPAL 0 197 197 0 197
INCOME*,B,M
MUNICIPAL BOND***,B 0 389 389 0 404
INTERMEDIATE 0 27 27 0 28
MUNICIPAL
INCOME**,B
SHORT- 0 11 11 0 11
INTERMEDIATE
MUNICIPAL INCOME**,B
TOTAL 0 211,500 211,500 0 214,500
COMPENSATION FROM THE FUND
COMPLEX+,A
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
COMPENSATION TABLE
AGGREGATE COMPENSATION FROM A FUNDA GERALD C. EDWARD H. MARVIN ROBERT THOMAS
MCDONO MALONE L. C. R.
UGH (DOUBLE DAGGER)(DOUBLE DAGGER) MANN POZEN WILLIAMS
TECHNOQUANT GROWTH**,B $ 10 $ 0 $ 8 $ 0 $ 8
INTERNATIONAL 25 0 20 0 20
CAPITAL
APPRECIATIONB,++
OVERSEAS*,B,C 575 66 481 0 478
MIDCAP**,B 175 6 144 0 144
EQUITY GROWTH**,B,D,N 2,506 123 2,067 0 2,069
GROWTH 8,573 929 7,159 0 7,115
OPPORTUNITIES **,B,E,N,O
STRATEGIC OPPORTUNITIES**,B 326 0 265 0 265
LARGE CAP**,B 29 1 24 0 24
GROWTH & 29 0 23 0 23
INCOME**,B
EQUITY 1,460 64 1,202 0 1,203
INCOME**,B,F,N
BALANCED*,B,G,N 1,470 198 1,236 0 1,227
EMERGING 61 0 49 0 49
MARKETS
INCOME***,B
HIGH YIELD*,B,H,N 1,212 132 1,013 0 1,006
STRATEGIC 83 0 67 0 67
INCOME***,B
MORTGAGE 235 68 204 0 204
SECURITIES*,B,I,P
GOVERNMENT INVESTMENT*,B,J 105 14 92 0 91
INTERMEDIATE BOND**,B,K 239 13 197 0 197
SHORT FIXED- 197 28 166 0 165
INCOME*,B,L
MUNICIPAL 237 34 200 0 198
INCOME*,B,M
MUNICIPAL BOND***,B 486 0 395 0 395
INTERMEDIATE 33 2 27 0 27
MUNICIPAL
INCOME**,B
SHORT- 13 1 11 0 11
INTERMEDIATE MUNICIPAL INCOME**,B
TOTAL 264,500 0 214,500 0 214,500
COMPENSATION FROM THE FUND
COMPLEX+,A
</TABLE>
* Fiscal year ended October 31.
** Fiscal year ended November 30.
*** Fiscal year ended December 31.
(double dagger) Interested trustees of each fund and Mr. Burkhead are
compensated by FMR.
(double dagger)(double dagger) Richard J. Flynn and Edward H. Malone
served on the Board of Trustees through December 31, 1996.
(double dagger)(double dagger)(double dagger) During the period from
May 1, 1996 through December 31, 1996, William O. McCoy served as a
Member of the Advisory Board for the funds. Mr. McCoy was appointed to
the Board of Trustees of Advisor Series II, III, IV, V, VI, Income
Fund, and Municipal Trust effective January 1, 1997. Mr. McCoy was
elected to the Board of Trustees of Advisor Series I, VII, and VIII on
July 16, 1997, September 17, 1997, and June 18, 1997, respectively.
+ Information is as of December 31, 1997 for 230 funds in the complex.
++ Figures presented are estimates for the fund's first fiscal year
end October 31, 1998.
A Compensation figures include cash, amounts required to be deferred,
and may include amounts deferred at the election of Trustees. For the
calendar year ended December 31, 1997, the Trustees accrued required
deferred compensation from the funds as follows: Ralph F. Cox,
$75,000, Phyllis Burke Davis, $75,000, Robert M. Gates, $62,500, E.
Bradley Jones, $75,000, Donald J. Kirk, $75,000, William O. McCoy,
$75,000, Gerald C. McDonough, $87,500, Marvin L. Mann, $75,000, and
Thomas R. Williams, $75,000. Certain of the non-interested Trustees
elected voluntarily to defer a portion of their compensation: Ralph F.
Cox, $53,699, Marvin L. Mann, $53,699, and Thomas R. Williams,
$62,462.
B Compensation figures include cash, and may include amounts required
to be deferred and amounts deferred at the election of Trustees.
C The following amounts are required to be deferred by each
non-interested Trustee, most of which is subject to vesting: Ralph F.
Cox, $12, Phyllis Burke Davis, $12, Robert M. Gates, $0, Richard J.
Flynn, $0, E. Bradley Jones, $12, Donald J. Kirk, $12, William O.
McCoy, $0, Gerald C. McDonough, $12, Edward H. Malone, $12, Marvin L.
Mann, $12, and Thomas R. Williams, $12.
D The following amounts are required to be deferred by each
non-interested Trustee, most of which is subject to vesting: Ralph F.
