FIDELITY ADVISOR
INTERNATIONAL
CAPITAL APPRECIATION
FUND - CLASS A, CLASS T, CLASS B
AND CLASS C
SEMIANNUAL REPORT
APRIL 30, 1999
(2_FIDELITY_LOGOS)(registered trademark)
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over
time.
FUND TALK 12 The manager's review of fund
performance, strategy and
outlook.
INVESTMENT CHANGES 15 A summary of major shifts in
the fund's investments over
the past six months.
INVESTMENTS 16 A complete list of the fund's
investments with their
market values.
FINANCIAL STATEMENTS 23 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 32 Notes to the financial
statements.
Third party marks appearing herein are the property of their
respective owners.
All other marks appearing herein are registered or unregistered
trademarks or service marks of FMR Corp. or an affiliated company.
This report is printed on recycled paper using soy-based inks.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION
OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS
IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT
INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY ADVISOR FUND, INCLUDING CHARGES
AND EXPENSES, CONTACT YOUR
INVESTMENT PROFESSIONAL FOR A FREE PROSPECTUS. READ IT CAREFULLY
BEFORE YOU INVEST OR SEND MONEY.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
With 13 record-high closings, the Dow Jones Industrial Average surged
nearly 1,000 points in April. What's particularly noteworthy about
this performance is that, in some cases, gains were fueled by a
rotation out of growth stocks and into issues more sensitive to
economic swings. The strength in blue chips, combined with heavy
global, corporate and agency bond issuance, contributed to the
downward pressure on government security prices.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will
greatly reduce your vulnerability to any single decline. We know from
experience, for example, that stock prices have gone up over longer
periods of time, have significantly outperformed other types of
investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through
diversification. A stock mutual fund, for instance, is already
diversified, because it invests in many different companies. You can
increase your diversification further by investing in a number of
different stock funds, or in such other investment categories as
bonds. If you have a short investment time horizon, you might want to
consider moving some of your investment into a money market fund,
which seeks income and a stable share price by investing in
high-quality, short-term investments. Of course, it's important to
remember that an investment in a money market fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although money market funds seek to preserve the
value of your investment at $1.00 per share, it is possible to lose
money by investing in these types of funds.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases. Of course, you should
consider your financial ability to continue your purchases through
periods of low price levels before undertaking such a strategy.
Remember to contact your investment professional if you need help with
your investments.
Best regards,
Edward C. Johnson 3d
FIDELITY ADVISOR INTERNATIONAL CAPITAL APPRECIATION FUND - CLASS A
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can
look at the total percentage change in value, the average annual
percentage change or the growth of a hypothetical $10,000 investment.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). If Fidelity had not reimbursed certain class expenses, the
total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED APRIL 30, 1999 PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
FIDELITY ADV INTL CAP APP - 25.62% 7.20% 26.50%
CL A
FIDELITY ADV INTL CAP APP - 18.40% 1.04% 19.23%
CL A (INCL. 5.75% SALES
CHARGE)
MSCI World ex US 17.17% 7.48% 20.94%
International Funds Average 15.11% 3.24% n/a
CUMULATIVE TOTAL RETURNS show Class A's performance in percentage
terms over a set period - in this case, six months, one year or since
the fund started on November 3, 1997. For example, if you had invested
$1,000 in a fund that had a 5% return over the past year, the value of
your investment would be $1,050. You can compare Class A's returns to
the performance of the Morgan Stanley Capital International AC World
Index Free ex USA - a market capitalization-weighted index that is
designed to represent the performance of developed stock markets,
excluding the United States, throughout the world. To measure how the
fund's performance stacked up against its peers, you can compare it to
the international funds average, which reflects the performance of
mutual funds with similar objectives tracked by Lipper Inc. The past
six months average represents a peer group of 597 mutual funds. These
benchmarks include reinvested dividends and capital gains, if any, and
exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED APRIL 30, 1999 PAST 1 YEAR LIFE OF FUND
FIDELITY ADV INTL CAP APP - 7.20% 17.11%
CL A
FIDELITY ADV INTL CAP APP - 1.04% 12.54%
CL A (INCL. 5.75% SALES
CHARGE)
MSCI World ex US 7.48% 13.63%
International Funds Average 3.24% n/a
AVERAGE ANNUAL TOTAL RETURNS take Class A shares' cumulative return
and show you what would have happened if Class A shares had performed
at a constant rate each year.
$10,000 OVER LIFE OF FUND
FA Intl Cap App -CL A MS AC World ex USA
00288 MS025
1997/11/03 9425.00 10000.00
1997/11/30 9179.95 9717.68
1997/12/31 9368.45 9829.52
1998/01/31 9641.78 10123.55
1998/02/28 10282.68 10799.04
1998/03/31 10867.03 11172.17
1998/04/30 11121.50 11252.19
1998/05/31 11093.23 11048.13
1998/06/30 10914.15 11006.60
1998/07/31 11140.35 11111.22
1998/08/31 8963.18 9544.28
1998/09/30 8802.95 9342.67
1998/10/31 9490.98 10321.30
1998/11/30 9990.50 10875.96
1998/12/31 10292.10 11250.66
1999/01/31 10508.88 11238.61
1999/02/28 10376.93 10986.98
1999/03/31 11310.00 11517.44
1999/04/30 11922.63 12093.51
IMATRL PRASUN SHR__CHT 19990430 19990525 144111 R00000000000021
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor International Capital Appreciation Fund -
Class A on November 3, 1997, when the fund started, and the current
5.75% sales charge was paid. As the chart shows, by April 30, 1999,
the value of the investment would have grown to $11,923 - a 19.23%
increase on the initial investment. For comparison, look at how the
Morgan Stanley Capital International AC World Index Free ex USA did
over the same period. With dividends reinvested, the same $10,000
would have grown to $12,094 - a 20.94% increase.
(checkmark)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.
FIDELITY ADVISOR INTERNATIONAL CAPITAL APPRECIATION FUND - CLASS T
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can
look at the total percentage change in value, the average annual
percentage change or the growth of a hypothetical $10,000 investment.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). If Fidelity had not reimbursed certain class expenses, the
total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED APRIL 30, 1999 PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
FIDELITY ADV INTL CAP APP - 25.80% 7.22% 26.30%
CL T
FIDELITY ADV INTL CAP APP - 21.39% 3.46% 21.88%
CL T (INCL. 3.50% SALES
CHARGE)
MSCI World ex US 17.17% 7.48% 20.94%
International Funds Average 15.11% 3.24% n/a%
CUMULATIVE TOTAL RETURNS show Class T's performance in percentage
terms over a set period - in this case, six months, one year or since
the fund started on November 3, 1997. For example, if you had invested
$1,000 in a fund that had a 5% return over the past year, the value of
your investment would be $1,050. You can compare Class T's returns to
the performance of the Morgan Stanley Capital International AC World
Index Free ex USA - an unmanaged, market capitalization weighted index
that is designed to represent the performance of developed stock
markets, excluding the United States, throughout the world. To measure
how the fund's performance stacked up against its peers, you can
compare it to the international funds average, which reflects the
performance of mutual funds with similar objectives tracked by Lipper
Inc. The past six months average represents a peer group of 597 mutual
funds. These benchmarks include reinvested dividends and capital
gains, if any, and exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED APRIL 30, 1999 PAST 1 YEAR LIFE OF FUND
FIDELITY ADV INTL CAP APP - 7.22% 16.99%
CL T
FIDELITY ADV INTL CAP APP - 3.46% 14.22%
CL T (INCL. 3.50% SALES
CHARGE)
MSCI World ex US 7.48% 13.63%
International Funds Average 3.24% n/a
AVERAGE ANNUAL TOTAL RETURNS take Class T shares' cumulative return
and show you what would have happened if Class T shares had performed
at a constant rate each year.
$10,000 OVER LIFE OF FUND
FA Intl Cap App -CL T MS AC World ex USA
00292 MS025
1997/11/03 9650.00 10000.00
1997/11/30 9399.10 9717.68
1997/12/31 9592.10 9829.52
1998/01/31 9862.30 10123.55
1998/02/28 10518.50 10799.04
1998/03/31 11116.80 11172.17
1998/04/30 11367.70 11252.19
1998/05/31 11338.75 11048.13
1998/06/30 11145.75 11006.60
1998/07/31 11377.35 11111.22
1998/08/31 9148.20 9544.28
1998/09/30 8993.80 9342.67
1998/10/31 9688.60 10321.30
1998/11/30 10200.05 10875.96
1998/12/31 10508.85 11250.66
1999/01/31 10721.15 11238.61
1999/02/28 10586.05 10986.98
1999/03/31 11541.40 11517.44
1999/04/30 12187.95 12093.51
IMATRL PRASUN SHR__CHT 19990430 19990525 145217 R00000000000021
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor International Capital Appreciation Fund -
Class T on November 3, 1997, when the fund started, and the current
3.50% sales charge was paid. As the chart shows, by April 30, 1999,
the value of the investment would have grown to $12,188 - a 21.88%
increase on the initial investment. For comparison, look at how the
Morgan Stanley Capital International AC World Index Free ex USA did
over the same period. With dividends reinvested, the same $10,000
would have grown to $12,094 - a 20.94% increase.
(checkmark)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.
FIDELITY ADVISOR INTERNATIONAL CAPITAL APPRECIATION FUND - CLASS B
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can
look at the total percentage change in value, the average annual
percentage change or the growth of a hypothetical $10,000 investment.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). Class B's contingent deferred sales charges included in the
past six months, past one year and life of fund total return figures
are 5%, 5% and 4%, respectively. If Fidelity had not reimbursed
certain class expenses, the total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED APRIL 30, 1999 PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
FIDELITY ADV INTL CAP APP - 25.13% 6.38% 25.00%
CL B
FIDELITY ADV INTL CAP APP - 20.13% 1.38% 21.00%
CL B (INCL. CONTINGENT
DEFERRED SALES CHARGE)
MSCI World ex US 17.17% 7.48% 20.94%
International Funds Average 15.11% 3.24% n/a
CUMULATIVE TOTAL RETURNS show Class B's performance in percentage
terms over a set period - in this case, six months, one year or since
the fund started on November 3, 1997. For example, if you had invested
$1,000 in a fund that had a 5% return over the past year, the value of
your investment would be $1,050. You can compare Class B's returns to
the performance of the Morgan Stanley Capital International AC World
Index Free ex USA - a market capitalization-weighted index that is
designed to represent the performance of developed stock markets,
excluding the United States, throughout the world. To measure how the
fund's performance stacked up against its peers, you can compare it to
the international funds average, which reflects the performance of
mutual funds with similar objectives tracked by Lipper Inc. The past
six months average represents a peer group of 597 mutual funds. These
benchmarks include reinvested dividends and capital gains, if any, and
exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED APRIL 30, 1999 PAST 1 YEAR LIFE OF FUND
FIDELITY ADV INTL CAP APP - 6.38% 16.18%
CL B
FIDELITY ADV INTL CAP APP - 1.38% 13.67%
CL B (INCL. CONTINGENT
DEFERRED SALES CHARGE)
MSCI World ex US 7.48% 13.63%
International Funds Average 3.24% 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.
$10,000 OVER LIFE OF FUND
FA Intl Cap App -CL B MS AC World ex USA
00290 MS025
1997/11/03 10000.00 10000.00
1997/11/30 9730.00 9717.68
1997/12/31 9930.00 9829.52
1998/01/31 10200.00 10123.55
1998/02/28 10870.00 10799.04
1998/03/31 11490.00 11172.17
1998/04/30 11750.00 11252.19
1998/05/31 11710.00 11048.13
1998/06/30 11510.00 11006.60
1998/07/31 11740.00 11111.22
1998/08/31 9440.00 9544.28
1998/09/30 9270.00 9342.67
1998/10/31 9990.00 10321.30
1998/11/30 10510.00 10875.96
1998/12/31 10820.00 11250.66
1999/01/31 11040.00 11238.61
1999/02/28 10890.00 10986.98
1999/03/31 11870.00 11517.44
1999/04/30 12100.00 12093.51
IMATRL PRASUN SHR__CHT 19990430 19990525 160115 R00000000000021
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor International Capital Appreciation Fund -
Class B on November 3, 1997, when the fund started. As the chart
shows, by April 30, 1999, the value of the investment, including the
effect of the applicable contingent deferred sales charge, would have
grown to $12,100 - a 21.00% increase on the initial investment. For
comparison, look at how the Morgan Stanley Capital International AC
World Index Free ex USA did over the same period. With dividends
reinvested, the same $10,000 would have grown to $12,094 - a 20.94%
increase.
(checkmark)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.
FIDELITY ADVISOR INTERNATIONAL CAPITAL APPRECIATION FUND - CLASS C
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can
look at the total percentage change in value, the average annual
percentage change or the growth of a hypothetical $10,000 investment.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). Class C's contingent deferred sales charges included in the
past six months, past one year and life of fund total return figures
are 1%, 1% and 0%, respectively. If Fidelity had not reimbursed
certain class expenses, the total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED APRIL 30, 1999 PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
FIDELITY ADV INTL CAP APP - 25.25% 6.38% 25.00%
CL C
FIDELITY ADV INTL CAP APP - 24.25% 5.38% 25.00%
CL C (INCL. CONTINGENT
DEFERRED SALES CHARGE)
MSCI World ex US 17.17% 7.48% 20.94%
International Funds Average 15.11% 3.24% n/a
CUMULATIVE TOTAL RETURNS show Class C's performance in percentage
terms over a set period - in this case, six months, one year or since
the fund started on November 3, 1997. For example, if you had invested
$1,000 in a fund that had a 5% return over the past year, the value of
your investment would be $1,050. You can compare Class C's returns to
the performance of the Morgan Stanley Capital International AC World
Index Free ex USA - an market capitalization-weighted index that is
designed to represent the performance of developed stock markets,
excluding the United States, throughout the world. To measure how the
fund's performance stacked up against its peers, you can compare it to
the international funds average, which reflects the performance of
mutual funds with similar objectives tracked by Lipper Inc. The past
six months average represents a peer group of 597 mutual funds. These
benchmarks include reinvested dividends and capital gains, if any, and
exclude the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED APRIL 30, 1999 PAST 1 YEAR LIFE OF FUND
FIDELITY ADV INTL CAP APP - 6.38% 16.18%
CL C
FIDELITY ADV INTL CAP APP - 5.38% 16.18%
CL C (INCL. CONTINGENT
DEFERRED SALES CHARGE)
MSCI World ex US 7.48% 13.63%
International Funds Average 3.24% n/a
AVERAGE ANNUAL TOTAL RETURNS take Class C shares' cumulative return
and show you what would have happened if Class C shares had performed
at a constant rate each year.