Cox, $925, Phyllis Burke Davis, $925, Robert M. Gates, $330, Richard
J. Flynn, $0, E. Bradley Jones, $925, Donald J. Kirk, $925, William O.
McCoy, $330, Gerald C. McDonough, $1,078, Edward H. Malone, $4, Marvin
L. Mann, $925, and Thomas R. Williams, $925.
E The following amounts are required to be deferred by each
non-interested Trustee, most of which is subject to vesting: Ralph F.
Cox, $3,130, Phyllis Burke Davis, $3,130, Richard J. Flynn, $0, Robert
M. Gates, $2,446, E. Bradley Jones, $3,130, Donald J. Kirk, $3,130,
William O. McCoy, $3,044, Gerald C. McDonough, $3,624, Edward H.
Malone, $165, Marvin L. Mann, $3,130, and Thomas R. Williams, $3,130.
F The following amounts are required to be deferred by each
non-interested Trustee, most of which is subject to vesting: Ralph F.
Cox, $541, Phyllis Burke Davis, $541, Richard J. Flynn, $0, Robert M.
Gates, $454, E. Bradley Jones, $541, Donald J. Kirk, $541, William O.
McCoy, $552, Gerald C. McDonough, $631, Edward H. Malone, $2, Marvin
L. Mann, $541, and Thomas R. Williams, $541.
G The following amounts are required to be deferred by each
non-interested Trustee, most of which is subject to vesting: Ralph F.
Cox, $535, Phyllis Burke Davis, $535, Richard J. Flynn, $0, Robert M.
Gates, $397, E. Bradley Jones, $535, Donald J. Kirk, $535, William O.
McCoy, $508, Gerald C. McDonough, $617, Edward H. Malone, $41, Marvin
L. Mann, $535, and Thomas R. Williams, $535.
H The following amounts are required to be deferred by each
non-interested Trustee, most of which is subject to vesting: Ralph F.
Cox, $442, Phyllis Burke Davis, $442, Richard J. Flynn, $0, Robert M.
Gates, $345, E. Bradley Jones, $442, Donald J. Kirk, $442, William O.
McCoy, $430, Gerald C. McDonough, $512, Edward H. Malone, $23, Marvin
L. Mann, $442, and Thomas R. Williams, $442.
I The following amounts are required to be deferred by each
non-interested Trustee, most of which is subject to vesting: Ralph F.
Cox, $6, Phyllis Burke Davis, $6, Richard J. Flynn, $0, Robert M.
Gates, $0, E. Bradley Jones, $6, Donald J. Kirk, $6, William O. McCoy,
$0, Gerald C. McDonough, $6, Edward H. Malone, $6, Marvin L. Mann, $6,
and Thomas R. Williams, $6.
J The following amounts are required to be deferred by each
non-interested Trustee, most of which is subject to vesting: Ralph F.
Cox, $4, Phyllis Burke Davis, $4, Richard J. Flynn, $0, Robert M.
Gates, $0, E. Bradley Jones, $4, Donald J. Kirk, $4, William O. McCoy,
$0, Gerald C. McDonough, $4, Edward H. Malone, $4, Marvin L. Mann, $4,
and Thomas R. Williams, $4.
K The following amounts are required to be deferred by each
non-interested Trustee, most of which is subject to vesting: Ralph F.
Cox, $1, Phyllis Burke Davis, $1, Richard J. Flynn, $0, Robert M.
Gates, $0, E. Bradley Jones, $1, Donald J. Kirk, $1, William O. McCoy,
$0, Gerald C. McDonough, $1, Edward H. Malone, $1, Marvin L. Mann, $1,
and Thomas R. Williams, $1.
L The following amounts are required to be deferred by each
non-interested Trustee, most of which is subject to vesting: Ralph F.
Cox, $6, Phyllis Burke Davis, $6, Richard J. Flynn, $0, Robert M.
Gates, $0, E. Bradley Jones, $6, Donald J. Kirk, $6, William O. McCoy,
$0, Gerald C. McDonough, $6, Edward H. Malone, $6, Marvin L. Mann, $6,
and Thomas R. Williams, $6.
M The following amounts are required to be deferred by each
non-interested Trustee, most of which is subject to vesting: Ralph F.
Cox, $7, Phyllis Burke Davis, $7, Richard J. Flynn, $0, Robert M.
Gates, $0, E. Bradley Jones, $7, Donald J. Kirk, $7, William O. McCoy,
$0, Gerald C. McDonough, $7, Edward H. Malone, $7, Marvin L. Mann, $7,
and Thomas R. Williams, $7.
N For the fiscal period ended in 1997, certain of the non-interested
trustees' aggregate compensation from certain funds includes accrued
voluntary deferred compensation as follows: Equity Growth (Cox, $870,
Malone, $119, Mann, $870, Williams, $767); Growth Opportunities (Cox,
$3,178, Malone, $764, Mann, $3,178, Williams, $2,464); Equity Income
(Cox, $502, Malone, $62, Mann, $502, Williams, $449); Balanced (Cox,
$557, Malone, $157, Mann, $557, Williams $410); and High Yield (Cox,
$450, Malone, $109, Mann, $450, Williams, $348).