$10,000 OVER LIFE OF FUND
FA Intl Cap App -CL C MS AC World ex USA
00281 MS025
1997/11/03 10000.00 10000.00
1997/11/30 9730.00 9717.68
1997/12/31 9930.00 9829.52
1998/01/31 10210.00 10123.55
1998/02/28 10880.00 10799.04
1998/03/31 11490.00 11172.17
1998/04/30 11750.00 11252.19
1998/05/31 11710.00 11048.13
1998/06/30 11510.00 11006.60
1998/07/31 11740.00 11111.22
1998/08/31 9440.00 9544.28
1998/09/30 9270.00 9342.67
1998/10/31 9980.00 10321.30
1998/11/30 10500.00 10875.96
1998/12/31 10820.00 11250.66
1999/01/31 11030.00 11238.61
1999/02/28 10880.00 10986.98
1999/03/31 11850.00 11517.44
1999/04/30 12500.00 12093.51
IMATRL PRASUN SHR__CHT 19990430 19990525 145253 R00000000000021
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor International Capital Appreciation Fund -
Class C on November 3, 1997, when the fund started. As the chart
shows, by April 30, 1999, the value of the investment, including the
effect of the applicable contingent deferred sales charge, would have
grown to $12,500 - a 25.00% increase on the initial investment. For
comparison, look at how the Morgan Stanley Capital International AC
World Index Free ex USA did over the same period. With dividends
reinvested, the same $10,000 would have grown to $12,094 - a 20.94%
increase.
(checkmark)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.
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
In recent months, the black cloud
hanging over many global
economies last fall began to give
way to brighter forecasts. Although
it is too soon to tell whether rallies in
Latin America, Japan and Asia are
sustainable, they did represent an
important turning point. During the
six-month period ending April 30,
1999, the Morgan Stanley Capital
International EAFE Index - which
measures the performance of stock
markets in Europe, Australasia and
the Far East - returned 15.40%.
While the global economy still has
many obstacles to overcome,
government initiatives to aid banks,
corporate restructuring in Japan
and stable currencies in Asia and
emerging markets improved investor
sentiment. Turning to Europe, the
indexes posted mixed results as
volatility prevailed. Toward the end
of 1998, European stocks surged in
response to a strong U.S. market,
increased merger and acquisition
activity and enthusiasm about the
European Union's single currency
- - the euro. Many European markets
stalled in 1999, however, as the
outlook for economic growth and
corporate profits deteriorated. The
U.K. stock market was among the
strongest performers in Europe as
the economy improved amid a
favorable environment of declining
interest rates and encouraging
earnings growth. Elsewhere, positive
economic developments in the form
of lower-than-expected inflation
reports and signs that commodity
prices had bottomed fueled optimism
in Brazil and Mexico.
(photograph of Kevin McCarey)
An interview with Kevin McCarey, Portfolio Manager of Fidelity Advisor
International Capital Appreciation Fund
Q. HOW DID THE FUND PERFORM, KEVIN?
A. For the six months that ended April 30, 1999, the fund's Class A,
Class T, Class B and Class C shares returned 25.62%, 25.80%, 25.13%
and 25.25%, respectively. The Morgan Stanley Capital International AC
World Index Free ex USA returned 17.17% during that time. The
international funds average - as tracked by Lipper Inc. - had a
six-month return of 15.11% as of April 30, 1999. For the 12 months
that ended April 30, 1999, the fund's Class A, Class T, Class B and
Class C shares returned 7.20%, 7.22%, 6.38% and 6.38%, respectively.
The Morgan Stanley index and Lipper group had 12-month returns of
7.48% and 3.24%, respectively, as of April 30, 1999.
Q. WHAT FACTORS FIGURED INTO THE FUND'S PERFORMANCE?
A. From a positive standpoint, the fund's positions in Japanese
small-cap stocks (SEE CALLOUT BOX ON PAGE 8) helped performance, as
did its exposure to emerging markets such as Taiwan and Mexico.
Specifically, the fund benefited from investments in Taiwanese
electronics stocks - such as Taiwan Semiconductor Manufacturing - as
well as several Mexican banks. The fund also was helped by an
underweighting in Europe, which had a tough time during the period.
Much of this difficulty stemmed from general economic weakness
throughout Europe, as well as the depreciation of the euro. As of
April 30, the euro - the new uniform currency of 11 European nations -
was down around 9% for 1999. This contrasted sharply with the rosy
U.S. economic picture and strong dollar. Lastly, the fund benefited
from its exposure to United Kingdom-based cyclical stocks - or stocks
that tend to mirror the ups and downs of the economy. Examples here
included advertising agency Saatchi & Saatchi as well as large
retailer Dixons, both mid-cap stocks.
Q. EUROPEAN PHARMACEUTICAL STOCKS ENDURED A TOUGH STRETCH DURING THE
PERIOD. WHAT HAPPENED TO THIS GROUP?
A. High valuations, very little new product excitement and
deteriorating fundamentals equaled trouble. Swiss-based drug maker
Novartis, for instance - the fund's largest individual position at the
start of the period - experienced disappointing sales growth and its
share price became a bit too rich. During the course of the period, I
sold the fund's stake in Novartis. High valuations also harmed the
companies that were doing well, including U.K.-based Glaxo Wellcome.
That being said, I still held a favorable view on drug stocks such as
the U.K.'s SmithKline Beecham - which I felt should experience
accelerating sales growth - as well as France's Sanofi, which was in
the process of merging with another company.
Q. YOU INCREASED THE FUND'S LATIN AMERICAN EXPOSURE DURING THE PERIOD.
WHAT WAS THE ATTRACTION?
A. Most of that is probably due to my play on Mexican banks and the
fact that short-term interest rates in Mexico have gone down over the
past six months. With lower rates - and improving business profiles -
I felt the economy would pick up and banks such as Banacci and Grupo
Financiero Bancomer would have fewer problem loans in their
portfolios. This strategy worked nicely for the fund, as each of these
two stocks generated positive results.
Q. WHICH OTHER INDIVIDUAL STOCKS PERFORMED WELL? WHICH PROVED
DISAPPOINTING?
A. Two of the fund's best performers were energy companies BP Amoco -
based in the U.K. - and France's Elf Aquitaine. Both companies
benefited handsomely from the rise in oil prices, which had hovered at
or near all-time lows through the first half of the period.
Telecommunications stocks such as Finland's Nokia and Germany's
Deutsche Telekom also performed well. Nokia continued to benefit from
the demand for mobile communications, while Deutsche Telekom -
Europe's largest Internet provider - took advantage of the popularity
of the Internet. Disappointments included food company Nestle, which
didn't meet its unit growth target, and Allianz, a Germany-based
insurance company whose stock price tends to move in line with bond
prices. Bond prices fell during the period.
Q. WHAT'S YOUR OUTLOOK?
A. I'm reasonably optimistic about the U.K. market's prospects -
particularly on the mid-cap side - and will continue to look for good
opportunities there in the coming months. Japan has been encouraging
of late, but whether their market upturn can be sustained is another
question. I'll continue to keep a close eye on developments in Japan.
We should continue to see volatility in many emerging-market regions,
but overall they appear to have seen their worst economic conditions.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER AND DO NOT NECESSARILY REPRESENT THE VIEWS OF FIDELITY OR
ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH VIEWS ARE
SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER CONDITIONS
AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE
VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE
INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS
FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY FIDELITY FUND.
(checkmark)FUND FACTS
GOAL: seeks capital
appreciation by investing in
securities of foreign issuers
START DATE: November 3,
1997
SIZE: as of April 30, 1999,
more than $35 million
MANAGER: Kevin McCarey,
since inception; joined
Fidelity in 1985
KEVIN MCCAREY TALKS
ABOUT POSITIVE
DEVELOPMENTS IN JAPAN:
"As many investors are aware, the
Japanese economy has struggled
mightily over the past few years.
Events of this period, however,
suggest that Japan may be finally
turning a corner.
"There were a couple of factors
behind this market improvement.
First, I think investors were eagerly
anticipating some type of positive
news to come out of Japan. Many
had fallen in love with Europe over
the past few years and the shine
was beginning to wear off there.
When good news began to trickle
out of Japan, a lot of investors
jumped on board. Second, we've
seen somewhat of a dramatic shift
- - at least by Japanese standards
- - of companies talking about
restructuring. This has been
spurred by the Japanese
government's willingness to provide
funds to corporations for
improvement measures.
"Small Japanese companies in
particular have performed well. I've
found that many of these smaller
companies tend to be partly owned
by family members and there seems
to be a strong interest in the
direction of the company's share
price. The fund took advantage of
this small-cap performance,
receiving good results from names
such as Paris Miki - a retail
optical chain - and retailer Don
Quijote."
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C>
TOP FIVE STOCKS AS OF APRIL
30, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE STOCKS 6 MONTHS AGO
DDI Corp. (Japan, Telephone 3.0 0.0
Services)
Banacci SA de CV (Mexico, 2.9 0.0
Banks)
Aiful Corp. (Japan, Credit & 2.4 0.0
Other Finance)
Arcadia Group PLC (United 2.0 0.0
Kingdom, Apparel Stores)
Nikko Securities Co. Ltd. 1.7 0.0
(Japan, Securities Industry)
TOP FIVE MARKET SECTORS AS OF
APRIL 30, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE MARKET SECTORS 6
MONTHS AGO
FINANCE 28.4 21.4
UTILITIES 14.5 18.7
TECHNOLOGY 8.6 5.4
RETAIL & WHOLESALE 7.0 4.3
DURABLES 7.0 4.3
TOP FIVE COUNTRIES AS OF
APRIL 30, 1999
(EXCLUDING CASH EQUIVALENTS) % OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE COUNTRIES 6 MONTHS AGO
Japan 28.6 14.0
United Kingdom 15.4 20.7
France 8.4 11.9
Taiwan 6.3 0.0
Germany 5.7 9.5
</TABLE>
PERCENTAGES ARE ADJUSTED FOR THE EFFECT OF OPEN FUTURES CONTRACTS, IF
APPLICABLE.
ASSET ALLOCATION (% OF FUND'S
INVESTMENTS)
AS OF APRIL 30, 1999
Stocks and Investment
Companies 95.8%
Short-term
investments 4.2%
Row: 1, Col: 1, Value: 4.2
Row: 1, Col: 2, Value: 95.8
AS OF OCTOBER 31, 1998
Stocks and Investment
Companies 92.1%
Short-term
investments 7.9%
Row: 1, Col: 1, Value: 7.9
Row: 1, Col: 2, Value: 92.09999999999999
INVESTMENTS APRIL 30, 1999 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 94.6%
SHARES VALUE (NOTE 1)
AUSTRALIA - 1.1%
Australia & New Zealand 33,000 $ 261,240
Banking Group Ltd.
News Corp. Ltd. sponsored ADR 3,500 114,188
375,428
BELGIUM - 0.3%
Electrabel SA 350 115,658
BRAZIL - 0.3%
Tele Centro Sul Participacoes 1,000 53,125
SA sponsored ADR (a)
Tele Leste Celular 1,000 35,875
Participacoes SA sponsored
ADR
Tele Nordeste Celular 1,000 22,000
Participacoes SA sponsored
ADR (a)
111,000
CANADA - 3.9%
Celestica, Inc. (sub-vtg.) (a) 4,000 159,231
CGI Group, Inc. Class A (sub. 8,000 197,666
vtg.) (a)
Cinar Films, Inc. Class B 3,000 62,625
(sub. vtg.) (a)
Cogeco Cable, Inc. 15,000 303,706
Nortel Networks Corp. 100 6,795
Power Corp. of Canada 10,000 187,371
Rogers Communications, Inc. 5,000 93,686
Class B (non-vtg.) (a)
Shaw Communications, Inc. 2,600 107,069
Class B
Videotron Group Ltd. (sub. 12,000 245,436
vtg.)
1,363,585
CZECH REPUBLIC - 0.1%
SPT Telecom AS (a) 1,300 18,885
FINLAND - 1.7%
OY Nokia AB sponsored ADR 5,800 430,288
Sonera Group PLC 3,100 61,707
UPM-Kymmene Corp. 3,000 91,004
582,999
FRANCE - 8.4%
AXA SA de CV 1,400 181,140
Banque Nationale de Paris 4,800 398,702
Cap Gemini SA 800 122,567
Castorama Dubois 700 167,873
Investissements SA
Compagnie de St. Gobain 380 65,381
Compagnie Financiere de 1,900 202,379
Paribas Class A (Reg.)
Compagnie Generale de 4,600 48,300
Geophysique SA sponsored ADR
(a)
Elf Aquitaine 2,800 437,500
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
FRANCE - CONTINUED
France Telecom SA 2,000 $ 161,891
Groupe Danone 800 214,301
Havas Advertising SA 450 91,480
Rhone-Poulenc SA Class A 700 32,987
Sanofi SA 800 125,616
Suez Lyonnaise des Eaux 1,200 204,560
Television Francaise 1 SA 800 156,702
(T.F.1)
Vivendi SA 1,200 280,921
2,892,300
GERMANY - 5.0%
Allianz AG (Reg.) 450 141,509
DaimlerChrysler AG (Reg.) 3,400 333,838
Deutsche Telekom AG 7,700 304,179
Fresenius Medical Care AG 2,600 46,800
sponsored ADR
Mannesmann AG 4,100 536,558
Metro AG 1,000 70,950
Primacom AG (a) 2,800 121,550
Schering AG 200 23,082
Wella AG 250 165,438
1,743,904
HONG KONG - 3.1%
Dah Sing Financial Holdings 162,000 510,998
Ltd.