O Aggregate compensation from Growth Opportunities for the one month
period ended November 30, 1997: J. Gary Burkhead, $0, Ralph F. Cox,
$697, Phyllis Burke Davis, $697, Richard J. Flynn, $0, Robert M.
Gates, $688, Edward C. Johnson 3d, $0, E. Bradley Jones, $697, Donald
J. Kirk, $697, Peter S. Lynch, $0, William O. McCoy, $688, Gerald C.
McDonough, $851, Edward H. Malone, $14, Marvin L. Mann, $697, Robert
C. Pozen, $0, and Thomas R. Williams, $697.
P Aggregate compensation from Mortgage Securities for the three month
period ended October 31, 1997: J. Gary Burkhead, $0, Ralph F. Cox,
$51, Phyllis Burke Davis, $51, Richard J. Flynn, $0, Robert M. Gates,
$51, Edward C. Johnson 3d, $0, E. Bradley Jones, $51, Donald J. Kirk,
$51, Peter S. Lynch, $0, William O. McCoy, $51, Gerald C. McDonough,
$63, Edward H. Malone, $0, Marvin L. Mann, $51, Robert C. Pozen, $0,
and Thomas R. Williams, $51.
THE FOLLOWING INFORMATION SUPPLEMENTS THE "MANAGEMENT CONTRACTS"
SECTION BEGINNING ON PAGE 127.
The following fee schedule is the current fee schedule for High Yield,
Mortgage Securities, Government Investment, Intermediate Bond and
Short Fixed-Income, and replaces the similar information for each fund
on pages 129 and 130.
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
AVERAGE GROUP ANNUALIZED GROUP NET EFFECTIVE ANNUAL FEE
ASSETS RATE ASSETS RATE
0 - $3 BILLION .3700% $ 0.5 BILLION .3700%
3 - 6 .3400 25 .2664
6 - 9 .3100 50 .2188
9 - 12 .2800 75 .1986
12 - 15 .2500 100 .1869
15 - 18 .2200 125 .1793
18 - 21 .2000 150 .1736
21 - 24 .1900 175 .1690
24 - 30 .1800 200 .1652
30 - 36 .1750 225 .1618
36 - 42 .1700 250 .1587
42 - 48 .1650 275 .1560
48 - 66 .1600 300 .1536
66 - 84 .1550 325 .1514
84 - 120 .1500 350 .1494
120 - 156 .1450 375 .1476
156 - 192 .1400 400 .1459
192 - 228 .1350 425 .1443
228 - 264 .1300 450 .1427
264 - 300 .1275 475 .1413
300 - 336 .1250 500 .1399
336 - 372 .1225 525 .1385
372 - 408 .1200 550 .1372
408 - 444 .1175
444 - 480 .1150
480 - 516 .1125
OVER 516 .1100
This fee schedule was approved by the shareholders of High Yield,
Mortgage Securities, Government Investment, Intermediate Bond and
Short Fixed-Income.
THE FOLLOWING INFORMATION REPLACES THE FIRST AND SECOND PARAGRAPHS
FOUND UNDER "MANAGEMENT FEES" IN THE "MANAGEMENT CONTRACTS" SECTION ON
PAGE 128.
MANAGEMENT FEES. For the services of FMR under the management
contract, TechnoQuant Growth, International Capital Appreciation, Mid
Cap, Equity Growth, Large Cap, Growth & Income, Equity Income,
Balanced, Emerging Markets Income, High Yield, Strategic Income,
Mortgage Securities, Government Investment, Intermediate Bond, Short
Fixed-Income, Municipal Income, Municipal Bond, Intermediate Municipal
Income, and Short-Intermediate Municipal Income pays FMR a monthly
management fee which has two components: a group fee rate and an
individual fund fee rate.
THE FOLLOWING CHART REPLACES THE SIMILAR CHART FOUND IN THE
"MANAGEMENT CONTRACTS" SECTION ON PAGE 128.
<TABLE>
<CAPTION>
<S> <C> <C>
FUND DATE OF MANAGEMENT CONTRACT DATE OF SHAREHOLDER APPROVAL
TECHNOQUANT GROWTH 12/1/96 12/23/96*
INTERNATIONAL CAPITAL APPRECIATION 10/16/97 10/31/97*
OVERSEAS 10/31/97 9/17/97
MID CAP 1/18/96 1/18/96*
EQUITY GROWTH 8/1/97 7/16/97
GROWTH OPPORTUNITIES 2/28/98 7/16/97
STRATEGIC OPPORTUNITIES 2/28/98 6/18/97
LARGE CAP 1/18/96 1/18/96*
GROWTH & INCOME 12/1/96 12/23/96*
EQUITY INCOME 12/1/98 11/18/98
BALANCED 6/1/98 5/13/98
EMERGING MARKETS INCOME 7/1/97 6/18/97
HIGH YIELD 6/1/98 5/13/98
STRATEGIC INCOME 10/31/97 6/18/97
MORTGAGE SECURITIES 8/1/98 7/15/98
GOVERNMENT INVESTMENT 6/1/98 5/13/98
INTERMEDIATE BOND 11/1/98 10/7/98
SHORT FIXED-INCOME 6/1/98 5/13/98
MUNICIPAL INCOME 12/1/94 11/16/94
MUNICIPAL BOND 1/1/94 12/15/93
INTERMEDIATE MUNICIPAL INCOME 7/1/95 6/14/95
SHORT-INTERMEDIATE MUNICIPAL INCOME 7/1/95 6/14/95
</TABLE>
* Approved by FMR, then the sole shareholder of the fund.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"MANAGEMENT CONTRACTS" SECTION ON PAGE 132.
EQUITY FUNDS
The following fee schedule is the current fee schedule for all equity
funds.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES
AVERAGE GROUP ANNUALIZED GROUP NET EFFECTIVE ANNUAL
ASSETS RATE ASSETS FEE RATE
$ 0 - 3 BILLION .5200% $ 0.5 BILLION .5200%
3 - 6 .4900 25 .4238
6 - 9 .4600 50 .3823
9 - 12 .4300 75 .3626
12 - 15 .4000 100 .3512
15 - 18 .3850 125 .3430
18 - 21 .3700 150 .3371
21 - 24 .3600 175 .3325
24 - 30 .3500 200 .3284
30 - 36 .3450 225 .3249
36 - 42 .3400 250 .3219
42 - 48 .3350 275 .3190
48 - 66 .3250 300 .3163
66 - 84 .3200 325 .3137
84 - 102 .3150 350 .3113
102 - 138 .3100 375 .3090
138 - 174 .3050 400 .3067
174 - 210 .3000 425 .3046
210 - 246 .2950 450 .3024
246 - 282 .2900 475 .3003
282 - 318 .2850 500 .2982
318 - 354 .2800 525 .2962
354 - 390 .2750 550 .2924
390 - 426 .2700
426 - 462 .2650
462 - 498 .2600
498 - 534 .2550
OVER 534 .2500
</TABLE>
This fee schedule has been approved by the shareholders of each equity
fund.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"MANAGEMENT CONTRACTS" SECTION ON PAGE 133.
The individual fund fee rates for each fund are set forth in the
following chart. Based on the average group net assets of the funds
advised by FMR for December 1997 the annual basic fee rate would be
calculated as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
GROUP FEE RATE INDIVIDUAL FUND FEE RATE BASIC FEE RATE
TECHNOQUANT GROWTH 0.2942% + 0.30% = 0.5942%
INTERNATIONAL CAPITAL APPRECIATION* 0.2942% + 0.45% = 0.7442%
OVERSEAS 0.2942% + 0.45% = 0.7442%
MID CAP 0.2942% + 0.30% = 0.5942%
EQUITY GROWTH 0.2942% + 0.30% = 0.5942%
GROWTH OPPORTUNITIES 0.2942% + 0.30% = 0.5942%
STRATEGIC OPPORTUNITIES 0.2942% + 0.30% = 0.5942%
LARGE CAP 0.2942% + 0.30% = 0.5942%
GROWTH & INCOME 0.2942% + 0.20% = 0.4942%
EQUITY INCOME 0.2942% + 0.20% = 0.4942%
BALANCED 0.2942% + 0.15% = 0.4442%
EMERGING MARKETS INCOME 0.1372% + 0.55% = 0.6872%
HIGH YIELD 0.1372% + 0.45% = 0.5872%
STRATEGIC INCOME 0.1372% + 0.45% = 0.5872%
MORTGAGE SECURITIES 0.1372% + 0.30% = 0.4372%
GOVERNMENT INVESTMENT 0.1372% + 0.30% = 0.4372%
INTERMEDIATE BOND 0.1372% + 0.30% = 0.4372%
SHORT FIXED-INCOME 0.1372% + 0.30% = 0.4372%
MUNICIPAL INCOME 0.1372% + 0.25% = 0.3872%
INTERMEDIATE MUNICIPAL INCOME 0.1372% + 0.25% = 0.3872%
SHORT-INTERMEDIATE MUNICIPAL INCOME 0.1372% + 0.25% = 0.3872%
</TABLE>
* Estimated
THE FOLLOWING INFORMATION REPLACES THE SECOND AND SIXTH PARAGRAPHS
FOUND UNDER THE HEADING "SUB-ADVISERS" IN THE "MANAGEMENT CONTRACTS"
SECTION BEGINNING ON PAGE 135.
SUB-ADVISERS. On behalf of TechnoQuant Growth, Mid Cap, Equity Growth,
Growth Opportunities, Strategic Opportunities, Large Cap, Growth &
Income, Equity Income, Balanced, High Yield, Mortgage Securities,
Intermediate Bond, and Short Fixed-Income, FMR may also grant FMR U.K.
and FMR Far East investment management authority as well as the
authority to buy and sell securities if FMR believes it would be
beneficial to the funds. On behalf of International Capital
Appreciation, Overseas, Emerging Markets Income, and Strategic Income,
FMR may also grant FMR U.K., FMR Far East, FIJ, FIIA and FIIA(U.K.)L
investment management authority to buy and sell securities if FMR
believes it would be beneficial to the funds.