Hengan International Group 56,000 18,784
Co. Ltd. (a)(c)
Johnson Electric Holdings 20,000 59,732
Ltd.
Li & Fung Ltd. 40,000 98,048
Wing Hang Bank Ltd. 120,000 366,906
1,054,468
INDIA - 1.1%
Dr. Reddy's Laboratories Ltd. 4,000 82,224
(a)
Pentafour Software & Exports 12,000 287,344
Ltd.
369,568
IRELAND - 0.5%
Bank of Ireland, Inc. 6,000 120,148
Elan Corp. PLC sponsored ADR 800 41,200
(a)
161,348
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
ITALY - 2.6%
Assicurazioni Generali Spa 5,500 $ 214,476
Banca Commerciale Italiana Spa 32,800 271,370
Mondadori (Arnoldo) Editore 3,200 56,860
Spa
Olivetti & Co. Spa 19,100 66,493
Telecom Italia Spa 27,000 286,705
895,904
JAPAN - 28.6%
Aiful Corp. 10,000 818,395
Banyu Pharmaceutical Co. Ltd. 6,000 110,571
DDI Corp. 210 1,043,132
Fancl Corp. 2,600 370,246
Fuji Bank Ltd. 60,000 468,420
Fuji Coca-Cola Bottling Co. 9,000 124,393
Ltd.
Funai Electric Co. Ltd. 3,000 403,334
Godo Steel Ltd. (a) 80,000 87,117
Honda Motor Co. Ltd. 8,000 353,500
Ichiyoshi Securities Co. Ltd. 70,000 225,163
Japan Business Computer Co. 30,000 472,441
Ltd.
JCR Pharmaceuticals Co. Ltd. 20,000 261,350
Kokusai Denshin Denwa 9,000 545,820
Konami Co. Ltd. 3,600 126,654
Kyocera Corp. 4,000 237,561
Maeda Road Construction Co. 40,000 264,031
Ltd.
Matsushita Electric 12,000 228,179
Industrial Co. Ltd.
Mitsubishi Trust & Banking 20,000 219,467
Corp.
Nichii Gakkan Co. 450 35,056
Nikko Securities Co. Ltd. 100,000 573,798
Nippon System Development Co. 3,500 178,841
Nippon Zeon Co. Ltd. 60,000 398,057
Paris Miki, Inc. 3,640 121,354
Senshukai Co. Ltd. 40,000 439,270
Sony Music Entertainment Ltd. 3,000 218,630
Square Co. Ltd. 3,600 129,670
Sumitomo Forestry Co. Ltd. 30,000 223,656
Sumitomo Realty & Development 90,000 392,779
Co. Ltd.
Takeda Chemical Industries 6,000 260,848
Ltd.
THK Co. Ltd. 13,000 225,415
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
JAPAN - CONTINUED
Yamaha Motor Co. Ltd. 25,000 $ 201,248
Yamanouchi Pharmaceutical Co. 4,000 126,654
Ltd.
9,885,050
KOREA (SOUTH) - 0.4%
Medison Co. Ltd. 11,000 123,096
LUXEMBOURG - 0.2%
Stolt Comex Seaway SA 4,350 54,375
MALAYSIA - 0.0%
Berjaya Sports Toto BHD 10,000 17,105
MEXICO - 5.3%
Banacci SA de CV Class O (a) 400,000 1,012,359
Corporacion Geo SA de CV (a) 43,000 179,764
Empresas ICA Sociedad 28,200 185,063
Controladora SA de CV
sponsored ADR
Grupo Financiero Bancomer SA 1,000,000 343,901
de CV Series A
Grupo Financiero Probursa SA 860,000 109,060
de CV (a)
1,830,147
NETHERLANDS - 3.1%
ABN AMRO Holding NV 4,600 109,829
ASM Lithography Holding N V 1,400 54,600
(a)
Fortis Amev NV 7,500 267,612
ING Groep NV 3,500 216,048
Koninklijke (Royal) Philips 1,600 138,068
Electronics NV
Koninklijke Ahold NV 3,600 133,981
Koninklijke KPN NV 2,100 87,827
STMicroelectronics NV (a) 300 30,600
Vendex NV CVA 1,800 44,883
1,083,448
RUSSIA - 0.0%
Vimpel Communications 1,000 16,500
sponsored ADR (a)
SINGAPORE - 0.2%
Natsteel Electronics Ltd. 18,000 60,495
SPAIN - 2.3%
Banco Santander Central 11,460 249,472
Hispano SA
Endesa SA 5,000 111,386
Gas Natural SDG SA Series E 700 56,662
Iberdrola SA 5,800 81,369
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
SPAIN - CONTINUED
Telefonica SA 6,130 $ 287,851
Telefonica SA rights 6/15/99 5,330 4,966
(a)
791,706
SWEDEN - 0.9%
Electrolux AB 6,200 126,021
Ericsson (L.M.) Telefon AB 5,000 135,000
Class B
Swedish Match Co. 15,000 49,388
310,409
SWITZERLAND - 3.4%
Credit Suisse Group (Reg.) 800 158,793
Julius Baer Holding AG 33 107,510
Nestle SA (Reg.) 60 111,142
Roche Holding AG 27 317,835
participation certificates
Swatch Group AG (The) (Bearer) 100 71,391
Swisscom AG 300 110,236
United Bank of Switzerland AG 900 305,906
1,182,813
TAIWAN - 6.3%
BES Engineering Corp. (a) 178,000 70,765
Far Eastern Textile Ltd. 246,000 330,257
Macronix International Co. 233,000 198,086
Ltd.
Pacific Electric Wire & Cable 500,000 345,566
(a)
Pan-International Industrial 77,000 77,000
(a)
Polaris Securities Co. Ltd. 560,000 441,835
(a)
Taiwan Semiconductor 50,000 168,960
Manufacturing Co. Ltd.
Tatung Co. 77,000 91,835
United Microelectronics Corp. 50,000 77,982
(a)
Yuanta Securities Co. Ltd. (a) 222,000 370,000
2,172,286
UNITED KINGDOM - 15.4%
Abbey National, PLC 4,600 104,045
Allied Zurich PLC (a) 4,800 63,718
Amvescap PLC 9,000 95,693
Arcadia Group PLC 150,000 676,620
BP Amoco PLC 19,000 358,428
British Telecommunications PLC 21,600 362,340
Cable & Wireless 11,500 131,353
Communications PLC (a)
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
UNITED KINGDOM - CONTINUED
CGU PLC 6,000 $ 94,872
de la Rue PLC 19,000 87,542
Diageo PLC 3,000 34,677
Dixons Group PLC 9,700 207,366
Electrocomponents PLC 12,000 102,460
GKN PLC Class L 5,500 94,054
Glaxo Wellcome PLC 4,000 116,500
Laird Group PLC 12,000 59,833
Lloyds TSB Group PLC 15,000 241,771
MFI Furniture Group PLC 90,700 65,753
New Look Group PLC 13,200 47,209
Next PLC 6,000 74,138
NFC PLC 35,100 96,128
Premier Farnell PLC 18,300 86,380
Rentokil Initial PLC 9,000 53,030
Reuters Group PLC 9,000 122,082
Royal Bank of Scotland Group 13,500 318,833
PLC
Saatchi & Saatchi PLC 24,000 93,180
Shell Transport & Trading Co. 36,000 272,628
PLC (Reg.)
Smith (David S.) Holdings PLC 31,100 67,137
SmithKline Beecham PLC 37,200 488,717
Storehouse PLC 60,000 140,157
Trinity PLC 7,200 66,347
Unilever PLC 17,500 156,680
Vodafone Group PLC 6,500 116,594
Wickes PLC 33,700 216,077
5,312,342
UNITED STATES OF AMERICA - 0.4%
AirTouch Communications, Inc. 1,600 149,400
(a)
TOTAL COMMON STOCKS 32,674,219
(Cost $26,733,566)
NONCONVERTIBLE PREFERRED
STOCKS - 0.7%
GERMANY - 0.7%
Dyckerhoff AG 100 27,846
SAP AG (Systeme Anwendungen 525 198,446
Produkte)
TOTAL NONCONVERTIBLE 226,292
PREFERRED STOCKS
(Cost $207,107)
INVESTMENT COMPANIES - 0.5%
SHARES VALUE (NOTE 1)
MALAYSIA - 0.5%
WEBS Index Fund, Inc. 25,000 $ 156,250
MULTI-NATIONAL - 0.0%
European Warrant Fund, Inc. 1,000 15,375
TOTAL INVESTMENT COMPANIES 171,625
(Cost $123,175)
CASH EQUIVALENTS - 4.2%
Taxable Central Cash Fund (b) 1,462,459 1,462,459
(Cost $1,462,459)
TOTAL INVESTMENT IN $ 34,534,595
SECURITIES - 100%
(Cost $28,526,307)
LEGEND
(a) Non-income producing
(b) At period end, the seven-day yield on the Taxable Central Cash
Fund was 4.79%. The yield refers to the income earned by investing in
the fund over the seven-day period, expressed as an annual percentage.
(c) Security exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in transactions
exempt from registration, normally to qualified institutional buyers.
At the period end, the value of these securities amounted to $18,784
or 0.1% of net assets.
INCOME TAX INFORMATION
At April 30, 1999, the aggregate cost of investment securities for
income tax purposes was $28,596,102. Net unrealized appreciation
aggregated $5,938,493, of which $6,340,193 related to appreciated
investment securities and $401,700 related to depreciated investment
securities.
At October 31, 1998, the fund had a capital loss carryforward of
approximately $2,311,00 which will expire on October 31, 2006.
MARKET SECTOR DIVERSIFICATION (UNAUDITED)
As a Percentage of Total Value of Investment in Securities
BASIC INDUSTRIES 2.8%
CASH EQUIVALENTS 4.2
CONSTRUCTION & REAL ESTATE 4.3
DURABLES 7.0
ENERGY 3.2
FINANCE 28.4
HEALTH 6.3
INDUSTRIAL MACHINERY & 2.0
EQUIPMENT
INVESTMENT COMPANIES 0.5
MEDIA & LEISURE 4.1
NONDURABLES 3.5
RETAIL & WHOLESALE 7.0
SERVICES 3.2
TECHNOLOGY 8.6
TRANSPORTATION 0.3
UTILITIES 14.5
100.0%
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1999 (UNAUDITED)
ASSETS
Investment in securities, at $ 34,534,595
value (cost $28,526,307) -
See accompanying schedule
Foreign currency held at 18,168
value (cost $18,028)
Receivable for investments 1,653,276
sold
Receivable for fund shares 274,145
sold
Dividends receivable 97,903
Interest receivable 2,811
Other receivables 316
TOTAL ASSETS 36,581,214
LIABILITIES
Payable for investments $ 1,272,280
purchased
Payable for fund shares 52,986
redeemed
Accrued management fee 16,264
Distribution fees payable 14,433
Other payables and accrued 67,367
expenses
TOTAL LIABILITIES 1,423,330
NET ASSETS $ 35,157,884
Net Assets consist of:
Paid in capital $ 30,495,142
Accumulated net investment (128,798)
loss
Accumulated undistributed net (1,220,769)
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 6,012,309
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS $ 35,157,884
STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
APRIL 30, 1999 (UNAUDITED)
CALCULATION OF MAXIMUM $12.65
OFFERING PRICE CLASS A: NET
ASSET VALUE and redemption
price per share
($1,398,450 (divided by)
110,553 shares)
Maximum offering price per $13.42
share (100/94.25 of $12.65)
CLASS T: NET ASSET VALUE and $12.63
redemption price per share
($19,160,144 (divided by)
1,516,820 shares)
Maximum offering price per $13.09
share (100/96.50 of $12.63)
CLASS B: NET ASSET VALUE and $12.50
offering price per share
($5,416,530 (divided by)
433,167 shares) A
CLASS C: NET ASSET VALUE and $12.50
offering price per share
($3,258,709 (divided by)
260,627 shares) A
INSTITUTIONAL CLASS: NET $12.74
ASSET VALUE, offering price
and redemption price per
share ($5,924,051 (divided
by) 465,091 shares)
A REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30,
1999 (UNAUDITED)
INVESTMENT INCOME $ 158,770
Dividends
Interest 27,540
186,310
Less foreign taxes withheld (18,625)
TOTAL INCOME 167,685
EXPENSES
Management fee $ 104,277
Transfer agent fees 38,061
Distribution fees 74,471
Accounting fees and expenses 30,268
Non-interested trustees' 45
compensation
Custodian fees and expenses 55,711
Registration fees 31,945
Audit 13,210
Legal 53
Total expenses before 348,041
reductions
Expense reductions (68,072) 279,969
NET INVESTMENT INCOME (LOSS) (112,284)
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 1,498,708
Foreign currency transactions (6,132) 1,492,576
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 5,286,523
Assets and liabilities in 2,626 5,289,149
foreign currencies
NET GAIN (LOSS) 6,781,725
NET INCREASE (DECREASE) IN $ 6,669,441
NET ASSETS RESULTING FROM
OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED APRIL 30, NOVEMBER 3, 1997
1999 (UNAUDITED) (COMMENCEMENT OF OPERATIONS)
TO OCTOBER 31, 1998
INCREASE (DECREASE) IN NET
ASSETS
Operations Net investment $ (112,284) $ (24,699)
income (loss)
Net realized gain (loss) 1,492,576 (2,722,092)
Change in net unrealized 5,289,149 723,160
appreciation (depreciation)
NET INCREASE (DECREASE) IN 6,669,441 (2,023,631)
NET ASSETS RESULTING FROM
OPERATIONS
Share transactions - net 4,565,991 25,946,083
increase (decrease)
TOTAL INCREASE (DECREASE) 11,235,432 23,922,452
IN NET ASSETS
NET ASSETS
Beginning of period 23,922,452 -
End of period (including $ 35,157,884 $ 23,922,452
accumulated net investment
loss of $128,798 and
$16,514, respectively)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS A
SIX MONTHS ENDED APRIL 30, 1999 PERIOD ENDED OCTOBER 31,
(UNAUDITED) 1998 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 10.07 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) D (.03) .00
Net realized and unrealized 2.61 .07 H
gain (loss)
Total from investment 2.58 .07
operations
Net asset value, end of period $ 12.65 $ 10.07
TOTAL RETURN B, C 25.62% .70%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 1,398 $ 860
(000 omitted)
Ratio of expenses to average 1.75% A, F 2.06% A, F
net assets
Ratio of expenses to average 1.72% A, G 2.06% A
net assets after expense
reductions
Ratio of net investment (.51)% A .03% A
income (loss) to average net
assets
Portfolio turnover 237% A 199% A
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD NOVEMBER 3, 1997 (COMMENCEMENT OF SALE OF CLASS A
SHARES) TO OCTOBER 31, 1998.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
H THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH
THE AGGREGATE NET 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.
<TABLE>
<CAPTION>
<S> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS T
SIX MONTHS ENDED APRIL 30, 1999 PERIOD ENDED OCTOBER 31,
(UNAUDITED) 1998 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 10.04 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) D (.04) (.03)
Net realized and unrealized 2.63 .07 H
gain (loss)
Total from investment 2.59 .04
operations
Net asset value, end of period $ 12.63 $ 10.04
TOTAL RETURN B, C 25.80% .40%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 19,160 $ 12,117
(000 omitted)
Ratio of expenses to average 2.01% A, F 2.31% A, F
net assets
Ratio of expenses to average 1.98% A, G 2.31% A
net assets after expense
reductions
Ratio of net investment (.78)% A (.24)% A
income (loss) to average net
assets
Portfolio turnover 237% A 199% A
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD NOVEMBER 3, 1997 (COMMENCEMENT OF SALE OF CLASS T
SHARES) TO OCTOBER 31, 1998.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
H THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH
THE AGGREGATE NET 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.
<TABLE>
<CAPTION>
<S> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS B
SIX MONTHS ENDED APRIL 30, 1999 PERIOD ENDED OCTOBER 31,
(UNAUDITED) 1998 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 9.99 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) D (.07) (.07)
Net realized and unrealized 2.58 .06 H
gain (loss)
Total from investment 2.51 (.01)
operations
Net asset value, end of period $ 12.50 $ 9.99
TOTAL RETURN B, C 25.13% (.10)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 5,417 $ 4,047
(000 omitted)
Ratio of expenses to average 2.49% A, F 2.81% A, F
net assets
Ratio of expenses to average 2.46% A, G 2.81% A
net assets after expense
reductions
Ratio of net investment (1.28)% A (.70)% A
income (loss) to average net
assets
Portfolio turnover 237% A 199% A
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE
AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD NOVEMBER 3, 1997 (COMMENCEMENT OF SALE OF CLASS B
SHARES) TO OCTOBER 31, 1998.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
H THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH
THE AGGREGATE NET 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.
<TABLE>
<CAPTION>
<S> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS C
SIX MONTHS ENDED APRIL 30, 1999 PERIOD ENDED OCTOBER 31,
(UNAUDITED) 1998 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 9.98 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) D (.07) (.08)
Net realized and unrealized 2.59 .06 H
gain (loss)
Total from investment 2.52 (.02)
operations
Net asset value, end of period $ 12.50 $ 9.98
TOTAL RETURN B, C 25.25% (.20)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 3,259 $ 2,217
(000 omitted)
Ratio of expenses to average 2.50% A, F 2.81% A, F
net assets
Ratio of expenses to average 2.46% A, G 2.81% A
net assets after expense
reductions
Ratio of net investment (1.28)% A (.75)% A
income (loss) to average net
assets
Portfolio turnover 237% A 199% A
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE
AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD NOVEMBER 3, 1997 (COMMENCEMENT OF SALE OF CLASS C
SHARES) TO OCTOBER 31, 1998.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
H THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH
THE AGGREGATE NET 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.
<TABLE>
<CAPTION>
<S> <C> <C>
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
SIX MONTHS ENDED APRIL 30, 1999 PERIOD ENDED OCTOBER 31,
(UNAUDITED) 1998 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 10.09 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) D (.01) .04
Net realized and unrealized 2.66 .05 H
gain (loss)
Total from investment 2.65 .09
operations
Net asset value, end of period $ 12.74 $ 10.09
TOTAL RETURN B, C 26.26% .90%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 5,924 $ 4,682
(000 omitted)
Ratio of expenses to average 1.48% A, F 1.81% A, F
net assets
Ratio of expenses to average 1.45% A, G 1.81% A
net assets after expense
reductions
Ratio of net investment (.25)% A .34% A
income (loss) to average net
assets
Portfolio turnover 237% A 199% A
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
C TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD NOVEMBER 3, 1997 (COMMENCEMENT OF SALE OF
INSTITUTIONAL CLASS SHARES) TO OCTOBER 31, 1998.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
H THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH
THE AGGREGATE NET 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.
NOTES TO FINANCIAL STATEMENTS
For the period ended April 30, 1999 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor International Capital Appreciation 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 (the 1940 Act), as amended, as an
open-end management investment company organized as a Massachusetts
business trust.
The fund offers Class A, Class T, Class B, Class C, and Institutional
Class shares, each of which has equal rights as to assets and voting
privileges. Each class has exclusive voting rights with respect to
matters that affect that class. Investment income, realized and
unrealized capital gains and losses, the common expenses of the fund,
and certain fund-level expense reductions, if any, are allocated on a
pro rata basis to each class based on the relative net assets of each
class to the total net assets of the fund. Each class of shares
differs in its respective distribution, transfer agent, and certain
other class-specific fees, expenses, and expense reductions.
The financial statements have been prepared in conformity with
generally accepted accounting principles which require management to
make certain estimates and assumptions at the date of the financial
statements. The following summarizes the significant accounting
policies of the fund:
SECURITY VALUATION. Securities for which 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. If trading or events occurring in other markets
after the close of the principal market in which securities are traded
are expected to materially affect the value of those securities, then
they are valued at their fair value taking this trading or these
events into account. Fair value is determined in good faith under
consistently applied procedures under the general supervision of the
Board of Trustees. Securities (including restricted securities) for
which quotations are not readily available are valued primarily using
dealer-supplied valuations or at their fair value. Short-term
securities with remaining maturities of sixty days or less for which
quotations are not readily available are valued at amortized cost or
original cost plus accrued interest, both of which approximate current
value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases
and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
FOREIGN CURRENCY TRANSLATION - CONTINUED
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
and settlement date on purchases and sales of securities. The effects
of changes in foreign currency exchange rates on investments in
securities are included with the net realized and unrealized gain or
loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
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 and gains on investments
which are accrued based upon the fund's understanding of the tax rules
and regulations that exist in the markets in which it invests. 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 is accrued as earned. Investment
income is recorded net of foreign taxes withheld where recovery of
such taxes is uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date. Income dividends and capital gain distributions are
declared separately for each class.
Income and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. These differences may result in distribution
reclassifications.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Accumulated net investment loss and accumulated undistributed net
realized gain (loss) on investments and foreign currency transactions
may include temporary book and tax basis differences that will reverse
in a subsequent period. Any taxable income or gain remaining at fiscal
year end is distributed in the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the contracts'
terms. The U.S. dollar value of foreign currency contracts is
determined using contractual currency exchange rates established at
the time of each trade.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with
other affiliated entities of Fidelity Management & Research Company
(FMR), may transfer uninvested cash balances into one or more joint
trading accounts. These balances are invested in one or more
repurchase agreements for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury 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.
TAXABLE CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by
the SEC, the fund may invest in the Taxable Central Cash Fund (the
Cash Fund) managed by Fidelity Investments Money Management, Inc., an
affiliate of FMR. The Cash Fund is an open-end money market fund
available only to investment companies and other accounts managed by
FMR and its affiliates. The Cash Fund seeks preservation of capital,
liquidity, and current income by investing in U.S. Treasury securities
and repurchase agreements for these securities. Income distributions
from the Cash Fund are declared daily and paid monthly from net
interest income. Income distributions earned by the fund are recorded
as interest income in the accompanying financial statements.
RESTRICTED SECURITIES. The fund is permitted to invest in securities
that are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from
registration or to the public if the securities are registered.
Disposal of these securities may involve time-consuming negotiations
and expense, and prompt sale at an acceptable price may be difficult.
At the end of the period, 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 $35,614,208 and $31,392,887, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus a
fixed individual fund fee rate applied to the average net assets of
the fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds advised by FMR. The rates ranged from .2500% to .5200% for the
period. The annual individual fund fee rate is .45%. In the event that
these rates were lower than the contractual rates in effect during the
period, FMR voluntarily implemented the above rates, as they resulted
in the same or a lower management fee. For the period, the management
fee was equivalent to an annualized rate of .74% 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., Fidelity International
Investment Advisors (FIIA), and Fidelity Investments Japan Limited
(FIJ). In addition, FIIA entered into a sub-advisory agreement with
its subsidiary, Fidelity International Investment Advisors (U.K.)
Limited (FIIA(U.K.)L). 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 FIIA(U.K.)L a fee based on costs incurred for either
service.
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 (collectively referred to as "the
Plans"). Under certain of the Plans, the class pays Fidelity
Distributors Corporation (FDC), an affiliate of FMR, a distribution
and service fee. A portion of this fee may be reallowed to securities
dealers, banks and other financial institutions for the distribution
of each class of shares and providing shareholder support services.
For the period, this fee was based on the following annual rates of
the average net assets of each applicable class:
CLASS A .25%
CLASS T .50%
CLASS B 1.00% *
CLASS C 1.00% *
* .75% REPRESENTS A DISTRIBUTION FEE AND .25% REPRESENTS A SHAREHOLDER
SERVICE FEE.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
For the period, each class paid FDC the following amounts, a portion
of which was retained by FDC:
PAID TO FDC RETAINED BY FDC
CLASS A $ 1,371 $ 143
CLASS T 36,815 2,078
CLASS B 23,274 17,530
CLASS C 13,011 11,025
$ 74,471 $ 30,776
SALES LOAD. FDC receives a front-end sales charge of up to 5.75% for
selling Class A shares, and 3.50% for selling Class T shares of the
fund. FDC receives the proceeds of contingent deferred sales charges
levied on Class B share redemptions occurring within six years of
purchase and Class C share redemptions occurring within one year of
purchase. Contingent deferred sales charges are based on declining
rates ranging from 5% to 1% for Class B and 1% for Class C, of the
lesser of the cost of shares at the initial date of purchase or the
net asset value of the redeemed shares, excluding any reinvested
dividends and capital gains. In addition, purchases of Class A and
Class T shares that were subject to a finder's fee bear a contingent
deferred sales charge on assets that do not remain in the fund for at
least one year. The Class A and Class T contingent deferred sales
charge is based on 0.25% of the lesser of the cost of shares at the
initial date of purchase or the net asset value of the redeemed
shares, excluding any reinvested dividends and capital gains. A
portion of the sales charges paid to FDC are paid to securities
dealers, banks and other financial institutions.
For the period, sales charge amounts paid to and retained by FDC were
as follows:
PAID TO FDC RETAINED BY FDC
CLASS A $ 3,626 $ 1,603
CLASS T 17,580 3,241
CLASS B 5,377 5,377 *
CLASS C 1,835 1,835 *
$ 28,418 $ 12,056
* WHEN CLASS B AND CLASS C SHARES ARE INITIALLY SOLD, FDC PAYS
COMMISSIONS FROM ITS OWN RESOURCES TO SECURITIES DEALERS, BANKS, AND
OTHER FINANCIAL INSTITUTIONS THROUGH WHICH THE SALES ARE MADE.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
TRANSFER AGENT FEES. Fidelity Investments Institutional Operations
Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend
disbursing and shareholder servicing agent for each class of the fund.
FIIOC receives account fees and asset-based fees that vary according
to the account size and type of account of the shareholders of the
respective classes of the fund. FIIOC pays for typesetting, printing
and mailing of all shareholder reports, except proxy statements. For
the period, the following amounts were paid to FIIOC:
AMOUNT % OF AVERAGE NET ASSETS
CLASS A $ 2,108 .39 *
CLASS T 20,558 .28 *
CLASS B 6,727 .29 *
CLASS C 4,188 .33 *
INSTITUTIONAL CLASS 4,480 .17 *
$ 38,061
* ANNUALIZED
ACCOUNTING FEES. Fidelity Service Company, Inc., 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 the following annual rates or range of annual rates of average
net assets for each of the following classes:
FMR EXPENSE LIMITATIONS REIMBURSEMENT
CLASS A 1.70% $ 3,056
CLASS T 1.95% 33,040
CLASS B 2.45% 11,231
CLASS C 2.45% 6,652
INSTITUTIONAL CLASS 1.45% 9,576
$ 63,555
Effective December 1, 1998, Class A, Class T, Class B, Class C and
Institutional Class expense limitations were changed from 2.00%,
2.25%, 2.75%, 2.75% and 1.75%; to 1.70%, 1.95%, 2.45%, 2.45% and 1.45%
of each class' average net assets, respectively.
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 $4,517 under this arrangement.
6. BENEFICIAL INTEREST.
At the end of the period, FMR and its affiliates were record owners of
approximately 19% of the total outstanding shares of the fund.