On behalf of TechnoQuant Growth, International Capital Appreciation,
Overseas, Mid Cap, Equity Growth, Growth Opportunities, Strategic
Opportunities, Large Cap, Growth & Income, Equity Income, Balanced,
Emerging Markets Income, High Yield, Strategic Income, Mortgage
Securities, Intermediate Bond, and Short Fixed-Income, for providing
discretionary investment management and executing portfolio
transactions, the sub-advisers are compensated as follows:
THE FOLLOWING INFORMATION REPLACES THE SECOND, FOURTH, FIFTH, AND
SIXTH PARAGRAPHS FOUND UNDER THE HEADING "DISTRIBUTION AND SERVICE
PLANS" BEGINNING ON PAGE 137.
Pursuant to the Class A Plans, FDC is paid a distribution fee as a
percentage of Class A's average net assets at an annual rate of up to
0.75% for each of TechnoQuant Growth, International Capital
Appreciation, Overseas, Mid Cap, Equity Growth, Growth Opportunities,
Strategic Opportunities, Large Cap, Growth & Income, Equity Income,
and Balanced (the Equity Funds); and up to 0.40% for each of Emerging
Markets Income, High Yield, Strategic Income, Government Investment,
Mortgage Securities, and Municipal Income (the Bond Funds),
Intermediate Bond and Intermediate Municipal Income (the
Intermediate-Term Bond Funds), and Short-Intermediate Municipal Income
and Short Fixed-Income (the Short-Term Bond Funds). Pursuant to the
Class T Plans, FDC is paid a distribution fee as a percentage of Class
T's average net assets at an annual rate of up to 0.75% for each of
TechnoQuant Growth, International Capital Appreciation, Equity Growth,
Mid Cap, Large Cap, Growth & Income, and Equity Income; up to 0.65%
for each of Overseas, Growth Opportunities, Strategic Opportunities,
and Balanced; up to 0.40% for each of Emerging Markets Income, High
Yield, Strategic Income, Intermediate Bond, Mortgage Securities,
Government Investment, Municipal Income, Short-Intermediate Municipal
Income, and Intermediate Municipal Income; and up to 0.15% for Short
Fixed-Income. Pursuant to the Class B Plans, FDC is paid a
distribution fee as a percentage of Class B's average net assets at an
annual rate of up to 0.75% for each fund with Class B shares. Pursuant
to the Class C Plans, FDC is paid a distribution fee as a percentage
of Class C's average net assets at an annual rate of up to 0.75% for
each fund with Class C shares. For the purpose of calculating the
distribution fees, average net assets are determined at the close of
business on each day throughout the month.
Currently, up to the full amount of distribution fees paid by Class A
and Class T may be reallowed to investment professionals as
compensation for their services in connection with the distribution of
Class A or Class T shares, as applicable, and for providing support
services to Class A or Class T shareholders, as applicable, based upon
the level of services provided.
Currently, the full amount of distribution fees paid by Class B is
retained by FDC as compensation for its services and expenses in
connection with the distribution of Class B shares, and up to the full
amount of service fees paid by Class B may be reallowed to investment
professionals for providing personal service to and/or maintenance of
Class B shareholder accounts.
Currently and except as provided below, for the first year of
investment, the full amount of distribution fees paid by Class C is
retained by FDC as compensation for its services and expenses in
connection with the distribution of Class C shares, and the full
amount of service fees paid by Class C is retained by FDC for
providing personal service to and/or maintenance of Class C
shareholder accounts. Normally, after the first year of investment, up
to the full amount of distribution fees paid by Class C may be
reallowed to investment professionals as compensation for their
services in connection with the distribution of Class C shares, and up
to the full amount of service fees paid by Class C may be reallowed to
investment professionals for providing personal service to and/or
maintenance of Class C shareholder accounts. For purchases of Class C
shares made for an employee benefit plan (including 403(b) programs,
but otherwise as defined in ERISA) or through reinvested dividends or
capital gain distributions, during the first year of investment and
thereafter, up to the full amount of distribution fees and service
fees paid by such Class C shares may be reallowed to investment
professionals as compensation for their services in connection with
the distribution of Class C shares and for providing personal service
to and/or maintenance of Class C shareholder accounts.
THE FOLLOWING TABLES REPLACE THE TABLES SHOWING DISTRIBUTION FEES AND,
FOR CLASS B AND CLASS C, SERVICE FEES, PAID BY CLASS A, CLASS T, CLASS
B, AND CLASS C, RESPECTIVELY, FOUND ON PAGES 139-141 IN THE
"DISTRIBUTION AND SERVICE PLANS" SECTION.
The table below shows the distribution fees paid by Class A for the
fiscal years ended 1997.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
CLASS A DISTRIBUTION FEES
1997
FUND FEES PAID PAID BY FDC TO RETAINED BY
TO FDC INVESTMENT FDC****
PROFESSIONALS
TECHNOQUANT GROWTH $ 9,431 $ 9,265 $ 166
OVERSEAS 6,465 6,238 227
MID CAP 6,575 6,326 249
EQUITY GROWTH 36,449 36,286 163
GROWTH OPPORTUNITIES 153,641++ 153,641++ 0++
STRATEGIC OPPORTUNITIES 2,516*** 2,255*** 261***
LARGE CAP 3,619 3,142 477
GROWTH & INCOME 6,421 6,256 165
EQUITY INCOME 32,093 32,089 4
BALANCED 10,612 10,344 268
EMERGING MARKETS INCOME 1,903 1,718 185
HIGH YIELD 29,386 29,364 22
STRATEGIC INCOME 2,600 2,450 150
MORTGAGE SECURITIES 600* 565* 35*
MORTGAGE SECURITIES 530** 482** 48**
GOVERNMENT INVESTMENT 1,086 945 141
INTERMEDIATE BOND 3,177 3,056 121
SHORT FIXED-INCOME 4,666 4,666 0
MUNICIPAL INCOME 2,810 2,723 87
INTERMEDIATE MUNICIPAL INCOME 521 358 163
SHORT-INTERMEDIATE MUNICIPAL INCOME 523 372 151
</TABLE>
+ For the fiscal period November 1, 1997 through November 30, 1997.
++ For the fiscal period November 1, 1996 through October 31, 1997.
* For the fiscal period August 1, 1997 through October 31, 1997.
** For the fiscal period March 3, 1997 through July 31, 1997.
*** For the fiscal period January 1, 1997 through November 30, 1997.
**** Amounts represent fees paid to FDC but not yet reallowed to
investment professionals as of the close of the period reported and
fees paid to FDC that are not eligible to be reallowed to investment
professionals. Amounts not eligible for reallowance are retained by
FDC for use in its capacity as distributor.
The table below shows the distribution fees paid by Class T for the
fiscal years ended 1997.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
CLASS T DISTRIBUTION FEES
1997
FUND FEES PAID PAID BY FDC TO RETAINED BY
TO FDC INVESTMENT FDC****
PROFESSIONALS
TECHNOQUANT GROWTH $ 59,373 $ 58,479 $ 894
OVERSEAS 5,557,206 5,466,383 90,823
MID CAP 1,333,963 1,224,468 109,495
EQUITY GROWTH 19,297,519 19,090,886 206,633
GROWTH OPPORTUNITIES 8,369,900+ 8,200,499+ 169,401+
GROWTH OPPORTUNITIES 86,243,939++ 85,413,638++ 830,301++
STRATEGIC OPPORTUNITIES 2,266,860*** 2,222,675*** 44,185***
LARGE CAP 179,058 176,655 2,403
GROWTH & INCOME 254,429 254,073 356
EQUITY INCOME 9,635,902 9,452,123 183,779
BALANCED 14,548,840 14,388,949 159,891
EMERGING MARKETS INCOME 230,572 207,314 23,258
HIGH YIELD 4,929,860 4,878,524 51,336
STRATEGIC INCOME 276,410 273,944 2,466
MORTGAGE SECURITIES 8,099* 3,787* 4,312*
MORTGAGE SECURITIES 2,602** 1,400** 1,202**
GOVERNMENT INVESTMENT 427,659 414,018 13,641
INTERMEDIATE BOND 655,179 632,537 22,642
SHORT FIXED-INCOME 570,695 561,631 9,064
MUNICIPAL INCOME 1,062,341 1,051,649 10,692
INTERMEDIATE MUNICIPAL INCOME 127,082 124,865 2,217
SHORT-INTERMEDIATE MUNICIPAL INCOME 37,068 36,623 445
</TABLE>
+ For the fiscal period November 1, 1997 through November 30, 1997.
++ For the fiscal period November 1, 1996 through October 31, 1997.
* For the fiscal period August 1, 1997 through October 31, 1997.
** For the fiscal period March 3, 1997 through July 31, 1997.
*** For the fiscal period January 1, 1997 through November 30, 1997.
**** Amounts represent fees paid to FDC but not yet reallowed to
investment professionals as of the close of the period reported and
fees paid to FDC that are not eligible to be reallowed to investment
professionals. Amounts not eligible for reallowance are retained by
FDC for use in its capacity as distributor.