7. SHARE TRANSACTIONS.
Transactions for each class of shares for the periods are as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SHARES DOLLARS
SIX MONTHS ENDED
APRIL 30, YEAR ENDED OCTOBER 31, SIX MONTHS ENDED APRIL 30, YEAR ENDED OCTOBER 31,
1999 1998A 1999 1998A
CLASS A Shares sold 41,207 103,525 $ 457,545 $ 1,119,865
Shares redeemed (16,054) (18,125) (177,532) (186,338)
Net increase (decrease) 25,153 85,400 $ 280,013 $ 933,527
CLASS T Shares sold 684,460 1,397,855 $ 7,783,928 $ 15,422,063
Shares redeemed (374,267) (191,228) (4,188,335) (1,955,961)
Net increase (decrease) 310,193 1,206,627 $ 3,595,593 $ 13,466,102
CLASS B Shares sold 106,041 456,271 $ 1,176,693 $ 5,032,634
Shares redeemed (78,113) (51,032) (863,122) (570,862)
Net increase (decrease) 27,928 405,239 $ 313,571 $ 4,461,772
CLASS C Shares sold 82,039 260,112 $ 923,890 $ 2,832,954
Shares redeemed (43,572) (37,952) (480,818) (392,926)
Net increase (decrease) 38,467 222,160 $ 443,072 $ 2,440,028
INSTITUTIONAL CLASS Shares 483,582 464,227 $ 5,582,517 $ 4,644,654
sold
Shares redeemed (482,718) - (5,648,775) -
Net increase (decrease) 864 464,227 $ (66,258) $ 4,644,654
</TABLE>
A SHARE TRANSACTIONS FOR CLASS A, CLASS T, CLASS B, CLASS C, AND
INSTITUTIONAL CLASS ARE FOR THE PERIOD NOVEMBER 3, 1997 (COMMENCEMENT
OF SALE OF SHARES) TO OCTOBER 31, 1998.
8. CHANGE IN INDEPENDENT AUDITOR.
Based on the recommendation of the Audit Committee of Fidelity Advisor
International Capital Appreciation Fund, the Board of Trustees has
determined not to retain PricewaterhouseCoopers LLP as the fund's
independent auditor and voted to appoint Deloitte & Touche LLP for the
fiscal year ended October 31, 1999. For the fiscal year ended October
31, 1998, PricewaterhouseCoopers LLP's audit reports contained no
adverse opinion or disclaimer of opinion; nor were their reports
qualified as to uncertainty, audit scope, or accounting principles.
Further, there were no disagreements between the fund and
PricewaterhouseCoopers LLP on accounting principles, financial
statement disclosure or audit scope, which if not resolved to the
satisfaction of PricewaterhouseCoopers LLP would have caused them to
make reference to the disagreement in their report.
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
Fidelity International Investment Advisors, Pembroke, Bermuda
Fidelity International Investment Advisors (U.K.) Limited,
London, England
Fidelity Investments Japan Limited, Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Richard Spillane, Jr., Vice President
Kevin McCarey, Vice President
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
Matthew N. Karstetter, Deputy Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
AICAP-SANN-0599 77846
1.703428.101
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
ADVISORY BOARD
J. Gary Burkhead
Abigail P. Johnson
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
Fidelity Investments Institutional Operations Company, Inc.
Boston, MA
CUSTODIAN
Brown Brothers Harriman & Co.
Boston, MA
(2_FIDELITY_LOGOS)(registered trademark)
FIDELITY ADVISOR
INTERNATIONAL
CAPITAL APPRECIATION
FUND - INSTITUTIONAL CLASS
SEMIANNUAL REPORT
APRIL 30, 1999
(2_FIDELITY_LOGOS)(registered trademark)
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the fund has done over
time.
FUND TALK 6 The manager's review of fund
performance, strategy and
outlook.
INVESTMENT CHANGES 9 A summary of major shifts in
the fund's investments over
the past six months.
INVESTMENTS 10 A complete list of the fund's
investments with their
market values.
FINANCIAL STATEMENTS 17 Statements of assets and
liabilities, operations, and
changes in net assets, as
well as financial highlights.
NOTES 26 Notes to the financial
statements.
Third party marks appearing herein are the property of their
respective owners.
All other marks appearing herein are registered or unregistered
trademarks or service marks of FMR Corp. or an affiliated company.
This report is printed on recycled paper using soy-based inks.
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE
SUBMITTED FOR THE GENERAL INFORMATION
OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS
IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT
INVESTED.
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.
FOR MORE INFORMATION ON ANY FIDELITY ADVISOR FUND, INCLUDING CHARGES
AND EXPENSES, CONTACT YOUR
INVESTMENT PROFESSIONAL FOR A FREE PROSPECTUS. READ IT CAREFULLY
BEFORE YOU INVEST OR SEND MONEY.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
With 13 record-high closings, the Dow Jones Industrial Average surged
nearly 1,000 points in April. What's particularly noteworthy about
this performance is that, in some cases, gains were fueled by a
rotation out of growth stocks and into issues more sensitive to
economic swings. The strength in blue chips, combined with heavy
global, corporate and agency bond issuance, contributed to the
downward pressure on government security prices.
While it's impossible to predict the future direction of the markets
with any degree of certainty, there are certain basic principles that
can help investors plan for their future needs.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will
greatly reduce your vulnerability to any single decline. We know from
experience, for example, that stock prices have gone up over longer
periods of time, have significantly outperformed other types of
investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through
diversification. A stock mutual fund, for instance, is already
diversified, because it invests in many different companies. You can
increase your diversification further by investing in a number of
different stock funds, or in such other investment categories as
bonds. If you have a short investment time horizon, you might want to
consider moving some of your investment into a money market fund,
which seeks income and a stable share price by investing in
high-quality, short-term investments. Of course, it's important to
remember that an investment in a money market fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although money market funds seek to preserve the
value of your investment at $1.00 per share, it is possible to lose
money by investing in these types of funds.
Finally, no matter what your time horizon or portfolio diversity, it
makes good sense to follow a regular investment plan, investing a
certain amount of money in a fund at the same time each month or
quarter and periodically reviewing your overall portfolio. By doing
so, you won't get caught up in the excitement of a rapidly rising
market, nor will you buy all your shares at market highs. While this
strategy - known as dollar cost averaging - won't assure a profit or
protect you from a loss in a declining market, it should help you
lower the average cost of your purchases. Of course, you should
consider your financial ability to continue your purchases through
periods of low price levels before undertaking such a strategy.
Remember to contact your investment professional if you need help with
your investments.
Best regards,
Edward C. Johnson 3d
FIDELITY ADVISOR INTERNATIONAL CAPITAL APPRECIATION FUND -
INSTITUTIONAL CLASS
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate historical performance. You can
look at the total percentage change in value, the average annual
percentage change or the growth of a hypothetical $10,000 investment.
Total return reflects the change in the value of an investment,
assuming reinvestment of the class' dividend income and capital gains
(the profits earned upon the sale of securities that have grown in
value). If Fidelity had not reimbursed certain class expenses, the
total returns would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED APRIL 30, 1999 PAST 6 MONTHS PAST 1 YEAR LIFE OF FUND
FIDELITY ADV INTL CAP APP - 26.26% 7.87% 27.40%
INST CL
MSCI World ex US 17.17% 7.48% 20.94%
International Funds Average 15.11% 3.24% n/a
CUMULATIVE TOTAL RETURNS show Institutional Class performance in
percentage terms over a set period - in this case, six months, one
year or since the fund started on November 3, 1997. For example, if
you had invested $1,000 in a fund that had a 5% return over the past
year, the value of your investment would be $1,050. You can compare
Institutional Class' returns to the performance of the Morgan Stanley
Capital International AC World Index Free ex USA - a market
capitalization-weighted index that is designed to represent the
performance of developed stock markets, excluding the United States,
throughout the world.To measure how the fund's performance stacked up
against its peers, you can compare it to the international funds
average, which reflects the performance of mutual funds with similar
objectives tracked by Lipper Inc. The past six months average
represents a peer group of 597 mutual funds. These benchmarks include
reinvested dividends and capital gains, if any, and exclude the effect
of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED APRIL 30, 1999 PAST 1 YEAR LIFE OF FUND
FIDELITY ADV INTL CAP APP - 7.87% 17.67%
INST CL
MSCI World ex US 7.48% 13.63%
International Funds Average 3.24% 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.
$10,000 OVER LIFE OF FUND
FA Intl Cap App -CL I MS AC World ex USA
00291 MS025
1997/11/03 10000.00 10000.00
1997/11/30 9740.00 9717.68
1997/12/31 9950.00 9829.52
1998/01/31 10230.00 10123.55
1998/02/28 10910.00 10799.04
1998/03/31 11540.00 11172.17
1998/04/30 11810.00 11252.19
1998/05/31 11780.00 11048.13
1998/06/30 11590.00 11006.60
1998/07/31 11830.00 11111.22
1998/08/31 9520.00 9544.28
1998/09/30 9360.00 9342.67
1998/10/31 10090.00 10321.30
1998/11/30 10630.00 10875.96
1998/12/31 10960.00 11250.66
1999/01/31 11180.00 11238.61
1999/02/28 11040.00 10986.98
1999/03/31 12010.00 11517.44
1999/04/30 12740.00 12093.51
IMATRL PRASUN SHR__CHT 19990430 19990525 145336 R00000000000021
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Advisor International Capital Appreciation Fund -
Institutional Class on November 3, 1997, when the fund started. As the
chart shows, by April 30, 1999, the value of the investment would have
grown to $12,740 - a 27.40% increase on the initial investment. For
comparison, look at how the Morgan Stanley Capital International AC
World Index Free ex USA did over the same period. With dividends
reinvested, the same $10,000 would have grown to $12,094 - a 20.94%
increase.
(checkmark)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.
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
In recent months, the black cloud
hanging over many global
economies last fall began to give
way to brighter forecasts. Although
it is too soon to tell whether rallies in
Latin America, Japan and Asia are
sustainable, they did represent an
important turning point. During the
six-month period ending April 30,
1999, the Morgan Stanley Capital
International EAFE Index - which
measures the performance of stock
markets in Europe, Australasia and
the Far East - returned 15.40%.
While the global economy still has
many obstacles to overcome,
government initiatives to aid banks,
corporate restructuring in Japan
and stable currencies in Asia and
emerging markets improved investor
sentiment. Turning to Europe, the
indexes posted mixed results as
volatility prevailed. Toward the end
of 1998, European stocks surged in
response to a strong U.S. market,
increased merger and acquisition
activity and enthusiasm about the
European Union's single currency
- - the euro. Many European markets
stalled in 1999, however, as the
outlook for economic growth and
corporate profits deteriorated. The
U.K. stock market was among the
strongest performers in Europe as
the economy improved amid a
favorable environment of declining
interest rates and encouraging
earnings growth. Elsewhere, positive
economic developments in the form
of lower-than-expected inflation
reports and signs that commodity
prices had bottomed fueled optimism
in Brazil and Mexico.
(photograph of Kevin McCarey)
An interview with Kevin McCarey, Portfolio Manager of Fidelity Advisor
International Capital Appreciation Fund
Q. HOW DID THE FUND PERFORM, KEVIN?
A. For the six months that ended April 30, 1999, the fund's
Institutional Class shares returned 26.26%. The Morgan Stanley Capital
International AC World Index Free ex USA returned 17.17% during that
time while the international funds average - as tracked by Lipper Inc.
- - returned 15.11%. For the 12 months that ended April 30, 1999, the
fund's Institutional Class shares returned 7.87%. The Morgan Stanley
index and Lipper group had 12-month returns of 7.48% and 3.24%,
respectively, as of April 30, 1999.
Q. WHAT FACTORS FIGURED INTO THE FUND'S PERFORMANCE?
A. From a positive standpoint, the fund's positions in Japanese
small-cap stocks (SEE CALLOUT BOX ON PAGE 8) helped performance, as
did its exposure to emerging markets such as Taiwan and Mexico.
Specifically, the fund benefited from investments in Taiwanese
electronics stocks - such as Taiwan Semiconductor Manufacturing - as
well as several Mexican banks. The fund also was helped by an
underweighting in Europe, which had a tough time during the period.
Much of this difficulty stemmed from general economic weakness
throughout Europe, as well as the depreciation of the euro. As of
April 30, the euro - the new uniform currency of 11 European nations -
was down around 9% for 1999. This contrasted sharply with the rosy
U.S. economic picture and strong dollar. Lastly, the fund benefited
from its exposure to United Kingdom-based cyclical stocks - or stocks
that tend to mirror the ups and downs of the economy. Examples here
included advertising agency Saatchi & Saatchi as well as large
retailer Dixons, both mid-cap stocks.
Q. EUROPEAN PHARMACEUTICAL STOCKS ENDURED A TOUGH STRETCH DURING THE
PERIOD. WHAT HAPPENED TO THIS GROUP?
A. High valuations, very little new product excitement and
deteriorating fundamentals equaled trouble. Swiss-based drug maker
Novartis, for instance - the fund's largest individual position at the
start of the period - experienced disappointing sales growth and its
share price became a bit too rich. During the course of the period, I
sold the fund's stake in Novartis. High valuations also harmed the
companies that were doing well, including U.K.-based Glaxo Wellcome.
That being said, I still held a favorable view on drug stocks such as
the U.K.'s SmithKline Beecham - which I felt should experience
accelerating sales growth - as well as France's Sanofi, which was in
the process of merging with another company.
Q. YOU INCREASED THE FUND'S LATIN AMERICAN EXPOSURE DURING THE PERIOD.
WHAT WAS THE ATTRACTION?
A. Most of that is probably due to my play on Mexican banks and the
fact that short-term interest rates in Mexico have gone down over the
past six months. With lower rates - and improving business profiles -
I felt the economy would pick up and banks such as Banacci and Grupo
Financiero Bancomer would have fewer problem loans in their
portfolios. This strategy worked nicely for the fund, as each of these
two stocks generated positive results.
Q. WHICH OTHER INDIVIDUAL STOCKS PERFORMED WELL? WHICH PROVED
DISAPPOINTING?
A. Two of the fund's best performers were energy companies BP Amoco -
based in the U.K. - and France's Elf Aquitaine. Both companies
benefited handsomely from the rise in oil prices, which had hovered at
or near all-time lows through the first half of the period.
Telecommunications stocks such as Finland's Nokia and Germany's
Deutsche Telekom also performed well. Nokia continued to benefit from
the demand for mobile communications, while Deutsche Telekom -
Europe's largest Internet provider - took advantage of the popularity
of the Internet. Disappointments included food company Nestle, which
didn't meet its unit growth target, and Allianz, a Germany-based
insurance company whose stock price tends to move in line with bond
prices. Bond prices fell during the period.
Q. WHAT'S YOUR OUTLOOK?
A. I'm reasonably optimistic about the U.K. market's prospects -
particularly on the mid-cap side - and will continue to look for good
opportunities there in the coming months. Japan has been encouraging
of late, but whether their market upturn can be sustained is another
question. I'll continue to keep a close eye on developments in Japan.
We should continue to see volatility in many emerging-market regions,
but overall they appear to have seen their worst economic conditions.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON
THE COVER AND DO NOT NECESSARILY REPRESENT THE VIEWS OF FIDELITY OR
ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH VIEWS ARE
SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER CONDITIONS
AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE
VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE
INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS
FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON
BEHALF OF ANY FIDELITY FUND.
(checkmark)FUND FACTS
GOAL: seeks capital
appreciation by investing in
securities of foreign issuers
START DATE: November 3,
1997
SIZE: as of April 30, 1999,
more than $35 million
MANAGER: Kevin McCarey,
since inception; joined
Fidelity in 1985
KEVIN MCCAREY TALKS
ABOUT POSITIVE
DEVELOPMENTS IN JAPAN:
"As many investors are aware, the
Japanese economy has struggled
mightily over the past few years.
Events of this period, however,
suggest that Japan may be finally
turning a corner.
"There were a couple of factors
behind this market improvement.
First, I think investors were eagerly
anticipating some type of positive
news to come out of Japan. Many
had fallen in love with Europe over
the past few years and the shine
was beginning to wear off there.
When good news began to trickle
out of Japan, a lot of investors
jumped on board. Second, we've
seen somewhat of a dramatic shift
- - at least by Japanese standards
- - of companies talking about
restructuring. This has been
spurred by the Japanese
government's willingness to provide
funds to corporations for
improvement measures.
"Small Japanese companies in
particular have performed well. I've
found that many of these smaller
companies tend to be partly owned
by family members and there seems
to be a strong interest in the
direction of the company's share
price. The fund took advantage of
this small-cap performance,
receiving good results from names
such as Paris Miki - a retail
optical chain - and retailer Don
Quijote."
INVESTMENT CHANGES
<TABLE>
<CAPTION>
<S> <C> <C>
TOP FIVE STOCKS AS OF APRIL
30, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE STOCKS 6 MONTHS AGO
DDI Corp. (Japan, Telephone 3.0 0.0
Services)
Banacci SA de CV (Mexico, 2.9 0.0
Banks)
Aiful Corp. (Japan, Credit & 2.4 0.0
Other Finance)
Arcadia Group PLC (United 2.0 0.0
Kingdom, Apparel Stores)
Nikko Securities Co. Ltd. 1.7 0.0
(Japan, Securities Industry)
TOP FIVE MARKET SECTORS AS OF
APRIL 30, 1999
% OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE MARKET SECTORS 6
MONTHS AGO
FINANCE 28.4 21.4
UTILITIES 14.5 18.7
TECHNOLOGY 8.6 5.4
RETAIL & WHOLESALE 7.0 4.3
DURABLES 7.0 4.3
TOP FIVE COUNTRIES AS OF
APRIL 30, 1999
(EXCLUDING CASH EQUIVALENTS) % OF FUND'S INVESTMENTS % OF FUND'S INVESTMENTS IN
THESE COUNTRIES 6 MONTHS AGO
Japan 28.6 14.0
United Kingdom 15.4 20.7
France 8.4 11.9
Taiwan 6.3 0.0
Germany 5.7 9.5
</TABLE>
PERCENTAGES ARE ADJUSTED FOR THE EFFECT OF OPEN FUTURES CONTRACTS, IF
APPLICABLE.
ASSET ALLOCATION (% OF FUND'S
INVESTMENTS)
AS OF APRIL 30, 1999
Stocks and Investment
Companies 95.8%
Short-term
investments 4.2%
Row: 1, Col: 1, Value: 4.2
Row: 1, Col: 2, Value: 95.8
AS OF OCTOBER 31, 1998
Stocks and Investment
Companies 92.1%
Short-term
investments 7.9%
Row: 1, Col: 1, Value: 7.9
Row: 1, Col: 2, Value: 92.09999999999999
INVESTMENTS APRIL 30, 1999 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 94.6%
SHARES VALUE (NOTE 1)
AUSTRALIA - 1.1%
Australia & New Zealand 33,000 $ 261,240
Banking Group Ltd.
News Corp. Ltd. sponsored ADR 3,500 114,188
375,428
BELGIUM - 0.3%
Electrabel SA 350 115,658
BRAZIL - 0.3%
Tele Centro Sul Participacoes 1,000 53,125
SA sponsored ADR (a)
Tele Leste Celular 1,000 35,875
Participacoes SA sponsored
ADR
Tele Nordeste Celular 1,000 22,000
Participacoes SA sponsored
ADR (a)
111,000
CANADA - 3.9%
Celestica, Inc. (sub-vtg.) (a) 4,000 159,231
CGI Group, Inc. Class A (sub. 8,000 197,666
vtg.) (a)
Cinar Films, Inc. Class B 3,000 62,625
(sub. vtg.) (a)
Cogeco Cable, Inc. 15,000 303,706
Nortel Networks Corp. 100 6,795
Power Corp. of Canada 10,000 187,371
Rogers Communications, Inc. 5,000 93,686
Class B (non-vtg.) (a)
Shaw Communications, Inc. 2,600 107,069
Class B
Videotron Group Ltd. (sub. 12,000 245,436
vtg.)
1,363,585
CZECH REPUBLIC - 0.1%
SPT Telecom AS (a) 1,300 18,885
FINLAND - 1.7%
OY Nokia AB sponsored ADR 5,800 430,288
Sonera Group PLC 3,100 61,707
UPM-Kymmene Corp. 3,000 91,004
582,999
FRANCE - 8.4%
AXA SA de CV 1,400 181,140
Banque Nationale de Paris 4,800 398,702
Cap Gemini SA 800 122,567
Castorama Dubois 700 167,873
Investissements SA
Compagnie de St. Gobain 380 65,381
Compagnie Financiere de 1,900 202,379
Paribas Class A (Reg.)
Compagnie Generale de 4,600 48,300
Geophysique SA sponsored ADR
(a)
Elf Aquitaine 2,800 437,500
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
FRANCE - CONTINUED
France Telecom SA 2,000 $ 161,891
Groupe Danone 800 214,301
Havas Advertising SA 450 91,480
Rhone-Poulenc SA Class A 700 32,987
Sanofi SA 800 125,616
Suez Lyonnaise des Eaux 1,200 204,560
Television Francaise 1 SA 800 156,702
(T.F.1)
Vivendi SA 1,200 280,921
2,892,300
GERMANY - 5.0%
Allianz AG (Reg.) 450 141,509
DaimlerChrysler AG (Reg.) 3,400 333,838
Deutsche Telekom AG 7,700 304,179
Fresenius Medical Care AG 2,600 46,800
sponsored ADR
Mannesmann AG 4,100 536,558
Metro AG 1,000 70,950
Primacom AG (a) 2,800 121,550
Schering AG 200 23,082
Wella AG 250 165,438
1,743,904
HONG KONG - 3.1%
Dah Sing Financial Holdings 162,000 510,998
Ltd.
Hengan International Group 56,000 18,784
Co. Ltd. (a)(c)
Johnson Electric Holdings 20,000 59,732
Ltd.
Li & Fung Ltd. 40,000 98,048
Wing Hang Bank Ltd. 120,000 366,906
1,054,468
INDIA - 1.1%
Dr. Reddy's Laboratories Ltd. 4,000 82,224
(a)
Pentafour Software & Exports 12,000 287,344
Ltd.
369,568
IRELAND - 0.5%
Bank of Ireland, Inc. 6,000 120,148
Elan Corp. PLC sponsored ADR 800 41,200
(a)
161,348
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
ITALY - 2.6%
Assicurazioni Generali Spa 5,500 $ 214,476
Banca Commerciale Italiana Spa 32,800 271,370
Mondadori (Arnoldo) Editore 3,200 56,860
Spa
Olivetti & Co. Spa 19,100 66,493
Telecom Italia Spa 27,000 286,705
895,904
JAPAN - 28.6%
Aiful Corp. 10,000 818,395
Banyu Pharmaceutical Co. Ltd. 6,000 110,571
DDI Corp. 210 1,043,132
Fancl Corp. 2,600 370,246
Fuji Bank Ltd. 60,000 468,420
Fuji Coca-Cola Bottling Co. 9,000 124,393
Ltd.
Funai Electric Co. Ltd. 3,000 403,334
Godo Steel Ltd. (a) 80,000 87,117
Honda Motor Co. Ltd. 8,000 353,500
Ichiyoshi Securities Co. Ltd. 70,000 225,163
Japan Business Computer Co. 30,000 472,441
Ltd.
JCR Pharmaceuticals Co. Ltd. 20,000 261,350
Kokusai Denshin Denwa 9,000 545,820
Konami Co. Ltd. 3,600 126,654
Kyocera Corp. 4,000 237,561
Maeda Road Construction Co. 40,000 264,031
Ltd.
Matsushita Electric 12,000 228,179
Industrial Co. Ltd.
Mitsubishi Trust & Banking 20,000 219,467
Corp.
Nichii Gakkan Co. 450 35,056
Nikko Securities Co. Ltd. 100,000 573,798
Nippon System Development Co. 3,500 178,841
Nippon Zeon Co. Ltd. 60,000 398,057
Paris Miki, Inc. 3,640 121,354
Senshukai Co. Ltd. 40,000 439,270
Sony Music Entertainment Ltd. 3,000 218,630
Square Co. Ltd. 3,600 129,670
Sumitomo Forestry Co. Ltd. 30,000 223,656
Sumitomo Realty & Development 90,000 392,779
Co. Ltd.
Takeda Chemical Industries 6,000 260,848
Ltd.
THK Co. Ltd. 13,000 225,415
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
JAPAN - CONTINUED
Yamaha Motor Co. Ltd. 25,000 $ 201,248
Yamanouchi Pharmaceutical Co. 4,000 126,654
Ltd.
9,885,050
KOREA (SOUTH) - 0.4%
Medison Co. Ltd. 11,000 123,096
LUXEMBOURG - 0.2%
Stolt Comex Seaway SA 4,350 54,375
MALAYSIA - 0.0%
Berjaya Sports Toto BHD 10,000 17,105
MEXICO - 5.3%
Banacci SA de CV Class O (a) 400,000 1,012,359
Corporacion Geo SA de CV (a) 43,000 179,764
Empresas ICA Sociedad 28,200 185,063
Controladora SA de CV
sponsored ADR
Grupo Financiero Bancomer SA 1,000,000 343,901
de CV Series A
Grupo Financiero Probursa SA 860,000 109,060
de CV (a)
1,830,147
NETHERLANDS - 3.1%
ABN AMRO Holding NV 4,600 109,829
ASM Lithography Holding N V 1,400 54,600
(a)
Fortis Amev NV 7,500 267,612
ING Groep NV 3,500 216,048
Koninklijke (Royal) Philips 1,600 138,068
Electronics NV
Koninklijke Ahold NV 3,600 133,981
Koninklijke KPN NV 2,100 87,827
STMicroelectronics NV (a) 300 30,600
Vendex NV CVA 1,800 44,883
1,083,448
RUSSIA - 0.0%
Vimpel Communications 1,000 16,500
sponsored ADR (a)
SINGAPORE - 0.2%
Natsteel Electronics Ltd. 18,000 60,495
SPAIN - 2.3%
Banco Santander Central 11,460 249,472
Hispano SA
Endesa SA 5,000 111,386
Gas Natural SDG SA Series E 700 56,662
Iberdrola SA 5,800 81,369
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
SPAIN - CONTINUED
Telefonica SA 6,130 $ 287,851
Telefonica SA rights 6/15/99 5,330 4,966
(a)
791,706
SWEDEN - 0.9%
Electrolux AB 6,200 126,021
Ericsson (L.M.) Telefon AB 5,000 135,000
Class B
Swedish Match Co. 15,000 49,388
310,409
SWITZERLAND - 3.4%
Credit Suisse Group (Reg.) 800 158,793
Julius Baer Holding AG 33 107,510
Nestle SA (Reg.) 60 111,142
Roche Holding AG 27 317,835
participation certificates
Swatch Group AG (The) (Bearer) 100 71,391
Swisscom AG 300 110,236
United Bank of Switzerland AG 900 305,906
1,182,813
TAIWAN - 6.3%
BES Engineering Corp. (a) 178,000 70,765
Far Eastern Textile Ltd. 246,000 330,257
Macronix International Co. 233,000 198,086
Ltd.
Pacific Electric Wire & Cable 500,000 345,566
(a)
Pan-International Industrial 77,000 77,000
(a)
Polaris Securities Co. Ltd. 560,000 441,835
(a)
Taiwan Semiconductor 50,000 168,960
Manufacturing Co. Ltd.
Tatung Co. 77,000 91,835
United Microelectronics Corp. 50,000 77,982
(a)
Yuanta Securities Co. Ltd. (a) 222,000 370,000
2,172,286
UNITED KINGDOM - 15.4%
Abbey National, PLC 4,600 104,045
Allied Zurich PLC (a) 4,800 63,718
Amvescap PLC 9,000 95,693
Arcadia Group PLC 150,000 676,620
BP Amoco PLC 19,000 358,428
British Telecommunications PLC 21,600 362,340
Cable & Wireless 11,500 131,353
Communications PLC (a)
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
UNITED KINGDOM - CONTINUED
CGU PLC 6,000 $ 94,872
de la Rue PLC 19,000 87,542
Diageo PLC 3,000 34,677
Dixons Group PLC 9,700 207,366
Electrocomponents PLC 12,000 102,460
GKN PLC Class L 5,500 94,054
Glaxo Wellcome PLC 4,000 116,500
Laird Group PLC 12,000 59,833
Lloyds TSB Group PLC 15,000 241,771
MFI Furniture Group PLC 90,700 65,753
New Look Group PLC 13,200 47,209
Next PLC 6,000 74,138
NFC PLC 35,100 96,128
Premier Farnell PLC 18,300 86,380
Rentokil Initial PLC 9,000 53,030
Reuters Group PLC 9,000 122,082
Royal Bank of Scotland Group 13,500 318,833
PLC
Saatchi & Saatchi PLC 24,000 93,180
Shell Transport & Trading Co. 36,000 272,628
PLC (Reg.)