The table below shows the distribution fees and the shareholder
service fees paid by Class B for the fiscal years ended 1997.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CLASS B DISTRIBUTION FEES AND SHAREHOLDER SERVICE FEES
1997
FUND DISTRIBUTION RETAINED BY SHAREHOLDER PAID BY FDC RETAINED BY
FEES PAID FDC***** SERVICE FEES TO INVESTMENT FDC****
TO FDC PAID TO FDC PROFESSIONALS
TECHNOQUANT GROWTH $ 44,157 $ 44,157 $ 14,718 $ 14,625 $ 93
OVERSEAS 215,984 215,984 71,995 71,995 0
MID CAP 325,966 325,966 108,656 108,656 0
EQUITY GROWTH 217,770 217,770 72,590 72,590 0
GROWTH OPPORTUNITIES 247,111+ 247,111+ 82,370+ 81,953+ 417+
GROWTH OPPORTUNITIES 844,796++ 844,796++ 281,598++ 281,598++ 0++
STRATEGIC OPPORTUNITIES 683,989*** 683,989*** 227,996*** 227,107*** 889***
LARGE CAP 120,477 120,477 40,162 39,938 224
GROWTH & INCOME 88,496 88,496 29,498 29,498 0
EQUITY INCOME 4,395,816 4,395,816 1,465,270 1,461,265 4,005
BALANCED 47,252 47,252 15,751 15,407 344
EMERGING MARKETS INCOME 144,517 144,517 55,579 55,579 0
HIGH YIELD 2,991,471 2,991,471 1,150,565 1,150,565 0
STRATEGIC INCOME 295,764 295,764 113,756 113,256 500
MORTGAGE SECURITIES 1,950* 1,950* 749* 689* 60*
MORTGAGE SECURITIES 994** 994** 380** 291** 89**
GOVERNMENT INVESTMENT 112,488 112,488 43,269 42,928 341
INTERMEDIATE BOND 127,539 127,539 49,049 48,705 344
MUNICIPAL INCOME 259,150 259,150 99,673 99,539 134
INTERMEDIATE MUNICIPAL INCOME 48,596 48,596 18,691 18,629 62
</TABLE>
+ For the fiscal period November 1, 1997 through November 30, 1997.
++ For the fiscal period November 1, 1996 through October 31, 1997.
* For the fiscal period August 1, 1997 through October 31, 1997.
** For the fiscal period March 3, 1997 through July 31, 1997.
*** For the fiscal period January 1, 1997 through November 30, 1997.
**** Amounts represent fees paid to FDC but not yet reallowed to
investment professionals as of the close of the period reported and
fees paid to FDC that are not eligible to be reallowed to investment
professionals. Amounts not eligible for reallowance are retained by
FDC for use in its capacity as distributor.
***** Amounts are retained by FDC for use in its capacity as
distributor.
The table below shows the distribution fees and the shareholder
service fees paid by Class C for the fiscal years ended 1997. (Class C
shares were not offered prior to November 3, 1997.)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
CLASS C DISTRIBUTION FEES AND SHAREHOLDER SERVICE FEES
1997
FUND PAID BY FDC RETAINED SHAREHOLDER PAID BY FDC RETAINED BY
DISTRIBUTION TO INVESTMENT BY FDC* SERVICE FEES TO INVESTMENT FDC*
FEES PAID PROFESSIONALS PAID TO FDC PROFESSIONALS
TO FDC
TECHNOQUANT GROWTH $ 8 $ 0 $ 8 $ 2 $ 0 $ 2
MID CAP 84 0 84 28 0 28
EQUITY GROWTH 281 0 281 94 0 94
GROWTH OPPORTUNITIES 1,701 0 1,701 567 0 567
LARGE CAP 12 0 12 2 0 2
GROWTH & INCOME 113 0 113 38 0 38
EQUITY INCOME 192 0 192 64 0 64
EMERGING MARKETS INCOME 35 0 35 12 0 12
STRATEGIC INCOME 354 0 354 118 0 118
INTERMEDIATE BOND 41 0 41 14 0 14
INTERMEDIATE MUNICIPAL INCOME 4 0 4 2 0 2
</TABLE>
* Amounts are retained by FDC for use in its capacity as distributor.
THE FOLLOWING CHART REPLACES THE SIMILAR CHART FOUND IN THE
"DISTRIBUTION AND SERVICE PLANS" SECTION ON PAGE 143.
The Plans were approved by the shareholders of each class on the dates
shown in the table below:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
DATE OF SHAREHOLDER APPROVAL
FUND CLASS A CLASS T CLASS B INSTITUTIONAL
TECHNOQUANT GROWTH 12/23/96 12/23/96 12/23/96 12/23/96
OVERSEAS 08/30/96 09/17/97 06/30/95 06/30/95
MID CAP 08/30/96 01/18/96 01/18/96 01/18/96
EQUITY GROWTH 08/30/96 07/16/97 * 09/26/86
GROWTH OPPORTUNITIES 08/30/96 01/01/95 * 06/30/95
STRATEGIC OPPORTUNITIES 08/30/96 06/18/97 06/18/97 06/30/95
LARGE CAP 08/30/96 01/18/96 01/18/96 01/18/96
GROWTH & INCOME 12/23/96 12/23/96 12/23/96 12/23/96
EQUITY INCOME 08/30/96 11/18/98 11/18/98 07/23/86
BALANCED 08/30/96 01/01/95 * 06/30/95
EMERGING MARKETS INCOME 08/30/96 06/18/97 06/18/97 06/30/95
HIGH YIELD 08/30/96 01/01/95 01/01/95 06/30/95
STRATEGIC INCOME 08/30/96 10/14/94 10/14/94 06/30/95
GOVERNMENT INVESTMENT 08/30/96 01/01/95 01/01/95 06/30/95
INTERMEDIATE BOND 08/30/96 01/01/95 01/01/95 11/26/86
MORTGAGE SECURITIES * * * *
SHORT FIXED-INCOME 08/30/96 01/01/95 ** 06/30/95
MUNICIPAL INCOME 08/30/96 12/01/94 12/01/94 06/30/95
INTERMEDIATE MUNICIPAL INCOME 08/30/96 07/01/95 07/01/95 11/05/86
SHORT-INTERMEDIATE MUNICIPAL INCOME 08/30/96 07/01/95 ** 06/30/95
</TABLE>
* Not applicable.