Smith (David S.) Holdings PLC 31,100 67,137
SmithKline Beecham PLC 37,200 488,717
Storehouse PLC 60,000 140,157
Trinity PLC 7,200 66,347
Unilever PLC 17,500 156,680
Vodafone Group PLC 6,500 116,594
Wickes PLC 33,700 216,077
5,312,342
UNITED STATES OF AMERICA - 0.4%
AirTouch Communications, Inc. 1,600 149,400
(a)
TOTAL COMMON STOCKS 32,674,219
(Cost $26,733,566)
NONCONVERTIBLE PREFERRED
STOCKS - 0.7%
GERMANY - 0.7%
Dyckerhoff AG 100 27,846
SAP AG (Systeme Anwendungen 525 198,446
Produkte)
TOTAL NONCONVERTIBLE 226,292
PREFERRED STOCKS
(Cost $207,107)
INVESTMENT COMPANIES - 0.5%
SHARES VALUE (NOTE 1)
MALAYSIA - 0.5%
WEBS Index Fund, Inc. 25,000 $ 156,250
MULTI-NATIONAL - 0.0%
European Warrant Fund, Inc. 1,000 15,375
TOTAL INVESTMENT COMPANIES 171,625
(Cost $123,175)
CASH EQUIVALENTS - 4.2%
Taxable Central Cash Fund (b) 1,462,459 1,462,459
(Cost $1,462,459)
TOTAL INVESTMENT IN $ 34,534,595
SECURITIES - 100%
(Cost $28,526,307)
LEGEND
(a) Non-income producing
(b) At period end, the seven-day yield on the Taxable Central Cash
Fund was 4.79%. The yield refers to the income earned by investing in
the fund over the seven-day period, expressed as an annual percentage.
(c) Security exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in transactions
exempt from registration, normally to qualified institutional buyers.
At the period end, the value of these securities amounted to $18,784
or 0.1% of net assets.
INCOME TAX INFORMATION
At April 30, 1999, the aggregate cost
of investment securities for income tax purposes was $28,596,102. Net
unrealized appreciation aggregated $5,938,493, of which $6,340,193
related to appreciated investment securities and $401,700 related to
depreciated investment securities.
At October 31, 1998, the fund had a capital loss carryforward of
approximately $2,311,00 which will expire on October 31, 2006.
MARKET SECTOR DIVERSIFICATION (UNAUDITED)
As a Percentage of Total Value of Investment in Securities
BASIC INDUSTRIES 2.8%
CASH EQUIVALENTS 4.2
CONSTRUCTION & REAL ESTATE 4.3
DURABLES 7.0
ENERGY 3.2
FINANCE 28.4
HEALTH 6.3
INDUSTRIAL MACHINERY & 2.0
EQUIPMENT
INVESTMENT COMPANIES 0.5
MEDIA & LEISURE 4.1
NONDURABLES 3.5
RETAIL & WHOLESALE 7.0
SERVICES 3.2
TECHNOLOGY 8.6
TRANSPORTATION 0.3
UTILITIES 14.5
100.0%
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1999 (UNAUDITED)
ASSETS
Investment in securities, at $ 34,534,595
value (cost $28,526,307) -
See accompanying schedule
Foreign currency held at 18,168
value (cost $18,028)
Receivable for investments 1,653,276
sold
Receivable for fund shares 274,145
sold
Dividends receivable 97,903
Interest receivable 2,811
Other receivables 316
TOTAL ASSETS 36,581,214
LIABILITIES
Payable for investments $ 1,272,280
purchased
Payable for fund shares 52,986
redeemed
Accrued management fee 16,264
Distribution fees payable 14,433
Other payables and accrued 67,367
expenses
TOTAL LIABILITIES 1,423,330
NET ASSETS $ 35,157,884
Net Assets consist of:
Paid in capital $ 30,495,142
Accumulated net investment (128,798)
loss
Accumulated undistributed net (1,220,769)
realized gain (loss) on
investments and foreign
currency transactions
Net unrealized appreciation 6,012,309
(depreciation) on
investments and assets and
liabilities in foreign
currencies
NET ASSETS $ 35,157,884
STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
APRIL 30, 1999 (UNAUDITED)
CALCULATION OF MAXIMUM $12.65
OFFERING PRICE CLASS A: NET
ASSET VALUE and redemption
price per share
($1,398,450 (divided by)
110,553 shares)
Maximum offering price per $13.42
share (100/94.25 of $12.65)
CLASS T: NET ASSET VALUE and $12.63
redemption price per share
($19,160,144 (divided by)
1,516,820 shares)
Maximum offering price per $13.09
share (100/96.50 of $12.63)
CLASS B: NET ASSET VALUE and $12.50
offering price per share
($5,416,530 (divided by)
433,167 shares) A
CLASS C: NET ASSET VALUE and $12.50
offering price per share
($3,258,709 (divided by)
260,627 shares) A
INSTITUTIONAL CLASS: NET $12.74
ASSET VALUE, offering price
and redemption price per
share ($5,924,051 (divided
by) 465,091 shares)
A REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY
APPLICABLE CONTINGENT DEFERRED SALES CHARGE.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30,
1999 (UNAUDITED)
INVESTMENT INCOME $ 158,770
Dividends
Interest 27,540
186,310
Less foreign taxes withheld (18,625)
TOTAL INCOME 167,685
EXPENSES
Management fee $ 104,277
Transfer agent fees 38,061
Distribution fees 74,471
Accounting fees and expenses 30,268
Non-interested trustees' 45
compensation
Custodian fees and expenses 55,711
Registration fees 31,945
Audit 13,210
Legal 53
Total expenses before 348,041
reductions
Expense reductions (68,072) 279,969
NET INVESTMENT INCOME (LOSS) (112,284)
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investment securities 1,498,708
Foreign currency transactions (6,132) 1,492,576
Change in net unrealized
appreciation (depreciation)
on:
Investment securities 5,286,523
Assets and liabilities in 2,626 5,289,149
foreign currencies
NET GAIN (LOSS) 6,781,725
NET INCREASE (DECREASE) IN $ 6,669,441
NET ASSETS RESULTING FROM
OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED APRIL 30, NOVEMBER 3, 1997
1999 (UNAUDITED) (COMMENCEMENT OF OPERATIONS)
TO OCTOBER 31, 1998
INCREASE (DECREASE) IN NET
ASSETS
Operations Net investment $ (112,284) $ (24,699)
income (loss)
Net realized gain (loss) 1,492,576 (2,722,092)
Change in net unrealized 5,289,149 723,160
appreciation (depreciation)
NET INCREASE (DECREASE) IN 6,669,441 (2,023,631)
NET ASSETS RESULTING FROM
OPERATIONS
Share transactions - net 4,565,991 25,946,083
increase (decrease)
TOTAL INCREASE (DECREASE) 11,235,432 23,922,452
IN NET ASSETS
NET ASSETS
Beginning of period 23,922,452 -
End of period (including $ 35,157,884 $ 23,922,452
accumulated net investment
loss of $128,798 and
$16,514, respectively)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS A
SIX MONTHS ENDED APRIL 30, 1999 PERIOD ENDED OCTOBER 31,
(UNAUDITED) 1998 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 10.07 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) D (.03) .00
Net realized and unrealized 2.61 .07 H
gain (loss)
Total from investment 2.58 .07
operations
Net asset value, end of period $ 12.65 $ 10.07
TOTAL RETURN B, C 25.62% .70%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 1,398 $ 860
(000 omitted)
Ratio of expenses to average 1.75% A, F 2.06% A, F
net assets
Ratio of expenses to average 1.72% A, G 2.06% A
net assets after expense
reductions
Ratio of net investment (.51)% A .03% A
income (loss) to average net
assets
Portfolio turnover 237% A 199% A
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD NOVEMBER 3, 1997 (COMMENCEMENT OF SALE OF CLASS A
SHARES) TO OCTOBER 31, 1998.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
H THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH
THE AGGREGATE NET 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.
<TABLE>
<CAPTION>
<S> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS T
SIX MONTHS ENDED APRIL 30, 1999 PERIOD ENDED OCTOBER 31,
(UNAUDITED) 1998 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 10.04 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) D (.04) (.03)
Net realized and unrealized 2.63 .07 H
gain (loss)
Total from investment 2.59 .04
operations
Net asset value, end of period $ 12.63 $ 10.04
TOTAL RETURN B, C 25.80% .40%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 19,160 $ 12,117
(000 omitted)
Ratio of expenses to average 2.01% A, F 2.31% A, F
net assets
Ratio of expenses to average 1.98% A, G 2.31% A
net assets after expense
reductions
Ratio of net investment (.78)% A (.24)% A
income (loss) to average net
assets
Portfolio turnover 237% A 199% A
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD NOVEMBER 3, 1997 (COMMENCEMENT OF SALE OF CLASS T
SHARES) TO OCTOBER 31, 1998.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
H THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH
THE AGGREGATE NET 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.
<TABLE>
<CAPTION>
<S> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS B
SIX MONTHS ENDED APRIL 30, 1999 PERIOD ENDED OCTOBER 31,
(UNAUDITED) 1998 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 9.99 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) D (.07) (.07)
Net realized and unrealized 2.58 .06 H
gain (loss)
Total from investment 2.51 (.01)
operations
Net asset value, end of period $ 12.50 $ 9.99
TOTAL RETURN B, C 25.13% (.10)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 5,417 $ 4,047
(000 omitted)
Ratio of expenses to average 2.49% A, F 2.81% A, F
net assets
Ratio of expenses to average 2.46% A, G 2.81% A
net assets after expense
reductions
Ratio of net investment (1.28)% A (.70)% A
income (loss) to average net
assets
Portfolio turnover 237% A 199% A
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE
AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD NOVEMBER 3, 1997 (COMMENCEMENT OF SALE OF CLASS B
SHARES) TO OCTOBER 31, 1998.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
H THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH
THE AGGREGATE NET 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.
<TABLE>
<CAPTION>
<S> <C> <C>
FINANCIAL HIGHLIGHTS - CLASS C
SIX MONTHS ENDED APRIL 30, 1999 PERIOD ENDED OCTOBER 31,
(UNAUDITED) 1998 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 9.98 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) D (.07) (.08)
Net realized and unrealized 2.59 .06 H
gain (loss)
Total from investment 2.52 (.02)
operations
Net asset value, end of period $ 12.50 $ 9.98
TOTAL RETURN B, C 25.25% (.20)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 3,259 $ 2,217
(000 omitted)
Ratio of expenses to average 2.50% A, F 2.81% A, F
net assets
Ratio of expenses to average 2.46% A, G 2.81% A
net assets after expense
reductions
Ratio of net investment (1.28)% A (.75)% A
income (loss) to average net
assets
Portfolio turnover 237% A 199% A
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
C TOTAL RETURNS DO NOT INCLUDE THE CONTINGENT DEFERRED SALES CHARGE
AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD NOVEMBER 3, 1997 (COMMENCEMENT OF SALE OF CLASS C
SHARES) TO OCTOBER 31, 1998.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
H THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH
THE AGGREGATE NET 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.
<TABLE>
<CAPTION>
<S> <C> <C>
FINANCIAL HIGHLIGHTS - INSTITUTIONAL CLASS
SIX MONTHS ENDED APRIL 30, 1999 PERIOD ENDED OCTOBER 31,
(UNAUDITED) 1998 E
SELECTED PER-SHARE DATA
Net asset value, beginning of $ 10.09 $ 10.00
period
Income from Investment
Operations
Net investment income (loss) D (.01) .04
Net realized and unrealized 2.66 .05 H
gain (loss)
Total from investment 2.65 .09
operations
Net asset value, end of period $ 12.74 $ 10.09
TOTAL RETURN B, C 26.26% .90%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 5,924 $ 4,682
(000 omitted)
Ratio of expenses to average 1.48% A, F 1.81% A, F
net assets
Ratio of expenses to average 1.45% A, G 1.81% A
net assets after expense
reductions
Ratio of net investment (.25)% A .34% A
income (loss) to average net
assets
Portfolio turnover 237% A 199% A
</TABLE>
A ANNUALIZED
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN.
C TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
D NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON
AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
E FOR THE PERIOD NOVEMBER 3, 1997 (COMMENCEMENT OF SALE OF
INSTITUTIONAL CLASS SHARES) TO OCTOBER 31, 1998.
F FMR AGREED TO REIMBURSE A PORTION OF THE CLASS' EXPENSES DURING THE
PERIOD. WITHOUT THIS REIMBURSEMENT, THE CLASS' EXPENSE RATIO WOULD
HAVE BEEN HIGHER.
G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE CLASS' EXPENSES.
H THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH
THE AGGREGATE NET 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.
NOTES TO FINANCIAL STATEMENTS
For the period ended April 30, 1999 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Advisor International Capital Appreciation 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 (the 1940 Act), as amended, as an
open-end management investment company organized as a Massachusetts
business trust.
The fund offers Class A, Class T, Class B, Class C, and Institutional
Class shares, each of which has equal rights as to assets and voting
privileges. Each class has exclusive voting rights with respect to
matters that affect that class. Investment income, realized and
unrealized capital gains and losses, the common expenses of the fund,
and certain fund-level expense reductions, if any, are allocated on a
pro rata basis to each class based on the relative net assets of each
class to the total net assets of the fund. Each class of shares
differs in its respective distribution, transfer agent, and certain
other class-specific fees, expenses, and expense reductions.