** Class B is not available for this fund.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"CONTRACTS WITH FMR AFFILIATES" SECTION ON PAGE 144.
FSC also collects small account fees from certain accounts with
balances of less than $2,500.
THE FOLLOWING INFORMATION REPLACES THE SEVENTH PARAGRAPH FOUND UNDER
"CONTRACTS WITH FMR AFFILIATES" ON PAGE 144.
Each of the taxable funds has entered into a service agent agreement
with FSC. Under the terms of the agreements, FSC calculates the NAV
and dividends for each class of each fund, maintains each fund's
portfolio and general accounting records, and administers each fund's
securities lending program.
THE FOLLOWING INFORMATION REPLACES THE FIRST PARAGRAPH UNDER THE
HEADING "SHAREHOLDER AND TRUSTEE LIABILITY" IN THE "DESCRIPTION OF THE
TRUSTS" SECTION ON PAGE 153.
SHAREHOLDER AND TRUSTEE LIABILITY. Each trust is an entity of the type
commonly known as a "Massachusetts business trust." Under
Massachusetts law, shareholders of such a trust may, under certain
circumstances, be held personally liable for the obligations of the
trust. Each Declaration of Trust (except for Fidelity Advisor Series
II, Fidelity Advisor Series IV and Fidelity Income Fund) provides that
the trust shall not have any claim against shareholders except for the
payment of the purchase price of shares and requires that each
agreement, obligation, or instrument entered into or executed by the
trust or its Trustees shall include a provision limiting the
obligations created thereby to the trust and its assets. Fidelity
Advisor Series II's, Fidelity Advisor Series IV's and Fidelity Income
Fund's Declaration of Trust provides that each trust shall not have
any claim against shareholders except for the payment of the purchase
price of shares and requires that each agreement, obligation, or
instrument entered into or executed by the trust or the Trustees shall
include a provision limiting the obligations created thereby to the
trust or to one or more funds and its or their assets. Each
Declaration of Trust provides for indemnification out of each fund's
property of any shareholder held personally liable for the obligations
of the fund. Each Declaration of Trust also provides that its funds
shall, upon request, assume the defense of any claim made against any
shareholder for any act or obligation of the fund and satisfy any
judgment thereon. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability is limited to circumstances
in which the fund itself would be unable to meet its obligations. FMR
believes that, in view of the above, the risk of personal liability to
shareholders is remote.
THE FOLLOWING INFORMATION REPLACES THE "VOTING RIGHTS" SECTION FOUND
UNDER "DESCRIPTION OF THE TRUSTS" ON PAGE 153.
VOTING RIGHTS. Each fund's capital consists of shares of beneficial
interest. As a shareholder, you receive one vote for each dollar value
of net asset value you own. The shares have no preemptive rights, and
Class A, Class T, Class C, Institutional Class, and Initial Class
shares have no conversion rights; the voting and dividend rights, the
conversion rights of Class B shares, the right of redemption, and the
privilege of exchange are described in the Prospectus. Shares are
fully paid and nonassessable, except as set forth under the heading
"Shareholder and Trustee Liability" above. Shareholders representing
10% or more of a trust, a fund, or class of a fund may, as set forth
in the Declaration of Trust, call meetings of a trust, fund or class,
as applicable, for any purpose related to the trust, fund, or class,
as the case may be, including, in the case of a meeting of an entire
trust, the purpose of voting on removal of one or more Trustees. Each
trust (except Fidelity Advisor Series II, Fidelity Advisor Series IV
and Fidelity Income Fund) or fund (except Balanced, Government
Investment, High Yield, Intermediate Bond, Mortgage Securities, Short
Fixed-Income, and Strategic Income) may be terminated upon the sale of
their assets to another open-end management investment company, or
upon liquidation and distribution of its assets, if approved by vote
of the holders of a majority of the trust or the fund, as determined
by the current value of each shareholder's investment in the funds or
trusts. Fidelity Advisor Series II, Fidelity Advisor Series IV and
Fidelity Income Fund or any of their respective funds may be
terminated upon sale of their assets to, or merger with, another
open-end management investment company or series thereof, or upon
liquidation and distribution of their assets. Generally, the merger of
a trust or a fund with another entity or the sale of substantially all
of the assets of a trust or a fund to another entity requires the vote
of a majority of the outstanding shares of a trust or a fund, as
determined by the current value of each shareholder's investment in
the fund or trust. The Trustees of Fidelity Advisor Series II,
Fidelity Advisor Series IV and Fidelity Income Fund may, however,
reorganize or terminate each trust or any fund without prior
shareholder approval. If not so terminated, each trust and fund will
continue indefinitely. Each fund (except Municipal Bond) may invest
all of their assets in another investment company.