The financial statements have been prepared in conformity with
generally accepted accounting principles which require management to
make certain estimates and assumptions at the date of the financial
statements. The following summarizes the significant accounting
policies of the fund:
SECURITY VALUATION. Securities for which 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. If trading or events occurring in other markets
after the close of the principal market in which securities are traded
are expected to materially affect the value of those securities, then
they are valued at their fair value taking this trading or these
events into account. Fair value is determined in good faith under
consistently applied procedures under the general supervision of the
Board of Trustees. Securities (including restricted securities) for
which quotations are not readily available are valued primarily using
dealer-supplied valuations or at their fair value. Short-term
securities with remaining maturities of sixty days or less for which
quotations are not readily available are valued at amortized cost or
original cost plus accrued interest, both of which approximate current
value.
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the prevailing rates of exchange at period end. Purchases
and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
FOREIGN CURRENCY TRANSLATION - CONTINUED
Net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of foreign
currency contracts, disposition of foreign currencies, the difference
between the amount of net investment income accrued and the U.S.
dollar amount actually received, and gains and losses between trade
and settlement date on purchases and sales of securities. The effects
of changes in foreign currency exchange rates on investments in
securities are included with the net realized and unrealized gain or
loss on investment securities.
INCOME TAXES. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, the fund is not subject to
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 and gains on investments
which are accrued based upon the fund's understanding of the tax rules
and regulations that exist in the markets in which it invests. 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 is accrued as earned. Investment
income is recorded net of foreign taxes withheld where recovery of
such taxes is uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a
fund. Expenses which cannot be directly attributed are apportioned
among the funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date. Income dividends and capital gain distributions are
declared separately for each class.
Income and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. These differences may result in distribution
reclassifications.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Accumulated net investment loss and accumulated undistributed net
realized gain (loss) on investments and foreign currency transactions
may include temporary book and tax basis differences that will reverse
in a subsequent period. Any taxable income or gain remaining at fiscal
year end is distributed in the following year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of
trade date. Gains and losses on securities sold are determined on the
basis of identified cost.
2. OPERATING POLICIES.
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency
contracts to facilitate transactions in foreign-denominated
securities. Losses may arise from changes in the value of the foreign
currency or if the counterparties do not perform under the contracts'
terms. The U.S. dollar value of foreign currency contracts is
determined using contractual currency exchange rates established at
the time of each trade.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the fund, along with
other affiliated entities of Fidelity Management & Research Company
(FMR), may transfer uninvested cash balances into one or more joint
trading accounts. These balances are invested in one or more
repurchase agreements for U.S. Treasury or Federal Agency obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury 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.
TAXABLE CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by
the SEC, the fund may invest in the Taxable Central Cash Fund (the
Cash Fund) managed by Fidelity Investments Money Management, Inc., an
affiliate of FMR. The Cash Fund is an open-end money market fund
available only to investment companies and other accounts managed by
FMR and its affiliates. The Cash Fund seeks preservation of capital,
liquidity, and current income by investing in U.S. Treasury securities
and repurchase agreements for these securities. Income distributions
from the Cash Fund are declared daily and paid monthly from net
interest income. Income distributions earned by the fund are recorded
as interest income in the accompanying financial statements.
RESTRICTED SECURITIES. The fund is permitted to invest in securities
that are subject to legal or contractual restrictions on resale. These
securities generally may be resold in transactions exempt from
registration or to the public if the securities are registered.
Disposal of these securities may involve time-consuming negotiations
and expense, and prompt sale at an acceptable price may be difficult.
At the end of the period, 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 $35,614,208 and $31,392,887, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a
monthly fee that is calculated on the basis of a group fee rate plus a
fixed individual fund fee rate applied to the average net assets of
the fund. The group fee rate is the weighted average of a series of
rates and is based on the monthly average net assets of all the mutual
funds advised by FMR. The rates ranged from .2500% to .5200% for the
period. The annual individual fund fee rate is .45%. In the event that
these rates were lower than the contractual rates in effect during the
period, FMR voluntarily implemented the above rates, as they resulted
in the same or a lower management fee. For the period, the management
fee was equivalent to an annualized rate of .74% 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., Fidelity International
Investment Advisors (FIIA), and Fidelity Investments Japan Limited
(FIJ). In addition, FIIA entered into a sub-advisory agreement with
its subsidiary, Fidelity International Investment Advisors (U.K.)
Limited (FIIA(U.K.)L). 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 FIIA(U.K.)L a fee based on costs incurred for either
service.
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 (collectively referred to as "the
Plans"). Under certain of the Plans, the class pays Fidelity
Distributors Corporation (FDC), an affiliate of FMR, a distribution
and service fee. A portion of this fee may be reallowed to securities
dealers, banks and other financial institutions for the distribution
of each class of shares and providing shareholder support services.
For the period, this fee was based on the following annual rates of
the average net assets of each applicable class:
CLASS A .25%
CLASS T .50%
CLASS B 1.00% *
CLASS C 1.00% *
* .75% REPRESENTS A DISTRIBUTION FEE AND .25% REPRESENTS A SHAREHOLDER
SERVICE FEE.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
For the period, each class paid FDC the following amounts, a portion
of which was retained by FDC:
PAID TO FDC RETAINED BY FDC
CLASS A $ 1,371 $ 143
CLASS T 36,815 2,078
CLASS B 23,274 17,530
CLASS C 13,011 11,025
$ 74,471 $ 30,776
SALES LOAD. FDC receives a front-end sales charge of up to 5.75% for
selling Class A shares, and 3.50% for selling Class T shares of the
fund. FDC receives the proceeds of contingent deferred sales charges
levied on Class B share redemptions occurring within six years of
purchase and Class C share redemptions occurring within one year of
purchase. Contingent deferred sales charges are based on declining
rates ranging from 5% to 1% for Class B and 1% for Class C, of the
lesser of the cost of shares at the initial date of purchase or the
net asset value of the redeemed shares, excluding any reinvested
dividends and capital gains. In addition, purchases of Class A and
Class T shares that were subject to a finder's fee bear a contingent
deferred sales charge on assets that do not remain in the fund for at
least one year. The Class A and Class T contingent deferred sales
charge is based on 0.25% of the lesser of the cost of shares at the
initial date of purchase or the net asset value of the redeemed
shares, excluding any reinvested dividends and capital gains. A
portion of the sales charges paid to FDC are paid to securities
dealers, banks and other financial institutions.
For the period, sales charge amounts paid to and retained by FDC were
as follows:
PAID TO FDC RETAINED BY FDC
CLASS A $ 3,626 $ 1,603
CLASS T 17,580 3,241
CLASS B 5,377 5,377 *
CLASS C 1,835 1,835 *
$ 28,418 $ 12,056
* WHEN CLASS B AND CLASS C SHARES ARE INITIALLY SOLD, FDC PAYS
COMMISSIONS FROM ITS OWN RESOURCES TO SECURITIES DEALERS, BANKS, AND
OTHER FINANCIAL INSTITUTIONS THROUGH WHICH THE SALES ARE MADE.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
TRANSFER AGENT FEES. Fidelity Investments Institutional Operations
Company, Inc., (FIIOC), an affiliate of FMR, is the transfer, dividend
disbursing and shareholder servicing agent for each class of the fund.
FIIOC receives account fees and asset-based fees that vary according
to the account size and type of account of the shareholders of the
respective classes of the fund. FIIOC pays for typesetting, printing
and mailing of all shareholder reports, except proxy statements. For
the period, the following amounts were paid to FIIOC:
AMOUNT % OF AVERAGE NET ASSETS
CLASS A $ 2,108 .39 *
CLASS T 20,558 .28 *
CLASS B 6,727 .29 *
CLASS C 4,188 .33 *
INSTITUTIONAL CLASS 4,480 .17 *
$ 38,061
* ANNUALIZED
ACCOUNTING FEES. Fidelity Service Company, Inc., 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 the following annual rates or range of annual rates of average
net assets for each of the following classes:
FMR EXPENSE LIMITATIONS REIMBURSEMENT
CLASS A 1.70% $ 3,056
CLASS T 1.95% 33,040
CLASS B 2.45% 11,231
CLASS C 2.45% 6,652
INSTITUTIONAL CLASS 1.45% 9,576
$ 63,555
Effective December 1, 1998, Class A, Class T, Class B, Class C and
Institutional Class expense limitations were changed from 2.00%,
2.25%, 2.75%, 2.75% and 1.75%; to 1.70%, 1.95%, 2.45%, 2.45% and 1.45%
of each class' average net assets, respectively.
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 $4,517 under this arrangement.
6. BENEFICIAL INTEREST.
At the end of the period, FMR and its affiliates were record owners of
approximately 19% of the total outstanding shares of the fund.
7. SHARE TRANSACTIONS.
Transactions for each class of shares for the periods are as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
SHARES DOLLARS
SIX MONTHS ENDED
APRIL 30, YEAR ENDED OCTOBER 31, SIX MONTHS ENDED APRIL 30, YEAR ENDED OCTOBER 31,
1999 1998A 1999 1998A
CLASS A Shares sold 41,207 103,525 $ 457,545 $ 1,119,865
Shares redeemed (16,054) (18,125) (177,532) (186,338)
Net increase (decrease) 25,153 85,400 $ 280,013 $ 933,527
CLASS T Shares sold 684,460 1,397,855 $ 7,783,928 $ 15,422,063
Shares redeemed (374,267) (191,228) (4,188,335) (1,955,961)
Net increase (decrease) 310,193 1,206,627 $ 3,595,593 $ 13,466,102
CLASS B Shares sold 106,041 456,271 $ 1,176,693 $ 5,032,634
Shares redeemed (78,113) (51,032) (863,122) (570,862)
Net increase (decrease) 27,928 405,239 $ 313,571 $ 4,461,772
CLASS C Shares sold 82,039 260,112 $ 923,890 $ 2,832,954
Shares redeemed (43,572) (37,952) (480,818) (392,926)
Net increase (decrease) 38,467 222,160 $ 443,072 $ 2,440,028
INSTITUTIONAL CLASS Shares 483,582 464,227 $ 5,582,517 $ 4,644,654
sold
Shares redeemed (482,718) - (5,648,775) -
Net increase (decrease) 864 464,227 $ (66,258) $ 4,644,654
</TABLE>
A SHARE TRANSACTIONS FOR CLASS A, CLASS T, CLASS B, CLASS C, AND
INSTITUTIONAL CLASS ARE FOR THE PERIOD NOVEMBER 3, 1997 (COMMENCEMENT
OF SALE OF SHARES) TO OCTOBER 31, 1998.
8. CHANGE IN INDEPENDENT AUDITOR.
Based on the recommendation of the Audit Committee of Fidelity Advisor
International Capital Appreciation Fund, the Board of Trustees has
determined not to retain PricewaterhouseCoopers LLP as the fund's
independent auditor and voted to appoint Deloitte & Touche LLP for the
fiscal year ended October 31, 1999. For the fiscal year ended October
31, 1998, PricewaterhouseCoopers LLP's audit reports contained no
adverse opinion or disclaimer of opinion; nor were their reports
qualified as to uncertainty, audit scope, or accounting principles.
Further, there were no disagreements between the fund and
PricewaterhouseCoopers LLP on accounting principles, financial
statement disclosure or audit scope, which if not resolved to the
satisfaction of PricewaterhouseCoopers LLP would have caused them to
make reference to the disagreement in their report.
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
Fidelity International Investment Advisors, Pembroke, Bermuda
Fidelity International Investment Advisors (U.K.) Limited, London,
England
Fidelity Investments Japan Limited, Tokyo, Japan
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Richard Spillane, Jr., Vice President
Kevin McCarey, Vice President
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
Matthew N. Karstetter, Deputy Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Robert C. Pozen
Thomas R. Williams *
ADVISORY BOARD
J. Gary Burkhead
Abigail P. Johnson
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Investments Institutional Operations Company, Inc.
Boston, MA
CUSTODIAN
Brown Brothers Harriman & Co.
Boston, MA
FOCUS FUNDS
Fidelity Advisor Consumer
Industries Fund
Fidelity Advisor Cyclical
Industries Fund
Fidelity Advisor Financial
Services Fund
Fidelity Advisor Health Care Fund
Fidelity Advisor Natural
Resources Fund
Fidelity Advisor Technology Fund
Fidelity Advisor Utilities Growth Fund
GROWTH FUNDS
Fidelity Advisor Latin America Fund
Fidelity Advisor Japan Fund
Fidelity Advisor Europe Capital Appreciation Fund
Fidelity Advisor International
Capital Appreciation Fund
Fidelity Advisor Overseas Fund
Fidelity Advisor Diversified International Fund
Fidelity Advisor Global Equity Fund
Fidelity Advisor TechnoQuantSM
Growth Fund
Fidelity Advisor Small Cap Fund
Fidelity Advisor Strategic
Opportunities Fund
Fidelity Advisor Mid Cap Fund
Fidelity Advisor Retirement Growth Fund
Fidelity Advisor Equity Growth Fund
Fidelity Advisor Large Cap Fund
Fidelity Advisor Dividend Growth Fund
Fidelity Advisor Growth
Opportunities Fund
AICAPI-SANN-0599 77847
1.703430.101
GROWTH AND INCOME FUNDS
Fidelity Advisor Growth & Income Fund
Fidelity Advisor Equity Income Fund
Fidelity Advisor Asset Allocation Fund
Fidelity Advisor Balanced Fund
TAXABLE INCOME FUNDS
Fidelity Advisor Emerging Markets Income Fund
Fidelity Advisor High Yield Fund
Fidelity Advisor Strategic Income Fund
Fidelity Advisor Mortgage
Securities Fund
Fidelity Advisor Government Investment Fund
Fidelity Advisor Intermediate Bond Fund
Fidelity Advisor Short Fixed-Income Fund
MUNICIPAL FUNDS
Fidelity Advisor Municipal Income Fund
Fidelity Advisor Intermediate Municipal Income Fund
MONEY MARKET FUNDS
Prime Fund
Treasury Fund
Tax-Exempt Fund
(2_FIDELITY_LOGOS)(registered trademark)
